/raid1/www/Hosts/bankrupt/TCR_Public/200903.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, September 3, 2020, Vol. 24, No. 246
Headlines
11965 SAN PABLO: Voluntary Chapter 11 Case Summary
A.R.M. OPCO: Seeks to Hire Anthony J. DeGirolamo as Legal Counsel
A.R.M. OPCO: Seeks to Hire Tzangas Plakas as Special Counsel
AAC HOLDINGS: To Either Sell Assets or Reorganize in Plan
ALGON CORPORATION: Sept. 3 Hearing on Disclosure Statement
ALPHA GUARDIAN: Court Enters Plan Confirmation Order
AMINE LLC: Seeks to Hire Barry A. Friedman as Legal Counsel
AMPLE HILLS: To Close Walt Disney World Location Permanenty
ANDES INDUSTRIES: Expects Judgment Creditors to Contest Plan
ASCENA RETAIL: Sept. 10 Hearing on Disclosure Statement
B & B ENVIRONMENTAL: Seeks Approval to Hire Bankruptcy Attorney
BHF CHICAGO: Case Summary & 11 Unsecured Creditors
BIORESTORATIVE THERAPIES: Desmarais Objects to Disclosures and Plan
BM318 LLC: Voluntary Chapter 11 Case Summary
BOYCE HYDRO: Seeks to Hire Goldstein & McClintock as Legal Counsel
BRADLEY INVESTMENTS: Unsecureds Owed $1.8M to Get $174K in Plan
BRIGGS & STRATTON: Alpha IR, Reputation Work on Bankruptcy
BRIGGS & STRATTON: Committee Taps Doster Ullom as Local Counsel
BRUNO ONE: Chapter 7 Conversion Order Upheld
BUILDERS FIRSTSOURCE: Moody's Puts B1 CFR on Review for Upgrade
CARLOS ROBLES: ACM Objects to Disclosure Statement
CENTRIC BRANDS: Sept. 18 Auction of Equity Interests in SWIMS AS
CHAPARRAL ENERGY: Seeks to Hire Davis Polk as Legal Counsel
CHAPARRAL ENERGY: Seeks to Tap Richards Layton as Legal Counsel
CHENIERE ENERGY: Fitch Affirms BB LongTerm IDR, Outlook Stable
COSI INC: Requests Court to Keep Virus Loan Denial Case Alive
DEPENDABLE BUILDING: Unsecureds Will Recover 10% of Their Claims
EBONY MEDIA: Creditors Seek to Force Magazine Bankruptcy
EVEREST REAL: Seeks to Hire Gerger Law Firm as Legal Counsel
FAIRWAY MARKETS: Closes Plainview Store
FAVALORA PROPERTIES: $345K Sale of Kenner Property to Johnsons OK'd
FORD STEEL: Voluntary Chapter 11 Case Summary
GAINESVILLE ROAD: Chapter 11 Trustee Taps Trenam as Legal Counsel
GAINESVILLE ROAD: Trustee Hires Oscher Consulting as Accountant
GEORGE WASHINGTON: Gets OK to Expand Scope of Houlihan's Services
GLOBAL EAGLE: Court Approves $30M Ch. 11 Loan
GNC HOLDINGS: Sept. 15 Auction of Substantially All Assets Set
HAGUE TEXTILES: Seeks to Hire Frank Jacinto as Accountant
HAPPY BEAVERS: Taps Jorgensen Brownell as Legal Counsel
HOTEL OXYGEN: $2.3M Sale of Wyndham Property to Le Garden Approved
HUDSON TECHNOLOGIES: Appoints Stephen Mandracchia to Board
HYTERA COMMUNICATIONS: UST Seeks Case Dismissal to Block Sale
IMPORT SPECIALTIES: $3.3M Cash Sale of All Assets to HLA Approved
ISTAR INC: Fitch Rates $400MM Senior Unsecured Notes Due 2026 'BB'
JAGUAR DISTRIBUTION: Taps Danning Gill as Legal Counsel
JMR100 LLC: Voluntary Chapter 11 Case Summary
JONES LEASE: Unsecureds Owed $1.46M to Get $70K Plus Profit Share
K&W CAFETERIAS: Case Summary & 20 Largest Unsecured Creditors
KAY BEE KAY: Law Firm Did Not Violate Automatic Stay, Court Rules
KAYA HOLDINGS: Launches 160 Units Offering
KEIV HOSPITALITY: Case Summary & 3 Unsecured Creditors
KEIVANS HOSPITALITY: Case Summary & 3 Unsecured Creditors
KLAUSNER LUMBER: Committee Taps EisnerAmper as Financial Advisor
LE TOTE: Seeks Approval to Hire Kutak Rock as Local Counsel
LE TOTE: Seeks Approval to Hire Stretto as Administrative Advisor
LE TOTE: Seeks Approval to Tap Kirkland & Ellis as Legal Counsel
LE TOTE: Seeks to Hire Katten Muchin as Special Counsel
LE TOTE: Seeks to Tap Berkeley Research Group as Financial Advisor
LE TOTE: Seeks to Tap Crenshaw Ware as Local Counsel
LILIS ENERGY: Oct. 13 Auction of Substantially All Assets Set
LYONDELLBASELL: Claims in Trustee Suit vs Brown Rudnick Narrowed
MERCHANT LLC: US Trustee Objects to Disclosures and Plan
NEW YORK AVENUE: $2.8M Sale of Two Union City Properties Approved
NORTH AMERICAN LIFTING: Moody's Cuts PDR to D-PD on Bankr. Filing
NORTHERN OIL: To Effect 1-for-10 Reverse Stock Split
NPHSS LLC: CALCAP's Ojection to Carmel Property Sale Resolved
PIER 1 IMPORTS: $18M Sale of Distribution Center Approved
PLAQUEMINE BAYOU: Voluntary Chapter 11 Case Summary
REMINGTON OUTDOOR: Sept. 17 Auction of Substantially All Assets Set
RENNOVA HEALTH: Investors Shrink Their Debenture Holdings by $19.3M
RENNOVA HEALTH: Posts $1.03 Million Net Loss in Second Quarter
RGN-CHEVY CHASE I: Case Summary & Unsecured Creditor
RGN-PHILADELPHIA IX: Voluntary Chapter 11 Case Summary
ROCHESTER DRUG: Plan Payments to be Funded by Asset Sale Proceeds
RUBIE'S COSTUME: Sept. 17 Auction of Substantially All Assets Set
SEA OAKS: Sept. 9 Auction of Substantially All Assets Set
SHADDEN LLC: $1.8M Sale of Greenwood Village Property to Wumr OK'd
SHALE FARM: $19K Sale of Lee Road Property to Marszalek Approved
SHURMA ENTERPRISES: Unsecureds to Get $500 Per Month for 5 Years
SILVER LAKES: Stipulation with County Consenting Property Sale OK'd
SPIRIT AIRLINES: Moody's Assigns B1 CFR, Outlook Negative
STAMATINA HOLDINGS: Appeals Case Closed Pending Ch. 11 Proceeding
STEWART STREET: Voluntary Chapter 11 Case Summary
STURBRIDGE YANKEE: To Liquidate its Assets Under Plan
SYED ASKRI: 4th Cir. Affirms Order Converting Ch. 11 Case to Ch. 7
TENET HEALTHCARE: Fitch Rates Senior Unsecured Notes 'B/RR4'
TENET HEALTHCARE: Moody's Rates New Unsecured Notes 'Caa1'
TIME DEFINITE: Volvo Financial Objects to Disclosures and Plan
TREESIDE CHARTER: Unsecureds Will be Paid in Full in Plan
URSA PICEANCE: Case Summary & 16 Unsecured Creditors
VEA INVESTMENTS: $299K Sale of Orlando Property to Marrero Approved
VIA AIRLINES: Wexford Capital to Fund Plan
WINDSTREAM HOLDINGS: CQS's Plan Confirmation Appeal Underway
WOW WEE: Ex-Manager Has $218,000 General Unsecured Claim
YRC WORLDWIDE: Bailout Under Catch-All Provision Questioned
ZATO INVESTMENTS: JTS Capital Objects to Plan and Disclosures
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
11965 SAN PABLO: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: 11965 San Pablo LLC
11965 San Pablo Avenue
El Cerrito, CA 94530
Business Description: 11965 San Pablo LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: September 1, 2020
Court: United States Bankruptcy Court
Northern District of California
Case No.: 20-41443
Judge: Hon. Charles Novack
Debtor's Counsel: Jeffrey Lewiston, Esq.
5805 White Oak Avenue, NO. 17961
Encino, CA 91416
Tel: 310-776-1333
Email: JeffLewiston@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jack Boyajian, manager.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/BZFUNUA/11965_San_Pablo_LLC__canbke-20-41443__0001.0.pdf?mcid=tGE4TAMA
A.R.M. OPCO: Seeks to Hire Anthony J. DeGirolamo as Legal Counsel
-----------------------------------------------------------------
A.R.M. OPCO, Inc. seeks approval from the U.S. Bankruptcy Court for
the Northern District of Ohio to employ Anthony J. DeGirolamo,
Attorney at Law, to handle its Chapter 11 case.
The firm will be paid at hourly rates as follows:
Anthony J. Degirolamo, Esq. $360
Paralegals $200
The firm received $26,109 from Debtor during the 12 months prior to
its bankruptcy filing for legal services rendered and expenses
incurred. It holds a retainer of $3,135.
Anthony DeGirolamo, Esq., disclosed in court filings that the firm
is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
Anthony J. DeGirolamo can be reached at:
Anthony J. DeGirolamo, Esq.
Anthony J. DeGirolamo, Attorney at Law
3930 Fulton Dr., Ste. 100B
Canton, OH 44718
Telephone: (330) 305-9700
Facsimile: (330) 305-9713
Email: ajdlaw@sbcglobal.net
About A.R.M. OPCO Inc.
A.R.M. OPCO Inc. is an equipment manufacturer in Canton, Ohio, with
the latest in CNC burning and forming capabilities, assembly bays,
finishing and painting systems all coupled with 3D computer-aided
design. The company manufactures TerrainPro M3, vacuum leaf, snow
and ice control, dump trucks, oil and gas equipment, septic and
pressure vessels, grappler trucks, and parts and service. Visit
https://www.toughequipment.com for more information.
A.R.M. OPCO sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ohio Case No. 20-61308) on Aug. 20, 2020. A.R.M.
OPCO President William T. Blackerby Jr. signed the petition. At
the time of the filing, Debtor had estimated assets of $4,270,274
and liabilities of $10,680,090.
Judge Russ Kendig oversees the case.
Anthony J. DeGirolamo, Attorney at Law and Tzangas Plakas & Mannos
Ltd. serve as Debtor's bankruptcy counsel and special counsel,
respectively.
A.R.M. OPCO: Seeks to Hire Tzangas Plakas as Special Counsel
------------------------------------------------------------
A.R.M. OPCO, Inc. seeks approval from the U.S. Bankruptcy Court for
the Northern District of Ohio to employ Tzangas Plakas Mannos Ltd.
as its special corporate counsel.
The firm will assist Debtor in consummating the sale of its assets
and will provide other related services.
The firm's hourly rates for personnel who will be providing the
services are as follows:
Attorney Gary A. Corroto $370
Paralegal Brooke M. Gorbach $130
Tzangas Plakas received $39,103.03 from Debtor during the 12 months
prior to its bankruptcy filing for legal services rendered and
expenses incurred. The firm held $3,619.50 as a retainer as of the
petition date.
The firm is a "disinterested person" within the meaning of Sections
101(14) and 327 of the Bankruptcy Code.
The firm cam be reached through:
Gary A. Corroto, Esq.
Tzangas Plakas Mannos Ltd.
220 Market Avenue South, 8th Floor
Canton, OH 44702
Telephone: (330) 453-5466
About A.R.M. OPCO Inc.
A.R.M. OPCO Inc. is an equipment manufacturer in Canton, Ohio, with
the latest in CNC burning and forming capabilities, assembly bays,
finishing and painting systems all coupled with 3D computer-aided
design. The company manufactures TerrainPro M3, vacuum leaf, snow
and ice control, dump trucks, oil and gas equipment, septic and
pressure vessels, grappler trucks, and parts and service. Visit
https://www.toughequipment.com for more information.
A.R.M. OPCO sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ohio Case No. 20-61308) on Aug. 20, 2020. A.R.M.
OPCO President William T. Blackerby Jr. signed the petition. At
the time of the filing, Debtor had estimated assets of $4,270,274
and liabilities of $10,680,090.
Judge Russ Kendig oversees the case.
Anthony J. DeGirolamo, Attorney at Law and Tzangas Plakas & Mannos
Ltd. serve as Debtor's bankruptcy counsel and special counsel,
respectively.
AAC HOLDINGS: To Either Sell Assets or Reorganize in Plan
---------------------------------------------------------
AAC Holdings, Inc., et al., filed a Plan and a Disclosure
Statement.
As set forth in the Plan, both the Entire Company Asset Sale and
Reorganization Transaction preserve the going-concern value of the
Debtors' businesses, maximize recoveries available to all
constituents, provide for an equitable distribution to the Debtors'
stakeholders, and protect the jobs of the Debtors' employees.
More, specifically, pursuant to the terms of the Plan, the Entire
Company Asset Sale or the Reorganization Transaction, as
applicable, provide, among other things:
- All Allowed Administrative Claims, Allowed Priority Tax
Claims, Allowed Other Secured Claims, and Allowed Other Priority
Claims shall be paid in full in cash or receive such other
treatment that renders such Claims Unimpaired.
- If there is an Entire Company Asset Sale, Allowed DIP Lender
Claims and Allowed Senior Lender Claims shall be paid in full in
cash from the proceeds of such sale. Remaining sale proceeds,
together with any other Distributable Proceeds, shall be
distributed to the Holders of Allowed Junior Lender Claims, up to
the full amount of such claims. If there are any remaining
Distributable Proceeds after payment in full of the Allowed Junior
Lender Claims, such Distributable Proceeds will be paid to the
Holders of General Unsecured Claims.
- If there is a Reorganization Transaction, the following will
occur:
* Each Holder of an Allowed DIP Lender Claim shall receive
its Pro Rata share of Partial Asset Sale Proceeds, if any, up to
the full amount of its Allowed DIP Lender Claim. To the extent
there are any remaining amounts due and owing to the Holders of
Allowed DIP Lender Claims, such Holders shall either (i) receive
their respective Pro Rata share of (A) the Exit Term Loan Facility
in the aggregate amount of the Converted DIP Facility Amount, (B)
Cash equal to the Remaining DIP Facility Amount, and (C) the New
Warrants, or (ii) be Paid in Full in Cash with the proceeds of an
Acceptable Exit Facility.
* Each Holder of an Allowed Senior Lender Claim shall receive
its Pro Rata share of any Partial Asset Sale Proceeds, if any,
after all Allowed DIP Lender Claims have been Paid in Full. To the
extent there are any remaining amounts due and owing to the Holders
of Allowed Senior Lender Claims, such Holders shall either (i)
receive their respective Pro Rata share of (A) the Exit Term Loan
Facility in the aggregate amount of the Converted Senior Facility
Amount and (B) the New Warrants, or (ii) be Paid in Full in Cash
with the proceeds of an Acceptable Exit Facility.
* Each Holder of an Allowed Junior Lender Claim shall receive
its Pro Rata share of any Partial Asset Sale Proceeds, if any,
after all Allowed DIP Lender Claims and Allowed Senior Lender
Claims have been Paid in Full. To the extent there are any
remaining amounts due and owing to the Holders of Allowed Junior
Lender Claims, such Holders shall receive their Pro Rata share of
100% of the Reorganized AAC Equity Interests, subject to dilution
by the New Warrants and the Management Incentive Plan.
* Holders of General Unsecured Claims shall not receive a
recovery or distribution.
- In either an Entire Company Asset Sale or Reorganization
Transaction, Holders of Interests in AAC Holdings shall not receive
a recovery or distribution on account of such Interests.
A full-text copy of the Disclosure Statement dated July 25, 2020,
is available at https://tinyurl.com/y2f4ndda from PacerMonitor.com
at no charge.
Counsel for the Debtors:
David B. Kurzweil
Alison Elko Franklin
GREENBERG TRAURIG, LLP
Terminus 200
3333 Piedmont Road, NE, Suite 2500
Atlanta, Georgia 30305
Telephone: (678) 553-2100
Facsimile: (678) 553-2212
E-mail: kurzweild@gtlaw.com
franklinae@gtlaw.com
- and -
Dennis A. Meloro
The Nemours Building
1007 North Orange Street, Suite 1200
Wilmington, Delaware 19801
Telephone: (302) 661-7000
Facsimile: (302) 661-7360
Email: melorod@gtlaw.com
About AAC Holdings
AAC Holdings, Inc. and its affiliates provide inpatient and
outpatient substance use treatment services for individuals with
drug addiction, alcohol addiction and co-occurring mental or
behavioral health issues. They also provide clinical diagnostic
laboratory services and provide physician services to clients.
AAC Holdings and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11648) on
June 20, 2020. The Debtors disclosed $449.35 million in assets and
$517.40 million in liabilities as of Feb. 29, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Greenberg Traurig, LLP as bankruptcy counsel;
Chipman Brown Cicero & Cole, LLP as conflicts counsel; and Cantor
Fitzgerald as investment banker. Donlin, Recano & Company, Inc., is
the Debtors' notice, claims and balloting agent and administrative
advisor.
ALGON CORPORATION: Sept. 3 Hearing on Disclosure Statement
----------------------------------------------------------
Judge Robert A. Mark has ordered that a hearing to consider
approval of the Disclosure Statement of Algon Corporation will be
held on September 3, 2020 at 1:30 p.m., through Court Solutions
(917)746-7476.
The last day for filing and serving objections to the disclosure
statement is on Aug. 27, 2020 (seven days before Disclosure
Hearing).
About Algon Corporation
Algon Corporation -- https://www.algon.com/ -- is a worldwide
distributor of raw materials and industrial parts for the
pharmaceutical, cosmetic, and food industries. It is located in
Miami, Fla.
Algon Corp sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Fla. Case No. 19-18864) on July 1, 2019. In the
petition signed by its president, Alfredo Suarez, the Debtor was
estimated to have assets and liabilities of less than $10 million.
The case is assigned to Judge Robert A. Mark. The Debtor is
represented by Geoffrey S. Aaronson, Esq., at Aaronson Schantz
Beiley P.A.
ALPHA GUARDIAN: Court Enters Plan Confirmation Order
----------------------------------------------------
The Court entered findings of fact, conclusions of law, and order
approving Alpha Guardian's Disclosure Statement and confirming the
Joint Chapter 11 Plan of Reorganization.
Classes 1, 2, 3, 5 and 6 submitted ballots accepting the Plan.
However, as Class 8 is impaired and deemed to have rejected the
Plan, Debtors have not satisfied Section 1129(a)(8), thereby
necessitating approval under Section 1129(b) for such Class.
The Plan's treatment of Allowed Administrative Claims, Allowed
Priority Tax Claims, and other unclassified priority claims as set
forth in Section 507(a) satisfies the requirements set forth in
Section 1129(a)(9) because, except to the extent that the Holder of
a particular Claim has agreed to a different treatment of such
Claim, the Plan provides that the Holders of each Allowed
Administrative Claim shall be paid in full, in Cash; and (ii) the
Holders of Allowed Priority Tax Claims shall be paid in full, in
Cash, or in such amounts and on such other terms as may be agreed
to by the Holders of such Claims and Debtors or Reorganized
Debtors. Therefore, the Plan satisfies the requirements of Section
1129(a)(9).
As Classes 1, 2, 3, 5, and 6 have accepted the Plan without
including acceptance by any insiders (as defined by Section
101(31)), the Plan satisfies Section 1129(a)(10).
The Plan fairly and equitably treats the Class 8 Equity Securities
as any holder of a junior interest will not receive or retain
anything under the Plan, and no Holder of a Claim in Class8 has
objected, thereby satisfying Section 1129(b)(2).
Judge Mike K. Nakagawa has ordered that he Disclosure Statement of
Alpha Guardian is approved on a final basis as containing adequate
information within the meaning of Section 1125 and contains
sufficient information of a kind necessary to satisfy the
disclosure requirements of any applicable non-bankruptcy law,
rules, or regulations.
The Plan is confirmed pursuant to Section 1129. The terms and
provisions of the Plan and any other documents filed in connection
with the Plan and/or executed or to be executed in connection with
the transactions contemplated by the Plan, including but not
limited to those identified in the Plan Supplements [ECF Nos. 317
and 407] and all amendments and modifications thereof made in
accordance with the Plan and this Order (this “Confirmation
Order”), are hereby approved by this Confirmation Order.
The following modifications are approved and hereby incorporated
into the Plan:
a. Section 12.17 of the Plan shall be amended to state:
Quarterly Fees. Prior to the Effective Date, the Debtors, and after
the Effective Date, the Reorganized Debtors and the Litigation
Trust, shall pay their respective quarterly fees payable to the
Office of the United States Trustee pursuant to 28 U.S.C. §
1930(a)(6), and the applicable provisions of the Bankruptcy Code
and Bankruptcy Rules. The quarterly fees payable to the Office of
the United States Trustee do not require allowance. For the
avoidance of doubt, the Bankruptcy Court shall retain jurisdiction
to resolve any disputes regarding fees assessed under 28 U.S.C. §
1930(a)(6), including quarterly post-confirmation fees, and the
Debtors, Reorganized Debtors, and Litigation Trustee, as
applicable, shall have standing to seek a determination by the
Bankruptcy Court of any such dispute. The Reorganized Debtors and
the Litigation Trust further agree that neither party shall be
liable for the other’s quarterly fees payable to the Office of
the United States Trustee, and the Reorganized Debtors and the
Litigation Trustee shall work in good faith to close those Chapter
11 Cases of the Debtors which are unnecessary to the administration
of the Litigation Trust.
All formal or informal objections or responses in opposition to or
inconsistent with the Plan, to the extent not already withdrawn,
waived or settled, and all reservations of rights included therein,
shall be, and hereby are, overruled in their entirety.
Plan Classification and Treatment. All Claims and Interests shall
be, and hereby are, classified and treated as set forth in the
Plan. The Plan’s classification scheme shall be, and hereby is,
approved. The treatment of all Claims and Interests as provided in
the Plan shall be, and hereby is, approved.
The provisions governing distributions under the Plan, including,
without limitation, Articles 4 and 7 of the Plan, are fair and
reasonable and are approved in their entirety. The timing and
manner of distributions required under the Plan or this
Confirmation Order shall be made in accordance with and as set
forth in the Plan or this Order, as applicable.
Attorneys for the Debtors:
GREGORY E. GARMAN, ESQ.
GABRIELLE A. HAMM, ESQ.
TERESA M. PILATOWICZ, ESQ.
GARMAN TURNER GORDON LLP
7251 Amigo Street, Suite 210
Las Vegas, Nevada 89119
Tel: (725) 777-3000
E-mail: ggarman@gtg.legal
E-mail: ghamm@gtg.legal
E-mail: tpilatowicz@gtg.legal
About Alpha Guardian
Established in July 2017, Alpha Guardian --
https://www.alphaguardian.com/ -- provides consumers with secure
storage solutions. Its products are sold to major retailers across
the United States under the Cannon Safe, Stack-On and GunVault
brands, all of which are designed to fill unique consumer needs.
The company operates manufacturing and distribution facilities in
the U.S. and Mexico and has employees in multiple countries. Cannon
Safe -- https://www.cannonsafe.com/ -- is a manufacturer of
large-scale gun safes and secure home storage solutions. Since
1965, its focus has been on manufacturing safes to protect prized
possessions.
GunVault -- https://www.gunvault.com -- offers a wide range of gun
safes including biometric safes, pistol safes, and portable safes.
Stack-On -- https://www.stack-on.com/ -- manufactures and
distributes gun security products.
Alpha Guardian and its affiliates filed Chapter 11 petitions
(Bankr. D. Nev. Lead Case No. 20-11016) on Feb. 24, 2020. At the
time of the filing, Debtors had estimated assets of between $10
million and $50 million and liabilities of between $100 million and
$500 million in liabilities.
Judge Bruce T. Beesley oversees the cases.
The Debtors tapped Garman Turner Gordon LLP as their bankruptcy
counsel; Nicholas Rubin of Force Ten Partners, LLC as chief
restructuring officer; and Wright Ford Young & Co. as tax preparer
and tax advisor. Stretto is the Debtors' claims noticing and
solicitation agent.
The U.S. Trustee for Region 17 appointed a committee of unsecured
creditors on March 11, 2020. The committee tapped Brown Rudnick,
LLP as its lead bankruptcy counsel, and McDonald Carano, LLP as its
local counsel.
AMINE LLC: Seeks to Hire Barry A. Friedman as Legal Counsel
-----------------------------------------------------------
Amine, LLC seeks approval from the U.S. Bankruptcy Court for the
Southern District of Alabama to hire Barry A. Friedman &
Associates, PC as its legal counsel.
The firm will provide the following services:
1. take appropriate action with respect to secured and
priority creditors;
2. take appropriate action with respect to possible voidable
preferences and transfers;
3. prepare legal papers;
4. investigate the accounts of Debtor and the financial
transactions related thereto; and
5. perform all other legal services.
Barry A. Friedman does not represent interests adverse to Debtor,
according to court filings.
The firm can be reached through:
Barry A. Friedman, Esq.
Barry A. Friedman & Associates, PC
257 St Anthony St.
Mobile, AL 36603
Telephone: (251) 439-7400
Email: bky@bafmobile.com
About Amine LLC
Amine, LLC is a Mobile, Ala.-based convenience store, which
conducts business under the name Super Stop.
Amine sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Ala. Case No. 20-11953) on Aug. 6, 2020. At the time
of the filing, Debtor had estimated assets of less than $50,000 and
liabilities of between $100,001 and $500,000.
Barry A Friedman & Associates, PC is Debtor's legal counsel.
AMPLE HILLS: To Close Walt Disney World Location Permanenty
-----------------------------------------------------------
Landon McReynolds reports that ice cream maker Ample Hills Cremery
will not reopen its location at Walt Disney World because its
agreement with Disney ended earlier this year, 2020.
Those delicious ice cream flavors along Disney's Boardwalk have
officially melted away.
The Brooklyn-based shop, Ample Hills Creamery, said it will not
reopen its doors after being forced to close in March due to the
coronavirus pandemic.
The location first opened at Disney's Boardwalk in 2016 and was on
the verge of expanding next to the AMC Theater at Disney Springs.
"Our agreement with Ample Hills Creamery ended earlier this year.
As a result, Ample Hills will close at Disneys Boardwalk and the
proposed Ample Hills location at Disney Springs will not open later
this year," a Disney spokesperson said.
To add to the company's trouble, the owners were forced to file for
Chapter 11 bankruptcy in March.
Fans of the popular ice cream shop will still be able to order ice
cream online through the company's website.
It's unclear what will replace the shop at Disney’s Boardwalk.
About Ample Hills Holdings
Ample Hills Holdings, Inc. -- https://www.amplehills.com/ -- is a
Brooklyn-based producer, distributor, and retailer of ice cream and
related merchandise. Ample Hills was founded in 2010-2011 by
husband and wife team Brian Smith and Jackie Cuscana out of a
push-cart, and later a small brick and mortar storefront. It grew
to a chain of 10 retail stores and kiosks, which are primarily
located in the metropolitan New York area, and a factory in the Red
Hook neighborhood of Brooklyn. Ample Hills has been called "New
York's best ice cream' and is often viewed as a Brooklyn
destination following their wild success.
On March 15, 2020, Ample Hills Holdings and its affiliates sought
Chapter 11 protection (Bankr. E.D.N.Y. Case No. 20-41559). In the
petition signed by Phillip Brian David Smith, CEO, Ample Hills
Holdings was estimated to have $1 million to $10 million in assets
and $10 million to $50 million in liabilities.
The Hon. Nancy Hershey Lord is the case judge.
The Debtors tapped Herrick Feinstein, LLP as legal counsel, and SSG
Capital Advisors, LLC as investment banker. Bankruptcy Management
Solutions, Inc., doing business as Stretto, is the claims agent.
The U.S. Trustee for Region 2 appointed a committee of unsecured
creditors on April 16, 2020. The committee is represented by
Porzio, Bromberg & Newman, P.C.
ANDES INDUSTRIES: Expects Judgment Creditors to Contest Plan
------------------------------------------------------------
Andes Industries, Inc. and PCT International, Inc., submitted a
Joint Amended Disclosure Statement explaining their proposed
Chapter 11 Plan.
The Debtors anticipate that the Judgment Creditors and, perhaps,
the Committee will contest the confirmation of the Plan.
Consequently, the Debtors anticipate that the Debtor swill incur
additional professional fees, to the Debtors' counsel and KLA, in
the amount of at least $250,000 in connection with this case. If
the Judgment Creditors are authorized to file a competing plan of
reorganization, the estimate of the additional fees will increase
by $50,000 to $75,000.
The Plan does not provide for the substantive consolidation of the
Debtors, although Section 1123(a)(5)(C) of the Bankruptcy Code
would authorize such consolidation if provided in the Plan. Rather,
the Plan contemplates that the Debtors will have joint liability
for the debts of both entities and Andes' operating subsidiary,
PCT, will continue its operations and generate revenue which will
be used to pay claims of both Debtors.
Class 3-A Allowed Unsecured Claims of Critical Vendors are
estimated to total $750,000 or less.
Class 3-B Allowed General Unsecured Claims. After the payment of
Allowed Priority Claims, Allowed Secured Claims, and the
payments due to creditors in Class 3-A, the Debtors will make
quarterly distributions from their Net Available Cash1, divided pro
rata amongst the claims in Class 3-B and Class 3-C.
Although the Debtors' projections currently contemplate the payment
of all claims within Class 3-B prior to the tenth anniversary of
the Effective Date from a combination of the Reorganized Debtors'
operational revenues and the funds to be received from Newco, if it
becomes necessary to timely satisfy the Claims within this Class,
the Debtors will explore raising additional capital, obtaining
financing, and/or selling assets in order to satisfy this provision
of the Plan.
Class 3-C Allowed General Unsecured Claims of the Judgment
Creditors. After the payment of Allowed Priority Claims, Allowed
Secured Claims, and the payments due to creditors within Class 3-A,
the Debtors will make quarterly distributions from their Net
Available Cash, divided pro rata amongst the claims in Class 3-B
and Class 3-C.
An adversary proceeding, Adversary Proceeding No. 2:20-ap-00161-PS,
hasbeen filed in furtherance of the Plan seeking subordination
and/or disallowance of the Judgment Creditors' claims on equitable
grounds (the "Adversary Proceeding"). Creditors are encouraged to
read the Complaint filed by the Debtors against the Judgment
Creditors in the Adversary Proceeding. While the Debtors
anticipate that the Judgment Creditors will vigorously oppose the
Adversary Proceeding (in fact, the Judgment Creditors have filed a
motion to dismiss the Adversary Proceeding), the Debtors are
confident that the inequitable conduct by Judgment Creditors, as
articulated in the Complaint, will be found to be grounds to
disallow or, at a minimum, subordinate, the Judgment Creditors’
claims.
Until the resolution of the Adversary Proceeding, payments that
would otherwise be due to the Judgment Creditors holding Claims in
this Class will be held in a segregated reserve account, in the
name of PCT, until such time as the Adversary Proceeding is
resolved. Any funds that have been escrowed for the Judgement
Creditors, but are not actually required to be paid to the Judgment
Creditors upon conclusion of the Adversary Proceeding, will be
distributed, in the manner provided for in the Plan, to the holders
of Claims within Classes3-B and 3-D.
Class 4 Interest Holders. The equity interests in the reorganized
Andes will be issued to, and purchased by, NEWCO for $2,000,000.
Reorganized Andes will retain 100% of the equity Interests in PCT.
Funding
Mr. Youtsey and Ms. Chiao have committed to contribute $1,000,000
to Newco upon confirmation of the Plan which will be paid to the
Reorganized Debtors for an equity interest in the reorganized
Andes. Mr. Youtsey and Ms. Chiao have already contributed $300,000
to the Debtors’ reorganization, and in doing so, have
demonstrated their financial commitment and capability.
Additionally, Wade Ferguson, a current shareholder of Andes, has
committed to contributing an additional $1,000,000 to Newco, which
will be paid to the Reorganized Debtors within 18 months of the
Effective Date in exchange for an equity interest in Newco.
Newco may also include some of the Debtors' other prepetition
equity holders and others. In fact, the Debtors are currently in
the process of seeking additional capital contributions from
investors to be paid to the Reorganized Debtors following
confirmation of the Plan in exchange for equity interests in the
reorganized Andes.
Because of, among other things, the animosity and acrimony among
the Debtors’ and the Judgment Creditors, neither the Judgment
Creditors nor their principals or affiliates will own an interest
in Newco, however, as it is beyond dispute that there exists such
acrimony amongst them and the Debtors' other shareholders that a
continuing joint ownership would be harmful to the Debtors'
prospects for future success. Further, the Judgment Creditors'
presence as shareholders is detrimental to the malpractice action.
The Plan provides for a better recovery to Creditors than would a
Chapter 7 liquidation because a 100% payment on a claim is more
than a 24% payment on a claim.
A full-text copy of the Joint Amended Disclosure Statement dated
July 27, 2020, is available at https://tinyurl.com/y65qs4hq from
PacerMonitor.com at no charge.
Attorneys for the Debtors:
Wesley D. Ray
Philip R. Rudd
SACKS TIERNEY P.A.
4250 N. Drinkwater Blvd., 4th Floor
Scottsdale, AZ 85251-3693
Telephone: 480.425.2600
Facsimile: 480.970.4610
Wesley.Ray@SacksTierney.com
Philip.Rudd@SacksTierney.com
About Andes Industries
Creditors EZconn Corporation, Crestwood Capital Corporation, and
Devon Investment Inc. filed involuntary bankruptcy petitions
against Andes Industries, Inc. and PCT International, Inc. under
Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for
the District of Arizona. On Dec. 4, 2019, the Chapter 7 cases were
converted to cases under Chapter 11 (Bankr. D. Ariz. Lead Case No.
19-14585). Judge Paul Sala oversees the cases.
The Debtors tapped Sacks Tierney P.A. as legal counsel, Beus
Gilbert McGroder PLLC as special counsel, and Keegan Linscott &
Associates, PC as financial consultant.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Jan. 29, 2020. The committee is represented by Allen
Barnes & Jones, PLC.
The Debtors filed their joint Chapter 11 plan and disclosure
statement on June 8, 2020.
ASCENA RETAIL: Sept. 10 Hearing on Disclosure Statement
-------------------------------------------------------
On July 31, 2020, Ascena Retail Group, Inc., et al., filed their
Plan of Reorganization and the Disclosure Statement related
thereto.
The Bankruptcy Court will hold a hearing to consider approval of
the Disclosure Statement on September 10, 2020 at 11:00 a.m. (ET).
Ascena Retail sought Chapter 11 protection with a debt-for-equity
plan it says will cut $1 billion in debt and allow the company to
bounce back from months of COVID-19 store closures.
"This comprehensive restructuring, as well as the actions we are
taking to optimize our brand portfolio and store fleet, mark a new
start for our company and will allow us to expand our
customer-focused strategies across her mobile, online, and store
experiences," CEO Gary Muto said in a statement.
The New Jersey-based company operates about 2,800 women's clothing
stores in the U.S., Canada and Mexico, including 291 Ann Taylor
stores, 688 Lane Bryant stores and 826 Justice stores. It has about
40,000 employees, according to its Chapter 11 filings.
According to its Chapter 11 filings, the company has $1.6 billion
in funded debt, with $1.27 million in term loans outstanding from
the $1.8 billion it borrowed for the Ann Taylor acquisition and a
$330 million asset-based loan facility.
In her Chapter 11 declaration, Carrie Teffner, chairwoman of
Ascena's board, said that under the plan, participating term
lenders will provide $75 million in debtor-in-possession financing
and receive 44.9% of the equity in the reorganized Ascena, while
all term lenders will receive a share in the remaining equity along
with $88.2 million in new second-out term loan and the opportunity
to participate in another $75 million DIP, with both DIPs rolling
over into new term loans.
She said the company was in talks with its asset-based lender for
another $400 million DIP that would also roll over into a
post-petition facility. Unsecured creditors will receive a share of
$500,000 if the class approves the plan, she said.
Teffner said the plan also involved "right-sizing" the company's
store profile. About 680 Justice stores and all 320 Catherines
stores are slated for closure, she said. The company said in its
announcement it has received a stalking horse bid for the
Catherines e-commerce platform and intellectual property.
About 600 Ann Taylor, LOFT, Lane Bryant and Lou & Grey locations
will also be closing, including all stores in Puerto Rico and
outside the U.S., she said.
About Ascena Retail Group
Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty
retailer offering apparel, shoes and accessories for women under
the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus
Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion
(Dressbarn) segments, and for tween girls under the Kids Fashion
segment (Justice). Ascena Retail Group, through its retail brands,
operates e-commerce websites and approximately 2,800 stores
throughout the United States, Canada and Puerto Rico. Visit
http://www.ascenaretail.comfor more information.
Ascena Retail Group reported a net loss of $661.4 million for the
fiscal year ended Aug. 3, 2019, a net loss of $39.7 million for the
year ended Aug. 4, 2018, and a net loss of $1.06 billion for the
year ended July 29, 2017.
On July 23, 2020, Ascena Retail Group and its affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of
Feb. 1, 2020, Ascena Retail Group had $13,690,710,379 in assets and
$12,516,261,149 in total liabilities.
The Hon. Kevin R. Huennekens is the case judge.
The Debtors tapped Kirkland & Ellis LLP, Kirkland & Ellis
International LLP and Cooley LLP as bankruptcy counsel, Guggenheim
Securities, LLC as financial advisor, and Alvarez and Marsal North
America, LLC as restructuring advisor. Prime Clerk, LLC is the
claims agent.
B & B ENVIRONMENTAL: Seeks Approval to Hire Bankruptcy Attorney
---------------------------------------------------------------
B & B Environmental Safety, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of California to hire
David Johnston, Esq., an attorney practicing in Modesto, Calif., to
handle its Chapter 11 case.
Mr. Johnston will render these services:
(a) give Debtor legal advice about various bankruptcy
options;
(b) advise Debtor about its rights, powers and obligations in
its Chapter 11 case and in the management of the estate;
(c) take necessary action to enforce the automatic stay and to
oppose motions for relief from the automatic stay;
(d) take necessary action to recover and avoid any
preferential or fraudulent transfers;
(e) appear with Debtor's president at the meeting and other
hearings held before the court;
(f) review and, if necessary, object to proofs of claim;
(g) take steps to obtain court authority for the sale of
assets; and
(h) prepare a plan of reorganization and take all steps
necessary to obtain confirmation of the plan.
The hourly rate to be charged by the attorney is $360.
Prior to Debtor's bankruptcy filing, Mr. Johnston was paid $4,105
for attorney's fees and $1,717 for the court's filing fee.
Mr. Johnston does not hold any interest adverse to the estate and
is a "disinterested person" within the meaning of Section 101(14)
of the Bankruptcy Code.
The attorney holds office at:
David C. Johnston, Esq.
1600 G Street, Suite 102
Modesto, CA 95354
Telephone: (209) 579-1150
Facsimile: (209) 579-9420
Email: david@johnstonbusinesslaw.com
About B & B Environmental Safety
B & B Environmental Safety, Inc., a Lakewood, Colo.-based company
that provides environmental consulting and services, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.
Cal. Case No. 20-23414) on July 10, 2020. Judge Christopher M.
Klein oversees the case.
At the time of the filing, Debtor had estimated assets of between
$100,001 and $500,000 and liabilities of between $500,001 and $1
million.
David C. Johnston, Esq. is Debtor's legal counsel.
Lisa Holder is the Subchapter V trustee appointed in Debtor's
bankruptcy case.
BHF CHICAGO: Case Summary & 11 Unsecured Creditors
--------------------------------------------------
Debtor: BHF Chicago Housing Group C LLC
4 Dunbar Road
Palm Beach Gardens FL 33418
Business Description: BHF Chicago Housing Group C LLC
is the owner of multifamily rental
facilities.
Chapter 11 Petition Date: September 1, 2020
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 20-16567
Debtor's Counsel: Kevin H. Morse, Esq.
CLARK HILL PLC
130 E. Randolph St., Suite 3900
Chicago, IL 60601
Tel: (312) 985-5556
Email: kmorse@clarkhill.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Andrew Belew, president, BHF as
manager.
A copy of the petition containing, among other items, a list of the
Debtor's 11 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/27TR7KY/BHF_Chicago_Housing_Group_C_LLC__ilnbke-20-16567__0001.0.pdf?mcid=tGE4TAMA
BIORESTORATIVE THERAPIES: Desmarais Objects to Disclosures and Plan
-------------------------------------------------------------------
John M. Desmarais, a secured creditor, filed an objection to
Disclosure Statement with respect to Joint Plan of Reorganization
filed by Auctus Fund, LLC and BioRestorative Therapies, Inc.
Objectant asserts that the Plan violates 11 U.S.C. Sec. 1129(a)(11)
because the Plan Proponents cannot show that confirmation is not
likely to be followed by Liquidation or further Reorganization.
Objectant points out that neither the Plan nor the Disclosure
Statement sets forth that the $2.0million which needs to be
invested by third parties prior to Confirmation in order to satisfy
the Auctus Funding Condition, almost certainly must be approved by
this Court under 11 U.S.C. Section 364 (since these investments in
no way constitute the Debtor's incurring of unsecured debt in the
ordinary course of business, allowable as an administrative expense
under Section 364[a]).
Objectant complains that the Disclosure Statement does not explain
why anyone would ever invest $2.0 million into the Debtor, before
the Plan is even confirmed, in exchange for Plan Warrants,
Convertible Plan Notes, or Secured Convertible Plan Notes, on the
hopes that the Plan will be confirmed.
According to Objectant, Section 1129(a)(11) has not been satisfied.
Objectant asserts that the Plan's feasibility is therefore subject
to proverbial "high hopes" that holders of Allowed General
Unsecured Claims and unknown Accredited Investors will invest
millions of dollars of funds into the Debtor – both before
Confirmation, and then after Confirmation.
Objectant points out that in reality, this Plan leaves the Debtor
in exactly the same position as it was before it filed its Chapter
11 Petition, except that Auctus might fund up to not more
than$1,886,000 of the Total Plan/Operating/Trial Costs, if and only
if the Auctus Financing Condition is satisfied and $2.0 million is
for some reason invested by other persons and entities prior to
Confirmation in the next 30-60 days, even though there are no
prospective investors revealed in the Disclosure Statement.
Objectant complains that the Plan is highly speculative, to say the
least, and the Disclosure Statement offers no reason why Debtor
should be any more successful now in raising $2.0million before
Confirmation from third parties, or the additional $10 million to
$12 million needed for Phase 2 trials when the Debtor has been
unable to raise any funds for several years, despite exhaustive
efforts.
According to Objectant, the Plan’s treatment of the secured
claims of Objectant and Tuxis Trust and the proposed avoidance
under the Plan of Objectant’s and Tuxis Trust’s security
interests without an adversary proceeding is impermissible, and
violates 11 U.S.C. § 1129(a)(7)(A).
Objectant asserts that the Plan is predicated on the assumption
that up to $15 million dollars will be able to be raised through
investments into the Debtor by holders of Allowed General Unsecured
Claims and Accredited Investors, based on the value of the
Debtor’s intellectual property, on which Objectant and Tuxis
Trust hold liens that are secured by the Security Interest. The
Plan Proponents "cannot have their cake and eat it, too".
