/raid1/www/Hosts/bankrupt/TCR_Public/200805.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, August 5, 2020, Vol. 24, No. 217
Headlines
1934 BEDFORD: Second Amended Plan Confirmed by Judge
21ST CENTURY: 2nd Cir. Affirms Order Reducing Lobbyist's Bonus
ABE'S BOAT: J Sercovich Buying Four Vessels for $1.5 Million
ABE'S BOAT: Ton Buying Chevrolet Silverado & Cadillac CTS for $20K
AKORN INC: Fresenius Objects to Disclosures Motion
AKORN INC: Provepharm Objects to Disclosures Motion
ALL STAR MATERIALS: Weaver Parties Object to Plan & Disclosure
ALTERA INFRASTRUCTURE: Fitch Alters Outlook on 'B' IDR to Negative
AMC ENTERTAINMENT: Moody's Affirms Caa3 CFR, Outlook Negative
AMERICAN CENTER FOR CIVIL: Katchen Case Remanded to Bankr. Court
ANEW YOU MEDICAL: Aug. 5 Plan Confirmation Hearing Set
APACHE CORPROATION: Moody's Rates New Sr. Unsecured Notes 'Ba1'
AT HOME GROUP: Reports Preliminary Q2 Fiscal 2021 Results
AVIS BUDGET: Moody's Rates $350MM Senior Unsecured Notes 'B3'
BAUMANN & SONS: Voluntary Chapter 11 Case Summary
BAYSIDE WASTE: Aug. 26 Auction of Substantially All Assets Set
BEEGE HOLDING: Hires Agentis PLLC as Bankruptcy Counsel
BEN F. BLANTON: Seeks to Hire Lathrop GPM as Legal Counsel
BLACKWOOD REDEVELOPMENT: PSB Credit Objects to Modified Disclosure
BLANCO RIVERWALK: Combined Plan & Disclosure Confirmed by Judge
BOND FOUNDRY: Case Summary & 10 Unsecured Creditors
BRIGGS & STRATTON: Taps Houlihan Lokey as Investment Banker
BROOKS BROTHERS: Aug. 10 Auction of Substantially All Assets Set
BROOKS BROTHERS: Reply Filing in Support of Bid Procedures Approved
CB POLY: S&P Upgrades ICR to 'CCC+' on Completed Debt Exchange
CBAC PROPERTIES: Case Summary & 3 Unsecured Creditors
CBL & ASSOCIATES: Obtains Forbearance Extension Until Aug. 5
CEC ENTERTAINMENT: Sussman & Moore Represents Utility Companies
CHINOS HOLDINGS: Aug. 25 Plan Confirmation Hearing Set
CONCISE INC: Seeks to Hire Katz Abosch Windesheim as Accountant
CORRIDOR MEDICAL: Seeks Approval to Hire 'Ordinary Course' Attorney
CSC HOLDINGS: Moody's Rates $1BB Planned Guaranteed Notes 'Ba3'
DANNYLAND LLC: Seeks to Hire Marcum Tennyson as Special Counsel
DELIVERY AGENT: Court Tosses Chookaszian Expert Report
DENBURY RESOURCES: Moody's Cuts PDR to D-PD on Bankruptcy Filing
DHM HOSPITALITY: Proposes an Auction Sale of Assets
DIAMONDBACK INDUSTRIES: Hires Whitaker Chalk as Special Counsel
DIAMONDBACK INDUSTRIES: Taps Scheef & Stone as Special Counsel
DISCOVERY ESTATES: Case Summary & Unsecured Creditor
DOVETAIL GALLERY: Amended Plan Confirmed by Judge
ENOVA INTERNATIONAL: S&P Alters Outlook to Negative, Affirms B ICR
EPIC Y-GRADE: Moody's Cuts Senior Secured Term Loan B to Ca
FANNIE MAE: Reports $2.5 Billion Net Income for Second Quarter
FENER LLC: Aug. 4 Disclosure Statement Hearing Set
FIELDWOOD ENERGY: Case Summary & 30 Largest Unsecured Creditors
FREDERICK D. FEIGL: Hammock Buying 1959 Cessna C-172 for $13K
FRONTIER COMMUNICATIONS: Debtholders Object to Disclosure Statement
FRONTIER COMMUNICATIONS: National Public Objects to Disclosure
FRONTIER COMMUNICATIONS: U.S. Bank Objects to Disclosure Statement
G-III APPAREL: S&P Cuts Rating on New Senior Secured Notes to 'BB'
GNC HOLDINGS: Landis Rath Represents JP Morgan, Term Loan Group
GOLDEN COMMUNICATIONS: Taps Magarian & DiMercurio as Counsel
GRUPO FAMSA: Unsecured Creditors to Be Reinstated in Prepack Plan
GULF AVIATION: Seeks to Hire Jones Galligan as Legal Counsel
GULFPORT ENERGY: Inks 16th Amendment to 2013 Credit Agreement
HARVEST MIDSTREAM I: Moody's Assigns Ba3 CFR, Outlook Stable
HARVEST MIDSTREAM: Fitch Assigns 'BB-' LT IDR, Outlook Stable
HIGH SIERRA THEATRES: Seeks to Hire Joseph Kirk Costich as Realtor
JOSEPH LOUIS MELZ: $6.2M Sale of Franklin Property to Trust Okayed
KENDALL FROZEN: Trustee to Seek Plan Approval Sept. 3
KIMBLE DEVELOPMENT: Aug. 5 Plan Confirmation Hearing Set
KLAUSNER LUMBER: Aug. 21 Auction of Substantially All Assets Set
LAKELAND TOURS: Togut, Segal Represents Seller Noteholder Group
LAKEWAY PUBLISHERS: Plan of Reorganization Confirmed by Judge
LATAM AIRLINES: Committee Hires Dechert LLP as Lead Counsel
LATAM AIRLINES: Committee Hires Morales & Besa as Legal Counsel
LE TOTE: Case Summary & 30 Largest Unsecured Creditors
LIDDLE & ROBINSON: CFH Bid to Appeal Interim Fee Order Junked
LOGMEIN INC: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
LOGMEIN INC: Moody's Assigns B2 CFR & Rates First Lien Loans B1
LSB INDUSTRIES: S&P Cuts ICR to 'CCC' on Weak Agricultural Pricing
M2 SYSTEMS: Reaches Mediated Settlement with Digital & M2PS
MCGRATH TECHNICAL: Voluntary Chapter 11 Case Summary
METRO BURGH: Aug. 6 Hearing on Disclosure Statement
MICHAEL LEVY: Appeals Court Upholds Judgment in In-Laws Row
MICHAEL R. EADES: Gates Trust Buying Montecito Property for $3.8M
MLH HOMES: Case Summary & Unsecured Creditor
MORDECHAI KOKA: Selling Napa Property for $790K
NATIONSTAR MORTGAGE: Moody's Rates New $850MM Unsecured Notes 'B2'
NESSALLA LLC: Seeks to Hire Lotus Small Business as Accountant
NEW FORTRESS: Moody's Assigns B1 CFR, Outlook Stable
NEW VENTURE 777: Aug. 13 Plan & Disclosures Hearing Set
NEWSCO INTERNATIONAL: Seeks to Hire Gordon Brothers as Appraiser
OBALON THERAPEUTICS: Incurs $4.2M Net Loss in Second Quarter
OFFSHORE MARINE: Unsecureds to Recover 0.0025% of Claims
OGGUSA INC: Aug. 20 Hearing on Paducah Property Sale Set
PIER 1 IMPORTS: Taps Jones Lang LaSalle as Real Estate Broker
PREMIER ON 5TH: Court Confirms Chapter 11 Plan
RED ROSE INC: Seeks to Hire Ordinary Course Professionals
RGN-CHAPEL HILL: Case Summary & Unsecured Creditor
RGV SMILES: Seeks to Tap Joyce W. Lindauer as Legal Counsel
ROBERTS PROPERTY: Plan to be Funded by Affiliates' Business Income
ROCKPORT DEVELOPMENT: Hires TruLine Realty as Real Estate Agent
ROCKPORT DEVELOPMENT: Taps Sand and Sea Realty as Real Estate Agent
ROOFTOP GROUP: Amended Plan Disclosures Filed by UCC, Trustee
RUBY PIPELINE: Moody's Cuts CFR to B1, Outlook Negative
RYFIELD PROPERTIES: Selling Sequim Real Property & Logging Eqpt.
SALUBRIO LLC: Trustee Taps Spencer Fane as Special Counsel
SAN YSIDRO SCHOOL: S&P Cuts GO Bond Rating to BB+; Outlook Negative
SENSATA TECHNOLOGIES: Moody's Rates $750MM Unsecured Notes 'Ba3'
SPRINGFIELD HOSPITAL: Hires Theriault & Joslin as Special Counsel
SPURLOWS ARCHERY: Seeks Court Approval to Hire A+ Accounting
STL HOLDING: Moody's Rates New $225MM Senior Unsecured Notes 'B3'
SUMMIT MIDSTREAM: S&P Lowers Rating on A Preferred Units to 'D'
SUNNY HILLS: Seeks to Hire Wendel Rosen as Legal Counsel
SUPERIOR AIR: Unsecureds to Recover 2.3% to 15.0% in Joint Plan
TAILORED BRANDS: Porter, Gibson Dunn Represent Term Lender Group
TANGO DELTA: Trustee Seeks to Hire Bush Ross as Legal Counsel
TRC FARMS: Aug. 18 Plan Confirmation Hearing Set
TRI-POINT OIL: Unsecureds to Get Paid by Liquidating Cash Proceeds
TRIANGLE USA: 8th Circuit Upholds Judgment Against Slawson
TRINITY AFFORDABLE: S&P Lowers 2016-4A Bond Rating to 'BB-'
TRINITY AFFORDABLE: S&P Lowers 2016A Revenue Bond Rating to 'BB-'
TRIVASCULAR SALES: Seeks Approval to Hire DLA Piper as Counsel
TRUVI COMMERCE: Seeks to Hire Provencher & Flatt as Counsel
UA INVESTMENTS: Case Summary & 4 Unsecured Creditors
UNIQUE TOOL: Trustee Seeks Approval to Hire Auctioneers
VALERITAS HOLDINGS: Walker Buying Riverdale Property for $802K
VINCENT L. PHILLIPS: Judge Won't Reconsider Ruling
VIRTUAL CITADEL: Northeast Tech Buying IP Assets for $425K
WEST 41 PROPERTY: 440 W Buying New York Property for $40.3M
WESTSIDE LIQUIDATORS: Unsecureds to Receive 100% Over 10 Years
WFO EXPRESS: Seeks Approval to Hire Ken McCartney as Legal Counsel
WJA ASSET: Sept. 3 Plan Confirmation Hearing Set
XEROX HOLDINGS: Moody's Assigns Ba1 CFR, Outlook Negative
[*] Developments on SBA PPP Loans to Debtor Applicants
*********
1934 BEDFORD: Second Amended Plan Confirmed by Judge
----------------------------------------------------
Judge Carla E. Craig has entered an order approving the Second
Amended Disclosure Statement and confirming Modified Second Amended
Chapter 11 of 1930 Bedford Avenue LLC, Mortgagee of Debtor 1934
Bedford LLC.
The Mortgagee has proposed and negotiated the Plan in good faith
and not by any means forbidden by law, thereby complying with §
1129(a)(3) of the Bankruptcy Code. In so finding, the Court has
considered the totality of the circumstances in this Chapter 11
Case.
Section 1129(a)(9) of the Bankruptcy Code is satisfied because,
except to the extent that the holder of a particular Claim has
agreed to a different treatment of such Claim, the Plan provides
for the payment in full on account of Claims described in § 507(a)
of the Bankruptcy Code of Cash equal to the Allowed Amount of such
Claim on the Effective Date or shortly thereafter.
A copy of the order dated June 26, 2020, is available at
https://tinyurl.com/ybbzr9so from PacerMonitor at no charge.
About 1934 Bedford
1934 Bedford LLC operates and develops a multi-unit building in
Brooklyn, N.Y.
On Aug. 2, 2019, an involuntary petition for relief under Chapter
11 of the Bankruptcy Code was filed against Bedford by creditors
Simply Brooklyn Realty, HTC Construction Management, Inc., HTC
Plumbing, Inc. (Bankr. E.D.N.Y. Case No. 19-44751). Bedford
consented to the entry of an order for relief under Chapter 11 of
the Bankruptcy Code on Sept. 12, 2019.
Judge Carla E. Craig oversees the case.
The creditors are represented by Rosenberg Musso & Weiner, LLP
while Bedford is represented by Loeb & Loeb LLP.
21ST CENTURY: 2nd Cir. Affirms Order Reducing Lobbyist's Bonus
--------------------------------------------------------------
Andrew L. Wood was a lobbyist with 21st Century Oncology
Associates, Inc. ("21C") until his termination. Woods has taken an
appeal from the Decision and Order of the District Court for the
Southern District of New York affirming the judgment of the
Bankruptcy Court for the Southern District of New York, which
reduced Woods' allowed claim for certain deferred incentive bonus
payments pursuant to 11 U.S.C. section 502(b)(7). That subsection
limits claims for damages "resulting from termination of an
employment contract" to the sum of: (1) a single year of
compensation "without acceleration"; and (2) unpaid compensation
"due . . . without acceleration" on the date of termination. 11
U.S.C. section 502(b)(7)(A)-(B).
Upon review, the U.S. Court of Appeals for the Second Circuit
affirms.
21C, a provider of radiation therapy to cancer patients, employed
Woods from approximately 2010 to Sept. 23, 2016. The Amended and
Restated Executive Employment Agreement dated May 13, 2013,
assigned Woods to promote legislative and administrative
initiatives that would enhance 21C's profitability by increasing
Medicare reimbursements to freestanding radiation therapy clinics.
In addition to various other forms of compensation, including a $1
million annual salary and health benefits, Woods was promised
incentive bonus payments totaling $10 million if the desired
reforms were adopted -- which they were.
During Woods' tenure at 21C, the federal government made the
changes to Medicare reimbursement rates and procedures that 21C had
sought: on Dec. 28, 2015, Congress froze reductions in Medicare
reimbursement for freestanding radiation therapy centers like
21C's; and on June 29, 2016, the Centers for Medicare and Medicaid
Services introduced a multi-bundled payment system for cancer care
services, in which 21C elected to participate. As a result, Woods
received an initial Incentive Bonus payment of $1 million, leaving
$9 million in bonuses yet to be paid.
On Sept. 23, 2016, 21C terminated Woods without cause. When 21C
refused Woods' request for immediate payment of $9 million in
additional Incentive Bonuses, Woods filed suit. On May 25, 2017,
21C and its affiliates filed for chapter 11.
Woods filed a claim in the Chapter 11 Cases seeking, among other
things, $9 million in unpaid Incentive Bonuses and $1 million in
Severance Payments. In response, 21C and its affiliated debtors
filed a limited objection. In relevant part, the Debtors argued
that the portion of Woods' claim attributable to deferred Incentive
Bonuses should be reduced pursuant to 11 U.S.C. section 502(b)(7),
which caps at one year's compensation "the claim of an employee for
damages resulting from the termination of an employment contract."
The bankruptcy court ruled that the Incentive Bonuses were subject
to the cap under section 502(b)(7). The court reasoned that the
Incentive Bonuses did not "vest" when the Medicare reforms
specified in section 3(b) of the Employment Agreement were made; on
the contrary (the court went on), the full amount of the Incentive
Bonuses became payable only as a result of Woods' termination. The
court concluded that the plain language of section 502(b)(7) capped
the deferred Incentive Bonuses because they were not in fact due
"without acceleration" prior to Woods' termination.
On Feb. 1, 2019, the bankruptcy court entered a final order capping
Woods' Incentive Bonus claim at $4 million. Pursuant to section
502(b)(7)(A)-(B), that figure included unpaid Incentive Bonuses
that were due and payable as of Woods' termination, as well as the
bonuses that would have come due in the one-year period following
his termination had he remained employed. The bankruptcy court's
order was affirmed by the District Court for the Southern District
of New York, and on June 10, 2019, Woods entered a timely notice of
appeal.
On appeal, Woods contends that section 502(b)(7) applies only to
forward-looking claims in the nature of severance -- not to claims
for compensation on account of services already performed -- and
draws the analogy to pensions, which courts have declined to cap.
Woods argues that because his rights to receive the incentive
bonuses were fully vested prior to his termination, the timing of
the bonus payments was irrelevant to the application of section
502(b)(7).
The Second Circuit affirms because, pursuant to Woods' contract,
portions of the incentive bonuses were not in fact due prior to
termination, but were accelerated as the contract expressly
provides. Accordingly, the plain language of section 502(b)(7)
requires that the Court apply its cap to Woods' claim for
accelerated payments.
A copy of the Second Circuit's Decision dated July 20, 2020, is
available at https://bit.ly/332Vk4y from Leagle.com.
LEON N. PATRICIOS, Zumpano Patricios, P.A., Coral Gables, FL, (John
E. Jureller, Jr., Klestadt Winters Jureller Southard & Stevens,
LLP, on the brief) for Appellant Andrew L. Woods
JEFFREY R. GLEIT, Sullivan & Worcester LLP, New York, NY, for
Appellee 21st Century Oncology Holdings, Inc., AKA Radiation
Therapy Services Holdings, Inc.
About 21st Century
Fort Myers, Florida-based 21st Century Oncology Holdings, Inc.,
formerly Radiation Therapy Services Holdings, Inc., is a
physician-led provider of integrated cancer care (ICC) services.
Its cancer treatment centers in the United States are operated
under the 21st Century Oncology brand.
21st Century and 59 U.S. affiliates filed Chapter 11 petitions
under the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 17-22770)
on May 25, 2017. At the time of the filing, the Debtors estimated
their assets and debt at $1 billion to $10 billion. The bankruptcy
cases were before the Hon. Judge Robert D. Drain.
As of Sept. 30, 2016, 2st Century had $1.05 billion in total
assets, $1.39 billion in total liabilities, $472.34 million in
series A convertible redeemable preferred stock, $19.24 million in
non-controlling interests -- redeemable and a total deficit of
$833.89 million.
Lorenzo Marinuzzi, Esq., at Morrison & Foerster LLP, served as the
Debtors' bankruptcy counsel. Kurtzman Carson Consultants LLC
served as the Debtors' claims and noticing agent.
On June 8, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The Committee tapped
Morrison & Foerster LLP as counsel and Berkeley Research Group,
LLC, and financial advisor.
On Jan. 11, 2018, Judge Drain confirmed the Debtors'
bankruptcy-exit plan.
ABE'S BOAT: J Sercovich Buying Four Vessels for $1.5 Million
------------------------------------------------------------
Abe's Boat Rentals, Inc. asks the U.S. Bankruptcy Court for the
Eastern District of Louisiana authorize the sale to J Sercovich,
LLC for the aggregate price of $1.5 million of the following four
vessels: M/V Miss Wynter (Official Number 969771), M/V Dutch Girl
(Official Number 966167), M/V Ruth (Official Number 1097461), and
M/V Dutchman (Official Number 1222033).
The Debtor is a Louisiana corporation headquartered in Belle
Chasse, Louisiana. It currenly owns 16 vessels used to transport
supplies in connection with the offshore oil and gas industry. The
Debtor had approximately 60 to 80 employees at the outset of the
case but has trimmed its numbers to less than 20. The employees
hold various positions, such as deck hand or ship captain, engaged
in maintaining and piloting the Debtor's vessels.
The downturn experienced by the Debtor and other service companies
involved in the offshore oil and gas business have been exacerbated
by recent plummeting oil prices, the COVID-19 pandemic, and social
distancing shut-downs. The Debtor just received new work from
Cantium, LLC, an independent oil and gas company with offshore
operations, for two vessels (Ruth and Thunder America) and has two
additional vessels already on a term job (Miss Lynda and RipTide)
for Palm Energy, which is remarkable under current market
conditions.
The four vessels' potential purchaser, J Sercovich, plans to
provide some or all of Abe's employees with an opportunity to
continue working. Further, although the Purchaser's acquisition
will not pay unsecured creditors directly, its ongoing use of the
vessels will provide the estate's prepetition vendors with a future
revenue source.
On May 18, 2020, J Sercovich offered to acquire the fou vessels
identified for the aggregate price of $1.5 million. The Debtor
believes the offer is reasonable under the circumstances and in the
best interests of the estate.
The Debtor also asks that the Court authorizes the sale free and
clear of any liens, claims, encumbrances or other interests that
may be asserted against the Vessels. Exhibit A contains copies of
the General Index or Abstract of Title for each of the Vessels.
The alleged encumbrances are:
a. Hancock Whitney Bank Encumbrances - The Abstracts reflect
that Hancock currently holds preferred ship mortgages encumbering
the Vessels, which secures the Bank's claim in excess of $8.5
million. The preferred ship mortgages were recorded on the
following dates: M/V Dutch Man – 2/13/2012; M/V Miss Wynter –
7/11/2008; M/V Dutch Girl – 5/30/2013; M/V Ruth – 1/9/2015.
Hancock has agreed to release its encumbrances as part of the
transaction, and reduce its claim against the Debtor by $1.5
million. The Bank is financing the acquisition of the Vessels by
the Purchaser, with such financing being secured by new preferred
ship mortgages against the Vessels. Hancock's consent is
conditioned on the Court authorizing the sale free and clear of any
and all liens, including the purported liens asserted by Shipyard
Service LLC, Conrad Shipyard LLC and Michael Fournier.
b. Shipyard Service LLC Mortgages - The Abstracts reflect that
Shipyard currently holds liens against each of the Vessels.
Shipyard and the purchaser are commonly owned by John Sercovich.
Shipyard consents to the proposed sales of the Vessels and agrees
to
release its liens.
c. Conrad Shipyard LLC Maritime Lien - The Abstracts reflect
Conrad holds a lien against the M/V Ruth securing a claim in the
amount of $22,713. Based on information and belief, the Conrad
Lien arises out of charges for repairs to the M/V Ruth. As
evidenced by the Abstracts, Hancock holds a preferred ship mortgage
against the M/V Ruth, which was recorded in 2015, prior in time to
the lien recorded in 2018 by Conrad. The Hancock Whitney Bank
mortgage has priority over the Conrad Lien.
d. Fournier Personal Injury Claim - On Aug. 20, 2018, Michael
Fournier filed Proof of Claim No. 36 for amounts claimed to be owed
in connection with alleged personal injuries while employed by
Debtor. Based on information and belief, Mr. Fournier's claims are
covered by Insurance Policy Number OHM4510001 with coverage limits
of $1 million and Excess Insurance Policy Number OLM2510002 with
coverage limits of $9 million.
Finally, the Debtor asks a waiver of the 14-day stay imposed by
Bankruptcy Rule 6004(h) so that the sale can close expeditiously.
A copy of the Exhibit A is available at
https://tinyurl.com/ycojmmzb from PacerMonitor.com free of charge.
About Abe's Boat Rentals
Abe's Boat Rentals, Inc. -- https://www.abesboatrental.com/ -- is a
privately-owned vessel operator located in Belle Chasse, La., with
a fleet of 19 vessels. Its business segments have expanded to also
provide crews and vessels for environmental construction,
restoration projects and cleanup, plugging and abandonment, rig
decommissioning, and other new markets. The company was founded in
1979 by Abraham Ton.
Abe's Boat Rentals filed a Chapter 11 petition (Bankr. E.D. La.
Case No. 18-11102) on April 27, 2018. In the petition signed by
Hank Ton, president, the Debtor estimated $1 million to $10 million
in assets and liabilities. Congeni Law Firm, LLC, is the Debtor's
legal counsel.
ABE'S BOAT: Ton Buying Chevrolet Silverado & Cadillac CTS for $20K
------------------------------------------------------------------
Abe's Boat Rentals, Inc. asks the U.S. Bankruptcy Court for the
Eastern District of Louisiana authorize the sale of its 2011
Chevrolet Silverado and 2014 Cadillac CTS to Hendrikus "Hank" Ton
in exchange for a release of administrative wage claims up to
$20,000.
The Debtor is a Louisiana corporation headquartered in Belle
Chasse, Louisiana. It currently owns 16 vessels used to transport
supplies in connection with the offshore oil and gas industry. The
Debtor had approximately 60 to 80 employees at the outset of the
case, but has trimmed its numbers to about 15-20. The employees
hold various positions such as deck hand or ship captain engaged in
maintaining and piloting the vessels owned by the Debtor. The
downturn experienced by the Debtor and other service companies
involved in the offshore oil and gas business have been exacerbated
by recent plummeting oil prices. The Debtor's problems have been
compounded by the COVID-19 pandemic and social distancing
shut-downs.
The Debtor still has several vessel working on term jobs, which is
remarkable under current market conditions. It is in the process
of trying to salvage its term contracts via a third party
transaction involving a sale of four vessels, which will benefit
creditors and this estate by, among other things, reducing the
potential claim of mortgage holder Hancock Whitney Bank. The
Debtor's entire fleet, with the exception of a 2009 Tiara 4300
Sovran HIN SSUM1097H809 are fully encumbered by preferred ship
mortgages in favor of Hancock. The 2009 Tiara was sold for
$209,000 pursuant to Order dated April 30, 2020.
Mr. Ton is the sole owner and President of ABR. He is a chapter 11
debtor in possession in case number 18-11101. In his individual
case, Mr. Ton is a party to the adversary proceeding involving the
partition of community property, which proceeding is styled Lynda
Ronquillo Ton v. Hendrikus Edward Ton, Adv. No. 18-1129. On Aug.
14, 2019, the Court entered a Memorandum Opinion pursuant to which
virtually all of the community assets were awarded to Lynda
Ronquillo Ton, most notably for purposes of the instant Motion, all
of the community vehicles were awarded to Lynda Ronquillo Ton.
Since entry of the Property Division Order, Mr. Ton has been unable
to afford to acquire a personal vehicle.
The Debtor desires to sell its 2011 Chevrolet Silverado and 2014
Cadillac CTS to Mr. Ton in exchange for a release of administrative
wage claims up to $20,000. Mr. Ton reserves his rights, if any, to
ask allowance and payment of other administrative claims.
Per Order dated June 19, 2018, the Debtor was authorized to pay Mr.
Ton an annual salary of $127,000, which would equal approximately
$278,000 through July 6, 2020. As of June 2, 2020, Mr. Ton had
been paid $248,708, leaving an administrative wage claims of
approximately $30,000. Exhibit A is the Employee Earnings Summary
as of June 2, 2020 for Hank Ton. Mr. Ton contends that he has not
received a paycheck since mid-March 2020.
On March 29, 2017, the 2011 Chevrolet Silverado was involved in
accident and the vehicle was declared to be a total loss. Debtor
retained the vehicle, subject to a deduction of insurance claim
equal to salvage value of $4,740. Exhibit B is 2011 Chevrolet
Silverado's title and the insurance letter summarizing the salvage
value. The truck has approximately 150,000 miles. Additionally,
Exhibit B is the 2014 Cadillac CTS NADA report estimating the
vehicles value at about $13,000.
Mr. Ton desires to acquire the vehicles because otherwise, upon
liquidation of ABR, he may not have a mode of transportation due to
his personal vehicles being the subject of a property dispute with
his ex-wife. The sale will benefit the ABR estate by reducing
outstanding administrative expense claims and avoiding additional
expense associated with maintaining and insuring the vehicles
pending the chapter 7 trustee’s administration.
The Debtor believes the transfer of these two vehicles in exchange
for Mr. Ton's release of his administrative claims for unpaid wages
is reasonable under the circumstances and in the best interests of
the estate.
The Debtor also asks that the Court authorizes the sale free and
clear of any liens, claims, encumbrances or other interests that
may be asserted against the 2011 Chevrolet Silverado and 2014
Cadillac CTS. It is unaware of any liens against or interests on
the vehicles. The Debtor asks that the sale be approved free and
clear of liens, claims and interests, whether now know or unknown.
Finally, the Debtor asks a waiver of the 14-day stay imposed by
Bankruptcy Rule 6004(h) so that the sale can close expeditiously.
A copy of the Exhibit A and Exhibit B is available at
https://tinyurl.com/ybua4nzw from PacerMonitor.com free of charge.
About Abe's Boat Rentals
Abe's Boat Rentals, Inc. -- https://www.abesboatrental.com/ -- is
a
privately-owned vessel operator located in Belle Chasse, La., with
a fleet of 19 vessels. Its business segments have expanded to
also
provide crews and vessels for environmental construction,
restoration projects and cleanup, plugging and abandonment, rig
decommissioning, and other new markets. The company was founded in
1979 by Abraham Ton.
Abe's Boat Rentals filed a Chapter 11 petition (Bankr. E.D. La.
Case No. 18-11102) on April 27, 2018. In the petition signed by
Hank Ton, president, the Debtor estimated $1 million to $10
million
in assets and liabilities. Congeni Law Firm, LLC, is the Debtor's
legal counsel.
AKORN INC: Fresenius Objects to Disclosures Motion
--------------------------------------------------
Fresenius Kabi AG objects to the motion of Akorn, Inc. and its
debtor affiliates for entry of an order approving adequacy of the
Disclosure Statement.
Fresenius points out that the Disclosure Statement should not be
approved because the Plan it describes is patently unconfirmable
given the broad releases and misclassification of claims.
Fresenius asserts that the Plan's exculpation provision is too
broad, rendering the Plan unconfirmable.
Fresenius further asserts that the Plan's classification scheme is
facially improper and is yet another reason why the Plan cannot be
confirmed.
Fresenius objects on how the Disclosure Statement simply concludes,
without analysis, that the Fresenius Contract Claim should be
subordinated under Section 501(b) of the Bankruptcy Code because it
relates to the Merger Agreement.
Fresenius states that the Disclosure Statement utterly fails to
describe the Debtors' extensive prepetition misconduct, or the
potential estate causes of action that may exist as a result and
that may prove to be the only viable source of recoveries for
General Unsecured Claims.
A full-text copy of Fresenius' objection to disclosure statement
motion dated June 26, 2020, is available at
https://tinyurl.com/y95ztn57 from PacerMonitor at no charge.
Counsel for Fresenius:
L. Katherine Good
Aaron H. Stulman
POTTER ANDERSON & CORROON LLP
1313 N. Market Street, 6th Floor
Wilmington, Delaware 19801-3700
Telephone: (302) 984-6000
Facsimile: (302) 658-1192
E-mail: kgood@potteranderson.com
astulman@potteranderson.com
- and -
Lewis R. Clayton
Kelley A. Cornish
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New York, New York 10019
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
E-mail: lelayton@paulweiss.com
kcornish@paulweiss.com
- and -
Claudia R. Tobler
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
2001 K Street, NW
Washington, DC 20006
Telephone: (202) 223-7300
Facsimile: (202) 223-7420
E-mail: etobler@paulweiss.com
About Akorn, Inc.
Akorn, Inc. -- http://www.akorn.com/-- is a specialty
pharmaceutical company that develops, manufactures, and markets
generic and branded prescription pharmaceuticals, branded as well
as private-label over-the-counter consumer health products, and
animal health pharmaceuticals. Akorn is headquartered in Lake
Forest, Illinois, and maintains a global manufacturing presence,
with pharmaceutical manufacturing facilities located in Illinois,
New Jersey, New York, Switzerland, and India.
Akorn, Inc., and 16 affiliates sought Chapter 11 protection (D.
Del. Lead Case No. 20-11177) on May 20, 2020.
As of March 31, 2020, the Debtors had total assets of
$1,032,275,000, and total debt of $1,051,769,000.
The cases are assigned to Judge John T. Dorsey.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel, and Richards, Layton & Finger, P.A. as local counsel.
AlixPartners, LLP serves as the Debtors' restructuring advisor, and
PJT Partners LP is the financial advisor and investment banker.
Grant Thornton LP is the tax advisor, and Kurtzman Carson
Consultants, LLC, is the claims agent.
AKORN INC: Provepharm Objects to Disclosures Motion
---------------------------------------------------
Provepharm, Inc. objects to the motion of Akorn, Inc. and its
Debtor Affiliates for entry of an order approving adequacy of the
Disclosure Statement.
Provepharm points out that the Disclosure Statement fails to
address or describe the nature or extent of claims asserted by
Provepharm, which are significant, and significantly affect the
unsecured creditor class. Provepharm suggests addition of the
“Background” section of this Objection to the Disclosure
Statement would address this deficiency.
Provepharm objects to the Disclosure Statement because it fails to
adequately address investigations of malfeasance the Debtors
performed of the serious Malfeasance Claims. This is important
because Debtors have proposed to release Malfeasance Claims and
appear to suggest the claims have little or no value.
Provepharm asserts that the Disclosure Statement fails to disclose
or describe the consideration exchanged for the broad releases of
officers, directors, employees and advisors. This is important
because Debtors have proposed to release these claims and appear to
suggest the claims have little or no value.
Provepharm further asserts that the Disclosure Statement fails to
adequately disclose how the Debtors intend to treat the class
action settlement agreement and why this separate treatment is
appropriate. This is important because it allows the class action
settlement parties to unfairly recover more on their claims than
other similarly situated claimants.
Provepharm states that the Disclosure Statement fails to adequately
disclose (i) why the class action plaintiffs’ claims shouldn’t
be classified as 11 U.S.C. § 510(b) claims and (ii) why they are
entitled to recover $30 million in director and officer insurance
proceeds under an executory prepetition settlement agreement.
A full-text copy of Provepharm's objection to disclosure statement
motion dated June 26, 2020, is available at
https://tinyurl.com/yd9vzrty from PacerMonitor at no charge.
Counsel for Provepharm:
ASHBY & GEDDES, P.A.
William P. Bowden, Esq.
500 Delaware Avenue, 8th Floor
P.O. Box 1150
Wilmington, DE 19801
Tel: (302) 654-1888
Fax: (302) 654-2067
E-mail: wbowden@ashbygeddes.com
- and -
NORTON ROSE FULBRIGHT US LLP
Michael M. Parker
111 W. Houston Street, Suite 1800
San Antonio, TX 78205-3792
Telephone: (210) 224-5575
Facsimile: (210) 270-7205
E-mail: michael.parker@nortonrosefulbright.com
About Akorn, Inc.
Akorn, Inc. -- http://www.akorn.com/-- is a specialty
pharmaceutical company that develops, manufactures, and markets
generic and branded prescription pharmaceuticals, branded as well
as private-label over-the-counter consumer health products, and
animal health pharmaceuticals. Akorn is headquartered in Lake
Forest, Illinois, and maintains a global manufacturing presence,
with pharmaceutical manufacturing facilities located in Illinois,
New Jersey, New York, Switzerland, and India.
Akorn, Inc., and 16 affiliates sought Chapter 11 protection (D.
Del. Lead Case No. 20-11177) on May 20, 2020.
As of March 31, 2020, the Debtors had total assets of
$1,032,275,000, and total debt of $1,051,769,000.
The cases are assigned to Judge John T. Dorsey.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel, and Richards, Layton & Finger, P.A. as local counsel.
AlixPartners, LLP serves as the Debtors' restructuring advisor, and
PJT Partners LP is the financial advisor and investment banker.
Grant Thornton LP is the tax advisor, and Kurtzman Carson
Consultants, LLC, is the claims agent.
ALL STAR MATERIALS: Weaver Parties Object to Plan & Disclosure
--------------------------------------------------------------
Weaver Logistics, Inc., Weaver Aggregate Transport, Inc., Four
Trucks Leasing, LLC, and Russell Weaver d/b/a Weaver Rentals
(collectively, the "Weaver Parties"), renew their objection to the
First Amended Plan of Reorganization and the Disclosure Statement
filed by Debtors Magnum Materials, LLC and All Star Materials,
LLC.
Weaver Parties point out that the Plan is not feasible, and the
Debtors’ projections are not based on any historical fact.
Prepetition, the Debtors have not had a profitable year since
2015.
Weaver Parties assert that the Amended Plan is wholly unrealistic
and simply not feasible. Class 3 provides that the unsecured
creditors will be paid "in full." The Amended Plan does not state
whether such distribution is from net profits or what costs and
expenses are first deducted.
Weaver Parties further assert that the Plan fails the best interest
of the creditors' test under Sec. 1129(a)(7) because the Plan does
not provide for the pursuit of causes of actions against Scott
Ritchey, Steve Counts, and Marshall Gilmore (the "Causes of
Actions").
Weaver Parties claims that the Plan fails the best interest of the
creditors' test under Sec. 1129(a)(7) because the Plan does not
provide for the pursuit of causes of actions against Scott Ritchey,
Steve Counts, and Marshall Gilmore (the "Causes of Actions").
A copy of the Weaver Parties' objection to disclosure and plan
dated June 26, 2020, is available at https://tinyurl.com/y7vojlo2
from PacerMonitor.com at no charge.
Attorneys for Weaver Logistics:
Edward J. Peterson, III
Mark F. Robens
Stichter, Riedel, Blain & Postler, P.A.
110 Madison Street - Suite 200
Tampa, Florida 33602
Telephone: (813) 229-0144
E-mail: epeterson@srbp.com
mrobens@srbp.com
About All Star Materials
All Star Materials, LLC, is a foreign limited liability company
organized under the laws of the State of Delaware and authorized to
transact business in Florida since March 8, 2019. It has been in
the business of production and sale of construction materials such
as concrete block, aggregate, dirt and fill products.
Magnum Materials sought Chapter 11 protection (Bankr. M.D. Fla.
Case No. 19-03010) on May 3, 2019.
All Star Materials filed a voluntary Chapter 11 petition (Bankr.
M.D. Fla. Case No. 19-05191) on Aug. 7, 2019.
The Debtors are represented by:
Jeffrey S. Ainsworth, Esquire
BransonLaw, PLLC
1501 E. Concord Street
Orlando, Florida 32803
Tel: (407) 894-6834
Fax: (407) 894-8559
E-mail: jeff@bransonlaw.com
ALTERA INFRASTRUCTURE: Fitch Alters Outlook on 'B' IDR to Negative
------------------------------------------------------------------
Fitch Ratings has affirmed Altera Infrastructure L.P.'s Long-term
Issuer Default Rating at 'B' and senior unsecured bonds at
'B'/'RR4'. The Rating Outlook has been revised to Negative from
Stable.
Altera's ratings reflect the expected stability of earnings and
cash flows supported by long-term, fixed-fee contracts with large
counterparties. The ratings also reflect the company's leading
industry position and the critical infrastructure that it provides
through its shuttle tankers, floating production, storage and
offloading (FPSO), and floating storage and off-take operations to
deep-water oil and gas exploration and production companies.
This stability is weighed against high leverage and significant
structural subordination of Altera-level debt to first-lien secured
debt on vessels and unsecured debt at both its ring-fenced
subsidiary, Altera Shuttle Tankers LLC, and its other operating
subsidiaries. This introduces a risk that performance difficulties
leading to cash flow disruptions or an inability to refinance
vessel mortgages could adversely impact Altera's liquidity.
The ratings also acknowledge the presence of a supportive sponsor
in Brookfield Business Partners L.P., which provides operational
and financial benefits to the company, through its GP revolving
credit facility and equity contributions over the past several
years.
The ratings consider that the primary operating risk is that
liquidity to meet operating needs or debt service or principal
repayments as they come due is endangered by Altera's inability to
secure additional long-term contracts after expiration or that
there are large gaps between contracts. The structural
subordination compounds this risk. However, Fitch considers
positive industry tailwinds and relationships with investment-grade
counterparties factors that can potentially raise the credit
profile through securing additional long-term, fixed-fee contracts
on vessels coming off-hire. Operating concerns also include the
potential for underperformance at Altera's towage segment, weighing
on EBITDA growth and delaying expected leverage improvement.
The Negative Outlook reflects higher than expected near-term
leverage as well as the need to re-contract certain vessels. These
factors hold heightened concern against the backdrop of uncertainty
surrounding the impact of the coronavirus pandemic and current low
oil price environment.
KEY RATING DRIVERS
Leverage at High Tide: Leverage, defined as defined as total
consolidated debt inclusive of 50% equity credit for preferred
equity divided by consolidated EBITDA inclusive of cash
distributions from non-consolidated joint ventures, in 2020 is
expected to be elevated relative to prior targets. The uptick in
leverage is driven by reduced towage utilization expectations
(driven by coronavirus impacts and lower oil prices), reduced
redeployment options for the Varg and Voyageur FPSO units, and
marginally higher operating and G&A expenses. Leverage is expected
to return to sustainable levels in 2021 and improve over the
forecast period, driven by newbuild shuttle tanker supported EBITDA
improvement and vessel-level debt amortization.
Calmer (Financing) Seas: Altera has completed a total of 12
financing and refinancing transactions over the past year, securing
the funds needed to complete its current slate of newbuild shuttle
tankers, improving its maturity profile and reducing near-term
refinancing risk. The company's GP revolver, provided by Altera's
owner Brookfield, matures in October and an extension of that
facility is expected in the near-term.
While the company still has meaningful vessel-level debt
amortization over the coming 12-18 months, debt maturities
(requiring refinancing) are limited. Altera has less than $100
million in secured debt maturing through the end of 2021, the $250
million unsecured bond held at Altera Shuttle Tankers LLC
(ShuttleCo) maturing in August 2022 and the $700 million unsecured
note held at the Altera level maturing in July 2023. Altera has
been successful in securing both vessel-level and unsecured debt
when required, accessing the market in different conditions and
proving itself more than capable of managing its complex portfolio
of debt and assets.
Contracts Buoy Stability: FPSO and FSO, as well as time and
bareboat charter shuttle tanker contracts are akin to take-or-pay
contracts in the pipeline space and provide Altera with very good
revenue visibility. Additionally, the contracts of affreightment
the company's shuttle tankers operate under in the North Sea allow
Altera to lift all production from a given field at a specified
rate (day rate). While the COA contracts do have volume
uncertainty, Altera's historical performance (measured as
utilization) has been very consistent, supporting steady expected
cash flow over the forecast period. With a combination of these
supportive contracts covering the majority of Altera's business,
Fitch views Altera's revenue base as largely stable.
Re-contracting Risk and Optionality: The FPSO, shuttle tanker and
FSO businesses operate under long-term, fixed-fee contracts, for
the most part. There has been and likely will continue to be some
variability in results as these contracts expire and need to be
renewed/extended or vessels need to be redeployed (or sold).
Re-contracting risk is most apparent in the company's FPSO segment.
With only seven vessels in this segment and given day rates that
are meaningfully higher than other vessels in the Altera fleet, the
fate of each FPSO unit can impact overall Altera results. The
company has one FPSO unit (the Varg) currently in lay-up, one FPSO
being redelivered (the Voyageur Spirit) and three FPSO contracts
set to expire in 2022 (the Knarr, the Piranema Spirit and the
Itajai).
Altera's ability to extend these contracts, redeploy these vessels,
or extract sufficient value through a sale, represent upside
potential versus current expectations. Additionally, the company's
towage segment, which does not typically operate under long-term
fixed-fee contracts, also has the potential to contribute to
consolidated results should market conditions improve.
Structural Subordination: Altera's capital structure has a
significant amount of secured debt at the vessel level, and at its
ring-fenced subsidiary Altera Shuttle Tankers LLC. As such,
Altera-level debt is structurally subordinate to roughly $2.2
billion in subsidiary level debt. The structurally superior debt
largely encumbers 49 out of the total of 55 vessels and holds a
first-lien secured interest in those vessels. Additionally, the
company receives distributions from two non-consolidated,
off-balance sheet joint ventures, Libra and Itajai, which had
roughly $660 million in debt obligations as of March 31, 2020.
Operating performance difficulties or cash flow disruptions at the
operating vessels could negatively impact the company's ability to
service its obligations at the Altera level.
Strong Counterparties: Fitch estimates that investment-grade
customers make up approximately 70% of Altera's revenue. Given the
high percentage of strong credit quality counterparties, Altera's
risk of lost revenue due to customer default is remote. This risk
is further mitigated by the company's ability to redeploy its
shuttle tankers and towage vessels relatively quickly without
incurring significant additional costs.
Supportive Sponsor: Fitch believes Brookfield to be a supportive
sponsor of Altera. Financial support is evidenced by an equity
investment of $610 million in 2017, the repurchasing and
cancellation of two expensive series of preferred units in the same
year, and the extension of a committed $125 million unsecured GP
revolver to Altera to enhance the company's liquidity, among
others. Brookfield has demonstrated a patient approach to
developing and capitalizing slowly emerging trends. Given Altera's
ongoing refinancing needs Fitch views the potential added
flexibility afforded by being a Brookfield controlled/owned entity
as being relatively positive for Altera's credit profile. However,
Altera's ratings do not reflect any explicit notching from
Brookfield.
ESG Considerations: Altera has an ESG Relevance Score of 4 for
Group Structure and Financial Transparency as the company has an
extremely complex group structure with significant structural
subordination and provides limited transparency on ship level
financings. This has a negative impact on the credit profile and is
relevant to the rating in conjunction with other factors.
DERIVATION SUMMARY
Altera is unique among Fitch's publicly rated Midstream coverage
given its niche marine focus. From an operating perspective,
Altera's FPSO and shuttle tanker segments compare to midstream
pipeline transportation and gathering assets. Furthermore,
operations within Altera's FSO segment compare to more conventional
oil and liquids storage peers. Roughly 70% of Altera's revenue is
contracted under intermediate to long-term, take-or-pay like
contracts with large counterparties. Additionally, roughly 15% of
the company's revenue comes from shuttle tankers operating in the
North Sea under volume-exposed, intermediate-term contracts of
affreightment.
The average contract life, as of March 31, 2020, for Altera's FPSO
business is 3.2 years (inclusive of JVs and exclusive of extension
options), 6.1 years for its shuttle tankers operating under time
charters, 3.2 years for its shuttle tankers operating under
contracts of affreightment and 2.4 years for the FSO business. As
such, Altera's contract tenor compares less favorably to higher
rated midstream energy peers Cheniere Energy Partners, L.P. (CQP;
BB/Stable) and Prairie ECI Acquiror LP (Prairie; B+/Stable).
Additionally, CQP benefits from generating essentially all of its
revenue from take-or-pay style contracts. Fitch views CQP's
undiversified cash flows in LNG export as a stronger business than
Altera's offshore offerings, and, as the most significant player in
the U.S. LNG export market, CQP features size and scale
advantages.
Fitch estimates that roughly 70% of Altera's consolidated revenue
comes from investment-grade counterparties. This is consistent with
several of Fitch's 'B' category rated midstream-focused service
providers, where investment grade counterparty exposure ranges from
40% to 80. Altera's counterparty credit profile compares less
favorably to CQP, where counterparty exposure is entirely
investment-grade, but more favorably versus Prairie.
Debt held at Altera is structurally subordinate to a significant
amount of operating subsidiary level debt both on a secured and
unsecured basis, similar to CQP and Prairie. Leverage, on a
consolidated basis (defined above), is expected to be elevated
through 2021 (at or above 5.5x) due mainly to spending on growth
projects, then improve to below 5.0x later in the forecast period,
at both Altera and CQP.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within its Rating Case for the Issuer
- Oil production/development in the North Sea, offshore Brazil
and off the East Coast of Canada consistent with the Fitch price
deck, such as 2020-2021 Brent of USD35 per barrel and USD45 per
barrel, respectively;
- Currently contracted shuttle tanker, FPSO and FSO vessels
produce cash flows consistent with contract parameters over the
respective contract terms;
- FPSO and UMS vessels currently in lay-up remain unutilized over
the forecast period or until sold;
- The Voyageur Spirit and Piranema Spirit FPSO vessels are not
redeployed over the forecast period, following contract
expiration;
- Utilization rates in the North Sea shuttle tanker COA pool to
remain near 80%;
- Utilization and day rates in the towage segment improve beyond
2020, as expected increased industry activity drives improved
supply/demand dynamics for towage and offshore installation
vessels/services;
- Overall indebtedness decreases from 2020 over the forecast
period, driven largely by amortization of vessel-level debt;
- Altera successfully refinances its major FPSO and shuttle
tanker vessel-level debt to better match current contract
expirations and/or after signing new contracts.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Total Debt with Equity Credit/Adjusted EBITDA, defined as
total consolidated debt inclusive of 50% equity treatment of
preferred equity divided by consolidated EBITDA inclusive of cash
distributions from non-consolidated JVs, below 5.0x on a sustained
basis.
-- Successful contract extension/upgrade and redeployment of FPSO
and/or shuttle tanker vessels following current contract
conclusions, leading to an expected increase in cash flow
generation and decrease in leverage.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Leverage (as defined above) sustained above 6.0x;
-- Failure to secure refinancing on existing secured maturities
as well as an extension of the maturity date on the GP revolver
consistent with Fitch expectations;
-- Sustained inability to re-contract expiring FPSO or shuttle
tanker contracts or extract sufficient value through a vessel
sale;
-- Impairments to liquidity.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Limited Liquidity: Altera's liquidity consists of cash reserves of
$204 million as of March 31, 2020 and $75 million available on the
company's Brookfield-provided $125 million unsecured General
Partner revolver. The terms of certain financings at subsidiaries
of Altera cause the $204 million of cash to be deemed by Fitch as
not entirely readily available.
Fitch calculates readily available cash at the Altera level to be
approximately $50 million. Beyond the GP revolver, Altera has two
secured revolving credit facilities at the subsidiary level;
however, these two facilities are fully drawn. Furthermore, Fitch
notes the two secured revolvers function more similarly to term
loans or mortgages, where the entire amount is borrowed upfront,
and amortizations of principal and interest are expected over the
loan life.
As such, only the $125 million GP revolver at the Altera-level is
available for immediate liquidity beyond available cash. However,
beyond the current newbuild program, ongoing maintenance capital
requirements are minimal (approximately $20 million to $40 million
per year) and along with working capital needs can be handled by
Altera's ongoing operations, in Fitch's view.
Altera's credit facilities contain certain financial covenants. The
company is in compliance with these covenants, and Fitch expects it
to remain in compliance with them over the forecast period.
Altera is proceeding through a seven-vessel shuttle tanker newbuild
program that is expected to cost approximately $920 million. Three
of the seven vessels have been delivered to Altera, and two of the
delivered vessels are currently in operation. The newbuild vessels
are fully contracted, and Altera has successfully secured nearly
all financing needed to complete construction. Six of the seven
newbuild vessels are expected to be delivered by early 2021, with
the last vessel delivered in early 2022, and, once in operation,
these newbuilds are expected to improve Altera's cash generating
ability (through contracts signed at higher day rates).
Altera depends on the strength of the ship-finance and
fleet-finance markets. Fitch believes that while these debt markets
may be stressed due to coronavirus impacts and lower oil prices,
Altera will be able to refinance its subsidiary debt when due.
Presently, Altera's maturity schedule is manageable with less than
$100 million in secured debt maturing through the end of 2021. This
is in addition to $200 million to $300 million in scheduled annual
vessel-level amortization. These obligations are serviced prior to
any upstream distributions being made to intermediate holdcos and
parent entities.
Fitch believes required vessel amortization can be handled with
cash generated from operations. The GP revolver matures in October
2020, and Fitch believes the company will be able to successfully
extend the maturity date on this facility. ShuttleCo has $250
million in unsecured debt due in 2022, and Altera has $700 million
in unsecured debt maturing in 2023. Fitch assumes the company can
refinance these unsecured debts when due. While vessel mortgage
refinancing is a concern, since this requires near-constant access
to the commercial banking capital markets, the quality of Altera's
assets (with the underlying contracts/counterparties) and the
over-collateralized nature of those loans, as well as management's
track record of getting deals done when necessary, reduces those
worries.
SUMMARY OF FINANCIAL ADJUSTMENTS
As per Fitch's 'Corporate Hybrids Treatment and Notching Criteria'
cross-sector criteria, Fitch treats the relevant securities for
Altera as 50% debt and 50% equity. Referenced leverage metrics are
adjusted as follows: consolidated balances and flows are used;
preferred shares are given 50% debt credit, 50% equity credit;
distributions from investees accounted for under the equity method
of accounting are included in EBITDA and equity earnings from these
entities are excluded.
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
Altera Infrastructure L.P. has an ESG Relevance Score of 4 for
Group Structure and Financial Transparency as the company has an
extremely complex group structure with significant structural
subordination and provides limited transparency on ship level
financings. This has a negative impact on the credit profile and is
relevant to the rating in conjunction with other factors.
Except for the matters discussed, 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 Altera,
either due to their nature or to the way in which they are being
managed by the company.
AMC ENTERTAINMENT: Moody's Affirms Caa3 CFR, Outlook Negative
-------------------------------------------------------------
Moody's Investors Service has affirmed AMC Entertainment Holdings,
Inc.'s Caa3 Corporate Family Rating, Caa3-PD Probability of Default
Rating, Caa2 ratings on AMC's senior secured debt (consisting of a
$225 million revolving credit facility, $1.98 billion outstanding
senior secured term loan and $500 million senior secured first-lien
notes) and Ca ratings on the $290 million outstanding senior
subordinated notes.
Moody's also revised AMC's Probability of Default Rating to
Caa3-PD/LD from Caa3-PD following completion of a distressed debt
exchange. In connection with this rating action, Moody's assigned a
Caa2 rating to the new $300 million senior secured first-lien notes
and Ca rating to the new $1.46 billion second-lien subordinated
secured notes. The outlook remains negative.
As disclosed in the company's Form 8k filing dated July 31, 2020
[1], AMC entered into an exchange agreement with note holders to
convert approximately $2 billion of senior subordinated notes to
$1.46 billion of New Second-Lien Notes with a cash pay/PIK toggle
feature. Moody's appended the "LD" designation to the PDR to signal
that a "limited default" has occurred on the exchanged securities.
The designation results from Moody's practice of interpreting
circumstances in which a debt holder accepts a compromise offering
of a diminished financial obligation as an indication of an
untenable debt capital structure. In AMC's case, the debt exchange
was designed to reduce the interest expense burden with creditors
recognizing losses, which represents the occurrence of a deemed
default. The "LD" component will be removed after three business
days. Accordingly, the PDR will be revised back to Caa3-PD.
The New First-Lien Notes are pari passu with AMC's existing senior
secured credit facilities and the senior secured first-lien notes
that were issued in April 2020. The Ca rating on the New
Second-Lien Notes reflects the likelihood of a low anticipated
recovery. The Speculative Grade Liquidity remains SGL-4.
Following is a summary of its rating actions:
Assignments:
Issuer: AMC Entertainment Holdings, Inc.
$200 Million 10.5% Senior Secured First-Lien Notes due 2026,
Assigned Caa2 (LGD2)
$100 Million 10.5% Senior Secured First-Lien Notes due 2026,
Assigned Caa2 (LGD2)
$1,460 Million 10%/12% Cash/PIK Toggle Second-Lien Subordinated
Secured Notes due 2026, Assigned Ca (LGD5)
Affirmations:
Issuer: AMC Entertainment Holdings, Inc.
Corporate Family Rating, Affirmed at Caa3
Probability of Default Rating, Affirmed at Caa3-PD/LD (LD
appended)
$225 Million Revolving Credit Facility due 2024, Affirmed at Caa2
(LGD2)
$2,000 Million ($1,980 Million outstanding) Senior Secured Term
Loan B1 due 2026, Affirmed at Caa2 (LGD2)
$500 Million 10.500% Senior Secured First-Lien Notes due 2025,
Affirmed at Caa2 (LGD2)
GBP500 Million (US$ 4.9 Million outstanding) 6.375% Senior
Subordinated Notes due 2024, Affirmed at Ca (LGD6) from Ca (LGD5)
$600 Million ($98.3 Million outstanding) 5.750% Senior Subordinated
Notes due 2025, Affirmed at Ca (LGD6) from Ca (LGD5)
$595 Million ($55.6 Million outstanding) 5.875% Senior Subordinated
Notes due 2026, Affirmed at Ca (LGD6) from Ca (LGD5)
$475 Million ($130.7 Million outstanding) 6.125% Senior
Subordinated Notes due 2027, Affirmed at Ca (LGD6) from Ca (LGD5)
Speculative Grade Liquidity Actions:
Issuer: AMC Entertainment Holdings, Inc.
Speculative Grade Liquidity, Unchanged at SGL-4
Outlook Actions:
Issuer: AMC Entertainment Holdings, Inc.
Outlook, Remains Negative
The assigned ratings are subject to review of final documentation
and no material change to the size, terms and conditions of the
transaction as advised to Moody's.
RATINGS RATIONALE
The $1.46 billion New Second-Lien Notes were structured with a cash
pay/PIK toggle structure that enables AMC to avoid paying interest
through December 31, 2021 at its discretion, subject to certain
liquidity requirements. The cash interest option accretes at 10%
per annum while the PIK option accretes at 12% per annum. Moody's
expects that AMC will elect to PIK the notes over the coming year,
which it estimates will reduce the company's annual interest
expense by approximately 30% or nearly $90 million (calculation
includes interest on the New First-Lien Notes) and provide a
temporary lifeline. Despite the reduced interest burden, Moody's
still projects that AMC will generate negative free cash flow in FY
2020 and over the next twelve months due to the delayed reopening
of its theatres and Moody's expectation for weak moviegoer
attendance.
Nonetheless, balance sheet liquidity has improved modestly and
Moody's estimates pro forma cash balances of roughly $1 billion
following issuance of $500 million10.5% Senior Secured First-Lien
Notes in April and $300 million10.5% New First-Lien Notes that AMC
raised in conjunction with the distressed exchange and balance
sheet restructuring. The restructuring also included an amendment
to the structure of the existing unrated $600 million 2.95%
unsecured convertible notes held by SilverLake by granting them a
first-lien priority position pari passu with the company's existing
senior secured credit facilities and $500 million 10.5% Senior
Secured First-Lien Notes. The maturity of the amended convertibles
was extended to 2026 from 2024. AMC also issued 5 million new
common shares to some former holders of its senior subordinated
notes who now hold the New Second-Lien Notes.
Financial leverage, however, has not declined materially following
the distressed exchange given that pro forma gross debt outstanding
was reduced by only 4%, or roughly $238 million. This is because
AMC also issued $300 million of New First-Lien Notes funded with
new money from existing note holders (SilverLake holds $100 million
of the New First-Lien Notes), which partially compromised the
effect of converting $2 billion of senior subordinated notes to
$1.46 billion New Second-Lien Notes.
More importantly, since the New Second-Lien Notes will accrete at a
12% rate, the principal balance will increase by roughly $265
million to around $1.725 billion by December 31, 2021, essentially
canceling the 4% pro forma debt reduction. Hence, Moody's continues
to expect that leverage will remain well above or near the 9x area
over the next two years given the company's profitability and
liquidity challenges resulting from the virus outbreak, economic
recession and secular pressures facing the cinema industry.
The affirmation of the Caa3 CFR reflects the economic impact on
AMC's profitability, debt protection measures and liquidity from
the forced closure of its global theatre circuit since mid-March as
a result of the novel coronavirus outbreak. AMC currently expects
to gradually reopen most of its domestic theatres in mid-August,
which was planned to coincide with the revised release schedule of
two blockbuster films, Tenet and Mulan.
The company initially planned to reopen its theatres by June,
however this was subsequently postponed to July and then pushed to
August because the debut of both films were repeatedly postponed
due to the continuing spread of the virus in many parts of the US.
Disney recently pulled Mulan indefinitely from the release schedule
while Warner Bros.' Tenet debut was revised to August 26, 2020 in
overseas markets and September 3, 2020 in the US. The ratings
reflect the five months of zero revenue generation arising from the
suspension of most of AMC's theatre operations and the possibility
of further reopening delays.
Notably, Moody's expects OTT video streaming services will reap
benefits as film studios increasingly release movies to online
platforms concurrently with their theatrical release or very soon
thereafter as entertainment shifts back home during the pandemic.
AMC recently signed an agreement with Universal Pictures that
significantly shortens the theatrical window to only 17 days, or a
film's third weekend in theatres, from the typical 60 to 75 days.
The theatrical window gives cinema operators exclusivity to show a
film in its theatres for a period of time before the studios
release the film to on-demand streaming platforms. In exchange,
Universal will share a percentage of its streaming rental revenue
with AMC.
Additionally, with the global economy in recession this year
combined with the prospect of extended business closures, layoffs
and high rates of unemployment, an erosion of consumer confidence
will lead to a reduction in discretionary consumption. Given these
economic realities, even when the company's theatres reopen,
Moody's expects moviegoer demand will remain challenged as some
consumers will avoid public gatherings to avoid the virus.
Attendance will also be affected by reduced seating capacity and
social distancing guidelines.
Further, the supply of movies has also been impacted since the
major film studios have postponed numerous releases that were
scheduled to open during the summer months and production of films
were also halted (though some have recently resumed production as
certain regions have reopened). As such, the expected timing for
reopening AMC's theatres will negatively impact ticket sales,
especially because cinema operators generate the majority of their
annual revenue during the important May to early September box
office season.
The Caa3 rating incorporates the risk of another potential balance
sheet restructuring or bankruptcy filing to the extent AMC
experiences further delays in reopening its theatres and/or
weaker-than-expected moviegoer attendance after its theatres
reopen.
AMC benefits from its national scale and diversity as the world's
largest movie exhibitor with operations in 44 US states and 14
countries overseas (13 European and one Middle Eastern) and leading
market shares in most of its markets. Positive considerations
include AMC's variable cost structure that facilitated meaningful
cost reductions in the short-run, as well as its business line
diversity with admissions representing around 60% of total revenue
and higher margin concessions accounting for 31%.
The negative outlook reflects Moody's expectation for lower revenue
and EBITDA this year and next year coupled with weakened liquidity
as a result of the temporary closure of AMC's theatre circuit and
the secular attendance challenges facing the theatre industry. It
also incorporates the numerous uncertainties related to the social
considerations and economic impact from COVID-19 on AMC's cash
flows and liquidity, especially if the virus continues to spread in
certain regions or resurfaces later this year, forcing AMC to keep
some of its theatres closed for a protracted period, especially if
the major film studios continue to postpone release of their movies
or the company experiences a second suspension of its operations.
The negative outlook embeds Moody's view that AMC will face
negative operating cash flows through Q4 2020 despite the company's
planned theatre reopening in August. Moody's is concerned that
AMC's liquidity could be exhausted in Q4 2020 or early 2021, which
would require the company to seek additional external financing if
it is unable to reopen most of its theatres as currently planned
and/or moviegoer demand is weaker-than-expected when theatres
reopen. The company's statement in its Form 8k filing dated June 3,
2020 [2] casting substantial doubt as to whether it can continue as
a going concern as a result of lower-than-expected revenue or a
recurrence of COVID-19 is also embedded in the negative outlook.
