/raid1/www/Hosts/bankrupt/TCR_Public/200729.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, July 29, 2020, Vol. 24, No. 210
Headlines
10 - 5TH LLC: US Trustee Has Issues With Plan
929485 FLORIDA: Sunset Waypoint Objects to Disclosure Statement
AFFORDABLE AUTO REPAIR: 8% if Unsecureds Vote in Favor of Plan
ALTHAUS FAMILY: Aug. 11 Hearing on Disclosure Statement
ATIF INC: Creditor Trustee Hires Underwood as Special Counsel
BATTERS BOX: Unsecureds Will be Paid $350 Per Month for 36 Months
BELLE INVESTMENTS: Aug. 11 Hearing on Disclosure Statement and Plan
BERKELEY PROPERTIES: Case Summary & 2 Unsecured Creditors
BOULDER CAB: Hires Winner Law as Special Counsel
BROOKFIELD RESIDENTIAL: S&P Lowers ICR to 'B'; Outlook Negative
CALPINE CORP: S&P Rates $1.5BB Senior Unsecured Notes 'B'
CONGOLEUM CORPORATION: Taps B. Riley FBR as Investment Banker
CONGOLEUM CORPORATION: Wollmuth Represents Simplon, 3 Others
ECO-STIM ENERGY: Debtor Will Liquidate its Asset
FINGERLAKES HOSPITALITY: Hires Orville & McDonald as Attorney
FRASER'S BOILER: Hires Pond North as Mediation Counsel
GLOBAL HEALTHCARE: Unit Inks $800K Deal to Buy Nursing Facility
GREEN APPLE: Fails to Pay Proper Wage, Arellano Alleges
GT POLARIS: Moody's Assigns B3 CFR, Outlook Stable
GT POLARIS: S&P Assigns 'B-' Issuer Credit Rating; Outlook Stable
HEATING AND PLUMBING: Unsecureds to be Paid From Gross Revenue
IFS SECURITIES: Says Settlements to Bring in $1.12 Million
INGENU INC: Case Summary & 20 Largest Unsecured Creditors
JASON INDUSTRIES: Hires Moelis & Company LLC as Investment Banker
JENNIE STUART MEDICAL: Fitch Affirms BB+ Issuer Default Rating
KIP MOTOR: Seeks to Hire Marilyn Garner as Counsel
KKR REAL ESTATE: S&P Assigns 'BB-' ICR; Outlook Negative
KKR REAL: Moody's Assigns Ba3 CFR & Ba2 Senior Secured Rating
LAKELAND TOURS: July 29 Deadline Set for Committee Questionnaires
LAKELAND TOURS: Moody's Cuts PDR to D-PD on Chapter 11 Filing
LATAM AIRLINES: Seeks to Hire Larrain Vial as Investment Banker
LATAM AIRLINES: Seeks to Tap PwC Consultores as Auditor
LIBBEY GLASS: Hires Deloitte & Touche as Independent Auditor
LIBBEY GLASS: Hires Deloitte Tax as Tax Service Provider
MARTIN MIDSTREAM: Gets Requisite Consents to Amend Indenture
MASHANTUCKET (WESTERN) PEQUOT: S&P Raises Term Loan Rating to CCC-
MONAKER GROUP: Prices $2 Million Registered Direct Offering
NEOVASC INC: Partially Prepays Convertible Debenture
NEW COTAI: Court Approves Disclosure Statement
NEW COTAI: July 30 Plan Confirmation Hearing Set
OCCASION BRANDS: July 30 Deadline Set for Committee Questionnaires
P&L DEVELOPMENT: Moody's Cuts CFR to B3, Outlook Stable
PARTY CITY: Moody's Rates New $190MM First Lien Notes Due 2025 Caa2
PARTY CITY: S&P Cuts ICR to 'SD' on Completed Distressed Exchange
PIONEERS MEMORIAL: Fitch Cuts General Obligation Bonds to BB
PROFESSIONAL FINANCIAL: Case Summary & 32 Top Unsecured Creditors
REMINGTON OUTDOOR: Case Summary & 40 Largest Unsecured Creditors
SABLE PERMIAN: Hires Katten as Counsel to Disinterested Managers
SCULPTOR CAPITAL: S&P Alters Outlook to Neg., Affirms 'BB-' ICR
SPANISH BROADCASTING: Suspending Filing of Reports with SEC
SUMMIT MATERIALS: Moody's Rates New $700MM Unsecured Notes 'B2'
SUMMIT MATERIALS: S&P Rates New $700MM Senior Notes 'BB'
SUNPOWER CORP: Signs New Employment Contracts with Executives
TRAVELERS REST: Hires Strandco Inc. as Management Company
WALDEN PALMS: US Bank National Objects to Disclosures and Plan
WAYNE CITY: Moody's Alters Outlook on B2 Issuer Rating to Stable
WPB HOSPITALITY: Unsecureds Recovery Projected at 0% to 100%
YUMA ENERGY: Hires Getzler Henrich as Financial Advisor
*********
10 - 5TH LLC: US Trustee Has Issues With Plan
---------------------------------------------
William K. Harrington, the United States Trustee for Region 2,
objects to the adequacy of the information contained in 10 – 5th
AVE., LLC's Disclosure Statement and objects to the confirmation of
Debtor's Plan of Reorganization.
The U.S. Trustee points out that the Debtor's Disclosure Statement
does not contain adequate information as described and should be
amended to address the issues raised by the United States Trustee.
The U.S. Trustee challenges that the Debtor's Plan was proposed in
good faith as it is fundamentally unfair to non-related general
unsecured creditors by forcing the Class 3 creditor to wait an
additional five years to receive its dividend which value is
significantly diluted by that passage of time even if the Court
does not take into account the already decade-long delay imposed on
the Class 2 and 3 creditors by the Debtor and the former owners of
the Debtor's sole real estate asset.
According to the United States Trustee, the Debtor has admitted
that it has no business presently, had no prepetition business
having been created only to receive its sole real estate assets
from the "hand" of JRBInc to which its Plan proposes to "hand" that
property right back to JRBInc now that it has been "sanitized"
through the Debtor's Chapter 11 case.
The U.S. Trustee asserts that the Debtor has not made a sufficient
showing that its Plan is feasible and that its provisions will be
carried out.
About 10 - 5th LLC
10 - 5th LLC sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Conn. Case No. 19-22132) on Dec. 23, 2019. The
petition was signed by James Barrett, member. At the time of the
filing, the Debtor was estimated to have assets of between
$100,001
and $500,000 and liabilities of the same range. The Debtor is
represented by the Law Offices of Jeffrey Hellman, LLC.
929485 FLORIDA: Sunset Waypoint Objects to Disclosure Statement
---------------------------------------------------------------
Sunset Waypoint, LLC, filed an objection to 929485 Florida, Inc.'s
Disclosure Statement.
Sunset asserts that at Page 8 of 36 of the Disclosure Statement,
under the heading "Events Leading to the Filing of the Liquidation
Case" the Debtor makes multiple representations of Sunset's
position with respect to the executory contract described therein
which are either false, misleading or incomplete.
Sunset points out that in the second paragraph of that section,
Debtor states that Sunset Waypoint failed and refused, for a period
of four years to make any effort to advance the executory contract
to closing.
Sunset further points out that this is both false and misleading in
that, among other things, the delay in reaching a closing was
largely caused by (i) multiple third party legal challenges to the
City’s development code, including related appeals, and (ii) a
moratorium on new commercial development imposed by the City due to
the inadequacy of the City’s sewer systems and a lack of funding
for replacement or expansion of the systems.
According to Sunset, in the last two paragraphs of the referenced
section of the Disclosure Statement, Debtor mis-characterizes the
nature and terms discussed concerning the potential settlement of
the dispute between Debtor and Sunset.
Counsel to Sunset:
Jay B. Verona, Esq.
SHUMAKER, LOOP & KENDRICK, LLP
101 E. Kennedy Blvd., Suite 2800
Tampa, Florida 33602
Phone (813) 229-7600
Facsimile (813) 229-1660
E-mail: jverona@shumaker.com
About 929485 Florida
929485 Florida, Inc., classifies its business as single asset real
estate (as defined in 11 U.S.C. Section 101(51B)). 929485 Florida
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
M.D. Fla. Case No. 19-09424) on Oct. 3, 2019. At the time of the
filing, Debtor disclosed assets of between $1 million and $10
million and liabilities of the same range. Judge Caryl E. Delano
oversees the case. The Debtor is represented by Edmund S. Whitson,
III, Esq., at Adams and Reese, LLP.
AFFORDABLE AUTO REPAIR: 8% if Unsecureds Vote in Favor of Plan
--------------------------------------------------------------
Affordable Auto Repair, Inc., filed a Plan and a Disclosure
Statement.
The loans completely strangled the Debtor's cash-flow, gobbling up
approximately $25,000 from the Debtor every week. The lenders
claim to be secured against the receivables and assets of the
Debtor, but the Debtor only had $10,000 of liquid capital when the
case was filed, and $4,000 in receivables. Very few, if any, of
these creditors have clearly perfected UCC Article 9 liens. Faced
with a mountain of debt from the failed expansion effort,
litigation between the equity holders, and the oppressive loans
eating the daily operating capital of the Debtor, a Chapter 11
petition was filed on 23 September 2019.
Class 2 Claims Secured on Property other than the Real Property:
* Class 2A: Secured Claim of On Deck Capital, Inc. This class is
impaired. The alleged secured claim of On Deck Capital, Inc.
allegedly secured by the Second Priority Lien on the Intangible
Property in the alleged amount of $163,058 is subject to removal
and "stripping" because it does not attach to any equity in the
collateral whatsoever. As such, although it is claimed by OnDeck
to be a secured claim, it will be treated as completely unsecured.
* Class 2B: Secured Claim of Mr. Advance LLC. This class is
impaired. The secured claim Mr. Advance LLC is in the amount of
$40,000 or lessor amount as appropriate to account for payments or
other reductions on the claim that may have otherwise been applied
against the obligation. The secured claim of secured by the Third
Priority Lien on the Intangible Property shall be paid as provided
within the approved settlement between the Debtor and Mr. Advance.
* Class 2C: consists of a single creditor, 1333 Bon View
Corporation. This class is impaired. The Debtor assumes the lease
obligation referenced herein Class 2C, and the lease will remain in
full force and effect except as modified herein. The total amount
necessary to cure the default under the lease is $30,356, of which
$4,245 is secured against a security deposit and $26,111 is
unsecured. This amount may be lower at the Effective Date of the
plan to reflect payments made toward the arrears or other
reductions in the amount due to Bon View. The full amount of the
arrears will be cured by the Debtor with consent of Bon View over
the first 24 months of the Plan following the Effective Date, with
interval payments of $1,265, paid on the first day of the month for
no more than 24 consecutive months.
* Class 2D: Secured claim of AKF, Inc. This class is impaired.
The alleged secured claim of AKF, Inc. allegedly secured by the
Fifth Priority Lien on the the Accounts Receivable in the alleged
amount of $15,714 is subject to removal and "stripping" because it
does not attach to any equity in the collateral whatsoever. As
such, although it is claimed by AKF to be a secured claim, it will
be treated herein as completely unsecured.
* Class 2E: Secured claim of EBF Partners, LLC d/b/a Everest
Business Funding. This class is impaired. The amount of the
allowed secured claim of EBF Partners, LLC d/b/a Everest Business
Funding secured by the First Priority Lien on the Intangible
Property shall be in the amount of $30,375, or such lessor amount
as appropriate to account for payments or other reductions on the
claim that may have otherwise been applied against the obligation.
The Everest First Priority Lien shall be paid as agreed by the
Stipulation for Plan Treatment between the Debtor and Everest.
Class 4 consist of general unsecured Claims. There are multiple
treatment possibilities for Class 4 Members:
* CLASS 4 TREATMENT A. Treatment in the Event that Class Member
Votes in favor of Confirmation of the Plan and supports
confirmation of the Chapter 11 Plan: Total Amount of claims is
$318,241.84 to be paid quarterly at $2,262 beginning on Effective
and ending on 12th Payment with interest rate at 4.0%. Total payout
is $ $25,459.35 and if with interest is $27,140. Total payout in
percentage is 8.0%. This class is impaired.
* CLASS 4 TREATMENT B. Treatment in the Event that Class Member
votes to reject the Plan and/or opposes confirmation of the
Debtor's Plan: Class 4 Treatment B provides that Adverse Class 4
Members will be paid a total of 4% of their claims, without
interest, in the 48th month following the Effective Date subject to
further set-off as provided hereinafter.
* Treatment for Class Members that Do Not Cast a Ballot.
Treatment in the event that Class Member does not cast a ballot but
does not oppose confirmation of the Debtor's Plan, and Class 4
votes to accept confirmation of Debtor's Plan:
-- If no vote is cast by a Class 4 member and the Class 4
member does not oppose the confirmation of Debtor's Plan (e.g.,
objecting to the plan or campaigning for others to vote against the
plan) and Class 4 nevertheless votes to accept the confirmation of
Debtor's Plan without the vote of said Class 4 member, such Class 4
member will receive the same treatment as Class 4 Treatment A that
is provided to Consenting Class 4 Members. Class members should
carefully note that this treatment only applies if Class 4 accepts
the Chapter 11 Plan.
-- In the Event that Class Member does not cast a ballot and
Class 4 does not vote in favor of confirmation of Debtor's Plan: If
no vote is cast by a Class 4 member and Class 4 does not vote to
accept the confirmation of Debtor’s Plan, such Class 4 member
will receive the same treatment as Class 4 Treatment B that is
provided to Adverse Class 4 Members.
The funding of the Plan will be accomplished through "available
cash" on the Effective Date of the Plan, the injection of $50,000
in "added value" from the equity/interest holder, and "future
disposable income” obtained through the Debtor's business affairs
in operating an automotive repair business.
A full-text copy of the Disclosure Statement dated June 17, 2020,
is available at https://tinyurl.com/yda9df3y from PacerMonitor.com
at no charge.
Attorneys for Debtor:
Michael Jones, CA Bar No. 271574
M. Jones & Associates, PC
505 North Tustin Ave, Suite 105
Santa Ana, CA 92705
Telephone: (714) 795-2346
Facsimile: (888) 341-5213
E-mail: mike@MJonesOC.com
About Affordable Auto Repair
Affordable Auto Repair, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-18367) on Sept.
23, 2019. At the time of the filing, the Debtor had estimated
assets of less than $50,000 and liabilities of less than $500,000.
The case is assigned to Judge Mark S. Wallace. M. Jones and
Associates, PC, is the Debtor's counsel.
ALTHAUS FAMILY: Aug. 11 Hearing on Disclosure Statement
-------------------------------------------------------
Judge Mary Ann Whipple has ordered that the hearing to consider the
approval of the disclosure statement of Althaus Family Investors
Ltd. will be held at Courtroom No. 2, Room 103, United States
Courthouse, 1716 Spielbusch Avenue, Toledo, Ohio, on August 11,
2020, at 9:30 a.m.
August 3, 2020, is fixed as the last day for filing with the court
and serving written objections to the disclosure statement.
Counsel for the Debtor:
Eric R. Neuman
Diller & Rice
1105-1107 Adams
Toledo, OH 43604
Tel: (419) 724-9047
About Althaus Family Investors
Althaus Family Investors Ltd., filed a Chapter 11 bankruptcy
petition (Bankr. N.D. Ohio Case No. 19-32357) on July 26, 2019,
disclosing under $1 million in both assets and liabilities. The
Debtor is represented by Steven L. Diller, Esq. at Diller and Rice,
LLC.
ATIF INC: Creditor Trustee Hires Underwood as Special Counsel
-------------------------------------------------------------
Daniel Stermer, the Creditor Trustee of ATIF, Inc. Creditor Trust,
seeks authority from the U.S. Bankruptcy Court for the Middle
District of Florida to employ Underwood Murray P.A., as special
counsel to the Creditor Trustee.
Mr. Stermer requires Underwood to:
a. assist the Creditor Trustee with bankruptcy related matters
for which the Creditor Trustee's general counsel may have a
conflict;
b. assist the Creditor Trustee in the investigation of
potential avoidance actions;
c. analyze the claims filed in this case;
d. prosecute claim objections on behalf of the Creditor
Trustee as deemed necessary by the Creditor Trustee; and
e. assist with other matters that arise in Creditor Trustee's
administration of the estate as such matters arise and upon
the Creditor Trustee's request.
Underwood will be paid at the hourly rates of $275 to $525.
Underwood will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Scott Underwood, partner of Underwood Murray P.A., assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Underwood can be reached at:
Scott A. Underwood, Esq.
Megan W. Murray, Esq.
Adam M. Gilbert, Esq.
UNDERWOOD MURRAY, P.A.
100 N. Tampa St., Suite 2325
Tampa, FL 33602
Tel: (813) 540-8401
E-mail: sunderwood@underwoodmurray.com
mmurray@underwoodmurray.com
agilbert@underwoodmurray.com
About ATIF
ATIF, Inc., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Fla. Case No. 17-01712) on March 2, 2017. In the
petition signed by Gerard A. McHale, its chief executive officer,
the Debtor was estimated to have assets of less than $500,000 and
liabilities of $10 million to $50 million.
Michael C. Markham, Esq., at Johnson, Pope, Bokor, Ruppel & Burns
LLP, serves as the Debtor's legal counsel. The Debtor hired Buell
& Elligett, P.A., as its special counsel.
On April 13, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The committee retained
Messana, P.A., as its bankruptcy counsel, and Becker & Poliakoff,
P.A., as its special counsel.
On July 5, 2018, the bankruptcy court entered an order confirming
the second amended Chapter 11 plan and explanatory disclosure
statement filed by the creditors' committee for ATIF, Inc. The
plan establishes the ATIF Inc. Creditor Trust and appointed Daniel
Stermer as the trustee. Mr. Stermer hired Messana, P.A. as his
legal counsel.
BATTERS BOX: Unsecureds Will be Paid $350 Per Month for 36 Months
-----------------------------------------------------------------
Batter's Box Miami LLC has proposed a Chapter 11 plan.
Payments and distributions under the Plan will be funded by Yunel
Escobar and income from operation of business.
Class 3 General unsecured creditors totaling $12,602 are impaired.
The class will be paid in equal monthly installments 36 months
$350.05 month starting month 1.
Class 5 Equity Security Holders of the Debtor are impaired. Equity
Holders will keep memberships for new value paid in this case.
A full-text copy of the Disclosure Statement dated June 17, 2020,
is available at https://tinyurl.com/y8rd28as from PacerMonitor.com
at no charge.
About Batters Box Miami
Batters Box Miami, LLC, filed a Chapter 11 bankruptcy petition
(Bankr. S.D. Fla. Case No. 20-10638) on Jan. 17, 2020, disclosing
under $1 million in both assets and liabilities. Judge Laurel M.
Isicoff oversees the case. The Debtor tapped Richard Siegmeister,
PA., as its legal counsel, and Lillian Urbandt, an accountant based
in Miami.
BELLE INVESTMENTS: Aug. 11 Hearing on Disclosure Statement and Plan
-------------------------------------------------------------------
Judge Charles M. Walker has ordered that the hearing on
confirmation of the Plan and approval of the Disclosure Statement
will be held at 10:00 o'clock a.m. on Aug. 11, at the U.S.
Bankruptcy Court for the Middle District of Tennessee, Courtroom
Two, Second Floor, Customs House, 701 Broadway, Nashville,
Tennessee 37203.
July 18 is fixed as the last day for filing and serving written
objections to the Disclosure Statement.
Attorney for the Debtor:
Steven L. Lefkovitz, No. 5953
618 Church Street, Suite 410
Nashville, Tennessee 37219
Tel: (615) 256-83 00
Fax: (615) 255-4516
E-mail: slefkovitz@lefkovitz.com
About Belle Investments
Belle Investments, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 19-03205) on May 20,
2019. At the time of the filing, the Debtor disclosed assets of
between $100,001 and $500,000 and liabilities of the same range.
The case has been assigned to Judge Charles M. Walker. Lefkovitz &
Lefkovitz, PLLC, is the Debtor's legal counsel.
BERKELEY PROPERTIES: Case Summary & 2 Unsecured Creditors
---------------------------------------------------------
Debtor: Berkeley Properties, LLC
1333 Second Street
Berkeley, CA 94710
Business Description: Berkeley Properties is primarily engaged in
renting and leasing real estate properties.
Chapter 11 Petition Date: July 27, 2020
Court: United States Bankruptcy Court
Northern District of California
Case No.: 20-41235
Debtor's Counsel: Michael M. Lauter, Esq.
SHEPPARD MULLIN RICHTER & HAMPTON LLP
Four Embarcadero Center, 17th Floor
San Francisco, CA 94111
Tel: 415-774-2978
E-mail: mlauter@sheppardmullin.com
Debtor's
Real Estate
Broker: CUSHMAN & WAKEFIELD
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Matthew English, president.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/NOaSpQ
List of Debtor's Two Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Department of Toxic Uncashed Check $1,185
Substances Control
PO Box 806
Sacramento, CA 95812
2. United States Trustee Uncashed Check $1,625
PO Box 6200-19
Portland, OR 97228
BOULDER CAB: Hires Winner Law as Special Counsel
------------------------------------------------
Boulder Cab Inc. seeks authority from the U.S. Bankruptcy Court for
the District of Nevada to employ Winner Law Ltd., as special
corporate counsel to the Debtor.
Winner Law will assist the Debtor as general corporate counsel in
the Chapter 11 Bankruptcy Proceedings.
Winner Law will be paid at the hourly rate of $295, and will also
be reimbursed for reasonable out-of-pocket expenses incurred.
To the best of the Debtor's knowledge the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estates.
About Boulder Cab
Boulder Cab, Inc. -- http://www.deluxetaxicabservice.com/-- is a
taxi company that offers airport transportation throughout the Las
Vegas and Henderson areas.
Boulder Cab sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Nev. Case No. 20-13069) on June 25, 2020. The
petition was signed by Boulder Cab President Richard Flaven. At
the time of the filing, the Debtor disclosed assets of $500,000 to
$1 million and liabilities of $1 million to $10 million.
The Debtor has tapped Carlyon Cica Chtd. as bankruptcy counsel and
Kamer Zucker Abbott as special litigation counsel.
BROOKFIELD RESIDENTIAL: S&P Lowers ICR to 'B'; Outlook Negative
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Brookfield
Residential Properties Inc. (BRPI) to 'B' from 'B+' to reflect its
higher leverage. At the same time, S&P lowered its issue-level
rating on the company's senior unsecured notes to 'B+' from 'BB-'.
S&P's '2' recovery rating remains unchanged.
BRPI's profitability will decline further in 2020 due to COVID-19.
Sales of long-lived land in Calgary and high-priced coastal homes
in California, among the company's most profitable operations,
began to recede before this year. The coronavirus pandemic that
began in early spring has also adversely affected Alberta's
oil-based economy. Meanwhile, management's planned shift away from
from high-priced coastal homes in California is causing BRPI's
lower-margin home and community sales elsewhere in the state to
account for a greater proportion of its overall sales mix.
Therefore, S&P expects the company's total EBITDA to drop to about
$135 million in 2020, which is just over half of the level it
reported in 2018.
BRPI's liquidity is now under pressure because its bank facility is
set to mature in early 2021. S&P expects the company to fully
repay its outstanding revolver balance by year-end 2020 ($195
million outstanding as of March 2020), which will absorb much of
its cash on hand and the bulk of its 2020 discretionary cash flow.
S&P anticipates BRPI's profitability during the second half of the
year will lead to an improvement in its seasonal cash flow and help
make this fall an opportune time for it to extend its revolving
credit facility.
Modest but steady expected increases in the company's debt starting
in 2021 largely due to investment outside of its core homebuilding
and land development activities. BRPI's continuing investments in
two existing mixed-use development projects will cause its debt
levels to increase in 2021. Whether the buildings are ultimately
leased or sold outright, S&P expects them to provide only modest
contributions to the company's performance before 2022.
"The negative outlook on BRPI reflects our belief that its
liquidity may become constrained if management is unable to extend
the $675 million revolving credit facility before its March 2021
maturity. The outlook also incorporates our expectation that the
ongoing recovery in its orders for homes will translate into higher
profitability entering 2021 and cause its debt to EBITDA to recover
toward 9x in the coming year," S&P said.
The company's higher forecast profits will also likely lift its
S&P-adjusted EBITDA to interest coverage levels to about 2x as of
the beginning of 2021.
S&P could downgrade BRPI to 'B-' if:
-- The company is unable to negotiate an extension for its
revolver, increasing the possibility that its liquidity will
diminish further; and
-- Its parent and 100% owner Brookfield Asset Management – to
whom S&P considers BRPI to be moderately strategic - decides
against contributing cash to support its operations.
S&P could revise its outlook on BRPI to stable in the next 12
months if it renegotiates or extends its bank credit facility
before it becomes due in March 2021.
CALPINE CORP: S&P Rates $1.5BB Senior Unsecured Notes 'B'
---------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '5'
recovery rating to Houston-based wholesale power generation company
Calpine Corp.'s $650M of senior unsecured notes due 2029 and $850M
senior unsecured notes due 2031. The company will use the proceeds
from these notes, together with about $230 million of the proceeds
from an earlier $900 million issuance at the Geysers, to retire
about $1.7 billion of existing senior debt. Calpine intends to
reduce its interest costs through this refinancing.
S&P considers the refinancing to be leverage neutral because it
adds back the debt from the Geyser transaction to Calpine's balance
sheet. The company used almost $366 million of the proceeds from
the Geysers transaction to pay down other project debt and swap
breakage fees (Steamboat) earlier in 2020. S&P expects Calpine to
use a further $250 million of the proceeds from the Geyser
transaction to pay down other corporate debt through 2020.
