/raid1/www/Hosts/bankrupt/TCR_Public/200406.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, April 6, 2020, Vol. 24, No. 96
Headlines
1011778 BC: Moody's Affirms Ba3 CFR & Alters Outlook to Negative
A.P.B. TRUCKING: Seeks to Hire DBM Accounting as Accountant
ADVISOR GROUP: S&P Downgrades ICR to 'B-'; Outlook Stable
AKORN INC: Signs CVR Agreement with American Stock
ALASKA UROLOGICAL: Hires Cabot Christianson as Counsel
ALTERATIONS BY LUCY: Seeks to Hire Jason A. Burgess as Counsel
AMERICAN COMMERCIAL: Taps E&Y to Provide Tax Advisory Services
ANTERO MIDSTREAM: Moody's Lowers CFR to B2, Outlook Negative
ANTERO RESOURCES: Fitch Cuts LT IDR to B; On Rating Watch Negative
ANTERO RESOURCES: Moody's Lowers CFR to B3, Outlook Negative
APX GROUP: Moody's Affirms B3 CFR & Alters Outlook to Negative
ART VAN FURNITURE: Russell R. Johnson Represents Utility Companies
ASCENT RESOURCES: S&P Downgrades ICR to 'CCC+'; Outlook Negative
ASP NAPA: S&P Downgrades ICR to 'CCC' on Expected Liquidity Issues
ASSOCIATED ASPHALT: Moody's Affirms B3 CFR, Outlook Remains Stable
AVIANCA HOLDINGS: Fitch Cuts LongTerm IDRs to C; Off Watch Negative
BARRACUDA NETWORKS: Fitch Affirms B LongTerm IDR, Outlook Stable
BLACKRIDGE TECHNOLOGY HOLDINGS: Case Summary & Unsecured Creditors
BLUCORA INC: S&P Alters Outlook to Negative, Affirms 'BB' ICR
BOMBARDIER REC: Moody's Lowers CFR to B1 & Alters Outlook to Neg.
BOSS OYSTER: Seeks to Hire James M. Messer as Special Counsel
BOY SCOUTS OF AMERICA: Panel Hires Berkeley as Financial Advisor
BRIGGS & STRATTON: Reduces Manufacturing Activity Amid Covid-19
BUFFETS LLC: James Black's Claims Barred, Court Says
BULL SHIRTS: Taps Hoffman & Saweris as Legal Counsel
C & D FRUIT: Gets Final Approval on Cash Collateral Use
CALIFORNIA RESOURCES: Moody's Lowers CFR to Caa3, Outlook Negative
CAMBER ENERGY: To Conduct a Virtual Special Meeting on April 16
CAMERON TRANSPORT: Seeks to Hire Robert R. Radel as Counsel
CAPSTONE OILFIELD: Gets Final Agreed Cash Collateral Order Approval
CARVANA CO: Subsidiary Sells $495 Million Finance Receivables
CDS US INTERMEDIATE: Moody's Affirms Ca CFR, Outlook Negative
CFS BRANDS: S&P Lowers ICR to B- on Expectations of Weaker Demand
CHILDREN OF PROMISE: S&P Lowers Bond Rating to CCC+; Outlook Neg.
CITIUS PHARMACEUTICALS: Signs Exclusive Option Accord with Novellus
COASTAL HOME: Westcoast Objects to Plan, Wants Trustee
COMSTOCK RESOURCES: Fitch Affirms B IDR & Alters Outlook to Neg.
CONNECT INSURANCE: Case Trustee Seeks Chapter 7 Conversion
CORSAIR GROUP: S&P Alters Outlook to Negative, Affirms 'B' ICR
COSTA HOLLYWOOD: Hires Cushman & Wakefield as Broker
COUNTRYSIDE PROPERTY: Exclusivity Period Extended Through May 25
CPM HOLDINGS: Moody's Lowers CFR to Caa1 & Alters Outlook to Neg.
CRAFTWORKS PARENT: Committee Hires FTI as Financial Advisor
CRAFTWORKS PARENT: Committee Hires Pachulski Stang as Counsel
CREW ENERGY: S&P Lowers ICR to 'CCC+'; Outlook Negative
DELL TECHNOLOGIES: Fitch Affirms BB+ LongTerm IDR, Outlook Negative
DELL TECHNOLOGIES: S&P Alters Outlook to Neg., Affirms 'BB+' ICR
DENBURY RESOURCES: Provides Operational and Financial Update
DEW TRUCKEN: Hires Sellers & Mitchell as Attorney
EASTERN PACIFIC: Hires Rosenburg Musso as Attorney
EKSO BIONICS: Grants 54,668 Restricted Stock Units to Executives
ELLINGSWORTH RESIDENTIAL: Hires Latham Luna as Legal Counsel
EMERALD CASINO: Bankr. Court's Second Distribution Order Upheld
EQM MIDSTREAM: Moody's Lowers CFR to Ba3, Outlook Remains Negative
EQT CORP: Moody's Lowers CFR to Ba3, Outlook Remains Negative
EQUINOX HOLDINGS: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg.
FIRST STATE BANK: MVB Acquires Assets; FDIC Named as Receiver
FLEXENTIAL INTERMEDIATE: S&P Cuts ICR to 'CCC+' on COVID-19 Impact
FLYNN RESTAURANT: Moody's Affirms B3 CFR & Alters Outlook to Stable
FORESIGHT ENERGY: Thompson, Akin Represent First Lien Group
FOSSIL CREEK: Lender Wins Dismissal of Case
FRANK & LUPE II: Hires Allen Barnes as Attorney
FRANKLIN CAMBRIDGE: Hires LTC Back Office as Accountant
FRONTIER COMMUNICATIONS: Skips Payments; In Talks With Noteholders
GENCANNA GLOBAL: Committee Taps Foley & Lardner as Legal Counsel
GEO-TECH POLYMERS: Seeks Authorization to Use Cash Collateral
GHOTRA HOSPITALITY: Seeks to Hire Mark Dodds as Accountant
GLOBAL CORE: Seeks to Hire Mark Dodds as Accountant
GREATER BLESSED: Hires David Marshall Brown as Counsel
GREENTEC-USA INC: Seeks to Hire Cahn & Samuels as Special Counsel
HARSCO CORP: S&P Downgrades ICR to 'BB-'; Outlook Negative
HARTSHORNE HOLDINGS: Gets Approval to Hire FTI, Appoint CRO
HARTSHORNE HOLDINGS: Taps Perella Weinberg as Investment Banker
HARTSHORNE HOLDINGS: Taps Squire Patton as Legal Counsel
HEATING & PLUMBING: Allowed to Use Cash Collateral Until April 15
HIGHLAND CAPITAL: Court Denies Bid for Chapter 11 Trustee
HLPG NEWACO: Seeks to Hire Renaissance Consulting as Accountant
HOLCOMB ACQUISITIONS: Unsecureds to Recover 14% in Plan
II-VI INC: S&P Downgrades ICR to 'B+' on Macroeconomic Weakness
JAGUAR HEALTH: Incurs $38.5 Million Net Loss in 2019
JAVO BEVERAGE: Preliminary Injunction Bid vs CEV, Corey Tossed
JT MEAT & GROCERY: Seeks to Hire Platze Swergold as Counsel
KELLEY'S HONEY: Wins Dismissal of Chapter 11 Case
KENAN ADVANTAGE: Moody's Cuts CFR to Caa1, On Review for Downgrade
KESTRA ADVISOR: S&P Lowers ICR to 'B' on Rate Cuts; Outlook Stable
KIMBLE DEVELOPMENT: Allowed to Use Cash Collateral on Final Basis
KRISU HOSPITALITY: Court Denies Chapter 11 Trustee Bid
L BRANDS: S&P Lowers ICR to 'B+' on Expected Weak Demand
LIVINGSTON INTERNATIONAL: S&P Alters Outlook to Negative
LOGIX INTERMEDIATE: S&P Downgrades ICR to 'CCC'; Outlook Negative
LONGHORN JUNCTION: Court Confirms Chapter 11 Plan
LUCID ENERGY: S&P Alters Outlook to Negative, Affirms 'B' ICR
M M & D HARVESTING: Hires Deborah Holcomb as Bookkeeper
M M & D HARVESTING: Hires Robert Holcomb as President
M M & D HARVESTING: Seeks to Hire Stubbs & Perdue as Counsel
MATADOR RESOURCES: S&P Downgrades ICR to 'B-'; Outlook Negative
MAX FINE FURNITURE: Seeks to Hire JS Whitworth as Attorney
MERCHANT LLC: Seeks to Hire Donnarumma Law as Special Counsel
METRO-GOLDWYN-MAYER INC: S&P Affirms 'B+' ICR; Outlook Negative
MIAMI AIR INTERNATIONAL: Hires Genovese Joblove as Counsel
MISSISSIPPI PHOSPHATES: PathForward Okayed as Successor Trustee
MJJW PORTFOLIO: Court Conditionally Approves Disclosure Statement
MNP INDUSTRIES: Seeks to Hire David W. Steen as Counsel
MOUNTAIN PROVINCE: S&P Cuts ICR to 'CCC+' on Cash Flow Uncertainty
MR. TORTILLA: Has Deal to Defer Plan Hearing to April 9
MRO HOLDINGS: S&P Downgrades ICR to 'B' on Expected Lower Demand
NASHEF LLC: Hearing on Cash Collateral Use Continued to April 30
NATIONAL AMUSEMENTS: S&P Lowers ICR to 'B-' on Reduced Liquidity
NATIONAL QUARRY: Seeks to Hire Davis Forensic as Financial Advisor
NORDAM GROUP: S&P Cuts ICR to 'B' on Coronavirus Ramifications
NSHE CA BULLS: Unsecured Creditors Will be Paid in Full
O'LOUGHLIN LTD: Unsecureds to Recover 5% Under Plan
ONE HUNDRED FOLD: Amends Plan, Hopes for Consensual Support
OPPENHEIMER HOLDINGS: S&P Alters Outlook to Stable, Affirms B+ ICR
OPTIMUM CHOICE: Unsecureds to Recover 31% in Plan
PA CO-MAN INC: Hires Campbell & Levine as Special Counsel
PARCELS B AND C: Seeks to Hire Behar Gutt as Counsel
PARK-OHIO INDUSTRIES: S&P Downgrades ICR to 'B' on Lower Earnings
PARKING MANAGEMENT: Unsecured Creditors to Get 100% in Plan
PEACE INC: Case Summary & 8 Unsecured Creditors
PEAK SERUM: Seeks to Hire Dennis & Company as Accountant
PG&E CORP: Axed Employee's Lawsuit May Proceed in State Court
PG&E CORP: Court to Extend Bar Date for Securities Suit Plaintiffs
PHUONG NAM: Unsecureds to Recover 10% Under Plan
PIER 1 IMPORTS: Committee Seeks to Hire Foley & Lardner as Counsel
PLASKOLITE PPC: S&P Alters Outlook to Negative on Reduced Demand
PREMIER BRANDS: S&P Alters Outlook to Negative, Affirms 'B-' ICR
PRODIGY DIALYSIS: Seeks to Hire Kotzan CPA as Accountant
PROJECT SILVERBACK: S&P Alters Outlook to Neg., Affirms 'B-' ICR
PROPULSION ACQUISITION: Moody's Cuts CFR to Caa2, Outlook Negative
PS HOLDCO: S&P Lowers ICR to 'B'; Outlook Negative
PURE GLOBAL: Gets Initial Order Under CCAA; E&Y Is Monitor
RANCHO CIELO: Hires Jeffrey S. Shinbrot as Counsel
RANGE RESOURCES: Moody's Lowers CFR to B2, Outlook Remains Negative
RAVN AIR: Case Summary & 30 Largest Unsecured Creditors
RAYONIER ADVANCED: Pangaea, et al., Have 5.2% Stake as of March 31
RESOLUTE INVESTMENT: Moody's Lowers CFR to B1, Outlook Stable
REYES DRYWALL: Gets Court Approval to Hire Bankruptcy Attorney
RHC LLC: Seeks to Extend Exclusivity Period to April 24
RICHARD A. NEISLER JR.: Kizer Updates on Crockett Gin, 3 Others
RIVORE METALS: To Seek Plan Confirmation on April 29
RJT REAL ESTATE: To Hike Monthly Payments to RMM
ROAD INFRASTRUCTURE: S&P Alters Outlook to Neg., Affirms CCC+ ICR
ROYALE ENERGY: Incurs $348K Net Loss in 2019
RUDY'S BARBERSHOP: Case Summary & 20 Largest Unsecured Creditors
S.A.S.B. INC: Exclusivity Period Extended to May 17
SALLY HOLDINGS: Moody's Alters Outlook on Ba2 CFR to Negative
SAMSONITE INTERNATIONAL: S&P Lowers ICR to 'BB-'; Outlook Negative
SANAM CONYERS: To Seek Plan Confirmation on April 30
SEQUA CORP: S&P Alters Outlook to Negative, Affirms 'CCC+' ICR
SHANNON STALEY: June 1 Hearing on Disclosure Statement
SIGNET JEWELERS: S&P Downgrades ICR to 'B+'; Outlook Negative
SOUTH COAST BEHAVIORAL: Hires Nicastro & Associates as Counsel
SOUTHWESTERN ENERGY: Moody's Affirms Ba2 CFR, Outlook Stable
SPECIALTY BUILDING: S&P Downgrades ICR to 'B-' on COVID-19 Impact
SPI ENERGY: Appoints Dongying's Zhang Jing to Board of Directors
SSH HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B' ICR
STORE IT REIT: Wins Confirmation of Liquidating Plan
SUNPOWER CORP: Antoine Larenaudie Resigns as Director
SUPERIOR ENERGY: Receives Noncompliance Notice from NYSE
TALBOTS INC: S&P Downgrades ICR to 'CCC+' on Liquidity Concerns
TAMARA HOME CARE: Says Lone Objection From UST Should be Overruled
TARONIS TECHNOLOGIES: Signs $1.7 Million Securities Purchase Deal
TENET HEALTHCARE: Fitch to Rate New Secured 1st Lien Notes 'B+/RR3'
TENET HEALTHCARE: Moody's Rates New 1st Lien Notes Due 2025 'B1'
TERRY J. LEMONS: Seeks to Hire Rountree Leitman as Attorney
THOR INDUSTRIES: S&P Lowers ICR to 'BB-' on COVID-19 Impact
THRUSH AIRCRAFT: Seeks to Hire National CRS as Financial Advisor
TOUGH MUDDER: Case Trustee Seeks Chapter 7 Conversion
TRANSDIGM INC: Moody's Rates Proposed Sr. Sec. Notes Ba3, On Review
TRONOX LTD: S&P Alters Outlook to Negative & Affirms 'B' ICR
TTK RE ENTERPRISE: Hires Century 21 as Real Estate Broker
TTK RE ENTERPRISE: Hires Soleil Sotheby's as Real Estate Broker
UC HOLDINGS: S&P Places 'B' ICR on CreditWatch Negative
ULTRA PETROLEUM: OpCo Noteholders File 2nd Modified Statement
US SHIPPING CORP: S&P Downgrades ICR to 'CCC+'; Outlook Negative
VAC FUND HOUSTON: Has Committee-Backed Sale Plan
VBI VACCINES: Collaborates with NRC to Develop COVID-19 Vaccine
VERDICORP INC: Seeks to Hire Weeks Auction as Auctioneer
VERMILION ENERGY: S&P Cuts ICR to 'B' on Weak Industry Conditions
VERMILLION INC: Delays Form 10-K Filing Over COVID-19 Pandemic
VITO FASCIGLIONE: Allowed to Use Cash Collateral on Interim Basis
VMWARE INC: Fitch Affirms BB+ LT IDR, Outlook Negative
WATSON GRINDING: Seeks Authorization to Use Cash Collateral
WATSON VALVE: Hires MACCO Restructuring as Financial Advisor
WEIAND AUTOMOTIVE: No Quick Ruling on Claim Discharge Dispute
WEST COAST DISTRIBUTION: Liquidating its Assets to Satisfy Claims
WHITE STAR: Judge Approves Cash Collateral Stipulation With RBL
WINNEBAGO INDUSTRIES: S&P Lowers ICR to 'B+' on COVID-19 Impact
WOODCREST ACE: Gets Approval to Use Cash Collateral
YORKER NY REALTY: Hires J. Iandolo Law as Special Counsel
YUM! BRAND: S&P Assigns 'B+' Rating to New Senior Unsecured Notes
ZDN INC: Gets Authorization to Use Cash Collateral
ZPOWER TEXAS: Seeks to Hire Lain Faulkner as Financial Advisor
[*] S&P Takes Negative Rating Actions on U.S. Dental Manufacturers
[*] S&P Takes Rating Actions on Dental Support Organizations
[^] BOND PRICING: For the Week from March 30 to April 3, 2020
*********
1011778 BC: Moody's Affirms Ba3 CFR & Alters Outlook to Negative
----------------------------------------------------------------
Moody's Investors Service affirmed 1011778 B.C. Unlimited Liability
Co.'s Ba3 Corporate Family Rating, Ba3-PD Probability of Default
Rating, Ba2 senior secured first lien bank credit facility ratings,
Ba2 senior secured first lien note ratings, and B2 secured second
lien notes rating. Moody's also affirmed Tim Hortons Inc.'s (Tim's)
B1 senior unsecured legacy notes. In addition, Moody's assigned a
Ba2 rating to the company's proposed $500 million 1st lien senior
secured notes. 1011778 B.C.'s Speculative Grade Liquidity rating
was downgraded to SGL-2 from SGL-1. The ratings outlook was changed
to negative from stable.
"The negative outlook reflects the risk that there may be a
sustained weakening in 1011778 B.C.'s credit metrics as they are
increasing debt levels at a time when the company is facing
significant uncertainty surrounding the potential length and
severity of restaurant closures and the ultimate impact that these
closures will have on 1011778 B.C.'s revenues, earnings and
liquidity." stated Bill Fahy, Moody's Senior Credit Officer. "The
outlook also takes into account the negative impact on consumers
ability and willingness to spend on eating out until the crisis
materially subsides," Fahy added.
Assignments:
Issuer: 1011778 B.C. Unltd Liability Co.
Senior Secured Regular Bond/Debenture, Assigned Ba2 (LGD3)
Downgrades:
Issuer: 1011778 B.C. Unltd Liability Co.
Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1
Outlook Actions:
Issuer: 1011778 B.C. Unltd Liability Co.
Outlook, Changed To Negative From Stable
Issuer: Tim Hortons Inc.
Outlook, Changed To Negative From No Outlook
Affirmations:
Issuer: 1011778 B.C. Unltd Liability Co.
Probability of Default Rating, Affirmed Ba3-PD
Corporate Family Rating, Affirmed Ba3
Senior Secured Bank Credit Facility, Affirmed Ba2 (LGD3)
Senior Secured 2nd Lien Regular Bond/Debenture, Affirmed B2 (LGD5)
Senior Secured 1st Lien Regular Bond/Debenture, Affirmed Ba2
(LGD3)
Issuer: Tim Hortons Inc.
Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5)
RATINGS RATIONALE
The affirmation of the Ba3 CFR reflects the continuation of
drive-through, delivery and curbside pick-up operations, good
liquidity to manage through several months of significant revenue
decline, and Moody's expectation that 1011778 B.C. will manage the
business to preserve liquidity and then use cash flow to reduce
debt once the crisis subsides. The downgrade of the Speculative
Grade Liquidity to SGL-2 indicates good liquidity and reflects the
negative impact on 1011778 B.C.'s cash flow generation over the
near term driven by the restrictions and closures placed on its
restaurants. The SGL-2 is supported by its significant cash
balances of approximately $3.0 billion (inclusive of proposed note
offering) and the absence of any near-term maturities. Cash
balances increased as a result of 1011778 B.C. fully drawing down
its revolving credit facility and will be further bolstered by the
proposed $500 million note offering.
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 restaurant
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 1011778 B.C.'s credit profile,
including its exposure to widespread location restrictions and
closures have left it vulnerable to shifts in market sentiment in
these unprecedented operating conditions and 1011778 B.C. 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 of the breadth and severity of the
shock, and the broad deterioration in credit quality it has
triggered.
1011778 B.C.'s Ba3 CFR benefits from its brand recognition and
meaningful scale in terms of systemwide units of its three
restaurant concepts, Burger King, Popeyes and Tim Hortons. The
company's franchised focused business model that provides more
stability to earnings and cash flow, diversified day part and food
offerings, and good liquidity are also credit positive. 1011778
B.C. is constrained by its relatively high leverage and modest
retained cash flow to debt, as well as the high level of
promotional activities by competitors and a value focused consumer
that will continue to pressure same store operating performance.
Corporate governance risks at 1011778 B.C. is low given its
diversified board structure and consistent operating track record.
In addition, 3G Restaurant Brands Holdings LP, an affiliate of
private investment firm 3G Capital Partners, Ltd has continued to
reduce its ownership in the company to approximately 32% of the
combined voting power with respect to 1011778 B.C.'s parent company
Restaurant Brands International.
Restaurants by their nature and relationship with regards to
sourcing food and packaging, as well as having an extensive labor
force and constant consumer interaction are deeply entwined with
sustainability, social and environmental concerns. While these may
not directly impact the credit, these factors should positively
impact brand image and result in a more positive view of the brand
overall.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could result in an upgrade include a sustained
strengthening of debt protection metrics with debt to EBITDA of
around 5.0 times and maintaining EBIT coverage of interest of
around 3.0 times. A higher rating would also require the company's
commitment to preserving credit metrics during periods of operating
difficulties and to maintain very good liquidity.
Factors that could result in a downgrade include a sustained
deterioration in credit metrics despite a lifting of restrictions
on restaurants and a subsequent recovery in earnings and liquidity
with debt to EBITDA above 5.75 times or EBIT to interest under 2.5
times on a sustained basis.
1011778 B.C. Unlimited Liability Company, owns, operates and
franchises over 18,000 Burger King hamburger quick service
restaurants, more than 4,880 Tim Hortons restaurants and over 3,190
Popeyes restaurants. Annual revenues are around $5.4 billion,
although systemwide sales are over $33 billion. 3G Restaurant
Brands Holdings LP, owns approximately 32% of the combined voting
power with respect to RBI and is affiliated with private investment
firm 3G Capital Partners, Ltd.
The principal methodology used in these ratings was Restaurant
Industry published in January 2018.
A.P.B. TRUCKING: Seeks to Hire DBM Accounting as Accountant
-----------------------------------------------------------
A. P. B. Trucking, LLC, d/b/a Batiste's Trucking seeks authority
from the US Bankruptcy Court for the Middle District of Louisiana
to employ DBM Accounting & Tax as its accountant.
DBM Accounting will provide the Debtor with accounting services for
the Debtor which may be necessary.
Damitia Boyd-McKinney, CPA, of DBM Accounting & Tax has agreed to
provide the services at an hourly rate of $125.
Ms. Boyd-McKinney assures the court that the firm is disinterested
and holds no claim or interest adverse to the estate.
The firm can be reached through:
Damitia Boyd-McKinney, CPA
DBM Accounting & Tax
4555 Brittany Lane
Grand Prairie, TX 75052
Phone: (214)418-0426
About A. P. B. Trucking, LLC
A.P.B. Trucking, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. La. Case No. 20-10213) on March 2,
2020, listing under $1 million on both assets and liabilities. Ryan
J. Richmond, Esq. at RICHMOND LAW FIRM, LLC, represents the Debtor
as counsel.
ADVISOR GROUP: S&P Downgrades ICR to 'B-'; Outlook Stable
---------------------------------------------------------
S&P Global Ratings said it lowered its issuer credit rating on
Advisor Group Holdings Inc. to 'B-' from 'B'. At the same time, S&P
removed its rating from CreditWatch with negative implications. The
outlook is stable.
S&P also lowered its rating on the company's first-lien secured
debt to 'B-' from 'B' and its rating on the company's senior
unsecured notes to 'CCC' from 'CCC+'.
"The downgrade reflects our expectation for Advisor Group's
profitability and debt service capacity to weaken as a result of
the Federal Reserve's recent rate cuts and declining equity
markets. Specifically, cash sweep revenues account for
approximately 20% of pro forma combined net revenues (for Advisor
Group and Ladenburg, which Advisor Group acquired earlier in 2020)
for the last 12 months ended Sept. 30, 2019. The company has stated
previously that each 25 basis points (bps) cut would lead to a
decline in EBITDA of approximately $15 million. Thus, we believe
the 150 bps of recent cuts could result in a decline in EBITDA of
around $90 million," S&P said.
"Additionally, we believe the equity market decline could lead to a
decrease in the firm's revenue from asset based accounts as well as
mutual funds and annuity trail fees paid over time by product
sponsors. We estimate that approximately 45% of Advisor Group's pro
forma net revenues have relatively high market correlation.
Furthermore, we would expect the drawdown could lower net revenue
by between $40 to $90 million over 12 months if markets stay
depressed through the end of the year," S&P said.
While S&P expects that the company may take some mitigating actions
to help dampen the blow to earnings, the rating agency believes
these actions would likely provide only limited offset. It
currently does not expect that the company will voluntarily pay
down debt in 2020.
"The stable outlook reflects our expectation for Advisor Group's
earnings and debt service coverage to be under pressure in 2020 but
for the company to stay in a sufficient liquidity position and
maintain comfortable cushion relative to its springing leverage
covenant," S&P said.
"We could lower the ratings if the company's leverage covenant is
activated and minimal cushion is maintained versus the 7.5x
threshold. We could also lower the ratings if Advisor Group's debt
service coverage approaches 1.2x, liquidity deteriorates, or we
observe meaningful attrition of advisors from the company's
platform," the rating agency said.
An upgrade is unlikely over the next 12 months, according to S&P.
AKORN INC: Signs CVR Agreement with American Stock
--------------------------------------------------
As previously disclosed, Akorn, Inc. and certain current and former
Company officers and directors were named defendants in a putative
class action litigation captioned In re Akorn, Inc. Data Integrity
Securities Litigation, C.A. No. 18-cv-1713 (N.D. Ill.), filed in
the United States District Court for the Northern District of
Illinois. On Aug. 9, 2019, the Company and the other defendants in
the Securities Class Action entered into a Stipulation and
Agreement of Settlement to resolve the Securities Class Action and
the claims of the putative class. On Aug. 26, 2019, the Court,
among other things, preliminarily approved the settlement, subject
to final approval at a settlement hearing. At the Settlement
Hearing on March 13, 2020, the Court granted the lead plaintiff's
unopposed motion for final approval of the class action settlement
and plan of allocation, certified a plaintiffs' class for
settlement purposes, found the settlement consideration fair,
reasonable and adequate, and approved lead plaintiff's application
for an award of attorneys' fees and litigation expenses. Later on
March 13, 2020, the Court entered a final order and judgment.
The terms of the Settlement Agreement provide for the release of
the class claims in exchange for a combination of (i) $27.5 million
in insurance proceeds from the Company's D&O insurance policies,
(ii) the issuance by the Company of approximately 6.5 million
shares of the Company's common stock, no par value per share, and
any additional shares of Company common stock that are released as
a result of the expiration of out of the money options through Dec.
31, 2024 and (iii) the issuance by the Company of contingent value
rights, which have been designated the "Series A Contingent Value
Rights", with a five year term, subject to an extension of up to
two years under certain circumstances. In accordance with the
terms of the Settlement Agreement, a total of 6,713,905 Settlement
Shares and a total of 6,713,905 CVRs were issued into separate
escrow accounts on
April 1, 2020.
The Settlement Shares and the CVRs were issued pursuant to the
exemption from registration provided by Section 3(a)(10) of the
Securities Act of 1933, as amended. The Company will submit a
Shares Outstanding Change Form to NASDAQ in respect of the issuance
of the Settlement Shares. The Company has made an application to
list the CVRs on the NASDAQ Global Select Market. If the listing is
approved, the CVRs will trade under the ticker symbol "AKRXZ".
CVR Agreement
In connection with the agreements contemplated by the Settlement
Agreement, the Company entered into a Contingent Value Rights
Agreement, dated April 1 2020, with American Stock Transfer & Trust
Company, LLC, as trustee. In accordance with the terms of the
Settlement Agreement, and pursuant to the CVR Agreement, holders of
the CVRs are entitled to receive an annual cash payment from the
Company of 33.3% of "Excess EBITDA" (defined in the CVR Agreement
as earnings before interest, taxes, depreciation and amortization
(EBITDA) above the amount of EBITDA required to meet a 3.0x net
leverage ratio, assuming a $100.0 million minimum cash cushion,
before any such CVR payment is triggered). To the extent any such
annual payments are triggered under the CVR Agreement, they are
capped at an aggregate of $12.0 million per year and $60.0 million
in the aggregate during the term of the CVR Agreement.
Upon certain change of control transactions during the term of the
CVR Agreement, if the Company's senior debt and other debt for
borrowed money is repaid in full in cash, the CVRs entitle the
holders thereof to a cash payment in the aggregate amount of $30.0
million. If the Company is the subject of a voluntary or
involuntary bankruptcy filing during the term of the CVR Agreement,
holders of the CVRs are entitled to receive in the aggregate a
$30.0 million general unsecured claim, which general unsecured
claim will be subordinated to the Company's senior debt in
accordance with the terms of the Settlement Agreement. The $60.0
million cap on annual payments does not apply to the Change of
Control Payment, if any, or affect the Bankruptcy Claim, should it
arise. No further amounts are payable under the CVR Agreement
following such a change of control transaction or bankruptcy event.
About Akorn
Headquartered in Lake Forest, Illinois, Akorn, Inc. --
http://www.akorn.com/-- is a specialty pharmaceutical company
engaged in the development, manufacture and marketing of
multi-source and branded pharmaceuticals. Akorn has manufacturing
facilities located in Decatur, Illinois; Somerset, New Jersey;
Amityville, New York; Hettlingen, Switzerland and Paonta Sahib,
India that manufacture ophthalmic, injectable and specialty sterile
and non-sterile pharmaceuticals.
Akorn reported a net loss of $226.8 million for the year ended Dec.
31, 2019, compared to a net loss of $401.91 million on $694.02
million for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the
Company had $1.28 billion in total assets, $1.05 billion in total
liabilities, and $234.29 million in total shareholders' equity.
BDO USA, LLP, in Chicago, Illinois, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
Feb. 26, 2020, citing that the Company has suffered recurring
losses from operations and has a net working capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
* * *
As reported by the TCR on Feb. 24, 2020, Moody's Investors Service
downgraded the ratings of Akorn, Inc. including the Corporate
Family Rating to Caa3 from Caa1. The downgrade reflects the high
risk of a near-term bankruptcy filing by Akorn, given its ongoing
litigation and $845 million term loan maturity in April 2021.
Also in February 2020, S&P Global Ratings lowered its issuer credit
rating on Akorn Inc. to 'CCC-' from 'B-' with negative outlook.
The negative outlook reflects the increasing possibility that Akorn
will file for Chapter 11 protection under the U.S. Bankruptcy Code
in the next six months to facilitate repayment of its outstanding
debt.
ALASKA UROLOGICAL: Hires Cabot Christianson as Counsel
------------------------------------------------------
Alaska Urological Institute, P.C., seeks authority from the U.S.
Bankruptcy Court for the District of Alaska to employ the Law
Offices of Cabot Christianson, P.C., as counsel to the Debtor.
Alaska Urological requires Cabot Christianson to:
a. prepare the necessary schedules of assets and liabilities
and related pleadings;
b. attend creditor's meetings;
c. resolve issues concerning the rights of secured, priority
and unsecured creditors;
d. pursue causes of action where appropriate;
e. prepare and obtain court approval of a disclosure statement
and plan of reorganization; and
f. assist the Debtor on other matters relative to the
administration of the estate.
Cabot Christianson will be paid based upon its normal and usual
hourly billing rates. The firm will also be reimbursed for
reasonable out-of-pocket expenses incurred.
Cabot Christianson, partner of the Law Office of Cabot
Christianson, 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.
Cabot Christianson can be reached at:
Cabot Christianson, Esq.
LAW OFFICES OF CABOT CHRISTIANSON
911 West 8th Avenue, Suite 201
Anchorage, AK 99501
E-mail: cabot@cclawyers.net
About Alaska Urological Institute
Alaska Urological Institute, P.C., is a medical group specializing
in urology, radiation oncology, registered dietitian or nutrition
professional, nurse practitioner, family medicine, medical
oncology, physician assistant, hematology/oncology, anesthesiology,
plastic and reconstructive surgery and more.
Alaska Urological Institute, P.C., based in Anchorage, AK, filed a
Chapter 11 petition (Bankr. Alaska Case No. 20-00086) on March 25,
2020. Cabot Christianson, Esq., at the Law Office of Cabot
Christianson, P.C., serves as bankruptcy counsel.
In its petition, the Debtor estimated $10 million to $50 million in
assets and $1 million to $10 million in liabilities. The petition
was signed by William R. Clark, president, shareholder.
ALTERATIONS BY LUCY: Seeks to Hire Jason A. Burgess as Counsel
--------------------------------------------------------------
Alterations By Lucy and Crisp & Clean Dry Cleaning and More LLC
seeks authority from the U.S. Bankruptcy Court for the Middle
District of Florida to employ The Law Offices of Jason A. Burgess,
LLC as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
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.
Mr. Burgess will charge $335 per hour for his services and $75 per
hour for paralegal time.
Mr. Burgess acknowledges receipt of the $6,770, and that $1,717 was
paid as filing fee required to commence this Chapter 11 bankruptcy
case.
Mr. Burgess assures the court that he does not represent any
interest adverse to the Debtor or its estate.
The counsel 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 Alterations By Lucy and Crisp and
Clean Dry Cleaning and More LLC
Alterations By Lucy and Crisp and Clean Dry Cleaning and More LLC
sought protection under Chapter 11 if the Bankruptcy Code (Bankr.
M.D. Fla. Case No. 20-00933) on March 12, 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.
AMERICAN COMMERCIAL: Taps E&Y to Provide Tax Advisory Services
--------------------------------------------------------------
American Commercial Lines Inc. received approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire Ernst &
Young LLP to provide tax advisory services.
The services to be provided include:
A. Routine On-Call Tax Advisory Services:
1. EY LLP will provide routine tax advice and assistance
concerning issues as requested by American Commercial Lines and its
affiliates when such projects are not covered by a separate
statement of work and do not involve any significant tax planning
or projects.
2. On-call tax advisory services are intended to include
responding to general tax questions and assignments that are
expected, at the beginning of the project, to involve total
professional time not to exceed (with respect to the specific
project) $10,000 in professional fees. The scope of these services
may be agreed to orally or through written communications with
Debtors such as e-mails.
2. On-call tax advisory services include assistance with tax
issues by answering one-off questions, drafting memos describing
how specific tax rules work, assisting with general transactional
issues, and assisting the Debtors in connection with their dealings
with tax authorities (other than representing the Debtors in an
examination or an appeal before the IRS or other taxing authority).
B. Bankruptcy Tax Services
1. Analyzing the tax implications of reorganization or
restructuring alternatives Debtors are evaluating that may result
in a change in the equity, capitalization or ownership of the
shares of the Debtors or their assets;
2. Analyzing the indirect operating tax implications of
reorganization or restructuring alternatives Debtors are
evaluating;
3. Analyzing the U.S. federal and state income tax
consequences of cancellation of indebtedness income (CODI) and the
tax impact of the bankruptcy on future cash taxes;
4. Advising the Debtors in developing an understanding of the
tax implications of their bankruptcy restructuring alternatives and
post-bankruptcy operations including, as needed, research and
analysis of Internal Revenue Code sections, Treasury regulations,
state tax statutes and regulations, case law and other relevant
U.S. tax authorities, and assisting and advising in securing
rulings from the Internal Revenue Service or applicable state tax
authorities;
5. Providing tax advisory services regarding the availability,
limitations on the use and preservation of tax attributes such as
net operating losses, credits, and tax basis of assets, including
tax calculations to compare the potential consequences of a
hypothetical Section 382 ownership change qualifying under Section
382(l)(5) vs. Section 382(l)(6);
6. If and as applicable, providing tax advisory services
regarding the validity of tax claims in order to determine if the
tax amount claimed reasonably represents the correct tax liability
pursuant to applicable tax law;
7. Analyzing legal and other professional fees incurred during
the bankruptcy period for purposes of determining future
deductibility of such costs for U.S. federal, state and local tax
purposes;
8. Preparing documentation, as appropriate or necessary, of
tax analyses, opinions, recommendations, conclusions and
correspondence for proposed restructuring alternatives, bankruptcy
tax issues or other tax matters;
9. Advising the Debtors in connection with their dealings with
tax authorities, including participation in meetings and telephone
calls with the Debtors, taxing authorities and other third parties;
10. Assisting the Debtors in obtaining rulings with tax
authorities;
11. Consulting and discussing with Debtors and their outside
advisors relative to the services; and
12. Assisting the Debtors in their documentation to support
their analyses and conclusions.
The firm will be paid at these rates for its routine on-call tax
advisory services:
Title Rate Per Hour
----- -------------
National Specialty Practice Partner/Principal $820
Partner/Principal $530
National Specialty Practice Managing Director $740
Managing Director $530
National Specialty Practice Senior Manager $650
Senior Manager $425
National Specialty Practice Manager $495
Manager $355
Senior $250
Staff $180
The hourly rates for bankruptcy tax services are as follows:
Title Rate Per Hour
----- -------------
Partner/Principal $820
Managing Director $740
Senior Manager $650
Manager $495
Senior $360
Staff $285
During the 90 days before the petition date, the Debtors paid
$240,847 for tax advisory services, of which $100,000 constituted
the retainer.
Ernst & Young is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Molly Ericson
Ernst & Young LLP
Suite 1000
55 Ivan Allen Jr. Boulevard
Atlanta, GA 30308
Tel: +1 404 874 8300
Fax: +1 404 817 5589
About American Commercial Lines
American Commercial Lines Inc. -- https://www.bargeacbl.com/ -- is
a provider of liquid and dry cargo barge transportation services in
the United States, operating a modern fleet of approximately 3,500
barges on the Mississippi River, its tributaries and on the Gulf
Intracoastal Waterway. In addition, ACL operates a series of
strategically-placed harbor services facilities throughout the
region, providing fleeting, shifting, cleaning and repair services
to their fleet of barges and 188 towboats as well as to
third-parties.
With approximately 2,100 employees as of Feb. 7, 2020, and
customers that include many of the country's major energy,
petrochemical, industrial, and agricultural companies. ACL was
founded in 1915 and is headquartered in Jeffersonville, Ind.
On Feb. 7, 2020, American Commercial Lines Inc. and 10 affiliates
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No.
20-30982) to seek confirmation of a prepackaged plan that will cut
debt by $1 billion.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Milbank LLP and Porter Hedges LLP as legal
counsel; Greenhill & Co. as financial advisor; and Alvarez & Marsal
North America, LLC as restructuring advisor. The Debtors' claims
agent is Prime Clerk LLC.
ANTERO MIDSTREAM: Moody's Lowers CFR to B2, Outlook Negative
------------------------------------------------------------
Moody's Investors Service downgraded Antero Midstream Partners LP's
Corporate Family Rating to B2 from Ba3, Probability of Default
Rating to B2-PD from Ba3-PD and senior unsecured notes to Caa1 from
B1. The Speculative Grade Liquidity Rating was unchanged at SGL-3.
The rating outlook remains negative. This action follows the
ratings downgrade of AM's primary customer, Antero Resources
Corporation (Antero or AR), to B3 on April 2, 2020.
"The downgrade reflects a sharp deterioration in credit quality of
Antero Resources Corporation, the primary E&P customer of Antero
Midstream," said Sajjad Alam, Moody's Senior Analyst. "Antero's
slowing growth and refinancing challenges will pressure AM's future
cash flow, and AR could look to extract more concessions from AM if
AR continues to struggle with its heavy debt burden and serial debt
maturities."
Issuer: Antero Midstream Partners LP
Ratings Downgraded:
Corporate Family Rating, Downgraded to B2 from Ba3
Probability of Default Rating, Downgraded to B2-PD from Ba3-PD
Senior Unsecured Notes, Downgraded to Caa1 (LGD5) from B1 (LGD5)
Ratings unchanged:
Speculative Grade Liquidity Rating, Remains unchanged at SGL-3
Outlook actions:
Outlook, Remains Negative
RATINGS RATIONALE
AM's key credit risks include its reliance on a single customer,
narrow geographic focus in Appalachia, indirect exposure to weak
natural gas and NGLs prices, and still significant, albeit reduced,
future growth capital requirements to support Antero's growth.
While AM's standalone capital structure appears sustainable, the
high uncertainty around Antero's businesses will continue to
pressure AM's ratings, which is reflected in the negative outlook.
AM has long term fee-based gathering, compression, fractionation
and water handling contracts with Antero, and substantially all of
Antero's current and future acreage have been dedicated to AM.
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 midstream
sector will be one of the sectors affected by the shock given its
sensitivity to production volume and indirect exposure to oil and
gas prices. While midstream companies may not see an immediate
sharp decline in revenue due to their long-term contractual
protection, AM will nevertheless remain vulnerable to the outbreak
continuing to spread and oil and natural demand remaining weak.
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 partially reflects the impact on AM's credit
quality of the breadth and severity of the oil demand and supply
shocks, and the broad deterioration in credit quality it has
triggered.
AM has adequate liquidity, which is reflected in the SGL-3 rating.
The company plans to spend at least 50% less capital in 2020 based
on Antero's tempered development plans reducing the need for
external capital. Moody's expects any projected funding gap to be
financed with a balanced mix of debt and retained cash flow. AM had
minimal cash and $1.17 billion of availability under its $2.13
billion committed revolving credit facility at December 31, 2019.
The revolver expires on October 26, 2022 and Moody's expects AM to
remain well in compliance with the financial covenants through
2021. The partnership has limited alternate liquidity given its
assets are encumbered.
AM's B2 CFR reflects its elevated counterparty risk with Antero
Resources Corporation, which is contending with a heavy debt burden
and $2.6 billion of debt maturities through 2023. Sharply lower
commodity prices and the inability to refinance have dramatically
reduced Antero's enterprise valuation. As Antero tries to cut its
operating, development and midstream costs, it could adversely
impact AM's revenue. Antero has already negotiated lower fees and
reduced fresh water supply with AM, which will lead to slower
earnings growth and higher financial leverage relative to its prior
expectations. Additionally, despite these negative developments, AM
continues to pay very high dividends, which will weigh on ratings.
AM's CFR is supported by low financial leverage for its rating,
solid distribution coverage, 100% fee-based and inflation protected
revenue stream and a history of strong organic growth.
AM's unsecured notes are rated Caa1, two notches below AM's B2
Corporate Family Rating (CFR), under Moody's Loss Given Default for
Speculative-Grade Companies methodology. The notching reflects the
large $2.1 billion secured revolver in AM's capital structure that
has an all-asset pledge and a priority-claim to all of AM's
assets.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
AM's CFR could be downgraded if Antero's CFR is downgraded, AM's
leverage rises above 6x. An upgrade of AM's CFR will depend on
Antero's CFR moving to a higher rating level. Moody's will also
look for AM to maintain its debt to EBITDA ratio below 5x and its
distribution coverage above 1x before considering an upgrade. The
negative outlook reflects the high continuing counter-party risk
involving Antero.
The principal methodology used in these ratings was Midstream
Energy published in December 2018.
Antero Midstream Partners LP is a wholly owned subsidiary of Antero
Midstream Corporation, which is a Denver, Colorado based public
company with gathering, compression, processing, fractionation, and
water handling and treatment assets in northwest West Virginia and
southern Ohio.
ANTERO RESOURCES: Fitch Cuts LT IDR to B; On Rating Watch Negative
------------------------------------------------------------------
Fitch Ratings downgraded Antero Resources Corporation's (AR)
Long-Term Issuer Default Rating, to 'B' from 'BB-', downgraded AR's
senior unsecured debt to 'B'/RR4 from 'BB-'/RR4 and downgraded the
senior secured revolver to 'BB'/RR1 from 'BB+'/RR1. Fitch also
placed AR's ratings on Rating Watch Negative (RWN).
The downgrade reflects the challenges the company has had in
addressing its capital structure (including its large maturity wall
of $2.63 billion due between 2021 and 2023), which has been
aggravated by the coronavirus pandemic. This, in conjunction with
other factors, has led to a collapse in NGLs and natural gas prices
and weakened the company's near term leverage metrics. While the
company has gained some traction with internal initiatives to lower
its cost structure and accelerate to positive FCF, market access
and external asset sales remains choppy due to the extreme
volatility in energy prices.
The RWN reflects the heightened refinancing and liquidity risks the
company faces. Fitch believes AR faces a challenging capital market
environment to refinance its near-term maturities and may
potentially look to any of a number of wide-ranging measures that
stressed E&P companies used during the last downturn to create
liquidity and capital structure relief, including exchanges,
issuance of equity or equity-like securities, or potentially
secured debt.
These negatives are partly offset by the company's class leading
(but shrinking) hedge coverage; large size, high-quality acreage
position in the Marcellus/Utica, access to higher priced NGL
exports through Mariner East; and partially executed program to
lower cash costs through a range of efficiency measures and volume
growth.
KEY RATING DRIVERS
Price Collapse Weakens Profile: In response to the coronavirus
demand impacts, as well as the OPEC+ price war between Russia and
Saudi Arabia, Fitch recently lowered its base case oil and gas
price decks. While AR has minimal direct exposure to oil, it has
high exposure to spot NGLs pricing given its status as the
second-largest NGLs producer in the US. NGLs share dynamics with
both the oil and natural gas markets, and are heavily oversupplied.
As a result, AR's near term metrics have weakened substantially
versus its previous expectations, particularly over the next two
years. AR is largely protected from spot gas exposure due to
hedges.
Elevated Refinancing Risk: AR has a sizable large maturity wall due
between 2021 and 2023 ($2.63 billion, starting with its 5.375% 2021
note, of which $953 million remains outstanding). The unsecured
bond markets have remained closed to the company, even as select
peers have tapped it during a brief January window opening. The
collapse in prices since that time have made this situation more
difficult. AR's maturity wall coincides with a step-down in the
company's hedge coverage at year-end 2021, which underscores the
need to address the wall prior to the end of that period. A
borrowing base redetermination in April could increase liquidity
risk given the potential impact of lower NGL and gas prices on
reserve values. As of year-end 2019, the company had net
availability of $1.465 billion on its revolver. The RWN reflects
the increased risk the company may look to address its capital
structure and liquidity issues through secured debt, exchanges, or
other means to the degree low hydrocarbon prices persist.
Narrower External Options: Fitch believes the company's planned
asset sales program of $750 million - $1.0 billion), which was
intended to pay off the 2021 maturities, remains particularly
challenged. AR's 28.7% stake in Antero Midstream (AM) which was
valued at $800 million, has declined to just $300 million. Mineral
interest transactions have been more robust, but could also be
hampered by the extreme market volatility. Fitch views hedge
monetization as less likely given its importance in supporting the
company's growth profile in 2020 and 2021 but notes that a
stepped-down growth profile at year-end 2021 might allow for the
monetization of some hedges. Separately, the hydrocarbon price
collapse could provide a silver lining for natural gas by reducing
associated gas as Permian oil production.
Hedge Protection: AR has a peer-leading (although eroding) gas
hedge book, which insulates it from the sub-$2.00/mcf collapse in
gas prices brought on by oversupply and a warm northern hemisphere
winter. After recent hedge restructuring, current coverage is 94%
of expected gas production in 2020 at $2.87/MMBtu, and 93% of
expected 2021 production at $2.80/MMbtu. AR's natural gas hedge
book had a positive MTM of approximately $1.1 billion.
Weak NGL Fundamentals: AR has outsized exposure to NGLs given its
status as the second-largest NGL producer in the US. NGL prices are
not fully correlated to natural gas, due to basis differences
(Northeast versus Gulf Coast), and because of nonheating-related
demand (propane for crop drying, butanes for octane blending in the
gasoline pool). AR also benefits from its export capacity, which
includes the Mariner East 2 pipeline export capacity (11,500 bpd
for ethane and 50,000 bpd of C3+ capacity). However NGLs oversupply
dynamics mirror those seen in the oil market, and the lingering
impacts of a warm winter have similarly capped propane's use as a
heating fuel. Decreasing storage levels may put NGLs under
additional pressure in the near term.
Cost Improvements Accelerate FCF: Unlike peers, AR chose to pursue
growth in the current downturn in order to fill unused
transportation commitments. AR plans to grow production in 2020 and
2021 before tailing off in 2022. Because of transportation
commitments, AR has elevated cash costs versus peers, although its
netbacks are also higher due to higher export access. AR has
undertaken several initiatives to improve its cost structure and
accelerate FCF. These include reductions in D&C capex to $1.0
billion from $1.2 billion; agreements with midstream providers
resulting in $90 million in fee reductions; savings from increased
water blending and reduced trucking, and growth to meet its
unfilled firm transportation commitments, which should also lower
G&T expense on a unit basis. As calculated by Fitch, as of Dec. 31,
2019, AR's unhedged cash netbacks stood at $3.14/boe, below SWN
($3.67/boe), EQT ($6.00/boe), and CNX ($7.64/boe). Improvements in
capex and operating efficiency should help AR achieve FCF earlier
than Fitch's previous expectations.
DERIVATION SUMMARY
With full year 2019 production of 536,816 boepd, AR is above
average in size when compared with Appalachian gas peers RRC (NR,
380,527 boepd), SWN (BB/Negative Outlook 355,700 boepd), and CNX
(BB/Stable 246,200 boepd), but smaller than EQT (BB/Negative
Outlook, 688,500 boepd). AR's basin diversification is modest but
the company is significantly more levered to liquids (NGLs) than
most of its Appalachian peers (AR: 28%, SWN: 18%, CNX: 6%, EQT:
4%). Among its peers, AR's natural gas hedge coverage is also
peer-leading, with 94% coverage for 2020 natural gas production and
93% for 2021, respectively. However, coverage continues to erode
with the passage of time. AR's current unhedged cash netbacks are
depressed due to the collapse in natural gas and NGLs prices. For
fiscal 2019, AR's netbacks were $3.14/boe, which was below SWN
($3.67/boe) EQT ($6.00/boe) and CNX ($7.64/boe). AR has high
refinancing risk versus peers given its large maturity wall ($2.63
billion due 2021 to 2023), while its market access remains very
weak. Execution risk is also high for asset sales given the
volatility introduced into energy markets by the coronavirus
pandemic. No parent-subsidiary linkage, country ceiling constraint
or operating environment influence was in effect for these
ratings.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- WTI oil price of $32 in 2020; $42 in 2021; $50 in 2022; and
$52 in 2023 and over the long term;
- Henry Hub natural gas prices of $1.85/mcf in 2020; $2.10/mcf
in 2021; $2.25/mcf in 2022; and $2.50/mcf in 2022 and over
the long term;
- Realized NGLs prices (including ethane) move broadly in line
with the base case price deck, with some expansion in outer
years due to increased export differentials;
- Production of 3.51 Bcfe/d in 2020, 3.83Bcfe/d in 2021, and
3.95 Bcfe/d in 2022 and 2023;
- Capex declines to $1.0 billion in 2020 and 2021, which then
falls off to less than $700 million in 2022 and 2023;
- Company completes just over $550 million in asset sales in
2020
Fitch also ran a range of other oil and gas price decks to assess
the company's robustness at the current rating.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that Antero Resources would be
reorganized as a going-concern in bankruptcy rather than
liquidated. Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
-- The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation (EV).
-- The GC EBITDA assumption uses a blended 2022-2023 EBITDA of
approximately $925 million, which assumes Henry Hub natural gas
prices of $2.25/mcf in 2022 and $2.50/mcf in 2023, and WTI oil
prices of $50/bbl in 2022, and $52/bbl in 2023;
-- The GC EBITDA takes into account lower liquidity constraints
driven by a weaker cash flow profile, forcing the company to enter
"maintenance mode" as the company's maturities come due beginning
in 2021.
-- The GC EBITDA assumes a partial recovery of operational
momentum coming out of a troughed pricing environment.
Fitch assumed an EV multiple of 4.5x EBITDA, which is applied to
the GC EBITDA to calculate a post-reorganization enterprise value.
The choice of the multiple considered the following factors:
-- The historical case study exit multiples for peer companies
ranged between 2.8x and 7.0x, with an average of 5.6x and median of
6.1x;
-- The 4.5x multiple reflects the company's substantial size and
scale of lower-margin production and reserves.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
Fitch considers valuations such as SEC PV-10 and M&A transactions
for each basin including multiples for $/boe, $/acre, $/drilling
location and $/1P. Fitch used conservative estimates to observed
multiple given the lack of liquidity in the current asset sale
market driven by weaker prices and balance sheets for some
Marcellus operators. Fitch assumed a $275 million valuation on the
company's midstream stake, down from approximately $310 million as
of March 29, 2020.
The senior secured revolver is assumed drawn at 85%. The revolver
is senior to the senior unsecured bonds in the waterfall. The
allocation of value in the liability waterfall results in recovery
corresponding to 'RR1' recover for the senior secured revolver and
a recovery corresponding to 'RR4' for the senior unsecured notes.
RATING SENSITIVITIES
Factors that may, individually or collectively, lead to positive
rating action
- Progress toward completing asset sales and repayment or
refinancing of maturity wall;
- Sustained recovery in natural gas and/or NGLs prices, leading
to improved market access;
- Sustained debt/EBITDA below 3.0x;
- Sustained FFO adjusted leverage below 3.25x.
Factors that may, individually or collectively, lead to negative
rating action
- Lack of progress toward addressing 2021 notes prior to the end
of August 2020;
- Deteriorating liquidity or further weakening in market access;
- Priming of the existing senior unsecured bonds;
- Sustained debt/EBITDA above 3.5x;
- Sustained FFO adjusted leverage above 3.75x.
BEST/WORST CASE RATING SCENARIO
Best/Worst Case Rating Scenarios Non-Financial Corporate:
Ratings of Non-Financial Corporate issuers have a best-case rating
upgrade scenario (defined as the 99th percentile of rating
transitions, measured in a positive direction) of three notches
over a three-year rating horizon; and a worst-case rating downgrade
scenario (defined as the 99th percentile of rating transitions,
measured in a negative direction) of four notches over three years.
The complete span of best- and worst-case scenario credit ratings
for all rating categories ranges from 'AAA' to 'D'. Best- and
worst-case scenario credit ratings are based on historical
performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate, but Limited Liquidity: AR's liquidity is adequate, but
limited. At Dec. 31 2019, the company had no cash on the balance
sheet, and availability on its RBL of $1.465 billion, after netting
out borrowings of $552 million and letters of credit (LOCs) of $623
million from commitments of $2.64 billion. While the borrowing base
is currently unchanged at $4.5 billion, Fitch believes the drop in
hydrocarbon prices has increased the risk of a downward
redetermination. The company used its revolver to repurchase 2021
and 2022 notes at a discount in the open market, which comes at the
cost of lower liquidity.
AR's revolver has a maturity date of Oct 26, 2022, but is subject
to a springing lien of 91 days prior to the earliest stated
redemption of any of AR's senior notes (which translates to August
in 2021 in the event the company's 5.375% November 2021 notes are
not fully repaid by then). Counterparty posting requirements rose
following recent agency credit downgrades to $730 million, however
AR was able to shift $80 million of these to lower cost surety
bonds in 4Q19, and free up related revolver capacity. At Dec. 31,
2019, there was adequate headroom on the company's two main
financial covenants, a minimum current ratio of 1.0x (5.25x
actual), and a minimum interest coverage ratio of 2.5x (actual
5.95x). In terms of secured debt issuance, Fitch notes the
company's bond covenants, including its permitted liens
clauses--are not restrictive and would allow the potential issuance
of new secured (2nd lien) debt.
ANTERO RESOURCES: Moody's Lowers CFR to B3, Outlook Negative
------------------------------------------------------------
Moody's Investors Service downgraded Antero Resources Corporation's
Corporate Family Rating to B3 from Ba3, Probability of Default
Rating to B3-PD from Ba3-PD and senior unsecured notes to Caa1 from
B1. The Speculative Grade Liquidity Rating was unchanged at SGL-3.
The rating outlook remains negative.
"The downgrades reflect a sharp deterioration in Antero's credit
profile as the ability to refinance its large maturities and reduce
its high debt burden has diminished considerably in a tougher
industry and capital market environment," said Sajjad Alam, Moody's
Senior Analyst.
Downgrades:
Issuer: Antero Resources Corporation
Probability of Default Rating, Downgraded to B3-PD from Ba3-PD
Corporate Family Rating, Downgraded to B3 from Ba3
Senior Unsecured Notes, Downgraded to Caa1 (LGD5) from B1 (LGD4)
Issuer: Antero Resources Finance Corporation
Senior Unsecured Notes, Downgraded to Caa1 (LGD5) from B1 (LGD4)
Outlook Actions:
Issuer: Antero Resources Corporation
Outlook, Remains Negative
Issuer: Antero Resources Finance Corporation
Outlook, Remains Negative
RATINGS RATIONALE
The negative outlook reflects Antero's very high refinancing risks
in a challenged industry environment, making the company's
contemplated asset sales and refinancing objectives harder to
execute. The subordination risk for Antero's unsecured noteholders
will remain very high if natural gas prices remain low and capital
market conditions do not improve for E&P companies in 2020.
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 E&P sector
will be one of the sectors most significantly affected by the shock
given its sensitivity to production volume and indirect exposure to
oil and gas prices. More specifically, the weaknesses in Antero's
credit profile 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 and
oil prices remaining weak. 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 partially
reflects the impact on AR's credit quality of the breadth and
severity of the oil demand and supply shocks, and the broad
deterioration in credit quality it has triggered.
Antero should have adequate liquidity through mid-2021, which is
reflected in the SGL-3 rating. Moody's expects breakeven free cash
flow in 2020 with minimal incremental draws on the revolving credit
facility. Antero had $552 million of borrowings and $623 million in
outstanding letters of credits leaving $1.47 billion of
availability under its $2.64 billion committed revolving credit
facility. The revolver has a $4.5 billion borrowing base which in
redetermined annually in April, leaving a degree of cushion for any
potential cut this year. Antero's revolver will mature the earlier
of: (i) October 26, 2022, and (ii) the date that is 91 days to the
earliest stated redemption of any series of Antero's senior notes,
unless such series of notes is refinanced. Consequently, Antero
will need to repay or refinance the 2021 and 2022 note maturities
to be able to extend the revolver maturity beyond 2022. The credit
agreement requires that Antero maintain a minimum current ratio of
1x and a minimum interest coverage ratio of 2.5x, parameters that
can be met comfortably. Given its sizeable land position in
Appalachia and 27% remaining equity interest in the publicly traded
Antero Midstream Partners LP, Antero has the ability to raise
alternate liquidity, if needed.
Antero's B3 CFR reflects its high refinancing risk involving $2.6
billion of bond maturities through 2023, high financial leverage
relative to unhedged cash flow and an unusually weak natural gas
and natural gas liquids (NGL) price environment. The CFR also
considers Antero's natural gas weighted asset portfolio, singular
concentration in Appalachia, 100% unconventional resource focus,
and significant proportion of proved undeveloped (PUD) reserves.
Antero's ratings are supported by its substantially hedged position
through 2021; significant production of NGLs, which improves
overall price realizations; large and blocky acreage position in
Appalachia that allow for highly efficient operations and lower
costs; and its excellent optionality to sell gas and NGLs in price
advantaged markets through a comprehensive portfolio of
firm-transportation (FT) contracts. Antero also benefits from its
significant ownership of Antero Midstream Corporation.
Antero's senior notes are unsecured, have upstream guarantees from
substantially all of Antero's E&P subsidiaries, and are
contractually subordinated to the company's secured revolving
credit facility. The notes are rated Caa1, one notch below the B3
CFR because of the significant size of the secured credit facility,
which has a first-lien priority claim to substantially all of
Antero's assets.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Antero's ratings could be downgraded if the company is unable to
execute its planned asset sales and substantially reduce its
refinancing risks, generates significant negative free cash flow,
or fails to maintain the ratio of retained cash flow to debt above
10%. A positive rating action would be contingent on Antero's
ability to produce free cash flow on a consistent basis, eliminate
refinancing risk and substantially reduce debt leading to a
sustainable retained cash flow to debt ratio near 20%.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
Antero Resources Corporation is a leading natural gas and natural
gas liquids producer in the Marcellus and Utica Shales in West
Virginia, Ohio and Pennsylvania.
APX GROUP: Moody's Affirms B3 CFR & Alters Outlook to Negative
--------------------------------------------------------------
Moody's Investors Service affirmed APX Group, Inc.'s B3 corporate
family rating and B3-PD probability of default rating. Moody's
downgraded instrument ratings on Vivint's first-lien senior secured
debt (comprising a $902 million first-lien term loan and $1.55
billion of first-lien notes with varying maturities) to B3, from
B2. Moody's affirmed the Caa2 facility rating on Vivint's $400
million senior unsecured notes due 2023. Vivint's SGL-3 speculative
grade liquidity rating is unchanged. Moody's also changed Vivint's
outlook to negative, from positive, because of its expectations for
weakening free cash flow, covenant compliance pressures and
potentially lower 2020 revenue stemming from the impact of the
COVID-19 pandemic.
RATINGS RATIONALE
Issuer: APX Group, Inc.
Affirmations:
Corporate family rating, affirmed B3
Probability of default rating, affirmed B3-PD
Senior unsecured notes due 2023, affirmed Caa2 (LGD6)
Downgrades:
Senior secured first-lien notes, maturing 2022 to 2027,
downgraded to B3 (LGD3), from B2 (LGD3)
Senior secured first-lien term loan B, downgraded to B3
(LGD3), from B2 (LGD3)
Outlook Action:
Outlook, Changed to negative, from positive
RATINGS RATIONALE
The change in Vivint's outlook to negative, from positive, reflects
Moody's expectation for difficulty attracting new subscribers and
elevated attrition due to the weak economy stemming from the
COVID-19 epidemic. Instead of the nearly 10% revenue growth that
Moody's had projected barely two months ago, Moody's now believes
there is the potential for declining revenue if escalating
attrition is not offset by new subscriber growth. Lower revenue and
higher attrition will pressure liquidity, and the company may need
to rely on its $350 million revolver (unrated). Moody's also
believes that the company, in an effort to reduce cash spending,
will cut back on its normally aggressive subscriber acquisition
efforts.
Moody's downgrade of the instrument ratings on Vivint's first-lien
debt, to B3 from B2, reflects its expectation that the proportion
of first-lien debt in the capital structure will remain high, with
the potential for heightened reliance on the revolving credit
facility. Vivint's February 2020 refinancing reduced the amount of
unsecured debt in its capital structure.
The B3 CFR ratings affirmation reflects Vivint's moderately
improved leverage and liquidity positions as a result of the
completion, in mid-January 2020, of a SPAC transaction that brought
the company public. It used proceeds from the transaction and a
subsequent refinancing to reduce its September 30, 2019 debt burden
of $3.2 billion by roughly 10%, while freeing up availability under
its revolver and adding more than $100 million of balance sheet
cash. The revolver was upsized as well, by $60 million, to $350
million, and the company had full availability under it post the
SPAC transaction. The revolver includes a maximum net first lien
leverage ratio set at 5.35 times. While there is ample cushion
under the covenant as of year-end 2019, the company may be limited
in its ability to draw under the facility as leverage increases.
Vivint faces governance risks, primarily in the form of an
aggressive financial policy marked by debt-funded growth,
consistently negative free cash flow, and tight liquidity. Moody's
expects the financial policy to become more conservative and
transparent under public company ownership.
Social risks, however, have quickly become pronounced in early 2020
as the coronavirus crisis increasingly curtails social and economic
activity. Moody's regards the coronavirus outbreak as a social risk
under its ESG framework, given the substantial implications for
public health and safety. The rapid and widening spread of the
outbreak, deteriorating global economic outlook, 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. At this time, the sectors most exposed to the shock
are those that, like Vivint's, are most sensitive to consumer
demand and sentiment. Lower-rated issuers are most vulnerable to
these unprecedented operating conditions and to shifts in market
sentiment that curtail credit availability. Moody's will take
rating actions as warranted to reflect the breadth and severity of
the shock, and the broad deterioration in credit quality that it
has triggered.
APX Group, Inc. (dba "Vivint") provides alarm monitoring and home
automation services to approximately 1.5 million residential
subscribers in North America. With 2019 revenue of $1.15 billion (a
10% gain over 2018), Vivint is the second-largest provider of home
security and automation services, well behind The ADT Security
Corporation. As the result of a late 2012 acquisition, Vivint is
majority-owned by The Blackstone Group Inc., while its management
team has maintained a meaningful ownership stake.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Factors that would lead to an upgrade or downgrade of the ratings:
Given Moody's expectation for a weak macro environment to pressure
performance, an upgrade is unlikely over the near term. Over the
next few years, Moody's would consider an upgrade if Vivint
realizes at least mid-single-digit revenue growth; if the company
successfully addresses its 2022 debt maturities; free cash flow is
closer to breakeven; and if it can maintain or improve its
currently "adequate" liquidity position.
Moody's would consider a downgrade if revenue growth turns negative
on a sustained basis; if liquidity deteriorates sharply; Moody's
expects the company will be unable to address its 2022 debt
maturities; or if there is higher than anticipated attrition.
ART VAN FURNITURE: Russell R. Johnson Represents Utility Companies
------------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Russell R. Johnson III submitted a verified
statement that it is representing the utility companies in the
Chapter 11 cases of Art Van Furniture, LLC, et al.
The names and address of the Utilities represented by the Firm
are:
a. American Electric Power
Attn: Dwight C. Snowden
American Electric Power
1 Riverside Plaza, 13th Floor
Columbus, Ohio 43215
b. Baltimore Gas and Electric Company
Assistant General Counsel
Exelon Corporation
2301 Market Street, S23-1
Philadelphia, PA 19103
c. Commonwealth Edison Company
Attn: Erin Buechler
Claims & Collection Counsel
3 Lincoln Centre
Oakbrook Terrace, IL 60181
d. The Cleveland Electric Illuminating Company
Ohio Edison Company
Pennsylvania Power Company
West Penn Power Company
Toledo Edison Company
Metropolitan Edison Company
Pennsylvania Electric Company
Attn: Kathy M. Hofacre
FirstEnergy Corp.
76 S. Main St., A-GO-15
Akron, OH 44308
The nature and the amount of claims (interests) of the Utilities,
and the times of acquisition thereof are as follows:
a. The following have unsecured claims against the
above-referenced Debtors arising from prepetition utility usage:
American Electric Power, Baltimore Gas and Electric Company,
Commonwealth Edison Company, The Cleveland Electric Illuminating
Company, Ohio Edison Company, Pennsylvania Power Company, West Penn
Power Company, Toledo Edison Company, Metropolitan Edison Company
and Pennsylvania Electric Company.
b. For more information regarding the claims and interests of
the Utilities in these jointly-administered cases, refer to the
Objection of Certain Utility Companies To the Debtors' Motion For
Entry of Interim and Final Orders (I) Determining Adequate
Assurance of Payment For Future Utility Services, (II) Prohibiting
Utility Providers From Altering, Refusing, or Discontinuing Utility
Services, (III) Establishing Procedures For Determining Adequate
Assurance of Payment, (IV) Requiring Utility Providers To Return
Deposits For Utility Services No Longer In Use, and (V) Granting
Related Relief (Docket No. 188) filed in the above-captioned,
jointly-administered, bankruptcy cases.
The Law Firm of Russell R. Johnson III, PLC was retained to
represent the foregoing Utilities in March 2020. The circumstances
and terms and conditions of employment of the Firm by the Companies
is protected by the attorney-client privilege and attorney work
product doctrine.
The Firm can be reached at:
LAW FIRM OF RUSSELL R. JOHNSON III, PLC
Russell R. Johnson III, Esq.
2258 Wheatlands Drive
Manakin-Sabot, VA 23103
Telephone: (804) 749-8861
Facsimile: (804) 749-8862
E-mail: russell@russelljohnsonlawfirm.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/croDMq
About Art Van Furniture
Art Van is a brick-and-mortar furniture and mattress retailer
headquartered in Warren, Michigan. The Company operates 169
locations, including 92 furniture and mattress showrooms and 77
freestanding mattress and specialty locations. The Company does
business under brand names, including Art Van Furniture, Pure
Sleep, Scott Shuptrine Interiors, Levin Furniture, Levin Mattress,
and Wolf Furniture.
The Company was founded in 1959 and was owned by its founder, Art
Van Elslander, until it was sold to funds affiliated with Thomas
H.
Lee Partners, L.P. in March 2017. As part of this transaction, THL
acquired the operating assets of the Company and certain real
estate investment trusts, who closed the transaction alongside
THL,
acquired the owned real estate portfolio of the Company, and
entered into long-term leases with Art Van. The proceeds from the
sale-leaseback transaction were used to fund the purchase price
paid to the selling shareholders.
Art Van Furniture, LLC, and 12 affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-10553) on March 8,
2020.
Art Van was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtors tapped Benesch, Friedlander, Coplan & Aronoff LLP as
counsel. Kurtzman Carson Consultants LLC is the claims agent.
ASCENT RESOURCES: S&P Downgrades ICR to 'CCC+'; Outlook Negative
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Ascent
Resources Utica Holdings LLC to 'CCC+' from 'B'. The unsecured
notes are lowered to 'CCC+' from 'B+'. S&P revised its recovery
rating on the notes to '3' from '2', reflecting a lower PV-10 value
of reserves based on its revised, lower recovery price assumptions
of $2.50 per mmBtu for natural gas.
The downgrade of Ascent Resources Utica LLC reflects the increased
likelihood of a debt restructuring or distressed exchange given
depressed market conditions and large near- to medium-term debt
maturities.
"We believe the potential for a distressed exchange is elevated due
to the decline in Henry Hub natural gas prices, including the
recent reduction in our price assumptions, weak natural gas liquids
(NGL) pricing, and the depressed trading of the company's bonds–
with current yields in the 35% to 40% range. Nevertheless, given
ARU's strong hedge book through 2022, we expect the company to
maintain moderate credit metrics in the next couple of years, and
adequate liquidity for the next 12 months," S&P said.
The negative outlook on Ascent Resources Utica Holding (ARU)
reflects the risk of a downgrade if Ascent's liquidity position
weakened or the company were to announce a debt exchange or
restructuring S&P would consider as distressed. Despite its
expectation that the company will maintain FFO to debt close to 25%
over the next two years, S&P believes depressed market conditions
may make refinancing more difficult and that the risk of capital
restructuring is high.
"We could raise the rating if we no longer see heightened risk for
a transaction that we could view as distressed, and we no longer
believed the company to be reliant on favorable market conditions
to meet its financial obligations." This would likely result from a
successful refinancing of its debt maturities without a debt
restructuring, in a context of more supportive hydrocarbon prices
and capital market conditions," S&P said.
ASP NAPA: S&P Downgrades ICR to 'CCC' on Expected Liquidity Issues
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on New
York–based ASP NAPA Holdings to 'CCC' from 'B-'. At the same
time, S&P lowered its issue-level ratings on the company's senior
secured revolving facility and first-lien term loan to 'CCC' with a
'3' recovery rating (50%-70%; rounded estimate: 60%).
"The downgrade reflects our view that ASP NAPA Holdings may not be
able to withstand the imminent decline in its business due to the
health-care-industry-wide delay in elective procedures, raising the
prospects for a default within six to 12 months. Anesthesia
services will suffer as it's a vital service provided for elective
procedures. A significant decline in ASP NAPA's financial
performance is possible. We do not believe the company can seek
further hospital subsidies (which currently contribute about 24% of
ASP NAPA's total revenue) from its hospital clients to help
mitigate this decline because hospitals themselves will experience
large declines in patient volumes and in their own financial
performance," S&P said.
The negative outlook on ASP NAPA reflects S&P's view of heightened
risk of default due to the company's very limited liquidity,
prospects for a significant decline in cash flow due to the
COVID-19 pandemic, and a breach of its first-lien net leverage
covenant in 2020.
"We could lower our rating on ASP NAPA if we believe the company is
at risk of a distressed exchange or a restructuring within the next
six months. This could occur if the company's operating performance
and cash flow deteriorates further, reducing our confidence in its
ability to comply with its current financial covenant and to
refinance its debt," S&P said.
"We could revise the outlook to stable if cash flow is better than
we expect and we have some clarity on the extent of the impact of
the pandemic, providing us with greater confidence it will meet
covenant requirements in the first quarter of 2020 and that it can
refinance its debt obligations due in April 2021," the rating
agency said.
ASSOCIATED ASPHALT: Moody's Affirms B3 CFR, Outlook Remains Stable
------------------------------------------------------------------
Moody's Investors Service affirmed the B3 Corporate Family Rating,
B3-PD Probability of Default Rating and Caa1 senior secured bank
facility rating of Associated Asphalt Partners, LLC. The rating
outlook is stable.
The affirmation reflects Moody's expectation of improving credit
metrics buoyed by the opportunity to buy inventory at a lower cost
given the decline in oil prices, a reasonable pricing environment
and stable demand.
Ratings Affirmed:
Issuer: Associated Asphalt Partners, LLC
Corporate Family Rating at B3
Probability of Default Rating at B3-PD
Gtd. Senior Secured Term Loan B at Caa1 (LGD4 from LGD5)
Outlook, Remains Stable
RATINGS RATIONALE
Associated Asphalt's B3 CFR reflects Moody's expectation that the
company will reduce debt-to-EBITDA to 5.8x and improve interest
coverage to 1.0x within the next 12-18 months, from 6.6x and 0.6x,
respectively, at year-end 2019. Moody's expectations incorporate an
increase in gross profit margin per ton in 2020 over 2019 levels,
which reflects lower crude prices that should translate to lower
working capital needs.
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 regards
the coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.
However, Associated Asphalt's rating incorporates Moody's
expectation of stable demand for asphalt, despite the recent
economic volatility, as construction is broadly seen as essential
and has continued with little disruption. Associated Asphalt's
ratings are constrained by the volatility inherent in gross profit
and free cash flow generation, concentrated supplier base compared
to other rated distributors, limited end-markets and geographic
concentration.
Moody's expects Associated Asphalt to maintain adequate liquidity
over the next 12-18 months. Moody's anticipates the company will
retain little-to-no cash, and use cash flow from operations for
capital expenditures and debt repayment. Liquidity includes access
to a $250 million asset-based lending (ABL) revolver that had 43%
availability at year-end 2019 and expires in October 2021.
Associated Asphalt is subject to various environmental requirements
imposed by federal, state and local governments, including the
protection of the environment, natural resources and human health
and safety. Increased operating costs could arise over time
associated with the regulation of climate change and emission of
greenhouse gases. Governance considerations include the aggressive
financial policy of Associated Asphalt, which has a history of
growth through debt funded acquisitions. Given the private equity
ownership by an affiliate of ArcLight Energy Partners Fund VI, L.P.
the risk of maintaining an aggressive financial policy is high.
The stable outlook reflects Moody's expectation of continued
support for public infrastructure spending, which will feed demand
for asphalt. The stable outlook also assumes the successful
refinancing of the company's ABL revolver.
Factors that would lead to an upgrade or downgrade of the ratings:
The ratings could be upgraded through a sustained reduction in
debt-to-EBITDA below 4.5x as well as a stronger liquidity profile
and free cash flow generation. In addition, an upgrade would
require expanding gross profit and gross profit per ton on a
consistent and sustainable basis.
The ratings could be downgraded should adjusted debt-to-EBITDA be
sustained above 6.5x, adjusted EBITA-to-interest expense is
sustained below 1x or the company experiences any liquidity
pressure or deterioration. Furthermore, a decline in infrastructure
and roadway spending, or a sustained deterioration in gross profit
per ton could also lead to a downgrade.
Associated Asphalt Partners, LLC ("Associated") headquartered in
Roanoke,VA, is a reseller of liquid asphalt, used predominately for
road development, construction and maintenance. Revenues for the
year ending December 31, 2019 totaled $999 million. The company
provides asphalt storage capacity and controls 34 asphalt terminals
located throughout the Mid-Atlantic and Southeastern U.S.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
AVIANCA HOLDINGS: Fitch Cuts LongTerm IDRs to C; Off Watch Negative
-------------------------------------------------------------------
Fitch Ratings has downgraded Avianca Holdings' Long-Term Foreign
and Local Currency Issuer Default Rating (IDR) to 'C from 'CCC-'.
The ratings have been removed from Rating Watch Negative. This
downgrade follows the announcement by Avianca that it has deferred
payments on principal for certain loan obligations, in addition to
lease agreements. No repayment acceleration has been requested.
KEY RATING DRIVERS
Covid-19 Lockdown: Avianca announced it has temporarily ceased to
operate all regular passenger flight operations until at least
April 12, 2020, following a local Government announcement closing
Colombian airspace as of March 25, 2020. Seeking to preserve cash,
the company has announced the payment deferrals and a cut in all
non-essential capital expenditures, and is working on agreements
with its key suppliers, strategic lenders and others creditors to
restructure its payments under the new cash flow scenario. Avianca
has offered a voluntary unpaid leave program and around 14,000
employees have accepted this offer.
Debt Deferral: The announcement of loan payment deferrals indicates
a default process has begun, which is commensurate with a 'C'. This
rating further reflects Fitch's view that Avianca's USD66 million
of outstanding unsecured bonds coming due in May 2020 will likely
not be paid in a timely manner. Besides the loan obligations, the
company has also announced leasing agreement deferrals, which have
been common practice within the airlines industry amid the current
pandemic. As of Dec. 31, 2019, Avianca had USD398 million in cash
and USD872 million of short-term obligations, USD237 million of
which is related to lease agreements.
Limited Access to Funding: Avianca has just emerged from a debt
restructuring process in late Dec. 2019, when it completed its 2023
secured bond exchange offer, and received USD324 million of loans
with United Airlines, Kingsland Holdings Limited and private
investors. Fitch considers that Avianca has limited financial
flexibility, with no availability of unencumbered assets that could
be monetized .
Strong Regional Market Position: Avianca's business model combines
operations in Colombia, Central and South America, allowing it to
rotate capacity according to market conditions. Its geographic
diversification allowed the company to maintain consistently solid
average load factors of 81% during 2015-2019. The company's
business diversification is viewed as adequate with international
passengers, domestic passengers, cargo operations, and the loyalty
program and other segments representing approximately 42%, 41%,
13%, and 4% of its total revenues. The announcement of a joint
business agreement with United and Copa Airlines (not rated) are
still pending regulatory approvals and should only benefit
Avianca's competitive business position in the medium to long
term.
Credit Linkages and Notes' Guarantees Structure Incorporated: The
ratings also reflect Avianca's corporate structure and credit
linkage with its subsidiaries, Aerovias del Continente Americano
S.A. (Avianca) and Grupo Taca. Combined, these two operating
companies represent the main source of cash flow generation for the
holding company. The significant legal and operational linkages
between the two operating companies are reflected in the existence
of cross-guarantee and cross-default clauses relating to the
financing of aircraft acquisitions for both companies.
DERIVATION SUMMARY
Avianca's 'C' rating reflects the announcement of deferred payments
on certain long-term leases and deferred principal payments on
certain loan obligations. In terms of business profile, the company
has a good asset base and is relatively well positioned to regional
peers based on its network, route diversification and important
regional market positions. Nevertheless, these factors are tempered
by the company's higher gross adjusted leverage and refinancing
risks, weaker liquidity and financial flexibility relative to
peers.
Avianca's rating is below its regional peers LATAM Airlines S.A.
(LATAM, 'B+'/RWN), AZUL S.A (AZUL, 'B'/RWN) and GOL Linhas Aereas
Inteligentes S.A. (GOL,' B'/RWN). The ratings distinction among the
three airlines reflects differences in the financial strategies,
credit access, operational performance volatility and business
diversification.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- The recovery analysis is based on a liquidation approach given
the high value of its aircraft fleet, which positively compares to
the going concern approach.
Fitch has assumed a 10% administrative claim.