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
implications for public health and safety. Its action reflects the
impact on AMC of the deterioration in credit quality it has
triggered, given its exposure to the US and overseas economies,
which has left it vulnerable to shifts in market demand and
sentiment in these unprecedented operating conditions.
STRUCTURAL CONSIDERATIONS
The Caa2 ratings on AMC's senior secured bank credit facilities and
senior secured first-lien notes reflect their diminished expected
recovery prospects due to the numerous uncertainties and challenges
facing the company as well as their first-out payment position
versus other debt holders. The Ca ratings on the New Second-Lien
Notes and existing senior subordinated notes reflect their low
anticipated recovery prospects given their subordinated position
relative to a sizeable amount of first-lien debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating outlook could be revised to stable if AMC reopens the
majority of its theatres in August as currently planned, attendance
revives to profitable levels and AMC returns to positive operating
cash flow.
A ratings upgrade is unlikely over the near-term given the
expectation for weak operating performance and challenged debt
protection measures. Over time, an upgrade could occur if the
company experiences positive growth in box office attendance,
stable-to-improving market share, higher EBITDA and margins,
enhanced liquidity, and exhibits prudent financial policies that
translate into an improved credit profile. An upgrade would also be
considered if financial leverage as measured by total debt to
EBITDA is sustained below 8x (Moody's adjusted) and free cash flow
as a percentage of total debt improves to the -1% to +1% range
(Moody's adjusted).
The ratings could be downgraded if Moody's expects: (i) AMC will
pursue a second distressed debt exchange; or (ii) a high likelihood
of a balance sheet restructuring or bankruptcy filing.
Headquartered in Leawood, Kansas, AMC Entertainment Holdings, Inc.
is the largest movie exhibitor in the US and globally, operating
996 movie theatres with 10,973 screens in 15 countries across the
US, Europe and the Middle East. The company is 50% owned by Dalian
Wanda Group Co., Ltd. Revenue totaled approximately $5.2 billion
for the twelve months ended March 31, 2020.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
AMERICAN CENTER FOR CIVIL: Katchen Case Remanded to Bankr. Court
----------------------------------------------------------------
In the case captioned AMERICAN CENTER FOR CIVIL JUSTICE, RELIGIOUS
LIBERTY & TOLERANCE, INC., Appellant, v. WILLIAM S. KATCHEN, ESQ.,
Appellee, Civ. Action No. 19-18115 (FLW) (D.N.J.), Chief District
Judge Freda L. Wolfson remanded Katchen's Final Application for
Compensation to the Bankruptcy Court for further proceedings.
In June 2018, the Law Offices of William S. Katchen, LLC commenced
legal representation of ACCJ-RLT in a Chapter 11 bankruptcy
proceeding that was filed by the American Center for Civil Justice,
Inc., an affiliate of ACCJ-RLT. Mr. Katchen represented ACCJ-RTL in
connection with this matter from June 2018 through August 2018.
On August 9, 2018, ACCJ-RLT retained Mr. Katchen to represent
ACCJ-RLT in connection with its own Chapter 11 bankruptcy
proceedings.
The letter of engagement between ACCJ-RLT and Mr. Katchen specified
that Mr. Katchen's hourly rate would be $895, subject to a 20%
discount because of ACCJ-RLT's non-profit status. On Sept. 10,
2018, the Bankruptcy Court approved the retention of Mr. Katchen.
On Sept. 18, 2018, Mr. Katchen filed an application for
compensation with the Bankruptcy Court. On Dec. 4, 2018, the
Bankruptcy Court entered an order granting Mr. Katchen's
application for compensation in the amount of $102,380.80, with an
additional $240.37 for expenses.
ACCJ-RTL had its first opportunity to review Mr. Katchen's billing
statements only after the Bankruptcy Court entered the December 4,
2018 Order. ACCJ-RTL took issue with several of Mr. Katchen's
billing entries. The parties attempted to resolve those issues to
no avail.
On Dec. 26, 2018, Mr. Katchen petitioned the Bankruptcy Court for
an order enforcing the Dec. 4 Fee award, and relieving him as
counsel. On Jan. 15, 2019, ACCJ-RTL responded with a cross-motion
to vacate the Dec. 4 Fee Order on the basis that Mr. Katchen had
failed to properly effect service of the application for
compensation.
On Feb. 1, 2019, Mr. Katchen filed a Substitution of Attorney with
the Bankruptcy Court, terminating his representation and adding
Collins, Vella & Casello, LLC as counsel for ACCJ-RTL.
On Feb. 4, 2019, the Bankruptcy Court entered a consent order
disposing both of Mr. Katchen's Dec. 26, 2018 petition for a final
order and of ACCJ-RTL's Januar 15, 2019 cross-motion to vacate.
On March 3, 2019, a period of 30 days elapsed from the filing of
the Substitution of Attorney and, therefore, the deadline in the
Feb. 4, 2019 Consent Order for Mr. Katchen to file his final
application for compensation had expired.
Months later, on July 26, 2019, Mr. Katchen filed, without leave, a
Final Application for Compensation with the Bankruptcy Court. The
Final Application was submitted 145 days after the deadline set
forth in the Feb. 4, 2019 Consent Order.
In the Final Application, Mr. Katchen requested additional fees in
the amount of $73,318.40 plus expenses of $265.10, incurred during
the time periods Sept. 11, 2018 through Oct. 5, 2018, and Oct. 15,
2018 through January 30, 2019, respectively.
On August 13, 2019, ACCJ-RTL filed an objection to the Final
Application. ACCJ-RTL also objected to the fee award that was
previously granted by the Bankruptcy Court in the Dec. 4, 2018
Order.
On Sept. 3, 2019, the Bankruptcy Court conducted a hearing on the
Final Application. On Sept. 6, 2019, the Bankruptcy Court entered
an Order Granting Final Allowances. The Bankruptcy Court reduced
Mr. Katchen's interim fee award -- which was previously granted in
the December 4, 2018 Order -- from $102,380.80 to $99,695.80 to
reflect excessive travel time billed. Additionally, the Bankruptcy
Court reduced amounts sought by Mr. Katchen in the Final
Application, from $73,318.40 to $64,404.20.
In sum, the Bankruptcy Court awarded fees of $164,100.00, plus
expenses of $505.47, to Mr. Katchen.
On Sept. 18, 2019, ACCJ-RTL filed a notice of appeal of the Final
Order, raising two arguments:
1. ACCJ-RTL argues that the Bankruptcy Court erred as a matter
of law in awarding fees to Mr. Katchen in connection with his
late-filed final fee application.
2. ACCJ-RTL argues that the Bankruptcy Court erred as a matter
of law in finding that Mr. Katchen's fees were reasonable and
represented actual and necessary services rendered on behalf of
ACCJ-RTL's estate.
On appeal, the District Court reviewed both the award of attorneys'
fees and the finding of excusable neglect for abuse of discretion,
"which occurs if the court's ruling was founded on an error of law
or clearly erroneous view of the facts or misapplication of the law
to the facts."
According to the District Court, a bankruptcy court's determination
of what kind of neglect will be deemed "excusable" is an equitable
one, taking into account "all relevant circumstances." Pioneer Inv.
Servs. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380, 395 (1992).
Specifically, the bankruptcy court must consider the following
factors: (1) "the danger of prejudice to the debtor; (2) the length
of the delay and its potential impact on judicial proceedings, (3)
the reason for the delay, including whether it was within the
reasonable control of the movant, and (4) whether the movant acted
in good faith."
Weighing the Pioneer factors is an integral part of applying the
excusable neglect standard, and reviewing courts have remanded
cases back to the bankruptcy court for failure to consider these
factors.
According to the District Court, because Mr. Katchen failed to file
a motion to enlarge the time to file his final fee application, he
failed to comply with Fed.R.Bankr.P. 9006(b). While case law
suggests that a bankruptcy court has discretion to excuse this
procedural defect, Mr. Katchen points to nothing on the record to
support the Bankruptcy Court's exercise of its discretion to do so
in this case; the record lacks any reasoning as to excusable
neglect.
In his response to ACCJ-RTL's objection to the final fee
application, Mr. Katchen explained his 145-day delay. Mr. Katchen
posits that "no prejudice for the delay was suffered by the
Debtor's Estate."
According to the District Court, Mr. Katchen offers no support for
this assertion.
Mr. Katchen also argues that the order authorizing his retention
allowed him to file an 11 U.S.C. section 503(b)(4) claim against
ACCJ, ACCJ-RTL's parent entity, in its Chapter 11 bankruptcy case,
and that, because there is "no logical basis to distinguish between
claims for substantial contribution" and for services rendered
pursuant to his representation as counsel for ACCJ-RTL, he should
be given the benefit of the later filing date applicable to claims
filed in ACCJ's Chapter 11 case.
The District Court says this argument fails on its face. Mr.
Katchen fails to explain how a deadline in a separate, albeit
related, Chapter 11 case has any bearing on the judicial
administration of ACCJ-RLT's Chapter 11 proceeding. He also fails
to explain why a generally applicable provision of ACCJ's Second
Modified Plan of Reorganization would trump the Feb. 4, 2019
Consent Order, which specifically addresses Mr. Katchen's fee
application.
According to the Court, Mr. Katchen fails to include much substance
regarding the reason for his delay other than "inadvertence during
counsel's recovery from a stroke."
Given the insufficiency of the record as to Mr. Katchen's claim of
excusable neglect, and the seeming lack of details that would even
allow the District Court to make such a determination in the first
instance, remand for further development of the record is
appropriate, the District Court says.
On the issue of reasonableness of fees, it appears that the
Bankruptcy Court may not have reviewed certain disputed time
entries before entering the Final Order, according to the District
Court.
The Bankruptcy Court had the duty, even absent an objection, to
question the nature of Mr. Katchen's services, the reasonableness
of those services, and the benefit enjoyed by the estate from those
services. The record did not reveal that the Bankruptcy Court
performed its independent duty to review the reasonableness of Mr.
Katchen's fee application. Without sufficient findings of fact and
conclusions of law in the record, the District Court is unable to
engage in meaningful appellate review. For these reasons, the
District Court says remand to the Bankruptcy Court is necessary so
that the Bankruptcy Court may review Mr. Katchen's Interim and
Final Fee Applications to determine if Mr. Katchen met his burden
of proving that the fees requested were reasonable.
American Center for Civil Justice, Inc. is seeking confirmation of
a Fourth Modified Plan of Reorganization.
A copy of the District Court's Memorandum Order dated July 20, 2020
is available at https://bit.ly/333OWtR from Leagle.com.
About American Center for Civil Justice
American Center for Civil Justice, Religious Liberty & Tolerance,
Inc., is a tax-exempt organization that provides legal services.
Its mission is to defend and foster religious liberty, protection
of civil and social and religious, tolerance. It is an affiliate
of American Center for Civil Justice, Inc.
ACCJ sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D.N.J. Case No. 18-26095) on Aug. 12, 2018. In the
petition signed by Jed Perr, president, the Debtor estimated assets
of $1 million to $10 million and liabilities of $10 million to $50
million. Judge Christine M. Gravelle presides over the case. The
Debtor tapped Joseph Covello, Esq., at Lynn Gartner Dunne &
Covello, LLP, as its legal counsel.
ANEW YOU MEDICAL: Aug. 5 Plan Confirmation Hearing Set
------------------------------------------------------
On June 8, 2020, Anew You Medical Weight Loss and Spa, PLLC and
Margaret Sheryl Wehner filed with the U.S. Bankruptcy Court for the
Western District of Texas, San Antonio Division, a Second Amended
Disclosure Statement in support of Plan of Reorganization.
On June 25, 2020, Judge Craig A. Gargotta approved the Disclosure
Statement and established the following dates and deadlines:
* July 27, 2020, is fixed as the last day for receipt of
acceptances or rejections of the Plan of Reorganization.
* July 27, 2020, is the deadline for all ballots to be
received.
* July 27, 2020, is fixed as the last date to object to
confirmation.
* Aug. 5, 2020, at 9:00 a.m., is the hearing on the confirmation
of the Debtor's Plan of Liquidation to be conducted by telephone
conference.
A copy of the order dated June 25, 2020, is available at
https://tinyurl.com/ycmveegj from PacerMonitor.com at no charge.
Attorney for Debtors:
Dean William Greer, Esq.
Law Offices of Dean W. Greer
2929 Mossrock, Suite 117
San Antonio, TX 78230
Tel: (210) 342-7100
Fax: (210) 342-3633
Email: dwgreer@sbcglobal.net
About Anew You Medical Weight
Loss and Spa LLC
Anew You Medical Weight Loss and Spa PLLC is a non-public
corporation founded in 2016 in the medical wellness business. It
offers a variety of services, including weight loss, IV therapy,
laser hair removal, skin treatments, coolsculpting, hormone
therapy, and hair rejuvenation.
Anew You Medical Weight Loss and Spa sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No.
19-51171) on May 15, 2019. The case is jointly administered with
the Chapter 11 case of Margaret Sheryl Wehner, the Debtor's
managing member (Bankr. W.D. Tex. Case No. 19-51172). At the time
of the filing, Anew estimated assets of between $1 million and $10
million and liabilities of the same range. The cases are assigned
to Judge Craig A. Gargotta. The Law Offices of Dean W. Greer is
Anew's legal counsel.
APACHE CORPROATION: Moody's Rates New Sr. Unsecured Notes 'Ba1'
---------------------------------------------------------------
Moody's Investors Service assigned a Ba1 rating to Apache
Corporation's proposed senior unsecured notes offering. Apache's
existing ratings, including its Ba1 Corporate Family Rating, and
negative outlook remain unchanged. The proceeds from the proposed
offering will be used to fund an announced tender offer for
outstanding senior notes and repay revolver borrowings.
"This senior note offering extends Apache's debt maturity profile
and liquidity runway to weather this period of low oil and gas
prices," commented Pete Speer, Moody's Senior Vice President.
Assignments:
Issuer: Apache Corporation
Senior Unsecured Regular Bond/Debenture, Assigned Ba1 (LGD4)
RATINGS RATIONALE
Apache's proposed and existing senior unsecured notes are rated
Ba1, the same as the CFR. The company's revolving credit facility
and senior notes are all unsecured with no subsidiary guarantees.
The new senior notes will be used to fund a simultaneously
announced tender offer for existing senior notes spread across
multiple maturities, but targeting nearer-term maturities. The
remaining proceeds will be used to repay revolver borrowings, with
the overall transaction supporting the company's good liquidity
position by extending its maturity profile and increasing available
borrowing capacity on its revolver.
Apache's Ba1 CFR reflects the benefits of its large asset base that
is diversified geographically, geologically and by hydrocarbon. Its
mix of unconventional and conventional reservoirs moderates its
capital intensity compared to its more shale focused peers.
Apache's property portfolio benefits from having producing assets
in the North Sea and Egypt that provide exposure to Brent oil
pricing and generates meaningful cash flow even in a low oil price
environment. This adds diversification to its large acreage
position in the Permian Basin. The company also has a prospective
acreage position in Suriname with three discoveries to date. This
could prove to be a very valuable asset, but this requires
significant development and therefore production and cash flow
generation will not begin for several more years.
The company is challenged by high debt levels and weak credit
metrics relative to similarly rated peers even prior to the oil
price collapse in March 2020. Apache has substantially cut its
dividend and capital spending to minimize negative free cash flow
in 2020 and generate free cash flow as commodity prices recover to
reduce debt. These decisive steps will enable the company to
maintain solid liquidity and achieve some debt reduction in 2021.
However, low capital investment will drive declining production and
reserves that will result in higher E&P leverage metrics, while
cash flow-based credit metrics are expected to be weaker than most
peers even when oil prices recover to $50/bbl or higher.
The negative outlook reflects the uncertain pace of recovery in oil
prices over the remainder of 2020 and 2021. If commodity price
recovery is limited, then declines in production and reserves could
accelerate and Apache's metrics will not improve to levels
supportive of its Ba1 rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Apache's ratings could be downgraded if commodity prices remain
low, the company's production and reserves fall faster than Moody's
forecasts or if debt reduction over the medium term falls short of
expectations. Retained Cash Flow (RCF)/Debt sustained below 20%,
Leveraged Full-Cycle Ratio sustained below 1x, or Debt/PD above
$12/boe could result in a ratings downgrade.
In order for a ratings upgrade to be considered, Apache has to
substantially reduce outstanding debt and grow production and
reserves funded with internally generated cash flow at competitive
returns in a more supportive commodity price environment. A LFCR
above 1.5x, RCF/Debt above 30%, and Debt/PD approaching $8/boe
could support a ratings upgrade.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
Apache Corporation is a large independent exploration and
production company headquartered in Houston, Texas. The company
operates in the Permian Basin in west Texas and southeastern New
Mexico, with acreage spanning the Midland, Delaware and Central
Basin Platform sub-basins. Core international operating areas are
in Egypt and the North Sea, and an exploration program is underway
in Suriname.
AT HOME GROUP: Reports Preliminary Q2 Fiscal 2021 Results
---------------------------------------------------------
At Home Group Inc. announced certain preliminary unaudited results
for the second quarter ended July 25, 2020.
Lee Bird, chairman and chief executive officer, stated, "We are
emerging from this pandemic stronger and even better positioned,
and we believe we are gaining meaningful market share. As a home
decor category killer, we are becoming the go-to place for
consumers looking for a one-stop shop that offers a wide and deep
assortment, compelling everyday low prices, the convenience of
omnichannel shopping, and safe social distancing afforded by our
large store format.
"Our business continued to be strong following the initial
re-opening period that was likely impacted by pent-up demand and
stimulus spending. Our momentum continued despite competitor
re-openings, liquidations and a resurgence in coronavirus cases in
certain markets. We expect to report the best quarter in our
history as a public company in terms of comparable store sales,
sales, and profitability, and the lowest leverage ratio. At the
same time, we remain excited about the large, untapped opportunity
in front of us."
Preliminary Second Quarter Fiscal 2021 Results
* Net sales of approximately $515 million and comparable store
sales increase of approximately 42%
* Net income of at least $82 million and adjusted EBITDA of at
least $150 million
* Total liquidity (cash plus more than $250 million of
availability under its existing credit facility) of more
than $280 million, including approximately $33 million in
net proceeds from sale leaseback transactions
* Net Debt to Adjusted EBITDA ratio of approximately 1.5x on a
trailing twelve months basis compared to 5.4x at the end of
first quarter fiscal 2021.
Sale-Leaseback Transactions
In July 2020, the company sold three of its properties in Grand
Chute, Wisconsin; Cincinnati, Ohio; and Lutz, Florida for a total
of approximately $33 million. Contemporaneously, with the closing
of the sale, the company entered into leases pursuant to which the
Company leased back the properties.
About At Home Group Inc.
At Home (NYSE: HOME), is a home decor retailer offering more than
50,000 on-trend home products to fit any budget or style, from
furniture, mirrors, rugs, art and housewares to tabletop, patio and
seasonal decor. At Home is headquartered in Plano, Texas, and
currently operates 219 stores in 40 states.
At Home recorded a net loss of $214.4 million for the year ended
Jan. 25, 2020, compared to net income of $48.99 million for the
year ended Jan. 26, 2019. As of Jan. 25, 2020, the Company had
$2.68 billion in total assets, $2.07 billion in total liabilities,
and $608.61 million in total shareholders' equity.
* * *
As reported by the TCR on April 1, 2020, S&P Global Ratings lowered
its issuer credit rating on At Home Group Inc. by two notches to
'CCC+' from 'B'. "The downgrade reflects our view that At Home's
operating performance will be substantially weakened this year due
to the coronavirus pandemic following a challenging fiscal year
2020.
AVIS BUDGET: Moody's Rates $350MM Senior Unsecured Notes 'B3'
-------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Avis Budget Car
Rental, LLC's issuance of $350 million of senior unsecured notes.
All other ratings are unaffected including Avis: corporate family
rating at B2; secured credit facility at Ba2; senior unsecured debt
at B3; and, Avis Budget Finance PLC: senior unsecured at B3. The
speculative grade liquidity rating is SGL-3. The outlook is
negative.
The B3 rating of the notes reflect the pari passu ranking with
Avis's other senior unsecured debt. Proceeds from the offering will
be used to redeem $100 million of outstanding senior unsecured
notes due 2023, with the remainder used to support the Avis'
liquidity position.
The following rating was assigned
Assignments:
Issuer: Avis Budget Car Rental, LLC
Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5)
RATINGS RATIONALE
Avis' B2 CFR and other ratings reflect the considerable stress
facing Avis and the global car rental sector due to the coronavirus
outbreak and the resulting decline in business and leisure travel.
A significant portion of Avis's rentals depend on travel, both
business and leisure. Moody's expects that air travel will contract
by approximately 70% during 2020, and that 2021 travel rates will
be 35% to 55% below those of 2019.
The ratings also recognize the progress Avis made during the second
quarter in contending with this environment. Key areas of progress
include: reducing year-over-year fleet size by 26% (compared with
an earlier goal of a 20% reduction); the achievement of $1 billion
in cost reductions during the second quarter; and, constraining the
second quarter rate of cash burn to $580 million compared with the
company's earlier expectation of a $900 million burn.
In addition, Avis' June 2020 cash and revolver liquidity position
(pro forma for the new $350 million debt issuance) will stand at
$1.5 billion, compared with a March liquidity position of $1.4
billion. With minimal corporate and fleet debt maturities needing
to be refunded during the balance of 2020, Avis maintains adequate
liquidity.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial credit implications of public
health and safety. Avis has minimal environmental risk associated
with the ownership and operation of its vehicle fleet. The company
also maintains adequate relationships with its employees,
regulatory bodies and the communities in which it operates.
The negative outlook reflects the continuing risk of a more
challenging operating environment as a result of: the scope of the
air travel downturn; the possibility of spreading consumer economic
weakness; and, the potential disruption in the used car market
pricing structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded in the event of: 1) lack of steady
recovery in demand from the very weak 2nd quarter levels; 2) a
second coronavirus wave; or 3) broader weakness in the consumer
economy. A downgrade could also result from any disruption in the
used car market's pricing or volume structure, or in Avis' ability
to manage rental fleet size in line with evolving demand
conditions. Maintaining a liquidity position that comfortably
covers all twelve-month cash requirements will be essential in
maintaining the current rating.
An upgrade of Avis' rating during the next two years is unlikely.
Factors that would contribute to an upgrade include: a successful
realignment of Avis' rental fleet with sustainable demand levels; a
recovery in air travel; and, financial performance that includes an
EBITA margin approximating 4% and EBITA/interest exceeding 2.5x.
Avis Budget Group, Inc. is one of the world's leading car rental
companies through its Avis and Budget brands. The company's Zipcar
brand, is the world's leading car sharing network. The company's
revenues for the twelve months through June 2020 were $7.4
billion.
The principal methodology used in these ratings was Equipment and
Transportation Rental Industry published in April 2017.
BAUMANN & SONS: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
ABA Transportation Holding Co. Inc. 20-72599
3355 Veterans Memorial Highway
Ronkonkoma, NY 11779
Brookset Bus Corp. 20-72600
3355 Veterans Memorial Highway
Ronkonkoma, NY 11779
Baumann Bus Company, Inc 20-72602
3355 Veterans Memorial Highway
Ronkonkoma, NY 11779
Business Description: Baumann Bus Company, Inc. is a school
bus company based in Ronkonkoma, New
York. The Court has entered an order
granting motion for joint administration
on Lead Case: Baumann & Sons Buses, Inc.
(20-72121) with Member Cases: Acme Bus
Corp (20-72122); ABA Transportation
Holding Co. Inc. (20-72599); Brookset
Bus Corp. (20-72600); and Baumann Bus
Company, Inc. (20-72602).
Chapter 11 Petition Date: August 3, 2020
Court: United States Bankruptcy Court
Eastern District of New York
Judge: Hon. Robert E. Grossman
Debtors' Counsel: Sean C. Southard, Esq.
KLESTADT WINTERS JURELLER SOUTHARD &
STEVENS, LLP
200 West 41st Street
17th Floor
New York, NY 10036-7203
Tel: (212) 972-3000
Email: ssouthard@klestadt.com
Debtors'
Business
Broker &
Advisor: MALTZ AUCTIONS, INC.
D/B/A MALTZ AUCTIONS
Debtors'
Financial
Advisor: RSR CONSULTING, LLC
Debtor's
Special
Counsel: HAMBURGER, MAXSON, YAFFE & MCNALLY, LLP
ABA Transportation's
Estimated Assets: $0 to $50,000
ABA Transportation's
Estimated Liabilities: $10 million to $50 million
Brookset Bus'
Estimated Assets: $1 million to $10 million
Brookset Bus'
Estimated Liabilities: $10 million to $50 million
Baumann Bus'
Estimated Assets: $1 million to $10 million
Baumann Bus'
Estimated Liabilities: $10 million to $50 million
The petitions were signed by Ronald Baumann, president.
Copies of the Debtors' petitions are available for free at
PacerMonitor.com at:
https://is.gd/EqWQmQ
https://is.gd/zdwcmr
https://is.gd/lGBx3g
BAYSIDE WASTE: Aug. 26 Auction of Substantially All Assets Set
--------------------------------------------------------------
Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the
Middle District of Florida authorized the bidding procedures
proposed by Bayside Waste Services, LLC in connection with the sale
of substantially all assets to Pineywoods Capital, LLC or its
designee for $875,000, subject to overbid.
A hearing on the Motion was held on July 16, 2020, 2019, at 2:00
p.m.
The Debtor shall, within two business days from the date of entry
of the Order, mail a copy of the Order, to all the interested
parties, and the Debtor will thereafter file a certificate of
service with the Court.
The Court approved the form and manner of such notice as being
adequate and sufficient notice of the Bid Procedures, the proposed
sale of the Assets (including the assumption and/or assignment of
the Contracts), and the objection deadlines set forth therein.
By no later than two business days after the date of the entry of
the Order, the Debtor will file with the Court, and serve notice
thereof on interested parties as required by the Bankruptcy Code
and the Federal Rules of Bankruptcy Procedure, (i) the Sale Motion,
and (ii) the Assignment Motion.
Any creditor or other party in interest objecting to the Sale
Motion or the sale of the Assets to the Purchaser must file written
objections with the Court and serve same upon the parties set forth
so as to be actually received by all such parties by no later than
5:00 p.m. (EDT) on Aug. 20, 2020.
Any lessor or other party to any Contract to be assumed and/or
assigned to the Purchaser that objects to, and/or asserts any cure
claims, defaults or any other claims against the Debtor in
connection with, the proposed assumption and/or assignment of its
Contract must file with this Court, by no later than 5:00 p.m.
(EDT) on Aug. 20, 2020, any objection to the assumption and/or
assignment of its Contract and/or assertion of claim or default.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Aug. 20, 2020 at 5:00 p.m. (EDT)
b. Initial Bid: An increase of at least $10,000 above the
Stalking Horse Bid plus the Break-Up Fee for a total initial
overbid equal to the amount of the Break-Up Fee plus $10,000 (or
$36,250)
c. Deposit: 3% of the Bid, made payable to and delivered to
Stichter, Riedel, Blain & Postler, P.A., the counsel to the Debtor
d. Auction: An auction to consider any competing bids in
respect of the Assets will be held at the office of Stichter,
Riedel, Blain & Postler, P.A., at 10:00 a.m. (EDT) on Aug. 26,
2020, provided that Stichter Riedel will make arrangements to allow
Bidders to participate via video conference.
e. Bid Increments: $5,000
f. Sale Hearing: Aug. 27, 2020, at 1:30 p.m.
g. Sale Objection Deadline: Aug. 20, 2020 at 5:00 p.m. (EDT)
h. Break-Up Fee: $26,250
A copy of the Bidding Procedures Order is available at
https://tinyurl.com/y3wwv8y5 from PacerMonitor.com free of charge.
About Bayside Waste Services
Bayside Waste Services, LLC, a Tampa, Florida-based provider of
environmental services, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-02359), on March 18,
2020. The petition was signed by Paul J. Simon, its manager. As
of Feb. 29, 2020, the Debtor had $769,198 in total assets and
$1,376,899 in total liabilities. The Debtor tapped Stichter Riedel
Blain & Postler, P.A. as its counsel.
BEEGE HOLDING: Hires Agentis PLLC as Bankruptcy Counsel
-------------------------------------------------------
BeeGe Holding Corp and Beesion Technologies, LLC, seeks authority
from the US Bankruptcy Court for the Southern District of Florida
to hire Agentis PLLC as its legal counsel.
The professional services Agentis will render are:
a. advise the Debtors with respect to its powers and duties as
debtor-in-possession and the continued management of its business
operations;
b. advise the Debtors with respect to its responsibilities in
complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the Court;
c. prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of the case;
d. protect the interests of the Debtors and the estate in all
matters pending before the Court; and
e. represent the Debtors in negotiations with its creditors in
the preparation of a plan.
Agentis received the sum of $45,000 from Beesion, which sum of
$31,742.55 was applied to its pre-petition fees and costs,
including $3,434.00 in Bankruptcy Court filing fees for each
Debtor.
The firm can be reached through:
Jacqueline Calderin, Esq.
AGENTIS PLLC
55 Alhambra Plaza, Suite 800
Coral Gables, FL 33134
Tel: 305-722-2002
Email: jc@agentislaw.com
About BeeGe Holding Corp
BeeGe Holding Corp. and Beesion Technologies, LLC, filed its
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (S.D. Fla. Lead Case No. 20-17683) on July 15, 2020. At the
time of filing, the Debtor estimated $50,000 in assets and
$1,000,001 to $10 million in liabilities. Jacqueline Calderin, Esq.
at Agentis PLLC represents the Debtor as counsel.
BEN F. BLANTON: Seeks to Hire Lathrop GPM as Legal Counsel
----------------------------------------------------------
Ben F. Blanton Construction, Inc. seeks approval from the United
States Bankruptcy Court for the Eastern District of Missouri to
hire Lathrop GPM LLP as its counsel.
The professional services which Lathrop GPM is to render includes:
a. analysis of the Debtor's financial condition and rendering
advice in determining whether to file a petition in bankruptcy;
b. preparation and filing of any petition, schedules,
statement of financial affairs, plan, disclosure statement and all
other papers which may be necessary or appropriate in the
bankruptcy proceeding;
c. representation of the Debtor at the meeting of creditors,
the hearing and any adjourned hearings thereof;
d. representation of the Debtor in adversary proceedings and
other contested bankruptcy matters; and
e. federal and state court lawsuits and administrative
proceedings related or ancillary to the bankruptcy proceeding.
Lathrop GPM's standard hourly rates are from $220 to $685 per hour
for attorneys and $140 to $245 per hour for paralegals.
Debtor has paid Lathrop GPM a retainer of $25,000 at the time of
the filing of the Chapter 11 Petition.
Lathrop GPM represents no interest adverse to the Debtor in the
matters upon which it is to be engaged as attorney for Debtor,
according to court filings.
The firm can be reached through:
Wendi Alper-Pressman, Esq.
LATHROP GPM LLP
7701 Forsyth, Suite 400
Clayton, MO 63105
Tel: 314-613-2800
Email: wendl.alper-pressman@lathropgpm.com
About Ben F. Blanton Construction, Inc.
Ben F. Blanton Construction, Inc. --
https://www.blantonconstruction.com -- is a construction
management, design/build, and general contracting company with
headquarters in the greater metropolitan St. Louis, MO area.
Ben F. Blanton Construction, Inc. filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo.
CAse No. 20-43555) on July 16, 2020. The petition was signed by
Jeffrey M. Blanton, president. At the time of filing, the Debtor
estimated $10 million to $50 million in both assets and
liabilities. Wendi Alper-Pressman, Esq. at LATHROP GPM LLP
represents the Debtor as counsel.
BLACKWOOD REDEVELOPMENT: PSB Credit Objects to Modified Disclosure
------------------------------------------------------------------
PSB Credit Services, Inc., submitted an objection to the First
Modified Disclosure Statement and Plan of Reorganization of
Blackwood Redevelopment Co. Inc.
PSB Credit Services points out that the First Modified Disclosure
Statement fails to provide an adequate valuation of both the
Property and the Liquor License.
PSB Credit Services states that the information provided in the
First Modified Disclosure Statement with respect to the Lender
fails to inform the Court what the Lender will receive from the
liquidation of the Property and when it is expected to be
liquidated.
PSB asserts that the First Modified Plan from the sale of the
Property subject to the Lender's Mortgage. However, the First
Modified Disclosure Statement fails to contain a proposal to pay a
deficiency to the Lender if the liquidation proceeds are
insufficient to satisfy the outstanding obligations.
PSB Credit Services further asserts that the Debtor's First
Modified Disclosure Statement fails to properly disclose the
obligations and rights as to all creditors.
A full-text copy of PSB Credit's objection to disclosure and plan
dated June 25, 2020, is available at https://tinyurl.com/yb35qzzf
from PacerMonitor.com at no charge.
Attorney for PSB Credit Services:
Kyle F. Eingorn, Esquire
DEMBO, BROWN & BURNS LLP
1300 Route 73, Suite 205
Mount Laurel, NJ 08054
Tel: (856) 354-8866
E-mail: keingorn@dblegal.com
About Blackwood Redevelopment
Blackwood Redevelopment Co. Inc., based in Blackwood, NJ, filed a
Chapter 11 petition (Bankr. D.N.J. Case No. 19-15937) on March 25,
2019. In the petition signed by Daniel Riiff, president, the
Debtor disclosed $1,400,000 in assets and $4,342,768 in
liabilities. Scott H. Marcus, Esq., at Nehmad Perrillo Davis &
Goldstein, PC, serves as bankruptcy counsel to the Debtor.
BLANCO RIVERWALK: Combined Plan & Disclosure Confirmed by Judge
---------------------------------------------------------------
Judge Tony M. Davis has entered an order confirming the Modified
Combined Disclosure Statement and Plan of Reorganization of Blanco
Riverwalk Business Park, LLC.
All claims of a kind specified in Section 507(a)(2) will be paid in
full by the Effective Date of the Plan.
The Debtor and, as applicable, the Reorganized Debtor, shall timely
pay all fees required to be paid by 28 U.S.C. Sec. 1930(a)(6) and
will timely file all reports required to be filed pursuant to Fed.
R. Bankr. P. 2015 and Local Rule 2015 until the Bankruptcy Case is
closed, dismissed, or converted.
A copy of the order dated June 25, 2020, is available at
https://tinyurl.com/ya3z4rke from PacerMonitor.com at no charge.
Counsel for the Debtor:
STREUSAND, LANDON, OZBURN and LEMMON, LLP
Stephen W. Lemmon
Rhonda Mates
1801 S. MoPac Expressway, Suite 320
Austin, Texas 78746
Tel: (512) 236-9900
Fax: (512) 236-9904
About Blanco Riverwalk Business Park
Blanco Riverwalk Business Park LLC is owned 50% by BRBP Partners
LLC and 50% by Vista Del Blanco Ltd. Blanco Riverwalk owns
approximately 117 acres of land with significant IH 35 and Blanco
River frontage in San Marcos, Hays County, Texas located along the
west side of IH 35 between the Blanco River Bridge and Yarrington
Road, within the City limits of San Marcos, Texas.
Blanco Riverwalk Business Park, LLC, sought Chapter 11 protection
(W.D. Tex. Case No. 19-11647) on Dec. 2, 2019. The Debtor was
estimated to have assets of $10 million to $50 million and
liabilities of $1 million to $10 million. The Hon. Tony M. Davis
is the case judge. Streusand, Landon, Ozburn & Lemmon, LLP, is the
Debtor's counsel.
BOND FOUNDRY: Case Summary & 10 Unsecured Creditors
---------------------------------------------------
Debtor: Bond Foundry, LLC
55 Broadway, 18th Floor
New York, NY 10006
Business Description: Bond Foundry, LLC is engaged in activities
related to real estate.
Chapter 11 Petition Date: August 2, 2020
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 20-11793
Judge: Hon. Shelley C. Chapman
Debtor's Counsel: Mark Frankel, Esq.
BACKENROTH FRANKEL & KRINSKY, LLP
800 Third Avenue
New York, NY 10022
Tel: (212) 593-1100
Email: mfrankel@bfklaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by David Goldwasser, managing member of GC
Realty Advisors, CRO.
A copy of the petition containing, among other items, a list of the
Debtor's 10 unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/fDESfT
BRIGGS & STRATTON: Taps Houlihan Lokey as Investment Banker
-----------------------------------------------------------
Briggs & Stratton Corporation and its affiliates received
provisional approval from the U.S. Bankruptcy Court for the Eastern
District of Missouri to employ Houlihan Lokey Capital, Inc. as
their investment banker.
The firm will render the following services:
(a) Assist Debtors in the development and distribution of
selected information, documents and other materials in an effort to
create an interest in and to consummate any transaction;
(b) Solicit and assist Debtors in evaluating indications of
interest and proposals regarding any transaction from current or
potential lenders and other counterparties;
(c) Assist Debtors in the development, structuring,
negotiation and implementation of any transaction;
(d) Provide expert advice and testimony regarding financial
matters related to any transaction, if necessary;
(e) Attend meetings with Debtors' Board of Directors, creditor
groups, official constituencies and other interested parties;
(f) Review Debtors' financial condition, liquidity,
operations, competitive environment, prospects and related
matters;
(g) Analyze Debtors' current operational strategy and capital
structure; and
(h) Provide strategic advice with regard to various
alternatives being considered by Debtors.
Houlihan Lokey will compensated as follows:
(a) Initial Fee. Debtors have paid a nonrefundable cash fee of
$200,000.
(b) Monthly Fees. Debtors shall pay Houlihan Lokey in advance,
without notice or invoice, a nonrefundable cash fee of $200,000.
(c) Transaction Fee. Debtors shall pay Houlihan Lokey the
following transaction fees.
(i) Restructuring Transaction Fee. Upon the earlier to
occur of: (A)
in the case of an out-of-court restructuring transaction, the
closing of such restructuring transaction; and (B) in the case of
an in court restructuring transaction, the date of confirmation of
a plan of reorganization under Chapter 11 of the Bankruptcy Code
pursuant to an order of the applicable bankruptcy court, Houlihan
Lokey shall earn, and Debtors, solely, shall promptly pay to
Houlihan Lokey, a cash fee equal to 1.05% of the total principal
amount of Debtors' outstanding indebtedness for borrowed money that
is, without duplication, exchanged, tendered, materially amended,
retired, repaid or extinguished in such restructuring transaction.
(ii) Financing Transaction Fee. Upon the closing of each
financing transaction, Houlihan Lokey shall earn, and Debtors,
solely, shall thereupon pay immediately and directly from the gross
proceeds, if any, of such financing transaction, as a cost of such
financing transaction, a cash fee equal to the sum of: (A) 1.0% of
the aggregate principal amount of any indebtedness for borrowed
money raised, placed or committed and available at close that is
senior to other indebtedness of Debtors, secured by a first
priority lien and unsubordinated, with respect to both lien
priority and payment, to any other indebtedness for borrowed money
of Debtors (other than with respect to debtor-in-possession
financing); (B) 3.0% of the aggregate principal amount of any
indebtedness for borrowed money raised, placed or committed and
available at close that is secured by a lien (other than a first
lien), is unsecured or is contractually subordinated. The financing
transaction fee payable under the Engagement Agreement shall be
subject to a $1,500,000 minimum financing transaction fee payable
upon the first closing of a financing transaction.
(iii) Amendment Transaction Fee. Upon the closing of any
amendment transaction, Houlihan Lokey shall earn, and Debtors,
solely, shall promptly pay to Houlihan Lokey, a cash fee of
$250,000. In the event more than one amendment transaction closes
contemporaneously (or substantially contemporaneously) with
Debtors' lenders or note holders, then the total amendment
transaction fees in respect of such amendment transactions shall be
no greater than $350,000. If one or more amendment transaction fees
are earned and payable, 50% of each amendment transaction fee shall
be credited against any restructuring transaction fee or sale
transaction fee to which Houlihan Lokey becomes entitled under the
engagement agreement.
(iv) Sale Transaction Fee. Upon the closing of a sale
transaction, Houlihan Lokey shall earn, and Debtors shall thereupon
pay immediately and directly from the gross proceeds of such sale
transaction, as a cost of such sale transaction, a cash fee based
upon Aggregate Gross Consideration (AGC), calculated in the manner
set forth in (A) and (B) below; subject, however, to a minimum sale
transaction fee of $4,000,000:
A. For AGC up to $550 million: 1.25% of AGC, plus
B. For AGC in excess of $550 million: 3.00% of such
incremental AGC.
If more than one sale transaction is consummated, Houlihan Lokey
shall be compensated based on the AGC from all sale transactions,
calculated in the manner set forth in (A) and (B) below; subject,
however, to a minimum sale transaction fee of (x) the greater of
$1,000,000 or 4% of AGC for each sale transaction with AGC of less
than $40 million, and (y) $1,750,000 for each other sale
transaction:
A. For AGC up to $550 million: 1.50% of AGC, plus
B. For AGC in excess of $550 million: 3.00% of such
incremental AGC.
During the 90 days immediately preceding the petition date, Debtors
paid Houlihan Lokey $950,000 in fees and $12,541.10 in expense
reimbursements, which includes $10,000 paid on account of
anticipated expenses. Other than as set forth herein, Houlihan
Lokey did not receive any payments from Debtors during the 90 days
immediately preceding the Petition Date. As of the petition date,
Debtors did not owe Houlihan Lokey for any fees or expenses
incurred prior to the petition date.
Reid Snellenbarger, a managing director at Houlihan Lokey,
disclosed in court filings that the firm is a "disinterested
person" within the meaning of Bankruptcy Code Section 101(14).
The firm can be reached through:
Reid Snellenbarger
Houlihan Lokey Capital, Inc.
111 South Wacker Dr., 37th Fl.
Chicago, IL 60606
Telephone: (312) 456-4700
Facsimile: (312) 346-0951
About Briggs & Stratton
Briggs & Stratton Corporation is a producer of gasoline engines for
outdoor power equipment and a designer, manufacturer and marketer
of power generation, pressure washer, lawn and garden, turf care,
and job site products. Its products are marketed and serviced in
more than 100 countries on six continents through 40,000 authorized
dealers and service organizations. Visit https://www.basco.com for
more information.
Briggs & Stratton Corporation and four affiliates concurrently
filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mo. Lead Case No. 20-43597) on July
20, 2020. The petitions were signed by Mark A. Schwertfeger, senior
vice president and chief financial officer. Briggs & Stratton
disclosed total assets of $1,589,398,000 and total liabilities of
$1,350,058,000 as of March 29, 2020.
Hon. Barry S. Schermer oversees the cases.
Debtors have tapped Weil, Gotshal & Manges LLP as bankruptcy
counsel; Carmody MacDonald P.C. as local counsel; Foley & Lardner
LLP as corporate counsel; Houlihan Lokey Inc. as investment banker;
Ernst & Young, LLP as restructuring and tax advisor; Deloitte LLP
as auditor and tax consultant; and Kurtzman Carson Consultants, LLC
as claims and noticing agent.
BROOKS BROTHERS: Aug. 10 Auction of Substantially All Assets Set
----------------------------------------------------------------
Judge Christopher R. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware authorized the bidding procedures proposed by
Brooks Brothers Group, Inc. and its debtor-affiliates in connection
with the sale of their business to SPARC Group, LLC, pursuant to
their Asset Purchase Agreement, executed July 23, 2020, for (i) an
aggregate Dollar amount equal to (A) $305 million, minus (B) the
amount of the Credit Bid (if any), plus (C) the Estimated Inventory
Adjustment Amount; minus (D) the Customer Deposit Balance; (ii) at
the option of the DIP Lenders, an aggregate credit bid of all or
any portion of the DIP Obligations; and (iii) the Buyer's
assumption of the Assumed Liabilities, subject to overbid.
The Stalking Horse Bid Protections are approved in their entirety.
The Termination Payment will be payable in accordance with, and
subject to the terms of, the Stalking Horse Agreement and the
Bidding Procedures.
The Break-Up Fee and the Expense Reimbursement will constitute
allowed superpriority administrative expense Claims with priority
over all other administrative expenses.
The Stalking Horse Bidder and the Prepetition ABL Agent are
Qualified Bidders and the bid reflected in the Stalking Horse Bid
(including as may be increased at the Auction (if any)) is a
Qualified Bid, as set forth in the Bidding Procedures.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Aug. 6, 2020 at 4:00 p.m. (ET). The Debtors
will identify those bids that qualify as Qualified Bids by Aug. 9,
2020 at 4:00 p.m. (ET).
b. Initial Bid: The Purchase Price must include an amount in
cash sufficient to satisfy the Termination Payment of $10,150,000.
c. Deposit: 10% of the Purchase Price
d. Auction: If more than one Qualified Bid is timely received
(in addition to the Stalking Horse Bid), the Auction will be
conducted virtually on Aug. 10, 2020 at 10:00 a.m. (ET) or at such
other time and location as the Debtors, after consultation with
counsel to the Committee, the Prepetition ABL Agent, and its
advisors, and after providing notice to the Qualified Bidders and
Sale Notice Parties, may determine in their reasonable business
judgment.
e. Bid Increments: $1 million
f. Sale Hearing: Aug. 14, 2020 at 10:00 a.m. (ET)
g. Sale Objection Deadline: Aug. 8, 2020 at 11:59 p.m. (ET)
The Sale Notice is approved. As soon as practicable, but no later
than one calendar day after entry of this Order, the Debtors cause
the Sale Notice upon the Sale Notice Parties.
The Assumption and Assignment Procedures and the Cure Notice are
approved. The Debtors will file the Cure Notice with the Court and
serve the Cure Notice on the Contract Counterparties no later than
seven calendar days before the Supplemental Objection Deadline.
Notwithstanding the applicability of any of Bankruptcy Rules
6004(h), 6006(d), 7062, 9014, or any other provisions of the
Bankruptcy Rules or the Local Rules stating the contrary, the terms
and conditions of the Order will be immediately effective and
enforceable upon its entry, and any applicable stay of the
effectiveness and enforceability of the Order is waived.
A copy of the Bidding Procedures is available at
https://tinyurl.com/y354rhj5 from PacerMonitor.com free of charge.
About Brooks Brothers Group
Brooks Brothers -- https://www.brooksbrothers.com/ -- is a clothing
retailer with over 1,400 locations in over 45 countries. While
famous for its clothing offerings and related retail services,
Brooks Brothers is known as a lifestyle brand for men, women, and
children, which markets and sells footwear, eyewear, bags, jewelry,
watches, sports articles, games, personal care items, tableware,
fragrances, bedding, linens, food items, beverages, and more.
Brooks Brothers Group, Inc. is the Debtors' ultimate corporate
parent, which directly or indirectly owns each of the other Debtor
entities.
Brooks Brothers Group, Inc. and 12 of its affiliates filed for
Chapter 11 protection (Bankr. D. Del., Lead Case No. 20-11785) on
July 8, 2020.
In the petitions signed by CRO Stephen Marotta, the Debtors were
estimated to have assets and liabilities of $500 million to $1
billion.
The Hon. Christopher Sontchi presides over the cases.
Richards, Layton & Finger, P.A. and Weil, Gotshal & Manges LLP
serve as counsel to the Debtors. PJ Solomon, L.P acts as
investment
banker; Ankura Consulting Group LLC is the financial advisor; and
Prime
Clerk LLC is the claims and noticing agent.
BROOKS BROTHERS: Reply Filing in Support of Bid Procedures Approved
-------------------------------------------------------------------
Judge Christopher R. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware granted Brooks Brothers Group, Inc. and its
debtor-affiliates leave to file and serve their reply in support of
approval of the Bidding Procedures in connection with the sale of
their business to SPARC Group, LLC, pursuant to their Asset
Purchase Agreement, executed July 23, 2020, for (i) an aggregate
Dollar amount equal to (A) $305 million, minus (B) the amount of
the Credit Bid (if any), plus (C) the Estimated Inventory
Adjustment Amount; minus (D) the Customer Deposit Balance; (ii) at
the option of the DIP Lenders, an aggregate credit bid of all or
any portion of the DIP Obligations; and (iii) the Buyer's
assumption of the Assumed Liabilities, subject to overbid.
The Debtors are authorized to take all reasonable actions necessary
or appropriate to effectuate the relief granted in the Order.
A copy of the Bidding Procedures is available at
https://tinyurl.com/y354rhj5 from PacerMonitor.com free of charge.
About Brooks Brothers Group
Brooks Brothers -- https://www.brooksbrothers.com/ -- is a clothing
retailer with over 1,400 locations in over 45 countries. While
famous for its clothing offerings and related retail services,
Brooks Brothers is known as a lifestyle brand for men, women, and
children, which markets and sells footwear, eyewear, bags, jewelry,
watches, sports articles, games, personal care items, tableware,
fragrances, bedding, linens, food items, beverages, and more.
Brooks Brothers Group, Inc. is the Debtors' ultimate corporate
parent, which directly or indirectly owns each of the other Debtor
entities.
Brooks Brothers Group, Inc. and 12 of its affiliates filed for
Chapter 11 protection (Bankr. D. Del., Lead Case No. 20-11785) on
July 8, 2020. The petitions were signed by Stephen Marotta, chief
restructuring officer.
The Debtors were estimated to have assets and liabilities of $500
million to $1 billion.
The Hon. Christopher Sontchi presides over the cases.
Richards, Layton & Finger, P.A. and Weil, Gotshal & Manges LLP
serve as counsel to the Debtors. PJ Solomon, L.P acts as investment
banker; Ankura Consulting Group LLC as financial advisor; and Prime
Clerk LLC as claims and noticing agent.
CB POLY: S&P Upgrades ICR to 'CCC+' on Completed Debt Exchange
--------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
promotional products supplier CB Poly Investments LLC (doing
business as Polyconcept) to 'CCC+' from 'SD' (selective default)
after the company completed a distressed debt exchange by swapping
$125 million of its existing $175 million second-lien term loan for
a new $125 million payment-in-kind (PIK) incremental first-lien
term loan. As part of the transaction, it also stripped the
covenants from the remaining second-lien stub and changed the
interest payments to PIK from cash.
The exchange will provide the company with $19.25 million of
additional liquidity over the next 12 months, though its leverage
will remain high at more than 10x. Because of this, S&P still views
Polyconcept's capital structure as unsustainable, especially amid
the uncertain economic environment, which may continue to pressure
its operating performance and cash flow.
At the same time, S&P is raising its issue-level rating on the
portion of the company's second-lien term loan that was not
exchanged to 'CCC-' from 'D', lowering its issue-level rating on
the first-lien facility to 'CCC+' from 'B-', and lowering its
issue-level rating on the ABL facility to 'B' from 'B+'. S&P's '6'
recovery rating on the second-lien loan, '3' recovery rating on the
first-lien debt, and '1' recovery rating on the ABL facility remain
unchanged. However, S&P revised its rounded recovery estimate for
the first-lien debt to 50% because of the recent debt exchange.
"Our ratings reflect Polyconcept's unsustainable capital structure
and risk of further earnings pressure despite the indications that
its revenue declines have plateaued. We believe the coronavirus
will continue to pressure the company's operating performance given
its exposure to cyclical demand, which is compounding the
uncertainty stemming from its refinancing," S&P said.
Despite its improved liquidity position, we assess Polyconcept's
capital structure as unsustainable. We estimate that its
S&P-adjusted debt to EBITDA was about 8x for the 12 months ended
June 30, 2020. Additionally, we expect its free cash flow
generation to remain breakeven to slightly negative through 2021
due to the coronavirus pandemic-related economic decline," the
rating agency said.
Nevertheless, the company's operating trends have improved after
reaching a likely trough in March/April when its bookings declined
by close to 70%. However, there is significant uncertainty around
what level its bookings will stabilize at for the remainder of the
year and into 2021. The reduction in the global workforce and
corporate discretionary and travel spending are material headwinds
for its business.
While Polyconcept's clients have reduced their spending during the
downturn, S&P expects ongoing promotional product spending given
the medium's relative cost effectiveness. Although the company has
effectively executed numerous cost-savings initiatives to protect
its EBITDA margins (reducing its headcount of both hourly and
salaried workers, securing freight savings, and limiting ancillary
expenses), S&P expects the company's revenue and EBITDA to decline
by more than 35% on a year-over-year basis.
Polyconcept has sufficient liquidity to withstand unexpected
difficulties in refinancing its ABL facility. The company had an
outstanding balance of $58 million on its ABL facility due August
2021 as of June 30, 2020.
"We anticipate that it will attempt to address this maturity in the
next 12 months. However, Polyconcept's refinancing will face
challenges due to the unfavorable market conditions related to the
coronavirus pandemic, which we believe are making it increasingly
difficulty for deeply speculative-grade entities to successfully
refinance their debt," S&P said.
The company was able to avoid burning cash in the second quarter of
2020 despite facing a material decline in its bookings and S&P
believes the company's total liquidity position of about $140
million as of June 30, 2020, provides it with sufficient runway
over the next 12 months such that the rating agency does not
envision any specific default scenarios.
"Our negative outlook on Polyconcept reflects the potential that we
will downgrade the company if its earnings or cash flow do not
improve, heightening the risk of another default or bankruptcy.
However, we believe the company has sufficient liquidity to support
its operating and refinancing needs over the next 12 months," S&P
said.
"We could lower our ratings on Polyconcept if its operating
performance is weaker than expected and it faces heightened risk of
a default or if it announces refinancing plans that we consider to
be distressed in the next 12 months. This could occur if the
macroeconomic recovery is slower than forecast such that it
experiences lower demand for its product offerings," the rating
agency said.
S&P could revise its outlook on Polyconcept to stable or raise its
ratings if the company's operating performance substantially
improves. Under this scenario, the rating agency would expect:
-- EBITDA interest coverage of 1.5x;
-- Adjusted leverage declines below 7.5x; and
-- The successful refinancing of the ABL facility.
-- U.S. real GDP declines by 5.0% in 2020 and increases by 5.2% in
2021. Eurozone GDP shrinks by 7.8% in 2020 before expanding by 5.5%
in 2021;
-- Revenue declines by more than 35% in 2020 because the
pandemic-related economic downturn reduces the demand for
promotional products;
-- Adjusted EBITDA margins decline to the low-teens percent area
despite the execution of various cost-cutting initiatives;
-- Adjusted debt of about $869 million, which includes about $56.5
million of operating leases and other adjustments; and
-- No assumptions about acquisitions or shareholder returns
because S&P expects the company to reinvest in organic growth.
CBAC PROPERTIES: Case Summary & 3 Unsecured Creditors
-----------------------------------------------------
Debtor: CBAC Properties, Ltd.
505 W. Hwy. 83
Weslaco, TX 78596
Business Description: CBAC Properties, Ltd. is a single asset real
estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: August 3, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 20-70233
Judge: Hon. Eduardo V. Rodriguez
Debtor's Counsel: William R. Davis, Jr.
LANGLEY & BANACK, INC.
745 E Mulberry Ave.
Suite 700
San Antonio, TX 78212
Tel: (210) 736-6600
Email: wrdavis@langleybanack.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Maximo Saenz, president, Mosa
Management, LLC.
A copy of the petition containing, among other items, a list of the
Debtor's three unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/6FqrQZ
CBL & ASSOCIATES: Obtains Forbearance Extension Until Aug. 5
------------------------------------------------------------
CBL & Associates Limited Partnership received notice on Aug. 3,
2020, from each of the 2023 Holders and 2026 Holders respectively
extending the forbearance period under each of the 2023 Notes
Forbearance Agreement and the 2026 Notes Forbearance Agreement to
11:59 p.m. EST on Aug. 5, 2020.
As previously reported, on June 30, 2020, CBL & Associates Limited
Partnership, the majority owned subsidiary of CBL & Associates
Properties, Inc. (the "REIT"), and certain subsidiary guarantors
entered into (i) a Forbearance Agreement with certain beneficial
owners and/or investment advisors or managers of discretionary
funds, accounts or other entities for the holders of beneficial
owners of in excess of 50% of the aggregate principal amount of the
Operating Partnership's 5.25% senior unsecured notes due 2023, as
amended by the First Amendment to the 2023 Notes Forbearance
Agreement, dated July 15, 2020 and the Second Amendment to the 2023
Notes Forbearance Agreement, dated July 22, 2020, pursuant to which
among other provisions, the 2023 Holders agreed to forbear from
exercising any rights and remedies under the indenture governing
the 2023 Notes solely with respect to any default resulting from
the nonpayment of the $11.8 million interest payment that was due
and payable on June 1, 2020, including the failure to make such
payment by the end of the 30-day grace period and (ii) a
Forbearance Agreement with Wells Fargo Bank, National Association,
as administrative agent for the lenders party to the Credit
Agreement, dated as of Jan. 30, 2019, as amended by the First
Amendment to the Bank Forbearance Agreement, dated July 15, 2020
and the Second Amendment to the Bank Forbearance Agreement, dated
July 22, 2020, pursuant to which among other provisions, the Agent,
on behalf of itself and the Lenders, agreed to forbear from
exercising any rights and remedies under the Credit Agreement
solely with respect to the Specified Defaults (as defined in the
Bank Forbearance Agreement), including the cross-default resulting
from the failure to pay the 2023 Notes Interest Payment or the 2026
Notes Interest Payment.
As previously reported, on July 15, 2020, the Operating
Partnership, the Subsidiary Guarantors and the REIT, as a limited
guarantor entered into a Forbearance Agreement with certain
beneficial owners and/or investment advisors or managers of
discretionary funds, accounts or other entities for the holders or
beneficial owners of in excess of 50% of the aggregate principal
amount of the Operating Partnership's 5.95% senior unsecured notes
due 2026, as amended by the First Amendment to the 2026 Notes
Forbearance Agreement, dated July 22, 2020, pursuant to which,
among other provisions, the 2026 Holders agreed to forbear from
exercising any rights and remedies under the indenture governing
the 2026 Notes solely with respect to the default resulting from
the nonpayment of the $18.6 million interest payment that was due
and payable on June 15, 2020, including the failure to pay the 2026
Notes Interest Payment by the end of the 30-day grace period.
As previously reported, on July 22, 2020, the respective parties to
the 2023 Notes Forbearance Agreement, the 2026 Notes Forbearance
Agreement and the Bank Forbearance Agreement, entered into
amendments to further extend the forbearance period to
July 27, 2020 with respect to the 2023 Notes and the 2026 Notes,
and July 29, 2020 with respect to the Credit Agreement and, each
agreed to provide for further automatic extension of the
forbearance period under such agreement by written notice from the
2023 Holders, the 2026 Holders and the required Lenders,
respectively, setting forth the modified date and time of the
expiration of the forbearance period.
As previously reported, on July 27, 2020, the Operating Partnership
received notice from each of the 2023 Holders and the 2026 Holders
respectively extending the forbearance period under each of the
2023 Notes Forbearance Agreement and the 2026 Notes Forbearance
Agreement to 11:59 p.m. EST on July 29, 2020.
As previously reported, on July 29, 2020, (i) the Operating
Partnership received notice from each of the 2023 Holders and 2026
Holders respectively extending the forbearance period under each of
the 2023 Notes Forbearance Agreement and 2026 Notes Forbearance
Agreement to 11:59 p.m. EST on Aug. 3, 2020 and (ii) the Operating
Partnership, Subsidiary Guarantors and the REIT entered into an
amendment to the Bank Forbearance Agreement to further extend the
forbearance period to 11:59 p.m. EST on
Aug. 5, 2020.
As previously reported, the Company elected to not make the 2023
Notes Interest Payment and the 2026 Notes Interest Payment and, as
provided for in the indenture governing the 2023 Notes and the 2026
Notes, to enter the respective 30-day grace periods to make such
payments. The Operating Partnership did not make either of the
2023 Notes Interest Payment or the 2026 Notes Interest Payment on
the last day of the respective 30-day grace periods. The Operating
Partnership's failure to make the 2023 Notes Interest Payment and
the 2026 Notes Interest Payment is considered an "event of default"
with respect to each of the 2023 Notes and the 2026 Notes, which
results in a cross default under the Credit Agreement. While the
events of default are continuing under the indenture, the Trustee
or the holders of at least 25% in principal amount of the 2023
Notes may declare the 2023 Notes to be due and payable immediately
and the Trustee or the holders of at least 25% in principal amount
of the 2026 Notes may declare the 2026 Notes to be due and payable
immediately. While the events of default are continuing under the
Credit Agreement, the Agent may and shall upon the direction of the
requisite lenders, declare the loans thereunder to be immediately
due and payable. Further, if any of the 2023 Notes, the 2026 Notes
or the Credit Agreement were accelerated, it would trigger an
"event of default" under the Operating Partnership's 4.60% senior
unsecured notes due 2024, which could lead to the acceleration of
all amounts due under those notes.
The Company said it is continuing to engage in negotiations and
discussions with the holders and lenders of the Company's
indebtedness. There can be no assurance, however, that the Company
will be able to negotiate acceptable terms or to reach any
agreement with respect to its indebtedness.
About CBL Properties
CBL & Associates Properties, Inc. -- http://www.cblproperties.com/
-- is a self-managed, self-administered, fully integrated REIT.
The Company owns, develops, acquires, leases, manages, and operates
regional shopping malls, open-air and mixed-use centers, outlet
centers, associated centers, community centers, office and other
properties. The Company's Properties are located in 26 states, but
are primarily in the southeastern and midwestern United States.
The Company has elected to be taxed as a REIT for federal income
tax purposes.
CBL & Associates reported a net loss of $131.72 million for the
year ended Dec. 31, 2019, compared to a net loss of $99.23 million
for the year ended Dec. 31, 2018.
* * *
As reported by the TCR on June 1, 2020, Moody's Investors Service
downgraded the ratings of CBL & Associates Limited Partnership,
including the corporate family rating to Ca from Caa1 and senior
unsecured debt to C from Caa3. The rating downgrade reflects
Moody's expectation that CBL's liquidity profile will erode rapidly
in the next two quarters.