S&P's ratings on Calpine reflect its fair assessment of the
company's business risk profile and its highly leveraged assessment
of the company's financial risk profile, which lead the rating
agency to assign a 'b' anchor rating. S&P then applies a positive
one-notch comparable ratings analysis (CRA) adjustment to its
anchor to arrive at its 'B+' issuer credit rating on the company.
The CRA adjustment reflects Calpine's ability to generate
substantial free cash flow and its high cash flow conversion rate.
"Our positive outlook on the company reflects our view that it will
continue to expand its retail power business and wholesale core
markets while undertaking modest new builds and expansions," S&P
said.
S&P expects Calpine's performance in the Electric Reliability
Council of Texas (ERCOT) to be strong relative to the rating
agency's assumptions in 2020 and note that it has reported some
upside in its resource adequacy payments in California.
"In our view, the company's financial performance may improve as it
limits its downside risk with a high level of hedging through 2022.
The positive outlook incorporates Calpine's planned corporate-level
debt reduction and our expectation that its adjusted debt to EBITDA
will improve to less than 5.00x and moderate to about 4.75x through
2021," S&P said.
CONGOLEUM CORPORATION: Taps B. Riley FBR as Investment Banker
-------------------------------------------------------------
Congoleum Corporation seeks authority from the U.S. Bankruptcy
Court for the District of New Jersey to employ Cole Schotz P.C., as
investment banker to the Debtor.
Congoleum Corporation requires Cole Schotz to:
a. advise the Debtor of its rights, powers, and duties as
debtor in possession in continuing to operate and manage
its assets and business; prepare such administrative and
procedural applications and motions as may be required for
the sound conduct of the case, including, but not limited
to, the Debtor's schedules and statements of financial
affairs;
b. prepare on the Debtor's behalf all necessary and
appropriate applications, motions, pleadings, orders,
notices, petitions, schedules, and other documents to be
filed in the Debtor's Chapter 11 case;
c. advise the Debtor concerning, and prepare responses to,
applications, motions, pleadings, notices and other
pleadings or documents which may be filed in its Chapter 11
case;
d. counsel the Debtor in its efforts to sell all or
substantially all its assets pursuant to the Bankruptcy
Code, and in connection with the formulation, negotiation
and promulgation of a Chapter 11 plan;
e. review the nature and validity of agreements relating to
the Debtor's business operations and advise the Debtor in
connection therewith;
f. advise the Debtor concerning the actions it might take to
collect and recover property for the benefit of its estate;
g. review the nature and validity of liens asserted against
the Debtor and advise as to the enforceability thereof;
h. review and object to claims; and
i. perform all other legal services for and on behalf of the
Debtor which may be necessary or appropriate in the
administration of its Chapter 11 case and fulfillment of
its duties as debtor in possession.
Cole Schotz will be paid at these hourly rates:
Members $400 to $990
Associates $275 to $500
Paralegals $210 to $315
During the 90 days prior to the Petition Date, the Debtor paid Cole
Schotz $401,759.97. As of the petition date, the Firm was holding a
retainer of $223,240.03.
Cole Schotz will also be reimbursed for reasonable out-of-pocket
expenses incurred.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the
following is provided in response to the request for additional
information:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing
arrangements for this engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic
location of the bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and
material financial terms for the prepetition
engagement, including any adjustments during the 12
months prepetition. If your billing rates and
material financial terms have changed postpetition,
explain the difference and the reasons for the
difference.
Response: Cole Schotz represented the Debtor pre-petition.
During that time, Cole Schotz did not raise its
billing rates. The material financial terms for the
pre-petition engagement remain the same.
Question: Has your client approved your prospective budget
and staffing plan, and, if so for what budget
period?
Response: Cole Schotz is currently formulating a budget and
staffing plan which it will review with the Debtor.
Warren A. Usatine, partner of Cole Schotz P.C., assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estates.
Cole Schotz can be reached at:
Warren A. Usatine, Esq.
COLE SCHOTZ P.C.
25 Main Street
Hackensack, NJ 07602-0800
Tel: (201) 489-3000
Fax: (201) 489-1536
About Congoleum Corporation
Congoleum Corporation -- https://www.congoleum.com/ -- manufactures
and sells vinyl sheet and tile products for both residential and
commercial markets. Its products are used in remodeling,
manufactured housing, new construction, commercial applications and
recreational vehicles.
Congoleum Corporation sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.J. Case No. 20-18488) on July 13, 2020.
The petition was signed by Christopher O'Connor, chief executive
officer/president. The Hon. Michael B. Kaplan oversees the case.
The Debtor was estimated to have $50 million to $100 million in
assets and $100 million to $500 million in liabilities.
Warren A. Usatine, Esq., Felice R. Yudkin, Esq., and Rebecca W.
Hollander, Esq. of Cole Schotz P.C. serve as counsel to the Debtor.
B. Riley FBR, Inc. serves as financial advisor and investment
banker to the Debtor; Phoenix Management Services, LLC as financial
advisor; and Prime Clerk LLC as claims and noticing agent.
CONGOLEUM CORPORATION: Wollmuth Represents Simplon, 3 Others
------------------------------------------------------------
In the Chapter 11 cases of Congoleum Corporation, the law firm of
Wollmuth Maher & Deutsch LLP submitted a verified statement under
Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose
that it is representing Simplon International Ltd., Frontier Cap
Partners, LLC, Paul Frontier Holdings, and LP Frontier C IV, LLC.
As of July 20, 2020, the following entities and their disclosable
economic interests are:
Simplon International Ltd.
45 Rockefeller Plaza, Suite 2000
New York, NY 10111
* $18,246,000 principal amount of 9% Notes due December 31, 2020,
plus accrued interest
* $2,609,000 principal amount of 9% Notes due December 31, 2017,
plus accrued interest
* Relation to Debtor: Noteholder
Frontier Cap Partners, LLC
555 Madison Avenue, Suite 11A
New York, NY 10022
* $275,000 principal amount of 9% Notes due December 31, 2020,
plus accrued interest
* Relation to Debtor: Noteholder
Paul Frontier Holdings, LP
555 Madison Avenue, Suite 11A
New York, NY 10022
* $13,809,672 principal amount of 9% Notes due December 31, 2020,
plus accrued interest
* Relation to Debtor: Noteholder
Frontier C IV, LLC
555 Madison Avenue, Suite 11A
New York, NY 10022
* $5,342,866 principal amount of 9% Notes due December 31, 2020,
plus accrued interest
* Relation to Debtor: Noteholder
Congoleum Acquisition, LLC
c/o Wollmuth Maher & Deutsch LLP
Attn: James N. Lawlor
500 Fifth Avenue
New York, NY 10110
* 100% of equity interest owned by Noteholders listed above
* Relation to Debtor: Stalking Horse Bidder
Each of the Entities may hold claims against and/or interests in
the Debtor arising out of applicable agreements, law, or equity
pursuant to their relationship with the Debtor.
The following are the facts and circumstances in connection with
WMD's employment in the Case. WMD represented each of the Entities
prior to the Case. Each of the Entities separately requested that
WMD represent them in connection with the Case.
Upon information and belief, WMD does not possess any claims
against or interests in the Debtor or any affiliates of the
Debtor.
WMD reserves the right to revise, amend, and/or supplement this
Verified Statement as necessary.
Counsel for Simplon International Ltd., Frontier Cap Partners, LLC,
Paul Frontier Holdings, LP, and Frontier C IV, LLC can be reached
at:
WOLLMUTH MAHER & DEUTSCH LLP
James N. Lawlor, Esq.
500 Fifth Avenue, 12th Floor
New York, NY 10110
- and -
51 JFK Parkway First Floor West
Short Hills, NJ 07078
Tel: (212) 382-3300
Fax: (973) 741-2398
Email: jlawlor@wmd-law.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/u7MVCC and https://is.gd/oEMRCT
About Congoleum Corporation
Congoleum Corporation -- https://www.congoleum.com/ -- manufactures
and sells vinyl sheet and tile products for both residential and
commercial markets. Its products are used in remodeling,
manufactured housing, new construction, commercial applications and
recreational vehicles.
Congoleum Corporation sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.N.J. Case No. 20-18488) on July 13, 2020.
The petition was signed by Christopher O'Connor, chief executive
officer/president.
The Debtor was estimated to have $50 million to $100 million in
assets and $100 million to $500 million in liabilities.
The Hon. Michael B. Kaplan presides over the case.
Warren A. Usatine, Esq., Felice R. Yudkin, Esq., and Rebecca W.
Hollander, Esq. of Cole Schotz P.C. serve as counsel to the Debtor.
B. Riley FBR, Inc. serves as financial advisor and investment
banker to the Debtor; Phoenix Management Services, LLC as financial
advisor; and Prime Clerk LLC as claims and noticing agent.
ECO-STIM ENERGY: Debtor Will Liquidate its Asset
------------------------------------------------
Eco-Stim Energy Solutions, Inc. and EcoStim, Inc., filed a First
Amended Disclosure Statement for its Chapter 11 Plan.
The Plan provides for the substantive consolidation of the Debtors
and the vesting of all assets of the Debtors in a liquidating trust
which will be charged with preservation and distribution to
creditors of the proceeds of said assets.
On the Effective Date, the Liquidating Trust will be established,
pursuant to the terms of a liquidation trust agreement
All Allowed Class 1 Secured Claims, to the extent any exist, will
be paid in full and in Cash on the Effective Date.
All Allowed Class 2 General Unsecured Claims will receive: (a) on
the Distribution Date, such holder's Pro Rata share (among holders
of Allowed Class 2 Claims) of the Distribution; (b) in the event of
the occurrence of a Liquidating Event, such holder's Pro Rata share
(among holders of Allowed Class 2 Claims) of Net Cash Proceeds from
such Liquidating Event; and (c) such holder's Pro Rata share (among
holders of Allowed Class 2 Claims) of Distributions from all other
Liquidating Trust Assets; provided, however, that no Distributions
to Allowed General Unsecured Claims shall be made prior to payment
in full of all Allowed Secured, Priority, Administrative Claims,
and expenses of the Liquidating Trust.
All Class 3 Equity Interests in Solutions will be deemed canceled
upon the Effective Date. Class 3 Equity Interests in Solutions will
accordingly be deemed to automatically reject the Plan and shall
not vote on acceptance or rejection of the Plan.
All Class 4 Equity Interests in Eco Inc. will be deemed canceled
upon the Effective Date. Class 4 Equity Interests in Eco Inc. will
accordingly be deemed to automatically reject the Plan and shall
not vote on acceptance or rejection of the Plan.
A full-text copy of the First Amended Disclosure Statement dated
June 15, 2020, is available at https://tinyurl.com/ydb4v5fh from
PacerMonitor.com at no charge.
Proposed counsel for the Debtor:
Brian A. Kilmer
Meritt Crosby
Stephen Risley
KILMER CROSBY & QUADROS PLLC
712 Main Street, Ste. 1100
Houston, Texas 77002
Telephone: 713-300-9662
Fax: 214-731-3117
E-mail: bkilmer@kcq-lawfirm.com
E-mail: mcrosby@kcq-lawfirm.com
E-mail: srisley@kcq-lawfirm.com
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 Energy Solutions, Inc. and EcoStim, Inc., sought Chapter
11 protection (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.
FINGERLAKES HOSPITALITY: Hires Orville & McDonald as Attorney
-------------------------------------------------------------
Fingerlakes Hospitality Group, LLC, seeks authority from the U.S.
Bankruptcy Court for the Northern District of New York to employ
Orville & McDonald Law, P.C., as attorney to the Debtor.
Fingerlakes Hospitality requires Orville & McDonald to:
a. give the Debtor legal advice with respect to their powers
and duties as Debtor-in Possession in the continued
operation of their business and in the management of their
property;
b. take necessary action to avoid liens against Debtor's
property, remove restraints against Debtor's property and
such other actions to remove any encumbrances or liens
which are avoidable, which were placed against the property
of the Debtor prior to the filing of the Petition
instituting this proceeding and at a time when the Debtor
was insolvent;
c. take necessary action to enjoin and stay until final decree
herein any attempts by secured creditors to enforce liens
upon property of the Debtor's in which property Debtor has
substantial equity;
d. represent your Applicant, as Debtor- in-Possession, in any
proceedings which may be instituted in this Court by
creditors or other parties during the course of this
proceeding;
e. prepare on behalf of your Applicants, as Debtor-in-
Possession, necessary petitions, answers, orders, reports
and other legal papers; and
f. perform all other legal services for Debtor as Debtor- in-
Possession or to employ attorneys for such services.
Orville & McDonald will be paid at these hourly rates:
Attorneys $250 to $350
Staffs $125
The Debtor paid Orville & McDonald a retainer of $5,000. The
amount of $3,283 of the retainer was used for prepetition legal
services, and $1,717 as filing fee.
Orville & McDonald will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Peter Orville, a partner of Orville & McDonald Law, P.C., assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Orville & McDonald can be reached at:
Peter Orville, Esq.
ORVILLE & MCDONALD LAW, P.C.
30 Riverside Drive
Binghamton, NY 13905
Tel: (607) 770-1007
About Fingerlakes Hospitality Group
Fingerlakes Hospitality Group, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. N.D.N.Y. Case No. 20-30771) on July 15, 2020,
disclosing under $1 million in both assets and liabilities. The
Debtor is represented by ORVILLE & MCDONALD LAW, P.C.
FRASER'S BOILER: Hires Pond North as Mediation Counsel
------------------------------------------------------
Fraser's Boiler Service, Inc., seeks authority from the U.S.
Bankruptcy Court for the Western District of Washington to employ
Pond North, LLP, as mediation counsel to the Debtor.
Fraser's Boiler requires Pond North provide legal services related
to asbestos litigation, including assessment and valuation of
pending cases against the Debtor.
Pond North will be paid at these hourly rates:
Partners $220
Associates $190
Paralegal $100
Pond North will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Frank Pond, a partner of Pond North, LLP, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtor and its estates.
Pond North can be reached at:
Frank Pond, Esq.
POND NORTH, LLP
355 S Grand Ave, Suite 4300
Los Angeles, CA 90071
Tel: (213) 617-6170
About Fraser's Boiler Service
Headquartered in Olympia, Wash., Fraser's Boiler Service, Inc. is a
boiler, tank and shipping container manufacturer.
Fraser's Boiler Service sought chapter 11 protection (Bankr. W.D.
Wash. Case No. 18-41245) on April 9, 2018, listing estimated assets
at $10 million to $50 million and estimated liabilities at $50
million to $100 million. The petition was signed by David J.
Gordon, president.
Judge Brian D. Lynch oversees the case.
The Debtor tapped Darren R Krattli, Esq., of Eisenhower Carlson
PLLC, as its legal counsel.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on May 18, 2018. The committee is represented by Mark D.
Waldron, Esq.
GLOBAL HEALTHCARE: Unit Inks $800K Deal to Buy Nursing Facility
---------------------------------------------------------------
Effective July 23, 2020, Global Fairland Property, LLC, a newly
formed wholly subsidiary of Global Healthcare REIT, Inc., signed a
definitive Asset Purchase Agreement pursuant to which Fairland
Property intends to purchase a skilled nursing facility located at
12 East Conner, Fairland, Oklahoma 74343 consisting of 29 licensed
beds and commonly known as "Family Care Center of Fairland". The
purchase price of the Facility will be $796,500. The purchase and
sale of the Facility is subject to numerous conditions, including
satisfactory due diligence, financing and other conditions
customary in transactions of this nature.
"We anticipate operating this facility through a wholly owned
subsidiary. We believe this purchase represents an attractive
return on our capital which is only enhanced by its proximity to
our Quapaw facility," stated Zvi Rhine, Global's president and
chief financial officer. "This acquisition fits nicely into our
geographic footprint and expands our presence in a state with
favorable tailwinds."
About Global Healthcare
Global Healthcare REIT, Inc., acquires, develops, leases, manages
and disposes of healthcare real estate, and provides financing to
healthcare providers. The Company's portfolio will be comprised of
investments in the following three healthcare segments: (i) senior
housing, (ii) post-acute/skilled nursing and (iii) bonds securing
senior housing communities.
Global Healthcare reported a net loss attributable to common
stockholders of $891,614 for the year ended Dec. 31, 2019, compared
to a net loss attributable to common stockholders of $2.02 million
for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company
had $39.88 million in total assets, $39.51 million in total
liabilities, and $366,650 in total equity.
MaloneBailey, LLP, in Houston, Texas, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
July 10, 2020, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going
concern.
GREEN APPLE: Fails to Pay Proper Wage, Arellano Alleges
-------------------------------------------------------
YENCY ARELLANO, individually and on behalf of all others similarly
situated, Plaintifff v. GREEN APPLE 37 INC. d/b/a GREEN APPLE;
GREEN APPLE GOURMET INC. d/b/a GREEN APPLE; and ERIC YUN KIM,
Defendants, 1:20-cv-05293 (S.D.N.Y., July 9, 2020) seeks to recover
from the Defendants unpaid wages and overtime compensation,
interest, liquidated damages, attorneys' fees, and costs under the
Fair Labor Standards Act.
The Plaintiff Arellano was employed by the Defendants as staff.
Green Apple 37 Inc. d/b/a Green Apple is engaged in the restaurant
business. [BN]
The Plaintiff is represented by:
C.K. Lee, Esq.
Anne Seelig, Esq.
LEE LITIGATION GROUP, PLLC
148 West 24th Street, 8th Floor
New York, NY 10011
Telephone: (212) 465-1180
GT POLARIS: Moody's Assigns B3 CFR, Outlook Stable
--------------------------------------------------
Moody's Investors Service assigned new ratings to GT Polaris, Inc.
with a corporate family rating of B3 and a probability of default
rating of B3-PD. Concurrently, Moody's assigned a B2 rating to the
issuer's proposed senior secured first lien credit facility,
comprised of a $700 million term loan and an undrawn $80 million
revolver. The proceeds from this debt issuance as well as GT
Polaris's $280 million second lien term loan (unrated) will be used
to partially fund the consolidation of Orion Advisor Solutions and
Brinker Capital by Genstar Capital and TA Associates to form the
new GT Polaris entity. Upon completion of this transaction, Moody's
expects the debt of predecessor entity NorthStar Financial Services
Group, LLC to be repaid and all existing ratings on NorthStar to be
withdrawn. The ratings outlook is stable.
Assignments:
Issuer: GT Polaris, Inc.
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Gtd Senior Secured 1st Lien Term Loan B, Assigned B2 (LGD3)
Gtd Senior Secured 1st Lien Revolving Credit Facility, Assigned B2
(LGD3)
Outlook Actions:
Issuer: GT Polaris, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
GT Polaris' B3 CFR reflects the company's elevated pro forma debt
leverage of over 9x (Moody's adjusted) as of March 31, 2020,
integration risk related to the consolidation transaction, small
scale relative to larger competitors within the financial services
vertical market, industry concentration risk, and exposure to
capital markets volatility. Additionally, GT Polaris' credit
quality is negatively impacted by corporate governance concerns
given the combined entity's concentrated ownership by TA and
Genstar, particularly with respect to the potential for aggressive
financial strategies such as incremental debt financed acquisitions
and shareholder distributions that could constrain deleveraging
efforts.
The rapid spread of the coronavirus outbreak, deteriorating global
economic outlook, low oil prices, and high asset price volatility
have created an unprecedented credit shock across a range of
sectors and regions. Moody's regards the coronavirus outbreak as a
social risk under its ESG framework, given the substantial credit
implications of public health and safety. The impact on GT Polaris'
credit profile of the breadth and severity of this shock,
particularly with respect to weak overall technology spending
trends from the company's SMB customer base, negatively impact GT
Polaris' near term operating prospects and weigh on its credit
quality.
The risks associated with GT Polaris' credit profile are partially
offset by the company's highly recurring revenue driven business
model, secular demand for the company's Turnkey-Asset Management
Program services, strong profitability metrics, and Moody's
expectations for the company to sustain adequate liquidity in the
coming year.
The B2 ratings for GT Polaris' proposed first lien bank debt
reflect the borrower's B3-PD PDR and a loss given default
assessment of LGD3. The B2 first lien ratings are one notch above
the CFR and take into account the first lien bank debt's priority
in the collateral and senior ranking in the capital structure
relative to the company's second lien debt due 2028 (unrated).
Despite a fairly modest pro forma cash balance of approximately $10
million following the completion of the proposed financing, GT
Polaris' adequate liquidity is supported by Moody's expectation of
free cash flow generation approaching 3% of debt over the next 12
months. The company's liquidity is also bolstered by an undrawn $80
million revolving credit facility. While the term loans are not
subject to financial covenants, the revolving credit facility has a
springing covenant based on a maximum net leverage ratio which the
company should be comfortably in compliance with over the next
12-18 months.
The stable outlook reflects Moody's expectation that GT Polaris
will generate mid-single organic revenue growth over the next 12 to
18 months. Concurrently, the realization of anticipated cost
synergies, while subject to a degree of execution risk, should
drive healthy margin expansion and free cash flow generation as
well as fuel a contraction in debt leverage towards the mid 7x
level by the end of 2021.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded if GT Polaris realizes consistent
revenue and EBITDA growth while adhering to a conservative
financial policy such that debt to EBITDA (Moody's adjusted) is
expected to approach 6.0x and annual free cash flow is maintained
at approximately 5%/debt.
The rating could be downgraded if GT Polaris were to experience a
weakening competitive position, sustained free cash flow deficits,
or the company maintains aggressive financial policies that prevent
meaningful deleveraging.
GT Polaris, which will be formed by the consolidation Orion and
Brinker and owned principally by TA and Genstar, provides
end-to-end technology solutions and other services to wealth/asset
managers in the U.S. market. Moody's expects the company to
generate pro forma annual revenue of approximately $250 million in
2020.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
GT POLARIS: S&P Assigns 'B-' Issuer Credit Rating; Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned a 'B-' issuer credit rating to GT
Polaris Inc. S&P also assigned its 'B' issue-level rating and '2'
recovery rating to its first-lien senior secured credit facilities.
The second-lien term loan was privately placed and will not be
rated at this time.
S&P expects adjusted leverage to remain high at more than 7x over
the next two years, but good free operating cash (FOCF) generation
in 2021 supports Orion's liquidity and financial risk assessment.
Under its base case, S&P-calculated adjusted leverage is forecasted
to decline to the mid-7x area by the end of 2021, as the company
realizes the benefits of improved scale and significant synergies
over the next 12 months. Although costs to achieve these synergies
will limit profit margins and cash flows, S&P expects 100-150 basis
points (bps) of margin expansion over the next 12 months as onetime
costs conclude. The majority of the acquisition synergies are
coming from sales and marketing alignment, as well as back office
consolidations. Additionally, S&P expects cross-platform
efficiencies such as Brinker utilizing Orion's marketing, lead
generation, and technology offerings for its high net worth
investor solutions to improve profit margins. S&P forecasts
consolidated EBITDA margin expansion of greater than 1,000 bps
versus the Orion stand-alone business, as a combined company
benefits from Brinker's high-margin TAMP revenue and acquisition
synergies. S&P believes the company will generate good free
operating cash flow in the mid-single digits as a percentage of
debt in 2021, as a result of its modest capital expenditures of
about $10 million-$15 million and modest working capital needs.
The rating agency expects strong growth from the Orion Advisor
Technologies (OAT) segment, driven by favorable industry tailwinds.
OAT is the faster growing segment of the business, and focuses on
cloud-based software as a service (SaaS) portfolio accounting,
trading, and management solutions. S&P expects high-teens growth
rates to continue for the technology platform, driven by an
increasing number of registered investment advisors using the core
technology platform and steady fees charged per account. The market
has seen rapid growth from the increase in registered investment
advisors (RIAs), as consumers prefer fee-based advice as opposed to
paying large up front commissions and advisors benefit from the
recurring revenue model. S&P expects the trend of consumers
choosing independent RIAs to manage their assets will continue, as
technology has made it increasingly more profitable to operate
independent of a wirehouse, while independent broker-dealers (IBDs)
and wirehouses have shifted to outsourcing capabilities as well.
Over time, S&P expects the revenue mix shift for the company to
favor the technology segment due to the expected high growth and
scalable platform.
S&P expects earnings volatility resulting from the increased
exposure to fees from assets under management. The revenue mix
shift toward more TAMP assets increases the exposure to equity and
capital markets, with Orion deriving its TAMP revenue from fees
charged on assets under management (AUM). The TAMP portion of the
combined business makes up roughly half of pro forma revenue, and
has a beta of 0.55 versus the S&P 500 index. While there is the
potential for pricing pressure on fees charged on TAMP assets due
to consolidation in the financial services industry, S&P expects
limited impact over the next 12-18 months. The rating agency
forecasts low single-digit revenue growth from the TAMP business
over the next 12-24 months, driven primarily by high
client-retention rates and steady levels of AUM. S&P believes there
is the potential for additional mergers and acquisitions (M&A) in
the TAMP segment given the acquisition of FTJ FundChoice in 2018
and now combination with Brinker, but the rating agency has not
included any acquisitions in its forecast.
The combination of Orion and Brinker improves the company's
competitive position; however, S&P expects competition to remain
intense. The merger creates a top five TAMP with $41 billion in
AUM. Additionally, Brinker gives Orion access to more IBDs, with a
strong presence in the insurance end market. The transaction
improved scale, but the company remains modest with pro forma
revenue of $254 million as of April 30, 2020. S&P views the
technology outsourcing market for wealth managers as being a small
but growing market, with fierce competition coming from larger
players such as Envestnet's Tamarac, SS&C's Black Diamond, and
large financial custodians. S&P believes the total addressable
market for OAT to be roughly $600 million. The TAMP business within
Orion Portfolio Solutions (OPS) also faces intense competition from
banks, as well as other TAMPs such as AssetMark Financial Holdings,
and SEI Investments Company. Partially offsetting these factors are
the company's high recurring revenue base and positive industry
dynamics for RIAs. Additionally, increased regulation underpins
outsourced compliance services.