Objectant points out that the Plan violates 11 U.S.C. Sec. 1143.
Objectant complains that the Plan includes improper third-party
releases.
According to Objectant, the Disclosure Statement offers no legal
basis for the grant of wholesale third party releases to Actus or
its current officers, directors, agents and professionals from any
claim or action, or for the third-party releases of the Debtor’s
current officers, directors and representatives from any act or
omission that is not determined in a final order to have risen to
the level of gross negligence or willful misconduct.
Objectant asserts that the Plan violates 11 U.S.C. Sec.
1129(a)(5)(a) by failing to disclose the identity and affiliations
of any individual proposed to serve, after confirmation of the
Plan, as a director or officer of the Reorganized Debtor.
Objectant points out that the Plan fails to identify any individual
proposed to serve, after confirmation of the Plan, as a director,
officer, or voting trustee of the Reorganized Debtor, and/or
disclose the identity of any insider that will be employed or
retained by the Reorganized Debtor, and the nature of any
compensation for such insider.
Attorneys for John M. Desmarais:
A. Scott Mandelup, Esq.
Neil Ackerman, Esq.
PRYOR & MANDELUP, L.L.P.
675 Old Country Road
Westbury, New York 11590
Tel: (516) 997-0999
E-mail: asm@pryormandelup.com
na@pryormandelup.com
About BioRestorative Therapies
BioRestorative Therapies, Inc. -- http://www.biorestorative.com/--
is a life science company focused on stem cell-based therapies. It
develops therapeutic products and medical therapies using cell and
tissue protocols, primarily involving adult stem cells.
BioRestorative Therapies sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-71757) on March 20,
2020. At the time of the filing, Debtor had estimated assets of
between $50 million and $100 million and liabilities of between $10
million and $50 million. Debtor is represented by Certilman Balin
Adler & Hyman, LLP.
BM318 LLC: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: BM318, LLC
Aledo, TX 76008
Case No.: 20-42789
Business Description: BM318, LLC is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: September 1, 2020
Court: United States Bankruptcy Court
Northern District of Texas
Judge: Hon. Mark X. Mullin
Debtor's Counsel: Joyce Lindauer, Esq.
JOYCE W. LINDAYUER ATTORNEY, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Tel: (972) 503-4033
E-mail: joyce@joycelindauer.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Tim Barton, president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/5Y3QJBY/BM318_LLC__txnbke-20-42789__0001.0.pdf?mcid=tGE4TAMA
BOYCE HYDRO: Seeks to Hire Goldstein & McClintock as Legal Counsel
------------------------------------------------------------------
Boyce Hydro, LLC and Boyce Hydro Power, LLC seek approval from the
U.S. Bankruptcy Court for the Eastern District of Michigan to
employ Goldstein & McClintock LLLP as their legal counsel.
The firm will provide the following legal services:
a. advise Debtors with respect to their powers and duties;
b. attend meetings and negotiate with representatives of
creditors and other parties;
c. take all necessary actions to protect and preserve Debtors'
estates;
d. prepare all necessary pleadings, reports and other legal
papers;
e. take all necessary actions to obtain approval of a
disclosure statement and confirmation of Debtors' plan of
reorganization;
f. represent Debtors in connection with obtaining
post-petition financing and use of cash collateral;
g. advise Debtors in connection with any potential sale of
Debtors' assets;
h. appear before the court; and
i. perform all other necessary legal services.
The rates charged by the firm range from $295 per hour for
associates to $810 per hour for senior partners. Legal assistants
and law clerks charge between $170 per hour and $235 per hour.
The firm's attorneys who are expected to handle the cases will be
paid at hourly rates as follows:
Matthew McClintock Partner $525
Daniel Curth Partner $515
Eric Garavaglia Associate $305
Goldstein & McClintock is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code, according to
court filings.
The firm can be reached through:
Matthew E. McClintock, Esq.
Goldstein & McClintock LLLP
111 W. Washington Street, Suite 1221
Chicago, IL 60605
Telephone: (312) 337-7700
Facsimile: (312) 277-2305
Email: mattm@goldmclaw.com
About Boyce Hydro LLC
Boyce Hydro, LLC and Boyce Hydro Power, LLC operate dams in Midland
and Gladwin counties in Michigan.
Boyce Hydro and Boyce Hydro Power sought protection under Chapter
11 of the Bankruptcy Code (Bankr. E.D. Mich. Lead Case No.
20-21214) on July 31, 2020. Lee W. Mueller, co-managing member,
signed the petitions.
At the time of the filing, each Debtor had estimated assets of
between $10 million and $50 million and liabilities of between $1
million and $10 million.
Goldstein & McClintock LLP is Debtors' legal counsel.
The Office of the U.S. Trustee appointed Mark H. Shapiro of
Steinberg, Shapiro & Clark as the Subchapter V trustee in Debtors'
Chapter 11 cases.
BRADLEY INVESTMENTS: Unsecureds Owed $1.8M to Get $174K in Plan
---------------------------------------------------------------
Bradley Investments, Inc., filed the Disclosure Statement
accompanying Amended Plan of Reorganization dated July 21, 2020.
Class 11 Yamaha Motor Finance Corp. with an amount of claim $9,444
and Class 12 Yamaha Motor Finance Corp. with an amount of claim
$65,896 will be treated as claims in Class 13. Class 13 unsecured
claims totaling $1,773,549 will be paid $2,000 per month for 87
months.
A full-text copy of the Amended Plan of Reorganization dated July
21, 2020, is available at https://tinyurl.com/yy9mpfeq from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Irvin Grodsky
Post Office Box 3123
Mobile, Alabama 36652
Tel: (251) 433-3657
About Bradley Investments
Bradley Investments, Inc., which conducts business under the name
Timbercreek Golf Club, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Ala. Case No. 19-12908) on Aug. 22,
2019. At the time of the filing, the Debtor was estimated to have
assets of between $1 million and $10 million and liabilities of the
same range. The case has been assigned to Judge Henry A. Callaway.
The Debtor is represented by Irvin Grodsky, Esq., at Grodsky and
Owens.
On Sept. 19, 2019, the U.S. Bankruptcy Court for the Southern
District of Alabama appointed an Official Committee of Unsecured
Creditors. The Committee retained Blakeley LLP as counsel.
BRIGGS & STRATTON: Alpha IR, Reputation Work on Bankruptcy
----------------------------------------------------------
Kevin McCauley, writing for ODWYERPR, reports that Alpha IR Group
and Reputation Partners are handling the Chapter 11 restructuring
of debt-burdened Briggs & Stratton, the world's No. 1 maker of gas
engines for outdoor power equipment.
The 112-year-old company has also ironed out a $550 million deal
with KPS Capital Partners, which promises to keep B&S in business.
The Milwaukee-based manufacturer has been exploring its financial
options during the past several months, according to CEO Todd
Teske. "The challenges we have faced during the COVID-19 pandemic
have made reorganization the difficult but necessary and
appropriate path forward to secure our business," he said. "It also
gives us support to execute on our strategic plans to bring greater
value to our customers and channel partners.”
B&S suffered a $193.6M net loss for the nine-month period ended
March 30 on $1.2B in revenues.
Alpha IR Group CEO Chris Hodges and Reputation Partners' CEO Nick
Kalm are working the B&S reorganization.
The Alpha IR Group is a holistic investor relations consulting firm
that provides strategic counsel and informs the decision-making of
America's leading public companies. Its partnership programs,
research capabilities and project services are designed to protect
and enhance its clients' reputations, credibility, and ultimately,
their valuation.
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. The Company's 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. At the time of
the filing, Briggs & Stratton Corporation disclosed total assets of
$1,589,398,000 and total liabilities of $1,350,058,000 as of March
29, 2020.
Judge Barry S. Schermer oversees the cases.
The Debtors 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.
The Office of the U.S. Trustee appointed a committee to represent
unsecured creditors in Debtors' Chapter 11 cases.
BRIGGS & STRATTON: Committee Taps Doster Ullom as Local Counsel
---------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 cases of Briggs & Stratton Corp. and its affiliates
received
provisional approval from the U.S. Bankruptcy Court for the
Eastern
District of Missouri to hire Doster, Ullom & Boyle, LLC as its
local counsel.
The firm will provide the following services:
a) provide legal advice regarding the powers and duties
available to the committee;
b) assist the committee's legal counsel, Brown Rudnick LLP, in
the investigation of the acts, conduct, assets, liabilities, and
financial condition of the Debtors, or to the formulation of a
reorganization or liquidation plan;
c) assist Brown Rudnick in preparing legal papers;
d) assist Brown Rudnick and the committee in responding to all
pleadings filed by the Debtors or other parties-in-interest;
e) consult with Debtors and their professionals concerning the
administration of the estates;
f) represent the committee in hearings and other proceedings;
g) advise the committee on practice and procedure in the court
and regarding the local rules and practice; and
h) perform all other legal services for the committee.
The firm's hourly rates are as follows: $575 per hour for
shareholders and counsel; $350 per hour for associates; and $150
per hour for paraprofessionals.
Gregory Willard, Esq., an attorney at Doster Ullom, disclosed in
court filings that the firm is a "disinterested person" as that
term is defined in Bankruptcy Code.
The firm can be reached through:
Gregory D. Willard, Esq.
Alexander L. Moen, Esq.
16150 Main Circle Drive, Suite 250
St. Louis, MO 63017
Telephone: (636) 532-0042
Email: gwillard@dubllc.com
amoen@dubllc.com
About Briggs & Stratton Corporation
Briggs & Stratton Corporation -- https://www.basco.com/ -- 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. The
Company's products are marketed and serviced in more than 100
countries on six continents through 40,000 authorized dealers and
service organizations.
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. At the time of the
filing, Briggs & Stratton Corporation disclosed total assets of
$1,589,398,000 and total liabilities of $1,350,058,000 as of March
29, 2020.
Judge Barry S. Schermer oversees the cases.
The Debtors 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.
The Office of the U.S. Trustee appointed a committee to represent
unsecured creditors in Debtors' Chapter 11 cases.
BRUNO ONE: Chapter 7 Conversion Order Upheld
--------------------------------------------
In the case captioned BRUNO ONE, INC., Appellant, v. UNITED STATES
TRUSTEE, Appellee, Civil Case No. 8:19-cv-3006-T-24 (M.D. Fla.),
District Judge Susan C. Bucklew affirms the bankruptcy court's
order converting Debtor Bruno One, Inc.'s chapter 11 case to
chapter 7.
Bruno One, Inc. owns and leases residential real estate. The Debtor
filed for bankruptcy under Chapter 11 on August 22, 2019. On August
23, 2019, the bankruptcy court issued an order directing the Debtor
to correct certain deficiencies in its petition. The due dates for
fixing the deficiencies ranged from 3 to 14 days. An August 26,
2019, the bankruptcy court reminded the Debtor of its obligation to
file monthly operating reports. The bankruptcy court warned the
Debtor that the failure to maintain proper insurance and to file
its monthly operating reports would constitute cause for dismissal
or conversion of the case.
On Sept. 12, 2019, Appellee-United States Trustee filed a motion to
dismiss or convert the case to Chapter 7 due to the Debtor's
failure to file the required documents. Pursuant to section
1112(b)(1), the bankruptcy "court shall convert a case under
[Chapter 11] to a case under [C]hapter 7 or dismiss a case under
[Chapter 11], whichever is in the best interests of creditors and
the estate, for cause.
On Sept. 20, 2019, well after their due date, the Debtor made the
following four filings: First, the Debtor filed its Case Management
Summary indicating that it had real estate worth approximately $8.3
million and claims from secured creditors totaling approximately
$3.2 million. Second, the Debtor filed its Schedules A, B, D, E, F,
G, and H, as well as its Declaration Under Penalty of Perjury. The
Schedules indicated that the Debtor's real estate consisted of 28
properties with $3.2 million in debt associated with them, as well
as claims of unsecured creditors totaling approximately $1.9
million. The Schedules also indicated that the Debtor had no
leases, despite the fact that the Debtor did have leases on at
least some of its properties. Third, the Debtor filed its list of
Twenty Largest Unsecured Creditors, but failed to fill out the
amounts of their claims. Fourth, the Debtor filed its Statement of
Financial Affairs, which the bankruptcy court found to be deficient
and gave the Debtor 14 days to fix. The Debtor filed an amended
Statement of Financial Affairs on October 9, 2019 -- after the
bankruptcy court's deadline.
On Oct. 10, 2019, the bankruptcy court held a hearing on the
Trustee's motion. At the hearing, the Trustee explained to the
bankruptcy court that the Debtor did not obtain proper insurance
for its real properties that would protect the bankruptcy estate,
and its counsel acknowledged that fact. The Trustee also argued
that the Debtor failed to file all of the required documents,
including the August monthly operating report, prior tax returns,
and evidence that any unsecured creditors received notice of the
bankruptcy. The Debtor acknowledged its failure to file the August
monthly operating report.
At the hearing, the bankruptcy court stated that it would grant the
Trustee's motion to convert the case. The bankruptcy court found
that there was cause to convert the case, because the Debtor had
not obtained sufficient insurance on its properties and the Debtor
was not complying with the rules of Chapter 11 and the court's
orders. The Debtor's filings showed no income coming in, and the
bankruptcy court noted that without income, a confirmed Chapter 11
plan was not likely. The bankruptcy court found that conversion was
preferable to dismissal, because, according to the Debtor's
filings, there was significant equity in the Debtor's real estate
that could be used to pay the unsecured creditors. On Oct. 21,
2019, the bankruptcy court issued its orders converting the case to
Chapter 7.
The Debtor moved for reconsideration, arguing that it had cured its
deficient filings, procured insurance, and unusual circumstances
had existed that made conversion of the case to Chapter 7 not in
the best interest of the creditors and the bankruptcy estate. The
bankruptcy court held a hearing on the Debtor's motion on Nov. 19,
2019.
At the hearing, the bankruptcy court stated that it could not grant
the Debtor's motion for reconsideration, as there was no basis for
reconsideration under FCRP 59 or 60. The bankruptcy court stated
that the Debtor did not fix all of the deficiencies in its
schedules. On Nov. 21, 2019, the bankruptcy court issued an order
denying the Debtor's motion for reconsideration.
The Debtor appealed the bankruptcy court's order granting the
Trustee's motion to convert the case to Chapter 7, as well as the
order denying its motion for reconsideration. The Debtor then filed
a motion with the bankruptcy court to stay the bankruptcy
proceedings pending the appeal in the District Court.
The Debtor argues that: (1) unusual circumstances existed that made
converting the case to Chapter 7 not in the best interest of the
creditors or the estate; (2) the bankruptcy court should have
dismissed, rather than converted, the case; and (3) the Debtor
eventually obtained sufficient insurance, so reconsideration was
warranted. Judge Bucklew rejects the Debtor's arguments and finds
that the bankruptcy court did not abuse its discretion.
The Debtor argues that the bankruptcy court erred in converting
this case to Chapter 7 pursuant to section 1112(b), because unusual
circumstances existed that made converting the case not in the best
interest of the creditors or the estate. Section 1112(b)(1)
provides that the bankruptcy "court shall convert a case under
[Chapter 11] to a case under [C]hapter 7 or dismiss a case under
[Chapter 11], whichever is in the best interests of creditors and
the estate, for cause." Section 1112(b)(4) sets forth the types of
actions that constitute cause, which include: (1) failure to
maintain appropriate insurance, which poses a risk to the estate;
(2) failure to comply with an order of the bankruptcy court; and
(3) unexcused failure to satisfy timely any filing or reporting
requirement established by Title 11 or any rule applicable to
Chapter 11 cases. The bankruptcy court found that cause existed for
conversion due to insufficient insurance on Debtor's properties and
Debtor's failure to comply with court orders and Chapter 11 rules.
The District Court finds that there was no error in the bankruptcy
court's findings that cause existed for conversion.
This Court also rejects the Debtor's argument that by converting
the case to Chapter 7 and appointing a Chapter 7 trustee, the
bankruptcy estate will incur significant administration costs that
will reduce available funds to pay the creditors. Throughout all
three hearings discussing the conversion of the case to Chapter 7,
the bankruptcy court continually pointed out the Debtor's inability
to properly manage its business in order to pay off its creditors
within the confines of Chapter 11. The District Court agrees with
the bankruptcy court's finding on this issue.
Likewise, the District Court agrees with the bankruptcy court that
the Debtor did not establish the element that there existed a
reasonable justification for the act or omission creating the
grounds for converting the case that could be cured within a
reasonable period of time. The bankruptcy court did not find the
Debtor's excuses for its deficient filings to be sufficient and it
pointed out that the Debtor had already made attempts to cure the
deficiencies but failed to do so.
The Debtor argues that the bankruptcy court should have dismissed,
rather than converted, the case. The bankruptcy court determined
that conversion was in the best interest of the creditors because
there was equity in the real estate that could be used to pay off
the creditors and then provide Debtor with money to start over. The
bankruptcy court noted that if it had dismissed the case, the
unsecured creditors likely would not get paid. The District Court
agrees with the bankruptcy court's findings on this issue. The
District Court finds that the bankruptcy court did not abuse its
discretion in converting this case and denying the motion for
reconsideration on this issue.
A copy of the Court's Order dated July 27, 2020 is available at
https://bit.ly/3fJoCYz from Leagle.com.
About Bruno One
Based in Clearwater, Florida, Bruno One Inc. is a privately held
company engaged in activities related to real estate. The company
filed for chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case
No. 19-07927) on August 22, 2019, with estimated assets and
estimated liabilities of $1 million to $10 million respectively.
The petition was signed by Caruso Bruno Ivan, president.
The case was converted to chapter 7 on Oct. 10, 2019.
BUILDERS FIRSTSOURCE: Moody's Puts B1 CFR on Review for Upgrade
---------------------------------------------------------------
Moody's Investors Service placed Builders FirstSource, Inc.'s
(BLDR) ratings on review for possible upgrade including its B1
Corporate Family Rating (CFR), B1-PD Probability of Default Rating,
the B1 ratings on BLDR's senior secured term loan due 2024 and
senior secured notes due 2027, and the B3 rating on the company's
senior unsecured notes due 2030. The review follows an announcement
that BLDR is merging with BMC Stock Holdings, Inc. (BMC, Ba3
stable) in an all-stock transaction. The SGL-2 Speculative Grade
Liquidity Rating is maintained.
BMC, a national distributor of building materials and provider of
construction services, is one of BLDR'S largest competitors based
on revenue. The combined entity will have pro forma revenue in
excess of $11 billion and EBITDA nearing $950 million, which
includes some savings from synergies and Moody's standard
adjustments for operating leases. The combination will also expand
BLDR's national footprint and create cost savings from operational
improvements and procurement opportunities. BLDR will be the
surviving entity with an expected closing by late 2020 or early
2021.
"The merger creates unique opportunities for BLDR as the largest
distributor by any measure of building materials and construction
services to the homebuilding industry while improving key credit
metrics," according to Peter Doyle, a Moody's VP-Senior Analyst.
The following ratings/assessments are affected by the actions:
On Review for Possible Upgrade:
Issuer: Builders FirstSource, Inc.
Corporate Family Rating, Placed on Review for Upgrade, currently
B1
Probability of Default Rating, Placed on Review for Upgrade,
currently B1-PD
Senior Secured Bank Credit Facility, Placed on Review for Upgrade,
currently B1 (LGD4)
Senior Secured Regular Bond/Debenture, Placed on Review for
Upgrade, currently B1 (LGD4)
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Upgrade, currently B3 (LGD5)
Outlook Actions:
Issuer: Builders FirstSource, Inc.
Outlook, Changed to Rating Under Review from Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Moody's review will consider the progress toward a completion of
the transaction as planned given required shareholder approvals and
review by the Department of Justice for anti-trust concerns.
Moody's will also analyze BLDR's liquidity strategy, the company's
integration plans and the cash payments associated with achieving
the proposed run-rate cost savings of $130 - $150 million by year
three after closing. On a pro forma basis Moody's estimates BLDR's
operating margin approaching 6.0% and adjusted debt-to-LTM EBITDA
of nearly 2.6x. Hence, at least a one notch upgrade of BLDR'S
current B1 CFR will be considered upon the conclusion of the
review.
Governance risks Moody's considers in BLDR's credit profile include
a conservative financial policy evidenced by its low leverage. Upon
the completion of the merger, BLDR's Board of Directors will
consist of 12 members. Seven directors will come from BLDR's
existing Board and five from BMC's existing Board. This level of
board experience, independence and oversight should help minimize
governance risks, including excessive leverage and integrating the
companies without interfering with business.
Builders FirstSource, Inc., headquartered in Dallas, Texas, is a
national distributor of lumber, trusses, millwork, and other
building products, and a provider of construction services.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
CARLOS ROBLES: ACM Objects to Disclosure Statement
--------------------------------------------------
ACM CCSC OB VII (CAYMAN) Asset Company filed an objection to Second
Amended Disclosure Statement filed by Carlos Robles Tile & Stone,
Inc.
ACM points out that the Disclosure Statement and Plan failed to
disclose the extent and limits of insurance coverage regarding the
real property secured by ACM. Furthermore, the Debtor must provide
ACM with evidence of the current insurance policy in place.
ACM asserts that the Debtor must explain why it is designating
Class 2 of General Secured Creditors as unimpaired in both the
Disclosure Statement and Plan, when the truth is that Debtor is
modifying the repayment terms to ACM through the proposed plan; and
therefore, ACM is entitled to vote on the Plan.
ACM complains that the Debtor must explain how it will be able to
make plan payments of $12,406, when Debtor's monthly operating
reports show that since the filing of the petition Debtor’s net
income has averaged $844.05 monthly.
According to ACM, Debtor must explain the basis for the projected
increase of daily sales volume to 5% for the year 2019-2020 and 10%
for years 2020-2021, and 5% for the years 2022-2025, in view that
the Debtor's Monthly Operating Reports show that Debtor's monthly
average Sales Income has been constantly decreasing since the
filing of the petition.
ACM points out that the Debtor must explain why monthly plan
payments are reduced from $12,462 (Years 1-5) to $4,912 (Years
6-7), while both secured and unsecured creditors are still been
paid.
ACM asserts that the Debtor must explain why in its projections,
Debtor is proposing a $10,000 expense as "Unprovided" for
"unforeseen or underestimated expenses".
ACM complains that neither the Plan nor the Disclosure Statement
specifies the rights and remedies that would be available to
creditors in the event of a default by Debtor in making the monthly
payments due them under the Plan.
According to ACM, Debtor has not filed the Monthly Operating Report
corresponding to June 2020.
Attorney for ACM CCSC OB VII (CAYMAN) ASSET COMPANY:
MARISTELLA SÁNCHEZ RODRÍGUEZ
DELGADO & FERNÁNDEZ, LLC
PO Box 11750
Fernández Juncos Station
San Juan, Puerto Rico 00910-1750
Tel: (787) 274-1414
Tel: (787) 764-8241
E-mail: msanchez@delgadofernandez.com
About Carlos Robles Tile & Stone
Carlos Robles Tile & Stone, Inc., operates a store that sells
tiles, stones and related materials. Its business and office are
located at 383 Ave. Cesar Gonzalez, Urb. Eleanor Roosevelt, San
Juan, Puerto Rico.
Carlos Robles Tile & Stone previously sought bankruptcy protection
on March 19, 2015 (Bankr. D.P.R. Case No. 15-02004).
Carlos Robles Tile & Stone sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D.P.R. Case No. 18-05145) on Sept. 5,
2018. In the petition signed by Carlos Robles Marin, president,
the Debtor disclosed $486,000 in assets and $3,517,613 in
liabilities. Judge Mildred Caban Flores oversees the case. The
Debtor tapped the Law Offices of Luis D. Flores Gonzalez as its
legal counsel.
CENTRIC BRANDS: Sept. 18 Auction of Equity Interests in SWIMS AS
----------------------------------------------------------------
Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern
District of New York authorized the bidding procedures of Centric
Brands Inc. and its affiliated debtors in connection with the
auction sale of their equity interests in SWIMS AS, a foreign,
non-Debtor subsidiary.
A hearing on the Motion was held on Aug. 19, 2020 at 2:00 p.m.
The Sale Notice is approved. Within one day after the entry of the
Order, or as soon thereafter as practicable, the Debtors (or their
agents) will serve the Sale Notice upon the Sale Notice Parties.
Within three business days after entry of the Bidding Procedures
Order, the Debtors will cause the information contained in the Sale
Notice to be published once in a national publication and once in
an international publication as soon as practicable thereafter.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Sept. 14, 2020 at 5:00 p.m. (ET)
b. Initial Bid: A Qualified Bidder must offer to purchase the
Assets at a purchase price and upon the terms and conditions set
forth therein.
c. Deposit: 10% of the proposed purchase price
d. Auction: If more than one Qualified Bid is received by
the Bid Deadline, then the Debtors will conduct the Auction. The
Auction will commence on Sept. 18, 2020 at 10:00 a.m. (ET) via a
Zoom virtual meeting by logging on to the Zoom website
(https://zoom.us/join) and entering the Meeting ID, which will be
provided to Qualified Bidders by electronic mail not later than
5:00
p.m. (ET) on Sept. 17, 2020 or such other place or platform as the
Debtors will timely notify the Qualified Bidders.
e. Bid Increments: The Debtors will announce what the bidding
increments are at the Auction.
f. Sale Hearing: October 1, 2020 at 11:00 a.m. (ET)
g. Sale Objection Deadline: Sept. 24, 2020 at 4:00 p.m. (ET)
h. The DIP Revolving Facility Collateral Agent, the DIP Term
Agent, the Prepetition First Lien Agents, and the Prepetition
Second Lien Agent will be considered a Qualified Bidder and may
submit a credit bid to acquire the Assets which credit bid will be
deemed a Qualified Bid.
The Debtors are authorized to continue to provide intercompany
loans from Centric Brands Holding, LLC to SWIMS AS, and, if the
Debtors deem appropriate, to do so on a secured basis until the
closing of the Sale.
The Order will be effective and enforceable immediately upon
entry.
A copy of the Bidding Procedures is available at
https://tinyurl.com/y5dfyng7 from PacerMonitor.com free of charge.
About Centric Brands
Centric Brands Inc. designs, produces, merchandises, manages and
markets kidswear, accessories, and men's and women's apparel under
owned, licensed and private label brands. Currently, the company
and its affiliates license over 100 brands, including AllSaints,
BCBG, Buffalo, Calvin Klein, Disney, Frye, Herve Leger, Jessica
Simpson, Joe's, Kate Spade, Kenneth Cole, Marvel, Michael Kors,
Nautica, Nickelodeon, Spyder, Timberland, Tommy Hilfiger, Under
Armour, and Warner Brothers. The companies sell licensed products
through both retail and wholesale channels.
Centric Brands and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22637)
on May 18, 2020. As of March 31, 2020, Debtors disclosed
$1,855,722,808 in total assets and $2,014,385,923 in total
liabilities.
Judge Sean H. Lane oversees the cases.
The Debtors tapped Ropes & Gray, LLP as bankruptcy counsel; PJT
Partners, Inc. as investment banker; Alvarez & Marsal, LLC as
financial advisor; and Prime Clerk, LLC as notice, claims and
balloting agent.
CHAPARRAL ENERGY: Seeks to Hire Davis Polk as Legal Counsel
-----------------------------------------------------------
Chaparral Energy, Inc. and affiliates seek approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Davis Polk
& Wardwell, LLP as legal counsel.
The firm will render these legal services:
(a) prepare legal papers;
(b) advise Debtors regarding their rights, powers and duties
in the continued management and operation of their businesses and
properties;
(c) prepare documentation and pleadings and take all necessary
actions in connection with debt restructuring, statutory bankruptcy
issues, post-petition financing, strategic transactions, asset sale
transactions, securities laws, real estate, environmental, labor,
employee benefits, business and commercial litigation, and
corporate and tax matters;
(d) take all necessary actions to protect and preserve
Debtors' estates;
(e) take all necessary actions in connection with any
potential sale of all or substantially all of Debtors' assets;
(f) take all necessary actions in connection with any Chapter
11 plan, disclosure statement and all related documents; and
(g) perform all other legal services in connection with
Debtors' Chapter 11 cases.
Davis Polk's hourly rates are as follows:
Partners $1,370 - $1,685
Counsel $1,295
Associates $560 - $1,095
Paraprofessionals $325 - $450
The firm will also charge Debtors for out-of-pocket expenses
incurred.
Debtors provided Davis Polk with advance payments of $500,000 on
May 13 and $1 million on July 2 to establish and maintain a
retainer.
As of the filing of Debtor's cases, Davis Polk held a retainer
balance in the approximate amount of $1,668,745.50.
Damian Schaible, Esq., a partner at Davis Polk, disclosed in court
filings that the firm and its employees are "disinterested persons"
as defined in Section 101(14) of the Bankruptcy Code.
Mr. Schaible also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the U.S. Trustee Guidelines:
Question: Did you agree to any variations from, or alternatives to,
your standard or customary billing arrangements for this
engagement?
Answer: Davis Polk has agreed to negotiated discounts off of its
standard rates.
Question: Do any of the professionals included in this engagement
vary their rate based on the geographic location of the bankruptcy
case?
Answer: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Answer: In March 2020, Debtors applied rates that reflected an
additional discount to Davis Polk's billing rates.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Answer: Davis Polk intends to provide a prospective budget and
staffing plan for these Chapter 11 cases and will continue to work
with Debtors on the budget and staffing plan. Additionally, the
Court has approved a general 13-week Debtor budget on an interim
basis which includes Davis Polk's engagement.
The firm can be reached through:
Damian S. Schaible, Esq.
Angela M. Libby, Esq.
Jacob S. Weiner, Esq.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, NY 10017
Telephone: (212) 450-4000
Facsimile: (212) 701-5800
Email: damian.schaible@davispolk.com
angela.libby@davispolk.com
jacob.weiner@davispolk.com
About Chaparral Energy
Chaparral Energy, Inc. is an independent oil and natural gas
exploration and production company headquartered in Oklahoma City.
Founded in 1988, Chaparral Energy is focused in the oil window of
the Anadarko Basin in the heart of Oklahoma. Visit
http://www.chaparralenergy.comfor more information.
On Aug. 16, 2020, Chaparral Energy and its debtor affiliates filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 20-11947). Charles Duginski,
chief executive officer, signed the petitions. At the time of the
filing, Debtors disclosed total assets of $595,167,000 and total
liabilities of $522,288,000 as of June 30, 2020.
Judge Mary F. Walrath oversees the cases.
Debtors have tapped Davis Polk & Wardwell LLP and Richards, Layton
& Finger, P.A. as counsel, Intrepid Partners, LLC as investment
banker, Rothschild & Co. as financial advisor, and Opportune LLP
as
restructuring advisor. Kurtzman Carson Consultants LLC is the
claims and noticing agent and administrative advisor.
CHAPARRAL ENERGY: Seeks to Tap Richards Layton as Legal Counsel
---------------------------------------------------------------
Chaparral Energy, Inc. and affiliates seek approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Richards,
Layton & Finger, P.A.
Richards Layton will serve as co-counsel with Davis Polk &
Wardwell, LLP, the other firm tapped by Debtors to handle their
Chapter 11 cases.
The firm's hourly rates are as follows:
Partners $725 - $1,200
Associates $400 - $665
Paraprofessionals $295
The principal professionals and paraprofessionals designated to
represent Debtors and their standard hourly rates are as follows:
John H. Knight $950
Amanda R. Steele $750
Brendan J. Schlauch $595
Christopher M. De Lillo $550
Travis J. Cuomo $485
Rebecca V. Speaker $295
The firm will also charge Debtors for out-of-pocket expenses
incurred.
John Knight, Esq., a director at Richards Layton, disclosed in
court filings that the firm is a "disinterested person" as defined
in Section 101(14) of the Bankruptcy Code.
Mr. Knight also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the U.S. Trustee Guidelines:
Question: Did you agree to any variations from, or alternatives to,
your standard or customary billing arrangements for this
engagement?
Answer: Richards Layton did not agree to any variations from, or
alternatives to, its standard or customary billing arrangements for
this engagement;
Question: Do any of the professionals included in this engagement
vary their rate based on the geographic location of the bankruptcy
case?
Answer: None of Richards Layton's professionals included in this
engagement have varied their rate based on the geographic location
of Debtors' Chapter 11 cases.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Answer: Richards Layton entered into an engagement letter with
Debtors in connection with their prior bankruptcy cases in March,
2016. In addition, the firm entered into a separate engagement
letter with Debtors with respect to the Chapter 11 cases in May
2020. Other than the periodic adjustments described above, the
billing rates and material financial terms of Richards Layton's
engagement have not changed post-petition from the prepetition
arrangement.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Answer: Richards Layton, in conjunction with Debtors, is developing
a prospective budget and staffing plan for their bankruptcy cases.
The firm can be reached through:
John H. Knight, Esq.
Amanda R. Steele, Esq.
Brendan J. Schlauch, Esq.
Christopher M. De Lillo, Esq.
Travis J. Cuomo, Esq.
Richards, Layton & Finger, P.A.
One Rodney Square
920 North King St.
Wilmington, DE 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
Email: knight@rlf.com
steele@rlf.com
schlauch@rlf.com
delillo@rlf.com
cuomo@rlf.com
About Chaparral Energy
Chaparral Energy, Inc. is an independent oil and natural gas
exploration and production company headquartered in Oklahoma City.
Founded in 1988, Chaparral Energy is focused in the oil window of
the Anadarko Basin in the heart of Oklahoma. Visit
http://www.chaparralenergy.comfor more information.
On Aug. 16, 2020, Chaparral Energy and its debtor affiliates filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 20-11947). Charles Duginski,
chief executive officer, signed the petitions. At the time of the
filing, Debtors disclosed total assets of $595,167,000 and total
liabilities of $522,288,000 as of June 30, 2020.
Judge Mary F. Walrath oversees the cases.
Debtors have tapped Davis Polk & Wardwell LLP and Richards, Layton
& Finger, P.A. as counsel, Intrepid Partners, LLC as investment
banker, Rothschild & Co. as financial advisor, and Opportune LLP
as
restructuring advisor. Kurtzman Carson Consultants LLC is the
claims and noticing agent and administrative advisor.
CHENIERE ENERGY: Fitch Affirms BB LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch has affirmed Cheniere Energy Partners' (CQP) 'BB' Long-Term
Issuer Default Rating (IDR) and the senior unsecured rating of
'BB'/'RR4'. The Rating Outlook is Stable.
The rating reflects the contractual support and stable cash flows
provided under long-term Sale & Purchase Agreements (SPA) with
high-quality investment-grade counterparties, and declining project
completion risk for the project expansion, Train 6. These factors
are offset by a high degree of structural subordination to
project-level debt, refinancing risk at SPL, significant structural
complexity and the challenges in the energy markets.
Fitch believes fewer merchant cargo loadings will occur in 2020
compared to 2019. Barring a significantly colder-than-normal winter
of 2020/2021 in the northern hemisphere, Fitch believes 2021 will
show modest improvement, with slight margin improvement for
merchant LNG sales between CQP and Cheniere Marketing, LLC (CMI).
Given the long history of liquefied natural gas (LNG) fuel price
being linked to the price of crude oil, it is possible that a
meaningful customer of CQP will experience pressure on credit
quality in the near term. Almost unique among North American
midstream debt issuers monitored by Fitch, CQP is subject to the
risk that cash is trapped at its operating subsidiary, Sabine Pass
Liquefaction, LLC (SPL).
KEY RATING DRIVERS
Structural Subordination: CQP is structurally subordinate to $13.6
billion in Sabine Pass Liquefaction, LLC (SPL) non-recourse project
debt used to fund the construction and development of Trains 1-5.
Project debt covenants restrict distributions to CQP, subject to
coverage tests. Significant project debt maturities are occurring
every year. Refinancing at the project level requires full
amortization of principal within the SPA term, and will reduce cash
available for distributions to CQP. As a result, CQP plans to
migrate a portion of project debt to CQP and extend project level
amortizations, focusing on alleviating the structure subordination
of CQP debt to SPL project debt. Fitch believes that the planned
optimization of the capital structure may be delayed given the
economic headwinds until operating leverage improves with the
completion of Train 6.
Long-Term Contracted Cash Flows: SPL's revenues and cash flows from
customers are backed by long-term SPAs with investment grade
counterparties. Each SPA provides revenue from a fixed capacity fee
that is paid regardless of LNG volumes lifted and a variable fee
for LNG volumes delivered equal to 115% of current Henry Hub
prices. In total, the fixed component alone is $2.9 billion in
contractual revenues from the first five trains. Fitch believes
this contract structure provides security by effectively passing
through the natural gas cost, while retaining a minimum upside in
the form of the fixed capacity payments, resulting in adequate
coverage of both SPL's and CQP's debt obligations.
The severe drop-in economic activity during the global coronavirus
pandemic reduced demand and depressed natural gas prices globally
while the high LNG storage levels in Europe following a warm
2019/2020 winter reduced the need for new injections. Despite these
headwinds, SPL received stable fixed capacity payments. Fitch
believes this structure insulates SPL from broader trends in the
demand for LNG, despite the cancellation of cargos by SPL's
customers, with volumes down 6% YTD through June 30, 2020,
permitted under the SPAs. This view is supported by the recently
announced approximately $7 billion sale of 40% of its equity
interest in CQP by The Blackstone Group (Blackstone) to Brookfield
Asset Management. Blackstone acquired 40.3% of CQP in 2012 for $1.5
billion.
High Quality Counterparties: SPL's long term, fully contracted
counterparties for its SPA's (which comprise BG Energy/A+/Stable
fully owned by Royal Dutch Shell, Gas Natural SDG/BBB/Stable, Korea
Gas/AA-/Stable, GAIL (India) Ltd/BBB-/Negative, Total/AA-/Stable,
and Centrica/NR) all retain investment grade credit profiles.
Contract structures ensure flexibility in lifting volumes, allowing
for cancellations of cargos, while simultaneously protecting CQP
against downside risk by imposing a fixed capacity fee that is paid
regardless of volumes actually delivered to offtakers. SPLNG's
counterparties for its external tolling use agreement (TUA) are
also investment grade (Shell/AA-/Negative, Total/AA-/Stable).
Concerns relate to the presence of some 'BBB'-rated customers,
namely Naturgy Energy Group, S.A. and GAIL (India) (Fitch scp BBB,
IDR BBB-/Negative). The concern is a low-likelihood/high-severity
scenario of customer non-payment. The Sabine project debt indenture
contains a cash trap provision that prevents cash distributions to
CQP if forward-looking debt service coverage ratios are less than
1.20x. The most likely way to trigger a cash trap is long-term
customer non-payment at a time of low spot prices (these two tend
to correlate, especially during the current market stress). At the
current time, this risk of non-payment is remote, but it does
factor into the rating.
Tolling Agreements at SPLNG, Fixed Capacity Fees at CTPL: Creole
Trail Pipeline (CTPL) and Sabine Pass LNG (SPLNG) are unlevered
guarantors of CQP's debt and, in Fitch's opinion, provide
predictable cash flow directly to CQP. Under its Tolling Use
Agreements (TUA's), SPLNG, which owns two marine berths for loading
and unloading LNG onto tankers, regasification capacity of 4 bcf/d,
and storage capacity of 16.9 bcfe, receives $250 million from SPL
per year for use of its berths and regasification, with payments
increasing as trains come on stream and ramp up cargo loading
operations. Additionally, SPLNG receives $125 million per year for
20 years, from both Total S.A. (AA-/Stable) and Chevron Corporation
for use of 1bcf/d (billion cubic feet per day) of regasification
capacity for importation of LNG. CTPL receives approximately $80
million per annum from SPL under its firm capacity reservation
contract.
Revenues to CTPL and SPLNG received under the reservation contracts
and the TUA from SPL are operating expenses, senior to project
level debt service, and not subject to distribution covenants and
double leverage. These revenues indicating serviceability of debt
even without support from the liquefaction project, bolstering
CQP's credit profile.
Structural Complexity: In addition to the TUAs and contracts
between SPL, CTPL and SPLNG, CQP on a consolidated basis is engaged
in a number of related-party transactions and contracts with other
entities in the Cheniere Energy Inc. (CEI) corporate structure.
Cheniere Marketing, LLC (CMI) has a contract to purchase, at its
option, any LNG in excess of the amount required for the fully
contracted customers, to be marketed on a short-, medium- and
long-term basis. While there are weak legal ties between the
obligations of CQP and the project subsidiary SPL, operational
linkages are much stronger, as SPL could not operate without the
use of the SPLNG storage, regasification and loading facilities.
Fitch's ratings consider that CQP is structured as a
bankruptcy-remote entity from SPL. However, the structural
complexity can create competing incentives for cash usage.
Lower Execution Risk: Managing the construction and operations of
the stations has be done at a very high level of performance.
Construction on Trains 1-5 is complete. Train 6 is under
construction and is ahead of schedule and under budget. The EPC
contractor Bechtel Oil, Gas & Chemicals, Inc. (Bechtel) has a
turn-key, lump-sum basis with CQP and bears all cost overrun risk.
Bechtel is subject to liquidated damages if construction is not
completed by the guaranteed dates. With 64% of Train 6 construction
complete as of June 30, 2020, completion risk is moderating and
management anticipates an early completion, service date in 2H
2022.
Reduction in Leverage: Fitch believes management's intention to
lower consolidated leverage to mid to high 4x leverage at CEI (NR)
may be delayed until the start of commercial operations of Train 6.
Fitch notes that Train 6 currently has less contracted capacity
than existing Trains 1-5, with only 1.8 MTPA of capacity currently
contracted to Train 6. Contract capacity for Train 6 is less than
full capacity; however, CEI announced it will assign a SPA to the
remaining open capacity from an investment-grade counterparty by
Train 6 completion. CMI currently has two assignable long-term
contracts with investment-grade counterparties for Train 6. Fitch
notes the potential for these contracts to be DES (Delivered Ex
Ship), which would expose CQP to shipping cost risks that is not
present under its existing FOB (Free on Board) contract structure.
Coronavirus Limits Marketing Upside: Excess capacity not lifted by
the long-term offtakers can be marketed to uncontracted customers
on a short-term basis through a contract with CMI. Throughout SPL's
history, earnings have seen upside from these merchant LNG sales.
However, the state of the global LNG market is quite volatile
coming off the heels of strong supply growth in 1Q20 in an already
well supplied global market. The impact of the pandemic reduced
global demand along with a sudden drop in oil prices added pressure
to LNG prices and the warmer than usual European 2019-2020 winter
reduced the need for new LNG injections into storage facilities.
These global factors may halt any near-term earnings uplift
abruptly and slow projected new capacity addition in the market.
Fitch expects in the intermediate term, tailwinds will pick up as
global demand resumes and these short-to-medium-term contracts
provide an earnings uplift, though not assumed in the rating case.
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.
CQP has a relevance Score of 4 for Group Structure and Financial
Transparency as it possesses a complex group structure, with
significant related party transactions and ownership concentration.
This has a negative impact on the credit profile and is relevant to
the rating in conjunction with other factors.
DERIVATION SUMMARY
CQP is a master limited partnership with a liquefied natural gas
import-export facility and a Federal Energy Regulatory Commission
(FERC) regulated interstate natural gas pipeline operating
subsidiary. CQP's consolidated operations are supported by
long-term, take-or-pay style contracts for import, export and
pipeline capacity. Its ratings reflect CQP's cash flow growth and
stability, which is supported by the pass-through of fixed and
variable costs of LNG to its contractually obligated offtakers, a
high degree of structural subordination to project-level debt,
declining project completion risk, investment-grade counterparties
and structural complexity.