CEC ENTERTAINMENT: Sussman & Moore Represents Utility Companies
---------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Sussman & Moore, LLP submitted a verified statement
that it is representing the utility companies in the Chapter 11
cases of CEC Entertainment, Inc., et al.
The names and addresses of the Utilities represented by the Firm
are:
a. American Electric Power
Attn: Dwight C. Snowden
American Electric Power
1 Riverside Plaza, 13th Floor
Columbus, Ohio 43215
b. Arizona Public Service Company
Attn: Gisel Morales
2043 W. Cheryl Dr., Bldg. M
Mail Station 3209
Phoenix, Arizona 85021-1915
c. Consolidated Edison Company of New York, Inc.
Attn: Rosalie Zuckerman
Con Edison Law Department
Attn: Bankruptcy 18th Floor
4 Irving Place
New York, New York 10003
d. Florida Power & Light Company
Attn: Gloria Lopez
Revenue Recovery Department RRD/LFO
4200 W. Flagler St.
Coral Gables, Florida 33134
e. Atlantic City Electric Company
Baltimore Gas and Electric Company
Commonwealth Edison Company
Delmarva Power & Light Company
PECO Energy Company
The Potomac Electric Power Company
Attn: Lynn R. Zack, Esq.
Assistant General Counsel
Exelon Corporation
2301 Market Street, S23-1
Philadelphia, PA 19103
f. New York State Electric and Gas Corporation
Attn: Kelly Potter
James A. Carrigg Center
Bankruptcy Department
18 Link Drive
Binghamton, NY 13904
g. Rochester Gas and Electric Corporation - $3,295
Attn: Patricia Cotton
89 East Avenue
Rochester, NY 14649
h. Salt River Project
Attn: Breanna Holmes/ISB 232
2727 E. Washington St.
P.O. Box 52025
Phoenix, AZ 85072-2025
i. San Diego Gas & Electric Company
Attn: Kelli S. Davenport
Bankruptcy Specialist
8326 Century Park Court
San Diego, CA 92123
j. Southern California Gas Company
Attn: Cranston J. Williams, Esq.
Office of the General Counsel
555 W. Fifth Street, GT14G1
P.O. Box 30337
Los Angeles, CA 90013-1034
k. Southern California Edison Company
Attn: Patricia A. Cirucci, Esq.
Director and Managing Attorney
Commercial Litigation
2244 Walnut Grove Avenue
P.O. Box 800
Rosemead, California 91770
l. Virginia Electric and Power Company
d/b/a Dominion Energy Virginia
Attn: Sherry Ward
600 East Canal Street, 10th floor
Richmond, VA 23219
m. Tampa Electric Company
TECO Peoples Gas System
Attn: Barbara Taulton FRP, CAP
Florida Registered Paralegal
Tampa Electric Company
702 N. Franklin Street
Tampa, FL 33602
n. Georgia Power Company
Attn: Daundra Fletcher
2500 Patrick Henry Parkway
McDonough, GA 30253
o. The Cleveland Electric Illuminating Company
Ohio Edison Company
Metropolitan Edison Company
Jersey Central Power & Light Company
Pennsylvania Electric Company
Potomac Edison Company
Attn: Kathy M. Hofacre
FirstEnergy Corp.
76 S. Main St., A-GO-15
Akron, OH 44308
p. Boston Gas Company
Colonial Gas Lowell
KeySpan Energy Delivery Long Island
KeySpan Energy Delivery New York
Massachusetts Electric Company
Narragansett Electric Company
Niagara Mohawk Power Corporation
Attn: Vicki Piazza, D-1
National Grid
300 Erie Boulevard West
Syracuse, NY 13202
q. Connecticut Light & Power Company
Yankee Gas Services Company
NStar Electric Company
Western Massachusetts
Public Service Company of New Hampshire
Attn: Honor S. Heath, Esq.
Eversource Energy
107 Selden Street
Berlin, CT 06037
The nature and the amount of claims of the Utilities, and the times
of acquisition thereof are as follows:
a. The following Utilities have unsecured claims against the
above-referenced Debtors arising from prepetition utility usage:
American Electric Power, Arizona Public Service Company,
Consolidated Edison Company of New York, Inc., Florida Power &
Light Company, Atlantic City Electric Company, Baltimore Gas and
Electric Company, Commonwealth Edison Company, Delmarva Power &
Light Company, PECO Energy Company, The Potomac Electric Power
Company, New York State Electric and Gas Corporation, Rochester Gas
& Electric Corporation, Salt River Project, San Diego Gas and
Electric Company, Southern California Gas Company, Southern
California Edison Company, Virginia Electric and Power Company
d/b/a Dominion Energy Virginia, Tampa Electric Company, TECO
Peoples Gas System, Georgia Power Company, The Cleveland Electric
Illuminating Company, Ohio Edison Company, Metropolitan Edison
Company, Jersey Central Power & Light Company, Pennsylvania
Electric Company, Potomac Edison Company, Boston Gas Company,
Colonial Gas Lowell, KeySpan Energy Delivery Long Island, KeySpan
Energy Delivery New York, Massachusetts Electric Company,
Narragansett Electric Company, Niagara Mohawk Power Corporation,
Connecticut Light & Power Company, Yankee Gas Services Company,
NStar Electric Company, Western Massachusetts and Public Service
Company of New Hampshire.
b. Florida Power & Light Company hold surety bonds that it
will make claims upon for payment of the prepetition debt that the
Debtors owe to Florida Power & Light Company.
c. For more information regarding the claims and interests of
the Utilities in these jointly-administered cases, refer to the
Objection of Certain Utility Companies to the Emergency Motion of
Debtors Pursuant to 11 U.S.C. section 105(a) and 366 and Fed. R.
Bankr. P. 6003 and 6004 for an Order (I) Approving Debtors'
Proposed Form of Adequate Assurance of Payment to Utility
Companies, (II) Establishing Procedures for Resolving Objections by
Utility Companies, (III) Prohibiting Utility Companies from
Altering, Refusing, or Discontinuing Service, and (IV) Granting
Related Relief filed in the above-captioned, jointly- administered,
bankruptcy cases and a Joinder to be filed on July 21, 2020.
The Law Firm of Russell R. Johnson III, PLC was retained to
represent the foregoing Utilities in June and July 2020. The
circumstances and terms and conditions of employment of the Firm by
the Companies is protected by the attorney-client privilege and
attorney work product doctrine.
The Firm can be reached at:
Weldon L. Moore, III, Esq.
SUSSMAN & MOORE, L.L.P.
4645 N. Central Expressway, Ste. 300
Dallas, TX 75205
Telephone: (214) 378-8270
Email: wmoore@csmlaw.net
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/zb4eXd
About CEC Entertainment
CEC Entertainment -- http://www.chuckecheese.com/-- is a family
entertainment and dining company that owns and operates Chuck E.
Cheese and Peter Piper Pizza restaurants. As of Dec. 31, 2019, CEC
Entertainment and its franchisees operate a system of 612 Chuck E.
Cheese restaurants and 129 Peter Piper Pizza stores, with
locations
in 47 states and 16 foreign countries and territories.
CEC Entertainment recorded a net loss of $28.92 million for the
year ended Dec. 29, 2019, compared to a net loss of $20.46 million
for the year ended Dec. 30, 2018. As of Dec. 29, 2019, CEC
Entertainment had $2.12 billion in total assets, $1.90 billion in
total liabilities, and $213.78 million in total stockholders'
equity.
On June 24, 2020, CEC Entertainment and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Tex. Lead Case No. 20-33163). Judge Marvin Isgur oversees the
cases.
The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy
counsel; FTI Consulting, Inc. as financial advisor; PJT Partners LP
as investment banker; Hilco Real Estate, LLC as real estate
advisor; and Prime Clerk, LLC, as claims, noticing and solicitation
agent.
CHINOS HOLDINGS: Aug. 25 Plan Confirmation Hearing Set
------------------------------------------------------
Chinos Holdings, Inc. and its affiliates filed with the U.S.
Bankruptcy Court for the Eastern District of Virginia a motion for
entry of an order approving the Proposed Disclosure Statement.
On June 26, 2020, Judge Keith L. Phillips granted the motion and
ordered that:
* The Disclosure Statement contains adequate information in
accordance with Section 1125 of the Bankruptcy Code and is
approved.
* The Disclosure Statement provides sufficient notice of the
injunction, exculpation, and release provisions contained in
Article X of the Plan, in accordance with Bankruptcy Rule 3016(c).
* Aug. 17, 2020 at 4:00 p.m. is the voting deadline and release
opt out deadline.
* Aug. 17, 2020 at 4:00 p.m. is the plan objection deadline.
* Aug. 21, 2020, is the deadline to file a confirmation brief.
* Aug. 24, 2020 at 12:00 p.m. is the deadline to file (a) replies
to Plan Objections, (b) Declarations in Support of Confirmation,
and (c) Voting Certification.
* Aug. 25, 2020 at 10:00 a.m. is set as the Confirmation
Hearing.
A copy of the order dated June 26, 2020, is available at
https://tinyurl.com/ycn77dr7 from PacerMonitor at no charge.
Attorneys for Debtors:
WEIL, GOTSHAL & MANGES LLP
Ray C. Schrock, P.C.
Ryan Preston Dahl
Candace M. Arthur
Daniel Gwen
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
- and -
HUNTON ANDREWS KURTH LLP
Tyler P. Brown
Henry P. (Toby) Long, III
Nathan Kramer
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219
Telephone: (804) 788-8200
Facsimile: (804) 788-8218
About Chinos Holdings
Chinos Holdings, Inc., designs apparels, offering clothing for men,
women and children, as well as accessories. Chinos Holdings serves
customers worldwide.
Chinos Holdings, Inc. and its affiliates, including J.Crew Group,
Inc., sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. E.D. Va. Lead Case No. 20-32181) on May 4, 2020.
At the time of the filing, the Debtors disclosed assets of between
$1 billion and $10 billion and liabilities of the same range.
Judge Keith L. Phillips oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy
counsel; Hunton Andrews Kurth, LLP as local counsel; Lazard Freres
& Co. LLC; Alixpartners, LLP as financial advisor; Hilco Real
Estate, LLC as real estate advisor; KPMG LLP as tax consultant; and
Omni Agent Solutions, LLC as claims, noticing and solicitation
agent and as administrative advisor.
The official committee of unsecured creditors appointed in Debtors'
bankruptcy cases tapped Pachulski Stang Ziehl & Jones LLP as legal
counsel; Hirschler Fleischer, P.C. as local counsel; and Province,
Inc. as financial advisor.
CONCISE INC: Seeks to Hire Katz Abosch Windesheim as Accountant
---------------------------------------------------------------
Concise, Inc. seeks authority from the U.S. Bankruptcy Court for
the District of Columbia to hire E. Theresa Grant, CPA and Katz,
Abosch, Windesheim, Gershman, Freedman, P.A., as its accountant.
KatzAbosch will assist the Debtor in the preparation of tax returns
required to be submitted or to be filed in this case.
KatzAbosch currently charges $175 to $450 per hour based upon the
skill level of the staff assigned to do the work.
KatzAbosch has requested $10,000 fixed-fee for the preparation and
filing of amended tax returns for 2017 and 2018, to be paid as
$5,000 up-front as initial retainer and the balance in monthly
installments of $2,000 beginning August 1, 2020 until fully paid.
KatzAbosch has requested a further $5,000 fixed-fee for the
preparation and filing of tax returns for 2019, to be paid as
$3,000 up-front as initial retainer and the balance in monthly
installments of $1,000 beginning August 1, 2020 until fully paid.
KatzAbosch has requested a further $650 fixed-fee for each state
tax return necessary to be prepared and filed for a state other
than Maryland, to be paid as and when the preparation and filing of
such additional state tax return(s) become(s) necessary.
KatzAbosch has no connection with the Debtor, creditors, or any
other party in interest, their respective attorneys and
accountants, the United States Trustee, or any person employed in
the Office of the United States Trustee and is not a creditor of
the Debtor.
The firm can be reached through:
E. Theresa Grant, CPA
Katz, Abosch,Windesheim,
Gershman, Freedman, P.A.
9690 Deereco Road, Suite 500
Timonium, MD 21093
Phone: 410-828-CPAS (2727)
410-828-9512
About Concise Inc.
Concise, Inc. (dba - CNS) was founded in 2003, as a turnkey
in-building Distributed Antenna System Integrator (DAS). The
Company offers wireless, infrastructure cabling, cyber|cloud
services, IT telecommunications, managed security, and engineering
design services. Visit https://www.conciseinc.com for more
information.
Concise, Inc. filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-00079) on
January 31, 2019. In the petition signed by David Johnson, chief
executive officer, the Debtor estimated $51,715 in total assets and
$3,556,125 in total liabilities.
Judge Martin S. Teel, Jr. presides over the case. Jeffrey M.
Orenstein, Esq. at Wolff & Orenstein, LLC represents the Debtor as
counsel.
CORRIDOR MEDICAL: Seeks Approval to Hire 'Ordinary Course' Attorney
-------------------------------------------------------------------
Corridor Medical Services, LLC, seeks approval from the U.S.
Bankruptcy Court for the Western District of Texas to hire an
ordinary course attorney.
Corridor Medical wishes to hire David P. Crist as an ordinary
course attorney with respect to the preparation and negotiation of
a management agreement under which Corridor will manage the
processing of viral test kits for Genesis Labs nunc pro tunc to May
5, 2020.
Mr. Crist's standard hourly rate is $425 per hour. He provided the
Debtors with 10.4 hours of professional services from May 5, 2020,
to May 15, 2020, reflecting total fees of $4,420.
Mr. Crist assures the court that he neither holds or represents a
disqualifying adverse interest and is a
"disinterested person" as that term is defined in Bankruptcy Code
Sec. 101(14).
Mr. Crist can be reached at:
David P. Crist, Esq.
7200 N. MoPac Expressway, Suite 250
Austin, TX 78731
Telephone: (512) 794-8566
Email: dave@cristlawfirm.com
About Corridor Medical Services
Corridor Medical Services, Inc., provides mobile imaging and
laboratory diagnostic services. It offers digital x-ray,
ultrasound, EKG, and lab services to nursing homes, hospice
centers, assisted living facilities, clinics, surgery centers,
home-bound patients, and any place with patients who are restricted
to travel.
Corridor Medical Services and its affiliates Correctional Imaging
Services, LLC and CMMS Lab LLC sought protection under Chapter 11
of the Bankruptcy Code (Bankr. W.D. Texas Case Nos. 18-11569 to
18-11571) on Nov. 30, 2018.
Corridor Medical Services estimated up to $50,000 in assets and $10
million to $50 million in liabilities as of the bankruptcy filing.
The cases are assigned to Judge Tony M. Davis.
Barron & Newburger, PC, is the Debtors' counsel.
CSC HOLDINGS: Moody's Rates $1BB Planned Guaranteed Notes 'Ba3'
---------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to CSC Holdings,
LLC's planned issuance of $1 billion (unsecured) Guaranteed Notes
due 2031. The B3 rating on the existing (unguaranteed and
unsecured) Senior Notes due 2030 are unaffected by a planned $1.7
billion add-on. CSC's B1 corporate family rating, B1-PD probability
of default rating, and all other instrument ratings are unaffected
by the proposed transaction. Liquidity remains very good. The
outlook is stable.
CSC (a wholly owned subsidiary of Altice USA) is issuing $1 billion
in new 10.5 year (5.5-year non-call, unsecured) Guaranteed Notes
and raising $1.7 billion as an add-on to the existing 4.625%
(unguaranteed, unsecured) Senior Notes due 2030 to refinance
existing indebtedness. Net proceeds, together with cash on the
balance sheet, will be used to fully repay the existing $1 billion
of 6.625% (unsecured) Guaranteed Notes due 2025 and $1.684 billion
in 10.875% (unguaranteed, unsecured) Senior Notes due 2025, and pay
fees, costs and expenses associated with these transactions.
Moody's will withdraw the ratings on the repaid instruments upon
transaction close.
The 2031 note guarantors (CSC and its subsidiaries), that also
guarantee the existing senior unsecured guaranteed notes and the
credit facilities, contributed approximately 83% of the total
assets of the Restricted Group as of June 30, 2020, approximately
90% of the net revenues and approximately 99% of the Adjusted
EBITDA of the Restricted Group for the six months ended June 30,
2020. The restricted group includes Cablevision Lightpath NJ, LLC
(Lightpath) which is currently a guarantor under the existing
senior guaranteed notes (except for the 2029 and 2030 notes).
However, Lightpath and the guarantors within the Lightpath Group
will not guarantee the new 2031 notes.
Moody's expects the current refinancing transaction to extend the
weighted average maturity profile and lower weighted average cost
of debt, while not materially changing leverage ratios or the
proportional mix of secured and unsecured debt, or the resultant
creditor claim priorities in the capital structure.
On Tuesday, July 28, Altice USA, announced that it has agreed to
sell 49.99% of Lightpath Group, its fiber enterprise business, to
Morgan Stanley Infrastructure Partners for total cash proceeds of
about $2.3 billion. Altice USA will retain a 50.01% interest in
Lightpath Group, and maintain control of the company, but it will
be refinanced outside the restricted group with non-recourse debt
on a leverage-neutral basis, and operated as a joint venture. The
transaction is currently expected to close in Q4 2020.
As of June 30, 2020, Lightpath had over 11,400 buildings connected
to its fiber network, with a fiber optic network that consists of
more than 8,800 route miles, including approximately 600,000 miles
of fiber, throughout the New York metropolitan area. At close,
Lightpath Group is expected to become an unrestricted subsidiary
and all guarantees (of the credit facility and existing guaranteed
notes) provided by Lightpath and its guarantors will be released.
Collectively, Lightpath Group had assets representing approximately
4% of the total assets of the Restricted Group as of June 30, 2020,
generated net revenues representing approximately 4% of the net
revenues, and Adjusted EBITDA representing 5% of the Adjusted
EBITDA of the Restricted Group, respectively, for the six months
ended June 30, 2020.
Lightpath group is a valuable asset, sold at a very high multiple
(approximately 14.6x fiscal 2019 management adjusted EBITDA) with
an estimated $3.2 billion enterprise value, but it represents a
relatively small share of consolidated profitability. Despite the
temporary challenges many small and medium sized businesses are
facing due to COVID-19, Moody's expects commercial demand for fiber
network connectivity and solutions to continue rising with the
development of high-speed communications such as broadband wireless
(e.g. 5G) and commercial IoT. Management is hoping the infusion of
capital and its strategic partner, with experience in
telecommunications infrastructure and deep operational and
management expertise, will help Lightpath unlock its future
potential, while allowing Altice USA to focus on operating its core
businesses.
Assignments:
Issuer: CSCs, LLC
Gtd Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD3)
RATINGS RATIONALE
CSC's B1 CFR is supported by its large size (approximately $9.8
billion in revenue LTM, end of last quarter) and somewhat
diversified footprint with a strong market position in its Optimum
footprint which has very favorable market dynamics. This strength
is reflected in very high, industry leading operating metrics
including investment-grade-like EBITDA per homes passed and the
Triple Play Equivalent ratio. The company has an upgraded network
that produces superior network speeds that helps it compete with
in-market peers and attract and retain residential and commercial
customers, particularly broadband which helps to offset weakness in
video and telephony. Residential broadband's strong revenue growth
and profitability supports high margins in the broader business and
is a significant contributor to the company's free cash flow.
Moody's expects this strength to continue, supported by network
investments. The company also has very good liquidity.
CSC's B1 CFR is constrained by a less than conservative financial
policy that tolerates high leverage (over 5.5x, Moody's adjusted
LTM June 30 2020) and substantial stock buybacks funded principally
with most available free cash flow. Additionally, CSC's video and
voice businesses are weakening, evidenced by a decline in the
subscriber bases and the company's market share (the Triple Play
Equivalent ratio) in these product lines.
Moody's rates CSC's senior secured bank debt facilities Ba3 (LGD3),
one notch above the B1 CFR. The secured debt has a stock pledge and
is guaranteed by the operating subsidiaries of the Company. Bank
lenders benefit from junior capital provided by the senior
unsecured bonds at CSC (which have no guarantee).
Moody's rates the senior unsecured guaranteed notes at CSC Ba3
(LGD3), pari-passu with the senior secured creditors with the
benefit of the same guarantee from the restricted subsidiaries (as
the credit facility creditors) and its view that the stock pledge
for secured lenders provides no additional lift/benefit given the
guarantees from the operating subsidiaries.
Also, Moody's rates CSC's senior unsecured (non-guaranteed) notes
B3 (LGD5), two notches below the B1 CFR, given the subordination in
the company's capital structure. The instrument ratings reflect the
probability of default of the company, as reflected in the B1-PD
Probability of Default Rating, an average expected family recovery
rate of 50% at default given the mix of secured and unsecured debt
in the capital structure, and the particular instruments' ranking
in the capital structure.
CSC has very good liquidity, reflected in its SGL-1 liquidity
rating. Liquidity is supported by strong operating cash flow, an
undrawn $2.475 billion revolving credit facility, and covenant-lite
loans. The company also benefits from a favorable maturity profile
with no maturities in 2020 and about $1 billion or less coming due
annually through 2024, which can be fully covered by free cash
flows.
The stable outlook reflects its expectation that the company will
generate an average of approximately $10.5 billion in annual
revenues over the next 12-18 months, and about $4.5 billion in
EBITDA on margins in the low to mid 40% range. Moody's expects free
cash flows to average approximately $1.5 billion annually, after
capital expenditures of about $1.3 billion (low teen percent of
revenue).
Moody's projects leverage (gross debt/EBITDA) to improve over the
next 12-18 months but remain high with free cash flows used to
repurchase stock rather than voluntarily repay debt. FCF/debt will
rise to 6%-7%, and interest coverage (EBITDA-CAPEX/ interest) will
rise to 2.3-2.4x. (Note: values and ratios above are Moody's
adjusted). Its projections also assume the company's market share
will fall to approximately 35%, measured using its
Triple-Play-Equivalent ratio, and EBITDA per homes passed will be
above $500. Key assumptions include a rise in broadband subscribers
of at least low single digit percent, and video subscribers' losses
of at least low single-digit percent. Its outlook assumes the
company maintains its very good liquidity profile.
CSCs' governance presents a moderate risk to the credit profile. In
particular, financial policy is less than conservative, tolerating
moderately high leverage (over 5.5x, Moody's adjusted LTM) for the
quarter ended March 31, 2020, and higher in past years). Moody's
believes management's calculation of leverage is approximately .25x
lower than Moody's, and above its target ratio of between 4.5x-5.0x
(calculated based on L2QA EBITDA and net debt excluding finance
leases). The company also has an aggressive share repurchase
program which targets $1.7 billion of repurchases in 2020, about
equal to expected free cash flow.
Ownership and voting control are also concentrated in Next Alt, a
personal holding company of Patrick Drahi, the largest and
controlling shareholder of Altice USA. This level of control
creates governance risk, with Next Alt in control of all matters
submitted to stockholders for approval. Mr. Drahi, through Next Alt
is able to significantly influence the composition of the Board of
Directors and thereby influence policies and operations, including
the appointment of management, future issuances of Altice USA
common stock or other securities, the payment of dividends, the
incurrence or modification of debt, amendments to the certificate
of incorporation and bylaws, and entering into extraordinary
transactions including acquisitions or the sale of the company
(e.g. a change in control). Additionally, as a controlled company,
there is no requirement, and the company does not have a majority
of independent directors on its Board of Directors or a nominating
and governance committee.
Moody's also notes Next Alt holds the largest share of the economic
interest and controlling interest in the voting rights of Altice
Europe. Its view of the credit risk, and governance structure would
turn negative should the controlling shareholder of these formerly
combined companies use its common ownership to execute (or even
contemplate) a related party transaction, beyond normal operating
activities (e.g. corporate transactions such as direct or indirect
investments or loans, or similar cash or non-cash support
regardless of the form or structure) that is unfavorable to CSC.
The rapid and widening spread of coronavirus, deteriorating global
economic outlook, falling oil prices, and asset price declines are
creating a severe and extensive shock that is unprecedented in many
sectors, regions, and markets. The combined credit effects of these
developments are unprecedented. Moody's regards the coronavirus
outbreak as a social risk under its ESG framework, given the
substantial implications for public health and safety.
However, Moody's believes the cable sector has less exposure than
many others. It believes subscriber losses in voice and video have
temporarily moderated, and there has been much greater demand in
residential broadband. Video viewership and engagement is rising
sharply, with subscribers spending extraordinary time watching TV
for news, and there has been a significant rise in viewership for
entertainment programming, and movies with a complete shut-down of
US cinemas. Usage has become more evenly distributed with a sharp
rise in online commerce and the shift to remote work and distance
learning.
Any negative implications — disruptions to direct selling,
on-premise installations and service, small and medium sized
businesses, advertising, certain programming (sports and new
production / content), and operations (component supply chains,
construction / network upgrades) - will likely be only a temporary
and partial offset. Moody's expects higher bad debt expense and the
loss of advertising revenue will be the most significant most
negative implications, but largely offset by savings in operating
expenses with operators benefiting from lower sales, marketing, and
service costs.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could consider an upgrade if:
- Debt/EBITDA (Moody's adjusted) was sustained below 5.0x, and
- Free cash flow to debt (Moody's adjusted) was sustained above
5.0%
An upgrade could also be considered or contingent on a stable
subscriber base, or more conservative financial policy.
Moody's could consider a downgrade if:
- Debt/EBITDA (Moody's adjusted) is sustained above 6.25x, or
- Free cash flow to debt (Moody's adjusted) is sustained below
3%
A downgrade could also be considered if liquidity deteriorated,
there was a material and unfavorable change in operating
performance, or the company adopted a more aggressive financial
policy.
Headquartered in Long Island City, New York, CSC passes
approximately 8.9 million homes in 21 states, serving approximately
5 million residential and business customers and 9.7 million
residential primary service units. The company is wholly owned by
Altice USA, a public company majority owned and controlled by
Patrick Drahi. Revenue for the last twelve months ended June 30,
2020 was approximately $9.8 billion.
The principal methodology used in these ratings was Pay TV
published in December 2018.
DANNYLAND LLC: Seeks to Hire Marcum Tennyson as Special Counsel
---------------------------------------------------------------
Dannyland, LLC, seeks authority from the U.S. Bankruptcy Court for
the Western District of Kentucky to employ Scott Marcum, Attorney,
with Marcum Tennyson, PLLC, as special counsel.
Dannyland owns residential rental properties where tenants reside.
Due to certain lease violations, the Debtor is required, from time
to time, to evict tenants from said residential rental properties.
The Debtor wishes to retain Marcum Tennyson to pursue those
evictions.
Marcum Tennyson will charge a flat rate of $150 per matter to
render legal services for the evictions of the tenants in the
Debtor's properties.
Marcum Tennyson does not represent any interest adverse to the
Debtor or its estate, according to court filings.
The counsel can be reached through:
Scott Marcum, Esq.
Marcum Tennyson, PLLC
2008 Kentucky Avenue
Paducah, KY 42003
Phone: (270) 534-5135
About Dannyland, LLC
Based in Paducah, Kentucky, Dannyland, LLC, sought protection under
Chapter 11 of the Bankrupty Code (Bankr. W.D. Ky. Case No.
20-50336) on June 26, 2020, listing under $1 million in both assets
and liabilities. Samuel J. Wright, Esq. at Farmer & Wright, PLLC,
represents the Debtor as counsel.
DELIVERY AGENT: Court Tosses Chookaszian Expert Report
------------------------------------------------------
Plaintiffs in the cases captioned JOHN E ABDO, et al., Plaintiffs,
v. MICHAEL FITZSIMMONS, et al., Defendants. RISING TIDE I, LLC, et
al., Plaintiffs, v. MICHAEL FITZSIMMONS, et al., Defendants, Case
Nos. 17-cv-00851-TSH, 17-cv-01232-TSH (N.D. Cal.) filed a Motion to
Strike Expert Rebuttal Report of Dennis Chookaszian. Plaintiffs
argued that the report is not an actual rebuttal report and thus
was not disclosed in compliance with Federal Rule of Procedure 26.
Having considered the parties' positions, relevant legal authority,
and the record in this case, Magistrate Judge Thomas Hixson grants
the motion.
Delivery Agent, Inc. was a company involved in the
television-commerce, or "t-commerce," space. Delivery Agent claimed
that it had developed proprietary technology to connect viewers
through smart TVs to products and companies advertised on air.
In these related actions, investor-Plaintiffs allege that
Defendants, all former directors and/or officers of Delivery Agent,
Inc., violated various federal and state securities fraud laws
through material misrepresentations and omissions they made in
attempting to sell Delivery Agent securities to Plaintiffs. In
particular, they allege that Defendants misrepresented or concealed
highly damaging information about the proprietary nature of
Delivery Agent's core technology, the functionality of its products
including the smart TV feature, the success of important market
tests, the trustworthiness of Delivery Agent's most senior
executives, and events that made a successful Initial Public
Offering impossible. Delivery Agent eventually had to file for
Chapter 11 bankruptcy in September 2016, and Plaintiffs' securities
are now worthless.
Defendants have asserted 40-some affirmative defenses. Some of the
defenses are those asserting, in essence, that Plaintiffs are
sophisticated investors who either knew that the securities deals
offered by Delivery Agent were too good to be true or did not do
enough diligence to uncover that Delivery Agent was a financially
challenged company. More specifically, Defendants argue that the
Plaintiffs "knew or should have known the actual facts that they
now claim made any alleged statement of material fact untrue or any
alleged omission of material fact necessary to make the statements
not misleading." Defendants also assert that Plaintiffs' "own
negligence, breaches of duties, actions, omissions, or other fault
proximately contributed to the injuries allegedly suffered by
Plaintiffs, and bars any recovery to the extent thereof."
The parties were required to disclose their affirmative expert
witnesses and exchange initial expert reports by no later than May
5, 2020. Rebuttal experts and reports were due by May 28. Expert
discovery, scheduled to close on June 23, has been extended and is
scheduled to close on Sept. 30. Briefing on dispositive motions is
to be completed by Dec. 3, with a hearing on those motions to be
held on Jan. 28, 2021.
On May 5, 2020, Plaintiffs disclosed to Defendants the report of
Steven M. Berwick, one of their affirmative experts. Plaintiffs
engaged Berwick, a Certified Public Accountant, to provide an
opinion on the fair market value ("FMV") of Delivery Agent and the
subject securities at the various times of investment by
Plaintiffs. Plaintiffs explain that they will offer Berwick's
testimony to establish their out-of-pocket damages, or the
difference between what they paid and what they received. To
perform his valuation, Berwick considered the three most common
valuation approaches--income-based, asset/cost-based, and
market-based--and concluded that the asset/cost-based approach was
most appropriate for valuing the subject securities. Applying that
approach, Berwick concluded that Delivery Agent's equity value was
at all times less than zero, and accordingly the securities
purchased by Plaintiffs between June 18, 2014 and April 20, 2016
were valueless on the dates they were bought.
On May 5, 2020, Defendants disclosed the report of Dennis
Chookaszian, one of their affirmative experts, who opined that
Defendants had "acted in accordance with principles of good
corporate governance following certain events in 2014". On May 28,
Defendants disclosed another Chookaszian report, as self-styled
"rebuttal report". The Rebuttal Report purports "to review and
respond to certain conclusions made in the Berwick Report."
Plaintiffs argued that the Rebuttal Report is a disguised
affirmative expert report that is untimely; there is no substantial
justification for its untimeliness; and the admission of the report
would be unfair and prejudicial to Plaintiffs.
The Court agrees with Plaintiffs that Chookaszian's Rebuttal Report
does not rebut or respond to Berwick's affirmative report.
Berwick's report offered an opinion on the FMV of Delivery Agent
and the securities Plaintiffs were sold. The FMV, as Berwick
explained it, is "the price, expressed in terms of cash
equivalents, at which property would change hands between a
hypothetical willing and able buyer and a hypothetical willing and
able seller, acting at arm's length . . . when both have reasonable
knowledge of the relevant facts."
According to the Court, reaching the FMV required no determination
of whether or not Plaintiffs had reasonable knowledge of the
relevant facts, nor whether Plaintiffs had done their due diligence
before investing. It is true, as Defendants point out, that Berwick
was asked to assume that Plaintiffs "invested without knowing
material facts about Delivery Agent and its prospects."
However, Berwick did not opine as to whether that assumption was
true or false or likely or unlikely; he was told simply to assume
that Defendants omitted material facts about Delivery Agent and its
prospects. The question of whether they actually did, or whether
any investors were unaware of material facts, was an issue entirely
beyond the scope of Berwick's report.
Chookaszian's report, on the other hand, concludes that Plaintiffs
"knew or reasonably should have known of the serious risks in
investing in Delivery Agent." It does not dispute the method of
valuation used by Berwick or rebut Berwick's application of that
method to determine FMV, and it does not offer a conclusion
contrary to Berwick's on the FMV of Delivery Agent or the
securities when they were sold. Chookaszian even acknowledges that
he was "not [] asked to opine upon the accuracy of the valuation in
the Berwick Report."
Instead of introducing Chookaszian's Rebuttal Report to actually
rebut Berwick's report, Defendants quite clearly use it to advance
their defense that Plaintiffs "knew or should have known the actual
facts that they now claim made any alleged statement of material
fact untrue or any alleged omission of material fact necessary to
make the statements not misleading."
Because Chookaszian is an affirmative expert and his Rebuttal
Report is improperly designated as such, the report must be
stricken and Defendant "not allowed to use that information [] to
supply evidence on a motion, at a hearing, or at a trial, unless
the failure was substantially justified or is harmless." Defendants
do not attempt to make such a showing. They offer no justification
for the failure to timely disclose the Rebuttal Report, and the
Court is unable to think of one. Because Chookaszian did submit a
separate affirmative expert report by the May 5 deadline, he was
clearly available to Defendants. Further, the late disclosure is
not harmless because it deprived Plaintiffs of the opportunity to
submit an expert report to rebut the Rebuttal Report. Therefore,
Rule 37(c)(1) demands that the Court strike the report.
Thus, the Court grants Plaintiffs' Motion and strikes Chookaszian
May 28, 2020 Expert Report. Defendants are precluded from using any
opinion offered in that report during motion practice or at any
hearing, and Chookaszian is precluded from offering trial testimony
about any opinion in that report.
A copy of the Court's Order dated July 20, 2020 is available at
https://bit.ly/2ByOvML from Leagle.com.
About Delivery Agent, Inc.
Headquartered in San Francisco, California, Delivery Agent, Inc.
offered ShopTV, a technology that allows audiences to engage with
and transact directly from advertisements and television shows
through Web, mobile, and advanced television applications; a
cloud-based shopping platform, which enables omni-channel commerce
for its clients with simplicity; eCommerce platform for
omni-channel shopping; relevant and personalized product offers to
viewers based on the content they are watching with the help of
contextual database; and advertising solutions.
Delivery Agent, Inc., and affiliates MusicToday, LLC, Clean Fun
Promotional Marketing, Inc., and Shop the Shows, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 16-12051) on
Sept. 15, 2016. The cases were assigned to Judge Laurie Selber
Silverstein.
The Debtors hired Pachulski Stang Ziehl & Jones LLP as local
Counsel; Keller & Benvenutti LLP as general counsel; Arch & Beam
Global, LLC, as financial advisor; and Epiq Bankruptcy Solutions,
LLC, as claims and noticing agent.
Andrew R. Vara, the Acting U.S. Trustee for Region 3, on Sept. 29,
2017, appointed seven creditors of Delivery Agent, Inc., to serve
on the official committee of unsecured creditors. The Committee
retained Pepper Hamilton LLP as counsel; and Carl Marks Advisory
Group LLC as financial advisors, nunc pro tunc to Oct. 3, 2016.
DENBURY RESOURCES: Moody's Cuts PDR to D-PD on Bankruptcy Filing
----------------------------------------------------------------
Moody's Investors Service downgraded Denbury Resources Inc.'s
Probability of Default Rating to D-PD from Ca-PD. Denbury's other
ratings were affirmed, including its Ca Corporate Family Rating, Ca
rating on its senior secured second lien debt, and C rating on its
senior subordinated debt. The SGL-4 Speculative Grade Liquidity
Rating is unchanged. The rating outlook is negative.
These actions follow the company's bankruptcy filing on July 30,
2020.
Downgrades:
Issuer: Denbury Resources Inc.
Probability of Default Rating, Downgraded to D-PD from Ca-PD
Affirmations:
Issuer: Denbury Resources Inc.
Corporate Family Rating, Affirmed Ca
Senior Subordinated Notes, Affirmed C (LGD6)
Senior Secured 2nd Lien Notes, Affirmed Ca (LGD3)
Outlook Actions:
Issuer: Denbury Resources Inc.
Outlook, Remains Negative
RATINGS RATIONALE
The Chapter 11 bankruptcy filing [1] has resulted in a downgrade of
Denbury's PDR to D-PD, reflecting the company's default on its debt
agreements. The affirmation of the Ca CFR and other debt
instruments' ratings reflects Moody's view on expected recoveries.
Shortly following this rating action, Moody's will withdraw all of
Denbury's ratings.
Denbury Resources Inc., headquartered in Plano, Texas, is an
independent oil and gas company with operations in the Gulf Coast
and Rocky Mountain regions. The company has a significant emphasis
on carbon dioxide enhanced oil recovery (CO2 EOR) operations used
to recover oil from mature fields.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
DHM HOSPITALITY: Proposes an Auction Sale of Assets
---------------------------------------------------
DHM Hospitality, LLC, asks the U.S. Bankruptcy Court for the
Eastern District of Texas to authorize the auction sale of all its
assets.
Objections, if any, must be filed within 21 days from the date of
the Motion filing.
As a result of the COVID-19 pandemic, the Debtor's business slowed
considerably and it fell behind on its payments to its secured
lender. After the bankruptcy was filed, the Debtor sought and
received approval to employ Enterprise America, Inc./Numarix
Services, LLC ("Firm"), as real estate broker for the Debtor.
After marketing the Property for several months, the Firm has
determined the best sale possibly will come from an auction of the
Property.
The Debtor asks approval to conduct an auction for the sale of its
Property. Its Property has several liens asserted against it.
The Debtor's primary lienholder is Bank of Hope. The Bank asserts
that it is owed over $2,200. It is prepared to allow the auction
to take place, but reserves the right to approve the auction sale
price.
Any auction sale price will be subject to Bank's approval, and any
distribution of the auction sales proceeds will be subject to
further Order of the Court.
About DHM Hospitality
DHM Hospitality, LLC, is a privately held company in the hotels
and
motels business. Its principal assets are located at 910 Corn
Products Road, Corpus Christi, Texas.
DHM Hospitality sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Texas Case No. 20-40312) on Feb. 3,
2020. At the time of the filing, Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Judge Brenda T. Rhoades oversees the case. Eric A.
Liepins, P.C., is the Debtor's legal counsel.
DIAMONDBACK INDUSTRIES: Hires Whitaker Chalk as Special Counsel
---------------------------------------------------------------
Diamondback Industries, Inc. and its affiliates seek approval from
the U.S. Bankruptcy Court for the Northern District of Texas to
employ Whitaker Chalk Swindle & Schwartz PLLC.
The firm will represent Debtors as special counsel in
pre-bankruptcy litigations, including a case they filed against
Repeat Precision, LLC and several others (Case No:
6:19-CV00034-ADA) in the U.S. District Court for the Western
District of Texas – Waco Division in November 2018.
Whitaker Chalk will be compensated at the rate of $475 per hour.
The firm received the sum of $337,161.53 from Debtors during the
90-day period prior to their bankruptcy filing.
Robert Simon, Esq., at Whitaker Chalk, disclosed in court filings
that the firm does not hold any interest adverse to Debtors and
their bankruptcy estates.
The firm can be reached through:
Robert A. Simon, Esq.
Whitaker Chalk Swindle & Schwartz PLLC
301 Commerce Street, Suite 3500
Fort Worth, TX 76102-4135
Telephone: (817) 878-0500
Facsimile: (817) 878-0501
About Diamondback Industries
Diamondback Industries is an ISO 9001 registered company that
manufactures tools and ballistics equipment including eliminators,
igniters, and power charges. For more information, visit
https://diamondbackindustries.com/
On April 21, 2020, Diamondback Industries and its affiliates sought
Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-41504).
The petitions were signed by Benton Cantey, president. Judge Edward
L. Morris presides over the cases. Diamondback was estimated to
have $10 million in assets and $10 million to $50 million in
liabilities.
Debtors have tapped Foley & Lardner LLP as their bankruptcy
counsel, Whitaker Chalk Swindle & Schwartz PLLC and Scheef & Stone
LLP as special counsel, and CR3 Partners, LLC as financial advisor.
Stretto is the claims agent, maintaining the page
https://cases.stretto.com/diamondback/
Debtors filed their joint Chapter 11 plan of reorganization and
disclosure statement on June 23, 2020.
DIAMONDBACK INDUSTRIES: Taps Scheef & Stone as Special Counsel
--------------------------------------------------------------
Diamondback Industries, Inc. and its affiliates seek approval from
the U.S. Bankruptcy Court for the Northern District of Texas to
employ Scheef & Stone, LLP as special counsel.
Debtors require the services of the firm to represent them in
matters related to their intellectual property, including the
filing of patent applications.
Scheef & Stone's hourly rates are as follows:
Attorneys $250 - $600
Paralegals $180
In the 90-period preceding Debtors' bankruptcy filing, Scheef &
Stone received $302,595.94 in professional fees.
John Fischer, Esq., a partner at Scheef & Stone, disclosed in court
filings that the firm does not hold any interest adverse to Debtors
and their bankruptcy estates with respect to the matter on which it
is being retained.
The firm can be reached through:
John G. Fischer, Esq.
Scheef & Stone, LLP
2600 Network Blvd., Suite 400
Frisco, TX 75034
Telephone: (214) 472-2100
Facsimile: (214) 472-2150
Email: john.fischer@solidcounsel.com
About Diamondback Industries
Diamondback Industries is an ISO 9001 registered company that
manufactures tools and ballistics equipment including eliminators,
igniters, and power charges. For more information, visit
https://diamondbackindustries.com/
On April 21, 2020, Diamondback Industries and its affiliates sought
Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-41504).
The petitions were signed by Benton Cantey, president. Judge Edward
L. Morris presides over the cases. Diamondback was estimated to
have $10 million in assets and $10 million to $50 million in
liabilities.
Debtors have tapped Foley & Lardner LLP as their bankruptcy
counsel, Whitaker Chalk Swindle & Schwartz PLLC and Scheef & Stone
LLP as special counsel, and CR3 Partners, LLC as financial advisor.
Stretto is the claims agent, maintaining the page
https://cases.stretto.com/diamondback/
Debtors filed their joint Chapter 11 plan of reorganization and
disclosure statement on June 23, 2020.
DISCOVERY ESTATES: Case Summary & Unsecured Creditor
----------------------------------------------------
Debtor: Discovery Estates, LLC
3435 Wilshire Blvd.
#2700-76
Los Angeles, CA 90010
Business Description: Discovery Estates, LLC is a Single Asset
Real Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: August 3, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-17054
Judge: Hon. Sheri Bluebond
Debtor's Counsel: Brandon J. Anand, Esq.
ANAND LAW PC
5455 Wilshire Blvd., Ste 1609
Los Angeles, CA 90036
Tel: 323-325-3389
Email: brandon@anandlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Christopher Lim, manager.
The Debtor listed Kabbage as its sole unsecured creditor holding a
claim of $8,892.
A copy of the petition is available for free at PacerMonitor.com
at:
https://is.gd/BUpEbQ
DOVETAIL GALLERY: Amended Plan Confirmed by Judge
-------------------------------------------------
Judge Thomas P. Agresti has entered an order approving the Amended
Disclosure Statement and confirming the Amended Plan of Dovetail
Gallery Limited d/b/a Dovetail Gallery, Inc.
The Court has determined that the requirements for final approval
of the Amended Disclosure Statement and for confirmation of the
Amended Plan under 11 U.S.C. Sec. 1129 are satisfied and all
objections filed, if any, having been resolved or withdrawn.
A copy of the order dated June 26, 2020, is available at
https://tinyurl.com/yc6ls4be from PacerMonitor at no charge.
About Dovetail Gallery Limited
Dovetail Gallery Limited, which conducts business under the names
The Dovetail Gallery and Dovetail Gallery, Inc., filed a Chapter 11
petition (Bankr. W.D. Pa. Case No. 19-10134) on Feb. 14, 2019. In
the petition signed by its president, Gary Cacchione, the Debtor
was estimated to have assets of between $500,001 and $1 million and
liabilities of the same range. Judge Thomas P. Agresti oversees
the case. The Debtor is represented by Michael P. Kruszewski,
Esq., and the Quinn Law Firm. No committee of unsecured creditors
has been appointed in the Debtor's case.
ENOVA INTERNATIONAL: S&P Alters Outlook to Negative, Affirms B ICR
------------------------------------------------------------------
S&P Global Ratings said it revised its outlook on Enova
International Inc. (ENVA) to negative from stable. At the same
time, S&P affirmed its 'B' issuer credit rating on ENVA.
S&P also affirmed its 'B-' issue rating on the company's unsecured
notes. The recovery rating remains unchanged at '5', indicating its
expectation of a modest (15%) recovery in the event of default.
The outlook revision to negative reflects S&P's expectation that
ENVA's leverage will rise to 5.0x once it closes its acquisition of
OnDeck Capital Inc., as well as the potential integration risk
related to this transaction. ENVA is acquiring OnDeck Capital, an
online provider of small business loans, for about $90 million
through a combination of cash and equity. Under the agreement,
OnDeck shareholders will receive a fixed exchanged ratio of 0.092
shares of ENVA and $0.12 in cash for each OnDeck share for total
value of $1.38 per share. The transaction is expected to close in
the second half of 2020, and, upon closing, OnDeck shareholders
will own about 16.7% of ENVA.
As of June 30, 2020, OnDeck had about $686 million in debt, which
will be consolidated on ENVA's balance sheet upon the closing of
the transaction. Given the two U.S. securitizations that total $260
million are in accelerated amortization, it is possible that total
debt consolidated onto ENVA's balance sheet will be lower when the
transaction is finalized. For the 12 months ended June 30, 2020,
OnDeck's EBITDA of $35.3 million was affected by additional
provision for loan losses of $55 million, which was taken in the
first quarter because of COVID-19, and S&P does not add back to
EBITDA. As of March 31, 2020, OnDeck's $1.3 billion portfolio
included a 15% exposure to construction and 13% exposure to retail
trade, two segments S&P remains cautious about due to the COVID-19
pandemic.
Notwithstanding the rise in financial leverage, the acquisition
will enable ENVA to increase its revenues from small business
loans. Pro forma, ENVA expects its loan composition to be 60% small
business (versus 15% as of June 2020) and 40% consumer loans.
Revenue composition is expected to continue to favor consumer loans
(70% of total) over small business loans (30%) since consumer loans
have higher margins with shorter durations (higher inventory
turnover). The company expects annual cost synergies of
approximately $50 million when fully phased in and run-rate net
revenue synergies of $15 million by year-end 2022.
"Our consolidated gross debt calculation consists of $625 million
of senior unsecured notes, about $875 million in securitizations,
and $35 million in operating lease liabilities. Pro forma, we
expect annual adjusted EBITDA to be about $305 million-$325
million. For the quarter ended June 30, 2020, ENVA had $321.5
million in cash and cash equivalents," S&P said.
The negative outlook reflects S&P's expectations that leverage,
measured as debt to adjusted EBITDA, will approach 5.0x, primarily
because of the acquisition of OnDeck Capital and the consolidation
of its debt onto ENVA's balance sheet. S&P's outlook also considers
no imminent refinancing risk, adequate liquidity, EBITDA coverage
of 3.0x-4.0x, and steady growth in tangible equity.
"We could lower the ratings over the next 12 months if leverage,
measured by gross debt to EBITDA, stays above 5.0x, or if the
company faces material integration risk related to its
acquisition," S&P said.
"We could revise our outlook to stable over the next 12 months if
leverage remains well below 5.0x on a sustained basis and the
integration is successful. We would also likely revise our outlook
to stable if ENVA terminates its acquisition of OnDeck because of
either a lack of regulatory or shareholder approval," the rating
agency said.
EPIC Y-GRADE: Moody's Cuts Senior Secured Term Loan B to Ca
-----------------------------------------------------------
Moody's Investors Service affirmed EPIC Y-Grade Services, LP's
Corporate Family Rating at Caa2 and Probability of Default Rating
at Caa2-PD/LD (/LD appended). Moody's downgraded the remaining
senior secured Term Loan B due 2024 to Ca from Caa2. Moody's
assigned a B1 rating to the senior secured revolver due 2025 and a
Caa2 rating to the senior secured Term Loan B due 2027. Moody's
will withdraw the B1 rating of the revolver due 2023 and the Caa2
rating of the $75 million incremental term loan due 2024 following
their termination. The outlook remains negative.
"The affirmation of EPIC Y-Grade's CFR and continued negative
outlook reflects constrained liquidity in 2021 and still elevated
leverage," said Jonathan Teitel, a Moody's Analyst. "However, the
company is benefitting from recent debt repayment or conversion
into equity, equity commitments and benefits from the sale of a
joint interest in certain assets which support cash needs into
2021."
Assignments:
Issuer: EPIC Y-Grade Services, LP
Senior Secured First Lien Revolving Credit Facility, Assigned B1
(LGD1)
Senior Secured First Lien Term Loan B, Assigned Caa2 (LGD3)
Affirmations:
Issuer: EPIC Y-Grade Services, LP
Probability of Default Rating, Affirmed Caa2-PD /LD (/LD appended)
Corporate Family Rating, Affirmed Caa2
Downgrades:
Issuer: EPIC Y-Grade Services, LP
Senior Secured 1st Lien Term Loan, Downgraded to Ca (LGD5) from
Caa2 (LGD4)
Outlook Actions:
Issuer: EPIC Y-Grade Services, LP
Outlook, Remains Negative
RATINGS RATIONALE
The appending of EPIC Y-Grade's PDR with an "/LD" designation
indicates limited default for the exchange of loans into the new
revolver and new Term Loan B. Moody's considers these to be
distressed exchanges and therefore a default under its definitions.
The LD designation will be removed shortly after this action.
EPIC Y-Grade's Caa2 CFR reflects elevated leverage and liquidity
constraints in 2021. Cash needs through 2020 are supported by
recent capital contributions, equity commitments and an asset sale
though uncertainties around funding capital spending in 2021
persists. The company has flexibility on construction of its second
fractionator but it would require additional capital which could
potentially add further leverage to the company. With a fully used
$40 million revolver, Moody's views EPIC Y-Grade's liquidity as
weak given the uncertainties around capital funding in 2021 though
the company gains relief on financial covenants that have been
suspended into 2023.
EPIC Y-Grade's sale of a joint interest to BANGL, LLC (a consortium
that includes MPLX LP and WhiteWater Midstream) is a source of cash
in the near-term for the company to reinvest in its capital
program. Full year EBITDA in 2020 will be very low and leverage
will remain high in 2021. The asset sale will improve leverage
since BANGL will make use of otherwise unused capacity on EPIC
Y-Grade's system. EPIC Y-Grade's contracts are fixed fee and mostly
long-term leaving the company with limited direct commodity price
risk. However, only a portion of cash flow is underpinned by
minimum volume commitments leaving the company exposed to volume
risks in the weak commodity price environment and amid reduced
upstream capital spending.
The company's revolver due 2025 (first in payment priority) is
rated B1, its Term Loan B due 2027 (second in payment priority) is
rated Caa2, the same as the CFR, and its Term Loan B due 2024 (now
second in payment priority but becoming third in payment priority
at the end of September) is rated Ca. The revolver's expiration
will spring to February 2024 and the new Term Loan B's maturity
will spring to March 2024, ahead of the existing Term Loan B due
June 2024, to the extent that more than $50 million of the existing
Term Loan B remains outstanding. The remaining lenders of the Term
Loan B due 2024 have until September 30, 2020 to exchange their
loans for the new Term Loan B due 2027, which could shift the
composition of the capital structure, thereby increasing higher
priority debt and decreasing lower priority debt.
Moody's views the Caa2 rating of the Term Loan B due 2027 and the
Ca rating of the Term Loan B due 2024 as more appropriate than the
ratings suggested by Moody's loss given default with the present
capital structure based on its expectations of the company's
capital structure post September 30, 2020. As of July 31, about
$659 million of the $950 million principal amount of pre-existing
Term Loan B due 2024 exchanged into the new Term Loan B due 2027.
Including the 1% fee payable in kind, initial commitments under the
new Term Loan B due 2027 were about $666 million.
The negative outlook reflects risks around funding for capital
needs in 2021, the prospect for additional debt, constrained EBITDA
in 2020 and elevated leverage into 2021.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to a downgrade include erosion of
liquidity, increased debt or increased risk of default.
Factors that could lead to an upgrade include improved liquidity
including a funded capital program without incremental debt as well
as significant growth in EBITDA and correspondingly lower
leverage.
The principal methodology used in these ratings was Midstream
Energy published in December 2018.
EPIC Y-Grade Services, LP (a subsidiary of EPIC Y-Grade, LP) is a
privately-owned midstream energy company with NGL pipelines running
from the Permian Basin to Corpus Christi. EPIC Y-Grade is
majority-owned by Ares Management with ownership stakes also held
by Noble Midstream Partners and Salt Creek Midstream.
FANNIE MAE: Reports $2.5 Billion Net Income for Second Quarter
--------------------------------------------------------------
Federal National Mortgage Association filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q, reporting
net income of $2.54 billion on $27.29 billion of total interest
income for the three months ended June 30, 2020, compared to net
income of $3.43 billion on $30.28 billion of total interest income
for the three months ended June 30, 2019.
For the six months ended June 30, 2020, the Company reported net
income of $3 billion on $56.71 billion of total interest income
compared to net income of $5.83 billion on $60.92 billion of total
interest income for the same period in 2019.
As of June 30, 2020, the Company had $3.76 trillion in total
assets, $3.74 trillion in total liabilities, and $16.47 billion in
total stockholders' equity.
"During this time of economic uncertainty, Fannie Mae is a force
for stability, affordability, and liquidity in the housing markets.
In the second quarter, we helped hundreds of thousands of
homeowners and renters get the guidance and support they needed to
stay in their homes, while we delivered on record refinancing
demand. Fannie Mae will continue to work with partners across the
industry to fulfill our mission and our leadership role in housing
finance," Hugh R. Frater,
chief executive officer, said.
Fannie Mae Response to COVID-19
In March 2020, the COVID-19 outbreak in the United States was
declared a national emergency. The COVID-19 pandemic resulted in
stay-at-home orders, school closures, and widespread business
shutdowns across the country. Although business activity has begun
to resume to varying degrees, the speed and nature of the
resumption of economic activity remains highly uncertain. The
COVID-19 pandemic continues to have a significant impact on Fannie
Mae's business and financial results.
Fannie Mae Response
Fannie Mae is taking a number of actions to help borrowers,
renters, lenders, and its employees manage the negative impact of
the COVID-19 pandemic.
Borrowers and Renters
* Fannie Mae has implemented new policies to enable the
company's single-family and multifamily loan servicers to
better assist borrowers and renters impacted by COVID-19,
including to:
- provide forbearance to single-family borrowers reporting
they are experiencing a financial hardship due to the
COVID-19 outbreak for up to 180 days, and at the
borrower's request, extend the forbearance period up to
a maximum of 12 months total; approximately 972,000
single-family loans in the company's book of business
were in forbearance as of June 30, 2020;
- offer options following forbearance, including a
repayment plan, payment deferral, or a loan modification
that aims to maintain or reduce a borrower's monthly
payment;
- suspend foreclosures and foreclosure-related activities
for single-family properties through at least Aug. 31,
2020, other than for vacant or abandoned properties;
- report as current to credit bureaus homeowners who
comply with their forbearance plan and were current
prior to receiving COVID-19-related forbearance and
provide that no late fees are charged for homeowners in
a forbearance plan; and
- provide forbearance to multifamily borrowers
experiencing a financial hardship due to the COVID-19
outbreak for up to 6 months on the condition that the
borrower suspend all renter evictions for nonpayment of
rent during the forbearance period, through the 120-day
eviction moratorium under the CARES Act, which ended on
July 25, 2020, or any longer period required by state or
local law.
* Fannie Mae created the #HeretoHelp educational effort and
updated the company's KnowYourOptions.com website to help
keep people in their homes, providing information and
resources on relief options for borrowers and renters
impacted by COVID-19. The website includes the Renters
Resource Finder, an online tool that allows renters to enter
their building address to determine whether they live in a
Fannie Mae-financed property and learn what resources they
can access for help. Resources include access to Fannie
Mae's Disaster Response Network, which offers free
assistance to renters in Fannie Mae-financed rental
properties, such as HUD-approved housing counselors that can
help create a personalized action plan, offer financial
coaching and budgeting, and provide other support.
Lenders
* Fannie Mae provided more than $453 billion in liquidity to
the single-family and multifamily mortgage markets from the
beginning of March 2020 through June 2020, including more
than $241 billion through the company's whole loan conduit
to support small and mid-sized lenders, including community
lenders, fulfilling Fannie Mae's mission to stabilize the
housing finance market and provide liquidity, support, and
access to affordable mortgage financing in all U.S. markets
in all economic cycles.
* Fannie Mae limited the duration of single-family servicers'
obligations to advance principal and interest payments on
delinquent loans to four months.
* Fannie Mae continues to build its digital mortgage
capabilities, enabling the company to adapt quickly to
lenders' needs. In addition, the company is offering
measures to help ensure lenders have the clarity and
flexibility to continue to lend in a prudent and responsible
manner during the COVID-19 pandemic. These measures
include: offering additional methods of obtaining verbal
verification of borrower employment; using the company's
digital tools to offer flexibilities related to the lender's
process for obtaining inspections and appraisals; and
allowing remote online notarization options.
Employees
* Fannie Mae has taken steps to protect the safety and
resiliency of its workforce. The company has required
nearly all of its workforce to work remotely since mid-March
and continues to assess when it will be safe for employees
to return to the office.
* To date, the company's business resiliency plans and
technology systems have effectively supported its company-
wide telework arrangement, allowing Fannie Mae to continue
its critical function of supporting mortgage market
liquidity.
* Fannie Mae offers support services and resources for
employees and their families affected by COVID-19, including
the company's Employee Assistance Program that provides a
helpline number to support loved ones who may not be covered
otherwise.
* Fannie Mae continued to pay most contractors (e.g.,
cafeteria staff) and accelerated payments to identified
small businesses.
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/XxquiB
About Fannie Mae and Freddie Mac
Federal National Mortgage Association (OTCQB: FNMA), commonly known
as Fannie Mae -- http://www.FannieMae.com/-- is a
government-sponsored enterprise (GSE) that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold. Fannie Mae helps make the 30-year
fixed-rate mortgage and affordable rental housing possible for
millions of Americans. The Company partners with lenders to create
housing opportunities for families across the country. A brother
organization of Fannie Mae is the Federal Home Loan Mortgage
Corporation (FHLMC), better known as Freddie Mac Freddie Mac
(OTCBB: FMCC) -- http://www.FreddieMac.com/-- was established by
Congress in 1970 to provide liquidity, stability and affordability
to the nation's residential mortgage markets. Freddie Mac supports
communities across the nation by providing mortgage capital to
lenders.
About Fannie Mae's Conservatorship
and Agreements with Treasury
Fannie Mae has operated under the conservatorship of FHFA since
Sept. 6, 2008. Treasury has made a commitment under a senior
preferred stock purchase agreement to provide funding to Fannie Mae
under certain circumstances if the company has a net worth deficit.
Pursuant to this agreement and the senior preferred stock the
company issued to Treasury in 2008, the conservator has declared
and directed Fannie Mae to pay dividends to Treasury on a quarterly
basis for every dividend period for which dividends were payable
since the company entered conservatorship in 2008.
FENER LLC: Aug. 4 Disclosure Statement Hearing Set
--------------------------------------------------
On June 19, 2020, Fener, LLC and Kuru, Inc. (Plan Sponsor) filed
with the U.S. Bankruptcy Court for the District of Maryland at
Baltimore a Disclosure Statement and a Plan. On June 26, 2020,
Judge Michelle M. Harner ordered that:
* Aug. 4, 2020, at 11:00 a.m. is the hearing to consider the
approval of the Disclosure Statement to be conducted by
videoconference.
* July 28, 2020, is fixed as the last day for filing and serving
in accordance with Federal Bankruptcy Rule 3017(a) written
objections to the Disclosure Statement.
A copy of the order dated June 26, 2020, is available at
https://tinyurl.com/y9fc6t4l from PacerMonitor at no charge.
Attorney for Plan Sponsor:
Steven L. Goldberg
McNamee Hosea et al.
6411 Ivy Lane, Suite 200
Greenbelt, MD 20770
About Fener LLC and Kuru Inc.
Fener, LLC, is a Maryland limited liability company with its
principal place of business in Baltimore City. It owns the real
property and improvements located at 801 S. Broadway, Baltimore,
Md.
Kuru, Inc., operates Jimmy's Restaurant of Fells Point from the
property.
Fener, LLC and Kuru, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Md. Lead Case No. 20-10720) on Jan.
20, 2020.
At the time of the filing, Fener, LLC, disclosed assets of between
$1 million and $10 million and liabilities of the same range. Kuru,
Inc., had estimated assets of between $50,000 and $100,000 and
liabilities of between $1 million and $10 million.
The Debtors tapped McNamee, Hosea, Jernigan, Kim, Greenan & Lynch,
P.A. as their legal counsel.
FIELDWOOD ENERGY: Case Summary & 30 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Fieldwood Energy LLC
2000 W. Sam Houston Pkwy. S.
Suite 1200
Houston, TX 77042
Business Description: The Debtors, together with their non-
debtor affiliates are an independent
exploration and production company in
the Gulf of Mexico. The Company is
focused on the exploration and
development of offshore oil and gas
assets in the shallow water and
deepwater Gulf of Mexico and the Gulf
Coast region in the U.S.