Liquidation Approach:
- The liquidation estimate reflects Fitch's view of the value of
aircraft and other assets that can be monetized in advance at a
rate of 70%, 75% account receivables due to high percentage of
credit card receivables and 50% inventories.
- These assumptions result in a recovery rate for the unsecured
bonds within the 'RR6' range, which generates a one-notch downgrade
to the debt rating from the IDR. Nevertheless, considering the
current debt deferral, it is commensurate with a 'C' rating level.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- An upgrade of the ratings for Avianca will occur following the
completion of its refinancing with creditors.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Avianca's ratings will be downgraded to 'RD' if the company
announces a debt restructuring (DDE), or to 'D', if the company
formally files for bankruptcy protection.
BEST/WORST CASE RATING SCENARIO
Best/Worst Case Rating Scenarios Non-Financial Corporate:
Ratings of Non-Financial Corporate issuers have a best-case rating
upgrade scenario (defined as the 99th percentile of rating
transitions, measured in a positive direction) of three notches
over a three-year rating horizon; and a worst-case rating downgrade
scenario (defined as the 99th percentile of rating transitions,
measured in a negative direction) of four notches over three years.
The complete span of best- and worst-case scenario credit ratings
for all rating categories ranges from 'AAA' to 'D'. Best- and
worst-case scenario credit ratings are based on historical
performance.
LIQUIDITY AND DEBT STRUCTURE
Limited Financial Flexibility: As of Dec. 31, 2019, Avianca had
USD398 million in cash and USD872 million of short term
obligations, USD237 million of which is related to lease
agreements. Fitch estimates that around USD50 million of debt is
overdue. Avianca's has around USD66 million of outstanding
unsecured bonds coming due in May 2020. Total adjusted debt was
USD4.9 billion at YE 2019. Debt consists primarily of USD1.8
billion of aircraft loans, USD1.3 billion of corporate debt, USD0.5
billion of cross-border bonds and USD1.2 billion of on
balance-sheet lease obligations.
ESG
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.
Avianca Holdings S.A. has an ESG score of 4 for Group Structure due
to its complex shareholder structure. The current developments with
United and Kingsland, and other shareholders, adds complexity to
the case.
Avianca Holdings S.A. has an ESG score of 4 for Labor Relations &
Practices reflecting significant pilot strikes that affected the
company.
BARRACUDA NETWORKS: Fitch Affirms B LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Barracuda Networks, Inc.'s Long-Term
Issuer Default Rating (IDR) at 'B'. The Rating Outlook is Stable.
Fitch has also affirmed the rating for Barracuda's $75 million
first-lien secured revolver and $752 million first-lien term loan
at 'BB-'/'RR2'.
Fitch's ratings contemplate Barracuda's highly recurring revenue
supported by the mission-critical nature and subscription-based
revenue model. While Fitch believes the software sector has a low
level of risk and exposure to the coronavirus pandemic relative to
other sectors, Barracuda's exposure to small to midsize business
(SMB) market segment poses risks to Barracuda's revenue growth in
the uncertain coronavirus-induced economic environment. Given the
numerous unknowns related to the severity and duration of the
coronavirus pandemic coupled with expected economic recession
resulting from the pandemic, Fitch anticipates these factors will
negatively impact Barracuda's operating profile and weaken its
credit profile. In spite of the macroeconomic risks, Barracuda has
sufficient financial flexibility and headroom within the rating
category relative to rating sensitivities for the current 'B'
rating supported by its strong profitability and financial
structure.
KEY RATING DRIVERS
Operating and Financial Profiles Buffer Uncertain Environment:
Fitch anticipates the SMB market segment to be disproportionately
affected in an economic downturn. However, Barracuda's strong
profitability and FCF generation along with the relatively lower
financial leverage for the 'B' rating category should provide
sufficient buffer for the company through a downturn. Within
Fitch's base case assumptions, Fitch estimates 5% revenue decline
in fiscal 2021 followed by flat revenue in fiscal 2022.
Correspondingly, Fitch also assumes EBITDA margins to contract by
3.5ppts in fiscal 2021 due to lower revenue scale. Despite the
estimated operating performance, Fitch expects Barracuda to
continue operating within the rating sensitivities.
Product Range Supporting SMB Segment: Barracuda offers products
addressing a wide range of IT needs for SMB customers that
generally have limited financial and technical resources dedicated
to IT management. The company's products include Next Generation
Firewall, Web App Firewall, Email Security Gateway, Web Security
Gateway, Security and Archiving for Office 365, and Backup/Data
Protection. The availability of these products through both
appliance- and cloud-based platforms enables its SMB customers to
simplify IT security and data-storage management. Fitch believes
the breadth of products available positions Barracuda well in a
segment that prefers simplicity to sophisticated solutions.
Secular Tailwind Supports Growth: Fitch believes two factors serve
as the fundamental demand drivers. The first is Barracuda's
cloud-based solutions, which allows the company to benefit from the
steady pace of IT workload migrating to the cloud from on-premise
infrastructure. The second is the increasing awareness of IT
security threats leading companies to allocate more resources to
protecting their networks and data. Some of the high-visibility IT
security breaches include data breaches and ransomware that could
be costly or cause damage to a company's reputation.
Higher Susceptibility to Industry Cycle: Notwithstanding the
secular growth trends within the security industry, Barracuda's SMB
customer base makes it more susceptible to customer losses relative
to other software peers. Fitch believes the coronavirus shutdowns
will disproportionately impact the SMB sector resulting in a
shrinking customer universe. Consistent with the fragmented nature
of the SMB segment, Barracuda serves a large set of over 200,000
customers. Fitch believes the diverse customer base could partially
mitigate inherent risks in the SMB segment through the economic
cycles.
High Levels of Recurring Revenues and Revenue-Retention Rate:
Barracuda has been steadily transitioning toward subscription-based
revenue, which provides greater visibility into future revenue
streams. The proportion of subscription revenues has reached the
mid-80's, up from the 70's during fiscal 2016. Barracuda maintained
a high subscription-revenue retention rate of over 100% in recent
periods, which demonstrates its ability to retain active
subscribers and upsell additional products. Fitch believes the high
levels of recurring revenues and retention rates provide a high
degree of revenue predictability.
Leverage to Remain Elevated: Fitch expects gross leverage to be
5.4x in fiscal 2020, in line with peers in the 'B' rating category.
Fitch expects Barracuda to maintain gross leverage between 5.3x and
6.5x throughout the rating horizon. Fitch believes Barracuda will
resume its acquisition of complementary technologies and products
to keep pace with the fast-moving industry, limiting its
deleveraging primarily to EBITDA growth.
DERIVATION SUMMARY
Fitch's ratings are supported by Barracuda's focus on IT and data
security for the SMB segment and the secular growth trend for the
IT security industry. Barracuda's products are primarily
cloud-based, making them easily accessible and manageable by SMB
customers who prefer simplicity to sophistication in IT security;
having an over 200,000-customer base reflects this. The
subscription nature of the products and high revenue retention
rates provide a high level of predictability for its revenues.
However, Fitch recognizes that Barracuda's SMB customer base is
disproportionately impacted by the coronavirus shutdown. At the IT
security industry level, Fitch believes the heightened awareness of
IT security risks arising from high profile security breaches in
recent years provides support for the secular growth of the
industry. Fitch expects Barracuda's leverage to remain in the 5.3x
to 6.5x range over the rating horizon. Barracuda's industry
expertise, revenue scale, and leverage profile are consistent with
the 'B' rating category.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Revenue decline of mid-single-digits in fiscal 2021 followed
by flat revenue in fiscal 2022 as the coronavirus shutdown
disproportionately impacts the company's SMB customer base;
-- EBITDA margins are expected to decline by 350 bps in fiscal
2021 and stabilizing back to the normalized levels by fiscal
2023;
-- Capex and working capital is expected to remain in line with
historical trends;
-- Acquisitions averaging $50 million per year for fiscals
2021-2023, enabling the company to expand product lines and
technologies;
-- No dividend payments to the parent through fiscal 2023.
KEY RECOVERY RATING ASSUMPTIONS
- The recovery analysis assumes that Barracuda would be
reorganized as a going-concern in bankruptcy rather than
liquidated.
- Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
- In estimating a distressed enterprise value (EV) for Barracuda,
Fitch assumes a going concern EBITDA that is over 20% lower
relative to LTM 2Q fiscal 2020 EBITDA resulting from a combination
of revenue decline and margin compression on lower revenue scale.
- Fitch applies a 6.5x multiple to arrive at EV of $674 million.
The multiple is higher than the median TMT EV multiple, but is in
line with other similar software companies that exhibit strong FCF
characteristics. In the 21st edition of Fitch's Bankruptcy
Enterprise Values and Creditor Recoveries case studies, Fitch notes
nine past reorganizations in the Technology sector with recovery
multiples ranging from 2.6x to 10.8x. Of these companies, only
three were in the Software sector: Allen Systems Group, Inc.,
Avaya, Inc., and Aspect Software Parent, Inc. which received
recovery multiples of 8.4x, 8.1x, and 5.5x, respectively. The GC
EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation.
- The allocation of value in the liability waterfall results in
recovery corresponding to 'RR2' recovery for the first lien
revolver and term loan.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Expectation for gross leverage sustaining below 5.5x;
-- Pre-dividend FCF margins sustaining above 10%;
-- Organic revenue growth sustaining near or above 5%;
-- FFO leverage sustained below 6.0x.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Expectation for gross leverage sustaining above 7x,
potentially due to debt-financed acquisitions or dividend payment
to owners;
-- Pre-dividend FCF margins sustaining below 5%;
-- Organic revenue growth sustained near or below 0%;
-- FFO leverage sustained above 7.5x.
BEST/WORST CASE RATING SCENARIO
Ratings of Non-Financial Corporate issuers have a best-case rating
upgrade scenario (defined as the 99th percentile of rating
transitions, measured in a positive direction) of three notches
over a three-year rating horizon; and a worst-case rating downgrade
scenario (defined as the 99th percentile of rating transitions,
measured in a negative direction) of four notches over three years.
The complete span of best- and worst-case scenario credit ratings
for all rating categories ranges from 'AAA' to 'D'. Best- and
worst-case scenario credit ratings are based on historical
performance.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: The company has strong liquidity as evidenced by
$113 million of cash on hand as of Aug. 31, 2019, and full
availability under its $75 million revolving credit facility. The
strong profitability should enable the company to maintain FCF
margins in the teens through the economic down cycle.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by
the entity.
BLACKRIDGE TECHNOLOGY HOLDINGS: Case Summary & Unsecured Creditors
------------------------------------------------------------------
Debtor: Blackridge Technology Holdings, Inc.
200 S. Virginia Street, Suite 240
Reno, NV 89501
Business Description: Blackridge develops and markets next
generation cyber defense solutions that
enables its customers to deliver more secure
and resilient business services in today's
rapidly evolving cyber threat environments.
Chapter 11 Petition Date: April 2, 2020
Court: United States Bankruptcy Court
District of Nevada
Case No.: 20-50394
Judge: Hon. Bruce T. Beesley
Debtor's Counsel: Stephen R. Harris, Esq.
HARRIS LAW PRACTICE LLC
6151 Lakeside Drive, Suite 2100
Reno, NV 89511
Tel: 775-786-7600
E-mail: steve@harrislawreno.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Robert J. Graham, president.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/7I1HCH
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Actus Convertible Note $240,000
545 Boylston St
2nd Floor
Boston, MA 02116
2. Angela Yalamanchili Convertible Notes $2,351,741
c/o T. Michael Wall, Esq.
1000 Louisiana Street
Suite 2000
Houston, TX 77002
3. Anne Maya Yalamanchili Convertible Note $387,532
c/o T. Michael Wall, Esq.
1000 Louisiana Street
Suite 2000
Houston, TX 77002
4. Anne Maya Yalamanchili Convertible Note $300,000
2001 Trust
c/o T. Michael Wall, Esq.
1000 Louisiana Street
Suite 2000
Houston, TX 77002
5. Bantle Convertible Note $350,000
365 Post Road
Darien, CT 06820
6. Bruce Ratcliff Consulting Services $406,000
66 Manor Road
Red Hook, NY 12571
7. Charlie Yalamanchili Convertibe Notes $11,442,965
c/o T. Michael Wall, Esq.
1000 Louisiana Street
Suite 2000
Houston, TX 77002
8. Eric Davidson Enterprises Consulting Services $285,686
30010 NE 60th Street
Camas, WA 98607
9. GSA Capital Convertible Note $280,000
Partners, LLC
300 Broad St.
Suite 1201
New York, NY 10004
10. John Walshe Consulting Services/ $335,316
9 Evergreen Circle Director of Engineer
Westford, MA 01886 and Expenses
11. Johnson Douglas Wages $225,416
5542 Monterey Hwy
San Jose, CA 95138
12. Joll, Balraj Wages $229,613
5401 Bayview Dr
Fort Lauderdale, FL 33308
13. Krishna Adusumilli Convertible Note $1,000,000
c/o T. Michael Wall, Esq.
1000 Louisiana Street
Suite 2000
Houston, TX 77002
14. Leonite Capital LLC Convertible Note $280,000
1 Hillcrest Center Dr.
Suite 232
Spring Valley, NY 10977
15. Nikhil Yalamanchili Convertible Note $300,000
2001 Trust
c/o T. Michael Wall, Esq.
1000 Louisiana Street
Suite 2000
Houston, TX 77002
16. Odyssey Convertible Note $282,500
1249 Broadway
Suite 103
Hewlett, NY 11557
17. Silicon Alley Advisers Consulting Services $241,101
1 Conte Place
Westport, CT 06880
18. Softgate Intl Inc. Consulting Services $621,450
2394 Mariner
Square Dr.
#A1
Alameda, CA 94501
19. Suresh Yalamanchili Convertible Note $400,000
2001 Trust
c/o T. Michael Wall, Esq.
1000 Louisiana Street
Suite 2000
Houston, TX 77002
20. Westport Asset Note $250,000
Fund (Beard)
101 North Ave.
PHC
Palm Beach, FL 33480
BLUCORA INC: S&P Alters Outlook to Negative, Affirms 'BB' ICR
-------------------------------------------------------------
S&P Global Ratings said it revised its outlook on Blucora Inc. to
negative from stable. At the same time, S&P affirmed its 'BB'
issuer credit and senior secured debt ratings on Blucora Inc.
"The rating action reflects our view that if short-term interest
rates remain close to zero and equity market values remain
depressed from the COVID-19 related economic slowdown that it would
hurt Blucora's wealth management results and could reduce Blucora's
annual EBITDA by as much as 20% compared to previous projections.
We are affirming the ratings because we expect TaxACT will perform
well, and we expect this and the potential for other mitigants to
reduce the impact on EBITDA, which should support weighted average
debt to EBITDA remaining below 3x. Further, we believe that the
defensive moves the firm has taken, including boosting liquidity,
should support creditworthiness at the current rating level," S&P
said.
"The negative outlook reflects our expectation that leverage could
rise above 3x if market, interest rate, and economic conditions are
more severe or prolonged than expected. That said, we expect
leverage to remain below 3x on a weighted average basis, and we
expect the firm to successfully manage its acquisition of HKFS with
minimal loss of clients or financial advisers and to reduce costs
while maintaining good liquidity," S&P said.
Over the same period, S&P could lower the ratings if it expects
leverage to remain above 3x or if liquidity or the company's market
position deteriorates. Specifically, S&P could lower the ratings if
wealth management financial adviser retention declines, if the
company suffers outflows of total client assets, or if TaxACT's
customer activity or revenue meaningfully declines. S&P could also
lower the ratings if cash and cash flow at unregulated group
entities are not sufficient to meet annual debt service
obligations, or if TaxACT's contribution to consolidated EBITDA
falls well below 50%, given the wealth management business's lower
margins.
"We could revise our outlook to stable over the next 12 months if
market and economic conditions improve such that we have more
confidence that weighted average net debt-to-EBITDA leverage will
remain comfortably below 3x while the company maintains adequate
liquidity and improving business performance," the rating agency
said.
BOMBARDIER REC: Moody's Lowers CFR to B1 & Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service downgraded Bombardier Rec Products,
Inc.'s Corporate Family Rating to B1 from Ba3, probability of
default rating to B1-PD from Ba3-PD, BRP's first lien senior
secured revolver to Ba1 from Baa3 and its senior secured term loan
B to B2 from Ba3. The Speculative Grade Liquidity rating was also
downgraded to SGL-3 from SGL-1. The outlook was changed to negative
from stable.
The downgrade reflects Moody's expectation that BRP will be
negatively affected by the social risks associated with the demand
disruptions from the coronavirus outbreak, which will have a
negative impact on the company's discretionary consumer products
and will likely extend the recovery period towards the end of
fiscal 2022 (ending January 2022). Moody's expects that revenues
and EBITDA for BRP for fiscal 2021 will be significantly lower,
resulting in a sharp increase of its leverage to over 10x,
recovering to the 4x range in fiscal 2022 and 2023, once the
coronavirus is under control and consumer demand returns to
normal.
Downgrades:
Issuer: Bombardier Rec Products, Inc.
Probability of Default Rating, Downgraded to B1-PD from Ba3-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-1
Corporate Family Rating, Downgraded to B1 from Ba3
Senior Secured Term Loan, Downgraded to B2 (LGD4) from Ba3 (LGD3)
Senior Secured Revolving Credit Facility, Downgraded to Ba1 (LGD2)
from Baa3 (LGD1)
Outlook Actions:
Issuer: Bombardier Rec Products, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
BRP's rating is constrained by: (1) the significant impact that the
coronavirus crisis will have on its revenues and EBITDA over the
next 12 to 18 months due to the decrease in consumer demand; (2)
leverage that will exceed 10x over the next 12 months before
recovering to around 4x over time; and (3) high-priced,
discretionary products, which could extend BRP's recovery period to
beyond fiscal 2021, even after the current challenging economic
conditions improve.
However, BRP benefits from: (1) good market positions in
snowmobiles, personal watercraft, all-terrain vehicles and
side-by-side vehicles, defended with diversified product profile
and well-recognized global brands; (2) BRP's demonstrated ability
to successfully launch new products and increase revenue channels;
and (3) an adequate liquidity position.
BRP has adequate liquidity (SGL-3). Sources are approximately C$700
million compared to about C$300 million of cash usage over the next
12 months. In March 2020, BRP drew the full amount of its C$700
million revolving credit facility and retained the cash on its
balance sheet, which is currently at C$700 million. BRP's cash
usage over the next 12 months includes approximately $12 million of
term loan amortization and an estimated negative free cash flow of
approximately C$280 million. BRP's revolver is subject to a minimum
fixed charge ratio covenant at 1.1x, against which Moody's
estimates BRP will have a 15% cushion over the next four quarters.
BRP has limited flexibility to boost liquidity from asset sales,
however, the company does not have refinancing risk until 2024,
when the revolving credit facility becomes due.
The negative outlook reflects the potential that the corona-based
recession could be worse, and last longer, than currently expected,
particularly as it affects demand for BRP's products.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if adjusted debt/EBITDA is
sustainable below 4.0x (13.4x for FY2021E), EBIT/Interest is above
2.5x (0.3x for FY2021E), and liquidity improves.
The ratings could be downgraded if a prolonged period of negative
free cash flow is expected, liquidity weakens, or leverage is
expected to remain above 5x by the end of fiscal 2022.
Social considerations for BRP include the current coronavirus
outbreak which has raised concerns over the health and safety of
the general public, resulting in the closures of non-essential
businesses in most cities. This will have a significant negative
impact on BRP's operating performance for FY2021. Additional
considerations were made for the lengthened recovery period which
will be experienced by BRP as consumer preference will likely stay
away from discretionary consumer products due to the softened
economic conditions post coronavirus.
The governance considerations Moody's makes in BRP's credit profile
include the its track record of maintaining conservative financial
policies as demonstrated by its history of low leverage prior to
the economic shock from the coronavirus outbreak. BRP is publicly
traded on the Toronto Stock Exchange and NASDAQ and has
consistently demonstrated its strong financial oversight and data
transparency through its compliance with the regulatory and
reporting requirements.
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 consumer
durables 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 BRP's credit
profile, including its exposure to the decreased demand for
discretionary consumer products have left it vulnerable to shifts
in market sentiment in these unprecedented operating conditions and
BRP 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 BRP of the breadth
and severity of the shock, and the broad deterioration in credit
quality it has triggered.
The principal methodology used in these ratings was Consumer
Durables Industry published in April 2017.
Bombardier Recreational Products Inc., headquartered in Valcourt,
Quebec, Canada, is a global manufacturer and distributor of
powersports vehicles and marine products. Revenue for the fiscal
year ended January 31, 2020 was C$6.1 billion.
BOSS OYSTER: Seeks to Hire James M. Messer as Special Counsel
-------------------------------------------------------------
Boss Oyster, Inc. and Seagrape Enterprises of Apalachicola, Inc.
seeks authority from the US Bankruptcy Court for the Northern
District of Florida to employ a substitute special counsel.
The Debtor tapped James M. Messer, Esq. as substitute special
counsel to assist them with the collection of additional insurance
proceeds.
The Debtors employed Samuel Bearman as special counsel to obtain
additional insurance proceeds owed to them as a result of the
damage caused by Hurricane Michael. On Dec. 6, 2019, Mr. Bearman
passed away.
The Debtors believe that Mr. Messer is well qualified to represent
them in their continued pursuit of obtaining additional insurance
proceeds from the damage caused by Hurricane Michael.
Mr. Messer assures the court that he does not hold nor represent
any interest adverse to the Debtor or the Debtor’s estate with
respect to the matters on which he is to be employed.
The counsel can be reached through:
James M. Messer, Esq.
316 S Baylen St
Pensacola, FL 32502
Phone: +1-850-435-7132
About Boss Oyster Inc.
Boss Oyster Inc. owns and operates an oyster bar restaurant in
Apalachicola, Fla.
Boss Oyster and its affiliate Seagrape Enterprises of Apalachicola,
Inc., sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Fla. Lead Case No. 19-40357) on July 12, 2019. At the
time of the filing, Boss Oyster was estimated to have assets of
between $1 million and $10 million and liabilities of the same
range. The cases have been assigned to Judge Karen K. Specie.
Bruner Wright, P.A. is the Debtors' bankruptcy counsel.
BOY SCOUTS OF AMERICA: Panel Hires Berkeley as Financial Advisor
----------------------------------------------------------------
The Official Committee of Tort Claimants of Boy Scouts of America
and Delaware BSA, LLC, seeks authorization from the U.S. Bankruptcy
Court for the District of Delaware to retain Berkeley Research
Group, LLC, as financial advisor to the Committee.
The Committee requires Berkeley to:
a. assist the Tort Claimants' Committee in investigating the
assets, liabilities and financial condition of the Debtors'
or the Debtors' operations and the desirability of the
continuance of any portion of those operations, including a
review of any donor restrictions on the Debtors' assets;
b. assist the Tort Claimants' Committee in the review of
financial related disclosures required by the Court or
Bankruptcy Code, including the Schedules of Assets and
Liabilities, the Statement of Financial Affairs, and
Monthly Operating Reports;
c. analyze the Debtors' accounting reports and financial
statements to assess the reasonableness of the Debtors'
financial disclosures;
d. provide forensic accounting and investigations with respect
to transfers of the Debtors' assets and recovery of
property of the estate;
e. assist the Tort Claimants' Committee in evaluating the
Debtors' ownership interests of property alleged to be held
in trust by the Debtors for the benefit of third parties
or property alleged to be owned by non-debtor entities;
f. assist the Tort Claimants' Committee in reviewing and
evaluating any proposed asset sales or and other asset
dispositions;
g. assist the Tort Claimants' Committee in the evaluation of
the Debtors' organizational structure, including its
relationship with the related non-debtor organizations and
local councils that may hold or have received property of
the estate;
h. assist the Tort Claimants' Committee in evaluating the
Debtors' cash management system, including unrestricted and
restricted funds, the Commingled Endowment Fund LP, and
similar pooled income or investment funds;
i. assist the Tort Claimants' Committee in the review of
financial information that the Debtors may distribute to
creditors and others, including, but not limited to, cash
flow projections and budgets, cash receipts and
disbursement analyses, analyses of various asset and
liability accounts, and analyses of proposed transactions
for which Court approval is sought;
j. attend at meetings and assistance in discussions with the
Debtors, the Tort Claimants' Committee, the U.S. Trustee,
and other parties in interest and professionals hired by
the above-noted parties as requested;
k. assist in the review or preparation of information and
analyses necessary for the confirmation of a plan, or for
the objection to any plan filed in this Case which the Tort
Claimants' Committee opposes;
l. assist the Tort Claimants' Committee with the evaluation
and analysis of claims, and on any litigation matters,
including, but not limited to, avoidance actions for
fraudulent conveyances and preferential transfers, and
declaratory relief actions concerning the property of the
Debtors' estates;
m. analyze the flow of funds in and out of accounts the
Debtors contends contain assets held in trust for others,
to determine whether the funds were commingled with non-
trust funds and lost their character as trust funds, under
applicable legal and accounting principles;
n. assist the Tort Claimants' Committee with respect to any
adversary proceedings that may be filed in the Debtors'
Case and providing such other services to the Tort
Claimants' Committee as may be necessary in this Case.
Berkeley will be paid at these hourly rates:
Managing Director $680 to $1,095
Director & Senior Professional Staff $500 to $680
Junior Professional Staff $235 to $500
Support Staff $115 to $235
Berkeley will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Marvin A. Tenebaum, partner of Berkeley Research Group, 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 (a)
is not creditors, equity security holders or insiders of the
Debtors; (b) has not been, within two years before the date of the
filing of the Debtors' chapter 11 petition, directors, officers or
employees of the Debtors; and (c) does not have an interest
materially adverse to the interest of the estate or of any class of
creditors or equity security holders, by reason of any direct or
indirect relationship to, connection with, or interest in, the
Debtors, or for any other reason.
Berkeley can be reached at:
Marvin A. Tenebaum
BERKELEY RESEARCH GROUP, LLC
70 W. Madison St., Suite 5000
Chicago, IL 60602
Tel: (312) 429-7900
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets at least $500 million in liabilities as of the
bankruptcy filing.
The Debtors tapped SIDLEY AUSTIN LLP as general bankruptcy counsel;
MORRIS, NICHOLS, ARSHT & TUNNELL LLP as Delaware counsel; and
ALVAREZ & MARSAL NORTH AMERICA, LLC as financial advisor. OMNI
AGENT SOLUTIONS is the claims agent.
BRIGGS & STRATTON: Reduces Manufacturing Activity Amid Covid-19
---------------------------------------------------------------
Briggs & Stratton Corporation issued the following press release
providing a business update related to COVID-19 impacts.
"To protect the health, safety and well-being of its employees,
customers, channel partners and the public, the company continues
to implement preventative measures while also seeking to meet the
needs of its global customers as an essential supplier to their
businesses. These measures include more frequent and deeper
cleaning of facilities; using appropriate social distancing
practices; working remotely when possible; restricting business
travel; cancelling certain events; and restricting visitor access
to facilities.
In response to the spread of COVID-19, uncertain economic
conditions resulting in reduced demand and potential constraints on
its supply chain, the company is reducing manufacturing activity at
several of its manufacturing facilities and has temporarily shut
down others. The company is also taking other actions to manage
operating expenses in this fluid business environment. It will
continue to monitor the situation and adjust manufacturing and
other operations as the situation warrants.
"Despite the reduced production, the company believes it is
well-positioned with finished goods inventories in most categories
to meet expected customer demand, as well as with aftermarket parts
to support dealers worldwide in the repair and maintenance of
products. The company is closely monitoring the situation and
proactively taking actions needed to keep people safe and to supply
the market during this spring season.
"At this time, it is difficult to estimate the magnitude of the
impact of the COVID-19 pandemic on the company's business,
financial position, results of operations or liquidity. The
magnitude of the impact, which could be material, will be
determined by the duration and span of the pandemic, operational
disruptions including those resulting from government actions and
the overall impact on the economy. The company expects that its
fiscal third and fourth quarter results will be adversely impacted
by the global pandemic. As a result, the company is withdrawing
its financial outlook for the fiscal year ending June 28, 2020. An
update will be provided in the company's fiscal third quarter
announcement of financial results and conference call.
About Briggs & Stratton
Briggs & Stratton Corporation (NYSE: BGG), headquartered in
Milwaukee, Wisconsin, is a producer of gasoline engines for outdoor
power equipment, and is a designer, manufacturer and marketer of
power generation, pressure washer, lawn and garden, turf care and
job site products through its Briggs & Stratton, Simplicity,
Snapper, Ferris, Vanguard, Allmand, Billy Goat, Murray, Branco, and
Victa brands. Briggs & Stratton products are designed,
manufactured, marketed and serviced in over 100 countries on six
continents. Visit http://www.basco.com/and
http://www.briggsandstratton.com/
Briggs & Stratton reported a net loss of $54.08 million for the
year ended June 30, 2019, compared to a net loss of $11.32 million
for the year ended July 1, 2018. As of Dec. 29, 2019, the Company
had $1.80 billion in total assets, $557.30 million in total current
liabilities, $844.04 million in total other liabilities, and
$399.53 million in total shareholders' investment.
* * *
As reported by the TCR on Feb. 21, 2020, S&P Global Ratings lowered
its issuer credit rating on U.S.-based manufacturer of small
engines Briggs & Stratton Corp. (BGG) to 'CCC' from 'B-'. S&P
believes the company might not be able to use its asset-based
lending (ABL) revolving credit facility availability to repay the
unsecured notes and maintain enough liquidity to meet the working
capital needs of its highly seasonal business.
BUFFETS LLC: James Black's Claims Barred, Court Says
----------------------------------------------------
In the case captioned JAMES W. BLACK, Plaintiff, v. OLD COUNTRY
BUFFET, Defendant, Case No. 15 C 6422 (N.D. Ill.), Magistrate Judge
Sidney I. Schenker granted Defendant's motion for judgment on the
pleadings.
James W. Black filed a pro se Amended Complaint against Old Country
Buffet Restaurant Company, LLC on Sept. 1, 2015. Mr. Black asserts
a claim against the defendant for race discrimination in violation
of 42 U.S.C. section 1983.
Mr. Black claims he was discriminated against on the basis of his
race by OCB on Feb. 22, 2015 because he was not seated where he
wished to be seated at the OCB restaurant at Ford City Mall and
because OCB asked Mr. Black and his family to leave the OCB
restaurant. In the Amended Complaint, Mr. Black seeks recovery of
$25,000 in damages. OCB denies that Mr. Black's race was the basis
for any of its actions.
The case was stayed on April 14, 2016, as a result of the Chapter
11 bankruptcy proceeding involving OCB. On May 24, 2019, the
bankruptcy court entered an order closing the bankruptcy
proceeding. As a result, on Sept. 12, 2019, the Court lifted the
stay and proceedings in this case re-commenced.
OCB claims res judicata precludes Mr. Black from pursuing this case
because two of Mr. Black's three claims were disallowed in
bankruptcy court as untimely filed, and Mr. Black in fact received
a distribution from the reorganization plan on the first claim he
filed in the amount of $2,500 to settle his discrimination claim.
Mr. Black argued that his claim was timely and that it remained in
"stay status until the bankruptcy case was over."
The Court afforded Mr. Black the opportunity to file a sur-response
to address the materials not included in OCB's original motion or
supporting brief, namely the $2,500 distribution check to Mr.
Black; however, Mr. Black offered no response.
According to Judge Schenker, the doctrine of res judicata provides
that a "final judgment on the merits of an action precludes the
parties or their privies from relitigating issues that were or
could have been raised in that action." Not only does res judicata
apply in the bankruptcy context, but public policy interests --
that there be an end to litigation -- particularly support it
within this setting. The elements of res judicata are: (1) a final
judgment on the merits in a prior action; (2) the identity of the
cause of action in both the prior and subsequent suits; and (3) the
identity of parties or privies in these suits. All of the elements
are met in this matter.
Regarding elements two and three, Mr. Black filed a proof of claim
in the OCB bankruptcy proceeding on July 18, 2016, a few days after
the deadline for filing claims. The trustee in the OCB case
objected to this claim, Mr. Black filed a motion to consider the
claim timely filed, and the bankruptcy court granted his motion.
The basis for Mr. Black's claim was "Law suit violation of
constitution civil rights" and he valued the claim at $25,000.
Thus, the cause of action and the parties involved in both this
case and the OCB bankruptcy proceeding are identical.
With regard to the first element, on May 24, 2019, the bankruptcy
court entered an order of final decree, declared the bankruptcy
matter to be fully administered, and closed the Chapter 11 cases.
On that same date, the debtor's unsecured creditor trust issued a
check in the amount of $2,500 payable to James W. Black, and Mr.
Black negotiated the check on or about June 26, 2019. The Debtor's
Second Amended Joint Plan of Reorganization Under Chapter 11 of the
Bankruptcy Code discharged and released all claims against OCB and
permanently enjoined any entity holding a claim against OCB from
continuing any action against OCB. The order confirming this plan
also permanently enjoined any claim holder from continuing any
proceeding against OCB. Thus, a final judgment was reached -- and
that final judgment specifically barred anyone from continuing to
proceed on any claim against OCB that was discharged in the
bankruptcy.
Mr. Black also filed two additional claims in the bankruptcy
proceeding: one on Jan. 31, 2019 (Claim 3346) and another on Feb.
26, 2019 (Claim 3349), each asserting a claim for $25,000 that the
bankruptcy court disallowed as untimely and expunged from the
official claims register. To the extent Mr. Black relies on these
claims to argue that res judicata does not apply to bar his action,
he is mistaken. The bankruptcy court's rejection of those claims as
untimely is now final, as the bankruptcy proceeding is now final.
After taking judicial notice of the bankruptcy proceedings and
affording Mr. Black the opportunity to respond to the materials
raised in OCB's Reply brief, the Court determines that the elements
of res judicata have been met. Mr. Black filed a claim in OCB's
bankruptcy case for $25,000 raising a claim for violation of his
constitutional rights -- the same issue and recovery sought in this
case pending before the Court. He then filed two more claims in the
bankruptcy proceeding that were denied as untimely. The
discrimination claim was paid (albeit in a compromised amount), his
two other claims were disallowed and expunged, and the final
bankruptcy court order bars him from proceeding on any of those
claims in the court.
A copy of the Court's Memorandum Opinion and Order dated Feb. 24,
2020 is available at https://bit.ly/2TJD7Ej from Leagle.com.
James W Black, Plaintiff, pro se.
Old Country Buffet, Defendant, represented by Kenneth J. Barrish --
Barrish@LitchfieldCavo.com -- Litchfield Cavo & Patrick John
Ruberry -- Ruberry@LitchfieldCavo.com -- Litchfield and Cavo,
LLP.
About Buffets LLC
Buffets LLC, et al., are one of the largest operators of
buffet-style restaurants in the U.S. The buffet restaurants,
located in 25 states, principally operate under the names Old
Country Buffet(R), Country Buffet(R), HomeTown(R) Buffet, Ryan's(R)
and Fire Mountain(R). These locations primarily offer self-service
buffets with entrees, sides, and desserts for an all-inclusive
price. In addition, Buffets owns and operates an 10-unit full
service, casual dining chain under the name Tahoe Joe's Famous
Steakhouse(R).
Buffets Holdings, Inc., filed for Chapter 11 relief in January 2008
and won confirmation of a reorganization plan in April 2009. In
January 2012, Buffets again sought Chapter 11 protection and
emerged from bankruptcy in July 2012.
On Aug. 19, 2015, Alamo Ovation, LLC acquired Buffets Restaurants
Holdings, Inc., and as a result of the merger, Buffets operated
over 300 restaurants in 35 states.
Down to 150 restaurants in 25 states after closing unprofitable
locations, Buffets LLC and its affiliated entities sought Chapter
11 protection (Bankr. W.D. Tex. Case No. Lead Case No. 16-50557) in
San Antonio, Texas, on March 7, 2016. The cases were assigned to
Judge Ronald B. King.
The Debtors have tapped John E. Mitchell, Esq., David W. Parham,
Esq., Andrea Hartley, Esq., Esther A. McKean, Esq., and Amy M.
Leitch, Esq., at Akerman, LLP as counsel; Bridgepoint Consulting,
LLC as financial advisor; and Donlin, Recano & Company as claims
and noticing agent.
The United States Trustee, on March 21, 2016, appointed the
Official Committee of Unsecured Creditors. The Creditors'
Committee retained Greenberg Traurig, LLP, as its counsel and FTI
Consulting, Inc., as its financial advisor.
On April 27, 2017, the Court confirmed the Debtors' Second Amended
Joint Plan of Reorganization. The Effective Date of the Plan was
May 18, 2017.
BULL SHIRTS: Taps Hoffman & Saweris as Legal Counsel
----------------------------------------------------
Bull Shirts, Inc., seeks approval from the U.S. Bankruptcy Court
for the Southern District of Texas to hire Hoffman
& Saweris, p.c., as its legal counsel.
Services to be rendered by the firm are:
a. advise the Debtor with respect to its powers and duties;
b. advise the Debtor with respect to the rights and remedies
of the Estate's creditors and other parties in interest;
c. conduct appropriate examinations of witnesses, claimants
and other parties in interest;
d. prepare all appropriate pleadings and other legal
instruments required to be filed in this case;
e. represent the Debtor in all proceedings before the Court
and in any other judicial or administrative proceeding in which the
rights of the Debtor or the Estate may be affected;
f. represent and advide thr Debtor in the reorganization of
assets and liabilities through the bankruptcy court;
g. advise the Debtor in connection with the formulation,
solicitation, confirmation and consummation of any plans of
reorganization which the Debtor may propose; and
h. perform any other legal services that may be appropriate in
connection with the continued operations of the Debtor's business.
Matthew Hoffman, Esq., and Alan Brian Saweris, Esq., the attorneys
who will be handling the case, charge $350 per hour and $250 per
hour, respectively. Paralegals charge an hourly fee of $75.
The firm received retainers from the Debtor in the total amount of
$19,100, plus $1,717 for the filing fee.
Mr. Hoffman, a principal of Hoffman & Saweris, disclosed in a court
filing that he does not hold or represent any interest adverse to
the Debtor or its estate.
The firm can be reached through:
Matthew Hoffman, Esq.
Alan Brian Saweris, Esq.
Hoffman & Saweris, p.c.
2777 Allen Parkway, Suite 1000
Riviana Building
Houston, TX 77019
Tel: 713-654-9990
Fax: 713-654-0038
About Bull Shirts, Inc.
Bull Shirts, Inc. -- https://www.bull-shirts.com -- is a full
service advertising specialty company offering a wide range of
promotional items to promote its clients' companies.
Bull Shirts, Inc. filed its voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31746) on March
13, 2020. In the petition signed by Joseph Dottenweich, president,
the Debtor estimated $100,000 to $500,000 in assets and $1 million
to $10 million in liabilities. Matthew Hoffman, Esq. at HOFFMAN &
SAWERIS, P.C. serves as the Debtor's counsel.
C & D FRUIT: Gets Final Approval on Cash Collateral Use
-------------------------------------------------------
Judge Caryl E. Delano authorized C & D Fruit and Vegetable Co.,
Inc., and Trio Farms, L.L.C., to use cash collateral on a final
basis.
Pursuant to the final order:
(a) all persons and entities owing monies to the Debtors are
authorized and directed to pay the monies to the Debtors, without
set-off;
(b) the Debtors are authorized to use cash collateral including
cash, deposit accounts, accounts receivable, and the proceeds from
agricultural activities, including the sale of produce, in
accordance with the budgets for the actual and necessary expenses
of operating the Debtors' business, unless Farm Credit will
otherwise agree in writing;
(c) as adequate protection, Farm Credit is granted valid,
perfected and enforceable replacement lien in and upon all of the
categories and types of collateral in which it held a security
interest and lien as of the Petition Date to the same extent,
validity and priority that Farm Credit held as of the Petition
Date;
(d) to the extent the Court-approved adequate protection is not
sufficient to protect Farm Credit, Farm Credit will be entitled to
a claim under Section 507(b) of the Bankruptcy Code.
The final order is without prejudice to the Debtors' right to
challenge the extent, validity, or priority of any lien or claim of
any creditor with an interest in cash collateral.
About C & D Fruit and Vegetable
Based in Bradenton, Florida, C & D Fruit and Vegetable Co., Inc.,
and Trio Farms, L.L.C., grow, ship, and pack fresh fruits and
vegetables, including green beans, cucumbers, peppers, squash and
strawberries. The companies are family owned and ships under the
O'Brien Family Farm label. They ship throughout the United States
and Canada.
C & D Fruit and Vegetable Co. and Trio Farms sought Chapter 11
protection (Bankr. M.D. Fla. Case Nos. 18-00997 & 18-00998) on Feb,
9, 2018. In the petition signed by Thomas M. O'Brien, president, C
& D Fruit estimated assets and debt between $1 million and $10
million.
Edward J. Peterson, Esq., and Amy Denton Harris, Esq., at Stichter,
Riedel, Blain & Postler, P.A., serve as the Debtors' counsel.
Equity Partners HG LLC, is the investment banker.
CALIFORNIA RESOURCES: Moody's Lowers CFR to Caa3, Outlook Negative
------------------------------------------------------------------
Moody's Investors Service downgraded California Resources Corp.'s
Corporate Family Rating to Caa3 from Caa1 and Probability of
Default Rating to Caa3-PD from Caa1-PD. The rating on the company's
secured first lien revolving credit facility was downgraded to B2
from B1, its secured first lien term loan due 2022 was downgraded
to Caa1 from B2 and its secured first lien term loan due 2021 was
downgraded to Caa3 from Caa1. The rating on the secured second lien
notes was downgraded to C from Caa2 and the ratings on the
unsecured notes were downgraded to C from Caa3. The Speculative
Grade Liquidity Rating was downgraded to SGL-4 from SGL-3. The
outlook is negative.
The rating actions reflect CRC's elevated restructuring risk,
including the potential for a bankruptcy filing or distressed
exchange, following its failed attempt to execute a debt for debt
exchange in March. The precipitous drop in oil prices and
likelihood that low prices will persist into 2021, compounded by
production declines that will result from severely reduced
investment and the lack of price hedging, will result in greatly
reduced cash flow in 2020 and weaken the company's ability to
service its high debt load.
Downgrades:
Issuer: California Resources Corp.
Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3
Corporate Family Rating, Downgraded to Caa3 from Caa1
Senior Secured Revolving Credit Facility, Downgraded to B2 (LGD1)
from B1 (LGD1)
Senior Secured First Lien Term Loan due 2022, Downgraded to Caa1
(LGD2) from B2 (LGD2)
Senior Secured First Lien Term Loan due 2021, Downgraded to Caa3
(LGD4) from Caa1 (LGD3)
Senior Secured Notes, Downgraded to C (LGD6) from Caa2 (LGD5)
Senior Unsecured Notes, Downgraded to C (LGD6) from Caa3 (LGD6)
Outlook Actions:
Issuer: California Resources Corp.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
CRC's Caa3 CFR reflects the company's high financial leverage,
substantial refinancing risk over next 18 months, an unsustainable
capital structure and elevated risk of covenant breach. CRC has
approximately $4.2 billion of debt maturities in the 2021-22
period. The deep discounts at which most of its debt trades
indicate considerable restructuring risk. Moody's would view any
material amount of debt repurchases done at a significant discount
to par to be a distressed exchange, which Moody's considers a
default.
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 E&P sector has
been one of the sectors most significantly affected by the shock
given its sensitivity to demand and oil prices. More specifically,
the weaknesses in CRC's credit profile have left it vulnerable to
shifts in market sentiment in these unprecedented operating
conditions and CRC remains vulnerable to the outbreak continuing to
spread and oil prices remaining weak. 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 CRC of the breadth and severity
of the oil demand and supply shocks, and the broad deterioration in
credit quality it has triggered.
The SGL-4 Speculative Grade Liquidity Rating reflects Moody's'
expectation that CRC will have weak liquidity through 2021. While
Moody's expects that CRC had significant cash balances at the end
of the first quarter, augmented through realizing $76 million by
liquidating its hedge positions, the company will have difficulty
maintaining compliance with the covenants under its revolver in the
latter part of 2020.
CRC has cut its capital spending to a level that maintains
mechanical integrity of its operations, to preserve liquidity.
However, this significantly reduced level of spending will not
generate new production to offset natural decline. As a result,
Moody's expects CRC's production to decline at least 10% through
the first quarter of 2021 before giving effect to any potential
shut-in production, further constraining cash flow. In addition to
its revolver, which matures in June 2021, CRC has $2.4 billion of
debt maturities in 2021 (assuming the springing maturity on the
term loan due 2022 is activated) and $1.8 billion in 2022.
The capital structure is comprised of (in order of decreasing
priority of claim): the revolving credit facility (rated B2), first
lien term loan due 2022 (Caa1), first lien term loan due 2021
(Caa3), second lien notes due 2022 (C) as well as senior unsecured
notes (C). The ratings reflect the Caa3 CFR, priority of claim of
the individual debt issues and relative amounts of the debt.
The negative outlook reflects the possibility that a very low
commodity price environment could further erode CRC's debt coverage
metrics.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if asset values weaken further and
Moody's assessment of expected recovery worsens. Although unlikely
in the near term, an upgrade would be considered if CRC
satisfactorily addresses 2021 debt maturities, bolsters liquidity
and resolves potential covenant issues, and reverses recent
production declines.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
California Resources Corporation, headquartered in Santa Clarita,
California, operates exclusively in California and had annual
production of 128,000 barrels of oil equivalent (boe) per day in
2019.
CAMBER ENERGY: To Conduct a Virtual Special Meeting on April 16
---------------------------------------------------------------
Camber Energy, Inc., notified a change in location of its special
meeting of stockholders to be held on Thursday, April 16, 2020, at
10:00 a.m. (Houston Time). In light of the growing health impact
of the coronavirus (COVID-19) pandemic, the extensive federal and
local restrictions on non-essential activities and travel, the
restriction of public gatherings of 10 or more people in Texas, and
out of concern for the health and well-being of the Company's
colleagues and stockholders, the Special Meeting has been changed
to be held in a virtual meeting format only.
As described in the proxy materials for the Special Meeting,
stockholders are entitled to participate in the Special Meeting if
they were a stockholder of the Company as of the close of business
on March 2, 2020, the record date, or hold a legal proxy for the
meeting provided by your bank, broker, or nominee.
Instead of being held in a physical location, the Special Meeting
will be held virtually. To be admitted to the Special Meeting at
https://www.iproxydirect.com/CEISpecial, you must enter the control
number found on your proxy card or voting instruction form. You
may vote during the Special Meeting by following the instructions
available on the meeting website during the meeting.
Further information regarding the change of location of the Special
Meeting can be found in the Notice of Change of Location of Special
Meeting of Stockholders filed by the Company with the Securities
and Exchange Commission on April 3, 2020.
Whether or not a stockholder plans to attend the Special Meeting by
virtual means, the Company urges its stockholders to vote and
submit their proxy in advance of the Special Meeting by one of the
methods described in the proxy statement. The proxy card included
with the proxy statement previously distributed will not be updated
to reflect the information provided above and may continue to be
used to vote each stockholder's shares in connection with the
Special Meeting. If Company stockholders have previously submitted
a proxy using one of the methods described in the proxy statement
and proxy card, their vote will be counted and they do not need to
submit a new proxy or vote at the Special Meeting.
About Camber Energy
Based in Houston, Texas, Camber Energy -- http://www.camber.energy
-- is an independent oil and gas company engaged in the development
of crude oil, natural gas, and natural gas liquids in Texas.
As of Dec. 31, 2019, Camber Energy had $5.10 million in total
assets, $2.02 million in total liabilities, and $3.08 million in
total stockholders' equity. For the nine months ended Dec. 31,
2019, the Company reported a net loss of $3.40 million.
At Dec. 31, 2019, the Company's total current assets of $2.4
million exceeded its total current liabilities of approximately
$2.0 million, resulting in working capital of $0.4 million, while
at March 31, 2019, the Company's total current assets of $8.2
million exceeded its total current liabilities of approximately
$2.1 million, resulting in working capital of $6.1 million. The
reduction from $6.1 million to $0.4 million is due to losses from
continuing operations and costs incurred with the merger and
ultimate divestiture of Lineal, including funds loaned to Lineal in
connection with such divestiture. The Company said the factors
above raise substantial doubt about its ability to continue to
operate as a going concern for the twelve months following the
issuance of these financial statements. The Company believes that
it will not have sufficient liquidity to meet its operating costs
unless it can raise new funding, which may be through the sale of
debt or equity or unless it closes the Viking Merger, which is
scheduled to be closed by June 30, 2020, extendable up to Dec. 31,
2020 under certain circumstances, the
completion of which is the Company's current plan. There is no
guarantee though that the Viking merger will be completed or other
sources of funding be available.
Camber Energy was notified by the NYSE American that the Company
was not in compliance with certain of the Exchange's continued
listing standards as set forth in Part 10 of the NYSE American
Company Guide. Specifically, Camber is not in compliance with
Section 1003(a)(ii) of the Company Guide in that it reported
stockholders' equity of $3.1 million as of Dec. 31, 2019 and net
losses in three of four of its most recent fiscal years then ended,
meaning specifically that Camber is not in compliance with Section
1003(a)(ii) of the Company Guide which requires listed companies
have stockholders' equity of $4,000,000 or more and not have
sustained losses from continuing operations and/or net losses in
three of four of such issuer's most recent fiscal years.
CAMERON TRANSPORT: Seeks to Hire Robert R. Radel as Counsel
-----------------------------------------------------------
Cameron Transport Corp. seeks authority from the US Bankruptcy
Court for the Western District of New York to employ Robert R.
Radel, Attorneys at Law, as its counsel.
The attorney will represent, advise, and assist the Debtor during
the course of these proceedings, in connection with all legal
matters for which the Debtor may require legal services or
assistance.
The firm received a retainer in the sum of $15,000.
The firm is disinterested within the meaning of 11 U.S.C. 101(14),
according to court filings.
The firm can be reached through:
Robert R. Radel, Esq.
ROBERT R. RADEL, ATTORNEY AT LAW
174 Franklin Street
Buffalo, NY 14202
Tel: (716) 322-0980
E-mail: RobertRRadelEsq@MSN.com
About Cameron Transport Corp.
Cameron Transport Corp. is a transportation company in Niagara
Falls, NY.
Cameron Transport Corp. filed its voluntary petition under Chapter
11 of the US Bankruptcy Code (Bankr. W.D.N.Y. Case No. 20-10454) on
March 17, 2020. In the petition signed by Faisel Haruna, president,
the Debtor estimated $1,319,426 in assets and $2,239,182 in
liabilities. Robert R. Radel, Esq. at ROBERT R. RADEL, ATTORNEY AT
LAW represent the Debtor as counsel.
CAPSTONE OILFIELD: Gets Final Agreed Cash Collateral Order Approval
-------------------------------------------------------------------
Judge Janice D. Loyd of the U.S. Bankruptcy Court for the Western
District of Oklahoma inked her approval to an agreed final order
authorizing Capstone Oilfield Disposal Services, LLC to use cash
collateral to pay normal operating expenses so as to maintain its
current business operations.
Interbank has agreed to the Debtor's use of cash collateral to pay
the ordinary and necessary operating expenses of the Debtor's
business and assets only for the period through May 15, 2020,
pursuant to and in accordance with the terms of the Agreed Final
Order.
Interbank holds a claim of approximately $13,000,000 secured by
substantially all of Debtor's assets and proceeds therefrom.
Pursuant to the Agreed Final Order, the Debtor will account to
Interbank for all cash collateral: (i) the estate now possesses;
(ii) that has been transferred into the possession of others, if
any, since the Petition Date; (iii) being held by any party in
privity with the Estate; or (iv) that the Debtor might hereafter
obtain.
As partial adequate protection, Interbank is granted, effective as
of the Petition Date, valid, binding, enforceable, and
automatically perfected liens co-extensive with Interbank's
pre-petition liens in all currently owned or hereafter acquired
property and assets of the estate, to the extent of any decrease in
value of the collateral or cash collateral.
A copy of the Agreed Final Order is available for free at:
https://is.gd/Gy0uki from PacerMonitor.com.
About Capstone Oilfield
Capstone Oilfield Disposal Services, LLC, with place of business in
Hennessey, Oklahoma, sought Chapter 11 protection (Bankr. W.D.
Okla. Case No. 20-10461) on Feb. 14, 2020. In the petition signed
by Randy Holder, owner/managing member, the Debtor reported
$10,058,603 in total assets and $14,158,390 in total liabilities.
Stephen J. Moriarty, Esq., of Fellers, Snider et al., represents
the Debtor as counsel.
CARVANA CO: Subsidiary Sells $495 Million Finance Receivables
-------------------------------------------------------------
On March 30, 2020, in connection with a securitization transaction,
a subsidiary of Carvana Co. entered into a transfer agreement with
a statutory trust established for the securitization, pursuant to
which the securitization trust purchased from such subsidiary
approximately $495.0 million in principal balances of finance
receivables. The finance receivables sold pursuant to the Transfer
Agreement collateralize the asset-backed securities issued by the
securitization trust.
About Carvana
Founded in 2012 and based in Tempe, Arizona, Carvana Co. --
http://www.carvana.com/-- is a holding company that was formed as
a Delaware corporation on Nov. 29, 2016. Carvana is an e-commerce
platform for buying and selling used cars.
Carvana reported a net loss of $364.64 million in 2019, a net loss
of $254.74 million in 2018, and a net loss of $164.32 million in
2017. As of Dec. 31, 2019, the Company had $2.05 billion in total
assets, $1.86 billion in total liabilities, and $191.94 million in
total stockholders' equity.
* * *
As reported by the TCR on May 24, 2019, S&P Global Ratings affirmed
its 'CCC+' issuer credit rating on Carvana Co. to reflect the
company's improved liquidity after it raised $480 million by
issuing about $230 million of common stock and a $250 million
add-on to its existing senior unsecured notes due 2023.
CDS US INTERMEDIATE: Moody's Affirms Ca CFR, Outlook Negative
-------------------------------------------------------------
Moody's Investors Service appended a Limited Default designation to
CDS U.S. Intermediate Holdings, Inc.'s Ca-PD probability of default
rating. Concurrently, Moody's affirmed Cirque du Soleil's Ca
corporate family rating, Caa3 senior secured first lien ratings and
C second lien secured term loan rating. The outlook remains
negative.
The limited default "LD" designation appended to Cirque du Soleil's
PDR reflects that the missed principal amortization on its first
lien term loan due March 31, 2020 constitutes a default under
Moody's definition.
Ratings Affirmed:
Issuer: CDS U.S. Intermediate Holdings, Inc.
Corporate Family Rating, Affirmed Ca
Probability of Default Rating, Affirmed Ca-PD/LD (/LD appended)
Senior Secured 1st Lien Revolver Credit Facility, Affirmed Caa3
(LGD3)
Senior Secured 1st Lien Term Loan, Affirmed Caa3 (LGD3)
Senior Secured 2nd Lien Term Loan, Affirmed C (LGD5)
Outlook Actions:
Issuer: CDS U.S. Intermediate Holdings, Inc.
Outlook, Remains Negative
RATINGS RATIONALE
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 likelihood of debt
restructuring in the near term.
Cirque du Soleil has weak liquidity. As of December 2019, Moody's
estimates sources totaled around $120 million, consisting of cash
on hand of about $35 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. As of March,
Moody's expects that Cirque du Soleil has breached the revolver's
springing maximum net first lien leverage covenant of 5.5x. Cirque
du Soleil has limited ability to generate alternate liquidity from
asset sales.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. As a result, Cirque du Soleil has closed its shows
worldwide. 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.
Cirque du Soleil is a provider of live acrobatic theatrical
performances. The company currently operates 15 resident shows and
18 touring shows under several brands. During the twelve months
ended September 2019, the company generated about $950 million in
revenues.
FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if Moody's estimates of expected
losses for the company's creditors become higher than those implied
by the Ca CFR.
The ratings could be upgraded if the company reduces debt
materially and liquidity becomes adequate in an improved operating
environment.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
CFS BRANDS: S&P Lowers ICR to B- on Expectations of Weaker Demand
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on CFS Brands
LLC 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'.
The recent coronavirus outbreak is disrupting the foodservice
equipment end markets in the U.S. There is substantial
uncertainty around the scope and duration of the outbreak and any
lingering effects on the economy and consumer behavior. The
negative outlook incorporates the economic uncertainty stemming
from the pandemic and the reasonable risk of noncompliance with the
company's first-lien net leverage covenant if demand remains
suppressed for a significant period of time.
The negative outlook on CFS 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
sustained weaker restaurant traffic resulting from the coronavirus
outbreak.
"We could lower our rating on CFS if EBITDA contracts
significantly, caused 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 such that we deem the
capital structure unsustainable," S&P said.
"We could revise our outlook to stable if the demand and margin
impact of the current coronavirus outbreak appear to be less
severe, allowing the company to continue generating positive free
cash flow and risk of covenant compliance and liquidity becomes
remote," the rating agency said.
CHILDREN OF PROMISE: S&P Lowers Bond Rating to CCC+; Outlook Neg.
-----------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'CCC+' from
'BB+' on the California Statewide Communities Development
Authority's series 2015A and taxable series 2015B school facility
revenue bonds, issued for Children of Promise Preparatory Academy
(COPPA). The outlook is negative.
"The multi-notch downgrade reflects our view of COPPA's intent to
cease current school operations," said S&P Global Ratings credit
analyst Jessica Wood. On Jan. 15, 2020, the school's authorizer,
Inglewood Unified School District (IUSD) voted to deny the Renewal
Charter Petition submitted by COPPA seeking a charter renewal for
five years from fiscal 2021-2026. On Feb. 12, 2020, COPPA's board
of directors voted against appealing the nonrenewal decision to the
County Office of Education. Therefore, COPPA intends to close the
school at the end of the 2020 school year--on June 12th. "At the
time of our last review in January 2019, our discussions with both
the authorizer, IUSD, and COPPA management did not provide any
indication that nonrenewal was a possibility," Ms. Wood added.
Contributing to the downgrade and the negative outlook is the
nonrenewal of the school's charter, and management's decision not
to appeal the denial of its charter, This illustrates governance
risks that are above the sector standard. At this time, S&P
believes that social and environmental factors are in line with the
sector. Despite this risk, S&P views environmental and social risk
as being in line with its view of the sector as a whole.
Given the COVID-19 pandemic and broader public safety concerns, the
California governor recently ordered all schools to close and make
every effort to provide alternative learning opportunities, while
taking into account the needs of local communities. COPPA is
currently providing students academics via their online learning
platform and it expects per-pupil funding to continue for the
remainder of fiscal 2020.
In accordance with its criteria, the 'CCC+' rating and negative
outlook reflect S&P's view that there is greater than a 50% chance
of default given the school's impending closure, but the rating
agency does not expect payment crisis in the near term (within 12
months). S&P expects operating deficits in fiscal 2020, partially
driven by the company's loss of approximately $441,000 annual
designated facilities funding related to Senate Bill 740, which
IUSD did not certify for COPPA in fiscal 2019. S&P believes that
expectation coupled with the school closure at the end of the 2020
school year means that there will likely not be substantial
increases in cash balances from operations in the future.
COPPA is a transitional kindergarten through grade eight (TK-8)
school in Inglewood, Calif., eight miles southwest of downtown and
just two miles from Los Angeles International Airport. The school
first received its charter in 2010, and has operated for 10 years,
growing enrollment to 379 from 52 in grades K-8 in fall 2019.
COPPA owns its school building, and although management plans to
lease (or sell) the property, S&P believes there is uncertainty as
to whether such transactions will occur, and that net income from
leasing (or net proceeds from a sale), would generate sufficient
cash flow to pay bond debt service on a timely basis. The negative
outlook reflects S&P's anticipation that COPPA will close as a
charter school on June 12, 2020, which will eliminate the main
source of its operating revenue, and ability to service its debt
beyond the near term.
Certain terms used in this report, particularly certain adjectives
used to express S&P's view on rating relevant factors, have
specific meanings ascribed to them in the rating agency's criteria,
and should therefore be read in conjunction with such criteria.
CITIUS PHARMACEUTICALS: Signs Exclusive Option Accord with Novellus
-------------------------------------------------------------------
Citius Pharmaceuticals, Inc., has signed an exclusive six-month
option agreement to in-license a stem-cell therapy for acute
respiratory distress syndrome (ARDS) from a subsidiary of Novellus,
Inc., a preclinical-stage biotechnology company based in Cambridge,
MA.
Novellus's patented process uses its exclusive non-immunogenic
synthetic messenger ribonucleic acid (mRNA) molecules to create
induced pluripotent stem cells (iPSCs) that, in turn, generate
mesenchymal stem cells (MSCs) with superior immunomodulatory
properties. MSCs have been shown to be safe in over 900 clinical
trials and to be safe and effective in treating a number of
inflammatory diseases, including ARDS.
"ARDS is the most common cause of respiratory failure and mortality
in COVID-19 patients. Currently, there is no proven treatment for
ARDS. Literature supports the use of counter-inflammatory MSCs for
ARDS, and papers published in China have shown that at least seven
COVID-19 patients with ARDS responded to MSC therapy. Clearly this
is an avenue that shows promise and should be pursued as a
potential treatment for ARDS. We believe Novellus is at the
forefront of creating allogeneic, iPSC-derived MSCs. These cells
have the potential to overcome the limitations of MSCs derived from
adult donors, which are telomere shortened and introduce
variability into the manufacturing process," said Citius Chief
Executive Officer Myron Holubiak.
Novellus Chief Science Officer Matt Angel, PhD, stated, "Using our
mRNA-based cell-reprogramming technology, Novellus can provide a
near-unlimited supply of MSCs for treating patients with ARDS,
including those critically ill from COVID-19. These will be
allogeneic ('off-the-shelf') cells that in vitro have demonstrated
much greater expansion potential and much higher immunomodulatory
protein expression than donor-derived MSCs. We are excited to
employ our technology to such an urgent medical crisis and believe
that our MSCs represent an ideal source of cells to be used in this
extremely important development effort."
Holubiak added, "No effective pharmacotherapy for ARDS exists, and
ARDS-related morbidity and mortality are high. MSCs have been
studied in the treatment of lung injury, and we aim to build upon
this work with Novellus's iPSC-derived MSCs to improve the
immunomodulatory response in humans. We have assembled a team of
experts who are dedicated to advancing this project to an
Investigational New Drug (IND) application as quickly as
possible."
About Citius
Headquartered in Cranford, NJ, Citius Pharmaceuticals, Inc. --
http://www.citiuspharma.com/-- is a specialty pharmaceutical
company dedicated to the development and commercialization of
critical care products targeting unmet needs with a focus on
anti-infectives, cancer care and unique prescription products.
Citius reported a net loss of $15.56 million for the year ended
Sept. 30, 2019, a net loss of $12.54 million for the year ended
Sept. 30, 2018, and a net loss of $10.38 million for the year ended
Sept. 30, 2017. As of Dec. 31, 2019, the Company had $24.98
million in total assets, $4.61 million in total liabilities, and
$20.37 million in total stockholders' equity.
Wolf & Company, P.C., in Boston, Massachusetts, the Company's
auditor since 2014, issued a "going concern" qualification in its
report dated Dec. 16, 2019, citing that the Company has suffered
recurring losses and negative cash flows from operations and has a
significant accumulated deficit. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
COASTAL HOME: Westcoast Objects to Plan, Wants Trustee
------------------------------------------------------
Creditor Westcoast Therapy Specialists, LLC, objects to the
disclosure Statement and Plan, and moves the Court to appoint a
Trustee or Examiner and sustain its objection to the Plan and
Disclosure Statement.
Westcoast points out that the subject Debtor is controlled and run
by Michael Moses. Mr. Moses chose not to pay Westcoast for the
Westcoast therapists despite receiving Medicare monies paid Coastal
for the work that the therapists performed for Medicare patients.
Westcoast further points out that Mr. Moses was clearly using other
affiliate companies he controlled, related to him to transfer funds
and those have not been set forth in the disclosure statement.
Westcoast asserts that Mr. Moses has evaded full disclosure of the
affiliate companies and the monies he has received and where those
monies went or were disbursed.
Westcoast complains that Coastal received Medicare monies but Moses
determined where those monies went and how they were spent.
According to Westcoast, Medicare funds are paid to Coastal (and
directly by Michael Moses) so that the therapists are paid because
they performed the service. Here, Michael Moses has taken all
possible steps to prevent the payment of the therapists who
performed the Medicare services.
Westcoast points out that the Debtor through Michael Moses claimed
that Westcoast actually owed Coastal over $200,000 and fought the
obvious and clear responsibility for payment to Westcoast for the
therapists that had performed the Medicare services.
Counsel for West Coast Specialists:
Jawdet I. Rubaii
1358 South Missouri Avenue
Clearwater, FL 33756
Tel: (727) 442-3800
Fax: (727) 442-0504
E-mail: rubaiilaw@gmail.com
About Coastal Home Care
Coastal Home Care, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Fla. Case No. 19-07259) on July 31, 2019, disclosing
under $1 million in both assets and liabilities. The Debtor is
represented by Jake C. Blanchard, Esq., at Blanchard Law, P.A.
COMSTOCK RESOURCES: Fitch Affirms B IDR & Alters Outlook to Neg.
----------------------------------------------------------------
Fitch Ratings has affirmed the Issuer Default Rating (IDR) of
Comstock Resources, Inc. at 'B'. Fitch also affirmed Comstock's
secured revolver at 'BB'/'RR1' and the senior unsecured notes at
'B+'/'RR3'. The Outlook was revised to Negative from Stable.
CRK's rating reflects the company's position as the largest
producer of natural gas in the Haynesville shale basin, industry
low operating and drilling cost structure, ability to generate
positive FCF under Strip pricing assumptions, low differentials due
to its proximity to the Henry Hub, deep drilling inventory, and
significant equity commitment from its largest shareholder, Jerry
Jones. This is offset from limited liquidity, as CRK has drawn
approximately 83% of its revolver. Although Fitch does not expect
the need to draw further, liquidity could be an issue if prices
remain at historically low levels for some time. In addition,
hedging is adequate for 2020 but limited beyond. Fitch also
believes that Comstock will be a consolidator of the Haynesville
basin, although past transactions were structured with significant
equity contributions and were not leveraging events.
The Negative Outlook reflects current levels of natural gas prices
and Fitch's expectation through its price deck that prices may take
longer to recover. In addition, with the capital markets
effectively closed for 'B' energy issuers, Fitch would look to
progress in creating total liquidity of approximately $500 million
as well as no material reductions in the borrowing base.
KEY RATING DRIVERS
Low Cost Operator: Comstock has one of the lowest operating cost
structures among its natural gas peers due to its low lease
operating costs and gathering and transportation costs. Fitch
believes the company's scale in the Haynesville will allow CRK to
further reduce gathering and transportation costs as current
contracts lapse. In addition, margins are similar to some of the
best Permian oil-based operators, as CRK's proximity to Henry Hub
allows the company to achieve minimal differentials and premium
pricing for its natural gas. Drilling costs have also declined over
time as the company has achieved scale through acquisitions. Fitch
anticipates further drilling cost reductions in the current low
commodity price environment.
Minimal Liquidity: Comstock has drawn $1.25 billion on its $1.5
billion secured revolver as of Dec. 31, 2019. This provides limited
liquidity in the event of a prolonged downturn in commodity prices.
This is partially offset by the company's ability to generate FCF
at existing low Strip and Fitch base case pricing. Fitch
anticipates FCF will be used to reduce the revolver in the near
term. Management's goal is to increase liquidity to $500 million
through by applying FCF to the revolver.
Largest Haynesville Producer: Following the acquisition of Covey in
2019, Comstock is now the largest producer in the Haynesville shale
basin. The scale provides for significantly lower operating,
gathering and transportation, and drilling costs. The Haynesville
is located close to the Henry Hub and other major natural gas
buyers, which provides for lower differentials and higher realized
gas prices. Comstock has approximately 1,209 net drilling location
in the Haynesville (as well as an additional 774 net locations in
the mid-Bossier shale) with 71% of the locations with laterals
greater than 5,000 feet.
FCF During Low Prices: Fitch believes Comstock can generate FCF in
its Base and Strip case scenarios, which reflect historically low
commodity prices, given its low operating and drilling cost
structure. The company plans to operate five rigs in 2020, down
from nine upon closing the Covey Park acquisition, with capex
expected in the $400 million-$450 million range leading to low
single-digit growth. Fitch believes this number is conservative
given that oilfield service costs are rapidly declining as those
providers are scrambling for business. In addition, Comstock could
elect to move to a four-rig program and save approximately $70
million-$80 million annually or elect to defer completions until
pricing improves. Under those assumptions, Fitch believes that
production would be flattish to slightly lower, but offset by
higher FCF.
Solid Hedging Program: Comstock aims to hedge approximately 50%-60%
of its forward 12-month gas production, and is within this range
for 2020. The company has also hedged approximately 63% of its
forward 12-month oil production.
Preferred No Equity Credit: Fitch does not apply its Corporate
Hybrids Treatment and Notching Criteria as the new preferred stock
will be held by existing equity investors, or affiliates. Instead,
Fitch utilizes its Corporate Rating Criteria on applying equity
credit for shareholder and affiliated loans. The preferred stock
contains a provision for a mandatory cash redemption upon a change
of control. As a result, Fitch is not allowing equity credit for
the preferred stock. Given the stock is held by existing equity
investors and the lack of capital market access, Fitch does not
expect the preferred to be refinanced.
DERIVATION SUMMARY
Comstock's 2019 production was 141 mboe/d but exited the year at
226 mboe/d following the Covey acquisition. This is in line with
CNX Resources (BB/Stable - 246 mboe/d), but well below other larger
natural gas producers such as Southwestern (SWN; BB/Negative) at
356 mboe/d, Antero Resources (B/RWN - 537 mboe/d) and EQT
(BB/Negative - 689 mboe/d). CRK's net back is the highest of the
peer group due to its low cost structure and high realized price.
CRK's netback at $7.7 compares with CNX at $7.6, EQT at $6.0, SWN
at $3.7 and Antero at $3.1. CRK's leverage is higher than its peers
with debt/flowing at $19,317 compared with CNX at 8,349, EQT at
$7,717 and SWN at $5,958. However, this does not fully reflect the
impact of the Covey acquisition. CRK debt maturity schedule is more
spread out than the peer group with no maturities until 2024, which
alleviates any near-term refinancing risk given current challenging
capital markets for energy producers.
KEY ASSUMPTIONS
-- Base case West Texas Intermediate (WTI) oil prices of $38
in 2020, $45 in 2021, $50 in 2022 and long-term price of $52;
-- Base case Henry Hub natural gas price of $1.85 in 2020, $2.10
in 2021, $2.25 in 2022 and long-term of $2.50;
-- Production growth of 60% in 2020 following Covey acquisition
and 2% throughout the forecast period;
-- Five-rig program resulting in capex of $425 million in 2020.
Maintain five rig program in 2021 with capex of $450 million
and increasing to six-rig program and $500 million of capex
in the long-term;
-- Cash operating costs of $0.61/mcf equivalent in 2020 and
declining moderately over forecast period from increased
scale and expected gathering and transportation cost
improvements;
-- No incremental acquisitions, divestitures or equity issuance.
Any FCF is assumed to be used to reduce debt. Fitch expects
the company to be a consolidator but is not projecting any
acquisitions given current industry and capital markets
environment.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that Comstock Resources would be
reorganized as a going-concern in bankruptcy rather than
liquidated.
Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
Comstock's GC EBITDA assumptions reflects Fitch's projections under
a stressed case price deck, which assumes Henry Hub natural gas
prices of USD1.65 in 2020, USD1.65 in 2021, USD2.00 in 2022 and
USD2.25 in 2023:
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation (EV). The GC EBITDA assumption uses 2023
EBITDA, which reflects the decline from current pricing levels to
stressed levels and then a partial recovery coming out of a
troughed pricing environment.
The model was adjusted for reduced production and varying
differentials given the material decline in the prices from the
previous price deck.
An EV multiple of 3.75x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value. The choice of the
multiple considered the following factors:
-- The historical case study exit multiples for peer companies
ranged from 2.8x-7.0x, with an average of 5.6x and median of 6.1x;
-- Comstock's $2.2 billion acquisition of Covey had an
approximate EBITDA multiple of 4.0x. Given that Comstock is the
only consolidator in the basin, Fitch believes higher multiples are
unlikely;
-- No value is assigned for the Bakken assets as there are no
plans for further drilling and the wells are being run down.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
Fitch considers valuations such as SEC PV-10 and M&A transactions
for each basin including multiples for production per flowing
barrel, proved reserves valuation, value per acre and value per
drilling location.
The senior secured revolver is expected to be fully drawn given the
current draw. The revolver is senior to the senior unsecured bonds
in the waterfall.
The allocation of value in the liability waterfall results in
recovery corresponding to 'RR1' recover for the senior secured
revolver ($1.5 billion) and a recovery corresponding to 'RR3' for
the senior unsecured notes ($1.475 billion).
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
- Executable plan to enhance liquidity greater than $500 million
through application of FCF, asset sales or equity to reduce
the revolver;
- Demonstrated execution of generating positive FCF;
- FFO increasing above $850 million;
- Mid-cycle Gross Debt/EBITDA below 3.0x.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
- A change in terms of financial policy that is debt holder
unfriendly;
- Inability to enhance liquidity over next 12-18 months;
- Material reduction in the borrowing base that further limits
liquidity;
- Inefficiencies in execution of acquisition that causes gross
debt/EBITDA above 4.0x.
BEST/WORST CASE RATING SCENARIO
Ratings of Non-Financial Corporate issuers have a best-case rating
upgrade scenario (defined as the 99th percentile of rating
transitions, measured in a positive direction) of three notches
over a three-year rating horizon; and a worst-case rating downgrade
scenario (defined as the 99th percentile of rating transitions,
measured in a negative direction) of four notches over three years.
The complete span of best- and worst-case scenario credit ratings
for all rating categories ranges from 'AAA' to 'D'. Best- and
worst-case scenario credit ratings are based on historical
performance.
LIQUIDITY AND DEBT STRUCTURE
Limited Liquidity but Runway: Comstock had $19 million of cash on
hand and availability under its $1.5 billion revolver of $250
million as of Dec. 31, 2019. Although the revolver is substantially
drawn down, Fitch believes the company can generate FCF to reduce
the revolver under current base and Strip case assumptions, with
proceeds being used to reduce liquidity. Comstock's next maturity
is the revolver in 2024, followed by two senior note maturities in
2025 ($625 million) and 2026 ($850 million). The revolver has two
financial covenants: a leverage ratio of less than 4.0:1.0 and a
current ratio of at least 1.0:1.0. The company was in compliance
with both as of Dec. 31, 2019.
Although Comstock has been acquisitive, the financing structure of
the acquisitions has been conservative with strong equity
components to lighten the debt load. Fitch's expectation is that
Comstock will continue to be a consolidator of the Haynesville
basin, but will limit the leverage component given the lack of
access to debt capital markets and material draw on the revolver.
CONNECT INSURANCE: Case Trustee Seeks Chapter 7 Conversion
----------------------------------------------------------
Drew M. Dillworth, the Chapter 11 Trustee of Connect Insurance
Insurance Group Inc., is asking Judge Erik P. Kimball of the United
States Bankruptcy Court for the Southern District of Florida to
convert the Debtor's Chapter 11 case to a liquidation under Chapter
7 of the Bankruptcy Code.
Judge Kimball recently approved the appointment of Mr. Dillworth as
Chapter 11 Trustee.
Mr. Dillworth's preliminary investigation reflects that the Debtor
was formed in December 2010 and had a leasehold interest in certain
commercial property related to EB-5 fraud. The Debtor appears to
have been affiliated with a variety of other persons or entities
that are accused of perpetrating an EB-5 fraud on foreign
investors. Florida corporate records reflect that the Debtor was
administratively dissolved on September 28, 2018, for failure to
file its annual report. From the limited information presently
available to Mr. Dillworth, it appears that the Debtor has no open
bank accounts, business operations, or physical assets to
administer.
A hearing on the Chapter 11 Trustee's request is set for April 9.
About Connect Insurance
South Atlantic Regional Center, LLC, is a Florida corporation owned
and managed by Joseph Wash, Sr. SARC is a United States Citizen
and Immigration Services designated Regional Center.
South Atlantic Regional Center and its affiliates United States
Regional Economic Development Authority, LLC, United States
Regional Economic Development Authority, Inc., and Connect
Insurance Group, Inc., were subject to involuntary Chapter 11
petitions (Bankr. S.D. Fla. Case No. 19-25762, 19-25767, 19-25780,
and 19-25799) filed by 160 Royal Palm, LLC in November
2019. The
cases are not jointly administered.
The Petitioning Creditor is represented by Philip J. Landau, Esq.,
and Eric Pendergraft, Esq., at Shraiberg, Landau & Page, P.A.
Drew M. Dillworth, the duly appointing Chapter 11 Trustee of the
bankruptcy estate of Connect Insurance Group, has tapped Eric J.
Silver, Esq. and the Law Firm of Stearns Weaver Miller Weissler
Alhadeff & Sitterson, P.A. as counsel.
CORSAIR GROUP: S&P Alters Outlook to Negative, Affirms 'B' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Corsair Group (Cayman) LP
to negative from stable, saying a weak macroeconomic environment
could hurt its revenue growth given its significant exposure to
discretionary consumer spending and lack of recurring revenue.
S&P affirmed its 'B' issuer credit rating on Corsair Group (Cayman)
LP. At the same time, S&P affirmed its 'B' and 'CCC+' ratings,
respectively, on the company's senior secured first-lien term loan
and senior secured second-lien term loan. The respective '3' and
'6' recovery ratings are unchanged, indicating S&P's expectation of
50%-70% (rounded estimate: 55%) recovery on the first-lien and
0%-10% (rounded estimate: 0%) recovery on the second-lien term
loans.
"The negative outlook reflects a deteriorating macroeconomic
environment that we expect to hurt Corsair's operating performance,
such that leverage is expected to remain elevated over 6.5x while
profitability and projected cash flow could weaken further. The
depth and longevity of the anticipated U.S. and European recessions
are significant downside risks to our forecast, and there is
uncertainty regarding near-term consumer discretionary spending.
Moreover, Corsair faces additional risk to top-line growth given
that 2020 is a console transition year, and gaming memory could see
heightened volatility in the current environment. We do note that
the company could see some benefit from increased sales of products
that enable video streaming, as increased remote working could
drive higher demand in the near term," S&P said.
"Our negative outlook on Corsair is based on our expectation that
Corsair will experience a low-single-digit percent organic revenue
decline over the next year. We believe the balance of risks remain
firmly tilted to the downside with respect to the uncertainties
surrounding the U.S. consumer and COVID-19. Both of these factors
could potentially have outsized impacts on Corsair's gaming
system/peripherals revenues," the rating agency said.
S&P's outlook is also supported by its expectation that leverage
will rise to the low-7x area by the end of 2020 and compress to the
mid-6x area in 2021. Its base-case scenario assumes Corsair will
not pursue additional major acquisitions over the next 12 months
and the rating agency expects Corsair to be modestly free cash flow
negative for 2020.
"We could lower the rating over the next year if the company
sustains adjusted debt to EBITDA above 7x or experiences a
significant deterioration in free cash flow. Such a scenario could
occur if the company loses key distribution partners, there is a
sharp decline in discretionary spending, or there is a general
downturn in the PC gaming hardware market," S&P said.
"We could revise the outlook to stable if adjusted debt to EBITDA
is sustained at below 5.5x and we believe management intends to
maintain leverage at or below this level through acquisitions and
business cycles. In addition, we could also stabilize the outlook
if free cash flow improves significantly into positive territory or
if the economy improves significantly," the rating agency said.
