/raid1/www/Hosts/bankrupt/TCR_Public/200928.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, September 28, 2020, Vol. 24, No. 271
Headlines
06-010 GRIDLEY: Property Sale to Pay Claims in Full
20 EAST 76TH STREET: Chapter 7 Trustee Terminates Surrey Lease
2014 S&S INVESTMENTS: Voluntary Chapter 11 Case Summary
24 HOUR FITNESS: Bonuses Approved After $4.5M Reduction
2MORROWS SOLUTIONS: Case Summary & 15 Unsecured Creditors
53 STANHOPE: Seeks to Hire Robinson Brog as Special Counsel
5CR TRAILER: Case Summary & 20 Largest Unsecured Creditors
A.R.M. OPCO: Committee Taps Levinson LLP as Legal Counsel
ACADIAN CYPRESS: Newman Lumber Objects to Disclosure Statement
AGF MACHINERY: Hires Saltmarsh Cleaveland as Financial Advisor
ALGON CORPORATION: Seeks to Hire Alonso & Garcia as Tax Accountant
ALKHAIRY PROPERTIES: Allen County Treasurer Objects to Disclosure
ALL CARE NOW: Unsecured Creditors to Have 100% Recovery in Plan
ALL TEXAS ELECTRICAL: Voluntary Chapter 11 Case Summary
ASCENA RETAIL: Moody's Rates $312MM Secured DIP Loan 'B2'
ASHBURY HOLDINGS: Taps Colliers International as Real Estate Broker
ASP NAVIGATE: Moody's Alters Outlook on B2 CFR to Negative
AURORA HOME: Unsecureds to Receive $1,029 Per Month over 5 Years
BIORESTORATIVE THERAPIES: Unsecureds Have 2 Options in Joint Plan
BLESSINGS INC: Voluntary Chapter 11 Case Summary
BMZ LLC: Case Summary & 13 Unsecured Creditors
BOARDRIDERS INC: Moody's Rates New $431MM Term Loan 'B3'
BORDEN DAIRY: Laguna Contributes $2.5M as Part of Settlement
BOY SCOUTS OF AMERICA: Sheltered Funds from Chapter 11, Say Victims
BRIGHT MOUNTAIN: Jack Dunleavy Quits as Director
CARDINAL CARE: Voluntary Chapter 11 Case Summary
CARIBBEAN TRADING: Seeks to Hire Financial Guidance as Accountant
CEC ENTERTAINMENT: King & Spalding Updates on Noteholder Group
CENTRIC BRANDS: Reorganization Plan Confirmed by Judge
CHAPARRAL ENERGY: Taps Ernst & Young to Provide Tax Services
CORRIDOR MEDICAL: Unsecureds Owed Less than $5,000 to Recover 50%
DEAN FOODS: Strikes Ch. 11 Deal on Gambler Walters' Restitution
DIAMONDBACK INDUSTRIES: Largest Creditor Has Issues With Plan
EXACTUS INC: Derek Du Chesne Quits as President, CGO and Director
FECK PROPERTIES: Seeks to Hire Midler and Kramer as Special Counsel
FIRST ADVANTAGE: Moody's Alters Outlook on B3 CFR to Positive
FM COAL: Seeks to Hire Aurora Management as Financial Advisor
FOXFIRE CONSOLIDATED: Has Until Nov. 5 to File Plan & Disclosure
FREEDOM MORTGAGE: Fitch Affirms BB- LongTerm IDR, Outlook Negative
FTS INTERNATIONAL: Davis, Rapp Represent Noteholder Group
FTS INTERNATIONAL: Lugenbuhl, Stroock Represent Term Lender Group
GABRIEL INVESTMENT: Gabriel's Liquor, Ben's Liquors Have New Owners
GARRETT MOTION: Gibson Dunn Represents First Lien Group
GENUINE FINANCIAL: Moody's Alters Outlook on Caa1 CFR to Stable
GIBSON ENERGY: Moody's Affirms Ba2 CFR, Outlook Stable
GIGA-TRONICS INC: Jamie Weston Quits as Director
GNC HOLDINGS: DLA Piper Represents Cowell & Lee, 3 Others
GOGO INC: Adopts Rights Plan to Protect Valuable Tax Assets
GOODRICH QUALITY: GQT Movies Push Reopening of Movie Theaters
GRIMMETT BROTHERS: Case Summary & 20 Largest Unsecured Creditors
HERMITAGE OFFSHORE: In Chapter 11 Due to Pandemic, Oil Slump
HERTZ CORP: Seeks Approval to Modify Scope of FTI Services
HERTZ GLOBAL: Searches for $1.5 Billion of Bankruptcy Financing
HORTON INVESTMENTS: Seeks to Hire Hoover Penrod as Legal Counsel
IOTA COMMUNICATIONS: Signs Debt Restructuring Agreement
J.C. PENNEY CORP: Bay Shore Store Saved from Permanent Closure
J.CREW: Reaches Better Lease Deal With Landlords
J.D. BEAVERS: Oct. 5 Plan & Disclosure Hearing Set
JANE STREET: Moody's Alters Outlook on Ba2 CFR to Positive
JJE INC: Seeks to Hire BDC Taxes as Accountant
JONATHAN R. SORELLE: Hires Dennett & Winspear as Special Counsel
K.G. IM LLC: 7 Il Mulino Restaurants Seek Chapter 11
KING MOUNTAIN: Case Summary & 20 Largest Unsecured Creditors
LAKELAND TOURS: Moody's Assigns Caa2 CFR, Outlook Stable
LAYER LOGIC: Case Summary & 4 Unsecured Creditors
LEHMAN BROTHERS: Bankr. Cannot Claw Back Swaps Liquidation Payment
LIVINGWAY CHRISTIAN: Case Summary & 12 Unsecured Creditors
MAD RIVER: Seeks to Hire Paul A. Beck as Bankruptcy Counsel
MAGNOLIA LANE: Seeks to Hire Joel M. Aresty as Legal Counsel
MARRONE BIO: Incurs $2.9 Million Net Loss in Second Quarter
MARRONE BIO: President and CFO James Boyd to Retire
MARRONE BIO: Will Hold Its Annual Meeting on Oct. 29
MEDCISION LLC: Court Judge Tosses Adversary Suit vs. Directors
MODA INGLESIDE: Moody's Hikes CFR to Ba3, Outlook Stable
NASHEF LLC: Seeks to Hire Phillips Silver as Special Counsel
NEFFGEN FAMILY: Unsecureds to Recover 25% in Liquidating Plan
NOBLE NEC HOLDINGS: Case Summary & 50 Largest Unsecured Creditors
OLDSMAR JJ: Case Summary & 11 Unsecured Creditors
OWENS & MINOR: Updates Annual Earnings Guidance
PEPI COMPANIES: Case Summary & 20 Largest Unsecured Creditors
PERMIAN TANK: Court Approves Chapter 11 Sale Procedures
PHARMAGREEN BIOTECH: Blames Notes, Pandemic for Chapter 11 Filing
PIONEER ENERGY: New Board Gives Themselves Retainers
POTOMAC CONSTRUCTION: Unsecureds to be Paid in Full with Interest
PQ NEW YORK: Unsecured Creditors to Have 2%-5% Recovery in Plan
PURDUE PHARMA: Ruling Blocks Opioid Victims from Suing Sackler
PURDUE PHARMA: Sackler’s Claims Blocked by Ch. 11, Says Tenn. DA
QUEBECOR MEDIA: Moody's Alters Outlook on Ba1 CFR to Positive
RECORDED BOOKS: Moody's Affirms B3 CFR, Outlook Stable
RED VENTURES: Fitch Rates New $400MM Incremental Term Loan 'BB'
REMINGTON OUTDOOR: To Close Rockingham Plant If Fails to Find Buyer
RGN-GROUP HOLDINGS: Hires AlixPartners as Financial Advisor
ROBERT'S SEAFOOD: Seeks to Hire William G Haeberle as Accountant
RSG INDUSTRIES: Seeks to Hire Van Horn Law Group as Counsel
RTW RETAILWINDS: NY & Co Closes Chino Hills Store
SEASPRAY RESORT: Seeks to Hire Townsend LLC as Counsel
SHILOH INDUSTRIES: Law Firm of Russell Represents Utility Companies
SKYLER AARON: Seeks Court Approval to Hire Phocus as Accountant
SPEEDCAST INTL: Black Diamond, Centerbridge Beef Up Proposals
SPIRIT AEROSYSTEMS: Moody's Rates $400MM 1st Lien Term Loan 'B2'
STERLING MIDCO: Moody's Alters Outlook on B3 CFR to Stable
SUMMIT MIDSTREAM: Tender Offers for Senior Notes Expire
SUR LA TABLE: Business Sold to Marquee Brands
TAILORED BRANDS: Jos. A. Bank to Close Lafayette Location
TAILORED BRANDS: Men's Wearhouse Pasadena Will Remain Open
TAILORED BRANDS: Seek to Hire KPMG LLP as Tax Consultant
TAILORED BRANDS: Seeks to Hire AlixPartners, Appoint CRO
TNP 3745: Voluntary Chapter 11 Case Summary
TNP SPRING: Seeks to Hire Colliers Nevada as Real Estate Broker
TRANSOCEAN LTD: Lazard Hired to Advise on Strategic Alternatives
UNIT CORPORATION: Amended Joint Plan Confirmed by Judge
UNITI GROUP: Fitch Raises LT IDR to B+, Outlook Stable
VERITAS FARMS: Commences $4 Million Private Offering
VERITY HEALTH SYSTEM: Prime Takes Over St. Francis, OKs Conditions
VERNON 4540: Brent Carrier-Owned Entity Sent to Chapter 11
VILLA ABRIGO: U.S. Trustee Objects to Disclosure Statement
VOYAGER AVIATION: Moody's Cuts CFR to B3 & Unsec. Rating to Caa2
WALL STREET: Class VII Unsecureds to be Paid in Full over 11 Years
WESTERN HOST: Puerto Rico Tourism Objects to Disclosure Statement
WILDCATTER DISPOSAL: Voluntary Chapter 11 Case Summary
WILDWOOD VILLAGES: Seeks to Hire Shapiro Blasi as Legal Counsel
WINDSTREAM HOLDINGS: Completes $4 Billion Restructuring
WORLD CLASS: At Least 3 Units Have Filed for Chapter 11 Protection
YACHT CLUB: Seeks to Hire Lashly & Baer as Counsel
YONG KANG: Case Summary & 10 Unsecured Creditors
[*] Abandoned Mall Spaces Could Become Become Amazon Hubs
[*] Bankruptcies Expected to Hit 10-Year High Due to Pandemic
[*] Fashion World Hit Hard by Retail Bankruptcies
[*] Fed. Govt. Support Can't Stop Next Bankruptcy Wave, Says Lasry
[*] Hawaii Bankruptcy Filings Virtually Flat in July 2020
[*] New Chapter 11 Law Could Be Lifeline of Small Businesses
[*] Overview of the Insolvency, Restructuring and Dissolution Act
[*] Retailers and Fashion Brands Severely Affected by COVID-19
[*] Surge of U.S. Energy Bankruptcies Continue
[*] U.S. Economic Contraction Affects Petroleum Firms Significantly
[*] U.S. Hospitals 'Unfile' Bankruptcy to Obtain Federal Aid
[^] BOND PRICING: For the Week from September 21 to 25, 2020
*********
06-010 GRIDLEY: Property Sale to Pay Claims in Full
---------------------------------------------------
06-010 Gridley Business Trust filed with the U.S. Bankruptcy Court
for the District of Nevada a Plan of Reorganization and a
Disclosure Statement on August 7, 2020.
The Debtor holds a 66.93% interest in one parcel of real property
located in City of Gridley, California consisting of 237.8 acres
(the Property). All owners of the Property, including Debtor, plan
to market and sell the property to satisfy property taxes owed to
the County of Butte Office of Treasury.
The Property is estimated to be valued at $6,000,000, with Debtor's
percentage of interest in the Property valued at $4,015,800. If a
sale could be completed for an amount near to the estimation and
appraised value of the Property, the estate would realize
sufficient funds to meet 100% of the creditor claims, including the
property tax claim of $1,685,697.
The Debtor estimates that the purchase price of the current sale of
the Property will provide sufficient income to satisfy the
outstanding creditor's claims entirely. All proceeds will be
allocated to pay priority and secured tax debts upon the sale of
the property. The Debtor intends to liquidate all remaining assets
and terminated operations under the supervision of the U.S.
Bankruptcy Court. Subsequent to payment in full of all
administrative and unsecured creditor claims, remaining sales
proceeds will be distributed to the investors as return of
investment.
A full-text copy of the Disclosure Statement dated August 7, 2020,
is available at https://tinyurl.com/y3kvrjtf from PacerMonitor.com
at no charge.
The Debtor is represented by:
Timothy P. Thomas, Esq.
LAW OFFICE OF TIMOTHY THOMAS, LLC
1771 E. Flamingo Rd. B-212
Las Vegas, NV 89119
Tel: (702) 227-0011
E-mail: tthomas@tthomaslaw.com
About 06-010 Gridley Business Trust
06-010 Gridley Business Trust, based in Las Vegas, NV, filed a
Chapter 11 petition (Bankr. D. Nev. Lead Case No. 14-14028) on June
6, 2014. The Hon. August B. Landis oversees the case.
In its petition, the Debtor disclosed $1.21 million in assets, and
$694,384 in liabilities. The petition was signed by Peter J.
Becker, managing member of Trustee, Mesa Asset Management, LLC.
The LAW OFFICES OF TIMOTHY P. THOMAS, LLC, serves as bankruptcy
counsel to the Debtor.
20 EAST 76TH STREET: Chapter 7 Trustee Terminates Surrey Lease
--------------------------------------------------------------
Kevin Sun, writing for The Real Deal, reports that in late April
2020, Ashkenazy Acquisitions took the unusual step of pushing the
Surrey Hotel into bankruptcy to protect its debt interest in the
shuttered property from being wiped out by a ground lease default.
Ashkenazy's involuntary petition was granted in July but the ground
lease on the Upper East Side hotel is now likely to be terminated
anyway.
In a court filing, the Chapter 7 trustee for the hotel's estate
said the lease on the 190-room Surrey "provides little to no value
to the debtor's estate, while simultaneously creating a substantial
administrative burden." The trustee added that ground rent arrears
were "substantial in this case" and continue to accrue.
Ground rent currently costs the hotel $525,000 a month, and back
rent has grown to over $2.6 million since the hotel was shut down
at the start of the pandemic. The property at 20 East 76th Street
has also amassed another $1.8 million in tax arrears, the motion
notes.
The trustee has signed a stipulation with the owners of the ground
under the hotel, which would surrender possession of the premises
to them pending the court's approval.
Although Ashkenazy had originally petitioned for a Chapter 11
bankruptcy to reorganize the hotel LLC, the bankruptcy court
converted it to a Chapter 7 liquidation case, and appointed a
trustee for the hotel's estate.
The Chapter 7 conversion was caused by Ashkenazy and the hotel's
inability to agree on a budget needed to fund a Chapter 11
proceeding, Crain’s reported last month.
The hotel, owned by Denihan Hospitality Group, "has no funds or
financing to re-open or operate going forward," its attorneys wrote
in court filings, which would prevent the LLC from remaining as a
debtor in possession.
The ground owners' lawyers noted that this bankruptcy case was
"atypical in many respects." Ashkenazy noted in its petition that
bankruptcy court was "the only available forum for relief" at the
time of the April filing because other courts were closed by the
pandemic.
"Typically, a ground lease mortgagee, like [Ashkenazy], would act
to preserve its collateral — the ground lease — by funding a
debtor's costs and protecting the leasehold," the attorneys wrote.
They concluded that it could not be a Chapter 11 case unless
Ashkenazy commited to funding it himself.
The ground lessor is a partnership that once included the late
George Kaufman, head of Kaufman Organization, property records and
court filings show. A representative for the partnership declined
to comment.
Representatives for Ashkenazy, Denihan and the trustee did not
respond to requests for comment.
In court filings, Ashkenazy wrote that it was prepared to fund
taxes for the hotel on a monthly basis, but refused to fund ground
rent payments, arguing that "entitlement to rents is highly
disputed at this point."
Ashkenazy was also planning to file an adversary proceeding against
the ground lessor in bankruptcy court, alleging a "history of bad
faith" going as far back as 2014. That was when the ground lessor
withheld consent for a deal that would have seen Ashkenazy acquire
a 49 percent interest in the hotel from Denihan.
Ashkenazy sued Denihan — but not the ground lessor — in 2014
over its failure to close the deal, and the complaint was dismissed
after a judge found that Denihan had made a "commercially
reasonable" effort to get consent from the ground lessor.
According to the proposed adversary complaint, which has not been
filed but was included as an exhibit for "informational purposes,"
the ground lessor also allegedly prevented two other sales from
going through.
The complaint alleges that it arbitrarily rejected sales offers
"despite its awareness that the financial health of the Hotel was
declining and continued to erode" even prior to the pandemic.
The $45 million leasehold mortgage on the hotel was originally
provided by the Canadian Imperial Bank of Commerce, but was
acquired by Ashkenazy in 2018, when it was already in default —
"at a steep discount" according to the ground lessor's court
filings.
The total amount owed on the loan, including interest and other
fees, is about $60 million according to Ashkenazy.
If and when the ground lease is terminated, it is unclear what
other assets the hotel LLC possesses, with which it would be able
to pay back its numerous unsecured creditors.
About Surrey Hotel
Part of the Denihan Hospitality Group, the Surrey Hotel is a luxury
hotel at 20 East 76th Street, in Manhattan, New York. It was built
in 1926 as residence hotel. It was the home to numerous New York
celebrities. When it was re-created, it collaborated with renowned
interior designer Lauren Rottet of Rottet Studio to maintain the
integrity of its history while modernizing the hotel.
Denihan's 20 East 76th Street Co., LLC, operates the Surrey Hotel
-- http://www.thesurrey.com/-- pursuant to a long term ground
lease by and between 22 East 76th Street, Inc., as
predecessor-in-interest to ground lessor Surrey Realty Associates
LLC, and Lyden Hotel Co., as predecessor-in-interest to 20 East 76,
for a term which commenced in 1971 and is currently ending in
2046.
Surrey NY LLC filed an involuntary Chapter 11 petition for 20 East
76th Street Co., LLC (Bankr. S.D.N.Y. Case No. 20-11007) on April
26, 2020.
Kevin J. Nash, Esq., at GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP,
represents Surrey NY.
2014 S&S INVESTMENTS: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: 2014 S&S Investments, LLC
1780 Peach Place
Concord, CA 94518
Business Description: 2014 S&S Investments, LLC is a privately
held company in the healthcare business.
Chapter 11 Petition Date: September 24, 2020
Court: United States Bankruptcy Court
Northern District of California
Case No.: 20-41558
Judge: Hon. William J. Lafferty
Debtor's Counsel: David A. Boone, Esq.
LAW OFFICES OF DAVID A. BOONE
1611 The Alameda
San Jose, CA 95126
Tel: 408-291-6000
Email: ecfdavidboone@aol.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Steve Chou, managing member.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/OKFKVBI/2014_SS_Investments_LLC__canbke-20-41558__0001.0.pdf?mcid=tGE4TAMA
24 HOUR FITNESS: Bonuses Approved After $4.5M Reduction
-------------------------------------------------------
Bloomberg News reports that gym operator 24 Hour Fitness Worldwide
Inc. got court approval to offer bonuses to high-performing
managers and employees after reducing the awards by about $4.5
million to address government and creditor concerns.
"Significant changes were made" that would benefit the estate,
Judge Karen B. Owens of the U.S. Bankruptcy Court for the District
of Delaware said Friday in approving the key employee incentive and
retention programs.
The U.S. Trustee's Office, the Justice Department's bankruptcy
watchdog, initially objected to the bonuses, calling them
"excessive and unreasonable." The performance targets also were
too easy to meet, the U.S. Trustee said.
The company modified the programs to address the Trustee's
concerns, as well as those of unsecured creditors and prepetition
lenders, 24 Hour Fitness' attorney, Ryan Preston Dahl of Weil,
Gotshal & Manges LLP told the court. The changes resolved all
outstanding concerns, he said.
The third- and fourth-quarter targets in the modified key employee
incentive program will be harder to achieve and a "true 'stretch'"
for employees to meet, Daniel Hugo, 24 Hours’ chief restructuring
officer, said in a court declaration filed Thursday.
After modifications, the total budgeted for the program dropped to
$6.08 million from $8.81 million.
Total awards in the key employee retention program dropped to $4.43
million from $6.15 million.
The San Ramon, Calif.-based fitness chain filed for bankruptcy in
June after its gyms shut down in the wake of the Covid-19
pandemic.
About 24 Hour Fitness
24 Hour Fitness Worldwide, Inc., owns and operates fitness centers
in the United States. As of March 31, 2017, the company operated
426 clubs serving approximately 3.6 million members across 13
states and 23 markets, predominantly in California, Texas and
Colorado. For the 12 months ended March 31, 2017, the company
generated total revenue of about $1.4 billion. In May 2014, 24 Hour
Fitness was acquired by affiliates of AEA Investors LP, Fitness
Capital Partners and Ontario Teachers' Pension Plan for a total
purchase price of approximately $1.8 billion.
24 Hour Fitness Worldwide and its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-11558) on June 15,
2020. 24 Hour Fitness was estimated to have $1 billion to $10
billion in assets and liabilities as of the bankruptcy filing.
The Hon. Karen B. Owens is the case judge.
The Debtors tapped Weil, Gotshal & Manges, LLP as lead bankruptcy
counsel; Pachulski Stang Ziehl & Jones, LLP as local counsel; FTI
Consulting, Inc. as financial advisor; Lazard Freres & Co. LLC as
investment banker; and Prime Clerk, LLC as claims agent.
2MORROWS SOLUTIONS: Case Summary & 15 Unsecured Creditors
---------------------------------------------------------
Debtor: 2morrows Solutions 2day, LLC
Attn: Jacky Veasly
1421 Parrish Street
Philadelphia, PA 19130
Chapter 11 Petition Date: September 25, 2020
Court: United States Bankruptcy Court
Eastern District of Pennsylvania
Case No.: 20-13870
Judge: Hon. Eric L. Frank
Debtor's Counsel: Jeffrey M. Carbino, Esq.
JENSEN BAGNATO, P.C.
1500 Walnut Street - Suite 1920
Philadelphia, PA 19102
Tel: 215-546-4700
Email: jeffrey@jensenbagnatolaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jacky Veasly, member.
A copy of the petition containing, among other items, a list of the
Debtor's 15 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/REKOUQI/2morrows_Solutions_2day_LLC__paebke-20-13870__0001.0.pdf?mcid=tGE4TAMA
53 STANHOPE: Seeks to Hire Robinson Brog as Special Counsel
-----------------------------------------------------------
53 Stanhope, LLC and its affiliates filed a supplemental
application seeking authorization to expand the scope of the
retention of Robinson Brog Leinwand Greene Genovese & Gluck P.C. to
act as their special counsel.
The Debtors have requested that Robinson Brog assist them with the
following matters, in addition to their previously retained role:
a. assist the Debtors with the closing on the exit financing
proposed under the Plan (the Exit Financing);
b. assist the Debtors with the transfer of any real property
pursuant to the Exit Financing; and
c. assist the Debtors with confirming the Plan on an as
necessary basis, including, but not limited to the post-trial
briefing dealing with the nonbankruptcy banking issue brief the
Court requested and other similar issues in the unlikely event
there are other non-bankruptcy briefs required.
Robinson Brog's hourly rates are:
Mitchell Greene $750
Fred B. Ringel $725
Henry E. Forcier $500
Partner $425 and $750
Associates $350 and $475
Paraprofessionals $220 and $275
A. Mitchell Greene, Esq., shareholder of Robinson Brog, assures the
court that the firm neither holds nor represents any interest
adverse to the Debtors and their bankruptcy estates.
The firm can be reached through:
A. Mitchell Greene, Esq.
Robinson Brog Leinwand Greene
Genovese & Gluck P.C.
875 Third Avenue
New York, NY 10022
Phone: (212) 603-6315
Fax: (212) 956-2164
About 53 Stanhope LLC
53 Stanhope LLC and 17 affiliates are primarily engaged in renting
and leasing real estate properties.
53 Stanhope LLC and its affiliates filed voluntary petitions
seeking relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 19-23013) on May 20, 2019. The petitions
were signed by David Goldwasser, authorized signatory of GC Realty
Advisors.
Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky, LLP,
represents the Debtors.
Each of the Debtors is an affiliate of 73 Empire Development LLC,
which sought bankruptcy protection (Bankr. S.D.N.Y. Case No.
19-22285) on Feb. 21, 2019. Its case is not jointly administered
with those of the Debtors.
Backenroth Frankel also serves as counsel to 73 Empire Development.
5CR TRAILER: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: 5CR Trailer Sales, Inc.
FDBA The Big Blue Mule
1428 Madison Avenue
Nampa, ID 83687
Business Description: 5CR Trailer Sales, Inc. specializes in
selling custom horse and stock trailers.
Chapter 11 Petition Date: September 23, 2020
Court: United States Bankruptcy Court
District of Idaho
Case No.: 20-00854
Judge: Hon. Noah G. Hillen
Debtor's Counsel: D. Blair Clark, Esq.
LAW OFFICE OF D. BLAIR CLARK, PC
967 E. Parkcenter Blvd., #282
Boise, ID 83706
Tel: (208) 475-2050
Email: dbc@dbclarklaw.com
Total Assets: $265,952
Total Liabilities: $1,883,984
The petition was signed by CW Conner, CEO.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/ZBHX2FY/5CR_Trailer_Sales_Inc__idbke-20-00854__0001.0.pdf?mcid=tGE4TAMA
A.R.M. OPCO: Committee Taps Levinson LLP as Legal Counsel
---------------------------------------------------------
The official committee of unsecured creditors of A.R.M. OPCO Inc.
seeks approval from the U.S. Bankruptcy Court for the Northern
District of Ohio to hire Levinson LLP as its legal counsel.
The services that Levinson will render are as follows:
(a) consult with the committee concerning the administration
of Debtor's Chapter 11 case;
(b) advise the committee with respect to the investigation of
the acts, assets, liabilities, and financial condition of Debtor;
(c) advise the committee of its fiduciary duties and
responsibilities to the unsecured creditors and direct necessary
communication with its constituents;
(d) take necessary actions to aid the committee in protecting
the assets of Debtor's estates, and prepare legal documents;
(e) evaluate and pursue claims;
(f) ensure that all possible funds are recovered from
avoidance actions;
(g) represent the committee's interest in hearings;
(h) review all court proceedings commenced in Debtor's
bankruptcy case;
(i) monitor actions taken, or proposed to be taken, by Debtor
in connection with the disposition or sale of property of the
estate;
(j) perform other legal services for the committee;
The hourly rates for the firm's attorneys are as follows:
Jeffrey M. Levinson, Principal $350
Jean R. Robertson, Of Counsel $350
Jeffrey Levinson, Esq. 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:
Jeffrey M. Levinson, Esq.
Levinson LLP
55 Public Square, Suite 1750
Cleveland, OH 44146
Telephone: (216) 514-4935
Email: jml@jml-legal.com
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.
On Sept. 2, 2020, the Office of the U.S. Trustee appointed a
committee of unsecured creditors. The committee is represented by
Levinson LLP.
ACADIAN CYPRESS: Newman Lumber Objects to Disclosure Statement
--------------------------------------------------------------
Newman Lumber Company, a creditor of debtor Acadian Cypress &
Hardwoods, Inc., objects to the Disclosure Statement in support of
the Chapter 11 Plan of Reorganization of the Debtor.
Newman Lumber Company objects to the Disclosure Statement as it
fails (i) to adequately identify, describe, or provide estimates of
administrative claims; (ii) to adequately identify or describe the
sources of funds to be used to pay those claims; (iii) to provide
adequate information necessary for unsecured creditors to estimate
recovery pursuant to the terms of the proposed plan; and (iv) to
provide a liquidation analysis.
Newman Lumber Company also adopts the objection to the Disclosure
Statement filed on behalf of Home Bank and reserves the right to
supplement or amend this objection and raise any further objections
at the hearing regarding the Disclosure Statement.
A full-text copy of Newman Lumber's objection to the Disclosure
Statement dated August 6, 2020, is available at
https://tinyurl.com/y4wax77k from PacerMonitor.com at no charge.
Counsel for Newman Lumber:
CHRISTOPHER T. CAPLINGER
601 Poydras Street, Suite 2775
New Orleans, LA 70130
Telephone: (504) 568-1990
Facsimile: (504) 310-9195
E-mail: ccaplinger@lawla.com;
bkadden@lawla.com
About Acadian Cypress
Acadian Cypress & Hardwoods, Inc.
--http://www.acadianhardwoods.net/-- manufactures lumber, plywood,
siding, shingles, flooring, fencing and molding profiles.
Acadian Cypress sought Chapter 11 protection (Bankr. E.D. La. Case
No. 19-12205) on April 15, 2019. In the petition signed by Frank
Vallot, president, the Debtor was estimated to have assets and
liabilities ranging from $1 million to $10 million. Judge Jerry A.
Brown oversees the case.
The Debtor tapped Heller, Draper, Patrick, Horn & Manthey, LLC as
its legal counsel, and Raizner Slania LLP as its special counsel.
AGF MACHINERY: Hires Saltmarsh Cleaveland as Financial Advisor
--------------------------------------------------------------
AGF Machinery, LLC, seeks authority from the United States
Bankruptcy Court for the Middle District of Alabama to hire
Saltmarsh, Cleaveland & Gund as its financial advisor.
AGF Machinery requires Saltmarsh to:
a. provide consulting services pertaining to the use of
QuickBooks accounting software for recording accounting
transactions of the Debtor;
b. assist management with the reporting requirements in the
bankruptcy case;
c. advise and assist management with respect to establishing
prospective financial budgets for ongoing operations, including the
preparation of a plan of reorganization; and
d. perform other work as may be requested by management.
Saltmarsh's hourly rates will range from $110 to $405 per hour for
services relating to the bankruptcy case.
Charles E. (Chuck) Landers, CPA, shareholder at Saltmarsh, assures
the court that the firm is disinterested as such term is defined by
§101(14) of the Bankruptcy Code.
The firm can be reached through:
Charles E. (Chuck) Landers, CPA
Saltmarsh, Cleaveland & Gund
34 Walter Martin Road
Fort Walton Beach, FL 32548
Local: (850) 243-6713
Fax: (850) 243-4137
Email: chuck.landers@saltmarshcpa.com
About AGF Machinery, LLC
AGF Machinery, LLC -- https://agfmachinery.com -- is engaged in
selling and renting construction equipment, aerial work platforms &
heavy duty equipment. The company offers a full line of
construction equipment in its sales and rental inventories from
Wacker Neuson, ASV, Skyjack, Toro, and Husqvarna.
AGF Machinery, LLC, filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ala. Case No.
20-11029) on August 12, 2020. In the petition signed by Jeffrey Lee
Washington, member, the Debtor estimated $10 million to $50 million
in both assets and liabilities.
Edward J. Peterson, Esq. at STICHTER, RIEDEL, BLAIN & POSTLER,
P.A., repesents the Debtor as counsel.
ALGON CORPORATION: Seeks to Hire Alonso & Garcia as Tax Accountant
------------------------------------------------------------------
Algon Corporation seeks authority from the US Bankruptcy Court for
the Southern District of Florida to hire Domingo Alonso, CPA, and
the accounting firm of Alonso & Garcia, P.A. as its tax
accountant.
The professional services that Alonso will render are preparation
of Debtor's 2019 federal income tax return and any other
tax-related services necessary.
The Debtor will pay Alonso a flat fee of $5,500 for its services.
Mr. Alonso assures the court that his firm are disinterested as
required by 11 U.S.C. Sec. 327(a).
The firm can be reached through:
Domingo Alonso, CPA,
Alonso & Garcia, P.A.
5805 Blue Lagoon Drive, Suite 200
Miami, FL 33126
Phone: +1 305-448-3898
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.
ALKHAIRY PROPERTIES: Allen County Treasurer Objects to Disclosure
-----------------------------------------------------------------
William Royce, the Treasurer of Allen County, Indiana, objects to
the adequacy of the information in the Disclosure Statement filed
by Debtor Alkhairy Properties, LLC, and in support hereof, states
as follows:
* The Disclosure Statement does not state the current
relationship, if any, between the Debtor and Alkhair Hospitality,
LLC, including whether Alkhairy Hospitality, LLC is a tenant of the
Debtor and how any relationship between the entities may affect the
Debtor's ability to meet its obligations under its proposed Plan of
Reorganization.
* The Allen county Treasurer's claim is based on real property
taxes and, therefore, is secured by a first priority lien on the
Debtor's real property located at 5710 Coventry Lane, Fort Wayne,
Indiana 46804. Moreover, such lien is senior in priority to the
mortgage lien of Garret State Bank.
* It appears from the cash flow projections attached to the
Disclosure Statement that the Debtor intends to pay its property
tax obligations from the cash flow generated by its operations, but
this is not clear, particularly with respect to the delinquent
taxes, since neither the Disclosure Statement nor the Plan of
Reorganization mention the delinquent taxes owned by the Debtor.
A full-text copy of Allen County Treasurer's objection to
disclosure statement dated August 6, 2020, is available at
https://tinyurl.com/yxrrkcdd from PacerMonitor.com at no charge.
Attorney for Allen County Treasurer:
KIPLINGER LAW FIRM, P.C.
Roy F. Kiplinger
About Alkhairy Properties
Alkhairy Properties LLC sought Chapter 11 protection (Bankr. N.D.
Ind. Case No. 19-10942) on May 24, 2019, estimating less than $1
million in assets and up to $50,000 in liabilities. R. David
Boyer II, Esq., at BOYER & BOYER, is the Debtor's counsel.
ALL CARE NOW: Unsecured Creditors to Have 100% Recovery in Plan
---------------------------------------------------------------
Home Health and Infusion Options, Inc., ("HHIO") and All Care Now,
LLC ("ACN") filed with the U.S. Bankruptcy Court for the Northern
District of Illinois, Eastern Division, a Disclosure Statement with
respect to Plan of Reorganization dated August 7, 2020.
The Debtors intend to reorganize their businesses under the Plan
by: (1) growing HHIO's healthcare administrative services that were
initiated after the Petition Date; (2) concluding the Collections
Litigation and Lease Litigation, and collecting the Net Litigation
Recovery; and (3) collecting the Net Receivables Collection.
Class 3 consists of the Allowed General Unsecured Claims, which are
impaired under the Plan. Pro Rata distributions of the ACN Excess
Available Funds and the HHIO Excess Available Funds will be made by
the Reorganized Debtors to the holders of Allowed General Unsecured
Claims in Class 3 from time to time on dates determined by the
Reorganized Debtors whenever the aggregate ACN Excess Available
Funds and HHIO Excess Available Funds total at least $10,000. The
Debtors estimate that the Allowed General Unsecured Claims will not
exceed $1,114,861 as of the Effective Date. The Intercompany
Claims will be extinguished. The estimated percentage of recovery
of the Allowed General Unsecured Claims is 100%.
Class 5 consists of Allowed Equity Securities of the Debtors which
will revest in each Reorganized Debtor as of the Effective Date
based on the agreement of the holders of the Debtor's Equity
Securities to subordinate their Allowed Claims in order to fund
reorganization expenses.
The Substantive Consolidation Order will contain one or more
provisions substantively consolidating the Estates into the Estate
of HHIO. Upon the Effective Date, and except as otherwise provided
in the Plan: (i) any obligation of either Debtor and all guaranties
thereof executed by the other Debtor will be treated as a single
obligation and any obligation of both Debtors, and all multiple
Claims against such entities on account of such joint obligations,
will be treated and allowed only as a single Claim against the
consolidated Debtors and (ii) each Claim against either Debtor will
be deemed a Claim against the consolidated Debtors and will be
deemed a single Claim against and a single obligation of the
consolidated Debtors.
Payments required by the Plan will be made from Net Litigation
Recoveries, Net Receivables Recoveries and the contributed proceeds
from the Reorganized Debtors' operations.
A full-text copy of the Disclosure Statement dated August 7, 2020,
is available at https://tinyurl.com/y38qeznk from PacerMonitor.com
at no charge.
Counsel for the Debtors:
FREEBORN & PETERS LLP
Shelly A. DeRousse
Elizabeth L. Janczak
Shira R. Isenberg
311 South Wacker Drive, Suite 3000
Chicago, Illinois 60606-6677
Telephone: (312) 360-6000
Facsimile: (312) 360-6250
E-mail: sderousse@freeborn.com
ejanczak@freeborn.com
sisenberg@freeborn.com
About All Care Now LLC and HHIO
All Care Now, LLC ("ACN") is a health care provider in Chicago,
Illinois. ACN is in the business of coordinating necessary clinical
care and healthcare services between providers and patients
including administrative functions, insurance authorizations,
pharmaceutical services, and nursing and physical therapy
management. ACN's primary customers are home-health agencies. It
does not contract directly with hospitals or doctors.
Home Health and Infusion Options, Inc., also known as HHIO --
https://www.hhio.net/ -- provides management services to ACN,
including the services of Christopher Kujawski and Devin Barrett as
managers, use of facilities and equipment, marketing support, and
the use of numerous software licenses used in the operation of
ACN's business.
ACN and HHIO sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ill. Lead Case No. 19-33490) on Nov. 25, 2019.
The petition was signed by Christopher Kujawski, manager/chief
financial officer. At the time of the filing, ACN was estimated to
have $1 million to $10 million in both assets and liabilities,
while HHIO was estimated to have $100,000 to $500,000 in assets and
$1 million to $10 million in debt. The Hon. Deborah L. Thorne is
the case judge. HHIO is represented by FREEBORN & PETERS LLP.
ALL TEXAS ELECTRICAL: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: All Texas Electrical Contractors, Inc.
6013 Gardendale Dr.
Houston, TX 77092
Business Description: All Texas Electrical Contractors, Inc. --
http://www.alltexaselectrical.net--
provides electrical installation and
services.
Chapter 11 Petition Date: September 25, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 20-34656
Judge: Hon. Eduardo V. Rodriguez
Debtor's Counsel: Annie E. Catmull, Esq.
O'CONNOR WECHSLER PLLC
4400 Post Oak Pkwy, Ste. 2360
Houston, TX 77027
Tel: (201) 814-5977
Email: aecatmull@o-w-law.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Arthur Montemayor, 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/AJVHG2A/All_Texas_Electrical_Contractors__txsbke-20-34656__0001.0.pdf?mcid=tGE4TAMA
ASCENA RETAIL: Moody's Rates $312MM Secured DIP Loan 'B2'
---------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the $312 million
senior secured super-priority debtor-in-possession (DIP) term loan
facility of Ascena Retail Group, Inc. (DIP) as
Debtor-in-Possession. In addition to the DIP term loan facility,
Ascena will also enter into an unrated $400 million senior secured
super-priority DIP asset-based revolving credit facility.
Proceeds from the DIP facilities as well as a portion of the
company's balance sheet cash ($546 million as of August 1, 2020)
will be used to fund the company through the Chapter 11 process.
Ascena and various subsidiaries filed for Chapter 11 on July 23,
2020. Moody's withdrew all ratings of Ascena following the filing.
The current rating is being assigned on a point-in-time basis and
will not be monitored going forward.
Assignments:
Issuer: Ascena Retail Group, Inc. (DIP)
Senior secured super-priority term loan, assigned B2
RATINGS RATIONALE
The B2 rating assigned to Ascena's DIP term loan facility primarily
reflects the estimated collateral coverage of the loan, as well as
structural considerations including upstream and downstream
guarantees, priority of liens, the nature of the collateral, and
the covenants. Other considerations include the nature of the
bankruptcy and reorganization, and the size of the DIP relative to
pre-petition debt.
The rapid spread of the coronavirus outbreak, deteriorating global
economic outlook, 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. Ascena's exposure to volatile asset valuations, US
apparel spending, and physical store traffic in these unprecedented
operating conditions impacts the DIP's estimated collateral
coverage.
The Chapter 11 filing was driven by persistent earnings declines
that were exacerbated by the coronavirus pandemic, as well as the
company's upcoming August 2022 debt maturities and high debt load.
Over the past several years the company has faced significant
challenges due to its operations in the women's apparel sector
characterized by high fashion risk, intense competition and margin
pressures from e-commerce investments. In addition, Ascena's
execution missteps, mature brands and lagging investment in product
and marketing provided a headwind to operating performance prior to
the pandemic. The company entered 2020 with high leverage of 8.3x
as of February 1, 2020 pro-forma for the subsequent revolver draw.
The company reached an agreement to reduce its total debt burden by
around $1.2 billion, or almost 75%, with 94.6% of its pre-petition
term loan lenders. The bankruptcy process will enable Ascena to
move to a more manageable capital structure and reduce lease and
trade payable liabilities. The company expects to emerge from
bankruptcy on or around October 31, 2020.
The pre-petition capital structure consisted of a $500 million ABL
revolver with approximately $332 million borrowings including
outstanding letters of credit, and a $1,272 million senior secured
term loan. The DIP facilities represent approximately 24% of
pre-petition debt. Under the prearranged plan, the pre-petition ABL
was rolled into the DIP ABL credit facility, which will be replaced
by a $400 million exit ABL facility upon emergence from bankruptcy.
The DIP term loan consists of $150 million of "new-money" financing
and a $162 million roll-up balance from the existing term loan.
Term loan lenders that provide the "new money" DIP term loan will
receive 45% of the equity in the reorganized Ascena. All
pre-petition term loan claims will receive their pro-rata share of
$88 million last-out exit term loans and 55% of common shares in
the reorganized Ascena. Upon exit, the DIP term loan will be either
paid in cash in full or convert to a $312 million first-out exit
term loan. All pre-petition common equity interests will be
cancelled.
The DIP term loan contains upstream guarantees from substantially
all of the company's subsidiaries. It has a senior priority to the
ABL with respect to 100% equity interest in intellectual property,
real estate assets and equipment, and a junior claim on the ABL
priority collateral, which includes cash, inventory and accounts
receivable. Moody's estimates collateral coverage for the DIP term
loan is around 1 time and is mainly derived from the value of the
intellectual property and distribution centers.
The DIP term loan contains a minimum liquidity covenant of $100
million at all times and a net cash flow test subject to a 20%
variance to budget in any cumulative 4-week period, if liquidity
falls below $150 million. Additionally, the agreement contains
negative covenants including limitations on indebtedness, liens,
restricted payments, investments and other limitations.
The DIP term loan will mature the earlier of 6 months after the
transaction close or exit from Chapter 11 bankruptcy proceedings.
Prior to its bankruptcy filing, Ascena Retail Group, Inc. (Ascena),
headquartered in Mahwah, New Jersey, operated close to 2,800
women's specialty retail stores throughout the United States,
Canada and Puerto Rico under the brands LOFT, Ann Taylor, Justice,
Lane Bryant, and Catherines. Revenue for LTM period ended February
1, 2020 was approximately $4.7 billion (excluding discontinued
operations).
The principal methodology used in this rating was
Debtor-in-Possession Lending published in June 2018.
This rating is assigned on a point-in-time basis and will be
withdrawn as soon as practicable, before which it is subject to
monitoring.
ASHBURY HOLDINGS: Taps Colliers International as Real Estate Broker
-------------------------------------------------------------------
Ashbury Holdings LLC seeks authority from the U.S. Bankruptcy Court
for the Western District of Virginia to employ Colliers
International Virginia, LLC as its real estate broker.
Colliers International Virginia will render real estate brokerage
and other marketing services to the Debtor as needed throughout the
course of these Chapter 11 proceedings.
The broker will receive a commission equal to 4 percent of the
gross purchase price for the Premises.
Colliers International Virginia is a "disinterested person," as
defined in Sec. 101(14) of the Bankruptcy Code and as required by
Sec. 327(a) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Robert Stockhausen
Colliers International Virginia, LLC
5316 Patterson Ave,
Richmond, VA 23226
Phone: 804 289 2168
About Ashbury Holdings
Ashbury Holdings LLC, based in Ruckersville, VA, filed a Chapter 11
petition (Bankr. W.D. Va. Case No. 20-61135) on Aug. 10, 2020. In
the petition signed by Morris Peterson, managing member, the Debtor
disclosed $4,324,947 in assets and $5,208,835 in liabilities. The
Hon. Rebecca B. Connelly presides over the case. WHARTON ALDHIZER
& WEAVER PLC, serves as bankruptcy counsel.
ASP NAVIGATE: Moody's Alters Outlook on B2 CFR to Negative
----------------------------------------------------------
Moody's Investors Service changed ASP Navigate Acquisition Corp.'s
outlook to negative from stable. At the same time, Moody's affirmed
the company's B2 Corporate Family Rating, B2-PD Probability of
Default Rating and B2 first lien credit facility ratings.
The change of outlook follows the company's decision to upsize its
senior secured first lien term loan by $25 million to $425 million.
The upsize will increase the company debt/EBITDA by approximately
0.4x leaving minimal cushion for any misstep in the execution of
its separation from NN, Inc. The outlook change also reflects a
more aggressive financial policy by its private equity owners as
the initial level of equity is declining.
ASP will acquire the Life Sciences division of NN, Inc. (Caa2 on
Review for Upgrade) for cash consideration of approximately $755
million. Cash sources include proceeds from the first lien credit
facilities and approximately $365 million of equity provided by
American Securities LLC. In addition, ASP may also make an
additional payment to NN, Inc. of up to $70 million in 2023 on
achievement of certain EBITDA targets.
The following ratings were affirmed:
ASP Navigate Acquisition Corp.
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
Proposed $60 million senior secured first lien revolving credit
facility at B2 (LGD4)
Proposed $425 million (includes $25 million upsize) senior secured
first lien term loan at B2 (LGD4)
Outlook Action:
ASP Navigate Acquisition Corp.
Outlook changed to negative from stable
RATINGS RATIONALE
ASP's B2 Corporate Family Rating reflects the company's moderately
high financial leverage with debt/EBITDA in the mid-five times
range as of June 30, 2020. Moody's expects debt/EBITDA will rise to
the high six times range by the end of 2020 but will improve over
the course of 2021 as sales volumes recover. The rating also
reflects the company's high customer concentration, with its 6
largest customers accounting for approximately 80% of revenues and
high product concentration, with 70% of revenues from orthopedic
related products. ASP's ratings reflect the business risks
associated with contract manufacturing, including potential
fluctuations in medical device customer demand and inventory
levels, less favorable payment terms offered by large medical
device customers and industrywide pricing pressure. The rating also
reflects the company's lack of history as a stand-alone company and
execution risk associated with the separation from NN, Inc. and
Moody's expectations that financial policies will remain aggressive
due to ownership by a private equity sponsor.
ASP's B2 CFR benefits from the company's reasonable scale in the
highly fragmented medical device contract manufacturing industry,
strong market position and relatively good profit margins. While
the company has high customer concentration, the company sells a
wide range of products to its key customers. Further, regulatory
constraints make switching costs high for its customers, resulting
in long-term sticky relationships between ASP and its customers.
ASP also benefits from good liquidity as Moody's expects the
company will generate sustained free cash flow and will have access
to an undrawn $60 million revolving credit facility.
Medical device companies face moderate social risk primarily
related to responsible production and satisfactorily responding to
social and demographic trends. For ASP, the social risks are
primarily associated with responsible production including
compliance with regulatory requirements for the safety of medical
devices as well as adverse reputational risks arising from recalls
associated with manufacturing defects.