Chapter 11 Petition Date: August 3, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Fourteen affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Fieldwood Energy LLC (Lead Debtor) 20-33948
Dynamic Offshore Resources NS, LLC 20-33947
Fieldwood Energy Inc. 20-33949
Fieldwood Energy Offshore LLC 20-33950
Fieldwood Onshore LLC 20-33951
Fieldwood SD Offshore LLC 20-33952
FW GOM Pipeline, Inc. 20-33953
GOM Shelf LLC 20-33954
Bandon Oil and Gas GP, LLC 20-33955
Bandon Oil and Gas, LP 20-33956
Fieldwood Energy SP LLC 20-33958
Galveston Bay Pipeline LLC 20-33959
Galveston Bay Processing LLC 20-33960
Fieldwood Offshore LLC 20-33961
Judge: Hon. David R. Jones
Debtors' Counsel: Alfredo R. Perez, Esq.
WEIL, GOTSHAL & MANGES LLP
700 Louisiana Street, Suite 1700
Houston, Texas 77002
Tel: (713) 546-5000
Fax: (713) 224-9511
Email: Alfredo.Perez@weil.com
- and -
Matthew S. Barr, Esq.
Jessica Liou, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
Email: Matt.Barr@weil.com
Jessica.Liou@weil.com
Debtors'
Financial
Advisor: ALIXPARTNERS, LLP
1221 McKinney Street, Suite 3275
Houston, Texas 77010
Debtors'
Investment
Banker: HOULIHAN LOKEY INC.
245 Park Avenue, 20th Floor
New York, New York 10167
Debtors'
Claims,
Noticing &
Solicitation
Agent: PRIME CLERK LLC
830 Third Avenue, 9th Floor
New York, New York 10022
https://is.gd/q4ndf9
Estimated Assets
(on a consolidated basis): $1 billion to $10 billion
Total Liabilities
(on a consolidated basis): $1 billion to $10 billion
The petitions were signed by Mike Dane, senior vice president and
chief financial officer.
A copy of Fieldwood Energy LLC'S petition is available for free at
PacerMonitor.com at:
https://is.gd/keamWx
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Oceaneering International Inc. Trade Debt $13,860,073
Attn.: Roderick A. Larson,
President and
Chief Executive Officer
11911 FM 529
Houston, TX 77041
Tel: (985) 329‐3900
Fax: (985) 329‐3901
Email: usremittancesoii@oceaneering.com
2. Atlantic Maritime Trade Debt $13,539,719
Services Inc.
Attn.: President or
General Counsel
5847 San Felipe, Suite 3500
Houston, TX 77057
Tel: (281) 809‐0377
Email: eren.demet@valaris.com
3. Subsea 7 US LLC Trade Debt $10,869,562
Attn.: John Evans, CEO
17220 Katy Freeway, Suite 100
Houston, TX 77094
Tel: (713) 430‐1100
Tel: (713) 300‐6573
Fax: (713) 461‐0039
Email: denia.espinoza@subsea7.com
4. Kilgore Marine Services Inc. Trade Debt $7,903,718
Attn.: President or
General Counsel
200 Beaullieu Drive, Bldg. 8
Lafayette, LA 70508
Tel: (337) 988‐5551
Fax: (337) 988‐5559
Email: connie@kilgoremarine.com
5. XTO Energy Inc. Joint Interest $7,821,513
Attn.: Bart Chair, President Billing
22777 Sprinqoods Village Pkwy
Spring, TX 77389‐1425
Tel: (817) 885‐2292
Fax: (817) 870‐1671
Email: jib_inquiry@xtoenergy.com
6. Alliant Insurance Services, Inc. Insurance $7,428,620
Attn.: Thomas W. Corbett, Chairman
and Chief Executive Officer
701 B Street, 6th Floor
San Diego, CA 92101
Tel: (619) 238‐1828
Fax: (949) 756‐2713
Email: dkelly@alliant.com
7. Tetra Applied Technologies, Inc. Trade Debt $5,582,780
Attn.: Brad M. Murphy, President
and Chief Executive Officer
24955 I‐45 North
The Woodlands, TX 77380
Phone: (281) 364‐4324
Tel: (281) 367‐1983
Fax: (281) 364‐4398
Email: remit@tetratec.com
8. Island Operating Company Inc. Trade Debt $4,846,155
Attn.: General Counsel
108 Zachary Dr.
Scott, LA 70583
Tel: (337) 233‐9594
Fax: (337) 235‐9657
Email: wthibodeaux@islandoperating.com
9. OneSubsea LLC Trade Debt $4,428,425
Attn.: Oliver le Peuch, CEO
4646 W. Sam Houston Parkway N
Houston, TX 77041
Tel: (713) 939‐2211
Fax: (281) 285‐1927
Email: camcanar@slb.com
10. Anadarko US Offshore LLC Joint $3,981,853
Attn.: Vicki Hollub, President Interest
and Chief Executive Officer Billing
1201 Lake Robbins Dr.
The Woodlands, TX 77380
Tel: (800) 359‐1692
Tel: (832) 636‐1000
Fax: (832) 636‐0352
Email: crm.jib@anadarko.com
11. Workstrings International, LLC Trade Debt $3,273,601
Attn.: President or General Counsel
1150 SMEDE Hwy.
Broussard, LA 70518
Tel: (337) 989‐9675
Fax: (337) 492‐0012
Email: ron.comeaux@workstrings.com
12. Halliburton Energy Services Trade Debt $3,212,212
Attn.: Jeff Miller, Chairman, President
and Chief Executive Officer
3000 North Sam Houston Parkway East
Houston, TX 77032
Tel: (800) 444‐7830
Tel: (281) 871‐4000
Fax: (281) 871‐6450
Email: fdunarach@halliburton.com
13. Schlumberger Trade Debt $2,846,935
Technology Corporation
Attn.: Oliver le Peuch, CEO
1200 Enclave Parkway
Houston, TX 77077
Tel: (504) 851‐1074
Tel: (713) 513‐2000
Fax: (281) 285‐1927
Email: namremittance@slb.com
14. Baker Hughes Oilfield Trade Debt $2,644,179
Operations Inc.
Attn.: Lorenzo Simonelli, Chairman
and Chief Executive Officer
17021 Aldine Westfield
Houston, TX 77073‐5101
Tel: (713) 879‐1889
Tel: (713) 439‐8600
Fax: (713) 439‐8699
Email: arcccashapplication@bakerhughes.com
15. Linear Controls Inc. Trade Debt $2,516,172
Attn.: President or General Counsel
107 1/2 Commission Blvd.
Lafayette, LA 70508
Tel: (337) 857‐8215
Fax: (337) 837‐2121
Email: payments@linearcontrols.net
16. Wood Group PSN Inc. Trade Debt $2,390,515
Attn.: Robin Watson, CEO
17325 Park Row
Houston, TX 77084
Tel: (337) 234‐0100
Fax: (337) 234‐0193
Email: remittance.usfsc@woodgroup.com
17. W&T Offshore Inc. Joint $2,382,217
Attn.: Tracy W. Krohn, CEO Interest
Nine Greenway Plaza, Suite 300 Billing
Houston, TX 77046
Tel: (713) 626‐8525
Fax: (713) 626‐8527
Email: rstanley@wtoffshore.com
18. Fluid Crane & Construction Inc. Trade Debt $2,204,929
Attn.: President or General Counsel
5411 Hwy 90 E
New Iberia, LA 70560
Tel: (337) 364‐6191
Fax: (337) 364‐0410
Email: jrenard@fluidcrane.com
19. Offshore Energy Services, Inc. Trade Debt $2,187,316
Attn.: General Counsel
5900 US Hwy 90 E
Broussard, LA 70518
Tel: (337) 837‐1024
Fax: (337) 837‐3627
Email: knorris@offshorees.com
20. Gate Trade Debt $2,167,941
Attn.: Grant Gibson, CEO
16360 Park Ten Place, Suite 206
Houston, TX 77084
Tel: (713) 303‐5169
Tel: (281) 398‐5781
Fax: (775) 618‐6902
Email: mmyhre@gateinc.com
21. Prime Tank LLC Trade Debt $2,062,800
Attn.: General Counsel
1253 Petroleum Parkway
Broussard, LA 70518
Tel: (888) 837‐5888
Fax: (337) 256‐8861
Email: markbelanger@primetankllc.com
22. Acadian Contractors Inc. Trade Debt $1,970,106
Attn.: General Counsel
17102 West LA Hwy 330
Abbeville, LA 70511‐1608
Tel: (337) 893‐6397
Fax: (337) 893‐6403
Email: troyb@acadiancontractors.com
23. Superior Energy Services LLC Trade Debt $1,935,681
Completion Services,
Attn.: Donald Dunlap, President
and Chief Executive Officer
16619 Aldine Westfield
Houston, TX 77032
Tel: (337) 837‐6047
Tel: (281) 784‐5700
Fax: (281) 784‐5745
Email: laf.accountsrecievable@superior‐
energy.com
24. Solar Turbines Incorporated Trade Debt $1,868,725
Attn.: President or
General Counsel
13105 NW Freeway
Houston, TX 77040
Tel: (858) 292‐3151
Fax: (858) 694‐6891
Email: t3_solar_accounts_receivable@solar‐
turbines.com
25. FMC Technologies Inc. Trade Debt $1,744,565
Attn.: Douglas J.
Pferdehirt, Chairman
and Chief Executive Officer
11740 Katy Freeway
Houston, TX 77079
Tel: (281)‐591‐4000
Fax: (337) 837‐5844
Email: fmcar@fmcti.com
26. Gulf Crane Services, Inc. Trade Debt $1,666,920
Attn.: Charles Bollinger, CEO
73413 Bollfield Dr.
Covington, LA 70434
Tel: (985) 892‐0056
Fax: (985) 892‐4061
Email: ashleysclafini@gulfbank.com
27. Warrior Energy Trade Debt $1,655,817
Services Corporation
Attn.: Mark Poche, VP Gulf Coast Region
5801 Highway 90 E
Broussard, LA 70518
Tel: (337) 714‐2556
Fax: (337) 714‐0010
Email: mpche@bwwc.com
28. Clariant Corporation Trade Debt $1,648,849
Attn.: President or General Counsel
4000 Monroe Road
Charlotte, NC 28205
Tel: (704) 331‐7000
Fax: (704) 377‐1063
Email: oilservices.gom@clariant.com
29. Aker Solutions Inc. Trade Debt $1,297,230
Attn.: Luis Arujo, CEO
2103 Citywest Blvd., Suite 800
Houston, TX 77042
Tel: (713) 685‐5700
Fax: (713) 685‐5712
Email: musa.hussain@akersolutions.com
30. Trendsetter Engineering Inc. Trade Debt $1,249,521
Attn: General Counsel
10430 Rodgers Rd.
Houston, TX 77070
Tel: (281) 465‐8858
Email: p.orcutt@trensetterengineering.com
FREDERICK D. FEIGL: Hammock Buying 1959 Cessna C-172 for $13K
-------------------------------------------------------------
Frederick Douglas Feigl asks the U.S. Bankruptcy Court for the
Northern District of Texas authorize the sale of his 1959 Cessna
C-172 to Hammock Aviation Services, Inc. for $12,900, subject to
higher and better offers.
Objections, if any, must be filed within 21 days from the date of
service.
The Debtor is an individual who works and resides in Dallas County,
Texas. The primary cause of the bankruptcy filing was the demise
of a car dealership that had been in operations for approximately
10 years. The Debtor was a 50% owner of the car dealership and had
personal guarantees on many of the business liabilities.
At the time of the bankruptcy filing, the Debtor owned the
Property. The Property is not air worthy and is partially
disassembled. He originally estimated the value of the Property at
$18,000. However, after consulting with an aviation mechanic and
reviewing similar aircraft for sale online, he believes the
Property is worth approximately $13,000.
The Property has not had an annual inspection in four years. In
order to pass inspection, the Property will require several
thousand dollars' worth of avionics equipment. In addition, the
engine would require a partial tear down and reassembly from its
current state as the Property still has its original engine.
The offer received from Hammock is for $12,900. It is the highest
and best offer Debtor has received to purchase the Property.
The Debtor has solicited other potential purchasers including
mechanics in the aviation industry, but to date no one has been
willing to make an offer to purchase the Property since the
Property is partially disassembled and would be difficult to move.
Upon information and belief, Hammock is willing to purchase the
Property, because it is familiar with the aircraft and the
aircraft's maintenance history. The Debtor does not know of anyone
else who would be willing to purchase the Property, especially in
its current state.
The Debtor desires to sell the Property to the Buyer free and clear
of liens and encumbrances, with any liens against the Property to
attach to the proceeds of the sale. He believes the sale of the
Property is in the best interest of the bankruptcy estate as it
will generate immediate funds that will be available to pay
creditors.
By and through the Motion, the Debtor is also soliciting other
interested parties to bid on the Property. In the event he
receives a higher offer to purchase the Property, an auction for
the Property will be conducted telephonically and/or by video
conference the business day before the scheduled hearing. All
interested purchasers should contact the Debtor's counsel via email
at areya@holderlawpc.com by July 27, 2020 in order to obtain
instructions for participating in a telephonic or video auction
conducted via Zoom or similar method.
The winner of the auction will then be announced at the hearing on
the Motion to Sell, and the Buyer must consummate the sales
transaction with a cash payment within 15 days of the Order
approving the Motion. In the event the winning bidder does not
consummate the sale within 15 days of the entry of the Order
approving the Motion, the Debtor is authorized to sell the Property
to the next highest bidder.
Finally, the Debtor asks that the Court waives the 14-day stay
under Federal Rule of Bankruptcy Procedure 6004(h) so that upon
approval of the relief sought, the Order granting such will be
effective immediately.
Frederick Douglas Feigl sought Chapter 11 protection (Bankr. N.D.
Tex. Case No. 19-34156) on Dec. 18, 2019. The Debtor tapped Areya
Holder, Esq., as counsel.
FRONTIER COMMUNICATIONS: Debtholders Object to Disclosure Statement
-------------------------------------------------------------------
The ad hoc group of certain holders of notes issued by Debtors
Frontier Southwest Incorporated, Frontier Florida LLC, Frontier
California Inc., Frontier North Inc. and/or Frontier West Virginia
Inc., respectively (such holders collectively, the "Ad Hoc Group of
Subsidiary Debtholders") joins in the limited objection of U.S.
Bank National Association as Subsidiary Unsecured Notes Trustee to
Approval of Disclosure Statement of Frontier Communications Corp.
and its Debtor Affiliates.
The Ad Hoc Group of Subsidiary Debtholders points out that certain
elements of the Plan and Disclosure Statement require greater
detail from the Debtors in order to allow affected creditors in
Classes 8 and 9 to evaluate whether their interests truly are
unimpaired under the Plan. The Plan’s release provisions
currently do not unequivocally assure the Holders of Class 9 Claims
that a Plan release will not affect their rights.
The Ad Hoc Group of Subsidiary Debtholders asserts that the Plan
and Disclosure Statement do not provide adequate disclosure
regarding existing intercompany claims and the anticipated
restructuring transactions, and whether such claims and/or
transactions may in fact impair the Holders of Subsidiary Unsecured
Notes Claims and Subsidiary Secured Notes Claims.
The Ad Hoc Group of Subsidiary Debtholders joins in, and
incorporates by reference, the arguments made by the Subsidiary
Unsecured Notes Trustee in the Limited Objection.
A copy of the Ad Hoc Group's objection to disclosure statement
dated June 26, 2020, is available at https://tinyurl.com/yb9capzb
from PacerMonitor at no charge.
Counsel to the Ad Hoc Group:
SHEARMAN & STERLING LLP
Joel Moss
Jordan A. Wishnew
599 Lexington Avenue
New York, NY 10022
Telephone: (212) 848-4000
Facsimile: (212) 848-7179
About Frontier Communications
Frontier Communications Corporation (NASDAQ: FTR) offers a variety
of services to residential and business customers over its
fiber-optic and copper networks in 29 states, including video,
high-speed internet, advanced voice, and Frontier Secure digital
protection solutions.
Frontier Communications Corporation and 103 related entities sought
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on
April 14, 2020. Judge Robert D. Drain oversees the cases.
The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore
as financial advisor; and FTI Consulting, Inc., as restructuring
advisor. Prime Clerk is the claims agent, maintaining the page
http://www.frontierrestructuring.com/and
https://cases.primeclerk.com/ftr
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors in Debtors' Chapter 11 cases. The committee
tapped Kramer Levin Naftalis & Frankel LLP as its counsel; Alvarez
& Marsal North America, LLC as financial advisor; and UBS
Securities LLC as investment banker.
FRONTIER COMMUNICATIONS: National Public Objects to Disclosure
--------------------------------------------------------------
National Public Finance Guarantee Corporation joins in the limited
objection of U.S. Bank National Association as Subsidiary Unsecured
Notes Trustee to Approval of Disclosure Statement of Frontier
Communications Corp. and its Debtor Affiliates.
National asserts that the Disclosure Statement filed by the Debtors
cannot be approved in its current form because (a) it does not have
"adequate information" within the meaning of Section 1125 of the
Bankruptcy Code, and (b) the proposed Plan has provisions that are
inconsistent with the "unimpaired" treatment provided for
Subsidiary Unsecured Notes (Class 9) under the proposed Plan.
National, who has insured Subsidiary Unsecured Notes in the
principal amount of approximately $115 million, incorporates by
reference the arguments and authorities contained in the Limited
Objection.
National respectfully requests that the Court grant the relief
requested in the Limited Objection as a condition for its approval
of the Disclosure Statement, and such other and further relief as
the Court deems just and proper.
A copy of the National's objection to disclosure statement dated
June 26, 2020, is available at https://tinyurl.com/y9437bwu from
PacerMonitor at no charge.
Counsel for National Public Finance:
KING & SPALDING LLP
Arthur J. Steinberg
1185 Avenue of the Americas
New York, New York 10036-4003
Telephone: (212) 556-2100
Facsimile: (212) 556-2222
E-mail: asteinberg@kslaw.com
About Frontier Communications
Frontier Communications Corporation (NASDAQ: FTR) offers a variety
of services to residential and business customers over its
fiber-optic and copper networks in 29 states, including video,
high-speed internet, advanced voice, and Frontier Secure digital
protection solutions.
Frontier Communications Corporation and 103 related entities sought
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on
April 14, 2020. Judge Robert D. Drain oversees the cases.
The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore
as financial advisor; and FTI Consulting, Inc., as restructuring
advisor. Prime Clerk is the claims agent, maintaining the page
http://www.frontierrestructuring.com/and
https://cases.primeclerk.com/ftr
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped Kramer Levin Naftalis & Frankel LLP as its
counsel; Alvarez & Marsal North America, LLC as financial advisor;
and UBS Securities LLC as investment banker.
FRONTIER COMMUNICATIONS: U.S. Bank Objects to Disclosure Statement
------------------------------------------------------------------
U.S. Bank National Association, as indenture trustee (in such
capacities collectively, the "Subsidiary Unsecured Notes Trustee")
under each of the Subsidiary Unsecured Notes Indentures, and on
behalf of the holders of $700 million in outstanding principal
amount of Subsidiary Unsecured Notes issued thereunder respectively
by the Debtors Frontier California Inc., Frontier Florida LLC, and
Frontier North Inc., submits this limited objection to Approval of
Disclosure Statement of Frontier Communications Corp. and its
Debtor Affiliates.
The Subsidiary Unsecured Notes Trustee asserts that the Disclosure
Statement must provide enough information to enable the Debtors'
creditors and this Court to make an informed judgment about the
Plan. There is not presently enough information regarding the
Debtors' proposed treatment of Intercompany Claims.
The Subsidiary Unsecured Notes Trustee has asked the Debtors for
additional clarifying language indicating that any release to be
granted by U. S. Bank National Association as a Member of the
Official Committee of Unsecured Creditors will be solely in such
capacity and will have no effect on the rights of the Holders of
Class 9 Subsidiary Unsecured Notes Claims.
The Subsidiary Unsecured Notes Trustee points out that because the
Class 9 Claimants are having their Subsidiary Unsecured Notes
Reinstated by a subset of Debtors who are not substantively
consolidated but are all covered by a joint Plan, it is important
for the Debtors to disclose their proposed Restructuring
Transactions as soon as possible so that the Holders of Class 9
Claims and the Subsidiary Unsecured Notes Trustee have a meaningful
right to timely object to Confirmation of the Plan, in the unlikely
event that it becomes necessary.
A copy of the Subsidiary Unsecured Notes Trustee's objection to
disclosure statement dated June 26, 2020, is available at
https://tinyurl.com/y8bzlo3b from PacerMonitor at no charge.
Counsel for U.S. Bank National:
KELLEY DRYE & WARREN LLP
101 Park Avenue
New York, New York 10178
Tel: (212) 808-7800
Fax: (212)-808-7897
James S. Carr, Esq.
Kristin S. Elliott, Esq
- and -
MASLON LLP
3300 Wells Fargo Center
90 South Seventh Street
Minneapolis, Minnesota 55402
Tel: (612) 672-8200
Clark T. Whitmore, Esq.
Jason Reed, Esq.
About Frontier Communications
Frontier Communications Corporation (NASDAQ: FTR) offers a variety
of services to residential and business customers over its
fiber-optic and copper networks in 29 states, including video,
high-speed internet, advanced voice, and Frontier Secure digital
protection solutions.
Frontier Communications Corporation and 103 related entities sought
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on
April 14, 2020. Judge Robert D. Drain oversees the cases.
The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore
as financial advisor; and FTI Consulting, Inc., as restructuring
advisor. Prime Clerk is the claims agent, maintaining the page
http://www.frontierrestructuring.com/and
https://cases.primeclerk.com/ftr
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors in Debtors' Chapter 11 cases. The committee
tapped Kramer Levin Naftalis & Frankel LLP as its counsel; Alvarez
& Marsal North America, LLC as financial advisor; and UBS
Securities LLC as investment banker.
G-III APPAREL: S&P Cuts Rating on New Senior Secured Notes to 'BB'
------------------------------------------------------------------
S&P Global Ratings lowered its issue-level rating on G-III Apparel
Group Ltd.'s proposed $400 million senior secured notes to 'BB'
from 'BB+' and revised its recovery rating to '3' from '2'. The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 60%) recovery in the event of a payment default.
The downgrade reflects the reduced recovery prospects for the
holders of the proposed notes after the company upsized the
facility to $400 million from the initial proposal of $350 million.
G-III plans to use the proceeds from the notes to refinance its
$300 million term loan due 2022 and retain any remaining proceeds
to bolster its liquidity cushion.
GNC HOLDINGS: Landis Rath Represents JP Morgan, Term Loan Group
---------------------------------------------------------------
In the Chapter 11 cases of GNC Holdings, Inc., et al., the law firm
of Landis Rath & Cobb LLP submitted a verified statement under Rule
2019 of the Federal Rules of Bankruptcy Procedure, to disclose that
it is representing JPMorgan Chase Bank, N.A. and the Ad Hoc Group.
LRC concurrently represents multiple clients in connection with the
chapter 11 cases of the above-captioned debtors and
debtors-in-possession.
LRC is co-counsel for the group formed by the Debtors' first-in,
last-out senior secured term loans.
LRC is co-counsel for JPMorgan Chase Bank, N.A., in its capacity as
administrative agent and collateral agent for and on behalf of
itself and the other lenders party to the DIP ABL FILO Credit
Agreement.
The Ad Hoc Group and JPMorgan are hereinafter collectively referred
to as, the "Clients".
LRC has fully advised the Clients with respect to this concurrent
representation. The Clients each have (a) consented to such
representation and (b) requested that LRC represent them in the
Cases.
LRC does not possess any claims against or interests in any of the
above-captioned Debtors.
Counsel to JPMorgan Chase Bank, N.A. and the Ad Hoc Group can be
reached at:
LANDIS RATH & COBB LLP
Richard S. Cobb, Esq.
Matthew R. Pierce, Esq.
919 Market Street, Suite 1800
Wilmington, DE 19801
Telephone: (302) 467-4400
Facsimile: (302) 467-4450
Email: cobb@lrclaw.com
pierce@lrclaw.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/mwY32q
About GNC Holdings
GNC Holdings Inc. -- http://www.gnc.com/-- is a global health and
wellness brand with a diversified omni-channel business. In its
stores and online, GNC Holdings sells an assortment of performance
and nutritional supplements, vitamins, herbs and greens, health and
beauty, food and drink, and other general merchandise, featuring
innovative private-label products as well as nationally recognized
third-party brands, many of which are exclusive to GNC Holdings.
GNC Holdings and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11662) on
June 23, 2020. The Debtors disclosed $1,415,957,000 in assets and
$895,022,000 in liabilities as of March 31, 2020.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Latham
& Watkins, LLP as legal counsel; Evercore Group, LLC as investment
banker and financial advisor; FTI Consulting, Inc., as financial
advisor; and Prime Clerk as claims and noticing agent. Torys LLP
is the legal counsel in the Companies' Creditors Arrangement Act
case.
GOLDEN COMMUNICATIONS: Taps Magarian & DiMercurio as Counsel
------------------------------------------------------------
Golden Communications Inc. seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Magarian &
DiMercurio, A Professional Law Corporation as its litigation
counsel.
The Debtor requires the firm's services to advise and assist the
Debtor:
a. in prosecuting or defending its Appeal from the Superior
Court of Los Angeles, Case Number BC555618, in the matter of Krubim
26 International Inc., v. Golden Communications Inc., et al.,
Defendant and Appellant.
b. To take such other action and perform such other services
as Debtor may require of the firm in connection with the Appeal.
The firm's current hourly rates are:
Mark D. Magarian $375
Krista DiMercuria $350
The firm is a disinterested person within the meaning of 11 U.S.C.
Sec 101(14), according to court filings.
The firm can be reached through:
Mark D. Magarian, Esq.
Krista DiMercuria, Esq.
Magarian & DiMercurio,
A Professional Law Corporation
315 N Puente St unit a
Brea, CA 92821
Phone: +1 888-684-4066
About Golden Communications
Established in 1996, Golden Communications Inc. is a provider of
website development services. Based in Newport Beach in sunny
Orange County, the Company has been serving Southern California and
the Los Angeles area since its inception. Visit
https://www.goldencomm.com for more information.
Golden Communications sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11837) on June 26,
2020. The petition was signed by Golden Communications CEO Jason
M. Lavin. At the time of the filing, Debtor disclosed estimated
assets of $500,000 to $1 million and estimated liabilities of $1
million to $10 million. Judge Erithe A. Smith oversees the case.
Goe Forsythe & Hodges, LLP is Debtor's legal counsel.
GRUPO FAMSA: Unsecured Creditors to Be Reinstated in Prepack Plan
-----------------------------------------------------------------
Grupo Famsa S.A.B. de C.V. filed with the U.S. Bankruptcy Court for
the Southern District of New York a Prepackaged Plan of
Reorganization and an explanatory Disclosure Statement on June 26,
2020.
Pursuant to the Plan, the Debtor is only seeking to restructure the
2020 Notes through the issuance of the New Notes and other
consideration described in greater detail herein and in the Plan.
Because the solicitation of votes and other items necessary to
obtain approval of the Plan will have been completed prior to the
commencement of the Chapter 11 Case, the Debtor believes that the
Chapter 11 Case will have little, if any, impact on its business,
and the Debtor will continue to operate its business during the
Chapter 11 Case exactly as it did prior to commencing the Chapter
11 Case. In addition, approval of the Plan will permit the Debtor
to realize a successful restructuring of the 2020 Notes, and thus,
approval of the Plan represents a significantly better outcome than
litigation surrounding the 2020 Notes or a liquidation of the
Debtor.
The Debtor has determined that a prolonged Chapter 11 case would
severely damage its ongoing business operations and threaten its
viability as a going concern. The prepackaged nature of the Plan
allows the Debtor to exit chapter 11 quickly, while the provisions
of the Plan allow the Debtor to reduce its debt service obligations
and position the Debtor for continued operations through the
issuance of New Notes.
Holders of 2020 Notes who were holders of record as of the Record
Date and who validly submitted their vote in favor of the Plan
prior to the Voting Deadline and delivered their 2020 Notes in
accordance with the required procedures will receive (i) New Series
A Notes in a principal amount equal to the sum of the principal
amount of 2020 Notes that they hold plus the amount of interest
accrued on the 2020 Notes up to the Effective Date and Cash in an
amount of US$10 per US$1,000 principal amount of 2020 Notes held by
them. All other Holders of 2020 Notes will receive New Series B
Notes in a principal amount equal to the principal amount of 2020
Notes that they hold.
Each Holder of an Allowed General Unsecured Claim shall have its
allowed general unsecured claim reinstated and paid on the later to
occur of the Effective Date or when such allowed general unsecured
Claim becomes due in the ordinary course of business of the Debtor
or the Reorganized Debtor in accordance with the terms of the
particular transaction giving rise to such Allowed General
Unsecured Claim.
On the Effective Date, allowed interests will be reinstated.
All Cash consideration necessary for the Reorganized Debtor to make
payments or distributions pursuant to the Plan shall be obtained
from Cash of the Reorganized Debtor. Further, the Reorganized
Debtor will be entitled to transfer funds between and among itself
and the Non-Debtor Guarantors as it determines to be necessary or
appropriate to enable it to satisfy its obligations under the Plan.
Except as set forth herein, any changes in intercompany account
balances resulting from such transfers will be accounted for and
settled in accordance with the Debtor’s historical intercompany
account settlement practices and will not violate the terms of the
Plan.
A full-text copy of the Disclosure Statement dated June 26, 2020,
is available at https://tinyurl.com/yczjqlq6 from PacerMonitor at
no charge.
Counsel to Reorganized Debtor:
Paul Hastings LLP
200 Park Avenue
New York, New York 10166
Attn: Pedro A. Jimenez, Esq.
About Grupo Famsa
Grupo Famsa, S.A.B. de C.V. is a variable capital public stock
corporation under the laws of Mexico, originally organized on Dec.
27, 1979 under the name Corporacion Famsa, S.A. The Debtor is not
a public reporting company in the United States pursuant to the
Securities Exchange Act of 1934. The Debtor is the parent company
of several non-debtor subsidiaries, both in the United States and
Mexico, which operate in the retail and banking sectors. Visit
https://www.grupofamsa.com/ for more information.
Grupo Famsa filed Chapter 11 Petition (Bankr. S.D.N.Y. Case No.
20-11505) on June 26, 2020. The case is assigned to Hon. Shelley
C. Chapman. The Debtor's counsel is Pedro A. Jimenez, Esq.
At the time of filing, the Debtor had $1 billion to $10 billion was
estimated to have assets and liabilities.
GULF AVIATION: Seeks to Hire Jones Galligan as Legal Counsel
------------------------------------------------------------
Gulf Aviation, Inc. seeks approval from the U.S. Bankruptcy Code
for the Southern District of Texas to employ Jones, Galligan, Key
and Lozano, LLP, as its legal counsel.
Gulf Aviation requires Jones Galligan to:
(a) provide legal advice with respect to Debtor's rights and
duties as debtor-in-possession and continued business operations;
(b) assist, advise and represent the Debtor in post-petition
financing transactions;
(c) assist, advise and represent the Debtor in the sale of
certain assets;
(d) assist, advise and represent the Debtor in any manner
relevant to preserving and protecting the Debtor's estate;
(e) prepare on behalf the Debtor all necessary applications,
motions, answers, orders, reports, and other legal papers;
(f) appear in Court and to protect the interests of the Debtor
before the Court;
(g) assist the Debtor in administrative matters;
(h) perform all other legal services for the Debtor which may
be necessary and proper in these proceedings;
(i) assist, advise and represent the Debtor in any litigation
matters, including, but not limited to, adversary proceedings;
(j) provide other legal advice and services, as requested by
the Debtor, from time to time.
Jones Galligan's standard billing charges is $300 per hour for
attorney time.
Jones Galligan represents no interest adverse to Debtor, or to the
estate, according to court filings.
The firm can be reached through:
Rudy Salinas, Jr., Esq.
Jones, Galligan, Key and Lozano, LLP
2300 W Pike Blvd # 300
Weslaco, TX 78596
Phone: +1 956-968-5402
About Gulf Aviation Inc.
Gulf Aviation, Inc. provides aviation services as a fixed based
operation at the Valley International Airport (Harlingen, Texas)
including aircraft fuel sales, aircraft maintenance and repairs,
and ground support equipment maintenance services.
Gulf Aviation filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 19-10384) on
Oct. 1, 2019, listing under $1 million in both assets and
liabilities. Jana Smith Whitworth, Esq., at JS Whitworth Law Firm,
PLLC, is the Debtor's legal counsel.
GULFPORT ENERGY: Inks 16th Amendment to 2013 Credit Agreement
-------------------------------------------------------------
Gulfport Energy Corporation, as borrower, entered into a sixteenth
amendment to the Amended and Restated Credit Agreement, dated as of
Dec. 27, 2013, as amended on July 30, 2020, with the guarantors
party thereto, The Bank of Nova Scotia, as administrative agent,
and the lenders party thereto.
Among other changes, the Sixteenth Amendment amends the Credit
Agreement to: (i) require that, in the event of any issuances of
Senior Notes, including Second Lien Notes, after the Effective
Date, the then effective Borrowing Base will be reduced by a
variable amount prescribed in the Credit Agreement to the extent
the proceeds are not used to satisfy previously issued senior notes
within 90 days of such issuance; (ii) require that each Loan Notice
specify the amount of the then effective Borrowing Base and Pro
Forma Borrowing Base, the Aggregate Elected Commitment Amount, and
the current Total Outstandings, both with and without regard to the
requested Borrowing; (iii) permit the Borrower or any Restricted
Subsidiary to enter into obligations in connection with a Permitted
Bond Hedge Transaction or Permitted Warrant Transaction; (iv)
permit the Borrower to make any payments of Senior Notes and
Subordinated Obligation prior to their scheduled maturity, in any
event not to exceed $750,000,000 or, if lesser, the net cash
proceeds of any Senior Notes issued within 90 days before such
payment; (v) require that the Senior Notes have a stated maturity
date of no earlier than March 13, 2024, as well as not require
payment of principal prior to such date, in order for the Borrower
to be permitted to secure indebtedness under the Senior Notes; (vi)
permit certain additional liens securing obligations in respect of
the incurrence or issuance of any Permitted Refinancing Notes not
to exceed $750,000,000, subject to the terms of an intercreditor
agreement; and (vii) amend and restate the Applicable Rate Grid to
provide as follows:
Eurodollar Rate
Applicable Applicable Rate Loans & Letters Base Rate
Usage Level Commitment fee of Credit Loans
----------- ---------------- ----------------- ----------
Level 1 0.375% 2.00% 1.00%
Level 2 0.375% 2.25% 1.25%
Level 3 0.50% 2.50% 1.50%
Level 4 0.50% 2.75% 1.75%
Level 5 0.50% 3.00% 2.00%
About Gulfport
Gulfport Energy Corporation (NASDAQ: GPOR) --
http://www.gulfportenergy.com-- is an independent natural gas and
oil company focused on the exploration and development of natural
gas and oil properties in North America and a producer of natural
gas in the contiguous United States. Headquartered in Oklahoma
City, Gulfport holds significant acreage positions in the Utica
Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer
plays in Oklahoma. In addition, Gulfport holds non-core assets that
include an approximately 22% equity interest in Mammoth Energy
Services, Inc. (NASDAQ: TUSK) and has a position in the Alberta Oil
Sands in Canada through its 25% interest in Grizzly Oil Sands ULC.
Gulfport Energy received a letter on April 16, 2020, from the
Listing Qualifications Department of the Nasdaq Stock Market LLC
notifying Gulfport that for a period of 30 consecutive business
days preceding the date of the Notice, the bid price of Gulfport's
common stock had closed below $1.00 per share, the minimum closing
bid price required by the continued listing requirements of Nasdaq
Listing Rule 5450(a)(1).
Gulfport Energy reported net loss of $2.0 billion for the year
ended Dec. 31, 2019 as compared to net income of $430.6 million for
the year ended Dec. 31, 2018. As of March 31, 2020, the Company
had $3.26 billion in total assets, $2.48 billion in total
liabilities, and $784.05 million in total stockholders' equity.
* * *
As reported by the TCR on March 4, 2020, Moody's Investors Service
downgraded Gulfport Energy Corporation's Corporate Family Rating to
Caa1 from B2. "The downgrade reflects rising financial risks amid
low natural gas prices and limited hedging protection in place for
Gulfport in 2020. This required the company to significantly
reduce investment and allow production to fall significantly in
2020 in order to avoid new borrowings," commented Elena Nadtotchi,
Moody's vice president - senior credit officer.
HARVEST MIDSTREAM I: Moody's Assigns Ba3 CFR, Outlook Stable
------------------------------------------------------------
Moody's Investors Service assigned first time ratings to Harvest
Midstream I, L.P. including a Ba3 Corporate Family Rating, a Ba3-PD
Probability of Default Rating and a B1 rating to its proposed
issuance of $600 million senior unsecured notes. Moody's considers
Harvest Midstream to have good liquidity. The outlook is stable.
Harvest Midstream is a private, diversified oil and natural gas
gathering and processing company whose 1% general partner and its
limited partnership units are owned and controlled by Hildebrand
Enterprises LP (Hildebrand). Under the common ownership of
Hildebrand, Harvest Midstream has a strategic relationship with its
sister affiliate Hilcorp Energy I, L.P. (HEI, Ba1 RUR down) for
whom it provides midstream services in support of much of its
production. Harvest Midstream intends to use the proceeds of the
proposed notes issue to repay its term loan and amounts outstanding
under its revolving credit facility.
"Harvest Midstream generates a stable, contract-based revenue
stream, over 80% of which is generated under fixed-fee contracts,
providing a degree of certainty to cash flow available for debt
service," commented Andrew Brooks, Moody's Vice President.
"Moreover, with modest levels of projected growth capital spending,
and a limited initial distribution payout, Harvest Midstream should
be able to rapidly de-lever to its targeted level of under 3.5x
debt/EBITDA."
Assignments:
Issuer: Harvest Midstream I, L.P.
Probability of Default Rating, Assigned Ba3-PD
Corporate Family Rating, Assigned Ba3
Senior Unsecured Notes, Assigned B1 (LGD5)
Outlook Actions:
Issuer: Harvest Midstream I, L.P.
Outlook, Assigned Stable
RATINGS RATIONALE
The scale of Harvest Midstream's diverse midstream operating
platform was significantly enlarged with its $1.1 billion
acquisition in October 2018 of G&P assets in the San Juan Basin of
New Mexico and Colorado, which more than doubled its base revenues.
The gathering pipeline assets and natural gas processing capacity
acquired through Harvest Four Corners, LLC (Four Corners)
represents approximately 70% of the partnership's total revenue,
and generates about two-thirds of its EBITDA.
In July 2017, Hilcorp San Juan, an affliate of HEI, acquired San
Juan Basin oil and natural gas assets in a $3.0 billion transaction
with The Carlyle Group. Harvest Midstream is one of only two
principal natural gas gatherers in the San Juan, moving about
one-third of all volumes out of the basin, and 54% of Hilcorp's
total San Juan production. Fixed-fee contract provisions govern
about 75% of Four Corners' revenue, with its top four contract
counterparties comprising 80% of revenues under contracts with
about a five-year average remaining life.
Other midstream components of Harvest Midstream's asset base are
its gathering and transportation operations in Alaska, whose
contracts are 100% fixed-fee fee or cost of service based, joint
ventures in South Louisiana, the Eagle Ford Shale and the Utica and
other locations in Texas and Louisiana.
On June 30, HEI closed on its $5.5 billion acquisition of BP
p.l.c.'s (BP, A1 negative) entire Alaskan upstream and midstream
asset base. HEI expects to finance the acquisition through a
combination of seller-financing and cash. With the acquisition
having now closed, Moody's expects to soon resolve its review of
HEI's rating; depending on the outcome of the review, Harvest
Midstream's Ba3 CFR could come under downward pressure. BP Alaska's
midstream assets are comprised of its 49% interest in the Trans
Alaska Pipeline System and additional pipeline segments and
gathering systems.
The BP Alaska midstream assets will be sold to Harvest Midstream in
a $100 million transaction, which should close in 2020's third
quarter, furthering another significant increase in the
partnership's size and scale. Pro forma for BP Alaska midstream,
Harvest Midstream's full year revenue and EBITDA are projected to
increase by over 50%, mitigating to an extent the partnership's
outsized exposure to the San Juan. BP Alaska's midstream
contribution to consolidated EBITDA and cash flow will also
accelerate the deleveraging of the partnership.
Harvest Midstream's proposed notes issue will repay its Term Loan
A, which will then be terminated, and borrowings under the
partnership's revolving credit facility, while augmenting its
capital structure to support potential future growth opportunities.
At closing, debt/EBITDA will approximate 4.5x, adjusting for the
proportional consolidation of joint venture debt, however, with
modest projected growth in capital spending and distribution
payouts, Harvest Midstream should generate positive free cash flow
in amounts sufficient to de-lever its balance sheet to under its
targeted 3.5x debt/EBITDA in 2021.
The rapid spread of the coronavirus outbreak, deteriorating global
economic outlook, low oil and natural gas 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 implications for public health and safety. Harvest
Midstream's exposure to commodity price and volumetric risk leaves
it vulnerable to shifts in market demand and sentiment in these
unprecedented operating conditions.
The singular control Mr. Jeffery Hildebrand wields over the Hilcorp
enterprises, including Harvest Midstream, through his ownership of
Hildebrand Enterprises is also considered in the partnership's
credit profile. However, Harvest Midstream has prospered under
Hildebrand's control and leadership, limiting its use of excessive
debt financing. Environmental considerations have a growing impact
on Moody's credit analysis for midstream energy companies,
indirectly related to potential carbon dioxide regulations and
methane leakages. The risk of oil spills along TAPS and the
environmental fragility of the Alaskan tundra raise potential
social risks. A strong financial position and low financial
leverage are important characteristics for managing these
environmental and social risks.
Moody's regards Hilcorp Midstream as having good liquidity. In
addition to repaying and terminating its secured Term Loan A, net
proceeds from the proposed notes offering will also be used to
repay a portion of the debt outstanding under the partnership's
$600 million secured revolving credit facility ($457 million
outstanding at March 31). The revolver is scheduled to mature in
October 2023. Pro forma for the proposed notes issue, Harvest
Midstream will have about $600 million of available liquidity. Two
of Harvest Midstream's joint venture companies also have
outstanding revolving credit debt, which have recourse solely to
the respective joint ventures themselves, and are not guaranteed by
Harvest Midstream.
The proposed $600 million senior unsecured notes are rated B1,
one-notch below the Ba3 CFR in consideration of the priority claim
that the secured revolving credit has relative to the partnership's
assets.
The outlook is stable reflecting Harvest Midstream's expected
declining debt leverage, underpinned by the contractual source of
cash flow which helps insulate the partnership from the full brunt
of commodity price and volume risk.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Harvest Midstream could be upgraded to Ba2 should leverage drop
below 3.5x, should EBITDA exceed $500 million and presuming that
EBITDA is not exposed to additional commodity price or volume risk.
Harvest Midstream could be downgraded should leverage exceed 4.5x,
or should contract structure erode resulting in increased leverage.
Should HEI be downgraded below Ba3, Harvest Midstream would also be
downgraded.
The principal methodology used in these ratings was Midstream
Energy published in December 2018.
Harvest Midstream I, L.P.'s assets are operated by its general
partner, Harvest Midstream Company, headquartered in Houston,
Texas.
HARVEST MIDSTREAM: Fitch Assigns 'BB-' LT IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has assigned a Long-Term Issuer Default Rating of
'BB-' to Harvest Midstream I, LP and a 'BB-'/'RR4' to HMI's
proposed senior unsecured notes. The Rating Outlook is Stable.
Proceeds from the proposed $600 million senior unsecured notes will
be used to repay its Term Loan (due 2022) in full and partial
prepayment of borrowings under its revolving credit facility due
2023. Fitch has reviewed preliminary documentation for the notes
offering; the assigned ratings assume there will be no material
variation from the draft previously provided.
The ratings recommendation is reflective of the size of the
partnership, supported by moderate diversity of cash flows, by
region and asset type. By region, the performance of the
partnership will be driven by natural gas and crude oil production
growth of two basins, San Juan in Four Corners and Alaska, pending
acquisition of the BP midstream assets which is expected to close
in the 2H20. Fitch expects an increase in HMI's EBITDA upon closing
of the transaction between BP and HMI.
The ratings also reflect that HMI's primary gathering and
processing regions (San Juan and Alaska) are mature basins with
limited prospects of production growth. Against the challenges of
working in a mature basin, future growth of the partnership is
dependent on inorganic acquisitions of profitable assets, although
HMI has demonstrated historical success in acquiring and optimizing
mature assets acquired. The ratings also take into account the
commodity price risk that exists in the contract portfolio, which
is largely unhedged, and may represent a drag on the business in
unexpectedly and severe negatively affected downside cases.
The limited size and scale as well as the volumetric and commodity
price exposure is somewhat offset by Fitch's expectations that HMI
will manage leverage (Total Debt/Adjusted EBITDA) at conservative
levels (below 4.0x for Fitch's forecast period proforma for BP
Alaska transaction). YE 2020 leverage is expected to be elevated
between 4.5-4.8x, but is expected to improve in 2021 and maintain
relatively low levels in the outer years.
The ratings recognize the support from its producer affiliate,
Hilcorp, whereby HMI handles approximately 51% of Hilcorp's
production. With the impending acquisition of the BP midstream
assets in Alaska and growing cash flows expected through additional
projects, such as Ingleside Pipeline project and Midway Terminal,
the Outlook is considered Stable.
KEY RATING DRIVERS
Limited Size and Scale: The partnership is geographically
diversified, with a presence in five distinct areas spread across
the U.S., although much of the assets and operations concentration
is limited to the San Juan basin where it generated approximately
60%-65% of EBITDA for LTM as of March 31 2020. With the impending
acquisition of BP midstream assets in Alaska, expected to close in
late 2H20, this region is expected to be another important focus
area for HMI, especially following Hilcorp's acquisition of BP's
upstream assets. Fitch views this operational concentration and
limited size makes HMI vulnerable to the basin, should there be an
outsized event or pronounced slowdown in the region.
Volumetric Risk Prevails within Portfolio: HMI's operations are
primarily underpinned by fixed-fee contracts. For LTM 03/31/20,
approximately 87% of the net revenues were derived from contracts
that are fixed-fee, thereby reducing its direct commodity price
exposure, but it continues to be subject to volumetric risk. These
contracts are predominantly backed by acreage dedications with
minimal minimum volume commitments. If customer activity falls and
in turn volumes are pressured, HMI's throughput may be impacted, a
risk Fitch expects to remain in the near term.
Counterparty Exposure/ Concentration Risk: HMI has diverse customer
base of over 60 customers, deriving almost 87% of revenues from
fixed fee contracts that eliminate direct commodity exposure. HMI
is, however, exposed to counterparty risk as the majority of its
revenues are non-investment grade counterparties, which contributed
approximately 75%-80% of its LTM as of March 31, 2020 revenues.
Fitch views the high-yield exploration and production companies'
lack the size and geographic breadth and do not have the same
downside protection as their investment grade peers, and therefore
having exposure to greater risk amid volatile commodities price
environment. Offsetting some of this counterparty risk is that
HMI's broader risk remains aligned to that of Hilcorp, its largest
counterparty, which represented almost 40% of LTM as of March 2020
revenues. Fitch believes that having Hilcorp as its major customer
is generally positive to HMI's credit profile until it adds more
investment grade counterparties that make meaningful contribution
to overall EBITDA.
Modest Leverage Provides Flexibility: HMI has low leverage and good
interest coverage relative to midstream peers. Leverage is expected
to be elevated in the near term with moderating producer activity
in the backdrop of macro headwinds. Fitch expects YE 2020 leverage
in the range of 4.5x-4.8x before trending down sub 4x starting
2021, barring unforeseen events such as increases in spending or
acquisition. Fitch believes leverage is critical to HMI's credit
profile due to the company's concentrated customer exposure and
presence in mature conventional basins.
Supportive Affiliate in Near Term: Under common ownership, HMI
supports Hilcorp with midstream services, handling roughly 51% of
Hilcorp's production. As part of its strategy for greater
alignment, Hilcorp has recently transferred Harvest Alaska to HMI
in January 2020 at no cost. This further highlights Hilcorp's
commitment in supporting HMI's growth going forward as Hilcorp
continues to acquire assets. Given that Hilcorp directly benefits
from the sustainable growth of HMI, Fitch views that HMI will
continue to benefit from Hilcorp's support in the near- to
intermediate-term.
ESG Relevance Factors: HMI has an ESG Relevance Score of 4 for
Group Structure and Governance. This has a negative impact on the
credit profile and is relevant to the rating in conjunction with
other factors. Group structure considerations also have an elevated
scope for HMI given interfamily/related party transactions with
affiliate companies.
DERIVATION SUMMARY
HMI is a medium-sized gas focused midstream partnership. The
partnership may be distinguished from gathering and processing
companies with similar levels of indebtedness by HMI's presence in
several operating regions including the San Juan basin, the Alaskan
North Slope and Alaska Cook Inlet, the Eagle Ford & South Texas,
and the Gulf Coast of Louisiana. HMI benefits from the diversity
provided by its joint venture associations in the Texas, Louisiana
and Utica. Many other similar sized G&P companies are heavily
concentrated in only one producing basin.
Given HMI's regional diversity, commodity focus, and contract mix,
DCP Midstream Operating, LP (DCP; BB+/RWN) is the closest
comparable for HMI. DCP is bigger in size based on pro forma
EBITDA. EBITDA is expected to be over $1 billion with footprint
across some of the key gas producing regions like the DJ, Permian,
Midcontinent and Eagle Ford basins. DCP's 2020 and 2021 leverage is
expected to trend above 5.0x. Fitch expects HMI's YE 2020 leverage
in the range of 4.5-4.8x, progressively reducing throughout the
rating horizon, when it is expected to be sub 4.0x. However,
leverage metrics are not the primary driver of rating differences
between the two issuers since DCP's rating is also influenced by
its size and scale.
Blue Racer Midstream LLC (IDR: BB-/ Negative) is similar in size to
HMI in terms of revenue and EBITDA, post-acquisition, under fixed
fee, MVC contracts, high but declining leverage, and benefits from
the strategic location of its midstream assets within the
Appalachian basin. While leverage metrics of Blue Racer for YE 2020
is almost at same levels as HMI, Blue Racer is limited by its
single-basin focus, counterparty risks and limited diversity of
operations. Fitch expects leverage for Blue Racer to range between
4.5x-5.1x over forecast horizon. HMI, is assigned same rating a
Blue Racer as some of the benefits of being based in the prolific
Appalachian is offset by lack of basin diversity. HMI, on the other
hand, benefits from basin diversity but in mature plays.
KEY ASSUMPTIONS
-- Henry Hub natural gas prices of $1.85/thousand cubic feet
(mcf) in 2020 and $2.45/ mcf in the years thereafter;
-- WTI oil price of $32/barrels (bbl) in 2020, $42/bbl in 2021,
$50/bbl in 2022, and $52/bbl in 2023 and the long term;
-- Acquisition of BP Alaska complete by end 2020;
-- No further acquisition during forecast period;
-- Senior Unsecured note issuance proceeds are used to prepay the
term loan in full and partial repayment of borrowings under the
revolver.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
-- Increase in scale and/ or improvement to counterparty credit
profile, with leverage (total debt/ adjusted EBITDA) expected to be
maintained below 4.0x on a sustained basis;
-- Material change to earnings stability profile in terms of
greater proportion of EBITDA derived from high growth basins or
decreased volumetric exposure.
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
-- Material change to contractual arrangement and operating
practices that negatively impacts HMI's cash flow or earnings
profile;
-- Increases in capital spending beyond Fitch's expectation that
have negative consequences for credit profile (e.g. if not funded
with a balance of debt and equity);
-- Leverage (Total debt-to-adjusted EBITDA) above 5.0X on a
sustained basis;
-- While currently not anticipated by Fitch, the transaction
related to acquisition of BP Alaska midstream assets does not
close;
-- Meaningful deterioration in customer credit quality or an
event that has a material negative effect on Hilcorp's credit
profile or operations, so long as Hilcorp remains a significant
counterparty.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Fitch considers HMI's liquidity to be adequate in the near term.
The bank agreement for the revolver has financial covenants:
maximum total net leverage ratio, currently at 4.75x which steps up
to 5.25x after a qualified notes issuance; and a minimum interest
coverage ratio of 3.0x. As of March 31, 2020, HMI was in compliance
with its covenants, and Fitch expects HMI to maintain compliance
with its covenants in the near to intermediate term.
The term loan matures in October 2022 and the revolver in October
2023.
ESG CONSIDERATIONS:
HMI has an ESG Relevance Score of 4 for Group Structure and
Governance. This has a negative impact on the credit profile and is
relevant to the rating in conjunction with other factors. Group
structure considerations also have an elevated scope for HMI given
inter-family/related party transactions with affiliate companies.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3. ESG issues are credit neutral
or have only a minimal credit impact on the entity, either due to
their nature or the way in which they are being managed by the
entity.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has made no material adjustments that are not disclosed in
the partnership's filings.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
HIGH SIERRA THEATRES: Seeks to Hire Joseph Kirk Costich as Realtor
------------------------------------------------------------------
High Sierra Theatres, LLC, seeks approval from the US Bankruptcy
Court for the District of New Mexico to hire Joseph Kirk Costich,
Inc., as its realtor.
The Debtor owns real estate in Arizona which it would like to sell
in order to pay creditors in full.
Joseph Kirk will receive a 5 percent commission on the gross sales
price.
The firm does not represent any interest adverse to the Debtor and
its bankruptcy estate, according to court filings.
The firm can be reached through:
Joseph Kirk Costich
Joseph Kirk Costich, Inc.
4200 N Fernhill Cir,
Tucson, AZ 85750
Phone (520) 290-9522
About High Sierra Theatres
Founded in 2012, High Sierra Theatres is an
owner/operator/management company that was formed by Thomas Becker
and Nick Sanchez. Both partners have extensive experience in the
motion picture exhibition industry, having over 65 years combined
experience.
High Sierra Theatres filed a voluntary Chapter 11 petition (Bankr.
D. N.M. Case No. 19-12680) on Nov. 22, 2019. The petition was
signed by Thomas Becker, managing member. At the time of filing,
the Debtor estimates $1,312,000 in assets and $1,766,017
inliabilities. Michael K. Daniels, Esq. represents the Debtor as
counsel.
JOSEPH LOUIS MELZ: $6.2M Sale of Franklin Property to Trust Okayed
------------------------------------------------------------------
Judge Marian F. Harrison of the U.S. Bankruptcy Court for the
Middle District of Tennessee authorized Joseph Louis Melz's sale of
the real property described as 1025 Carlisle Lane, Franklin,
Williamson County, Tennessee, map and parcel number 064 019 07 000,
consisting of approximately 24.94 acres and existing improvements
and additional structures located on the Property, for $6.2 million
to Kenny and Hannah Trust in accordance with the terms of the
Purchase and Sale Agreement.
A hearing on the Motion was held on July 28, 2020.
From the sale proceeds, the Debtor will pay the costs of the sale,
real estate commissions (5% total split between the Buyer's and the
Seller's realtors), and taxes. In addition, the Debtor will pay
all creditors in full that have an undisputed interest in the
property by virtue of a recorded lien on the property, in order of
priority, as of the date of closing. The recorded lien of Sandra
Melz for domestic support obligations incurred pre-petition will be
paid in full, in order of priority. The disposition of the claim
of Sandra Melz for domestic support obligations incurred
post-petition is reserved pending further order of the Court. The
Debtor will be entitled to an exemption of $25,000.
Further, the Debtor will hold the remaining proceeds from the sale
in escrow pending further orders from the Court.
The sale of the Property is free and clear of any interest. All
liens against the Property will attach to the proceeds of the sale.
The stay of the Order approving the sale of the Property will be
waived under Fed.R.Civ.P. 6004(h).
Joseph Louis Melz sought Chapter 11 protection (Bankr. M.D. Tenn.
Case No. 19-04811) on July 29, 2019. The Debtor tapped Thomas
Larry Edmondson, Sr., Esq., at T. Larry Edmondson Attorney at Law.
KENDALL FROZEN: Trustee to Seek Plan Approval Sept. 3
------------------------------------------------------
On June 25, 2020, the U.S. Bankruptcy Court for the Central
District of California, Santa Ana Division, held a hearing to
consider adequacy of Chapter 11 Trustee, Howard B. Grobstein's
Disclosure Statement describing its proposed Chapter 11 Plan of
Reorganization for debtor Kendall Frozen Fruits, Inc.
On June 26, 2020, Judge Scott C. Clarkson approved the Disclosure
Statement and ordered that:
* The Trustee is authorized to solicit votes with respect to the
Plan.
* Aug. 6, 2020, at 5:00 p.m. is the deadline for creditors to
return to Trustee’s counsel, Ballots containing written
acceptances or rejections of the Plan.
* Sept. 3, 2020, at 11:00 a.m., Courtoom 5C is the hearing on
the confirmation of the Plan.
* Aug. 6, 2020, at 5:00 p.m. is the deadline to file objections
to the Plan.
* Aug. 20, 2020, is the deadline for the Trustee to file with
the Bankruptcy Court, and serve on any parties objecting to the
plan, a brief in support of confirmation of the Plan.
A copy of the order dated June 26, 2020, is available at
https://tinyurl.com/yb5e984d from PacerMonitor at no charge.
Attorneys for Chapter 11 Trustee:
MATTHEW W. GRIMHSAW
DAVID A. WOOD
MARSHACK HAYS LLP
870 Roosevelt
Irvine, California 92620
Telephone: (949) 333-7777
Facsimile: (949) 333-7778
E-mail: mgrimshaw@marshackhays.com
E-mail: dwood@marshackhays.com
About Kendall Frozen Fruits
Newport Beach, California-based Kendall Frozen Fruits, Inc. --
https://www.kendallfruit.com/ -- is an industrial food supplier
specializing in the sale and marketing of fruit and vegetable
products since 1939. It offers frozen fruits, dried fruits, juice
concentrates, purees, freeze dried fruit, fruit powders, vegetable
products, chocolate covered dried fruit, and yogurt covered dried
fruit.
Kendall Frozen Fruits sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-14052) on Nov. 5,
2018. At the time of the filing, the Debtor was estimated to have
assets of $1 million to $10 million and liabilities of the same
range. Judge Scott C. Clarkson oversees the case. SulmeyerKupetz,
A Professional Corporation, is the Debtor's counsel.
Howard Grobstein was appointed as the Debtor's Chapter 11 trustee
on Feb. 14, 2019. The Trustee hired Marshack Hays LLP as his legal
counsel.
KIMBLE DEVELOPMENT: Aug. 5 Plan Confirmation Hearing Set
--------------------------------------------------------
On June 22, 2020, Kimble Development of Jackson, L.L.C. filed with
the U.S. Bankruptcy Court for the Middle District of Louisiana a
First Amended Disclosure Statement.
On June 25, 2020, Judge Douglas D. Dodd approved the First Amended
Disclosure Statement and established the following dates and
deadlines:
* Aug. 5, 2020 at 2:00 p.m. is the hearing on confirmation of
the Debtor's First Amended Chapter 11 Plan.
* July 29, 2020 at 5:00 p.m. is the deadline to file all Ballots
accepting or rejecting the Amended Plan, objections to the Amended
Plan and supporting memoranda.
* Aug. 4, 2020 at 12:00 noon, is the deadline for the Debtor to
file a summary of ballots indicating the number of ballots cast and
percentage of ballots in favor of the Plan.
A copy of the order dated June 25, 2020, is available at
https://tinyurl.com/yddubesj from PacerMonitor.com at no charge.
About Kimble Development of Jackson
Kimble Development of Jackson, L.L.C., is primarily engaged in
renting and leasing real estate properties.
Kimble Development of Jackson, based in Baton Rouge, LA, filed a
Chapter 11 petition (Bankr. M.D. La. Case No. 20-10008) on Jan. 8,
2020. In the petition signed by Michael D. Kimble, manager, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities. Ryan J. Richmond, Esq., at Richmond Law
Firm, LLC, serves as bankruptcy counsel to the Debtor.
KLAUSNER LUMBER: Aug. 21 Auction of Substantially All Assets Set
----------------------------------------------------------------
Judge Karen B. Owens of the U.S. Bankruptcy Court for the District
of Delaware has entered a third order amending certain deadlines
set forth in the approved bidding procedures, and assumption and
assignment procedures, in connection with Klausner Lumber One,
LLC's auction sale of substantially all assets.
Those portions of the Bidding Procedures Order and Related Bidding
Procedures and Assumption and Assignment Procedures establishing
various deadlines with respect to the sale process are amended as
follows:
a. 7/28/20 -- 8/5/20 - Stalking Horse Bid Deadline
b. 7/29/20 -- 8/6/20 - Stalking Horse Notice
Deadline/Assumption Notice Deadline
c. 7/30/20 -- 8/6/20 - Deadline for filings schedules to the
APA (i.e., 14 days prior to Sale Objection Deadline)
d. 7/30/20 -- 8/7/20 - Deadline to serve Adequate Assurance
Information for Stalking Horse Purchaser (i.e., within 2 business
days of Stalking Horse Designation Deadline)
e. 8/05/20 -- 8/13/20 - Deadline to object to Stalking Horse
Notice (7 calendar days after Notice)
f. 8/10/20 -- 8/17/20 - Bid Deadline
g. 8/11/20 -- 8/18/20 - Adequate Assurance Information to be
provided to parties whose Assumed Contracts are included in the APA
(non-Stalking Horse Bidder)
h. 8/12/20 -- 8/19/20 - Deadline to designate Qualifying Bids
and Baseline Bid
i. 8/13/20 at 4:00 p.m. -- 8/20/20 – 4:00 p.m. - Contract
Objection Deadline
j. 8/13/20 at 4:00 p.m. -- 8/20/20 – 4:00 p.m. - Sale
Objection Deadline
k. 8/14/20 at 10:00 a.m. -- 8/21/20 – 10:00 a.m. - Auction
l. Earlier of 5 business hours after close of Auction or noon
the day after the Auction -- Earlier of 5 business hours after
close of Auction or noon the day after the Auction - Notice of
Successful Bidder
m. 7/28/20 at 12:00 p.m. -- 8/18/20 at 12:00 p.m. - File
Agenda for Sale Hearing
n. Earlier of 5 business hours after close of Auction or noon
the day after the Auction -- earlier of 5 business hours after
close of Auction or noon the day after the Auction - Notice of
Successful Bidder
o. 8/18/20 at 12:00 p.m. -- 8/27/20 at 12:00 p.m. - File
Agenda for Sale Hearing
p. 8/18/20 at 4:00 p.m. -- 8/27/20 at 4:00 p.m. - Deadline for
Adequate Assurance Objections if successful bidder is not Stalking
Horse Bidder
q. 8/19/20 at 12:00 p.m. -- 8/28/20 at 12:00 p.m. - Reply due
r. 8/20/20 at 3:00 p.m. -- 8/31/20 at 10:00 a.m. - Sale
Hearing
s. 8/27/20 -- 9/2/20 - Outside date for Closing of Sale
All other terms and provisions of the Bidding Procedures Order,
Bidding Procedures and Assumption and Assignment Procedures will
remain in full force and effect except as expressly modified.