The stable outlook reflects S&P's expectation for a successful
integration of the two businesses, the realization of significant
cost synergies, high single-digit organic revenue growth, and
margin expansion over the next 12 months driven by continued strong
performance from the Orion Advisor Technology segment.
"We could raise the rating in the next 12 months if EBITDA growth
or debt repayment reduces leverage below 7.0x for a sustained
period, and FOCF to debt improves to the mid-single-digit
percentage area or above. This could occur because of the
realization of synergies from the recent acquisition, growth in
assets under administration (AUA) and AUM, and increased revenue
per account," S&P said.
"We could lower our rating over the next 12 months if Orion has
integration issues following the combination with Brinker, or
capital markets volatility leads to sharp declines in AUM, causing
the company to sustain negative free operating cash flow (FOCF). We
could also lower our rating if we believe the capital structure is
unsustainable, or the company is forced to significantly draw on
its revolving credit facility," the rating agency said.
HEATING AND PLUMBING: Unsecureds to be Paid From Gross Revenue
--------------------------------------------------------------
Heating and Plumbing Engineers, Inc., submitted a Third Amended
Plan of Reorganization.
Pursuant to the Plan, the Debtor shall restructure its debts and
obligations and continue to operate in the ordinary course of
business.
The Class 4(a) Secured Claim of Vectra Bank Colorado, as a division
of Zions Bancorporation, N.A., in the amount of $6,483,000, is
impaired. The secured claim will be paid on a monthly basis based
upon a 10-year amortization, however the secured obligation will
mature and a balloon payment shall be due on the five-year
anniversary of the Effective Date of the Plan. In addition to the
monthly payments, the Debtor shall pay $104,000 within 30 days of
the Effective Date of the Plan representing the retention amounts
from DHA received on a postpetition basis.
The Class 5 Secured Claim of the Funds in the amount of $833,937 is
impaired. The Class 5 claim will accrue interest commencing on the
Effective Date of the Plan at a rate equal to 4% per annum. The
Class 5 claim shall be paid on a monthly basis based upon a 10-year
amortization, however the total amount due to Class 5 will mature
and a balloon payment shall be due on the five-year anniversary on
the Effective Date of the Plan.
The Class 6 Secured Claim of LeasePlan USA, Inc., will be treated
under this Plan in accordance with the Global Settlement
Agreement.
With respect to the Class 7 Secured Claim of Enterprise FM Trust.
On the Effective Date of the Plan, the Master Equity Lease
Agreement ("Enterprise Lease") by and between the Debtor and
Enterprise will be deemed assumed pursuant to 11 U.S.C. Sec. 365,
and the Debtor will be authorized to purchase any vehicles subject
to the Enterprise Lease in accordance with the terms of the
Enterprise Lease, including applying any accrued credits with
Enterprise against the purchase price.
Class 8 consists of those unsecured creditors of the Debtor who
hold Allowed Claims that were either scheduled by the Debtor as
undisputed, or subject to timely filed proofs of claim to which the
Debtor does not successfully object. Class 8 will receive a
pro-rata distribution equal to a variable percentage of the
Debtor's Gross Revenue generated over a five-year period commencing
on the earlier of: a) the first day of the first quarter after all
Professional Fee Claims are paid in full; or b) the first day of
the fourth quarter following the Effective Date of the Plan
("Repayment Term").
The Debtor will, as Reorganized Debtor, continue to exist after the
Effective Date of the Plan with the same corporate powers as
existed prior to Plan confirmation pursuant to the laws of the
jurisdiction of organization of the Debtor entity.
A full-text copy of the Third Amended Plan of Reorganization dated
June 15, 2020, is available at https://tinyurl.com/ybz5gk3n from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Lee M. Kutner
Keri L. Riley
KUTNER BRINEN, P.C.
1660 Lincoln St., Suite 1850
Denver, CO 80264
Telephone: 303-832-2400
Facsimile: 303-832-1510
Email: lmk@kutnerlaw.com
About Heating & Plumbing
Founded in 1947, Heating & Plumbing Engineers, Inc., a mechanical
contractor, provides HVAC sheet metal, plumbing, and piping systems
services in Colorado.
Heating & Plumbing Engineers filed a voluntary petition pursuant to
Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No.
19-16183) on July 19, 2019. In the petition signed by CEO William
T. Eustace, the Debtor disclosed $13,845,361 in assets and
$14,934,602 in liabilities. Lee M. Kutner, Esq., at Kutner Brinen,
P.C., is the Debtor's counsel.
IFS SECURITIES: Says Settlements to Bring in $1.12 Million
----------------------------------------------------------
IFS Securities, Inc., filed in June an amended iteration of its
Combined Disclosure Statement and Plan of Liquidation.
The Debtor has sought Court authorization for the return of certain
transfers made to Group, IFS Advisory, Inc., and Mckenzie. The
Debtor filed a motion to approve compromise and settlement of
claims against IFS Group, Inc., IFS Advisory, LLC, and Alexys
Mckenzie. If approved, these settlements will bring cash of
$1,120,715 into the bankruptcy estate, subject to the terms of the
proposed settlement agreements.
On June 8, 2020, two alleged creditors of the Debtor filed the
Joint Motion by Creditors R. Bryan Edwards and Craig Walker for
Appointment of a Trustee Pursuant to 11 U.S.C. Sec. 1104(A)(1) and
1104(A)(2). The Debtor believes this motion is without merit, and
intends to contest the requested relief. Walker does not hold a
valid claim against the Debtor, and instead owes the Debtor money.
Walker was asked to resign from the Debtor due to his repeated
misconduct. Edwards claims to be a creditor of the Debtor for a
commission relating to the sale of an annuity, but did not follow
IFS’s internal protocol for obtaining client authorization.
At a hearing on June 11, 2020, over the objection of Edwards and
Walker, the Court approved this Disclosure Statement on an interim
basis. On that same date, the Court approved, over the objection
of Edwards and Walker, the retention of the Debtor's counsel,
Greenberg Traurig, LLP, its financial advisor GlassRatner Advisory
& Capital, LLC and Marshall Glade as its Chief Restructuring
Officer.
The Debtor is seeking to retain Richard Brodsky, a seasoned
securities litigator, to prosecute the claims against INTL FCStone
Financial, Inc. and the claim on the fidelity bond relating to
Wakefield's conduct. The Debtor believes that these claims will
result in material recoveries for the estate. Further, the Debtor
intends to prosecute claims against Wakefield for his acts which
led to the Debtor's insolvency.
No provision of the Plan, or any order confirming the Plan (i)
releases the Debtor or any non-debtor person or entity from any
Claim or cause of action of the U.S. Securities and Exchange
Commission ("SEC"); or, (ii) enjoins, limits, impairs or delays the
SEC from commencing or continuing any Claims, causes of action,
proceedings or investigations against the Debtor or any non-debtor
person or entity in any forum, provided, however, that collection
on any monetary claim by the SEC against the Debtor will be subject
to the provisions of the Plan.
A full-text copy of the Combined Disclosure Statement dated June
13, 2020, is available at https://tinyurl.com/yd8xczdw from
PacerMonitor.com at no charge.
Proposed Counsel to the Debtor:
John D. Elrod
GREENBERG TRAURIG, LLP
3333 Piedmont Road NE, Suite 2500
Atlanta, Georgia 30305
Telephone: (678) 553-2259
Facsimile: (678) 553-2269
Email: elrodj@gtlaw.com
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.
INGENU INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Ingenu Inc.
f/k/a On-Ramp Wireless, Inc.
113 West G Street, Suite 1686
San Diego, CA 92101
Business Description: Ingenu -- http://www.ingenu.com/-- is a
provider of wireless networks. The company
focuses on machine to machine communication
by enabling devices to become Internet of
Things devices. Operating on universal
spectrum, the company's RPMA technology is a
proven standard for connecting Internet of
Things (IoT) devices across the globe.
Chapter 11 Petition Date: July 27, 2020
Court: United States Bankruptcy Court
Southern District of California
Case No.: 20-03779
Debtor's Counsel: Christopher V. Hawkins, Esq.
SULLIVAN HILL REZ & ENGEL,
A PROFESSIONAL LAW CORPORATION
600 B Street
Suite 1700
San Diego, CA 92101
Tel: (619) 233-4100
Email: hawkins@sullivanhill.com
Total Assets: $1,501,022
Total Liabilities: $55,438,074
The petition was signed by Alvaro Gazzolo, chief executive
officer.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/T89T9F
JASON INDUSTRIES: Hires Moelis & Company LLC as Investment Banker
-----------------------------------------------------------------
Jason Industries, Inc., and its debtor-affiliates seek authority
from the U.S. Bankruptcy Court for the Southern District of New
York to employ Moelis & Company LLC, as investment banker and
financial advisor to the Debtors.
Jason Industries requires Moelis & Company to:
a. assist the Debtors in reviewing and analyzing the Debtors'
results of operations, financial condition, and business
plan;
b. assist the Debtors in reviewing and analyzing any potential
Restructuring or Capital Transaction;
c. assist the Debtors in negotiating any Restructuring or
Capital Transaction;
d. advise the Debtors on the terms of securities it offers in
any potential Capital Transaction;
e. advise the Debtors on its preparation of information
memorandum for a potential Capital Transaction (each, an
"Information Memo");
f. assist the Debtors in contacting potential purchasers of or
participants in a Capital Transaction that Moelis & Company
and the Debtors agree are appropriate, and meet with and
provide them with the Information Memo and such additional
information about the Debtors' assets, properties, or
businesses that is acceptable to the Debtors, subject to
customary business confidentiality agreements;
g. provide such other financial advisory and investment
banking services in connection with a Restructuring or
Capital Transaction as Moelis & Company and the Debtors
may mutually agree upon; and
h. provide testimony in the Bankruptcy Cases with respect to
the going concern valuation range of the reorganized
debtors after giving effect to a Plan and with respect to
other appropriate matters relating to the Restructuring
process as Moelis & Company and the Debtors may mutually
agree upon in writing.
Moelis & Company will be paid at these hourly rates:
i. Monthly Fee. During the term of the Engagement Letter, a
fee of $125,000 per month (the "Monthly Fee"), payable in
advance of each month. The Debtors will pay the first
Monthly Fee immediately upon the execution of this
agreement, and all subsequent Monthly Fees prior to each
monthly anniversary of the date of the Engagement Letter.
Whether or not a Restructuring or Capital Transaction
occurs, Moelis shall earn and be paid the Monthly Fee every
month during the term of the Engagement Letter. After three
Monthly Fees have been earned and paid, 50% of the
following three Monthly Fees and 100% of the Monthly Fees
thereafter shall be offset, to the extent previously paid,
against any Restructuring or Capital Transaction Fee(s).
ii. Restructuring Fee. At the closing of a Restructuring, a
fee (the "Restructuring Fee") of $3,250,000, unless the
Restructuring is not consummated through a pre-packaged or
pre-arranged Plan, in which case the Restructuring Fee
will be $2,750,000.
iii. Capital Transaction Fee. At the closing of a Capital
Transaction, a non-refundable cash fee (the "Capital
Transaction Fee") of:
a. 3% of the aggregate gross amount or face value of
capital Raised 6 in the Capital Transaction as
equity, equity-linked interests, options, warrants,
or other rights to acquire equity interests, plus.
b. 2% of the aggregate gross amount of unsecured debt
obligations and other interests Raised in the
Capital Transaction.
c. 1% of the aggregate gross amount of secured debt
obligations and other interests Raised in the
Capital Transaction.
Zul Jamal, managing director at the investment banking firm of
Moelis & Company LLC, assured the Court that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code and does not represent any interest adverse to
the Debtors and their estates.
Moelis & Company can be reached at:
Zul Jamal
MOELIS & COMPANY LLC
399 Park Avenue, 5th Floor
New York, NY 10022
Tel: (212) 883-3800
About Jason Industries
Jason Industries, Inc., headquartered in Milwaukee, Wisconsin, is a
diversified manufacturing company serving the finishing, seating,
acoustics and components end markets.
Jason Industries, Inc., and 7 affiliates sought Chapter 11
protection (S.D.N.Y. Lead Case No. 20-22766) after reaching a deal
with lenders on terms of a plan that will cut debt by $250
million.
As of June 24, 2020, the Company reported total assets of
$204,886,939 and total debt of $428,374,343.
The Hon. Robert D. Drain is the case judge.
Moelis & Company LLC, is acting as financial advisor, Kirkland &
Ellis LLP is acting as legal counsel, and AlixPartners, LLP, is
acting as restructuring advisor to the Company in connection with
the Restructuring. Houlihan Lokey Capital, Inc., is acting as
financial and restructuring advisor and Weil, Gotshal & Manges LLP
is acting as legal counsel to the Consenting Creditors. Epiq
Corporate Restructuring, LLC, is the claims agent.
JENNIE STUART MEDICAL: Fitch Affirms BB+ Issuer Default Rating
--------------------------------------------------------------
Fitch Ratings has affirmed Jennie Stuart Medical Center's Issuer
Default Rating and revenue bond rating at 'BB+'. The revenue bond
ratings apply to approximately $62 million of bonds issued by
County of Christian, Kentucky on behalf of Jennie Stuart Medical
Center.
The bonds have been removed from Rating Watch Negative and assigned
a Stable Outlook.
SECURITY
The bonds are secured by a pledge of gross revenues, a first
mortgage lien on certain property and a debt service reserve fund.
ANALYTICAL CONCLUSION
The 'BB+' IDR and revenue bond rating reflect the lower margins and
weaker debt metrics that have defined the credit profile in past
years. However, profitability and liquidity have significantly
improved in fiscal 2018 and 2019 as JSMC successfully controlled
costs, expanded service lines and recognized incremental revenue
from a MSA reclassification and a Sole Community Hospital
designation beginning in full fiscal 2017. The rating also reflects
JSMC's position as a small stand-alone provider with leading market
share in a challenging service area with a weak payor mix and
stagnant population growth that will likely constrain the medical
center's ability to sustain recent high revenue growth.
The coronavirus pandemic and related government containment
measures worldwide create an uncertain environment for the entire
healthcare system in the near term. JSMC's financial performance
through the most recently available data has started to indicate
the impairment related to the pandemic. As restrictions on elective
procedures are lifted, however, operating margins are expected to
rebound. Its 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 expectations for future performance and assessment of key
risks.
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'
Leading Market Position in Challenging Service Area
JSMC's service area is economically challenged, reflected in a
payor mix where Medicaid and self-pay totaled 26.9% of gross
revenues as of Dec. 31, 2019, which could further deteriorate if
economic conditions worsen. However, JSMC maintains a SCH
designation and has a leading market share of 59% in its primary
service area, which is significantly higher than its nearest
competitor.
Operating Risk: 'bbb'
Improved Operating Performance
Fitch expects that JSMC's operating performance will somewhat
moderate following strong fiscal 2019 results due to revenue
dislocations stemming from the coronavirus pandemic and additional
costs from the ongoing expansion strategy but will remain above
prior years. Average age of plant remains elevated and capital
spending is expected to increase going forward following several
years of comparatively lower reinvestment.
Financial Profile: 'bb'
Adequate Financial Profile in the Forward-Look-Scenario Analysis
Although JSMC's financial and leverage profiles have shown
improvement over the past few years, the financial profile
assessment is still assessed as weak due to expectations for higher
capital spending and an aggressive asset allocation which consists
of 50% equities.
ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS
Thera are no asymmetric risk considerations affecting the rating
determination.
Quorum Health Bankruptcy
In April of this year, Quorum Health Corporation, the parent
company of a subsidiary that provides management services for JSMC
and employs the medical center's current CEO and CFO, filed for
bankruptcy. Quorum Health has since emerged from bankruptcy and
neither the subsidiary's nor JSMC's operations have been affected.
RATING SENSITIVITIES
The Stable Rating Outlook reflects Fitch's expectation that JSMC's
recent operational turnaround will support adequate balance sheet
metrics over the outlook period. Although operating performance and
liquidity have improved significantly over the last two years,
managing both the disruptions from the coronavirus pandemic and the
execution of ongoing strategic growth initiatives without a
significant depletion of the balance sheet will likely remain a
challenge going forward.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Maintenance of recently improved operating performance that
sustains operating EBITDA metrics at or above 9%.
-- Sustained cash flow growth that supports higher levels of
capital spending while maintaining cash to adjusted debt of around
100%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Fitch anticipates that JSMC's margins will continue to be
constrained in the coming months due to the disruption from the
coronavirus outbreak. Should economic conditions decline further
than Fitch's current expectations for economic contraction or
should a second wave of infections and longer lockdown periods
across parts of the country occur, Fitch would expect to see an
even larger GDP decline in 2020 and a weaker recovery in 2021, and
there may be rating pressure for JSMC;
-- A significant reduction in liquidity that leads to cash to
adjusted debt levels well below 75%;
-- A sustained economic downturn in JSMC's service area that
leads to significant deterioration in payor mix that constrains
operating margins.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure 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 PROFILE
JSMC is a 194-licensed bed (139-staffed bed) inpatient acute care
hospital located in Hopkinsville, KY, approximately 70 miles north
of Nashville, TN and 40 miles south from Madisonville, KY. JSMC had
total operating revenues of around $143 million in fiscal 2019.
REVENUE DEFENSIBILITY
JSMC's revenue source characteristics are consistent with a weak
assessment, as Medicaid accounted for 23.5% of the gross payor mix
and self-pay another 3.4% as of Dec. 31, 2019. Combined levels have
averaged about 27% since the state's Medicaid expansion in 2014. In
December of 2019, the governor rescinded the 1115 Medicaid
demonstration waiver and ended Kentucky's attempt to add a Medicaid
work requirement. This move clarified the future of Medicaid
eligibility in the state and reduced some of the uncertainty around
JSMC's future payor mix. However, Kentucky's economy has suffered
an outsized impact from the coronavirus, which could lead to a
deterioration of JSMC's payor mix if the economic contraction
persists.
Christian, Todd and Trigg Counties make up JSMC's PSA and account
for the vast majority of admissions. JSMC's PSA market share was a
leading 59.0% in fiscal 2019, down from 66.7% in 2015 as inpatient
volumes have gradually trended down in recent years.
However, volumes and revenues rebounded in fiscal 2019 with
revenues growing almost 13% from the prior year. Management shifted
strategies towards the end of 2018 to focus on expanding JSMC's
service area and drawing in more patients from outside the PSA. To
that end, physician recruitment in key service lines has been
strong with the acquisition of a local oncology group and
significant growth in the number of employed physicians. JSMC has
partnered with a real estate development firm (Greystone
Development of Brentwood, TN) to construct a large multi-specialty
medical office building. The facility will feature both Jennie
Stuart Health and their clinical affiliated partner Vanderbilt
Health clinics and is expected to open at the end of this year.
Strategic efforts to continue to expand the service area are
expected to continue going forward but revenue growth opportunities
remain somewhat constrained given JSMC's already dominant PSA
market share in an area with modest population declines.
The PSA for JSMC is within three counties in southwestern Kentucky.
The socioeconomic indicators are generally weak; with a declining
population and median household income levels and poverty rates
that are worse than national averages. Although payor mix has
remained stable over the past five years, Kentucky has suffered a
much greater economic impact from the coronavirus pandemic than
other parts of the country, with cumulative unemployment claims as
a percentage of labor force reaching almost 51% at the beginning of
July, compared to the national average of 29%. Kentucky's economy
has seen some improvement over the last month, but JSMC's service
area characteristics could worsen if economic conditions do not
improve.
OPERATING RISK
JSMC's operating performance has continued to improve in recent
years with operating EBITDA margins growing from 6.9% in fiscal
2017 to 12.5% in fiscal 2019. After previously focusing on
streamlining hospital operations to reduce costs and improve
efficiency, management recently shifted its strategy to prioritize
expansion which has thus far translated to a significant
improvement in operating results prior to the coronavirus pandemic.
The operational improvement is also the result of JSMC's
classification as a SCH and its reclassification into the Nashville
MSA in 2016, which increased the wage class index reimbursement
level. The Nashville MSA classification was renewed in 2019 for
three more years which will continue to support JSMC's operating
results.
The coronavirus pandemic has significantly pressured JSMC's
operations along with the broader economy. JSMC will almost
certainly show a softening of margins in fiscal 2020, primarily due
to the cancelation of non-emergent procedures in March, although
these losses have been partially offset by CARES Act and related
stimulus funds. JSMC received around $8.8 million in HHS stimulus
funds as well as around $14.9 million in Medicare Advance payments
which will begin to offset through nonpayment of future Medicare
claims in August 2020.
Additionally, JSMC quickly moved to cut expenses and lay off staff
in response to the financial pressures which, along with government
funding, has somewhat mitigated the financial impact of the
shutdown. Management closed down the recently opened geriatric
health unit to reduce costs and is planning on making permanent job
cuts to improve efficiency. Patient volumes and operating results
have significantly improved through June, with operating EBITDA
rebounding to 9.5% through the six months ending June 30th, and
Fitch expects operations will continue to recover through the end
of the fiscal year. However, although the medical center and its
service area have seen limited coronavirus cases so far, the future
track of the pandemic remains uncertain and further operating
pressures could occur should there be a surge related to the
coronavirus in JSMC's service area later this year.
After years of low capital investment that caused the average age
of plant to rise above 17 years, JSMC has and will continue to
increase its capital spending going forward. In 2019, JSMC and
Vanderbilt Health broke ground on the new medical office building
and used the remainder of the 2016 bond proceeds to build the
now-closed geriatric center and to expand the radiation oncology
department. Going forward, JSMC is in the planning stage for a $23
million expansion project that would revamp the hospital's
pharmacy, consolidate oncology services, and expand the emergency
department. Planning was put on hold due to the coronavirus
pandemic but a decision on whether or not to proceed will be made
by next year. Management is not expecting to incur additional debt
in conjunction with these projects and would finance them with cash
reserves.
Kentucky Medicaid Reimbursement Lawsuit Settlement
On June 24, 2020, Kentucky reached a settlement with 54 rural
hospitals that concluded a 13-year dispute over Medicaid's rate
setting methodology that resulted in an underpayment of claims from
2007 through 2015. JSMC will receive $3.1 million as a result of
the settlement which was recorded in June 2020.
FINANCIAL PROFILE
JSMC's financial profile assessment is largely determined by the
midrange assessment for revenue defensibility and operating risk
and reflects leverage metrics that are on the high end of a below
investment-grade rating. Balance sheet metrics have strengthened in
recent years, with cash to adjusted debt and net adjusted debt to
adjusted EBITDA improving to 106% and a favorable -0.2X,
respectively, in fiscal 2019.
Despite an aggressive asset allocation and expectations for higher
levels of capital spending going forward, JSMC's balance sheet and
leverage metrics remain adequate for the rating through Fitch's new
base case scenario that incorporates Fitch's current estimates of a
sharp decline in investment portfolio holdings and financial stress
from disrupted operations in 2020. Fitch's analytic expectations
are based on the financial metrics after the expected recovery in
2021, which reflect balance sheet metrics that still provide an
adequate cushion above the thresholds for the 'bb' financial
profile assessment for a hospital with midrange revenue
defensibility and operating risk profiles. The scenario
incorporates the $3.1 million Medicaid settlement that was received
in fiscal 2020.
Despite the stress, Fitch's forward-looking analysis shows cash to
adjusted debt only falling to around 80% in the outer years and net
adjusted debt to adjusted EBITDA remaining below 1.0x. If JSMC is
able to sustain cash flows that can support the expected increase
in capital spending without a significant deterioration in balance
sheet metrics a higher financial profile assessment could be
warranted.
ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS
No asymmetric factors were applied in this rating determination.
JSMC had total debt outstanding of $68.8 million as of June 30,
2020. The series 2016 bonds and two small taxable bank notes are
all fixed-rate. JSMC is not a party to any swap agreement or
defined benefit pension plan.
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.
KIP MOTOR: Seeks to Hire Marilyn Garner as Counsel
--------------------------------------------------
Kip Motor Company, Inc., seeks authority from the U.S. Bankruptcy
Court for the Northern District of Texas to employ the Law Office
of Marilyn Garner, as counsel to the Debtor.
Kip Motor requires Marilyn Garner to:
(a) give the Debtor legal advice with respect it its powers
and duties in the continued operation of the business and
management of its property;
(b) take necessary action to investigate and recover
fraudulent or preferential transfers of Debtor's property
before commencement of these proceedings and, where
appropriate, to institute appropriate proceedings for sale
of property free and clear of liens and assist in
obtaining post-petition financing;
(c) defend the Debtor in contested matters or adversary
proceedings as they are brought before the Court under
Chapter 11 administration;
(d) assist or prepare on behalf of Debtor the necessary
applications, answers, orders, schedules, reports, plans
of reorganization and other legal papers;
(e) provide general advice to the Debtor concerning its
conduct and responsibilities as Debtor, to assure Debtor
meets its responsibilities under Chapter 11 and to perform
all other legal services which may be necessary herein;
and
(f) respond to and cooperate with the Subchapter V Trustee
appointed herein to facilitate confirmation of a plan of
reorganization.
Marilyn Garner will be paid at these hourly rates:
Attorneys $450
Associates $250
Legal Assistants $150
Marilyn Garner will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Marilyn Garner, partner of the Law Office of Marilyn Garner,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
Marilyn Garner can be reached at:
Marilyn Garner, Esq.
LAW OFFICE OF MARILYN D. GARNER
2001 E. Lamar Blvd., Suite 200
Arlington, TX 76006
Tel: (817) 505-1499
Fax: (817) 549-7200
E-mail: mgarner@marilyndgarner.net
About Kip Motor Company
Kip Motor Company, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. N.D. Tex. Case No. 20-31894) on July 9, 2020, disclosing
under $1 million in both assets and liabilities. The Debtor is
represented by the Law Office Of Marilyn Garner.