CQP's contract tenor, earnings and stable cash flow profile
compares favorably with its midstream energy peers, such as
Boardwalk Pipeline Partners LP (BBB-/Stable). Boardwalk has
subsidiaries with very low leverage, and the debt at the operating
companies poses no threat of a cash trap. In contrast, SPL is
highly levered, and in a combined and severe downside case of
payment default by a large customer and weak merchant price
forecast realizations, cash could be trapped at SPL.
Fitch notes Sabine Pass Liquefaction, LLC's (SPL) contracts are of
much more substantial duration than any of its midstream peers, in
addition to its primarily fee-based revenue. On this basis, Fitch
considers CQP's business risk profile to be similar to a company
with full take-or-pay contracts. SPL's current contracts on Trains
1-5 currently have between 17 and 20 years of term remaining,
providing a significant amount of comfort that revenue and earnings
from SPL will be stable. SPL's contract profile is with
investment-grade counterparties.
Consolidated leverage levels are high for CQP, relative to Fitch's
rated midstream coverage, with 2019 consolidated debt with equity
credit/EBITDA of 7.1x, declining to 6.7x in 2021 under the rating
case versus Fitch's expectations of leverage of 'BB' midstream
issuers in the 5.0x to 5.5x range. Fitch believes the growth nature
of CQP's operating profile, its demonstrated ability to manage
construction and completion risks at its liquefaction projects, and
the cash flow stability provided by its long-term capacity
contracts are meaningful offsets to its high consolidated leverage.
Cash flows are primarily derived from operations at SPL and Fitch's
ratings consider the structural subordination CQP debt has to SPL's
high levels of project level financing.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Agency's Rating Case for the
Issuer
-- Fitch's price deck for natural gas; long-term natural-gas
price at Henry Hub of $2.45/MMBtu;
-- Construction of Train 6 at SPL completes on schedule,
consistent with management expectations and the most recent
construction updates;
-- TUA Payments to SPLNG from 3rd parties remain stable until
contract expiration in 2029;
-- Train 6 assumes only revenues from assigned contracts and
contracts will be assigned at the start of operations;
-- No material CMI revenues are assumed in the rating case;
-- Upstream distributions to CQP remain stable.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
-- Consolidated total debt with equity credit/EBITDA below 6.0x
on a sustained basis, which would allow the company to receive a
rating closer to SPL's rating, though still likely notched below
SPL's rating;
-- Positive rating action at SPL.
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
-- Any construction or operating delays at SPL beyond the
original construction completion of first half 2023 that delay or
deteriorate cash flows or increase leverage;
-- New debt at SPLNG or CTPL;
-- Negative ratings actions at SPA counterparties to
below-investment grade;
-- Negative ratings actions at SPL;
-- Consolidated total debt with equity credit/EBITDA above 7.0x
expected on a sustained basis.
LIQUIDITY AND DEBT STRUCTURE
Liquidity is adequate. As of June 30, 2020, consolidated CQP
liquidity was $2.9 billion, including $1.3 billion unrestricted
cash. SPL maintains a revolving credit facility due in 2025 with
$791 million available as of June 30, 2020 that it uses primarily
to fund working capital needs related to construction of the
facility's projects. CQP has its own $750 million revolver that
matures in 2024 with full availability. The CQP credit facility
will be used to fund the development and construction of train 6.
In addition, CQP and its subsidiaries have large cash accounts,
with amounts held at the SPL project considered restricted,
totaling $167 million as of June 30, 2020. These amounts are
available to CQP as long as 12-month forward and historical DSCR
covenant of 1.25x is maintained. Fitch anticipates that
distributions to CQP will remain available and increase as Train 6
comes online.
Cash held at SPL is available to CQP, contingent upon maintenance
of the DSCR covenant test described. Fitch recognizes that this
cash is held at a non-recourse entity and can be withheld for a
variety of reasons; however, Fitch also considers that as long as
the DSCR test is satisfied CQP's current and forecast liquidity
should remain ample. Fitch continues to believe that CQP's
liquidity remains sufficient to meet its needs.
Maturities Manageable/Debt Migrating: CQP's and SPL's near-term
maturities are manageable. CQP's earliest maturity is 2024 for the
secured revolver. SPL's maturity profile is a bit more aggressively
laddered, with SPL having between $1.0 billion and $2.0 billion in
project debt maturing annually from 2022 until 2028 with $1 billion
upcoming in 2022. Management has indicated it expects to refinance
these maturing obligations with a combination of project level
debt, CQP unsecured notes and cash repayments with a focus on
maintaining an investment-grade profile at SPL and migrating a
proportion of project level debt to the CQP level. Ultimately
management has targeted mid-to-high 4.0x leverage levels on a
consolidated basis. Fitch believes that consolidated leverage at
CQP will remain elevated while construction continues on Train 6
given the economic and market headwinds.
SUMMARY OF FINANCIAL ADJUSTMENTS
Restricted Cash accounts on the balance sheet on a historical basis
were adjusted to show cash available at guarantor subsidiaries. In
addition to assessing CQP's consolidated credit metrics and
financial profile, Fitch assesses CQP's stand-alone credit and
financial characteristics to help determine the issuer's ability to
meet its fixed obligations.
ESG CONSIDERATIONS
Cheniere Energy Partners, L.P.: Group Structure: 4, GHG Emissions &
Air Quality: 4
Except for the matters discussed, the highest level of ESG credit
relevance, if present, is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity(ies),
either due to their nature or the way in which they are being
managed by the entity(ies).
COSI INC: Requests Court to Keep Virus Loan Denial Case Alive
-------------------------------------------------------------
Leslie A. Pappas,writing for Bloomberg News, reports that Cosi Inc.
urged a bankruptcy court to keep alive its dispute with the Small
Business Administration over a pandemic relief loan, arguing that
the restaurant chain operator plans to fight on despite a recent
unfavorable ruling.
Cosi, which filed for Chapter 11 in February, is one of several
companies that have fought an SBA policy blocking bankrupt
businesses from the Paycheck Protection Program. In April, the
U.S. Bankruptcy Court for the District of Delaware denied Cosi's
request for a temporary restraining order requiring the SBA to
consider its application.
About Cosi Inc.
Cosi, Inc. -- https://www.getcosi.com/ -- and its affiliates
operate fast-casual restaurants under the COSI brand. COSI features
flatbread made fresh throughout the day and specializes in a
variety of made-to-order hot and cold sandwiches, salads, bowls,
breakfast wraps, bagels, melts, soups, flatbread pizzas,
snacks,desserts, and a large offering of handcrafted, coffee-based,
and specialty beverages.
Cosi, Inc., and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 20-10417) on Feb. 24, 2020. Cosi, Inc., was
estimated to have $10 million to $50 million in assets and
liabilities.
The Debtors tapped Cozen O'Connor as counsel. Omni Agent Solutions
is the claims and noticing agent.
DEPENDABLE BUILDING: Unsecureds Will Recover 10% of Their Claims
----------------------------------------------------------------
Dependable Building Services, Inc., submitted a Second Amended
Disclosure Statement.
The Plan provides for distributions to the holders of Allowed
Claims from funds realized from existing cash deposits and the
Debtor's future earnings.
Class 4: Claims of general Unsecured Creditors (excluding the
unsecured claims of taxing bodies). The Allowed Amount of the
Unsecured Claims of general unsecured creditors (excluding the
unsecured claims of taxing bodies) will be repaid, pro rata, in the
amount of ten (10%) percent of the Allowed Unsecured Claims,
without interest, in 60 monthly payments, commencing 30 days after
the Effective Date. The total amount of estimated Allowed Unsecured
Claims (excluding the unsecured claims of taxing bodies) is
$355,262. Accordingly, the Class 4 creditors will receive,
pro-rata, a total of $35,526. The monthly payment is $592.10.
Class 5: Allowed Shareholder Interest of the Debtor, Janette
Tomaselli. The Shareholder Interest shall be retained by Tomaselli
in exchange for a new value contribution in the amount of $2,500,
payable in monthly installments over thirty-six (36) months,
commencing 30 days after the Effective Date.
Distributions under the Plan shall be made from cash deposits
existing at the time of Confirmation and from proceeds realized
from the Debtor's post-petition earnings.
A full-text copy of the Second Amended Disclosure Statement dated
July 22, 2020, is available at https://tinyurl.com/yxqalohe from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Joel A. Schechter
LAW OFFICES OF JOEL A. SCHECHTER
53 W. Jackson Blvd., Suite 1522
Chicago, Illinois 60604
Tel: (312) 332-0267
E-mail: joel@jasbklaw.com
About Dependable Building Services
Founded in 1992, Dependable Building Services, Inc. --
http://www.dependablebuildingservices.com/-- is a commercial
contractor that performs HVAC, electrical, fire suppression, and
generator service and construction. It serves commercial, retail,
industrial and telecom industries.
Dependable Building Services previously filed a Chapter 11 petition
(Bankr. N.D. Ill. Case No. 17-24129) on Aug. 11, 2017.
Dependable Building Services again sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 19-19772) on
July 15, 2019. At the time of the filing, the Debtor was estimated
to have assets of between $100,000 and $500,000 and liabilities of
between $1 million and $10 million. The case is assigned to Judge
Deborah L. Thorne. The Law Offices of Joel A. Schechter is the
Debtor's counsel.
EBONY MEDIA: Creditors Seek to Force Magazine Bankruptcy
--------------------------------------------------------
Law360 reports that Ebony magazine creditors have urged a Texas
federal bankruptcy court to force the historic magazine covering
Black culture, news and entertainment into Chapter 7 bankruptcy, a
rare move the creditors claim is necessary because Ebony hasn't
been paying its debts.
In a pair of involuntary bankruptcy petitions filed July 2020
creditors Parkview Capital Credit Inc., photo studio Plum Studio
and law firm David M. Abner & Associates said Houston-based Ebony
Media Holdings LLC "is generally not paying its debts as they
become due, unless they are the subject of a bona fide dispute as
to liability or amount.
Ebony Media Holdings LLC is the publisher of Ebony magazine.
Alleged creditors filed an involuntary Chapter 7 petition against
Ebony Media Operations, LLC, and Ebony Media Holdings LLC (Bankr.
S.D. Tex. Case No. 20-33665 and 20-33667) on July 23, 2020.
EVEREST REAL: Seeks to Hire Gerger Law Firm as Legal Counsel
------------------------------------------------------------
Everest Real Estate Investments, LLP seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire The
Gerger Law Firm, PLLC as its legal counsel.
The firm will provide the following services in connection with
Debtor's Chapter 11 case:
(a) advise Debtor with respect to its powers and duties in the
continued operation of its businesses and management;
(b) take all necessary action to protect and preserve the
bankruptcy estate;
(c) prepare all necessary legal papers in connection with the
administration of the estate;
(d) assist in preparing and filing a disclosure statement and
plan of reorganization; and
(e) perform other legal services necessary or otherwise
requested by Debtor.
The firm will be paid at $400 per hour for Alan Gerger, Esq., the
attorney who is in charge to handle the case; $200 to $250 per hour
for law clerks and associate attorneys; and $105 per hour for
paraprofessionals.
The retainer fee for the firm's services is $10,000.
Gerger Law Firm is a "disinterested person" as the term is defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Alan Gerger, Esq.
The Gerger Law Firm, PLLC
2211 Norfolk St., Suite 517
Houston, TX 77098
Telephone: (713) 300-1430
Facsimile: (888) 317-0281
Email: asgerger@gerglaw.com
About Everest Real Estate Investments
Everest Real Estate Investments, LLP is a health care services
provider established in Humble, Texas specializing in general acute
care hospital. It offers completely comprehensive medical care,
treating both major and minor injuries. For more information, visit
www.setexaser.com.
Everest Real Estate Investments sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-34077) on Aug.
14, 2020. Thomas Vo, M.D., majority owner of Debtor's managing
partner, signed the petition. At the time of the filing, Debtor
had estimated assets of between $10 million and $50 million and
liabilities of the same range.
Judge Christopher M. Lopez oversees the case.
The Gerger Law Firm PLLC is Debtor's legal counsel.
FAIRWAY MARKETS: Closes Plainview Store
---------------------------------------
Tory N. Parrish, writing for News Day, reports that one of the two
Fairway Markets on Long Island, New York, has closed after nearly
20 years in Plainview, affecting 95 workers.
Manhattan-based Fairway Group Holdings Corp. operated 14
supermarkets in New York, New Jersey and Connecticut when it filed
for Chapter 11 bankruptcy protection in January.
At that time, the company said it planned to sell up to five of its
New York City stores and find buyers for the rest.
But no buyer could be found for the two Long Island stores -- in
Plainview and Westbury -- or a store in Harlem, according to a
Worker Adjustment and Retraining Notification Act filing, or WARN,
submitted to the New York State Department of Labor.
Under the WARN Act, certain employers must notify workers and the
state in advance of mass layoffs or work site closings.
Fairway submitted its WARN on Jan. 24 but has amended it several
times since then, most recently Friday.
The Plainview store, which closed July 15, was in leased space at
50 Manetto Hill Rd. in Manetto Hill Plaza.
The store opened in 2001 and occupied 55,162 square feet, making it
the largest tenant in Manetto Hill Plaza before it closed,
according to Kimco Realty Corp., the New Hyde Park-based owner of
the shopping center.
The store closing affected 95 employees, according to Fairway’s
WARN filing.
Most of the workers in Fairway's Plainview and Westbury stores are
members of United Food and Commercial Workers International Union
Local 1500 in Westbury, said Rob Newell, president of the union.
The Fairway in Westbury, at 1258 Corporate Dr., is slated to close
between July 31 and Aug. 14, and 126 employees will be affected,
according to the WARN.
But there is a good chance that store will be purchased, Newell
said.
“From the perspective of the union, we’re doing everything we
can every day to find a buyer for that store. And I can say there
is at least one suitor that has a possibility of acquiring it,”
he said.
Fairway Market’s Westbury store opened in Raceway Plaza in 2012
and occupies about 60,000 square feet of leased space. The Mattone
Group is the Queens-based co-owner and manager of the shopping
center.
The Westbury location "continues to operate and be profitable,
based on the debtor's recent monthly operating reports," said
Mattone's attorney, Phillip Khezri, of Lowenstein Sandler LLP, a
law firm based in Roseland, New Jersey.
In March, Fairway announced that an auction resulted in winning
bids from Village Supermarket Inc. for four Manhattan stores and a
production and distribution center for about $76 million, Seven
Seas Georgetowne LLC for a Brooklyn store for about $5 million and
Amazon Retail LLC for the sales of two leases in New Jersey for
$1.5 million.
Sales are now pending for nine Fairway stores in New York,
according to the WARN.
About Fairway Group
Fairway Group -- https://www.fairwaymarket.com/ -- is a food
retailer operating 14 supermarkets across the New York, New Jersey
and Connecticut tri-state area, including two with freestanding
wine and liquor stores (the Stamford and Pelham locations) and two
with in-store wine and liquor stores (the Woodland Park and Paramus
locations). The company's flagship store is located at Broadway
and West 74th Street, on the Upper West Side of Manhattan,
featuring a cafe, Sur la Route, and state of the art cooking
school. Fairway's stores emphasize an extensive selection of
fresh, natural, and organic products, prepared foods, and
hard-to-find specialty and gourmet offerings, along with a full
assortment of conventional groceries.
Fairway Group Holdings Corp. and 25 affiliated companies sought
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-10161) on
Jan. 23, 2020.
In the petitions signed by CEO Abel Porter, the Debtors were
estimated to have $100 million to $500 million in assets and
liabilities.
Judge James L. Garrity, Jr., is assigned to the cases.
The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel;
Peter J. Solomon and Mackinac Partners, LLC as financial advisor;
and Omni Agent Solutions as claims, noticing and solicitation
agent.
FAVALORA PROPERTIES: $345K Sale of Kenner Property to Johnsons OK'd
-------------------------------------------------------------------
Judge Jerry A. Brown of the U.S. Bankruptcy Court for the Eastern
District of Louisiana authorized Favalora Properties, LLC's private
sale of a tract of real (immovable) property commonly described as
Lot 11B, Airport Industrial Park, Jefferson Parish, City of Kenner,
State of Louisiana, and bearing municipal address 921 Industry
Road, Kenner, Louisiana, to Paulette and Dan Johnson for $345,000.
The sale is free and clear of all liens, claims, mortgages,
privileges, encumbrances and interests.
The Purchase Agreement and consummation of the transactions
contemplated thereunder are approved.
Payment of the sales proceeds derived from the Kenner Property to
the holders of valid mortgages and/or liens encumbering the Kenner
Property will be made to such mortgage/lien holders in accordance
with the following provisions, to-wit:
1. At the sale closing IMC will be paid the sum of $265,388
from the sale proceeds of the Kenner Property, which sum will be
first applied to principal and then to accrue interest on the
Allowed Secured Claim of IMC;
2. After payment of the sum of $265,388 to IMC, including the
realtor's commission of David Quinn, the Debtor's share of the
closing costs, and the Debtor's share of the property taxes due on
the Kenner Property, the balance of the sale proceeds will be
deposited into either counsel for the Debtor's trust account or
counsel for IMC's trust account, subject to the mortgage of IMC and
any other prepetition lien or encumbrance on the Kenner Property,
which mortgage, lien or encumbrance will attach to the sale
proceeds maintained in such trust account in the same rank and
order as it existed against the Kenner Property immediately prior
to the filing of the Debtor's voluntary Petition in the within
Chapter 11 proceeding;
3. If the Debtor and IMC reach an agreement as to the amount
of attorney's fees, costs and interest due on the Allowed Secured
Claim of IMC, that agreed upon amount will be paid from the sale
proceeds held in trust in preference and priority to any other lien
or encumbrance; however, if the Debtor and IMC are unable to reach
such an agreement, the Court will determine such amounts on motion
filed by either the Debtor or IMC; and
4. As to any holder of a valid mortgage or lien on the Kenner
Property, other than the mortgage held by IMC, such mortgage or
lien will be paid from the sale proceeds after the payments to IMC
have been made, and only after such valid mortgage or lien holder
provides to the Debtor, in writing, a sale date payoff balance for
the mortgage obligation/indebtedness of the Debtor secured thereby
within 15 days of the entry of this Order provided, however, that
if the Debtor notifies such mortgage or lien holder within five
days of the receipt of such payoff that a dispute exists with
respect to its claim or the amount thereof, payment of the sale
proceeds to such notified mortgage or lien holder will be withheld
pending an agreement by and between the Debtor and such notified
mortgage or lien holder or further order of the Court.
Upon closing of the sale of the Kenner Property, the Clerk of Court
and Ex-Officio Recorder of Mortgages for the Parish of Jefferson,
State of Louisiana, is directed and ordered to cancel and erase the
inscriptions of all liens, mortgages, privileges and encumbrances
affecting or which appear of record on the Kenner Property from its
office and/or from the Jefferson Parish mortgage records.
About Favalora Properties
Favalora Properties, LLC, owns and operates the real (immovable)
property bearing municipal address 921 Industry Road, Kenner, LA
70062, which it leases to Favalora Constructors, Inc., a company
which is also owned and operated by Laurence Favalora.
Favalora Properties sought Chapter 11 protection (Bankr. E.D. La.
Case No. 19-10953) on April 9, 2019. Darryl T. Landwehr, Esq., at
LANDWEHR LAW FIRM, is the Debtor's counsel.
On December 20, 2019, the Court approved the Debtor's Disclosure
Statement and confirmed the Debtor's First Modified Plan of
Reorganization.
FORD STEEL: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Ford Steel, LLC
24800 Ford Road
Porter, TX 77365
Business Description: Ford Steel, LLC --
http://www.fordsteelllc.com-- is in the
business of steel product manufacturing from
purchased steel. Ford Steel fabricates for
a wide variety of industries including the
petrochemical industry, waste water
treatment, transmission communication and
broadcast towers, mining, as well as oil and
gas industries.
Chapter 11 Petition Date: September 1, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 20-34405
Judge: Hon. Eduardo V. Rodriguez
Debtor's Counsel: Julie M. Koenig, Esq.
COOPER & SCULLY, P.C.
815 Walker St., Suite 1040
Houston, TX 77002
Tel: (713) 236-6800
Email: julie.koenig@cooperscully.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Herbert C. Jeffries, managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/DIKI2CA/Ford_Steel_LLC__txsbke-20-34405__0001.0.pdf?mcid=tGE4TAMA
GAINESVILLE ROAD: Chapter 11 Trustee Taps Trenam as Legal Counsel
-----------------------------------------------------------------
Steven Oscher, Chapter 11 trustee for the bankruptcy estate of
Gainesville Road Community Trust, received approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ
Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A. as his
legal counsel.
The trustee has selected the firm and its attorney, Lara Roeske
Fernandez, Esq., because of their experience as bankruptcy counsel
and in matters related to the administration of Chapter 11
estates.
The primary attorney and paralegal within Trenam who will represent
the trustee and their hourly rates are as follows:
Lara Roeske Fernandez, attorney $435
Tanya A. Yatsco, paralegal $210
Lara Roeske Fernandez, Esq., a shareholder of Trenam Kemker,
disclosed in court filings that she and the firm are "disinterested
persons" as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Lara Roeske Fernandez, Esq.
Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A.
101 E. Kennedy Blvd., Suite 2700
Tampa, FL 33602
Telephone: (813) 223-7474
Email: lfernandez@trenam.com
About Gainesville Road Community Trust
Gainesville Road Community Trust sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-03888) on May
19, 2020. At the time of the filing, Debtor was estimated to have
assets of between $1 million and $10 million and liabilities of the
same range. Judge Catherine Peek McEwen oversees the case. Dion R.
Hancock, P.A. is Debtor's legal counsel.
Steven S. Oscher was appointed as Chapter 11 trustee for Debtor's
bankruptcy estate on Aug. 19, 2020. The trustee has tapped Trenam,
Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A. as his legal
counsel and Oscher Consulting, P.A. as his accountant.
GAINESVILLE ROAD: Trustee Hires Oscher Consulting as Accountant
---------------------------------------------------------------
Steven Oscher, Chapter 11 trustee for the bankruptcy estate of
Gainesville Road Community Trust, received approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ
Oscher Consulting, P.A. as his accountant.
The trustee has selected Oscher Consulting because its partners and
associates are well-qualified to provide accounting services.
The firm's hourly rates are as follows:
Marie Edmonson, Senior Consultant $340
Carrie Macsuga, Consultant $250
Janica Cashwell, Paraprofessional $125
Dawne Jones, Paraprofessional $140
Tara Puigdomenech, Paraprofessional $140
Steven Oscher, a certified public accountant with Oscher
Consulting, disclosed in court filings that the firm is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Steven S. Oscher
Oscher Consulting, P.A.
201 North Franklin Street, Suite 3150
Tampa, FL 33602
Telephone: (813) 229-8250
Facsimile: (813) 229-8674
Email: soscher@oscherconsulting.com
About Gainesville Road Community Trust
Gainesville Road Community Trust sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-03888) on May
19, 2020. At the time of the filing, Debtor was estimated to have
assets of between $1 million and $10 million and liabilities of the
same range. Judge Catherine Peek McEwen oversees the case. Dion R.
Hancock, P.A. is Debtor's legal counsel.
Steven S. Oscher was appointed as Chapter 11 trustee for Debtor's
bankruptcy estate on Aug. 19, 2020. The trustee has tapped Trenam,
Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A. as his legal
counsel and Oscher Consulting, P.A. as his accountant.
GEORGE WASHINGTON: Gets OK to Expand Scope of Houlihan's Services
-----------------------------------------------------------------
George Washington Bridge Bus Station Development Venture LLC
received approval from the U.S. Bankruptcy Court for the Southern
District of New York to expand the scope of services of its
financial advisor and investment banker, Houlihan Lokey Capital,
Inc.
Houlihan Lokey will provide additional services to Debtor, which is
currently pursuing additional debtor-in-possession financing.
These services include:
(a) assisting Debtor in the development and distribution of
selected information, documents and other materials;
(b) conducting due diligence on Debtor's operations, assets,
legal entities and capital structure;
(c) contacting potential investors or acquirers;
(d) establishing and operating an online data room;
(e) coordinating site visits and management presentations;
(f) assisting Debtor in evaluating indications of interest and
proposals regarding any transactions;
(g) assisting Debtor with the negotiation of any
transactions;
(h) providing expert advice and testimony regarding financial
matters related to any transactions;
(i) attending meetings of Debtor's board of directors,
creditor groups, official constituencies and other interested
parties;
(j) other financial advisory and investment banking services
as may be mutually agreed upon by the firm and Debtor.
Houlihan Lokey will be compensated as follows:
i. An initial non-refundable cash fee of $50,000.
ii. A non-refundable cash fee of $50,000, payable upon the
consummation of a transaction.
iii. Transaction fees to be paid to Houlihan Lokey as
follows:
a. Sale Transaction Fee. Upon the closing of each sale
transaction, the firm shall earn a cash fee equal to the greater of
2.5 percent of the "aggregate gross consideration" and $1 million.
b. Restructuring Transaction Fee. Upon the earlier to
occur of: (I) in the case of an out-of-court restructuring
transaction, the effectiveness of all necessary waivers, consents,
amendments or restructuring agreements between any entity
comprising Debtor and its creditors or the closing of such
restructuring transaction; and (II) in the case of an in-court
restructuring transaction, the date that the requisite consents to
a "pre-packaged" plan of reorganization under Chapter 11 are
obtained or the date of confirmation of a plan of reorganization or
liquidation under Chapter 11 or Chapter 7 pursuant to an order of
the applicable bankruptcy court or the effective date of a
confirmed plan of reorganization or liquidation under Chapter 11 or
Chapter 7, Houlihan Lokey shall earn a cash fee of $1.45 million.
c. Financing Transaction Fee. Upon the closing of a
financing transaction, the firm shall earn a cash fee equal to
$200,000.
iv. Reimbursement for out-of-pocket expenses incurred.
Reid Snellenbarger, a managing director at Houlihan Lokey,
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:
Reid Snellenbarger
Houlihan Lokey Capital, Inc.
111 South Wacker Dr., 37th Fl.
Chicago, IL 60606
Telephone: (312) 456-4700
Facsimile: (312) 346-0951
About George Washington Bridge
Bus Station Development Venture LLC
George Washington Bridge Bus Station Development Venture LLC is the
entity contracted to renovate the George Washington Bridge Bus
Station in New York. The bus station was reopened in 2016 following
a delayed and costly renovation. As part of the deal, the company
was granted a 99-year lease to operate and maintain the retail
portion of the bus station.
George Washington Bridge Bus Station Development Venture LLC sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 19-13196) on Oct.
7, 2019. The Debtor's assets are estimated between $50 million and
$100 million, and liabilities between $100 million and $500
million, according to bankruptcy documents.
Judge Shelley C. Chapman oversees the case.
Debtor has tapped Cole Schotz P.C. as its legal counsel, and BAK
Advisors Inc. as its financial advisor. BAK's Bernard A. Katz is
Debtor's sole manager.
GLOBAL EAGLE: Court Approves $30M Ch. 11 Loan
---------------------------------------------
Rose Krebs of Law360 reports that a Delaware judge gave Global
Eagle Entertainment Inc. the go-ahead to access $30 million of its
Chapter 11 post-petition financing package as the company seeks a
buyer after being pushed into bankruptcy by the impact of the
COVID-19 pandemic.
During a hearing held virtually, U.S. Bankruptcy Judge John T.
Dorsey gave his nod to interim debtor-in-possession financing for
the California-based, on-the-road entertainment business, clearing
the way for it to immediately access $30 million of an $80 million
DIP facility administered by Citibank NA. Approval of the remaining
DIP funds will be considered at a future hearing.
"The DIP financing is really critical" and will send a message to
customers, vendors, employees and others that the Chapter 11 "is on
the right track," Global Eagle attorney Ted A. Dillman of Latham &
Watkins LLP told the judge.
Global Eagle and multiple affiliates hit Chapter 11, pointing to
the COVID-19 pandemic's flattening of the world's travel industry
as one of the reasons for its trip into bankruptcy. The company
provides direct entertainment services to the airline, cruise and
travel industries, as well as internet services across the same
sectors.
Dillman said the pandemic's impact on the travel industry caused a
substantial decline in Global Eagle's revenue.
In an initial Chapter 11 petition, the debtors reported $630.5
million in assets against $1.086 billion in liabilities. Included
in its debt is first-lien debt administered by Citibank that
includes a senior secured term loan with a $503 million balance,
maturing in January 2023, and an $81 million balance in a senior
secured revolving credit agreement that matures in January 2022.
Also, the debtors owe roughly $189 million of junior secured debt
administered by Cortland Capital Market Services LLC and unsecured
debt that includes $82.5 million in convertible notes administered
by U.S. Bank NA and roughly $24 million in trade debt.
Global Eagle entered Chapter 11 with a restructuring support
agreement in place with the majority first-lien lenders to slash
$475 million from its debt, according to a company statement. Also
in hand is a stalking horse bid from a group of first-lien lenders
to use debt owed to purchase Global Eagle's assets, according to
court filings. The offer is valued at $675 million, the company
said.
In addition to DIP financing, the participating first-lien lenders
are set to fund a $125 million "new money" credit agreement for the
reorganized company if they are deemed the successful bidder,
filings said.
The stalking horse bid group is led by lenders managed by Apollo
Global Management, Eaton Vance Management, Arbour Lane Capital
Management, Sound Point Capital Management, Mudrick Capital
Management and BlackRock Financial Management, the company said.
About Global Eagle Entertainment
Headquartered in Los Angeles, California, Global Eagle --
http://www.GlobalEagle.com/-- is a provider of media, content,
connectivity and data analytics to markets across air, sea and
land. Global Eagle offers a fully integrated suite of media
content and connectivity solutions to airlines, cruise lines,
commercial ships, high-end yachts, ferries and land locations
worldwide.
Global Eagle Entertainment Inc., based in Los Angeles, CA, and its
debtor-affiliates sought Chapter 11 protection (Bankr. D. Del. Lead
Case No. 20-11835) on July 22, 2020. The Hon. John T. Dorsey
presides over the case.
In the petition signed by CFO Christian M. Mezger, Global Eagle
disclosed $630.5 million in assets and $1.086 billion in
liabilities.
Global Eagle tapped LATHAM & WATKINS LLP (CA), and YOUNG CONAWAY
STARGATT & TAYLOR, LLP, as counsel; GREENHILL & CO., LLC, as
investment banker; and ALVAREZ & MARSAL NORTH AMERICA, LLC, as
financial advisor. PRIME CLERK LLC, is the claims and noticing
agent. PRICEWATERHOUSECOOPERS LLP is the tax advisor.
GNC HOLDINGS: Sept. 15 Auction of Substantially All Assets Set
--------------------------------------------------------------
Judge Karen B. Owens of the U.S. Bankruptcy Court for the District
of Delaware authorized the bidding procedures proposed by GNC
Holdings, Inc. and its debtor-affiliates in connection with the
sale of substantially all their assets to Harbin Pharmaceutical
Group Holding Co., Ltd. or its designee for $760 million, subject
to overbid.
The Debtors are authorized to enter into and perform under the
Stalking Horse Agreement, subject to the solicitation of higher or
otherwise better offers for the Assets and entry of the Sale Order.
The Stalking Horse Agreement is authorized and approved.
The Bid Protections, as set forth in the Stalking Horse Agreement,
are approved in their entirety.
Paragraph 11 of the Bidding Procedures Order is modified, as
follows: "On Aug. 37, 2020, subject to receiving the requisite
approvals from the Required Sale Consenting Parties (as such term
is defined in the Restructuring Support Agreement), the Debtors are
authorized, but not directed, to select one or more Bidders to act
as Stalking Horse Bidder(s), and are authorized, but not directed,
to enter into a Stalking Horse Agreement (which will be binding,
non-contingent, and accompanied by a Good Faith Deposit (as defined
in the Bidding Procedures)) with each such Stalking Horse Bidder."
The modified Bidding Procedures (Exhibit 1), are approved,
reflecting the changes set forth in Exhibit 2.
For the avoidance of doubt, because the Debtors did not file a
Stalking Horse Selection Notice within one business day after Aug.
3, 2020, the dates in the Bidding Procedures Order were extended
pursuant to paragraph 10 of the Bidding Procedures Order.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Sept. 11, 2020 at 4:00 p.m. (PET)
b. Initial Bid: The value of each Bid for all or substantially
all of the Debtors' Assets must exceed (a) the Minimum Purchase
Price, plus (b) the amount of the Bid Protections payable to any
Stalking Horse Bidder, if applicable, plus (c) the minimum Bid
increment of $2.5 million (or such other amount as the Debtors may
determine in consultation with the Consultation Parties, which
amount may be less than $2.5 million, including with respect to a
Bid for less than all Assets).
c. Deposit: 7.5% of the aggregate value of the cash and
non-cash consideration of the Bid
d. Auction: If more than one Qualified Bid is received by the
Bid Deadline, the Debtors will conduct the Auction with respect to
the Debtors' Assets. For the avoidance of doubt, the Debtors may
also conduct more than one Auction with respect to non-overlapping
material portions of their Assets. The Auction will commence on
Sept. 15, 2020, at 10:00 a.m. (ET) at the offices of Latham &
Watkins LLP, 330 North Wabash Avenue, Suite 2800, Chicago, Illinois
60611, telephonically, or by video via Zoom, or such later time or
other place as the Debtors will timely notify all other Qualified
Bidders, in consultation with the Consultation Parties.
e. Bid Increments: $2.5 million (or such other amount as the
Debtors may determine in consultation with the Consultation
Parties, which amount may be higher or lower than $2.5 million) of
additional value, if applicable
f. Sale Hearing: Sept. 17, 2020 at 1:00 p.m. (PET)
g. Sale Objection Deadline: Sep. 16, 2020 at 4:00 p.m. (PET)
h. Closing: Sept. 21, 2020
i. Credit Bid: At the Auction, a Secured Creditor will have
the right to credit bid all or a portion of such Secured Creditor's
allowed claims.
j. Bid Protection: The Stalking Horse Bid provides for payment
of a break-up fee equal to $22.8 million (i.e., 3% of the Purchase
Price) and an expense reimbursement not exceeding $3 million.
Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions
of the Order are immediately effective and enforceable upon its
entry.
A copy of the Agreement and the Bidding Procedures is available at
https://tinyurl.com/yydtmt4e from PacerMonitor.com free of charge.
About GNC Holdings
GNC Holdings Inc. 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. Visit
www.gnc.com for more information.
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. 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.
HAGUE TEXTILES: Seeks to Hire Frank Jacinto as Accountant
---------------------------------------------------------
Hague Textiles, Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Massachusetts to employ Frank Jacinto CPA &
Associates as its accountant.
Debtor requires the services of an accountant to prepare and file
tax returns. It has agreed to compensate the firm at its usual
hourly rates in effect at the time the services are rendered.
Frank Jacinto is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Frank Jacinto, CPA
Frank Jacinto CPA & Associates
15 Martin Street, Ste. 2A
Cumberland, RI 02864
Telephone: (401) 333-2200
Facsimile: (888) 494-7090
Email: fj@frankjcpa.com
About Hague Textiles
Hague Textiles, Inc. is a small, family-owned manufacturer,
focusing on leather and leather goods such as belts, bags, and
carrying case. The company sells products to retail and wholesale
customers, and is developing a business with corporate gifts.
Hague Textiles sought Chapter 11 protection (Bankr. D. Mass. Case
No. 19-13323) on Sept. 30, 2019, listing under $1 million in both
assets and liabilities. Judge Christopher J. Panos oversees the
case. Debtor has tapped Madoff & Khoury LLP as its legal counsel
and Frank Jacinto CPA & Associates as its accountant.
HAPPY BEAVERS: Taps Jorgensen Brownell as Legal Counsel
-------------------------------------------------------
Happy Beavers, LLC received approval from the U.S. Bankruptcy Court
for the District of Colorado to hire Jorgensen, Brownell & Pepin,
P.C. as its legal counsel.
The firm will provide the following services:
a) advise Debtor regarding the administration of its Chapter
11 case;
b) represent Debtor before the bankruptcy court and advise
Debtor on all pending litigations, hearings, motions and court
decisions;
c) review and analyze all legal papers filed with the
bankruptcy court by third parties;
d) attend meetings conducted and represent Debtor at
examinations;
e) communicate with creditors and other parties;
f) prepare court documents;
g) confer with all other bankruptcy professionals;
h) assist Debtor in its negotiations with creditors or third
parties concerning the terms of any proposed plan of
reorganization; and
i) prepare and prosecute a plan of reorganization and
disclosure statement.
j) provide other legal services in connection with Debtor's
case.
The firm's services will be provided mainly by Gerald Jorgensen,
Esq., who will be paid at the rate of $400 per hour.
Mr. Jorgsenen, founding shareholder and attorney at Jorgensen
Brownell, disclosed in court filings that the firm is a
"disinterested person" as such term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Gerald L. Jorgensen, Esq.
Jorgensen, Brownell & Pepin P.C.
5285 McWhinney Blvd., Suite 100
Loveland, CO 80538
Telephone: (970) 304-0075
Facsimile: (970) 351-8421
Email: gerald@jbplegal.com
About Happy Beavers
Happy Beavers, LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No.
20-14853) on July 17, 2020. At the time of the filing, Debtor
disclosed assets of between $1 million and $10 million and
liabilities of the same range.
Judge Joseph G. Rosania Jr. oversees the case.
Debtor has tapped Jorgensen, Brownell & Pepin P.C. as its legal
counsel, Nickie Stobbe of Profit Accounting Plus as bookkeeper, and
Brian Jacobson of Haynie & Company as accountant.
HOTEL OXYGEN: $2.3M Sale of Wyndham Property to Le Garden Approved
------------------------------------------------------------------
Judge Paul Sala of the U.S. Bankruptcy Court for the District of
Arizona authorized Hotel Oxygen Midtown I, LLC and A Great Hotel
Co. Arizona, LLC to sell the property commonly known as the
"Wyndham Garden Phoenix Midtown" located at 3600 North 2nd Avenue,
Phoenix, Arizona and related assets, to Le Garden HB, LLC for $2.3
million.
The Sale Hearings were held on July 16, 2020 at 11:30 a.m. and July
28, 2020 at 1:30 p.m.
The Real Property and Related Assets are sold "as is," with no
representations or warranties of any kind, free and clear of all
liens, claims, and interests, with any liens, claims and interests
to attach to the sale proceeds. Notwithstanding the foregoing, the
2020 real property tax liens of Maricopa County will remain
attached to the Real Property and Related Assets until the 2020
real and personal property taxes are paid in full.
The close of escrow will occur on Aug. 31, 2020, or sooner as may
be agreed upon between the Debtors and Le Garden, or may be
extended as necessary and reasonable upon mutual consent between
the Debtors and Le Garden. Any Escrow Deposit is non-refundable.
If the Purchaser fails to close the sale, the Escrow Deposit will
be paid immediately to the Debtors.
As a condition of, and simultaneously with, the closing of the
sale, the Title Company will disburse directly from escrow the
closing costs and commissions, without further order of this Court.
The Title company is further directed to immediately pay the
following creditors directly out of escrow:
a. Maricopa County Treasurer: The following real and personal
property taxes on parcels 118-30-044B and 990-67-118 will be paid
in full and/or prorated through Closing (these amounts are
estimated to be):
i. The current amount due for the 2019 real property tax
on parcel 118-30-044B is $216,853, which amount is good through the
end of July 2020. Additional statutory interest will accrue on the
1st of each subsequent month until the taxes and interest are paid
in full. The estimated 2020 real property tax is $200,791 based on
the 2019 assessment; however, MCT anticipates the 2020 real
property tax will be higher because the value of the real property
has increased.
ii. The current amount due for the 2019 personal property
tax on parcel 990-67-118 is $10,023. Additional statutory interest
will accrue on the 1st of each subsequent month until the taxes and
interest are paid in full. MCT has been informed by the Maricopa
County Assessor that the personal property account was removed from
the tax roll for the 2020 tax year and there should be no 2020
personal property tax due on 990-67-118.
b. ADOR: Administrative and priority claims prorated through
Closing. These amounts are estimated to be $286,015.
c. O2 Capital, LLC in the amount of $138,854 plus interest of
$44 per day from and after July 16, 2020.
d. Talisker Second Osborn, LLC cure payment in an amount to be
set forth by separate order. In addition, the Le Garden will
deliver $200,000 to Talisker to be held as a security deposit of
the Le Garden's obligations under the Ground Lease.
e. Wyndham cure payment in an amount to be set forth by
separate order.
f. United States Trustee in the amount of $4,875.
All remaining amounts will be distributed to the counsel for the
Debtors, to be held in trust, pending further order(s) of the
Court.
In light of the resolutions of the objections to the sale as
outlined and the Debtors' need to close on the sale before the
termination of its time period to assume the Ground Lease, the
14-day stay set forth in Fed. R. Bankr. P. 6004(h) is waived and
the Order is immediately effective upon entry.
Any issues and objections with respect to the separately filed
motions for the assumption and assignment of the Ground Lease with
Talisker or the Franchise Agreement with Wyndham, will be the
subject of a separate order of the Court and neither will be
considered assumed and assigned sold or otherwise transferred to
the Purchaser pursuant to the Order.
About Hotel Oxygen Midtown I
Hotel Oxygen Midtown, I, LLC, and Hotel Oxygen Palm Springs, LLC,
are affiliate companies which operate hotels in Phoenix, Ariz. The
companies are wholly owned subsidiaries of Oxygen Hospitality
Group, Inc., an owner-operator hospitality company that acquires,
renovates and manages a portfolio of mid-to upper scale branded
and
independent hotel assets in the U.S. Founded in 2017, Oxygen
Hospitality is privately held and is headquartered in Phoenix,
Ariz.
Hotel Oxygen Midtown, I and its affiliates, Hotel Oxygen Palm
Springs, A Great Hotel Company, Arizona LLC, and A Great Hotel
Company, LLC, filed Chapter 11 petitions (Bankr. D.Ariz. Lead Case
No. 19-14399) on Nov. 12, 2019. In the petitions signed by David
Valade, chief financial officer, Hotel Oxygen Midtown was
estimated
to have assets of $1 million to $10 million and liabilities of
$100,000 to $500,000. Judge Paul Sala oversees the cases.
Guidant
Law, PLC, is the Debtors' legal counsel.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors. The committee is represented by Dickinson Wright PLLC.
HUDSON TECHNOLOGIES: Appoints Stephen Mandracchia to Board
----------------------------------------------------------
Hudson Technologies, Inc., has appointed Stephen P. Mandracchia to
its Board of Directors. Mr. Mandracchia fills the Board vacancy
resulting from the passing of Kevin J. Zugibe in June 2020.
Mr. Mandracchia, who beneficially owns approximately 3.5% of the
Company, is a founder of Hudson Technologies and previously served
the Company as vice president Legal and Regulatory from August 2003
until May 2019 and as Secretary from 1995 until May 2019. Mr.
Mandracchia has worked in a variety of capacities with the Company
since 1993 and from May 2019 through August 2020, was a consultant
to Hudson. He was a member of the law firm of Martin, Vandewalle,
Donohue, Mandracchia & McGahan until 1995, having been associated
with the firm since 1983. Mr. Mandracchia graduated Magna Cum
Laude from Manhattan College, where he earned a BS degree in
Biology, and received his JD from St. John's School of Law. He is
a member of the New York State Bar, and is admitted to practice in
the U.S. District Court for the Southern and Eastern Districts of
New York and in the 2nd Circuit U.S. Court of Appeals. Mr.