COSTA HOLLYWOOD: Hires Cushman & Wakefield as Broker
----------------------------------------------------
Costa Hollywood Property Owner, LLC, seeks authority from the US
Bankruptcy Court for the Southern District of Florida to employ
Cushman & Wakefield U.S., Inc. as its real estate broker and
listing agent nunc pro tunc to Feb. 24, 2020, relative for the
proposed sale of the real property located at 327 & 319 Pierce
Street and 330 & 348 Indiana Street, Hollywood, Florida 33019.
The Broker will be entitled to receive a 2 percent commission
payable by the successful bidder if the successful bidder is a
third party other than the proposed stalking horse bidder, 777 N
Ocean Drive LLC or its assignee or replacement stalking horse
bidder.
The broker does not hold or represent any interest adverse to the
Debtor or the estate with respect to the matters for which we are
to be employed and is a disinterested persons within the meaning of
1 1 U.S.C. Sec. 101(14), as required by Section 327 Sec. (a).
The firm can be reached through:
Robert Given
CUSHMAN & WAKEFIELD US, INC.
201 North Franklin Street, Suite 3300
Tampa, FL 33602-5163
Tel: (813) 349-8349
About Costa Hollywood Property Owner
Costa Hollywood Property Owner, LLC --
https://www.costahollywoodresort.com/ -- is a privately held
company in the traveler accommodation industry. It owns and
operates Costa Hollywood Beach Resort, a resort hotel in Hollywood
Beach, Florida. Costa Hollywood Beach Resort offers rooms and
suites featuring an elevated design aesthetic and luxe decor.
Costa Hollywood sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-22483) on Sept.
19,2019. In the petition signed by Moses Bensusan, manager and
sole member, the Debtor was estimated to have assets ranging from
$50 million to $100 million and liabilities of the same range. The
Hon. Raymond B. Ray is the case judge. Peter D. Russin, Esq., at
Meland Russin & Budwick, P.A. serves as the Debtor's bankruptcy
counsel.
COUNTRYSIDE PROPERTY: Exclusivity Period Extended Through May 25
----------------------------------------------------------------
Judge Robert Mark of the U.S. Bankruptcy Court for the Southern
District of Florida extended the exclusivity period during which
only Countryside Property Maintenance, LLC can file a Chapter 11
plan through May 25, and the period to solicit acceptances for the
plan through July 24.
About Countryside Property Maintenance
Countryside Property Maintenance, LLC is a commercial property
maintenance company in Florida. It provides parking lot sweeping,
pressure cleaning and porter services.
Countryside Property Maintenance filed a Chapter 11 petition
(Bankr. S.D. Fla. Case No. 19-15633) on April 29, 2019. In the
petition signed by Larry Healy, manager, the Debtor estimated $1
million to $10 million in both assets and liabilities.
The Hon. Robert A. Mark oversees the case. Bradley S. Shraiberg,
Esq., at Shraiberg Landau & Page, P.A., is the Debtor's bankruptcy
counsel.
No committee of unsecured creditors has been appointed in the
Debtor's case.
CPM HOLDINGS: Moody's Lowers CFR to Caa1 & Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service downgraded its ratings for CPM Holdings,
Inc., including the company's corporate family rating (CFR, to Caa1
from B3) and probability of default rating (to Caa1-PD from B3-PD),
along with the ratings for its senior secured first lien bank
credit facilities (to B3 from B2) and second lien term loan (to
Caa3 from Caa2). The ratings outlook is negative.
"The downgrades reflect our expectation that demand for CPM
equipment will fall over the course of 2020 as economic conditions
weaken further," says Shirley Singh, Moody's lead analyst for CPM.
Equipment financing is expected to contract in 2020, which will
hurt demand for CPM's machinery. Moody's believes the company's
high adjusted debt/EBITDA (leverage) in excess of 9.0x (as of
December 2019) and current liquidity provisions correlate to only
limited capacity to absorb earnings erosion, modestly increasing
the risk of default.
The rapid and widening spread of the coronavirus outbreak, the
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,
CPM's susceptibility to broad-based macroeconomic conditions and
equipment financing, and exposure to China in context of both
suppliers and customers, render the company vulnerable to shifts in
market sentiment in these unprecedented operating conditions.
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 CPM of the breadth
and severity of the shock, and the broad deterioration in credit
quality it has triggered.
The following rating actions were taken:
Downgrades:
Issuer: CPM Holdings, 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: CPM Holdings, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
CPM's Caa1 CFR broadly reflects the high financial risk stemming
from its elevated leverage in excess of 9.0x and the inherent
cyclicality of its business. CPM's new equipment business exhibits
cyclical demand patterns from its exposure to agricultural end
markets, broad-based global macroeconomic conditions and the
availability of equipment financing. These credit risks are
balanced by the company's sizeable aftermarket presence, low
capital investment needs and healthy EBITA margins in excess of
15%, as well as favorable long-term trends with a rising middle
class in developing countries increasing their consumption of meat
products that in turn supports demand for agricultural
commodities.
The negative outlook reflects the risk that demand declines in end
markets will accelerate, leading to a more pronounced downturn that
could result in higher leverage and weaker liquidity provisions,
including increased revolver reliance and negative free cash flow
generation.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if economic conditions stabilize,
earnings and free cash flow remain positive, adjusted debt/EBITDA
is sustained below 8.0x and EBITA/interest is sustained above
1.0x.
The ratings could be downgraded if the company's revenue and
earnings continue to decline, causing further weakness in liquidity
including increased cash consumption and revolver usage such that
default risk rises further.
The principal methodology used in these ratings was Manufacturing
Methodology published in March 2020.
Headquartered in Waterloo, Iowa, CPM Holdings, Inc. provides
process machinery and technology to various agricultural end
markets including oilseed, animal feed, breakfast cereal and snack
food, and biofuels. The company is owned by American Securities
LLC. CPM generated $497 million of revenue for the twelve months
ended December 31, 2019.
CRAFTWORKS PARENT: Committee Hires FTI as Financial Advisor
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of Craftworks Parent,
LLC, and its debtor-affiliates, seeks authorization from the U.S.
Bankruptcy Court for the District of Delaware to retain FTI
Consulting, Inc., as financial advisor to the Committee.
The Committee requires FTI 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 ("DIP") 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; and
g. assist with the review of the Debtors' identification of
potential cost savings, including overhead and operating
expense reductions and efficiency improvements.
FTI will be paid at these hourly rates:
Senior Managing Directors $920 to $1,295
Directors/Senior Directors/
Managing Directors $690 to $905
Consultants/Senior Consultants $370 to $660
Administrative/Paraprofessionals $150 to $280
FTI will also be reimbursed for reasonable out-of-pocket expenses
incurred.
Samuel Star, senior managing director of FTI Consulting, 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 (a)
is not creditors, equity security holders or insiders of the
Debtors; (b) has not been, within two years before the date of the
filing of the Debtors' chapter 11 petition, directors, officers or
employees of the Debtors; and (c) does not have an interest
materially adverse to the interest of the estate or of any class of
creditors or equity security holders, by reason of any direct or
indirect relationship to, connection with, or interest in, the
Debtors, or for any other reason.
FTI can be reached at:
Samuel Star
FTI CONSULTING, INC.
Three Times Square, 9th Floor
New York, NY 10036
Tel: (212) 247-1010
Fax: (212) 841-9350
About Craftworks Parent
CraftWorks Parent, LLC and its subsidiaries filed voluntary
petitions for relief under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Del. Lead Case No. 20-10475) on March 3, 2020.
CraftWorks and its affiliated entities are operators and
franchisors of steakhouses and craft beer brewery restaurants with
more than 330 locations in 39 states in the U.S. and in Taiwan as
of the bankruptcy filing date. CraftWorks employs more than 18,000
team members and corporate and support staff at its restaurants
nationwide and at offices located in Nashville, Tennessee and
Colorado. Its four largest "core" brands are (a) Logan's Roadhouse,
(b) Old Chicago Pizza & Taproom, (c) Gordon Biersch Brewery
Restaurant, and (d) Rock Bottom Restaurant and Brewery. In
addition, CraftWorks operates unique one-off "specialty"
restaurants such as Big River Grille & Brewing Works and ChopHouse
& Brewery.
CraftWorks was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing date.
CraftWorks filed Chapter 11 proceedings to implement an agreement
with its senior lender that is expected to reduce its debt by more
than 60%, strengthen liquidity, and better position its popular
brands for long-term growth. It has filed a motion requesting
approval of a "stalking horse" asset purchase agreement with its
senior lender and a competitive bidding process under Section 363
of the Bankruptcy Code.
CraftWorks and its affiliated debtors tapped Klehr Harrison Harvey
Branzburg LLP as legal counsel; Configure Partners, LLC, as
investment banker; M-III Advisory Partners, LP as financial
advisor; Hilco Real Estate, LLC as the real estate advisor; and
Kekst CNC as the communications advisor. Prime Clerk LLC is the
claims agent.
The U.S. Trustee for Region 3 on March 12, 2020, appointed a
committee to represent unsecured creditors in the Chapter 11 case
of CraftWorks Parent, LLC. The Committee hires Pachulski Stang
Ziehl & Jones LLP, as counsel. FTI Consulting, Inc., as financial
advisor.
CRAFTWORKS PARENT: Committee Hires Pachulski Stang as Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors of Craftworks Parent,
LLC, and its debtor-affiliates seeks authorization from the U.S.
Bankruptcy Court for the District of Delaware to retain Pachulski
Stang Ziehl & Jones LLP, as counsel to the Committee.
The Committee requires Pachulski Stang to:
a. assist, advise, and represent the Committee in its
consultations with the Debtors regarding the administration
of these cases;
b. assist, advise and represent the Committee with respect to
the Debtors' retention of professionals and advisors with
respect to the Debtors' business and these Cases;
c. assist, advise, and represent the Committee in analyzing
the Debtors' assets and liabilities, investigating the
extent and validity of liens and participating in and
reviewing any proposed asset sales, any asset dispositions,
financing arrangements and cash collateral stipulations or
proceedings;
d. assist, advise, and represent the Committee in any manner
relevant to reviewing and determining the Debtors' rights
and obligations under leases and other executory contracts;
e. assist, advise, and represent the Committee in
investigating the acts, conduct, assets, liabilities, and
financial condition of the Debtors, the Debtors' operations
and the desirability of the continuance of any portion
of those operations, and any other matters relevant to
these cases or to the formulation of a plan;
f. assist, advise and represent the Committee in connection
with any sale of the Debtors' assets;
g. assist, advise, and represent the Committee in its
participation in the negotiation, formulation, and drafting
of a plan of liquidation or reorganization;
h. assist, advise, and represent the Committee in
understanding its powers and its duties under the
Bankruptcy Code and the Bankruptcy Rules and in performing
other services as are in the interests of those
represented by the Committee;
i. assist, advise, and represent the Committee in the
evaluation of claims and on any litigation matters,
including avoidance actions;
j. provide such other services to the Committee as may be
necessary in these cases.
Pachulski Stang will be paid at these hourly rates:
Partners $675 to $1,495
Associates $625 to $725
Paralegals $395 to $425
Pachulski Stang will also be reimbursed for reasonable
out-of-pocket expenses incurred.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the
following is provided in response to the request for additional
information:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing
arrangements for this engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic
location of the bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and
material financial terms for the prepetition
engagement, including any adjustments during the 12
months prepetition. If your billing rates and
material financial terms have changed postpetition,
explain the difference and the reasons for the
difference.
Response: Not applicable.
Question: Has your client approved your prospective budget
and staffing plan, and, if so for what budget
period?
Response: Not applicable.
Bradford J. Sandler, a partner at Pachulski Stang Ziehl & Jones
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
(a) is not creditors, equity security holders or insiders of the
Debtors; (b) has not been, within two years before the date of the
filing of the Debtors' chapter 11 petition, directors, officers or
employees of the Debtors; and (c) does not have an interest
materially adverse to the interest of the estate or of any class of
creditors or equity security holders, by reason of any direct or
indirect relationship to, connection with, or interest in, the
Debtors, or for any other reason.
Pachulski Stang can be reached at:
Bradford J. Sandler, Esq.
Robert J. Feinstein, Esq.
Colin R. Robinson, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 North Market Street, 17th Floor
Wilmington, DE 19899 (Courier 19801)
Tel: (302) 652-4100
Fax: (302) 652-4400
E-mail: bsandler@pszjlaw.com
rfeinstein@pszjlaw.com
crobinson@pszjlaw.com
About Craftworks Parent
CraftWorks Parent, LLC and its subsidiaries filed voluntary
petitions for relief under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Del. Lead Case No. 20-10475) on March 3, 2020.
CraftWorks and its affiliated entities are operators and
franchisors of steakhouses and craft beer brewery restaurants with
more than 330 locations in 39 states in the U.S. and in Taiwan as
of the bankruptcy filing date. CraftWorks employs more than 18,000
team members and corporate and support staff at its restaurants
nationwide and at offices located in Nashville, Tennessee and
Colorado. Its four largest "core" brands are (a) Logan's Roadhouse,
(b) Old Chicago Pizza & Taproom, (c) Gordon Biersch Brewery
Restaurant, and (d) Rock Bottom Restaurant and Brewery. In
addition, CraftWorks operates unique one-off "specialty"
restaurants such as Big River Grille & Brewing Works and ChopHouse
& Brewery.
CraftWorks was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing date.
CraftWorks filed Chapter 11 proceedings to implement an agreement
with its senior lender that is expected to reduce its debt by more
than 60%, strengthen liquidity, and better position its popular
brands for long-term growth. It has filed a motion requesting
approval of a "stalking horse" asset purchase agreement with its
senior lender and a competitive bidding process under Section 363
of the Bankruptcy Code.
CraftWorks and its affiliated debtors tapped Klehr Harrison Harvey
Branzburg LLP as legal counsel; Configure Partners, LLC, as
investment banker; M-III Advisory Partners, LP as financial
advisor; Hilco Real Estate, LLC as the real estate advisor; and
Kekst CNC as the communications advisor. Prime Clerk LLC is the
claims agent.
The U.S. Trustee for Region 3 on March 12, 2020, appointed a
committee to represent unsecured creditors in the Chapter 11 case
of CraftWorks Parent, LLC. The Committee hires Pachulski Stang
Ziehl & Jones LLP, as counsel. FTI Consulting, Inc., as financial
advisor.
CREW ENERGY: S&P Lowers ICR to 'CCC+'; Outlook Negative
-------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Crew Energy
Inc. to 'CCC+' from 'B-'. S&P also lowered the issue-level rating
on the unsecured notes due 2024 to 'B-' from 'B'. The '2' recovery
rating is unchanged.
The downgrade primarily reflects meaningfully weaker prospects for
Crew's cash flow and credit measures through 2021. S&P Global
Ratings recently cut its West Texas Intermediate (WTI) price
assumptions for 2020 by 45%. 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 has dampened global demand.
Natural gas prices have also remained pressured due to the
oversupply conditions in the U.S.
"At these prices, we believe Crew will generate significantly
weaker cash flows compared with our previous expectations. Although
the company has locked in some oil and gas volume hedges through
2020, we believe they will not be sufficient to offset the drastic
decline in our pricing assumptions. We now project the company's
adjusted debt-to-EBITDA will deteriorate to about 7x and adjusted
funds from operations (FFO)-to-debt to below 10% in 2020 and 2021,"
S&P said.
The negative outlook on Crew reflects the company's significantly
high leverage due to low commodity prices and S&P's view of Crew's
capital structure as unsustainable at these prices.
"We could lower the rating if liquidity were pressured over the
next 12 months or if the company announces a transaction that we
would view as distressed. Such a scenario is possible if Crew
continues to outspend cash flow or there is a significant cut in
its borrowing base," S&P said.
"We could revise the outlook to stable if we no longer expected
Crew to outspend cash flow and its liquidity improved. This would
probably occur if hydrocarbon prices increased and access to
capital markets improved," S&P said.
DELL TECHNOLOGIES: Fitch Affirms BB+ LongTerm IDR, Outlook Negative
-------------------------------------------------------------------
Fitch Ratings has affirmed the ratings, including the 'BB+'
long-term issuer default ratings, for Dell Technologies, Inc.
(Dell) and its subsidiaries. The Rating Outlook Remains Negative.
Fitch's actions affect $57.2 billion of total debt, including the
$4.5 billion 1st-lien senior secured revolving credit facility
(RCF).
The ratings and outlook reflect Fitch's expectation that credit
protection measures are likely to remain weak for the rating
through the near-term despite Dell's stated intention to prioritize
debt reduction with FCF (up to $5.5 billion in the current fiscal
year). Fitch forecasts the coronavirus will result in mid- to
high-single digit revenue declines for fiscal 2020 exacerbating the
company's prior expectations for near-term margin headwinds and, in
conjunction with Dell's negative working capital model,
constraining cash flow. The pending sale of the company's security
software business (RSA) for $2.1 billion should net use net
proceeds (assuming the private equity buyer secures financing),
potentially shoring up available cash for debt reduction.
Nonetheless, Dell's core leverage (core debt to core EBITDA), which
Fitch estimated at 4.2x exiting fiscal 2020, will remain above
Fitch's 3.5x negative rating sensitivity until calendar 2021.
KEY RATING DRIVERS
Debt Reduction Priority: Fitch expects Dell will continue
prioritizing debt reduction with FCF. The company publicly targeted
repaying up to $5.5 billion in fiscal 2021, a seemingly more
achievable commitment following the Feb. 18, 2020 announcement of
the proposed divestiture of Dell's RSA Security business for $2.1
billion in cash. However, uncertainty surrounding the depth and
duration of a coronavirus-driven downturn in at least the first
half of fiscal 2021 and magnitude and speed of any subsequent
recovery reduces the probability Dell has sufficient near-term debt
reduction capacity to achieve its target, even if RSA closes. In
Fitch's rating case, lower than previously anticipated
profitability will delay the company's ability to return core
leverage to below 3.5x until calendar 2021.
Strong VMware Performance: Fitch expects VMware to continue strong
operating performance driven by robust adoption of the company's
full infrastructure stack solutions and growing mix of recurring
revenue and cash flow from subscription and SaaS and service and
support, which increased to two-thirds of total revenue in fiscal
2020. Beyond coronavirus-driven lower organic growth Fitch assumes
in fiscal 2021, VMware should grow by mid- to high-single digits
overall and generate more than $2.5 billion of average annual FCF
by leveraging the company's large and diversified installed base.
Fitch credits Dell with 100% of VMware's operating results and
financial structure, which continues to benefit Dell's credit
protection measures.
Secular ISG Headwinds: Fitch believes secular IT hardware spending
headwinds will constrain revenue growth for Dell's ISG segment. The
digestion of robust IT hardware spending in fiscal 2018, largely
stoked by U.S. tax reform, led to mid-teen revenue declines for
Dell's server and networking businesses in fiscal 2020.
Nonetheless, Fitch believes that white boxing within the context of
marginal workload migration to the cloud and, therefore, cloud
service providers' (CSP) consolidation of IT hardware spending will
constrain top line growth for hardware original equipment
manufacturers (OEM), including Dell. The potential for CSPs
competing with hardware OEMs by reselling white boxed products
would exacerbate this headwind, although Fitch recognizes CSPs
primarily focus white boxing on lower-mix configurations.
CSG Outperformance: Fitch's anticipation for the continuation of
personal computers (PC) market share gains by the top three PC
makers, including Dell, higher mix sales and increasing peripherals
and financing attach rates should drive CSG outperformance. Prior
to the coronavirus pandemic, Dell anticipated the multi-year
Windows 10 refresh cycle will taper shipment volume in the current
fiscal year with the normalization of commodity input prices
adversely impacting operating profitability after record CSG profit
margins last fiscal year. While Fitch believes cash flow from CSG
underpins the Dell's debt reduction capacity and will remain solid
over the long-term, lower volume shipments and segment profit
margin in conjunction with Dell's negative working capital model
could constrain FCF for fiscal 2021.
Strengthening Long-Term Profitability: Dell's profit margins should
strengthen over time with a richer sales mix and increasing attach
rates in CSG and faster growth at more profitable VMware offsetting
secular pricing pressures in the infrastructure segment. Fitch
expects near-term profit margin degradation from lower volume
shipments and normalizing commodity prices after printing record
Fitch estimated of 11.8% core EBITDA in fiscal 2020 but that core
EBITDA margins will remain above 11%, below the company's plan (in
connection with the Sept. 7, 2016 acquisition of EMC Corp.) but
still up more than 100 basis points since closing the deal.
DERIVATION SUMMARY
Dell's 'BB+' rating reflects the company's significant installed
based and strong share positions that have, among other things,
resulted in strong cross-selling opportunities across Dell, VMware
and Dell Financial Services. The continuation of CSG market share
gains should largely mitigate secular headwinds for IT hardware
OEMs more broadly, while strong cash flow from PCs and a richer
sales mix from faster growing VMware drive FCF growth. These
factors position Dell's business profile favorably versus higher
rated IT hardware providers such as Hewlett Packard Enterprise
Company (rated 'BBB+' with a Stable Rating Outlook by Fitch).
However, Dell's financial structure remains weak for the current
rating as the company continues an extended path of deleveraging
after the aggressively financed EMC acquisition. Deleveraging has
been delayed in part by initial underperformance by the legacy EMC
portfolio and a debt funded sweetener of Dell's consolidation of
the then existing VMware tracking stock in December 2018, resulting
in Fitch's revision of the Rating Outlook from Stable to Negative.
Fitch also assesses the linkage between Dell and 80.9% owned VMware
as moderate under Fitch's parent-subsidiary linkage criteria and,
therefore, equalizes the companies' long-term issuer default
ratings. VMware is an unrestricted subsidiary in Dell's credit
agreements and indentures and provide for no upstream guarantees,
cross-default provisions or management or treasury team overlap.
While VMware has an independent related party transaction committee
in place, Fitch believes the special dividend in fiscal 2019 to
consolidate the VMware tracking stock VMware supports Fitch's
assessment of moderate linkage and contingent liquidity for Dell.
KEY ASSUMPTIONS
-- Fitch expects revenue down by the mid- to high-single digits
in fiscal 2021, driven by depressed demand related to the
coronavirus meaningfully more than offsetting a temporary surge in
infrastructure spending (laptops, servers and networking).
-- Fitch's rating case incorporates a partial recovery in Dell's
second half of the current fiscal year ended January 31, 2021 and
low growth through full recovery exiting fiscal 2022, driven in
part by the very near-term pull-forward of demand.
-- Weak (slightly up to slightly down) top line growth through
the remainder of the forecast period with robust VMware growth
offsetting secular headwinds for servers and storage from white
boxing and disintermediation, respectively, while PC share gains
largely offset the end of the Win10 upgrade cycle.
-- Near-term profitability modestly contracts from a higher mix
of VMware and infrastructure revenue mostly offsetting headwinds
from lower volume and the normalization of commodity input prices.
-- Dell uses all of its FCF, as well as net proceeds from the RSA
transaction, for debt reduction rather than executing on the Board
of Director's February 20, 2020 $1 billion Class C common stock
repurchase authorization.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Fitch could stabilize the ratings if it expects core debt to
core EBITDA sustained at or below 3.5x in the near-term or take
incremental positive rating action if Fitch expects core debt to
core EBITDA sustained below 3x and core debt to adjusted FCF
(adjusted for the change in financing receivables) below 5x in the
near term.
-- Positive organic revenue growth from profitable market share
gains, despite Fitch's expectation for secular demand challenges,
including structurally lower enterprise spending on IT hardware and
increased white boxing.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Pre-dividend FCF margin sustained below 2%, from lower than
anticipated revenue.
-- Expectations for core debt to core EBITDA sustained above 3.5x
and core debt to FCF (adjusted for the change in financing
receivables) approaching the high single digits from lower than
anticipated debt reduction or weaker than expected profitability.
BEST/WORST CASE RATING SCENARIO
Best/Worst Case Rating Scenarios Non-Financial Corporate:
Ratings of Non-Financial Corporate issuers have a best-case rating
upgrade scenario (defined as the 99th percentile of rating
transitions, measured in a positive direction) of three notches
over a three-year rating horizon; and a worst-case rating downgrade
scenario (defined as the 99th percentile of rating transitions,
measured in a negative direction) of four notches over three years.
The complete span of best- and worst-case scenario credit ratings
for all rating categories ranges from 'AAA' to 'D'. Best- and
worst-case scenario credit ratings are based on historical
performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch expects Dell's liquidity will remain
adequate and, as of January 31, 2020, consisted of: i) $6.4 billion
of cash and cash equivalents ($9.3 billion of total cash and cash
equivalents less $2.9 billion held by VMware) and ii) an undrawn
$4.5 billion 1st-lien senior secured RCF expiring 2021 (under which
the company drew down $3 billion in March 2020, leaving $1.5
billion of availability under the facility). Fitch's expectation
for roughly $2.5 billion of annual FCF (excluding VMware) also
supports liquidity, as does contingent liquidity at VMware.
Dell faces manageable maturities this calendar year, which aside
from mandatory term loan amortization includes: i) $600 million of
2.65% legacy senior notes due June 1, 2020, ii) $1.25 billion of
2.3% VMware senior notes due August 2020, and iii) $1.5 billion of
VMware 364-day term loan. Debt maturities in 2021 step-up and,
aside from mandatory amortization, include: i) $400 million of
4.625% legacy senior unsecured notes due April 2021, ii) $4.5
billion of 4.42% 1st-lien secured notes due June 2021, and iii)
$1.1 billion of 5.875% senior unsecured notes due June 2021.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch applies a maximum allowable debt to equity ratio of 3:1 to
Dell's financing receivables to allocate a portion of total debt to
DFS, which Fitch excludes from measuring core debt. Similarly,
Fitch excludes DFS profitability from total EBITDA to calculate
core EBITDA, as well as the change in financing receivables from
FFO in calculating adjusted FCF.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Dell Technologies Inc.: 4.2; Governance Structure: 4
DELL TECHNOLOGIES: S&P Alters Outlook to Neg., Affirms 'BB+' ICR
----------------------------------------------------------------
S&P Global Ratings revised its rating outlook to negative from
stable and affirmed all ratings, including its 'BB+' issuer credit
rating, on Round Rock, Texas-based Dell Technologies Inc., a
leading provider of information technology (IT) solutions.
S&P also revised its rating outlook to negative from stable and
affirmed all ratings, including its 'BBB-' issuer credit rating, on
VMware Inc., a U.S. infrastructure software company and
majority-owned subsidiary of Dell.
"The macroeconomic downturn will pressure enterprise IT spending in
fiscal 2021.S&P Global Ratings' economists now believe a recession
in the U.S. and Europe is likely, stemming from the coronavirus
pandemic, and we expect this to meaningfully affect enterprise and
consumer IT spending. Although the severity and longevity of the
pandemic is uncertain, there is an increasing risk that weakening
global demand will significantly pressure Dell's revenues and
profitability. While we believe Dell's first-quarter results are
likely to meet or beat investor expectations because of a near-term
demand boost for computers and peripherals as employees work
remotely, we expect substantial top-line pressure in subsequent
quarters as enterprises aggressively cut spending in the
recessionary environment," S&P said.
The negative outlook reflects S&P's view that deteriorating
macroeconomic conditions will lead to lower enterprise IT spending.
S&P expects Dell's revenues to decline near mid-single-digit
percents and EBITDA margin to contract to near 10%, such that
leverage will rise to the high-3x area over coming quarters.
"We could lower our rating if Dell's performance deteriorates
beyond our base case, likely as a result of a prolonged
macroeconomic downturn, with the combination of revenue declines
and lower profitability raising leverage to 4x on a sustained
basis. We could also lower our ratings if the company pursues any
shareholder-friendly activities or debt-financed acquisitions that
also lead to sustained leverage above 4x," S&P said.
"We could revise our outlook to stable if Dell maintains leverage
below 4x over the next 12 months with prospects for further
improvement in fiscal 2022. This may be achieved if the economic
downturn lasts shorter than we expect, with recovery beginning in
second half of fiscal 2021. We could also do so if Dell outperforms
the overall IT industry through share gains and improved
operational efficiencies, generating higher FOCF to support debt
reduction," the rating agency said.
S&P's negative outlook on VMware mirrors its negative outlook on
Dell given the companies' close ties. It expects VMware to generate
solid revenue growth and cash flow generation, albeit lower than
its previous expectations, through the economic downturn while
maintaining commitment to an investment-grade credit profile.
"We could lower our ratings on VMware if we lower our rating on
Dell. We could also lower the rating if VMware shifts its financial
policy and no longer commits to maintaining an investment-grade
credit profile. This could result if the company engages in
material share repurchases or large-scale acquisitions such that
leverage exceeds 3x (versus 1.3x as of Jan. 31, 2020).
Additionally, we could lower the rating if we no longer view VMware
as an insulated subsidiary of Dell, its credit profile weakened
with the relationship no longer at arm's length," S&P said.
"We could revise our outlook on VMware to stable if we do the same
to our outlook on Dell," S&P said.
DENBURY RESOURCES: Provides Operational and Financial Update
------------------------------------------------------------
Denbury Resources Inc. provided an update on the Company's response
to recent developments, including the COVID-19 pandemic,
macroeconomic uncertainty, and the decline in oil prices.
Chris Kendall, Denbury's president and CEO, commented, "Our unique
portfolio of high quality, low decline assets allows us to swiftly
adjust to changes in market conditions, including changes as
significant as those we have experienced over the last few weeks.
In addition to significantly reducing capital spending, we expect
to meaningfully reduce Denbury's LOE and G&A expenses, which,
combined with proceeds from our previously announced working
interests sale that closed in early March, allow us to target cash
flow neutrality for the year if NYMEX oil prices average $35 per
barrel for 2020. Additionally, the value of our hedge portfolio
has enabled us to restructure a significant portion of the
Company's 2020 hedge contracts to provide for more price certainty
and protection against further oil price declines. We remain
highly focused on controlling what we can control in this
challenging and uncertain environment and continue to firmly
believe that the industry-leading, low carbon footprint provided by
Denbury's CO2 EOR-based business is an important, value-enhancing
oil production technology."
OPERATIONAL UPDATE
The Company has reduced its previously planned 2020 capital budget
by approximately $80 million, or 44%. As a result, Denbury's
revised 2020 capital budget, excluding acquisitions and capitalized
interest, is now $95 million to $105 million. The Denbury Board of
Directors has also determined to defer the Company's Cedar Creek
Anticline CO2 tertiary flood development project beyond 2020.
These steps are being taken to reduce cash expenditures and
preserve liquidity in light of the more than 50% decline in NYMEX
WTI oil prices over the last few weeks and continuing uncertainty
about the economic impact of the COVID-19 pandemic.
Based upon current projections, the Company expects that its
estimated full-year 2020 oil and gas production will be reduced by
approximately 3,000 barrels of oil equivalent per day ("BOE/d")
from the 54,500 BOE/d midpoint of its initial 2020 production
estimates. Approximately half of this expected production impact
is due to the reduction in capital spending, and the other half is
based on anticipated operating cost reduction measures that are
expected to also impact production, such as shutting down
compressors or delaying well repairs and workovers that are
uneconomic. Production could be further curtailed by future
regulatory actions or limitations in storage and/or takeaway
capacity. Considering the highly volatile and unpredictable market
conditions, the Company does not currently expect to provide
full-year 2020 guidance other than as to its revised capital
expenditure budget and is withdrawing all of its previously
outstanding 2020 guidance.
2020 HEDGING UPDATE
To increase downside protection against current and potential
further declines in oil prices, the Company has restructured
approximately 40% of its three-way collars covering 12,500 barrels
per day ("Bbls/d") into fixed-price swaps for the second through
fourth quarters of 2020. The value embedded in Denbury's three-way
collar portfolio allows the Company to convert those contracts into
swaps with prices above current market values. The Company
currently has hedges covering 39,500 Bbls/d for the second quarter
of 2020 and 35,500 Bbls/d for the third and fourth quarters of
2020, with approximately half of those contracts being fixed-price
swaps and the remainder being three-way collars.
REVERSE STOCK SPLIT PROPOSAL
Denbury's Board of Directors has approved a proposal, to be
included in the Company's Annual Proxy Statement and submitted to
its stockholders for approval at Denbury's 2020 Annual Meeting of
Stockholders, to effect a reverse stock split of the Company's
common stock and reduce its authorized common stock. The reverse
stock split proposal includes a selection of proposed reverse stock
split ratios designed to enable the Company to regain compliance
with the New York Stock Exchange's listing requirements. The final
ratio must be determined by Denbury's Board of Directors following
stockholder approval. The reverse stock split is intended to
increase the market price of each common share so that a
stockholder would have fewer but higher priced shares. A reverse
stock split would not have any impact on the voting or other rights
of stockholders and would have no impact on the Company's business
operations.
About Denbury
Headquartered in Plano, Texas, Denbury Resources Inc. --
http://www.denbury.com/-- is an independent oil and natural gas
company with operations focused in two key operating areas: the
Gulf Coast and Rocky Mountain regions. The Company's goal is to
increase the value of its properties through a combination of
exploitation, drilling and proven engineering extraction practices,
with the most significant emphasis relating to CO2 enhanced oil
recovery operations.
As of Dec. 31, 2019, Denbury had $4.69 billion in total assets,
$364.24 million in total current liabilities, $2.91 billion in
total long-term liabilities, and $1.41 billion in total
stockholders' equity.
Denbury received on March 5, 2020 formal notice from the New York
Stock Exchange that the average closing price of the Company's
shares of common stock had fallen below $1.00 per share over a
period of 30 consecutive trading days, which is the minimum average
share price for continued listing on the NYSE. The NYSE
notification does not affect Denbury's ongoing business operations
or its U.S. Securities and Exchange Commission reporting
requirements, nor does it trigger any violation of its debt
obligations. Denbury is considering all available options to
regain compliance with the NYSE's continued listing standards,
which may include a reverse stock split, subject to approval of the
Company's board of directors and stockholders.
* * *
As reported by the TCR on March 15, 2020, Moody's Investors Service
downgraded Denbury Resources Inc.'s Corporate Family Rating to Caa2
from B3. The downgrade of Denbury's CFR to Caa2 reflects Moody's
expectation that its revenues will decline in 2021 and the
uncertainty over the company's ability to refinance its debt
maturing in 2021.
DEW TRUCKEN: Hires Sellers & Mitchell as Attorney
-------------------------------------------------
Dew Trucken, LLC, seeks authority from the U.S. Bankruptcy Court
for the Middle District of Georgia to employ Sellers & Mitchell,
P.C., as attorney to the Debtor.
Dew Trucken requires Sellers & Mitchell to:
a) give the Debtor legal advice with respect to its power and
duties as Debtor in Possession in the continued operation
of its business and management of its property;
b) prepare on behalf of the Debtor, the necessary Complaints,
Answers, Orders, Reports and other legal papers;
c) take necessary action to stop garnishments and avoid liens
against the Debtor's property obtained by the attachment of
any creditors within 90 days before the filing of the said
Petition;
d) represent the Debtor in Possession in connection with
reclamation proceedings which have been instituted in this
Court by any Creditors;
e) perform all other legal services for the Debtor as the
Debtor in Possession which may be necessary herein;
primarily as part of the initial filing of the case;
f) provide necessary for Debtor in Possession to employ as
attorney for such Professional services.
Sellers & Mitchell will be paid at these hourly rates:
Shelba D. Sellers $200
Mark E. Mitchell $200
Imarald Manning $50
Jessica Browning $50
Suzanne Williams $50
Alex Kimbler $50
Barbara Garcia $50
Sellers & Mitchell will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Shelba D. Sellers, partner of Sellers & Mitchell, 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.
Sellers & Mitchell can be reached at:
Shelba D. Sellers, Esq.
SELLERS & MITCHELL, P.C.
P.O. BOX 1157
Thomasville, GA 31799
Tel: (229) 226-9888
Fax: (888) 319-7471
E-mail: shelba_sellers@yahoo.com
About Dew Trucken, LLC
Dew Trucken, LLC, filed a Chapter 11 bankruptcy petition (Bankr.
M.D. Ga. Case No. 20-10341) on March 24, 2020, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by Shelba D. Sellers, Esq., at Sellers & Mitchell, P.C.
EASTERN PACIFIC: Hires Rosenburg Musso as Attorney
--------------------------------------------------
Eastern Pacific Corp. seeks authority from the US Bankruptcy Court
for the Eastern District of New York to employ Rosenburg, Musso &
Weiner as its attorneys.
Services the Debtor will render are:
a. give the Debtor legal advice with respect to its powers
and duties as debtor-in-possession in the continued operation of
its business and management of its property;
b. prepare on behalf of applicant as debtor-in-possession
necessary petitions, pleadings, orders, reports and other legal
papres;
c. perform all other legal services for the Debtor as
debtor-in-possession which may be necessary and appropriate in the
conduct of this case.
A retainer fee of $7,500 has been paid by Eugene Burshtein.
The attorneys represents no interest adverse to the Debtor or the
estate in matters upon which they are to be engaged, according to
court filings.
The firm can be reached through:
Bruce Weiner, Esq.
ROSENBERG MUSSO & WEINER, LLP
26 Court Street, Suite 2211
Brooklyn, NY 11242
Tel: 718-855-6840
E-mail: courts@nybankruptcy.net
About Eastern Pacific Corp
Eastern Pacific Corp is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)). It owns a real property in
Brooklyn, New York having a current value of $1.3 million.
Eastern Pacific Corp filed its voluntary petition under Chapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-41322) on March
2, 2020. The petition was signed by Eugene Burshtein, president. At
the time of filing, the Debtor estimated $1,302,000 in assets and
$1,050,000 in liabilities. Bruce Weiner, Esq. at ROSENBERG MUSSO &
WEINER, LLP, represents the Debtor as counsel.
EKSO BIONICS: Grants 54,668 Restricted Stock Units to Executives
----------------------------------------------------------------
As previously disclosed by Ekso Bionics Holdings, Inc. in its
definitive proxy statement for its special meeting of stockholders
held on March 12, 2020, on Nov. 6, 2019, the compensation committee
of the board of directors of Ekso Bionics Holdings, Inc. approved
certain grants of restricted stock units to the Company's named
executive officers, under the Company's Amended and Restated 2014
Stock Incentive Plan. The grant of the RSUs was contingent upon:
(a) approval by the Company's stockholders at the Stockholder
Meeting to increase the number of shares reserved for issuance
under the Plan to accommodate the grants of the RSUs, and (b) the
Company filing a registration statement on Form S-8 with the
Securities and Exchange Commission to register the offer and sale
of the shares underlying the RSUs.
The Stockholder Approval Condition was satisfied at the Special
Meeting held on March 12, 2020, and the Registration Statement
Condition was satisfied on April 1, 2020. Accordingly, the
following RSUs were granted effective on April 1, 2020:
NEO Number of RSUs Granted
--- ----------------------
Jack Peurach 35,334
Jack Glenn 10,667
Jason Jones 8,667
* The number of RSUs noted above are after giving effect to a
1-for-15 reverse stock split on March 24, 2020.
The RSUs vest as to one quarter (1/4th) of the total number listed
above on Nov. 15, 2020, and as to an additional one quarter (1/4th)
of the total number of RSUs listed above on November 15 of each
following year.
About Ekso Bionics
Ekso Bionics -- http://www.eksobionics.com/-- is a developer of
exoskeleton solutions that amplify human potential by supporting or
enhancing strength, endurance and mobility across medical and
industrial applications. Founded in 2005, the Company continues to
build upon its unparalleled expertise to design some of the most
cutting-edge, innovative wearable robots available on the market.
Ekso Bionics is the only exoskeleton company to offer technologies
that range from helping those with paralysis to stand up and walk,
to enhancing human capabilities on job sites across the globe. The
Company is headquartered in the Bay Area and is listed on the
Nasdaq Capital Market under the symbol EKSO.
Ekso Bionics reported a net loss of $12.13 million for the year
ended Dec. 31, 2019, compared to a net loss of $26.99 million for
the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$21.92 million in total assets, $15.12 million in total
liabilities, and $6.80 million in total stockholders' equity.
OUM & CO. LLP, in San Francisco, California, the Company's auditor
since 2010, issued a "going concern" qualification dated Feb. 27,
2020, citing that Company has incurred significant recurring losses
and negative cash flows from operations since inception and an
accumulated deficit. This raises substantial doubt about the
Company's ability to continue as a going concern.
ELLINGSWORTH RESIDENTIAL: Hires Latham Luna as Legal Counsel
------------------------------------------------------------
Ellingsworth Residential Community Association, Inc. seeks
authority from the US Bankruptcy Court for the Middle District of
Florida to employ the law firm of Latham, Luna, Eden & Beaudine,
LLP, as its counsel.
Ellingsworth requires Latham to:
(a) advise as to the Debtor's rights and duties in this case;
(b) prepare pleadings related to this case, including a plan
of reorganization; and
(c) take any and all other necessary action incident to the
proper preservation and administration of this estate.
Latham Luna's hourly rates range from $400 for its most experienced
attorneys to $105 for its most junior paraprofessionals.
The hourly rates for the attorneys primarily working on this matter
are between $300 for Daniel Velasquez, Esq. and $400 for Justin
Luna,Esq.
The Debtor paid an advance fee of $26,717 for pre- and
post-petition services and expenses to be incurred in connection
with this case.
Justin Luna, Esq., a partner at Latham Luna, assured the court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Justin M. Luna, Esq.
Daniel A. Velasquez, Esq.
LATHAM, LUNA, EDEN &BEAUDINE, LLP
111 N. Magnolia Ave., Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: jluna@lathamluna.com
dvelasquez@lathamluna.com
About Ellingsworth Residential
Community Association, Inc.
Ellingsworth Residential Community Association, Inc. sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.
Fla. Case No. 20-01346) on March 3, 2020, listing under $1 million
in both assets and liabilities. Justin M. Luna, Esq. at LATHAM LUNA
EDEN & BEAUDINE LLP represents the Debtor as counsel.
EMERALD CASINO: Bankr. Court's Second Distribution Order Upheld
---------------------------------------------------------------
In the case captioned CHAZ EBERT, Appellant, v. FRANCES GECKER, as
trustee of the Chapter 7 bankruptcy estate of EMERALD CASINO, INC.,
Appellee, Case No. 19 C 4376 (N.D. Ill.), District Judge Matthew F.
Kennelly affirms the bankruptcy order against Chaz Ebert.
Ebert is a creditor of Emerald Casino, Inc., which is now the
subject of a chapter 7 bankruptcy proceeding. She has appealed from
a final bankruptcy court order on two grounds. First, she argues
that the court erred in authorizing a distribution to several of
Emerald's other creditors, pursuant to the terms of a settlement
agreement between those creditors and the bankruptcy trustee that
the bankruptcy court had previously approved. Second, she contends
that the bankruptcy court erroneously denied her motion to modify
the order approving that settlement agreement.
Ebert invested in Emerald in 1999. In 2002, several of Emerald's
investors filed an involuntary chapter 7 bankruptcy petition
against Emerald. Shortly thereafter, the bankruptcy court converted
the case to a chapter 11 proceeding.
In October 2007, a group of Emerald's investors -- not including
Ebert -- sued several of its former corporate officers in state
court. In March 2008, the bankruptcy court converted Emerald's
case back to a chapter 7 proceeding and appointed Frances Gecker as
the trustee of Emerald's bankruptcy estate. After her appointment,
the trustee began developing a case against Emerald's former
officers and planned to seek a stay of the state-court plaintiffs'
case, pending resolution of her suit on behalf of the bankruptcy
estate.
In December 2008, the trustee filed suit in federal district court
against Emerald's former officers. By early 2016, the trustee had
settled the claims against two officers and had recovered some
money under the terms of those settlements. In April 2016, the
trustee filed a motion before the bankruptcy court, seeking
authorization to make a distribution to the state-court plaintiffs
under the terms of their agreement to evenly split recoveries from
litigation against Emerald's former officers. The trustee gave
written notice of the hearing on its motion to Emerald's creditors.
The bankruptcy court authorized the distribution.
In April 2019, the trustee had recovered more money from its
litigation against Emerald's former officers, and she filed a
motion for the bankruptcy court's authorization to make a second
distribution to the state-court plaintiffs. Again, the trustee gave
written notice of the motion to all of Emerald's creditors. This
time Ebert filed an objection. Ebert then appeared at the motion
hearing in May 2019, arguing that the second distribution would
improperly allow the state-court plaintiffs to recover money in
excess of their proofs of claim while Ebert, who had the "exact
same claims," would receive nothing. The bankruptcy court overruled
Ebert's objection, concluding that Ebert did not have the same
claims as the state-court plaintiffs by virtue of their settlement
agreement with the trustee, which is what entitled them to the
second distribution.
In June 2019, Ebert filed motions for reconsideration of the second
distribution order and modification of the 2008 order approving the
settlement agreement between the trustee and the state-court
plaintiffs.
The bankruptcy court denied both motions. The court declined to
reconsider its second distribution order, explaining that even if
the trustee believed that Ebert was entitled to a share of the
second distribution, she could not have made that payment to Ebert.
The trustee is bound by the orders of the bankruptcy court, which
had approved a settlement agreement authorizing distribution of the
trustee's litigation recoveries only to the state-court plaintiffs.
Next, the bankruptcy court declined to amend the order approving
the settlement agreement. The court explained that it was not
inequitable to allow distributions from litigation recoveries to
the state-court plaintiffs, even if it meant that after the second
distribution, they received payments in excess of their proofs of
claim.
Ebert contends that the bankruptcy court's order authorizing the
second distribution violates chapter 7's purpose of ensuring fair
distribution of a debtor's assets among its creditors. In her view,
the second distribution was unfair because it allowed the
state-court plaintiffs to recover money in excess of their proofs
of claim when Ebert had recovered nothing. She contends that
because she suffered the same injuries as the state-court
plaintiffs from the conduct of Emerald's former officers, she is
entitled to a share of the second distribution.
Despite Ebert's contentions, she does not have the same claim to
the litigation recovery as the state-court plaintiffs. As the
bankruptcy court explained, Ebert did not sue Emerald's former
officers in state court; she did not assign any claims against them
to the trustee; she was not party to the court-approved settlement
agreement; and she is therefore not entitled to the litigation
recoveries distributed under the terms of that agreement.
According to the District Court, the bankruptcy court did not
clearly err in concluding that Ebert does not have a viable claim
to share in the second distribution to the state-court plaintiffs.
The Court, therefore, affirms the bankruptcy court's second
distribution order, which was consistent with the court-approved
settlement agreement.
Ebert also argues that the bankruptcy court erred in denying her
motion to amend the settlement agreement order to allow her to
receive a share of the trustee's litigation recoveries. Ebert
argues that in denying her Rule 60(b)(5) motion, the bankruptcy
court erroneously disregarded a "significant change" in
circumstances that arose after 2008, when it issued the order
approving the settlement agreement.
The purportedly significant change is that after two distributions
from the settlement agreement, the state-court plaintiffs have
recovered more than the full value of their proofs of claim against
Emerald, while Ebert has received nothing. According to the
District Court, Ebert fails to explain why this circumstance is so
exceptional as to warrant the "extraordinary remedy" of amending
the settlement agreement order. She argues, unpersuasively, that
the possibility of the state-court plaintiffs recovering more than
the value of their proofs of claim is exceptional because "the
parties could not have anticipated" this. But Ebert does not offer
any reason to believe that this was unforeseeable in 2008.
In sum, the state-court plaintiffs' substantial litigation
recoveries, in excess of their proofs of claim, is not an
exceptional circumstance warranting an amendment of the settlement
agreement approval order. The bankruptcy court did not abuse its
discretion in denying Ebert's Rule 60(b)(5) motion, according to
the District Court.
A copy of the Court's Memorandum Opinion and Order dated Feb. 26,
2020 is available at https://bit.ly/39BJZJf from Leagle.com.
Chaz Ebert, Appellant, represented by David C. Gustman --
dgustman@freeborn.com -- Freeborn & Peters, Elizabeth L. Janczak --
ejanczak@freeborn.com -- Freeborn & Peters LLP & Devon Joseph
Eggert -- deggert@freeborn.com -- Freeborn & Peters, LLP.
Frances Gecker, chapter 7 Trustee of the bankruptcy, Appellee,
represented by Erik William Chalut , Loeb & Loeb, Kevin R. Malloy
-- kmalloy@fordellp.com -- Forde Law Offices LLP, Matthew J. Piers
-- mpiers@hsplegal.com -- Hughes Socol Piers Resnick & Dym Ltd.,
Micah R. Krohn -- mkrohn@fgllp.com -- FrankGecker LLP & Sven Thure
Nylen , Benesch.
About Emerald Casino
Emerald Casino Inc.'s bankruptcy case (Bankr. N.D. Ill. Case No.
02-22977) started in 2002 and went forward under Chapter 11 of the
Bankruptcy Code. In 2007, Emerald's bankruptcy case was converted
to one under Chapter 7, and the United States Trustee appointed
Frances Gecker as the Chapter 7 trustee.
EQM MIDSTREAM: Moody's Lowers CFR to Ba3, Outlook Remains Negative
------------------------------------------------------------------
Moody's Investors Service downgraded EQM Midstream Partners, LP's
Corporate Family Rating to Ba3 from Ba2, its Probability of Default
Rating to Ba3-PD from Ba2-PD and its unsecured notes rating to Ba3
from Ba2. The Speculative Grade Liquidity rating remains SGL-3. The
rating outlook remains negative. This action follows the ratings
downgrade of EQM's anchor shipper EQT Corporation to Ba3 from Ba1
on April 2, 2020.
"EQM's reliance on EQT as its anchor shipper and primary customer,
as well as the weakening of EQT's credit profile in light of the
anemic natural gas price environment is reflected in EQM's
downgrade," commented Sreedhar Kona, Moody's senior analyst.
Downgrades:
Issuer: EQM Midstream Partners, LP
Probability of Default Rating, Downgraded to Ba3-PD from Ba2-PD
Corporate Family Rating, Downgraded to Ba3 from Ba2
Senior Unsecured Notes, Downgraded to Ba3 (LGD4) from Ba2 (LGD4)
Outlook Actions:
Issuer: EQM Midstream Partners, LP
Outlook, remains Negative
RATINGS RATIONALE
EQM's downgrade to Ba3 CFR follows EQT's downgrade to Ba3. With
about 70% of EQM's 2019 revenues derived from EQT, EQM's credit
profile is closely tied to that of EQT and its weakening cash flow
outlook in light of low natural gas prices. EQT also faces
significant refinancing risk in an unsupportive capital markets
environment. EQM's negative outlook follows EQT's negative
outlook.
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 midstream
sector will be one of the sectors affected by the shock given its
sensitivity to production volume and indirect exposure to oil and
gas prices. While midstream companies may not see an immediate
sharp decline in revenue due to their long-term contractual
protection, EQM will nevertheless remain vulnerable to the outbreak
continuing to spread and oil and natural gas demand remaining weak.
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 partially reflects the impact on EQM's
credit quality of the breadth and severity of the oil demand and
supply shocks, and the broad deterioration in credit quality it has
triggered.
EQM should have adequate liquidity, as reflected in its SGL-3
rating. As of December 31, 2019, the company had approximately $600
million in borrowings under its $3 billion unsecured revolving
credit facility due October 2023. EQM's capital spending through
2020 will include capital contributions dedicated to its Mountain
Valley Pipeline (MVP) project and other growth projects. Moody's
expects EQM to fund its liquidity needs through its operating cash
flow and revolver draws. There is one financial covenant governing
the credit facility -- a maximum consolidated Debt/EBITDA ratio of
5.75x, stepping down in periodic decreases to 5.0x for the quarter
ending on March 31, 2023 and after. The company will maintain
compliance with its covenant requirements. However, the company
risks breaching its covenant in 2021 if MVP is not online in 2021.
There are no debt maturities until August 2022 when the term loan
matures.
EQM's Ba3 CFR is supported by its close proximity to high
production volumes in the Marcellus Shale and the critical nature
of its pipelines for moving natural gas within the region to long
haul pipelines. Contract renegotiations with EQT have provided EQM
with a new 15-year gas gathering agreement with immediately
effective longer-term, higher minimum volume commitments that will
enhance EQM's long-term cash flow profile. EQM is restrained by its
basin concentration and the multiple delays in completing the MVP
project, which is owned by the joint venture in which EQM is the
largest equity owner and serves as the operator of the pipeline.
EQM's credit profile is constrained by EQT's credit weakness.
EQM has a $3 billion revolving credit facility due 2023, $1.4
billion of term loan due 2022 and $3.5 billion of senior unsecured
notes with staggered maturities, as of December 31, 2019. EQM's
revolver, term loan and senior notes are unsecured and are pari
passu. Accordingly, the senior notes are rated Ba3, the same as the
CFR.
The principal methodology used in these ratings was Midstream
Energy published in December 2018/
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
EQM's ratings could be downgraded if EQT's credit quality
deteriorates significantly or if EQM's debt to EBITDA increases
substantially.
An upgrade of EQM is unlikely given EQT's negative outlook. EQM's
ratings could be considered for an upgrade if there is significant
improvement in EQT's credit quality and EQT's ratings are upgraded.
EQM must also maintain its existing stand-alone credit profile.
EQM Midstream Partners, LP is a master limited partnership that
owns and operates interstate pipelines and gathering lines
primarily serving Marcellus Shale production.
EQT CORP: Moody's Lowers CFR to Ba3, Outlook Remains Negative
-------------------------------------------------------------
Moody's Investors Service downgraded EQT Corporation's (EQT)
Corporate Family Rating to Ba3 from Ba1, its Probability of Default
Rating (PDR) to Ba3-PD from Ba1-PD and its unsecured notes rating
to Ba3 from Ba1. The Speculative Grade Liquidity (SGL) rating SGL-2
is unchanged. The rating outlook remains negative.
"The capital markets dislocation caused by the commodity price
collapse in the first quarter of 2020 has acutely elevated the
refinancing risk for oil and gas producers, and specifically for
pure-play natural gas producers such as EQT with high refinancing
needs in the near-term," commented Sreedhar Kona, Moody's senior
analyst. "Furthermore, despite EQT's measures to improve its cash
margin, the much-needed debt reduction to materially improve its
cash flow metrics continues to be challenging as the outlook for
natural gas fundamentals remains persistently weak."
Downgrades:
Issuer: EQT Corporation
Probability of Default Rating, Downgraded to Ba3-PD from Ba1-PD
Corporate Family Rating, Downgraded to Ba3 from Ba1
Senior Unsecured Notes, Downgraded to Ba3 (LGD4) from Ba1 (LGD4)
Senior Unsecured Shelf, Downgraded to (P)Ba3 from (P)Ba1
Senior Unsecured Medium-Term Note Program, Downgraded to (P)Ba3
from (P)Ba1
Outlook Actions:
Issuer: EQT Corporation
Outlook, Remains Negative
RATINGS RATIONALE
EQT's downgrade to Ba3 CFR from Ba1 is driven by its high
refinancing risk in an unsupportive capital markets environment
combined with challenging macro natural gas fundamentals without
substantial commodity hedges in 2021. Despite EQT's cash margin
improvement measures such as operational enhancements, gathering
contract renegotiation with its midstream partner EQM Midstream
Partners, LP (EQM) and somewhat enhancing the company's 2021
commodity hedge profile, EQT's credit profile improvement hinges on
significant debt reduction and further mitigating commodity price
risk through hedges.
EQT's negative ratings outlook reflects the significant uncertainty
in the natural gas price environment and the execution risk it
poses for the company's debt reduction measures. The rating outlook
could be changed to stable if the company executes on its debt
reduction initiatives and improves the outlook for its cash flow
metrics.
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 E&P sector has
been one of the sectors most significantly affected by the shock
given its sensitivity to demand and oil prices. More specifically,
the weaknesses in EQT's credit profile have left it vulnerable to
shifts in market sentiment in these unprecedented operating
conditions and EQT remains vulnerable to the outbreak continuing to
spread and commodity prices remaining weak. 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 EQT of the breadth and severity
of the commodity demand and supply shocks, and the broad
deterioration in credit quality it has triggered.
Moody's expects EQT to have good liquidity consistent with its
SGL-2 Speculative Grade Liquidity (SGL) Rating. As of December 31,
2019, EQT had $4.5 million of cash and $294 million of outstanding
borrowings under the revolving credit facility maturing in July
2022. However, in the first quarter of 2020, the company repaid all
of its outstanding borrowings under its revolver. Also, per the
company's disclosure towards the end of first quarter 2020,
approximately $700 million of letters of credit were posted from
the revolver, leaving the available balance at $1.8 billion[1].
Moody's expects the company to fund its capital spending needs and
debt service from its operating cash flow through 2020. Per the
company's disclosure, EQT had $800 million of term loan and $250
million of unsecured notes due in 2021. EQT's credit facility and
the term loan agreements contain a debt to capital limitation of
65%. The company will remain in compliance with the covenant. EQT
also has substantial natural gas reserves and acreage which could
be sold or borrowed against to provide additional liquidity if
necessary.
EQT's Ba3 CFR is supported by its size and scale, high quality
acreage position and modest cost structure that allows it to
efficiently replace production and reserves in a weak natural gas
price environment. However, EQT faces the likelihood of weakening
cash flow metrics beyond 2020 in light of high debt levels and a
persistently weak natural gas price environment. Although the
company is supported by a strong hedge book for 2020, it is
substantially exposed to weaker pricing in 2021 and beyond. In
addition to pursuing debt reduction through asset sales, the
company has already put in measures in place to improve its cash
margins through several initiatives including operating cost
structure optimization and the reduced gathering tariffs on its
midstream contracts. EQT's 2020 capital budget indicates a more
constrained approach to reserves and production growth and enables
the company to generate free cash flow that could be applied
towards debt reduction.
EQT's senior unsecured notes are rated Ba3, the same as the
company's CFR, because all of the company's long-term debt, which
includes $1 billion term loan ($800 million outstanding, unrated)
and $2.5 billion revolving credit facility (unrated), is
unsecured.
EQT Corporation is an independent exploration and production (E&P)
company focused in the Appalachian Basin.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:
EQT's ratings could be downgraded if the company fails to
meaningfully reduce debt or if the Retained Cash Flow (RCF) to debt
ratio falls below 15%. The ratings could also be downgraded if the
company is unable to refinance or repay its near-term maturities
and engages in debt purchases at steep discount or layers secured
debt above the unsecured notes.
EQT's ratings could be upgraded if RCF/debt is sustained above 25%
and the leveraged full cycle ratio (LFCR) is greater than 1.5x.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
EQUINOX HOLDINGS: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg.
-------------------------------------------------------------------
Moody's Investors Service downgraded Equinox Holdings, Inc.'s
ratings including its Corporate Family Rating to Caa1 from B2,
Probability of Default Rating to Caa1-PD from B2-PD, first lien
bank credit facilities to B3 from B1, and second lien term loan to
Caa3 from Caa1. The outlook is negative.
The downgrade reflects Moody's expectations for significant revenue
and earnings declines in 2020 due to coronavirus related facility
closures as well as the negative effect on consumer income and
wealth stemming from job losses and asset price declines, which
will diminish discretionary resources to spend on leisure
activities and potentially reduce Equinox's membership through
attrition and lower new recruitment. As a result, Moody's expects
lease adjusted debt-to-EBITDA to rise to above 9.5x in 2020. A high
cash burn during gym closures along with the potential need to
fulfill the guarantee of SoulCycle's debt will cause liquidity
pressure should closures persist. The facility closures began in
mid-March. Moody's expects efforts to contain the coronavirus will
restrict Equinox's ability to reopen for an unknown period. Equinox
was weakly positioned in the B2 rating category before the onset of
the coronavirus due to its persistently high leverage, relatively
weak interest coverage as well as a history of diverting cash flow
from Equinox health clubs to fund various other ventures.
Issuer: Equinox Holdings, Inc.
Corporate Family Rating, downgraded to Caa1 from B2
Probability of Default Rating, downgraded to Caa1-PD from B2-PD
Senior Secured First Lien Term Loan, downgraded to B3 (LGD3)
from B1 (LGD3)
Senior Secured First Lien Revolving Credit Facility, downgraded
to B3 (LGD3) from B1 (LGD3)
Senior Secured Second Lien Term Loan, downgraded to Caa3 (LGD5)
from Caa1 (LGD5)
Outlook Actions:
Issuer: Equinox Holdings, Inc.
Outlook, revised to Negative from Stable
RATINGS RATIONALE
Equinox's Caa1 CFR broadly reflects its very high leverage with
Moody's lease adjusted debt/EBITDA expected to rise to over 9.5x in
2020 due to earnings decline from temporary gym closures and the
drag on consumer spending as a result of the coronavirus crisis, as
well as weak liquidity. The ratings are also constrained by the
highly fragmented and competitive fitness club industry as having
high business risk given its low barriers to entry, exposure to
cyclical shifts in discretionary consumer spending, and high
attrition rates. In addition, the ratings reflect the company's
geographic concentration in New York City and coastal California,
both markets experiencing rapid minimum wage increases and a heavy
number of coronavirus cases19. However, Equinox's ratings are
supported by a well-recognized brand name among upscale fitness
clubs, as well as the longer term positive fundamentals for the
fitness club industry such as its apparent under penetration and an
increased awareness of the importance of fitness.
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 fitness club
industry has been significantly affected by the shock given its
sensitivity to consumer demand and sentiment. More specifically,
the weaknesses in Equinox's credit profile, including its exposure
to discretionary consumer spending 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 in part
reflects the impact on Equinox of the breadth and severity of the
shock, and the broad deterioration in credit quality it has
triggered.
Multiple governance factors are also credit negative including
aggressive financial policies under ownership by Related Companies,
management and private equity firm L. Catterton. The company's
history of diverting of cash flows from Equinox health clubs to
fund other ventures that do not provide credit support to Equinox's
debt, as well as transactions such as the SoulCycle debt guarantee
are also meaningful governance concerns. SoulCycle was spun-off
from the company in 2016.
The negative outlook reflects Moody's view that Equinox remains
vulnerable to coronavirus disruptions and unfavorable shifts in
discretionary consumer spending. There is uncertainty regarding the
timing of facility re-openings and the pace at which consumer
spending at the company's properties will recover. The negative
outlook also reflects the potential for liquidity pressures to
increase if cash burn persists or the company is required to fund
the SoulCycle debt guarantee.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded should operating performance, credit
metrics and liquidity improve.
The ratings could be downgraded if there is further deterioration
of operating performance, credit metrics or liquidity. Furthermore,
ratings could be downgraded should Moody's adjusted debt-to-EBITDA
remain elevated or the prospect for a distress exchange or other
default increases.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Equinox Holdings, Inc., headquartered in New York, NY, operates
fitness facilities across the US under the Equinox and Pure Yoga
brands. Equinox is majority-owned by individuals and entities
affiliated with Related Companies, L.P. ("Related"), a privately
held New York real estate firm, with L Catterton and members of
management holding a minority interest. Equinox's revenues were
$1.17 billion in 2019.
FIRST STATE BANK: MVB Acquires Assets; FDIC Named as Receiver
-------------------------------------------------------------
The First State Bank, based in Barboursville, West Virginia, was
closed April 3 by the West Virginia Division of Financial
Institutions, which appointed the Federal Deposit Insurance
Corporation (FDIC) as receiver. To protect depositors, the FDIC
entered into a purchase and assumption agreement with MVB Bank,
Inc. (MVB Bank) of Fairmont, West Virginia, to assume all of the
deposits of The First State Bank.
The First State Bank has experienced longstanding capital and asset
quality issues, operating with financial difficulties since 2015.
The bank's December 31, 2019 financial reports indicated capital
levels were too low to allow continued operations under federal and
state law.
The four branches of The First State Bank was expected to reopen as
branches of MVB Bank on Saturday, April 4, during normal banking
hours. The FDIC strongly encourages bank customers to follow
Centers for Disease Control and Prevention guidance on social
distancing and utilize online and electronic banking capabilities.
In keeping with West Virginia Governor Jim Justice's Stay-at-Home
Order, customers should visit a bank branch only if an in-person
visit is essential and only after making an appointment.
Depositors of The First State Bank will automatically become
depositors of MVB Bank. The FDIC will continue to insure deposits
so customers do not need to change their banking relationship in
order to retain their deposit insurance coverage up to applicable
limits.
Customers of The First State Bank should continue to use their
existing branches until they receive notice from MVB Bank that it
has completed systems changes to allow other MVB Bank branches to
process their accounts as well.
Friday evening and over the weekend, depositors of The First State
Bank can access their money by writing checks or using ATM or debit
cards. Checks drawn on the bank will continue to be processed. Loan
customers should continue to make their payments as usual.
Borrowers whose finances are impacted by the coronavirus pandemic
should contact their original loan officers or call the contact
information provided in their loan statements before addressing
requests for modifications to MVB Bank.
As of December 31, 2019, The First State Bank had approximately
$152.4 million in total assets and $139.5 million in total
deposits. In addition to assuming all of the deposits, MVB Bank
agreed to purchase approximately $147.2 million of The First State
Bank's assets. The FDIC will retain the remaining assets for later
disposition.
The FDIC estimates that the cost to the Deposit Insurance Fund
(DIF) will be $46.8 million. Compared to other alternatives, MVB
Bank's acquisition was the least costly resolution for the Deposit
Insurance Fund, which was created by Congress in 1933 and is
managed by the FDIC to protect the deposits at the nation's banks.
Customers with questions about the transaction should call the FDIC
toll-free at 1-800-517-1839. The phone number will be operational
this evening until 9:00 p.m.; on Saturday from 9:00 a.m. to 6:00
p.m.; on Sunday from noon to 6:00 p.m.; on Monday from 8:00 a.m. to
8:00 p.m.; and thereafter from 9:00 a.m. to 5:00 p.m. (all times
Eastern). For more information, visit the FDIC's website at
https://www.fdic.gov/bank/individual/failed/fsb-wv.html
FLEXENTIAL INTERMEDIATE: S&P Cuts ICR to 'CCC+' on COVID-19 Impact
------------------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on Flexential
Intermediate Corp. to 'CCC+' from 'B-' to reflect increased
likelihood of a default or distressed exchange over the long term.
S&P has also lowered the issue-level ratings by one notch, in line
with the lowered issuer credit rating.
"We downgraded Flexential because we believe the company will
continue to underperform our previous expectations as a result of
the coronavirus. For example, we now expect debt to EBITDA to
remain elevated above 9x through 2021 with interest coverage likely
to fall below 1.5x over the next 12-18 months. While Flexential
could pull back on some of its planned capital spending and even
temporarily improve cash flow, we still expect free operating cash
flow (FOCF) to remain negative for at least the next two years,"
S&P said.
The negative outlook reflects S&P's view that the company may
choose to restructure given adverse economic conditions, despite
adequate liquidity, because the capital structure appears
unsustainable.
"We could lower the rating if the recession induced by the COVID-19
pandemic significantly restricts earnings improvement, such that we
believe a default or restructuring is likely within 12 months. This
could be the result of pricing pressure, elevated churn, and an
inability to obtain new clients," S&P said.
"We could revise the outlook to stable if the company begins to
show traction with its new cloud product and total revenue grows.
Over the longer term, we could upgrade Flexential if the company
increases revenue, combined with successful cost-reduction
initiatives that improve EBITDA margin, and the company reduces
leverage below 7.5x on a sustained basis," the rating agency said.
FLYNN RESTAURANT: Moody's Affirms B3 CFR & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service affirmed Flynn Restaurant Group LP's B3
Corporate Family Rating, B3-PD Probability of Default Rating, B2
1st lien secured bank facility and Caa2 2nd lien secured bank
facility. The outlook was changed to negative from stable.
"The negative outlook reflects the significant uncertainty
surrounding the potential length and severity of restaurant
closures and the ultimate impact that these closures will have on
Flynn's revenues, earnings and liquidity." stated Bill Fahy,
Moody's Senior Credit Officer. "The outlook also takes into account
the negative impact on consumers ability and willingness to spend
on eating out until the crisis materially subsides," Fahy added.
The affirmation of the B3 CFR reflects the continuation of
drive-through where available as well as delivery, pick-up and
curbside operations, adequate liquidity to manage through several
months of significant revenue declines, and Moody's expectation
that Flynn will manage the business to preserve liquidity and then
use cash flow to reduce debt once the crisis subsides.
Affirmations:
Issuer: Flynn Restaurant Group LP
Probability of Default Rating, Affirmed B3-PD
Corporate Family Rating, Affirmed B3
Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 (LGD3)
Senior Secured 2nd LienBank Credit Facility, Affirmed Caa2 (LGD5)
Outlook Actions:
Issuer: Flynn Restaurant Group LP
Outlook, Changed To Negative From Stable
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 restaurant
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 Flynn's credit profile,
including its exposure to widespread location restrictions and
closures have left it vulnerable to shifts in market sentiment in
these unprecedented operating conditions and Flynn 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 of the breadth and severity of the
shock, and the broad deterioration in credit quality it has
triggered.
Flynn's B3 CFR is constrained by its already high leverage with
debt-to-EBITDA of around 6.0 times prior to the impact of COVID19.
Flynn had forecasted that EBITDA growth and the use of excess cash
flows to repay restricted group debt would support deleveraging.
However, the impact of the coronavirus will likely result in
leverage remaining high. The ratings also consider the high level
of capital expenditure required to fund remodel and growth as well
as the acquisitive nature of the company. The rating is supported
by the strength, scale, diversification, and high level of
awareness that the Taco Bell, Panera Bread and Arby's brands
provide and adequate liquidity.
From a governance perspective, Flynn's financial sponsor ownership
is a negative rating factor given the potential implications from
both a capital structure and operating perspective. Flynn is
majority owned by Ontario Teachers' Pension Plan, with Flynn
management having a meaningful minority ownership stake. Financial
strategy is a key concern of sponsor-owned companies, and in the
case of Flynn, Moody's believes the risks are the potential for a
more aggressive growth strategy including acquisitions of new units
and/or concepts, high leverage levels, and extractions of cash flow
via dividends in the absence of acquisitions.
Social considerations for restaurant operators include product
quality and food safety risks, including those related to external
suppliers of product and resulting related issues, such as food
borne illnesses. Flynn has not had any events of note in this
regard. Additionally, social risk related to demographic and
societal trends, including changing consumer preferences remain a
factor for restaurant issuers, although it is viewed as manageable
for the company.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors that could result in a stable outlook include a clear plan
and time line for the lifting of restrictions on restaurants that
result in a sustained improvement in operating performance,
liquidity and credit metrics. Given the negative outlook an upgrade
is unlikely at the present time. However, a higher rating would
require debt to EBITDA migrating towards 5.5 times and EBIT
coverage of gross interest of over 1.5 and good liquidity.
Factors that could result in a downgrade include a longer than
currently anticipated period of restaurant restrictions or closures
or a material deterioration in liquidity. Ratings could also be
downgraded in the event that credit metrics remained weak despite a
lifting of restrictions on restaurants and a subsequent recovery in
earnings and liquidity. Specifically, ratings could be downgraded
in the event debt to EBITDA was over 7.0 times or EBIT to interest
coverage was below 1.1 times on a sustained basis or if liquidity
deteriorated for any reason.
Flynn Restaurant Group LP, headquartered in San Francisco,
California, owns and operates 282 Taco Bells, 135 Panera Breads,
369 Arby's, and 454 Applebee's franchised restaurants throughout
the US as of June 30, 2019. The Applebee's restaurants are excluded
from the credit group, which includes the Pan American Group, Bell
American Group, and RB American Group subsidiaries. Flynn's
proforma annual revenue is approximately $2.3 billion on a
consolidated basis, $1.1 billion for the credit group. Flynn is
owned by Ontario Teachers' Pension Plan, Flynn management, and Main
Post Partners.
The principal methodology used in these ratings was Restaurant
Industry published in January 2018.
FORESIGHT ENERGY: Thompson, Akin Represent First Lien Group
-----------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Akin Gump Strauss Hauer & Feld LLP and Thompson
Coburn LLP submitted a verified statement that they are
representing Benefit Street Partners LLC, DoubleLine Capital LP,
GoldenTree Asset Management LP, Ivy Investment Management Company
and KKR Credit Advisors (US) LLC in the Chapter 11 cases of
Foresight Energy LP, et al.
The Ad Hoc First Lien Group engaged Akin Gump Strauss Hauer & Feld
LLP on October 4, 2019 and Thompson Coburn LLP on January 30, 2020,
to represent it in connection with a potential restructuring of the
Debtors.
Akin Gump and Thompson Coburn represent only the Ad Hoc First Lien
Group. Akin Gump and Thompson Coburn do not represent or purport to
represent any other entities in connection with the Debtors'
chapter 11 cases. Akin Gump and Thompson Coburn do not represent
the Ad Hoc First Lien Group as a "committee" and do not undertake
to represent the interests of, and are not fiduciaries for, any
creditor, party in interest or other entity that has not signed a
retention agreement with Akin Gump and/or Thompson Coburn. In
addition, the Ad Hoc First Lien Group does not represent or purport
to represent any other entities in connection with the Debtors'
chapter 11 cases.
As of April 2, 2020, members of the Ad Hoc First Lien Group and
their disclosable economic interests are:
Benefit Street Partners LLC
9 West 57th Street, Suite 4920
New York, NY 10019
* First Lien Debt: $112,665,323.67
DoubleLine Capital LP
333 South Grand Avenue, 18th Floor
Los Angeles, CA 90071
* First Lien Debt: $38,003,347.68
* Second Lien Debt: $14,828,000.00
GoldenTree Asset Management LP
300 Park Avenue, 21st Floor
New York, NY 10022
* First Lien Debt: $187,816,110.85
* Second Lien Debt: $49,681,000.00
Ivy Investment Management Company
6300 Lamar Ave.
Overland Park, KS 66202
* First Lien Debt: $55,090,550.04
KKR Credit Advisors (US) LLC
555 California St., 50th Floor
San Francisco, CA 94104
* First Lien Debt: $84,726,233.58
* Second Lien Debt: $39,020,000.00
The information set forth in Exhibit A, which is based on
information provided by the applicable members of the Ad Hoc First
Lien Group, is intended only to comply with Bankruptcy Rule 2019
and is not intended for any other purpose. Akin Gump and Thompson
Coburn do not make any representation regarding the validity,
amount, allowance or priority of such claims and reserves all
rights with respect thereto. Akin Gump or Thompson Coburn do not
own, nor has Akin Gump or Thompson Coburn ever owned, any claims
against or interests in the Debtors except for claims for services
rendered to the Ad Hoc First Lien Group.
Nothing contained in this Verified Statement should be construed as
a limitation upon, or waiver of, any rights of any member of the Ad
Hoc First Lien Group to assert, file and/or amend their claims in
accordance with applicable law and any orders entered in these
chapter 11 cases.
Akin Gump and Thompson Coburn reserve the right to amend and/or
supplement this Verified Statement in accordance with the
requirements set forth in Bankruptcy Rule 2019.
Counsel to the Ad Hoc First Lien Group can be reached at:
THOMPSON COBURN LLP
Mark V. Bossi, Esq.
One US Bank Plaza
St. Louis, MO 63101
Telephone: (314) 552-6000
Facsimile: (314) 552-7000
AKIN GUMP STRAUSS HAUER & FELD LLP
Ira S. Dizengoff, Esq.
Brad Kahn, Esq.
Zachary D. Lanier, Esq.
One Bryant Park
New York, NY 10036
Telephone: (212) 872-1000
Facsimile: (212) 872-1002
- and -
AKIN GUMP STRAUSS HAUER & FELD LLP
James Savin, Esq.
Robert S. Strauss Tower
2001 K Street, NW
Washington, DC 20006
Telephone: (202) 887-4000
Facsimile: (202) 887-4288
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/dCYAW8
About Foresight Energy
Foresight Energy and its subsidiaries -- http://www.foresight.com/
-- are producers of thermal coal, with four mining complexes and
nearly 2.1 billion tons of proven and probably coal reserves
strategically located near multiple rail and river transportation
access points in the Illinois Basin. The Debtors also own a
barge-loading river terminal on the Ohio River. From this
strategic position, the Debtors sell their coal primarily to
electric utility and industrial companies located in the eastern
half of the United States and across the international market.
Foresight Energy LP and its affiliates sought Chapter 11 protection
(Bankr. E.D. Mo. Lead Case No. 20-41308) on March 10, 2020.
The Hon. Kathy A. Surratt-States is the case judge.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison LLP as
legal counsel; Jefferies Group as investment banker; and FTI
Consulting, Inc. as financial advisor. Prime Clerk LLC is the
claims agent at https://cases.primeclerk.com/ForesightEnergy
Akin Gump Strauss Hauer & Feld LLP is acting as legal counsel and
Lazard Freres & Co. LLC is acting as investment banker to the Ad
Hoc Lender Group representing lenders under the first lien credit
agreement.
Milbank LLP is acting as legal counsel and Perella Weinberg
Partners LP is acting as investment banker to the Ad Hoc Lender
Group representing crossover lenders under each of the second lien
indenture and first lien credit agreement.
The Debtors were estimated to have $1 billion to $10 billion in
assets and liabilities.
FOSSIL CREEK: Lender Wins Dismissal of Case
-------------------------------------------
Fossil Creek Partners, LLC's Chapter 11 bankruptcy case is now
closed.
Bankruptcy Judge Mark X Mullin granted the request of Wilmington
Trust, National Association, as Trustee for the Benefit of the
Noteholders of COMM 2016-CCRE28 Mortgage Trust Commercial Mortgage
Pass-Through Certificates, Series 2016-CCRE28, to dismiss the
case.
Wilmington Trust, the secured lender, contends the Debtor had no
authority to file for bankruptcy.
Fossil Creek Partners owns a Holiday Inn located at 4635 Gemini
Place, Fort Worth, Texas, which served as the secured lender's
collateral, securing the repayment of a $12.5 million commercial
real estate loan. The amount outstanding under the loan is in
excess of $12.35 million.
The hotel was placed in receivership following the Debtor's
repeated defaults under both the loan and its franchise agreement
with Holiday Hospitality Franchising LLC/Intercontinental Hotels
Group.
Scott Crunk was appointed as receiver for the hotel. Pursuant to
the receivership order, Mr. Crunk has the broad powers, including
the authority to sell the hotel to Blue Star Hospitality, LLC for
$8.65 million.
The Debtor filed for Chapter 11 bankruptcy in January 2020 after
the District Court in Tarrant County, 352nd Judicial District,
which oversees the receivership proceedings, entered the sale
order.
According to Wilmington Trust, the Debtor's bankruptcy filing was
not duly authorized because the independent director of the
Debtor's "SPE member" did not consent to the bankruptcy filing as
required by the Debtor's Certificate of Formation dated October 15,
2015, and the Loan Agreement with the secured lender. Wilmington
says the Debtor attempted to circumvent this requirement by filing
restated certificates of formation with the Texas Secretary of
State in 2018, and in 2020 during the week before the bankruptcy
filing. The restated documents purported to remove the special
purpose entity and independent director requirements from the
Debtor's organizational documents.
Wilmington also argues that the offer received from Blue Star is
already the highest and best offer among nine bids received. The
bankruptcy case should be dismissed, Wilmington says, so the state
court may finish its administration of the receivership and sale of
the hotel.
William T. Neary, the United States Trustee for Region 6, moved for
the appointment of a Chapter 11 Trustee or, in the alternative,
dismissal of the case. The U.S. Trustee believes the appointment
of a chapter 11 trustee ensures all parties that Bankruptcy Code
duties and powers are performed and exercised by a properly
empowered person. A neutral third party will be able to determine
the best course of action, the U.S. Trustee says.
The U.S. Trustee also contends the Debtor appears to have filed
this chapter 11 case in bad faith, to avoid a sale that was
properly authorized in state court. "It appears this case is a
two-party dispute and can best be resolved in state court. This
constitutes additional cause to dismiss this case," the U.S.
Trustee says.
About Fossil Creek Partners, LLC
Fossil Creek Partners, LLC dba Holiday Inn Fossil Creek, is a
privately held company in the traveler accommodation industry. The
company filed a Chapter 11 petition (Bankr. N.D. Tex. Case No.
20-40297) on January 23, 2020.
On the Petition Date, the Debtor estimated between $10 million and
$50 million in both assets and liabilities. The petition was
signed by Larry D. Williams, VP of Operations.
