/raid1/www/Hosts/bankrupt/TCR_Public/200619.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, June 19, 2020, Vol. 24, No. 170
Headlines
19 U.S. Energy Companies Filed for Bankruptcy Protection in 2020
ABERCOMBIE & FITCH: Moody's Rates New Sr. Secured Notes 'Ba2'
ADVANTAGE HOLDCO: Lender Seeks to Resume Reposession of Vehicles
ALISAL WATER: Fitch Affirms 'BB-' Issuer Default Rating
ALLIED FINANCIAL: Seeks Court Approval to Hire IS Appraiser
ARCHDIOCESE OF NEW ORLEANS: Taps Blank Rome as Special Counsel
ASTRIA HEALTH: $85K Sale of Commercial Yakima Property Approved
BLUCORA INC: Moody's Affirms CFR at B1, Outlook Negative
CARDTRONICS INC: Moody's Rates First Lien Term Loan 'Ba2'
CENTRIC BRANDS: Hires Prime Clerk LLC as Administrative Advisor
CENTRIC BRANDS: Seeks to Hire KPMG LLP as Tax Consultant
CENTRIC BRANDS: Seeks to Hire Ropes & Gray as Legal Counsel
CEQUENCE ENERGY: Gets CCAA Stay Extension Until Sept. 8
CFRA HOLDINGS: June 24 of All of Substantially All Assets Set
CHINOS HOLDINGS: Committee Hires Province as Financial Advisor
CHINOS HOLDINGS: Committee Seeks to Hire Pachulski Stang as Counsel
CHINOS HOLDINGS: Panel Hires Hirschler Fleischer as Local Counsel
CHISHOLM OIL: Case Summary & 30 Largest Unsecured Creditors
COCRYSTAL PHARMA: Stockholders Elect Five Directors
COMPASS BEER: Seeks to Hire Tydings & Rosenberg as Counsel
CRITTENDEN E.M.S: Taps Robertson Law Firm as Legal Counsel
DCP MIDSTREAM: Fitch Rates New Sr. Unsecured Notes 'BB+/RR4'
DCP MIDSTREAM: Moody's Rates New $400MM Senior Notes 'Ba2'
DENNEY ENTERPRISES: Hires Darby Law Practice as Bankruptcy Counsel
DIOCESE OF BUFFALO: Seeks to Hire Connors LLP as Litigation Counsel
DOUBLE G BRANDS: Seeks to Hire Carmody MacDonald as Legal Counsel
DPL INC: Moody's Rates $415MM Notes 'Ba1', Outlook Negative
DURA AUTOMOTIVE: Sale of All North American Assets Approved
ECO-STIM ENERGY: Creditors' Committee Members Disclose Claims
ELDORADO RESORTS: Moody's Cuts CFR to B2 & Alters Outlook to Neg.
ENERGIZER HOLDINGS: Moody's Rates New $600MM Unsec. Notes 'B2'
EVCO HOMES: Seeks Approval to Hire Langley & Banack as Counsel
FOXWOOD HILLS: U.S. Trustee Unable to Appoint Committee
FRANK HELMKA: $278K Sale of Wall Property to CCG Real Approved
FREEDOM OIL: U.S. Trustee Unable to Appoint Committee
GEORGIA DIRECT: Gets Court Approval to Hire Key Auctioneers
GGI HOLDINGS: Committee Hires Kilpatrick Townsend as Legal Counsel
GNC HOLDINGS: Reaches Accord for Extension of Debt Maturity Dates
HERTZ CORPORATION: U.S. Trustee Appoints Creditors' Committee
HORNBECK OFFSHORE: Taps Jackson Walker as Conflicts Counsel
HOTEL CHARLES: Seeks Approval to Hire DeCaro & Howell as Counsel
IFS SECURITIES: Taps Richard E. Brodsky as Litigation Counsel
J.C. PENNEY: Four-Member Ad Hoc Equity Committee Formed
J.C. PENNEY: Law Firm of Russell Represents Utility Companies
J.C. PENNEY: Sussman & Moore Represents Utility Companies
JC PENNEY: Fitch Withdraws 'D' LT IDR on Bankruptcy Filing
JOHN VARVATOS: July 15 Auction of Substantially All Assets Set
KARISCOM LLC: Seeks to Hire Politan Law as Special Counsel
LIBBEY GLASS: U.S. Trustee Appoints Creditors' Committee
LVI INTERMEDIATE: U.S. Trustee Appoints Creditors' Committee
MAJESTIC HILLS: U.S. Trustee Appoints Creditors' Committee
MARUTI REALSTATE: Seeks to Hire Tydings & Rosenberg as Counsel
METHANEX CORP: Moody's Cuts Senior Unsec. Ratings to Ba1
MIDTOWN CAMPUS: U.S. Trustee Unable to Appoint Committee
MORGAN STANLEY 2018-H3: Fitch Affirms B- on Class G-RR Certs
NEP GROUP: Fitch Rates New $100MM Incremental First Lien Loan 'B'
NFN NMN DESMOND: U.S. Trustee Unable to Appoint Committee
NKS HOLDINGS: Hires Maida Clark as Bankruptcy Counsel
NORTHEAST GAS: Case Summary & 20 Largest Unsecured Creditors
NORTHERN OIL: Stockholders Pass All Proposals at Annual Meeting
NOVABAY PHARMACEUTICALS: Hikes Stock Offering Amount by $1.3M
OHIO VALLEY: Moody's Alters Outlook on Ba1 Unsec. Rating to Pos.
PARKLAND CORP: Fitch Rates New Unsecured Notes 'BB/RR4'
PQ NEW YORK: U.S. Trustee Appoints Creditors' Committee
R. MILLENNIUM: Seeks Court Approval to Hire Bankruptcy Attorney
REDSTONE BUYER: Fitch Assigns First-Time B+ LT IDRs, Outlook Stable
REDSTONE BUYER: Moody's Assigns B2 CFR, Outlook Stable
RELIABLE PROFESSIONAL: Hires Frost & Associates as Counsel
RELIABLE PROFESSIONAL: Hires PJT Partners as Investment Banker
RENEW CHIROPRATIC: Seeks to Hire Williams Turner as Counsel
RR3 RESOURCES: Hires Daszkal Bolton as Accountant
SAMI SELIM PALA: Proposed Sale of CSM's Wayne Property Approved
SCIENTIFIC GAMES: Moody's Rates $350MM Senior Unsec. Notes 'Caa2'
SKILLSOFT CORP: Pachulski, Gibson Represent First Lien Group
SM ENERGY: $295.8 Million of Old Notes Tendered in Exchange Offer
SOGIO INVESTMENTS: Seeks Approval to Hire Holder Law as Counsel
SPERLING RADIOLOGY: Hires Kohlhagen Neiman as Tax Professional
STA VENTURES: Seeks to Hire Peach Appraisal Group
STA VENTURES: Taps Chamberlain Hrdlicka as Legal Counsel
STONEWALL MOTORS: Seeks to Hire Ivey McClellan as Counsel
TANGO DELTA: U.S. Trustee Unable to Appoint Committee
TONTO BASIN: Gets Approval to Hire Taylor Accounting Firm
TOPAZ SOLAR: Fitch Hikes Rating on $1.1BB Secured Notes to 'BB'
TTK RE ENTERPRISE: $200K Sale of Somers Point Property Approved
ULTIMATE SOFTWARE: Moody's Hikes CFR to B2, Outlook Stable
ULTRA PETROLEUM: Hires Centerview Partners as Investment Banker
ULTRA PETROLEUM: Hires Quinn Emanuel as Legal Counsel
ULTRA PETROLEUM: Seeks to Hire FTI Consulting as Financial Advisor
ULTRA PETROLEUM: Seeks to Hire Jackson Walker as Conflicts Counsel
ULTRA PETROLEUM: Seeks to Hire Kirkland & Ellis as Legal Counsel
VENUS CONCEPT: Signs $31 Million Stock Purchase Agreement
VIASAT INC: Fitch Affirms 'B+' IDR and Rates Unsec. Notes 'BB-'
VIASAT INC: Moody's Rates $400MM Senior Unsecured Notes 'Caa1'
VIDEO RIVER: Posts $161K Net Income in 2019
VTV THERAPEUTICS: All Three Proposals Passed at Annual Meeting
WANSDOWN PROPERTIES: Proposes to Sell New York Property for $10.3M
WATERSIDE CONSTRUCTION: Hires Buddy D. Ford as Bankruptcy Counsel
[*] 20 Retailers That Could File for Bankruptcy in 2nd Half of 2020
[*] Fox Rotschild: 90-Day Bankruptcy Solution for Franchises
[*] Spilman Thomas: 10 Bankruptcy Truths that Creditors Should Know
[^] BOOK REVIEW: BIG BOARD: A History of the New York Stock Market
*********
19 U.S. Energy Companies Filed for Bankruptcy Protection in 2020
----------------------------------------------------------------
Kallanish Energy reports that there are 19 energy companies in the
country that filed bankruptcy protection in the U.S. in 2020.
Texas-based Gavilan Resources last month filed for Chapter 11
protection, saying it intends to sell its business and assets.
It cited the coronavirus pandemic and the oil price rout along with
an ongoing dispute with a joint venture partner in the Eagle Ford
Shale in South Texas, Kallanish Energy reports.
It is among 19 new bankruptcies filed in 2020 through May 31 by
U.S. energy companies, according to a list maintained by the Haynes
and Boone law firm.
The firm with headquarters in Dallas, Texas, said the 19 filings
reflected a total debt of $13.1 billion.
Other firms filing for federal protection include Whiting
Petroleum, Echo Energy Partners, Ultra Petroleum, Skylar
Exploration, Diamond Offshore, Freedom Oil and Gas, and Templar
Energy.
There were 51 bankruptcy filings from Jan. 1 through May 31 in
2016; 14 in 2017, 18 in 2018, and 18 in 2019, the law firm said in
its Oil Patch Bankruptcy Monitor.
Overall, there are about 225 bankruptcy cases across the country
pending in federal bankruptcy courts, as of May 31, it said.
There have been predictions that a wave of Chapter 11 filings is
coming and that more than 100 U.S. energy companies may be forced
to declare bankruptcy this year after the coronavirus pandemic and
the oil price rout.
According to Haynes and Boone, there have been 13 bankruptcies by
oilfield service companies in 2020, through May 31.
Those filings had a total debt of $11.6 billion, it said.
That compares to 28 bankruptcies from Jan. 1 through May 31 in
2017, eight in 2018 and four in 2019, the law firm said in a
separate listing of wellfield service companies.
ABERCOMBIE & FITCH: Moody's Rates New Sr. Secured Notes 'Ba2'
-------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Abercrombie &
Fitch Management Co.'s proposed senior secured notes. Concurrently,
Moody's affirmed the company's Ba3 corporate family rating and
Ba3-PD probability of default rating. The speculative-grade
liquidity rating remains SGL-1 and the ratings outlook is
negative.
Proceeds from the proposed $300 million senior secured notes due
2025 will be used to repay the $233 million outstanding term loan
due August 2021 and reduce revolver borrowings.
The CFR and PDR affirmation reflect Moody's expectations that the
company's very good liquidity and large cash balances relative to
funded debt levels will enable it to withstand near-term negative
EBITDA and cash burn due to COVID-19 disruption, and position it
for gradual earnings recovery starting in 2021.
Moody's took the following rating actions for Abercrombie & Fitch
Management Co.:
Corporate family rating, affirmed Ba3
Probability of default rating, affirmed Ba3-PD
New senior secured notes, assigned Ba2 (LGD3)
Outlook, remains negative
The Ba2 rating on the existing credit facility will be withdrawn
upon close of the transaction.
RATINGS RATIONALE
Abercrombie's Ba3 CFR reflects the company's very good liquidity
and relatively low levels of funded debt relative to cash balances.
As of May 2, 2020, and pro-forma for the transaction, the company
had $705 million of cash and $150 million of borrowings under its
$400 million asset-based revolving credit facility, with an
estimated $87 million excess availability before cash dominion
limitations. In addition, the rating incorporates governance
considerations, specifically Abercrombie's track record of balanced
financial strategies with a focus on maintaining financial
flexibility, which has allowed the company to consistently invest
in its business. The rating also benefits from the company's
well-recognized global brands and sizable market presence. Moody's
expects Abercrombie's credit metrics to improve materially in 2021
after steep deterioration in 2020. Over the long term, Abercrombie
could emerge from the significant 2020 disruption with improved
ability to lower its fixed costs and better competitive positioning
following likely consolidation in the apparel sector.
The ratings are constrained by the company's very high business
risk as a niche retailer in the highly competitive teen apparel
market, which is subject to elevated fashion risk, margin pressure
from the shift to e-commerce and volatile discretionary spending.
Moody's expects negative EBITDA in 2020 driven by COVID-19-related
temporary store closures, promotional activity and economic
downturn. For Abercrombie, the impact will be exacerbated by the
company's mall-based locations, 14-24-year-old demographic, which
is more vulnerable to changes in employment conditions, as well as
the strengthening US dollar, which negatively impacts Abercrombie's
sizeable foreign earnings. Mitigating factors are the company's
relatively high proportion of basics such as denim in its
assortment, and meaningful e-commerce penetration of about 33%. In
2021, Moody's projects EBITDA recovery to levels within 40% of
2019. Combined with revolver repayment, Moody's expects this to
result in leverage improvement to 3 times Moody's-adjusted
debt-EBITDA by year-end 2021, from 3.2 times as of May 2, 2020
(pro-forma). In addition, as an apparel retailer, the company needs
to make ongoing investments in its brands and infrastructure, as
well as in social and environmental drivers including responsible
sourcing, product and supply sustainability, privacy and data
protection.
The negative outlook reflects the risk that the impact of
coronavirus could result in greater than anticipated declines in
earnings, credit metrics or liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded should there not be a clear path to
EBITDA improvement in 2021 to a level within 40% below 2019.
Ratings could also be downgraded if liquidity deteriorates for any
reason or financial strategy becomes more aggressive, including
share repurchases before returning to more normalized operating
performance. Quantitatively, the ratings could be downgraded if
debt/EBITDA is maintained above 4.0 times and EBIT/interest expense
is below 1.75 times. The ratings could also be downgraded if
liquidity weakens, including reduction in cash balances below
levels that comfortably cover daily operations and the outstanding
debt balance, weaker free cash flow generation or meaningful
revolver utilization.
The ratings could be upgraded if the company demonstrates a
consistent track record of revenue and operating income growth,
while maintaining very good liquidity and balanced financial
policies. Quantitative metrics include expectations that
debt/EBITDA will be sustained below 3.0 times and EBIT/interest
expense above 3.5 times.
Abercrombie & Fitch Management Co. is an indirect subsidiary of
Abercrombie & Fitch Co. The company operates approximately 850
specialty apparel stores and several e-commerce websites in North
America, Europe, and the Asia Pacific regions under the
"Abercrombie & Fitch", "abercrombie kids", and "Hollister" brands.
For the twelve months ended May 2, 2020, the company generated
approximately $3.4 billion in revenues.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
ADVANTAGE HOLDCO: Lender Seeks to Resume Reposession of Vehicles
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Law360 reports that a lender that financed vehicle purchases of
bankrupt car rental company Advantage Holdco requested the Delaware
judge on June 11, 2020 to allow it to continue its prepetition
repossession efforts for $12.3 million worth of cars as it seeks to
protect its collateral.
In its motion, Element Fleet Corp. said it provided a $50 million
revolving credit facility that enabled debtor subsidiary E-Z Rent A
Car LLC to purchase vehicles for its rental fleet, but in early
2020 the debtor defaulted on that loan and began reducing the size
of its fleet by asking Element to begin repossessing the vehicles.
About Advantage Holdco
Advantage Holdco, Inc., doing business as Advantage Rent a Car, is
a car rental company with 50 locations in the U.S. and 130
international affiliate locations. The parent entity, Advantage
Holdco, is owned by Toronto-based Catalyst Capital Group. Advantage
-- http://www.advantage.com/-- has locations in 27 markets,
including New York, Los Angeles, Orlando, Las Vegas and Hawaii,
according to its website.
Advantage Holdco and six related entities sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-11259) on May 26, 2020.
As of the bankruptcy filing, Advantage Holdco was estimated to have
$100 million to $500 million in assets and $500 million to $1
billion in liabilities.
The Hon. John T. Dorsey is the case judge.
Debtors tapped Cole Schotz P.C. as their legal counsel, and
Mackinac Partners, LLC as their restructuring advisor.
ALISAL WATER: Fitch Affirms 'BB-' Issuer Default Rating
-------------------------------------------------------
Fitch Ratings has affirmed Alisal Water Corporation's Long-Term
Issuer Default Rating at 'BB-' and Alco's senior secured bonds at
'BB+'/'RR1'. The 'RR1' rating for the senior secured bonds reflects
Fitch's expectation for outstanding recovery for the debt security
in the event of default. The Rating Outlook is Stable.
KEY RATING DRIVERS
Rating Affected by Small Size/Scale: Fitch expects Alco's small
asset base and operations to yield an Operating EBITDA of
approximately $2 million and FFO of less than $1 million during the
forecast period, making it the smallest stand-alone privately owned
utility rated by Fitch. The size of operations carries an outsized
risk of adverse changes from variations in revenues and/or
expenses, making Alco more susceptible to external shocks. This
could lead to a material impact on financial metrics from
relatively small changes in business conditions. However, such
variations are relatively unexpected given the regulatory
mechanisms at Alco's disposal i.e. 50% fixed charge cost recovery
as part of Alco's rates to customers and the power cost recovery
mechanism, the Purchased Power Expense Offset. The latter allows
the company to pass through power cost increases to customers.
Coronavirus Concerns: The impacts from the measures taken to combat
the spread of coronavirus have been muted thus far; however, Fitch
has concerns regarding the increase in customer non-payments given
the high unemployment rate in Alco's service territory. The
concerns are related to an unexpected increase in bad debt expense
and Alco's ability to recover such expenses in a timely manner.
Fitch will continue to monitor the impact of customer non-payments
on Alco's results. Following the coronavirus related state of
emergency announcement in California (March 4, 2020), Alco began
booking costs related to virus-response activities as well as
compliance with government mandates to its Catastrophic Event
Memorandum Account. Steps taken by Alco amid coronavirus include
delaying discontinuation of service to non-paying accounts
throughout the length of the state of emergency and making
available disaster relief customer protections (i.e. payment
plans).
Legal Structure: Alco is a privately owned C-corporation and is
family owned, members of which include the president and CEO. Alco
is the exclusive holder of water utility assets and issuer of debt
outstanding. There are no material operating subsidiaries. The
legal structure is unlike most Fitch-rated utility peers, lacking
the benefit of being part of a larger utility family and is not
subject to private equity ownership.
Rate Regulation: Alco is regulated by the California Public
Utilities Commission and is currently allowed to earn a 10.7% ROE
on a 30% equity thickness. The company has been unable to meet the
annual revenue requirement set in its last General Rate Case due to
successful water conservation efforts placing downward pressure on
annual volume of water sold. The 2011 GRC decision that set a 50%
fixed charge cost recovery mechanism and Alco's recent ability to
recoup increasing power costs from customers in the form of
surcharges relieves downward pressure on profitability from reduced
volume of water sold. The mechanisms placed for collections include
an ongoing forward cost recovery through PPEO, adjusted annually,
which is designed to offset increasing power costs. In addition,
through the Purchased Power Balancing Account, Alco is able to
recover the difference in power costs approved in the 2011 GRC
versus power costs paid (2010-2019). Fitch views the PPEO and PPBA
positively as these mechanisms are expected to improve Alco's
ability to recover dollars spent, going forward as well as past
recovery, through rates charged to customers; however, revenues are
not fully decoupled, and as such, the company is exposed to varying
customer usage patterns. The 10.7% ROE is above average compared to
the rest of its regulated coverage, while the 30% equity thickness
is below average.
Expected Stability In Credit Metrics: Alco's leverage has weathered
some volatility over the past few years. Fitch does expect leverage
fluctuations to stabilize and an improved company financial profile
over the forecast period. The expected stability comes after
slightly reduced pressure on further water conservation efforts and
recently set power cost recovery mechanisms, leading to quicker
recoupment of costs. Alco's projected leverage metrics are
supportive of the ratings throughout the forecast period. Assuming
normal usage patterns, Fitch expects Total Debt with Equity
Credit/Operating EBITDA and FFO leverage to improve to 3.3x and
3.4x respectively, by 2022, from approximately 4.5x and 4.2x,
respectively, at YE 2019.
Water Conservation Efforts: The 2011 GRC set Alco's annual revenue
requirement at approximately $8.6 million, including an estimated
annual volume of water sold of 1.9 million CCF. Due to increased
water conservation efforts, among other factors, the volume of
water sold in 2019 was 1.7 million CCF with $7.9 million in
reported revenue, in line with 2018 performance. Fitch expects
water conservation efforts to place continued downward pressure on
volumes. Fitch does not expect an increase in water volumes unless
Alco's service territory has significant growth. Within the GRC, a
water conservation budget of $85,000 per year was set, which
recovers the required amounts to fund conservation programs. Any
authorized surcharge is added to the quantity rate rather than a
flat surcharge on each bill. The collection for 2019 will be
collected through a surcharge of $0.0439 per CCF.
Positive Free Cash Flow: Alco is unique compared to the rest of
Fitch's utilities coverage given its ability to directly collect
costs from developers, typically as contributions, for new projects
prior to commencing development. Once infrastructure is built, the
projects are considered additions to Alco's plants but do not earn
a rate of return nor are added to rate base. The depreciation
applicable to these utility plants effectively amortizes the
initial contributions received. Alco collects its costs to operate
and maintain the new facilities. The capability of externally
funded growth provides Alco an opportunity to be consistently free
cash flow positive while still growing.
DERIVATION SUMMARY
Alco's ratings primarily reflect the utility's small scale of
operations. On the regulatory front, recent mechanisms have been
put in place to mitigate a portion of the impact from rising power
cost, as well as recover previous costs. Alco has a weaker business
risk profile compared to peer Mountaineer Gas Company (MGC;
BB+/Stable), largely due to its notably smaller size. Similarities
include rate regulation that lacks full revenue decoupling and
weather normalization features. Both companies have repair and
replacement spending expectations over the forecast period that
drives modest rate base growth. However, MGC serves approximately
220,000 natural gas customers in West Virginia compared to
approximately 40,000 to 50,000 water customers at Alco.
Additionally, operating EBITDA of roughly $30 million-$35 million
at MGC is significantly larger than the $1.5million-$2.0 million at
Alco.
Alco has a weaker business risk profile than peers The Berkshire
Gas Company (BGC; A-/Stable) and The Southern Connecticut Gas
Company (SCG; A-/Stable), largely due its small size of operations.
BGC and SCG operate in more-balanced regulatory environments and
benefit from full revenue decoupling. Alco's ratings have limited
upside due to the utility's small size and scale and geographic
concentration. Unlike Alco, which is a stand-alone utility, BGC and
SCG benefit from being owned by AVANGRID, Inc. (BBB+/Stable), which
is a large parent of eight regulated electric and natural gas
distribution utilities.
Alco's credit metrics are weaker than its peers BGC, SCG and MGC
but are expected to improve over the forecast period as free cash
flow generation allows for debt repayment. Assuming normal usage
patterns, Fitch expects FFO leverage to improve to 3.4x by 2022
from approximately 4.2x at the end of 2019, higher than peers BGC
and SCG but lower than MGC.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within its Rating Case for the Issuer
-- Revenue remains relatively flat throughout forecast period due
to water conservation efforts placing downward pressure on volume
of water sold.
-- EBITDA margins increase by improved power cost recovery
mechanisms. Specifically, increasing power costs are offset through
the implementation of PPEO and PPBA surcharges helps stabilize net
income throughout forecast periods.
-- Capex of $2.1 million from 2020 - 2022 related to updating
meters, main replacements and pumping equipment. Fitch notes Alco
receives a good portion of its growth spending from developers
ahead of time, before the related infrastructure is built, reducing
the need for the company to spend large dollar amounts.
-- Operating lease expense forecasted to be $180,000 over the
forecast period, consistent with recent years.
-- Secured debt repayments according to the amortization schedule
assumed over the forecast period.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- A positive rating action is not likely due to Alco's small
scale of operations; however, Fitch would look to upgrade the
rating if operating EBITDA were to reach $10 million while FFO
leverage is maintained below 5.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- If Fitch were to expect FFO leverage to exceed 6.0x, on a
sustained basis.
-- An adverse regulatory decision that meaningfully reduces the
stability and predictability of earnings and cash flow.
-- Deterioration in liquidity.
-- Outsized and unexpected negative impacts from COVID19.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Alco ended 2019 with $471,000 in available
cash and does not have a revolving credit facility of any kind. The
company is required to keep just over $700,000 in restricted cash
to meet funding needs related to the senior secured bonds, however.
Alco does not anticipate the need for additional debt over the
forecast period. As a backstop, the CEO and his family (founders of
the company in 1932) have been supportive of Alco in extreme
circumstances. Debt amortization of approximately $1.6 million is
expected over the forecast period. The only scheduled debt maturity
the company has is in 2027 when the senior secured bonds come due.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
ALLIED FINANCIAL: Seeks Court Approval to Hire IS Appraiser
-----------------------------------------------------------
Allied Financial, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Puerto Rico to employ IS Appraiser Group,
P.S.C. to conduct an appraisal of its real properties.
The properties include:
(a) Lot of 25.7 cdas located at Road #719 km 1.0 int. Helechal
Ward, Barranquitas, PR
(b) Lot of 2.46 cds. Located at Road #466, km. 6.4, Jobos
Ward, Isabela, PR
(c) Lot of 3,961.81 sm located at Road #849 km 1.3 Sabana
Llana Ward, San Juan, PR
(d) Lot #3 of 1,023.48 sm located at Road #796, km. 3.5 Bairoa
Ward, Caguas, PR
(e) Lot #4 of 900.00 sm located at Road #796, km. 3.5 Bairoa
Ward, Caguas, PR
(f) Lot #19 of 1,058.57 sm located at Road #796, km. 3.5
Bairoa Ward, Caguas, PR
(g) Lot #20 of 1,137.29 sm located at Road #796, km. 3.5
Bairoa Ward, Caguas, PR
(h) Remnant of 15,153.25 sm located at Road #796, km. 3.5
Bairoa Ward, Caguas, PR
(i) Lot of 128.84 cds located at Road #121 km 11.0 Susua Ward,
Sabana Grande, PR
(j) Lot of 1,604.57 sm located at Lleguada Ward, Vega baja,
PR
(k) Lot #7 of 8,234.49 sm located at Aguacate Ward, Aguadilla,
PR
(l) Lot #15 of 1,353.12 sm located at Aguacate Ward,
Aguadilla, PR
IS Appraiser will be paid a flat fee of $5,250, plus 4 percent
state service tax for the appraisal. Should it be required that
the firm appear at meetings or court attendance to testify, the
services will be charged at $125 per hour.
Ismael Isern Suarez of IS Appraiser disclosed in court filings that
he is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code.
Mr. Suarez can be reached at:
Ismael Isern Suarez
IS Appraiser Group, P.S.C.
Urb. Ponce de Leon
13 Ave. Esmeralda Local 1A
Guaynabo, PR 00969-4430
Telephone: (787) 765-2110
Facsimile: (787) 765-2132
About Allied Financial
Allied Financial, Inc. filed a Chapter 11 bankruptcy petition
(Bankr. D.P.R. Case No. 16-00180) on Jan. 15, 2016. At the time of
the filing, Debtor disclosed total assets of $10.3 million and
total debt of $9.14 million. Judge Mildred Caban Flores oversees
the case. C. Conde & Assoc. is Debtor's legal counsel.
ARCHDIOCESE OF NEW ORLEANS: Taps Blank Rome as Special Counsel
--------------------------------------------------------------
The Roman Catholic Church for Archdiocese of New Orleans seeks
approval from the U.S. Bankruptcy Court for the Eastern District of
Louisiana to employ Blank Rome LLP as its special counsel.
The Debtor desires to employ Blank Rome LLP to render legal advice
regarding its insurance policies. Blank Rome's services will be
essential to the reorganization of the Debtor because obtaining
maximum insurance coverage increases the viability of confirming a
Chapter 11 plan of reorganization.
The Debtor is seeking to employ James Murray, Esq., and James
Carter, Esq., whose current hourly rates are $1,095 and $810,
respectively. For purposes of this representation, Mr. Murray and
Mr. Carter have agreed to discount their hourly rates to $843, and
$624, respectively.
The current hourly rates for other firm personnel are as follows:
Partners $510 - $1,550
Counsels $455 - $1,285
Associates $350 - $850
Paralegals $195 - $580
Clerks and Librarians $195 - $580
The hourly rates of the members of the E-Discovery, Analysis and
Technology Assistance (eDATA) range from $175 to $530.
Mr. Murray disclosed in court filings that the firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code, as required by Section 327(a) of the Bankruptcy
Code.
The firm can be reached through:
James R. Murray, Esq.
BLANK ROME LLP
1825 Eye Street NW
Washington, D.C. 20006
Telephone: (202) 420-2200
Facsimile: (202) 420-2201
E-mail: jmurray@blankrome.com
About 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 Debtor.
Donlin, Recano & Company, Inc. is the claims agent and Blank Rome
LLP is the Debtor's special insurance counsel.
ASTRIA HEALTH: $85K Sale of Commercial Yakima Property Approved
---------------------------------------------------------------
Judge Whitman L. Holt of the U.S. Bankruptcy Court for the Eastern
District of Washington authorized the private sale by SHC Medical
Center – Yakima, an affiliate of Astria Health, of the commercial
real estate legally described as Condominium Unit 42, Yakima
Professional Center, City of Yakima, County of Yakima, Washington,
APN 181324-34563, as described more fully in their Commercial
Property Purchase and Sale Agreement, to Franklund Trust for
$85,000.
The sale is free and clear of any liens, claims, interests and/or
other encumbrances.
Any stay under Rule 6004(h) of the Federal Rules of Bankruptcy
Procedure, or otherwise, pertaining to the transfer of the
Purchased Asset as set forth in the Motion and Agreement, is waived
and will not apply.
About Astria Health
Astria Health and its subsidiaries -- https://www.astria.health --
are a nonprofit health care system providing medical services to
patients who generally reside in Yakima County and Benton County,
Wash., through the operation of Sunnyside, Yakima, and Toppenish
hospitals, as well as several health clinics, home health services,
and other healthcare services. Collectively, they have 315 licensed
beds, three active emergency rooms, and a host of medical
specialties. The Debtors have 1,547 regular employees.
Astria Health and 12 of its subsidiaries filed for bankruptcy
protection (Bankr. E.D.Wash, Lead Case No. 19-01189) on May 6,
2019. In the petitions signed by John Gallagher, president and
CEO, the Debtors estimated assets and liabilities of $100 million
to $500 million.
The Hon. Frank L. Kurtz oversees the cases.
Bush Kornfeld LLP and Dentons US LLP serve as the Debtors' counsel.
Kurtzman Carson Consultants, LLC is the claims and noticing agent.
Gregory Garvin, acting U.S. trustee for Region 18, on May 24, 2019,
appointed seven creditors to serve on an official committee of
unsecured creditors. The Committee retained Sills Cummis & Gross
P.C. as its legal counsel; Polsinelli PC, as co-counsel; and
Berkeley Research Group, LLC as financial advisor.
BLUCORA INC: Moody's Affirms CFR at B1, Outlook Negative
--------------------------------------------------------
Moody's Investors Service affirmed Blucora, Inc.'s B1 corporate
family rating and B1 senior secured term loan rating. The rating
action follows Blucora's announcement that it plans to increase its
Term Loan B by $175 million. Blucora currently has a $390 million
senior secured credit facility due 2024 and a $65 million revolving
credit facility (currently undrawn) due 2022. Following the
completion of the upsize, Blucora's total debt balance would be
around $565 million. Blucora intends to use $100 million of the net
proceeds to complete its previously announced acquisition of HK
Financial Services, a provider of tax and wealth management
services with around $4 billion in client assets. The remaining
balance of about $75 million will remain on the firm's balance
sheet. The outlook remains negative.
Affirmations:
Issuer: Blucora, Inc.
Corporate Family Rating, Affirmed B1
Senior Secured Bank Credit Facilities, Affirmed B1
Outlook Actions:
Issuer: Blucora, Inc.
Outlook, Remains Negative
RATINGS RATIONALE
Moody's said the ratings affirmation reflects Blucora's financial
profile which benefits from a diversified business model with
profitable franchises in tax preparation and wealth management.
Blucora's ratings are also supported by strong cash flow
generation, resulting in ample liquidity and ability to reduce
leverage.
Moody's said the economic, operational and other consequences of
the ongoing coronavirus pandemic are profound, and the magnitude
and duration of these consequences remain fluid and uncertain.
Similar to most of its peers, these matters present a fundamental
credit challenge to Blucora. In addition to a rising uncertainty
around levels of client assets, which drive advisory revenue, the
March 2020 Federal Reserve Board cut to the fed funds rate to its
new range of 0%-0.25% will also have negative implications on
Blucora's profitability. Moody's said that it expects Blucora's
expenses in the tax preparation business segment to increase during
2020, relative to previous periods, as a result of the extension of
the tax season which will cause Blucora to incur added costs around
marketing and support functions.
Moody's said the outlook is negative reflecting challenging
macroeconomic environment which will weigh on the firm's revenue in
the form of lower advisory fees and lower cash sweep revenue earned
on client cash balances. The negative outlook also reflects the
rating agency's expectation for weaker profitability in the tax
preparation business segment in 2020. Should this weakness extend
into the 2021 tax season it would put further negative pressure on
the firm's credit profile.
In April 2020, Blucora announced amendments to its previously
agreed acquisition of HKFS, lowering the purchase price to $100
million from $160 million, introducing an earn-out payment
structure and moving the outside closing date to 1 October 2020
from 15 May. The amendments were credit positive because they
provided Blucora flexibility in funding the transaction while
lowering the purchase price and using an earn-out structure that
reflects the current macroeconomic environment: one shocked by the
coronavirus pandemic and rapidly shifting asset prices that have
created a severe and extensive credit shock across many sectors,
regions and markets.
Moody's noted that even before the additional debt, Blucora's debt
leverage on a Moody's adjusted basis had increased to 4.5x for the
trailing twelve months ended March 31, 2020, as driven by a
reduction in cash sweep revenue in the wealth management segment as
well as a delay in the realization of earnings from the tax
preparation business due to the extension of the IRS filing
deadline from April 15 to July 15. Blucora's proforma
Moody's-adjusted debt leverage will be around 5.5x upon its
acquisition of HKFS. Moody's said that Blucora will retain around
$75 million of the debt balance in cash on its balance sheet, in
addition to its $113 million cash balance. Therefore, net of the
excess cash of $75 million, Blucora's proforma Moody's-adjusted
debt leverage would be close to 4.9x. Moody's said that despite the
recent interest rate cuts, market volatility and extension of the
tax season, Blucora's credit profile will continue to benefit from
its strong cash flow generation and business diversification.
Moody's expects Blucora's leverage to improve following the
conclusion of this year's tax season. Furthermore, the rating
agency does not expect the additional expenses incurred during this
tax season to repeat in the 2021 season, resulting in profitability
and margin levels more in line with Blucora's historical averages,
leading to further reductions in its leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade:
Given the negative outlook, an upgrade of Blucora's ratings is
unlikely in the near future. Factors that could lead to a stable
outlook include:
Successful reduction in leverage as a result of revenue and margin
stabilization in the tax preparation business
Shift towards a more stable user base in the tax business and
revenue growth driven by factors other than pricing
Ongoing evidence of a successful implementation of Blucora's
operational strategies resulting in organic growth, rising
profitability, increased scale and improved margins
Factors that could lead to a downgrade:
A material deterioration in the credit profile as a result of a
prolonged shock to revenue coupled with weakness in expense
management
Evolution in financial policy that increasingly favors shareholders
such as increasing leverage to fund acquisitions or share
repurchases
Increasing competitive pressures on the firm's wealth management or
tax preparation businesses resulting in a deterioration in the
firm's revenue and cash flow generation
A significant deterioration in franchise value, via a security
breach of client accounts, a sustained service outage, or a
significant legal or compliance issue resulting in reputational
damage, loss of customers and litigation costs pressuring profit
margins
The principal methodology used in these ratings was Securities
Industry Service Providers Methodology published in November 2019.
CARDTRONICS INC: Moody's Rates First Lien Term Loan 'Ba2'
---------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to the proposed
first lien term loan issued by Cardtronics, Inc.'s subsidiary
Cardtronics USA, Inc., and downgraded its ratings on the company's
5.50% $300 million senior unsecured notes to B2 from B1. As part of
the rating action, Moody's also affirmed Cardtronics' Ba3 corporate
family rating and Ba3-PD probability of default rating.
Concurrently, Moody's upgraded the company's speculative grade
liquidity rating to SGL-1 from SGL-2. The rating action reflects
the pro forma impact of Cardtronics' planned repayment of existing
revolver borrowings with proceeds from the proposed $500 million
term loan and Moody's expectation that the company will utilize
existing cash on its balance sheet to fund the repayment of the
maturing 1.00% convertible senior notes in December 2020. The
downgrade of the 5.50% notes reflects their reduced recovery
prospects given the increased amount of priority secured debt which
is situated ahead of these securities in the pro forma debt
structure. The outlook is stable.
Affirmations:
Issuer: Cardtronics, Inc.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Upgrades:
Issuer: Cardtronics, Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Downgrades:
Issuer: Cardtronics, Inc.
Senior Unsecured Regular Bond/Debenture, Downgraded to B2 (LGD5)
from B1 (LGD4)
Assignments:
Issuer: Cardtronics USA, Inc.
Senior Secured Bank Credit Facility, Assigned Ba2 (LGD3)
Outlook Actions:
Issuer: Cardtronics USA, Inc.
Outlook, Assigned Stable
Issuer: Cardtronics, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Cardtronics' Ba3 CFR is constrained by the company's pro forma debt
leverage, which stands at just below 3x (Moody's adjusted) as of
March 31, 2020, but is expected to approach 4x by the end of 2020,
as well as the issuer's inherent exposure to limited growth, and
possible contraction, in cash based transactions over the long
term. Ongoing uncertainties related to Cardtronics' ability to
maintain surcharge and interchange rates also negatively impact the
company's credit quality. Additionally, Cardtronics' concentrated
equity ownership of approximately 18% by Hudson Executive Capital
LP and Affiliates adds risk to the company's credit profile with
respect to corporate governance and financial strategy concerns.
The rapid spread of the coronavirus outbreak, deteriorating global
economic outlook, low oil prices, and asset price volatility are
creating a severe and extensive credit shock across many sectors,
regions and markets. The combined credit effects of these
developments are unprecedented. The transaction processing sector
has been negatively affected by the shock given its sensitivity to
consumer demand and sentiment. More specifically, the weaknesses in
Cardtronics' credit profile, including its exposure to cyclicality
and secular changes in consumer spending behavior, have left it
vulnerable to shifts in market sentiment in these unprecedented
operating conditions and the company remains vulnerable to the
outbreak continuing to spread. Additionally, Moody's regards the
coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.
However, Cardtronics' credit profile is supported by the company's
established position as the world's largest independent operator of
automated teller machines, scale benefits associated with its
sizable ATM network footprint, and relatively predictable operating
cash flow derived from transaction-based revenues.
The Ba2 rating for Cardtronics' proposed first lien term loan
(issued by subsidiary Cardtronics USA) reflects the issuer's Ba3-PD
PDR and a loss given default assessment of LGD3. The borrowings
under the term loan and the company's revolving credit facility
(unrated) are secured by a first priority security interest in
substantially all assets of the company. The B2 rating on the 5.50%
senior unsecured notes, which is two notches below the CFR,
reflects the subordination of these bonds to the senior secured
credit facilities.
Cardtronics' SGL-1 Speculative Grade Liquidity assessment is
supported by a pro forma unrestricted cash balance of approximately
$80 million (after factoring in the repayment of the $287.5 million
1.00% convertible senior notes) as well as Moody's expectation that
the company will generate free cash flow of over $100 million in
2020. Additionally, the company's liquidity is bolstered by full
availability under its revolving credit facility due in September
2024 (expected to be downsized to $600 million). While the proposed
term loan is not subject to maintenance covenants, the revolver is
subject to a maximum net leverage ratio and a minimum interest
coverage ratio. Moody's expects the company to remain comfortably
in compliance with these restrictions in the coming year.
The stable outlook reflects Moody's expectation that Cardtronics
will experience a significant contraction in its revenues and
adjusted EBITDA in 2020, before recovering somewhat in 2021.
Moody's expects Cardtronics' debt repayment will limit the
resulting increase in debt leverage during this period to just
below 4x.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded if Cardtronics demonstrates consistent
growth in free cash flow driven by organic revenue expansion and is
able to reduce debt to EBITDA leverage below 2.5x (Moody's
adjusted).
The rating could be downgraded if Cardtronics experiences
meaningful revenue and EBITDA contraction or adopts aggressive
financial strategies causing total debt to EBITDA (Moody's
adjusted) to rise above 4x on a sustained basis.
Cardtronics, a subsidiary of Cardtronics plc, provides consumer
financial services through its network of ATMs and multi-function
financial services kiosks. Cardtronics' customers primarily include
large and small retailers, operators of facilities such as shopping
malls and airports, and financial institutions. Moody's expects
Cardtronics to generate nearly $1.1 billion in sales in 2020.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
CENTRIC BRANDS: Hires Prime Clerk LLC as Administrative Advisor
---------------------------------------------------------------
Centric Brands Inc. and its affiliated debtors seek approval from
the United States Bankruptcy Court for the Southern District of New
York to hire Prime Clerk LLC as its administrative advisor.
Centric Brands requires Prime Clerk to:
(a) assist with, among other things, solicitation, balloting
and tabulation of votes, and prepare any related reports, as
required in support of confirmation of a chapter 11 plan, and in
connection with such services, process requests for documents from
parties-in-interest, including, if applicable, brokerage firms,
bank back-offices and institutional holders;
(b) prepare an official ballot certification and, if
necessary, testify in support of the ballot tabulation results;
(c) assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
(d) provide a confidential data room, if requested;
(e) manage and coordinate any distributions pursuant to a
chapter 11 plan; and
(f) provide such other administrative services described in
the Engagement Agreement as may be requested from time to time by
the Debtors or the Court.
The firm will be paid at these rates:
Claim/Noticing Rates:
Analyst $35 - $55
Technology Consultant $35 - $95
Consultant/Senior Consultant $70 - $170
Director $175 - $195
COO/Executive VP No charge
Solicitation Consultant $195
Director of Solicitation $215
Prime Clerk is a "disinterested person" within the meaning of
section 101(14) of the Bankruptcy Code, as required by section
327(a) of the Bankruptcy Code, and does not hold or represent any
interest materially adverse to the Debtors' estates in connection
with any matter on which it would be employed, as disclosed in the
court filings.
The firm can be reached through:
Benjamin J. Steele
Prime Clerk LLC
One Grand Central Place
60 East 42nd Street, Suite 1440
New York, New York 10165
About Centric Brands
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.
The 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.
CENTRIC BRANDS: Seeks to Hire KPMG LLP as Tax Consultant
--------------------------------------------------------
Centric Brands Inc. and its affiliated debtors seek approval from
the United States Bankruptcy Court for the Southern District of New
York to hire KPMG LLP to provide tax compliance, tax provision and
tax consulting services.
Services KPMG will perform are:
(a) Tax Compliance Services
i. prepare federal and state income tax returns and
supporting schedules for the 2019, 2020 and 2021 tax years;
ii. perform the tasks related to Public Law No. 115-97,
originally known as the Tax Cuts and Jobs Act (referred to as
"TCJA");
iii. prepare tax returns for any state or local
jurisdictions and additional majority owned legal entities not
identified in this engagement letter including any newly controlled
legal entities formed or acquired by the Debtors during the
engagement period, and that the Debtors approve in writing;
iv. automatically prepare, for the Debtors' filing, a
request for extension of time if KPMG has not received all of the
requested information by Feb. 15, 2021 and 2022 to file the
applicable return(s);
v. automatically file (either electronically or by paper)
the extensions for which there are no tax payments due;
vi. perform preliminary engagement planning activities
related to the tax returns specified above for the immediately
succeeding tax year;
vii. meet with Debtors' independent auditor during the
course of the engagement to discuss KPMG's services and any
preliminary findings, if necessary and appropriate;
viii. provide additional services regarding preparation of
tax returns for any state or local jurisdiction, information
returns (i.e. Form 5471, Form 5472, Form 8858, etc.) and additional
legal entities not identified in Appendix II of the engagement
letter dated August 7, 2019;
ix. assist with quarterly estimated payments due to federal
and/or state income tax purposes by providing review of
calculations and preparing vouchers to be filed; and
x. provide assistance related to analyzing the
implications of U.S. Tax Reform.
(b) Tax Provision Services
i. assist in gathering necessary year-end tax and
financial information and schedules;
ii. assist in the identification and computation of
temporary and permanent differences;
iii. compute a preliminary income tax provision for
management's review and approval;
iv. prepare income tax related balance sheet accounts and
footnote disclosures for management's review and approval;
v. assist the Debtors in their efforts to work with its
independent auditors to draft income tax provision work papers;
and
vi. assist the Debtors in reviewing the quarterly income
tax provisions for the periods ending March 31, June 30 and Sep.
30, for the 2020, 2021 and 2022 years (01, 02 and 03) following an
ASC 740-270 interim reporting approach.
(c) Tax Consulting Services
i. analyse any Section 382 issues, including a sensitivity
analysis to reflect the Section 382 impact of the proposed and/or
hypothetical equity transactions pursuant to the
Restructuring;
ii. analyse "net unrealized built-in gains and losses" and
Notice 2003-65 as applied to the ownership change, if any,
resulting from or in connection with the Restructuring;
iii. analyse tax attributes including net operating losses,
tax basis in assets, and tax basis in stock of subsidiaries;
iv. analyse cancellation of debt (COD) income - the
application of Section 108 relating to the restructuring of
non-intercompany debt and the completed capitalization/settlement
of intercompany debt;
v. analyse the tax implications of any internal
reorganizations and proposal of restructuring alternatives;
vi. provide cash tax modeling;
vii. analyse the tax implications of any dispositions of
assets;
viii. analyse potential bad debt and worthless stock
deductions;
ix. analyse any proof of claims from tax authorities;
x. analyse the tax treatment of transaction/restructuring
related costs;
xi. provide tax consulting services with respect to
computing and documenting the Employee Retention Credit (ERC)
pursuant to section 2301 of the Coronavirus Aid, Relief, and
Economic Security (CARES) Act as more fully described in Appendix I
of the engagement letter dated April 11, 2020; and
xii. perform general tax consulting services, including:
(1) Routine tax advice concerning the federal, state,
local, and foreign tax matters related to the preparation of the
prior year's federal, state, local, and foreign tax returns;
(2) Routine tax advice concerning the federal, state,
local, and foreign tax matters related to the computation of the
Debtors' taxable income for the current year or future years; and
(3) Routine dealings with a federal, state, local, or
foreign tax authority (e.g., responding to automated interest and
penalty notices, preparing tax computations based upon the
taxpayer's concession or settlement of an issue with the relevant
tax authority).
In addition to the foregoing, KPMG will provide such other
consulting, advice, research, planning, and analysis regarding tax
compliance, tax provision and tax consulting services as may be
necessary, desirable or requested from time to time.
KPMG will charge these discounted hourly rates:
Partners/Principals/
Managing Directors $765 - $985
Senior Managers $690 - $750
Managers $572 - $730
Senior Associates $416 - $640
Associates $312 - $380
Paraprofessionals $182 - $295
Howard Steinberg, a partner at KPMG, assured the court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
KPMG LLP can be reached at:
Howard Steinberg
KPMG LLP
811 Main Street
Houston, TX 77002
Tel: +1 713 319 2000
Fax: +1 713 319 2041
About Centric Brands
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.
The 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.
CENTRIC BRANDS: Seeks to Hire Ropes & Gray as Legal Counsel
-----------------------------------------------------------
Centric Brands Inc. and its affiliated debtors seek approval from
the United States Bankruptcy Court for the Southern District of New
York to hire Ropes & Gray LLP as their legal counsel.
Services Ropes & Gray will render are:
a. advising the Debtors with respect to their powers and
duties as debtors in possession in the continued management and
operation of their business and properties;
b. advising and consulting on the conduct of these chapter 11
cases, including all of the legal and administrative requirements
of operating in chapter 11;
c. advising the Debtors regarding related tax matters;
d. taking any necessary action on behalf of the Debtors to
negotiate, draft, and obtain approval of a chapter 11 plan and all
documents related thereto;
e. representing the Debtors in connection with obtaining
authority to use cash collateral and postpetition financing;
f. attending meetings and negotiating with representatives of
creditors and other parties in interest;
g. taking all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors' interests in negotiations concerning
litigations in which the Debtors are involved, including objections
to the claims filed against the Debtors' estates;
h. preparing pleadings in connection with these chapter 11
cases, including motions, applications, answers, orders, reports
and papers necessary or otherwise beneficial to the administration
of the Debtors' estates;
i. appearing before the Court and any appellate courts to
represent the interests of the Debtors' estates; and
j. performing all other necessary legal services for the
Debtors in connection with the prosecution of these chapter 11
cases, including: (i) analyzing the Debtors' leases and contracts
and the assumption and assignment or rejection thereof; (ii)
analyzing the validity of liens against the Debtors; and (iii)
advising the Debtors on corporate and litigation matters.
The Firm will be paid at these hourly rates:
Partner $1,200 to $1,880
Counsel $845 to $1,320
Associate $610 to $1,100
Paralegals $220 to $510
Gregg M. Galardi, Esq., a partner at the Firm, assures the Court
that the Firm is a disinterested person within the meaning of
Bankruptcy Code section 101(14).
