/raid1/www/Hosts/bankrupt/TCR_Public/200529.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, May 29, 2020, Vol. 24, No. 149
Headlines
2178 ATLANTIC: Amended Plan of Reorganization Confirmed by Judge
33 VALLEY: Case Summary & Unsecured Creditor
417 RENTALS: Case Summary & 20 Largest Unsecured Creditors
A&V HOLDINGS: Moody's Alters Outlook on B2 CFR to Negative
AGERA ENERGY: Unsecureds to Recover 1% to 16% in Plan
ALPHA ENTERTAINMENT: Aug. 3 Auction of Substantially All Assets Set
API AMERICAS: Unsec. Creditors to Get 10% to 20% Recovery in Plan
ARADIGM CORP: June 10 Plan Confirmation Hearing Set
ARCHDIOCESE OF NEW ORLEANS: 7-Member Creditors Committee Appointed
ASCENA RETAIL: Provides Additional Business Update on COVID-19
ASG TECHNOLOGIES: S&P Cuts ICR to 'B-' on Weakened Credit Metrics
BARTLETT TRAYNOR: June 23 Hearing on Amended Disclosure Statement
BARTLETT TRAYNOR: Plan Payment Depends Upon Buyer's New Financing
BERRY GLOBAL: S&P Affirms 'BB+ ICR, Alters Outlook to Stable
BOSTON SURFACE: Seeks to Defer Disclosures Hearing by 120 Days
BRIDGE STREET: Next Realty Buying Holyoke Property for $350K
BRIGHTVIEW LANDSCAPES: S&P Affirms 'B+' ICR; Outlook Stable
CALIFORNIA RESOURCES: Board OKs Revised Variable Pay Program
CASA DE LAS INVESTMENTS: Voluntary Chapter 11 Case Summary
CCF HOLDINGS: S&P Downgrades ICR to 'CCC'; Outlook Negative
CEL-SCI CORP: Extends Expiration of Series V Warrants to June 25
CENTRIC BRANDS: U.S. Trustee Appoints Creditors' Committee
CFRA HOLDINGS: U.S. Trustee Appoints Creditors' Committee
CLEAR CHANNEL: Moody's Alters Outlook on B3 CFR to Negative
CONVERGEONE HOLDINGS: Moody's Alters Outlook on B3 CFR to Negative
CREATIVE REALITIES: Board OKs Stock Options for CEO and CFO
DARRELL MILLSAPS: $90K Private Sale of Statesville Property Okayed
DIMORA BRANDS: S&P Alters Outlook to Negative, Affirms 'B' ICR
DOUGLAS DYNAMICS: Moody's Rates New $250MM Sr. Sec. Term Loan 'B2'
EQUINOX HOLDINGS: S&P Raises ICR to 'CCC'; Outlook Negative
EXTRACTION OIL: S&P Withdraws 'D' Issuer Credit Rating
FORESIGHT ENERGY: Residco Objects to Disclosure Statement
FURIE OPERATING: June 11 Plan Confirmation Hearing Set
GOOD NOODLES: Liquidating Plan Confirmed by Judge
GREEN COUNTRY ENERGY: S&P Lowers ICR To 'CCC+', Outlook Negative
HAJ PETROLEUM: Has Until Aug. 25 to File Plan & Disclosure
HENDRICKSON TRUCK: June 23 Plan Confirmation Hearing Set
HERTZ GLOBAL: S&P Downgrades ICR to 'D' on Chapter 11 Filing
HOYA MIDCO: S&P Affirms 'B-' ICR; Ratings Off Watch Negative
INSIGHT TERMINAL: June 2 Hearing on Disclosure Statement
INTELSAT SA: U.S. Trustee Appoints Creditors' Committee
INTERNAP TECHNOLOGY: Joint Prepackaged Plan Confirmed by Judge
INTL FCSTONE: S&P Affirms BB- Issuer Credit Rating; Outlook Stable
JM BROWN: Bankruptcy Administrator Unable to Appoint Committee
JUDSON COLLEGE, AL: S&P Withdraws 'BB' Revenue Bond Rating
K' CAFE CORP: June 16 Plan Confirmation Hearing Set
LA MERCED: Time to Reply to OSP's Mortgage Property Sale Extended
LIBBEY INC: Further Extends $12M Debt Prepayment Deadline to May 17
LIGHT OF LIFE: July 14 Continue Hearing on Plan & Disclosures
MACY'S INC: S&P Lowers Secured Notes Rating to 'BB-' on Upsizing
MODERN VIDEOFILM: Disclosure Hearing Continued to July 15
MOTIF DIAMOND: Unsecured Creditors to Get 15% Dividend in Plan
MURRAY ENERGY: Creditors' Committee Members Disclose Claims
N RCT LLC: Court Approves Disclosure Statement
NICK'S PIZZA: Plan Has 40% to 100% for Unsecureds
NMC HEALTH: Chapter 15 Case Summary
NOODLES GROUP: Court Approves Disclosure Statement
NSHE CA BULLS: Needs to Sell for $13 Million to Pay Claims in Full
O'LOUGHLIN LTD: Court to Approve Disclosure Statement
OCTAVE MUSIC: Moody's Cuts CFR to B3 & Alters Outlook to Negative
OLMA XXI INC: Has Until Nov. 27 to File Plan & Disclosures
PAR PETROLEUM: S&P Rates $100MM Senior Secured Notes 'BB-'
PARTY CITY OF RALEIGH: Case Summary & 20 Top Unsecured Creditors
PAUL LOGSDON: Plan of Reorganization Confirmed by Judge
PLUS THERAPEUTICS: Series S Warrant Delisted from Nasdaq
POP GOURMET: Case Summary & 20 Largest Unsecured Creditors
PRECISION HOTEL: Has Until July 3 to File Plan & Disclosures
REJUVI LABORATORY: Objects to Creditor's Reorganization Plan
REMARK HOLDINGS: Regains Compliance with Nasdaq Listing Rules
SAFETY PRODUCTS: Moody's Cuts CFR to Caa1, Outlook Negative
SEMINOLE HARD ROCK: S&P Lowers ICR to 'B+'; Outlook Negative
SOUTHEASTERN METAL: Court Conditionally Approves Disclosures
SOUTHEASTERN METAL: June 24 Plan Confirmation Hearing Set
STANFORD JONES: June 8 Hearing on Disclosure Statement
STEREOTAXIS INC: Expects to Get $15M From Common Stock Financing
SUPERIOR AIR: John Traub Resigns From Creditors' Committee
TANYA E. TUCKER: $600K Sale of St. Petersburg Property Approved
TATA CHEMICALS: Moody's Alters Outlook on Ba3 CFR to Negative
TELEXFREE LLC: Small Participants to Recover 43% Under Trustee Plan
TENDERLEAF VILLAGE: Plan & Disclosure Hearing Continued to June 17
TIMOTHY A. MORRIS: Private Sale of Benson Property Approved
TMS CONTRACTORS: June 2 Plan Confirmation Hearing Set
TOUCHPOINT GROUP: Raises $133K in Convertible Note Financing
TRAVELEXPERIENCE LLC: June 23 Status Conference Set
TRC FARMS: $176K Sale of Craven County Property to Yarborough OK'd
TUPPERWARE BRANDS: Launches Tender Offer for 2021 Notes
TUPPERWARE BRANDS: S&P Cuts Rating on $600MM Unsecured Notes to 'C'
UNIT CORP: S&P Downgrades ICR to 'D' on Chapter 11 Filing
UNITED AIRLINES: Moody's Withdraws 'Ba1' on $2.25BB Secured Notes
WALTER P SAUER: Court Conditionally Approves Disclosure Statement
WAVE COMPUTING: Seeks Approval to Hire Sidley Austin as Counsel
WAVE COMPUTING: Seeks to Hire SierraConstellation, Appoint CRO
WEEKS HOLDINGS: June 24 Disclosure Statement Hearing Set
WELDED CONSTRUCTION: June 24 Plan Confirmation Hearing Set
WESCO INTERNATIONAL: S&P Downgrades ICR to 'BB-' on Anixter Merger
WINDSTREAM HOLDINGS: Obligor Unsecureds to Get 0.125% in Plan
WITTER HARVESTING: June 23 Plan Confirmation Hearing Set
[] BOOK REVIEW: THE SUCCESSFUL PRACTICE OF LAW
*********
2178 ATLANTIC: Amended Plan of Reorganization Confirmed by Judge
----------------------------------------------------------------
Judge Elizabeth S. Stong has entered findings of fact, conclusions
of law and order confirming the Disclosure Statement and Chapter 11
Plan of Debtor 2178 Atlantic Ave HDFC.
The Plan's classification, indemnification, exculpation, release,
settlement, and injunctive provisions, including, without
limitation, Article VII.B–D of the Plan, have been negotiated in
good faith and at arm's length, consistent with sections 105,
1123(b)(3)(A), 1123(b)(6), 1129, and 1142 of the Bankruptcy Code
and Bankruptcy Rule 9019.
A copy of the order dated May 5, 2020, is available at
https://tinyurl.com/y8o4fmsr from PacerMonitor at no charge.
About 2178 Atlantic Ave HDFC
Based in Brooklyn, New York, 2178 Atlantic Ave HDFC filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
E.D.N.Y. Case No. 19-47287) on Dec. 4, 2019, listing under $1
million in both assets and liabilities. Kramer Levin Naftalis &
Frankel LLP is the Debtor's legal counsel.
33 VALLEY: Case Summary & Unsecured Creditor
--------------------------------------------
Debtor: 33 Valley, LLC
8128 Orion Avenue
Van Nuys, CA 91406
Business Description: 33 Valley, LLC is a privately held company
whose principal assets are located at
14533 Valley Vista Boulevard Sherman Oaks,
CA 91403.
Chapter 11 Petition Date: May 26, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-10969
Judge: Hon. Deborah J. Saltzman
Debtor's Counsel: Raymond H. Aver, Esq.
LAW OFFICES OF RAYMOND H. AVER,
A PROFESSIONAL CORPORATION
10801 National Boulevard, Suite 100
Los Angeles, CA 90064
Tel: (310) 571-3511
E-mail: ray@averlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Tibor Itskovich, manager.
The Debtor listed Tibor Itskovich as its sole unsecured creditor
holding a claim of $350,000.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/ZClVZZ
417 RENTALS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: 417 Rentals, LLC
5849 West US Highway 60
Brookline, Missouri, 65619
Business Description: 417 Rentals is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: May 28, 2020
Court: United States Bankruptcy Court
Western District of Missouri
Case No.: 20-41005
Judge: Hon. Cynthia A. Norton
Debtor's Counsel: Joseph Christopher Greene, Esq.
THE LAW OFFICE OF CHRIS GREENE
3654 East Cherry Street
Springfield, MO 65809
Tel: (417) 869-4150
E-mail: greenejoseph@att.net
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Christopher Eric Gatley, member.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/xceePt
A&V HOLDINGS: Moody's Alters Outlook on B2 CFR to Negative
----------------------------------------------------------
Moody's Investors Service changed A&V Holdings Midco, LLC's outlook
to negative from stable and affirmed its existing ratings,
including its Corporate Family Rating and its Probability of
Default Rating at B2 and B2-PD, respectively, and the company's B2
senior secured first lien credit facility rating.
The change in AVI's outlook to negative is driven by Moody's
revised expectation for the company's future growth prospects and
cash flow generation amidst the coronavirus pandemic. Due to
business challenges presented by COVID-19, with certain audiovisual
and video collaboration projects being delayed or halted for the
foreseeable future, Moody's projects AVI's operating results to
deteriorate meaningfully in the second quarter of 2020, but
gradually recover in the back half of 2020 as states begin to ease
the stay-at-home orders. AVI-SPL's highly-contractual services
business has remained resilient and the company has been asked to
provide incremental services to assist customers deploy broader
work-from-home and related technology solutions. Moody's forecasts
AVI's pro forma revenue and EBITDA to decline in the high single
digit percentages at the end of 2020, on year-over-year basis.
Nevertheless, Moody's believes that AVI has sufficient liquidity to
manage through the challenging operating environment and expects
that credit metrics and liquidity will gradually improve over the
next 12-15 months owing the strong backlog and management's ability
to integrate the acquisition of Whitlock and realize merger
synergies.
Moody's took the following rating actions on A&V Holdings Midco,
LLC:
Corporate Family Rating, affirmed at B2
Probability of Default Rating, affirmed at B2-PD
$379.6 million first lien senior secured term loan B due 2027,
affirmed at B2 (LGD4)
$50 million first lien senior secured revolving credit facility due
2025, affirmed at B2 (LGD4)
Outlook Action:
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. Moody's regards
the coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.
Its action reflects the potential impact on AVI from the breadth
and severity of the shock, including potential work stoppages and
delays, and the broad deterioration in credit quality it has
triggered.
AVI's B2 CFR reflects the company's high pro forma debt-to-EBITDA
leverage, estimated in the mid-4.0x times range (Moody's adjusted
and not incorporating unrealized synergies) as of December 31,
2019, operating headwinds due to the coronavirus pandemic and
integration risk associated with the combination of Whitlock with
AVI's businesses. The rating is also constrained by the company's
concentrated business focus on the fragmented and competitive
global audio visual and video conferencing solutions market, with
revenues that are largely project-based and relationship-dependent,
as well as inherently low profit margins. In addition, the
potential reconfiguration of US office space following the
coronavirus may affect the teleconferencing installation design.
Deleveraging over the next 12-18 months is predicated on
management's ability to successfully integrate both companies and
realize meaningful cost savings and synergies, while also
maintaining stable topline growth. The company is also exposed to
event risks under private equity ownership, including debt-funded
acquisitions and shareholder distributions.
Nonetheless, AVI's rating is supported by the combined company's
leading market position within the AV and VC serving large
diversified group of enterprise customers, SMEs and government and
education agencies. AVI's credit profile also benefits from
historically high customer retention rates, continued favorable
trends in outsourcing digital workplace services and relatively
strong free cash flow generation in relation to funded debt. The
merger creates opportunities for the company to cross-sell services
across AVI's managed services and software platform into Whitlock's
customer base and realize meaningful cost savings through headcount
reductions, facility and IT system consolidation, and unlock more
favorable vendor rebates. Moody's also acknowledges management's
track record of integrating past acquisitions and realizing cost
synergies.
As consequence of the company's access to sensitive client data
used in AVI's client affairs and an expectation for aggressive
financial policies under sponsor ownership, social and governance
risks, respectively, are noteworthy.
The negative outlook reflects the risk that AVI will not be able to
improve earnings and free cash flow sufficient to substantially
deliver its balance sheet over the next 12-18 months. The outlook
also incorporates the uncertainty related to the duration of the
work disruption caused by the coronavirus and AVI's ability to
quickly adjust cost and maintain at least adequate liquidity. The
outlook may be stabilized if the company successfully navigates the
impact on its business from the coronavirus, restores its credit
metrics, and maintains healthy liquidity.
Moody's expects AVI to have good liquidity over the next 12-15
months, but is at risk for deterioration depending on the duration
of the pandemic and the pace of recovery. Sources of liquidity
consist of balance sheet cash of approximately $50 million as of
March 31, 2020, including the company's pro-active draw of $30
million under it $50 million revolving credit facility due 2025. As
of April 30, 2020, the Company repaid $20 million of its revolving
credit facility, leaving a remaining balance of $10 million.
Moody's projects annual free cash flow of approximately $20-25
million (after required annual term loan amortization of $19.2
million, paid quarterly). All outstanding borrowings under the
revolving credit facility are expected to be repaid by the end of
2020. There are no financial maintenance covenants under the term
loan, but the revolving credit facility is subject to a springing
first lien leverage ratio covenant of 5.6x if the amount drawn
exceeds 35% ($17.5 million) of the revolving credit facility.
Moody's expects the company will maintain covenant compliance at
all times.
FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be downgraded if the coronavirus has a material
effect on the company's installations, AVI cannot translate planned
cost savings and synergy benefits into higher EBITDA, revenue or
EBITDA are expected to be materially lower, or if the company fails
to generated meaningful free cash flow. The ratings could also be
downgraded if debt-to-EBTDA (Moody's adjusted) is sustained above
5.0x, on other than temporary basis.
Although not expected in the near term given integration risks and
operating headwinds, Moody's would consider an upgrade if AVI is
able to demonstrate sustained organic growth and meaningful margin
expansion, while maintaining good liquidity with balanced financial
policies. Quantitatively, the ratings could be upgraded if Moody's
believes that the company will maintain debt-to-EBITDA (Moody's
adjusted) below 3.5x and free cash flow to total debt in
double-digit percentages to debt.
AVI-SPL, headquartered in Tampa, FL, is a digital workplace
solutions provider, whose services include design, engineering,
procurement, integration and installation of audiovisual and video
collaboration systems, and managed services for the operation and
maintenance of same, to North American enterprise, public sector
and SMB clients. Moody's projects annual revenue for the combined
company of approximately $1.15 billion in 2020. AVI is majority
owned by Marlin Equity Partners, with remaining shares held by
H.I.G. Capital and management.
AGERA ENERGY: Unsecureds to Recover 1% to 16% in Plan
-----------------------------------------------------
AGERA ENERGY LLC, et al., submitted a First Amended Disclosure
Statement explaining their proposed Chapter 11 Plan.
Objections to confirmation of the Plan must be filed and served by
June 3, 2020 at 4:00 p.m. Ballots must be received by June 3, 2020
at 4:00 p.m. A hearing to consider confirmation of the Plan is
slated for June 8, 2020 at 2:00 p.m.
The Debtors estimate that, as of the Petition Date, $82 million of
general unsecured debt was outstanding, comprised primarily of
trade claims, obligations related to REC and ACP obligations, and
broker commission payments.
The Plan proposes to treat claims as follows:
* Class 1B Allowed Prepetition BP Secured Claim totaling
$128,222,666. The class is projected to recover 68% to 85%. Each
holder of an Allowed Prepetition BP Secured Claim shall receive on
the Effective Date, or as soon as reasonably practicable
thereafter, all of the following, but not including cash in an
amount necessary to pay or reserve for the Confirmation Amount: the
return of proceeds from the sale of the Prepetition Collateral and
any Prepetition Collateral, including, among other things, the
Posted Collateral, subject to Other Secured Claims. BP shall be
deemed to (i) waive any diminution Claim against the Debtors and
their Estates under the Final DIP Order, and (ii) release any lien
it holds on (a) Briarcliff that is evidenced by a mortgage or
otherwise, as well as any lien on the Briarcliff Membership
Interests, and (b) the Liquidation Trust Assets.
* Class 2 Allowed General Unsecured Claims totaling $21,700,000
to $161,000,000. The class is projected to recover 1% to 16%.
Each holder of an Allowed General Unsecured Claim shall receive one
or more Distributions equal to its Pro Rata share of the General
Unsecured Creditor Interests as such Distributions become available
as is reasonably practicable in the reasonable discretion of the
Liquidation Trustee. The Liquidation Trust, in the Liquidation
Trustee’s discretion, shall make periodic Distributions of
available Cash from the Liquidation Trust Assets to the holders of
General Unsecured Creditor Interests at any time after the
Effective Date.
* Class 3 Allowed BP Deficiency Claim and Allowed BP
Subordinated Claim projected to total $36,609,959 to $44,983,645.
Subject to the section of the Plan related to the treatment of
Prepetition CBLIC Claims, outlined below, (i) the BP Deficiency
Claim and the BP Subordinated Claim shall be deemed Allowed and
subordinated to Class 2 Allowed General Unsecured Claims, and (ii)
after all Allowed General Unsecured Claims are paid in full, each
holder of an Allowed BP Deficiency Claim and Allowed BP
Subordinated Claim shall receive its Pro Rata share of the proceeds
of the Subordinated Creditor Fund as such funds become available as
is reasonably practicable in the reasonable discretion of the
Liquidation Trustee.
* Class 4 Allowed Prepetition CBLIC Claims totaling $35,699,288
to $36,761,160. Upon the consent of the holder(s) of the
Prepetition CBLIC Claims, such Prepetition CBLIC Claims shall be
deemed subordinated to the Class 2 General Unsecured Claims
pursuant to Bankruptcy Code section 510(c) or recharacterized as
equity, and any liens purportedly securing such Claims shall be
released on the Effective Date.
* Class 5 Interest. No holder of an Interest will be entitled
to a Distribution under the Plan on account of such Interest. On
the Effective Date, all Interests shall be retired, cancelled,
extinguished, and/or discharged
A full-text copy of the First Amended Disclosure Statement dated
May 4, 2020, is available at https://tinyurl.com/yas2u8vj from
PacerMonitor.com at no charge.
Counsel to the Debtors:
Timothy W. Walsh
Darren Azman
Ravi Vohra
Natalie Rowles
MCDERMOTT WILL & EMERY LLP
340 Madison Avenue
New York, New York 10173
Telephone: (212) 547-5615
Facsimile: (212) 547-5444
About Agera Energy
Headquartered in Briarcliff Manor, N.Y., and established in 2014,
Agera Energy -- http://www.ageraenergy.com/-- is a retail energy
supplier offering a one-stop-shop for energy supply, efficiency and
audit services. Serving a national footprint of customers, the
company supplies residential and business customers, ranging from
the smallest apartments to the largest industrial users, with
electricity and natural gas. With best-in-class energy solutions,
Agera Energy focuses on its customers so they can focus on their
homes and businesses.
Agera Energy LLC and five subsidiaries sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 19-23802) on Oct. 4, 2019, in White
Plains, N.Y. Agera Energy was estimated to have $50 million to
$100 million in assets and $100 million to $500 million in
liabilities as of the bankruptcy filing.
The Hon. Robert D. Drain oversees the cases.
The Debtors tapped McDermott Will & Emery LLP as counsel; Stifel,
Nicolaus & Co., Inc. and Miller Buckfire & Co., LLC as an
investment banker; and GlassRatner Advisory & Capital Group, LLC as
financial advisor. Stretto is the claims agent.
The U.S. Trustee for Region 2 appointed creditors to serve on the
official committee of unsecured creditors on Oct. 11, 2019.
ALPHA ENTERTAINMENT: Aug. 3 Auction of Substantially All Assets Set
-------------------------------------------------------------------
Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for
the District of Delaware authorized Alpha Entertainment, LLC's
bidding procedures in connection with the auction sale of
substantially all assets.
The Committee will be timely provided with copies of all Bids,
including any attendant materials, information and communications,
received from any Potential Bidder and Qualified Bidder relating to
such Bid or Qualified Bid, as applicable.
The Debtor is authorized to conduct the bidding process in
accordance with the Bidding Procedures and the terms thereof,
without the necessity of complying with any state or local bulk
transfer laws or requirements applicable to the Debtor.
The Potential Bidders or Qualified Bidders (other than any Stalking
Horse Bidder), will not be allowed any break-up, termination or
similar fee with respect to the Acquired Assets. Moreover, all
Potential Bidders, Qualified Bidders, and any Stalking Horse Bidder
(excluding any Bid Protections approved by the Court) waive any
right to seek a claim for substantial contribution pursuant to
section 503 of the Bankruptcy Code, or the payment of any broker
fees or costs, unless specifically agreed to by the Debtor upon
consultation with the Consultation Parties and ultimately approved
by the Court.
The following Assignment Procedures will govern the assumption and
assignment of the Designated Contracts in connection with the Sale,
and any objections related thereto:
a. On June 3, 2020, the Debtor will file with the Court and
serve on each Non-Debtor Counterparty to each of the Designated
Contracts the Notice of Assumption and Assignment. The Cure
Cost/Assignment Objection Deadline is 4:00 p.m. (ET) on the date
that is the earlier of July 13, 2020 or 14 days following service
of the Notice of Assumption and Assignment.
b. The Post-Auction Objection Deadline is Aug. 5, 2020 at
12:00 p.m. (ET).
c. The Debtor's decision to assume and assign the Designated
Contracts to the relevant Successful Bidder is subject to the
Court’s approval and the closing of the Sale. Accordingly,
absent the Court's approval and the closing of the Sale, the
Designated Contracts will not be deemed assumed or assumed and
assigned, and will in all respects be subject to further
administration by the Debtor and its estate under the Bankruptcy
Code in connection with the Chapter 11 Case.
Service and publication of the Notice of Auction and Sale Hearing
are sufficient to provide effective notice to all interested
parties of, inter alia, the Bidding Procedures, the Auction, the
Sale Hearing, the Sale, and the Assignment Procedures in accordance
with Bankruptcy Rules 2002 and 6004, as applicable, and are
approved. Two business days after entry of the Order, the Debtor
will cause
the Notice of Auction and Sale Hearing to the Notice Parties.
In addition to the foregoing, five business days after entry of the
Bidding Procedures Order, the Debtor will publish the Notice of
Auction and Sale Hearing once in the national edition of The New
York Times, and post the Notice of Auction and Sale Hearing and the
Bidding Procedures Order on the website of the Debtor' claims and
noticing agent, Donlin Recano & Co. Inc. As soon as reasonably
practicable following conclusion of the Auction, the Debtor will
file a notice on the Court's docket identifying the Successful
Bidder(s) for the Acquired Assets and any applicable Next-Highest
Bidder(s).
he Notice of Assumption and Assignment, and the other Assignment
Procedures set forth, are sufficient to provide effective notice
pursuant to Bankruptcy Rules 2002(a)(2), 6004(a) and 6006(c) to the
Non-Debtor Counterparties to the Designated Contracts of the
Debtor's intent to potentially assume and assign some or all of the
Designated Contracts and are approved.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: (i) Stalking Horse Deadline - July 23, 2020
at 11:59 p.m. (ET), (ii) Bid Deadline - 5:00 p.m. (ET) on July 30,
2020
b. Initial Bid: Contains a statement setting forth the
adjusted Minimum Bid, which amount will equal the sum of: (A) the
value of the Stalking Horse Bid; (B) the Bid Protection Amount; and
(C) a reasonable minimum overbid amount to be calculated in the
Debtor’s sole discretion, following consultation with the
Consultation Parties, based on the aggregate price set forth in the
Stalking Horse Bid
c. Deposit: 10% of the Bid
d. Auction: The Debtor may sell the Acquired Assets by
conducting an Auction in accordance with the Bidding Procedures.
If at least two Qualified Bids (or one Qualified Bid if there is
also a Stalking Horse Bid) are received by the Bid Deadline with
regard to the Acquired Assets, the Debtor will conduct an Auction
in accordance with the Bidding Procedures, which Auction will take
place on Aug. 3, 2020 at 10:00 a.m. (ET) at the offices of counsel
to the Debtor, Young Conaway Stargatt & Taylor, LLP, Rodney Square,
1000 North King Street, Wilmington, Delaware 19801, or such later
time or such other place as the Debtor will designate upon
consultation with the Consultation Parties.
e. Bid Increments: TBD
f. Sale Hearing: Aug. 7, 2020 at 10:00 a.m. (ET)
g. Sale Objection Deadline: July 13, 2020 at 4:00 p.m. (ET)
h. Closing: Aug. 21, 2020
Notwithstanding any provision in the Bankruptcy Rules to the
contrary, the stays provided for in Bankruptcy Rules 6004(h) and
6006(d) are waived and the Order will be effective immediately and
enforceable upon its entry.
The requirements set forth in Local Rules 6004-1, 9006-1, and
9013-1 are satisfied or waived.
A copy of the Bidding Procedures is available at
https://tinyurl.com/yak6c7zn from PacerMonitor.com free of charge.
About Alpha Entertainment
Alpha Entertainment LLC, which does business as the "Xtreme
Football League" -- https://www.alphaentllc.com/ -- is a
professional American football league. The XFL kicked off with
games beginning in February 2020. The XFL offered fast-paced,
three-hour games with fewer play stoppages and simpler rules. The
XFL featured eight teams, 46-man active rosters, and a 10-week
regular season schedule, with a postseason consisting of two
semifinal playoff games and a championship game. The eight XFL
teams were the DC Defenders, the Dallas Renegades, the Houston
Roughnecks, the Los Angeles Wildcats, the New York Guardians, the
St. Louis BattleHawks, the Seattle Dragons, and the Tampa Bay
Vipers.
Alpha Entertainment LLC, based in Stamford, CT, filed a Chapter 11
petition (Bankr. D. Del. Case No. 20-10940) on April 13, 2020. The
Hon. Laurie Selber Silverstein presides over the case. In its
petition, the Debtor was estimated to have $10 million to $50
million in both assets and liabilities. The petition was signed by
John Brecker, independent manager.
The Debtor hiref Young Conaway Stargatt & Taylor, LLP; and Donlin
Recano & Company, Inc., as claims agent and administrative advisor.
API AMERICAS: Unsec. Creditors to Get 10% to 20% Recovery in Plan
-----------------------------------------------------------------
API Americas, Inc. and API (USA) Holdings Limited filed with the
U.S. Bankruptcy Court for the District of Delaware a Combined
Disclosure Statement and Plan of Liquidation dated May 7, 2020.
The Plan is the culmination of (A) a sale and liquidation process
pursuant to which the Debtors have sold substantially all of their
assets and (B) a global settlement among the Debtors, the Creditors
Committee, the Administrative Agent, Steel Partners and the U.K.
Borrower.
As a result of the Debtors' sale and the liquidation efforts, the
Debtors’ Estates have, of the date of this Plan, realized gross
proceeds of approximately $5,280,000. Consistent with the Final
Cash Collateral Order and Updated Budget, on April 15 and 16, 2020,
the Debtors transferred $2,031,000 to the Administrative Agent as a
pay down of the Prepetition Secured Obligations. Consistent with
the Final Cash Collateral Order and Global Settlement Order, the
Debtors placed $1,969,500 in the Segregated Account, as defined in
the Global Settlement Agreement.
In an effort to resolve the parties' disputes, including the
Potential Claims, the U.K. Borrower Claims and the Intercompany
Claims, the Settlement Parties negotiated extensively and in good
faith and ultimately entered into the Settlement Agreement dated as
of April 16, 2020 (the Global Settlement Agreement). The Global
Settlement Agreement has permitted the Debtors and the Creditors
Committee to advance the Chapter 11 Cases towards conclusion by
creating a path to a plan of liquidation through the funding of
amounts sufficient to satisfy Allowed Claims and the resolution
and, in the case of the U.K. Borrower Claims, reduction, of
significant Intercompany Claims that would otherwise be asserted
against the Debtors' estates and potentially diminish returns to
unsecured creditors.
Holders of Class 4 General Unsecured Claims have an anticipated
recovery of 10% to 20%. Each Holder of an Allowed Class 4
Unsecured Claim, subject to the De Minimis Threshold, will receive
a pro rata share of the Estate Funding Amount and the proceeds, if
any, of the Avoidance Actions.
Holders of Class 7 Equity Interests will not be entitled to receive
or retain any property on account of such Equity Interests.
The remaining property of the Debtors' estates will automatically
vest in the Post-Effective Date Debtors (i) subject to the Claims,
Liens and other interests of the Prepetition Secured Parties in
respect of the Remaining Administrative Agent Assets, but (ii) free
and clear of all Claims, Liens and other interests in respect of
the Debtors' Representative Assets, all of which will remain
subject to the terms and provisions of this Plan.
The Plan provides for the limited consolidation of the Debtors'
Estates, but solely for the purposes of this Plan, including making
any Distributions to Holders of Allowed Claims. The Debtors
propose limited consolidation to promote efficient administration
and effectuation of the Plan, including for purposes of
Distributions to be made under the Plan, and to avoid the
inefficiency of proposing Entity-specific Claims for which there
would be little to no impact on Distributions.
On the Effective Date, (i) all assets and liabilities of the
Debtors shall be treated on an aggregated basis, (ii) each Claim
against any of the Debtors shall be deemed a single Claim against
and a single obligation of all of the Debtors, (iii) any Claims
scheduled, filed or to be filed in the Chapter 11 Cases will be
deemed single Claims against the Debtors, (iv) all guarantees of
one Debtor of the payment, performance, or collection of
obligations of another Debtor shall be eliminated and canceled, (v)
all transfers, disbursements and Distributions on account of Claims
made by or on behalf of any of the Debtors' Estates will be deemed
to be made by or on behalf of all of the Debtors' Estates, and (vi)
any obligation of the Debtors as to Claims will be deemed to be one
obligation of all of the Debtors.
A full-text copy of the Combined Disclosure Statement and
Liquidating Plan dated May 7, 2020, is available at
https://tinyurl.com/y6wmdtga from PacerMonitor at no charge.
The Debtors are represented by:
EVERSHEDS SUTHERLAND (US) LLP
Mark D. Sherrill
1001 Fannin, Suite 3700
Houston, TX 77002
Telephone: (713) 470-6100
E-mail: marksherrill@eversheds-sutherland.com
- and -
Edward P. Christian
Grace Building
1114 6th Avenue, 40th Floor
New York, NY 10036
Telephone: (212) 389-5000
E-mail: edwardchristian@eversheds-sutherland.com
- and -
SAUL EWING ARNSTEIN & LEHR LLP
Mark Minuti
Monique B. DiSabatino
1201 N. Market Street, Suite 2300
P.O. Box 1266
Wilmington, DE 19899
Telephone: (302) 421-6840
E-mail: mark.minuti@saul.com
monique.disabatino@saul.com
About API Americas Inc.
and API (USA) Holdings Limited
API Americas Inc. -- http://www.apigroup.com/-- is a manufacturer
of foils, laminates, and holographic materials. Among other
customers, API Americas provides packaging to companies in the
premium drinks, confectionery, tobacco, perfume, personal care,
cosmetics, and healthcare sectors. API Americas was originally
founded as Dry Print in New Jersey. Re-branded in 1998, API
Americas is currently headquartered in Lawrence, Kansas inside a
56,000 square foot facility with manufacturing capabilities.
API Americas Inc., and holding company API (USA) Holdings Limited,
filed Chapter 11 petitions (Bankr. N.D. Del. Lead Case No.20-10239)
on February 2, 2020. The petitions were signed by Douglas
Woodworth, director.
As of Dec. 31, 2019, API Americas Inc., has $37.3 million in total
assets, $5.8 million in current liabilities and $47.3 million in
long-term liabilities. API (USA) Holdings Limited holds $51.6
million in total assets and $2.9 million in total liabilities.
Saul Ewing Arnstein & Lehr LLP and Eversheds Sutherland (US) LLP
represent the Debtors as general bankruptcy counsel. Ernst & Young
LLP is the Debtors' financial advisor. Bankruptcy Management
Solutions, Inc., d/b/a Stretto serves as the Debtors' claims and
noticing agent.
ARADIGM CORP: June 10 Plan Confirmation Hearing Set
---------------------------------------------------
A hearing to confirm the April 27 Combined Plan filed by Aradigm
Corporation will be held on June 10, 2020, at 10:30 a.m., or as
soon thereafter as the matter may be heard, before the Honorable
William Lafferty, United States Bankruptcy Judge.
Any objection to the final approval of the disclosure statement
incorporated in the April 27 Combined Plan as containing adequate
information shall be filed with the Bankruptcy Court and served on
counsel to the Debtor by no later than June 1, 2020.
Any objection to confirmation of the April 27 Combined Plan shall
be filed with the Bankruptcy Court and served on counsel to the
Debtor by no later than June 1, 2020.
Attorney for the Debtor:
BENNETT G. YOUNG
JEFFER MANGELS BUTLER & MITCHELL LLP
Two Embarcadero Center, 5th Floor
San Francisco, California 94111-3813
Telephone: (415)398-8080
Facsimile: (415)398-5584
E-mail: byoung@jmbm.com
About Aradigm Corporation
Aradigm Corporation -- http://www.aradigm.com/-- is an emerging
specialty pharmaceutical company focused on the development and
commercialization of products for the treatment and prevention of
severe respiratory diseases. Over the last decade, the company
invested a large amount of capital to develop drug delivery
technologies, particularly the development of a significant amount
of expertise in respiratory (pulmonary) drug delivery as
incorporated in its lead product candidate that recently completed
two Phase 3 clinical trials, Linhaliq inhaled ciprofloxacin,
formerly known as Pulmaquin. The company is headquartered in
Hayward, Calif.
Aradigm Corporation sought Chapter 11 protection (Bankr. N.D. Cal.
Case No. 19-40363) on Feb. 15, 2019. In the petition signed by
John M. Siebert, executive chairman and interim principal executive
officer, the Debtor was estimated to have $10 million to $50
million in both assets and liabilities.
The case is assigned to Judge William J. Lafferty.