KKR REAL ESTATE: S&P Assigns 'BB-' ICR; Outlook Negative
--------------------------------------------------------
S&P Global Ratings said it assigned its 'BB-' issuer credit rating
to KKR Real Estate Finance Trust Inc. (KREF). The outlook is
negative.
S&P also assigned its 'BB-' issue rating to the company's proposed
$300 million senior secured term loan B.
"Our rating on KREF reflects its exposure to transitional CRE
loans, its relatively high leverage compared with other rated
transitional CRE lenders, and its largely encumbered balance sheet
with margin call risk on its secured repurchase facilities. At the
same time, the company's solid market position, usage of
nonrecourse, non-mark-to-market debt, and focus on lending to large
and well-capitalized real estate sponsors are positive ratings
factors," S&P said.
The negative outlook reflects the potential that the company's
investment performance could suffer over the next 12 months amid
current difficult operating conditions. S&P's base-case scenario
incorporates its expectation that the company will operate with
leverage of 3.5x-4.0x over the next 12 months, as measured by debt
to adjusted total equity.
"We could downgrade the company if leverage increases to above 4.0x
on a sustained basis; if the portfolio does not perform as
expected; or if the company's financial flexibility, liquidity, or
investment concentrations worsen, in our view," S&P said.
"We could revise the outlook to stable if macroeconomic conditions
stabilize; the company's liquidity remains adequate, in our view;
asset quality is relatively stable; and leverage remains within our
expectations," the rating agency said.
KKR REAL: Moody's Assigns Ba3 CFR & Ba2 Senior Secured Rating
-------------------------------------------------------------
Moody's Investors Service has assigned a first-time Ba3 corporate
family rating to KKR Real Estate Finance Trust Inc. and a backed
Ba2 rating to the company's senior secured term loan B, issued by
subsidiary KREF Holdings X LLC. The outlook for both entities is
stable.
The rapid and widening pandemic and corresponding deterioration in
the global and US economic outlooks are leading to significant
declines in commercial activity, eroding the financial strength of
a wide swath of enterprises, including commercial real estate
owners and operators, the subject of KREF's lending activities. As
a result, Moody's expects deterioration in asset quality,
profitability and capital in 2020 across the non-bank commercial
real estate lending sector.
RATINGS RATIONALE
KREF's Ba3 corporate family rating reflects the company's history
of profitable operating performance, the high quality composition
of its lending portfolio, its effective liquidity and capital
management, and the strength of its competitive positioning
resulting from its affiliation with KKR & Co. Inc. Rating
constraints include KREF's short six-year operating history
relative to rated peers and its high reliance on secured funding
that encumbers its earning assets.
KREF, which commenced operations in 2014, is externally managed by
KKR Real Estate Finance Manager LLC, a subsidiary of KKR, a leading
global investment firm with $207 billion of assets under management
as of March 31, 2020, including over $10 billion through its real
estate investing platforms. The affiliation with KKR provides KREF
with sector knowledge, access to sponsor and investor
relationships, expertise in underwriting and risk management, and
access to funding sources that belie KREF's operating scale.
Additionally, KKR's ownership interest in KREF of approximately 35%
is a strong signal of aligned interests.
KREF's high quality loan portfolio is oriented towards senior
secured loans on multifamily and office properties (81% of the
portfolio at June 30, 2020) in large metropolitan areas with
diverse economies. KREF's exposure to the hospitality and retail
sectors, hard hit by the coronavirus pandemic, is a lower
percentage of its total investments (8% combined) than every
Moody's-rated non-bank commercial real estate lender peer. Moody's
expects that KREF's strong portfolio composition should lessen
deterioration in asset quality and performance compared to rated
peers as the US economy passes through a period of weakness. KREF's
loan portfolio is less granular than certain peers, with an average
loan size of $134 million at June 30, 2020, but the company's focus
on large, experienced sponsors in major markets contributes to its
bias for larger more stable loans, aiding performance stability.
KREF's portfolio of about 40 commercial real estate loans had a
carrying value of $5.3 billion at June 30, 2020.
KREF's profitability, as measured by return on assets, ranged
between 0.8% and 1.75% from 2017 through 2019, lower than rated
peers, as the company was in the midst of ramping its capital
deployment into real estate loan investments during this period.
KREF's returns will likely be pressured under currently weakened
economic conditions that negatively affect loan performance, but
Moody's expects that the company's earnings volatility will be
lower than peers, considering its high-quality loan portfolio
composition and strong asset quality performance. In the first
quarter of 2020, KREF recorded a net loss as the company added
reserves in connection with the adoption of the Current Expected
Credit Loss accounting standard, but preliminarily the company
reported profitable operations in the second quarter.
KREF has access to diverse funding sources and a well laddered debt
maturity profile. At June 30, 2020, the company had $431.1 million
of liquidity, including $285 million of undrawn capacity under its
$335 million revolving credit facility, $18.8 million of other
committed borrowing availability, and cash of $127.3 million,
providing adequate coverage of unfunded lending commitments as well
as potential margin call requirements in it repurchase facilities.
The company's exposure to margin call features in its funding
arrangements was 27% at June 30, 2020, a lower percentage than all
Moody's rated commercial real estate lender peers; additionally,
margin calls are based exclusively on credit factors rather than
market factors. KREF's next debt maturity is in October 2021.
KREF's leverage is moderately higher than peers, but this is
reflecting the lower risk profile of its loan portfolio and the
higher proportion of non-mark-to-market financing in its capital
structure. Moody's expects that KREF will maintain debt to equity
leverage of less than 4.5x.
Key rating constraints include KREF's relatively short operating
history and the high proportion of secured funding in its debt
capital structure. Moody's expects that secured debt will continue
to be the predominant source of KREF's funding, which requires the
company to pledge nearly all earning assets, limiting its access to
the unsecured debt markets.
KREF's outlook is stable, reflecting the strength of the company's
portfolio composition and its manageable exposure to mark-to-credit
provisions in its funding structure that position the company to
endure likely deterioration in asset performance and real estate
values, profitability and capital position relating to the
coronavirus pandemic.
The backed Ba2 long-term rating assigned to the term loan B issued
by KREF Holdings X LLC reflects the loan's senior secured position
in KREF's overall capital structure, the guarantees provided by the
issuer's immediate parent holding company and certain affiliates,
as well as the collateral pledge of equity interests in certain
KREF asset-owning subsidiaries and other assets. Moody's expects
that the collateral provides sufficient coverage of the term loan B
to reduce its risk of loss compared to more subordinate forms of
debt capital. Proceeds of the term loan B will be used primarily to
reduce other KREF indebtedness.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade KREF's ratings if the company: (1) reduces
its reliance on secured debt financing and increases unencumbered
assets; (2) maintains strong asset quality; (3) reduces
debt-to-tangible net worth leverage; and (4) demonstrates a further
track-record of earnings and profitability that compares well with
peers, considering differences in investment strategies.
Moody's could downgrade KREF's ratings if the company: 1)
experiences a deterioration in asset quality and profitability
exceeding Moody's expectations; 2) increases its leverage
(debt/tangible net worth) above 4.5x given the current portfolio
mix; 3) materially reduces it liquidity position.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
LAKELAND TOURS: July 29 Deadline Set for Committee Questionnaires
-----------------------------------------------------------------
The U.S. Trustee is soliciting creditor interest in serving on
committees in the bankruptcy cases of Lakeland Tours, LLC, et al.,
d/b/a WorldStrides.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a required
Questionnaire and return it to the Office of the United States
Trustee no later than 12:00 p.m. (EST), on July 29, 2020 by email
to USTPRegion02.NYECF@usdoj.gov.
A representative from the U.S. Trustee's Office will contact all
creditors submitting a questionnaire to arrange for a telephonic
interview.
About Lakeland Tours
Lakeland Tours, LLC, et al., d/b/a WorldStrides, together with
their non-Debtor affiliates, provide full-service educational
travel and experiential learning programs domestically and
internationally for students from K12 to graduate level. The
Companies are one of the U.S.' largest accredited travel company,
providing organized educational travel and other experiential
learning programs for more than 550,000 students in 2019.
Lakeland Tours LLC and certain of its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. N.Y., Lead
Case No. 20-11647) on July 20, 2020. The petitions were signed by
Kellie Goldstein, chief financial officer.
At the time of the filing, the Debtors estimated consolidated
assets of $1 billion to $10 billion and consolidated liabilities of
$1 billion to $10 billion.
Nicole L. Greenblatt, P.C., Susan D. Golden, Esq., and Whitney
Fogelberg, Esq. of Kirkland & Ellis LLP is the Debtors' counsel.
KPMG LLP is the Debtors' financial advisor. Houlihan Lokey
Capital, Inc. is the Debtors' investment banker; Bankruptcy
Management Solutions is the notice and claims agent; and Daniel J.
Edelman Holdings Inc is the communications consultant and advisor.
LAKELAND TOURS: Moody's Cuts PDR to D-PD on Chapter 11 Filing
-------------------------------------------------------------
Moody's Investors Service downgraded Lakeland Tours, LLC, including
the company's corporate family rating to Ca from Caa3, probability
of default rating to D-PD from Caa3-PD, and the rating for Lakeland
Tours' senior secured first lien credit facilities to Ca from Caa2.
The outlook is changed to stable from negative.
The downgrade of the ratings was prompted by Lakeland Tours'
initiating of Chapter 11 bankruptcy proceedings announced on July
20, 2020. The company has entered into a restructuring support
agreement with its lenders and sponsors. As part of the
restructuring plan, the company expects to enter into an
approximately $368 million DIP facility provided by consenting
lenders and sponsors. Lakeland Tours is owned by sponsors Eurazeo
and minority investor Primavera Capital Group.
Shortly following these rating actions, Moody's will withdraw all
of Lakeland Tours' ratings.
A summary of its action follows:
Downgrades:
Issuer: Lakeland Tours, LLC
Probability of Default Rating, Downgraded to D-PD from Caa3-PD
Corporate Family Rating, Downgraded to Ca from Caa3
Senior Secured Bank Credit Facility, Downgraded to Ca (LGD3) from
Caa2 (LGD3)
Outlook Actions:
Issuer: Lakeland Tours, LLC
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The downgrade of the PDR to D-PD from Caa3-PD reflects Lakeland
Tours' bankruptcy filing on July 20, 2020. The Ca CFR and senior
secured bank credit facilities ratings reflect Moody's view on
recovery.
The rapid and wide spread of the coronavirus outbreak and weak
global economic outlook created a severe and extensive credit shock
across many sectors, regions and markets, including Lakeland Tours.
Lakeland Tours experienced a significant drop in operating revenue
as travel plans were hampered. Due to the impaired operating
conditions, the company is looking to reduce its heavy debt burden
and return to a more sustainable capital structure through the
restructuring process. The company has entered into a restructuring
support agreement with the majority of the company's credit
facility lenders whereby the company will eliminate approximately
$100 million in debt and emerge from Chapter 11 bankruptcy by
October 2020. The company's $368 million DIP facility will include
$200 million in new money to be provided by certain lenders and the
sponsors and approximately $150 million of rollover loans
fromcurrent lenders. The DIP facility is expected to be converted
into exit facilities as well as common stock at the completion of
the bankruptcy process.
Headquartered in Charlottesville, Virginia, Lakeland Tours is an
accredited educational institution that provides full service
educational travel programs to K-12, undergraduate and post
graduate students, both domestically and internationally. Lakeland
Tours generated revenues of approximately $359 million over the
twelve months ended June 30, 2020. The company is owned by Eurazeo
and minority investor Primavera Capital Group.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
LATAM AIRLINES: Seeks to Hire Larrain Vial as Investment Banker
---------------------------------------------------------------
LATAM Airlines Group S.A. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of New York to
employ Larrain Vial Servicios Profesionales Limitada as their
investment banker.
The firm's services will include advisory and intermediation
services related to Latin American entities; identification of
investors willing to participate in the debtor-in-possession
financing through a collective investment fund; and analysis and
implementation of shareholder access to the DIP financing.
The firm will be compensated as follows:
(a) Fixed Fee. Larrain Vial will receive .25 percent of any
financing it obtains for Tranche A of the DIP financing and .10
percent of any financing it obtains for Tranche C of the DIP
financing. The firm will receive 50 percent of such fixed fee when
it: (1) receives a firm investment commitment; and (2) the
financing structure proposed by Debtors is approved by the
bankruptcy court. The firm will receive the remaining 50 percent of
such fixed fee at the time of actual disbursement of the financing.
Notwithstanding the above, the Fixed Fee shall not exceed $1
million.
(b) Discretionary Fee. In addition to any fixed fee, Debtors,
in their discretion, may pay Larrain Vial up to, but not exceeding,
$1 million, which will be payable upon completion of Debtors'
Chapter 11 cases.
Felipe Porzio Honorato, head of Investment Banking at Larrain Vial,
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:
Felipe Porzio Honorato
Larrain Vial Servicios Profesionales Limitada
Avenida El Bosque Norte 177
Piso 4, Las Condes
Santiago, CL 7550100
About LATAM Airlines Group
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise.
LATAM Airlines Group S.A. is the largest passenger airline in South
America. Before the onset of the COVID-19 pandemic, LATAM offered
passenger transport services to 145 different destinations in 26
countries, including domestic flights in Argentina, Brazil, Chile,
Colombia, Ecuador and Peru, and international services within Latin
America as well as to Europe, the United States, the Caribbean,
Oceania, Asia and Africa.
LATAM Airlines Group S.A. and its 28 affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25,
2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United
States are part of the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of Dec. 31, 2019.
The Hon. James L. Garrity, Jr., is the case judge.
Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as general
bankruptcy counsel; FTI Consulting as restructuring advisor; Togut,
Segal & Segal LLP and Claro & Cia in Chile as special counsel;
PricewaterhouseCoopers Consultores Auditores SpA as independent
auditors; and Larrain Vial Servicios Profesionales Limitada as
Latin America investment banker. Prime Clerk LLC is the claims
agent.
LATAM AIRLINES: Seeks to Tap PwC Consultores as Auditor
-------------------------------------------------------
LATAM Airlines Group S.A. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of New York to
employ PricewaterhouseCoopers Consultores Auditores SpA.
PwC will render the following audit services:
(a) Pursuant to the engagement agreement between Debtors and PwC
dated June 5, 2020:
(i) preparation of a limited review report, in Spanish and
English, on the consolidated financial statements at June 30, 2020
of LATAM Parent and subsidiaries,5 prepared in accordance with
International Financial Reporting Standards (IFRS), as per the
auditing standards established in Chile for reviews of interim
financial information;
(ii) preparation of a limited review report, in Spanish and
English, on the consolidated financial statements at September 30,
2020 of LATAM Parent and subsidiaries, prepared in accordance with
IFRS, as per the auditing standards established in Chile for
reviews of interim financial information;
(iii) preparation of an audit report of the financial
statements of LATAM Parent and its subsidiaries as of December 31,
2020 and 2019 and for the years then ended prepared in accordance
with IFRS and in accordance with generally accepted auditing
standards applicable in Chile, issued by the Chilean Institute of
Accountants A.G.;
(iv) preparation of a report and statement regarding the
compliance of the instructions established in the General
Regulation No. 30 of the Chilean Commission for the Financial
Market (the CMF) at Dec. 31, 2020;
(v) preparation of an independent professional opinion,
expressed in accordance with auditing standards established by the
U.S. Public Company Accounting Oversight Board, on the consolidated
financial statements at December 31, 2020 of LATAM Parent and its
subsidiaries, in English, to be included in its Annual Report on
Form 20-F. Such report additionally includes an opinion regarding
the effectiveness of the internal control over financing reporting
review, as requested by section 404 of the Sarbanes-Oxley Act.
(b) Pursuant to the engagement letter dated May 27, 2020,
performing an interim audit of the financial statements of LATAM
Airlines Group Peru S.A. in accordance with IFRS and in accordance
with the International Standards on Auditing approved for
application in Peru by the Peruvian Auditing Standards Setter, in
order to issue and interoffice report on the financial information
of LATAM Airlines Peru as of and for the three month period ended
March 31, 2020.
The fees for the audit services pursuant to the June 5 agreement
will be approximately $1,042,600, excluding out-of-pocket expenses.
Pursuant to the May 27 agreement, the fees for the interim audit
services will be approximately $12,516, excluding out-of-pocket
expenses.
Additional work will be billed at the following hourly rates:
Partner $180
Senior Manager $100
Manager $72
Senior $41
Assistant $25
Ricardo Arrano, a partner at PricewaterhouseCoopers, 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:
Ricardo Arrano
PricewaterhouseCoopers Consultores Auditores SpA
Av. Andres Bello 2711 Piso 1, Las Condes
Santiago, CL
Telephone: (56) 2 2940 0000
Email: ricardo.arrano@cl.pwc.com
About LATAM Airlines Group
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise.
LATAM Airlines Group S.A. is the largest passenger airline in South
America. Before the onset of the COVID-19 pandemic, LATAM offered
passenger transport services to 145 different destinations in 26
countries, including domestic flights in Argentina, Brazil, Chile,
Colombia, Ecuador and Peru, and international services within Latin
America as well as to Europe, the United States, the Caribbean,
Oceania, Asia and Africa.
LATAM Airlines Group S.A. and its 28 affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25,
2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United
States are part of the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of Dec. 31, 2019.
The Hon. James L. Garrity, Jr., is the case judge.
Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as general
bankruptcy counsel; FTI Consulting as restructuring advisor; Togut,
Segal & Segal LLP and Claro & Cia in Chile as special counsel;
PricewaterhouseCoopers Consultores Auditores SpA as independent
auditors; and Larrain Vial Servicios Profesionales Limitada as
Latin America investment banker. Prime Clerk LLC is the claims
agent.
LIBBEY GLASS: Hires Deloitte & Touche as Independent Auditor
------------------------------------------------------------
Libbey Glass Inc., and its debtor-affiliates seek authority from
the U.S. Bankruptcy Court for the District of Delaware to employ
Deloitte & Touche LLP, as independent auditor to the Debtors.
Libbey Glass requires Deloitte & Touche to perform an integrated
audit in accordance with the standards of the Public Company
Accounting Oversight Board (PCAOB) (United States) (the "PCAOB
Standards") and express an opinion on (1) the fairness of the
presentation of Debtor Libbey Inc.'s (the "Company") financial
statements for the year ending December 31, 2020, in conformity
with accounting principles generally accepted in the United States
of America ("generally accepted accounting principles"), in all
material respects, and (2) the effectiveness of the Company's
internal control over financial reporting as of December 31, 2020,
based on the criteria established in Internal Control —
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Deloitte & Touche will
also perform a review of the Debtors' condensed interim financial
information in accordance with the PCAOB Standards for each of the
quarters in the year ending December 31, 2020, prepared for
submission to the Securities and Exchange Commission (the
"Services").
Deloitte & Touche will be paid at these hourly rates:
Partner/Managing Director $425
Senior Manager/Manager $325
Senior $225
Staff $175
In the 90 days prior to the Petition Date, the Debtors paid
Deloitte Tax approximately $137,500, including retainer amounts,
for services performed and/or to be performed. As of the Petition
Date, approximately $15,000 of the retainer amounts remained.
Deloitte & Touche will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Julie Wahrman, partner of Deloitte & Touche LLP, assured the Court
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Deloitte & Touche can be reached at:
Julie Wahrman
Deloitte & Touche LLP
200 Renaissance Center, Suite 3900
Detroit, MI 48243
Tel: (313) 396-3000
Fax: (313) 396-3618
About Libbey Glass
Based in Toledo, Ohio, Libbey Inc. (NYSE American: LBY) is one of
the largest glass tableware manufacturers in the world. Libbey
operates manufacturing plants in the U.S., Mexico, China, Portugal
and the Netherlands. In existence since 1818, Libbey 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'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
million to $1 billion in liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the case judge.
The 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
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 retained Brown
Rudnick LLP, and Bayard, P.A., as counsels; Greenhill & Co., Inc.,
as financial advisor.
LIBBEY GLASS: Hires Deloitte Tax as Tax Service Provider
--------------------------------------------------------
Libbey Glass Inc., and its debtor-affiliates, seek authority from
the U.S. Bankruptcy Court for the District of Delaware to employ
Deloitte Tax LLP, as tax service provider to the Debtors.
Libbey Glass requires Deloitte Tax to provide the following
services:
a. Tax Advisory Engagement Letter: Provide services on
federal, foreign, state and local tax matters;
b. Work Orders: Provide services, in connection with certain
matters related to the Debtors' restructuring, including
debt refinancing, and restructuring; and
c. Tax Compliance Engagement Letter: Prepare the Debtors'
2019, 2020 and 2021 federal, state and local income tax
returns.
Deloitte Tax will be paid at these hourly rates:
Partner/Principal/Managing Director $900 to $975
Sr. Manager $800 to $870
Manager $690 to $740
Sr. Consultant/Sr. Staff $535 to $535
Consultant/Staff $435 to $435
Prior to the Petition Date, the Debtors paid Deloitte Tax the
amount of $125,000 in the form of retainers for services to be
performed pursuant to the Restructuring Work Orders.
Deloitte Tax will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Elias Tzavelis, partner of Deloitte Tax LLP, assured the Court that
the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code and does not represent any
interest adverse to the Debtors and their estates.
Deloitte Tax can be reached at:
Elias Tzavelis
DELOITTE TAX LLP
30 Rockefeller Plaza
New York, NY 10112
Tel: (313) 396-3000
About Libbey Glass
Based in Toledo, Ohio, Libbey Inc. (NYSE American: LBY) is one of
the largest glass tableware manufacturers in the world. Libbey
operates manufacturing plants in the U.S., Mexico, China, Portugal
and the Netherlands. In existence since 1818, Libbey 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'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.
The 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
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 retained Brown
Rudnick LLP, and Bayard, P.A., as counsels; Greenhill & Co., Inc.,
as financial advisor.
MARTIN MIDSTREAM: Gets Requisite Consents to Amend Indenture
------------------------------------------------------------
Martin Midstream Partners L.P. announced that, in connection with
its and its subsidiary, Martin Midstream Finance Corp.'s previously
announced (1) offer to exchange, consent solicitation, rights
offering and plan solicitation made pursuant to the confidential
Exchange Offer Memorandum, Consent Solicitation, Rights Offering,
and Disclosure Statement Soliciting Acceptances of a Prepackaged
Plan of Reorganization, dated July 9, 2020 to Eligible Holders, and
(2) separate but related offer to purchase and consent solicitation
made pursuant to the Offer to Purchase and Consent Solicitation
Statement, dated July 9, 2020 to Other Holders, it has received
tenders and consents as of 5:00 p.m., New York City time, on July
23, 2020 of the Issuers' 7.25% senior unsecured notes due 2021 as
set forth in the following table.
Percent
Tendered by
Principal Amount Early
Tendered by Early Participation
Election Option Participation Date Date
--------------- ------------------ -------------
Exchange Offer Option 1 – $1,769,000 0.485%
Cash Election
Exchange Offer Option 2 – $34,484,000 9.462%
Exchange Notes Election
Exchange Offer Option 3 – $298,085,000 81.789%
New Notes and
Exchange Notes Election
Cash Tender Offer $1,125,000 0.309%
------------ --------
Total $335,463,000 92.045%
As previously announced, the Exchange Offer and the Cash Tender
Offer are scheduled to expire at 5:00 p.m., New York City time, on
Aug. 7, 2020, unless extended or earlier terminated by the
Partnership (such date and time with respect to the Exchange Offer
or the Cash Tender Offer, as applicable, as the same may be
extended or earlier terminated with respect to such offer. Eligible
Holders may tender their Existing Notes in the Exchange Offer until
the Expiration Time. Other Holders may tender their Existing Notes
in the Cash Tender Offer until the Expiration Time. It is expected
that the closing of the Exchange Offer and the closing of the Cash
Tender Offer will be on or about Aug. 12, 2020, which is the third
business day following the Expiration Time, or as soon as
practicable thereafter.
Certain holders of the Existing Notes, who as of July 24, 2020,
beneficially owned approximately $270.7 million aggregate principal
amount, or approximately 74.3%, of the outstanding Existing Notes,
have agreed to, among other things, support and use commercially
reasonable efforts to complete the transactions, including by (i)
tendering their Existing Notes in the Exchange Offer in accordance
with the Backstop Agreement, dated as of
July 9, 2020, between the Partnership and certain of its
subsidiaries, and certain of the Supporting Holders, (ii)
delivering their consents in the related consent solicitation and
(iii) voting in favor of the prepackaged plan of reorganization, as
contemplated by the Restructuring Support Agreement, dated as of
June 25, 2020, between the Partnership, its general partner and
certain of its subsidiaries, and the Supporting Holders.
The Exchange Offer and the Cash Tender Offer are each subject to
certain closing conditions, including, among other things,
participation in the offers by at least 95% of the outstanding
principal amount of Existing Notes as of the Expiration Time. The
Minimum Participation Condition has not yet been met. The
Partnership reserves the right, in its sole discretion, to: (1)
delay accepting any tendered Existing Notes and delivered consents,
terminate or amend or extend the Exchange Offer, Cash Tender Offer
or related consent solicitations and not to accept for exchange or
purchase any Existing Notes not previously accepted for exchange or
purchase; and (2) amend, modify or waive, in part or in whole, at
any time, or from time to time, the terms of the Exchange Offer,
the Cash Tender Offer or the related consent solicitations in any
manner not prohibited by law.