The Third Order Amending Deadlines will be effective immediately
upon entry, and any stay of orders provided for in Bankruptcy Rules
6004(h) or 6006(d) or any other provision of the Bankruptcy Code,
the Bankruptcy Rules or the Local Rules is expressly waived. The
Debtor is not subject to any stay in the implementation,
enforcement or realization of the relief granted in the Order, and
may, in its sole discretion and without further delay, take any
action and perform any act authorized or approved under the Order.
The requirements set forth in Local Rules 6004-1, 9006-1 and 9013-1
are satisfied or waived.
A copy of the Third Order Amending Deadlines will be served on the
Sale Notice Parties identified in the Bidding Procedures Order.
A copy of the Bidding Procedures is available at
https://tinyurl.com/yayftv9y from PacerMonitor.com free of charge.
About Klausner Lumber One
Klausner Lumber One, LLC is a privately held company in the lumber
and plywood products manufacturing industry. It is 100% owned by
non-debtor Klausner Holding USA, Inc.
Klausner Lumber One sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 20-11033) on April 30,
2020. At the time of the filing, Debtor disclosed assets of
between $100 million and $500 million and liabilities of the same
range.
The Debtor tapped Westerman Ball Ederer Miller Zucker & Sharfstein,
LLP as bankruptcy counsel; Morris, Nichols, Arsht & Tunnell, LLP as
local counsel; Asgaard Capital, LLC as restructuring advisor; and
Cypress Holdings, LLC as investment banker.
LAKELAND TOURS: Togut, Segal Represents Seller Noteholder Group
---------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Togut, Segal & Segal LLP submitted a verified
statement that it is representing the Ad Hoc Group of Seller Notes
in the Chapter 11 cases of Lakeland Tours, LLC, et al.
In July 2020, the Ad Hoc Group of Seller Notes retained Togut,
Segal & Segal LLP to represent them as holders of the Seller
Notes.
As of Aug. 3, 2020, members of the Ad Hoc Group of Seller Notes and
their disclosable economic interests are:
Seller Notes
------------
Globetrotter Co-Investment B LP $99,411,064.13
c/o Metalmark Capital Holdings LLC
1177 Avenue of the Americas 40th Floor
New York, NY 10036
James Hall $2,861,043.79
c/o Togut, Segal & Segal LLP
Attn: Kyle Ortiz
One Penn Plaza, Suite 3335
New York, NY 10119
Adam Hall $1,249,551.25
James Hall
c/o Togut, Segal & Segal LLP
Attn: Kyle Ortiz
One Penn Plaza, Suite 3335
New York, NY 10119
Each member of the Ad Hoc Group of Seller Notes requested that TS&S
represent it in connection with the Debtors' chapter 11 cases.
TS&S represents only the holders of Seller Notes listed on Exhibit
A hereto and does not represent or purport to represent any other
entities or interests in connection with the Debtors' chapter 11
cases. In addition, the Ad Hoc Group of Seller Notes does not
represent or purport to represent any other entities or interests
in connection with the Debtors' chapter 11 cases.
Nothing in this Statement shall be construed as (i) a limitation
upon, or waiver of, each member of the Ad Hoc Group of Seller Notes
right to assert, file, or amend its or their claims in accordance
with applicable law and any orders entered in the Debtors' chapter
11 cases, or (ii) an admission with respect to any fact or legal
theory.
TS&S reserves the right to supplement or amend this Statement at
any time for any reason.
Counsel to the Ad Hoc Group of Seller Notes can be reached at:
TOGUT, SEGAL & SEGAL LLP
Kyle J. Ortiz, Esq.
Brian F. Moore, Esq.
Jared C. Borriello, Esq.
One Penn Plaza, Suite 3335
New York, NY 10119
Tel: (212) 594-5000
Fax: (212) 967-4258
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/xUdnv3
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 were estimated to have
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.
LAKEWAY PUBLISHERS: Plan of Reorganization Confirmed by Judge
-------------------------------------------------------------
Judge Marcia Phillips Parsons has entered an order confirming the
Second Amended Plan of Reorganization of Lakeway Publishers, Inc.
The summary of ballots showed that two impaired creditors in Class
4 voted against the plan. Impaired classes 3 voted in favor of the
plan.
The court determined that the plan was fair and equitable and does
not discriminate unfairly with respect to the creditors. The
objection of Page Co-Operative was withdrawn following the
confirmation hearing.
A full-text copy of the Plan Confirmation Order dated June 25,
2020, is available at https://tinyurl.com/y7vwzh3k from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Ryan E. Jarrard, Esq.
QUIST, FITZPATRICK & JARRARD, PLLC
2121 First Tennessee Plaza
Knoxville, TN 37929-9711
Tel: (865) 524-1873
E-mail: rej@QCFlaw.com
About Lakeway Publishers
Lakeway Publishers, Inc., is a multi-state publisher of newspapers,
magazines and special publications. Lakeway owns and operates
community newspapers and magazines in Tennessee, Missouri,
Virginia, and Florida. Lakeway Publishers was incorporated in 1966
and is based in Morristown, Tenn.
Lakeway Publishers, Inc., and affiliate Lakeway Publishers of
Missouri, Inc. each filed a voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. E.D. Tenn. Lead Case No. 19-51163) on
May 31, 2019. In the petitions signed by Jack R. Fishman,
president, Lakeway Publishers, Inc., disclosed $20,884,027 in
assets and $9,245,645 in liabilities while Lakeway Publishers of
Missouri listed $7,047,972 in assets and $9,206,193 in
liabilities.
The Debtors tapped Quist, Fitzpatrick & Jarrard, PLLC, led by Ryan
E. Jarrard, as bankruptcy counsel; and Burnette Dobson & Pinchak,
as special counsel.
LATAM AIRLINES: Committee Hires Dechert LLP as Lead Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of LATAM Airlines
Group S.A. and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to retain
Dechert LLP as its lead counsel.
The Committee requires Dechert LLP to:
a) participate in in-person and telephonic meetings of the
Committee and subcommittees formed thereby, and otherwise advise
the Committee with respect to its rights, powers and duties in
these Chapter 11 Cases;
b) assist and advise the Committee in its meetings and
negotiations with the Debtors and other parties in interest
regarding the administration of these Chapter 11 Cases;
c) assist the Committee in analyzing claims asserted against,
and interests in, the Debtors, and in negotiating with the holders
of such claims and interests and bringing, or participating in,
objections or estimation proceedings with respect to such claims
and interests;
d) assist with the Committee's review of the Debtors'
Schedules of Assets and Liabilities, Statement of Financial Affairs
and other financial reports prepared by the Debtors, and the
Committee's investigation of the acts, conduct, assets, liabilities
and financial condition of the Debtors and their insiders and of
the historic and ongoing operation of their businesses;
e) assist the Committee in its analysis of, and negotiations
with the Debtors or any third party related to, financing, asset
disposition transactions, compromises of controversies, assumption
and rejection of executory contracts and unexpired leases;
f) assist the Committee in its analysis of, and negotiations
with the Debtors or any third party related to, the formulation,
confirmation and implementation of a chapter 11 plan(s) and all
documentation related thereto;
g) assist and advise the Committee with respect to its
communications with the general creditor body regarding significant
matters in these cases;
h) respond to inquiries from individual creditors as to the
status of, and developments in, these Chapter 11 Cases;
i) represent the Committee at hearings and other proceedings
before the Court and such other courts or tribunals, as
appropriate;
j) review and analyze complaints, motions, applications,
orders and other pleadings filed with the Court, and advise the
Committee with respect to its positions thereon and the filing of
any responses thereto;
k) assist the Committee in its review and analysis of, and
negotiations with the Debtors and non-Debtor affiliates related to,
intercompany transactions and claims;
l) review and analyze third party analyses or reports prepared
in connection with potential claims of the Debtors, advise the
Committee with respect to its positions thereon, and perform such
other diligence and independent analysis as may be requested by the
Committee;
m) assist the Committee in preparing pleadings and
applications, and pursuing or participating in adversary
proceedings, contested matters and administrative proceedings as
may be necessary or appropriate in furtherance of the Committee's
duties, interests, and objectives;
n) assist and advise the Committee with respect to applicable
foreign proceedings that may arise in the course of these Chapter
11 Cases; and
o) perform such other legal services as may be necessary or as
may be requested by the Committee in accordance with the
Committee's powers and duties as set forth in the Bankruptcy Code.
The 2020 hourly rates charged by Dechert are:
Partners $960 - $ 1,650
Counsel $700 - $1,550
Associates $595 - $960
Paraprofessionals $150 - $430
Craig P. Druehl, partner of the law firm Dechert LLP, attests that
the firm is a "disinterested person" as that term is defined in
Bankruptcy Code section 101(14), and neither represents nor holds
an interest adverse to the interests of the Committee, the Debtors,
or their estates with respect to the matters on which it is to be
employed.
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, Mr.
Druehl disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firm has not represented the Committee in the 12 months
prepetition; and
-- Dechert expects to work with the Committee to develop a
prospective budget and staffing plan.
The counsel can be reached through:
Allan S. Brilliant, Esq.
Craig P. Druehl, Esq.
David A. Herman, Esq.
DECHERT LLP
1095 Avenue of the Americas
New York, NY 10036
Phone: (212) 698-3500
Fax: (212) 698-3599
Email: allan.brilliant@dechert.com
craig.druehl@dechert.com
david.herman@dechert.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.
LATAM AIRLINES: Committee Hires Morales & Besa as Legal Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of LATAM Airlines
Group S.A. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to retain
Morales & Besa LTDA.
The Committee requires Morales & Besa to:
(a) provide advice on matters related to the Chilean and
cross-border insolvency law, including reviewing its effects and
risks;
(b) advise on the corporate implications and implementation of
the Chapter 11 Plan in Chile;
(c) monitor the judicial proceeding that led to the
recognition of the Chapter 11 Cases before the Chilean court,
reporting the relevant changes, filings and decisions to Dechert;
(d) participate in the negotiation meetings with Chilean
creditors that are part of the Chapter 11 Cases, if needed,
including the negotiation of the terms of the Chapter 11 Plan,
until its final approval under the Chapter 11 Cases;
(e) coordinate with counsel representing the Debtors and
interested parties in Chile in connection with all matters
involving Chilean creditors that may be affected by the Chapter 11
Cases;
(f) review and provide advice on any issue regarding the
recognition and enforcement of the Chapter 11 Cases in Chile,
including, but not limited to, any motion, proposal, finance,
agreement, etc., executed or proposed during the Chapter 11 Cases;
(g) advise on the proposed Chapter 11 Plan to be submitted by
the Debtors under the Chapter 11 Cases and its impact on, and
requirements set by, Chilean law, including matters related with
Chilean public policy;
(h) review and provide advice on general commercial and legal
information requested by the Committee.
Morales & Besa's hourly rates are:
Partners $350
Special External Expert $350
Directors $300
Senior Associates $240
Mid-level Associates $190
Junior Associates $160
Alvaro Barriga, a partner with Morales & Besa, attests that the
firm is a "disinterested person" as that term is defined in
Bankruptcy Code section 101(14), and neither represents nor holds
an interest adverse to the interests of the Committee, the Debtors,
or their estates with respect to the matters on which Morales &
Besa is to be employed.
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, Mr.
Barriga disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firm has not represented the Committee in the 12 months
prepetition; and
-- The Committee has approved Morales & Besa's proposed hourly
billing rates.
The firm can be reached through:
Alvaro Barriga
MORALES & BESA LTDA.
Av. Isidora Goyenechea 3477, piso 19
Las Condes, Santiago 7550106 Chile
Phone: +56 2 2472 7003; +56 9 9079 2285
Email: abarriga@moralesybesa.cl
www.moralesybesa.cl
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.
LE TOTE: Case Summary & 30 Largest Unsecured Creditors
------------------------------------------------------
Lead Debtor: Le Tote, Inc.
250 Vesey Street, 22nd Floor
New York, New York 10281
Five affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Le Tote, Inc. (Lead Debtor) 20-33332
LT Card Company LLC 20-33328
French Tote LLC 20-33329
Le Tote, LLC 20-33330
Lord & Taylor LLC 20-33331
Business Description: The Debtors are the combination of Le
Tote -- a venture-backed fashion rental
subscription service founded in 2012 in
San Francisco -- and Lord & Taylor --
a luxury retailer which traces its
origins to 1826 in New York. Le Tote
purchased Lord & Taylor in a
transaction which closed in November
2019. The Debtors operate both an
online, subscription-based clothing
rental service and a full-service
fashion retailer with 38 brick-and-
mortar locations and a robust e-commerce
platform. In response to the COVID-19
pandemic the Debtors temporarily closed
all retail locations in March 2020,
although they continue to operate the Le
Tote and Lord & Taylor websites.
Chapter 11 Petition Date: August 2, 2020
Court: United States Bankruptcy Court
Eastern District of Virginia
Judge: Hon. Keith L. Phillips
Debtors' Counsel: Steven N. Serajeddini, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: steven.serajeddini@kirkland.com
- and -
David L. Eaton, Esq.
Jaimie Fedell, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North La Salle Street
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: david.eaton@kirkland.com
jaimie.fedell@kirkland.com
Debtors'
Local Counsel: Michael A. Condyles, Esq.
Peter J. Barrett, Esq.
Jeremy S. Williams, Esq.
Brian H. Richardson, Esq.
KUTAK ROCK LLP
901 East Byrd Street, Suite 1000
Richmond, Virginia 23219-4071
Tel: (804) 644-1700
Fax: (804) 783-6192
Email: Michael.Condyles@KutakRock.com
Peter.Barrett@KutakRock.com
Jeremy.Williams@KutakRock.com
Brian.Richardson@KutakRock.com
Debtors'
Financial
Advisor: BERKELEY RESEARCH, LLC
Debtors'
Investment
Banker: NFLUENCE PARTNERS
Debtors'
Notice,
Claims, and
Balloting Agent
and Administrative
Advisor: BANKRUPTCY MANAGEMENT SOLUTIONS, INC.
d/b/a STRETTO
https://cases.stretto.com/letote/
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 Ed Kremer, chief restructuring
officer.
A copy of Le Tote, Inc.'s petition is available at for free at
PacerMonitor.com at:
https://is.gd/a1S3Qj
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Liquidity Capital II L.P. Bank Debt $8,518,021
30 Sheshet Hayamin St.
Bnei Brak, Israel
5120261
Udi Gvirts
Tel: 972-54-675-7723
Email: udi@liquidity-capital.com
2. G III Leather Fashions Inc. Trade Payable $4,706,069
512 Seventh Avenue
New York, NY 10018
Michelle Thiel
Tel: 732-230-4847
Email: michelle.thiel@g-iii.com
3. Polo Ralph Lauren Clothing Trade Payable $3,533,551
P.O. Box 4732
Church Street Station
New York, NY 10249
Edwin Breig
Tel: (888) 674-8528 x5784
Email: ebreig@ralphlauren-ar.com
4. Michael Kors LLC Trade Payable $2,119,299
11 W 42nd Street
New York, NY 10036
Mandy Yee
Tel: 201-453-5058
Email: mandy.yee@michaelkors.com
5. Criteo Corp Trade Payable $1,323,415
100 Avenue of the Americas
5th Floor
New York, NY 10013
Ryan Damon
Tel: 1-646-410-0400
Email: contact@criteo.com
6. L'Oreal Lancome Trade Payable $1,167,411
P.O. Box 751027
Charlotte, NC 28275
Bruno Alyssa
Tel: 732-951-4416
Email: alyssa.bruno@loreal.com
7. 360I LLC Trade Payable $1,146,632
JP Morgan Chase-
Lockbox
4 Chase Metrotech 7th Flr E
Brooklyn, NY 11245
Karla Figueroa
Tel: +1 (212) 655 9895 x4
Email: kyfigueroa@sbgtv.com
8. Facebook, Inc. Trade Payable $1,047,293
15161 Collections Center Drive
Chicago, IL 60693
Maria Gonzales
Tel: (512) 516-6101
Email: mtgonzales@fb.com
9. XCEL-CT Mfg LLC Trade Payable $1,043,099
1333 Broadway
10th Floor
New York, NY 10018
Karen Siew
Tel: 347-729-7801
Email: KSiew@xcelbrands.com
10. Xscape Evenings Ltd Trade Payable $1,040,607
1412 Broadway
Suite 1406
New York, NY 10018
Vittoria Peralta
Tel: 212-302-3750
Email: vittoriaperalta@bbxco.com
11. Ralph Lauren Trade Payable $960,492
Chindrenwear
P.O. Box 1742
Cumberland, MD 21502
Ariel Shiffer
Tel: 1-888-674-8528
Email: ashiffer@ralphlauren-ar.com
12. Alvarez & Marsal Professional $828,744
Private Equity Services
Performance Improvement
Group, LLC
600 Madison Avenue
8th Floor
New York, NY 10022
Scott Coleman
Tel: (212) 759-4433
Email: scoleman@alvarezandmarsal.com
13. Caleres, Inc. Trade Payable $772,520
51 Wakefield Street
Rochester, NH 03867
Kate Tidyman
Tel: 314-854-2681
Email: ktidyman@caleres.com
14. Chanel Inc. Trade Payable $745,277
876 Centennial Avenue
Piscataway, NJ 08855
Luz Parra
Tel: +1 732 980 3866
Email: luz.parra@chanel.com
15. Supreme International Corp. Trade Payable $688,726
1411 Broadway
2nd Floor
New York, NY 10018
Henry Betsy
Tel: +1 (305) 873-1017
Email: betsy.henry@pery.com
16. Performance Team LLC Trade Payable $590,190
2240 E Maple Ave
El Segundo, CA 90245
Nicole Kirk
Tel: (424) 358-6940
Email: nicole.kirk@performanceteam.net
17. Urban Outfitters Trade Payable $566,111
WHSL Inc.
209 W 38th Street
7th Floor
New York, NY 10018
Kevin Redmond
Tel: 215-454-3850
Email: kredmond1@urbn.com
18. Betsy N Adam Trade Payable $563,431
525 Fashion Ave.
21st Floor
New York, NY 10018
Vittoria Peralta
Tel: 212-302-3750
Email: vittoriaperalta@bbxco.com
19. Steven Madden Ltd. Trade Payable $557,199
52-16 Barnett Avenue
Long Island City, NY
11104
Sunita Melaram
Tel: 718-308-2448
Email: sunitamelaram@stevemadden.com
20. Alex Apparel Group, Inc. Trade Payable $553,657
1400 Broadway
10th Floor
New York, NY 10018
Celia Bonifaz
Tel: 212-549-8515
Email: celia@alexevenings.com
21. Lucky Brand Bathing Suits Trade Payable $499,406
214 West 39th St.
RM 702
New York, NY 10018
Alicia Maes
Tel: 714.490.1313 ext#244
Email: aliciam@lunadabay.net
22. Tech Mahindra Limited Trade Payable $495,381
4965 Preston Park
Blvd S-500
Plano, TX 75093
Vineet Vij
Tel: 214-974-9907
Email: connect@techmahindra.com
23. Designer Fragrance Trade Payable $489,523
77 Deans Rhode Hall Road
Monmouth, NJ 08852
Bruno Alyssa
Tel: 732-951-4416
Email: alyssa.bruno@loreal.com
24. NIC + ZOE Trade Payable $451,372
323 Speen Street
Natick, MA 01760
Andrea Ofgant
Tel: 508-545-8534
Email: aofgant@nicandzoe.com
25. Christian Dior Trade Payable $425,008
Intimates
371 Hoes Lane
Piscataway, NJ 08854
Jo Ann Garland
Tel: 732-346-6887
Email: joann.garland@lvmhuspc.com
26. Flik International Corp. Trade Payable $423,976
P.O. Box 417632
Boston, MA 02241-7632
Evan Laspina
Tel: 516.236.1932
Email: Evan.Laspina@compass-usa.com
27. Tommy Bahama Trade Payable $408,779
1071 kAve of the America's
New York, NY 10018
Priscilla Bryant
Tel: 404-454-4688
Email: pbryant@oxfordinc.com
28. Kiehl's Since 1851 Trade Payable $391,861
P.O. Box 751535
Charlotte, NC 28275
Nayaz Amina
Tel: 732-951-4416
Email: amina.nayaz@loreal.com
29. Peerless Clothing Int. Trade Payable $385,455
1290 Sixth Avenue
New York, NY 10104
Daniela Cascino
Tel: 514-593-9300 ext. 1442
Email: danielac@peerless-clothing.com
30. Estee Lauder Inc. Trade Payable $374,077
P.O. Box 65509
Charlotte, NC 28202-0000
Heather Raimondi
Tel: 631-847-8468
Email: hraimond@estee.com
LIDDLE & ROBINSON: CFH Bid to Appeal Interim Fee Order Junked
-------------------------------------------------------------
District Judge Edgardo Ramos of the U.S. District Court for the
Southern District of New York denied the request of Counsel
Financial II LLC, LIG Capital LLC, and Counsel Financial Holdings
LLC to take an appeal from an interlocutory order issued by the
Bankruptcy Court for the Southern District of New York in the
bankruptcy case of Liddle & Robinson, L.L.P.
Counsel Financial seeks to appeal the Bankruptcy Court's
authorization of certain interim payments to professional firms
hired by Liddle & Robinson, including the law firm Foley Hoag LLP.
Counsel Financial believes these fees were paid in error because
there was no determination that they were incurred for Counsel
Financial's benefit. Counsel Financial also moves to strike the
response to Counsel Financial's motion for permission to appeal
filed by Foley Hoag purportedly on behalf of L&R. Foley Hoag
previously represented L&R before the Bankruptcy Court.
Counsel Financial is a secured creditor of L&R. On Dec. 19, 2019,
Bankruptcy Judge Sean H. Lane ordered the appointment of a Chapter
11 Trustee for L&R, a position to which Jonathan L. Flaxer was
named on Jan. 6, 2020. Prior to the appointment of the Trustee, L&R
retained Foley Hoag as its attorneys, EisnerAmper LLP as its
accountants, and The Benefit Practice as its benefits consultant.
On Sept. 4, 2019, the Bankruptcy Court entered an Order
Establishing Procedures for Interim Compensation and Reimbursement
of Expenses of Professionals. The Interim Fee Procedures Order
provides for interim payments following the filing by professionals
of "Monthly Statements," as well as for periodic review of
compensation every four months through "Interim Fee Applications."
The first Interim Fee Applications period ended on Nov. 30, 2019.
According to the Interim Fee Procedures Order, a professional may
file a Monthly Statement on or before the 20th day of the month
following the month for which compensation is sought. Other parties
may object to the Monthly Statements within a specified period. If
no objection is filed, L&R is required to pay 80% of the fees
requested in the Monthly Statement, and 100% of the expenses. If an
objection is filed, L&R is required to withhold payment of that
portion of the Monthly Statement to which an objection is directed,
unless the Court, upon notice and a hearing, orders otherwise. All
objections that are not resolved by the parties are preserved and
presented to the Court at hearings on interim or final fee
applications.
The Professionals each filed a number of Monthly Statements,
requesting reimbursement for, among numerous other things, updating
cash flow budgets and legal research regarding Chapter 11
eligibility. Counsel Financial filed blanket objections, arguing
that fees could only be paid to the extent the services being
charged directly benefited Counsel Financial and, in Counsel
Financial's view, none of the services provided had benefited them.
The Professionals also filed their first Interim Fee Applications
on December 5, 2019, to which Counsel Financial also objected.
The Bankruptcy Court held an omnibus hearing on a number of issues
in the L&R bankruptcy matter on Dec. 19, 2019. The Court addressed
a motion to convert the matter into a Chapter 7 case from a Chapter
11, various discovery disputes, and a motion to extend the
exclusivity period for the filing of a Chapter 11 plan and
disclosure statement. And, the Bankruptcy Court appointed a
Trustee.
The parties also discussed the pending fee applications. Counsel
for Counsel Financial raised with the Court its objections to fee
payments absent a finding that the fees were incurred for Counsel
Financial's benefit. The Bankruptcy Court disagreed that such a
determination was necessary, stating its belief that Counsel
Financial was only entitled to "adequate protection" of the cash
collateral. Given the appointment of a Trustee, however, the
Bankruptcy Court found it appropriate to not issue an order on the
Interim Fee Applications, but instead to discuss the Monthly
Statements, noting that these payments were ultimately subject to
interim and final fee applications.
On Jan. 15, 2020, the Bankruptcy Court issued an order authorizing
certain payments pursuant to the Monthly Statements. That order
authorizes the payment of 60% of the fees and 100% of the expenses
to Foley Hoag and EisnerAmper, as well as an additional payment to
The Benefit Practice. The order does not contain legal analysis,
but notes that the Bankruptcy Court overruled Counsel Financial's
objections at the December Hearing.
Counsel Financial initiated this action with a notice of appeal on
Jan. 1, 2020. Counsel Financial also seeks to strike the brief
filed by Foley Hoag on the grounds that only the Trustee has
standing to pursue causes of action that belong to the bankruptcy
estate. Counsel Financial also argues that Foley Hoag no longer
represents L&R, and as such does not have standing to bring a fee
application. The Court denies Counsel Financial's motion to
strike.
According to the District Court, motions to strike under Fed. R.
Civ. P. 12(f) are only properly directed at pleadings. Because
Foley Hoag's response is not a pleading, it is not properly
stricken pursuant to Rule 12(f).
Even if Counsel Financial's Rule 12(f) motion were proper, the
District Court says it nonetheless denies. Foley Hoag's response to
Counsel Financial's motion to strike disputes that it no longer
represents L&R, but nonetheless asks that the Court accept its
brief (and presumably also its initial response to Counsel
Financial's motion for permission to appeal) as being filed by
Foley Hoag, as appellee. The Court says it need not decide whether
Foley Hoag represents L&R because the positions it asserts are
properly asserted in its own right. The Court notes that the Second
Circuit has "long allowed appeals by a nonparty when the nonparty
has an interest that is affected by the trial court's judgment."
Foley Hoag, as a recipient of the interim fees awarded by the
Bankruptcy Court, undoubtedly has an interest in the order Counsel
Financial seeks to appeal. Foley Hoag's papers do not seek to
assert any rights belonging to L&R.
In order to permit an interlocutory appeal under 28 U.S.C. section
1292(b), the order being appealed must involve "[1] a controlling
question of law [2] as to which there is substantial ground for
difference of opinion and [3] that an immediate appeal from the
order may materially advance the ultimate termination of the
litigation."
The District Court says it need only consider the last of the
section 1292(b) factors in determining that appeal is not
warranted: whether an immediate appeal may materially advance the
ultimate termination of the litigation. The Court finds that it
would not. The Court further finds that Counsel Financial has not
remotely established the exceptional circumstances required to
allow an appeal even if it otherwise met the section 1292(b)
criteria.
This third factor, which primarily concerns judicial efficiency is
considered the most important of the Section 1292(b) factors, the
District Court says. While Counsel Financial acknowledges the
importance of this consideration to the Court's analysis, it simply
argues conclusorily that "an interlocutory appeal will advance the
ultimate termination of litigation relating to the Order," and that
an "appeal will also advance the termination of future, related
litigation concerning additional fee applications by the same
professionals and others in this case."
The District Court is unconvinced, pointing out there are numerous
other issues involved in the underlying bankruptcy litigation
beyond this fee issue, the resolution of which it seems an appeal
now would not affect. Moreover, it is not apparent to the Court
how Counsel Financial's arguments support a finding that an appeal
will advance or shorten resolution of the dispute, even assuming
that this litigation only concerned these fee issues. The Court
does not see the presence of any exceptional circumstances
justifying interlocutory appeal. From the Court's perch, this is a
garden variety bankruptcy case involving a garden variety fee
dispute.
A copy of the District Court's Opinion and Order dated July 21,
2020 is available at https://bit.ly/3jO55tn from Leagle.com.
About Liddle & Robinson
Liddle & Robinson, LLP -- http://liddlerobinson.com/-- provides
legal representation primarily to individuals but also to financial
services firms, hedge funds and other businesses in high-stakes,
cutting-edge employment, securities and commercial litigation
matters.
Liddle & Robinson sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-12346) on July 22,
2019. The case is jointly administered with the Chapter 11 case of
Jeffrey Lew Liddle (Bankr. S.D.N.Y. Case No. 19-10747) filed on
March 11, 2019. Judge Sean H. Lane oversees both cases.
At the time of the filing, Liddle & Robinson had estimated assets
of between $1 million and $10 million and liabilities of between
$10 million and $50 million. Foley Hoag LLP is the Debtor's legal
counsel.
Jonathan Flaxer was appointed as the Debtor's Chapter 11 trustee.
The trustee is represented by Golenbock Eiseman Assor Bell & Peskoe
LLP.
LOGMEIN INC: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has assigned a first-time Long-Term Issuer Default
Rating of 'B' to LogMeIn, Inc. The Rating Outlook is Stable. Fitch
has also assigned a first lien senior secured rating of 'BB-'/'RR2'
to the company's $250 million revolving credit facility and $2.7
billion first lien facilities, comprised of a $1.95 billion term
loan and $750 million of first lien secured notes. Fitch has
assigned the $500 million second lien term loan a rating of
'CCC+'/'RR6'.
Fitch's ratings are supported by LogMeIn's well established
SaaS-based services, sizeable customer base, highly recurring
revenues and attractive free cash flow profile. Secular growth
trends for cloud communications and the digital security industry
further support the ratings. While Fitch recognizes that the SMB
market is disproportionately impacted by the coronavirus shutdown,
LogMeIn's offerings are mission critical and have seen strong
demand through the first half of FY2020.
The rating actions follow the previously announced take private of
LogMeIn by Francisco Partners. The buyout will be funded with $2.7
billion of first lien facilities, a $500 million second lien term
loan and new cash equity. Fitch estimates pro forma gross leverage
at close, based on LTM May 2020 EBITDA, will be 6.4x.
KEY RATING DRIVERS
Highly recurring and diversified revenues: Over 97% of LogMeIn's
revenues are subscription based with 90% net retention rates,
resulting in high revenue visibility. Additionally, over 90% of
customer contracts are annual or multi-year contracts, with 60% of
its customers paying upfront. Consistent with the fragmented nature
of the SMB segment it serves, the company has over 2 million paying
customers with no customer accounting for more than 0.5% of
revenues.
Secular Tailwind Supports Growth: Fitch believes LogMeIn is well
positioned to benefit from the digital transformation of its
customers as it creates greater demand for unified communications
and customer engagement and support solutions. The UCaaS market is
estimated to grow at a 10% CAGR from 2019-2024 driven by low
installation and maintenance costs and ability to support remote
work and scalability, relative to legacy PBX systems. Penetration
of UCaaS systems is currently less than 10%, and Fitch expects
LogMeIn is well positioned to benefit from the increasing adoption
rates.
Additionally, the enhanced cyber risk landscape results in stronger
demand for identity and access management solutions. The recent
shift to work from home has further exacerbated the demand for
these services. The TAM for LogMeIn's services is estimated at $68
billion and growing by double digits. Fitch believes there are
additional opportunities for the company to expand its share of
wallet within existing customers to improve retention and margins,
since less than 10% of its customers buy more than one product.
Highly Competitive Marketplace: Fitch expects LogMeIn to be exposed
to intensifying competition across each of its core end markets,
including from market leaders, who are larger and have greater
financial flexibility. While LogMeIn's strategy is focused on
providing a comprehensive product platform to the SMB Segment, it
competes with other SMB focused competitors like 8x8, enterprise
focused competitors like Ringcentral and Vonage; enterprise
solution companies with sizeable installed bases like Microsoft and
Google who also offer connectivity solutions to their SMB
customers, and point solutions like Zoom.
Leverage to remain elevated: Fitch expects gross leverage to be
6.1x in fiscal 2020, in line with peers in the 'B' rating category.
Fitch expects LogMeIn to maintain gross leverage between 5.0x and
6.0x throughout the rating horizon. Fitch believes the company will
make ongoing investments in technologies and products to keep pace
with the fast-moving industry, limiting its deleveraging primarily
to EBITDA growth. Private Equity ownership will also limit
deleveraging to optimize ROE.
Strong FCF characteristics: Fitch projects LogMeIn will generate
FCF margins in the mid to high teens over the rating horizon.
Despite the high interest burden, FCF margins are buoyed by modest
capex, low working capital needs and the deferred revenue cycle.
Fitch expects the company will deploy some of this FCF to acquire
new technology solutions to expand its range of offerings.
DERIVATION SUMMARY
LogMeIn is well positioned for its rating given its highly
recurring revenue stream and strong profitability and FCF margins.
LogMeIn's EBITDA margins and FCF margins are in line with Fitch's
software universe and exceed margins for some of its public
cloud-based peers such as RingCentral, Okta and Zoom. Fitch expects
LogMeIn's leverage to remain in the 5x to 6x range over the rating
horizon. LogMeIn's competitive market position, revenue scale, and
leverage profile are consistent with the 'B' rating category.
The ratings also reflect Fitch's expectation that despite strong
secular demand for UCaaS and network security, LogMeIn's growth
will lag that of the sector due to the highly competitive landscape
and its SMB focus. Increasing adoption of cloud-based telephony has
driven the growth of the UCaaS industry, with pure-play cloud-based
providers increasingly taking share away from traditional,
on-premise providers. On the enterprise end, traditional players
like Cisco and Avaya have expanded their UCaaS offerings through
acquisitions. Other enterprise providers include RingCentral and
Vonage, as well as Microsoft and Google. Industry research suggests
that the five largest UCaaS providers - Ringcentral, Mitel, 8x8,
Cisco and Vonage account for over 60% of the market. In the SMB
segment, LogMeIn competes with both other UCaaS providers such as
8x8 and Fuze, as well as point solutions such as Zoom.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within its Rating Case for the Issuer:
-- Strong revenue growth over the next 18 months buoyed by robust
demand for UCaaS and LastPass. Longer-term organic revenue growth
in the low single digit range;
-- EBITDA margins are expected to improve to the high 30% range
driven by cost rationalization and more streamlined sales and
marketing initiatives;
-- Normalized free cash flow margins in the mid-teens.
The recovery analysis assumes a going concern EBITDA that is in
line with pro forma LTM May 30, 2020 EBITDA (excluding any cost
savings). Fitch applies a 6.5 multiple to arrive at an enterprise
value of $2.7 billion. The multiple is higher than the median
Telecom, Media and Technology EV multiple but is in line with the
Fitch employed multiple for other 'B'-rated SaaS companies.
In the 21st edition of Fitch's Bankruptcy Enterprise Values and
Creditor Recoveries case studies, Fitch noted nine past
reorganizations in the Technology sector with recovery multiples
ranging from 2.6x to 10.8x.
Of these companies, only three were in the Software sector: Allen
Systems Group, Inc.; Avaya, Inc.; and Aspect Software Parent, Inc.,
which received recovery multiples of 8.4x and 5.5x, respectively.
Avaya, which is a legacy PBX business exited bankruptcy at an 8.1x
multiple. Median trading multiples for the sector are in the
double-digit range. The 6.5x multiple is supported by LogMeIn's
scale, strong margins, highly recurring revenues and strong FCF
profile
-- Fitch assumes a fully drawn revolver in its recovery analysis
since credit revolvers are tapped as companies are under distress.
Fitch assumes a full draw on LogMeIn's $250 million revolver.
-- Fitch estimates strong recovery prospects for the first lien
credit facilities and rates them 'BB-'/'RR2', or two notches above
LogMeIn's 'B' IDR. Fitch estimates limited recovery prospects for
the second lien term loan and rates it 'CCC+'/'RR6', two notches
below LogMeIn's IDR.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Total Debt with Equity Credit / Operating EBITDA sustained
below 5.0x;
-- Sustained revenue growth of mid-single digits, implying stable
market position;
-- FFO interest coverage sustaining above 3.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Fitch's expectation of total debt with equity credit /
operating EBITDA sustaining above 6.5x;
-- Sustained negative revenue growth, signaling material customer
churn amidst competitive pressures;
-- FFO interest coverage sustaining below 2.0x.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
LogMeIn has strong liquidity in the form of $60 million of cash
funded to the balance sheet as part of the transaction. In
addition, the company has full availability of its $250 million
revolving credit facility. The company generates significant FCF
over the rating horizon with margins sustaining in the mid to high
teens, despite the near-term costs related to the cost
rationalizations and upcoming RSU payouts. Fitch expects the
company to generate in excess of $1 billion in pre-dividend free
cash flow over the rating horizon.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has made no material adjustments that are not disclosed
within the company's public filings.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
LOGMEIN INC: Moody's Assigns B2 CFR & Rates First Lien Loans B1
---------------------------------------------------------------
Moody's Investors Service assigned a B2 Corporate Family Rating to
LogMeIn, Inc. and B1 and Caa1 ratings to its proposed $2.2 billion
of first lien and $500 million of second lien credit facilities,
respectively. The ratings outlook is stable. The net proceeds from
the proposed credit facilities along with the proceeds from
additional debt that will be pari passu with the 1st lien credit
facilities, and approximately $1.4 billion of equity contribution
by affiliates of Francisco Partners and Evergreen Coast Capital
Corp. will be used to consummate the acquisition of LogMeIn for
total consideration of about $4.3 billion. The acquisition is
expected to close in 3Q 2020.
Assignments:
Issuer: LogMeIn, Inc.
Probability of Default Rating, Assigned B2-PD
Corporate Family Rating, Assigned B2
Senior Secured 1st Lien Term Loan, Assigned B1 (LGD3)
Senior Secured 1st Lien Revolving Credit Facility, Assigned B1
(LGD3)
Senior Secured 2nd Lien Term Loan, Assigned Caa1 (LGD6)
Outlook Actions:
Issuer: LogMeIn, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
The B2 CFR is constrained by LogMeIn's high closing leverage and a
large (albeit declining) proportion of revenues from mature
products. LogMeIn's growth-oriented portfolio comprising its
GoToConnect Unified Communications as Service, LastPass and Bold360
Digital Engagement offerings accounted for about 30% of its
revenues in 1Q 2020. These products address large and growing
markets but also face formidable competitors. The Covid-19 pandemic
has significantly boosted demand across LogMeIn's product portfolio
and Moody's expects revenue growth in 2020 to temporarily increase
to the high single digits.
The growth in EBITDA driven by these tailwinds will benefit
LogMeIn's closing leverage, which Moody's expects to be
approximately 7x (total debt to EBITDA, incorporating Moody's
standard analytical adjustments, change in deferred revenues and
after expensing capitalized software development costs). The B2
rating also incorporates the risk of business disruption from the
company's plans to cut $130 million of annual costs over the next
12 months.
The B2 rating is supported by LogMeIn's good operating scale,
recurring revenues from subscription-based services and strong
profitability even before the planned $130 million of cost savings
are included in earnings. LogMeIn's meeting solutions and UCaaS
offerings are well-regarded in the market. Moody's expects revenues
from growth-oriented products to offset declines in mature products
and overall revenue growth of at least the low single digits after
2020. The rating incorporates Moody's expectations for prospective
strengthening of LogMeIn's credit profile, including free cash flow
increasing from the low single digit percentages of total debt in
2020, to at least 5% in 2021, and leverage declining to the low 6x
by 2021, as cost savings are reflected in the earnings. There is
upside to revenue forecasts if the company can effectively execute
its plans to increase operating efficiency and drive growth from
selling higher value solutions to small and medium enterprises.
LogMeIn has good liquidity comprising $60 million of cash at the
close of its acquisition, access to an undrawn $250 million
revolving credit facility, and Moody's estimates of free cash flow
of at least $175 million in 2021.
Governance considerations, specifically, the company's tolerance
for high financial risk and Moody's expectations for a
shareholder-friendly financial strategy under the ownership of
financial sponsors, constrain the rating.
The stable outlook reflects Moody's expectation for sustained
improvements in profitability and cash generation driven by modest
revenue growth and operating efficiencies.
The ratings are subject to review of the final terms of debt
offerings. Moody's expects that additional debt issuance outside of
the credit agreement to consummate the acquisition will be pari
passi with the obligations under the first lien credit facilities.
The proposed terms of the credit agreements, which are not final,
provide flexibility for transactions that could adversely affect
creditors, including ability to incur substantial incremental debt;
release a guarantee when a subsidiary is not wholly owned; ability
to transfer assets to unrestricted subsidiaries subject to
carve-out amounts; and ability to deploy portions of proceeds from
asset sales for other than debt prepayment, if certain
leverage-based thresholds are met.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating upgrade is not expected over the next 12 to 24 months
given Moody's expectations for elevated financial leverage over
this period. Moody's could upgrade LogMeIn's rating over time if
the company generates EBITDA growth in the mid-single digit
percentages and commits to and maintains a more conservative
financial profile, including total debt to EBITDA below 5x (total
debt to EBITDA, incorporating Moody's standard analytical
adjustments, change in deferred revenues and after expensing
capitalized software development costs) and free cash flow in the
high single digit percentages of total debt.
Conversely, Moody's could downgrade LogMeIn's ratings if revenues
decline, liquidity becomes weak, or operating performance falls
short of expectations as a result of execution challenges or
intense competition. The rating could be downgraded if Moody's
expects free cash flow to remain below 5% of adjusted debt and
leverage above the mid 6x level.
LogMeIn is a leading provider of unified communications and
collaboration, identity and access management, and customer
engagement and support solutions.
The principal methodology used in these ratings was Software
Industry published in August 2018.
LSB INDUSTRIES: S&P Cuts ICR to 'CCC' on Weak Agricultural Pricing
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on LSB
Industries to 'CCC' from 'CCC+'. S&P also lowered the issue-level
ratings by one notch.
S&P now expects 2020 EBITDA and credit metrics will remain weaker
than 2019 levels given weak agriculture pricing and the current
global recession. Following a weak 2019 planting season that was
affected by poor weather, the company's earnings will continue to
be pressured by weak fertilizer prices stemming from oversupply and
the ongoing recession. Although LSB's agriculture volumes were up
year over year at June 2020, EBITDA was hurt by high-density
ammonium nitrate (HDAN), urea ammonium nitrate (UAN), and ammonia
prices being down across the board, and S&P expects pricing to
remain low throughout 2020. In addition, the company's industrial
and mining sales volumes and pricing were down year over year since
the coronavirus has hurt end markets.
Although the economy has seen some reopening and auto plants have
reopened (a key nitric acid consumer), S&P expects the industrial
segment to be challenged throughout 2020 and it forecasts U.S.
light vehicle sales to be down over 20% in 2020. Somewhat
offsetting weaker selling prices is the impact that lower natural
gas, a key raw material input for LSB, had on its cost structure,
along with the company's improved operating reliability.
Liquidity continues to be a focus for LSB. At the height of the
pandemic the company proactively drew on its asset-based lending
(ABL) facility to preserve cash on the balance sheet. The company
has since repaid a portion of its borrowings. S&P continues to
monitor the company's liquidity position. Revolver availability is
a key source of liquidity; however, consecutive quarters of
negative free cash flow generation could become a risk to the
company's current liquidity.
Operations at the company's plants continue to improve, leading to
strong on-stream rates. In the past, the company's earnings have
been hindered by operational issues at its plants. S&P believes
that the company has taken positive steps over the past two years
to improve operational performance and avoid unplanned outages at
its facilities. The company has implemented better maintenance
procedures, training programs, and other business improvement
initiatives, which have benefited ammonia on-stream rates versus
historical levels. Although S&P believes the company has taken
positive steps to help mitigate disruptions at its plants, it is
aware that the business is subject to events such as weather
disruptions that are out its control.
"The negative outlook reflects our view that LSB will continue to
be affected by lower agriculture selling prices and the impact of
COVID-19 on its industrial end markets. As a result of weaker
EBITDA for 2020 and 2021, we continue to view its leverage as
unsustainable. We expect leverage to remain high, with debt to
EBITDA well into the double-digits over the next 12 months," S&P
said.
"In addition, the company's liquidity has weakened year over year
and continued depressed earnings could further pressure cash flows
and liquidity. It could also lead to further revolver borrowings
and cause the springing covenant to spring. Our negative outlook
does not consider any large debt-funded acquisitions or shareholder
rewards," the rating agency said.
S&P could lower the rating within the next year if:
-- Significant unplanned operating problems occur at any of the
company's facilities.
-- Industrial end markets are weaker than expected.
-- Nitrogen fertilizer pricing remains significantly depressed,
leading to further deterioration in earnings and liquidity. In this
scenario, S&P envisions that liquidity would weaken further than
its current levels and could cause covenant issues. Although it
believes LSB has liquidity to fund its interest payments, S&P sees
a risk that if the company experiences any significant operational
issues over the next few quarters, the company could skip an
interest payment.
-- The company consistently generates negative free cash flow.
-- The company funds shareholder rewards or acquisitions with
additional debt or it buys back debt at a discount in an exchange
that it views as distressed.
S&P could take a positive rating action within the next year if:
-- The company improves leverage, either through debt reduction or
stronger-than-expected operating performance led by higher selling
prices. In such a scenario, S&P expects that debt to EBITDA would
improve and approach 10x on an S&P Global Ratings-adjusted basis.
-- There's an infusion of significant cash from outside of
business operations, such as via asset sales. Before considering a
higher rating, S&P would need to believe such improvement is
sustainable and the company's improved volumes and higher selling
prices would lead to improved EBITDA. In such a scenario, S&P would
expect the company's liquidity sources to exceed its uses by at
least 1.2x.
-- S&P expects no significant increases to the company's capital
spending plans or increased debt to fund further growth or returns
to shareholders.
M2 SYSTEMS: Reaches Mediated Settlement with Digital & M2PS
-----------------------------------------------------------
M2 Systems Corporation filed an Amended Disclosure Statement
describing Amended Plan of Reorganization dated June 26, 2020.
Pursuant to the agreement reached between the Debtor, Digital and
M2PS (the Digital Settlement), in exchange for a copy of the
Debtor's ENGIN source code and $100,000 from Michael Muscato
(Debtor's principal). Digital and M2PS agreed to withdraw their
respective claims in the Debtor's bankruptcy case, the Plan of
Liquidation and all documents related thereto. The parties to the
Digital Settlement also agreed to provide mutual releases of any
and all claims between them. The Digital Settlement effectively
reduced the claims filed in the Debtor's bankruptcy case by
$100,000,000, and eliminated the potential administrative expenses
which would have been incurred contesting the Plan of Liquidation
and the motion to estimate filed by Digital and M2PS, which
expenses would ultimately deplete the sums available for
distribution to Holders of Allowed Claims.
On May 20, 2020, the Debtor, Digital and M2PS filed their Joint
Motion to approve Mediated Settlement Agreement, which motion was
ultimately granted and approved on June 16, 2020. As a result of
the approval of the compromise reached between the Debtor, Digital
and M2PS -- which requires the withdrawal of the claims filed by
Digital and M2PS -- treatment of the claims filed by Digital and
M2PS are not addressed in this Disclosure Statement or the Amended
Plan of Reorganization accompanying this Disclosure Statement.
Class I consists of the Allowed Unsecured Claims of the Indoor
Billboard Plaintiffs. In full satisfaction of their Allowed Class I
Claims, the Indoor Billboard shall have the option to elect
treatment under Option A or Option B:
* Option A. Holders electing payment of their claim in accordance
with Option A shall receive a promissory note representing each
Indoor's pro rata share of the sum of $800,000 in preferred
distributions to be paid in graduated quarterly payments paid pro
rata beginning six months after entry of an order confirming the
Debtor's Plan.
* Option B. Holders electing payment of their claims in
accordance with Option B shall have ten percent of their remaining
unsecured claim, paid in full within 3 months of an order
confirming the Debtor's Plan.
Class 2 consists of the Allowed Unsecured Claim of Karen Taragano.
In full satisfaction of her Allowed Classs 2 Claim, Taragano shall
receive $10,000 within 30 days of the entry of a final order
confirming the Debtor's Plan, and a Cash Flow Note for $30,000.
Class 3 consists of all Allowed Unsecured Claims of Invoice Trade
Creditors against the Debtor. In full satisfaction of their
Allowed Unsecured Claims, Holders of Class 3 Claims shall receive
payment of such Claims in full on the effective date.
A full-text copy of the Amended Disclosure Statement dated June 26,
2020, is available at https://tinyurl.com/ycsdwle8 from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Daniel A. Velasquez, Esq.
Frank M. Wolff, Esq.
LATHAM, LUNA, EDEN & BEAUDINE, LLP
111 N. MAGNOLIA AVE., SUITE 1400
ORLANDO, FLORIDA 32801
About M2 Systems Corporation
M2 Systems Corporation -- https://www.m2-corp.com/ -- provides
computer automated solutions for practical business problems
utilizing technology serving the financial, healthcare, retail,
security, transportation, logistics and telecommunications
industries. It specializes in developing, marketing and
implementing transaction technologies for both established and
emerging markets as well as creating outlets for licensing and
operating its solution sets. M2 Systems was founded in 1986 and is
headquartered in Maitland, Florida.
M2 Systems sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Fla. Case No. 18-01339) on March 12, 2018. In
the petition signed by Joseph W. Adams, CEO and director, the
Debtor was estimated to have assets of less than $1 million and
liabilities of $1 million to $10 million. Latham, Shuker, Eden &
Beaudine, LLP, is the Debtor's bankruptcy counsel.
MCGRATH TECHNICAL: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: McGrath Technical Staffing, Inc.
DBA McGrath Systems
1787 Sentry Parkway West
Blue Bell, PA 19422-2239
Business Description: Founded by Mike Wiley in 2005, McGrath
Systems -- https://www.mcgrathsystems.com --
is a recruiting, staffing, and solutions
company, offering professional staffing
services, technology talent services, and
commercial staffing services.
Chapter 11 Petition Date: August 3, 2020
Court: United States Bankruptcy Court
Eastern District of California
Case No.: 20-13241
Judge: Hon. Magdeline D. Coleman
Debtor's Counsel: Thomas D. Bielli, Esq.
BIELLI & KLAUDER, LLC
1500 Walnut Street
Suite 900
Philadelphia, PA 19102
Tel: 215 642 8271
Email: tbielli@bk-legal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael Wiley, president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://is.gd/vE1Lop
METRO BURGH: Aug. 6 Hearing on Disclosure Statement
---------------------------------------------------
Judge Gregory L. Taddonio has ordered that the hearing to consider
approval of the disclosure statement of Metro Burgh Properties,
L.P. will be held on August 6, 2020 at 10:30 AM Courtroom A, 54th
Floor, U.S. Steel Tower, 600 Grant Street, Pittsburgh, PA 15219.
The last date to file and serve written objections to the
disclosure statement is fixed as July 30, 2020.
About Metro Burgh Properties
Metro Burgh Properties, L.P., is the owner of commercial real
property with an appraised value of $10,300,000.
Its primary secured creditor, i.e. Citizens Bank, declared debtor
to be in default of its loan obligations despite Debtor being fully
current in regard to its loan payments. Even though Citizen Bank
was protected by approximately $5,000,000 in equity in its
collateral and despite the Debtor being fully current on its loan
payments, Citizens Bank had commenced a foreclosure proceeding
against the Debtor and was seeking the appointment of a receiver
based upon, inter alia, Debtor being behind in its real estate tax
payments, Debtor's failure to provide certain information called
for in the loan documents and similar type alleged "defaults."
To stay foreclosure, Metro Burgh Properties, L.P., sought Chapter
11 protection (Bankr. W.D. Pa. Case No. 20-20824) on March 3,
2020.
Counsel for the Debtor:
ROBERT O LAMPL
JOHN P. LACHER
RYAN J. COONEY
SY 0. LAMPL
223 Fourth Avenue, Floor
Pittsburgh, PA 15222
Tel: (412) 392-0330
Fax: (412) 392-0335
E-mail: rIamplIampIlaw.com
MICHAEL LEVY: Appeals Court Upholds Judgment in In-Laws Row
-----------------------------------------------------------
In the case captioned MICHAEL J. LEVY, Cross-complainant and
Appellant, v. JACK LIN et al., Cross-defendants and Respondents,
No. B294392 (Cal. App.), the California Appeals Court affirms a
trial court judgment against Allison Levy and Michael Levy on a
breach of contract cause of action, awarding the respondents
$625,000 in damages.
Jack Lin and Betty Ann Lin sued their daughter, Allison Levy, and
her estranged husband, Michael Levy, for breach of an oral contract
and other causes of action arising out of the Lins' payment of $1.4
million related to the purchase of a new home for the Levys. The
Lins alleged the payment was a loan the Levys failed to repay.
Michael cross-complained against the Lins and Allison seeking,
among other claims, a declaration the $1.4 million was a gift.
After a seven-day bench trial, the lower court found the $1.4
million payment was partially a loan and partially a gift. The
court entered judgment against the Levys on the breach of contract
cause of action, awarding the Lins $625,000 in damages. On appeal,
Michael contends the court's ruling was not supported by
substantial evidence and, even if it were, the oral contract was
not enforceable as a matter of law.
Michael contends there was no evidence to support the court's
finding the parties contracted for a partial loan and a partial
gift. Even if Jack intended this arrangement, Michael argues he did
not agree to it. Thus, there was no mutual consent to establish a
contract.
Whether the parties mutually agreed to a contract -- that is,
whether a contract exists -- and, if so, the determination of its
terms are questions of fact, according to the Appeals Court. In
particular, "[w]hen the contract relied on is oral, its
interpretation in the first instance is a question of fact to be
determined by the [factfinder]. The question, therefore, [is] one
of evidence, and it [is] for the [factfinder] to determine from the
facts and circumstances proved, including, of course, the
conversations between the parties, whether or not a contract was
proven."
According to the Appeals Court, substantial evidence supports the
trial court's conclusion the parties agreed to a partial gift. To
support its finding of a $775,000 gift, the court relied primarily
on the gift letter executed by Jack. Emphasizing that Jack had
testified he did not intend to make a $775,000 gift to Allison,
Michael argues there was no testimony the gift letter was intended
to be part of the final transaction, which occurred months after
its execution. As the exclusive arbiter of credibility, however,
the trial court was entitled to reject Jack's testimony and rely
instead on the unambiguous statement in the gift letter. Even
though the final transaction occurred months later, it was
consummated pursuant to the terms of the original offer, albeit
with an addendum converting it to an all-cash purchase. In the
absence of undisputed evidence of a renunciation of the gift
letter, it was reasonable for the trial court to infer its terms
remained part of the transaction.
The Appeals Court held that substantial evidence also supports the
trial court's finding the remaining $625,000 at issue was a loan.
Jack, Betty Ann and Allison testified all funds provided to the
Levys were loans, and even Michael testified a loan for part of the
funds had been contemplated by the parties. While the court
credited in part this testimony, having already concluded Jack
intended to make a gift to Allison of $775,000, it was reasonable
to infer the remaining $625,000 was loan.
On appeal Michael primarily argues the trial court's hybrid finding
of partial loan and partial gift was impermissible, contending the
court was obligated to accept one or the other party's position in
its entirety. However, the Appeals Court held it was a factual
question for the trial court to determine whether an oral contract
was formed and, if so, what terms were included in the agreement.
While the parties set forth their positions, the lower court was
entitled to reject parts of the evidence and draw any reasonable
conclusion supported by the evidence it found credible.
Michael also argues that, even if the parties agreed to a contract
as found by the trial court, it cannot be enforced as a matter of
law because it did not contain sufficiently specific terms
regarding repayment. The trial court properly rejected this
argument.
The trial court found the parties' agreement did not contain a
definite date upon which repayment was to be made, but found the
parties agreed "as much as possible would be repaid upon the sale"
of the Levys' former home. The testimony was undisputed that the
Levys had approximately $400,000 of equity in their former home and
intended to sell the home soon after moving into Mont Calabasas.
The court also found the Levys "would borrow the amount necessary
to repay the rest as soon as reasonably possible." Substantial
evidence supports these findings.
The Appeals Court further ruled that the amount owed by the Levys
was certain such that an appropriate remedy could be assessed. The
repayment terms as found by the trial court were sufficiently
definite to enforce. The repayment was to be made in two
installments: approximately $400,000 immediately following the sale
of the Levys' former home and the balance upon the Levys obtaining
a new home loan secured by Mont Calabasas. Further, even if the
court had not found the parties agreed to the repayment terms,
"[i]n the absence of a specified time of payment, a reasonable
period is allowable under Civil Code section 1657."
A copy of the Appeals Court's Ruling dated July 21, 2020 is
available at https://bit.ly/330hVyO from Leagle.com.
Bergman Law Group and Daniel A. Bergman, for Cross-complainant and
Appellant Michael Levy.
Silver and Arsht, Samuel J. Arsht, Jeffrey A. Meinhardt and Marsha
C. Brilliant, for Cross-defendants and Respondents Jack Lin and
Betty Ann Lin.
Harrington, Foxx, Dubrow & Canter, Michael E. Jenkins and Zakiya N.
Glass, for Cross-defendant and Respondent Allison Levy.
The bankruptcy case is In re: Michael J. Levy, Case No. 18-12499
(Bankr. C.D. Cal.).
MICHAEL R. EADES: Gates Trust Buying Montecito Property for $3.8M
-----------------------------------------------------------------
Michael Robert Eades and Mary Dan Eades ask the U.S. Bankruptcy
Court for the Northern District of Texas to authorize the sale of
their real property located at 652 Park Lane, Santa Barbara
(Montecito), California to the Lewis Gates Living Trust pursuant to
their California Residential Purchase Agreement dated June 5, 2020
for $3,825,000.
On April 23, 2004, the Debtors, as borrowers, and Bank of America,
as lender, executed a note and deed of trust for the Debtors'
purchase of the California Property.
On July 9, 2018, the Debtors received a Notice of Sale of Ownership
of Mortgage Loan indicating that their mortgage loan with Bank of
America had been sold and transferred to a new owner and loan
servicer. The notice indicated that the new loan servicer was
Rushmore Loan Management Services, LLC, with a mailing address of
15480 Laguna Canyon Road, Suite 100, Irvine, CA 92618. The investor
and owner of the loan was listed as Wilmington Savings Fund
Society, FSB, doind business as Christiana Trust, not individually
but as trustee for Pretium Mortgage Acquisition Trust, 500 Delaware
Ave., 11th Floor, Wilmington, DE 19801. Wilmington and Rushmore
assert that the amount due on the loan as of the Petition Date is
approximately $2,290,953.
On April 12, 2007, the Debtors obtained a Home Equity Line of
Credit with CitiBank, N.A. in the amount of $500,000 secured by a
second lien on the California Property. The amount due and owing
under the line of credit as of the Petition Date is approximately
$434,601.
The Debtors are also indebted to Northern Trust Corp., which has a
third lien on the California Property and, as of the Petition Date,
is owed approximately $106,454.
The Debtors have been marketing the California Property
consistently since the filing of the case. While there were
several interested parties and offers early in 2020, none of those
offers survived the initial contingency periods. The Debtors
believe that uncertainty in the market, caused in part by the
COVID-19 pandemic, resulted in prospective purchasers withdrawing
from the sale.
Notwithstanding, one of the parties that expressed initial interest
in the property earlier this year has returned to the table and
made another offer to purchase the property. Because the initial
escrow period on the new contract has expired and there are no
other contract contingencies, the Debtors believe that they have a
firm offer on the California Property that will close as
anticipated.
Specifically, on June 5, 2020, the Debtors, as the Seller, and the
Purchaser, entered into the Contract for the sale of the California
Property for the purchase price of $3,825,000. The Contract
required the Purchaser to deposit non-refundable earnest money in
the amount of $115,000. The closing of the sale is scheduled for
Aug. 7, 2020.
The Contract's initial escrow period expired on June 12, 2020. The
Purchaser waived all other contingencies. Accordingly, there are
no contingencies on the Contract. While the Debtors anticipate
that the closing will proceed as scheduled, if the Purchaser fails
to close on the transaction, the Contract provides that the earnest
money of $115,000 is to be forfeited.
There are three liens on the California Property. There exists a
first lien mortgage held by Wilmington and serviced by Selene
Finance, LP with an approximate balance of $2,290,953 as of the
Petition Date. The second lien arises from the Home Equity Line of
Credit with Citi with the approximate balance of $434,601 as of the
Petition Date. The third lien arises from the loan with Northern
with an approximate balance of $106,454 as of the Petition Date.
The Debtors do not believe there are any other liens or
encumbrances on the property.
The Debtors are asking Court approval to sell the California
Property pursuant to section 363(b) of the Bankruptcy Code. The
Contract was negotiated at arms'-length and the proposed
transaction is a sound exercise of the Debtors' business judgment.
The sale will allow the Debtors to substantially consummate the
Plan, pay all classes of claims in full, and realize their equity
in the property. Accordingly, the Debtors respectfully ask that
the Court approves the proposed sale.
Finally, the Debtors ask that the Court waives the 14-day stay
provision of Bankruptcy Rule 6004(h).
The objection deadline was July 27, 2020.
A copy of the Contract is available at https://tinyurl.com/yd7f2b5b
from PacerMonitor.com free of charge.
Michael Robert Eades and Mary Dan Eades sought Chapter 11
protection (Bankr. N.D. Tex. Case No. 19-32763) on Aug. 20, 2019.
The Debtors tapped Bryan C. Assink, Esq., at Bonds Ellis Eppich
Schafer Jones LLP as counsel. On Feb. 24, 2020, the Court the
Debtors' Amended Disclosure Statement in Support of Amended Joint
Chapter 11 Plan of Reorganization. On April 17, 2020, it confirmed
their Second Amended Joint Chapter 11 Plan of Reorganization.