The Debtor tapped Jeffer, Mangels, Butler & Mitchell LLP as
bankruptcy counsel; Sheppard Mullin Richter & Hampton LLP as
special patent counsel; and EMA Partners, LLC as investment banker.
ARCHDIOCESE OF NEW ORLEANS: 7-Member Creditors Committee Appointed
------------------------------------------------------------------
David Asbach, acting U.S. trustee for Region 5, disclosed in a
notice filed with the U.S. Bankruptcy Court for the Eastern
District of Louisiana that as of May 26, these creditors are the
members of the official committee of unsecured creditors in the
Chapter 11 case of The Roman Catholic Church of The Archdiocese of
New Orleans:
1. James Adams (Chairperson)
c/o Richard C. Trahant, Esq.
Attorney at Law
2908 Hessmer Ave.
Metairie, LA 70002
Phone: 504-780-9891
Fax: 504-780-7741
trahant@trahantlawoffice.com
2. Patricia Moody
c/o Thomas J. Madigan
Sher, Garner, Cahill, Richter, Klein & Hilbert, LLC
909 Poydras Street, Suite 2800
New Orleans, LA 70112
Phone: 504-299-2110
Fax: 504-299-2300
tmadigan@shergarner.com
3. George Coulon
c/o Damon J. Baldone, Esq.
Damon J. Baldone & Associates
162 New Orleans Blvd.
Houma, LA 70364
Phone: 985-868-3427
Fax: 985-872-2319
dbaldone@hotmail.com
4. Theodore Jackson
c/o John H. Denenea, Jr.
Sheaman-Denenea, LLC
4240 Canal Street, 2nd Floor
New Orleans, LA 70119
Phone: 504-304-4582
Fax: 504-304-4587
jdenenea@midcitylaw.com
5. Jackie Berthelot
c/o Richard C. Trahant, Esq.
Attorney at Law
2908 Hessmer Ave. Metairie, LA 70002
Phone: 504-780-9891
Fax: 504-780-7741
trahant@trahantlawoffice.com
6. Eric Johnson
c/o John H. Denenea, Jr.
Sheaman-Denenea, LLC
4240 Canal Street, 2nd Floor
New Orleans, LA 70119
Phone: 504-304-4582
Fax: 504-304-4587
jdenenea@midcitylaw.com
7. Hancock Whitney Bank
Attention: Beth Zeigler
Hancock Whitney Bank
445 N. Blvd., Suite 201
Baton Rouge, LA 70802
Phone: (225) 248-7467
Beth.Zeigler@hancockwhitney.com
The bankruptcy watchdog appointed the creditors on May 20. Except
for Hancock Whitney Bank, the names of the other creditors were
redacted from the May 20 notice of appointment.
About the Archdiocese of New Orleans
The Roman Catholic Church of the Archdiocese of New Orleans --
https://www.nolacatholic.org/ -- is a non-profit religious
corporation incorporated under the laws of the State of Louisiana.
Created as a diocese in 1793, and established as an archdiocese in
1850, the Archdiocese of New Orleans has educated hundreds of
thousands in its schools, provided religious services to its
churches and provided charitable assistance to individuals in need,
including those affected by hurricanes, floods, natural disasters,
war, civil unrest, plagues, epidemics, and illness. Currently, the
archdiocese's geographic footprint occupies over 4,200 square miles
in southeast Louisiana and includes eight civil parishes --
Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St.
John the Baptist, St. Tammany, and Washington.
The Roman Catholic Church for the Archdiocese of New Orleans sought
Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1,
2020.
The archdiocese was estimated to have $100 million to $500 million
in assets and liabilities as of the bankruptcy filing.
The Hon. Meredith S. Grabill is the case judge.
Jones Walker LLP, led by Mark A. Mintz, R. Patrick Vance, Elizabeth
J. Futrell, and Laura F. Ashley, serves as counsel to the
archdiocese. Donlin, Recano & Company, Inc., is the claims agent.
ASCENA RETAIL: Provides Additional Business Update on COVID-19
--------------------------------------------------------------
ascena retail group, inc. provided a brief update related to its
most recently completed quarter that ended on May 2, 2020. The
estimated 2020 third quarter information presented in this release
is preliminary, and is subject to the completion of the Company's
standard procedures for the preparation and completion of its
quarterly financial statements. Given that these reviews are
ongoing, the Company may make further adjustments as a result of
developments occurring between now and the time the financial
results are finalized and publicly released. In addition,
estimated sales data has been provided to help investors understand
and assess the near-term impacts of the coronavirus ("COVID-19")
pandemic, but is subject to variability and may not be indicative
of results or trends for any future reporting period.
Carrie Teffner, interim executive chair of ascena commented,
"COVID-19 has significantly disrupted our business. Despite
aggressive actions to preserve liquidity, the pandemic has
significantly reduced our earnings and cash flow, resulting in
increased levels of debt and deferred liabilities. With retail
stores making up the majority of our revenue and cash flow, the
uncertainty created by COVID-19 requires us to evaluate all options
available to protect the business and its stakeholders."
Gary Muto, chief executive officer of ascena commented, "We took
immediate actions to preserve liquidity and reduce costs in
response to the COVID-19 pandemic while continuing to heighten
engagement with our customers. We have successfully leveraged our
digital capabilities to respond to the evolving needs of our
customers across our portfolio of well-known and beloved brands.
As of May 27th, we have re-opened approximately 450 of our 2,800
stores and will operate in adherence with local regulations as well
as health and safety guidelines from the CDC. We look forward to
welcoming our customers back to our stores."
Mr. Muto continued, "The safety of our store associates and
customers remain our leading priority as we navigate the challenges
presented by COVID-19. We continue to put our associates,
customers and community at the center of everything we do and I am
extremely thankful to our associates for their commitment and hard
work during this extremely difficult period."
Operational update:
The Company closed all of its stores on March 18, 2020. Prior to
the closing, store revenue in fiscal 2020 represented approximately
60% of total revenues. The Company was able to continue its
e-commerce business, which experienced a 9% increase in demand
during April 2020, compared to April 2019. Total revenues in the
third quarter of fiscal 2020 were down 45% compared to the third
quarter of the prior year.
In early May, the Company began to re-open a select number of
stores in states that have lifted business restrictions on
non-essential businesses. The Company's approach to meeting
customer demand and re-opening its stores has been to use its
stores to fulfill e-commerce orders from its existing store
inventory. Additionally, the Company has also begun to
re-introduce its buy online and pick-up in stores option via
curbside pickup. Lastly, some stores have begun to fully re-open
to customers following local health and safety guidelines and
regulations, which include the following:
* Limiting the number of customers in the stores;
* Implementing health safety checks for associates before every
shift;
* Providing hand sanitizer and masks to customers;
* Creating new flexible distance between clothing racks;
* Adjusting fitting rooms to accommodate social distancing
practices;
* Installing plexiglass health guard partitions at checkout
areas; and
* Following enhanced cleaning protocols.
In markets where shelter-in-place orders have been lifted, and
where the Company has fully opened stores, the Company is
experiencing significantly reduced customer traffic relative to the
same period last year.
Inventory at the end of the quarter was down approximately 20%
compared the same period in the prior year. This reflects a
significant increase in inventory reserves, reflecting the
uncertainty of consumer sentiment once stores fully re-open. Gross
inventory, before reserves, was up 5% compared to the same period
in the prior year.
Liquidity update:
The Company has taken a number of steps since the temporary closure
of its stores to maintain maximum financial flexibility. Those
steps include the following:
* Borrowed $230 million under its amended and restated
revolving credit agreement, as previously announced in
March;
* Cancelled merchandise receipts where possible in order to
better align inventory receipts with expected market
demand;
* Extended landlord and vendor payment terms, including
withholding payments in certain instances;
* Furloughed over 90% of our associates;
* Significantly reduced base salaries for associates earning
above a certain level;
* Amended and restated the Company's Executive Severance Plan
to better align with prevailing market practices;
* Reduced advertising expenses; and
* Reduced capital expenditures to those that are considered
business critical.
As a result of these steps, the Company ended the third quarter
with cash and cash equivalents of approximately $439 million.
The Company ended the third quarter with outstanding term-loan debt
of $1,292 million, with interest payments due in the fourth quarter
of fiscal 2020 of $20.9 million and its next quarterly term-loan
payment of $22.5 million due in November 2020. The Company also
ended the third quarter with $230 million of borrowings outstanding
under its amended and restated revolving credit agreement, which,
as noted above, was utilized to maintain maximum financial
flexibility. Borrowings under the Company's amended and restated
revolving credit agreement have no required repayments until the
maturity date, which is currently expected to be in May 2022.
Due to the Company's increased level of debt and deferred
liabilities resulting from the COVID-19 pandemic, despite the
aggressive steps outlined above, the Company will continue to
evaluate all available options to preserve its ongoing operations.
Other update:
The Company also announced that it will file its Quarterly Report
on Form 10-Q for the quarter ended May 2, 2020 no later than July
27, 2020 pursuant to the 45-day extension permitted by the
Securities and Exchange Commission's Order under Section 36 of the
Securities Exchange Act of 1934 Modifying Exemptions From the
Reporting and Proxy Delivery Requirements for Public Companies
dated March 25, 2020.
About Ascena Retail
Ascena Retail Group, Inc. (Nasdaq: ASNA) --
http://www.ascenaretail.com-- is a national specialty retailer
offering apparel, shoes, and accessories for women under the
Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion
(Lane Bryant, Catherines and Cacique), and Value Fashion
(Dressbarn) segments, and for tween girls under the Kids Fashion
segment (Justice). Ascena, through its retail brands, operates
ecommerce websites and approximately 2,800 stores throughout the
United States, Canada, and Puerto Rico.
Ascena Retail reported a net loss of $661.4 million for the fiscal
year ended Aug. 3, 2019, a net loss of $39.7 million for the year
ended Aug. 4, 2018, and a net loss of $1.06 billion for the year
ended July 29, 2017. As of Feb. 1, 2020, the Company had $3.07
billion in total assets, $2.99 billion in total liabilities, and
$76.6 million in total equity.
* * *
As reported by the TCR on March 20, 2020, S&P Global Ratings raised
its issuer rating on Ascena Retail Group Inc. to 'CCC-' from 'SD'
and maintained the 'D' rating on the term loan due August 2022.
"The rating action reflects our view of the likelihood of a
conventional default or a broad-based restructuring of Ascena's
capital structure in the next six months. Our opinion considers the
company's unsustainable capital structure, its still significant
debt burden following the repurchases, and our expectation for weak
performance amid a highly challenging operating environment. The
rating also reflects our view that the recent coronavirus outbreak
in the U.S. will further pressure store traffic and limit
conventional refinancing prospects," S&P said.
As reported by the TCR on April 16, 2020, Moody's Investors Service
downgraded Ascena Retail Group, Inc.'s corporate family rating to
Caa3 from Caa2. Ascena's Caa3 CFR is constrained by Moody's view
that default risk is elevated as a result of the company's high
leverage, 2022 debt maturities, and expectations for declining
earnings over the next 12-18 months.
ASG TECHNOLOGIES: S&P Cuts ICR to 'B-' on Weakened Credit Metrics
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
provider of enterprise information and infrastructure management
software ASG Technologies Group Inc. and its ratings on the
company's senior secured term loan and revolving credit facility
(RCF) to 'B-'.
S&P said, "We expect a significant deterioration in 2020 credit
metrics due to a challenging operating environment. The rating
action is based on our expectation that credit metrics in 2020 will
remain weaker than the levels we consider in line with the current
rating--that is, leverage in the mid-6x area and FOCF-to-debt in
the mid-single-digit-percent area. Together with weak sales
performance in ASG's European operations over the last few
quarters, we expect weaker business confidence during the current
global economic downturn to have a significant adverse effect on
near-term license sales. We especially believe that new deals could
be affected by IT projects either being delayed or canceled. We
also expect some decline in maintenance revenues, with some
customers in financial difficulty choosing to reduce their level of
support.
"These factors have contributed to recent underperformance with
leverage increasing to about 6.9x in the 12 months ending March 31,
2020 (or 6.4x excluding a preemptive draw on the RCF). We now
expect leverage to increase to the low- to mid-7x range at the end
of 2020. This compares to our previous 2020 leverage expectation in
the mid-4x area in our October 2019 publication. FOCF to debt also
reduced to about 3% as of March 31, and we expect FOCF to reduce
further to breakeven levels over 2020 due to possible extended
payment terms or modified contract durations from customers that
may have little financial flexibility.
"Our adjusted debt, EBITDA, and FOCF figures include our standard
adjustments for operating leases and share-based compensation. We
do not net any accessible cash from gross debt based on our view
that such cash could be used for shareholder returns, acquisitions,
or other purposes, given the company's financial sponsor
ownership."
"Cost savings and a more normalized operating environment could
support deleveraging and positive FOCF in 2021. We expect ASG to
undertake restructuring actions in 2020 that will partly mitigate
the near-term impact on EBITDA margins from the expected revenue
decline. These actions largely comprise a reorganization of the
company's global sales teams, including in EMEA, and are expected
to generate nearly $15 million of annual run-rate cost savings.
Although we believe that ASG might be able to return to positive
FOCF generation and reduce leverage in 2021 from improved EBITDA
margins, thanks to cost savings and lower restructuring costs, we
view revenue stabilization in the near-term as uncertain.
"Significant uncertainty remains around near-term performance and a
2021 recovery given the company's relatively small scale. Our
forecast credit metrics are highly susceptible to the uncertainties
around the duration and extent of the economic downturn linked to
the COVID-19 pandemic. In particular, we believe the near-term
volatility also reflects ASG's small scale compared to large
diversified competitors such as Open Text, IBM, and BMC Software,
as well as its significant amount of license revenues (about 44% of
revenues in the 12 months ending March 31, 2020) that are largely
recognized upfront. We also have not seen clear evidence that the
recent sales execution challenges in EMEA have been fully resolved.
Therefore, we believe that uncertainty remains over a 2021 revenue
stabilization and recovery in credit metrics."
ASG has taken actions to maintain sufficient liquidity during the
economic downturn. By drawing the remaining $24.5 million capacity
on the $25 million RCF expiring in July 2022, ASG increased its
cash balance to about $105 million at the end of March. S&P
believes this should be sufficient liquidity for the company to
withstand the near-term operating headwinds and meet its intra-year
working capital and debt servicing needs.
S&P said, "The stable outlook reflects our expectation that ASG
will experience significant revenue declines in 2020 with license
sales from new customers being affected by the weaker macroeconomic
environment and sales execution challenges in EMEA, while weakened
FOCF could be further affected by delayed cash collections. As a
result, we expect leverage to be elevated at above 7x in 2020, with
the prospect for potential deleveraging below 6.5x and a return to
positive FOCF to debt in the mid-single-digit-percent area in 2021
being uncertain.
"We could lower the rating if a deeper- or longer-than-expected
economic downturn results in continued EBITDA margin deterioration
or increasing maintenance revenue churn such that we expect
sustained negative FOCF generation or a constrained liquidity
position. In addition to the weak macroeconomic environment, this
could be driven by sustained weak sales performance in EMEA.
"We could raise the rating if ASG stabilizes its revenue declines
helped by customer adoption of recent product updates or the IBM
mainframe upgrade cycle, or significantly improves EBITDA margins
through cost savings. This would result in leverage reducing to
below 6.5x and a return to positive FOCF to debt at the
mid-single-digit-percent area, both on a sustained basis. This
could be further achieved by ASG reducing its gross debt balance
while maintaining sufficient liquidity."
BARTLETT TRAYNOR: June 23 Hearing on Amended Disclosure Statement
-----------------------------------------------------------------
On May 7, 2020, Robert Chernicoff filed with the U.S. Bankruptcy
Court for the Middle District of Pennsylvania an amended disclosure
statement and amended plan for Bartlett Traynor & London, LLC, dba
Harrisburg Midtown Arts Center. Judge Henry W. Van Eck ordered
that:
* June 23, 2020, at 9:30 a.m. is the telephonic hearing to
consider approval of the Amended Disclosure Statement.
* June 11, 2020, is fixed as the last day for filing and serving
in accordance with Federal Rules of Bankruptcy Procedure 3017(a)
written objections to the amended disclosure statement.
* Within seven days after entry of this order, the Amended
Disclosure Statement and Amended Plan will be distributed in
accordance with Federal Rule of Bankruptcy Procedure 3017(a).
A copy of the order dated May 7, 2020, is available at
https://tinyurl.com/y73s9wa7 from PacerMonitor at no charge.
The Debtor's Counsel:
Robert E. Chernicoff
CUNNINGHAM, CHERNICOFF & WARSHAWSKY, P.C.
2320 North Second Street
P.O. Box 60457
Harrisburg, PA 17106-0457
Tel: (717) 238-6570
About Bartlett Traynor & London
Bartlett Traynor & London, LLC, which conducts business under the
name Harrisburg Midtown Arts Center, is a music and arts center at
1110 N. Third St., Harrisburg, Pennsylvania.
Bartlett Traynor & London sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Pa. Case No. 18-03520) on Aug. 23,
2018. In the petition signed by John Traynor, member, the Debtor
was estimated to have assets of $1 million to $10 million and
liabilities of $1 million to $10 million. Judge Henry W. Van Eck
presides over the case. The Debtor tapped Cunningham Chernicoff &
Warshawsky, P.C., as counsel.
BARTLETT TRAYNOR: Plan Payment Depends Upon Buyer's New Financing
-----------------------------------------------------------------
Bartlett Traynor & London, LLC, filed the Amended Disclosure
Statement in support of Plan of Reorganization dated May 7, 2020.
Class 7 general unsecured creditors will recover up to 100
percent.
The amount of the Class 7 claims, together with the McCoy Brothers
Claim after payment of the $50,000 from the Permanent Financing,
and the possible small amount owed to Priority Tax Claims, is
$1,400,000. McCoy Brother will be owed $536,356 leaving a
remaining amount owed to the Class 7 unsecured creditors of
$800,000.
The Debtor believes that HMAC Holdings, LLC and 1110 HBG, LLC (the
buyer of the Debtor's assets), or its affiliates, should be able to
obtain sufficient funding through new lender financing, the
possible use of New market Tax Credits and a grant from the
Commonwealth of Pennsylvania under the RACP program in order to
complete the Harrisburg Midtown Arts Center project. The RACP
grant is in the amount of $1,000,000. All of these sources should
generate sufficient funds to claims under the Plan. At the
closing pursuant to the sale order, BankUnited was paid $2,450,000
and the Fulton Bank Class 5A Claim holder was paid $200,000, that
caused each such Claim holder to release their Claims. The Sale
Order provides for any balance then owed to be placed into a Note,
secured by a Mortgage on the Real Property. The Note is to be paid
following the Buyer obtaining permanent financing, and from
operations of the Buyer and the operatory of the HMAC facility.
There was no guarantee of payment in full of the Note. In order to
secure Permanent Financing, the Buyer has proposed that at a
closing on the Permanent Financing, the Note granted at the Asset
sale closing and the second priority mortgage will be converted
into Class B Equity in a new entity to be formed as the holder of
the purchased entities that purchased the Assets of the Buyer to be
known as HMAC Holdings, LLC. Payments to creditors in the case
will occur partially from new Permanent Financing to be obtained
in order to retire the first mortgage lien granted at closing by
the Lender to the Buyer, and from the operations of HMAC Holdings,
LLC and its operating entity. Such payment will occur within three
years after approval of the Court of a Motion modifying the terms
of the Sale Order or the Effective Date of the Plan, whichever
comes first. Payment under the Plan is dependent upon the ability
of the Buyer or HMAC Holdings, LLC, to secure new financing and
such entities' financial stability and operations. The Debtor
believes that creditors may be able to receive payment in full
under the Note. If such occurs, all creditors will be paid 100%.
If a lesser payment occurs under the Note, the range of payments to
unsecured creditors and to other remaining creditors cannot be
predicted.
The only other asset for distribution of any amount is any possible
Litigation proceeds from the lawsuit against the various parties
involved with the Social Media issues. These amounts are not
considered to be appreciable.
A full-text copy of the Amended Disclosure Statement dated May 7,
2020, is available at https://tinyurl.com/y7m2yrlg from
PacerMonitor at no charge.
The Debtor's counsel:
Robert E. Chernicoff
CUNNINGHAM, CHERNICOFF & WARSHAWSKY, P.C.
2320 North Second Street
P.O. Box 60457
Harrisburg, PA 17106-0457
Tel: (717) 238-6570
About Bartlett Traynor & London
Bartlett Traynor & London, LLC, which conducts business under the
name Harrisburg Midtown Arts Center, is a music and arts center at
1110 N. Third St., Harrisburg, Pennsylvania.
Bartlett Traynor & London sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Pa. Case No. 18-03520) on Aug. 23,
2018. In the petition signed by John Traynor, member, the Debtor
was estimated to have assets of $1 million to $10 million and
liabilities of $1 million to $10 million. Judge Henry W. Van Eck
presides over the case. The Debtor tapped Cunningham Chernicoff &
Warshawsky, P.C., as counsel.
BERRY GLOBAL: S&P Affirms 'BB+ ICR, Alters Outlook to Stable
------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' issuer credit rating on Berry
Global Group Inc.
Berry Global Group Inc. affirmed its free cash flow guidance of at
least $800 million for fiscal 2020 in its most recent earnings. S&P
believes Berry's overall business prospects will remain steady over
the next 12-18 months, despite market volatility stemming from the
coronavirus pandemic.
S&P also expect Berry to prioritize debt reduction in the near term
given that it has accumulated a sizable cash balance it is unlikely
to maintain.
The stable outlook reflects S&P's expectation that the combination
of debt reduction and RPC Group Plc acquisition contribution will
result in debt leverage below 5x on a sustained basis.
Berry's business fundamentals remain sound despite market
uncertainty driven by the coronavirus pandemic. Although the
coronavirus has had a dramatic effect on Berry's operating
segments, S&P believes the overall effect on the company's business
prospects will be neutral to only modestly negative. Berry's
Health, Hygiene, and Specialty (HHS) segment has been the greatest
beneficiary of the current market environment. As a producer of
nonwoven materials used in sanitizing wipes, personal protective
equipment (PPE, i.e., face masks, gowns, etc.), and other health
and safety products, HHS had a notable pickup in volumes (3%
organic) during Berry's second fiscal quarter. Berry's Engineered
Materials (EM) segment also saw growth (2% organic) for the quarter
as the spike in demand for packaging films used in food and
e-commerce applications was partially offset by declines in liners
(i.e., garbage bags) and tapes. The company's North American and
International Consumer Packaging (CPNA and CPI, respectively)
segments were the only segments to see flat to slightly negative
organic sales volume for the quarter (CPNA flat, CPI down 2%), with
increased demand for packaging solutions used in cleaning,
beverage, and at-home food applications offset by declines in
foodservices and industrial markets.
S&P said, "We expect many of these demand trends to continue over
the next 12-18 months. We expect HHS to see a sustained pickup in
volume as the demand for nonwoven materials used in PPE and
cleaning wipes is likely to remain. Likewise, EM, CPNA, and CPI
should also see sustained higher volumes for packaging solutions
used in cleaning and food applications as demand for cleaning
products is likely to remain elevated because of concerns over
COVID-19 and we expect consumer demand for at-home food consumption
will persist even as dining restrictions alleviate and the broader
economy opens.
"On the downside, we expect Berry will see a permanent decline in
foodservices packaging solutions (i.e., takeout food and beverage
containers) and liner products. With heighten concerned over
personal health and the growing trend toward remote working, we do
not expect restaurant activity or general food takeout volumes to
return to pre-COVID levels for several years, if at all. Likewise,
we expect the demand for liners used in general commercial
applications (i.e., restaurants, offices buildings, etc.) will also
see a permanent decline for similar reasons.
"Given these dynamics, we expect the overall impact to Berry's
volumes trends to be flat to slightly negative over the next 12-18
months. We believe the notable pickup in HHS, EM and within certain
segments of CPNA and CPI will be largely offset by sustained
falloff in foodservices and liner volumes. We also expect operating
margins to see a notable improvement over the next 12-18 months as
the combination of RPC acquisition synergies ($75 million expected
to be realized in fiscal 2020) favorable resin prices, and the
rolloff of one-time acquisition costs should more than offset
potential margin pressure associated with the drastic change in
product mix. Although Berry has reaffirmed its $150 million RPC
synergy guidance, we now believe potential synergy upside is
somewhat restrained/delayed due to declining organic volumes in CPI
and greater resources being allocated to HHS expansion. We also
believe Berry could potentially exceed its $600 million capital
expenditure guidance for fiscal 2020 as it aggressively builds out
its capacity to support the demand pickup in nonwoven materials.
"Over the long term, we believe Berry is well positioned to weather
volatility and uncertainty given its broad end-market exposure,
particularly to nondiscretionary sectors. This dynamic is also
reflected in Berry reaffirming its 2020 free cash flow guidance of
at least $800 million. We view Berry's guidance affirmation as
evidence of the company's stable business fundamentals in a
challenging macroeconomic environment in which most peers are
withdrawing forward guidance.
"The stable outlook reflects our expectation that Berry's adjusted
debt-to-EBITDA will be in the 4x-5x range by fiscal year-end 2020.
This is based on our expectations that Berry will generate at least
$800 million in free cash flow for fiscal 2020 and that it will use
its sizable cash balance to significantly reduce debt over the next
12 months.
"We could lower the rating if declining sales volumes are greater
than we anticipate, the company faces integration challenges, or
there are delays in synergy realization that pressure the company's
operating performance, such that debt leverage exceeds 5x on a
sustained basis. This could occur if the company's operating
margins decrease by 200 basis points from our base-case scenario.
Although less likely given our belief that management will focus on
deleveraging over the next 12-18 months, we could also lower the
rating if additional acquisition spending or shareholder returns
result in the same sustained level of debt leverage.
"We could raise our ratings if Berry reduces debt leverage such
that its adjusted debt-to-EBITDA ratio is sustained below 4x. This
could occur if the company meets our base-case scenario by fiscal
2021. In addition to any credit metrics improvements, we would
require Berry to explicitly commit to financial policies that
support an investment-grade rating. This includes a commitment to
maintain debt leverage at the aforementioned levels through
different economic cycles and inclusive of potential acquisitions
or shareholder rewards."
BOSTON SURFACE: Seeks to Defer Disclosures Hearing by 120 Days
--------------------------------------------------------------
Boston Surface Railroad Company, Inc., filed a motion asking the
Court to continue for 120 days, the hearing scheduled for May 13,
2020 on the Debtor's Disclosure Statement.
In seeking the extension, the Debtor cited two reasons:
* First, the Plan relies in its first phase on bus commuter
ridership and eventually includes rail commuter ridership. Both of
these sectors have been eviscerated by the COVID-19 restrictions
and it is difficult to adequately predict when ridership will
rebound. The Debtor will have to recalculate its projections and
amend its plan based on new data once travel and work restrictions
are lifted.
* Second, the Debtor is presently exploring other locations in
northern Rhode Island for its station and will need to adjust its
figures accordingly.
Counsel for the Debtor:
Peter N. Tamposi
The Tamposi Law Group, P.C.
159 Main Street
Nashua, NH 03060
Tel: 603-204-5513
E-mail: Peter@thetamposilawgroup.com
About Boston Surface Railroad
Boston Surface Railroad Company Inc. is a private intercity
passenger railroad based in Woonsocket, Rhode Island. BSRC was
granted authority by the United States Surface Transportation Board
in 2016 to operate passenger service on several routes in New
England and has formed a public private partnership with the cities
of Nashua, New Hampshire; Worcester and Lowell, Massachusetts and
Woonsocket, Rhode Island.
Boston Surface Railroad Company filed for Chapter 11 bankruptcy
(Bankr. D.N.H. Case No. 19-11393) on October 6, 2019, listing total
assets of $166,815 and total liabilities of $1,867,955. The
petition was signed by Vincent J. Bono, president. Peter N.
Tamposi, Esq., at The Tamposi Law Group, serves as its bankruptcy
counsel.
BRIDGE STREET: Next Realty Buying Holyoke Property for $350K
------------------------------------------------------------
Judge Elizabeth D. Katz of the U.S. Bankruptcy Court for the
District of Massachusetts authorized Bridge Street Equities, LLC's
sale of the real property located at 510 S. Bridge Street, Holyoke,
Massachusetts to Next Realty, Inc. for $350,000.
The Debtor's counsel is ordered to submit to edk@mab.uscourts.gov a
proposed order in Word format.
About Bridge Street Equities
Bridge Street Equities, LLC, is a limited liability company that
owns a rental apartment building located at 510 S Bridge Street,
Holyoke, Massachusetts. It also conducts related estate business.
Bridge Street Equities filed a voluntary petition seeking relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No.
19-30718) on September 9, 2019. Pursuant to 11 U.S.C. Sec. 1107,
the Debtor is operating its businesses and managing its affairs and
properties as a debtor-in-possession. The Debtor listed under $1
million in both assets and liabilities in its petition.
The Debtor hired the Law Offices of Louis S. Robin, as counsel;
Ligris & Associates, P.C., Sloane and Walsh, LLP, as special
counsel.
BRIGHTVIEW LANDSCAPES: S&P Affirms 'B+' ICR; Outlook Stable
-----------------------------------------------------------
S&P Global Ratings affirmed all of its ratings on commercial
landscaping services provider BrightView Landscape LLC, including
the 'B+' issuer credit rating and the 'BB-' issue-level rating on
the first-lien credit facilities. The '2' recovery rating (70%-90%;
rounded estimate: 70%) is unchanged.
Near-term COVID-19-related revenue headwinds should be partially
offset by resilient core landscaping maintenance and acquired
revenue, such that a return to normalized, historical levels of
snowfall should help return leverage to the 4x-5x range.
BrightView's development services segment (about 25% of fiscal year
2019 revenue) and ancillary landscape enhancement services
(according to management, enhancement makes up 25% of its
maintenance segment, or about 16% of total revenue) will likely
experience delays and softness in demand over the next few quarters
as a result of the COVID-19 pandemic. S&P expects mid-teens percent
declines in development project revenue over the next few quarters,
resuming to growth in fiscal 2021, as shut-down directives and
economic uncertainty delay the completion of large construction and
redesign projects in the company's backlog. Similarly, enhancement
services that supplement the company's core landscape maintenance
segment (ancillary services include both discretionary services
such as seasonal flower planting or mulching, as well as necessary
tree or branch removal and irrigation maintenance services) are at
risk of declines in demand as long as commercial properties are
shut down. While S&P understands few projects have been canceled
thus far, the risk that the pandemic extends longer than our
anticipated midyear peak could increase the risk that work is
forfeited altogether if economic pressure more severely weighs on
BrightView's corporate customers. Hospitality, retail, and sports
and leisure properties account for about 20% of total revenue.
Still, BrightView's core maintenance services (about 57% of fiscal
2019 revenue) should prove relatively stable, given properties'
recurring need for basic landscape care, even through periods of
low use or nonuse. Through April, BrightView noted a strong 97%
retention rate in its core maintenance business. S&P expects
remaining key customer verticals--primarily residential homeowners
associations, corporate and commercial properties, public parks,
and educational and health care facilities--to exhibit relative
stability in landscaping demand over the near term.
S&P said, "As a result, including contributions from acquired
businesses, we currently forecast BrightView's revenue will be down
about 1.5%-2% in fiscal 2020 (ending Sept. 30, 2020). We expect the
company's adjusted leverage will rise to the mid- to low-5x area
over the next couple of quarters as COVID-19-related declines hurt
near-term operating performance. We expect leverage will return to
below 5x within 12 months, and to the mid-4x area by fiscal 2021,
as normalized snowfall levels next winter lift earnings."
BrightView's operating performance is volatile because it relies on
uncertain weather patterns, including snowfall and rainfall, as
evidenced by underperformance in second-quarter 2020.
As of March 30, 2020, BrightView's S&P Global Ratings-adjusted
leverage was 5x, up from about 4.3x a quarter earlier. Unseasonably
weak snowfall in its regions drove the bulk of this increase, as
quarterly snow-removal revenue was down 46% on a year over year
basis. Since BrightView performs its snow-removal services off its
existing fixed cost base, its operating margin for the quarter was
materially affected. Weather-related volatility associated with
high-margin snow-removal services extends to other ancillary
offerings that can vary based on rainfall volumes, weather-related
delays, or hurricane clean-up jobs, among other things.
S&P expects liquidity to remain sound.
S&P said, "Expectations for free cash flow generation of about $75
million-$80 million in 2020, access to ample additional borrowing
capacity, and manageable debt amortization support our assessment
of BrightView's liquidity as adequate. In addition, our view of
management's discipline and commitment to reduce leverage is
unchanged; we believe the company will eventually pay down $60
million of revolving credit facility borrowings that it drew in
response to COVID-19-related market disruption. Given BrightView's
acquisitive growth strategy, we expect it could resume tuck-in
acquisitions toward the end of the current fiscal year, assuming
the pace of economic recovery continues.
"The stable rating outlook reflects our belief that over the next
12 months, fundamental demand for commercial landscaping will
recover from COVID-19-driven delays in development projects and
discretionary ancillary work, such that BrightView's adjusted
leverage will improve to the mid-to-low 4x area by fiscal year-end
2021, as the company benefits from operating margin recovery
following a return toward historical snowfall volumes."
S&P could lower its rating on BrightView over the next 12 months if
it no longer expect leverage will return to below 5x in 2021. A
downgrade could occur if:
-- The COVID-19 pandemic extends past our current expectations;
-- The current recessionary environment persists into 2021,
pressuring BrightView's commercial customers to cancel development
projects or further delay work into 2021;
-- Weaker-than-expected snowfall revenue in the winter causes a
sustained decline in operating margins;
-- Free operating cash flow (FOCF) to debt falls to below 5%;
-- BrightView undertakes debt-funded shareholder rewards that
could be influenced by the controlling owners.
Although unlikely, S&P could consider an upgrade if it believes
leverage will improve to and remain below 4x, most likely as a
combination of debt prepayment, acquisition contributions, and
cost-reduction initiatives. An upgrade would be contingent upon a
reduction in private equity sponsor ownership to below 40% over the
medium term.
CALIFORNIA RESOURCES: Board OKs Revised Variable Pay Program
------------------------------------------------------------
In connection with the unprecedented circumstances affecting the
industry and market volatility resulting from the COVID-19
pandemic, California Resources Corporation reviewed its annual and
long-term incentive programs for its entire workforce to determine
whether those programs appropriately align compensation
opportunities with the Company's current goals and ensure the
stability of the Company's workforce. Following this review, the
Compensation Committee of the Board of Directors of the Company
approved a change in the variable compensation program for all
participating employees of the Company. The previously established
target amount of 2020 variable compensation will not change.
Under the revised program, each participating employee will be
eligible to earn total payments for 2020, at the target level of
performance, equal to that employee's 2020 target variable
compensation established earlier in the year. A portion of each
employee's target opportunity will be provided in the form of
quarterly retention opportunities and a portion in the form of an
incentive program. Under the incentive program, employees will
earn 50% of the annual opportunity at target for the period through
June 30, 2020, and 25% of the annual opportunity on each of
September 30 and Dec. 31, 2020, subject to continued employment and
achievement of performance metrics determined by the Committee.
Amounts earned under the Incentive Program for the third and fourth
quarters may range from 0% to 200% of the target opportunity based
on the level at which metrics are achieved. In the event of a
termination of employment without "cause" or for certain
participants for "good reason", or due to death or disability,
prior to a vesting date, the participant will be entitled to a
prorated portion of the applicable quarterly retention payment and
quarterly incentive payment, generally based on actual performance,
and will forfeit all remaining amounts.
The previously established target amount of 2020 variable
compensation for the Company's named executive officers also will
not change. A portion of the annual target opportunity for each of
the Company's named executive officers was paid immediately,
subject to a requirement generally to repay the full amount, on an
after-tax basis, if the officer voluntarily terminates employment
without good reason or is terminated for cause before the first
anniversary of payment. These payments replaced, and are equal in
amount to, the previously established target amounts of 2020 annual
incentive for such officers. These payments equaled, as a
percentage of base salary (which remains unchanged from each named
executive officer's base salary disclosed in the Company's 2020
Proxy Statement): 110% for the president and chief executive
officer; 100% for the senior executive vice president and chief
financial officer; 85% for the executive vice president, Public
Affairs; 90% for the executive vice president, Operations and
Geoscience; and 85% for the senior executive vice president, chief
administrative officer and general counsel. The remaining annual
target opportunity for each named executive officer will be payable
to the extent earned under the Incentive Program. The annual
target opportunity under the Incentive Program for each named
executive officer equals his 2020 long-term incentive target, which
remains unchanged from the 2019 long-term incentive target
disclosed in the Company's 2020 Proxy Statement.