The outlook is Negative. Moody's expects ASP will see a recovery in
sales volumes over the course of 2021 such that revenues will
approximate 2019 levels as medical procedure volumes recover.
Moody's expects debt/EBITDA will approach the mid-five times range
over the course of 2021. The Negative outlook also incorporates the
expectation that the company will be able to smoothly transition to
a stand-alone company as it completes the separation from NN, Inc.
The proposed first lien term loan is expected to have no financial
maintenance covenants while the proposed revolving credit facility
will contain a springing maximum first lien leverage ratio that
will be tested when the revolver is more than 35% drawn. In
addition, the first lien credit facility contains incremental
facility capacity up to the greater of $79 million or 100% of
consolidated EBITDA. There are no "blocker" provisions providing
additional restrictions on top of the covenant carve-outs to limit
collateral leakage through transfers of assets to unrestricted
subsidiaries. There are leverage-based step-downs in the asset sale
prepayment requirement to 50% and 0% if the First Lien Leverage
Ratio is equal to or less than 0.5x and 1.00x, inside the closing
date First Lien Leverage Ratio, respectively.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company successfully executes the
separation from NN, Inc. and demonstrates margin expansion as a
standalone company. Further growth in scale and diversification
would be positive credit factors. Quantitatively, ratings could be
upgraded if financial policies are balanced and the company
sustains debt/EBITDA below 4.5 times.
Ratings could be downgraded if the company's liquidity profile
erodes or if there are execution issues arising from the separation
from NN, Inc. Quantitatively, ratings could be downgraded if
Moody's expects debt/EBITDA be sustained above 6 times.
The principal methodology used in these ratings was Medical Product
and Device Industry published in June 2017.
ASP Navigate Acquisition Corp. is an entity created to acquire the
Life Science division of NN, Inc. The business acquired is a
manufacturer of orthopedic and medical surgeon parts whose
customers are some of the world's largest medical device product
companies. LTM revenues were approximately $339 million. The
acquisition is scheduled to close in the fourth quarter of 2020.
AURORA HOME: Unsecureds to Receive $1,029 Per Month over 5 Years
----------------------------------------------------------------
Aurora Home Care, Inc. (AHC) filed the First Amended Disclosure
Statement describing its Amended Plan of Reorganization dated
August 7, 2020.
General unsecured creditors in Class 3 will receive a pro-rata
distribution of a monthly payment of their allowed claims, without
interest, to be distributed over a period of 60 months from the
Effective Date of the Plan. The Debtor shall pay $1,029 per month
to be shared pro-rata between the allowed amounts of holders of
Class 3 unsecured claims on the 15th day of the month for 60 months
following the Effective Date of the Plan. Based upon current
claims, payments are estimated to be approximately 5% of total
allowed amounts.
A full-text copy of the First Amended Disclosure Statement dated
August 7, 2020, is available at https://tinyurl.com/y28nwmbe from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
COLLIGAN LAW, LLP
Frederick J. Gawronski, Esq.
12 Fountain Plaza, Suite 600
Buffalo, New York 14202
Tel: (716) 885-1150
E-mail: fgawronski@colliganlaw.com
About Aurora Home Care
Aurora Home Care, Inc., is a licensed home care services agency
specializing in the provision of excellent private duty nursing
services.
Aurora Home Care sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D.N.Y. Case No. 19-12012) on Sept. 27,
2019. At the time of the filing, the Debtor had estimated assets
of between $100,001 and $500,000 and liabilities of between
$500,001 and $1 million. The case is assigned to Judge Carl L.
Bucki. The Debtor is represented by Frederick J. Gawronski, Esq.,
at Colligan Law, LLP.
BIORESTORATIVE THERAPIES: Unsecureds Have 2 Options in Joint Plan
-----------------------------------------------------------------
Debtor BioRestorative Therapies, Inc., and unsecured creditor
Auctus Fund, LLC filed an Amended Joint Plan of Reorganization a
corresponding Amended Disclosure Statement on Aug. 7, 2020. Auctus
is the largest unsecured creditor of the Debtor, holding
prepetition convertible notes in an amount in excess of
$3,300,000.
The Plan contemplates that new capital will be raised that will
provide for the payment of allowed claims under the Plan and the
funding of the Reorganized Debtor's continued operations, including
clinical trials and other steps necessary to continue the
development of the Debtor's technology and intellectual property.
The Plan provides for the satisfaction in full of all allowed
secured claims, administrative claims, priority claims and priority
tax claims, unless the holders of such Claims agree to different
treatment. The holders of allowed general unsecured claims will
receive, at their election, either (a) Common Stock in exchange for
their allowed claims, or (b) if they choose to provide financing to
the Reorganized Debtor in an amount of not less than 75 percent of
their respective allowed claims, a Convertible Plan Note for the
amount of their respective allowed claims and a Secured Convertible
Plan Note for the amount of financing they provide to the
Reorganized Debtor, plus one Plan Warrant for each dollar of
financing they provide to the Reorganized Debtor.
Under the Plan, existing stock in the Debtor will be retained by
the holders of allowed equity interests. In addition to issuing
stock, prior to the Petition Date the Debtor entered into various
warrants, puts, subscription agreements and other related
agreements for the purchase, sale or subscribe to shares of the
Debtor. Under the Plan, all pre-Petition Date warrants and options
will also be retained by the holders thereof; provided, however,
(i) all holders of Equity Interests shall have any and all of their
Anti-dilution Rights extinguished and cancelled; (ii) all holders
of Equity Interests shall have any and all of their rights to sell
or put shares to the Debtor extinguished and cancelled; and (iii)
if Class 3 and/or Class 4 vote to reject the Plan, the Equity
Interests in the Debtor shall be cancelled.
A full-text copy of the Amended Disclosure Statement dated August
7, 2020, is available at https://tinyurl.com/yxez6kvn from
PacerMonitor.com at no charge.
Counsel to Auctus Fund:
MURPHY& KING, P.C.
One Beacon Street
Boston, MA 02108
Harold B. Murphy, Esq.
William R. Moorman, Jr., Esq.
E-mail: wmoorman@murphyking.com
Telephone: (617) 423-0400
Facsimile: (617) 423-0498
Counsel to BioRestorative Therapies:
CERTILMAN BALIN ADLER & HYMAN, LLP
90 Merrick Avenue, 9th Floor
East Meadow, NY 11554
Richard McCord, Esq.
Robert D. Nosek, Esq.
E-mail: rnosek@certilmanbalin.com
Telephone: (516) 296-7000
Facsimile: (516) 296-7111
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.
BLESSINGS INC: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Blessings, Inc.
1045 S Highland Avenue
Tucson, AZ 85719
Chapter 11 Petition Date: September 24, 2020
Court: United States Bankruptcy Court
District of Arizona
Case No.: 20-10797
Debtor's Counsel: John C. Smith, Esq.
SMITH & SMITH PLLC
6720 East Camino Principal
Suite 203
Tucson, AZ 85715
Tel: (520) 722-1605
Email: john@smithandsmithpllc.com
Total Assets as of August 31, 2020: $3,889,514
Total Current & Long-Term
Liabilities as of
August 31, 2020: $6,770,256
The petition was signed by David Mayorquin, president and CEO.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/IUCTEDI/Blessings_Inc__azbke-20-10797__0001.0.pdf?mcid=tGE4TAMA
BMZ LLC: Case Summary & 13 Unsecured Creditors
----------------------------------------------
Debtor: BMZ, LLC
2613 Gulf to Bay Blvd., Ste 1680
Clearwater, FL 33759
Business Description: BMZ, LLC is a privately held company in the
fast-food & quick-service restaurants
business.
Chapter 11 Petition Date: September 26, 2020
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 20-07203
Debtor's Counsel: Steven M. Fishman, Esq.
STEVEN M. FISHMAN, PA
2454 N. McMullen Booth Rd., #D-607
Clearwater, FL 33759
Tel: 727-724-9044
Email: steve@attorneystevenfishman.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Scott Zieba, managing member.
A copy of the petition containing, among other items, a list of the
Debtor's 13 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/H2W6GLQ/BMZ_LLC__flmbke-20-07203__0001.0.pdf?mcid=tGE4TAMA
BOARDRIDERS INC: Moody's Rates New $431MM Term Loan 'B3'
--------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Boardriders,
Inc.'s new $431 million Super Senior Credit Agreement. At the same
time, Moody's affirmed the company's Caa1 corporate family rating
("CFR"), Caa1-PD probability of default rating ("PDR"), and
downgraded the Company's existing senior secured term loan due 2024
("Existing Term Loan") to Caa3 from Caa1. The outlook remains
negative.
The new Super Senior Credit Agreement consists of a $45 million
Tranche A new money term loan due October 23, 2023, $80 million
($45 million new money, $35 million rolled-up from the Existing
Term Loan) Tranche B-1 term loan due April 23, 2024, $20 million
Delayed Draw Tranche B-1 term loan due April 23, 2024, and a $286
Tranche B-2 term loan due April 23, 2024 rolled up from the
Existing Term Loan. In addition, certain European subsidiaries of
the Company entered into an unsecured EUR50 million European Term
Loan (not rated by Moody's), including EUR40 million of new money
and EUR10 million rolled-up from an existing European Revolving
Line. Proceeds from the new money facilities where be used to
reduce outstanding ABL revolver borrowing, pay transaction fees and
expenses, and boost cash liquidity available for general corporate
purposes including business investment and restructuring expenses.
As part of the transaction, Boardriders obtained an amendment to
its Existing Term Loan that allowed it to obtain the new
incremental Super Senior Credit Agreement. The amendment also
eliminated all affirmative and negative covenants, including the
leverage ratio covenant. Approximately $321 million of the Existing
Term Loan was rolled up into the Super Senior Credit Agreement,
leaving approximately $120 million outstanding. Through an amended
Intercreditor Agreement, the Existing Term Loan now has a second
lien on term loan collateral, behind the term loans in the Super
Senior Credit Agreement. The downgrade of the Existing Term Loan to
Caa3 reflects its lower position in the capital structure and
reduced recovery prospects relative to the Super Senior Credit
Facility. The B3 assigned to the new Super Senior Credit Agreement
is one notch above the Caa1 CFR, supported by the sizeable amount
of junior debt in the capital structure in the form of the Existing
Term Loan and unsecured debt and other claims and its junior
position relative ranking to the $170 million ABL facility.
The affirmation of the Caa1 CFR reflects the Company's improved
liquidity position resulting from the transaction, which boosted by
around $135 million due to new money funding. When coupled with
excess revolver and delayed draw term loan availability and a total
net leverage financial covenant that begins in the first quarter
ending January 31, 2022, liquidity is adequate, and appears
sufficient to cover cash flow needs over the next twelve months.
The negative outlook reflects the risks related to Boardriders'
need to execute upon its cost reduction plans, stabilize earnings
declines and free cash flow burn in a very challenging apparel and
retail environment.
Moody's took the following rating actions:
Downgrades:
Issuer: Boardriders, Inc.
Senior Secured Bank Credit Facility, Downgraded to Caa3 (LGD5) from
Caa1 (LGD3)
Assignments:
Issuer: Boardriders, Inc.
Senior Secured Super Priority Bank Credit Facility, Assigned B3
(LGD3)
Affirmations:
Issuer: Boardriders, Inc.
Probability of Default Rating, Affirmed Caa1-PD
Corporate Family Rating, Affirmed Caa1
Outlook Actions:
Issuer: Boardriders, Inc.
Outlook, Remains Negative
RATINGS RATIONALE
Boardriders' Caa1 rating is constrained by its weak operating
performance and credit metrics stemming from the unprecedented
disruptions caused by the global Coronavirus (COVID-19) pandemic,
as well as continued meaningful near-term cash outflows related to
restructuring and working capital investments to drive future
growth. Over time, Moody's expects the company will achieve the
strategic benefits of the Billabong acquisition, which combined the
two premier companies in the global action sports apparel industry
with complementary business philosophies, product offerings and
geographic footprints. With a portfolio of well-known brand names,
the combined company holds a solid market position in a highly
fragmented global industry. Liquidity is adequate, reflecting
Moody's expectation that near-term cash flow needs will be
supported by balance sheet cash and available ABL revolver and
Delayed Draw Term Loan availability.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if liquidity erodes through greater
than expected cash flow burn, covenant violations, or if its
probability of default otherwise increases.
A ratings upgrade would require a return to revenue and earnings
growth, with adequate liquidity including ample covenant cushion
once, it becomes effective in January 2022, and positive free cash
flow. Metrics include Moody's EBITA/Interest maintained over
1.25x.
Boardriders, Inc. designs and distributes branded apparel,
footwear, accessories, and related products under six primary
brands including Quiksilver, Billabong, ROXY, DC Shoes, RVCA and
Element. The company is majority owned by funds managed by Oaktree
Capital Management, L.P.
The principal methodology used in these ratings was Apparel
Methodology published in October 2019.
BORDEN DAIRY: Laguna Contributes $2.5M as Part of Settlement
------------------------------------------------------------
Borden Dairy Company and its affiliated debtors filed with the U.S.
Bankruptcy Court for the District of Delaware a Combined Disclosure
Statement and Joint Chapter 11 Plan of Liquidation dated August 6,
2020.
The Debtors propose for the liquidation of the Debtors' remaining
assets and distribution of the proceeds of the assets to the
Holders of Allowed Claims against the Debtors.
Class 4 General Unsecured Claims will receive in exchange for the
allowed General Unsecured Claim, such Holder's pro rata share of
the Distribution Proceeds as follows: (A) the first $1,000,000 in
Distribution Proceeds shall be distributed Pro Rata to all Holders
of Allowed General Unsecured Claims; (B) prior to any subsequent
Distributions to Holders of Allowed General Unsecured Claims, the
portion of the Initial Distribution that the TLB Lenders would have
otherwise been entitled to on account of the TLB Deficiency Claim,
absent the foregoing clause (A), shall be distributed to the TLB
Lenders from the remaining Distribution Proceeds after the Initial
Distribution; and (C) any further Distributions on account of
Allowed TLB Deficiency Claims and Allowed General Unsecured Claims
shall be distributed Pro Rata to all Holders of Allowed TLB
Deficiency Claims and Allowed General Unsecured Claims.
Holders of interests in Holdings will receive no distribution on
account of their Interests in Holdings and such Interests shall be
deemed automatically cancelled, released, and extinguished on and
as of the Effective Date.
Following lengthy negotiations between the Debtors, the Purchaser,
the Committee, the Prepetition Agent, the Prepetition Lenders, and
the LALA/Laguna Entities (the "Laguna Settlement Agreement
Parties"), the License Dispute and the claims asserted by Laguna in
the Lien Litigation were resolved through a settlement agreement by
and between the Laguna Settlement Agreement Parties executed on
July 16, 2020 (the "Laguna Settlement Agreement").
The Laguna Settlement Agreement included, among other things, the
following terms and conditions: (i) COMLADE consented to assumption
and assignment of the Licensed Trademarks to the Purchaser, and the
Purchaser shall pay COMLADE the amount of $685,000 as cure costs to
resolve the License Dispute; (ii) the Laguna Entities will release
and waive all of their claims in the Lien Litigation so that the
full $17 million of proceeds in the Reserve Account are available
to the Debtors; (iii) the Debtors shall assume and assign to the
Purchaser a separate license agreement with LALA U.S., Inc.; (iv)
the Laguna Entities will contribute $2,500,000 to the Estates; and
(v) the Estates and the other Laguna Settlement Agreement Parties
shall provide full releases in favor of the LALA/Laguna Entities.
On July 16, 2020, the Court entered its order approving the Laguna
Settlement Agreement. The sale closed effective as of July 20,
2020.
A full-text copy of the Combined Plan & Disclosure dated August 6,
2020, is available at https://tinyurl.com/y5wqx8ub from
PacerMonitor at no charge.
Co-Counsel to the Debtors:
ARNOLD & PORTER KAYE SCHOLER LLP
D. Tyler Nurnberg
Seth J. Kleinman
Sarah Gryll
70 West Madison Street, Suite 4200
Chicago, Illinois 60602
Telephone: (312) 583-2300
Facsimile: (312) 583-2360
E-mail: tyler.nurnberg@arnoldporter.com
seth.kleinman@arnoldporter.com
sarah.gryll@arnoldporter.com
- and -
YOUNG CONAWAY STARGATT & TAYLOR, LLP
M. Blake Cleary
Kenneth J. Enos
Betsy L. Feldman
1000 North King Street
Wilmington, Delaware 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
E-mail: mbcleary@ycst.com
kenos@ycst.com
bfeldman@ycst.com
About Borden Dairy
Borden Dairy Company -- http://www.bordendairy.com/-- is a
processor and direct-to-store distributor of fresh fluid milk,
dairy case products and other beverages. It produces and
distributes a wide variety of branded and private label
traditional, flavored and specialty milk, buttermilk, dips and sour
cream, juices, tea, and flavored drinks to mass merchandisers,
educational institutions, food service retailers, grocery stores,
drug stores, convenience stores, food and beverage wholesale
distributors, and retail warehouse club stores across the United
States.
Headquartered in Dallas, Borden Dairy operates 12 milk processing
plants and nearly 100 branches across the U.S. It was founded in
1857 by Gail Borden, Jr.
Borden Dairy and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 20-10010) on Jan. 5, 2020.
Judge Christopher S. Sontchi oversees the case.
Borden Dairy was estimated to have $100 million to $500 million in
assets and liabilities as of the bankruptcy filing.
The Debtors tapped Arnold & Porter Kaye Scholer LLP as general
bankruptcy counsel; Young Conaway Stargatt & Taylor LLP as special
counsel; and Donlin Recano as the claims agent.
BOY SCOUTS OF AMERICA: Sheltered Funds from Chapter 11, Say Victims
-------------------------------------------------------------------
Law360 reports that a committee of sexual abuse tort claimants in
the Boy Scouts of America's Chapter 11 asked a Delaware judge to
void a local council's transfer of assets into a protective trust,
saying the move could impact monetary distributions for victims.
In a motion filed with U.S. Bankruptcy Judge Laurie Selber
Silverstein on August 7, 2020, the committee asserted that the
Middle Tennessee Council, Boy Scouts of America improperly moved to
put its assets beyond the reach of the bankruptcy estate and its
creditors. The committee contends that on July 1, 2020 the Middle
Tennessee Council "transferred substantially all of its real and
personal property" to a protective trust.
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets at least $500 million in liabilities as of the
bankruptcy filing.
The Debtors tapped Sidley Austin LLP as general bankruptcy counsel;
Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel; and
Alvarez & Marsal North America, LLC as financial advisor. Omni
Agent Solutions is the claims agent.
BRIGHT MOUNTAIN: Jack Dunleavy Quits as Director
------------------------------------------------
Bright Mountain Media, Inc. accepted the resignation of Jack
Dunleavy as a director and chairman of the audit committee of the
Company for health reasons. Mr. Dunleavy did not have any
disagreement with the Company when he tendered the resignation.
About Bright Mountain
Based in Boca Raton, Fla., Bright Mountain Media, Inc. --
http://www.brightmountainmedia.com/-- is a digital media holding
company whose primary focus is connecting brands with consumers as
a full advertising services platform. Bright Mountain Media's
assets include an ad network, an ad exchange platform and 24
websites which are customized to provide its niche users, including
active, reserve and retired military, law enforcement, first
responders and other public safety employees with products,
information and news that the Company believes may be of interest
to them.
Bright Mountain reported a net loss of $3.40 million for the year
ended Dec. 31, 2019, compared to a net loss of $5.22 million for
the year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$98.62 million in total assets, $29.33 million in total
liabilities, and $69.29 million in total shareholders' equity.
EisnerAmper LLP, in Iselin, New Jersey, the Company's auditor since
2018, issued a "going concern" qualification in its report dated
May 14, 2020, citing that the Company has experienced recurring net
losses, cash outflows from operating activities, and has an
accumulated deficit that raise substantial doubt about its ability
to continue as a going concern.
CARDINAL CARE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Cardinal Care Management, LLC
1780 Peach Place
Concord, CA 94518
Business Description: Cardinal Care Management, LLC operates
residential care facilities for the elderly.
Chapter 11 Petition Date: September 24, 2020
Court: United States Bankruptcy Court
Northern District of California
Case No.: 20-41557
Judge: Hon. Charles Novack
Debtor's Counsel: David A. Boone, Esq.
LAW OFFICES OF DAVID A. BOONE
1611 The Alameda
San Jose, CA 95126
Tel: 408-291-6000
E-mail: ecfdavidboone@aol.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Steve Chou, managing member.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/75JC3EA/Cardinal_Care_Management_LLC__canbke-20-41557__0001.0.pdf?mcid=tGE4TAMA
CARIBBEAN TRADING: Seeks to Hire Financial Guidance as Accountant
-----------------------------------------------------------------
Caribbean Trading Company, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to hire Financial
Guidance Advisors LLC as its accountant and financial advisor.
The firm will provide the following services in connection with
Debtor's Chapter 11 case:
a) assist Debtor in the preparation of financial reports;
b) assist in the reconciliation and clarification of proof of
claims filed and amount due to creditors;
c) provide general accounting and tax services; and
d) assist Debtor and its legal counsel in the preparation of
supporting documents for its Chapter 11 reorganization plan.
Financial Guidance will be paid at $150 per hour. The firm received
a retainer in the amount of $3,000 from Debtor.
Yaime Rullan Esq., an attorney and a certified public accountant at
Financial Guidance, disclosed in court filings that she and other
members of the firm are "disinterested persons" as defined by
Section 101 (14) of the Bankruptcy Code.
Financial Guidance can be reached through:
Yaime Rullan Esq., CPA, CIRA
Financial Guidance Advisors LLC
PO Box 800965
Coto Laurel, PR 00780
Telephone: (787) 922-5012
Email: yrullan@gmail.com
About Caribbean Trading Company Inc.
Caribbean Trading Company, Inc. is a Puerto Rico-based company
which provides unique art, souvenirs, gift baskets, corporate
incentive gifts and promotional products.
Caribbean Trading Company sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.P.R. Case No. 20-03479) on Aug. 31, 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.
Estrella LLC is Debtor's legal counsel.
CEC ENTERTAINMENT: King & Spalding Updates on Noteholder Group
--------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of King & Spalding LLP submitted a revised verified
statement to disclose an updated list of Ad Hoc Noteholder Group
that it is representing these creditors in the Chapter 11 cases of
CEC Entertainment, Inc., et al.
In May 2020, certain holders, or investment advisors, sub-advisers
or managers of the account of such holders, of the 8.000% Senior
Notes due 2022, issued by CEC Entertainment, Inc. pursuant to that
certain Indenture, dated as of February 19, 2014, between the
Company and Wilmington Trust, National Association, as trustee,
engaged King & Spalding LLP to represent them in connection with
the potential restructuring of the Debtors.
K&S represents only the Ad Hoc Noteholders and does not represent
or purport to represent any entities other than the Ad Hoc
Noteholders in connection with the Debtors' chapter 11 cases. In
addition, the Ad Hoc Noteholders, both collectively and through the
individual members, do not represent or purport to represent any
other entities in connection with the Debtors' chapter 11 cases.
As of Sept. 25, 2020, members of the Ad Hoc Noteholders and their
disclosable economic interests are:
Prudential Financial, Inc.
655 Broad Street, 19th Floor
Newark, NJ 07102
Attn: Gregory Cass
Phone: (973) 802-6000
* Notes: $90,469,000
* Term Loans: $34,028,875
Resource Credit Income Fund
717 Fifth Ave, 14th Fl
New York, NY 10022
Attn: Mike Terwilliger
Phone: (212) 506-3899
* Notes: $11,549,000
Westchester Capital Management
100 Summit Lake Drive
Valhalla, NY 10595
Attn: Steve Tan
Phone: (914) 741-5600
* $11,500,000
K&S does not own, nor has it ever owned, any claims against the
Debtors except for claims for services rendered to the Ad Hoc
Noteholders. K&S may at some future time seek to have its fees and
disbursements incurred on behalf of the Ad Hoc Noteholders paid by
the Debtors' estates pursuant to title 11 of the United States Code
or as otherwise permitted in the Debtors' chapter 11 cases. K&S
does not perceive any actual or potential conflict of interest with
respect to the representation of the Ad Hoc Noteholders in the
Debtors' chapter 11 cases.
All of the information contained herein is intended only to comply
with Bankruptcy Rule 2019 and is not intended for any other
purpose. Nothing contained in this Verified Statement should be
construed as a limitation upon, or waiver of, any Ad Hoc
Noteholders' right to assert, file and/or amend its claims in
accordance with applicable law and any orders entered in the
Debtors' chapter 11 cases.
The Ad Hoc Noteholders, through their undersigned counsel, further
reserve the right to supplement and/or amend this Verified
Statement in accordance with the requirements set forth in
Bankruptcy Rule 2019 at any time in the future.
Counsel to the Ad Hoc Noteholder Group can be reached at:
KING & SPALDING LLP
Arthur J. Steinberg, Esq.
Michael Rupe, Esq.
1185 Avenue of the Americas
NY, NY 10036
Telephone: (212) 556-2135
Email: asteinberg@kslaw.com
mrupe@kslaw.com
- and -
Matthew L. Warren, Esq.
Lindsey Henrikson, Esq.
353 North Clark Street, 12th Floor
Chicago, IL 60654
Telephone: (312) 764-6921
(312) 764-6924
Email: mwarren@kslaw.com
lhenrikson@kslaw.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/36aAnGj
About CEC Entertainment
CEC Entertainment is a family entertainment and dining company that
owns and operates Chuck E. Cheese and Peter Piper Pizza
restaurants. As of Dec. 31, 2019, CEC Entertainment and its
franchisees operate a system of 612 Chuck E. Cheese restaurants and
129 Peter Piper Pizza stores, with locations in 47 states and 16
foreign countries and territories. Visit
http://www.chuckecheese.comfor more information.
CEC Entertainment recorded a net loss of $28.92 million for the
year ended Dec. 29, 2019, compared to a net loss of $20.46 million
for the year ended Dec. 30, 2018. As of Dec. 29, 2019, CEC
Entertainment had $2.12 billion in total assets, $1.90 billion in
total liabilities, and $213.78 million in total stockholders'
equity.
On June 24, 2020, CEC Entertainment and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Tex. Lead Case No. 20-33163).
Judge Marvin Isgur oversees the cases.
The Debtors have tapped Weil, Gotshal & Manges, LLP as bankruptcy
counsel, FTI Consulting, Inc. as financial advisor, PJT Partners LP
as investment banker, Hilco Real Estate, LLC as real estate
advisor, and Prime Clerk, LLC, as claims, noticing and solicitation
agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on July 13, 2020. The committee has tapped Kelley Drye &
Warren, LLP and Womble Bond Dickinson (US), LLP as its legal
counsel, and Alvarez & Marsal North America, LLC as its financial
advisor.
CENTRIC BRANDS: Reorganization Plan Confirmed by Judge
------------------------------------------------------
Centric Brands Inc. (OTCBB: CTRCQ), a leading lifestyle brands
collective, announced Sept. 18, 2020, that the United States
Bankruptcy Court for the Southern District of New York issued a
ruling confirming the Company's Plan of Reorganization. The Plan
was supported by the Company's secured lenders and the Unsecured
Creditors' Committee. After all conditions have been finalized,
the Company intends to emerge from Chapter 11 by the end of October
with a recapitalized balance sheet, new financing facilities,
significantly reduced debt and interest payments, and the full
support of its lenders.
"Today's announcement represents a critical moment in our journey
to emerge as an even stronger company, poised for long-term growth.
I am truly grateful to our dedicated employees for their hard work
throughout this process and the COVID-19 pandemic. I'm also
appreciative of the continued support of our brand licensors,
retailers, sourcing network and lenders, which has allowed us to
reach this milestone," said Mr. Jason Rabin, CEO of Centric
Brands.
Mr. Rabin continued: "We continue to execute against our strategy
while maintaining our valued, long-standing relationships with our
business partners. With a strengthened financial position, I am
excited about our strong future ahead."
Centric Brands expects to emerge as a private company, under the
supportive ownership of its current lenders led by Blackstone,
Ares, and HPS. Upon emergence, the Company expects to
substantially reduce its funded second lien indebtedness, thereby
positioning the business for future growth and success. Blackstone
will exchange its second lien debt for equity interests in the
reorganized company. Existing senior lenders Ares and HPS will
retain their senior loan positions and will receive equity
interests in the reorganized company.
Further, as contemplated under the terms of the Plan, the Company
expects to secure new exit financing in the form of a new
securitization facility, as well as new revolving and term loan
facilities from its current secured lenders, which will help fund
the Company’s exit from Chapter 11 and its go-forward
operations.
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: Taps Ernst & Young to Provide Tax Services
------------------------------------------------------------
Chaparral Energy, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Ernst &
Young LLP to provide valuation, accounting, restructuring and tax
services.
Ernst & Young will render the following services:
A. Valuation Services
-- provide public benchmarking data prior to the
confirmation of Debtors' ownership structure at emergence from
Chapter 11; and
-- provide recommendations of fair value for certain
tangible and intangible assets as of the date of the emergence from
Chapter 11 for financial reporting purposes and for U.S. federal
income tax purposes.
B. Accounting Services
-- assist in the assessment of the accounting impact of
emergence from Chapter 11;
-- advise on general and technical accounting matters
around Debtors' financial reporting and documentation of various
accounting matters and policies.
C. Restructuring Services
-- assist with submissions to the court, with the
development and preparation of the plan of reorganization and
disclosure statement and with the preparation of financial
information and analysis to be provided to the creditors and other
stakeholders;
-- report to Debtors' board of directors on the status of
the activities Ernst & Young assists with.
D. Tax Services
-- advise Debtors on tax issues related to their Chapter 11
cases for U.S. federal, state and local tax purposes and the tax
implications of the reorganization and emergence.
The firm's hourly rates are as follows:
Valuation and accounting services
Subject Matter Resource Partner $820
Partner/Principal $795
Managing Director $750
Senior Manager $675
Manager $560
Senior $410
Staff $235
Restructuring services
Partner/Principal/Managing Director $795-$995
Senior Manager $750-$850
Manager $675-$795
Senior $560-$675
Staff $410-$560
Tax restructuring services
Partner/Principal/Managing Director $595-$955
Senior Manager $560-$875
Manager $475-$785
Senior $295-$495
Staff $160-$280
Tax compliance services
Partner/Principal/Managing Director $595
Senior Manager $560
Manager $475
Senior $295
Staff $160
Routine tax provision services
Partner/Principal/Managing Director $595
Senior Manager $560
Manager $475
Senior $295
Staff $160
Income tax provision services
Partner/Principal/Managing Director $595
Senior Manager $560
Manager $475
Senior $295
Staff $160
For severance tax services, the following fee structure will
apply to all wells in Debtors' Oklahoma field operations, charged
monthly based on the asset type:
-- "Core Asset" wells: $50/well
-- "Core Asset" unit wells: $2,000 fixed fee for all wells
-- Optional: "Non-core Asset" wells (including leases within a
unit): $4,500 fixed fee for all wells.
Jack Costeira, a managing director at Ernst & Young, 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:
Jack Costeira, CPA
Suite 2500 210 Park Avenue
Oklahoma City, OK 73102
Telephone: (405) 278-6800
Facsimile: (405) 278-6823
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.
CORRIDOR MEDICAL: Unsecureds Owed Less than $5,000 to Recover 50%
-----------------------------------------------------------------
Corridor Medical Services and its affiliates Correctional Imaging
Services, LLC and CMMS Lab LLC filed with the U.S. Bankruptcy Court
for the Western District of Texas, Austin Division, a Joint Plan of
Reorganization and a corresponding Disclosure Statement on August
7, 2020.
The purpose of the Plan is to pay the allowed claims owed by the
Debtors as of the Petition Date and administrative claims accruing
during the bankruptcy proceedings. Funds from one estate may be
used to pay claims in one of the other. Corridor and Correctional
will commence operations as one entity and CMMS Lab will continue
until management believes all collectible receivables have been
collected, at which time it will be dissolved. At the conclusion of
payments to all unsecured creditors, Debtors should have only
long-term secured debt and current liabilities, as all debts and
other claims shall be resolved.
The Plan proposes to substantively consolidate the three Debtors.
Corridor Medical Services, Inc., will be the surviving entity.
Generally the Reorganized Debtor shall continue operating mobile
x-ray, ultrasound and other services for healthcare, detention and
correctional facilities. It will also manage Covid-19 testing for
another laboratory. The Reorganized Debtor will pay creditors with
a post-confirmation loan from Horizon Bank and cashflow generated
from operations.
Class 15 shall consist of Allowed Unsecured Creditors with Claims
of $5,000 or less or which elect to reduce their claims to $5,000.
There are 84 claims totaling $71,476 in this class. Class 15
creditors will each receive a single payment equal to 50% of their
Allowed Claim on the Effective Date.
Class 16 will consist of Allowed Claims of Unsecured Creditors with
Claims of $5,000 or more. There are 91 claims totaling $8,151,293
in this class. However, many of these claims are disputed. The
Class 16 creditors will elect one of the following options for
distributions under the Plan: (i) 15% of the creditor's allowed
claim on the Effective Date; or (ii) 100% of the creditor's allowed
claim payable monthly without interest over 84 months, beginning on
the first day of the fifth month following the Effective Date.
Class 19 shall consist of the Equity Interests of the Debtors. The
Class 19 Equity Interests will be canceled.
A full-text copy of the Disclosure Statement dated August 7, 2020,
is available at https://tinyurl.com/y3qom8ys from PacerMonitor.com
at no charge.
The Debtors are represented by:
Barbara M. Barron
Stephen W. Sather
BARRON & NEWBURGER, P.C.
7320 N. Mopac Expwy, Ste. 400
Austin, Texas 78701
(512) 476-9103
(512) 476-9253 (Facsimile)
About Corridor Medical Services
Corridor Medical Services, Inc., provides mobile imaging and
laboratory diagnostic services. It offers digital x-ray,
ultrasound, EKG, and lab services to nursing homes, hospice
centers, assisted living facilities, clinics, surgery centers,
home-bound patients, and any place with patients who are restricted
to travel.
Corridor Medical Services and its affiliates Correctional Imaging
Services, LLC and CMMS Lab LLC sought protection under Chapter 11
of the Bankruptcy Code (Bankr. W.D. Tex. Case Nos. 18-11569 to
18-11571) on Nov. 30, 2018.
Corridor Medical Services was estimated to have up to $50,000 in
assets and $10 million to $50 million in liabilities as of the
bankruptcy filing.
The cases are assigned to Judge Tony M. Davis.
Barron & Newburger, PC, is the Debtors' counsel.
DEAN FOODS: Strikes Ch. 11 Deal on Gambler Walters' Restitution
---------------------------------------------------------------
Law360 rdeaeports that milk producer Dean Foods told the Texas
bankruptcy court August 10, 2020, that it has reached a deal for
its bankruptcy estate to get roughly $8.9 million in restitution
from a professional gambler convicted of insider trading as part of
an alleged scheme involving a former company officer. In filings
with U. S. Bankruptcy Judge David R. Jones, Dean Foods Company said
that the settlement in its Chapter 11 would resolve claims between
the debtors and sports gambler William "Billy" T. Walters in three
lawsuits filed in Texas and New York courts.
About Dean Foods
Southern Foods Group, LLC, d/b/a Dean Foods, is a food and beverage
company and a processor and direct-to-store distributor of fresh
fluid milk and other dairy and dairy case products in the United
States.
The Company and its 40+ affiliates filed for bankruptcy protection
on Nov. 12, 2019 (Bankr. S.D. Texas, Lead Case No. 19-36313). The
petitions were signed by Gary Rahlfs, senior vice president and
chief financial officer. Dean Foods was estimated to have assets
and liabilities of $1 billion to $10 billion as of the bankruptcy
filing.
Judge David Jones oversees the cases.
David Polk & Wardell LLP serves as general bankruptcy counsel to
the Debtors, and Norton Rose Fulbright US LLP serves as local
counsel. Alvarez Marsal is financial advisor to the Debtors,
Evercore Group LLC is investment banker, and Epiq Corporate
Restructuring LLC is notice and claims agent.
DIAMONDBACK INDUSTRIES: Largest Creditor Has Issues With Plan
-------------------------------------------------------------
Repeat Precision, LLC, the largest creditor of debtor Diamondback
Industries, Inc., objects to the First Amended Disclosure Statement
to Joint Chapter 11 Plan of Reorganization filed by Diamondback and
its Affiliated Debtors.
Repeat Precision claims that the proposed plan purports to
temporarily enjoin Repeat Precision from prosecuting its personal
claims under TUFTA against the Drurys, UMB Bank and any other
potential defendants. It says the question is whether an
injunction protecting the orchestrator and recipients of
substantial alleged fraudulent transfers can ever be issued in a
plan.
Repeat Precision states that a non-consensual third-party release
or permanent injunction prohibiting Repeat Precision from
prosecuting its claims is inappropriate and cannot be ordered.
Repeat Precision points out that the Plan defines and references
"Exit Financing Documents" as new loan documents that will be
executed by the Debtor and the Bank. The Debtor should be required
to disclose all material terms of any new loan documents with the
Bank, and provide a copy of all such documents, as very frequently
the “devil is in the details.”
Repeat Precision asserts that there is no discussion of the Jackson
Brewing factors yet, as an insider settlement subject to greater
scrutiny, all the more discussion and detail is needed.
Repeat Precision further asserts that the Debtor should discuss why
it has determined to settle at least $22 million in obvious
fraudulent transfers, and upwards of perhaps $40 million in
transfers (some of which may not be avoidable), for only $12
million—only $9.5 million of which is paid up front.
A full-text copy of Repeat Precision's objection dated August 6,
2020, is available at https://tinyurl.com/y239rlqo from
PacerMonitor.com at no charge.
Attorneys for Repeat Precision:
Davor Rukavina, Esq.
Thomas D. Berghman, Esq.
MUNSCH HARDT KOPF & HARR, P.C.
500 N. Akard Street, Suite 3800
Dallas, Texas 75201-6659
Telephone: (214) 855-7500
Facsimile: (214) 855-7584
About Diamondback Industries
Diamondback Industries is an ISO 9001 registered company that
manufactures tools and ballistics equipment including eliminators,
igniters, and power charges. For more information, visit
https://diamondbackindustries.com/
On April 21, 2020, Diamondback Industries and its affiliates sought
Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 20-41504).
The petitions were signed by Benton Cantey, president. Judge
Edward L. Morris presides over the cases. Diamondback was
estimated to have $10 million in assets and $10 million to $50
million in liabilities.
The Debtors tapped Foley & Lardner LLP as their bankruptcy counsel,
Whitaker Chalk Swindle & Schwartz PLLC and Scheef & Stone LLP as
special counsel, and CR3 Partners, LLC as financial advisor.
Stretto is the claims agent, maintaining the page
https://cases.stretto.com/diamondback/
The Debtors filed their joint Chapter 11 plan of reorganization and
disclosure statement on June 23, 2020.
EXACTUS INC: Derek Du Chesne Quits as President, CGO and Director
-----------------------------------------------------------------
Derek Du Chesne resigned from his positions as a member of Exactus,
Inc.'s Board of Directors and as its president and chief growth
officer, effective Sept. 15, 2020. There were no known
disagreements with Mr. Du Chesne regarding any matter relating to
the Company's operations, policies, or practices. Mr. Du Chesne's
departure from the company is governed by a Separation and Release
Agreement dated Sept. 15, 2020. The material terms of the
Agreement are as follows:
* Mr. Du Chesne's Employment Agreement with the company has
been terminated. Mr. Du Chesne has waived all claims to
wages, compensation, severance, reimbursement, stock options
(except as described below), equity incentive compensation,
stock grants, or other compensation payments arising under
his former Employment Agreement. In addition, the Non-
competition and Non-solicitation covenants set forth in the
Employment Agreement have been terminated.
* Mr. Du Chesne has been allowed to exercise options to
purchase 20,000 shares of the Company's common stock at a
price of $0.30 per share.
* Mr. Du Chesne and the Company have exchanged comprehensive
mutual releases.
Effective Sept. 17, 2020, Justin Viles resigned as a member of the
Company's Board of Directors. There were no known disagreements
with Mr. Viles regarding any matter relating to the Company's
operations, policies, or practices.
About Exactus
Exactus Inc. (OTCQB:EXDI) -- http://www.exactusinc.com/-- is a
producer and supplier of hemp-derived ingredients and feminized
hemp genetics. Exactus is committed to creating a positive impact
on society and the environment promoting sustainable agricultural
practices. Exactus specializes in hemp-derived ingredients
(CBD/CBG/CBC/CBN) and feminized seeds that meet the highest
standards of quality and traceability. Through research and
development, the Company continues to stay ahead of market trends
and regulations. Exactus is at the forefront of product
development for the beverage, food, pets, cosmetics, wellness, and
pharmaceutical industries.
Exactus reported a net loss of $10.22 million for the year ended
Dec. 31, 2019, compared to a net loss of $4.34 million for the year
ended Dec. 31, 2018. As of June 30, 2020, the Company had $6.03
million in total assets, $5.21 million in total ilabilities, and
$817,142 in total stockholders' equity.
RBSM LLP, in Henderson, NV, the Company's auditor since 2014,
issued a "going concern" qualification in its report dated May 22,
2020, citing that the Company has recurring losses from operations,
limited cash flow, and an accumulated deficit. These conditions
raise substantial doubt about the Company's ability to continue as
a going concern.
FECK PROPERTIES: Seeks to Hire Midler and Kramer as Special Counsel
-------------------------------------------------------------------
Feck Properties LLC seeks authority from the U.S. Bankruptcy Court
for the Middle District of Florida to hire Midler and Kramer, P.A.
as its special counsel.
The Debtor wishes to retain Midler and Kramer as its special
counsel to review proof of claim #5, and further participate along
with the Debtor’s general bankruptcy counsel if an objection to
Claim #5 is deemed necessary by the Debtor.
Midler and Kramer's current hourly rate is $300r.
Midler and Kramer is disinterested and does not hold or represent
any interest adverse to the Debtor, according to court filings.
The firm can be reached through:
Wayne Kramer, Esq.
Midler and Kramer, P.A.
120 E Oakland Park Blvd Ste 203
Fort Lauderdale, FL 33334-1109
Phone: 954-567-0300
Email: pleadingsmidlerkramer@gmail.com
About Feck Properties
Feck Properties is primarily engaged in real estate rentals
business in Florida and real estate development and sales business
in Massachusetts.
Feck Properties filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-05209) on July 7, 2020. In the petition signed by Stanley B.
Feck, manager, Debtor disclosed $4,750,000 in assets and $2,773,630
in liabilities. Kevin Christopher Gleason, Esq., at Florida
Bankruptcy Group, LLC represents Debtor as legal counsel.
FIRST ADVANTAGE: Moody's Alters Outlook on B3 CFR to Positive
-------------------------------------------------------------
Moody's Investors Service affirmed First Advantage Holdings, LLC's
B3 Corporate Family Rating (CFR) and B3-PD Probability of Default
Rating. At the same time, Moody's affirmed the B2 rating for the
company's first lien senior secured credit facility (revolver and
term loan) and the Caa2 rating for its senior secured second lien
term loan. The outlook has been changed to positive from negative.
The affirmation of First Advantage's ratings and positive outlook
reflect the stabilization of background screening volumes and
Moody's expectation that the trends will begin to normalize over
the next several quarters such that First Advantage's revenue and
earnings will recover fully from the declines caused by the
COVID-19 pandemic by the end of 2020. The positive outlook also
reflects Moody's view that the diversification of First Advantage's
customer base across industries, in conjunction with its favorable
mix of enterprise clients, will contribute to the resiliency of the
company's operating performance over the next 12-18 months. A
portion of the cost actions taken in response to the pandemic are
expected to be permanent, which will further support the positive
trajectory of First Advantage's earnings over the next 12-18
months. Although COVID-19 has yet to be contained and there are
downside risks that global employment trends will remain volatile
over the coming quarters, Moody's anticipates that First
Advantage's liquidity profile will remain resilient, such that the
company will maintain total cash and revolver availability in
excess of $190 million over the next 12-15 months. Moody's
acknowledges that the company has a highly variable cost structure
and can adjust its operating and capital expenses in response to
diminished demand for screening services. Moody's also recognizes
that despite an improved operating profile, the company's financial
leverage will remain elevated over the next 12-18 months, which
limits further upward rating momentum at this time.
Affirmations:
Issuer: First Advantage Holdings, LLC
Probability of Default Rating, Affirmed B3-PD
Corporate Family Rating, Affirmed B3
Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa2 (LGD6)
Outlook Actions:
Issuer: First Advantage Holdings, LLC
Outlook, Changed to Positive from Negative
RATINGS RATIONALE
First Advantage's B3 CFR is constrained by: (1) its high
debt-to-EBITDA leverage (Moody's adjusted and expensing all
capitalized software costs) in the mid-7.0 times for the LTM period
ended June 30, 2020; (2) operating headwinds in the background
screening sector, including the risk for protracted revenue and
earnings contraction due to the COVID-19 pandemic and uncertainties
around the global macroeconomic outlook; (3) operations within the
highly competitive and fragmented market segments; (4) modest
operating scale and narrow product focus; (5) moderate social and
reputational risks; and (6) private equity ownership which could
lead to persistent elevated leverage levels.
First Advantage's ratings are supported by (1) a strong global
market position and screening capabilities that includes services
that are deeply embedded into clients' human resource, security and
risk management functions and entail high switching costs; (2) good
end user industry diversification, long standing relationship with
its blue-chip customers, high retention rates and no significant
customer concentration; (3) solid EBITDA margin relative to
industry peers; (4) capacity to manage its cost base in challenging
economic environments with continuous focus on efficiency
improvements; and (5) expectation that management will maintain at
least good liquidity over the next 12-15 months.
The positive outlook reflects Moody's expectation for a sustained
improvement in operating performance and liquidity stemming from a
gradual normalization of employment trends. The positive outlook
also reflects the demonstrated resiliency of First Advantage's
operating performance, which is supported by its diversified
customer base and favorable mix of enterprise clients, and its
demonstrated ability to quickly adjust costs and maintain a good
liquidity profile.
Moody's expects First Advantage to maintain good liquidity over the
next 12-15 months. Sources of liquidity consist of cash reserves of
$117 million at June 30, 2020 and unfettered access to the
company's $75 million revolving credit facility due 2025. Free cash
flow is expected to recover from muted YTD levels at a pace that is
in-line with the earnings recovery. There are no financial
maintenance covenants under the first and second lien term loans,
but the revolving credit facility is subject to a springing maximum
first lien leverage ratio of 7.75x if the amount drawn exceeds 35%
($26.25 million) of the revolving credit facility. The first and
second lien term loans do not mature until 2027 and 2028,
respectively. The company is expected to maintain covenant
compliance over the next 12-15 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the positive outlook, a downgrade is unlikely over the
near-term. However, the ratings could be downgraded if First
Advantage's revenue and earnings decline more severely than
expected leading to further and sustained increases in
debt-to-EBITDA (Moody's adjusted and expensing all capitalized
software costs). Additionally, ratings could be downgraded is
liquidity deteriorates for any reason.
The ratings could be upgraded if First Advantage demonstrates good
organic growth, sustainably decreases in debt-to-EBITDA (Moody's
adjusted and expensing all capitalized software costs) sustainably
below 6.0x, improves free cash flow meaningfully and maintains
sufficient liquidity with balanced financial policies.