MLH HOMES: Case Summary & Unsecured Creditor
--------------------------------------------
Debtor: MLH Homes, LLC
1510 Oak Grove Rd.
Suite 2
Decatur, GA 30033
Business Description: MLH Homes, LLC is a Single Asset Real Estate
debtor (as defined in 11 U.S.C. Section
101(51B)).
Chapter 11 Petition Date: August 3, 2020
Court: United States Bankruptcy Court
Northern District of California
Case No.: 20-68666
Debtor's Counsel: Christopher Carouthers, Esq.
CHRIS CAROUTHERS & ASSOCIATES
2250 North Druid Hills Road
Suite 131
Atlanta, GA 30329
Tel: 404-634-9509
Email: chris@chriscarouthers.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Fred Milani, registered agent/owner.
The Debtor listed Kathy Lam, Atlanta Phuoc Loc Tho, LLC, as its
sole unsecured creditor holding a claim of $1,200,000.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://is.gd/4N7hsp
MORDECHAI KOKA: Selling Napa Property for $790K
-----------------------------------------------
Mordechai Koka asks the U.S. Bankruptcy Court for the Northern
District of California to enter an order authorizing him to (a)
enter into an agreement to sell real property commonly referred to
as located at 3190 Vichy Avenue, Napa, California to James Nead and
Isabela Straka or their assigns for $790,000, subject to overbid;
(b) pay liens asserted against the Property, costs of sale,
commissions, taxes and related costs; and (c) to strike the
wrongfully added default interest from the primary lienholder's
(FCI Lender Services, Inc's) current payoff quote.
The Debtor filed the instant case to stop the non-judicial
foreclosure of his real property located at 858 Acalanes Road,
Lafayette, California. In addition to the Acalanes, the Debtor
owns 1702 Paru Street, Alameda, California and the subject Property
that is asking for Court permission to sell. All the three
properties have equity in them.
The Debtor's plan is to sell two or all three properties to pay off
his personal debts owed. He has personally guaranteed business
debt (from his former construction business, Green Bay Builders,
Inc.), as well as personal debts/bills.
Fortunately, the equity should cover all bills in the case. As for
the instant Motion, at the time of the filing of the petition, the
Debtor was the record owner of the Property.
The net proceeds from the sale of the Property (if approved by the
Court) will be placed in the Debtor's DIP account to be disbursed
pursuant to a Chapter 11 Plan of Reorganization (Soon to be
filed).
The DIP has accepted an offer of $790,000 from the Buyers for all
of the estate's right, title, and interest in and to the Property,
subject to overbid and Court approval. Under the terms of the
Agreement, the sale of the Property is "as is, where is," without
representations or warranties of any kind. The sale of the
Property is subject to overbid.
The Property is encumbered by note secured by a first trust deed in
favor of FCI Lender Services, Inc. recorded against the Property in
Napa County on Nov. 25, 2019 as Document No. 2019-0024307. The
Debtor is the obligor of the First Note and the trustor under the
First Trust Deed. The claimed "default interest penalty" to FCI
began accruing on the day of filing of the instant case (March 10,
2020) and the Debtor respectfully asks that the sale be consummated
without the additional default interest in the amount of $29,979.
As for the Debtor's Realtor/Broker, he brought an application to
Employ Richard Dahnken (CA DRE License No. 01225792) of Castlemont
Realty to list the Property for sale. An order of employment for
Mr. Dahnken was entered on June 1, 2020. Neither the Seller nor
any of the Seller's principals are related to the Purchasers, the
Purchasers' agent, or the Broker.
The estimated costs of sale ($13,019 in total) are as follows: (i)
Commissions-Castlemont - $11,850, (ii) Title and Escrow - $100,
(iii) County Taxes - $200, and (iv) Recording - $869.
The estimated proceeds of sale ($209,618) are as follows: (a) Sales
Price - $790,000, minus (b) Costs of sale ($567,363 in total): (i)
Est payoff 1st - $528,000, (ii) Default interest (requested, not
allowed) - $32,149, (iii) Recording fee - $198, (iv) Tax to Napa
Cty. Tax Collector - $6,208, and (v) Tax installment to Napa Cty -
$807.
The sale of the Property is subject to overbid. In the event that
there is an overbid for the Property, the overbid auction will take
place via a Zoom meeting with the Debtor's Broker, Mr. Rick Dahnken
of Castlemont Realty. It will take place at the office of the
DIP's Broker, Rick Dahnken / Castlemont Realty, by Zoom on July 22,
2020 at 5:00 p.m. (PT) (US and Canada) at
https://us02web.zoom.us/j/81289928398?pwd=VnZQbHBxYzJ1NUttdFRQWFpiWmpWZz09,
Meeting ID - 812 8992 8398 and Password - 0g1K73.
These terms will apply to all parties seeking to make an overbid
offer for the Property:
a. On July 19, 2020 by 5:00 p.m., the bidders must (i) provide
evidence to the Debtor's counsel (Arasto Farsad) at
farsadlaw1@gmail.com, that they can close and pay the purchase
price in cash, (ii) deliver to the Escrow Agent, a $24,150 deposit,
and (iii) agree to be bound by the terms of the Agreement (except
the amount of the purchase price, which amount will be the amount
of a party's highest offer).
b. The initial overbid must be at least $7,900 greater than
the Buyers' offer -- i.e. $797,900. Thereafter, additional bidding
will proceed in minimum increments of $5,000.
c. In the event that a qualified bidder is not the successful
bidder, it may act as a backup bidder at its last highest offer.
The Deposit will be promptly returned to bidders who do not want to
act as back-up bidders. The bidders must agree and acknowledge
that they are purchasing the Property, "as is, where is" with all
faults and defects and with no representations or warranties. All
bids are cash only offers.
d. In the event there is an overbid, the overbid auction will
occur at the office of the Debtor's broker, his Broker, Mr. Rick
Dahnken of Castlemont Realty via Zoom as stated.
e. The successful bidder for the Property must close escrow by
tendering the entire purchase price to the Title Company, less a
credit for any deposit held by escrow, not later than 15 days after
the sale order is entered.
A hearing on the Motion is set for Aug. 5, 2020 at 2:00 p.m.
Objections, if any, must be filed no later than 14 days prior to
the hearing date.
Mordechai Koka sought Chapter 11 protection (Bankr. N.D. Cal. Case
No. 20-50469) on March 10, 2020. The Debtor tapped Arasto Farsad,
Esq., as counsel.
NATIONSTAR MORTGAGE: Moody's Rates New $850MM Unsecured Notes 'B2'
------------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to Nationstar
Mortgage Holdings Inc.'s proposed $850.0 million senior unsecured
notes due in August 2028. The rating outlook is negative.
RATINGS RATIONALE
Moody's has rated the senior unsecured notes B2 based on
Nationstar's B2 standalone assessment and corporate family rating,
the notes' ranking and terms, and the strength of the notes' asset
coverage. The key terms of the notes are largely consistent with
Nationstar's existing senior unsecured notes. The company has
indicated that the proceeds of the notes, along with cash on hand,
will be used to redeem in full the company's outstanding senior
unsecured notes due August 2023.
Nationstar's B2 standalone assessment and corporate family rating
reflect the company's strong position in the U.S. residential
mortgage servicing market, as well as its modest profitability and
capitalization. It also takes into consideration the risks
associated with the firm's growth of its servicing portfolio, which
are however mitigated by its solid track record of acquiring and
integrating residential mortgage servicing assets
The negative outlook reflects Nationstar's eroding capital as well
as a decline in the quality of capital, resulting from net losses
driven by changes in the fair value of mortgage servicing rights.
It also reflects its expectation that Nationstar will be able to
maintain its solid servicing performance and reap the financial
benefits of its larger servicing portfolio. Additionally, it
reflects its expectation that Nationstar's core profitability
(which excludes changes in the value of mortgage servicing rights)
will improve modestly and that the company will be able to maintain
its leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The negative outlook indicates that a ratings upgrade is unlikely
over the next 12-18 months. Nationstar's outlook could return to
stable if the company is able to achieve sustainable profitability,
allowing it to restore its capitalization.
Nationstar's ratings could be downgraded if capitalization weakens
further, as measured by TCE/TMA, excluding DTA, below 2% or if the
company fails to maintain core profitability, as measured by core
pretax pre-provision income to assets, of at least 1%.
The principal methodology used in this rating was Finance Companies
Methodology published in November 2019.
NESSALLA LLC: Seeks to Hire Lotus Small Business as Accountant
--------------------------------------------------------------
NessAlla, LLC seeks approval from the U.S. Bankruptcy Court for the
Western District of Wisconsin to employ Christyn Stephens and Lotus
Small Business Services, LLC, as its accountant.
Lotus have provided and will provide services to Debtor including
monthly accounting, some bookkeeping, and quarterly sales tax
reporting. In addition, during the Chapter 11 case, Lotus will
assist with monthly operating reports and reporting required by
other orders of the Court, including on the use of cash collateral.
Lotus charges for services at the rate of $600 per month for up to
12-hours of work per month, plus $50 per hour for every hour in
excess of 12-hours per month.
Lotus is a "disinterested person" within the meaning of 11 U.S.C.
Sec. 101(14), and does not hold or represent an interest adverse to
Debtor's estate, according to court filings.
The accountant can be reached through:
Christyn Stephens
Lotus Small Business Services, LLC
Email: chris@lotussmallbusiness.com
About NessAlla
NessAlla LLC, a company engaged in the business of beverage
manufacturing, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Wis. Case No. 20-11746) on July 6, 2020. At the
time of the filing, Debtor disclosed total assets of $850,688 and
total liabilities of $1,081,945. DeMarb Brophy LLC represents
Debtor as legal counsel.
NEW FORTRESS: Moody's Assigns B1 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service assigned first time ratings to New
Fortress Energy LLC, including a B1 Corporate Family Rating, a
B1-PD Probability of Default Rating, a B1 rating to its senior
secured term loan and a SGL-3 Speculative Grade Liquidity rating.
The outlook is stable.
Assignments:
Issuer: New Fortress Energy LLC
Probability of Default Rating, Assigned B1-PD
Speculative Grade Liquidity Rating, Assigned SGL-3
Corporate Family Rating, Assigned B1
Issuer: NFE Atlantic Holdings LLC
Senior Secured Term Loan, Assigned B1 (LGD3)
Outlook Actions:
Issuer: New Fortress Energy LLC
Outlook, Assigned Stable
Issuer: NFE Atlantic Holdings LLC
Outlook, Assigned Stable
RATINGS RATIONALE
NFE's B1 CFR is underpinned by Moody's expectations of rising sales
of LNG, backed by long term contracts and proprietary downstream
infrastructure appended to power generation facilities in Jamaica
and Puerto Rico, as well as Mexico and Nicaragua, and by the
expectation of rapid deleveraging in 2021.
The company's ratings also reflect Moody's views on the credit
quality of its customers. NFE plans to improve its customer and
geographic diversification in 2020-2021, but its operating cash
flow retains high dependence on a few key utility customers in
Jamaica and Puerto Rico. The rating assumes a relatively low
volatility in earnings, underpinned by high level of contracted
revenues, including some take-or-pay and minimum volume
commitments, expected volume growth, as well as above market
contracted prices that support strong cash margins.
NFE is a high growth business. The B1 CFR reflects its expectation
that the company will maintain a conservative balance of debt and
equity funding while executing on numerous growth opportunities.
NFE's financial policy targets reasonable financial leverage of
debt/EBITDA of 3x, to be supported by reinvestment of growing
operating cash flows and equity issuances to help fund growth
investments. The Company expects to more than double its earnings
in 2021 as a result of launching new facilities in Nicaragua and
Mexico in the second half of 2020. This should result in leverage
declining rapidly to below 3x in 2021 from the 6.2x debt/EBITDA
that Moody's expects in 2020.
NFE maintains adequate liquidity, reflected in its SGL-3 rating,
that is supported by substantial cash balances, that at the end of
June 2020 stood at $167 million (or about 18% of its long-term
debt). With all operating facilities generating substantial
operating cash margin, NFE's principal financing needs are driven
by its growth capital investment. The rating assumes that NFE will
maintain a sizable cash balance in 2020-21 and will continue to
proactively raise additional financing to support growth investment
requirements. The adequate liquidity position is also supported by
substantial alternate liquidity sources, including growing
infrastructure power assets, as well as the demonstrated ability to
raise equity to support growth. The company also benefits from
extended maturity profile of its debt, with the $800 million senior
secured loan maturing in 2023.
NFE's senior secured term loan due 2023 is rated B1, at the same
level as the CFR. The facility is raised at the level of NFE
Atlantic Holdings LLC, an indirect wholly owned subsidiary of NFE,
and is guaranteed by NFE and its operating companies. The term loan
comprises the substantial majority of the company's consolidated
debt.
The stable outlook assumes continued robust execution on growth
plans and strong operating performance across the expanding asset
base that should deliver a step up in operating cash flows in the
second half of 2020 and strengthen the leverage profile in 2021.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The B1 CFR could be upgraded if the company sustains growth in
EBITDA and builds a strong operating track-record. The upgrade
would require an improvement in the credit profile of the customer
base, including through broader earnings diversification or larger
exposures to higher rated customers and jurisdictions. Also, the
company will need to demonstrate its commitment to equity
co-funding of future growth projects and its ability to operate
within the stated financial policy with debt/EBITDA below 3x.
The ratings may be downgraded if the deleveraging trend is reversed
as a result of a decline in operations or regulatory interference
with debt/EBITDA not trending below 5x or if liquidity position
weakens. Failure to resolve FERC dispute in Puerto Rico in a timely
manner may cause a significant disruption to operations and lead to
a negative outlook or a downgrade of the ratings.
New Fortress Energy LLC is a US-listed, high growth energy
infrastructure company with downstream LNG operations in Jamaica,
Puerto Rico and in the US.
The principal methodology used in these ratings was Midstream
Energy published in December 2018.
NEW VENTURE 777: Aug. 13 Plan & Disclosures Hearing Set
-------------------------------------------------------
On June 17, 2020, New Venture 777 LLC filed with the U.S.
Bankruptcy Court for the Southern District of Florida, Fort
Lauderdale Division, a Disclosure Statement and Plan.
On June 26, 2020, Judge Paul G. Hyman, Jr. conditionally approved
the Disclosure Statement and established the following dates and
deadlines:
* Aug. 13, 2020 at 9:30 a.m. in the United States Bankruptcy
Court, 299 East Broward Blvd., Room 301, Fort Lauderdale, FL 33301
is the hearing on final approval of Disclosure Statement,
Confirmation hearing and hearing on fee applications.
* Aug. 6, 2020 is fixed as the last day for filing written
acceptances or rejections of the plan.
* July 30, 2020 is fixed as the last day for filing objections
to claims.
* Aug. 6, 2020 is fixed as the last day for filing ballots
accepting or rejecting plan.
* Aug. 10, 2020 is fixed as the last day for filing objections
to confirmation and final approval of the Disclosure Statement.
A copy of the order dated June 26, 2020, is available at
https://tinyurl.com/yc35r4tg from PacerMonitor at no charge.
About New Venture 777
New Venture 777 LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 19-19719) on July 22,
2019. At the time of the filing, the Debtor was estimated to have
assets of less than $500,000 and liabilities of less than $1
million. The case has been assigned to Judge John K. Olson. The
Debtor is represented by Moffa & Breuer, PLLC.
NEWSCO INTERNATIONAL: Seeks to Hire Gordon Brothers as Appraiser
----------------------------------------------------------------
Newsco International Energy Services USA, Inc. seeks approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
employ Gordon Brothers Asset Advisors, LLC as appraiser.
Debtor requires the services of the firm to get an updated
valuation of its equipment. The equipment was previously appraised
at $5.23 million.
Gordon Brothers will receive an appraisal fee of $13,500, plus
out-of-pocket expenses, with $6,750 due upon employment and the
balance due upon issuance of the appraisal report.
Aaron Walton, a managing director at Gordon Brothers, 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:
Aaron Walton
Gordon Brothers Asset Advisors, LLC
6217 Chapel Hill Blvd., Suite 300
Plano, TX 75093
Telephone: (469) 626-0898
Email: awalton@gordonbrothers.com
About Newsco International Energy
Services USA
Established in 1994, Newsco International Energy Services USA Inc.
is a global directional drilling and MWD (measurement while
drilling) service company. Visit http://www.newsco-drilling.com
for more information.
Newsco International Energy Services USA filed a voluntary Chapter
11 petition (Bankr. S.D. Tex. Case No. 19-36767) on Dec. 4, 2019.
In the petition signed by Corey D. Campbell, chief operating
officer, Debtor was estimated to have $1 million to $10 million in
both assets and liabilities. Judge David R. Jones oversees the
case.
Stephen A. Roberts, Esq., at Clark Hill Strasburger, is Debtor's
legal counsel.
The Office of the U.S. Trustee appointed creditors to serve on the
official committee of unsecured creditors on Jan. 8, 2020. The
committee is represented by Renshaw, P.C.
OBALON THERAPEUTICS: Incurs $4.2M Net Loss in Second Quarter
------------------------------------------------------------
Obalon Therapeutics, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q, reporting a net loss
and comprehensive loss of $4.19 million on $703,000 of revenue for
the three months ended June 30, 2020, compared to a net loss and
comprehensive loss of $6.77 million on $386,000 of revenue for the
three months ended June 30, 2019.
For the six months ended June 30, 2020, the Company reported a net
loss and comprehensive loss of $9.45 million on $1.48 million of
revenue compared to a net loss and comprehensive loss of $15.06
million on $2.16 million of revenue for the same period during the
prior year.
Cost of revenue was $0.4 million for the second quarter of 2020,
down from $0.7 million for the second quarter of 2019. Gross
profit for the second quarter of 2020 was $0.3 million, compared to
a gross deficit of $0.3 million for the second quarter of 2019.
Research and Development expense for the second quarter of 2020
totaled $0.8 million, down from $1.8 million for the second quarter
of 2019. Selling, General and Administrative expense decreased to
$2.4 million for the second quarter of 2020, compared to $4.3
million for the second quarter of 2019.
The Company recognized $1.3 million impairment expense and other
charges related to its inventory and long-lived assets during the
second quarter of 2020, as a result in the Company's shift in
business strategy away from the retail treatment centers to
reimbursement.
Operating loss for the second quarter of 2020 was $4.2 million,
down from a loss of $6.4 million for the second quarter of 2019.
As of June 30, 2020, the Company had $13.87 million in total
assets, $6.69 million in total liabilities, and $7.18 million in
total stockholders' equity.
As of June 30, 2020, the Company had cash and cash equivalents of
$6.8 million and $0.4 million of debt related to its Payroll
Protection Program loan. The Company intends to continue exploring
the potential for third-party reimbursement for the Obalon Balloon
System, as well as exploring and evaluating financial alternatives
to help meet its capital needs and strategic alternatives that
might enhance stockholder value. There is no assurance that any
financial or strategic alternative will be identified. If the
Company is not able to raise additional capital to meet its needs
or to identify a strategic alternative in the best interest of
stockholders, it will have to discontinue all operations and may be
required to declare bankruptcy or dissolve.
As of June 30, 2020, the Company has devoted a substantial portion
of its efforts to product development, raising capital, and
building infrastructure, and, since January 2017, U.S.
commercialization. The Company has incurred operating losses and
has experienced negative cash flows from operations since its
inception. In July 2012, the Company realized initial revenue from
its planned principal operations. The Company recognized total
revenue of $0.7 million and $0.4 million for the three months ended
June 30, 2020 and 2019, respectively, and $1.5 million and $2.2
million for the six months ended June 30, 2020 and 2019,
respectively. The Company's revenue for the three months ended
June 30, 2020 were primarily due to reversing various reserves
related to revenue from customer incentive programs, swallow
guarantee, and returns reserves as a result of stopping all
commercial operations and underlying programs. However, the Company
has not yet established an ongoing source of revenue sufficient to
cover its operating costs and has funded its activities to date
almost exclusively from debt and equity financings.
Obalon said, "As reflected in the accompanying condensed
consolidated financial statements, the Company has a limited
operating history and the sales and income potential of the
Company's business are unproven. The Company has not been
profitable since inception, and as of June 30, 2020, its
accumulated deficit was $181.9 million. Since inception, the
Company has financed its operations primarily through private
placements of its preferred stock, the sale of common stock in its
IPO and in subsequent public offerings and private placements, and,
to a lesser extent, debt financing arrangements. As of June 30,
2020, the Company had cash and cash equivalents of $6.8 million.
The Company expects to continue to incur net losses for the
foreseeable future."
A full-text copy of the Form 10-Q is available for free at:
https://is.gd/GejrgA
About Obalon
Obalon Therapeutics, Inc. (NASDAQ:OBLN) -- http://www.obalon.com/
-- is a San Diego-based company focused on developing and
commercializing novel technologies for weight loss.
Obalon recorded a net loss of $23.68 million for the year ended
Dec. 31, 2019, compared to a net loss of $37.38 million for the
year ended Dec. 31, 2018. As of March 31, 2020, the Company had
$19.23 million in total assets, $8.16 million in total liabilities,
and $11.07 million in total stockholders' equity.
KPMG LLP, in San Diego, California, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
Feb. 27, 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.
OFFSHORE MARINE: Unsecureds to Recover 0.0025% of Claims
--------------------------------------------------------
Offshore Marine Contractors, Inc., submitted a Plan and a
Disclosure Statement.
The Restructuring proposed by the Debtor will provide substantial
benefits to the Debtor and its stakeholders, including, without
limitation, the following:
- The Restructuring will leave the Debtor's business intact and
substantially de-levered, providing for the reduction of a
substantial amount of debt and the issuance of the New Equity
Interests to those entities making a Secured Creditor
Contribution.
- The Debtor's significantly improved balance sheet will enable
the Reorganized Debtor to maintain operations on a profitable
basis.
- The Restructuring will also provide the basis moving forward
for the Reorganized Debtor to continue to do business with many
current vendors and suppliers providing economic contribution to
the vendor and supplier community.
- The Restructuring will provide recovery to certain Classes of
Claims that could expect no or limited recovery if the Debtor were
liquidated under chapter 7 of the Bankruptcy Code, or if the
Holders of Secured Claims were to exercise foreclosure rights.
Class 1 Bluehenge Secured Claim. This class is impaired with
estimated amount of claims of $41,187,477 of which $23,989,000 will
be allowed as a Secured Claim. Creditor may recover approximately
[100]% of Allowed Secured Claim. Bluehenge will retain its rights
in, to and upon the cash collateral constituting the Lucas Proceeds
in the amount of $2,559,000 and the Debtor will make monthly
payments to Bluehenge of interest at the rate of 3.25% per annum on
the outstanding balance until remitted to Bluehenge or used by the
Debtor. Of the remaining $21,430,000 of the total allowed Secured
Claim, the Debtor will pay as a debt obligation the sum of
$17,700,000 and the remaining $3,737,000 will constitute a Secured
Creditor Contribution and be entitled to a Pro Rata share of the
New Equity Interests. The remaining $17,198,477 of claims will be
treated as a Class 7 General Unsecured Claim.
Class 2 Caterpillar Secured Claim L/B Raimy Eymard, asserting
claims of $7,821,729, of which $5,450,000 will be allowed as a
Secured Claim under the Sale Treatment. The Creditor may recover
approximately [100]% of Allowed Secured Claim. The Plan proposes
alternative treatments:
* Sale Treatment: Caterpillar's collateral shall be sold for the
sum of $5,450,000 and Caterpillar shall receive the proceeds of the
sale as its Allowed Secured Claim.
* Retention Treatment: In the absence of the above-described
sale, Caterpillar's collateral shall be valued by the Court which
will determine the amount of its Allowed Secured Claim. Such
Allowed Secured Claim to bear interest at the rate of Wall Street
Journal Prime plus 2 and paid in equal monthly installments based
upon a 20-year amortization schedule with a maturity at 7 years.
Class 3 MRB Term Loans with claims totaling $3,335,264 are
impaired. Creditor may recover approximately 100% of the allowed
secured claim. MRB will maintain its liens in to and upon the
collateral securing the Allowed Class 3 Claims in the same rank and
priority as existed prepetition. On the Effective Date, the
Allowed Class 3 Claims will be treated as fully secured and MRB
will maintain its Liens in to and upon the MRB Collateral securing
the Allowed Class 3 Claims in the same rank and priority as existed
prepetition, and the documentation surrounding the Allowed Class 3
Claims shall not be modified.
Class 4 United Community Bank Secured Claim totaling $779,010 is
impaired. Creditor may recover approximately [100]% of Allowed
Secured Claim. The Debtor shall pay the Allowed Class 4 Claim in
equal monthly payments based upon a 20-year amortization schedule,
with maturity of such obligation fixed at five years from the
Effective Date. The Allowed Class 4 Claim will bear interest at
the rate of 6.75% per annum as provided in the note forming the
basis for the Allowed Class 4 Claim.
Class 6 Trade Claims Unsecured Claims arising from Ordinary Course
of Business in excess of $50,000 are impaired. The trade
claimants, owed $265,707, will recover approximately 100% of their
allowed claims. Reorganized Debtor will pay 100% of the principal
amount, without interest, of the Allowed Class 6 Claims in 8 equal
quarterly installments.
Class 7 Unsecured Claims which are not otherwise Classified assert
claims totaling $40,284,240. These creditors may recover
approximately [.0025]%. Holders shall be entitled to receive a pro
rata share of the Class 7 Fund.
Class 9 Equity Interests will be cancelled, extinguished and
discharged.
The Reorganized Debtor shall fund Cash Plan Distributions with Cash
on hand, which may include cash from operations, cash borrowings,
the MRB Line of Credit, the Shareholder Repayment, and/or Used
Lucas Proceeds authorized by Bluehenge to be used by the Debtor, if
any.
A full-text copy of the Disclosure Statement dated June 22, 2020,
is available at https://tinyurl.com/y9vd3nsl from PacerMonitor.com
at no charge.
Counsel for the Debtor:
Paul Douglas Stewart, Jr.
Brandon A. Brown
STEWART ROBBINS BROWN &
ALTAZAN, LLC
One American Place
Post Office Box 2348
301 Main Street, Suite 1640
Baton Rouge, LA 70821-2348
Telephone: (225) 231-9998
About Offshore Marine Contractors
Offshore Marine Contractors -- http://offshoremarine.net/-- is a
family-owned and operated company that provides offshore,
self-propelled and self-elevating liftboats for the petroleum
exploration and transportation industries.
Offshore Marine Contractors sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. E.D. La. Case No. 19-13253) on Dec. 4,
2019. In the petition signed by its president, Raimy Eymard, the
Debtor disclosed $32,345,576 in assets and $69,280,946 in debt.
Judge Meredith S. Grabill oversees the case.
The Debtor tapped Stewart Robbins & Brown, LLC as legal counsel;
Bohman Morse, LLC as special maritime counsel; Baldwin Haspel Burke
& Mayer, LLC as special tax counsel; Pepperman, Emboulas, Schwartz,
& Todaro, LLC as accountant; and Stout Risius Ross, LLC as
financial advisor.
OGGUSA INC: Aug. 20 Hearing on Paducah Property Sale Set
--------------------------------------------------------
Judge Gregory R. Schaaf of the U.S. Bankruptcy Court for the
Eastern District of Kentucky will convene a hearing on Aug. 20,
2020 at 9:00 a.m. (ET) to consider the sale by Oggusa, Inc. and
affiliates of the real property located in Paducah, Kentucky.
The objection deadline is Aug. 13, 2020.
The Sale Motion Hearing and deadline for filing objections to the
Sale Motion will be set by a separate Order and Notice for Hearing
on Sale Motion to be entered by the Court.
The notice period for the Sale Motion Hearing and the deadline for
filing objections to the Sale Motion is shortened upon the request
of the Debtors.
Counsel for Debtors:
James R. Irving, Esq.
April A. Wimberg, Esq.
Christopher B. Madden, Esq.
DENTONS BINGHAM GREENEBAUM LLP
3500 PNC Tower
101 South Fifth Street
Louisville, KY 40202
Telephone: (502) 587-3606
Facsimile: (502) 540-2215
E-mail: james.irving@dentons.com
april.wimberg@dentons.com
chris.madden@dentons.com
The bankruptcy case is In re Oggusa, Inc. (Bankr. E.D. Ky. Case No.
20-50133-grs). The Debtor's case is jointly administered with that
of its affiliates.
PIER 1 IMPORTS: Taps Jones Lang LaSalle as Real Estate Broker
-------------------------------------------------------------
Pier 1 Imports, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to employ
Jones Lang LaSalle Brokerage, Inc.
Debtors require the services of a real estate broker to assist in
the sale of their property located at 2200 Heritage Parkway,
Mansfield, Texas.
Jones Lang will get 4 percent of the gross sales price upon closing
of the sale.
Todd Burnette, a managing director at Jones Lang, 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:
Todd Burnette
Jones Lang LaSalle Brokerage, Inc.
201 Main St., Suite 500
Fort Worth, TX 76102
Telephone: (817) 334-8100
(817) 334-8105
Email: todd.burnette@am.jll.com
About Pier 1 Imports
Founded with a single store in 1962, Pier 1 Imports, Inc. (OTCPK:
PIRRQ) is an omni-channel retailer of unique home decor and
accessories. Its products are available through approximately 930
Pier 1 stores in the U.S. and online at pier1.com. Visit
http://www.pier1.comfor more information.
Pier 1 Imports and seven affiliates sought Chapter 11 protection
(Bankr. E.D. Va. Lead Case No. 20-30805) on Feb. 17, 2020, to
pursue a sale of their assets. Pier 1 Imports disclosed $426.6
million in assets and $258.3 million in debt as of Jan. 2, 2020.
Judge Kevin R. Huennekens oversees the cases.
A&G Realty Partners is assisting Pier 1 Imports with its previously
announced store closures and lease modifications. Pier 1 Imports
landlords are encouraged to contact A&G Realty Partners through its
website, http://www.agrep.com/
Kirkland & Ellis LLP and Osler, Hoskin & Harcourt LLP serve as
legal advisors to Debtors in the U.S. and Canada, respectively.
Debtors have tapped AlixPartners, LLP as restructuring advisor,
Guggenheim Securities LLC as investment banker, and Epiq Bankruptcy
Solutions as claims agent.
PREMIER ON 5TH: Court Confirms Chapter 11 Plan
----------------------------------------------
Judge Caryl E. Delano has ordered that the Disclosure Statement of
Premier on 5th, LLC, is approved on a final basis.
The Plan is confirmed in all respects, subject to the following
modification announced by the Debtor at the Confirmation Hearing:
Article 8, Means of Execution is revised and restated to state
“The Debtor intends to sell the real property and enhanced
entitlement rights to the real property by auction, no later than
August 31, 2020, with the proceeds from the sale to be used to fund
the Plan.”
The provisions of the Plan, and any amendments thereto, and of this
Confirmation Order are binding on the Debtor, each Holder of a
Claim against or Interest in the Debtor and each party in interest
in this Chapter 11 Case, whether or not the Claim or Interest is
impaired under the Plan and whether or not the Holder of such Claim
or Interest has accepted the Plan, filed a claim or whether the
claims have been scheduled, allowed or is allowable.
There shall be a post confirmation Status Conference hearing on
August 10, 2020 at 1:30 PM. The Status Conference hearing will be
held in Tampa, FL – Courtroom 9A, Sam M. Gibbons United States
Courthouse, 801 N. Florida Avenue before the Honorable Caryl E.
Delano, United States Bankruptcy Judge.
About Premier on 5th, LLC
Premier on 5th, LLC, owns in fee simple a real property in
Sarasota, Fla. Premier on 5th sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-12098) on Dec.
27, 2019. At the time of the filing, the Debtor disclosed
$1,195,000 in assets and $494,132 in liabilities. Timothy W.
Gensmer, P.A., is the Debtor's legal counsel.
RED ROSE INC: Seeks to Hire Ordinary Course Professionals
---------------------------------------------------------
Red Rose, Inc., and its debtor-affiliates seek authority from the
US Bankruptcy Court for the District of Nevada to employ, and
compensate certain professionals utilized by Debtors in the
ordinary course of business.
The Ordinary Course Professionals will not be involved in the
administration of these Chapter 11 Cases. Rather, they will provide
services in connection with Debtors' ongoing business operations
and financial affairs.
The Ordinary Course Professionals are:
ADR Services
225 Broadway, Suite 1400
San Diego, CA 92101
Monthly Fee: $1,000
Case Anywhere
21860 Burbank Blvd, Suite 125
Woodland Hills, CA 91367
Monthly Fee: $1,000
Castle Dekker & Bellagamba
30 Oak Ct.
Danville, CA 94526
Monthly Fee: $2,000
Cole, Scott,
Kissane 222 Lakeview Ave, Suite 120,
W. Palm Beach, FL 33401
Monthly Fee: $2,000
CourtCall
6383 Arizona Circle
Los Angeles, CA 90045
Monthly Fee: $2,000
File & Serve Xpress, LLC
500 E. John Carpenter FRWY, Suite 250
Irving, TX 75062
Monthly Fee: $1,000
JAMS
P.O. Box 845402
Los Angeles, CA 90084
Monthly Fee: $1,000
Johannes Moehnle
1082 Nielsen Lane
Livermore, CA 94550
Monthly Fee: $18,333.33
Law Office of Erin Eckert
P.O. Box 631494
Houston, TX 77263
Monthly Fee: $1,000
Law Office of Matthew
Hodroff 113 W G Street, Suite 615
San Diego, CA 92101
Monthly Fee: $1,000
Law Office of Sam Karimzadeh
1592 Trevor Dr.
San Jose, CA 95118
Monthly Fee: $1,000
Legal Document Server
7162 Beverly Blvd, Suite 508
Los Angeles, CA 90036
Monthly Fee: $500
Lewis Brisbois Bisgaard & Smith
633 West 5th St. Ste. 4000
Los Angeles, CA 90071
Monthly Fee: $2,000
Luh & Associates
8987 W. Flamingo Rd, Suite 100
Las Vegas, NV 89147
Monthly Fee: $1,000
Morgan, Lewis & Bockius LLP
1400 Page Hill Rd.
Palo Alto, CA 94304
Monthly Fee: $1,000
Moss Adams
101 Second Street Suite 900
San Francisco, CA 94105
Monthly Fee: $50,000
OgleTree Deakins
50 International Drive
Patewood IV, Suite 200
Greenville, SC 29615
Monthly Fee: $1,000
OneLegal, LLC
1400 N McDowell Blvd, Suite 300
Petaluma, CA 94954
Monthly Fee: $500
Wheels of Justice
52 Second St., 3rd Floor
San Francisco, CA 94105
Monthly Fee: $4,000
Woodruff Dispute Resolution Center
3000 F. Danville Blvd, Suite #111
Alamo, CA 94507
Monthly Fee: $1,000
About Red Rose Inc.
Red Rose, Inc., its affiliates and its parent company Petersen-Dean
Inc., a full-service, privately-held roofing and solar company,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Nev. Lead Case No. 20-12814) on June 11, 2020. At the time of
the filing, Red Rose and Petersen-Dean each disclosed assets of
between $10 million and $50 million and liabilities of the
samerange.
Judge Mike K. Nakagawa oversees the cases. Debtors are represented
by Fox Rothschild, LLP.
RGN-CHAPEL HILL: Case Summary & Unsecured Creditor
--------------------------------------------------
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
RGN-Chapel Hill II, LLC 20-11910
3000 Kellway Drive
Suite 140
Carrollton, TX 75006
RGN-Chicago XVI, LLC 20-11916
3000 Kellway Drive
Suite 140
Carrollton, TX 75006
Business Description: The Debtors are primarily engaged in
renting and leasing real estate
properties.
Chapter 11 Petition Date: August 2, 2020 (20-11910)
August 3, 2020 (20-11916)
Court: United States Bankruptcy Court
District of Delaware
Debtors' Counsel: Ian J. Bambrick, Esq.
Patrick A. Jackson, Esq.
FAEGRE DRINKER BIDDLE & REATH LLP
222 Delaware Avenue, Suite 1410
Wilmington, Delaware 19801
Tel: (302) 467-4200
Email: Ina.Bambrick@faegredrinker.com
Patrick.Jackson@faegredrinker.com
Debtors'
Financial
Advisor: ALIXPARTNERS
Debtors'
Restructuring
Advisor: DUFF & PHELPS, LLC
RGN-Chapel Hill's
Total Assets as of June 30, 2020: $512,392
RGN-Chapel Hill's
Total Liabilities as of June 30, 2020: $2,921,544
RGN-Chicago XVI's
Total Assets as of June 30, 2020: $237,015
RGN-Chicago XVI's
Total Liabilities as of June 30, 2020: $2,461,435
The petitions were signed by James S. Feltman, responsible
officer.
RGN-Chapel Hill II, LLC listed Mattie Equity LLC as its sole
unsecured creditor holding a claim of $117,759.
RGN-Chicago XVI, LLC listed Merchandise Mart LLC as its sole
unsecured creditor holding a claim of $82,277.
The Debtors will seek joint administration of their Chapter 11
cases, for procedural purposes only pursuant to Rule 1015(b) of the
Fedral Rules of Bankrupty Procedure, under the case number assigned
to the Chapter 11 case of RGN-Columbus IV, LLC (D. Del. Case No.
20-11894).
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://is.gd/SUnR5j
https://is.gd/9tStcp
RGV SMILES: Seeks to Tap Joyce W. Lindauer as Legal Counsel
-----------------------------------------------------------
RGV Smiles by Rocky L. Salinas D.D.S. P.A. seeks approval from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
Joyce W. Lindauer Attorney, PLLC as its legal counsel.
The firm will assist Debtor in the preparation of its plan of
reorganization and will provide other services in connection with
its Chapter 11 case.
The hourly rates for the firm's attorneys and paraprofessionals are
as follows:
Joyce W. Lindauer $395
Paul B. Geilich $325
Guy H. Holman $205
Dian Gwinnup $125
Paralegals and legal assistants $65 - $125
The firm has been paid a retainer of $11,717, which included the
filing fee of $1,717.
Joyce Lindauer, Esq., disclosed in court filings that her firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Joyce W. Lindauer, Esq.
Paul B. Geilich, Esq.
Guy H. Holman, Esq.
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
Email: joyce@joycelindauer.com
About RGV Smiles by Rocky L. Salinas
RGV Smiles by Rocky L. Salinas D.D.S. P.A., a dental services
provider in Pharr, Texas, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-70209) on June 30,
2020. At the time of the filing, the Debtor had estimated assets
of between $100,000 and $500,000 and liabilities of between $10
million and $50 million. Judge Eduardo V. Rodriguez oversees the
case. Debtor is represented by Joyce W. Lindauer Attorney, PLLC.
ROBERTS PROPERTY: Plan to be Funded by Affiliates' Business Income
------------------------------------------------------------------
Roberts Property & Holdings LLC filed an Amended Disclosure
Statement under the provisions of chapter 11 dated June 26, 2020.
Class 1 - BBVA USA ("Class 1") is comprised of the secured claims
and unsecured claims of BBVA USA ("BBVA"). The BBVA Secured Claim
shall be reamortized over 360 months with interest at 5.00% per
annum and a balloon payment due in the 121 month. Payments shall be
st made monthly. The estimated monthly payment is $8,176.02. The
BBVA Unsecured Claim shall be paid in full without interest. Debtor
will pay $2,000.00 each month on the BBVA Unsecured Claim.
Kendall Holdings, LLC is the sole person or entity holding an
ownership interest in the Debtor. The Debtor is a Florida Limited
Liability Company and Kendall Holdings, LLC is the sole member and
manager of the Debtor. The sole member of Kendall Holdings LLC is
Louie F. Wise, III. The rights of the member in this class shall
remain unchanged and unmodified.
Louie F. Wise, III is also holds a 100% ownership in three other
affiliated business entities. Those business entities are as
follows: Climate Control Mechanical Services, Inc. ; Base 3 LLC ;
and, Facility Performance, LLC (all three entities are collectively
referred to as the “Affiliates”). The Debtor will be funded by
the income of the Affiliates.
A full-text copy of the amended disclosure statement dated June 26,
2020, is available at https://tinyurl.com/y9plxjk2 from
PacerMonitor at no charge.
Attorney for Debtor:
RICHARD A. PERRY P.A.
RICHARD A. PERRY
820 East Fort King Street
Ocala, FL 34471-2320
Tel: 352-732-2299
E-mail: richard@rapocala.com
About Roberts Property & Holdings
Roberts Property & Holdings, LLC sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03409) on
Sept. 9, 2019. At the time of the filing, the Debtor disclosed
assets of between $1,000,001 and $10 million and liabilities of the
same range. The case is assigned to Judge Jerry A. Funk. The
Debtor is represented by Richard A. Perry, Esq., at Richard A.
Perry P.A.
ROCKPORT DEVELOPMENT: Hires TruLine Realty as Real Estate Agent
---------------------------------------------------------------
Rockport Development, Inc., seeks authority from the U.S.
Bankruptcy Court for the Central District of California to employ
Sierus Erdelyi of TruLine Realty as its real estate agent.
TruLine will market and sell the real properties located at:
a. 1209 6th Avenue, Los ANgeles, California;
b. 12416 Allin Street, Los Angeles, California; and
c. 3500 Moore Street, Los Angeles, California.
TruLine's compensation is equal to 5 percent of the purchase price,
provided that the Estate nets at least such like amount.
TruLine does not hold or represent any interest adverse to that of
the Debtor or the Estate and is a disinterested person within the
meaning of 11 U.S.C. Sec. 101(14).
The agent can be reached through:
Sierus Erdelyi
TruLine Realty
2999 Overland Ave.
Los Angeles, CA 90064
Phone: (310) 564-6637
About Rockport Development
Rockport Development, Inc., a company based in Irvine, Calif.,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
C.D. Cal. Case No. 20-11339) on May 7, 2020. On June 11, 2020,
Rockport's affiliate Tiara Townhomes LLC filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 20-11683). Judge Scott C.
Clarkson oversees the cases, which are jointly administered under
Case No. 20-11339.
At the time of the filing, Rockport was estimated to have $10
million to $50 million in both assets and liabilities. Tiara
Townhomes LLC disclosed assets of between $1 million and $10
million and liabilities of the same range.
Debtor has tapped Marshack Hays, LLP as its legal counsel, and
Michael VanderLey of Force Ten Partners, LLC as its chief
restructuring officer.
ROCKPORT DEVELOPMENT: Taps Sand and Sea Realty as Real Estate Agent
-------------------------------------------------------------------
Rockport Development, Inc., seeks authority from the U.S.
Bankruptcy Court for the Central District of California to employ
Anna Marie Barnard of Sand and Sea Realty as its real estate
agent.
The agent will market and sell the real property located at and
commonly known as 630 Gage Drive, San Diego, California.
The agent will receive, upon consummation of a sale, a commission
in an amount equal to 5 percent of the purchase price, provided
that the Estate nets at least such like amount.
Ms. Barnard assures the court that she does not hold or represent
any interest adverse to that of Debtor or the Estate and that she
is a disinterested person within the meaning of 11 U.S.C. Section
101(14).
The agent can be reached through:
Sierus Erdelyi
TruLine Realty
2999 Overland Ave.
Los Angeles, CA 90064
Phone: (310) 564-6637
About Rockport Development
Rockport Development, Inc., a company based in Irvine, Calif.,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
C.D. Cal. Case No. 20-11339) on May 7, 2020. On June 11, 2020,
Rockport's affiliate Tiara Townhomes LLC filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 20-11683). Judge Scott C.
Clarkson oversees the cases, which are jointly administered under
Case No. 20-11339.
At the time of the filing, Rockport was estimated to have $10
million to $50 million in both assets and liabilities. Tiara
Townhomes LLC disclosed assets of between $1 million and $10
million and liabilities of the same range.
Debtor has tapped Marshack Hays, LLP as its legal counsel, and
Michael VanderLey of Force Ten Partners, LLC as its chief
restructuring officer.
ROOFTOP GROUP: Amended Plan Disclosures Filed by UCC, Trustee
-------------------------------------------------------------
Rooftop Group International Pte. Ltd., et al., have a Liquidating
Plan proposed by their Chapter 11 Trustee and their Official
Committee of Unsecured Creditors.
Based on Rooftop International's post-bankruptcy assertion of the
separateness of Rooftop USA and Rooftop Services' assets from its
own, the Bankruptcy Court confirmed after an August 16, 2019
hearing that the automatic stay did not apply to prevent creditor
action against Rooftop USA, Rooftop Services, or any other
non-debtor affiliates of Rooftop International. In a stated effort
to protect and preserve the assets of Rooftop USA and Services from
further dissipation, creditor Triumphant Gold Limited instituted an
action in Texas state court when it filed its Original Petition and
Application for Temporary Restraining Order, Cause No. DC-19-12093,
on August 19, 2019 in the 101st Judicial District for Dallas County
(the "State Court Action"). On the same date, a Temporary
Restraining Order was issued in the State Court Action to protect
the assets of Rooftop USA and Services. Following the service of
initial discovery requests in the State Court Action, on August 25,
2019, Rooftop USA and Rooftop Services each filed voluntary
petitions under chapter 7 of the United States Bankruptcy Code.
The Chapter 7 Trustee for both Rooftop Services and Rooftop USA has
undertaken to collect the books and records of the Rooftop USA and
Rooftop Services debtors, as well as investigate potential assets,
including remaining accounts receivable that may be due and owing
to the Debtors.
On January 15, 2020, creditor Triumphant Gold Limited filed its
Unopposed Motions for Distribution of Property Pursuant to
Bankruptcy Rule 6007 in the Rooftop USA and Rooftop Services cases
based on its alleged secured claim to proceeds from accounts
receivable. On February 14, 2020, the Court granted the Motions
(which Order was later amended to reflect updated amounts received
into the bankruptcy estates).
No Release by United States Government, Agencies, State or Local
Authorities. Nothing in the Confirmation Order or the Plan shall
effect a release of any claim by the United States Government or
any of its agencies or any state and local authority whatsoever,
including without limitation any claim arising under the Internal
Revenue Code, the environmental laws or any criminal laws of the
United States or any state and local authority against any party or
person, nor shall anything in the Confirmation Order or the Plan
enjoin the United States or any state or local authority from
bringing any claim, suit, action, or other proceedings against any
party or person for any liability of such persons whatever,
including without limitation any claim, suit or action arising
under the Internal Revenue Code, the environmental laws or any
criminal laws of the United States or any state and local authority
against such persons, nor shall anything in the Confirmation Order
or the Plan exculpate any party or person from any liability to the
United States Government or any of its agencies or any state and
local authority whatsoever, including any liabilities arising under
the Internal Revenue Code, the environmental laws or any criminal
laws of the United States or any state and local authority against
any party or person.
A full-text copy of the Disclosure Statement dated June 22, 2020,
is available at https://tinyurl.com/y7c6xr66 from PacerMonitor.com
at no charge.
Counsel for Creditors' Committee:
Judith W. Ross
Rachael L. Smiley
ROSS & SMITH, PC
700 North Pearl Street, Suite 1610
Dallas, Texas 75201
Telephone: 214-377-7879
Facsimile: 214-377-9409
Email: judith.ross@judithwross.com
rachael.smiley@judithwross.com
The Chapter 11 Trustee:
Daniel J. Sherman
SHERMAN & YAQUINTO, L.L.P.
509 N. Montclair Avenue
Dallas, TX 75208-5498
Telephone: 214-942-5502
Facsimile: 214-946-7601
Email: Corky@syllp.com
James E. Van Horn
BARNES & THORNBURG LLP
1717 Pennsylvania Avenue NW, Suite 500
Washington, D.C. 20006-4623
Telephone: 202-371-6351
Facsimile: 202-289-1330
Email: jvanhorn@btlaw.com
About Rooftop Group Int'l
Rooftop Group International Pte. Ltd. is a private limited company
organized under the laws of Singapore. It was formed to hold
certain intellectual property assets, including registered
trademarks and patents, relating to the manufacture and sale of
hobby-grade drones under the name Propel RC(R). At present, it has
no operations and has no employees, and its remaining assets are
composed almost entirely of certain patents, trademarks, and other
intellectual property. In addition, it licenses certain of its
trademarks to Amax Industrial Group China Co, Ltd., under a
nonexclusive license agreement.
Certain of Rooftop Group's prepetition secured creditors commenced
collection actions against the Debtor in Singapore courts
pertaining to prepetition debt obligations under which the Debtor
was either a primary obligor or guarantor. The Debtor's
intellectual property assets are not encumbered by any lien or
security interest; however, a portion of the outstanding equity in
the Debtor is pledged to secure repayment of certain of the
Debtor's prepetition obligations and certain prepetition creditors
assert liens on certain asset classes other than intellectual
property.
To preserve the value of its intellectual property assets for the
benefit of all its unsecured creditors, on April 30, 2019, the
Debtor filed a voluntary petition for relief under chapter 11 of
the Bankruptcy Code (Bankr. N.D. Tex. Case No. 19-31443). In the
petition signed by Darren Matloff, director, the Debtor was
estimated to have $1 million to $10 million in assets and $50
million to $100 million in liabilities.
The Hon. Harlin DeWayne Hale oversees the case.
The Debtor is represented by Reed Smith LLP.
The Office of the U.S. Trustee on June 13, 2019, appointed three
creditors to serve on an official committee of unsecured creditors
in the Chapter 11 case. The committee is represented by Barnes &
Thornburg LLP.
RUBY PIPELINE: Moody's Cuts CFR to B1, Outlook Negative
-------------------------------------------------------
Moody's Investors Service downgraded Ruby Pipeline, LLC's Corporate
Family Rating to B1 from Ba2, Probability of Default Rating to
B1-PD from Ba2-PD and senior unsecured notes rating to B1 from Ba2.
The rating outlook remains negative.
"The downgrade and negative rating outlook reflect Ruby's
increasing re-contracting risk in 2021 when its non-PG&E contracts
mature, and the weak pricing and volume environment for such
re-contracting," said Amol Joshi, Moody's Vice President and Senior
Credit Officer. "The company also faces rising refinancing risk
amid cash flow uncertainty and weak liquidity as its senior notes
mature in 2022."
Downgrades:
Issuer: Ruby Pipeline, LLC
Corporate Family Rating, Downgraded to B1 from Ba2
Probability of Default Rating, Downgraded to B1-PD from Ba2-PD
Senior Unsecured Regular Bond/Debenture, Downgraded to B1 (LGD3)
from Ba2 (LGD3)
Outlook Actions:
Issuer: Ruby Pipeline, LLC
Outlook, Remains Negative
RATINGS RATIONALE
Ruby's B1 CFR is challenged by the weak credit quality of its
principal shipper Pacific Gas & Electric Company, which comprises
about 30% of Ruby's revenue and whose parent PG&E Corporation is
rated Ba2 stable, high and increasing re-contracting risk in 2021
when its non-PG&E contracts mature, and the weak pricing and volume
environment for such re-contracting.
Ruby is supported by natural gas pipeline transportation contracts
with non-PG&E shippers having good weighted-average credit quality
for about 70% of its revenue through mid-2021. As Ruby manages its
maturing contracts, it will be imperative that committed contract
cash flow and debt are managed to ensure continued leverage and
coverage metrics consistent with the credit profile. As existing
contracts mature, if Ruby executes firm transportation contracts
from the larger producers in the Rocky Mountains, it will likely be
at reduced rates as Canadian natural gas remains competitive.
Ruby's owners, Kinder Morgan, Inc. (KMI, Baa2 stable) and Pembina
Pipeline Corporation (unrated), have the ability to provide
support, but Pembina has a preferred ownership interest relative to
KMI's ownership interest. At this point, the partners do not have
any commitment to provide future financial support to Ruby, beyond
the existing term loan committed payments.
Ruby has weak liquidity. The company's cash flow from operations
will fall in 2021 as non-PG&E contracts expire in mid-2021, while a
material portion of its cash flow will be used for required debt
payments in 2021. The remaining cash flow will likely be
distributed, but it should still be insufficient to fully cover
Pembina's preferred distribution. Because it's a relatively new
pipeline, maintenance capital expenditures are minimal at less than
$1 million per year.
Ruby does not have a revolving credit facility. The company has a
$62.5 million term loan maturing in March 2021 which is scheduled
to be repaid in equal quarterly payments over one year, using a
committed subordinated debt facility provided by subsidiaries of
the partners that should grow to $250 million and mature in 2026.
The company also had $606 million of senior unsecured notes at
March 31, 2020, with scheduled payments of about $88 million in
2020, $44 million in 2021 and final maturity of $475 million in
April 2022. Ruby is expected to remain in compliance with its
financial covenant of debt to EBITDA less than 5x under the term
loan and 5.5x under the senior unsecured notes, but covenant
cushion will fall after mid-2021 as the non-PG&E contracts expire.
Ruby's senior unsecured notes are rated B1, consistent with the B1
CFR, despite its senior claim to the subordinated debt (unrated)
from the partners in the capital structure. The B1 rating for the
senior unsecured notes is more appropriate than the rating
suggested by Moody's Loss Given Default for Speculative-Grade
Companies methodology because the support provided by the
subordinated debt is reflected in the CFR. The term loan (unrated)
is pari passu with the notes.
The negative rating outlook reflects Ruby's significant cash flow
uncertainty and weak liquidity while its senior notes mature in
2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ruby's ratings could be downgraded if there is a significant change
to its contract terms with PG&E, contracting with non-PG&E shippers
fails to sufficiently materialize, the company is unable to
refinance its debt in a timely manner, or if liquidity weakens
further.
Ruby's ratings could be upgraded if contract counterparty risk and
tenor improve, the company achieves adequate liquidity while
mitigating refinancing risk and maintains leverage below 5x.
The principal methodology used in these ratings was Natural Gas
Pipelines published in July 2018.
Ruby Pipeline, LLC is owned equally by Kinder Morgan, Inc. (Baa2
stable), one of the largest midstream energy companies in North
America, and Pembina Pipeline Corporation (unrated), a diversified
energy infrastructure company based in Calgary, Alberta. A
subsidiary of Kinder Morgan, Inc. operates the company's sole
asset, the Ruby Pipeline, a 1,500 MMBtu per day natural gas
pipeline that entered service in July 2011 and runs 680 miles from
Opal, Wyoming to Malin, Oregon.
RYFIELD PROPERTIES: Selling Sequim Real Property & Logging Eqpt.
----------------------------------------------------------------
Ryfield Properties, Inc. asks the U.S. Bankruptcy Court for the
Western District of Washington to authorize it (i) to sell the real
property of the estate commonly known as 1006 Lemon Road, Sequim,
Washington to Tim L. Colwell for $235,000, and (ii) to employ James
G. Murphy, Inc. and Ritchie Bros as auctioneers to sell equipment
previously used in its logging operations that it no longer needed
for the quarry operations.
The Debtor has encountered a wide panoply of challenges on it path
to reorganization. Two real property sales have fallen through and
a dispute with the pit shoot company has led to an unforeseen delay
in obtaining the inventory needed to generate income. Accordingly,
the Debtor files the instant combined motion to raise the capital
that is critical to its survival.
By the Motion, it asks authority to: (1) sell real property of the
estate in order to generate funds: (a) for distribution to the
Debtor's largest secured creditor, First Federal Savings & Loan
Association which claim the Debtor seeks to allow, and (b) for the
Debtor's use of a portion of the net sale proceeds which are First
Federal's cash collateral to effect (i) the pit shoot necessary for
its quarry operations; and (ii) to pay funds to the Debtor’s
landlord; and in exchange therefore, providing First Federal
adequate protection including a replacement lien; and (2) employ
James G. Murphy, Inc. and Ritchie Bros as auctioneers to sell
equipment previously used in the Debtor's logging operations which
equipment is no longer needed for the quarry operations.
Prior to the Petition Date, on Feb. 2020, the Debtor solicited the
assistance of Pat and Marc Thomsen, who are agents of Coldwell
Banker Uptown Realty, a licensed Washington real estate broker, in
determining the value of the Real Property. The Agents inspected
the Real Property and advised the Debtor regarding the estimated
market value of the Property. On June 25, 2020, the Debtor filed
its Application to Employ Coldwell Banker Uptown Realty and Agents
Pat and Marc Thomsen as Real Estate Broker, and the notice thereon.
The hearing on Application is set for July 16, 2020.
The Agents have extensive experience in marketing and selling real
properties and, based on an investigation of surrounding property
values and the interest generated by the listing, the Agents
believe the proposed purchase price for the Real Property
represents current fair market value. The Agents have listed the
Property for sale on the North West Multiple Listing Service and
the Olympic Listing Service The listing is available on various
real estate websites. They have received and responded to
inquiries regarding the Real Property and received only one
reasonable offer for the Real Property. The offer represents fair
market value of the Real Property.
The Buyer has offered to purchase the Real Property for a purchase
price of $235,000. The negotiations with the Buyer were at
arms'-length and the Buyer is not an insider of the Debtor.
The Debtor asks to allow the secured claim of First Federal which
is based on documents including: (i) March 28, 2019 - $290,000
Promissory Note, (ii) March 28, 2019 Commercial Security Agreement,
(iii) March 28, 2019 Promissory Note $150,000, and (iv) March 28,
2019 Deed of Trust.
According to the Preliminary Report prepared by First American
Title Co. with an effective date of June 26, 2020, the Real
Property is encumbered by the Deed of Trust in favor of First
Federal which Deed of Trust secures a March 28, 2019 Promissory
Note in the face amount of $150,000 and, by way of its cross
collateralization provision, a March 28, 2019 Promissory Note in
the face amount of $290,000. The Debtor asks to pay the net
proceeds of the Real Property sale on the secured claim of First
Federal and to use a portion of the net proceeds which constitute
First Federal's cash collateral for necessary operating expenses.
The Debtor asks authority to use $36,000 of the Real Property net
proceeds to pay $16,000 for the pit shoot and $20,000 to the
landlord. It proposes to grant First Federal an adequate
protection lien on unencumbered real property of the estate located
at 91 Marshall Road Sequim, Washington.
The Debtor asks to employ Ritchie Bros. pursuant to the terms of
the Multiple Channel Sales Agreement ("MCS Agreement") to auction a
Hyundai Model: Robex 320LC-9 ("Log Loader"). The Debtor has
selected Ritchie Bros. to auction the Log Loader because of its
significant experience with logging equipment and because the Log
Loader is already located at Ritchie Bros and it would be difficult
and expensive to move the item to another site. Ritchie Bros
represents no interest adverse to the estate and is a disinterested
party.
One piece of equipment that the Debtor proposes to sell is a
Caterpillar 325(d) which is currently located at Ritchie Bros. The
Debtor also asks authority, in its discretion, to sell the CAT
directly to Ritchie Brothers in lieu of auction of the CAT because
the CAT is a large piece of equipment that is costly to move.
Ritchie Bros has offered $92,500 to purchase the CAT. The Debtor
is in the process of investigating whether this offer is fair and
reasonable in light of the circumstances.
Selling the CAT directly to Ritchie would save significant costs
because the Debtor would not have to pay a commission or the costs
to haul the CAT. Accordingly, the Debtor is asking authority, in
its discretion, to either include the CAT in the auctions
referenced herein or to sell the CAT directly to Ritchie Bros. free
and clear of liens claims and interests for an amount which is no
less than $91,500.
The Debtor also asks authority to retain James G. Murphy, Inc. as
auctioneer to auction equipment set forth on Schedules A and B. It
proposes to compensate Murphy pursuant to the terms of the
Auctioneer Engagement Agreement. The terms state that the Debtor
will compensate Murphy Auctioneers on a 5% commission basis. The
terms also provide that the buyer will pay a 13% buyer's premium.
The Debtor asks authority to cause the auction of the equipment by
Ritchie Bros. and by Murphy free and clear of liens, claims and
interests with all liens, claims and interests attaching to the
auction proceeds in the same order and priority and with the same
validity that they attached to the equipment.
The Debtor asks to sell the Real Property free and clear of liens,
claims and interests, with liens, claims and interests attaching to
the sale proceeds.
The Debtor is informed by the Estate's accountant that there will
likely be no tax liability to the Estate from the sale of the
Property.
Given the grave need for use of cash collateral in order to
complete the pit shoot and restart the Debtor's operations, it is
imperative that the Real Property sale close as soon as possible.
The Debtor therefore asks waiver of the stay under Bankruptcy Rule
6004(h).
As set forth, the Debtor's various attempts to procure agreement by
the pit shoot companies or necessary cash to affect the pit shoot
and this reorganization process have each fallen through to date.
It therefore is in immediate need of use of cash collateral.
The Debtor proposes to use $36,000 to pay for the pit shoot
($16,000) and to pay the landlord ($20,000) and to provide First
Federal adequate protection as follows:
a. Marilee Phillips will agree in writing to no further
payment until completion of the sale of equipment sought by the
motion, except for monthly royalty payment derived from rock sales;
and
b. First Federal will be granted a replacement lien in the
real property commonly known as 91 Marshall Road, Sequim
Washington.
The Debtor asks to auction the (i) Log Loader, (ii) Additional
Equipment free and clear of liens, claims and encumbrances, with
any claims against such equipment attaching to the sale proceeds.
The equipment is encumbered as follows:
a. Hyundai R320LC-HC Log Loader - De Lage Landen Financial
Services (approx. $12,000)
b. John Deere 2154 Log Loader - John Deere Financial Corp.
(approx. $64,000)
c. All Equipment - First Federal Savings and Loan (approx.
$417,971)
d. All Equipment - National Funding (approx. $70,000)
e. 2008 Kobelko SK350 Log Loader - CIT (approx. $40,000, total
balance for all equipment secured)
f. Keto 870 Harvester Head and Computer Kit - CIT (approx.
$40,000, total balance for all equipment secured)
About Ryfield Properties
Ryfield Properties, Inc. is a privately held company in the
quarrying business. The company sought protection under Chapter 11
of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 20-11360) on May
7, 2020. The petition was signed by Katy Rygaard, its principal.
At the time of filing, the Debtor was estimated to have $1 million
to $10 million in assets and liabilities. Hon. Christopher M.
Alston oversees the case. The Debtor is represented by Faye C.