As a condition to receiving any award, participants will waive
participation in the Company's previously established 2020 annual
incentive program and forfeit all long-term incentives previously
granted in 2020.
About California Resources
California Resources Corporation -- http://www.crc.com/-- is an
oil and natural gas exploration and production company
headquartered in Los Angeles, California. CRC operates its
resource base exclusively within the State of California, applying
complementary and integrated infrastructure to gather, process and
market its production.
California Resources reported a net loss attributable to common
stock of $28 million for the year ended Dec. 31, 2019, compared to
net income attributable to common stock of $328 million for the
year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$6.96 billion in total assets, $709 million in total current
liabilities, $4.87 billion in long-term debt, $146 million in
deferred gain and issuance costs, $720 million in other long-term
liabilities, $802 million in redeemable non-controlling interests,
and total deficit of $296 million.
* * *
In March 2019, S&P Global Ratings affirmed its 'CCC+' issuer credit
rating on California Resources Corp. The affirmation reflects
S&P's expectation that CRC will continue to support its liquidity
by balancing its spending with its cash flow, selling non-core
assets, and potential for joint ventures in 2019 as mentioned in
the Company's fourth quarter conference call.
As reported by the TCR on April 6, 2020, Moody's Investors Service
downgraded California Resources Corp.'s Corporate Family Rating to
Caa3 from Caa1. 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.
CASA DE LAS INVESTMENTS: Voluntary Chapter 11 Case Summary
----------------------------------------------------------
Debtor: Casa De Las Investments, LLC
106 1/2 Judge John Aiso Street, Ste 209
Los Angeles, CA 90012
Chapter 11 Petition Date: May 27, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-14840
Judge: Hon. Vincent P. Zurzolo
Debtor's Counsel: Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Boulevard, 6th Floor
Beverly Hills, CA 90212
Tel: (310) 271-6223
E-mail: michael.berger@bankruptcypower.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Lillie B. Whitehead, CEO and managing
member.
The Debtor stated it has no unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/v61DpD
CCF HOLDINGS: S&P Downgrades ICR to 'CCC'; Outlook Negative
-----------------------------------------------------------
S&P Global Ratings said it lowered its issuer credit rating on CCF
Holdings LLC to 'CCC' from 'CCC+'. The outlook is negative. At the
same time, S&P lowered its issue ratings on CCF's senior secured
notes to 'CCC' from 'CCC+', and lowered its issue ratings on CCF's
PIK notes to 'CC' from 'CCC-'.
The negative outlook reflects S&P's expectation that the economic
impact of COVID-19 will result in reduced originations, increased
provisions for credit loss, and higher charge-offs for CCF. The
company has covenants from its senior secured notes due 2023 and
its borrowings under the Ivy Credit Agreement (the Ivy notes),
including minimum asset coverage requirements and EBITDA tests.
First-quarter 2020 saw a 26% drop in net finance receivables as a
result of the reduced originations and higher charge-offs; a
continued decline in receivables could lead to a breach in asset
coverage covenants or a reduction in borrowing capacity on the Ivy
notes.
S&P said, "CCF is currently negotiating with the lenders to either
amend or waive the covenants, and we believe the negotiations could
be successful over the short term. The Ivy Credit Agreement was
successfully amended on April 24, 2020, reducing asset coverage
requirements to 105% from 125%, raising the advance rate on
eligible receivables, and temporarily suspending the EBITDA test
until Sept. 30, 2020. But we view the relief as only temporary;
asset coverage requirements will increase back to above 120% on
Oct. 1, 2020, and we do not expect the impact of COVID-19 to
subside by then."
Ivy and its affiliates are long-term partners of the company, and
CCF has successfully extended the maturity of the Ivy notes each
year. Current conditions, however, could hurt the company's ability
to continue extending the maturity, and we think CCF's cash
position might not be sufficient to repay the Ivy notes when it
matures on April 30, 2021. Additionally, while the Ivy notes are
nonrecourse to CCF, there are cross default provisions between the
Ivy notes and the senior secured notes.
S&P's negative outlook reflects its expectation that CCF could
breach its covenants or fail to extend the maturity of its Ivy
Credit Agreement over the next 12 months, which could cause the
company to default on its senior secured notes.
S&P could lower the ratings if CCF is unable to revise or waive
existing covenants, or extend the maturity of the Ivy notes past
April 30, 2021.
An upgrade is not likely until after the COVID-19 pandemic and its
resulting economic downturn subside.
-- S&P's simulated default scenario contemplates a payment default
in 2021 as a result of significant operational issues.
-- S&P assumes a reorganization following the default, using an
emergence EBITDA multiple of 4x to value the company.
-- Simulated year of default: 2021
-- EBITDA at emergence: $20.8 million
-- EBITDA multiple: 4.0x
-- Net enterprise value (after 5% administrative costs): $79.0
million
-- Priority claims: $0
-- Collateral value available to senior secured creditors after
priority claims: $79.0 million
-- Total first-lien debt: $119.2 million
--Recovery expectations: 65% ('3')
-- Total second priority debt: $400 million
--Recovery expectations: 0% ('6')
Note: All debt amounts include six months of prepetition interest.
CEL-SCI CORP: Extends Expiration of Series V Warrants to June 25
----------------------------------------------------------------
CEL-SCI Corporation's Series V warrants expire on May 28, 2020 at
an exercise price of $19.75. On May 26, 2020, the Company lowered
the exercise price of its Series V warrants to $13.75 per share and
extended the expiration date of the Series V warrants to June 25,
2020. The Series V warrants were originally issued as part of a
financing on May 28, 2015. For each Series V warrant exercised on
or before June 10, 2020 the former holder of the Series V warrant
will receive one Series XX warrant. Every Series XX warrant will
allow the holder to purchase one share of the Company's common
stock at a price of $18.00 per share at any time on or before Sept.
10, 2020. For each Series V warrant exercised after June 10, 2020
but on or before June 25, 2020 the former holder of the Series V
warrant will receive one Series YY warrant. Every two Series YY
warrants will allow the holder to purchase one share of the
Company's common stock at a price of $20.00 per share at any time
on or before Sept. 25, 2020.
The Series XX and Series YY warrants (as the case may be), as well
as any shares issued upon the exercise of the warrants, will be
issued without registration under the Securities Act of 1933 or any
state securities laws, in reliance on the exemptions provided by
Section 4(a)(2) of the Securities Act and in reliance on similar
exemptions under applicable state laws. Accordingly, if the Series
XX or Series YY warrants are exercised, the shares which will be
issued upon the exercise of the warrants will be restricted
securities and may only be sold pursuant to Rule 144 of the
Securities and Exchange Commission or pursuant to an effective
registration statement under the Securities Act covering the resale
of those shares.
The Company plans to file a registration statement covering the
resale of any shares issuable upon the exercise of the Series XX
and Series YY warrants.
Due to regulations of the Securities and Exchange Commission, only
accredited investors will be entitled to receive the Series XX or
Series YY warrants.
About CEL-SCI Corporation
CEL-SCI -- http://www.cel-sci.com/-- is a clinical-stage
biotechnology company focused on finding the best way to activate
the immune system to fight cancer and infectious diseases. The
Company's lead investigational therapy Multikine is currently in a
pivotal Phase 3 clinical trial involving head and neck cancer, for
which the Company has received Orphan Drug Status from the FDA.
The Company has operations in Vienna, Virginia, and near Baltimore,
Maryland.
CEL-SCI reported a net loss of $22.13 million for the year ended
Sept. 30, 2019, compared to a net loss of $31.84 million for the
year ended Sept. 30, 2018. As of March 31, 2020, the Company had
$34.72 million in total assets, $22.51 million in total
liabilities, and $12.21 million in total stockholders' equity.
BDO USA, LLP, in Potomac, Maryland, the Company's independent
accounting firm, issued a "going concern" qualification in its
report dated Dec. 16, 2019, citing that the Company has suffered
recurring losses from operations and expects to incur substantial
losses for the forseeable future that raise substantial doubt about
its ability to continue as a going concern.
CENTRIC BRANDS: U.S. Trustee Appoints Creditors' Committee
----------------------------------------------------------
The U.S. Trustee for Region 2 on May 27, 2020, appointed a
committee to represent unsecured creditors in the Chapter 11 cases
of Centric Brands Inc. and its affiliates.
The committee members are:
1. Fireman Capital CPF Hudson Co-Invest LP
800 South Street, Suite 600
Waltham, MA 02453
617-421-1724
dan.fireman@firemancapital.com
russell.kazorek@firemancapital.com
Attn: Dan Fireman, Managing Member
2. Li & Fung (Trading) Ltd.
Li Fung Tower 888
Cheung Sha Wan Road
Hong Kong
legalnotices@lifung.com
Attn: Jason Kra
3. Simon Property Group Inc.
225 West Washington Street
Indianapolis, IN 46204
317.263.2346
rtucker@simon.com
Attn: Ronald M. Tucker
Vice President and Bankruptcy Counsel
4. Trade Harvest Industrial Limited
1460 Broadway, 5th Floor
New York, NY 10036
201.400.0205
climas@hangluen.com.hk
sameer@thesourcinghub.com
Attn: Climas Lo, General Manager
5. Tony Chu
3232 Castle Heights Avenue
Los Angeles, CA 90034
213-272-1432
tony.chu@gmail.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Centric Brands Inc.
Centric Brands Inc. designs, produces, merchandises, manages and
markets kidswear, accessories, and men's and women's apparel under
owned, licensed and private label brands. Currently, the company
and its affiliates license over 100 brands, including AllSaints,
BCBG, Buffalo, Calvin Klein, Disney, Frye, Herve Leger, Jessica
Simpson, Joe's, Kate Spade, Kenneth Cole, Marvel, Michael Kors,
Nautica, Nickelodeon, Spyder, Timberland, Tommy Hilfiger, Under
Armour, and Warner Brothers. The companies sell licensed products
through both retail and wholesale channels.
Centric Brands and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D. N.Y. Lead Case No. 20-22637)
on May 18, 2020. As of March 31, 2020, Debtors disclosed
$1,855,722,808 in total assets and $2,014,385,923 in total
liabilities.
Judge Sean H. Lane oversees the cases.
Debtors tapped Ropes & Gray, LLP as bankruptcy counsel; PJT
Partners, Inc. as investment banker; Alvarez & Marsal, LLC as
financial advisor; and Prime Clerk, LLC as notice, claims and
Balloting agent.
CFRA HOLDINGS: U.S. Trustee Appoints Creditors' Committee
---------------------------------------------------------
The U.S. Trustee for Region 21 on May 27, 2020, appointed a
committee to represent unsecured creditors in the Chapter 11 cases
of CFRA Holdings, LLC, CFRA, LLC and CFRA Tri-Cities, LLC.
The committee members are:
1. Interface Security Systems, LLC.
c/o Kevin Murphy, Manager of Credit and Collections
3773 Corporate Center Drive
Earth City, MO 63045
CREDIT.DEPT@INTERFACESYSTEMS.COM
314-595-0100
2. Putnam Mechanical
c/o Michael Pires, Chief Financial Officer
131 Crosslake Park Drive, Suite 202
Mooresville, NC 28117
pires@putnammechanical.com
704-799-3665
980-226-2816 (cell)
3. Performance Food Group, Inc.
c/o Brad Boe, Director of Credit
188 Innverness Dr. W., 7th Floor
Englewood, CO 80112
brad.boe@pfgc.com
303-898-8137
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About CFRA Holdings
CFRA Holdings, LLC, CFRA, LLC and CFRA Tri-Cities, LLC are
privately held companies in the restaurant industry.
On May 6, 2020, CFRA Holdings and its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case
No. 20-03608). At the time of the filing, CFRA Holdings disclosed
assets of between $10 million and $50 million and liabilities of
the same range.
Saul Ewing Arnstein & Lehr, LLP serves as the companies' bankruptcy
counsel. The companies tapped Trinity Capital, a division of
Citizens Capital Markets, Inc., as its investment banker.
CLEAR CHANNEL: Moody's Alters Outlook on B3 CFR to Negative
-----------------------------------------------------------
Moody's Investors Service affirmed Clear Channel Outdoor Holdings,
Inc's B3 Corporate Family Rating and B3-PD Probability of Default
Rating. In addition, the secured bank credit facility and secured
notes were affirmed at B1 and the senior subordinated notes issued
by subsidiary, Clear Channel Worldwide Holdings, Inc. were affirmed
at Caa2. The outlook was changed to negative from stable.
Clear Channel's outlook was changed to negative from stable due to
the impact of the coronavirus outbreak on outdoor advertising
revenue and discretionary consumer spending, which Moody's expects
will substantially reduce revenue, profitability and liquidity
during 2020. Already very high leverage levels of 10.2x as of Q1
2020 will increase significantly in the near term. Despite elevated
leverage levels, liquidity is projected to be adequate over the
next year and the Speculative Grade Liquidity rating remains
unchanged at SGL-3.
Affirmations:
Issuer: Clear Channel Outdoor Holdings, Inc.
Corporate Family Rating, affirmed at B3
Probability of Default Rating, affirmed at B3-PD
Senior Secured Note due 2027, affirmed B1 (LGD2)
Senior Secured Term Loan B due 2026, affirmed B1 (LGD2)
Senior Secured Revolving Credit Facility due 2024, affirmed at B1
(LGD2)
Issuer: Clear Channel Worldwide Holdings, Inc.
Senior Unsecured Note due 2024, affirmed at Caa2 (LGD5)
Outlook Actions:
Issuer: Clear Channel Outdoor Holdings, Inc.
Outlook, changed to Negative from Stable
RATINGS RATIONALE
Clear Channel's B3 CFR reflects the ongoing impact of the
coronavirus outbreak on outdoor advertising spending which will
lead to higher leverage, decreased operating cash flow, and a
deterioration in liquidity over the near term. Moody's expects
Clear Channel's lower margin European business, which includes
street furniture and transit contracts, to decline substantially in
the near term as a result of the pandemic. While Clear Channel has
diversified operations primarily in the U.S. and Europe, there is
significant exposure to larger markets which are more likely to be
adversely impacted by the coronavirus and elevate declines in
operating performance in both divisions in the near term. The
outdoor advertising industry also remains vulnerable to reduced
consumer ad spending, with contract terms generally shorter than in
prior periods. As result, Moody's expects the outdoor industry will
be affected more rapidly than in prior recessions, although
performance should improve quicker than in previous recoveries due
to the lower commitment level and ease of initiating new outdoor
campaigns.
Clear Channel benefits from its market position as one of the
largest outdoor advertising companies in the world with diversified
international operations. The ability to convert traditional static
billboards to digital provides growth opportunities which Moody's
expects will lead to higher revenue and EBITDA with appeal to a
broader range of advertisers after the impact of the pandemic
subsides. Outdoor advertising is not likely to suffer from
disintermediation as other traditional media outlets have and will
benefit from restrictions of the supply of additional billboards
(particularly in the US), which helps support advertising rates and
high asset valuations. The separation of Clear Channel from
iHeartCommunications, Inc. (iHeart) in Q2 2019 was a positive that
allows the company to focus on the long-term growth of the outdoor
business instead of generating liquidity for the prior parent
company.
Clear Channel's leverage increased to 10.2x (excluding Moody's
standard lease adjustment) as of Q1 2020 from 9.1x as of Q4 2019
due to the $150 million revolver draw and lower EBITDA in the
European division during the first quarter. Moody's expects
leverage will increase significantly in the near term as a result
of the pandemic. Expense and capex reductions are projected to
offset only a portion of the economic impact on profitability and
cash flow. Clear Channel sold its ownership position in Clear Media
which is projected to lead to $220 million in net proceeds in Q2
2020 which will help support liquidity during the pandemic.
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 outdoor
advertising industry 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 Clear Channel'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 Clear Channel 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.
Its action reflects the impact on Clear Channel of the breadth and
severity of the shock, and the broad deterioration in credit
quality it has triggered.
A governance impact that Moody's considers in Clear Channel's
credit profile is the change in financial policy. Prior to the
separation with iHeart in Q2 2019, Clear Channel paid material
dividends to its prior parent company that led to reduced free cash
flow and high leverage levels. Moody's expects that Clear Channel
will pursue a more conservative policy going forward, but will be
focused on preserving liquidity in the near term.
The speculative grade liquidity rating of SGL-3 reflects Moody's
expectation that Clear Channel will maintain adequate liquidity in
the near term. Cash on the balance sheet was $372 million at the
end of Q1 2020 following the $150 draw on the $175 million revolver
due 2024 ($20mm of L/Cs outstanding). Liquidity will benefit from
the sale of its position in Clear Media which is expected to
provide $220 million in net cash proceeds in Q2 2020. Free cash
flow has been slightly negative in recent periods and Moody's
expects that FCF will decline substantially in 2020 despite efforts
to cut capex below $110 million in 2020 from $221 million in 2019
and plans to reduce expenses by $100 million in Q2. Additional
sales of non-core assets are possible going forward, especially
outside of North America, which could provide an additional source
of liquidity.
The term loan is covenant lite and the revolver is subject to a
first lien net leverage ratio of 7.6x if the balance of the
revolver is greater than $0 and undrawn letters of credit exceed
$10 million. If the total leverage ratio is equal to or less than
6.5x, the revolver will only be subject to the first lien net
leverage ratio when greater than 35% is drawn. The first lien net
leverage ratio was 5.37x as of Q1 2020. The cushion of compliance
will tighten in the near term and Moody's projects an amendment for
the revolver will be needed in the near term.
The negative outlook reflects Moody's expectation of significant
declines in revenue and EBITDA as a result of the economic impact
of the pandemic which will lead to higher leverage levels and
negative free cash flow in 2020. The European business that has a
higher percentage of lower margin street furniture and transit
revenue located in large markets, is likely to be especially hard
hit in the near term and may take longer to recover than its higher
margin US operations. Moody's projects Clear Channel will have
adequate liquidity over the next twelve months, although additional
sources of liquidity may be needed if the coronavirus impacts the
industry for a prolonged period of time.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating upgrade is not expected in the near term for Clear Channel
due to the impact of the pandemic and very high leverage levels.
However, an upgrade could occur if leverage decreased well below 7x
with a positive free cash flow to debt ratio in the mid-single
digits and an EBITDA minus capex to interest coverage ratio of over
1.5x. An adequate liquidity profile with a sufficient cushion of
compliance with financial covenants would also be required.
The ratings could be downgraded if leverage was sustained above 10x
or if the liquidity position deteriorated such that there was an
increased possibility of default or a distressed exchange. An
EBITDA minus capex to interest coverage ratio sustained below 1x or
inability to obtain an amendment on its financial covenant
applicable to its revolver would also lead to a downgrade.
Clear Channel Outdoor Holdings, Inc., headquartered in San Antonio,
Texas, is a leading global outdoor advertising company that
generates LTM revenues of approximately $2.7 billion as of Q1 2020.
iHeartCommunications, Inc. previously owned 89% of CCO and former
iHeart debtholders own a material portion of CCO's equity following
iHeart's exit from bankruptcy in Q2 2019.
The principal methodology used in these ratings was Media Industry
published in June 2017.
CONVERGEONE HOLDINGS: Moody's Alters Outlook on B3 CFR to Negative
------------------------------------------------------------------
Moody's Investors Service affirmed ConvergeOne Holdings, Inc.'s B3
corporate family rating, B3-PD probability of default rating, the
B2 rating on the borrower's senior secured first lien credit
facility, and the Caa2 rating on its senior secured second lien
term loan. The outlook was revised to negative from stable. The
outlook revision reflects Moody's expectation of a meaningful
near-term contraction in ConvergeOne's operating performance
following the coronavirus outbreak as resulting macroeconomic
weakness fuels a considerable projected decrease in technology
spending throughout the company's customer base in 2020.
Moody's affirmed the following ratings:
- Corporate Family Rating- B3
- Probability of Default Rating- B3-PD
- Senior Secured First Lien Term Loan due 2026, Assigned B2
(LGD3)
- Senior Secured Second Lien Term Loan due 2027, Assigned Caa2
(LGD5)
- Outlook revised to negative from stable
RATINGS RATIONALE
ConvergeOne B3 CFR is principally constrained by the company's
elevated financial leverage (Moody's adjusted) of over 7x trailing
total debt/EBITDA as of March 31, 2020 that Moody's believes could
approach 9x by the end of 2020. The issuer's credit quality is also
negatively impacted by ConvergeOne's considerable revenue reliance
on key vendor relationships with Cisco Systems, Inc. and Avaya,
Inc. which together comprise over 50% of total product sales (25%
of total revenue). Moreover, ConvergeOne's concentrated private
equity ownership by affiliates of CVC Capital Partners presents
uncertainties relating to corporate governance and financial
strategy. While not anticipated in the near term, the risk of
incremental debt-financed acquisitions, which have been integral to
ConvergeOne's expansion efforts, could constrain deleveraging
efforts.
The rapid spread of the coronavirus 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. Additionally, Moody's regards the coronavirus
outbreak as a social risk under its ESG framework, given the
substantial credit implications on public health and safety which
have led to operational disruptions and macroeconomic challenges
throughout ConvergeOne's client base and consequently weigh on the
company's revenue prospects over the near term.
These risks are somewhat mitigated by the company's solid market
position as a provider of integrated communications solutions and
managed services to a diverse base of large enterprise customers.
ConvergeOne's credit profile is also supported by the company's
historically predictable revenue stream with approximately 35%-40%
of the top-line stemming from recurring maintenance and managed
services sales and modest capital expenditure requirements which
should support positive, albeit modest, free cash flow generation.
Despite Moody's expectations for negligible free cash flow
generation in 2020, ConvergeOne's adequate liquidity is principally
supported by a $44.3 million cash balance as of March 31, 2020. The
company's liquidity position is further bolstered by availability
of approximately $70 million under its $250 million asset-based
revolving credit facility (unrated). However, Moody's believes
there is a risk that the company's liquidity profile could
deteriorate if ConvergeOne's days sales outstanding become
materially extended. While the company's term loans are not subject
to financial covenants, the revolving credit facility has a
springing covenant based on a minimum fixed charge coverage ratio
of 1x that ConvergeOne should be comfortably in compliance with
during this period.
The negative ratings outlook reflects Moody's expectation that
ConvergeOne's revenues and EBITDA are likely to decrease
meaningfully in 2020. The outlook could be revised to stable if
ConvergeOne improves its liquidity profile and the company realizes
stronger than expected operating performance trends amidst a
potential recovery in technology spending.
FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
While unlikely over the near term, the ratings could be upgraded if
ConvergeOne continues to diversify its supplier base, meaningfully
increases scale while maintaining profit margins, and reduces
adjusted debt to EBITDA to below 6x on a sustained basis.
The ratings could be downgraded if revenue contracts materially
from current levels, sustained free cash flow deficits materialize,
or if the company adopts more aggressive financial policies,
leading to increased debt leverage or expectations for diminished
liquidity.
ConvergeOne, owned by affiliates of CVC following an LBO in late
2018, is a provider of integrated communications solutions and
managed services. Moody's expects the company to generate sales of
approximately $1.3 billion in 2020.
CREATIVE REALITIES: Board OKs Stock Options for CEO and CFO
-----------------------------------------------------------
The Board of Directors of Creative Realities, Inc., approved
executive stock options and a bonus plan based on certain retention
and performance metrics to Richard Mills, director and chief
executive officer; and Will Logan, chief financial officer.
Options
Messrs. Mills and Logan received ten-year options to purchase
480,000 and 240,000 shares of common stock, respectively, which
vest in three equal installments on each anniversary of the
issuance.
Messrs. Mills and Logan also received ten-year options to purchase
480,000 and 240,000 shares of common stock, respectively, which
vest in equal installments over a three-year period subject to
satisfying the Company revenue target and EBITDA (earnings before
interest, taxes, depreciation and amortization) target for the
applicable year. In each of calendar years 2020, 2021 and 2022,
one-third of the total shares may vest (if the revenue and EBITDA
targets are met), and the shares that are subject to vesting each
year are allocated equally to each of the revenue and EBITDA
targets for such year.
These options includes a catch-up provision, where any options that
did not vest during a prior year due to the Company's failure to
meet a prior revenue or EBITDA target may vest in a subsequent
vesting year if the revenue or EBITDA target, as applicable, is met
in the future year. The revenue and EBITDA targets for the
following three years are as follows:
Calendar Year Revenue Target EBITDA Target
------------- -------------- -------------
2020 $32 million $2.2 million
2021 $35 million $3.1 million
2022 $38 million $3.5 million
The exercise price of the foregoing options is $2.53 per share, the
closing price of the Company's common stock on the date of
issuance. The options are issued from the Company's 2014 Stock
Incentive Plan.
Bonus Plan
The Bonus Plan provides that Messrs. Mills and Logan will receive a
cash bonus of 25% and 12.5%, respectively, of their annual salary
if the Company achieves any revenue target or EBITDA target above
in the calendar years 2020-2022. Each executive may receive two
bonus payments if both the revenue target and EBITDA target in a
calendar year is obtained. For calendar year 2020, Messrs. Mills
and Logan are eligible to receive a bonus of $165,000 and $62,250,
respectively, if the revenue target and EBITDA target is obtained.
About Creative Realities
Creative Realities, Inc. -- http://www.cri.com/-- is a Minnesota
corporation that provides innovative digital marketing technology
and solutions to retail companies, individual retail brands,
enterprises and organizations throughout the United States and in
certain international markets. The Company has expertise in a
broad range of existing and emerging digital marketing
technologies, as well as the related media management and
distribution software platforms and networks, device management,
product management, customized software service layers, systems,
experiences, workflows, and integrated solutions.
Creative Realities reported net income of $1.04 million for the
year ended Dec. 31, 2019, following a net loss of $10.62 million
for the year ended Dec. 31, 2018. As of March 31, 2020, the
Company had $21.79 million in total assets, $16.42 million in total
liabilities, and $5.37 million in total shareholders' equity.
Management believes that, based on (i) the extension of the
maturity date on the Company's term loan and revolving loans to
June 30, 2021, (ii) its receipt of $1,551,800 of funding through
the Payroll Protection Program on April 27, 2020, (iii) its
operational forecast through 2021, and (iv) support from Slipstream
through June 30, 2021, the Company can continue as a going concern
through at least May 15, 2021. However, given the Company's
history of net losses, cash used in operating activities and
working capital deficit, each of which continued as of and for the
three months ended March 31, 2020, the Company can provide no
assurance that its ongoing operational efforts will be successful,
particularly in consideration of the business interruptions and
uncertainty generated as a result of the COVID-19 pandemic which
could have a material adverse effect on its results of operations
and cash flows.
Creative Realities received a letter from The Nasdaq Stock Market
LLC on April 28, 2020, advising the Company that for 30 consecutive
trading days preceding the date of the Notice, the bid price of the
Company's common stock had closed below the $1.00 per share minimum
required for continued listing on The Nasdaq Capital Market
pursuant to Nasdaq Listing Rule 5550(a)(2).
DARRELL MILLSAPS: $90K Private Sale of Statesville Property Okayed
------------------------------------------------------------------
Judge Laura T. Beyer of the U.S. Bankruptcy Court for the Western
District of North Carolina authorized Darrell Millsaps Trucking,
Inc.'s private sale of the real property located at 1599
Turnersburg Highway, Statesville, Iredell County, North Carolina,
Parcel No. 4757895316, to Jacqeline Stevenson for $90,000, pursuant
to their Offer to Purchase and Contract.
The sale will result in a transfer of the Collateral free and clear
of all liens and encumbrances.
FNB will be entitled to receive net proceeds from the sale, after
payment of the normal and customary costs of sale are paid.
The amounts received by FNB will be credited as a reduction of its
claim amount against the Debtor.
The Order will be effective immediately upon entry of such Order
and that the 14-day stay does not apply.
About Darrell Millsaps Trucking
Darrell Millsaps Trucking, Inc. sought Chapter 11 protection
(Bankr. W.D. N.C. Case No. 20-50103) on March 6, 2020. The Debtor
tapped Melanie D. Johnson Raubach, Esq., at Hamilton Stephens +
Martin, PLLC as counsel.
DIMORA BRANDS: S&P Alters Outlook to Negative, Affirms 'B' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Dallas-based Dimora
Brands to negative from stable and affirmed its 'B' issuer credit
rating on the company. S&P also affirmed its 'B' issue-level rating
on the company's $345 million senior secured first-lien credit
facilities and its 'CCC+' rating on its $50 million second-lien
term loan.
S&P said, "We believe the current recession has likely reduced U.S.
economic activity by 11.8% peak to trough, roughly three times the
decline seen during the Great Recession in one-third the time. S&P
Global forecasts the U.S. economy will contract 5.3% this
year--including a historic (annualized) decline of almost 35% in
the second quarter. Social distancing has sharply reduced consumer
spending, and we expect it to decline by 5.5% in 2020. The
unemployment rate will likely surge to 8.8% in this year from 3.7%
in 2019. Further, we believe the recovery will be gradual as fears
linger and social distancing endures, but we expect the economy
will at least partly reopen in the third quarter.
"In the current economic environment, we believe Dimora's leverage
will increase to the mid-6x area by the end of 2020 as both sales
and margins contract. We expect Dimora's revenue to decline at
least 5% and EBITDA to decline approximately 10% in 2020 as a
result of curtailed demand. Due in part to raw material deflation
and cost mitigation efforts, we expect the company to be able to
generate operating cash flow of about $25 million-$30 million in
2020." Its free cash flow conversion is also aided by its light
annual capital spending, expected to be approximately $5 million.
Dimora's products are discretionary in nature and will see
depressed demand due to lower consumer sentiment and spending
levels. Dimora's decorative and functional hardware products -
knobs, pulls, and slides - are closely tied to discretionary
consumer spending. S&P said, "We believe the current economic
slowdown will reduce discretionary repair and remodel (R&R)
activity, particularly in large ticket renovations such as kitchen
replacements, which drives demand for Dimora's knobs, pulls, and
other cabinetry accessories. Dimora derives approximately 75% of
its revenue from R&R activity. We also expect a decline in new
construction activity--the remaining portion of Dimora's sales--as
foot traffic is reduced due to social distancing measures."
Dimora has historically exhibited less volatility than building
materials peers. The majority of Dimora's sales are derived from
R&R spending, which has historically led to less earnings
volatility than building products companies. Dimora's products
represent a small proportion of a renovation budget (typical orders
are less than $250), making them an inexpensive but effective
renovation potentially less affected that larger-ticket upgrades.
In addition, the relatively low price of its products have proven
to be price inelastic to a degree, helping the company offset a
variety of cost increases in the past, including tariffs and wire
rod.
The negative outlook reflects the heightened risk of sustained
elevated leverage and lower interest coverage as a result of
reduced sales and EBITDA expectations over the next 12 months.
These conditions are predicated on anticipated lower consumer
confidence, construction activity, and discretionary spending over
the next year at a minimum, more so if the depth or duration of the
impending recession exceeded our expectations.
S&P said, "We could lower the rating on Dimora if leverage rose and
remained above 7x or if interest coverage approached 1.5x for an
extended period of time, which could occur if sales or adjusted
EBITDA fell by more than 15% compared with 2019. A more aggressive
recession in terms of either depth or length could lead to such
scenarios and a downgrade.
"We could revise the outlook on Dimora to stable if we believed
leverage were to consistently remain below 6x. Incorporated into
the outlook revision would be our assumption that Dimora's
financial sponsor owner would be committed to maintaining such
leverage and would refrain from leveraging transactions. We
estimate leverage could attain such a level if Dimora's revenue
increased in the mid-single digits or 2020 adjusted EBITDA were on
par with 2019 levels."
DOUGLAS DYNAMICS: Moody's Rates New $250MM Sr. Sec. Term Loan 'B2'
------------------------------------------------------------------
Moody's Investors Service affirmed all ratings of Douglas Dynamics,
L.L.C.'s, including the corporate family rating at B1, Probability
of Default Rating at B1-PD and senior secured at B2 and assigned a
B2 rating to the new $250 million senior secured term loan due
2026. The outlook remains negative.
The new $250 million senior secured term loan will be used to
refinance Douglas Dynamics' existing senior secured term loan and
reduce funded amounts under its asset-based revolving credit
facility. Also, Douglas Dynamics intends to amend and extend its
$100 million asset-based revolving credit facility to a new
maturity in 2023.
The following rating actions were taken:
Assignments:
Issuer: Douglas Dynamics, L.L.C.
Senior Secured Bank Credit Facility, Assigned B2 (LGD4)
Affirmations:
Issuer: Douglas Dynamics, L.L.C.
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Senior Secured Bank Credit Facility, Affirmed B2 (LGD4)
Outlook Actions:
Issuer: Douglas Dynamics, L.L.C.
Outlook, Remains Negative
RATINGS RATIONALE
Douglas Dynamics' ratings reflect its strong position in the niche
market of snow and ice control equipment, solid EBITA margins in
the mid-teens range and consistent track record of free cash flow
even with the underlying volatility of its business The company's
scale is relatively modest with a narrow product focus that is
heavily tied to the unpredictability of yearly snowfall levels in
North America. Back-to-back winters of low snowfall across the US
will decrease replacement demand for the company's higher margin
Work Truck Attachment products in 2020. Further, the coronavirus
outbreak has disrupted Douglas Dynamics' manufacturing operations
and will significantly impact the company's preseason buying
activity during the first half of 2020.
Some of this demand may be delayed into the back half of 2020 but
uncertainty remains as to the level of orders given the lower usage
of equipment the past two winters. Another headwind facing Douglas
Dynamics is the ongoing supply shortage of medium-duty chassis,
which will likely continue through 2020 as the coronavirus causes
further disruption to the supply chain.
Douglas Dynamics' key credit metrics, including margins, leverage
and cash flow, will weaken in 2020 following strong 2019 results.
Moody's expects the company's EBITA margin to contract to the
low-teens range during 2020, which is well-positioned compared to
similarly rated peers, but below recent EBITA margins of about 17%.
Moody's expects margins to return to the mid-teens range during
2021 as production disruptions related to the coronavirus
dissipate. As a result of lower earnings in 2020, the company's
leverage profile is expected to increase to above 4x debt/EBITDA in
2020 before improving to near 3x by the end of 2021 assuming
snowfall conditions normalize.
The negative outlook reflects the potential for certain headwinds
facing Douglas Dynamics, including significantly lower replacement
demand following consecutive years of low snowfall, supply chain
constraints and potential cutbacks in municipal government spending
in 2021 due to the coronavirus, could have a greater financial
impact on the company's credit profile than currently anticipated.
As a niche supplier, Moody's views environmental risk, specifically
carbon transition risk which is high for the broader sector, to be
relatively immaterial to Douglas Dynamics given its product focus
on work truck attachments. In addition, governance risk is low as
the company has demonstrated a conservative financial policy over
the last several years supportive of both debt and equity holders
as well as a commitment to maintain a low-leveraged balance sheet
below 3x debt/EBITDA.
Douglas Dynamics' Speculative Grade Liquidity rating of SGL-3
reflects Moody's view that the company will maintain adequate
liquidity through 2021. Following strong free cash flow generation
in 2019 of $41 million (of which the company applied a majority
toward debt reduction), Moody's expects free cash flow generation
(inclusive of dividends) to weaken in 2020, but remain modestly
positive as demand drops and challenges in the supply of chassis
persist. Douglas Dynamics' seasonal liquidity needs are supported
by availability under its $100 million asset-based revolving credit
facility that is to be extended to a 2023 maturity. The proposed
refinancing of the company's existing secured term loan due 2021
with a new $250 million secured term loan due 2026 will provide
additional liquidity through a pay down of the company's ABL
borrowings.
FACTORS THAT COULD LEAD TO A DOWNGRADE OR UPGRADE OF THE RATINGS
The ratings could be upgraded if Douglas Dynamics sustains very
little balance sheet debt and maintains significant liquidity
cushions to counter the company's small scale and weather-dependent
seasonal demand.
The ratings could be downgraded if Moody's expects that debt/EBITDA
leverage will be sustained above 4x through 2021 or the company's
liquidity position deteriorates
The principal methodology used in these ratings was Automotive
Supplier Methodology published in January 2020.