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Galardi disclosed that the firm has not agreed to a variation of
its standard or customary billing arrangements for its employment
with the Debtors, and that no professional at the firm has varied
his rate based on the geographic location of the Debtors'
bankruptcy cases.
The attorney also disclosed that Ropes & Gray was engaged as the
Debtors' restructuring counsel on April 1, 2020. Since entering
into the Engagement Agreement, Ropes & Gray has charged the Debtors
its standard rates in effect at the time, which were: $1,200 –
$1,880 for partners; $1,005 – $1,155 for counsel; $610 – $1,100
for associates; and $250 – $510 for paraprofessionals. There have
been no adjustments to these rates since Ropes & Gray was engaged
on April 1, 2020.
Mr. Galardi also disclosed that the Debtors' approved a budget and
staffing plan for Ropes & Gray professionals. That budget and
staffing plan covers the period through the week ending July 31,
2020.
The Firm can be reached at:
Gregg M. Galardi, Esq.
ROPES & GRAY LLP
1211 Avenue of the Americas
New York, NY 10036-8704
Tel: (212) 596-9000
Fax: (212) 596-9090
E-mail: gregg.galardi@ropesgray.com
About Centric Brands
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.
The 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.
CEQUENCE ENERGY: Gets CCAA Stay Extension Until Sept. 8
-------------------------------------------------------
Cequence Energy Ltd. (TSX: CQE) has commenced a strategic process
to identify and pursue potential strategic options and alternatives
to maximize the value for its stakeholders, which will be carried
out under the Companies' Creditors Arrangement Act.
The Company has obtained an order form the Court of Queen's Bench
of Alberta extending the stay of proceedings previously granted by
the Court on May 29, 2020 as part of Cequence's application under
the Companies’ Creditors Arrangement Act. The stay of
proceedings has been extended to Sept. 8, 2020.
The extension of the stay period will allow the Company to pursue
potential strategic options and alternatives to maximize the value
for its stakeholders. The Company intends to work toward
developing a plan of compromise or arrangement under the CCAA to be
voted on by its creditors.
In addition to the Court order extending the stay period, the
Company also sought and obtained an increase to certain
Court-ordered priority charges against the Company’s assets.
Materials publicly filed in the Company’s CCAA proceedings,
including copies of the initial order of the Court granted on May
29, 2020, are available on the website of the court-appointed
monitor, Ernst & Young Inc., at http://www.ey.com/ca/cequence.
During the CCAA proceedings, management of the Company will remain
responsible for managing day-to-day operations under the general
oversight of the monitor.
In connection with the Company's CCAA proceedings, the Toronto
Stock Exchange (“TSX”) has advised Cequence that it has
determined to delist the Company's common shares from the TSX
effective as of the close of markets on July 8, 2020. Trading in
Cequence's common shares on the TSX will remain suspended until
such delisting is effective.
The monitor can be reached at:
Ernst & Young Inc.
Attn: Neil Narfason
215 2nd St SW, Suite 2200
Calgary AB T2P 1M4
Tel: 403-206-5067
Email: Neil.narfason@ca.ey.com
Counsel for the Company:
Norton Rose Fulbright Canada LLP
Attn: Howard A. Gorman
Aaron Stephenson
Meghan L. Parker
400 3rd Avenue SW, Suite 3700
Calgary, Alberta T2P 4H2
Tel: +1 403-267-8222
Fax: +1 403-264-5973
Email: howard.gorman@nortonrosefulbright.com
meghan.parker@nortonrosefulbright.com
aaron.stephenson@nortonrosefulbright.com
Cequence is -- http://www.cequence-energy.com/-- engaged in the
exploration for and the development of oil and natural gas
reserves. The Company's primary focus is the development of its
Simonette asset in the Alberta Deep Basin with other non-core
assets in Northeast British Columbia and the Peace River Arch of
Alberta.
CFRA HOLDINGS: June 24 of All of Substantially All Assets Set
-------------------------------------------------------------
Judge Catherine Peel McEwen of the U.S. Bankruptcy Court for the
Middle District of Florida authorized the bidding procedures of
CFRA Holdings, LLC and its affiliates in connection with the
auction sale of substantially all assets.
Entry of the Bidding Procedures Order is without prejudice to any
and all rights of Smartvision Construction, LLC to assert,
supplement and/or amend the objections raised in its objection in
connection with any Sale Hearing.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: June 22, 2020 at 2:00 p.m. (ET)
b. Initial Bid: In the event that there is a Stalking Horse
Purchaser, and the Qualifying Bidder wishes to bid on the same
Assets that are included in the Stalking Horse Agreement, the
aggregate consideration proposed by the Qualifying Bidder must
equal or exceed the sum of the amount of (A) the purchase price
under the Stalking Horse Agreement, plus (B) any break-up fee,
expense reimbursement, or other bid protection provided under the
Stalking Horse Agreement, plus (C) $100,000.
c. Deposit: A good faith cash deposit in an amount equal to
the greater of (a) $25,000 or (b) 10% of the total consideration
provided under the proposed Transaction Agreement
d. Auction: The Auction will be held virtually, as determined
by Gordon Brothers and the Debtors, in consultation with the
Consultation Parties, on June 24, 2020 at 10:00 a.m. (ET).
e. Bid Increments: $100,000
f. Sale Hearing: June 26, 2020 at 9:30 a.m. (ET)
g. Sale Objection Deadline: June 23, 2020 at 4:00 p.m. (ET)
h. The sale will be free and clear of liens, claims, interests
and encumbrances.
The Assumption and Assignment Procedures are approved. Within
three business days after entry of the Order, the Debtors will file
with the Court and serve on each counterparty the Assumption
Notice. The Contract Objection Deadline is 4:00 p.m. (ET) on June
23, 2020.
Within three business days of entry of the Bidding Procedures
Order, the Debtors will serve the Sale Notice upon the Sale Notice
Parties.
The Order will be effective immediately upon entry, and any stay of
orders provided for in Bankruptcy Rules 6004(h) or 6006(d) or any
other provision of the Bankruptcy Code, the Bankruptcy Rules or the
Local Bankruptcy Rules is expressly waived. The Debtors are not
subject to any stay in the implementation, enforcement or
realization of the relief granted in the Order, and may, in their
sole discretion and without further delay, take any action and
perform any act authorized or approved under the Order.
A copy of the Bidding Procedures is available at
https://tinyurl.com/ycvaturl from PacerMonitor.com free of charge.
About CFRA Holdings
CFRA Holdings, LLC, formerly known as CFRA Restaurant Holdings
Inc., and its debtor affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-03608) on
May 6, 2020. The petitions were signed by Tim J. Pruban, the
Debtors' chief restructuring officer. At the time of the filing,
the Debtors disclosed estimated assets of $10 million to $50
million and estimated liabilities of the same range. The Debtors
tapped Saul Ewing Arnstein & Lehr LLP as their counsel.
CHINOS HOLDINGS: Committee Hires Province as Financial Advisor
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed to the
Chapter 11 cases of Chinos Holdings, Inc. and its debtor affiliates
seeks approval from the U.S. Bankruptcy Court for the Eastern
District of Virginia to employ Province, Inc. as its financial
advisor in connection with the Debtors' Chapter 11 cases.
Province will provide consulting and advisory services to the
Committee in the course of the Debtors' Chapter 11 cases, including
but not limited to the following:
(a) become familiar with and analyze the Debtors' DIP budget,
weekly cash flow performance, assets and liabilities, and overall
financial condition;
(b) review financial and operational information furnished by
the Debtors to the Committee;
(c) scrutinize the economic terms of various agreements,
including, but not limited to, the Debtors' first day motions and
various professional retentions;
(d) analyze the Debtors' proposed business plans and develop
alternative scenarios, if necessary;
(e) assess the Debtors' various pleadings and proposed
treatment of unsecured creditor claims therefrom;
(f) prepare, or review as applicable, avoidance action and
claim analyses;
(g) assist the Committee in reviewing the Debtors' financial
reports, including, but not limited to, SOFAs, schedules, cash
budgets, and Monthly Operating Reports;
(h) advise the Committee on the current state of the Debtors'
chapter 11 cases;
(i) represent the Committee in negotiations with the Debtors
and third parties, as necessary;
(j) if necessary, participate as a witness in hearings before
the Bankruptcy Court with respect to matters upon which Province
has provided advice; and
(k) any other activities as are approved by the Committee, the
Committee's counsel, and as agreed to by Province.
The firm shall use reasonable efforts to avoid any duplication of
services provided by any of the Committee's other retained
professionals in these cases.
Province is not owed any amounts with respect to prepetition fees
and expenses.
The current standard hourly rates of the firm's professionals and
paralegals expected to be assigned to this matter are as follows:
Principal $880 - $975
Managing Director $670 - $790
Senior Director $600 - $670
Director $550 - $600
Vice President $510 - $550
Senior Associate $430 - $510
Associate $360 - $430
Analyst $240 - $360
Paraprofessionals $185
In addition, Province will bill for all out-of-pocket expenses
reasonably incurred by the firm in connection with the matters
contemplated by this agreement.
The Committee understands that Province intends to apply to the
Court for allowances of compensation and reimbursement of expenses
for financial advisory support services in accordance with the
applicable provisions of the Bankruptcy Code, the Bankruptcy Rules,
the Local Bankruptcy Rules, orders of this Court, and the
Guidelines for Reviewing Applications for Compensation and
Reimbursement of Expenses Filed Under 11 U.S.C. Sec. 330 by
Attorneys in Larger Chapter 11 Cases Effective as of November 1,
2013 (the U.S. Trustee Guidelines).
Sanjuro Kietlinski, a managing director of Province, Inc.,
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:
Sanjuro Kietlinski
PROVINCE, INC.
2360 Corporate Circle, Suite 330
Henderson, NV 89074
Telephone: (702) 685-5555
E-mail: skietlinski@provincefirm.com
About Chinos Holdings
Chinos Holdings, Inc., designs apparels, offering clothing for men,
women and children, as well as accessories. Chinos Holdings serves
customers worldwide.
Chinos Holdings, Inc. and its affiliates, including J.Crew Group,
Inc., sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Va. Lead Case No. 20-32181) on May 4, 2020.
At the time of the filing, the Debtors disclosed assets of between
$1 billion and $10 billion and liabilities of the same range.
Judge Keith L. Phillips oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy
counsel; Hunton Andrews Kurth, LLP as local counsel; Lazard Freres
& Co. LLC; Alixpartners, LLP as financial advisor; Hilco Real
Estate, LLC as real estate advisor; KPMG LLP as tax consultant; and
Omni Agent Solutions, LLC as claims, noticing and solicitation
agent and as administrative advisor.
The Official Committee of Unsecured Creditors appointed to the
Debtors' Chapter 11 cases tapped Pachulski Stang Ziehl & Jones LLP
as its counsel; Hirschler Fleischer, P.C. as local counsel; and
Province, Inc. as financial advisor.
CHINOS HOLDINGS: Committee Seeks to Hire Pachulski Stang as Counsel
-------------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed to the
Chapter 11 cases of Chinos Holdings, Inc. and its debtor affiliates
seeks approval from the U.S. Bankruptcy Court for the Eastern
District of Virginia to employ Pachulski Stang Ziehl & Jones LLP
(PSZJ) as its counsel.
PSZJ will render these professional services to the Committee in
connection with the Debtors' Chapter 11 cases:
(a) assist, advise, and represent the Committee in its
consultations with the Debtors regarding the administration of
these cases;
(b) assist, advise, and represent the Committee with respect
to the Debtors' retention of professionals and advisors with
respect to the Debtors' business and these cases;
(c) assist, advise, and represent the Committee in analyzing
the Debtors' assets and liabilities, investigating the extend and
validity of liens and participating in and reviewing any proposed
asset sales, any asset dispositions, financing arrangements and
cash collateral stipulations or proceedings;
(d) assist, advise, and represent the Committee in any manner
relevant to review and determine the Debtors' rights and
obligations under leases and other executor contracts;
(e) assist, advise, and represent the Committee in
investigating the acts, conduct, assets, liabilities and financial
condition of the Debtors, the Debtors' operations and the
desirability of the continuance of any portion of those operations,
and any other matters relevant to the cases or to the formulation
of a plan;
(f) assist, advise, and represent the Committee in connection
with any sale of the Debtors' assets;
(g) assist, advise, and represent the Committee in its
participation in the negotiation, formulation, or objection to any
plan of liquidation or reorganization;
(h) assist, advise, and represent the Committee in
understanding its powers and its duties under the Bankruptcy Code
and the Bankruptcy Rules and in performing other services as are in
the interests of those represented by the Committee;
(i) assist, advise, and represent the Committee in the
evaluation of claims and on any litigation matters, including
avoidance actions; and
(j) provide such other services to the Committee as may be
necessary in these cases.
The current standard hourly rates for professionals and paralegals
presently designated to represent the Committee are:
Partners $750 - $1,495
Counsel $675 - $1,125
Associates $625 - $725
Paralegals $395 - $425
The firm has received no retainer from the Debtors or the
Committee, nor has the firm received any payment or promise of
payment, during the one-year period prior to the petition date on
this engagement.
The firm provides the following responses to the questions set
forth in Part D of the Appendix B Guidelines for Reviewing
Applications for Compensation and Reimbursement of Expenses Filed
Under United States Code by Attorneys in Larger Chapter 11 Cases:
Question: Did you agree to any variations from, or alternatives to,
your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this engagement
vary their rate based on the geographic location of the bankruptcy
case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: Not applicable.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Response: As proposed Committee counsel, the budget set forth for
Committee professionals is established by the Debtors' DIP
financing budget as set forth in the Motion of Debtors for Entry of
Orders (I) Authorizing the Debtors to Obtain Postpetition
Financing, (II) Authorizing the Debtors to Use Cash Collateral,
(III) Granting Liens and Providing Superpriority Administrative
Expense Claims, (IV) Granting Adequate Protection to Prepetition
Secured Parties, (V) Modifying the Automatic Stay, (VI) Scheduling
a Final Hearing, and (VII) Granting Related Relief [Docket No. 31]
(the DIP Motion), as may be approved by this Court, which
negotiations are still in process between the Debtors and the
Committee. PSZJ will agree to the terms of any Order set forth by
this Court in the DIP Motion for Committee professionals.
Bradford J. Sandler, a partner in the firm of Pachulski Stang Ziehl
& Jones LLP, 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:
Bradford J. Sandler, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
780 Third Avenue, 34th Floor
New York, NY 10017-2024
Telephone: (212) 561-7700
Facsimile: (212) 561-7777
E-mail: bsandler@pszjlaw.com
About Chinos Holdings
Chinos Holdings, Inc., designs apparels, offering clothing for men,
women and children, as well as accessories. Chinos Holdings serves
customers worldwide.
Chinos Holdings, Inc. and its affiliates, including J.Crew Group,
Inc., sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Va. Lead Case No. 20-32181) on May 4, 2020.
At the time of the filing, the Debtors disclosed assets of between
$1 billion and $10 billion and liabilities of the same range.
Judge Keith L. Phillips oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy
counsel; Hunton Andrews Kurth, LLP as local counsel; Lazard Freres
& Co. LLC; Alixpartners, LLP as financial advisor; Hilco Real
Estate, LLC as real estate advisor; KPMG LLP as tax consultant; and
Omni Agent Solutions, LLC as claims, noticing and solicitation
agent and as administrative advisor.
The Official Committee of Unsecured Creditors appointed to the
Debtors' Chapter 11 cases tapped Pachulski Stang Ziehl & Jones LLP
as its counsel; Hirschler Fleischer, P.C. as local counsel; and
Province, Inc. as financial advisor.
CHINOS HOLDINGS: Panel Hires Hirschler Fleischer as Local Counsel
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed to the
Chapter 11 cases of Chinos Holdings, Inc. and its debtor affiliates
seeks approval from the U.S. Bankruptcy Court for the Eastern
District of Virginia to employ Hirschler Fleischer, P.C. as its
Virginia local counsel in connection with the Debtors' Chapter 11
cases.
The firm will render these professional services to the Committee:
(a) advise the Committee regarding its rights, powers, and
duties as a committee elected pursuant to Bankruptcy Code Sec.
1103;
(b) advise and consult with the Committee on the conduct of
the cases including all legal and administrative requirements under
Chapter 11;
(c) attend meetings and negotiate with representatives of the
Debtors, the secured and unsecured creditors, equity holders,
employees, and other parties-in-interest;
(d) advise the Committee regarding any contemplated sale of
assets or business combinations including the negotiation of asset
sales, stock purchasers, mergers or joint ventures, formulation and
implementation of bidding procedures, evaluation of competing
offers, drafting of appropriate documents regarding proposed sale
and counseling regarding the closing of such sales;
(e) to the extent necessary, advise the Committee regarding
pre-petition and post-petition financing and cash collateral
arrangements and negotiate documents relating thereto;
(f) advise the Committee on matters relating to the Debtors'
assumption, assumption and assignment, and rejection of executor
contracts and unexpired leases;
(g) advise the Committee on matters relating to the ordinary
course of business including employment matters, tax,
environmental, banking, insurance, securities, corporate, business
operations, contracts, joint ventures, real and personal property,
press and public relations matters, and regulatory matters;
(h) provide advice and counseling on actions to protect and
preserve the Debtors' estates including actions and proceedings by
the Debtors or other designated parties to recover assets, defense
of actions and proceedings brought against the estate, negotiations
regarding all litigation in which the Committee may be involved,
and objections to claims filed against the estate;
(i) prepare and file necessary motions, applications, orders,
reports, and papers;
(j) review all pleadings, financial and other reports filed by
the Debtors in these cases, and advise the Committee about the
potential implications thereof;
(k) review the nature and validity of any liens asserted
against the Debtors' property and advise the Committee concerning
the enforceability of such liens;
(l) investigate the acts, conduct, assets, liability, and
financial condition of the Debtors, the operation of the Debtors'
business and the desirability of the continuance of such business,
and any other matter relevant to the case or to the formulation of
a plan;
(m) commence and conduct any and all litigation necessary or
appropriate to assert rights held by the Committee and/or protect
assets of the Chapter 11 estates;
(n) negotiate and participate in the preparation of the
Debtors' plan(s) of reorganization, related disclosure
statement(s), and other related documents and agreements, and
advise and participate in the confirmation of such plan(s);
(o) attend meetings with third parties and participate in
negotiations with respect to the above matters;
(p) appear before the court, other courts, and the United
States Trustee to protect and represent the interests of the
Committee and the Committee's constituents;
(q) advise the Committee and PSZJ regarding the Local Rules,
local practices, and procedures, as the same may be applicable in
these cases;
(r) meet and coordinate with other counsel and other
professionals representing the Debtors and other
parties-in-interest;
(s) perform all other necessary legal services and provide all
necessary legal advice to the Committee in connection with these
Cases; and
(t) handle such other matters as may be requested by the
Committee and to which Hirschler agrees.
The current standard hourly rates of the firm's professionals and
paralegals expected to be most active in the Chapter 11 cases are
as follows:
Robert S. Westermann, Shareholder $560
Brittany B. Falabella, Associate $345
The firm has not received any promises as to payment or
compensation in connection with the Chapter 11 cases other than in
accordance with the provisions of the Bankruptcy Code, the
Bankruptcy Rules, the Local Rules, and the United States Trustee
Guidelines.
Robert S. Westermann, a shareholder of Hirschler Fleischer, P.C.,
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:
Robert S. Westermann, Esq.
HIRSCHLER FLEISCHER, P.C.
The Edgeworth Building
2100 East Cary Street
Richmond, VA 23223
P.O. Box 500
Richmond, VA 23218-0500
Telephone: (804) 771-9500
Facsimile: (804) 644-0957
E-mail: rwestermann@hf-law.com
About Chinos Holdings
Chinos Holdings, Inc., designs apparels, offering clothing for men,
women and children, as well as accessories. Chinos Holdings serves
customers worldwide.
Chinos Holdings, Inc. and its affiliates, including J.Crew Group,
Inc., sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Va. Lead Case No. 20-32181) on May 4, 2020.
At the time of the filing, the Debtors disclosed assets of between
$1 billion and $10 billion and liabilities of the same range.
Judge Keith L. Phillips oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy
counsel; Hunton Andrews Kurth, LLP as local counsel; Lazard Freres
& Co. LLC; Alixpartners, LLP as financial advisor; Hilco Real
Estate, LLC as real estate advisor; KPMG LLP as tax consultant; and
Omni Agent Solutions, LLC as claims, noticing and solicitation
agent and as administrative advisor.
The Official Committee of Unsecured Creditors appointed to the
Debtors' Chapter 11 cases tapped Pachulski Stang Ziehl & Jones LLP
as its counsel; Hirschler Fleischer, P.C. as local counsel; and
Province, Inc. as financial advisor.
CHISHOLM OIL: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Chisholm Oil and Gas Operating, LLC
1 West Street
Suite 1700
Tulsa, Oklahoma 74103
Business Description: Chisholm is an exploration and
production company focused on acquiring,
developing, and producing oil and
natural gas assets in the Anarkado Basin
in Oklahoma in an area commonly referred
to as the Sooner Trend Anadarko Basin
Canadian and Kingfisher County (the
"STACK").
Chapter 11 Petition Date: June 17, 2020
Court: United States Bankruptcy Court
District of Delaware
Five affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Chisholm Oil and Gas Operating, LLC (Lead Case) 20-11593
Chisholm Oil and Gas Operating II, LLC 20-11592
Cottonmouth SWD, LLC 20-11594
Chisholm Oil and Gas Nominee, Inc. 20-11595
Chisholm Oil and Gas Management II, LLC 20-11596
Judge: Hon. Brendan Linehan Shannon
Debtors' Counsel: Matthew S. Barr, Esq.
Kelly DiBlasi, Esq.
Lauren Tauro, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
Email: matt.barr@weil.com
kelly.diblasi@weil.com
lauren.tauro@weil.com
Debtors'
Counsel: M. Blake Cleary, Esq.
Jaime Luton Chapman, Esq.
S. Alexander Faris, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Email: mbcleary@ycst.com
jchapman@ycst.com
afaris@ycst.com
Debtors'
Investment
Banker: EVERCORE GROUP LLC
55 East 52nd Street
New York, NY 10055
Debtors'
Financial
Advisor: ALVAREZ & MARSAL NORTH AMERICA, LLC
600 Madison Avenue, 8th Floor
New York, NY 10022
Debtors'
Claims,
Notice &
Solicitation
Agent: OMNI AGENT SOLUTIONS
5955 De Soto Avenue, Suite 100
Woodland Hills, CA 91367
https://is.gd/onmuS9
Estimated Assets
(on a consolidated basis): $1 billion to $10 billion
Estimated Liabilities
(on a consolidated basis): $500 million to $1 billion
The petitions were signed by Michael Rigg, chief financial
officer.
A copy of Chisholm Oil and Gas Operating's petition is available
for free at PacerMonitor.com at:
https://is.gd/UapiZi
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Unit Drilling Company Trade Payable $2,905,500
8200 South Unit Drive
Tulsa, OK 74132
David T. Merrill
Tel: (918) 493-7700
Fax: (918) 493-7711
Email: david.merrill@unitcorp.com
2. Halliburton Energy Services In Trade Payable $2,553,281
300 N Sam Houston Pkwy E
Houston, TX 77032
Jeff Miller
Tel: (281) 871-4000
Fax: (281) 871-4621
Email: jeff.miller@halliburton.com
3. Legacy Drilling LLC Trade Payable $2,504,112
203 East 80th Street
Stillwater, OK 74074
Andrea Davidson
Tel: (405) 714-0848
Fax: (405) 707-7280
4. Alta Mesa Services, LP Trade Payable $1,496,233
15021 Katy Freeway
4th Floor
Houston, TX 77094
Mark Castiglione
Tel: (281) 530-0991
Email: mcastligione@altamesa.net
5. Reliance Oilfield Services, LLC Trade Payable $629,500
Two West 2nd Street
Suite 1205
Tulsa, OK 74103
Heath Casey
Tel: (918) 392-9000
Email: health.casey@relianceofs.com
6. Mesa Natural Gas Trade Payable $599,243
Solutions, LLC
5151 Reserve Drive
Evansville, WY 82636
Scott Gromer
Tel: (307) 472-6372
Email: scott@247mesa.com
7. Heartland Compression Trade Payable $523,428
Services
26894 Hwy. 50
Mooreland, OK 73852
Mason Henderson
Tel: (580) 334-2539
Email: mason.henderson@heartlandcompression.com
8. Ovintiv Mid-Continent Inc Trade Payable $514,325
4 Waterway Square Place
Suite 100
The Woodlands, TX 77380
Doug Suttles
Tel: (281) 210-5100
Fax: (281) 210-5101
9. Victoria W & C Ronald Lewis JT Royalty $497,509
1710 Plaza Cir
Windsor Heights, IA 50322
Tel: (515) 278-4202
Email: victoria.lewis3@yahoo.com
10. Smart Chemical Services, LP Trade Payable $440,579
3220 Church Street
Amarillo, TX 79109
Lloyd Brown
Tel:(806) 654-5082
Email: lloyd.brown@smartchemical.com
11. BSREP II Houston Office Trade Payable $429,562
1200 Smith Street, Suite 1200
Houston, TX 77002
Travis Overall
Tel: (713) 336-2117
Email: travis.overall@brookfieldproperties.com
12. Chaparral Energy LLC Trade Payable $405,087
701 Cedar Lake Blvd
Oklahoma City, OK 73114
Chuck Duginski
Tel: (405) 234-9000
Fax: (405) 478-8770
Email: chuck.duginski@chaparralenergy.com
13. Marsau Enterprises Inc. Trade Payable $377,682
1209 N. 30th
Enid, OK 73701
Marli Esau
Tel: (580) 233-3910
Fax: (580) 233-5063
Email: marlinesau@hotmail.com
14. Revolution II WI Holding Trade Payable $349,800
14301 Caliber Drive Suite 110
Oklahoma City, OK 73134
Scott Van Sickle
Email: scottv@revolutionresources.com
15. Dyer Coatney Schroeder Trade Payable $336,831
Attorneys
16328 Muirfield PL
Edmond, OK 73013
Andrew Schroeder
Tel: (405) 753-1195
Fax: (405) 753-1196
Email: aschroeder@dcslawfirm.com
16. Michele Knotts Severance $325,000
17. Milroc Distribution LLC Trade Payable $278,955
4700 Western Ave
Woodward, OK 73801
David Rolens
Tel: (580) 256-0061
Email: rolens@milrocdistribution.com
18. Great Plains Gas Trade Payable $276,877
Compression
210 E. 1st St.
Hugoton, KS 67951
Jim Wilson
Tel: (620) 544-4191
Fax: (620) 544-4141
19. USA Compression Partners, LLC Trade Payable $252,245
111 Congress Avenue
Suite 2400
Austin, TX 78701
Eric Long
Tel: (214) 378-8651
Fax: (512) 473-2616
Email: elong@usacompression.com
20. Crawley Petroleum Trade Payable $234,849
Corporation
105 N Hudson Ave #800
Oklahoma City, OK 73102
Jason Garner
Tel: (405) 232-9700
Email: jasong@crawleypetroleum.com
21. Cimarron Valley Rentals, LLC Trade Payable $216,214
14946 W Country Rd
74 Crescent, OK 73028
Brian Hopson
Email: cimarronvalleyrentalsllc@hotmail.com
22. Whiting Oil and Gas Corp Trade Payable $200,000
1700 Lincoln, Suite 4700
Denver, CO 80203
23. Quick Pump Service LLC Trade Payable $199,345
7284 South Hwy 81
Hennessey, OK 73742
Abel Moreno
Email: quickpump@pldi.net
24. Rick Caruthers Construction Trade Payable $199,127
821 S Ohio Ave
Cheroke, OK 73728
Rick Caruthers
Email: dozerz1@sbcglobal.net
25. Sean Lisooey Severance $195,833
26. Abadie & Schill PC Trade Payable $182,633
555 Rivergate Lane
Suite B4-180
Durango, CO 81301
Lon Abadie
Tel: (970) 385-4401
Fax: (970) 385-4901
Email: lon@abadieschill.com
27. Thru Tubing Solutions Trade Payable $153,837
225 Haileyville Ave
McAlester, OK 74501
Andy Ferguson
Tel: 405-692-1911
Email: aferguson@thrutubing.com
28. Legacy OFS Construction, Inc. Trade Payable $153,795
1245 Independence St
Lucien, OK 73757-9503
Phillip Sherman
Email: phillipsherman84@yahoo.com
29. Continental Resources, Inc. Trade Payable $147,212
20 N. Broadway
Oklahoma City, OK 73102
Jack Stark
Tel: (405) 234-9253
Email: Jack.stark@clr.com
30. Allamon Tool Company Inc. Trade Payable $142,333
18935 Freeport Dr
Montgomery, TX 77356
Jessica Taylor
Email: jtaylor@allamontool.com
COCRYSTAL PHARMA: Stockholders Elect Five Directors
---------------------------------------------------
The 2020 Annual Meeting of Stockholders of Cocrystal Pharma, Inc.
was held on June 9, 2020, at which the stockholders elected Dr.
Gary Wilcox, Dr. Phillip Frost, Mr. Roger Kornberg, Mr. Steven
Rubin, and Dr. Anthony Japour to the Company's Board of Directors
for a one-year term expiring at the next annual meeting of
stockholders. The stockholders also ratified the appointment of
Weinberg & Company as the Company's independent registered public
accounting firm for the fiscal year ending Dec. 31, 2020.
About Cocrystal Pharma
Headquartered in Creek Parkway Bothell, WA, Cocrystal Pharma, Inc.
-- http://www.cocrystalpharma.com/-- is a clinical stage
biotechnology company discovering and developing novel antiviral
therapeutics that target the replication machinery of influenza
viruses, hepatitis C viruses, noroviruses, and coronaviruses.
Cocrystal Pharma recorded a net loss of $48.17 million for the year
ended Dec. 31, 2019, compared to a net loss of $49.05 million for
the year ended Dec. 31, 2018. As of March 31, 2020, the Company
had $42.84 million in total assets, $2.41 million in total
liabilities, and $40.43 million in total stockholders' equity.
COMPASS BEER: Seeks to Hire Tydings & Rosenberg as Counsel
----------------------------------------------------------
Compass Beer Pump LLC seeks authority from the United States
Bankruptcy Court for the District of Maryland to employ Tydings &
Rosenberg LLP as its attorney.
Compass Beer Pump LLC requires Tydings to:
a. provide the Debtor with legal advice with respect to its
powers and duties as a Debtor-in-Possession and in the operation of
its business and management of its property;
b. assist the Debtor in the preparation of the schedules, the
statement of financial affairs, and any amendments thereto that the
Debtor may be required to file in this case;
c. represent the Debtor at the Subchapter 5 Status Conference
and preparing the public disclosure of actions to effectuate a
plan;
d. represent the Debtor at the section 341 meeting of
creditors;
e. represent the Debtor in defense of proceedings instituted
to reclaim property or to obtain relief from the automatic stay
under Sec. 362(a) of the Bankruptcy Code;
f. prepare any necessary applications, answers, orders,
reports and other pleadings, and appearing on the Debtor's behalf
in proceedings instituted by or against the Debtor;
g. assist with the refinancing/restructuring of the Debtor's
obligations;
h. assist the Debtor in the preparation of a plan of
reorganization;
i. assist the Debtor with all bankruptcy legal work; and
j. perform all of the legal services for the Debtor that may
be necessary or desirable.
Tydings received the sum of $5,000 as half of the agreed upon
retainer to be applied towards future services rendered and
expenses to be incurred, with another $5,000 retainer balance due
in 30 days, as well as the Chapter 11 filing fee in the amount
$1,717.
Tydings is a "disinterested person" as that term is defined in Sec.
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Alan M. Grochal, Esq.
TYDINGS & ROSENBERG LLP
1 E. Pratt Street, Suite 901
Baltimore, MD 21202
Tel: 410-752-9700
E-mail: agrochal@tydingslaw.com
About Compass Beer Pump LLC
Compass Beer Pump LLC is a privately held company that owns and
operates gasoline stations.
Compass Beer Pump LLC filed its voluntary petition under Chapter 11
of the Bankruptcy Code (Bankr. D. Md. Case No. 20-15328) on May 18,
2020. The petition was signed by Rajesh Patel, member. At the time
of filing, the Debtor estimated up to $500,000 in assets and $1
million to $10 million in liabilities. Alan M. Grochal, Esq. at
Tydings & Rosenberg LLP represents the Debtor as counsel.
CRITTENDEN E.M.S: Taps Robertson Law Firm as Legal Counsel
----------------------------------------------------------
Crittenden E.M.S., LLC received approval from the U.S. Bankruptcy
Court for the Eastern District of Arkansas to employ Robertson Law
Firm as its legal counsel.
The firm's services will include:
(a) the preparation of all schedules and other pleadings
required to be filed in Debtor's Chapter 11 case;
(b) negotiation of creditor claims and the filing of
objections when proper;
(c) assisting Debtor in obtaining authorization to use
collateral;
(d) representing Debtor in connection with all motions;
(e) assisting Debtor in identifying assets of its estate,
including potential causes of action;
(f) representing Debtor in connection with the sale of its
assets; and
(g) assisting Debtor in formulating, drafting and presenting a
plan of reorganization and disclosure statement.
Jeannette Robertson, Esq., the firm's attorney who will be handling
the case, will charge an hourly fee of $350. The standard rate
charged by Martha Gilpatrick who may serve as support staff is $15
per hour.
Debtor paid a retainer of $25,000 to the firm.
Ms. Robertson disclosed in court filings that she is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
Robertson Law Firm can be reached at:
Jeannette A. Robertson, Esq.
Robertson Law Firm
408 W. Jefferson, Suite A
Jonesboro, AR 72401
Telephone: (870) 932-6606
About Crittenden E.M.S.
Crittenden E.M.S., LLC, which operates in the health care business,
sought Chapter 11 protection (Bankr. E.D. Ark. Case No. 20-11155)
on March 2, 2020. At the time of the filing, Debtor disclosed
assets of between $1 million and $10 million and liabilities of the
same range. Judge Phyllis M. Jones oversees the case. Debtor is
represented by Robertson Law Firm.
DCP MIDSTREAM: Fitch Rates New Sr. Unsecured Notes 'BB+/RR4'
------------------------------------------------------------
Fitch Ratings has assigned a 'BB+'/'RR4' rating to DCP Midstream
Operating LP's proposed senior unsecured notes. The ratings are on
Rating Watch Negative. The notes are being issued by DCP Midstream
Operating, LP and are fully and unconditionally guaranteed by
parent company, DCP Midstream, LP. The guarantee by DCP will rank
equally in right of payment to all of DCP's existing and future
unsecured senior indebtedness. Fitch expects proceeds from the
offering will be used predominantly to repay borrowings under DCP
Operating's revolving credit facility. Fitch has reviewed the
preliminary documentation for the senior unsecured notes offering;
the assigned rating assumes there will be no material variation
from the draft previously provided.
Fitch currently rates DCP and DCP Midstream Operating, LP's
Long-Term Issuer Default Rating 'BB+' and senior unsecured debt
'BB+'/'RR4'. The ratings are on Rating Watch Negative.
The Rating Watch reflects the concern that DCP will operate with
leverage closer to the negative rating sensitivity of 5.5x beyond
2020 given the entities' direct exposure to commodity prices and
volumetric risk. Fitch recognizes DCP's swift actions in the first
quarter distribution and capex reductions, as well as cost
reduction initiatives, as constructive measures that can help
offset decline in EBITDA and enhance FCF. Fitch intends to resolve
the Watch after monitoring DCP's operational performance and
financial policy in the 2Q20 and updates in 2H20.
KEY RATING DRIVERS
Elevated Leverage: Fitch calculated DCP's LTM leverage (total debt
with equity credit to adjusted EBITDA) to be approximately 5.0x as
of 1Q20, and forecasts DCP's leverage to trend above 5.0x in 2020
and 2021. Fitch recognized that DCP has taken steps to increase its
FCF by reducing distributions by 50% to annualized $1.56/unit and
2020 growth capex by 75%. However, under Fitch's updated price deck
Fitch notes that DCP's G&P business will be directly impacted by
producers' shut-ins or reduced drilling activities, pressuring
EBITDA and leverage for 2020.
Additionally, DCP's hedges on NGLs tend to be short tenor, leaving
DCP exposed to hedge roll over risk, as well as longer-term
exposure to commodity prices. DCP has displayed a pattern of
leaving 20% of gross margins unhedged, so continued commodity price
weakness will pose challenges for DCP's operational performance in
the near term. Fitch notes that DCP has room to hedge a larger
amount of therms, gallons, and barrels. DCP's hedging the minority
of its opportunity is factored into the rating.
Volumetric Risks: DCP's ratings reflect its operations exposure to
volumetric risks associated with the domestic production and demand
for natural gas and NGLs. In 1Q20, DCP's well-head volumes slightly
declined sequentially qoq driven by weakness in the Midcontinent
and East and South Texas regions. Fitch forecasts DCP's G&P volumes
to be weaker throughout the remainder of 2020 and 2021 driven by
slower producer activities in areas such as the DJ basin and
Midcontinent region. For DCP's Logistics & Marketing segment (NGL
and gas pipelines, storage and fractionators), NGL pipeline
throughput was up 13% sequentially qoq in 1Q20, benefitting from
increased volumes on Southern Hills pipeline due to the completion
of the DJ Basin extension. However, Fitch expects total throughput
volume to decline in 2H20 and 2021 given the lower production.
Ownership Support: Fitch rates DCP on a standalone basis, with no
explicit notching from its parent companies' ratings; however,
DCP's ratings reflect that DCP's owners have been and are expected
to remain supportive of the operating and credit profile of DCP.
DCP's ultimate owners of its general partner, Enbridge, Inc. (ENB;
BBB+/Stable) and Phillips 66 (PSX; not rated) have in the past
exhibited a willingness to inject capital, forgo dividends and
generally provide capital support to DCP. This support was most
recently demonstrated by the approval of the March distribution
cut.
Scale and Scope of Operations: DCP's ratings reflect the size and
scale, and diversity of its asset base. DCP's ratings recognize
that it is one of the largest producers of natural gas liquids and
processors of natural gas in the U.S. The partnership has a robust
operating presence in most of the key production regions within the
U.S. The size and breadth of DCP's operations allow it to offer its
customers end-to-end gathering, processing, storage and
transportation solutions, giving it a competitive advantage within
the regions where they have significant scale. Additionally, the
partnership's large asset base provides a platform for growth
opportunities across its footprint in areas such as the Permian
Basin.
DERIVATION SUMMARY
DCP's ratings are reflective of its favorable size, scale,
geographic and business line diversity within the natural gas
gathering and processing and the logistics space. The ratings
recognize that DCP has greater exposure to commodity prices than
many of its midstream peers, with 70% of gross margin supported by
fixed-fee contracts. This commodity price exposure has been
partially mitigated in the near term through DCP's use of hedges
for its NGL, natural gas and crude oil price exposure, pushing the
percentage of gross margin, either fixed-fee or hedged,
approximately 80% in 2020. This helps DCP's cash flow stability,
but exposes it to longer-term hedge roll-over and commodity price
risks.
DCP is larger and more geographically diversified than its rated
peers EnLink Midstream LLC (ENLC; BB+/Negative) and Enable
Midstream Partners, LP (ENBL; BBB-/Negative). Fitch expects DCP's
leverage to be similar ENLC's of about 5.0x-5.5x range in the near
term, but higher than ENBL's, which Fitch expects to be in the
4.5x-4.8x range at YE 2020. Further, ENBL and ENLC also have lower
direct commodities price exposure relative to DCP, as more of their
revenue is supported by fixed-fee contracts. ENBL and ENLC each
have greater than 90% of its gross margin supported by fixed-fee
contracts, while DCP has roughly 70%. Fitch intends to resolve the
RWN after monitoring DCP's operational performance and financial
policy over 2Q20 and updates in the second half of 2020.
KEY ASSUMPTIONS
-- Fitch price deck base case WTI oil prices of $32/barrel in
2020, $42 in 2021, and $50 in 2022: and Henry Hub natural gas price
of $1.85/mcf in 2020, $2.45 in 2021, and $2.45 in 2022;
-- Maintenance capital of roughly $60 million-$80 million
annually. Growth spending of approximately $150 annually in 2020;
-- G&P and NGL throughput volumes decline in 2H20 in 2021;
-- Preferred Equity and Junior Subordinated notes receive 50%
equity credit.
-- DCP closes on a note offering in benchmark size.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch may remove the RWN if DCP can execute on its operational
performance and implements financial policies that will create a
visible path to bring leverage (defined as total debt to adjusted
EBITDA) below 5.5x on a sustained basis while distribution coverage
is over 1.1x;
-- The rating could be stabilized if volumes don't fall
significantly and the company executes a disciplined hedging
policy.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Leverage expected above 5.5x on a sustained basis and/or
distribution coverage consistently below 1.1x would likely result
in at least a one-notch downgrade;
-- Volumes fall significantly and the company fails to execute a
disciplined hedging policy;
-- A significant change in the ownership support structure from
GP owners ENB and PSX to the consolidated entity particularly with
regard to the GP position on commodity price exposure, distribution
policies and capital structure at DCP, the operating partnership.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: The proceeds of the proposed offering are
expected to predominantly be used to repay its outstanding
borrowings of the revolving credit facility. As of March 31, 2020,
DCP had total liquidity of $604 million, which includes $586
million undrawn on its $1.4 billion senior unsecured revolving
credit facility after accounting for $14 million in letters of
credit. Cash on the balance sheet was $18 million. Liquidity will
improve after proposed benchmark sized offering closes, if used as
expected to pay down the revolver borrowings. DCP's credit facility
matures in December 2024.
The credit facility has a leverage covenant that requires DCP's
consolidated leverage ratio not to exceed 5.0x for each quarter.
The leverage ratio would be stepped up to 5.5x for three quarters
following any qualified acquisition. Importantly, for covenant
calculation purposes, DCP's preferred equity and junior
subordinated notes are given 100% equity treatment (versus Fitch's
50% equity treatment), so the issuance of preferred equity would
help improve liquidity and leverage where the proceeds are expected
to be used to pay down debt.
DCP's maturities are manageable with $500 million of senior notes
due September 2021, and $700 million of debt due in 2022. The 2022
maturities include $350 million senior unsecured notes, and $350
million outstanding under an account receivable securitization
facility. As of March 31,2020, there is $590 million of accounts
receivables securing the borrowings under this facility.
DCP has a long relationship with the brokers they utilize for their
hedging program. DCP trades all five purity products on the
International Continental Exchange; there are no bi-lateral trades.
There are no special demands for a sizable amount of collateral,
say $100 million. DCP did not have sizable collateral demands
during the last downturn in 2015 either. These factors do not add
to DCP's liquidity risk.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch applies 50% equity credit to DCP's junior subordinated notes
and to its existing preferred equity in Fitch's forecasts. Fitch
typically adjusts master limited partnership EBITDA to exclude
equity interest in earnings from non-consolidated affiliates but
includes cash distributions from non-consolidated affiliates.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
DCP MIDSTREAM: Moody's Rates New $400MM Senior Notes 'Ba2'
----------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to DCP Midstream
Operating LP 's proposed $400 million senior notes offering. DCP
Midstream, LP's existing ratings, including the Ba2 Corporate
Family Rating, Ba2-PD Probability of Default Rating, B1 ratings on
preferred units and SGL-3 Speculative Grade Liquidity rating are
unchanged. Additionally, DCP Midstream Operating's existing Ba2
ratings on the senior unsecured notes and the B1 rating on the
junior subordinated notes are unchanged. The rating outlook is
stable.
DCP will use the net proceeds from the offering for general
partnership purposes, including repaying outstanding borrowings
under its revolving credit facility and capital expenditures.
"DCP's proposed issuance will reduce borrowings outstanding under
its revolving credit facility, which was used to repay $600 million
of notes that matured in March 2020," stated James Wilkins, Moody's
Vice President. "The notes issuance will not increase debt, but
will improve liquidity."
Assignments:
Issuer: DCP Midstream Operating LP
Gtd Senior Unsecured Notes, Assigned Ba2 (LGD3)
RATINGS RATIONALE
The proposed notes, which are senior unsecured obligations of DCP
Midstream Operating LP and guaranteed by its parent, DCP, are rated
at the same level as the Ba2 CFR since the senior unsecured debt
(notes and revolving credit facility) make up the majority of the
capital structure.
DCP has relatively stable cash flow associated with fee-based
businesses, meaningful scale in the US gathering and processing
sector and basin diversification. Cash flow stability benefits from
a combination of fee-based and hedged revenue that account for
about three-quarters of the gross margin and long-term contractual
arrangements with minimum volume commitments or life of lease or
acreage dedications. DCP enjoys economies of scale as a large
processor of natural gas and natural gas liquids with integrated
gathering & processing as well as logistics assets that transport
and process hydrocarbons from the wellhead to markets. It has a
diversified portfolio with critical mass in three key areas -- the
DJ Basin, Midcontinent region and Permian Basin -- that offers
growth opportunities and also helps offset regulatory risk in
Colorado. The rating and business profile are tempered by inherent
commodity price risk as well as MLP model risks with high payouts
and the reliance on debt and equity markets to fund growth. The
elimination of the incentive distribution rights in 2019 did not
materially change the amount of cash flow distributed, but the
company announced in March 2020 a 50% reduction in distributions.
The rating also considers the support that the parents -- Phillips
66 (A3 stable) and Enbridge Inc. (Baa2 positive) -- have
historically provided.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The E&P sector has
been significantly affected by the shock given its sensitivity to
demand and oil prices, and that has affected certain midstream
energy companies that move E&P production volumes. Moody's regards
the coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.
DCP's ratings reflect the breadth and severity of the oil demand
and supply shocks, and the company's resilience to a period of low
oil prices.
Moody's expects the decline in volumes processed through certain
facilities and low commodity prices will depress DCP's profits in
2020, offsetting the impact from new facilities brought online in
2019. DCP brought online processing capacity in the DJ Basin,
expanded its Southern Hills, Front Range and Texas Express NGL
pipelines and saw the completion of the Gulf Coast Express natural
gas pipeline, in which it has a minority ownership stake. Capital
spending by exploration and production companies, which was cut
dramatically in the first half 2020, has reduced production volumes
and only a portion of DCP's facilities enjoy contracts with 100%
minimum volume commitments. Moody's expects that cuts in growth and
sustaining capital spending, distributions to unit holders and
operating costs will allow DCP to maintain credit metrics
supportive of the current ratings and adequate liquidity despite
more challenging operating conditions.
DCP has adequate liquidity as indicated by its SGL-3 Speculative
Grade Liquidity Rating. Its liquidity is supported by funds from
operations and $558 million of availability (net of $14 million of
letters of credit and $828 million of borrowings as of May 1, 2020)
under its $1.4 billion revolving credit facility that matures
December 9, 2024. Availability will grow to approximately $1
billion following the issuance of the $400 million of notes. The
revolver has a maximum leverage (net debt/EBITDA) covenant (5.0x;
debt/EBITDA is adjusted for partial year EBITDA for capital
projects and acquisitions). Moody's expects DCP will remain in
compliance with its financial covenant through mid-2021, although
the cushion under the covenant will decline with weaker earnings.
The company also borrows under an accounts receivable
securitization facility that had $590 million of receivables that
secured $350 million of borrowings as of March 31, 2020. The
actions taken by the company to cut distributions and spending may
allow DCP to generate sufficient free cash flow to repay the $500
million of notes that mature in September 2021.
The stable outlook reflects its expectation that DCP's credit
metrics will remain supportive of its rating, despite the slowdown
in E&P spending in 2020.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if DCP continues to successfully
complete its growth projects, debt to EBITDA remains below 4.5x
(including the debt at DCP Midstream, LLC), and distribution
coverage remains above 1.3x. DCP's CFR could be downgraded if
leverage exceeds 5.5x (including the debt at DCP Midstream, LLC) or
it cannot maintain a distribution coverage ratio greater than 1x.
The principal methodology used in this rating was Midstream Energy
published in December 2018.
DCP Midstream, LP, headquartered in Denver, Colorado, is a publicly
traded, gathering and processing MLP. The DCP Midstream, LP common
LP units are owned by the public (43.5%) and the balance of the
common units and General Partner interest is owned by DCP
Midstream, LLC, a 50%/50% joint venture between Phillips 66 and
Enbridge Inc.
DENNEY ENTERPRISES: Hires Darby Law Practice as Bankruptcy Counsel
------------------------------------------------------------------
Denney Enterprises LLC seeks approval from the U.S. Bankruptcy
Court for the District of Nevada to employ Darby Law Practice, Ltd.
as its bankruptcy counsel.
The firm will provide services as follows:
(a) advise Debtor of its rights, powers and duties in the
continued operation of its business and management of its
properties;
(b) take all necessary actions to protect and preserve
Debtor's estate, including the prosecution of actions on its
behalf, the defense of any actions commenced against Debtor, the
negotiation of disputes in which Debtor is involved, and the
preparation of objections to claims filed against the estate;
(c) prepare legal papers;
(d) attend meetings and negotiations with the Subchapter 5
trustee, representatives of creditors, equity holders, prospective
investors or acquirers and other parties-in-interest;
(e) appear before the bankruptcy court, any appellate courts
and the Office of the United States Trustee; and
(f) pursue approval of confirmation of a plan of
reorganization and approval of the corresponding solicitation
procedures and disclosure statement.
The hourly rates for the firm's professionals range from $400 to
$450. Debtor paid Darby Law Practice a retainer fee in the amount
of $5,217, including the filing fee.
Kevin Darby, Esq., at Darby Law Practice, 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:
Kevin A. Darby, Esq.