Joyce W. Lindauer Attorney, PLLC represents the Debtor. Judge Mark
X. Mullin is assigned to the case.
Wilmington Trust, National Association, as Trustee for the Benefit
of the Noteholders of COMM 2016-CCRE28 Mortgage Trust Commercial
Mortgage Pass-Through Certificates, Series 2016-CCRE28, as secured
lender, is represented by:
Bruce J. Zabarauskas, Esq.
Thompson & Knight LLP
One Arts Plaza
1722 Routh Street, Suite 1500
Dallas, TX 75201
Tel: (214) 969-2511
E-mail: Bruce.Zabarauskas@tklaw.com
FRANK & LUPE II: Hires Allen Barnes as Attorney
-----------------------------------------------
Frank & Lupe II, LLC, seeks authority from the U.S. Bankruptcy
Court for the District of Arizona to employ Allen Barnes & Jones,
PLC, as attorney to the Debtor.
Frank & Lupe requires Allen Barnes to:
a. provide the Debtor and Principal with legal advice with
respect to the reorganization;
b. represent the Debtor in connection with negotiations
involving secured and unsecured creditors;
c. represent the Debtor at hearings set by the Court in the
bankruptcy case; and
d. prepare necessary applications, motions, answers, orders,
reports or other legal papers necessary to assist in the
Debtor's reorganization.
Allen Barnes will be paid at these hourly rates:
Thomas H. Allen, Member $425
Hilary L. Barnes, Member $425
Michael A. Jones, Member $405
Philip J. Giles, Member $325
David B. Nelson, Associate $255
Cody D. Vandewerker, Associate $285
Legal Assistants and Law Clerks $115 to 195
Prior to the Petition Date, the Debtor paid Allen Barnes a retainer
of $20,000. From the retainer, $4,242.25 was applied to
pre-petition fees and costs, including the Chapter 11 filing fee,
and $15,757.75 is held in Allen Barnes's IOLTA Trust Account.
Allen Barnes will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Thomas H. Allen, a partner at Allen Barnes & Jones, 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.
Allen Barnes can be reached at:
Thomas H. Allen, Esq.
Philip J. Giles, Esq.
David B. Nelson, Esq.
ALLEN BARNES & JONES, PLC
1850 N. Central Ave., Suite 1150
Phoenix, AZ 85004
Tel: (602) 256-6000
Fax: (602) 252-4712
E-mail: tallen@allenbarneslaw.com
pgiles@allenbarneslaw.com
dnelson@allenbarneslaw.com
About Frank & Lupe II LLC
Frank & Lupe II, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. D. Ariz. Case No. 20-02778) on March 16, 2020, disclosing
under $1 million in both assets and liabilities. The Debtor is
represented by Thomas H. Allen, Esq., at Allen Barnes & Jones.
FRANKLIN CAMBRIDGE: Hires LTC Back Office as Accountant
-------------------------------------------------------
Franklin Cambridge Operations, LLC, seeks authority from the U.S.
Bankruptcy Court for the Eastern District of Tennessee to employ
LTC Back Office, LLC, as accountant to the Debtor.
Franklin Cambridge requires LTC Back Office to:
-- assist in the keeping of books and records of the Debtor
and any other financial statements that may be required;
and
-- perform other and further services as may become
necessary in the course of the bankruptcy proceedings.
LTC Back Office will be paid at these hourly rates:
Daren Douston $150
Staffs $95
LTC Back Office will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Daren Douston, a partner at LTC Back Office, 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.
LTC Back Office can be reached at:
Daren Douston
LTC Back Office, LLC
10945 State Bridge Road, Suite 401-470
Alpharetta, GA 30022
Tel: (678) 381-2820
Fax: (678) 381-2820
About Franklin Cambridge Operations
Franklin Cambridge Operations, LLC, is a Medicare and Medicaid
provider operating a skilled nursing facility known as The
Cambridge House in Bristol, Tenn.
Franklin Cambridge filed a Chapter 11 petition (Bankr. E.D. Tenn.
Case No. 20-10327) on Jan. 27, 2020. At the time of the filing, the
Debtor was estimated to have up to $50,000 in assets and $1 million
to $10 million in liabilities. Judge Nicholas W. Whittenburg
oversees the case. The Debtor hired Chambliss Bahner & Stophel,
P.C. as its bankruptcy counsel.
FRONTIER COMMUNICATIONS: Skips Payments; In Talks With Noteholders
------------------------------------------------------------------
Frontier Communications Corporation filed with the Securities and
Exchange Commission its Annual Report on Form 10-K reporting a net
loss of $5.91 billion on $8.11 billion of revenue for the year
ended Dec. 31, 2019, compared to a net loss of $643 million on
$8.61 billion of revenue for the year ended Dec. 31, 2018.
As of Dec. 31, 2019, the Company had $17.48 billion in total
assets, $2.80 billion in total current liabilities, $462 million in
deferred income taxes, $1.89 billion in pension and other
postretirement benefits, $412 million in other liabilities, $16.31
billion in long-term debt, and a total deficit of $4.39 billion.
The Company had cash and cash equivalents of $760 million and an
accumulated deficit of $8,573 million as of Dec. 31, 2019. The
Company also had an operating loss of $4,873 million for the year
ended Dec. 31, 2019.
From January 2020 until March 27, 2020, the Company engaged in
discussions with certain unsecured noteholders with respect to
potential deleveraging or restructuring transactions. Although the
Company continues to be open to all discussions with the Unsecured
Noteholders regarding a potential Restructuring, there can be no
assurance it will reach an agreement with the Unsecured Noteholders
in a timely manner, on terms that are attractive to the Company, or
at all.
Furthermore, on March 16, 2020, the Company deferred making $322
million in scheduled interest payments due on certain of its senior
notes and a 60-day grace period commenced under the indentures
governing those notes. The Company elected to enter into the grace
period in order to collaborate with its noteholders regarding the
Restructuring. If the Company does not make these interest
payments by May 15, 2020 or if it does not make any required
principal payments required under the indentures governing its
notes, an event of default would occur under the applicable
indentures, which would give the trustee or the holders of at least
25% of principal amount the option to accelerate maturity of the
principal, plus any accrued and unpaid interest on those notes.
The Company has also elected to defer making scheduled interest
payments due on April 1, 2020 with respect to certain of its
debentures.
The Company evaluated the impact of undertaking the Restructuring
and the payment deferral described above on its ability to continue
as a going concern. As a result of risks and uncertainties related
to (i) the Company's ability to obtain requisite support for the
Restructuring from various stakeholders, (ii) the effects of
disruption from the Restructuring making it more difficult to
maintain business, (iii) financing and operational relationships
and (iv) the limited liquidity to pay the principal balance of the
deferred payment senior notes and debentures upon an event of
default, together with the Company's recurring losses from
operations and accumulated deficit, substantial doubt exists
regarding the Company's ability to continue as a going concern.
"Our ability to continue as a going concern is dependent upon our
ability to consummate the Restructuring and to generate sufficient
liquidity from the Restructuring to meet our obligations and
operating needs. There can be no assurance that the Restructuring
will occur or be successful. Additionally, we continue to focus on
our initiatives to drive operational performance, invest in our
fiber network, add talent to our organization and become a stronger
partner to our residential and enterprise customers as we operate
our business. If the Restructuring is unsuccessful, our cash
position may not be sufficient to support our daily operations or
initiatives. Although we expect that the successful consummation of
the Restructuring will generate sufficient revenue and reduce costs
to sustain operations, there can be no assurance that it will."
KPMG LLP, in Stamford, Connecticut, the Company's auditor since
1936, issued a "going concern" qualification in its report dated
March 31, 2020 citing that the Company has identified certain
conditions and events, including a potential financial
restructuring of its existing debt, existing equity interest and
certain other obligations, which raise substantial doubt about its
ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://is.gd/d70FLm
About Frontier Communications
Headquartered in Norwalk, Connecticut, Frontier Communications
Corporation (NASDAQ: FTR) -- http://www.frontier.com/-- is a
provider of communications services to urban, suburban, and rural
communities in 29 states. Frontier offers a variety of services to
residential customers over its fiber-optic and copper networks,
including video, internet, advanced voice, and Frontier Secure
digital protection solutions. Frontier Business offers
communications solutions to small, medium, and enterprise
businesses.
* * *
As reported by the TCR on Aug. 14, 2019, Moody's Investors Service
downgraded the corporate family rating of Frontier Communications
to Caa2 from Caa1 and the probability of default rating to Caa3-PD
from Caa1-PD. The downgrade of the CFR reflects an updated
assessment of the company's probability of default and recovery
expectations following weak second quarter 2019 revenue and EBITDA
results, continued negative net customer addition trends and
reduced expectations regarding cost efficiency programs going
forward.
As reported by the TCR on March 19, 2020, Fitch Ratings downgraded
Frontier Communications Corporation's and its subsidiaries'
Long-Term Issuer Default Rating to 'C' from 'CC'. Frontier has not
reported earnings for 2019. Fitch expects Frontier to report
negative revenue trends in 2019, slightly less than the nearly 6%
decline in 2018. Revenues could remain pressured in 2020 due to
economic weakness arising from the slowing economy and disruptions
from the coronavirus pandemic. While telecom operators are not
expected to be materially affected by the latter at this time,
Fitch expects to see some weakness, primarily from small and medium
businesses.
The TCR reported on March 20, 2020 that 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-'. 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.
GENCANNA GLOBAL: Committee Taps Foley & Lardner as Legal Counsel
----------------------------------------------------------------
The official committee of unsecured creditors of GenCanna Global
USA, Inc., received approval from the U.S. Bankruptcy Court for the
Eastern District of Kentucky to hire Foley & Lardner LLP as its
legal counsel.
Foley & Lardner will provide these services in connection with the
Chapter 11 cases filed by GenCanna and its affiliates:
a. advise the committee of its rights, powers and duties;
b. prepare legal papers;
c. represent the committee in matters involving contests with
the Debtors, alleged secured creditors and other parties;
d. analyze a potential reorganization of the Debtors' assets
or a sale of substantially all of their assets and the interests of
unsecured creditors with respect to such potential transactions;
e. review pre-bankruptcy transactions and relationships with
non-debtor affiliates;
f. negotiate a plan of reorganization or liquidation;
g. assist the committee in analyzing the claims of creditors
and the Debtors' capital structure and in negotiating with holders
of claims and equity interests;
h. assist the committee's investigation of the acts, conduct,
assets, liabilities and financial condition of the Debtors (and, to
the extent applicable, the Debtors' officers, directors and
shareholders) and of the operation of their businesses;
i. assist the committee as to its communications to the
general creditor body regarding significant matters in the Debtors'
cases;
j. review and analyze all applications, orders, statements of
operations and schedules filed with the court and advise the
committee as to their propriety; and
k. provide all other necessary legal services.
The firm will be paid at these rates:
Geoffrey Goodman Partner $702
Joanne Molinaro Partner $639
Mark Moore Senior Counsel $472
Edna Dianne Thomas-Nichols Paralegal $229
Foley & Lardner is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Foley &
Lardner disclosed that it has agreed to discount the current
standard hourly rates for its attorneys, paralegals and legal
assistants by at least 10 percent.
Foley & Lardner also disclosed that no professional at the firm has
varied his rate based on the geographic location of the Debtors'
bankruptcy cases and that the firm has not represented the
committee in the 12 months prior to the Debtors' bankruptcy
filing.
Foley & Lardner said it expects to develop a budget and staffing
plan to comply with the U.S. Trustee's request for information and
additional disclosures and that the committee has already approved
the firm's hourly billing rates and discount.
The firm can be reached through:
Geoffrey S. Goodman, Esq.
Foley & Lardner LLP
321 N. Clark Street, Suite 3000
Chicago, Illinois 60654
Telephone: 312-832-4500
Facsimile: 312-832-4700
Email: ggoodman@foley.com
About GenCanna Global USA
GenCanna Global USA, Inc. -- https://gencanna.com/ -- is a
vertically-integrated producer of hemp and hemp-derived CBD
products with a focus on delivering social, economic and
environmental impact through seed-to-scale agricultural
production.
GenCanna Global USA was the subject of an involuntary Chapter 11
proceeding (Bankr. E.D. Ky. Case No. 20-50133) filed on Jan. 24,
2020. The involuntary petition was signed by alleged creditors
Pinnacle, Inc., Crawford Sales, Inc., and Integrity/Architecture,
PLLC.
On Feb. 6, 2020, GenCanna Global USA consented to the involuntary
petition and on Feb. 5, 2020, two affiliates, GenCanna Global Inc.
and Hemp Kentucky LLC, filed their own voluntary Chapter 11
petitions.
Laura Day DelCotto, Esq., at DelCotto Law Group PLLC, represents
the petitioners.
The Debtors tapped Benesch Friedlander Coplan & Aronoff, LLP and
Dentons Bingham Greenebaum, LLP as legal counsel; Huron Consulting
Services, LLC as operational advisor; and Jefferies, LLC, as
financial advisor. Epig is the claims agent, which maintains the
page https://dm.epiq11.com/GenCanna.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Feb. 18, 2020. The committee tapped Foley & Lardner
LLP as its bankruptcy counsel, and DelCotto Law Group PLLC as its
local counsel.
GEO-TECH POLYMERS: Seeks Authorization to Use Cash Collateral
-------------------------------------------------------------
Geo-Tech Polymers, LLC seeks authority from the U.S. Bankruptcy
Court for the Southern District of Ohio to use cash collateral in
the ordinary course of its business.
GTP believes the following creditors may have interest on the cash
collateral: (i) CT Corporation System, as representative; (ii)
International Financial Services Corp; (iii) First Corporate
Solutions, as representative of Bluevine; (iv) IFund, LLC; (v)
Knight Capital Funding; (vi) HOP Capital; and (vii) CHTD Company.
GTP proposes to provide adequate protection to these creditors by
granting replacement lien in the post‐petition cash collateral to
the extent these creditors held a secured pre‐petition lien. The
replacement lien will have the same validity and priority as the
secured creditor's pre‐petition lien had.
In addition, GTP will pay these creditors adequate protection
payments equal to the pre‐petition non‐default interest due on
the loan obligations.
About Geo-Tech Polymers
Geo-Tech Polymers, LLC -- http://www.geo-tech.com-- is a supplier
of solutions that transform low-value plastics waste into
high-quality products for financial and environmental benefit. It
pioneered a mechanical cleaning process that enables companies to
add value to their plastics byproducts by returning a material of
unprecedented quality.
Geo-Tech Polymers, LLC, filed a voluntary petition under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Ohio Case No. 20-50255) on Jan.
16, 2020. In the petition signed by Sanjay Dutta, chief executive
officer and president, the Debtor disclosed assets of between $10
million and $50 million and liabilities of the same range. Judge
C. Kathryn Preston oversees the case.
The Debtor tapped Tompkins, Selph, & Associates, Ltd. and Strip,
Hoppers, Leithart, McGrath & Terlecky Co., LPA as their legal
counsel.
GHOTRA HOSPITALITY: Seeks to Hire Mark Dodds as Accountant
----------------------------------------------------------
Ghotra Hospitality, LLC, seeks authority from the U.S. Bankruptcy
Court for the Western District of Oklahoma to employ Mark Dodds, as
accountant to the Debtor.
Mark Dodds will provide accounting services to the Debtor in the
Chapter 11 bankruptcy proceedings.
Mark Dodds will be paid at the hourly rate of $160.
Mark Dodds will also be reimbursed for reasonable out-of-pocket
expenses incurred.
To the best of the Debtor's knowledge 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.
About Ghotra Hospitality
Ghotra Hospitality, LLC is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)). It owns in fee simple a
real property in Oklahoma City, OK, having a current value of $6.45
million.
Ghotra Hospitality, LLC, based in Oklahoma City, OK, filed a
Chapter 11 petition (Bankr. W.D. Okla. Case No. 20-10736) on March
5, 2020. In the petition signed by Lakhwinder S. Multani, manager,
the Debtor disclosed $6,907,217 in assets and $5,184,845 in
liabilities. HAMMOND & ASSOCIATES, P.L.L.C, serves as bankruptcy
counsel.
GLOBAL CORE: Seeks to Hire Mark Dodds as Accountant
---------------------------------------------------
Global Core Still Water, LLC, seeks authority from the U.S.
Bankruptcy Court for the Western District of Oklahoma to employ
Mark Dodds, as accountant to the Debtor.
Global Core requires Mark Dodds to provide accounting services to
the Debtor in the Chapter 11 bankruptcy proceedings.
Mark Dodds will be paid at the hourly rate of $160.
Mark Dodds will also be reimbursed for reasonable out-of-pocket
expenses incurred.
To the best of the Debtor's knowledge 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.
About Global Core Still Water
Global Core Stillwater, LLC, a single asset real estate debtor,
owns La Quinta Inn & Sites Stillwater, a hotel in Stillwater,
Oklahoma.
Global Core Stillwater sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Okla. Case No. 19-12805) on July 10,
2019. At the time of the filing, the Debtor disclosed $5,644,440 in
assets and $4,874,617 in liabilities. The case is assigned to
Judge Janice D. Loyd. The Debtor hired the Law Office of Charles C.
Ward, PLLC, as counsel.
GREATER BLESSED: Hires David Marshall Brown as Counsel
------------------------------------------------------
Greater Blessed Assurance Apolostic Temple, Inc., seeks authority
from the U.S. Bankruptcy Court for the Middle District of Florida
to employ David Marshall Brown, P.A., as counsel to the Debtor.
Greater Blessed requires David Marshall Brown to:
(a) give advice to the Debtor in Possession with respect to
its powers and duties as a Debtor in Possession and the
continued management of the business operations;
(b) advise the Debtor in Possession with respect to its
responsibilities in complying with the U.S. Trustee's
Operating Guidelines and Reporting Requirements and with
the rules of this 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 Possession in all
matters pending before the Court;
(e) represent the Debtor in Possession in negotiation with
its creditors in the preparation of a plan.
David Marshall Brown will be paid based upon its normal and usual
hourly billing rates. The firm will also be reimbursed for
reasonable out-of-pocket expenses incurred.
David Marshall Brown, partner of David Marshall Brown, P.A.,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
David Marshall Brown can be reached at:
David Marshall Brown, Esq.
DAVID MARSHALL BROWN, P.A.
413 S.W. 5th St.
Fort Lauderdale, FL 33315
Tel: (954) 770-3729
About Greater Blessed Assurance
Apolostic Temple, Inc.
Greater Blessed Assurance Apostolic Temple Inc., filed a Chapter 11
bankruptcy petition (Bankr. M.D. Fla. Case No. 20-00148) on Jan.
10, 2020, disclosing under $1 million in both assets and
liabilities. The Debtor hired David Marshall Brown, P.A., as
counsel.
GREENTEC-USA INC: Seeks to Hire Cahn & Samuels as Special Counsel
-----------------------------------------------------------------
GreenTec-USA, Inc., seeks authority from the US Bankruptcy Court
for the Eastern District of Virginia to employ the law firm of Cahn
& Samuels, LLP, as its special counsel for the purpose of
performing special legal services for the Debtor to protect and
preserve the Debtor's valuable intellectual property rights and
interests.
The lead professional who will work on this matter is George A.
Metzenthin, Esq. and his current hourly rate is $400 per hour. The
billing rates of additional professionals range from $250 per hour
to $400 per hour.
The Debtor will pay a retainer of $12,180.
Mr. Metzenthin attests that the firm is disinterested within the
meaning of 11 U.S.C. 101(14).
The firm can be reached through:
George A. Metzenthin, Esq.
Cahn & Samuels, LLP
1100 17th Street, NW, Suite 401
Washington, DC 20036
Tel: 202 331 8777
Fax: 202 331 3838
About GreenTec-USA, Inc.
GreenTec-USA, Inc. -- https://greentec-usa.com/ -- offers
cyber-defense, secure data, secure systems, and secure document
storage, video compression, data center modularization and
optimization services.
Based in Sterling, Va., GreenTec-USA filed a voluntary Chapter 11
petition (Bankr. E.D. Va. Case No. 19-14034) on Dec. 10, 2019. In
the petition signed by Stephen Petruzzo, president and chief
executive officer, the Debtor estimated $1 million to $10 million
in both assets and liabilities. Robert M. Marino, Esq., at Redmon
Peyton & Braswell, LLP, is the Debtor's legal counsel.
HARSCO CORP: S&P Downgrades ICR to 'BB-'; Outlook Negative
----------------------------------------------------------
S&P Global Ratings downgraded its issuer credit rating on Harsco
Corp. to 'BB-' from 'BB' with a negative outlook. At the same time,
S&P downgraded its issue-credit rating on Harsco's $700 million
senior secured revolver and $550 million first-lien term loan to
'BB' from 'BB+' and the issue-level rating on the company's $500
million of senior unsecured notes to 'B+' from 'BB-'.
The downgrade and negative outlook incorporates S&P's expectation
for a persistent decline in Harsco's key end-markets (particularly
its metals and other cyclical end-markets) as well as general
uncertainty in the macroeconomic environment given the rapid spread
of COVID-19 and expectations for a sizable reduction in global GDP.
S&P expects customer volumes to decline meaningfully, and that
leverage will likely increase well above 4x.
The negative outlook on Harsco reflects S&P's expectation for
elevated leverage, incorporating the planned Stericycle
Environmental Solutions (ESOL) acquisition, that could remain at an
elevated level over the next 12 months due to a global weakening in
the economy from potential impacts from COVID-19.
"We could lower our rating on Harsco by one notch if the company's
operating performance declines beyond our current expectations due
to lower demand for the company's products and services that drives
total debt to EBITDA above 5x over the next 12 months," S&P said.
"We could stabilize the outlook on Harsco if a sustained economic
downturn recedes and the company is able to improve leverage
consistently below 5X. We would also have to believe that the
company is committed to financial policies (particularly around
future shareholder returns and potential acquisitions) that support
this level of leverage," the rating agency said.
HARTSHORNE HOLDINGS: Gets Approval to Hire FTI, Appoint CRO
-----------------------------------------------------------
Hartshorne Holdings, LLC received approval from the U.S. Bankruptcy
Court for the Western District of Kentucky to hire FTI Consulting,
Inc. and appoint Bertrand Troiano, the firm's managing director, as
chief restructuring officer.
Mr. Troiano and his firm will provide services to Hartshorne and
its affiliates to complete their restructuring. These services
include cash forecasting, liquidity management, assistance in
addressing business issues that arise during the pendency of their
Chapter 11 cases, the development of information for the Debtors
and other parties, bankruptcy administration, preparation of
monthly operating reports and motions, and testimony.
FTI will be paid a monthly advisory fee of $140,000 at the
beginning of each month for the services of Mr. Troiano. As for
the other personnel, fees will be billed at their hourly rates:
Senior Managing Directors $985 - $1295
Directors/Senior Directors/Managing Directors $735 - $905
Consultants/Senior Consultants $415 - $660
Administrative/Paraprofessionals $150 - $280
If the Debtors succeed in obtaining (i) a consensual restructuring,
compromise or extinguishment of existing indebtedness, or (ii) a
final judicial order approving a Chapter 11 plan of reorganization,
or (iii) a sale, transfer or other disposition of substantially all
of the Debtors' assets in one or more transactions under Section
363 of the Bankruptcy Code, then, upon the consummation of such
restructuring or sale, the Debtors will pay FTI a completion fee in
the amount $300,000.
Mr. Troiano disclosed in court filings that his firm is
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
FTI can be reached through:
Bertrand Troiano
FTI Consulting, Inc.
Three Times Square, 9th Floor
New York, NY, 10036
Tel: +1 212 247 1010 / +1 303 513 2209
Fax: +1 212 841 9350
Email: bertrand.troiano@fticonsulting.com
About Hartshorne Holdings
Hartshorne Holdings, LLC and affiliates are engaged in the
production and sale of thermal coal through the operation of the
Poplar Grove Mine, which is part of the Buck Creek Complex located
in the Illinois Coal Basin in Western Kentucky. The Buck Creek
Complex includes two mines: (i) the operating Poplar Grove Mine,
and (ii) the permitted, but not constructed, Cypress Mine.
On Feb. 20, 2020, Hartshorne Holdings, LLC and three affiliates
sought Chapter 11 bankruptcy protection (Bankr. W.D. Ky. Lead Case
No. 20-40133).
Hartshorne Holdings was estimated to have $50 million to $100
million in assets and liabilities as of the bankruptcy filing.
The Hon. Thomas H. Fulton is the case judge.
The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy
counsel; Frost Brown Todd LLC as local counsel; FTI Consulting,
Inc. as financial advisor; and Perella Weinberg Partners LP as
investment banker. Stretto is the claims agent, maintaining the
page https://cases.stretto.com/hartshorne
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on March 10, 2020. The committee is represented by
Dentons Bingham Greenebaum LLP and Whiteford Taylor Preston, LLP.
HARTSHORNE HOLDINGS: Taps Perella Weinberg as Investment Banker
---------------------------------------------------------------
Hartshorne Holdings, LLC, received approval from the U.S.
Bankruptcy Court for the Western District of Kentucky to hire
Perella Weinberg Partners LP as its investment banker.
The firm will provide these services to Hartshorne and its
affiliates in connection with their Chapter 11 cases:
* General Financial Advisory and Investment Banking Services
a. become familiar with the business, operations, properties,
financial condition and prospects of the Debtors;
b. review the Debtors' financial condition and outlook;
c. assist in the development of financial data and
presentations to the Debtors' Board of Directors, various
creditors, and other parties;
d. analyze the Debtors' financial liquidity and evaluate
alternatives to improve such liquidity;
e. evaluate the Debtors' debt capacity and alternative capital
structures;
f. participate in negotiations among the Debtors and their
creditors, suppliers, lessors and other interested parties;
g. advise the Debtors and negotiate with lenders with respect
to potential waivers or amendments of various debt agreements and
contracts; and
h. provide other advisory services.
* Restructuring Services
a. analyze various restructuring scenarios and the potential
impact of these scenarios on the value of the Debtors and the
recoveries of those stakeholders impacted by the restructuring;
b. provide strategic advice with regard to restructuring or
refinancing the Debtors' obligations;
c. provide financial advice and assistance to the Debtors in
developing a restructuring;
d. provide financial advice and assistance to the Debtors in
structuring any new securities to be issued under a restructuring;
and
e. assist the Debtors or participate in negotiations with
entities or groups affected by the restructuring.
* Financing Services
a. provide financial advice to the Debtors in structuring and
effecting a financing, identify potential investors and, at the
Debtors' request, contact and solicit such investors; and
b. assist in the arranging of a financing, including
identifying potential sources of capital, assisting in the due
diligence process, and negotiating the terms of any proposed
financing, as requested.
* Sale Services
a. provide financial advice to the Debtors in structuring,
evaluating and effecting a sale, identify potential acquirers and,
at the Debtors' request, contact and solicit potential acquirers;
and
b. assist in arranging and executing a sale, including
identifying potential buyers or parties, assisting in the due
diligence process, and negotiating the terms of any proposed sale,
as requested.
Perella will be compensated for its services as follows:
a. Monthly Fee. A monthly financial advisory fee of $150,000
payable in advance on each first day of the month; provided that
(i) 100% of the first two monthly Fees shall be creditable against
the restructuring fee and (ii) $100,000 of each full monthly fee
paid thereafter shall be creditable against the restructuring fee.
b. Restructuring Fee. Upon consummation or, if earlier,
approval by the bankruptcy court, of a restructuring, the Debtors
will promptly pay Perella $1.5 million.
c. Sale Process Fee. Upon the earlier of (i) conclusion of
the sale auction, (ii) cancellation of the auction, subject to the
carve out, or (iii) approval by the bankruptcy court of a sale, the
Debtors will promptly pay Perella $1 million; provided, however,
that 75% of such fee shall be fully creditable (to the extent paid
and without duplication) against the restructuring fee.
d. Sale Incentive Fee. An amount equal to 0.50% of the
"transaction value,", payable upon consummation of a sale.
e. Financing Fee. Payable for each financing in an amount
equal to the greater of (a) $250,000 and (b) (i) 1.0% of all gross
proceeds from the issuance of any new debt by the Debtors, plus
(ii) 4.0% of all gross proceeds from the issuance of any new equity
or new equity-linked security by the Debtors, in each case payable
upon the closing of any such financing. In the event 100% of such
financing is provided by Tribeca, a controlled affiliate or managed
fund, then: (i) if the Debtors have requested that Perella engage
in a process to market any of their securities to third parties
with respect to such financing, then the financing fee applied to
the gross proceeds received from Tribeca, its controlled affiliate
or managed fund shall be 50% of the financing fee that would be
otherwise payable.
In the 90 days prior to the petition date, the Debtors paid
$150,000 in fees and $15,898.97 in expenses to the firm for
pre-bankruptcy services rendered and expenses incurred.
Kevin Cofsky, a partner at Perella, disclosed in court filings that
the firm is "disinterested" within the meaning of Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Kevin M. Cofsky
Perella Weinberg Partners LP
767 Fifth Avenue
New York, New York 10153
Phone: 212.287.3200
Fax: 212.287.3201
About Hartshorne Holdings
Hartshorne Holdings, LLC and affiliates are engaged in the
production and sale of thermal coal through the operation of the
Poplar Grove Mine, which is part of the Buck Creek Complex located
in the Illinois Coal Basin in Western Kentucky. The Buck Creek
Complex includes two mines: (i) the operating Poplar Grove Mine,
and (ii) the permitted, but not constructed, Cypress Mine.
On Feb. 20, 2020, Hartshorne Holdings, LLC and three affiliates
sought Chapter 11 bankruptcy protection (Bankr. W.D. Ky. Lead Case
No. 20-40133).
Hartshorne Holdings was estimated to have $50 million to $100
million in assets and liabilities as of the bankruptcy filing.
The Hon. Thomas H. Fulton is the case judge.
The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy
counsel; Frost Brown Todd LLC as local counsel; FTI Consulting,
Inc. as financial advisor; and Perella Weinberg Partners LP as
investment banker. Stretto is the claims agent, maintaining the
page https://cases.stretto.com/hartshorne
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on March 10, 2020. The committee is represented by
Dentons Bingham Greenebaum LLP and Whiteford Taylor Preston, LLP.
HARTSHORNE HOLDINGS: Taps Squire Patton as Legal Counsel
--------------------------------------------------------
Hartshorne Holdings, LLC received approval from the U.S. Bankruptcy
Court for the Western District of Kentucky to hire Squire Patton
Boggs (US) LLP as its legal counsel.
Squire Patton will provide these services to Hartshorne and its
affiliates in connection with their Chapter 11 cases:
(a) advise the Debtors of their powers and duties in the
continued management and operation of their businesses and
property;
(b) attend meetings and negotiate with representatives of
creditors and other parties, and advise the Debtors on the conduct
of the cases, including all of the legal and administrative
requirements of operating in Chapter 11;
(c) assist the Debtors in the preparation of their schedules
of assets and liabilities and statements of financial affairs;
(d) advise the Debtors in connection with any contemplated
sales of assets or business combinations;
(e) advise the Debtors in connection with any necessary cash
collateral and postpetition financing arrangements and negotiate
and draft documents relating thereto;
(f) advise the Debtors on matters relating to the evaluation
of the assumption, rejection or assignment of unexpired leases and
executory contracts;
(g) advise the Debtors with respect to legal issues arising in
or relating to their ordinary course of business, including
attending senior management meetings and meetings of the board of
directors;
(h) take all necessary actions to protect and preserve the
Debtors' estates, including the prosecution of actions on their
behalf, the defense of actions commenced against them, negotiations
concerning all litigation in which the Debtors are involved and
evaluating and objecting to claims filed against the Debtors'
estates;
(i) prepare legal papers;
(j) negotiate and prepare a plan of reorganization, disclosure
statement and all related agreements and documents and take any
necessary actions to obtain confirmation of the plan;
(k) attend meetings with third parties and participate in
negotiations;
(l) appear before the bankrupty court and any appellate
courts;
(m) represent the interests of the Debtors with respect to all
matters involving the Office of the United States Trustee; and
(n) perform all other necessary legal services in connection
with the cases, including real estate, financial services,
regulatory, environmental, labor, pension and employee benefits,
tax, corporate and intellectual property matters.
The firm's hourly rates range from $260 for new associates to
$1,400 or higher for its most senior partners, and from $80 for new
legal assistants to $465 for experienced senior paralegals, with
most non-attorney billing rates falling within the
range of $80 to $310 per hour.
The attorneys and paralegal expected to provide the services are:
Stephen Lerner Partner $1,240 per hour
Norman Kinel Partner $1,095 per hour
Nava Hazan Partner $960 per hour
Travis McRoberts Senior Associate $880 per hour
Maura McIntyre Associate $460 per hour
Kyle Arendsen Associate $460 per hour
Sarah Conley Senior Paralegal $315 per hour
Squire Patton is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Stephen
Lerner, Esq., at Squire Patton, disclosed that the firm did not
agree to a variation of its standard or customary billing
arrangements for its employment with the Debtors, and that no
professional at the firm varied his rate based on the geographic
location of the Debtors' bankruptcy cases.
Mr. Lerner also disclosed that the firm has worked closely with the
Debtors on developing an estimated budget and staffing plan for
approximately the first four months of the Debtors' bankruptcy
proceedings.
Squire Patton was retained on Jan. 16, 2020. The firm's billing
rates and material financial terms for the pre-bankruptcy period
are the same in all respects as the billing rates and material
financial terms for the post-petition period.
Squire Patton can be reached through:
Stephen D. Lerner, Esq.
Squire Patton Boggs (US) LLP
201 E. Fourth St., Suite 1900
Cincinnati, Ohio 45202
Phone: +1 513 361 1200/ +1 513 361 1220
Fax: +1 513 361 1201
Email: squirepattonboggs.com
stephen.lerner@squirepb.com
About Hartshorne Holdings
Hartshorne Holdings, LLC and affiliates are engaged in the
production and sale of thermal coal through the operation of the
Poplar Grove Mine, which is part of the Buck Creek Complex located
in the Illinois Coal Basin in Western Kentucky. The Buck Creek
Complex includes two mines: (i) the operating Poplar Grove Mine,
and (ii) the permitted, but not constructed, Cypress Mine.
On Feb. 20, 2020, Hartshorne Holdings, LLC and three affiliates
sought Chapter 11 bankruptcy protection (Bankr. W.D. Ky. Lead Case
No. 20-40133).
Hartshorne Holdings was estimated to have $50 million to $100
million in assets and liabilities as of the bankruptcy filing.
The Hon. Thomas H. Fulton is the case judge.
The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy
counsel; Frost Brown Todd LLC as local counsel; FTI Consulting,
Inc. as financial advisor; and Perella Weinberg Partners LP as
investment banker. Stretto is the claims agent, maintaining the
page https://cases.stretto.com/hartshorne
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on March 10, 2020. The committee is represented by
Dentons Bingham Greenebaum LLP and Whiteford Taylor Preston, LLP.
HEATING & PLUMBING: Allowed to Use Cash Collateral Until April 15
-----------------------------------------------------------------
Judge Thomas B. McNamara of the U.S. Bankruptcy Court for the
District of Colorado granted Heating and Plumbing Engineers, Inc.'s
unopposed motion to extend use of cash collateral in accordance
with the Agreed Interim Order. The Debtor may use cash collateral
through and including April 15, 2020.
A copy of the Order is available for free at https://is.gd/JWNPf5
from PacerMonitor.com.
About Heating & Plumbing Engineers
Founded in 1947, Heating & Plumbing Engineers, Inc., a mechanical
contractor, provides HVAC sheet metal, plumbing, and piping systems
services in Colorado.
Heating & Plumbing Engineers filed a voluntary petition pursuant to
Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case
No.19-16183) on July 19, 2019. In the petition signed by CEO
William T. Eustace, the Debtor disclosed $13,845,361 in assets and
$14,934,602 in liabilities. Lee M. Kutner, Esq., at Kutner Brinen,
P.C., is the Debtor's counsel.
HIGHLAND CAPITAL: Court Denies Bid for Chapter 11 Trustee
---------------------------------------------------------
Bankruptcy Judge Stacey G. Jernigan of the U.S. Bankruptcy Court
for the Northern District of Texas held that no cause exists under
11 U.S.C. Section 1104(a)(1) for the appointment of a chapter 11
trustee in the Highland Capital Management, L.P., case, and that
the relief requested in the U.S. Trustee's Motion is not in the
best interests of the Debtor's estate or parties in interest for
purposes of 11 U.S.C. Section 1104(a)(1).
It is ordered that:
1. The motion to appoint a Chapter 11 trustee is denied.
2. Notwithstanding any stay under applicable rules, this Order
shall be effective immediately upon entry.
3. The Court shall retain jurisdiction over all matters
arising from or related to the interpretation and implementation of
this Order.
About Highland Capital Management
Highland Capital Management LP was founded by James Dondero and
Mark Okada in Dallas in 1993. Highland Capital is the world's
largest non-bank buyer of leveraged loans in 2007. It also manages
collateralized loan obligations. In March 2007, it raised $1
billion to buy distressed loans. Collateralized loan obligations
are created by bundling together loans and repackaging them into
new securities.
Highland Capital Management, L.P., sought Chapter 11 protection
(Bank. D. Del. Case No. 19-12239) on Oct. 16, 2019.
In a ruling dated Dec. 4, 2019, Delaware Bankruptcy Judge
Christopher S. Sontchi transferred the venue of the case to the
U.S. Bankruptcy Court for the Northern District of Texas (Bankr.
N.D. Tex. Case No. 19-34054). Judge Stacey G. Jernigan now
presides over the case.
Highland was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
The Debtor's counsel is James E. O'Neill, Esq., at Pachulski Stang
Ziehl & Jones LLP. Foley & Lardner LLP, serves as special Texas
counsel. Kurtzman Carson Consultants LLC is the claims and noticing
agent.
Lawyers at Sidley Austin, LLP, serve as counsel to the Official
Committee of Unsecured Creditors.
HLPG NEWACO: Seeks to Hire Renaissance Consulting as Accountant
---------------------------------------------------------------
North Tampa Anesthesia Consultants, P.A. and HLPG NewAco, LLC,
seeks authority from the US Bankruptcy for the Middle District of
Florida to employ Renaissance Consulting & Development, LLC, as
accountant and bookkeeper.
The Debtor requires Renaissance Consulting to:
a. provide accounting services to the Debtor's in connection
with this Chapter 11 case and the Debtor's emergence from Chapter
11 as required by the Debtor from time to time;
b. assist with the Debtor's monthly reporting requirements;
and
c. perform such other functions as requested by the Debtor or
its counsel.
Renaissance Consulting is disinterested as such term is defined by
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Kevin E. Riggs, MBA, CPA, EA
Renaissance Consulting & Development, LLC
5331 Primrose Lake Circle, Suite 228
Tampa, FL 33647
Phone (813) 435-5585
Fax (813) 464-7830
About HLPG Newaco, LLC
HLPG Newaco, LLC, based in Tampa, FL, filed a Chapter 11 petition
(Bankr. M.D. Fla. Case No. 20-02102) on March 10, 2020. In the
petition signed by Gabriel Perez, manager, the Debtor was estimated
to have $500,000 to $1 million in assets and $1 million to $10
million in liabilities. Angelina E. Lim, Esq., at Johnson Pope
Bokor Ruppel & Burns, LLP, serves as bankruptcy counsel.
HOLCOMB ACQUISITIONS: Unsecureds to Recover 14% in Plan
-------------------------------------------------------
Holcomb Acquisitions, Inc., has proposed a Plan of Reorganization
Dated March 16, 2020.
General unsecured creditors in Class XI will receive a distribution
of no less than 14% of their allowed claims, to be distributed over
five years.
Class III TC Investments LLC holds a "superpriority" claim in the
amount of $100,000. TC will waive any Payments to which it is
entitled under this Plan, waives its "super priority" status
pursuant to 11 U.S.C. Sec. 364(c) as set forth in the Interim Order
Authorizing Debtor to Incur Unsecured Debt entered by the Court on
Nov. 12, 2019 and further waives and cancels any amounts due under
the Note to which the Debtor and TC are parties.
Class IX Strategic Funding Source, Inc., is owed $101,479. The
Allowed Secured Claim of SFS is fully secured and as such, will be
paid in full in equal monthly installment, including interest at
the rate of 7.0% per annum. The estimated monthly payment to SFS
is $2,009.
Class XI General Unsecured Claims are estimated to total
$1,172,926. The Debtor will disburse no less than $28,000 per
calendar year to each holder of an Allowed General Unsecured Claim,
to be paid on a pro rata basis, with the first payment due on or
before Dec. 31, 2020 and on the same date for consecutive years
thereafter for a total of five years.
Class XIII Insider Claims total $744,252, which include monies owed
to Nancy Holcomb and Marcus Holcomb. The Insider Claims of Nancy
Holcomb and Marcus Holcomb shall be voluntarily subordinated to all
General Unsecured Claims and shall be considered as part of the new
value provided by TC Investments, Inc.
The Class XIV Equity Security Holder, Nancy Holcomb, is the sole
member of this Class, owning a 100% interest in the Debtor as of
the Petition Date. Nancy Holcomb's shareholder interest shall be
cancelled as of the Effective Date of the Plan. Ms. Holcomb will
not receive any payments, distribution, property or other valuable
consideration pursuant to the Plan.
This Plan of Reorganization contemplates payments to the various
classes of creditors using income derived from the continued
operations of the Debtor's business.
A full-text copy of the Disclosure Statement dated March 16, 2020,
is available at https://tinyurl.com/uo742xr from PacerMonitor.com
at no charge.
Attorney for the Debtor:
Sammatha K. Brumbaugh
Ivey, McClellan, Gatton & Siegmund, LLP
Post Office Box 3324
Greensboro, North Carolina 27402
Telephone: (336) 274-4658
Facsimile: (336) 274-4540
About Holcomb Acquisitions
Holcomb Acquisitions, Inc., which operates under the name Toys &
Co., is a retailer of toys, games, hobby, and craft kits.
Holcomb sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. M.D.N.C. Case No. 19-11233) on Nov. 7, 2019. In the
petition signed by its secretary, Marcus Holcomb, the Debtor
disclosed a total of $223,359 in assets and $2,372,587 in debt.
Samantha K. Brumbaugh, Esq., at IVEY, MCCLELLAN, GATTON & SIEGMUND,
LLP, is the Debtor's counsel.
II-VI INC: S&P Downgrades ICR to 'B+' on Macroeconomic Weakness
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on II-VI Inc.
to 'B+' from 'BB-'. Concurrently, S&P lowered its issue-level
ratings on II-VI's senior secured debt to 'B+' from 'BB-' and its
notes to 'B' from 'B+'.
"The downgrade reflects our expectation of a significant miss on
revenues for calendar 2020 from what was expected a year ago (at
the time of the Finisar transaction S4 filing in January 2019),
driven by weaker demand from the company's Datacom and Consumer end
markets, business disruption from COVID-19 during the March 2020
quarter, and our expectations for demand weakness across the
semiconductor industry during calendar year 2020. While we believe
in the growth opportunities available to II-VI, we believe the
growth timeline is now extended to two years, especially in 3D
sensing and electric and autonomous vehicles," S&P said.
The stable outlook reflects S&P's view that despite near-term
weakness in performance due to a significant macroeconomic shock,
the company's long-term growth vectors are intact and the company
will continue to generate positive free cash flow in fiscal 2020
and fiscal 2021.
"We would lower the rating if projected growth in II-VI's laser or
photonics segments does not materialize, causing leverage to remain
above the 5.5x area. This could happen if we see demand softness
for II-VI's products or supply disruption that extends into the
second half of calendar 2020 and 2021," S&P said.
"We could raise the rating if the company can deliver consistent
performance, in line with its guidance, manage through current
macroeconomic uncertainty such that S&P Global Ratings' adjusted
net leverage remains at or below the 4x area," S&P said.
JAGUAR HEALTH: Incurs $38.5 Million Net Loss in 2019
----------------------------------------------------
Jaguar Health, Inc., filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net loss of
$38.54 million on $5.77 million of total revenue for the year ended
Dec. 31, 2019, compared to a net loss of $32.15 million on $4.42
million of total revenue for the year ended Dec. 31, 2018.
As of Dec. 31, 2019, the Company had $36.41 million in total
assets, $15.84 million in total liabilities, $9.89 million in
series A redeemable convertible preferred stock, and $10.67 million
in total stockholders' equity.
The Company, since its inception, has incurred recurring operating
losses and negative cash flows from operations and has an
accumulated deficit of $133.0 million as of Dec. 31, 2019. The
Company expects to incur substantial losses and negative cash flows
in future periods. Further, the Company's future operations are
dependent on the success of the Company's ongoing development and
commercialization efforts, as well as the securing of additional
financing and generating positive cash flows from operations.
There is no assurance that the Company will have adequate cash
balances to maintain its operations. In addition, as a result of
the recent outbreak of novel COVID-19, the Company may experience
disruptions in the fiscal year 2020 and beyond that could severely
impact its supply chain, ongoing and future clinical trials and
commercialization of Mytesi.
Jaguar said, "Although the Company plans to finance its operations
and cash flow needs through equity and/or debt financing,
collaboration arrangements with other entities, license royalty
agreements, as well as revenue from future product sales, the
Company does not believe its current cash balances are sufficient
to fund its operating plan through one year from the issuance of
these consolidated financial statements. The Company has an
immediate need to raise cash. There can be no assurance that
additional funding will be available to the Company on acceptable
terms, or on a timely basis, if at all, or that the Company will
generate sufficient cash from operations to adequately fund
operating needs. If the Company is unable to obtain an adequate
level of financing needed for short-term operations and the
long-term development and commercialization of its products, the
Company will need to curtail planned activities and reduce costs."
Mayer Hoffman McCann P.C., in San Francisco, California, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated April 2, 2020 citing that the
Company has experienced losses since inception, significant cash
used in operations, and is dependent on future financing to meet
its obligations and fund its planned operations. These conditions
raise substantial doubt about its ability to continue as a going
concern.
A full-text copy of the Form 10-K is available for free at:
https://is.gd/hoIRqD
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health/-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
Its wholly-owned subsidiary, Napo Pharmaceuticals, Inc., focuses on
developing and commercializing proprietary human gastrointestinal
pharmaceuticals for the global marketplace from plants used
traditionally in rainforest areas. Jaguar Health's principal
executive offices are located in San Francisco, California.
JAVO BEVERAGE: Preliminary Injunction Bid vs CEV, Corey Tossed
--------------------------------------------------------------
District Judge Cathy Ann Bencivengo issued an order denying
Plaintiff Javo Beverage Co., Inc.'s motion for preliminary
injunction against Defendants California Extraction Ventures, Inc.
and Stephen Corey in the case captioned JAVO BEVERAGE CO., INC.,
Plaintiff, v. CALIFORNIA EXTRACTION VENTURES, INC. AND STEPHEN
COREY, Defendants. AND RELATED COUNTERCLAIMS, Case No.
19-CV-1859-CAB-WVG (S.D. Cal.).
Since 1993, Javo has been engaged in the business of coffee, tea,
and botanical extracts, ingredients, and flavor systems, which are
sold across the country. Javo researched and developed a
proprietary process for its manufacture of extracts of coffee, tea,
and other botanicals. Javo alleges it has continually maintained
this process as a proprietary trade secret within the industry.
Defendant Corey was an original co-founder of Javo and its
predecessors, and a principal inventor of Javo's trade secret
extraction process. During his time as an employee and before his
departure from the company, Corey assigned all rights and interests
he may have had in the proprietary process to Javo through his
Employment Agreement ("EA") and the associated Employee
Confidentiality and Invention Assignment Agreement ("CIAA"),
executed on Dec. 5, 2001.
On Jan. 24, 2011, Javo commenced a Chapter 11 bankruptcy proceeding
to, among other things, restructure its debt. In or about August
2011, Javo terminated Corey without cause because of the
elimination of his position due to the restructuring under the
bankruptcy plan.
Kurt Toneys, a former President/CEO of one of Javo's predecessors,
is now involved with Defendant CEV as its current CEO, alongside
Corey who is CEV's current President. Javo alleges that Corey and
CEV misused Javo's trade secrets and other confidential information
to benefit CEV, constituting a breach of Corey's EA and CIAA with
Javo, when Corey improperly disclosed the information in
publicly-available patent applications he filed with the United
States Patent and Trademark Office and assigned to CEV.
On Sept. 26, 2019, Plaintiff Javo filed a complaint alleging
misappropriation of trade secrets, intentional interference with
contractual relations, and seeking declaratory judgment of
ownership of the patents in issue against Defendants CEV and Corey.
Javo primarily asserts, among other things, that Defendant Corey's
filing of the provisional patent application, U.S. Pat. App. No.
62/134,497, in connection with his new business at CEV, disclosed
Javo's confidential and trade secret information that Defendant
Corey researched and invented during his time as a co-founder and
employee at Javo.
On Nov. 14, 2019, Javo filed a motion for preliminary injunction
seeking to prohibit Defendants from further using Javo's trade
secrets and other confidential information in connection with:
CEV's process or selling any products derived from such
information; raising money from investors; filing any new patent
applications; and taking any steps to license or grant to third
parties any rights in any issued patents or pending patent
applications claiming priority to the '497 Provisional Application.
A preliminary injunction is "an extraordinary remedy never awarded
as of right." It is "a device for preserving the status quo and
preventing the irreparable loss of rights before judgment." "The
grant or denial of a motion for a preliminary injunction lies
within the discretion of the district court."
In Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008),
the Supreme Court held that a plaintiff seeking a preliminary
injunction must establish "[1] that he is likely to succeed on the
merits, [2] that he is likely to suffer irreparable harm in the
absence of preliminary relief, [3] that the balance of equities
tips in his favor, and [4] that an injunction is in the public
interest." The Ninth Circuit balances these "Winter factors" using
a "sliding scale" approach, where "a stronger showing of one
element may offset a weaker showing of another." However, Winter
"requires the plaintiff to make a showing on all four prongs."
To state a claim for misappropriation of trade secrets under
California's Uniform Trade Secrets Act ("CUTSA"), a plaintiff must
allege: (1) the existence and ownership of a trade secret, and (2)
misappropriation of the trade secret. A claim for misappropriation
under the Defend Trade Secrets Act ("DTSA") has substantially
similar elements.
Javo alleges that Corey and CEV have misappropriated Javo's trade
secrets by taking Javo's proprietary extraction process, publicly
disclosing it, and falsely claiming it as their own-first by filing
patent applications and now by plotting to unfairly compete with a
new coffee extract product.
The Corey applications are for an apparatus and methods for coffee
bean extraction. A comparison of the disclosures in the patent
applications and accompanying figures, to the asserted proprietary
information set forth in Javo's supporting declaration does not
persuade the Court that the asserted proprietary information was
disclosed.
Although the Corey applications employ the term "grind matrix," the
specific grind combination described as the Javo proprietary method
at 33-34 of the Petersmeyer declaration] does not correspond to the
disclosure regarding coffee bean preparation in the patent
applications. The additional process steps identified by Javo as
its trade secrets further fail to correspond to the patent
disclosures. At this time the Court is not persuaded that Javo has
established a likelihood of success in proving that the proprietary
aspects of Javo's extraction vessel and process were
misappropriated by Corey and CEV and disclosed in the Corey patent
applications.
Even if Javo had established a likelihood of success on the merits,
its motion would still fail because it has not established
irreparable harm. It is well established that monetary injury is
not "irreparable harm." The fact that adequate compensatory damages
will be available in the ordinary course of litigation weighs
heavily against a claim of "irreparable" harm.
To qualify for injunctive relief, Javo must establish that "the
balance of equities tips in [its] favor." As set forth by
Defendants' papers and at the hearing, the Court is persuaded that
in weighing the potential damage to each, the balance of equities
tips in the Defendants' favor. Granting Javo's preliminary
injunction would effectively shut down Defendants' business by
forcing Defendants to cease all operations moving forward.
Where an injunction's reach is narrow and affects only the parties
without impacting non-parties, "the public interest will be at most
a neutral factor in the analysis rather than one that favors
granting or denying the preliminary injunction." Accordingly, this
factor does not weigh in favor of granting or denying Javo's
motion.
A copy of the Court's Order dated Feb. 24, 2020 is available at
https://bit.ly/38IRCfM from Leagle.com.
Javo Beverage Co., Inc., Plaintiff, represented by Alexander Ryan
Miller -- amiller@cooley.com -- Cooley LLP, Erin Carey Trenda --
etrenda@cooley.com -- Cooley LLP, Jeffrey S. Karr --
jkarr@cooley.com -- Cooley Godward Kronish LLP, Joanna Liebes
Hubberts -- jhubberts@cooley.com --Cooley LLP & Steven M. Strauss
-- sms@cooley.com -- Cooley, LLP.
California Extraction Ventures, Inc., Counter Claimant, represented
by John A. Yacovelle , Sheppard Mullin Richter and Hampton LLP,
Jesse A. Salen -- jsalen@sheppardmullin.com -- Sheppard Mullin
Richter & Hampton LLP, Kristin Housh -- khoush@sheppardmullin.com
-- Sheppard, Mullin, Richter & Hampton LLP & Marisa B. Miller --
mmiller@sheppardmullin.com -- Sheppard Mullin Richter & Hampton
LLP.
Javo Beverage Co., Inc., Counter Defendant, represented by
Alexander Ryan Miller -- amiller@cooley.com -- Cooley LLP, Erin
Carey Trenda , Cooley LLP, Jeffrey S. Karr , Cooley Godward Kronish
LLP, Joanna Liebes Hubberts , Cooley LLP & Steven M. Strauss ,
Cooley, LLP.
About Javo Beverage
Vista, California-based Javo Beverage Company, Inc., aka La Jolla
Fresh Squeezed Coffee Co., Inc., manufactures coffee and tea-based
dispensed beverages, drink mixes and flavor systems. It filed for
Chapter 11 bankruptcy protection on Jan. 24, 2011 (Bankr. D. Del.
Case No. 11-10212). Debra A. Riley, Esq., at Allen Matkins Leck
Gamble Mallory & Natsis LLP, serves as the Debtor's bankruptcy
counsel. Robert J. Dehney, Esq., and Matthew B. Harvey, Esq., at
Morris, Nichols, Arsht & Tunnell LLP, is the Debtor's co-counsel.
Valcor Consulting LLC is the Debtor's financial advisor. Kurtzman
Carson Consultants LLC is the Debtor's claims agent. The Debtor
disclosed $14,659,681 in total assets and $26,705,755 in total
debts as of the Petition Date.
The Official Committee of Unsecured Creditors of Javo Beverage
Company Inc. has retained Richards, Layton & Finger P.A. as its
counsel and J.H. Cohn LLP as its financial advisor.
On March 22, 2011, Javo Beverage Company filed an amended plan of
reorganization with the U.S. Bankruptcy Court for the District of
Delaware. On April 28, 2011, the Bankruptcy Court entered an
order confirming the Debtor's Amended Plan. As reported in the TCR
on May 17, 2011, the effective date of the Amended Plan occurred on
May 13, 2011
JT MEAT & GROCERY: Seeks to Hire Platze Swergold as Counsel
-----------------------------------------------------------
JT Meat & Grocery Corp. d/b/a Fine Fare Supermarket, seeks
authority from the US Bankruptcy Court for the Southern District of
New York to employ Platzer, Swergold, Levine, Goldberg, Katz &
Jaslow, LLP, as its counsel.
The firm can be reached through:
a. assist and advise the Debtor regarding the administration
of this case;
b. represent the Debtor before the Court and advise the Debtor
of pending litigation, hearings, motions, and of the decisions of
the Court;
c. assist and analyze all applications, orders and motions
filed with the Court by third parties in these case and advise the
Debtor;
d. attend all hearings conducted pursuant to Sec. 341(a) of
the Bankruptcy Code and represent the Debtor at all examinations;
e. communicate with creditors;
f. assist the Debtor in preparing applications and orders in
support of positions taken by the Debtor, as well as prepare
witnesses and review documents in this regard;
g. confer with any accountants, brokers and consultants
retained by the Debtor and/or any other party-in-interest;
h. assist the Debtor in its negotiations with creditors or
third parties concerning the terms of any proposed plan(s) of
reorganization;
i. prepare and draft plan(s) of reorganization and disclosure
statement(s); and
j. assist the Debtor in performing such other services as may
be in the interest of the Debtor and perform all other services
required by the Debtor.
The firm's current standard hourly rates are:
Clifford A. Katz $645
Teresa Sadutto-Carley $480
Mark Levine $270
Paralegals $225
Platzer Swergold is disinterested as such term is defined in Sec.
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Clifford A. Katz, Esq.
Platzer, Swergold, Levine,
Goldberg, Katz & Jaslow, LLP
475 Park Avenue South, 18th Floor
New York, NY 10016
Tel.: (212) 593-3000
About JT Meat & Grocery Corp.
JT Meat & Grocery Corp. is a privately held company in the grocery
stores business.
JT Meat & Grocery Corp. filed its voluntary petition under Chapter
11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-10060) on
Jan. 10, 2020. In the petition signed by Kevin Tavera, president,
the Debtor estimated $1 million to $10 million in assets and
$500,000 to $1 million in liabilities. Clifford A. Katz, Esq. at
PLATZER, SWERGOLD, LEVINE, GOLDBERG, KATZ & JASLOW, LLP, represents
the Debtor as counsel.
KELLEY'S HONEY: Wins Dismissal of Chapter 11 Case
-------------------------------------------------
Bankruptcy Judge Mark X Mullin of the U.S. Bankruptcy Court for the
Northern District of Texas granted the Emergency Motion of Rhea
Stroope and Kelley's Honey Farm, LP to Dismiss Case.
The parties have announced to the court that they have agreed to
the relief requested in the Motion and the Court is of the opinion
that the agreement should be approved and that the Motion should be
granted. The case is dismissed with prejudice to refiling same for
180 days.
When it filed for bankruptcy, Kelley's Honey Farm, L.P., also filed
a Motion to Appoint Chapter 11 Trustee. The Debtor cited
allegations by Rhea Stroope, the limited partner of the Debtor,
that Jimmy Hutton, the sole owner of Kelley's Honey Farm, LLC, has
siphoned off more than $2 million in limited partnership assets to
fund a private operation of his own, 5 Stone Products, a business
totally unrelated to the honey business with a primary business
location in Alabama.
Stroope also disclosed that many creditors of the Debtor are not
being timely paid.
Two days after the bankruptcy filing, Stroope, the Debtor and
Griffis Honey Farm, Inc., asked the Court to dismiss the case.
They argued that the Court should dismiss the bankruptcy proceeding
and allow them -- including the Debtor -- to proceed with a state
court action and their claims against Hutton and his wife, Trini,
and not reward Hutton to divest the State Court of its control over
the Debtor and allowing Hutton to "re-acquire that which the State
Court kept away from him under the guise of the Bankruptcy Code."
Stroope in May 2019 filed a lawsuit in the 196th District Court for
Hunt County, Texas, styled Rhea Stroope, Limited Partner and
Creditors of Kelley's Honey Farm, L.P. vs. Kelley's Honey Farm, LLC
as General Partner and Jimmy Hutton, Manager and Owner of Kelley's
Honey Farm, LLC, Cause No. 87434, asserting causes of action
against Defendant Jimmy Hutton for conversion of the assets of
Kelley's Honey Farm, LP for his own personal expenses as well as
funding his own business on the side, 5 Stone Products, which
ultimately has filed for protection under the Bankruptcy Code in
Alabama.
The State Court entered an Agreed Injunction wherein Jimmy Hutton,
individually and in his capacity as member of Kelley's Honey Farm,
LLC, the general partner of Kelley's Honey Farm, L.P. and
self-professed general; partner of Kelley Honey Farms, L.P.,
assigned "all management responsibility . . . to a professional
manager in the honey business, Jamie A. Hawley presently CEO of
Fisher Honey as well as being enjoined from entering the packing
plant in Chicota, Texas, using any bank accounts associated with
Kelley Honey Farm, LP and to provide access to the bank records of
Kelley Homey Farm."
In October 2019, Stroope amended his Claims in the Lawsuit, added
Kelley's Honey Farm, LP and Griffis Honey Farm, Inc. as Plaintiffs
and joined Trini Hernandez-Hutton as a Defendant in the State Court
Action alleging that the Hutton Defendants (Jimmy and Trini)
conspired to convert and did convert the assets of Kelley's Honey
Farm, LP and Griffis Homey Farm, Inc. to pay their own personal
expenses and fund their investment in the failed Alabama stone
company.
On January 7, 2020, the State Court entered a Second Injunction in
the State Court Action to clarify that the Agreed Inunction entered
in May 2019 applies now to Griffis Honey Farm, Inc. as plaintiff
and Trini Hernandez-Hutton as Defendant.
According to the Texas Secretary of State, the managing members of
Kelley's Honey, LLC are Stroope and Jimmy Hutton. There is no
record on file with the Texas Secretary of State removing Stroope
as a managing member of Kelley's Honey, LLC. In fact, Jimmy Hutton
signed several Texas Franchise Tax Public Information Report in
2008 and 2010 listing Stroope and himself as members.
Counsel to Stroope et al.:
Patrick J. Schurr, Esq.
SCHEEF & STONE, L.L.P.
2600 Network Boulevard, Suite 400
Frisco, Texas 75034
Telephone: (214) 472-2100
Telecopier: (214) 472-2150
E-mail: Patrick.schurr@solidcounsel.com
About Kelley's Honey Farm, L.P.
Kelley's Honey Farm, L.P. filed for Chapter 11 bankruptcy
protection (Bankr. N.D. Tex. Case No. 20-40529) on Feb. 4, 2020,
listing between $1 million and $10 million in both assets and
liabilities. Judge Mark X. Mullin presides over the case.
Kelley's Honey Farm, LLC is the general partner of the Debtor. The
limited partners are Jimmy Hutton and Rhea Stroope. Jimmy Hutton
is the sole owner of Kelley's Honey Farm, LLC.
The Debtor was represented by:
Joyce W. Lindauer, Esq.
Jeffery M. Veteto, Esq.
Guy H. Holman, Esq.
Joyce W. Lindauer Attorney, PLLC
12720 Hillcrest Road, Suite 625
Dallas, TX 75230
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
KENAN ADVANTAGE: Moody's Cuts CFR to Caa1, On Review for Downgrade
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings Kenan Advantage
Group, Inc., including the Corporate Family Rating to Caa1 from B3,
the Probability of Default Rating to Caa1-PD from B3-PD, the senior
secured rating to B3 from B2 and the senior unsecured rating to
Caa3 from Caa2. All ratings are on review for further downgrade.
The rating downgrades reflect Moody's expectation of deteriorating
conditions in the company's end-markets and more broadly in the
macroeconomic environment, and weak liquidity.
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 transportation
sector is among the sectors that will be significantly affected by
the shock given its sensitivity to consumer demand and sentiment,
and general economic and industrial activity. More specifically,
Kenan's credit profile, including its weak liquidity and exposure
to cyclical markets in North America, has left it vulnerable to
shifts in market sentiment in these unprecedented operating
conditions and Kenan 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
expected impact on Kenan of the breadth and severity of the shock,
the broad deterioration in credit quality it has triggered and its
lingering uncertainty.
In its review, Moody's will consider (i) the company's liquidity,
including its free cash flow profile and ability to address its
near term revolver maturity and revolver availability; (ii)
evolving market conditions, including the potential magnitude of
the impact of the coronavirus outbreak on demand/shipment volumes
and the timing of those declines; (iii) the company's ability to
adapt its costs and capital spending to possibly rapid declines in
demand; and (iv) the prospects to restore credit metrics when
economic activity recovers.
RATINGS RATIONALE
The ratings reflect Kenan's high leverage for its business risk
given its cyclical exposure and weak liquidity profile, including
diminished revolver availability with a very near term maturity
that provides limited cushion to absorb a material deterioration in
operating performance. Annual interest expense approximates $90
million and the cash balance was $56 million at year-end 2019. The
company's markets are competitive and its acquisitive nature
increases event risk as transactions are often funded with debt.
Acquisitive growth is nonetheless expected to be paused in the face
of weakening market conditions amid the coronavirus outbreak. The
ratings consider Kenan's large scale in its transportation markets
and relatively less cyclical fuels delivery and food transport
segments that help limit downside risk. However, the fuels delivery
business is likely to face pressure amid restrictions on movement
to contain the pandemic.
Moody's took the following actions on Kenan Advantage Group, Inc.
Issuer: Kenan Advantage Group, Inc.
Corporate Family Rating, Downgraded to Caa1 from B3; Placed On
Review for further Downgrade
Probability of Default Rating, Downgraded to Caa1-PD from B3-PD;
Placed On Review for further Downgrade
Senior Secured Bank Credit Facilities, Downgraded to B3 (LGD3)
from B2 (LGD3); Placed On Review for further Downgrade
Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3
(LGD5) from Caa2 (LGD5); Placed On Review for further Downgrade
Outlook, changed to Ratings Under Review from Negative
Factors that could lead to an upgrade or downgrade of the ratings:
Upward ratings pressure is unlikely until demand and freight
volumes broadly increase along with general economic activity in
the US and Canada. The ratings could be upgraded with expectations
of sustained earnings growth that results in stronger credit
metrics, including debt/EBITDA to remain below 6x, EBITDA less
capex-to-interest exceeding 1x and better liquidity with sustained
positive free cash flow generation, greater revolver availability
and the maturity extension.
The ratings could be downgraded if Moody's expects liquidity to
deteriorate, including negative free cash flow, a material decline
in the cash balance or failure to extend maturities and increase
the revolver size and availability. The ratings could also be
downgraded with expectations of weakening operating performance
such that Moody's expects interest coverage to materially worsen or
debt/EBITDA to exceed 7x on a sustained basis. Downward ratings
momentum would also be driven by aggressive financial policies.
The principal methodology used in these ratings was Surface
Transportation and Logistics published in May 2019.
Kenan is a provider of liquid bulk transportation and logistics
services to the fuels, chemicals, liquid food and merchant gas
markets. Kenan offers transportation services throughout the U.S.
and in Canada using primarily a dedicated contract carriage model.
Revenues were approximately $1.7 billion for the fiscal year ended
December 31, 2019. Kenan is owned by OMERS Private Equity, a
manager of the private equity investments of Canadian pension fund,
Ontario Municipal Employees Retirement System (OMERS).
KESTRA ADVISOR: S&P Lowers ICR to 'B' on Rate Cuts; Outlook Stable
------------------------------------------------------------------
S&P Global Ratings said it lowered its issuer credit and senior
secured debt ratings on Kestra Advisor Services Holdings A Inc.
(Kestra) to 'B' from 'B+'. S&P also removed the ratings from
CreditWatch, where it placed them with negative implications on
March 18, 2020. The outlook is stable.
"The downgrade reflects our expectation for deterioration in
profitability, debt-service capacity, and cushion above the
debt-to-EBITDA leverage covenant on the firm's revolving credit
facility as a result of the COVID-19-related equity market decline
and the recent cuts to the federal funds rate," S&P said.
"The stable outlook reflects our expectation that Kestra's
profitability and debt-service capacity will be lower than we
previously expected but remain adequate under expected market and
interest rate conditions. It further reflects our expectation the
company will maintain adequate liquidity and a comfortable cushion
relative to the leverage covenant on its revolving facility," the
rating agency said.
Over the next 12 months, S&P could lower the rating if it expects:
-- The company's debt-service capacity to materially deteriorate
further;
-- Liquidity to deteriorate, including its ability to access its
revolving facility;
-- The company won't maintain an adequate cushion above the
revolver's leverage covenant; or
-- Kestra will suffer material attrition in financial advisers or
total client assets.
Given the market and economic outlook, there is little chance of an
upgrade over the outlook horizon. Over the longer term, S&P may
raise the ratings if the economic, market, and interest rate
outlook improves or if profitability, debt-service capacity, and
cushion above covenants improves.
KIMBLE DEVELOPMENT: Allowed to Use Cash Collateral on Final Basis
-----------------------------------------------------------------
Judge Douglas D. Dodd of the U.S. Bankruptcy Court for the Middle
District of Louisiana has issued a final order authorizing Kimble
Development of Jackson, L.L.C. to use cash in its bank account and
cash generated by its operations for the disbursements set forth in
the budget.
The approved cash collateral budget provides total operating
expenses of approximately $9,898 covering the period from Feb. 1 to
May 31, 2020.
As adequate protection, First Bank & Trust is granted a first lien
and security interest in the Debtor's post-petition property and
assets with the same description, validity, and priority as the
prepetition lien or security interest held by First Bank. The
Debtor will also make monthly mortgage interest payment to First
Bank in the amount of $7,000.
A copy of the Final Order is available for free at
https://is.gd/2Bt3B1 from PacerMonitor.com.
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.
KRISU HOSPITALITY: Court Denies Chapter 11 Trustee Bid
------------------------------------------------------
The U.S. Bankruptcy Judge in the Northern District of Texas denied
the Motion filed by Manjula Bhakta for appointment of a Chapter 11
Trustee for Krisu Hospitality, LLC.
As reported by the Troubled Company Reporter, Mukesh Bhakta asked
the Bankruptcy Court to order a trustee to take over management of
Krisu Hospitality, LLC.
Krisu Hospitality owns the La Quinta hotel, located in Pampa, Gray
County, Texas. The timing of the Chapter 11 case was driven by a
posted foreclosure sale for Nov. 5, 2019 against the Debtor's
single asset.
The Debtor was the owner and holder of a judgment against Mukesh
Bhakta in the face amount of $3,195,882.17, bearing interest at 5%
per annum from August 31, 2017. The judgment, with post judgment
interest was $3,562,210.13 as of Dec. 16, 2019. Subsequent to the
filing of the petition for relief, the Amarillo Court of Appeals
reversed and remanded the judgment. The $3.5 million judgment
against Mukesh Bhakta were not disclosed in the Debtor's statement
of financial affairs.
But, prior to removal to the Bankruptcy Court as Adversary, Krisu
Hospitality, LLC a was plaintiff in a fraudulent transfer claim.
The DIP received an initial payment in the amount of $50,000
payment from Combine Lodging, LLC and Sunil Chaudhari under the
settlement agreement, payable into the trust account of Briana
Cooper, attorney for the Debtor in the state court cases. The
trust account of Briana Cooper, which held funds in which the
Debtor had a claim was not disclosed in the SOFA.
If those funds are still in the trust account of Briana Cooper,
that was not disclosed in either the Schedules or Statement of
Financial Affairs. The settlement agreement with Combine Lodging,
LLC and Sunil Chaudhari also included a $245,000 promissory note,
secured by a third lien deed of trust. The Debtor also settled
with KenedyExtended Stay, LLC for $10,000.00. The settlement funds
were wired into the trust account of Briana Cooper, attorney for
the DIP in the state court cases.
Notwithstanding the Debtor having the opportunity to fully disclose
all assets and liabilities, the Debtor has not fully disclosed all
his assets and liabilities. While the judgment was on appeal, the
Debtor collected $100,000 from Mukesh Bhakta, who did not
successfully file supersedeas bond against the judgment, the Debtor
will owe back that sum, immediately, to Mukesh Bhakta.
Based on the Schedules and Statement of Financial Affairs, the
Debtor has no way to refund that money to Mukesh Bhakta and will be
in postpetition default on an unsecured claim.
Bhakta claims that being a bad faith filing, the Court should
appoint a Chapter 11 trustee for Krisu Hospitality.
Attorneys for Manjula Bhakta:
Frederic M. Wolfram
THE WOLFRAM LAW FIRM, P.C.
FirstBank Southwest Tower
600 S. Tyler St., Suite 1406
Amarillo, TX 79101-2353
Tel: 806-372-3449
Fax: 806-372-3324
E-mail: eric@wolframlaw.com
About Krisu Hospitality
Krisu Hospitality, LLC, is a Single Asset Real Estate (as defined
in 11 U.S.C. Section 101(51B)). Krisu Hospitality sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Tex. Case No. 19-20347) on Nov. 4, 2019, disclosing assets of less
than $50 million and debt under $10 million. Judge Robert L. Jones
is assigned to the case. SWINDELL LAW FIRM is the Debtor's
counsel.
L BRANDS: S&P Lowers ICR to 'B+' on Expected Weak Demand
--------------------------------------------------------
S&P Global Ratings lowered all ratings on Columbus, Ohio-based L
Brands Inc., including its issuer credit rating to 'B+' from
'BB-'.
"The downgrade reflects our view of Bath & Body Works' (BBW)
weakened earnings prospects. L Brands recently announced temporary
closure of all its stores in the U.S. and Canada from March 17
through an unspecified date. We believe closures could extend
further given the increasingly drastic actions governments are
taking to contain the rapid rise in new COVID-19 cases, temporarily
elevating cash burn. BBW's online channel, with decent penetration
(15%-20% of annual sales), remains operational and could modestly
offset some impact of closed stores. Still, we believe consumer
demand for discretionary merchandise, including personal care and
home fragrance products, sold by BBW will be depressed over the
next few quarters as confidence rapidly deflates from mounting
uncertainty over the severity and duration of the pandemic. In
addition, we expect consumers to trade down to similar,
lower-priced products offered by mass merchandisers, during an
economic slowdown further depressing BBW's earnings and cash
flows," S&P said.
The negative outlook reflects the heightened uncertainty regarding
the impact of the coronavirus pandemic and impending recession on L
Brands' credit metrics. A prolonged store closure, coupled with a
slowdown in consumer spending could affect the company's ability to
recover operationally.
"We could lower the ratings if profit declines and cash flow
shortfall are greater than our forecast, if we believe the company
will have difficulties securing a waiver or amendment to its credit
agreement under adequate terms, or if we expect credit metrics to
be sustained around 5x. We could also lower the rating if
competitive pressures heighten and the company loses market share,
leading us to view its competitive standing less favorably," S&P
said.
"We could revise the outlook to stable if the impact of the
pandemic is less severe than we currently anticipate and the
company is able to quickly recover from the impact. Under this
scenario, L Brands' sales and earnings would begin to rebound later
this year and we would anticipate debt to EBITDA well below 5x on a
sustained basis," the rating agency said.
LIVINGSTON INTERNATIONAL: S&P Alters Outlook to Negative
--------------------------------------------------------
S&P Global Ratings revised its outlook on Livingston International
Inc. to negative from stable and affirmed its ratings including its
'B-' long-term issuer credit rating on the company.
"We expect Livingston's credit metrics to be weaker in 2020 than
we'd previously anticipated as deterioration in global economic
conditions lead to lower trade volumes. Livingston provides customs
brokerage and compliance services in North America, for which
demand is driven in part by trade volumes that we expect will
decline this year. This reflects our view that the U.S. has fallen
into recession due in large part to the effects of the COVID-19
pandemic. We also assume economic activity in Canada will decline
meaningfully spurred by lower crude oil prices and effects from
COVID-19. We assume a U-shaped recovery for the economy in the
second half of 2020, but the path and severity of the pandemic will
dictate when the rebound will start, which remains highly uncertain
at present," S&P said.
"In this weaker economic environment, we forecast Livingston's
adjusted EBITDA to be 20%-30% lower than we previously expected in
2020, with near-breakeven FOCF generation and adjusted FFO-to-cash
interest coverage approaching 1.5x. In our view, the company's
operating cash flow is barely sufficient to cover its fixed
charges, leaving very little room for Livingston to underperform
against our forecast before we would consider its capital structure
unsustainable," S&P said.
The negative outlook reflects S&P's view that the likelihood of a
downgrade has increased given its expectation for Livingston to
generate near break-even FOCF this year with adjusted FFO-to-cash
interest coverage approaching 1.5x. In S&P's view, the company's
operating cash flow is barely sufficient to cover its fixed
charges, leaving very little room for Livingston to underperform
against S&P's forecast before the rating agency would consider the
company's capital structure unsustainable. The negative outlook
also reflects S&P's uncertainty about the longevity and severity of
the COVID-19 outbreak and the effects it will have on Livingston's
operations.
"We could lower our ratings within the next 12 months if earnings
trend weaker than we expect, potentially contributing to negative
FOCF or adjusted FFO-to-cash interest coverage below 1.5x. This
scenario could occur if the recession we anticipate in North
America is deeper and longer than we currently expect, leading us
to conclude that Livingston's financial commitments are
unsustainable in the long term," S&P said.
"We could revise our outlook on Livingston to stable within the
next 12 months if the economy is in a firm recovery following the
effects of the COVID-19 pandemic. In this scenario, we would likely
expect Livingston to generate positive annual organic revenue
growth and improving adjusted EBITDA margins that contribute to
positive annual FOCF and adjusted FFO-to-cash interest coverage
above 1.5x over the next couple of years," the rating agency said.
LOGIX INTERMEDIATE: S&P Downgrades ICR to 'CCC'; Outlook Negative
-----------------------------------------------------------------
S&P Global Ratings lowered all of its ratings on Logix Intermediate
Holding Corp. by two notches, including its issuer credit rating,
to 'CCC' from 'B-', to reflect the increased likelihood of a
default or distressed exchange over the next year.
"The downgrade reflects our view that Logix Intermediate Holding
Corp.'s liquidity position will continue to deteriorate, given our
expectation for revenue and EBITDA declines stemming from the
economic impact of the coronavirus pandemic. Even with lower
capital spending, Logix will likely generate negative free
operating cash flow (FOCF) in 2020, which will require some form of
external liquidity support over the next 12-months. Logix's
liquidity is limited, with just $5 million available under its
revolver and $3 million of cash on balance sheet as of Dec. 31,
2019. Furthermore, we believe that Logix could breach its
first-lien net leverage maintenance covenant unless there is an
equity infusion or an amendment to its credit agreement," S&P
said.
The negative outlook reflects S&P's view that Logix is vulnerable
to nonpayment of its financial obligations over the next year,
given the adverse economic conditions and limited liquidity
cushion.
"We could lower the rating if the coronavirus and resultant
recession lead to a significant deterioration in FOCF, such that we
believe a default or restructuring is likely within six months.
This could occur if Logix's SMB customer base scales back
operations or goes out of business," S&P said.
"We could raise the rating one notch if EBITDA declines stabilize
and Logix can improve its liquidity position. This would most
likely result from an equity infusion from the company's sponsor.
Because we expect leverage to be about 8x for the next couple of
years, a two-notch upgrade is highly unlikely in the near term.
Furthermore, an upgrade would be based on our expectation that
Logix would not pursue a distressed exchange, which we would view
as tantamount to a default," the rating agency said.
LONGHORN JUNCTION: Court Confirms Chapter 11 Plan
-------------------------------------------------
Longhorn Junction Land and Cattle Company, LLC, and SC Williams,
LLC, having:
a. filed on March 6, 2020, the Modified First Amended Joint Plan
of Reorganization and on Dec. 9, 2019, the First Amended Disclosure
Statement;
b. distributed solicitation materials beginning on or about Dec.
10, 2019;
c. filed on March 6, 2020, the ballot summary identifying those
holders of claims accepting or rejecting the Plan;
Judge Tony M. Davis ordered that the Plan is confirmed.
The Court ruled that the Plan complies with all applicable
provisions of section 1129 of the Bankruptcy Code as follows.
As reported in the Troubled Company Reporter, Longhorn Junction
Land and Cattle Company, LLC and SC Williams, LLC, filed a Joint
Chapter 11 Plan that contemplates the sale of tracts of property to
pay off claims.
A full-text copy of the First Amended Joint Disclosure Statement
dated December 9, 2019, is available at https://tinyurl.com/qqmjgoh
from PacerMonitor.com at no charge.
A full-text copy of the order confirming the Plan dated March 16,
2020, is available at https://tinyurl.com/yx3zrtfy from
PacerMonitor.com at no charge.
Attorney for the Debtors:
Ron Satija
HAJJAR PETERS LLP
3144 Bee Caves Rd
Austin, Texas 78746
Tel: (512) 637-4956
Fax: (512) 637-4958
E-mail: rsatija@legalstrategy.com
About Longhorn Junction and SC Williams
S.C. Williams, LLC, owns approximately 4.2 acres of land at 5331
Williams Drive at the entrance to the Sun City senior living
development in the City of Georgetown, Williamson County, Texas.