Douglas Dynamics is a manufacturer and up-fitter of commercial work
truck attachments and equipment. The company's products include
snowplows, sand and salt spreaders as well as attachments and
storage solutions for commercial work vehicles. Headquartered in
Milwaukee, Wisconsin, the company generated approximately $547
million of revenue for the twelve months ended March 31, 2020.
EQUINOX HOLDINGS: S&P Raises ICR to 'CCC'; Outlook Negative
-----------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on New
York-based fitness club operator Equinox Holdings Inc. to 'CCC'
from 'SD' (selective default) after the company closed on an
amendment to its partial guarantee on the credit facility of its
affiliate company SoulCycle Inc. that the rating agency had viewed
as tantamount to a default.
The amendment allowed Equinox to defer its required repurchase of
the affiliate's debt to February 2021.
S&P is affirming its 'CCC+' issue-level rating on Equinox's senior
secured first-lien facility and its 'CC' issue-level rating on the
company's senior secured second-lien facility. The respective '2'
and '6' recovery ratings are unchanged.
"The 'CCC' rating reflects our assumption that Equinox will
experience a spike in leverage and a significant cash burn rate
while gyms are closed and possibly after they reopen, which could
exhaust a substantial portion or all of the company's liquidity and
possibly result in a default over the next six to 12 months. We
believe Equinox will experience a significant spike in
lease-adjusted leverage in 2020, potentially above 15x. Our base
case assumes no revenue while gyms are closed and a recovery
beginning in third-quarter 2020. In our base case, we estimate
revenue could ramp up to 50% of historical revenue in third-quarter
2020, and it could improve further in the fourth quarter," S&P
said.
"We have assumed similar levels of cash on hand to Equinox's
first-quarter 2020 financials of $183 million and $140 million
drawn on the company's $150 million revolver. This level of cash
may be less than adequate to cover the anticipated cash burn over
the next few months, even if clubs reopen in the third quarter and
especially under a prolonged period of club closures. We have
assumed anticipated cash needs include primarily debt service and
significantly reduced labor costs. Depending on how quickly revenue
recovers, Equinox may continue to burn cash for several months
after clubs reopen while it brings its employees back from
furloughs, pays vendors to remain current, and brings facilities
back online," the rating agency said.
S&P believes closures ending early in the second half of 2020 have
left the company vulnerable to a near-term default unless it
completes an additional liquidity transaction. It believes that
similar to other operators in the fitness club industry, Equinox
has nearly completely scaled back growth capital expenditures and
furloughed employees to slow cash burn. S&P also believes that
Equinox is likely to negotiate with its landlords for temporary
rent relief, which the rating agency has assumed for the months of
April through June in its updated base-case assumptions. Equinox's
partial guarantee for its affiliate company SoulCycle may present
an additional use of Equinox's liquidity over time, as the
guarantee requires Equinox to purchase the higher of $72.8 million
of SoulCycle's debt or the amount necessary to reduce SoulCycle's
leverage to 5x in any quarter ending before the Feb. 15, 2021,
payment due date. Additionally, Equinox has a net-debt-to-EBITDA
covenant that is measured when the revolver is more than 35% drawn.
While the company was in compliance as of March 31, 2020, S&P
believes Equinox will likely breach this covenant in the June
quarter and require a waiver from lenders.
The recession and potential consumer behavior changes may compound
financial risk and result in heightened leverage through 2021 and
potentially beyond. In addition to the impact of the COVID-19
pandemic and gym closures, the anticipated recession may limit
Equinox's ability to generate excess cash flow in late 2020 and
possibly in 2021 to begin reducing leverage. Given uncertainty
related to the depth and longevity of restrictions and closures of
out-of-home consumer options, as well as of the U.S. recession, the
range of outcomes vary widely for revenue, EBITDA, leverage, and
liquidity in coming months and this year. It is also possible that
the pace of improvement in membership and revenue under S&P's
base-case recovery scenario may be challenged if members have to
adapt to continued social distancing measures, or if they resist
returning to the gym for a prolonged period in the absence of a
vaccine or therapy.
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
The negative outlook reflects the possibility that S&P could
downgrade Equinox if the rating agency believes a near-term
conventional default, restructuring, or transaction that it views
as tantamount to a default becomes a near certainty.
"We would likely lower our rating if liquidity deteriorates or if
we believe a default or debt restructuring of some form is likely
within the next six months," S&P said.
"We could raise our rating if we believe our midyear containment
base case results in a recovery that enables Equinox to ramp up
revenue at its gyms toward profitability and positive cash flow in
a manner that allows it to begin reducing debt. We would also need
to have confidence that Equinox can reduce its leverage to sustain
the capital structure," the rating agency said.
EXTRACTION OIL: S&P Withdraws 'D' Issuer Credit Rating
------------------------------------------------------
S&P Global Ratings withdrew all of its ratings on Extraction Oil &
Gas Inc., including the 'D' issuer credit rating, at the company's
request.
FORESIGHT ENERGY: Residco Objects to Disclosure Statement
---------------------------------------------------------
RLH1 LLC and ALF P-I, Inc. (jointly Residco), affiliates of
Residual Based Finance Corporation, object to the Disclosure
Statement for Joint Chapter 11 Plan of Reorganization of Foresight
Energy LP and Its Affiliates.
Residco objects to the Disclosure Statement, as it does not contain
adequate information to permit it, as a creditor and
party-in-interest, to make an informed judgment about the Plan as
required by section 1125 of the Bankruptcy Code.
As proposed, the Disclosure Statement and Plan provide Residco with
no opportunity to object and be heard with respect to the ultimate
treatment of the Lease under the Plan.
The Disclosure Statement is also deficient in that it includes
neither Proposed Cure Amounts for any Executory Contracts, nor a
mechanism by which the Debtors will notify Executory Contract
counterparties of Proposed Cure Amounts.
To the extent an order confirming the Plan approves the assumption
of the Lease, the Debtors must be required to provide Residco with
a Proposed Cure Amount for the Lease, and an opportunity to object
thereto.
The Disclosure Statement cannot be approved in its current form as
it contains inadequate information with respect to the Proposed
Cure Amounts for Executory Contracts, including the Lease, that may
be assumed pursuant to the order confirming the Plan.
A full-text copy of Residco's objection to Disclosure Statement
dated May 7, 2020, is available at https://tinyurl.com/y8w7fp36
from PacerMonitor at no charge.
Counsel for RLH1 LLC, and ALF:
CONNOLLY GALLAGHER LLP
Jeffrey C. Wisler
Kelly M. Conlan
1201 North Market Street, 20th Floor
Wilmington, Delaware 19801
Telephone: (302) 757-7300
Facsimile: (302) 658-0380
E-mail: jwisler@connollygallagher.com
E-mail: kconlan@connollygallagher.com
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. They also own a barge-loading
river terminal on the Ohio River. From this strategic position,
they 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 Debtors were estimated to have $1 billion to $10 billion in
assets and liabilities.
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.
FURIE OPERATING: June 11 Plan Confirmation Hearing Set
------------------------------------------------------
Furie Operating Alaska, LLC and its affiliates filed with the U.S.
Bankruptcy Court for the District of Delaware a motion for entry of
an order approving the Disclosure Statement.
On May 8, 2020, Judge Laurie Selber Silverstein granted the motion
and ordered that:
* The Disclosure Statement is approved as containing adequate
information within the meaning of section 1125(a) of the Bankruptcy
Code, and the Debtors are authorized to distribute the Disclosure
Statement and the Solicitation Packages in order to solicit votes
on, and pursue confirmation of, the Plan, consistent with this
Order.
* June 11, 2020, at 11:00 a.m. is the Confirmation Hearing.
* June 5, 2020, at 4:00 p.m. is the deadline to File and serve
objections to confirmation of the Plan.
* June 8, 2020, at 4:00 p.m. is the deadline for the Debtors
and/or other parties supporting Confirmation of the Plan to file
and serve a confirmation brief and replies to Confirmation
Objections.
* May 15, 2020, is the deadline for objections to Claims for
voting purposes only.
* June 5, 2020, at 4:00 p.m. is the last date and time by which
Ballots accepting or rejecting the Plan must be received by Prime
Clerk.
A copy of the order dated May 8, 2020, is available at
https://tinyurl.com/ybvbb56l from PacerMonitor at no charge.
About Furie Operating Alaska
Headquartered in Anchorage Alaska, Furie Operating Alaska LLC and
its affiliates operate as independent energy companies primarily
focused on the acquisition, exploration, production, and
development of offshore oil and gas properties in the State of
Alaska's Cook Inlet region. They hold a majority working interest
in 35 competitive oil and gas leases in the Cook Inlet.
Additionally, they wholly own and operate an offshore production
platform in the middle of the Cook Inlet to extract natural gas
under the oil and gas leases.
Furie Operating Alaska and its affiliates, Cornucopia Oil & Gas
Company LLC, and Corsair Oil & Gas LLC, filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Case Nos. 19-11781 to 19-11783) on Aug. 9, 2019. In the petitions
signed by Scott M. Pinsonnault, interim COO, the Debtors were
estimated to have $10 million to $50 million in assets and $100
million to $500 million in liabilities.
The Debtors tapped Womble Bond Dickinson (US) LLP and McDermott
Will & Emery LLP as legal counsel; Seaport Global Securities LLC as
investment banker; and Ankura Consulting Group as financial
advisor. Prime Clerk LLC is the claims and noticing agent, and
administrative advisor.
GOOD NOODLES: Liquidating Plan Confirmed by Judge
-------------------------------------------------
Judge Cecelia G. Morris has entered an order approving the
Disclosure Statement and confirming the Chapter 11 Plan of
Liquidation filed by Debtor Good Noodles Inc. d/b/a Sfoglini LLC.
The Plan satisfies the requirements of Sections 1122 and 1123 of
the Bankruptcy Code and the classification of Claims and Interests
are reasonable, proper and not impermissibly discriminatory with
respect to each Class of Impaired Claims that has not voted to
accept or reject the Plan.
The Debtor is authorized and directed to (a) file quarterly
disbursement reports for each quarter the Chapter 11 Case remains
open, (b) pay United States Trustee fees pursuant to 28 U.S.C. Sec.
1930 and 31 U.S.C. Sec. 3717 on all disbursements, including plan
payments and disbursements in and outside the ordinary course of
the Debtor's business until the Chapter 11 case is closed, (c) file
quarterly post-Confirmation reports, and (d) file a request for a
final decree closing the Chapter 11 case upon substantial
consummation of the Plan. The aforesaid fees will be payable in
accordance with 28 U.S.C. Sec. 1930 and 31 U.S.C. Sec. 3717.
A copy of the order dated May 7, 2020, is available at
https://tinyurl.com/y76mmxcr from PacerMonitor at no charge.
About Good Noodles
Good Noodles Inc., d/b/a Sfoglini LLC, is a producer of classic
Italian style pasta made with organic grains. Good Noodles sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 19-36441) in
Poughkeepsie, New York, on Sept. 4, 2019. Judge Cecelia G. Morris
administers the Debtor's case. In the petition signed by Scott
Ketchum, president, the Debtor was estimated to have $500,000 to $1
million in assets, and $1 million to $10 million in liabilities.
KIRBY AISNER & CURLEY LLP is the Debtor's counsel.
GREEN COUNTRY ENERGY: S&P Lowers ICR To 'CCC+', Outlook Negative
----------------------------------------------------------------
S&P Global Ratings has revised its financial projections for Green
Country Energy LLC (GCE) to reflect increased maintenance spending,
resulting in a roughly $8 million reduction in cash trapped to make
the 2022 mandatory redemption payment. This results in a roughly
$7.5 million shortfall, even after the debt service reserve--which
S&P had previously forecast would have a narrow buffer of
$620,000--is exhausted.
Since S&P does not assume in its base case the project will
re-contract, it is now forecasting a default in February 2022, when
the mandatory redemption is due. As a result, S&P is lowering its
issue-level rating on GCE's $319 million senior secured notes to
'CCC+' from 'B', reflecting its view that the project is currently
vulnerable to nonpayment and that the project depends upon
favorable conditions to meet its bullet payment. The recovery
rating is unchanged at '1' (90%-100%; rounded estimate: 95%),
indicating S&P's expectation for very high recovery in a default.
GCE is a 795-megawatt (MW) natural-gas-fired combined cycle power
plant in Jenks, Okla. The project began operating in February 2002,
and it has a 20-year tolling agreement with Exelon Generation Co.
LLC (Exelon) ending February 2022. The project and its holding
company are bankruptcy-remote from parent J-Power USA Generation
L.P., a joint venture between John Hancock Life Insurance Co. and
J-Power North America Holdings Co. Ltd.
"Under our revised base-case forecast, we now expect even less cash
trapped, resulting in full exhaustion of the DSR. Previously, we
had forecast a $626,000 buffer in the untapped about $17 million
DSR. We are now forecasting a shortfall of about $7.54 million,
after the cash trap account and DSR are exhausted, to make the
early redemption payment. If a redemption payment deficit occurred
without an alternate liquidity source, the project would default.
Although our forecast differs from management's, GCE now expects a
shortage of about $4 million, compared to a buffer of $1.38 million
previously," S&P said.
The decline in the projected cash trap account (to $30.4 million
from $38.6 million) is due to higher major maintenance and
operating expenses in 2019-2021. The unexpected rotor wheel upgrade
in 2019 was partly paid with funds in the major maintenance reserve
(MMR), which was refunded using money that would otherwise have
been directed toward the cash trap in 2020.
S&P expects operations and maintenance (O&M) expenses will be
higher in 2020 because of increased maintenance from greater wear
on the units, resulting from high dispatch factors and the age of
the plant. The cash shortfall would have been higher if not for the
$6.3 million of retained cash flow management projects from the
November 2021-February 2022 period and which was not previously
incorporated in the cash trap estimates. The higher MMR funding
resulted in an S&P Global Ratings-calculated debt service coverage
ratio (DSCR) of 0.96x in 2019, down from the rating agency's
forecast of 1.24x. Management's DSCR, which excludes funding of the
MMR and management fees, was 1.48x, down from its budget of 1.56x.
For 2020, S&P is forecasting a DSCR of 1.17x, compared to
management's 1.51x, given the difference in how the rating agency
treats MMR payments and management fees, as well as other
differences in its forecast.
"We now rate the project as 'CCC+' because it is vulnerable to a
default. Our minimum base-case coverage of 0.13x in 2022 is
unchanged because we have not revised our projection of operational
cash flows for January and February. Thus, base-case performance
remains 'b-', and the downside performance remains 'b'. However,
because we are forecasting a default, the rating is consistent with
a 'CCC+' credit profile. At this rating level, the 'CCC+' rating is
no longer based on project finance criteria," S&P said.
A project rated 'CCC+' is vulnerable to nonpayment, and it depends
upon favorable business, financial, and economic conditions to meet
its debt payments. GCE is vulnerable to nonpayment and depends on
either a new contract (which S&P views as unlikely but possible),
equity, or outside liquidity to avoid default. The 'CCC+' rating
for this project is driven by its unsustainable financial
commitments, rather than by the probability of default. This is
because the parent has incentives to cover the shortfall rather
than lose the asset to lenders over a relatively small sum. The
sponsors are investing in maintenance in excess of what would be
required to operate the plant to the maturity date. In S&P's view,
there is at least 10 years of additional life remaining, suggesting
that economic incentives could be sufficient for the sponsors to
avoid a default.
Project sponsor J-Power USA has a $25 million working capital
facility at its disposal to cover any mandatory redemption
shortfall. However, S&P does not assume any support in its forecast
because there is no explicit obligation to support the project.
"Our re-contracting assumption is still pivotal. If it occurs, the
mandatory redemption would not apply, and the ratings would likely
be much stronger. But an early redemption requirement--which under
the project's bond indenture was triggered in February 2017 when
the project's power contract was not renewed--in the bond indenture
effectively forces the project to generate enough cash flows to pay
for two years of annual debt service, on top of the principal and
interest due," S&P said.
The negative outlook reflects S&P's view that in the absence of a
contract to cover 2022-2024, or another mitigating factor that the
rating agency would consider certain, the project is vulnerable to
default.
"We could lower the rating by one notch within the next nine to 12
months if there is no contract or another mitigating factor in
place to ensure that all of the outstanding notes will be repaid.
We could also lower the rating if we don't think that a reasonable
recovery is possible. We could downgrade the project sooner if we
forecast a payment default within 12 months, which though unlikely
today, could occur if cash flow is significantly reduced by
material forced outages, unanticipated maintenance or repairs that
reduce capacity payments, increased operating expenses, or higher
major maintenance funding requirements," S&P said.
"Because we do not expect a new contract in the next year, we are
unlikely to revise the outlook to stable before then. However, we
could raise the rating if the project extends the CSA, enters into
another contract supported by lenders, favorably changes the terms
and conditions of its agreements, or increases the cushion in the
DSR (which we view as unlikely, given capacity payments are largely
fixed and there are limited opportunities for cost savings). In
addition, the sponsor could try to mitigate the shortfall, but we
don't assume that this will occur. In all cases, minimum coverage
would have to rise to above 1x," the rating agency said.
HAJ PETROLEUM: Has Until Aug. 25 to File Plan & Disclosure
----------------------------------------------------------
Judge Donald R. Cassling of the U.S. Bankruptcy Court for the
Northern District of Illinois, Eastern Division, has ordered that
the deadline for Debtor Haj Petroleum Inc. to file a Plan and
Disclosure Statement is extended through and until Aug. 25, 2020.
A copy of the order dated May 5, 2020, is available at
https://tinyurl.com/y9qt9dcu from PacerMonitor at no charge.
The Debtor is represented by:
Jonathan D. Golding, Esq.
THE GOLDING LAW OFFICES, P.C.
500 N, Dearborn Street, 2nd Floor
Chicago, IL 60654
Tel: (312) 832-7892
Fax: (312) 755-5700
E-mail: jgolding@goldinglaw.net
About Haj Petroleum
Haj Petroleum, Inc. owns and operates a gasoline station in South
Elgin, IL. Haj filed Chapter 11 Petition (Bankr. N.D. Ill. Case No.
20-05403) on Feb. 27, 2020. As of the time of filing, the Debtor
disclosed $46,740 in total assets and $1,100,114 in total
liabilities. The case is assigned to Hon. Donald R. Cassling.
Richard N. Golding, Esq. of THE GOLDING LAW OFFICES, P.C. is the
Debtor's counsel.
HENDRICKSON TRUCK: June 23 Plan Confirmation Hearing Set
--------------------------------------------------------
Debtor Hendrickson Truck Lines, Inc., filed with the U.S.
Bankruptcy Court for the Eastern District of California, Sacramento
Division, a Chapter 11 Plan of Reorganization and a Disclosure
Statement on April 9, 2020.
On May 7, 2020, Judge Christopher D. Jaime approved the Disclosure
Statement and established the following dates and deadlines:
* June 9, 2020, is fixed as the last day for submitting written
ballots accepting or rejecting the Plan.
* June 9, 2020, is fixed as the last day for filing and serving
written objections to confirmation of the Plan.
* June 16, 2020, is fixed as the last day for filing and serving
written response to objections to confirmation of the Plan.
* June 23, 2020, at 2:00 P.M. in Department "B" of the United
States Bankruptcy Court, 501 "I," Sixth Floor (Courtroom 32),
Sacramento, California is the hearing on confirmation of the Plan.
A copy of the order dated May 7, 2020, is available at
https://tinyurl.com/y8psmaq9 from PacerMonitor at no charge.
The Debtor is represented by:
LAW OFFICES OF GABRIEL LIBERMAN, APC
Gabriel E. Liberman
E-mail: Gabe@4851111.com
About Hendrickson Truck Lines
Hendrickson Truck Lines, Inc., f/d/b/a Hendrickson Trucking, Inc.--
http://www.htlines.com/-- is a general freight trucking company
founded in 1976 with headquarters in Sacramento, California. Its
services include dry van truckload, LTL line haul, short & long
haul, expedited, general freight, solo & team, and express
freight.
The Company previously filed for bankruptcy protection (Bankr. E.D.
Cal. Case No. 15-24947) on June 19, 2015. On Feb. 20, 2017, the
Court entered its order confirming Hendrickson Trucking's chapter
11 plan of reorganization. Following the closing of the 2015 Case,
the Company was able to perform its contractual obligations under
the Plan and paid roughly 64% of the Plan's liabilities, which
totaled $3,593,226.
On Nov. 27, 2019, Hendrickson again sought Chapter 11 protection
(Bankr. E.D. Cal. Case No. 19-27396) in Sacramento, California,
listing between $10 million and $50 million in both assets and
liabilities. The petition was signed by Alban Lang, chief
financial officer and vice president. The case is assigned to
Judge Christopher D. Jaime. The Law Office of Gabriel Liberman,
APC is the Debtor's counsel.
HERTZ GLOBAL: S&P Downgrades ICR to 'D' on Chapter 11 Filing
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating and issue-level
ratings on Hertz Global Holdings Inc. to 'D' from 'SD'.
S&P's recovery ratings on the company's debt issues remain
unchanged at this time because Hertz has yet to indicate its
capital structure pro forma for the filing.
Hertz generates the majority of its revenue at airports globally
and thus relies on airline passenger travel, which has declined
sharply due to the effects of COVID-19. At the same time, the
company relies on the proceeds from vehicle sales, in addition to
its normal operating cash flow, to service its ABS vehicle
obligations. However, the substantially weaker conditions in the
used car market have caused Hertz's liquidity to become severely
constrained. This led the company to miss a lease payment due on
certain of its (unrated) ABS vehicle securities on April 27, 2020.
On May 4, 2020, it entered into forbearance on these payments
through May 22, 2020. The Chapter 11 filing follows Hertz's
unsuccessful efforts to negotiate a restructuring of its lease
obligations.
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
HOYA MIDCO: S&P Affirms 'B-' ICR; Ratings Off Watch Negative
------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating and
issue-level rating on U.S.-based Hoya Midco LLC's (d/b/a Vivid
Seats) senior secured term loan and removed the ratings from
CreditWatch, where S&P placed them with negative implications on
March 13, 2020. The outlook is negative.
At the same time, S&P is lowering its recovery rating on the senior
secured term loan to '4' from '3' to reflect the lower recovery
prospects on secured debt due to the incremental pari passu senior
secured term loan.
The company's new pari passu senior secured term loan improves
liquidity but elevates leverage.
Vivid Seats recently borrowed $260 million in a privately placed
senior secured term loan that is pari passu with the existing $640
million senior secured term loan. The company has used proceeds
from the transaction to pay down and subsequently cancel the $50
million revolving credit facility. Without the revolving credit
facility, the company will no longer have any financial maintenance
covenants, thereby alleviating our prior covenant compliance
concerns. The remaining $210 million in cash proceeds from the
transaction will be held on the balance sheet for general corporate
purposes and S&P expects it will be used to fund substantial
negative cash flows in 2020, which include ticket refunds and
related charges stemming from the coronavirus outbreak.
S&P said, "The new $260 million term loan is positive for
liquidity, but we believe it represents a considerable increase to
an already substantial outstanding debt balance, which includes not
only the $640 million senior secured term loan, but also roughly
$190 million of preferred equity shares that we treat as debt in
our credit ratios. Additionally, the new term loan has substantial
interest costs. Pricing terms for the new debt include an option to
utilize payment-in-kind (PIK) interest at 11.5% in the first two
years, an option to partially pay interest in cash and PIK in year
three, and mandatory Libor plus 9.5% cash interest thereafter.
Although we view the flexibility to use PIK interest options as
beneficial for the next 12 months given our expectation of poor
cash flow generation, we believe the PIK option and subsequent
additions to outstanding debt could hinder the company's ability to
lower leverage longer-term. This could create challenges to
refinancing its large debt balance before its nearest term loan
maturity in 2024 if revenues, earnings, and cash flows do not
improve in line with our expectations."
Live event cancellations and postponements have increased,
resulting in severe forecast revenue declines for 2020.
The stoppage of live music, theater, and sporting events from the
coronavirus outbreak has worsened since mid-March. S&P said, "We
now believe most large live events in mid-2020 will be canceled or
postponed. As a result, we expect the gross order value of tickets
sold on Vivid Seats platform will continue to be negligible for the
next two quarters and be substantially lower than we previously
expected for the fourth quarter of 2020. In total, we expect
revenues could decline 65%-80% in 2020 before improving
significantly in 2021 as the threat from the coronavirus outbreak
is expected to lessen, thus decreasing the need for social
distancing."
S&P said, "Even though the company has a highly variable cost
structure, which includes ticket processing costs, performance
marketing costs, and growth-oriented personnel costs, we believe
the expected revenue declines will result in negative EBITDA and
cash generation for 2020. Further, we expect working capital
dynamics including ticket refunds from event postponement and
cancellations will be a material drag on cash flows. Overall, pro
forma for the revised capital structure, we expect leverage and
free operating cash flow (FOCF) to debt to be negative in 2020
before improving in 2021 as we expect live event attendance to
rebound. Notably, we expect FOCF to debt to improve to the 2%-5%
range in 2021."
Environmental, Social, And Governance
-- Health and safety
S&P said, "Our negative outlook reflects the uncertainty regarding
the company's ability to restore its operations given the
substantial revenue declines from COVID-19, and the risk that
revenues and cash flows could remain poor due to an extended
shutdown, worsening macroeconomic conditions, lower-than-expected
live event attendance in an economic recovery scenario, or
structural changes in the live events industry. Under this scenario
we could lower the rating if we believe the company's performance
will be permanently impaired such that it would not be able to meet
its financial commitments, including growing its cash flows to
offset its substantial interest costs and refinancing its capital
structure prior to its 2024 term loan maturity.
"We could lower the rating one notch if we believe the company's
revenues and cash flow generation will be permanently impaired from
COVID-19. This would likely stem from deteriorating industry trends
or if it loses market share due to increased competition, leaving
it unable to meet its future financial commitments including
refinancing its capital structure prior to its 2024 term loan
maturity. We could lower the rating further if we envision a
payment default scenario in the next 12 months because of high
rates of cancellations and refunds, poor cost management, and an
extended economic downturn that deplete its existing cash balance
such that it cannot meet its debt fixed charges.
"We could revise our outlook back to stable if we believe the
company would be able to grow its revenue and EBITDA generation
while managing its cash flows such that we believe cash flow turns
positive and FOCF to debt will improve above 5%, which will support
the company's ability to reduce leverage over time. Under this
scenario, we would anticipate a return to live music, theater, and
sporting events such that fan attendance and ticket sales
consistently improve and approach 2019 levels because of a
lessening risk of the coronavirus and an easing of social
distancing restrictions."
INSIGHT TERMINAL: June 2 Hearing on Disclosure Statement
--------------------------------------------------------
A hearing regarding the Disclosure Statement for Autumn Wind
Lending, LLCs Chapter 11 Plan of Reorganization is scheduled for
June 2, 2020 at 10:00 a.m. at Courtroom #1, 5th Fl(7th St.
Elevators), 601 West Broadway, Louisville, KY 40202(Eastern Time).
Any objection to the motion herein shall be filed with the Court no
later than seven days prior to the date of hearing.
About Insight Terminal Solutions
Insight Terminal Solutions -- http://insightterminals.com/-- is
an
Oakland, Calif.-based company that provides terminal and
stevedoring services at the Oakland Bulk and Oversized Terminal
(OBOT) for a variety of bulk agriculture and mineral commodities.
Insight Terminal Solutions and its affiliate Insight Terminal
Holdings, LLC filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. W.D. Ky. Lead Case No. 19-32231) on
July 17, 2019. The petitions were signed by John J. Siegel, Jr.,
manager.
At the time of filing, Insight Terminal Solutions estimated $1
million to $10 million in assets and $10 million to $50 million in
liabilities. Insight Terminal Holdings estimated up to $50,000 in
assets and $1 million to $10 million in liabilities.
Andrew David Stosberg, Esq., at Middleton Reutlinger, is the
Debtor's counsel.
INTELSAT SA: U.S. Trustee Appoints Creditors' Committee
-------------------------------------------------------
John Fitzgerald, III, acting U.S. trustee for Region 4, on May 27,
2020, appointed a committee to represent unsecured creditors in the
Chapter 11 cases of Intelsat S.A. and its affiliates.
The committee members are:
1. The Boeing Company
100 North Riverside
Chicago, IL 60606
2. Tysons Corner Office I, LLC
1961 Chain Bridge Rd, Suite 305
McLean, VA 22102
3. Pension Benefit Guaranty Corporation
1200 K Street, N.W.
Washington, D.C. 20005-4026
4. US Bank, National Association
60 Livingston Ave.
St. Paul, MN 55107
5. Delaware Trust Company
251 Little Falls Drive
Wilmington, DE 19808
6. BOKF, N.A.
1600 Broadway, 3rd Floor
Denver, CO 80202
7. JSAT International, Inc.
1401 H Street N.W., Suite 220
Washington, D.C. 20005
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Intelsat S.A.
Luxembourg-based Intelsat S.A. is a publicly held operator of
satellite services businesses, which provides a diverse array of
communications services to a wide variety of clients, including
media companies, telecommunication operators, internet service
providers, and data networking service providers. It is also a
provider of commercial satellite communication services to the U.S.
government and other select military organizations and their
contractors. Intelsat's administrative headquarters are in McLean,
Va., and it has extensive operations spanning across the United
States, Europe, South
America, Africa, the Middle East, and Asia. For more information,
visit http://www.intelsat.com/
Intelsat and its affiliates filed Chapter 11 petitions (Bankr. E.D.
Va. Lead Case No. 20-32299) on May 14, 2020. The petitions were
signed by David Tolley, executive vice president, chief financial
officer, and co-chief restructuring officer. In their petitions,
Debtors disclosed $11,651,558,000 in assets and $16,805,844,000 in
liabilities as of April 1, 2020.
Kirkland & Ellis, LLP and Kutak Rock, LLP as legal counsel; Alvarez
& Marsal North America, LLC as restructuring advisor; PJT Partners,
LP as investment banker; and Stretto as claims and noticing agent.
INTERNAP TECHNOLOGY: Joint Prepackaged Plan Confirmed by Judge
--------------------------------------------------------------
Judge Robert D. Drain has entered findings of fact, conclusions of
law and order confirming the Disclosure Statement and First Amended
Joint Prepackaged Chapter 11 Plan of Internap Technology Solutions
Inc. and its debtor affiliates.
The Debtors have proposed the Plan in good faith and not by any
means forbidden by law, thereby satisfying Section 1129(a)(3) of
the Bankruptcy Code. The Debtors' good faith is evident from the
facts and record of the Debtors' Chapter 11 Cases, the Disclosure
Statement, the record of the Combined Hearing, and other
proceedings held in the Debtors' Chapter 11 Cases.
The Plan and the Plan Documents were proposed with the legitimate
and honest purpose of maximizing the value of the Debtors' Estates
and to effectuate a successful reorganization of the Debtors. The
Plan was negotiated at arm's length among the Debtors, the Ad Hoc
Group, the Consenting Lenders, the DIP Facility Agent and the
Existing Credit Facility Agent, and their respective advisors.
A copy of the order dated May 5, 2020, is available at
https://tinyurl.com/ydfbm6r2 from PacerMonitor at no charge.
Counsel for the Debtors:
Dennis F. Dunne, Esq.
Abhilash M. Raval, Esq.
Tyson M. Lomazow, Esq.
MILBANK LLP
55 Hudson Yards
New York, NY 10001
Telephone: (212) 530-5000
Facsimile: (212) 530-5219
E-mail: ddunne@milbank.com
araval@milbank.com
tlomazow@milbank.com
About Internap Corporation
Internap Corporation (NASDAQ: INAP) -- http://www.INAP.com/-- is a
leading-edge provider of high-performance data center and cloud
solutions with 100 network Points of Presence worldwide. INAP's
full-spectrum portfolio of high-density colocation, managed cloud
hosting and network solutions supports evolving IT infrastructure
requirements for customers ranging from the Fortune 500 to emerging
startups. INAP operates in 21 metropolitan markets, primarily in
North America, with 14 INAP Data Center Flagships connected by a
low-latency, high-capacity fiber network.
On March 16, 2020, Internap Technology Solutions Inc. and six
affiliated debtors, including INAP Corporation, each filed a
voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code in the United States Bankruptcy Court for the
Southern District of New York. The Debtors have requested that
their cases be jointly administered under lead case In re Internap
Technology Solutions Inc., et al. (Bankr. S.D.N.Y. Case
No.20-20-22393).
INAP is advised in this matter by FTI Consulting as restructuring
advisor, Milbank LLP as legal counsel and Moelis & Company as
financial advisor. Prime Clerk LLC is the claims agent.
INTL FCSTONE: S&P Affirms BB- Issuer Credit Rating; Outlook Stable
------------------------------------------------------------------
S&P Global Ratings said it assigned its 'BB-' rating to INTL
FCStone Inc.'s new $350 million senior secured second-lien notes.
At the same time, S&P affirmed its 'BB-' issuer credit rating on
the firm. The outlook remains stable.
S&P rated the new senior secured second-lien notes 'BB-', in line
with the issuer credit rating, to reflect that the level of
priority debt from the firm's term and revolving credit facilities
is not excessive, and the rating agency expects the amount of
second-lien debt to not exceed the amount of holding company assets
available to the second-lien debtholders.
"The affirmation reflects that we see Gain Capital as a good
strategic fit for INTL, with no material erosion in funding or
liquidity. Although pro forma for the acquisition, the
risk-adjusted capital (RAC) ratio is slightly below 8%, we expect
INTL to operate Gain with lower market risk than it operated with
as an independent company. Given that both firms' profitability has
benefited from higher market volatility so far in 2020, we believe
that retention of improved earnings and lower market risk at Gain
as part of INTL will support a RAC ratio above 8%," S&P said.
"Our ratings on INTL continue to reflect the firm's diversified mix
of business, including one of the largest independent commodities
and commodities-related financial products trading firms in the
U.S.; good earnings; and adequate liquidity, as well as our view
that overall risk-based capitalization is a moderate weakness,
given the company's loss history and focus on growth," the rating
agency said.
INTL is a U.S.-based holding company for a diverse group of largely
regulated subsidiary commodities and securities brokers. S&P
believes the firm has a good market position, given that it is one
of the largest independent U.S. futures commissions merchants. The
firm provides corporate and institutional clients with a wide
variety of products, including physical commodities and customized
and complex over-the-counter structures to meet their commodities
and securities hedging needs. The firm executes and clears on all
major futures and securities exchanges globally and does all major
foreign currency pairs and swap transactions.
Gain Capital Holdings is a U.S.-based holding company for U.S.,
U.K., and other international regulated futures commission merchant
and foreign exchange dealer subsidiaries that provide trade
execution services in foreign exchange, contracts for difference
(CFD), and exchange-based products, including futures, to retail
and other clients. Gain's performance can be volatile, as shown by
negative EBITDA in 2019 and very strong profitability so far in
2020 because of increased market volatility. While it reports
little in securities or client positions on its balance sheet, S&P
believes the firm operates with a fair amount of credit and market
risk from its clients' activity, particularly retail CFDs in the
U.K.
Gain takes on market risk from unhedged exposure to clients'
foreign exchange and CFD positions.
"We believe that Gain's market risk will be reduced once it is on
INTL's clearing platform, from a combination of increased
internalization of orders, portfolio diversification when combined
with INTL's other trading activities, and reduced hedging costs. We
also expect INTL to operate this business more similarly to its
other principal trading businesses, with lower market risk
tolerance," S&P said.
Gain employs automated account liquidation to limit its exposure to
unsecured credit risk of its clients when the client fails to meet
margin calls. While Gain's required client margins on foreign
exchange and CFDs are in line with most peers', these are leveraged
products that increase the potential for market price changes to
wipe out the equity in clients' accounts.
"The stable outlook reflects our expectations that INTL will
successfully integrate Gain, meet its projected cost and capital
reduction targets, and operate Gain with lower market risk.
Further, we expect growth in equity from retention of good earnings
to support a RAC ratio above 8%. We also expect the firm to
maintain a gross stable funding ratio above 100% and liquidity
coverage metric above 1x. We also expect INTL to limit its
acquisition activity while it incorporates Gain," S&P said.
Downside scenario
Over the next 12 months, S&P could lower the ratings if:
-- The company's operating performance deteriorates;
-- S&P expects the RAC ratio to be sustained below 8%; or
-- Liquidity deteriorates.