Darby Law Practice, Ltd.
4777 Caughlin Parkway
Reno, NV 89519
Telephone: (775) 322-1237
Facsimile: (775) 996-7290
Email: kevin@darbylawpractice.com
About Denney Enterprises
Denney Enterprises, LLC sought Chapter 11 protection (Bankr. D.
Nev. Case No. 20-50549) on June 1, 2020, listing under $1 million
in both assets and liabilities. Judge Bruce T. Beesley oversees
the case. Debtor tapped Darby Law Practice, Ltd. as its bankruptcy
counsel.
DIOCESE OF BUFFALO: Seeks to Hire Connors LLP as Litigation Counsel
-------------------------------------------------------------------
The Diocese of Buffalo, N.Y., seeks approval from the U.S.
Bankruptcy Court for the Western District of New York to employ
Connors LLP as special litigation counsel, effective nunc pro tunc
to the petition date on February 28, 2020.
The Debtor desires to employ and retain Connors LLP to provide
legal services with respect to following matters: (i) Claims
pursuant to the Child Victims Act (CVA); (ii) a certain subpoena
dated September 6, 2018 issued to the Debtor by the Office of the
Attorney General of the State of New York; (iii) a certain subpoena
dated November 15, 2018 issued to the Debtor by the U.S. Attorney
for the Western District of New York; and (iv) to continue to
provide legal assistance to the Diocese with respect to potential
litigation matters.
Randall D. White, Esq., a partner at Connors, 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:
Randall D. White, Esq.
CONNORS, LLP
1000 Liberty Building, 424 Main Street
Buffalo, NY 14202
Telephone: (716) 852-5533
Facsimile: (716) 852-5649
E-mail: rdw@connorsllp.com
About The Diocese of Buffalo, N.Y.
The Diocese of Buffalo, N.Y., is home to nearly 600,000 Catholics
over eight counties in Western New York. The territory of the
diocese is co-extensive with the counties of Erie, Niagara,
Genesee, Orleans, Chautauqua, Wyoming, Cattaraugus and Allegany in
New York State, comprising 161 parishes. There are 144 diocesan
priests and 84 religious priests who reside in the Diocese.
The diocese through its central administrative offices (a) provides
operational support to the Catholic parishes, schools and certain
other Catholic entities that operate within the territory of the
Diocese "OCE"; (b) conducts school operations through which it
provides parish schools with financial and educational support; (c)
provides comprehensive risk management services to the OCEs; (d)
administers a lay pension trust and a priest pension trust for the
benefit of certain employees and priests of the OCEs; and (e)
provides administrative support for St. Joseph Investment Fund,
Inc.
Dealing with sexual abuse claims, the Diocese of Buffalo sought
Chapter 11 protection (Bankr. W.D.N.Y. Case No. 20-10322) on Feb.
28, 2020. The diocese was estimated to have $10 million to $50
million in assets and $50 million to $100 million in liabilities as
of the bankruptcy filing.
The Hon. Carl L. Bucki is the case judge.
Bond, Schoeneck & King, PLLC, led by Stephen A. Donato, Esq., is
the diocese's counsel; Connors LLP is its special litigation
counsel; and Phoenix Management Services, LLC is its financial
advisor. Stretto is the claims agent, maintaining the page
https://case.stretto.com/dioceseofbuffalo/docket.
DOUBLE G BRANDS: Seeks to Hire Carmody MacDonald as Legal Counsel
-----------------------------------------------------------------
Double G Brands, Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Missouri to hire Carmody MacDonald P.C.
as its legal counsel.
The firm's services will include advising Debtor of its powers and
duties under the Bankruptcy Code; analyzing claims of creditors;
assisting Debtor in the sale of its assets or business; and
representing Debtor in negotiations to formulate a Chapter 11 plan
of reorganization.
The firm will be paid at hourly rates as follows:
Partners $295 - $385
Associates $240 - $275
Paralegals/Law Clerks $155 - $195
Carmody MacDonald is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Spencer P. Desai, Esq.
Carmody MacDonald, P.C.
120 S. Central Ave., Suite 1800
Saint Louis, MO 63105
Tel: 314-854-8600
Email: spd@carmodymacdonald.com
About Double G Brands
Double G Brands, Inc., a manufacturer and wholesaler of pork
products, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Mo. Case No. 20-42984) on June 10, 2020. At the time
of the filing, the Debtor had estimated assets of between $500,000
and $1 million and liabilities of between $1 million and $10
million. Carmody MacDonald, P.C. is Debtor's legal counsel.
DPL INC: Moody's Rates $415MM Notes 'Ba1', Outlook Negative
-----------------------------------------------------------
Moody's Investors Service affirmed DPL Inc.'s Ba1 senior unsecured
rating and assigned a Ba1 rating to the company's new issuance of
up to $415 million of notes due 2025. DPL's outlook is negative.
Proceeds from the new notes will be used to redeem all of DPL's
outstanding $380 million 7.25% senior unsecured notes due October
2021 and to pay for related fees and expenses.
RATINGS RATIONALE
"The Ba1 rating factors in management's recent initiatives to
improve DPL's liquidity profile as well as planned $150 million
equity issuance by parent AES later this month to support DPL's
balance sheet and investments" said Nati Martel, VP-Senior Analyst.
"These positive developments are balanced against its expectation
that the credit metrics will remain weak for the rating" added
Martel. Specifically, Moody's expects that DPL's ratio of cash flow
from operations pre-changes in working capital (CFO pre-W/C) to
debt could fall to the 6-7% range by year-end 2020.
The negative outlook reflects the material deterioration in DPL's
consolidated credit metrics, including a ratio of CFO pre-W/C to
debt that fell to 9.6% for the last twelve-month period ended March
2020, compared to 12.3% at year-end 2019. The reduction in cash
flow was due to the $30 million difference between the Rate
Stabilization Charge that Dayton Power & Light Company (DP&L; Baa2
negative) has been collecting since the end of last year and the
$105 million previously collected under the Distribution
Modernization Rider. This surcharge and the Distribution Investment
Rider were terminated end of last year.
In addition, the contraction in power demand amid economic
disruptions caused by the coronavirus pandemic is likely to
maintain pressure on consolidated credit metrics. An increase in
the residential customer electricity demand is not fully offsetting
lower demand from the commercial and industrial (C&I) customers.
The negative outlook reflects the uncertainty around the potential
for recovery in DPL's consolidated financial metrics.
Liquidity
In early June, DPL amended the financial covenant package embedded
in its $125 million bank revolving credit facility which provides
additional financial flexibility. The changes to the package
include the elimination of the 7.0x maximum consolidated debt to
EBITDA covenant and the reduction of the minimum EBITDA over
interest ratio covenant to 1.75x from 2.25x. In addition, DPL will
not permit consolidated EBITDA to be less than $125 million for the
four quarters ending June 30, 2020. This minimum EBITDA requirement
will apply each quarter until June 30, 2022, step up to $130
million for the quarter ending September 30, 2022 and $150 million
thereafter.
The $415 million notes issuance will also improve DPL's maturity
profile. After the redemption of the existing 2021 notes, DPL's
next debt maturity will not be until 2025, when the new notes
mature. Repayment of the 2021 notes also avoided an early September
2021 termination of its committed credit facility, which continues
to expire in June 2023.
DPL's credit quality also factors in the planned $150 million
equity contribution by AES Corporation, (The) (AES; Ba1 stable)
before the end of June, a term included in DPL's amended credit
facility. The equity contribution will help fund DP&L's planned
investments of around $220 million to grow its transmission and
distribution rate base this year. An additional $150 million equity
contribution will depend on the outcome of the smart grid
investment regulatory proceeding. Another relevant pending decision
is whether DP&L's current Electric Security Plan passes the
prospective significantly excessive earnings test, which is a
regulatory requirement.
Assignments:
Issuer: DPL Inc.
Senior Unsecured Regular Bond/Debenture, Assigned Ba1
Affirmations:
Issuer: DPL Inc.
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1
Outlook Actions:
Issuer: DPL Inc.
Outlook, Remains Negative
The rapid spread of the coronavirus outbreak, severe global
economic shock, low oil prices, and asset price volatility 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. The
regulated framework provides a tremendous amount of insulation and
support for utilities. However, a material reduction in customer
demand can affect DPL and DP&L's financial performance. Longer
term, recessionary pressures may increase regulatory resistance to
rate increases, which could also negatively impact credit metrics.
Environmental considerations incorporated into its credit analysis
for DPL and DP&L are primarily related to natural and man-made
hazards as this is a transmission and distribution utility group
without carbon emitting generating assets.
Social risks are primarily related to health and safety as well as
demographic and societal trends. Corporate governance
considerations include financial policy and risk management of its
parent company, AES. Moody's notes that a strong financial position
is an important characteristic for managing environmental and
social risks amid the utility's elevated capital expenditure
program.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade of the ratings
Given the negative outlook and last year's adverse regulatory
developments in Ohio, an upgrade of DPL and DP&L's ratings is
unlikely at this time. Following the aforementioned credit facility
amendment, a stabilization of the outlook is possible if (i)
Moody's sees evidence of a more credit supportive relationship
between the utility and its stakeholders, including PUCO; for
example, if the outcome of pending regulatory proceedings,
including the SEET, is constructive and (ii) DPL is able to record
a consolidated CFO pre-W/C to debt ratio of at least 8%, on a
sustained basis.
Factors that could lead to a downgrade of the ratings
A downgrade of the ratings of DPL and DP&L is possible if the
deterioration in consolidated credit metrics results in a
consolidated CFO pre-W/C to debt ratio below 8%, on a sustained
basis. Downward movement is also possible if the regulatory
environment continues to be less credit supportive, including if
there is an adverse outcome of the SEET-proceedings that negatively
affects consolidated cash flow.
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities published in June 2017.
DURA AUTOMOTIVE: Sale of All North American Assets Approved
-----------------------------------------------------------
Judge Karen B. Owens of the U.S. Bankruptcy Court for the District
of Delaware authorized has entered a supplemental order approving
the North American Stock and Asset Purchase Agreement, and
authorizing the sale by Dura Automotive Systems, LLC and its
affiliates of substantially all their North American assets.
Notwithstanding anything to the contrary in the Bidding Procedures,
the Bidding Procedures Order, the North American Purchase
Agreement, the Assumption and Assignment Procedures, any Assigned
Contracts Schedule or cure notice, the Sale Order or any document
related to the foregoing (other than the Chubb Assumption
Agreement) or any other order of the Court, and subject to (x) the
execution of the Chubb Assumption Agreement by the Debtors, the
North American Purchaser, and Chubb, (y) the satisfaction of the
conditions precedent to effectiveness to the Chubb Assumption
Agreement, and (z) the occurrence of the Closing:
a. Effective as of the Closing, the Debtors are authorized to
and will assume (i) all insurance policies issued by ACE American
Insurance Company, Westchester Fire Insurance Co., Federal
Insurance Co., Great Northern Insurance Co. and any of their
U.S.-based affiliates and successors ("Chubb") to (or providing
coverage to) one or more of the Debtors and/or their predecessors
at any time; and (ii) all programs, collateral and security, claims
servicing and other agreements related thereto ("Chubb Insurance
Contracts");
b. Effective as of the Closing, the Debtors are hereby
authorized to and will (i) assign the Chubb Insurance Contracts to
the North American Purchaser and (ii) enter into an assumption
agreement by and among the Debtors, the North American Purchaser
and Chubb ("Chubb Assumption Agreement") with respect to such
assignment; and
c. Effective upon the assignment of Chubb Insurance Contracts
and as more fully set forth in the Chubb Assumption Agreement:
i. the North American Purchaser assumes and will be
liable for any and all now existing or hereafter arising
obligations, liabilities, duties, terms, provisions, and covenants
of any of the Debtors under the Chubb Insurance Contracts,
including without limitation any and all liability and obligation
to pay or reimburse losses and expenses within the deductibles,
provide collateral and/or security as required by Chubb, pay
premiums to Chubb and pay service fees to any applicable third
party claims administrators;
ii. the rights and interests of the Debtors in the
Insurance Programs will be transferred and assigned to the North
American Purchaser, and all right, title and interest of the
Debtors in the Chubb Insurance Contracts will at the same time
terminate;
iii. the right, if any, to any return premiums, loss
payments, expense adjustments, return of paid loss deposit funds,
and other benefits previously available to the Debtors under the
Chubb Insurance Contracts will belong to the North American
Purchaser and not to the Debtors; and
iv. the North American Purchaser and the Debtors will
remain jointly obligated to cooperate with Chubb in providing
information reasonably necessary for premium audits or claims
handling under the Chubb Insurance Contracts.
d. Effective as of the Closing, the Chubb Insurance Contracts
will be deemed to be the "Transferred Assets" and the "Assigned
Contracts."
e. Except to the extent specifically addressed in this
paragraph or in the Chubb Assumption Agreement (once effective in
accordance with its terms), nothing will amend, modify or otherwise
alter the terms and conditions of the Chubb Insurance Contracts.
The Supplemental Sale Order is entered pursuant to paragraph 25 of
the North American Sale Order.
Notwithstanding the applicability of Bankruptcy Rules 6004(h) and
6006(d), and in accordance with paragraph 25 of the North American
Sale Order, the terms and conditions of the Supplemental Sale Order
will be immediately effective and enforceable upon its entry.
About Dura Automotive Systems
Dura Automotive Systems, LLC, together with its affiliates, is an
independent designer and manufacturer of automotive systems,
including mechatronic systems, exterior systems, and lightweight
structural systems, among others. It is nationally certified in
the United States by the Women's Business Enterprise Council, and
operates 25 facilities in 13 countries throughout North America,
South America, Europe and Asia. Headquartered in Auburn Hills,
Mich., the company -- https://www.duraauto.com/ -- employs
approximately 7,400 individuals.
Dura Automotive Systems sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Tenn. Lead Case No. 19-06741) on Oct.
17, 2019.
At the time of the filing, the Debtors had estimated assets of
between $100 million and $500 million and liabilities of between
$100 million and $500 million.
The cases have been assigned to Judge Randal S. Mashburn.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as bankruptcy counsel; Bradley Arant Boult
Cummings LLP as local counsel; Portage Point Partners, LLC as
restructuring advisor; Jefferies LLC as financial advisor and
Investment banker; and Prime Clerk LLC as claims agent.
ECO-STIM ENERGY: Creditors' Committee Members Disclose Claims
-------------------------------------------------------------
In the Chapter 11 cases of Eco-Stim Energy Solutions, Inc., et al.,
the law firm of Jones Murray & Beatty LLP submitted a verified
statement under Rule 2019 of the Federal Rules of Bankruptcy
Procedure, to disclose that it is representing the Official
Committee of Unsecured Creditors.
On April 30, 2020, the Henry G. Hobbs, the U.S. Trustee for Region
7, appointed the Committee pursuant to 11 U.S.C. § 1102(a)(1).
The Committee consists of the following three members: (i) M.G.
Bryan Equipment Co.; (ii) Spectra Services, LLC, and (iii) Valtek
Industries, Inc.
As of June 16, 2020, the Committee members and their disclosable
economic interests are:
M.G. Bryan Equipment Co.
4441 W. Airport Freeway,
Suite 355 Irving, Texas 75062
* M.G. Bryan Equipment Co. currently has claims against Eco-Stim
Energy Solutions, Inc., which total approximately $881,675.00.
MG's claim is based on Eco Solutions' failure to pay for the
rental of 2250 horsepower hydraulic frac pumps.
Spectra Services, LLC
P.O. Box14856
Odessa, Texas 79768
* Spectra Services, LLC currently has claims against Eco
Solutions, which total approximately $629,703.62. Spectra's
claim is based on Eco Solutions' failure to pay for goods sold
to it which resulted in a state court judgment issued by the
165th Judicial District of Harris County Texas, Cause No. 2018-
72886, on December 6, 2019.
Valtek Industries, Inc.
P.O. Box 70239
Odessa, Texas 79769
* Valtek Industries, Inc. current claims against Eco Solutions,
which total approximately $281,871.32 consisting of the
following:
1. A claim of $2,788.00 pursuant to Invoice No. 24641
(7/25/2018). Valtek's claim is based on Eco Solutions'
failure to pay for produces and services provided.
2. A claim of $83,030.00 pursuant to Invoice No. 24551
(7/18/2018). Valtek's claim is based on Eco Solutions'
failure to pay for produces and services provided.
3. A claim of $4,870.00 pursuant to Invoice No. 23577
(5/2/2018). Valtek's claim is based on Eco Solutions'
Failure to pay for produces and services provided.
4. A claim of $6,581.00 pursuant to Invoice No. 23538
(4/30/2018). Valtek's claim is based on Eco Solutions'
failure to pay for produces and services provided.
5. A claim of $48,216.90 pursuant to Invoice No. 23433
(4/23/2018). Valtek's claim is based on Eco Solutions'
failure to pay for produces and services provided.
6. A claim of $4,869.00 pursuant to Invoice No. 23431
(4/23/2018). Valtek's claim is based on Eco Solutions'
failure to pay for produces and services provided.
7. A claim of $82,511.10 pursuant to Invoice No. 23330
(4/16/2018). Valtek's claim is based on Eco Solutions'
failure to pay for produces and services provided.
8. A claim of $7,749.78 pursuant to Invoice No. 23274
(4/12/2018). Valtek's claim is based on Eco Solutions'
failure to pay for produces and services provided.
9. A claim of $41,255.54 pursuant to Invoice No. 23273
(4/12/2018). Valtek's claim is based on Eco Solutions'
failure to pay for produces and services provided.
Nothing contained in this Verified Statement (or Exhibit A hereto)
should be construed as a limitation upon, or waiver of, any
Committee members' rights to assert, file and/or amend its claim(s)
in accordance with applicable law and any orders entered in these
cases establishing procedures for filing proofs of claims.
The Committee reserves the right to amend or supplement this
Verified Statement in accordance with Rule 2019's requirements.
Proposed Counsel for the Official Committee of Unsecured Creditor
can be reached at:
JONES MURRAY & BEATTY LLP
Christopher Murray, Esq.
Ruth Van Meter, Esq.
Jacqueline Q. Pham, Esq.
4119 Montrose Blvd., Suite 230
Houston, TX 77006
Tel: 832-529-1999
Fax: 832-529-3393
E-mail: chris@jmbllp.com
ruth@jmbllp.com
jackie@jmbllp.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/LrhA95
About Eco-Stim Energy Solutions
Eco-Stim Energy Solutions, Inc., is an oilfield service and
technology company offering pressure pumping and well completion
services and field management technologies to oil and gas producers
drilling in the U.S. and international unconventional shale
markets. In addition to conventional pumping equipment, EcoStim
offers its clients completion techniques that can dramatically
reduce horsepower requirements, emissions and surfacefootprint.
Eco-Stim filed a Chapter 11 petition (Bankr. S.D. Tex. Case Nos.
20-32167 & 20-32169) on April 16, 2020. Judge David R. Jones
oversees the case. The Debtors are represented by Brian A. Kilmer,
Esq., of KILMER CROSBY & QUADROS PLLC.
ELDORADO RESORTS: Moody's Cuts CFR to B2 & Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service downgraded Eldorado Resorts, Inc.'s
Corporate Family Rating to B2 from B1 and Probability of Default
Rating to B2-PD from B1-PD. Moody's assigned a B1 rating to the
company's proposed $3.080 billion senior secured notes and a Caa1
rating to the company's proposed $1.875 billion senior unsecured
notes. The company's Speculative Grade Liquidity rating remains
SGL-1 and the outlook was changed to negative.
Moody's additionally downgraded Caesars Resort Collection, LLC's
Corporate Family Rating to B2 from B1 and Probability of Default
Rating to B2-PD from B1-PD. The company's existing senior secured
revolving credit facility and term loan B were downgraded to B1
from Ba3 and existing senior unsecured notes to Caa1 from B3.
Moody's assigned a B1 rating to the company's proposed $1.47
billion senior secured term loan B and $1.050 billion senior
secured notes. The company's SGL-1 Speculative Grade Liquidity
rating was withdrawn, and the outlook was changed to negative.
The rating actions conclude the reviews for downgrade initiated on
ERI and CRC in June 2019.
Proceeds from the proposed senior secured term loan, senior secured
notes, and senior unsecured notes, along with new ERI shares issued
to CEC, ERI and CEC cash, lease and asset sale proceeds, and ERI
equity raise proceeds, will be used to finance Eldorado Resorts
acquisition of Caesars Entertainment Corp, refinance debt at
Caesars Entertainment Op Co LLC, CRC's sister company, as well as
pay related fees and expenses. The transaction is expected to close
in July 2020 subject to customary closing conditions, including
approval by gaming regulators and the Federal Trade Commission. As
part of the transaction, CEOC will be contributed into CRC, with
CRC as the surviving entity and borrower.
The ratings on Eldorado's existing senior secured credit facilities
and senior unsecured notes remain unchanged and will be withdrawn
upon the closure of the transaction as they will be refinanced. The
Corporate Family Rating and Probability of Default Rating of
Caesars Resort Collection, LLC will be withdrawn upon the closing
of the transaction. All rated debt of Caesars Entertainment Op Co
LLC is expected to be repaid in association with the transaction.
As a result, all ratings at CEOC will be withdrawn at that time
including the company's B1 CFR.
The downgrade of the Eldorado and CRC CFRs to B2 considers the
increase in debt to support the acquisition of CEC, including the
risks associated with integration and execution of the acquisition.
The downgrade also reflects the disruption in casino visitation
resulting from efforts to contain the spread of the coronavirus
including recommendations from federal, state and local governments
to avoid gatherings and avoid non-essential travel. These efforts
included mandates to close casinos on a temporary basis. While
casinos have begun to reopen, the ramp up and sustainability in
operations is unclear at this point. The downgrade also reflects
the negative effect on consumer income and wealth stemming from job
losses and asset price declines, which could diminish discretionary
resources to spend at casinos once this crisis subsides.
Moody's assessment of Eldorado is based on a consolidated approach.
Eldorado and Caesars Resort Collection, LLC, the surviving Caesars
entity with rated debt, will not guarantee each other's debt. The
rating and outlook rationale for ERI as well as the upgrade and
downgrade considerations below apply collectively to ERI and CRC. A
cross default is expected at Eldorado given CRC's debt will be
considered material indebtedness, as CRC will be part of Eldorado's
restricted group and included in covenants contained in Eldorado's
credit agreement. The CRC debt will not cross default to Eldorado's
debt. Moody's notes that the entities have common ownership,
management, operational functionality, and ability for cash to be
readily moved between the entities to support operations and debt
reduction. Debt instrument ratings at Eldorado and CRC are based on
the priority of claim and recovery estimates given they have
differing claims on the Eldorado and CRC asset pools. Moody's
expects the company's focus will be repaying debt at CRC and this
could potentially result over time in CRC secured and unsecured
debt being notched above the respective secured and unsecured debt
at Eldorado.
Assignments:
Issuer: Caesars Resort Collection, LLC
Gtd Senior Sec Term Loan B, Assigned B1 (LGD3)
Senior Secured Notes, Assigned B1 (LGD3)
Issuer: Eldorado Resorts, Inc.
Senior Secured Notes, Assigned B1 (LGD3)
Senior Unsecured Notes, Assigned Caa1 (LGD6)
Downgrades:
Issuer: Caesars Resort Collection, LLC
Corporate Family Rating, Downgraded to B2 from B1
Probability of Default Rating, Downgraded to B2-PD from B1-PD
Gtd Senior Secured Term Loan B, Downgraded to B1 (LGD3) from Ba3
(LGD3)
Gtd Senior Secured Revolving Credit Facility, Downgraded to B1
(LGD3) from Ba3 (LGD3)
Gtd Senior Unsecured Global Notes, Downgraded to Caa1 (LGD6) from
B3 (LGD5)
Issuer: Eldorado Resorts, Inc.
Corporate Family Rating, Downgraded to B2 from B1
Probability of Default Rating, Downgraded to B2-PD from B1-PD
Withdrawals:
Issuer: Caesars Resort Collection, LLC
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-1
Outlook Actions:
Issuer: Caesars Resort Collection, LLC
Outlook, Changed to Negative from Rating Under Review
Issuer: Eldorado Resorts, Inc.
Outlook, Changed to Negative from Rating Under Review
RATINGS RATIONALE
Eldorado Resorts Inc.'s B2 Corporate Family Rating reflects the
company's high leverage level following the acquisition of Caesars.
Debt-to-EBITDA leverage is expected to be high at near 7.5x in 2021
on a consolidated basis. Integration of the businesses and
realizing synergies, both on the cost and revenue side, are key to
reducing leverage and improving cash flow. The meaningful earnings
decline from efforts to contain the coronavirus and the potential
for a slow recovery as properties reopen also remains a key
constraint. Eldorado benefits from the size and diversification of
its operations, which is further enhanced in terms of scale when
including Caesars, both on the Las Vegas Strip and regionally. The
acquisition of Caesars will allow the company to broaden and
enhance its rewards program and capitalize on the Caesars brand
name, including in the developing sports betting and gaming
markets.
ERI's credit profile also reflects the company's very good
liquidity as reflect in the SGL-1 rating. The combined company will
have roughly $850 million of pro forma cash at close ($125 million
at Eldorado) and approximately $1.6 billion of available revolver
capacity ($1 billion at Eldorado) and no meaningful debt maturities
over the next year.
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 gaming sector
has been one of the sectors most significantly affected by the
shock given its sensitivity to consumer demand and sentiment. More
specifically, the weaknesses in the combined ERI/CRC credit
profile, including its exposure to travel disruptions and
discretionary consumer spending have left it vulnerable to shifts
in market sentiment in these unprecedented operating conditions and
ERI and CRC remain vulnerable to the outbreak continuing to
spread.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. The ratings of ERI and CRC reflect the impact, breadth
and severity of the shock, and the broad deterioration in credit
quality it has triggered.
Governance considerations include Moody's expectation that Eldorado
will focus on reducing debt and leverage. Eldorado's absence of a
dividend ensures more free cash flow is available for debt
reduction and to fund investments.
The negative outlook considers that ERI remains vulnerable to
travel disruptions and unfavorable sudden shifts in discretionary
consumer spending and the uncertainty regarding the timing of all
facility re-openings and the pace at which consumer and commercial
spending at the company's properties will recover.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:
Ratings could be downgraded if liquidity deteriorates or if Moody's
anticipates Eldorado's earnings declines to be deeper or more
prolonged because of actions to contain the spread of the virus or
reductions in discretionary consumer spending. Ratings could be
downgraded if the company is not able to reduce debt-to-EBITDA
leverage to 8.0x by 2021 on a consolidated basis.
A ratings upgrade is unlikely given the weak operating environment
and expectation for leverage to spike in 2020. However, the ratings
could be upgraded if the facilities reopen and earnings recover
such that comfortably positive free cash flow and reinvestment
flexibility is restored and debt-to-EBITDA is sustained below
6.5x.
Eldorado Resorts, Inc. owns and operates gaming properties in 11
states: Nevada, Colorado, Iowa, Mississippi, Missouri, Florida,
Ohio, New Jersey, Louisiana, Illinois, and Indiana. Revenue for the
latest 12-month period ended March 31, 2020 was about $2.4 billion.
On a pro-forma basis for the acquisition of Caesars, the company
operated 48 gaming properties and managed an additional 6 gaming
properties in the United States. Pro forma combined revenue for the
12 months ended March 2020 was $10.9 billion.
The principal methodology used in these ratings was Gaming Industry
published in December 2017.
ENERGIZER HOLDINGS: Moody's Rates New $600MM Unsec. Notes 'B2'
--------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Energizer
Holdings, Inc.'s new $600 million senior unsecured 8-year notes.
All other ratings for Energizer including the B1 Corporate Family
Rating and B1-PD Probability of Default Rating remain unchanged.
The company's SGL-1 Speculative Grade Liquidity Rating and stable
outlook are unaffected. Proceeds from the new offering will be used
to refinance the existing 5.5% $600 million senior unsecured notes
due June 2025.
The offering is credit positive because it extends the maturity
profile with leverage unaffected and cash interest expense not
changing materially. The next significant maturity is a $365
million term loan A due in December 2022.
Ratings assigned:
Energizer Holdings, Inc.:
Senior Unsecured Notes due 2028 at B2 (LGD-4).
The rating outlook is stable.
RATINGS RATIONALE
Energizer's B1 CFR reflects its concentration in the declining
battery category that is facing a slow secular decline as consumer
products are increasingly evolving toward rechargeable
technologies. The ratings also reflect high event risk as Energizer
has chosen to expand outside of the battery business -- through
debt financed acquisitions -- into totally unrelated businesses.
The company's high financial leverage, with debt to EBITDA at about
5.8x for the last twelve months ended 3/31/2020, following the
acquisition of the Spectrum assets in January 2019, also limits
financial flexibility to invest and sustain the dividend. Moody's
expects debt to EBITDA to improve modestly to about 5.3x over the
next 12 months through a combination of earnings growth, boosted by
cost and operational synergies, and debt repayment. However,
leverage could well increase again should Energizer pursue
additional debt-financed acquisitions. Energizer's ratings are
supported by its leading market position in the single use and
specialized battery market, and portfolio of well-known brands in
the battery and consumer car maintenance segments, and solid
operating cash flow.
Energizer's organic revenue growth was 2.7% in the second fiscal
quarter ended March 31, 2020 driven by some pantry loading of its
core battery product by consumers and healthcare professionals, in
the wake of the coronavirus. Moody's expects demand for the
company's battery business (67% of sales) to remain favorable. That
said sales will be negatively impacted by reduced demand for
Energizer's more discretionary products, such as its auto care
products (20%). Moody's expects Energizer's organic revenue growth
to be around 0%-3% over the next year supported by volume gains and
a slight pick-up in developed markets growth
In terms of Environmental, Social and Governance considerations,
the most important factor for Energizer's ratings are governance
considerations related to its financial policies and environmental
risk. Moody's views Energizer's financial policies as aggressive
given its debt financed acquisition of Spectrum into totally
unrelated businesses. Energizer faces environmental risk from the
disposal and recycling of batteries.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The consumer
products sector has been one of the sectors affected by the shock
given its sensitivity to consumer demand and sentiment. More
specifically, the weaknesses in Energizer's credit profile,
including its exposure to multiple affected countries have left it
vulnerable to shifts in market sentiment in these unprecedented
operating conditions and the company remains vulnerable to the
outbreak continuing to spread. Moody's regards the coronavirus
outbreak as a social risk under its ESG framework, given the
substantial implications for public health and safety.
The stable outlook reflects Moody's expectation that Energizer's
high financial leverage will improve over the next 12 months
through EBITDA growth and debt repayment. Moody's also assume that
Energizer's very good liquidity will provide flexibility to
integrate Spectrum and repay debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be downgraded if Energizer experiences
significant operational disruption. Further, the ratings could be
downgraded if the company's financial policies become increasingly
aggressive, including additional debt funded acquisitions or
shareholder returns. Moody's could also downgrade the ratings if
the company's liquidity deteriorates or if debt to EBITDA is
sustained above 5.5x.
Moody's could upgrade the ratings if Energizer successfully
integrates both the Spectrum battery and Spectrum auto businesses
and improves credit metrics. Debt/EBITDA would need to be sustained
below 4.5x before Moody's would consider an upgrade.
The principal methodology used in this rating was Consumer Packaged
Goods Methodology published in February 2020.
Energizer Holding, Inc. manufactures and markets batteries,
lighting products, car fragrance and appearance, and engine
additives around the world. The product portfolio includes
household batteries, specialty batteries, portable lighting
equipment and various car fragrance dispensing systems. Some key
brands include Energizer, Eveready, Rayovac, STP, and ArmorAll. The
publicly-traded company generates roughly $2.7 billion in annual
revenues.
EVCO HOMES: Seeks Approval to Hire Langley & Banack as Counsel
--------------------------------------------------------------
EVCO Homes LLC seeks approval from the U.S. Bankruptcy Court for
the Western District of Texas to employ Langley & Banack, Inc. as
its legal counsel.
Langley & Banack will represent Debtor in its Chapter 11 case.
William Davis, Jr., Esq., the firm's attorney who will be providing
the services, will be compensated at $400 per hour.
Debtor paid the firm a retainer in the amount of $10,000, plus
$1,717 for the filing fee.
Mr. Davis 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:
William R. Davis, Jr., Esq.
Langley & Banack, Inc.
745 E. Mulberry, Suite 700
San Antonio, TX 78212
Telephone: (210) 736-6600
Email: wrdavis@langleybanack.com
About EVCO Homes
EVCO Homes LLC sought Chapter 11 protection (Bankr. W.D. Tex. Case
No. 20-51049) on June 1, 2020. The petition was signed by Misha
McCauley, Debtor's managing member. At the time of the filing,
Debtor disclosed assets of $1 million to $10 million and
liabilities of the same range. Judge Ronald B. King oversees the
case. Langley & Banack, Inc. represents Debtor as counsel.
FOXWOOD HILLS: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------
The Office of the U.S. Trustee on June 17 disclosed in a court
filing that no official committee of unsecured creditors has been
appointed in the Chapter 11 case of Foxwood Hills Property Owners
Association, Inc.
About Foxwood Hills Property
Owners Association
Foxwood Hills Property Owners Association, Inc. is an organization
of owners of Foxwood Hills -- a lake front community of primary and
vacation homes nestled in the northwest corner of Oconee County,
S.C.
Foxwood Hills Property Owners Association filed its voluntary
petition under CHapter 11 of the Bankruptcy Code (Bankr. D.S.C.
Case No. 20-02092) on May 8, 2020. In the petition signed by
Gregory B. Sheperd, president, Debtor disclosed $4,253,427 in
assets and $219,780 in liabilities. Judge Helen E. Burris oversees
the case.
Debtor is represented by Julio E. Mendoza, Jr., Esq. at Nexsen
Pruet, LLC. American Legal Claim Services, LLC is Debtor's claims
and noticing agent.
FRANK HELMKA: $278K Sale of Wall Property to CCG Real Approved
--------------------------------------------------------------
Judge Christine M. Gravelle of the U.S. Bankruptcy Court for the
District of New Jersey authorized Frank Helmka and Teresa Helmka to
sell the real property located at 2212 Hadley Court, Wall, New
Jersey to CCG Real Estate, LLC for $278,000, pursuant to their
Contract of Sale.
The sale is free and clear of all liens, claims, interests and
encumbrances with valid liens, claims, interests, and encumbrances
to attach to proceeds.
The Court has found, having considered the limited objection filed
on behalf of Michael Markovitz, that Mr. Markovitz does not object
to the sale or Contract of Sale, and therefore, the Debtors are not
required to obtain a signed Addendum from Michael Markovitz
indicating his intention to convey his interest in the Property.
The Order supersedes any Addendum and the Contract of Sale.
First mortgagee Blue Foundry Bank, formerly known as Boiling
Springs Savings Bank will be paid in full at closing pursuant to a
valid, current/unexpired payoff statement.
Valid liens, claims, interests, and encumbrances will attach to
proceeds of the sale subject to distribution in accordance with
further Order of the Court and Northeast Bank's pending Motion for
Stay Relief and Turnover of Funds that has been adjourned to June
16, 2020.
All sale proceeds, except for payoff of the first mortgagee, normal
and customary closing costs and realtor commissions, are to be held
in escrow and trust by counsel for Chapter 11 Debtors pending entry
of an Order by this Court on a Motion to be filed on behalf of
Michael Markovitz for declaration and determination as to the
distribution of the sale proceeds and the pending Motion for Stay
Relief and Turnover of Funds, and/or any future motion or cross
motion, of Northeast Bank.
Within five days from closing on the Property, the HUD-1 from sale
of the Property will be provided to David Shaver, Esq., for use in
preparation and filing of a motion regarding distribution of the
sale proceeds.
The 14-day period under Fed. R. Bankr. P. 6004(h) is waived.
A hearing on the Motion was held on March 31, 2020 at 10:00 a.m.
About Frank Helmka and Teresa Helmka
Frank Helmka and Teresa Helmka sought Chapter 11 protection (Bankr.
D. N.J. Case No. 18-32272) on Nov. 9, 2018. The Debtors tapped
Melinda D. Middlebrooks, Esq., at Middlebrooks Shapiro, P.C. as
counsel.
FREEDOM OIL: U.S. Trustee Unable to Appoint Committee
-----------------------------------------------------
The Office of the U.S. Trustee on June 15, 2020, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of Freedom Oil & Gas, Inc.
About Freedom Oil & Gas
Freedom Oil & Gas, Inc. operates as an oil and gas exploration and
production company. Based in Houston, Texas, Freedom Oil has
established an acreage position in the oil-rich portion of the
Eagle Ford shale in Dimmitt County.
On May 11, 2020, Freedom Oil & Gas and its affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32582).
At the time of the filing, Freedom Oil & Gas, Freedom Oil & Gas
USA, Inc., Freedom Eagle Ford, Inc. and Freedom Production, Inc.
each had estimated assets of between $1 million and $10 million and
liabilities of between $10 million and $50 million. Maverick
Drilling Company, Inc. and Maverick Production Company, Inc. had
estimated assets and liabilities of less than $50,000 at the time
of the filing. Judge David R. Jones oversees the cases. Okin
Adams LLP is Debtors' bankruptcy counsel.
GEORGIA DIRECT: Gets Court Approval to Hire Key Auctioneers
-----------------------------------------------------------
Georgia Direct Carpet, Inc. and its debtor affiliates received
approval from the U.S. Bankruptcy Court for the Southern District
of Indiana to employ Key Auctioneers to market and sell their
remaining personal properties.
The professional services to be rendered by Key Auctioneers
include, but are not limited, to the following:
(a) assist in the storage and safe keeping of all equipment
and materials currently owned by Debtors; and
(b) hold and coordinate a public auction for all equipment and
materials currently owned by Debtors.
Key Auctioneers will be compensated as follows: (i) 18 percent
buyer's premium; (ii) 18 percent commission on all items sold, and
(iii) $1,800 for marketing expenses. The firm will receive
reimbursement for work-related expenses.
Key Auctioneers is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm may be reached at:
Key Auctioneers
5520 S Harding St.
Indianapolis, IN 46217
Telephone: (855) 353-1100
About Georgia Direct Carpet
Georgia Direct Carpet, Inc., also known as Georgia Carpet Direct,
owns and operates a carpet and flooring store in Richmond, Ind. It
offers carpets, hardwoods, laminate flooring and ceramic tile floor
products.
Georgia Direct Carpet and its affiliates sought Chapter 11
protection (Bankr. S.D. Ind. Lead Case No. 19-06316) on Aug. 26,
2019. In the petition signed by Anthony Bledsoe, president, Georgia
Direct Carpet estimated assets and liabilities at $1 million to $10
million. The Hon. Robyn L. Moberly is the case judge.
Debtors tapped Mattingly Burke Cohen & Biederman LLP as their legal
counsel; Mattingly Burke Cohen & Biederman LLP, as special counsel;
and Barron Business Consulting, Inc. as their financial advisor.
The Office of the U.S. Trustee appointed creditors to serve on the
official committee of unsecured creditors on Oct. 9, 2019. The
committee is represented by Mercho Caughey.
GGI HOLDINGS: Committee Hires Kilpatrick Townsend as Legal Counsel
------------------------------------------------------------------
The official committee of unsecured creditors of GGI Holdings, LLC
and its debtor-affiliates seek authority from the U.S. Bankruptcy
Court for the Northern District of Texas to retain Kilpatrick
Townsend & Stockton LLP as its attorneys.
The Committee requires Kilpatrick to:
a) render legal advice regarding the Committee's organization,
duties and powers in these cases;
b) assist the Committee in its investigation of the acts,
conduct, assets, liabilities and financial condition of the Debtors
and participating in and reviewing any proposed asset sales or
dispositions, and any other matters relevant to these cases;
c) attend telephonic meetings of the Committee and meetings
with the Debtors and secured creditors, and their attorneys and
other professionals, and participating in egotiations with these
parties, as requested by the Committee;
d) take all necessary action to protect and preserve the
interests of the Committee, including possible prosecution of
actions on its behalf and investigations concerning litigation in
which the Debtors are involved;
e) assist the Committee in the review, analysis, and
negotiation of any postpetition financing/use of cash collateral;
f) assist the Committee with respect to communications with
the general unsecured creditor body about significant matters in
these cases;
g) review and analyze claims filed against the Debtors'
estates;
h) represent the Committee in hearings before the Court,
appellate courts, and other courts in which matters may be heard,
and representing the interests of the Committee before those courts
and before the U.S. Trustee;
i) assist the Committee in preparing all necessary motions,
applications, responses, reports and other pleadings in connection
with the administration of these cases;
j) assist the Committee in the review, formulation, analysis,
and negotiation of any plan(s) of reorganization and accompanying
disclosure statement(s); and
k) such other legal assistance as the Committee may deem
necessary and appropriate.
Kilpatrick Townsend will be paid at these hourly rates:
Partners $690 to $1,160
Associates $515 to $550
Paralegals $315
Kilpatrick Townsend will also be reimbursed for reasonable
out-of-pocket expenses incurred.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, David M.
Posner disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firm has not represented the Committee in the 12 months
prepetition; and
-- The Committee and its counsel are currently in the process
of formulating a budget.
David M. Posner, Esq., partner at the law firm of Kilpatrick
Townsend & Stockton LLP, attests that he and each member of the
Firm is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.
The counsel can be reached through:
David M. Posner, Esq.
Gianfranco Finizio, Esq.
KILPATRICK TOWNSEND & STOCKTON LLP
The Grace Building
1114 Avenue of the Americas
New York, NY 10036
Tel: (212) 775-8700
Fax: (212) 775-8800
Email: dposner@kilpatricktownsend.com
gfinizio@kilpatricktownsend.com
About GGI Holdings
Founded in 1965, Gold's Gym operates a network of company-owned and
franchised fitness centers. It owns and operates approximately 95
gyms domestically, and holds franchise agreements for more than 600
gyms domestically and internationally. Its majority owner is TRT
Holdings, Inc. -- acquired the business in 2004.
GGI Holdings, LLC, Gold's Gym International, Inc. and other related
entities sought Chapter 11 protection (Bankr. 20-31318) on May 4,
2020.
GGI Holdings was estimated to have assets and debt of $50 million
to $100 million.
The Hon. Harlin Dewayne Hale is the case judge.
The Debtors tapped Dykema Gossett PLLC as bankruptcy counsel. BMC
Group Inc. is the claims agent.
GNC HOLDINGS: Reaches Accord for Extension of Debt Maturity Dates
-----------------------------------------------------------------
GNC Holdings, Inc., has reached an agreement with required lender
groups to extend the springing maturity dates for certain loans.
As previously disclosed, GNC's Tranche B-2 term loan, FILO term
loan and revolving credit facility feature springing maturities
that, prior to the amendments, could be accelerated from Aug. 10,
2020 to June 15, 2020 if certain conditions are not satisfied. Due
to COVID-19 related impacts on its business, the Company expected
it would not be able to satisfy certain of those conditions, which
could result in the acceleration of the springing maturity date.
As a result of discussions with its lenders, GNC entered into
amendments to its loan agreements to extend from June 15, 2020 to
June 30, 2020 the dates on which, under certain circumstances, the
respective springing maturity dates for the term loan facility,
FILO credit facility and revolving credit facility may accelerate.
The Company continues to explore all strategic options available to
it to refinance and restructure its debt to drive business
continuity and protect the long term financial interests of the
Company and the interests of the Company's key stakeholders. GNC
will share additional updates when the Company's Board of Directors
has approved a specific alternative or transaction or determined
that further disclosure is appropriate or legally required.
GNC's founding principles of delivering high quality science-based
health and wellness products remain strong and are more relevant in
today's environment than ever before. The Company remains
committed to executing on its business strategies that will
position it for long-term growth to the benefit of its
stakeholders.
About GNC Holdings
GNC Holdings, Inc., headquartered in Pittsburgh, PA, is a global
health and wellness brand with a diversified, multi-channel
business. The Company's assortment of performance and nutritional
supplements, vitamins, herbs and greens, health and beauty, food
and drink and other general merchandise features innovative
private-label products as well as nationally recognized third-party
brands, many of which are exclusive to GNC. The Company serves
consumers worldwide through company-owned retail locations,
domestic and international franchise activities, and e-commerce.
As of March 31, 2020, GNC had approximately 7,300 locations, of
which approximately 5,200 retail locations are in the United States
(including approximately 1,600 Rite Aid licensed
store-within-a-store locations) and the remainder are locations in
approximately 50 countries.
GNC Holdings reported a net loss of $35.11 million for the year
ended Dec. 31, 2019, compared to net income of $69.78 million for
the year ended Dec. 31, 2018. As of March 31, 2020, the Company
had $1.41 billion in total assets, $1.61 billion in total
liabilities, $211.39 million in convertible preferred stock, and a
total stockholders' deficit of $402.39 million.
PricewaterhouseCoopers LLP, in Pittsburgh, Pennsylvania, the
Company's auditor since 2003, issued a "going concern"
qualification in its report dated March 25, 2020 citing that the
Company has significant debt (specifically the Convertible Notes
and the Tranche B-2 Term Loan) maturing at the latest in March
2021. The Company has insufficient cash flows from operations to
repay these debt obligations as they come due, which raises
substantial doubt about its ability to continue as a going concern.
HERTZ CORPORATION: U.S. Trustee Appoints Creditors' Committee
-------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed a committee to
represent unsecured creditors in the Chapter 11 cases of The Hertz
Corporation and its affiliates.
The committee members are:
1. American Automobile Association, Inc.
Attn: David Polansky
1000 AAA Drive
Heathrow, Florida, 32746
Phone: (407) 444-7116
dpolansky@national.aaa.com
2. Bradley, Emma
c/o Daniel S. Levy, Esq.
Law Office of Richard Cornfeld, LLC
1010 Market Street, Suite 1645
St. Louis, Missouri 63101
Phone: (314) 241–5799
dlevy@cornfeldlegal.com
3. Dawson, Janice
c/o Patricio Barrera, Esq.
Barrera & Associates
2298 E. Maple Ave.
El Segundo, CA 90245
Phone: (310) 802-1500
barrera@baattorneys.com
4. International Brotherhood of Teamsters
Attn: Iain Gold
25 Louisiana Ave., NW
Washington, D.C. 20001
Phone: (202) 624-8757
igold@teamster.org
5. Pension Benefit Guaranty Corp.
Attn: Jack Butler
1200 K Street, NW
Washington, D.C. 20005
Phone: (202) 229-3471
jack@pbgc.gov
6. Sirius XM Radio, Inc.
Attn: Patrick Donnelly
1221 Ave. of the Americas
New York, NY 10020
Phone: (212) 584-5180
Patrick.donnelly@siriusxm.com
7. Southwest Airlines Co.
Attn: James Sheppard
2702 Love Field Drive, HDQ-4GC
Dallas, TX 75235
Phone: (214) 792-5354
james.sheppard@wnco.com
8. U.S. Bank
Attn: Cindy Woodward
60 Livingston Ave., EP-MN-WS ID
St. Paul, Minnesota 55107
Phone: (651) 466-5854
cindy.woodward@usbank.com
9. Wells Fargo Bank
Attn: Thomas M. Korsman
600 S. 4th Street, 6th Floor
Minneapolis, MN 55479
Phone: (612) 850–1194
Thomas.m.korsman@wellsfargo.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 Hertz Corp.
Hertz Corp. and its subsidiaries operate a worldwide vehicle rental
business under the Hertz, Dollar, and Thrifty brands, with car
rental locations in North America, Europe, Latin America, Africa,
Asia, Australia, the Caribbean, the Middle East, and New Zealand.
It also operates a vehicle leasing and fleet management solutions
business. For more information, visit http://www.hertz.com/
On May 22, 2020, The Hertz Corporation and some of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court
(Bankr. D. Del. Lead Case No. 20-11218).
The Hon. Mary F. Walrath is the presiding judge.
Debtors tapped White & Case LLP as bankruptcy counsel; Richards,
Layton & Finger, P.A. as local counsel; Moelis & Co. as investment
banker; and FTI Consulting as financial advisor. Prime Clerk LLC
is the claims agent, maintaining the page
https://restructuring.primeclerk.com/hertz
HORNBECK OFFSHORE: Taps Jackson Walker as Conflicts Counsel
-----------------------------------------------------------
Hornbeck Offshore Services, Inc. and its debtor affiliates seek
approval from the U.S. Bankruptcy Court for the Southern District
of Texas to employ Jackson Walker LLP.
Jackson Walker LLP will serve as co-counsel with Kirkland & Ellis
LLP and Kirkland & Ellis International LLP, the other firms
handling Debtors' Chapter 11 cases. It will also handle matters on
which Kirkland & Ellis may have a conflict.
The firm's services will be provided mainly by Matthew Cavenaugh,
Esq., who will be paid at an hourly rate of $750.
The hourly rates for other attorneys and paraprofessionals are as
follows:
Restructuring attorneys $385 - $895
Partners $565 - $900
Associates $420 - $565
Paraprofessionals $175 - $185
Jackson Walker received a retainer of $250,000 for services
performed and to be performed in connection with Debtors'
bankruptcy cases. On March 31, the firm received payment of
$38,230 for pre-bankruptcy services and reimbursement of expenses
incurred for filing fees. On May 12, the firm received an
additional payment in the amount of $76,142.50. The firm continues
to hold $135,627.50 in trust.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Jackson
Walker made the following disclosures:
1. Jackson Walker did not agree to any variations from, or
alternatives to, its standard billing arrangements for this
engagement.
2. No professional at Jackson Walker varied his rate based on
the geographic location of Debtors' bankruptcy cases.
3. Jackson Walker represented Debtors during the weeks
immediately before the petition date using the following hourly
rates: $750 per hour for Mr. Cavenaugh, $385 to $895 per hour for
attorneys, and $175 to $185 per hour for paraprofessionals.