Mandracchia is the brother-in-law of Kevin Zugibe, former chariman
& chief executive officer of Hudson Technologies.
Brian F. Coleman, chairman of the Board, president and chief
executive officer of Hudson Technologies commented, "We are pleased
to announce Steve's addition to the Board. As a Company founder,
whose distinguished career includes 25 years in senior management
at Hudson, Steve is uniquely suited to provide valuable counsel and
expertise as we work to drive continued growth. We are confident
that his knowledge, perspective and experience relative to our
industry and our Company, will result in significant contributions
to the Board and to the continued evolution of Hudson's business."
From May 6, 2019 through Dec. 31, 2019, Mr. Mandracchia received a
monthly consulting fee of $10,000 and such fee was increased to
$12,000 per month effective Feb. 1, 2020 through Aug. 31, 2020.
During the period Jan. 1, 2019 through May 3, 2019, Mr. Mandracchia
was paid base salary of $94,656 and was issued a stock option to
purchase 25,000 shares of Company common stock at an exercise price
of $1.70 per share.
About Hudson Technologies
Headquartered in Pearl River, New York, Hudson Technologies, Inc.
-- http://www.hudsontech.com/-- is a refrigerant services company
providing innovative solutions to recurring problems within the
refrigeration industry. The Company's products and services are
primarily used in commercial air conditioning, industrial
processing and refrigeration systems, and include refrigerant and
industrial gas sales, refrigerant management services consisting
primarily of reclamation of refrigerants and RefrigerantSide
Services performed at a customer's site, consisting of system
decontamination to remove moisture, oils and other contaminants.
Hudson Technologies reported a net loss of $25.94 million for the
year ended Dec. 31, 2019, compared to a net loss of $55.66 million
for the year ended Dec. 31, 2018. As of June 30, 2020, the Company
had $187.23 million in total assets, $142.29 million in total
liabilities, and $44.94 million in ttoal stockholders' equity.
HYTERA COMMUNICATIONS: UST Seeks Case Dismissal to Block Sale
-------------------------------------------------------------
Donny Jackson of IWCE's Urgent Communications reports that a United
States Trustee recommended that a federal bankruptcy court in
California dismiss the Chapter 11 filing by U.S. divisions of
Hytera, which would block the proposed "compromised" sale of the
business units to a new subsidiary of Hytera for $9.5 million.
Peter Anderson, the U.S. Trustee for Region 16, submitted the
dismissal position yesterday with the U.S. Bankruptcy Court for the
Central District of California, where Hytera America and Hytera
Communications America (West) filed for Chapter 11 protection on
May 26.
These two U.S. business units of Hytera -- referenced as the
"Debtors" in bankruptcy legal filings -- are scheduled to be sold
for $9.5 million to new subsidiary Hytera US, unless Motorola
Solutions' motion to dismiss or suspend the case is granted.
Anderson, who leads the U.S. Trustee program that is a component of
the U.S. Department of Justice, expressed his support for
dismissing the bankruptcy cases for the existing Hytera U.S.
divisions.
"The motion [for dismissal requested by Motorola Solutions] should
be granted, and these cases should be dismissed," according to
Anderson’s filing, which also notes that "if this court declines
to dismiss this case ... abstention is also warranted."
Sources familiar with the case have told IWCE's Urgent
Communications that no alternative bidders for the Hytera U.S.
divisions have emerged, so the August scheduled auction for the
assets of the Hytera U.S. divisions was not conducted. As a
result, the lone bid for the Hytera U.S. divisions was the $9.5
million offer from the new Hytera US subsidiary of China-based
Hytera Communications.
Attorneys for Motorola Solutions have described the proposed sale
of the U.S. divisions to a new subsidiary of Hytera as a "sham,"
arguing that the bankruptcy process is an effort to avoid paying
the $764.6 million in damages awarded by a federal court for
Hytera's improper use of Motorola trade secrets and copyrighted
software in many DMR products. The same federal court is still
considering a permanent injunction that would prevent Hytera from
selling the problematic DMR offerings worldwide.
Motorola Solutions has asserted that the Hytera U.S. divisions
could attract additional bidders after the federal court rules on
the injunction. Until the injunction situation is clarified,
potential bidders will not make an offer for the Hytera U.S.
divisions, because they would not know whether they could sell the
popular DMR gear, according to Motorola Solutions' legal
documents.
In his filing with the bankruptcy court, U.S. Trustee Anderson
states that the Hytera U.S. divisions' "purpose for filing these
cases appears unclear at best and nefarious at worst. The timing
of the Debtors' filing of these cases indicates they sought to
avoid the filing of a bond to stay enforcement of the judgment
against them."
Anderson indicated his agreement with several key arguments made by
Motorola Solutions to dismiss the Chapter 11 bankruptcy cases filed
by the Hytera business units located in the United States.
“The bankruptcy system was not designed to enable debtors who
have engaged in theft to file bankruptcy and to continue to profit
from that theft and cleanse themselves of their wrongdoing through
an illusory sales process," Anderson states in his filing. "But
that is what the Debtors are attempting here."
Anderson's filing states that the Hytera U.S. divisions filed for
Chapter 11 protection after the federal-court jury found that
Hytera stole Motorola technology, but Hytera has continued to sell
the DMR products using the "misappropriated technology" anyway.
"Just days before these bankruptcy cases were filed, the Debtors'
parent company set up a newly formed corporation to purchase the
Debtors' assets and to hire all of the Debtors' employees who would
continue to work out of the same location -- despite the jury
verdict," according to Anderson.
"The Debtors' goal appears to be to have their parent company
continue operations in the United States without regard to the jury
verdict. The Debtors used the automatic stay not merely to stop
the enforcement of a monetary judgment, but as a safe harbor to
continue to engage in the improper use of Motorola's technology."
Anderson also expressed concern about the relationship between
Hytera Communications -- the China-based parent company of the U.S.
divisions seeking bankruptcy protection -- and key officials that
were responsible for overseeing the bankruptcy sale process.
"Although the Debtors hired an independent director and investment
banker, the Debtors failed to wall off communications between the
Debtors and their parent company, Hytera China, with respect to the
sale process," the Anderson filing states. "Further, the
Debtors’ investment banker agreed that waiting for the scope of
injunctive relief to be determined could generate additional
bidders and higher bids, but it was directed by the Debtors to sell
the company as is.
"Moreover, there are a multitude of issues regarding the conduct of
the Independent Director; the U.S. Trustee will address these
issues in a separate objection to the Debtors' sale motion. Based
on the forgoing, the integrity of the sales process has been
compromised.
About Hytera Communications
Hytera communications America (West), Inc. is a global company in
the two-way radio communications industry. It has 10 international
R&D Innovation Centers and more than 90 regional organizations
around the world. Forty percent of Hytera employees are engaged in
engineering, research, and product design. Hytera has three
manufacturing centers in China and Spain. For more information,
visit https://www.hytera.us
On May 26, 2020, Hytera sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 20-11507). At the
time of the filing, Debtor had estimated assets of between $10
million and $50 million and liabilities of between $500 million and
$1 billion.
Judge Erithe A. Smith oversees the cases.
Debtors tapped Pachulski Stang Ziehl & Jones, LLP as bankruptcy
counsel; Steptoe & Johnson, LLP as corporate and special counsel;
and Imperial Capital, LLC as financial advisor.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on June 15, 2020. The committee is represented by Levene
Neale Bender Yoo & Brill, LLP.
IMPORT SPECIALTIES: $3.3M Cash Sale of All Assets to HLA Approved
-----------------------------------------------------------------
Judge Kathleen H. Sanberg of the U.S. Bankruptcy Court for the
District of Minnesota authorized Import Specialties, Inc.'s sale of
substantially all assets to HLA USA, LLC for $3.305 million, cash,
plus certain assumed liabilities and administrative expenses of up
to $280,000.
On Aug. 7, 2020, beginning at 10:00 a.m. (CT), the Debtor conducted
an Auction. It was held open and interest parties were allowed to
submit a Qualified Bid up to 4:00 p.m. (CT) on Aug. 10, 2020. The
bid submitted by the Buyer was the highest and/or best offer for
the Debtor's Assets. The Sale Hearing was held on Sept. 19, 2020.
The APA and all of the documents and agreements incorporated
therein are approved in all respects.
At Closing, the Buyer will directly pay to Charter Bank by wire
transfer the sum of $2,994,568, in full satisfaction of Charter
Bank's secured claim against the Debtor in the chapter 11 case, and
will also pay the $175,000 "Accomplishment Fee" to SealedBid for a
sale to the Stalking Horse Bidder, which is considered a "Cousineau
Company," from the total purchase price of $3.305 million. The
Remaining cash sale proceeds from the Purchase Price in the amount
of $135,431 will be paid to the Debtor at Closing.
The sale is free and clear of all Claims and Interests of any kind
or nature whatsoever, and all such Claims and Interests that are
secured by liens, security interests and similar encumbrances of
any kind or nature whatsoever, will attach to the Net Proceeds.
Upon Closing, the Debtor's assumption and assignment to Buyer of
the Acquired Contracts, and the Buyer's assumption of the Acquired
Contracts under the terms of the APA, are approved.
Notwithstanding anything to the contrary in the Order, nothing in
the Order will release or discharge the Buyer from any liability or
obligation to the Debtor under the APA with respect to an Acquired
Contract.
The Buyer will be authorized, as of the Closing Date, to operate
under any license, permit, approval, certificate of occupancy,
authorization, operating permit, registration, plan and the like of
any Governmental authority relating to the Acquired Assets, or held
by the Debtor, and to the greatest extent available under
applicable law, all such licenses, permits, approvals, certificates
of occupancy, authorizations, operating permits, registrations,
plans and the like of any governmental authority are deemed to have
been, and are, deemed to be transferred to the Buyer as of the
Closing Date.
The provisions of the Order are non-severable and mutually
dependent and, pursuant to Bankruptcy Rules 6004 and 6006, the
Order will not be stayed for 14 days and will be effective
immediately upon entry.
About Import Specialties
Import Specialties Incorporated, d/b/a Heartland America, is a
privately held company in Chaska, Minnesota that sells products
using television, catalog, internet, and mail-order.
Import Specialties filed a voluntary Chapter 11 bankruptcy
petition
(Bankr. D. Minn. Case No. 19-42563) on Aug. 22, 2019. In the
petition signed by CEO Mark R. Platt, the Debtor was estimated to
have $1 million to $10 million in both assets and liabilities.
The
case has been assigned to Judge Kathleen H. Sanberg. John D.
Lamey,
III, Esq. at Lamey Law Firm, P.A., is the Debtor's counsel.
The U.S. Trustee for Region 12 on Sept. 5, 2019, appointed three
creditors to serve on the official committee of unsecured
creditors
in the Chapter 11 case. The Committee retained Barnes & Thornburg
LLP, as counsel.
ISTAR INC: Fitch Rates $400MM Senior Unsecured Notes Due 2026 'BB'
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to iStar Inc.'s $400
million 5.50% senior unsecured notes maturing in February 2026.
The assignment of the final rating follows the receipt of documents
conforming to information already received. The final rating is the
same as the expected rating assigned to the unsecured notes on Aug.
18, 2020. Fitch does not expect the issuance to have an impact on
iStar's leverage as the company intends to use the proceeds from
the new unsecured notes issuance to repay $400 million of 5.25%
senior unsecured notes due September 2022.
KEY RATING DRIVERS
SENIOR DEBT
Fitch views iStar's ability to continue to access the unsecured
debt markets and extend its debt maturity profile favorably.
The rating on the new senior unsecured notes is equalized with the
ratings assigned to iStar's existing senior unsecured debt, as the
new notes rank equally in the capital structure. The unsecured debt
rating is one notch above iStar's Long-Term Issuer Default Rating
(IDR) and reflects the availability of sufficient unencumbered
assets, which provide support to unsecured creditors, and
relatively low levels of secured debt in the firm's funding
profile. This profile indicates good recovery prospects for
unsecured debtholders under a stressed scenario. In addition, the
company adheres to a 1.2x unencumbered assets/unsecured debt
covenant, which provides protection to bondholders during periods
of market stress.
Existing ratings for iStar reflect its unique platform relative to
other commercial real estate (CRE) finance and investment
companies, improving asset quality, appropriate leverage,
meaningful proportion of unsecured debt funding relative to
similarly rated finance and leasing companies, demonstrated access
to the debt markets and solid liquidity profile.
Rating constraints include iStar's focus on the CRE market, which
exhibits volatility through the credit cycle, and the challenging
economic environment resulting from the coronavirus pandemic, which
Fitch believes could result in weaker asset quality and earnings
over the medium term. Fitch believes that iStar's leverage and
asset quality metrics will remain appropriate for its rating
despite the potential negative headwinds. Other rating constraints
include multiple shifts in the firm's strategy over time; continued
exposure, albeit declining, to land and other legacy noncore
assets, which have negatively affected iStar's earnings; earnings
volatility resulting from a reliance on gain on sale income; and
key person risk associated with CEO Jay Sugarman. Additionally,
iStar's performance will be highly dependent upon continued growth
at Safehold Inc. (SAFE), which has a limited track record, given
slower growth in the traditional net lease and real estate finance
businesses in recent years.
The Positive Rating Outlook for iStar's Long-Term IDR reflects
Fitch's belief that iStar's asset quality and portfolio risk
profile have improved over the past year given the continued
reduction in exposure to legacy assets, including land assets and
nonperforming loans (NPLs). iStar also continued to execute its
revised strategy of growing its ground lease business through its
ownership in SAFE which, combined with the redeployment of proceeds
from legacy asset sales into core real estate finance and net lease
investments, should also improve iStar's earnings metrics over
time. Additionally, iStar has continued to demonstrate access to
the unsecured debt markets over the past year and utilized proceeds
to repay existing debt, thereby extending the firm's debt maturity
profile.
RATING SENSITIVITIES
SENIOR DEBT
The unsecured debt rating is sensitive to changes in iStar's
Long-Term IDR as well as changes in the firm's secured and
unsecured funding mix and collateral coverage. If secured debt were
to meaningfully increase as a proportion of the firm's debt funding
and/or unencumbered asset coverage of unsecured debt were to
decline, it is possible that the upward notching for the unsecured
debt, relative to the IDR, could be eliminated.
Fitch believes that the challenging economic environment from the
coronavirus pandemic limits the likelihood of a ratings upgrade in
the near term.
Factors that could, individually or collectively, lead to positive
rating action/upgrade of the Long-Term IDR over the outlook horizon
include demonstrating solid credit performance in the challenging
environment, continued execution on efforts to further reduce
exposure to legacy assets, resulting in legacy assets representing
less than 15% of total portfolio assets at carrying value, and the
redeployment of proceeds in assets viewed as core under its new
operating strategy, thereby resulting in improved operating
performance and a reduced reliance on gain on sale income. An
upgrade would also be conditioned upon continued growth and solid
performance in the SAFE business, the maintenance of sufficient
liquidity, a sustained decline in Fitch-calculated leverage below
4.0x, and continued management of the company's debt maturity
profile.
Factors that could, individually or collectively, lead to negative
rating action/downgrade of the Long-Term IDR include a material
weakening in asset quality, as demonstrated by a significant
increase in NPLs, weaker rent collections in the net lease
portfolio and/or weaker performance at SAFE, a sustained increase
in Fitch-calculated leverage above 5.0x and/or a significant
reduction in long-term unsecured funding could lead to negative
rating action.
ESG CONSIDERATIONS
The highest level of Environmental, Social and Governance (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).
JAGUAR DISTRIBUTION: Taps Danning Gill as Legal Counsel
-------------------------------------------------------
Jaguar Distribution Corp. seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Danning,
Gill, Israel & Krasnoff, LLP as its bankruptcy counsel.
The firm will render the following services:
(a) advise and assist Debtor with respect to Chapter 11 case
requirements;
(b) represent Debtor at its initial interview;
(c) represent Debtor at the meeting of creditors;
(d) represent Debtor in contested matters, adversary
proceedings, and any other hearings before the court;
(e) if appropriate, assist Debtor in post-petition borrowing;
(f) if appropriate, assist Debtor in preparing motions and
other pleadings concerning the use of cash collateral;
(g) advise Debtor regarding legal issues relating to the sale
of its assets;
(h) review and, if appropriate, pursue avoidable transfers and
other claims that the estate may have against third parties;
(i) analyze and review the validity of claims of creditors
and, if appropriate, object to those claims;
(j) analyze the validity of all administrative expenses and,
if appropriate, object to those expenses;
(k) assist Debtor with the settlement and compromise of claims
by or against the estate, or pertaining to matters relating to the
case;
(l) assist Debtor in the formulation, proposal, confirmation
and implementation of a Chapter 11 plan; and
(m) perform other general legal services relating to Debtor's
administration of the estate.
The hourly rates for the firm's attorneys and paralegals are as
follows:
Richard K. Diamond 695
Eric P. Israel 695
Brad D. Krasnoff 695
George E. Schulman 675
Uzzi O. Raanan 650
John N. Tedford, IV 650
Zev Shechtman 535
Aaron E. de Leest 590
Michael G. D'Alba 535
Sonia Singh 375
Valerie G. Radocay 280
Aracelli Panta 230
Danielle Krasnoff 210
In addition, the firm will be reimbursed for its actual,
out-of-pocket expenses.
Danning Gill received a retainer of $70,000 as an advance against
fees and costs to be incurred by the firm after the commencement of
the case, plus $1,717 for the Chapter 11 filing fee.
Danning Gill is a "disinterested person" within the meaning of
section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Zev Shechtman, Esq.
John N. Tedford, Esq.
Danning, Gill, Israel & Krasnoff, LLP
1901 Avenue of the Stars, Suite 450
Los Angeles, CA 90067-6006
Telephone: (310) 277-0077
Email: zshechtman@DanningGill.com
jtedford@DanningGill.com
About Jaguar Distribution Corp.
Established in 1982, Jaguar Distribution Corp. is a distributor of
independent films to the worldwide in-flight marketplace. Visit
http://www.jaguardc.comfor more information.
Jaguar Distribution sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11358) on July 31,
2020. James Wong, chief restructuring officer, signed the
petition. At the time of the filing, Debtor disclosed total assets
of $1,768,195 and total liabilities of $9,018,419. Judge Martin R.
Barash oversees the case. Debtor is represented by Danning, Gill,
Israel & Krasnoff, LLP.
JMR100 LLC: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: JMR100, LLC
Aledo, TX 76008
Business Description: JMR100, LLC classifies its business as
Single Asset Real Estate (as defined in 11
U.S.C. Section 101(51B)).
Chapter 11 Petition Date: September 1, 2020
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 20-42790
Judge: Hon. Edward L. Morris
Debtor's Counsel: Joyce Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Tel: (972) 503-4033
Email: joyce@joycelindauer.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Tim Barton, president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/CBIMFKY/JMR100_LLC__txnbke-20-42790__0001.0.pdf?mcid=tGE4TAMA
JONES LEASE: Unsecureds Owed $1.46M to Get $70K Plus Profit Share
-----------------------------------------------------------------
JONES LEASE PROPERTIES, LLC, submitted a Second Amended Disclosure
Statement.
As to the Class 2 Claim of BankOrion, the Debtor and BankOrion
agree the principal balance of this Claim is $1,082,304, plus
$183,899 in interest, late fees, and attorney fees, for a total
Claim of $1,266,204. Under the Plan, the Class 2 Claim will be
amortized over 20 years and will be repaid in full by the
Reorganized Debtor as follows. Beginning on a date to be
determined in accordance with section 4.3 of the Plan, the
Reorganized Debtor will make 59 consecutive monthly payments of
principal, plus interest at the rate of 3.0% per annum, of $7,022
each, plus one payment, the 60th, in the amount of the entire
remaining principal balance plus accrued interest. If there have
been no uncured material defaults by the Debtor since the Effective
Date, the Debtor will have the option to apply for refinancing with
BankOrion the entire principal balance of the Class 2 Claim
outstanding after final payment is made for an additional two-year
term, the terms and conditions of which are further detailed in the
Plan.
As to the Class 3 Secured Claim of Blue Grass Savings Bank, the
Debtor and Blue Grass agree that, as of the Effective Date, the
outstanding balance of the Class 3 Claim will be $517,545. Under
the Plan, on the Effective Date, the Class 3 Claim will begin to
accrue interest at the rate of 4.5% per annum. Beginning on June
1, 2020, and continuing on the first day of the month thereafter
and continuing through Dec. 1, 2020, the Reorganized Debtor will
make consecutive monthly payments of $800 each as a partial,
interest only payment on the outstanding balance of the Class 3
Claim. Beginning on Jan. 1, 2021, the Reorganized Debtor will make
59 consecutive monthly payments of $2,622 each plus one payment,
the 60th, in the amount of the entire remaining principal balance
plus accrued interest. In addition, rents received by the
Reorganized Debtor from its lease of Farm Land will be remitted by
the Reorganized Debtor to Blue Grass within thirty days of receipt
of the rent and applied to the balance of the Class 3 Claim first
to reduce accrued interest and then to reduce the outstanding
principal balance. Further, prior to July 1, 2020, the Reorganized
Debtor will list the Farm Land for sale or sell the Farm Land at
auction on or before July 1, 2020. The Reorganized Debtor will also
list the Rental House for sale or sell the Rental House to Larry
Jones within 120 days of the Effective Date. The net proceeds from
the sale of the Farm Land and Rental House will be applied by Blue
Grass to the balance of the Class 3 Claim, first to reduce accrued
interest and then to reduce the outstanding principal balance.
As to the Class 4 Claim of Central Bank Illinois, the Debtor and
Central agree the principal balance of this Claim is $377,190, plus
$10,240 owed for prepetition property taxes on collateral secured
by Central and to be advanced by Central on the Effective Date,
resulting in a total Class 4 Claim of $387,430. The principal
balance of the Class 4 Claim will be amortized over a period of
thirty years at an interest rate of 3.85% per annum. Beginning
within thirty days after the Effective Date, the Reorganized Debtor
will make 59 consecutive monthly payments of principal and
interest, in the amount of $1,816 each, and a final payment, the
60th, in the amount of the entire remaining principal balance plus
accrued interest. In addition to the foregoing, the treatment of
the Class 4 Claim is subject to the terms and conditions set forth
in section 4.2 of the Plan and all subsections thereto.
As to the Class 5 Claim of Exchange State Bank, the Debtor and
Exchange agree the principal balance of this Claim is $394,715,
plus $16,224 owed for prepetition property taxes on collateral
secured by Exchange and to be advanced by Exchange on the Effective
Date, resulting in a total Class 5 Claim of $410,939. The
principal balance of the Claim will be amortized over a period of
30 years at an interest rate of 4.95% per annum. Beginning within
30 days after the Effective Date, the Reorganized Debtor will make
one hundred and nineteen consecutive monthly payments of principal
and interest, in the amount of $2,193 each, and a final payment,
the one hundred and twentieth, in the amount of the entire
remaining principal balance plus accrued interest. In addition to
the foregoing, the treatment of the Class 5 Claim is subject to the
terms and conditions set forth in section 4.2 of the Plan and all
subsections thereto.
As to the Class 8 Claim of IH Mississippi Valley Credit Union
("IH"), the Debtor and IH agree the principal balance of this Claim
is $481,530, plus attorneys' fees of $45,221 and $15,262 owed for
prepetition property taxes on collateral secured by IH and to be
advanced by IH on the Effective Date, resulting in a total Class 8
Claim of $542,012. The Class 8 Claim will be amortized over a
period of 20 years at an interest rate of 2.45% per annum.
Beginning within 30 days after the Effective Date, the Reorganized
Debtor will make 59 consecutive monthly payments, in the amount of
$2,858.95 each, and a final payment, the 60th, in the amount of the
entire remaining principal balance plus accrued interest. If there
have been no uncured material defaults by the Debtor since the
Effective Date, the Debtor will have the option to refinance with
IH the entire principal balance of the Class 8 Claim outstanding
after final payment is made for an additional two-year term, the
terms and conditions of which are further detailed in the Plan.
IH's proof of claim number 18 asserts an unsecured Claim of
$76,813, which will be treated as a General Unsecured Claim in
Class 16.
Class 9 Claim consists of the Allowed Secured Claim of Midwest Bank
of Western Illinois. The Debtor anticipates that, as of the
Effective Date, the amount of the Class 9 Claim will be no more
than $64,473. The balance of the Class 9 Claim will be amortized
over a period of twenty years at an interest rate of 4.95% per
annum. Beginning within thirty days after the Effective Date, the
Reorganized Debtor will make one hundred nineteen consecutive
monthly payments, in the amount of $423.71 each, and a final
payment, the one hundred twentieth, in the amount of the entire
remaining principal balance plus accrued interest.
Class 10 consists of the Allowed Secured Claim of Quad City Bank &
Trust. Quad City's proof of claim asserts the amount of this Claim
was, as of the Petition Date, $4,178,659. The Debtor and Quad City
agree the principal balance of this Claim is $3,085,515, plus
$66,626 owed for prepetition property taxes on the collateral
secured by Quad City and to be advanced by Quad City on the
Effective Date, resulting in a total Class 10 Claim of $3,152,141.
The principal balance of the Class 10 Claim will be amortized over
a period of 30 years at an interest rate of 4.85% per annum.
Beginning within 30 days after the Effective Date, the Reorganized
Debtor will make 59 consecutive monthly payments, in the amount of
$16,634 each, and a final payment, the 60th, in the amount of the
entire remaining principal balance plus accrued interest. If there
have been no uncured material defaults by the Debtor since the
Effective Date, the Debtor will have the option to refinance with
Quad City the entire principal balance of the Class 10 Claim
outstanding after final payment is made for an additional two-year
term, the terms and conditions of which are further detailed in the
Plan.
Class 11 consists of the Allowed Secured Claim of Sauk Valley Bank
& Trust Co. The Debtor and Sauk Valley agree the Allowed amount of
the Class 11 Claim is $4,368,479, consisting of a principal balance
of $4.2 million, plus attorneys' fees of approximately $20,000, and
$148,479 owed for prepetition property taxes on collateral secured
by Sauk Valley and to be advanced by Sauk Valley on the Effective
Date. The Class 11 Claim will be amortized over a period of 25
years and six months at an interest rate of 5.1% per annum.
Beginning within 30 days after the Effective Date, the Reorganized
Debtor will make 36 consecutive monthly payments in the amount of
$25,543 each. Then, beginning one month following the due date of
the 36th payment, the Reorganized Debtor will begin making 23
consecutive monthly payments, in the amount of $28,243 each, $2,700
of each such payment being applied to reduce the principal balance
of the Class 11 Claim in addition to that portion of the balance of
the payment applicable to the reduction of the outstanding
principal balance under the initial amortization schedule. The
Debtor will make one final payment, the 60th, in the amount of the
entire remaining principal balance plus accrued interest. If there
have been no uncured material defaults by the Debtor since the
Effective Date, the Debtor will have the option to apply for
refinancing with Sauk Valley the entire principal balance of the
Class 11 Claim outstanding after final payment is made for an
additional two-year term, the terms and conditions of which are
further detailed in the Plan.
Class 12 consists of the Allowed Secured Claim of Walcott Trust and
Savings Bank. Walcott's proof of claim asserts the amount of this
Claim was, as of the Petition Date, $655,779. The Debtor and
Walcott agree the principal balance of this Claim is $662,174, plus
Walcott expenses of $25,639, and attorneys' fees of $75,202,
resulting in a total Class 12 Claim of $763,015. The Class 12
Claim will be amortized over a period of 25 years at an interest
rate of 5.0% per annum. Beginning within 30 days after the
Effective Date, the Reorganized Debtor will make 59 consecutive
monthly payments, in the amount of $4,460.51 each, and a final
payment, the 60th, in the amount of the entire remaining principal
balance plus accrued interest. If there have been no uncured
material defaults by the Debtor since the Effective Date, the
Debtor will have the option to apply for refinancing with Walcott
for the entire principal balance of the Class 12 Claim outstanding
after final payment is made for an additional two-year term, the
terms and conditions of which are further detailed in the Plan.
Class 15 consists of allowed unsecured claims the amounts of which
are $1,000 or less and such claims the amounts of which are greater
than $1,000 but whose holders voluntarily reduce the amounts of
their claims to $1,000. Pursuant to the Plan, the holders of
Allowed Class 15 Claims will be paid the Allowed Amounts of their
Claims in full in cash on the Effective Date. The Class 15 claims
are impaired.
Class 16 consists of all Allowed General Unsecured Claims,
including all rejection damages claims. Based on the Debtor's
preliminary assessment of the Claims in this Case, the Debtor
estimates that, as of the Effective Date, the balance of the Class
16 Claims will be $1,464,984. Pursuant to the Plan, on the
Effective Date, the Debtor will distribute $20,000 pro rata to the
holders of Allowed Class 16 Claims. Thereafter, beginning six
months after the Effective Date, the Debtor will make a total of 10
semi-annual distributions, in the amount of $5,000 each, to holders
of Class 16 Claims, each Holder of an Allowed Class 16 Claim
receiving a pro rata portion of the distribution being made. In
addition to the foregoing, within 90 days after the end of each
year following the Effective Date, the Reorganized Debtor will
make five additional pro rata distributions to holders of allowed
Class 16 Claims in an amount equal to 10 percent of the Reorganized
Debtor's annual earnings before taxes, depreciation, and
amortization, but net of the payments called for by the Plan.
Based on the Debtor's estimates, the holders of Class 16 Claims
should receive distributions equal to at least 5% of the allowed
amount of their claims.
Class 17 consists of the Disputed Claim of the Bankruptcy Estate of
I-80 Equipment, LLC, United States Bankruptcy Court for the Central
District of Illinois, Case No. 17-81749. Amended proof of claim
five alleges the balance of the Class 17 Claim was, as of the
Petition Date, $5,419,441. The I-80 Estate asserts the Class 17
Claim is Secured through a constructive trust and arises from
amounts allegedly transferred from I-80 Equipment, LLC to Jones
Lease Properties, LLC, JP Rentals, LLC, and JP Apartments
Cooperative (collectively, the "Jones Properties") prior to the
filing of I-80 Equipment's Chapter 7 bankruptcy on December 6, 2017
which were allegedly used for the acquisition of real estate,
payments on mortgage loans and other costs, and operating expenses
of each of the Jones Properties. The Debtor disputes that the
Class 17 Claim is entitled to Secured status based on a
constructive trust legal theory and further disputes the amount
claimed by the I-80 Estate. The Debtor has filed an objection to
the I-80 Estate's proof of Claim (Docket No. 297). The Class 17
Claim will be treated as follows -- the I-80 Estate may choose from
the following options, which must be elected by the I-80 Estate on
the ballot:
1. The I-80 Estate may accept payment of $125,000 on the
Effective Date in Cash in exchange for full and complete
satisfaction of the Class 17 Claim against the Jones Properties and
against Mr. Erik Jones individually;
2. The Class 17 Claim in the amount of $968,000 is deemed fully
unsecured and receives treatment as a Class 16 General Unsecured
Claim.
3. The Class 17 Claim is deemed Disputed and not allowed for
voting purposes on the Plan, or in the alternative, the parties
request the Court estimate the Claim pursuant to Bankruptcy Code
section 502(c), and the parties continue negotiating to resolve the
Claim dispute through mediation or Court adjudication. Any
post-confirmation settlement or Court adjudication will be
implemented under the Plan. If the Court determines the I-80
Estate holds a fully unsecured claim, the Class 17 Claim shall be
treated as a Class 16 General Unsecured Claim. If the Claim is
deemed fully or partially secured, the Debtor will determine
through a Bankruptcy Code section 506 analysis the amount of the
secured claim and treat such secured claim through payments of
interest and principal for ten years at 2.5% interest, amortized
over thirty years, with a balloon payment at the end of the ten
year term, and the deficiency payable as a Class 16 General
Unsecured Claim.
A full-text copy of the Second Amended Disclosure Statement dated
July 22, 2020, is available at https://tinyurl.com/y59hnmaq from
PacerMonitor.com at no charge.
General Reorganization Counsel for the Debtor:
Jeffrey D. Goetz, Esq.
Vincent R. Ledlow, Esq.
Krystal R. Mikkilineni, Esq.
Bradshaw, Fowler, Proctor & Fairgrave, PC
801 Grand Avenue, Suite 3700
Des Moines, IA 50309-8004
Tel: 515-243-4191
Fax: 515-246-5808
E-mail: goetz.jeffrey@bradshawlaw.com
ledlow.vincent@bradshawlaw.com
mikkilineni.krystal@bradshawlaw.com
About Jones Lease Properties
JP Rentals, LLC and Jones Lease Properties, LLC are a locally owned
and operated rental property companies serving the Quad Cities and
surrounding areas. As the source for rental living, they offer a
wide variety of rental properties including apartment complexes,
single family homes, townhomes, and duplexes.
J.P. Apartments Cooperative, Jones Lease Properties, and J.P.
Rentals, LLC filed their voluntary petitions under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Iowa Case Nos. 18-02566,
18-02568,
and 18-02569, respectively) on Nov. 26, 2018.
In January 2019, the cases were transferred to the U.S. Bankruptcy
Court for the Central District of Illinois and were assigned new
case numbers (Case No. 19-80013 for J.P. Apartments; Case No.
19-80014 for Jones Lease; and Case No. 19-80015 for J.P. Rentals).
In the petitions signed by Erik R. Jones, director, J.P. Apartments
disclosed $4,765,888 in total assets and $4,689,693 in
liabilities.
The Debtors tapped Bradshaw, Fowler, Proctor & Fairgrave PC as
their legal counsel; GlassRatner Advisory & Capital Group, LLC, as
their financial advisor and investment banker; and The Skutch Arlow
Group, LLC, as financial advisor.
K&W CAFETERIAS: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: K&W Cafeterias, Inc.
FKA K&W Restaurant, Inc.
1391 Plaza West Road
Winston Salem, NC 27103
Business Description: K&W Cafeterias, Inc. is a family-owned
cafeteria chain headquarted in Winston
Salem, North Carolina. K&W has 28 locations
across NC, SC, VA, and WV.
Website: https://www.kwcafeterias.com
Chapter 11 Petition Date: September 2, 2020
Court: United States Bankruptcy Court
Middle District of North Carolina
Case No.: 20-50674
Judge: Hon. Benjamin A. Kahn
Debtor's Counsel: John A. Northen, Esq.
NORTHEN BLUE, LLP
PO Box 2208
Chapel Hill, NC 27515
Tel: 919-968-4441
Email: jan@nbfirm.com
Debtor's
Special General
Corporate Law,
Regulatory Issues, &
Transactional
Counsel: BELL DAVIS & PITT, P.A.
Debtor's
Special
Employment Law &
Regulations
Counsel: CONSTANGY BROOKS SMITH & PROPHETE, LLP
Debtor's
Accountants: DIXON HUGHES GOODMAN, LLP
Debtor's
Financial
Advisor: DHG CORPORATE FINANCE, LLC
Total Assets: $30,085,274
Total Liabilities: $22,189,229
The petition was signed by Dax C. Allred, president.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/TRJ4RRQ/KW_Cafeterias_Inc__ncmbke-20-50674__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. ALSCO Trade Debt $47,464
PO Box 3594
Attn: Officer/Manager
Durham, NC 27702
2. BB&T Commercial Fayetteville $102,664
Equipment Capital Equipment
2 Great Valley Parkway,
Suite 300
Attn: Officer or Managing Agent
Malvern, PA 19355
3. Cameron Village Lease $20,954
Attn: Officer or Managing Agent
PO Box 534243
Atlanta, GA 30353
4. CIT Bank NA Dish Machine $60,845
10201 Centurion Healy Drive,
Parkway N, Suite #100 South Park,
Attn: Officer or Managing Agent Holden Road,
Jacksonville, FL 32256 Signature Place,
Chapel Hill
5. Commonwealth of VA Sales Tax $26,796
Dept of Taxation
PO Box 1115
Richmond, VA 23218
6. Crestmark Vendor Finance Dish Machine $49,215
PO Box 233756 Tanglewood,
Attn: Officer or Managing Agent Concord,
Chicago, IL 60689 Goldsboro,
Crossroads
7. First Foundation Bank Dish Machine $52,993
PO Box 80550 Statesville, Salem
Attn: Officer or Managing Agent Pineville, Geenville
City of Industry, CA 91716 SC
8. First Lease Inc Dish Machine $21,021
1 Walnut Grove Drive, Burlington and
Suite 300 Cameron Village
Attn: Officer or Managing Agent
Horsham, PA 19044
9. H/S Wilson, LLC Lease, Wilson $269,110
Attn: Hull Property Group, LLC Mall
1190 Interstate Parkway
Augusta, GA 30909
10. Macquarie Equipment Dish Machine $69,495
Capital, Inc.
1301 Riverplace Blvd
Attn: Officer or Managing Agent
Jacksonville, FL 32207
11. NC Dept of Revenue Sales Tax $282,317
PO Box 1168
Raleigh, NC 27602
12. Oliver Pkg. & Trade Debt $35,333
Equipment Co.
PO box 8506
Attn: Officer/Manager
Carol Stream, IL 60197
13. Performance Food Group Trade Debt $1,062,988
543 12th Street
Drive NW
Attn: Officer/Manager
Hickory, NC 28601
14. Pinnacle Point Lease $38,696
Investments, LLC
8504 Willow Branch Dr.
Attn: Officer/Manager
Waxhaw, NC 28173
15. RRPV University Lease $18,009
Chapel Hill LP
PO Box 6230
Attn: Officer/Manager
Orlando, FL 32802
16. SC Dept of Revenue Sales Tax $42,985
PO Box 125
Columbia, SC 29214
17. Signature Place Roll Up, LLC Lease $23,859
PO Box 535411
Attn: Officer or
Managing Agent
Atlanta, GA 30353
18. Southern Shopping Lease $50,965
Center LLC
PO Box 8500
Lockbox #7327
Attn: Officer/Manager
Philadelphia, PA 19178
19. Tower Place NC LP Lease $18,911
c/o Providence Group Mgmt Services
300 W. Summit Age
Suite 250
Charlotte, NC 28203
20. Truist Bank PPP Loan $6,735,200
Attn: Managing Agent/Officer
214 N. Tryon St.
Charlotte, NC 28202
KAY BEE KAY: Law Firm Did Not Violate Automatic Stay, Court Rules
-----------------------------------------------------------------
Bankruptcy Judge Thomas J. Tucker denies Said Taleb's motion asking
the Court to declare Turfe Law, PLLC in violation of automatic
stay. The Court concludes that none of the actions taken by Turfe
Law in state court violated any of the automatic stay provisions of
11 U.S.C. section 362(a).
In 2012, the Debtor Kay Bee Properties, LLC brought an action
against Taleb in the Third Judicial Circuit Court of Michigan.
Taleb filed a counterclaim against the Debtor and its principal,
Keith Kramer. The dispute was submitted to arbitration. The
arbitrator found "no cause of action" as to the claims against
Taleb. However, in an award dated March 12, 2015, the arbitrator
found in favor of Taleb on his counterclaim, and awarded
$793,333.33 against Kramer and the Debtor. The arbitration award
was reduced to judgment by the state court on April 3, 2015.
Kramer and the Debtor in this case, Kay Bee Kay Properties, LLC,
each filed a Chapter 11 bankruptcy case on April 28, 2015, and each
of the cases was converted to Chapter 7 on August 24, 2015. Kramer
ultimately entered into a consent judgment with the United States
Trustee in his case, waiving a Chapter 7 discharge, on July 1,
2016. Taleb is a judgment creditor of the Debtor in both bankruptcy
cases.
Taleb was represented by Turfe Law PLLC in the State Court Case,
and also was represented by Miller, Canfield, Paddock and Stone,
PLC in a state court appeal and in the bankruptcy cases.
In Dec. 2016 Turfe Law filed a motion in the State Court Case,
asserting a lien for attorney fees. On Feb. 2, 2017, the state
court entered an order recognizing the lien and establishing the
amount of the lien.
On Dec. 20, 2018, the state court entered an order determining the
amount of Turfe Law's attorney lien to be $196,965.20.
Taleb appealed the orders recognizing the lien and establishing the
amount of the lien. It appears that the appeal remains pending
before the Michigan Court of Appeals.
Meanwhile, the Chapter 7 Trustee filed a final report in this
bankruptcy case, on Feb. 25, 2020. The report listed the allowed
unsecured claims, including Taleb's allowed claim in the amount of
$793,333.33, and proposed a distribution on Taleb's claim of
$9,209.61.The only objection to the final report was filed by
Taleb, on March 20, 2020.13 The Court overruled Taleb's objection,
on March 30, 2020.
The Trustee filed a Certificate of Distribution on April 2, 2020.
On April 10, 2020, Turfe Law filed a motion asking the Court to
recognize its lien and to direct the Trustee to pay Taleb's
distribution directly to Turfe Law. Taleb opposed this motion. On
July 2, 2020, the Court entered an Opinion and an Order denying
Turfe Law's motion, holding that Fed. R. Bankr. P. 3009 precluded
the relief Turfe Law sought.
Meanwhile, on May 12, 2020, in response to an emergency motion
filed by Turfe Law, the state court entered a temporary restraining
order stating that Said Taleb shall be restrained and enjoined from
using any monies collected pursuant to the Judgment in his favor
and against Keith B. Kramer, Kay Bee Kay Properties, LLC, Kay Bee
Kay Operations, LLC and/or Kay Bee Management, LLC, including, but
not limited to, distributions made pursuant to the Kay Bee
Properties, LLC, [sic] which are to be made shortly after May 11,
2020.
In his Motion, Taleb asks the Court to "find Turfe Law, PLLC in
violation of the Automatic Stay and [to determine] . . . that the
post-petition collection actions of [Turfe Law] and consequent
Orders entered in the State Court . . . were in violation of this
Court's Automatic Stay and are void . . . ."
Taleb argues that Turfe Law's pursuit of its charging lien in state
court violated the automatic stay under 11 U.S.C. section 362(a).
Specifically, Taleb alleges a violation of the stay through the
filing of the Motion to Assert Lien for Attorney Fees which
resulted the state court's Feb. 2, 2017 "Order Regarding Turfe
Law's Motion to Assert Lien for Attorney Fees," and the Dec. 20,
2018 "Order Determining Amount of Attorney Lien." Taleb also argues
that Turfe Law violated the automatic stay by "initiating an
Exparte Motion for a Temporary Restraining Order regarding the
attorney's lien," which resulted in the state court's "Ex Parte
Order Granting Temporary Restraining Order and Setting Date for
Hearing for Preliminary Injunction." Taleb does not assert that
Turfe Law's action in this bankruptcy case, filing a motion to
recognize its attorney's lien, violated the automatic stay.
Taleb alleges that in taking the actions it has in state court,
Turfe Law is "seeking to enforce a claim against property of the
[bankruptcy] estate in the form of an in rem attorney's lien charge
for a sum owed to [Taleb]." Although the Motion does not say so,
this appears to allege a violation of 11 U.S.C. section 362(a)(3)
and/or section 362(a)(4). In addition, and although the Motion only
cites to section 362 generally, in a document entitled "Answer to
Motion to Recognize Turfe Law, PLLC's Attorney's Lien Against Said
Taleb, Creditor," Taleb argued violations of sections 362(a)(1)
through 362(a)(7).