Upside scenario
Given the firm's acquisition strategy and COVID-19-related
uncertainty, S&P is unlikely to raise its ratings over the outlook
horizon. Over the longer term, S&P could raise its ratings if
INTL:
-- Maintains solid operational performance;
-- Avoids material losses; and
-- Builds liquidity and capital to support a RAC ratio sustainably
above 10%.
JM BROWN: Bankruptcy Administrator Unable to Appoint Committee
--------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Middle District of North
Carolina on May 27 disclosed in a filing that no official committee
of unsecured creditors has been appointed in the Chapter 11 case of
JM Brown Properties, LLC.
About JM Brown Properties
JM Brown Properties, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. N.C. Case No. 20-10475) on May 26,
2020. At the time of the filing, Debtor disclosed assets of
between $100,001 and $500,000 and liabilities of the same range.
Judge Benjamin A. Kahn oversees the case. Ivey, McClellan, Gatton
& Siegmund is Debtor's legal counsel.
JUDSON COLLEGE, AL: S&P Withdraws 'BB' Revenue Bond Rating
----------------------------------------------------------
S&P Global Ratings has withdrawn its rating on Judson College,
Ala.'s revenue bonds at the issuer's request. At the time of the
withdrawal, the debt was rated 'BB' with a negative outlook.
Moreover, at the time of the withdrawal S&P had not received
sufficient information from the issuer to allow it to continue to
maintain the rating, or to review the rating prior to withdrawal.
K' CAFE CORP: June 16 Plan Confirmation Hearing Set
---------------------------------------------------
On April 30, 2020, debtor K'Cafe Corp., d/b/a Yukka Latin Bistro,
filed with the U.S. Bankruptcy Court for the Southern District of
New York a Second Amended Disclosure Statement.
On May 1, 2020, Judge Robert E. Grossman conditionally approved the
Second Amended Disclosure Statement and established these dates and
deadlines:
* June 16, 2020, at 10:00 a.m. before the Honorable Robert
Grossman, U.S. Bankruptcy Judge, in the United States Bankruptcy
Court for the Southern District of New York, One Bowling Green, New
York 10007, Room 501, is the hearing to consider confirmation of
the Plan.
* May 11, 2020, is fixed as the last day to deliver ballots for
accepting or rejecting the Plan.
* June 9, 2020, at 5:00 p.m., is fixed as the last day to file
acceptances or rejections of the Plan.
* June 9, 2020, is fixed as the last day to file any objection
to confirmation of the Plan.
A copy of the order dated May 1, 2020, is available at
https://tinyurl.com/y857uddk from PacerMonitor at no charge.
The Debtor is represented by:
Michael S. Kopelman, Esq.
KOPELMAN & KOPELMAN LLP
90 Main Street, Suite 205
Hackensack, NJ 07601
Tel: (201) 489-5500
Fax: (201) 489-7755
About K'Cafe Corp.
K' Cafe Corp., d/b/a Yukka Latin Bistro, filed a Chapter 11
bankruptcy petition (Bankr. S.D.N.Y. Case No. 19-12597) on Aug. 11,
2019, disclosing under $1 million in both assets and liabilities.
The Debtor is represented by Michael S. Kopelman, Esq., at Kopelman
& Kopelman LLP.
LA MERCED: Time to Reply to OSP's Mortgage Property Sale Extended
-----------------------------------------------------------------
Judge Enrique S. Lamoutte of the U.S. Bankruptcy Court for the
District of Puerto Rico granted the request of La Merced Limited
Partnership SE to extend time to file opposition to the request of
OSP Consortium, LLC, the assignee of Condado 5, LLC, a Secured
Creditor of La Merced Limited Partnership SE, to sell the Mortgage
Property for $4,059,354, cash, subject to overbid, to June 1,
2020.
The Mortgaged Property is described in the Registry of Property in
the Spanish language as follows:
--- URBANA: Predio de terreno radicado en la URBANIZACION
ELEONOR ROOSEVELT, radicada en el Barrio Hato Rey del término
municipal de Rio Piedras, hoy San Juan, Puerto Rico, con una cabida
de TRES MIL TRESCIENTOS CATORCE PUNTO VEINTICINCO (3,314.25) metros
cuadrados. En lindes por el NORTE, en ciento veintinueve (129) pies
nueve (9) pulgadas con la Avenida A; por el SUR, en igual medida
con terrenos de la Asociación de Miembros de la Policía Insular;
por el ESTE, en doscientos setenta y cinco (275) pies ocho y tres
cuartos (8-3/4) pulgadas, con la Calle "T"; y por el OESTE, en
igual medida con la Calle “H”.
--- Enclava en dicho terreno un edificio todo de concreto, de
dos (2) plantas, dedicado a una escuela privada.
--- Finca número trece mil cuatrocientos cincuenta y tres
(13,453), inscrita alfolio cuatro (4) del tomo mil cuatrocientos
sesenta y seis (1466) de Rio Piedras Norte, en el Registro de la
Propiedad de Puerto Rico, Segunda Sección de San Juan.
About La Merced LP
La Merced Limited Partnership, S.E., is a single asset real estate,
as defined in 11 U.S.C. Section 101(51B)). Based in San Juan,
Puerto Rico, La Merced LP filed a voluntary petition under Chapter
11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 18-06858) on Nov.
27, 2018. In the petition signed by Luz Celenia Castellano,
administrator, the Debtor disclosed $6,088,228 in liabilities.
Judge Enrique S. Lamoutte Inclan is the case judge. Nelson Robles
Diaz Law Offices, PSC, led by founding partner Nelson Robles Diaz,
is the Debtor's counsel.
LIBBEY INC: Further Extends $12M Debt Prepayment Deadline to May 17
-------------------------------------------------------------------
Libbey Inc. entered into Amendment No. 5 to the Senior Secured
Credit Agreement, dated as of April 9, 2014, by and among the
Company, Libbey Glass Inc., as borrower, each of the Loan Parties
and the lenders party thereto, as amended. The Amendment No. 5
provides for an extension of the date on which the Borrower is
required under the Credit Agreement to make a prepayment of
approximately $12 million from the Borrower's Excess Cash Flow (as
defined in the Credit Agreement) from May 25, 2020 to May 31, 2020,
subject to certain conditions, including the Borrower's provision
of certain financial, operational and liquidity information to the
lenders, and the maintenance by the Loan Parties of a minimum level
of liquidity. As previously reported, Amendment No. 1 extended the
Borrower's Excess Cash Flow payment from April 9, 2020 to April 30,
2020, Amendment No. 2 extended the Borrower's Excess Cash Flow
payment from April 30, 2020 to May 7, 2020, Amendment No. 3 further
extended the Borrower's Excess Cash Flow payment from May 7, 2020
to May 17, 2020, and Amendment No. 4 further extended the
Borrower's Excess Cash Flow payment from May 17, 2020 to May 25,
2020.
Retention Bonuses
On May 19, 2020, the Company's Board of Directors, following
extensive consultation with the Company's compensation and legal
advisors, approved cash retention bonuses and a form of Retention
Bonus Agreement for the Company's executive officers and other key
employees. The Retention Bonuses will enable the Company to retain
and motivate the Participants through the volatile and uncertain
environment affecting the foodservice, hospitality and retail
industries, as well as the previously disclosed disruptions to the
Company's business related to coronavirus disease 2019. Pursuant
to the Retention Bonus Agreements, Participants were paid the
Retention Bonuses on or before May 22, 2020.
The aggregate amount of Retention Bonuses paid was approximately
$3.1 million. The Retention Bonuses received by the Company's
named executive officers and its principal financial officer are:
Name & Title Retention Bonus
------------ ---------------
Michael P. Bauer
Chief Executive Officer $900,000
James C. Burmeister
Senior Vice President,
Chief Operating Officer $400,000
Sarah J. Zibbel
Senior Vice President,
Chief Human Resources Officer $325,000
Juan Amezquita
Senior Vice President,
Chief Financial Officer and Treasurer $400,000
Under the Retention Bonus Agreements, a Participant will be
required to repay the full Retention Bonus to the Company in the
event that the Company terminates the Participant's employment for
"Cause" or the Participant voluntarily resigns without "Good
Reason" (each as defined in the Retention Bonus Agreement) prior to
May 19, 2021.
About Libbey Inc.
Based in Toledo, Ohio, Libbey Inc. is a glass tableware
manufacturer. Libbey operates manufacturing plants in the U.S.,
Mexico, China, Portugal, and the Netherlands. In existence since
1818, the Company supplies tabletop products to retail, foodservice
and business-to-business customers in over 100 countries. Libbey's
global brand portfolio, in addition to its namesake brand, includes
Libbey Signature, Master's Reserve, Crisa, Royal Leerdam, World
Tableware, Syracuse China, and Crisal Glass.
The Company reported a net loss of $69.02 million for the year
ended Dec. 31, 2019, compared to a net loss of $7.96 million for
the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$706.69 million in total assets, $732.47 million in total
liabilities, and a total shareholders' deficit of $25.79 million.
* * *
As reported by the TCR on April 21, 2020, S&P Global Ratings
lowered its issuer credit rating on U.S.-based Libbey Inc. to 'SD'
(selective default) from 'CCC'. "We are lowering our issuer credit
rating on Libbey to 'SD' and the senior secured rating to 'D',
because the company deferred a mandatory excess cash flow sweep
payment on its term loan B on April 9, 2020," S&P said.
LIGHT OF LIFE: July 14 Continue Hearing on Plan & Disclosures
-------------------------------------------------------------
The continued hearing to consider confirmation of the Plan and
final approval of the Disclosure Statement of Life Church,
Successor in interest to Light of Life Community Church, d/b/a
Light of Life Community Church, is scheduled for July 14, 2020 at
10:30 a.m. at Spartanburg before Judge Helen E. Burris.
About Light of Life Church
Light of Life Church, successor in interest to Light of Life
Community Church, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.S.C. Case No. 19-05305) on Oct. 8, 2019.
At the time of the filing, the Debtor was estimated to have assets
of between $100,001 and $500,000 and liabilities of the same range.
The case is assigned to Judge Helen E. Burris. The Debtor tapped
Kimberly Y. Brooks, Esq., as its bankruptcy attorney.
MACY'S INC: S&P Lowers Secured Notes Rating to 'BB-' on Upsizing
----------------------------------------------------------------
S&P Global Ratings lowered its issue-level rating on Macy's Inc.'s
proposed senior secured notes due 2025 to 'BB-' from 'BB' and
revised its recovery rating on the notes to '2' from '1' following
the company's proposed upsizing of the issuance to $1.3 billion
(from $1.1 billion previously). The additional secured debt has
reduced the expected recovery value for the secured noteholders in
S&P's simulated default scenario. The '2' recovery rating indicates
its expectation for substantial (70%-90%; rounded estimate: 75%)
recovery in the event of a default.
All of its other ratings on Macy's, including its 'B+' issuer
credit rating and negative outlook, remain unchanged.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P is updating its recovery analysis on Macy's for the planned
upsizing of the secured notes.
-- S&P's simulated default scenario assumes a limited recovery in
sales and operating profits following the coronavirus pandemic with
a weak environment and shifting consumer preferences exacerbated by
merchandise missteps, increased competition that leads to the
continued loss of market share, and a weak economy.
-- S&P assumes Macy's will emerge as a going concern given its
name recognition. S&P applied a 5.0x EBITDA multiple (in line with
the multiples it uses for other department stores including
Dillard's Inc. and J.C. Penney Co. Inc.) to its projected
emergence-level EBITDA figure.
-- S&P believes that as Macy's approaches default it would further
rationalize its store footprint and sell assets.
-- S&P also believes the company could take on additional secured
debt as it approaches default, which would pressure the recovery
prospects for its debtholders.
-- S&P assumes the unrated asset-based lending (ABL) facility is
60% drawn at default and believe its claim would rank ahead of the
unsecured notes' claim in bankruptcy.
Simulated default assumptions
-- Simulated year of default: 2024
-- S&P uses a combined discrete asset valuation (DAV) approach and
enterprise value (EV) approach to value Macy's because the proposed
secured notes will be secured by certain real estate.
S&P estimates a gross enterprise value of $4.5 billion based on:
-- $3.4 billion of going-concern value (emergence EBITDA of $685
million and a 5x multiple); and
-- $1.1 billion of adjusted real estate value (collateral for the
proposed secured notes).
Simplified waterfall
-- Net EV after 5% administrative costs and estimated unfunded
pension claims: $4 billion
S&P assumes the following value distribution in its waterfall:
-- About 25% of the recovery value to the secured notes; and
-- About 75% of the value distributed to the ABL and unsecured
notes, with the ABL ranking ahead of the unsecured notes in terms
of priority.
-- Secured note claims: $1.4 billion*
-- Recovery expectations: 70%-90% (rounded estimate: 75%)
-- ABL secured claims: $1.8 billion*
-- Recovery expectations: Not rated
-- Unsecured debt claims: $5.3 billion*
-- Recovery expectations: 10%-30% (rounded estimate: 20%)
*All debt claims include six months of prepetition interest.
MODERN VIDEOFILM: Disclosure Hearing Continued to July 15
---------------------------------------------------------
Judge Mark S. Wallace has ordered that the hearing for the
Disclosure Statement filed by Debtor Modern VideoFilm, Inc. shall
be held on July 15, 2020, at 9:00 a.m., to permit settlement
negotiations to continue.
A copy of the order dated May 8, 2020, is available at
https://tinyurl.com/yayuazut from PacerMonitor at no charge.
About Modern VideoFilm
Modern VideoFilm Inc. is a feature film and television
post-production company based in California. Modern VideoFilm filed
a Chapter 11 petition (Bankr. C.D. Cal. Case No. 18-11792) on May
16, 2018. In the petition signed by CRO Howard Grobstein, the
Debtor was estimated to have $1 million to $10 million in assets
and $50 million to $100 million in liabilities.
Judge Mark S Wallace oversees the case.
Garrick A. Hollander, Esq., at Winthrop Couchot Golubow Hollander,
LLP, serves as the Debtor's counsel.
MOTIF DIAMOND: Unsecured Creditors to Get 15% Dividend in Plan
--------------------------------------------------------------
Debtor Motif Diamond Designs, Inc., filed with the U.S. Bankruptcy
Court for the Eastern District of Michigan, Southern Division, a
Combined Plan and Disclosure Statement.
Class 5 General Unsecured Claims are impaired. The Debtor intends
to pay unsecured claims on a pro rata basis to the extent funds
become available from post-confirmation operations, with an
estimated dividend of 15%. The total amount of estimated claims in
the class amounts to $388,888.
Alleged creditor Michael Canova was scheduled by the Debtor as
contingent, unliquidated, and disputed, as the Debtor contends that
it is not liable to Canova in any amount. Canova failed to file a
timely proof of claim prior to the Bar Date, despite notice of this
case and of the applicable Bar Date. Accordingly, Canova will
receive no distribution under the Plan and is not entitled to vote
on the Plan.
Class 6 Equity Security Holders are unimpaired. Karyn Chopjian is
the sole equity security holder of the Debtor, and her continued
personal services provided to the Debtor are essential to its
successful operation, both during this case and following
confirmation. Mrs. Chopjian will retain her equity interest in the
reorganized Debtor in the same manner, nature, and extent as prior
to the Petition Date.
The Debtor intends to reject the lease with Southland Center, LLC
and relocate its operation to a new, more profitable location
outside the mall. The Debtor believes that its future operations
and collection of receivables will generate sufficient funds to
satisfy its obligations under the Plan.
The Debtor and its landlord, Southland Center, LLC, have a
bona-fide dispute regarding the rents due, the applicable rental
rate, and the credits due to the Debtor for improvements made to
the premises. The Debtor filed this case following the landlord's
commencement of eviction proceedings. Through this chapter 11
filing, the Debtor seeks to contest the claims brought about by the
landlord, and to continue to operate and satisfy its other
obligations.
A full-text copy of the Combined Plan and Disclosure Statement
dated May 7, 2020, is available at https://tinyurl.com/ydyynvk7
from PacerMonitor at no charge.
Attorneys for Motif Diamond:
OSIPOV BIGELMAN P.C.
Anthony J. Miller
20700 Civic Center Drive, Suite 420
Southfield, MI 48076
Tel: (248) 663-1804
Fax: (248) 663-1801
E-mail: am@osbig.com
About Motif Diamond Designs
Motif Diamond Designs, Inc., is a jewelry store based in Taylor,
Michigan. The company filed a Chapter 11 petition (Bankr. E.D.
Mich. Case No. 20-40285) on Jan. 8, 2020. The petition was signed
by Toros Chopjian, its vice president. At the time of the filing,
the Debtor was estimated to have assets of up to $50,000 and
liabilities of $1 million to $10 million.
Judge Phillip J. Shefferly oversees the case.
The Debtor hired Yuliy Osipov, Esq. at Osipov Bigelman, P.C., as
its bankruptcy counsel and Al-Hassan, Howell, Sadaps CPA &
Associates, P.C. as its accountants.
MURRAY ENERGY: Creditors' Committee Members Disclose Claims
-----------------------------------------------------------
In the Chapter 11 cases of Murray Energy Holdings Co., et al., the
law firm of Hahn Loeser & Parks LLP submitted a verified statement
under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to
disclose that it is representing Laurel Aggregates of Delaware, LLC
and GACP Finance Co., LLC.
Laurel Aggregates of Delaware, LLC
103 Corporate Drive, Suite 202
Morgantown, WV 26501
Nature and Amount of Claim: Claim No. 1935 in the amount of
$158,552.36, mechanics lien against The Monongalia County Coal
Company; Claim No. 2526 in the amount of $330,632.34, mechanics
lien against The Monongalia County Coal Company; Claim No. 2623 in
the amount of $278,089.76, mechanics lien against Harrison County
Coal Company; Claim No. 2627 in the amount of $286,266.36,
mechanics lien against Marshall County Coal Company; and Claim No.
2638 in the amount of $203,551.20, mechanics lien against Marion
County Coal Company.
Pertinent Facts or Circumstances in Connection with the Employment
of HLP: HLP was contacted to represent Laurel Aggregates in the
Debtors' chapter 11 cases.
GACP Finance Co., LLC
11100 Santa
Monica Boulevard, Suite 800
Los Angeles, CA 90025
Nature and Amount of Claim: A secured, fully-rolled, post-petition,
super-priority administrative claim in the principal amount of
$90,000,000, as set forth more fully, among other things, in the
Final Order (I) Authorizing the Debtors to (A) Obtain Postpetition
Financing and (B) Use Cash Collateral, (II) Granting Liens and
Providing Superpriority Administrative Expense Status, (III)
Granting Adequate Protection to the Prepetition Secured Parties,
(IV) Modifying the Automatic Stay, and (V) Granting Related Relief
(Related Doc #28 and 93) [Dkt. No. 431].
Pertinent Facts or Circumstances in Connection with the Employment
of HLP: HLP was contacted to represent GACP as Ohio counsel in the
Debtors' chapter 11 cases. GACP's lead counsel in the Debtors'
chapter 11 cases is Sidley Austin LLP.
HLP has not, at any time during its representation of the
Creditors, owned any claim against or interest in the
above-captioned Debtors, except to the extent that HLP or one or
both of the Creditors may at some future time seek to have HLP's
fees and expenses incurred in HLP's representation of either or
both of the Creditors paid by the Debtors' estate pursuant to
contract, title 11 of the United States Code, or other applicable
laws or rules. HLP submits this statement out of an abundance of
caution, and nothing herein should be construed as an admission
that the requirements of Bankruptcy Rule 2019 apply to HLP's
representation of the Creditors. Further, nothing contained in this
statement should be construed as: (i) a limitation upon, or waiver
or release of, any right, claim, cause of action, interest,
defense, or remedy of any Claimant against any of the Debtors or
otherwise; or (ii) an admission with respect to any fact or legal
theory. The information contained in this statement is intended
only to comply with Bankruptcy Rule 2019, if and to the extent
applicable, and is not intended for any other use or purpose. By
submitting this statement, the undersigned verifies, on behalf of
HLP, that it is true and correct to the best of HLP's knowledge.
Co-Counsel to GACP Finance Co., LLC can be reached at:
Rocco I. Debitetto, Esq.
Hahn Loeser & Parks LLP
200 Public Square, Suite 2800
Cleveland, OH 44114
Telephone: (216) 274-2374
Facsimile: (216) 241-2824
E-mail: ridebitetto@hahnlaw.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/oMzJox
About Murray Energy Holdings Co.
Headquartered in St. Clairsville, Ohio, Murray Energy --
http://murrayenergycorp.com/-- is the largest privately owned coal
company in the United States, producing approximately 76 million
tons of high quality bituminous coal each year, and employing
nearly 7,000 people in the United States, Colombia and South
America.
Murray Energy now operates 15 active mines in five regions in the
United States, plus two mines in Colombia, South America. It
operates 12 underground longwall mining systems, 42 continuous
mining units, 10 transloading facilities, and five mining equipment
factory and fabrication facilities.
Murray Energy and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Ohio Lead Case No. 19-56885) on
Oct. 29, 2019. At the time of the filing, the Debtors disclosed
assets of between $1 billion and $10 billion and liabilities of the
same range.
The cases have been assigned to Judge John E. Hoffman Jr.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as general bankruptcy counsel; Dinsmore & Shohl
LLP as local counsel; Evercore Group L.L.C. as investment banker;
Alvarez and Marsal L.L.C. as financial advisor; and Prime Clerk LLC
as notice and claims agent.
The U.S. Trustee for Region 9 appointed creditors to serve on the
official committee of unsecured creditors on Nov. 7, 2019. The
committee tapped Morrison & Foerster LLP as legal counsel;
AlixPartners, LLP as financial advisor; and Vorys, Sater, Seymour
and Pease LLP as local counsel. Moelis & Company LLC, as investment
banker.
N RCT LLC: Court Approves Disclosure Statement
----------------------------------------------
Judge Wendy L. Hagenau has ordered that the Disclosure Statement
for Second Amended Plan filed by the Chapter 11 Trustee of Debtor,
NRCT, LLC, is approved.
June 5, 2020 is fixed as the last day for filing written
acceptances or rejections of the Second Amended Plan (the
“Ballot”).
June 9, 2020 is fixed for the hearing on confirmation of the Second
Amended Plan. Said hearing will be held at 9:30 a.m. in Courtroom
1403, United States Courthouse, 75 Ted Turner Dr., SW, Atlanta,
Georgia, before the undersigned.
June 5, 2020 is fixed as the last day for filing and serving
written objections to confirmation of the Second Amended Plan.
The Chapter 11 case in In re N RCT, LLC (Bankr. N.D. Ga. Case No.
15-58444).
NICK'S PIZZA: Plan Has 40% to 100% for Unsecureds
-------------------------------------------------
Nick’s Pizza & Pub, Ltd. And Nicholas F. Sarillo submitted a
Joint Plan and a Disclosure Statement.
The following classes shall be treated as follows:
* Class 4(b) Secured Claims of Plote. Claims in this class,
which are impaired, total $234,800. The claimant will recover 0%
of the claim. Sarillo will transfer the collateral that secures the
claim in full satisfaction of the Claim. Plote shall not have any
an unsecured claim against Sarillo.
* Class 7(a) General Unsecured Creditors of Nick's. Claims in
the class, which are impaired, total $2,450,000. The class will
recover 40% to 100% of their claims. On the fifth business day
following each Fiscal quarter commencing on the first full Fiscal
Quarter after the Effective Date and concluding on the first to
occur of (a) that date on which Class 7(a) Claimants receive 100%
of the principal balance of their allowed Class 7(a) Claims, and
(b) the 20th full calendar following the Effective Date, each
allowed Class 7(a) Claim will be paid its Pro Rata Share of the
Nick' Excess Cash Flow.
* Class 7(b) General Unsecured Creditors of Sarillo. Claims in
this class, which are impaired, will total $1,640,000. The class
will recover 0% to 100%. On the fifth business day following each
Fiscal Quarter commencing on the first full Fiscal Quarter after
the Effective Date and concluding on the first to occur of (a) that
date on which Class 7(b) Claimants receive 100% of the principal
balance of their Unsecured Claims, including from payments made on
Class 7(a) Claims, and (b) the 20th full calendar following the
Effective Date, each Class 7(b) Claim shall be paid its Pro Rata
share with Class 7(b) general Unsecured Creditors of Sarillo's
Disposable Income from the Plan Payment Account.
* Class 8 Equity Interests are impaired. Equity Interests shall
retain their interests but shall not be entitled to any dividends
or other distributions unless and until Claimants in Classes 1, 4,
5, 6 and 7(a) receive in full their payments provided under the
Plan.
As noted, Nick's does not own real estate its restaurants occupy,
but rather leases the facilities from DNA and B&R. Pursuant to
Nick’s schedules, its tangible and intangible assets included the
following:
* Accounts Receivable $1,580
* Perishable Food & Liquid Inventory $34,020
* Non-perishable Paper Inventory $9,065
* Office Equipment $1,000
* Vehicles $250
* Kitchen & Restaurant Equipment $73,014
* Leasehold Interests $0
* Trademarks & Copyrights Unknown
As of the reporting period for week 5 (April 22, 2020 through April
28, 2020), Nick's also reported cash of $54,517.00. In its
statement of financial affairs, Nick's has disclosed payments
within 90 days of its bankruptcy of $507,374, the vast majority of
which are payments to trades and vendors which were arguably in the
ordinary course of its business.
Sarillo's assets are set forth in his schedules generally consist
of the following:
* Tangible personal property $2,900
* Cash and equivalents $9,730
* Interests in entities as set forth
-- Nick’s U, Inc dba Trust and Track Institute
-- DNA Enterprises, LLC
-- Bowes & Randall LLC
-- 9N710 Randall Road LLC
-- Caerus Oil and Gas LLC
* Retirement Account $4,600
* Capital Account - Nick's $226,200
* Capital Account DNA Enterprises $201,000
* Insurance Cash Value $4,548
Interests in the 9N710 Randall Road and Caerus Oil and Gas LLC are
deemed to be of no value. Interests in Nick's U, Inc. dba Trust
and Track Institute and DNA Enterprises, LLC have no market value
and are fully dependent upon Sarillo's personal efforts on an
on-going basis. Bowes and Randall, LLC has value only in the even
that Nick’s is able to pay rent so that Bowes and Randall, LLC
can service its mortgage on an ongoing basis.
Nick's will continue to operate its restaurants as a going concern.
Secured and unsecured creditors will be paid from operations, with
Class 7(a) general unsecured creditors paid from Nick's Excess Cash
Flow generated over the next five years following the Plan
Effective Date. Class 7(b) general unsecured creditors of Sarillo
will receive payment from Sarillo's Disposable Income generated
over the next five (5) years following the Plan Effective Date.
Nick's generated gross income in 2018 of $6,489,096 and recognized
a profit in the amount of $136,578. In 2019, Nick's generated
gross income of $5,277,241 and recognized a loss in the amount of
($228,584. According to Nick’s operating reports (and adding the
first eight days of January), from January 1 through for March
2020, Nick's has generated gross income of $941,382. Total
disbursements during this time period were averaged $930.377, which
incorporated costs of ordinary course operations in addition to
those costs specific to a debtor-in-possession arising in the
bankruptcy proceeding.
A full-text copy of the Joint Disclosure Statement dated May 6,
2020, is available at https://tinyurl.com/y9wo7hcr from
PacerMonitor.com at no charge.
Counsel for Nick's Pizza & Pub, Ltd.:
Matthew T. Gensburg
E. Philip Groben
Gensburg, Calandriello & Kanter, P.C.
200 West Adams Street, Suite 2425
Chicago, Illinois 60606
Tel: (312) 263-2200
Fax: (312) 263-2242
E-mail: mgensburg@gcklegal.com
E-mail: pgroben@gcklegal.com
Counsel for Nicholas F. Sarillo:
David P. Leibowitz
Paul M. Bauch
53 West Jackson Blvd., Suite 1115
Chicago, Illinois 60604
Tel: (312) 588-5000
Fax: (312) 427-5709
E-mail: dleibowitz@lakelaw.com
E-mail: pbauch@lakelaw.com
About Nick's Pizza & Pub Ltd
Nick's Pizza & Pub, Ltd. operates a family restaurant in Crystal
Lake, Ill., which opened in 1995, and in Elgin, Ill., which opened
in 2005.
Nick's Pizza & Pub sought Chapter 11 petition (Bankr. N.D. Ill.
Case No. 20-00551) on Jan. 7, 2020. At the time of the filing, the
Debtor disclosed assets of between $1 million and $10 million and
liabilities of the same range. Judge Lashonda A. Hunt oversees the
case. Gensburg Calandriello & Kanter, P.C. is the Debtor's legal
counsel.
NMC HEALTH: Chapter 15 Case Summary
-----------------------------------
Chapter 15 Debtor: NMC Health PLC
Suite 3, Regency House
91 Western Road
Brighton, BN1 2NW
England
Nature of Business: Healthcare
Foreign Proceeding: High Court of Justice, Business
and Property Courts of England & Wales
Insolvency & Companies List
Chapter 15 Petition Date: May 28, 2020
Court: United States Bankruptcy Court
District of Delaware
Case No.: 20-11385
Judge: Hon. Mary F. Walrath
Foreign Representative: Richard Dixon
Mark Firmin
Ben Cairns
U.S. Counsel: Martin R. Craig, Esq.
DLA Piper LLP (US)
1201 North Market Street, Suite 2100
Wilmington, DE 19801
Tel: (302) 468-5700
E-mail: craig.martin@us.dlapiper.com
Estimated Assets: Unknown
Estimated Debts: Unknown
NOODLES GROUP: Court Approves Disclosure Statement
--------------------------------------------------
Judge John K. Sherwood has ordered that the Disclosure Statement
filed by Noodles Group Inc. is conditionally approved.
June 2, 2020 is fixed as the last day for filing and serving
written objections to the Disclosure Statement and confirmation of
the Plan.
June 2, 2020 is fixed as the last day for filing written
acceptances or rejections of the Plan under D.N.J. LBR 3018-1(a).
A hearing will be held on June 9, 2020 at 10:00 a.m. (a date within
45 days of the filing of the Plan) for final approval of the
Disclosure Statement (if a written objection has been timely filed)
and for confirmation of the Plan before the Honorable John K.
Sherwood, United States Bankruptcy Court, District of New Jersey,
50 Walnut Street, Newark, NJ 7102, in Courtroom 3D.
Counsel for the Debtor:
Paul Gauer
347 Franklin Street
Bloomfield, NJ 07003
Tel: (973) 743-7050
Fax: (973) 743-9173
E-mail: gauerlaw@aol.com
A full-text copy of the Combined Plan of Reorganization and
Disclosure Statement dated May 4, 2020, is available at
https://tinyurl.com/y8hxhqee from PacerMonitor.com at no charge.
About Noodles Group Inc
Noodles Group, Inc. is a Thai-fusion restaurant located at 1029
Stuyvesant Avenue, Union, NJ. Noodles Group Inc. sought Chapter 11
protection (Bankr. D.N.J. Case No. 19-23398) on July 9, 2019. Paul
Gauer in Bloombfield, New Jersey, serves as counsel to the Debtor.
NSHE CA BULLS: Needs to Sell for $13 Million to Pay Claims in Full
------------------------------------------------------------------
NSHE CA Bulls, LLC, submitted a Chapter 11 Plan and a Disclosure
Statement.
Post-petition, the sale of GW's assets fell through in the midst of
the COVID-19 pandemic, so GW will be examining ways to finance the
Debtor's obligations independent of that sale. GW can move to take
measures that it was restricted from doing while the sale remained
pending, including finishing certain projects and other sales,
restructuring certain assets, and/or obtaining bridge financing or
other financing. Altogether, GW possesses real property assets in
excess of $150,000,000 with less than 50 percent debt. GW is
presently working on restructuring its entire Arizona land
portfolio with the goal of drawing sufficient funds to refinance
the Debtor’s Real Property.
Still, the Debtor emphasizes that its proposed Plan of
Reorganization is not reliant on GW, and the Debtor will be
exploring other means of satisfying the claims of all creditors in
full, with interest within a limited period of time including by a
potential sale of the Debtor’s Real Property. As of the date of
this Disclosure Statement, the Debtor has sought the advice of at
least one real estate broker, who has advised against listing the
Real Property for sale at this immediate time under the current
circumstances. However, based on reports of changing state and
local guidance, the Debtor believes that restrictions will be
lifted sometime within the next approximately one to two months
sufficiently in order for real estate transactions to proceed with
a level of frequency and volume more typical of the sale of this
type of asset.
Mr. Gray currently occupies the Real Property and cares for it.
Mr. Gray will continue to do so until the Debtor’s Plan is
confirmed, as well as after confirmation of the Debtor’s Plan.
Mr. Gray and his family own another multi-million dollar home near
the beach in La Jolla, where they normally live while in La Jolla.
To avoid the vandalism, trespassing, and break-ins regularly
experienced with Debtor's Real Property in the past when the
oceanfront house sat vacant between rentals, Mr. Gray and his wife
have elected to occupy the Debtor's property as caretakers while
also paying all costs of maintaining the property.
While the long-term rental rate for the Real Property is estimated
to be approximately $25,000 per month, Mr. Gray does not pay rent
to the Debtor, but nor does he charge a management fee to the
Debtor. If required to pay rent, Mr. Gray and his wife will move
to their other property in La Jolla. However, the Debtor does not
believe this to be in the best interests of the estate, since the
Real Property will be subject to an increased risk of vandalism,
trespassing, and break-ins. The Debtor believes that an empty,
unoccupied property would only increase the likelihood of the
reoccurrence of such events and result in the rapid decline of the
property’s value and its marketability. Indeed, the Debtor’s
insurer has stressed the importance that the Real Property remains
occupied.
The Plan provides that:
* Class 1 Secured Claim of Wells Fargo Bank, N.A. At the
Debtor's election (with such election to be made in writing to
Wells Fargo on the Effective Date), the Debtor’s Plan proposes to
either:
(1) permit the holder of an Allowed Class 1 Claim to retain
its full lien in the Debtor’s Real Property, and de-accelerate
payment of such Claim and cure any default that occurred pursuant
to Section 1124(2) of the Bankruptcy Code by, among other means
authorized by said Code Section, reinstating the debt or paying the
full amount of the Allowed Claim on or before the later of (i) 180
days from the Effective Date, or (ii) 30 days after the Claim
becomes an Allowed Claim; or
(2) permit the holder of an Allowed Class 1 Claim to retain
its full lien in the Debtor’s Real Property, and pay the Allowed
Claim in full, together with interest on principal accruing from
and after the Effective Date at the non-default rate of interest
specified in the loan documents between Wells Fargo and the Debtor
(or such other rate as the Court may allow or fix on or before the
Confirmation Date), on or before the later of: (i) 180 days from
the Effective Date, or (ii) 30 days after such Claim becomes an
Allowed Claim. This class is impaired.
* Class 2 Secured Claim of Strategic Emerging Economics, Inc.
The Debtor's Plan proposes to permit the holder of an Allowed Class
12 Claim to retain its full lien in the Debtor's Real Property, and
pay the Allowed Claim in full, together with fixed simple interest
on principal accruing from and after the Effective Date at the
Prime Rate of interest as reported by the Wall Street Journal plus
5 percent per annum (or such other rate as the Court may allow or
fix on or before the Confirmation Date), on or before the later of:
(i) 180 days from the Effective Date, or (ii) 30 days after such
Claim becomes an Allowed Claim. Class 2 is impaired.
* Class 3 Unsecured Claims. The Debtor's Plan proposes to pay
the holder of an Allowed Class 3 Claim the full amount of its
Allowed Claim, in cash, together with simple interest on principal
accruing from and after the Effective Date at the rate of five
percent (5%) per annum, on or before the later of (i) 180 days from
the Effective Date, or (ii) 30 days after the Claim becomes an
Allowed Claim. Class 3 is impaired.
One of the Debtor's creditors, Strategic, obtained an appraisal
valuing the Real Property at $10,000,000. If the Real Property
sells for $10,000,000, then the Debtor may not be able to satisfy
all claims in full. On the other hand, the Debtor is in possession
of two appraisals valuing the property at $13,000,000 as of Sept.
27, 2019 and as of November 5, 2019. If the Real Property sells
for that amount or more, then the Debtor will be able to fully
satisfy its Plan obligations.