4. Jackson Walker has not prepared a budget and staffing
plan.
Mr. Cavenaugh 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:
Matthew D. Cavenaugh, Esq.
Jackson Walker LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Telephone: (713) 752-4284
Email: mcavenaugh@jw.com
About Hornbeck Offshore Services
Hornbeck Offshore Services, Inc. provides marine transportation
services to exploration and production, oilfield service, offshore
construction and U.S. military customers. Hornbeck and its
affiliates were incorporated in 1997 and are headquartered in
Covington, La.
On May 19, 2020, Hornbeck Offshore Services and its affiliates
sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No.
20-32679). Hornbeck Offshore disclosed total assets of
$2,691,806,000 and total liabilities of $1,493,912,000 as of Sept.
30, 2019.
The Hon. David R. Jones is the case judge.
Debtors tapped Kirkland & Ellis, LLP as general bankruptcy counsel;
Winstead PC as co-counsel; Guggenheim Securities, LLC as financial
advisor; and Portage Point Partners, LLC as restructuring advisor.
Stretto is the claims agent.
HOTEL CHARLES: Seeks Approval to Hire DeCaro & Howell as Counsel
----------------------------------------------------------------
Hotel Charles Enterprises, LLC seeks approval from the U.S.
Bankruptcy Court for the District of Maryland to employ DeCaro &
Howell P.C. as its legal counsel.
The firm's services will include representation in an adversary
proceeding (Case No. 19-00122) that was filed in connection with
the proposed assessment of sales and use tax made by the Maryland
Comptroller. The firm will also handle matters related to the
ongoing administration of Debtor's Chapter 11 case.
The hourly rates for the firm's attorneys and paraprofessionals are
as follows:
Thomas F. DeCaro, Jr. $425
Marla L. Howell $380
Paralegals $100
No retainer was received by the firm. None of the fees and costs of
representation by counsel will be paid by Debtor. All such amounts
will be paid by Debtor's affiliated companies under common
ownership, none of which is involved in Debtor's bankruptcy case in
any way.
The firm has determined that there are no conflicts of interest
involved in representing the Debtor in its bankruptcy case or in
the adversary proceeding. The representation does not involve
claims against or in favor of any interested parties or any parties
related to Debtor.
The firm can be reached through:
Thomas F. DeCaro, Jr., Esq.
DECARO & HOWELL P.C.
14406 Old Mill Rd. #201
Upper Marlboro, MD 20772
Telephone: (301) 464-1400
Facsimile: (301) 464-4776
Email: tfd@erols.com
About Hotel Charles Enterprises
Hotel Charles Enterprises, LLC sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Md. Case No. 13-22613) on July
24, 2013, listing under $1 million in both assets and liabilities.
Judge Thomas J. Catliota oversees the case. Debtor tapped Thomas
F. DeCaro, Jr., Esq., and Marla L. Howell, Esq. at DeCaro & Howell
P.C. as legal counsel.
IFS SECURITIES: Taps Richard E. Brodsky as Litigation Counsel
-------------------------------------------------------------
IFS Securities, Inc. seeks approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to employ Richard E. Brodsky,
d/b/a The Brodsky Law Firm, as its special litigation counsel.
The Debtor desires to retain Mr. Brodsky for representation in the
following matters:
(i) IFS Securities, Inc. v. INTL FCStone Financial, Inc.,
Arbitration Case No. 01-18-0004-2494, FINRA Arbitration. Mr.
Brodsky is representing the Debtor in this arbitration proceeding,
which seeks damages of $35 million from INTL FCStone Financial,
Inc.
(ii) Action on Fidelity Bond. Mr. Brodsky is representing the
Debtor in its efforts to recover funds under a fidelity bond.
In the 90 days prior to the petition date on April 24, 2020, Mr.
Brodsky received $2,000 from the Debtor in relation to the defense
of litigation brought in Maryland by Thomas Howes. Further, Mr.
Brodsky received two retainers of $10,000 each, which will be used
for expenses relating to the Matters, in October 2019. Those
amounts have not been spent, and are presently in Mr. Brodsky's
account. As of the petition date, the Debtor owed no amount to Mr.
Brodsky.
Richard E. Brodsky, an attorney at The Brodsky Law Firm, disclosed
in court filings that he is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The attorney can be reached at:
Richard E. Brodsky, Esq.
THE BRODSKY LAW FIRM
200 South Biscayne Boulevard, Suite 1930
Miami, FL 33131
Telephone: (786) 220-3328
About IFS Securities
IFS Securities, Inc., an Atlanta-based broker and dealer, filed a
Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 20-65841)
on April 24, 2020. At the time of filing, IFS was estimated to have
$1 million to $10 million in assets and $10 million to $50 million
in liabilities. John D. Elrod, Esq. of Greenberg Traurig, LLP, is
the Debtor's counsel.
J.C. PENNEY: Four-Member Ad Hoc Equity Committee Formed
-------------------------------------------------------
A four-member ad hoc committee has been formed to represent equity
interest holders in the Chapter 11 cases of J.C. Penney Company,
Inc. and its affiliates.
The members of the committee are:
1. Niko Celentano
1422 Robertson Pl
Bronx, NY 10465
Email: Nikocelentano@gmail.com
2. Rahul Shekatkar
P.O. Box 275
Pennington, NJ 08534
Email: Rahul_rvs@hotmail.com
3. Edward Lee Address:
16 Cherokee Ave
West Islip, NY 11795
Email: Elee726253@aol.com
4. Scott Strober
21 Bentley Road
Great Neck, NY 11023
Email: SLstrober@aol.com
Judge David Jones of the U.S. Bankruptcy Court for the Southern
District of Texas had earlier signed an order directing J.C. Penney
shareholders, Rahul Shekatkar and Niko Celentano, to form an ad hoc
equity committee.
Both shareholders filed motions on May 28 to dismiss the companies'
Chapter 11 cases or, in the alternative, appoint an equity
committee.
The equity committee is represented by:
Matthew S. Okin, Esq.
David L. Curry, Jr., Esq.
Johnie Maraist, Esq.
Okin Adams LLP
1113 Vine St. Suite 240
Houston, Texas 77002
Tel: (713) 228-4100
Fax: (888) 865-2118
Email: mokin@okinadams.com
Email: dcurry@okinadams.com
Email: jmaraist@okinadams.com
About J.C. Penney
J.C. Penney Corporation, Inc., is an American retail company,
founded in 1902 by James Cash Penney and today engaged in marketing
apparel, home furnishings, jewelry, cosmetics, and cookware. The
company was called J.C. Penney Stores Company from 1913 to 1924,
when it was reincorporated as J.C. Penney Co.
On May 15, 2020, J.C. Penney announced that it entered into a
restructuring support agreement with lenders holding 70% of
JCPenney's first lien debt. The RSA contemplates agreed-upon terms
for a pre-arranged financial restructuring plan that is expected to
reduce several billion dollars of indebtedness. To implement the
plan, J.C. Penney and its affiliated debtors filed voluntary
petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182) on May
15, 2020.
At the time of the filing, Debtors disclosed assets of between $1
billion and $10 billion and liabilities of the same range.
Judge David R. Jones oversees the cases.
Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as bankruptcy counsel; Katten Muchin Rosenman LLP
as special counsel; AlixPartners, LLP as financial advisor; and
Lazard Freres & Co. LLC as investment banker. Prime Clerk is the
claims agent, maintaining the page
http://cases.primeclerk.com/JCPenney
A committee of unsecured creditors has been appointed in Debtors'
bankruptcy cases. The committee is represented by Cole Schotz,
P.C. and Cooley, LLP.
J.C. PENNEY: Law Firm of Russell Represents Utility Companies
-------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the Law Firm of Russell R. Johnson III, PLC submitted a verified
statement that it is representing the utility companies in the
Chapter 11 cases of J.C. Penney Company, Inc. et al.
The names and addresses of the Utilities represented by the Firm
are:
a. American Electric Power
Attn: Dwight C. Snowden
American Electric Power
1 Riverside Plaza, 13th Floor
Columbus, Ohio 43215
b. Arizona Public Service Company
Attn: Sandra Rosales
2043 W. Cheryl Dr., Bldg. M
Mail Station 3209
Phoenix, Arizona 85021-1915
c. CenterPoint Energy Resources Corp.
Attn: Timothy Muller, Esq.
Senior Counsel
CenterPoint Energy, Inc.
1111 Louisiana St.
Houston, TX 77002
d. Constellation NewEnergy, Inc.
Constellation NewEnergy – Gas Division, LLC
Attn: C. Bradley Burton
Credit Analyst
Constellation Energy
1310 Point Street, 12th Floor
Baltimore, MD 21231
e. Consolidated Edison Company of New York, Inc.
Attn: Rosalie Zuckerman, Esq.
4 Irving Place – Room 1875S
New York, NY 1003
f. Orange and Rockland Utilities, Inc.
Attn: Jennifer Woehrle
390 W. Route 59
Spring Valley, New York 10977
g. Florida Power & Light Company
Gulf Power Company
Attn: Gloria Lopez
Revenue Recovery Department RRD/LFO
4200 W. Flagler St.
Coral Gables, Florida 33134
h. Georgia Power Company
Attn: Daundra Fletcher
2500 Patrick Henry Parkway
McDonough, GA 30253
i. The Connecticut Light & Power Company
Yankee Gas Services Company
NStar Electric Company, Western Massachusetts
NStar Electric Company, Eastern Massachusetts
Public Service Company of New Hampshire
Attn: Honor S. Heath, Esq.
Eversource Energy
107 Selden Street
Berlin, CT 06037
j. Baltimore Gas and Electric Company
Commonwealth Edison Company
PECO Energy Company
The Potomac Electric Power Company
Delmarva Power & Light Company
Assistant General Counsel
Exelon Corporation
2301 Market Street, S23-1
Philadelphia, PA 19103
k. New York State Electric and Gas Corporation
Attn: Kelly Potter
James A. Carrigg Center
Bankruptcy Department
18 Link Drive
Binghamton, NY 13904
l. Rochester Gas and Electric Corporation - $4,883
Attn: Patricia Cotton
89 East Avenue
Rochester, NY 14649
m. Central Maine Power Company
Attn: Richard P. Hevey, Esq.
Senior Counsel
83 Edison Drive
Augusta, Maine 04336
n. Sacramento Municipal Utilities District
Attn: Randall J. Hakes, Esq.
6301 S Street, Mailstop A311
Sacramento, California 95817
o. Salt River Project
Attn: Breanna Holmes/ISB 232
2727 E. Washington St.
P.O. Box 52025
Phoenix, AZ 85072-2025
p. San Diego Gas & Electric Company
Attn: A.J. Moreno, Bankruptcy Specialist
8326 Century Park Court
San Diego, CA 92123
q. Virginia Electric and Power Company
d/b/a Dominion Energy Virginia
Attn: Sherry Ward
600 East Canal Street, 10th floor
Richmond, VA 23219
r. Oklahoma Gas and Electric Company
Attn: Jennifer Castillo, Esq.
Sr. Attorney | OGE Legal Department
321 N. Harvey Ave.
MC 1208
Oklahoma City, OK 73102
s. Orlando Utilities Commission
Attn: Zoila P. Easterling, Esq.
Deputy General Counsel
P.O. Box 3193
Orlando, Florida 32802
t. Jackson Electric Membership Corporation
Attn: Roy E. Manoll, III, Esq.
Forston, Bentley & Griffin, P.A.
2500 Daniell's Bridge Road
Building 200, Suite 3A
Athens, Georgia 30606
u. PSEG Long Island
Attn: Kevin McKiernan
15 Park Drive
Melville, New York 11747
v. The Cleveland Electric Illuminating Company
Ohio Edison Company
Pennsylvania Power Company
West Penn Power Company
Monongahela Power Company
Potomac Edison Company
Metropolitan Edison Company
Jersey Central Power & Light Company
Pennsylvania Electric Company
Attn: Kathy M. Hofacre
FirstEnergy Corp.
76 S. Main St., A-GO-15
Akron, OH 44308
w. Boston Gas Company
Colonial Gas Cape Cod
KeySpan Energy Delivery Long Island
KeySpan Energy Delivery New York
Massachusetts Electric Company
Narragansett Electric Company
Niagara Mohawk Power Corporation
Attn: Christopher S. Aronson
Senior Counsel
National Grid
40 Sylvan Road
Waltham, MA 02451
x. Tampa Electric Company
Peoples Gas System
Attn: Barbara Taulton FRP, CAP
Florida Registered Paralegal
Tampa Electric Company
702 N. Franklin Street
Tampa, FL 33602
y. Symmetry Energy Solutions, LLC
f/k/a CenterPoint Energy Services, Inc.
Attn: Debora Churches
1111 Louisiana Street, B-241
Houston, Texas 77002
The nature and the amount of claims (interests) of the Utilities,
and the times of acquisition thereof are as follows:
a. The following Utilities have unsecured claims against the
above-referenced Debtors arising from prepetition utility usage:
American Electric Power, Symmetry Energy Solutions, LLC f/k/a
CenterPoint Energy Services, Inc., CenterPoint Energy Resources
Corp., Constellation NewEnergy, Inc., Constellation NewEnergy –
Gas Division, LLC, Consolidated Edison Company of New York, Inc.,
Orange and Rockland Utilities, Inc., The Connecticut Light & Power
Company, Yankee Gas Services Company, NStar Electric Company,
Western Massachusetts, NStar Electric Company, Eastern
Massachusetts, Public Service Company of New Hampshire, New York
State Electric and Gas Corporation, Rochester Gas and Electric
Corporation, Central Maine Power Company, Sacramento Municipal
Utilities District, Oklahoma Gas and Electric Company, Orlando
Utilities Commission, Jackson Electric Membership Corporation, PSEG
Long Island, The Cleveland Electric Illuminating Company, Ohio
Edison Company, Pennsylvania Power Company, West Penn Power
Company, Monongahela Power Company, Potomac Edison Company,
Metropolitan Edison Company, Jersey Central Power & Light Company,
Pennsylvania Electric Company, Boston Gas Company, Colonial Gas
Cape Cod, KeySpan Energy Delivery Long Island, KeySpan Energy
Delivery New York, Massachusetts Electric Company, Narragansett
Electric Company, Niagra Mohawk Power Corporation.
b. American Electric Power, Arizona Public Service Company,
Florida Power & Light Company, Georgia Power Company, Gulf Power
Company, Baltimore Gas and Electric Company, Delmarva Power & Light
Company, Salt River Project, San Diego Gas & Electric Company,
Virginia Electric and Power Company d/b/a Dominion Energy Virginia,
The Potomac Electric Power Company, and Tampa Electric Company hold
surety bonds that they will make claims upon for payment of the
prepetition debt that the Debtors owe to those Utilities.
c. Commonwealth Edison Company, PECO Energy Company and
Peoples Gas System held prepetition deposits that secured all
prepetition debt.
d. For more information regarding the claims and interests of
the Utilities in these jointly-administered cases, refer to the
Motion and Memorandum of Certain Utility Companies To: (A) Vacate,
and/or Reconsider, and/or Modify Order (I) Approving the Debtors'
Proposed Adequate Assurance of Payment for Future Utility Services,
(II) Prohibiting Utility Providers from Altering, Refusing, or
Discontinuing Services, (III) Approving the Debtors' Proposed
Procedures for Resolving Adequate Assurance Requests, (IV)
Authorizing the Debtors' Proposed Procedures For Resolving
Additional Assurance Requests, (IV) Authorizing Certain Fee
Payments For Services Performed, and (V) Granting Related Relief;
and (B) Seek Adequate Assurance pf Payment (Docket No. 486) filed
in the above-captioned, jointly-administered, bankruptcy cases.
The Law Firm of Russell R. Johnson III, PLC was retained to
represent the foregoing Utilities in May 2020. The circumstances
and terms and conditions of employment of the Firm by the Companies
is protected by the attorney-client privilege and attorney work
product doctrine.
The Firm can be reached at:
Russell R. Johnson III, Esq.
LAW FIRM OF RUSSELL R. JOHNSON III, PLC
2258 Wheatlands Drive
Manakin-Sabot, VA 23103
Tel: (804) 749-8861
Fax: (804) 749-8862
Email: russell@russelljohnsonlawfirm.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/PGWtQU
The Chapter 11 case is In re J.C. Penney Company, Inc., et al
(Banks. S.D. Tex. Case No. 20-20182 (DRJ))
J.C. PENNEY: Sussman & Moore Represents Utility Companies
---------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Sussman & Moore, LLP submitted a verified statement
that it is representing the utility companies in the Chapter 11
cases of J.C. Penney Company, Inc. et al.
The names and addresses of the Utilities represented by the Firm
are:
a. American Electric Power
Attn: Dwight C. Snowden
American Electric Power
1 Riverside Plaza, 13th Floor
Columbus, Ohio 43215
b. Arizona Public Service Company
Attn: Sandra Rosales
2043 W. Cheryl Dr., Bldg. M
Mail Station 3209
Phoenix, Arizona 85021-1915
c. CenterPoint Energy Resources Corp.
Attn: Timothy Muller, Esq.
Senior Counsel
CenterPoint Energy, Inc.
1111 Louisiana St.
Houston, TX 77002
d. Constellation NewEnergy, Inc.
Constellation NewEnergy – Gas Division, LLC
Attn: C. Bradley Burton
Credit Analyst
Constellation Energy
1310 Point Street, 12th Floor
Baltimore, MD 21231
e. Consolidated Edison Company of New York, Inc.
Attn: Rosalie Zuckerman, Esq.
4 Irving Place – Room 1875S
New York, NY 1003
f. Orange and Rockland Utilities, Inc.
Attn: Jennifer Woehrle
390 W. Route 59
Spring Valley, New York 10977
g. Florida Power & Light Company
Gulf Power Company
Attn: Gloria Lopez
Revenue Recovery Department RRD/LFO
4200 W. Flagler St.
Coral Gables, Florida 33134
h. Georgia Power Company
Attn: Daundra Fletcher
2500 Patrick Henry Parkway
McDonough, GA 30253
i. The Connecticut Light & Power Company
Yankee Gas Services Company
NStar Electric Company, Western Massachusetts
NStar Electric Company, Eastern Massachusetts
Public Service Company of New Hampshire
Attn: Honor S. Heath, Esq.
Eversource Energy
107 Selden Street
Berlin, CT 06037
j. Baltimore Gas and Electric Company
Commonwealth Edison Company
PECO Energy Company
The Potomac Electric Power Company
Delmarva Power & Light Company
Assistant General Counsel
Exelon Corporation
2301 Market Street, S23-1
Philadelphia, PA 19103
k. New York State Electric and Gas Corporation
Attn: Kelly Potter
James A. Carrigg Center
Bankruptcy Department
18 Link Drive
Binghamton, NY 13904
l. Rochester Gas and Electric Corporation - $4,883
Attn: Patricia Cotton
89 East Avenue
Rochester, NY 14649
m. Central Maine Power Company
Attn: Richard P. Hevey, Esq.
Senior Counsel
83 Edison Drive
Augusta, Maine 04336
n. Sacramento Municipal Utilities District
Attn: Randall J. Hakes, Esq.
6301 S Street, Mailstop A311
Sacramento, California 95817
o. Salt River Project
Attn: Breanna Holmes/ISB 232
2727 E. Washington St.
P.O. Box 52025
Phoenix, AZ 85072-2025
p. San Diego Gas & Electric Company
Attn: A.J. Moreno, Bankruptcy Specialist
8326 Century Park Court
San Diego, CA 92123
q. Virginia Electric and Power Company
d/b/a Dominion Energy Virginia
Attn: Sherry Ward
600 East Canal Street, 10th floor
Richmond, VA 23219
r. Oklahoma Gas and Electric Company
Attn: Jennifer Castillo, Esq.
Sr. Attorney | OGE Legal Department
321 N. Harvey Ave.
MC 1208
Oklahoma City, OK 73102
s. Orlando Utilities Commission
Attn: Zoila P. Easterling, Esq.
Deputy General Counsel
P.O. Box 3193
Orlando, Florida 32802
t. Jackson Electric Membership Corporation
Attn: Roy E. Manoll, III, Esq.
Forston, Bentley & Griffin, P.A.
2500 Daniell's Bridge Road
Building 200, Suite 3A
Athens, Georgia 30606
u. PSEG Long Island
Attn: Kevin McKiernan
15 Park Drive
Melville, New York 11747
v. The Cleveland Electric Illuminating Company
Ohio Edison Company
Pennsylvania Power Company
West Penn Power Company
Monongahela Power Company
Potomac Edison Company
Metropolitan Edison Company
Jersey Central Power & Light Company
Pennsylvania Electric Company
Attn: Kathy M. Hofacre
FirstEnergy Corp.
76 S. Main St., A-GO-15
Akron, OH 44308
w. Boston Gas Company
Colonial Gas Cape Cod
KeySpan Energy Delivery Long Island
KeySpan Energy Delivery New York
Massachusetts Electric Company
Narragansett Electric Company
Niagara Mohawk Power Corporation
Attn: Christopher S. Aronson
Senior Counsel
National Grid
40 Sylvan Road
Waltham, MA 02451
x. Tampa Electric Company
Peoples Gas System
Attn: Barbara Taulton FRP, CAP
Florida Registered Paralegal
Tampa Electric Company
702 N. Franklin Street
Tampa, FL 33602
y. Symmetry Energy Solutions, LLC
f/k/a CenterPoint Energy Services, Inc.
Attn: Debora Churches
1111 Louisiana Street, B-241
Houston, Texas 77002
The nature and the amount of claims (interests) of the Utilities,
and the times of acquisition thereof are as follows:
(a) The following Utilities have unsecured claims against the
above-referenced Debtors arising from prepetition utility usage:
American Electric Power, Symmetry Energy Solutions, LLC f/k/a
CenterPoint Energy Services, Inc., CenterPoint Energy Resources
Corp., Constellation NewEnergy, Inc., Constellation NewEnergy –
Gas Division, LLC, Consolidated Edison Company of New York, Inc.,
Orange and Rockland Utilities, Inc., The Connecticut Light & Power
Company, Yankee Gas Services Company, NStar Electric Company,
Western Massachusetts, NStar Electric Company, Eastern
Massachusetts, Public Service Company of New Hampshire, New York
State Electric and Gas Corporation, Rochester Gas & Electric
Corporation, Central Maine Power Company, Sacramento Municipal
Utility District, Oklahoma Gas and Electric Company, Orlando
Utilities Commission, Jackson Electric Membership Corporation, PSEG
Long Island, The Cleveland Electric Illuminating Company, Ohio
Edison Company, Pennsylvania Power Company, West Penn Power
Company, Monongahela Power Company, Potomac Edison Company,
Metropolitan Edison Company, Jersey Central Power & Light Company,
Pennsylvania Electric Company, Boston Gas Company, Colonial Gas
Cape Cod, KeySpan Energy Delivery Long Island, KeySpan Energy
Delivery New York, Massachusetts Electric Company, Narragansett
Electric Company and Niagara Mohawk Power Corporation.
(b) American Electric Power, Arizona Public Service Company,
Florida Power & Light Company, Georgia Power Company, Gulf Power
Company, Baltimore Gas and Electric Company, Delmarva Power & Light
Company, Salt River Project, San Diego Gas and Electric Company,
Virginia Electric and Power Company d/b/a Dominion Energy Virginia,
The Potomac Electric Power Company and Tampa Electric Company hold
surety bonds that they will make claims upon for payment of the
prepetition debt that the Debtors owe to those Utilities.
(c) Commonwealth Edison Company, PECO Energy Company and
Peoples Gas System held prepetition deposits that secured all
prepetition debt.
(d) For more information regarding the claims and interests of
the Utilities in these jointly-administered cases, refer to the
Motion and Memorandum of Certain Utility Companies To: (A) Vacate,
and/or Reconsider, and/or Modify Order (I) Approving the Debtors’
Proposed Adequate Assurance of Payment for Future Utility Services,
(II) Prohibiting Utility Providers from Altering, Refusing, or
Discontinuing Services, (III) Approving the Debtors’ Proposed
Procedures for Resolving Additional Assurance Requests, (IV)
Authorizing Certain Fee Payments for Services Performed, and (V)
Granting Related Relief; and (B) Seek Adequate Assurance of Payment
(Docket No. 486) filed in the above-captioned,
jointly-administered, bankruptcy cases.
Sussman & Moore, LLP was retained to represent the foregoing
Utilities in May 2020. The circumstances and terms and conditions
of employment of the Firm by the Companies is protected by the
attorney-client privilege and attorney work product doctrine.
The Firm can be reached at:
Weldon L. Moore, III, Esq.
SUSSMAN & MOORE, L.L.P.
4645 N. Central Expressway, Ste. 300
Dallas, TX 7520
Telephone: (214) 378-8270
E-mail: wmoore@csmlaw.net
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/4gCwiu
About J.C. Penney
J.C. Penney Corporation, Inc., is an American retail company,
founded in 1902 by James Cash Penney and today engaged in marketing
apparel, home furnishings, jewelry, cosmetics, and cookware. The
company was called J.C. Penney Stores Company from 1913 to 1924,
when it was reincorporated as J.C. Penney Co.
On May 15, 2020, JCPenney announced that it has entered into a
restructuring support agreement with lenders holding 70% of
JCPenney's first lien debt. The RSA contemplates agreed-upon terms
for a pre-arranged financial restructuring plan that is expected to
reduce several billion dollars of indebtedness. To implement the
Plan, the Company and its affiliates on May 15, 2020, filed
voluntary petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182).
Kirkland & Ellis LLP is serving as legal advisor, Lazard is
serving
as financial advisor, and AlixPartners LLP is serving as
restructuring advisor to the Company. Prime Clerk is the claims
agent, maintaining the page http://cases.primeclerk.com/JCPenney
JC PENNEY: Fitch Withdraws 'D' LT IDR on Bankruptcy Filing
----------------------------------------------------------
Fitch Ratings has withdrawn the 'D' Long-Term Issuer Default
Ratings for J.C. Penney, Inc. and J.C. Penney Corporation, Inc.
Given J.C. Penney's Chapter 11 filing on May 15, 2020, Fitch will
no longer provide ratings or analytical coverage for the company.
Withdrawal following the company's filing for Chapter 11
Bankruptcy.
KEY RATING DRIVERS
Not Applicable.
RATING SENSITIVITIES
Rating sensitivities are not applicable as the ratings are being
withdrawn.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
J. C. Penney Company, Inc.
- LT IDR WD; Withdrawn
J.C. Penney Corporation, Inc.
- LT IDR WD; Withdrawn
- Senior unsecured; LT WD; Withdrawn
- Senior Secured 2nd Lien; LT WD; Withdrawn
- Senior secured; LT WD; Withdrawn
- Senior secured; LT WD; Withdrawn
JOHN VARVATOS: July 15 Auction of Substantially All Assets Set
--------------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District
of Delaware authorized the bidding procedures of John Varvatos
Enterprises, Inc. and its affiliates in connection with the sale of
substantially all assets to Lion/Hendrix Cayman Limited for $76
million credit bid, subject to overbid.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: July 13, 2020 at 5:00 p.m. (ET)
b. Initial Bid: The Purchase Price must include an amount of
cash consideration at closing that exceeds the aggregate sum of the
following: (i) the $76 million credit bid (unless otherwise reduced
for cause by the Court) plus the Payoff Amount; and (ii) the
minimum bid increment of $250,000.
c. Deposit: 10% of the cash portion of the Purchase Price
being bid
d. Auction: The Auction will commence on July 15, 2020 at
10:00 a.m. (ET) at the offices of Morris Nichols Arsht & Tunnell,
LLP, 1201 N. Market Street, Wilmington, DE 19801, or on such other
date and/or at such other location as determined by the Debtors, in
consultation with the Consultation Parties. In light of the
current COVID-19 pandemic, the Debtors may determine that the
Auction will be held virtually.
e. Bid Increments: $250,000
f. Sale Hearing: July 17, 2020 at 10:30 a.m. (ET)
g. Sale Objection Deadline: July 13, 2020 at 5:00 p.m. (ET)
Any sale or transfer of the Purchased Assets will be on an "as is,
where is" basis and without representations or warranties of any
kind by the Debtors, their agents or the Debtors' chapter 11
estates, except and solely to the extent expressly set forth in a
final purchase agreement approved by the Court as the Successful
Bid.
The Debtors are authorized to perform all of their respective
pre-closing obligations under the Stalking Horse Purchase
Agreement, and such obligations will be binding upon the Debtors.
The Sale Notice is approved. Within three days of the entry of the
Order, the Debtors will cause the Sale Notice to be served upon all
the Sale Notice Parties.
The procedures regarding the proposed assumption and assignment of
certain Contracts and Leases that may be designated to be assumed
by the Debtors and assigned to the Contract Party (or the
Successful Bidder selected at the Auction, if any) in connection
with the sale of the Purchased Assets are approved.
The Cure Notice is approved. The date that is 21 days prior to the
Sale Objection Deadline, the Debtors will file with the Court and
serve the Cure Notice on all non-Debtor counterparties to Contracts
and Leases, and their respective known counsel, and provide a copy
of same to the Contract Party and the Stalking Horse.
The Debtors will serve on affected counterparties and their
respective known counsel no later than 21 days prior to the Sale
Objection Deadline the Adequate Assurance Information provided by
the Stalking Horse for the Contracts and Leases. No later than one
Business Day after the Bid Deadline, the Debtors will serve on
affected counterparties and their respective known counsel the
Adequate Assurance Information provided by each Qualified Bidder.
During the 30 days after the closing of the Sale, and subject to
the terms and conditions set forth in the Successful Bidder
Purchase Agreement, the Successful Bidder will have the right,
which right may be exercised at any time and from time to time, to
provide written notice to the Debtors of the Successful Bidder's
election to require the Debtors to assume the Contract(s) or
Lease(s) identified in the subject Assumption Notice(s) and assign
same to the Successful Bidder's designee.
Except as otherwise provided in the Order and in the Bidding
Procedures, Local Rule 6004- 1(c)(ii) is waived.
The Stalking Horse has standing to enforce the terms of the Order
and the Debtors' pre-closing obligations under the Stalking Horse
Purchase Agreement, and in each case, the automatic stay set forth
in section 362 of the Bankruptcy Code is waived to the extent
necessary to permit enforcement thereof.
The Order will be immediately effective and enforceable upon its
entry.
A copy of the Bidding Procedures is available at
https://tinyurl.com/ydx2l5sr from PacerMonitor.com free of charge.
About John Varvatos Enterprises
John Varvatos Enterprises, Inc. is an American international luxury
men's lifestyle brand founded by fashion designer John Varvatos in
1999. It operates retail stores in the United States and other
countries worldwide. It sells, manufactures and designs fashion
products for men such as sweaters, knits, tees, tailored clothing,
jeans, pants, jackets, and accessories.
John Varvatos Enterprises generates revenue through the sale of
merchandise through department store and specialty wholesale
distribution, a transactional globally accessible website, and its
27 brick and mortar retail locations.
John Varvatos Enterprises, Inc. and its affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 20-11043) on May 6,
2020.
John Varvatos Enterprises was estimated to have $10 million to $50
million in assets and $100 million to $500 million in liabilities
as of the bankruptcy filing.
The Hon. Mary F. Walrath is the case judge.
The Debtors tapped Morris, Nichols, Arsht & Tunnell LLP as counsel;
Clear Thinking Group as financial advisor; MMG Advisors, Inc. as
investment banker; and Omni Agent Solutions as claims agent.
KARISCOM LLC: Seeks to Hire Politan Law as Special Counsel
----------------------------------------------------------
Kariscom, LLC, seeks approval from the U.S. Bankruptcy Court for
the District of Arizona to hire Politan Law Firm, PLLC as its
special counsel for general corporate work.
The counsel will be paid as follows:
Attorneys $385 per hour
Paralegals $125 per hour
John R. Politan, Esq., a member at Politan Law, assures the Court
that the Firm does not hold nor represent an adverse interest to
the Debtor or the estate and is disinterested under 11 U.S.C.
Section 101(14).
The Firm can be reached at:
John R. Politan, Esq.
POLITAN LAW, LLC
5122 E. Waggoner Rd.
Scottsdale, AZ 85254
Tel: 602-321-5382
About Kariscom LLC
Kariscom, LLC, d/b/a VeraPax -- https://www.verapax.com/ -- is an
online- based marketing company that provides a wide variety of
services for all printing needs. It prints banners, flyers,
postcards, brochures, graphic design, stickers, business cards,
short run posters, and booklets/magazines.
Kariscom, LLC, based in Scottsdale, Ariz., filed a Chapter 11
petition (Bankr. D. Ariz. Case No. 20-02878) on March 18, 2020. In
the petition signed by Heather Lisciarelli, president, Debtor
disclosed $364,572 in assets and $1,154,964 in liabilities. Judge
Madeleine C. Wanslee presides over the case. D. Lamar Hawkins,
Esq., at Guidant Law, PLC, is Debtor's bankruptcy counsel.
LIBBEY GLASS: U.S. Trustee Appoints Creditors' Committee
--------------------------------------------------------
The U.S. Trustee for Region 3 and 9 appointed a committee to
represent unsecured creditors in the Chapter 11 cases of Libbey
Glass, Inc. and its affiliates.
The committee members are:
1. Pension Benefit Guaranty Corp.
Attn: Cynthia Wong
1200 K Street, NW
Washington, DC 20005
Phone: (202) 229-3033
Fax: (202) 842-2643
Email: wong.cynthia@pbgc.gov
2. United Steelworkers (USW)
Attn: David Jury
60 Boulevard of the Allies
Pittsburgh, PA 15222
Phone: (412) 562-2545
Fax: (412) 562-2574
Email: djury@usw.org
3. Pratt Corrugated Holdings, Inc.
Attn: Al Fennell
1800-C Sarasota Business Pkwy
Conyers, GA 30013
Phone: (678) 562-4552
Fax: (678) 806-4843
Email: afennell@prattindustries.com
4. Packaging Corp. of America
Attn: Jack Mauro
1 North Field Court
Lake Forest, IL 60045
Phone: (847) 482-2134
Fax: (847) 440-5498
Email: JMauro@Packagingcorp.com
5. A.A. Boos & Sons, Inc.
Attn: Cheryl Koeniger
2015 Pickle Road
Oregon, OH 43616
Phone: (419) 691-2329
Fax: (419) 691-2057
Email: CherylKoeniger@aaboos.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 Libbey Inc.
Based in Toledo, Ohio, Libbey Inc. (NYSE American: LBY) is one of
the largest glass tableware manufacturers in the world. Libbey
Inc. 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. In 2019, Libbey
Inc.'s net sales totaled $782.4 million. For more information,
visit http://www.libbey.com/
Libbey Glass Inc. and 11 of its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-11439) on June 1, 2020.
In the petition signed by CEO Michael P. Bauer, Libbey Glass was
estimated to have $100 million to $500 million in assets and $500
illion to $1 billion in liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the case judge.
Debtors tapped Latham & Watkins LLP and Richards, Layton & Finger,
P.A., as counsel; Alvarez & Marsal North America, LLC as
financial advisor; and Lazard Ltd as investment banker. Prime
Clerk LLC is the claims agent, maintaining the page
https://cases.primeclerk.com/libbey
LVI INTERMEDIATE: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed a committee to
represent unsecured creditors in the Chapter 11 cases of LVI
Intermediate Holdings, Inc. and its affiliates.
The committee members are:
1. Sensis, Inc.
Attn: Jose Villa
818 South Broadway, Suite 100
Los Angelis, CA 90041
Phone: 213-341-0171
Email: jrvilla@sensisagency.com
2. Oasis Medical
Attn: Matt Krall
514 S. Vermont Avenue
Glendora, CA 91741
Phone: 909-305-5400
Email: mkrall@oasismedical.com
3. Rosenberg Media
Attn: Jay Rosenberg
14413 Autumn Branch Terrace
Boyds, MD 20841
Phone: 301-793-4257
Email: jay@rosenbergmedia.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 LVI Intermediate Holdings
Headquartered in West Palm Beach, Fla., LVI Intermediate Holdings
(doing business as Vision Group Holdings) develops and manages
through its various subsidiaries two of the leading LASIK surgery
brands in the United States: The LASIK Vision Institute and TLC
Laser Eye Centers. It also owns and manages certain select general
ophthalmology practices and QuaslightLasik, a licensed Preferred
Provider Organization for LASIK surgery providers.
LVI Intermediate Holdings, Inc. and its affiliates filed Chapter 11
petitions (Bankr. D. Del. Lead Case No. 20-11413) on May 29, 2020.
The Hon. Karen B. Owens oversees the cases.
In the petition signed by Lisa Melamed, interim chief executive
officer, Debtors were estimated to have $1 million to $10 million
in assets and $100 million to $500 million in liabilities.
Debtors tapped Cole Schotz P.C. as counsel; Alvarez & Marsal
Capital as financial advisor; Raymond James & Associates, Inc. as
investment banker; and Donlin Recano & Company, Inc. as claims and
noticing agent.
MAJESTIC HILLS: U.S. Trustee Appoints Creditors' Committee
----------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 on June 17 appointed a
committee to represent unsecured creditors in the Chapter 11 case
of Majestic Hills, LLC.
The committee members are:
1. Christopher Phillips
c/o Ryan J. Cooney, Esq.
Robert O Lampl Law Office
223 Fourth Ave., 4th Floor
Tel: (412) 392-0330
Fax: (412) 392-0335
E-mail: rcooney@lampllaw.com
2. Douglas Grimes
c/o Robert Dauer, Jr., Esq.
Meyer Unkovic & Scott LLP
535 Smithfield Street, Suite 1300
Pittsburgh, PA 15222
Tel: (412) 456-2800
E-mail: red@muslaw.com
3. Christine Swarek
c/o John Cromer, Esq.
Burke Cromer Cremonese LLC
517 Court Place
Pittsburgh, PA 15219
Tel: (412) 804-3360
Fax: (412) 804-3799
E-mail: jcromer@bccattorneys.com
4. Rajiv Bhatt
c/o John Heurich, Esq.
The Lynch Law Group
501 Smith Drive, Suite #3
Cranberry Township, PA 16066
Tel: (724) 776-8000
Fax (724) 776-8001
E-mail: Jheurich@lynchlaw-group.com
5. PA Soil & Rock, Inc.
Attn: Henri Marcel, Esq.
Deasey, Mahoney & Valentini, Ltd.
1601 Market Street, Suite #3400
Philadelphia, PA 19103
Tel: (215) 587-9400
Fax: (215) 587-9456
E-mail: hmarcel@dmvlawfirm.com
6. NVR, Inc. d/b/a Ryan Homes
Attn: Kathleen Gallagher, Esq.
Porter Wright Morris & Arthur LLP
6 PPG Place, Third Floor
Pittsburgh, PA 15222
Tel: (412) 235-4500
Fax (412) 235-4510
E-mail: kgallagher@porterwright.com
7. Morris Knowles & Assoc., Inc.
Attn: Samuel Simon, Esq.
Houston Harbaugh P.C.
401 Liberty Ave., 22nd Floor
Pittsburgh, PA 15222
Tel: (412) 281-5060
Fax (412) 281-4499
Email: ssimon@hh-law.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 Majestic Hills
Majestic Hills, LLC, a privately held company based in Bridgeville,
Pa., sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D. Pa. Case No. 20-21595) on May 21, 2020. At the time
of the filing, Debtor disclosed assets of between $1 million and
$10 million and liabilities of the same range. Judge Gregory L.
Taddonio oversees the case. The Debtor is represented by Calaiaro
Valencik.
MARUTI REALSTATE: Seeks to Hire Tydings & Rosenberg as Counsel
--------------------------------------------------------------
Maruti Realstate LLC seeks authority from the United States
Bankruptcy Court for the District of Maryland to employ Tydings &
Rosenberg LLP as its attorney.
Maruti requires Tydings to:
a. provide the Debtor with legal advice with respect to its
powers and duties as a Debtor-in-Possession and in the operation of
its business and management of its property;
b. assist the Debtor in the preparation of the schedules, the
statement of financial affairs, and any amendments thereto that the
Debtor may be required to file in this case;
c. represent the Debtor at the section 341 meeting of
creditors;
d. represent the Debtor in defense of proceedings instituted
to reclaim property or to obtain relief from the automatic stay
under § 362(a) of the Bankruptcy Code;
e. prepare any necessary applications, answers, orders,
reports and other pleadings, and appearing on the Debtor's behalf
in proceedings instituted by or against the Debtor;
f. assist with the refinancing/restructuring of the Debtor’s
obligations;
g. assist the Debtor in the preparation of a plan of
reorganization;
h. assist the Debtor with all bankruptcy legal work; and
i. perform all of the legal services for the Debtor that may
be necessary or desirable.
Tydings received the sum of $5,000 as half of the agreed upon
retainer to be applied towards future services rendered and
expenses to be incurred, with another $5,000 retainer balance due
in 30 days, as well as the Chapter 11 filing fee in the amount
$1,717.
Tydings is a "disinterested person" as that term is defined in Sec.
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Alan M. Grochal, Esq.
TYDINGS & ROSENBERG LLP
1 E. Pratt Street, Suite 901
Baltimore, MD 21202
Tel: 410-752-9700
E-mail: agrochal@tydingslaw.com
About Maruti Realstate LLC
Maruti Realstate LLC is primarily engaged in renting and leasing
real estate properties.
Maruti Realstate LLC filed its voluntary petition under Chapter 11
of the Bankruptcy Code (Bankr. D. Md. Case No. 20-15329) on May 18,
2020. The petition was signed by Rajesh Patel, member. At the time
fo filing, the Debtor estimated $1 million to $10 million in both
assets and liabilities. Alan M. Grochal, Esq. at Tydings &
Rosenberg LLP represents the Debtor as counsel.
METHANEX CORP: Moody's Cuts Senior Unsec. Ratings to Ba1
--------------------------------------------------------
Moody's Investors Service downgraded Methanex Corporation's senior
unsecured ratings to Ba1 from Baa3. Moody's concurrently assigned a
Ba1 corporate family rating, a probability of default rating of
Ba1-PD, and a Speculative Grade Liquidity Rating of SGL-2 to
Methanex. The outlook remains to negative.
"The downgrade of Methanex to Ba1 reflects its expectation of high
leverage through 2021, driven by the current severe drop in
methanol prices, with an uncertain pace of improvement in prices
and cash flow in 2021," said Paresh Chari, Moody's analyst. "The
company will also have significant negative free cash flow that
will erode its sizeable cash balance."
Downgrades:
Issuer: Methanex Corporation
Senior Unsecured Regular Bond/Debenture, Downgraded to Ba1 (LGD4)
from Baa3
Senior Unsecured Shelf, Downgraded to (P)Ba1 from (P)Baa3
Assignments:
Issuer: Methanex Corporation
Corporate Family Rating, Assigned to Ba1
Probability of Default Rating, Assigned to Ba1-PD
Speculative Grade Liquidity Rating, Assigned SGL-2
Outlook Actions:
Issuer: Methanex Corporation
Outlook, Remains Negative
RATINGS RATIONALE
Methanex's Ba1 CFR is supported by its 1) significant market share
as a global leader for methanol production; 2) geographic diversity
with logistical infrastructure including a company-leased fleet of
vessels that supports selling high volumes of methanol globally;
and 3) cost-advantaged natural gas for its North American
facilities. The rating is constrained by its 1) leverage that will
increase to over 10x in 2020 and 6x in 2021; 2) single commodity
product that exposes the company to the volatile pricing and demand
in the methanol market; 3) significant negative free cash flow in
2020 that will erode it sizeable cash balance; and 4) uncertain
natural gas feedstock supply for the Trinidad Titan facility.
As a result of weak methanol pricing, the company reduced its
dividend by 90% and deferred spending on its Geismar 3 (G3) project
to reduce negative free cash flow, and amended financial covenants
to improve liquidity. Methanex also idled production at two plants
to reduce supply into the market. These decisive steps will enable
the company to maintain good liquidity and somewhat improve
leverage metrics in 2021.
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 methanol
industry has been one of the sectors most significantly affected by
the shock given its sensitivity to demand and oil prices. More
specifically, the weaknesses in Methanex's credit profile have left
it vulnerable to shifts in market sentiment in these unprecedented
operating conditions and Methanex remains vulnerable to the
outbreak continuing to spread and oil prices remaining weak.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. Its action reflects the impact on Methanex of the
breadth and severity of the shock, the broad deterioration in
credit quality it has triggered, and high-level lingering
uncertainty.
Methanex has good liquidity. At March 31, 2020 Methanex had about
$823 million of cash and no availability under its revolving credit
facility that matures in 2024. The company has a committed $800
million construction bank facility (due 2024) to build the G3 plant
that can be used for up to 70% for incurred construction costs of
which $136 million was drawn in March 2020. Moody's expects about
$450 million of negative free cash flow through Q1 2021, which will
be funded with cash and construction bank facility drawings.
Moody's expects Methanex to remain in compliance with its two
financial covenants through this period. Methanex's nearest debt
maturity is a $250 million senior unsecured note due March 2022.
Methanex's senior unsecured notes are rated Ba1, the same as the
CFR because unsecured debt represents the preponderance of
liabilities in the capital structure.
The negative outlook reflects its expectation that leverage will
remain elevated through 2021, and that sizable cash balances will
decline due to negative free cash flow.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if debt to EBITDA was likely to be
sustained below 2.5x (Mar-20 LTM 6.4x) and retained cash flow to
debt above 25% (Mar-20 LTM 9%). Also, an upgrade would require that
the company be able to generate consistent positive free cash flow
over most of the cycle and the expectation that leverage in the
trough of the cycle would not exceed 4.0x for more than two or
three quarters.
The ratings could be downgraded if debt to EBITDA was likely to be
sustained above 3.0x (Mar-20 LTM 6.4x) and retained cash flow to
debt was below 20% (Mar-20 LTM 9%) over most of the cycle. Moody's
could also downgrade the company if liquidity fell below $400
million ($823 million at Q1 2020) or if leverage in the trough of
the cycle exceeded 5.0x for more than two or three quarters.
Methanex, based in Vancouver, British Columbia, is one of the
largest merchant producers of methanol in the world, its only
product.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
MIDTOWN CAMPUS: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
Midtown Campus Properties, LLC, according to court dockets.
About Midtown Campus
Midtown Campus Properties, LLC, is a single asset real estate that
owns the Midtown Apartments. The Midtown Apartments is a 310-unit
student housing apartment complex currently under construction at
104 NW 17th St in Gainesville Florida, just across the University
of Florida. It consists of a six-story main building, parking
garage for resident and public use, and commercial retail space.
Each unit includes a full-size kitchen, carpet, tile and hardwood
floors and be fully furnished. It is located near several Midtown
bars and restaurants frequented by students, and just a couple
minutes' walk from Ben Hill Griffin Stadium.
On May 8, 2020, Midtown Campus Properties sought Chapter 11
protection (Bankr. S.D. Fla. Case No. 20-15173). It was estimated
to have $50 million to $100 million in assets and liabilities as of
the bankruptcy filing. The Hon. Robert A. Mark is the presiding
judge.
The Debtor tapped Genovese Joblove & Battista, P.A. as bankruptcy
counsel; Becker & Poliakoff, P.A. as special counsel; and
KapilaMukamal LLC as financial advisor.
MORGAN STANLEY 2018-H3: Fitch Affirms B- on Class G-RR Certs
------------------------------------------------------------
Fitch Ratings has affirmed 16 classes and revised an outlook of one
class of Morgan Stanley Capital I Trust commercial mortgage
pass-through certificates, series 2018-H3.
MSC 2018-H3
- Class A-1 61767YAU4; LT AAAsf; Affirmed
- Class A-2 61767YAV2; LT AAAsf; Affirmed
- Class A-3 61767YAX8; LT AAAsf; Affirmed
- Class A-4 61767YAY6; LT AAAsf; Affirmed
- Class A-5 61767YAZ3; LT AAAsf; Affirmed
- Class A-S 61767YBC3; LT AAAsf; Affirmed
- Class A-SB 61767YAW0; LT AAAsf; Affirmed
- Class B 61767YBD1; LT AA-sf; Affirmed
- Class C 61767YBE9; LT A-sf; Affirmed
- Class D 61767YAC4; LT BBB-sf; Affirmed
- Class E-RR 61767YAE0; LT BBB-sf; Affirmed
- Class F-RR 61767YAG5; LT BB-sf; Affirmed
- Class G-RR 61767YAJ9; LT B-sf; Affirmed
- Class X-A 61767YBA7; LT AAAsf; Affirmed
- Class X-B 61767YBB5; LT AA-sf; Affirmed
- Class X-D 61767YAA8; LT BBB-sf; Affirmed
KEY RATING DRIVERS
Increased Loss Expectations: Despite a majority of the pool
exhibiting relatively stable performance, loss expectations have
increased since issuance primarily due to an increase in Fitch
Loans of Concern and coronavirus related performance concerns.
Fitch identified six loans (11.2%) as FLOCs, including three (9.3%)
in the top 15. While no loans have yet transferred to special
servicing there are three loans (7.5%) classified as 30 days
delinquent including two in the top 15. As of the May 2020
distribution period, there are six (8.9%) loans on the servicer's
watchlist for delinquency, low debt service coverage ratio,
upcoming lease expirations and delinquent financial reporting.
Minimal Change in Credit Enhancement: Credit Enhancement has had
minimal change since issuance due to limited amortization, no loan
payoffs and no defeasance. As of the May 2020 distribution period,
the pool's aggregate balance has been paid down by .66% to $1.017
billion from $1.024 billion at issuance. There are 27 loans (54.3%
of the pool) that are full-term, interest only and 21 loans (23.2%)
that are partial interest only. Based on the scheduled balance at
maturity, the pool will pay down by 6.4%, which is below the YTD
2018 average of 7.4% and the 2017 average of 7.9%.