Turfe Law argues that sections 362(a)(1) through 362(a)(7) do not
apply to any of Turfe Law's actions at issue in this case. Judge
Tucker agrees. These sections do not apply, primarily because Taleb
is not "the debtor" in this bankruptcy case.
Sections 362(a)(3) and 362(a)(4) involve actions taken against
property of the bankruptcy estate. Section 362(a)(3) stays "any act
to obtain possession of property of the estate or of property from
the estate or to exercise control over property of the estate," and
section 362(a)(4) stays "any act to create, perfect, or enforce any
lien against property of the estate."
Subject to any allowed exemptions, "property of the estate"
includes "all legal or equitable interests of the debtor in
property as of the commencement of the case."
The actions at issue by Turfe Law were taken to enforce Turfe Law's
attorney's lien. Michigan law "recognizes a common law attorney's
lien on a judgment or fund resulting from the attorney's services."
The lien "is an equitable right to have fees and costs due for
services secured out of the judgment or recovery in a particular
suit."
According to the Court, Taleb does not adequately explain how Turfe
Law's actions in the state court were actions against "property of
the estate" for purposes of sections 362(a)(3) and 362(a)(4). Judge
Tucker says they were not. Under Michigan law, the charging lien
operated as a lien on the judgment received by Taleb in the state
court lawsuit and its proceeds. It is not a lien against the
property of the bankruptcy estate. Accordingly, section 362(a)(4)
does not apply. Instead, Turfe Law has, at most, a lien on the
property of Taleb -- namely, Taleb's right to payment on his
judgment and his resulting allowed claim in this bankruptcy case.
Similarly, in asserting its attorney's lien in state court, Turfe
Law was not seeking to enforce a judgment against the property of
the estate, nor was it acting to obtain possession or control of
property of the estate, in violation of section 362(a)(3). The Feb.
2, 2017 order recognizing Turfe Law's lien and the Dec. 20, 2018
order setting the amount of the lien merely recognized that Turfe
Law had a lien against Taleb's recovery in the State Court Case.
The May 12, 2020 temporary restraining order enjoined the conduct
of Taleb (a non-debtor) with regard to the distribution he was
going to receive, and was not an act to obtain possession or
control of property of the bankruptcy estate.
A copy of the Court's Opinion dated July 27, 2020 is available at
https://bit.ly/2DPoTMC from Leagle.com.
Based in Detroit, Michigan, Kay Bee Kay Properties, LLC filed for
bankruptcy protection (Bankr. E.D. Mich. Case No. 15-46666) on
April 28, 2015 with estimated assets of $1 million to $10 million
and estimated liabilities of $500,000 to $1 million. The petition
was signed by Keith B. Kramer, manager/member.
KAYA HOLDINGS: Launches 160 Units Offering
------------------------------------------
Kaya Holdings, Inc., commenced a private offering of up to of 160
Units, at a price of $25,000 per Unit. Each Unit consists of:
* 1,000,000 shares of the Company's common stock;
* 1,000,000 one-year Class A warrants, each entitling the
holder to purchase one additional KAYS Share, at an exercise
price of $0.075 per KAYS Share;
* 1,000,000 two year Class B warrants, each entitling the
holder to purchase one additional KAYS Share, at an exercise
price of $0.125 per KAYS Share; and
* 100,000 shares of common stock of Kaya Brands International,
Inc., a recently incorporated subsidiary of KAYS through
which the Company intends to undertake its expansion into
foreign operations.
The securities will be offered and sold pursuant to Rule 506(c)
promulgated under the Securities Act of 1933, as amended. The
Units will be offered and sold on a "best efforts" basis until Dec.
31, 2020, which date may be extended by the Company in its sole
discretion for a period or periods of up to 180 days. The
securities included and underlying the Units will be "restricted
securities" under the Securities Act.
The Company intends to use the proceeds of the private offering
primarily to fund expansion of its international operations and for
general working capital and corporate purposes.
About Kaya
Kaya Holdings, Inc. -- http://www.kayaholdings.com/-- is a
vertically integrated legal marijuana enterprise that produces,
distributes, and/or sells a full range of premium cannabis products
including flower, oils, vape cartridges and cannabis infused
confections, baked goods and beverages through a fully integrated
group of subsidiaries and companies supporting highly distinctive
brands.
As of June 30, 2020, the Company had $2.67 million in total assets,
$18.28 million in total liabilities, and a total stockholders'
deficit of $15.61 million.
M&K CPAS, PLLC, in Houston, TX, the Company's auditor since 2018,
issued a "going concern" qualification in its report dated May 13,
2020, citing that the Company has suffered net losses from
operations and has a net capital deficiency, which raises
substantial doubt about its ability to continue as a going concern.
KEIV HOSPITALITY: Case Summary & 3 Unsecured Creditors
------------------------------------------------------
Debtor: Keiv Hospitality LLC
22055 Katy Freeway
Katy, TX 77450
Business Description: Keiv Hospitality LLC is primarily engaged in
providing short-term lodging in facilities
known as hotels, motor hotels, resort
hotels, and motels.
Chapter 11 Petition Date: September 1, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 20-34408
Judge: Hon. Jeffrey P. Norman
Debtor's Counsel: Timothy L. Wentworth, Esq.
OKIN ADAMS LLP
1113 Vine St., Suite 240
Houston, TX 77002
Tel: (713) 228-4100
Email: twentworth@okinadams.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ben Mousavi, owner.
A full-text 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://www.pacermonitor.com/view/DVBWWUA/Keiv_Hospitality_LLC__txsbke-20-34408__0001.0.pdf?mcid=tGE4TAMA
KEIVANS HOSPITALITY: Case Summary & 3 Unsecured Creditors
---------------------------------------------------------
Debtor: Keivans Hospitality, Inc.
22055 Katy Freeway
Katy, TX 77450
Business Description: Keivans Hospitality, Inc. operates in the
traveler accommodation industry.
Chapter 11 Petition Date: September 1, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 20-34409
Judge: Hon. Christopher M. Lopez
Debtor's Counsel: Timothy L. Wentworth, Esq.
OKIN ADAMS LLP
1113 Vine St., Suite 240
Houston, TX 77002
Tel: (713) 228-4100
Email: twentworth@okinadams.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ben Mousavi, owner.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/JZVRICA/Keivans_Hospitality_Inc__txsbke-20-34409__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Three Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Guaranty Bank & Trust, N.A. $150,000
100 W. Arkansas
Mount Pleasant, TX 75455
2. Hilton Worldwide Franchise Fees $66,000
4649 Paysphere Circle & Royalties
Chicago, IL 60674
3. Small Business Administration $0
Little Rock Commercial Loan Svc Ctr
Office of Financial Program Operations
2120 Riverfront Drive
Little Rock, AR 72202
KLAUSNER LUMBER: Committee Taps EisnerAmper as Financial Advisor
----------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 case of Klausner Lumber Two, LLC seeks approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
EisnerAmper LLP as its financial advisor.
EisnerAmper will render these professional services to the
committee:
(a) analyze the financial operations of Debtor before and
after its bankruptcy filing;
(b) conduct forensic investigation into Debtor's
pre-bankruptcy activities in order to identify potential causes of
action;
(c) perform claims analysis for the committee;
(d) verify the physical inventory of supplies, equipment and
other material assets and liabilities;
(e) assist the committee in its analysis and review of monthly
statements of operations to be submitted by Debtor;
(f) analyze Debtor's budgets, cash flow projections, cash
disbursements, restructuring programs, selling and general
administrative expense structure and other reports or analyses
prepared by Debtor or its professionals;
(g) analyze transactions with insiders, related or affiliated
companies;
(h) prepare and submit reports to the committee;
(i) assist the committee in its review of the financial
aspects of a plan of reorganization or liquidation, if any, to be
submitted by Debtor;
(j) attend meetings of creditors and conferences with
representatives of the creditor groups and their counsel;
(k) prepare hypothetical orderly liquidation analyses;
(l) monitor, participate in and consult with the committee
regarding the marketing and sale of any of Debtor's assets;
(m) analyze the financial ramifications of any proposed
transactions for which Debtor seeks bankruptcy court approval;
(n) provide assistance, including expert testimony and
analysis in support of potential litigation that may be
investigated or prosecuted by the committee; and
(o) any other services in which the committee requests its
financial advisor to perform.
EisnerAmper's normal hourly rates are as follows:
Directors/Partners $555 - $655
Managers/Senior Managers $305 - $450
Associates/Seniors $205 - $295
Paraprofessionals $135 - $155
EisnerAmper has agreed to provide a 10 percent reduction to its
current hourly rates. In addition, the firm will charge the
committee for all other out-of-pocket expenses incurred.
Allen Wilen of EisnerAmper disclosed in court filings that the firm
neither holds nor represents any interest adverse to Debtor's
estate, creditors and equity holders.
The firm can be reached through:
Allen D. Wilen
EisnerAmper LLP
111 Wood Avenue South
Iselin, NJ 08830-2700
Telephone: (732) 243-7000
About Klausner Lumber Two
Klausner Lumber Two, LLC, a sawmill company in Enfield, N.C.,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Del. Case No. 20-11518) on June 10, 2020. Robert Prusak, chief
restructuring officer, signed the petition. At the time of the
filing, Debtor had estimated assets of between $10 million and $50
million and liabilities of between $100 million and $500 million.
Judge Karen B. Owens oversees the case.
Debtor has tapped Westerman Ball Ederer Miller Zucker & Sharfstein,
LLP and Morris, Nichols, Arsht & Tunnell, LLP as its bankruptcy
counsel; Asgaard Capital LLC as restructuring advisor; and Cypress
Holdings LLC as investment banker.
The U.S. Trustee for the District of Delaware appointed a committee
of unsecured creditors in Debtor's Chapter 11 case on June 25,
2020. The committee has tapped Elliott Greenleaf, P.C. as its
legal counsel and EisnerAmper LLP as its financial advisor.
LE TOTE: Seeks Approval to Hire Kutak Rock as Local Counsel
-----------------------------------------------------------
Le Tote, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to employ
Kutak Rock LLP as local counsel.
Kutak Rock will render these legal services to Debtors in close
coordination with lead counsel Kirkland & Ellis to avoid
duplication of services:
(a) provide legal advice and services regarding local rules,
practices and procedures, and provide substantive and strategic
advice on how to accomplish Debtors' goals in connection with the
prosecution of their Chapter 11 cases;
(b) review, revise or prepare drafts of documents to be filed
with the court;
(c) appear in court and at any meeting with the U.S. trustee
and any meeting of creditors;
(d) perform various services in connection with the
administration of the cases;
(e) interact and communicate with the court's chambers and
clerk's office;
(f) assist Debtors and Kirkland in preparing, reviewing,
revising, filing and prosecuting pleadings related to contested
matters, executory contracts and unexpired leases, asset sales,
plan and disclosure statement issues, and claims administration to
the extent requested by Debtors or their lead counsel; and
(g) perform all other services assigned by Debtors, in
consultation with Kirkland.
The hourly rates for the attorneys and paralegals who are expected
to have primary responsibility for the representation of Debtors
are as follows:
Michael A. Condyles, Partner $590
Peter J. Barrett, Partner $540
Jeremy S. Williams, Partner $450
Brian H. Richardson, Associate $330
Laura L. Kistler, Attorney $305
Lynda Wood, Paralegal $190
Amanda Nugent, Paralegal $150
In addition, the firm will charge Debtors for its actual,
out-of-pocket expenses.
Prior to the petition filing, Debtors made classic retainer
payments to the firm totaling $105,000.
Michael Condyles, Esq., a partner at Kutak Rock, disclosed in court
filings that the firm is a "disinterested person" within the
meaning of Sections 101(14) and 327(a) of the Bankruptcy Code.
Mr. Condyles also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the Revised U.S. Trustee Guidelines:
a. Kutak Rock did not agree to any variations from, or alternatives
to, its standard or customary billing arrangements for the
engagement.
b. No professional from Kutak Rock included in the engagement
varied or will vary his rate based on the geographic location of
Debtors' bankruptcy cases.
c. No adjustments were made to either the billing rates or the
material financial terms of Kutak Rock's employment by Debtors as a
result of the filing of the cases.
d. Kutak Rock will submit to Debtors for approval a staffing plan
and budget for the firm that covers the period from Aug. 2 to 30,
2020.
The firm can be reached through:
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, VA 23219-4071
Telephone: (804) 644-1700
Facsimile: (804) 783-6192
Email: Michael.Condyles@KutakRock.com
Peter.Barrett@KutakRock.com
Jeremy.Williams@KutakRock.com
Brian.Richardson@KutakRock.com
About Le Tote Inc.
Le Tote, Inc. and its affiliates 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, Le Tote
temporarily closed all retail locations in March 2020, although
they continue to operate the Le Tote and Lord & Taylor websites.
Le Tote and its affiliates filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case
No. 20-33332) on Aug. 2, 2020. Ed Kremer, chief restructuring
officer, signed the petitions. At the time of the filing, Debtors
disclosed between $100 million and $500 million in both assets and
liabilities. Judge Keith L. Phillips oversees the cases.
Debtors have tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as their legal counsel; Kutak Rock LLP and
Crenshaw, Ware & Martin, PLC as local counsel; Katten Muchin
Rosenman LLP as special counsel; Berkeley Research LLC as financial
advisor; and Nfluence Partners as investment banker. Stretto is the
notice, claims and balloting agent, and administrative advisor.
John Fitzgerald, III, acting U.S. trustee for Region 4, appointed a
committee of unsecured creditors on Aug. 12, 2020. The committee
is represented by Cooley LLP.
LE TOTE: Seeks Approval to Hire Stretto as Administrative Advisor
-----------------------------------------------------------------
Le Tote, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to employ
Stretto as administrative advisor.
Stretto will render these bankruptcy solicitation and
administration services to the Debtors:
(a) Assist with, among other things, plan solicitation,
balloting, disbursements, and tabulation of votes, and prepare any
related reports, as required in support of confirmation of a
chapter 11 plan, and in connection with such services, process
requests for documents from parties-in-interest;
(b) Prepare an official ballot certification and, if
necessary, testify in support of the ballot tabulation results;
(c) Assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith, if necessary;
(d) Provide a confidential data room, if requested;
(e) Manage and coordinate any distributions pursuant to a
chapter 11 plan; and
(f) Provide such other processing, solicitation, balloting and
other administrative services described in the Engagement
Agreement, but not included in the Section 156(c) Application, as
may be requested from time to time by the Debtors, the Court or the
Office of the Clerk of the United States Bankruptcy Court for the
Eastern District of Virginia.
Stretto's hourly rates for its consulting, solicitation, balloting
and tabulation services are as follows:
Analyst $30 - $60
Consultant (Associate/Senior Associate) $65 - $182
Director/ Managing Director $192.50 - $230
Solicitation Associate $209
Director of Securities $230
Additionally, Stretto will seek reimbursement from the Debtors for
reasonable expenses in accordance with the terms of the Engagement
Agreement.
Prior to the petition date, the Debtors provided Stretto an advance
in the amount of $20,000. Stretto applied the advance to its final
pre-bankruptcy invoice, leaving a retainer balance in the amount of
approximately $6,000.
Robert Klamser, a managing director at Stretto, disclosed in court
filings that the firm is a "disinterested person" within the
meaning of Sections 101(14) and 327(a) of the Bankruptcy Code.
The firm can be reached through:
Robert Klamser
Stretto
8269 E. 23rd Avenue, Ste. 275
Denver, CO 80238
Telephone: (310) 245-3759
Email: robert.klamser@stretto.com
About Le Tote Inc.
Le Tote, Inc. and its affiliates 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, Le Tote
temporarily closed all retail locations in March 2020, although
they continue to operate the Le Tote and Lord & Taylor websites.
Le Tote and its affiliates filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case
No. 20-33332) on Aug. 2, 2020. Ed Kremer, chief restructuring
officer, signed the petitions. At the time of the filing, Debtors
disclosed between $100 million and $500 million in both assets and
liabilities. Judge Keith L. Phillips oversees the cases.
Debtors have tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as their legal counsel; Kutak Rock LLP and
Crenshaw, Ware & Martin, PLC as local counsel; Katten Muchin
Rosenman LLP as special counsel; Berkeley Research LLC as financial
advisor; and Nfluence Partners as investment banker. Stretto is the
notice, claims and balloting agent, and administrative advisor.
John Fitzgerald, III, acting U.S. trustee for Region 4, appointed a
committee of unsecured creditors on Aug. 12, 2020. The committee
is represented by Cooley LLP.
LE TOTE: Seeks Approval to Tap Kirkland & Ellis as Legal Counsel
----------------------------------------------------------------
Le Tote, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to employ
Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as
their legal counsel.
Kirkland & Ellis will render these legal services:
(a) advise Debtors with respect to their powers and duties in
the continued management and operation of their businesses and
properties;
(b) advise and consult on the conduct of Debtors' Chapter 11
cases;
(c) attend meetings and negotiate with representatives of
creditors and other parties-in-interest;
(d) take all necessary actions to protect and preserve
Debtors' estates;
(e) prepare pleadings;
(f) represent Debtors in connection with obtaining authority
to continue using cash collateral and post-petition financing;
(g) advise Debtors in connection with any potential sale of
assets;
(h) appear before the court and any appellate courts;
(i) advise Debtors regarding tax matters;
(j) take any necessary action to negotiate, prepare and obtain
approval of a disclosure statement and confirmation of a Chapter 11
plan and all documents related thereto; and
(k) perform all other necessary legal services for Debtors in
connection with the prosecution of the cases.
The firms' hourly rates for matters related to the cases range as
follows:
Partners $1,075 - $1,845
Of Counsel $625 - $1,845
Associates $610 - $1,165
Paraprofessionals $245 - $460
In addition, the firm will charge Debtors for its actual,
out-of-pocket expenses.
Steven Serajeddini, Esq., a partner at Kirkland & Ellis and
Kirkland & Ellis International, disclosed in court filings that the
firms are "disinterested persons" within the meaning of Section
101(14) of the Bankruptcy Code.
Mr. Serajeddini also made the following disclosures in response to
the request for additional information set forth in Paragraph D.1
of the Revised U.S. Trustee Guidelines:
Question: Did Kirkland agree to any variations from, or
alternatives to, Kirkland's standard billing arrangements for this
engagement?
Answer: No. Kirkland and Debtors have not agreed to any variations
from, or alternatives to, Kirkland's standard billing arrangements
for this engagement. The rate structure provided by Kirkland is
appropriate and is not significantly different from (a) the rates
that Kirkland charges for other non-bankruptcy representations or
(b) the rates of other comparably skilled professionals.
Question: Do any of the Kirkland professionals in this engagement
vary their rate based on the geographic location of Debtors'
chapter 11 cases?
Answer: No. The hourly rates used by Kirkland in representing
Debtors are consistent with the rates that Kirkland charges other
comparable chapter 11 clients, regardless of the location of the
chapter 11 case.
Question: If Kirkland has represented Debtors in the 12 months
prepetition, disclose Kirkland's billing rates and material
financial terms for the prepetition engagement, including any
adjustments during the 12 months prepetition. If Kirkland's billing
rates and material financial terms have changed post-petition,
explain the difference and the reasons for the difference.
Answer: Kirkland's current hourly rates for services rendered on
behalf of Debtors range as follows:
Billing Category U.S. Range
Partners $1,075 - $1,845
Of Counsel $625 - $1,845
Associates $610 - $1,165
Paraprofessionals $245 - $460
Kirkland represented Debtors from July 19, 2019 through December
31, 2019, using the hourly rates listed below:
Billing Category U.S. Range
Partners $1,025 - $1,795
Of Counsel $595 - $1,705
Associates $595 - $1,125
Paraprofessionals $235 - $460
Question: Have Debtors approved Kirkland's budget and staffing
plan, and, if so, for what budget period?
Answer: Yes, for the period from August 2 to November 2, 2020.
The firms can be reached through:
Steven N. Serajeddini, Esq.
Kirkland & Ellis LLP
Kirkland & Ellis International LLP
601 Lexington Avenue
New York, NY 10022
Telephone: (212) 446-4800
Facsimile: (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, IL 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
Email: david.eaton@kirkland.com
jaimie.fedell@kirkland.com
About Le Tote Inc.
Le Tote, Inc. and its affiliates 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, Le Tote
temporarily closed all retail locations in March 2020, although
they continue to operate the Le Tote and Lord & Taylor websites.
Le Tote and its affiliates filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case
No. 20-33332) on Aug. 2, 2020. Ed Kremer, chief restructuring
officer, signed the petitions. At the time of the filing, Debtors
disclosed between $100 million and $500 million in both assets and
liabilities. Judge Keith L. Phillips oversees the cases.
Debtors have tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as their legal counsel; Kutak Rock LLP and
Crenshaw, Ware & Martin, PLC as local counsel; Katten Muchin
Rosenman LLP as special counsel; Berkeley Research LLC as financial
advisor; and Nfluence Partners as investment banker. Stretto is the
notice, claims and balloting agent, and administrative advisor.
John Fitzgerald, III, acting U.S. trustee for Region 4, appointed a
committee of unsecured creditors on Aug. 12, 2020. The committee
is represented by Cooley LLP.
LE TOTE: Seeks to Hire Katten Muchin as Special Counsel
-------------------------------------------------------
Le Tote, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to employ
Katten Muchin Rosenman, LLP.
The firm will serve as special counsel for the restructuring
committee of Le Tote's board of directors to provide independent
legal services in connection with the investigation conducted by
the committee related to certain potential claims and causes of
action held by Debtors' estates.
The firm's standard hourly rates are as follows:
Partners $770 - $1,555
Of Counsel $895 - $1,475
Associates $460 - $970
Paraprofessionals $195 - $580
In addition, the firm will seek reimbursement for all work-related
expenses incurred.
Steven Reisman, Esq., a partner at Katten Muchin, disclosed in
court filings that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
Mr. Reisman also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the Revised U.S. Trustee Guidelines.
Question: Did Katten agree to any variations from, or alternatives
to, Katten's standard billing arrangements for this engagement?
Answer: No. Katten and Debtors have not agreed to any variations
from, or alternatives to, Katten's standard billing arrangements
for this engagement. The rate structure provided by Katten is
appropriate and is not significantly different from (a) the rates
that Katten charges for other non-bankruptcy representations or (b)
the rates of other comparably skilled professionals.
Question: Do any of the Katten professionals in this engagement
vary their rate based on the geographic location of Debtors'
Chapter 11 cases?
Answer: No. The hourly rates used by Katten in representing the
Restructuring
Committee are consistent with the rates that Katten charges other
comparable
chapter 11 clients, regardless of the location of the chapter 11
case.
Question: If Katten has represented Debtors in the 12 months
prepetition, disclose Katten's billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the twelve months prepetition. If Katten's billing rates and
material financial terms have changed postpetition, explain the
difference and the reasons for the difference.
Answer: Katten represented Debtors during the twelve-month period
before the Petition Date using the hourly rates listed below. There
has been no change in rates since that time.
Question: Have Debtors approved Katten's budget and staffing plan,
and, if so, for what budget period?
Answer: Katten provided a budget and staffing plan to Debtors and
is working with Debtors to finalize them.
The firm can be reached through:
Steven J. Reisman, Esq.
Katten Muchin Rosenman LLP
575 Madison Avenue
New York, NY 10022-2585
Telephone: (212) 940-8800
Email: sreisman@katten.com
About Le Tote Inc.
Le Tote, Inc. and its affiliates 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, Le Tote
temporarily closed all retail locations in March 2020, although
they continue to operate the Le Tote and Lord & Taylor websites.
Le Tote and its affiliates filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case
No. 20-33332) on Aug. 2, 2020. Ed Kremer, chief restructuring
officer, signed the petitions. At the time of the filing, Debtors
disclosed between $100 million and $500 million in both assets and
liabilities. Judge Keith L. Phillips oversees the cases.
Debtors have tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as their legal counsel; Kutak Rock LLP and
Crenshaw, Ware & Martin, PLC as local counsel; Katten Muchin
Rosenman LLP as special counsel; Berkeley Research LLC as financial
advisor; and Nfluence Partners as investment banker. Stretto is the
notice, claims and balloting agent, and administrative advisor.
John Fitzgerald, III, acting U.S. trustee for Region 4, appointed a
committee of unsecured creditors on Aug. 12, 2020. The committee
is represented by Cooley LLP.
LE TOTE: Seeks to Tap Berkeley Research Group as Financial Advisor
------------------------------------------------------------------
Le Tote, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to employ
Berkeley Research Group, LLC as financial advisor.
The firm will render these professional services:
(a) support the development of restructuring plans, financing
and strategic alternatives for maximizing the enterprise value of
Debtors;
(b) prepare various financial analysis to support
restructuring alternatives;
(c) advise Debtors relative to negotiating with existing
lenders and stakeholders;
(d) provide advice to management on cash conservation measures
and liquidity forecasting after analyzing and stress testing weekly
cash flows under various scenarios;
(e) assist Debtors with the communications and negotiations
with various third parties to support restructuring alternatives;
(f) other services as requested or directed by Debtors' chief
executive officer, board of directorsor other personnel as
authorized by the board and agreed to by Berkeley; and
(h) identify likely buyers or strategic limitations of certain
potential buyers.
Berkeley's standard hourly rates for 2020 are as follows:
Managing Director $795 - $1,095
Director $600 - $835
Professional Staff $285 - $740
Support Staff $125 - $260
Further, in addition to the hours based on professional fees,
Berkeley will receive a one-time payment of $750,000 and
reimbursement for work-related expenses incurred.
During the 90 period prior to the petition date, Debtors paid
Berkeley $746,653 in aggregate for professional services performed
and expenses incurred.
Robert Duffy, a managing director at Berkeley, disclosed in court
filings that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Robert J. Duffy
Berkeley Research Group, LLC
70 W. Madison Street, Suite 5000
Chicago, IL 60602
Telephone: (312) 429-7900
About Le Tote Inc.
Le Tote, Inc. and its affiliates 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, Le Tote
temporarily closed all retail locations in March 2020, although
they continue to operate the Le Tote and Lord & Taylor websites.
Le Tote and its affiliates filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case
No. 20-33332) on Aug. 2, 2020. Ed Kremer, chief restructuring
officer, signed the petitions. At the time of the filing, Debtors
disclosed between $100 million and $500 million in both assets and
liabilities. Judge Keith L. Phillips oversees the cases.
Debtors have tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as their legal counsel; Kutak Rock LLP and
Crenshaw, Ware & Martin, PLC as local counsel; Katten Muchin
Rosenman LLP as special counsel; Berkeley Research LLC as financial
advisor; and Nfluence Partners as investment banker. Stretto is the
notice, claims and balloting agent, and administrative advisor.
John Fitzgerald, III, acting U.S. trustee for Region 4, appointed a
committee of unsecured creditors on Aug. 12, 2020. The committee
is represented by Cooley LLP.
LE TOTE: Seeks to Tap Crenshaw Ware as Local Counsel
----------------------------------------------------
Le Tote, Inc. seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Virginia to employ Crenshaw, Ware & Martin, PLC
as local counsel for the restructuring committee of its board of
directors.
The firm will render these legal services:
(a) provide legal advice and services regarding the local
rules, practices, precedent, regulations and procedures, and
provide substantive and strategic advice on how to accomplish
Debtors' goals at the sole direction of the restructuring
committee;
(b) appear in court, depositions and other meetings on behalf
of the restructuring committee;
(c) review, comment or prepare drafts of documents to be filed
with the court to ensure compliance with the local rules; and
(d) interact and communicate with the court's chambers and
clerk's office.
Crenshaw will be paid at its standard hourly rates as follows:
Partners $350 – $400
Associates $230 – $325
Paraprofessionals $100 – $150
In addition, Crenshaw will seek reimbursement for all work-related
expenses incurred.
Donald Schultz, Esq., a partner at Crenshaw, disclosed in court
filings that the firm is a "disinterested person" within the
meaning of section 101(14) of the Bankruptcy Code.
Mr. Schultz also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the Revised U.S. Trustee Guidelines:
Question: Did Crenshaw agree to any variations from, or
alternatives to, Crenshaw's standard billing arrangements for this
engagement?
Answer: No. Crenshaw and Debtors have not agreed to any variations
from, or alternatives to, Crenshaw's standard billing arrangements
for this engagement. The rate structure provided by Crenshaw is
appropriate and is not significantly different from (a) the rates
that Crenshaw charges for other non-bankruptcy representations or
(b) the rates of other comparably skilled professionals.
Question: Do any of the Crenshaw professionals in this engagement
vary their rate based on the geographic location of Debtors'
chapter 11 cases?
Answer: No. The hourly rates used by Crenshaw in representing the
Restructuring Committee are consistent with the rates that Crenshaw
charges other comparable chapter 11 clients, regardless of the
location of the chapter 11 case.
Question: If Crenshaw has represented Debtors in the twelve months
prepetition, disclose Crenshaw's billing rates and material
financial terms for the prepetition engagement, including any
adjustments during the twelve months prepetition. If Crenshaw's
billing rates and material financial terms have changed
postpetition, explain the difference and the reasons for the
difference.
Answer: Crenshaw did not represent Debtors during the twelve-month
period before the Petition Date.
Question: Have Debtors approved Crenshaw's budget and staffing
plan, and, if so, for what budget period?
Answer: Crenshaw provided a budget and staffing plan to Debtors and
is working with Debtors to finalize them.
The firm can be reached through:
Dinald C. Schultz, Esq.
Crenshaw, Ware & Martin, PLC
150 West Main Street, Suite 1500
Norfolk, VA 23510
Telephone: (757) 623-3000
Facsimile: (757) 623-5735
About Le Tote Inc.
Le Tote, Inc. and its affiliates 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, Le Tote
temporarily closed all retail locations in March 2020, although
they continue to operate the Le Tote and Lord & Taylor websites.
Le Tote and its affiliates filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case
No. 20-33332) on Aug. 2, 2020. Ed Kremer, chief restructuring
officer, signed the petitions. At the time of the filing, Debtors
disclosed between $100 million and $500 million in both assets and
liabilities. Judge Keith L. Phillips oversees the cases.
Debtors have tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as their legal counsel; Kutak Rock LLP and
Crenshaw, Ware & Martin, PLC as local counsel; Katten Muchin
Rosenman LLP as special counsel; Berkeley Research LLC as financial
advisor; and Nfluence Partners as investment banker. Stretto is the
notice, claims and balloting agent, and administrative advisor.
John Fitzgerald, III, acting U.S. trustee for Region 4, appointed a
committee of unsecured creditors on Aug. 12, 2020. The committee
is represented by Cooley LLP.
LILIS ENERGY: Oct. 13 Auction of Substantially All Assets Set
-------------------------------------------------------------
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern
District of Texas authorized the bidding procedures proposed by
Lilis Energy, Inc. and affiliates in connection with the auction
sale of substantially all or any portion of their assets.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 8, 2020, at 5:00 p.m. (CT)
b. Initial Bid: Any initial Overbid to the Baseline Bid(s)
will be no less than the value of the Baseline Bid(s)'s Purchase
Price of the Assets, plus $500,000 plus the amount of the Bid
Protections, if such Baseline Bid was a Stalking Horse Bid.
c. Deposit: Each Bid must be accompanied by a cash deposit in
an amount equal to the greater of (a) 10% of the cash portion of
the Purchase Price and (b) $5 million, to be submitted by wire
transfer to an escrow account to be identified and established by
the Debtors.
d. Auction: If the Debtors receive two or more Qualified Bids
with respect to All Assets or the same or similar Asset Package, as
applicable, then the Debtors will conduct the Auction to determine
the Winning Bidder(s) with respect to such Assets. The Auction
will take place at 11:00 a.m. (CT) on Oct. 13, 2020, and will
(unless the Debtors provide notice otherwise) be held
electronically via video/telephone, or at such later date, time or
other place, as selected by the Debtors, in consultation with the
Consultation Parties, or approved by order of the Court. If the
Debtors receive one Qualified Bid with respect to All Assets or the
same or similar Asset Package, as applicable, then the Debtors, in
consultation with the Consultation Parties, may select such
Qualified Bid as the Winning Bid and notify all other Bidders
promptly thereafter.
e. Bid Increments: $500,000
f. Sale Hearing: Oct. 20, 2020 at 3:00 p.m. (CT)
g. Sale Objection Deadline: Oct. 16, 2020 at 5:00 p.m. (CT)
h. The Agent and the DIP Agent will each have the right to
credit bid for the Assets.
The proposed Bid Protections are approved, and the Debtors are
authorized, but not obligated, to (i) select a Stalking Horse
Bidder for substantially all of the Debtors' assets, and to enter
into a Stalking Horse Agreement with such Stalking Horse Bidder,
and (ii) in connection with any Stalking Horse Agreement with a
Stalking Horse Bidder, (a) provide a breakup fee, (b) agree to
reimburse reasonable and documented out-of-pocket fees and
expenses; provided that the aggregate amount that may be paid to a
Stalking Horse Bidder on account of any Breakup Fee will not exceed
3% of such Stalking Horse Bidder's proposed Purchase Price, and
aggregate amount of any expense reimbursement will not exceed
$200,000.
As set forth in the Motion and provided for in the Bidding
Procedures, the Debtors will ask entry of an order, and the
proposed form of order (which may be included as part of a proposed
order to confirm a chapter 11 plan) will be filed on the docket of
these chapter 11 cases no later than Oct. 5, 2020.
The Auction and Sale Notice and Assumption and Assignment
Procedures are approved. On Sept. 21, 2020, the Debtors will file
with the Court, and serve on the Contract Counterparties, the Cure
Notice. Assigned Contract Objections, if any, must comply with the
Assigned Contract Objection Requirements and be filed with the
Court no later than Oct. 5, 2020, at 5:00 p.m. (CT).
Nothing contained in the Motion, the Bidding Procedures Order, or
the Bidding Procedures will affect any rights of ARM Energy
Management LLC, Salt Creek Midstream, LLC, SCM Crude, LLC, Point
Energy Partners Permian, LLC to file a timely objection to the Sale
Transaction.
The requirements of Bankruptcy Rules 6004(h) and 6006(d) are waived
to the extent they apply.
A copy of the Bidding Procedures is available at
https://tinyurl.com/y2ltl75r from PacerMonitor.com free of charge.
About Lilis Energy
Lilis Energy, Inc. -- https://www.lilisenergy.com/ -- is a
publicly-traded, independent oil and natural gas company focused
on
the exploration, development, production, and acquisition of crude
oil, natural gas, and natural gas liquids. Headquartered in Fort
Worth, Texas, Lilis is a pure play Permian Basin company with
focused operations in the Delaware Basin.
Lilis Energy and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-33274)
on
June 28, 2020. As of Dec. 31, 2019, the Debtors had total assets
of $258.6 million and total liabilities of $251.2 million.
Judge David R. Jones oversees the cases.
The Debtors tapped Vinson & Elkins, LLP as legal counsel; Barclays
Capital, Inc., as investment banker and financial advisor; BDO,
USA LLP as accountant and tax advisor; and Stretto as notice,
claims and solicitation agent.
LYONDELLBASELL: Claims in Trustee Suit vs Brown Rudnick Narrowed
----------------------------------------------------------------
Plaintiff Mark E. Holliday, trustee of the LB Litigation Trust,
brings the action captioned MARK E. HOLLIDAY, as Trustee of the LB
Litigation Trust, Plaintiff, v. BROWN RUDNICK LLP, Defendant, No.
19 Civ. 10925 (PAE) (S.D.N.Y) for legal malpractice against
defendant Brown Rudnick LLP. Brown Rudnick represented the Trust in
Weisfelner v. Blavatnik (In re Lyondell Chem. Co.), Adv. Pro. No.
09-1375 (Bankr. S.D.N.Y.), before the Bankruptcy Court for the
Southern District of New York, in which the Trust lost a $300
million preference claim to Access Industries Holdings, LLC.
Holliday alleges that this loss was due to Brown Rudnick's
negligence. He accordingly brings claims against the firm under New
York state law for legal malpractice for loss of the Preference
Claim, legal malpractice for lost settlement value, and breach of
fiduciary duty. Brown Rudnick moves to dismiss the Amended
Complaint.
District Judge Paul A. Engelmayer grants the motion in part and
denies it in part. The Court sustains Holliday's claim of legal
malpractice for loss of the Preference Claim but grants the motion
as to two other claims.
On Nov. 26, 2019, Holliday commenced this action by filing the
initial complaint. On Jan. 15, 2020, Brown Rudnick moved to
dismiss. On Jan. 16, 2020, the Court ordered Holliday to either
amend his complaint or oppose the motion to dismiss. On Feb. 5,
2020, Holliday amended his complaint. On Feb. 26, 2020, Brown
Rudnick filed the present motion to dismiss, along with a
memorandum of law in support, and the declaration of Christopher J.
Clark, Esq., and its attached exhibits. On March 11, 2020, Holliday
filed his memorandum in opposition, and the declaration of Joshua
J. Bruckerhoff, Esq., and its attached exhibit. On March 18, 2020,
Brown Rudnick filed its reply.
According to the Court, to survive a motion to dismiss under FRCP
12(b)(6), a complaint must plead "enough facts to state a claim to
relief that is plausible on its face." A claim will only have
"facial plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged." A complaint is
properly dismissed where, as a matter of law, "the allegations in a
complaint, however true, could not raise a claim of entitlement to
relief."
For the purpose of resolving a motion to dismiss, the Court must
assume all well-pled facts to be true, drawing all reasonable
inferences in favor of the plaintiff. That tenet, however, "is
inapplicable to legal conclusions." A pleading that offers only
"labels and conclusions" or "a formulaic recitation of the elements
of a cause of action will not do."
The Trustee brings three state-law claims against Brown Rudnick:
(1) legal malpractice for loss of the $300 million Preference
Claim; (2) legal malpractice for the lost settlement value related
to the Preference Claim; and (3) breach of fiduciary duty for
refusing to turn over the Trust's client file. Brown Rudnick moves
to dismiss all three claims.
The Trustee also alleges that the error by Brown Rudnick and Anders
Maxwell, an expert Brown Rudnick retained, in using the December
2008 data to value LBI in October 2008 caused the Trust to lose the
Preference Claim. This allegation draws support from the
Bankruptcy Court itself, which held that the use of the December
2008 data was "unpersuasive," and, while noting other problems with
Maxwell's credibility, found that this defect was likely
"independently fatal" to the claim. The Trustee then alleges Brown
Rudnick could have used data from April 2008, which showed Lyondell
to be insolvent, to demonstrate Lyondell's insolvency in October
2008, and that its failure to do so caused the Trust to lose the
Preference Claim.
Construing the facts in Holliday's favor, one could reasonably
infer that without the December 2008 data, the Bankruptcy Court may
have found Maxwell's valuation -- the main piece of evidence
introduced as to the insolvency of LBI and, by extension, of
Lyondell -- more reliable, Judge Engelmayer says.
Brown Rudnick makes two arguments to counter Holliday's claims that
its lawyering caused injury:
(A) Brown Rudnick relies on a statement from the Bankruptcy
Court, which, it contends, shows that Brown Rudnick could succeed
only if it established LBI's insolvency. The Bankruptcy Court, in
finding that Brown Rudnick had failed to show Lyondell was
insolvent in October 2008, stated that "[e]ssential to the
Trustee's. . . preference claim [is] proving that LBI was
insolvent. . . on October 16, 17 and 20 of 2008, when the loan
repayments were made." But it is a mischaracterization of the
Bankruptcy Court's opinion to argue that it held that the only
route available to Brown Rudnick was to prove LBI's insolvency. On
the contrary, later, the Bankruptcy Court held that Lyondell was
the relevant debtor for the Preference Claim analysis, and that
such analysis should be limited only to it. The Bankruptcy Court's
observation that Brown Rudnick needed to prove LBI was insolvent
appears to have been artifact of Brown Rudnick's contested decision
to pursue that theory only, and its consequent failure to offer
evidence of Lyondell's stand-alone insolvency. Given that backdrop,
the Bankruptcy Court appears to have been conveying that it could
find Lyondell to be insolvent only if it extrapolated such
insolvency from Brown Rudnick's evidence as to LBI. Judge
Engelmayer says it declined to do so.
(B) Brown Rudnick argues that Holliday has the burden to show
an affirmative defense would not succeed, and that the lawsuit
failed to do so for Access's ordinary course affirmative defense.
Brown Rudnick is wrong on both fronts. When alleging a prima facie
case for legal malpractice, a plaintiff does not have the burden of
proving that affirmative defenses will fail. And, even if Holliday
did have that burden, the lawsuit adequately pleads that Access'
affirmative defense came up short. Although the Bankruptcy Court
found it unnecessary to rule on Access' affirmative defense, the
lawsuit reasonably alleges that the defense would have failed
because Access did not introduce any direct evidence at trial to
support it.
Judge Engelmayer, however, finds that the lawsuit has adequately
pled attorney negligence and causation. Accordingly, the Court
denies Brown Rudnick's motion as to the malpractice claim based on
the loss of the Preference Claim.
The lawsuit brings a second malpractice claim based on the loss of
settlement value attributable to the Preference Claim. As to this
claim, the lawsuit alleges Brown Rudnick committed malpractice by
failing to inform the Trust Advisory Board of its malpractice with
regard to the litigation of the Preference Claim; instead, it told
the board that the claim had a "good prospect of success." The
lawsuit alleges that, had Brown Rudnick revealed its mistakes and
provided the Trust Advisory Board with candid advice as to the
Preference Claim, the Trust Advisory Board could have settled the
claim.
Brown Rudnick counters that the settlement malpractice claim should
be dismissed because it depends on the first malpractice claim,
which it contends is deficient. Because the Court has found the
first malpractice claim viable, that argument fails, Judge
Engelmayer says.
Brown Rudnick argues it had no duty to inform the Trust Advisory
Board because the Trustee (at the time, Weisfelner) and the Trust
were its clients, and the Trust Advisory Board was not. "It is well
established that, with respect to attorney malpractice, absent
fraud, collusion, malicious acts, or other special circumstances,
an attorney is not liable to third parties, not in privity, for
harm caused by professional negligence."
Brown Rudnick is correct that the lawsuit does not allege an
attorney-client relationship -- or any facts supporting one --
between Brown Rudnick and the Trust Advisory Board. Reinforcing
Brown Rudnick's argument, the lawsuit also references an
"engagement letter," which Brown Rudnick entered into with
Weisfelner in his capacity as trustee. This, too, indicates that
the attorney-client relationship was between them.
In response, Holliday argues only that "Brown Rudnick's assertion
that it did not have to keep the Trust Advisory Board informed of
material matters is baseless." That is non-responsive. It does not
supply the critical missing factual ingredient: an attorney-client
relationship between the Trust Advisory Board and Brown Rudnick.
The Court, therefore, dismisses the malpractice claim based on the
loss of the Preference Claim's settlement value.
Holliday contends that its claim should not be dismissed because
nominal damages could be awarded on this claim. The lawsuit does
not plead damages generally related to this claim and it does not
contain a prayer for nominal damages, Judge Engelmayer says. As
such, the breach of fiduciary duty claim must be dismissed.
A copy of the Court's Opinion and Order dated July 28, 2020 is
available at https://bit.ly/2XYwGi6 from Leagle.com.
About Lyondell Chemical
LyondellBasell Industries is one of the world's largest polymers,
petrochemicals and fuels companies. Luxembourg-based Basell AF and
Lyondell Chemical Company merged operations in 2007 to form
LyondellBasell Industries, the world's third largest independent
chemical company. LyondellBasell became saddled with debt as part
of the US$12.7 billion merger. Len Blavatnik's Access Industries
owned the Company prior to its bankruptcy filing.