Longhorn Junction Land and Cattle Company, LLC owns approximately
229.16 acres on the southeast intersection of SE Inner Loop an
Interstate 35 (with additional acreage along Blue Springs Blvd and
FM 1460) in City of Georgetown Williamson County, Texas. The
properties are non-income producing properties and so SC Williams
and Longhorn's income is generated from sales of parcels of their
properties. The managing member of both entities is Gregory Hall.
Longhorn Junction and SC Williams sought protection under Chapter
11 of the Bankruptcy Code (Bankr. W.D. Tex. Lead Case No. 19-10883)
on July 2, 2019. At the time of the filing, Longhorn Junction was
estimated to have assets of between $10 million and $50 million and
liabilities of the same range. SC Williams was estimated to have
assets of between $10 million and $50 million and liabilities of
between $1 million and $10 million. The cases are assigned to
Judge Tony M. Davis. The Debtors are represented by Hajjar Peters,
LLP.
LUCID ENERGY: S&P Alters Outlook to Negative, Affirms 'B' ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook on Lucid Energy Group II
Borrower LLC to negative. At the same time, S&P affirmed its 'B'
issuer credit and 'B' issue-level ratings on the company's
first-lien term loan. The '3' recovery rating indicates S&P's
expectation of meaningful (50% to 70%; rounded estimate: 60%)
recovery in the event of default.
Reduced drilling activity in the Permian will likely affect Lucid's
volumes. Many of Lucid's customers including XTO Energy Inc.,
Devon Energy, EOG Resources, Inc., and Concho Resources Inc. have
announced reductions to capital spending. S&P expects most
producers will stay focused in the Permian, but the decline in
drilling activity will likely affect Lucid's volumes especially in
2021. S&P does not know the extent of the volume declines yet but
anticipate it could cause Lucid's leverage to remain elevated for
longer. Lucid has some downside protection given its minimum-volume
commitments which make up between 40% and 50% of volumes.
The negative outlook reflects S&P's view that Lucid could
experience volume declines in late 2020 and 2021 due to reduced
producer drilling in their acreage. While the rating agency expects
adjusted debt to EBITDA to be between 5.5x and 6.0x in 2020, it
could rise above 6.0x in 2021.
"We could consider lowering the rating if we expect debt to EBITDA
to be above 6.5x over the next 12 months, which would likely be due
to lower-than-expected volumes on the system. In addition, if the
company issues incremental debt to finance the expansion projects
or if liquidity deteriorates we could take a negative rating
action," S&P said.
"We could revise the outlook to stable if volumetric declines are
not as severe as currently anticipated or if Lucid is able to
mitigate volumetric declines to maintain debt to EBITDA below 6x in
2021," S&P said.
M M & D HARVESTING: Hires Deborah Holcomb as Bookkeeper
-------------------------------------------------------
M M & D Harvesting, Inc. seeks authority from the US Bankruptcy
Court for the Eastern District of North Carolina to employ Deborah
Holcomb as an insider.
Mrs. Holcomb is the wife of Robert Holcomb, the Debtor's sole
officer and shareholder.
The duties of Mrs. Holcomb include bookkeeping and payroll
services.
The Debtor will pay Mrs. Holcomb a gross weekly salary of $300, for
an annual total gross salary of $15,600 per year. The Debtor also
provides a cell phone which averages $50 per month and is part of
the overall company cell phone plan.
Mrs. Holcomb does not represent any interest adverse to the Debtor
or the estate, according to court filings.
Mrs. Holcomb can be reached at:
M M & D Harvesting, Inc.
385 Roxie Reese Road
Plymouth, NC 27962
About M M & D Harvesting, Inc.
M M & D Harvesting, Inc. is a North Carolina corporation, with its
principal place of business located in Plymouth, North Carolina.
The Debtor has been in the logging and hauling business for over 20
years.
M M & D Harvesting, Inc. filed a voluntary petition seeking relief
under chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No.
20-00841) on Feb. 28, 2020, as a Small Business Subchapter V
Debtor. In the petition signed by Robert M. Holcomb, Sr.,
president, the Debtor estimated $1,473,377 in assets and $1,458,217
in liabilities. Trawick H. Stubbs, Jr., Esq. at STUBBS & PERDUE,
P.A. is the Debtor's counsel.
M M & D HARVESTING: Hires Robert Holcomb as President
-----------------------------------------------------
M M & D Harvesting, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of North Carolina for the continued
employment of Robert Holcomb as president of the company.
The duties of Mr. Holcomb include managing and overseeing the
Debtor's entire operations and financial matters, maintaining
equipment and vehicles, and supervising the employees.
The Debtor will pay Mr. Holcomb a gross weekly salary of $350.77
for an annual total gross salary of $18,240.
Mr. Holcomb does not represent any interest adverse to the Debtor
and its estate, according to court filings.
Mr. Holcomb holds office at:
M M & D Harvesting, Inc.
385 Roxie Reese Road
Plymouth, NC 27962
About M M & D Harvesting, Inc.
M M & D Harvesting, Inc. is a North Carolina corporation, with its
principal place of business located in Plymouth, North Carolina.
The Debtor has been in the logging and hauling business for over 20
years.
M M & D Harvesting, Inc. filed a voluntary petition seeking relief
under chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No.
20-00841) on Feb. 28, 2020, as a Small Business Subchapter V
Debtor. In the petition signed by Robert M. Holcomb, Sr.,
president, the Debtor estimated $1,473,377 in assets and $1,458,217
in liabilities. Trawick H. Stubbs, Jr., Esq. at STUBBS & PERDUE,
P.A. is the Debtor's counsel.
M M & D HARVESTING: Seeks to Hire Stubbs & Perdue as Counsel
------------------------------------------------------------
M M & D Harvesting, Inc. seeks authority from the US Bankruptcy
Court for the Eastern District of North Carolina to employ Stubbs &
Perdue, P.A. as its counsel.
Services Stubbs will render are:
a. undertake any and all steps and actions necessary to
authorize the use of cash collateral pursuant to 11 U.S.C. Sec.
363, 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 11 U.S.C. Sec. 341 and the Status Conference
established by 11 U.S.C. Sec. 1188, and at any other hearing or
conference scheduled in the Bankruptcy Case before the Court
related to the Debtor;
e. attend any meetings, conferences, and negotiations with
representatives of creditors, the Trustee, and other parties in
interest;
f. review and examine, if necessary, any and all transfers
which may be avoided a preferential or fraudulent transfer under
the appropriate provisions of the Bankruptcy Code;
g. take any and all necessary actions to protect and preserve
the Debtor's estate, including the prosecution of actions on the
Debtor’s behalf, the defense of any action commenced against the
Debtor, negotiations concerning all litigation in which the Debtor
is, or may become involved, and objections to any claims filed
against the bankruptcy estate of the Debtor;
h. prepare, on behalf of the Debtor all motions, applications,
answers, orders, reports, and pleadings necessary to the
administration of the bankruptcy estate;
i. prepare, on behalf of the Debtor, any plan of
reorganization, and take any necessary actions on behalf of the
debtor to obtain confirmation of such plan of reorganization;
j. represent the Debtor in connection with any potential
post-petition financing;
k. advise the Debtor in connection with the sale or
liquidation, if applicable, of any assets and property to third
parties;
l. appear before the Court, or any such appellate court, to
protect the interests of the Debtor and the bankruptcy estate;
m. represent the Debtor with respect to any general,
corporate, or transactional 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 Debtor was charged a retainer in the amount of $2,500 plus the
filing fee of $1,717.
Stubbs & Perdue does not hold or represent an interest adverse to
the estate, and is disinterested within the meaning of 11 U.S.C.
Secs. 327 (a) and 1195 of the Bankruptcy Code.
The firm can be reached through:
Trawick H. Stubbs, Jr.
Stubbs & Perdue, P.A.
P.O. Box 1654
New Bern, NC 28563
Tel: (252) 633-2700
Email: tstubbs@stubbsperdue.com
About M M & D Harvesting, Inc.
M M & D Harvesting, Inc. is a North Carolina corporation, with its
principal place of business located in Plymouth, North Carolina.
The Debtor has been in the logging and hauling business for over 20
years.
M M & D Harvesting, Inc. filed a voluntary petition seeking relief
under chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No.
20-00841) on Feb. 28, 2020, as a Small Business Subchapter V
Debtor. In the petition signed by Robert M. Holcomb, Sr.,
president, the Debtor estimated $1,473,377 in assets and $1,458,217
in liabilities. Trawick H. Stubbs, Jr., Esq. at STUBBS & PERDUE,
P.A. is the Debtor's counsel.
MATADOR RESOURCES: S&P Downgrades ICR to 'B-'; Outlook Negative
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Dallas-based
crude oil and natural gas exploration and production (E&P) company
Matador Resources Co. to 'B-' from 'B+'. At the same time, S&P
lowered its issue-level rating on the company's senior unsecured
notes to 'B' from 'BB-'. The '2' recovery rating indicates S&P's
expectation for substantial (70%-90%; rounded estimate: 80%)
recovery of principal in the event of a payment default.
With limited hedging, the collapse in oil prices will materially
hurt Matador's cash flow and leverage metrics.
"We now project the company's FFO to debt will average about
15%-20% over the next two years, with debt to EBITDA of about
4.6x-4.8x, affected by the sharp reduction in our oil price
assumptions. Matador has hedged about 45% of our projected oil
production in 2020 at an average floor price of about $48 per
barrel (bbl), but is unhedged thereafter, leaving the company
susceptible to price volatility amid an uncertain oil price
outlook. Oil accounts for about 60% of the company's total
production and thus profitability is strongly susceptible to moves
in oil prices. S&P Global Ratings recently revised our price
assumption for West Texas Intermediate (WTI) crude oil to $25/bbl
in the remainder of 2020 and $45/bbl in 2021," S&P said.
The negative outlook reflects the risk that S&P could lower the
rating if liquidity deteriorates to a level it would consider to be
less than adequate or if leverage metrics reach an unsustainable
level. The rating agency currently expects FFO to debt will average
15%-20% and debt to EBITDA will average 4.6x-4.8x over the next two
years.
"We could lower the rating if the company's liquidity deteriorated
significantly, which would most likely occur from a reduction to
Matador's RBL size or from material negative FOCF. In addition, we
could lower the rating if leverage metrics deteriorated to an
unsustainable level, including FFO to debt of below 12% with no
clear path to recovery. This would most likely result from crude
oil prices below our current assumptions of $25/bbl in 2020 and
$45/bbl in 2021, or if production falls short of our projections
with no offsetting reduction in capital spending," S&P said.
"We could revise the outlook to stable if we expected the company's
FFO to debt to exceed 20% for a sustained period, while maintaining
adequate liquidity. This would likely require crude oil prices
higher than our current assumption of $25/bbl in the remainder of
2020," S&P said.
MAX FINE FURNITURE: Seeks to Hire JS Whitworth as Attorney
----------------------------------------------------------
Max Fine Furniture & Appliances, Inc. seeks authority from the US
Bankruptcy Court for the Southern District of Texas to employ JS
Whitworth Law Firm, PLLC as its attorney.
Max Fine requires JS Whitworth to:
(a) provide legal advice with respect to Debtor's rights and
duties as debtor-in-possession and continued business operations;
(b) assist, advise and represent the Debtor in analyzing the
Debtor's capital structure, investigating the extent and validity
of liens, cash collateral stipulations or contested matters;
(c) assist, advise and represent the Debtor in post-petition
financing transactions;
(d) assist, advise and represent the Debtor in the sale of
certain assets;
(e) assist, advise and represent the Debtor in the formulation
of a disclosure statement and plan of reorganization and to assist
the Debtor in obtaining confirmation and consummation of a plan of
reorganization;
(f) assist, advise and represent the Debtor in any manner
relevant to preserving and protecting the Debtor's estate;
(g) investigate and prosecute preference, fraudulent transfer
and other actions arising under Debtor's bankruptcy avoiding
powers;
(h) prepare on behalf the Debtor all necessary applications,
motions, answers, orders, reports, and other legal papers;
(i) appear in Court and to protect the interests of the Debtor
before the Court;
(j) assist the Debtor in administrative matters;
(k) perform all other legal services for the Debtor which may
be necessary and proper in these proceedings;
(l) assist, advise and represent the Debtor in any litigation
matters, including, but not limited to, adversary proceedings;
(m) continue to assist and advise the Debtor in general
corporate and other matters related to the successful
reorganization of the Debtor;
(n) provide other legal advice and services, as requested by
the Debtor, from time to time.
The Attorney has agreed to represent Debtor, based on time and
standard billing charges of $300 per hour for attorney time, and
$125 per hour for the bankruptcy legal assistants.
The Attorney represents no interest adverse to Debtor, or to the
estate, according to court filings.
The firm can be reached through:
Jana Smith Whitworth, Esq.
JS WHITWORTH LAW FIRM, PLLC
P.O. Box 2831
McAllen, TX 78502
Phone: (956) 371-1933
Fax: (956) 265-1753
Email: jana@jswhitworthlaw.com
About Max Fine Furniture & Appliances, Inc.
Max Fine Furniture & Appliances, Inc. --
https://www.maxfinefurniture.com/ -- sells a wide selection of
bedroom, living room, dining room, leather, home office, kids
furniture and brand name mattresses. It carries several brands,
including Ashley, Restonic Mattresses, and Best Chair.
Max Fine Furniture & Appliances, Inc., sought Chapter 11 protection
on March 17, 2020 (Bankr. S.D. Tex. Case No. 20-70114). In the
petition signed by Maximo Saenz, president, the Debtor estimates
$6,283,658 in assets and $4,261,778 in liabilities.
Jana Smith Whitworth, Esq., at JS WHITWORTH LAW FIRM, PLLC, is the
Debtor's counsel.
MERCHANT LLC: Seeks to Hire Donnarumma Law as Special Counsel
-------------------------------------------------------------
The Merchant LLC seeks authority from the US Bankruptcy Court for
the District of Connecticut to employ The Donnarumma Law Firm, LLC,
as its special counsel.
Consummation of an executory contract for the purchase of raw land
for development is central to the Debtor's anticipated plan of
reorganization.
Donnarumma Law will represent the Debtor for the special purpose of
completing said transaction, and also in assisting in obtaining
such permits and approvals as may be necessary for such
completion.
Donnarumma Law will charge its customary hourly rate of $300 for
attorney time and $90 for paralegal time.
Donnarumma Law does not represent or hold any interest adverse to
the Debtor or to the estate with respect to the matter on which it
is to be employed, according to court filings.
The firm can be reached through:
Francis M. Donnarumma, Esq.
The Donnarumma Law Firm, LLC
428 Main St S #7
Woodbury, CT 06798
Phone: +1 203-263-6060
About The Merchant LLC
The Merchant LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Conn. Case No. 20-50104) on Jan. 24,
2020, listing under $1 million in both assets and liabilities.
Edward P. Jurkiewicz, Esq. at LAWRENCE & JURKIEWICZ represents the
Debtor as counsel.
METRO-GOLDWYN-MAYER INC: S&P Affirms 'B+' ICR; Outlook Negative
---------------------------------------------------------------
S&P Global Ratings affirmed all its ratings on U.S.–based
Metro-Goldwyn-Mayer Inc. (MGM) including its 'B+' issuer credit
rating. The outlook remains negative.
The coronavirus has delayed MGM's film and television segments,
pushing out theatrical releases and television production. The
company recently decided to delay the release of "No Time To Die",
the 25th installment in the James Bond franchise, for a second
time. The film was scheduled to premiere in April 2020, but is now
scheduled to be released in theaters in November 2020 due to the
anticipated low attendance at the box office during the COVID-19
outbreak in early 2020. In addition, MGM has announced that a
number of its television programs, both scripted and unscripted,
are delaying production through the middle of 2020 in response to
COVID-19 and concerns over the safety of production staff. S&P
acknowledges that these decisions are prudent, but MGM's revenue,
profitability, and cash flows will fall substantially below the
rating agency's prior expectations for 2020. However, S&P also
expects most of the negative impact will be offset by better than
previously expected performance in 2021 due to these timing
shifts.
The negative outlook reflects the risk that the company's leverage
could remain elevated and its cash flows could remain poor through
2021 due to worsening production delays due to COVID-19 or
lower-than-expected profitability for the company's film,
television, and media networks segments. Any underperformance in
MGM's television deliveries and film studio, particularly Bond 25,
could lead to further delays in operating cash flow (OCF)
generation and the company's ability to dramatically reduce
leverage in 2021. Additionally, a downgrade could occur if the
company fails to generate significant return on investment in its
content investments, especially EPIX, which could delay a return to
profitability for its media networks segment.
"We could lower the rating if we don't expect the company to reduce
leverage below 4.75x or generate OCF to debt above 10% by the
middle of 2021. This could happen if the television business does
not grow as expected, the revised strategy for EPIX does not result
in substantially improved cash flow, or if Bond 25 is further
delayed or does not perform in line with prior releases," S&P
said.
"We could revise our outlook back to stable if MGM executes its
strategy and we are confident it will decrease leverage below 4.75x
and grow its OCF to debt above 10% on a sustained basis. This would
likely occur if MGM successfully releases Bond 25 in November 2020,
generates healthy cash flows in its TV segment, and successfully
improves cash generation at EPIX," the rating agency said.
MIAMI AIR INTERNATIONAL: Hires Genovese Joblove as Counsel
----------------------------------------------------------
Miami Air International, Inc., seeks authority from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Genovese Joblove & Battista, P.A., as counsel to the Debtor.
Miami Air International requires Genovese Joblove to:
(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 and properties;
(b) attend meetings and negotiate with representatives of
creditors and other parties-in-interest and advise and
consult on the conduct of the cases, including all of the
legal and administrative requirements of operating in
Chapter 11;
(c) advise the Debtor in connection with any contemplated
sales of assets or business combinations, including the
negotiation of sales promotion, liquidation, stock
purchase, merger or joint venture agreements, formulate
and implement bidding procedures, evaluate competing
offers, draft appropriate corporate documents with respect
to the proposed sales, and counsel the Debtor in
connection with the closing of such sales;
(d) advise the Debtor in connection with post-petition
financing and cash collateral arrangements, provide advice
and counsel with respect to pre-petition financing
arrangements, and provide advice to the Debtor in
connection with the emergence financing and capital
structure, and negotiate and draft documents relating
thereto;
(e) advise the Debtor on matters relating to the evaluation of
the assumption, rejection or assignment of unexpired
leases and executory contracts, including the obligations
of the Debtor under Section 1110 of the Bankruptcy Code;
(f) provide advice to the Debtor with respect to legal issues
arising in or relating to the Debtor's ordinary course of
business including attendance at senior management
meetings, meetings with the Debtor's board of directors,
and advice on employee, workers' compensation, employee
benefits, labor, tax, insurance, securities, corporate,
business operation, contracts, joint ventures,
press/public affairs and regulatory matters;
(g) take all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on
its behalf, the defense of any actions commenced against
the estates, negotiations concerning all litigation in
which the Debtor may be involved and objections to claims
filed against the estate;
(h) prepare on behalf of the Debtor all motions, applications,
answers, orders, reports and papers necessary to the
administration of the estate;
(i) negotiate and prepare on the Debtor's behalf a plan of
reorganization, disclosure statement and all related
agreements and/or documents, and take any necessary action
on behalf of the Debtor to obtain confirmation of such
plan;
(j) attend meetings with third parties and participate in
negotiations with respect to the above matters;
(k) appear before this Court, any appellate courts, and the
U.S. Trustee, and protect the interests of the Debtor's
estate before such courts and the U.S. Trustee; and
(l) perform all other necessary legal services and provide all
other necessary legal advice to the Debtor in connection
with this Chapter 11 case.
Genovese Joblove will be paid at these hourly rates:
Paul J. Battista $675
Mariaelena Gayo-Guitian $550
Heather Harmon $525
Genovese Joblove received a retainer from the Debtor in the amount
of $200,000 on March 19, 2020. On March 24, 2020 prior to the
filing of the voluntary petition commencing this chapter 11 case,
Genovese Joblove applied an amount equal to $110,000 of such
retainer to its pre-petition fees and expenses including an
estimate of those fees and expenses expected to be incurred through
March 23, 2020 along with the Chapter 11 filing fee of $1,717 (the
"Prepetition Payment"). As a result, Genovese Joblove will have a
retainer for this Chapter 11 case in the amount of $90,000, subject
to an adjustment depending on the final reconciliation of
pre-petition fees and expenses against the Prepetition Payment.
Genovese Joblove will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Paul J. Battista, partner of Genovese Joblove & Battista, P.A.,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
Genovese Joblove can be reached at:
Paul J. Battista, Esq.
GENOVESE JOBLOVE & BATTISTA, P.A.
100 Southeast Second Street, 44th Floor
Miami, FL 33131
Tel: (305) 349-2300
Fax: (305) 349-2310
E-mail: pbattista@gjb-law.com
About Miami Air International
Miami Air International, Inc., based in Miami, FL, filed a Chapter
11 petition (Bankr. S.D. Fla. Case No. 20-13924) on March 24, 2020.
In the petition signed by Annette Eckerle, authorized officer, the
Debtor was estimated to have $1 million to $10 million in assets
and $10 million to $50 million in liabilities. The Hon. Jay A.
Cristol oversees the case. Paul J. Battista, Esq., at Genovese
Joblove & Battista, P.A., serves as bankruptcy counsel.
MISSISSIPPI PHOSPHATES: PathForward Okayed as Successor Trustee
---------------------------------------------------------------
Katharine M. Samson, the U.S. Bankruptcy Judge in the Southern
District of Mississippi, has considered the Agreed Motion to
Appoint PathForward Consulting, Inc. as the Successor Trustee for
the MPC Environmental Trust, and said good cause exists for
granting the relief requested in the Motion.
The resignation of Project Navigator Ltd., as Environmental Trustee
of the MPC Environmental Trust, is accepted, and PathForward
Consulting, Inc. is appointed as the Successor Trustee of the MPC
Environmental Trust.
The Court further held that:
1) the form of Deed attached to the Agreed Motion transferring
the Environmental Trust Real Property from Project Navigator Ltd.,
to PathForward Consulting, Inc., is approved;
2) any and all personal property and equipment owned by
Project Navigator Ltd., as Trustee of the MPC Environmental Trust
and any contracts any entered into by Project Navigator Ltd., as
Trustee of the MPC Environmental Trust, as described to the Agreed
Motion is transferred to PathForward Consulting, Inc., as Successor
Trustee of the MPC Environmental Trust; and
3) PathForward Consulting, Inc., shall be bound by any and all
provisions, rights and obligations of the MPC Environmental Trust
Agreement dated July 30, 2015.
Attorneys for the Environmental Trustee of the MPC Environmental
Trust:
Mary W. Koks, Esq.
MUNSCH HARDT KOPF & HARR, P.C.
700 Milam, Suite 2700
Houston, TX 77002
Tel: 713-222-4030
Fax: 713-222-5830
About Mississippi Phosphates
Mississippi Phosphates Corporation was a major United States
producer and marketer of diammonium phosphate ("DAP"), one of the
most common types of phosphate fertilizer. MPC, which was formed as
a Delaware corporation in October 1990, owned a DAP facility in
Pascagoula, Mississippi, which was acquired from Nu-South, Inc., in
its 1990 bankruptcy. Phosphate rock, the primary raw material used
in the production of DAP, was supplied by OCP S.A., a corporation
owned by the Kingdom of Morocco.
The parent, Phosphate Holdings, Inc., was formed in December 2004
in connection with the bankruptcy reorganization of MPC and its
then-parent Mississippi Chemical Corporation, the first fertilizer
cooperative in the United States.
MPC and its subsidiaries, namely Ammonia Tank Subsidiary, Inc., and
Sulfuric Acid Tanks Subsidiary, Inc., sought Chapter 11 bankruptcy
protection (Bankr. S.D. Miss. Lead Case No. 14-51667) on Oct. 27,
2014. Judge Katharine M. Samson was assigned to the cases.
Mississippi Phosphates disclosed in its amended schedules, assets
of $98,949,677 and liabilities of $140,941,276 plus unknown
amounts. Affiliates Ammonia Tank and Sulfuric Acid Tanks each
estimated $1 million to $10 million in both assets and
liabilities.
The Debtors tapped Butler Snow LLP as counsel.
The U.S. Trustee for Region 5 appointed seven creditors of
Mississippi Phosphates Corp. to serve on the official committee of
unsecured creditors. The Committee tapped to retain Burr & Forman
LLP as its counsel.
A liquidating plan was confirmed in the case on Oct. 24, 2016.
MJJW PORTFOLIO: Court Conditionally Approves Disclosure Statement
-----------------------------------------------------------------
Judge Caryl E. Delano has ordered that the Disclosure Statement is
conditionally approved.
The Court will conduct a hearing on confirmation of the Plan,
including timely filed objections to confirmation, objections to
the Disclosure Statement, motions for cramdown, applications for
compensation, and motions for allowance of administrative claims on
April 20, 2020 at 2:00P.M. in Tampa, FL − Courtroom 9A, Sam M.
Gibbons United States Courthouse, 801 N. Florida Avenue.
Parties in interest will submit a written ballot accepting or
rejecting the Plan no later than eight days before the date of the
Confirmation Hearing.
Objections to confirmation will be filed and served no later than
seven days before the date of the Confirmation Hearing.
The Debtor file a ballot tabulation no later than 96 hours prior to
the time set for the Confirmation Hearing.
About MJJW Portfolio
MJJW Portfolio, Inc., owns in fee simple a night club known as Club
1828 in Tampa, Florida, with an appraised value of $730,000. It
also owns in fee simple a six-unit strip mall with an appraised
value of $540,000, also in Tampa, Fla.
MJJW Portfolio sought Chapter 11 protection (Bankr. M.D. Fla. Case
No. 19-08680) on Sept. 13, 2019. In the petition signed by Marlon
Wright, its president, the Debtor listed total assets at $1,270,420
and total liabilities at $384,207. Buddy D. Ford, P.A., is the
Debtor's legal counsel.
MNP INDUSTRIES: Seeks to Hire David W. Steen as Counsel
-------------------------------------------------------
MNP Industries, LLC, d/b/a Miracle Nutritional Products, seeks,
authority from the U.S. Bankruptcy Court for the Middle District of
Florida to employ David W. Steen, P.A., as counsel to the Debtor.
MNP Industries requires David W. Steen to represent the Debtor in
the Chapter 11 bankruptcy proceedings.
David W. Steen will be paid based upon its normal and usual hourly
billing rates.
As of the Petition Date, the Debtor paid David W. Steen the amount
of $12,000 as retainer, inclusive of filing fee.
David W. Steen will also be reimbursed for reasonable out-of-pocket
expenses incurred.
David W. Steen, partner of David W. Steen, P.A., assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their/its estates.
David W. Steen can be reached at:
David W. Steen, Esq.
PO Box 270394
Tampa, FL 33688-0394
Tel: (813) 251-3000
E-mail: dwsteengdsteenpa.com
About MNP Industries, LLC
d/b/a Miracle Nutritional Products
MNP Industries LLC, filed a Chapter 11 bankruptcy petition (Bankr.
M.D. Fla. Case No. 20-02563) on March 25, 2020, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by David W. Steen, Esq., at David W. Steen, P.A.
MOUNTAIN PROVINCE: S&P Cuts ICR to 'CCC+' on Cash Flow Uncertainty
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on
Toronto-based Mountain Province Diamonds Inc. (MPV) and its
issue-level rating on the company's second-lien secured notes to
'CCC+' from 'B-'. The '3' recovery rating on the notes is
unchanged.
"The downgrade reflects our view of the increased risk to MPV's
liquidity position due to the uncertainty associated with the
COVID-19 outbreak. We believe MPV is at risk of depleting its cash
position over the next 12 months and its revolving credit facility
matures in December 2020. The company has postponed its latest
rough diamond sale due to the emergence of COVID-19. It is unknown
to what extent its sales and cash flows will be negatively affected
by additional potential postponements or other negative market
developments this year. We believe MPV's cash flows and liquidity
are highly sensitive to further adverse market developments," S&P
said.
"The company is exploring alternative sales channels but we believe
there is a material risk that it would not be able to sell a
sizable portion of its rough diamond production this year. In
addition, a likely rough diamond oversupply in the latter part of
the year (when the regular sales cycle presumably resumes) along
with S&P Global Ratings' expectation for a global recession could
further pressure already weak prices. For these reasons, we believe
MPV could potentially face a material free cash flow deficit that
significantly depletes its available cash this year," S&P said.
The negative outlook reflects the risk that MPV will generate a
higher-than-expected free cash flow deficit this year that
significantly weakens its cash position. In S&P's view, this could
follow prolonged weakness in diamond market conditions, namely
ongoing sales deferrals related to the COVID-19 outbreak, and
downside pressure on diamond demand and prices. The rating agency
believes this could lead to an increased risk of a liquidity
shortfall or higher likelihood for a distressed exchange of the
company's secured notes due in 2022.
"We could downgrade the company if we foresee a specific default
scenario for MPV over the next 12 months. In this scenario, we
would expect a liquidity shortfall or expectation for the company
to proceed with a distressed exchange of its secured notes. In our
view, this could follow protracted sales delays, demand weakness,
and lower prices that result in an estimated free cash flow deficit
beyond our current expectations, or if MPV's notes trade further
below par," S&P said.
"We could take a positive rating action in the next 12 months, if
we believe the company will generate positive free cash flows and
improve its liquidity position. For this to happen, we would expect
resumption of the company's regular sale cycle and improvement in
diamond market conditions to improve cash flow visibility and
refinancing prospects of its notes maturing December 2022," S&P
said.
MR. TORTILLA: Has Deal to Defer Plan Hearing to April 9
-------------------------------------------------------
Mr. Tortilla, Inc., the United States Trustee and unsecured
creditor, Diana's Mexican Food Products, Inc., stipulated to the
continuance of the hearing on the Debtor's plan to April 9, 2020.
At the hearing on confirmation of the Debtor's Second Amended
Chapter 11 Plan of Reorganization, held on Jan. 23, 2020, the
Debtor requested of the Court a short continuance so that it could
analyze and decide if amending its Petition to make the Subchapter
V election pursuant to the Small Business Reorganization Act, is
warranted.
Since that time, the Debtor and DMFP have engaged in hearty
discussions
related to DMFP's Objection to Confirmation and the treatment of
its claim within the Debtor's Plan. The parties are making headway
but are doubtful that they will be able to conclude their
negotiations before the continued hearings set for March 19, 2020
and have agreed to continue both matters, as set forth below.
The hearing on confirmation of Debtor's Plan and the Chapter 11
Status Conference are continued from March 19, 2020 at 1:00 p.m. to
April 9, 2020 at 1:00 p.m., and the Debtor must file and serve an
updated Status Report at least seven days before the continued
Status Conference.
Attorneys for the Debtor:
Roksana D. Moradi-Brovia
M. Jonathan Hayes
RESNIK HAYES MORADI LLP
17609 Ventura Blvd., Suite 314
Encino, CA 91316
Telephone: (818) 285-0100
Facsimile: (818) 855-7013
E-mail: roksana@RHMFirm.com
jhayes@RHMFirm.com
Attorneys for Diana's Mexican Food Products:
Bernard P. Simons
Christopher O. Rivas
About Mr. Tortilla
Mr. Tortilla, Inc., is a manufacturer of traditional flour tortilla
(fresh or refrigerated) in San Fernando, California. Mr. Tortilla
filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 18-12051) on
Aug. 14, 2018. In the petition signed by Anthony Alcazar,
president, the Debtor was estimated to have $100,000 to $500,000 in
assets and $1 million to $10 million in liabilities. The case is
assigned to Judge Victoria S. Kaufman. Jonathan M. Hayes, Esq., at
Resnik Hayes Moradi LLP, is the Debtor's counsel.
MRO HOLDINGS: S&P Downgrades ICR to 'B' on Expected Lower Demand
----------------------------------------------------------------
S&P Global Ratings lowered its ratings on MRO Holdings Inc. (MROH),
including its issuer credit rating to 'B' from 'B+'. The outlook is
negative.
The negative outlook reflects the possibility that earnings and
cash flow could be weaker than S&P previously expected as a result
of the coronavirus.
MROH's earnings and free cash flow will likely weaken as a result
of the coronavirus. MROH operates as an MRO service provider
mainly to North American airlines. As a result of the coronavirus,
many airlines are cutting flights as demand has fallen. This will
likely result in lower MRO demand as there is less wear and tear on
the planes and as some older planes, which generally require higher
levels of maintenance, likely won't return to services if air
traffic remains low.
"As a result of the lower demand, we expect MROH's earnings and
free cash flow to weaken, resulting in debt to EBITDA likely being
around 5x in 2020 compared to our previous forecast of 3.5x-3.9x,
and we believe there is the potential for additional downside to
our expectations," S&P said.
Environmental, Social, and Governance (ESG) Credit Factors for this
Credit Rating change:
-- Health and Safety Factors
The negative outlook reflects S&P's expectation that MROH's credit
metrics will weaken as a result of lower demand because of the
coronavirus. It now expects debt to EBITDA to be around 5x in
2020.
"We could lower our ratings on the company over the next 12 months
if we believe the impact on earnings and free cash flow from the
coronavirus is greater than we expect, resulting in debt to EBITDA
trending towards 7x or the company has sustained negative free cash
flow," S&P said.
"We could revise our outlook on MROH to stable if the company is
able to maintain debt to EBITDA of around 5x and break-even free
cash flow. This would likely be the result of a
quicker-than-expected recovery in air traffic driving higher
aftermarket demand," the rating agency said.
NASHEF LLC: Hearing on Cash Collateral Use Continued to April 30
----------------------------------------------------------------
Nashef LLC asked the U.S. Bankruptcy Court for the District of
Massachusetts for authorization to use cash collateral,
specifically the revenue generated by its real estate, in order to
fund ongoing operations and life expenses.
The Debtor admitted that these entities may assert cash collateral
lien on rents and proceeds from Debtor's real property at 338 Park
Avenue and 342 West Boylston Street, both in Worcester,
Massachusetts:
(a) Hometown Bank asserts that it is owed approximately
$1,300,000.
(b) Harvard Funding LLC asserts that it is owed approximately
$100,000.
(c) The Internal Revenue Service has a recorded tax lien on
both properties. The tax lien is not against the Debtor but,
rather, against the Debtor's principal and sole stockholder Eyad
Nashef. The amount of the recorded tax lien is $100,254.96.
(d) The Massachusetts Department of Revenue has recorded tax
liens on both properties. The tax liens are not against the Debtor
but, rather, against the Debtor's principal and sole stockholder
Eyad Nashef and against Boston Donuts, Inc. (which is owned by the
same individual who owns the Debtor). The total amount of the
recorded tax liens are approximately $150,000.
(e) The Massachusetts Department of Unemployment Assistance
has a recorded lien on both properties. The lien is not against the
Debtor but, rather, against Boston Donuts, Inc. The amount of the
recorded lien is $20,720.
Bankruptcy Judge Christopher J Panos granted the Debtor's request
subject to the terms and conditions that will be set forth in a
separate order. He has also continued the hearing on the further
use of cash collateral to take place on April 30, 2020 at 10:30
a.m.
Nashef LLC, a privately held company in Fitchburg, Massachusetts,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Mass. Case No. 20-40199) on Feb. 6, 2020. In the petition
signed by Eyad Nashef, manager, the Debtor disclosed $1,559,000 in
liabilities. The Debtor is represented by James P. Ehrhard, Esq.
at Ehrhard & Associates, P.C.
NATIONAL AMUSEMENTS: S&P Lowers ICR to 'B-' on Reduced Liquidity
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on holding
company National Amusements Inc. (NAI) to 'B-' from 'B+' because it
expects the company's liquidity to remain thin for the rest of 2020
due to negative cash flow from extended theater closures and its
limited borrowing capacity after the cancellation of the revolver
at NAI Entertainment Holdings Inc. (NAIEH).
All of S&P's ratings on NAI remain on CreditWatch, where it placed
them with negative implications on March 10, 2020.
NAI has cured its covenant violations by refinancing its $125
revolving credit facility (unrated) and canceling the $75 million
revolver at NAIEH. Therefore, the company will no longer have any
covenants on the $300 million ($261 million outstanding) senior
secured term loan at NAIEH. NAI's refinanced revolver will contain
a minimum collateral covenant based on the existing stock pledge at
NAI, which comprises roughly 3.4 million of ViacomCBS' class A
shares and about 6.2 million of its class B shares. The covenant
will require that the value of the stock pledge remain above at
least 1.5x the amount drawn on the revolver through Nov. 21, 2020,
and above 2.0x after that. As of March 26, 2020, the stock pledge
was worth about $146 million, which would limit the amount the
company could draw under the revolver to approximately $98 million
through November 21 and only about $73 million after that.
Additionally, NAI drew roughly $25 million from the new revolver to
repay the outstanding borrowings under the extinguished revolver at
NAIEH, which further reduces its availability to about $73 million
over the next six months.
S&P intends to resolve the CreditWatch placement as it receives
additional information about the length of the theater closures,
potential updates to the film release slate, and any changes to
ViacomCBS' dividend policy.
"We could lower our issuer credit rating on NAI by multiple notches
if we no longer expect the company to have sufficient liquidity to
withstand the extended theater closures related to the coronavirus
pandemic. Additionally, we could lower our rating if ViacomCBS cuts
its dividend," S&P said.
"While unlikely over the next few months, we could remove our
ratings from CreditWatch and affirm the 'B-' issuer credit rating
if we believe the company will have sufficient liquidity to address
its cash outflows over the next 12 months and there is no risk of
further covenant violations. This would likely require conclusive
knowledge about the length of the theater closures and a commitment
from ViacomCBS that it will not reduce its dividend," the rating
agency said.
NATIONAL QUARRY: Seeks to Hire Davis Forensic as Financial Advisor
------------------------------------------------------------------
National Quarry Services, Inc. and NQS Equipment Leasing Company
seek authority from the US Bankruptcy Court for the Middle District
of North Carolina to employ Davis Forensic Group, LLC as their
financial advisor.
Davis Forensic will provide the following services:
(a) assist the Debtors with drafting working capital
calculations necessary to renew their general contractors license
through the North Carolina Licensing Board for General
Contractors;
(b) assist the Debtors in analyzing which equipment they can
afford to keep pursuant to a Chapter 11 plan of reorganization;
(c) create comprehensive financial projections and provide
analysis regarding the plan; and
(d) create a comparative liquidation analysis for purposes of
the plan.
Davis Forensic will be paid an hourly fee of $245 and a retainer in
the amount of $5,000.
Bert Davis Jr., owner of Davis Forensic, attests that he and his
employees are "disinterested persons" as that term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Bert Davis, Jr.
Davis Forensic Group, LLC
1 Abelia Court
Greensboro, NC 27455
Phone: 336-543-3099
About National Quarry Services and
NQS Equipment Leasing Co.
National Quarry Services, Inc., a full-service rock drilling and
blasting company, 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; and Davis Forensic Group, LLC as their financial
advisor.
NORDAM GROUP: S&P Cuts ICR to 'B' on Coronavirus Ramifications
--------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on NORDAM Group
LLC to 'B' from 'B+'. At the same time, S&P lowered its issue-level
rating on the company's $250 million term loan B to 'B' from 'B+'.
The recovery rating remains '3'.
"NORDAM's credit metrics will be weaker than we previously expected
as a result of the coronavirus, although the magnitude and timing
of the virus' impacts remain uncertain. Lower aircraft
utilization will likely result in lower aftermarket revenues and
business jets are likely to see order deferrals and cancellations
as the crisis continues. NORDAM's maintenance, repair, and overhaul
(MRO) business is almost half of its revenue, with about half of
this segment consisting of commercial aerospace revenues. We expect
the remainder of the MRO segment--cargo and military--to be more
stable. Although the company's business jet exposure has gone down,
it remains significant at about 30% of revenues. We now expect debt
to EBITDA of 4.3x-4.7x in 2020, compared to our previous
expectations of 2.8x-3.2x," S&P said.
S&P's stable outlook on NORDAM reflects its view that, despite the
company's material exposure to commercial aftermarket as well as
business jets, the rating agency expects the company to maintain
debt to EBITDA below 5x and free operating cash flow to be almost
breakeven.
"We could lower the rating on NORDAM within the next 12 months if
we expect debt to EBITDA to increase above 5x and free cash flow is
significantly negative. This could occur due to the effects of the
coronavirus on earnings and cash flow are greater than we expect.
It could also result from the company pursuing debt-financed
acquisitions or shareholder distributions, which we view as less
likely," S&P said.
"Although unlikely, we could raise the rating on NORDAM within the
next 12 months if debt to EBITDA remains below 4x, and free
operating cash flow to debt approaches 5%. This could occur if
there is a quicker-than-expected recovery in air traffic, which
would improve aftermarket demand, or if the impact on the business
jet market is not as severe as we anticipated. This could also
occur if revenue and earnings growth in other parts of the business
are stronger than we have forecasted," the rating agency said.
NSHE CA BULLS: Unsecured Creditors Will be Paid in Full
-------------------------------------------------------
NSHE CA Bulls, LLC (the “Debtor”) is the Debtor in this Chapter
11 bankruptcy case.
Generally speaking, the Debtor's primary asset consists of the real
property located at 6392 Camino de la Costa, La Jolla, CA 92037,
with a present estimated value of $13,000,000.
The Plan proposes that the holders of Secured Claims will retain
their liens in the Real Property and receive payment on account of
their Allowed Secured Claim in an amount by which their Claim is
actually secured by the Real Property. As a practical matter,
because the value of the Real Property exceeds the total amount of
all Secured Claims, all Secured Claims will be fully secured by the
Real Property to the extent they are allowed.
The Plan proposes to pay the holders of Unsecured Claims in full,
with interest.
The source of funds used to pay Claims will either be post-petition
financing from a third-party source, or the sale of the Real
Property. Presently, the Debtor is in negotiations with multiple
third-parties to provide financing. Alternatively, the sale of
Gray/Western Development Company is expected to close in or around
Summer of 2020, and the proceeds from that sale can serve as the
source of the Debtor's financing.
A full-text copy of the Disclosure Statement dated March 16, 2020,
is available at https://tinyurl.com/rsd28xg from PacerMonitor.com
at no charge.
Counsel for the Debtor:
Kit James Gardner (161736)
LAW OFFICES OF KIT J. GARDNER
501 West Broadway, Suite 800
San Diego, CA 92101
Telephone: (619) 525-9900
Facsimile: (619) 374-2241
About NSHE CA Bulls
NSHE CA Bulls, LLC is a single asset real estate debtor (as defined
in 11 U.S.C. Section 101(51B)). NSHE CA Bulls sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Cal. Case No.
19-07519) on Dec. 17, 2019. At the time of the filing, the Debtor
had estimated assets of between $10 million and $50 million and
liabilities of between $1 million and $10 million. Judge Laura S.
Taylor oversees the case. The Debtor tapped the Law Offices of Kit
J. Gardner as its legal counsel.
O'LOUGHLIN LTD: Unsecureds to Recover 5% Under Plan
---------------------------------------------------
O'Loughlin, Ltd., filed a Chapter 11 Plan of Reorganization and a
Disclosure Statement.
Holders of Class 5 Unsecured Claims totaling $1,400,000 have a
projected recovery of 5 percent. Each Holder will receive cash an
amount equal to a pro rata Ssare of the sum of $75,000 in three
equal installments of $25,000.
All Class 6 equity interests will be cancelled and shall be of no
further force and effect.
The Debtor cannot guarantee that cash on hand and cash flow from
operations will be sufficient to continue to fund their operations
and allow the Debtor to satisfy obligations related to the Chapter
11 Case until the Debtor is able to emerge from bankruptcy
protection.
A full-text copy of the Disclosure Statement dated March 16, 2020,
is available at https://tinyurl.com/qrg48ol from PacerMonitor.com
at no charge.
Attorneys for O'Loughlin, Ltd.:
Steven L. Diller
DILLER & RICE, LLC
124 E. Main Street
Van Wert, Ohio 45891
Telephone (419) 238-5025
Facsimile (419) 238-4705
E-mail: steven@drlawllc.com
About O'Loughlin Ltd.
O'Loughlin Ltd. is a privately held company whose principal assets
are located at 2130 Collinway Ottawa Hills, Ohio.
O'Loughlin sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ohio Case No. 19-31036) on April 8, 2019. At the
time of the filing, the Debtor was estimated to have assets of less
than $1 million and liabilities of $1 million to $10 million. The
case is assigned to Judge John P. Gustafson. Diller and Rice, LLC,
is the Debtor's legal counsel.
ONE HUNDRED FOLD: Amends Plan, Hopes for Consensual Support
-----------------------------------------------------------
One Hundred Fold II, LLC, on March 16, 2020, submitted a Final
Amended Chapter 11 Plan of Reorganization with Immaterial
Modifications of the Amended Plan dated January 25, 2019.
This Plan is an amended version of the Jan. 25, 2019 version that
was sent out to and voted upon by several classes of creditors.
This Plan is designed to be a consensual Plan, and reflects the
occurrence of (i) sales of properties in satisfaction of the claims
of creditors, (ii) payoffs of claims with proceeds from insurance
policies, and (iii) agreements between the Debtor and various
holders of claims as to plan treatment. The Debtor believes that
the changes are not material, and that therefore if creditors must
change their votes within the time prescribed by order of the
Court, or their votes upon the Jan. 25, 2019 version of the Plan
will remain their votes. Therefore, the Debtor is soliciting votes
to accept the Plan from holders of claims in classes that
previously voted to reject the Plan. The Debtor is hopeful that
the Plan will be consensual.
Classes 3 through 54 allowed secured classes are all impaired.
Each of the following allowed classes of claism has been paid, in
full, in one lump sum cash payment of $22,000 from the cash sales
of the collateral previously securing such claim. The Classes
include: CLASS 3 - 69TH Ave. Ditech Financial LLC; CLASS 4 - 70th
Ave Seterun Inc.; CLASS 5 - Adams Ave. Chase Mortgage; CLASS 6 -
Bomer Dr. Chase Mortgage; CLASS 8 - Chipley St. PNC Bank; CLASS 9
- Clayton Dr Chase Mortgage; CLASS 13 - Clayton Dr Seterus Inc.;
CLASS 14 - Curtis St Citimortgage Inc.; CLASS 15 - Dalton St Wells
Fargo Home Mortagage; CLASS 16 - Dayton St PNC Bank; CLASS 17 -
Dayton St PNC Bank; CLASS 22 - Fairfields Ave PNC Bank; CLASS 23 -
Fairfields Ave Seterus Inc.; CLASS 24 - Geronimo St PNC Bank; CLASS
25 - Greenwell St PNC Bank; CLASS 26 - Henderson Ave PNC Bank;
CLASS 27 - Henderson Ave Chase Mortgage; CLASS 28 - Jackson Ave SN
Servicing Corp; CLASS 29 - Lupine Ave PNC Bank; CLASS 36 - Ontario
St Citimortgage Inc.; CLASS 37 - Osbourne Ave Chase Mortgage;
CLASS 38 - Ozark St PNC Bank; CLASS 39 – Perimeter; CLASS 42 -
Rhodes Ave Ditech Financial LLC; CLASS 43 - Sherwood St PNC Bank;
CLASS 44 - Sherwood St Seterus Inc.; CLASS 45 - Shelly St PNC Bank;
CLASS 46 - Shelley St Chase Mortgage; CLASS 48 - Spedale St Chase
Mortgage; CLASS 49 - Sumrall Dr Chase Mortgage; CLASS 51 - Terrace
St PNC Bank; CLASS 52 – Underwood Seterus Inc and CLASS 53 -
Winbourne Ave Ditech Financial LLC.
Each of the following classes has been are paid in full with
insurance proceeds: CLASS 11 - Clayton Dr Seterus, Inc; CLASS 12 -
Clayton Dr Chase Mortgage; CLASS 18 - Eleanor Dr Citimortgage Inc;
CLASS 19 - Elm Dr PNC Bank; CLASS 31 - Mohican St PNC Bank; CLASS
32 - Mohican St PNC Bank; CLASS 33 - Mohican St PNC Bank; CLASS 34
- N. 30th St Seterus Inc; CLASS 35 - N. Foster Dr PNC Bank; CLASS
40 - Prescott Rd Citimortagege Inc; CLASS 47 - Shelley St PNC Bank;
CLASS 50 - Sycamore St. Ditech Financial LLC
As of the Effective Date Debtor shall be deemed to have surrendered
collateral of each of the following Classes claim in favor of the
holder of such claim, in full satisfaction. The following classes
of claim include: CLASS 7 - Byron Ave Chase Mortgage; CLASS 20 -
Erie St
Wells Fargo Home Mortgage; CLASS 21 - Erie St Wells Fargo Home
Mortgage; CLASS 41 - Ritterman Ave Chase Mortgage; CLASS 54 -
Winbourne Ave Seterus Inc;
CLASS 30 - Mohican St PNC Bank will be paid in cash and in full the
Petition Date Balance ($14,894).
As to CLASS 55 - General unsecured claims, the Plan does not
provide for the payment of any unsecured claim as any unsecured
claim would be a deficiency amount over and above the collateral
value securing the claims in the classes of claims, all of which
are proposed to be paid and extinguished by the terms of this Plan
and the payment of the allowed secured claims.
CLASS 56 - Equity interests consists of the equity interests in the
Debtor, owned by Jerry L. Baker, Jr., who owns 100% of the equity
interest of the Debtor. The holder of the equity interests will
receive no cash distribution on account of his equity interest
unless and until all creditors holding allowed claims have been
paid according to the terms of the Plan.
A full-text copy of the Final Amended Chapter 11 Plan of
Reorganization Statement dated March 16, 2020, is available at
https://tinyurl.com/vm6zyvh from PacerMonitor.com at no charge.
Counsel for the Debtor:
Louis M. Phillips
KELLY HART PITRE
One American Place
301 Main Street, Suite 1600
Baton Rouge, LA 70801-1916
Telephone: (225) 381-9643
Facsimile: (225) 336-9763
E-mail: louis.phillips@kellyhart.com
About One Hundred Fold II
One Hundred Fold II, LLC, is a locally owned and operated business
that rents residential rental properties primarily in the northwest
area of Baton Rouge since its formation on Feb. 11, 2018. Mr.
Jerry L. Baker, Jr., has operated this company and other
residential rental companies in Baton Rouge, Louisiana for over a
decade.
One Hundred Fold II filed a Chapter 11 petition (Bankr. M.D. La.
Case No. 18-10313) on March 24, 2018. In the petition signed by
Mr. Baker, manager, the Debtor was estimated $500,000 to $1 million
in assets and $1 million to $10 million in liabilities as of the
bankruptcy filing. Judge Douglas D. Dodd is the presiding judge.
Kelly Hart Pitre is presently serving as the Debtor's counsel,
replacing Pamela Magee LLC.
OPPENHEIMER HOLDINGS: S&P Alters Outlook to Stable, Affirms B+ ICR
------------------------------------------------------------------
S&P Global Ratings said it revised its outlook on Oppenheimer
Holdings Inc. to stable from positive. S&P also affirmed its 'B+'
issuer credit and senior secured debt ratings on Oppenheimer.
The revision of the outlook to stable reflects S&P's view that the
market downturn and Fed rate cuts will impact Oppenheimer's
profitability this year.
Oppenheimer is a New York-based holding company that, through its
subsidiaries, conducts full-service retail securities brokerage,
investment management and institutional capital markets businesses.
Low-risk retail brokerage and investment management typically
account for three-quarters of revenues.
The company made $117 million on cash sweep revenue (to
FDIC-insured banks) in 2019 in its private clients division. This
represented 11% of the company's total revenues that year. S&P
believes the lion's share of this revenue will be lost this year as
a result of the Fed's rate cuts. Likewise, the drop in equity
prices (from 2019 levels) will significantly impact revenues on
fee-based assets ($32.1 billion at the end of 2019).
According to some preliminary estimates, a 20% decrease in stock
prices from year-end levels would translate into a loss of revenue
of about $12 million a quarter. Of note, fees are charged in
advance for the quarter, on the basis of valuations at the end of
the previous quarter, so that fees collected in the first quarter
of 2020 are not impacted by the recent market downturn. Overall,
the combination of zero interest rates and lower equity prices
throughout the rest of the year should translate into a sizable
revenue loss for the private clients division.
The stable outlook reflects S&P Global Ratings' expectation that
unfavorable market and economic conditions will likely affect the
company's profitability and earnings, but that the company will
operate with sufficient capital and liquidity to meet potential
stresses (with a risk-adjusted capital ratio of around 9% to 10%
and a liquidity coverage metric above 1.2x).
"Over the same time horizon, we could lower the ratings if the RAC
ratio decreases substantially or if we believe the firm's wealth
management business has weakened as a result of attrition of
clients and financial advisers," S&P said.
"An upgrade is unlikely over the next 12 months. However, over the
longer term, we could raise our ratings if the firm sustainably
improves profitability while maintaining a RAC ratio above 10%, a
liquidity coverage metric above 1.2x, a gross stable funding ratio
above 130%, and conservative risk management practices," S&P said.
OPTIMUM CHOICE: Unsecureds to Recover 31% in Plan
-------------------------------------------------
Optimum Choice Insurance Agency, Inc., filed its Chapter 11 Plan of
Reorganization that provides that:
* Class 1 Secured Claim of Knight Capital will be paid its
secured claim in full ($4,300) at 6% interest amortized over six
months, or $730 per month, starting on the first day of the first
month following the Effective Date.
* Class 3 General Unsecured Claims owed $97,748 will be paid
$30,000, to be shared pro rata amongst the claimants; this is
estimated to pay 31% of each claim. Payments will be made in 60
equal monthly installments of $500 each, starting on the first day
of the first month following the Effective Date.
* The Class 4 Interest Holder owner will retain her ownership
interest in the Debtor.
The Debtor will fund the Plan from its business operations and the
funds it has/will have accumulated in its Debtor-in-Possession bank
accounts.
A full-text copy of the Disclosure Statement dated March 16, 2020,
is available at https://tinyurl.com/vuqqrpp from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Roksana D. Moradi-Brovia
Matthew D. Resnik
RESNIK HAYES MORADI LLP
17609 Ventura Blvd., Suite 314
Encino, CA 91316
Telephone: (818) 285-0100
Facsimile: (818) 855-7013
E-mail: roksana@RHMFirm.com
matt@RHMFirm.com
About Optimum Choice Insurance Agency
Optimum Choice Insurance Agency sought Chapter 11 protection
(Bankr. C.D. Cal. Case No. 20-10517) on Jan. 16, 2020. At the time
of the filing, the Debtor had estimated assets of less than $50,000
and liabilities of between $100,001 and $500,000. Judge Barry
Russell oversees the case. Resnik Hayes Moradi, LLP is the
Debtor's legal counsel.
PA CO-MAN INC: Hires Campbell & Levine as Special Counsel
---------------------------------------------------------
Pa Co-Man, Inc., seeks authority from the US Bankruptcy Court for
the Western District of Pennsylvania to employ Campbell & Levine,
LLC, to serve as Delaware special counsel.
Mark T. Hurford, Esq. of Campbell & Levine will represent the
Debtor with regard an involuntary bankruptcy case filed in United
States Bankruptcy Court in the District of Delaware on Jan. 27,
2020 at Bankruptcy Case No. 20-10190-LSS.
Mr. Hurford's hourly rate is $450. On occasion, another attorney
may assist on this matter. The hourly rates of the other attorneys
in the office range from $450 to $625. The rates for the paralegals
in this office range between $95 and $140 per hour.
The firm requested a $5,000 retainer.
Mr. Hurford assured the court that he and his firm are
disinterested within the meaning of 11 U.S.C. 101(14).
The firm can be reached through:
Mark T. Hurford, Esq.
Campbell & Levine, LLC
222 Delaware Avenue, Suite 1620
Wilmington, DE 19801
Phone: 302-426-1900
Fax: 302-426-9947
Email: mhurford@camlev.com
About Pa Co-Man Inc.
Pa Co-Man, Inc., based in Pittsburgh, PA, filed a Chapter 11
petition (Bankr. W.D. Pa. Case No. 20-20422) on Feb. 4, 2020. In
the petition signed by Peter Tsudis, president, the Debtor was
estimated to have up to $50,000 in assets and $10 million to $50
million in liabilities. Robert O Lampl, Esq., at Robert O Lampl
Law Office, serves as bankruptcy counsel.
PARCELS B AND C: Seeks to Hire Behar Gutt as Counsel
----------------------------------------------------
Parcels B and C, LLC, seeks authority from the U.S. Bankruptcy
Court for the Southern District of Florida to employ Behar Gutt &
Glazer, P.A., as counsel to the Debtor.
Parcels B and C requires Behar Gutt 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 the Court;
(c) prepare motions, pleadings, orders, applications,
adversary proceedings, and other legal documents necessary
in the administration of the case; and
(e) protect the interests of the Debtor with its creditors in
the preparation of a Plan.
Behar Gutt will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Brian S. Behar, member of Behar Gutt & Glazer, P.A., assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
Behar Gutt can be reached at:
Brian S. Behar, Esq.
BEHAR, GUTT & GLAZER, P.A.
DCOTA, Suite A-350
1855 Griffin Road
Fort Lauderdale, FL 33004
Tel: (305) 931-3771
Fax: (305) 931-3774
E-mail: bsb@bgglaw.net
About Parcels B and C
Parcels B and C, LLC, based in Key West, FL, filed a Chapter 11
petition (Bankr. S.D. Fla. Case No. 20-12423) on Feb. 24, 2020. In
the petition signed by Walter Galnovatch, authorized member, the
Debtor was estimated to have $500,000 to $1 million in assets and
$1 million to $10 million in liabilities. The Hon. Laurel M.
Isicoff oversees the case. Brian S. Behar, Esq., at Behar Gutt &
Glazer, P.A., serves as bankruptcy counsel.
PARK-OHIO INDUSTRIES: S&P Downgrades ICR to 'B' on Lower Earnings
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer-credit rating on Park-Ohio
Industries Inc. to 'B' from 'B+' and its rating on the company's
senior unsecured notes to 'B-' from 'B'. At the same time, S&P
placed all ratings on CreditWatch with negative implications.
The downgrade reflects weaker-than-anticipated performance in 2019
due to weak labor markets, trade disputes, customer work stoppages,
and declining industrial production. As a result, leverage
increased to about 4.6x at Dec. 31, 2019, well above S&P's prior
expectations. The downgrade also reflects the potential impact on
leverage of the spread of COVID-19 and the rapidly deteriorating
macroeconomic environment. S&P believes pressure on automotive
sales will cause leverage to increase significantly beyond the 5.0x
level in 2020.
"The CreditWatch with negative implications indicates at least a
one-in-two chance that we could lower the rating over the next 90
days. Over that time horizon, we will analyze the outlook for the
company's automotive and oil and gas end markets and the potential
increase in leverage as a result of significantly lower demand. We
will also refine our view of the company's liquidity position,
including our forecast for free operating cash flow and covenant
headroom," S&P said.
PARKING MANAGEMENT: Unsecured Creditors to Get 100% in Plan
-----------------------------------------------------------
Parking Management Services of America, Inc., has proposed a
Chapter 11 Plan of Reorganization.
Class 2A On Deck Capital Inc. secured claim in the amount of
$23,922 as of Petition Date is impaired. Pursuant to a
stipulation, the Debtor will repay the Lender's Claim of $23,922
with 0% interest per annum over a 60-month period in equal monthly
installments of principal and interest of $398.70 each commencing
on March 1, 2020, and continuing for the next 59 installments on
the first (1st) day of each subsequent month, after which point the
Claim will be deemed fully repaid and satisfied.
Class 2B On Deck Capital secured claim in the amount of $87,488 is
fully secured. Pursuant to a stipulation, the Debtor will repay
$87,488 with 10% interest per annum over 60-month period in equal
monthly installments of principal and interest of $1,859 each
commencing on March 1, 2020, and continuing for the next 59
installments on the first day of each subsequent month, after which
point the Claim will be deemed fully repaid and satisfied.
Class 2C Swift Financial LLC totaling $32,072 as of petition date
is impaired. Pursuant to a stipulation, the Debtor will repay
Claim of $32,072 together with 10% SIMPLE interest on the claim
over 60 months period in equal monthly instalments of principal and
interest of $588 each commencing on March 1, 2020, and continuing
for the next 59 installments on the first day of each subsequent
month, after which point the Claim will be deemed fully repaid and
satisfied.
Class 2G Funding Metrics, LLC asserts a claim of $15,478: $8,378
listed as secured claim and remaining $7,100 as unsecured claim, as
of petition date. Pursuant to a stipulation,tThe Debtor will only
be obligated to repay this creditor's secured portion of Claim of
$8,378 with 10% interest per annum over 60 months period in equal
monthly installments of principal and interest of $178 each
commencing on March 1, 2020, and continuing for the next 59
installments on the first (1st) day of each subsequent month, after
which point the entire claim, secured and unsecured portions, will
be deemed fully repaid and satisfied.
Class 2H Kabbage Inc. claim of $14,000 is fully secured. Pursuant
to the stipulation, the Debtor will repay claim of $14,000 together
with 10%interest on the claim over 60 months period in equal
monthly installments of principal and interest of $297 each
commencing on the 1st day of the month from March 1, 2020, and
continuing for the next 59 installments on the first day of each
subsequent month, after which point the claim will be deemed fully
repaid and satisfied.
Class 4A General Unsecured Claims totaling $200,170 will be paid in
60 monthly instalments from the Effective Date at 0% interest as
follows:
Months 1-44: $2,276.57 a month
Months 45-47: $3,730.47 a month
Months 48-50: $5,520.40 a month
Months 51-55: $5,964.33 a month
Months 56-60: $9,395.17 a month
The total estimated payout is $200,170, estimated to pay 100% of
all claims in this class.
The Plan will be funded by continuing Debtor's business
operations.
A full-text copy of the First Amended Disclosure Statement dated
March 16, 2020, is available at https://tinyurl.com/sejfovr from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Alla Tenina, Esq.
Tenina Law, Inc.
15250 Ventura Blvd, Suite 601
Sherman Oaks, CA 91403
Tel: (213)596-0265
Fax: (310)774-3674
E-mail: alla@teninalaw.com
About Parking Management
Services of America
Parking Management Services of America, Inc., provides parking
attendants and attending personnel to various third parties'
parking locations. Parking Management Services filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 19-21103) on Sept. 19, 2019 in
Los Angeles, California. TENINA LAW, INC., serves as the Debtor's
counsel.
PEACE INC: Case Summary & 8 Unsecured Creditors
-----------------------------------------------
Nine affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Peace Inc. 20-08787
6550 N. Clark St.
Chicago, IL 60626
3860 Taxi Corp. 20-08812
Choice Enterprise Inc. 20-08794
Kimberly Taxi Co. 20-08809
Natzac, Inc. 20-08798
RSA Cab Corp. 20-08802
Senai Taxi Corp. 20-08804
Siam Incorporated I 20-08788
Zion Cab Incorporated 20-08807
Business Description: The Debtors are privately held companies
in the taxi and limousine service industry.
Chapter 11 Petition Date: April 3, 2020
Court: United States Bankruptcy Court
Northern District of Illinois
Judges: Hon. Carol A. Doyle (20-08787; 20-08794; and 20-08798)
Hon. David D. Cleary (20-08812 and 20-08804)
Hon. Lashonda A. Hunt (20-08809 and 20-08802)
Hon. Jack B. Schmetterer (20-08788)
Hon. Benjamin A. Goldgar (20-08807)
Debtors' Counsel: Robert R. Benjamin, Esq.
GOLAN CHRISTIE TAGLIA LLP
70 W. Madison
Suite 1500
Chicago, IL 60602
Tel: (312) 263-2300
E-mail: rrbenjamin@gct.law
Peace Inc.'s
Total Assets: $162,565
Peace Inc.'s
Total Liabilities: $1,111,203
3860 Taxi's
Total Assets: $113,438
3860 Taxi's
Total Liabilities: $766,175
Choice Enterprise's
Total Assets: $162,949
Choice Enterprise's
Total Liabilities: $1,111,193
Kimberly Taxi's
Total Assets: $30,980
Kimberly Taxi's
Total Liabilities: $200,471
Natzac, Inc.'s
Total Assets: $29,805
Natzac, Inc.'s
Total Liabilities: $229,201
RSA Cab's
Total Assets: $30,359
RSA Cab
Total Liabilities: $203,867
Senai Taxi's
Total Assets: $29,530
Senai Taxi's
Total Liabilities: $229,494
Siam Incorporated's
Total Assets: $57,509
Siam Incorporated's
Total Liabilities: $522,088
Zion Cab's
Total Assets: $31,343
Zion Cab
Total Liabilities: $229,446
The petitions were signed by Alganesh Iyassu, secretary.
Copies of the petitions are available for free at PacerMonitor.com
at:
https://is.gd/O2wysA
https://is.gd/PQoAmj
https://is.gd/5DuT9A
https://is.gd/s6bByg
https://is.gd/FOgDUp
https://is.gd/RZKGtf
https://is.gd/NkAuUQ
https://is.gd/YFO07I
https://is.gd/U7MEa4
PEAK SERUM: Seeks to Hire Dennis & Company as Accountant
--------------------------------------------------------
Peak Serum, Inc. and Thomas Kutrubes seek approval from the U.S.
Bankruptcy Court for the District of Colorado to hire Dennis &
Company to provide professional tax and accounting services.
Services the firm will render are:
a. prepare and file any tax returns;
b. provide accounting services related to the bankruptcy; and
c. provide additional tax and accounting services required by
the Debtors.
Mark Dennis, CPA, will be in charge of the Debtor's accounts. His
rate is $250 per hour. Staff may assist the accountant at an
average hourly rate of $125. The accountant seeks approval of a
retainer in the amount of $5,000.
The accountant does hold or represent any interest materially
adverse to the Debtors or the estate on matters it is to be
employed, according to court filings.
The firm can be reached through:
Mark Dennis, CPA
Dennis & Company
8400 East Cresent Parkway, Suite 600
Greenwood Village, CO 80111
Phone: (720) 528-4087
Fax: (720) 528 4001
About Peak Serum
Headquartered in Wellington, Colo., Peak Serum is a privately owned
and independent supplier of life science laboratory products. Its
core focus is Fetal Bovine Serum (FBS) for cGMP / clinical trial
research and diagnostics applications. The Company offers a wide
range of 100% US Origin and USDA-Approved FBS products for all
levels of research compliance.
Peak Serum sought Chapter 11 protection (Bankr. D. Colo. Case No.
19-19802) on Nov. 13, 2019. At the time of filing, the Debtor
recorded total assets at $956,300 and total liabilities at
$3,580,644. The petition was signed by Thomas Kutrubes, president
and chief executive officer. Judge Joseph G. Rosania Jr. oversees
the case. Wadsworth Garber Warner Conrardy, P.C. is the Debtor's
legal counsel.
PG&E CORP: Axed Employee's Lawsuit May Proceed in State Court
-------------------------------------------------------------
In the bankruptcy case captioned In re: PG&E CORPORATION, and
PACIFIC GAS AND ELECTRIC COMPANY, Chapter 11, Debtors, Bankruptcy
Case No. 19-30088-DM Jointly Administered (Bankr. N.D. Cal.),
Bankruptcy Judge Dennis Montali granted Todd Hearn's motion for
relief from the automatic stay to pursue his employment claims in
the Napa County Superior Court.
Hearn worked as a lineman for PG&E until the Debtors removed him
from work in 2018 to investigate alleged timekeeping misconduct.
After an investigation, the Debtors terminated Hearn on Jan. 22,
2019, for violations of the Employee Code of Conduct. PG&E then
filed for bankruptcy on Jan. 29, 2019.
In his proposed state court complaint, Hearn alleges that he was
terminated in retaliation for raising complaints regarding the
Debtors' safety practices, and that this violates California's
whistleblower statutes.
Following Hearn's termination, the International Brotherhood of
Electrical Workers filed a grievance pursuant to procedures found
in the applicable Collective Bargaining Agreement, which agreement
covers wages, hours, and working conditions ("CBA"). The filed
grievance alleges that Hearn was terminated "without just and
sufficient cause." The grievance does not include allegations of
whistleblower retaliation or violations of the California Labor
Code. The CBA contains five steps for dispute resolution, with the
last step being binding arbitration. An Arbitration Board then has
the discretion to issue an award that binds the parties. Here, the
grievance process is at the end of the second step and will be
forwarded to the third step (fact finding). If Hearn prevails, he
could be reinstated and awarded lost wages, but general or punitive
damages will not be available.
According to Judge Montali, a bankruptcy court shall lift the
automatic stay for cause, which is not defined in the Bankruptcy
Code but is decided on a case-by-case basis. To determine whether
cause exists, courts often use the 12 factors set forth in In re
Curtis, (Bankr. D.Utah 1984), which are as follows (excluding the
factors irrelevant to this proceeding): whether the relief will
result in a partial or complete resolution of the issues; the lack
of any connection with or interference with the bankruptcy case;
whether a specialized tribunal has been established to hear the
particular cause of action and that tribunal has the expertise to
hear such cases; the interest of judicial economy and the
expeditious and economical determination of litigation for the
parties; whether the foreign proceedings have progressed to the
point where the parties are prepared for trial; and the impact of
the stay on the parties and the "balance of hurt."
Applying the relevant Curtis factors, cause exists to grant relief
from stay. Judge Montali explains that relief from stay will allow
complete resolution of Hearn's issues through the state court
process. Although state court is not a specialized tribunal for
retaliation cases, the court acknowledges that the state court is
suited to hear state law claims, but does not weigh this factor
significantly in its decision.
The Debtors assert that the second factor, the lack of any
connection/interference with the bankruptcy case, weighs in their
favor because the proposed lawsuit would overlap with the ongoing
grievance process and the Debtors would have to commit further
resources to adjudicate similar issues in state court. The Debtors
also claim that granting relief from stay will invite future,
similar, requests from individual plaintiffs. Relatedly, the
Debtors claim that the twelfth factor, the impact of the stay on
the parties and the "balance of hurt," weighs heavily in their
favor, asserting that Hearn is free to continue the grievance
process if his motion is denied, and that granting of the motion
will interfere with their reorganization at this critical time.
However, the grievance process does not deal with Hearn's statutory
claims. Further, this dispute is unrelated to the wildfires that
precipitated this bankruptcy and it is best left for resolution
without regard to the bankruptcy. Hearn will also have to expend
resources to move forward, but the court prefers to allow Hearn to
choose between awaiting conclusion of the grievance proceeding or
to pursue state court remedies. In addition, while the court does
not invite a flood of individual plaintiffs bringing relief from
stay motions, it is not prepared to deny this motion due to that
possibility. As such, these factors weigh in favor of Hearn.
Similarly, the Debtors argue that the tenth factor, the interests
of judicial economy, is not met because the grievance procedure and
proposed lawsuit address the same questions. The court is not
persuaded by this argument: the grievance procedures and state
court lawsuit may involve similar facts, but they bring different
causes of action under separate authorities.
The eleventh factor, whether the foreign proceedings have
progressed to the point where the parties are prepared for trial,
weighs in favor of the Debtors. The state court litigation has yet
to be filed and consequently the parties are nowhere near being
prepared for trial. However, this factor, by itself, is
insufficient to outweigh the other factors, Judge Montali says.
A copy of the Court's Memorandum Decision dated Feb. 25, 2020 is
available at https://bit.ly/2W4FfYO from Leagle.com.
PG&E Corporation, Debtor, represented by Peter J. Benvenutti --
pbenvenutti@kbkllp.com -- Keller & Benvenutti LLP, Kevin Bostel
-- kevin.bostel@weil.com -- Weil, Gotshal & Manges LLP, Timothy G.
Cameron -- tcameron@cravath.com -- Cravath, Swaine & Moore LLP,
Jared R. Friedmann -- jared.friedmann@weil.com -- Weil, Gotshal &
Manges LLP, Andriana Georgallas -- andriana.georgallas@weil.com --
Weil, Gotshal & Manges LLP, Stuart J. Goldring --
stuart.goldring@weil.com -- Weil, Gotshal & Manges LLP, Matthew
Goren -- matthew.goren@weil.com -- Weil, Gotshal & Manges LLP,
David A. Herman -- dherman@cravath.com -- Cravath, Swaine & Moore
LLP, Stephen Karotkin -- stephen.karotkin@weil.com -- Weil, Gotshal
& Manges LLP, Tobias S. Keller – tkeller@kbkllp.com -- Keller and
Benvenutti LLP, Jane Kim -- jkim@kbkllp.com -- Keller & Benvenutti
LLP, Katherine Kohn -- kkohn@groom.com -- Groom Law Group,
Chartered, Kevin Kramer -- kevin.kramer@weil.com -- Weil, Gotshal &
Manges LLP, David Levine -- dlevine@groom.com -- Groom Law Group,
Chartered, Dara Levinson Silveira -- dsilveira@kbkllp.com -- Keller
& Benvenutti LLP, Jessica Liou -- jessica.liou@weil.com -- Weil,
Gotshal & Manges LLP, Omid H. Nasab -- onasab@cravath.com --
Cravath, Swaine & Moore LLP, John Nolan , Weil, Gotshal & Manges
LLP, Kevin J. Orsini -- korsini@cravath.com -- Cravath, Swaine &
Moore LLP, Thomas B. Rupp -- trupp@kbkllp.com -- Keller and
Benvenutti LLP, Bradley R. Schneider , Munger Tolles and Olson LLP,
Ray C. Schrock , Weil, Gotshal & Manges LLP, Richard W. Slack ,
Weil Gotshal and Manges, LLP, Theodore Tsekerides , Weil, Gotshal &
Manges LLP & Paul H. Zumbro -- pzumbro@cravath.com -- Cravath,
Swaine & Moore LLP.
Office of the U.S. Trustee / SF, U.S. Trustee, represented by Jason
Blumberg , Office of the U.S. Trustee, Cameron Gulden , Office of
the United States Trustee, Lynette C. Kelly , Office of the United
States Trustee, Timothy S. Laffredi , Office of the U.S. Trustee &
Marta Villacorta , Office of the United States Trustee.
Official Committee Of Unsecured Creditors, Creditor Committee,
represented by Paul S. Aronzon , Milbank LLP, James C. Behrens --
jbehrens@milbank.com -- Milbank, LLP, Gregory A. Bray --
gbray@milbank.com -- Milbank LLP, Erin Elizabeth Dexter --
edexter@milbank.com -- Milbank LLP, Dennis F. Dunne --
ddunne@milbank.com -- Milbank, LLP, Samuel A. Khalil --
skhalil@milbank.com -- Milbank, LLP, Thomas R. Kreller --
tkreller@milbank.com -- Milbank LLP, Andrew Michael Leblanc --
aleblanc@milbank.com -- Milbank LLP & Alan J. Stone --
astone@milbank.com -- Milbank LLP.
Official Committee of Tort Claimants, Creditor Committee,
represented by Lauren T. Attard -- lattard@bakerlaw.com -- Baker
Hostetler LLP, Chris Bator -- cbator@bakerlaw.com -- Baker &
Hostetler LLP, Dustin M. Dow -- ddow@bakerlaw.com -- Baker &
Hostetler LLP, Cecily Ann Dumas -- cdumas@bakerlaw.com -- Baker and
Hostetler LLP, Joseph M. Esmont -- jesmont@bakerlaw.com -- Baker &
Hostetler LLP, Lars H. Fuller -- lfuller@bakerlaw.com -- Baker &
Hostetler LLP, Eric R. Goodman -- egoodman@bakerlaw.com -- Baker &
Hostetler LLP, Elizabeth A. Green -- egreen@bakerlaw.com --
BakerHostetler LLP, Robert A. Julian -- rjulian@bakerlaw.com --
Baker and Hostetler LLP, Elyssa S. Kates -- ekates@bakerlaw.com --
Baker & Hostetler LLP, Kody D.L. Kleber -- kkleber@bakerlaw.com --
Baker & Hostetler LLP, David J. Richardson , Baker & Hostetler,
LLP, David B. Rivkin, Jr. , Baker and Hostetler LLP, Jorian L. Rose
, Baker & Hostetler LLP, Eric E. Sagerman , Baker and Hostetler LLP
& Catherine E. Woltering , Baker & Hostetler LLP.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
As of Sept. 30, 2018, the Debtors, on a consolidated basis, had
reported $71.4 billion in assets on a book value basis and $51.7
billion in liabilities on a book value basis.
PG&E Corp. and Pacific Gas employ approximately 24,000 regular
employees, approximately 20 of whom are employed by PG&E Corp. Of
Pacific Gas' regular employees, approximately 15,000 are covered
by
collective bargaining agreements with local chapters of three
labor
unions: (i) the International Brotherhood of Electrical Workers;
(ii) the Engineers and Scientists of California; and (iii) the
Service Employees International Union.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter 11
petitions (Bankr. N.D. Cal. Lead Case No. 19-30088).
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, said they are facing extraordinary
challenges
relating to a series of catastrophic wildfires that occurred in
Northern California in 2017 and 2018. The utility said it faces an
estimated $30 billion in potential liability damages from
California's deadliest wildfires of 2017 and 2018.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are
serving as PG&E's legal counsel, Lazard is serving as its
investment banker and AlixPartners, LLP is serving as the
restructuring advisor to PG&E. Prime Clerk LLC is the claims and
noticing agent.
In order to help support the Company through the reorganization
process, PG&E has appointed James A. Mesterharm, a managing
director at AlixPartners, LLP, and an authorized representative of
AP Services, LLC, to serve as Chief Restructuring Officer. In
addition, PG&E appointed John Boken also a Managing Director at
AlixPartners and an authorized representative of APS, to serve as
Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and
their colleagues at AlixPartners will continue to assist PG&E with
the reorganization process and related activities. Morrison &
Foerster LLP, as special regulatory counsel. Munger Tolles & Olson
LLP, as special counsel.
The Office of the U.S. Trustee appointed an official committee of
creditors on Feb. 12, 2019. The Committee retained Milbank LLP as
counsel; FTI Consulting, Inc., as financial advisor; Centerview
Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented
by
Baker & Hostetler LLP.
PG&E CORP: Court to Extend Bar Date for Securities Suit Plaintiffs
------------------------------------------------------------------
Lead Plaintiffs in a pending district court litigation filed a
motion to apply Federal Rule of Civil Procedure 23, made applicable
by Federal Rule of Bankruptcy Procedure 7023, to their class proofs
of claim. Debtors PG&E Corporation and Pacific Gas and Electric
Company as well as the Official Committee of Tort Claimants
appointed in their Chapter 11 cases filed oppositions and the
matter was heard on Jan. 29, 2020. Following that hearing, the
court issued a tentative ruling signaling its intent to either
grant the Motion or extend the claims bar date to allow individual
members of the class to file proofs of claim, and soliciting
further briefing from the parties regarding those options. Upon
analysis of the facts presented, Bankruptcy Judge Dennis Montali
denies the motion but extends the claims bar date for individual
members of the class.
Movants filed a complaint in district court on June 12, 2018, which
suit was eventually consolidated and a lead plaintiff appointed.
After the Debtors filed bankruptcy on Jan. 29, 2019, the Securities
Litigation was automatically stayed by virtue of 11 U.S.C. section
362(a), and the Debtors filed an adversary proceeding to enjoin
continued prosecution of the Securities Litigation. After the lead
plaintiff was dismissed from the adversary proceeding, the Debtors
were given a timeline to file a new adversary proceeding seeking to
enjoin the plaintiffs from prosecution of the proceeding against
the remaining non-debtor defendants in the district court action.
Briefly, Movants' claims against the Debtors amount to securities
fraud claims, alleging that the Debtors (and others) misled
investors about their wildfire safety practices. Movants allege
that these practices artificially inflated stock prices, which then
dropped after information regarding the Debtors' improper safety
practices emerged between 2017 and 2018. Movants also bring claims
regarding the accuracy of certain offering documents for notes
issued between 2016 and 2018. Movants represent a class of
investors who acquired securities between April 2015 and November
2018 and suffered losses as a result of the alleged misleading
statements. Currently, non-Debtor defendants have filed a motion to
dismiss the Securities Litigation, which has been submitted for
resolution by the district court.