Rasch, Esq., at Law Office of Faye C. Rasch.
SALUBRIO LLC: Trustee Taps Spencer Fane as Special Counsel
----------------------------------------------------------
Eric Terry, the court-appointed Subchapter V trustee for Salubrio,
LLC, seeks approval from the U.S. Bankruptcy Court for the Western
District of Texas to employ Spencer Fane, LLP as special counsel.
The firm's services will include:
(a) Analysis of healthcare compliance and regulatory issues;
(b) Analysis, negotiation and collection of accounts
receivable;
(c) Analysis and, if directed by the trustee, litigation of
perfection and priority issues related to secured and purportedly
secured claims;
(d) Analysis of issues and claims related to non-debtor
affiliated entities and insiders; and
(e) Analysis of and negotiation of a plan of liquidation.
Spencer Fane's hourly rates are as follows:
Partners and Of Counsel $320 - $725
Associates $260 - $410
Paralegals $150 - $310
The hourly rates for the firm's attorneys who will be providing the
services are as follows:
Sean McKenna $600
Stacy Harper $480
Eric M. Van Horn $480
Eric Van Horn, Esq., at Spencer Fane, 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:
Eric M. Van Horn, Esq.
Spencer Fane LLP
2200 Ross Avenue, Suite 4800 West
Dallas, TX 75201
Telephone: (214) 459-5895
Facsimile: (214) 750-3612
Email: ericvanhorn@spencerfane.com
About Salubrio LLC
Salubrio, LLC, which conducts business under the name Brio San
Antonio, is a medical diagnostic imaging center in San Antonio,
Texas. It offers patients innovative and timely onsite technology
for musculoskeletal and traumatic brain injury diagnostics.
Salubrio specializes in weight-bearing MRI installed by Esaote USA.
For more information, visit https://salubriomri.com
Salubrio sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D. Texas Case No. 20-50578) on March 11, 2020. At the
time of the filing, Debtor disclosed assets of between $1 million
and $10 million and liabilities of the same range. Judge Ronald B.
King oversees the case.
Debtor has tapped the Law Offices of Martin Seidler as its legal
counsel, and M B Lawhon Law Firm, PLLC as its special counsel.
Eric Terry was appointed as Subchapter V trustee for Debtor. The
trustee has tapped Eric Terry Law, PLLC as his bankruptcy counsel,
and Spencer Fane, LLP as his special counsel.
SAN YSIDRO SCHOOL: S&P Cuts GO Bond Rating to BB+; Outlook Negative
-------------------------------------------------------------------
S&P Global Ratings lowered its underlying rating (SPUR) to 'BBB-'
from 'BBB+' on San Ysidro School District, Calif.'s outstanding
general obligation bonds, as well as its underlying rating (SPUR)
to 'BB+' from 'BBB' on the district's certificates of participation
outstanding. The outlook is negative.
"The rating action reflects our view of the district's recent and
projected deficit spending, with current projections assuming a
deterioration in available reserves to a negative level in the next
two fiscal years," said S&P Global Ratings credit analyst Alyssa
Farrell. "The negative outlook reflects our opinion that there is
at least a one-in-three chance that we could take an additional
negative rating action if the district is unable to implement a
reasonable plan to achieve operational balance within the outlook
horizon, which is generally up to two years."
San Ysidro School District's current superintendent and chief
business official joined the district in mid-2018 after working for
a number of years at neighboring school districts. Since joining
the district, the new administration has hired an external business
consultant to evaluate internal controls and train staff, improved
the accounting system for enrollment, and identified various
corrective actions to improve the district's financial position.
While S&P believes that the direction the new management team is
taking is a credit positive, it believes that the fruits of their
efforts may not be realized for some time, as the inherited
financial distress is likely to be compounded by ongoing state
budget pressures. The district has received four consecutive
qualified interim reports between fiscals 2019 and 2020, indicating
that the district may not meet its financial obligations for the
current fiscal year or two subsequent fiscal years. Based on
current projections, the district forecasts a surplus in fiscal
2021 due to the receipt of CARES Act funding from the state,
followed by deficit spending in fiscals 2022 and 2023 (barring any
additional adjustments, which management continues to evaluate). As
the district relies heavily on the state funding environment, S&P
believes it is vulnerable to more drastic revenue fluctuations
should the state revenue trend remain negative for a prolonged
period of time.
S&P could lower the ratings if the district is unable to balance
its budget, indicating a sustained or growing structural imbalance
with no plan in place to correct it. Additionally, S&P could lower
the ratings if the district experiences liquidity pressure as a
result of a stressed state funding environment and is unable to
secure capital to mitigate deferrals.
Should the district continue to adjust its expenditures and adopt a
plan that S&P believes will realistically return the district to
balance operations and rebuild its fund balance to at least an
adequate level, the rating agency could revise the outlook to
stable.
SENSATA TECHNOLOGIES: Moody's Rates $750MM Unsecured Notes 'Ba3'
----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Sensata
Technologies, Inc.'s planned $750 million senior unsecured notes
offering due 2031. Ratings of Technologies' parent company Sensata
Technologies B.V., including the Ba2 corporate family rating,
Ba2-PD probability of default rating, Baa3 secured ratings, and
Speculative Grade Liquidity Rating of SGL-1 are unaffected. The
ratings outlook is stable.
This new debt at Technologies will be guaranteed similar to the
other debt of Technologies and Sensata. Sensata plans to use the
proceeds from the notes to repay approximately $400 million of
outstanding revolving borrowings under the Senior Credit Facilities
that the company drew during the peak of the coronavirus pandemic
to enhance its liquidity. Remaining proceeds may be used to fully
or partially redeem Sensata's 6.25% Notes due 2026, issued by
Sensata Technologies UK Financing Co. plc. which become callable in
February 2021. Moody's will withdraw the outlook at UK Financing
following the repayment of the debt at that entity.
RATINGS RATIONALE
Sensata's Ba2 corporate family rating consider its large size and
solid competitive position in the specialized and fragmented
sensors and controls market. Sensata also has long-standing
customer relationships and is often deeply entrenched in their
customer's products, owing to the mission-critical nature of its
offerings and high switching costs. Restructuring actions Sensata
has taken in response to lower demand will help support EBITA
margins, but they will remain under pressure until demand
conditions normalize. The company also has very good liquidity
reflected in its' SGL-1 Speculative Grade Liquidity Rating,
supported by significant cash balance and Moody's expectation the
company will generate at least $200 million free cash flow in
2020.
Sensata's credit profit also reflects its large exposure to
cyclical end-markets, which were already experiencing challenging
demand conditions prior to the pandemic. Specifically, the company
has high end-market concentration in the automotive sector where a
number of its customers' plants were shut down for at least a
portion of the quarter. There is an ongoing risk of a market shift
or technology disruption that could lead to a need for higher
investment and capital expenditures. Therefore, Sensata must
continually invest in R&D and technology to remain competitive. The
company also has a history of leveraging acquisitions.
Moody's expectation is that financial leverage will weaken to the
low 5 times debt-to-EBITDA range at FYE20, up from 3.9 times at
June 30, 2020, before improving to 4 times or below by FYE21.
However, Moody's also anticipates that Sensata will maintain a
prudent strategy around leverage and liquidity which, combined with
its market position and control over operating costs, will enable
Sensata to manage the cyclicality in the auto sector and Sensata's
other end markets.
Environmental, social, and governance considerations have been
factored into the ratings. Environmentally, Sensata is not at
significant risk of any environmental investigations or
settlements. Sensata's products offer environmentally friendly
solutions to its customers. Sensata's social risk is relatively
minimal with less than 1% of the workforce covered by collective
bargaining agreements and generally positive relations with its
employees. Governance risk is relatively low as the company is
publicly traded on the New York Stock Exchange and must adhere to
their standards.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that significant
topline pressure from challenging end market conditions will
persist for the foreseeable future, but that the company will
continue to mitigate some of the impact on its margins and cash
flow generation by realigning internal costs with external demand.
The stable outlook also considers Moody's expectation that the
company's liquidity will remain very good.
The ratings could be upgraded if debt-to-EBITDA is sustained below
3.5 times, free cash flow-to-debt increases to above 15%, and EBITA
margins are maintained in excess of 20%. Alternatively, the ratings
could be downgraded if Moody's expects debt-to-EBITDA will be
sustained over 4.25 times, free cash flow-to-debt falls to under
10%, EBITDA-to-interest falls below 4.5 times, liquidity weakens,
or the company institutes a more aggressive financial policy
focusing on excessive shareholder returns.
The following rating was assigned:
Assignments:
Issuer: Sensata Technologies, Inc.
Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD4)
The principal methodology used in this rating was Manufacturing
Methodology published in March 2020.
Sensata Technologies B.V., Sensata Technologies UK Financing Co.
plc and Sensata Technologies, Inc., are indirect wholly-owned
subsidiaries of Sensata Technologies Holding plc, which is a global
manufacturer of sensors and controls products for the automotive,
industrial, HVAC, and aerospace markets. The company's products
include sensors measuring pressure/force/speed, thermal and
magnetic-hydraulic circuit breakers, and switches. Revenues for the
twelve-month period ending June 30, 2020 were approximately $3.05
billion.
SPRINGFIELD HOSPITAL: Hires Theriault & Joslin as Special Counsel
-----------------------------------------------------------------
Springfield Hospital Inc. seeks authority from the US Bankruptcy
Court for the District of Vermont to hire Theriault & Joslin as its
special counsel.
Theriault & Joslin provides the Debtor with legal services related
to civil litigation defense. Theriault & Joslin's attorneys have
been authorized by Coverys to provide legal defense services
covered by the Debtor's Policy, including defense related to
Jacqueline Sargent Sargent's negligence claim.
The hourly rates of professionals employed with Theriault & Joslin
who are expected to work on this matter were negotiated by Coverys,
who will be solely responsible for paying Theriault & Joslin's
fees.
Theriault & Joslin does not and will not represent any interest
adverse to the Debtor or its estate, according to court filings.
The firm can be reached through:
Curtis L.S. Carpenter, Esq.
Theriault & Joslin
141 Main Street, Suite 4
Montpelier, VT, 05602
Phone: (802) 223-2381
Email: ccarpenter@tjoslin.com
About Springfield Medical
Springfield Medical Care Systems -- https://springfieldmed.org/ --
is a 501(c) non-profit corporation, founded in 2009, as the parent
corporation to its nine-site federally-qualified community health
center network and Springfield Hospital. The Company's healthcare
system integrates primary care, behavioral health, dental, vision,
and hospital care with a broad network of community-based
services.
Springfield Hospital -- http://www.springfieldhospital.org/-- is a
not-for-profit, critical access hospital located in Springfield,
Vermont. As part of Springfield Medical Care Systems' integrated
system of care, including a network of ten federally qualified
community health center sites, Springfield Hospital serves
communities in southeastern Vermont and southwestern New
Hampshire.
Springfield Hospital, Inc. and Springfield Medical Care Systems,
Inc. sought Chapter 11 protection (Bankr. D. Vermont Case No.
19-10283 and 19-10285) on June 26, 2019.
Springfield Hospital estimated $10 million to $50 million in assets
and liabilities. Springfield Medical estimated assets of $1
million to $10 million and liabilities of $10 million to $50
million.
The Hon. Colleen A. Brown is the case judge.
MURRAY, PLUMB & MURRAY is Springfield Hospital's counsel.
BERNSTEIN, SHUR, SAWYER & NELSON, P.A., is representing Springfield
Medical.
SPURLOWS ARCHERY: Seeks Court Approval to Hire A+ Accounting
------------------------------------------------------------
Spurlows Archery Pro Shop, LLC seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ A+
Accounting & Tax as its accountant.
The firm will provide the following services:
(a) Prepare and file tax returns and conduct tax research;
(b) Prepare or assist Debtor in preparing documents required
as part of its Chapter 11 proceeding; and
(c) Provide other accounting services as required by Debtor.
The firm's services will be provided mainly by Akshay Dave, a
certified public accountant, who will be paid at the rate of $175
per hour. The standard rates for the accounting staff range from
$50 to $100 per hour.
The initial retainer fee is $1,500.
Mr. Dave neither represents nor holds any interest adverse to
Debtor, the bankruptcy estate and creditors in the matters upon
which it is to be engaged.
A+ Accounting can be reached at:
Akshay Dave, CPA
A+ Accounting & Tax
Post Office Box 372
Brandon, FL 33509-0372
Telephone: (813) 381-3809
Email: tax4002@gmail.com
About Spurlows Archery Pro Shop
Spurlows Archery Pro Shop, LLC sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-05340) on July
13, 2020, listing under $1 million in both assets and liabilities.
Debtor has tapped Buddy D. Ford, P.A. as its legal counsel and A+
Accounting & Tax as its accountant.
STL HOLDING: Moody's Rates New $225MM Senior Unsecured Notes 'B3'
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to the prospective
$225 million senior unsecured notes issuance of STL Holding
Company, LLC (dba DSLD Homes). In addition, Moody's assigned a B3
corporate family rating and a B3-PD probability of default rating
to DSLD Homes. The outlook is stable.
The proceeds from the note offering will be used to repay
borrowings on the company's revolving credit facility of
approximately $195 million, with the remainder used for transaction
fees and expenses and general corporate purposes. Following the
completion of the notes offering, the company expects to put in
place a $75 million unsecured revolving credit facility.
This is the first time Moody's has assigned a rating to DSLD
Homes.
Assignments:
Issuer: STL Holding Company LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Gtd Senior Unsecured Notes, Assigned B3 (LGD4)
Outlook Actions:
Issuer: STL Holding Company LLC
Outlook, Assigned Stable
RATINGS RATIONALE
DSLD Homes' B3 corporate family and senior unsecured ratings
reflect Moody's expectation that the company will experience modest
margin contraction coupled with a decline in revenue over the next
12 months, followed by a subsequent recovery. Moody's forecast
considers the significant measures taken by the federal and local
governments to contain the coronavirus, including social distancing
recommendations and mandatory shelter-in-place orders, which will
reduce foot traffic and increase cancellations for homebuilders.
While DSLD's operations were only modestly affected by the
coronavirus pandemic through the first half of the year, the
company operates in states with increasing coronavirus infection
rates that could result in increased social distancing measures by
local governments. 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 implications for public health
and safety. DSLD's high exposure to Louisiana, which represents
over 70% of total revenues, has left it vulnerable to shifts in
market demand and sentiment in these unprecedented operating
conditions.
Moody's ratings also reflect the company's relatively small size
and scale, modest amount of tangible net worth and expected
negative free cash flow over the next 12 months. Moody's expects
that the company will maintain a measured approach to its financial
policy and not aggressively increase leverage. The company pays out
a regular dividend to cover taxes incurred by shareholders due to
their ownership interest in the company as well as a discretionary
distribution of approximately $10 million annually. Due to the
COVID-19 pandemic the discretionary portion of the dividend was
temporarily suspended at the end of March 2020.
However, the rating is supported by the company's successful
asset-lite business model, which minimizes land impairment risk
associated with long land exposure. Furthermore, the rating
incorporates DSLD's high mix of affordable, entry-level homes, a
segment that Moody's expects will grow faster than other housing
categories. Pro forma for the unsecured debt issuance, DSLD Homes
will have leverage, as defined by adjusted homebuilding debt to
capitalization, between 46-48%.
Moody's regards DSLD Homes' liquidity as adequate over the next 12
to 18 months. DSLD Homes' pro forma cash position of $97.8 million
will more than cover the company's expected negative free cash flow
while the undrawn and fully available $75 million unsecured
revolver will provide additional liquidity. Covenant compliance is
expected to be healthy, and the company's unsecured capital
structure provides it with an unencumbered asset base.
The stable outlook reflects Moody's expectation of improvement in
new homes sales, particularly within the entry-level home segment,
while maintaining adequate liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's indicated that a rating upgrade would likely reflect a
reduction in geographic concentration within the state of
Louisiana, tangible net worth exceeding $500 million, adjusted
gross homebuilding debt to book capitalization below 50% and EBIT
to interest coverage maintained above 3x. A rating downgrade could
result from debt to book capitalization sustained above 65%, EBIT
to interest coverage below 1.0x or a deterioration in the company's
liquidity profile.
The principal methodology used in these ratings was Homebuilding
and Property Development Industry published in January 2018.
STL Holding Company, LLC is a private homebuilder focused on the
construction of entry-level homes predominantly in the Gulf Coast
region of the United States. The company operates in Louisiana,
Alabama, Mississippi and Florida. Total revenues for the
twelve-month period ended March 31, 2020 was approximately $742
million.
SUMMIT MIDSTREAM: S&P Lowers Rating on A Preferred Units to 'D'
---------------------------------------------------------------
S&P Global Ratings affirmed its 'SD' (selective default) issuer
credit rating on Summit Midstream Partners L.P. (SMLP). S&P lowered
its rating on SMLP's series A preferred units to 'D' from 'C'.
The downgrade on SMLP's preferred units follows the close of the
series A preferred unit exchange. The exchange offered preferred
holders the opportunity to move down the capital structure for a
more liquid security. Approximately $62.8 million of notional
preferred units were tendered and exchanged for common units.
"We view this transaction as distressed based on the discounted
trading levels of the preferred units and that holders received
less than what they were promised. We assess this security as
having intermediate (50%) equity content. As a result, we are
removing approximately $31.4 million from SMLP's debt balance," S&P
said.
SUNNY HILLS: Seeks to Hire Wendel Rosen as Legal Counsel
--------------------------------------------------------
Sunny Hills Aquatic Club seeks authority from the US Bankruptcy
Court for the Northern District of California to hire Wendel Rosen
LLP as its reorganization counsel.
Wendel Rosen will assist the Debtor in the administration and
operation of the voluntary bankruptcy case under Chapter 11 of the
Bankruptcy Code. Its services will include advising and assisting
Debtor in the preparation of all statements, schedules, records and
reports required by applicable law in connection with the
initiation and operation of the case, attendance of the Meeting of
Creditors, and appearance at all hearings where the attorney for
Debtor is required to appear.
Debtor paid the total sum of $11,000 to Wendel Rosen. The payment
was comprised of a payment of an $7,500 general retainer for fees
and costs of pre-petition legal services and as an advance payment
of fees and costs in this case, which was subsequently increased to
$3,500, and the payment of a $1,717 filing fee.
Wendel Rosen's standard hourly rates, which presently are from
$330-655 for attorneys and from $175-315 for paralegals, law
clerks, and case clerks.
Wendel Rosen is disinterested and has no connection with Debtor,
its creditors, any other party in interest, its respective
attorneys and accountants, the United States Trustee, or any person
employed in the Office of the United States Trustee, according to
court filings.
The counsel can be reached through:
Tracy Green, Esq.
Wendel, Rosen, Black And Dean
1111 Broadway, 24th Floor
Oakland, CA 94607
Tel: 510.834.6600
Fax: 510.834.1928
Email: tgreen@wendel.com
About Sunny Hills Aquatic Club
Sunny Hills Aquatic Club sought protection under Chapter 11 of the
Bankruptcy Code (N.D. Cal. Case No. 20-41077) on June 25, 2020,
listing under $1 million in both assets and liabilities. Tracy
Green, Esq. at Wendel, Rosen, Black And Dean represents the Debtor
as counsel.
SUPERIOR AIR: Unsecureds to Recover 2.3% to 15.0% in Joint Plan
---------------------------------------------------------------
Superior Air Charter, LLC and the Official Committee of Unsecured
Creditors filed with the U.S. Bankruptcy Court for the District of
Delaware a Joint Combined Disclosure Statement and Chapter 11 Plan
of Reorganization dated June 26, 2020.
In connection with the Debtor’s efforts to sell its assets, on
April 28, 2020, it commenced this Bankruptcy Case. At the outset of
this Chapter 11 Case, the Debtor Filed the Bidding Procedures
Motion. The Bidding Procedures Motion initiated a marketing process
with the DIP Lenders serving as the proposed stalking horse bidder,
which was designed to solicit interest in bids and culminate in an
auction in an effort to maximize the value of the Debtor’s assets
for the benefit of the Debtor, its Estate and all
parties-in-interest.
The Debtor, the Committee, and the DIP Lenders engaged in robust
negotiations about the nature and terms of a transaction that would
provide the maximum benefit to the Debtor’s estate and creditors,
including holders of SuiteKey Claims, the largest group of
unsecured creditors. As a result of those negotiations, the Debtor,
with agreement of the Committee appointed in this case, determined
to pivot from the marketing process proposed by the Bidding
Procedures Motion and proceed instead with a reorganization under
the terms of this Combined Plan and Disclosure Statement.
The Combined Disclosure Statement and Plan provides that on the
Effective Date (i) the GUC Trust Proceeds as contributed by the DIP
Lenders shall automatically vest in the GUC Trust free and clear of
all Claims, Liens and interests; and (B) except for the GUC Trust
Proceeds, all of the property and assets of the Debtor—including,
among others, (i) the Purchased and Financed Aircraft; (ii) the
Part 135 Operating Certificate; (iii) the Debtor’s customer list;
(iv) the Debtor’s intellectual property and trademarks; and (v)
all Causes of Action, including those under Chapter 5 of the
Bankruptcy Code shall be acquired by the DIP Lenders, free and
clear of all Liens, Claims and interests. At the direction of the
DIP Lenders for the consideration provided to implement the
Combined Plan and Disclosure Statement, JSI’s Equity Interests in
the Debtor will be reinstated in full in the Reorganized Debtor.
The Combined Disclosure Statement and Plan provides that each
Holder of a General Unsecured Claim shall receive its Pro Rata
share of the proceeds of the GUC Trust Proceeds as set forth in
this Combined Disclosure Statement and Plan. SuiteKey Claimants
will be permitted to choose between treatment under Class 4
(General Unsecured Claims) or Class 5 (SuiteKey Claims). Class 5
SuiteKey Claims will receive certain Credits towards future flights
hosted by Delux Public Charter, doing business as JSX. One of the
DIP Lenders, JetSuiteX, maintains $16 million of claims against the
Debtor on the basis of unsecured demand notes, but has agreed to
subordinate the same to other unsecured creditors, which likewise
inures to the benefit of the Debtor’s creditors.
Class 4 consists of General Unsecured Claims. The Debtor estimates
that Holders of Allowed Claims shall receive 2.3% to 15.0%. Holders
of Allowed General Unsecured Claims shall receive a pro rata
distribution of the GUC Trust Proceeds in full satisfaction of
their Claims, which Claims shall not be assumed by, and are
extinguished and discharged against the Reorganized Debtor.
Class 5 consists of SuiteKey Claims. Holders of Allowed SuiteKey
Claims shall be given the option of electing to be treated as a
Class 4 General Unsecured Claim, entitling it to a pro rata
distribution of the GUC Trust Proceeds on the basis of the amount
of their Allowed SuiteKey Claim. Alternatively, SuiteKey Claimants
may opt for treatment under Class 5, entitling them to the
following recovery: credits (the "Credits") to be used against
future flights hosted by Delux or its successor.
Class 7 consists of the Equity Interests in the Debtor. On the
Effective Date, JSI will continue to own 100% of all existing
Equity Interests in the Debtor as directed by the DIP Lender for
the consideration provided to implement the Combined Plan and
Disclosure Statement.
Allowed claims will be paid from the GUC Trust, which will be
funded solely from the DIP Commitment. For the avoidance of doubt,
any funds remaining in the Administrative and Priority Reserve and
the Professional Fee Reserve after payment in full of such claims
shall be available to satisfy any Allowed Claims under this
Combined Disclosure Statement and Plan.
A full-text copy of the Combined Disclosure Statement and Plan
dated June 26, 2020, is available at https://tinyurl.com/y95ghofa
from PacerMonitor at no charge.
Counsel to the Debtor:
BAYARD, P.A.
Evan T. Miller
Daniel N. Brogan
Gregory J. Flasser
Sophie E. Macon
600 N. King Street, Suite 400
Wilmington, DE 19801
Telephone: (302) 655-5000
Facsimile: (302) 658-6395
E-mail: emiller@bayardlaw.com
dbrogan@bayardlaw.com
gflasser@bayardlaw.com
smacon@bayardlaw.com
Counsel to the Creditors Committee:
PEPPER HAMILTON LLP
David B. Stratton
Evelyn J. Meltzer
Marcy J. McLaughlin Smith
Hercules Plaza
1313 Market Street, Suite 5100
Wilmington, DE 19899-1709
E-mail: strattond@pepperlaw.com
meltzere@pepperlaw.com
mclaughlinm@pepperlaw.com
About Superior Air Charter
Superior Air Charter, LLC -- https://www.jetsuite.com/ -- operates
charter air carrier JetSuite. With its current headquarters in
Dallas, Texas, JetSuite was founded in 2006 by Alex Wilcox, Keith
Rabin, and Brian Coulter. It is one of the biggest operators of
private air services in the United States. It operates chartered
services with a fleet of Phenom 100 and Citation CJ3 aircraft and
offer subscription-based air travel services to passengers to
western United States, Canada, and Mexico.
Superior Air Charter sought Chapter 11 protection (Bankr. D. Del.
Case No. 20-11007) on April 28, 2020. The Debtor was estimated to
have $1 million to $10 million in assets and $50 million to $100
million in liabilities. The Debtor tapped Bayard, P.A., as
counsel; and Stretto as claims agent.
TAILORED BRANDS: Porter, Gibson Dunn Represent Term Lender Group
----------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Gibson, Dunn & Crutcher LLP and Gibson, Dunn &
Crutcher LLP submitted a verified statement that it they are
representing the Ad Hoc Group of Term Loan Lenders in the Chapter
11 cases of Tailored Brands, Inc., et al.
In April 2020, certain members of the Ad Hoc Group of Term Loan
Lenders retained Gibson, Dunn & Crutcher LLP to represent them as
counsel in connection with a potential restructuring of the
outstanding debt obligations of the above- captioned debtors and
certain of their subsidiaries and affiliates. Subsequently, on or
about July 31, 2020, Gibson Dunn contacted Porter Hedges LLP to
serve as Texas co-counsel to the Ad Hoc Group of Term Loan
Lenders.
Gibson Dunn and Porter Hedges represent the members of the Ad Hoc
Group of Term Loan Lenders in their capacities as lenders under
that certain Term Credit Agreement, dated as of June 18, 2020, by
and among the Men's Wearhouse, Inc., as borrower, Tailored Brands,
Inc., as holdings, certain of the other Debtors, as guarantors,
Wilmington Savings Fund Society, FSB, as successor administrative
agent and collateral agent, and the several lenders from time to
time parties thereto.
Gibson Dunn and Porter Hedges do not represent or purport to
represent any other entities in connection with the Debtors'
chapter 11 cases. Gibson Dunn and Porter Hedges do not represent
the Ad Hoc Group of Term Loan Lenders as a "committee" and do not
undertake to represent the interests of, and are not fiduciaries
for, any creditor, party in interest, or other entity that has not
signed a retention agreement with Gibson Dunn or Porter Hedges. In
addition, the Ad Hoc Group of Term Loan Lenders does not represent
or purport to represent any other entities in connection with the
Debtors' chapter 11 cases. Each member of the Ad Hoc Group of Term
Loan Lenders does not represent the interests of, nor act as a
fiduciary for, any person or entity other than itself in connection
with the Debtors' chapter 11 cases.
Upon information and belief formed after due inquiry, Gibson Dunn
and Porter Hedges do not hold any disclosable economic interests in
relation to the Debtors.
As of Aug. 3, 2020, members of the Ad Hoc Group of Term Lenders and
their disclosable economic interests are:
CIFC Asset Management, LLC
875 3rd Ave
New York NY 10022
* Term Loan Indebtness: $11,929,419.73
CIFC VS Management LLC
875 3rd Ave
New York NY 10022
* Term Loan Indebtness: $8,938,786.47
CIFC CLO Management LLC
875 3rd Ave
New York NY 10022
* Term Loan Indebtness: $35,373,902.36
CVC Credit Partners, LLC
5th Ave, 42nd Floor
New York, NY 10019
* Term Loan Indebtness: $41,099,838.07
Intermediate Capital Group
600 Lexington Ave.
New York, NY 10022
* Term Loan Indebtness: $51,698,844.68
* Unsecured Notes Indebtness: $898,000.00
PGIM, Inc.
655 Broad Street, 7th Floor
Newark, NJ 07012
* Term Loan Indebtness: $66,926,089.85
Silver Point Capital, LP
c/o Silver Point Capital
Credit Admin
Two Greenwich Plaza, First Floor
Greenwich, CT 06830
* Term Loan Indebtness: $92,368,983.56
Voya Investment Management Co. LLC
7337 E. Doubletree Ranch Road
Scottsdale, AZ 85258
* Term Loan Indebtness: $33,612,735.36
Voya Alternative Asset Management LLC
7337 E. Doubletree Ranch Road
Scottsdale, AZ 85258
* Term Loan Indebtness: $33,914,616.10
Voya Investment Trust Co.
7337 E. Doubletree Ranch Road
Scottsdale, AZ 85258
* Term Loan Indebtness: $9,940,578.09
Aegon USA Investment Management, LLC
27 West Monroe Street, Suite 6000
Chicago, IL 60606
* Term Loan Indebtness: $17, 557,367
ALCOF II NUBT, L.P.
c/o Arbour Lane Fund II GP, LLC
700 Canal Street, 4th Floor
Stamford CT, 06902
* Term Loan Indebtness: $52,772,192.25
Canaras Capital Management, LLC
130 West 42nd Street, Suite 1500
New York, NY 10036
* Term Loan Indebtness: $8,064,939.78
Carlson Capital, L.P.
2100 McKinney Ave, Suite 1800
Dallas, TX 75201
* Term Loan Indebtness: $20,037,478.44
Cowen Special Investments LLC
599 Lexington, 21st Floor
New York, NY 10022
* Term Loan Indebtness: $1,874,296.23
First Eagle Alternative Credit, LLC
227 W. Monroe, Suite 3200
Chicago, IL, 60606
* Term Loan Indebtness: $19,509,635.40
The Guardian Life Insurance Company of America
10 Hudson Yards, 20th Floor
New York, NY 10001
* Term Loan Indebtness: $24,651,642
H.I.G. Capital
200 Crescent Court, Suite 1414
Dallas, TX 75201
* Term Loan Indebtness: $5,878,646.58
Bowery Funding ULC
c/o The Bank of Nova Scotia 40 King Street West
68th Floor Scotia Plaza
Toronto, ON
Canada M5H 1H1
* Term Loan Indebtness: $989,843.48
Marathon Asset Management
One Bryant Park, 38th Floor
New York, New York 10036
* Term Loan Indebtness: $13,893,149.32
Marble Point Credit Management LLC
600 Steamboat Road, 2nd Floor
Greenwich, CT 06830
* Term Loan Indebtness: $26,396,230.53
Medalist Partners, LP
12 East 49th Street, 38th Floor
New York, NY 10017
* Term Loan Indebtness: $4,695,427.51
MJX Asset Management LLC
12 E 49th Street, 38th Floor
New York, NY 10017
* Term Loan Indebtness: $34,526,518.51
MS 522 CLO CM LLC
8500 Andrew Carnegie Boulevard
Charlotte, NC 28262
* Term Loan Indebtness: $24,210,237.41
Five Arrows Managers North America LLC
633 West 5th Street, Suite 6700
Los Angeles, CA 90
* Term Loan Indebtness: $6,349,594.00
Scoggin International Fund Ltd
660 Madison Avenue, 20th Floor
New York, NY 10065
* Term Loan Indebtness: $18,600,000.00
Scoggin Worldwide Fund Ltd
660 Madison Avenue, 20th Floor
New York, NY 10065
* Term Loan Indebtness: $2,900,000.00
WhiteStar Asset Management, LLC
Crescent Court, Suite 1175
Dallas, TX 75201
* Term Loan Indebtness: $5,792,323.01
Trinitas Capital Management, LLC
Crescent Court, Suite 1175
Dallas, TX 75201
* Term Loan Indebtness: $14,180,980.79
Wells Fargo Bank, N.A.
45 Fremont St, Floor 29
San Francisco, CA 94105
* Term Loan Indebtness: $5,360,238.89
ZAIS Group, LLC
101 Crawfords Corner Road, Suite 1206
Holmdel, NJ 07733
* Term Loan Indebtness: $21,550,126.89
Investcorp Credit Management US LLC
280 Park Avenue, 36th Floor
New York, NY 10017
* Term Loan Indebtness: $3,915,844.53
Canyon Capital Advisors, LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
* Term Loan Indebtness: $2,923,766.67
Counsel for the Ad Hoc Group of Term Loan Lenders can be reached
at:
PORTER HEDGES LLP
John F. Higgins, Esq.
Aaron J. Power, Esq.
1000 Main Street, 36th Floor
Houston, TX 77002-2764
Telephone: (713) 226-6000
Facsimile: (713) 226-6248
Email: jhiggins@porterhedges.com
apower@porterhedges.com
- and -
GIBSON, DUNN & CRUTCHER LLC
Scott J. Greenberg, Esq.
Matt J. Williams, Esq.
Keith R. Martorana, Esq.
Jeremy D. Evans, Esq.
200 Park Ave.
New York, NY 10166
Tel: (212) 351-4000
Fax: (212) 351-4035
Email: sgreenberg@gibsondunn.com
mjwilliams@gibsondunn.com
kmartorana@gibsondunn.com
jevans@gibsondunn.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://is.gd/lvaQbM
About Tailored Brands
Tailored Brands, Inc., (NYSE: TLRD) is an omni-channel specialty
retailer of menswear, including suits, formalwear and a broad
selection of polished and business casual offerings. The Company
delivers personalized products and services through its convenient
network of over 1,400 stores in the United States and Canada as
well as its branded e-commerce websites at
http://www.menswearhouse.com/and http://www.josbank.com. Its
brands include Men's Wearhouse, Jos. A. Bank, Moores Clothing for
Men and K&G.
Tailored Brands reported a net loss of $82.28 million for the year
ended Feb. 1, 2020, compared to net earnings of $83.24 million for
the year ended Feb. 2, 2019. As of Feb. 1, 2020, the Company had
$2.42 billion in total assets, $2.52 billion in total liabilities,
and a total shareholders' deficit of $98.31 million.
TANGO DELTA: Trustee Seeks to Hire Bush Ross as Legal Counsel
-------------------------------------------------------------
Jeffrey Warren, the Chapter 11 trustee for Tango Delta Financial,
Inc., seeks approval from the U.S. Bankruptcy Court for the Middle
District of Florida to retain Bush Ross, P.A. as his legal
counsel.
The professional services to be rendered by Bush Ross are:
a. give the Trustee legal advice with respect to his powers
and duties;
b. investigate the existence of the Debtor's assets, to
recover such assets, and/or to sell same;
c. take depositions of any party in interest or third party;
d. request or subpoena relevant documents from any party in
interest or third party;
e. investigate and prosecute claims and causes of action,
including possible preferential and/or fraudulent transfer claims;
f. advise the Trustee and assist in negotiations with
connection with any other litigation in or related to this chapter
11 case; and
g. perform all other legal services for the Trustee that may
be necessary in this case.
The Trustee also seeks authorization to pay Bush Ross a reasonable
attorney's fee and to reimburse Bush Ross for its reasonable and
necessary costs.
Bush Ross represent no interest adverse to the Debtor or the
Debtor's estates in the matters upon which they are to be engaged,
according to court filings.
The counsel can be reached through:
Adam Lawton Alpert, Esq.
Kathleen L. DiSanto, Esq.,
Bush Ross, P.A.
1801 N Highland Ave.
Tampa, FL 33602
Phone: +1 813-224-9255
About Tango Delta Financial
Tango Delta Financial Inc., formely doing business as American
Student Financial Group Inc. (ASFG), is a Sarasota, Fla.-based
company that buys student loans for investment purposes.
On May 11, 2020, Tango Delta sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-03672). The
petition was signed by Tango Delta President Timothy R. Duoos. At
the time of the filing, Debtor disclosed assets of between $1
million and $10 million and liabilities of the same range. Debtor
is represented by Cole & Cole Law, P.A.
TRC FARMS: Aug. 18 Plan Confirmation Hearing Set
------------------------------------------------
On June 22, 2020, TRC Farms, Inc. filed with the U.S. Bankruptcy
Court for the Eastern District of North Carolina, New Bern
Division, a Plan and a Disclosure Statement.
On June 25, 2020, Judge Joseph N. Callaway conditionally approved
the Disclosure Statement and established these dates and
deadlines:
* Aug. 11, 2020 is fixed as the last day for filing and serving
written objections to the disclosure statement.
* Aug. 18, 2020, at 2:00 PM in Randy D. Doub, United States
Courthouse, 2nd Floor Courtroom, 150 Reade Circle, Greenville, NC
27858 is the hearing on confirmation of the plan.
* Aug. 11, 2020 is fixed as the last day for filing written
acceptances or rejections of the plan.
* Aug. 11, 2020 is fixed as the last day for filing and serving
written objections to confirmation of the plan.
A copy of the order dated June 25, 2020, is available at
https://tinyurl.com/y99bltwh from PacerMonitor.com at no charge.
About TRC Farms Inc.
TRC Farms, Inc., a privately held company in the livestock farming
industry, filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. N.C. Case No. 20-00309) on Jan. 23,
2020. In the petition signed by Timmy R. Cox, president, the
Debtor disclosed $3,846,275 in assets and $5,412,282 in
liabilities. Judge Joseph N. Callaway oversees the case. The
Debtor tapped Ayers & Haidt, PA as its legal counsel, and Carr
Riggs & Ingram, LLC as its accountant.
TRI-POINT OIL: Unsecureds to Get Paid by Liquidating Cash Proceeds
------------------------------------------------------------------
Tri-Point Oil & Gas Production Systems, LLC, filed with the U.S.
Bankruptcy Court for the Southern District of Texas, Houston
DDivision, a Combined Disclosure Statement and Joint Plan of
Liquidation dated June 26, 2020.
The Debtors owned four pieces of real property located in Canadian,
Texas, Elk City, Oklahoma, Kountze, Texas, and Midland, Texas. The
Court approved online auctions for the four properties. The sale of
the Canadian, Texas property closed on April 27, 2020. The
remaining three sales are anticipated to close before the Effective
Date.
On April 7, 2020, the Bankruptcy Court entered an Order (I)
Approving the Sale of Property Free and Clear of Liens, Claims, and
Encumbrances Authorizing the Employment of Auctioneer. Pursuant to
this order, the Debtors entered into a Commission Agreement with
Advance with PPL Acquisition Group IV, LLC and Great American
Global Partners, LLC to conduct liquidations of the Debtors’
machinery, equipment, inventory and other personal property. An
online auction of certain assets occurred on June 23-25, 2020.
Additional auctions are expected to occur after the Effective Date.
Each Holder of an Allowed Class 5 General Unsecured Claim shall
receive its Pro Rata share of the Liquidating Debtor Cash remaining
after the Class 4 Prepetition Term Loan Claims are paid in full.
Class 7 Interests shall be cancelled and discharged, with the
Holders of such Interests receiving no Distribution on account of
such Interests.
On the Effective Date, all assets of the Debtors and of the
Estates, including but not limited to (a) all Liquidating Debtor
Cash, (b) the Retained Causes of Action, (c) the Reserves and (d)
all remaining machinery, equipment, and tangible and intangible
property, shall be fully retained and vest in the Liquidating
Debtor, free and clear of all liens, claims and encumbrances,
except as otherwise provided in the Plan. Pursuant to 11 U.S.C §§
1123(a)(5)(B), 1123(b)(3), and 1123(b)(6), the Liquidating Debtor
shall be the successor to the Debtors for all purposes.
The Plan Agent shall make Distributions consistent with the
requirements of this Plan. In connection with each Distribution to
Holders of General Unsecured Claims, the Plan Agent shall withhold
from property that would otherwise be distributed on account of
Class 5 General Unsecured Claims entitled to Distributions, in the
Disputed General Unsecured Claims Reserve, such amounts or property
as may be necessary to equal one hundred percent (100%) of
Distributions to which Holders of Disputed General Unsecured Claims
would be entitled under this Plan if such Disputed General
Unsecured Claims were Allowed in their Disputed Claim Amount. The
Plan Agent may request, if necessary, estimation for any Disputed
Claim that is contingent or unliquidated, and shall withhold the
applicable portion of the Disputed General Unsecured Claims Reserve
with respect to such Claims based upon the estimated amount of each
such Claim as estimated by the Bankruptcy Court.
A full-text copy of the Combined Plan and Disclosures dated June
26, 2020, is available at https://tinyurl.com/ya5ym3wn from
PacerMonitor at no charge.
Counsel to the Debtors:
PORTER HEDGES LLP
Joshua W. Wolfshohl (TX 24038592)
Aaron J. Power
1000 Main Street, 36th Floor
Houston, Texas 77002
Telephone: (713) 226-6600
Facsimile: (713) 226-6628
E-mail: jwolfshohl@porterhedges.com
apower@porterhedges.com
About Tri-Point Oil
Tri-Point Oil & Gas Production Systems, LLC, and its related
entities -- https://www.tri-pointllc.com/ -- together form an oil
and gas production and processing equipment company headquartered
in Houston, Texas. Their services include engineering and design,
installation, start-up, and after-market field maintenance to
provide custom engineered and configured solutions to upstream and
midstream customers. In addition, they provide services including
training, on-site service, testing services, and aftermarket
maintenance and repair. They also own and operate supply stores,
located in the Permian Basin, Mid-Continent, and Rocky Mountain
regions.
On March 16, 2020, Tri-Point Oil and three affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-31777).
In the petitions signed by CEO Jeffrey Martini, Tri-Point Oil was
estimated to have $10 million to $50 million in assets and $50
million to $100 million in liabilities.
The Hon. David R. Jones is the case judge.
The Debtors tapped Porter Hedges LLP as legal counsel;
Alixpartners, LLP as financial advisor; and Bankruptcy Management
Solutions, Inc. (which conducts business under the name Stretto) as
claims agent.
TRIANGLE USA: 8th Circuit Upholds Judgment Against Slawson
----------------------------------------------------------
The US Court of Appeals for the Eighth Circuit affirms a district
court judgment granting summary judgment in favor of Nine Point
Energy, LLC in the case captioned, Slawson Exploration Company,
Inc., Plaintiff-Appellant, v. Nine Point Energy, LLC, formerly
known as Triangle USA Petroleum Corporation, Defendant-Appellee,
No. 19-1945 (8th Cir.).
Slawson Exploration Company, Inc. entered into an oil-and-gas
exploration and production agreement with Triangle Petroleum
Corporation (TPC) whereby TPC agreed, among other things, to pay an
additional 10% of its share of the drilling, completing, and
equipping costs for each well in which TPC elects to participate
(Promote Obligation). TPC's successor-in-interest filed for
bankruptcy, and Slawson filed a proof of claim seeking payment,
pursuant to the Promote Obligation, on all wells in which TPC's
successor-in-interest elects to participate. The bankruptcy court
confirmed the reorganization plan but, in light of Slawson's proof
of claim, gave Slawson leave to commence litigation to determine
whether the Promote Obligation runs with the land and is therefore
not dischargeable in bankruptcy.
TPC's successor-in-interest emerged from bankruptcy as Nine Point
Energy. Thereafter, Slawson filed a declaratory action against Nine
Point, alleging that the Promote Obligation is a covenant running
with the land, a real property interest, or an equitable servitude
under North Dakota law. The district court determined that the
Promote Obligation falls into none of these categories and granted
summary judgment in favor of Nine Point. Slawson appeals.
Slawson argues the district court erred in granting Nine Point's
motion for summary judgment. Slawson argues the district court
erroneously concluded that the Promote Obligation is not a covenant
running with the land. Under North Dakota law, covenants running
with the land are defined as those "contained in grants of estates
in real property [and] are appurtenant to such estates and pass
with them so as to bind the assigns of the covenantor and to vest
in the assigns of the covenantee in the same manner as if they
personally had entered into them."
The Appeals Court notes that the North Dakota Supreme Court has not
articulated a per se rule regarding whether contractual obligations
similar to the Promote Obligation are covenants running with the
land. While the Tenth Circuit in Spring Creek Exploration &
Production Co. v. Hess Bakken Investment, II, LLC, 887 F.3d 1003,
1028-29 (10th Cir. 2018), held that AMI covenants do not run with
the land under North Dakota law, it is unclear whether the Promote
Obligation constitutes an AMI covenant since the Promote Obligation
applies to wells on leaseholds that extend beyond the two-year AMI
term. And while the parties agree that the Promote Obligation was
part of the consideration promised by TPC under the EDA, the North
Dakota Supreme Court has stated only that "[i]t is generally
recognized that a covenant to pay for land in a particular way is a
personal covenant and does not run with the land."
Slawson argues the Promote Obligation necessarily benefits the land
by encouraging its development. Slawson points out the Promote
Obligation incentivizes development by defraying the risk of
drilling and tying payment directly to improvements to the land.
Even assuming that drilling constitutes a benefit to the land and
the Promote Obligation incentivizes this activity by defraying the
risk of drilling, according to the Court, this constitutes, at
best, an indirect benefit to the land. For instance, Slawson
concedes the EDA provides that Slawson would still be entitled to
the Promote Obligation payment even in a scenario in which only
Nine Point, and not Slawson, elects to participate in the drilling
of a well acquired under the terms of the EDA. In other words,
under this scenario, Nine Point would pay 10% of its share of the
drilling costs to Slawson even though Slawson had elected not to
participate in the drilling project and, as such, would not be
required to pay for the drilling costs. Thus, the fact that
Slawson's receipt of the Promote Obligation payment is not
contingent on its participation in the drilling project
demonstrates that the Promote Obligation is a "purely personal
benefit" to Slawson and not a direct benefit to the land.
Accordingly, the Promote Obligation does not directly benefit the
land. Thus, the district court did not err in concluding the
Promote Obligation is not a covenant running with the land.
Next, Slawson argues the district court erroneously declined to
enforce the Promote Obligation as an equitable servitude. While
Slawson points to Hager v. City of Devils Lake, 773 N.W.2d 420, 435
(N.D. 2009), Hager, the Court points out, involved an easement by
estoppel, which has long been recognized by the North Dakota
Supreme Court. While there may be similarities between easements by
estoppel and equitable servitudes, they are distinct legal rights
with different elements, and the Promote Obligation clearly does
not satisfy the elements for an easement by estoppel. That the
North Dakota Supreme Court has enforced another type of land use
restriction in equity does not mean it would enforce an equitable
servitude in this context.
Accordingly, the Eighth Circuit concludes the North Dakota courts
have not recognized equitable servitudes outside of the limited
context discussed. Thus, the district court did not err in
declining Slawson's invitation to enforce the Promote Obligation as
an equitable servitude.
Finally, Slawson argues the district court erroneously concluded
that the Promote Obligation is not a real property interest. The
Appeals Court notes the Promote Obligation is an allocation of
drilling costs. While drilling is a necessary step to profiting
from the minerals, drilling costs are not themselves profits
issuing out of the land. Further, Slawson has presented no evidence
that the North Dakota Supreme Court would consider the Promote
Obligation as akin to a royalty interest or any other real property
interest. Thus, the Appeals Court concludes that Slawson is "simply
trying to force this 'square peg' . . . covenant into 'round hole'
theories . . . when the dispositive issue is whether it is a
covenant which runs with the land."
Accordingly, the district court did not err in concluding the
Promote Obligation is not an interest in real property, the Appeals
Court says.
A copy of the Appeals Court's Decision dated July 20, 2020 is
available at https://bit.ly/2PdQ1aB from Leagle.com.
About Triangle USA Petroleum Corporation
Triangle USA Petroleum Corporation is an independent exploration
and production company with strategic focus on developing the
Bakken Shale and Three Forks formations in the Williston Basin of
North Dakota and Montana. TUSA is a wholly owned subsidiary of
Triangle Petroleum Corporation (NYSE MKT: TPLM). Neither TPLM nor
its affiliated company, RockPile Energy Services, LLC, is included
in TUSA's Chapter 11 filing.
Triangle USA Petroleum Corporation and its affiliates filed
voluntary petitions under Chapter 11 of the Bankruptcy Code (Bank.
D. Del. Lead Case No. 16-11566) on June 29, 2016, before Judge Mary
F. Walrath. At the time of the filing, TUSA estimated assets in
the range of $500 million to $1 billion and liabilities of up to $1
billion.
The Debtors engaged Sarah E. Pierce, Esq., at Skadden, Arps, Slate,
Meagher & Flom LLP as counsel, AP Services, LLC, as financial
advisor, PJT Partners Inc. as investment banker and Prime Clerk LLC
as claims & noticing agent.
The Office of the U.S. Trustee has informed the U.S. Bankruptcy
Court for the District of Delaware that a committee of unsecured
creditors has not been appointed in the Chapter 11 case of Triangle
USA Petroleum Corporation due to insufficient response to the U.S.
Trustee communication/contact for service on the committee.
TRINITY AFFORDABLE: S&P Lowers 2016-4A Bond Rating to 'BB-'
-----------------------------------------------------------
S&P Global Ratings lowered its rating to 'BB-' from 'BBB+' on
Mississippi Home Corp.'s series 2016-4A and 2016-4A-T multifamily
housing revenue bonds, issued for Trinity Affordable Housing Corp.,
Ill.'s Dorchester Place apartments project. The outlook is stable.
The bonds are no longer under criteria observation.
The series 2016-4A and 2016-4A-T were issued in the par amount of
$4.24 million and $980,000, respectively, for a total issuance of
$5.22 million. The bonds were issued pursuant to and secured by a
trust indenture dated April 1, 2016. Proceeds of the bonds were
loaned to the borrower to finance the acquisition and
rehabilitation of 128 units of a multifamily residential housing
known as Dorchester Place Apartments in Southaven. Proceeds were
also used to fund a debt service reserve fund (DSRF) account for
the bonds, sized at nine months' maximum annual debt service
(MADS), and to pay certain costs of issuance of the bonds. Interest
payments on the bonds began on July 1, 2016, and are payable
semiannually on each Jan. 1 and July 1.
"The rating action reflects our implementation of our 'Methodology
for Rating U.S. Public Finance Rental Housing Bonds' criteria,"
said S&P credit analyst Jessica Pabst. The criteria were published
April 15, 2020 on RatingsDirect.
S&P has analyzed the project's environmental, social and governance
(ESG) risks relative to its coverage and liquidity, management and
governance, and market position. S&P's rating action incorporates
its view regarding the health and safety risks posed by the
COVID-19 pandemic, which have affected all affordable housing
developments. Specifically, the risk of increasing expenses and
decreases in rental revenue related to the social risks of the
pandemic have been evaluated in S&P's rating. S&P finds the risks
less severe for properties that receive the federal Section 8
subsidy of which 42% of Dorchester units are covered by. S&P
considers the environmental risk in line with its view of the
sector as a whole, although it recognized the risk of flooding in
the region. The rating agency considers governance risk in line
with its view of the sector.
TRINITY AFFORDABLE: S&P Lowers 2016A Revenue Bond Rating to 'BB-'
-----------------------------------------------------------------
S&P Global Ratings lowered its rating four notches to 'BB-' from
'BBB' on Public Finance Authority, Wis.' series 2016A and taxable
series 2016A-T multifamily housing revenue bonds, issued for
Trinity Affordable Housing Corp. (TAHC), Ill.'s The Estates at
Eagle's Pointe apartments project. The outlook is stable.
"The rating action reflects our implementation of our 'Methodology
for Rating U.S. Public Finance Rental Housing Bonds' criteria,"
said S&P credit analyst Jessica Pabst. The criteria were published
on April 15, 2020 on RatingsDirect.
The series 2016A and 2016A-T were issued in the par amounts of
$16.79 million and $8.905 million, respectively, for a total
issuance of $25.695 million. The bonds were issued pursuant to and
secured by a trust indenture dated Nov. 1, 2016. Proceeds of the
bonds were loaned to the borrower to finance the acquisition and
rehabilitation of 583 family housing units known as The Estates at
Eagle's Pointe in Peru, Ind. Proceeds were also used to fund a debt
service reserve fund account for the bonds, sized at 12 months'
maximum annual debt service (MADS), and to pay certain costs of
issuance of the bonds. Interest payments on the bonds began on July
1, 2017, and are payable semiannually on each Jan. 1 and July 1.
S&P has analyzed the project's environmental, social, and
governance (ESG) risks relative to its coverage and liquidity,
management and governance, and market position. S&P's rating action
incorporates its view regarding the health and safety risks posed
by the COVID-19 pandemic, which have affected all affordable
housing developments. Specifically, the risk of increasing expenses
and decreases in rental revenue related to the social risks of the
pandemic have been evaluated in S&P's rating. The rating agency
considers the environmental and governance risks in line with its
view of the sector as a whole.
TRIVASCULAR SALES: Seeks Approval to Hire DLA Piper as Counsel
--------------------------------------------------------------
TriVascular Sales LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Northern District of Texas to employ
DLA Piper LLP (US) as their legal counsel.
DLA Piper will provide the following legal services:
(a) advise Debtors of their rights, powers and duties while
operating and managing their respective businesses and properties
under Chapter 11 of the Bankruptcy Code;
(b) prepare legal papers and review reports, including
financial reports, to be filed in Debtors' Chapter 11 cases;
(c) assist Debtors in the negotiation and documentation of
financing agreements and related transactions;
(d) advise Debtors regarding their ability to initiate actions
to collect and recover property;
(e) assist Debtors in connection with any potential property
dispositions;
(f) advise Debtors concerning the assumption, assignments and
rejection of executory contracts and unexpired leases;
(g) advise Debtors in connection with the formulation,
negotiation and promulgation of a plan of reorganization and
related transactional documents;
(h) assist Debtors in reviewing, estimating and resolving
claims asserted against their estates;
(i) assist Debtors in connection with compliance with
applicable laws and governmental regulations;
(j) commence litigation to assert rights held by Debtors,
protect their assets or otherwise further the goal of completing
their reorganization; and
(k) provide non-bankruptcy services to the extent requested by
Debtors.
DLA Piper's hourly rates are as follows:
Thomas R. Califano, Partner, New York $1,290
Rachel Nanes, Partner, Miami $950
David Avraham, Associate, Chicago $895
Andrew Zollinger, Associate, Dallas $890
Tara Nair, Associate, Chicago $670
Matthew Sarna, Associate, Wilmington $560
Nathan Sheps, Associate, New York $690
Tennille Wilson, Paralegal, Miami $310
DLA Piper received a retainer from Debtors in the total amount of
$200,720.20 prior to their bankruptcy filing.
Thomas Califano, Esq., a partner at DLA Piper, 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:
Andrew B. Zollinger, Esq.
David E. Avraham, Esq.
DLA Piper LLP (US)
1900 North Pearl Street, Suite 2200
Dallas, TX 75201
Telephone: (214) 743-4500
Facsimile: (214) 743-4545
Email: andrew.zollinger@us.dlapiper.com
david.avraham@us.dlapiper.com
- and –
Thomas R. Califano, Esq.
DLA Piper LLP (US)
1251 Avenue of the Americas
New York, NY 10020-1104
Telephone: (212) 335-4500
Facsimile: (212) 335-4501
Email: thomas.califano@us.dlapiper.com
- and –
Rachel Nanes, Esq.
DLA Piper LLP (US)
200 South Biscayne Boulevard, Suite 2500
Miami, FL 33131
Telephone: (305) 423-8563
Facsimile: (305) 675-8206
Email: rachel.nanes@us.dlapiper.com
About TriVascular Sales
TriVascular Sales, LLC and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No.
20-31840) on July 5, 2020. At the time of the filing, TriVascular
Sales had estimated assets of less than $50,000 and liabilities of
between $100 million and $500 million. Judge Stacey G. Jernigan
oversees the cases.
Debtors have tapped DLA Piper LLP (US) as their legal counsel, FTI
Consulting,
Inc. as their financial advisor, and Omni Agent Solutions as their
claims, noticing and administrative agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on July 16, 2020.
TRUVI COMMERCE: Seeks to Hire Provencher & Flatt as Counsel
-----------------------------------------------------------
Truvi Commerce seeks authority from the United States Bankruptcy
Court for the Northern District of California to hire Provencher &
Flatt, LLP as its counsel.
Truvi requires Provencher to:
a. assist the Debtor in complying with the appropriate Code
sections and Rules governing the operations of a Debtor in
Possession;
b. assist the Debtor in complying with the requirements of the
Office of the United States Trustee;
c. develop and prepare a Plan of Reorganization for a Small
Business under Chapter 11;
d. assist the Debtor with its operations as a Debtor in
Possession, including reviewing claims, reviewing financial
statements, providing information as required to various parties in
interest;
e. work with the Subchapter V trustee to formulate a Plan of
Reorganization;
f. provide the Debtor with counsel and representation during
the Chapter 11 process; and
g. provide any other services that are appropriate for the
Debtor in Possession's counsel during the Chapter 11 case.
Provencher has two professionals that will work on this matter.
Attorney, Douglas Provencher at $510 per hour and paralegal, Deana
Hopper at $200 an hour.
Provencher & Flatt, LLP has received a total deposit of $25,335.
$11,393 was applied to pre-petition services and $1,717 paid for
the filing fee, leaving a net pre-petition retainer of $13,942.
Provencher & Flatt, LLP do not and have not represented any
interest adverse to the Debtor or the estate and Douglas Provencher
and Provencher & Flatt, LLP are "disinterested persons", according
to court filings.
The firm can be reached through:
Douglas B. Provencher, Esq.
PROVENCHER & FLATT LLP
823 Sonoma Avenue
Santa Rosa, CA 95404
Tel: 707 284-2380
Email: dbp@provlaw.com
About Truvi Commerce
Truvi Commerce -- http://www.truvicommerce.com-- is a cloud-based
multi-channel technology platform that enables direct-to-consumer
(DTC) sales for wineries and wine retailers.
Truvi Commerce filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No.
20-10409) on July 16, 2020. The petition was signed by Karin
Ballestrazze, president. At the time of filing, the Debtor
disclosed $117,652 total assets and $3,239,441 total liabilities.
Douglas B. Provencher, Esq. at PROVENCHER & FLATT LLP represents
the Debtor as counsel.
UA INVESTMENTS: Case Summary & 4 Unsecured Creditors
----------------------------------------------------
Debtor: UA Investments LLC
311 Heritage Park Trce NW
Kennesaw, GA 30144-4832
Business Description: UA Investments LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: August 3, 2020
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 20-68667
Debtor's Counsel: Eric E. Thorstenberg, Esq.
ERIC THORSTENBERG
333 Sandy Springs Cr Ste 101
Atlanta, GA 30328-3833
Tel: (404) 843-8491
Fax: (404) 843-1516
E-mail: ethorstenberglaw@gmail.com
Total Assets: $1,617,764
Total Liabilities: $1,476,385
The petition was signed by Mohammad Gaffar, member/manager.
A copy of the petition containing, among other items, a list of the
Debtor's four unsecured creditors is available for free at
PacerMonitor.com at:
https://is.gd/fE9VhB
UNIQUE TOOL: Trustee Seeks Approval to Hire Auctioneers
-------------------------------------------------------
Richardo Kilpatrick, the Chapter 11 trustee for Unique Tool &
Manufacturing Co., Inc., seeks approval from the U.S. Bankruptcy
Court for the Northern District of Ohio to employ Presses for
Industry, LLC and Hilco Industrial, LLC as auctioneers.
The trustee requires the services of the firms to market and sell
some of Debtor's assets located at 100 Reed Drive, Temperance,
Mich.
The auctioneers are entitled to a buyer's premium of 16 percent of
the gross sale proceeds and reimbursement of up to $35,000 for
work-related expenses incurred regardless of whether or not the
assets are sold.
Chip Thornton, an auctioneer at Presses for Industry, and Sarah
Baker, a managing member of Hilco Industrial, disclosed in court
filings that the firms are "disinterested persons" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firms can be reached through:
Chip Thornton
Presses for Industry, LLC
20501 Hoover Rd.
Detroit, MI 48205-1075
Telephone: (313) 839-9300
Facsimile: (313) 839-9600
Email: chip@pfisales.com
- and –
Sarah K. Baker
Hilco Industrial, LLC
5 Revere Drive, Suite 206
Northbrook, IL 60062
Telephone: (847) 509-1100
Facsimile: (847) 509-1150
Email: sbaker@Hilcoglobal.com
About Unique Tool & Manufacturing
Unique Tool & Manufacturing Co., Inc. is a custom metal stamping
company formed in 1963, which supplies stampings to the satellite,
communications, electrical, appliance, refrigeration and automotive
industries throughout the United States, Canada and Mexico. It
specializes in tool and die manufacturing, brazing, welding,
plating and more. Visit http://www.uniquetool.comfor more
information.
Unique Tool & Manufacturing sought Chapter 11 protection (Bankr.
N.D. Ohio Case No. 19-32356) on July 26, 2019. At the time of the
filing, Debtor estimated up to $50,000 in assets and $1 million to
$10 million in liabilities. The Hon. Mary Ann Whipple is the case
judge.
Diller and Rice, LLC, is Debtor's legal counsel.
The U.S. Trustee for Region 9 appointed a committee of unsecured
creditors on Sept. 5, 2019. The creditors' committee retained
Wernette Heilman, PLLC as its legal counsel.
Richardo I. Kilpatrick was appointed as Debtor's Chapter 11
trustee. The trustee is represented by Stuart A. Gold, Esq.
VALERITAS HOLDINGS: Walker Buying Riverdale Property for $802K
--------------------------------------------------------------
West Village Holdings, LLC, asks the U.S. Bankruptcy Court for the
Northern District of Georgia to authorize the private sale of its
real property located at and near 7335 Old National Highway,
Riverdale, Georgia to Frederick Walker for $801,757.
The Debtor is a Georgia limited liability company that owns the
Property. It has engaged in negotiations to sell Property to the
Buyer who is anxious to close on the purchase of the Property.
The Debtor initiated an adversary proceeding on Feb. 12, 2019 (Case
No. 19-05116-lrc) against ONH Holdings, LLC, the entity with an
alleged security interest in the Property. ONH claims it has a
first priority security interest in the Property based on a
Security Deed and Agreement dated April 21, 2008 and a second
priority security interest based on another Security Deed and
Agreement dated Dec. 29, 2011. The Debtor contends that both the
2008 Security Deed and the 2011 Security Deed are subject to the
7-year reversion period and that both deeds reverted to Debtor.