On Jan. 6, 2009, LyondellBasell Industries' U.S. operations, led by
Lyondell Chemical Co., and one of its European holding companies --
Basell Germany Holdings GmbH -- filed voluntary petitions to
reorganize under Chapter 11 of the U.S. Bankruptcy Code to
facilitate a restructuring of the company's debts. The case is In
re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No.
09-10023). Seventy-nine Lyondell entities filed for Chapter 11.
Luxembourg-based LyondellBasell Industries AF S.C.A. and another
affiliate were voluntarily added to Lyondell Chemical's
reorganization filing under Chapter 11 protection on April 24,
2009.
Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in
New York, served as the Debtors' bankruptcy counsel. Evercore
Partners served as financial advisors, and Alix Partners and its
subsidiary AP Services LLC, served as restructuring advisors.
AlixPartners' Kevin M. McShea acted as the Debtors' Chief
Restructuring Officer. Clifford Chance LLP served as restructuring
advisors to the European entities.
LyondellBasell emerged from Chapter 11 bankruptcy protection in May
2010, with a plan that provides the Company with US$3 billion of
opening liquidity. A new parent company, LyondellBasell Industries
N.V., incorporated in the Netherlands, is the successor of the
former parent company, LyondellBasell Industries AF S.C.A., a
Luxembourg company that is no longer part of LyondellBasell.
LyondellBasell Industries N.V. owns and operates substantially the
same businesses as the previous parent company, including
subsidiaries that were not involved in the bankruptcy cases.
LyondellBasell's corporate seat is Rotterdam, Netherlands, with
administrative offices in Houston and Rotterdam.
MERCHANT LLC: US Trustee Objects to Disclosures and Plan
--------------------------------------------------------
William K. Harrington, the United States Trustee for Region 2 (the
“United States Trustee”), objects to the Disclosure Statement
and Plan of Reorganization filed by The Merchant, LLC.
United States Trustee asserts that the Disclosure Statement and the
Plan do not clearly explain what obligations the Debtor will have
under the Markour Loan and should be revised to address this.
United States Trustee complains that neither the Disclosure
Statement nor the Plan provide any information or details that
explain how and when Peloquin will provide funds, or how much he
will provide, nor the terms of lending/contributing.
United States Trustee points out that the Disclosure Statement does
not address the potential administrative claim of realtor EJ Murphy
Realty, LLC should the Contract be assumed.
According to United States Trustee, The Disclosure Statement and
the Plan do not provide for a timing or deadline for when the
closing on the Contract will occur.
The United States Trustee asserts that the Debtor's liquidation
analysis does not discuss the Debtor's DIP bank account. This
omission should be addressed.
The United States Trustee complains that the Disclosure Statement
does not provide estimates of the amounts of professional fees that
may be due to Debtor’s counsel and special counsel.
The United States Trustee points out that the Disclosure Statement
does not address the potential administrative claim of realtor EJ
Murphy Realty, LLC should the Contract be assumed.
According to United States Trustee, the Plan at Article V (at
section 5.1, page 10) refers to :releases provided for herein"
despite the fact that the Plan does not appear to contain any
releases.
About The Merchant LLC
The Merchant LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Conn. Case No. 20-50104) on Jan. 24,
2020, listing under $1 million in both assets and liabilities.
Edward P. Jurkiewicz, Esq. at LAWRENCE & JURKIEWICZ represents the
Debtor as counsel.
NEW YORK AVENUE: $2.8M Sale of Two Union City Properties Approved
-----------------------------------------------------------------
Judge John K. Sherwood of the U.S. Bankruptcy Court of the District
of New Jersey authorized New York Avenue, LLC's sale of the
following two real properties: (i) located at 1601-1611 New York
Avenue, Union City, New Jersey to Family 88, LLC for $2.2 million,
pursuant to the terms of the Purchase and Sale Agreement as
amended; and (ii) located at 406 16th Street, Union City, New
Jersey to Xiaoxia Ni for $600,000, pursuant to the terms of the
Purchase and Sale Agreement as amended.
The sale of the Properties is "as is, where is" without any
representations or warranties, pursuant to the terms of the
Agreements, free and clear of all liens, claims, interests and
encumbrances.
The Debtors are authorized and directed to pay all allowed
outstanding real estate taxes and sewer liens at the closing of the
sale of the Properties. They are also authorized to pay the
allowed secured claim of 406 16th Note LLC, or any undisputed
portion thereof, at the time of the closing of the sale of the
Properties.
The 14-day stay provisions of Federal Bankruptcy Rule 6004(h) are
waived.
A copy of the Agreements is available at
https://tinyurl.com/yxt4r839 from PacerMonitor.com free of charge.
About New York Avenue
New York Avenue, LLC, located at 42 Howe Avenue, Wayne, NJ 07470,
is a Single Asset Real Estate debtor.
New York Avenue sought Chapter 11 protection (Bankr. D.N.J. Case
No. 20-14761) on March 22, 2020. The petition was signed by Joseph
Ronandelli, sole member and manager of Deb Associates, LLC, sole
member of Rolling Investments, LLC, which is the sole member of the
Debtor.
The Debtor disclosed total assets of $2.2 million and $1,765,183 in
total debt.
The Debtor tapped John P. Di Iorio, Esq., at Shapiro, Croland,
Reiser, Apfel & Di Iorio, LLP, as counsel.
NORTH AMERICAN LIFTING: Moody's Cuts PDR to D-PD on Bankr. Filing
-----------------------------------------------------------------
Moody's Investors Service downgraded North American Lifting
Holdings, Inc. Probability of Default Rating (PDR) to D-PD from
Ca-PD / LD. Concurrently, Moody's downgraded NALH's Corporate
Family Rating (CFR) to C from Ca and the rating on the company's
senior secured first lien credit facility to Ca from Caa3. Moody's
also affirmed the rating on the company's senior secured second
lien credit facility at C. These actions follow NALH's August 23,
2020 voluntary filing of petitions for relief under Chapter 11 of
the Bankruptcy Code in the United States Bankruptcy Court. The
outlook was changed to stable from negative reflecting the fact
that Moody's views of valuation and recovery are reflected in the
current ratings.
"The sudden decline in overall oil demand due to weak economic
activity from the coronavirus outbreak and the rapid drop in crude
oil prices caused by decisions made by the Organization of
Petroleum Exporting Countries, have materially impacted NALH's end
markets and our expectations of NALH's creditors ability to recover
their investment" said Emile El Nems, a Moody's VP-Senior Analyst.
Downgrades:
Issuer: North American Lifting Holdings, Inc.
Probability of Default Rating, Downgraded to D-PD from Ca-PD / LD
Corporate Family Rating, Downgraded to C from Ca
Senior Secured First Lien Bank Credit Facility, Downgraded to Ca
(LGD3) from Caa3 (LGD3)
Affirmations:
Issuer: North American Lifting Holdings, Inc.
Senior Secured Second Lien Bank Credit Facility, Affirmed to C
(LGD5)
Outlook Action:
Issuer: North American Lifting Holdings, Inc.
Outlook, Changed to Stable from Negative
RATINGS RATIONALE
The Chapter 11 bankruptcy filing has resulted in a downgrade of
NALH's PDR to D-PD, reflecting the company's default on its debt
agreements. In addition, Moody's downgraded the company's CFR to C
from Ca and the senior secured first lien term loan to Ca from Caa3
to reflect Moody's view on expected recovery. Shortly following
this rating action, Moody's will withdraw all of NALH's ratings.
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. The action reflects the
impact on NALH of the deterioration in credit quality it has
triggered, given its exposure to the volatile oil & gas industry,
which has left it vulnerable to shifts in market demand and
sentiment in these unprecedented operating conditions.
The principal methodology used in these ratings was Equipment and
Transportation Rental Industry published in April 2017.
Headquartered in Houston, Texas, and operating under the brand name
"TNT Crane & Rigging," NALH provides lifting equipment rental
services for the oil and gas sector and for commercial,
construction, and industrial end markets in North America. NALH's
customers consist of downstream, midstream, power, and upstream
companies, including refineries and petrochemical facilities.
NORTHERN OIL: To Effect 1-for-10 Reverse Stock Split
----------------------------------------------------
Northern Oil and Gas, Inc. announced a 1-for-10 reverse split of
its common stock. Beginning on Sept. 21, 2020, the Company's
common stock will trade on the NYSE American on a split-adjusted
basis.
At the Company's special meeting of stockholders on Aug. 17, 2020,
the Company's stockholders authorized the Board of Directors to
effect the reverse stock split, with 95% of the shares that voted
approving the reverse stock split.
When the reverse stock split becomes effective, the number of
authorized shares of the Company's common stock will decrease to
135.0 million, while the number of issued and outstanding shares
will be reduced from approximately 436.4 million to approximately
43.6 million (based on shares outstanding as of Aug. 31, 2020). No
fractional shares will be issued following the reverse stock split.
In lieu of any fractional shares, any holder of less than one
share of common stock will be entitled to receive cash for such
holder's fractional share. The reverse stock split will not impact
the authorized number of shares of preferred stock of the Company.
The Company's common stock will continue to trade on the NYSE
American under the symbol "NOG." The new CUSIP number for the
common stock following the reverse stock split is 665531 307.
Registered stockholders holding all of their shares of common stock
electronically in book-entry form do not need to take any action in
connection with the reverse stock split. For those stockholders
holding physical stock certificates, the Company's transfer agent,
EQ Shareowner Services, will send instructions offering holders the
option to surrender such stockholders' current certificates. Any
stockholders that submit their certificates representing pre-split
shares of common stock will have the option to (i) receive a stock
certificate representing their post-split shares of common stock or
(ii) have their post-split shares held electronically in book entry
form.
About Northern Oil
Northern Oil and Gas, Inc. -- http://www.northernoil.com/-- is an
independent energy company engaged in the acquisition, exploration,
development and production of oil and natural gas properties,
primarily in the Bakken and Three Forks formations within the
Williston Basin in North Dakota and Montana.
Northern Oil recorded a net loss of $76.32 million for the year
ended Dec. 31, 2019. As of June 30, 2020, the Company had $1.26
billion in total assets, $1.12 billion in total liabilities, and
$140.73 million in total stockholders' equity.
* * *
As reported by the TCR on April 14, 2020, S&P Global Ratings
lowered its issuer credit rating on Northern Oil and Gas Resources
to 'CCC+' from 'B-'. The outlook is negative. "Our downgrade
reflects the company's tight liquidity and history of distressed
exchanges. The recent collapse in oil prices increases the risk
that the company's reserve-based lending (RBL) facility size could
be reduced at its next bank redetermination, which could further
strain its limited capacity," S&P said.
NPHSS LLC: CALCAP's Ojection to Carmel Property Sale Resolved
-------------------------------------------------------------
Judge Stephen L. Johnson the U.S. Bankruptcy Court for the Northern
District of California has entered the Stipulated Order between
CALCAP Income Fund I, LLC and NPHSS, LLC resolving CALCAP's limited
objection to the Debtor's sale of the real property located at 5
Sand & Sea, Carmel, California to Legatum Holdings, LP or assignee
for $6,532,500, subject to overbid, free and clear of all
interests.
A telephonic hearing was held on Aug. 19, 2020 at 2:00 p.m.
The Secured Creditors of the Property are: Drew Buccino, Fund
Manager CALCAP Income Fund I, LLC as to an undivided
1,415,200/4,815,200 interest; Don Moser Trustee R.I. Properties
Inc., Retirement Plan FBO, as to an undivided 500,000/4,815,200
interest, Louay Alsadek Defined Benefit Pension Plan as to an
undivided 250,000/4,815,200 interest, Charles Edward Cree and Citte
Cree Trustees of the Cree Family Trust Dated Feb. 9, 2011 as to an
undivided 300,000/4,815,200 interest, Steve Ozonian, Trustee and
Lynn Ozonian, Trustee of the Steve and Lynn Ozonian Family Trust as
to an undivided 300,000/4,815,200 interest, Leonard Israel II and
Laura Modena as community property as to an undivided
250,000/4,815,200 interest, Boris Beljak, Trustee of the Brittany
Beljak Descendants Trust as to an undivided 250,000/4,815,200
interest, Michael W. Moser, Trustee of One to Four Inc. Profit
Sharing Plan as to an undivided 1,300,000/4,815,200 interest, John
Justin Malloy and Page C Malloy husband and wife as to an undivided
100,000/4,815,200 interest, and Joseph Mallinger, Trustee of the
Mallinger Family Trust as to an undivided 250,000/4,815,200
interest."
The terms of the Stipulation are granted and made an Order of the
Court.
About NPHSS LLC
NPHSS, LLC, is a single asset real estate debtor (as defined in 11
U.S.C. Section 101(51B)) based in Carmel by the Sea, Calif.
NPHSS filed a Chapter 11 petition (Bankr. N.D. Cal. Case No.
20-50296) on Feb. 19, 2020. The petition was signed by Franklin
Davis Loffer, III, Debtor's managing member. At the time of the
filing, the Debtor was estimated to have assets of between $1
million and $10 million and liabilities of the same range. Judge
Stephen L. Johnson oversees the case. Stanley Zlotoff, Esq., is
the Debtor's bankruptcy counsel.
PIER 1 IMPORTS: $18M Sale of Distribution Center Approved
---------------------------------------------------------
Law360 reports that home decor retailer Pier 1 Imports Inc.
received a Virginia bankruptcy judge's approval to sell a Texas
distribution center for about $18 million in a deal that
significantly improved on a baseline offer from a stalking horse
bidder.
During a hearing conducted via phone and video conferencing, U.S.
Bankruptcy Judge Kevin R. Huennekens approved the sale to Lonejack
II LLC after hearing from the debtor that the transaction
represented the highest and best offer for the assets. Pier 1
attorney Joshua M. Altman of Kirkland & Ellis LLP said Lonestar's
bid added more than $3 million to the purchase price.
About Pier 1 Imports
Founded with a single store in 1962, Pier 1 Imports, Inc.
(OTCPK:PIRRQ) -- http://www.pier1.com/-- is a leading omni-channel
retailer of unique home decor and accessories. Its products are
available through approximately 930 Pier 1 stores in the U.S. and
online at pier1.com.
Pier 1 Imports and seven affiliates sought Chapter 11 protection
(Bankr. E.D. Va. Lead Case No. 20-30805) on Feb. 17, 2020, to
pursue a sale of the assets.
Pier 1 Imports disclosed $426.6 million in assets and $258.3
million in debt as of Jan. 2, 2020.
Judge Kevin R. Huennekens oversees the cases.
A&G Realty Partners is assisting Pier 1 Imports with its previously
announced store closures and lease modifications. Pier 1 Imports
landlords are encouraged to contact A&G Realty Partners through its
website, http://www.agrep.com/
Kirkland & Ellis LLP and Osler, Hoskin & Harcourt LLP serve as
legal advisors to Pier 1 Imports and its affiliated debtors in the
U.S. and Canada, respectively. The Debtors tapped AlixPartners LLP
as restructuring advisor; Guggenheim Securities, LLC as investment
banker; and Epiq Bankruptcy Solutions as claims agent.
PLAQUEMINE BAYOU: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Plaquemine Bayou Parke, L.L.C.
10606 Coursey Blvd., Suite B
Baton Rouge, LA 70816
Business Description: Plaquemine Bayou Parke, L.L.C. classifies
its business as Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: September 2, 2020
Court: United States Bankruptcy Court
Middle District of Louisiana
Case No.: 20-10623
Debtor's Counsel: Tristan Manthey, Esq.
HELLER, DRAPER, PATRICK, HORN & MANTHEY LLC
650 Poydras Street
Suite 2500
New Orleans, LA 70130
Tel: 504-299-3300
Email: tmanthey@hellerdraper.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael D. Kimble, authorized
representative.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/3PXXT7Y/Plaquemine_Bayou_Parke_LLC__lambke-20-10623__0001.0.pdf?mcid=tGE4TAMA
REMINGTON OUTDOOR: Sept. 17 Auction of Substantially All Assets Set
-------------------------------------------------------------------
Judge Clifton R. Jessup, Jr. of the U.S. Bankruptcy Court for the
Eastern District of Kentucky authorized the bidding procedures
proposed by Remington Outdoor Co., Inc., and its affiliated debtors
in connection with the sale of substantially all or a portion of
their assets through one or more sales.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Sept. 4, 2020 at 5:00 p.m. (CT)
b. Initial Bid: The initial Overbid, if any, will provide for
total consideration to the Debtors with a value that exceeds the
value of the consideration under the Auction Baseline Bid by an
incremental amount that is not less than the sum of (x) $500,000
plus (y) the aggregate amount of any Bid Protections, if any,
without duplication, under any Stalking Horse APA applicable to the
assets that are the subject of the Overbid, and each successive
Overbid will exceed the then-existing Overbid by an incremental
amount that is not less than the Minimum Overbid Increment. In
considering the value of any Overbid, the Debtors will take into
account the effect of the Bid Protections.
c. Deposit: 10% of the cash consideration offered in a Bid
d. Auction: The Auction will take place on Sept. 17, 2020 at
10:00 a.m. (CT) virtually via video conferencing technology, or at
such other place and time as the Debtors will notify all Qualified
Bidders and the Consultation Parties.
e. Bid Increments: $500,000
f. Sale Hearing: Sept. 23, 2020 at 10:00 a.m. (CT)
g. Sale Objection Deadline: Sept. 1, 2020 at 4:00 p.m. (CT)
h. Any of the Acquired Assets sold pursuant to the Bidding
Procedures will be sold free and clear of all liens claims and
encumbrances.
In accordance with the Bidding Procedures, the Debtors may
designate one or more Stalking Horse Bidders for the various
segments of their business and may enter into an asset purchase
agreement with each Stalking Horse Bidder, subject to higher or
otherwise better offers at the Auction, which establishes a minimum
Qualified Bid at the Auction with respect to the assets that are
the subject thereof.
Absent further order of the Court, the Stalking Horse APA will (i)
limit the break-up fee in favor of the Stalking Horse Bidder in the
amount of no more than 3.5% of the cash consideration proposed to
be paid at closing by the Stalking Horse Bidder; (ii) limit the
Expense Reimbursement to an amount not to exceed 1% of the cash
consideration proposed to be paid by at closing the Stalking Horse
Bidder; and/or (iii) set the initial overbid protection in amounts
to be determined by the Debtors in accordance with the Bidding
Procedures.
In the event that the Debtors determine that the Bid Protections
must exceed the amounts set forth herein, the Court will hold a
hearing on the approval of any such greater Bid Protections on an
expedited basis, upon the request of the Debtors.
Subject to the foregoing, the Bid Protections will be paid (i) in
cash from the proceeds of any approved Sale or (ii) credited
against the purchase price if, after an Auction, the Stalking Horse
Bid, as enhanced at the Auction, is the Successful Bid and the Sale
contemplated by the Stalking Horse APA (as enhanced at the auction)
is consummated.
The form of Sale Notice is approved. Within seven days after the
entry of the Bidding Procedures Order or as soon as reasonably
practicable thereafter, the Debtors will serve the Sale Notice and
the Bidding Procedures Order upon all such Notice Parties.
The form of the Post-Auction Notice is also approved.
The Assumption and Assignment Procedures and the Notice of
Assumption and Assignment are approved.
On Aug. 21, 2020, the Debtors will file with the Court, and post on
the Case Website at https://cases.primeclerk.com/RemingtonOutdoor,
the Notice of Assumption and Assignment and Designated Contracts
List. The Assumption and Assignment Objection Deadline is no later
than 4:00 p.m. (CT) 14 days following the Assumption and Assignment
Service Date.
Notwithstanding the possible applicability of Bankruptcy Rules
6004(h), 6006(d), 7062, 9014, or otherwise, the Court ordered that
the terms and conditions of the Bidding Procedures Order will be
immediately effective and enforceable upon its entry.
A copy of the Bidding Procedures is available at
https://tinyurl.com/yy8d9vwz from PacerMonitor.com free of charge.
About Remington Outdoor Company
Based in Madison, North Carolina, Remington Outdoor Company, Inc.
-- https://www.remingtonoutdoorcompany.com/ -- manufactures and
markets firearms, ammunition, and related products for commercial,
military, and law enforcement customers worldwide. The company
operates through two segments, Firearms and Ammunition.
Remington Outdoor Company, Inc., and its affiliates filed their
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ala. Lead Case No. 20-81688) on July 27, 2020.
The petitions were signed by Ken D'Arcy, chief executive officer.
At the time of filing, the Debtors estimated $100 million to $500
million in both assets and liabilities.
Stephen H. Warren, Esq. and Karen Rinehart, Esq. at O'MELVENY &
MYERS LLP represent the Debtors as general bankruptcy counsel.
Derek F. Meek, Esq. and Hanna Lahr, Esq. at BURR & FORMAN LLP
stand
as the Debtors' local counsel.
AKIN GUMP STRAUSS HAUER & FELD LLP is the Advisor to the
Restructuring
Committee. M-III ADVISORY PARTNERS, LP is the Debtors' financial
advisor, while DUCERA PARTNERS LLC, stands as the Debtors'
investment banker. PRIME CLERK LLC is the Debtors' notice, claims
&
balloting agent.
RENNOVA HEALTH: Investors Shrink Their Debenture Holdings by $19.3M
-------------------------------------------------------------------
Rennova Health, Inc., entered into Exchange, Redemption and
Forbearance Agreements with certain institutional investors in the
Company. In the Agreements, the investors agreed to reduce their
holdings of the Company's debentures by approximately $19.3 million
(including accrued interest and penalties) by exchanging the
debentures and all of the outstanding shares of the Company's
Series I-1 Convertible Preferred Stock and Series I-2 Convertible
Preferred Stock for 30,435 shares of the Company's newly-authorized
Series N Convertible Redeemable Preferred Stock. Christopher
Diamantis, a former director of the Company, is also a party to the
Agreements as he continues to be a guarantor of a portion of the
remaining debt.
The investors will continue to own, after the initial exchange,
approximately $14.9 million (including accrued interest and
penalties) of debentures, but have agreed that the Company could
redeem $10 million of its obligations under these debentures held
by the investors at face value, plus accrued interest and
penalties. These debentures include approximately $5.0 million
under debentures that have been guaranteed by Mr. Diamantis. This
redemption right is exercisable for 90 days. If it is exercised in
full, the remaining debentures held by the investors (totaling
approximately $4.9 million, including accrued interest and
penalties) will be exchanged for approximately 4,900 additional
shares of Series N Preferred Stock.
During the 90-day redemption period (or until the occurrence of
certain specified events, if earlier), the investors will forbear
from exercising any remedies against the Company or Mr. Diamantis
as a result of any existing defaults under the outstanding
securities. During that period, additional interest and penalties
will not accrue and will be forgiven if the redemption right is
exercised in full. If the redemption right is not exercised in
full, all such additional amounts will become due and payable.
The shares of Series N Preferred Stock were issued in reliance on
the exemption from registration contained in Section 3(a)(9) of the
Securities Act of 1933, as amended.
"This reduction of secured debt is a significant step in the final
phase of our restructure," said Seamus Lagan, CEO of Rennova
Health. "After our recent reverse split the improvement in our
balance sheet and reduction of ongoing penalties and charges as a
result of this transaction will create a much clearer picture for
our shareholders and investors and should facilitate access to
additional capital as may be required to improve and expand the
Company's business strategy. We look forward to providing
additional updates of progress of our business strategy, including
the separation of our software division in the coming days."
About Rennova Health
Rennova Health, Inc. -- http://www.rennovahealth.com/-- operates
three rural hospitals in Tennessee and provides diagnostics and
supportive software solutions to healthcare providers.
Rennova Health reported a net loss to common shareholders of $171.9
million for the year ended Dec. 31, 2019, compared to a net loss to
common shareholders of $245.87 million for the year ended Dec. 31,
2018. As of June 30, 2020, the Company had $15.21 million in total
assets, $68.90 million in total liabilities, $5.83 million in
redeemable preferred stock - Series I-1, $1.79 million in
redeemable preferred stock - Series I-2, and a total stockholders'
deficit of $61.31 million.
Haynie & Company, in Salt Lake City, Utah, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated June 25, 2020, citing that the Company has recognized
recurring losses, negative cash flows from operations, and
currently has minimal revenue producing activities. This raises
substantial doubt about the Company's ability to continue as a
going concern.
RENNOVA HEALTH: Posts $1.03 Million Net Loss in Second Quarter
--------------------------------------------------------------
Rennova Health, Inc., filed with the Securities and Exchange
Commission its quarterly report on Form 10-Q disclosing a net loss
available to common shareholders of $1.03 million on $2.07 million
of net revenues for the three months ended June 30, 2020, compared
to a net loss available to common shareholders of $13.42 million on
$4.06 million of net revenues for the three months ended June 30,
2019.
For the six months ended June 30, 2020, the Company reported a net
loss available to common shareholders of $6.82 million on $3.91
million of net revenues compared to a net loss available to common
shareholders of $150.73 million on $9.25 million of net revenues
for the same period in 2019.
As of June 30, 2020, the Company had $15.21 million in total
assets, $68.90 million in total liabilities, $5.83 million in
redeemable preferred stock - Series I-1, $1.79 million in
redeemable preferred stock - Series I-2, and a total stockholders'
deficit of $61.31 million.
The Company had a working capital deficit and an accumulated
deficit of $61.2 million and $593.8 million, respectively, at June
30, 2020. In addition, the Company had a loss from continuing
operations of approximately $3.6 million and cash used in operating
activities of $9.1 million for the six months ended June 30, 2020.
As of Aug. 13, 2020 (the date of this report), payments for the
Company's operations in the ordinary course are not being made.
The Company said the continued losses and other related factors,
including the defaults under the terms of outstanding debentures,
for which it has received a payment demand notice, raise
substantial doubt about the Company's ability to continue as a
going concern for twelve months from the filing date of this
report.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/931059/000149315220015569/form10-q.htm
About Rennova Health
Rennova Health, Inc. -- http://www.rennovahealth.com/-- operates
three rural hospitals in Tennessee and provides diagnostics and
supportive software solutions to healthcare providers.
Rennova Health reported a net loss to common shareholders of $171.9
million for the year ended Dec. 31, 2019, compared to a net loss to
common shareholders of $245.87 million for the year ended Dec. 31,
2018. As of June 30, 2020, the Company had $15.21 million in total
assets, $68.90 million in total liabilities, $5.83 million in
redeemable preferred stock - Series I-1, $1.79 million in
redeemable preferred stock - Series I-2, and a total stockholders'
deficit of $61.31 million.
Haynie & Company, in Salt Lake City, Utah, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated June 25, 2020, citing that the Company has recognized
recurring losses, negative cash flows from operations, and
currently has minimal revenue producing activities. This raises
substantial doubt about the Company's ability to continue as a
going concern.
RGN-CHEVY CHASE I: Case Summary & Unsecured Creditor
----------------------------------------------------
Debtor: RGN-Chevy Chase I, LLC
3000 Kellway Drive
Suite 140
Carrollton, TX 75006
Business Description: RGN-Chevy Chase I, LLC is primarily engaged
in renting and leasing real estate
properties.
Chapter 11 Petition Date: September 2, 2020
Court: United States Bankruptcy Court
District of Delaware
Case No.: 20-12060
Debtor's Counsel: Patrick A. Jackson, Esq.
FAEGRE DRINKER BIDDLE & REATH LLP
222 Delaware Avenue, Suite 1410
Wilmington, Delaware 19801
Tel: (302) 467-4200
Email: Patrick.Jackson@faegredrinker.com
Debtor's
Financial
Advisor: ALIXPARTNERS
Debtor's
Restructuring
Advisor: DUFF & PHELPS, LLC
Total Assets as of July 31, 2020: $644,921
Total Liabilities as of July 31, 2020: $3,217,045
The petition was signed by James S. Feltman, responsible officer.
The Debtor listed JBG BC Chase Tower LP as its sole unsecured
creditor holding a claim of $5,742.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/VQ7NP7Q/RGN-Chevy_Chase_I_LLC__debke-20-12060__0001.0.pdf?mcid=tGE4TAMA
RGN-PHILADELPHIA IX: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: RGN-Chevy Chase I, LLC
3000 Kellway Drive
Suite 140
Carrollton, TX 75006
Business Description: RGN-Philadelphia IX, LLC is a privately held
company that is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: September 2, 2020
Court: United States Bankruptcy Court
District of Delaware
Case No.: 20-12061
Debtor's Counsel: Patrick A. Jackson, Esq.
FAEGRE DRINKER BIDDLE & REATH LLP
222 Delaware Avenue, Suite 1410
Wilmington, Delaware 19801
Tel: (302) 467-4200
Email: Patrick.Jackson@faegredrinker.com
Debtor's
Financial
Advisor: ALIXPARTNERS
Debtor's
Restructuring
Advisor: DUFF & PHELPS, LLC
Total Assets as of July 31, 2020: $1,470,886
Total Liabilities as of July 31, 2020: $1,493,672
The petition was signed by James S. Feltman, responsible officer.
The Debtor filed an empty list of its 20 largest unsecured
creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/VZ6VAFI/RGN-Philadelphia_IX_LLC__debke-20-12061__0001.0.pdf?mcid=tGE4TAMA
ROCHESTER DRUG: Plan Payments to be Funded by Asset Sale Proceeds
-----------------------------------------------------------------
Rochester Drug Cooperative, Inc., filed with the U.S. Bankruptcy
Court for the Western District of New York a Chapter 11 Plan of
Liquidation and a Disclosure Statement on July 21, 2020.
The Plan is predicated on the sales of certain of the Debtor's
assets, the liquidation of remaining assets, and the collection of
accounts receivable. The Plan will be implemented through this
process and the Debtor will make distributions from the proceeds as
set forth in the Plan.
The Plan contemplates the payment in full in cash of all
Administrative Claims, Fee Claims, U.S. Trustee Fees against the
Debtor, unless the holders of such claims agree otherwise to less
favorable treatment. The M&T Bank Claim and USA Claim will be paid
in accordance of with the M&T Bank Distributions and USA
Distributions, respectively. The Unsecured Priority Claims and
Unsecured Claims will be paid pursuant to the terms of the Plan and
the Liquidation Trust Agreement to be implemented by the Committee.
The primary objectives of the Plan are: (i) to provide a mechanism
for Distribution of the remaining proceeds of the sales of the
assets for the benefit of the Estate; (ii) completing the
liquidation of the Debtor's remaining Assets, including, for
example, Avoidance Actions and Causes of Action held by, or in
favor of, the Debtor; (iii) reconciling and fixing the Claims
asserted against the Debtor; and (iv) distributing the net
liquidation proceeds in conformity with the Distribution scheme
provided by the Bankruptcy Code. The Debtor is in the process of
selling a substantial portion of the Debtor's assets to third
parties. The balance of the Assets will be administered pursuant
to the terms of the Liquidation Trust Agreement.
The Debtor intends to sell or otherwise dispose of its remaining
assets and wind down its affairs consistent with the Plan. The
Debtor, the Committee and M&T Bank have approved the Plan and the
transactions contemplated thereby and recommend that all creditors
whose votes are being solicited submit ballots to accept the Plan.
On July 17, 2020, the Bankruptcy Court approved that certain
Settlement Agreement dated June 22, 2020 ("Global Settlement
Agreement") entered into by and among the Debtor, the Committee,
M&T Bank, and the USA (collectively, the "Settlement Parties").
The Settlement Parties agreed that (i) the Fairfield Facility and
the Rochester Facility will be sold and (ii) the net proceeds of
the sales shall be distributed within ten business days after
closing.
Class 4 consists of all Allowed Unsecured Claims and the USA
Unsecured Claim. As of the date of this Disclosure Statement, the
aggregate asserted Unsecured Claims total $123,000,000. This total
could increase as additional claims are filed by the July 31, 2020
general bar date and the Sept. 8, 2020 bar date for governmental
entities. Each holder of an allowed unsecured claim will be
entitled to receive such holder's pro rata share of the Liquidating
Trust Assets.
At this time, the Debtor and the Committee are unable to project
the distribution to holders of Allowed Class 4 Claims. The
distribution is dependent upon multiple factors, including, but not
limited to, the collection of remaining receivables and the outcome
of litigation against third parties. Subject to the USA
Distribution Cap, each holder of an Allowed Class 4 Unsecured Claim
must be paid in full, prior to any Distribution to any holder of an
Interest in Class 5.
Class 5 consists of all holders of interests in the Debtor.
Holders of Class 5 Interests will not receive any distribution on
account of such Interest unless all holders of Allowed Class 4
Claims are paid in full. In light of the magnitude of the Class 4
Unsecured Claims, it is unlikely that holders of Class 5 Interests
will receive any distributions in the Chapter 11 case.
A full-text copy of the Disclosure Statement dated July 21, 2020,
is available at https://tinyurl.com/y5ec8hl3 from PacerMonitor at
no charge.
Counsel to the Debtor:
BOND, SCHOENECK & KING, PLLC
Stephen A. Donato, Esq.
Camille W. Hill, Esq.
One Lincoln Center
Syracuse, New York 13202-1355
Telephone: (315) 218-8000
Facsimile: (315) 218-8100
E-mail: sdonato@bsk.com
chill@bsk.com
About Rochester Drug Co-Operative
Rochester Drug Cooperative, Inc., is an independently owned New
York cooperative corporation formed in 1905 and incorporated in
1948 with a principal office and place of business located at 50
Jet View Drive, Rochester, New York 14624. Its principal business
is to warehouse, merchandise, and then distribute, on a cooperative
basis, drugs, pharmaceutical supplies, medical equipment and other
merchandise commonly sold in drug stores, pharmacies, health and
beauty stores, and durable medical equipment business. It is a
wholesale regional drug cooperative that operates as both a buying
cooperative and a traditional drug distribution company created for
the purpose of helping independent pharmacies compete in the
current healthcare environment.
Rochester Drug Cooperative sought Chapter 11 protection (Bankr.
W.D.N.Y. Case No. 20-20230) on March 12, 2020.
The Debtor was estimated to have $50 million to $100 million in
assets and $100 million to $500 million in liabilities.
The Hon. Paul R. Warren is the case judge.
The Debtor tapped Bond, Schoeneck & King, PLLC, led by Stephen A.
Donato, as counsel and Epiq Corporate Restructuring, LLC, as claims
and noticing agent.
RUBIE'S COSTUME: Sept. 17 Auction of Substantially All Assets Set
-----------------------------------------------------------------
Judge Alan S. Trust of the U.S. Bankruptcy Court for the Eastern
District of New York authorized bidding procedures proposed by
Rubie's Costume Co., Inc. and its debtor affiliates in connection
with the sale of substantially all assets to a joint venture of a
multi-billion-dollar investment fund and a strategic operator,
subject to overbid.
The total Purchase Price is comprised of: (i) the payment by the
Buyer and/or NewCo of the full amount of the estates' indebtedness
under the DIP Loan (as of the closing date, anticipated to be
approximately $45 million, plus interest and fees) and to the
Debtors' pre-petition lenders, the Bank Group (approximately
$35,725,000, plus interest and fees) plus pay or assume the $5
million SWAP liability as well as replace $11.7 million of undrawn
letters of credit; (ii) the Buyer and/or NewCo's assumption of all
post-petition non-professional obligations of the Debtors' estates;
and (iii) NewCo will pay the Debtors' estates $2 million for the
payment of the estates’ creditors pursuant to the provisions of a
plan of liquidation.
The Procedures Hearings were held on Aug. 10, 2020 and Aug. 18,
2020.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Sept. 16, 2020, at 12:00 p.m. (EST)
b. Initial Bid: A value greater than the sum of (i) the Cash
Consideration of the Debtors' selected Stalking Horse Bid (ii) the
amount outstanding under the DIP Loan and the Bank Group
Indebtedness; (ii) the Break-Up Fee, (iii) the Expense
Reimbursement, (iv) any assumed liabilities contained in the
Stalking Horse Bid, and (v) a minimum Bid increment of $2 million
c. Deposit: $2 million
d. Auction: In the event more than one Qualified Bid is timely
received, the Auction will commence at 10:00 a.m. (EST) on Sept.
17, 2020, or such later time or other place or in such other manner
(including a virtual auction via phone, video or Zoom Conference)
as decided by the Debtors, and the Debtors will notify all
Qualified Bidders of any such later time or place.
e. Bid Increments: $1 million
f. Sale Hearing: Sept. 23, 2020 at 10:00 a.m. (EST)
g. Sale Objection Deadline: Sept. 18, 2020 at 10:00 a.m.
(EST)
h. Break-up Fee: 3% of the purchase price
i. Expense Reimbursement: $500,000
Consistent with the Bid Procedures, the Debtors are authorized to
designate the Buyer as the Stalking Horse Bidder pursuant to the
Purchase Agreement.
The Bid Protections are authorized by the Order and become payable
only upon consummation of an Alternate Transactio and solely from
the proceeds of such Alternate Transaction without further action
or order by the Court. The Bid Protections are payable to the
Buyer solely in accordance with the Bid Procedures Order. The
Buyer has no entitlement to the Bid Protections unless an Alternate
Transaction is consummated.
Upon the entry of an order approving a sale of all of the Acquired
Assets to an entity other than the Stalking Horse Bidder, the
Debtors will be required to pay to the Buyer, within five business
days of the clearance of the proceeds of the Sale into the Debtors'
estates' account(s): (i) 3% of the purchase price set forth in the
Purchase Agreement; and (ii) the Stalking Horse Bidder's reasonable
documented expenses up to $500,000.
The Sale Notice is approved. Within three business days of the
entry the Order, the Debtors will cause: (i) a copy of the Sale
Notice to be served on all Notice Parties; and (ii) a copy of the
Bidding Procedures, the Sale Notice and the Order to be served upon
the Procedures Notice Parties and all Potentially Interested
Parties.
The form of (i) the Notice of Proposed (i) Assumption and
Assignment of Executory Contracts and Cure Amount; and (ii) the
Notice of Rejection of Executory Contracts and/or Unexpired Leases,
are approved.
The Debtors will file a copy of the Schedule of Assigned Contracts
with the Court no later than Aug. 21, 2020 and will concurrently
serve, as applicable, the Assumption Notice and Assumption Schedule
upon all counterparties to the Assigned or Rejected Contracts and
the Procedures Notice Parties. The Cure Objection Deadline is
Sept. 9, 2020 at 4:00 p.m.
Notwithstanding Bankruptcy Rules 6004(g) and 6006(d), the Order
will not be stayed for 14 days after its entry and will be
effective and enforceable immediately.
A copy of the Bidding Procedures is available at
https://tinyurl.com/y54shnob from PacerMonitor.com free of charge.
About Rubie's Costume Company
Rubie's Costume Company Inc. is a distributor, manufacturer and
designer of costume and party-related accessories that serve over
2,000 retail accounts. It also maintains licensing partnerships
with top studios like Nickelodeon, Warner Bros, Lucasfilm, Marvel,
and Disney for products inspired by WWE, Ghostbusters, Stranger
Things, DC Comics, JoJo Siwa, Harry Potter, and Star Wars.
Rubie's Costume Company and its affiliates sought Chapter 11
protection (Bankr. E.D.N.Y. Lead Case No. 20-71970) on April 30,
2020. Rubie's Costume was estimated to have $100 million to $500
million in assets and $50 million to $100 million in liabilities
as
of the filing.
Judge Alan S. Trust oversees the cases.
Debtors have tapped Meyer, Suozzi, English & Klein, P.C. and
Togut,
Segal & Segal LLP as bankruptcy counsel; BDO USA, LLP as
restructuring advisor; and SSG Capital Advisors LLC as investment
banker. Kurtzman Carson Consultants is the claims agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on May 18, 2020. The committee is represented by Arent
Fox, LLP.
SEA OAKS: Sept. 9 Auction of Substantially All Assets Set
---------------------------------------------------------
Judge Christine M. Gravelle of the U.S. Bankruptcy Court for the
District of New Jersey authorized the bidding procedures proposed
by Sea Oaks Country Club, LLC and Sea Oaks Golf Club, LLC in
connection with the sale of substantially all of their assets to
Atlantic Homes, Inc. for $3 million, plus the Assumed Liabilities,
subject to overbid.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Sept. 8, 2020 at 5:00 p.m. (EDT)
b. Initial Bid: The aggregate consideration proposed by the
Qualifying Bidder must equal or exceed the sum of the amount of (A)
the purchase price under the Stalking Horse Agreement, plus (B)
$100,000 of the purchase price under the Stalking Horse Agreement
c. Deposit: An amount equal to the greater of $100,000 or 10%
of the total consideration provided under the proposed Transaction
Agreement
d. Auction: The auction will be conducted on Sept. 9, 2020 at
2:00 p.m. and will occur via Court Solutions. It will be necessary
to obtain an account from Court Solutions which can be arranged at:
https://www.court-solutions.com/Signup. At least 10 minutes prior
to the Auction Time, a participant must sign in through Court
Solutions. He will need to fill in the following information: (i)
name of judge; (ii) the Auction Time; (iii) the Case Number
(20-17229).
e. Bid Increments: $100,000
f. Sale Hearing: Sept. 9, 2020 immediately following the
Auction
g. Atlantic has the right to credit bid up to the full amount
of its prepetition claim against Golf Club, provided, however, that
not less than $200,000 of its bid will be allocated to the Liquor
License owned by Country Club and must be paid in cash.
No break-up fee or similar payment will be allowed in connection
with the sale.
A copy of the Bidding Procedures is available at
https://tinyurl.com/y69crop9 from PacerMonitor.com free of charge.
About Sea Oaks Country Club
Sea Oaks Golf Club LLC is a golf resort that offers 18 Hole
semi-private golf course that is open to the public, Golf Shop,
Restaurant & Grill Room. Sea Oaks Country Club LLC manages the
golf course and leases the property from Sea Oaks Golf Club.
Sea Oaks Country Club and Sea Oaks Golf Club sought Chapter 11
bankruptcy protection (Bankr. D.N.J. Lead Case No. 20-17229) on
June 3, 2020.
Joseph Mezzina, managing member of J & J Partnership, signed the
petitions.
Sea Oaks Country Club disclosed $344,900 in assets and $12.92
million in liabilities. Sea Oaks Golf Club reported assets of
about $5.3 million in a Chapter 11 filing.
Timothy P. Neumann of Broege Neumann Fischer & Shaver, LLC, serves
as counsel to the Debtor.
SHADDEN LLC: $1.8M Sale of Greenwood Village Property to Wumr OK'd
------------------------------------------------------------------
Judge Kimberley H. Tyson of the U.S. Bankruptcy Court for the
District of Colorado approved Shadden, LLC's Contract to Buy and
Sell Real Estate (Residential) with Scott Wurm for the sale of its
real property and improvements located at 9689 E. Prentice Circle,
Greenwood Village, Colorado for $1.8 million.
The sale is free and clear of all liens, claims and encumbrances,
with such liens, claims, and encumbrances to attach to the proceeds
of the sale.
The Debtor is authorized to pay necessary costs of closing, realtor
commissions, and distribute funds to creditors as follows:
a. Hunter-Kelsey I, LLC: $1.56 million
b. Arapahoe County Treasurer: $15,550
c. Payment of unredeemed liens to Arapahoe County Treasurer in
the amount of approximately $28,554
d. Payment of pro-rated real property taxes for 2020 to the
Arapahoe County Treasurer: $10,099
e. Denver Water: $5,751
f. Realtor commissions of approximately $40,000 to 60,000
g. Title insurance: $2,939
h. Title escrow fee: $180
The remaining funds will be held in trust by Kutner Brinen, P.C.
pending furtherorder from the Court.