Consent Solicitations
According to information provided to the Partnership by Epiq
Corporate Restructuring, LLC as of the Early Participation Date,
holders of the Existing Notes had validly tendered (and not validly
withdrawn) an aggregate principal amount of $335,463,000 of the
Existing Notes, representing approximately 92.045% of the aggregate
principal amount of the Existing Notes in the Exchange Offer and
the Cash Tender Offer. Based on the tenders and consents received
in the Exchange Offer and the Cash Tender Offer, the Partnership
has received the requisite majority consent necessary for the
adoption of the proposed amendments to the indenture governing the
Existing Notes, which will, among other things, eliminate
substantially all of the restrictive covenants in the Existing
Notes Indenture, delete certain events of default, and shorten the
period of advance notice required to be given to holders of
Existing Notes from 30 days to 3 business days in the case of a
redemption of the Existing Notes. Promptly following the
Expiration Time, the Partnership, FinanceCo, the guarantors party
thereto and the trustee under the Existing Notes Indenture will
enter into a supplemental indenture to amend the Existing Notes
Indenture. The Supplemental Indenture will become effective upon
execution, but the Supplemental Indenture will not become operative
until the time immediately prior to delivery by the Partnership of
the Exchange Offer consideration and the Cash Tender Offer
consideration at the direction of the Exchange Agent and the
Depositary and Information Agent (each as defined below) on the
Settlement Date. Thereafter, Eligible Holders of Existing Notes
not validly tendered in the Exchange Offer that remain outstanding
and Other Holders of Existing Notes not validly tendered in the
Cash Tender Offer that remain outstanding will be bound by the
Proposed Amendments even though they have not consented to the
Proposed Amendments.
Exchange Offer
Pursuant to the terms of the Exchange Offer, Eligible Holders who
validly tendered and did not validly withdraw their Existing Notes
and their consents on or prior to the Early Participation Date will
receive total consideration for each $1,000 in principal amount of
Existing Notes tendered of either (1) $650 in cash (subject, along
with the Cash Tender Offer, to a combined cap of $77.0 million in
aggregate principal amount of Existing Notes) ("Option 1"), (2)
$1,000 in principal amount of 11.50% senior secured second lien
notes due 2025 ("Option 2"), or (3) (a) the right to acquire an
Eligible Holder's pro rata share of $50.0 million of 10.00% senior
secured 1.5 lien notes due 2024, the proceeds of which will be used
to fund the cash portion of the Exchange Offer and the Cash Tender
Offer, to purchase Existing Notes on a pro rata basis from Eligible
Holders that participate in the Rights Offering with Excess
Proceeds, if any, and any remaining proceeds will be used for
general partnership purposes and (b) $1,000 in principal amount of
Exchange Notes for such Eligible Holder's Existing Notes remaining
after application of the Excess Proceeds, at the option of each
Eligible Holder that elects to participate in the Exchange Offer,
subject to adjustments as described in the Offering Memorandum.
Eligible Holders who validly tender their Existing Notes after the
Early Participation Date but at or prior to the Expiration Time
will receive exchange consideration for each $1,000 in principal
amount of Existing Notes tendered of either (i) $600 cash or (ii)
$950 principal amount of Exchange Notes. Eligible Holders of
Existing Notes accepted for exchange will also receive accrued and
unpaid interest from and including Feb. 15, 2020 until the
Settlement Date. Eligible Holders' rights to validly withdraw
tendered Existing Notes and validly delivered consents expired on
the Early Participation Date. Accordingly, tendered Existing Notes
in the Exchange Offer may no longer be withdrawn (except in the
limited circumstances described in the Offering Memorandum).
If the amount of cash consideration required to be paid pursuant to
the cash portion of the Exchange Offer and the Cash Tender Offer is
less than $50.0 million, the Partnership will first purchase
Existing Notes from each Eligible Holder electing Option 3, on a
pro rata basis based upon such Eligible Holder's participation in
the Rights Offering relative to all Eligible Holders who
participated in the Rights Offering, with Excess Proceeds at a
purchase price equal to $1,000 per Existing Note, and the balance
of Existing Notes each such Eligible Holder tendered that were not
accepted for purchase for cash will be exchanged into Exchange
Notes as if such Eligible Holder had made an election pursuant to
Option 2 with respect to such balance of Existing Notes. "Excess
Proceeds" will be an amount equal to (i) the difference between
$50.0 million and the Total Cash Consideration multiplied by (ii)
0.85.
Epiq is serving as the Information Agent, Solicitation Agent,
Exchange Agent, Subscription Agent, and Voting Agent in connection
with the Exchange Offer and the related consent solicitation,
Rights Offering and plan solicitation. Questions concerning the
Exchange Offer and the related consent solicitation, Rights
Offering and plan solicitation or requests for additional copies of
the Offering Memorandum or other related documents may be directed
to Epiq at Tabulation@epiqglobal.com, with a reference to "Martin
Midstream" in the subject line. Eligible Holders who desire to
obtain and complete an Exchange Offer eligibility letter should
also contact the Exchange Agent at the email address above.
Consult your broker, dealer, commercial bank or trust company or
other nominee for assistance on how to tender your Existing Notes
and related consents.
Neither the Issuers nor any other person makes any recommendation
as to whether holders should tender their Existing Notes in the
Exchange Offer or provide the consent to the Proposed Amendments in
the consent solicitation, and no one has been authorized to make
such a recommendation. Eligible Holders of securities should read
carefully the Offering Memorandum before making an investment
decision to participate in the Exchange Offer. In addition,
Eligible Holders must make their own decisions as to whether to
tender their Existing Notes in the Exchange Offer and provide the
consent in the related consent solicitation, and if they so decide,
the principal amount of the Existing Notes to tender.
Cash Tender Offer
Pursuant to the terms of the Cash Tender Offer, the consideration
for each $1,000 principal amount of the Existing Notes validly
tendered after the Early Participation Date and accepted by us for
purchase by Other Holders pursuant to the Cash Tender Offer will be
$600. Other Holders who validly tendered and did not validly
withdraw their Existing Notes and their consents on or prior to the
Early Participation Date will receive total consideration of $650
for each $1,000 principal amount of the Existing Notes validly
tendered and accepted by us for purchase pursuant to the Cash
Tender Offer. Each Other Holder will also receive accrued and
unpaid interest on its Existing Notes from Feb. 15, 2020 up to, but
not including, the Settlement Date for all of its Existing Notes
validly tendered and accepted by us for purchase pursuant to the
Cash Tender Offer. Other Holders' rights to validly withdraw
tendered Existing Notes and validly delivered consents expired on
the Early Participation Date. Accordingly, tendered Existing Notes
in the Cash Tender Offer may no longer be withdrawn (except in the
limited circumstances described in the Offer to Purchase).
Holders of Existing Notes that are not QIBs, not Institutional
Accredited Investors and not Non-U.S. Persons are eligible to
participate in the Cash Tender Offer. Eligible Holders are not
Other Holders, and therefore not eligible to participate in the
Cash Tender Offer. The Cash Tender Offer is made only by, and
pursuant to, the terms set forth in the Offer to Purchase. Other
Holders of Existing Notes may also contact their brokers, dealers,
commercial banks or trust companies for assistance concerning the
Cash Tender Offer and related consent solicitation. Epiq will act
as the Depositary and Information Agent for the Cash Tender Offer
and related consent solicitation. Questions regarding the terms of
the Cash Tender Offer and related consent solicitation may also be
directed to the Depositary and Information Agent. Requests for
additional copies of documentation related to the Cash Tender Offer
and related consent solicitation, requests for copies of the
Existing Notes Indenture and any questions or requests for
assistance in tendering may be directed to the Depositary and
Information Agent at Tabulation@epiqglobal.com, with a reference to
"Martin Midstream" in the subject line. Other Holders who desire to
obtain and complete a Cash Tender Offer eligibility letter should
also contact the Depositary and Information Agent at the email
address above.
About Martin Midstream
Martin Midstream Partners L.P. is a publicly traded limited
partnership with a diverse set of operations focused primarily in
the United States Gulf Coast region. The Partnership's primary
business lines include: (1) terminalling, processing, storage, and
packaging services for petroleum products and by-products; (2) land
and marine transportation services for petroleum products and
by-products, chemicals, and specialty products; (3) sulfur and
sulfur-based products processing, manufacturing, marketing and
distribution; and (4) natural gas liquids marketing, distribution
and transportation services.
Martin Midstream reported a net loss of $174.95 million for the
year ended Dec. 31, 2019, compared to net income of $55.66 million
for the year ended Dec. 31, 2018. As of March 31, 2020, the
Company had $612.20 million in total assets, $641.70 million in
total liabilities, and a total partners' capital of $29.50
million.
* * *
In March 2020, Moody's Investors Service downgraded Martin
Midstream Partners L.P.'s Corporate Family Rating to Caa3 from B3.
"MMLP's rating downgrade reflect increased debt refinancing risks
and elevated risk of default, including from a distressed
exchange," said Jonathan Teitel, Moody's Analyst.
S&P Global Ratings lowered its issuer credit rating on Martin
Midstream Partners L.P. (Martin) to 'CCC-' from 'B-' as the company
faces large upcoming debt maturities of about $575 million in the
next 12 months, as reported by the TCR on March 25, 2020.
MASHANTUCKET (WESTERN) PEQUOT: S&P Raises Term Loan Rating to CCC-
------------------------------------------------------------------
S&P Global Ratings raised its issue-level rating on Mashantucket
(Western) Pequot Tribe's term loan to 'CCC-' from 'D', reflecting
its view that there is a high probability of some form of
restructuring within the next six months. The issuer credit rating
on the entity remains 'SD'.
S&P raised its issue-level rating on the Mashantucket (Western)
Pequot Tribe's term loan B to 'CCC-' from 'D'. The 'CCC-'
issue-level rating reflects our view that some form of
restructuring appears to be inevitable within six months, absent
unanticipated significantly favorable changes in the Tribe's
circumstances.
"We view the Tribe's liquidity as weak because there is a material
deficit within the next six months given the term loan now matures
Dec. 31, 2020," S&P said.
"Furthermore, the Tribe's capital structure is highly leveraged and
its operating performance has been weak in recent periods as a
result of increased competition in its market. This was further
exacerbated by the casino's closure from mid-March to June as a
result of the COVID-19 pandemic," the rating agency said.
S&P's issuer credit rating on the Tribe remains 'SD' (selective
default) because the Tribe has been unable to make full and timely
debt service payments to its junior debtholders following the
receipt of a blocking notice from its senior lenders.
MONAKER GROUP: Prices $2 Million Registered Direct Offering
-----------------------------------------------------------
Monaker Group, Inc., has entered into a securities purchase
agreement with an institutional investor for the issuance and sale
of 1,000,000 shares of its common stock at a price of $2.00 per
share, for aggregate gross proceeds of approximately $2.0 million,
in a registered direct offering. Kingswood Capital Markets, a
division of Benchmark Investments, Inc., is acting as placement
agent for the offering.
The offering is expected to close on or about July 27, 2020,
subject to the satisfaction of customary closing conditions.
The offering is being made pursuant to an effective shelf
registration statement on Form S-3 (File No. 333-224309) previously
filed and declared effective by the Securities and Exchange
Commission, and declared effective on July 2, 2018. The offering
of the shares of common stock will be made only by means of a
prospectus, including a prospectus supplement, forming a part of
the effective registration statement, describing the terms of the
proposed offering, which will be filed with the SEC. The Company
will also file a Form 8-K in connection with the securities
purchase agreement and the closing of the offering.
When available, copies of the prospectus supplement relating to
this registered direct offering, together with the accompanying
prospectus, can be obtained at the SEC's website at www.sec.gov or
from Kingswood Capital Markets, a division of Benchmark Investments
Inc., 17 Battery Place, New York, NY 10004, Attention: Syndicate
Department, or via email at syndicate@kingswoodcm.com or telephone
at (212) 404-7002. Before investing in this offering, interested
parties should read in their entirety the prospectus supplement and
the accompanying prospectus and the other documents that the
Company has filed with the SEC that are incorporated by reference
in such prospectus supplement and the accompanying prospectus,
which provide more information about the Company and such
offering.
About Monaker Group
Headquartered in Weston, Florida, Monaker Group, Inc. --
http://www.monakergroup.com/-- is a technology-driven company
focused on delivering innovation to the alternative lodging rental
(ALR) market. The proprietary Monaker Booking (MBE) provides
access to more than 3.2 million instantly bookable vacation rental
homes, villas, chalets, apartments, condos, resort residences, and
castles. MBE offers travel distributors and agencies an industry
first: a customizable, instant-booking platform for alternative
lodging rental.
Monaker Group reported a net loss of $9.45 million for the year
ended Feb. 29, 2020. As of May 31, 2020, the Company had $9.13
million in total assets, $4.89 million in total liabilities, and
$4.24 million in total stockholders' equity.
Thayer O'Neal Company, LLC, in Sugar Land, Texas, the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated May 29, 2020, citing that the Company has an
accumulated deficit and limited financial resources. This raises
substantial doubt about its ability to continue as a going concern.
NEOVASC INC: Partially Prepays Convertible Debenture
----------------------------------------------------
Neovasc Inc. reports that Strul Medical Group LLC exercised
1,424,049 of the 2,573,959 common share purchase warrants issued
pursuant to a Securities Purchase Agreement dated May 26, 2020 at
an exercise price of US$2.634 per May Warrant for aggregate
exercise proceeds to the Company of US$3,750,945.
Using the Exercise Proceeds, the Company has prepaid a portion of
the convertible debenture in the aggregate principal amount of
US$11,500,000 issued to SMG pursuant to a private placement on May
13, 2019. The total aggregate amount of the Exercise Proceeds has
been applied to the prepayment of the Note whereby US$3,613,341 has
been applied to the principal of the Note, US$72,266 has been paid
as a prepayment penalty pursuant to the terms of the Note and
US$65,337 has been paid in accrued interest. In connection with
the prepayment of the Note, the Company also issued to SMG 481,778
common share purchase warrants at an exercise price of US$7.50 per
Repayment Warrant in accordance with the terms of the Note.
The number of issued and outstanding shares of the Company
following the transactions above is 17,613,355 and the unchanged
fully diluted share count remains 29,207,819.
"Once again we are pleased that SMG has demonstrated strong support
for the Company, taking this voluntary step to reduce the Company's
annual interest charges by approximately $360,000 per year on a go
forward basis without any increase in our fully diluted share count
or any impact to our current cash position," commented Fred Colen,
president and chief executive officer of Neovasc.
About Neovasc Inc.
Neovasc -- http://www.neovasc.com/-- is a specialty medical device
company that develops, manufactures and markets products for the
rapidly growing cardiovascular marketplace. Its products include
the Reducer, for the treatment of refractory angina, which is not
currently commercially available in the United States (2 U.S.
patients have been treated under Compassionate Use) and has been
commercially available in Europe since 2015, and Tiara, for the
transcatheter treatment of mitral valve disease, which is currently
under clinical investigation in the United States, Canada, Israel
and Europe.
Neovasc recorded a net loss of $35.13 million for the year ended
Dec. 31, 2019, compared to a net loss of $107.98 million for the
year ended Dec. 31, 2018. As at Dec. 31, 2019, the Company had
$10.10 million in total assets, $24.55 million in total
liabilities, and a total deficit of $14.44 million.
Grant Thornton LLP, in Vancouver, Canada, the Company's auditor
since 2002, issued a "going concern" qualification in its report
dated March 30, 2020 citing that the Company incurred a
comprehensive loss of $33,618,494 during the year ended Dec. 31,
2019, and as of that date, the Company's liabilities exceeded its
assets by $14,445,765. These conditions, along with other matters,
raise substantial doubt about the Company's ability to continue as
a going concern.
NEW COTAI: Court Approves Disclosure Statement
----------------------------------------------
Judge Robert D. Drain has ordered that the Disclosure Statement of
New Cotai Holdings, LLC, et al. is approved.
The following dates are hereby established with respect to the
solicitation of votes on the Plan, filing objections to the Plan,
and confirmation of the Plan (all times prevailing Eastern Time):
Solicitation Deadline: Five business days after entry of Disclosure
Statement Order (expected to be June 19, 2020) or as soon as
reasonably practicable thereafter.
Publication Deadline: June 19, 2020 or as soon as reasonably
practicable thereafter.
Voting Deadline: July 17, 2020 at 4:00 p.m.
Plan Objection Deadline: July 17, 2020 at 4:00 p.m.
Deadline to File Voting Report: Seven days prior to the
Confirmation Hearing (expected to be July 23, 2020 at 4:00 p.m.).
Plan Objection Response Deadline: July 28, 2020 at 4:00 p.m.
Confirmation Hearing Date: July 30, 2020 at 2:00 p.m.
The Ballots are approved.
Settlement-Based Plan
New Cotai Holdings, LLC, et al., submitted a Disclosure Statement.
The Plan is the result of a settlement reached among the Debtors
and key parties in interest holding more than 99% of the Debtors'
prepetition debt, and provides for an equitable distribution of
recoveries to the Debtors' creditors and equity holders.
Class 3 Notes Claims. This class is impaired with estimated amount
of Allowed Notes Claims of $856,406,455. In accordance with the
Plan Support Agreement, holders of Allowed Notes Claims shall
receive their Pro Rata portion of the 97.0% of the New Common
Units, subject to dilution by the Upfront Exit Commitment Payment
and the Put Option Premium.
Class 4 General Unsecured Claims. This class is impaired with
estimated amount of Allowed General Unsecured Claims of
$250,711.01. Holders of Allowed General Unsecured Claims will
receive a distribution in Cash in an amount equal to 90%6 of their
Allowed General Unsecured Claims; provided, however, that to the
extent that the total Allowed amount of General Unsecured Claims
exceeds $250,000, the distributions to each holder of an Allowed
General Unsecured Claim shall be reduced on a Pro Rata basis such
that the aggregate amount of distributions made to holders of
Allowed General Unsecured Claims does not exceed $225,000 (i.e.,
90% of $250,000).
Class 5 Intercompany Claims. This class is unimpaired / impaired.
Intercompany Claims will be (A) reinstated; (B) cancelled; or (C)
otherwise settled.
Class 6 Existing New Cotai Interests. This class is impaired. In
accordance with the Plan Support Agreement, holders of an Existing
New Cotai Interest shall receive their Pro Rata portion of 3.0% of
the New Common Units, subject to dilution by the Upfront Exit
Commitment Payment and the Put Option Premium.
Pursuant to the Plan, the Debtors will use proceeds from the Exit
Facility and cash on hand to fund Plan payments and distributions
that are payable in cash.
A full-text copy of the Disclosure Statement dated June 15, 2020,
is available at https://tinyurl.com/ya25awjz from PacerMonitor.com
at no charge.
Counsel for Debtors and Debtors in Possession:
Mark A. McDermott
Evan A. Hill
Bram A. Strochlic
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
One Manhattan West
New York, New York 10001
Telephone: (212) 735-3000
Fax: (212) 735-2000
About New Cotai Holdings
New Cotai Holdings, LLC, and certain of its affiliates were formed
for the purpose of investing in what is now Studio City
International Holdings Limited. Studio City International, together
with its subsidiaries, owns the Studio City project, an integrated
resort comprising entertainment, retail, hotel and gaming
facilities located in the Macau Special Administrative Region of
the People's Republic of China. Affiliates of investment funds
managed by Silver Point Capital, L.P. own a direct or indirect
controlling interest in each of the Debtors. The Debtors have no
employees.
New Cotai Holdings and four affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No.19-22911) on May 1, 2019. The petitions were signed by David
Reganato, authorized signatory. The cases are assigned to Judge
Robert D. Drain. At the time of filing, New Cotai was estimated to
have $100 million to $500 million in assets and $500 million to $1
billion in liabilities.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP, as
counsel; Houlihan Lokey Capital, Inc., as financial advisor; and
Prime Clerk LLC, as noticing, claims and balloting agent.
NEW COTAI: July 30 Plan Confirmation Hearing Set
------------------------------------------------
A telephonic hearing will commence on July 30, 2020 at 2:00 p.m.
(Eastern Time) before the Honorable Robert D. Drain, United States
Bankruptcy Judge for the Southern District of New York, 300
Quarropas Street, White Plains, New York 10601-4140 to consider the
confirmation of the Plan filed by New Cotai Holdings, LLC, et al.
All objections to the relief sought at the Confirmation Hearing
must be filed and served upon the following parties so as to be
actually received on or before July 17, 2020 at 4:00 p.m.,
prevailing Eastern Time.
The deadline for voting on the Plan is on July 17, 2020 at 4:00
p.m., prevailing Eastern Time.
The Debtors will file the Plan Supplement (as defined in the Plan)
on or before July 10, 2020.
Counsel to Debtors:
Mark A. McDermott
Evan A. Hill
Bram A. Strochlic
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
One Manhattan West
New York, New York 10001
Telephone: (212) 735-3000
Fax: (212) 735-2000
About New Cotai Holdings
New Cotai Holdings, LLC, and certain of its affiliates were formed
for the purpose of investing in what is now Studio City
International Holdings Limited. Studio City International,
together with its subsidiaries, owns the Studio City project, an
integrated resort comprising entertainment, retail, hotel and
gaming facilities located in the Macau Special Administrative
Region of the People's Republic of China. Affiliates of investment
funds managed by Silver Point Capital, L.P., own a direct or
indirect controlling interest in each of the Debtors. The Debtors
have no employees.
New Cotai Holdings and four affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No.19-22911) on May 1, 2019. The petitions were signed by David
Reganato, authorized signatory. The cases are assigned to Judge
Robert D. Drain. At the time of filing, New Cotai was estimated to
have $100 million to $500 million in assets and $500 million to $1
billion in liabilities.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP, as
counsel; Houlihan Lokey Capital, Inc., as financial advisor; and
Prime Clerk LLC, as noticing, claims and balloting agent.
OCCASION BRANDS: July 30 Deadline Set for Committee Questionnaires
------------------------------------------------------------------
The U.S. Trustee is soliciting creditor interest in serving on
committees in the bankruptcy case of Occasion Brands, LLC.
The committee formation meeting will not be held in person. If a
party wishes to be considered for membership on any official
committee that is appointed, it must complete a required
Questionnaire and return it to the Office of the United States
Trustee no later than 12:00 p.m. (EST), on July 30, 2020 by email
to USTPRegion02.NYECF@usdoj.gov.
A representative from the U.S. Trustee's Office will contact all
creditors submitting a questionnaire to arrange for a telephonic
interview.
About Occasion Brands
Founded in 1998, Occasion Brands, LLC --
https://www.occasionbrands.com -- is a family of e-commerce
websites that focuses on prom, homecoming, bridal, and other
special occasion events. The Debtor is a pure-play e-commerce
platform for prom dresses and operates its business through three
web properties: promgirl.com, simplydresses.com, and
KleinfeldBridalParty.com.r teen events.
Occasion Brands, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. N.Y., Case No. 20-11684) on July 22,
2020. The petition was signed by Robert Nolan, chief
restructuring officer.
The Debtor estimated assets of $1 million to $10 million and
liabilities of $10 million to $50 million.
S. Jason Teele, Esq. and Daniel J. Harris, Esq., of Sills Cummins &
Gross P.C. serves as the Debtor's counsel. Insight Partners, LLC
is the Debtor's Restructuring Advisor and Omni Agent Solutions is
the claims and noticing agent.
P&L DEVELOPMENT: Moody's Cuts CFR to B3, Outlook Stable
-------------------------------------------------------
Moody's Investors Service downgraded P&L Development, LLC's
Corporate Family Rating to B3 from B2 and its Probability of
Default rating to B3-PD from B2-PD. At the same time, Moody's
downgraded the rating on PLD's senior secured first lien term loan
to B3 from B2. The rating outlook is stable.
The downgrade reflects PLD's high financial leverage of 10.1x
(including $84 million of the puttable preferred stock as debt)
following the company's weaker than anticipated sales and earnings.
As a result, leverage has not declined as expected following the
debt financed acquisition of the Teva nicotine replacement therapy
and over-the-counter product portfolio in June 2019. Earnings were
negatively impacted by customer push backs on a number of key
product launches, an intensely competitive OTC product landscape,
and PLD's SKU product rationalization. The U.S. Food and Drug
Administration also took longer than expected to approve a number
of abbreviated new drug applications that also led to product
launch delays. Moody's projects leverage will decline over the next
year but will remain more consistent with expectations for the
lower rating given the company's operating profile. Free cash flow
is also weak, which has weakened liquidity through meaningful
revolver usage and tightening cushion under the term loan leverage
covenant, which has sizable step downs over the next 18 months.
Moody's downgraded the following ratings:
P&L Development, LLC
Corporate Family Rating to B3 from B2
Probability of Default to B3-PD from B2-PD
Senior Secured First Lien Term Loan to B3 (LGD4) from B2 (LGD4)
The outlook is stable.
RATINGS RATIONALE
PLD's B3 CFR reflects the company's high financial leverage of
about 10.1x. The rating also reflects the company's more moderate
scale, with revenues of about $415 million, as compared to other
larger and better capitalized competitors. PLD has limited
geographic diversity, with the majority of its revenues derived
from US markets, where the competitive landscape for store brand
over-the-counter products is intense. Partially offsetting these
risks are PLD's attractive growth prospects for nicotine
replacement therapy products and other OTC marketed products in an
environment where health care costs will continue to be a focus for
consumers as they attempt to fight the coronavirus.
PLD is addressing its operating issues and Moody's estimates that
PLD's leverage will improve over the next year through EBITDA
growth. Earnings growth will benefit from the company's expanded
marketed products, examples of which includes new offerings from
NRT and Docosonal. In addition, the coronavirus pandemic is having
a positive impact on certain of PLD's products such as Mucus Relief
and ibuprofen that are experiencing higher volumes. New customer
wins such as a contract to fill over 50 million bottles of Purell
over the next 12 months for Gojo industries will also contribute to
higher earnings. The company's OTC business will also benefit from
higher demand for isopropyl alcohol, analgesics and cough and cold
products over the next 12 months because consumers are focused on
cleanliness and health. Further, demand for cheaper, store-brand
products, tends to increase in economic downturns versus national
brands when consumers become more cost conscious.
PLD will have adequate liquidity in the year ahead supported by
minimal balance sheet cash and modest free cash flow that will
slightly exceed the $4.8 million of required annual term loan
amortization. If PLD doesn't meaningfully improve its operating
performance, free cash flow will be squeezed as the company's term
loan amortization steps up in the third quarter ending September
2020.