First Advantage Holdings, LLC, headquartered in Atlanta, GA,
provides screening and background-check services to a variety of
industries, including retail, transportation/logistics, industrial,
professional services, finance, staffing, and healthcare. Services
include criminal record checks, education and employment
verification, credit score standings, drug testing and
fingerprinting. FADV also generates revenue from other services
such as tax-credit screening for federal- and state-related tax
incentive programs, fleet vehicle services, driver qualification
services and multi-family housing applicant screening. Following
the completion of the 2020 leveraged buyout, First Advantage is
majority owned by Silver Lake Partners, with management also
rolling over a significant portion of their ownership in the
transaction.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
FM COAL: Seeks to Hire Aurora Management as Financial Advisor
-------------------------------------------------------------
FM Coal, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Northern District of Alabama to hire
Aurora Management Partners as their financial advisor.
The firm will provide the following services:
Financial Review:
1. review the adequacy of and assist Debtors in the
development of near-term cash flow projections to achieve an
accurate 13-week detail and annual cash flow. Included in this
review are:
a. review near-term (six month) cash liquidity, in view of
current financing arrangements;
b. determine an appropriate amount for the working capital
based on upcoming cash needs;
c. assess Debtors' ability to meet on-going debt service
requirements;
d. assess timeliness of billings, collections and
opportunities for improvement; and
e. review A/R, A/P and Inventory reports.
2. based on a review of Debtors' historical and projected
monthly and annual financial statements:
a. provide suggestions for improvements in timeliness and
completeness;
b. review internal accounting procedures and management
information and reporting systems to support financial reporting;
c. evaluate Debtors' financial statements regarding
accuracy and completeness;
d. assist Debtors in curing any deficits in same;
e. assist Debtors in the implementation of ERP system
currently being undertaken.
Analysis of Ongoing Operations:
1. review Debtors' operations, including on-site visits:
a. review operating plan and historical performance;
b. identify opportunities to streamline operations; and
c. review operational reporting (daily, weekly, monthly,
quarterly) and report on same.
2. interview and evaluate current management and provide
recommendations regarding each.
General Terms:
1. communicate regularly with the board of directors to
update them on Aurora's findings;
2. review and provide recommendations on the operating plan
of Debtors as part of an ongoing entity;
3. receive and review weekly performance reports detailing
key operating and financial performance;
4. provide an assessment of the Debtors' viability and
overall financial condition with suggestions for change; and
5. consult on any additional matters as requested by the
Debtors.
The firm will be compensated at hourly rates as follows:
a) Director/Managing Director/Sr. Managing $350-695
Director/Managing Partner
b) Consultant/Senior Consultant $250-350
c) Analysts $175-250
d) Administrative $125
Aurora Management received from Debtors a retainer fee of $25,000.
In addition, the firm received periodic payments and additional
retainers aggregating $1,127,475.27, prior to the petition date.
David Maker, founder and managing partner at Aurora Management,
disclosed in court filings that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
David M. Baker, CTP
Aurora Management Partners Inc.
112 South Tryon St. Ste 1770
Charlotte, NC 28284
Telephone: (828) 638-5744
Email: dbaker@auroramp.com
About FM Coal LLC
FM Coal, LLC and its affiliates are engaged in the business of
extracting, processing and marketing metallurgical coal and thermal
coal from surface mines. Their customers include steel and coke
producers, industrial customers and electric utilities.
On Sept. 1, 2020, FM Coal and its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Lead Case
No. 20-02783).
Judge Tamara O. Mitchell oversees the cases.
At the time of the filing, Debtors had estimated assets of between
$10 million and $50 million and liabilities of between $50 million
and $100 million.
Debtors have tapped Waller Lansden Dortch & Davis, LLP as their
bankruptcy counsel, Aurora Management Partners as financial
Advisor, and Donlin Recano & Company, Inc. as claims, solicitation
and balloting agent.
FOXFIRE CONSOLIDATED: Has Until Nov. 5 to File Plan & Disclosure
----------------------------------------------------------------
Judge David M. Warren of the U.S. Bankruptcy Court for the Eastern
District of North Carolina, Raleigh Division, has entered an order
within which debtor Foxfire Consolidated Owners Association, Inc.,
must file a plan and disclosure statement on or before Nov. 5,
2020.
A full-text copy of the order dated August 7, 2020, is available at
https://tinyurl.com/yxfq7gvh from PacerMonitor.com at no charge.
About Foxfire Consolidated Owners Association
Foxfire Consolidated Owners Association, Inc., sought protection
for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C.
Case No. 20-02784) on Aug. 7, 2020, listing $1 million in both
assets and liabilities. Judge David M. Warren oversees the case.
The Debtor tapped Hendren, Redwine & Malone, PLLC as its bankruptcy
counsel and Jordan Price Wall Gray Jones & Carlton, PLLC as its
special counsel.
FREEDOM MORTGAGE: Fitch Affirms BB- LongTerm IDR, Outlook Negative
------------------------------------------------------------------
Fitch Ratings has affirmed Freedom Mortgage Corporation's Long-Term
Issuer Default Rating (IDR) at 'BB-' and has removed the ratings
from Rating Watch Negative. Fitch has also affirmed Freedom's
senior unsecured debt rating at 'B+'. The Rating Outlook is
Negative.
KEY RATING DRIVERS
The removal of the Negative Rating Watch reflects stabilizing
forbearance levels in Freedom's MSR portfolio, actions taken to
establish additional funding for servicing advances and strong
origination volume, which has led to increased earnings and cash
generation.
The Negative Rating Outlook reflects Freedom's elevated leverage,
which is above Fitch's previously stated negative rating
sensitivity of 5.0x, the high degree of macroeconomic uncertainty
and the extended timeframe over which downside risks related to
forbearance are likely to play out which could pressure the
servicing business.
Freedom's ratings remain supported by its solid franchise and
historical track record in the U.S. nonbank residential mortgage
space, experienced senior management team with extensive industry
background, a sufficiently robust and integrated technology
platform, good historical asset quality performance in its prime
servicing portfolio, adequate reserves to absorb a reasonable level
of repurchase or indemnification demands, and appropriate earnings
coverage of interest expenses. Fitch believes Freedom's
multi-channel origination approach is well positioned relative to
most peers, as it can provide more sustainable earnings through
various interest rate and economic cycles. Freedom's
retained-servicing business model serves also as a natural hedge,
although not a full offset, to the cyclicality of the mortgage
origination business.
Fitch believes the highly cyclical nature of the mortgage
origination business and the capital intensity and valuation
volatility of MSRs of the mortgage servicing business represent
primary rating constraints for nonbank mortgage companies,
including Freedom. Furthermore, the mortgage business is subject to
intense legislative and regulatory scrutiny, which further
increases business risk, and the imperfect nature of interest rate
hedging can introduce liquidity risks related to margin calls
and/or earnings volatility. These industry constraints typically
limit ratings assigned to nonbank mortgage companies to below
investment grade levels.
Rating constraints specific to Freedom include the company's
continued reliance on secured, wholesale funding facilities and
elevated key person risk related to its founder and Chief Executive
Officer, Stanley Middleman, who sets the tone, vision and strategy
for the company.
As of June 30, 2020, Freedom's liquidity consisted of cash on hand,
available borrowing capacity on credit facilities secured by Fannie
Mae (Fannie) and Freddie Mac (Freddie) MSRs and servicing advances,
available borrowing capacity on a facility secured by Ginnie Mae
(Ginnie) MSRs, and available borrowings on warehouse facilities to
fund loan originations. In May 2020, Freedom amended the credit
facility secured by Fannie and Freddie MSRs in order to increase
the sublimit for funding servicing advances. Freedom later amended
its Ginnie MSR facility in July 2020 to include servicing advances
as eligible collateral. Fitch views these changes favorably as it
provides additional contingent liquidity to fund potential
increases in servicing advances. Since the outbreak of COVID-19,
Freedom has increased cash balances to build liquidity and has, to
date, been able to fund all servicing advances and meet all margin
calls on derivative positions and borrowing facilities. In fact,
servicing advance payments have been largely funded by mortgage
prepayments to date. As of Sept. 4, 2020, Freedom had available
capacity of approximately $5.1 billion on committed and uncommitted
warehouse facilities to fund new originations.
Fitch evaluates leverage for mortgage lenders and servicers on the
basis of gross debt to tangible equity. Freedom's leverage was 5.5x
as of June 30, 2020, which is above Fitch's previously stated
negative rating sensitivity of 5.0x.
Increased mortgage originations in 2020 have yielded higher
leverage as loan production has been funded with borrowings on
warehouse facilities. Mortgage originations are expected to remain
elevated in the near term as historically low interest rates
continue to support refinancing volume and some new purchase
originations. Leverage has benefitted from elevated gain on sale
margins, which have added to retained earnings.
The fair value of Freedom's MSR portfolio accounted for a material
amount of tangible equity at June 30, 2020. MSR valuations remained
volatile in 2Q20 and are expected to remain volatile in the near
term given historically low interest rates coupled with a material
increase in mortgage delinquencies given higher unemployment.
Leverage is sensitive to these valuation changes as MSR fair value
adjustments directly impact earnings and equity capital. Still,
Fitch expects leverage to improve modestly in the near term as
growth in retained earnings offset any incremental origination
borrowings and incremental MSR valuation declines. However, should
leverage be sustained above 5.0x over the next 12 to 18 months,
Freedom's ratings could be downgraded.
Freedom is not subject to material asset quality risks because
mortgage loans are generally sold to investors shortly after
origination. However, Freedom has exposure to potential losses due
to repurchase or indemnification claims from investors under
certain warranty provisions. Freedom expects to continue to build
reserves for new loan production to account for this risk, which
Fitch believes is prudent.
The asset quality performance of Freedom's servicing portfolio has
been good in recent years, as delinquencies have been relatively
stable. However, delinquencies increased in 2Q20 due to the impact
of COVID-19 and government mandated forbearance programs. Ginnie
loans, which accounted for 71% of Freedom's MSR portfolio as of
June 30, 2020, have experienced higher levels of forbearance than
Fannie and Freddie loans given their relatively lower credit
quality, although Freedom's Ginnie forbearance levels have remained
below the levels of forbearance seen in the overall market. Fitch
expects delinquencies to remain above historic averages for some
time as forbearance programs cease and the macroeconomic effects of
COVID-19 continue.
The company's pre-tax ROAA increased to 3.5% in the TTM ended June
30, 2020, which is slightly above Freedom's average pre-tax ROAA of
3.3% between 2016 and 2019. Recent earnings have been driven by
strong origination volume and above average gain on sale margins,
which remained above historic levels in 3Q20. Gain on sale margins
significantly increased in 2Q20 due to high mortgage demand,
spurred by low interest rates, combined with origination supply
constraints within the industry. The persistence of low interest
rates is expected to continue driving high levels of refinancing,
which should benefit Freedom on the origination front and produce
strong earnings in the near term. However, earnings could be
pressured over the medium term if gain on sale margins and
origination volumes normalize.
Consistent with other mortgage companies, Freedom is reliant on the
wholesale debt markets to fund operations. Secured debt, which was
87% of total debt at June 30, 2020, is comprised of warehouse
facilities and bank lines of credit used to fund the origination
and servicing business. Unsecured debt represented 13% of Freedom's
total debt at June 30, 2020, which is at the low-end of Fitch's
'bb' category benchmark range of 10%-40% for balance
sheet-intensive finance and leasing companies with an 'a' operating
environment score. Fitch views the utilization of unsecured debt
favorably, as it enhances the firm's funding flexibility in times
of stress.
On Aug. 18, 2020, Freedom completed its previously announced merger
with RoundPoint Mortgage Servicing Corporation (RoundPoint), which
added approximately $75 billion in unpaid principal balance (UPB)
of MSRs, making Freedom the seventh largest agency mortgage
servicer as of June 30, 2020. Fitch views the transaction
incrementally negative as the integration may be challenged due to
COVID-19 related issues as well as relatively weak recent
performance at RoundPoint driven by significant MSR valuation
declines. Freedom intends to focus on improving recapture of MSRs
at RoundPoint which, if successful, would be viewed favorably.
The senior unsecured debt rating is one-notch below Freedom's
Long-Term IDR, given its subordination to secured debt in the
capital structure and, therefore, weaker relative recovery
prospects in a stressed scenario.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade include an inability to maintain sufficient
liquidity to effectively manage elevated servicer advance levels
stemming from further increases in forbearance by borrowers and the
potential for higher delinquencies following the lapse of
forbearance programs. Additionally, if Freedom's leverage were to
be sustained above 5.0x over the next 12 to 18 months it would
likely result in a ratings downgrade.
Factors that could, individually or collectively, lead to positive
rating action/upgrade, including a revision of the Outlook to
Stable, include confidence in the firm's ability to sustainably
manage leverage at 5.0x or below, a clearer understanding of
potential peak delinquency rates and maintenance of adequate
liquidity to fund corresponding servicing advances, stabilization
of MSR valuation marks, funding sufficiency for increased
origination volume, and continuation of strong earnings
performance. A continued extension of Freedom's funding duration
and/or an increase in unsecured debt to total debt approaching 30%
could also contribute to positive rating momentum.
The senior unsecured debt is primarily sensitive to any changes to
Freedom's Long-Term IDR and would be expected to move in tandem.
ESG CONSIDERATIONS
Freedom Mortgage Corporation: Governance Structure: 4
Freedom has an ESG Relevance Score of 4 for Governance Structure
due to elevated key person risk related to its founder and Chief
Executive Officer, Stanley Middleman, who sets the tone, vision and
strategy for the company. An ESG Relevance Score of 4 means
Governance Structure is relevant to Freedom's rating but not a key
rating driver. However, it does have an impact to the rating in
combination 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).
FTS INTERNATIONAL: Davis, Rapp Represent Noteholder Group
---------------------------------------------------------
In the Chapter 11 cases of FTS International, Inc., et al., the law
firms of Davis Polk & Wardwell LLP and Rapp & Krock, PC jointly
submitted a verified statement under Rule 2019 of the Federal Rules
of Bankruptcy Procedure, to disclose that they are representing the
Ad Hoc Group of Secured Noteholders.
The Ad Hoc Group of Secured Noteholders formed by certain holders
or investment advisors to holders of FTS International, Inc.'s
6.25% senior secured notes due 2022 issued under that certain
Indenture, dated as of April 16, 2014.
In or around February 2020, the Ad Hoc Group of Secured Noteholders
engaged Davis Polk to represent the Ad Hoc Group of Secured
Noteholders in connection with the Members' holdings under the
Indenture and a potential transaction or restructuring involving
the Debtors. In or around September 2020, the Ad Hoc Group of
Secured Noteholders engaged R&K to act as local counsel in these
Chapter 11 Cases.
Counsel represent only the Ad Hoc Group of Secured Noteholders and
do not represent or purport to represent any entities other than
the Ad Hoc Group of Secured Noteholders in connection with these
Chapter 11 Cases. In addition, the Ad Hoc Group of Secured
Noteholders does not claim or purport to represent any other
entity.
As of Sept. 22, 2020, members of the Ad Hoc Group of Secured
Noteholders and their disclosable economic interests are:
Amundi Pioneer Asset Management, Inc. and
Amundi Pioneer Institutional Asset Management, Inc.
60 State Street Boston, MA 02109
* $41,576,000 in aggregate principal amount of Secured Notes
Glendon Capital Management L.P.
2425 Olympic Blvd
Suite 500E
Santa Monica, CA 90404
* $60,933,000 in aggregate principal amount of Secured Notes
* 14,999 shares of FTS International, Inc. stock
Johkim Capital Partners Management LLC
8235 Douglas Avenue Suite 1050
Dallas, TX 75225
* $8,611,000 in aggregate principal amount of Secured Notes
Manulife Investment Management (US) LLC
197 Clarendon Street 4th Floor
Boston, MA 02116
* $20,138,000 in aggregate principal amount of Secured Notes
Nomura Corporate Research and Asset Management, Inc.
309 West 49th Street
New York, NY 10019
* $34,050,000 in aggregate principal amount of Secured Notes
VR Global Partners, L.P.
300 Park Avenue Suite 1602
New York, NY 10022
* $22,788,000 in aggregate principal amount of Secured Notes
* 220 shares of FTS International, Inc. stock
Wexford Capital LP
677 Washington Avenue Suite 500
Stamford, CT 06901
* $40,543,000 in aggregate principal amount of Secured Notes
* $3,612,699.44 in aggregate principal amount of loans under the
that certain Term Loan Agreement, dated as of April 16, 2014
among FTS International, Inc., as borrower, Wilmington Savings
Fund Society, FSB, as successor administrative agent, and the
lenders party thereto
Whitebox Advisors LLC
3033 Excelsior Blvd Suite 500
Minneapolis, MN 55416
* $7,761,000 in aggregate principal amount of Secured Notes
Counsel submit this Statement out of an abundance of caution, and
nothing herein should be construed as an admission that the
requirements of Bankruptcy Rule 2019 apply to Counsel's
representation of the Ad Hoc Group of Secured Noteholders.
Nothing contained in this Statement, including Exhibit A hereto,
should be construed as (a) a waiver or release of any claims
against the Debtors by the Ad Hoc Group of Secured Noteholders, (b)
an admission with respect to any fact or legal theory or (c) a
limitation upon, or waiver of, the Ad Hoc Group of Secured
Noteholders' or any Member's right to file and/or amend a proof of
claim in accordance with applicable law and any orders entered in
this case establishing procedures for filing proofs of claim or
interests.
Counsel reserve the right to amend or supplement this Statement.
Counsel for the Ad Hoc Group of Secured Noteholders can be reached
at:
RAPP & KROCK, PC
Henry Flores, Esq.
1980 Post Oak Blvd., Suite 1200
Houston, TX 77056
Telephone No.: (713) 759-9977
Facsimile No.: (713) 759-9967
Email: HFlores@rappandkrock.com
- and -
DAVIS POLK & WARDWELL LLP
Donald S. Bernstein, Esq.
Damian S. Schaible, Esq.
Michael P. Pera, Esq.
450 Lexington Avenue
New York, NY 10017
Telephone: (212) 450-4000
Facsimile: (212) 701-5800
Email: donald.bernstein@davispolk.com
damian.schaible@davispolk.com
michael.pera@davispolk.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3kPzgQK
About FTS International
Headquartered in Fort Worth, Texas, FTS International Inc. --
http://www.FTSI.com/-- is an independent hydraulic fracturing
service company and one of the only vertically integrated service
providers of its kind in North America.
As of March 31, 2020, the Company had $616 million in total assets,
$587 million in total liabilities, and $29 million in total
stockholders' equity.
On Sept. 22, 2020, FTS International and two affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-34622) to
seek confirmation of a prepackaged plan.
Kirkland & Ellis LLP and Winston & Strawn LLP are acting as legal
counsel, Lazard Freres & Co., LLC is acting as financial advisor,
and Alvarez & Marsal LLP is acting as restructuring advisor to the
Company in connection with the restructuring. Epiq is the claims
and solicitation agent.
FTS INTERNATIONAL: Lugenbuhl, Stroock Represent Term Lender Group
-----------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Lugenbuhl, Wheaton, Peck, Rankin & Hubbard and
Stroock & Stroock & Lavan LLP submitted a verified statement that
they are representing the d Hoc Group of Term Loan Lenders in the
Chapter 11 cases of FTS International, Inc., et al.
In April, 2020, the Ad Hoc Group of Term Loan Lenders retained
Stroock & Stroock & Lavan LLP as counsel in connection with a
potential restructuring of the Debtors. The Ad Hoc Group of Term
Loan Lenders subsequently retained Lugenbuhl, Wheaton, Peck, Rankin
& Hubbard as local counsel when informed by the Debtors that they
would pursue a reorganization in the United States Bankruptcy Court
for the Southern District of Texas.
Stroock represents only the Ad Hoc Group of Term Loan Lenders and
the Agent and does not represent or purport to represent any
persons or entities other than the Ad Hoc Group of Term Loan
Lenders or Agent in connection with the Debtors' chapter 11 cases.
Furthermore, as of the filing of this Verified Statement, Lugenbuhl
represents only the Ad Hoc Group of Term Loan Lenders and the Agent
and does not represent or purport to represent any persons or
entities other than the Ad Hoc Group of Term Loan Lenders and the
Agent in connection with the Debtors' chapter 11 cases. In
addition, as of the date of this Verified Statement, the Ad Hoc
Group of Term Loan Lenders, both collectively and through its
individual members, does not represent or purport to represent any
other entities in connection with the Debtors' chapter 11 cases.
As of Sept. 24, 2020, members of the Ad Hoc Group of Term Loan
Lenders and their disclosable economic interests are:
Ares Management LLC
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
* $20,077,525.05 principal amount of Term Loans
* $15,185,000.00 principal amount of Secured Notes
Seix Investment Advisors LLC
1 Maynard Drive, Suite 3200
Park Ridge NJ, 07656
* $18,578,858.38 principal amount of Term Loans
Voya Alternative Asset Management LLC
7337 East Doubletree Ranch Road
Suite 100
Scottsdale, AZ 85258
* $11,053,376.00 principal amount of Term Loans
Neither Stroock nor Lugenbuhl owns, nor has Stroock or Lugenbuhl
ever owned, any claims against or interests in the Debtors except
for claims for services rendered to the Ad Hoc Group of Term Loan
Lenders and the Agent, nor do Stroock or Lugenbuhl own any equity
securities of the Debtors. However, each of Stroock and Lugenbuhl
has sought to have its fees and disbursements paid by the Debtors'
estates pursuant to title 11 of the United States Code or as
otherwise permitted in the Debtors' chapter 11 cases.
The information set forth in Exhibit A and herein is intended only
to comply with Bankruptcy Rule 2019 and is not intended for any
other purpose. Nothing contained in this Verified Statement should
be construed as a limitation upon, or waiver of, the rights of any
individual member of the Ad Hoc Group of Term Loan Lenders,
including, without limitation, the right to assert, file and/or
amend its claims in accordance with applicable law and any orders
entered in the Debtors' chapter 11 cases.
The Ad Hoc Group of Term Loan Lenders, through its undersigned
counsel, reserves the right to amend and/or supplement this
Verified Statement in accordance with the requirements set forth in
Bankruptcy Rule 2019 at any time in the future.
Counsel for Ad Hoc Group of Term Loan Lenders can be reached at:
LUGENBUHL WHEATON PECK RANKIN & HUBBARD
Benjamin W. Kadden, Esq.
Coleman L. Torrans, Esq.
Christopher T. Caplinger, Esq.
601 Poydras St.
New Orleans, LA 70130
Pan American Life Center, Ste. 2775
Telephone: (504) 568-1990
Facsimile: (504) 310-9195
E-mail: bkadden@lawla.com
ctorrans@lawla.com
ccaplinger@lawla.com
- and -
STROOCK & STROOCK & LAVAN LLP
Jayme T. Goldstein, Esq.
Allison Miller, Esq.
Daniel Ginsberg, Esq.
180 Maiden Lane
New York, NY 10038
Telephone: (212) 806-5400
Facsimile: (212)-806-6006
Email: bkadden@lawla.com
jgoldstein@stroock.com
amiller@stroock.com
dginsberg@stroock.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/2S0JIbE
About FTS International
Headquartered in Fort Worth, Texas, FTS International Inc. --
http://www.FTSI.com/-- is an independent hydraulic fracturing
service company and one of the only vertically integrated service
providers of its kind in North America.
As of March 31, 2020, the Company had $616 million in total assets,
$587 million in total liabilities, and $29 million in total
stockholders' equity.
On Sept. 22, 2020, FTS International and two affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-34622) to
seek confirmation of a prepackaged plan.
Kirkland & Ellis LLP and Winston & Strawn LLP are acting as legal
counsel, Lazard Freres & Co., LLC is acting as financial advisor,
and Alvarez & Marsal LLP is acting as restructuring advisor to the
Company in connection with the restructuring. Epiq is the claims
and solicitation agent.
GABRIEL INVESTMENT: Gabriel's Liquor, Ben's Liquors Have New Owners
-------------------------------------------------------------------
Patrick Danner, writing for the Express News reports that San
Antonio retailers Gabriel's Liquor and Don's & Ben's Liquors will
have new owners under a reorganization plan confirmed by a
bankruptcy judge August 7, 2020.
Omega Capital Group LLC, led by James R. Pfirrmann and Ron Heller,
is slated to own about 31 package stores and associated licenses
and permits as part of the plan.
Pfirrmann served as Gabriel's chief executive from 1997 to 2005,
when he retired. He has had no relationship with the businesses
since but he is married to Eleanor Gabriel, part of the politically
connected Gabriel family that has owned the chain for 70 years.
Heller is a principal of Mark Motors, a Boerne dealership that
sells preowned luxury vehicles.
"They're looking forward to running it, and running it profitably
and restoring the (chain) to what it's been in this community for
all these years," said San Antonio attorney Ray Battaglia, who
represents Omega.
Omega plans to operate the stores more efficiently and restock them
with inventory, he said.
"Inventory levels have been an issue because of the lack of
capital," Battaglia added. "We expect to be better positioned to
present the customers with the inventory that they want to buy."
Under the reorganization plan submitted by the debtors and
confirmed by Chief U.S. Bankruptcy Judge Ronald B. King, the
bankrupt companies will be consolidated into a single entity —
and then split into two entities.
Omega will acquire 100 percent of the stock in the entity that will
own the operating assets in a deal valued at $6 million to $7
million, which includes assumption of certain obligations and
payment of taxes.
Pfirrmann will run the operation and the Gabriel family will have
no involvement.
The assets and permits of one store location at 810 S. Gen.
McMullen Drive will go to an entity called Legacy GIG. It will
issue Class A shares in equal proportion to Omega, Blake-Wilder Cos
LLC of St. Petersburg, Fla., and existing shareholders. Class B
shares will be issued to a trust set up for unsecured creditors.
Legacy GIG also will retain a lawsuit that Gabriel's has had
pending against the Texas Alcoholic Beverage Commission.
Gabriel Investment Group Inc. (GIG), one of the debtors, had sued
the TABC over the chain's status as a "publicly traded entity."
State law bars a "public corporation" from operating liquor stores.
A public corporation is defined as any company that trades on a
pubic stock exchange or has more than 35 owners.
GIG, which has more than 35 owners, is grandfathered to operate
liquor stores, however. In its lawsuit, filed in bankruptcy court,
GIG wants the court to rule the company can transfer those
grandfathered rights to a public company. The TABC disagrees with
GIG's take.
Depending on the outcome of the lawsuit, the public company
exemption could be worth "a substantial amount of money (excess of
$10,000,000) or very little," the creditors committee said in a May
court filing.
Blake-Wilder will have management control over Legacy GIG,
according to the reorganization plan.
Unsecured creditors will get about $2 million, or about a third of
what they were owed, said Ron Smeberg, San Antonio attorney for the
unsecured creditors committee. They could get 100 cents on the
dollar if the grandfathered rights can be transferred to another
party.
"It's not a bad outcome for a case like this," Smeberg said. "It
could have been a lot worse. It could have gone into liquidation,
which would have paid the unsecured creditors nothing."
Gabriel's, Don's & Ben's and related companies filed for Chapter 11
bankruptcy in September, blaming competition from big-box wine and
spirits stores.
The committee of unsecured creditors, though, alleged the
bankruptcy filings were the result of mismanagement. Insiders took
excessive salaries, advance distributions and more than $2 million
in loans while the companies were "bleeding cash," the committee
claimed.
The committee added debtors had lost about a third of their
collective value while continuing to pay "high insider salaries and
rental payments to insider landlords" during the bankruptcy
proceedings.
Potential claims against the insiders will be transferred to Legacy
GIG but likely will be released in 18 months.
Originally, Gabriel's had lined up Nooner Holdings Inc. to serve as
the initial bidder for the stores and assets at an auction. Nooner
offered $7 million, but problems arose and the plan never went
forward.
About Gabriel Investment Group
Gabriel Investment Group, Inc., founded in 1948, operates a chain
of package stores that sell wines, liquors, and beers. As of the
Petition Date, Gabriel operates 15 package store locations as
Gabriel's Liquor and 30 package store locations as Don's & Ben's
Liquor.
Gabriel Investment Group sought relief under Chapter 11 of the
Bankruptcy Code (Bank. W.D. Tex. Lead Case No. 19-52298) on Sept.
27, 2019 in San Antonio Texas. The other debtor affiliates are
Don's & Ben's Inc. (Bankr. W.D. Tex. 19-52299); Gabriel Holdings,
LLC (Bankr. W.D. Tex. 19-52300); SA Discount Liquors, Inc. (Bankr.
W.D. Tex. 19-52301); and Gabriel GP, Inc. (Bankr. W.D. Tex.
19-52302). In the petitions signed by Inez Cindy Gabriel,
president, the Debtors were estimated to have assets at $1 million
to $10 million and liabilities within the same range.
Judge Ronald B. King oversees the cases.
The Debtors tapped Pulman Cappuccio & Pullen, LLP, as legal
counsel.
The Office of the U.S. Trustee appointed creditors to serve on the
official committee of unsecured creditors on Nov. 21, 2019. The
committee is represented by Muller Smeberg, PLLC.
GARRETT MOTION: Gibson Dunn Represents First Lien Group
-------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Gibson, Dunn & Crutcher LLP submitted a verified
statement that it is representing the Ad Hoc Group of First Lien
Lenders in the Chapter 11 cases of Garrett Motion Inc., et al.
On or about September 2020, members of the Ad Hoc Group of First
Lien Lenders retained attorneys presently with Gibson, Dunn &
Crutcher LLP to represent them as counsel in connection with a
potential restructuring of the outstanding debt obligations of the
above-captioned debtors and certain of their subsidiaries and
affiliates. From time to time thereafter, certain additional
holders of the Debtors' outstanding debt obligations have joined
the Ad Hoc Group of First Lien Lenders.
Gibson Dunn represents the members of the Ad Hoc Group of First
Lien Lenders in their capacity as lenders under that certain Credit
Agreement, dated as of September 27, 2018 by and among Garrett LX
III S.a.r.l., Garrett Borrowing LLC and Garrett Motion Sarl, as
borrowers, the guarantors party thereto, the lenders party thereto,
and JPMorgan Chase Bank N.A., as administrative agent.
Gibson Dunn does not represent or purport to represent any other
entities in connection with the Debtors' chapter 11 cases. Gibson
Dunn does not represent the Ad Hoc Group of First Lien Lenders as a
"committee" and does not undertake to represent the interests of,
and is not a fiduciary for, any creditor, party in interest, or
other entity that has not signed a retention agreement with Gibson
Dunn. In addition, the Ad Hoc Group of First Lien Lenders does not
represent or purport to represent any other entities in connection
with the Debtors' chapter 11 cases.
Upon information and belief formed after due inquiry, Gibson Dunn
does not hold any disclosable economic interests in relation to the
Debtors.
As of Sept. 22, 2020, members of the Ad Hoc Group of First Lien
Lenders and their disclosable economic interests are:
Angelo, Gordon & Co.
245 Park Avenue
New York, NY 10167
* Term Loan B Obligations (€): 1,000,000.00
* Term Loan B Obligations ($): 26,318,974.00
* Senior Note Obligations (€)8: 2,310,000.00
Ares Management Limited
10 New Burlington Street
London W1S 3BE
* Term Loan B Obligations (€): 13,005,333.32
Banco Bilboa Vizcaya
Argentaria, S.A.
New York Branch
1345 Avenue of the Americas
44th Floor
New York, NY 10105
* Revolving Loan Obligations (€): 32,000,000.00
* Term Loan A Obligations (€): 19,062,500.00
Blue Mountain Capital Management, LLC
280 Park Avenue
New York, NY 10017
* Term Loan B Obligations (€): 5,730,666.66
* Term Loan B Obligations ($): 12,281,250.00
Credit Suisse Asset Management, LLC &
Credit Suisse Asset Management Limited
11 Madison Avenue
New York, NY 10010
* Term Loan A Obligations (€): 23,637,500.00
* Term Loan B Obligations (€): 19,691,461.38
* Term Loan B Obligations ($): 36,291,257.76
* Senior Note Obligations (€): 6,000,000.00
Deutsche Bank AG
London Branch
Winchester House
1 Great Winchester St.
London EC3N 2DB, United Kingdom
* Revolving Loan Obligations (€): 47,500,000.00
* Term Loan A Obligations (€): 12,581,250.00
Eaton Vance Management
Two International Place
Boston, MA 02110
* Term Loan B Obligations (€): 10,642,666.67
* Term Loan B Obligations ($): 6,766,502.38
Elmwood Asset Management, LLC
40 West 57th Street Suite 1800
New York, NY 10017
* Term Loan B Obligations ($): 7,806,401.85
GoldenTree Asset Management LP
300 Park Avenue
20th Floor
New York, NY 10022
* Term Loan B Obligations (€): 13,917,333.33
* Term Loan B Obligations ($): 11,322,322.89
Hayfin Capital Management LLP
One Eagle Place
London, SW1Y 6AF
United Kingdom
* Term Loan B Obligations (€): 8,000,000.00
* Term Loan B Obligations ($): 2,500,000.00
Intermediate Capital Group PLC
Procession House
55 Ludgate Hill
London, EC4M 7JW
* Term Loan A Obligations (€): 19,062,500.00
* Term Loan B Obligations (€): 16,144,106.66
* Senior Note Obligations (€): 8,900,000.00
Invesco Senior Secured Management, Inc.
1166 Avenue of the Americas
25th Floor
New York, NY 10036
* Term Loan B Obligations (€): 13,628,148.45
* Term Loan B Obligations ($): 19,436,529.33
Investcorp Credit Management US LLC
280 Park Avenue
36th Floor
New York, NY 10017
* Term Loan B Obligations (€): 3,274,666.67
* Term Loan B Obligations ($): 10,540,797.35
M&G Alternatives Investment Management Limited and
M&G Investment Management Limited
10 Fenchurch Avenue
London, EC3M 5AG
* Term Loan B Obligations (€): 25,395,957.58
Marble Point Credit Management LLC
600 Steamboat Road Suite 202
Greenwich, CT 06830
* Term Loan B Obligations ($): 18,538,196.28
Nova Kreditna Banka Moribor d.d.
Ulica Vita Kraigherja 4
2000 Maribor, Slovenia
* Term Loan B Obligations (€): $8,186,666.67
Octagon Credit Investors, LLC
250 Park Avenue
15th Floor
New York, NY 10177
* Term Loan B Obligations ($): 13,927,698.60
Sixth Street Partners LLC
888 7th Ave.
35th Floor
New York, NY 10106
* Term Loan B Obligations ($): 15,754,536.00
Steele Creek Investment Management LLC
201 S. College Street
Suite 1690
Charlotte, NC 28202
* Term Loan B Obligations ($): 16,249,584.76
Sumitomo Mitsui Banking Corporation
Prinzenallee 7
40549 Dusseldorf, Germany
* Revolving Loan Obligations (€): 24,000,000.00
* Term Loan A Obligations (€): 12,962,500.00
Unicredit Bank AG
Arabellastrasse 12
81925 Munich, Germany
* Revolving Loan Obligations (€): 32,000,000.00
* Term Loan A Obligations (€): 19,062,500.00
Voya Alternative Asset Management LLC
7337 East Doubletree Ranch Road
Suite 100
Scottsdale, AZ 8525
* Term Loan B Obligations (€): 1,637,333.33
* Term Loan B Obligations ($): 20,143,483.45
Counsel to the Ad Hoc Group of First Lien Lenders can be reached
at:
GIBSON, DUNN & CRUTCHER LLP
Scott J. Greenberg, Esq.
Steven A. Domanowski, Esq.
200 Park Avenue
New York, NY 10166
Telephone: (212) 351-4000
Facsimile: (212) 351-4035
Email: sgreenberg@gibsondunn.com
sdomanowski@gibsondunn.com
Robert A. Klyman, Esq.
333 South Grand Avenue
Los Angeles, CA 90071
Telephone: (213) 229-7562
Facsimile: (213) 229-6562
Email: rklyman@gibsondunn.com
- and -
Matthew G. Bouslog, Esq.
3161 Michelson Drive
Irvine, CA 92612
Telephone: (949) 451-4030
Facsimile: (949) 475-4640
Email: mbouslog@gibsondunn.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3i5sNz9
About Garrett Motion
Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs,
manufactures and sells highly engineered turbocharger and
electric-boosting technologies for light and commercial vehicle
original equipment manufacturers ("OEMs") and the global vehicle
and independent aftermarket.
Garrett Motion and its affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 20-12212) on Sept. 20, 2020.
Garrett disclosed $2,066,000,000 in assets and $4,169,000,000 in
liabilities as of June 30, 2020.
The Debtors tapped SULLIVAN & CROMWELL LLP as counsel; QUINN
EMANUEL URQUHART & SULLIVAN LLP as co-counsel; PERELLA WEINBERG
PARTNERS as investment banker; MORGAN STANLEY & CO. LLC as
investment banker; and ALIXPARTNERS LLP as restructuring advisor.
KURTZMAN CARSON CONSULTANTS LLC is the claims agent.
GENUINE FINANCIAL: Moody's Alters Outlook on Caa1 CFR to Stable
---------------------------------------------------------------
Moody's Investors Service affirmed Genuine Financial Holdings,
LLC's ratings, including its Caa1 Corporate Family Rating and its
Caa1-PD Probability of Default Rating. At the same time, Moody's
affirmed the B3 rating on the company's first lien senior secured
credit facility (term loan and revolver) and the Caa3 rating on the
senior secured second lien term loan. The outlook was changed to
stable from negative.
The affirmation of HireRight's ratings and stable outlook reflect
the stabilization of background screening volumes and Moody's
expectation that the trends will begin to normalize over the next
several quarters such that HireRight's revenue and earnings will
recover meaningfully from the steep declines caused by the COVID-19
pandemic. A portion of the operating efficiencies actioned in Q2
2020 are permanent, which will further support the positive
trajectory of HireRight's earnings over the next 12-18 months.
Although COVID-19 has yet to be contained and there are downside
risks that global employment trends will remain volatile over the
coming quarters, Moody's anticipates that HireRight's liquidity
profile will remain resilient such that the company will maintain
at least $110 million of total cash and revolver availability over
the next 12-15 months. Moody's acknowledges that the company has a
highly variable cost structure and can adjust its operating and
capital expenses in response to diminished demand for screening
services. Moody's also recognizes that despite an improved
operating profile, the company's financial leverage will remain
elevated over the next 12-18 months, which limits further upward
rating momentum at this time.
Affirmations:
Issuer: Genuine Financial Holdings, LLC
Probability of Default Rating, Affirmed Caa1-PD
Corporate Family Rating, Affirmed Caa1
Senior Secured 1st Lien Bank Credit Facility, Affirmed B3 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa3 (LGD5)
Outlook Actions:
Issuer: Genuine Financial Holdings, LLC
Outlook, Changed to Stable from Negative
RATINGS RATIONALE
Genuine Financial Holdings' Caa1 CFR is constrained by: (1) the
company's highly leveraged capital structure, with debt-to-EBITDA
(Moody's adjusted and expensing all capitalized software costs)
estimated at 11.2 times for the LTM period ended June 30, 2020,
which could increase considerably due to Moody's expectation for
lower earnings in FY 2020; (2) operating headwinds in the
background screening sector, including the risk for protracted
revenue and earnings contraction due to the COVID-19 pandemic and
uncertainties around the global macroeconomic outlook; (3)
operations within the highly competitive and fragmented market
segments; (4) modest operating scale and narrow product focus; (5)
moderate social and reputational risks; and (6) private equity
ownership which could lead to persistent elevated leverage levels.
Genuine Financial Holdings' ratings are supported by (1) a strong
global market position and screening capabilities that includes
services that are deeply embedded into clients' human resource,
security and risk management functions and entail high switching
costs; (2) good end user industry diversification, long standing
relationship with its blue-chip customers, good retention rates and
no significant customer concentration; (3) asset-lite operating
model with a highly variable cost structure and good EBITDA margin;
(4) capacity to manage its cost base in challenging economic
environments with continuous focus on efficiency improvements; and
(5) expectation that management will maintain at least adequate
liquidity over the next 12-15 months.
The stable outlook reflects Moody's expectation for an incremental
improvement in operating performance and liquidity stemming from
the gradual normalization of employment trends. The stable outlook
also reflects HireRight's demonstrated ability to quickly adjust
costs and maintain at least adequate liquidity.
Moody's expects HireRight to maintain adequate liquidity over the
next 12-15 months, but liquidity is at risk for deterioration
depending on the duration of the pandemic and the pace of recovery.
Sources of liquidity consist of balance sheet cash of roughly $40
million at June 30, 2020 and access to roughly $70 million of
availability under its $100 million revolving credit facility due
2023. The potential for negative free cash flow over the next
several quarters is heightened given the current economic
conditions. There are no financial maintenance covenants under the
first lien term loan but the revolving credit facility is subject
to a springing first lien leverage ratio of 7.3x when the amount
drawn exceeds 35% of the revolving credit facility. Moody's does
not anticipate that the covenant will be tested over the next 12-15
months; however, the EBITDA deterioration in the first half of FY
2020 will meaningfully reduce the headroom under the covenant in
the event of a test, or limit the company's ability to fully access
the revolving facility. The agreement also provides for covenant
cure rights. HireRight may exercise the option to cure the breach
with an incremental equity contribution for up to 5 times prior to
the maturity and up to two instances over four consecutive
quarters.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if HireRight's revenue and earnings
decline more severely than expected and do not begin to recover in
the second half of 2020, free cash flow remains largely negative,
or probability of default increases.
The ratings could be upgraded if HireRight demonstrates return to
organic growth, sustainably decreases in debt-to-EBITDA (Moody's
adjusted), improves free cash flow meaningfully and maintains at
least adequate liquidity.
Headquartered in Irvine, California, Genuine Financial Holdings,
LLC is the parent company of GIS and HireRight. GFH is the largest
global provider, based on revenue, of background screening and
compliance solutions, including criminal background checks,
credential verification, employee drug testing, and
fingerprint-based screening for enterprise clients. The company is
majority owned by General Atlantic and Stone Point Capital, with
remaining shares held by Ray Conrad (the founder of GIS). The
company generated annual revenue of approximately $575 million
during the LTM period ended June 30, 2020.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
GIBSON ENERGY: Moody's Affirms Ba2 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service affirmed Gibson Energy Inc.'s (Gibson)
Ba2 Corporate Family Rating (CFR), Ba2-PD Probability of Default
Rating and Ba2 rating on the existing senior unsecured notes. The
Speculative Grade Liquidity Rating was maintained at SGL-3
(adequate). The outlook remains stable.
"The affirmation and stable outlook reflect Gibson's stable cash
flow profile which helps sustain strong credit metrics," said
Paresh Chari, Moody's analyst.
Affirmations:
Issuer: Gibson Energy Inc.
Corporate Family Rating, Affirmed Ba2
Probability of Default Rating, Affirmed Ba2-PD
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2 to (LGD4)
from (LGD3)
Outlook Actions:
Issuer: Gibson Energy Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Gibson Ba2 rating is supported by 1) stable cash flow from its oil
tanks & terminals business, which will represent about 85% of
EBITDA in 2020; 2) take-or-pay and fee-based contracts with mostly
investment grade counterparties with a 10 year average remaining
contract life; and 3) strong adjusted debt/EBITDA of between 3x and
3.5x. Gibson is challenged by 1) its small size compared to other
North American midstream rated companies (2020 EBITDA of around
US$350 million, less than half the Ba2-rated average and one-fifth
the Ba1-rated average); 2) concentration risk because Gibson's
tanks and terminals are largely located in Hardisty, Alberta,
exposing the company to physical risk and to the economics of
Western Canadian oil; 3) a history of negative free cash flow that
will continue for at least the next few years as a result of high
capital expenditures, largely for new tanks, coupled with a high
dividend; 4) the volatility of cash flow from its Wholesale
segment, which is exposed to commodity price risk, evident from the
roughly C$200 million of segment profit earned in each of 2019 and
2018 compared to just C$30 million in 2017; and 5) merely adequate
liquidity.
Gibson's liquidity is adequate (SGL-3) because internal sources
(cash, cash flow, debt maturities) will be slightly negative, and
Gibson uses its revolver regularly and will increasing do so to
fund internal needs, although it has good unused headroom. Sources
total about C$680 million compared to uses of about C$300 million.
Sources consist of pro forma cash at June 2020 of about C$80
million and C$600 million of unused availability on its C$750
million revolver (due February 2025). Uses consist of expected
negative free cash flow of about C$200 million over the next year
and the C$100 million debt maturity of its convertible debentures
in July, 2021. Alternative sources of liquidity is good, as all
assets remain unencumbered.
The senior unsecured notes are rated Ba2, at the CFR, because
almost the entire liability structure is senior unsecured,
including the revolving credit facility. The unrated C$100 million
unsecured subordinated convertible debentures rank below the senior
unsecured debt in the capital structure, and both the notes and the
convertible at Gibson rank behind the C$450 million trade, pension
and lease liabilities of Gibson's operating companies.
The stable outlook reflects its expectation that debt to EBITDA
will remain under 4x in 2020 and 2021, and distribution coverage
will remain above 1x.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company diversifies its
business, increases EBITDA, reduces negative free cash flow and
improves liquidity, while maintaining debt to EBITDA below 3.5x
(2.8x at LTM Jun-20) and distribution coverage above 1.3x (2.1x at
LTM Jun-20).
The ratings could be downgraded if debt to EBITDA trends towards
4.5x (2.8x LTM Jun-20) or if distribution coverage was below 1x
(2.1x LTM Jun-20).
Gibson Energy Inc. (Gibson) is a Canadian midstream energy company
based in Calgary, Alberta, engaged largely in the contractual
storage of oil in tanks in Alberta, together with related market
optimization activities.
The principal methodology used in these ratings was Midstream
Energy published in December 2018.
GIGA-TRONICS INC: Jamie Weston Quits as Director
------------------------------------------------
Jamie Weston resigned from the board of directors of Giga-tronics
Incorporated on Sept. 21, 2020. Mr. Weston served on the Board's
Compensation Committee, Nominating and Governance Committee, and
Audit Committee.
On Sept. 24, 2020, the Board appointed Thomas E. Vickers as a
director of the Company, filling the vacancy resulting from Mr.
Weston's resignation. The Board has not appointed Mr. Vickers to
any committee. The Company expects that Mr. Vickers will be
appointed to the Board's Compensation Committee, Nominating and
Governance Committee and Audit Committee.
Mr. Vickers, age 56, served as the chief financial officer of
OmniComm Systems, Inc. a web-based software and services company,
from October 2012 until its acquisition by Anju Software, Inc. in
September 2019. Previously Mr. Vickers served as Omnicomm's vice
president of finance from October 2011 to October 2012. Prior to
joining OmniComm, Mr. Vickers was with Ocwen Financial Corporation,
a publicly traded diversified financial services holding company,
where he served in positions of increasing responsibility, most
recently as director, Servicing Operations. Prior to that, Mr.
Vickers was vice president, operations for S&J and vice president,
financial operations for Precision Response Corporation. Mr.
Vickers has undergraduate degrees in Finance and Accounting and a
Master of Taxation from Florida Atlantic University, and an MBA
from the University of Miami. He is a Chartered Financial
Analyst.
About Giga-tronics Inc.
Headquartered in Dublin, California, Giga-tronics is a publicly
held company, traded on the OTCQB Capital Market under the symbol
"GIGA". Giga-tronics -- http://www.gigatronics.com/-- produces
RADAR filters and Microwave Integrated Components for use in
military defense applications as well as sophisticated RADAR and
Electronic Warfare (RADAR/EW) test products primarily used in
electronic warfare test & emulation applications.