Movants request application of FRBP 7023 to their timely filed
class proofs of claim. According to Judge Montali, class proofs of
claim are permitted in bankruptcy cases, typically using a two-step
process, whereby the court first allows the class proof of claim to
be filed, and then determines whether certification is appropriate.
In considering the first step, courts typically apply the factors
laid out in In re Musicland Holding Corp., which are as follows:
1) whether the class was certified pre-petition;
2) whether members of the putative class received notice of
the bar date, and
3) whether class certification will adversely affect the
administration of the estate.
In applying the first factor, the class has not yet been certified,
but this fact is not fatal to Movants, Judge Montali says. Because
a motion to dismiss is currently pending in the Securities
Litigation, Movants are unable to certify their class at this
point.
According to Judge Montali, the second factor weighs heavily in
favor of granting the Motion. Previously in this case, the claims
bar date was extended to Oct. 21, 2019, and then extended to a
later date specifically for wildfire victim claimants. Putative
members of the class did not receive actual notice of the general
claims bar date. The parties appear to agree that known creditors
are entitled to actual written notice of the claims bar date.
However, the parties differ on whether members of the putative
class are known creditors. A known creditor is one whose identity
is either known or reasonably ascertainable by the debtor, and all
creditors' identities are reasonably ascertainable if they can be
identified through reasonably diligent efforts. Reasonable
diligence generally requires a search of a debtor's books and
records. Judge Montali notes the Debtors were aware of the
Securities Litigation, filed in 2018, and of its consolidation with
other action. The Debtors participated in the litigation and filed
an adversary proceeding against the lead plaintiff, in this
bankruptcy. As such, the Debtors knew of the existence of the
putative class members and their status as potential creditors. An
examination of their books and records would have yielded this
information. Consequently, the putative class members are known
creditors entitled to actual written notice. As the Debtors failed
to provide this notice, this factor weighs in favor of granting the
Motion. The briefing indicates that there is a well-established
procedure for noticing investors through nominees. Initially, the
Debtors indicated that they were unable to implement this procedure
but have since reversed their position and stated that they are
able to implement this procedure.
Judge Montali says the third factor is of particular importance to
this bankruptcy -- it is unclear at this point whether class
certification will adversely affect administration of the estate,
and the court is inclined to weigh this factor in favor of the
Debtors. At this juncture, it appears granting the motion may
result in more chaos than certainty. It is ultimately a close call,
but the alternative route appears poised to generate less (but
likely some) chaos.
Because the Debtors did not make a reasonable effort to give actual
notice to class members of the claims bar date, the court will
extend the bar date for this group of creditors. This alternative
has been recognized by other courts.
A copy of the Court's Memorandum Decision dated Feb. 24, 2020 is
available at https://bit.ly/2TZdq1d from Leagle.com.
PG&E Corporation, Debtor, represented by Peter J. Benvenutti --
pbenvenutti@kbkllp.com -- Keller & Benvenutti LLP, Kevin Bostel
-- kevin.bostel@weil.com -- Weil, Gotshal & Manges LLP, Timothy G.
Cameron -- tcameron@cravath.com -- Cravath, Swaine & Moore LLP,
Jared R. Friedmann -- jared.friedmann@weil.com -- Weil, Gotshal &
Manges LLP, Andriana Georgallas -- andriana.georgallas@weil.com --
Weil, Gotshal & Manges LLP, Stuart J. Goldring --
stuart.goldring@weil.com -- Weil, Gotshal & Manges LLP, Matthew
Goren -- matthew.goren@weil.com -- Weil, Gotshal & Manges LLP,
David A. Herman -- dherman@cravath.com -- Cravath, Swaine & Moore
LLP, Stephen Karotkin -- stephen.karotkin@weil.com -- Weil, Gotshal
& Manges LLP, Tobias S. Keller – tkeller@kbkllp.com -- Keller and
Benvenutti LLP, Jane Kim -- jkim@kbkllp.com -- Keller & Benvenutti
LLP, Katherine Kohn -- kkohn@groom.com -- Groom Law Group,
Chartered, Kevin Kramer -- kevin.kramer@weil.com -- Weil, Gotshal &
Manges LLP, David Levine -- dlevine@groom.com -- Groom Law Group,
Chartered, Dara Levinson Silveira -- dsilveira@kbkllp.com -- Keller
& Benvenutti LLP, Jessica Liou -- jessica.liou@weil.com -- Weil,
Gotshal & Manges LLP, Omid H. Nasab -- onasab@cravath.com --
Cravath, Swaine & Moore LLP, John Nolan , Weil, Gotshal & Manges
LLP, Kevin J. Orsini -- korsini@cravath.com -- Cravath, Swaine &
Moore LLP, Thomas B. Rupp -- trupp@kbkllp.com -- Keller and
Benvenutti LLP, Bradley R. Schneider , Munger Tolles and Olson LLP,
Ray C. Schrock , Weil, Gotshal & Manges LLP, Richard W. Slack ,
Weil Gotshal and Manges, LLP, Theodore Tsekerides , Weil, Gotshal &
Manges LLP & Paul H. Zumbro -- pzumbro@cravath.com -- Cravath,
Swaine & Moore LLP.
Office of the U.S. Trustee / SF, U.S. Trustee, represented by Jason
Blumberg , Office of the U.S. Trustee, Cameron Gulden , Office of
the United States Trustee, Lynette C. Kelly , Office of the United
States Trustee, Timothy S. Laffredi , Office of the U.S. Trustee &
Marta Villacorta , Office of the United States Trustee.
Official Committee Of Unsecured Creditors, Creditor Committee,
represented by Paul S. Aronzon , Milbank LLP, James C. Behrens --
jbehrens@milbank.com -- Milbank, LLP, Gregory A. Bray --
gbray@milbank.com -- Milbank LLP, Erin Elizabeth Dexter --
edexter@milbank.com -- Milbank LLP, Dennis F. Dunne --
ddunne@milbank.com -- Milbank, LLP, Samuel A. Khalil --
skhalil@milbank.com -- Milbank, LLP, Thomas R. Kreller --
tkreller@milbank.com -- Milbank LLP, Andrew Michael Leblanc --
aleblanc@milbank.com -- Milbank LLP & Alan J. Stone --
astone@milbank.com -- Milbank LLP.
Official Committee of Tort Claimants, Creditor Committee,
represented by Lauren T. Attard -- lattard@bakerlaw.com -- Baker
Hostetler LLP, Chris Bator -- cbator@bakerlaw.com -- Baker &
Hostetler LLP, Dustin M. Dow -- ddow@bakerlaw.com -- Baker &
Hostetler LLP, Cecily Ann Dumas -- cdumas@bakerlaw.com -- Baker and
Hostetler LLP, Joseph M. Esmont -- jesmont@bakerlaw.com -- Baker &
Hostetler LLP, Lars H. Fuller -- lfuller@bakerlaw.com -- Baker &
Hostetler LLP, Eric R. Goodman -- egoodman@bakerlaw.com -- Baker &
Hostetler LLP, Elizabeth A. Green -- egreen@bakerlaw.com --
BakerHostetler LLP, Robert A. Julian -- rjulian@bakerlaw.com --
Baker and Hostetler LLP, Elyssa S. Kates -- ekates@bakerlaw.com --
Baker & Hostetler LLP, Kody D.L. Kleber -- kkleber@bakerlaw.com --
Baker & Hostetler LLP, David J. Richardson , Baker & Hostetler,
LLP, David B. Rivkin, Jr. , Baker and Hostetler LLP, Jorian L. Rose
, Baker & Hostetler LLP, Eric E. Sagerman , Baker and Hostetler LLP
& Catherine E. Woltering , Baker & Hostetler LLP.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
As of Sept. 30, 2018, the Debtors, on a consolidated basis, had
reported $71.4 billion in assets on a book value basis and $51.7
billion in liabilities on a book value basis.
PG&E Corp. and Pacific Gas employ approximately 24,000 regular
employees, approximately 20 of whom are employed by PG&E Corp. Of
Pacific Gas' regular employees, approximately 15,000 are covered
by collective bargaining agreements with local chapters of three
labor unions: (i) the International Brotherhood of Electrical
Workers; (ii) the Engineers and Scientists of California; and (iii)
the Service Employees International Union.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter 11
petitions (Bankr. N.D. Cal. Lead Case No. 19-30088).
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, said they are facing extraordinary challenges
relating to a series of catastrophic wildfires that occurred in
Northern California in 2017 and 2018. The utility said it faces an
estimated $30 billion in potential liability damages from
California's deadliest wildfires of 2017 and 2018.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are
serving as PG&E's legal counsel, Lazard is serving as its
investment banker and AlixPartners, LLP is serving as the
restructuring advisor to PG&E. Prime Clerk LLC is the claims and
noticing agent.
In order to help support the Company through the reorganization
process, PG&E has appointed James A. Mesterharm, a managing
director at AlixPartners, LLP, and an authorized representative of
AP Services, LLC, to serve as Chief Restructuring Officer. In
addition, PG&E appointed John Boken also a Managing Director at
AlixPartners and an authorized representative of APS, to serve as
Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and
their colleagues at AlixPartners will continue to assist PG&E with
the reorganization process and related activities. Morrison &
Foerster LLP, as special regulatory counsel. Munger Tolles & Olson
LLP, as special counsel.
The Office of the U.S. Trustee appointed an official committee of
creditors on Feb. 12, 2019. The Committee retained Milbank LLP as
counsel; FTI Consulting, Inc., as financial advisor; Centerview
Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented by
Baker & Hostetler LLP.
PHUONG NAM: Unsecureds to Recover 10% Under Plan
------------------------------------------------
Phuong Nam Vietnamese Restaurant, LLC, filed a Second Amended
Disclosure Statement for its Plan of Reorganization.
This is a reorganizing plan in which the Debtor seeks to accomplish
payments under the Plan by continuing to operate its business in
Johnson City, New York in a successful and profitable manner.
The Debtor will continue to operate its business. Since the filing
date, the Debtor has been successful in bringing operating costs
down and increasing the amount of revenue.
Class 3 General Unsecured Claims totaling $98,280 are impaired.
This total includes Workers Compensation Board of New York State,
Quicksilver Capital, Green Capital, Wide Merchant Group, the
unsecured portion of NYS Department of Taxation and Finance, the
unsecured portion of the Internal Revenue Service, and Bengoh
Trading Co., Inc. The Debtor will pay an amount equal to
approximately 10 percent of all allowed Class 3 claims. Payment of
Class 3 claims will begin on the first month after the Effective
Date and continue thereafter for 60 months or until paid in full.
Each allowed unsecured creditor will receive a pro rata portion of
the monthly payment which will be $160 for a total payout of $9,600
to unsecured creditors.
The Plan will be funded by the Debtor's cash on hand as well as net
operating income earned as a result of its operation of its
business in Johnson City, New York.
A full-text copy of the Second Amended Disclosure Statement dated
March 16, 2020, is available at https://tinyurl.com/reecgjo from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Peter A. Orville, Esq.
ORVILLE & MCDONALD LAW, PC
30 Riverside Drive
Binghamton NY 13905
Tel: (607) 770-1007
Fax: (607) 770-1110
About Phuong Nam Vietnamese Restaurant
Phuong Nam Vietnamese Restaurant, LLC, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. N.D.N.Y. Case No.
19-60132) on Jan. 31, 2019. At the time of the filing, the Debtor
was estimated assets of less than $50,000 and liabilities of less
than $500,000. Peter A. Orville, Esq., is the Debtor's bankruptcy
attorney. No official committee of unsecured creditors has been
appointed in the case.
PIER 1 IMPORTS: Committee Seeks to Hire Foley & Lardner as Counsel
------------------------------------------------------------------
The official committee of unsecured creditors of Pier 1 Imports,
Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern
District of Virginia to hire Foley & Lardner, LLP as its legal
counsel.
Foley & Lardner will provide these services to the committee in
connection with the Chapter 11 cases filed by Pier 1 Imports and
its affiliates:
a. administer the cases and exercise oversight with respect to
the Debtors' affairs;
b. prepare legal papers;
c. appear in court, participate in litigation and attend
statutory meetings of creditors;
d. negotiate and evaluate the use of cash collateral, any
proposed debtor-in-possession financing and any other potential
financing alternatives;
e. assist in the negotiation, formulation, drafting and
confirmation of a plan of reorganization or liquidation;
f. investigate unencumbered assets, liabilities and financial
condition of the Debtors, prior transactions and operational issues
concerning the Debtors that may be relevant to the cases;
g. assist in the negotiation and formulation of any proposed
sale of the Debtors' assets; and
h. communicate with the committee's constituents.
The hourly rates charged by the firm are as follows:
Partner $660 - $1,560
Of Counsel $525 - $1,120
Senior Counsel $560 - $920
Special Counsel $275 - $820
Associate $365 - $780
Paraprofessional $130 - $405
The attorneys and paralegals who are expected to handle the cases
are:
Erika Morabito Partner $1,140
Paul Labov Partner $1,040
Brittany Nelson Partner $850
Tim Mohan Associate $645
Janelle Harrison Paralegal $245
Foley & Lardner is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Erika L. Morabito, Esq.
Brittany J. Nelson, Esq.
Foley & Lardner LLP
3000 K Street, NW, Suite 600
Washington, DC 20007-5109
Telephone: (202) 672-5300
Facsimile: (202) 672-5399
E-mail: emorabito@foley.com
bnelson@foley.com
-- and --
Paul J. Labov, Esq.
Foley & Lardner LLP
90 Park Avenue
New York, New York 10016-1314
Telephone: (212) 682-7474
Facsimile: (212) 687-2329
E-mail: plabov@foley.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.
The U.S. Trustee for Region 4 appointed a committee of unsecured
creditors. The committee tapped Foley & Lardner, LLP and Cole
Schotz P.C. as its legal counsel, and Province, Inc. as its
financial advisor.
PLASKOLITE PPC: S&P Alters Outlook to Negative on Reduced Demand
----------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based acrylic and
polycarbonate plastic sheet manufacturer Plaskolite PPC
Intermediate II LLC to negative from stable, and it affirmed its
'B-' issuer credit rating on the company.
"Our economists forecast a recession occurring in the first half of
2020 that will hurt Plaskolite PPC Intermediate II LLC's end-market
demand. We anticipate that the effects of shelter-in-place and
other coronavirus-containment measures will push the global economy
into a recession. This will result in a year-over-year decline in
U.S. GDP of 1.3%, with a contraction in the first quarter followed
by a 12% decline in second-quarter 2020. As a result of the
anticipated slowdown in economic activity, we expect lower demand
from Plaskolite's various end markets. About 60% of Plaskolite's
revenues are tied to repair and remodeling, and we expect the end
markets tied to those activities to be the most affected, followed
by those dependent on consumer, industrial, and investment
spending," S&P said.
The negative outlook reflects S&P's expectation that Plaskolite's
leverage will remain about 9x, with interest coverage at about 1.5x
over the next 12 months. Credit measures could weaken as
shelter-in-place and other coronavirus-containment measures further
hurt economic activity.
"We could lower our rating on Plaskolite over the next 12 months if
its financial commitments appear unsustainable over the long term,
even if we believe the company may not face a credit or payment
crisis in that period. This could occur if EBITDA interest coverage
declines to below 1x," S&P said.
"We could revise our outlook on Plaskolite back to stable over the
next 12 months if the impact of the pandemic on Plaskolite is less
than anticipated, resulting in EBITDA interest coverage staying
above 1.5x and debt to EBITDA declining to below 7x," the rating
agency said.
PREMIER BRANDS: S&P Alters Outlook to Negative, Affirms 'B-' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Premier Brands Group
Holdings LLC to negative from positive and affirmed its 'B-' issuer
credit rating on U.S. jeans, apparel, and jewelry wholesaler
Premier Brands Group Holdings LLC.
"The outlook revision reflects our belief that weakening economic
and consumer spending activity, combined with mass retail store
closures, will negatively affect Premier's EBITDA and cash flow.
The coronavirus pandemic has led to a global slowdown and many
retailers have responded to the fears of contagion by closing
stores across the U.S. We estimate that Premier's leverage was in
the low- to mid-3x area as of the end of 2019, which we view as
moderate relative to that of its similarly rated peers. Many of
Premier's large retail customers, including Walmart, Costco, and
Sam's Club, are considered essential businesses and will remain
open even in cities with strict lockdowns. Still, we believe
consumers shopping in these stores will primarily be focused on
purchasing food and other essential goods rather than shopping for
apparel," S&P said.
"The negative outlook reflects our belief that the pandemic will
significantly affect Premier's sales and cash flow. Specifically,
we believe the company's leverage will likely increase to at least
the high-4x area, which will pressure its covenants and cash flow,"
the rating agency said.
S&P could lower its ratings on Premier if the company's EBITDA
falls significantly, such that its EBITDA interest coverage metric
declines to the mid-1x area, or its liquidity becomes strained. The
rating agency could also lower its rating if it believes the
company will breach its total leverage covenant or that its free
cash flow will remain negative for a prolonged period.
"We could revise our outlook on Premier to stable if we are
confident the decline in its demand will be mild enough that its
free cash flow will remain positive and it will sustain interest
coverage in at least the high-1x area and adequate liquidity," S&P
said.
PRODIGY DIALYSIS: Seeks to Hire Kotzan CPA as Accountant
--------------------------------------------------------
Prodigy Dialysis, LLC, seeks authority from the US Bankruptcy Court
for the Western District of Pennsylvania to employ an accountant.
The Debtor requires the assistance of Kotzan CPA & Associates, P.C.
as accountant to prepare and file its annual tax returns, and other
financial matters including but not limited to accounting and
bookkeeping services so as to be in compliance with local, state,
and federal tax requirements and regulations. Additionally, the
proposed accountant may assist in the preparation of the required
Monthly Operating Reports.
The accountant will be paid on an hourly rate basis.
Kotzan CPA and its employees and agents are "disinterested
persons", according to court filings.
The firm can be reached through:
Kimberly A. Dorchak, CPA
Brenda A. Pawlowski, CPA
Kotzan CPA & Associates, P.C.
Budfield Professional Building
334 Budfield Street, Suite 180
Johnstown, PA 15904
Phone: 814-269-4912
Fax: 814-266-9517
About Prodigy Dialysis
Prodigy Dialysis, LLC owns and operates a dialysis center located
at 105 Metzler Street Johnstown, Pa.
Prodigy Dialysis filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Penn. Case No.
20-70105) on Feb. 25, 2020. In the petition signed by George J.
Frem, M.D., sole member and president, the Debtor disclosed
$424,814 in assets and $1,134,220 in liabilities.
Judge Jeffery A. Deller presides over the case.
The Debtor is represented by Kevin J. Petak, Esq. at Spence,
Custer, Saylor, Wolfe & Rose, LLC.
PROJECT SILVERBACK: S&P Alters Outlook to Neg., Affirms 'B-' ICR
----------------------------------------------------------------
S&P Global Ratings affirmed its ratings, including its 'B-' issuer
credit rating on Project Silverback Holding Corp.'s (d/b/a Sparta
Systems Inc.) and revised the outlook to negative from stable.
"We based the negative outlook on the potential for liquidity to
weaken in excess of our current base case scenario as customers
navigate the current macro environment caused by the coronavirus.
Despite not having exposure to more at-risk industries
(restaurants, hospitality, retail, transportation), we believe
biopharma and medical device companies will see some impact from
the fallout caused by the pandemic, with some choosing to focus on
maintaining core operations and existing systems. This could result
in delays in signing new customers to its software as a service
(SaaS) platform. For new customers already signed prior to the
coronavirus outbreak, we expect there to be implementation delays.
In addition, many companies are either freezing new hires or
reducing headcount. Sparta may experience reduced demand for its
licenses with existing customers that have yet to transition to its
SaaS platform as this is more closely tied to headcount growth,"
S&P said.
S&P is revising its outlook to negative due to broader
macroeconomic factors caused by the COVID-19 pandemic, which if
prolonged and in excess of its current stress scenario could impair
Sparta Systems ability to generate sufficient liquidity to meet its
debt obligations.
"We could lower the rating if the current macroeconomic environment
resulting from the pandemic results in weakened operating
performance, increased competition leading to significant attrition
rates of its larger clients, or the transition to SaaS leads to
substantially weaker revenue and cash generation versus our base
case expectation (such that free cash flow becomes materially
negative and overall liquidity weakens), and we come to view the
capital structure as unsustainable," S&P said.
"We could return the outlook to stable within the next 12 months if
we come to believe that Sparta's market share and
customer-attrition rates have not materially deviated from
historical trends stemming from the pandemic and we believe the
company will sustain sufficient liquidity for its ongoing
transition to SaaS from license," the rating agency said.
PROPULSION ACQUISITION: Moody's Cuts CFR to Caa2, Outlook Negative
------------------------------------------------------------------
Moody's Investors Service downgraded its ratings for Propulsion
Acquisition, LLC (dba Belcan), including the company's corporate
family rating (CFR, to Caa2 from B3) and probability of default
rating (to Caa2-PD from B3-PD), along with the rating for its
senior secured first lien term loan (to Caa2 from B3). The ratings
outlook is negative.
"The downgrades reflect Belcan's growing refinancing risk given its
levered financial profile and sizeable debt maturities in 2021,"
says Shirley Singh, Moody's lead analyst for Belcan. Moody's
expects that the macroeconomic headwinds and current market
dislocation stemming from the widespread COVID-19 crisis will
challenge the company's ability to fully satisfy its approaching
debt maturities. Moody's also considers the risk that Belcan's
end-markets, particularly the commercial aerospace sector, will
weaken further over the next 12 months, exerting a significant
pressure on the company's earnings that will in turn erode
liquidity.
The rapid and widening spread of the coronavirus outbreak, the
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 aerospace and
other industrial sectors are exposed to the shock given their
sensitivity to broad-based shifts in market sentiment and consumer
demand. 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 in part reflect the impact on
Belcan of the breadth and severity of the shock, and the broad
deterioration in credit quality it has triggered.
The following rating actions were taken:
Downgrades:
Issuer: Propulsion Acquisition, LLC
Corporate Family Rating, Downgraded to Caa2 from B3
Probability of Default Rating, Downgraded to Caa2-PD from B3-PD
Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD4) from
B3 (LGD4)
Outlook Actions:
Issuer: Propulsion Acquisition, LLC
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Belcan's Caa2 CFR broadly reflects the company's rising refinancing
risk given upcoming debt maturities, an elevated leverage profile
(6.8x Moody's-adjusted debt/EBITDA) and exposure to cyclical
end-markets. Belcan's highly competitive market environment and
high customer concentration increases the company's vulnerabilities
to shifts in customer demand. Nonetheless, the rating is supported
by the company's solid market position, its long-standing customer
relations and diversification benefits from recent acquisitions.
Belcan's governance risk is high characterized by its history of
debt-financed acquisitions and dividends.
The negative outlook reflects Moody's expectation that weakness in
Belcan's end-markets will pressure the company's earnings, and that
refinancing risk will rise as the company's debt maturities
approach.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company refinances its debt on
manageable economic terms, and free cash flow remains positive and
EBITA-to-interest is sustained above 1.0x.
The ratings could be downgraded if the company's earnings and
liquidity decline such that the risk of default increases further
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Headquartered in Cincinnati, Ohio, Propulsion Acquisition, LLC (dba
Belcan) provides engineering services, technical staffing solutions
and information technology services to customers in a wide variety
of end-markets including propulsion, avionics, chemical, heavy
equipment, automotive, government, and energy. Belcan is owned by
AE Industrial Partners. Revenue for the twelve months ended
September 2019 was $840 million.
PS HOLDCO: S&P Lowers ICR to 'B'; Outlook Negative
--------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on PS Holdco
LLC to 'B' from 'B+'. The outlook is negative. S&P also lowered its
issue-level rating on the company's term loan to 'B' from 'B+'.
"We assume freight volumes in the company's end markets could
weaken due to the coronavirus' impact on the U.S. economy. With
flat GDP in the U.S. in 2020, we expect the coronavirus pandemic to
hurt demand for PS Holdco's freight shipping services. The company
serves the building materials, steel, aluminum, pipe and tube, and
industrial products industries. As a result, we expect revenues to
decline, with lower EBITDA margins, and the company's debt leverage
to increase this year," S&P said.
The negative outlook on PS Holdco reflects S&P's expectation that
demand in the company's end markets could weaken due to the impact
of the coronavirus, resulting in lower freight volumes and
weakening credit metrics. The rating agency assumes PS Holdco's
debt leverage will rise in 2020 as a result.
"We could lower our ratings on PS Holdco in the next 12 months if
we believed adjusted debt to EBITDA would increase above 6x or that
funds from operations (FFO) to debt would decline to below 6%. This
could occur if a downturn in the economy and weaker industrial
production caused the flatbed market to weaken beyond our
expectations," S&P said.
"We could revise our outlook to stable if PS Holdco maintained
adjusted debt to EBITDA approaching 5x and an FFO-to-debt ratio
approaching 12% on a sustained basis. This could occur if, for
example, the company's end markets improved, along with increased
EBITDA margins and higher debt paydown than we anticipated," the
rating agency said.
PURE GLOBAL: Gets Initial Order Under CCAA; E&Y Is Monitor
----------------------------------------------------------
Pure Global Cannabis Inc. (TSXV: PURE) (OTC Pink: PRCNF) and its
wholly-owned subsidiaries PureSinse Inc., 237A Advance Inc., 237B
Advance Inc., SPRQ Health Group and The Great Canadian Hemp Company
Ltd. obtained from the Ontario Superior Court of Justice
(Commercial List) granting them protection under the Companies'
Creditors Arrangement Act.
Ernst & Young Inc. was appointed as monitor for the companies. The
firm has retained Osler, Hoskin & Harcourt LLP as its independent
counsel.
In connection with the CCAA filing, the Companies entered into a
debtor-in-possession facility term sheet with Hillmount Capital
Inc. for financing in the initial amount of up to $700,000 which
facility can be increased to $4 million with approval of the Court.
Advances under the DIP Facility are subject to a Court-ordered
priority charge in favour of Hillmount Capital Inc. to secure the
obligations of the Companies.
The Companies retained as counsel:
Brauti Thorning LLP
161 Bay Street, Suite 2900
Toronto, ON M5J 2S1
Caitlin Fell
Tel: 416-304-7002
Email: cfell@btlegal.ca
Sharon Kour
Tel: 416-304-6517
Fax: 416-362-8410
Email: skour@btlegal.ca
Ernst & Young Inc., the Monitor, can be reached at:
Ernst & Young Inc.
100 Adelaide Street West
Toronto, ON M5H 0B3
Alex Morrison
Tel: 416-941-7743
Email: alex.f.morrison@ca.ey.com
David Saldanha
Tel: 416-943-4431
Email: david.saldanha@ca.ey.com
The Monitor retained as counsel:
Osler, Hoskin & Harcourt LLP
100 King Street West
1 First Canadian Place, Suite 6200
P.O. Box 50
Toronto, ON M5X 1B8
Marc Wasserman
Tel: 416-862-4908
Email: mwasserman@osler.com
Mary Paterson
Tel: 416-862-4924
Email: MPaterson@osler.com
Counsel for Hillmount Capital:
Fred Tayar & Associates
Professional Corporation
1200-65 Queen St W
Toronto, ON M5H 2M5
Attn: Fred Tayar
Email: fred@fredtayar.com
A copy of the order and other Court materials and information
related to the Company's CCAA proceedings is available at
https://www.ey.com/ca/pureglobal.
Pure Global Cannabis Inc. -- https://pureglobal.com/ -- engages in
the production and sale of cannabis products in Canada.
RANCHO CIELO: Hires Jeffrey S. Shinbrot as Counsel
--------------------------------------------------
Rancho Cielo Estates, Ltd., seeks authority from the U.S.
Bankruptcy Court for the Central District of California to employ
Jeffrey S. Shinbrot, APLC, as counsel to the Debtor.
Rancho Cielo requires Jeffrey S. Shinbrot to:
a. assist the Debtor in all aspects of the Chapter 11 case,
including legal advice and legal services prior to the
filing of a chapter 11 case;
b. file schedules and statements as required under the
Bankruptcy Code;
c. assist in the preparation and formulation of a disclosure
statement and plan of reorganization;
d. provide advice and assistance in connection with the
requirements of the U.S. Trustee;
e. represent in any proceedings and hearings in the Bankruptcy
Court and to assist the Debtor; and
f. perform such legal services as may be necessary or required
in the Chapter 11 proceedings.
Jeffrey S. Shinbrot will be paid at these hourly rates:
Attorneys $625
Paralegals $175
Jeffrey S. Shinbrot received total pre-Petition retainers for these
services in the amount of $55,000, on December 20, 2018. Payment
was placed in the Firm's segregated Attorney/Client Trust account.
The amount of $48,625, of the retainers was expended prior to the
filing of the instant emergency bankruptcy petition, plus the
filing fee of $1,717, leaving a remaining balance of $4,658 in the
segregated Attorney-Client Trust account.
Jeffrey S. Shinbrot will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Jeffrey S. Shinbrot, partner of Jeffrey S. Shinbrot, APLC, 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.
Jeffrey S. Shinbrot can be reached at:
Jeffrey S Shinbrot, Esq.
JEFFREY S. SHINBROT, APLC
15260 Ventura Blvd., Suite 1200
Sherman Oaks, CA 91403
Tel: (310) 659-5444
E-mail: jeffrey@shinbrotfirm.com
About Rancho Cielo Estates
Rancho Cielo Estates, LTD, based in Gardena, CA, filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 20-12306) on Feb. 29, 2020. In
the petition signed by Peter Fagrell, president, the Debtor
disclosed $3,207,977 in assets and $142,576,987 in liabilities.
The Hon. Sheri Bluebond oversees the case. Jeffrey S. Shinbrot,
Esq., at Jeffrey S. Shinbrot, APLC, serves as bankruptcy counsel to
the Debtor.
RANGE RESOURCES: Moody's Lowers CFR to B2, Outlook Remains Negative
-------------------------------------------------------------------
Moody's Investors Service downgraded Range Resources Corporation's
Corporate Family Rating to B2 from Ba3 and its Probability of
Default Rating to B2-PD from Ba3-PD. Concurrently, Moody's
downgraded the company's senior unsecured notes rating to B3 from
B1, and senior subordinated notes rating to Caa1 from B2. The
Speculative Grade Liquidity rating remains SGL-2. The rating
outlook remains negative.
"While Range is well hedged for 2020, the expectation of continued
weakness in natural gas prices and a high amount of upcoming debt
maturities between 2021-2023 weigh heavily in Moody's assessment
during this environment of unsupportive capital markets," said
Arvinder Saluja, Moody's Vice President.
Downgrades:
Issuer: Range Resources Corporation
Probability of Default Rating, Downgraded to B2-PD from Ba3-PD
Corporate Family Rating, Downgraded to B2 from Ba3
Senior Subordinated Notes, Downgraded to Caa1 (LGD6) from B2
(LGD6)
Senior Unsecured Notes, Downgraded to B3 (LGD4) from B1 (LGD4)
Outlook Actions:
Issuer: Range Resources Corporation
Outlook, Remains Negative
RATINGS RATIONALE
The rating actions reflect the ongoing deterioration in global oil
& gas commodity prices, the debt maturities that Range has over the
next several years and limited hedges after 2020. Range has $720
million debt maturing by 2022, and another $1.2 billion in 2023
(inclusive of the bank credit facility). In addition, 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 E&P sector has been one of the
sectors most significantly affected by the decline in oil & gas
commodity prices. More specifically, Range's credit profile is
vulnerable to shifts in market sentiment in these unprecedented
operating conditions. 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 Range of the breadth and severity of the shock, and the
uncertainty over when oil & gas prices might recover.
Moody's expects Range to have good liquidity through 2020 as
reflected by the SGL-2 Speculative Grade Liquidity Rating, with
breakeven to modestly positive free cash flow through 2020. Range
has about $1.7 billion in borrowing capacity under its senior
secured revolving credit facility due April 2023, which was upsized
to $2.4 billion from $2 billion in October 2019. It had $477
million borrowings and $250 million of letters of credit
outstanding under its revolver at year end 2019. The borrowing base
for the revolving credit facility was subject to an annual
redetermination by May 2020, but has been already reaffirmed at $3
billion for 2020. The company's next maturities occur in June 2021
with $72 million of debt coming due and in the second half of 2022
with $650 million of debt coming due.
Range's B2 CFR is constrained by its sensitivity to natural gas
prices with natural gas contributing about 70% of production, a
limited hedge position after 2020, and increased refinancing risk.
Range's low cost structure helps the company generate modest free
cash flow; however, weak commodity prices continue to stress the
company's earnings despite the expected reduction in operating
costs. The weak commodity price and capital markets backdrops make
the company's need to proactively address significant maturities
coming due in 2021-2023 more pressing. The B2 CFR is supported by
Range's strong operating efficiency, large scale, and good
asset-based leverage metrics. In addition, Range benefits from
long-lived reserves, historically conservative financial policies,
and a high level of operational control over its reserves, enabling
significant discipline over the pace of future development.
Range's senior unsecured notes are rated B3, one notch below the
assigned B2 CFR, due to their structural subordination to the
company's $2.4 billion senior secured revolving credit facility.
The company's subordinated notes are rated Caa1 reflecting their
subordinated position relative to the secured and unsecured debt in
the capital structure.
The negative outlook reflects the increased likelihood that low
energy prices and tight capital market conditions could prevail for
an extended period of time.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Range's ratings will likely be downgraded if retained cash flow to
debt approaches 10%, if the leveraged full-cycle ratio drops
towards 1x, or if the company undertakes any actions that are
deemed by Moody's to be a distressed exchange of debt. The change
of outlook to stable and/or a positive rating action would be
contingent upon Range's ability to substantially mitigate
refinancing risk and reduce debt. Moody's could consider an upgrade
if retained cash flow to debt remains above 20% and the leveraged
full-cycle ratio (LFCR) approaches 1.5x in a meaningfully improving
commodity price environment.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
RAVN AIR: Case Summary & 30 Largest Unsecured Creditors
-------------------------------------------------------
Lead Debtor: Ravn Air Group, Inc.
4700 Old International Airport Road
Anchorage, AK 99502
Business Description: Ravn Air Group -- https://www.flyravn.com --
was formed through the combination of five
Alaskan air transportation businesses in
2009, creating the largest regional air
carrier and network in the state. Ravn owns
and, until the COVID-19-related disruptions,
operated 72 aircraft, at 21 hub airports and
73 facilities, serving 115 destinations in
Alaska with up to 400 daily flights. Until
the COVID-19-related disruptions, the
Debtors had over 1,300 employees (non-
union), and it carried over 740,000
passengers on an annual basis. The
Company provides air transportation and
logistics services to the passenger, mail,
charter, and freight markets in Alaska,
pursuant to U.S. Department of
Transportation approval as three separate
certificated air carriers. Two of the
carriers (RavnAir ALASKA and PenAir) operate
under Federal Aviation Administration
Part 121 certificates and the other (RavnAir
CONNECT) operates under an FAA Part 135
certificate. In addition to carrying
passengers, many of whom fly on Medicaid-
subsidized tickets, other key customers
include companies in the oil & gas industry,
the seafood industry, the mining industry,
and the travel and tourism industries.
Chapter 11
Petition Date: April 5, 2020
Court: United States Bankruptcy Court
District of Delaware
Eight affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Ravn Air Group, Inc. (Lead Case) 20-10755
Ravn Air Group Holdings, LLC 20-10756
JJM, Inc. 20-10757
HoTH, Inc. 20-10758
Corvus Airlines, Inc. 20-10759
Frontier Flying Service, Inc. 20-10760
Hageland Aviation Services, Inc. 20-10761
Peninsula Aviation Services, Inc. 20-10762
Debtors'
General
Bankruptcy
Counsel: Tobias S. Keller, Esq.
Jane Kim, Esq.
Thomas B. Rupp, Esq.
KELLER BENVENUTTI KIM LLP
650 California Street, Suite 1900
San Francisco, California 94108
Tel: (415) 496-6723
Fax: (650) 636-9251
Email: tkeller@kbkllp.com
jkim@kbkllp.com
trupp@kbkllp.com
Debtors'
Special
Corporate
Counsel &
Local
Bankruptcy
Counsel: Victoria A. Guilfoyle, Esq.
Stanley B. Tarr, Esq.
Jose F. Bibiloni, Esq.
BLANK ROME LLP
1201 N. Market Street, Suite 800
Wilmington, Delaware 19801
Tel: (302) 425-6400
Fax: (302) 425-6464
Email: guilfoyle@blankrome.com
tarr@blankrome.com
jbibiloni@blankrome.com
Debtors'
Financial
Advisor: CONWAY MACKENZIE, LLC
Debtors'
Claims &
Noticing
Agent: BANKRUPTCY MANAGEMENT SOLUTIONS, INC.
DBA STRETTO
https://cases.stretto.com/ravnair
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $100 million to $500 million
The petitions were signed by John Mannion, chief financial
officer.
A copy of Ravn Air Group's petition is available for free at
PacerMonitor.com at:
https://is.gd/nTaPpj
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Olivery Wyman, Inc./Cavok Trade Debts $2,225,854
P.O. Box 3800-28
Boston, MA 02241
Steven Harp
Tel: 617-424-3200
Fax: 617-424-3300
2. Crowley Fuels Alaska Trade Debts $1,603,449
201 Arctic Slope Avenue
Anchorage, AK 99518
Tel: 866-770-5587
3. Standard Aero Trade Debts $1,257,878
33 Allen Dyne Road
Winnipeg, Manitoba, CA R3H 1A1
Mark O'Keefe
Tel: 902-436-1333
Fax: 902-436-0700
4. AvMax Aviation Services Trade Debts $816,480
2055 Pegasus Road NE
Calgary, Alberta, CA T2E8C3
Evan Gao
Tel: 403-291-2464
Email: evan.gao@avmax.com
5. Boeing Distribution, Inc. Trade Debts $654,423
P.O. Box 842267
Dallas, TX 75284-2267
Connie Moore
Tel: 1.800.284-2552
6. STS Mod Center Trade Debts $634,586
2000 NE Jensen Beach Blvd,
Jensen Beach, FL 34957
Travis Shillington
Tel: 1.800-800.2400
7. Petro Star, Inc. Trade Debts $574,589
3900 C Street, Suite 802
Anchorage, AK 99503
Mark John
Tel: 1.877-344.2661
8. Sky Service F.B.O., Inc. Trade Debts $444,317
6120 Midfield Road
Mississauga, Ontario
CA L5P 1B1
Terry Miller
Tel: 905-678-5668
Fax: 905-362-5906
Email: terry_miller@skyservice.com
9. State of Alaska Department of Trade Debts $381,526
Transportation
P.O. Box 112500
Juneau, AK 99511-2500
John MacKinnon
Tel: 907-465-3900
10. Eskimos, Inc. Trade Debts $327,967
P.O. Box 536
Barrow, AK 99723
Tel: 907-852-3835
11. Pegasus Aviation Services, LLC Trade Debts $269,740
3901 Old International Airport Road
Anchorage, AK 99502
Arsim Lena
Tel: 907-240-2585
Email: Arsim.Lena@pegasusanc.com
12. GCI Trade Debts $251,895
P.O. Box 99001
Anchorage, AK 99509-9001
Olivia Werdal
Tel: 907-265-5454
Email: owerdal@gci.com
13. Frosty Fuels, LLC Trade Debts $205,133
4000 Old Seward Hwy, Suite 301
Anchorage, AK 99503
14. Napa Auto Parts/Genuine Parts Trade Debts $196,460
Company, Inc.
File 56893/File 56898
Los Angeles, CA 90074-6893
Chris Meisler
Tel: 907-751-6265
Email: Chris_Meisler@genpt.com
15. Saab Defense and Security Trade Debts $163,861
USA, LLC
20700 Loudoun County Parkway
Ashburn, VA 20147
Jacqueline Newcomb
Tel: 703-406-7281
Fax: 703-406-7202
Email: Jacqueline.Newcomb@saabusa.com
16. SoftwareOne, Inc. Trade Debts $152,393
20875 Crossroads Circle, Suite 1
Wakesha WI 53186
Rachel Layman
Tel: 800-444-9890
Fax: 262-317-5554
Email: Rachel.Layman@softwareone.com
17. Fox Rothschild, LLP Trade Debts $143,553
8300 Greensboro Drive, Suite 1000
Tysons, VA 22102
Barbara Butler
Tel: 703-454-7650
Fax: 703-454-7651
Email: bbutler@forxrothschild.com
18. Aircraft Propeller Trade Debts $137,982
Services, LLC
595 Telser Road
Lake Zurich, IL 60047
Shelly Dunbar
Tel: 847-541-1133
Fax: 847-541-0176
Email: MicheleDunbar@aircraftpropeller.com
19. Brothers Aviation Maintenance Trade Debts $135,128
Service, Inc.
406 S. Main Street, Clover, SC
29710
Tel: 803-222-6006
Fax: 803-222-6222
20. FedEx Trade Debts $134,247
P.O. Box 94515, Palatine, IL
60094-4515
Tel: 866-728-8587
21. Flight Safety International Trade Debts $112,225
Marine Air Terminal,
Laguardia Airport
Flushing, NY 11371-1061
Tel: 718-565-4100
Fax: 718-565-4133
22. Northern Air Cargo Trade Debts $97,750
3900 Old International Airport Road
Anchorage, AK 99502
Colin Dolan
Email: cdolan@nac.aero.com
23. Walker Enterprises Trade Debts $97,610
P.O. Box 58239
Fairbanks, AK 99701
Maccoy Walker
Tel: 907-750-6490
Email: walkerenterprisesak@gmail.com
24. Global Aviation Trade Debts $93,310
920 Aldrin Dr, Suite 250
Eagan, MN 55121-2567
Tel: 763-324-7370
Fax: 651-340-7541
25. Pratt & Whitney Canada Leasing Trade Debts $91,222
1000 Boul. Marie-Victorin
Longueuil, Quebec, CA J4G 1A1
Baljeet Gill
Tel: 450-647-8089
Email: Baljeet.Gill@pwc.ca
26. Mountain Aerospace, Inc. Trade Debts $77,172
6970 W 116th Avenue, Unit D
Broomfield, CO 80020
Angela Brandenstein
Tel: 303-404-3248
Fax: 303-404-3291
Email: angela@mountainaerospace.com
27. International Business Machines Trade Debts $75,488
Corporation
3039 E Cornwallis
Resrch Tri Pk, NC 27709
28. International Aviation Service Trade Debts $74,253
4200 W. 50th Avenue
Anchorage, AK 99502
Ashlee Anderson
Tel: 907-243-0756
Fax: 907-243-4183
Email: fuelaccounting@iasak.com
29. InAir Aviation Services Trade Debts $68,923
8225 Country Club Place
Indianapolis, IN 46214
Tel: 317-271-0195
Fax: 317-271-0345
30. Airport Enterprises, LLC Trade Debts $68,901
dba Contract Aircraft Technicians
P.O. Box 7276
Kalispell, MT 59904
Peter Gross
Tel: 406-270-0910
RAYONIER ADVANCED: Pangaea, et al., Have 5.2% Stake as of March 31
------------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, these entities and individuals reported beneficial
ownership of shares of common stock of Rayonier Advanced Materials
Inc. as of March 27, 2020:
Shares Percent
Beneficially of
Reporting Person Owned Class
---------------- ------------ -------
Pangaea Ventures, L.P. 2,271,043 3.6%
Hudson Investors, Ltd. 991,578 1.6%
Ortelius Advisors, L.P. 2,271,043 3.6%
Ortelius Capital Partners, LLC 991,578 1.6%
Peter DeSorcy 3,264,071 5.2%
As of March 31, 2020, the Reporting Persons, in total, beneficially
own 3,264,071 shares of Common Stock. The Shares represent
approximately 5.2% of the Issuer's outstanding Common Stock.
From March 23, 2020 through March 27, 2020, Pangaea sold a portion
of the Common Stock owned by Pangaea in open market transactions.
The sale of a portion of the Common Stock owned by Pangaea was the
result of portfolio construction and risk management decisions.
A full-text copy of the regulatory filing is available for free
at:
https://is.gd/kdtOp7
About Rayonier Advanced
Headquartered in Jacksonville, Florida, Rayonier Advanced Materials
Inc. -- http://www.rayonieram.com/-- is a producer of
cellulose-based technologies, including high purity cellulose
specialties, a natural polymer commonly found in filters, food,
pharmaceuticals and other industrial applications. The Company
also manufactures products for lumber, paper and packaging markets.
The Company has manufacturing operations in the U.S., Canada, and
France.
Rayonier Advanced reported a net loss available to common
stockholders of $31.03 million for the year ended Dec. 31, 2019.
* * *
As reported by the TCR on March 6, 2020 S&P Global Ratings lowered
its issuer credit rating on Rayonier Advanced Materials Inc. (RYAM)
to 'CCC+' from 'B-' and lowered its issue-level rating on its
senior unsecured notes to 'CCC' from 'CCC+'. The downgrade
reflects the severe deterioration in RYAM's margins, which caused
its leverage to rise to more than 10x as of Dec. 31, 2019, from
3.6x as of Dec. 31, 2019 and 7.4x as of Sept. 30, 2019.
RESOLUTE INVESTMENT: Moody's Lowers CFR to B1, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service downgraded Resolute Investment Managers,
Inc.'s Corporate Family Rating to B1 from Ba3 and Probability of
Default Rating to B1-PD from Ba3-PD. Concurrently, Moody's
downgraded the first lien credit facilities' instrument rating to
Ba3 and the second lien secured credit facilities' instrument
rating to B3. The outlook remains stable.
Issuer: Resolute Investment Managers, Inc.
Corporate Family Rating, downgraded to B1 from Ba3
Probability of Default Rating, downgraded to B1-PD from Ba3-PD
Senior Secured First Lien Term Loan Facility, downgraded to Ba3
from Ba2
Senior Secured Revolving Credit Facility, downgraded to Ba3 from
Ba2
Senior Secured Second Lien Term Loan Facility, downgraded to B3
from B2
Outlook Actions
Issuer: Resolute Investment Managers, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The downgrade reflects its view that the increasingly uncertain
economic and financial market conditions stemming from the spread
of the coronavirus outbreak will have a sustained impact on RIM's
asset under management (AUM) levels and earnings in 2020.
Improvements made to the company's asset class mix over the last
several years with the expansion of its sub-advisory relationships
and the acquisition of new affiliates should make RIM's AUM base
more resilient to market shocks but higher asset price and fund
flow volatility will suppress the company's revenue and increase
financial leverage to levels that are more consistent with a B1
rating.
RIM ended 2019 with a leverage ratio of 4.0x (debt-to-EBITDA as
adjusted by Moody's) which was down from 4.4x at year-end 2018.
Despite the improving leverage picture, flows into the company's
mutual fund complex remain challenged. For the full-year 2019, the
company's mutual fund complex AUM contracted by approximately
18.4%. Elevated flow volatility in the mutual fund complex, if
sustained in 2020, will put additional pressure on the company's
earnings over the next several quarters.
The stable outlook reflects its view that despite the challenging
operating environment, RIM's improved AUM mix and revenue
diversity, low refinancing risks and solid liquidity profile
provides it flexibility to manage through a prolonged downturn.
Recent fund launches and affiliate acquisitions provide new
investment capabilities that continue to appeal to investors and
provide an offset to the company's traditional active equity market
exposure.
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 asset
management industry has been one of the sectors affected by the
shock given the severe decline in asset values, increase in risk
aversion and decrease in market liquidity. 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 RIM of the breadth and severity
of the shock, and the deterioration in credit quality it has
triggered.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:
RIM's ratings could be upgraded if financial leverage is sustained
below 4x; or outflows are stemmed such that there is an improvement
in asset resiliency scores; or the financial contribution of new
affiliates are able to stabilize revenue and profit margins.
Conversely, RIM's ratings could be downgraded if leverage is
sustained above 7x debt-to-EBITDA; AUM levels continue to decay, or
there is a key person turnover within the senior management ranks.
The company's B1 corporate family rating reflects its modest scale,
concentrated assets under management (AUM) and high financial
leverage. These risks are partially offset by the company's solid
cash flow generation capacity, healthy EBITDA margins and strong
distribution platform which has historically delivered organic
growth rates above industry peers.
RIM is a multi-affiliate asset manager that provides investment
strategies and services to institutions, retirement plans and
retail investors. At year-end 2019, the company had $87 billion of
assets under management.
The principal methodology used in these ratings was Asset Managers
Methodology published in November 2019.
REYES DRYWALL: Gets Court Approval to Hire Bankruptcy Attorney
--------------------------------------------------------------
Reyes Drywall, Inc. received approval from the U.S. Bankruptcy
Court for the Eastern District of California to employ David
Johnston, Esq., as its legal counsel in connection with its Chapter
11 case.
Mr. Johnston will provide these services:
(a) advise the Debtor of its rights, powers and obligations in
its bankruptcy case and in the management of the estate;
(b) take necessary actions to enforce the automatic stay and
to oppose motions for relief from the automatic stay;
(c) take necessary actions to recover and avoid any
preferential or fraudulent transfers;
(d) appear with the Debtor's president at the meeting of
creditors, initial interview with the U.S. Trustee, status
conference, and other hearings held before the bankruptcy court;
(e) review and, if necessary, object to proofs of claim;
(f) take steps to obtain court authority for the sale of
assets; and
(g) prepare a plan of reorganization and a disclosure
statement and take all steps necessary to bring the plan to
confirmation.
The attorney will charge an hourly fee of $360 for his services.
Mr. Johnston does not hold any interest adverse to the 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:
David C. Johnston, Esq.
Attorney at Law
1014 16th Street
P.O. Box 3212
Modesto, CA 95353- 3212
Phone: (209) 521-6260
Fax: (209) 521-5971
About Reyes Drywall Inc.
Reyes Drywall, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Cal. Case No. 20-90118) on Feb. 12,
2020, listing under $1 million in both assets and liabilities.
Judge Ronald H. Sargis oversees the case. David C. Johnston, Esq.,
is the Debtor's legal counsel.
RHC LLC: Seeks to Extend Exclusivity Period to April 24
-------------------------------------------------------
RHC, LLC asked the U.S. Bankruptcy Court for the Middle District of
Florida to extend to April 24 the exclusive period to file a
Chapter 11 plan and solicit acceptances for the plan.
The company also proposed to extend the deadline for filing its
plan and disclosure statement to April 24.
RHC has entered into agreements to sell its two real properties in
Naples, Fla. The company said that that once the properties are
sold, all issues will be resolved in its bankruptcy case without
the need to file a plan, and that it will seek a dismissal of the
case immediately after the closing of the sale.
The sale of the properties is scheduled to close on April 15.
About RHC LLC
Founded on March 13, 2018, RHC, LLC, is a holding company engaged
in real estate development, operations and ownership in Naples,
Fla. It owns the real properties located at 1800 Snook Drive and
1660 Dolphin Court, Naples, Fla.
RHC sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. M.D. Fla. Case No. 19-11853) on Dec. 17, 2019. At the time
of the filing, the Debtor was estimated to have assets of between
$1 million and $10 million and liabilities of the same range. The
Debtor tapped Dal Lago Law as its legal counsel.
RICHARD A. NEISLER JR.: Kizer Updates on Crockett Gin, 3 Others
---------------------------------------------------------------
In the Chapter 11 cases of Richard A. Neisler, Jr., the law firm of
Kizer, Bonds, Hughes & Bowen, PLLC filed an amended report under
Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose
an updated list of creditors that it is representing:
The Bank of Milan
P.O. Box 410
Milan, TN 38358
Centennial Bank
P.O. Box 548
McKenzie, TN 38201
Crockett Gin Company, LLC
19 Broadway Street
Friendship, TN 38034-3857
Volunteer Lenders, Inc.
P.O. Box 647
Union City, TN 38281
The Firm can be reached at:
Kizer, Bonds, Hughes & Bowen, PLLC
Stephen L. Hughes, Esq.
P.O. Box 320
Milan, TN 38358
Tel: (731) 686-1198
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/LqW2Fy
The Chapter 11 case is In re Richard A. Neisler, Jr. (Banks. W.D.
Ten. Case No. 20-10563).
RIVORE METALS: To Seek Plan Confirmation on April 29
----------------------------------------------------
Judge Thomas J. Tucker has ordered that the Disclosure Statement
filed by Rivore Metals, LLC, is granted preliminary approval.
The deadline to return ballots on the Second Amended Plan, as well
as to file objections to final approval of the Disclosure Statement
and objections to confirmation of the Second Amended Plan, is April
20, 2020.
The hearing on objections to final approval of the Disclosure
Statement and confirmation of the Second Amended Plan will be held
on April 29, 2020 at 11:00 a.m., in Room 1925, 211 W. Fort Street,
Detroit, Michigan.
No later than April 24, 2020, the Debtor must file a signed ballot
summary indicating the ballot count under 11 U.S.C. Sec. 1126(c) &
(d).
About Rivore Metals
Rivore Metals, LLC -- http://www.rivore.com/-- is a metals trading
and project management company with offices in the United States
and Canada offering full service trading operations to
international specialized markets for ferrous and non-ferrous scrap
metals.
Rivore Metals filed a voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-53795) on Sept. 27,
2019. In the petition signed by Konstantinos C. Marselis,
president, the Debtor was estimated to have up to $50,000 in assets
and $1 million to $10 million in liabilities.
The case is assigned to Judge Thomas J. Tucker.
Charles D. Bullock, Esq. at Stevenson & Bullock, P.L.C., is the
Debtor's counsel.
The U.S. Trustee for Region 9 appointed a committee of unsecured
creditors on on Oct. 15, 2019.
RJT REAL ESTATE: To Hike Monthly Payments to RMM
------------------------------------------------
RJT Real Estate Holdings, LLC, filed a Chapter 11 Plan and a
Disclosure Statement.
Ballots accepting or rejecting the Plan must be received by 5:00
p.m. Mountain Time, April 17, 2020, or it will not be counted.
Objections to the Disclosure Statement or to the confirmation of
the Plan must be filed with the Court and served upon Debtor's
counsel by not later April 17, 2020. The Court will determine
whether to conditionally and/or finally approve the Disclosure
Statement and confirm the Plan at a hearing or hearings to be held
before the Honorable Judge R Kimball Mosier in Courtroom 369, at
the Frank E. Moss United States Courthouse, 350 South Main Street,
Salt Lake City, Utah 8401.
The identity and fair market value of the estate's assets consists
of a piece of property with a right of first refusal of an adjacent
piece of property. The value of the Property and purchase rights
is estimated to be approximately $300,000. This number will be
updated after further research.
As to secured prepetition claims of RMM Properties, payments will
continue as have been taking place since the filing of the Chapter
11 Plan, except that Debtor will increase its monthly payment to
$1,787.50. This does not imply that Debtor agrees that they owe
that amount each month as they still assert that the Accord reduced
their obligation, but rather to obtain RMM Properties' cooperation
in approving the Plan and Disclosure Statement until the Adversary
Proceeding is settled and the final purchase price is determined.
There are no general unsecured creditors, and thus will not receive
a distribution.
Payments and distributions under the Plan will be funded by the
revenue from rents.
A full-text copy of the Disclosure Statement dated March 16, 2020,
is available at https://tinyurl.com/t464wzy from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Sarah J. Larsen
UTAH BANKRUPTCY LAW CENTER, PLLC
3161 S West Temple, Unit 65817
Salt Lake City, UT 84165
Toll Free (801) 875-4004
E-mail: Sarah.Larsen@utahbankruptcylawcenter.com
About RJT Real Estate Holdings
RJT Real Estate Holdings, LLC sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Utah Case No. 18-29037) on Dec. 4,
2018. At the time of the filing, the Debtor was estimated to have
assets of less than $500,000 and liabilities of less than $100,000.
Judge R. Kimball Mosier oversees the case. The Debtor tapped
Vannova Legal, PLLC, as its legal counsel.
ROAD INFRASTRUCTURE: S&P Alters Outlook to Neg., Affirms CCC+ ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on Road Infrastructure
Investment Holdings Inc. to negative from stable, and affirmed its
'CCC+' issuer credit rating on the company. The 'CCC+' issue-level
and '3' recovery ratings on the company's first-lien debt and the
'CCC-' issue-level and '6' recovery ratings on the company's
second-lien debt remain unchanged.
"The outlook revision to negative reflects our view that Road
Infrastructure's liquidity could become constrained over the next
12 months. Given the current level of uncertainty in the capital
markets, we believe it will remain very difficult for any
speculative-grade issuer to refinance. Since the beginning of the
coronavirus pandemic, the level of activity in the capital markets
has been extremely limited and nearly all of the completed
refinancings have involved investment-grade issuers. If this trend
continues into the second and third quarters, we believe Road
Infrastructure will have a very difficult time refinancing and
likely experience a material deficit of liquidity sources relative
to its uses. Therefore, we assess the company's liquidity position
as less than adequate until it completes a refinancing and extends
its debt maturities. Additionally, as other corporations have drawn
down on revolvers to preserve liquidity during the recession, we
view this as a potential risk to further elevate the company's
leverage as we do not net the company's cash in our debt
calculations," S&P said.
The negative outlook on Road Infrastructure reflects S&P's view
that liquidity could become constrained over the next 12 months
such that there is a material deficit of liquidity sources to uses.
This could occur if the company is unable to extend the maturity of
its revolver. Additionally, if the company were to fully draw on
the revolver to preserve cash, as other companies have done in this
recession, leverage would further increase and remain at
unsustainable levels, as S&P does not net cash in its debt
calculations. In its base case, S&P expects low-single-digit
revenue and EBITDA growth in 2020 as it believes road safety will
still be necessary in times of recession. S&P expects the company
to remain in compliance with its net leverage financial covenant
and the rating agency expects the company to remain highly
leveraged, with weighted-average debt to EBITDA above 10x
(including the company's paid-in-kind [PIK] note as debt).
"We could take a negative rating action on Road Infrastructure in
the next 12 months if the revolver comes current and we don't
believe the company will take near-term steps to address the
maturity, thus restricting its liquidity position. We could also
lower ratings if the company's liquidity weakened such that
liquidity sources over uses fell below 1.2x, or if operating
conditions were to worsen such that free cash flow generation
turned negative. This scenario could be caused by a decline in
state or local budgets or a prolonged supply disruption raising
input costs. Such a scenario could lead to material weakening in
credit measures and increase the risk of breaching Road
Infrastructure's first-lien net leverage covenant, which would
restrict access to the revolver," S&P said.
"We could consider a stable outlook over the next 12 months if the
company is able to address its upcoming revolver maturity. We could
consider a positive rating action over the next 12 months if
adjusted debt to EBITDA improves to below 8x. This could happen if
demand for traffic safety materials significantly exceeds
expectations combined with strong operational performance leading
to EBITDA margin expansion of 600 basis points and revenue
expansion of 400 basis points greater than our current base-case
expectations. These conditions would benefit free cash flow and
improve the company's ability to sustainably pay down debt. The
company could also benefit from new legislation in the U.S. that
increases transportation infrastructure spending. To consider an
upgrade, we would also need to believe the company would maintain
financial policies that would sustain its improved leverage
profile," the rating agency said.
ROYALE ENERGY: Incurs $348K Net Loss in 2019
--------------------------------------------
Royale Energy, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net loss of
$348,383 on $2.97 million of total revenues for the year ended Dec.
31, 2019, compared to a net loss of $23.50 million on $3.28 million
of total revenues for the year ended Dec. 31, 2018.
As of Dec. 31, 2019, the Company had $20.59 million in total
assets, $18.92 million in total liabilities, and $1.67 million in
total stockholders' equity.
Moss Adams LLP, in San Diego, California, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 30, 2020 citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going
concern.
The Company's 2019 consolidated financial statements reflect a
working capital deficiency of $3,425,012 and a net loss from
operations of $845,071.
Royale Energy said, "Management's plans to alleviate the going
concern by cost control measures that include the reduction of
overhead costs and the sale of non-strategic assets. There is no
assurance that additional financing will be available when needed
or that management will be able to obtain financing on terms
acceptable to the Company and whether the Company will become
profitable and generate positive operating cash flow. If the
Company is unable to raise sufficient additional funds, it will
have to develop and implement a plan to further extend payables,
attempt to extend note repayments, and reduce overhead until
sufficient additional capital is raised to support further
operations. There can be no assurance that such a plan will be
successful."
A full-text copy of the Form 10-K is available for free at:
https://is.gd/Um24qT
About Royale Energy
Headquartered in El Cajon, CA, Royale Energy --
http://www.royl.com/-- is an independent oil and gas producer
which also has operations in the area of turnkey drilling. Royale
Energy owns wells and leases in major geological basins located
primarily in California, Texas, Oklahoma, Colorado, and Utah.
Royale Energy offers fractional working interests and seeks to
minimize the risks of oil and gas drilling by selling multiple well
drilling projects which do not include the use of debt financing.
RUDY'S BARBERSHOP: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Rudy's Barbershop Holdings, LLC
1605 Boylston Avenue
Suite 202
Seattle, WA 98122
Business Description: The Debtors operate 25 barbershops in five
major cities, including 15 in Seattle, five
in Los Angeles, three in Portland, one in
Atlanta and one in New York City. The
Debtors' headquarters is located in Seattle,
Washington. The Debtors' barbershops
provide a physical introduction to Rudy's
products, but consumers regularly engage
with Rudy's brand online and use the
Company's webstore and Amazon to replenish
their product supply. The products that the
Debtors offer include, among other things,
shampoos, conditioners, body washes, soaps,
creams, hair sprays, gels, lip balms,
pomades and beard and shaving products
marketed under the Rudy's, R+CO, Malin +
Goetz and Grant's Golden brands.
For more information, visit
https://rudysbarbershop.com.
Chapter 11 Petition Date: April 2, 2020
Court: United States Bankruptcy Court
District of Delaware
Six affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Rudy's Barbershop Holdings, LLC (Lead Case) 20-10746
Rudy's Barber Shop, LLC 20-10747
Rudy's New York, LLC 20-10748
Rudy's Hollywood, LLC 20-10749
Rudy's Portland, LLC 20-10750
Rudy's Southeast, LLC 20-10751
Debtors'
Bankruptcy
Counsel: William E. Chipman, Jr., Esq.
Mark L. Desgrosseilliers, Esq.
Mark D. Olivere, Esq.
CHIPMAN BROWN CICERO & COLE, LLP
Hercules Plaza
1313 North Market Street, Suite 5400
Wilmington, Delaware 19801
Tel: (302) 295-0191
Fax: (302) 295-0199
Email: chipman@chipmanbrown.com
desgross@chipmanbrown.com
olivere@chipmanbrown.com
Debtors'
Financial
Advisor: GLASSRATNER ADVISORY & CAPITAL GROUP LLC
Debtors'
Claims &
Noticing
Agent: BANKRUPTCY MANAGEMENT SOLUTIONS, INC.
D/B/A STRETTO
https://cases.stretto.com/rudys/
Rudy's Barbershop's
Estimated Assets: $100,000 to $500,000
Rudy's Barbershop's
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kathleen Trent, chief executive
officer.
A copy of Rudy's Barbershop's petition is available for free at
PacerMonitor.com at:
https://is.gd/S4ISBR
List of Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Rogue & Co., LLC Trade $100,213
3800 NE 1st Avenue
Suite 600
Miami, FL 33137
Tel: (305) 417-6426
Email: info@randco.com
2. American Express Trade $93,573
P.O. Box 981535
El Paso, TX 79998
Max Dragich
Tel: (800) 528-4800
Email: max.dragich@aexp.com
3. Seyfarth Shaw LLP Professional $58,834
3807 Collections Services
Center Drive
Chicago, IL 60693
B. Kiefer
Tel: (312) 460-5000
Email: bkiefer@seyfarth.com
4. Sunset Properties Landlord $29,116
4614 Glenalbyn Drive
Los Angeles, CA 90065
Ivan Morley
Tel: (213) 393-0277
Email: sunset_properties@yahoo.com
5. Malin & Goetz Inc. Trade $25,572
330 Seventh Avenue
Floor 21
New York, NY 10001
Tel: (212) 244-7771
Email: help@malinandgoetz.com
6. Wella Corporation Trade $18,772
24444 Network Place
Chicago, IL 60673
Tel: (800) 829-4422
Email: cavaglieri.c@pg.com
7. Kaye-Smith Professional $16,785
P.O. Box 956 Services
Renton, WA 98057
Tel: (425) 228-8600
Email: info@kayesmith.com
8. Asana Partners Landlord $14,745
1616 Camden Road
Suite 210
Charlotte, NC 28203
Clare Walsh
Tel: (551) 580-1927
Email: cwalsh@asanapartners.com
9. Gar Laboratories, Inc. Trade $10,881
1844 Massachusetts Avenue
Riverside, CA 92507
Tel: (951) 788-070
Email: tom@garlabs.com
10. Staples Inc. Trade $10,413
P.O. Box 660409
Dallas, TX 75266
Tel: (877) 826-7755
Email: arremittance@staples.com
11. Moss Adams LLP Professional $10,000
P.O. Box 101822 Services
Pasadena, CA 91189
Tel: (206) 302-6500
Email: eft@mossadams.com
12. 3101 Main Street LLC Landlord $9,760
30313 Canwood Street #32
Agoura Hills, CA91301
Lewis Maler
Tel: (310) 570-3363
Email: lmaler@hotmail.com
13. HFF LP Landlord $9,667
fbo 1186 Broadway Tenant LLC
PO Box 826767
Philadelphia, PA 19182
John Paulsen
Tel: 484) 532-4200
Email: jpaulsen@gficap.com
14. Vantage Packaging, Inc. Trade $9,097
41680 Corporate
Center Court Murrieta, CA 92562
Tel: (951) 696-4950
Email: customerservice@vantagepackaging.com
15. Alliance Packaging LLC Trade $8,975
P.O. Box 749702
Los Angeles, CA90074
Tel: (425) 291-3500
Email: alliancepackaging.net
16. Samis Land Company Landlord $7,065
208 James Street
Suite C
Seattle, WA 98104
Mike Norman
Tel: (206) 957-8750
Email: miken@samis.com
17. Grant's Golden Trade $7,057
Brand LLC
1752 NW Market Street #409
Seattle, WA 98107
Tel: (808) 227-313
Email: sales@grantsgoldenbrand.com
18. Cascadia Capital Professional $6,601
1000 Second Avenue Services
Suite 1200
Seattle, WA 9810
John Siegler
Tel: (206) 436-2550
Email: jsiegler@cascadiacapital.com
19. Accipiter Investments Landlord $6,285
4427 Santa Monica Blvd
Los Angeles, CA 90029
Cyrus Etemad
Tel: (415) 519-765
Email: cyrusge@gmail.com
20. 8017 Melrose Ave Landlord $6,175
Property LLC
9903 Santa Monica Blvd
Suite 1038
Beverly Hills, CA 90212
Patt Dee Sefton Hoffen
Tel: (310) 701-0190
Email: seftonpropmgt@aol.com
S.A.S.B. INC: Exclusivity Period Extended to May 17
---------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida
extended the exclusive period for S.A.S.B., Inc. to file a Chapter
plan of reorganization to May 17, and the period to obtain
acceptances for the plan to July 16.
The extension will give the company more time to determine the
effect of the Covid-19 pandemic on its business operations and to
assess what may be the new "normal" where revenues for next month
may be substantially less than revenues from only a month ago,
given the scope of the upheaval in the past few weeks.
About S.A.S.B. Inc.
Based in Okeechobee, Fla., S.A.S.B., Inc., filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Fla. Case No. 19-23357) on Oct. 4, 2019, listing under $1
million in both assets and liabilities. The case has been assigned
to Judge Erik P. Kimball. Craig I. Kelley, Esq., at Kelley, Fulton
& Kaplan, P.L., is the Debtor's legal counsel.
SALLY HOLDINGS: Moody's Alters Outlook on Ba2 CFR to Negative
-------------------------------------------------------------
Moody's Investors Service changed the outlook for Sally Holdings
LLC to negative from stable. Concurrently, Moody's affirmed the
company's Ba2 corporate family rating and its Ba2-PD probability of
default rating. The Ba1 senior secured term loan rating and Ba3
senior unsecured notes rating were also affirmed. Moody's also
downgraded the company's speculative grade liquidity rating to
SGL-2 from SGL-1.
"Moody's expects the notable drag on revenue and profitability from
the company's temporary store closures due to the COVID-19 outbreak
and the likely economic slowdown through the rest of the year will
weaken Sally's credit profile", Moody's Vice President Mickey
Chadha stated. "The negative outlook acknowledges the risk that
Sally's credit profile may not fully recover given the considerable
uncertainty around the duration of store closures and pace of
rebound in consumer demand once the pandemic begins to subside",
Chadha further stated. The affirmation of the Ba2 CFR acknowledges
the strength of Sally's credit metrics prior to the store closures,
its somewhat less discretionary product concentration in hair care
products and overall good liquidity. Moody's estimates Sally
Beauty's cash on hand to be approximately $450 million, following
sizable borrowings under its revolving credit facility, providing
it with the ability to withstand the near term cash flow pressures
while its stores are closed. The downgrade to SGL-2 from SGL-1
acknowledge the expectation for near term cash flow deficits and
the limited availability under its revolving credit facility.
Downgrades:
Issuer: Sally Holdings LLC
Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1
Affirmations:
Issuer: Sally Holdings LLC
Probability of Default Rating, Affirmed Ba2-PD
Corporate Family Rating, Affirmed Ba2
Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD3 from LGD2)
Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD5)
Outlook Actions:
Issuer: Sally Holdings LLC
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Sally's Ba2 Corporate Family Rating reflects its solid market
position, in terms of units, in the professional beauty supply
market, typically steady performance through economic cycles,
geographic diversity, and strong merchandising focus which has
historically benefitted the company's margins. Prior to the
COVID-19 crisis, credit metrics were solid, with lease adjusted
debt/EBITDAR of about 2.8 times and EBIT/Interest of 3.5 times for
the latest twelve months ended March 31, 2020. However, Moody's
expects credit metrics to deteriorate significantly due to
temporary store closures. Sally's stores are currently slated to
remain closed until April 9 but there is a high probability the
closures will continue beyond that. The weaker consumer due to lost
wages and the economic slowdown is also expected to negatively
impact sales even after the pandemic subsides. Therefore, Moody's
expect the company's leverage to remain elevated for fiscal 2020.
Sally's governance is a key credit factor as the company has taken
proactive steps to address the strain on liquidity that the store
closures and overall lower demand has caused. The company has drawn
$395 million under its revolver and has suspended share repurchases
indefinitely.The company is also cutting costs where possible
including lowering capex and reducing inventory flows. The salary
of the CEO and the Board members has been cut by 50% for the
duration of the COVID-19 crisis. Therefore, Sally's liquidity is
expected to remain good supported by its expectation that operating
cash flow and cash on hand will be sufficient to cover near term
cash deficits, working capital and investment spending. There are
no near-term maturities with the earliest being the $500 million
ABL revolving credit facility in July 2022. The rating is
constrained by recent challenging sales trends, high debt load and
continued need to execute its business transformation and debt
reduction plans.
The negative outlook reflects uncertainty around the duration of
unit closures, liquidity, and pace of rebound in consumer demand
once the pandemic begins to subside.
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 Non-food
retail 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 Sally's credit
profile, including its exposure to widespread store closures have
left it vulnerable to shifts in market sentiment in these
unprecedented operating conditions and Sally 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 Sally of the breadth and severity of the
shock, and the broad deterioration in credit quality it has
triggered.
Factors that would lead to an upgrade or downgrade of the ratings:
Ratings could be upgraded with consistent revenue growth and margin
expansion, increased global scale including improving the
positioning of its e-commerce business, and willingness to maintain
adjusted debt to EBITDA around 3.5 times and retained cash
flow-to-net debt above 20%.
Ratings could be downgraded if operating performance were to
sustainably weaken, financial policies were to become more
aggressive, or the Company were unable to maintain at least good
liquidity. Specific metrics include adjusted debt to EBITDA
sustained near 5.0 times, adjusted interest coverage below 2.75
times and retained cash flow-to-net debt below 12.5%.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
Sally Beauty Holdings, Inc. is an international specialty retailer
and distributor of professional beauty supplies with revenues of
approximately $3.9 billion annually. Through the Sally Beauty
Supply and Beauty Systems Group businesses, the Company sells and
distributes through 5,072 stores, including 157 franchised units,
and has operations throughout the United States, Puerto Rico,
Canada, Mexico, Chile, Peru, the United Kingdom, Ireland, Belgium,
France, the Netherlands, Spain and Germany.
SAMSONITE INTERNATIONAL: S&P Lowers ICR to 'BB-'; Outlook Negative
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on
Luxembourg-based Samsonite International S.A. to 'BB-' from 'BB+'
to reflect its view that its revenues and EBITDA will drop by
substantially, resulting in debt leverage peaking above 5x despite
continued strong cash flow generation and debt prepayment.
S&P also lowered its ratings on the company's senior secured debt
to 'BB+' from 'BBB-' and on the senior unsecured debt to 'BB-' from
'BB+'. The recovery ratings remain '1' and '4', respectively.
"Our downgrade reflects our expectation of increased leverage as a
result of the coronavirus and ensuing recession. We had placed the
ratings on CreditWatch negative on March 3, 2020, pending further
guidance and coronavirus developments. Since that time, the
coronavirus has spread rapidly throughout globe, particularly in
Europe and North America, resulting in social distancing measures
and government-mandated retail store closures. "Additionally, we
believe the U.S. economy is in a recession because GDP will be
negative over the next two quarters. The company has no leverage
headroom for its current rating since it ended fiscal 2019 with
adjusted leverage of 3.0x. We expect the store closures across
North America and Europe, combined with travel bans, to
significantly disrupt the company's operating profitability and for
S&P Global Ratings-adjusted leverage to rise above 5x in fiscal
2020," S&P said.
The negative outlook reflects the chance S&P could lower the rating
over the next 12 months if operating results continue to weaken and
it anticipates a longer recovery.
"We could lower the rating if performance deteriorates well beyond
our base case due to a stronger-than-expected impact from the
coronavirus or global macroeconomic slowdown, such that leverage
would remain over 5x in the latter part of 2021. A downgrade could
also result from weakened liquidity whereby the company breaches
its covenants or burns through its cash more rapidly than
anticipated," S&P said.
"We could revise the outlook to stable if the company stabilizes
operating performance such that revenue growth is restored and
leverage remains below 5x. This could happen if the pandemic spread
eases such that travel resumes and macroeconomic conditions
improve," the rating agency said.
SANAM CONYERS: To Seek Plan Confirmation on April 30
----------------------------------------------------
Judge Wendy L. Hagenau has ordered that the Amended Disclosure
Statement filed by Sanam Conyers Lodging, LLC, et al., on March 16,
2020, is conditionally approved.
April 20, 2020 is fixed as the last day for filing written
acceptances or rejections of the Amended Plan.
April 30, 2020 is fixed for the hearing on final approval of the
conditionally approved Amended Disclosure Statement and for
confirmation of the Amended Plan. The said hearing will be held at
1:30 p.m. in Courtroom 1403, United States Courthouse, 75 Ted
Turner Dr., SW, Atlanta, Georgia, before Judge Wendy L. Hagenau.
The Court, having scheduled the final hearing on approval of the
Debtor's Amended Disclosure Statement and confirmation of the
Debtor's Amended Plan for April 30, 2020, extends the 45-day
timeframe to confirm the Debtor's proposed Amended Plan.
April 20, 2020 is fixed as the last day for filing and serving
written objections to the conditionally approved Amended Disclosure
Statement and confirmation of the Amended Plan.
Under the Plan Class D Allowed General Unsecured Claims will be
paid in full. Payments will be issued pro rata to all allowed
claims in this class at the rate of not less than $5,000 per month
("the Plan Funding Pool") per month commencing 90 days after the
Effective Date. Payments will be issued pro rata to claimants in
this class. Class D Claimants are Impaired.
Class F Equity Interests will retain their equity interests, but
will not be entitled to receive any distributions until all Plan
payments to senior classes have been made, and all allowed claims
have been paid in full Class F Claimants are impaired.
The Plan will be funded primarily by from income from the operation
of the business and through the sale and re-lease of the Debtor's
hotel.
A full-text copy of the First Amended Disclosure Statement dated
March 16, 2020, is available at https://tinyurl.com/r62kzg5 from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Danowitz Legal, PC
300 Galleria Parkway, Suite 960
Atlanta, GA 30339
770-933-0960
About Sanam Conyers Lodging
Sanam Conyers Lodging owns the hotel located at 10111 Alcovy Rd. in
Covington, GA 30014 and conducting business as Baymont Inn
Covington.
Sanam Conyers Lodging, LLC, and affiliates sought Chapter 11
protection (Bankr. N.D. Ga. Lead Case No. 19-54798) on March 26,
2019. Danowitz Legal, PC, is the Debtors' counsel. Judge Wendy L.
Hagenau oversees the case.
SEQUA CORP: S&P Alters Outlook to Negative, Affirms 'CCC+' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Sequa Corp. to negative
from positive. S&P has also affirmed its ratings on the company,
including the 'CCC+' issuer credit rating.
"We expect Sequa Corp.'s credit metrics to be weaker in 2020 than
we had previously expected due to the coronavirus outbreak. The
company operates two business segments, one that serves the
aerospace aftermarket manufacturing and repairing engine parts
(Chromalloy), and one that provides coatings for parts used in
construction and general industrial manufacturing (Precoat). We
expect Chromalloy to be affected by declining air travel as
airlines cut flights. Precoat will likely see lower demand due to
lower capital spending as the company looks to preserve cash.
Sequa's credit ratios had improved in 2019, however, we expect
earnings and cash flow to deteriorate in 2020 because of lower
demand. We now expect debt to EBITDA to be above 8.5x in 2020, well
above the 6.9x in 2019 and our previous expectations of 6.4x-6.9x,"
S&P said.
The negative outlook reflects S&P's expectation that Sequa's credit
metrics will weaken as a result of lower air traffic and
construction activity because of the coronavirus outbreak. The
rating agency now expects debt to EBITDA to be above 8.5x in 2020.
"We could lower our rating on the company if we believe that it
could default within 12 months due to a near-term liquidity crisis
or if we believe it is considering a distressed exchange offer or
redemption. The liquidity crisis would likely be driven by a
greater impact on earnings and free cash flow from the coronavirus
pandemic," S&P said.
"We could revise our outlook on Sequa to stable if its earnings and
cash flow are not as weak as expected because of the coronavirus
outbreak, and the company can maintain adequate liquidity and debt
to EBITDA to below 8x. This would likely be the result of a
quicker-than-expected recovery in air traffic driving higher
aftermarket demand, or a recovery in the global economy driving
further construction demand," S&P said.
SHANNON STALEY: June 1 Hearing on Disclosure Statement
------------------------------------------------------
On June 1, 2020 at 1:30 pm, the hearing to consider the approval of
the Disclosure Statement filed by Shannon Staley & Sons LLC will be
held in Courtroom B, 54th Floor U.S. Steel Tower, 600 Grant Street,
Pittsburgh, PA 15219.
April 24, 2020 is the last day for filing and serving Objections to
the Disclosure Statement and to file a Request for Payment of an
Administrative Expense.
About Shannon Staley & Sons
Shannon Staley & Sons LLC -- https://shannonstaleyandsons.com/ --
is a full-service construction services firm offering on demand
construction services, turn key real estate, contract construction
services, and property management services.
Shannon Staley sought Chapter 11 protection (Bankr. W.D. Pa. Case
No. 19-23101) on Aug. 6, 2019, in Pittsburgh, Pa. As of the
petition date, Debtor was estimated to have total assets between
$500,000 and $1 million, and liabilities of between $1 million and
$10 million. The Hon. Carlota M. Bohm oversees the Debtor's case.
Robert O. Lampl Law Office is the Debtor's counsel.