Moody's regards the coronavirus outbreak as a social risk under
Moody's ESG framework, given the substantial implications for
public health and safety. The rapid spread of the coronavirus
outbreak, deteriorating global economic outlook, low oil prices,
and high asset price volatility have created an unprecedented
credit shock across a range of sectors and regions. 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 PLD's credit profile, including its
exposure to multiple affected U.S. states have left it vulnerable
to shifts in market demand and sentiment in these unprecedented
operating conditions. PLD is nevertheless benefiting from increased
consumer demand for products that support cleanliness and health.
Financial policies are aggressive including high leverage and debt
used for acquisitions. However, Moody's believes the company has a
long-term investment focus under majority family ownership.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's view that product launches and
new customer wins will improve earnings and reduce leverage over
the next 12 months. The stable outlook also reflects Moody's
expectation that PLD will generate sufficient free cash flow to
meet required term loan amortization and begin to repay revolver
borrowings.
PLD's ratings could be downgraded if the company experiences
significant operational disruption, if financial performance does
not meaningfully improve, or if free cash flow remains weak or
negative. The ratings could also be downgraded if the company's
financial policy becomes increasingly aggressive, including
additional debt funded acquisitions. Moody's could also downgrade
ratings if PLD's liquidity deteriorates or if the company is unable
to reduce and sustain debt to EBITDA (including puttable preferred
stock) below 7.5x over the next year.
The rating could be upgraded if PLD effectively manages its growth
strategy, meaningfully improves operating performance and generates
comfortably positive free cash flow. An upgrade would also require
debt to EBITDA (including the puttable preferred stock) be
sustained below 6.5x.
The principal methodology used in these ratings was Consumer
Packaged Goods Methodology published in February 2020.
Headquartered in Westbury, NY, PLD manufactures, packages and
distributes over-the-counter private label products across multiple
categories. The company provides contract manufacturing and
contract packaging services to major OTC and nutritional companies
in the United States. PLD is majority owned by the Singer family
with Steven Inc., a long-term equity holder of PLD, as a minority
shareholder. The company generates annual revenues of about $415
million.
PARTY CITY: Moody's Rates New $190MM First Lien Notes Due 2025 Caa2
-------------------------------------------------------------------
Moody's Investors Service took a number of rating actions on Party
City Holdings Inc., all of which reflect the anticipated closing of
the company's previously announced debt exchange as outlined in the
Transaction Support Agreement[1] entered into with holders of the
company's existing $350 million (due 2023) and $500 million (due
2026) senior unsecured notes.
Moody's assigned a Caa2 rating to Party City Holdings Inc.'s
proposed $190 million first lien floating rate notes due 2025;
upgraded the company's probability of default rating to Caa1-PD/LD
from Ca-PD, affirmed the company Caa1 Corporate Family rating,
affirmed the Ca senior unsecured rating and downgraded the senior
secured bank facility to Caa2 from Caa1. The speculative grade
liquidity rating is SGL-3. The rating outlook was changed to stable
from negative reflecting the significant drop in debt, and Moody's
view the company will address its 2022 term loan maturity in the
near term.
Pursuant to the TSA existing holders will receive:
1) common shares of Party City representing 19.9% of common shares
outstanding;
2) $100 million of new 10% second lien notes due 2026 issued by a
newly formed limited liability company (wholly owned by Party City)
and Anagram International, Inc.; and,
3) $190 million of floating rate first lien notes due 2025 to be
issued by Party City and share the same collateral as the existing
bank term loan lenders. The exchange offer commenced in June and is
expected to close on or about July 30, 2020; as of July 27, 2020,
84.7% of existing noteholders have agreed to the exchange.
Despite the net reduction in consolidated debt (approximately $320
million) and interest cost savings, the downgrade of the senior
secured term loan reflects the elimination of the majority of the
company's existing unsecured notes (approximately 50% of total
debt) that provided loss absorption for the term loan as well as
the proposed addition of more secured debt in the consolidated
capital structure.
Party City will designate the newly formed limited liability
company and Anagram International Inc. which holds the company's
metallic balloon business as an unrestricted subsidiary, thereby
removing the asset from the existing restricted group. Anagram
accounted for approximately 6% and 9% of Party City's consolidated
2019 revenues and EBITDA, respectively. The newly formed limited
liability company and Anagram International will also issue new
money first lien notes aggregating $100 million due 2026 for
payment of a special dividend to Party City to bolster its
liquidity position. Moody's rating reflects the consolidated
operations.
Downgrades:
Issuer: Party City Holdings Inc.
Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD4) from
Caa1 (LGD3)
Upgrades:
Issuer: Party City Holdings Inc.
Probability of Default Rating, Upgraded to Caa1-PD/LD from Ca-PD
Assignments:
Issuer: Party City Holdings Inc.
Senior Secured 1st Lien Regular Bond/Debenture, Assigned Caa2
(LGD4)
Affirmations:
Issuer: Party City Holdings Inc.
Corporate Family Rating, Affirmed Caa1
Senior Unsecured Regular Bond/Debenture, Affirmed Ca (LGD6 from
LGD5)
Outlook Actions:
Issuer: Party City Holdings Inc.
Outlook, Changed to Stable from Negative
RATINGS RATIONALE
Party City's Caa1 corporate family rating reflects the reduction in
consolidated funded debt and a $17.4 million reduction in
consolidated interest expense, inclusive of the unrestricted
subsidiary, Anagram. Pro-forma (as of LTM March 31, 2020) Moody's
adjusted consolidated debt/EBITDA is estimated to drop to around
6.0x from 6.9x and EBIT/interest to improve to 1.5 from 1.3. The
improvement in credit metrics and liquidity from lower interest
expense and new money puts the company in a better position to
refinance its term loan due August 19, 2022. However, due to the
impact of store closures caused by COVID-19 debt/EBITDA will spike
in 2020 -- above 8.0x.
Party City Holdings Inc. is constrained by weakened operating
performance prior to the pandemic including increased competition,
elevated helium prices, and tariffs that took a significant toll on
margins in 2019. Credit metrics will deteriorate, despite the
exchange offer, in 2020 due to lower EBITDA resulting from COVID-19
store closures. Moody's estimates revenue and earnings will recover
in 2021 with Moody's adjusted leverage improving to between 5x-5.5x
assuming the proposed transaction closes and the company's EBITDA
recovers to around 90% of 2019 levels. Party City is exposed to
changing demographic and societal trends, including the shift of
consumers purchasing goods and accessories online. The rating is
supported by Party City's strong market presence in both retail and
wholesale, geographic diversification, and historically more stable
party goods and accessories segment.
The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The Non-food
retail sector will be one of the sectors most significantly
affected by the shock given its sensitivity to consumer demand and
sentiment. More specifically, the weaknesses in the credit profile
of Party City, including their exposure to store closures and
discretionary consumer spending have left them vulnerable to shifts
in market sentiment in these unprecedented operating conditions and
the companies 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 stable outlook reflects Moody's expectation the company will
address its 2022 term loan maturity in the near term.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded once the impact of coronavirus has abated
and operating performance has improved such that debt/ EBITDA is
sustained below 6.5x and EBITA/interest expense approached 1.0x. An
upgrade would also require the company to address its refinancing
needs.
The ratings could be downgraded if the ramp up of store re-openings
stalls or if the probability of default increases for any reason.
Quantitatively, ratings could be downgraded if debt/EBITDA is
sustained above 7.25x or EBIT/interest declines to .5x.
Party City Holdings Inc. is a designer, manufacturer, distributor
and retailer of party goods and related accessories. The company's
retail brands principally include Party City and Halloween City.
Total revenue is approximately $2.3 billion.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
PARTY CITY: S&P Cuts ICR to 'SD' on Completed Distressed Exchange
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Elmsford,
N.Y.-based party goods retailer and wholesaler Party City Holdings
Inc. to 'SD' (selective default) from 'CC' and its issue-level
rating on the company's senior unsecured notes to 'D' from 'CC'.
S&P also lowered its issue-level rating on the company's senior
secured term loan to 'CCC' from 'B-' and revised its recovery
rating to '4' from '2'.
At the same time, S&P assigned its 'CCC' issue-level rating and '4'
recovery rating to the company's new $162 million first-lien issuer
exchange notes. The '4' recovery rating indicates S&P's expectation
for average (30%-50%; rounded estimate: 45%) recovery in the event
of a payment default.
The downgrade follows the completion of Party City's exchange
offer, under which it offered its lenders $117.65 of new
second-lien Anagram notes, $217.65 of new first-lien Party City
notes, and a pro rata share of 19.9% of Party City common stock for
every $1,000 of its outstanding senior unsecured notes they
exchanged. This provided its lenders with roughly 33.5% of the par
value they exchanged, which is substantially less than par. Because
of this, S&P views the transaction as a distressed exchange and
tantamount to a default on the senior unsecured notes.
In conjunction with the transaction, Party City designated its
Anagram International subsidiary (a designer, manufacturer, and
marketer of metallic helium balloons) as an unrestricted
subsidiary. This allowed the company to raise $110 million of new
money and exchange new notes for its existing notes, both of which
are secured by the unrestricted assets of the subsidiary. Party
City will continue to own 100% of Anagram following the
transaction.
"While Anagram is no longer a part of the Party City creditors
restricted group following the transaction, we still incorporate it
in our assessment of the group's overall credit quality because we
believe Party City would likely support Anagram's operations given
its strategic importance to the group's overall strategy. We do not
rate the new Anagram debt," S&P said.
84.7% of the company's lenders participated in the offer, which
enabled it to exchange roughly $720 million of Party City senior
unsecured notes for $162 million of Party City first-lien notes and
$85 million of second-lien Anagram notes. This reduced the amount
of debt secured by Party City's assets by $583 million and shrank
the company's total consolidated debt (secured by both Anagram and
Party City's assets) by $473 million.
S&P's 'CCC' issue-level rating on the senior secured debt (now
comprising the first-lien term loan and $162 million of first-lien
exchange notes) reflects its expectation that it will raise its
issuer credit rating on Party City to 'CCC' from 'SD' in the next
several days. This is based on S&P's view that the company's
capital structure remains unsustainable given the rating agency's
expectation for a continued weak operating performance coupled with
its fast approaching term loan maturity in August 2022, which the
rating agency believes poses material refinancing risk.
"In our view, the significant pressure on Party City's performance
stemming from the coronavirus pandemic, as well as its weak
performance in fiscal year 2019, caused its capital structure to
become unsustainable. Furthermore, we believe these factors led the
company to pursue the exchange offer to reduce its debt and
interest obligations," S&P said.
The rated debt facilities are guaranteed by Party City Holdings
Inc. through a restricted credit group structure that excludes the
Anagram operations. Party City is the ultimate parent of the group
and borrower of the debt facilities for the restricted group.
"While Anagram is not a part of the Party City creditors restricted
group following the transaction, we still incorporate it in our
assessment of the group's overall credit quality. This reflects our
view that Anagram is a strategically important subsidiary and our
belief Party City is committed to its operations and would likely
support Anagram if it required assistance. While we believe Anagram
is unlikely to be sold, we could see circumstances where Party City
would pursue a sale of the subsidiary," S&P said.
Environmental, social, and governance (ESG) factors relevant to
this rating action:
-- Health and safety
PIONEERS MEMORIAL: Fitch Cuts General Obligation Bonds to BB
------------------------------------------------------------
Fitch Ratings has downgraded Pioneers Memorial Healthcare District,
CA's various unlimited tax general obligation revenue bonds to 'BB'
from 'BBB-'. Fitch has also downgraded PMHD's Issuer Default Rating
to 'BB' from 'BBB-'. The rating action affects the series 2004 and
2012 GO bonds as well as the series 2017 revenue bonds issued by
PMHD.
Fitch is maintaining the Rating Watch Negative.
SECURITY
The series 2017 revenue bonds are secured by a gross revenue pledge
and further secured by a debt service reserve fund. The series 2012
and 2004 ULTGO bonds are payable from an unlimited ad valorem tax
pledge on all taxable properties within the district boundaries,
without limitation as to rate of amount.
ANALYTICAL CONCLUSION
The two-notch downgrade to the 'BB' rating reflects PMHD's
continued operating challenges leading up to the coronavirus
pandemic that has limited PMHD's overall financial flexibility. The
rating reflects the district's weakened balance sheet and liquidity
decline prior to the pandemic, although this has been offset in
2020 by recent stimulus funding from the CARES Act, in addition to
the long-term economic uncertainty, CFO turnover and insufficient
cash flow to address growing capital needs. Along with operating
expense pressures, the district continues to experience unexpected
declines in volumes in both inpatient and outpatient settings
leading to operating results that have been unfavorable to budget
expectations over the past couple of years. With the district
experiencing high volumes of virus-related cases and potentially
long-term strain on hospital resources, Fitch views PMHD as having
limited operational and financial flexibility over the near term.
The district's 'BB' IDR is based on the assessment of the PMHD's
credit profile as this is where the relevant operating risk for the
district lies.
Fitch expects that PMHD will be able to meet its bond covenant
requirements as of fiscal year-end 2020 (June 30) as stimulus
funding helped boost the district's days cash on hand metric and
debt service coverage. The district reported 73 DCOH and an
annualized DSC of 2.0x as of May 31, 2020 relative to its covenant
requirements of 50 DCOH and 1.2x DSC. Management indicated that
additional stimulus funding received in June and July is expected
to further bolster the district's cash levels. Beyond fiscal 2020
and without further support from state and federal resources, Fitch
views maintenance of the district's key metrics as a credit concern
given the uncertainties of the pandemic and its future impact on
the district. The downgrade and rating watch reflects the
district's limited financial resources and increased vulnerability
during a time of operational and economic stress.
The coronavirus outbreak and related government containment
measures worldwide has created an uncertain and currently negative
environment for the entire healthcare sector. 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 expectations for
future performance and assessment of key risks.
KEY RATING DRIVERS
Revenue Defensibility: 'bb'
Leading Market Share Offsets Weak Payor Mix
PMHD maintains a leading market position in its PSA. Ad valorem tax
revenues provide support for debt service payments on the GO bonds
only. Therefore, Fitch's position is that tax revenues do not
improve PMHD's revenue defensibility assessment given the very
limited contribution to operations and the lack of an available
taxing margin. The district is vulnerable to reimbursement risk due
to elevated exposures to Medicaid and self-pay.
Operating Risk: 'b'
Weak Operations Pre-Coronavirus
PMHD's operating risk profile assessment remained weak and
unfavorable to budget expectations leading up to the coronavirus
pandemic. The district's challenging operations combined with
elevated plant age and long-term capex requirements provides the
hospital with very limited operating flexibility, especially as the
district continues to experience operating pressures due to the
coronavirus surge in the area. Average age of plant was 21 years as
of fiscal 2019 with additional capital investments required in the
medium term in order to meet the state's seismic regulations.
Financial Profile: 'bb'
Stimulus Funds Temporarily Boost Balance Sheet Metrics
The district's financial profile assessment weakened prior to the
pandemic although improved through the 11-month interim as a result
of stimulus funding. Current key metrics remain adequate (including
ULTGO debt) through May 31, 2020 and Fitch anticipates the district
will be able to meet its bond covenant requirements for fiscal
2020. However, given the district's weak operating risk profile,
Fitch expects liquidity levels and capital-related metrics will
remain pressured over the near term.
ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS
Thera are no asymmetric risk considerations affecting the rating
determination.
RATING SENSITIVITIES
The Rating Watch Negative reflects the uncertainty surrounding the
pandemic and the possibility that it may introduce rapid volatility
on the district's operations, liquidity and local economy. Fitch
expects to resolve the RNW within six months.
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
-- A return to the Stable Outlook may be considered if operating
EBITDA margins of roughly 5% are sustainable in 2021 and later
periods;
-- An upgrade may be warranted if operating performance improves
to where operating EBITDA margins exceed 6% on a consistent basis;
-- If liquidity levels and cash to adjusted debt metric
significantly improves to levels that offset the risk associated
with the district's weak operating risk profile.
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
-- If liquidity levels and cash to adjusted debt metrics decline
below the levels anticipated for fiscal year-end 2021;
-- If the district fails to meet its DCOH and DSC covenant
requirements over the next 12 months (even if this does not trigger
an event of default);
-- If demographic trends weaken and unemployment rises resulting
in permanent weakening of the district's payor mix;
-- If operating EBITDA margins continue to linger below 3%;
-- Should economic conditions decline further than expected from
Fitch's current expectations for an economic contraction, or should
the district's infection rate continue and longer lockdown periods
across the parts of the country occur, Fitch would expect to see an
even larger GDP decline in 2020 and a weaker recovery in 2021.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure 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 PROFILE
The series 2017 revenue bonds are secured by a gross revenue pledge
and further secured by a debt service reserve fund. The series 2012
and 2004 ULTGO bonds are payable from an unlimited ad valorem tax
pledge on all taxable properties within the district boundaries,
without limitation as to rate of amount.
REVENUE DEFENSIBILITY
PMHD's payor mix is challenging reflecting elevated exposure to
governmental revenue sources and high reimbursement risk. Combined
Medicaid and self-pay represented 44.2% of gross revenues as of
fiscal 2019. Fitch expects Medicaid and self-pay levels will remain
high driven by the district's weak, although stable, demographics
and having to provide health care to a large indigent and
underinsured population.
Limited Taxing Margin; Supports GO Debt Service Only
Tax revenues of $3.1 million (approximately 2.4% of total revenues)
received in fiscal 2019 was applied largely to debt service
payments on the GO bonds. PMHD currently levies a tax rate of $0.04
per $100 assessed valuation as of the 2019 tax year. The general
tax rate of 1% of $100 AV is capped by California's Proposition 13.
The district does not have the ability to raise taxes above the
capped limit without taxpayer approval. Fitch does not view PMHD's
tax revenues as enhancing the district's revenue defensibility
assessment given the limited contribution to operations and the
lack of an available taxing margin.
The district's AV realized a 10-year CAGR of 1.9% and a five-year
CAGR of 2.2%. The top-10 taxpayers account for about 20% of the AV
and contribute to a moderate degree of tax-base volatility.
However, the ability to make debt service payments is unlikely to
be reduced by cyclical variations in the tax base due to the
unlimited nature of the tax levy supporting the GO bond debt
service, the growing tax base and relatively low level of the
current tax rate. Fitch considers the tax base very unlikely to
suffer losses that would meaningfully erode repayment capacity even
under relatively severe stress scenarios.
Partnerships Support Market Stability
PMHD's PSA boundary is made up of the northern portion of Imperial
County and reports a leading 37% market share (based on most recent
2018 data) within its PSA. El Centro Regional Medical Center is the
nearest competitor and is located about 15 miles south of PMHD.
The district maintains collaborative partnerships with physicians
and health care organizations in support of its mission to provide
leadership and quality healthcare to the residents of Imperial
County. PMHD provides specialized medical expertise to residents of
the city of Calexico, the site of its 2018 rural health clinic
expansion and renovation project. As an affiliate of Scripps
Health, PMHD receives consulting services, purchasing and branding
opportunities. Additionally, through an agreement with Rady
Children's Hospital and Health Center the district receives support
and expertise in the provision of pediatric and neonatal services.
The new Pioneers Children's Health Center in Brawly which opened in
April 2018 further expands the district's pediatric service lines.
Fitch expects PMHD's collaborative affiliations with Scripps Health
and Rady Children's Hospital and Health will continue to enhance
the district's service offerings and full continuum of care,
supporting market stability over the medium term.
Weak, But Stable Service Area Characteristics
Imperial County is the southeastern most county in California,
bordered by San Diego County to the west. PMHD's PSA includes the
incorporated cities and communities of Brawley, Calipatria,
Westmoreland, Niland and Salton City. Its economy is centered on
energy and agriculture and is realizing ongoing development across
the county. Estimated 2019 population in the Imperial County was
about 182,000 which reflect a 1.8% growth over the past five years.
Economic indicators are weak reflecting median household income
levels that trail behind state and national averages and the
county's above-average unemployment rate of 18.3%, partly as a
result of its large agricultural base. Major employers represent
sugar refining, gypsum products, government, healthcare, gaming and
retail industries. The district's payor mix is reflective of its
weak service area. Although its service area is weak relative to
state and national indicators and the current pandemic is
economically disruptive, Fitch does not foresee any significant
changes in the economy over the outlook period that would pose
material risk to the district's tax base.
OPERATING RISK
The district experienced higher utilization of agency nurses over
the last year that has contributed to expense pressures. Although
it is not unusual for hospitals and health care districts to
experience seasonal uptick in agency utilization, agency expenses
were extraordinarily high in fiscal 2019 exhibiting almost a 200%
increase from the prior year. Although the district added a number
of nursing positions through the interim period, the number of
clinical staff was insufficient to handle the surge volume of
coronavirus cases in the county. In May, the district was able to
receive further assistance from the National Guard, who deployed
clinical staff to the hospital to assist in the pandemic through
mid-July. Management has been working with a recruiting team and
anticipates using registries to fill future clinical gaps once
support personnel are discharged.
The coronavirus pandemic has made a significant impact on hospital
operations YTD with overall volume declines due to the ban on
noncritical procedures. Although noncritical procedures have
reopened since mid-June, the district continues to see low
utilization. The majority of inpatient volumes have been
coronavirus related cases with the hospital continuing to see a
surge in cases through July. Despite the premium cost for PPE, the
district remains adequate on PPE at this time. The district made
some initiatives in effort to trim down expenses for the current
fiscal year; however, Fitch expects the pandemic and current surge
will continue to strain operations over the short term.
In the first nine months of fiscal 2020 ended March 31, 2020, the
district posted operating losses of $4 million prior to the impact
from the pandemic. This was driven by low overall volumes coupled
with continued salary and wage pressures. However, inclusive of
about $10 million of stimulus funding received through May 31, 2020
(11-month interim results) the district generated a 3.7% operating
EBITDA margin and 4.3% EBITDA margin. Fitch expects operations will
be pressured into the first quarter of fiscal 2021 given the
current conditions of the virus in Brawley. With the stimulus
funding, Fitch expects the district to be able to meet its DSC
covenant for fiscal year 2020.
Long-Term Seismic-Related Capex Required
Fitch considered PMHD's plant age as very high combining the
district's average age of plant of 21 years and future capital
requirements to meet California hospital seismic safety
regulations. The district has spent on average about 172% of
depreciation over the past few years. The district recently
completed and opened a rural health clinic in Calexico in October
2019 and has a number of projects coming online, including a
cardiac catheterization lab and operating room expansion. PMHD's
main hospital building is not compliant with the state's seismic
requirements and will face significant longer-term capital needs in
order to comply by year 2030. Management is evaluating the size and
scope of required projects over the next couple of years and will
have more information over the medium term. Recent developments in
legislation could potentially provide relief for hospitals,
proposing alternative methods that are less costly in meeting the
state's requirements.
FINANCIAL PROFILE
Capital-related metrics have softened over the past year as a
result of delayed supplemental funding and operating pressures but
remain adequate. Unrestricted cash and investments declined by 5.7%
to $26.3 million as of fiscal 2019, measuring a 74 DCOH relative to
84 days the prior year. PMHD's 2019 adjusted debt of $32.6 million
included outstanding debt of $23.8 million (including $7.25 million
in ULTGO bonds) combined with operating lease expense based on
Fitch's 5x lease multiple. Cash to adjusted debt was 86.9% and net
adjusted debt to adjusted EBITDA (NADAE) was adequate at 1.0x.
The district's leverage metrics were weak prior to the receipt of
stimulus funding. Through the first 11 months of fiscal 2020,
stimulus funding helped boost the district's key metrics resulting
in 73 DCOH and 105% cash to adjusted debt as of May 31, 2020. Fitch
expects the district to meet its bond covenant requirements for
fiscal 2020.
Scenario Analysis Supports 'BB' Rating Category
Fitch's current baseline scenario analysis reflects both an
issuer-specific revenue stress and a portfolio sensitivity analysis
based on the district's investment portfolio asset allocation and
is consistent with Fitch's current expectations for economic
contraction. Fitch's scenario anticipates that the U.S. GDP will
contract sharply in 2020 followed by recovery in the next year as
hospital operations rebound. Fitch assumes that real GDP growth
will recover in 2021, reflecting a bounce-back. However, a
longer-lasting wave of the virus or longer economic impact would
result in a larger GDP decline and slower recovery in 2021.
Based on Fitch's GDP expectations, Fitch expects modest impact on
the districts investment portfolio as the district maintains a
conservative asset allocation with 61% of its investment portfolio
invested in cash and cash equivalents and the remaining invested in
fixed income. Fitch is of the opinion that key metrics will remain
challenged over the next couple of years as the potential for
sustained losses due to the uncertainty surrounding the coronavirus
pandemic remains a risk and operating EBITDA margin may remain
below 4% over the next couple of years. As such, Fitch expects the
district's key metrics to align more with the 'BB' category
expectations over the outlook period.
ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS
No asymmetric additional risk considerations were applied in this
rating determination. PMHD's debt structure is conservative with
100% fixed-rate debt. As of 2019, the ULTGO bonds represented 30.4%
of the district's outstanding debt with the remaining made up of
revenue bonds. There are no exposures to swap instruments and PMHD
does not have a defined benefit pension plan.
The district's CFO departed from the organization in April 2020.
PMHD currently has an interim CFO in place. Given the current
situation with the pandemic, search plans for a permanent CFO has
been placed on hold for the time being. The current CEO has been in
place since 2012 providing continuity at this time.
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).
PROFESSIONAL FINANCIAL: Case Summary & 32 Top Unsecured Creditors
-----------------------------------------------------------------
Debtor: Professional Financial Investors, Inc.
350 Ignacio Blvd.
Suite 300
Novato, CA 94949
Case No.: 20-30604
Business Description: Professional Financial Investors, Inc. is
engaged in activities related to real
estate.