Exposure to Coronavirus: Eight loans (13.7% of pool), which have a
weighted average NOI DSCR of 2.07x, are secured by hotel
properties. Thirteen loans (15.6%), which have a weighted average
NOI DSCR of 1.93x, are secured by retail properties. Fitch's base
case analysis applied additional stresses to eight hotel loans and
four retail loans given the significant declines in property-level
cash flow in the short term as a result of the decrease in travel
and tourism and property closures from the coronavirus pandemic.
These additional stresses contributed to the Outlook revision on
class F-RR.
Fitch Loans of Concern:
Shoppes at Chino Hills (3.9%) is secured by a 378,500-sf lifestyle
center located in Chino Hills, CA, approximately 35 miles east of
Los Angeles. The loan is 30 days delinquent as of the May 2020
distribution date. As of the March 2020 rent roll, the property was
93% occupied, down from 96% at YE 2019. The servicer reported NOI
DSCR was 1.62x as of YE 2019. Approximately 27% of the NRA has
leases scheduled to expire in 2021, including two of the four
largest tenants; Jacuzzi Brands (9% NRA) and Old Navy (4% NRA).
Crowne Plaza Dulles Airport (2.9%) is a full-service hotel located
in Herndon, VA. This loan has been flagged as a FLOC given the
potential for significant decline in property performance as a
result of the coronavirus pandemic. As of YE 2019 subject occupancy
and NOI DSCR were 68% and 1.70x, respectively.
55 Miracle Mile (2.5%) is a mixed-use Retail/Office property
located in Coral Gables, FL. The loan is 30 days delinquent as of
the May 2020 distribution date. Property occupancy has been
volatile since issuance as occupancy fell to 66% as of YE 2019 from
96.5% in May 2018 due to three tenants breaking their lease prior
to lease expiration. Per the subject's March 2020 rent roll,
occupancy improved to 75.9%. Gramercy (NRA 9.8%) lease commenced in
March 2020 and paid $40.00 psf in annual base rent. Meridian's (NRA
7.2%) lease is scheduled to expire in July 2020 and pays $36.02 psf
in annual base rent. Fitch has inquired to the master servicer
regarding recent leasing activity and potential tenants. Fitch has
not received a response.
The remaining three FLOCs (1.8%) are all outside of the top 15.
Prince and Spring Street Portfolio (1.1%) is a portfolio of three
retail/multifamily properties located in the NoLita neighborhood of
Manhattan, just east of SoHo. As of the May 2020 distribution date,
Prince and Spring Street Portfolio was 30 Days delinquent. Arella
Self-Storage (.4%) is a self-storage property located in Houston,
TX. Loan is on the watchlist due to low DSCR. YE 2019 NOI DSCR was
.85x from 1.42x at bank underwriting at issuance. Brittmoore
Industrial Bldg A and H (.57%) is an industrial property located in
Houston, TX. Three leases comprising 31% of subject NRA are
scheduled to expire between January and September 2020.
RATING SENSITIVITIES
The Stable Outlooks on classes A-1 through E-RR reflect the overall
stable performance of the pool and expected continued amortization.
The Negative Outlooks on class F-RR and G-RR reflect performance
concerns with hotel and retail properties due to the slowdown in
economic activity related to the coronavirus pandemic as well as
the underperformance of the pool's FLOCs. Downgrades of these two
classes of one category or more are possible if FLOCs default or
performance recovery is not considered likely.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Factors that lead to upgrades would include stable to improved
asset performance coupled with pay down and/or defeasance. Upgrades
to classes B, C and X-B would likely occur with significant
improvement in CE and/or defeasance; however, adverse selection and
increased concentrations and further underperformance of the FLOC
or loans expected to be negatively impacted by the coronavirus
pandemic could cause this trend to reverse. Upgrades to classes D,
E-RR, X-D would also take into account these factors, but would be
limited based on sensitivity to concentrations or the potential for
future concentration. Classes would not be upgraded above 'Asf' if
there were likelihood for interest shortfalls. An upgrade to
classes F-RR and G-RR are not likely until the later years in a
transaction and only if the performance of the remaining pool is
stable and/or properties vulnerable to the coronavirus return to
pre-pandemic levels, and there is sufficient CE to the class.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Factors that lead to downgrades include an increase in pool level
losses from underperforming or specially serviced loans. Downgrades
to the 'Asf', 'AAsf' and 'AAAsf' categories are not likely due to
the position in the capital structure, but may occur at the 'AAsf'
and 'AAAsf' categories should interest shortfalls occur. Downgrades
to classes D, E-RR and X-D would occur should overall pool losses
increase and/or one or more large loans have an outsized loss,
which would erode CE. Downgrades to classes, F-RR and G-RR would
occur should loss expectations increase due to an increase in
specially serviced loans and/or the loans vulnerable to the
coronavirus pandemic not stabilize.
In addition to its baseline scenario related to the coronavirus,
Fitch also envisions a downside scenario where the health crisis is
prolonged beyond 2021; should this scenario play out, Fitch expects
that a greater percentage of classes may be assigned a Negative
Rating Outlook or those with Negative Rating Outlooks will be
downgraded one or more categories.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
No third-party due diligence was provided or reviewed in relation
to this rating action.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
NEP GROUP: Fitch Rates New $100MM Incremental First Lien Loan 'B'
-----------------------------------------------------------------
Fitch Ratings has affirmed the 'B-' Issuer Default Ratings of NEP
Group, downgraded the first lien secured issue level ratings by
one-notch, and affirmed the second-lien secured issue level
ratings. Fitch has removed the Rating Watch Negative on NEP's
rating, and assigned a Negative Rating Outlook. Fitch has also
assigned a 'B'/'RR3' to the company's new $100 million incremental
first lien secured term loan and $25 million first lien secured
delayed draw term loan facility, which are co-borrowed by NEP
Group, Inc., NEP/NCP Holdco, Inc., and NEP II, Inc.
The rating actions reflect Fitch's expectations for NEP Group's
cash flow profile to gradually normalize as live sports broadcasts
return across major sports leagues. Fitch views the incremental
term loan issuance and delayed draw term loan commitment positively
in the near term, as the facilities will bolster liquidity to
support debt service and operations in NEP's return to a more
normalized state. However, the incremental term loan and delayed
draw term loan weaken Fitch's expectations for recovery on the
first-lien secured tranche, resulting in a lower recovery rating of
'RR3' and a one-notch downgrade of the existing first-lien debt
issues.
The resolution of the Rating Watch Negative reflects Fitch's view
that the majority of professional sports leagues will return to
action between May and July, which will provide sufficient live
events volume and cash flow for NEP Group to fund operations and
debt service internally. The Negative Outlook reflects the
continued uncertainty surrounding the resumption of the NBA and NHL
seasons, ongoing negotiations regarding the 2020 MLB season, and
how governments and professional sports leagues may respond to a
second spike in Covid-19 cases.
Fitch expects revenue, profitability, and credit protection metrics
to be materially weaker in 2020, however, Fitch expects a fairly
sharp recovery for NEP's broadcast solutions and media solutions
segments in 2021, as these businesses are unaffected by social
distancing measures or audience-free sports events, and in some
instances will provide NEP Group with additional value creation
opportunities. Fitch expects NEP Group's live events segment to
continue experiencing significant headwinds through 2021, as Fitch
believes the likelihood of large-scale concerts and other
audience-driven events resuming is low until a COVID-19 vaccine
becomes widely available. Fitch's base case does not incorporate a
second wave of shutdowns across professional sports leagues.
KEY RATING DRIVERS
Coronavirus Related Event Cancellations: In March 2020, effectively
all professional sports and live events were halted in response the
coronavirus pandemic. The pause in live events had a direct
material negative impact on NEP Group, which reversed positive cash
flow trends and pressured liquidity. Most professional sports
leagues have since agreed to a plan to resume play, excluding the
MLB. This provides NEP with a path towards normalization. The
incremental term loan raise combined with the return to action of
several professional sports league have eased Fitch's concerns
around near-term liquidity. However, Fitch believes a second wave
of live sports cancellations would negatively impact liquidity, The
Negative Outlook incorporates this ongoing risk and uncertainty.
Fitch notes that its current forecast does not contemplate a second
wave of shutdowns.
Fitch expects cancelled events, reduced match counts across
professional leagues, and approximately three months of inactivity
to have a significant financial impact on 2020 metrics; however,
Fitch expects these trends to largely reverse in 2021, aside from
the live events segment, which will likely see sustained
headwinds.
Leading Market Position: Fitch's ratings incorporate NEP's position
as the largest global outsourced provider of production solutions
for broadcasts and live events. NEP provides the broadcast
equipment, post production, video display and software-based
creative technology to the largest live sports and entertainment
events including the NFL, ESPN, Super Bowl, Wimbledon, The Grammys,
and the Oscars. NEP's asset and global client base enables the
company to sustain a competitive advantage. The company estimates
their broadcast services segment to be 8.0x the size of the next
largest competitor; however, is of similar size to peers operating
in the live events space.
Aggressive Acquisition Strategy: NEP's growth is characterized by
strategic acquisitions, an important component to its growth
strategy. The company targets market leaders to penetrate a new
market and expand its global footprint and uses bolt-ons to expand
its suite of services in an established geography. For the first
three quarters of 2019, the company closed on four acquisitions
with an aggregate purchase price of approximately $125 million and
incremental EBITDA of $21 million. Fitch expects NEP to delay M&A
activity until its financial and operational profile have
normalized. Thereafter, Fitch expects NEP may be highly acquisitive
will have opportunities to acquire weaker and worse capitalized
competitors at favorable valuations.
Capital Intensive Nature: NEP has historically operated at a
capital intensity level of approximately 20%. Most of capex is
associated with new contract wins, making it success-based and tied
to revenue and cash flow growth. Upfront capex is required at
contract signing and the company targets a payback period of two
years for live events given their shorter-term nature and four
years for broadcast services. While the company generally
depreciates assets over a six to seven-year period, it is able to
repurpose equipment past its depreciable asset life for second and
third-tier events.
Leveraged Capital Structure: Management has guided to a
medium-to-longer term gross leverage target of 5.0x; however,
prioritizes global expansion and growth through acquisitions. Fitch
recognizes that any future acquisition activity may slow the
company's delevering plan as debt repayment is a secondary goal.
Historically, the company has a track record of successfully
delevering post-acquisitions through EBITDA growth. Fitch expects
leverage metrics to be significantly elevated in the near term
stemming from the coronavirus pandemic. Fitch expects gross
leverage to fall near 8.0x by the end of 2021, and expects
continued deleveraging thereafter as demand in the live events
segment returns.
Strong Revenue and Cash Flow Visibility: A significant portion of
NEP's revenues are derived from long-term contracts with clients
and generally range from three to 10 years with approximately 3%
price escalators built in and a "take or pay" arrangement. The
contracts are all event-based and cover specific events that recur
annually or throughout the year. The longer-term sports contracts
tend to be co-terminous with a network's broadcast rights for that
particular sport, while the entertainment events are shorter-term
in nature. 75% of the revenue is recurring while most of the other
25% is typically predictable due to live events. The contractual
nature of revenues provides strong visibility and stability of
future cash flows. During the coronavirus pandemic, NEP was unable
to provide contracted services as events were widely cancelled or
postponed, and NEP will not collect on contracts until services
have been rendered.
Large and Growing End Markets: NEP focuses on the sports and
entertainment markets, both of which have demonstrated consistent
growth for a number of years, but will be pressured in the near
term as the coronavirus outbreak continues. Live sports programming
remains one of the few opportunities for broadcast and cable
networks to generate large viewing audiences in an increasingly
fragmented media landscape. There continues to be an increase in
value for sports rights, sports-dedicated channels and hours spent
watching sports content. On the live events side, there has been a
surge in number of tours as artists compensate for a loss in
recorded music revenue. Additionally, unscripted programming has
remained largely resilient to time-shifted and OTT viewing.
DERIVATION SUMMARY
The 'B-' IDR for NEP incorporates the company's weakened liquidity
caused by the economic and social responses to the coronavirus
pandemic.
The 'B-' IDR also reflects the elevated leverage profile pro forma
for debt-funded acquisitions completed in 2019 and for incremental
debt raises in June 2020. Fitch expects leverage and FCF deficits
in the near term to be exacerbated by the number of cancelled live
events and professional sports events. Fitch notes that as live
event and professional sporting activities eventually resume,
leverage and cash outflows should moderate.
NEP's heavier cash interest burden driven by the 2019 refinancing
of the credit facilities and incremental term loans in 2020 will
depress FCF in a steady operating environment. While the company's
capex requirements are high, Fitch highlights that capex is largely
success-based and funnels into future revenues and cash flows. The
ratings also incorporate NEP's ability to generate meaningful
organic revenue growth driven by new contract wins, 75% of which
come from new events and 25% from competition. The contractual
nature of NEP's revenues drives strong cash flow visibility and
stability in a steady operating state. Contracts range between
three to 10 years with approximately 3% price escalators built in
and a take-or-pay nature.
NEP is 8.0x the size of its next largest competitor on the
broadcast solutions side and of comparable size to peers operating
in the U.S. live events business. Fitch notes that the company has
gained first-mover advantage in many of the markets abroad where
only small local players are present, providing strong
defensibility and high barriers to entry.
Additionally, Fitch believes the generally non-cyclical nature of
the live events and sports broadcasting industries support the
rating. Fitch acknowledges the current environment as a one-time
event caused by an exogenous shock. Artists have become
increasingly reliant on touring to make up for loss from album
sales and sports broadcasting rights continues to gain in value.
Fitch generally maintains a positive view of NEP's concentration to
sports and live events programming as this type of programming
should continue to deliver an aggregation of mass audience in a
media ecosystem that has become increasingly fragmented once
concerns of the virus outbreak have eased. Fitch does not rate any
of NEP's direct competitors.
KEY ASSUMPTIONS
- Fitch forecasts severe revenue declines in 1H20, as live
sports, media production and other live events are broadly
cancelled or postponed between March-June. Fitch expects some
recovery in 2H20, as some postponed events are pushed to 3Q and 4Q,
and other events require additional trucks to ensure safer working
environments. Fitch forecasts total 2020 revenue to be down
approximately 26%, driven primarily by continued headwinds in the
live events segment.
- Fitch expects 2020 EBITDA to be down substantially from 2019
levels, attributable to significant cash outflows in 2Q20,
sustained headwinds in the live events segments, and an overall
lower volume of live events coverage.
- Fitch expects broadcast and media solutions segments to recover
lost revenue and EBITDA in 2021, and incur some incremental benefit
from the Tokyo Olympics which were postponed to 2021. Fitch expects
the live events segment to experience sustained headwinds through
2021 as concerts and audience-based events continue to be
prohibited in several jurisdictions. Fitch forecasts live events to
return to a normalized revenue and EBITDA profile in 2022.
- Fitch expects capex to be lower in 2020 and 2021, as Fitch
believes most capex for major live events had been completed, and
Fitch expects lower new contract volumes in the near term. Fitch
forecasts 15% capital intensity in 2022 and 2023.
- Fitch expects revolver borrowings to be termed out ahead of
maturities in 2023.
- Fitch forecasts NEP to resume debt-funded acquisition activity
once operations and credit metrics have generally normalized.
- Fitch forecasts NEP to breach its financial covenants in 2Q20
and in following quarters, but expects covenants will be waived or
amended to provide the Company with additional flexibility under
its financial covenants.
Recovery Assumptions:
The recovery analysis assumes that NEP would be considered a
going-concern in bankruptcy, and it would be reorganized rather
than liquidated.
Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
The GC LTM EBITDA of $281 million contemplates insolvency resulting
from inadequate liquidity amid recessionary stress. In this
scenario, Fitch assumed that the company is unable to integrate the
large number of acquisitions into the business. Additionally, the
company is unable to renew its large contracts, ceding share to
competitors in the space, leading to depressed EBITDA and an
unsustainable capital structure.
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation.
An enterprise valuation multiple of 5.5x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization enterprise value. The
company's platform acquisitions are transacted on average between
4.8x-6.0x, while its smaller bolt-on acquisitions close in the
range of 3.5x-4.5x. Most recently, HDR Group was acquired by NEP at
5.8x EV/EBITDA in June 2019 and Aerial Video Systems at 4.4x in
September 2019. While the transaction multiples are lower than the
5.5x used for NEP, these targets operated on a smaller scale with a
less-developed footprint than NEP.
The recovery analysis assumes that the full $250 million is drawn
on the first lien revolver. The recovery analysis implies a
'B'/'RR3' rating on the senior first lien secured debt and a
'CCC'/'RR6' on the senior second lien secured debt.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch believes an upgrade is unlikely in the near term given
the expectation for leverage to remain elevated through 2021 due to
both EBITDA declines and incremental debt issuance.
-- Fitch could revise the Negative Outlook if live sports
broadcasts widely resume, FCF margins are sustained at
neutral-to-positive levels, FFO Interest coverage is sustained
above 1.0x and/or Fitch believes the likelihood of a second wave of
live event cancellations is low.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A second wave of event live event and broadcast cancellations
or postponements deemed to materially impair NEP's cash flow
generation and pressure liquidity.
-- FFO Interest coverage sustained below 1.0x.
-- Fitch's expectation that breaches of NEP's financial covenant
will not be waived or cured.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Fitch believes current liquidity, pro forma
for the incremental term loan issuance and delayed draw term loan
commitment, will be sufficient to support cash flow and debt
service in the near term. The company had FCF deficits of $52
million for the LTM period ended March 31, 2020, reflective of the
capital-intensive nature of the live events industry, as well as
the initial impacts of live event cancellations in the second half
of March. Fitch believes that the company's FCF deficit has grown
materially through 2Q20 driven by the wide cancellations of live
sports, but will moderate as live events resume between June and
July. While Fitch believes liquidity is currently adequate, a
second wave of widespread live event cancellations will threaten
the Company's liquidity position.
Pro forma for the $100 million incremental term loan borrowing, NEP
had approximately$2.34 billion in debt outstanding with no
significant maturities until 2023, when the revolver is scheduled
to mature.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by
the entity.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
NEP/NCP Holdco, Inc.
- LT IDR B-; Affirmed
- Senior secured; LT B; New Rating
- Senior Secured 2nd Lien; LT CCC; Affirmed
- Senior secured; LT B; Downgrade
NEP II Inc
- LT IDR B- Affirmed
- Senior secured; LT B; New Rating
- Senior secured; LT B; Downgrade
- Senior Secured 2nd Lien; LT CCC; Affirmed
NEP Group, Inc.
- LT IDR B- Affirmed
- Senior secured; LT B; New Rating
- Senior secured; LT B; Downgrade
- Senior Secured 2nd Lien; LT CCC; Affirmed
NEP Europe Finco B.V.
- LT IDR B-; Affirmed
- Senior secured; LT B; Downgrade
NFN NMN DESMOND: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The Office of the U.S. Trustee on June 17, 2020, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of N/F/N N/M/N Desmond.
About N/F/N N/M/N Desmond
N/F/N N/M/N Desmond sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Kansas Case No. 20-20805) on May 27,
2020. At the time of the filing, Debtor had estimated assets of
between $100,000 and $500,000 and liabilities of between $1 million
and $10 million. Debtor is represented by Colin Gotham, Esq., at
Evans & Mullinix, P.A.
NKS HOLDINGS: Hires Maida Clark as Bankruptcy Counsel
-----------------------------------------------------
NKS Holdings, Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Texas to employ Maida Clark Law Firm,
P.C. as its bankruptcy counsel.
The firm will provide services as follows:
(a) give legal advice with respect to Debtor's powers and
duties in the continued operation of its business and management of
its property;
(b) prepare and file schedules and statements of financial
affairs, operating reports and all necessary motions; and
(c) prepare legal papers.
The firm's attorneys and professionals will be paid at hourly rates
as follows:
Frank J. Maida $400
Tagnia Fontana Clark $300
Paralegal $60
Maida Clark is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Frank J. Maida, Esq.
Maida Clark Law Firm, P.C.
4320 Calder Avenue
Beaumont, TX 77706
Telephone: (409) 898-8200
Facsimile: (409) 898-8400
About NKS Holdings
NKS Holdings, Inc. filed a Chapter 11 bankruptcy petition (Bankr.
E.D. Tex. Case No. 20-10244) on June 1, 2020, listing under $1
million in both assets and liabilities. Maida Clark Law Firm, P.C.
is Debtor's counsel.
NORTHEAST GAS: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: NorthEast Gas Generation, LLC
1780 Hughes Landing Blvd., Suite 800
The Woodlands, Texas 77380
Business Description: NorthEast Gas Generation, LLC --
https://www.talenenergy.com -- owns and
manages a portfolio of two natural gas
-fired electric generating facilities
located in the United States: (1) a
1,080 MW facility located in Athens, New
York that achieved commercial operation
on May 5, 2004; and (2) a 360 MW
facility, located in Charlton,
Massachusetts, that achieved commercial
operation on April 12, 2001. The
Debtors are part of a group of
privately-owned independent power
generation infrastructure companies
indirectly owned by non-Debtors Talen
Energy Corporation and Talen Energy
Supply, LLC.
Chapter 11 Petition Date: June 18, 2020
Court: United States Bankruptcy Court
District of Delaware
Four affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
NorthEast Gas Generation, LLC (Lead Case) 20-11597
NorthEast Gas Generation GP, LLC 20-11598
Millennium Power Partners, L.P. 20-11599
New Athens Generating Company, LLC 20-11600
Judge: Hon. Mary F. Walrath
Debtors' Counsel: Mark D. Collins, Esq.
Daniel J. DeFranceschi, Esq.
Jason M. Madron, Esq.
Brendan J. Schlauch, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Tel: (302) 651-7700
Fax: (302) 651-7701
Email: collins@rlf.com
defranceschi@rlf.com
madron@rlf.com
schlauch@rlf.com
Debtors'
Financial
Restructuring
Advisor: ALVAREZ & MARSAL NORTH AMERICA, LLC
Debtors'
Investment
Banker: HOULIHAN LOKEY CAPITAL, INC.
Debtors'
Claims,
Noticing
Agent and
Administrative
Advisor: PRIME CLERK LLC
https://cases.primeclerk.com/NEG/
Estimated Assets
(on a consolidated basis): $100 million to $500 million
Estimated Liabilities
(on a consolidated basis): $500 million to $1 billion
The petitions were signed by Dale E. Lebsack, Jr., president.
A copy of NorthEast Gas' petition is available for free at
PacerMonitor.com at:
https://is.gd/1TQAvS
Consolidated List of Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. CLMG Corporation Deficiency Undetermined
as Administrative Agent Claim
Attn: James Erwin First Lien Credit
7195 Dallas Parkway Facility
Plano, TX 75024 Term B Note &
Tel: (866) 544-9820 Term C Note
Fax: (469) 467-5550
Email: jerwin@clmgcorp.com
2. Siemens Energy, Inc. Trade Debts $3,576,588
Attn: Mark Weber
4400 Alafaya Trail
MC Q3-030
Orlando, FL 32826
Tel: (407) 736-6758
Fax: (407) 736-5015
Email: mark.weber@siemens.com
3. Control Components Inc. Trade Debts $97,265
Attn: Ian Whiting
22591 Avenida Empresa
Rancho Santa Margarita, CA 92688
Tel: (949) 858-1877
Fax: (949) 858-1878
Email: iwhiting@ccivalve.com
4. Suez WTS Services USA Trade Debts $88,521
Attn: Mamta Patel
4636 Somerton Road
Trevose, PA 19053
Tel: (832) 610-6193
Fax: (201) 767-9300
Email: mamta.patel@suez.com
5. Southbridge Associates II LLC Trade Debts $77,208
Attn: Ann Seaburg
36 Washington Street,
Suite 390
Wellesly, MA 02481
Ann Seaburg
Tel: (617) 350-8844
Fax: (617) 350-8849
Email: little1@franklin.com
6. Custom Lighting Services, LLC Trade Debts $53,934
DBA Black & McDonald
Attn: Ian McDonald
2 Bloor Street East,
Suite 2100
Toronto, ON M4W 1A8
Canada
Ian McDonald
Tel: (416) 920-5100
Fax: (416) 922-8768
Email: wimcdonald@blackandmcdonald.com
7. Safway Intermediate Trade Debts $42,165
Holding LLC DBA
Brandsafway Services LLC
Attn: James Walters
36 Broadway
Menands, NY 12204
James Walters
Tel: (518) 434-2209
Fax: (770) 514-0285
Email: james.walters@safway.com
8. CE Power Engineered Trade Debts $37,401
Services, LLC
Attn: Mark Thomas
4040 Rev Drive
Cincinnati, OH 45232
Tel: (513) 563-6150
Fax: (513) 563-6120
Email: mark.thomas@cepower.net
9. National Grid plc Trade Debts $28,518
Atttn: John Pettigrew
300 Erie Boulevard West
Syracuse, NY 13202-4250
Tel: (800) 867-5222
Fax: (315) 477-7792
Email: john.pettigrew@nationalgrid.com
10. Atlantic Contracting & Trade Debts $22,244
Specialties LLC
Attn: Joseph Leo
1 Harrison Street
Troy, NY 12181
Tel: (516) 261-9919
Fax: (516) 261-9925
Email: jleo@atlanticcontracting.com
11. O'Connor Corporation Trade Debts $21,844
Attn: Gene Wahlberg
45 Industrial Drive
Canton, MA 02021
Tel: (617) 364-9000
Fax: (781) 828-8248
Email: wahlberg@oconnorcorp.com
12. Amaha Electrical Inc. Trade Debts $20,471
Attn: Patricia Kenyon
1217 Loudon Road
Cohoes, NY 12047
Tel: (518) 782-7400
Fax: (518) 782-0617
Email: pkenyon@amahaelectrical.com
13. Big Top Portable Toilets, Inc. Trade Debts $16,211
Attn: Sue Mahoney
88 Grove Street
Cairo, NY 12413
Tel: (518) 622-3353
Fax: (518) 622-8668
Email: sue@bigtopportabletoilets.com
14. Final Controls Inc Trade Debts $15,121
Attn: Ed Havens
65 Casey Rd
Queensbury, NY 12804
Tel: (518) 747-2890
Fax: (518) 747-3810
Email: ed@finalcontrols.com
15. Eagle Associates Concrete Trade Debts $14,093
Drilling & Sawing Inc.
Attn: Eric Hoglund
13729 Route 9W
West Coxsackie, NY 12192
Tel: (518) 756-6531
Fax: (518) 756-1809
Email: erichoglund@ymail.com
16. Haun Welding Supply Inc. Trade Debts $13,433
Attn: Mark Haun
5921 Court Street Road
Syracuse, NY 13206
Tel: (315) 463-5241
Fax: (315) 463-0884
Email: mark@haunweldingsupply.com
17. Halsted Excavating Trade Debts $10,886
Corporation
Attn: John Halsted
325 Medway Earlton Road
Earlton, NY 12058
Tel: (518) 731-6190
Email: halstedoutdoors@aol.com
18. Progressive Electrical Trade Debts $10,595
Services, Inc.
Attn: Ellen LaRocca
1 Concord Road
Lee, NH 03861
Tel: (603) 397-5320
Fax: (603) 397-5721
Email: ellend@progressiveelectricalnh.com
19. New England Controls Inc. Trade Debts $10,384
Attn: Tom Ramundo
9 Oxford Road
Mansfield, MA 02048
Tel: (508) 339-5522
Fax: (508) 339-9144
Email: tom.ramundo@newenglandcontrols.com
20. Wolberg Electrical Supply Trade Debts $9,460
Co. Inc.
Attn: Andy Rosen
35 Industrial Park Road
Albany, NY 12206
Tel: (518) 489-8451
Fax: (518) 489-4335
Email: aprosen@wolberginc.com
NORTHERN OIL: Stockholders Pass All Proposals at Annual Meeting
---------------------------------------------------------------
At the 2020 Annual Meeting of Stockholders of Northern Oil and Gas,
Inc. held on June 12, 2020, the stockholders:
(a) elected Bahram Akradi, Lisa Bromiley, Roy Easley, Michael
Frantz, Robert Grabb, Jack King, Stuart Lasher, and
Michael Popejoy as directors;
(b) ratified the appointment of Deloitte & Touche LLP as the
Company's independent registered public accounting firm
for the fiscal year ending Dec. 31, 2020; and
(c) approved, on an advisory basis, the compensation of the
Company's executive officers as disclosed in the
definitive proxy statement relating to the Annual Meeting.
About Northern Oil
Northern Oil and Gas, Inc. -- http://www.northernoil.com-- is an
exploration and production company with a core area of focus in the
Williston Basin Bakken and Three Forks play in North Dakota and
Montana.
Northern Oil recorded a net loss of $76.32 million for the year
ended Dec. 31, 2019. As of March 31, 2020, the Company had $2.23
billion in total assets, $1.22 billion in total liabilities, and
$1.01 billion in total stockholders' equity.
* * *
As reported by the TCR on April 14, 2020, S&P Global Ratings
lowered its issuer credit rating on Northern Oil and Gas Resources
to 'CCC+' from 'B-'. The outlook is negative. "Our downgrade
reflects the company's tight liquidity and history of distressed
exchanges. The recent collapse in oil prices increases the risk
that the company's reserve-based lending (RBL) facility size could
be reduced at its next bank redetermination, which could further
strain its limited capacity," S&P said.
NOVABAY PHARMACEUTICALS: Hikes Stock Offering Amount by $1.3M
-------------------------------------------------------------
NovaBay Pharmaceuticals, Inc. filed a supplement to its prospectus
supplement, dated April 27, 2020, in connection with the offer and
sale of shares of the Company's common stock, par value $0.01 per
share, pursuant to that certain At the Market Offering Agreement,
dated April 27, 2020 with Ladenburg Thalmann & Co. Inc. Pursuant
to the Agreement, the Supplement increased the aggregate offering
amount available under the ATM Program to $5,631,027 from
$4,302,137.
About Novabay
Headquartered in Emeryville, California, NovaBay Pharmaceuticals,
Inc. -- http://www.novabay.com/-- is a biopharmaceutical company
focusing on commercializing and developing its non-antibiotic
anti-infective products to address the unmet therapeutic needs of
the global, topical anti-infective market with its two distinct
product categories: the NEUTROX family of products and the
AGANOCIDE compounds. The Neutrox family of products includes
AVENOVA for the eye care market, CELLERX for the aesthetic
dermatology market, and NEUTROPHASE for wound care market.
Novabay reported a net loss and comprehensive loss of $9.66 million
for the year ended Dec. 31, 2019, compared to a net loss and
comprehensive loss of $6.54 million for the year ended Dec. 31,
2018. As of March 31, 2020, the Company had $9.48 million in total
assets, $9.82 million in total liabilities, and a total
stockholders' deficit of $349,000.
OUM & CO. LLP, in San Francisco, California, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 26, 2020 citing that the Company has experienced
operating losses for most of its history and expects expenses to
exceed revenues in 2020. The Company also has recurring negative
cash flows from operations and an accumulated deficit. All of
these matters raise substantial doubt about its ability to continue
as a going concern.
OHIO VALLEY: Moody's Alters Outlook on Ba1 Unsec. Rating to Pos.
----------------------------------------------------------------
Moody's Investors Service affirmed the senior unsecured rating of
the Ohio Valley Electric Corporation at Ba1 and revised the outlook
to positive from stable.
The action follows a June 15, 2020 order from the court overseeing
FirstEnergy Solutions Corp.'s Chapter 11 bankruptcy filing, and its
February 2020 emergence as Energy Harbor Corp. (Energy Harbor, Baa3
stable), approving a settlement agreement between OVEC and Energy
Harbor. [1] Under the terms of the agreement, Energy Harbor will
assume FES' obligations under the Inter-Company Power Agreement
with OVEC and will pay $32.5 million as settlement of pre- and
post-petition amounts. [2]
RATINGS RATIONALE
"The positive outlook recognizes the improvement in OVEC's credit
profile that comes with Energy Harbor's assumption of FES' 4.85%
entitlement under the ICPA" said Laura Schumacher, Vice President
-- Senior Credit Officer. The outlook also recognizes the
strengthening of OVEC's financial position that occurred as a
result of actions taken by the sponsor group in response to FES'
financial distress and ultimate default.
The positive outlook assumes that, absent a revision to the ICPA to
incorporate a step-up provision, OVEC will continue to build
liquidity and reserves to offset this structural weakness in the
ICPA. For example, OVEC has been funding a debt service reserve at
a rate of $2.4 million per month since January of 2017. As such, by
the end of 2020, the reserve balance will be about $120 million, or
close to one full year of debt service, a material credit positive.
In addition, management has been retaining the return on equity
portion of its rates, approximately $2.5 million per year, which
provides some additional financial cushion.
OVEC also recently increased its demand charges to include $5.5
million per year for postretirement benefits. The company was
previously not billing for postretirement benefits as it has
approximately $76 million of long-term investments associated with
a prior Department of Energy (DOE) settlement that was ear-marked
as a source of benefit funding.
The positive outlook assumes that OVEC will look to reduce leverage
and continue to improve its financial position by including
amortization provisions in all future refinancing activity, and by
funding increases in capital spending to comply with more stringent
environmental regulations on an ongoing basis. The outlook assumes
FirstEnergy Corp.'s (Baa3 stable) remaining merchant subsidiary,
Allegheny Energy Supply Company, LLC (AES, not rated), will
continue to meet its obligations under the ICPA.
The Ba1 rating considers the company's significant environmental
exposure and carbon transition risk, as well as its currently
uncompetitive position in the PJM market. The affirmation of the
rating recognizes the strength of the governing provisions of the
lCPA between twelve investor-owned and cooperative utility
companies, and one independent power company that recently emerged
from bankruptcy (collectively, the sponsors). Its view considers
the overall credit quality of the sponsor group, which Moody's
estimates at about Baa1, but also recognizes the ICPA still does
not include a "step-up" provision, which leaves open the potential
for payment shortfalls if any of its sponsors experiences financial
distress.
The rapid spread of the coronavirus outbreak, severe global
economic shock, low oil prices, and asset price volatility 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. Moody's
expects OVEC to be relatively resilient to recessionary pressures
due to the structure of the ICPA that passes all of its fixed costs
to a sponsor group that is engaged in predominantly rate regulated
businesses. Nevertheless, reductions in demand increase the all-in
per MWh price of power generated by OVEC, rendering it less
competitive than market alternatives.
Environmental considerations incorporated into its credit analysis
for OVEC are primarily related to carbon and other coal related
regulations. OVEC has an elevated carbon transition risk profile
because its operations are limited to the generation of electricity
from two coalfired electric generating plants: the Kyger Creek
plant (1,086 MW) in Ohio and the Clifty Creek plant (1,304 MW) in
Indiana. This places the company at a higher risk than other joint
action agencies or regulated and municipal utilities that may have
a more diversified generating base or own transmission and
distribution assets. Social risks are primarily related to health
and safety as well as demographic and societal trends. Governance
considerations include financial policy and a corporate structure
that is governed by the ICPA.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade
A continuation of financial strengthening measures, such as reserve
funding and equity retention; credit supportive changes to the
ICPA, most notably the inclusion of a step-up provision to mitigate
the risk of future sponsor payment shortfalls or defaults; an
improvement in the credit quality of, or support for, AES; a
strengthening of power prices in the PJM market, which would make
OVEC more competitive; or stronger financial metrics, including a
debt service coverage ratio above 1.6x, could put upward pressure
on the rating.
Factors that could lead to a downgrade
Declines in the credit quality the sponsors, or a sponsor payment
default that was not able to be covered by existing reserves or
through a swift replacement of the defaulting party, could lead to
a downgrade.
Affirmations:
Issuer: Ohio Valley Electric Corp
Senior Unsecured Term Loan, Affirmed Ba1
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1
Issuer: Indiana Finance Authority
Senior Unsecured Revenue Bonds, Affirmed Ba1
Issuer: Ohio Air Quality Development Authority
Senior Unsecured Revenue Bonds, Affirmed Ba1
Outlook Actions:
Issuer: Ohio Valley Electric Corp
Outlook, Changed to Positive from Stable
OVEC owns and operates two coal-fired generating power plants,
Kyger Creek in Ohio and Clifty Creek in Indiana, that have a
combined capacity of approximately 2,400 MW. OVEC is sponsored by
nine investor-owned regulated electric utilities, two independent
generating companies (one of which is a subsidiary of a utility
holding company) and two affiliates of generation and transmission
cooperatives. The sponsors purchase OVEC's power at wholesale, cost
based, rates. The ownership structure is governed by a long-term
Inter-Company Power Agreement expiring in 2040.
The principal methodology used in these ratings was US Municipal
Joint Action Agencies Methodology published in August 2019.
PARKLAND CORP: Fitch Rates New Unsecured Notes 'BB/RR4'
-------------------------------------------------------
Fitch Ratings has assigned a rating of 'BB'/'RR4' to Parkland
Corporation's proposed issuance of Canadian dollar-denominated
senior unsecured notes. Proceeds will be used for general corporate
purposes, including the refinancing of senior unsecured notes
maturing in 2021 and 2022.
Parkland's ratings and Stable Outlook reflect its unique business
characteristics as a fully integrated downstream petroleum company,
which features a strong retail fuel presence in Canada and the
Caribbean, and a growing presence in the U.S., as well as
supporting distribution and logistics businesses and small relative
refining operations. Fitch views the long-term cash flow stability
gained through Parkland's integrated operations and diversified
asset base as supportive of credit quality. The company has grown
measurably over the past few years through a combination of
acquisitions, a few large and many small, including compelling
synergy capture, and steady capital spending on organic
initiatives. Risks remain as the full impact of the measures taken
to control the spread of the coronavirus unfolds in the
marketplace.
The 'RR4' rating for the senior unsecured notes reflects Fitch's
expectation for 'Average' recovery for the debt security in the
event of default.
KEY RATING DRIVERS
Temporary Demand Destruction: Volumes declined meaningfully and
rapidly across Parkland's businesses in response to stay-at-home
orders put in place to combat the spread of the coronavirus. The
deterioration in volumes across the industry has been
unprecedented. However, company and industry indications support a
notion that the recovery from the trough is underway, in varying
degrees, across Canada and the U.S. The extent and timing of the
recovery remains unclear, but it is Fitch's view that the majority
of demand destruction currently facing Parkland is temporary in
nature. As such, the Fitch forecast contemplates a return to a
sustainable operating environment, including a return to driving
patterns near levels seen prior to the spread of coronavirus in
North America and the Caribbean, occurring over the next 12 months
to 24 months.
Volumes Are Only Part of the Story: Parkland has been able to
offset a portion of the negative effects from reduced volumes
through its system with higher than historical margins, the most
pronounced impact from which is being seen in the Canadian and U.S.
retail businesses. The company has been able to capture additional
gross margin per liter as declining commodity prices (oil mostly)
have lowered input costs, while Parkland's sales price to external
customers has not decreased to the same degree/at the same pace.
Despite healthy competition, especially in the retail gasoline
marketplace, industry participants appear to be taking a rational
and measured approach to pricing thus far. Fitch regards the
unprecedented and rapid drop in volumes as encouraging margin
protection, in the near term at least, and Fitch views Parkland's
ability to hold strong margins as an important piece in bridging
the gap to an eventual and expected 'return to normal'.
Near-Term Leverage Increase: To account for the company's material
operating leases, Fitch utilizes the total adjusted debt/operating
EBITDAR metric in its analysis of Parkland to incorporate the
off-balance- sheet nature of this type of financing with
capitalizing lease expense at an 8.0x multiple. Leverage is
forecast to rise above 5.0x in 2020 as a result of the demand
destruction with lower EBITDAR.
Encouragingly, Fitch believes Parkland will be able to hold its
adjusted debt flat to 2019 levels, largely due to cost reduction
efforts, delayed growth spending and a pause in what has been an
otherwise active and accretive acquisition pipeline. Additionally,
management has stated its commitment to keep leverage within a
relatively conservative range, even with acquisitions on a pro
forma basis. Fitch does not view the increased leverage as
sustained and forecasts leverage to return to the 3.5x to 4.0x
range in 2021.
Capturing Margin Along the Value Chain: Parkland has a strong and
established retail footprint in Canada and the Caribbean, and a
small but growing presence in the U.S., and is able to drive value
through the system by creating and exploiting cost/supply
advantages. These advantages come via downstream integration,
allowing Parkland to secure attractive margins in of support
consistent cash flow generation. The downstream integration
advantages are meaningful versus nonintegrated fuel retailer
peers.
Parkland's diversified business model and vertical integration also
help smooth some of the volatility that is common in the refining
space, supporting higher credit quality versus standalone refiner
peers. Parkland's own retail outlet for finished product sourced
both internally and externally, and its capability to move, store
and deliver that product to customers provide the company with an
offset, and a simple buffer to the cyclical lows that are inherent
in the refining industry.
A Diverse Portfolio: Parkland has approximately 1,850 retail
service stations across Canada and just under 500 in the Caribbean.
Additionally, the company has approximately 382 retail locations in
the U.S. Parkland's retail and commercial franchises display size
and scale advantages and geographic and product diversification.
Parkland has regionally relevant brands in close proximity to the
major population centers. The company cites that roughly 85% of
Canadians live within a 15-minute drive of a Parkland service
station.
Parkland has a dominant position in many of the Caribbean countries
where it operates, meaningful shipping capabilities, and control of
essential distribution and supply assets, garnering regulated
margins on roughly 45% of the international business for onshore
volumes only. Size/scale in the U.S. is small currently but the
company has been expanding its retail, commercial and wholesale
capabilities off the back of advantages developed just north of the
border.
The juxtapositions within Parkland's refining operations in
Burnaby, British Columbia, as it relates to size, scale and asset
quality are distinct. Currently, the company operates only a
single, small capacity, low complexity refinery. Fitch typically
views refining companies with less than 100,000 barrels per day of
capacity as well as single-asset refineries as being more
consistent with a 'B' credit profile, if it were a standalone
refining business.
Fitch does believe Parkland's single refinery possesses some
geographic advantages. It is strategically connected by pipeline to
the Trans Mountain Pipeline and its tank farm in Burnaby is located
on the Burrard inlet, in close proximity to Vancouver, BC.
Additionally, the Burnaby refinery is fully integrated with
Parkland's commercial/wholesale and retail businesses in Western
Canada, and as such is not a merchant refiner. Fitch believes that
these unique characteristics provide more cash flow and earnings
stability than Parkland would have without integration.
Growth Supported by M&A: Parkland has grown meaningfully over the
past few years largely on the back of successful acquisitions, with
synergy capture after the fact and steady organic growth all along
the way. The company has been able to, with the Ultamar (CAD978
million) and Chevron Canada (CAD1.68 billion) acquisitions, both
acquired in 2017, generate a projected approximate 50% synergy
capture, defined by the company as EBITDA lift post-acquisition. In
early 2019, the company moved into the Caribbean with the purchase
of 75% of Sol Investments for CAD1.5 billion to obtain a dominant
fuel marketing position in 23 countries with extensive supply and
distribution assets.
Additionally, the company has spent nearly CAD400 million on
acquisitions in the U.S. since the beginning of 2018, expanding
into three distinct regional operating centers: Northern Tier,
Rockies and Southeast. Parkland has been successful in finding and
transacting on attractive assets and also proven to be capable of
capturing significant synergies from the acquired assets
post-transaction, supporting Fitch's assumptions for improving
leverage metrics beyond 2020.
The Ups and Downs of Refining: Refining remains one of the most
cyclical of corporate sectors, and is subject to periods of boom
and bust, with sharp swings in crack spreads over the cycle. The
last major bust period was 2009, when collapsing oil prices and
lagging costs led industry margins to collapse. The rebound in
market conditions was also relatively quick, however, as the
industry tends to adjust rapidly.
Given the rest of Parkland's portfolio is highly ratable, refining
remains a source of potential variability in results in the future.
The retail, commercial and wholesale fuel and logistics operating
segments tend to be less cyclical, and Parkland's positions in
Canada and the Caribbean are expected to benefit from the company's
position as one of the largest competitors in the regions.
DERIVATION SUMMARY
Parkland is somewhat unique relative to Fitch's coverage given its
diversification across the midstream and downstream value chain,
especially due to the relatively small size and scale of its
refining operations. From a business line perspective, though
orders of magnitude smaller in size and scale, Fitch sees Marathon
Petroleum Corporation (MPC; BBB/Negative) as a peer. Fitch views a
one full rating category difference between Parkland and MPC as
appropriate, given Parkland's distinctive characteristics,
significantly smaller size and scale, and weaker relative financial
profile.
Credit rating differences, relative to MPC, arise from Parkland's
'single refiner risk' factor and the substantially smaller size,
scale and complexity of Parkland's refining operations. Fitch views
similarly rated Sunoco LP (SUN; BB/Negative) as a relevant peer for
the distribution segment of Parkland's business. Differences in
credit profile, relative to SUN, arise from Parkland's position as
a fully integrated downstream operator.
However, Fitch views SUN as having greater margin stability,
supported by its multi-year take-or-pay fuel supply agreement with
a 7-Eleven subsidiary, under which SUN will supply approximately
2.2 billion gallons of fuel annually, and no refining operations.
Puma Energy Holdings Pte Ltd (BB-/Stable) is a global integrated
midstream and downstream peer with storage, distribution,
fuel-retailing and business to business activities across the
globe. Relative to Parkland, Puma has a slightly larger size and
scale, leverage that is similar but more exposure to developing
economies and foreign currency risks globally, leading to its lower
credit rating.
Leverage, as measured by total adjusted debt/operating EBITDAR, is
roughly one half to one full turn worse than MPC, 2020 excluded,
and Fitch does not forecast improvement in this metric for Parkland
until later in the forecast period. Furthermore, Parkland's
leverage is expected to be at least one turn better than Sunoco's
over the forecast period, 2020 excluded, based on Fitch's
expectations for SUN's total debt/adjusted EBITDA to remain between
4.5x-5.0x beyond the current downturn in refined product demand.
Parkland's weaker relative financial profile is a factor considered
in the credit rating difference between MPC and Parkland.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include:
-- Full-year 2020 Canadian retail gasoline volumes that are down
roughly 15%-20%, versus 2019. Higher margins offset a portion of
the volume declines in the segment. 2020 Canadian commercial
volumes are down to a lesser degree, on a yoy basis, compared with
Canadian retail;
-- On a relative basis, compared with 2020 Canadian retail
volumes, yoy declines in the U.S. segment volumes are more muted
and margin expansion is more pronounced;
-- On a relative basis, compared with 2020 Canadian retail
volumes, yoy declines in international segment volumes are more
pronounced;
-- Utilization at the company's Burnaby refinery of roughly
75%-80% over the balance of 2020, after posting a turnaround
impacted 30.9% utilization in first-quarter 2020. Refining
utilization of 90%-94% in years without a major turnaround;
-- Reduced near-term growth and acquisition expenditure, equating
to roughly CAD1 billion spent over the forecast period;
-- Minimal debt issuances/repayments over the forecast period,
upcoming maturities are assumed to be refinanced;
-- USD1.00/CAD1.33 throughout the quarters of the forecast
period.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
-- Expected or actual fiscal year with total adjusted
debt/operating EBITDAR below 3.0x.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
-- Total adjusted debt/operating EBITDAR, capitalizing operating
lease expense at 8.0x, above 4.0x on a sustained basis. Attractive
acquisitions that push this metric above the negative sensitivity
temporarily will be reviewed on a case by case basis;
-- A second wave of stay-at-home orders across North America
related to the coronavirus, leading to further demand destruction,
without an offsetting increase in fuel margins;
-- A disproportionate decrease in realized fuel margins versus
increased fuel volumes;
-- Impairments to liquidity;
-- Acquisitions that increase overall business risk and/or are
not financed in a balanced manner.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Adequate: Parkland had total available liquidity of more
than CAD900 million, including CAD349 million in unrestricted cash
and equivalents on the balance sheet as of March 31, 2020. The
company has a two-tranche credit facility that includes a recently
expanded CAD700 million facility as well as a USD780 million
facility. Both credit facilities mature in 2023. The company had
approximately CAD600 million available under both credit facilities
as of March 31, 2020.
On June 9, 2020 Parkland exercised the accordion feature in its CAD
credit facility, adding an incremental CAD300 million of capacity
to CAD700 million. Along with additional cash generated from
operations, Parkland's liquidity position has improved
significantly since the end of first-quarter 2020. With proceeds
from the proposed issuance of senior unsecured notes being used to
refinance 2021 and 2022 maturities, Parkland has no senior
unsecured notes due until 2024.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch applies an 8.0x multiple to operating leases.
SOURCES OF INFORMATION
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of '3'. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
PQ NEW YORK: U.S. Trustee Appoints Creditors' Committee
-------------------------------------------------------
The U.S. Trustee for Region 3 appointed a committee to represent
unsecured creditors in the Chapter 11 cases of PQ New York, Inc.
and its affiliates.
The committee members are:
1. Natanel Marciano
c/o Jeffrey S. Sloan, Esq.
Kathleen M. Pratt
Workplace Legal, APLC
870 Market Street, Suit 1152
San Francisco, CA 94102
Phone: 415-851-8900
Fax: 415-655-3305
Email: jsloan@workplacelegalpc.com
Email: kpratt@workplacelegalpc.com
2. The Havi Group, LP
Attn: Charles Schulman
3500 Lacey Rd. Suite 600
Downers Grove, IL 60502
Phone: 630-340-9770
Email: chuck.schulman@havi.com
3. Kettle Cuisine Inc.
Attn: Wendy Emerson
330 Lynnway
Lynn, MA 01901
Phone: 617-409-1165
Email: wemerson@kettlecuisine.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 PQ New York
Based in New York, PQ New York, Inc. is a wholly-owned subsidiary
of PQ Licensing SA, a Belgian company, and operated 98 restaurants
in the United States under the trade name Le Pain Quotidien.