The Office of the U.S. Trustee on Oct. 15, 2019, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case.
SIGNET JEWELERS: S&P Downgrades ICR to 'B+'; Outlook Negative
-------------------------------------------------------------
S&P Global Ratings lowered all of its ratings on Signet Jewelers
Ltd., including its issuer credit rating and its issue-level rating
on the company's unsecured notes, to 'B+' from 'BB-'. S&P's '3'
recovery rating on the notes remains unchanged.
"The downgrade reflects our belief that the coronavirus pandemic
will weigh heavily on Signet's jewelry sales and operating
performance. We anticipate that the company's performance will
face unprecedented near-term pressure because it temporarily closed
all of its stores on March 23, 2020, and plans to reopen them only
when conditions allow. We believe the store closures could continue
for an extended period given the increasingly drastic actions
governments are taking to arrest the rapid rise in COVID-19 cases.
For the current fiscal year ending February 2021, we forecast that
Signet's revenue will decline by 20% or more as its operating
margins and EBITDA weaken significantly. Additionally, we believe
the recovery in 2020, especially for highly discretionary retail
categories such as jewelry, will be slow as economic uncertainty
lingers and consumers continue to practice social distancing. We
expect these trends to lead to temporarily elevated levels of cash
burn for Signet in the first half of 2020, which should decline in
the second half of the year as the negative pressures dissipate,"
S&P said.
The negative outlook reflects the heightened uncertainty around the
effects of the coronavirus pandemic and the impending global
recession on Signet's operating and financial conditions. A
prolonged store closure coupled with a slowdown in consumer
spending on jewelry could negatively affect the company's ability
to recover operationally.
"We could lower our rating on Signet if we believe the company's
competitive position has weakened because protracted economic
uncertainty will reduce consumer demand for jewelry and pressure
the performance of its mall-based stores. We could also lower the
rating if Signet underperforms our base-case expectations and
sustains adjusted leverage of 5x or greater," S&P said.
"We could revise our outlook on Signet to stable if the effects of
the coronavirus are less severe than we currently anticipate. Under
this scenario, the company's operating performance would materially
improve in the second half of the year at a faster-than-expected
pace. This would likely allow it to sustain adjusted leverage of 4x
or lower," S&P said.
SOUTH COAST BEHAVIORAL: Hires Nicastro & Associates as Counsel
--------------------------------------------------------------
Thomas H. Casey, the Chapter 11 Trustee of South Coast Behavioral
Health, seeks authority from the U.S. Bankruptcy Court for the
Central District of California to employ Nicastro & Associates,
P.C., as counsel to the Trustee.
The Trustee requires Nicastro & Associates to:
a. advise and assist the Trustee as to institutional and
operational issues impacting Debtor both prior to and
immediately after the Chapter 11 Trustee's appointment;
b. assist in the organization and transfer of documents and
files to Trustee and his general and special litigation
counsel such that there is continuity of representation and
urgent issues and deadlines are met;
c. provide information, advice and assistance as may be
requested by the Trustee and his general counsel to ensure
a smooth transition of both business operations and legal
responsibilities from the former debtor in possession to
the Trustee and his counsel.
Nicastro & Associates will be paid at these hourly rates:
Michael N. Nicastro, Partner $495
Martina Slocomb, Of-Counsel $375
Matthew W. Grimshaw, Of-Counsel $375
Rosanna M. Sumera, Paralegal $175
Nicastro & Associates will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Michael N. Nicastro, partner of Nicastro & Associates, 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.
Nicastro & Associates can be reached at:
Michael N. Nicastro, Esq.
NICASTRO & ASSOCIATES, P.C.
130 Newport Center Dr.
Newport Beach, CA 92660
Tel: (949) 534-6990
About South Coast Behavioral Health
South Coast Behavioral Health, Inc. -- https://www.scbh.com/ -- is
a healthcare company that specializes in the in-patient and
outpatient treatment of addicts, alcoholics, and persons dealing
with mental health issues. It offers a clinically supervised
residential sub acute detox services, therapeutic and residential
treatment centers, intensive outpatient treatment services, and
partial hospitalization programs.
South Coast Behavioral Health sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-12375) on June
20, 2019. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Judge Mark S. Wallace oversees the case. Nicastro &
Associates, P.C., is the Debtor's legal counsel.
SOUTHWESTERN ENERGY: Moody's Affirms Ba2 CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service affirmed Southwestern Energy Company's
Ba2 Corporate Family Rating, its Ba2-PD Probability of Default
Rating and Ba3 ratings on the company's senior unsecured notes. The
company's Speculative Grade Liquidity Rating remains SGL-2. The
outlook remains stable.
"Southwestern Energy demonstrates high resilience of its operating
model and benefits from the financial flexibility that it built
through halving its debt since 2016, having no sizeable near-term
debt maturities, and reducing operating and development costs in a
low gas price environment," said Arvinder Saluja, Vice President at
Moody's.
Outlook Actions:
Issuer: Southwestern Energy Company
Outlook, Remains Stable
Affirmations:
Issuer: Southwestern Energy Company
Probability of Default Rating, Affirmed Ba2-PD
Corporate Family Rating, Affirmed Ba2
Senior Unsecured Commercial Paper, Affirmed NP
Senior Unsecured Notes, Affirmed Ba3 (LGD4)
RATINGS RATIONALE
The rating affirmation of Southwestern's Ba2 CFR and the stable
outlook reflect the company's supportive hedge position and cost
structure during this ongoing weak commodity price environment, and
the lack of near-term refinancing needs.
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 E&P sector has
been one of the sectors most significantly affected by the decline
in oil & gas commodity prices. 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 limited impact on Southwestern's credit quality of the
breadth and severity of the oil demand and supply shocks, and the
company's resilience during a period of low gas prices.
Southwestern has good liquidity which is reflected in the SGL-2
rating. The company has an ABL credit agreement with the revolving
credit facility maturing in April 2024. The revolver has a
borrowing base of $2.1 billion with a $2 billion commitment. It had
$34 million borrowings and $172 million of letters of credit
outstanding under its revolver at year end 2019. Southwestern could
modestly outspend cash flow until late 2020, which will be funded
by revolver borrowings. The credit agreement governing the revolver
contains financial maintenance covenants requiring a minimum
current ratio of 1x and maximum net leverage of 4x. Moody's expects
the company to maintain adequate headroom in compliance with the
covenants. Southwestern's next maturity is in March 2022 when its
$212 million unsecured notes come due, followed by a January 2025
maturity of $892 million unsecured notes.
Southwestern's Ba2 CFR reflects its sizeable production and
reserves base and low finding and development costs that are among
the best in the industry. Southwestern has a supportive hedge
position in 2020 and 2021 for its hydrocarbon streams -- natural
gas, condensate, and other natural gas liquids. Since 2018, the
company has increased its focus towards further developing its
relatively higher-margin wet-gas portfolio in southwest Appalachia
where it also has condensate production, which despite modest
volumes meaningfully enhances the company's overall cash margins.
The company will continue to have supportive cash flow and capital
efficiency metrics, as well as strong production and reserve based
leverage metrics due to meaningful reduction in absolute debt since
2016. However, Southwestern is challenged by its natural gas
weighted production profile (over 75% of expected 2020 production)
and high reserves concentration. Southwestern is exposed to
prolonged weakness in natural gas prices, which are likely to
remain low and range-bound over the next several years, and
compounded by the negative basis differentials the company faces in
its Appalachian focused production.
The senior unsecured notes are rated Ba3, as a result of the
secured nature and priority claim of the ABL revolver with $2
billion commitment. Due to the size of the claim of the secured
debt, the senior notes are rated one notch beneath the Ba2 CFR.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could consider an upgrade if the company sustains retained
cash flow to debt over 35% and the leveraged full-cycle ratio
(LFCR) approaches 2x in a meaningfully improving commodity price
environment. The Ba2 CFR could be downgraded if the retained cash
flow to debt ratio drops below 20% or if LFCR falls below 1x for a
sustained period.
Southwestern Energy Company is a US independent exploration and
production (E&P) company headquartered in Houston, Texas.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
SPECIALTY BUILDING: S&P Downgrades ICR to 'B-' on COVID-19 Impact
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Specialty
Building Products Holdings LLC to 'B-' from 'B'. At the same time,
S&P lowered its issue-level ratings on its senior secured debt to
'B-' from 'B'.
The downgrade of Specialty to 'B-' reflects its adjusted leverage
of over 7x and EBITDA interest coverage of 1.3x for the 12 months
ended Sept. 30, 2019.
"While we expected improvement in leverage and coverage ratios in
fourth-quarter 2019 and first-quarter 2020, with the COVID-19
outbreak and the rapid slowdown in economic activity we believe
revenues and earnings will likely contract in 2020 instead of
growth. As a result, we expect credit measures will remain
pressured in 2020," S&P said.
S&P's negative outlook on Specialty reflects the company's high
leverage and low interest coverage metrics, with the heightened
risk that these may remain worsen over the next 12 months given
recessionary conditions. At the same time, the rating agency
believes the company's earnings and cash flows will be sufficient
to meet its obligations, such that EBITDA interest coverage stays
around 1.5x and liquidity remains adequate.
"We could lower the rating over the next 12 months if recessionary
macroeconomic conditions result in greater-than-expected
deterioration in earnings, such that EBITDA interest coverage
begins trending toward 1x or leverage rises above 9x, at which
point we may view the capital structure as unsustainable. We could
also lower the rating if Specialty's liquidity is severely affected
and the covenant headroom tightens, causing us to view the
liquidity as less than adequate," S&P said.
"Though unlikely in the current macroeconomic environment, we may
revise the outlook to stable over the next 12 months if business
conditions improve and the company can maintain leverage below 8x,
with EITDA interest coverage trending toward 2x," the rating agency
said.
SPI ENERGY: Appoints Dongying's Zhang Jing to Board of Directors
----------------------------------------------------------------
SPI Energy Co., Ltd. has appointed Mr. Zhang Jing to its board of
directors to replace Mr. Zhou Lang, who resigned as a director of
the Company on March 28, 2020. Mr. Lang has been engaged by SPI
Energy as a technology consultant, to advise the Company on its
solar business.
Mr. Jing has served as a director of Hong Kong Dongying Financial
Group since 2012, where he manages the group's private equity
operations. He has also been an independent director of New City
Construction Development Group Co., Ltd. and China International
Capital Corporation since 2012. He served as a deputy general
manager of China Yituo Group Co., Ltd. and a director and chief
financial officer of First Tractor Co., Ltd. from 1997 to 2007. Mr.
Zhang Jing received the Master degree in Management Engineering
from Jiangsu University.
About SPI Energy Co., Ltd.
SPI Energy -- http://www.spigroups.com-- is a global provider of
photovoltaic solutions for business, residential, government and
utility customers, and investors. The Company develops solar PV
projects that are either sold to third party operators or owned and
operated by the Company for selling of electricity to the grid in
multiple countries in Asia, North America and Europe. The
Company's subsidiary in Australia primarily sells solar PV
components to retail customers and solar project developers. The
Company has its operating headquarter in Hong Kong and its U.S.
office in Santa Clara, California. The Company maintains global
operations in Asia, Europe, North America, and Australia.
SPI Energy reported a net loss attributable to shareholders of the
Company of $12.28 million for the year ended Dec. 31, 2018,
compared to a net loss attributable to shareholders of the Company
of $91.08 million for the year ended Dec. 31, 2017. As of Dec. 31,
2018, SPI Energy had $188.73 million in total assets, $188.7
million in total liabilities, and $70,000 in total equity.
Marcum Bernstein & Pinchuk LLP, in Beijing, China, the Company's
auditor since 2018, issued a "going concern" opinion in its report
dated April 30, 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.
SSH HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B' ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook to negative from stable and
affirmed all its ratings on SSH Holdings Inc. (Spencer Spirit),
including its 'B' issuer credit rating.
"The outlook revision reflects our expectation that the coronavirus
pandemic will result in a severe impact on Spencer Spirit's sales
and cash flows this year. In addition to store closures, we believe
it is susceptible to declining consumer spending given the
discretionary nature of its products. However, the favorable timing
of Halloween this year should allow Spirit Halloween segment
operations to commence without significant impairment from the
coronavirus pandemic," S&P said.
The negative outlook reflects the heightened uncertainty regarding
the impact of the coronavirus pandemic and ensuing recession on
Spencer Spirit's financial condition. Prolonged store closures and
social distancing norms beyond S&P's expectation could affect the
company's ability to recover operationally.
"We could lower the rating if we believe adjusted leverage will
remain above 6x. This could occur if the impact of the pandemic and
subsequent recessionary economic environment are more severe and
prolonged than we currently expect. For example, would could lower
the rating if we anticipate a disruption to store openings during
the key Spirit Halloween season," S&P said.
"We could revise the outlook to stable if the impact of the
pandemic is less severe than we currently anticipate, resulting in
our expectation for leverage to stay below 6x. Under this scenario,
Spencer's stores would reopen to relatively moderate declines in
sales and social distancing norms would subside in time for the
Halloween season, resulting in improved performance and
profitability in the second half of this year," the rating agency
said.
STORE IT REIT: Wins Confirmation of Liquidating Plan
----------------------------------------------------
Store It REIT, Inc., filed a Third Amended Disclosure Statement and
a Third Amended Plan of Liquidation on November 26, 2019 as
modified by non-material modifications, which incorporate changes
made by (1) the Notice of Filing Amended to Third Amended Chapter
11 Plan of Liquidation (2) the Stipulation and Agreed Order between
Debtor and River Oaks Storage, LLC, (3) the Order Approving
Compromise and (4) the Stipulation and Agreed Order between Debtor
and Class 4 Creditors.
The Court has reviewed reviewed the Plan, the Disclosure Statement,
applicable law, all pleadings, exhibits, statements, responses,
comments regarding confirmation of the Plan, and all objections
being deemed withdrawn.
Judge Marvin Isgur finds that the Plan should be confirmed.
In accordance with Sec. 1129(a)(8) of the Bankruptcy Code, the
Court finds and concludes (1) that Class 3, consisting of General
Unsecured Claims, is Impaired Class and have accepted the Plan; (2)
that Class 4, consisting of Unsecured Claims of Insiders and
Affiliates are Impaired and have rejected the Plan; and (3) Class
5, consisting of Equity Interests in the Debtor, are deemed to have
accepted the Plan in accordance with Sec. 1126(g). With respect to
Class 4 and based on the agreement memorialized in the Stipulation
and Agreed Order between Debtor and Class 4 Creditors (the "Class 4
Stipulation"), the Court finds and concludes that, pursuant to Sec.
1129(b)(1) and (2), the Plan does not discriminate unfairly, and is
fair and equitable because all Holders of Class 4 Claims agree that
the combined amount of all Allowed Class 4 Claims will not exceed
the amount of funds remaining after payment of all other senior
claims and will be paid in full. Accordingly, the Plan can be
confirmed under Bankruptcy Code § 1129(b) with respect to Class
4.
Judge Marvin Isgur also ordered that the Disclosure Statement
contains adequate information within the meaning of Sec. 1125 and
is APPROVED on a final basis.
The Plan, as attached to this Order and with the modifications and
clarifications embodied in this Order, is hereby CONFIRMED.
The Liquidating Trustee shall make payments and distributions
pursuant to the procedures established by the Plan. Any payments or
distributions to be made to claimants as required by the Plan shall
be made only to the holders of Allowed Claims and Equity
Interests.
The Stipulation and Agreed Order between the Debtor and River Oaks
Storage, LLC is incorporated by reference. Upon this Order becoming
final and non-appealable and as provided by the Plan, River Oaks
Storage, LLC and its managers, members, and attorneys shall be are
released from any and all claims, obligations, suits, judgments,
damages demands, debts, rights, remedies, actions, causes of
action, and liabilities whatsoever that could arise/arose prior to
or during the pendency of the Debtor’s bankruptcy case.
A full-text copy of the Order Confirming the Plan dated March 16,
2020, is available at https://tinyurl.com/vhgtk94 from
PacerMonitor.com at no charge.
About Store It REIT
Store It REIT, Inc., formerly known as Evergreen Realty REIT, Inc.,
and American Spectrum REIT I, Inc., is a privately held company in
Ketchum, Idaho engaged in activities related to real estate. The
Company has 98.64% equity interest in Evergreen REIT, LP.
Evergreen REIT, LP, is a real estate investment trust owning an
interest in entities that own tenant in common, limited
partnership, and/or general partnership interest in three
self-storage facilities.
Store It REIT filed for Chapter 11 bankruptcy protection (Bankr.
S.D. Tex. Case No. 18-32179) on April 27, 2018, listing $13.18
million in total assets and $127,143 in total liabilities. The
petition was signed by William J. Carden, president and director.
Judge Marvin Isgur oversees the case. The Debtor tapped Deirdre
Carey Brown, Esq., at Hoover Slovacek LLP, as its bankruptcy
counsel.
An official committee of unsecured creditors has not been formed.
However, on July 3, 2018, an Official Committee of Equity Security
Holders was created. The Committee is represented by Polsinelli,
PC.
The equity committee has sought the appointment of an examiner in
the company's Chapter 11 case.
The Debtor has filed a plan of liquidation and disclosure
statement.
SUNPOWER CORP: Antoine Larenaudie Resigns as Director
-----------------------------------------------------
Antoine Larenaudie resigned from the Board of Directors of SunPower
Corporation, and on March 31, 2020, the Board appointed Denis
Toulouse to serve as a member of the Board. Mr. Larenaudie had
served as a designee of Total Solar INTL SAS, formerly known as
Total Gas & Power USA, SAS, pursuant to the Affiliation Agreement,
dated April 28, 2011, as amended, between Total Solar and the
Company, and Mr. Toulouse is replacing Mr. Larenaudie as Total
Solar's designee on the Board.
Mr. Toulouse has served as senior vice president, corporate &
project finance, of Total in Paris since April 2019. He previously
served as senior vice president, mergers & acquisitions, of Total
in Paris starting in 2016. From 2015 to 2016, Mr. Toulouse was
chief financial officer of Total Gas & Power Ltd. in London.
Mr. Toulouse joined Elf Aquitaine S.A.S. in 1991, prior to its
acquisition by Total, and held various positions in the marketing
division of Total, including chief financial officer of Total
Deutschland in Germany and chief financial officer of Total Belgium
in Belgium. Mr. Toulouse is a graduate of HEC Paris business
school in France.
Mr. Toulouse serves as a Class I director, to serve until the
Company's annual meeting of stockholders to be held in 2021.
About SunPower
Headquartered in San Jose, California, SunPower Corporation --
http://www.sunpower.com/-- is a global energy company that
delivers complete solar solutions to residential, commercial, and
power plant customers worldwide through an array of hardware,
software, and financing options and through solar power solutions,
operations and maintenance services, and "Smart Energy" solutions.
The Company's Smart Energy initiative is designed to add layers of
intelligent control to homes, buildings and grids -- all
personalized through easy-to-use customer interfaces.
SunPower reported a net loss of $7.72 million for the fiscal year
ended Dec. 29, 2019, compared to a net loss of $917.5 million for
the fiscal year ended Dec. 30, 2018. As of Dec. 29, 2019, the
Company had $2.17 billion in total assets, $2.15 billion in total
liabilities, and total equity of $21.50 million.
SUPERIOR ENERGY: Receives Noncompliance Notice from NYSE
--------------------------------------------------------
Superior Energy Services, Inc., has received written notice from
the New York Stock Exchange that the Company is not in compliance
with the NYSE continued listing standard set forth in Rule 802.01B
of the NYSE Listed Company Manual, which requires the average
global market capitalization over a consecutive 30 trading-day
period to be greater than or equal to $50,000,000, unless at the
same time the stockholders' equity is equal to or greater than
$50,000,000.
In accordance with applicable NYSE procedures, the Company plans to
submit a plan to regain compliance with the NYSE continued listing
standards within 18 months. The Company will submit the plan to
the NYSE within 45 days of its receipt of the Notice. The Notice
has no immediate impact on the listing of the Company's common
stock, which will continue to trade on the NYSE.
About Superior Energy Services
Headquartered in Houston, Texas, Superior Energy Services (NYSE:
SPN) -- htttp://www.superiorenergy.com/ -- serves the drilling,
completion and production-related needs of oil and gas companies
worldwide through a diversified portfolio of specialized oilfield
services and equipment that are used throughout the economic life
cycle of oil and gas wells.
Superior Energy incurred net losses of $255.72 million in 2019,
$858.11 million in 2018, and $205.92 million in 2017. As of Dec.
31, 2019, the Company had $1.99 billion in total assets, $324.48
million in total current liabilities, $1.28 billion in long-term
debt, $132.63 million in decommissioning liabilities, $62.35
million in operating lease liabilities, $3.25 million in deferred
income taxes, $134.31 million in other long-term liabilities, and
$49.57 million in total stockholders' equity.
TALBOTS INC: S&P Downgrades ICR to 'CCC+' on Liquidity Concerns
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on The Talbots
Inc. to 'CCC+' from 'B-', reflecting its expectation for tightened
liquidity. At the same time, S&P lowered its issue-level rating on
the company's term loan facility to 'CCC+' from 'B-'. The '3'
recovery rating is unchanged.
"We believe store closures and social distancing mandates
associated with the coronavirus pandemic will significantly weaken
Talbots' operating performance this year. Talbots temporarily
closed all of its stores as of March 17, 2020, through March 31. We
believe closures could be extended for more than a month given the
increasingly drastic actions governments are taking to quell the
rapid rise in new COVID-19 cases, temporarily elevating cash burn.
Talbots' online business, which normally represents close to 40% of
total sales, remains operational and could partially offset the
impact of closed stores. However, we believe consumer demand will
be depressed as confidence rapidly deflates amid mounting
uncertainty over the severity and duration of the pandemic.
Additionally, we believe the recovery trajectory in 2020,
especially for discretionary categories such as apparel, will be
slow as economic uncertainty lingers. We believe credit metrics
will deteriorate significantly this year, with a spike in debt to
EBITDA above 7x in fiscal 2020, followed by a protracted recovery
in fiscal 2021 and beyond," S&P said.
The negative outlook reflects heightened uncertainty regarding the
impact of the coronavirus pandemic and impending recession on
Talbots' financial condition. A prolonged store closure, coupled
with slower consumer spending, could affect its ability to recover
operationally.
"We could lower our rating on Talbots if we believe there is an
increased risk of a default in the next 12 months. This could occur
if the company's performance does not rebound sufficiently in
advance of its 2022 maturities such that we believe a refinancing
at par is increasingly unlikely. We could also lower the rating if
a financial covenant violation appears increasingly likely or if we
believe the likelihood of a below-par repurchase materially
increases," S&P said.
"We could raise our rating on Talbots or revise our outlook to
stable if we believe the company can refinance its 2022 term loan
at par, which would likely require an improvement in our
macroeconomic outlook. To raise our rating, we would also need to
believe the company's operating performance would recover from the
coronavirus pandemic with consistent positive FOCF, improving its
liquidity position," the rating agency said.
TAMARA HOME CARE: Says Lone Objection From UST Should be Overruled
------------------------------------------------------------------
On Feb. 11, 2020, TAMARA HOME CARE, INC., filed its First Chapter
11 Plan of Reorganization and the corresponding Disclosure
Statement.
The Plan, Disclosure Statement, Ballots, and the Court's Order
Conditionally Approving the Disclosure Statement were circulated to
all parties in interest in accordance with the Court's Feb. 13,
2020 Order. Since, 100 percent of the creditors representing the
Impaired Class2–General Unsecured Claims, have voted in favor of
the Plan. No creditor --secured, unsecured and/or priority -- has
voted to reject the Plan and/or filed an Objection to the Plan of
Reorganization. The Chapter 11 Plan of Reorganization and the
corresponding Disclosure Statement meet and exceeds the
requirements under Section 1129 to be Confirmed and Section 1125
for the Disclosure Statement to be Finally Approved.
Despite the creditors consent and affirmative votes in favor of the
plan, the U.S. Trustee -- a party not entitled to payments and/or
distributions under the Plan -- has filed an Objection to the Plan
and the Disclosure Statement. The Debtor asserts that the
Trustee's Objection to the Plan should be over-ruled and the
Trustee's Objection to the Disclosure Statement should be denied as
moot.
Plan Feasible
The Debtor's Plan is feasible and the Debtor, as of March 16, 2020,
has more than sufficient funds to fund the obligations contemplated
under the Plan. The Plan is sufficiently funded -- today -- to pay
the Effective day payments as well as the Administrative Payments.
The U.S. Trustee alleges that the Debtor's Plan is not feasible
because the Debtor will be rejecting executory contracts. The U.S.
Trustee is wrong. Specifically, merely because the Debtor rejects a
contract does not mean that the Debtor cannot generate income.
Here, the Debtor has professional services contracts with various
individuals to provide home care facilities.
The U.S. Trustee also alleges that the Plan fails to comply with
Section 1129(a)(5). Here too the Trustee's allegations are
incorrect. The Plan establishes that the post-conformation
managers will be Tamara Cruz. This is beneficial to the Estate
because Mrs. Tamara Cruz has managed and operated this business for
over 12-years.
The Debtor avers that the U.S. Trustee's objection to the
Disclosure Statement should also be overruled:
* First, the Debtor incorporates herein the responses as to
feasibility, Plan funding, and the Debtor's compliance with Section
1129(a)(5).
* Second, as to the alleged discrepancy, the Debtor submits that
payment of Administrative Expenses will be in accordance with
Section 1129(a)(9).
Counsel for Debtor:
Jesus E. Batista Sánchez, Esq.
THE BATISTA LAW GROUP, PSC.
PO Box 191059
San Juan, PR. 00919
Tele: (787) 620-2856
Fax: (787) 777-1589
E-mail: jeb@batistasanchez.com
About Tamara Home Care
Founded in 2010, Tamara Home Care Inc. is a privately-held company
that provides home health care services. It is a small business
debtor as defined in 11 U.S.C. Sec. 101(51D).
Tamara Home filed under Chapter 11 of the Bankruptcy Code (Bankr.
D.P.R. Case No. 19-04539) on Aug. 9, 2019, listing under $1 million
in both assets and liabilities. Judge Brian K. Tester oversees the
case. Jesus Enrique Batista Sanchez, Esq., at The Batista Law
Group, P.S.C., is the Debtor's legal counsel.
TARONIS TECHNOLOGIES: Signs $1.7 Million Securities Purchase Deal
-----------------------------------------------------------------
Taronis Technologies, Inc. entered into a securities purchase
agreement with an accredited investor on April 1, 2020, pursuant to
which the Company agreed to issue and sell to the Investor, and the
Investor agreed to purchase from the Company 11,000,000 shares of
the Company's Common Stock, par value $0.001 per share, for a total
gross purchase price of $1,669,800. The closing of the Offering is
contemplated to occur on April 2, 2020. The SPA contains customary
representations, warranties and agreements by us and customary
conditions to closing.
The sale of the Common Stock at a price of $0.1518 per share is
being made pursuant to a prospectus supplement, which will be filed
with the Securities and Exchange Commission on or about April 2,
2020, and accompanying base prospectus relating to the Company's
shelf registration statement on Form S-3 (File No. 333-230854),
which was declared effective by the SEC on April 24, 2019.
About Taronis Technologies
Clearwater, Florida-based Taronis Technologies Taronis
Technologies, Inc. (TRNX) is a technology-based company that is
focused on addressing the global constraints on natural resources,
including fuel and water. The Company's two core technology
applications -- renewable fuel gasification and water
decontamination/sterilization -- are derived from its patented and
proprietary Plasma Arc Flow System. The Plasma Arc Flow System
works by generating a combination of electric current, heat,
ultraviolet light and ozone, that affects the feedstock run through
the system to create a chosen outcome, depending on whether the
system is in "gasification mode" or "sterilization mode". The
Company operates 22 locations across California, Texas, Louisiana,
and Florida.
Taronis reported a net loss of $15.04 million in 2018 following a
net loss of $11.02 million in 2017. As of Sept. 30, 2019, Taronis
had $47.76 million in total assets, $11.49 million in total
liabilities, and $36.27 million in total stockholders' equity.
Marcum LLP, in New York, NY, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated April
12, 2019, citing that the Company has incurred significant losses,
continued to have negative cash flows from its operating
activities, 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.
TENET HEALTHCARE: Fitch to Rate New Secured 1st Lien Notes 'B+/RR3'
-------------------------------------------------------------------
Fitch has assigned an expected rating of 'B+'/'RR3' to Tenet
Healthcare's proposed senior secured first lien notes. The
outstanding senior secured first lien notes are downgraded to
'B+'/'RR3' from 'BB-'/'RR2' due to lower assumed recovery prospects
for these lenders. The company plans to use the proceeds of this
borrowing to reduce amounts outstanding on the asset based lending
(ABL) facility. The ratings apply to approximately $14.6 billion of
debt as of Dec. 31, 2019. The Rating Outlook is Stable.
KEY RATING DRIVERS
Coronavirus Pandemic Affecting Operations: Fitch believes that U.S.
Healthcare & Pharmaceutical companies, including providers of
healthcare services, should be less affected by the coronavirus and
its influence on U.S. consumers' behavior than on other corporate
sectors, as demand is less economically sensitive and often times
not discretionary. However, Fitch notes that while the influence on
healthcare service providers, including Tenet, is expected to be
relatively muted compared with more discretionary sectors,
depressed volumes of elective patient procedures will weigh on
revenue and cash flow beginning in second-quarter 2020. Healthcare
providers are cancelling elective procedures in both inpatient and
outpatient settings to increase capacity for coronavirus patients.
Fitch currently believes Tenet has sufficient headroom in the 'B'
rating to absorb these effects, which is predicated on an
assumption that the healthcare services sector will experience a
strong recovery in elective patient volumes beginning in later 2020
and into 2021. However, there could be downward pressure on the
rating if the outbreak is of longer duration and depresses cash
flow in 2020 more than currently anticipated or the healthcare
services segment proves to be more economically sensitive than
during past U.S. recessions, leading to a slower recovery in
elective patient volumes and pricing in 2021. Fitch notes that the
health insurance expansion provisions of the Affordable Care Act,
which were not in place during the Great Recession of 2008-2009,
support the expectation of a good recovery in elective volumes in
2021 since unemployed Americans will have relatively better access
to health insurance than during the Great Recession.
Securing Additional Liquidity: Fitch believes Tenet's debt
agreements give the company the flexibility to issue secured debt
to support liquidity during the operational disruption expected
during the coronavirus pandemic. Tenet's sources of committed
external liquidity include a $1.5 billion ABL facility with the
borrowing base allowing full availability as of YE 2019.
Concurrently with the notes issuance, Tenet is seeking to upsize
the capacity of the ABL facility to $2 billion from $1.5 billion.
The company's debt agreements allow for incremental secured debt
issuance of up to 4.0x EBITDA, which Fitch estimates allows about
$1 billion of additional secured debt capacity based on YE 2019
EBITDA.
Liquidity during the coronavirus pandemic will also be supported by
funding provided to healthcare providers under the Coronavirus Aid,
Relief and Economic Security (CARES) Act. Among other provisions,
the CARES Act will allow hospitals to request accelerated payment
of up to one half of annual Medicare fees for service revenues, to
be repaid beginning four months after the payment is received.
Based on Tenet's 2019 hospital net patient revenues, Fitch believes
the company could potentially request up to $1.3 billion of
accelerated Medicare payments. Other potential sources of liquidity
include asset sales. Tenet's two Memphis area hospitals are
currently under definitive agreement for sale, which could net
about $350 million in proceeds later in 2020. Fitch does not
include the divestiture in its rating case forecast for the
issuer.
Expect Leverage to Spike in 2020: Because of a reduction in EBITDA
during the course of the coronavirus pandemic and assuming the need
for additional liquidity to cover operating expenses, Fitch expects
Tenet's total debt/EBITDA to spike to 8.8x at YE 2020, compared
with YE 2019 Fitch calculated leverage of 6.3x. Fitch currently
anticipates leverage to drop fairly rapidly back to a level
considered consistent with Tenet's 'B' rating, declining to 6.8x at
YE 2021 due to recovery of EBITDA and debt repayment.
DERIVATION SUMMARY
Tenet's 'B' Long-Term IDR reflects the company's highly leveraged
balance sheet, largely as a result of debt funded acquisitions.
Tenet's leverage is higher than that of the closest hospital
industry peers: HCA Healthcare Inc. (HCA; 'BB'/Stable) and
Universal Health Services Inc. (UHS; 'BB+'/Stable). Tenet's
operating and FCF margins also lag these industry peers; however,
Tenet has recently made progress in closing the gap through
cost-cutting measures and the divestiture of lower margin
hospitals. Tenet has a stronger operating profile than lower-rated
peers Community Health Systems (CHS; CCC) and Quorum Healthcare
Corp. Similar to HCA and UHS, Tenet's operations are primarily
located in urban or large suburban markets that have relatively
favorable organic growth prospects.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include:
- Fitch currently anticipates a 20% drop in Tenet's 2020 EBITDA
compared with 2019 due to the operational effects of the
coronavirus pandemic.
- 2021 EBITDA is expected to be 22% higher than the 2020 level.
These estimates are highly sensitive to the depth and duration
of the coronavirus pandemic in Tenet's markets.
- The 2020 EBITDA estimate assumes a 25% decline in volumes in
the ambulatory care segment and a 5% decline in volumes in
the hospital operations segment. It assumes the 2020
operating EBITDA margin compresses 230bps to a Fitch-
calculated 11.1% from the 2019 level of 13.4%.
- Leverage spikes to 8.8x at YE 2020 before dropping below 7.0x
during 2021.
RATING SENSITIVITIES
Future Developments That May, Individually or Collectively, Lead to
Positive Rating Action:
- An expectation of debt/EBITDA after associate and minority
dividends sustained below 5.5x;
- An expectation for FCF margin sustained above 2%.
Future Developments That May, Individually or Collectively, Lead to
Negative Rating Action:
- Debt/EBITDA after associate and minority dividends sustained
above 7.0x at YE 2021;
- An expectation for consistently break-even to negative FCF
margin;
The negative rating sensitives could be tripped if the coronavirus
pandemic has a greater impact on cash flow than Fitch currently
anticipates or Tenet recovers lost revenue and EBITDA more slowly
than expected beginning in later 2020 and into 2021. There is still
a high degree of uncertainty about the pace of acceleration of
coronavirus cases, along with the ultimate level of coronavirus
patient volumes in Tenet's markets, and these factors will be
important to the trajectory of 2020 revenue and EBITDA.
BEST/WORST CASE RATING SCENARIO
Ratings of Non-Financial Corporate issuers have a best-case rating
upgrade scenario (defined as the 99th percentile of rating
transitions, measured in a positive direction) of three notches
over a three-year rating horizon; and a worst-case rating downgrade
scenario (defined as the 99th percentile of rating transitions,
measured in a negative direction) of four notches over three years.
The complete span of best- and worst-case scenario credit ratings
for all rating categories ranges from 'AAA' to 'D'. Best- and
worst-case scenario credit ratings are based on historical
performance.
LIQUIDITY AND DEBT STRUCTURE
Pre-Coronavirus Outbreak Liquidity Profile Solid: Tenet's sources
of liquidity included $350 million of cash and about $1 billion of
capacity under the $1.5 billion ABL facility as of March 31, 2020.
The ABL matures in September 2024 and the company is seeking to
upsize the capacity to $2 billion concurrently with the notes
offering, proceeds of which the company plans to use to reduce
borrowings on the ABL facility. Tenet's debt agreements do not
include financial maintenance covenants aside from a 1.5x
fixed-charge coverage ratio test in the bank agreement that is only
in effect during a liquidity event, defined as whenever available
ABL capacity is less than $100 million. LTM Dec 31, 2019
EBITDA/interest paid equaled 2.5x. The next significant debt
maturities are $2.8 billion of unsecured notes maturing in April
2022 and $1.9 billion of unsecured notes maturing in June 2023. The
company produced $171 million of FCF during 2019, before the
effects of the coronavirus pandemic were affecting the operating
profile. Fitch expects the company to burn cash in 2020, with FCF
of negative $400 million-$500 million, before the level largely
recovers in 2021.
Debt Notching Considerations: The 'BB'/'RR1' and 'B+'/'RR3' ratings
for Tenet's ABL facility and the senior secured first-lien notes
reflect Fitch's expectation of recovery for the ABL facility in the
91% to 100% range and recovery for the first lien secured notes in
the 51% to 70% range under a bankruptcy scenario. The 'B'/'RR4'
rating on the senior secured second-lien notes and senior unsecured
notes reflect Fitch's expectations of recovery of outstanding
principal in the 31% to 50% range. The downgrade of the senior
secured first-lien notes to 'B+'/'RR3' reflects the increased
amount of these notes in the capital structure following this
offering.
Fitch estimates an enterprise value (EV) on a going-concern basis
of $9 billion for Tenet, after a deduction of 10% for
administrative claims. The EV assumption is based on post
reorganization EBITDA after dividends to associates and minorities
of $1.4 billion and a 7.0x multiple. To date, Fitch does not
believe that the coronavirus pandemic has changed the longer-term
valuation prospects for the hospital industry and Tenet's
post-reorganization EBITDA and multiple assumptions are unchanged
from the last ratings review.
The post-reorganization EBITDA estimate is approximately 28% lower
than Fitch's 2020 forecast EBITDA for Tenet and considers the
attributes of the acute care hospital sector and includes the
following: a high proportion of revenue (30%-40%) generated by
government payors, exposing hospital companies to unforeseen
regulatory changes; the legal obligation of hospital providers to
treat uninsured patients, resulting in a high financial burden for
uncompensated care, and the highly regulated nature of the hospital
industry.
There is a dearth of bankruptcy history in the acute care hospital
segment. In lieu of data on bankruptcy emergence multiples in the
sector, the 7.0x multiple employed for Tenet reflects a history of
acquisition multiples for large acute care hospital companies with
similar business profiles as Tenet in the range of 7.0x-10.0x since
2006 and trading multiples (EV/EBITDA) of Tenet's peer group (HCA,
UHS, and CHS), which have fluctuated between approximately 6.5x and
9.5x since 2011.
Based on the definitions of Tenet's secured debt agreements, Fitch
believes that the group of hospital operating subsidiaries that
guarantee the secured debt excludes any non-wholly owned and
non-domestic subsidiaries, and therefore, does not encompass part
of the value of the Conifer and ambulatory care segments.
The hospital operations segment contributes about 55% of
consolidated EBITDA, and Fitch uses this value as a proxy to
determine the rough value of the secured debt collateral of $4.8
billion. Fitch assumes this amount is completely consumed by the
ABL facility and the first-lien lenders, leaving $4.2 billion of
residual value to be distributed on a pro rata basis to the
remaining $2.8 billion of first-lien claims and the second-lien
secured and unsecured claims.
The ABL facility is assumed to be fully recovered before the other
secured debt in the capital structure. The ABL facility is secured
by a first-priority lien on the patient accounts receivable of all
the borrower's wholly owned hospital subsidiaries, while the first-
and second-lien secured notes are secured by the capital stock of
the operating subsidiaries, making the notes structurally
subordinate to the ABL facility with respect to the accounts
receivable collateral. Fitch assumes that Tenet would draw the full
amount available on ABL facility in a bankruptcy scenario, and
includes that amount in the claims.
TENET HEALTHCARE: Moody's Rates New 1st Lien Notes Due 2025 'B1'
----------------------------------------------------------------
Moody's Investors Service affirmed the B2 Corporate Family Rating,
B2-PD Probability of Default Rating, and Caa1 senior unsecured
ratings for Tenet Healthcare Corporation. The rating agency
downgraded Tenet's existing senior secured first and second lien
ratings to B1 from Ba3 and assigned a B1 rating to the company's
new senior secured first lien notes due 2025. There is no change to
the Speculative Grade Liquidity Rating of SGL-2. The outlook is
stable.
Proceeds from the new senior secured first lien notes will provide
additional liquidity as the company prepares for a surge in
coronavirus patients in its markets. Additional liquidity will also
be provided by an additional $500 million of borrowing capacity
that will be added to Tenet's asset-based revolver (ABL), bringing
the total facility to $2 billion.
The downgrade of the senior secured first and second lien debts
reflects a shift over time towards a higher proportion of secured
debt relative to unsecured debt in Tenet's capital structure. It
also reflects multiple actions by Tenet over the past year to boost
the capacity of its ABL.
The affirmation of the B2 CFR reflects Moody's view that Tenet's
good liquidity and anticipated relief from the recently signed
CARES Act will provide Tenet the runway it needs as it faces
significant short-term earnings headwinds related to the
coronavirus.
Ratings assigned:
Tenet Healthcare Corporation
New senior secured first lien notes due 2025 at B1 (LGD 3)
Ratings affirmed:
Tenet Healthcare Corporation
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
Senior unsecured rating at Caa1 (LGD 5)
Ratings downgraded:
Tenet Healthcare Corporation
Senior secured first lien rating to B1 (LGD 3) from Ba3 (LGD 3)
Senior secured second lien rating to B1 (LGD 3) from Ba3 (LGD 3)
The rating outlook is stable.
RATINGS RATIONALE
Tenet's B2 Corporate Family Rating is primarily constrained by the
company's high financial leverage. Moreover, Tenet's free cash flow
after minority interest payments is modest relative to debt. The
rating is also constrained by several industry-wide headwinds, the
most significant of which is the ongoing spread of the coronavirus
across the US. Moody's expects the coronavirus to materially
pressure Tenet's earnings as its hospitals and ambulatory surgery
centers (ASCs) forgo lucrative elective procedures with the current
public health crisis ongoing. The rating is supported by Tenet's
significant scale and good diversity. The company is well
diversified by state and payor. During more benign periods, Tenet's
ambulatory surgery and revenue cycle management businesses add
business diversity and will benefit from longer-term trends that
favor services being done on an outpatient basis. Tenet's revenue
cycle management business, Conifer, is expected to be spun-off in
2021, which will provide an opportunity for deleveraging, depending
on the final allocation of debt to Conifer.
The stable outlook reflects Moody's view that Tenet's liquidity
will be strong enough to mitigate near-term headwinds. It also
reflects Moody's view that demand for Tenet's services will rebound
fairly quickly once isolation measures are lifted.
With respect to governance, Tenet has generally exhibited
aggressive financial policies, marked by persistently high
financial leverage. As a for-profit hospital operator, Tenet also
faces high social risk. Moody's regards the coronavirus outbreak as
a social risk under Moody's ESG framework, given the substantial
implications for public health and safety. To prepare for a surge
of coronavirus patients, acute care hospitals are postponing or
cancelling non-essential elective surgical procedures. Further,
alternative care settings for such elective procedures, such as
ambulatory surgery centers (ASCs), are having to do the same in an
effort to conserve valuable surgical supplies (e.g., personal
protective equipment). Losing these procedures, which tend to be
more profitable than treating sick patients, will result in
significant headwinds to hospital companies' earnings. Beyond
coronavirus, the affordability of hospitals, the lack of price
transparency, and the practice of balance billing have garnered
substantial social and political attention. Additionally, hospitals
rely on Medicare and Medicaid for a substantial portion of
reimbursement. Any changes to reimbursement to Medicare or Medicaid
directly impacts hospital revenue and profitability. In addition,
the social and political push for a single payor system would
drastically change the operating environment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Tenet's ratings could be downgraded if the company faces
operational challenges or fails to achieve its planned cost
savings. Further, the divestiture of Conifer without debt
repayment, or the pursuit of share repurchases or shareholder
distributions could result in a downgrade. More specifically, the
ratings could be downgraded if debt/EBITDA is expected to be
sustained above 6.5 times. Finally, the ratings could also be
downgraded if the company's liquidity weakens.
The ratings could be upgraded if Tenet can realize the benefits
from its recent cost and operating initiatives, including increased
profit margins. Further, the ratings could be upgraded if the
company realizes improved cash flow and interest coverage metrics.
If Moody's expects debt/EBITDA to be sustained below 5.5 times, the
ratings could be upgraded.
Tenet, headquartered in Dallas, Texas, is one of the largest
healthcare providers by revenue in the US. The company operates 65
hospitals, 23 surgical specialty hospitals and approximately 470
outpatient surgical centers in the US. Tenet also owns a
revenue-cycle management business, called Conifer. Revenues for the
last twelve months ended December 31, 2019 were in excess of $18
billion.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
TERRY J. LEMONS: Seeks to Hire Rountree Leitman as Attorney
-----------------------------------------------------------
Terry J. Lemons, D.D.S., P.C., seeks authority from the US
Bankruptcy Court for the Northern District of Georgia to employ the
law firm of Rountree Leitman & Klein, LLC, as its attorneys.
The professional services that Rountree Leitman are;
a. give the Debtor legal advice with respect to its powers and
duties as Debtor-in-Possession in the management of its property;
b. prepare on behalf of Debtor as Debtor-in-Possession
necessary schedules, applications, motions, answers, orders,
reports and other legal matters;
c. assist in examination of the claims of creditors;
d. assist with formulation and preparation of the disclosure
statement and plan of reorganization and with the confirmation and
consummation thereof; and
e. perform all other legal services for Debtor as
Debtor-in-Possession that may be necessary.
Rountree Leitman's standard hourly rates are:
Attorney
William A. Rountree $475
Hal Leitman $425
David S. Klein $425
Alexandra Dishun $425
Doug Ford $400
Benjamin R. Keck $375
Alice Blanco $350
Law Clerks
Darius Lamonte $200
Brian Aton $175
Paralegals
Sharon M. Wenger $195
Megan Winokur $150
Catherine Smith $150
Yasmi Alamin $150
The Debtor paid a retainer of $20,000 to Rountree Leitman,
pre-petition on or about March 13, 2020.
Rountree Leitman represents no interest adverse to Debtor or the
estate in the matters upon which it is to be engaged.
The firm can be reached through:
Benjamin R. Keck, Esq.
Rountree Leitman & Klein, LLC
2800 North Druid Hills Road
Building B, Suite 100
Atlanta, GA 30329
Phone: (404) 584-1244
Fax : (404) 581-5038
Email: wrountree@randllaw.com
About Terry J. Lemons DDS, PC
Terry J. Lemons DDS, PC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-20517) on March 17,
2020, listing under $1 million in both assets and liabilities.
William A. Rountree, Esq. at ROUNTREE, LEITMAN & KLEIN, LLC,
represents the Debtor as counsel.
THOR INDUSTRIES: S&P Lowers ICR to 'BB-' on COVID-19 Impact
-----------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on Thor
Industries Inc. to 'BB-' from 'BB'. The outlook is negative. S&P
also lowered the issue-level rating on the company's secured term
loan to 'BB' from 'BB+'.
"The downgrade to 'BB-' reflects our updated assumption that
leverage could increase to the mid-3x area in fiscal 2020 (ending
July) and that production suspensions could continue into the busy
spring selling season. The rating reflects our revised assumption
that Thor's revenue and cash flow might decline significantly at
least during the spring selling seasonal due to production
suspensions at Thor's American and European facilities. In
addition, we believe there is a high level of uncertainty in retail
demand over at least the next several months as North America and
Europe grapple with the containment of COVID-19 and the impact that
an anticipated U.S. and European recession could have on revenue
through Thor's fiscal 2021 (ending in July). Our current assumption
is for COVID-19 containment to occur by the late-second quarter of
calendar 2020 at the earliest and that the impact on Thor's revenue
and cash flow could be severe until restrictions are lifted. In
addition, our economists anticipate a recession to cause a severe
GDP and consumer spending decline in the second quarter. We believe
there could be a prolonged impact from a recession on big-ticket
discretionary purchases such as RVs," S&P said.
The negative outlook reflects significant anticipated stress on
revenue and cash flow over at least the next several weeks, and
possibly months, which could use liquidity, materially reduce
EBITDA this year even in a recovery scenario, and result in a spike
in leverage. The negative outlook also reflects the possibility
that S&P could lower ratings over the next few months, or sooner,
if the rating agency no longer believed COVID-19 containment could
occur by about the end of the second quarter in 2020 so that the
consumer could begin to recover.
"We could lower the issuer credit rating if we believed Thor would
sustain adjusted debt to EBITDA above 4.25x, which could occur if
containment of COVID-19 at the end of the second-quarter were not
successful or if Thor's liquidity significantly deteriorated," S&P
said.
"We could revise the outlook to stable if we came to believe that
leverage would decrease and remain below 3.25x through a
combination of debt repayment and EBITDA growth. Such an
improvement in credit measures would likely reflect business
stabilization after containment of COVID-19 and an improvement in
economic growth in North America and Europe," the rating agency
said.
THRUSH AIRCRAFT: Seeks to Hire National CRS as Financial Advisor
----------------------------------------------------------------
Thrush Aircraft, Inc., seeks approval from the U.S. Bankruptcy
Court for the Middle District of Georgia to hire National CRS, LLC
as its financial advisor.
National CRS will provide such financial advisory services, which
includes reviewing potential preference claims under Section 547,
as well as to analyze affirmative defenses and offsets to such
claims and other related claims, and assisting counsel for the
Debtor and the Unsecured Creditors' Committee prepare complaints
with respect to any such causes of action.
National CRS's standard hourly rates is $350 per hour, plus actual
and necessary expenses and other charges incurred by the firm.
Michael L. Newsom, president of National CRS, assures the court
that the firm is a disinterested person as that term is defined in
section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael L. Newsom
NATIONAL CRS, LLC
4846 Sun City Center Blvd., #255
Sun City Center, FL 33573-6281
Phone: 727-515-8949
Email: mnewsom@nationalcrsllc.com
About Thrush Aircraft
Headquartered in Albany, Ga., Thrush Aircraft, Inc., manufactures a
full range of aerial application aircraft used in agriculture,
forestry, and firefighting roles. There are currently more than
2,400 Thrush aircraft operating in some 80 countries around the
world. The company was founded in 2003.
Thrush Aircraft sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Ga. Case No. 19-10976) on Sept. 4,
2019. At the time of the filing, the Debtor disclosed assets of
between $10 million and $50 million and liabilities of the same
range.
TOUGH MUDDER: Case Trustee Seeks Chapter 7 Conversion
-----------------------------------------------------
Derek C. Abbott, Esq., the chapter 11 trustee of Tough Mudder, Inc.
and Tough Mudder Event Production, Inc., seeks conversion of the
Debtors' cases to one under Chapter 7 of the Bankruptcy Code.
On February 25, 2020, the Bankruptcy Court authorized the Chapter
11 Trustee's sale of the Debtors' assets to Spartan Race, Inc. The
Sale Order authorized the Sale to Spartan Race, Inc. or its
designee -- OCR US Holdings, LLC -- pursuant to the terms of the
asset purchase agreement. The Sale closed that same day. While
the Buyer assumed over $7 million in liabilities under the Sale
Agreement, the cash consideration was only $700,000.
According to the Chapter 11 Trustee, since his appointment, he has
taken material steps to wind up the Debtors' estates, including the
rejection of unexpired leases and executory contracts, selling
certain de minimis assets located at the Debtors' former
headquarters, and managing multiple calls from former employees and
vendors on a daily basis. The Trustee has also sold all of the
Debtors' operational assets through the Sale, leaving causes of
action as the Debtors' only meaningful assets from which the
Trustee can derive value, which will take time and money.
If the Debtors are to remain in chapter 11, significant costs will
need to be incurred in preparing and soliciting a chapter 11 plan
-- costs that will be avoided if these cases are converted to
Chapter 7, the Chapter 11 Trustee argues.
Abbott was appointed Chapter 11 trustee for the Debtors, at the
behest of Andrew R. Vara, the United States Trustee for Regions 3
and 9. On January 21, 2020, the Court entered the Order Directing
the Appointment of a Chapter 11 Trustee. Counsel for the United
State Trustee has consulted with these parties-in-interest
regarding the appointment of the Chapter 11 Trustee:
(i) David Carickhoff, Esq., Archer & Greiner, P.C., counsel to
the petitioning creditors,
(ii) Frank White, Esq., Arnall Golden Gregory LLP, counsel to
Active Network, LLC, and
(iii) Adrienne Walker, Esq., Mintz Levin, Cohen, Ferris, Glovky
and Popeo, P.C., counsel to Spartan Race, Inc.
Two customers -- Michael Kealey and John Pettriccione, II --
objected to the Chapter 11 Trustee's conversion bid. They seek
reimbursement of the advance payments they've made as they weren't
able to obtain the Debtors' services before the bankruptcy filing.
About Tough Mudder Inc.
Tough Mudder, Inc. and Tough Mudder Event Production, Inc. host and
produce bstacle course race events across the United States and
internationally, selling tickets to race competitors and
contracting with vendors and venue sponsors to hold the events.
Tough Mudder, Inc. (Bankr. D. Del. Case No. 20-10036) and Tough
Mudder Event Production, Inc. (Bankr. D. Del. Case No. 20-10037)
sought Chapter 11 protection on Jan. 7, 2020.
The Debtors tapped David W. Carickhoff, Esq., at Archer & Greiner,
P.C. as counsel.
On Jan. 30, 2020, the Court appointed Derek C. Abbott as the
Chapter 11 Trustee. He is represented by:
Brett S. Turlington, Esq.
Curtis S. Miller, Esq.
Joseph C. Barsalona II, Esq.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 N. Market Street, 16th Floor
P.O. Box 1347
Wilmington, DE 19899-1347
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
Email: cmiller@mnat.com
jbarsalona@mnat.com
bturlington@mnat.com
TRANSDIGM INC: Moody's Rates Proposed Sr. Sec. Notes Ba3, On Review
-------------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to TransDigm Inc.'s
proposed new senior secured notes and placed them on review for
downgrade. All other ratings, including the company's B1 corporate
family rating and the B1-PD probability of default rating, as well
as the Ba3 ratings for its senior secured bank credit facilities
and existing senior secured notes, and the B3 ratings for its
senior subordinated notes, are unchanged and remain on review for
downgrade, as well. Net proceeds from the new secured notes
offering will be used for general corporate purposes, including to
bolster the company's backstop liquidity provisions.
RATINGS RATIONALE
The B1 corporate family rating balances an aggressive financial
policy, considerable tolerance for risk and elevated financial
leverage against TransDigm's strong competitive standing, supported
by the proprietary and sole-sourced nature of the majority of its
products. TransDigm pursues an aggressive financial policy that
seeks private equity-like returns with a focus on
shareholder-friendly initiatives that entail cash distributions as
a key priority. Leverage remains highly elevated and the company's
commercial OEM and commercial aftermarket segments seem likely to
face a much more difficult operating environment over the next few
quarters. Moody's does not expect the ongoing grounding of the 737
MAX program to have a material adverse impact on TransDigm's
financial profile.
The rapid and widening spread of the coronavirus outbreak, the
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 aerospace
sector has been adversely affected by the shock given its indirect
exposure via the airline industry to consumer demand and market
sentiment. More specifically, TransDigm's highly leverage financial
profile coupled with its direct exposure to ongoing market
disruption given weak commercial aerospace end markets 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 actions
reflect the impact on TransDigm of the breadth and severity of the
shock, and the broad deterioration in credit quality it has
triggered.
Moody's review will primarily consider: (1) the likely degree and
duration of the financial impact of the coronavirus crisis on
TransDigm's commercial aftermarket and OEM businesses, including
its forward revenue, earnings and cash flow profile; (2)
TransDigm's ability to reduce its cost structure in the face of
what are likely to be meaningfully lower volumes over the balance
of 2020, and potentially in 2021, as well; (3) the company's
liquidity profile, including anticipated cash balances, future free
cash generation, the sufficiency of external sources of financing
if needed, and the likelihood of compliance with financial
covenants; and (4) TransDigm's aggressive financial policies by
which the company is governed, and the likely allocation of capital
that it will pursue over the next few quarters.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade of ratings include
debt-to-EBITDA sustained below 5x on a Moody's-adjusted basis,
coupled with maintenance of the company's industry leading margins
and a strong liquidity profile.
Factors that could lead to a ratings downgrade include
Moody's-adjusted debt-to-EBITDA remaining in the high-7x range, or
an inability or an unwillingness to reduce financial leverage back
towards 7x; an inability to continue to make regular price
increases, or expectations of pricing pressure from aftermarket
customers such that EBITDA margins are expected to remain around
40%; or a deteriorating liquidity profile resulting in free cash
flow-to-debt (excluding dividends) dropping below 5%, annual cash
flow from operations sustained below $900 million and/or a reliance
on revolver borrowings.
The following is a summary of Moody's ratings and the rating
actions:
Assignments:
Issuer: TransDigm Inc.
Senior Secured Regular Bond/Debenture, Assigned Ba3 (LGD3); Placed
Under Review for Downgrade
TransDigm Inc., headquartered in Cleveland, Ohio, is a manufacturer
of engineered aerospace components for commercial airlines,
aircraft maintenance facilities, original equipment manufacturers
and various agencies of the US Government. TransDigm Inc. is the
wholly-owned subsidiary of TransDigm Group Incorporated (TDG).
Revenues for the twelve-month period ended December 31, 2019 were
$5.7 billion.
The principal methodology used in this rating was Aerospace and
Defense Industry published in March 2018.
TRONOX LTD: S&P Alters Outlook to Negative & Affirms 'B' ICR
------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on Tronox
Ltd. and revised the outlook to negative. It affirmed the
issue-level ratings on the secured debt at 'BB-' and the recovery
ratings at '1'. S&P also affirmed the issue-level ratings on the
unsecured debt at 'B' and the recovery ratings at '4'.
"The outlook revision to negative from stable reflects our revised
macroeconomic assumptions and the impact we expect the current
economic climate could have on key end markets for TiO2 like
architectural coatings. S&P Global Ratings now projects a global
recession in the first half of 2020, before a rebound in the second
half. In these circumstances, we expect TiO2 demand to decline,
especially in cyclical end markets such as architectural coatings.
We believe the coronavirus pandemic will reduce near-term demand
because of government-mandated restrictions that lead people to
defer activities such as home renovations and car purchases. We
recognize that Tronox has opportunities for substantial synergy
capture and operational improvements following its acquisition of
Cristal in 2019. We expect that synergy capture will help the
company to sustain credit measures that are appropriate for the 'B'
rating, with debt to EBITDA of between 5x and 6x in 2020," S&P
said.
The negative outlook on Tronox reflects the potential for a
weakening of earnings and credit measures that is greater than what
S&P has incorporated in its ratings analysis. S&P's base case
assumes that despite a global macroeconomic recession in the first
half of 2020 leading to lower demand for coatings and TiO2, that
synergy capture will offset the majority of those headwinds in
terms of its impact on profitability. S&P expects EBITDA margins in
2020 to be similar to those in 2019. For the rating, S&P expects
debt to EBITDA in the range of 5x to 6x on a weighted average
sustained basis. Its rating continues to reflect the expectation
for high volatility in the company's credit measures.
"We could lower our rating on Tronox over the next 12 months if we
expected weighted average debt to EBITDA to consistently exceed
6.0x on a sustained basis. This could occur if we believed that
sales and earnings would weaken more than we anticipate due to the
disruptive effect of the coronavirus pandemic. TiO2 pricing and
demand have been steady in the first quarter of 2020, but we expect
demand weakness to materialize beginning in the second quarter due
to global macroeconomic recession in the first half of the year. If
such weakening is sharper or longer lasting than our base case, we
could lower the rating. We believe debt to EBITDA could weaken to
such levels if EBITDA margins compressed by 500 basis points (bps)
or more due to lower demand. This could also occur if operational
improvement initiatives related to the Cristal acquisition proved
to be a smaller-than-expected benefit, or if unexpected cash
outlays or weaker-than-expected cash flows led liquidity sources to
drop below 1.2x liquidity uses," S&P said.
"We could revise our outlook to stable if the company's 2020
earnings prove more resilient than expected throughout the period
when business and consumer activity remains depressed due to
coronavirus related restrictions, or if we believed that end
markets could bounce back, after declining as we expect, in a short
period. In such a scenario, we would expect debt to EBITDA
consistently at the stronger end of the 5x to 6x range even after
factoring in potential downturns in pricing and demand. We believe
an improvement in EBITDA margins by about 250 bps above our
expectations could result in credit measures at those levels and
generate sufficient earnings to account for potential volatility.
Additionally, such a scenario could occur if Tronox can improve
Cristal's operations faster than anticipated, resulting in
increased production and reduced costs," the rating agency said.
TTK RE ENTERPRISE: Hires Century 21 as Real Estate Broker
---------------------------------------------------------
TTK RE Enterprises, LLC, seeks authority from the U.S. Bankruptcy
Court for the District of New Jersey to employ Century 21 Alliance,
as real estate broker to the Debtor.
TTK RE Enterprise requires Century 21 to market and sell the
Debtor's residential properties, and real properties located at:
-- 201 N. Dudley Avenue, Ventnor, NJ 08406.
-- 32 Northfield Avenue, Northfield, NJ 08225
-- 525 S. Pomona Road, Egg Harbor Township, NJ 08215
Century 21 will be paid a commission of 5% of the gross purchase
price.
To the best of the Debtor's knowledge 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.
Century 21 can be reached at:
Century 21 Alliance
5811 New Jersey Ave.
Wildwood, NJ 08260
Tel: (609) 522-1212
About TTK RE Enterprise
TTK RE Enterprise LLC is a privately held company in Somers Point,
New Jersey. The Company is the 100% owner of 48 real estate
properties in New Jersey having a total current value of
$9,265,000.
TTK RE Enterprise sought Chapter 11 protection (Bankr. D.N.J. Case
No. 19-30460) on Oct. 29, 2019 in Camden, New Jersey. In the
petition signed by Emily K. Vu, president, the Debtor disclosed
total assets of $9,269,950, and total liabilities of $6,432,457.
Judge Jerrold N. Poslusny Jr. oversees the case. FLASTER GREENBERG
PC - CHERRY HILL is the Debtor's counsel.
TTK RE ENTERPRISE: Hires Soleil Sotheby's as Real Estate Broker
---------------------------------------------------------------
TTK RE Enterprise, LLC, seeks authority from the U.S. Bankruptcy
Court for the District of New Jersey to employ Soleil Sotheby's
International Realty, as real estate broker to the Debtor.
TTK RE Enterprise requires Soleil Sotheby's to market and sell the
Debtor's real property located at 122 Devon Avenue, Somers Point,
NJ 08244.
Soleil Sotheby's will be paid a commission of 6% of the sales
price.
To the best of the Debtor's knowledge 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.
Soleil Sotheby's can be reached at:
Soleil Sotheby's International Realty
8502 Ventnor Ave.
Margate City, NJ 08402
Tel: (609) 487-8000
About TTK RE Enterprise
TTK RE Enterprise LLC is a privately held company in Somers Point,
New Jersey. The Company is the 100% owner of 48 real estate
properties in New Jersey having a total current value of
$9,265,000.
TTK RE Enterprise sought Chapter 11 protection (Bankr. D.N.J. Case
No. 19-30460) on Oct. 29, 2019 in Camden, New Jersey. In the
petition signed by Emily K. Vu, president, the Debtor disclosed
total assets of $9,269,950, and total liabilities of $6,432,457.
Judge Jerrold N. Poslusny Jr. oversees the case. FLASTER GREENBERG
PC - CHERRY HILL is the Debtor's counsel.
UC HOLDINGS: S&P Places 'B' ICR on CreditWatch Negative
-------------------------------------------------------
S&P Global Ratings placed its ratings, including its 'B' issuer
credit rating on UC Holdings Inc., on CreditWatch with negative
implications.
Aludyne's revenue, S&P now expects global light-vehicle sales to
decline by almost 15% in 2020 and believe Aludyne will find it
difficult to sustain its recent operating performance into 2020 and
2021. While the company might cut its costs to soften the blow, it
will not likely be able to reduce its costs nearly fast enough to
adjust to the shock from the pandemic. Even before the pandemic,
the likely slowdown in global automotive markets, along with the
end of some customer programs in 2019, would have led to weaker
performance relative to S&P's previous expectations (of more than
12.5%) because EBITDA margins fell about 190 basis points year over
year to 11% in the first nine months of 2019.
"The CreditWatch placement indicates the increased risk production
shutdowns might extend beyond our current base case and that the
demand for light vehicles in 2020 might not recover in line with
our base case after the pandemic. We plan to resolve the
CreditWatch when we can assess the magnitude of the coronavirus'
effect on the company's cash flow and liquidity over the next two
months," S&P said.
ULTRA PETROLEUM: OpCo Noteholders File 2nd Modified Statement
-------------------------------------------------------------
In the Chapter 11 cases of Ultra Petroleum Corp., et al., the law
firms of Akin Gump Strauss Hauer & Feld LLP and Morgan Lewis &
Bockius LLP said that they are second supplementing the disclosures
of OpCo Noteholders under Rule 2019 of the Federal Rules of
Bankruptcy Procedure.
Counsel represented a group of holders of the Senior Notes in
connection with negotiations with OpCo related to the Note Purchase
Agreement and the Senior Notes. In December 2016, the OpCo
Noteholders retained Counsel to represent them in connection with
restructuring discussions with the Debtors. The OpCo Noteholders
include some, but not all, of the holders that Counsel represented
prior to the Petition Date. Each of the OpCo Noteholders is aware
of and has consented to Counsel's simultaneous representation of
each of the other OpCo Noteholders.
As of April 2, 2020, the OpCo Noteholders and their disclosable
economic interests are:
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
c/o Allianz Global Investors
55 Greens Farms Road
Westport, CT 06880
* 4.91% Notes due October 2025: $20,000,000
C.M. LIFE INSURANCE
c/o Barings LLC
1500 Main Street
Suite 2800
Springfield, MA 01115
* 5.85% Notes due January 2025: $2,000,000
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
c/o Barings LLC
1500 Main Street
Suite 2800
Springfield, MA 01115
* 4.91% Notes due October 2025: $30,000,000
* 5.85% Notes due January 20205: $16,100,000
MASSMUTUAL ASIA LIMITED
c/o Barings LLC
1500 Main Street
Suite 2800
Springfield, MA 01115
* 5.85% Notes due January 20205: $1,9000,000
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
100 North Green Street
Greensboro, NC 27401
* 4.51% Notes due October 2020: $30,000,000
* 5.85% Notes due January 2025: $30,000,000
JHL CAPITAL GROUP MASTER FUND L.P.
900 N. Michigan Avenue Suite 2000
Chicago, IL 60611
* 5.92% Notes due March 2018: $5,000,000
JOHN HANCOCK LIFE INSURANCE COMPANY (U.S.A.)
197 Clarendon Street, C-3
Boston, MA 02116
* 4.51% Notes due October 2020: $15,260,00
* 7.77% Notes due March 2019: $500,000
JOHN HANCOCK LIFE INSURANCE COMPANY OF NEW YORK
197 Clarendon Street, C-3
Boston, MA 02116
* 4.51% Notes due October 2020: $5,000,000
* 7.77% Notes due March 2019: $2,000,000
JOHN HANCOCK LIFE INSURANCE COMPANY OF VERMONT
197 Clarendon Street, C-3
Boston, MA 02116
* 4.51% Notes due October 2020: $2,000,000
JPMORGAN CHASE BANK
197 Clarendon Street, C-3
Boston, MA 02116
* 4.51% Notes due October 2020: $1,000,000
* 7.77% Notes due March 2019: $500,000
THE MANUFACTURERS LIFE INSURANCE COMPANY (BERMUDA BRANCH)
197 Clarendon Street, C-3
Boston, MA 02116
* 4.51% Notes due October 2020: $26,740,000
* 5.50% Notes due January 2020: $12,000,000
MCP HOLDINGS MASTER LP
535 Madison Avenue
New York, NY 10022
* 4.51% Notes due October 2020: $133,000
* 4.98 Notes due January 2017: $1,065,000
* 5.92% Notes due March 2018: $5,338,000
* 7.31% Notes due March 2016: $888,000
* 7.77% Notes due March 2019: $7,150,000
MONARCH ALTERNATIVE SOLUTIONS MASTER FUND LTD
535 Madison Avenue
New York, NY 10022
* 4.51% Notes due October 2020: $46,000
* 4.98 Notes due January 2017: $216,000
* 5.92% Notes due March 2018: $2,145,000
* 7.31% Notes due March 2016: $180,000
* 7.77% Notes due March 2019: $1,325,000
MONARCH CAPITAL MASTER PARTNERS III LP
535 Madison Avenue
New York, NY 10022
* 4.51% Notes due October 2020: $367,000
* 4.98 Notes due January 2017: $1,814,000
* 5.92% Notes due March 2018: $7,811,000
* 7.31% Notes due March 2016: $1,512,000
* 7.77% Notes due March 2019: $9,564,000
MONARCH DEBT RECOVERY MASTER FUND LTD
535 Madison Avenue
New York, NY 10022
* 4.51% Notes due October 2020: $454,000
* 4.98 Notes due January 2017: $2,905,000
* 5.92% Notes due March 2018: $13,056,000
* 7.31% Notes due March 2016: $2,420,000
* 7.77% Notes due March 2019: $13,961,000
MONARCH MASTER FUNDING LTD.
535 Madison Avenue
New York, NY 10022
* OpCo Revolver Debt: $27,000,000
PSAM WORLDARB MASTER FUND LTD.
1350 Avenue of the Americas
New York, NY 10019
* 4.51% Notes due October 2020: $3,650,000
* 5.92% Notes due March 2018: $5,450,000
REBOUND PORTFOLIO LTD.
1350 Avenue of the Americas
New York, NY 10019
* 4.51% Notes due October 2020: $350,000
* 5.92% Notes due March 2018: $550,000
UNITED SERVICES AUTOMOBILE ASSOCIATION
AO3E
9800 Fredericksburg Rd
San Antonio, TX 78288
* 4.51% Notes due October 2020: $4,500,000
* 5.50% Notes due January 2020: $14,000,000
USAA CASUALTY INSURANCE COMPANY
AO3E
9800 Fredericksburg Rd
San Antonio, TX 78288
* 4.51% Notes due October 2020: $5,000,000
USAA LIFE INSURANCE COMPANY
AO3E
9800 Fredericksburg Rd
San Antonio, TX 78288
* 4.51% Notes due October 2020: $9,500,000
* 5.60% Notes due January 2022: $25,000,000
On January 6, 2017 Counsel filed the Verified Statement of Morgan,
Lewis & Bockius LLP Pursuant to Rule 2019 of the Federal Rules of
Bankruptcy Procedure [Dkt. No. 896], which listed the nature and
amount of all disclosable economic interests in relation to the
above-captioned debtors and debtors-in-possession held by each of
the OpCo Noteholders as of the date of the Initial 2019 Statement.
On January 24, 2017, Counsel filed the First Supplemental Verified
Statement of Morgan Lewis & Bockius LLP Pursuant to Rule 2019 of
the Federal Rules of Bankruptcy Procedure [Dkt. No 1020], to update
and supplement the Initial 2019 Statement.
Nothing contained in this statement is intended to or should be
construed as (a) a waiver or release of any claims filed or to be
filed against the Debtors by any OpCo Noteholder, its affiliates or
any other entity, or (b) a limitation upon, or waiver of, any
rights of any OpCo Noteholder to assert, file and/or amend any
claims filed in accordance with applicable law and any orders
entered in these cases.
Counsel reserves the right to amend or supplement this statement as
necessary in accordance with Bankruptcy Rule 2019.
Counsel for the OpCo Noteholders can be reached at:
AKIN GUMP STRAUSS HAUER & FELD LLP
Renée M. Dailey, Esq.
65 Memorial Road
Suite C340
West Hartford, CT 06107
Telephone: (860) 263-2922
Facsimile: (860) 263-2932
E-mail: renee.dailey@akingump.com
- and -
MORGAN LEWIS & BOCKIUS LLP
Sabin Willet, Esq.
Andrew J. Gallo, Esq.
One Federal Street
Boston, MA 02110
Telephone: (617) 341-7700
Facsimile: (617) 341-7701
E-mail: sabin.willet@morganlewis.com
andrew.gallo@morganlewis.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/PNzItb
About Ultra Petroleum
Headquartered in Englewood, Colorado, Ultra Petroleum Corp. --
http://www.ultrapetroleum.com/-- is an independent energy company
engaged in domestic natural gas and oil exploration, development
and production. The Company is listed on NASDAQ and trades under
the ticker symbol "UPL".
As of Sept. 30, 2019, the Company had $1.84 billion in total
assets, $2.69 billion in total liabilities, and a total
shareholders' deficit of $843.8 million.
The Nasdaq Stock Market, Inc. had determined to remove from listing
the common stock of Ultra Petroleum Corp., effective on Sept. 3,
2019. Based on review of information provided by the Company,
Nasdaq Staff determined that the Company no longer qualified for
listing on the Exchange pursuant to Listing Rule 5450(a)(1).
US SHIPPING CORP: S&P Downgrades ICR to 'CCC+'; Outlook Negative
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.
Shipping Corp. to 'CCC+' from 'B-'. The outlook is negative. At the
same time, S&P lowered its issue-level rating on the company's $10
million revolving credit facility and first-lien term loan to
'B-'.
The downgrade reflects the company's high debt leverage and
refinancing risk related to its upcoming term loan maturity in June
2021.
"We believe the company's liquidity position has weakened since our
last review, driven by the approaching maturity of its first-lien
term loan in June of 2021, somewhat offset by cash balances of
roughly $51 million, as of Dec. 31, 2019. While we expect
maintenance capital expenditures and working capital uses to remain
stable over the next 12 months, the company faces refinancing risk
related to the sizable maturity of its term loan," S&P said.
The negative outlook on U.S. Shipping reflects the company's
unsustainable capital structure with adjusted debt leverage above
7x and the refinancing risk related to its upcoming term loan
maturity in June of 2021.
"We could lower our rating if we believe the company faces a
near-term liquidity crisis or if the company announces a
transaction we would view as distressed. This could happen, for
example, if it is unable to refinance its first-lien term loan this
year," S&P said.
"Conversely, we could revise the outlook to stable over the next 12
months if the company is able to refinance its capital structure in
a manner we do not consider distressed and credit measures improve,
with debt leverage trending downward and positive free operating
cash flow. This could occur if market conditions improve and the
company is able to successfully enter into a new vessel contract
coming up for renewal," S&P said.
VAC FUND HOUSTON: Has Committee-Backed Sale Plan
------------------------------------------------
VAC Fund Houston, LLC, and its Official Committee of General
Unsecured Creditors have proposed a Second Amended Joint Chapter 11
Plan of Reorganization an a Disclosure Statement.
The Plan proposes to treat claims and interests as follows:
* Classes 1(A) - (F) consist of Secured Claims of Goldman Sachs
are impaired with a total claim of $5,948,800. On the Effective
Date, the Reorganized Debtor, pursuant to Section
1129(b)(2)(A)(iii), shall transfer specified properties to each
claims to satisfy it.
* Classes 2(A) - (Z) consist of Secured Claims of Lendinghome
are impaired with a total claim of $5,332,200. Each classes of
claim shall be paid in full from the proceeds of the sale of each
property designated in each claims.
* Class 6: This Class will consist of the Allowed Unsecured
Claims of creditors who have filed timely proofs of claim or were
scheduled as holding Claims which are undisputed, non-contingent
and liquidated. Each holder of an Allowed Claim in Class 6 will
receive a beneficial interest equal to the amount of their Allowed
Claim in the Unsecured Creditors Pool in exchange for their Allowed
Claim. On a quarterly basis, the Reorganized Debtor will make a
distribution to holders of beneficial interests in the Unsecured
Creditors Pool, and each holder shall receive their pro rata share
of the Unsecured Creditors Pool on each quarterly distribution
date.
* Class 7: This class shall consist of the interests of the
holder of Equity Interests in the Debtor. No holder of Equity
Interests will retain any interests under this Joint Plan. Holders
of Equity Interests are deemed to reject this Joint Plan.
The Reorganized Debtor will receive the net proceeds from the sale
of each house and disburse those funds to creditors pursuant to the
terms of the Joint Plan. As a result, it is clear that the sale of
the Debtor's property through this Joint Plan and payment of the
Debtor's obligations pursuant to its terms will result in a much
higher payout to creditors than they would otherwise receive
through liquidation under a Chapter 7.
A full-text copy of the Disclosure Statement dated March 16, 2020,
is available at https://tinyurl.com/wttwzd5 from PacerMonitor.com
at no charge.
Attorneys for Debtor:
Christopher R. Kaup
Ace Van Patten
10100 West Charleston Boulevard
Las Vegas, Nevada 89135
Telephone: (702) 258-8200
Facsimile: (602) 258-8787
E-Mail: crk@tblaw.com; avp@tblaw.com
Counsel for Official Committee of Unsecured Creditors:
Daren R. Brinkman
Laura Portillo
BRINKMAN PORTILLO RONK, APC
8275 S. Eastern Ave., Suite 200
Las Vegas, NV 89123-2545
Telephone: (702) 598-1776
E-mail: firm@brinkmanlaw.com
About VAC Fund Houston
VAC Fund Houston, LLC, a Nevada-based company engaged in activities
related to real estate, filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No.
19-17670) on Dec. 2, 2019, disclosing $15,948,556 in assets and
$17,369,695 in liabilities. The petition was signed by Christopher
Shelton, trustee of VAC Fund Houston Trust, manager of Debtor.
Judge Mike K. Nakagawa oversees the case. Christopher R. Kaup,
Esq., at Tiffany & Bosco, P.A., is the Debtor's legal counsel.
The U.S. Trustee for Region 17 appointed a committee of unsecured
creditors on Jan. 15, 2020. The committee is represented by
Brinkman Portillo Ronk, APC.
VBI VACCINES: Collaborates with NRC to Develop COVID-19 Vaccine
---------------------------------------------------------------
VBI Vaccines Inc. announced a collaboration with the National
Research Council of Canada (NRC), Canada's largest federal research
and development organization, to develop a pan-coronavirus vaccine
candidate, targeting COVID-19, severe acute respiratory syndrome
(SARS), and Middle East respiratory syndrome (MERS).
"COVID-19 is now the third, and to-date the most widespread,
coronavirus outbreak in the 21st century, and while it is clearly a
priority at this time, there remains an unmet medical need for
broader protection against emerging coronaviruses," said Francisco
Diaz-Mitoma, M.D., Ph.D., VBI's chief medical officer.
"Coronaviruses are enveloped viruses by nature which we believe
makes them a prime target for VBI's flexible enveloped virus-like
particle (eVLP) platform technology, ongoing development of which
is led and conducted at our research facility in Ottawa, Canada.
Based on past clinical experience with the eVLP platform, we expect
that a multivalent eVLP vaccine candidate, co-expressing
SARS-CoV-2, SARS-CoV, and MERS-CoV spike proteins on the same
particle, will be possible to develop. Moreover, we believe the
trivalent construct could allow for the production of broadly
reactive antibodies, which offer potential for protection from
mutated strains of COVID-19 that may emerge over time. We share
the NRC's commitment to public health and we look forward to
working with them to quickly address the ongoing pandemic."
"We are working hard to be part of the solution in this time of
increasing uncertainty by providing key Canadian expertise and
facilities to help address the real and potential global impacts of
COVID-19," said Roman Szumski, vice president, Life Sciences at the
NRC.
Laksmi Krishnan, director General of the NRC's Human Health
Therapeutics Research Centre, further commented, "The COVID-19
antigens designed at the NRC have been developed and manufactured
in a well-known and proven cell line, and we believe that our
access to critical samples can accelerate candidate evaluation. We
have a successful track record of working with VBI and this
collaboration further builds upon validated research and proven
technologies, all of which we believe strengthen our approach to
develop a differentiated, broadly reactive, multivalent vaccine
candidate."
The collaboration will combine VBI's viral vaccine expertise, eVLP
technology platform, and coronavirus antigens with the NRC's
uniquely-designed COVID-19 antigens and assay development
capabilities to identify the most immunogenic vaccine candidate for
further development.
Under the terms of the agreement, the NRC and VBI will collaborate
to evaluate and select the optimal vaccine candidate. Following
IND-enabling pre-clinical studies, conducted at both the NRC core
facilities and at VBI's research facility in Ottawa, Canada, VBI
believes that clinical study materials could be available in Q4
2020.