Chapter 11 Petition Date: July 26, 2020
Court: United States Bankruptcy Court
Northern District of California
Judge: Hon. Dennis Montali
Debtor's Counsel: Ori Katz, Esq.
SHEPPARD MULLIN RICHTER & HAMPTON LLP
Four Embercadero Center, 17th Floor
San Francisco, CA 94111
Tel: (415) 774-9100
Email: okatz@sheppardmullin.com
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $100 million to $500 million
The petition was signed by Michael Hogan, chief restructuring
officer.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/f5eYl5
List of Debtor's 32 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. William Levine Loan $182,630
IRA Services TRAD #515012
2 Snowden Lane
Fairfax, CA 94930
2. Jones/Zahn 2018 Trust $156,452
[No address on file]
3. Joshua Berns Loan $118,391
2159 Cantalier
Sacramento, CA 95815
4. Trisha Waldron Loan $118,391
9 Gerstle Court
San Rafael, CA 94901
5. Peter A. Bagatelos and Loan $105,575
Anne M.H. Bagatelos Revocable Trust
105 Shooting Star Isle
Foster City, CA 94404
6. Molino Family Trust 2014 Loan $102,216
47 Thalia Street
Mill Valley, CA 94941
7. Alan W. Ziff Revocable Loan $96,366
Intervivos Trust
2349 Hilltop Court
Santa Rosa, CA 95404
8. Christopher Berns Loan $85,974
9321 168th Place NE
Redmond, WA 98052
9. Karen C. Bagatelos Loan $83,982
732 Chevery Street
San Francisco, CA 94131
10. Michael Bagatelos Loan $83,982
185 Topaz Way
San Francisco, CA 94131
11. Anne H. Rohrbach TTEE Loan $80,623
The Annie Rohrbach Revocable
Trust, dtd. May 26, 2010
2732 Houston Drive
Los Osos, CA 93402
12. Eugene Ziff Loan $72,065
2349 Hilltop Court
Santa Rosa, CA 95404
13. Elizabeth Moore Loan $71,034
IRA Services #726874
13 Baytree Lane
San Anselmo, CA 94960
14. John A. or Kathryn Trimble Loan $70,142
235 Main Burfordville Street
Burfordville, MO 63739
15. Kevin P. Shambrook and Loan $64,244
Frances H. Lerner Revocable Trust
2625 Brooks Ave.
El Cerrito, CA 94530
16. Claire Peaslee $64,244
[No address on file]
17. Lauren Vela $54,420
Pensco #VE056639
Magnolia Avenue
Larkspur, CA94939
18. Shane Black Loan $48,373
359 Wilson Way
Larkspur, CA 9493
19. Sharon L. Overbey Loan $47,390
Revocable Trust
P.O. Box 1114
Mt. Shasta, CA 96067
20. Javier Family Trust 2006 Loan $44,328
(Arthur & Laurie)
27 Olive Street
Novato, CA 94945
21. Kiah Bosy Loan $40,311
P.O. Box 921
Fairfax, CA 94978
22. H. Robert Noble Loan $40,311
60 Ora Way $203
San Francisco, CA 94131
23. Clyde S. Sada Living Trust Loan $40,311
460 Navaro Way
San Jose, CA 95134
24. Meridian Commercial Trade Debt $40,000
711 Grand Ave., Suite 290
San Rafael, CA 94901
25. Mindy Klein Loan $39,498
P.O. Box 801
Fairfax, CA 94978
26. Joel Rubenzahl Loan $38,546
IRA Services TRAD #7323453159
Lewiston Ave.
Berkeley, CA 94705
27. Robert N. Deross, Jr. Loan $34,812
5061 Tesoro Way
El Dorado Hills, CA 95760
28. Laura Kradjan-Cronin Loan $32,122
58 Club View Drive
Novato, CA 94949
29. Dominique Shelton Loan $28,920
P.O. Box 1849
Kihei, HI 9675
30. Mary Durst Trust Loan $26,778
313 Kensington Commons
Livermore, CA 94551
31. Suki & Russell Munsell Loan $26,788
524 San Anselmo Ave. #222
San Anselmo, CA 94960
32. Janet Rostad TTEE Loan $26,778
Janet Rostad Rovacble Trust
U/A 5/24/12
1090 Bell Marin Keys Blvd.
Novato, CA 94949-5335
REMINGTON OUTDOOR: Case Summary & 40 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Remington Outdoor Company, Inc.
100 Electronics Boulevard SW
Huntsville, AL 35824
Business Description: The Debtors are manufacturers of
firearms, ammunition and related
products for commercial, military, and
law enforcement customers throughout the
world. The Debtors operate seven
manufacturing facilities located across
the United States. The Debtors'
principal headquarters are located in
Huntsville, Alabama.
Chapter 11 Petition Date: July 27, 2020
Court: United States Bankruptcy Court
Northern District of Alabama
Thirteen affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Remington Outdoor Company, Inc. (2020) (Lead Debtor) 20-81688
FGI Holding Company, LLC 20-81689
FGI Operating Company, LLC 20-81690
Remington Arms Company, LLC 20-81692
Barnes Bullets, LLC 20-81691
TMRI, Inc. 20-81694
RA Brands, L.L.C. 20-81698
FGI Finance Inc. 20-81699
Remington Arms Distribution Company, LLC 20-81695
Huntsville Holdings LLC 20-81693
32E Productions, LLC 20-81696
Great Outdoors Holdco, LLC 20-81697
Outdoor Services, LLC 20-81700
Debtors'
General
Bankruptcy
Counsel: Stephen H. Warren, Esq.
Karen Rinehart, Esq.
O'MELVENY & MYERS LLP
400 South Hope Street
Los Angeles, CA 90071-2899
Tel: (213) 430-6000
Fax: (213) 430-6407
Email: swarren@omm.com
krinehart@omm.com
Debtors'
Local Counsel: Derek F. Meek, Esq.
Hanna Lahr, Esq.
BURR & FORMAN LLP
420 20th Street North, Suite 3400
Birmingham, AL 35203
Tel: (205) 251-3000
Fax: (205) 458-5100
Email: dmeek@burr.com
hlahr@burr.com
Advisor to
the Restructuring
Committee: AKIN GUMP STRAUSS HAUER & FELD LLP
Debtors'
Financial
Advisor: M-III ADVISORY PARTNERS, LP
Debtors'
Investment
Banker: DUCERA PARTNERS LLC
Debtors'
Notice,
Claims &
Balloting
Agent: PRIME CLERK LLC
https://cases.primeclerk.com/remingtonoutdoor
Estimated Assets
(on a consolidated basis): $100 million to $500 million
Estimated Liabilities
(on a consolidated basis): $100 million to $500 million
The petitions were signed by Ken D'Arcy, chief executive officer.
A copy of Remington Outdoor's petition is available for free at
PacerMonitor.com at:
https://is.gd/zwZ2io
Consolidated List of Debtors' 40 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Pension Benefit Guaranty Pension Undetermined
Corporation Liability
Office of the General Counsel
1200 K Street, N.W.
Washington, DC 20005-4026
Tel: 202-326-4020 X4638
Fax: 202-326-4112
Email: neureiter.kimberly@pbgc.com
2. State of Arkansas Development Undetermined
PO Box 3861 Agreement
Little Rock, AR 72203-3861
Jack Thomas, Project Manager
Business Development
Arkansas Economic Development
Commission
Tel: 501-413-9984
Fax: 501-682-7094
Email: jthomas@arkansas.gov
3. City of Huntsville Development Undetermined
112 Spragins Avenue Agreement
Huntsville, AL 35801
Tel: 866-478-8845
Fax: 256-883-3682
Email: sherri.coons@hsvutil.org
4. State of Alabama Development Undetermined
12 Water Street Agreement
Camden, AL 36726
Tel: 334-382-9914
Fax: 334-242-4993
5. State of Missouri Development Undetermined
400 North Capital ST NW #376 Agreement
Washington DC 20001
Sarah Warren, Incentive Specialist
Missouri Department of
Economic Development
Tel: 573-526-6708
Fax: 573-526-9810
Email: sarah.warren@ded.mo.gov
6. St. Marks Powder Trade $1,828,873
PO Box 603463
Charlotte, NC 28260-3463
Attn: Heather Swain
Tel: 850-577-2057
Fax: 850-577-2806
Email: heather.swain@gd-ots.com
7. Eco-Bat Indiana LLC Trade $1,682,382
PO Box 846010
Dallas, TX 75284-6010
Tel: 214-583-0336
Fax: 214-831-4013
Attn: Danny Guerra, Corporate
Credit Manager
Email: dguerra@rsrna.com
8. Dasan USA Inc. Trade $987,818
2400 Main Street NW
Duluth, GA 30097
Tel: 775-657-7053
Fax: 770-623-6723
Email: tim.shin@dasan-usa.com
9. Swanson Martin & Bell Professional $972,362
Attn: Andrew Lothson Services
330 North Wabash Ave Suite 3300
Chicago, IL 60611
Tel: 412-321-9100
Fax: 312-321-0990
Email: alothson@smbtrials.com
10. Art Guild Inc. Marketing $950,624
300 Wolf Drive Services
West Deptford, NJ 08086
Attn: Bernadette Sandone
A/R Manager
Tel: 856-853-7500
Fax: 856-686-4184
Email: bsandone@artguild.com
11. Alliant Techsystems Trade $866,737
Operations LLC
PO Box 734341
Chicago, IL 60673-4341
Tel: 800-276-9337
Fax: 540-639-8496
Email: gary.dugan@ngc.com
12. MSC Industrial Supply Co Trade $837,152
PO Box 953635
Saint Louis, MO 63195-3635
Janet Legette
Tel: 704-987-5679 X 125679
Fax: 516-812-2530
Email: legettej@mscdirect.com
13. Qiqihar Hawk Industries Co. Ltd. Trade $678,072
15 Nan Yuan Road
Qiqihar Heilongiang Province
China 161005
Tel: 86-186-0512-7427
Fax: 86-452-234-0633
Email: xyjtO452@aliyun.com
14. The Doe Run Company Trade $626,539
Attn: Deb Medley
75 Remittance Drive, Suite 2172
Chicago, IL 60675-2172
Tel: 314-453-7115
Fax: 314-453-7189
Email: ceo@doerun.com
15. Helio Precision Inc. $473,677
601 North Skokie Highway
Lake Bluff, IL 60044
Tel: 864-879-8100
Fax: 847-473-1306
Email: ar.rochester@hnprecision.com
16. SAP America Inc. Trade $472,524
PO Box 7780-824024
Philadelphia, PA 19182-4024
Attn: Michael Jon Del Rosario
Tel: 1-866-857-2621 x2
Fax: 336-548-8761
Email: michael.jon.del.rosario@sap.com
17. Die-Namic Inc. Trade $449,985
PO Box 30516
Lansing, MI 48909-8016
Attn: Robert Bologna
Tel: 734-710-3217
Fax: 734-710-3223
Email: robertbologna@dienamic.com
18. AM Castle & Co/Castle Metals Trade $448,323
11125 Metromont Parkway
Charlotte, NC 28269
Tel: 847-349-3851
Fax: 716-748-7788
Email: jkanute@amcastle.com
19. Kennametal Inc. Trade $438,111
307 23rd Street Ext Suite 950
Pittsburgh, PA 15215
Tel: 630-963-9194
Fax: 820-294-9871
Email: k-na.credit@kennametal.com/
diane.lisovich@kennametal.com
20. Decimet Sales Inc. Trade $378,332
Attn: Butch Anderson
14200 James Road
Rogers, MN 55374
Tel: 763-428-4321
Fax: 763-428-8285
Email: info@dsimn.com
21. All Trista Plastics LLC Trade $369,192
Lockbox #745397
PO Box 745397
Atlanta, GA 30384-5397
Tel: 864-879-8100
Fax: 417-873-2100
Email: dhiggins@jardenplastics.com
22. Brothers & Co Marketing $344,444
4860 South Lewis Services
Tulsa, OK 74105-5175
Tel: 918-743-8822
Fax: 918-742-9628
Email: linda.milligan@bonniercorp.com
23. Continental Traffic Service Inc. Trade $332,589
5100 Poplar Avenue - 15th Floor
Memphis, TN 38137
Allison Douglas
Tel: 888-836-5135 X7481
Fax: 901-766-1522
Email: allisond@ctsi-global.com
24. Chessgroup Trade $317,135
7010 Fly Road
East Syracuse, NY 13057
Tel: 315-200-1037
Fax: 315-432-0899
Email: admin@chessgroup.com
25. Amark Engineering & Mfg Inc. Trade $308,768
203 Main ST SW
Gravette, AR 72736
Tel: 479-787-5206
Fax: 479-878-6503
Email: lawanna@amarketing.com
26. Vista Outdoor Sales LLC Trade $281,016
PO Box 734147
Chicago, IL 60673-4147
Tel: 763-433-1000
Fax: 913-752-3571
Email: tracy.reddmann@vistaoutdoor.com
27. Producto Corporation Trade $256,961
2980 Turner Rd
Jamestown, NY 14701
Tel: 800-828-2216
Fax: 716-484-2235
Email: janderson@ringprecision.com
28. Dayton Lamina Corp Trade $245,432
PO Box 77000
Detroit, MI 48277-1830
Tel: 937-859-5111
Fax: 937-859-5353
Email: jde@daytonprogress.com
29. Safari Classics Production Trade $243,750
5206 McKinney Avenue, Suite 101
Dallas, TX 75205
Tel: 214-360-9599
Fax: 214-361-8789
Email: tdanklef@aol.com
30. General Dynamics Trade $240,349
55 Masson Street, CP 5520
Valleyfield, OC J6S 4VP
Canada
Attn: Suzie Taillefer
Tel: 450-377-7835
Fax: 450-377-7800
Email: suzie.taillefer@can.gd-ots.com
31. National Rifle Association Marketing $232,528
11250 Waples Mill Rd Services
Fairfax, VA 22030
Tel: 703-267-1659
Fax: 703-267-3800
Email: accountsreceivable@nrahq.org
32. G & R Manufacturing Trade $214,159
190 Sheridan Drive
Naugatuck, CT 6770
Tel: 203-729-2224
Fax: 203-729-3113
Email: lindsay@grmanufacturing.com
33. Day Pitney LLP Legal $209,695
1 Jefferson Road
Parsipanny, NJ 07054-2833
Tel: 860-275-0100
34. Nordic Components Inc. Trade $193,774
79 E 8th Street
Waconia, MN 55387
Tel: 952-442-8901
Fax: 952-442-8999
Email: norticcomp@gmail.com/
jarmo@nordicccom.com
35. Geodis Logistics LLC Trade $190,616
15604 Collection Center Drive
Chicago, IL 60693
Attn: Vivian Harris
A/R Manager
Tel: 615-880-4865
Fax: 615-377-3977
Email: vharris@ohl.com
36. Bushnell Inc. Trade $189,760
PO Box 734154
Chicago, IL 60673-4154
Tel: 913-752-3400
Fax: 913-752-3571
Email: tracy.reddemann@vistaourdoor.com
37. Oberg Industries Trade $189,423
2301 Silverville Road
Freeport, PA 19229-0315
Tel: 724-235-6101
Fax: 724-353-9755
Email: accounts.receivable@oberg.com
38. Village of Ilion Treasurer Tax $174,634
PO Box 4231
Utica, NY 13504-4231
Tel: 315-895-7449
Fax: 315-894-6050
Email: ilion@ilonny.com
39. Ohio Broach & Machine Co Trade $154,479
35264 Topps Ind Pkwy
Willoughby, OH 44094
Tel: 440-946-1040
Email: jlutz@ohiobroach.com
40. Westrock Converting Trade $150,974
PO Box 409813
Atlanta, GA 30384-9813
Attn: Roy Maye, Credit Manager
Tel: 678-291-7378
Fax: 256-734-1477
Email: roye.maye@westbrook.com
SABLE PERMIAN: Hires Katten as Counsel to Disinterested Managers
----------------------------------------------------------------
Sable Permian Resources, LLC, and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the Southern District
of Texas to employ Katten Muchin Rosenman LLP, as counsel to the
Debtors.
Sable Permian requires Katten to render legal services at the sole
direction of Robert Reeves, a disinterested manager of the Board of
Managers (the "LandCo Board") of Sable Land Company, LLC
("LandCo"), and Peter Kravitz and Richard Alario, disinterested
managers (together with Mr. Reeves, the "Disinterested Managers")
of the Board of Managers (the "SPR Finance Board", and together
with the LandCo Board, the "Boards") of Sable Permian Resources
Finance, LLC ("SPR Finance").
Katten will be paid at these hourly rates:
Partners $770 to $1,555
Of Counsel $895 to $1,475
Associates $460 to $970
Paraprofessionals $195 to $580
Katten will also be reimbursed for reasonable out-of-pocket
expenses incurred.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the
following is provided in response to the request for additional
information:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing
arrangements for this engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic
location of the bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and
material financial terms for the prepetition
engagement, including any adjustments during the 12
months prepetition. If your billing rates and
material financial terms have changed postpetition,
explain the difference and the reasons for the
difference.
Response: Since Katten's engagement by the Debtors at the
sole direction of the Disinterested Managers on
April 21, 2020, Katten has followed the hourly
billing rates.
Question: Has your client approved your prospective budget
and staffing plan, and, if so for what budget
period?
Response: Katten, in conjunction with the Disinterested
Managers, have developed a budget and staffing plan
for these Chapter 11 Cases for the period from the
Petition Date to and including October 31, 2020.
Steven J. Reisman, partner of Katten Muchin Rosenman LLP, assured
the Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
Katten can be reached at:
Steven J. Reisman, Esq.
KATTEN MUCHIN ROSENMAN LLP
575 Madison Avenue
New York, NY 10022
Tel: (212) 940-8800
E-mail: sreisman@katten.com
About Sable Permian Resources
Sable Permian Resources, LLC and its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 20-33193) on June 25, 2020. At the time of the filing, Sable
Permian Resources disclosed assets of between $1 billion and $10
billion and liabilities of the same range.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Latham & Watkins, LLP and Hunton Andrews Kurth,
LLP, as legal counsel; Alvarez & Marsal North America, LLC, as
financial advisor; and Evercore Group, LLC, as investment banker.
SCULPTOR CAPITAL: S&P Alters Outlook to Neg., Affirms 'BB-' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook on Sculptor Capital
Management Inc. to negative from stable after the company said that
it intends to settle the Africo lawsuit for $136 million. At the
same time, S&P affirmed the 'BB-' issuer credit rating on the
company and debt rating on the firm's term loan.
"We believe that there is a high probability that Sculptor will
operate with higher leverage over the next 12 months. We forecast
leverage, as measured by net debt to EBITDA, to be about 5.0x," S&P
said.
On July 24, 2020, Sculptor announced that it intends to settle the
Africo case for $136 million provided that no additional claimants
come forward and the court agrees to the settlement. Once this is
complete, Sculptor will be free and clear of any future claims
regarding Africo. This will remove an albatross from Sculptor's
reputation and allowing it to focus on fund raising, which S&P
views positively.
S&P's original forecast did not incorporate a settlement of this
size. Sculptor plans to fulfill its obligation with balance sheet
cash, resulting in the rating agency's weighted leverage
calculation rising to 4.9x from 4.2x, nearly on top of its 5.0x
threshold—and the rating agency believes it's likely this measure
will be over 5.0x by year-end 2020.
"In our opinion, this warrants a negative outlook. Our base-case
forecast still incorporates our view that Sculptor, through strong
cash flow generation, can still capture the discount on the
preferred equity, which we treat as debt, and its term loan despite
the Africo settlement. But if cash flow generation isn't as robust
as we expect, the discount may not be captured, and leverage could
be materially higher than even our updated forecast of 4.9x," S&P
said.
The negative outlook reflects S&P's expectation that Sculptor's
leverage, as measured by net debt to EBITDA, will be about 5.0x on
a weighted basis. S&P's negative outlook is contingent upon
settlement figures that aren't materially divergent from the ones
disclosed. A change in either direction could have an impact on
either S&P's rating or outlook.
"If leverage is above 5.0x on an absolute basis at the end of 2020,
we will likely take a negative rating action. Also, if the
settlement is meaningful above the currently reported figure, we
will likely take a negative rating action," S&P said.
"An upgrade is unlikely over the next 12 months. We could revise
our outlook to stable if the company maintains leverage well below
5.0x for a significant period of time," the rating agency said.
S&P's recovery analysis includes Sculptor's five-year $250 million
($8.5 million currently outstanding) term loan B.
S&P applies a 5.0x multiple for all asset managers because it
believes this represents an average multiple for asset managers
emerging from a default scenario.
"Our simulated default scenario includes poor investment
performance or market depreciation leading to a substantial outflow
of assets under management and a reduction in EBITDA sufficient to
trigger a payment default," S&P said.
-- Emergence EBITDA: $44.2 million
-- Multiple: 5.0x
-- Gross recovery value: $221.0 million
-- Net recovery value after 5% administrative expenses (and
pensions, if applicable): $209.9 million
-- Obligor/nonobligor valuation split: 100%/0%
-- Estimated priority claims (asset-backed loans or other): None
-- Remaining recovery value: $209.9 million
-- Estimated first-lien claim: $331.6 million
-- Value available for first-lien claim: $209.9 million
-- Recovery range: About 60%
Note: All debt amounts include six months of prepetition interest.
SPANISH BROADCASTING: Suspending Filing of Reports with SEC
-----------------------------------------------------------
Spanish Broadcasting System, Inc. filed a Form 15 with the
Securities and Exchange Commission notifying the termination of
registration of its common stock, par value $0.0001 per share. As
a result of the Form 15 filing, the Company is no longer required
to file periodic reports with the SEC.
About Spanish Broadcasting
Spanish Broadcasting System, Inc. (SBS) --
http://www.spanishbroadcasting.com/-- owns and operates radio
stations located in the top U.S. Hispanic markets of New York, Los
Angeles, Miami, Chicago, San Francisco and Puerto Rico, airing the
Tropical, Regional Mexican, Spanish Adult Contemporary, Top 40 and
Urbano format genres. SBS also operates AIRE Radio Networks, a
national radio platform of over 275 affiliated stations reaching
95% of the U.S. Hispanic audience. SBS also owns MegaTV, a network
television operation with over-the-air, cable and satellite
distribution and affiliates throughout the U.S. and Puerto Rico,
produces a nationwide roster of live concerts and events, and owns
a stable of digital properties, including La Musica, a mobile app
providing Latino-focused audio and video streaming content and
HitzMaker, a new-talent destination for aspiring artists.
Spanish Broadcasting recorded a net loss of $928,000 for the year
ended Dec. 31, 2019, compared to net income of $16.49 million for
the year ended Dec. 31, 2018. As of March 31, 2020, the Company
had $453.36 million in total assets, $547.98 million in total
liabilities, and a total stockholders' deficit of $94.62 million.
Crowe LLP, in Fort Lauderdale, Florida, the Company's auditor since
2013, issued a "going concern" qualification in its report dated
March 30, 2020, citing that the 12.5% Senior Secured Notes had a
maturity date of April 15, 2017. Cash from operations or the sale
of assets was not sufficient to repay the notes when they became
due. In addition, at Dec. 31, 2019, the Company had a working
capital deficiency. These factors raise substantial doubt about
its ability to continue as a going concern.
SUMMIT MATERIALS: Moody's Rates New $700MM Unsecured Notes 'B2'
---------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Summit Materials,
LLC's proposed $700 million senior unsecured notes due 2029.
Concurrently, Moody's upgraded the ratings on Summit Materials'
senior secured credit facility to Ba1 from Ba2 and senior unsecured
notes to B2 from B3. Moody's also affirmed Summit Materials' B1
Corporate Family Rating and B1-PD Probability of Default Rating.
The outlook is stable. Finally, Moody's upgraded the company's
Speculative Grade Liquidity rating to SGL-1 from SGL-2.
The proceeds from the new notes will be used to redeem the
company's 6.125% senior unsecured notes due 2023 and to partially
repay outstanding borrowings under the revolving credit facility.
The rating on the 2023 notes will be withdrawn at the close of the
transaction. The transaction will be leverage neutral while
improving the company's debt maturity profile. This is reflected in
Moody's affirmation of Summit Materials' B1 Corporate Family
Rating. Pro forma for the proposed offering, Moody's projects
Summit Materials' debt-to-EBITDA (inclusive of Moody's adjustments)
will be 4.6x at year end 2020.
The upgrade to the senior secured credit facility results from the
larger amount of unsecured debt in the company's capital structure,
which will absorb a higher level of losses in a recovery scenario.
The upgrade to the senior unsecured debt reflects its larger
proportion of the company's total debt capital structure, resulting
in a loss given default expectation that is closer to the average
across the company's entire capital structure. The upgrade to the
Speculative Grade Liquidity rating reflects the company's stronger
free cash flow generation and significant cash position.
"With the proposed $700 million offering Summit Materials will
enhance its financial flexibility and will have no significant debt
maturities until November 2024," said Emile El Nems, a Moody's
VP-Senior Analyst.
Assignments:
Issuer: Summit Materials, LLC
Senior Unsecured Notes, Assigned B2 (LGD5)
Affirmations:
Issuer: Summit Materials, LLC
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Upgrades:
Issuer: Summit Materials, LLC
Senior Secured Credit Facility, upgraded to Ba1 (LGD2) from Ba2
(LGD2)
Senior Unsecured Debt, upgraded to B2 (LGD5) from B3 (LGD5)
Speculative Grade Liquidity Rating, upgraded to SGL-1 from SGL-2
Outlook Actions:
Issuer: Summit Materials LLC
Outlook, Remains Stable
RATINGS RATIONALE
Summit Materials' B1 Corporate Family Rating reflects the company's
strong market position as a leading regional producer of
construction materials in Texas, Kansas, Utah, Missouri and
Kentucky and its vertically integrated asset base. In addition,
Moody's rating is supported by the company's solid EBITDA margins
and good liquidity profile.