On May 27, 2020, PQ New York and its U.S. affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 20-11266). PQ New York
was estimated to have $100 million to $500 million in assets and
liabilities at the time of the filing.
Debtors tapped Richards, Layton & Finger, P.A. as its legal
counsel, and SSG Advisors, LLC as its investment banker.
PricewaterhouseCoopers LLP is the interim management services
provider. Donlin, Recano & Company, Inc. is the claims agent.
R. MILLENNIUM: Seeks Court Approval to Hire Bankruptcy Attorney
---------------------------------------------------------------
R. Millennium Transport, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of California to hire
David Johnston, Esq., an attorney in Modesto, Calif., to handle its
Chapter 11 case.
The services to be provided by the attorney include:
(a) advising Debtor of its rights, powers and obligations in
its bankruptcy case and in the management of its estate;
(b) taking necessary actions to enforce the automatic stay and
to oppose motions for relief from the automatic stay;
(c) taking necessary actions to recover and avoid any
preferential or fraudulent transfers;
(d) appearing with Debtor's president at the meeting of
creditors, initial interview with the U.S. Trustee, status
conference, and other hearings held before the bankruptcy court;
(e) reviewing and, if necessary, objecting to proofs of
claim;
(f) taking steps to obtain court approval to sell Debtor's
assets; and
(g) preparing a plan of reorganization and taking all steps
necessary to bring the plan to confirmation.
Debtor will pay Mr. Johnston an hourly fee of $360. The attorney
received payment in the sum of $10,000, plus $1,717 for the filing
fee.
Mr. Johnston is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
Mr. Johnston holds office at:
David C. Johnston, Esq.
1600 G Street, Suite 102
Modesto, CA 95354
Tel: (209) 579-1150
Email: david@johnstonbusinesslaw.com
About R. Millennium Transport
R. Millennium Transport, Inc., a company that provides
transportation services, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Calif. Case No. 20-90349) on May 15,
2020. At the time of the filing, Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range.
Judge Ronald H. Sargis oversees the case. David C. Johnston, Esq.,
is Debtor's bankruptcy attorney.
REDSTONE BUYER: Fitch Assigns First-Time B+ LT IDRs, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has assigned 'B+' Long-Term Issuer Default Ratings to
Redstone Buyer LLC and Redstone Holdco 2 LP. The Rating Outlook is
Stable. Fitch rates the first lien facilities 'BB+'/'RR1' and the
second lien facility 'B-'/'RR6'.
The ratings and Stable Outlook reflect Fitch's expectation for
stable operating performance over the rating horizon benefiting
from high retention rates, recent investments in cloudifying its
product offerings and near-term tailwinds for identity management
solutions as a result of coronavirus. Longer term, Fitch expects
competitive pressures and the shift from term licenses to
subscriptions will constrain revenue growth. Despite the shift,
profit margins should benefit from the cost rationalization efforts
and free cash flow margins will sustain in the midteens.
The rating also reflects the execution risk associated with the
carve-out as well as the sizeable cost rationalization efforts that
management is expected to undertake over the next 12 months.
The rating actions follow the previously announced buyout of the
RSA Security business from Dell Inc. The buyout will be funded with
a new $1.05 billion first lien term loan, a $300 million second
lien term loan and new cash equity from a consortium of private
equity sponsors led by Symphony Technology Group, Ontario Teachers
Pension Plan and AlpInvest. Fitch estimates pro forma gross
leverage at close will be 4.9x.
KEY RATING DRIVERS
Highly Recurring Revenues: RSA has a highly recurring revenue
stream, with retention rates in excess of 95% for the risk
management segment and 90% for the cybersecurity segment. RSA is
still in the early stages of migration from term licenses to a
subscription model, which Fitch expects will drive a higher
percentage of recurring revenue and improving visibility. At the
same time, the transition to subscription will initially weigh on
revenues given annual billing associated with the subscription
model versus up-front billing for perpetual licenses.
Diversified Customer Base: RSA has a highly diversified revenue
base with more than 12,500 enterprise customers, including 90% of
Fortune 100 organizations, 2 billion individual users and 24
million identities under management. No customer accounts for more
than 2% of revenues, the top 25 customers account for less than 20%
of total revenues and the top 100 customers account for less than
40% of revenues. Depending on the service, the average length of a
contract varies from 21 months-29 months.
Secular Growth Markets: Fitch believes RSA is well positioned to
benefit from the digital transformation of its customers as it
creates greater demand for risk management solutions to meet
regulatory and compliance requirements and to protect against an
enhanced fraud landscape. The TAM for RSA's services is expected to
grow from $17 billion in 2018 to $24 billion by fiscal 2022. Fitch
expects the recent pandemic has both expedited the adoption of IAM
services as well as expanded the accessible market for these
services, thereby front-ending the growth in the sector.
Significant Competition: Fitch expects RSA to be exposed to
intensifying competition across each of its core end markets,
including market leaders, who are larger and have greater financial
flexibility. RSA is recognized as a market leader in the identity
management market, which is a significant market opportunity, as
customers migrate to more remote working and deploy hybrid,
multicloud environments. Newer entrants such as Okta offer hybrid
cloud and cloud native solutions, which positions them to gain
share, while Microsoft will benefit from its sizable installed
base.
Strong FCF Characteristics: Pro Forma for its cost
rationalizations, Fitch projects RSA will generate normalized FCF
margins in the mid-teens from fiscal 2022 onwards. Despite the high
interest burden, FCF margins are buoyed by modest capex and working
capital needs. In the near term, Fitch expects a modest impact to
FCF as some of the company's customers shift from term licenses to
a subscription-based model.
However, Fitch believes RSA's private equity ownership could limit
deleveraging to optimize return on equity.
DERIVATION SUMMARY
Fitch's ratings and outlook for RSA are supported by the company's
mature technology platforms that result in a stable customer base
and highly recurring revenues. The ratings also reflect Fitch's
expectation that despite strong secular demand for cybersecurity
and risk and compliance software, RSA's growth will underperform
that of the sector. RSA's transition to hybrid cloud offerings has
lagged the market, allowing new entrants to gain market share.
Additionally, RSA relies heavily on the sale and renewal of
licenses as opposed to a subscription-based model, affecting the
quality of its revenues relative to its peers. Pro forma for the
cost rationalization and incremental back-office expenses, RSA's
EBITDA margins and FCF margins are in line with Fitch's software
universe and exceed margins for public cloud-based peers such as
Zscaler, Okta and LogMeIn.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within its Rating Case for the Issuer:
-- Strong revenue growth in fiscal 2021 buoyed by robust demand
for SecurID. Longer term organic revenue growth in the low
single-digit range.
-- EBITDA margins are expected to improve to the 30% range driven
by cost rationalization and offshoring initiatives.
-- Normalized free cash flow margins in the low teens.
The recovery analysis assumes a going concern EBITDA that is in
line with pro forma LTM 4/30/2020 EBITDA, excluding any cost
savings. Fitch applies a 6.5x multiple to arrive at an enterprise
value of $1.1 billion. The multiple is higher than the median
Telecom, Media and Technology EV multiple, but is in line with
other similar companies that exhibit strong FCF characteristics. In
the 21st edition of Fitch's Bankruptcy Enterprise Values and
Creditor Recoveries case studies, Fitch noted nine past
reorganizations in the Technology sector with recovery multiples
ranging from 2.6x to 10.8x. Of these companies, only three were in
the software sector: Allen Systems Group, Inc.; Avaya, Inc.; and
Aspect Software Parent, Inc., which received recovery multiples of
8.4x, 8.1x and 5.5x, respectively. The 6.5x multiple reflects the
early stages of the company's transition to a subscription-based
model, RSA's strong FCF profile and highly recurring revenue base.
Median trading multiples for the sector are in the double-digit
range.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Total leverage sustained below 4.0x;
-- Sustained revenue growth of mid-single digits, implying stable
market position;
-- FFO interest coverage sustaining above 3.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Fitch's expectation for total leverage sustaining above 5.5x;
-- Sustained negative revenue growth, signaling competitive
disadvantages in the SaaS offering and customer losses for Identity
Management segment;
-- Erosion of EBITDA and FCF margins related to higher stand-up
costs or delays in executing the cost rationalization.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Pro forma for the transaction, RSA will have $90 million of cash on
its balance sheet along with full availability of its $75 million
revolving credit facility. Fitch expects elevated cash outflows in
fiscal 2021 related to one-time costs to stand up its offshore
centers as well as expenses related to its cost optimization
efforts, ending the year with $30 million of FCF. Fitch forecasts
RSA's FCF margins to normalize in the midteens by fiscal 2022 after
cost optimization efforts are executed.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has made no material adjustments that are not disclosed
within the company's public filings.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
REDSTONE BUYER: Moody's Assigns B2 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service assigned a B2 corporate family rating to
first time issuer Redstone Buyer LLC (RSA Security). Moody's also
assigned a B1 instrument rating to the company's proposed first
lien credit facility, Caa1 instrument rating to the company's
proposed second lien term loan and B2-PD probability of default
rating. The credit facilities will be used to fund the acquisition
of RSA Security by private equity firm Symphony Technology Group
from Dell Technologies for $2.075 billion. The outlook is stable.
RATINGS RATIONALE
The B2 CFR is supported by the company's leading position across
various enterprise cybersecurity and risk management software
markets, favorable demand drivers in the security software industry
and expectations for improving leverage through cost synergies
towards 6.0x. Offsetting these strengths are the company's high
initial leverage at deal close, challenges of separating as a
stand-alone company while simultaneously restructuring operations
and limited free cash flow generation over the next 12-18 months.
RSA has been updating and modernizing its platforms including its
cloud capabilities over the past several years after falling behind
several of its competitors. Though the company has made significant
progress, the competitive environment remains challenging and
continued investment is likely required to further grow the
business. Pro forma leverage at closing is approximately 8.7x
excluding certain one-time costs and Dell corporate allocations
(and 10.0x including those items). STG will enact a restructuring
plan, which combined with low single-digit percentage revenue
growth has the potential to drive adjusted debt leverage to 6.0x
over the next 12-18 months. Given the hurdles before leverage gets
to these levels, the company is considered weakly positioned in the
B2 ratings category.
The stable outlook reflects Moody's expectation that RSA will grow
revenue in the low single digit percentage range, improve its
run-rate EBITDA margin to the mid 20% range and drive leverage
towards 6x over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Though unlikely in the near term, Moody's would consider an upgrade
of RSA's CFR if the company is able to grow revenues, maintain or
improve market share, leverage is sustained below 5x (including
Moody's adjustments) and free cash flow to debt is sustained above
10%.
Moody's would consider a downgrade of RSA's CFR if performance
deteriorates as a result of the separation or restructuring plan,
leverage remains over 7.0x (including Moody's adjustments) on other
than a temporary basis, or cash flow to debt is not on track
towards 5% by FY 2022 (FYE January) or if liquidity otherwise
deteriorates.
Liquidity is good based on a pro forma cash balance of $90 million,
although a portion of this cash balance is earmarked for certain
one-time costs in the first 12 months related to the cost savings
plan and the stand-up costs related to the carve-out from Dell
Technologies. Moody's expects the company to generate minimal free
cash flow in the first 12 months of deal close due to these
one-time costs. The company will also have a $75 million undrawn
revolving credit facility at closing.
Assignments:
Issuer: Redstone Buyer LLC (RSA Security)
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Gtd Senior Secured 1st Lien Revolver Credit Facility, Assigned B1
(LGD3)
Gtd Senior Secured 1st Lien Term Loan, Assigned B1 (LGD3)
Gtd Senior Secured 2nd Lien Term Loan, Assigned Caa1 (LGD5)
Outlook Actions:
Issuer: Redstone Buyer LLC (RSA Security)
Outlook, Assigned Stable
RSA Security is an enterprise security software company. with
approximately $840 million of revenue for the fiscal year ended
January 31, 2020. Symphony Technology Group will be the majority
owners of RSA Security at close of the transaction.
The principal methodology used in these ratings was Software
Industry published in August 2018.
RELIABLE PROFESSIONAL: Hires Frost & Associates as Counsel
----------------------------------------------------------
Reliable Professional Services, LLC, seeks authority from the
United States Bankruptcy Court for the District of Maryland to
employ Daniel A. Staeven, Esq. and Frost & Associates, LLC, as its
bankruptcy counsel.
The professional services Frost will provide are:
a. provide the Debtor with legal advice with respect to its
powers and duties in the operation of its business and the
management of its properties pursuant to the Bankruptcy Code;
b. prepare on behalf of the Debtor all necessary applications,
answers, orders, reports and other legal papers;
c. assist in analyses and representation with respect to
lawsuits to which the Debtor is or may be a party;
d. negotiate, prepare, file and seek approval of a plan of
reorganization;
e. represent the Debtor at all hearings, meetings of creditors
and other proceedings; and
f. perform all other legal services for the Debtor which may
be necessary to serve the best interests of the Debtor and its
bankruptcy estate in this proceeding. Such services may include, at
the Debtor's request, legal representation with respect to
litigation, securities, transactional, tax and other matters, and
Chapter 11 reorganization.
The Debtor paid to Frost an advance retainer of $17,500 of which
$15,221 was applied to prepetition invoices.
Frost neither represents nor holds any interest adverse to the
Debtor or its estate, and is a disinterested party, as that term is
defined in section 101(14) of the Bankruptcy Code, according to
court filings.
The counsel can be reached through:
Daniel A. Staeven, Esq.
FROST & ASSOCIATES, LLC
839 Bestgate Road, Suite 400
Annapolis, MD 21401
Tel: 410-497-4957
E-mail: daniel.staeven@frosttaxlaw.com
About Reliable Professional Services
Reliable Professional Services is a provider of school and employee
bus transportation services.
Reliable Professional Services, LLC, filed its voluntary petition
under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No.
20-15611) on May 29, 2020. The petition was signed by Angel
Sutton-Richardson, president. At the time of filing, the Debtor
estimated $4,296,138 in assets and $6,588,888 in liabilities.
Daniel A. Staeven, Esq. at FROST & ASSOCIATES, LLC represents the
Debtor as counsel.
RELIABLE PROFESSIONAL: Hires PJT Partners as Investment Banker
--------------------------------------------------------------
Reliable Professional Services, LLC, seeks authority from the
United States Bankruptcy Court for the District of Maryland to
employ PJT Partners LP, as its investment banker.
Reliable Professional requires PJT Partners to:
a. assist in the evaluation of the Debtors' businesses and
prospects;
b. assist in the development of the Debtors' long-term
business plan and related financial projections;
c. assist in the development of financial data and
presentations to the Debtors' Board of Directors, various creditors
and other third parties;
d. analyze various restructuring scenarios and the potential
impact of these scenarios on the recoveries of those stakeholders
impacted by the Restructuring;
e. provide strategic advice with regard to restructuring or
refinancing the Debtors' obligations;
f. evaluate the Debtors' debt capacity and alternative capital
structures;
g. participate in negotiations among the Debtors and their
creditors, suppliers, lessors, and other interested parties;
h. value securities offered by the Debtors in connection with
a Restructuring;
i. advise the Debtors and negotiate with lenders with respect
to potential waivers or amendments of various credit facilities;
j. assist in arranging financing for the Debtors, as
requested;
k. provide expert witness testimony concerning any of the
subjects encompassed by the other investment banking services;
l. assist the Debtors in preparing marketing materials in
conjunction with a possible Transaction;
m. assist the Debtors in identifying potential buyers or
parties in interest to a Transaction and assist in the due
diligence process;
n. assist and advise the Debtors concerning the terms,
conditions and impact of any proposed Transaction; and
o. provide such other advisory services as are customarily
provided in connection with the analysis and negotiation of a
transaction similar to a potential Restructuring and/or
Transaction, as requested and mutually agreed.
PJT Partners will be paid as follows:
a. Monthly Fee. The Debtors shall pay PJT a monthly advisory
fee of $175,000 per month. Fifty percent of all Monthly Fees paid
to PJT after the sixth Monthly Fee has been paid shall be credited,
only once and without duplication, against any Restructuring Fee or
Transaction Fee.
b. Capital Raising Fee. The Debtors shall pay PJT a capital
raising fee for any financing arranged by PJT, earned and payable
upon receipt of a binding commitment letter. The Capital Raising
Fee will be calculated as:
-- Senior Debt. 1.5 percent of the total issuance size for
senior debt financing;
-- Junior Debt. 2.0 percent of the total issuance size for
junior debt financing; and
-- Equity Financing. 4.0 percent of the issuance amount
for equity financing.
Provided that if any portion of an equity or debt financing
arranged by PJT is provided by any party who is, as of the
Effective Date, either (i) an existing holder of debt in the
Debtors or (ii) an existing equity holder of the Debtors or an
affiliate of an existing equity holder, then the Capital Raising
Fee with respect to such portion of such equity or debt financing
shall be reduced by 50 percent. Provided further that no Capital
Raising Fee will be earned or payable with respect to any
debt-for-debt exchange offer other than to the extent of "money"
financing provided in connection therewith.
In addition, and notwithstanding anything contained in the
Engagement Letter to the contrary, PJT has agreed to credit, only
once and without duplication, up to $1 million of Capital Raising
Fees paid to PJT under the Engagement Letter against any
Restructuring Fee or Transaction Fee payable to PJT under the
Engagement Letter.
c. Restructuring Fee. The Debtors shall pay PJT a
restructuring fee equal to $8,000,000 upon the consummation of a
Restructuring, in accordance with the Engagement Letter.
d. Transaction Fee. Upon consummation of a Transaction, the
Debtors shall pay PJT a transaction fee of 1.0 percent of the
Transaction Value. Upon consummation of a Transaction in which all
or substantially all of the assets of the Debtors are sold, PJT, in
its sole discretion, shall be entitled to either a Transaction Fee
or the Restructuring Fee, but not both.
PJT Partners will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Jamie Baird, partner of PJT Partners LP, assured the Court that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code and does not represent any interest
adverse to the Debtors and their estates.
PJT Partners can be reached at:
Jamie Baird
PJT PARTNERS LP
280 Park Avenue
New York, NY 10017
Tel: (212) 364-7800
About Reliable Professional Services
Reliable Professional Services is a provider of school and employee
bus transportation services.
Reliable Professional Services, LLC, filed its voluntary petition
under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No.
20-15611) on May 29, 2020. The petition was signed by Angel
Sutton-Richardson, president. At the time of filing, the Debtor
estimated $4,296,138 in assets and $6,588,888 in liabilities.
Daniel A. Staeven, Esq. at FROST & ASSOCIATES, LLC represents the
Debtor as counsel.
RENEW CHIROPRATIC: Seeks to Hire Williams Turner as Counsel
-----------------------------------------------------------
Renew Chiropratic GJ LLC seeks authority from the US Bankruptcy
Court for the District of Colorado to employ Williams, Turner &
Holmes, PC, as its counsel.
Services the counsel will render are:
a. preparation of all necessary reports, orders and other
legal papers required in the Chapter 11 proceeding;
b. perform all legal services for Debtor which may become
necessary;
c. represent the Debtor in any litigation which the Debtor
determines is the best interest of the estate.
Phillip J. Jones, Esq., shareholder of Williams Turner, will charge
$225 per hour for his services.
Mr. Jones attests that the firm represents that it has no interest
adverse to the Debtor or to the estate in the matters upon which it
is to be engaged, and is a "disinterested person" as that term is
defined in Sec. 101(14) of the Bankruptcy Code.
The firm can be reached through:
Phillip J. Jones, Esq.
Williams, Turner & Holmes, PC
744 Horizon Court, Suite 115
Grand Junction, CO 81506
Phone: 970-242-6262
Fax: 970-241-3026
About Renew Chiropratic GJ LLC
Renew Chiropratic GJ LLC is engaged in Chiropatic services.
Renew Chiropratic GJ LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Colo. Case No. 20-13230) on May 12, 200,
listing under $1 million in both assets and liabilities. Phillip
J. Jones, Esq. at Williams, Turner & Holmes, PC, represents the
Debtor as counsel.
RR3 RESOURCES: Hires Daszkal Bolton as Accountant
-------------------------------------------------
RR3 Resources LLC and Recycling Revolution LLC seek permission from
the U.S. Bankruptcy Court for the Southern District of Florida to
employ Daszkal Bolton LLP as their accountant.
Services the accountant will render are:
a. review and analyse tax considerations of the bankruptcy
estate;
b. prepare tax returns for the estate for the year 2019 and
beyond as needed;
c. coordinate with all other estate professionals and assist
such professionals in carrying their duties; and
d. render such assistance in the nature of accounting services
as the Debtors may deem necessary.
Brett Burgan, CPA, assures the Court that the Firm does not hold
nor represent an adverse interest to the Debtor or the estate and
is disinterested under 11 U.S.C. Section 101(14).
The accountant can be reached through:
Brett Burgan, CPA
Daszkal Bolton LLP
2401 NW Boca Raton Blvd
Boca Raton, FL 33431
Phone: +1 561-367-1040
About Recycling Revolution
Recycling Revolution, LLC -- http://www.RecyclingRevolution.net/--
is a recycling company specializing in low end, contaminated, and
hard to handle materials. Recycling Revolution purchases all types
of plastic, metal and electronic waste, including HDPE bottles, PET
bottles, commingled bottles, and HDPE mixed rigid bottles.
Recycling Revolution sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-25063) on Nov. 7,
2019. Judge Mindy A. Mora is assigned to the case. In the
petition signed by its member/president, Robin Seskin, the Debtor
disclosed $365,896 in assets and $9,318,956 in debt.
RR3 Resources LLC filed a voluntary Chapter 11 Petition (Bankr.
S.D. Fla. Case No. 19-25063) on Nov. 7, 2019. In its petition, the
Debtor disclosed under $1 million in both assets and liabilities.
The cases are jointly administered with Recycling Revolution's as
the lead case.
Joe M. Grant, Esq., at Marshall Grant, PLLC, serves as the Debtors'
counsel.
SAMI SELIM PALA: Proposed Sale of CSM's Wayne Property Approved
---------------------------------------------------------------
Judge John K. Sherwood of the U.S. Bankruptcy Court for the
District of New Jersey authorized (i) the short sale by Debtor Sami
Pala's solely-owned LLC, CSM Property Investments, LLC, of the real
property at 219 Valley Road, Wayne, New Jersey, in the ordinary
course of business or, in the alternative, the short sale by Debtor
Sami Selim Pala of said real property; and (ii) authorize the
payment of real estate commissions and closing costs.
The sale is free and clear of the liens of lender Lavallette
Capital LLC (as lender and as servicer for the co-lender) and of
co-lender Restashore Capital, LLC, upon the terms and conditions
of: the short sale consent annexed to the Motion as Exhibit B of
Pacer #57-2, and the contract of sale annexed to the Motion as
Exhibit C to Pacer #57-2.
The parties are authorized to enter into the contract of sale and
perform it according to its terms.
The 14-day stay of the Order under Fed. R. Bankr. P. 6004(h) is
waived, for cause, and the Order is effective immediately upon its
entry.
True copies of the Order will be served by the Debtors on all
parties requiring notice of the motion, within one day of the entry
of this Order, pursuant to LBR 5005-1(c) and 5005-1(d).
The bankruptcy case is In re: Sami Selim Pala and Gulsum Cakir
Pala, (Bankr. D. N.J. Case No. 19-26210-JKS).
SCIENTIFIC GAMES: Moody's Rates $350MM Senior Unsec. Notes 'Caa2'
-----------------------------------------------------------------
Moody's Investors Service assigned a Caa2 rating to Scientific
Games International, Inc.'s proposed $350 million senior unsecured
notes due 2025. The company's existing ratings, including the B3
Corporate Family Rating and B3-PD Probability of Default Rating,
remain unchanged. The company's existing B1 rated senior secured
facilities and existing Caa2 rated senior unsecured and senior
subordinated notes are unchanged. The company's Speculative Grade
Liquidity rating is unchanged at SGL-3 and the outlook remains
negative.
Proceeds from the proposed $350 million senior unsecured notes, net
of fees and expenses, will be used to redeem the company's $341.0
million 6.625% senior subordinated notes due May 2021. The
transaction is viewed as a credit positive for the company as it is
addressing a near term maturity and relieving refinancing risk. The
company's next notable maturity is 2024 when its revolver and $4
billion term loan come due. The B3 CFR and negative outlook are not
currently affected as the transaction does not alleviate the
pressure on revenue, earnings and free cash flow from casino
shutdowns and reduced utilization. Moody's also previously believed
the company had sufficient cash and unused revolver capacity to
address the maturity.
Assignments:
Issuer: Scientific Games International, Inc.
Gtd. Senior Unsecured Regular Bond/Debenture, Assigned Caa2 (LGD5)
RATINGS RATIONALE
Scientific Games' B3 Corporate Family Rating reflects the
meaningful revenue and earnings decline over the next few months
expected from efforts to contain the coronavirus and the potential
for a slow recovery once its gaming customers' properties reopen.
The rating also considers the company's significant leverage level
in part from acquisitions over the last six years. Revenue is also
highly exposed to cyclical discretionary consumer spending. SGI had
been able to reduce leverage levels more recently, although Moody's
expects debt/EBITDA (over 7x as of March 2020) will remain high
through fiscal 2020. A significant key rating consideration is the
flat outlook for slot machine demand which will pressure the
company's Gaming Operations segment. Revenues are largely tied to
the volume of both gaming machine play and lotteries. Positive
rating consideration is given to SGI's large recurring revenue base
during normal operational periods. The company is also well
positioned to benefit from the growth of digital gaming products
and sports betting, as these markets continue to expand and mature.
SGI owns a large portfolio of complementary gaming products and
services, both digital and non-digital, that it can utilize and
cross-sell globally among its various distribution platforms.
The company's speculative-grade liquidity rating of SGL-3 reflects
the expected decline in earnings and cash flow. SGI has amended its
credit facility and covenant levels providing covenant relief
through Q1 2021. The company is subject to a minimum liquidity
covenant of $275 million, which Moody's believes it will remain in
compliance with. As of March 31, 2020, SGI had unrestricted cash of
$334 million. After the end of the quarter, the company drew down
the remaining $480 million of availability on its $650 million
facility. Moody's estimates the company could maintain sufficient
internal cash sources after maintenance capital expenditures to
meet required annual amortization and interest requirements
assuming a sizeable decline in annual EBITDA. The expected EBITDA
decline will not be ratable over the next year and because EBITDA
and free cash flow will be negative for an uncertain time period,
liquidity and leverage could deteriorate quickly over the next few
months.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The gaming sector
has been one of the sectors most significantly affected by the
shock given its sensitivity to consumer demand and sentiment. More
specifically, the weaknesses in Scientific Games' credit profile,
including its exposure to travel disruptions and discretionary
consumer spending have left it vulnerable to shifts in market
sentiment in these unprecedented operating conditions and
Scientific Games 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. Scientific Games' rating reflects the impact on the
company of the breadth and severity of the shock, and the broad
deterioration in credit quality it has triggered.
The negative outlook considers that Scientific Games remains
vulnerable to travel disruptions and unfavorable sudden shifts in
discretionary consumer spending and the uncertainty regarding the
timing of its customers facility re-openings and the pace at which
consumer spending at these properties will recover.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if liquidity deteriorates or if Moody's
anticipates Scientific Games' earnings declines to be deeper or
more prolonged because of actions to contain the spread of the
virus or reductions in discretionary consumer spending.
A ratings upgrade is unlikely given the weak operating environment.
However, the ratings could be upgraded if customers facilities
reopen and earnings recover such that positive free cash flow and
reinvestment flexibility is restored and debt-to-EBITDA is
sustained near 6.0x.
Scientific Games is a developer of technology-based products and
services and associated content for worldwide gaming, lottery,
social and digital gaming markets. Scientific Game Corporation
(NASDAQ: SGMS) is the publicly traded parent company of Scientific
Games International, Inc., the direct borrower of over $8 billion
of rated debt. Consolidated revenue for the latest 12-month period
ended March 31, 2020 was $3.3 billion.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
SKILLSOFT CORP: Pachulski, Gibson Represent First Lien Group
------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Gibson, Dunn & Crutcher LLP and Pachulski, Stang
Ziehl & Jones LLP submitted a verified statement that they are
representing the Ad Hoc First Lien Term Lender Group in the Chapter
11 cases of Skillsoft Corporation, et al.
In October 2019, the Ad Hoc First Lien Term Lender Group retained
Gibson, Dunn & Crutcher LLP to represent them as counsel in
connection with a potential restructuring of the outstanding debt
obligations of the above-captioned debtors and certain of their
subsidiaries and affiliates. Subsequently, on or about June 9,
2020, Gibson Dunn contacted Pachulski, Stang Ziehl & Jones LLP to
serve as Delaware co-counsel to the Ad Hoc First Lien Term Lender
Group.
Gibson Dunn and PSZ&J represent the members of the Ad Hoc First
Lien Term Lender Group in their capacity as lenders under that
certain First Lien Credit Agreement, dated as of April 28, 2014 by
and among Evergreen Skills Intermediate Lux S.à r.l., Evergreen
Skills Lux S.à r.l., Skillsoft Canada Ltd., and Skillsoft
Corporation, as borrowers, the lenders from time to time party
thereto, and Wilmington Savings Fund Society, FSB, as
administrative agent and collateral agent.
Gibson Dunn and PSZ&J do not represent or purport to represent any
other entities in connection with the Debtors' chapter 11 cases.
Gibson Dunn and PSZJ do not represent the Ad Hoc First Lien Term
Lender Group as a "committee" and do not undertake to represent the
interests of, and are not fiduciaries for, any creditor, party in
interest, or other entity that has not signed a retention agreement
with Gibson Dunn and PSZ&J. In addition, the Ad Hoc First Lien Term
Lender Group does not represent or purport to represent any other
entities in connection with the Debtors' chapter 11 cases.
Upon information and belief formed after due inquiry, Gibson Dunn
and PSZ&J do not hold any disclosable economic interests in
relation to the Debtors.
As of June 16, 2020, members of the Ad Hoc First Lien Term Lender
Group and their disclosable economic interests are:
Eaton Vance Management
Two International Place
Boston, MA 02110
* First Lien Credit Agreement Claims Held: $171,810,088.39
DDJ Capital Management, LLC
1 30 Turner Street Building 3
Suite 600
Waltham, MA 02453
* First Lien Credit Agreement Claims Held: $101,312,069.28
Symphony Asset Management LLC
555 California Street #3100
San Francisco, CA 94104
* First Lien Credit Agreement Claims Held: $80,657,447.81
* Second Lien Credit Agreement Claims Held: $26,237,493.31
Alcentra Limited
160 Queen Victoria Street
EC4V 4LA London
United Kingdom
Alcentra NY LLC
200 Park Avenue
7th Floor
New York, NY 10166
* First Lien Credit Agreement Claims Held: $64,699,560.44
Apollo Management Holdings, L.P.
9 West 57th Street
43rd Floor
New York, NY 10019
* First Lien Credit Agreement Claims Held: $52,792,948.78
* Second Lien Credit Agreement Claims Held: $3,385,000.00
Benefit Street Partners, LLC
9 West 57th Street
Suite 4920
New York, NY 10019
* First Lien Credit Agreement Claims Held: $52,508,789.00
Voya Investment Management
7337 E. Doubletree Ranch Rd.
Suite 100
Scottsdale, AZ 85258
* First Lien Credit Agreement Claims Held: $40,899,590.00
PGIM, Inc.
655 Broad St
Newark, NJ 07102
* First Lien Credit Agreement Claims Held: $38,468,737.61
Beach Point Capital Management LP
1620 26th Floor #6000n
Santa Monica, CA 90404
* First Lien Credit Agreement Claims Held: $13,749,199.23
Apex Credit Partners LLC
520 Madison Avenue, Floor 16
New York, NY 10022
* First Lien Credit Agreement Claims Held: $12,294,355.72
* Second Lien Credit Agreement Claims Held: $2,999,750.21
CION Investment Corporation
3 Park Avenue
New York, NY 10016
* First Lien Credit Agreement Claims Held: $10,050,474.81
* Second Lien Credit Agreement Claims Held: $9,999,167.00
Ellington CLO Management, LLC
53 Forest Avenue
Old Greenwich, CT 06870
* First Lien Credit Agreement Claims Held: $9,909,735.85
GMO Implementation Fund, a series of GMO Trust
40 Rowes Wharf
Boston, MA 02110
* First Lien Credit Agreement Claims Held: $6,486,202.50
GMO Credit Opportunities Fund, L.P.
40 Rowes Wharf
Boston, MA 02110
* First Lien Credit Agreement Claims Held: $2,845,685.84
Counsel to the Ad Hoc First Lien Term Lender Group can be reached
at:
PACHULSKI STANG ZIEHL & JONES LLP
Laura Davis Jones, Esq.
James E. O'Neill, Esq.
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899
Telephone: (302) 652-4100
Facsimile: (302) 652-4400
Email: ljones@pszjlaw.com
joneill@pszjlaw.com
- and -
GIBSON, DUNN & CRUTCHER LLP
Scott J. Greenberg, Esq.
Matthew J. Williams, Esq.
Christina Brown, Esq.
200 Park Avenue
New York, NY 10166
Telephone: (212) 351-4000
Facsimile: (212) 351-4035
Email: sgreenberg@gibsondunn.com
mjwilliams@gibsondunn.com
christina.brown@gibsondunn.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/Zx1XLf and https://is.gd/Ez1F7K
About Skillsoft and SumTotal
Skillsoft -- http://www.skillsoft.com/-- delivers online learning,
training, and talent solutions to help organizations unleash their
edge. Leveraging immersive, engaging content, Skillsoft enables
organizations to unlock the potential in their best assets -- their
people -- and build teams with the skills they need for success.
Empowering 36 million learners and counting, Skillsoft
democratizes learning through an intelligent learning experience
and a customized, learner-centric approach to skills development
with resources for Leadership Development, Business Skills,
Technology & Development, Digital Transformation, and Compliance.
SumTotal provides a unified, comprehensive Learning and Talent
Development suite that delivers measurable impact across the entire
employee lifecycle. With SumTotal, organizations can build a
culture of learning that is critical to growth, success, and
business sustainability. SumTotal's award-winning technology
provides talent acquisition, onboarding, learning management, and
talent management solutions across some of the most innovative,
complex and highly regulated industries, including technology,
airlines, financial services, healthcare, manufacturing, and
pharmaceuticals.
Skillsoft and SumTotal are partners to thousands of leading global
organizations, including many Fortune 500 companies. The company
features three award-winning systems that support learning,
performance and success: Skillsoft learning content, the Percipio
intelligent learning experience platform, and the SumTotal suite
for Talent Development, which offers measurable impact across the
entire employee lifecycle.
SM ENERGY: $295.8 Million of Old Notes Tendered in Exchange Offer
-----------------------------------------------------------------
SM Energy Company reported the final results of its offers to
exchange its outstanding notes for newly issued 10.00% senior
secured notes due 2025. As of 11:59 p.m., New York City time, on
June 12, 2020, approximately $295.8 million aggregate principal
amount, or approximately 12% of all outstanding Old Notes, were
validly tendered and not validly withdrawn, excluding principal
amounts of Old Notes tendered pursuant to the previously announced
exchange agreement entered into by the Company with certain holders
of the Old Notes. Together with the Old Notes and 1.50% Senior
Convertible Notes due 2021 to be exchanged pursuant to the Exchange
Agreement, the Company expects to exchange approximately $612
million aggregate principal amount of Old Notes and approximately
$107.0 million aggregate principal amount of Old Convertible Notes
and issue approximately $447 million in aggregate principal amount
of New Notes on the settlement date, which is expected to be on or
about June 17, 2020. After giving effect to the Exchange Offers
and the private exchanges with the Backstop Group, the Company
expects to reduce its outstanding senior debt by approximately $272
million.
The following table sets forth the approximate aggregate principal
amounts of each series of Old Notes that were validly tendered and
not validly withdrawn on or prior to the Expiration Time, other
than Old Notes tendered pursuant to the Exchange Agreement:
Principal Amount
of Old Notes
Title of Old Notes Tendered Tendered
--------------------------- ----------------
6.125% Senior Notes due November 15, 2022 $45,017,000
5.000% Senior Notes due January 15, 2024 $81,151,000
5.625% Senior Notes due June 1, 2025 $104,564,000
6.750% Senior Notes due September 15, 2026 $43,115,000
6.625% Senior Notes due January 15, 2027 $22,007,000
Based on these results, the Company expects to accept all Old Notes
tendered for exchange and issue New Notes as consideration therefor
on the Settlement Date. The New Notes issued in the privately
negotiated transactions will be fungible with, and comprise one
series with, the New Notes issued in the Exchange Offers.
Holders of Old Notes accepted for exchange will also receive a cash
payment equal to the accrued and unpaid interest on such accepted
Old Notes from the applicable latest interest payment date to, but
not including, the Settlement Date. Interest on the New Notes will
accrue from the Settlement Date.
The Company expects that approximately $65.5 million in principal
amount of Old Convertible Notes that remain outstanding after the
Settlement Date will be secured pursuant to their terms on a pari
passu basis with the New Notes (and any refinancing of such amount
of Old Convertible Notes will also be required to be secured on a
pari passu basis with the New Notes).
In conjunction with the Exchange Offers, SM Energy also announced
the results to date of its solicitations of consents from holders
of Old Notes to amend certain provisions of the indentures
governing the Old Notes. The Company did not receive consents
sufficient to effect the Proposed Amendments in any series of Old
Notes. As such, the Proposed Amendments will not be adopted or
become operative.
The Exchange Offers were only made, and the New Notes were offered
and to be issued only, (a) in the United States to holders of Old
Notes who are reasonably believed to be "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act) and (b)
outside the United States to holders of Old Notes who are persons
other than U.S. persons in reliance upon Regulation S under the
Securities Act. The holders of Old Notes who certified to the
Company that they were eligible to participate in the Exchange
Offers pursuant to at least one of the foregoing conditions are
referred to as "Eligible Holders." The Company made the Exchange
Offers only to Eligible Holders through, and pursuant to, the terms
of the Confidential Offering Memorandum, as amended.
The New Notes and the Exchange Offers have not been and will not be
registered with the U.S. Securities and Exchange Commission under
the Securities Act, or any state or foreign securities laws. The
New Notes may not be offered or sold in the United States or for
the account or benefit of any U.S. persons except pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act. The Exchange
Offers and Consent Solicitations were not made to Eligible Holders
of Old Notes in any jurisdiction in which the making or acceptance
thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. This press release is for
informational purposes only and is not an offer to purchase or a
solicitation of an offer to purchase or sell any securities, nor
shall there be any sale of any securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.
About SM Energy
SM Energy Company -- http://www.sm-energy.com/-- is an independent
energy company engaged in the acquisition, exploration,
development, and production of crude oil, natural gas, and NGLs in
the state of Texas.
SM Energy recorded a net loss of $187 million for the year ended
Dec. 31, 2019.
* * *
As reported by the TCR on May 5, 2020, Moody's Investors Service
downgraded SM Energy Company's Corporate Family Rating to Caa1 from
B3. The downgrade reflects the company's intention to issue new
secured debt to exchange for up to $1,681 million of its senior
unsecured notes at a 35% to 50% discount to par, a transaction
Moody's views as a distressed exchange and thus, a default.
Also in May 2020, Fitch Ratings downgraded SM Energy Company's
Issuer Default Rating to 'C' from 'B-' following the company's
announcement of an offer to exchange a series of senior secured
notes for new second lien notes.
SOGIO INVESTMENTS: Seeks Approval to Hire Holder Law as Counsel
---------------------------------------------------------------
Sogio Investments, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to employ Holder Law as
its counsel.
Holder Law may render the following services to the Debtor:
(a) provide legal advice with respect to Debtor's powers and
duties as debtor-in-possession in the continued operation of its
business and the management of its property;
(b) take all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on behalf of
the Debtor, the defense of any actions commenced against the
Debtor, negotiations concerning litigation in which the Debtor is
involved, and objections to claims filed against the Debtor's
estate; however, the defense or prosecution of any adversary
proceedings by Holder Law shall require the separate agreement of
Debtor and Holder Law;
(c) prepare on behalf of the Debtor all necessary motions,
answers, orders, reports, and other legal papers in connection with
the administration of its estate herein;
(d) assist the Debtor in preparing for and filing one or more
disclosure statements in accordance with Section 1125 of the
Bankruptcy Code;
(e) assist the Debtor in preparing for and filing one or more
plans of reorganization at the earliest possible date;
(f) perform any and all other legal services for the Debtor in
connection with the Chapter 11 case; and
(g) perform such legal services as the Debtor may request with
respect to any matter, including, but not limited to, corporate
finance and governance, contracts, antitrust, labor, and tax.
Holder Law will charge for time at its normal billing rates for
attorneys and legal assistants and will request reimbursement for
its out-of-pocket expenses. All fees and expenses will be subject
to Bankruptcy Court approval.
On April 3, 2020, the firm received from the Debtor funds in the
amount of $16,717.00. Prior to the filing of this Chapter 11
bankruptcy, the firm applied $8,085.00 from funds received for
attorney's fees and $1,717.00 for the Chapter 11 filing fee. These
funds were earned and deposited pre-petition into the firm's
operating account. The remaining funds in the amount of $6,915.00
were immediately deposited into the firm's retainer account.
Areya Holder Aurzada, an attorney with Holder Law, 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:
Areya Holder Aurzada, Esq.
HOLDER LAW
901 Main Street, Suite 5320
Dallas, TX 75202
Telephone: (972) 438-8800
E-mail: areya@holderlawpc.com
About Sogio Investments
Sogio Investments, LLC -- https://www.thesogiobuilding.com – owns
and operates The SoGio Building, a 70,000 sq.ft. state of the art
office building located in Keller, Texas. Sogio Investments, LLC
filed a Chapter 11 bankruptcy petition (Bankr. N.D. Tex. Case No.
20-41918) on May 29, 2020. At the time of the filing, the Debtor
disclosed total assets of $13,761,268 and total liabilities of
$11,294,174. The petition was signed by Fernando Sotelo, its
member. Judge Edward L. Morris oversees the case. Holder Law is the
Debtor's counsel.
SPERLING RADIOLOGY: Hires Kohlhagen Neiman as Tax Professional
--------------------------------------------------------------
Sperling Radiology P.C., P.A. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Kohlhagen, Neiman & Company, LLC as its tax professional.
Kohlhagen will prepare and file the Debtors' relevant tax
documents.
Robert D. Kohlhagen, CPA will be the primary professional
responsible for providing accounting services to the Debtor. Mr.
Kohlhagen's hourly rate is $465.
The firm's hourly rates are:
Senior Partners $485
Junior Partners $414
Senior Staff $200 to $325
Junior Staff $100 to $175
Clerical Staff $78.75
Mr. Kohlhagen assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Robert D. Kohlhagen, CPA
Kohlhagen, Neiman & Company, LLC
297 S Washington Ave #2
Bergenfield, NJ 07621
Phone: +1 201-385-1100
About Sperling Radiology
Sperling Radiology P.C., P.A. is a privately held company in Delray
Beach, Fla., that offers radiology services.
Sperling Radiology filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
19-26480) on Dec. 10, 2019. In the petition signed by Sam
Farbstein, chief operating officer, the Debtor was estimated to
have $1 million to $10 million in both assets and liabilities.
Judge Mindy A. Mora oversees the case. Philip J. Landau, Esq. at
Shraiberg, Landau & Page, P.A., is the Debtor's counsel.
STA VENTURES: Seeks to Hire Peach Appraisal Group
-------------------------------------------------
STA Ventures, LLC seeks approval from the U.S. Bankruptcy Court for
the Northern District of Georgia to employ Peach Appraisal Group,
Inc.
The services to be provided by the firm include an appraisal of
approximately 1.769 acres of real property in Fulton County, Ga.,
and approximately 35.449 acres of real property in Walton County,
Ga.
Thomas Carson, a principal at Peach Appraisal Group, has agreed to
appraise the market value of: (i) the fee-simple ownership interest
in the 1.769 acre Fulton property for a retainer of $1,500, which
will be applied to a flat fee of not more than $2,000; and (ii) the
35.449 acre Walton property for a retainer of $1,500, which will be
applied to a flat fee of not more than $2,000.
In addition, Mr. Carson will charge $300 per hour for additional
services, including the preparation for and attendance at
depositions and court hearings.
Mr. Carson 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:
Thomas C. Carson
Peach Appraisal Group, Inc.
675 Charles Cox Drive
Canton, Georgia 30115
Telephone: (770) 345-1799
Email: Tccpeach@msn.com
About STA Ventures
STA Ventures, LLC, a limited liability corporation in Fulton
County, Ga., filed a Chapter 11 bankruptcy petition (Bankr. N.D.
Ga. Case No. 20-66843) on June 1, 2020. At the time of the filing,
Debtor disclosed assets of $1 million to $10 million and
liabilities of the same range. The petition was signed by Stephen
T. Allen, Debtor's managing member. Debtor tapped Chamberlain,
Hrdlicka, White, Williams & Aughtry as its legal counsel.
STA VENTURES: Taps Chamberlain Hrdlicka as Legal Counsel
--------------------------------------------------------
STA Ventures, LLC seeks approval from the U.S. Bankruptcy Court for
the Northern District of Georgia to employ Jimmy L. Paul, Drew V.
Greene, and Chamberlain, Hrdlicka, White, Williams & Aughtry
(Chamberlain Hrdlicka) as its legal counsel.
The professional services the law firm of Chamberlain Hrdlicka will
render include, but are not limited to:
(a) advise Debtor STA Ventures with respect to its powers and
duties as Debtor-in-Possession in the continued operation of its
business and management of its property;
(b) represent Debtor STA Ventures as Debtor-in-Possession in
disputes with creditors;
(c) prepare on behalf of Debtor STA Ventures as
Debtor-in-Possession of necessary applications, answers, orders,
reports and other legal papers, necessary to proceed in this
reorganization case;
(d) represent Debtor STA Ventures as Debtor-in-Possession in
any claims held by Debtor STA Ventures against third parties;
(e) advise Debtor STA Ventures as Debtor-in-Possession
regarding negotiations with creditors and participation in
negotiations with creditors;
(f) advise Debtor STA Ventures as Debtor-in-Possession in
connection with formulation of a reorganization plan;
(g) represent Debtor STA Ventures as Debtor-in-Possession in
connection with negotiation and documentation of any sale of real
estate and other assets; and
(h) all other things necessary for the proper representation
of Debtor STA Ventures as Debtor-in-Possession.
The normal hourly rate of lawyers with the firm of Chamberlain
Hrdlicka who will be performing services for the Debtor will be
within the range of $290.00 to $525.00 per hour. The normal rate
for paralegals will be $150.00 to $190.00 per hour.
The Debtor desires to employ the law firm of Chamberlain Hrdlicka,
Jimmy L. Paul, and Drew V. Greene, members of the law firm, under a
general retainer in the amount of $50,000.00 to be paid on behalf
of the Debtor by its sole member and manager, Stephen T. Allen.
$25,000 of the $50,000 retainer was paid pre-petition on May 29,
2020 and June 1, 2020. Stephen T. Allen has committed to pay on
behalf of the Debtor the additional $25,000 within the next few
days. All funds paid pre-petition and to be paid by Stephen T.
Allen post-petition will be held in escrow and applied only upon
entry of Court order authorizing payment.
Jimmy L. Paul, a member in the law firm of Chamberlain, Hrdlicka,
White, Williams & Aughtry, 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:
Jimmy L. Paul, Esq.
CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & AUGHTRY
191 Peachtree Street, NE
46th Floor
Atlanta, GA 30303-1747
Telephone: (404) 659-1410
E-mail: jimmy.paul@chamberlainlaw.com
About STA Ventures
STA Ventures, LLC, a limited liability corporation with principal
office address at 145 Houze Way, Roswell, Fulton County, Georgia,
filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No.
20-66843) on June 1, 2020. At the time of the filing, the Debtor
disclosed estimated assets of $1 million to $10 million and
estimated liabilities of the same range. The petition was signed by
Stephen T. Allen, its managing member. The Debtor tapped
Chamberlain, Hrdlicka, White, Williams & Aughtry as counsel and
Thomas C. Carson, PhD, MAI, of Peach Appraisal Group, Inc. as
appraiser.
STONEWALL MOTORS: Seeks to Hire Ivey McClellan as Counsel
---------------------------------------------------------
Stonewall Motors, Inc. seeks approval from the U.S. Bankruptcy
Court for the Middle District of North Carolina to employ the law
firm of Ivey, McClellan, Gatton & Siegmund, LLP as bankruptcy
counsel.
The professional services the law firm will render to the Debtor
include:
(a) represent the Debtor in a Chapter 11 bankruptcy to include
assistance in the investigation and examination of contracts,
leases, financing statements and other related documents to
determine the validity of such;
(b) determine the rights and priorities of lienholders;
(c) if any, advise in the preservation of the Debtor's
properties and assets; and
(d) generally assist the Debtor in the administration of this
estate.
The hourly rates of the firm's primary attorneys and paralegals
expected to provide services to the Debtor are as follows:
Dirk W. Siegmund $350
Charles M. Ivey, III $500
Samantha K. Brumbaugh $350
Darren A. McDonough $350
John M. Blust $300
Charles M. Ivey, IV $250
Jane Harrison $100
Melissa M. Murrell $100
Tabitha D. Coltrane $100
Heather Bray $100
The law firm has received no compensation from the Debtor or anyone
else on account of the Debtor, except as follows: $2,500.00 in
pre-petition services and reimbursement of $1,717.00 for Chapter 11
filing fees. Fees and reimbursement of expenses were deducted from
the $4,217.00 retainer paid by the Debtor on March 25, 2020 of
$2,500.00 and April 9, 2020 of $1,717.00. The firm retains $0.0 in
their trust account.