The Debtor's attorney received a prepetition retainer from the
Debtor via a loan to the Debtor by Bruce Gray in the amount of
$30,000. As of the date of this Disclosure Statement, $29,010 of
the retainer remained available to satisfy the Firm's
administrative claim. Fees incurred in excess of the remaining
retainer will be paid with an unsecured loan from Bruce Gray or an
affiliate of Mr. Gray.
A full-text copy of the Disclosure Statement dated May 6, 2020, is
available at https://tinyurl.com/ybfde2bu 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, 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 Law
Offices of Kit J. Gardner is Debtor's legal counsel.
On March 16, 2020, the Debtor filed its Chapter 11 plan, which
proposes to pay unsecured creditors in full.
O'LOUGHLIN LTD: Court to Approve Disclosure Statement
-----------------------------------------------------
Judge John P. Gustafson has ordered that the Disclosure Statement
filed by O’Loughlin, Ltd. will be APPROVED.
The Debtor-in-Possession will submit proposed Order(s) approving
the Disclosure Statement and setting dates for voting, filing
objections, etc., with a confirmation date of June 30, 2020 at 2:00
p.m.
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.
OCTAVE MUSIC: Moody's Cuts CFR to B3 & Alters Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service has downgraded The Octave Music Group,
Inc.'s Corporate Family Rating to B3 from B2, Probability of
Default Rating to Caa1-PD from B3-PD and bank credit facilities
ratings to B3 from B2. The outlook was revised to negative from
stable.
Following is a summary of its rating actions:
Ratings Downgraded:
Issuer: The Octave Music Group, Inc.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to Caa1-PD from B3-PD
$25 Million Amended Senior Secured First-Lien Revolving Credit
Facility due 2024, Downgraded to B3 (LGD3) from B2 (LGD3)
$290 Million ($281.9 Million outstanding) Amended Senior Secured
First-Lien Term Loan due 2025, Downgraded to B3 (LGD3) from B2
(LGD3)
Outlook Actions:
Issuer: The Octave Music Group, Inc.
Outlook, Changed to Negative from Stable
RATINGS RATIONALE
The downgrade action reflects the significant impact that the novel
coronavirus pandemic will have on Octave Music's operating and
financial performance in 2020. The closure of bars, restaurants and
retail establishments during the recent lockdowns across North
America and Europe, where the company maintains and operates its
entertainment jukeboxes, will lead to a substantial, albeit
temporary, deterioration in Octave Music's profitability and a
spike in financial leverage to over 10x (Moody's adjusted) from
5.8x at March 29, 2020 as well as negative free cash flow
generation due to the inevitable cash burn. While many regions in
North America and Europe are now gradually reopening their
economies, Moody's expects customer traffic in the company's
jukebox locations to remain well below historical levels due to
rising joblessness, reduced occupancy guidelines and patrons opting
for home delivery, carryout and online shopping to avoid public
gatherings and a potential resurgence of infections amid continuing
circulation of the virus in the population. As the virus threat is
eventually neutralized and consumer spending gradually rebounds in
2021, Moody's projects leverage will improve to the 7.5x-8x area by
the end of next year. However, Moody's does not expect leverage to
return to pre-COVID-19 levels near the 6x area over the rating
horizon given the expectation that some small-to-medium sized
restaurants and medium-to-large sized apparel/specialty retailers
may scale down or file for bankruptcy protection.
The negative outlook reflects governance risks, specifically the
likelihood that leverage will remain elevated above 7x (Moody's
adjusted) over the next two years given Octave Music's current
operational challenges and dependence on consumer discretionary
spending, which Moody's expects will remain depressed for several
quarters. The negative outlook also embeds the numerous
uncertainties related to the social considerations and economic
impact from COVID-19 on the company's cash flows, leverage and
liquidity. The magnitude of the impact will depend on the depth and
duration of the pandemic, the impact that government restrictions
to curb the virus will have on consumer behavior, the duration of
lockdowns in geographies that Octave Music operates as well as the
timeline for reopening bars, restaurants and retail establishments.
The auditor's expressed opinion casting substantial doubt as to
whether the company can continue as a going concern as a result of
COVID-19 is also embedded in the negative outlook.
Prior to the virus outbreak, US restaurant and retail locations
were experiencing weak customer traffic trends due to consumers
increasing usage of e-commerce sites for online shopping and home
delivery of groceries, meal kits, apparel and home goods. During
the pandemic, most bars, restaurants and retailers were subject to
mandatory closures with the exception of supermarkets and
pharmacies that were deemed essential. As the US and other
countries lift the coronavirus restrictions and begin the process
of reopening their economies, Moody's expects an acceleration of
restaurant and retail secular trends will pressure customer traffic
in the company's jukebox locations. Social distancing guidelines
will remain in effect as these sites reopen, which will reduce the
volume of patrons, average weekly coinage per jukebox as well as
shipments of new and replacement installations. During the
reopening phases and for a period of time thereafter, Moody's
expects consumer behavior to shift to at-home activities with less
out-of-home entertainment activities compared to periods prior to
COVID-19.
Moody's expects US real GDP to contract by 5.7% in 2020. Given the
economic recession this year and the prospect of extended business
closures and high rates of unemployment, an erosion of consumer
confidence will lead to a reduction in discretionary consumption.
With roughly two-thirds of Octave Music's revenue derived from the
TouchTunes jukebox segment, Moody's expects this business to
experience the most pressure with 30%-40% revenue declines due to
its sizable exposure to SMBs, which are more vulnerable in the
current downturn and expected to experience reduced consumer
spending as well as an outsized number of business failures,
especially among bars and restaurants.
In the first calendar quarter, total jukebox units shipped declined
16%, average active jukeboxes decreased 6.4%, average weekly
coinage per jukebox fell 7.3% and total gross coinage dropped 13.2%
in the company's core North American operations. The mobile app is
a significant driver of Octave Music's cashflow given that mobile
coinage accounts for about 56% of total gross coinage and mobile
users typically pay a higher average price per song and purchase
more premium features. The mobile app is used when the patron is at
the jukebox location and encourages users to play jukebox tunes
from their seats. While mobile coinage increased 15% year-over-year
in the first eleven weeks of Q1 2020, Moody's estimates mobile
declined around 80%-90% in the last two weeks of the quarter due to
COVID-19 venue closures, resulting in a 1% decline over the entire
quarter. As some of these venues reopen, Moody's expects
year-over-year declines to improve from the March nadir.
Despite revenue pressures in the jukebox business, Moody's expects
the PlayNetwork background music segment (about one-third of
revenue) to provide some near-term downside cushion against
spending pullbacks given its recurring subscription revenue model.
However, Moody's expects this segment to decline 15%-25% given the
sizable exposure to more challenged sectors such as apparel and
specialty retailers, in-venue dining, big box retailers and
hospitality that are more likely to be hurt due to social
distancing guidelines, risk of infection and accelerated shift of
consumer spending to online retail channels. Several
medium-to-large sized retailers have already filed for bankruptcy
protection and more may follow. As such, Moody's expects renewal
rates to fall over the coming year and systems integration demand
to drop as clients in these sectors reduce, cancel or delay their
subscriptions and reduce discretionary spend. Clients with weak
liquidity and based in regions more severely impacted by the
coronavirus will likely seek to extend payment terms, which could
negatively impact working capital and lead to an increase in the
company's cash conversion cycle. Somewhat offsetting this is
PlayNetwork's exposure to less challenged sectors such as telecom
and fast food restaurants, which Moody's estimates collectively
account for about 37% of segment revenue. Notably, several fast
food restaurants have adapted to the pandemic by offering curbside
and drive-thru pickup, local delivery and nationwide shipping.
Moody's recognizes that differences in number of cases across
geographic locations (hotspot vs. non-hotspot) as well as the
rolling effects of the virus will drive the degree of revenue
decline and recovery given the company's broad geographic presence
across North America, which accounts for roughly 70% of total
revenue and 85% of jukebox segment revenue. The impact to the
company's financial performance will mirror the timing of the
outbreak, economic shutdown and eventual reopening in each region.
Europe and the US will mostly impact Octave Music's performance in
Q2 2020 and potentially in Q3 2020, offset by growth in
Asia-Pacific as that region's economies reopen. Given that its
jukeboxes are manufactured in Asia, the company witnessed some
supply chain disruptions in Q1 2020; however in recent weeks it has
improved, facilitating a steady inventory buildup to fulfill
installation demand. To stimulate client demand over the coming
quarters, Moody's expects Octave Music will selectively offer
promotional discounts for its jukeboxes.
Over the coming quarters, Moody's projects Octave Music will
generate negative cash flow from operations and experience delayed
accounts receivable collections as challenged clients pay bills at
a slower pace. The company has implement plans to minimize its cash
burn as much as possible during the closure period via a
combination of natural expense reductions that decline with revenue
contraction (i.e., revenue share paid to operators and license fees
paid to music content providers) and management actions aimed at
reducing operating costs in the short-run. This includes headcount
and back office reductions (including furloughs and reductions in
salaries, bonuses and temporary workers), negotiated reductions in
vendor pricing, consolidation of accounting systems, lower capex
and rent deferrals from landlords. Octave Music is also taking
advantage of government grant assistance programs enacted by the US
and Canadian national governments as well as employee payroll tax
deferrals provided by the US Coronavirus, Aid, Relief and Economic
Security (CARES) Act.
Octave Music's B3 CFR is constrained by its small revenue base,
high financial leverage, and exposure to SMB clients and consumer
discretionary spend, which could lead to cyclical or volatile
revenue, particularly in an economic recession. Over the past
several years, the jukebox installed base has experienced
flat-to-declining growth due to secular pressures on customer
traffic in bars and restaurants; however, this has been offset by
rising average weekly coinage per jukebox driven by product
upgrades, new features and growing mobile coinage. Octave Music's
background music business exposes the company to repricing risk at
contract renewals, a challenged retail environment and increasing
churn in North America, partially offset by growth in Asia-Pacific.
The background music segment's margins are lower than the jukebox
segment's margins, but has the potential for higher expected growth
and margin improvement longer-term as the business scales via the
recently launched collaboration with Apple Music to extend into new
client verticals such as fitness, healthcare, banking and
telecommunications.
The rating is supported by Octave Music's market leadership
position with the largest network of digitally connected jukeboxes
in North America. It also reflects barriers to entry that stem from
its cumulative R&D spend, patented technology and highly fragmented
network of 2,500+ independent operators. Jukebox-related capital
expenditures are low given that Octave Music's operator network is
responsible for all installation, repair and maintenance of the
installed fleet. Additionally, the rating considers the
long-standing relationships with major labels, publishers and
performance rights organizations that provide music content via
multi-year licensing agreements, recurring music and media services
revenue supported by multi-year contracts, and diversification from
the PlayNetwork segment, which provides exposure to enterprise and
international customers.
Moody's expects Octave Music to have weak liquidity over the coming
12-15 months. While the company has historically generated positive
free cash flow arising from a profitable business model
characterized by modest working capital and capex, Moody's expects
free cash flow generation to be negative this year due to
significant revenue declines and EBITDA shortfalls. Over the next
twelve months, Moody's projects negative free cash flow in the
range of -$10 million to -$20 million. Cash balances were $48.5
million at March 29, 2020, which includes $24.7 million in
borrowings drawn under the $25 million amended revolving credit
facility following an $8.5 million repayment on the amended
first-lien term loan. The term loan has a mandatory amortization of
approximately $10 million annually or $2.5 million quarterly,
commencing Q2 2020, which the company is expected to pay via
internal cash sources.
Owing to the company's operating challenges, in early May, Octave
Music proactively obtained an amendment from its lenders for
covenant relief that delays the Maximum Total Secured Net Leverage
Ratio step downs that were scheduled to begin in the December 2020
quarter. Instead of stepping down to 5.5x in December 2020 (from 6x
currently), 5.5x in June 2021 and 5x in December 2021, the revised
covenant will remain at 6x through June 2021, stepping down to
5.75x in September 2021, 5.5x in March 2022, 5.25x in June 2022 and
5x in September 2022. The stepdown to 4.5x in December 2022 will
remain unchanged. The amendment also allows for the replacement of
Consolidated EBITDA for each month from March 2020 through August
2020 with actual Consolidated EBITDA for the respective months of
2019 for measurement purposes. The company has the option to cancel
the use of replacement Consolidated EBITDA when actual EBITDA
performance has improved.
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 interactive
music jukebox and background music sectors have been some of the
sectors most significantly affected by the shock given their
sensitivity to consumer demand and sentiment. More specifically,
the weaknesses in Octave Music's credit profile, including its
exposure to US, European and Asian economies, have left it
vulnerable to shifts in market sentiment in these unprecedented
operating conditions and Octave Music remains vulnerable to the
outbreak's continuing spread. Moody's regards the coronavirus
outbreak as a social risk under its ESG framework, given the
substantial implications for public health and safety. Its action
reflects the impact on Octave Music of the breadth and severity of
the shock, and the broad deterioration in credit quality it has
triggered.
A social risk that Moody's consider in Octave Music's credit
profile is the increasing proliferation of on-demand interactive
music streaming services that could potentially compete for Octave
Music's business customers, if they are able to maneuver around the
challenges of licensing music in public spaces. Somewhat offsetting
this risk is PlayNetwork's recently launched partnership with Apple
Music that establishes a new background music service for
enterprises. Apple Music for Business allows enterprises to play a
curated mix of Apple Music and custom playlists that express their
brand and connect with their customers. PlayNetwork is the provider
of Apple Music for Business and responsible for technology
development, music curation, licensing, marketing and sales, and
owns the direct relationship with brands.
As a portfolio company of private equity sponsor Searchlight
Capital Partners, Moody's expects the company's financial strategy
to be relatively aggressive and governance risk to be elevated
given that equity sponsors have a tendency to tolerate high
leverage and favor high capital return strategies.
FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating outlook could be revised to stable if organic revenue
growth returns to the low-single digit percentage range with
20%-25% adjusted EBITDA margins, financial leverage in the 6x-7x
band (Moody's adjusted) and positive free cash flow to debt in the
2.5%-5% range (Moody's adjusted). Moody's would also require an
unqualified financial audit.
A ratings upgrade is unlikely over the near-term, especially if the
coronavirus outbreak and economic recession continue to impact
consumer discretionary spending and out-of-home dining and
entertainment. Over time, an upgrade could occur if Octave Music
exhibits revenue growth and EBITDA margin expansion that lead to a
sustained reduction in total debt to EBITDA leverage below 6x
(Moody's adjusted) and free cash flow to adjusted debt of at least
5%. The company would also need to maintain a good liquidity
position and continue to exhibit prudent financial policies.
Ratings could experience downward pressure if financial leverage,
as measured by total debt to EBITDA, were sustained above 8x
(Moody's adjusted), liquidity experiences further deterioration
such that free cash flow generation becomes meaningfully negative
or the risk of default or a distressed exchange becomes elevated.
The Octave Music Group, Inc., headquartered in New York, N.Y. and
privately majority-owned by Searchlight Capital Partners, L.P., is
a leading provider of out-of-home digital-based interactive music
and entertainment jukeboxes (TouchTunes), with a total global
installed base of roughly 70,000 units featured in bars,
restaurants, retail stores, hospitality establishments and other
locations across North America (approximately 63,000 units) and
Europe (approximately 7,500 units). Octave Music maintains a
network of over 2,500 jukebox operators in North America who
install the equipment in local venues and take responsibility for
maintenance, promotion, service and support. In May 2017, Octave
Music acquired PlayNetwork, Inc., a leading global provider of
in-store audio, visual and branded multimedia entertainment and
marketing solutions to department stores, specialty retailers,
restaurants, supermarkets and corporations with approximately
99,500 locations.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
OLMA XXI INC: Has Until Nov. 27 to File Plan & Disclosures
----------------------------------------------------------
Judge Nancy Hershey Lord of the U.S. Bankruptcy Court for the
Eastern District of New York has ordered that the time period for
Debtor Olma XXI, Inc. to file a chapter 11 plan of reorganization
and disclosure statement is extended to and including November 27,
2020.
A copy of the order dated May 8, 2020, is available at
https://tinyurl.com/ybw829yy from PacerMonitor at no charge.
About Olma XXI, Inc.
Olma-XXI, Inc., based in Brooklyn, NY, filed a Chapter 11 petition
(Bankr. E.D.N.Y. Case No. 19-44731) on Aug. 1, 2019. In the
petition signed by Valeri Eliachov, president, the Debtor disclosed
$246,471 in assets and $1,965,500 in liabilities. The Hon. Nancy
Hershey Lord oversees the case. Alla Kachan, Esq., at the Law
Offices of Alla Kachan, P.C., serves as bankruptcy counsel to the
Debtor.
PAR PETROLEUM: S&P Rates $100MM Senior Secured Notes 'BB-'
----------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '2'
recovery rating to Par Petroleum LLC and Par Petroleum Finance
Corp.'s proposed $100 million senior secured notes due 2026. The
'2' recovery rating indicates S&P's expectation for substantial
(70%-90%; rounded estimate: 75%) recovery in the event of a payment
default.
Par intends to use the net proceeds from the notes to add cash to
its balance sheet and for general corporate purposes. The proposed
notes will rank pari passu with Par's existing senior secured
debt.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario contemplates a prolonged
cyclical downturn and operational issues at the Hawaii refinery
such that sales of the company's refined products fall
significantly and reduce its cash flow. S&P uses a discrete asset
valuation method to value the refineries and an EBITDA multiple
approach for both the logistics and retail segments of Par
Petroleum's business.
-- S&P's hypothetical default occurs in 2024 and we assume all of
the company's debt would include six months of interest at the time
of default.
Simulated default assumptions
-- Simulated year of default: 2024
-- Midstream and retail value at emergence: $302 million
-- Refining capacity at Hawaii: 148,000 barrels per day (bpd)
-- Refining capacity at Wyoming: 18,000 bpd
-- Refining capacity at Washington: 42,000 bpd
-- Valuation bpd Hawaii: $900
-- Valuation bpd Wyoming: $1,200
-- Valuation bpd Washington: $1,000
-- Refining value at emergence: $197 million
Simplified waterfall
-- Gross enterprise value: $499 million
-- Net enterprise value (after 5% administrative costs): $474
million
-- Total first-lien debt: $615 million
-- Value to first-lien debt claims: $474 million
-- Recovery expectations: (70%-90%; rounded estimate: 75%)
Note: All debt amounts include six months of prepetition interest.
PARTY CITY OF RALEIGH: Case Summary & 20 Top Unsecured Creditors
----------------------------------------------------------------
Debtor: Party City of Raleigh, Inc.
FDBA Party City of Durham, Inc.
FDBA Party City of Cary, Inc.
FDBA Party City of Garner, Inc.
FDBA Party City of Brier Creek, Inc.
9600 Post Mill Place
Raleigh, NC 27615
Business Description: Party City of Raleigh, Inc. owns and
operates five Party City retail stores in
eastern and central North Carolina.
Chapter 11 Petition Date: May 28, 2020
Court: United States Bankruptcy Court
Eastern District of North Carolina
Case No.: 20-02060
Judge: Hon. Joseph N. Callaway
Debtor's Counsel: John A. Northen, Esq.
NORTHEN BLUE, LLP
PO Box 2208
Chapel Hill, NC 27515
Tel: 919-968-4441
E-mail: jan@nbfirm.com
Debtor's
Accountant: Ted R. Watson, Esq.
WATSON & DAVIS, PLLC
Total Assets: $2,444,420
Total Liabilities: $1,911,763
The petition was signed by Robert Jones, president.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/ae0Mz1
PAUL LOGSDON: Plan of Reorganization Confirmed by Judge
-------------------------------------------------------
Judge Charles E. Rendlen, III, has entered findings of fact,
conclusions of law, and order approving the First Amended Joint
Disclosure Statement and confirming the First Amended Joint Plan of
Reorganization filed by Debtors Paul Logsdon, Inc. and Paul A.
Logsdon.
The Plan has been proposed in good faith and not by any means
forbidden by law and therefore satisfies the requirements of Sec.
1129(a)(3) of the Bankruptcy Code.
The Plan complies with the applicable provisions of the United
States Bankruptcy Code, 11 U.S.C. Sec. 101 et seq. (the Code),
including but not limited to the provisions of Code Sec. 1122 and
1123, and the Federal Rules of Bankruptcy Procedures3 and therefore
satisfies the requirements of Code Sec. 1129(a)(1).
A copy of the order dated May 7, 2020, is available at
https://tinyurl.com/ya8y8xfm from PacerMonitor at no charge.
About Paul Logsdon
Paul Logsdon Inc. is a Missouri corporation that conducts crop
farming operations. Incorporated on Feb. 3, 2003, PLI Inc. farms
over 1,000 acres of land owned by Paul A. Logsdon in Lewis and
Clark Counties in Northeastern Missouri. Mr. Logsdon is the sole
shareholder.
Paul Logsdon, Inc. filed a Chapter 11 petition (Bankr. E.D. Mo.
Case No. 19-20081) on April 9, 2019. At the time of the filing,
the Debtor disclosed $695,400 in assets and $8,934,390 in
liabilities. David M. Dare, Esq., at Herren Dare & Street, serves
as the Debtor's bankruptcy counsel.
PLUS THERAPEUTICS: Series S Warrant Delisted from Nasdaq
--------------------------------------------------------
The Nasdaq Stock Market LLC filed a Form 25 with the Securities and
Exchange Commission notifying the removal from listing or
registration of Plus Therapeutics, Inc.'s Series S Warrant expiring
May 28, 2020.
About Plus Therapeutics
Headquartered in Austin, Texas, Plus Therapeutics, Inc. --
http://www.plustherapeutics.com-- is a clinical-stage
pharmaceutical company focused on the discovery, development, and
manufacturing scale up of complex and innovative treatments for
patients battling cancer and other life-threatening diseases.
Plus Therapeutics reported a net loss of $10.89 million for the
year ended Dec. 31, 2019, compared to a net loss of $12.63 million
for the year ended Dec. 31, 2018. As of March 31, 2020, the
Company had $20.97 million in total assets, $20.88 million in total
liabilities, and $85,000 in total stockholders' equity.
BDO USA, LLP, in San Diego, California, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
March 30, 2020 citing that the Company has suffered recurring
losses and negative cash flows from operations that raise
substantial doubt about its ability to continue as a going concern.
POP GOURMET: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: POP Gourmet, LLC
FDBA POP Gourmet Foods
14900 Interurban Ave S, Ste 257
Seattle, WA 98168
Business Description: POP Gourmet, LLC --
https://www.popgourmetpopcorn.com -- is a
manufacturer of potato chips, corn chips,
popcorn, and similar snacks.
Chapter 11 Petition Date: May 26, 2020
Court: United States Bankruptcy Court
Western District of Washington
Case No.: 20-11497
Judge: Hon. Timothy W. Dore
Debtor's Counsel: John R. Rizzardi, Esq.
CAIRNCROSS & HEMPELMANN, P.S.
524 Second Avenue
Suite 500
Seattle, WA 98104
Tel: 206-587-0700
E-mail: jrizzardi@cairncross.com
Total Assets: $463,637
Total Liabilities: $5,034,487
The petition was signed by Steve Gallo, CEO.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/wacA8d
PRECISION HOTEL: Has Until July 3 to File Plan & Disclosures
------------------------------------------------------------
Judge Michael G. Williamson of the U.S. Bankruptcy Court for the
Middle District of Florida, Tampa Division, has ordered that the
deadline for Debtor Precision Hotel Management Company to file plan
and disclosure statement is additional extended through July 3,
2020.
A copy of the order dated May 8, 2020, is available at
https://tinyurl.com/yctenzxx from PacerMonitor at no charge.
The Debtor is represented by Jake C. Blanchard, Esq.
About Precision Hotel Management Company
Precision Hotel Management Company is a privately held enterprise
that operates in the hospitality industry. Precision Hotel sought
Chapter 11 protection (Bankr. M.D. Fla. Case No. 19-08449) on Sept.
5, 2019. At the time of the filing, the Debtor was estimated to
have assets of between $1 million and $10 million and liabilities
of the same range. Judge Michael G. Williamson oversees the case.
Blanchard Law, P.A., is the Debtor's legal counsel.
REJUVI LABORATORY: Objects to Creditor's Reorganization Plan
------------------------------------------------------------
Rejuvi Laboratory, Inc., submits an objection to the Combined Plan
of Reorganization and Disclosure Statement filed by creditor Maria
Corso.
Rejuvi points out that Ms. Corso's Plan proposes that, if and when
a ruling allowing Ms. Corso's claim becomes final, Rejuvi shall
make an initial $400,000 payment followed by quarterly payments
over a five-year period (resulting in quarterly payments of
$61,027.50 totaling $244,110 per year).
Rejuvi asserts that Ms. Corso's Plan is premised on faulty
projections.
Rejuvi further points out that Ms. Corso's Plan proposes to pay her
claim over time at an interest rate of 6%. This interest rate is
impermissibly high and she provides no explanation for it. Ms.
Corso's Plan applies the correct rate—the federal judgment rate
-- to the claims of other creditors.
Attorneys for Rejuvi Laboratory:
Stephen D. Finestone
Jennifer C. Hayes
Ryan A. Witthans
FINESTONE HAYES LLP
456 Montgomery Street, Floor 20
San Francisco, CA 94104
Tel.: (415) 421-2624
Fax: (415) 398-2820
E-mail: sfinestone@fhlawllp.com
E-mail: jhayes@fhlawllp.com
E-mail: rwitthans@fhlawllp.com
About Rejuvi Laboratory
Founded in 1988 by Dr. Wade Cheng, Rejuvi Laboratory, Inc. --
http://www.rejuvilab.com/-- is an integrated cosmetic laboratory
with ongoing research, development and production capability.
Rejuvi Laboratory sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Cal. Case No. 18-31069) on Sept. 27,
2018. In the petition signed by Wei Cheng, president, the Debtor
disclosed $2,870,211 in assets and $1,357,213 in liabilities. Judge
Dennis Montali presides over the case.
Attorneys for the Debtor:
Stephen D. Finestone
Jennifer C. Hayes
FINESTONE HAYES LLP
456 Montgomery Street, 20th Floor
San Francisco, California 94104
Tel: (415) 421-2624
Fax: (415) 398-2820
E-mail: sfinestone@fhlawllp.com
REMARK HOLDINGS: Regains Compliance with Nasdaq Listing Rules
-------------------------------------------------------------
Remark Holdings received written notice on May 22, 2020 from the
Listing Qualifications Department of The Nasdaq Stock Market LLC
notifying the Company that it regained compliance with the $1.00
per share minimum bid price requirement because its common stock
closed at or above $1.00 per share for a period of 10 consecutive
business days. The Notice of Compliance also stated that the
Company regained compliance with the minimum MVLS requirement of
$35 million because our MVLS had been at or above $35 million for a
period of 10 consecutive business days. Per the Notice of
Compliance, Nasdaq considers both matters closed.
On Nov. 20, 2019, Remark Holdings received written notice from
Nasdaq notifying the Company that it was not in compliance with the
$1.00 per share minimum bid price requirement for continued listing
on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule
5550(a)(2).
On Dec. 30, 2019, the Company received written notice from Nasdaq
notifying the Company that it was not in compliance with the
minimum Market Value of Listed Securities requirement of $35
million for continued listing on the Nasdaq Capital Market pursuant
to Nasdaq Listing Rule 5550(b)(2).
About Remark Holdings
Remark Holdings -- http://www.remarkholdings.com/-- delivers an
integrated suite of AI solutions that enable businesses and
organizations to solve problems, reduce risk and deliver positive
outcomes. The company's easy-to-install AI products are being
rolled out in a wide range of applications within the retail,
financial, public safety and workplace arenas. The Company also
owns and operates digital media properties that deliver relevant,
dynamic content and e-commerce solutions. The company is
headquartered in Las Vegas, Nevada, with additional operations in
Los Angeles, California and in Beijing, Shanghai, Chengdu and
Hangzhou, China.
Remark reported a net loss of $21.56 million for the year ended
Dec. 31, 2018, following a net loss of $106.73 million for the year
ended Dec. 31, 2017. As of Sept. 30, 2019, the Company had $21.48
million in total assets, $41.71 million in total liabilities, and a
total stockholders' deficit of $20.22 million.
Cherry Bekaert LLP, in Atlanta, Georgia, the Company's auditor
since 2011, issued a "going concern" qualification in its report
dated April 1, 2019, citing that the Company has suffered recurring
losses from operations and negative cash flows from operating
activities and has a negative working capital and a stockholders'
deficit that raise substantial doubt about its ability to continue
as a going concern.
SAFETY PRODUCTS: Moody's Cuts CFR to Caa1, Outlook Negative
-----------------------------------------------------------
Moody's Investors Service downgraded its ratings for Safety
Products/JHC Acquisition Corp., 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 its senior secured bank
credit facility ratings (to B3 from B2). The ratings outlook is
negative.
"The downgrades reflect Justrite's weak profitability and
subsequent increase in adjusted debt-to-EBITDA over the last twelve
months ended March 2020, and its expectation that ongoing pressure
on the company's earnings will at least persist if not intensify
over the coming quarters," says Shirley Singh, Moody's lead analyst
for the company. "Cash flows have been significantly below its
expectations in recent periods, resulting in weaker liquidity which
will be compounded by challenging market conditions over the coming
quarters, including heightened competitive pressure and further
contraction of industrial demand," added Singh.
The rapid and widening spread of the coronavirus outbreak, the
deteriorating global economic outlook, very low and volatile 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, Justrite's levered balance sheet
coupled with exposure to the broadly pressured industrial sector
leave it vulnerable to shifts in market sentiment in these
unprecedented operating conditions, and the company remains exposed
to the ongoing adverse impact of the outbreak. Moody's regards the
coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.
Its actions reflect the impact on Justrite 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: Safety Products/JHC Acquisition Corp.
Corporate Family Rating, Downgraded to Caa1 from B3
Probability of Default Rating, Downgraded to Caa1-PD from B3-PD
Senior Secured Bank Credit Facility, Downgraded to B3 (LGD3) from
B2 (LGD3)
Outlook Actions:
Issuer: Safety Products/JHC Acquisition Corp.
Outlook, Changed to Negative from Stable
RATINGS RATIONALE
Justrite's Caa1 CFR reflects the company's high financial risk as
evidenced by its elevated adjusted debt-to-EBITDA in excess of
7.5x, modest scale with revenue size of less than $500 million, and
inherent cyclicality of its end markets. Justrite operates in a
highly competitive environment, which combined with an ongoing
shift to ecommerce and lower activity levels at regional
distributors amid the challenging market conditions will continue
to exert pressure on the company's earnings in 2020. The rating,
nonetheless, benefits from Justrite's well-stablished market
position as a manufacturer of safety products with leading brands,
patent protections, and customized offerings for specific customer
projects. Justrite leverages channel partnerships with its
distributors and serves diverse customer and vendor bases. The
company also benefits from the relatively non-discretionary nature
of its products which aligns with safety standards and regulatory
requirements, providing somewhat reliable demand for its products.
The negative outlook reflects the risk that weakness in Justrite's
end markets could accelerate and lead to a more pronounced
downturn, which would in turn result in higher leverage and weaker
liquidity provisions including increased revolver reliance and cash
flow deficits.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if economic conditions improve, earnings
and free cash flow become positive, adjusted debt-to-EBITDA is
sustained below 8x and EBITA-to-interest is sustained above 1x.
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.
The principal methodology used in these ratings was Manufacturing
Methodology published in March 2020.
Headquartered in Deerfield, Illinois, Safety Products/JHC
Acquisition Corp. (dba Justrite Safety Group or Justrite) is a
leading global manufacturer and supplier of non-personal protective
equipment safety solutions for industrial and compliance-oriented
end markets. The company has been majority-owned by Audax Group
since 2015.
SEMINOLE HARD ROCK: S&P Lowers ICR to 'B+'; Outlook Negative
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on
international restaurant, casino, and hotel owner, manager, and
franchisor Seminole Hard Rock Entertainment Inc. and Seminole Hard
Rock International LLC (collectively Hard Rock) to 'B+', and
removed the rating from CreditWatch where S&P placed it with
negative implications on March 20, 2020.
The 'BBB-' issue-level rating on Hard Rock's term loan remains on
CreditWatch with negative implications because the Seminole Tribe
of Florida remains on CreditWatch. The issue-level rating is one
notch below S&P's 'BBB' issuer credit rating on the Tribe since the
Tribe provides a full, irrevocable, and unconditional guarantee of
the debt but the guarantee is unsecured and ranks behind the
Tribe's gaming debt in payment priority.
S&P said, "We forecast Hard Rock's near-term liquidity position
will be strained, but we believe the Tribe would provide support if
needed. Under our base-case forecast, we expect Hard Rock will hit
a low point in its cash position in the next month or two while its
operations are running at limited capacity. Although we expect Hard
Rock could slowly rebuild cash balances starting in July, as
operations resume, if a large part of its properties remain closed
for longer, or the recovery is slower than we are anticipating, we
believe it could deplete most its cash balances by this fall. Under
that scenario, we believe the Tribe would provide liquidity to Hard
Rock since the Tribe has committed to providing capital resources
to support Hard Rock through May 2021 if needed. We also believe
the Tribe currently has sufficient resources to provide some
liquidity support to Hard Rock."
Hard Rock's sources of liquidity include $125 million of cash on
hand, as of Dec. 31, 2019. Hard Rock does not have a revolving
credit facility. The company's uses of liquidity include operating
expenses while cafes, hotels, and casinos are closed, about $20
million in annual interest expense, $19 million in amortization
payments this year under its term loan, about $43 million in rent
related to Hard Rock Casino Cincinnati, and modest levels of
maintenance capital expenditures and taxes. S&P believes Hard Rock
will suspend dividend payments to the Tribe for at least for the
next several months.
Hard Rock recently amended its credit agreement to suspend the
testing of its maximum total leverage and minimum fixed-charge
coverage covenants between June 30, 2020, and March 31, 2021, and
to add a minimum liquidity requirement through June 30, 2021.
S&P said, "Under our base-case forecast, we expect Hard Rock's
liquidity may dip below the minimum requirement, as defined under
the credit agreement, in June. We believe however that if Hard Rock
were to breach the minimum requirement, the Tribe could contribute
cash to ensure compliance or lenders may be amenable to a waiver
since the Tribe guarantees the debt."
S&P said, "We believe Hard Rock is strategically important to the
Tribe. The Tribe demonstrated Hard Rock's importance by its
willingness to provide a guarantee of Hard Rock's debt and to incur
additional leverage at its gaming operations to fund distributions
to Hard Rock entities for development projects. We believe the
Tribe is unlikely to sell Hard Rock because it is reasonably
successful and important to the group's long-term strategy. The
Hard Rock business diversifies the Tribe beyond gaming and serves
as a growth vehicle in the casino and hotel industry through joint
ventures, development projects, management contracts, and licensing
agreements in other gaming and lodging markets outside of Florida.
Additionally, the Tribe owns and operates two Hard Rock-branded
hotels and casinos in Tampa, Fla., and Hollywood, Fla., that
constitute more than two-thirds of its gaming EBITDA and benefit
from Hard Rock's good brand recognition. Furthermore, it
establishes an expanding network of Hard Rock-branded properties
that the Tribe could use to market to customers across the network.
The Tribe has specifically committed to providing liquidity support
to Hard Rock through May 2021.
"We believe Hard Rock will recover slowly once operations resume,
translating to lease-adjusted leverage remaining above 8x in 2021.
We believe Hard Rock's operations will be negatively affected by
lingering consumer fears around travel and being in crowded or
enclosed public spaces, and a global recession, which will weigh on
consumer discretionary spending. We believe Hard Rock's cafes,
which represent just under 50% of the company's EBITDA before
corporate overhead, will experience weak demand through 2021 given
the tourist-driven nature of the cafes (many of which are located
in destination markets that will likely experience weaker
visitation this year). In addition, we believe customers may have
lingering concerns around dining out and exposure to the virus.
Lastly, social distancing and other health and safety measures
implemented in its cafes to curb the spread of COVID-19 may hurt
the overall experience and could make it less desirable to
customers for some temporary period. We believe Hard Rock's
casinos, which represent around 45% of EBITDA, before corporate
overhead, will also experience weak demand through 2021 but may
recover somewhat faster than the cafes, since the company's casinos
are more regional in nature, less reliant on tourism, and
concentrated in markets with favorable demographics."