On March 31, 2020, the Court entered an order holding that the 2008
Security Deed had reverted but that the 2011 Security Deed had not
yet reverted. Both tje Debtor and ONH filed motion requesting the
Court to reconsider its March 31 Order.
No other entities assert liens on the Property.
The Debtor asks entry of an order authorizing it to sell the
Property to Mr. Walker on the terms set forth in the Purchase
Agreement free and clear of liens, claims, and encumbrances, with
all liens or security interests of the Secured Creditors attaching
to the proceeds of the sale. The Debtor asks the Court to approve
the Purchase Agreement as a private sale.
As shown in the Agreement for Purchase and Sale of Real Estate, the
Debtor proposes to sell the Property for $801,757. It submits that
the proposed purchase price amounts to fair market value for the
Property.
The Debtor has determined that selling the Property pursuant to the
Purchase Agreement is in the best interests of the estate and its
creditors because such a sale will enable the Debtor to obtain
much-needed liquidity necessary to satisfy the claims of creditors
and to manage its affairs and administer the case.
Finally, it asks that the order granting the Motion be effective
immediately by providing that the 14-day stays applicable under
Rule 6004(h) of the Bankruptcy Rules be waived.
A hearing on the Motion was held on July 30, 2020 at 10:15 a.m.
A copy of the Agreement is available at
https://tinyurl.com/y8sbvg7r from PacerMonitor.com free of charge.
About West Village Holdings
West Village Holdings, LLC is a real estate lessor whose principal
assets are located at 7335 Old National Highway, Riverdale, Ga.,
and 0 Jonesboro Road, Riverdale, Ga., with a comparable sale value
of $3.30 million.
West Village Holdings sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 19-50013) on Jan. 1,
2019. At the time of the filing, the Debtor disclosed $3,309,900
in assets and $228,500 in liabilities. The Debtor tapped Wiggam &
Geer, LLC as its bankruptcy counsel, and Clark Law Group as its
special counsel.
VINCENT L. PHILLIPS: Judge Won't Reconsider Ruling
--------------------------------------------------
Bankruptcy Judge S. Martin Teel, Jr., issued an order denying
Debtor Vincent L. Phillips' motion to reconsider an order denying
his motion to quash U.S. Bank's notice of termination of the
automatic stay.
On May 28, 2020, the court entered an Order Denying Debtor's Motion
to Quash U.S. Bank's Notice of Termination of Automatic Stay based
on the debtor's failure timely to comply with the court's May 12,
2020 order. On June 7, 2020, the debtor filed a Motion for
Reconsideration of that Order.
The debtor contends that he timely complied with the court's May 12
order, but he plainly did not, according to the Court. The debtor
argues that U.S. Bank will not accept his attempts to make payments
on the loan secured by the Ord Street property. U.S. Bank confirmed
this. However, the court's Order Denying Debtor's Motion to Quash
stated that "U.S. Bank . . . is free to withdraw its Notice of
Termination of Automatic Stay in exchange for whatever
consideration it is willing to accept from the debtor (for example,
the debtor's bringing current his post-petition payments on the
loan held by U.S. Bank)." It follows that U.S. Bank was and is
under no obligation to do so. Thus, U.S. Bank's refusal to accept
further payments cannot be cause for reconsideration.
A copy of the Court's Order dated July 20, 2020 is available at
https://bit.ly/2P2qzog from Leagle.com'
The bankruptcy case is In re: VINCENT L. PHILLIPS, Chapter 11,
Debtor, Case No. 19-00450 (Bankr. D.D.C.).
VIRTUAL CITADEL: Northeast Tech Buying IP Assets for $425K
----------------------------------------------------------
Virtual Citadel, Inc. and affiliates ask the U.S. Bankruptcy Court
for the Northern District of Georgia to authorize sale of
approximately 25,000 Internet Protocol Addresses, along with
associated Autonomous System Numbers ("ASNs"), and related
equipment to Northeast Technology Solutions II, LLC or its designee
for $425,000,
The sale of the Debtors' bitcoin mining operations and related real
estate closed on June 5, 2020. The Debtors no longer have any
ongoing business operations; however, Debtor Virtual Citadel still
owns and holds the IP Assets. The Motion proposed to sell them.
Specifically, the Debtors have located one proposed buyer for the
IP Assets, the Purchaser, who has agreed to purchase the IP Assets
from the Debtor for $425,000, as set forth in more detail in the
Asset Purchase Agreement.
The process of selling or transferring an IP Assets involves an
interaction among the Seller, the Buyer, and an organization known
as the American Registry for Internet Numbers, Ltd. ("ARIN"). ARIN
is a non-profit, member-based organization formed in 1997 that
supports the operation and growth of the internet. ARIN's core
service is the management and distribution of IP Addresses and
Autonomous System Numbers. ARIN exclusively performs this core
service in the United States, Canada, and many Caribbean and North
Atlantic islands.
An IP address cannot be "owned" in a physical sense; rather, to own
an IP address means to have the exclusive right to register the IP
Address with ARIN. By the Motion, the Debtors asks to transfer the
exclusive right to register the IP Addresses with ARIN from the
Debtor to the Purchaser.
The Debtors have almost completed the process of liquidating all of
their assets and winding up their affairs and no longer need the IP
Assets. They, in their business judgment, believe that the
Purchase Price is fair and reasonable consideration for the IP
Assets.
The Debtors propose to remit the sale proceeds from the sale of the
IP Assets, after payment of closing costs and expenses, to Bay
Point Capital Partners II LLC, the Debtors' DIP Lender, which holds
a first priority lien on substantially all of their assets. They
believe that this arrangement will benefit their estates because it
will facilitate their liquidation of their remaining assets and the
wind up of their affairs.
A hearing on the Motion was held on July 30, 2020 at 11:00 a.m.
A copy of the APA is available at https://tinyurl.com/y8cbk5fp from
PacerMonitor.com free of charge.
About Virtual Citadel
Virtual Citadel, Inc. -- https://vcitadel.com -- is a comprehensive
turnkey enterprise hosting provider in Atlanta, Georgia. vCitadel
owns and operates tier 1 and tier 2 data centers throughout the
metro Atlanta area. Founded in 1990, vCitadel provides custom
hosting solutions for cloud, data, and co-location applications.
Virtual Citadel, Inc., and four affiliates sought Chapter 11
protection (Bankr. N.D. Ga. Case No. 20-62725) on Feb. 14, 2020.
The Debtors tapped POLSINELLI PC as counsel; BAKER DONELSON
BEARMAN, CALDWELL & BERKOWITZ, PC as conflicts counsel; and GLASS
RATNER as financial advisor.
WEST 41 PROPERTY: 440 W Buying New York Property for $40.3M
-----------------------------------------------------------
West 41 Property, LLC, asks the U.S. Bankruptcy Court for the
Southern District of New York to authorize the sale of the real
property located at 440 West 41st Street, New York, New York, to
440 W 41 Owner, LLC for $40.3 million, pursuant to the Agreement of
Purchase and Sale.
Pursuant to the Plan, all creditors, other than SF IV Bridge I, LP
("Stabilis"), the Reorganized Debtor's senior secured lender, have
been paid their distributions in full. Stabilis distribution was
to be paid out of the proceeds of the sale of the Reorganized
Debtor's real property after the property was auctioned after a
marketing period of six to nine months.
Pursuant to section 5.2 of the Plan, the Reorganized Debtor was
authorized under the Plan to retain a broker to market the Property
in order to sell it at an auction to be conducted in accordance
with bid procedures approved by the Court. Further pursuant to the
Bid Procedures and the Confirmation Order, Stabilis was approved as
the Stalking Horse Bidder for the purchase of the Property in the
event there are no other offers for the Property by the expiration
of the qualified bidder deadline, the Reorganized Debtor was
authorized to close on a sale transaction with Stabilis (or its
assignee).
After marketing the Property for sale for an extended period, the
Reorganized Debtor received no qualified bids. Notwithstanding,
Stabilis' back up bid, as the senior lender, it expressed its
preference to continue the marketing effort rather than to become
the owner of the property pursuant to its stalking horse bid.
Inasmuch as no other party in interest was impacted by the effort,
the Plan Administrator continued its effort to find a third-party
purchaser for the property under the Plan.
Ultimately, the Purchaser executed a Sale Agreement to purchase the
Property for $40.3 million pursuant to section 5.2 of the Plan.
Stabilis has consented to the sale and agreed to waive any rights
it may have as the Stalking Horse Bidder under its stalking horse
contract which will be deemed terminated upon the Court's approval
of the contract between the Plan Administrator and the Purchaser.
By the motion, the Reorganized Debtor now asks entry of the Sale
Order as contemplated in the Plan approving the proposed sale of
the Property to the Purchaser pursuant to the Sale Agreement. The
sale will be free and clear of any and all liens, claims or
encumbrances.
The Confirmation Order, at pages 17-18, tracks the language of the
Plan and further provides for the office of the City Registrar in
New York County to accept any recordable documents generated in
connection with the sale without the payment of transfer taxes. In
accordance with the Plan and Confirmation Order, the Sale Order
provides for the exemption under section 1146(a) of the Bankruptcy
Code.
The Sale Order has been reviewed by both Stabilis and the Purchaser
prior to the filing of the Motion. However, the Purchaser has
reserved its right to provide additional comments prior to the sale
hearing.
The Plan Administrator asks that the order approving the sale be
effective immediately by providing that the 14-day period under
Bankruptcy Rule 6004(h) is waived.
A hearing on the Motion was held on July 30, 2020 at 10:00 a.m.
About West 41 Property
Headquartered in New York, New York, West 41 Property LLC owns the
real property and improvements located at 440 West 41st Street,
New
York, New York.  The Property is improved by a 13 story
building
which currently contains multi-family residential apartments and
several commercial units which are in the process of being
renovated. The Property has 96 residential units and will have,
when renovations are completed, a presently undetermined number of
commercial units.
West 41 Property filed for Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 16-22393) on March 25, 2016, estimating its
assets at up to $50,000 and debts at between $10 million and $50
million. The petition was signed by David Goldwasser, managing
member, GC Realty Advisors LLC.
Judge Robert D. Drain presides over the case.
Arnold Mitchell Greene, Esq., at Robinson Brog Leinwand Greene
Genovese & Gluck, P.C., serves as the Debtor's bankruptcy counsel.
The Debtor also employs Lawrence J. Berger P.C. as Special Tax
Counsel, Bedford Soumas LLP as Special Litigation Counsel with
respect to Landlord-Tenant matters, Richard A. Solomon as Special
Litigation Counsel with respect to City Building, fire Department
and ECB matters, and Fasten Halberstam LLP as Accountants.  J&C
Lamb Management is the Debtor's property manager.
On Feb. 27, 2017, the Court confirmed the Debtor's Plan. The Plan
was declared effective on Feb. 28, 2017.
WESTSIDE LIQUIDATORS: Unsecureds to Receive 100% Over 10 Years
--------------------------------------------------------------
Westside Liquidators of Jax, Inc., filed with the U.S. Bankruptcy
Court for the Middle District of Florida, Jacksonville Division, a
Combined Disclosure Statement and Chapter 11 Plan of Reorganization
dated June 25, 2020.
Class 5 consists of the All General Unsecured Creditors. In full
satisfaction of Class 5 Claims, the Debtor will pay 100% of the
allowed General Unsecured Claims (Est. $103,721.25) over 120 months
with the federal judgment interest rate as of the date of the
filing of the Plan. Payments in this class will be made quarterly.
This class includes Proof of Claim 4 filed by Swift Financial, LLC
as servicing agent for WebBank. No prepayment penalty shall apply
to this Class. Estimated total quarterly payments are $2,727.00.
Class 6 consists of any claim held by Equity Holders/Insiders.
Equity Holders and Insiders will receive no distribution under this
Plan but will retain the same ownership as they did prior to the
Petition Date.
Given the refined debt service as provided in this Plan, the Debtor
will continue its operations which will cover the required new debt
service payments. Pursuant to Section 1141 of the Bankruptcy Code,
the property of the Estate of the Debtor shall vest in the Debtor.
The Plan provides for an orderly and prompt distribution to holders
of Allowed Claims and the satisfaction of all asserted Claims. Any
alternative other than confirmation of the Plan would result in
extensive delays and increased administrative expenses resulting in
smaller distributions to holders of Allowed Claims proposed under
the Plan.
A full-text copy of the Disclosure Statement dated June 25, 2020,
is available at https://tinyurl.com/yaevgwpw from PacerMonitor.com
at no charge.
The Debtor is represented by:
Law Offices of Jason A. Burgess
1855 Mayport Road
Atlantic Beach, Florida 32233
Tel: (904) 372-4791
About Westside Liquidators
Westside Liquidators of Jax, Inc., a Florida Corporation sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.
Fla. Case No. 20-01208) on April 2, 2020. At the time of the
filing, Debtor disclosed assets of between $100,001 and $500,000
and liabilities of the same range. Debtor is represented by The
Law Offices of Jason A. Burgess, LLC.
WFO EXPRESS: Seeks Approval to Hire Ken McCartney as Legal Counsel
------------------------------------------------------------------
WFO Express Inc. seeks approval from the U.S. Bankruptcy Court for
the District of Wyoming to employ the Law Offices of Ken McCartney,
P.C. to handle its Chapter 11 case.
The firm's legal services will be provided mainly by Ken McCartney,
Esq., who will be paid at the rate of $365 per hour. His paralegal
staff will be paid $95 per hour.
In addition, Debtor will be charged for work-related expenses
incurred by the firm.
Mr. McCartney disclosed in court filings that he is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The attorney can be reached at:
Ken McCartney, Esq.
Law Offices of Ken McCartney, P.C.
Post Office Box 1364
Cheyenne, WY 82003
Telephone: (307) 635-0555
Facsimile: (307) 635-0585
Email: bnkrpcyrep@aol.com
About WFO Express
WFO Express Inc., a licensed and bonded freight shipping and
trucking company, filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Wyo. Case No.
20-20351) on July 20, 2020. WFO Express President Sonny Zack
Porter signed the petition. Judge Cathleen D. Parker oversees the
case. The Law Offices of Ken McCartney, P.C. serves as Debtor's
legal counsel.
WJA ASSET: Sept. 3 Plan Confirmation Hearing Set
------------------------------------------------
On June 25, 2020, the U.S. Bankruptcy Court for the Central
District of California, Santa Ana Division, held a hearing to
consider approval of the Disclosure Statement Describing Chapter 11
Plan of Liquidation of WJA Secure Real Estate Fund, LLC proposed by
WJA Secure Real Estate Fund, LLC. Judge Scott C. Clarkson approved
the Disclosure Statement and ordered that:
* Sept. 3, 2020, at 11:00 a.m. is the hearing to consider
confirmation of the Chapter 11 Plan of Liquidation of WJA Secure
Real Estate Fund, LLC.
* Aug. 6, 2020, at 5:00 p.m. is the deadline to submit all
Ballots accepting or rejecting the Plan.
* Aug. 6, 2020, at 5:00 p.m. is the deadline to file and serve
any objection to confirmation of the Plan.
* Aug. 27, 2020, is the deadline for any objecting party wishing
to reply to the Debtor's brief in support of confirmation of the
Plan.
A copy of the order dated June 25, 2020, is available at
https://tinyurl.com/yd7ab2c9 from PacerMonitor.com at no charge.
Attorneys for Debtor:
SMILEY WANG-EKVALL, LLP
Lei Lei Wang Ekvall
Philip E. Strok
Kyra E. Andrassy
Robert S. Marticello
3200 Park Center Drive, Suite 250
Costa Mesa, California 92626
Telephone: 714 445-1000
Facsimile: 714 445-1002
E-mail: lekvall@swelawfirm.com
pstrok@swelawfirm.com
kandrassy@swelawfirm.com
rmarticello@swelawfirm.com
About WJA Asset Management
Luxury Asset Purchasing International, LLC, et al., are part of a
network of entities or "Funds" formed to offer a range of
investment opportunities to individuals. Many of the existing
funds are performing and some Funds had substantial gains. However,
certain Funds, i.e., those invested in private trust deeds secured
by real estate, suffered losses.
William Jordan Investments, Inc. ("Advisor"), is a registered
investment advisor. Laguna Hills, California-based WJA Asset
Management, LLC ("Manager"), is the managing member of Luxury, et
al. William Jordan was the president and sole owner of Advisor and
was the sole member and manager of Manager.
On May 18, 2017, Luxury and its affiliates filed voluntary
petitions under Chapter 11 of the United States Bankruptcy Code.
On May 25, 2017, four other affiliated filed voluntary Chapter 11
petitions. On June 6, 2017, CA Real Estate Opportunity Fund III
filed its Chapter 11 petition. The Debtors' cases are jointly
administered under Bankr. C.D. Cal. Lead Case No. 17-11996, and the
Debtors continue to operate their businesses and manage their
affairs as DIP.
Pursuant to court orders, Howard Grobstein is now serving as the
chief restructuring officer of the Debtors and Mr. Jordan no longer
has any ongoing role in the Debtors' operations.
At the time of the filing, WJA estimated assets of less than
$500,000 and liabilities of $1 million to $10 million.
Judge Scott C. Clarkson presides over the cases.
Lei Lei Wang Ekvall, Esq., Philip E. Strok, Esq., Robert S.
Marticello, Esq., and Michael L. Simon, Esq., at Smiley
Wang-Ekvall, LLP, serve as counsel to the Debtors. Ann Moore of
Norton Moore Adams has been tapped as special counsel. Elite
Properties Realty is the broker.
XEROX HOLDINGS: Moody's Assigns Ba1 CFR, Outlook Negative
---------------------------------------------------------
Moody's Investors Service assigned a Ba1 Corporate Family Rating,
Ba1-PD Probability of Default Rating, and an SGL-1 speculative
grade liquidity rating to Xerox Holdings Corporation, the parent
holding company of Xerox Corporation. Moody's also assigned a Ba1
rating to Xerox Holdings' proposed senior unsecured notes. The
outlook is negative. As part of the rating actions, the CFR, PDR,
and SGL rating of Xerox Corporation were withdrawn. All other
ratings for Xerox Corporation were affirmed. The proposed notes
will be issued by Xerox Holdings and used to refinance existing
notes of Xerox Corporation that mature in the second half of 2020.
Ratings for the proposed notes reflect the guarantee provided by
Xerox Corporation resulting in the new senior unsecured notes of
Xerox Holdings being pari passu with the existing senior unsecured
notes of Xerox Corporation in respect of the assets of Xerox
Corporation. Going forward, Moody's expects Xerox Holdings will be
the issuer of new debt instruments as debt at Xerox Corporation is
refinanced. Ratings also assume that the final transaction
documents will not be materially different from draft legal
documentation reviewed by Moody's to date and assume that these
agreements are legally valid, binding and enforceable.
Rating Actions:
Assignments:
Issuer: Xerox Holdings Corporation
Corporate Family Ratings, Assigned Ba1
Probability of Default, Assigned Ba1-PD
NEW Proposed Gtd Senior Unsecured Notes, Assigned Ba1 (LGD4)
Speculative Grade Liquidity Rating, Assigned SGL-1
Affirmations:
Issuer: Xerox Corporation
Senior Unsecured Shelf, Affirmed (P)Ba1
Senior Unsecured Bank Credit Facility, Affirmed Ba1 (LGD4)
Senior Unsecured Commercial Paper, Affirmed NP
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 (LGD4)
Withdrawals:
Issuer: Xerox Corporation
Corporate Family Rating, Withdrawn, previously rated Ba1
Probability of Default Rating, Withdrawn, previously rated Ba1-PD
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-1
Outlook Actions:
Issuer: Xerox Holdings Corporation
Outlook, Negative
Issuer: Xerox Corporation
Outlook, Remains Negative
RATINGS RATIONALE
Ratings for Xerox Holdings reflect continued uncertainty about the
company's ability to stabilize and grow its revenue base over the
next few years given the secular decline in copier and printing
demand as well as intense global competition. Beyond the impact of
COVID-19 and the global recession, Moody's expects Xerox Holdings
will be challenged to stabilize revenues in the absence of an
unlikely fundamental change in the company's revenue mix or market
share. Xerox Holdings' top line faces continuing erosion due to a
secular decline in copier and printing demand in developed
countries combined with new equipment and service offerings from
competing providers, a few of whom have deeper financial pockets,
more stable revenues, or exposure in higher growth Asian markets.
Through the first half of 2020, revenues for Xerox Holdings have
declined in the mid 20% range due to the impact of COVID-19 and the
global recession. "Moody's expects revenue and EBITDA to continue
declining for the remainder of 2020 followed by a return to growth
in 2021; however, the company has been able to generate free cash
flow and has maintained significant liquidity which supports Xerox
Holdings' ability to recover when the global recession abates and
demand for IT equipment, supplies and services strengthens," said
Carl Salas, Moody's senior credit officer.
Xerox Holdings' Ba1 CFR is supported by the company's good market
position in its core mid-range print and document outsourcing
markets as well as robust liquidity and positive adjusted free cash
flow metrics. Excluding the impact of COVID-19, more than 75% of
Xerox Holdings' revenue is typically derived from post-sale
activities that include document outsourcing, managed print
services, maintenance service, supplies (toner and paper), and
finance income. These elements come with higher operating margins
and provide some revenue predictability.
Moody's recognizes the importance of providing customer financing
as part of Xerox Holdings' overall selling proposition as it
provides a competitive advantage and greater flexibility in
structuring large technology purchases; however, financing
equipment receivables weigh on the company's risk assessment due to
the ongoing need to manage sizable debt maturities and cost of
funding.
Ratings for the senior unsecured notes and credit facility (Ba1,
LGD4) incorporate the overall probability of default of the
company, as reflected in the PDR of Ba1-PD and Moody's expectation
for an average family recovery in a default scenario. The assigned
SGL-1 rating reflects the company's very good liquidity, supported
by $2.3 billion of cash as of June 30, 2020, positive free cash
flow despite the impact of COVID-19, and an undrawn $1.8 billion
revolving credit facility.
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, due to the substantial
implications for public health and safety. Given Xerox Holdings'
exposure to the global economy, the company remains vulnerable to
shifts in market demand and sentiment in these unprecedented
operating conditions.
Demand for office copiers and printers is experiencing a secular
decline reflecting substitution of traditional physical copies with
digital documents and the social trend to go paperless. Governance
is also a key consideration given the company's aggressive
financial policies. Earlier this year, Xerox Holdings' proposal to
acquire HP Inc. was aggressive from an operating and financial
perspective.
In addition, the company established a new holding company, Xerox
Holdings Corporation, with the intent of providing strategic,
operational, and financial flexibility. Xerox Holdings guarantees
the credit facility of Xerox Corporation but does not guarantee the
senior notes of Xerox Corporation which could favor shareholders,
holders of Xerox Holdings' new notes, and revolver lenders at the
expense of Xerox Corporation noteholders.
Xerox Holdings' board is comprised of seven members of which six
are considered independent. Xerox Holdings' shareholder base is
diversified with funds of Icahn Associates and Vanguard holding 10%
to 11% of outstanding shares and other investment firms owning 7.5%
or less.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook reflects the persistent pressures on Xerox
Holdings' core copier and printing business as well as execution
challenges, especially if management's operating and strategic
plans include sizable restructuring charges, incremental
investments, or relaxation of historical capital allocation policy.
The outlook could be changed to stable if the company demonstrates
progress in restoring revenues to approach pre-pandemic levels
while also restoring operating margins and free cash flow
generation.
Xerox Holdings' ratings could be upgraded with business execution
that leads to consistent revenue growth, stable to improving
operating margins, and growing free cash flow. An upgrade would
also require conservative financial discipline, ensuring classes of
unsecured debt at Xerox Corporation and Xerox Holdings have similar
instrument ratings despite potentially asymmetric investment
activities, and maintaining the asset quality of its finance
operations while reducing the refinancing risk associated with
finance liabilities. These results would be evidenced by achieving
and maintaining adjusted operating margins in the low double-digit
percentage range, adjusted total debt to EBITDA approaching 1.75x,
and improving free cash flow generation.
Ratings could be downgraded if Xerox Holdings is unable to restore
and stabilize revenues approaching pre-pandemic levels, or
operating margins or other credit metrics weaken after mid-2021.
Downward rating action could also occur if liquidity deteriorates
including cash balances falling below $1 billion or revolver
availability falling below $1.2 billion, adjusted debt to EBITDA
exceeds 2.75x after mid-2021, or adjusted free cash flow to debt
falls below 15% after mid-2021.
Ratings could also be downgraded if the company incurs leverage to
undertake any combination of share buybacks, dividends or
acquisitions that leads to weakened credit metrics or if classes of
unsecured debt at Xerox Corporation or Xerox Holdings have
different instrument ratings reflecting asymmetric credit metrics.
The principal methodology used in these ratings was Diversified
Technology published in August 2018.
Xerox Holdings Corporation, with operations in roughly 160
countries, is a worldwide leader in document processing systems and
related supplies.
[*] Developments on SBA PPP Loans to Debtor Applicants
------------------------------------------------------
Sheila Armstrong, Melissa Boey, Kristen Campana, Julia Frost-Davis,
Jamal Hill and Rachel Mauceri, Veronica Roh, Matthew Edward
Schernecke, Edwin Smith, Sandra Vrejan and Craig Wolfe of Morgan
Lewis wrote an article on JD Supra titled "Debtors Need Not Apply?
Continuing Developments on the SBA's Authority to Deny PPP Loans to
Debtor Applicants."
The Small Business Administration on April 24 issued an update to
an interim final rule, crystalizing its view that applicants that
have sought protection under the US Bankruptcy Code are not
qualified borrowers under the Paycheck Protection Program.
Subsequently, dozens of debtors have looked to the bankruptcy
courts for relief from the SBA's unilateral clarification. This
LawFlash covers debtor eligibility under the PPP as well as recent
legislation and key court decisions moving the needle in this
space.
Almost simultaneously with the SBA's release of its interim final
rule stating its view that debtors are not qualified PPP borrowers,
a Texas bankruptcy court temporarily enjoined the SBA's authority
to enforce that determination. The US Court of Appeals for the
Fifth Circuit vacated that decision after determining that the SBA
is protected by limited sovereign immunity. In the intervening
period, numerous debtors have looked to the bankruptcy courts for
relief, with most courts deciding the issues on the
merits—including one district court—leading to a split over the
SBA's discretion to deny PPP loans solely on the basis of a
borrower's bankruptcy. Meanwhile, debtors obtaining their PPP loans
prior to filing have seen few challenges to their requests to use
PPP proceeds to fund operations during bankruptcy.
Subsequent PPP legislation, including the Paycheck Protection
Program Flexibility Act of 2020 enacted on June 5, clarified
several points and further extended the maturity and forgiveness
period of the PPP, but did not address the ineligible debtor issue,
which continues to be fought in the courts. The second round of
funding of the PPP has not been exhausted and remains available for
eligible borrowers, although the deadline to borrow will expire
shortly.
THE CARES ACT AND DEBTOR ELIGIBILITY UNDER THE PPP
US President Donald Trump on March 27 signed into law the
Coronavirus Aid, Relief, and Economic Security (CARES) Act to
provide relief to individuals and businesses suffering economic
harm due to the coronavirus (COVID-19) pandemic.
The Paycheck Protection Program (PPP)—one of two business loan
programs created under the CARES Act—initially allocated $349
billion to lending institutions to provide qualifying businesses
with cash to cover payroll and other specified business expenses.
PPP loans are guaranteed by the federal government, and funds
expended in the eight weeks following loan disbursement are
forgivable if used solely for payroll and other permitted
business-related expenses. The initial PPP allocation was quickly
exhausted, and Congress subsequently approved an additional $310
billion infusion.
As enacted, the PPP—unlike other programs under the CARES
Act—contains no express limitation on the granting of loans to
debtors in bankruptcy. The CARES Act grants the Small Business
Administration (SBA) broad rulemaking authority, and the SBA
formulated the PPP borrower and lender applications and
accompanying instructions. Since the CARES Act became effective,
the SBA has from time to time published clarifying guidance
relating to both the scope of the PPP and the application process.
Prior to April 24, no supplemental interim guidance from the SBA
expressly clarified that bankrupt borrowers need not apply. The
PPP's Borrower Application Form, however, requires applicants to
disclose whether they are "presently involved in any bankruptcy"
and notes that if the answer is yes, "the loan will not be
approved." The Lender Application Form similarly asks lenders
whether the applicant has certified that "neither the Applicant nor
any owner . . . [is] presently involved in any bankruptcy," noting
that the loan "cannot be approved" if the answer is no. As such,
based solely on the applications, an applicant’s bankruptcy is a
disqualifying fact.
Under an update to the Interim Final Rule[1] issued on April 24,
the SBA confirmed that debtors are not eligible PPP borrowers,
stating that bankruptcy would present an "unacceptably high risk of
an unauthorized use of funds or non-repayment of unforgiven loans."
In reaching its conclusion, the SBA relied on the Bankruptcy
Code’s policy against compelling an entity to make a loan or
financial accommodation in bankruptcy. The Interim Final Rule also
requires applicants that seek bankruptcy protection while their
applications are pending to notify their lenders and withdraw their
applications. This would avoid potential circumvention of the rule
by applicants that wait until after an application is submitted to
file for bankruptcy.
LOOKING TO THE COURTS FOR RELIEF
The first decision on the scope of the SBA's authority to exclude
debtors from PPP eligibility was issued by the Bankruptcy Court for
the Southern District of Texas on April 24, when Judge David Jones
found that the Bankruptcy Code likely prevents the SBA from
discriminating against potential borrowers strictly on the basis of
a pending bankruptcy and that the denial of loans on this basis
probably exceeds the SBA's rulemaking authority. That court
subsequently issued a preliminary injunction that echoes the TRO,
although the effectiveness of that injunction was stayed pending an
expedited appeal—and was ultimately vacated on June 22, when the
Fifth Circuit determined that the Small Business Act provided the
SBA with limited sovereign immunity that stripped the courts of
injunctive powers. In the period between the bankruptcy court’s
initial order and the Fifth Circuit's order vacating the
preliminary injunction, several courts hearing the issue have split
on the scope of the SBA’s authority, as well as the courts' own
authority to intervene—and to enjoin the SBA.
The Hidalgo County EMS Complaint
The bankruptcy of Hidalgo County Emergency Service Foundation
(Hidalgo County EMS) led to the first decision in the PPP
eligibility debate. Hidalgo County EMS is a medical transportation
provider for a large portion of southern Texas, providing air and
ground and 911 emergency responder services. Hidalgo County EMS
sought bankruptcy protection in October 2019 and has continued to
operate in chapter 11, including during the COVID-19 crisis.
Hidalgo County EMS, which earns revenue through the transport of
patients, has used cash collateral pledged to the Internal Revenue
Service to fund operations during its bankruptcy. Although calls
for ambulance services in the region have diminished during the
COVID-19 crisis, Hidalgo County EMS has maintained full staffing
throughout its bankruptcy.
On April 3, when the PPP opened, Hidalgo County EMS applied for a
loan of approximately $2.6 million from its bank, Plains Capital
Bank, indicating on the borrower application that it is in
bankruptcy. Hidalgo County EMS asserted that the loan would be used
for working capital purposes permitted under the PPP. On April 9,
the bank denied the loan on the basis that Hidalgo County EMS's
bankruptcy rendered it ineligible under the PPP.
The Bankruptcy Code prohibits a governmental unit from
discriminating against debtors solely on the basis that they have
sought bankruptcy protection. Among other things, section 525(a) of
the Code states that a governmental unit
may not deny, revoke, suspend, or refuse to renew a license,
permit, charter, franchise, or other similar grant to, condition
such a grant to, discriminate with respect to such a grant against
. . . a person that is or has been a debtor under this title . . .
solely because such bankrupt or debtor is or has been a debtor
under this title . . .
On April 22, following the announcement of additional PPP funding,
Hidalgo County EMS filed a complaint alleging that the SBA had
violated its own authority, as well as section 525 of the
Bankruptcy Code, in denying Hidalgo County EMS's PPP application
solely on the basis of its bankruptcy. Hidalgo County EMS asked the
bankruptcy court for broad declaratory and injunctive relief,
including to determine that the SBA had exceeded its authority by
including the disqualifying bankruptcy question in the borrower
application, as none of the PPP, Section 7(a) of the Small Business
Act, or (at the time) the SBA’s own guidance had so
contemplated.
The SBA's responsive brief asserted that the SBA violated neither
section 525 of the Bankruptcy Code nor its own authority. The SBA
argued that section 525(a) has been narrowly construed by courts
and does not apply to lending or loan guarantees; rather, section
525(c) applies and only in the context of student loans and grants,
not the PPP. Second, the SBA argued that the bankruptcy exclusion
was within its broad grant of authority—authority that was
expanded under the CARES Act—and that, while nothing in the CARES
Act expressly excludes debtors in active bankruptcy cases, nothing
in the Act prohibits such an exclusion, either. The SBA also
asserted that the Small Business Act contained a narrow waiver of
sovereign immunity that protected it from injunctive relief. While
section 634(b)(1) of the Small Business Act generally permits suits
against the SBA in courts with proper jurisdiction, "no attachment,
injunction, garnishment, or other similar process" may issue.
At a hearing on April 24, the bankruptcy court found Hidalgo County
EMS's argument compelling enough to grant a temporary restraining
order (TRO), finding that Hidalgo County EMS had shown a
substantial likelihood of success on both its claims. The
bankruptcy court, however, was not willing to extend relief beyond
the debtor before it. On April 25, the court entered a temporary
restraining order authorizing Hidalgo County EMS, in reapplying for
a loan under the PPP, to strike the portion of the PPP application
relating to Hidalgo County EMS's bankruptcy status, and ordering
the SBA to implement all aspects of the PPP without regard to
Hidalgo County EMS's bankruptcy proceeding. The bankruptcy court
did not conclude that Hidalgo County EMS is otherwise qualified to
receive a PPP loan or find that the SBA could not decline an
application on other grounds.
On May 8, following a hearing, the bankruptcy court issued a
preliminary injunction consistent with its April 25 temporary
restraining order, rejecting the SBA's sovereign immunity argument
and finding that the PPP is not a loan program, but more like a
"conditional grant" or support program. The SBA appealed, and on
May 12, the district court stayed the effectiveness on the
bankruptcy court's order pending an expedited appeal, and the case
was certified for direct appeal to the Fifth Circuit. On June 22,
without oral argument, the Fifth Circuit issued a three-page
opinion vacating the bankruptcy court's preliminary injunction,
noting that binding Circuit precedent "absolutely prohibited" any
act by a court to enjoin the SBA. In so ruling, the Fifth Circuit
declined to accept Hidalgo County EMS's invitation to revisit or
create an exception to that bright-line rule "under the extreme
facts and highly compressed time frame presented" in the case.
Developments Following the Initial Hidalgo County EMS Decision
The Final Interim Rule was issued within hours of the bankruptcy
court hearing on the Hidalgo County EMS TRO, and prior to the entry
of the order in that case. Since the PPP's implementation, courts
in multiple districts have heard or been asked by debtors to enter
TROs on similar bases. Initially, the decision was fairly evenly
split: In addition to a second order from Judge Jones in the
Southern District of Texas, bankruptcy courts in the Districts of
Maine, New Mexico, Vermont, and the Eastern District of Kentucky
granted TROs, finding the SBA's determination to exclude debtors
arbitrary and capricious, particularly in light of continuing court
oversight of entities in bankruptcy. Bankruptcy courts in Delaware,
the Western District of Texas, and the Northern District of Ohio
took the opposite view. Since then, the tide seems to have turned.
The Bankruptcy Court for the District of Maine, which initially
granted a TRO to two hospitals, has recommended the denial of
further relief following further proceedings in those cases, and
has maintained a consistent stance in another case. Other recent
cases similarly have yielded a wave of denials of relief to
would-be borrower debtors on substantive grounds.
COURTS GRANTING RELIEF
* Like Judge Jones, Judge Colleen Brown of the Bankruptcy Court
for the District of Vermont granted relief to debtor Springfield
Hospital Inc., citing the nature of Springfield Hospital's
services, and extended the TRO after learning that the hospital had
obtained another $4 million in funding to give the parties time to
determine next steps. Since the extension of the initial TRO, the
parties have filed substantial briefings in connection with the
hospital's section 525(a) claims and presented oral arguments with
respect to those claims. On June 22, having found no material facts
in dispute, the court entered an order on summary judgment and a
permanent injunction in favor of the plaintiff. In doing so, Judge
Brown determined that First Circuit precedent, coupled with the
Bankruptcy Code's own waiver of sovereign immunity, did not
preclude her from issuing a "carefully crafted injunction."
* The Bankruptcy Court for the Western District of Tennessee
granted a preliminary injunction to Alpha Visions Learning Academy
(lead case: In re Jerry James Skefos). There, following the denial
of a PPP loan to non-debtor affiliate Alpha Visions, the bankruptcy
court held that the SBA had violated both section 525 and the APA.
In a portion of its order that figured prominently in Judge Brown's
Springfield Hospital opinion, the court also held that under Sixth
Circuit law, including recent non-bankruptcy related PPP precedent,
the SBA was not insulated by sovereign immunity. The SBA has
appealed.
* Judge Gregory Schaaf of the Bankruptcy Court for the Eastern
District of Kentucky took a position similar to Judge Jones with
respect to St. Alexius Hospital (lead case: Americore Holdings
LLC), noting that the St. Louis-based hospital provided services to
an otherwise underserved and depressed community. The debtor
plaintiff's application was subsequently approved and funded, and
the debtor dismissed the adversary proceeding.
* Judge Jones issued a second TRO in the cases of KP Engineering,
LLC and its affiliates on May 6. KP Engineering, a construction
company in the energy space, filed for bankruptcy in August 2019.
KP Engineering filed a plan and disclosure statement just as the
COVID-19 crisis was hitting the U.S., and was working toward an
exit from bankruptcy. The crisis, however, halted production from
foreign suppliers, and has threatened the reorganization. Judge
Jones followed the TRO with an agreed preliminary injunction on May
18, which authorized KP Engineering to file a PPP application any
time on or after June 12, 2020 with the words "or involved in any
bankruptcy" stricken, and requiring the SBA to set aside
approximately $2.3 million of program proceeds. The order contains
findings noting (1) that PPP funds must be issued within 10
calendar days of loan approval, (2) that all loans under the PPP
must fund by June 30, and (3) the SBA's regulations prohibiting PPP
loans to debtors in bankruptcy (but acknowledging "a nationwide
split in bankruptcy court decisions concerning this prohibition").
Under the order, the funding of any PPP loan is also conditioned
upon the effectiveness of KP Engineering's plan, which was
confirmed on June 12, 2020.
KP Engineering's plan was expected to become effective on June 22,
2020. Whether the Fifth Circuit’s decision in Hidalgo County EMS
will disturb that process remains to be seen. The preliminary
injunction is set to expire on June 30, and the court has scheduled
a status hearing for the same date. Although the order is not
express, the timing suggests that the parties intend for a PPP loan
to fund prior to the June 30 expiration of the lending period under
the program once the debtor has effectively emerged from bankruptcy
protection.
* In the Organic Power bankruptcy, the Bankruptcy Court for the
District of Puerto Rico entered a TRO on May 8 permitting the
debtor to apply for a PPP loan, which was approved and funded. The
SBA filed a motion to dismiss, which has been contested, with the
preliminary injunction consolidated with the trial to be heard on
June 29.
* The Bankruptcy Court for the District of Arizona granted
declaratory relief on June 10, 2020 in the case of PCT
International Inc. (lead case: Andes Industries Inc.), finding that
the SBA had exceeded its statutory authority in promulgating PPP
applications containing the disqualifying language.
* Bankruptcy courts also issued injunctions in the bankruptcy
cases of Astria Health (Eastern District of Washington) and NRP
Lease Holdings, LLC (Middle District of Florida).
The courts in the foregoing cases declined to make an express
finding that the applicant debtor was, but for its bankruptcy,
otherwise qualified for a PPP loan. Only Judge David Thuma of the
Bankruptcy Court for the District of New Mexico, went further,
effectively ordering the SBA to grant the PPP loan application of
the Roman Catholic Church of the Archdiocese of Santa Fe, and
authorizing the Archdiocese to seek damages if the loan was not
granted. The SBA filed a notice of appeal on May 15. No further
proceedings have occurred before the district court.
COURTS DENYING RELIEF
While the PPP tally was initially fairly even, courts in May and
June have far and away determined that the SBA was within its
authority in promulgating the bankruptcy exception, and that it did
not violate the Bankruptcy Code in doing so. A survey of a few of
those cases follows:
* In an early decision that he acknowledged was difficult to
render, Judge Brendan Shannon of the Bankruptcy Court for the
District of Delaware reluctantly found that the denial of a PPP
loan to fast casual restaurant chain Cosi, Inc. was not
discrimination forbidden by section 525(a) of the Bankruptcy Code,
and that, absent some other applicable Code provision, he simply
didn't have the authority to grant the requested relief. Judge
Shannon also noted that unlike the debtor in Hidalgo County EMS,
the Cosi debtors were not the sole provider of urgent medical
transportation services in a rural area. The court offered to
entertain an emergency motion from the Cosi debtors to dismiss
their bankruptcy, an offer that has not yet been accepted. A motion
to dismiss is pending.
* In a pair of nearly identical TROs, Judge Michael Fagone of the
Bankruptcy Court for the District of Maine, echoed Judge Jones,
noting the urgent and exclusive nature of the services provided by
debtors Calais Regional Hospital and Penobscot Valley Hospital and
permitting them to apply for PPP loans without regard to their
debtor status. However, after hearing evidence at a May 27 trial,
Judge Fagone issued proposed findings of fact and conclusions of
law recommending the denial of relief with respect to all counts of
the hospitals’ complaint. Judge Fagone noted that while the SBA's
choices may cause seemingly harsh results, they are not illegal.
* Judge Fagone subsequently also denied a TRO to debtor Breda
LLC, the owner and operator of a high-end inn, because nothing in
Breda's complaint suggested they were likely to suffer immediate or
irreparable harm if they were denied access to a PPP loan. On June
22, the bankruptcy court issued findings of fact and conclusions of
law recommending the dismissal of Breda's complaint. The debtors in
a pair of cases consolidated before Judge Fagone, A.S. & B.C. Gould
& Sons and M.G. Transport, recently filed an amended complaint,
which is pending.
* One district court has also issued an opinion. The dioceses of
Rochester and Buffalo, New York, currently debtors in separate
bankruptcy cases, bypassed the bankruptcy courts and sought relief
directly from the District Court for the Western District of New
York. The district court has denied the relief. Subsequently, the
SBA filed a motion to dismiss the adversary proceeding, asserting
similar bases to those articulated in the Hidalgo County
proceeding. A declaration filed by John A. Miller, a senior SBA
employee, in support of the motion to dismiss articulated a "time
is of the essence" rationale for including the bankruptcy exclusion
in the PPP application, noting that a bright-line rule allowed the
SBA and potential lenders to avoid the time and expense of an extra
layer of inquiry, and also avoided intracreditor conflicts:
The purpose of a PPP loan is to help small businesses pay their
employees and maintain operations to allow them to restart quickly
over the next few months. SBA decided that this purpose would not
be served by including all bankruptcies. Certain creditors,
including administrative creditors, could assert claims to the PPP
loan funds that would interfere with its authorized uses and the
requirements for PPP loan forgiveness. SBA, in consultation with
the Department of the Treasury, determined there should be one
streamlined rule that applies to all debtors in bankruptcy to avoid
the need for case-by case-reviews.
* Even before the Fifth Circuit's order, Judge Jones' decisions
in the Southern District of Texas did not move his colleagues in
other Texas bankruptcy courts. Two judges in the Bankruptcy Court
for the Western District of Texas have denied TROs to debtors. In
the bankruptcy of educational software provider Asteria Education,
Inc., Judge Craig Gargotta found that there was no violation that
required a restraining order against the SBA. Judge Christopher
Mott followed suit in the bankruptcy of a restaurant chain, Trudy's
Texas Star Inc. Judge Mott, while recognizing that this was a harsh
result, noted that the SBA had created a bright-line rule
disallowing debtors to receive PPP loans. The Bankruptcy Court for
the Northern District of Texas denied similar relief in another
hospital case, Jack County Hospital District, declining to find
that the SBA’s exclusion of the debtor from the PPP was a
violation of the automatic stay.
The wave of denials has continued across numerous districts.[2]
EFFECT OF THE CHALLENGES ON OTHER PPP LOANS
The uncertainty generated by the temporary restraining order and
the SBA's latest guidance leaves both the SBA and potential
operating borrowers in current reorganization proceedings in
limbo.
The SBA has taken the position that its Interim Final Rule, issued
within its authority, clarifies any remaining question and moots
future challenges, clearly signaling that it does not wish to be a
provider of debtor-in-possession or exit financing. The split among
the courts as to the applicability of Bankruptcy Code section 525
begs the very issue of that authority—although most courts have
made short work of the issue. While the split led to expedited
appellate proceedings in Hidalgo County, limitations on liquidity
may make other appeals impracticable. In the meantime, while some
areas have reopened, the duration of COVID-19 business
interruptions and their long-term effect remains unclear, and has
led to increased pressure on small business owners.
The practical upshot is that reorganizing debtor applicants have
been left at a disadvantage—including to the extent they have
spent estate resources fighting the PPP battle. With cash flowing
on a first-come, first-served basis, and the PPP set to sunset
shortly, otherwise qualified debtors may miss a window of
opportunity. This seems incompatible with other PPP policy
directives geared to assist small and weakened businesses—in fact
requiring as a central component of the application process those
businesses to certify that the loan is "necessary to support the
[applicant's] ongoing operations."
What About Companies that File for Bankruptcy After Seeking – or
Receiving – a PPP Loan?
In addition to TRO proceedings, the lack of clarity in the SBA's
guidance is leading to other outcomes among debtors, including
those PPP recipients who filed for bankruptcy first, and asked PPP
questions later.
* In Elemental Processing LLC, a chapter 11 case involving a
cannabidiol processor, the debtor filed for bankruptcy after filing
its PPP application, and subsequently also reached an agreement on
debtor-in-possession financing. Prior to the filing, allegations of
mismanagement had landed operations in the hands of a receiver,
which the debtor sought to wrest back through a turnover motion.
After contested proceedings, the Bankruptcy Court for the Eastern
District of Kentucky determined to leave the case with the
receiver, overruling the debtor's request for approval of the DIP
financing, use of PPP proceeds, and the turnover. The agent to
Elemental's pre-petition secured lenders has sought dismissal of
the case, asserting among other things that the PPP loan was
fraudulently obtained. The dismissal was granted by the court on
May 15, pending the filing of a final report.
* In the Longview Power case, a prepackaged bankruptcy, the
debtor received approval of its PPP loan prior to its filing for
bankruptcy protection. The debtor has not disclosed anything
further regarding the receipt of disbursement of the PPP loan
proceeds, and the debtor has consensual authority to use cash
collateral pending the disposition of PPP loan proceeds, which the
debtor presumably has been using to pay employee wages and other
permitted expenses. No further details have been disclosed to the
court regarding their PPP loan. The debtors’ prepackaged
bankruptcy plan was confirmed on May 22.
* In Mountain States Rosen, LLC, the debtor filed for bankruptcy
on March 19, 2020—shortly before the CARES Act was signed into
law—and subsequently submitted an application for a $3.595
million PPP loan, which was approved and funded on April 17, 2020,
and from which certain amounts may have been disbursed. The debtor
filed a motion with the Bankruptcy Court for the District of
Wyoming on April 21, seeking authorization to use the loan for
ordinary course expenses, and to apply those amounts instead of
other cash collateral. On May 14, 2020, the bankruptcy court
granted the motion, authorizing the debtor to obtain the PPP loan
and use the proceeds of such loan to fund necessary expenses,
including payroll, benefits, utility payments, and other expenses.
A sale process is underway in the bankruptcy.
* In the Northern District of Ohio, Judge Alan Koschik issued a
preliminary injunction in favor of Weather King Heating and Air, an
HVAC company that had received funds post-petition in connection
with an issued PPP loan. Judge Koschik ruled that the SBA was not
to rescind, annul, or otherwise alter its prior approval of Weather
King's PPP loan based on its bankrupt status, and that the SBA was
to process its application for forgiveness in the ordinary course.
Subsequently, the SBA appealed the court's decision, and also filed
a motion for mandatory withdrawal of the case to the district
court. No developments have yet occurred at the district court
level.
* In several bankruptcies, the bankruptcy exclusion has led the
debtor to exit the bankruptcy process altogether, presumably in
order to apply for a PPP loan without being "involved in a
bankruptcy." Both the debtors in Advanced Power Technologies, LLC
(Bankr. S.D. Fl.) and Capital Restaurant Group (Bankr. N.D. Ga)
sought and were granted dismissals on an emergency basis. The
Advanced Power case, which had been filed in March 2020, was
dismissed without prejudice on April 28, 2020. In Capital
Restaurant Group, which was filed in October 2019, the bankruptcy
court enjoined the debtor from filing a subsequent Chapter 11
bankruptcy petition for one year from the April 28 dismissal, and
has required, among other things, the payment of certain
postpetition amounts owed. The court’s conditions to dismissal in
Capital Restaurant Group may be due to the duration of the case,
and to the expenses the debtor incurred during that period. More
recently, the Bankruptcy Court for the District of Maryland granted
similar relief in iThrive Health, LLC, and did the same in In re
Henry Anesthesia Assoc LLC, in each case to allow the debtor to
seek a PPP loan outside of bankruptcy.
In one case, the debtor has sought to reinstate its case following
a dismissal and subsequent receipt of a PPP loan. In Starplex Corp.
v. SBA (lead case: Blue Ice Investment LLC), the debtor sought a
dismissal following a determination that the district court had to
finally determine the issues relating to its eligibility for a PPP
loan. Following an uncontested dismissal of the bankruptcy and the
adversary proceeding, the non-debtor entity applied for and
received its PPP funding. On June 5, the debtors moved to reinstate
the chapter 11 proceedings, apparently after having their bank
transfer the PPP funds into their DIP account. The court has not
yet acted on the motion.
* On June 8, 2010, the Bankruptcy Court for the Middle District
of Florida issued a memorandum decision granting relief in favor of
Gateway Radiology Consultants, P.A., whose post-petition PPP
application was approved notwithstanding its debtor status
(apparently due to a lender change to the application). The SBA
objected after Gateway sought authority from the court to use the
PPP loan as post-petition financing. Following an objection from
the SBA, the bankruptcy court held that the SBA had exceeded its
authority "[b]y engrafting onto the Paycheck Protection Program a
requirement that Congress chose not to insist on" and that
Gateway’s debtor status was irrelevant. The court entered a
preliminary injunction order on June 22.
* Florida-based restaurant chain TooJay’s applied for and
closed its $6.4 million PPP loan before filing its bankruptcy
petitions in the Southern District of Florida on April 28. The
bankruptcy court has approved on an interim basis the ongoing use
of the PPP proceeds to fund the debtors’ ongoing operations
within the scope of permitted uses under the PPP, with a final
hearing currently scheduled for June 25, 2020. Due to the ongoing
effects of the pandemic, the TooJay's debtors have sought expedited
bankruptcy court approval of bidding procedures for a sale of
substantially all of their assets.
* Educational summer camp company Galileo Learning LLC, whose
summer 2020 season is another casualty of the COVID-19 crisis,
received a $2.54 million PPP loan on April 13, prior to its May 6
filing in the Northern District of California. Galileo also holds a
$500,000 Emergency Injury Disaster Loan that is secured by its
assets, including cash collateral. The bankruptcy court has granted
interim and final authority for Galileo to apply a portion of its
PPP loan to employee-related expenses.
* In the USA Rugby bankruptcy, Judge Brendan Shannon—who
previously overruled Cosi, Inc.’s request for a TRO—overruled
the SBA’s objection to the debtor's request to use PPP funds that
it had received post-petition. In its objection, the SBA noted the
disputed timing of the application—which may have been
post-petition—and expressed its concern that an order could be
interpreted to "require the SBA to guarantee funds that appear to
have been inappropriately obtained pursuant to the PPP."
The Interim Final Rule requires applicants who file for bankruptcy
protection while their applications are pending to notify their
lenders and withdraw their applications. But the Interim Final Rule
says nothing about debtors that receive funds immediately prior to
filing. The failure to address that circumstance seems to leave no
basis for disqualifying entities that receive funding on the
threshold of bankruptcy. The silence may be intentional, as
post-bankruptcy disqualification raises potential estate property,
stay violation, and cash collateral issues.
It remains to be seen whether the SBA will respect this bright
line, or seek to preclude loan forgiveness or enforcement by
lenders of their guarantees, including on the basis that a
borrower’s preparation for a potential filing is a disqualifying
present involvement in a bankruptcy. In contrast, the Federal
Reserve and the Treasury took a different approach with respect to
the Main Street Lending Program where an applicant is required to
certify as of the date of origination of a Main Street loan and
after giving effect to such loan, that it has the ability to meet
its financial obligations for at least the next 90 days and does
not expect to file for bankruptcy during that time period. Read our
LawFlash on the PPP for more.
The Plot Thickens Further: Cash Collateral and Unsecured Creditor
Concerns
Timing and cash collateral issues—among others—initially
appeared to be front and center in the TooJay's bankruptcy. From a
practical standpoint, although some of these issues may already be
moot, they are illustrative for the lenders providing PPP funding,
as well as the SBA, which guarantees them of issues that should be
considered.
TooJay's has two layers of pre-petition financing, which are
secured by collateral that includes cash collateral. While TooJay's
takes the position that the PPP loan proceeds are not cash
collateral, there is no evidence that these funds were segregated
from TooJay's general operating accounts.
The court's interim orders allowing the use of cash collateral
contains a broad definition of that term, including 'all cash
proceeds from use or conversion of real or personal property, all
deposits, refund claims and rights; and the proceeds of any sale,
transfer or other disposition" of prepetition collateral.
* PPP Loan Proceeds as Collateral. PPP loan proceeds may be used
only for limited business related expenses. Although the CARES Act
contains no express prohibition on the pledging of PPP proceeds as
collateral, the use of PPP loan proceeds to pay down other
indebtedness is prohibited. If the PPP proceeds in TooJay's are
later applied to other indebtedness those funds may not qualify for
forgiveness.
* The Scope of Forgivable PPP Proceed Uses. TooJay's intends to
use the PPP loans to fund only qualified day-to-day operations
during the bankruptcy. If the funds have been commingled, however,
the application of funds may not be traceable—and TooJay's
already may have inadvertently used PPP funds to make non-exempt
payments prior to and during its bankruptcy.
Support for the SBA's various motions to dismiss suggests that the
SBA was thinking about potential creditor issues when it
promulgated the PPP applications. Although the CARES Act specifies
that PPP loan proceeds may be used only for limited
business-related expenses, the declaration filed by Mr. Miller, a
senior SBA employee, in the Western District of New York case,
implies that this limitation might be binding only on a debtor and
not on a debtor's creditors. Mr. Miller asserted as a reason for
limiting a debtor's access to the PPP that certain creditors,
including administrative creditors, could assert claims to the PPP
loan funds that would interfere with its authorized uses.
The Galileo Learning debtors may have anticipated similar issues,
as their first-day papers indicated that their PPP loan proceeds
are held in a segregated account, and that they will transfer the
PPP funds to their operating account on an as-needed basis.
The creditors’ committee in the Areway Acquisition metal
finishing case also recently focused on this point, moving to
intervene in the PPP-related adversary proceeding in that case. The
committee's motion did not take a position with respect to the
Areway debtors' eligibility for a PPP loan, but noted that the
debtors' loyalties were owed to all of their creditor
constituencies, creating a possible conflict. Because Areway's
failure to comply with PPP guidelines could result in the loss of
forgiveness of the loan, harming recoveries to the general
unsecured pool, the committee sought to be "the voice of the
unsecured creditors during the negotiation and crafting of any
order" resulting from the proceeding. Ultimately the court granted
the committee's motion, but denied Areway's request for a TRO
ruling instead in favor of the SBA.
The Bankruptcy Courts as Arbiters of CARES Act-Related Disputes
The SBA's asserted debtor exclusion is only one disputed
inconsistency between the CARES Act legislation and the SBA's
subsequent guidance, and a restriction governed by whether a
recipient receives loan proceeds immediately before bankruptcy or
during bankruptcy seems arbitrary, particularly since the
likelihood of misuse diminishes in the face of the significant US
Trustee and court oversight present in most Chapter 11 cases.
While the bankruptcy courts are generally proving to be the initial
arbiters of those disputes, procedural and jurisdictional issues
are contributing to a time-consuming web of challenges. The SBA has
asserted sovereign immunity—an assertion that proved successful
before the Fifth Circuit—and invoked the Anti-Injunction Act,
while various plaintiffs assert violations by the SBA of the
federal Administrative Procedure Act (APA) and seek writs of
mandamus.
At least four other courts have recognized a jurisdictional issue
unrelated to sovereign immunity:
* In the district court's opinion in the Buffalo and Rochester
Diocese cases, the court explicitly held that a bankruptcy court
did not have authority to issue a final order on the controversy.
* The Bankruptcy Court for the District of Arizona recognized a
similar tension in the Starplex TRO proceedings. There, the court
held that the SBA had not violated section 525(a) of the Bankruptcy
Code, but also determined that the debtor's APA claims were
non-core, and that the court thus did not have jurisdiction to
award preliminary injunctive relief. Rather, the court could only
offer findings of fact and conclusions of law on the APA claims to
the district court. An uncontested dismissal negated the need to
forward any conclusions to the district court.
* The Bankruptcy Court for the District of Maine took a similar
view with respect to the APA count in the Calais Regional/Penobscot
Valley Hospital proceedings, and chose to issue proposed findings
of fact and conclusions of law with respect to the hospitals'
claims rather than entering an order. No further action has
occurred in those cases.
* In a trio of consolidated cases (In re Schuessler, In re
Steffen, and In re Thull Farms LLC), the Bankruptcy Court for the
Eastern District of Wisconsin denied relief with respect to claims
arising under section 525 of the Bankruptcy Code, but sent the
non-core matters, together with its recommendation to deny relief,
to the district court, which has not yet ruled.
As evidenced by Hidalgo County EMS, the non-Bankruptcy Code-based
arguments, coupled with the bankruptcy court's limited
constitutional authority, have raised interesting questions that
are now playing out as parties look to the courts for statutory
clarification. If PPP funding is exhausted or the program expires
before these issues are finally decided—which at this point seems
a forgone conclusion—applicants could well be asserting damages
claims instead of seeking loans. Absent a writ of certiorari and a
Supreme Court reversal in Hidalgo County EMS, that relief likely
will not be available in the Fifth Circuit.
HOW WE CAN HELP
Given an unpredictable future and the possibility that an
intervening bankruptcy could render previously solicited PPP funds
unauthorized, borrowers should only make the required
certifications in the PPP application when they can do so
comfortably and in good faith. Accordingly, business owners should
closely monitor their financials, including good faith projections
of future performance, and speak with advisors before applying for
and disbursing proceeds of a PPP loan, particularly if the business
is evaluating the potential need for bankruptcy relief down the
road.
[1] (Docket Number SBA-2020-0021)
[2] iThrive Health, LLC v. Carranza (In re iThrive Health, LLC),
Adv. Proc. No. 20-00151 (Bankr. D. Md. June 8, 2020) (TRO denied
upon determination that Fourth Circuit precedent prevented the
issuance of injunctive relief); Henry Anesthesia Assoc. LLC v.
Carranza (In re Henry Anesthesia Assoc. LLC), Adv. No. 20- 6084
(Bankr. N.D. Ga. June 4, 2020) (TRO denial followed by dismissal);
Hartshorne Mining, LLC. v. Carranza (In re Hartshorne Hold., LLC),
Adv. No. 20-4012 (Bankr. W.D. Ky. June 1, 2020) (further injunctive
relief denied following initial grant of TRO based on failure to
show substantial likelihood of harm; emergency motion to reconsider
denied); Schuessler et al. v. SBA (In re Schuessler et al.), Adv.
No. 20-2065 (Bankr. E.D. Wis. May 21, 2020) (consolidated with
Steffen et al. v. SBA (In re Steffen et al.), Adv. No. 20-2068
(Bankr. E.D. Wis. May 21, 2020) and Thull Farms, LLC v. SBA (In re
Thull Farms, LLC), Adv. No. 20-2069 (Bankr. E.D. Wis. May 21,
2020)) (declaratory and injunctive relief denied with respect to
section 525(a) of the Bankruptcy Code; non-core matters before
District Court to rule upon recommendations); Starplex Corp. v.
Carranza, Adv. No. 20-00095 (Bankr. D. Ariz. May 21, 2020)
(recommending denial of relief through proposed findings of fact
and conclusions of law); NAI Cap., Inc. v. Carranza (In re NAI
Cap., Inc.), Adv. No. 20-01051 (Bankr. C.D. Cal. May 20, 2020) (TRO
denied); PPV, Inc. v. Carranza (In re PPV, Inc.), Adv. No. 20-03054
(Bankr. D. Or. May 20, 2020) (TRO denied; motion to dismiss
pending); Inland Family Practice Ctr., LLC v. SBA (In re Inland
Family Practice Center, LLC), Adv. No. 20-06016 (Bankr. S.D. Miss.
May 15, 2020) (TRO denied; motion to dismiss pending); Okorie v.
SBA (In re Okorie), Adv. No. 20-06015 (Bankr. S.D. Miss. May 15,
2020) (TRO denied; motion to dismiss pending); Abe’s Boat
Rentals, Inc. v. Carranza (In re Abe’s Boat Rentals, Inc.), Adv.
No. 20-01029 (Bankr. E.D. La. May 13, 2020) (TRO and preliminary
injunction denied; motion to convert case under consideration);
J.H.J., Inc. v. Carranza (In re J.H.J., Inc.), Adv. No. 20-05014
(Bankr. W.D. La. May 12, 2020) (TRO denied; motion to dismiss
pending); Areway Acquisition, Inc. v. SBA (In re Areway
Acquisition, Inc.), Adv. No. 20-01037 (Bankr. N.D. Oh. May 12,
2020) (denial of TRO to metal finishing company; motion to dismiss
pending).
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***