Dirk W. Siegmund, a partner in the law firm of Ivey, McClellan,
Gatton & Siegmund, LLP, 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:
Dirk W. Siegmund, Esq.
IVEY, MCCLELLAN, GATTON & SIEGMUND, LLP
100 South Elm Street, Suite 500
Greensboro, NC 27401
Telephone: (336) 274-4658
Facsimile: (336) 274-4540
E-mail: dws@iveymcclellan.com
About Stonewall Motors
Stonewall Motors, Inc., a company based in Graham, North Carolina,
filed a Chapter 11 bankruptcy petition (Bankr. M.D.N.C. Case No.
20-10497) on June 1, 2020, listing under $1 million in both assets
and liabilities. Ivey, McClellan, Gatton & Siegmund, LLP is the
Debtor's bankruptcy counsel.
TANGO DELTA: U.S. Trustee Unable to Appoint Committee
-----------------------------------------------------
The U.S. Trustee, until further notice, will not appoint an
official committee of unsecured creditors in the Chapter 11 case of
Tango Delta Financial, Inc., according to court dockets.
About Tango Delta Financial
Tango Delta Financial Inc., formely doing business as American
Student Financial Group Inc. (ASFG), is a Sarasota, Fla.-based
company that buys student loans for investment purposes.
On May 11, 2020, Tango Delta sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-03672). The
petition was signed by Tango Delta President Timothy R. Duoos. At
the time of the filing, Debtor disclosed assets of between $1
million and $10 million and liabilities of the same range. Debtor
is represented by Cole & Cole Law, P.A.
TONTO BASIN: Gets Approval to Hire Taylor Accounting Firm
---------------------------------------------------------
Tonto Basin Concrete, Inc. received approval from the U.S.
Bankruptcy Court for the District of Arizona to employ the firm of
Taylor Accounting & Tax, Inc. as accounting professional.
The firm will assist Debtor in the preparation of tax returns,
quarterly reports and year end payroll reports for a one year
period during the course of its Chapter 11 case.
The firm's accounting services are billed on a fixed fee basis as
follows:
Quarter Reports (April, July, Oct, Jan) $150 per Quarter
Annual Year End Payroll Reports $150 per Year
Annual Income Tax Return $525 per Year
Taylor Accounting & Tax is currently not holding any retainer and
does not require the payment of a retainer.
Lisa Taylor, a duly authorized Enrolled Agent at Taylor Accounting
& Tax, Inc., 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:
Lisa Taylor
TAYLOR ACCOUNTING & TAX, INC.
602 West Frontier Street
Payson, AZ 85541
Telephone: (928) 474-5615
Facsimile: (928) 474-5690
About Tonto Basin Concrete
Tonto Basin Concrete, Inc. sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-03540) on April 1,
2020, listing under $1 million for both assets and liabilities.
Allan D. NewDelman, Esq., at Allan D. NewDelman, P.C., represents
Debtor as counsel. Taylor Accounting & Tax, Inc. is Debtor's
accounting professional.
TOPAZ SOLAR: Fitch Hikes Rating on $1.1BB Secured Notes to 'BB'
---------------------------------------------------------------
Fitch Ratings has upgraded Topaz Solar Farms, LLC's $1.100 billion
($855.7 million outstanding) senior secured notes to 'BB' from 'C'
and has placed the rating on Stable Outlook.
RATING RATIONALE
The rating upgrade is driven by the expectation that by June 30,
2020 the bankruptcy court will approve the plan of reorganization
for PG&E Corporation (PCG; BB/Stable) and its primary subsidiary
Pacific Gas & Electric Company (PG&E; BB/Stable), which materially
reduces the risk of uncompensated termination or modification of
the power purchase agreement between PG&E and Topaz. PG&E is a key
revenue counterparty for Topaz and Fitch's assignment of a 'BB'
Long-Term Issuer Default Rating with a Stable Outlook establishes
the view of the creditworthiness of PG&E's PPA payments, which
underpin Topaz's cash flows available to service debt payments on
the notes.
The rating of Topaz's notes is constrained by the rating of PG&E,
reflecting the risk associated with revenue payments from the sole
PPA counterparty. The credit profile is otherwise strong, supported
by the project's fully contracted revenue structure, low operating
risk, standard project finance debt structure, and history of
strong financial performance that is projected to continue. Topaz's
rating case financial profile is consistent with investment-grade
coverage thresholds, with an average debt service coverage ratio of
1.92x.
The outbreak of the coronavirus and related government containment
measures worldwide create an uncertain global environment for the
power sector. While Topaz's performance data through most recently
available issuer data may not have indicated impairment, material
changes in revenue and cost profile are occurring across the power
sector and will continue to evolve as economic activity and
government restrictions respond to the ongoing situation.
Fitch's ratings are forward-looking in nature, and Fitch will
monitor developments in the sector as a result of the virus
outbreak as it relates to severity and duration, and incorporate
revised base and rating case qualitative and quantitative inputs
based on expectations for future performance and assessment of key
risks.
KEY RATING DRIVERS
Stable Contracted Revenues - Revenue Risk (Price): Stronger
The fixed-price, 25-year PPA with below-investment-grade PG&E
extends one month beyond debt maturity. Topaz's rating is
materially dependent on the credit quality of PG&E. The PPA
provides reimbursement for curtailment directed by the utility.
This structure is consistent with a stronger assessment under
Fitch's current criteria.
Solid Solar Resource - Revenue Risk (Volume): Midrange
Total generation output in Fitch's rating case is based on a
one-year P90 estimate of electric generation to mitigate the
potential for lower-than-expected solar resources. The project can
meet debt obligations under a one-year P99 generation scenario in
all years.
Proven Technology and Experienced Operator - Operation Risk:
Midrange
Thin-film photovoltaic technology has a long operating history,
which mitigates plant performance risks. First Solar, as the plant
operator, has a track record of high plant availability. Long-term
agreements support routine and unscheduled maintenance needs.
Fitch's financial analysis incorporates operating cost increases to
mitigate unforeseen events, including the risk of contractor
replacement.
Conventional Debt Structure - Debt Structure: Stronger
The senior-ranking, fully amortizing, fixed-rate debt benefits from
a six-month debt service reserve backed by a LOC and strong 1.20x
forward and backward-looking debt service coverage equity
distribution test.
Financial Summary
Updated Fitch base case metrics indicate a DSCR average of 2.14x
for the period 2020-2039, with a minimum of 1.83x. Fitch's rating
case includes stresses that increase expenses and reduce energy
output, resulting in an average DSCR of 1.92x with a minimum of
1.67x. The updated cases reflect mainly lower costs from Topaz's
renegotiated O&M contract and lower LOC fees. In both scenarios,
annual DSCRs generally increase over time.
PEER GROUP
Fitch privately rates several renewable project financings which
demonstrate rating case DSCRs consistent with a strong
investment-grade profile but are constrained to
sub-investment-grade by the credit quality of PG&E as the sole
revenue counterparty. Publicly rated Solar Star Funding, LLC
(BBB-/Stable), has an average rating case DSCR of 1.37x and is
rated investment grade due to the relative strength of its sole
revenue counterparty, Southern California Edison Co.
(BBB-/Stable).
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- An improvement in the credit quality of PPA off-taker, PG&E.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- A decline in the credit quality of PPA off-taker, PG&E;
- A Fitch rating case DSCR profile below around 1.15x.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Public Finance issuers have a
best-case rating upgrade scenario (defined as the 99th percentile
of rating transitions, measured in a positive direction) of three
notches over a three-year rating horizon; and a worst-case rating
downgrade scenario (defined as the 99th percentile of rating
transitions, measured in a negative direction) of three notches
over three years. The complete span of best- and worst-case
scenario credit ratings for all rating categories ranges from 'AAA'
to 'D'. Best- and worst-case scenario credit ratings are based on
historical performance.
CREDIT UPDATE
On June 8, 2020, the U.S. Bankruptcy Court Northern District
concluded hearings to consider confirming the debtors' plan of
reorganization. On June 11, 2020, the court issued a financing
order allowing PCG and PG&E to access capital markets in a manner
consistent with its proposed PoR. Fitch has assigned an IDR of 'BB'
with a Stable Outlook to PCG and PG&E.
The ratings and Stable Outlooks for the holding company and utility
reflect considerable credit risk associated with potential
catastrophic wildfires, driven by cycles of drought-rain-drought,
high heat, low humidity and high winds, among other factors, and a
growing urban-wildland interface. PG&E's relatively mature asset
base has been prone to failure, igniting a large number of
destructive wildfires in 2017-2018.
In Fitch's opinion, enactment of California Assembly Bill (A.B.)
1054, Senate Bill (S.B.) 901 and a number of other laws during 2018
and 2019 designed to protect the public against deadly wildfires
and facilitate socialization of wildfire liabilities under inverse
condemnation while mitigating financial risk to investor-owned
utilities are constructive developments. Efforts ongoing at PCG to
restructure its operations and prioritize meaningful safety culture
improvement and safety-related investment are credit supportive.
The ratings assume PCG and PG&E will emerge from bankruptcy on
terms consistent with the bankruptcy court approved plan of
reorganization by June 30, 2020.
Asset Description
Topaz is a 550-MW AC solar PV facility operating on 4,900
project-owned acres in San Luis Obispo County, CA. Topaz employs PV
modules designed and manufactured by First Solar using commercially
proven thin-film cadmium telluride PV cell technology mounted at a
fixed tilt of 25-degrees with no tracking risks.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
TTK RE ENTERPRISE: $200K Sale of Somers Point Property Approved
---------------------------------------------------------------
Judge Jerrold N. Poslusny of the U.S. Bankruptcy Court for the
District of New Jersey authorized TTK RE Enterprises, LLC's sale of
the real property located at 1 Nassau Road, Somers Point, New
Jersey to husband and wife, John J. Hampton and Kristina L.
Hampton, for $199,900.
The sale is free and clear of any and all liens, security
interests, encumbrances and claims which appear on the Title
Report.
At the time of closing the proceeds of the sale of the Property
will be paid as follows:
a. Normal costs attendant with closing on the sale of the
Property;
b. 5% of the Purchase Price commission to Century 21, to be
split equally with any participating broker in connection with the
sale of the Property; and
c. All remaining proceeds to Fay Servicing, LLC, as servicer
for U.S. Bank Trust National Association, in its capacity as
trustee of HOF I Grantor Trust 5 on account of its Secured Claim
secured by a mortgage against the Property.
The stay of the Order granting the Motion under Bankruptcy Rule
6004(h) is waived for cause.
Notwithstanding anything else in the Order: (i) nothing herein will
be deemed to constitute Loan Funder's consent to the sale of any
other properties of the Debtor, except the Property, and Loan
Funder specifically reserves and does not waive any rights against
the Debtor or any other obligors who may be liable to Loan Funder;
(ii) Loan Funder's liens will attach in the same extent, validity
and priority to the sale proceeds of the Property as Loan
Funder’s lien on the Property without further action, filing or
notice by Loan Funder.
After closing the proceeds of the sale of the Property will be paid
by wire transfer to Loan Funder or as may be otherwise agreed by
the Title Company and Loan Funder without further order of the
Court and applied as stated in the Loan Funder loan documents.
About TTK RE Enterprise
TTK RE Enterprise LLC is a privately held company in Somers Point,
New Jersey. The Company is the 100% owner of 48 real estate
properties in New Jersey having a total current value of
$9,265,000.
TTK RE Enterprise sought Chapter 11 protection (Bankr. D.N.J. Case
No. 19-30460) on Oct. 29, 2019 in Camden, New Jersey. In the
petition signed by Emily K. Vu, president, the Debtor disclosed
total assets of $9,269,950, and total liabilities of $6,432,457.
Judge Jerrold N. Poslusny Jr. oversees the case. FLASTER
GREENBERG
PC - CHERRY HILL is the Debtor's counsel.
ULTIMATE SOFTWARE: Moody's Hikes CFR to B2, Outlook Stable
----------------------------------------------------------
Moody's Investors Service upgraded The Ultimate Software Group,
Inc.'s Corporate Family Rating to B2, from B3, and its existing 1st
lien credit facilities to B1, from B2. Moody's also assigned B1 and
Caa1 ratings to Ultimate's proposed incremental 1st and 2nd lien
credit facilities. Ultimate will use proceeds from the $3.45
billion of incremental credit facilities and a small portion of
cash on hand to refinance the outstanding debt at Kronos
Incorporated. Ultimate and Kronos completed an all-stock merger on
April 1, 2020. Moody's expects to withdraw Kronos' existing ratings
upon the close of the refinancing.
RATINGS RATIONALE
The upgrade of the CFR reflects the strong business profile of the
combined company focused on the Human Capital Management
applications software and payroll services market with revenues
expected to surpass $3 billion over the next 12 months. Both
companies have a strong track record of organic growth and
approximately 80% of the total revenues are generated from
recurring software maintenance or subscription services. This large
recurring revenue base provides revenues and operating cash flow
stability in the current environment of heightened economic
uncertainty. Ultimate's over $500 million of liquidity comprising
cash and availability under its expanded revolving credit facility
provide good cushion during the uncertainty.
The rapid and widening spread of the coronavirus outbreak, the weak
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.
The sharp economic contraction and increase in unemployment rates
are adversely affecting Kronos and Ultimate's revenues and
operating cash flow. However, Moody's expects the combined
company's revenue growth to still remain positive in 2020, though
significantly below the high-single digits to low double-digit
growth rates potential before the outbreak of the pandemic.
Ultimate's B2 CFR is constrained by its weak financial profile,
including very high leverage of approximately 9x (including change
in deferred revenue and Moody's standard analytical adjustments)
and weak free cash flow (after potential cash outlays related to
employee stock-based awards) over the next 12 months. The rating is
prospective and incorporates Moody's expectations for rapid
deleveraging to the low 7x and an increase in free cash flow (after
funding vested stock awards) to about 3% of adjusted debt by the
end of 2021. The rating additionally incorporates execution risk in
combining two large companies.
Governance considerations, specifically financial strategy,
constrain Ultimate's rating. Under the ownership of financial
sponsors, both companies have exhibited high financial risk
tolerance and Kronos has a history of periodic debt-funded
distributions to shareholders that have precluded sustained
deleveraging despites strong growth in profitability.
The stable outlook is based on Moody's expectation that Ultimate
will maintain very good liquidity and free cash flow (after funding
stock awards) will increase to over 3% of adjusted debt in 2021.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Given the high financial risk tolerance under sponsors' ownership,
a rating upgrade is not expected in the near term. Over time,
Moody's could upgrade Ultimate's ratings if the company commits to
and sustains leverage below 6x and generates free cash flow in the
high single digit percentages of adjusted debt. Conversely, the
rating could be downgraded if: (i) Moody's expects revenue growth
rates, beyond the short-term, are expected to be weaker than the
high single digit rates, (ii) liquidity becomes weak, or, (iii) the
anticipated deleveraging to below 7x and free cash flow growth to
3% of adjusted debt are unlikely to materialize and sustained.
Upgrades:
Issuer: Ultimate Software Group, Inc. (The)
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Corporate Family Rating, Upgraded to B2 from B3
Senior Secured First Lien Bank Credit Facility, Upgraded to B1
(LGD3) from B2 (LGD3)
Assignments:
Issuer: Ultimate Software Group, Inc. (The)
Senior Secured First Lien Bank Credit Facility, Assigned B1 (LGD3)
Senior Secured Second Lien Bank Credit Facility, Assigned Caa1
(LGD6)
Outlook Actions:
Issuer: Ultimate Software Group, Inc. (The)
Outlook, Changed to Stable from Positive
The principal methodology used in these ratings was Software
Industry published in August 2018.
The Ultimate Software Group, Inc. is a provider of cloud-based HCM
solutions. Kronos Incorporated is a leading provider of Workforce
Management and other HCM applications. Hellman & Friedman LLC is
the controlling shareholder of the combined companies after the
merger with minority investments from affiliates of Blackstone,
GIC, Canada Pension Plan Investment Board and JMI Equity.
ULTRA PETROLEUM: Hires Centerview Partners as Investment Banker
---------------------------------------------------------------
Ultra Petroleum Corp. and its debtor affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
hire Centerview Partners LLC as their financial advisor and
investment banker effective as of May 14, 2020.
Centerview has performed and will continue to perform the following
financial advisory services, among others, pursuant to the
Engagement Letter:
a. General Financial Advisory and Investment Banking Services:
(i) familiarize itself with the business, operations,
properties, financial condition and prospects of the Debtors;
(ii) review the Debtors' financial condition and outlook;
(iii) assist in the development of financial data and
presentations to the Debtors' Board of Directors, various creditors
and other parties;
(iv) evaluate the Debtors' debt capacity and capital
structures alternatives;
(v) participate in negotiations among the Debtors, and related
creditors, suppliers, lessors and other interested parties with
respect to any of the transactions contemplated by the Engagement
Letter; and
(vi) perform such other financial advisory services as may be
specifically agreed upon in writing by the Debtors and Centerview.
b. Restructuring Services:
(i) analyze various Restructuring scenarios and the potential
impact of these scenarios on the value of the Debtors; and the
recoveries of those stakeholders impacted by the Restructuring;
(ii) provide financial and valuation advice and assistance to
the Debtors in developing and seeking approval of a Restructuring
plan (as the same may be modified from time to time, a "Plan");
(iii) provide financial advice and assistance to the Debtors
in structuring any new securities to be issued pursuant to the Plan
in connection with the Restructuring;
(iv) assist the Debtors and/or participate in negotiations
with entities or groups affected by the Restructuring;
(v) assist the Debtors and/or participate in negotiations with
such potential investors, lenders, purchasers or other participants
in the Restructuring to the extent directed by the Debtors or to
the extent Centerview and the Debtors agree is appropriate and
beneficial;
(vi) assist the Debtors in contacting Restructuring
Counterparties to the extent directed by the Debtors or to the
extent Centerview and the Debtors agree is appropriate and
beneficial;
(vii) meet with and provide Restructuring Counterparties with
such information about the Debtors, its assets, its financial
condition and outlook, to the extent directed by the Debtors or to
the extent Centerview and the Debtors agree is appropriate and
beneficial;
(viii) assist the Debtors with and manage any due diligence
process with respect to the Restructuring, including assisting the
Debtors in responding to due diligence questions and other requests
from Restructuring Counterparties and other appropriate parties, to
the extent directed by the Debtors or to the extent Centerview and
the Debtors agree is appropriate and beneficial;
(ix) review and analyze any proposals Centerview or the
Debtors' receives from Restructuring Counterparties or other third
parties with respect to the Restructuring and report to and advise
the Debtors with respect thereto; if requested by the Debtors,
participate in hearings before the bankruptcy court with respect to
the matters upon which Centerview has provided advice, including,
as relevant, coordinating with the Debtors' counsel with respect to
testimony in connection therewith; and
(x) provide such other financial advisory and investment
banking services in connection with the Restructuring as Centerview
and the Debtors may mutually agree upon in writing.
c. Financing Services:
(i) provide financial advice and assistance to the Debtors in
structuring and effecting a Financing, identifying potential
Investors, and, at the Debtors' request, contacting such Investors;
and
(ii) assist in the arranging of a Financing, the due diligence
process, and negotiating the terms of any proposed Financing.
d. Sale Services:
(i) provide financial advice and assistance to the Debtors in
connection with a Sale, identifying potential acquirors and, at the
Debtors' request, contacting such potential acquirors; and
(ii) assist the Debtors and/or participate in negotiations
with potential acquirors.
The proposed compensation structure to Centerview is below:
(a) A monthly financial advisory fee of $150,000 (the Monthly
Advisory Fee), the first of which was due and paid by the Debtors
upon execution of the Engagement Letter and thereafter on each
monthly anniversary thereof during the term of Centerview's
engagement. The amount of any Monthly Advisory Fee paid to
Centerview, beginning with the fifth payment, will be 50% credited
(but only once) against any Transaction Fee payable to Centerview
pursuant to subparagraph 2(b) of the Engagement Letter.
(b) Except as set forth below, if at any time during the term
of Centerview's engagement or within the twelve full months
following the termination of Centerview's engagement (including the
term of the engagement, the Fee Period), (1) the Debtors consummate
any Restructuring or Sale or (2) the Debtors enter into an
agreement in principle, definitive agreement or Plan to effect a
Restructuring or Sale, and at any time (including following the
expiration of the Fee Period), any Restructuring or Sale is
consummated, Centerview shall be entitled to receive a transaction
fee (a Transaction Fee), contingent upon the consummation of a
Restructuring or Sale and payable at the closing thereof equal to
$8,250,000. Notwithstanding anything to the contrary in
subparagraph 2(b) of the Engagement Letter, in connection with any
Restructuring or Sale that is intended to be effected, in whole or
in part, as a prepackaged, partial prepackaged or prearranged plan
of reorganization anticipated to involve the solicitation of
acceptances of such plan in compliance with the Bankruptcy Code, by
or on behalf of the Debtors, from holders of any class of the
Debtors' securities, indebtedness or obligations (a Prepackaged
Plan) the Transaction Fee shall be payable (i) in the case of a
Prepackaged Plan that takes the form of prepackaged or partial
prepackaged plan or reorganization, 75% upon receipt of votes from
the Debtors' creditors necessary to confirm such Prepackaged Plan
or (ii) in the case of a Prepackaged Plan that takes the form of a
prearranged plan of reorganization, 50% upon obtaining indications
of support from the Debtors' creditors that in the good faith
judgment of the Board of Directors of the Debtors are sufficient to
justify filing such Prepackaged Plan, and (y) the balance shall be
payable upon consummation of such Restructuring or Sale. If a
Restructuring is consummated, Centerview shall not be entitled to
any additional fees on account of any subsequent Sales or
Financings that may occur during the Fee Period.
(c) If at any time during the Fee Period, (1) the Debtors
consummate any Financing or (2) the Debtors receive and accept
binding written commitments for one or more Financings (the
execution by a potential financing source and the Debtors of a
binding commitment letter or binding securities purchase agreement
or other definitive documentation shall be deemed to be the receipt
and acceptance of such written commitment), and at any time
(including following the expiration of the Fee Period) any
Financing is consummated, the Debtors will pay to Centerview the
following (each a Financing Advisory Fee):
(i) 0.5 percent of the aggregate amount of financing
commitments of any indebtedness issued that is secured by a first
lien;
(ii) 2.0 percent of the aggregate amount of financing
commitments of any indebtedness issued that (x) is secured by a
second or junior lien, (y) is unsecured, and/or (z) is
subordinated;
(iii) 3.0 percent of the aggregate amount of financing
commitments of any equity or equity-linked securities or
obligations issued (other than any equity issued to any employees
on account of any retention or incentive program and/or policy);
and
(iv) 0.5 percent of the aggregate amount of financing
commitments of any debtor-in-possession financing.
(d) In addition to the fees payable by the Debtors to
Centerview hereunder, the Debtors shall, whether or not any
Restructuring, Financing and/or Sale shall be proposed or
consummated, reimburse Centerview on a periodic basis for its
reasonable travel and other reasonable out-of-pocket expenses
(including all reasonable fees, disbursements and other charges of
counsel to be retained by Centerview and of other consultants and
advisors retained by Centerview with the Debtors' consent),
incurred in connection with, or arising out of Centerview's
activities under or contemplated by this engagement, during the
term of this engagement, provided that the Debtors shall not be
responsible for such expenses in excess of $100,000 in the
aggregate without the Debtors' prior written consent, which consent
shall not be unreasonably withheld, conditioned, or delayed. Such
reimbursements shall be made promptly upon submission by Centerview
of statements for such expenses. It is understood and agreed that
nothing contained herein shall be deemed to limit in any manner the
indemnification, expense reimbursement and other obligations of the
Debtors contained in the Indemnification Provisions.
(e) As part of the overall compensation payable to Centerview
under the terms of the Engagement Letter, the Debtors agree to the
indemnification, contribution, and other provisions (the
Indemnification Provisions).
Prior to the Petition Date and pursuant to the Engagement Letter,
the Debtors paid Centerview $600,000 in Monthly Advisory Fees for
the months of February 2020 through May 2020, a $425,000 Financing
Fee in May 2020, and $19,453 as reimbursement for Centerview's
expenses billed through April 30, 2020. Further, in May 2020, prior
to the Petition Date and pursuant to the Engagement Letter, the
Debtors paid Centerview $6,187,500, representing 75% of the
Transaction Fee. Centerview has received no other compensation from
the Debtors pursuant to the Engagement Letter. As of the Petition
Date, Centerview did not hold a prepetition claim against the
Debtors for fees or expenses related to services rendered in
connection with the engagement.
The Debtors request that Centerview and its professionals should be
excused from maintaining time records as set forth in Bankruptcy
Rule 2016(a) and the U.S. Trustee's guidelines in connection with
the services to be rendered pursuant to the Engagement Letter,
notwithstanding anything to the contrary in the Bankruptcy Code,
the Bankruptcy Rules, orders of this Court, and U.S. Trustee's
guidelines regarding submission and approval of fee applications
and in light of the services that Centerview may provide to the
Debtors and the structure of Centerview's compensation pursuant to
the Engagement Letter.
The services that Centerview provides will not duplicate the
services that other professionals will be providing to the Debtors
in these chapter 11 cases.
Karn Chopra, a partner in the Debt Advisory and Restructuring
Practice of Centerview Partners LLC, 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:
Karn Chopra
CENTERVIEW PARTNERS LLC
31 West 52nd Street, 22nd Floor,
New York, NY 10019
Telephone: (212) 380-2650
Facsimile: (212) 380-2651
About Ultra Petroleum
Ultra Petroleum Corp., an independent oil and gas company, engages
in the acquisition, exploration, development, operation, and
production of oil and natural gas properties. Its principal
business activities are developing its natural gas reserves in the
Green River Basin of southwest Wyoming, the Pinedale and Jonah
fields. The company was founded in 1979 and is headquartered in
Englewood, Colorado.
Ultra Petroleum Corp. and its affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 20-32631) on May 14,
2020.
The Debtor disclosed total assets of $1,450,000,000 and total debt
of $2,560,000,000 as of March 31, 2020.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker LLP as local bankruptcy counsel; Quinn
Emanuel Urquhart & Sullivan, LLP as special counsel; Centerview
Partners LLC as investment banker; and FTI Consulting, Inc. as
financial advisor. Prime Clerk LLC is the claims agent.
ULTRA PETROLEUM: Hires Quinn Emanuel as Legal Counsel
-----------------------------------------------------
Ultra Petroleum Corp. and its debtor affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
employ Quinn Emanuel Urquhart & Sullivan, LLP as special counsel.
The Debtors desire to employ Quinn Emanuel as special counsel to
advise the Debtors in connection with matters relating to the firm
transportation agreement with Tallgrass Energy Partners/Rockies
Express Pipeline (REX), including related matters concerning the
Federal Energy Regulatory Commission (FERC), effective as of the
Petition Date.
The services rendered and functions to be performed by Quinn
Emanuel will not be duplicative of work performed by Kirkland &
Ellis LLP, the Debtors' lead counsel, or any other law firm
retained by the Debtors and instead will be limited to the REX
matters discussed above.
The hourly rates of the firm's partners and other professionals are
as follows:
Partners $1,040 - $1,595
Other Attorneys, Counsel Positions $625 - $1,200
Law Clerks and Legal Assistants $355 - $525
The hourly rates of the firm's professionals who are expected to
have primary responsibility for providing services to the Debtors
are below:
Benjamin I. Finestone, Partner $1,200
Kate Scherling, Counsel $1,015
Ari Roytenberg, Associate $825
Prior to the Petition Date, Quinn Emanuel was retained and received
a retainer in the amount of $300,000.00, for professional services
performed or to be performed relating to the REX matters, and for
the reimbursement of reasonable and necessary expenses. On May 14,
2020, prior to the Debtors' filing of their chapter 11 petitions,
Quinn Emanuel drew on the retainer for $233,105.00 on account of
fees and expenses actually incurred up to the time of the draw.
After Quinn Emanuel applied these amounts to the fees and expenses
incurred before the Petition Date, there was a surplus in the
amount of $66,895.00. The remaining balance of the retainer as of
the Petition Date is $66,895.00, which will be held on account and
applied, to the extent allowed by the Court, to the payment of fees
for services rendered and the reimbursement of expenses incurred by
Quinn Emanuel in the course of the Chapter 11 Cases.
The following is provided in response to the request for additional
information set forth in Paragraph D.1 of the U.S. Trustee Fee
Guidelines.
Question: Did the Firm agree to any variations from, or
alternatives to, the Firm's standard billing arrangements for this
engagement?
Answer: No. The Firm and Ultra have not agreed to any variations
from, or alternatives to, the Firm's standard billing arrangements
for this engagement. The rate structure provided by the Firm is
appropriate and is non-significantly different from (a) the rates
that the Firm charges for other non-bankruptcy representatives, or
(b) the rates of other comparably skilled professionals.
Question: Do any of the Firm's professionals in this engagement
vary their rate based on the geographical location of Ultra chapter
11 case?
Answer: No. The hourly rates used by the Firm in representing Ultra
are consistent with the rates that the Firm charges other
comparable chapter 11 clients, regardless of the location of the
chapter 11 case.
Question: If the Firm has represented Ultra in the 12 months
prepetition, disclose the Firm's billing rates and material
financial terms for the prepetition engagement, including any
adjustments during the 12 months prepetition. If the Firm's billing
rates and material financial terms have changed post-petition,
explain the difference and the reasons for the difference.
Answer: Quinn Emanuel was first retained by Ultra in May 2020. See
the Engagement Letter, attached as Exhibit C, to the Application.
Quinn Emanuel's fees are determined on the basis of time billed at
hourly rates. The Firm's hourly rates vary with the experience and
seniority of its attorneys and paralegals, and are adjusted on
January 1 of each year. The 2020 hourly rates for Quinn Emanuel's
attorneys range from $625.00 to $1,595.00.
Question: Has Ultra approved the Firm's budget and staffing plan,
and if so, for what budget period?
Answer: Ultra has not approved a budget and staffing plan for Quinn
Emanuel.
Patricia B. Tomasco, a partner in the law firm of Quinn Emanuel
Urquhart & Sullivan, LLP, 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:
Patricia B. Tomasco, Esq.
QUINN EMANUEL URQUHART & SULLIVAN, LLP
711 Louisiana, Suite 500
Houston, TX 77002
Telephone: (713) 221-7000
Facsimile: (713) 221-7100
E-mail: pattytomasco@quinnemanuel.com
About Ultra Petroleum
Ultra Petroleum Corp., an independent oil and gas company, engages
in the acquisition, exploration, development, operation, and
production of oil and natural gas properties. Its principal
business activities are developing its natural gas reserves in the
Green River Basin of southwest Wyoming, the Pinedale and Jonah
fields. The company was founded in 1979 and is headquartered in
Englewood, Colorado.
Ultra Petroleum Corp. and its affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 20-32631) on May 14,
2020.
The Debtor disclosed total assets of $1,450,000,000 and total debt
of $2,560,000,000 as of March 31, 2020.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker LLP as local bankruptcy counsel; Quinn
Emanuel Urquhart & Sullivan, LLP as special counsel; Centerview
Partners LLC as investment banker; and FTI Consulting, Inc. as
financial advisor. Prime Clerk LLC is the claims agent.
ULTRA PETROLEUM: Seeks to Hire FTI Consulting as Financial Advisor
------------------------------------------------------------------
Ultra Petroleum Corp. and its debtor affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
hire FTI Consulting, Inc. as their financial advisor effective as
of May 14, 2020.
FTI will provide consulting and advisory services to the Debtors in
the course of these chapter 11 cases, including but not limited to
the following:
(a) support the preparation of first day motions and develop
procedures and processes necessary to implemental such motions;
(b) assist with the development and enhancement of the
Debtor's 13-week cash flow forecast and regular variance reports
and the identification and tracking of liquidity enhancement
initiatives;
(c) assist with development, refinement, or review of the
Debtor's business plan and creating analyses for discussions and
negotiations with the Debtor's lenders and other stakeholders;
(d) assist with the development of accounting and operating
procedures to segregate pre- and post-Petition Date business
transactions and with implementing the Court orders;
(e) assist in the identification of executory contracts and
unexpired leases and perform cost/benefit evaluations with respect
to assumption or rejection of each, as needed;
(f) assist with the claims and claims reconciliation
processes, plan classification modeling, and claims estimation, to
the extent applicable;
(g) assist with responding to and tracking calls received from
vendors to maintain vendor support;
(h) develop and assist with implementing accounting and
operating procedures to segregate pre- and post-Petition Date
business transactions;
(i) participate in meetings and provide support to the Debtors
and their professional advisors in negotiations with lenders, any
statutory committee of creditors that may be appointed in these
chapter 11 cases, the United States Trustee, other
parties-in-interest, and professionals hired by the same, as
requested;
(j) prepare information and analysis necessary for the
confirmation of a plan of reorganization, including information
contained in the disclosure statement and assist with
implementation of a confirmed plan of reorganization; and
(k) render such other restructuring, general business
consulting, or such other assistance for the Debtors as the
Debtors' management or counsel may request.
These services will complement and not duplicate the services that
other retained professionals may perform in these chapter 11
cases.
The current hourly rates for the FTI personnel are within the
following ranges:
Senior Managing Directors $920 - $1,265
Directors / Senior Directors / Managing Directors $605 - $905
Consultants / Senior Consultants $370 - $660
Administrative / Paraprofessionals $150 - $280
FTI received an initial retainer payment in the amount of $200,000,
which was regularly utilized and replenished as services were
performed. According to FTI's books and records, the Debtors paid
FTI $1,528,782.94 in the aggregate for professional services
performed and expenses incurred, inclusive of retainer
replenishments during the 90-day period prior to the Petition Date.
The Retainer was estimated to be $129,370.20 on the Petition Date
after outstanding pre-petition amounts were satisfied. Any portion
of the Retainer will be applied to FTI's final fee application and
will not be placed in a separate account. As of the Petition Date,
no amount remains outstanding with respect to FTI's prepetition
invoices issued.
Alan Boyko, a senior managing director at FTI Consulting, Inc.,
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:
Alan Boyko, Esq.
FTI CONSULTING, INC.
999 17th Street, Suite 700
Denver, CO 80202
Telephone: (303) 689-8892
E-mail: alan.boyko@fticonsulting.com
About Ultra Petroleum
Ultra Petroleum Corp., an independent oil and gas company, engages
in the acquisition, exploration, development, operation, and
production of oil and natural gas properties. Its principal
business activities are developing its natural gas reserves in the
Green River Basin of southwest Wyoming, the Pinedale and Jonah
fields. The company was founded in 1979 and is headquartered in
Englewood, Colorado.
Ultra Petroleum Corp. and its affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 20-32631) on May 14,
2020.
The Debtor disclosed total assets of $1,450,000,000 and total debt
of $2,560,000,000 as of March 31, 2020.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker LLP as local bankruptcy counsel; Quinn
Emanuel Urquhart & Sullivan, LLP as special counsel; Centerview
Partners LLC as investment banker; and FTI Consulting, Inc. as
financial advisor. Prime Clerk LLC is the claims agent.
ULTRA PETROLEUM: Seeks to Hire Jackson Walker as Conflicts Counsel
------------------------------------------------------------------
Ultra Petroleum Corp. and its debtor affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
employ Jackson Walker LLP as co-counsel and conflicts counsel.
The firm is proposed to primarily provide the following services
for its engagement in these chapter 11 cases as local and conflicts
counsel to the Debtors:
(a) provide legal advice and services regarding local rules,
practices, and procedures, including Fifth Circuit law;
(b) provide certain services in connection with administration
of the chapter 11 cases, including, without limitation, preparing
agendas, hearing notices, witness and exhibit lists, and hearing
binders of documents and pleadings;
(c) review and comment on proposed drafts of pleadings to be
filed with the Court;
(d) at the request of the Debtors, appear in Court and at any
meeting with the United States Trustee, and any meeting of
creditors at any given time on behalf of the Debtors as their local
and conflicts bankruptcy co-counsel;
(e) perform all other services assigned by the Debtors to the
firm as local and conflicts bankruptcy co-counsel; and
(f) provide legal advice and services on any matter on which
Kirkland & Ellis LLP (K&E) may have a conflict or as needed based
on specialization.
The firm has discussed the division of responsibilities with the
Debtors' lead counsel, K&E, and will avoid duplication of efforts.
The firm received a retainer of $250,000 for services performed and
to be performed in connection with, and in contemplation of, the
filing of this case. On May 14, 2020, the firm received a payment
of $118,385.50 for prepetition services, and reimbursement of
expenses incurred for filing fees. The firm continues to hold
$131,614.50 in trust.
The hourly rates of the firm's attorneys and paraprofessionals are
as follows:
Restructuring attorneys $385 - $895
Partners $565 - $900
Associates $420 - $565
Paraprofessionals $175 - $185
Matthew D. Cavenaugh's hourly rate is $750.
The following is provided in response to the request for additional
information set forth in Paragraph D.1 of the U.S. Trustee Fee
Guidelines.
Question: Did the Firm agree to any variations from, or
alternatives to, the Firm's standard billing arrangements for this
engagement?
Answer: No. The Firm and the Debtors have not agreed to any
variations from, or alternatives to, the Firm's standard billing
arrangements for this engagement. The rate structure provided by
the Firm is appropriate and is not significantly different from (a)
the rates that the Debtors charge for other non-bankruptcy
representatives or (b) the rates of other comparably skilled
professionals.
Question: Do any of the Firm professionals in this engagement vary
their rate based on the geographical location of the Debtors'
chapter 11 cases?
Answer: No. The hourly rates used by the Firm in representing the
Debtors are consistent with the rates that the Firm charges other
comparable chapter 11 clients, regardless of the location of the
chapter 11 case.
Question: If the Firm has represented the Debtors in the 12 months
prepetition, disclose the Firm's billing rates and material
financial terms for the prepetition engagement, including any
adjustments during the 12 months prepetition. If the Firm's billing
rates and material financial terms have changed post-petition,
explain the difference and the reasons for the difference.
Answer: My hourly rate is $750. The rates of other restructuring
attorneys in the Firm range from $385 to $895 an hour and the
paraprofessional rates range from $175-$185.00 per hour. The Firm
represented the Debtors during the weeks immediately before the
Petition Date, using the foregoing hourly rates.
Question: Have the Debtors approved the Firm's budget and staffing
plan, and if so, for what budget period?
Answer: The Firm has not prepared a budget and staffing plan.
Matthew D. Cavenaugh, a partner in the law firm of Jackson Walker
LLP, 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:
Matthew D. Cavenaugh, Esq.
JACKSON WALKER LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Telephone: (713) 752-4200
Facsimile: (713) 752-4221
E-mail: mcavenaugh@jw.com
About Ultra Petroleum
Ultra Petroleum Corp., an independent oil and gas company, engages
in the acquisition, exploration, development, operation, and
production of oil and natural gas properties. Its principal
business activities are developing its natural gas reserves in the
Green River Basin of southwest Wyoming, the Pinedale and Jonah
fields. The company was founded in 1979 and is headquartered in
Englewood, Colorado.
Ultra Petroleum Corp. and its affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 20-32631) on May 14,
2020.
The Debtor disclosed total assets of $1,450,000,000 and total debt
of $2,560,000,000 as of March 31, 2020.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker LLP as local bankruptcy counsel; Quinn
Emanuel Urquhart & Sullivan, LLP as special counsel; Centerview
Partners LLC as investment banker; and FTI Consulting, Inc. as
financial advisor. Prime Clerk LLC is the claims agent.
ULTRA PETROLEUM: Seeks to Hire Kirkland & Ellis as Legal Counsel
----------------------------------------------------------------
Ultra Petroleum Corp. and its debtor affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
employ Kirkland & Ellis LLP and Kirkland & Ellis International LLP
as their attorneys.
The Debtors request the retention and employment of Kirkland to
render the following legal services:
(a) advise the Debtors with respect to their powers and duties
as debtors-in-possession in the continued management and operation
of their businesses and properties;
(b) advise and consult on the conduct of these chapter 11
cases, including all of the legal and administrative requirements
of operating in chapter 11;
(c) attend meetings and negotiating with representatives of
creditors and other parties-in-interest;
(d) take all necessary actions to protect and preserve the
Debtors' estates, including prosecute actions on the Debtors'
behalf, defend any action commenced against the Debtors, and
represent the Debtors in negotiations concerning litigation in
which the Debtors are involved, including objections to claims
filed against the Debtors' estates;
(e) prepare pleadings in connection with these chapter 11
cases, including motions, applications, answers, orders, reports,
and papers necessary or otherwise beneficial to the administration
of the Debtors' estates;
(f) represent the Debtors in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
(g) advise the Debtors in connection with any potential
purchase or sale of assets;
(h) appear before the Court and any appellate courts to
represent the interests of the Debtors' estates;
(i) advise the Debtors regarding tax matters;
(j) take any necessary action on behalf of the Debtors to
negotiate, prepare, and obtain approval of a disclosure statement
and confirmation of a chapter 11 plan and all documents related
thereto; and
(k) perform all other necessary legal services for the Debtors
in connection with the prosecution of these chapter 11 cases,
including: (i) analyze the Debtors' leases and contracts and the
assumption and assignment or rejection thereof; (ii) analyze the
validity of liens against the Debtors; and (iii) advise the Debtors
on corporate and litigation matters.
Kirkland's current hourly rates for matters related to these
chapter 11 cases range as follows:
Partners $1,075 - $1,845
Of Counsel $625 - $1,845
Associates $610 - $1,165
Paraprofessionals $245 - $460
On February 26, 2020, the Debtors paid $700,000 to Kirkland, which,
as stated in the Engagement Letter, constituted an advance payment
retainer. Subsequently, the Debtors paid to Kirkland additional
advance payment retainers totaling $5,700,000 in the aggregate. As
stated in the Engagement Letter, any advance payment retainer is
earned by Kirkland upon receipt, any advance payment retainer
becomes the property of Kirkland upon receipt, the Debtors no
longer have a property interest in any advance payment retainer
upon Kirkland's receipt, any advance payment retainer will be
placed in Kirkland's general account and will not be held in a
client trust account, and the Debtors will not earn any interest on
any advance payment retainer.
The following is provided in response to the request for additional
information set forth in Paragraph D.1. of the Revised UST
Guidelines:
Question: Did Kirkland agree to any variations from, or
alternatives to, Kirkland's standard billing arrangements for this
engagement?
Answer: No. Kirkland and the Debtors have not agreed to any
variations from, or alternatives to, Kirkland's standard billing
arrangements for this engagement. The rate structure provided by
Kirkland is appropriate and is not significantly different from (a)
the rates that Kirkland charges for other non-bankruptcy
representations or (b) the rates of other comparably skilled
professionals.
Question: Do any of the Kirkland professionals in this engagement
vary their rate based on the geographic location of the Debtors'
chapter 11 cases?
Answer: No. The hourly rates used by Kirkland in representing the
Debtors are consistent with the rates that Kirkland charges other
comparable chapter 11 clients, regardless of the location of the
chapter 11 case.
Question: If Kirkland has represented the Debtors in the 12 months
prepetition, disclose Kirkland's billing rates and material
financial terms for the prepetition engagement, including any
adjustments during the 12 months prepetition. If Kirkland's billing
rates and material financial terms have changed post-petition,
explain the difference and the reasons for the difference.
Answer: Kirkland's current hourly rates for services rendered on
behalf of the Debtors starting on and after January 1, 2020 range
as follows:
Billing Category U.S. Range
Partners $1,075 - $1,845
Of Counsel $625 - $1,845
Associates $610 - $1,165
Paraprofessionals $245 - $460
Kirkland represented the Debtors from May 14, 2019 to December 31,
2019, using the hourly rates listed below:
Billing Category U.S. Range
Partners $1,025 - $1,795
Of Counsel $595 - $1,705
Associates $595 - $1,125
Paraprofessionals $235 - $460
Question: Have the Debtors approved Kirkland's budget and staffing
plan, and, if so, for what budget period?
Answer: Yes, for the period from May 14, 2020, through August 14,
2020.
David R. Seligman, a partner of Kirkland & Ellis LLP and Kirkland &
Ellis International, LLP, 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:
David R. Seligman, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, IL 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
E-mail: david.seligman@kirkland.com
About Ultra Petroleum
Ultra Petroleum Corp., an independent oil and gas company, engages
in the acquisition, exploration, development, operation, and
production of oil and natural gas properties. Its principal
business activities are developing its natural gas reserves in the
Green River Basin of southwest Wyoming, the Pinedale and Jonah
fields. The company was founded in 1979 and is headquartered in
Englewood, Colorado.
Ultra Petroleum Corp. and its affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 20-32631) on May 14,
2020.
The Debtor disclosed total assets of $1,450,000,000 and total debt
of $2,560,000,000 as of March 31, 2020.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker LLP as local bankruptcy counsel; Quinn
Emanuel Urquhart & Sullivan, LLP as special counsel; Centerview
Partners LLC as investment banker; and FTI Consulting, Inc. as
financial advisor. Prime Clerk LLC is the claims agent.
VENUS CONCEPT: Signs $31 Million Stock Purchase Agreement
---------------------------------------------------------
Venus Concept Inc. has entered into a common stock purchase
agreement for up to $31 million with Lincoln Park Capital Fund,
LLC, a Chicago-based institutional investor. Upon execution of the
purchase agreement, Lincoln Park made an initial purchase of $1.0
million of common stock.
Under the terms of the purchase agreement, the Company will have
the right, in its sole discretion, to sell shares of its common
stock to Lincoln Park over the 24-month term of the purchase
agreement. Any common stock sold to Lincoln Park will occur at a
purchase price that is based on the prevailing prices of the common
stock at the time of each sale. The Company will control the
timing and amount of any shares of common stock sold to Lincoln
Park, and Lincoln Park is obligated to make purchases at quantities
and prices in accordance with the purchase agreement. Venus
Concept's sale of common stock is subject to various limitations
including those set forth in the purchase agreement and the listing
rules of Nasdaq.
"This agreement is a result of our efforts to enhance our balance
sheet and we appreciate the partnership with Lincoln Park as we
believe it reflects their confidence in our long-term growth
opportunity," said Domenic Serafino, chief executive officer and
director of Venus Concept. "We have made substantial progress in
our efforts to enhance our financial condition in recent months
including the expected cost savings of approximately $38 million in
2020, and continuing into 2021, from both the restructuring program
we announced in May, and the previously announced merger synergies
and cost reductions. While the near-term outlook has been
challenged by the COVID-19 global pandemic, we continue to believe
the long-term opportunity remains extremely compelling for us as a
leading player in both the global minimally invasive/non-invasive
medical aesthetics market and the minimally invasive surgical hair
restoration market."
The Company intends to use any proceeds it receives under the
purchase agreement for working capital and general corporate
purposes. There are no warrants, limitations on use of proceeds,
financial or business covenants, rights of first refusal,
participation rights, penalties or liquidated damages in the
purchase agreement. In consideration for Lincoln Park entering
into the purchase agreement, Venus Concept issued 209,566 shares of
its common stock to Lincoln Park as a commitment fee.
As part of the agreement, Lincoln Park has covenanted not to cause
or engage in any manner whatsoever, any direct or indirect short
selling or hedging of the Company's common stock. The purchase
agreement may be terminated by the Company at any time, at its sole
discretion, without any cost or penalty.
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes, and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related practice enhancement
services. The Company's aesthetic systems have been designed on a
cost-effective, proprietary and flexible platform that enables the
Company to expand beyond the aesthetic industry's traditional
markets of dermatology and plastic surgery, and into
non-traditional markets, including family and general practitioners
and aesthetic medical spas. In the years ended Dec. 31, 2019 and
in 2018, a substantial majority of its systems delivered in North
America were in non-traditional markets.
Venus Concept incurred a net loss of $42.29 million in 2019
following a net loss of $14.21 million in 2018. As of March 31,
2020, Venus Concept had $155.26 million in total assets, $108.68
million in total liabilities, and $46.57 million in stockholders'
equity.
MNP LLP, in Toronto, Canada, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March
30, 2020, citing that the Company has reported recurring net losses
and negative cash flows from operations, which raise substantial
doubt about the Company's ability to continue as a going concern.
VIASAT INC: Fitch Affirms 'B+' IDR and Rates Unsec. Notes 'BB-'
---------------------------------------------------------------
Fitch Ratings has affirmed Viasat, Inc.'s Issuer Default Rating at
'B+' and affirmed the senior unsecured notes at 'BB-'/'RR3'. Viasat
Technologies Limited's 'B+' IDR has also been affirmed. Other
ratings have been affirmed as listed at the end of this release.
The Outlook is Positive.
Fitch has also assigned a 'BB-'/'RR3' rating to the company's
offering of $400 million of senior unsecured notes due 2028. The
company plans to use the proceeds to repay all the outstanding
borrowings on its revolving credit facility and for general
corporate purposes.
Viasat's 'B+' Long-Term IDR reflects the company's modest revenue
growth prospects for fiscal 2021, owing to the coronavirus
pandemic, with stronger growth returning in fiscal 2022. This is
balanced against moderate leverage for the rating but with high
capital intensity and FCF deficits as the company is funding its
satellite build program, including two high-capacity satellites
that are expected to be launched around the middle and end of
calendar year 2021, with a third thereafter. The major boost in
capacity provided by these satellites should lead to a slower rate
of deployment of satellites in future years, leading to improved
FCF.
KEY RATING DRIVERS
Strong Revenue Growth and FCF Deficits: Revenues have grown
strongly in fiscal 2019 and fiscal 2020 (periods ending March 31),
following the entry into service of the ViaSat-2 satellite in
fiscal fourth-quarter 2018. Revenue grew 30% and 12% and
Fitch-calculated EBITDA increased 46% and 34% in fiscal 2019 and
fiscal 2020, respectively. Revenue growth in the low-single digits
is expected in fiscal 2021, with continued strength in government
systems and residential broadband being partly offset by lower
in-flight connectivity revenue.