Giga-Tronics Inc. reported a net loss attributable to common
shareholders of $2.03 million for the year ended March 28, 2020,
compared to a net loss attributable to common shareholders of $1.04
million for the year ended March 30, 2019. As of June 27, 2020,
the Company had $9.55 million in total assets, $5.11 million in
total liabilities, and $4.45 million in total shareholders' equity.
GNC HOLDINGS: DLA Piper Represents Cowell & Lee, 3 Others
---------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of DLA Piper LLP (US) submitted a verified statement
that it is representing the Ad Hoc Group in the Chapter 11 cases of
GNC Holdings, Inc., et al.
In June 2020, the Ad Hoc Group retained DLA Piper LLP (US) as
counsel in connection with a potential restructuring of the
Debtors.
DLA Piper represents the Ad Hoc Group in connection with the
Debtors' chapter 11 cases. In addition, as of the date of this
Verified Statement, the Ad Hoc Group, both collectively and through
its individual members, does not represent or purport to represe't
any other creditors or entity in connection with the Debtors'
chapter 11 cases.
As of Sept. 23, 2020, members of the Ad Hoc Group and their
disclosable economic interests are:
Principal Amount of Notes
-------------------------
Cowell & Lee $71,460,000.00
Asia Credit Opportunities Fund
1501 Ruttonjee House
11 Duddell Street
Central Hong Kong
Luxor Capital Group, L.P. $11,000,000.00
1114 Avenue of the Americas
28th Floor
New York, NY 10036
CIC Market Solutions $11,500,000.00
CIC Marchés
31 rue Jean Wenger-Valentin
67000 Strasbourg
France
Credit Suisse Hong Kong Ltd. $13,095,000.00
1 Austin Road West Level
88 Kowloon Hong Kong
Nothing contained in this Verified Statement should be construed as
a limitation upon, or waiver of, any rights of any member of the Ad
Hoc Group to, on its own behalf, assert, file, and/or amend any
claim or proof of claim filed in accordance with applicable law and
any orders entered in these chapter 11 cases or any other
proceeding in any jurisdiction regarding debtor-creditor
relations.
The Ad Hoc Group, through its undersigned counsel, further reserves
the right to amend and/or supplement this Verified Statement in
accordance with the requirements set forth in Bankruptcy Rule 2019
at any time in the future.
Counsel to the Ad Hoc Group can be reached at:
DLA PIPER LLP (US)
R. Craig Martin, Esq.
1201 North Market Street
Suite 2100
Wilmington, DE 19801
Telephone: (302) 468-5700
Facsimile: (302) 394-2341
Email: craig.martin@us.dlapiper.com
- and -
Thomas R. Califano, Esq.
Jamila Justine Willis, Esq.
Gregory M. Juell, Esq.
1251 Avenue of the Americas
New York, NY 10020
Telephone: (212) 335-4500
Facsimile: (212) 335-4501
Email: thomas.califano@us.dlapiper.com
jamila.willis@us.dlapiper.com
gregory.juell@us.dlapiper.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3j67ezW and https://bit.ly/33ZRbxg
About GNC Holdings
GNC Holdings Inc. -- http://www.gnc.com/-- is a global health and
wellness brand with a diversified omni-channel business. In its
stores and online, GNC Holdings sells an assortment of performance
and nutritional supplements, vitamins, herbs and greens, health and
beauty, food and drink, and other general merchandise, featuring
innovative private-label products as well as nationally recognized
third-party brands, many of which are exclusive to GNC Holdings.
GNC Holdings and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11662) on
June 23, 2020. The Debtors disclosed $1,415,957,000 in assets and
$895,022,000 in liabilities as of March 31, 2020.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Latham
& Watkins, LLP as legal counsel; Evercore Group, LLC as investment
banker and financial advisor; FTI Consulting, Inc., as financial
advisor; and Prime Clerk as claims and noticing agent. Torys LLP is
the legal counsel in the Companies' Creditors Arrangement Act case.
GOGO INC: Adopts Rights Plan to Protect Valuable Tax Assets
-----------------------------------------------------------
Gogo Inc. has adopted a Section 382 Rights Plan to preserve and
protect Gogo's ability to utilize its large net operating loss
carryforwards and other tax assets.
As of Dec. 31, 2019, Gogo had approximately $580 million of federal
tax NOLs, $430 million of state tax NOLs and $196 million in
federal interest expense carryforwards which could be used in
certain circumstances to reduce its future tax liability. The
purpose of the Plan is to protect Gogo's ability to use these tax
assets, which would be substantially limited if Gogo experienced an
"ownership change" as defined under Section 382 of the Internal
Revenue Code. In general, an ownership change would occur if one
or more of Gogo's shareholders who are deemed to be owners of 5
percent or more of its shares under Section 382 collectively
increase their aggregate ownership of Gogo's shares by 50
percentage points or more (measured over a rolling three-year
period).
Under the Plan, Gogo is issuing one Right for each share of its
common stock outstanding at the close of business on Oct. 2, 2020.
Shareholders are not required to take any action to receive the
Rights. Gogo intends to submit the Plan to a vote of its
stockholders at its 2021 annual meeting. The Plan will expire on
the day following the certification of the voting results for
Gogo's 2021 annual meeting, unless Gogo stockholders ratify the
Plan at or prior to such meeting, in which case the Plan will
continue in effect until Sept. 23, 2023, unless terminated earlier
in accordance with its terms.
Pursuant to the Plan, the Board declared a dividend of one
preferred share purchase right for each outstanding share of common
stock. The Rights will be exercisable only if a person or group
acquires beneficial ownership of 4.9 percent or more of Gogo's
common stock. Gogo's existing stockholders that currently
beneficially own 4.9 percent or more of the common stock will be
"grandfathered" at their current ownership levels. GTCR and its
affiliates, which currently own 14.9 percent of Gogo's common
stock, have indicated their support for the adoption of the Plan.
If the Rights become exercisable, all holders of Rights, other than
the person or group triggering the Rights, will be entitled to
purchase Gogo common stock at a 50% discount or the Company may
elect to exchange each right held by such holders for one share of
common stock. Rights held by the person or group triggering the
Rights will become void and will not be exercisable or
exchangeable. The Board of Directors has the discretion to exempt
any person or group from the provisions of the Plan.
About Gogo Inc.
Gogo Inc. -- http://www.gogoair.com/-- is an inflight internet
company that provides broadband connectivity products and services
for aviation. It designs and sources innovative network solutions
that connect aircraft to the Internet, and develop software and
platforms that enable customizable solutions for and by its
aviation partners. Gogo's products and services are installed on
thousands of aircraft operated by the leading global commercial
airlines and thousands of private aircraft, including those of the
largest fractional ownership operators. Gogo is headquartered in
Chicago, IL, with additional facilities in Broomfield, CO, and
locations across the globe.
Gogo Inc. reported a net loss of $146 million for the year ended
Dec. 31, 2019, compared to a net loss of $162.03 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$1.06 billion in total assets, $1.63 billion in total liabilities,
and a total stockholders' deficit of $569.02 million.
* * *
As reported by the TCR on Sept. 4, 2020, Moody's Investors Service
changed Gogo Inc.'s outlook to positive from stable following the
company's announcement that it had agreed to sell its commercial
aviation (CA) business to Intelsat Jackson Holdings S.A.
Concurrently, Moody's affirmed Gogo's Caa1 corporate family rating.
As reported by the TCR on March 20, 2020, S&P Global Ratings placed
all of its ratings on Gogo Inc., including its 'CCC+' issuer credit
rating, on CreditWatch with negative implications. S&P placed its
ratings on Gogo on CreditWatch with negative implications because
the company does not have sufficient liquidity cushion to absorb a
significant and prolonged cut to global air travel.
GOODRICH QUALITY: GQT Movies Push Reopening of Movie Theaters
-------------------------------------------------------------
Callie Rainey of WWMT reports that movie theaters in West Michigan
were hopeful to reopen five months after being forced, under gov.
Gretchen Whitmer's orders, to close their doors in March due to the
COVID-19 pandemic. That approval hasn't come, yet.
"Slow to be heard at governor's office level. At this point, we
feel like we have no other choice to really pound our message in.
It would be ideal if the public would support," said Matt McSparin,
GQT Movies Executive Vice President Administration and Finance.
McSparin said theaters are just as safe, if not more safe, than
places that have already reopened.
GQT Movies took over operations at Kalamazoo 10, after Goodrich
Quality Theaters filed for chapter 11 bankruptcy in February, just
before the COVID-19 pandemic hit Michigan.
McSparin said because of the bankruptcy and new management, only 22
of the 28 original properties would reopen. Kalamazoo 10 is among
those.
There was not yet a reopening date for Kalamazoo 10 due to the
COVID-19 pandemic, but McSparin said he is hopeful the National
Association of Theatres Owners of Michigan will change that.
"Remain vigilant and confident we can have our voice heard. The
theater operators in West Michigan are working together to get our
voice heard, and we just have to remain hopeful," said McSparin.
GQT Movies has developed a COVID-19 preparedness plan, McSparin
said.
"We'll be providing things our guests can reach out, and seek out,
to make sure they feel safe in our environment," McSparin said.
That plan includes:
* Ensuring social distancing by having three open seats between
groups
* Sanitizing seats after each movie
* Giving customers sanitation wipes
* Sanitation stations throughout the theater
* Requiring masks in common places
* Conducting pre-screenings for employees daily
"We really believe if the government entities would allow us to
explain our plan, and what we're doing to provide a safe
environment, they would get their eyes on that and see we're going
to approach it as safe, or more safe, as any other industry
operating," McSparin said.
About Goodrich Quality Theaters
Goodrich Quality Theaters, Inc. -- http://www.gqti.com/-- owns and
operates 30 theaters with 281 screens in cities throughout
Michigan, Indiana, Illinois, Florida and Missouri.
Goodrich Quality Theaters sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Mich. Case No. 20-00759) on Feb. 25,
2020. The petition was signed by Bob Goodrich, its president and
secretary. At the time of the filing, the Debtor had estimated
assets of between $50 million and $100 million and liabilities of
between $10 million and $50 million. Judge Scott W. Dales oversees
the case.
Debtor tapped Keller & Almassian, PLC as legal counsel; Stout
Risius Ross Advisors, LLC as investment banker; and Novo Advisors
as financial advisor.
A committee of unsecured creditors has been appointed in Debtors'
bankruptcy cases. The committee is represented by Pachulski Stang
Ziehl & Jones LLP.
GRIMMETT BROTHERS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Grimmett Brothers, Inc.
1312 Avenue R
Snyder, TX 79549
Business Description: Grimmett Brothers, Inc. is a family owned
Texas corporation that operates as a service
company to the oilfield, providing dirt,
mud, gravel and caliche to oil drilling
sites. The company builds oilfield location
sites, roads, pits, etc. in preparation for
the drilling.
Chapter 11 Petition Date: September 25, 2020
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 20-50184
Debtor's Counsel: Max R. Tarbox, Esq.
TARBOX LAW, P.C.
2301 Broadway
Lubbock, TX 79401
Tel: (806) 686-4448
Fax: (806) 368-9785
Email: jessica@tarboxlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Allen Grimmett, director and
stockholder.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/R4ET76I/Grimmett_Brothers_Inc__txnbke-20-50184__0001.0.pdf?mcid=tGE4TAMA
HERMITAGE OFFSHORE: In Chapter 11 Due to Pandemic, Oil Slump
------------------------------------------------------------
Hermitage Offshore Services Ltd. and 28 of its subsidiaries
including all its vessel-owning subsidiaries announced that they
have filed voluntary petitions for reorganization under Chapter 11
of the Bankruptcy Code in the United States Bankruptcy Court for
the Southern District of New York.
The Company took this action following a prolonged slump in global
oil prices, driven in part by the global coronavirus pandemic, and
its effect on the Company's business. While the Company would have
preferred to complete its financial restructuring out of court, it
was unable to reach a consensual agreement with its lenders, which
made filing Chapter 11 necessary to provide a single forum for all
continuing conversations with its lenders.
The Company anticipates that the Company's business operations and
relationship with its customers and vendors will not be adversely
affected by this proceeding while it works constructively with its
lenders toward a consensual resolution. The Company values the
business of its customers and vendors and is committed to
continuing its long-standing business relationships with them
uninterrupted as it works through this process. Under Chapter 11
protection, the Company’s vendors are afforded "administrative"
status for all shipments made, or services provided, subsequent to
the filing. As a result, payments for new shipments or services
will be made in the ordinary course of business either by the
Company or one of the Company's managers, which is not part of the
Chapter 11 filing.
The Company's customers are also afforded the aforementioned
"administrative" status. As such, they will continue to receive
uninterrupted service from the Company and the Company will perform
all of its duties and obligations under its current and future
charter party agreements.
The Company's customers and vendors have been historically paid by
one of the Company's managers which is outside the Chapter 11 cases
and so customers and vendors will be paid amounts due now and in
the future without interruption.
About Hermitage Offshore
Bermuda-based Hermitage Offshore Services Ltd. (previously Nordic
American Offshore Ltd.) -- http://www.hermitage-offshore.com/-- is
an offshore support vessel company that owns 23 vessels consisting
of 10 platform supply vessels, or PSVs, two anchor handling tug
supply vessels, or AHTS vessels, and 11 crew boats. The Company's
vessels primarily operate in the North Sea or the West Coast of
Africa.
The Debtors' OSVs are all focused on, and used primarily in, the
oil and gas business, including in the installation, maintenance,
and movement of oil and gas platforms. Demand for the Debtors'
services, as well as its operations, growth, and stability in the
value of the OSVs depend on activity in offshore oil and natural
gas exploration, development, and production.
Hermitage Offshore Services Ltd. (Lead Debtor) (Bankr. S.D.N.Y.
Case No. 20-11850) and 20 affiliates sought Chapter 11 protection
on Aug. 11, 2020. The cases are assigned to Judge Martin Glenn.
In the petitions signed by Cameron Mackey, director, the
consolidated cases estimated assets and liabilities in the range of
$100 million to $500 million.
The Debtors tapped Brian S. Rosen, Esq., and Joshua A. Esses, Esq.,
at Proskauer Rose LLP as counsel. The Debtors tapped Perella
Weinberg Partners L.P. as their Investment Banker. They tapped
Napdragon Advisory AB as their Professional Shipping Advisory Firm.
Prime Clerk LLC serves as the Debtors' Claims, Noticing and
Solicitation Agent.
HERTZ CORP: Seeks Approval to Modify Scope of FTI Services
----------------------------------------------------------
The Hertz Corporation and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to modify the
scope of services of their restructuring advisor, FTI Consulting
Inc.
The request, if granted by the court, will allow Debtors to utilize
FTI personnel on a temporary basis to staff vacant positions in
their corporate departments until they find permanent replacements.
FTI had earlier provided three consultants to provide additional
support to fill the staffing needs created by the departure of
certain accountants in Debtors' Corporate Accounting and Reporting
group. The consultants began work on Aug. 31.
FTI will bill Debtors at fixed monthly rates for the provision of
additional personnel. The proposed monthly rates are as follows:
Managing Director $100,000
Director/Senior Director $75,000 - $90,000
Senior Consultant $65,000
Consultant $55,000
The proposed monthly rates represent a 26.2 percent cost savings
for Debtors compared to FTI's existing hourly fee structure.
FTI can be reached through:
Michael Buenzow
FTI Consulting, Inc.
227 West Monroe Street, Suite 900
Chicago IL 60606
Telephone: (312) 759-8100
Facsimile: (312) 759-8119
Email: michael.buenzow@fticonsulting.com
About Hertz Corp.
Hertz Corp. and its subsidiaries operate a worldwide vehicle rental
business under the Hertz, Dollar, and Thrifty brands, with car
rental locations in North America, Europe, Latin America, Africa,
Asia, Australia, the Caribbean, the Middle East, and New Zealand.
They also operate a vehicle leasing and fleet management solutions
business. Visit http://www.hertz.comfor more information.
On May 22, 2020, The Hertz Corporation and certain of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court for
the District of Delaware (Bankr. D. Del. Case No. 20-11218).
Judge Mary F. Walrath oversees the cases.
Debtors have tapped White & Case LLP as their bankruptcy counsel,
Richards, Layton & Finger, P.A. as local counsel, Moelis & Co. as
investment banker, and FTI Consulting as financial advisor. Prime
Clerk LLC is the claims agent.
The U.S. Trustee for Regions 3 and 9 appointed a committee to
represent unsecured creditors in Debtors' Chapter 11 cases. The
committee has tapped Kramer Levin Naftalis & Frankel LLP as its
bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as
Delaware counsel, UBS Securities LLC as investment banker, and
Berkeley Research Group, LLC as financial advisor. Ernst & Young
LLP provides audit and tax services to the committee.
HERTZ GLOBAL: Searches for $1.5 Billion of Bankruptcy Financing
---------------------------------------------------------------
MarketWatch reports that Hertz Global Holdings Inc. is on the hunt
for a bankruptcy loan totaling as much as $1.5 billion after
regulators blocked the rental car company from pursuing a sale of
what likely would be worthless stock, according to people familiar
with the matter.
Hertz reached out to existing creditors, as well as potential
outside investors, for a debtor-in-possession loan sized at $1.1
billion to $1.5 billion, the people said.
The car rental company sought chapter 11 in May without a deal with
creditors and without a bankruptcy loan to fund its business,
unusual for a company of Hertz's size saddled with roughly $19
billion in debt. At the time, the company's finance chief said
Hertz had enough cash on hand to fund its operations at least
through the initial stage of the case.
But as the company's bankruptcy case drags on amid the continuing
coronavirus pandemic fallout on travel, the need for financing has
become more acute.
WSJ Pro Bankruptcy reported earlier that Hertz was in talks with
its lenders to obtain financing that would help keep it afloat
during bankruptcy.
Hertz's need for cash became more critical after the company pulled
the plug on its plan to raise up to $500 million through the sale
of its stock during the reorganization.
The company had tried to capitalize on a speculative frenzy fueled
by risk-hungry day traders, believing it was a golden opportunity
to raise inexpensive capital to cover its bills in chapter 11
proceedings that are often expensive.
Estero, Fla. -based Hertz raised $29 million selling its likely
worthless stock before the SEC dissuaded it from selling more.
Now the car rental company needs cash to keep its doors open
through the fall as the Covid-19 pandemic continues to play havoc
with the world-wide travel industry.
Hertz lost a total of $852 million over the three months ended June
30, according to a securities filing.
Complicating matters is the fact that Hertz doesn't own its rental
car fleet, and can't pledge those assets as collateral to lenders.
Hertz bondholders have the rights to the vehicle fleet, so
collateral securing a DIP loan would be derived from its operating
business itself, including its trademarks, intellectual property,
customer systems and concessions at airports throughout the
country.
About Hertz Global Holdings
Hertz Corp. and its subsidiaries -- http://www.hertz.com/--
operate a worldwide vehicle rental business under the Hertz,
Dollar, and Thrifty brands, with car rental locations in North
America, Europe, Latin America, Africa, Asia, Australia, the
Caribbean, the Middle East, and New Zealand. The Company also
operates a vehicle leasing and fleet management solutions
business.
On May 22, 2020, The Hertz Corporation and certain of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court
(Bankr. D. Del. Case No. 20-11218).
The Hon. Mary F. Walrath is the presiding judge.
White & Case LLP is serving as legal advisor, Moelis & Co. is
serving as investment banker, and FTI Consulting is serving as
financial advisor. Richards, Layton & Finger, P.A., is the local
counsel.
Prime Clerk LLC is the claims agent, maintaining the page
https://restructuring.primeclerk.com/hertz
HORTON INVESTMENTS: Seeks to Hire Hoover Penrod as Legal Counsel
----------------------------------------------------------------
Horton Investments, LLC, seeks authority from the United States
Bankruptcy Court for Western District of Virginia to hire Hoover
Penrod, PLC as its legal counsel.
(a) advise the Debtor with respect to its powers and duties as
debtor in possession in the continued management and operation of
the assets of their respective estates;
(b) advise and consult on the conduct of the case, including
all of the legal requirements of operating in Chapter 11;
(c) attend meetings and negotiate with representatives of
Debtor's creditors and other parties in interest;
(d) take all necessary action to protect and preserve the
Debtor's estates, including prosecuting actions on the Debtor's
behalf, defending any actions commenced against the Debtor, and
representing the Debtor's interests in negotiations concerning all
litigation in which the Debtor is involved, including objections to
claims filed against the Debtor's estate;
(e) prepare all pleadings, including motions, applications,
answers, orders, reports, and papers necessary or otherwise
beneficial to the administration of the Debtor's estate;
(f) advise the Debtor in connection with any potential sale of
assets;
(g) appear before the Court to represent the interests of the
Debtor's estate before the Court;
(h) take any necessary action on behalf of the Debtor to
negotiate, prepare on behalf of the Debtor, and obtain approval of
Chapter 11 plan and documents related thereto; and
(i) perform all other necessary or otherwise beneficial legal
services to the Debtor in connection with prosecution of this
case.
Counsel's services will be provided mainly by Hannah W. Hutman
whose current hourly rate is $330 and C. Andrew Bolt whose current
hourly rate is $250. Other attorneys at the firm may occasionally
work on the case at the hourly rate of $330 or lower. To the extent
paralegal personnel provide services their time will be billed at
$100 per hour.
Hoover Penrod and its attorneys are each a "disinterested person"
within the meaning of Sec. 101(14) of the Bankruptcy Code, as
required by Sec. 327(a) of the Bankruptcy Code, and do not
represent an interest adverse to the Debtors' estate, according to
court filings.
The firm can be reached through:
Hannah W. Hutman, Esq.
C. Andrew Bolt, Esq.
HOOVER PENROD PLC
342 South Main Street
Harrisonburg, VA 22801
Phone: 540/433-2444
Fax: 540/433-3916
Email: hhutman@hooverpenrod.com
abolt@hooverpenrod.com
Horton Investments, LLC primarily engages in renting and leasing
real estate properties.
Horton Investments, LLC, filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Va. Case No.
20-50647) on August 28, 2020. The petition was signed by Nancy B.
Horton, member manager.
IOTA COMMUNICATIONS: Signs Debt Restructuring Agreement
-------------------------------------------------------
Iota Communications, Inc. entered into a debt restructuring
agreement with Forced Conversion Rights, by and between the Company
and AIP Asset Management Inc., in its capacity as Security Agent,
under a Note Purchase Agreement, dated as of Oct. 31, 2018, between
the Company, AIP, and AIP Convertible Private Debt Fund L.P. f/k/a/
AIP Global Macro Fund L.P, and any other parties that become
Noteholders from time to time, collectively.
In connection with the Restructuring Agreement, all outstanding
notes previously issued under the Note Purchase Agreement were
cancelled. In addition, the 14,673,800 shares of common stock and
21,350,000 warrants to purchase shares of common stock previously
issued to the Noteholders, and the Company's obligation to issue an
additional 2,000,000 shares of common stock to the Noteholders,
were cancelled. The canceled notes, shares, and warrants were
replaced with a secured convertible replacement note and a secured
convertible royalty note. Upon execution of the Restructuring
Agreement, the Company borrowed an additional $1,100,000 under the
Replacement Note.
The Replacement Note, with a principal balance of $9,000,000, and
the Royalty Note, with a principal balance of $6,000,000, both
mature on Nov. 30, 2021, unless earlier converted in accordance
with the terms of the Restructuring Agreement.
The Notes bear interest at a rate of 10% per annum, provided that
during an event of default, they will bear interest at a rate of
20% per annum. The Company has prepaid interest on the Replacement
Note through Dec. 31, 2020. Beginning Jan. 1, 2021, interest on
the Replacement Note will be calculated monthly with 4% payable
monthly, and 6% added monthly to the outstanding principal balance
until the entire principal balance has been repaid in full.
Interest on the Royalty Note will be calculated monthly and added
to the outstanding principal balance.
In addition, and as specified within the Royalty Note, the Company
will pay the Noteholders a royalty equal to 5% of the Company's
revenues, with the first payment made no later than Sept. 20, 2021
for the Company's fiscal year ending May 31, 2021. Thereafter, and
until the Royalty Note is fully repaid or converted, the royalty
payments are due monthly, in arrears, in an amount equal to 5% of
the Company's revenues for such month.
The Company may elect to convert all or part of the principal
balance, together with accrued and unpaid interest and any other
amount then payable under the Notes, into Units at any time all of
the conditions specified within the Restructuring Agreement are
met., at a conversion price of $0.12 (subject to adjustment as
provided in the Restructuring Agreement). Each Noteholder has the
right, at such Noteholder's option, at any time, to convert all or
part of the Notes, together with accrued and unpaid interest and
any other amount then payable under the Notes, into Units, at the
Conversion Price. A Unit consists of one share of common stock of
the Company and one warrant entitling the holder thereof to
subscribe for one share of common stock of the Company for a period
of 60 months from the date of issuance at an exercise price of
$0.12 per share (subject to adjustment as provided in the
Restructuring Agreement).
The Restructuring Agreement waives compliance by the Company, and
any default associated with the Company's failure to comply with
certain monthly paydown and financial covenants under the Note
Purchase Agreement provided the Company meets three specific
criteria by the specified deadlines in the Restructuring Agreement.
The Company has met one of the three criteria by the applicable
deadline. If the other two criteria are not met by their
applicable deadlines, an event of default could occur.
As part of the debt restructuring, the Company agreed to issue
5,000,000 shares of its common stock to AIP Private Capital Inc. as
a prepayment of all monitoring fees payable until the Notes are
fully repaid or converted.
About Iota Communications
Newark, New Jersey-based Iota Communications, Inc., formerly known
as Solbright Group, Inc. -- https://www.iotacommunications.com/ --
is a wireless network carrier system and software applications
provider dedicated to the Internet of Things. Iota sells
recurring-revenue solutions that optimize energy usage,
sustainability and operations for commercial and industrial
facilities both directly and via third-party relationships. Iota
also offers important ancillary products and services which
facilitate the adoption of its subscription-based services,
including solar energy, LED lighting, and HVAC implementation
services.
Iota Communications reported a net loss of $56.78 million for the
year ended May 31, 2019, compared to a net loss of $16.49 million
for the year ended May 31, 2018. As of Nov. 30, 2019, the Company
had $35.92 million in total assets, $115.05 million in total
liabilities, and a total deficit of $79.13 million.
Friedman LLP, in Marlton, NJ, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated Sept.
13, 2019, citing that the Company has an accumulated deficit and a
working capital deficiency as of May 31, 2019, generated recurring
net losses, and negative cash flows from operating activities that
raise substantial doubt about its ability to continue as a going
concern.
J.C. PENNEY CORP: Bay Shore Store Saved from Permanent Closure
--------------------------------------------------------------
Priscilla Korb of Patch reports that two months after the store was
set to shutter, department store chain J.C. Penney announced that
the Bay Shore, N.Y. store will now remain open.
In June, the department store chain announced that the store
located on Westfield South Shore Mall on 1701 Sunrise Highway would
be one of two New York locations set to close soon. The retailer
stated it will be shuttering the stores permanently while in
Chapter 11 bankruptcy amid the coronavirus pandemic.
However, in a recent statement, a spokesperson for the company
stated that J.C. Penney was re-evaluating its "retail footprint"
and removing some stores from the list of 136 total stores
originally set to close — including the Bay Shore store.
"As JCPenney continues to evaluate its retail footprint and make
strategic decisions for the future of the business, some stores
have been removed from the previously announced list of closures
and will remain open, including our store at Westfield South
Shore," spokesperson Kristen Bennett said. "We look forward to
continue serving our customers in Bay Shore with many safety
precautions in place."
According to a WARN notice posted by the NY Department of Labor,
the possible closure would have affected the jobs of 136 employees.
The Bay Shore J.C. Penney is only one of two remaining on Long
Island. The other store is located at Roosevelt Field Mall in
Garden City.
While the J.C. Penney store was saved, another department store
chain at the South Shore Mall will be set to close. Lord & Taylor
announced recently that it will be shuttering the Bay Shore
location, also due to bankruptcy.
About J.C. Penney
J.C. Penney Corporation, Inc., is an American retail company,
founded in 1902 by James Cash Penney and today engaged in marketing
apparel, home furnishings, jewelry, cosmetics, and cookware. The
company was called J.C. Penney Stores Company from 1913 to 1924,
when it was reincorporated as J.C. Penney Co.
On May 15, 2020, JCPenney announced that it has entered into a
restructuring support agreement with lenders holding 70% of
JCPenney's first lien debt. The RSA contemplates agreed-upon terms
for a pre-arranged financial restructuring plan that is expected to
reduce several billion dollars of indebtedness. To implement the
Plan, the Company and its affiliates on May 15, 2020, filed
voluntary petitions for reorganization under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182).
Kirkland & Ellis LLP is serving as legal advisor, Lazard is serving
as financial advisor, and AlixPartners LLP is serving as
restructuring advisor to the Company. Prime Clerk is the claims
agent, maintaining the page http://cases.primeclerk.com/JCPenney
The Official Committee of Unsecured Creditors appointed to the
Chapter 11 cases tapped Cooley LLP and Cole Schotz P.C. as
co-counsel and FTI Consulting, Inc. as financial advisor.
J.CREW: Reaches Better Lease Deal With Landlords
------------------------------------------------
Samantha McDonalds of Footwear News reports that bankrupt J.Crew
Group Inc. has settled on a deal with property owners over its rent
payments. The American clothier announced that it reached an
agreement with its landlords to improve lease terms on its
brick-and-mortar portfolio of J.Crew and Madewell units. It
currently operates 178 J.Crew locations, 145 Madewell outposts, as
well as the online platforms of both brands and 170 factory
stores.
In a statement, J.Crew said it expects to achieve cash savings this
year of roughly $70 million, which includes the benefit of one-time
waivers and deferrals, as well as $60 million next year, assuming
sales are in line with projections.
The discussions with landlords were part of the company's
restructuring process. After filing for Chapter 11 protection in
early May 2020, J.Crew received more than a dozen objections to its
appeal to avoid rent obligations in the first couple months of its
bankruptcy. Among the mall operators that raised issues with the
New York-based chain, which shuttered its stores in March as the
coronavirus pandemic took hold, were Simon Property Group Inc.,
Grand Place LLC, CBL & Associates Management Inc. and Brookfield
Property REIT Inc.
As of Aug. 12, 2020, J.Crew has resumed business at 458 stores,
which represents approximately 95% of its total fleet. With these
reopenings, the retailer has brought back the "vast majority" of
its associates who had been placed on furlough. It added that it
has taken a "careful approach" to operating its locations to ensure
that it complies with safety protocols in line with guidelines
provided by the Centers for Disease Control and Prevention, plus
those of local and state governments.
Although the pandemic precipitated its demise, J.Crew has
floundered for several years with disappointing financial results.
At the end of the most recent fiscal year, the company had just
$27.2 million left in cash, versus a debt load of about $1.7
billion. In its fourth-quarter earnings report, its flagship brand
posted a sales decrease of 2% to $516.8 million, with comps that
improved 1%. Madewell outperformed the business as a whole, logging
a revenue increase of 13% to $178.1 million, along with a 9% rise
in comps.
About J.Crew Group
J.Crew Group, Inc. is an internationally recognized omni-channel
retailer of women's, men's and children's apparel, shoes and
accessories. As of May 4, 2020, the Company operates 181 J.Crew
retail stores, 140 Madewell stores, jcrew.com, jcrewfactory.com,
madewell.com and 170 factory stores. The company was purchased in
2011 by TPG Capital and Leonard Green & Partners LP for $3
billion.
J.Crew Group, Inc., and 17 related entities, including its parent,
Chinos Holdings, Inc., sought Chapter 11 protection on May 4, 2020
after reaching agreement with lenders on a deal that will convert
approximately $1.65 billion of the Company's debt into equity. The
lead case is In re Chinos Holdings, Inc. (Bankr. E.D. Va. Lead Case
No. 20-32181).
J.Crew was estimated to have at least $1 billion in assets and
liabilities as of the bankruptcy filing.
Weil, Gotshal & Manges LLP is serving as legal counsel, Lazard is
serving as investment banker and AlixPartners, LLP is serving as
restructuring advisor to J.Crew Group, Inc. Anchorage Capital
Group and other members of an ad hoc committee are represented by
Milbank LLP as legal counsel and PJT Partners LP as investment
banker. Omni Agent Solutions is the claims agent.
The Official Committee of Unsecured Creditors is represented by
Robert J. Feinstein, Bradford J. Sandler, Shirley S. Cho and Debra
I. Grassgreen of Pachulski Stang Ziehl & Jones LLP and Robert S.
Westermann and Brittany B. Falabella of Hirschler Fleischer PC.
J.D. BEAVERS: Oct. 5 Plan & Disclosure Hearing Set
--------------------------------------------------
J.D. Beavers Co., LLC, filed with the U.S. Bankruptcy Court for the
Eastern District of Michigan, Southern Division, a combined Second
Amended Plan of Reorganization and Disclosure Statement.
On August 6, 2020, Judge Joel D. Applebaum approved the Second
Amended Disclosure Statement and ordered that:
* Sept. 21, 2020 is the deadline to return ballots on the Second
Amended Plan of Reorganization, as well the deadline to file
objections to final approval of the Second Amended Disclosure
Statement and objections to confirmation of the Second Amended Plan
of Reorganization.
* Oct. 5, 2020 at 10:00 a.m. in the U.S. Bankruptcy Courtroom,
226 West Second Street, Flint, Michigan 48502 or by telephonic or
video conference is the hearing on objections to final approval of
the Second Amended Disclosure Statement and confirmation of the
Second Amended Plan of Reorganization.
A full-text copy of the order dated August 6, 2020, is available at
https://tinyurl.com/yyepo9dq from PacerMonitor.com at no charge.
About Debtor J.D. Beavers
J.D. Beavers Co. LLC is a recycling company in Brighton, Michigan
that converts scrap metal into reusable raw materials for the metal
making industry. The company buys aluminum, carbide, coated wire,
copper, brass & red metals, gold & silver, lead acid battery, niton
XL3t, steel, stainless steel, and tool steel. The Company filed a
Chapter 11 petition (Bankr. E.D. Mich. Case No. 19-32748) on Nov.
20, 2019 in Flint, Michigan.
In the petition signed by John D. Beavers, president, the Debtor
was listed with total assets at $950,945 and total liabilities at
$2,495,614. Judge Joel D. Applebaum administers the case. Schafer
and Weiner, PLLC, and The Fox Law Corporation, Inc., serve as
counsel to the Debtor.
JANE STREET: Moody's Alters Outlook on Ba2 CFR to Positive
----------------------------------------------------------
Moody's Investors Service affirmed Jane Street Group, LLC's Ba2
Corporate Family Rating and Ba3 senior secured first lien term
loan. Moody's has changed its outlook on Jane Street to positive
from stable.
Affirmations:
Issuer: Jane Street Group, LLC
Corporate Family Rating, Affirmed Ba2
Senior Secured 1st Lien Term Loan, Affirmed Ba3
Outlook Actions:
Issuer: Jane Street Group, LLC
Outlook, Positive, from Stable
RATINGS RATIONALE
Moody's said the Ba2 CFR and Ba3 senior secured rating reflects
Jane Street's highly profitable business model and strong market
position as a global electronic market maker and liquidity
provider. The firm's business model generates significant trading
gains, especially during volatile periods, such as in the first
half of 2020. The coronavirus pandemic - and related uncertainty
surrounding the future economic outlook and recovery - produced
unusually high levels of market volatility and market trading
volumes from the middle of the first quarter onwards. Moody's said
that Jane Street has clearly demonstrated its ability to profit
from significant increases in market volumes despite the
challenging operating conditions that have persisted throughout the
pandemic. Jane Street's strong profitability has resulted in
significant increases in its capital position, a credit positive.
Jane Street's ratings incorporate the inherently high level of
operational and market risks from the firm's market-making
activities, that could result in severe losses and a deterioration
in liquidity and funding in the event of a significant risk
management failure. However, the firm's partnership-like culture
and key executives' high level of involvement in control and
management oversight provide an effective risk management
framework, said Moody's.
Moody's said that Jane Street's overall growth has accelerated,
with a specific expansion into segments like fixed income trading,
that are adjacent to its historical areas of core competency.
Moody's said Jane Street's ratings also consider the firm's trading
expansion into these higher-risk, and generally less-liquid
securities, which requires careful management of incremental
liquidity and market risks.
Moody's said Jane Street's Ba3 senior secured loan is issued by
Jane Street's holding company, and accordingly this rating is one
notch below Jane Street's Ba2 CFR because obligations at the
holding company are structurally subordinated to Jane Street's
operating companies, where the preponderance of the group's debt
and debt-like obligations reside.
Moody's said the change in outlook to positive from stable reflects
an improving trend in Jane Street's credit profile, with higher
capital and greater liquidity. Moody's said a key factor that would
support a sustained improvement in Jane Street's credit profile is
the maintenance and evolution of the firm's risk management and
controls' framework to fully reflect the incremental risks
associated with its growth.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade
Strong demonstration and maintenance of a sound risk management and
controls' framework that supports the firm's growth and risk
appetite
Improved quality and diversity of profitability and cash flows from
development of lower-risk trading strategies
Reduction in holdings of less-liquid and higher-risk assets while
maintaining strong profitability
Reduced reliance on key prime brokerage relationships
Factors that could lead to a downgrade
Increased risk appetite or failure to effectively evolve the risk
management and controls' framework to meet the challenges posed by
rapid growth
Adverse changes in corporate culture or management quality
Reduced profitability from changes in market or regulatory
environment
Significant reduction in retained capital
The principal methodology used in these ratings was Securities
Industry Market Makers Methodology published in November 2019.
JJE INC: Seeks to Hire BDC Taxes as Accountant
----------------------------------------------
JJE, Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Puerto Rico to hire BDC Taxes & Accounting Services,
LLC as its accountant.
The firm will assist in the preparation of monthly operating
reports and will provide other accounting services in connection
with Debtor's Chapter 11 case.
BDC Taxes will receive a monthly fee of $350.
The firm 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:
BDC Taxes & Accounting Services, LLC
Urb El Verde 2
Caguas, PR 00726
About JJE Inc.
JJE, Inc., a Manati, P.R.-based home health care services, filed a
Chapter 11 petition (Bankr. D.P.R. Case No. 19-02034) on April 12,
2019. In the petition signed by Jenny Olivo, president, Debtor
disclosed $295,244 in total assets and $1,953,718 in total
liabilities. Judge Mildred Caban Flores oversees the case.
Gratacos Law Firm, PSC is Debtor's legal counsel.
JONATHAN R. SORELLE: Hires Dennett & Winspear as Special Counsel
----------------------------------------------------------------
Jonathan R. Sorelle, M.D., PLLC, and its debtor-affiliates seeks
authority from the U.S. Bankruptcy Court for the District of Nevada
to hire Dennett & Winspear, LLP as their special counsel.
On Jan. 4, 2018, creditor and adversary plaintiff Kirk Schoeb
commenced a civil action in the Eighth Judicial District Court,
Clark County styled Schoeb v. Sorelle et al., Case No.
A-18-767277-C. On March 16, 2020, Schoeb filed adversary case
number 20-01039-MKN in the Bankruptcy Court against Debtors MIHI
and Sorelle.
Dennett & Winspear will assist in defending the Schoeb Adversary
Case, concentrating primarily on the medical malpractice
allegations in that adversary proceeding.
The firm will be compensated at these rates:
Partners $325
Associates $275
Paralegals $150
Dennett & Winspear neither holds nor represents any interest
materially adverse to any of the Debtors' estates in connection
with any matter on which it would be employed and that it is a
"disinterested person" within the meaning of section 101(14) of the
Bankruptcy Code, as referred to in section 11 U.S.C. Sec. 327(a),
according to court filings.
The firm can be reached through:
Gina Winspear, Esq.
Dennett & Winspear, LLP
3301 N Buffalo Dr # 195
Las Vegas, NV 89129
Phone: +1 702-839-1100
About Jonathan R. Sorelle M.D.
Jonathan R. Sorelle, M.D., PLLC, The Minimally Invasive Hand
Institute, LLC and Jonathan R. Sorelle, filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev.
Case Nos. 19-17870, 19-17871 and 19-17872, respectively) on Dec.
12, 2019. The Debtors each listed less than $1 million in both
assets and liabilities. The Debtors tapped Brownstein Hyatt Farber
Schreck, LLP as their legal counsel, and Inouye CPA LLC as their
accountant.
K.G. IM LLC: 7 Il Mulino Restaurants Seek Chapter 11
----------------------------------------------------
Ben Coley of FSR Magazine reports that K.G. IM LLC, parent of
well-known Italian concept Il Mulino, filed bankruptcy for several
of its restaurants July 30 as it battles one of its lenders.
The 16-unit company filed on behalf of seven locations across
Miami, Puerto Rico, Las Vegas, Long Island, and Atlantic City. The
locations not included in the filing are five New York City
stores—the flagship in Greenwich Village and four locations in
Manhattan—and two in Florida, one in Tennessee, and another in
the Poconos.
In the filing, co-owner Gerald Katzoff said that when COVID hit the
U.S., Il Mulino locations across the country shut down, beginning
with the stay-at-home order in New York. On May 7, the company
received roughly $2.3 million from the Paycheck Protection Program.
The restaurant intends to use the loan to fund operations during
bankruptcy. As of now, six of the seven bankrupt locations are
closed, and Long Island and Miami are operating in a limited
capacity.
Katzoff said that thanks to the PPP funds, he believed the
restaurant was on its way to stabilizing operations, protecting the
Il Mulino brand, and managing through COVID. He also felt it would
allow the brand to find a path forward with satisfying $36.3
million owed to lender Benefit Street Partners. But Katzoff added
that after the restaurant secured the PPP funding, "it became clear
that BSP had other plans for the restaurants."
The co-owner claimed that almost immediately after Il Mulino
received the PPP funds, BSP began to implement plans to take over
the company, including "putting in place a path for BSP to wipe out
all stakeholders in a debt to equity conversion play" without
giving the brand an opportunity to "stabilize operations and run a
fair and transparent process toward finding an exit out of the
COVID-19 lockdown."
"Simply put, it was clear that BSP viewed the COVID-19 impact as a
chance to unfairly leverage the Debtors and seize control of the
restaurants in a manner that is not consistent with the rights
afforded the parties under the Term Loan Agreement or applicable
law," Katzoff said in the filing.
As an example, Katzoff pointed to June 2—before the maturity of
the Term Loan Agreement—when BSP alleged certain events of
default and said it had voting control over the restaurant. In
response, Il Mulino "made it crystal clear" that BSP did not have
that power. However, BSP did not relent, and negotiations failed.
So the restaurant filed bankruptcy to "curtail those efforts and to
further explore various restructuring alternatives."
"The Il Mulino restaurants that are the subject of these chapter 11
cases are part of an iconic brand with significant growth
potential," Katzoff said. "BSP, however, has attempted to exploit
the unavoidable consequences of the Covid-19 pandemic and its
impact on restaurants like Il Mulino in an effort to take control
of the Debtors and their assets at a point in time when the
Debtors' businesses have been stressed to an unprecedented extent.
That, of course, is grossly unfair."
Katzoff said the company intends to resume operations at closed
locations as soon as possible and return to profitability. The
restaurant will use the bankruptcy proceedings "to restructure its
debt, seek out new financing opportunities, explore potential
transactions, and liquidate claims."
Il Mulino was established in 1981 and serves authentic Abruzzo
regional cuisine. The restaurant has gained fame with celebrities
over the years, including Leonardo DiCaprio, George Clooney, Bill
Murray, President Obama, and Drake.
About IL Mulino
Il Mulino owns and operates Italian restaurants throughout the
United States, including locations at 86 W. Third Street, New York,
New York and 37 E. 60th Street, New York New York.
K.G. IM, LLC, based in New York, NY, and its affiliates, including
IL Mulino USA, LLC, sought Chapter 11 protection (Bankr. S.D.N.Y.
Lead Case No. 20-11723) on July 29, 2020. The Hon. Martin Glenn
presides over the case.
In the petition signed by Gerald Katzoff, manager, the Debtor was
estimated to have $50 million to $100 in assets and $10 million to
$50 million in liabilities.
ALSTON & BIRD LLP, serves as bankruptcy counsel to the Debtors.
TRAXI LLC, and DAVIS & GILBERT LLP, serve as special counsel.
KING MOUNTAIN: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: King Mountain Tobacco Company, Inc.
2000 Fort Simcoe Road
White Swan, WA 98952
Business Description: King Mountain Tobacco Company, Inc. --
https://www.kingmountaintobacco.com --
is a Native American owned premium tobacco
manufacturer. Its products are 100%
manufactured in the United States.
Chapter 11 Petition Date: September 25, 2020
Court: United States Bankruptcy Court
Western District of Washington
Case No.: 20-01808
Judge: Hon. Whitman L. Holt
Debtor's Counsel: James L. Day, Esq.
BUSH KORNFELD LLP
601 Union St., Suite 5000
Seattle, WA 98101-2373
Tel: (206) 292-2110
E-mail: jday@bskd.com
Total Assets: $28,586,378
Total Liabilities: $92,425,329
The petition was signed by Truman J. Thompson, vice president and
chief executive officer.
A copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/SVOUZ7A/King_Mountain_Tobacco_Company__waebke-20-01808__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. BIA/NIIMS Lease Expense $5,571
13922 Denver West Pkwy
Lakewood, CO
80401
Lance
Fax: 509-877-3478
509-877-315
2. Cascade Valley Lube Automotive $78
2506 Main Street Services
Union Gap, WA 98903
Tel: 509-453-4343
Email: Uniongap.cascadevalleylube@hotmail.com
3. Cintas Corp. Professional $239
PO Box 650838 Services
Dallas, TX
75265-0838
Email: Cintas_services@cintas.com
4. Department of the Federal Excise $75,467,193
Treasury Taxes - Alcohol
Tobacco Tax & and Tobacco Tax
Trade Bureau and Trade Bureau
550 Main Street,
Suite 8002
Cincinnati, OH
45202-5215
Julie Ohradzansky
Tel: (513) 684-2373
Email: julie.ohradzansky@ttb.gov
5. Grease Heads Lube Automotive $189
and Oil Services
310 South Elm Street
Toppenish, WA 98948
Tel: 509-865-7001
Email: Greaseheadsllc@outlook.com
6. Guardian Security Monitoring Fees $21,225
1743 First Avenue South
Seattle, WA 98134
Josh Anderson
Tel: 509-453-4204
Email: janderson@securitysecurity.com
7. H.B. Fuller Raw Materials $5,972
PO Box 842401
Boston, MA
02284-2401
Ana Pinto
Fax: 651-355-9135
651-236-5948
8. Heritage Bank SBA Paycheck $814,447
PO Box 1578 Protection
Olympia, WA 98507 Program Loan
Terry Osman
Tel: 509-834-2704
Email: Terry.Osman@HeritageBankNW.com
9. Internal Revenue Federal Income $483,527
Service Taxes, Federal
P.O. Box 9941, Stop 6552 Unemployment
Ogden, UT 84409-0941 Taxes, FICA and
Tel: (800) 829-0115 Federal Withholdings
and Civil Penalties
10. ITC Services Alfalfa $6,609
4172 N. Frontage Supplies
Road E.
Moses Lake, WA 98837
Tel: 509-770-5039
11. NC Filter Corporation Raw Materials $99,818
Attn: Bobby Johnson -Filters
P.O. Box 498
Black Creek, NC 27813
Tel: 252-237-8180
Email: bjohnson@tobaccorag.com
12. Oak Harbor Freight Shipping $4,533
Lines, Inc.