About VBI Vaccines Inc.
VBI Vaccines Inc. (Nasdaq: VBIV) -- : http://www.vbivaccines.com--
is a commercial-stage biopharmaceutical company developing a next
generation of vaccines to address unmet needs in infectious disease
and immuno-oncology. VBI is advancing the prevention and treatment
of hepatitis B, with the only trivalent hepatitis B vaccine,
Sci-B-Vac, which is approved for use and commercially available in
Israel, and recently completed its Phase 3 program in the U.S.,
Europe, and Canada, and with an immunotherapeutic in development
for a functional cure for chronic hepatitis B. VBI's enveloped
virus-like particle (eVLP) platform technology enables development
of eVLPs that closely mimic the target virus to elicit a potent
immune response. VBI's lead eVLP programs include a vaccine
immunotherapeutic candidate targeting glioblastoma (GBM) and a
prophylactic CMV vaccine candidate. VBI is headquartered in
Cambridge, MA, with research operations in Ottawa, Canada, and
research and manufacturing facilities in Rehovot, Israel.
VBI Vaccines reported a net loss of $54.81 million for the year
ended Dec. 31, 2019, compared to a net loss of $63.60 million for
the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$122.20 million in total assets, $29.76 million in total current
liabilities, $4.19 million in total non-current liabilities, and
$88.25 million in total stockholders' equity.
EisnerAmper LLP, in Iselin, New Jersey, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
March 5, 2020 citing that the Company has incurred, and it
anticipates it will continue to incur, significant losses and
generate negative operating cash flows and as such will require
significant additional funds to continue its development activities
to ultimately achieve commercial launch of its products. These
factors raise substantial doubt about its ability to continue as a
going concern.
VERDICORP INC: Seeks to Hire Weeks Auction as Auctioneer
--------------------------------------------------------
Verdicorp, Inc. seeks authority from the US Bankruptcy Court for
the Northern District of Florida to employ the Weeks Auction Group,
Inc., as auctioneer.
The services of an auctioneer is necessary to enable the Debtor to
maximize the value of the real estate, and surplus equipment and
machinery located on the 4030 N. Monroe property.
Weeks will organize, catalogue, and separate into lots, and
photograph, each of potentially salable items of personal property
located in the 4030 facility. Weeks will also take 3d video and
imagery of the facility itself, and prepare a full 3-d building
schematic, for inclusion in the listing of the real estate in print
media, e-platforms (Loopnet, CoStar, Realtor.com, MLS), email
blasts.
Weeks seeks to be paid a commission from the sale of personal
property in the amount of 25 percent which includes 10 percent to
be paid from the Seller and 15 percent to be paid as a buyer’s
premium. For the sale of the real estate, Weeks seeks to be paid a
commission of 10 percent in the form of a buyer’s premium. Weeks
anticipates spending $7,775.25 on hard marketing and promotional
costs, which are to be deducted from the first proceeds of the
inventory and equipment auction.
Weeks is disinterested as defined by 11 U.S.C. 101(14), according
to court filings.
The firm can be reached through:
Mark Manley
Weeks Auction Group, Inc.
2186 Sylvester Hwy Suite 1
Moultrie, GA 31768
Phone: +1 229-890-2437
About Verdicorp Inc.
Verdicorp Inc. -- http://www.verdicorp.com/-- is an innovation
company formed in 2009. Its areas of interest include heating,
ventilation and air-conditioning (HVAC), energy generation,
recovery and storage systems, and water desalination, treatment and
pumping.
Verdicorp sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Fla. Case No. 19-40427) on Aug. 14, 2019. At the time
of the filing, the Debtor had estimated assets of between $500,000
and $1 million and liabilities of between $10 million and $50
million.
The case has been assigned to Judge Karen K. Specie. The Debtor is
represented by Michael H. Moody Law Firm PLLC.
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
Verdicorp, Inc., according to court dockets.
VERMILION ENERGY: S&P Cuts ICR to 'B' on Weak Industry Conditions
-----------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Vermilion Energy Inc. to 'B' from 'BB-'. S&P also revised its
recovery rating on the company's senior unsecured debt to '2' from
'3', and lowered its issue-level rating on the debt to 'B+' from
'BB-'.
"The downgrade reflects our revised oil and gas price assumptions.
S&P Global Ratings lowered its oil price assumptions in response to
a likely massive drop in global demand due to the spread of the
coronavirus as well as OPEC and Russia's inability to reach
consensus regarding production cuts. In particular, we lowered our
West Texas Intermediate (WTI) price assumption to US$25 per barrel
and Brent to $30 per barrel for the rest of 2020. Natural gas
prices in both North American and Europe are also expected to
remain pressured. At these prices, we expect Vermilion's financial
measures to be weak for the rating. Specifically, we expect the
company's FFO-to-debt ratio to be 15%-20% in 2020, well below our
previous expectation of 35%, which, in our view, is not
commensurate with a 'BB-' rating. Although we expect the ratio will
improve in 2021 to about 25%, this is largely contingent on oil
prices improving in line with our expectations," S&P said.
The stable outlook reflects S&P's expectation that Vermilion's
price realizations outside North America, and the company's
competitive production costs in these regions, should ensure the
company will maintain an FFO-to-debt ratio above 12% in 2020 and
2021, with sufficient cushion in the credit facility's
availability. In addition, S&P believes the company has further
flexibility to cut back on capital spending in 2021 to support
credit measures.
"We could lower the rating if Vermilion's fully adjusted two-year,
weighted-average FFO-to-debt ratio consistently fell below 12%,
with weakening in liquidity. This could occur if hydrocarbon prices
underperformed our current assumptions," S&P said.
"We could raise the rating if the adjusted FFO-to-debt ratio
approached 30% for a sustained period. We believe this could occur
if commodity prices rose more quickly than our expectations and the
company continued to exercise financial discipline," the rating
agency said.
VERMILLION INC: Delays Form 10-K Filing Over COVID-19 Pandemic
--------------------------------------------------------------
Vermillion, 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.
Vermillion has negotiated an amendment to the Assistance Agreement,
effective March 22, 2016, between the Company and the State of
Connecticut Department of Economic and Community Development to
restore the Company's compliance with the terms of the Loan
Agreement. However, due to the current COVID-19 pandemic-related
work restrictions and closures, including pursuant to the "Stay
Safe, Stay Home" restrictions on all workplaces for non-essential
business in Connecticut, the Company experienced delays and
logistical issues finalizing the Amendment, the result of which is
expected to impact the Company's Form 10-K disclosure. The Company
currently expects to finalize the Amendment and file the Form 10-K
on or before
April 14, 2020.
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 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.
VITO FASCIGLIONE: Allowed to Use Cash Collateral on Interim Basis
-----------------------------------------------------------------
Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern
District of New York inked his approval to a First Interim
Stipulation and Consent Order authorizing Vito Fasciglione Holdings
24, Inc. to use the cash collateral of Parker Hart Limited
Partnership.
Parker is a secured creditor of the Debtor pursuant to two loans.
As of Petition Date, the total unpaid indebtedness under the Loans
was $1,101,096.67 as per Parker's filed proofs of claim.
Parker consented to the Debtor's use of cash collateral according
to the terms and conditions of the Stipulation, which includes
that:
(a) The Debtor may use Parker's cash collateral to pay for its
ordinary and necessary post-petition operating expenses as
categorized in the proposed monthly budget through April 30, 2020.
(b) The Debtor agrees to provide Parker with weekly accounting
reports -- providing for and detailing all revenue and expenditures
from the Real Estate Collateral.
(c) The Debtor will continue to remit to Parker on a monthly
basis the sum of $6,196.25 during the tenure of the Stipulation and
any extensions of same, on the first business on or following the
tenth calendar day of each month.
(d) Parker is granted a valid, binding, enforceable and
perfected continuing replacement lien and security interest in and
on any and all of the collateral set forth in the applicable
mortgage, to the same extent, validity and priority held by Parker
on the Petition Date, whether or not constituting pre-petition
collateral or post-petition collateral.
(e) The Debtor will maintain property, casualty, workers
compensation, and liability insurance coverage as provided in the
Loan Documents, in connection with the Real Estate Collateral and
name Parker as an additional insured as to its Real Estate
Collateral.
(f) The Debtor will remain current on all post-petition tax
obligations arising out of its ownership and/or operation of its
business.
(g) The Debtor will make the Real Estate Collateral available
to Parker for one or more physical inspections, so that Parker may
conduct and complete appraisals and environmental reviews, and
analyses of any sort with respect to the current condition or
prospective use of the Real Estate Collateral.
A copy of the Order is available for free at https://is.gd/hUYBTC
from PacerMonitor.com.
About Vito Fasciglione
Vito Fasciglione Holdings 24, Inc., a New York-based privately held
company engaged in the business of renting and leasing real estate
properties, filed a voluntary Chapter 11 bankruptcy petition
(Bankr. S.D.N.Y. Case No. 19-22768) on April 9, 2019. At the time
of filing, the Debtor was estimated to have assets and debts of $1
million to $10 million. Judge Robert D. Drain oversees the case.
Harold, Salant, Strassfield & Spielberg is the Debtor's legal
counsel.
VMWARE INC: Fitch Affirms BB+ LT IDR, Outlook Negative
------------------------------------------------------
Fitch Ratings affirms VMware, Inc.'s Long-Term Issuer Default
Rating (IDR) at 'BB+'. In addition, Fitch assigns a 'BBB-'/'RR2'to
VMware's note offering. The Rating Outlook is Negative. The ratings
and outlook reflect Fitch's assessment that VMware's Long-Term IDR
should be equalized with that of Dell Technologies Inc. (Dell),
which owns 80.9% of VMware's common stock. Otherwise, Fitch
believes the company's strong operating and financial profile would
support a Long-Term IDR of at least 'BBB+'. The ratings and outlook
incorporate Fitch's expectation for pressured near-term top line
growth due to the coronavirus despite the company's increasing
recurring revenue mix. Beyond the near term, Fitch expects
mid-single-digit organic revenue growth from strong customer
adoption of its full infrastructure stack solutions amidst
increasing complexity from the proliferation of applications and
mobility and multi-cloud environments. Acquisitions and increasing
subscription sales will weigh on profit margins but Fitch still
expects operating EBITDA margins in the low- to mid-30%. Unearned
revenue growth will moderate from the sales mix shift but Fitch
anticipates annual FCF will average more than $2.5 billion, which
Fitch expects will mainly support incremental acquisitions and
stock buybacks.
VMware announced it will issue senior unsecured notes, which will
be pari passu to the company's existing senior unsecured debt. The
company plans to use net proceeds for general corporate purposes,
which may include refinancing upcoming debt maturities. VMware
faces a $1.25 billion 2.3% senior note maturing on Aug. 21, 2020
and $1.5 billion outstanding under the company's 364-day term loan
facility expiring during the upcoming third fiscal quarter with
available cash and cash equivalents was $2.9 billion as of Jan. 31,
2020. Fitch notches up the ratings on VMware's senior unsecured
notes from the company's Long-Term IDR to 'BBB-'/'RR2' reflecting
its significant cash flow relative to debt.
KEY RATING DRIVERS
Dell Ownership Risk: Fitch expects VMware's more than $2.5 billion
of average annual FCF and Dell's 80.9% ownership and 97.5% voting
control of VMware, Inc. provides significant contingent liquidity
for Dell as it manages significant intermediate-term debt
maturities and debt reduction commitments. Fitch expects VMware
will use FCF for acquisitions and stock buybacks but that cash
could build through the forecast period. Fitch believes VMware's
independent-related party transaction committee is unlikely to
constrain Dell from accessing VMware's cash, should Dell's cash
flow prove insufficient to meet debt maturities or fund
acquisitions or distributions.
Strengthened FCF Profile: High recurring maintenance revenue,
strong profitability, growing unearned revenue and low capital
intensity should continue to support strong annual FCF with margins
in the high 20% to low 30%. Fitch's forecast for $2.5 billion to
$3.0 billion of annual FCF, although Fitch anticipates cash from
unearned revenue increases to moderate over time as the mix of
subscription sales increases. Fitch expects VMware will use FCF for
a combination of share repurchases and tuck-in acquisitions, rather
than incremental support for Dell.
Favorable Top-Line Drivers: Fitch believes secular demand from
customers migrating to the hybrid cloud and VMware and Dell
cross-selling a combined suite of offerings across a large and
diversified customer base will continue driving solid, long-term
revenue growth. Expansion into virtualized networking, software
defined storage and management, via acquisitions, provide
incremental customer penetration opportunities. The acquisitions of
Pivotal and Carbon Black expanded and strengthened VMware's cloud
business, fleshing out its full infrastructure stack solutions
while adding a little over $1 billion of subscription revenue.
Meaningful Investment Intensity: Fitch expects investment intensity
will remain fixed at roughly 20% of revenue as R&D investment
supports continued technology leadership, reflected by VMware's
strong market leadership positions. Fitch also believes high R&D
spending is required for cloud growth, particularly within the
context of a shifting competitive landscape as VMware faces a more
diversified set of competitors. These include off-premise compute
resources, including public cloud providers Amazon Web Services and
Azure, which have considerably greater resources and financial
flexibility.
DERIVATION SUMMARY
On a standalone basis, VMware's technology leadership, large and
diversified installed customer base and full suite of products and
services should drive consistent positive long-term organic revenue
growth and strong FCF support a strong investment grade rating.
However, as a majority owned subsidiary of comparatively weaker
Dell Technologies (BB+/Negative), Fitch derived the rating for
VMware within the context of Fitch's parent-subsidiary linkage
criteria and believes 'BB+' is appropriate, given the moderate to
strong linkage between the two entities. Fitch believes the absence
of restrictions on restricted payments and inter-company loans more
than offset the lack of upstream guarantees and cross-default
provisions or the existence of related party governance structures
on the Boards of Directors at VMware.
The company's 'BB+' rating mainly reflects Fitch's belief that
VMware's linkage with parent, Dell Technologies Inc., is moderate
and that governance mechanisms put in place at both VMware's and
Dell's Boards of Directors encumber but are insufficient to prevent
Dell from ultimately accessing VMware's assets in the absence of
restrictions on restricted payments (RP) or inter-company loans.
Fitch's Parent-Subsidiary Linkage Criteria govern the derivation of
VMware's ratings, given Dell's 80.9% economic and 97.5% voting
interests in VMware and consolidation of VMware's financial
statements, despite Fitch's belief VMware would be rated three to
four notches higher than Dell on a standalone basis.
KEY ASSUMPTIONS
-- Negative mid-single-digit sequential revenue growth in the
first half of fiscal 2021 followed by partial recovery in the
second and leading to low- to mid-single-digit organic revenue
growth through fiscal 2022.
-- Resumption of mid- to high-single digit revenue growth through
the remainder of the forecast period from increasing adoption of
VMware's full infrastructure stack solutions.
-- Limited acquisition spending until fiscal 2022 and ticking up
to roughly $1 billion of tuck-in acquisitions through the forecast
period.
-- Acquisitions and shift to subscription model constrains profit
margin expansion with operating EBITDA margins in the low- to
mid-30%.
-- Unearned revenue continues to decline with higher installment
payments from the sales mix shift to subscriptions.
-- Capex and non-GAAP research and development represent
approximately 3% and high-teens percent of revenue, respectively,
supporting new product development.
-- VMware uses FCF for a combination of acquisitions and share
repurchases rather than debt reduction or incremental dividends to
Dell Technologies.
RATING SENSITIVITIES
Developments That May, Individually or Collectively, Lead to
Positive Rating Action
-- Dell's ratings are upgraded, given Fitch's assessment that
Dell's and VMware's parent-subsidiary linkage is moderate and,
therefore, equalization of their IDRs.
-- VMware explicitly ring fences its cash and cash flows by
adding language to its credit agreement and indentures restricting
payments and intercompany loans.
Developments That May, Individually or Collectively, Lead to
Negative Rating Action
-- Dell's ratings are downgraded due to the use of FCF for
purposes other than debt reduction or expectations for core
leverage (core debt to core EBITDA) sustained above 3.5x.
-- Incremental permanent debt to fund shareholder returns or pay
a dividend outpace profitability growth, resulting in expectations
for total debt to operating EBITDA at VMware sustained above 2.5x.
-- Sustained organic revenue growth underperformance, suggesting
diminished competitiveness of VMware's cloud offerings or
heightened competition, including from cloud infrastructure
providers.
BEST/WORST CASE RATING SCENARIO
Ratings of Non-Financial Corporate issuers have a best-case rating
upgrade scenario (defined as the 99th percentile of rating
transitions, measured in a positive direction) of three notches
over a three-year rating horizon; and a worst-case rating downgrade
scenario (defined as the 99th percentile of rating transitions,
measured in a negative direction) of four notches over three years.
The complete span of best- and worst-case scenario credit ratings
for all rating categories ranges from 'AAA' to 'D'. Best- and
worst-case scenario credit ratings are based on historical
performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch expects VMware's liquidity will remain
adequate and, as of Jan. 31, 2020, was supported by: i) $2.92
billion of cash and cash equivalents and ii) an undrawn $1 billion
RCF expiring in Sept. 2022. Fitch's expectation for more than $2.5
billion of average annual FCF through the forecast also supports
liquidity, which Fitch expects VMware will use for a combination of
share repurchases and tuck-in acquisitions.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
VMware, Inc.: 4.2; Governance Structure: 4
Dell's 80.9% ownership interest in VMware and lack of restricted
payments and inter-company loan constraints in the company's credit
agreements and indentures drives the 4 factor rating for governance
structure.
WATSON GRINDING: Seeks Authorization to Use Cash Collateral
-----------------------------------------------------------
Watson Grinding and Manufacturing Co. seeks authorization from the
U.S. Bankruptcy Court for the Southern District of Texas to
continue using cash collateral outside the ordinary course of
business in the amount of $202,936.
Texas Capital Bank, National Association, which claims a lien on,
among other things, the Debtor's cash consents to the Debtor's use
of cash collateral. The Debtor and Watson Valve Services, Inc. have
a revolving line of credit with Texas Capital. The current
principal balance due under the Note is approximately $3,000,000.
About Watson Grinding & Manufacturing
and Watson Valve Services
Watson Grinding & Manufacturing Co. --
http://www.watsongrinding.com/-- provides precision machined
parts, thermal spray coatings and grinding services to companies in
the oil and gas, chemical, and mining industries.
Watson Valve Services, Inc., -- http://watsonvalve.com/-- is a
turn-key OEM manufacturer of severe service ball valves.
Additionally, Watson Valve provides hydrostatic and pneumatic
pressure testing; oxygen service cleaning; on-site and off-site
installation support and troubleshooting; valve dis-assembly,
analysis, repair, and rebuilding; actuation system mounting and
installation; CNC and manual machining; grinding; thermal spray
coatings; coatings analysis; and non-destructive testing.
Watson Grinding and Watson Valve sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Texas Case Nos. 20-30967 and
20-30968) on Feb. 6, 2020.
At the time of the filing, Watson Grinding disclosed assets of
between $10 million and $50 million and liabilities of the same
range. Watson Valve had estimated assets of between $10 million
and $50 million and liabilities of between $500,000 and $1
million.
Judge Marvin Isgur oversees the cases.
The Debtors tapped McDowell Hetherington, LLP and Jones, Murray &
Beatty, LLC, as their legal counsel.
WATSON VALVE: Hires MACCO Restructuring as Financial Advisor
------------------------------------------------------------
Watson Valve Services, Inc., seek authority from the US Bankruptcy
Court for the Southern District of Texas to employ MACCO
Restructuring Group LLC as financial advisor.
Services MACCO will render are:
a. provide business and debt restructuring advice, including
business strategy among key elements of the Debtor's business, as
necessary;
b. assist or prepare a weekly 13-week cash flow forecast and
related financial and business models that can be utilized by
management, among others, to understand the Debtor's liquidity;
c. review the inventory and other assets to determine its
salability and monetization;
d. assist in making operational decisions, including those
which will or potentially will, affect operations, contracting,
accounting, staffing, collection of accounts, cash and cash
disbursements, and all similar business undertakings;
e. assist in or implement cost containment procedures;
f. direct, supervise, hire and terminate the Company's
employees, consultants and professionals (subject to applicable law
and contractual obligations of the Debtor);
g. assist in managing and controlling cash, cash outflows and
financing commitments that expend cash;
h. upon authorization, canceling, committing to, or
renegotiating all contracts;
i. assist in asset redeployment opportunities as deemed
appropriate;
j. assist with negotiating with the Debtor's creditors, the
January 24 Claimants Committee, and all other parties-in-interest;
k. assist in the preparation of a cash collateral budget to be
presented to the bankruptcy court; and
l. evaluate and make recommendations in connection with
strategic alternatives as needed to maximize the value of the
Debtor's estate.
Drew McManigle, founder and managing director of MACCO, assures the
court that his firm is "disinterested person," as that term is
defined in the Bankruptcy Code Section 101(14).
Mr. McManigle's hourly rate will be $550.00 per hour. MACCO has
agreed to cap Mr. McManigle's fees as CRO at $30,000/month. Mr.
McManigle will be assisted by other MACCO personnel whose hourly
rates are:
Engagement Principal $550
Managing Director $350-$475
Director $250-$375
Senior Associates $150-$300
The firm can be reached through:
Drew McManigle
MACCO Restructuring Group LLC
700 Milam St #1300
Houston, TX 77002
Phone: (410) 350-1839
Email: drew@maccorestructuringgroup.com
About Watson Valve Services
Watson Valve Services, Inc., founded in 2002 in Houston, Texas,
supplies specialty and custom valves, with a specialty in valves
for autoclaves used to mine gold. The company filed a Chapter 11
petition (Bankr. S.D. Tex. Case No. 20-30968) on February 6, 2020
in Houston, Texas. John Watson is the Debtor's chief executive
officer. Judge Marvin Isgur oversees the case. McDowell
Hetherington LLP represents the Debtor as counsel.
WEIAND AUTOMOTIVE: No Quick Ruling on Claim Discharge Dispute
-------------------------------------------------------------
Chief Bankruptcy Judge Christopher S. Sontchi denied the requests
of reorganized Weiand Automotive Industries, Inc., and its
debtor-affiliates and a group of plaintiffs asserting claims for
environmental clean-up costs for summary judgment on their
dispute.
According to Judge Sontchi, neither the Reorganized Debtors nor the
Plaintiffs are entitled to summary judgment on the dispute over the
discharge of claims. There is a genuine dispute of material fact
concerning when the California Action claims arose, the judge
says.
The Defendants argue that the Plaintiffs' environmental claims are
discharged by the Confirmation Order because: (i) the Plaintiffs'
claims arose prior to the petition date, and (ii) the Plaintiffs
lack standing to assert their claims based on an alleged breach of
the Reorganized Debtors' Voluntary Cleanup Agreement. Conversely,
the Plaintiffs maintain that the Confirmation Order does not
discharge their environmental claims because: (i) their claims did
not arise until after the Court confirmed the Reorganized Debtors'
Plan of Reorganization, and (ii) the Plaintiffs did not receive
constitutionally adequate notice of the Reorganized Debtors'
bankruptcy proceedings.
Judge Sontchi notes that relevant procedural background spans more
than one decade. On Sept. 28, 2009, Weiand Automotive Industries,
Inc., Holley Performance Products Inc., and their affiliates filed
voluntary petitions with the United States Bankruptcy Court for the
District of Delaware for relief under Chapter 11 of the Bankruptcy
Code. On Dec. 2, 2009, the Delaware Bankruptcy Court entered a bar
date order establishing Feb. 1, 2010 as the general bar date for
all creditors holding a claim. On June 7, 2010, the Delaware
Bankruptcy Court entered an order confirming the Debtors' Amended
Plan of Reorganization Under Chapter 11 of the Bankruptcy Code,
which entered effect on June 22, 2010. The case was closed on Feb.
27, 2012.
On March 20, 2015, the Plaintiffs filed a complaint in the United
States District Court for the Central District of California
against Joan F. Weiand, Joan F. Weiand Trust, and the Reorganized
Debtor, Weiand Automotive. In the California Action the Plaintiffs
seek, among other things, to recover past, present, and future
environmental clean-up costs associated with the surface and
sub-surface contamination and migration of hazardous waste on
properties owned and leased by the Plaintiffs. The California
Action asserts claims under the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA") and California
state law. On July 2, 2015, Holley Performance Products, Inc. filed
a motion to dismiss the California Action on grounds which included
that the Plaintiffs' claims were barred both by the Delaware
Bankruptcy Court's discharge order in the Weiand Bankruptcy and by
a 2001 settlement order issued by the California District Court in
connection with a previous contamination cleanup cost lawsuit by
Union Pacific Railroad Company.9 This motion was granted in some
respects but denied with respect to the Weiand Bankruptcy discharge
order and the Union Pacific Railroad Company settlement order.
On July 2, 2015 the Reorganized Debtors filed a motion in the
Bankruptcy Court to reopen the Bankruptcy to determine if the Bar
Date Order and the discharge and injunction provisions in the Plan
and Confirmation Order applied to the California Action claims (the
"Claim Discharge Dispute"). The Court denied this motion without
prejudice in the event that the California District Court would
prefer the Delaware Bankruptcy Court determine whether Discharge
Injunction was applicable to the claims asserted in the California
Action. On Sept. 21, 2015, the California District Court stayed the
California Action pending mediation between the Reorganized Debtors
and the Plaintiffs, which after approximately one year was
unsuccessful.13 The California Action remains stayed.
On April 12, 2019, the Reorganized Debtors filed the Motion for
Summary Judgment on the Claim Discharge Dispute, and on May 31,
2019, the Plaintiffs filed their Cross Motion for Summary Judgment
on the Claim Discharge Dispute. Additionally, on May 17, 2019 the
Plaintiffs filed their Motion for Summary Judgment on the Insured
Claims, which seeks, irrespective of the ruling on the Claim
Discharge Dispute, a judgment that would permit the Plaintiffs to
establish Weiand's liability in the California Action and to
collect judgment from Weiand's insurers.
According to Judge Sontchi, factual issues exist with respect to
both the CERCLA and the California state law claims. Additionally,
the record is insufficient to determine if the Plaintiffs were
known creditors of the Debtors or if the Debtors' publication
notice was adequate. Furthermore, because the Plaintiffs never
asserted the arguments in their briefs, the Court will not decide
if the Plaintiffs lack standing to assert their claims pursuant to
the Reorganized Debtors' alleged breach of the Voluntary Cleanup
Agreement.
On the Insured Claims Dispute, the Court grants the Plaintiffs
summary judgment. Both statutory law and case law provide that the
Plan discharge does not affect the liability of non-debtor third
parties, including a debtor's insurer. Section 524(a) of the
Bankruptcy Code voids any judgment, action, or recovery against the
bankruptcy estate in connection with the personal liability of the
debtor. Statutory law and case law uniformly provide that section
524(a) and section 524(e) allow a creditor to recover from a
third-party who may be liable for the debt of the debtor. The
Reorganized Debtors have not challenged this interpretation of
section 524. Additionally, the Reorganized Debtors have not
provided any indication that any of the underlying policy interests
that support this interpretation will be frustrated by the
Plaintiffs' suit. Pursuant to section 524(e) the Plaintiffs are not
barred from establishing the liability of the Reorganized Debtors
for the purpose of collecting from non-debtor third party insurance
companies.
A copy of the Court's Opinion dated Feb. 25, 2020 is available at
https://bit.ly/2TVOpE7 from Leagle.com.
Weiand Automotive Industries, Inc., Debtor, represented by Evelyn
J. Meltzer -- meltzere@pepperlaw.com -- Pepper Hamilton LLP, John
Henry Schanne, II -- schannej@pepperlaw.com -- Pepper Hamilton LLP
& David B. Stratton -- strattond@pepperlaw.com Pepper Hamilton
LLP.
About Holley Performance
Holley Performance and its affiliates are suppliers of performance
automotive products. The Company designs, manufactures, and
markets a diversified line of performance automotive products,
including carburetors, fuel pumps, fuel injection systems, nitrous
oxide injection systems, superchargers, exhaust headers, mufflers,
and automotive performance plumbing products.
Holley Performance and its affiliates filed for Chapter 11 on
September 28, 2009 (Bankr. D. Del. Case No. 09-13333). Pepper
Hamilton LLP represented the Debtors in their restructuring
effort.
Ropes & Gray LLP served as corporate counsel. Epiq Bankruptcy
Solutions LLC served as claims and notice agent. The Debtors'
cases were assigned to Judge Peter J. Walsh. The petition said
assets and debts were between $100 million and $500 million.
Holley Performance returned to the bankruptcy court 19 months after
winning court approval of its last reorganization plan.
On June 7, 2010, the Delaware Bankruptcy Court entered an order
confirming the Debtors' Amended Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code, which entered effect on June 22,
2010. The case was closed on Feb. 27, 2012.
WEST COAST DISTRIBUTION: Liquidating its Assets to Satisfy Claims
-----------------------------------------------------------------
West Coast Distribution, Inc., has proposed a liquidating Plan.
On the Effective Date, the Debtor will create and enter into a
liquidating trust for the benefit of creditors. The Liquidating
Trust will be a creditors' liquidating trust for all purposes,
including Treasury Regulations Section 301.7701-4(d), and is
intended to be treated as a grantor trust for federal income tax
purposes. The Liquidating Trust will be organized for the purpose
of collecting, distributing, liquidating and otherwise disposing of
all of the funds, property, claims, rights and causes of action of
the Debtor and its estate which is assigned to the Liquidating
Trust pursuant to, and in accordance with, the Plan. After the
Liquidating Trust has been created and has taken
ownership/assignment of all funds, property, claims, rights and
causes of action of the Debtor and its estate, the Debtor shall
dissolve or otherwise wind down pursuant to applicable law, and
shall not conduct any further business and/or other activities.
Classes 1 under the Plan consists of the secured claims of JEB.
The secured claims of JEB will be paid in full out of the Estate
Funds in the amount allowed by the Court. The only other secured
claims that were scheduled by the Debtor were in favor of HYG
Financial Services, Inc. and Wells Fargo Equipment Finance, both of
whom (along with an affiliated entity of Wells Fargo) filed secured
proofs of claim. However, all of these claims relate to equipment
leases which were rejected by the Debtor on the Closing Date which
entitles these equipment leasing companies to retrieve their
equipment in full satisfaction of their secured claims. The only
claims that these equipment leasing would be entitled to assert
would be any legitimate rejection damage claims they may have, but
all of those claims would constitute general unsecured claims
(i.e., class 3 claims). Two other creditors asserted secured
proofs of claim. One, IPFS Corporation, is an insurance financing
company whose collateral consists solely of any unearned insurance
premiums of which the Debtor believes there are none and, if there
are any, foreclosing on them would satisfy any secured claim of
IPFS Corporation. Two, creditor Workforce filed a secured proof of
claim in the amount of $4,382,448. However, Workforce obtained its
lien during the avoidable preference period on July 18, 2019, which
therefore makes that lien avoidable as a preference pursuant to
Section 547 of the Bankruptcy Code. Moreover, the only lien that
Workforce recorded was an abstract of Judgment with the Los Angeles
Recorder's Office, and the Debtor does not own any real estate.
The Debtor therefore believes that Workforce does not have any
valid lien against any of the Estate Funds because none of the
Estate Funds constitute the proceeds of any collateral of
Workforce. The Debtor and Workforce entered into a stipulation
that was approved by the Court that provided Workforce with an
allowed general unsecured claim in the amount of $4,382,448.
Class 2 under the Plan consists of all priority claims that are
referred to in Bankruptcy Code Sections 507(a)(3), (4), (5), (6),
and (7). The Debtor scheduled a total of $13,005 of priority debt
owed to four employees. No additional priority claims were filed
against the Debtor. All allowed priority claims will be paid in
full out of the Estate Funds.
Class 3 under the Plan consists of all non-priority general
unsecured claims other than claims that are subordinated claims or
constitute equity equivalent investments. The total ultimate
amount of the class 3 allowed claims will not be known until the
claims objection process has been completed. As indicated in the
Claims Chart, there are a total of approximately $12,978,704 of
asserted class 3 claims between class 3 claims scheduled by the
Debtor and class 3 claims asserted in timely filed proofs of claim
inclusive of the Workforce claim. Of these total asserted class 3
claims, approximately $4,787,525 are held by JEB or other
affiliates of the Debtor ("Insider/Affiliated Claims"). This figure
of $4,787,525 of Insider/Affiliated Claims includes a scheduled
claim of $2,684,889 in favor of AJEB Holdings, Inc. and includes a
scheduled claim of $55,356 in favor of JEB Industry, Inc. The
Committee has advised the Debtor that it intends to file objections
to at least these two insider/affiliated claims and that because
these two entities are not in good legal standing as they are both
suspended corporations, they are not permitted to prosecute or
defend an action. The Committee also believes that these claims
are unenforceable against the Debtor and its estate because the
Committee contends that all of the statutes of limitations that
likely apply have lapsed. Finally, there is a scheduled unsecured
debt of $1,994,076 in favor of JEB which the Committee is
investigating.
Class 4 under the Plan consists of all claims that are subordinated
claims or constitute equity equivalent investments. The holders of
class 4 claims will not be receiving any distribution under the
Plan unless all class 3 allowed claims are paid in full, which the
Debtor does not believe will be the case. To the extent that any
scheduled or claimed secured or unsecured debt owed to an insider
is reclassified as equity or subordinated under 11 U.S.C. Sec.
510(c), those reclassified or subordinated debts shall be
classified and treated under class 4.
Class 5 under the Plan consists of all equity interests in the
Debtor. The holders of equity interests in the Debtor will not be
receiving any distribution under the Plan on account of their
equity interests.
A full-text copy of the Disclosure Statement dated March 16, 2020,
is available at https://tinyurl.com/uur9pjz from PacerMonitor.com
at no charge.
Attorneys for the Chapter 11 Debtor:
RON BENDER
LINDSEY L. SMITH
LEVENE, NEALE, BENDER, YOO & BRILL L.L.P.
10250 Constellation Blvd., Suite 1700
Los Angeles, California 90067
Telephone: (310) 229-1234
Facsimile: (310) 229-1244
E-mail: rb@lnbyb.com
lls@lnbyb.com
About West Coast Distribution
West Coast Distribution Inc. is a full-service third party
logistics and supply chain management provider specializing in
apparel, retail and lifestyle brands.
West Coast Distribution sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 19-20332) on Aug. 30,
2019. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range.
The case is assigned to Judge Sheri Bluebond.
The Debtor tapped Levene, Neale, Bender, Yoo & Brill LLP as its
legal counsel; and Fineman West Co. LLP as its accountant.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Sept. 30, 2019. The committee is represented by
Weiland Golden Goodrich LLP.
WHITE STAR: Judge Approves Cash Collateral Stipulation With RBL
---------------------------------------------------------------
Judge Janice D. Loyd of the U.S. Bankruptcy Court for the Western
District of Oklahoma inked her approval to the Stipulation and
Agreed Order amending the Final DIP Order and authorizing White
Star Petroleum Holdings, LLC, and its debtor-affiliates to use cash
collateral.
The Prepetition RBL Agent, on behalf of the Prepetition RBL
Lenders, consents to the Debtors' continued use of cash collateral,
subject to the terms and conditions set forth in the Stipulation
and Agreed Order. The Debtors will only be allowed to use cash
collateral to pay their actual and necessary expenses, not to
exceed the maximum budgeted amounts therefore as set forth in the
Approved Budget.
The Debtors are authorized to continue to use cash collateral from
the Effective Date until the earlier of: (a) the entry of an order
by the Bankruptcy Court modifying or terminating the use of cash
collateral; (b) ten business days after the declaration of
Termination Event by the Prepetition RBL Agent; and (c) the
effective date of the Plan.
In partial satisfaction of these Adequate Protection Claims and/or
the Prepetition RBL Obligations, the Debtors are authorized to
make discretionary payments to the Prepetition RBL Agent, in one or
more payments in amounts determined by the Debtors and consented to
by the Committee but not exceeding $25 million in the aggregate.
The Debtors is also allowed pay to the Prepetition RBL Agent the
reasonable, documented, out-of-pocket fees, costs and expenses
incurred or accrued by the Prepetition RBL Secured Parties for
legal counsel and financial advisors (which will be limited to the
reasonable and documented out-of-pocket fees and expenses of Paul
Hastings LLP, RPA Advisors, Tomlins Law, PLLC and James W. Barlow
and one financial advisor (which will be RPA Advisors, LLC) for the
Prepetition RBL Lenders as a group) whether incurred before or
after the Petition Date in the same manner and subject to the same
conditions as provided for in paragraph 8 of the Final DIP Order.
Each of the following constitute an Event of Default under the
Stipulation:
(a) unauthorized use of cash collateral by the Debtors;
(b) failure by the Debtors to comply with any of the reporting
requirements and such failure will continue for five business days
after receipt of a written notice from the Prepetition RBL Agent to
comply with such reporting requirements;
(c) failure by the Debtors to perform any other obligation
contemplated by the Stipulation and such failure will continue for
five business days after receipt of a written notice from the
Prepetition RBL Agent to perform such obligations;
(d) failure by the Debtors to continue to seek approval of the
Disclosure Statement or confirmation of the Plan;
(e) failure to obtain an order approving the Disclosure
Statement on or before Feb. 28, 2020;
(f) failure to obtain an order approving the Plan on or before
April 20, 2020; and
(g) the Plan will not have become effective on or before May
4, 2020.
About White Star Petroleum Holdings
White Star Petroleum Holdings, LLC and its subsidiaries --
http://www.wstr.com/-- are engaged in the acquisition,
development, exploration and production of oil, natural gas and
natural gas liquids located in the Mid-Continent region in the
United States. The Debtors are headquartered in Oklahoma City and
employ 169 people. As of December 2018, the Debtors owned 315,000
net leasehold acres, primarily in Creek, Dewey, Garfield, Lincoln,
Logan, Noble, and Payne counties of Oklahoma.
White Star Petroleum Holdings, LLC, and its subsidiaries sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 19-11179) on May 28, 2019. The cases were
transferred to the U.S. Bankruptcy Court for the Western District
of Oklahoma on June 21, 2019. White Star Petroleum Holdings' case
was assigned a new case number (Case No. 19-12521).
At the time of the filing, the Debtors were estimated to have
assets of between $500 million and $1 billion and liabilities of
between $100 million and $500 million.
Judge Janice D. Loyd oversees the cases.
The Debtors tapped Sullivan & Cromwell LLP as bankruptcy counsel;
Morris, Nichols, Arsht & Tunnell LLP as Sullivan's co-counsel;
Guggenheim Securities, LLC, as investment banker; Alvarez & Marsal
North America, LLC as restructuring advisor; and Kurtzman Carson
Consultants LLC as claims and noticing agent.
WINNEBAGO INDUSTRIES: S&P Lowers ICR to 'B+' on COVID-19 Impact
---------------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on Winnebago
Industries Inc. to 'B+' from 'BB-'. In addition, S&P lowered the
issue-level rating on the secured term loan to 'BB' from 'BB+'.
"The downgrade to 'B+' reflects our updated assumption that
leverage could increase to about 4x in fiscal 2020 (ending August)
due to production suspensions at Winnebago leading into the busy
spring selling season. The rating reflects our revised assumption
that Winnebago's revenue and cash flow may decline significantly at
least during the spring selling season because of a production
suspension. In addition, there is a high level of uncertainty in
retail demand over the next several months as the U.S. grapples
with the containment of COVID-19, and the impact of an anticipated
recession. Winnebago announced its decision to suspend production
at most of its facilities through April 12, after which the company
is likely to reassess the decision. Our current assumption is for
virus containment to occur by late-second quarter of calendar 2020
at the earliest; the impact on Winnebago's revenue and cash flow
could be severe until restrictions are lifted. In addition, our
economists anticipate a recession to cause a severe GDP and
consumer spending decline in the second quarter. We believe there
could be a prolonged impact from a recession on big-ticket
discretionary purchases such as RVs," S&P said.
The negative outlook reflects significant anticipated stress on
revenue and cash flow over at least the next several weeks, and
possibly months, which could use liquidity, materially reduce
EBITDA this year even in a recovery scenario, and result in a spike
in leverage. The negative outlook also reflects the possibility
that S&P could lower the ratings over the next few months, or
sooner, if it no longer believed COVID-19 containment could occur
by about the end of the second quarter in 2020 so that consumer
activity could begin to recover.
"We could lower the issuer credit rating if we believed Winnebago
would sustain adjusted debt to EBITDA above 5x, which could occur
if COVID-19 is not contained by the end of the second quarter, or
if Winnebago's liquidity significantly deteriorates," S&P said.
"We could revise the outlook to stable once we gain confidence that
leverage would remain below 5x, probably through a combination of
an anticipated economic recovery in 2021, debt repayment, and
EBITDA growth. Such an improvement in credit measures would likely
reflect business stabilization after containment of COVID-19 and an
improvement in economic growth in the U.S.," the rating agency
said.
WOODCREST ACE: Gets Approval to Use Cash Collateral
---------------------------------------------------
Judge Mark Houle authorized Woodcrest Ace Hardware, Inc., and
debtor affiliates – 9 Fingers, Inc., Riverside Ace Hardware,
Inc., and Wildomar Ace Hardware, Inc. - to use cash collateral
through March 31, 2020 to pay their business expenses, pursuant to
the respective budgets.
The budget of Woodcrest Ace provided for $314,355 in total
expenses, including $193,536 in cost of goods sold, $68,690 in
payroll and $13,298 in advertising for the month of March 2020.
Judge Houle also authorized the Debtors to use cash collateral to
pay National Cooperative Bank monthly adequate protection payments
in the total aggregate amount of $5,748.02 and pay all quarterly
fees due to the Office of the United States Trustee.
The Court ruled that NCB, Zions Bancorporation, N.A., dba
California Bank & Trust, and all other parties asserting a lien
against the cash collateral used by the Debtors are granted a
replacement lien, to the same extent, validity, and priority
existing on the date of the Debtors' bankruptcy petition date,
against all of the Debtors' post-petition property to the extent of
diminution in the value of said parties' lien as of the Petition
Date resulting from the Debtors' use of the cash collateral.
Hearing on the motion is continued to March 31, 2020 at 2 p.m.
About Woodcrest Ace Hardware
Based in Riverside, California, Woodcrest Ace Hardware Inc. filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
C.D. Cal. Case No. 19-13127) on April 12, 2019. In the petition
signed by Paul Douglas Shanabarger, president, the Debtor was
estimated to have $1 million in both assets and liabilities.
Rosenstein & Associates, led by Robert B. Rosenstein, is the
Debtor's counsel.
YORKER NY REALTY: Hires J. Iandolo Law as Special Counsel
---------------------------------------------------------
Yorker NY Realty LLC seeks authority from the US Bankruptcy Court
for the Eastern District of New York to employ J. Iandolo Law P.C.
as its special counsel.
Prior to the filing date, the Debtor commenced litigation in the
Supreme Court of the State of New York, County of Richmond against
Mohammed Sulieman, Sylvester Sichenze, Craig A. Fine, and Bently
Abstract for breach of contract, conversion, fraud, and other
causes of action arising from the mortgage on the property owned by
the Debtor on Maine Avenue in Staten Island.
J. Iandolo Law will represent the Debtor in the Richmond County
Action.
The firm will charge $375 per hour for its services.
Jeremy M. Iandolo, Esq. of J. Iandolo Law assures the court that
the firm is a disinterested person as such term is defined in Sec.
101(14) of the Bankruptcy Code.
The firm can be reached through:
Jeremy M. Iandolo, Esq.
J. Iandolo Law P.C.
7621 13th Avenue
Brooklyn, NY 11228
Phone: 347-850-6022
Fax: 718-395-1732
About Yorker NY Realty LLC
Yorker NY Realty LLC filed a voluntary Chapter 11 petition (Bankr.
E.D.N.Y. Case No. 19-46941) on December 30, 2019, and is
represented by Bruce Weiner, Esq., at Rosenberg, Musso & Weiner.
The Debtor reported under $1 million in both assets and
liabilities.
YUM! BRAND: S&P Assigns 'B+' Rating to New Senior Unsecured Notes
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '6'
recovery rating to Louisville, Ky.-based Yum! Brand Inc.'s proposed
senior unsecured notes due 2025. S&P expects the company to use the
net proceeds from these notes for general corporate purposes, which
may include partially repaying the outstanding borrowings under its
revolving credit facility. Yum had approximately $10.7 billion of
debt outstanding as of Dec. 31, 2019. Subsequently, the company
drew $950 million on its $1 billion revolving credit facility as of
March 24, 2020.
"Our 'BB' issuer credit rating on Yum reflects its strong
competitive position as the world's largest restaurant company by
units and its highly franchised, asset-light business model that
generated over $52 billion in system sales as of fiscal year 2019.
It also reflects the company's solid, consistent free cash flow
generation. These factors are partially offset by Yum's aggressive
financial policy, although we note that management recently
suspended its share repurchases due to the growing uncertainty
around the ongoing coronavirus pandemic," S&P said.
"We believe Yum's system sales volume and royalty fees will be
negatively affected by the spread of the coronavirus over the near
term because it will reduce customer traffic to its restaurants.
However, we believe the company is better positioned than most
restaurant companies to weather the disruption given its
quick-service restaurant (QSR) format, high proportion of
drive-thru transactions, delivery partnership with Grubhub, and the
highly franchised nature of its business. Furthermore, the QSR
segment has historically performed well during economic downturns
when consumers increasingly look for value. We have lowered our
forecast for the company based on our updated performance
expectations for the current fiscal year. However, we believe Yum
maintains strong liquidity and has some cushion in its adjusted
credit metrics to ensure they remain appropriate for the current
rating. We view the company's proposed issuance as a prudent step
to strengthen its liquidity and financial flexibility during a time
of heightened uncertainty," S&P said.
ZDN INC: Gets Authorization to Use Cash Collateral
--------------------------------------------------
Judge Elizabeth E. Brown of the U.S. Bankruptcy Court for the
District of Colorado authorized ZDN Inc. d/b/a Blackjack Pizza to
use cash collateral pursuant to the Budget attached to the Motion.
To the extent that any party possesses a properly perfected
security interest in the cash collateral, as adequate protection
for the Debtor's use of cash collateral:
(a) The Debtor will provide such party with a replacement lien
on all postpetition accounts receivable to the extent that the use
of cash collateral results in a decrease in the value of such
party's interest in the cash collateral;
(b) The Debtor will maintain adequate insurance coverage on
all personal property assets and adequately insure against any
potential loss;
(c) The Debtor will provide to such secured party all periodic
reports and information filed with the Bankruptcy Court, including
debtor-in-possession reports;
(d) The Debtor will only expend cash collateral pursuant to
the Budget subject to reasonable fluctuation by no more than 15%
for each expense line item per month, plus any fees owed to the
U.S. Trustee;
(e) The Debtor will pay all post-petition taxes; and
(f) The Debtor will retain in good repair all collateral in
which such party has an interest.
About ZDN Inc.
ZDN Inc., which conducts business under the name BlackJack Pizza,
owns and operates a pizza store in Firestone, Colo. ZDN filed a
Chapter 11 petition (Bankr. D. Col. Case No. 20-10887) on Feb. 10,
2020. At the time of the filing, the Debtor disclosed assets of
between $100,001 and $500,000and liabilities of the same range.
Judge Elizabeth E. Brown oversees the case. Holland Law Office
P.C. is the Debtor's legal counsel.
No official committee of unsecured creditors has been appointed in
the Debtor's case.
ZPOWER TEXAS: Seeks to Hire Lain Faulkner as Financial Advisor
--------------------------------------------------------------
ZPower Texas, LLC and ZPower, LLC, seek authority from the US
Bankruptcy Court for the Northern District of Texas to hire Lain,
Faulkner & Co., P.C. as its financial advisor.
The Debtors require Lain Faulkner to:
a. assist in the preparation of the Debtor's Statement of
Financial Affairs and Schedule of Assets/Liabilities;
b. assist in the preparation of the Debtor's Monthly Operating
Reports;
c. account for all receipts and disbursements from the estate
and the preparation of all necessary reports;
d. assist in the Debtor's negotiations with his creditors and
other parties in interest;
e. assist and/or prepare a 13-week cash flow budget and
variance reports;
f. analyse financial data necessary to obtain confirmation of
a plan of reorganization/liquidation or consummation of a
settlement; and
g. provide other financial and accounting services as
identified by the Debtor.
Lain Faulkner's current hourly rates are:
Directors $375 to $485
Accounting Professionals $185 to $275
IT Professionals $275
Staff Accountants $150 to $250
Clerical time $80 to $125
Dennis Faulkner $485
Kelly McCullough $425
In a court filing, Dennis Faulkner, a shareholder, disclosed that
the firm is a "disinterested person" as defined in section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Dennis Faulkner
Lain, Faulkner & Co., P.C.
400 N. St. Paul, Suite 600
Dallas, TX 75201
Tel: (214) 720-1929
Fax: (214) 720-1450
About ZPower LLC
ZPower -- https://www.zpowerbattery.com -- is a manufacturer of
silver-zinc rechargeable microbatteries. The Company serves the
consumer electronics, medical, and military and defense
industries.
ZPower sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Tex. Case No. 20-41158) on March 17, 2020. At the time
of the filing, the Debtor estimated assets of between $10 million
to $50 million and liabilities of between $10 million to $50
million. The petitions were signed by Glynne Townsend, chief
restructuring officer. The case is presided by Hon. Mark X.
Mullin. Davor Rukavina, Esq. of Munsch Hardt Kopf & Harr, P.C is
the Debtors' counsel.
[*] S&P Takes Negative Rating Actions on U.S. Dental Manufacturers
------------------------------------------------------------------
Dental manufacturers are facing an unprecedented level of
disruption from the COVID-19 pandemic. Following the American
Dental Association's recommendation that all dental providers delay
elective procedures, S&P Global Ratings expects a reduction in
non-essential dental procedures over the coming weeks, and a
corresponding decrease in demand for dental consumables and
equipment. Although difficult to quantify, S&P expects the COVID-19
pandemic to materially reduce revenues for all four dental
manufacturers it rates: DENTSPLY SIRONA Inc.,Carestream Dental
Parent Ltd.,Zest Acquisition Corp., and YI Group Holdings LLC.
S&P's current base-case expectation is that the epidemic peaks in
the June-August timeframe, suggesting a sustained period of severe
revenue contraction for dental manufacturers.
S&P believes dental consumables products are meaningfully exposed
to the volume of elective procedures and the companies' revenues
from consumables will fall in the second quarter of 2020, and
potentially beyond, as procedure volume declines. It also expects
dental practices to cut their spending on equipment to preserve
cash when the volumes of the procedures are soft. S&P forecasts the
companies will try to reduce costs over the period of demand
softness, focusing on variable costs such as materials, travel, and
advertising. At the same time, S&P expects they will preserve the
capacity to restart operations quickly when it becomes possible.
Meaningful fixed charges (including rent, interest, some portions
of manufacturing and corporate costs, and maintenance capital
expenditure) may create a substantial pressure on some companies'
margins and liquidity.
Ratings on CreditWatch reflect significant anticipated stress on
revenue and cash flow over the next several months, or possibly
longer, that could cause S&P to lower ratings over a short
timeframe, even in instances where companies currently have a
reasonable liquidity cushion. Ratings on negative outlook reflect a
somewhat lesser degree of stress, but still incorporate S&P's
expectation of a one in three probability that it could lower the
ratings within the next year (for speculative grade issuers) or
within the next two years (for investment grade rated issuers).
Ratings List
To From
Downgraded; CreditWatch Action
YI Group Holdings, LLC
Issuer Credit Rating CCC+/Watch Neg /-- B-/Stable /--
Ratings Affirmed; CreditWatch Action
Zest Acquisition Corp
Issuer Credit Rating B/Watch Neg/-- B/Stable/--
Ratings Affirmed; Outlook Action
To From
Carestream Dental Parent Limited
Issuer Credit Rating B/Negative/-- B/Stable/--
DENTSPLY SIRONA Inc.
Issuer Credit Rating BBB/Negative/-- BBB/Stable/--
[*] S&P Takes Rating Actions on Dental Support Organizations
------------------------------------------------------------
S&P Global Ratings said that dental support organizations (DSOs)
are facing an unprecedented level of disruption from the COVID-19
pandemic, which it expects to cause severe declines in patient
volumes. S&P's current base-case expectation is that the epidemic
peaks in the June to August timeframe, suggesting a sustained
period of severe revenue contraction for dental service providers.
DSOs rely on volume to take advantage of economies of scale. Given
the American Dental Association's (ADA's) recent recommendation
that dentists postpone elective procedures, coupled with government
measures that aim to restrict mobility to slow virus spread, S&P
expects patient visits will decline dramatically, as most rated
DSOs offer general dentistry services that can often be safely
postponed. Therefore, the ability to manage costs and maintain
sufficient liquidity becomes very important. For most DSOs, major
costs include dentist compensation, consumables, and marketing, all
of which are variable and can scale down with volume decline, along
with rent, which is a significant fixed cost for most providers. At
the same time, growth initiatives have come to a halt in order to
preserve cash.
"The ratings we are placing on CreditWatch reflect significant
anticipated stress on revenue and cash flow over the next several
months, or possibly longer, that could cause us to lower ratings
over a short timeframe, even in instances where companies currently
have a reasonable liquidity cushion. The ratings we are lowering to
the 'CCC' category reflect the likelihood of significant liquidity
pressures over the intermediate term, and the probability of a
liquidity crisis if patient volumes do not recover by the fourth
quarter of 2020, consistent with our current base case," S&P said.
S&P acknowledges a high degree of uncertainty about the rate of
spread and peak of the coronavirus outbreak.
"Some government authorities estimate the pandemic will peak
between June and August, and we are using this assumption in
assessing the economic and credit implications. We believe measures
to contain COVID-19 have pushed the global economy into recession
and could cause a surge of defaults among nonfinancial corporate
borrowers. As the situation evolves, we will update our assumptions
and estimates accordingly," the rating agency said.
Ratings List
Rating Actions
To From
ADMI Corp. B/Watch Neg.-- B/Stable/--
Affordable Care Holding Corp. CCC+/Watch Neg/-- B-/Stable/--
American Dental Partners Inc. B-/Watch Neg/-- B-/Stable/--
Dentalcorp Health Services ULC B-/Watch Neg/-- B-/Stable/--
Heartland Dental LLC CCC+/Negative/-- B-/Negative/--
Premier Dental Services Inc. CCC+/Watch Neg/-- B-/Stable/--
[^] BOND PRICING: For the Week from March 30 to April 3, 2020
-------------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
24 Hour Fitness
Worldwide Inc HRFITW 8.000 10.134 6/1/2022
24 Hour Fitness
Worldwide Inc HRFITW 8.000 9.317 6/1/2022
APL Ltd NOLSP 8.000 39.605 1/15/2024
Alta Mesa Holdings LP /
Alta Mesa Finance
Services Corp ALTMES 7.875 0.510 12/15/2024
Antero Resources Corp AR 5.625 41.372 6/1/2023
Arbor Realty Trust Inc ABR 5.375 61.248 11/15/2020
Ascent Resources Utica
Holdings LLC /
ARU Finance Corp ASCRES 10.000 53.852 4/1/2022
Ascent Resources Utica
Holdings LLC /
ARU Finance Corp ASCRES 10.000 53.692 4/1/2022
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bank of New York Mellon BK 4.950 85.001 N/A
Beverages & More Inc BEVMO 11.500 51.080 6/15/2022
Beverages & More Inc BEVMO 11.500 51.335 6/15/2022
Bon-Ton Department Stores BONT 8.000 10.000 6/15/2021
Briggs & Stratton Corp BGG 6.875 73.374 12/15/2020
Bristow Group Inc BRS 6.250 5.792 10/15/2022
Bristow Group Inc BRS 4.500 12.509 6/1/2023
Bruin E&P Partners LLC BRUINE 8.875 2.263 8/1/2023
Bruin E&P Partners LLC BRUINE 8.875 3.002 8/1/2023
Buckeye Partners LP BPL 6.375 39.110 1/22/2078
Buffalo Thunder Development BUFLO 11.000 50.125 12/9/2022
CBL & Associates LP CBL 5.950 19.167 12/15/2026
CBL & Associates LP CBL 5.250 20.759 12/1/2023
CBL & Associates LP CBL 4.600 18.937 10/15/2024
CEC Entertainment Inc CEC 8.000 45.918 2/15/2022
CONSOL Energy Inc CEIX 11.000 35.601 11/15/2025
CONSOL Energy Inc CEIX 11.000 37.304 11/15/2025
CSI Compressco LP / CSI
Compressco Finance Inc CCLP 7.250 89.000 8/15/2022
Calfrac Holdings LP CFWCN 8.500 7.361 6/15/2026
Calfrac Holdings LP CFWCN 8.500 8.349 6/15/2026
California Resources Corp CRC 8.000 2.916 12/15/2022
California Resources Corp CRC 5.500 3.752 9/15/2021
California Resources Corp CRC 6.000 2.844 11/15/2024
California Resources Corp CRC 8.000 1.805 12/15/2022
California Resources Corp CRC 6.000 3.193 11/15/2024
Callon Petroleum Co CPE 6.250 10.371 4/15/2023
Callon Petroleum Co CPE 6.125 9.567 10/1/2024
Callon Petroleum Co CPE 6.375 4.866 7/1/2026
Callon Petroleum Co CPE 8.250 10.119 7/15/2025
Callon Petroleum Co CPE 6.125 8.784 10/1/2024
Callon Petroleum Co CPE 6.125 8.784 10/1/2024
Capital One Financial Corp COF 5.550 77.500 N/A
Centennial Resource
Production LLC CENREP 6.875 24.601 4/1/2027
Centennial Resource
Production LLC CENREP 5.375 24.868 1/15/2026
Centennial Resource
Production LLC CENREP 6.875 24.352 4/1/2027
Centennial Resource
Production LLC CENREP 5.375 24.819 1/15/2026
Chaparral Energy Inc CHAP 8.750 3.726 7/15/2023
Chaparral Energy Inc CHAP 8.750 3.951 7/15/2023
Chesapeake Energy Corp CHK 11.500 16.463 1/1/2025
Chesapeake Energy Corp CHK 6.625 28.716 8/15/2020
Chesapeake Energy Corp CHK 5.500 1.000 9/15/2026
Chesapeake Energy Corp CHK 8.000 7.712 6/15/2027
Chesapeake Energy Corp CHK 5.750 11.838 3/15/2023
Chesapeake Energy Corp CHK 6.125 21.267 2/15/2021
Chesapeake Energy Corp CHK 7.000 8.809 10/1/2024
Chesapeake Energy Corp CHK 6.875 21.330 11/15/2020
Chesapeake Energy Corp CHK 4.875 12.685 4/15/2022
Chesapeake Energy Corp CHK 11.500 17.350 1/1/2025
Chesapeake Energy Corp CHK 8.000 7.837 1/15/2025
Chesapeake Energy Corp CHK 5.375 15.763 6/15/2021
Chesapeake Energy Corp CHK 7.500 8.875 10/1/2026
Chesapeake Energy Corp CHK 8.000 6.219 3/15/2026
Chesapeake Energy Corp CHK 8.000 6.219 3/15/2026
Chesapeake Energy Corp CHK 8.000 7.434 6/15/2027
Chesapeake Energy Corp CHK 6.875 20.612 11/15/2020
Chesapeake Energy Corp CHK 8.000 6.487 1/15/2025
Chesapeake Energy Corp CHK 8.000 6.219 3/15/2026
Chesapeake Energy Corp CHK 8.000 6.487 1/15/2025
Chesapeake Energy Corp CHK 8.000 7.434 6/15/2027
Chukchansi Economic
Development Authority CHUKCH 9.750 49.469 5/30/2020
Chukchansi Economic
Development Authority CHUKCH 10.250 49.500 5/30/2020
Citigroup Inc C 5.950 88.000 N/A
Citizens Financial
Group Inc CFG 5.500 79.500 N/A
Continental Airlines
2012-1 Class B Pass
Through Trust UAL 6.250 99.623 4/11/2020
CorEnergy Infrastructure
Trust Inc CORR 7.000 71.398 6/15/2020
DCP Midstream LP DCP 7.375 20.000 N/A
DFC Finance Corp DLLR 10.500 67.125 6/15/2020
DFC Finance Corp DLLR 10.500 67.125 6/15/2020
Dean Foods Co DF 6.500 8.375 3/15/2023
Dean Foods Co DF 6.500 17.750 3/15/2023
Denbury Resources Inc DNR 9.000 19.804 5/15/2021
Denbury Resources Inc DNR 7.750 15.614 2/15/2024
Denbury Resources Inc DNR 9.250 19.177 3/31/2022
Denbury Resources Inc DNR 5.500 4.467 5/1/2022
Denbury Resources Inc DNR 6.375 16.980 8/15/2021
Denbury Resources Inc DNR 4.625 6.853 7/15/2023
Denbury Resources Inc DNR 9.000 28.900 5/15/2021
Denbury Resources Inc DNR 9.250 20.188 3/31/2022
Denbury Resources Inc DNR 7.500 11.716 2/15/2024
Denbury Resources Inc DNR 7.750 15.505 2/15/2024
Denbury Resources Inc DNR 7.500 11.716 2/15/2024
Diamond Offshore
Drilling Inc DO 7.875 26.660 8/15/2025
Diamond Offshore
Drilling Inc DO 3.450 29.843 11/1/2023
ENSCO International Inc VAL 7.200 15.020 11/15/2027
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 7.750 11.000 5/15/2026
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 8.000 47.000 11/29/2024
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 9.375 2.750 5/1/2024
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 8.000 2.000 2/15/2025
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 8.000 1.303 11/29/2024
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 9.375 1.405 5/1/2024
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 7.750 10.529 5/15/2026
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 8.000 1.531 2/15/2025
EnLink Midstream
Partners LP ENLK 6.000 25.000 N/A
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Envision Healthcare Corp EVHC 8.750 19.111 10/15/2026
Envision Healthcare Corp EVHC 8.750 22.222 10/15/2026
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 26.389 7/15/2023
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 25.903 7/15/2023
Express Scripts Holding Co CI 4.750 99.716 11/15/2021
Extraction Oil & Gas Inc XOG 5.625 16.156 2/1/2026
Extraction Oil & Gas Inc XOG 7.375 15.737 5/15/2024
Extraction Oil & Gas Inc XOG 7.375 17.147 5/15/2024
Extraction Oil & Gas Inc XOG 5.625 16.915 2/1/2026
FTS International Inc FTSINT 6.250 30.458 5/1/2022
Federal National Mortgage FNMA 1.540 99.582 7/6/2021
Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011
Foresight Energy LLC FELP 11.500 2.951 4/1/2023
Foresight Energy LLC FELP 11.500 2.951 4/1/2023
Forum Energy Technologies FET 6.250 30.477 10/1/2021
Fresh Market Inc/The TFM 9.750 44.171 5/1/2023
Fresh Market Inc/The TFM 9.750 46.135 5/1/2023
Frontier Communications FTR 10.500 24.167 9/15/2022
Frontier Communications FTR 11.000 24.341 9/15/2025
Frontier Communications FTR 9.000 23.094 8/15/2031
Frontier Communications FTR 7.125 23.394 1/15/2023
Frontier Communications FTR 6.875 23.196 1/15/2025
Frontier Communications FTR 7.625 22.220 4/15/2024
Frontier Communications FTR 6.250 22.501 9/15/2021
Frontier Communications FTR 8.750 23.054 4/15/2022
Frontier Communications FTR 7.875 22.584 1/15/2027
Frontier Communications FTR 9.250 22.177 7/1/2021
Frontier Communications FTR 8.875 21.831 9/15/2020
Frontier Communications FTR 7.000 22.947 11/1/2025
Frontier Communications FTR 11.000 24.470 9/15/2025
Frontier Communications FTR 10.500 24.322 9/15/2022
Frontier Communications FTR 10.500 24.322 9/15/2022
Frontier Communications FTR 6.800 24.121 8/15/2026
Frontier Communications FTR 11.000 24.470 9/15/2025
GNC Holdings Inc GNC 1.500 85.109 8/15/2020
GameStop Corp GME 6.750 75.053 3/15/2021
GameStop Corp GME 6.750 73.704 3/15/2021
General Electric Co GE 5.000 75.055 N/A
Global Eagle Entertainment ENT 2.750 7.625 2/15/2035
Goldman Sachs Group Inc/The GS 5.375 84.000 N/A
Goodman Networks Inc GOODNT 8.000 48.500 5/11/2022
Granite Point
Mortgage Trust GPMT 5.625 99.645 12/1/2022
Great Western Petroleum
LLC / Great Western
Finance Corp GRTWST 9.000 69.228 9/30/2021
Grizzly Energy LLC VNR 9.000 6.000 2/15/2024
Grizzly Energy LLC VNR 9.000 6.000 2/15/2024
Guitar Center Inc GTRC 9.625 99.174 4/15/2020
Guitar Center Inc GTRC 9.625 99.174 4/15/2020
Gulf Power Co NEE 4.750 99.532 4/15/2020
Gulfport Energy Corp GPOR 6.625 29.182 5/1/2023
Gulfport Energy Corp GPOR 6.000 24.948 10/15/2024
Gulfport Energy Corp GPOR 6.375 25.275 1/15/2026
Gulfport Energy Corp GPOR 6.375 25.138 5/15/2025
Gulfport Energy Corp GPOR 6.375 25.390 1/15/2026
Gulfport Energy Corp GPOR 6.375 25.329 5/15/2025
Gulfport Energy Corp GPOR 6.375 25.390 1/15/2026
Gulfport Energy Corp GPOR 6.375 25.329 5/15/2025
HC2 Holdings Inc HCHC 7.500 55.250 6/1/2022
Hi-Crush Inc HCR 9.500 15.090 8/1/2026
Hi-Crush Inc HCR 9.500 18.814 8/1/2026
High Ridge Brands Co HIRIDG 8.875 2.250 3/15/2025
High Ridge Brands Co HIRIDG 8.875 1.750 3/15/2025
HighPoint Operating Corp HPR 7.000 45.412 10/15/2022
Howmet Aerospace Inc HWM 6.150 100.764 8/15/2020
International Wire Group ITWG 10.750 84.000 8/1/2021
International Wire Group ITWG 10.750 82.672 8/1/2021
JC Penney Corp Inc JCP 5.650 54.650 6/1/2020
JC Penney Corp Inc JCP 5.875 35.521 7/1/2023
JC Penney Corp Inc JCP 8.625 15.284 3/15/2025
JC Penney Corp Inc JCP 7.400 11.408 4/1/2037
JC Penney Corp Inc JCP 6.375 8.031 10/15/2036
JC Penney Corp Inc JCP 7.625 9.351 3/1/2097
JC Penney Corp Inc JCP 5.875 35.150 7/1/2023
JC Penney Corp Inc JCP 8.625 15.296 3/15/2025
JC Penney Corp Inc JCP 7.125 2.871 11/15/2023
JC Penney Corp Inc JCP 6.900 2.871 8/15/2026
JPMorgan Chase & Co JPM 5.300 88.261 N/A
Jonah Energy LLC / Jonah
Energy Finance Corp JONAHE 7.250 4.605 10/15/2025
Jonah Energy LLC / Jonah
Energy Finance Corp JONAHE 7.250 4.692 10/15/2025
LSC Communications Inc LKSD 8.750 17.524 10/15/2023
LSC Communications Inc LKSD 8.750 19.372 10/15/2023
Liberty Media Corp LMCA 2.250 45.644 9/30/2046
LoanCore Capital Markets
LLC / JLC Finance Corp JEFLCR 6.875 89.500 6/1/2020
Lonestar Resources America LONE 11.250 18.000 1/1/2023
Lonestar Resources America LONE 11.250 17.418 1/1/2023
MAI Holdings Inc MAIHLD 9.500 20.000 6/1/2023
MAI Holdings Inc MAIHLD 9.500 20.000 6/1/2023
MAI Holdings Inc MAIHLD 9.500 20.000 6/1/2023
MF Global Holdings Ltd MF 9.000 15.641 6/20/2038
MF Global Holdings Ltd MF 6.750 15.625 8/8/2016
Martin Midstream Partners
LP / Martin Midstream
Finance Corp MMLP 7.250 46.315 2/15/2021
Martin Midstream Partners
LP / Martin Midstream
Finance Corp MMLP 7.250 54.995 2/15/2021
Martin Midstream Partners
LP / Martin Midstream
Finance Corp MMLP 7.250 54.995 2/15/2021
Mashantucket Western
Pequot Tribe MASHTU 7.350 15.392 7/1/2026
McClatchy Co/The MNIQQ 6.875 2.000 3/15/2029
McClatchy Co/The MNIQQ 7.150 2.000 11/1/2027
McDermott Technology
Americas Inc / McDermott
Technology US Inc MDR 10.625 4.250 5/1/2024
McDermott Technology
Americas Inc / McDermott
Technology US Inc MDR 10.625 8.000 5/1/2024
Men's Wearhouse Inc/The TLRD 7.000 26.718 7/1/2022
Men's Wearhouse Inc/The TLRD 7.000 27.983 7/1/2022
MetLife Inc MET 5.250 100.000 N/A
Morgan Stanley MS 5.550 84.000 N/A
Moss Creek Resources
Holdings Inc MSSCRK 10.500 30.849 5/15/2027
Moss Creek Resources
Holdings Inc MSSCRK 7.500 28.377 1/15/2026
Moss Creek Resources
Holdings Inc MSSCRK 10.500 31.278 5/15/2027
Moss Creek Resources
Holdings Inc MSSCRK 7.500 28.386 1/15/2026
NGL Energy Partners LP /
NGL Energy Finance Corp NGL 7.500 35.290 11/1/2023
NWH Escrow Corp HARDWD 7.500 51.125 8/1/2021
NWH Escrow Corp HARDWD 7.500 51.125 8/1/2021
Nabors Industries Inc NBR 5.750 23.951 2/1/2025
Nabors Industries Inc NBR 5.100 21.051 9/15/2023
Nabors Industries Inc NBR 4.625 64.438 9/15/2021
Nabors Industries Inc NBR 5.500 41.786 1/15/2023
Nabors Industries Inc NBR 0.750 16.000 1/15/2024
Nabors Industries Inc NBR 5.750 22.459 2/1/2025
Nabors Industries Inc NBR 5.750 22.249 2/1/2025
Neiman Marcus Group LTD LLC NMG 8.000 9.818 10/25/2024
Neiman Marcus Group LTD LLC NMG 8.750 10.419 10/25/2024
Neiman Marcus Group LTD LLC NMG 8.000 11.319 10/25/2024
Neiman Marcus Group LTD LLC NMG 8.750 13.866 10/25/2024
New Gulf Resources LLC/
NGR Finance Corp NGREFN 12.250 3.716 5/15/2019
New York Mortgage Trust Inc NYMT 6.250 45.000 1/15/2022
Nine Energy Service Inc NINE 8.750 24.430 11/1/2023
Nine Energy Service Inc NINE 8.750 24.893 11/1/2023
Nine Energy Service Inc NINE 8.750 25.263 11/1/2023
Northwest Hardwoods Inc HARDWD 7.500 41.875 8/1/2021
Northwest Hardwoods Inc HARDWD 7.500 41.875 8/1/2021
OMX Timber Finance
Investments II LLC OMX 5.540 0.573 1/29/2020
Oasis Petroleum Inc OAS 6.875 14.443 3/15/2022
Oasis Petroleum Inc OAS 6.875 13.381 1/15/2023
Oasis Petroleum Inc OAS 6.250 12.142 5/1/2026
Oasis Petroleum Inc OAS 2.625 11.500 9/15/2023
Oasis Petroleum Inc OAS 6.500 32.791 11/1/2021
Oasis Petroleum Inc OAS 6.250 13.684 5/1/2026
Omnimax International Inc EURAMX 12.000 70.500 8/15/2020
Omnimax International Inc EURAMX 12.000 69.808 8/15/2020
Optimas OE Solutions
Holding LLC / Optimas OE
Solutions Inc OPTOES 8.625 57.966 6/1/2021
Optimas OE Solutions
Holding LLC / Optimas OE
Solutions Inc OPTOES 8.625 57.966 6/1/2021
Party City Holdings Inc PRTY 6.625 9.546 8/1/2026
Party City Holdings Inc PRTY 6.125 23.639 8/15/2023
Party City Holdings Inc PRTY 6.625 10.259 8/1/2026
Party City Holdings Inc PRTY 6.125 22.741 8/15/2023
Pioneer Energy
Services Corp PESX 6.125 1.000 3/15/2022
Plains All American
Pipeline LP PAA 6.125 47.000 N/A
Powerwave Technologies Inc PWAV 1.875 0.019 11/15/2024
Pride International LLC VAL 6.875 22.983 8/15/2020
Pride International LLC VAL 7.875 13.642 8/15/2040
Principal Financial
Group Inc PFG 4.700 86.078 5/15/2055
Principal Life Global
Funding II PFG 2.200 99.799 4/8/2020
Principal Life Global
Funding II PFG 2.200 99.965 4/8/2020
Protective Life Global
Funding PL 2.262 99.806 4/8/2020
Protective Life Global
Funding PL 2.262 99.819 4/8/2020
Pyxus International Inc PYX 9.875 17.035 7/15/2021
Pyxus International Inc PYX 9.875 54.000 7/15/2021
Pyxus International Inc PYX 9.875 17.745 7/15/2021
QEP Resources Inc QEP 5.250 34.820 5/1/2023
QEP Resources Inc QEP 6.875 49.372 3/1/2021
QEP Resources Inc QEP 5.375 40.809 10/1/2022
Range Resources Corp RRC 5.000 45.397 8/15/2022
Range Resources Corp RRC 5.000 43.710 3/15/2023
Range Resources Corp RRC 5.000 43.710 3/15/2023
Range Resources Corp RRC 5.000 43.710 3/15/2023
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Revlon Consumer
Products Corp REV 5.750 75.005 2/15/2021
Revlon Consumer
Products Corp REV 6.250 23.365 8/1/2024
Rolta LLC RLTAIN 10.750 9.518 5/16/2018
SESI LLC SPN 7.125 29.623 12/15/2021
SESI LLC SPN 7.125 40.255 12/15/2021
SESI LLC SPN 7.750 25.975 9/15/2024
SM Energy Co SM 6.125 38.333 11/15/2022
SM Energy Co SM 5.000 28.628 1/15/2024
SM Energy Co SM 5.625 27.360 6/1/2025
SM Energy Co SM 1.500 40.000 7/1/2021
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 7.375 0.848 11/1/2021
Sable Permian Resources
Land LLC / AEPB
Finance Corp AMEPER 7.375 0.848 11/1/2021
Sanchez Energy Corp SNEC 6.125 1.000 1/15/2023
Sanchez Energy Corp SNEC 7.250 30.000 2/15/2023
Sanchez Energy Corp SNEC 7.250 30.000 2/15/2023
SandRidge Energy Inc SD 7.500 0.500 2/15/2023
Sears Holdings Corp SHLD 8.000 1.063 12/15/2019
Sears Holdings Corp SHLD 6.625 9.875 10/15/2018
Sears Holdings Corp SHLD 6.625 4.236 10/15/2018
Sears Roebuck Acceptance SHLD 7.500 1.111 10/15/2027
Sears Roebuck Acceptance SHLD 6.750 0.608 1/15/2028
Sears Roebuck Acceptance SHLD 7.000 0.744 6/1/2032
Sears Roebuck Acceptance SHLD 6.500 0.696 12/1/2028
Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014
State Street Corp STT 5.250 85.000 N/A
Stearns Holdings LLC STELND 9.375 45.480 8/15/2020
Stearns Holdings LLC STELND 9.375 45.480 8/15/2020
Summit Midstream Holdings
LLC / Summit Midstream
Finance Corp SUMMPL 5.750 12.412 4/15/2025
Summit Midstream Holdings
LLC / Summit Midstream
Finance Corp SUMMPL 5.500 18.729 8/15/2022
Summit Midstream Partners SMLP 9.500 7.000 N/A
Talos Production LLC /
Talos Production Finance TAENLL 11.000 61.500 4/3/2022
Talos Production LLC /
Talos Production Finance TAENLL 11.000 60.525 4/3/2022
Talos Production LLC /
Talos Production Finance TAENLL 11.000 60.525 4/3/2022
Talos Production LLC /
Talos Production Finance TAENLL 11.000 60.525 4/3/2022
Teligent Inc/NJ TLGT 4.750 36.589 5/1/2023
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
TerraVia Holdings Inc TVIA 6.000 4.644 2/1/2018
Tesla Energy Operations TSLAEN 3.600 88.909 5/14/2020
Tesla Energy Operations TSLAEN 3.600 97.495 4/23/2020
Tesla Energy Operations TSLAEN 3.600 88.910 5/21/2020
Tesla Energy Operations TSLAEN 3.600 88.910 6/11/2020
Tilray Inc TLRY 5.000 33.000 10/1/2023
Titan International Inc TWI 6.500 39.898 11/30/2023
Transworld Systems Inc TSIACQ 9.500 24.398 8/15/2021
Transworld Systems Inc TSIACQ 9.500 24.398 8/15/2021
Tupperware Brands Corp TUP 4.750 47.708 6/1/2021
Tupperware Brands Corp TUP 4.750 47.708 6/1/2021
Tupperware Brands Corp TUP 4.750 44.030 6/1/2021
UCI International LLC UCII 8.625 4.780 2/15/2019
Ultra Resources Inc/US UPL 6.875 10.750 4/15/2022
Ultra Resources Inc/US UPL 7.125 5.035 4/15/2025
Ultra Resources Inc/US UPL 6.875 6.374 4/15/2022
Ultra Resources Inc/US UPL 7.125 5.035 4/15/2025
Unit Corp UNTUS 6.625 11.421 5/15/2021
VIVUS Inc VVUS 4.500 95.619 5/1/2020
Vine Oil & Gas LP /
Vine Oil & Gas Finance VRI 9.750 23.497 4/15/2023
Vine Oil & Gas LP /
Vine Oil & Gas Finance VRI 8.750 21.723 4/15/2023
Vine Oil & Gas LP /
Vine Oil & Gas Finance VRI 9.750 22.802 4/15/2023
Vine Oil & Gas LP /
Vine Oil & Gas Finance VRI 8.750 21.617 4/15/2023
W&T Offshore Inc WTI 9.750 22.040 11/1/2023
W&T Offshore Inc WTI 9.750 22.872 11/1/2023
Western Alliance Bank WAL 5.000 91.188 7/15/2025
Western Asset Mortgage
Capital Corp WMC 6.750 34.500 10/1/2022
Whiting Petroleum Corp WLL 5.750 7.343 3/15/2021
Whiting Petroleum Corp WLL 6.625 9.093 1/15/2026
Whiting Petroleum Corp WLL 6.250 7.719 4/1/2023
Whiting Petroleum Corp WLL 6.625 6.260 1/15/2026
Whiting Petroleum Corp WLL 6.625 6.723 1/15/2026
Windstream Services LLC /
Windstream Finance Corp WIN 10.500 3.250 6/30/2024
Windstream Services LLC /
Windstream Finance Corp WIN 9.000 2.000 6/30/2025
Windstream Services LLC /
Windstream Finance Corp WIN 9.000 2.000 6/30/2025
Windstream Services LLC /
Windstream Finance Corp WIN 7.500 26.000 6/1/2022
Windstream Services LLC /
Windstream Finance Corp WIN 6.375 2.500 8/1/2023
Windstream Services LLC /
Windstream Finance Corp WIN 8.750 6.250 12/15/2024
Windstream Services LLC /
Windstream Finance Corp WIN 6.375 2.412 8/1/2023
Windstream Services LLC /
Windstream Finance Corp WIN 10.500 2.672 6/30/2024
Windstream Services LLC /
Windstream Finance Corp WIN 8.750 1.639 12/15/2024
Windstream Services LLC /
Windstream Finance Corp WIN 7.750 1.192 10/1/2021
rue21 inc RUE 9.000 1.305 10/15/2021
*********
Monday's edition of the TCR delivers a list of indicative prices
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