A copy of the Contract is available at https://tinyurl.com/y4clscob
from PacerMonitor.com free of charge.
About Shadden LLC
Shadden LLC sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Colo. Case No. 19-18726) on Oct. 8, 2019. At the
time of the filing, the Debtor had estimated assets of less than
$50,000 and liabilities of between $1 million and $10 million.
The
case has been assigned to Judge Kimberley H. Tyson. The Debtor
tapped Keri L. Riley, Esq., at Kutner Brinen, P.C. as its legal
counsel.
SHALE FARM: $19K Sale of Lee Road Property to Marszalek Approved
----------------------------------------------------------------
Judge Suzanne H. Bauknight of the U.S. Bankruptcy Court for the
Eastern District of Tennessee authorized Shale Farms, LLC's sale of
the following unimproved farm land located on Lee Road in Greene
County, Tennessee: Lot 53, comprising 1 acre, to Mark Marszalek for
$19,000, free and clear of liens.
The Lot/Land Purchase and Sale Agreement for the sale of real
property is approved and the Debtor is authorized to proceed with
closing on the sale of the real property.
The payment of the realtor's commission and normal expenses and
charges is also approved.
The 14-day stay period of FRBP 2006(h) is waived for cause.
The bankruptcy case is In re Shale Farms, LLC (Bankr. E.D. Tenn.
Case No. 3:20-bk-31787-SHB).
SHURMA ENTERPRISES: Unsecureds to Get $500 Per Month for 5 Years
----------------------------------------------------------------
Shurma Enterprises, Inc. filed with the U.S. Bankruptcy Court for
the Eastern District of Texas, Sherman Division, a Plan of
Reorganization and a Disclosure Statement on July 21, 2020.
The Debtor proposes to restructure its current indebtedness and
continue its operations to provide a dividend to the unsecured
creditors of Debtor
Class 6 allowed unsecured creditors will share pro rata in the
unsecured creditors pool. The Debtor will make monthly payments
commencing on the Effective Date of $500 into the unsecured
creditors' pool. The Debtor will make distributions to the Class 6
creditors every 90 days commencing 90 days after the Effective
Date. The Debtor will make a total of 60 payments into the
unsecured creditors pool with the first payment being made on the
Effective Date. Debtor may prepay any Class 6 Claim at any time
without penalty.
Class 7 Current Owners are not impaired under the Plan. The
current owners will receive no payments under the Plan on account
of their ownership interest, however, they will be allowed to
retain their ownership in the Debtor.
The Debtor anticipates the continued operations of the business to
fund the Plan.
A full-text copy of the Disclosure Statement dated July 21, 2020,
is available at https://tinyurl.com/yyc83q4q from PacerMonitor at
no charge.
About Shurma Enterprises
Shurma Enterprises, Inc., operator a dry cleaners in Carrollton,
Texas. Shurma filed a Chapter 11 petition (Bankr. E.D. Tex. Case
No. 20-40203) on Jan. 23, 2020.
Proposed attorneys for the Debtor:
Eric A. Liepins
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
SILVER LAKES: Stipulation with County Consenting Property Sale OK'd
-------------------------------------------------------------------
Judge Mark S. Wallace of the U.S. Bankruptcy Court for the Central
District of California approved the Stipulation between Silver
Lakes Resort Lodge Interval Owners Association and County of San
Bernardino governing the conditions under which the County is
consenting to the Debtor's sale of its principal asset, the real
and personal property commonly known as the Inn at Silver Lakes,
located at 14818 Clubhouse Drive, Helendale, California, and
associated furniture and fixtures, to Mars Hospitality, LLC for
$650,000, cash, subject to higher and better offers.
A telephonic hearing on the Motion was held on Aug. 18, 2020 at
2:00 p.m.
The Property is a 62-unit timeshare hotel in Helendale, California.
The units were initially condominiums, some, but not all of which
were divided into deeded timeshare weeks recorded as a 1/51
undivided interest as a tenant in common in a specific condominium.
The Debtor owns the common areas (including all of the fixtures
and the furniture) for the benefit of the timeshare owners, one
maintenance week for each unit, and all of the intervals that
either remained unsold or were taken back by the association. The
Debtor proposes to sell the Property of the estate, as well as the
fractional interval interests in the condominiums owned by the
timeshare holders, free and clear of such interests.
About Silver Lakes Resort
Lodge Interval Owners Association
Silver Lakes Resort Lodge Interval Owners Association is an
association of owners of The Inn at Silver Lakes, a resort in
Southern California that is affiliated with RCI and Interval
International. See https://www.innatsilverlakes.com/
Silver Lakes Resort Lodge Interval Owners Association sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Case No. 19-16352) on July 20, 2019. In the petition signed by
Edgar A. Darden, V.P. & chief restructuring officer, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities.
The case is assigned to Judge Mark S. Wallace.
Teresa A. Blasberg, Esq., at BLASBERG & ASSOCIATES, represents the
Debtor.
SPIRIT AIRLINES: Moody's Assigns B1 CFR, Outlook Negative
---------------------------------------------------------
Moody's Investors Service assigned first time ratings to Spirit
Airlines, Inc.: B1 corporate family rating, B1-PD probability of
default rating and SGL-2 speculative grade liquidity. The ratings
outlook for Spirit is negative. Moody's also assigned a Ba3 rating
to the senior secured notes due 2025 that Spirit announced on
August 31, 2020. The issuer of the Notes, Spirit IP Cayman Ltd. and
co-issuer Spirit Loyalty Cayman Ltd. are new, wholly-owned,
indirect, bankruptcy-remote, special purpose entity subsidiaries of
Spirit. The rating outlook for Spirit IP Cayman Ltd. is stable.
Spirit and the respective, newly created intermediate holding
companies that will own the co-issuers will guarantee the Note
obligations.
RATNGS RATIONALE
SENIOR SECURED NOTES TRANSACTION
Spirit will contribute its brand intellectual property and its Free
Spirit affinity credit card program and its $9 Fare Club program
assets and intellectual property (together, "loyalty program") to
the newly created entities to facilitate the Notes transaction. The
co-issuers will license these assets to their holding companies;
these entities will sub-license the assets to Spirit. The loyalty
assets will be licensed on a royalty-free basis. Spirit will pay a
license fee of the greater of $45 million or 2% of annual revenue
for the brand assets. Cash flows from the company's sale of miles
to its co-brand program partners -- lead partner Bank of America
accounts for about 90% of miles purchased -- and the brand royalty
payments will fund the interest-only debt service of the Notes.
There will be no amortization of principal during the Notes'
five-year term. The brand and loyalty assets, the license and
sub-license agreements, the transaction's cash accounts and the
equity interests of the intermediate holding companies and of the
co-issuers will secure the Note obligations.
The Ba3 rating on the Notes reflects the strategic importance of
the Spirit brand and related intellectual property ("IP") to the
company and the benefits of the loyalty program to Spirit's
day-to-day operations and cash flows, balanced by an expected
relatively low recovery if the collateral ever needed to be
monetized to pay off the notes. The importance of the brand will
cause Spirit to continue to make the sub-license fee payments were
it to file for a reorganization under Chapter 11 of the US
Bankruptcy Code. The rating also considers the cash contributions
of the loyalty program to the company's operating cash flows,
which, together with the brand sub-license fees, will support the
debt service due on the Notes. Under a Spirit bankruptcy scenario,
the transaction's terms will require Spirit to file a motion within
ten days of a proceeding to assume the loyalty program sub-license
pursuant to Section 365 of the Bankruptcy Code. The company will
not be required to do the same for the brand sub-license; rather it
would seek administrative expense status for the brand sub-license
fees in its Day 1 motions to the bankruptcy court, to allow these
payments to also continue unimpeded.
The Notes rating, one notch above the B1 corporate family rating,
also reflects Moody's assumption of a lower probability of default
relative to that of the company's other senior secured debt
obligations.
The stable outlook on the Notes rating reflects Moody's expectation
that the transaction's cash flows will remain sufficient to
comfortably service the interest expense while demand for passenger
air travel remains depressed because of the coronavirus and the
potential to hold, at least initially, the Ba3 rating even if
Moody's was to downgrade the corporate family rating.
CORPORATE FAMILY RATING
The B1 corporate family rating reflects Spirit's solid market
position as a leading low-cost provider of passenger air
transportation in the US domestic market balanced by the
uncertainty of the timing of a bonafide recovery from the
coronavirus. The ratings anticipate that the pace and scope of the
recovery of passenger demand will be modest in the upcoming 12 to
18 months, delaying a recovery to 2019 levels to beyond 2021,
limiting substantial improvement in average daily cash burn and,
more broadly, credit metrics. The B1 rating also contemplates the
potential for increased competition through at least 2021 as larger
US airlines deploy more capacity in the US as their international
networks remain constrained and beyond 2021 as Spirit continues to
execute its growth strategy, which will likely prevent a material
reduction in Moody's adjusted debt and Debt to EBITDA once a
recovery from the coronavirus progresses.
The negative outlook on Spirit's ratings reflects the potential for
greater than already anticipated adverse impact from the
coronavirus, which would consume more of the company's liquidity
and delay the pace and scope of the recovery in demand and Spirit's
credit profile versus Moody's current expectations. Nonetheless,
good liquidity and a domestic, leisure focused network currently
mitigates further ratings pressure.
The coronavirus pandemic, the weakened global economic outlook, low
oil prices and asset price declines are sustaining a severe and
extensive credit shock across many sectors, regions and markets.
The combined credit effects of these developments are
unprecedented. The passenger airline industry is one of the sectors
most significantly affected by the shock given its exposure to
travel restrictions and sensitivity to consumer demand and
sentiment. Moody's regards the coronavirus pandemic as a social
risk under its ESG framework, given the substantial implications
for public health and safety.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
There will be little upwards rating pressure until after there is a
solid recovery in passenger demand back towards 2019 levels.
Sustained positive free cash flow that leads to debt repayment and
debt-to-EBITDA trending to below 5x and EBIT-to-interest trending
towards more than 2x could support an upgrade. The ratings could be
downgraded if average daily cash burn increases above the company's
recent guidance of between $3 million and $4 million for a
sustained period and/or the liquidity cushion otherwise materially
weakens, if there is a slower than expected recovery of demand as a
result of sustained coronavirus infections, or if the company is
not able to maintain compliance with its financial maintenance
covenants.
The principal methodology used in these ratings was Passenger
Airline Industry published in April 2018.
Assignments:
Issuer: Spirit Airlines, Inc.
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B1-PD
Speculative Grade Liquidity Rating, Assigned SGL-2
Issuer: Spirit IP Cayman Ltd.
Senior Secured Regular Bond/Debenture, Assigned Ba3 (LGD3)
Outlook Actions:
Issuer: Spirit Airlines, Inc.
Outlook, Assigned Negative
Issuer: Spirit IP Cayman Ltd.
Outlook, Assigned Stable
Spirit Airlines, Inc., headquartered in Miramar, Florida, is a
leading low-cost US airline providing service to destinations
throughout the US, Latin America and the Caribbean. Revenues were
$3.8 billion in 2019 but declined to $2.9 billion in the last 12
months ended June 30, 2020.
STAMATINA HOLDINGS: Appeals Case Closed Pending Ch. 11 Proceeding
-----------------------------------------------------------------
Justice Bill Whitehill closes the case captioned ANGELOS KOLOBOTOS,
ET AL., Appellants, v. CITY OF DALLAS, Appellee, No. 05-20-00239-CV
(Tex. App.) as appellant Stamatina Holdings, LLC is the subject of
a proceeding under chapter 11 of the Bankruptcy Code. Further
action in this cause is automatically suspended.
Accordingly, for administrative purposes, this cause is abated and
treated as a closed case.
Angelos Kolobotos does business as Stamatina Holdings, LLC.
Kolobotos has sued JTREO, Inc. and Albert S. Heinrich, Jr., as
Trustee and City of Dallas in 44th Judicial District Court Dallas
County.
A copy of the Court's Order dated July 27, 2020 is available at
https://bit.ly/2F9lXec from Leagle.com.
Stamatina Holdings, LLC filed for chapter 11 bankruptcy protection
(Bankr. E.D. Tex. Case No. 20-41538) on July 6, 2020, and is
represented by Gerrit M. Pronske, Esq. of Pronske & Kathman, P.C.
STEWART STREET: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Stewart Street Academy and Childcare, LLC
525 Oak Mountain Rd
Carrollton, GA 30116
Case No.: 20-11216
Business Description: Stewart Street Academy and Childcare, LLC
is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: September 1, 2020
Court: United States Bankruptcy Court
Northern District of Georgia
Debtor's Counsel: Scott B. Riddle, Esq.
LAW OFFICE OF SCOTT B. RIDDLE, LLC
Suite 1800
3340 Peachtree Rd NE
Atlanta, GA 30326
Tel: 404-815-016
Email: scott@scottriddlelaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Randall Kimball, managing member.
The Debtor did not file a a list of its 20 largest unsecured
creditors together with the petition.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/65LMWIQ/Stewart_Street_Academy_and_Childcare__ganbke-20-11216__0001.0.pdf?mcid=tGE4TAMA
STURBRIDGE YANKEE: To Liquidate its Assets Under Plan
-----------------------------------------------------
Sturbridge Yankee Workshop Corporation, submitted an Amended
Disclosure Statement explaining its Chapter 11 Plan.
The Debtor was formed in 2013, as the successor to a Maine-based
catalogue retail business which is now more than 60 years old.
They made loans to the Debtor in 2018 and 2019n. Carlisle lent
$450,000 to the Debtor via three $150,000 wire transfers, first in
May of 2018, and the others in July of that year. Binnie lent the
Debtor $150,000 in July of 2019, wiring that amount directly to the
Debtor's operating account. The proceeds of the loans made by
Binnie and Carlisle were all deposited in the Debtor's checking
account, and used for general operating purposes, along with other
funds of the Debtor, such as sales revenues. All of these loans are
documented by promissory notes, security agreements and UCC
filings; they are also accounted for both in the Debtor's own
financial records and management prepared financial statements, as
well as its income tax returns.
In addition, the Debtor suffered an internet security breach in
late 2017 that compromised the Debtor's Web site, caused sales to
fall, and harmed the Debtor's reputation with its customers.
The Debtor has begun and expects to continue to successfully
address these problems, utilizing in part funding provided by its
secured lenders. Among other things: operating costs have been
slashed by taking out circulation segments with low response rates.
The Debtor is exchanging more customer names with its catalog
partners and not "renting" names from cooperative databases like
Oracle. The Debtor has reduced the number of catalogues mailed and
added co-mailing savings. The Debtor has reduced discounts offered
by at least 10% per offer. It has engaged a new web partner, with
significant cost reductions and improved security. It has centered
its branding around exclusivity and made in the USA products.
The purpose of the Plan of Reorganization is to take advantage of
these operational changes going forward, and by doing so, to better
position the Debtor to compete in the market in which it currently
operates. By this Plan of Reorganization, the Debtor expects to
reduce costs, and adjust and reduce its balance sheet liabilities,
both as to secured debt and unsecured trade debt. By doing so, the
Debtor also hopes to avoid the prepetition problems that it
incurred, and maintain the employment of its 35 employees, maintain
its continued ability to serve its many loyal customers, and
provide the maximum possible dividend to holders of prepetition
claims, while at the same time, remaining a continuing and viable
customer for their goods and services.
ALTERNATIVES TO THE PLAN – ASSET LIQUIDATION
The Committee contends that in a Chapter 7 case, certain causes of
action would be brought by a Chapter 7 trustee against
shareholders, secured lenders and other insiders of the Debtor.
The result would be that secured lenders would not have a senior
claim to proceeds of liquidation of assets and there would be
additional funds recovered in litigation that could be distributed
to unsecured creditors, thereby enhancing their recovery. The
Debtor disputes these contentions, yet describes the Committee's
suggested causes of action and outcomes for unsecured creditors.
A. The Debtor's Liquidation Analysis
In general, liquidation of the Debtor's assets would require that
secured creditors be paid first, in full (without reduction on
account of claimed causes of action) then administrative expense
creditors, including administrative expense creditors in the
Chapter 11 case and in any subsequent Chapter 7 case (with the
latter -- i.e., the expenses of the Chapter 7 trustee and his
professionals, etc. -- having priority), then priority creditors,
with the balance, if any, distributed to unsecured creditors on a
pro rata basis.
B. Committee's Liquidation Analysis
The Committee disputes the Debtor's liquidation analysis in three
respects. First, it believes that grounds exist to invalidate the
claims of secured creditors, in whole or in part. If these claims
are invalidated, in whole or in part, additional funds would be
made available in a Chapter 7 case for distribution to unsecured
creditors. Second, it believes that the assets of the Debtor would
be worth more in a Chapter 7 case than the Debtor believes to be
the case. Third, the Committee believes that it has causes of
action against the Debtor's secured lenders, shareholders and other
insiders that would result in monetary recoveries from them, which
would be available, after payment of expenses of recovery, to
distribute to unsecured creditors. The Committee also believes
that the distribution to general unsecured creditors proposed by
the Debtor under the Plan, in practical matters, has less value
than alleged by the Debtor. More information from the Debtor,
including information concerning the: (a) assumptions used by the
Debtor in its calculations, (b) inventory by category, (c) value of
intangible assets such as website traffic and customer lists, and
potential sale price (c) debt erasure on the balance sheet, (d)
terms of restructured debt, and (e) breakdown of "other assets"
could alter the Committee's position on the Debtor's liquidation
analysis.
The Committee has conducted preliminary investigations into certain
causes of action in this case. To avoid increased costs to the
estate and at the Debtor’s request, the Committee agreed to pause
its investigation pending the Debtor's filing of its disclosure
statement and plan of reorganization. Based on the Committee's
preliminary investigation, the following describes the causes of
action the Committee believes are available:
The Debtor is a spinoff of SREC. SREC owns the Facility and leases
the property to the Debtor under a triple net lease with the base
rent totaling $32,000 per month. SREC and the Debtor share the same
board of directors: Gary Boisvert, William Binnie, and Mark Graham.
Mr. Boisvert also serves as the president, treasurer, and security
of both the Debtor and SREC. William Binnie is a prepetition lender
of the Debtor in his individual capacity and as the principle of
Carlisle Capital Corporation. The Debtor's records indicate that
it was nearly $2.4 million dollars in debt at the end of 2018 and
such debt increased to $3.8 million dollars by the end of the
following year.
In the year preceding the Petition Date, the Debtor made payments
or transfers of property to SREC totaling $256,287.30, including
payments made by the Debtor on SREC’s mortgage obligations. The
Debtor states that these payments and transfers were in partial
satisfaction of the Debtor's base rent obligations (totaling, for
the year, 12 x 32,000 = $384,000) and expense reimbursement
obligations under its Lease. The Debtor also made payments to Mr.
Boisvert totaling $103,680 (exclusive of his salary). The Debtor
states that these payments were to reimburse Mr. Boisvert for
business expenses of the Debtor which he paid using his personal
credit card, as the Debtor did not have an available credit card.
The Debtor, did, however, have other available funds pursuant to
the loans with Mr. Binnie and Carlisle, but did not draw on those
loans for these business expenses; instead it relied on credit made
available under Mr. Boisvert's credit cards. The Committee has not
been provided with a written company reimbursement policy or an
accounting of the specific business expenses incurred and payments
made by the Debtor. Postpetition, the Debtor's monthly operating
reports show substantial positive cash flow, but because the Debtor
does not have credit from many of its vendors, the Debtor continues
to reimburse Mr. Boisvert for, what the Debtor states are, business
expenses he charges on his personal credit cards, and as of the
date of this Amended Disclosure Statement, these postpetition
payments total $253,223. The Committee has not been provided with
an accounting of the specific business expenses incurred and the
payments made by the Debtor.
Prior to the petition date, on or about July 1, 2019, the Debtor
entered into a loan with William Binnie. The loan to Mr. Binnie is
secured by the Debtor's personal property (the "Binnie Loan"). The
Promissory Note (Revolving Line of Credit) for the Binnie Loan
provides an acknowledgement by the Debtor that $150,000 is
outstanding and allows the Debtor to borrow up to $250,000. The
first payment under the Binnie Loan was due on July 18, 2020 but
has not been paid due to the Chapter 11 proceedings. The loan
proceeds for the Binnie Loan were not earmarked for any specific
expense and were comingled with the Debtor's other funds and used
to pay the Debtor's business expenses. Since the execution date of
the Binnie Loan, the Debtor has not drawn on the Binnie Loan. The
Debtor asserts that the outstanding amount of the Binnie Loan was
$151,645 as of January 31, 2020.
Also prior to the Petition Date, on or about July 18, 2019, the
Debtor entered into a loan with Carlisle of which William Binnie is
a principle. The loan to Carlisle is also secured by the Debtor's
personal property (the "Carlisle Loan"). The Promissory Note
(Revolving Line of Credit) for the Prepetition Carlisle Loan
provides an acknowledgement by the Debtor that $450,000 is
outstanding and allows the Debtor to borrow up to $750,000. The
first payment under the Carlisle Loan was due on July 18, 2020, but
not paid due to the pending Chapter 11 proceedings. The loan
proceeds for the Carlisle Loan were not earmarked for any specific
expense and were comingled with the Debtor's other funds. Since
the execution date, the Debtor has not drawn on the Carlisle Loan.
The Debtor asserts that the outstanding amount of the Prepetition
Carlisle Loan was $463,383.80 as of January 31, 2020.
1. SREC Lease
The Committee suspects that the Debtor is paying for more space
than it requires for its operations. Learning more about the
necessity of the lease, the utilization of the Facility, and
whether direct shipping from suppliers and manufacturers to
consumers is possible could alter the Committee's position. The
Debtor maintains, to the contrary, that trying to utilize its more
than 100 different vendors, many foreign, to fulfill customer
orders would be entirely impractical, cost prohibitive, and would
result in severe deterioration of customer service. The Committee
intends to continue its investigation into this matter.
2. Director, Officer, and/or Manager Litigation
The Committee, based on information and belief, believes the estate
may have claims against the Debtor's board of directors, officer,
and/or managers regarding their prepetition conduct for (a) the
breach of duty of loyalty, (b) breach of duty of care, and (c)
mismanagement of funds for, among other things, failing to place
the best interest of the Debtor over any interest belonging to
them, acting with a purpose other than that of advancing the best
interests of the Debtor, and deepening the Debtor’s insolvency.
3. Piercing the Corporate Veil and Alter Ego Theory
The Committee, based on information and belief (the substance of
which the Committee has not disclosed to the Debtor, because the
Committee has not completed its investigation or done discovery for
the reasons discussed above) believes the estate may have claims
against the Debtor’s owners (SREC and Mr. Boisvert),
landlord/holding company (SREC), and the directors, officers and/or
managers (that is shares with SREC) under the theories of piercing
the corporate veil and alter ego for, among other things, confused
intermingling of business activity, assets, or management, thin
capitalization, non observance of corporate formalities, and
abusing the privilege of a separate corporate identity between the
Debtor and SREC such that an unjust or inequitable result has
occurred.
4. Chapter 5 Causes of Action against SREC and Gary Boisvert
The Committee, based on information and belief (the substance of
which the Committee has not disclosed to the Debtor, because the
Committee has not completed its investigation or done discovery for
the reasons discussed above), believes the estate may have claims
against SREC and Gary Boisvert under chapter 5 of the Bankruptcy
Code for the prepetition payments made by the Debtor to or for
their benefit, and under the Bankruptcy Code for the payments made
to or for the benefit of Mr. Boisvert post-petition.
5. Recharacterization and Equitable Subordination of Binnie and
Carlisle Loans
The Debtor alleges that the Binnie and Carlisle Loans are
perfected, valid, and enforceable. The Committee, based on
information and belief (the substance of which the Committee has
not disclosed to the Debtor, because the Committee has not
completed its investigation or done discovery for the reasons
discussed above), believes the estate may have claims against
William Binnie and Carlisle to recharacterize their debt as equity
and/or equitably subordinate both loans. In the event this case is
converted to a case under chapter 7, a chapter 7 trustee would also
have the ability to investigate and pursue such claims. If the
Committee’s investigation and pursuit of such claims is permitted
by the Court and if, over the objection of parties in interest,
were ultimately determined to be successful, the Binnie and
Carlisle Loans would not be treated as secured claims under the
Plan and any claims of Binnie and Carlisle would be paid after
satisfaction of the claims of general unsecured creditors. The same
would be true if the case is converted to a chapter 7 case. The
Debtor believes that the plan provision providing for Binnie and
Carlisle to reduce their secured claims by an aggregate of $250,000
exceeds any possible recovery with respect to such claims,
particularly after the cost of pursuing the same is taken into
account. This is disputed by the Committee.
Absent an agreement on the Plan, the Committee intends to more
fully investigate the aforementioned claims and, if necessary and
permitted, pursue any and all applicable causes of action against
the Debtor’s landlord, owners, board of directors, officers,
managers, agents, and holders of prepetition secured debt.
C. Conclusion Regarding Liquidation Analysis
The Debtor believes that the Committee's causes of action would not
exceed, or, in the alternative, if they did succeed, that any
additional funds made available to unsecured creditors by
prosecution of such causes of action would be reduced by the
substantial legal costs of pursuing the same. On the whole, the
Debtor believes that when the amount of secured, administrative,
and priority claims being satisfied by the Plan of Reorganization,
plus the amount to be distributed by the Debtor under the Plan of
Reorganization, are considered, the total recovery of unsecured
creditors under the Plan of Reorganization exceeds what would be
available to unsecured creditors in a Chapter 7 liquidation, even
if the Committee were permitted to pursue its suggested causes of
action. The Committee dispute this and believes that there may be a
substantial recovery for the benefit of unsecured creditors.
Financing of Plan Obligations Generally
4. Although the Debtor currently foresees no need for additional
funding, if such additional funding becomes necessary, the Debtor
will rely on either (a) borrowed funds provided by its existing
lenders or by a financial institution and/or (b) equity provided by
its current shareholders;
Projections
The Debtor has taken a conservative approach to these projections.
It has projected a 2% increase in sales year over year. Cost
reduction measures have been taken into account. To date, and
since filing of the Debtor’s Chapter 11 case in February of 2020,
it has equaled or exceeded its monthly sales targets and cash plan.
The home furnishings market in which the Debtor does business
remains very competitive, but post petition operations have begun
to show the benefit of the Debtor’s cost reduction and other
efforts.
The Plan Projection is based on the following assumptions, which
the Debtor believes are reasonable:
Sales are based on historical curves and targeted responses
building up to monthly forecasts.
- New plan targets adjustments of 16% of sales where
historically the Debtor has run about 20% to 22%. This is done
through reducing email and catalog cover offers.
- Returns have historically run about 4% to 4.5% of Sales and
this is continued
- Cost of Goods Sold –targeting to achieve at least 65%
product gross margin.
- Catalog costs consist of printing, postage, separations, list
rental/exchange, marketing database costs. Historically these costs
run about $.53 per book.
- Advertising costs are historical costs consisting of labor,
paid search, email sends and marketing professional services.
- Fulfillment costs include labor, Fed-Ex, dropship fees, credit
card fees, offsite call center, packing materials and phone related
expenses. This category is a contra expense account and is offset
by shipping and handling collected.
- General & Admin expenses are made up of labor, supplies,
maintenance fees, import fees, repairs, utilities, website costs
and misc. vendor fees.
A full-text copy of the Amended Disclosure Statement dated July 22,
2020, is available at https://tinyurl.com/yy48rogx from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
George J. Marcus
David C. Johnson
MARCUS | CLEGG
16 Middle Street
Suite 501
Portland, ME 04101
Tel: 207.828.8000
E-mail: bankruptcy@marcusclegg.com
About Sturbridge Yankee Workshop
Sturbridge Yankee Workshop Corporation, a company that offers
furniture and home decor items, sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Maine Case No. 20-20043) on Feb.
14, 2020. At the time of the filing, the Debtor had estimated
assets of between $500,000 and $1 million and liabilities of
between $1 million and $10 million. Judge Peter G. Cary oversees
the case. David C. Johnson, Esq., at Marcus Clegg, is the Debtor's
legal counsel.
SYED ASKRI: 4th Cir. Affirms Order Converting Ch. 11 Case to Ch. 7
------------------------------------------------------------------
In the case captioned SYED ASKRI, Debtor-Appellant, v. JOHN P.
FITZGERALD, III, U.S. Trustee, Trustee-Appellee, No. 20-1327 (4th
Cir.), the U.S. Court of Appeals, Fourth Circuit affirms the
decision of the district court affirming the bankruptcy court's
order converting Debtor Syed Askri's chapter 11 case to chapter 7.
The Fourth Circuit also upholds the ruling dismissing Askri's
appeal from the bankruptcy court's order denying his disclosure
statement. The Fourth Circuit has reviewed the records and found no
reversible error.
A copy of the Court's Order dated July 27, 2020 is available at
https://bit.ly/2PM5S0g from Leagle.com.
Syed Askri, Appellant Pro Se.
Hugh Michael Bernstein, OFFICE OF THE UNITED STATES TRUSTEE,
Baltimore, Maryland, for Appellee.
Syed Askri filed for chapter 11 bankruptcy protection (Bankr. E.D.
Va. Case No. 18-13031) on Sept. 6, 2018. The case has been
converted to chapter 7.
TENET HEALTHCARE: Fitch Rates Senior Unsecured Notes 'B/RR4'
------------------------------------------------------------
Fitch has assigned a 'B'/'RR4' rating to Tenet Healthcare Corp.'s
senior unsecured notes, the same ratings as Tenet's existing senior
unsecured notes. The company plans to use the proceeds of this
borrowing to redeem the existing 8.125% senior unsecured notes due
2022. The ratings apply to approximately $15.8 billion of debt as
of June 30, 2020. The Rating Outlook is Stable.
KEY RATING DRIVERS
Coronavirus Pandemic Affecting Operations: Depressed volumes of
elective patient procedures have weighed on Tenet's revenue and
operating margins in 2020. Healthcare providers cancelled elective
procedures in both inpatient and outpatient settings to increase
capacity for COVID-19 patients, and in response to government
orders. Fitch believes Tenet has sufficient headroom in the 'B'
rating to absorb these effects, which is predicated on an
assumption that the recovery in elective patient volumes healthcare
providers experienced beginning in 2Q20 will be durable.
There could be downward pressure on the rating if the business
disruption depresses cash flow more than Fitch currently
anticipates. This could be as a result of a patient preference to
avoid elective care or because the healthcare services segment
proves more economically sensitive than during past U.S. economic
recessions.
Adequate Liquidity during Pandemic: Tenet maintained a solid
liquidity cushion throughout the pandemic related business
disruption. Tenet's sources of committed external liquidity include
a currently undrawn $1.9 billion ABL facility. Liquidity has also
been supported by funding provided to healthcare providers through
fiscal stimulus, including the Coronavirus Aid, Relief and Economic
Security (CARES) Act. Tenet received $712 million in CARES Act
grants through June 30 and about $1.5 billion in accelerated
Medicare payments. Some of the liquidity enhancements provided
through the CARES Act are temporary measures that require
repayment, starting with the Medicare advances beginning four
months after receipt. Fitch does not expect the unwinding of these
temporary government funded liquidity bolsters to strain Tenet's
financial profile.
Expected Temporary Leverage Increase in 2020: Because of a
reduction in EBITDA during the course of the coronavirus pandemic,
Fitch expects Tenet's total debt/EBITDA to increase to 8.8x at YE
2020, compared with YE 2019 Fitch calculated leverage of 6.3x.
Fitch's EBITDA calculation does not include CARES Act grants and
assumes the proceeds of the note issuance are used to refinance
outstanding debt during 2020. Fitch currently anticipates leverage
to drop fairly rapidly back to a level considered consistent with
Tenet's 'B' rating, declining to 7.0x at YE 2021 due to recovery of
EBITDA.
Post-Pandemic Margin Headwinds: Healthcare providers, including
Tenet, have adapted operations to manage the business disruption
effects of the coronavirus. This will help minimize the effects of
localized outbreaks of the virus on patient volumes before a
vaccine or highly effective treatments are available. The
longer-term effect of the economic disruption caused by the
pandemic on healthcare consumers is less certain. The sector has
historically been fairly resilient but not immune to the effects of
economic recessions. Healthcare providers typically experience
lower operating margins during and immediately following recessions
due to treating greater numbers of uninsured patients and patients
with relatively less profitable government sponsored health
insurance.
Measured by revenues, Tenet is the second-largest operator of
for-profit acute care hospitals and related care delivery settings
in the country. The scale of the operation will help the company
defend profitability in the face of weak organic operating trends
but probably not enough to entirely overcome the effects of
coronavirus-related unemployment on patient mix. Fitch expects
operating margins for healthcare providers to rebound sharply in
2021 following a 2020 trough that reflects the peak pandemic
business disruption, but to remain below the 2019 level. Fitch does
not expect a full recovery of 2019 EBITDA levels until 2022 for
most issuers in the sector, including Tenet.
DERIVATION SUMMARY
Tenet's 'B' Long-Term IDR reflects the company's highly leveraged
balance sheet, largely as a result of debt funded acquisitions.
Tenet's leverage is higher than that of the closest hospital
industry peers: HCA Healthcare Inc. (HCA; BB/Stable) and Universal
Health Services Inc. (UHS; BB+/Stable). Tenet's operating and FCF
margins also lag these industry peers; however, Tenet has recently
made progress in closing the gap through cost-cutting measures and
the divestiture of lower margin hospitals. Tenet has a stronger
operating profile than lower-rated peer Community Health Systems
(CHS; CCC). Similar to HCA and UHS, Tenet's operations are
primarily located in urban or large suburban markets that have
relatively favorable organic growth prospects.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include:
-- Fitch's 2020 revenue and EBITDA forecast for Tenet do not
include CARES Act grants;
-- Fitch currently anticipates a 20% drop in Tenet's 2020 EBITDA
compared with 2019 due to the operational effects of the
coronavirus pandemic;
-- 2021 EBITDA is expected to be 26% higher than the 2020 level;
-- The 2020 EBITDA estimate assumes an 7% drop in revenue and the
2020 operating EBITDA margin compresses 200bp to a Fitch-calculated
11.4% from the 2019 level of 13.4%;
-- Leverage rises to 8.8x at YE 2020 before dropping to 7.0x
during 2021;
-- Fitch expects the company will produce FCF of about $1.2
billion in 2020, inclusive of CARES Act grants and other liquidity
supports that will be repaid starting later in 2020 and through
2022.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- An expectation of debt/EBITDA after associate and minority
dividends sustained below 5.5x;
-- An expectation for FCF margin sustained above 2%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Debt/EBITDA after associate and minority dividends sustained
above 7.0x at YE 2021;
-- An expectation for consistently break-even to negative FCF
margin.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Profile Solid: Tenet's sources of liquidity include $3.5
billion of cash at June 30, 2020. The company has access to an
undrawn $1.9 billion ABL facility that matures in September 2024.
Tenet's debt agreements do not include financial maintenance
covenants aside from a 1.5x fixed-charge coverage ratio test in the
bank agreement that is only in effect during a liquidity event,
defined as whenever available ABL capacity is less than $100
million. LTM June 30, 2020 EBITDA/interest paid equaled 2.0x. The
next significant debt maturities are $2.7 billion of unsecured
notes maturing in April 2022 and $1.9 billion of unsecured notes
maturing in June 2023; the company plans to redeem the 2022
maturity with the proceeds of the current note offering. The
company produced $171 million of FCF during 2019 and Fitch expects
the company will produce FCF of about $1.2 billion in 2020,
inclusive of CARES Act funding.
Debt Notching Considerations: The 'BB'/'RR1' and 'B+'/'RR3' ratings
for Tenet's ABL facility and the senior secured first-lien notes
reflect Fitch's expectation of recovery for the ABL facility in the
91% to 100% range and recovery for the first lien secured notes in
the 51%-70% range under a bankruptcy scenario. The 'B'/'RR4' rating
on the senior secured second-lien notes and senior unsecured notes
reflect Fitch's expectations of recovery of outstanding principal
in the 31%-50% range. Proceeds of the notes are assumed to be used
to refinance outstanding senior unsecured notes. Under Fitch's
recovery assumptions, Tenet could issue up to $1 billion of senior
unsecured notes not used to refinance outstanding debt before the
senior secured second-lien notes and senior unsecured notes ratings
are downgraded.
Fitch estimates an enterprise value (EV) on a going-concern basis
of $9 billion for Tenet, after a deduction of 10% for
administrative claims. The EV assumption is based on
post-reorganization EBITDA after dividends to associates and
minorities of $1.4 billion and a 7.0x multiple. Fitch does not
believe that the coronavirus pandemic has changed the longer-term
valuation prospects for the hospital industry and Tenet's
post-reorganization EBITDA and multiple assumptions are unchanged
from the last ratings review.
The post-reorganization EBITDA estimate is approximately 28% lower
than Fitch's 2020 forecast EBITDA for Tenet and considers the
attributes of the acute care hospital sector and includes the
following: a high proportion of revenue (30%-40%) generated by
government payors, exposing hospital companies to unforeseen
regulatory changes; the legal obligation of hospital providers to
treat uninsured patients, resulting in a high financial burden for
uncompensated care, and the highly regulated nature of the hospital
industry.
The 7.0x multiple employed for Tenet reflects a history of
acquisition multiples for large acute care hospital companies with
similar business profiles as Tenet in the range of 7.0x-10.0x since
2006 and trading multiples (EV/EBITDA) of Tenet's peer group (HCA,
UHS and CHS), which have fluctuated between approximately 6.5x and
9.5x since 2011.
Based on the definitions of Tenet's secured debt agreements, Fitch
believes that the group of hospital operating subsidiaries that
guarantee the secured debt excludes any non-wholly owned and
non-domestic subsidiaries, and therefore, does not encompass part
of the value of the Conifer and ambulatory care segments.
The hospital operations segment contributes about 55% of
consolidated EBITDA, and Fitch uses this value as a proxy to
determine the rough value of the secured debt collateral of $4.8
billion. Fitch assumes this amount is completely consumed by the
ABL facility and the first-lien lenders, leaving $4.2 billion of
residual value to be distributed on a pro rata basis to the
remaining $2.8 billion of first-lien claims and the second-lien
secured and unsecured claims.
The ABL facility is assumed to be fully recovered before the other
secured debt in the capital structure. The ABL facility is secured
by a first-priority lien on the patient accounts receivable of all
of the borrower's wholly owned hospital subsidiaries, while the
first- and second-lien secured notes are secured by the capital
stock of the operating subsidiaries, making the notes structurally
subordinate to the ABL facility with respect to the accounts
receivable collateral. Fitch assumes that Tenet would draw the full
amount available on the ABL facility in a bankruptcy scenario, and
includes that amount in the claim's waterfall.
ESG CONSIDERATIONS
Tenet has an ESG Relevance Score of 4 for Exposure to Social
Impacts due to societal and regulatory pressures to constrain
growth in healthcare spending in the U.S. This dynamic 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 - ESG issues are credit
neutral or have only a minimal credit impact on the entity(ies),
either due to their nature or the way in which they are being
managed by the entity(ies).
TENET HEALTHCARE: Moody's Rates New Unsecured Notes 'Caa1'
----------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Tenet
Healthcare Corporation's new senior unsecured notes due 2028. There
is no change to the B2 Corporate Family Rating, B2-PD Probability
of Default Rating, B1 senior secured first lien ratings, B1 senior
secured second lien ratings, and Caa1 senior unsecured ratings for
Tenet. There is also no change to the Speculative Grade Liquidity
Rating of SGL-2. The outlook is stable.
Moody's expects that Tenet will use proceeds from the new senior
unsecured notes, along with existing cash, to fund the refinancing
of roughly $2.5 billion of unsecured bonds that come due in April
2022 and payment of associated breakage costs and fees.
With hospital volumes now recovering but still below levels prior
to the onset of the ongoing coronavirus outbreak, Tenet continues
to maintain good liquidity. The company reported having
approximately $3.1 billion of cash on August 3, 2020, with an
untapped $1.9 billion asset-based revolver (ABL). The company
received nearly $1.5 billion of accelerated Medicare payments in
April from the Coronavirus Aid, Relief and Economic Security
(CARES) Act; these funds will need to be repaid during the August
2020 -- March 2021 timeframe. Through July 2020, Tenet has also
received a total of $867 million in grant funds from the CARES Act.
Moody's expects the company to receive additional financial relief
from the CARES Act and related legislation.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: Tenet Healthcare Corporation
Senior Unsecured Notes, Assigned Caa1 (LGD5)
RATINGS RATIONALE
Tenet's B2 Corporate Family Rating is primarily constrained by the
company's high financial leverage, with debt/EBITDA of
approximately 6.6 times at June 30, 2020. Moreover, Tenet's free
cash flow after minority interest payments is modest relative to
debt. The rating is also constrained by several industry-wide
headwinds, the most significant of which is the ongoing spread of
the coronavirus across the US. Moody's expects the coronavirus to
pressure Tenet's earnings, particularly in the event that its
hospitals and ambulatory surgery centers (ASCs) are forced to forgo
lucrative elective procedures with the current public health crisis
ongoing. That said, Moody's does not expect a widespread halting of
non-essential elective surgeries like hospitals experienced in the
March/April timeframe. The rating is supported by Tenet's
significant scale and good diversity. The company is well
diversified by state and payor. During more benign periods, Tenet's
ambulatory surgery and revenue cycle management businesses add
business diversity and will benefit from longer-term trends that
favor services being done on an outpatient basis. Tenet's revenue
cycle management business, Conifer, is expected to be spun-off in
2021, which will provide an opportunity for deleveraging, depending
on the final allocation of debt to Conifer.
The stable outlook reflects Moody's view that Tenet's liquidity
will be strong enough to mitigate near-term headwinds. It also
reflects Moody's view that demand for Tenet's services will
ultimately return to pre-pandemic levels.
With respect to governance, Tenet has generally exhibited
aggressive financial policies, marked by persistently high
financial leverage. As a for-profit hospital operator, Tenet also
faces high social risk. Moody's regards the coronavirus outbreak as
a social risk under Moody's ESG framework, given the substantial
implications for public health and safety. Beyond coronavirus, the
affordability of hospitals, the lack of price transparency, and the
practice of balance billing have garnered substantial social and
political attention. Additionally, hospitals rely on Medicare and
Medicaid for a substantial portion of reimbursement. Any changes to
reimbursement to Medicare or Medicaid directly impacts hospital
revenue and profitability. In addition, the social and political
push for a single payor system would drastically change the
operating environment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Tenet's ratings could be downgraded if the company faces
operational challenges or fails to achieve its planned cost
savings. Further, the divestiture of Conifer without debt
repayment, or the pursuit of share repurchases or shareholder
distributions could result in a downgrade. More specifically, the
ratings could be downgraded if debt/EBITDA is expected to be
sustained above 6.5 times. Finally, the ratings could also be
downgraded if the company's liquidity weakens.
The ratings could be upgraded if Tenet can realize the benefits
from its recent cost and operating initiatives, including increased
profit margins. Further, the ratings could be upgraded if the
company realizes improved cash flow and interest coverage metrics.
If Moody's expects debt/EBITDA to be sustained below 5.5 times, the
ratings could be upgraded.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Tenet, headquartered in Dallas, Texas, is one of the largest
healthcare providers by revenue in the US. The company operates 65
hospitals, 24 surgical specialty hospitals and approximately 470
outpatient surgical centers in the US. Tenet also owns a
revenue-cycle management business, called Conifer. Revenues for the
last twelve months ended June 30, 2020 were in excess of $17
billion.