PO Box 1469
Auburn, WA
98071-1469
Tel: (800) 858-8815
Email: AR@oakh.com
13. Office Solutions Office Supplies $100
Northwest Inc.
PO Box 125
Yakima, WA 98907
Tel: 509-453-7181
Email: alexm@whobest.com
14. Rehn & Associates Professional $25
COBRA Services
PO Box 5433
Spokane, WA 99205
Customer Service
Tel: (509) 534-0600
Email: rehn@rehnonline.com
15. State of Indiana Settlement $3,506,121
Office of the Agreement
Attorney General
302 W. Washington St.,
5th Fl.
Indianapolis, IN 46204
Tel: (317) 232-7979
Fax: (317) 232-6201
16. State of South Settlement $2,520,567
Carolina Agreement
Office of the Attorney General
P.O. Box 11549
Columbia, SC
29211-1549
Johnathan B. Williams
Tel: (803) 734-3970
Fax: (803) 734-3677
17. U.S. Dep't of Interim Payment $5,614,567
Agriculture Plan Agreement
2323 E. Bannister Rd. re Judgment in U.S.
Kansas City, MO 64131 District Court,
Tel: (202) 720-2791 E.D. Wash.
18. U.S. Food and Drug Repayment $2,944,907
Administration Agreement re
P.O. Box 979107 Tobacco User
Saint Louis, MO Fees
63197-9000
Tel: (877) 287-1373
Email: ctpexecsec@fda.hhs.gov
19. Yakama Nation Tax Stamps $67,500
PO Box 151
Toppenish, WA 98948
Lydia Bitsol
Tel: 509-865-5121
Email: lydia_bitsoi@yakama.com
20. Yakama Nation Lease Expense $176,659
Land Enterprise
282 Buster Road
Toppenish, WA 98948
Tel: (509) 865-5121
Email: Kristin@ynle.com
LAKELAND TOURS: Moody's Assigns Caa2 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service assigned the following ratings to
Lakeland Tours, LLC: Caa2 Corporate Family Rating, Caa2-PD
Probability of Default Rating, B1 instrument rating to the new
Priority Exit Facility, B2 instrument rating to the new Second Out
Take-Back Term Loan and Caa2 instrument rating to the new Third Out
Take-Back Term Loan. The credit facilities represent the exit
facilities for WorldStrides following its expected emergence from
Chapter 11. The company filed for Chapter 11 on July 20, 2020 as a
result of the fallout from the COVID-19 pandemic that severely
curtailed global travel, which caused revenue to drop
significantly. The outlook is stable.
WorldStrides expects to emerge from bankruptcy on or around
September 30, 2020. The company filed a pre-packaged plan and is
emerging with $204 million less secured debt and $130 million less
total debt from its pre-petition capital structure. The exit
facilities include: 1) up to $110 million Priority Exit Facility;
2) $150 million (excluding $3 million in interest accrued while in
bankruptcy) Second Out Take-Back Term Loans and 3) $200 million
Third Out Take-Back Term Loans. The capital structure upon
emergence will also include $200 million of Holdco Notes (not
rated) and $108 million of common equity. The exit credit
facilities are all first lien facilities, although the Second Out
Take-Back Term Loans and Third Out Take-Back Term Loans are subject
to carve outs for the Priority Exit Facility and Second Out
Take-Back Term Loans (in the case of the Third Out Take-Back Term
Loans). The exit facilities tranches also differ according to
pay-out priority.
Assignments:
Issuer: Lakeland Tours, LLC
Corporate Family Rating, Assigned Caa2
Probability of Default Rating, Assigned Caa2-PD
Senior Secured Priority Exit Facility, Assigned B1 (LGD1)
Senior Secured Second Out Take-Back Term Loans, Assigned B2 (LGD2)
Senior Secured Third Out Take-Back Term Loans, Assigned Caa2
(LGD4)
Outlook Actions:
Issuer: Lakeland Tours, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
The Caa2 Corporate Family Rating reflects WorldStrides' highly
leveraged capital structure and its expectation that Debt/EBITDA
will continue to remain extremely high as the company continues to
navigate operating challenges stemming from COVID-19 travel
disruptions. In addition, free cash flow to debt will remain weak
over the next 12-24 months as a result of the incremental burden
from higher debt balances from the payment-in-kind ("PIK") portion
of the exit facilities and high interest expense. Revenue will also
remain pressured over the next 12-18 months since Moody's does not
expect international travel to return to pre-COVID levels within
that time period. Moody's expects demand for educational travel
programs to remain significantly below pre-COVID levels for the
spring travel period next year when historically most of
WorldStrides' trips happen. Its ratings are subject to review of
final documentation governing the facilities.
WorldStrides' highly levered financial profile is mitigated by its
strong business profile -- the company is one of the leading
providers of full service domestic and international travel and
education services with a well-known brand presence. WorldStrides'
teacher advocate network provides the company a way to maintain
brand presence in schools and thus support retention for its
programs. The company also has a well-diversified customer base
with broad geographical footprint and programs that span the K-12,
undergraduate and graduate classes, and a track record of having
successfully integrated acquired businesses. On the cost side, the
company's market position provides the ability to negotiate
favorable rates with numerous airlines, coach lines and hotels,
which could help extract certain cost savings to support margins.
WorldStrides also collects deposits on travel itineraries well in
advance of service provisioning, which provides some visibility
into forward free cash flow generation, in more typical times.
Social and governance risks are key drivers of its ratings
assignment. The rapid spread of the coronavirus outbreak and the
weak global economic outlook have created an unprecedented credit
shock across a range of sectors and regions including sectors that
depend on travel. Moody's regards the coronavirus outbreak as a
social risk under its ESG framework, given the substantial
implications for public health and safety. WorldStrides remains
susceptible to deterioration in credit quality triggered by the
coronavirus outbreak given its exposure to the travel sector, which
leaves it vulnerable to shifts in market demand and sentiment in
these unprecedented operating conditions. Governance is also a key
consideration given World Strides' private equity ownership. The
company is owned by Eurazeo and minority investor Primavera Capital
Group. Although not currently permitted under the credit agreement,
the company could, in the future, adopt aggressive financial
policies when conditions normalize, which includes shareholder
distributions and dividends.
The ratings for the individual debt instruments incorporate
WorldStrides' overall probability of default, reflected in the
Caa2-PD rating, and the loss given default assessments for the
individual instruments. The Priority Exit Facility that has a tenor
of three years is rated B1, four notches above the Caa2 CFR, and
has a loss given default assessment of LGD1. This tranche benefits
from the 1st lien collateral coverage and ranks highest in the
capital structure in terms of payment priority, which supports the
B1 instrument rating. The $150 million Second Out Take-Back Term
Loan is rated B2 with a loss given default assessment of LGD2. The
B2 rating reflects the second ranking in payment priority and sits
junior to the Priority Exit Facility in terms of payment ranking.
The $200 million Third Out Take-Back Term Loan is rated Caa2, which
is the same as the CFR. This facility has a loss given default
assessment of LGD4. The Caa2 rating reflects the relative junior
ranking of the facility as compared to the Priority Exit Facility
and the Second Out Take-Back Term Loan, as conveyed by its third
out payment priority as well as carve outs from the collateral
supporting this facility.
Liquidity is tight through this year and for the first half of
2021. The capital structure upon emergence does not have a revolver
and liquidity is constrained to cash on the balance sheet only.
Free cash flow is negative for FY 2021 ending June and ending cash
balance is projected to be $35 million. Under the exit facilities,
the company will be subject to a minimum liquidity covenant of $15
million.
There is expected to be a revolver basket that will be pari passu
debt with the exit facilities and which can be reduced on a dollar
for dollar basis by a $10 million LC basket until the Priority Exit
Facility is paid down. Proposed terms also include the ability to
do permitted acquisitions, limited to a $20 million size and
subject to pro forma minimum liquidity of $25 million, a maximum
total net leverage threshold and permitted only if the Priority
Exit Facility has been repaid. There is a risk that guarantees can
be released if guarantor subsidiaries cease to be wholly owned.
The stable outlook reflects the expectation that revenue for FY
2021 will be higher on a year-over-year basis with travel
recovering slightly in the spring 2021 period. Moody's expects that
travel troughed in spring 2020 globally and will start to recover,
albeit very slowly, starting in the latter half of 2020 and into
2021. Over the next 12-24 months leverage will remain elevated as
the total debt balance increases due to the PIK nature of the
facilities. FCF to debt is negative in for FY 2021 but improves to
approximately 4.8% by the end of FY 2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if default risk rises as prompted
by a potential distressed exchange of debt or a deterioration in
the company's liquidity from a cash burn rate in excess of Moody's
expectations.
The ratings could be upgraded if the sector outlook and economic
conditions improves, especially if the outlook for domestic and
international travel shows sustained improvement. Ratings could
also be upgraded if earnings and free cash flow shows growth,
leverage falls and liquidity provisions remain adequate.
Headquartered in Charlottesville, Virginia, Lakeland Tours is an
accredited educational institution that provides full service
educational travel programs to K-12, undergraduate and post
graduate students, both domestically and internationally. Lakeland
Tours generated revenues of approximately $359 million over the
twelve months ended June 30, 2020. The company is owned by Eurazeo
and minority investor Primavera Capital Group.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
LAYER LOGIC: Case Summary & 4 Unsecured Creditors
-------------------------------------------------
Debtor: Layer Logic, Inc.
11 Garfield Place
Cincinnati, OH 45202
Chapter 11 Petition Date: September 25, 2020
Court: United States Bankruptcy Court
District of Delaware
Case No.: 20-12408
Judge: Hon. John T. Dorsey
Debtor's Counsel: Julia Klein, Esq.
KLEIN LLC
919 N. Market Street Suite 600
Wilmington, DE 19801
Tel: (302) 438-0456
E-mail: klein@kleinllc.com
Total Assets: $3,008,209
Total Liabilities: $4,468,103
The petition was signed by Scott Vance, president.
A copy of the petition containing, among other items, a list of the
Debtor's four unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/75K3RPY/Layer_Logic_Inc__debke-20-12408__0001.0.pdf?mcid=tGE4TAMA
LEHMAN BROTHERS: Bankr. Cannot Claw Back Swaps Liquidation Payment
------------------------------------------------------------------
Daniel Gill, writing for Bloomberg Law, reports that one of the
Lehman Bros. bankruptcy estates can't claw back payments made in
swap agreement liquidations triggered by the investment bank's 2008
bankruptcy, the Second Circuit ruled.
Parties generally can't form contracts in which filing bankruptcy
is considered an event of default. But swap agreements are an
exception to that rule, the U.S. Court of Appeals for the Second
Circuit said Aug. 11, 2020.
Lehman affiliate Lehman Brothers Special Financing Inc. (LBSF)
marketed and sold notes through special purpose vehicles, called
"issuers." Lehman then used the proceeds to purchase valuable
securities that would serve as collateral for the notes, the court
said.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more than
150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers Holdings filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the largest
in U.S. history. Several other affiliates followed thereafter.
Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC
sought for bankruptcy protection in December 2009.
The Debtors' bankruptcy cases were assigned to Judge James M. Peck.
Judge Shelley Chapman took over the case after Judge Peck retired
from the bench to join Morrison & Foerster.
A team of Weil, Gotshal & Manges, LLP, lawyers led by the late
Harvey R. Miller, Esq., serve as counsel to Lehman. Epiq Bankruptcy
Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, served
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., served as the
Committee's investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens was appointed as trustee for
the SIPA liquidation of the business of LBI. He is represented by
Hughes Hubbard & Reed LLP.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
Lehman emerged from bankruptcy protection on March 6, 2012, more
than three years after it filed the largest bankruptcy in U.S.
history. The Chapter 11 plan for the Lehman companies other than
the broker was confirmed in December 2011.
* * *
In October 2016, the team winding down LBHI paid $3.8 billion to
creditors, the 11th distribution since Lehman's collapse in 2008.
This brought the total payout to more than $113.6 billion.
Bondholders were projected to receive about 21 cents on the dollar
when Lehman's bankruptcy plan went into effect in early 2012. The
11th distribution raised the bondholders' recovery to more than 40
cents on the dollar and recoveries for general unsecured creditors
of Lehman's commodities to 79 cents on the dollar. Lehman's
aggregate 12th distribution to unsecured creditors pursuant to its
confirmed Chapter 11 plan will total approximately $3.0 billion.
LIVINGWAY CHRISTIAN: Case Summary & 12 Unsecured Creditors
----------------------------------------------------------
Debtor: Livingway Christian Fellowship Church International, Inc.
6415 Pearl Street
Jacksonville, FL 32208
Business Description: Livingway Christian Fellowship Church
International is a tax-exempt religious
organization. It is the owner of fee
simple title to a church located at 6415 N.
Pearl St., Jacksonville, Florida having a
current value of $680,000.
Chapter 11 Petition Date: September 25, 2020
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 20-02816
Debtor's Counsel: William B. McDaniel, Esq.
LANSING ROY, PA
1710 Shadowood Ln Ste 210
Jacksonville, FL 32207-2184
Tel: 904-391-0030
Email: information@lansingroy.com
Total Assets: $848,853
Total Liabilities: $1,035,821
The petition was signed by Dr. Anthony Speight, president.
A copy of the petition containing, among other items, a list of the
Debtor's 12 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/QZHYAXQ/Livingway_Christian_Fellowship__flmbke-20-02816__0001.0.pdf?mcid=tGE4TAMA
MAD RIVER: Seeks to Hire Paul A. Beck as Bankruptcy Counsel
-----------------------------------------------------------
Mad River Estates, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of California to hire the Law
Offices of Paul A. Beck, A Professional Corporation, as its
bankruptcy counsel.
The firm will provide the following services in connection with
Debtor's Chapter 11 case:
a. advise Debtor regarding its rights, responsibilities,
duties, powers and roles;
b. advise Debtor with respect to its bankruptcy estate and the
rights, claims and interests of creditors and other parties, and
consult with the official committee of creditors holding unsecured
claims;
c. file legal applications, pleadings and documents;
d. appear at all hearings and in all proceedings;
e. represent Debtor in the context of its Chapter 11 case and,
potentially, in any adversary proceedings or contested matters;
f. advise Debtor regarding any potential sale of its assets
and in negotiations concerning a plan of reorganization;
g. assist in investigating the acts, conduct, assets,
liabilities, and financial condition of Debtor;
h. advise Debtor regarding its rights with respect to its
creditors, any creditors committee, and third parties; and
i. perform other necessary legal services for Debtor in
connection with its bankruptcy case.
The firm's professionals who will mainly provide the services and
their hourly rates are:
Paul A. Beck (Attorney) $450
Raychael Urquidi (Paralegal) $95
Debtor paid the firm a post-petition retainer of $65,000.
Paul Beck, Esq. disclosed in court filings that he and his firm are
"disinterested persons" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Paul A. Beck, Esq.
Law Offices of Paul A. Beck
13701 Riverside Drive, Suite 202
Sherman Oaks, CA 91423
Telephone: (818) 501-1141
Facsimile: (818) 501-1241
Email: pab@pablaw.org
About Mad River Estates LLC
Mad River Estates, LLC is a Korbel, Calif.-based company engaged in
activities related to real estate.
Mad River Estates sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-10470) on Aug. 14,
2020. Dean Bornstein, the company's manager, signed the petition.
At the time of the filing, Debtor had estimated assets of between
$1 million to $10 million and liabilities of the same range.
Paul A. Beck, APC is Debtor's legal counsel.
MAGNOLIA LANE: Seeks to Hire Joel M. Aresty as Legal Counsel
------------------------------------------------------------
Magnolia Lane Condominium Association seeks permission from the
U.S. Bankruptcy Court for the Southern District of Florida to hire
the law firm of Joel M. Aresty, P.A., as co-counsel.
The professional services Joel Aresty will render are:
(a) give advice to the debtor with respect to its powers and
duties as a debtor in possession and the continued management of
its business operations;
(b) advise the debtor with respect to its responsibilities in
complying with the U.S. trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
(c) prepare motions, pleadings, orders, applications,
adversary proceedings, and other legal documents necessary in the
administration of the case;
(d) protect the interest of the debtor in all matters pending
before the court;
(e) represent the debtor in negotiation with its creditors in
the preparation of a plan.
The firm will be paid an hourly fee of $440 and will be reimbursed
for work-related costs. The retainer fee is $5,000.
Joel Aresty, Esq., disclosed in court filings that he is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The attorney can be reached at:
Joel M. Aresty, Esq.
Joel M. Aresty, P.A.
309 1st Ave S
Tierra Verde FL 33715
Telephone: (305) 904-1903
Facsimile: (800) 899-1870
Email: Aresty@Mac.com
About Magnolia Lane Condominium Association
Based in Miami, Fla., Magnolia Lane Condominium Association, Inc.
filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 19-24437) on
Oct. 28, 2019. In the petition signed by Mercedes Rodriguez, vice
president, the Debtor was estimated to have $100,000 to $500,000 in
assets and $1 million to $10 million in liabilities. Judge Laurel
M. Isicoff oversees the case.
The Debtor has tapped John Paul Arcia, P.A., as its bankruptcy
counsel; Florida Property Management Solutions, Inc., as its
property manager; and Preferred Accounting Services and Kapila
Mukamal, LLP as its accountants. Joel M. Aresty P.A. serves as
Debtor's co-counsel.
MARRONE BIO: Incurs $2.9 Million Net Loss in Second Quarter
-----------------------------------------------------------
Marrone Bio Innovations, Inc., filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $2.87 million on $12.18 million of total revenues for
the three months ended June 30, 2020, compared to a net loss of
$6.75 million on $7 million of total revenues for the three months
ended June 30, 2019.
For the six months ended June 30, 2020, the Company reported a net
loss of $9.89 million on $21.83 million of total revenues compared
to a net loss of $10.67 million on $15.71 million of total revenues
for the same period during the prior year.
As of June 30, 2020, the Company had $78.40 million in total
assets, $52.30 million in total liabilities, and $26.10 million in
total stockholders' equity.
The Company has a limited number of commercialized products and an
operating history that includes periods of negative use of
operating cash flows, which indicate substantial doubt exists
related to the Company's ability to continue as a going concern for
the next 12 months from the date of issuance of these condensed
consolidated financial statements. As of June 30, 2020, the
Company had an accumulated deficit of $330,543,000, has incurred
significant losses since inception, and expects to continue to
incur losses for the foreseeable future. The Company funds
operations primarily with the proceeds from the sale of its
products, promissory notes and term loans, net proceeds from the
private placements of convertible notes, as well as with the
proceeds from equity instruments. The Company will need to
generate significant revenue growth to achieve and maintain
profitability. As of June 30, 2020, the Company had a working
capital surplus of $3,497,000, including cash and cash equivalents
of $10,451,000. In addition, as of June 30, 2020, the Company had
debt and debt due to related parties of $20,365,000 and $7,300,000,
respectively, for which the underlying debt agreements contain
various financial and non-financial covenants, as well as certain
material adverse change clauses. As of June 30, 2020, the Company
had a total of $1,560,000 of restricted cash relating to these debt
agreements.
The Company believes that its existing cash and cash equivalents of
$5,975,000 at Aug. 7, 2020, together with expected revenues,
expected future debt or equity financings and cost management will
be sufficient to fund operations as currently planned through one
year from Aug. 10, 2020 (the date of the issuance of these
condensed consolidated financial statements). The Company
anticipates securing additional sources of cash through equity
and/or debt financings, collaborative or other funding arrangements
with partners, or through other sources of financing, consistent
with historic results. However, the Company cannot predict, with
certainty, the outcome of its actions to grow revenues, to manage
or reduce costs or to secure additional financing from outside
sources on terms acceptable to the Company or at all. Further, the
Company said it may continue to require additional sources of cash
for general corporate purposes, which may include operating
expenses, working capital to improve and promote its commercially
available products, advance product candidates, expand
international presence and commercialization, general capital
expenditures and satisfaction of debt obligations and any potential
negative economic impacts from the current COVID-19 pandemic on the
Company's operations.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1441693/000149315220015114/form10-q.htm
About Marrone Bio Innovations
Based in Davis, California, Marrone Bio Innovations, Inc. --
http://www.marronebio.com-- discovers, develops and sells
innovative biological products for crop protection, plant health
and waterway systems treatment. MBI has screened over 18,000
microorganisms and 350 plant extracts, leveraging its in-depth
knowledge of plant and soil microbiomes enhanced by advanced
molecular technologies to rapidly develop seven effective and
environmentally responsible pest management products to help
customers operate more sustainably while uniquely improving plant
health and increasing crop yields. Supported by a robust portfolio
of over 400 issued and pending patents around its natural product
chemistry, MBI's currently available commercial products are
Regalia, Grandevo, Venerate, Majestene, Haven Stargus and
Amplitude, Zelto and Zequanox.
Marrone Bio reported a net loss of $37.17 million for the year
ended Dec. 31, 2019, compared to a net loss of $20.21 million for
the year ended Dec. 31, 2018. As of March 31, 2020, the Company
had $79.39 million in total assets, $54.53 million in total
liabilities, and $24.86 million in total stockholders' equity.
Marcum LLP, in San Francisco, CA, the Company's auditor since 2018,
issued a "going concern" qualification in its report dated March
16, 2020 citing that the Company has incurred significant losses
and needs to raise additional funds to meet its obligations and
sustain its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
MARRONE BIO: President and CFO James Boyd to Retire
---------------------------------------------------
James Boyd will retire from his positions as president and chief
financial officer of Marrone Bio Innovations, Inc.
A national search process for the new chief financial officer is
underway, and Mr. Boyd will continue as president and CFO during
the search process.
"Jim has been a key member of the senior management team and a
highly-regarded leader for the company over the last seven years,"
said chief executive officer Kevin Helash. "He has helped guide
the company through its successful transition as a market leader in
the agricultural biologicals space. On behalf of myself, the board
of directors and the entire team at Marrone Bio Innovations, we
want to thank Jim for his numerous contributions to the strength of
the company and wish him the very best in his retirement."
"The search for a new CFO is underway, and we are looking for an
exceptional individual to help lead the company during its next
phase of accelerated growth while ensuring we are brilliant at the
basics that drive operational and financial excellence," added
Helash. "We have a solid financial team in place and expect the
new CFO to be able to make a rapid transition and add immediate
value."
"I am proud to have helped build the company into a world-class
organization with an unmatched product portfolio in sustainable
biological products. Given our recent revenue growth and margin
expansion, I am confident the company is poised to deliver
meaningful shareholder value. I look forward to working with our
finance team as we make this transition and ensure the company’s
continuing success," said Boyd.
About Marrone Bio Innovations
Based in Davis, California, Marrone Bio Innovations, Inc. --
http://www.marronebio.com/-- discovers, develops and sells
innovative biological products for crop protection, plant health
and waterway systems treatment. MBI has screened over 18,000
microorganisms and 350 plant extracts, leveraging its in-depth
knowledge of plant and soil microbiomes enhanced by advanced
molecular technologies to rapidly develop seven effective and
environmentally responsible pest management products to help
customers operate more sustainably while uniquely improving plant
health and increasing crop yields. Supported by a robust portfolio
of over 400 issued and pending patents around its natural product
chemistry, MBI's currently available commercial products are
Regalia, Grandevo, Venerate, Majestene, Haven Stargus and
Amplitude, Zelto and Zequanox.
Marrone Bio reported a net loss of $37.17 million for the year
ended Dec. 31, 2019, compared to a net loss of $20.21 million for
the year ended Dec. 31, 2018. As of March 31, 2020, the Company
had $79.39 million in total assets, $54.53 million in total
liabilities, and $24.86 million in total stockholders' equity.
Marcum LLP, in San Francisco, CA, the Company's auditor since 2018,
issued a "going concern" qualification in its report dated March
16, 2020 citing that the Company has incurred significant losses
and needs to raise additional funds to meet its obligations and
sustain its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
MARRONE BIO: Will Hold Its Annual Meeting on Oct. 29
----------------------------------------------------
The Board of Directors of Marrone Bio Innovations, Inc., determined
to schedule the Company's 2020 Annual Meeting of Stockholders for
Thursday, Oct. 29, 2020. The time and location of the Annual
Meeting will be as set forth in the Company's proxy statement for
the Annual Meeting to be filed with the Securities and Exchange
Commission.
Pursuant to the Company's Fifth Amended and Restated Bylaws, if a
stockholder of the Company intends a proposal to be considered for
inclusion in the Company's proxy statement for the Annual Meeting,
stockholder proposals must be delivered to the principal executive
offices of the Company, at 1540 Drew Ave., Davis, California 95618,
Attention: Corporate Secretary, not later than Aug. 21, 2020.
Additionally, notice of any stockholder proposal (including a
proposal to nominate a candidate for director) that is not
submitted for inclusion in the proxy statement for the Annual
Meeting must be delivered to or mailed and received at the
principal executive offices of the Company not later than Sept. 14,
2020. Any stockholder proposal or director nomination must also
comply with the requirements of Delaware law, the rules and
regulations promulgated by the SEC and the Company's Bylaws, as
applicable. Any notice received after these deadlines will be
considered untimely and not properly brought before the Annual
Meeting.
About Marrone Bio Innovations
Based in Davis, California, Marrone Bio Innovations, Inc. --
http://www.marronebio.com-- discovers, develops and sells
innovative biological products for crop protection, plant health
and waterway systems treatment. MBI has screened over 18,000
microorganisms and 350 plant extracts, leveraging its in-depth
knowledge of plant and soil microbiomes enhanced by advanced
molecular technologies to rapidly develop seven effective and
environmentally responsible pest management products to help
customers operate more sustainably while uniquely improving plant
health and increasing crop yields. Supported by a robust portfolio
of over 400 issued and pending patents around its natural product
chemistry, MBI's currently available commercial products are
Regalia, Grandevo, Venerate, Majestene, Haven Stargus and
Amplitude, Zelto and Zequanox.
Marrone Bio reported a net loss of $37.17 million for the year
ended Dec. 31, 2019, compared to a net loss of $20.21 million for
the year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$78.40 million in total assets, $52.30 million in total
liabilities, and $26.10 million in total stockholders' equity.
Marcum LLP, in San Francisco, CA, the Company's auditor since 2018,
issued a "going concern" qualification in its report dated March
16, 2020 citing that the Company has incurred significant losses
and needs to raise additional funds to meet its obligations and
sustain its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
MEDCISION LLC: Court Judge Tosses Adversary Suit vs. Directors
--------------------------------------------------------------
Law360 reports that citing Delaware law that shields business
entity directors, a California bankruptcy judge on Friday tossed
Chapter 11 adversary suit claims against four outside directors of
a life sciences company sold to creditors in 2018 amid lingering
claims of mismanagement and insider self-dealing. U.S. Bankruptcy
Judge Hannah L. Blumenstiel rejected arguments from
Delaware-chartered MedCision LLC's court-appointed chief
restructuring officer, who said the federal court should ignore
"exculpatory" provisions in the company's operating agreement
protecting directors from damage claims for all but bad faith acts
that would breach their duties of loyalty.
About MedCision LLC
MedCision, LLC, formerly known as Biocision, LLC, develops
automation technologies for vital clinical product handling
processes.
MedCision initially filed a voluntary petition for relief pursuant
to Chapter 7 of the Bankruptcy Code on Dec. 20, 2017. By order
dated Feb. 16, 2018, the case was converted to one under Chapter 11
(Bankr. N.D. Cal. Case No. 17-31272).
Judge Hannah L. Blumenstiel oversees the case.
The Debtor tapped Sheppard, Mullin, Richter & Hampton LLP as
bankruptcy counsel; Bowles & Verna LLP, as special litigation
counsel; Three Twenty-One Capital Partners as its investment
banker; and Kyle Everett of Development Specialists, Inc., as chief
restructuring officer.
MODA INGLESIDE: Moody's Hikes CFR to Ba3, Outlook Stable
--------------------------------------------------------
Moody's Investors Service upgraded Moda Ingleside Energy Center,
LLC's, Corporate Family Rating (CFR) to Ba3 from B1, Probability of
Default Rating (PDR) to Ba3-PD from B1-PD, and senior secured
credit facilities' ratings to Ba3 from B1. The rating outlook
remains stable.
"Moda's has significantly expanded its terminal capacity, continues
to increase revenues, maintains high take-or-pay contract cover,
and has opportunities to export Permian crude from the Gulf Coast
from its Corpus Christi location," said Arvinder Saluja, Moody's
Vice President. "These have led to improvements in leverage and
EBITDA scale, and are reflected in its rating upgrade."
Upgrades:
Issuer: Moda Ingleside Energy Center, LLC
Probability of Default Rating, Upgraded to Ba3-PD from B1-PD
Corporate Family Rating, Upgraded to Ba3 from B1
Senior Secured Revolving Credit Facility, Upgraded to Ba3 (LGD3)
from B1 (LGD4)
Senior Secured Term Loan, Upgraded to Ba3 (LGD3) from B1 (LGD4)
Outlook Actions:
Issuer: Moda Ingleside Energy Center, LLC
Outlook, Remains Stable
RATINGS RATIONALE
Moda's Ba3 CFR reflects the company's attractive differentiated
position at the Port of Corpus Christi, advantaged loading
capabilities, improved connectivity to the Permian Basin and
seasoned management team. The CFR also reflects Moody's expectation
of continuing increase in EBITDA, sustained low leverage, and high
percentage of take-or-pay contracts with larger counterparties. The
company benefits from no direct commodity exposure and a
weighted-average contract life of about nine years. About 80% of
Moda's revenue will be supported by minimum volumes commitments
(MVC). However, Moda's CFR is constrained by its single site asset
concentration, reliance on demand for export of Permian crude from
US Gulf Coast, and limited commodity and customer diversification
as it mainly stores and provides throughput services for crude
oil.
Since 2018, Moda has undergone a large terminal capacity expansion
where Moda's crude storage capacity increased to 12.1 million
barrels from 2.1 million barrels, in addition to the development of
associated infrastructure assets. Moda can access the Permian
production via multiple pipeline systems. Permian is one of the
most prolific basins in North America, with low oil break-evens,
which should sustain volumes to Moda even at weaker oil prices,
especially given its largely take-or-pay contracts.
The three senior secured credit facilities are all rated Ba3, at
the CFR level, in accordance with Moody's Loss Given Default
Methodology. All these facilities have a pari passu first lien
secured claim to substantially all of the company's assets. Since
there are no other debts in the capital structure, the revolver and
the term loans A and B are rated the same as the CFR.
Moda's good liquidity position will be supported by strong
operating cash flows through at least 2021. Moda is expected to
spend within cash flow at least through 2021 for its capital
expenditure needs since the company's terminal expansion and
infrastructure construction growth projects have largely been
completed. At June 30, 2020, $15 million was drawn under its $45
million revolver, and its $180 million delayed draw term loan was
fully outstanding. The revolver facility and the delayed draw term
loan are subject to a debt service coverage ratio covenant of at
least 1.10x. In addition to a maximum first lien net leverage
covenant of 4.75x, Term loan B is also subject to a debt service
coverage ratio covenant of at least 1.10x and includes an excess
cash flow sweep mechanism. Moody's expects the company to be well
in compliance with these covenants at least through 2021.
The stable outlook reflects Moody's expectation that the company
will maintain its favorable take-or-pay position, generate enough
free cash flow to fund its capex, and take steps to preserve their
low leverage profile.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
While unlikely in the near term, a rating upgrade could be
considered if Moda achieves location and asset profile
diversification and increases its scale with EBITDA close to $400
million, while leverage remains below 3x. A longer track record of
maintaining a conservative financial policy despite private equity
ownership is also needed for an upgrade consideration. The ratings
could be downgraded if leverage increases above 3.5x, if EBITDA
falls below $200 million due to weaker than expected throughput
volumes or contract breaches, or if Retained Cash Flow to Debt
falls below 35% after 2020. A predominantly debt-financed or a
step-out acquisition that increases business risk profile could
also lead to a downgrade.
Moda Ingleside Energy Center, LLC, is a wholly owned subsidiary of
Moda Midstream, LLC, a company headquartered in Houston, Texas that
provides storage and export terminalling facility to third-parties.
The company is backed by EnCap Flatrock Midstream, a midstream
private equity firm.
The principal methodology used in these ratings was Midstream
Energy published in December 2018.
NASHEF LLC: Seeks to Hire Phillips Silver as Special Counsel
------------------------------------------------------------
Nashef LLC seeks approval from the U.S. Bankruptcy Court for the
District of Massachusetts to hire Phillips, Silver, Talman, Aframe
& Sinrich, P.C. as its special counsel.
The firm will render the following services:
a. assist and advise Debtor in the most efficient methods of
enforcing the lease between Debtor and its property's lessee, Munro
Associates, LLC; and
b. demand and commence litigation in the appropriate state
courts to enforce such lease or collect monetary damages for breach
of lease.
The firm received the sum of $10,000 as a retainer.
Phillips Silver and its attorneys are "disinterested" within the
meaning of Section 101(14) of the Bankruptcy Code, according to
court filings.
The firm can be reached through:
Scott Sinrich, Esq.
Phillips, Silver, Talman, Aframe & Sinrich, P.C.
146 Main St.
Worcester, MA 01608
Telephone: (508) 754-6852
About Nashef LLC
Nashef LLC, a privately held company in Fitchburg, Mass., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass.
Case No. 20-40199) on Feb. 6, 2020. In the petition signed by Eyad
Nashef, manager, the Debtor disclosed $1,559,000 in liabilities.
Debtor is represented by James P. Ehrhard, Esq. at Ehrhard &
Associates, P.C.
NEFFGEN FAMILY: Unsecureds to Recover 25% in Liquidating Plan
-------------------------------------------------------------
Neffgen Family Stores, LLC, filed with the U.S. Bankruptcy Court
for the District of South Carolina a Disclosure Statement and Plan
dated August 6, 2020.
Al Neffgen, the Debtor's sole principal, and Debtor's counsel
decided to change course in the chapter 11 reorganization directed
at a liquidating chapter 11, and decided to propose to creditors a
liquidating plan. Debtor and counsel decided to provide a plan in
which it would vacate each of the four currently occupied stores,
and move all inventory to one place in order to take still photos
and videos of the 1.3 million pieces of inventory for sale by a
broke or buyer.
The Debtor's counsel chose four different liquidators of inventory.
The intent was for counsel and Neffgen to select one of those
entities for the purpose of marketing for sale the inventory of the
debtor. The further objective is to sell all inventory, and to
offer cash payouts to all creditors with some compromising their
debt claims.
The Debtor offers 25% of each unsecured creditor's allowed claim in
cash on the effective date of the plan. As to the landlords with
leased property claims, some including administrative claims, the
Debtor intends to propose compromised amounts of those claims that
it will pay in cash on the effective date of the plan.
A full-text copy of the disclosure statement dated August 6, 2020,
is available at https://tinyurl.com/yxf76uvn from PacerMonitor.com
at no charge.
The Debtor is represented by:
Robert H. Cooper, Esq.
The Cooper Law Firm
150 Milestone Way, Ste B
Greenville, SC 29615
Tel: 864-271-9911
Email: thecooperlawfirm@thecooperlawfirm.com
About Neffgen Family Stores
Neffgen Family Stores, LLC, is a seller of home goods with various
locations in upstate South Carolina.
Neffgen Family Stores sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.S.C. Case No. 20-00571) on Feb. 1, 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 Helen E. Burris oversees the case.
The Debtor is represented by The Cooper Law Firm.
NOBLE NEC HOLDINGS: Case Summary & 50 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Noble NEC Holdings Limited
Second Floor, 10 Brook Street
London, United Kingdom W1S 1BG
Business Description: Noble-- www.noblecorp.com -- is an
offshore drilling contractor for the
oil and gas industry. The Company
provides contract drilling services to
the international oil and gas industry
with its global fleet of mobile
offshore drilling units. Noble focuses
on a balanced, high-specification fleet
of floating and jackup rigs and the
deployment of its drilling rigs in oil
and gas basins around the world.
Chapter 11 Petition Date: September 24, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Six affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Noble NEC Holdings Limited 20-34644
Noble International Services LLC 20-34645
Noble John Sandifer LLC 20-34646
Noble Johnnie Hoffman LLC 20-34647
Noble SA LLC 20-34648
NDSI Holding Limited 20-34649
Debtors'
Chapter 11
Counsel: George N. Panagakis, Esq.
Anthony R. Joseph, Esq.
SKADDEN, ARPS, SLATE, MEAGHER
& FLOM LLP
155 N. Wacker Dr.
Chicago, Illinois 60606-1720
Tel: (312) 407-0700
Fax: (312) 407-0411
Email: george.panagakis@skadden.com
- and -
Mark A. McDermott, Esq.
Jason N. Kestecher, Esq.
Nicholas S. Hagen, Esq.
One Manhattan West
New York, New York 10001
Tel: (212) 735-3000
Fax: (212) 735-2000
Email: mark.mcdermott@skadden.com
jason.kestecher@skadden.com
Debtors'
Co-Counsel: John F. Higgins, Esq.
Eric M. English, Esq.
M. Shane Johnson, Esq.
Megan Young-John, Esq.
Emily D. Nasir, Esq.
PORTER HEDGES LLP
1000 Main St., 36th Floor
Houston, Texas 77002
Tel: (713) 226-6000
Fax: (713) 226-6248
Email: jhiggins@porterhedges.com
eenglish@porterhedges.com
sjohnson@porterhedges.com
myoung-john@porterhedges.com
enasir@porterhedges.com
Debtors'
Financial
Advisor: ALIXPARTNERS, LLP
Debtors'
Investment
Banker: EVERCORE GROUP L.L.C.
Debtors'
Claims &
Noticing
Agent and
Administrative
Advisor: EPIQ CORPORATE RESTRUCTURING, LLC
https://dm.epiq11.com/case/nbl/dockets
Estimated Assets
(on a consolidated basis): $1 billion to $10 billion
Estimated Liabilities
(on a consolidated basis): $1 billion to $10 billion
The petitions were signed by Richard B. Barker, authorized
signatory.
Copy of the petitions are available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/MEWXRZI/Noble_NEC_Holdings_Limited__txsbke-20-34644__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/MNMIQVA/Noble_International_Services_LLC__txsbke-20-34645__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/M2NHD2Q/Noble_John_Sandifer_LLC__txsbke-20-34646__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/MVZX74A/Noble_Johnnie_Hoffman_LLC__txsbke-20-34647__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/PXFLQVI/Noble_SA_LLC__txsbke-20-34648__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/PPF2J2A/NDSI_Holding_Limited__txsbke-20-34649__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 50 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. U.S. Bank Unsecured Debt $769,704,093
60 Livingston Ave. 7.875% Senior
St. Paul, MN 55107 Notes
Contact: Alejandro Hoyos
Email: alejandro.hoyos@usbank.com
2. JPMorgan Chase Bank, N.A. Unsecured Debt $549,995,940
712 Main Street Senior Revolving
5th Floor Facility
Houston, TX 77002
Contact: Gregory N Rostick
Email: gregory.n.rostick@chase.com
3. The Bank of New York Mellon Unsecured Debt $487,790,864
Trust Company, N.A. 5.250% Senior
601 Travis Street Notes
16th Floor
Houston, TX 77002
Contact: Lisa McCants
Email: lisa.mccants@bnymellon.com
4. Wilmington Trust, Unsecured Debt $459,162,987
National Association 7.950% Senior
1100 North Market Street Notes
Wilmington, DE 19801
Contact: Barry Somrock
Email: bsomrock@wilmingtontrust.com
5. Wilmington Trust, Unsecured Debt $407,441,506
National Association 7.750% Senior
1100 North Market Street Notes
Wilmington, DE 19801
Contact: Barry Somrock
Email: bsomrock@wilmingtontrust.com
6. The Bank of New York Mellon Unsecured Debt $402,770,127
Trust Company, N.A. 6.200% Senior
601 Travis Street Notes
16th Floor
Houston, TX 77002
Contact: Lisa McCants
Email: lisa.mccants@bnymellon.com
7. Wilmington Trust, Unsecured Debt $402,752,583
National Association 8.950% Senior
1100 North Market Street Notes
Wilmington, DE 19801
Contact: Barry Somrock
Email: bsomrock@wilmingtontrust.com
8. The Bank of New York Mellon Unsecured Debt $399,837,398
Trust Company, N.A. 6.050% Senior
601 Travis Street Notes
16th Floor
Houston, TX 77002
Contact: Lisa McCants
Email: lisa.mccants@bnymellon.com
9. The Bank of New York Mellon Unsecured Debt $81,435,197
Trust Company, N.A. 4.625% Senior
601 Travis Street Notes
16th Floor
Houston, TX 77002
Contact: Lisa McCants
Email: lisa.mccants@bnymellon.com
10. The Bank of New York Mellon Unsecured Debt $64,066,969
Trust Company, N.A. 4.900% Senior
601 Travis Street Notes
16th Floor
Houston, TX 77002
Contact: Lisa McCants
Email: lisa.mccants@bnymellon.com
11. The Bank of New York Mellon Unsecured Debt $21,505,749
Trust Company, N.A. 3.950% Senior
601 Travis Street Notes
16th Floor
Houston, TX 77002
Contact: Lisa McCants
Email: lisa.mccants@bnymellon.com
12. National Oilwell Varco Trade Debt $3,724,294
5100 North Sam Houston
Parkway West
Houston, TX 77086
Tel: 281-325-6533
Email: brian.wesneski@nov.com
13. Marks, Scott Deferred $2,851,188
Address on File Compensation
Tel: 832-520-5717
Email: scottmarks1113@gmail.com
14. Martin, Therald Deferred $2,159,174
Address on File Compensation
Tel: 281-202-8969
Email: therald.martin@yahoo.com
15. Madden, Thomas Deferred $857,405
Address on File Compensation
Tel: 713-410-4949
Email: maddenirl@aol.com
16. National Oilwell Varco LP Trade Debt $578,720
10353 Richmond Avenue
Houston, TX 77042
Tel: 713-346-7233
Email: noblesales@nov.com
17. National Oilwell Varco Trade Debt $365,166
Norway AS
Lagerveien 8
8181
Stavanger 4034
Norway
Tel: 47-5181-8181
Email: accountsreceivableaftermarket.nov.com
18. Crane Worldwide Logistics Trade Debt $359,480
(Thailand)
589/110 20th Floor, Central City BA
Bangkok 10260
Thailand
Tel: 2745-6088-109
Email: supalerk.phitaksuteephong@craneww.com
19. Trasfor SA Trade Debt $337,665
Strada Cantonale 11
Molinazzo Di Monteggio 6998
Switzerland
Tel: 41-58-58- 84400
Email: pl-gbs_switzerland_ar@abb.com
20. Wolford, Bernie Deferred $261,850
Address on File Compensation
Tel: 832-600-7915
Email: berniewolford@gmail.com
21. Humes, Larry Deferred $246,587
Address on File Compensation
Email: txjhawkscomm@att.net
22. NOV Rig Solutions Pte Ltd. Trade Debt $239,534
29 Tuas Bay Drive
Singapore 637429
Singapore
Tel: 6594-1025
Email: adlin.abdulwahid@nov.com
23. Thornton, Bodley Deferred $217,298
Address on File Compensation
Tel: 713-823-4228
Email: bpthorntonsr@gmail.com
24. Bridon American Corporation Trade Debt $216,969
280 New Commerce Blvd
Wilkes-Barre, PA 18706
Tel: 570-822-3349-215
Email: hfisher@bridonamerican.com
25. Shell Oil Products US Trade Debt $192,712
PO Box 4749
Houston, TX 77210
Tel: 632-483-5942
Email: leanel.camporedondo@shell.com
26. Mings Products & Services Ltd. Trade Debt $184,662
6 Urquhart Street
Georgetown, Guyana
Tel: 592-225-3553-222
Email: ford.audrey@mps.gy
27. M & M International Inc. Trade Debt $172,285
1249 SE Evangeline Thruway
Broussard, LA 70518
Tel: 337-364-4145
Email: mmisales@mmvalve.com
28. Ameriforge Group Inc. Trade Debt $171,203
945 Bunker Hill Rd, Suite 500
Houston, TX 77024
Tel: 713-293-1245
Email: ar@afglobalcorp.com
29. Huisman North America Trade Debt $163,458
Services, LLC
2502 Wehring Road
Rosenberg, TX 77471
Tel: 832-490-1019
Email: accounting@huisman-na.com
30. Technip Umbilicals Inc. Trade Debt $146,752
16661 Jacintoport
Houston, TX 77015
Tel: 281-249-2711
Email: pbajo@technip.com
31. Speedcast Communications, Inc. Trade Debt $144,986
4400 S Sam Houston Pkwy E
Houston, TX 77048
Tel: 832-668-2459
Email: collections.america@speedcast.com
32. Hyundai Global Service Trade Debt $144,599
Americas Co.
7206 Harms Road
Houston, TX 77041
Tel: 832-850-7659
Email: mhkim@hyundai-gs.com
33. Ocean Oilfield Trade Debt $132,961
Drilling Services
No. 8, Persiaran Melor Awana
Kijal
Kemaman 24100
Malaysia
Tel: 9864-0461
Email: accmy@oceanoilfield.com
34. Gulf Agency Co (Oman) LLC Trade Debt $130,907
PC 112, Ruwi, Sultanate of Oman
Ruwi 112
Oman
Tel: 244-77800-810
Email: jayaram.sethuraman@gac.com
35. American Bureau of Shipping Trade Debt $121,909
PO Box 24860
Dubai
United Arab Emirates
Tel: 4330-6000
Email: asoliman@eagle.org
36. Contitech Oil & Marine Trade Debt $120,786
Corporation
11535 Brittmoore Park Drive
Houston, TX 77041
Tel: 832-327-0141
Email: jocelyn.mangunsong@continental.com
37. GE Energy Power Trade Debt $109,507
Conversion USA Inc.
100 East Kensinger Drive, Ste 500
Cranberry Township, PA 16066
Tel: 412-967-0765
Email: gepays_Bid250060@ge.com
38. SPX Flow Oil and Gas Equipments Trade Debt $108,000
Plot No 29, Ali Khalifan Rashed
AL
6539
Abu Dhabi
United Arab Emirates
Tel: 971 2 408 190...
Email: thangam.r@spxflow.com
39. Gates E & S Trading LLC Trade Debt $106,654
Al Quoz
12973
Dubai
United Arab Emirates
Tel: 6528-0801-262
Email: sadiqh@ahmed@gates.com
40. NOV Saudi Arabia Trading Co. Trade Debt $105,558
PO Box 52681
Dammam 20745
Saudi Arabia
Tel: 971 48 064204...