Fitch believes Viasat's gross leverage is relatively strong for the
category and for FYE 2021 estimates Viasat's gross leverage will
approximate 4.5x (net leverage of 3.9x) as modest EBITDA growth is
expected to offset increased debt. Gross leverage and net leverage
were 4.0x and 3.3x, respectively, at FYE 2020. FCF deficits due to
high satellite related funding of capex is expected to push gross
leverage to 4.6x by FYE 2022 but this is expected to be the
leverage peak, and lower than Fitch's positive sensitivity
threshold.
FCF Deficits from High Capex: Viasat is in the midst of a high
capex period as it is building three third-generation
high-throughput satellites at a total cost of $2 billion or more.
The first of these is expected to be launched in mid-2021, which,
when placed into service following in-orbit testing, is expected to
boost revenue as the satellite's utilized capacity grows. Capex is
expected to remain high as the second satellite is launched about
six months after the first and the third satellite launch by YE
2022. The company has indicated as a frame of reference that
positive FCF may follow shortly after the launch of the second
ViaSat-3 satellite.
Coronavirus Pandemic Effect: In fiscal 2021, residential broadband
and government sales are expected to be resilient, with the primary
effect of the coronavirus pandemic pressuring the IFC business with
the steep decline in air travel. As a response to preserve the
ViaSat-3 time line and a conservative capital structure, the
company completed a number of cost reduction actions that will
largely offset the impact on EBITDA of the decline of the IFC
business.
The company continues to see strong demand for government products
and services, although there has been an effect on the execution of
some orders and acceptance on certain products that affected growth
in fourth-quarter FY 2020 and early first-quarter FY 2021. Fitch's
expectations reflect modest growth in revenue and EBITDA for fiscal
2021.
Debt Funding: The continued build-out of the ViaSat-3 satellites is
expected to cause Viasat to enter the capital markets periodically
to fund the build-out. In fiscal 2017, the company raised net
proceeds of approximately $500 million from an equity offering to
support the initial investments in ViaSat-3. Fitch assumes debt
funding will continue to be the primary source of external
financing.
Execution Risk: Viasat is in the construction phase of a
three-satellite constellation which will require the company to not
only execute on the construction phase of the satellites but to
continue execute on growth strategies to sustain EBITDA and cash
flow growth. The company is expected to benefit from a strong
revenue backlog, as well as the additional global markets opened up
by the ViaSat-3 satellites.
Revenue Backlog: Viasat had a $1.9 billion backlog as of March 31,
2020, of which a little over one-half is expected to be delivered
over the next 12 months; this is similar to the prior year's
backlog. The company does not include amounts in backlog if the
company does not have purchase orders. The backlog does not include
anticipated purchase orders for commercial aircraft IFC systems or
service revenues under agreements.
The company provided in-flight internet services to 1,390
commercial aircraft, as of March 31, 2020, and is anticipated to
activate service on more than 750 aircraft under existing customer
agreements. A majority of the company's contracts can be terminated
at the convenience of its customers for little or no penalties. The
number of aircraft in service will be affected by the grounding of
installed aircraft, and the installation of systems under
additional agreements is likely to be delayed.
Vertical Integration: Viasat benefits from vertical integration
which drives cost efficiencies. The satellites network system
benefits from the ability of Viasat to develop an end-to-end
platform of satellites, ground-networking equipment and user
terminals. The advances with respect to ViaSat-3 are expected to
drive further efficiencies.
Revenue Concentration: By contract, Viasat's revenue concentration
is moderate as its five largest contracts provided 18% of its
revenues in fiscal 2020, down two percentage points from prior
fiscal years 2019 and 2018. The largest contracts by revenue were
related to tactical data-link products and fixed-satellite
networks. By customer, revenues are more concentrated as the
company's largest customer is the U.S. government, which produced
30% of revenues in fiscal 2020, up from 26% in fiscal 2019. End
markets are fairly diverse, with consumers, government, military,
commercial airlines and enterprises.
Asset Risk: Satellites are subject to periodic failure of their
various components, although satellites in most cases have built-in
redundant systems. The small size of Viasat's fleet somewhat
elevates its asset risk. The company's risk will be partly offset
as it launches its third-generation satellites as the beams can be
redirected, if need be, where coverage has been reduced, and this
generation of satellites will add a significant amount of capacity
with which the company can have additional redundancies.
Strong Competitive Position: Viasat operates with a strong
competitive position within certain business segments, primarily
the Satellite Services segment (fixed residential broadband and
in-flight connectivity) where existing competitors may have weaker
financial profiles or technology positions. Its share in the North
American narrow-body market has grown significantly over the past
several years.
The company is expected to face competition in satellite services
from low-earth orbit satellite networks in development, although
one planned LEO constellation under development, OneWeb Global Ltd,
has filed for Chapter 11. Viasat is expected to have a material
advantage in cost/ bit of capacity and leveraging its existing
business platform, while being disadvantaged in terms of latency.
In the Government Systems and Commercial Networks segments, Viasat
has a relatively strong competitive position with its product
portfolio, but faces competition from higher-rated companies with
stronger and more diversified businesses.
DERIVATION SUMMARY
In the Government Systems and Commercial Systems segments, Viasat
competes against higher rated companies that have access to much
greater resources. In the Government Systems segment, there are
numerous competitors, but major competitors in the manufacture of
defense electronics segment, where Viasat competes, include BAE
Systems plc (BBB/Stable) and Collins Aerospace.
In the Commercial Networks segment, the company also competes
against much larger companies, including Airbus SE (A-/Negative),
General Dynamics, L3Harris Technologies (BBB/Stable) and MAXAR
Technologies.
In the satellite services business, as a provider of communications
infrastructure, comparable businesses to Viasat would include
several companies unrated by Fitch, such as Telesat Canada,
Intelsat, SBA Communications and Zayo Group Holdings. Unlike some
of these companies, Viasat provides services directly to consumers
in its satellite services segment. Given its vertically integrated
strategy, which not only includes satellite services but the
development and manufacture of equipment, the company's EBITDA
margins are lower than the pure service providers.
In the in-flight connectivity segment, Viasat competes against GoGo
Inc., Global Eagle, Inmarsat and Panasonic Avionic Corporation.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within its Rating Case for the Issuer
Include:
-- Fitch assumes revenue grows 2.5% in FY 2021, and returns to
approximately 10% annual growth in for FY 2022- FY 2024;
-- Fitch calculated EBITDA margins expand from the high-teens in
FY 2021 to slightly more than 20% in FY 2021. The recovery in the
IFC business in FY 2022 helps offset margin pressure from the
satellite launches;
-- Over FY 2021- FY 2022, capex is approximately $900 million
annually and then declines moderately;
-- The first ViaSat-3 launch is completed in mid-calendar year
2021, and the second by YE 2021, placing both launches in FY 2022.
Recovery:
-- Fitch contemplates a scenario in which default is the result
of one or a combination of a number of scenarios, such as revenue
and EBITDA pressure from new or existing competitors that have
managed to reduce Viasat's cost advantage in the satellite
business, delays in satellite launches, or an increase in
competition in the government systems business. Fitch assumes
Viasat would be successfully reorganized.
Recovery assumptions are based on the company's strong cost
position, with very low space capital costs in millions per Gbps
and high capacity and a strong backlog in its three business
segments, and patterns of consistent adjusted EBITDA growth in the
mid-teens over the past decade. These strengths are balanced
against the execution risk posed by its planned satellite launches,
including the potential for delays, and the longer-term development
of competitors.
Under this scenario, Fitch estimates a going-concern EBITDA
run-rate of $385 million, which is moderately below Fitch's FY 2021
projected EBITDA. FY2021 expectations currently include
expectations for stresses in FY 2021 in its IFC business, and
further stress could come from pressure in other businesses. Fitch
did not include potential value from satellites under construction,
which had a book value of $907 million and would provide
significant liquidation value, even if materially discounted. While
no value was included given the uncertainties posed by the stress
scenario in estimating a reasonable value, some value could be
included as satellites near completion.
Fitch assumes Viasat will receive a going-concern recovery multiple
of 6.0x EBITDA under this scenario, which is supported by the
following:
Comparable Reorganizations: In the 2019 Industrial, Manufacturing,
Aerospace and Defense Bankruptcy Enterprise Values and Creditor
Recoveries case study, Fitch noted that 59% of industrial and
manufacturing defaulted companies had exit multiples between
5.0x-8.0x. More than 90% of bankruptcy cases were resolved as a
going concern.
Fitch forecasts a going-concern valuation of $2.310 billion and
recovery multiple of 6.0x, which results in a post-reorganization
enterprise value of $2.079 billion, after the deduction of expected
administrative claims. Viasat's first-lien debt, assuming a fully
drawn revolver, is fully recovered, leading to a 'BB+'/'RR1'
rating, and the recovery on the unsecured debt equates to a
'BB-'/'RR3' rating.
Although the Ex-Im facility is at an entity that generates only 1%
of revenues, Fitch assumes that the facility is fully recovered as
under the "best interests" test whereby the recovery on a class of
claims in a going-concern reorganization would be no less than it
would be under a Chapter 7 liquidation. The Ex-Im facility is
secured by significant collateral value as the satellite at that
entity provides approximately two-thirds of the company's capacity
that supports an approximately $1 billion revenue stream for
satellite services and government systems services.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
-- Gross debt leverage, and net FFO leverage, sustained below
5.0x, combined with the successful launch and deployment of service
on the first ViaSat-3 satellite.
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
-- Gross debt leverage and net FFO leverage sustained above
6.0x;
-- Material delays or issues with respect to anticipated
satellite launches, or delays in achieving revenue and EBITDA
growth from future satellites.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Viasat's liquidity is relatively strong and
availability on its revolver and available cash balances is strong,
and is partly offset by FCF deficits. Cash and cash equivalents
amounted to $304 million as of March 31, 2020.
Viasat had approximately $293 million of capacity on its $700
million revolver, as of March 31, 2020, as there were $390 million
in borrowings on the facility and $17 million in LOC. Pro forma for
the current offering, Viasat will have $683 million of availability
on the revolver after LOCs. Viasat also had $118 million
outstanding under an Ex-Im credit facility, a senior secured direct
loan facility.
The company had originally fully drawn $362 million under the Ex-Im
credit facility, and of the amount borrowed, approximately $321
million, was used to finance up to 85% of the cost of construction,
launch and insurance of the ViaSat-2 satellite and related costs.
Upon the receipt of the insurance proceeds related to ViaSat-2, the
entire proceeds of $188 million received in fiscal 2019 and
first-quarter fiscal 2020 were used to pay down the facility, as
required.
The company is required by the terms of its senior secured credit
facilities to have insurance on 75% of the net book value of
certain covered satellites. The company has in-orbit insurance on
ViaSat-2, ViaSat-1, WildBlue-1 and the Anik F2 satellites.
Fitch expects an FCF deficit of around $450 million to $475 million
in fiscal 2021 and fiscal 2022, owing to higher capex, which is
expected to exceed fiscal 2020's capex of $761 million. The company
has provided a frame of reference that positive FCF may follow
shortly after the launch of the second ViaSat-3 satellite, which is
expected to be approximately six months after the mid-2021 launch
of the first ViaSat-3 satellite.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
Viasat, Inc.
- LT IDR B+; Affirmed
- Senior unsecured; LT BB-; New Rating
- Senior secured; LT BB+; Affirmed
- Senior unsecured; LT BB-; Affirmed
Viasat Technologies Limited
- LT IDR B+; Affirmed
- Senior secured; LT BB+; Affirmed
VIASAT INC: Moody's Rates $400MM Senior Unsecured Notes 'Caa1'
--------------------------------------------------------------
Moody's Investors Service affirmed Viasat, Inc.'s B2 corporate
family rating, B2-PD probability of default rating, and Caa1 senior
unsecured notes rating, and assigned a Caa1 rating to the company's
proposed $400 million senior unsecured notes. Moody's also upgraded
the rating on the company's senior secured notes to Ba3 from B1.
The speculative grade liquidity rating was maintained at SGL-3. The
outlook remains stable.
Net proceeds from the new $400 million senior unsecured notes will
be used to repay amounts outstanding under the company's revolving
credit facility.
"The CFR was affirmed because the transaction is leverage neutral,"
said Peter Adu, Moody's Vice President and Senior Analyst. "The
upgrade of the senior secured notes rating reflects increased loss
absorption capacity provided by the new senior unsecured notes in
the capital structure", Adu added.
Ratings Affirmed:
Corporate Family Rating, B2
Probability of Default Rating, B2-PD
$700 million Senior Unsecured Notes due 2025, Caa1 (LGD5)
Rating Upgraded:
$600 million Senior Secured Notes due 2027, to Ba3 (LGD2) from B1
(LGD3)
Rating Assigned:
$400 million Senior Unsecured Notes due 2028, Caa1 (LGD5)
Rating Unchanged:
Speculative Grade Liquidity Rating, SGL-3
Outlook Action:
Outlook, Remains Stable
RATINGS RATIONALE
Viasat's B2 CFR is constrained by: (1) rising business risk flowing
from technological change and increasing supply of satellites; (2)
expected softness in revenue and EBITDA in 2020 because of the
impact of the coronavirus pandemic; (3) ongoing negative free cash
flow generation due to construction of three Viasat-3 satellites;
and (4) expectation that leverage (adjusted Debt/EBITDA) will
increase and be sustained above 5x in the next 12 to 18 months (5x
for fiscal 2020). The company's rating benefits from: (1)
vertically integrated business model with good balance among
segments; (2) good growth prospects of Satellite Services business,
driven by rising demand for broadband internet globally; (3) good
growth prospects of Government Systems business despite government
budget constraints; and (4) good backlog and pipeline of unawarded
value under existing contracts.
Viasat has adequate liquidity (SGL-3). Sources approximate $1
billion while it has uses of about $430 million in the next four
quarters. Sources include $304 million of cash at March 31, 2020
and about $680 million of availability under its $700 million
revolving credit facility due in January 2024 when the notes
transaction closes. Cash uses are comprised of about $400 million
of expected free cash flow consumption through the next four
quarters, mainly due to capital spending on ViaSat-3 and about $30
million amortization payment on Viasat's Export-Import Bank of the
United States facility due in October 2025, which helped to fund
ViaSat-2. The company has leverage and coverage covenants and
cushion are expected to be at least 20% in the next four quarters.
Viasat has limited flexibility to generate liquidity from asset
sales. The company has no refinancing risk until January 2024 when
its revolver comes due.
The stable outlook reflects expected good operating performance,
maintenance of adequate liquidity, and leverage being sustained
below 5.5x through the next 12 to 18 months as the company
constructs its Viasat-3 satellites.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Viasat's rating could be upgraded if it maintains sufficient
funding through construction and launch of the Viasat-3 satellites
and sustains leverage below 4x (5x for fiscal 2020).
The rating could be downgraded if Viasat sustains leverage above
5.5x (5x for fiscal 2020) or if liquidity becomes weak.
Viasat's environmental risk is evolving. Satellite companies own
operational ones as well as ones that have lived out their useful
lives and have become space debris. Given the number of satellites
to be launched in the future, debris from nonoperational satellites
or damaged because of collisions will be costly for operators.
Viasat has high social risk. Technological advancement is impacting
the way commercial and government customers consume information.
Viasat's network offerings are integrated into the US and foreign
government's defense activities. As a result of the classified or
sensitive nature of information it handles, the company would be
impacted meaningfully should data security breaches occur.
Viasat has moderate governance risk. The company's financial policy
follows a leveraging/deleveraging cycle due to satellite
construction from time to time. This is not expected to change.
The principal methodology used in these ratings was Communications
Infrastructure Industry published in September 2017.
Viasat, Inc., headquartered in Carlsbad, California, operates a
consumer satellite broadband internet business, a commercial
in-flight connectivity business, and provides satellite and related
communications, networking systems and services to government and
commercial customers. Revenue for the fiscal year ended March 31,
2020 was $2.3 billion.
VIDEO RIVER: Posts $161K Net Income in 2019
-------------------------------------------
Video River Networks Inc. reported net income of $161,171 on $0 of
revenue for the year ended Dec. 31, 2019, compared to net income of
$0 on $0 of revenue for the year ended Dec. 31, 2018.
As of Dec. 31, 2019, the Company had $1.69 million in total assets,
$1.53 million in total liabilities, and $161,171 in total
shareholders' equity.
As of Dec. 31, 2019, the Company had $850 cash on hand. The
Company anticipates that its cash position is not sufficient to
fund current operations. The Company has limited lending
relationships with commercial banks and is dependent upon the
completion of one or more financings or equity-raises to fund its
continuing operations.
The Company said, "We anticipate that we will seek additional
capital through debt or equity financings. While we are
aggressively pursuing financing, there can be no assurance that we
will be successful in our capital raising efforts. Any additional
equity financing may result in substantial dilution to our
stockholders."
Albert Garcia, CPA, at Dylan Floyd Accounting & Consulting, in
Newhall, California, the Company's auditor since 2020, issued a
"going concern" qualification in its report dated May 28, 2020,
citing that the Company has an accumulated deficit of $18,952,701
for the year ended Dec. 31, 2019. This factor raises substantial
doubt about the Company's ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at the
Securities and Exchange Commission's website at:
https://is.gd/DAPace
Headquartered in Torrance, California, Video River Networks Inc.
formerly known as Nighthawk Systems, Inc. has two lines of real
estate business: (1) promote and preserve affordable housing and
economic development across urban neighborhoods in the United
States; and (2) acquire hold and manage specialized assets
including hemp and cannabis farms, dispensaries, CBD related
commercial facilities, industrial and commercial real estate, and
other real estate related services to the CBD and the legal
cannabis industry.
VTV THERAPEUTICS: All Three Proposals Passed at Annual Meeting
--------------------------------------------------------------
vTv Therapeutics Inc. held its 2020 Annual Meeting of Stockholders
on June 11, 2020, at which the stockholders:
(a) elected Jeffrey B. Kindler, John A. Fry, Hersh Kozlov,
Paul G. Savas, Noel J. Spiegel, and Howard L. Weiner
to the Company's Board of Directors, each to serve for a
term to expire at the Company's 2021 annual meeting of
stockholders or until their successors are duly elected
and qualified;
(b) approved an amendment to the Company's 2015 Omnibus Equity
Incentive Plan to increase the number of authorized shares
reserved for issuance under the Omnibus Incentive Plan;
and
(c) ratified the appointment of Ernst & Young LLP as the
Company's independent registered public accounting firm
for the fiscal year ending Dec. 31, 2020.
About vTv Therapeutics
vTv Therapeutics Inc. is a clinical-stage biopharmaceutical company
focused on developing oral small molecule drug candidates. vTv has
a pipeline of clinical drug candidates led by programs for the
treatment of type 1 diabetes, Alzheimer's disease, and inflammatory
disorders. vTv's development partners are pursuing additional
indications in type 2 diabetes, chronic obstructive pulmonary
disease (COPD), and genetic mitochondrial diseases.
vTv Therapeutics reported a net loss attributable to common
shareholders of $17.91 million for the year ended Dec. 31, 2019
compared to a net loss attributable to common shareholders of $8.65
million for the year ended Dec. 31, 2018. As of March 31, 2020,
the Company had $7.39 million in total assets, $17.01 million in
total liabilities, $52.19 million in redeemable noncontrolling
interest, and a total stockholders' deficit attributable to the
company of $61.82 million.
Ernst & Young LLP, in Raleigh, North Carolina, the Company's
auditor since 2000, issued a "going concern" qualification in its
report dated Feb. 20, 2020 citing that to date, the Company has not
generated any product revenue, has not achieved profitable
operations, has insufficient liquidity to sustain operations and
has stated that substantial doubt exists about the Company's
ability to continue as a going concern.
WANSDOWN PROPERTIES: Proposes to Sell New York Property for $10.3M
------------------------------------------------------------------
Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the
Southern District of New York will consider Wansdown Properties
Corp. N.V.'s proposed sale guidelines in connection with the sale
of the real property located at 29 Beekman Place, New York, New
York to 29 Beekman Corp. in accordance with the terms of their
Residential Contract of Sale dated Sept. 25, 2019, for $10.3
million, subject to overbid, on June 16, 2020 at 10:00 a.m. or as
soon thereafter as counsel can be heard.
The Court has determined that the relief requested in the Motion to
Shorten Time is in the best interest of the Debtor, its estates and
creditors.
The Debtor was incorporated in 1979 under the laws of Curacao, in
accordance with Article 38 of the Commercial Code of the
Netherlands Antilles and continues to exist under the laws of the
Netherland Antilles. It was formed to, among other things, invest
and manage assets of Princess Achraf Pahlavi. In 1980, the Debtor
acquired the Property, which the Princess used on those occasions
she visited New York after she fled Iran due to the Iranian
revolution.
The Property is encumbered by a mortgage in favor of National
Investment Bank (N.A.). The Mortgage Lender has filed a proof of
claim in the Chapter 11 Case asserting a fully secured claim in the
amount of $5,627,089, inclusive of interest, default interest, and
fees.
The Property is vacant and does not have any tenants. It does not
generate any operating revenue.
During the final years of her life, the Princess' advanced age and
deteriorating health resulted in the Princess spending limited time
in New York. Consequently, the Debtor determined that it would not
need to keep the Property, and that it would be prudent to reduce
its expenses associated with the Property and staffing to maintain
the Property. Thus, beginning in 2014, the Debtor marketed the
Property for sale. However, it was unable to sell the Property,
and the Debtor terminated the listing and removed the Property from
the market.
The Princess died in January 2016. Thereafter, the Debtor resumed
its marketing of the Property. It worked with Charlie Attias, a
licensed real-estate broker at the Corcoran Group, to market and
sell the Property. In September 2019, Mr. Attias left Corcoran
Group and began working at Compass. After joining Compass, Mr.
Attias used Compass' resources to market the Property. As a result
of the process, the Property garnered interest from a number of
potential buyers, but Mr. Attias was unable to procure any binding
offers.
Ultimately, the Debtor received one binding offer directly from the
Purchaser in the amount of $10.3 million. The offer from the
Purchaser was not obtained through Mr. Attias, Corcoran, or
Compass.
Following the Debtor's receipt of the Purchaser's offer, the
Debtor, in consultation with its advisors, negotiated the Purchase
Agreement at arms'-length. The Purchase Agreement contains the
following material economic terms: (a) the purchase price for the
Property is $10.3 million, (b) the closing on the sale of the
Property will occur on Jan. 31, 2020, and (c) the Purchaser has
agreed to deliver a cash deposit of $1.03 million, which has been
provided by the Purchaser. The Purchaser is an unrelated third
party. Neither the Debtor nor its president (Mr. Golsorkhi) owns
any interest in the Purchaser directly or indirectly.
As a result of the unanticipated and significant increase in
general unsecured claims asserted against the Debtor, the Debtor
asks now to proceed with a sale of the Property under section 363
of the Bankruptcy Code, as set forth in the Motion. It further
asks to expedite the hearing on the sale of the Property, so that
it can be held on the Scheduled Confirmation Hearing.
The Purchase Agreement and thes Motion contain the following
extraordinary provisions as set forth in Section I.D of the Sale
Guidelines:
a. The Purchaser has stated that it is unwilling to proceed
with the transaction if the sale of the Property is subject
to competing bids.
b. The Debtor will ask to expedite the hearing on the Motion
to the Jan. 14, 2020 hearing date originally scheduled for plan
confirmation, so that a closing can occur by the Jan. 31, 2020
deadline under the Purchase Agreement.
c. The Debtor asks authorization to pay off the Mortgage
Lender at closing without further order of the Court, to avoid
diminution of its estate.
d. The Property is the Debtor's sole significant asset, and
thus the sale will be for substantially all of the assets of the
Debtor. The Debtor, however, will retain its books and records to
enable it to administer the Chapter 11 Case.
e. The proposed Sale Order contains findings of fact and
conclusions of law limiting the Purchaser's successor liability.
These provisions were requested by the Purchaser as provided in the
Purchase Agreement.
f. The Debtor asks relief from the 14-day stay imposed by
Bankruptcy Rule 6004(b) in order to promptly consummate the sale
within the closing deadline set forth in the Purchase Agreement.
The Motion discloses in greater detail the basis for such a
request.
Assumption of the Purchase Agreement is in the best interests of
the Debtor, its estate and creditors, because the proceeds
generated from the sale of the Property to the Purchaser under the
Purchase Agreement represents the highest and best offer for the
Property, and will allow the Debtor fund a chapter 11 plan. The
Debtor believes that it would be a mistake to abandon the Purchase
Agreement, and create a contract rejection damage claim with no
alternative transaction in sight.
In light of the Jan. 31, 2020 deadline to close the sale of the
Property to the Purchaser, the Debtor asks that the Sale Order be
effective immediately upon entry and that the 14-day stay under
Bankruptcy Rule 6004(h) be waived.
A copy of the Agreement is available at https://tinyurl.com/w43l2sk
from PacerMonitor.com free of charge.
About Wansdown Properties
Wansdown Properties Corporation, N.V.'s primary asset is a
seven-story townhouse located at 29 Beekman Place, New York, New
York. It was incorporated in 1979 under the laws of Curacao, in
accordance with Article 38 of the Commercial Code of the
Netherlands Antilles and continues to exist under the laws of the
Netherland Antilles. Wansdown Properties was formed as a holding
company to own and manage the Property for an affluent individual
who deceased in January 2016.
Wansdown Properties Corporation sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. N.Y. Case No. 19-13223) on Oct.
8, 2019. At the time of the filing, the Debtor was estimated to
have assets of between $10 million and $50 million and liabilities
of the same range. The case is assigned to Judge Stuart M.
Bernstein.
Counsel for the Debtor:
Paul A. Rubin
Hanh V. Huynh
RUBIN LLC
345 Seventh Avenue, 21st Floor
New York, New York 10001
Tel: 212.390.8054
Fax: 212.390.8064
E-mail: prubin@rubinlawllc.com
hhuynh@rubinlawllc.com
WATERSIDE CONSTRUCTION: Hires Buddy D. Ford as Bankruptcy Counsel
-----------------------------------------------------------------
Waterside Construction Services, LLC seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ Buddy
D. Ford, P.A. as bankruptcy counsel.
The professional services the law firm will render to the Debtor
include:
(a) analyze the financial situation, render advice, and assist
the Debtor in determining whether to file a petition under Title
11, United States Code;
(b) advise the Debtor with regard to the powers and duties of
the Debtor and as debtor-in-possession in the continued operation
of the business and management of the property of the estate;
(c) prepare and file the petition, schedules of assets and
liabilities, statement of affairs, and other documents required by
the Court.
(d) represent the Debtor at the Section 341 Creditors'
meeting;
(e) give the Debtor legal advice with respect to its powers
and duties as Debtor and as debtor-in-possession in the continued
operation of its business and management of its property; if
appropriate;
(f) advise the Debtor with respect to its responsibilities in
complying with the United States Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
(g) prepare, on behalf of the Debtor, necessary motions,
pleadings, applications, answers, orders, complaints, and other
legal papers and appear at hearings thereon;
(h) protect the interest of the Debtor in all matters pending
before the court;
(i) represent the Debtor in negotiation with its creditors in
the preparation of the Chapter 11 Plan; and
(j) perform all other legal services for the Debtor as
debtor-in-possession which may be necessary herein, and it is
necessary for the Debtor as debtor-in-possession to employ this
attorney for such professional services.
The standard hourly rates of the firm's attorneys and paralegals
are as follows:
Buddy D. Ford, Esq. $425
Senior associate attorneys $375
Junior associate attorneys $300
Senior paralegal services $150
Junior paralegal services $100
Prior to the commencement of this Chapter 11 case, the Debtor paid
a total advance fee of $12,000.00, which include:
(a) $2,000.00 pre-filing fee retainer
(b) $8,283.00 post-filing fee/cost retainer
(c) $1,717.00 filing fee
Buddy D. Ford, P.A. does not have any interest adverse to the
Debtor or the estate, according to court filings.
The firm can be reached through:
Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Telephone: (813) 877-4669
E-mail: Buddy@tampaesq.com
About Waterside Construction Services
Waterside Construction Services, LLC, a general and roofing
contractor based in Largo, Florida, sought protection under Chapter
11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-04260) on
June 1, 2020, listing under $1 million for both assets and
liabilities. Buddy D. Ford, P.A., led by Buddy D. Ford, Esq.,
represents the Debtor as counsel.
[*] 20 Retailers That Could File for Bankruptcy in 2nd Half of 2020
-------------------------------------------------------------------
The National Law Review features the projected retailers that could
file bankruptcy protection in the 2nd half of 2020.
The unprecedented global COVID-19 pandemic has created a limbo for
most retail tenants, and in some cases, left landlords without
payment of rents. Furthermore, some states have placed moratoriums
on eviction actions, allowing tenant to stay and not pay. However,
as states begin to open back up for business there appears to be
light at the end of this tunnel. Still, expect a host of retailers
to file for protection in July and August to eliminate stores and
try to renegotiate rents.
Although we normally provide a list of 10 retailers to watch, we
have increased the list to 20 given the current state of affairs.
Following are the top 20 to retailers to watch for possible Chapter
11 filing(s) in the remaining year:
1. Chuck E. Cheese's – Secret Pizza Selling Flopped. The Complex
reports that the company's plan to secretly sell pizza under
Pasqually's Pizza & Wings on delivery apps, a reference to a
musician who plays in Chuck E. Cheese’s band, flopped. The Wall
Street Journal cited that its parent company, CEC Entertainment,
was almost $1 billion in debt as it asked lenders for a $200
million loan to keep the business open. With 610 locations across
47 states that provide primarily closed quarters space for kids,
it's hard to see how this company does not file.
2. AMC - Let's Go to the Movies? According to the Hollywood
Reporter, the company is expected to disclose first-quarter
financials showing a $2.4 billion loss due to the pandemic. Some
analysts think the company can hold out until October 2020 before
making a bankruptcy call. However, the real test will be will
moviegoers feel safe to go to the cinemas when they open this
summer?
3. Brooks Brothers – Nowhere to Wear a Suit. Forbes reports
revenues have been flat for the last three years, and the
202-year-old company recently took a loan of $20 million from
Gordon Brothers, the bankruptcy liquidator. Bloomberg notes that
Authentic Brands Group and Simon Property Group are discussing
purchasing the company in a Chapter 11 filing. Brooks Brothers
faced a difficult market prior to the outbreak with relaxed dress
codes. Adding the cancellation of a host of events this year, like
weddings and other formal functions, does not bode well for the
retailer.
4. Bed Bath & Beyond. According to The Motely Fool, the company
ended fiscal 2019 with $1.4 billion of cash and investments, up
from $1 billion a year earlier. Yet, the company instead of using
this time of closed stores to remodel or re-envision itself, has
the same old floor plans. Further, it continues to have
difficulties in online sales, unlike its competitors The Home
Depot, Target, and The TJX Companies.
5. Victoria's Secret – Closing 1/4 of stores. USA Today reports
in May 2020 that the company planned to permanently close
approximately a quarter of its 1,000 stores in the U.S. and Canada
in 2020. Prior to the pandemic, the company suffered from lack
luster sales and slower foot traffic. Perhaps a smaller footprint
will help.
6. Ascena Retail Group. With more than 3,400 stores, the owner of
women's clothing brands, including Loft, Ann Taylor, Justice, Lane
Bryant, and Catherines has been hit hard by the pandemic. Many
landlords have failed to receive any rent payments from the brands
since the stay at home orders were issued. With stores closed and
tough competition with on-line sales, bankruptcy appears to be the
only option.
7. LA Fitness - A Reduction in Footprint? Last year the Irvine,
California company was named number one on Club Industry's Top 100
Clubs list for the sixth consecutive year. However, the
difficulties in operating a club in this environment are clear. If
this company does file, expect it to use the filing as a true
footprint reduction to consolidate stores. The company could follow
in the footsteps of Gold's Gym and 24 Hour Fitness, which both just
recently filed.
8. GAP - Falling into Bankruptcy? The company, which owns Banana
Republic and Old Navy, announced it would close 230 stores prior to
the pandemic. Reuters reported in late April, the company stated
that it was suspending rent and needed to borrow more money.
Fortune reports that CEO, Sonia Syngal recently called on landlords
to be flexible and work with retailers to get through the biggest
crisis in retail's modern history. The San Francisco Chronical
predicts that the retailer will be in bankruptcy court, but that it
can use its good credit ratings and relatively little debt to stave
off the filing for a bit.
9. Guitar Centers - Filing Towards End of Year? Bloomberg reports
that the company gained some reprieve with new bonds for old debt.
The largest U.S. retailer of musical instruments and equipment
fulfilled its previously skipped debt payments. However, with
concerts and other venues not opening, it may be difficult for them
to stave off bankruptcy this year,
10. GNC - Filing in August in Pittsburgh? The Trib reports that
the Pittsburgh-based company secured a deal to extend time to pay
down debt. However, the deal is only good through mid-August. The
company closed 900 stores last year and S&P downgraded the company.
Many thought that GNC would follow competitors like the Vitamin
World, which filed in 2017. Bloomberg reports that the company
continues to hoard cash and not pay rent to landlords.
11. Party City - Is the Party Over? RetailDive reports the company
carries significant debt from a leveraged buyout and was hurt from
a helium shortage last year for balloon sales. This coupled with a
poor Halloween and the pandemic with cancelled graduations and
prohibitions against large gatherings could lead to a filing soon.
12. The Men's Wearhouse and Jos. A. Banks - Two for One Filing?
Bloomberg reports that Tailored Brands, the retailers'
Houston-based parent company, is trying to restructure more than $1
billion in debt. Kirkland & Ellis and investment bank PJT Partners
are advising Tailored Brands on restructuring, The parent and its
affiliates have struggled as demand for suits and other formal wear
has declined.
13. GameStop - The New Blockbuster Video. RetailDive reports that
the company has a miserable 2019 -- closing about 200 of its stores
and sales dropping 28%. Moody's and S&P both downgraded the
retailer prior to the pandemic hit. Unlike Blockbuster, the company
has a strong balance sheet and flexible leases. But it is difficult
to see how it can continue in this new environment where gamers can
get there content on-line.
14. Francesca's. According to Alpha Street, the Houston-based,
boutique women's apparel and accessory retailer, continued to cut
costs by closing more than 10 of its 700-plus stores and laying off
a sizeable chunk of its corporate staff. However, last summer, the
company secured $10 million in new financing. Despite the belt
tightening, the company appears poised for a possible Chapter 11
filing as it struggles to both drive traffic towards its key
fashion trends and compete due to the continuing shift in customer
demand away from physical stores to on-line venues.
15. Stein Mart. RetailDive reports that despite a positive profit
in first quarter 2019, the company's top sales have fallen for the
past few years. The company has taken steps to install
self-service Amazon lockers in about 200 of its 283 stores in an
effort to drive traffic. With tight margins and online retailers,
the company faces difficulties and could be forced to file for
bankruptcy protection.
16. Rite Aid. Investor Place reports with more than 2,400 stores,
Rite-Aid remains challenged and is engaged in a never-ending
turnaround plan. Although the bankruptcy filing of Fred's retail
pharmacy freed up some market share, the company continues to fight
for survival in a competitive pharmacy environment. Further, the
pandemic is keeping people away from stores, including drug
stores.
17. Hobby Lobby – Divine Intervention? According to Business
Insider, the company's founder reportedly told employees a message
from God in informed his decision to leave stores open amid the
start of coronavirus outbreak. The decision was quickly changed
with the closing of all stores in April. All though some have
started to re-open, the company could use a bankruptcy filing to
reduce its footprint.
18. 99 Cents Only – Will Consumers Continue to Treasure Hunt? –
RetailDive reports that the company recently made a deal with
creditors and its private equity owners to trade debt for equity.
The announcement caused S&P to downgrade the retailers credit
rating, to CC. The deal is reminiscent of Charlotte Russe, which
obtained the same relief for only a brief respite prior to filing
for Chapter 11. Will people go back to the retailer, which is
essentially a "treasure hunt" for consumers sifting for deals, or
will the virus' log lasting impact change consumer behavior to
avoid such "treasure hunting" stores.
19. RetailDive reports that prior to the virus, the company had a
CCC+ or lower rating from S&P. Now with the last few months of
stay in orders, many consumers have been making their purchases
online, using familiar sites like Amazon. Can the pet store
company pivot to more of an online mode or will its heavy focus on
physical stores lead it to a filing?
20. Best Buy - Can its Customer Focused Approach Work? According to
MarketWatch, the company's reopening strategy is focused on
one-on-on service. The Street recently listed them as one of the
top 15 to watch for a filing. However, the question is will the
company's customer-focused approach work with consumer behavior in
the new normal?
If you are an owner, developer, and/or landlord, it is important to
know and understand how these changes will affect your shopping
center.
[*] Fox Rotschild: 90-Day Bankruptcy Solution for Franchises
------------------------------------------------------------
Craig Tractenberg of Fox Rothschild LLP wrote an article on JDSupra
titled "The 90 day Franchise Bankruptcy Solution".
The CARES Act has amended the Bankruptcy Code to provide an
expedited and easier version of a business bankruptcy proceeding.
We now have "Subchapter 5" for small business and individual
debtors. This process fulfills a sweet spot for small franchisors
and franchisees. It anticipates a Chapter 11 type result, without
the administrative headaches and expense, within 90 days of
filing.
The purpose of this new section of the Bankruptcy Code is to allow
business debtors and certain individuals with debts below $ 7.5
Million to reorganize their obligations under in a much less
expensive and streamlined manner. Unlike the previous Chapter 11,
the Subchapter 5 bankruptcy does not require voting on a plan of
reorganization. Instead, like a Chapter 13 wage earner's plan, the
debtor's disposable income is used to repay creditors. This
eliminates the need for obtaining the consent of a class of
"impaired" creditors as required under basic Chapter 11. It also
relaxes some of the rules for administration of the Chapter 11 plan
and the payment of United States Trustee quarterly fees. Certain
individual debtors may also benefit from the elimination of the
so-called "absolute priority rule" which prevented exemption of
real or personal property in some cases.
The new "disposable income" requirement may mandate a minimum
payment to creditors higher than what is now man under Chapter 11.
Some of the normal Chapter 11 requirements, such as monthly
operating reports, special Debtor in Possession bank accounts and
supervision by special Trustees provide protection to creditors and
parties in interest.
We anticipate a uptick in filings after the CARES Act funding and
its forgiveness period expires. Because it provides a needed remedy
for small business debtors and individuals concerned with the
administrative burdens and expense of a Chapter 11 filing, we
should be prepared to use Subchapter 5 to our advantage.
Franchisors should plan now to have a preset protocol for dealing
with their franchisees who file Subchapter 5 because of the
compressed deadlines. Franchisors can also suggest or aid
struggling franchisees with Subchapter 5 to maintain their
franchise during these uncharted times.
For franchisees and emerging franchisors, Subchapter 5 is a
prescription to save their business from the economic consequences
of the pandemic. There are also mortgage modifications provisions
that will help guarantors of business debt to same their homes.
As these cases are filed, we will be compiling information and
helpful advice in navigating the new bankruptcy world.
[*] Spilman Thomas: 10 Bankruptcy Truths that Creditors Should Know
-------------------------------------------------------------------
Rayford (Trip) Adams III of Spilman Thomas & Battle, PLLC, wrote an
article on JDSupra on "Top 10 Bankruptcy Truths for Creditors to
Know."
Much of the bankruptcy chatter arising from the pandemic world in
which we find ourselves is now focusing on the cascade of new
bankruptcy cases that are predicted to arrive soon. We have already
seen the effects of closed stores and no foot traffic on some of
the big names in retail (J.C. Penney, J. Crew, Neiman Marcus, Pier
1, etc.), but many consumer cases are sure to follow, the result of
the staggering number of layoffs and lost jobs that the pandemic
has caused. Now seems an appropriate time to remind creditors of
certain bankruptcy principles to keep in mind.
1. The automatic stay is, well, automatic.
a. The stay goes into effect from the exact moment the petition
is filed.
b. The stay is automatic. No order is necessary to trigger it.
c. Generally, any collection action taken after the filing of
the case is a violation of the automatic stay.
d. As a result, heed all notices that a bankruptcy petition has
been filed, and check PACER to confirm a filing.
e. Even if you have not received notice, checking PACER for a
filing before commencing or taking a significant action (demand
letter, lawsuit, foreclosure, repossession, etc.) is prudent.
2. The automatic stay is broad and probably covers whatever the
creditor has already done or wants to do soon.
a. The automatic stay is the great equalizer: it gives the
debtor relief and levels the playing field among the creditors. The
"race to the courthouse" ends.
b. As a result, the automatic stay is intentionally broad and
applies to all actions to collect debts, perfect liens, attach
property, repossess property, setoff accounts, etc.
c. The exceptions listed in the statute are narrow but
important.
d. Outside of those exceptions, a creditor must state grounds
and obtain an order of the bankruptcy court relieving it from the
automatic stay.
3. Know whether, when, and where a proof of claim has to be filed,
and file it on time and in the right place.
a. Read the initial bankruptcy notice that comes a few days
after the case is filed. It contains important information:
i. The date of the filing;
ii. The type (chapter) of bankruptcy case;
iii. The date, time, and place of the 341 creditors' meeting;
iv. The deadline for objecting to the debtor's discharge or
to the dischargeability of the debtor's obligations to the credit
union (see #7 below); and
v. A notice about filing a proof of claim.
b. The type of case will govern when, and even whether, a claim
is filed.
c. The type of debt, and whether it is secured by a primary
residence, will govern what documentation or supplements should be
filed with a proof of claim form.
4. Receiving a preference payment from a future bankruptcy debtor
is not illegal (or immoral). Always take the money; worry about a
preference claim later.
a. Generally speaking, a preference is a payment or transfer of
the bankruptcy debtor's property (including the giving of a lien or
deed of trust) made with respect to an existing debt within 90 days
before a bankruptcy filing.
b. Even if you know the debtor intends to file for bankruptcy,
take the payment. Defenses are often available, and cases often
settle for less than 100 percent.
5. Bankruptcy cases come in a variety of forms and circumstances.
a. Sometimes, the cases compel quick and early compromise
because there are few spoils available for the victor.
b. But, other times, litigation can be useful.
c. Early and careful analysis of the bankruptcy papers, the
issues, the value of property or assets impacted by those issues,
and the merits and likelihood of recovering the value of those
assets is therefore critical to an early and full understanding of
the alternatives in each bankruptcy case.
6. A discharge ends the individual debtor's personal liability, but
the creditor's lien is forever (except when it is not).
a. For the individual debtor (excluding entities), the goal is a
fresh start, resulting from the discharge of the debtor's personal
liability for all dischargeable debts.
b. As a result, the creditor cannot take any action against the
debtor to collect a discharged debt as the personal liability of
the debtor.
c. Absent affirmative action by a debtor or trustee, all liens
pass through the bankruptcy unaffected. Therefore, a debtor seeking
to retain property affected by liens can and will often still pay
discharged debts voluntarily.
d. The debtor who wants to keep the collateral must keep paying
for it, either through a reaffirmation of a loan or continued
payments.
7. Sometimes, creditors can object to the discharge of their debts;
but they must act quickly.
a. Section 523 of the Bankruptcy Code provides a litany of debts
that are not dischargeable (even if the debtor gets a general
discharge in the case), but, in most cases, a creditor must
affirmatively object to the discharge of its debt by filing an
adversary proceeding (litigation within the bankruptcy case).
b. Many of the grounds for such objection stem from fraud or
dishonesty on the part of the debtor.
c. The deadline for the filing objections to the discharge of a
particular debt is about 90 days after the creditors' meeting and
will be listed in the initial notice of the filing of the
bankruptcy case. If the complaint is not filed within the time
period established (which can be extended by the court), the debt
is discharged.
d. NOTE: There is no bankruptcy discharge for a Chapter 7 debtor
that is not an individual (e.g., corporation, limited liability
company, partnership, etc.). Chapter 11 non-individual debtors can
obtain a discharge if provided for in a plan and approved by the
court.
8. The creditor's contract terms can usually be modified in a
Chapter 11 or Chapter 13 case, unless the only lien is on the
debtor's principal residence.
a. One of the essential elements of reorganization cases under
Chapters 11 and 13 is the debtor's right to modify the terms of the
loan with the creditor: to adjust the interest rate, the term, the
payment amount, and/or the principal amount.
b. These proposed modifications are subject to court approval
during the plan confirmation process and cannot be approved over
the creditor’s objection, unless certain requirements and
standards are met.
c. In Chapter 13 cases and individual Chapter 11 cases (outside
of some limited circumstances in a small business debtor Subchapter
V case), the terms of a home mortgage loan cannot be modified
without the consent of the lender, if the only collateral for the
loan is the debtor's principal residence.
9. Focus quickly on the issues of the reaffirmation of secured
claims.
a. The reaffirmation agreement must be signed by the debtor and
the lender and filed with the court within 60 days after the first
date set for the creditors' meeting. The agreement must be on the
approved form and must include copies of the note and security
documents establishing the lien on the collateral.
b. For personal property collateral (e.g., car loans), the
failure to comply with the requirements could result in the
issuance of an order finding that the debtor has complied with all
requirements under the statute and that the lender cannot repossess
the personal property if the debtor continues the regular
payments.
c. In the Fourth Circuit, the debtor gets a "ride through" on
all real property loans, meaning that if the loan is current at the
time the petition is filed, the debtor can continue to "pay and
stay." Reaffirmations of real estate loans are approved only if the
terms of the loans are being changed to the debtor's benefit.
10. Think twice before participating in an involuntary bankruptcy
case.
a. Most bankruptcy cases are started as voluntary cases by
debtors seeking the relief provided by the Bankruptcy Code.
However, it is possible for creditors to begin a bankruptcy case as
an involuntary case.
b. Generally speaking, three creditors owed an aggregate of at
least $16,750 must participate in the filing of an involuntary
case. Therefore, one creditor may be approached by another creditor
and be asked to participate as a petitioning creditor.
c. But, be very careful when considering whether to join.
i. If the debtor convinces the Court to dismiss the
involuntary petition, the debtor will be awarded attorneys' fees
and possibly damages to be paid by the petitioning creditors.
ii. Sometimes, the lead petitioning creditor has a personal
vendetta that increases the likelihood of dismissal of an
involuntary petition.
iii. Try to determine whether there is something in the case
that is likely to benefit the creditors, usually evidence the
debtor has made large preferential payments to other creditors or
fraudulent transfers to other parties, particularly owners,
officers, or other insiders.
11. (BONUS) Legal fees spent early are more productive than legal
fees spent late.
[^] BOOK REVIEW: BIG BOARD: A History of the New York Stock Market
------------------------------------------------------------------
Author: Robert Sobel
Publisher: Beard Books
Soft cover: 395 pages
List Price: $34.95
Order your personal copy today at
https://ecommerce.beardbooks.com/beardbooks/the_big_board.html
First published in 1965, The Big Board was the first history of the
New York stock market. It's a story of people: their foibles and
strengths, earnestness and avarice, triumphs and crash-and-burns.
It's full of entertaining anecdotes, cocktail-party trivia, and
tales of love and hate between companies and investors. Early
investments in North America consisted almost exclusively of land.
The few securities holders lived in cities, where informal markets
grew, with most trading carried out in the street and in
coffeehouses. Banking, insurance, and manufacturing activity
increased only after the Revolution. In 1792, 24 prominent New York
businessmen, for whom stock- and bond-trading was only a side
business, met under a buttonwood tree on Wall Street and agreed to
trade securities on a common commission basis. Five securities were
traded: three government bonds and two bank stocks. Trading was
carried out at the Tontine Coffee-House in a call market, with the
president reading out a list of stocks as brokers traded each in
turn.
The first half of the 19th century was heady for security trading
in New York. In 1817, the Tontine gave way to the New York Stock
and Exchange Board, with a more organized and regulated system.
Canal mania, which peaked in the late 1820s, attracted European
funds to New York and volume soared to 100 shares a day. Soon, the
railroads competed with canals for funding. In the frenzy, reckless
investors bought shares in "sheer fabrications of imaginative and
dishonest men," leading an economist of the day to lament that
"every monied corporation is prima facia injurious to the national
wealth, and ought to be looked upon by those who have no money with
jealousy and suspicion."
Colorful figures of Wall Street included Jay Gould and Jim Fisk,
who in 1869 precipitated one of the worst panics in American
financial history by trying to corner the gold market. Almost
lynched, the two were hauled into court, where Fisk whined, "A
fellow can't have a little innocent fun without everybody raising a
halloo and going wild." Then there was Jay Cooke, who invented the
national bond drive and, practically unaided, financed the Union
effort in the Civil War. In 1873, however, faulty judgement on
railroad investments led to the failure of Cooke & Co. and a panic
on Wall Street. The NYSE closed for ten days. A journalist wrote:
"An hour before its doors were closed, the Bank of England was not
more trusted."
Despite J. P. Morgan's virtual single-handed role in stemming the
Knickerbocker Trust panic of 1907, on his death in 1913, someone
wrote "We verily believe that J. Pierpont Morgan has done more harm
in the world than any man who ever lived in it." In the 1950s,
Charles Merrill was instrumental in changing this attitude toward
Wall Streeters. His firm, Merrill Lynch, derisively known in some
quarters as "We, the People" and "The Thundering Herd," brought
Wall Street to small investors, traditionally not worth the effort
for brokers.
The Big Board closes with this story. Asked by a much younger man
what he thought stocks would do next, J.P. Morgan "never hesitated
for a moment. He transfixed the neophyte with his sharp glance and
replied 'They will fluctuate, young man, they will fluctuate.' And
so they will."
Robert Sobel died in 1999 at the age of 68. A professor at Hofstra
University for 43 years, he was a prolific historian of American
business, writing or editing more than 50 books.
*********
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