TIME DEFINITE: Volvo Financial Objects to Disclosures and Plan
--------------------------------------------------------------
Volvo Financial Services, a division of VFS US LLC and VFS Leasing
Co., object to the Second Joint Disclosure Statement and the Second
Joint Plan of Reorganization of Time Definite Services, Inc. et
al.
VFS points out that the information regarding Brittany Suarez's
loan is inadequate.
VFS complains that neither the 13-week cash flow projection nor the
2020 monthly financial statements projections were attached to the
Disclosure Statement.
According to VFS, the Debtors fail to adequately disclose amounts
being paid to affiliates.
VFS asserts that the Plan impermissibly releases several
non-debtors from liability.
VFS points out that the Plan was not proposed in good faith
pursuant to 1129(a)(3) of the Bankruptcy Code.
VFS complains that the Plan fails to disclose the identities of
individuals as required under Sections 1129(a)(5)(A) & (B).
According to VFS, the Plan does not comply with Section
1129(a)(8).
VFS asserts that the Plan is not fair and equitable because it does
not comply with the absolute priority rule under Section
1129(b)(2)(B)(ii).
VFS points out that the Plan is not feasible pursuant to Section
1129(a)(11).
Counsel for Volvo Financial Services:
John B. Hutton
Reginald Sainvil
GREENBERG TRAURIG, P.A.
333 S.E. 2nd Avenue, Suite 4400
Miami, Florida 33131
Telephone: 305-579-0500
Facsimile: 305-579-0717
E-mail: huttonj@gtlaw.com
E-mail: sainvilr@gtlaw.com
About Time Definite Services
Time Definite Services, Inc., is a provider of refrigerated
trucking and individualized logistics. Its affiliate Time Definite
Leasing LLC provides truck renting and leasing services.
Time Definite Services and Time Definite Leasing filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. M.D. Fla. Lead Case No. 19-06564) on July 12, 2019. In the
petition signed by Michael Suarez, president, Time Definite
Services disclosed $21,898,781 in assets and $22,555,177 in
liabilities. Judge Michael G. Williamson oversees the case. Buddy
D. Ford, P.A. is the Debtors' counsel.
TREESIDE CHARTER: Unsecureds Will be Paid in Full in Plan
---------------------------------------------------------
Treeside Charter School, submitted a Plan of Reorganization.
The Reorganized Debtor, as of the Effective Date, will be vested
with all of the assets of the Estate.
Class 1 USBE Claim is impaired. Commencing with the first month
following the Effective Date, the Debtor will pay USBE its regular
monthly scheduled loan payment of $6,559 until the USBE Claim is
paid in full. Monthly payments will be made on the first working
day of each month. The USBE Claim will accrue interest at the rate
of 1.75% per annum.
Class 3 Zions Bank Claim is impaired. The Debtor will pay the
Zions Bank Claim through a distribution of $15,645 from the Zions
Bank Collateral Account on or before Aug. 1, 2020. Also on or
before Aug. 1, 2020, at the same time the distribution in the
preceding sentence is made to Zions Bank, $25,000 will be
distributed from the Zions Bank Collateral Account to the Debtor.
Class 4 General Unsecured Claims are impaired. The Debtor will pay
in full each holder of an Allowed General Unsecured Claim, in six
equal monthly payments commencing on the Initial Distribution Date
with interest at the Plan Rate.
Class 5 Convenience Claims are impaired. Each holder of an Allowed
Convenience Claim, in full and final satisfaction of such Claim,
shall receive Cash in an amount equal to 100% of such Allowed
Convenience Claim on the Initial Distribution Date, and shall
receive no other distributions under this Plan on account of such
Claim.
From and after the Effective Date of the Plan, the Reorganized
Debtor is authorized to continue its normal business operations and
enter into such transactions as it deems advisable, free of any
restriction or limitation imposed under any provision of the
Bankruptcy Code, except to the extent otherwise provided in the
Plan.
A full-text copy of the Plan of Reorganization dated July 22, 2020,
is available at https://tinyurl.com/y2drrlmx from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
George Hofmann
Jeffrey Trousdale
Cohne Kinghorn, P.C.
111 East Broadway, 11th Floor
Salt Lake City, Utah 84111
Telephone: (801) 363-4300
Facsimile: (801) 363-4378
About Treeside Charter School
Treeside Charter School filed a voluntary Chapter 11 petition
(Bankr. D. Utah Case No. 19-28378) on Nov. 12, 2019. The Debtor
was estimated to have $1 million to $10 million in both assets and
liabilities. The Debtor is represented by George Hofmann, Esq. and
Jeffrey L. Trousdale, Esq., at Cohne Kinghorn, P.C.
URSA PICEANCE: Case Summary & 16 Unsecured Creditors
----------------------------------------------------
Lead Debtor: Ursa Piceance Holdings LLC
950 17th Street
Suite 1900
Denver, CO 80202
Business Description: The Debtors are engaged in the
development and production of oil and
gas in the Piceance Basin, principally
in rural areas of Western Colorado. The
Debtors' operations are focused on
natural gas and natural gas liquids.
The Debtors were formed in 2012. Visit
http://www.ursaresources.comfor more
information.
Chapter 11 Petition Date: September 2, 2020
Court: United States Bankruptcy Court
District of Delaware
Four affiliates that concurrently filed voluntary petitions seeking
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Ursa Piceance Holdings LLC (Lead Debtor) 20-12065
Ursa Piceance LLC 20-12066
Ursa Operating Company LLC 20-12067
Ursa Piceance Pipeline LLC 20-12069
Judge: Hon. Karen B. Owens
Debtors' Attorneys: Duston K. McFaul, Esq.
Maegan Quejada, Esq.
Hannah Rozow Owolabi, Esq.
SIDLEY AUSTIN LLP
1000 Louisiana St., Suite 5900
Houston, TX 77002
Tel: (713) 495-4500
Fax: (713) 495-7799
Email: dmcfaul@sidley.com
mquejada@sidley.com
hrozow@sidley.com
- and -
David Kronenberg, Esq.
1501 K Street, N.W.
Washington, DC 20005
Tel: (202) 736-8000
Email: dkronenberg@sidley.com
Debtors'
Delaware
Counsel: Robert S. Brady, Esq.
Edmon L. Morton, Esq.
Kenneth J. Enos, Esq.
Joseph M. Mulvihill, Esq.
YOUNG CONAWAY STARGATT &
TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Emails: rbrady@ycst.com
emorton@ycst.com
kenos@ycst.com
jmulvihill@ycst.com
Debtors'
Interim
Management
Services
Provider: CONWAY MACKENZIE MANAGEMENT SERVICES,
LLC
909 Fannin Street, Suite 4000
Houston, Texas 77010
Debtors'
Investment
Banker: LAZARD FRERES & CO. LLC
30 Rockefeller Plaza
New York, New York 10112
Debtors'
Claims,
Noticing &
Solicitation
Agent: PRIME CLERK LLC
One Grand Central Place
60 East 42nd Street, Suite 1440
New York, New York 10165
https://cases.primeclerk.com/ursa/Home-DocketInfo
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $100 million to $500 million
The petitions were signed by Jamie Chronister, chief restructuring
officer.
A copy of Ursa Piceance Holdings' petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/73P4KBY/Ursa_Piceance_Holdings_LLC__debke-20-12065__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 16 Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Garfield County Treasurer Taxes Payable $5,313,688
Attn: Janet Cotter
P.O. Box 1069
Glenwood Springs, CO 81602-1069
Tel: 970-945-1377
Fax: 580-548-2460
Email: jcotter@garfield-county.com
2. Ruby Pipeline, LLC Trade Payables $5,024,260
Attn: Treasury Department
1001 Louisiana Street
Houston, TX 77002
Tel: 1-866-523-4243
Fax: 713-230-5675
Email: rubypipeline@kindermorgan.com
3. Rio Blanco County Treasurer Taxes Payable $718,363
Attn: Sales & Use Tax Dept
PO Box 584
Meeker, CO 81641
Tel: 970-878-9660
Fax: 970-878-5796
Email: rhonna.waldref@rbc.us
4. Kinder Morgan Energy Trade Payables $368,071
Partners LP, Wyoming
Interstate Company LLC
Attn: President or General Counsel
PO Box 734018
Dallas, TX 75373-4018
Tel: 1-866-523-4243
Fax: 719-520-3792
Email: wyomingintergas@kindermorgan.com
5. Jason's Premier Trade Payables $18,489
Pumping Service LLC
Attn: President or General Counsel
141 Bluebell Lane
Silt, CO 81652
Email: jhauckjpps@gmail.com
6. Colorado Oil & Gas Taxes Payable $15,612
Conservation Commission
Attn: Julie Murphy
1120 Lincoln Street Suite 801
Denver, CO 80203
7. XCEL Energy Trade Payables $10,669
Attn: President or General Counsel
PO Box 9477
MPLS, MN 55484-9477
8. Alpine Oilfield Services LLC Trade Payables $5,379
Attn: President or General Counsel
227 N Meadows Dr
Rifle, CO 81650
9. Verizon Wireless Trade Payables $4,858
Attn: President or General Counsel
PO Box 2150
Glenwood Springs, CO 81602
10. River Valley Survey Inc Trade Payables $4,037
Attn: President or General Counsel
PO Box 1262
Rifle, CO 81650
11. Colorado Department Trade Payables $1,620
of Public Health and
Environment
Attn: President or General Counsel
4300 Cherry Creek Drive South
Denver, CO 80246-1530
Email: cdphe_wqcd_billing@state.co.us;
cdphe.information@state.co.us
12. Marc Production Services Trade Payables $960
Attn: President or General Counsel
901 Post Road
Madison, WI 53713-3260
Fax: 608-223-9112
Email: crown31bar@gmail.com
13. Comcast Business Trade Payables $543
Attn: President or General Counsel
PO Box 37601
Philadelphia, PA 19101-0601
Email: westdiv_csgeneral@cable.comcast.com
14. Pace Analytical Trade Payables $198
National Center for Testing &
Innovation
Attn: President or General Counsel
29196 Network PL
Chicago, IL 60673-1196
Fax: 612-607-6344
Email: ar@pacenational.com
15. DNOW LP Trade Payables $27
Attn: President or General Counsel
PO Box 200822
Dallas, TX 75320-0822
Email: irene.amos@dnow.com
16. WB Supply LLC Trade Payables $10
Attn: President or General Counsel
PO Box 206620
Dallas, TX 75320-6620
Email: wbparachute@wbsupply.com
VEA INVESTMENTS: $299K Sale of Orlando Property to Marrero Approved
-------------------------------------------------------------------
Judge Karen S. Jennemann of the U.S. Bankruptcy Court for the
Middle District of Florida authorized VEA Investments, LLC's sale
of the real property located at real property located at 6413
Nassau Avenue, Orlando, Florida, to Arley Marrero for $299,000.
A hearing on the Motion was held on July 22, 2020.
The closing agent is authorized to pay all customary closing costs
(including payment of all outstanding real property taxes) from the
proceeds of the sale. The remaining balance of the sale proceeds
will be paid to BransonLaw, PLLC and held in its trust account
pending further order of the Court.
These creditors assert liens against the Nassau Property:
a. Ronald L. Irwin as Trustee of the Ronald L. Irwin Trust
dated July 1, 1989 asserts that he holds mortgage that was recorded
on June 1, 2016 as Instrument Number 20160280027, Public Records of
Orange County, Florida; and
b. HMC Assets, LLC, solely in its Capacity as Separate Trustee
for Civic NPL Trust, asserts that it holds a lien based upon (i)
that certain mortgage dated November 29, 2016, recorded on Dec. 5,
2016, as Instrument Number 20160627327, Public Records of Orange
County, Florida, and (ii) that certain Final Judgment of
Foreclosure recorded on Nov. 28, 2018 as Instrument Number
20180686371, Public Records of Orange County, Florida.
The sale of the Nassau Property will be free and clear of all liens
and interests, including the Irwin Mortgage and the HMC Liens.
The Irwin Mortgage and the HMC Liens will attach to the Proceeds.
The Court reserves jurisdiction to (a) consider the Debtor's
request to surcharge the Proceeds, and (b) to determine the
interests of Irwin Mortgage and HMC in the Proceeds.
Attorney Jeffrey S. Ainsworth, Esq., is directed to serve a copy of
the Order on interested parties and file a proof of service within
three days of entry of the Order.
About VEA Investments LLC
VEA Investments LLC owns seven properties in Orlando, Florida,
having a total current value of $1.67 million.
VEA Investments LLC filed a petition for relief under Chapter 11
of
Title 11 of the United States Code (Bankr. M.D. Fla. Case No.
19-04148) on June 25, 2019. In the petition signed by Viviana M.
Tejada Cruz, managing member, the Debtor estimated $1,677,350 in
assets and $1,602,591 in liabilities.
Jeffrey Ainsworth, Esq. at Bransonlaw, PLLC represents the Debtor
as counsel.
VIA AIRLINES: Wexford Capital to Fund Plan
------------------------------------------
Via Airlines, Inc., submitted a Final Plan of Reorganization that
will be funded by Wexford Capital LP or an affiliate, as plan
sponsor.
Class 1 Allowed Secured Claim of Bank of America, N.A., is
impaired. The Class 1 Claim is secured by a first priority lien on
the Debtor's Personal Property. In full satisfaction of its Class 1
Allowed Secured Claim, BOA shall receive one of the following
options: (1) receipt of the collateral securing BOA's Class 1
Secured Claim as the indubitable equivalent of its Claim; or (2) a
lump sum payment of $100,000 paid on the Effective Date.
Class 2 Allowed Secured Claim of IberiaBank is impaired. Class 2
Claim is secured by a second priority lien on the Debtor's Personal
Property. In addition, Iberia's Allowed Class 2 Claim shall be
entitled to treatment in accordance with the terms and conditions
of Class 3, and Iberia's Allowed Class 3 Unsecured Claim shall be
reduced dollar-for-dollar to the extent of any recovery from the
sale of any Personal Property securing its Allowed Class 2 Claim.
Class 2(c) Allowed Secured Claim of Precision Aviation Group, Inc.,
is impaired. Class 2(c) consists of the Allowed Secured Claim of
Precision Aviation Group, Inc., which Claim is secured by a
possessory lien on aircraft parts owned by the Debtor. Precision
shall retain its possessory lien on the aircraft parts owned by the
Debtor to the same extent, validity and priority as of the Petition
Date, and will receive stay relief to pursue its in rem rights with
respect to the Personal Property securing its Allowed Class 2(c)
Claim.
Class 3 General Unsecured Claims are impaired. Class 3 Holders
shall become beneficiaries of the Litigation Trust and shall
receive, on the later of: (i) the Effective Date; (ii) the date all
Claim Objections are resolved; or (iii) the date all Causes of
Action are fully resolved by Final Order of the Bankruptcy Court,
100% of the net proceeds recovered by the Litigation Trust, paid
pro rata, after all costs and expenses of the Litigation Trust,
including without limitation, the costs and expenses of the Trustee
and counsel to the Litigation Trust, if any.
Class 4 Equity Interests are impaired. Class 4 consists of all
ownership interests currently issued or authorized in the Debtor.
On the Effective Date, all currently issued and outstanding Equity
Interests in the Debtor shall be extinguished and 100% of the
Interests in the Reorganized Debtor shall be vested in the Plan
Sponsor, or its designated affiliate, in return for the plan
consideration provided by the Plan Sponsor.
The Plan will be implemented utilizing funding provided by the Plan
Sponsor.
A full-text copy of the Final Plan of Reorganization dated July 22,
2020, is available at https://tinyurl.com/y4zzwco4 from
PacerMonitor.com at no charge.
Counsel for the Debtor:
JUSTIN M. LUNA, ESQ.
FRANK M. WOLFF, ESQ.
DANIEL A. VELASQUEZ, ESQ.
LATHAM, LUNA, EDEN & BEAUDINE, LLP
111 N. MAGNOLIA AVE., SUITE 1400
ORLANDO, FLORIDA 32801
About Via Airlines
Via Airlines, Inc., is a domestic regional airline offering
scheduled service across the United States. Via Airlines sought
Chapter 11 protection (Bankr. M.D. Fla. Case No. 19-06589) on Oct.
8, 2019. The Debtor was estimated to have $10 million to $50
million in assets and liabilities as of the bankruptcy filing.
Judge Karen S. Jennemann oversees the case. Latham, Luna, Eden &
Beaudine, LLP, is the Debtor's legal counsel.
WINDSTREAM HOLDINGS: CQS's Plan Confirmation Appeal Underway
------------------------------------------------------------
District Judge Vincent L. Briccetti recently granted the appellee's
motion to accept document under seal into appellate record in the
case captioned, CQS (US) LLC, Appellant, v. WINDSTREAM HOLDINGS,
INC., et al., Appellees, Case Nos. 20-cv-05529 (VB) (S.D.N.Y.).
The Clerk for the United States Bankruptcy Court for the Southern
District of New York is permitted and authorized to transmit to the
United States District Court for the Southern District of New York
those portions of the appellate record, as designated by the
Appellees, which were received by the Bankruptcy Court under seal.
The Court will accept, under seal, the Sealed Material, and the
Sealed Material will be dealt with by the parties pursuant to the
Court's usual practices and procedures concerning sealed
materials.
CQS (US), LLC, on behalf of various funds it manages, is taking an
appeal from the Findings of Fact, Conclusions of Law, and Order
Confirming the First Amended Joint Chapter 11 Plan of
Reorganization of Windstream Holdings, Inc., et al., entered by the
Bankruptcy Court on June 26, 2020.
CQS's statement of issues on appeal:
(1) Did the Bankruptcy Court err in finding that proceeds of
the settlement with Uniti Group Inc. are encumbered by prepetition
liens when (a) the Bankruptcy Court had no record of how the
settlement proceeds were or would be allocated, (b) certain settled
claims were indisputably unencumbered, (c) the Bankruptcy Court's
prior ruling authorizing the settlement establishes that the
principal claim being settled was a post-petition
recharacterization claim, (d) neither plaintiff (nor their Debtor
subsidiaries) could have pledged that recharacterization claim
prepetition, and (e) to the extent such claim existed prepetition
and could have been pledged by plaintiffs, such claim did not
constitute a general intangible?
(2) Did the Bankruptcy Court err in finding that the Debtors
met their burden of showing by competent evidence that their
secured creditors were entitled to substantial post-petition
"adequate protection" claims when (a) the Debtors employed a novel
methodology that valued the total enterprise value of Windstream
when the secured creditors did not have liens on the Windstream
enterprise, (b) the Debtors' valuation employed the wrong starting
point for the calculation, and (c) the Debtors did not value the
assets that actually comprised the secured creditors' collateral?
A copy of the Court's Order dated July 27, 2020 is available at
https://bit.ly/2FdBfPg from Leagle.com.
About Windstream Holdings
Windstream Holdings, Inc., and its subsidiaries provide advanced
network communications and technology solutions for businesses
across the United States. They also offer broadband, entertainment
and security solutions to consumers and small businesses primarily
in rural areas in 18 states.
Windstream Holding Inc. and its subsidiaries filed for bankruptcy
protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25,
2019.
The Debtors had total assets of $13,126,435,000 and total debt of
$11,199,070,000 as of Jan. 31, 2019.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as counsel; PJT Partners LP as financial advisor
and investment banker; Alvarez & Marsal North America LLC as
restructuring advisor; and Kurtzman Carson Consultants as notice
and claims agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on March 12, 2019. The committee tapped
Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP, as
its financial advisor, and Perella Weinberg Partners LP as
investment banker.
WOW WEE: Ex-Manager Has $218,000 General Unsecured Claim
--------------------------------------------------------
Bankruptcy Judge Jerry A. Brown dismisses the case captioned WOW
WEE, LLC, Plaintiff, v. CHARLES F. COMEAUX, Defendant, Adv. P. No.
19-112 (Bankr. E.D. La.), and rejected the debtor's challenge to a
claim lodged by a former manager.
Wow Weee is in the business of producing and bottling sauces for
sale in supermarkets and other retail stores. The debtor is a
member-managed Louisiana limited liability company. At its
inception, the ownership of the debtor was split between Comeaux,
his former spouse, Lois Lasseigne, and Celeste and Anthony Griffin.
Comeaux and Lasseigne were the co-managers of the debtor. On Sept.
10, 2014, the members of the debtor called a special meeting and
executed an amended operating agreement removing Comeaux as a
manager and leaving Lasseigne as the sole manager of the debtor. On
that same date, Comeaux donated one percent of his interest in the
debtor to Lasseigne. As a result, Lasseigne became the majority
member with a 38.5% interest in the debtor. On Sept. 9, 2015
Lasseigne filed a petition for divorce from Comeaux in Louisiana
state court. On Sept. 28, 2018, by consent of the parties, the
state court entered a partial summary judgment against the debtor
and in favor of Comeaux in the amount of $33,000. This judgment
remains unpaid. The partial summary judgment also awarded judgment
against the debtor in the amount of $153,039.19 and in favor of
Comeaux and Lasseigne. The parties dispute ownership of that claim,
and the state court did not make a determination of the ownership
of that claim. The $153,039.19 was for repayment of two loans made
to the debtor.
On April 24, 2012, the debtor took out a revolving line of credit
from Coastal Commerce Bank with a maximum of $50,000. The line of
credit was personally guaranteed by Comeaux, who was a co-manager
of the debtor at that time. The line of credit was increased to
$60,000 on June 8, 2012. It was renewed twice, on April 24, 2013
and April 24, 2014. On April 24, 2015, it was converted to a term
loan with an interest rate of 7.5% and a maturity date of April 24,
2018. On June 1, 2015 the loan was refinanced at a variable rate.
At some point, the debtor became delinquent on the loan and Coastal
made demand for full payment, which the debtor did not tender.
Coastal then notified Comeaux it would make demand on him, as a
guarantor. Comeaux paid $52,272.19 to satisfy the debtor's
obligation to Coastal, and he acquired from Coastal the promissory
note, and personal guarantees of the other members of the debtor.
The debtor filed its petition for relief under Chapter 11 of the
U.S. Bankruptcy Code on Oct. 12, 2018. Comeaux timely filed a proof
of claim in the amount of $238,911.38.
The debtor alleges that Comeaux breached his fiduciary duty to the
debtor. Fiduciary duty encompasses the duty of loyalty and the duty
of care. Louisiana Revised Statute 12:1314 sets forth the duties of
members and managers of a Louisiana limited liability company.
According to Judge Brown, Comeaux and Lasseigne were initially the
managers of the debtor, and so Comeaux owed fiduciary duties to the
debtor. On Sept. 10, 2014, Comeaux was removed as a manager,
leaving Lasseigne as the sole manager of the company. Once he
ceased to be a manager of the debtor, Comeaux no longer owed the
fiduciary duties of a manager outlined in LSA R.S. Most of the
actions that the debtor complains Comeaux engaged in happened after
Comeaux was no longer the manager, and thus, there can be no breach
of fiduciary duty because Comeaux did not have a fiduciary duty to
breach, Judge Brown adds.
At trial, the debtor showed that there were two versions of the
initial operating agreement of the debtor. One, Exhibit 2, which
was signed by all members, lists Comeaux and Lasseigne as
co-managers of the debtor. The other, Exhibit 6, was signed only by
Comeaux and lists only Comeaux as the manager. It was this second,
invalid operating agreement which was presented to Coastal Commerce
Bank when the debtor first took out a loan to buy equipment on
April 24, 2012. Although the operating agreement was invalid,
Comeaux was nonetheless a manager of Wow Wee under the valid
operating agreement at the time the loan was initially made, and
thus he had authority to sign for the loan on behalf of the debtor.
Comeaux also executed a personal guarantee with the bank when the
loan was made. Chip Ourso, the chief lending officer for the bank,
testified that because of the financial situation of the debtor and
the other members of the debtor, the only reason the bank was
willing to make this loan was because Comeaux agreed to personally
guarantee the loan. Ourso also testified that the loan documents
provided that in the event management or control of the Wow Wee
changed, it was Wow Wee's responsibility to notify the bank of that
change. Lasseigne conceded in her testimony that no one had
notified the bank when she became the sole manager of the debtor.
The debtor borrowed the money from the bank to buy equipment. The
loan was renewed twice, and then converted to a three-year loan.
Comeaux's guarantee ran with the loan. When the loan became past
due, the bank sent a demand letter to Comeaux asking him to make
payment in full under his guarantee. The letter also threatened
litigation if Comeaux did not make payment within 15 days. Comeaux
elected to fulfill his obligation under the guarantee, and on Oct.
30, 2018, he and the bank entered in an Act of Sale and Assignment
of Promissory Note and Related Security Agreements. Comeaux paid
the bank, the bank assigned the Wow Wee note to Comeaux, and
Comeaux replaced the bank as Wow Wee's creditor on the equipment
loan.
Wow Wee makes the argument that because Comeaux presented the bank
with an invalid operating agreement at the time of the initial
loan, somehow the loan was invalid and Comeaux should not be
allowed to collect on the note the bank assigned to him when he
paid of the debtor's loan. It argues that an action taken in the
name of a corporation that is unauthorized cannot bind the
corporation. But Comeaux was authorized under the valid operating
agreement to make the loan, Judge Brown points out -- he was a
manager at the time of the initial loan transaction. And, the
debtor used the proceeds to buy equipment that benefitted the
debtor, thus ratifying the transaction. The debtor cites no
authority for its proposition that the invalid operating agreement
somehow makes this transaction unenforceable when Comeaux did have
authority under the valid operating agreement to enter into the
transaction. The court finds that the transaction was proper, and
Comeaux is entitled to make a claim against the debtor for the
$52,272.19 he paid to the bank to purchase the note.
The court finds that Comeaux has a general unsecured claim against
the debtor in the total amount of $218,705.89. In its adversary
complaint, the debtor asserted that Comeaux had filed his proof of
claim in bad faith. The debtor did not make any argument in its
post-trial brief in furtherance of this claim, and the court finds
that the claim was not made in bad faith.
A copy of the Court's Memorandum Opinion dated July 27, 2020 is
available at https://bit.ly/3iqg4rk fro Leagle.com.
About Wow Wee
The business of Wow Wee, LLC, consists of the wholesale and retail
sale of various "dipping sauces" that it produces at its facility
in Cut Off, Louisiana.
Wow Wee, LLC, filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 18-12729) on
Oct. 12, 2018, estimating under $1 million in assets and
liabilities. Darryl T. Landwehr, Esq., at Landwehr Law Firm, is
the Debtor's counsel.
YRC WORLDWIDE: Bailout Under Catch-All Provision Questioned
-----------------------------------------------------------
Wolf Richter, writing for Wolfstreet, reports that the U.S.
Congressional watchdog has ripped off the bailout from YRC
Worldwide.
The U.S. government's $700-million bailout under the CARES Act of
long-troubled YRC Worldwide, one of the largest less-than-truckload
(LTL) carriers, has come under fire by the Congressional Oversight
Commission, which is supposed to monitor how the trillions of
bailout dollars are getting distributed.
The bailout gave the government a 29.6% stake in YRC in lieu of
higher market-based interest rates on the loan. That trade-off also
came under fire, given the iffy fate of the shares in an eventual
restructuring of YRC.
All bailouts are primarily a bailout of stockholders and
bondholders. That was the case in the YRC bailout as well. In the
10 trading days straddling the bailout announcement on July 1 and
its finalization on July 8, YRC's shares [YRCW] soared 122%, from
$1.57 on June 25 to $3.49 on July 10.
The company has been wrapped up in a tangle of problems for years.
It has been junk-rated for over a decade. Moody's rates it Caa1 and
S&P CCC+, both deep-junk (my cheat sheet for corporate credit
ratings). Its shares have collapsed starting in January 2018, from
a range of $12-$18 a share to $2.57 at the beginning of 2020,
per-Covid. Shareholders weren't exactly brimming with hope, when
the pandemic hit the trucking business.
Two of the Treasury Department's criteria for a bailout are based
on "maintaining national security" -- that the company must either
be performing under a defense contract of the highest national
priority or operating under a top-secret facility security
clearance. But the Commission's report said that YRC didn't
qualify, obviously, under those two criteria.
Instead, YRC qualified "under a catch-all provision created by the
Treasury allowing it to determine if a business is critical to
maintaining national security based solely on a recommendation and
cer|"
And the Commission now "has questions about the decision to deem
YRC a business critical to maintaining national security and the
process for reaching that conclusion."
"Secretary Mnuchin has publicly stated that the national security
loan program was developed with the thought that Boeing and General
Electric might need loans. Given the types of sophisticated
services and products these two companies provide for our national
defense, it is not hard to argue that they are critical to
maintaining national security."
"It is far from clear that the fourth-largest LTL shipping company
in the United States is critical to maintaining national defense
because it reportedly delivers 'food, electronics and other
supplies to military locations around the country.'"
And the Commission has other issues with the bailout.
"The risk of loss of U.S. taxpayer money on this loan appears high.
In fact, the Commission notes that the level of risk taken in the
loan to YRC appears strikingly higher than the risks associated
with the other facilities over which the Commission has
oversight."
"YRC has been rated non-investment grade for over a decade,
struggled financially for years before the COVID-19 crisis, and was
at risk of bankruptcy before it obtained a loan from the
Treasury."
"Under the CARES Act, a Treasury loan like this one is supposed to
be 'sufficiently secured' or 'made at a rate' that 'reflects the
risk of the loan' and 'is to the extent practicable, not less than
an interest rate based on market conditions for comparable
obligations prevalent prior to the outbreak of the coronavirus
disease 2019 (COVID–19).'"
"It is questionable whether the loan to YRC meets these standards.
The interest rate on YRC's loan from the Treasury is 4% lower than
the interest rate on the company's most recent debt financing,
which was a five-year, $600 million term loan that YRC obtained in
September 2019 before the COVID-19 crisis."
"As part of the loan agreement, the Treasury has obtained a 29.6%
equity stake in YRC to reportedly provide ‘appropriate taxpayer
compensation' for the loan. But given the company's long-term
non-investment grade rating and previous close calls with
bankruptcy over the years, it is not clear that an equity stake in
YRC will provide much, if any, compensation or protection to
taxpayers."
"This loan may indicate that the Treasury believes the national
security designation permits a much higher risk tolerance to
provide relief to firms that were struggling well before the
COVID-19 pandemic."
"If that is the case, the Commission would like to better
understand the rationale for this risk tolerance, especially in
light of the statutory restrictions on national security loan terms
and the fact that the single such loan the Treasury has made – to
date – is to a company that may not be critical to maintaining
national security."
An alternative to a taxpayer bailout.
A debt restructuring in a Chapter 11 bankruptcy proceeding could
ensure that a nimble company with a much smaller debt load emerges
at the other end – and that's a long-term benefit to its
customers and the economy.
In a Chapter 11 bankruptcy, in essence, creditors take over the
company. Still some creditors would come up short. Shareholders
often get wiped out, after having already been nearly wiped out
over the years due to the declines in the share price. And other
stake holders, such as the company's pension fund that often had
been raided over the prior years, would also get hit.
So in the case of YRC, shareholders, creditors, and other
stakeholders were bailed out by taxpayers, temporarily. YRC now has
$700 million in additional liquidity it can burn through, but then
what? It will have an additional $700 million in debt, on top of
the debts it already has been struggling with, and it still hasn't
restructured its business and may eventually buckle under all this
debt anyway, and head for a restructuring, and then taxpayers can
kiss their investment goodbye.
About YRC Worldwide
YRC Worldwide Inc., headquartered in Overland Park, Kan., is a
holding company for a portfolio of less-than-truckload (LTL)
companies including Holland, New Penn, Reddaway, and YRC Freight,
as well as the logistics company HNRY Logistics. YRC Worldwide
companies -- http://www.yrcw.com/-- offer expertise in flexible
supply chain solutions, ensuring customers can ship industrial,
commercial and retail goods with confidence.
YRC Worldwide reported a net loss of $104 million for the year
ended Dec. 31, 2019. As of March 31, 2020, the Company had $1.85
billion in total assets, $704.5 million in total current
liabilities, $838.3 million in long-term debt and financing, less
current portion, $230.5 million in pension and postretirement, $223
million in operating lease liabilities, $290.5 million in claims
and other liabilities, and a total shareholders' deficit of $433.8
million.
* * *
As reported by the TCR on June 2, 2020, S&P Global Ratings lowered
its issuer credit rating on Overland Park, Kan.-based
less-than-truckload and logistics company YRC Worldwide Inc. to
'CCC' from 'CCC+'. "The downgrade reflects our view that YRC's
2020 EBITDA will be negatively affected by the coronavirus
pandemic. Following an industry recession in 2019, the freight
industry and U.S. economy have experienced significant declines due
to the coronavirus pandemic."
In April 2020, Moody's Investors Service downgraded the ratings of
truck carrier YRC Worldwide Inc., including the Corporate Family
Rating to Caa1 from B2. Moody's said the rapid and widening spread
of the coronavirus outbreak, deteriorating global economic outlook,
falling oil prices, and asset price declines are creating a severe
and extensive credit shock across many sectors, regions and
markets.
ZATO INVESTMENTS: JTS Capital Objects to Plan and Disclosures
-------------------------------------------------------------
JTS Capital Realty SB LLC, a secured creditor, objects to
confirmation of Plan and approval of the Disclosure Statement of
Zato Investments Ltd. Co.
JTS points out that the Disclosure Statement contains inaccurate
information regarding delinquent taxes (showing $7,422.80 compared
with $9,481.20 shown by the Pulaski County Collector).
JTS asserts that the Disclosure Statement does not indicate how the
2019 taxes which are already due and become delinquent in three
months will be paid.
According to JTS, it is unclear where this cash would come from as
Debtor generally appears to operate at a loss and no bank account
furnished to JTS evidences a balance sufficient to pay delinquent
taxes as well as those that are already due and becoming delinquent
in three months.
JTS complains that the Schedule A/B attached to the disclosure
statement indicates that Debtor has on hand cash in the amount of
$4,081.361. Meanwhile $9,481 in ad valorem taxes are delinquent
while another $13,284.58 is presently due for 2019 and will become
delinquent in three months.
JTS points out that the May and June operating reports attached to
the disclosure statement do not indicate that the Debtor has any
cash on hand.
JTS asserts that on top of these uncertainties, Debtor's Plan and
Disclosure Statement indicate that JTS will only receive payments
according to the terms of a prior adequate protection order.
According to JTS, among other things, the prior adequate protection
order indicated that JTS would receive no payments until Debtor's
delinquent taxes were paid in full.
JTS complains that accordingly, JTS does not know when -- if ever
-- it will be paid under the plan.
Objection to Confirmation of Plan
JTS points out that the Debtor's proposed treatment of payments
received by JTS is violative of 11 U.S.C. Sec. 1129(A)(ii).
JTS asserts that the treatment accorded to the Pulaski County Tax
Collector (payment over time of the delinquency and no treatment
with respect to the current taxes due but not yet delinquent) is
impermissible unless agreed to pursuant to 11 U.S.C. Sec.
1129(a)(9)(A) which requires payment in cash of the allowed amount
of the claim on the effective date of the Plan.
According to JTS, if the plan does not satisfy all requirements of
11 U.S.C. Sec. 1129(a), it cannot be confirmed under 11 U.S.C. Sec.
1129(b).
JTS complains that the plan is not fair and equitable insofar as it
does not provide that JTS will receive deferred cash payments in
the allowed amount of JTS's claim as of the effective date of the
plan or the indubitable equivalent of its claim as required by Sec.
1129(b)(2)(A)(i)(II) and Sec. 1129(b)(2)(A)(iii).
JTS points out that additionally, the Plan unfairly discriminates
between the impaired secured claims of JTS on the one hand and
Bosley & White on the other.
JTS asserts that accordingly, the Plan is not fair and equitable
with respect to JTS, and unfairly discriminates between two fully
secured claims.
Attorney for JTS Capital Realty SB LLC:
Kyle T. Unser
KUTAK ROCK LLP
3300 Market Street, Suite 136
Rogers, AR 72758
Phone: 479-973-4200
Fax: 479-973-0007
E-mail: Kyle.Unser@KutakRock.com
About Zato Investments
Zato Investments Ltd. Co. owns real estate and improvements,
consisting of single-family and multi-family residences for lease
to the public at Little Rock, Arkansas.
Zato Investments sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Ark. Case No. 19-13288) on June 24,
2019. At the time of the filing, the Debtor was estimated to have
assets of between $500,001 and $1 million and liabilities of the
same range. The case is assigned to Judge Phyllis M. Jones.
Stanley V. Bond, Esq., of Bond Law Office, is the Debtor's counsel.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Orion Portfolio Management LLC
Bankr. M.D. Fla. Case No. 20-02524
Chapter 11 Petition filed August 25, 2020
See
https://www.pacermonitor.com/view/XGIVX4Q/Orion_Portfolio_Management_LLC__flmbke-20-02524__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Kesley, Inc. d/b/a Kiddie Corner Academy
Bankr. S.D. Fla. Case No. 20-19199
Chapter 11 Petition filed August 25, 2020
See
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represented by: Mercy Saladrigas, Esq.
SALADRIGAS LAW CENTER
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In re Jeffery Allen Kernen
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Chapter 11 Petition filed August 26, 2020
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BLANCHARD LAW, P.A.
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In re RSG Industries Corp.
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Chapter 11 Petition filed August 26, 2020
See
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represented by: Chad Van Horn, Esq.
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In re Keisha D. Hilliard
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In re Robert M. Gibson and Martha M. Gibson
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In re D & D Corporation
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See
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JUAN C. BIGAS
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In re Russell Wayne Lester
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Chapter 11 Petition filed August 27, 2020
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In re Rising Phoenix Investments, LLC, dba DS Liquors,
Hi Up Liquors
Bankr. D. Colo. Case No. 20-15711
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See
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In re Stumpbreakers, LLC
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See
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MARTIN L. ROGALSKI, P.C.
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In re Michael T. White, Inc.
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See
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JOHNSON, POPE, BOKOR, RUPPEL & BURNS, LLP
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In re Yacht Club Vacation Owners Association, Inc.
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See
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LASHLY & BAER, P.C., ATTORNEYS AT LAW
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In re Galina B. Barenboim
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See
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See
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See
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See
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In re Caribbean Trading Company, Inc.
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Chapter 11 Petition filed August 31, 2020
See
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BARRON & NEWBURGER, P.C.
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In re Christopher D. Collins, MD
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In re Wahoo's Marina, LLC
Bankr. S.D. Tex. Case No. 20-80225
Chapter 11 Petition filed August 31, 2020
See
https://www.pacermonitor.com/view/CELCHOY/Wahoos_Marina_LLC__txsbke-20-80225__0001.0.pdf?mcid=tGE4TAMA
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In re NTHUS4, Corp.
Bankr. N.D. Tex. Case No. 20-32296
Chapter 11 Petition filed August 31, 2020
See
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ATTORNEY AT LAW & MEDIATOR
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In re Tea Station, Inc.
Bankr. C.D. Cal. Case No. 20-18039
Chapter 11 Petition filed September 1, 2020
See
https://www.pacermonitor.com/view/OVKUHYY/Tea_Station_Inc__cacbke-20-18039__0001.0.pdf?mcid=tGE4TAMA
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LESLIE COHEN LAW PC
E-mail: leslie@lesliecohenlaw.com
In re Tea Creations, Inc.
Bankr. C.D. Cal. Case No. 20-18041
Chapter 11 Petition filed September 1, 2020
See
https://www.pacermonitor.com/view/O3YJBMA/Tea_Creations_Inc__cacbke-20-18041__0001.0.pdf?mcid=tGE4TAMA
represented by: Leslie Cohen, Esq.
LESLIE COHEN LAW PC
E-mail: leslie@lesliecohenlaw.com
In re Tea City, Inc.
Bankr. C.D. Cal. Case No. 20-18042
Chapter 11 Petition filed September 1, 2020
See
https://www.pacermonitor.com/view/R6VOZFI/Tea_City_Inc__cacbke-20-18042__0001.0.pdf?mcid=tGE4TAMA
represented by: Leslie Cohen, Esq.
LESLIE COHEN LAW PC
E-mail: leslie@lesliecohenlaw.com
In re Tea Station Operation, Inc.
Bankr. C.D. Cal. Case No. 20-18044
Chapter 11 Petition filed September 1, 2020
See
https://www.pacermonitor.com/view/WUGQNQY/Tea_Station_Operation_Inc__cacbke-20-18044__0001.0.pdf?mcid=tGE4TAMA
represented by: Leslie Cohen, Esq.
LESLIE COHEN LAW PC
E-mail: leslie@lesliecohenlaw.com
In re Tea Professor, Inc.
Bankr. C.D. Cal. Case No. 20-18047
Chapter 11 Petition filed September 1, 2020
See
https://www.pacermonitor.com/view/FW22HMI/Tea_Professor_Inc__cacbke-20-18047__0001.0.pdf?mcid=tGE4TAMA
represented by: Leslie Cohen, Esq.
LESLIE COHEN LAW PC
E-mail: leslie@lesliecohenlaw.com
In re Tea Island, Inc.
Bankr. C.D. Cal. Case No. 20-18046
Chapter 11 Petition filed September 1, 2020
See
https://www.pacermonitor.com/view/FC6VAUQ/Tea_Island_Inc__cacbke-20-18046__0001.0.pdf?mcid=tGE4TAMA
represented by: Leslie Cohen, Esq.
LESLIE COHEN LAW PC
E-mail: leslie@lesliecohenlaw.com
In re Tea Hut, Inc.
Bankr. C.D. Cal. Case No. 20-18043
Chapter 11 Petition filed September 1, 2020
See
https://www.pacermonitor.com/view/WBA36RQ/Tea_Hut_Inc__cacbke-20-18043__0001.0.pdf?mcid=tGE4TAMA
represented by: Leslie Cohen, Esq.
LESLIE COHEN LAW PC
E-mail: leslie@lesliecohenlaw.com
In re EDC LLC
Bankr. C.D. Cal. Case No. 20-12476
Chapter 11 Petition filed September 1, 2020
See
https://www.pacermonitor.com/view/23IEXXI/EDC_LLC__cacbke-20-12476__0001.0.pdf?mcid=tGE4TAMA
represented by: Jay W. Smith, Esq.
THE LAW OFFICES OF JAY W. SMITH
E-mail: jsmith81452@yahoo.com
In re Omer Kassa
Bankr. N.D. Cal. Case No. 20-51306
Chapter 11 Petition filed September 1, 2020
represented by: Arasto Farsad, Esq.
In re Major Cleaning Inc.
Bankr. D.N.J. Case No. 20-20256
Chapter 11 Petition filed September 1, 2020
See
https://www.pacermonitor.com/view/FMCQELA/MAJOR_CLEANING_INC__njbke-20-20256__0001.0.pdf?mcid=tGE4TAMA
represented by: Lawrence F. Morrison, Esq.
MORRISON TENENBAUM, PLLC
E-mail: info@m-t-law.com
In re Nasir M. Malik
Bankr. E.D.N.Y. Case No. 20-43196
Chapter 11 Petition filed September 1, 2020
represented by: Alla Kachan
In re Stephen Todd Walker
Bankr. E.D. Pa. Case No. 20-13557
Chapter 11 Petition filed September 1, 2020
*********
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
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then-ending.
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S U B S C R I P T I O N I N F O R M A T I O N
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.
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