Email: jessy.kolenchery@nov.com
41. Sodexo Remote Sites Trade Debt $104,183
Australia Pty Ltd
247 Balcatta Road
Perth, WA 6021
Australia
Tel: 892-42-0766
Email: accountsreceivable.amecaa.au@
sodexo.com
42. James, Ronald Deferred $101,808
Address on File Compensation
Tel: 281-851-0459
Email: rljames1128@gmail.com
43. Charter Supply Co. Trade Debt $99,570
8100 Ambassador Caffery Prky
81735
Broussard, LA 70518
Tel: 337-837-2724
Email: spicard@chartersupply.com
44. Gulf Agency Qatar Trade Debt $96,801
PO Box 6534
Doha Qatar
Tel: 974 323954
Email: shipaccounts.qatar@gac.com
45. FT Farfan Ltd. Trade Debt $96,644
#3-5 Ibis Avenue, Ibis Acres
San Juan
Trinidad and Tobago
Tel: 868-674-7896
Email: receivables@ftfarfan.com
46. Lamprell Energy Limited Trade Debt $92,505
Jebel Ali Free Zone, Gate 4
33455
Dubai
United Arab Emirates
Tel: 652-823-23-504
Email: sharmilas@lamprell.com
47. Ocean Oilfield Drilling Rigs & Trade Debt $90,051
Mari
Plot # HD 33 & 34
50034
Sharjah
United Arab Emirates
Tel: 6526-9292
Email: acc@oceanengg.ae
48. Eaglin, Michael Litigation
Arnold & Itkin LLP
6009 Memorial Drive
Houston, TX 77007
Email: karnold@arnolditkin.com
49. Paragon Litigation Trust Litigation
Kirkland & Ellis LLP
300 North Lasalle
Chicago, IL 60654
Tel: 312 862 2290
Email: patrick.nash@kirkland.com
50. Transocean Offshore Litigation
Reynolds Frizzell LLP
1100 Louisiana St., Ste 3500
Houston, TX 77002
Tel: 713-485-7200
Email: creynolds@reynoldsfrizzell.com
* * *
The Debtors are seeking to have their cases jointly administered
for procedural purposes under the Lead Case of Noble Corporation
plc (Bankr. S.D. Tex. Lead Case No. 20-33826).
OLDSMAR JJ: Case Summary & 11 Unsecured Creditors
-------------------------------------------------
Debtor: Oldsmar JJ, LLC
3970 Tampa Rd., Ste A
Oldsmar, FL 34677-3201
Business Description: Oldsmar JJ, LLC is a privately held company
in the fast-food & quick-service restaurants
business.
Chapter 11 Petition Date: September 26, 2020
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 20-07204
Debtor's Counsel: Steven M. Fishman, Esq.
STEVEN M. FISHMAN, PA
2454 N. McMullen Booth Rd., #D-607
Clearwater, FL 33759
Tel: 727-724-9044
Email: steve@attorneystevenfishman.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Scott Zieba, managing member.
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/EHQAQXI/Oldsmar_JJ_LLC__flmbke-20-07204__0001.0.pdf?mcid=tGE4TAMA
OWENS & MINOR: Updates Annual Earnings Guidance
-----------------------------------------------
Owens & Minor, Inc. reports an increase in full year 2020 earnings
guidance. The Company is revising its outlook for full-year
adjusted net income from $1.00 to $1.20 per share to adjusted net
income of $1.75 to $1.90 per share. The Company expects that
foreign currency will have a minimal impact on adjusted net income
per share for the full year. The increase in earnings guidance is
primarily a result of:
* Strong operational execution related to productivity leading
to better than expected manufacturing output and operating
efficiencies
* Deployment of PPE related production equipment in the U.S.
ahead of schedule
* Elective procedures volume, across most of the country,
slightly above previously expected levels
* Continued strong demand for PPE
The increased full year guidance is expected to provide sequential
earnings growth from Q2 to Q3 and again from Q3 to Q4. Expectation
of positive business trends in 2021 will result from the
acceleration of investments intended to drive future growth and
ability to quickly adjust in a fluid market in addition to the
reasons noted above for the improvement in earnings for full-year
2020.
"I continue to be very proud of our teammates' ability to rapidly
bring additional, U.S.-based PPE production online ahead of
schedule and increase product output. This is enabling us to
continue to reduce the gap between customer demand and supply,"
said Edward A. Pesicka, president & chief executive officer of
Owens & Minor.
About Owens & Minor
Headquartered in Mechanicsville, Virginia, Owens & Minor, Inc. --
http://www.owens-minor.com/-- is a global healthcare solutions
company with integrated technologies, products, and services
aligned to deliver significant and sustained value for healthcare
providers and manufacturers across the continuum of care. Owens &
Minor helps to reduce total costs across the supply chain by
optimizing episode and point-of-care performance, freeing up
capital and clinical resources, and managing contracts to optimize
financial performance. Owens & Minor was founded in 1882 in
Richmond, Virginia, where it remains headquartered today.
Owens & Minor reported a net loss of $62.37 million for the year
ended Dec. 31, 2019, compared to a net loss of $437.01 million for
the year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$3.13 billion in total assets, $2.74 billion in total liabilities,
and $395.16 million in total equity.
* * *
As reported by the TCR on Aug. 10, 2020, Fitch Ratings has affirmed
Owens & Minor, Inc.'s 'CCC+' Long-Term Issuer Default Rating and
OMI's 'B-'/'RR3' senior secured debt rating, and has assigned a
Positive Rating Outlook. The 'CCC+' rating reflects OMI's limited
financial flexibility as a result of distribution customer losses
amid heightened competition, accelerating pricing pressure and
significantly reduced earnings relative to its debt.
PEPI COMPANIES: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Pepi Companies, LLC
D/B/A eT Craft Burgers and Beer
D/B/A eT Craft Burgers Downtown
D/B/A Alonti Cafe & Catering
D/B/A Alonti Cafe
D/B/A Alonti Catering
D/B/A Alont
1210 W. Clay, Ste 17
Houston, TX 77019
Business Description: The Debtors operate a national catering
companies serving businesses; education,
healthcare, and non-profits, and small
groups. For more information, visit
https://www.alonti.com.
Chapter 11 Petition Date: September 24, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Five affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Pepi Companies, LLC 20-60056
Pepi Corporation 20-60057
Alonti Corporation, LLC 20-60058
Pepi Company of California, LLC 20-60059
Pepi Company of Illinois, LLC 20-60060
Judge: Hon. Christopher M. Lopez
Debtors' Counsel: Christopher Murray, Esq.
JONES MURRAY & BEATTY LLP
4119 Montrose, Suite 230
Houston, TX 77006
Tel: 832-529-3027
Email: christopher.murray@jmbllp.com
Pepi Companies'
Total Assets as of July 31, 2020: $2,321,560
Pepi Companies'
Total Current &
Long-Term Liabilities
as of July 31, 2020: $389,008
Pepi Corporation's
Total Assets as of July 31, 2020: $9,442,828
Pepi Corporation's
Total Current &
Long-Term Liabilities
as of July 31, 2020: $7,455,624
Alonti Corporation's
Estimated Assets: $1 million to $10 million
Alonti Corporation's
Estimated Liabilities: $1 million to $10 million
as of July 31, 2020:
Pepi Company of California's
Total Assets as of July 31, 2020: $2,098,743
Pepi Company of California's
Total Current &
Long-Term Liabilities
as of July 31, 2020: $7,321,061
Pepi Company of Illinois'
Total Assets as of July 31, 2020: $485,613
Pepi Company of Illinois'
Total Current & Long-Term
Liabilities as of July 31, 2020: $202,308
The petitions were signed by Albert A. Pepi Jr., president.
Copies of the petitions are available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/22AZSWQ/Pepi_Companies_LLC__txsbke-20-60056__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/AKOVYWY/Pepi_Corporation__txsbke-20-60057__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/ARUP27I/Alonti_Corporation_LLC__txsbke-20-60058__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/JYSDX5Y/Pepi_Company_of_California_LLC__txsbke-20-60059__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/OEMLMQQ/Pepi_Company_of_Illinois_LLC__txsbke-20-60060__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Zions Bancorporation, NA SBA Paycheck $1,913,300
dba Amegy Bank Northwest Protection Loan
Crossing-Commercial
PO Box 27459 1717 West Loop
South Houston, TX 77227-0000
2. Zions Bancorporation, NA SBA Paycheck $1,362,700
dba Amegy Bank Northwest Protection Loan
Crossing-Commercial
PO Box 27459
1717 West Loop
South Houston, TX 77227-0000
3. American Express Credit Card $846,013
Three World Financial Center Debt
200 Vesey S
New York, NY 10285-0000
4. Briarwood Baytown Ltd. Commercial $292,895
c/o Andrew M. Lease
Caplan Weycer, Termination
Kaplan, Palaski, & Settlement
Zuker, PC 11
Greenway Plaza, Suite 1400
Houston,TX 77046-0000
5. Zions Bancorporation, NA SBA Paycheck $278,800
dba Amegy Bank Protection
Northwest Crossing- Loan
Commercial
PO Box 27459
1717 West Loop
South Houston, TX 77227-0000
6. Sysco-Houston Accounts $85,668
1390 Enclave Parkway Payable
Houston, TX 77077-2099
7. Sysco Dallas 800 Accounts $83,236
Trinity Drive Payable
Lewisville, TX 75056-0000
8. Sysco Chicago 250 Accounts $38,091
Wieboldt Dr Des Payable
Plaines, IL 60016-0000
9. Sysco Los Angeles Inc. Accounts $33,233
20701 East Currier Road Payable
Walnut, CA 91789-0000
10. Gowan, Inc. Accounts $20,500
5550 Airline Dr. Payable
Houston, TX 77076-4998
11. Mass Mutual Life Accrued $12,101
Insurance Company Expenses
1295 State Street
Springfield, MA 01111-0000
12. Brothers 3173 Accounts $6,501
Produce Row Payable
Houston, TX 77023-0000
13. Get Fresh Produce Accounts $5,840
1441 Brewster Creek Blvd Payable
Bartlett, IL 60103-0000
14. Brothers 3173 Accounts $4,460
Produce Row Payable
Houston, TX 77023-0000
15. CH Realty VI/R Accounts $3,138
Houston Wood Ridge LP Payable
MSC#700
27820 Interstate 45 N
Conroe, TX 77385-0000
16. Centerpoint Accounts $1,576
Energy Prop, Inc. Payable
PM Realty Group LP
1111 Louisiana St
Ste 510
Houston, TX 77002-0000
17. Land Rover Accounts $1,381
Financial Group Payable
1820 E Sky Harbor Cir S #150
Phoenix, AZ 85034-0000
18. InMoment Inc Accounts $1,279
10355 So. Jordan Payable
Gateway #600
South Jordan, UT
84095-0000
19. Office Depot 6600 Accounts $1,114
North Military Trail Payable
Boca Raton, FL 33496-0000
20. Republic Services Accounts $1,031
13630 Fondren Rd Payable
Houston, TX 77085-0000
21. Universal Refrigeration Accounts $971
1579 Lubbock St Payable
Houston, TX 77007-0000
22. ISI Commercial Accounts $864
Refrigeration 2801 Payable
S Valley Parkway
Suite 200
Lewisville, TX 75067-0000
23. Empire Cooler Service Accounts $806
940 W Chicago Ave Payable
Chicago,IL 60642-0000
24. Ecolab Pest El IM Accounts $701
Div 26252 Network Place Payable
Chicago, IL 60673-1262
25. Time Warner Cable Accounts $544
1 Time Warner Center Payable
New York, NY 10019-0000
26. Comcast Accounts $538
1701 JFK Blvd. Payable
Philadelphia, PA
19103-0000
27. 811 Louisiana Accounts $433
811 Louisiana St. Payable
Houston, TX 77002-0000
28. Houston Department Accounts $411
of Health Payable
8000 N Stadium Dr
Houston, TX 77054-0000
29. Fox Valley Fire and Accounts $368
Supply Payable
2730 Pinnacle Dr.
Elgin, IL 60124-0000
30. City of Houston, Accounts $366
2500 Tanglewilde St # 2 Payable
Houston, TX 77063-0000
PERMIAN TANK: Court Approves Chapter 11 Sale Procedures
-------------------------------------------------------
Law360 reports that a Delaware judge gave her nod Aug. 10, 2020, to
bidding procedures in Texas-based oil and gas storage tank maker
Permian Tank & Manufacturing Inc.'s Chapter 11, after an agreement
was struck putting off potential sale squabbles with unsecured
creditors until another day.
During a hearing held virtually, U.S. Bankruptcy Judge Mary F.
Walrath said she would sign off on the bid procedures once a
revised order was submitted with the court. Permian attorney M.
Blake Cleary of Young Conaway Stargatt & Taylor LLP told the judge
that an agreement had been reached with the unsecured creditors
committee to at least move forward with the auction.
The Court-approved bid procedures set a Sept. 25, 2020 bid
deadline, and an auction on Sept. 29, 2020, if necessary. The sale
hearing is scheduled for Oct. 6, 2020, with sale objections due
Sept. 29.
About Permian Holdco
Permian Holdco 1, Inc. and its affiliates are manufacturers of
above-ground storage tanks and processing equipment for the oil and
natural gas exploration and production industry.
Permian Holdco 1, Inc. and its affiliates, including Permian Tank &
Manufacturing, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 20-11822) on July 19,
2020. The petitions were signed by Chris Maier, chief
restructuring officer. Hon. Mary F. Walrath presides over the
cases.
Permian Tank was estimated to have $10 million to $50 million in
assets and liabilities.
M. Blake Cleary, Esq., Robert F. Poppiti, Jr., Esq., Joseph M.
Mulvihill, Esq., and Jordan E. Sazant, Esq. of Young Conaway
Stargatt & Taylor, LLP serve as counsel to the Debtors. Seaport
Gordian Energy LLC serves as investment banker to the Debtors and
Epiq Corporate Restructuring LLC acts as notice and claims agent.
PHARMAGREEN BIOTECH: Blames Notes, Pandemic for Chapter 11 Filing
-----------------------------------------------------------------
Jeff Montgomery of Law360 reports that cannabis industry sprout
supplier Pharmagreen Biotech Inc. sought bankruptcy protection in a
Nevada federal court Aug. 12, 2020, citing threats to its ability
to pay lender notes and blaming COVID-19 shutdowns that disrupted
its operations and business plan.
Pharmagreen Biotech CEO Peter Wojcik said in a company announcement
of its filing in the U.S Bankruptcy Court for the District of
Nevada that the company's troubles were tied to "toxic terms" in
lender notes. The notes were lined up while the company was
preparing to carry out its plan to deliver high-quality starter
"plantlets" for the cannabis and hemp industry.
Due to the pandemic, Wojcik said, Pharmagreen's "process got
delayed as Europe shut down for over two months, and these notes
became due and as [a] result these lenders are seeking very toxic
conversions that would essentially wipe out the company's
valuation."
"We plan to engage all our lenders to settle debts in a way that is
fair and beneficial for all parties going forward," Wojcik added.
Pharmagreen is an affiliate of WFS Pharmagreen Inc., a wholly owned
Canada-based subsidiary. The company said in its announcement that
WFS Pharmagreen Inc. is becoming a major producer of cannabis
plantlets through a proprietary tissue culture process.
The COVID-19 pandemic dimmed Pharmagreen's outlook, however. U.S.
Securities and Exchange Commission filings show the 2-year-old
company was unable to deliver its most recent quarterly filing on
time because of travel restrictions, business closings and other
fallout.
As of March 31, in its previous 10-Q, the company reported that it
had not earned any revenues from operations and, taking equity into
account, had a $1.4 million working capital deficit and $4.9
million accumulated deficit and about $630,000 in total assets,
mostly in the form of property.
Prior to May 2, 2018, the business had been operating as Air
Transport Group Holdings Inc., providing technical advice and
appraisals to the aircraft and aviation industry as well as
providing sourcing for aircraft leases and parts, according to its
SEC disclosures.
Under a 2018 agreement with WFS Pharmagreen, the aircraft company
changed its name to Pharmagreen and converted its main business
into construction of what was described as a biotech complex in
Deroche, British Columbia, for use in growing starter cannabis
plants.
About Pharmagreen Biotech
Pharmagreen Biotech, Inc. (OTC: PHBI), a company specializing in
the development of highest quality tissue cultured starter
plantlets for the cannabis and hemp industry
Pharmagreen Biotech, Inc., filed a Chapter 11 bankruptcy petition
(Bankr. D. Nev. Case No. 20-13886) on Aug. 7, 2020, disclosing
under $1 million in both assets and liabilities. The Debtor hired
Thomas E. Crowe, Professional Law Corporation, as counsel. The
Debtor tapped Andrew N. Rana as accountant.
PIONEER ENERGY: New Board Gives Themselves Retainers
----------------------------------------------------
Allison McNeely of Bloomberg News reports that Pioneer Energy
Services Corp., fresh out of bankruptcy, wants employees to know
it's on their side...by handing out retainers to the drilling
service company's board members.
The firm's recently-appointed board of directors awarded themselves
a collective $825,000 in retainers, but immediately clawed back 20%
per member as a "hardship reduction" in "solidarity” with
employees who have also taken pay cuts, according to a filing.
Pioneer implemented a temporary four-day work week in May and cut
employee base salaries by 15%. The firm's management team took
reductions of at least 20%.
About Pioneer Energy
Pioneer Energy Services (OTC: PESX) -- http://www.pioneeres.com/--
provides well servicing, wireline, and coiled tubing services to
producers primarily in Texas and the Mid-Continent and Rocky
Mountain regions. Pioneer also provides contract land drilling
services to oil and gas operators in Texas, Appalachia and Rocky
Mountain regions and internationally in Colombia. Pioneer is
headquartered in San Antonio, Texas.
Pioneer Energy Services Corp. and nine related entities sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-31425) to
effectuate its prepackaged plan of reorganization that will cut
debt by $260 million.
Pioneer Energy disclosed $689,693,000 in assets and $576,545,000 in
liabilities as of Sept. 30, 2019.
The Hon. David R. Jones is the case judge.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Norton Rose
Fulbright US LLP are serving as legal counsel to Pioneer, Lazard is
acting as financial advisor and Alvarez & Marsal is serving as
restructuring advisor. Epiq Corporate Restructuring, LLC, is the
claims agent.
Davis Polk & Wardwell LLP and Haynes and Boone, LLP are acting as
legal counsel for the ad hoc group of Senior Unsecured Noteholders
and Houlihan Lokey is acting as financial advisor.
POTOMAC CONSTRUCTION: Unsecureds to be Paid in Full with Interest
-----------------------------------------------------------------
Potomac Construction Flats, LLC, filed a First Amended Disclosure
Statement pursuant to the Debtor's Plan dated August 6, 2020.
The Debtor believes that the Plan will allow it to efficiently
liquidate its assets and make prompt distributions to creditors.
The Plan will result in Creditors receiving a recovery on equal or
more favorable terms than if the Debtor's assets were liquidated
under Chapter 7 of the Bankruptcy Code.
Class 5 Claims (General Unsecured Claims) are impaired by the Plan.
In full and complete satisfaction, discharge and release of the
Class 5 Claims, the holders of the Allowed Class 5 Claims shall
receive pro rata distributions of (1) the BWF Contribution; and (2)
all cash remaining after the payment of the Administrative, Class
1, Class 2, Class 3, and Class 4 Claims up to 100 percent of their
Allowed Claims, plus interest at the federal judgment rate in
effect as of the Petition Date from the later of the Petition Date
or the date that the Claim became liquidated through the date on
which the Claim is paid in full, paid pursuant to the Plan. The
Debtor believes that Allowed Class 5 Claims, including any allowed
unsecured claims of the holders of Class 3 and Class 4 Claims, are
approximately $1,500,000.00.
Class 6 Interests (PCF Membership Interests) are unimpaired by the
Plan. The holders of the Class 6 Interests shall retain all of
their ownership interest in the Reorganized Debtor. Upon the
payment in full of all Allowed Class 5 Claims, any remaining Cash
on hand may be distributed by the Reorganized Debtor in its sole
discretion. No funds may be released from the BWF Reserve or the
ACF Reserve without an order of the Bankruptcy Court.
The proceeds of the Sale, the BWF Contribution and the Reorganized
Debtor's Cash, if any, and the Reorganized Debtor's accounts
receivable will fund Distributions required under the Plan.
A full-text copy of the First Amended Disclosure Statement dated
August 6, 2020, is available at https://tinyurl.com/yxq9xtks from
PacerMonitor.com at no charge.
Counsel for the Debtor:
WHITEFORD, TAYLOR & PRESTON L.L.P.
Nelson C. Cohen, Bar No. 192344
111 Rockville Pike, Suite 800
Rockville, Maryland 20850
Tel: 301.804.3618
Fax: 301.804.3647
E-mail: ncohen@wtplaw.com
Brent C. Strickland
111 Rockville Pike, Suite 800
Rockville, Maryland 20850
Tel: 410.347.9402
Fax: 410.223.4302
E-mail: bstrickland@wtplaw.com
About Potomac Construction
Potomac Construction Flats LLC filed a Chapter 11 petition (Bankr.
D. Col. Case No. 19-00825) on Dec. 16, 2019. At the time of
filing, the Debtor was estimated to have $1 million to $10 million
in assets and liabilities as of the bankruptcy filing. The Hon.
Martin S. Teel, Jr. oversees the case. Nelson C. Cohen, Esq. of
WHITEFORD, TAYLOR & PRESTON LLP, is the Debtor's counsel.
PQ NEW YORK: Unsecured Creditors to Have 2%-5% Recovery in Plan
---------------------------------------------------------------
PQ New York, Inc. and its Affiliated Debtors together with the
official committee of unsecured creditors filed with the U.S.
Bankruptcy Court for the District of Delaware a Combined Disclosure
Statement and Chapter 11 Plan of Liquidation dated August 7, 2020.
The Combined Plan and Disclosure Statement contemplates the
establishment of a liquidating trust by and through which the
Liquidating Trustee will marshal the remaining assets of the
Debtors' estates, including the proceeds from the sale of
substantially all of the assets which was approved by the
Bankruptcy Court on June 29, 2020 and consummated on June 30, 2020,
review the Claims, and make distributions from the remaining assets
of the estates to Holders of Allowed Claims and Allowed Equity
Interests.
The Creditors Committee agreed to support the (i) sale of the
Debtors' assets to Purchaser, including object or otherwise
challenge the Purchaser's ability to credit bid its secured claims
arising from the DIP Credit Agreement, including roll-up amounts,
and (ii) entry of a final Order approving the DIP Financing Motion,
include, among other things, (1) the roll-up; (2) the releases
contained in Paragraph G(5) of the Interim Order; (3) Section
506(c) surcharge waiver; and (4) recovery of the DIP Lender’s
fees, costs and expenses in connection with the DIP Financing in
the event that Purchaser is not the successful bidder for the
Debtors’ assets.
On June 29, 2020, the Bankruptcy Court entered the Sale Order,
approving the sale of substantially all of the Debtors' assets
pursuant to the Asset Purchase Agreement, including the Settlement
Agreement, and the Final Order approving the DIP Financing Motion.
On June 30, 2020, the sale of substantially all of the Debtors'
assets was consummated.
The Plan is the product of the Debtors and the Committee's efforts
on with respect to a process for the Debtors to exit from chapter
11 that maximizes the value of the Debtors' estates.
Class 3 Unsecured Convenience Claims (unsecured claims each in an
amount of less than $2,500) will be automatically deemed Allowed on
the Effective Date in the greater of lesser of (i) the Claim
amount, as filed or scheduled, or (ii) $2,500, and Holders of such
Claims shall receive a 5% distribution in full and complete
satisfaction of such Claims from the Liquidation Trust on the
Effective Date.
Class 4 General Unsecured Claims are slated to have a 2% to 5%
estimated recovery. Each Holder of an Allowed General Unsecured
Claim shall receive its Pro Rata share of any beneficial interest
in the funds remaining in the Liquidating Trust or such other
treatment as may be agreed upon by such Holder and the Liquidating
Trustee. The Liquidating Trustee shall make one or more
Distributions on account of such Allowed General Unsecured Claims
to each Holder of such Allowed General Unsecured Claims on each
Distribution Date on a Pro Rata basis, provided, however, that the
Liquidating Trustee shall have no obligation to make a Distribution
to Holders of Allowed General Unsecured Claims where the
Liquidating Trustee determines that to make such a Distribution
would prevent the Liquidating Trustee from having sufficient funds
to pay Allowed Administrative Claims, and the actual and necessary
costs andexpenses of the Estates and the Liquidating Trust,
including Liquidating Trust Expenses.
On the Effective Date, all Interests shall be deemed canceled,
extinguished and of no further force or effect, and the Holders of
Interests shall not be entitled to receive or retain any property
on account of such Interest. Class 6 Equity Interests are impaired,
and deemed to reject Plan, and are not entitled to vote.
A full-text copy of the Combined Plan and Disclosure Statement
dated August 7, 2020, is available at https://tinyurl.com/yykyeyet
from PacerMonitor.com at no charge.
Counsel to the Debtors:
Mark D. Collins
Michael J. Merchant
Jason M. Madron
Brendan J. Schlauch (No. 6115)
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
E-mail: collins@rlf.com
E-mail: merchant@rlf.com
E-mail: madron@rlf.com
E-mail: schlauch@rlf.com
Counsel to the Official Committee:
Jeffrey R. Waxman
Eric J. Monzo
Brya M. Keilson
Morris James LLP
500 Delaware Avenue, Suite 1500
Wilmington, DE 19801
Telephone: (302) 651-7700
E-mail: jwaxman@morrisjames.com
E-mail: emonzo@morrisjames.com
E-mail: bkeilson@morrisjames.com
- and -
Robert J. Gayda, Esquire
Catherine V. LoTempio, Esquire
Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004
Telephone: 212-574-1200
E-mail: gayda@sewkis.com
E-mail: lotempio@sewkis.com
About PQ New York
Based in New York, PQ New York, Inc. is a wholly-owned subsidiary
of PQ Licensing SA, a Belgian company, and operated 98 restaurants
in the United States under the trade name Le Pain Quotidien.
On May 27, 2020, PQ New York and its U.S. affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 20-11266). PQ New York
was estimated to have $100 million to $500 million in assets and
liabilities at the time of the filing.
The Debtors tapped Richards, Layton & Finger, P.A. as its legal
counsel, and SSG Advisors, LLC as its investment banker.
PricewaterhouseCoopers LLP is the interim management services
provider. Donlin, Recano & Company, Inc., is the claims agent.
PURDUE PHARMA: Ruling Blocks Opioid Victims from Suing Sackler
--------------------------------------------------------------
Daniel Gill, writing for Bloomberg Law, reports that a group of
Tennessee plaintiffs with malfeasance claims against Purdue Pharma
and its former chairman Richard Sackler, including five district
attorneys in the state, lost an attempt to overturn an injunction
barring their lawsuit.
The U.S. District Court for the Southern District of New York's
ruling Tuesday affirmed a bankruptcy court injunction temporarily
halting lawsuits against certain Purdue insiders while the opiate
manufacturer’s Chapter 11 case proceeds.
The Stamford Conn.-based manufacturer of OxyContin filed Chapter 11
in September 2019, as the company faced about 2,700 lawsuits from
local and state governments and injured individuals for its role in
a national opioid crisis.
About Purdue Pharma LP
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation. The Debtors' consolidated
balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets
and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain oversees the cases.
The Debtors tapped Davis Polk & Wardwell LLP and Dechert LLP as
legal counsel; PJT Partners as investment banker; AlixPartners as
financial advisor; and Prime Clerk LLC as claims agent.
Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A. represent the
official committee of unsecured creditors appointed in Debtors'
bankruptcy cases.
David M. Klauder, Esq., was appointed as fee examiner. The fee
examiner is represented by Bielli & Klauder, LLC.
PURDUE PHARMA: Sackler’s Claims Blocked by Ch. 11, Says Tenn. DA
------------------------------------------------------------------
Law360 reports that a New York federal judge won't let a group of
Tennessee district attorneys pursue claims against the former
president of Purdue Pharma LP, saying Tuesday, August 11, 2020,
their argument that a judgment against Richard Sackler wouldn't
affect the Chapter 11 case "makes absolutely no sense."
Affirming an injunction by U. S. Bankruptcy Judge Robert Drain,
U.S. District Judge Colleen McMahon wrote that the case against
Sackler, led by District Attorney Bryant C. Dunaway, is clearly
related to Purdue's Chapter 11 bankruptcy, as it concerns actions
Sackler took when running the company and his alleged role in the
national opioid crisis.
About Purdue Pharma LP
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation. The Debtors' consolidated
balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets
and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain oversees the cases.
The Debtors tapped Davis Polk & Wardwell LLP and Dechert LLP as
legal counsel; PJT Partners as investment banker; AlixPartners as
financial advisor; and Prime Clerk LLC as claims agent.
Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A. represent the
official committee of unsecured creditors appointed in Debtors'
bankruptcy cases.
David M. Klauder, Esq., was appointed as fee examiner. The fee
examiner is represented by Bielli & Klauder, LLC.
QUEBECOR MEDIA: Moody's Alters Outlook on Ba1 CFR to Positive
-------------------------------------------------------------
Moody's Investors Service affirmed Quebecor Media, Inc. Ba1
corporate family rating, Ba1-PD probability of default rating, and
Ba2 ratings on its senior unsecured notes, and upgraded the
company's speculative grade liquidity rating to SGL-1 from SGL-3.
The company's outlook was changed to positive from stable. At the
same time, Moody's affirmed the Ba1 ratings on Videotron Ltee's
(Videotron) senior unsecured notes and changed the outlook to
positive from no outlook. Videotron is a wholly-owned operating
subsidiary of QMI.
"The outlook was changed to positive to reflect expectations that
QMI will maintain its good operating momentum and deleveraging
focus through the next 12 to 18 months", said Peter Adu, Moody's
Vice President and Senior Analyst.
Ratings Affirmed:
Issuer: Quebecor Media Inc.
Corporate Family Rating, Ba1
Probability of Default Rating, Ba1-PD
Senior Unsecured Notes, Ba2 to (LGD5) from (LGD6)
Issuer: Videotron Ltee
Senior Unsecured Notes, Ba1 (LGD3)
Rating Upgraded:
Issuer: Quebecor Media Inc.
Speculative Grade Liquidity, to SGL-1 from SGL-3
Outlook Actions:
Issuer: Quebecor Media Inc.
Outlook, Changed to Positive from Stable
Issuer: Videotron Ltee
Outlook, Changed to Positive from No Outlook
RATINGS RATIONALE
QMI's Ba1 CFR benefits from: (1) a strong business profile
supported by its position as the largest cable operator in Quebec,
supplemented with a growing wireless business and a self-contained
French language media franchise; (2) healthy margins (adjusted
EBITDA margin around 45%), which is one of the highest among peers;
(3) a regulatory framework that restricts foreign ownership and
provides Videotron with favorable bidding conditions for wireless
spectrum auctions; (4) rational, oligopolistic competition; and (5)
moderate growth expectations post coronavirus pandemic and leverage
(adjusted Debt/EBITDA) that will be sustained below 3x in the next
12 to 18 months (2.9x for LTM Q2/2020). The rating is constrained
by: (1) the company's lack of clarity over its long term capital
structure target; (2) execution risks as it manages ongoing
pressure in its wireline/cable business while it simultaneously
expands wireless capabilities; (3) ongoing need for network
investments; (4) small scale relative to peers; and (5) limited
geographic diversity given its primarily Quebec-based footprint.
QMI has very good liquidity (SGL-1). Sources approximate C$2.2
billion while the company and its Videotron operating subsidiary
have no mandatory debt maturities in the next four quarters.
Liquidity is supported by full revolver availability of C$1.8
billion, expected free cash flow of about C$350 million in the next
four quarters and C$25 million of cash at June 30, 2020. Videotron
has a C$1.5 billion revolving credit facility that matures in July
2023 while QMI has a C$300 million revolving credit facility that
matures in July 2022. Financial covenants for the revolving credit
facilities are not publicly disclosed but are not expected to be
problematic over the next four quarters (over 40% cushion). QMI has
limited ability to generate liquidity from asset sales.
The positive outlook reflects expectations that the company will
manage pressures in its wireline business well and grow its
wireless business while continuing with its deleveraging path
through the next 12 to 18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
For an upgrade to Baa3 to be considered, the company must: (1)
publicly articulate a commitment to an investment grade rating
through a conservative capital structure; (2) diversify its cash
flow with wireless contributing more than 25% of consolidated
EBITDA (around 20% for LTM Q2/2020); (3) sustain leverage below
3.25x (2.9x for LTM Q2/2020); and (4) sustain FCF/TD towards 10%
(10% for LTM Q2/2020).
The rating could be downgraded to Ba2 if: (1) cable/wireline
revenue should decline at an accelerated pace (currently around 1%
growth); (2) leverage is sustained above 3.75x (2.9x for LTM
Q2/2020); (3) FCF/TD is negative for an extended period (10% for
LTM Q2/2020).
QMI's social risk is elevated. The coronavirus pandemic is a social
risk given the substantial implications for public health and
safety. Because of the pandemic, QMI has lost revenue on roaming,
long distance, data overage fees and temporary closure of its
retail stores. Moody's expects the pandemic to impact its results
through the rest of 2020 and into 2021. Also, as with many
companies, a cyber breach could be material should it occur. The
company will benefit from new generations that use much more of its
connectivity products, but given the private and personal data it
handles, a cyber breach could cause legal, regulatory or reputation
issues and increased operational costs.
QMI's governance risk is moderate in relation to its financial
policy. The company's dividend payment relative to operating cash
flow of 11% compares very well to those of its main peers. Also,
the company has been reducing it leverage over time. Management has
long articulated a desire to acquire a National Hockey League (NHL)
team to both be the lead tenant in its sponsored Quebec City arena,
and to augment the television content portfolio. Moody's considers
an NHL team purchase to be a low probability, which mitigates
leveraging risk concerns. The company is family-controlled as the
Peladeau family has 74% voting power with a 28% equity interest.
The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.
Quebecor Media, Inc., headquartered in Montreal, Canada, is a
holding company whose primary operations involve wireline and
wireless telecommunications conducted by its wholly-owned operating
subsidiary, Videotron Ltee, with secondary operations involving
newspaper publishing, television broadcasting, music production and
distribution, sports, and entertainment. Revenue for the twelve
months ended June 30, 2020 was C$4.3 billion.
RECORDED BOOKS: Moody's Affirms B3 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service affirmed Recorded Books, Inc's ratings,
including its B3 Corporate Family Rating and the B3 rating on the
upsized $893 million first lien senior secured term loan. The
rating outlook is stable.
The proceeds from the $250 million first lien term loan add-on and
balance sheet cash will be used to fund a dividend to its private
equity owners and pay transaction-related fees.
The dividend recapitalization is credit negative because RBmedia's
debt-to-EBITDA will increase substantially, to 7.9x proforma from
6x for LTM 6/2020 (Moody's adjusted, with capitalized
pre-publication costs expensed). The dividend recap demonstrates
the company's aggressive financial strategy as it comes less than
four months following a significant OverDrive acquisition and at a
time of uncertainty around public libraries' purchasing amid
economic downturn. However, the rating affirmation reflects Moody's
expectation of deleveraging through EBITDA growth, supported by
robust growth in consumer demand for digital and audiobooks and
shift of library spending from physical to digital content. Moody's
expects that RBmedia will continue to generate positive free cash
flow, providing capacity to delever to the current level over the
next 12-18 months.
RBmedia benefits from demographic and social shifts of content
consumption to digital and mobile methods and increased demand for
spoken word content. This is one of key factors supporting the
rating affirmation. The coronavirus outbreak is accelerating the
transformational social changes, providing earnings growth and
deleveraging opportunities to the company.
A summary of the actions follows:
Issuer: Recorded Books, Inc
Corporate Family Rating -- Affirmed, B3
Probability of Default Rating -- Affirmed, B3-PD
First-Lien Senior Secured Revolver due 2023 -- Affirmed, B3 (LGD3)
First-Lien Senior Secured Term Loan due 2025 -- Affirmed, B3
(LGD3)
Outlook: Stable
RATINGS RATIONALE
RBmedia's B3 CFR reflects its small revenue scale relative to rated
peers, high financial leverage, governance risks with its private
equity ownership and aggressive financial strategy that tolerates
high leverage. The company's rating also reflects execution risks
of integrating the recently acquired OverDrive business.
Nevertheless, RBmedia's rating is supported by contractually
guaranteed revenue for a substantial portion of its audiobook's
distribution channel and strong secular trends supporting digital
content consumption that is further accelerated by the impact of
the coronavirus outbreak. The recently completed acquisition of
OverDrive by KKR has added diversity to the revenue stream and
provides increasing scale to the business, with stronger cash flow
contribution and additional growth opportunities.
Pro forma for the incremental debt that will be raised to fund a
$250 million dividend, Moody's estimates the leverage ratio
(Moody's adjusted pro forma total Debt/EBITDA, including expensing
capitalized pre-publication costs) will be near 7.9x, up from 6x
pre-recap. Moody's expects leverage to fall to approximately 6.3x
Debt/EBITDA by the end of 2021, as RBmedia grows its revenue and
executes approximately $14 million in cost savings. There are
operating and integration risks of the OverDrive acquisition that
could produce less favorable results than expected. With only
moderate margins, cash conversion, although improved on a combined
basis, will remain limited and a constraint to financial
flexibility.
The stable rating outlook reflects Moody's view that the company
will maintain its strong position within the digital audio content
production and digital media distribution businesses and reduce its
leverage primarily through EBITDA growth. The stable outlook also
reflects Moody's expectation that revenue will continue to expand
mid-to-high single digits driven by robust demand for digital and
audiobooks, cross-sell opportunities via OverDrive platform and
contractually agreed increases in revenue.
ESG CONSIDERATIONS
RBmedia is exposed to social risks. The company's access to
readership data exposes it to incremental data privacy risks in the
event that there is a data breach of library patron readership and
listening habits. However, the company also benefits from
demographic and social shifts of content consumption via digital
and mobile methods, and increased demand for spoken word content.
The coronavirus outbreak is accelerating the transformational
social changes impacting the company. The spread of the coronavirus
outbreak, deteriorating global economic outlook, and asset price
declines are creating a severe and extensive credit shock across
many sectors, regions and markets. The media/publishing has been
one of the sectors most significantly affected by the shock given
its sensitivity to consumer demand and sentiment. The coronavirus
outbreak and the economic downturn have placed an increased level
of uncertainty regarding future library funding as tax revenues
decline. However, the social distancing mandates and the temporary
closure of physical library facilities has led to an accelerated
transition to various forms of e-books or audio media consumption
and to a broader adoption of digital and audio books, providing
growth opportunities to RBmedia. Moody's regards the coronavirus
outbreak as a social risk under its ESG framework, given the
substantial implications for public health and safety.
The governance risk Moody's considers in RBmedia's credit profile
include an aggressive financial strategy under private equity
ownership and control, which tolerates high leverage and is
motivated to extract a return on its very significant investment
which may be in lieu of de-levering, as demonstrated by this
dividend recap.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings may be upgraded if leverage is sustained below 6x (Moody's
adjusted Debt/EBITDA, including expensing capitalized
pre-publication costs) and consistently generates positive free
cash flow such that Moody's adjusted FCF/Debt > 5%. Management's
commitment to a more conservative financial policy, larger scale,
and improved liquidity would also be needed for RBmedia to be
considered for an upgrade.
Ratings could be downgraded if leverage is sustained above 7x
(Moody's adjusted pro forma Debt/EBITDA with expensed capitalized
pre-publication costs). A downgrade would also be considered if
RBmedia experiences a sustained reduction in its revenue
trajectory, loses a major distribution contract, generates weak
returns on content investment or liquidity worsens.
The principal methodology used in these ratings was Media Industry
published in June 2017.
Recorded Books, Inc is a digital audiobook and related spoken word
content producer with over 49,000 titles in its portfolio. The
company distributes its products through third party digital
retailers and via contracts with various libraries. In addition,
the company distributes its own and third-party content via its
owned subscription based digital audiobook store. On June 9, 2020,
KKR closed on its acquisition of OverDrive, a digital content
distribution platform primarily used by libraries, schools and
corporations, hosting e-books and audiobooks. OverDrive obtains
distribution rights from a broad variety of publishers, and
generates revenue from selling this publisher content to libraries
through its digital marketplace.
RED VENTURES: Fitch Rates New $400MM Incremental Term Loan 'BB'
---------------------------------------------------------------
Fitch Ratings has assigned a 'BB'/'RR2' rating to Red Ventures' new
$400 million non-fungible incremental term loan, which is
co-borrowed by Red Ventures, LLC and New Imagitas, Inc.
Proceeds will be used to fund the acquisition of CNET Media Group,
which was discussed in Fitch's previous rating action commentary on
Sept. 16, 2020. The incremental term loan will have terms
substantially similar to the existing senior secured term loan. As
anticipated, the $400 million term loan does not materially change
Fitch's expectations for recovery on the senior secured debt and
has been assigned the same rating as the existing senior secured
debt.
KEY RATING DRIVERS
Acquisition of CNET: Fitch views Red Ventures' acquisition of CNET
as a long-term credit positive, despite the near-term negative
effect on credit protection metrics. Fitch expects deleveraging to
be a priority after gross leverage rises above 5.0x in the back
half of 2020. Red Ventures' strong track record of reducing debt
after previous large-scale debt funded acquisitions gives Fitch
confidence in the company's deleveraging path back below Fitch's
5.0x negative leverage sensitivity in the near term and ultimately
to within the company's 3x-4x target leverage range. Ultimately,
Fitch believes the acquisition of CNET will help further diversify
Red Ventures' customer concentration and increase exposure to end
markets with favorable secular tailwinds such as consumer
technology and gaming.
Coronavirus Impact: Red Ventures has been materially affected by
the social and economic responses to the coronavirus pandemic. As
local governments began issuing stay-at-home orders and restricting
commerce, advertisers quickly trimmed marketing budgets. The
effects have been most severe in Red Ventures' financial services
business. Tightening consumer credit standards and lower perceived
lifetime value of new customers have reduced both the volume of new
customer acquisitions and the bounty per customer acquired.
As a result of these issues, 2Q20 consolidated LTM EBITDA was down
approximately 7.0% YoY, and Fitch calculated leverage (total debt
with equity credit/operating EBITDA) increased to 4.7x as of June
30, 2020. The company reports that excluding its credit card
business, YTD EBITDA was up double-digits YoY. Additionally, the
credit cards business has shown sequential improvements every month
since its trough in April 2020 and will likely continue to recover
gradually as consumer credit standards loosen.
Leading Customer Acquisition Platform: Red Ventures is the market
leader in screening potential customers online, using its
technology-enabled customer acquisition and marketing services
platform to deliver higher qualified leads, conversions and
retention to its partners, consistently outperforming its partners'
in-house marketing teams. The company has been refining its
approach to data-driven marketing using proprietary technology over
the past 15 years. Although its product offerings can be
reproduced, the company's specific analytics capabilities and
successful track record of value creation are difficult to
recreate.
Sticky Partner Relationships: Red Ventures has consistently
provided higher sales conversions and customer retention as
measured by average life time value than its partners and
competitors. As a result, eight of its top 10 partners have been
with the company for more than five years. Management notes the
company has never lost a partner due to poor performance.
Highly Acquisitive Strategy: Fitch expects both large- and
small-scale acquisitions will be a key tenet of Red Ventures growth
profile over the rating horizon. The debt-funded acquisition of
CNET is consistent with Fitch's expectation for the company to use
leverage opportunistically to fund acquisitions. Red Ventures'
history of delevering after large acquisitions such as Bankrate and
Healthline gives Fitch confidence that the company will reduce
leverage back to its target range of 3x-4x over the medium term.
Red Ventures also has a strong track record of integrating its
acquisitions, cutting costs, improving operations and growing
revenue and EBITDA, which further supports Fitch's expectation for
deleveraging.
Capital Allocation Strategy: Management's primary use of FCF is
expected to be acquisitions and debt repayment over the rating
horizon. The acquisition of CNET will raise pro forma leverage to
5.0x for the LTM period ended June 30, 2020, and leverage will
likely tick higher as weakness in the credit cards business drives
further EBITDA declines. Management has guided to a long-term gross
leverage target range of 3.0x-4.0x but remains opportunistic with
M&A and indicated leverage could exceed 4.0x for the right
acquisition.
Customer and End-Market Concentration: The company's top three
customers generated 22% of revenues for the year ended Dec. 31,
2019, which is materially down from 30% in 2018. Fitch expects
customer concentration to decline further once the CNET acquisition
is completed. Red Ventures' end markets have been historically
concentrated in financial services and telco. Fitch views the
acquisitions of CNET, HigherEducation and Healthline positively as
each acquisition increases end-market diversification.
DERIVATION SUMMARY
Red Ventures' 'B+' Long-Term IDR incorporates the company's leading
position as a digital marketing company that helps its clients
acquire customers using proprietary technology and data analytics.
Prior to the current macroeconomic and advertising recessions, the
company had exhibited strong sustained revenue and EBITDA growth.
Rating limitations include the sector's low barriers to entry.
However, Red Ventures has consistently refined its data-driven
marketing services, creating a long-term track record of value
creation that is difficult to replicate.
Red Ventures continues to push to diversify its end markets, which
reduces Fitch's concerns about customer concentration. Fitch views
the acquisition of CNET as a long-term credit positive, as the
acquisition will reduce customer concentration and increase
exposure to favorable end markets such as consumer technology and
gaming through an established brand name.
As a result of recent strategic acquisitions, the company has
achieved more meaningful scale and is forecasted to surpass its
positive rating sensitivity threshold of $1.5 billion in revenues
in 2021. Fitch believes the increasing scale, dominant market
position, and strong cash flow characteristics of the business
allows the business to manage higher levels of leverage. EBITDA and
FCF margins have exceeded Fitch's initial estimates. While gross
leverage will rise above 5.0x in 2020, Fitch believes there is a
clear deleveraging path through EBITDA growth and voluntary debt
reduction.
KEY ASSUMPTIONS
-- Fitch assumes a consolidated pro forma revenue decline of
approximately 10% in 2020, primarily driven by financial services
revenue declines. Fitch assumes that revenue the Home Services,
Health & International, and Education segments will be flat to
slightly up in 2020. Fitch assumes a slight EBITDA margin
contraction as financial services expenses are reallocated instead
of cut.
-- Fitch assumes the CNET acquisition closes at the end of the
fourth quarter, with revenue and EBITDA not materially contributing
to results until 2021. Fitch assumes the acquisition is funded by
incremental term loans and free cash flow.
-- Fitch assumes modest organic revenue growth in 2021, driven by
a strong recovery in the credit cards business and low-to-mid
single digit growth in other segments, but insufficient to offset
declines in 2020. Fitch also assumes EBITDA margins return close to
2019 levels. Fitch assumes low-to-mid single digit organic revenue
growth thereafter.
-- Fitch assumes CNET revenue grows at low double-digit rates
driven by improved monetization strategies and favorable secular
tailwinds. Fitch also assumes modest margin expansion as Red
Ventures realizes expected cost synergies.
-- Fitch assumes an additional $1.25 billion of acquisitions over
the rating horizon funded by revolver borrowings and FCF.
RECOVERY RATING ASSUMPTIONS
Going-Concern Approach:
The recovery analysis assumes that Red Ventures would be considered
a going-concern in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim and uses a 6x EV multiple to calculate a
post-reorganization valuation.
Fitch's recovery analysis contemplates insolvency resulting from
inadequate liquidity amid recessionary stress. In this scenario,
Fitch assumed that the company is unable to integrate the large
number of acquisitions into the business in addition to the loss of
major partner contracts resulting in material revenue and EBITDA
declines.
The estimate considered Fitch's more positive view of the data
analytics subsector including the typically high proportion of
recurring revenues, sizeable and stable EBITDA margins and strong
FCF conversion. Recent acquisitions in the data and analytics
subsector have occurred at attractive multiples. Acquisitions and
dispositions in the data and analytics subsector ranged from
10x-13x. Current EV multiples of public companies similar to Red
Ventures trade in the 10x-17x range.