At the same time, Moody's rating takes into consideration the
company's vulnerability to cyclical end markets, the competitive
nature of its cement and ready-mix concrete businesses and
significant revenue exposure to Texas, Kansas and Utah. Governance
characteristics considered for Summit Materials is the company's
willingness in the past to take on additional leverage in order to
fund growth through acquisitions. That said, the company has not
engaged in meaningful M&A since 2018 and Moody's does not expect
the company to grow through acquisitions over the next 12-18
months.
The stable outlook reflects Moody's expectation that Summit
Materials will maintain stable sales and profitability after an
unusual temporary decline in US economic activity due to the
coronavirus outbreak. Moody's outlook also considers a return to
stable end-market demand in public and private infrastructure.
Summit Materials' SGL-1 Speculative Grade Liquidity rating reflects
Moody's expectation of a very good liquidity profile over the next
12 to 18 months. At June 27, 2020, the companies liquidly was
supported by its cash balance of $253 million and $329 million of
availability under its $345 million revolving credit facility (net
of $16 million of outstanding letters of credit).
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if:
- The company improves its operating performance and liquidity
profile
- Debt-to-EBITDA is below 3.25x for a sustained period of time
- EBIT-to-Interest expense approaches 3.0x
The ratings could be downgraded if:
- The company's operating margin declines to below 9% and its
liquidity profile deteriorates
- Debt-to-EBITDA is above 4.5x for a sustained period of time
- EBIT-to-Interest expense is below 2.0x
- The company engages in excessive share repurchase activity
The principal methodology used in these ratings was Building
Materials published in May 2019.
Summit Materials, LLC is a construction materials company primarily
operating in Texas, Kansas, Utah, Missouri and Kentucky. Summit
Materials is an acquisition / roll-up vehicle in the construction
materials space, focusing on aggregates, cement, and related
downstream products such as ready-mix concrete and asphalt, as well
as related construction services. The company serves private
construction and public infrastructure end markets which
represented 65% and 35% of total revenue, respectively.
SUMMIT MATERIALS: S&P Rates New $700MM Senior Notes 'BB'
--------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level and '4' recovery
ratings to Denver, Colo.-based Summit Materials LLC's proposed $700
million senior notes due 2028. The '4' recovery rating reflects
S&P's expectation of average (30%-50%, rounded estimate: 30%)
recovery in the event of default. The construction materials
company will use the proceeds to redeem all $650 million 6.125%
senior notes due 2023.
Public and private construction drive Summit's revenues, and S&P
expects spending to remain strong during the next two quarters in
these end markets. Assuming new residential markets continue their
recovery for the rest of the year, S&P expects Summit's debt
leverage to be in the mid-3x area by year-end, recovering
thereafter to the low-3x area in 2021. Summit has reduced its debt
leverage over the past two years to 3.8x at year-end 2019 from 4.8x
at year-end 2018 as pricing improvement initiatives and realized
synergies from greenfield acquisitions have begun to take hold.
However, uncertainties remain over the depth and duration of the
COVID-19 outbreak; a resurgence of the virus could lead to a
contraction in construction activity and state infrastructure
spending. This could cause debt leverage to rise higher than S&P's
initial expectations, depending on the duration of the recession.
S&P expects Summit's sales to experience single-digit-percentage
growth year over year. There is also uncertainty regarding the
impact of reduced state budgets for infrastructure spending in
2021, absent any federal or state measures to make up for funding
shortfalls. A 5% decline in revenue could lead to adjusted debt to
EBITDA approaching 4x. S&P expects interest coverage to remain
above 3x under any scenario.
As of June 30, 2020, Summit had $329 million of availability under
its revolving credit facility which, along with $60 million in free
cash flow, provide ample liquidity for acquisitions or to buffer
the effects of a second potential shutdown. Shifting its nearest
maturity to 2024 and performing strongly through the second quarter
give the company cushion at its current rating. As of June 30,
2020, Summit's debt leverage was 3.5x including accounting for
leases and retirement obligations, net of cash.
SUNPOWER CORP: Signs New Employment Contracts with Executives
-------------------------------------------------------------
With the approval of the Compensation Committee of the Board of
Directors of SunPower Corporation, the Company entered into an
employment agreement on July 21, 2020, with Thomas H. Werner, the
Corporation's president and chief executive officer. On July 24,
2020, also with the approval of the Compensation Committee, the
Company entered into employment agreements with Manavendra S. Sial,
Douglas J. Richards, and Kenneth L. Mahaffey, who serve as the
Company's chief financial officer, executive vice president,
administration, and executive vice president and general counsel,
respectively. These employment agreements will become effective
upon the expiration of each executive's current employment
agreement in August 2020.
Each employment agreement provides that the executive's employment
is "at-will" and may be terminated at any time by either party.
The primary purpose of the agreements is to provide certain
severance benefits for certain employment terminations in
connection with a change in control (as defined in the agreement).
The agreements also address, among other things, confidentiality
and non-solicitation obligations of each executive, and obligations
of the Company to provide indemnification to the executives.
Each employment agreement provides for a one-year term that will
automatically renew unless the Company provides notice of its
intent not to renew at least 60 days prior to the renewal date. The
agreements also provide that each executive shall receive a base
salary, paid in accordance with the Company's normal payroll
practices, and shall be eligible to receive (i) an annual bonus
under the Company's applicable bonus program, (ii) relocation
benefits, if applicable, (iii) benefits pursuant to the Company’s
employee benefit plans, (iv) vacation in accordance with the
Company's paid time off policy, and (v) equity awards under the
Company's long-term incentive compensation arrangements.
In the event an executive's employment is terminated by the Company
without cause (as defined in the agreement), or if the executive
resigns for good reason (as defined in the agreement), and if such
termination or resignation is in connection with a change in
control, then the agreements also provide that the executive is
entitled to:
(i) a lump-sum payment equal to such executive's accrued and
unpaid base salary and unreimbursed business expenses;
(ii) a lump-sum payment equal to the product of (a) two,
multiplied by (b) the sum of executive's base salary and
target bonus for the then current fiscal year;
(iii) continuation of such executive's and such executive's
eligible dependents' coverage under the Company's health,
dental and vision plans at the Company's expense for up to
18 months or, if earlier, the date that the executive
becomes eligible for coverage in connection with new
employment or self-employment; and
(iv) full vesting of all of such executive's then outstanding
unvested restricted stock units that would otherwise vest
solely based upon continued employment, as of the
termination date.
If any of the severance payments, accelerated vesting and lapsing
of restrictions would constitute a "parachute payment" within the
meaning of Section 280G of the Internal Revenue Code and be subject
to excise tax or any interest or penalties payable with respect to
such excise tax, then the executive's benefits will be either
delivered in full or delivered as to such lesser extent which would
result in no portion of such benefits being subject to such taxes,
interest or penalties, whichever results in the executive
receiving, on an after-tax basis, the greatest amount of benefits.
Prior to receiving the severance benefits described in the
employment agreements, each executive will be required to sign a
separation agreement and release of claims.
In the event an executive's employment is terminated by the Company
for any reason other than cause, death or disability (as defined in
the agreement), and if such termination does not occur in
connection with a change in control, then the agreements provide
that the executives shall receive severance benefits in accordance
with the Company's 2019 Management Career Transition Plan or any
successor program.
Upon the termination of an executive's employment by the Company
due to death or disability, the executive shall receive the Accrued
Obligations and upon the termination of an executive's employment
by the Company for cause or by the executive for other than good
reason, the executive shall only receive accrued but unpaid base
salary. In all termination circumstances, the executives shall
also receive any other benefits (as defined in the agreement) that
the executives are entitled to receive upon such terminations.
Amendments to 2019 Management Career Transition Plan
On July 24, 2020, with the approval of the Compensation Committee,
the Company amended its 2019 Management Career Transition Plan to
(i) provide that the chief executive officer will receive a
lump-sum payment equivalent to 12 months of his base salary (rather
than 24 months), in line with other executives subject to the MCTP;
(ii) eliminate outplacement assistance (as a largely unused
benefit); and (iii) provide that, upon termination without cause,
all of an executive’s then outstanding unvested restricted stock
units that would otherwise vest solely based upon continued
employment within 12 months will become fully vested as of the
termination date pursuant to the applicable equity incentive plan
and equity award agreement.
Partial Reinstatement of Base Salaries
On July 27, 2020, the Company announced that the additional
temporary reductions in the base salaries of certain of its
executive officers, which took effect on April 20, 2020, were
rescinded, effective as of July 27, 2020, based on the achievement
of previously determined financial milestones. The initial
temporary reductions to the base salaries of certain of the
Company's executive officers, as previously approved and announced
on March 25, 2020, will remain in effect from and after July 27,
2020, as set forth in the table below.
Percentage Reduced
Executive Officer Reduction Base Salary
----------------- ---------- -----------
Thomas H. Werner 30% $420,000
President and Chief
Executive Officer
Jeffrey Waters 30% $420,000
Chief Executive Officer
SunPower Technologies
Manavendra S. Sial 25% $326,250
Executive Vice President and
Chief Financial Officer
Douglas J. Richards 25% $285,000
Executive Vice President
Administration
Kenneth L. Mahaffey 25% $251,250
Executive Vice President and
General Counsel
The reductions were approved at management's request, and full
salaries will be subject to reinstatement upon the earlier of (i)
the achievement of certain financial milestones, or (ii) Jan. 1,
2021, and are subject in all respects to compliance with local
employment and other legal requirements.
About SunPower
Headquartered in San Jose, California, SunPower Corporation --
http://www.sunpower.com/-- is a global energy company that
delivers complete solar solutions to residential, commercial, and
power plant customers worldwide through an array of hardware,
software, and financing options and through solar power solutions,
operations and maintenance services, and "Smart Energy" solutions.
The Company's Smart Energy initiative is designed to add layers of
intelligent control to homes, buildings and grids -- all
personalized through easy-to-use customer interfaces.
SunPower reported a net loss of $7.72 million for the fiscal year
ended Dec. 29, 2019, compared to a net loss of $917.5 million for
the fiscal year ended Dec. 30, 2018. As of March 29, 2020, the
Company had $1.99 billion in total assets, $1.98 billion in total
liabilities, and $20.06 million in total stockholders' equity.
TRAVELERS REST: Hires Strandco Inc. as Management Company
---------------------------------------------------------
Travelers Rest Enterprises, Inc. d/b/a Hampton Inn, seeks authority
from the U.S. Bankruptcy Court for the District of South Carolina
to employ Strandco, Inc. d/b/a Strand Hospitality Services, as
management company to the Debtor.
Travelers Rest requires Strandco Inc. to provide management
services and to oversee the operations of the hotel Hampton Inn.
Strandco Inc. will also provide payroll, services, receive rent and
other income, pay the vendors and creditors, and maintain policies
of comprehensive, liability and workers compensation insurance.
Strandco Inc. will be paid a management fee of 5% of the gross
volume of business of Hotel operations together with reimbursement
of costs and expenses.
John Pharr, a partner of Strandco, Inc., d/b/a Strand Hospitality
Services, assured the Court that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code and does not represent any interest adverse to the Debtor and
its estates.
Strandco Inc. can be reached at:
John Pharr
STRANDCO, INC.
D/B/A STRAND HOSPITALITY SERVICES
1109 48 th Ave. N., Suite 211
Myrtle Beach, SC 29577
Tel: (843) 222-2740
E-mail: jpharr@strandhospitality.com
About Travelers Rest Enterprises
Travelers Rest Enterprises, Inc., d/b/a Hampton Inn Travelers Rest,
based in Travelers Rest, SC, filed a Chapter 11 petition (Bankr.
S.D. Cal. Case No. 20-02756) on July 1, 2020. The Hon. Helen E.
Burris oversees the case. POHL, P.A., serves as bankruptcy
counsel. In the petition signed by David Jagirdar, director and
chairman, the Debtor was estimated to have $1 million to $10
million in both assets and liabilities.
WALDEN PALMS: US Bank National Objects to Disclosures and Plan
--------------------------------------------------------------
Secured creditor U.S. Bank National Association, As Trustee Of The
Lodge Series IV Trust filed its objections to the Walden Palms
Condominium Association, Inc.'s Disclosure Statement and Chapter 11
Plan.
According to Secured Creditor, approval of a disclosure statement
should be denied when it does not contain adequate information.
Secured Creditor asserts that the Debtor's entire plan and
disclosure statement is premised upon the liquidation of the
Property as well as other units in the Debtor's complex at
undisclosed amounts without providing any evidence of the value of
each of the various properties at issue, while preserving Debtor's
rights to surcharge first mortgages, like Secured Creditor, without
satisfying the requirements set forth within Section 506(c).
Secured Creditor points out that the disclosure statement and plan
fail to provide any evidence of the value of Secured Creditor's
Property and fail to provide any accounting or information
regarding the alleged charges that the Debtor claims surcharge
rights for.
Secured Creditor complains that the Debtor’s proposed plan seeks
recover of Debtor's surcharge rights without requiring the Debtor
to carry its burden of proof to establish it is entitled to such
rights under Section 506(c).
According to Secured Creditor, the Debtor has provided no evidence
or authority to support imposition of a surcharge for charges
incurred after the Debtor foreclosed on its assessment lien and
acquired title to the Property.
Attorneys for Secured Creditor:
Christophal Hellewell, Esq.
GHIDOTTI | BERGER, LLP
1031 North Miami Beach Blvd.
North Miami Beach, FL 33162
Telephone: (305) 501.2808
Facsimile: (954) 780.5578
E-mail: chellewell@ghidottiberger.com
About Walden Palms Condominium
Walden Palms Condominium Association, Inc., is a nonprofit property
management company in Orlando, Florida. Walden Palms Condominium
Association sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Fla. Case No. 18-07945) on Dec. 24, 2018. At the
time of the filing, the Debtor was estimated to have assets of $1
million to $10 million and liabilities of $10 million to $50
million.
The case is assigned to Judge Cynthia C. Jackson.
The Debtor tapped Shapiro, Blasi, Wasserman & Hermann, P.A., as its
bankruptcy counsel; Arias Bosinger PLLC as general association
counsel; JD Law Firm; as collections & foreclosure counsel; and
Winderweedle, Haines, Ward & Woodman, P.A. as land use counsel.
WAYNE CITY: Moody's Alters Outlook on B2 Issuer Rating to Stable
----------------------------------------------------------------
Moody's Investors Service affirms the City of Wayne, MI's B2 issuer
rating and B3 rating on the city's outstanding general obligation
limited tax bonds. Additionally, Moody's affirms the B3 rating
assigned to the City of Wayne Building Authority's 2008 Building
Authority Bonds, issued on behalf of the city. The city has $16.1
million and $940,000, respectively, in outstanding GOLT and
non-contingent leased backed debt. The outlook is revised to stable
from negative.
The issuer rating represents Moody's assessment of hypothetical
long-term debt of the city supported by a general obligation
unlimited tax pledge. The city does not currently have any
outstanding debt supported by a GOULT pledge. The pledge supporting
the city's outstanding GOLT debt and the rental payments securing
the building authority's debt is limited based on the city's
constitutional and statutory limitations.
RATINGS RATIONALE
The B2 issuer rating reflects the City of Wayne's severely
pressured financial position, including its very narrow operating
fund balance and governmental liquidity. Further factored are the
city's high fixed costs and limited revenue raising authority.
Additional rating considerations are the city's moderately-sized
tax base, below average wealth and income characteristics, along
with the local economy's elevated dependence on automotive
manufacturing.
The city's GOLT rating is notched once from its issuer rating,
which reflects the greater pressure based on the continued payment
of limited tax bond debt service, relative to the hypothetical
GOULT pledge of the issuer rating, given the lack of a dedicated
bond levy and strong limitations on the city's ability to raise
revenue.
The non-contingent lease backed obligations are rated equal to the
city's GOLT rating based on the city's full faith and credit GOLT
pledge securing rental payments.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. The coronavirus crisis is not a key driver for this
rating action. Moody's does not see any material immediate credit
risks for the City of Wayne However, the situation surrounding
coronavirus is rapidly evolving and the longer term impact will
depend on both the severity and duration of the crisis. If its view
of the credit quality of the city changes, Moody's will update the
rating and/or outlook at that time.
RATING OUTLOOK
The revision of the outlook to stable from negative reflects the
city's ability to leverage its healthy water and sewer enterprise
fund to provide sufficient liquidity to sustain governmental
operations.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
- Sustained bolstering of operating fund balance and liquidity
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
- Further narrowing of operating fund balance or liquidity
- Inability to provide essential municipal services
- Material growth to long-term leverage and related annual fixed
costs
LEGAL SECURITY
The city's outstanding GOLT bonds are secured by its full faith and
credit and pledge to levy ad valorem property taxes subject to
statutory and constitutional tax limitations.
Outstanding bonds issued by the City of Wayne Building Authority
are payable from annual cash rental payments made by the city to
the building authority in an amount sufficient to pay principal and
interest. The rental payments constitute a full faith and credit
limited general obligation of the city.
PROFILE
The City of Wayne encompasses 6 square miles of Wayne County (Baa1
stable) in the southeastern portion of the state's Lower Peninsula.
The city operates under a council-manager form of government, and
provides municipal services to a population of roughly 17,000
residents.
METHODOLOGY
The principal methodology used in the general obligation ratings
was US Local Government General Obligation Debt published in
September 2019.
WPB HOSPITALITY: Unsecureds Recovery Projected at 0% to 100%
------------------------------------------------------------
WPB Hospitality, LLC, submitted a Plan and a Disclosure Statement.
Notwithstanding the potential and apparent loss of the real
property, the Debtor still maintains assets, including but not
limited to its claims in the State Court litigation including
against the contractor, Kumar Construction Management, Inc. as well
as claims against ALC and other third parties. In addition to
consulting construction litigation counsel, the Debtor is also
consulting with other attorneys regarding other possible claims
that the Debtor may have.
Class 4 consists of the allowed unsecured creditors of the Debtor.
There are a total of nine creditors with claims totaling $166,216.
The Class 4 creditors may receive nothing or up to 100% of their
allowed claims depending upon the Debtor's success with the various
lawsuit and litigation claims. The Debtor will file objections to
any claims that can’t be substantiated on or before June 30,
2020. The Debtor believes that the remaining eight (8) claims
totaling $102,715.89 are valid claims.
Class 5 consists of the unsecured claims of Abbas Consulting, Inc.
and Frisco Acquisition, LLC for the purchase of Proofs of Claim
numbers 2, 3, and 4 which were Rio Grande Company; O'Brien Concrete
Pumping; and HD Construction Supply. These three claims total
$72,163. These creditors are classified separately due to the fact
that the Debtor maintains claims against them in the Breach of
Fiduciary Duty Litigation. If the Debtor is unsuccessful in the
Claims Objections against these creditors or in the Breach of
Fiduciary Duty Litigation they will be paid as an allowed Class 4
creditor. If the Debtor's Breach of Fiduciary Duty Litigation is
partially successful against these creditors but without completely
eliminating the claim, the creditors will be paid the allowed
balance of their claim.
Class 6 consists of the insider unsecured claims of Alpine
Hospitality, Inc. and Wanda S. Bertoia in the amount of $5,784,159.
Pursuant to the Subordination Agreement the Class 6 creditors will
not be paid until all other superior creditors are paid in full.
Class 7 consists of the equity security holder Wanda S. Bertoia.
The proposed distributions under the Plan are discussed at pages
26-29 of this Disclosure Statement. General unsecured creditors are
classified in Class 4, and may receive a distribution of up to 100
percent of their allowed claims
Breach of fiduciary duty litigation which formed the source of
payment for the creditors of the estate.
A full-text copy of the Disclosure Statement dated June 15, 2020,
is available at https://tinyurl.com/ycjwr3cn from PacerMonitor.com
at no charge.
Attorney for the Debtor:
Arthur Lindquist-Kleissler #9822
LINDQUIST-KLEISSLER & COMPANY, LLC
950 S. Cherry Street #418
Denver CO 80246
Tel: (303) 691-9774
Fax: (303) 200-8994
E-mail: arthuralklaw@gmail.com
About WPB Hospitality
WPB Hospitality, LLC is a single asset real estate company (as
defined in 11 U.S.C. Section 101(51B)) whose principal assets are
located at 16161 E. 40th Ave., Denver, Colorado.
WPB Hospitality sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Colo. Case No. 18-18636) on Oct. 3,
2018. In the petition signed by Wanda Bertoia, owner, the Debtor
was estimated to have assets of less than $50,000 and liabilities
of $10 million to $50 million. Judge Elizabeth E. Brown oversees
the case. The Debtor tapped Lindquist-Kleissler & Company, LLC as
its legal counsel and CBRE, Inc., as broker.
YUMA ENERGY: Hires Getzler Henrich as Financial Advisor
-------------------------------------------------------
The Official Committee of Unsecured Creditors of Yuma Energy, Inc.,
and its debtor-affiliates seeks authorization from the U.S.
Bankruptcy Court for the Northern District of Texas to retain
Getzler Henrich & Associates LLC as financial advisor to the
Committee.
The Committee requires Getzler Henrich to:
a. review and assess the Debtors' key oil and gas assets and
associated liabilities;
b. monitor field and in-house operations and obligations to
sustain the Debtors' oil and gas assets until sold through
the Debtors Bankruptcy process, the required operations,
lease maintenance, royalty/tax/LOE obligations, operating
bonds, well insurance, regulatory compliance, etc.;
c. review and evaluate the viability of data room materials,
bid process, bids and bidders for the Debtors' assets;
d. provide assistance to identify potential additional
bidders;
e. assist as to the current and ongoing financial status of
the Debtors and the financial sufficiency and structure of
bids received;
f. participate in any asset auction process with the goal of
maximizing sales proceeds to the bankrupt estate;
g. assist with discussions and interactions with the Debtors
management and relevant corporate and other stakeholders;
h. assist in the preparation of analysis required to assess
any proposed Debtor-In-Possession ("DIP") financing;
i. assist in the review of financial related disclosures
required by the Court, including the Debtors' Schedules of
Assets and Liabilities, Statement of Financial Affairs and
Monthly Operating Reports;
j. assist with the review of any retention programs and other
employee benefit programs;
k. assist with the review of the Debtors' long-term financial
projections, including cash generating capacity and
identification of potential cost savings, including
overhead and operating expense reductions and efficiency
improvements;
l. assist with the review of the Debtors' cost/benefit
analysis with respect to the assumption or rejection of
various executory contracts and leases;
m. assist with the review of the Debtors' corporate structure
including analysis of intercompany activities and claims;
n. assist with the review of any tax issues associated with,
but not limited to, claims/stock trading, preservation of
net operating losses, refunds due to the Debtors, plans of
reorganization, and asset sales;
o. assist in the review of the claims reconciliation and
estimation process;
p. attend at meetings and assistance in discussions with the
Debtors, potential investors, banks, other secured lenders,
the Committee and any other official or unofficial
committees organized in these chapter 11 proceedings,
the U.S. Trustee, other parties in interest and
professionals hired by the same, as requested;
q. assist in the review and/or preparation of information and
analysis necessary for the confirmation of a plan and
related disclosure statement in these chapter 11
proceedings;
k. assist in the evaluation and analysis of avoidance actions,
including fraudulent conveyances and preferential
transfers;
l. assist in the prosecution of Committee responses/objections
to the Debtors' motions, including attendance at
depositions and provision of expert reports/testimony on
case issues as required by the Committee; and
m. render such other general business consulting or such other
assistance as the Committee or its counsel may deem
necessary that are consistent with the role of a financial
advisor and not duplicative of services provided by other
professionals in this proceeding.
Getzler Henrich will be paid at these hourly rates:
Jay D. Haber, Principal Consultant $800
Director $600
Senior Associate $500
Getzler Henrich will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Jay D. Haber, principal of Getzler Henrich & Associates LLC,
assured the Court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and (a)
is not creditors, equity security holders or insiders of the
Debtors; (b) has not been, within two years before the date of the
filing of the Debtors' chapter 11 petition, directors, officers or
employees of the Debtors; and (c) does not have an interest
materially adverse to the interest of the estate or of any class of
creditors or equity security holders, by reason of any direct or
indirect relationship to, connection with, or interest in, the
Debtors, or for any other reason.
Getzler Henrich can be reached at:
Jay D. Haber
GETZLER HENRICH & ASSOCIATES LLC
295 Madison Avenue, 20th Floor
New York, NY 10017
Tel: (212) 697-2400
Fax: (212) 697-4812
About Yuma Energy
Yuma Energy, Inc. -- http://www.yumaenergyinc.com/-- is an
independent Houston-based exploration and production company. The
Company is focused on the acquisition, development, and exploration
for conventional and unconventional oil and natural gas resources,
primarily in the U.S. Gulf Coast, the Permian Basin of West Texas
and California. The Company has employed a 3-D seismic-based
strategy to build a multi-year inventory of development and
exploration prospects. Its current operations are focused on
onshore properties located in southern Louisiana, southeastern
Texas and recently, in the Permian basin of West Texas. In
addition, the Company has non-operated positions in the East Texas
Eagle Ford and Woodbine, and operated positions in Kern County in
California.
Yuma Energy and three of its affiliates filed for bankruptcy
protection on April 15, 2020 (Bankr. N.D. Tex. Lead Case No.
20-41455). The petitions were signed by Anthony C. Schnur, CRO.
As of Dec. 31, 2019, Yuma posted $32,290,329 in total assets and
$28,270,794 in total liabilities.
The Debtors tapped Fisher Broyles LLP as their legal counsel;
Seaport Gordian Energy LLC as their investment banker; Ankura
Consulting Group LLC as their financial advisor; and Stretto as
their administrative advisor.
*********
Monday's edition of the TCR delivers a list of indicative prices
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