S&P's forecast for 2021 assumes revenue and EBITDA remain lower
than 2019 levels due to continued weak demand.
-- Total revenue declines around 3% to 5% relative to 2019.
-- Around a 15%-20% revenue decline, compared to 2019, in the
company's owned and franchised cafe segments.
-- About a 10% revenue decline, compared to 2019, in the company's
hotel segment.
-- About 50% growth, compared to 2019, in the company's casino
segment. The growth compared to 2019 is due to a full-year benefit
of the Hard Rock Cincinnati casino, which was acquired in September
2019, and a full year benefit of expansions, which opened in
October 2019, at the Hard Rock Tampa and Hard Rock Hollywood
properties.
-- EBITDA declines about 5%-10%, relative to 2019, given S&P's
forecast of revenue decline and assuming selling, general, and
administrative expenses remain about flat to 2019 levels.
-- This translates into lease-adjusted leverage improving in 2021,
but remaining high at more than 8x. In S&P's view, this level of
leverage would be unsustainable over the longer term without the
Tribe's support.
Environmental, Social, and Governance (ESG) Credit Factors for this
credit rating change:
-- Health and safety
S&P said, "The negative outlook reflects our forecast for
lease-adjusted leverage to remain high, above 8x at the end 2021
after spiking very high this year. The negative outlook also
reflects a high level of uncertainty about to Hard Rock's ability
to recover later this year and into 2021 following a significant
deterioration in cash flow and credit measures.
"We could lower the ratings if the depletion of Hard Rock's cash
balances is quicker and steeper than we currently anticipate, and
we no longer believed the Tribe would or could provide support.
Lower ratings could also be considered if we did not believe Hard
Rock's cash flow would recover next year in a manner that would
allow it to support its own ongoing liquidity needs.
"We are unlikely to revise the outlook to stable over the next year
given a high degree of uncertainty around when the coronavirus
might be contained and how long it might take visitation to Hard
Rock's properties and its cash flow to recover. Prior to revising
the outlook, Hard Rock's portfolio of assets would need to reopen
and we would need to assess customer demand upon reopening,
including the response to likely social distancing and other
operational changes concerning health and safety and how plausible
our assumed recovery path is in light of that demand. In the event
we believe the pace of Hard Rock's recovery will allow it to reduce
leverage below 8x in 2021 and rebuild liquidity that may have been
depleted during the closures, we could revise the outlook to
stable."
SOUTHEASTERN METAL: Court Conditionally Approves Disclosures
------------------------------------------------------------
Judge Brendan L. Shannon has ordered that the Disclosure Statement
filed by Southeastern Metal Products LLC, et al., is conditionally
approved.
The form of ballot is approved in all respects.
Any plan supplement must be filed with the Court not later than
June 15, 2020.
Ballots must be received on or before June 15, 2020 at 4:00 p.m.
(Eastern Time).
Objections to the adequacy of the Disclosure Statement or
confirmation of the Plan must be in writing and to be received by
all such parties on or before June 15, 2020 at 4:00 p.m. (Eastern
Time).
Any party supporting the Plan may file a reply to any objection to
confirmation of the Plan by June 17, 2020.
A hearing will be held before the Court on June 22, 2020 or as soon
thereafter as counsel can be heard, to consider confirmation of the
Plan at the United States Bankruptcy Court for the District of
Delaware, before the Honorable Chief Judge Brendan L. Shannon in
the United States Bankruptcy Court for the District of Delaware,
824 North Market Street, 6th Floor, Courtroom No. 1, Wilmington, DE
19801.
About Southeastern Metal Products
Southeastern Metal Products LLC is a contract manufacturing company
that specializes in fabrication and stampings for various
industries including telecommunications, transportation, appliance
and health and safety industries.
Southeastern Metal Products and its affiliates SEMP Texas, LLC and
Hospital Acquisition LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-10998) on May 6,
2019. At the time of the filing, Southeastern Metal disclosed
assets of between $1,000,001 and $10 million and liabilities of the
same range. SEMP Texas had estimated assets of less than $1 million
and liabilities of less than $500,000 while Hospital Acquisition
had estimated assets of less than $50,000 and liabilities of less
than $50,000.
The Debtors hired Weir & Partners LLP as counsel; Finley Group as
financial advisor; and Omni Management Group as claims and noticing
agent.
Andrew Vara, acting U.S. trustee for Region 3, appointed an
official committee of unsecured creditors on May 20, 2019.
Lowenstein Sandler LLP is the committee's legal counsel.
SOUTHEASTERN METAL: June 24 Plan Confirmation Hearing Set
---------------------------------------------------------
Debtors Southeastern Metal Products LLC (SEMP) and SEMP Texas LLC
(SEMP Texas) filed with the U.S. Bankruptcy Court for the District
of Delaware a motion for entry of an order conditionally approving
the Disclosure Statement.
On May 7, 2020, Judge Brendan L. Shannon granted the motion and
ordered that:
* The Disclosure Statement is conditionally approved as
containing adequate information within the meaning of Section 1125
of the Bankruptcy Code.
* June 15, 2020, is fixed as the last day to file any Plan
Supplement.
* June 15, 2020, at 4:00 p.m. (Eastern Time) is the voting
deadline.
* June 1, 2020, is fixed as the last day to file a motion if any
claimant seeks to have a claim temporarily allowed for purposes of
voting to accept or reject the Plan.
* June 15, 2020, at 4:00 p.m. (Eastern Time) is fixed as the
last day to file objections to the adequacy of the Disclosure
Statement or confirmation of the Plan.
* June 17, 2020, is fixed as the last day for any party
supporting the Plan to file a reply to any objection to
confirmation of the Plan.
* June 24, 2020, at 11:00 a.m. at the United States Bankruptcy
Court for the District of Delaware, before the Honorable Chief
Judge Brendan L. Shannon in the United States Bankruptcy Court for
the District of Delaware, 824 North Market Street, 6th Floor,
Courtroom No. 1, Wilmington, DE 19801 is the hearing to consider
confirmation of the Plan.
A copy of the order dated May 7, 2020, is available at
https://tinyurl.com/yawjp7cn from PacerMonitor at no charge.
About Southeastern Metal Products
Southeastern Metal Products LLC is a contract manufacturing company
that specializes in fabrication and stampings for various
industries including telecommunications, transportation, appliance
and health and safety industries.
Southeastern Metal Products and its affiliates SEMP Texas, LLC and
Hospital Acquisition LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-10998) on May 6,
2019. At the time of the filing, Southeastern Metal disclosed
assets of between $1,000,001 and $10 million and liabilities of the
same range. SEMP Texas had estimated assets of less than $1
million and liabilities of less than $500,000 while Hospital
Acquisition had estimated assets of less than $50,000 and
liabilities of less than $50,000.
The Debtors hired Weir & Partners LLP as counsel; Finley Group as
financial advisor; and Omni Management Group as claims and noticing
agent.
Andrew Vara, acting U.S. trustee for Region 3, appointed an
official committee of unsecured creditors on May 20, 2019.
Lowenstein Sandler LLP is the Committee's legal counsel.
STANFORD JONES: June 8 Hearing on Disclosure Statement
------------------------------------------------------
Judge Tamara O. Mitchell has ordered that the hearing to consider
the approval of the disclosure statement filed by Stanford, Jones &
Loyless, LLC shall be held June 8, 2020, at 10:30 a.m. To
participate in the hearing, all parties appearing shall dial the
following number: 1-877-336-1280 and enter the following Access
Code: 2653346#.
June 1, 2020, is fixed as the last day for filing and serving
written objections to the disclosure statement.
About Stanford, Jones & Loyless
Based in Birmingham, Ala., Stanford, Jones & Loyless, LLC sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Ala. Case No. 20-00503) on Feb. 6, 2020, listing under $1 million
in both assets and liabilities. Michael E Bybee, Esq., at the Law
Office of Michael E. Bybee, is the Debtor's legal counsel.
STEREOTAXIS INC: Expects to Get $15M From Common Stock Financing
----------------------------------------------------------------
Stereotaxis has entered into a securities purchase agreement with
certain funds managed by Consonance Capital Management, a prominent
healthcare-focused institutional investor. Stereotaxis is issuing
approximately 3.66 million shares of registered common stock at a
purchase price of $4.10 per share, for gross and net proceeds of
approximately $15 million. The purchase price reflects a 9%
premium to Stereotaxis' 10-day volume-weighted average trading
price.
"We are excited to have Consonance Capital join us in our mission
to improve patient care and positively transform interventional
medicine with robotics," said David Fischel, chairman and CEO.
"This financing is particularly meaningful during this period of
uncertainty and disruption, and strengthens our commitment to
significant innovation and support of our customers."
About Stereotaxis
Based in St. Louis, Missouri, Stereotaxis, Inc. --
http://www.stereotaxis.com/-- is an innovative robotic technology
company designed to enhance the treatment of arrhythmias and
perform endovascular procedures. Its mission is the discovery,
development and delivery of robotic systems, instruments, and
information solutions for the interventional laboratory. These
innovations help physicians provide unsurpassed patient care with
robotic precision and safety, improved lab efficiency and
productivity, and enhanced integration of procedural information.
Over 100 issued patents support the Stereotaxis platform. The core
components of Stereotaxis' systems have received regulatory
clearance in the United States, European Union, Japan, Canada,
China, and elsewhere.
Stereotaxis reported a loss attributable to common stockholders of
$6.02 million for the year ended Dec. 31, 2019, compared to a loss
attributable to common stockholders of $1.32 million for the year
ended Dec. 31, 2018. As of March 31, 2020, the Company had $41.50
million in total assets, $14.22 million in total liabilities, $5.71
million in series A - convertible preferred stock, and $21.57
million in total stockholders' equity.
The Company has sustained operating losses throughout its corporate
history and expects that its 2020 expenses will exceed its 2020
gross margin. The Company expects to continue to incur operating
losses and negative cash flows until revenues reach a level
sufficient to support ongoing operations or expense reductions are
in place. The Company's liquidity needs will be largely determined
by the success of clinical adoption within the installed base of
its robotic magnetic navigation system as well as by new placements
of capital systems. The Company's plans for improving the
liquidity conditions primarily include its ability to control the
timing and spending of its operating expenses and raising
additional funds through debt or equity financing, as disclosed in
the Company's Annual Report for the year ended Dec. 31, 2019.
SUPERIOR AIR: John Traub Resigns From Creditors' Committee
----------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 disclosed in court filings
that John Traub, an unsecured creditor of Superior Air Charter,
LLC, resigned from the official committee of unsecured creditors
appointed in the company's Chapter 11 case.
As of May 26, 2020, the remaining members of the committee are:
1. Netflix, Inc.
Attn: Kate Chilton
5808 W. Sunset Blvd.
Los Angeles, CA 90028
Phone: (310) 871-0613
2. Jet Support Services, Inc.
Attn: Paul Rahe
180 N. Stetson Ave., 29th Floor
Chicago, IL 60601
Phone: (312) 494-8626
3. Joseph Nettemeyer
5225 Hellyer Ave., Suite 250
San Jose, CA 95138
4. John Danahy
18 South Drive
Winchester, NH 03470
About Superior Air Charter
Superior Air Charter, LLC -- https://www.jetsuite.com/ -- operates
charter air carrier JetSuite. With its current headquarters in
Dallas, Texas, JetSuite was founded in 2006 by Alex Wilcox, Keith
Rabin, and Brian Coulter. It is one of the biggest operators of
private air services in the United States. It operates chartered
services with a fleet of Phenom 100 and Citation CJ3 aircraft and
offer subscription-based air travel services to passengers to
western United States, Canada, and Mexico.
Superior Air Charter sought Chapter 11 protection (Bankr. D. Del.
Case No. 20-11007) on April 28, 2020. The Debtor was estimated to
have $1 million to $10 million in assets and $50 million to $100
million in liabilities. The Debtor tapped Bayard, P.A., as
counsel; and Stretto as claims agent.
TANYA E. TUCKER: $600K Sale of St. Petersburg Property Approved
---------------------------------------------------------------
Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle
District of Florida authorized Tanya E. Tucker's short sale of the
real property located at 336 9th Avenue NE, St. Petersburg, Florida
to Jason Rene Moarales and Johana Andreas Morales for $600,000.
A hearing on the Motion was held on May 18, 2020 at 2:00 p.m.
The Agreement is approved with the following modifications as
announced on the record:
A. Truist will be paid in full subject to a proper payoff, as
of the closing date.
B. The Debtor's sale of the Property is conditioned on
Truist's written consent to a "short sale" prior to the closing
date.
C. The Truist payoff may be made out of the closing proceeds
directly and will not become property of the estate nor subject to
distribution by the trustee.
The sale is free and clear of all Interests other than those
Interests identified on the Commitment for Title Insurance as
surviving the Sale.
Thomas Tucker is authorized and approved as the seller's broker to
the Sale pursuant to Sections 327 and 328 of the Bankruptcy Code;
and, his commission of $15,000 under the Agreement as modified on
the record is authorized and approved and may be paid directly out
of the closing proceeds.
Nancy Otten is authorized and approved as the buyer's broker to the
Sale; and, her commission of $18,000 under the Agreement is
authorized and approved and may be paid directly out of the closing
proceeds.
Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions
of the Order will be immediately effective and enforceable upon its
entry and there will be no stay of execution or effectiveness of
the Order.
Truist will provide the Debtor with an updated payoff statement at
least seven days before the closing or as otherwise reasonably
requested.
Pursuant to Section 506 of the Bankruptcy Code, the Court
determines the fair market value of the Property as of the time of
the Sale is $600,000. To the extent Tampa Bay Federal Credit Union
("TBFCU") is not paid in full out of the sale proceeds, TBFCU may
assert an unsecured claim for the deficiency.
Tanya E. Tucker sought Chapter 11 protection (Bankr. M.D. Fla. Case
No. 20-03009) on April 10, 2020. The Debtor tapped Daniel
Etlinger, Esq., at Jennnis Law Firm as counsel.
TATA CHEMICALS: Moody's Alters Outlook on Ba3 CFR to Negative
-------------------------------------------------------------
Moody's Investors Service has changed Tata Chemicals North America,
Inc.'s outlook to negative from stable. At the same time, Moody's
has affirmed TCNA's Ba3 Corporate Family Rating, Ba3-PD Probability
of Default rating and the Ba3 ratings on the company's new credit
facilities.
The negative outlook reflects TCNA's earnings deterioration amid
the global pandemic and increased debt leverage once it completes
the intended debt issuance to acquire the remaining 25% equity
stake in Tata Chemicals Partners and to refinance its existing term
loan. Additionally, the risk of refinancing its $225 million term
loan due in August 2020 would remain elevated in case the debt
issuance should be further delayed.
Outlook Actions:
Issuer: Tata Chemicals North America, Inc.
Outlook changed to negative from stable
Rating affirmations:
Issuer: Tata Chemicals North America, Inc.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Senior Secured Term Loan, Affirmed Ba3 (LGD3)
Senior Secured Revolving Credit Facility, Affirmed Ba3 (LGD3)
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 soda ash
sector has been one of the sectors affected by the shock given its
sensitivity, through its application in glass manufacturing, to
automotive and construction sectors. More specifically, TCNA's
increased debt leverage after its intended term loan issuance has
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.
Its action reflects the impact on TCNA of the breadth and severity
of the shock, and the broad deterioration in credit quality it has
triggered.
Moody's expects TCNA's debt leverage to be elevated once the new
term loan issuance is completed, with over 6 times adjusted Net
debt/attributable EBITDA (after dividends paid to its joint venture
partner Church & Dwight) in FY2021 and a likely improvement to
about 5 times in FY2022. Poor demand from the automotive and
construction sectors has negatively impacted glass manufacturing,
resulting in lower soda ash consumption this year. Export markets
continue to be challenged by price erosion, compounded by the
recent volume declines amid the pandemic. A change in soda ash
supply agreement with Owens-Illinois could also hurt TCNA's
earnings, after the former's divesture of its 25% equity stake in
TCSAP. Moody's now expects a decline in adjusted EBITDA margin to
below 20% in FY2021 from nearly 25% in the last two fiscal years,
and an improvement to about 20% EBITDA margin in FY2022 looks
likely based on assumption that industrial activities will
gradually creep back to prior-COVID-19 levels.
The rating affirmation reflects TCNA's cost-advantaged natural soda
ash production, strong cash flows and its prudent financial policy.
Moody's expects the company has the flexibility to use free cash
flows to reduce debt and management has a track record of
consistently repaying debt in the last five years. Despite much
weaker earnings expectation, free cash flow should remain positive
in FY2021 thanks to reduced capital spending, cost-savings
measures, deferred tax payments and temporarily suspended pension
contributions.
US soda ash producers such as TCNA benefit from several structural
advantages including the cost competitiveness of trona-based
production in Wyoming, long-term customer relations in the US and
the global distribution of natural soda ash produced by major US
producers that are members of the American Natural Soda Ash Corp
(ANSAC). A decline in Chinese exports and global demand growth at
about 2% per annum have absorbed the new soda ash supplies from
Ciner Group's Turkish facilities in the last two years.
The significant capacity additions announced by Solvay, Genesis
Alkali and Ciner Wyoming in the US will risk tipping the soda ash
demand and supply balance in about three years. However, there is
uncertainty regarding the start-up of new soda ash facilities given
the large capital commitment, the need to improve logistics and
support services for export sales, as well as these producers'
vested interest in their existing operations in Wyoming.
TCNA's rating is also constrained by its limited product diversity
with soda ash being its only product, operational concentration
with Green River Basin in Wyoming as the only production site and
high customer concentration. TCNA plans to improve production
reliability, debottleneck its production with a modest increase in
capital spending in the coming years.
TCNA's Ba3 CFR has factored in one-notch uplift for the benefit of
being a wholly owned subsidiary of Tata Chemicals Limited (TCL, Ba1
stable) which has a stronger credit rating and intends to ensure
sufficient liquidity and appropriate leverage at TCNA prior to
taking distributions, consistent with its past practice. Although
TCL doesn't provide an explicit guarantee to the debt issued by
TCNA, TCNA operates under the umbrella of Tata Sons which has a
track record of lending support to its investee companies to
protect its brand reputation from the consequences of an entity's
distress.
TCNA's liquidity is supported by $92 million cash balance and $25
million undrawn revolving credit facility as of March 31, 2020.
Operational cash flows will be sufficient to cover interest expense
and capital expenditures. Moody's expects the company to remain
compliant with the financial covenant under its credit agreements
in the next two years. If the planned debt issuance is delayed
further, Moody's expects management to find alternative solutions
such as credit amendments or bridge loans to address the
refinancing requirement of the $225 million term loan due in August
2020. Such expectation is based on TCNA's cost-advantaged soda ash
production, moderate level of outstanding debt, positive free cash
flows and its 100% ownership by TCL.
The new credit facilities, including term loan and revolver, are
rated Ba3, at the same level as the CFR, based on Moody's Loss
Given Default methodology.
TCNA's rating has also considered environmental, social and
governance factors. While the company's trona-based soda ash
production poses an environmental advantage as compared to the
synthetic process, the underground mining of the trona reserves and
subsequent processing into sodium carbonate does expose the company
to environmental risk.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would consider a downgrade if TCNA's profitability
deteriorates significantly or it makes large distributions to the
parent, such that adjusted net debt leverage stays above 5.0x
persistently. A substantial deterioration in TCNA's liquidity or
its parent's credit profile, though not expected, could also
pressure the rating.
TCNA's narrow product and operating diversity contribute to the
limited upward ratings potential. However, Moody's would consider
an upgrade if adjusted Net Debt/attributable EBITDA were to fall
sustainably below 4.0x, but not until the industry expansions in
natural soda ash are completed and absorbed by the industry.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
Tata Chemicals North America, Inc. currently has a 75% interest in
the operating company Tata Chemicals Partners, which operates soda
ash mining and production facilities located at Green River Basin,
Wyoming, US. TCNA plans to acquire the remaining 25% in TCSAP from
Valley Holdings, Inc., a wholly-owned subsidiary of Tata Chemicals
Limited. TCSAP has an annual soda ash production capacity of
approximately 2.5 million tons (approximately 4.5 million-ton trona
per year). For the fiscal year ending March 2020, TCNA generated
revenues of approximately $480 million. TCNA is 100% owned by Tata
Chemicals Limited.
TELEXFREE LLC: Small Participants to Recover 43% Under Trustee Plan
-------------------------------------------------------------------
Stephen B. Darr, the Chapter 11 Trustee of TelexFree, LLC,
TelexFree, Inc., and TelexFree Financial, Inc., filed a Chapter 11
Plan for the Debtors' estates.
The Plan proposes to treat claims as follows:
* Class 2 Participants with claims of $4,250 or less (estimated
number of claims 78,759). The claims in the class are estimated to
total $125,000,000. Creditors in the class will recover 43%. A
single distribution from the Restitution Funds as soon as
practicable after the later of the Effective Date or entry of an
order of the Bankruptcy Court allowing such Claim.
* Class 3 Participant claims other than Class 2 (estimated
number of claims 22,327). This class is projected to total
$230,000,000. The class will recover 39% on initial distribution,
and 2% to 10% on additional distributions. One or more
distributions as follows: (i) An initial distribution from the
Restitution Funds, the SEC Settlement Funds, and Available Cash, in
the approximate amount of 39% of each Allowed Claim, as soon as
practicable after the later of the Effective Date or the entry of
an order of the Bankruptcy Court allowing such Claim,; (ii)
Additional distributions from Restitution Funds, SEC Settlement
Funds, and Available Cash as and when such proceeds become
available to the Liquidating Trustee, in the estimated range of 2%
to 10% of each Allowed Class 3 Claim.
* Class 4 Vendor Claims (estimated number of claims less than
10). The claims total $75,000 to $125,000. Vendors will recover
40% to 65%. Claimants will receive a single distribution from
available cash as soon as practicable after the later of the
Effective Date or the entry of an order of the Bankruptcy Court
allowing such Claim equal to a pro rata share of $50,000.
* Class 5 Equity Interests. This class is impaired. Equity
Interests shall be deemed canceled and terminated as of the
Effective Date, and the holders of Equity Interests shall not
receive or retain any property or interest in property on account
of such Equity Interest.
A full-text copy of the Disclosure Statement dated May 6, 2020, is
available at https://tinyurl.com/y8slzdpf from PacerMonitor.com at
no charge.
Counsel to Chapter 11 Trustee Stephen B. Darr:
Harold B. Murphy, Esq.
Andrew G. Lizotte, Esq.
MURPHY& KING, Professional Corporation
One Beacon Street
Boston, MA 02108
Tel: (617) 423-0400
Fax: (617) 556-8985
About TelexFree, LLC
TelexFREE -- http://www.TelexFREE.com/-- is a telecommunications
business that uses multi-level marketing to assist in the
distribution of voice over internet protocol telephone services.
TelexFREE's retail VoIP product, 99TelexFREE, allows for unlimited
international calling to seventy countries for a flat monthly rate
of $49.90. TelexFREE had over 700,000 associates or promoters
worldwide.
TelexFREE though was facing accusations of operating a $1
billion-plus pyramid scheme.
TelexFREE LLC and two affiliates sought bankruptcy protection
(Bankr. D. Nev. Lead Case No. 14-12525) on April 13, 2014.
TelexFREE estimated $50 million to $100 million in assets and $100
million to $500 million in liabilities.
Alvarez & Marsal North America, LLC, is serving as restructuring
advisor and Greenberg Traurig, LLP and Gordon Silver are serving as
legal advisors to TelexFREE. Kurtzman Carson Consultants LLC
serves as claims and noticing agent.
In May 2014, the Nevada bankruptcy court approved the motion by the
U.S. Securities & Exchange Commission to transfer the venue of the
Debtors' cases to the U.S. Bankruptcy Court for the District of
Massachusetts (Bankr. D. Mass. Case Nos. 14-40987, 14-40988 and
14-40989).
On June 6, 2014, Stephen Darr was appointed as Chapter 11 trustee.
TENDERLEAF VILLAGE: Plan & Disclosure Hearing Continued to June 17
------------------------------------------------------------------
Judge Jeffrey P. Norman has ordered that June 17, 2020, at 11:00
a.m. at the United States Courthouse, 515 Rusk St., Courtroom 403,
Houston, TX is fixed for the hearing on final approval of the
disclosure statement, and for the hearing on confirmation of the
plan for Debtor Tenderleaf Village, Inc.
A copy of the order dated May 8, 2020, is available at
https://tinyurl.com/y9fd7uk2 from PacerMonitor at no charge.
About Tenderleaf Village
Tenderleaf Village owns two business properties in Lufkin, Texas,
with a total current value of $2.7 million. The company is a
tax-exempt entity (as described in 26 U.S.C. Section 501).
Tenderleaf Village filed a voluntary Chapter 11 petition (Bankr.
S.D. Tex. Case No. 19-31061) on Feb. 28, 2019. In the petition
signed by James Tran, director, the Debtor disclosed $2,833,076 in
assets and $1,923,273 in liabilities. The case has been assigned
to the Hon. Jeffrey P. Norman. Julie Mitchell Koenig, Esq., at
Cooper & Scully, PC, represents the Debtor as legal counsel.
TIMOTHY A. MORRIS: Private Sale of Benson Property Approved
-----------------------------------------------------------
Judge Joseph N. Callaway of the U.S. Bankruptcy Court for the
Eastern District of North Carolina authorized Timothy A. Morris'
private sale of the real property and improvements located at 611
Tarheel Road, Benson, Johnston County, North Carolina, and more
particularly described in a deed dated 21 November 2006, and
recorded in Deed Book 3239, page 294-296 of the Johnston County
Registry.
The sale of assets will be free and clear of all the liens, with
the rights of lien creditors and interests being transferred to the
proceeds of the sale.
At the closing of the property, the closing attorney is authorized
to pay the costs attributable to the seller, including any
commissions due to brokers, closing costs and expenses. The
closing attorney is also authorized to pay and satisfy the lien
claim of the Johnston County Tax Collector.
The net proceeds, following payment of these costs of sale, will be
turned over to the counsel for the Debtor. The counsel will hold
these funds in trust subject to further orders of the Court
regarding distribution and/or confirmation of the Plan.
Timothy A. Morris sought Chapter 11 protection (Bankr. E.D.N.C.
Case No. 19-05243) on Nov. 11, 2019. The Debtor tapped J.M. Cook,
Esq., at J.M. Cook, P.A., as counsel.
TMS CONTRACTORS: June 2 Plan Confirmation Hearing Set
-----------------------------------------------------
On April 21, 2020, debtor TMS Contractors, LLC, filed with the U.S.
Bankruptcy Court for the Southern District of Texas, Houston
Division, a Disclosure Statement referring to a Plan.
On May 7, 2020, Judge Marvin Isgur approved the Disclosure
Statement and established the following dates and deadlines:
* May 28, 2020, at 4:00 is fixed as the last day for filing
written acceptances or rejections of the plan.
* June 2, 2020, at 1:30 p.m. is fixed for the hearing on
confirmation of the plan.
* May 28, 2020, at 4:00 p.m. is fixed as the last day for filing
and serving pursuant to Fed. R. Bankr. P. 3020(b)(1) written
objections to confirmation of the plan.
A copy of the order dated May 7, 2020, is available at
https://tinyurl.com/y8gwwq59 from PacerMonitor at no charge.
About TMS Contractors
and TMSC Properties
TMS Contractors, LLC -- https://www.tmsbuilds.com/ -- is a general
contractor specializing in residential, commercial, and industrial
buildings. It can supply pre-engineered, conventional or hybrid
steel solutions for all building needs from complete design,
engineered and fabricated building systems to conventional steel
for building structure.
TMSC Properties, an affiliate of TMS Contractors, is primarily
engaged in leasing real estate properties.
TMS Contractors and TMSC Properties sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Tex. Case Nos. 19-33555 and
19-33556) on June 27, 2019. At the time of the filing, TMS
Contractors disclosed $6,031,517 in assets and $2,958,214 in
liabilities; and TMSC Properties disclosed $5,559,541 in assets and
$1,783,866 in liabilities.
The case has been assigned to Judge David R. Jones.
Attorney Donald Wyatt, PC is the Debtor's bankruptcy counsel.
TOUCHPOINT GROUP: Raises $133K in Convertible Note Financing
------------------------------------------------------------
Touchpoint Group Holdings, Inc. entered into a convertible
promissory note with Geneva Roth Remark Holdings, Inc. in the
principal amount of $133,000. The May 19, 2020 Note carries
interest at the rate of 10% per annum, matures on May 19, 2021, and
is convertible into shares of the Company's common stock, par value
$0.0001, at the Lender's election, after 180 days, at a 35%
discount, provided that the Lender may not own greater than 4.99%
of the Company's common stock at any time. The Note contains
customary default provisions and may be prepaid only prior to the
180th day after issuance provided the Company pays the agreed upon
prepayment fee specified in the Note.
About Touchpoint
Touchpoint Group Holdings, Inc., headquartered in Miami, Florida,
-- http://touchpointgh.com/-- is a media and digital technology
acquisition and software company, which owns Love Media House, a
full-service music production, artist representation and digital
media business. The Company also and holds a majority interest in
123Wish, a subscription-based, experience marketplace, as well as
majority interest in Browning Productions & Entertainment, Inc., a
full-service digital media and television production company.
Touchpoint Group reported a net loss of $6.63 million for the year
ended Dec. 31, 2019, compared to a net loss of $14.58 million for
the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$4.83 million in total assets, $2.85 million in total liabilities,
$605,000 in temporary equity, and $1.37 million in total
stockholders' equity.
Cherry Bekaert LLP, in Tampa, Florida, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
April 24, 2020 citing that the Company has recurring losses and
negative cash flows from operations that raise substantial doubt
about its ability to continue as a going concern.
TRAVELEXPERIENCE LLC: June 23 Status Conference Set
---------------------------------------------------
A status conference is scheduled before the Honorable John K.
Sherwood for June 23, 2020 (45-60 days after the Order for Relief),
at 10:00 am, in the U.S. Bankruptcy Court, 50 Walnut Street,
Newark, NJ 07102, Courtroom No. 3D.
The Debtor's exclusive right to file a Plan expires on Nov. 2, 2020
(180 days after the Order for Relief), unless the time period is
extended under 11 U.S.C. Sec. 1121(e)(3).
A Plan and Disclosure Statement, must be filed no later than Feb.
28, 2021 (300 days after the Order for Relief), unless the time
period is shortened by order of the Court or extended under 11
U.S.C. Sec. 1121(e)(3).
TravelExperience LLC sought Chapter 11 protection (Bankr. D.N.J.
Case No. 20-16195) on May 4, 2020. Andy Winchell, Esq., at LAW
OFFICES OF ANDY WINCHELL, is the Debtor's counsel.
TRC FARMS: $176K Sale of Craven County Property to Yarborough OK'd
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Judge Joseph N. Callaway of the U.S. Bankruptcy Court for the
Eastern District of North Carolina authorized TRC Farms, Inc.'s the
lease and private sale of approximately 58 acres and all
improvements constructed thereon located at 8865 W. NC 55 Highway,
Craven County, and more particularly described in that certain deed
description located at Book 3344, Page 333, Craven County Registry,
North Carolina, to Lee Jennings Yarborough for $175,825.
The Property will be conveyed free and clear of all claims, liens
and encumbrances that may be asserted against the Property, as
follows:
A. Any and all liens and/or security interests in favor of
Truist Bank (formerly known as Branch Banking and Trust Co.).
B. Any and all liens and/or security interests in favor of
Harvey Fertilizer and Gas Co.
C. Any and all real estate taxes due and owing to any City,
County or municipal corporation, and more particularly, to the
Craven County Tax Collector.
D. Any and all remaining interests, liens, encumbrances,
rights and claims asserted against the Property, which relate to or
arise as a result of a sale of the Property, or which may be
asserted against the buyer of the Property, including, but not
limited to, those liens and claims, whether fixed and liquidated or
contingent and unliquidated, that have or may be asserted against
the Property by the North Carolina Department of Revenue, the
Internal Revenue Service, and any and all other taxing and
government authorities.
The Property will be sold in an "as is" condition, and no
warranties will be made as to the condition, use or fitness of the
Property for a particular purpose. The Buyer of the Property will
bear all costs associated with the transfer of the Property,
including registration fees, local transfer fees and taxes, and
North Carolina sales taxes, as applicable.
The lease of the Property to the Purchaser in accordance with the
terms of the Farm Lease Agreement is approved in accordance with
the provisions of 11 U.S.C. Section 363(d)(2).
The Order will be effective immediately, as permitted by Rule
6004(h).
About TRC Farms Inc.
TRC Farms, Inc., a privately held company in the livestock farming
industry, filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. N.C. Case No. 20-00309) on Jan. 23,
2020. In the petition signed by Timmy R. Cox, president, the
Debtor disclosed $3,846,275 in assets and $5,412,282 in
liabilities. Judge Joseph N. Callaway oversees the case. The
Debtor tapped Ayers & Haidt, PA as its legal counsel, and Carr
Riggs & Ingram, LLC as its accountant.
TUPPERWARE BRANDS: Launches Tender Offer for 2021 Notes
-------------------------------------------------------
Tupperware Brands Corp. on Tuesday said the pandemic and the
measures implemented to slow the spread of COVID-19 may negatively
impact its ability to repay or refinance the $600 million aggregate
principal amount of 4.750% Senior Notes due on June 1, 2021.
Tupperware has launched a tender offer to repurchase for cash up to
$175,000,000 aggregate principal amount of the Notes. Noteholders
will receive $450 for each $1,000 principal amount of the Notes if
tendered by June 8. Those who tender their Notes after June 8 will
only receive $420 per $1,000 principal amount of Notes. The Tender
Offer expires June 22.
According to Tupperware, COVID-19, which has been declared by the
World Health Organization to be a "pandemic," is negatively
impacting worldwide economic activity. Many governments have
implemented policies intended to stop or slow the further spread of
the disease, such as shelter-in-place orders, resulting in the
temporary closure of schools and non-essential businesses, and
these measures may remain in place for a significant period of
time. COVID-19 has impacted geographic areas in which the Company
has operations, including China, where the Company has a
manufacturing facility and generated over $200 million in sales in
2019. The Company has experienced and may continue to experience
disruptions that prevent it from meeting the demands of its sales
force and customers, including disruptions to the manufacturing of
its products and its supply chain, disruptions to its distribution
network, disruptions in or restrictions on the ability of its
employees, contractors, sales force and other business partners to
work effectively and disruptions to the shipment of its products.
"The COVID-19 pandemic and measures implemented to slow the spread
of COVID-19 may negatively impact the Company's ability to repay or
refinance the $600 million aggregate principal amount of the Notes
due on June 1, 2021. The extent to which the COVID-19 pandemic
ultimately impacts the Company's ability to repay or refinance the
Notes will depend on future developments, which are highly
uncertain and cannot be predicted. The impact of COVID-19 and
measures implemented to slow the spread could also cause delay in,
or limit the ability of, the Company's sales force to make timely
payments to the Company. In addition, the pandemic has resulted in
a widespread health crisis that is adversely affecting the
economies and financial markets of many countries. During the
COVID-19 pandemic and even after it has subsided, the Company may
continue to experience adverse impacts to the Company's business as
a result of the pandemic's global economic impact, including any
recession, economic downturn, government spending cuts, tightening
of credit markets or increased unemployment that has occurred or
may occur in the future, which could cause the Company's ultimate
customers and potential customers to postpone or reduce spending on
its products or put downward pressure on prices. The Company's top
priority is to protect its employees and their families, the sales
force and consumers, and its operations from any adverse impacts.
The Company is taking precautionary measures as directed by health
authorities and local governments."
"Individually and collectively, the consequences of the COVID-19
pandemic have adversely impacted and could continue to adversely
impact the Company's business, financial condition, results of
operations, cash flows and liquidity. The Company estimates that
the COVID-19 pandemic may have a negative impact of over $100
million on net sales for the fiscal year 2020 with more than 80% of
the impact expected in the first half of the year."
Tupperware has taken certain measures to address the impacts of
COVID-19. These measures are designed to enhance its liquidity
position, provide additional financial flexibility and maintain
forecasted financial covenant compliance, and include reductions in
discretionary spending, revisiting investment strategies, and
reducing payroll costs, including through organizational redesign,
employee furloughs and permanent reductions. Additionally, during
the beginning of the second quarter of 2020, on March 30, 2020, the
Company drew down $225 million under its Second Amended and
Restated Credit Agreement, dated as of March 29, 2019 (as amended,
supplemented or otherwise modified, the "Credit Agreement"), $175
million of which was drawn as a proactive measure given the
uncertain environment resulting from the COVID-19 pandemic.