The recovery analysis assumes full utilization on the revolver and
implies a 'BB'/'RR2' rating on the senior first lien secured debt.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Management maintains total debt with equity credit to EBITDA
below 3.5x, grows revenue to more than $1.5 billion, and in
addition further reduces partner and end-market concentration;
-- FCF margins are sustained in the mid-to-high teens.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Total debt with equity credit to EBITDA exceeds 5.0x for an
extended period of time, either through a debt-funded acquisition
or sizable owner distributions;
-- FCF generation reverts and margins fall below 5% or become
negative;
-- Company loses large clients.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: At June 30, 2020, the company had $79 million
in balance sheet cash and generated $255 million in FCF for the LTM
period ended June 30, 2020. Red Ventures has $550 million of
capacity under its $754 million revolver, as the company has
steadily repaid revolver borrowings, which were used to finance the
Healthline acquisition in 2019 and support liquidity through the
coronavirus pandemic. While Red Ventures maintains sufficient
revolver capacity to finance the CNET acquisition with existing
liquidity sources, Fitch's base case assumes Red Ventures will
raise additional debt to finance the acquisition and maintain its
revolver capacity.
Fitch expects Red Ventures to maintain sufficient liquidity to
support operations and debt service. There are no near-term
maturities, presenting limited refinancing risk. The revolver
matures in November 2023 and the term loan in November 2024.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
REMINGTON OUTDOOR: To Close Rockingham Plant If Fails to Find Buyer
-------------------------------------------------------------------
Richard Craver of Winston-Salem Journal reports that Remington
Outdoor will close its factory in Rockingham County once it fails
to secure a buyer.
Remington Outdoor Co. has warned its entire workforce, including
103 employees at its plant in Madison, that it will cease all
operations if it cannot find a buyer.
The company said in a WARN Act notice filed with N.C. Commerce
Department on July 28 that it could begin eliminating jobs
permanently as soon as Sept. 29 at the 870 Remington Drive plant in
Madison, which is in western Rockingham County.
The Commerce Department posted notification of the WARN filing on
its website.
Employers are required to provide workers with at least a 60-day
warning any time their jobs could be eliminated in a mass layoff.
Employees are entitled to receive their wages and benefits during
the 60-day period, and the notice triggers assistance from state
employment agencies.
There are tentative plans for the bankruptcy court judge to conduct
an auction of Remington’s assets in September.
The company said in the WARN notice that it "continues to engage in
a sales process as part of the bankruptcy proceeding."
"Remington Outdoors has been a staple in the Rockingham County
workforce industry since 1996," county officials said in a
statement.
"While we are sad to learn of their Chapter 11 bankruptcy filing,
we are very hopeful that a qualified investor will make purchase of
the company, bringing forth the potential of job retention at the
facility."
"As part of the bankruptcy process, we are aware that permanent job
loss could be a possibility and will address this after the close
of the bankruptcy proceedings."
The firearms manufacturer has been plagued by lawsuits filed after
the 2012 Newtown, Conn., school shooting in which 20 first-graders
and six educators were killed. The gunman used a Remington-made
rifle.
Cable news channel CNBC said Remington entered bankruptcy after
failing to reach an agreement with the Navajo Nation. The group was
reported to be considering purchasing Remington's assets.
The WARN notice cited Remington's bid "to pursue a transaction
which would provide funding and capital that would avoid a
reduction of the workforce."
"Unfortunately, we were recently notified that the transaction is
not likely to go forward as originally anticipated," the notice
said.
Separate notices were filed for facilities in Alabama, Arkansas and
New York.
About 717 jobs at its plant in Ilion, N.Y., are affected by a
potential plant shutdown, according to the Observer-Dispatch of
Utica, N.Y.
Remington spokesman Billy Hogue could not be immediately reached
for comment on the Madison plant's future.
Hogue told the Utica newspaper that "the bankruptcy impacts all of
our employees at all of our sites: Ilion, Huntsville, Ala.,
Madison, N.C., Lonoke, Ark. — every single employee."
"We have no idea what the outcome will be. It's up for auction, and
the courts will determine how it's to be sold — whether all in
one piece or separately. We have no idea."
The company said it has between 1,000 and 5,000 creditors. It does
not plan to have any money available upon exiting bankruptcy to pay
unsecured creditors.
Listed as its largest shareholder is Cede & Co. of New York at
11.39 million shares. Schultze Master Fund Ltd. of Port Chester,
N.Y., was listed as having 492,409 shares. Schultze is known for
investing in distressed companies.
Remington needed less than seven weeks to exit bankruptcy
protection in May 2018. It emerged with more than $775 million in
debt canceled while honoring "all trade and business claims."
It gained a $100 million term loan from creditors, identified as
term loan lenders, who would own 82.5% of the equity in a
reorganized Remington. Another group of creditors would hold the
remaining 17.5% through providing a $45 million bridge loan.
Three prominent North Carolina banks agreed in May 2018 to provide
54% of the debtor-in-possession financing. Bank of America Corp.
and Wells Fargo & Co. provided $43.23 million, while BB&T Corp.
provided $18.62 million.
Altogether, seven financial institutions are supplying $193
million.
Remington's bankruptcy filing comes as other firearms
manufacturers, most notably Sturm, Ruger & Co., have experienced a
surge in demand for products.
Ruger's share price has been up as much as 46% from $60.66 on May
26 to a 52-week high of $88.40 on Thursday. The 52-week low was
$38.44 on March 12, 2020.
About Remington Outdoor Company
Remington Outdoor Company, Inc. and its affiliates are
manufacturers of firearms, ammunition and related products for
commercial, military, and law enforcement customers throughout the
world. They operate seven manufacturing facilities located across
the United States. The companies' principal headquarters are
located in Huntsville, Alabama.
On March 25, 2018, Remington Outdoor Company, Inc. and 12
affiliated debtors sought Chapter 11 bankruptcy protection (Bankr.
D. Del. Lead Case No. 18-10684) to seek confirmation of a
prepackaged plan of reorganization.
Remington Outdoor Company and its affiliates again sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Ala. Lead Case No. 20-81688) on July 27, 2020. At the time of the
filing, Remington disclosed assets of between $100 million and $500
million and liabilities of the same range.
Judge Clifton R. Jessup Jr. oversees the present cases.
The Debtors tapped O'Melveny & Myers LLP as their bankruptcy
counsel, Burr & Forman LLP as local counsel, M-III Advisory
Partners LP as financial advisor, Ducera Partners LLC as
investment
banker, and Prime Clerk LLC as notice, claims and balloting agent.
The U.S. Bankruptcy Administrator for the Northern District of
Alabama appointed a committee of unsecured creditors on Aug. 6,
2020. The committee is represented by Fox Rothschild, LLP and
Baker Donelson Bearman Caldwell & Berkowitz, PC.
RGN-GROUP HOLDINGS: Hires AlixPartners as Financial Advisor
-----------------------------------------------------------
RGN-Group Holdings, LLC, and its debtor-affiliates seek authority
from the United States Bankruptcy Court for the District of
Delaware to hire AlixPartners, LLP as their financial advisor.
RGN-Group requires AlixPartners to:
-- review the Debtors' and their respective subsidiaries'
operations, financial commitments and key interdependencies;
-- assess and quantify potential landlord liabilities across the
Debtors' property portfolio;
-- identify the restructuring options available for the Debtors
and consider the key commercial and practical aspects of the
identified options;
-- assist with the design of restructuring strategy;
-- assist in the preparation for and filing a US Bankruptcy
Petition, coordinating and providing administrative support for the
proceeding and developing the Plan of Reorganization or other
appropriate case resolution;
-- assist with the preparation of statements of affairs,
schedules and other regular reports required by the Bankruptcy
Court as well as providing assistance in such areas as testimony
before the Bankruptcy Court on matters that are within
AlixPartners' areas of expertise;
-- assist the Debtors and their management in developing a
short-term cash flow forecasting tool and related methodologies and
assist with planning for alternatives as requested by the Debtors;
-- provide assistance as requested by Debtors' management in
connection with the Debtors' development of any forecasts as may be
required by creditor constituencies in connection with negotiations
or by the Debtors for other
corporate purposes;
-- assist as requested in managing any litigation that may be
brought against the Debtors in the Court;
-- assist as requested in managing the claims resolution process
and analyzing preferences and other avoidance actions;
-- assist in communication and/or negotiation with outside
constituent stakeholders;
-- provide expert testimony regarding any of the matters
referenced above;
-- assist with such other matters as may be requested that fall
within AlixPartners' expertise and that are mutually agreeable and
as confirmed in writing accordingly.
AlixPartners' current standard hourly rates for 2020 are:
Managing Director $1,025 – $1,195
Director $800 – $950
Senior Vice President $645 – $735
Vice President $470 – $615
Consultant $175 – $465
Paraprofessional $295 – $315
AlixPartners received retainers totaling $350,000 from the Debtors
and non-debtor affiliates.
Stephen Spitzer, managing director of AlixPartners, assures the
court that the firm is a "disinterested person" within the meaning
of section 101(14) of the Bankruptcy Code, as required by section
327(a) of the Bankruptcy Code
and supplemented by section 1107(b) of the Bankruptcy Code) and
does not hold or represent an interest materially adverse to the
Debtors' estates.
The firm can be reached through:
Stephen Spitzer
AlixPartners LLP
909 Third Avenue
New York, NY 10022
Tel: +1 212 490 2500
Fax: +1 212 490 1344
Email: sspitzer@alixpartners.com
About RGN-Group Holdings
RGN-Group Holdings, LLC, and two affiliates concurrently filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Lead Case No. 20-11961) on August 17, 2020.
The petitions were signed by James S. Feltman, responsible
officer.
At the time of filing, RGN-Group Holdings disclosed $1,005,956,000
in assets and $946,016,000 in liabilities; RGN-National disclosed
$33,697,000 in assets and $11,023,000 in liabilities; and H Work
disclosed $19,640,000 in assets and $13,608,000 in liabilities.
Patrick A. Jackson, Esq. at FAEGRE DRINKER BIDDLE & REATH LLP
represents the Debtors as counsel. The Debtors tapped ALIXPARTNERS
as their financial advisor; DUFF & PHELPS, LLC as their
restructuring advisors and EPIQ CORPORATE RESTRUCTURING, LLC as
their claims agent.
ROBERT'S SEAFOOD: Seeks to Hire William G Haeberle as Accountant
----------------------------------------------------------------
Robert's Seafood and Hot to Go Kitchen Inc. seeks authority from
the U.S. Bankruptcy Court for the Middle District of Florida to
hire William G Haeberle CPA LLC as its accountant.
William G Haeberle will prepare the Debtor's 2019 Federal Income
Tax Return.
The accountant will charge $2,550 for the preparation of the
return.
The accountant has no interest adverse to the Debtor or the estate
in any of the matters upon which the Certified Public Accountant is
to be engaged, according to court filings.
The accountant can be reached through:
William G Haeberle, CPA
William G Haeberle CPA LLC
1440 Peachtree St
Jacksonville, FL 32207
Phone: (904)-245-1304
About Robert's Seafood and
Hot to Go Kitchen Inc.
Robert's Seafood and Hot to Go Kitchen Inc., a company based in
Jacksonville, Fla., filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-02369) on Aug. 9, 2020. At the time of filing, Debtor had
estimated assets of between $100,000 and $500,000 and liabilities
of between $500,000 and $1 million. Bryan K. Mickler, Esq., at
Mickler & Mickler is Debtor's legal counsel. The Debtor tapped
William G Haeberle CPA LLC as its accountant.
RSG INDUSTRIES: Seeks to Hire Van Horn Law Group as Counsel
-----------------------------------------------------------
RSG Industries Corp. seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to employ Van Horn Law Group,
P.A. as its counsel.
The firm will render these legal services to the Debtor:
(a) give advice to the Debtor with respect to its powers and
duties as a debtor-in-possession and the continued management of
its business operations;
(b) advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
(c) prepare motions, pleadings, orders, applications,
adversary proceedings, and other legal documents necessary in the
administration of the case;
(d) protect the interest of the Debtor in all matters pending
before the court; and
(e) represent the Debtor in negotiation with its creditors in
the preparation of a plan.
The firm's hourly rates are below:
Chad Van Horn, Esq. $450
Associates $350
Jay Molluso $250
Law Clerks $175
Paralegals $175
The firm will require an initial retainer in the amount of $5,000,
plus a filing fee of $1,717, before undertaking any work in
connection with this engagement.
Chad Van Horn, a founding partner of Van Horn Law Group, P.A., and
Melissa Goolsarran Ramnauth, a regular associate of Van Horn Law
Group, P.A., disclosed in court filings that the firm and its
employees are "disinterested persons" as that term is defined in
section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Chad Van Horn, Esq.
VAN HORN LAW GROUP, P.A.
330 N. Andrews Ave., Suite 450
Fort Lauderdale, FL 33301
Telephone: (954) 765-3166
E-mail: Chad@cvhlawgroup.com
About RSG Industries Corp.
RSG Industries Corp. sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-19238) on
August 26, 2020, listing under $1 million in both assets and
liabilities. Chad Van Horn, Esq. at VAN HORN LAW GROUP. P.A.
represents the Debtor as counsel.
RTW RETAILWINDS: NY & Co Closes Chino Hills Store
-------------------------------------------------
Champion Newspapers reports that New York & Co is set to close its
store at Chino Hills, in California.
Employees at New York & Company, the women's fashion retailer at
The Shoppes at Chino Hills, were just enjoying a re-opening when
parent company RTW Retailwinds, Inc., filed for Chapter 11
bankruptcy protection July 13, 2020. "Store closing" signs now fill
the windows. Liquidation sales are occurring at every store and
will last until all merchandise is sold, according to a news
release. The retailer joins many others in Chino Valley going
bankrupt or closing stores including Victoria Secret, Pier 1
Imports, JCPenney, GNC, Jos. A. Bank, Men's Wearhouse, J. Crew,
Jared the Galleria of Jewelry, Bed, Bath & Beyond, Chico's, Payless
ShoeSource, Gymboree, California Pizza Kitchen, Children's Place,
and White House Black Market.
About RTW Retailwinds
RTW Retailwinds, Inc. [OTC PINK:RTWI], formerly known as New York &
Company, Inc., is a specialty women's omni-channel retailer with a
powerful multi-brand lifestyle platform providing curated fashion
solutions that are versatile, on-trend, and stylish at a great
value. The specialty retailer, first incorporated in 1918, has
grown to now operate 378 retail and outlet locations in 32 states
while also growing a substantial eCommerce business. The Company's
portfolio includes branded merchandise from New York & Company,
Fashion to Figure, and Happy x Nature. The Company's branded
merchandise is sold exclusively at its retail locations and online
at http://www.nyandcompany.com/,http://www.fashiontofigure.com/,
http://www.happyxnature.com/,and through its rental subscription
businesses at http://www.nyandcompanycloset.com/and
http://www.fashiontofigurecloset.com/
RTW Retailwinds, Inc. and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 20-18445)
on July 13, 2020. The petitions were signed by Sheamus Toal, CEO,
CFO and treasurer.
As of July 13, 2020, the Debtors reported total assets of
$405,356,610 and total liabilities of $449,962,395.
The Hon. John K. Sherwood presides over the cases.
Michael D. Sirota, Esq., Stuart Komrower, Esq., Ryan T. Jareck,
Esq., and Matteo W. Percontino, Esq. of Cole Schotz P.C. serve as
counsel to the Debtors. Berkeley Research Group, LLC, has been
tapped as financial advisor to the Debtors; B. Riley FBR, Inc. as
investment banker; and Prime Clerk, LLC as claims and noticing
agent.
SEASPRAY RESORT: Seeks to Hire Townsend LLC as Counsel
------------------------------------------------------
Seaspray Resort, Ltd. seeks authority from the United States
Bankruptcy Court for the Southern District of Florida to hire Louis
Townsend, Jr., Esq. and Townsend LLC as its counsel.
Services Townsend will render are:
a. advice the Debtor with respect to its powers and duties and
the continued management of its business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the US Trustee's Operating Guidelines and Reporting
Requirements and with the rules of the Court;
c. prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of the case;
d. protect the interests of the Debtor in all matters pending
before the Court; and
e. represent the Debtor in negotiations with its creditors and
in the preparation of a plan.
The firm's hourly rates are:
Of-Counsel $225 to $450
Legal Assistants $75 to $195
Current hourly rate of Mr. Townsend is $250.
Mr. Townsend disclosed in court filings that he and other members
of the firm are "disinterested" as that term is defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Louis Townsend, Jr., Esq.
Townsend LLC
1645 Palm Beach Lakes Blvd., Suite 1200
West Palm Beach, FL 33401
Tel: (561) 207-2046
(561) 758-1635
Email: townse@bellsouth.net
About Seaspray Resort LTD
Seaspray Resort, LTD. is in the casino hotel business.
Seaspray Resort LTD sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-17868) on July 20,
2020. At the time of the filing, Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Judge Mindy A. Mora oversees the case. Townsend, LLC is
Debtor's legal counsel.
SHILOH INDUSTRIES: Law Firm of Russell Represents Utility Companies
-------------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the Law Firm of Russell R. Johnson III, PLC submitted a verified
statement that it is representing the utility companies in the
Chapter 11 cases of Shiloh Industries, Inc.
The names and addresses of the Utilities represented by the Firm
are:
a. Constellation NewEnergy, Inc.
Constellation NewEnergy - Gas Division, LLC
Attn: C. Bradley Burton
Credit Analyst
Constellation Energy
1310 Point Street, l2th Floor
Baltimore, MD 21231
b. Ohio Edison Company
Attn: Kathy M. Hofacre
FirstEnergy Corp.
76 S. Main St., A-GO-15
Akron, OH 44308
The nature and the amount of claims of the Utilities, and the times
of acquisition thereof are as follows:
a. Constellation NewEnergy - Gas Division, LLC and Ohio Edison
Company have unsecured claims against the above-referenced Debtors
arising from prepetition utility usage.
b. For more information regarding the claims and interests of
the Utilities in these jointly-administered cases, refer to the
Objection of Constellation NewEnergy, Inc., Constellation NewEnergy
– Gas Division, LLC and Ohio Edison Company to the Motion of
Debtors For Entry of Interim and Final Orders (I) Approving of the
Debtors For Interim and Final Orders (I) Establishing Adequate
Assurance Procedures With Respect To Their Utility Providers and
(II) Granting Relating Relief filed in the above-captioned, jointly
administered, bankruptcy cases.
The Law Firm of Russell R. Johnson III, PLC was retained to
represent the foregoing Utilities in September 2020. The
circumstances and terms and conditions of employment of the Firm by
the Companies is protected by the attorney-client privilege and
attorney work product doctrine.
The Firm can be reached at:
Russell R. Johnson III, Esq.
LAW FIRM OF RUSSELL R. JOHNSON III, PLC
2258 Wheatlands Drive
Manakin-Sabot, VA 23103
Telephone: (804) 749-8861
Facsimile: (804) 749-8862
E-mail: russell@russelljohnsonlawfirm.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/307qG84
About Shiloh Industries
Shiloh Industries, Inc. and its subsidiaries are global innovative
solutions providers focusing on lightweighting technologies that
provide environmental and safety benefits to the mobility
markets.
On Aug. 30, 2020, Shiloh Industries and its subsidiaries sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 20-12024). The petitions were signed by Lillian
Etzkorn, authorized person.
The Debtors reported total consolidated assets of $664,170,000 and
total consolidated debts of $563,360,000 as of April 30, 2020.
Jones Day and Richards, Layton & Finger P.A. have been tapped as
legal counsel of the Debtors. Houlihan Lokey Capital Inc serves as
the Debtors' financial advisor; Ernst & Young LLP serves as
restructuring advisor; and Prime Clerk LLC serves as claims and
noticing agent.
SKYLER AARON: Seeks Court Approval to Hire Phocus as Accountant
---------------------------------------------------------------
Skyler Aaron Cook seeks authority from the US Bankruptcy Court for
the District of Arizona to hire Phocus Accounting and Tax
Specialists, PLLC as its accountant.
Professional services to be rendered by Phocus Accounting are:
-- prepare income tax returns and review appointments;
-- review and complete 2019 accounting for Buddy's, CKE Holdings,
and CKE Home Management.
-- attend meetings as needed with Skyler to answer questions to
complete books;
-- prepare individual income tax return (Form 1040) for 2019 for
Skyler and Chelsea Cook;
-- prepare partnership income tax return (Form 1065) for 2019 for
Buddy's Renovation and Handyman Services;
-- prepare partnership income tax return (Form 1065) for 2019 for
CKE Holdings, LLC;
-- prepare partnership income tax return (Form 1065) for 2019 for
CKE Home Management, LLC;
-- review returns, if necessary, with James Kahn.
-- provide 2020 support as required.
The services are to be rendered for a "flat fee" of $18,000, which
was paid at the time of the engagement on Feb. 12, 2020.
Phocus Accounting does not hold or represent any interest adverse
to the Debtor or the Estate in the matters in
which it is to be engaged, as disclosed in the court filings.
The firm can be reached through:
Seth Fink, C.P.A.
Phocus Accounting and
Tax Specialists, PLLC
7600 N 16th St STE 100
Phoenix, AZ 85020
Phone: +1 602-274-3405
About Skyler Aaron Cook
Skyler Aaron Cook sought protection under Chapter 11 of the
Bankruptcy Court (Bankr. D. Ariz. Case No. 20-01730) on Feb. 19,
2020, disclosing under $1 million in both assets and liabilities.
James F. Kahn, Esq. at KAHN & AHART, PLLC represents the Debtor as
counsel.
James E. Cross, Esq., has been appointed Trustee in the case.
The Debtor tapped Phocus Accounting and Tax Specialists, PLLC, as
its accountant.
SPEEDCAST INTL: Black Diamond, Centerbridge Beef Up Proposals
-------------------------------------------------------------
Speedcast International Limited (ASX:SDA) on Aug. 31 announced that
it has received further recapitalisation proposals for the business
from two of its largest lenders, Black Diamond Capital Management
and Centerbridge Partners. The Company is currently evaluating the
revised proposals with a view to maximising value for all creditors
and certainty of outcome for all stakeholders. Speedcast has
withdrawn a related motion that was due to be heard in the United
States Bankruptcy Court for the Southern District of Texas.
The Chair of Speedcast International, Stephe Wilks commented "Black
Diamond and Centerbridge are the two largest secured creditors of
the Company and we are pleased that both have delivered compelling
proposals for Speedcast. Our focus remains on evaluating both
proposals to determine an agreed path that maximises value for all
creditors and certainty for all stakeholders".
Peter Shaper, Speedcast's Chief Executive Officer, is returning to
the private equity firm he is affiliated with. Shaper has tendered
his resignation to the Board, and the Board has accepted his
resignation. Joe Spytek will continue in his role as President and
Chief Commercial Officer, continuing to provide senior leadership
to the Company.
Stephe Wilks further commented, "The Board is incredibly
appreciative of Peter's efforts in stabilising Speedcast through
this challenging period."
Speedcast announced its decision to recapitalize its business
through voluntary Chapter 11 proceedings on April 23, 2020. More
information about Speedcast's Chapter 11 case can be found at
http://www.kccllc.net/speedcast.
$395M Commitment
Speedcast on Aug. 13, 2020 announced that it has received a US$395
million equity commitment from Centerbridge Partners, L.P. and its
affiliates, one of its largest lenders. The commitment would
support a plan of reorganization, which has the support of both
Centerbridge and the Company’s Official Committee of Unsecured
Creditors.
Centerbridge's proposed US$395 million equity investment provides
the opportunity for Speedcast’s existing secured lenders to
participate in the equity commitment on a fully pro-rata basis to
support Speedcast's emergence from its reorganization under Chapter
11 of the US Bankruptcy Code. During the completion of the Chapter
11 process and under the new ownership structure, Speedcast remains
focused on supporting the connectivity needs of its customers and
fully intends to continue its global operations uninterrupted.
The proposed plan would enable the Company, under the leadership of
both Peter Shaper, Speedcast's Chief Executive Officer, and Joe
Spytek, Speedcast's President and Chief Commercial Officer, to
continue to execute on the transformation plan to refocus the
business, which they initiated earlier this year after joining the
organization in executive leadership roles. Both Shaper and Spytek
have extensive background in the communications and service
provider sectors, each previously serving as chief executives for
leading remote communications businesses.
Centerbridge has also committed to providing, if needed,
debtor-in-possession (DIP) financing of up to US$220 million on
favorable economic terms. The Centerbridge DIP financing, if drawn,
would be utilized to refinance the Company's existing DIP
financing, to fund the Company’s Chapter 11 plan process, and to
ensure the Company can continue to meet its financial commitments
while it works toward confirmation of the plan of reorganization.
The plan will provide for cash payments to holders of secured
claims. A number of the company's trade creditors are critical to
its future, and the plan will provide to those relevant trade
creditors, a partial cash payment for those unsecured claims.
Unsecured creditors generally will share in recoveries from a
litigation trust, noting there is no certainty that any action
would be undertaken or payment made from this trust. The plan does
not contemplate any recovery for existing shareholders, and
existing shareholders would no longer have an equity interest in
the reorganized Speedcast Group.
Completion of the equity investment is subject to confirmation of
the plan of reorganisation and a number of other conditions,
including various regulatory approvals and waivers.
About SpeedCast International
Headquartered in New South Wales, Australia, SpeedCast
International Limited and its affiliates provide remote and
offshore satellite communications and information technology
services. SpeedCast's fully-managed service is delivered to more
than 2,000 customers in 140 countries via a global, multi-access
technology, multi-band, and multi-orbit network of more than 80
satellites and an interconnecting global terrestrial network,
bolstered by on-the-ground local upport from more than 40
countries. Speedcast services customers in sectors such as
commercial maritime, cruise, energy, mining, government, NGOs,
enterprise, and media.
SpeedCast International and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-32243) on April 23, 2020. At the time of the filing, the
Debtors each had estimated assets of between $500 million and $1
billion and liabilities of the same range.
Judge David R. Jones oversees the cases.
Speedcast is advised by Weil, Gotshal & Manges LLP as global legal
counsel and Herbert Smith Freehills as co-counsel. Michael Healy
of FTI Consulting, Inc. is Speedcast's Chief Restructuring Officer,
and FTI Consulting, Inc. is Speedcast's financial and operational
advisor. Moelis Australia Advisory Pty Ltd and Moelis & Company
LLC are Speedcast's investment bankers. KCC is Speedcast’s
claims and noticing agent.
The Office of the U.S. Trustee appointed a committee to represent
unsecured creditors in Debtors' bankruptcy cases. The committee is
represented by Hogan Lovells US, LLP.
On August 13, 2020, the Debtor received a $395 million equity
commitment from Centerbridge Partners, L.P. and its affiliates, one
of its largest lenders.
SPIRIT AEROSYSTEMS: Moody's Rates $400MM 1st Lien Term Loan 'B2'
----------------------------------------------------------------
Moody's Investors Service affirmed its ratings for Spirit
AeroSystems, Inc. including the company's B2 corporate family
rating (CFR) and B2-PD probability of default rating. Moody's also
affirmed ratings for the company's existing senior secured first
lien notes (Ba2), senior secured second lien notes (B1), and senior
unsecured notes (Caa1). Concurrently, Moody's assigned a Ba2 rating
to the company's proposed $400 million first lien term loan. The
company will also be issuing additional senior secured first lien
debt. About one-half of the net proceeds from the transaction will
be used to repay outstanding amounts under the existing term loan A
and delayed draw term loan A credit facilities, with the remainder
targeted to bolster the balance sheet via excess cash-on-hand in
support of general corporate purposes. As part of the transaction,
Spirit is also expected to terminate its $500 million revolving
credit facility. The company's SGL-3 speculative grade liquidity
rating remains unchanged. The ratings outlook remains negative.
RATINGS RATIONALE
The B2 corporate family rating continues to broadly reflect
Spirit's considerable scale as a strategically important supplier
in the aerostructures market, as well as the company's strong
competitive standing supported by its life-of-program production
agreements and long-term requirements contracts on key Boeing and
Airbus platforms. These considerations are tempered by a high
degree of platform and customer concentration, and Moody's
expectation that significant operational disruptions will persist
in the aftermath of the coronavirus pandemic, with fundamentally
lower 737 MAX and other important program production rates
extending well into 2023. The MAX is a particularly critical
program for Spirit, historically accounting for about 50% of total
company revenue and an even higher portion of earnings. Moody's
anticipates the company's already weak balance sheet characterized
by very high financial leverage will remain strained, with cash
flows and key credit metrics continuing to materially lag prior
expecations for several years.
The Ba2 rating assigned to Spirit's new first lien senior secured
debt is three notches above the B2 CFR, reflecting their seniority
and first lien security interest in substantially all assets of the
company. The B1 rating for the senior secured second lien notes
reflects their second priority claim in substantially all assets of
the company, behind the aforementioned first lien claims but ahead
of unsecured creditors. The Caa1 rating for the company's senior
unsecured notes reflects the unsecured nature of these claims.
Moody's notes the large and growing amount of secured obligations
and the likelihood that recovery rates for these unsecured
creditors will be well below that of secured creditors in a
distress scenario. The future incurrence of incremental secured
debt could also reduce the expected recovery rates of the second
lien notes and could result in downward rating pressure for such
debt in the future.
The spread of the coronavirus pandemic, the weakened global economy
and 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. With demand for new passenger aircraft intricately
linked to demand for air travel, production and deliveries of new
aircraft, including Boeing's 737 MAX but now also other commercial
variants (widebody aircraft, in particular), will be materially
lower than pre-coronavirus planned levels. Moody's regards the
coronavirus pandemic as a social risk under its ESG framework,
given the substantial implications for public health and safety.
The negative outlook incorporates Moody's expectation of
fundamentally lower production rates for the majority of Spirit's
commercial aerospace platforms over the next few years. This will
result in meaningful revenue and earnings pressure and an
across-the-board weakening of debt protection measures.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade could be prompted by a material recovery in
Boeing 737 MAX production rates to at least 30 per month, leading
to the consumption of the inventory of fuselages that Spirit has
stored on Boeing's behalf. An improved liquidity profile
characterized by expectations of consistent positive free cash
generation and substantial cash balances that are not earmarked for
acquisitions and/or absorption during the recovery period could
also warrant consideration of a prospective ratings upgrade.
Expectations of more steady and predictable operating performance,
more broadly, and less volatile earnings and cash flows, would also
be prerequisites for any ratings upgrade.
Factors that could lead to a ratings downgrade include additional
reductions in the MAX and/or other key aircraft program production
rates, or if the MAX grounding continues into 2021. Unanticipated
cancellations or deferrals of MAX orders by airline customers
beyond what is already contemplated, or an expectation of further
weakening in the earnings and/or cash flows of Spirit, could also
result in downward ratings pressure.
The following is a summary of the rating actions:
Issuer: Spirit Aerosystems, Inc.
Corporate Family Rating, affirmed B2
Probability of Default Rating, affirmed B2-PD
Senior Secured Regular Bond/Debenture, affirmed Ba2 (LGD2)
Senior Secured First Lien Debt, assigned Ba2 (LGD2)
Senior Secured Second Lien Regular Bond/Debenture, affirmed B1
(LGD3)
Senior Unsecured Regular Bond/Debenture, affirmed Caa1 (LGD5)
Outlook, remains Negative
The principal methodology used in these ratings was Aerospace and
Defense Methodology published in July 2020.
Headquartered in Wichita, Kansas, Spirit AeroSystems, Inc. is a
subsidiary of publicly traded (NYSE: SPR) Spirit AeroSystems
Holdings, Inc. The company designs and manufacturers aerostructures
for commercial aircraft. Components include fuselages, pylons,
struts, nacelles, thrust reversers and wing assemblies, principally
for Boeing but also for Airbus and others. Revenues for the last
twelve months ended June 30, 2020 were approximately $5.6 billion.
STERLING MIDCO: Moody's Alters Outlook on B3 CFR to Stable
----------------------------------------------------------
Moody's Investors Service affirmed Sterling Midco Holdings, Inc.'s
B3 Corporate Family Rating, B3-PD Probability of Default Rating,
and its B3 rating for its first lien senior secured credit facility
(revolver and term loan). The outlook has been changed to stable
from negative.
The affirmation of Sterling's ratings and stable outlook reflect
the stabilization of background screening volumes and Moody's
expectation that the hiring trends will begin to normalize over the
next several quarters such that Sterling's revenue and earnings
will recover meaningfully from the steep declines caused by the
COVID-19 pandemic. A portion of the cost actions taken in response
to the pandemic are expected to be permanent, which will further
support the positive trajectory of Sterling's earnings over the
next 12-18 months. Although COVID-19 has yet to be contained and
there are downside risks that global employment trends will remain
volatile over the coming quarters, Moody's anticipates that
Sterling's liquidity profile will remain resilient such that the
company will maintain total cash and revolver availability in
excess of $140 million over the next 12-15 months. Moody's
acknowledges that the company has a highly variable cost structure
and can adjust its operating and capital expenses in response to
diminished demand for screening services. Moody's also recognizes
that despite an improved operating profile, the company's financial
leverage will remain elevated over the next 12-18 months, which
limits further upward rating momentum at this time.
Affirmations:
Issuer: Sterling Midco Holdings, Inc.
Probability of Default Rating, Affirmed B3-PD
Corporate Family Rating, Affirmed B3
Senior Secured 1st Lien Bank Credit Facility, Affirmed B3 (LGD3)
Outlook Actions:
Issuer: Sterling Midco Holdings, Inc.
Outlook, Changed to Stable from Negative
RATINGS RATIONALE
Sterling's B3 CFR is constrained by: (1) its high debt-to-EBITDA
(Moody's adjusted and expensing all capitalized software
development cost) estimated at 10.6 times as of June 30, 2020,
which could increase considerably due to Moody's expectation for
lower earnings in FY 2020; (2) operating headwinds in the
background screening sector, including the risk for protracted
revenue and earnings contraction due to the COVID-19 pandemic and
uncertainties around the global macroeconomic outlook; (3)
operations within the highly competitive and fragmented market
segments; (4) modest operating scale and narrow product focus; (5)
moderate social and reputational risks; and (6) private equity
ownership which could lead to persistent elevated leverage levels.
Sterling's ratings are supported by (1) a strong global market
position in the employment and background screening services market
with a diversified customer base and low customer concentration;
(2) services that are deeply embedded into clients' human resource
functions and entail high switching costs; (3) capacity to manage
costs in the challenging operating environment; (4) good EBITDA
margin and (5) its expectation that the company will maintain good
liquidity over the next 12-15 months.
The stable outlook reflects Moody's expectation for an incremental
improvement in operating performance and liquidity stemming from
the gradual normalization of employment trends. The stable outlook
also reflects Sterling's demonstrated ability to quickly adjust
costs and maintain at least good liquidity.
Moody's expects Sterling to maintain good liquidity over the next
12-15 months, but liquidity is at risk for deterioration depending
on the duration of the pandemic and the pace of recovery. Sources
of liquidity consist of balance sheet cash of $57 million at June
30, 2020 as well as unfettered access to its $85 million revolving
credit facility due 2022. Free cash flow generation will be muted
as Sterling's earnings gradually recover to pre-pandemic levels
over the next 18 months. There are no financial maintenance
covenants under the first lien term loan but the revolving credit
facility is subject to a springing first lien leverage ratio of
6.75x when the amount drawn exceeds 35% of the revolving credit
facility. Moody's does not expect that Sterling will utilize its
revolver over the next 12-15 months; however, EBITDA deterioration
in the first half of FY 2020 will reduce the headroom under the
covenant over the near-term. The agreement also provides for
covenant cure rights. Sterling may exercise the option to cure the
breach with an incremental equity contribution for up to 5 times
prior to the maturity and up to two instances over four consecutive
quarters.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if Sterling's revenue and earnings
decline more severely than expected such that operating performance
not be positioned to return to 75% of 2019 EBITDA over the next
12-18 months. Additionally, ratings could be downgraded if
liquidity deteriorates for any reason.
The ratings could be upgraded is Sterling demonstrates good organic
growth, sustainably decreases in debt-to-EBITDA (Moody's adjusted
and expensing all capitalized software costs) sustainably below
6.0x, improves free cash flow meaningfully and maintains sufficient
liquidity with balanced financial policies.
Sterling Midco Holdings, Inc. through its operating subsidiary
Sterling Infosystems, Inc., provides pre- and postemployment
verification services including criminal background checks,
credential verification and employee drug testing. Sterling is
majority owned by affiliates of private equity sponsor Broad Street
Principal Investments (a subsidiary of Goldman Sachs). The company
generated revenue of approximately $462 million in revenue for the
LTM period ended June 30, 2020.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
SUMMIT MIDSTREAM: Tender Offers for Senior Notes Expire
-------------------------------------------------------
Summit Midstream Partners, LP reports the expiration and final
results of its previously announced cash tender offers by its
subsidiaries, Summit Midstream Holdings, LLC and Summit Midstream
Finance Corp., to purchase a portion of the Issuers' outstanding
5.75% Senior Notes due 2025 and outstanding 5.50% Senior Notes due
2022 in separate modified "Dutch Auctions" pursuant to the terms
and subject to the conditions set forth in the Offer to Purchase,
dated Aug. 25, 2020.
According to information provided by D.F. King & Co., Inc., the
Tender and Information Agent for the Tender Offers, approximately
$38,694,000 aggregate principal amount of the 2025 Notes were
validly tendered and not withdrawn at or below the price of $575.00
per $1,000 principal amount of the 2025 Notes and approximately
$33,539,000 aggregate principal amount of the 2022 Notes were
validly tendered and not withdrawn at or below the price of $700.00
per $1,000 principal amount of the 2022 Notes as of 11:59 p.m., New
York City time, on Tuesday, Sept. 22, 2020. The Issuers expect to
accept for purchase all such 2025 Notes for $575.00 per $1,000
principal amount of the 2025 Notes and all such 2022 Notes for
$700.00 per $1,000 principal amount of the 2022 Notes and expect to
make payment for the Tendered Notes on Sept. 24, 2020. All holders
of Notes tendered and not withdrawn at or before 5:00 p.m., New
York City time, on Wednesday,
Sept. 16, 2020 will also receive an early tender premium of $25.00
per $1,000 principal amount of such Notes in addition to the Tender
Offer Consideration. The total principal amount of 2025 Notes that
the Issuers have accepted for purchase represent approximately 9.8%
of the total principal amount of outstanding 2025 Notes as of Sept.
22, 2020, and the total principal amount of 2022 Notes that the
Issuers have accepted for purchase represent approximately 12.5% of
the total principal amount of outstanding 2022 Notes as of Sept.
22, 2020.
Upon settlement of the Tender Offers on Sept. 24, 2020, SMLP
expects to retire $72,233,000 aggregate principal amount of the
Notes at a weighted average discount of approximately 34%,
including the early tender premium and excluding accrued interest,
resulting in the remaining aggregate principal amounts of
$355,071,000 and $234,047,000 for the 2025 Notes and 2022 Notes,
respectively. After settlement of the Tender Offers, and including
the results from SMLP's previously disclosed debt buyback program
that commenced in May 2020, SMLP will have retired $210,882,000
aggregate principal amount of the Notes at a weighted average
discount of approximately 39%.
The complete terms and conditions of the Tender Offers are set
forth in the Offer to Purchase that was sent to the Holders. Copies
of the Offer to Purchase may be obtained from the Tender and
Information Agent, D.F. King & Co., Inc., at 800-967-5084 (toll
free) for noteholders, 212-269-5550 for banks and brokers or
smlp@dfking.com.
About Summit Midstream Partners
Summit Midstream Partners is a value-driven limited partnership
focused on developing, owning and operating midstream energy
infrastructure assets that are strategically located in
unconventional resource basins, primarily shale formations, in the
continental United States. SMLP provides natural gas, crude oil
and produced water gathering services pursuant to primarily
long-term and fee-based gathering and processing agreements with
customers and counterparties in six unconventional resource basins:
(i) the Appalachian Basin, which includes the Utica and Marcellus
shale formations in Ohio and West Virginia; (ii) the Williston
Basin, which includes the Bakken and Three Forks shale formations
in North Dakota; (iii) the Denver-Julesburg Basin, which includes
the Niobrara and Codell shale formations in Colorado and Wyoming;
(iv) the Permian Basin, which includes the Bone Spring and Wolfcamp
formations in New Mexico; (v) the Fort Worth Basin, which includes
the Barnett Shale formation in Texas; and (vi) the Piceance Basin,
which includes the Mesaverde formation as well as the Mancos and
Niobrara shale formations in Colorado. SMLP has an equity
investment in Double E Pipeline, LLC, which is developing natural
gas transmission infrastructure that will provide transportation
service from multiple receipt points in the Delaware Basin to
various delivery points in and around the Waha Hub in Texas. SMLP
also has an equity investment in Ohio Gathering, which operates
extensive natural gas gathering and condensate stabilization
infrastructure in the Utica Shale in Ohio. SMLP is headquartered in
Houston, Texas.
SMLP reported a net loss of $369.83 million for the year ended Dec.
31, 2019, compared to net income of $42.35 million for the year
ended Dec. 31, 2018. As of June 30, 2020, the Company had $2.58
billion in total assets, $1.71 billion in total liabilities, $78.56
million in mezzanine capital, and $796.24 million in total
partners' capital.
* * *
As reported by the TCR on Aug. 11, 2020, S&P Global Ratings raised
its issuer credit rating on Summit Midstream Partners L.P. (SMLP)
to 'CCC' from 'SD'. "We could lower our rating on SMLP if it
announced a restructuring of its general partner's debt or missed
an interest or amortization payment over the next 6 months," S&P
said.
SUR LA TABLE: Business Sold to Marquee Brands
---------------------------------------------
Jeremy Hill of Bloomberg News reports that Sur La Table Inc., the
bankrupt upscale cookware chain, sold for almost $90 million and a
promise to keep at least 50 stores open, according to court papers.
A joint venture between e-commerce investment firm CSC Generation
and Marquee Brands topped an opening bid from affiliates of
Fortress Investment Group at auction in early August.
Marquee Brands LLC, a leading global brand owner, marketer and
media company, announced Aug. 13 that it has signed a definitive
purchase agreement to acquire the SUR LA TABLE brand and all
related intellectual property. The acquisition will further build
upon the Home and Culinary portfolio within Marquee Brands,
complementing and lending new strategies and verticals in addition
to unique product opportunities to its leading Martha Stewart(R)
and Emeril Lagasse(R) brands.
"Sur La Table is a beloved brand which stands for quality. It
complements our strong Home and Culinary portfolio. Its storied
legacy along with its multi-channel platform featuring experiential
brick and mortar stores, a thriving e-commerce business, and
unparallel education offerings presented an incredibly compelling
opportunity. We believe a revitalized Sur La Table will thrive in
a post-Covid-19 retail environment," said Carolyn D'Angelo,
President of the Home Division atMarquee Brands. This marks the
12th brand in Marquee's portfolio increasing its reach to nearly $3
billion in annual retail equivalent sales.
Marquee Brands is owned by investor funds managed by Neuberger
Berman. Sur La Table was founded in 1972 and quickly became a
preeminent brand and curator of the finest culinary products and
tools to professional and home chefs alike.
In addition to serving as a critical retailer to global brands in
the sector, Sur La Table is also the largest provider of non-degree
cooking schools in the United States with over 650,000 students
growing at 19% per year serving as a pioneer in experiential retail
and unprecedented customer loyalty.
Marquee Brands has tapped CSC Generation for a long-term
partnership in developing innovative products and for their
operational expertise in the home sector across retail stores and
data driven ecommerce solutions. CSC Generation was founded in 2016
as a joint venture between Justin Yoshimura and Altos Ventures&
Panasonic and has been a key player in the continuity of several
historic brands.
"Sur La Table is a rare gem in its class and one we have been
watching for some time. It's an honor to be part of its future and
we couldn't be more excited about working with Marquee Brands as a
true leader in brand building and growth," said Justin Yoshimura,
Founder & CEO of CSC Generation. "This acquisition marks a new and
exciting chapter in Sur La Table's nearly 50-year history," said
Jason Goldberger, CEO of Sur La Table. "WithMarquee and CSC
Generation's combined sector depth and enthusiasm for the brand,
and our employees who truly believe in creating happiness through
cooking, I'm confident that Sur La Table is well-positioned to
build on what already makes us great and continue to deliver
the best products and experiences to our customers."Marquee
Brands was founded in 2014 and has quickly become renown for
responsible brand stewardship coupled with an inventive approach to
brand building and digital innovation.
"We are selective and careful to only add brands to our portfolio
that serve a real purpose, bring joy into the lives of our
customers, and help them celebrate life's special moments. In
partnering with industry leaders like CSC Generation, Sur La Table
will offer customers a seamless omnichannel shopping experience
guided by passionate and highly knowledgeable staff, technology,
and one-of-a-kind offerings. We've strived to lead the charge in
developing innovative, intuitive customer centered shopping
experiences to further engage and inspire. With this acquisition,
and CSC as a partner, we continue our journey in pushing the
boundaries of retail," said Michael DeVirgilio, President of
Marquee Brands.
Marquee Brands was advised by Jim Langdon and Mike Miller of Moore
& Van Allen.
About Sur La Table
Sur La Table, Inc. -- https://www.surlatable.com/ -- is a privately
held retail company that sells kitchenware products, including
cookware, bakeware, kitchen tools, knives, small appliances,
dining
and home products, coffee and tea, food, and outdoor cookware.
SLT Holdco, Inc. and affiliate, Sur La Table, Inc., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Tex.
Lead Case No. 20-18368) on July 8, 2020. The petition was signed
by Jason Goldberger, chief executive officer.
At the time of the filing, SLT Holdco was estimated to have assets
and liabilities of between $10 million to $50 million. Sur La
Table was estimated to have assets and liabilities of between $100
million to $500 million.
Michael D. Sirota, Esq., Warren A. Usatine, Esq., David M. Bass,
Esq., Jacob S. Frumkin, Esq. of Cole Schotz P.C., serve as counsel
to the Debtors. SOLIC Capital is the Debtors' financial advisor
and investment banker. A&G Realty Partners LLC acts as the
Debtors' real estate advisor. Great American Group, LLC and Tiger
Capital are the Debtors' sales consultant. Omni Agent Solutions
is
the Debtors' claims and noticing agent.
TAILORED BRANDS: Jos. A. Bank to Close Lafayette Location
---------------------------------------------------------
William Taylor Potte of The Advertiser reports that Lafayette's
Jos. A Bank store in River Ranch is closing after the store’s
parent company, Tailored Brands, filed for bankruptcy.
Tailored Brands, which also owns Men's Wearhouse, announced in July
that it planned to close 500 stores across the two brands. On Aug.
2, Tailored Brands filed for Chapter 11 bankruptcy protection.
Lafayette's Men's Wearhouse store, located in the Acadiana Mall,
was not on the list of closures.
Lafayette's Jos. A Bank store in River Ranch is closing after the
store's parent company, Tailored Brands, filed for bankruptcy.
Tailored Brands, which also owns Men's Wearhouse, announced in July
that it planned to close 500 stores across the two brands. On Aug.
2, Tailored Brands filed for Chapter 11 bankruptcy protection.
Lafayette's Men's Wearhouse store, located in the Acadiana Mall,
was not on the list of closures.
About Tailored Brands
Tailored Brands, Inc., (NYSE: TLRD) is an omni-channel specialty
retailer of menswear, including suits, formalwear and a broad
selection of polished and business casual offerings. It delivers
personalized products and services through its convenient network
of over 1,400 stores in the United States and Canada as well as its
branded e-commerce websites at http://www.menswearhouse.com/and
http://www.josbank.com. Its brands include Men's Wearhouse, Jos.