Further, the Company continues to take swift actions to strengthen
its business and navigate the uncertainties of COVID-19, including
accelerating its 2020 Turnaround Plan (as defined below) net cost
savings and profitability improvements target from $75 million to
$150 million. The extent to which the COVID-19 pandemic ultimately
impacts the Company's business, financial condition, results of
operations, cash flows, and liquidity may differ from management's
current estimates due to inherent uncertainties regarding the
duration and further spread of the outbreak, its severity, actions
taken to contain the virus or treat its impact, and how quickly and
to what extent normal economic and operating conditions can resume.
The extent to which the COVID-19 pandemic adversely affects the
Company's business, financial condition, results of operations,
cash flows and liquidity, may also have the effect of heightening
many of the other risks described in this section, such as those
relating to the Company's level of indebtedness and its ability to
comply with the financial covenants contained in the agreements
that govern the its indebtedness.
The Company has warned it may not realize anticipated savings or
benefits from its Turnaround Plan.
In January 2019, the Company announced its transformation program
(Global Growth Strategy initiatives), which was re-assessed in
December 2019. The Turnaround Plan was launched with the focus to
drive innovation, sales force engagement and consumer experiences
through a contemporized and streamlined service model. Since the
inception of the Turnaround Plan, a reassessment of costs and
priorities has occurred with a shift from a segment to a global
focus with increased emphasis on procurement, sourcing and
organizational realignment. The Turnaround Plan is expected to run
through 2021 and incur approximately $50 million in pretax cost,
with 100 percent paid in cash. Once fully executed, the Turnaround
Plan is expected to enable annual local currency sales growth and
to generate approximately $200 million in annualized gross cost
savings and profitability improvements. There can be no assurance
that the Company will realize the anticipated local currency sales
growth, cost savings or profitability improvements.
"As the Company works to complete the Turnaround Plan, it may not
realize anticipated savings or benefits from one or more of the
various restructuring and cost-savings programs undertaken as part
of these efforts in full or in part or within the time periods
expected," Tupperware said. "It also may not realize the increase
in sales intended to be enabled by the Turnaround Plan. The
Company's ability to improve its operating results depends upon a
significant number of factors, some of which are beyond its
control. Other events and circumstances, such as financial and
strategic difficulties and delays or unexpected costs, including
the impacts of COVID-19, foreign currency and inflationary
pressures, may occur which could result in not realizing targets or
in offsetting the financial benefits of reaching those targets.
Reaching those targets may also depend on the level of acceptance
by the Company's sales force of its compensation initiatives. If
the Company is unable to realize the anticipated savings or
benefits, or otherwise fails to complete the Turnaround Plan, the
business may be adversely affected. In addition, any plans to
invest these savings and benefits ahead of future growth means that
such costs will be incurred whether or not these savings and
benefits are realized. The Company is also subject to the risks of
labor unrest, negative publicity and business disruption in
connection with the Turnaround Plan, and the failure to realize
anticipated savings or benefits from the Turnaround Plan could have
a material adverse effect on the Company's business, prospects,
financial condition, liquidity, results of operations and cash
flows."
Tupperware also reported that on May 20, 2020, its board of
directors approved a definitive purchase and sale agreement with
O'Connor Management LLC, whereby O'Connor will purchase
approximately 740 acres of the Company's property in Orlando,
Florida, inclusive of 500 acres of wetlands, comprising all
remaining Company-owned land in Orlando. The Purchase and Sale
Agreement provides for a purchase price of approximately $87
million for the land and certain transportation impact fee credits,
with the transaction closing expected to occur in the second
quarter of 2020, subject to successful due diligence and standard
closing conditions.
As part of this transaction, the Company will lease back from
O'Connor approximately 61 acres and 8 buildings on the land,
comprising the Company's headquarters location, for an initial term
of 10 years at a market competitive rent and with customary terms
and conditions. The Company can make no assurances that the
transaction will close, that it will close in the second quarter of
2020, or that it will close at the price listed.
TUPPERWARE BRANDS: S&P Cuts Rating on $600MM Unsecured Notes to 'C'
-------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
Tupperware Brands Corp. (Tupperware) to 'CC' from 'CCC+' and its
issue-level rating on its $600 million senior unsecured notes to
'C' from 'CCC'. S&P's '5' recovery rating on the notes remains
unchanged, indicating its expectation for modest (10%-30%; rounded
estimate: 10%) recovery in the event of a payment default.
The downgrade reflects Tupperware's announcement that it will
repurchase up to $175 million of its $600 million senior unsecured
notes due June 1, 2021, at less than par. S&P views this as
distressed because the company has been attempting to turnaround
its business and will not be able to refinance its bonds before
they become current on June 1, 2020. S&P expects the company to
fund the repurchase with cash on hand. As of March 28, 2020,
Tupperware had roughly $175 million of cash and $388 million
outstanding under its $650 million revolver due 2024.
The company has not yet announced its plans for the remaining debt
that it will not repurchase under the proposed tender offer. S&P
said, "We believe Tupperware's refinancing risk has increased, due
to its limited access to the debt markets, and expect its liquidity
to weaken following the upcoming maturity of its debt. That said,
we note the company recently announced it has entered into a sale
agreement for some of its land in Orlando for approximately $87
million and will continue to undertake land sales." These
transactions should help fund its turnaround efforts.
On top of its already weak performance, the rapid spread of the
coronavirus will likely lead to accelerated revenue and EBITDA
declines in fiscal year 2020 and cause it to sustain debt leverage
of more than 5x.
S&P said, "The negative outlook reflects the likelihood that we
will lower our issuer credit rating on Tupperware to 'SD' and our
issue-level rating on its notes to 'D' after the closing of the
proposed tender offer. Subsequently, we will reevaluate all of our
ratings on Tupperware once the transaction closes and we receive
additional information on the company's ultimate capital structure
and operating strategy, which may not occur for several months."
UNIT CORP: S&P Downgrades ICR to 'D' on Chapter 11 Filing
---------------------------------------------------------
S&P Global Ratings lowered the issuer credit and senior unsecured
ratings on Tulsa-based Unit Corp. to 'D' from 'CC'. The action
follows the company's decision to reorganize under Chapter 11 of
the U.S. Bankruptcy Code.
UNITED AIRLINES: Moody's Withdraws 'Ba1' on $2.25BB Secured Notes
-----------------------------------------------------------------
Moody's Investors Service withdrew the Ba1 ratings it assigned to
United Airlines, Inc.'s proposed $2.25 billion of senior secured
notes due 2023 and 2025. The company announced the offering on May
6th and cancelled the offering on May 8th. United had intended to
use the proceeds to retire the $2 billion credit facility the
company entered on March 9, 2020 and the remainder for general
corporate purposes. Cancelling the transaction does not affect
Moody's Ba2 corporate family or any other of the ratings, including
enhanced equipment trust certificate ratings, assigned to United
Airlines Holdings, Inc. or United Airlines, Inc., all of which
remain on review for downgrade.
RATINGS RATIONALE
The Ba2 corporate family rating reflects United's favorable
business profile as the third largest US and global airline based
on revenue, and the benefits to earnings of the improvements in
service delivery and operational reliability of the past 24 months.
Credit metrics, including debt-to-EBITDA of 2.7x and free cash flow
to debt of 9.7%, heading into 2020 well supported the Ba2 corporate
family rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if Moody's believes the coronavirus
will constrain passenger demand for an extended period well into
2021 and or credit metrics. Aggregate of cash and available
revolver falling below $5 billion could pressure the ratings as
could clear expectations that United will not be able to timely
restore its financial profile once the virus recedes (for example,
if debt-to-EBITDA is sustained above 4x or FFO plus
interest-to-interest is sustained below 4.5x).
There will be no upwards pressure on ratings until after passenger
demand returns to pre-coronavirus levels and United maintains
liquidity above $6 billion, and key credit metrics improve, as
indicated by EBITDA margins above 18%, debt-to-EBITDA below 3x and
funds from operations plus interest-to-interest of about 6x.
United Airlines Holdings, Inc. is the holding company for United
Airlines, Inc. United Airlines and United Express operate an
average of 4,900 flights daily to 362 airports across five
continents. In 2019, United and United Express operated more than
1.7 million flights carrying more than 162 million customers. The
company reported $43.3 billion of revenue in 2019.
Withdrawals:
Issuer: United Airlines, Inc.
Senior Secured Regular Bond/Debenture, Withdrawn, previously rated
Ba1 (LGD2)
WALTER P SAUER: Court Conditionally Approves Disclosure Statement
-----------------------------------------------------------------
Judge Nancy Hershey Lord has ordered that the Disclosure Statement
filed by Walter P Sauer LLC, on May 6, 2020 is conditionally
approved.
The Debtor will mail the Plan, the Disclosure Statement, a ballot
conforming to Official Form B314, and a copy of this Order to all
creditors.
A telephonic hearing to consider final approval of the Disclosure
Statement and confirmation of the Plan shall be held on May 27,
2020 at 3:00 p.m. before the Honorable Nancy Hershey Lord, United
States Bankruptcy Judge, Eastern District of New York.
Ballots must be properly executed and are received by MT Law no
later than 5:00 p.m., Eastern Time, on May 22, 2020.
Any responses or objections to final approval of the Disclosure
Statement or confirmation of the Plan shall be filed and served in
order that they be received in hand by no later than 5:00 p.m. on
May 22, 2020.
According to the Amended Disclosure Statement, the Debtor has
proposed
a Plan that will be funded by a $125,000 contribution to be made by
Anthony Morris. After payment of administrative and priority
claims, the balance of the plan fund will be distributed to
unsecured creditors. General unsecured creditors are classified in
Class 4, and will receive a distribution of 5% of their allowed
claim to be distributed as follows: lump sum payment to be made on
the effective date of the Plan. In the event the Debtor pursues
any preference claims pursuant to section 547 of the Bankruptcy
Code, the net proceeds after paying expenses of litigation will be
distributed to the unsecured creditors.
A full-text copy of the Amended Disclosure Statement dated May 6,
2020, is available at https://tinyurl.com/yavfmok6 from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
LAWRENCE F. MORRISON
BRIAN J. HUFNAGEL
MORRISON TENENBAUM PLLC
87 Walker Street, Floor 2
New York, New York 10013
Telephone: (212) 620-0938
Facsimile: (646) 390-5095
About Walter P. Sauer LLC
Walter P. Sauer LLC is a furniture manufacturer based in Brooklyn,
New York.
Walter P. Sauer LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code () on July 8, 2019. In the
petition signed by Anthony Morris, managing member, the Debtor was
estimated to have up to $50,000 in assets and $1 million to $10
million in liabilities. Lawrence Morrison, Esq. at Morrison
Tenenbaum, PLLC represents the Debtor.
WAVE COMPUTING: Seeks Approval to Hire Sidley Austin as Counsel
---------------------------------------------------------------
Wave Computing, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
Sidley Austin LLP as their legal counsel effective April 27.
Sidley Austin will provide these services in connection with
Debtors' Chapter 11 cases:
(a) advise Debtors of their powers and duties in the continued
operation of their business;
(b) take all necessary actions to protect and preserve
Debtors' bankruptcy estates, including the prosecution of actions
on their behalf, the defense of any actions commenced against
Debtors, the negotiation of disputes in which Debtors are involved,
and the preparation of objections to relief sought and claims filed
against the estates;
(c) prepare legal papers;
(d) attend meetings and negotiate with representatives of
creditors and other parties-in-interest and attend court hearings;
(e) pursue the confirmation and implementation of Debtors'
Chapter 11 plan; and
(f) provide legal services with respect to matters relating to
corporate governance and those involving the fiduciary duties of
Debtors and their officers, directors and managers.
The hourly rates for the firm's attorneys range from $550 to
$1,525. Paraprofessionals charge between $250 and $470 per hour.
Sidley received payments in the aggregate amount of $1.6 million.
Samuel Newman, Esq., a member of Sidley Austin, disclosed in court
filings that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Samuel A. Newman, Esq.
Julia Philips Roth, Esq.
Sidley Austin LLP
555 West Fifth Street
Los Angeles, CA 90013
Telephone: (213) 896-6000
Facsimile: (213) 896-6600
Email: sam.newman@sidley.com
julia.roth@sidley.com
- and –
Charles M. Persons, Esq.
Juliana Hoffman, Esq.
Jeri Leigh Miller, Esq.
Sidley Austin LLP
2021 McKinney Avenue, Suite 2000
Dallas, TX 75201
Telephone: (214) 981-3300
Facsimile: (214) 981-3400
Email: cpersons@sidley.com
jhoffman@sidley.com
jeri.miller@sidley.com
About Wave Computing
Wave Computing, Inc. is a Santa Clara, Calif.-based company that
revolutionizes artificial intelligence (AI) with its dataflow-based
solutions. For more information, visit https://wavecomp.ai
Wave Computing and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Calif. Lead Case No.
20-50682) on April 27, 2020. The petitions were signed by Lawrence
R. Perkins, chief restructuring officer. At the time of the
filing, Debtors had estimated assets of between $1 million and $10
million and liabilities of between $50 million and $100 million.
Judge Elaine M. Hammond oversees the cases. Debtors are
represented by Sidley Austin, LLP.
WAVE COMPUTING: Seeks to Hire SierraConstellation, Appoint CRO
--------------------------------------------------------------
Wave Computing, Inc. and affiliates seek approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
SierraConstellation Partners, LLC and appoint SierraConstellation
CEO Lawrence Perkins as their chief restructuring officer effective
April 27.
SierraConstellation will provide these services in connection with
Debtors' Chapter 11 cases:
(a) prepare cash flow forecast;
(b) assist in identifying, negotiating and closing
debtor-in-possession financing;
(c) provide services related to and in support of various
relief requested in bankruptcy court, including written
declarations, depositions and testimony;
(d) provide interim management support related to Debtors'
operations and cash flow management during the bankruptcy process;
(e) provide management support during negotiation with
landlords, vendors, potential buyers and other key constituents;
(f) provide services related to lease assumption, rejection,
modification or termination;
(g) interact with the unsecured creditors' committee, if any,
and assist in the preparation of management reports; and
(j) assist in drafting and confirming a plan of
reorganization.
The firm will be paid at hourly rates as follows:
Lawrence Perkins, CRO/Engagement Principal $750
Senior Managing Directors $600 - $800
Managing Directors $525 - $700
Senior Directors $500 - $600
Directors $350 - $500
Senior Associates $200 - $300
Associates $100 - $200
SierraConstellation received an evergreen retainer in the amount of
$75,000 to cover its fees and expenses. The retainer was increased
to $350,000 on April 17 and again increased to $475,000 on April
24. As of April 27, the firm was holding $348,358.50 as a
retainer.
Mr. Perkins disclosed in court filings that the firm and its
employees neither hold nor represent an interest adverse to
Debtors' bankruptcy estate.
The firm can be reached through:
Lawrence R. Perkins
SierraConstellation Partners, LLC
355. S. Grand Avenue, Suite 1450
Los Angeles, CA 90071
Telephone: (213) 289-9060
Facsimile: (213) 232-3285
About Wave Computing
Wave Computing, Inc. is a Santa Clara, Calif.-based company that
revolutionizes artificial intelligence (AI) with its dataflow-based
solutions. For more information, visit https://wavecomp.ai
Wave Computing and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Calif. Lead Case No.
20-50682) on April 27, 2020. The petitions were signed by Lawrence
R. Perkins, chief restructuring officer. At the time of the
filing, Debtors had estimated assets of between $1 million and $10
million and liabilities of between $50 million and $100 million.
Judge Elaine M. Hammond oversees the cases. Debtors are
represented by Sidley Austin, LLP.
WEEKS HOLDINGS: June 24 Disclosure Statement Hearing Set
--------------------------------------------------------
Weeks Holdings, LLC, filed with the U.S. Bankruptcy Court for the
District of Arizona a Disclosure Statement and Plan of
Reorganization. On May 5, 2020, Judge Scott H. Gan ordered that:
* June 24, 2020, at 2:00 p.m. in Courtroom 329, at the James A.
Walsh Federal Courthouse 38 S. Scott Avenue, Tucson, AZ 85701 is
the hearing to consider the approval of the Disclosure Statement.
* June 17, 2020, is fixed as the last day for any party desiring
to object to the Court’s approval of the Disclosure Statement to
file a written objection.
* The conclusion of the Disclosure Statement Hearing is the
deadline for a secured creditor to make a written election to have
its claim treated pursuant to 11 U.S.C Sec. 1111(b)(2).
A copy of the order dated May 5, 2020, is available at
https://tinyurl.com/yaape74q from PacerMonitor at no charge.
About Weeks Holdings
Weeks Holdings, LLC, based in Tucson, AZ, filed a Chapter 11
petition (Bankr. D. Ariz. Case No. 20-00766) on Jan. 22, 2020. In
the petition signed by Sherre Weeks, manager, the Debtor was
estimated to have up to $50,000 in assets and $1 million to $10
million in liabilities. The Hon. Scott H. Gan oversees the case.
Eric Slocum Sparks, Esq., of Eric Slocum Sparks, P.C., serves as
bankruptcy counsel to the Debtor.
WELDED CONSTRUCTION: June 24 Plan Confirmation Hearing Set
----------------------------------------------------------
Debtors Welded Construction, L.P. and Welded Construction Michigan,
LLC filed with the U.S. Bankruptcy Court for the District of
Delaware a motion approving the Amended Disclosure Statement for
the Amended Chapter 11 Plan.
On May 7, 2020, Judge Christopher S. Sontchi granted the motion and
ordered that:
* The Disclosure Statement contains adequate information as
required by Section 1125 of the Bankruptcy Code, and is approved.
* The Disclosure Statement provides Holders of Claims, Holders
of Interests and other parties in interest with sufficient notice
of the injunction, exculpation and release provisions in Article XI
of the Plan in satisfaction of the requirements of Bankruptcy Rule
3016(c).
* June 12, 2020, at 5:00 p.m. (ET) is the deadline by which all
Ballots must be properly executed, completed, and actually received
by the Voting Agent.
* June 3, 2020, is the deadline by which any party that wishes
to challenge the allowance of its Claim for voting purposes shall
serve on counsel to the Debtors and file with the Court a motion
for an order temporarily allowing such Claim in a different
amount.
* June 22, 2020, is the deadline by which the Voting Agent shall
file a voting report, verifying the results of its voting
tabulations reflecting the votes cast to accept or reject the Plan.
* June 24, 2020, at 10:00 a.m. (ET) is the confirmation
hearing.
* June 17, 2020, at 5:00 p.m. (ET) is the deadline for
objections to confirmation of the Plan.
A copy of the order dated May 7, 2020, is available at
https://tinyurl.com/ycwxyuj2 from PacerMonitor at no charge.
About Welded Construction
Perrysburg, Ohio-based Welded Construction, L.P., is a mainline
pipeline construction contractor capable of executing pipeline
construction projects in lengths ranging from a few hundred feet to
over 200 miles.
Welded Construction, L.P., and Welded Construction Michigan, LLC,
sought bankruptcy protection on Oct. 22, 2018 (Bankr. D. Del. Lead
Case No. 18-12378). The jointly administered cases are pending
before Judge Kevin Gross.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP as counsel;
and Kurtzman Carson Consultants LLC as claims and noticing agent
and administrative advisor. The Debtors also tapped Zolfo Cooper
Management, LLC and the firm's managing director Frank Pometti who
will serve as their chief restructuring officer.
An official committee of unsecured creditors was appointed on Oct.
30, 2018. The committee tapped Blank Rome LLP as its legal counsel
and Teneo Capital LLC as its investment banker and financial
advisor.
WESCO INTERNATIONAL: S&P Downgrades ICR to 'BB-' on Anixter Merger
------------------------------------------------------------------
S&P Global Ratings lowered all its ratings, including its issuer
credit ratings on Pittsburgh-based electrical products distributor
WESCO International Inc. and its subsidiary WESCO Distribution Inc.
to 'BB-' from 'BB' in light of the company's upcoming merger with
Anixter International Inc. for a total transaction consideration,
including fees, of about $5.0 billion.
WESCO is raising debt financing to fund the merger, which S&P
expects to close in the second or third quarter of 2020. The merger
will consolidate two sizable distributors and roughly double
WESCO's revenue and EBITDA base. Combined, the companies posted
revenues of about $17.2 billion and S&P's adjusted EBITDA of about
$1.0 billion in 2019. However, S&P believes WESCO's debt leverage
will also increase substantially due to the largely-debt financed
transaction and near-term macroeconomic headwinds.
Meanwhile, S&P removed all its ratings from CreditWatch, where it
placed them with negative implications on Jan. 21, 2020. S&P is
also assigning its 'BB-' issue-level rating and '4' recovery rating
(rounded estimate: 30%) to WESCO Distribution's proposed senior
unsecured notes due 2025 and 2028.
The '4' recovery rating on WESCO Distribution's unsecured debt is
unchanged, though the rounded estimate drops to 30% from 45% due to
higher debt levels and leverage in the pro forma capital
structure.
"The downgrade reflects our forecast that the largely debt-funded
Anixter acquisition, combined with a near-term contraction in
macroeconomic activity stemming from coronavirus containment
measures, will keep WESCO's leverage above 5x for more than 12
months," S&P said. It expects the company will end 2020 with S&P's
adjusted debt leverage of close to 7x (pro forma for 12 months of
Anixter contribution.
"Although WESCO's revenues were relatively flat in the first
quarter of 2020, sales began to decline by a midteen percentage in
mid-March due to COVID-19-related shutdowns and overall economic
weakness. While we expect WESCO to experience a challenging second
quarter, our forecast assumes end-market activity will begin to
improve sequentially in the second half of 2020. We expect
performance to stabilize in 2021, and the company to experience
better profitability due to fewer supply chain disruptions and
realization of cost synergies from the Anixter acquisition. Under
our base-case forecast, we expect debt leverage to improve but
remain above 5x in 2021," S&P said.
S&P believes the Anixter acquisition will provide WESCO with scale
advantages. The acquisition of Anixter will improve the combined
company's market share within a highly fragmented North American
electrical distribution industry. Combined with Anixter, WESCO will
become the largest North American company in the industry, allowing
it to gain some bargaining power in a consolidating supplier
environment. In addition, the acquisition will expand WESCO's reach
across electrical, data, network infrastructure and security, and
utility markets and slightly improve the company's geographic
diversity.
Although the merger comes with integration risks, WESCO appears
well positioned to execute on its integration plan and realize
targeted synergies over the next two to three years. The Anixter
acquisition will be the largest in WESCO's history, and will come
with integration risks that include not only footprint, supply
chain, and corporate overhead optimization, but also synchronizing
a number of systems across the combined company. Integration costs
are sizable and will comprise $140 million of one-time operating
expenses and about $85 million of capital expenditures over the
next three years, which should yield run-rate cost synergies in
excess of $200 million. S&P also believes the company can achieve
sales synergies from cross-selling a wider product offering but do
not incorporate top-line synergies into its forecast as the timing
and magnitude of these is uncertain.
S&P believes the company has the ability to delever, though
returning leverage to its long-term target of 2.0x-3.5x gross debt
to EBITDA will take several years. The rating agency believes the
company will be able to generate good free cash flow across through
the cycle, as working capital needs decline in a downturn. Its
forecast assumes the company will be able to generate over $300
million in S&P's adjusted free operating cash in 2020, and free
cash flow should increase over time as the company realizes
synergies. Still, S&P does not believe the company will be able to
reduce its debt leverage to its target range (and below the rating
agency's adjusted leverage of 4x) until 2023.
"The stable outlook reflects our expectation that following
weakness in 2020 due to the COVID-19 outbreak, the company's
operating performance recovers next year. Along with continued good
free cash flow generation, this should allow the company to reduce
its S&P Global Ratings' adjusted debt leverage to the 5x-6x area in
2021," S&P said.
"We could lower our issuer credit rating on WESCO over the next 12
months if we expect S&P Global Ratings' adjusted leverage to remain
above 6.5x or if the company's free operating cash flow (FOCF) to
debt drops below 5%," the rating agency said.
This could occur if:
-- End-market demand weakens more than S&P's expect; or
-- The company encounters integration or other operating
challenges that lead to a prolonged contraction in profitability.
Although unlikely over the next 12 months given near-term economic
weakness, S&P could raise its rating if WESCO reduces its S&P
Global Ratings' adjusted debt leverage below 5x. This could occur
if:
-- Economic activity rebounds quickly and meaningfully;
-- The company achieves synergies sooner than S&P expects; and
-- WESCO uses its free cash flow to pay down debt.
WINDSTREAM HOLDINGS: Obligor Unsecureds to Get 0.125% in Plan
-------------------------------------------------------------
Windstream Holdings, Inc., et al., filed an Amended Joint Chapter
11 Plan of Reorganization and a corresponding Disclosure Statement
that addresses objections to the previous iteration of the
documents.
The Debtors filed their initial chapter 11 plan and disclosure
statement on April 1, 2020. Several objectors raised concerns and
objections with respect to the Plan and Disclosure Statement.
Specifically, on April 30,2020, Element Fleet Corporation filed its
objection to the Disclosure Statement, raising concerns over the
executory contract assumption and rejection procedures, the
timeline for definitive assumption and rejection of such contracts,
claim releases, and set-off rights under such executory contracts.
The SEC filed its objection to the Disclosure Statement, asserting
concerns for non-consensual third-party releases, and the Court's
authority to grant such releases. Finally, the Securities
Litigation plaintiff filed the objection to the Disclosure
Statement, asserting concerns for adequate information provided to
the Securities Litigation plaintiffs, third-party release
provisions related to the Securities Litigation plaintiffs, and
preservation of evidence for the ongoing securities litigation.
The Debtors have engaged in discussions with such parties and have
resolved a number of the issues raised in the objections. However,
the Debtors reserve all rights related to such objections and
underlying claims.
The Plan provides for the reorganization of the Debtors as a going
concern with a deleveraged capital structure and sufficient
liquidity to fund the Debtors' post-emergence business plan. The
Plan, Plan Support Agreement, and Uniti Settlement are significant
achievements for the Debtors in these chapter 11 cases, which were
initiated unexpectedly and with no clear path to confirmation in
sight, and now will culminate in a restructuring transaction that
maximizes value for all stakeholders.
According to the Amended Disclosure Statement, the Amended Plan
treats claims as follows:
* Class 3 First Lien Claims totaling $3.151 billion. The class,
which is impaired is projected to recover 62.8% to 71.3%. Each
holder of an Allowed First Lien Claim shall receive its Pro Rata
share of: (a) 100% of the Reorganized Windstream Equity Interests
(b) cash in an amount equal to the sum of (i) the Distributable
Exit Facility Proceeds, (ii) the Distributable Flex Proceeds, (iii)
the cash proceeds of the Rights Offering, and (iv) all other cash
held by the Debtors as of the Effective Date in excess of the
Minimum Cash Balance; (c) the Distributable Subscription Rights;
and (d) as applicable, the First Lien Replacement Term Loans.
* Class 4 Midwest Notes Claims totaling $100 million. The
class, which is impaired, is projected to recover $100 million and
may recover 100%. Each holder of an Allowed Midwest Notes Claim
shall receive its Pro Rata share of the Midwest Notes Exit Facility
Term Loans, the principal amount of which shall be $100 million.
* Class 5 Second Lien Claims totaling $1.235 billion. The class
will recover 0.125%. If holders of Allowed Second Lien Claims vote
as a class to accept the Plan, on the Effective Date, each holder
of an Allowed Second Lien Claim shall receive cash in an amount
equal to $0.00125 for each $1.00 of Allowed Second Lien Claims. If
holders of Allowed Second Lien Claims vote as a class to reject the
Plan, on the Effective Date, each holder of an Allowed Second Lien
Claim shall receive treatment consistent with Section 1129(a)(7) of
the Bankruptcy Code.
* Class 6A Obligor General Unsecured Claims totaling $1.183
billion to $1.203 billion. The class, which is impaired, will
recover 0% to 0.125%. If holders of Allowed Obligor General
Unsecured Claims vote as a class to accept the Plan, on the
Effective Date, each holder of an Allowed Obligor General Unsecured
Claim shall receive cash in an amount equal to $0.00125 for each
$1.00 of such Allowed Obligor General Unsecured Claims. If holders
of Allowed Obligor General Unsecured Claims vote as a class to
reject the Plan, on the Effective Date, each holder of such an
Allowed Obligor General Unsecured Claim shall receive treatment
consistent with Section 1129(a)(7) of the Bankruptcy Code.
* Class 6B Non-Obligor General Unsecured Claims totaling $34
million to $39 million. The class will recover 100%.
* Class 9 Interests in Windstream. This class is impaired.
Each holder of an Interest in Windstream shall have such Interest
cancelled, released, and extinguished without any distribution.
The Reorganized Debtors shall fund distributions under the Plan
with (a) Cash on hand; (b) the issuance and distribution of
Reorganized Windstream Equity Interests and Special Warrants; (c)
proceeds of the New Exit Facility; (d) the Midwest Notes Exit
Facility Term Loans issued under the New Exit Facility; (e) the
First Lien Replacement Term Loans, as applicable; (f) subscription
rights to participate in the Rights Offering; and (g) proceeds of
the Rights Offering.
The final amount of Allowed General Unsecured Claims will not
affect the recovery of holders of Allowed General Unsecured Claims
in Class 6B (Non-Obligor General Unsecured Claims), who will be
paid in full.
Holders of Allowed Obligor General Unsecured Claims (Class 6A) will
either receive $0.00125 for each $1.00 of such Allowed Claims if
the Class votes to accept the Plan or will receive treatment
consistent with section 1129(a)(7) of the Bankruptcy Code if the
Class votes to reject the Plan. As a result, the final amount of
Allowed General Unsecured Claims will not affect the recovery of
holders of Allowed General Unsecured Claims in Class 6A if the
Class votes to accept the Plan, but may affect recoveries for those
creditors if that Class votes to reject the Plan.
A full-text copy of the Disclosure Statement dated May 6, 2020, is
available at https://tinyurl.com/y8oxdgbo from PacerMonitor.com at
no charge.
Counsel to the Debtors:
Stephen E. Hessler, P.C.
Marc Kieselstein, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
- and -
James H.M. Sprayregen, P.C.
Ross M. Kwasteniet, P.C.
Brad Weiland
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, Illinois 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
About Windstream Holdings
Windstream Holdings, Inc., and its subsidiaries provide advanced
network communications and technology solutions for businesses
across the United States. They also offer broadband, entertainment
and security solutions to consumers and small businesses primarily
in rural areas in 18 states.
Windstream Holding Inc. and its subsidiaries filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25,
2019.
The Debtors had total assets of $13,126,435,000 and total debt of
$11,199,070,000 as of Jan. 31, 2019.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as counsel; PJT Partners LP as financial advisor
and investment banker; Alvarez & Marsal North America LLC as
restructuring advisor; and Kurtzman Carson Consultants as notice
and claims agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on March 12, 2019. The committee tapped
Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP, as
its financial advisor, and Perella Weinberg Partners LP as
investment banker.
WITTER HARVESTING: June 23 Plan Confirmation Hearing Set
--------------------------------------------------------
On April 20, 2020, the U.S. Bankruptcy Court for the Southern
District of Florida held a hearing to consider approval of the
disclosure statement filed by Witter Harvesting, Inc.
On May 7, 2020, Judge Mindy A. Mora approved the disclosure
statement and established the following dates and deadlines:
* June 23, 2020, at 1:30 p.m. in the United States Bankruptcy
Court, 1515 North Flagler Drive, Courtroom A, West Palm Beach,
Florida 33401 is the hearing to consider confirmation of the plan.
* June 2, 2020, is fixed as the last day for filing and serving
fee applications.
* June 9, 2020, is fixed as the last day for filing and serving
objections to confirmation of the plan.
* June 9, 2020, is fixed as the last day for filing a ballot
accepting or rejecting the plan.
* May 14, 2020, is fixed as the last day for filing and serving
objections to claims.
A copy of the order dated May 7, 2020, is available at
https://tinyurl.com/y9pf5fz9 from PacerMonitor at no charge.
The Debtor is represented by:
Dana Kaplan, Esquire
KELLEY, FULTON & KAPLAN, P.L.
1665 Palm Beach Lakes Blvd., Suite 1000
West Palm Beach, FL 33401
Tel: (561) 491-1200
Fax: (561) 684-3773
E-mail: dana@kelleylawoffice.com
About Witter Harvesting
Witter Harvesting Inc. provides agricultural and crop harvesting
services in Okeechobee, Fla.
Witter Harvesting sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-14063) on March 29,
2019. At the time of the filing, the Debtor was estimated to have
assets and liabilities of between $1 million and $10 million. The
case is assigned to Judge Mindy A. Mora.
The Debtor tapped Kelley & Fulton, PL, as its bankruptcy counsel;
and CPA Tax Solutions, LLC as an accountant.
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case.
[] BOOK REVIEW: THE SUCCESSFUL PRACTICE OF LAW
----------------------------------------------
Author: John E. Tracy
Publisher: Beard Books
Soft cover: 470 pages
List Price: $34.95
Order a copy today at https://is.gd/fSX7YQ
Originally published in 1947, The Successful Practice of Law still
ably serves as a point of reference for today's independent lawyer.
Its contents are based on a series of non-credit lectures given at
the University of Michigan Law School, where the author began
teaching after 26 years of law practice. His wisdom and experience
are manifest on every page, and will undoubtedly provide guidance
for today's hard-pressed attorney.
The Successful Practice of Law provides timeless fundamental
guidelines for a successful practice. It is intended neither as a
comprehensive reference work, nor as a digest of law. Rather, it is
a down-to-earth guide designed to help lawyers solve everyday
problems -- a ready-to-tap source of tested proven methods of
building and maintaining a sound practice.
Mr. Tracy talks at length about developing a client base. He
contends that a firemen's ball can prove just as useful as an
exclusive party at the country club in making contacts with future
clients. He suggests seeking work from established firms as a way
to get started before seeking collections work out of desperation.
In his chapter on keeping clients, Mr. Tracy gives valuable lessons
in people skills: "(I)f a client tells you he cannot sleep nights
because of worry about his case, you will ease his mind very much
by saying, 'Now go home and sleep. I am the one to do the worrying
from now on.'" Rather than point out to a client that his legal
predicament is partly his fault, "concentrate on trying to work out
a program that will overcome his mistakes." He cautions against
speculating aloud to clients on what they could have done
differently to avoid current legal problems, lest they change their
stories and suddenly claim, falsely, that they indeed had done that
very thing. He also advises against deciding too quickly that a
client has no case: "After you have been in practice for a few
years you will be surprised to find how many seemingly desperate
cases can be won."
Mr. Tracy advises studying as the best use of downtime. He quotes
Mr. Chauncey M. Depew: "The valedictorian of the college, the
brilliant victors of the moot courts who failed to fulfill the
promise of their youth have neglected to continue to study and have
lost the enthusiasm to which they owed their triumphs on mimic
battle fields." Mr. Tracy advises against playing golf with one's
client every time he asks: "My advice would be to accept his
invitation the first time, but not the second, possibly the third
time but not the fourth."
Other topics discussed by Mr. Tracy, with the same practical, sound
advice, include fixing fees, drafting legal instruments, examining
an abstract of title, keeping an office running smoothly, preparing
a case for trial, and trying a jury case. But some of best counsel
he offers is the following: You cannot afford to overlook the fact
that you are in the practice of law for your lifetime; you owe a
duty to your client to look after his interests as if they were
your own and your professional future depends on your rendering
honest, substantial services to your clients. Every sound lawyer
will tell you that straightforward conduct is, in the end, the best
policy. That kind of advice never ages.
John E. Tracy was Professor Emeritus and Member of University of
Michigan Law School Faculty from 1930 to 1969. Professor Tracy
practiced law for more than a quarter century in Michigan, New York
City, and Chicago before joining the Law School faculty in 1930. He
retired in 1950. He was born in 1880. He died in December 1969.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
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public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
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than a balance sheet solvency test.
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liabilities delivered to nation's bankruptcy courts. The list
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then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
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*********
S U B S C R I P T I O N I N F O R M A T I O N
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Copyright 2020. All rights reserved. ISSN: 1520-9474.
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