A. Bank, Moores Clothing for Men and K&G.
Tailored Brands reported a net loss of $82.28 million for the year
ended Feb. 1, 2020, compared to net earnings of $83.24 million for
the year ended Feb. 2, 2019. As of Feb. 1, 2020, the Company had
$2.42 billion in total assets, $2.52 billion in total liabilities,
and a total shareholders' deficit of $98.31 million.
On Aug. 2, 2020, Tailored Brands and its subsidiaries sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33900) on
Aug. 2, 2020. As of July 4, 2020, Tailored Brands disclosed
$2,482,124,043 in total assets and $2,839,642,691 in total
liabilities.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker L.L.P., Stikeman Elliot LLP and Mourant
Ozannes as co-bankruptcy counsel; PJT Partners LP as financial
advisor; Alixpartners, LLP as restructuring advisor; and A&G Realty
Partners, LLC as the real estate consultant and advisor. Prime
Clerk LLC is the claims agent.
TAILORED BRANDS: Men's Wearhouse Pasadena Will Remain Open
----------------------------------------------------------
Donovan McCray of Pasadena Now reports that Men's Wearhouse in
Pasadena, California will remain open despite a bankruptcy filing
last week by the store owners, Tailored Brands.
Tailored Brands is closing 500 stores as it restructures in
bankruptcy, including the nearby Jos. A. Bank, which is located on
South Lake Avenue. The local Men's Wearhouse store is also the
Avenue, at 406 S. Lake.
The fate of the company has been in limbo since June when reports
of a pending bankruptcy reached the mainstream press.
Rocked by the coronavirus, year-over-year sales of men's formal
clothing fell 74 percent between April and June, according to
GlobalData Retail.
At least nine retailers filed for bankruptcy protection last July
2020, including Ascena, owners of Lane Bryant, which earlier closed
its Pasadena store.
According to CNN, Tailored Brands filed for Chapter 11 bankruptcy
protection in a district court in Texas to implement a
restructuring plan that has the support of 75 percent of its
lenders.
The plan is expected to reduce its debt by at least $630 million
and ensure it can keep operating.
According to BankruptcyData.com, more than 20 private and public
retailers have declared bankruptcy this year.
About Tailored Brands
Tailored Brands, Inc., (NYSE: TLRD) is an omni-channel specialty
retailer of menswear, including suits, formalwear and a broad
selection of polished and business casual offerings. It delivers
personalized products and services through its convenient network
of over 1,400 stores in the United States and Canada as well as its
branded e-commerce websites at http://www.menswearhouse.com/and
http://www.josbank.com. Its brands include Men's Wearhouse, Jos.
A. Bank, Moores Clothing for Men and K&G.
Tailored Brands reported a net loss of $82.28 million for the year
ended Feb. 1, 2020, compared to net earnings of $83.24 million for
the year ended Feb. 2, 2019. As of Feb. 1, 2020, the Company had
$2.42 billion in total assets, $2.52 billion in total liabilities,
and a total shareholders' deficit of $98.31 million.
On Aug. 2, 2020, Tailored Brands and its subsidiaries sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33900) on
Aug. 2, 2020. As of July 4, 2020, Tailored Brands disclosed
$2,482,124,043 in total assets and $2,839,642,691 in total
liabilities.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker L.L.P., Stikeman Elliot LLP and Mourant
Ozannes as co-bankruptcy counsel; PJT Partners LP as financial
advisor; Alixpartners, LLP as restructuring advisor; and A&G Realty
Partners, LLC as the real estate consultant and advisor. Prime
Clerk LLC is the claims agent.
TAILORED BRANDS: Seek to Hire KPMG LLP as Tax Consultant
--------------------------------------------------------
Tailored Brands, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
KPMG LLP to provide them with tax compliance, accounting advisory,
valuation and tax consulting services.
The services KPMG will perform are as follows:
Tax Compliance Services
(a) prepare state and local transaction tax returns and
supporting schedules for the reporting periods, 8/2020 – 9/2021,
for the entities and jurisdictions to the Tax Compliance SOW;
(b) prepare tax returns for any state or local jurisdictions
and additional legal entities not identified in the Engagement
Letters to the Tax Compliance SOW that the Debtors approve in
writing;
(c) assist Debtors during engagement of a payment service
provider for transaction tax compliance payment services;
(d) provide the Debtors with copies of the completed tax
returns and supporting schedules for the Debtors’ review and
approval.
(e) respond to routine correspondence received from tax
authorities associated with the tax returns prepared by KPMG.
Out-of-Scope Compliance Services
The out-of-scope compliance related services include as
follows:
(a) non-routine notices;
(b) gross receipts tax return preparation;
(c) custom report development or processing;
(d) ad-hoc information requests;
(e) data translation or rule changes;
(f) manual importation of data;
(g) data corrections or data moves;
(h) amended returns requested by the Debtors; or
(i) data retrieval requests.
Accounting Advisory Services
(a) understand bankruptcy proceedings to identify the
accounting impacts;
(b) conduct research to support the accounting and reporting
conclusions reached in accordance with ASC 852;
(c) identify pre-emergence expenses, restructuring costs, and
losses for classification in a special category called
"reorganization items";
(d) consider the alternatives in approach, timing, order, and
adoption dates for fresh-start reporting, the alternatives for
on-going efficient processing of detailed accounting records, and
the potential approaches for updating detailed records to reflect
changes in values and the new accounting requirements following
emergence;
(e) evaluate whether the conditions in ASC 852 are met to
justify adoption of a new fresh-start basis by determining whether
there is a change in ownership before confirmation and after
emergence;
(f) consider issues related to recognizing the fair value of
obligations from guarantees;
(g) assess the degree to which top side adjustments and
disclosures are utilized to report on a fresh-start basis from the
date of emergence until such amounts are recorded to the Debtors’
detailed accounting records; and
(h) develop an approach to repopulating the Debtors' detailed
records with new fair values and asset lives providing electronic
files and assistance with updating fixed asset and other detailed
accounting records with the concluded fair values.
Fresh-Start Valuation Services
(a) read and identify potential issues with reconciling the
enterprise value approved by the court and adjustments necessary to
arrive at reorganization value, which is a concept under ASC 852;
(b) obtain and read the Debtors' historical financial
statements and detailed financial records, conduct interviews with
the Debtors' management, and conduct site visits as necessary, to
identify assets and liabilities by reporting unit;
(c) discuss the aforementioned assets and liabilities with the
Debtors' management to determine which assets and liabilities will
be valued by KPMG and those that are not within scope;
(d) prepare fair value estimates for each identified asset and
liability by reporting unit within KPMG's scope as of the date of
the Debtors' emergence from bankruptcy;
(e) determine the difference, if any, between reorganization
value and the fair value of the subject assets and liabilities
identified and valued by reporting unit;
(f) prepare fair value estimates for any equity method
investments or non-controlling interests and if required, allocate
the fair values to identified tangible and intangible assets;
(g) estimate remaining useful lives and provide amortization
schedules for the tangible and identified intangible assets; and
(h) issue a valuation report in accordance with the Mandatory
Performance Framework and the Application of the Mandatory
Performance Framework covering the fair value estimates of the
Subject Assets and Liabilities, goodwill and equity method
investments or non-controlling interests and business enterprise
values for each reporting unit of the Debtors.
Valuation Services for Tax Reporting Purposes
(a) provide consideration of the historical financial
condition and operating results of the subject interest being
valued;
(b) provide consideration of the economic and competitive
environment;
(c) provide consideration of the performance and market
position of the subject interest being valued relative to its
competitors and/or similar private and publicly traded companies;
(d) evaluate information gathered in interviews and
discussions with the Debtors' management to gain a more thorough
understanding of the nature and operations of the subject interest
being valued;
(e) evaluate business plans, future performance estimates or
budgets;
(f) estimate the FMV of any identified tangible and intangible
assets of the subject interest being valued if required or
requested by Management; and
(g) prepare a fair value analysis of certain long-lived assets
for the reporting units or asset groups that fail the
recoverability test utilizing the undiscounted cash flow analysis.
Tax Consulting Services
The firm also will provide general tax consulting services
with respect to matters that may arise for which the Debtors seek
KPMG's advice.
KPMG LLP will be paid at these rates:
Tax Consulting Services/Out-of-Scope Discounted Rate
Compliance Services
Partner/Managing Director $620
Director/Senior Manager $560
Manager $440
Senior Associate $320
Associate $240
Reorganization Services Discounted Hourly Rate
Partner/Managing Director $680
Director/Senior Manager $590
Manager $510
Senior Associate $400
Associate $280
According to KPMG's books and records, during the 90-day period
prior to the petition date, the firm received $236,317 from Debtors
for professional services performed and expenses incurred.
Michael Nesta, a partner at KPMG, disclosed in court filings that
the firm is a "disinterested person" as that term is defined in
section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael G. Nesta, Esq.
KPMG LLP
2323 Ross Avenue, Suite 1400
Dallas, TX 75201
Telephone: (214) 840-2000
About Tailored Brands
Tailored Brands, Inc., (NYSE: TLRD) is an omni-channel specialty
retailer of menswear, including suits, formalwear and a broad
selection of polished and business casual offerings. It delivers
personalized products and services through its convenient network
of over 1,400 stores in the United States and Canada as well as its
branded e-commerce websites at http://www.menswearhouse.com/and
http://www.josbank.com. Its brands include Men's Wearhouse, Jos.
A. Bank, Moores Clothing for Men and K&G.
Tailored Brands reported a net loss of $82.28 million for the year
ended Feb. 1, 2020, compared to net earnings of $83.24 million for
the year ended Feb. 2, 2019. As of Feb. 1, 2020, the Company had
$2.42 billion in total assets, $2.52 billion in total liabilities,
and a total shareholders' deficit of $98.31 million.
On Aug. 2, 2020, Tailored Brands and its subsidiaries sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33900) on
Aug. 2, 2020. As of July 4, 2020, Tailored Brands disclosed
$2,482,124,043 in total assets and $2,839,642,691 in total
liabilities.
The Hon. Marvin Isgur is the case judge.
Debtors have tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker L.L.P., Stikeman Elliot LLP and Mourant
Ozannes as co-bankruptcy counsel; PJT Partners LP as financial
advisor; Alixpartners, LLP as restructuring advisor; and A&G Realty
Partners, LLC as the real estate consultant and advisor. Prime
Clerk LLC is the claims agent.
TAILORED BRANDS: Seeks to Hire AlixPartners, Appoint CRO
--------------------------------------------------------
Tailored Brands, Inc. seeks authority from the U.S. Bankruptcy
Court for the Southern District of Texas to hire AlixPartners, LLP
as its financial advisor and designate Holly Etlin as chief
restructuring officer.
Ms. Etlin and AlixPartners will assist the Debtor with evaluating
and implementing strategic and tactical options through the
restructuring process.
The Debtor requires AixPartners to:
-- assist the Debtors in assessing restructuring options;
-- assist the Debtors with liquidity management and development
of a 13-week cash forecast;
-- collaborate in the design, negotiation, and implementation of
a restructuring strategy designed to maximize enterprise value,
taking into account the unique interests of key constituencies;
-- as necessary, and in coordination with counsel, compile
information to complete required court filings;
-- assist the Debtors with contingency planning, including
preparation of bankruptcy petitions, chapter 11 first day papers,
and operational readiness planning, as needed;
-- in connection with a bankruptcy, prepare (i) a Disclosure
Statement and Plan of Reorganization, (ii) a liquidation analysis,
(iii) statements of financial affairs and schedules of assets and
liabilities, (iv) a potential preferences analysis, (v) claims
analyses, and (vi) monthly operating reports and other regular
reporting required by the US Bankruptcy Court;
-- provide assistance to management in coordinating elements of
the restructuring, including but not limited to management of
various diligence requests and coordination of communication with
stakeholders and their representatives with respect thereto, and
process administration, as needed;
-- assist the Debtors with their communications and/or
negotiations with outside parties including the Debtors'
stakeholders, banks, and potential acquirers of the Debtors'
assets;
-- manage the "working group" professionals who are assisting the
Debtors in the reorganization process or who are working for the
Debtors' various stakeholders to improve coordination of their
effort and individual work product to be consistent with the
Debtors' overall restructuring goals;
-- provide day-to-day management of certain finance department
employees and their respective working groups as agreed upon by the
CEO and CRO;
-- strengthen the Debtors' core competencies in the finance
organization, particularly cash management, planning, general
accounting, and financial reporting information management;
-- develop the Debtors' revised business plan, and such other
related forecasts as may be required by the Debtors' lenders in
connection with negotiations or by the Debtors for other corporate
purposes;
-- assist the Company with such other matters as may be requested
that fall within AlixPartners' expertise and that are mutually
agreeable.
AlixPartners' current standard hourly rates for 2020 are:
Managing Director $1,000 – $1,195
Director $800 – $950
Senior Vice President $645 – $735
Vice President $470 – $630
Consultant $175 – $465
Paraprofessional $295 – $315
Pursuant to the Engagement Letter, the full-time services of Ms.
Etlin as CRO will be invoiced at a flat weekly rate of $60,000.
AlixPartners is a "disinterested person" within the meaning of
section 101(14) of the Bankruptcy Code, according to court
filings.
The firm an be reached through:
Holly Etlin
AlixPartners, LLP
909 Third Avenue
New York, NY 10022
Tel: +1 212 490 2500
Fax: +1 212 490 1344
Email: hetlin@alixpartners.com
About Tailored Brands
Tailored Brands, Inc., (NYSE: TLRD) is an omni-channel specialty
retailer of menswear, including suits, formalwear and a broad
selection of polished and business casual offerings. It delivers
personalized products and services through its convenient network
of over 1,400 stores in the United States and Canada as well as its
branded e-commerce websites at http://www.menswearhouse.com/and
http://www.josbank.com. Its brands include Men's Wearhouse, Jos.
A. Bank, Moores Clothing for Men and K&G.
Tailored Brands reported a net loss of $82.28 million for the year
ended Feb. 1, 2020, compared to net earnings of $83.24 million for
the year ended Feb. 2, 2019. As of Feb. 1, 2020, the Company had
$2.42 billion in total assets, $2.52 billion in total liabilities,
and a total shareholders' deficit of $98.31 million.
On Aug. 2, 2020, Tailored Brands and its subsidiaries sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33900) on
Aug. 2, 2020. As of July 4, 2020, Tailored Brands disclosed
$2,482,124,043 in total assets and $2,839,642,691 in total
liabilities.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker L.L.P., Stikeman Elliot LLP and Mourant
Ozannes as co-bankruptcy counsel; PJT Partners LP as financial
advisor; Alixpartners, LLP as restructuring advisor; and A&G Realty
Partners, LLC as the real estate consultant and advisor. Prime
Clerk LLC is the claims agent.
TNP 3745: Voluntary Chapter 11 Case Summary
-------------------------------------------
Debtor: TNP 3745 Pentagon Blvd., LLC
fka TNP 3745 Pentagon Blvd., DST
8875 Research Dr.
Irvine, CA 92618
Business Description: TNP 3745 Pentagon Blvd., LLC is engaged in
activities related to real estate.
Chapter 11 Petition Date: September 25, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-12686
Judge: Hon. Scott C. Clarkson
Debtor's Counsel: Leonard M. Shulman, Esq.
SHULMAN BASTIAN FRIEDMAN & BUII LLP
100 Spectrum Center Drive, Suite 100
Irvine, CA 92618
Tel: (949) 340-3400
Fax: (949) 340-3000
Email: LShulman@shulmanbastian.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Anthony W. Thompson, officer of managing
member of TNP 3745 Pentagon Blvd., LLC.
The Debtor stated it has no unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/JANLKUQ/TNP_3745_Pentagon_Blvd_LLC_a_Delaware__cacbke-20-12686__0001.0.pdf?mcid=tGE4TAMA
TNP SPRING: Seeks to Hire Colliers Nevada as Real Estate Broker
---------------------------------------------------------------
TNP Spring Gate Plaza, LLC, seeks authority from the U.S.
Bankruptcy Court for the Central District of California to employ
Colliers Nevada LLC as its real estate broker.
The Debtor owns certain real property consisting of commercial
office space and located at 1650 Spring Gate Lane, Las Vegas,
Nevada.
The Broker, on the Debtor's behalf, has examined the Property and
has agreed to negotiate a sale on behalf of the Debtor, to show the
Property to interested parties, to represent the Debtor as seller
in connection with the sale of the Property, and to advise the
Debtor with respect to obtaining the highest and best offer
available for the Property in the present market.
The Broker's commission in an amount of 2.5 percent of the gross
sales price of the interest to be transferred.
Mike J. Mixer, a broker with Colliers Nevada assures the court that
the firm does not hold or represent any interest adverse to the
Debtor or creditors of the Debtor's Estate; and is a disinterested
person as that term is defined in Bankruptcy Code Section 101 (14)
and used in Bankruptcy Code Section 327(a).
The broker can be reached through:
Mike J. Mixer
Colliers Nevada LLC
8760-8870 South Maryland Parkway
Las Vegas, NV 89123
Phone: 1-702-735-5700
About TNP Spring Gate Plaza
TNP Spring Gate Plaza, LLC, based in Irvine, CA, filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 20-11963) on July 10, 2020.
In its petition, the Debtor estimated $10 million to $50 million in
assets and $1 million to $10 million in liabilities. The petition
was signed by Anthony W. Thompson, officer of managing member of
TNP Spring Gate Plaza, LLC.
The Hon. Scott C. Clarkson presides over the case.
SHULMAN BASTIAN FRIEDMAN & BUI LLP, serves as bankruptcy counsel to
the Debtor. The Debtor tapped Colliers Nevada LLC as its broker.
TRANSOCEAN LTD: Lazard Hired to Advise on Strategic Alternatives
----------------------------------------------------------------
Irina Slav of Oil Price reported in August that that the world's
largest offshore rig operator Transocean Ltd. has hired Lazard to
advise it on strategic alternatives for its capital structure,
Bloomberg has reported, citing a company statement.
Transocean reported a net loss of $497 million for the second
quarter of the year, compared to a negative result of $392 million
for the first quarter. Still, the offshore rig operator also
reported an increase in contract drilling revenues for the second
quarter, at $930 million, up from $759 million for the first
quarter of the year.
The offshore drilling rig segment of the energy industry has been
among the ones hardest hit by the crisis, especially since it
hadn't yet had time to recover from the previous one. Offshore rig
operators already had an oversupply of rigs when the 2014-2016
crisis came, Bloomberg notes, and they have been struggling since
then as many upstream companies abandoned their offshore efforts in
favor of cheaper shale.
Some did not survive, such as Diamond Offshore Drilling, which
filed for Chapter 11 bankruptcy protection in April, as oil prices
slumped to $20 a barrel. With a debt pile of $2.6 billion,
according to the Financial Times, Diamond Drilling said the move
was motivated by the unprecedented oil price crash, saying in its
filing that conditions in the oil industry had "worsened
precipitously in recent months."
Then it was Noble Corp's turn. The drilling contractor filed for
bankruptcy last Friday, after failing to make a $15-million
interest payment on a loan. The company had accumulated a debt load
of some $4 billion.
"The fundamental problem that Noble faces is that its entirely
unsecured capital structure was built for a very different offshore
market environment, where activity levels and drilling dayrates
were high enough to support the significant capital that had been
deployed to expand and upgrade its fleet in response to the market
demand in this structurally different market," the company's chief
executive, Richard Baker, said.
It is perhaps in anticipation of more of the negative effects of
this changed market environment that Transocean is acting now with
its restructuring.
About Transocean
Transocean Ltd. is the world's largest offshore drilling contractor
based on revenue and is based in Vernier, Switzerland. The company
has offices in 20 countries, including Switzerland, Canada, United
States, Norway, Scotland, India, Brazil, Singapore, Indonesia and
Malaysia.
UNIT CORPORATION: Amended Joint Plan Confirmed by Judge
-------------------------------------------------------
Judge David R. Jones has entered findings of fact, conclusions of
law and order approving the Disclosure Statement and confirming the
Amended Joint Chapter 11 Plan of Reorganization of Unit Corporation
and its Debtor Affiliates.
The Plan, including the various documents and agreements in the
Plan Supplement, provides adequate and proper means for
implementation of the Plan.
The Plan is consistent with Section 1123(b)(3) of the Bankruptcy
Code. In accordance with section 363 of the Bankruptcy Code and
Bankruptcy Rule 9019, and in consideration of the distributions,
settlements, and other benefits provided under the Plan, except as
stated otherwise in the Plan, the provisions of the Plan constitute
a good-faith compromise of all Claims, Interests, and controversies
relating to the contractual, subordination, and other legal rights
that a Holder of a Claim or Interest may have with respect to any
Allowed Claim or Interest.
Article IX.E of the Plan describes certain releases granted by the
Debtors and their Estates. The Debtors have satisfied the business
judgment standard with respect to the propriety of the Debtor
Releases.
A full-text copy of the Plan Confirmation Order dated August 6,
2020, is available at https://tinyurl.com/y2jx5qaz from
PacerMonitor.com at no charge.
Counsel for the Debtors:
VINSON & ELKINS LLP
Harry A. Perrin
Paul E. Heath
Matthew J. Pyeatt
1001 Fannin Street, Suite 2500
Houston, TX 77002-6760
David S. Meyer
Lauren R. Kanzer
1114 Avenue of the Americas, 32nd Floor
New York, NY 10036
About Unit Corporation
Unit Corporation (NYSE- UNT) -- http://www.unitcorp.com/-- is a
Tulsa-based, publicly held energy company engaged through its
subsidiaries in oil and gas exploration, production, contract
drilling and natural gas gathering and processing.
On May 22, 2020, Unit Corporation and five affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. 20-32740) with a
pre-negotiated plan that reduces debt by $650 million.
Unit Corp. disclosed $2,090,052,000 in assets and $1,034,417,000 in
debt as of Dec. 31, 2019.
Vinson & Elkins L.L.P. is serving as legal advisor, Evercore Group
L.L.C. is serving as investment banker, and Opportune LLP is
serving as restructuring advisor to the Company. Prime Clerk LLC
is the claims agent, maintaining the page
https://cases.primeclerk.com/UnitCorporation
Weil, Gotshal & Manges LLP is serving as legal advisor and
Greenhill & Co., LLC, is serving as financial advisor to an ad hoc
group of holders of subordinated notes.
UNITI GROUP: Fitch Raises LT IDR to B+, Outlook Stable
------------------------------------------------------
Fitch Ratings has upgraded Uniti Group Inc.'s Long-Term Issuer
Default Rating (IDR) to 'B+' from 'CCC'. The Long-Term IDR of its
subsidiary, Uniti Fiber Holdings, Inc. (Uniti Fiber), has also been
upgraded to 'B+' from 'CCC'. The Rating Outlook on the IDRs has
been revised to Stable from Positive following the upgrade. In
addition, Fitch has assigned a Long-Term IDR of 'B+' to Uniti
Group, L.P. with a Stable Rating Outlook. The ratings for the debt
instruments at Uniti Group, L.P. and Uniti Fiber Holdings have been
upgraded as listed at the end of this release.
The upgrade and Stable Rating Outlook reflect materially lower risk
and expected improvement in Uniti's credit metrics as its major
tenant, Windstream Holdings, Inc., has emerged from bankruptcy in a
better financial position. The terms of a settlement agreement with
Windstream and its major creditors also lower Uniti's risk. The
economic terms of the previous master lease were not changed, but
the lease was separated into two structurally similar agreements
encompassing Windstream's incumbent and competitive local exchange
businesses. The new leases with Windstream Holdings were also
strengthened by adding Windstream Services, LLC and certain
subsidiaries as parties to the lease.
Additionally, the upgrade reflects Uniti's improvement in credit
metrics and liquidity owing to certain asset sales in 2020.
KEY RATING DRIVERS
Cash Flow and Revenue Stability: The new master leases in the
settlement agreement provide for Uniti's revenues and cash flows to
be very stable, owing to the fixed nature of long-term lease
payments from Windstream and the contractual nature of revenue
streams in Uniti's Fiber businesses. The master leases with
Windstream are expected to produce slightly more than $660 million
in cash revenue in 2020 and will grow slightly due to escalators
over time. Returns on Uniti's funding of growth capital investments
will be added to this amount. Uniti also derives approximately 36%
of revenue outside of the Windstream lease via leases to other
telecommunications entities and through contracts providing fiber
capacity to wireless carriers, enterprise and wholesale carriers
and government entities. Assets being acquired from Windstream
currently generate approximately $30 million in annual EBITDA, and
the additional fiber expands the scale of Uniti's leasable fiber by
approximately 90%.
Leverage Expected to Improve: Acquisitions in recent years ending
in 2019 have impacted Uniti's leverage. However, asset sales in
2020 are expected to lead to a decline in net leverage (net
debt/recurring operating EBITDA) to 6.0x as of YE20. With the
overhang of the Windstream bankruptcy process behind the company,
Fitch expects Uniti to finance future transactions such that net
leverage will remain relatively stable and should remain in the
high-5.0x range to approximately 6.0x over the longer term.
Liquidity Improvement: Pro forma liquidity as of June 30, 2020 was
approximately $550 million and was enhanced by 2Q20 and early 3Q20
asset sales that raised cash and enabled the full repayment of the
revolver. While Windstream's emergence from bankruptcy materially
reduces Uniti's risk and improves prospects for the company, risks
related to the coronavirus pandemic and a slowing economy have
increased. Moreover, Uniti's funding needs will increase to fund
the growth capital investments for Windstream per the terms of
their settlement agreement.
Tenant Concentration: The Windstream Holdings master leases provide
approximately 64% of Uniti's revenue. At the time of the spinoff,
nearly all revenue was from Windstream Holdings. In Fitch's view,
the improved diversification is a positive for the company's credit
profile; major customer verticals outside of Windstream consist of
the large wireless carriers, national cable operators, government
agencies and education.
Leased Assets' Importance to Windstream: Fitch believes Uniti's
assets are essential to Windstream's operations, and this has been
validated by the approval of the settlement agreement. In certain
markets, Windstream is a "carrier of last resort" from a regulatory
perspective and would require permission from state public utility
commissions and the Federal Communications Commission to cease
providing service in those markets.
Geographic Diversification: The company's geographic
diversification is solid given Windstream Holdings' geographically
diverse operations and the expanded footprint provided by
acquisitions since the spinoff.
DERIVATION SUMMARY
As the only fiber-based telecommunications REIT, Uniti currently
has no direct peers. Uniti is a telecom REIT that was formed
through the spinoff of a significant portion of Windstream
Services, LLC's fiber optic and copper assets. Windstream retained
the electronics necessary to continue as a telecommunications
service's provider. Fitch believes Uniti's operations are
geographically diverse, as they are spread across more than 30
states, while the assets under the master lease with Windstream
Holdings provide adequate scale.
Other close comparable telecommunications REITs are tower companies
that include American Tower ('BBB+'/Stable), Crown Castle
('BBB+'/Stable) and SBA Communications (not rated). The tower
companies lease space on towers and ground space to wireless
carriers and are a key part of the wireless industry
infrastructure. However, the primary difference is that the tower
companies operate on a shared infrastructure basis (multiple
tenants), whereas a substantial portion of Uniti's revenues are
derived on an exclusive basis under sale-leaseback transactions.
Uniti's leverage is higher than those of American Tower or Crown
Castle but lower than that of SBA.
In the Uniti Fiber segment, the most direct comparable company
would be Zayo Group Holdings (not rated). While expanding primarily
through acquisitions, Uniti Fiber has relatively small scale. The
business models of Uniti Fiber and Zayo are unlike the wireline
business of communications services providers such as AT&T
('A-'/Stable), Verizon ('A-'/Stable) or CenturyLink (now Lumen
Technologies; 'BB'/Stable). Uniti Fiber and Zayo are providers of
infrastructure, which may be used by communications service
providers to provide retail services (wireless, voice, data and/or
internet). Increasingly, Crown Castle is a large participant in the
fiber infrastructure business through a series of acquisitions. The
large communications services providers do self-provision; as such,
they may use a fiber infrastructure provider to augment their
networks.
Uniti's fiber acquisitions since the spinoff are a key credit
consideration, as they have reduced the concentration of revenues
and EBITDA from the Windstream master leases. Customers in the
fiber business include wireless carriers, enterprises and
governments.
Fitch believes aspects of Uniti's credit profile are similar to
cases in the gaming industry where there are single-tenant or
concentrated leases between operating companies (OpCos) and their
respective REITs (PropCos). Both Uniti and gaming REITs benefit
from triple net leases. Fitch believes the PropCos are better
positioned, as rents may continue uninterrupted through the
tenant's bankruptcy because such rents are an operating expense and
unlikely to be rejected as a result of the master lease structure.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- In 2020, Fitch expects revenues to decline due to the
full-year effect of asset sales in 2019 and 2020, as well as the
de-emphasis or winddown of certain aspects of its construction
business, equipment sales and the consumer competitive local
exchange carrier (CLEC). In 2021 and 2022, Fitch forecasts revenue
growth in the low single digits annually.
-- Fitch expects EBITDA margins to be slightly under 80%.
-- Fitch has reflected the terms of the settlement agreement with
Windstream, which included upfront cash consideration, funding of
certain Windstream growth capital improvements and cash
consideration for the purchase of certain fiber assets from
Windstream.
-- Fitch expects Uniti to target long-term net leverage in the
mid-5.0x-to-6.0x range; Fitch expects gross leverage to be in the
high-5.0x-to-low 6.0x range in the longer term. Leverage is
anticipated to come down modestly as dark fiber and small cell
projects are completed and the contracted revenues come online.
-- Fitch estimates 2020 net success-based capital spending will
be in the range of $260 million to $270 million, in line with
company public net success-based capex guidance for fiber and
leasing. Fitch expects net success-based capex to decline in 2020
on the completion of certain fiber and small cell projects. Capex
intensity is expected to be in the mid-30% range for Uniti Fiber in
2021 before declining gradually.
-- Fitch assumes a modest amount of equity is issued in the
forecast period to maintain net leverage in the 5.5x-to-6.0x
range.
Recovery
-- The recovery analysis assumes Uniti would be considered a
going concern in a bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim. The revolver is assumed to be fully drawn.
-- The going-concern EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganization EBITDA level, upon which Fitch
bases the valuation of the company. This leads to a
post-reorganization EBITDA estimate of $710 million.
-- The reduced EBITDA could come about by a combination of a rent
reset at Windstream and competitive pressures on Uniti's other
lines of business. While Windstream's recent bankruptcy did not
lead to a rent reset, should Windstream falter, Fitch believes that
the level of rent could be renegotiated to a lower level on a
mutually economic basis rather than having the leases unilaterally
being rejected by Windstream.
-- Post-reorganization valuation uses a 6.0x enterprise value
multiple. The 6.0x multiple reflects the high margin, large
contractual backlog of revenues and high asset value of the fiber
networks. Fitch uses this multiple for fiber-based infrastructure
companies, for which there have been historical transaction
multiples in the high single-digit range.
-- The multiple is in line with the range for telecom companies
included in Fitch's "Telecom, Media and Technology Bankruptcy
Enterprise Values and Creditor Recoveries" report, published April
29, 2020.
-- Other communications infrastructure companies, such as tower
operators, trade at equalized value (EV) multiples exceeding 20.0x.
The tower companies have lower asset risk and higher growth
prospects, leading to multiples in excess of 20.0x. Tower operators
have low churn, as switching costs are high for customers (to avoid
service disruptions).
-- The revolver is assumed to be fully drawn. The recovery
analysis produces Recovery Ratings of 'RR1' for the secured debt,
reflecting strong recovery prospects (100%); and 'RR5' for the
senior unsecured debt, reflecting the lower recovery prospects of
the unsecured debt given its position in the capital structure.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch's expectation that net debt/recurring operating EBITDA
is sustained below 5.5x, FFO leverage is sustained in the low-6.0x
range or lower and/or REIT interest coverage is 2.3x or higher.
-- Demonstrated access to the common equity market to fund growth
capital investments (GCI), other investments and/or acquisitions.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Net debt/recurring operating EBITDA is expected to be
sustained above 6.5x, FFO leverage is sustained above the low-7.0x
range and/or REIT interest coverage is 2.0x or lower.
-- In addition, if Windstream's rent coverage (EBITDAR - net
capex)/rents ratio approaches 1.2x, a negative rating action could
occur; however, Fitch will also consider Uniti's level of revenue
and EBITDA diversification at that time. In determining net capex,
Windstream's gross capex would be reduced by GCI funded by Uniti.
LIQUIDITY AND DEBT STRUCTURE
Improved Liquidity: As of June 30, 2020, Uniti had $88 million in
cash and $290 million of revolver availability on its $418 million
revolver, or total liquidity of $377 million. Following the close
of an asset sale on July 1, 2020, Uniti's total liquidity improved
to $550 million. Both the June 30 and July 1 positions are
materially improved from Dec. 31, 2019, when the company's only
available liquidity was provided by its $143 million cash balance,
as it had virtually no availability on its $575 million revolving
credit facility (due in 2022). An amendment in February 2020
increased the margin to a range of 4.75% to 5.25%.
In February 2020, Uniti issued $2.25 billion of 7.875% senior
secured notes due in 2025 and used the proceeds to pay down the
entire $2.05 billion outstanding on the term loan B and a portion
of the revolver.
Under the covenant reversion language that accompanied the senior
secured notes offering in February 2020, a provision was put in
place limiting the payment of future cash dividends to an amount
that does not exceed 90% of REIT taxable income (without regard to
the dividends-paid deduction and excluding any net capital gains)
while net leverage is above 5.75x.
Covenants: The principal financial covenants in the company's
credit agreement require Uniti to maintain a consolidated secured
leverage ratio of no more than 5.0x. The company can also obtain
incremental term-loan borrowings or increased commitments in an
unlimited amount as long as, on a pro forma basis, the consolidated
secured leverage ratio does not exceed 4.0x.
Capital Spending: In 2020, Fitch estimates net capex will range
from $250 million to $275 million, in line with company guidance
(net capex consists of gross capex less upfront payments from
customers).
Maturities: Uniti has no major maturities until 2022, when the
revolver matures, and in 2023, when $550 million of senior secured
notes and $1.11 billion of unsecured notes mature.
Other: Uniti established an at-the-market (ATM) common stock
offering program in June 2020 that allows for the issuance of up to
$250 million of common equity to keep the capital structure in
balance when funding capex, as well as to finance small
transactions.
REIT-required distributions reduce Uniti's FCF, although the
company has been able to reduce the dividend to relatively low
levels to maintain financial flexibility. Capital intensity varies
by business unit: in the leasing business capital intensity is
virtually non-existent, as capex is the responsibility of the
tenant. In the Fiber segment intensity is high, as the company is
in the process of completing projects in the Fiber segment.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
VERITAS FARMS: Commences $4 Million Private Offering
----------------------------------------------------
Veritas Farms, Inc. had commenced a $4.0 million private offering
to be conducted pursuant to Rule 506(b) of Regulation D promulgated
under the Securities Act of 1933, as amended.
In the Offering, Veritas Farms is seeking to offer and sell up to
8,000,000 Units at a price of $0.50 per Unit. Each Unit consists
of (ii) two shares of the Company's common stock; and (i) one
warrant, entitling the holder to purchase one share of the
Company's common stock at an exercise price of $0.50 at any time
through Aug. 31, 2025. In its discretion Veritas Farms may
increase the size of the Offering up to $6.0 million (12,000,000
Units).
Net proceeds of the Offering will be used for marketing and sales
efforts to build long-term brand equity; capital expenditures for
its new Aurora, Colorado manufacturing and distribution facility;
development of new strains of hemp, as well as additional products;
implementation of an enterprise resource system; and working
capital and other general corporate purposes.
About Veritas Farms
Veritas Farms is a vertically-integrated agribusiness focused on
producing, marketing, and distributing whole plant, full spectrum
hemp oils and extracts containing naturally occurring
phytocannabinoids. Veritas Farms owns and operates a 140-acre farm
in Pueblo, Colorado, capable of producing over 200,000 proprietary
full spectrum hemp plants containing naturally occurring
phytocannabinoids which can potentially yield a minimum annual
harvest of over 200,000 pounds of outdoor-grown industrial hemp.
Veritas Farms reported a net loss of $11.15 million for the year
ended Dec. 31, 2019, compared to a net loss of $3.83 million for
the year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$14.02 million in total assets, $4.36 million in total liabilities,
and $9.65 million in total stockholders' equity.
Prager Metis CPA's LLC, in Hackensack, New Jersey, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated May 14, 2020 citing that the Company has sustained
substantial losses from operations since its inception. As of and
for the year ended Dec. 31, 2019, the Company had an accumulated
deficit of $19,074,608, and a net loss of $11,147,608. These
factors, among others, raise substantial doubt about the ability of
the Company to continue as a going concern.
VERITY HEALTH SYSTEM: Prime Takes Over St. Francis, OKs Conditions
------------------------------------------------------------------
Prime Healthcare announced Aug. 13, 2020, that it has successfully
completed the acquisition of St. Francis Medical Center, signaling
a new era of service excellence and award-winning healthcare for an
essential medical facility in Los Angeles County.
Prime later announced Aug. 14, 2020, that it and the Attorney
General (AG) in partnership have entered into an agreement
regarding the St. Francis Medical Center AG conditions, which was
approved by the Court.
Prime agreed to additional conditions beyond those agreed to in the
APA in partnership with the AG, to benefit patients and
communities, including historic charity care policies that benefit
more patients in need and over $65.6 million in charity care and
community benefits.
Specifically, Prime has committed to increase its annual charity
care commitment from $8 Million to $9.35 Million (increase of $1.35
Million per year times 6 equals $8.1 Million) and increase its
annual community benefit commitment from $1,139,301 to $1,597,077.
This is a total commitment of $56.1 Million in charity care and
$9,582,462 in community benefit services over the six-year term of
the conditions.
Prime agreed to adopt one of the most generous charity care
policies in the State, with charity care eligibility going up to
400% of the federal poverty level and discounted care eligibility
up to 600% of the federal poverty level. This is in addition to
$9.35 Million in annual charity care, which exceeds the amount of
charity care provided by St Francis in FY 2019 which was $6.75
Million.
After an extensive four-month review process and public hearing,
the sale of the 384-bed Lynwood, CA hospital to Prime Healthcare
received final approval from the U.S. Bankruptcy Court for the
Central District of California and the California Attorney General,
ensuring that the mission of the hospital will continue with Prime.
Prime was chosen as the best and highest bidder to acquire St.
Francis based on a significant financial commitment of over $350
million, unique ability to turn around struggling hospitals,
clinical quality assurances and a commitment to continue the
mission of the hospital. Prime will continue service lines, charity
care and community benefits while investing millions in technology,
systems and infrastructure improvements to modernize the delivery
of care, investments which are already underway. The purchase by
Prime from Verity Health provides the stability and clinical
expertise needed for this era of evidence-based medicine and
patient choice.
"Prime Healthcare is honored to continue the legacy of St. Francis
Medical Center, an indispensable community partner comprised of
committed doctors, nurses, and staff dedicated to saving lives and
serving all those in need," said Sunny Bhatia, MD, CEO of Region I
of Prime Healthcare. "Prime is prepared to lead St. Francis into a
bright future and we are grateful for the opportunity along with
the support we have received from the community."
St. Francis Medical Center, located in Southeast Los Angeles, is a
historic acute care hospital with one of the largest and busiest
emergency departments and Level II trauma centers in Los Angeles
County, treating nearly 64,000 emergency patients and more than
2,000 trauma patients a year.
"Prime has remained deeply committed to St. Francis and was chosen
as the most capable and only bidder with the fortitude to support
the hospital in its time of greatest need, despite the pandemic,
economic impact on hospitals and uncertain future," said Rich
Adcock, CEO of Verity Health. "We have been impressed by the
unwavering dedication and talent of the Prime team, and we are
confident that Prime will preserve and improve upon the St. Francis
legacy for future generations, as it has done for hospitals and
communities time and time again across this nation."
The sale of the hospital to Prime Healthcare received support from
St. Francis staff and physicians, as well as elected officials in
Los Angeles County. "I can think of no other health system with
the expertise, resources and commitment to quality to take on the
crucial task of preserving St. Francis for the South Los Angeles
community," said Inglewood Mayor James Butts, whose own community
hospital, Centinela Hospital Medical Center, was on the brink of
closure before being saved by Prime in 2007. "Centinela Hospital
Medical Center is today one of the leading hospitals in Los Angeles
County, more than fulfilling the promises Prime Healthcare made
years ago to our community."
Attorney General Xavier Becerra noted that his approval of the sale
of St. Francis to Prime Healthcare "protect(s) access to care for
the Los Angeles communities served" by St. Francis. He further
noted, "The COVID-19 public health crisis has brought home the
importance of having access to lifesaving hospital care nearby in
our communities. St. Francis Medical Center is not just an asset,
it is an indispensable neighbor, it is the workers who serve the
patients, and the doctors who save lives. We conditionally approve
this sale to keep it that way."
"St. Francis Medical Center and Prime Healthcare are both top tier
health care institutions, and the completion of the sale cements a
win-win for patients, employees, and the community," stated St.
Francis Board Chair Charles (Chad) Druten, Jr. "As a member of the
Prime Healthcare family, St. Francis has a strong new network of
systems and resources that will enable it to elevate and expand
services and maintain its prominence as a place that proudly
delivers outstanding, state-of-the-art, compassionate care."
The bankruptcy judge preliminarily approved the Asset Purchase
Agreement (APA) for the sale from Verity Health to Prime in early
April. Under the agreement, Prime acquired St. Francis for a net
consideration of over $350 million, including over $250 million
cash. In addition, Prime has committed to invest $47 million in
capital improvements. Prime has already begun executing on its
commitment by installing best-in-class technology and systems, such
as Epic, an integrated electronic medical records platform,
Omnicell systems for automated medication dispensing, and new
interventional radiology and cardiology capabilities, all of which
will improve the patient and caregiver experience.
Prime's purchase bid was the highest, best and only qualified offer
received by the Bankruptcy Court, which praised the bid for
securing the mission of St. Francis. The court also determined that
any further delays in the bidding process could have resulted in
the hospital becoming insolvent. Preserving jobs that would
otherwise be lost and saving the hospital from impending
insolvency.
Prime not only offered the highest purchase price, but also
committed to maintaining all essential care, trauma care, charity
care and community benefit programs, while continuing St. Francis's
long-standing mission of service. Prime plans to expand service
lines based on community need.
"With the acquisition of St. Francis Medical Center by Prime
Healthcare, our community can be confident that St. Francis Medical
Center will always be available for them when they need us,"
said Maxine Anderson, MD, St. Francis Chief of Staff. "Prime has
already substantially completed the installation of a new medical
record system and will continue to offer comprehensive healthcare
services that include outpatient services to basic emergency
services, women's services, stroke/STEMI services, trauma services,
and more. We look forward to continuing these key services with
Prime Healthcare’s acquisition and leadership."
Substantially all of St. Francis’s employees have been retained,
and Prime has successfully reached initial three-year collective
bargaining agreements with the hospital’s labor unions, SEIU and
UNAC, which represent more than 85 percent of the hospital’s
employees.
Prime Healthcare is nationally recognized for its success in saving
financially distressed hospitals and its clinical excellence, with
its hospitals named among the nation's 100 Top hospitals' 53 times.
In addition, Prime has received more Patient Safety Excellence
Awards than any other health system in the country for five
consecutive years (2016-2020), according to Healthgrades.
With the addition of St. Francis Medical Center, Prime Healthcare
owns and operates 46 hospitals in 14 states with nearly 40,000
employees and physicians
About Verity Health System
Verity Health System -- https://www.verity.org/ -- operates as a
non-profit health care system in the state of California, with
approximately 1,680 inpatient beds, six active emergency rooms, a
trauma center, and a host of medical specialties, including
tertiary and quaternary care. Verity's two Southern California
hospitals are St. Francis Medical Center in Lynwood and St. Vincent
Medical Center in Los Angeles. In Northern California, O'Connor
Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton
Medical Center in Daly City and Seton Coastside in Moss Beach are
part of Verity Health. Verity Health also includes Verity Medical
Foundation.
With more than 100 primary care and specialty physicians, VMF
offers medical, surgical and related healthcare services for people
of all ages at community-based, multi-specialty clinics
conveniently located in areas served by the Verity hospitals.
Verity Health System was created in a transaction approved by
California Attorney General Kamala Harris and completed in December
2015.
Verity Health System of California, Inc., and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Lead Case No. 18-20151) on Aug. 31, 2018. In the petition
signed by CEO Richard Adcock, Verity Health estimated assets of
$500 million to $1 billion and liabilities of $500 million to $1
billion.
Judge Ernest M. Robles oversees the cases.
The Debtors tapped Dentons US LLP as their bankruptcy counsel;
Berkeley Research Group, LLC, as financial advisor; Cain Brothers
as investment banker; and Kurtzman Carson Consultants as claims
agent.
The official committee of unsecured creditors formed in the case
retained Milbank, Tweed, Hadley & McCloy LLP as counsel.
VERNON 4540: Brent Carrier-Owned Entity Sent to Chapter 11
----------------------------------------------------------
Bill Heltzel of West Fair Online reports that real estate developer
Brent Carrier sent an entity he manages to Chapter 11 bankruptcy.
Brent Carrier, a Larchmont real estate developer who has been mired
for years in disputes over a Queens project, signed a Chapter 11
petition for Vernon 4540 Realty LLC (Bankr. S.D.N.Y. Lead Case No.
7:20-bk-22919) in White Plains, New York, on Aug. 5, 2020.
The company, based at Carrier's home in Larchmont, estimated assets
and liabilities between $10 million and $50 million, but it has yet
to file several bankruptcy reports that would detail its finances.
In 1997, Carrier founded CRE Development, a Queens company that
developed and leased properties, his personal website states, "from
Boston to D.C., all the way to California and Florida."
The company was dissolved in 2016, according to a state Division of
Corporations record.
In 2013, Carrier partnered with Simon Baron Development to build a
28-story retail and apartment tower at 45-40 Vernon Blvd. in Long
Island City on property with a dilapidated structure previously
used by the Paragon Paint Co. and on contaminated land.
Local residents opposed the project, arguing that the scale of the
proposed building threatened the character of the neighborhood's
small homes, low-rise buildings and small businesses.
The developers estimated that cleaning up the property would cost
$30 million.
Last year, New York County Supreme Court ordered the seizure of
$1.9 million in Brownfield tax credits, to which Carrier and Vernon
4540 Realty were entitled, to ensure a pending outcome in an
arbitration case.
"Following years of litigation and a related arbitration
proceeding," CSC 4540 LLC, a Simon Baron Development affiliate,
filed a new petition with the same court on June 18 to enforce the
seizure.
"Carrier is adept at dissipating, concealing and/or absconding with
money he has taken from the LLC," CSC alleges. "He has admitted
that he is insolvent and that his wholly-owned entity dissipated
every last dollar that he diverted from the LLC, in direct
violation of a previous temporary restraining order."
Carrier has not yet answered the allegations.
But three years ago, in an unrelated lawsuit, he vigorously
asserted his integrity. A Russian model had sued him, claiming that
he had kicked her out of a Chelsea apartment he owned when she
stopped sleeping with him.
Carrier countersued, alleging slander. He stated that he had
allowed the woman to live in the apartment but he denied any
intimacies.
He has "a reputation for honesty and uprightness in his dealings
with the public," according to his counterclaims, and he has "a
good reputation for honesty in the real estate development
business."
The cost of his legal battles are indicated in the Vernon 4540
Realty bankruptcy petition.
He lists nearly $2.3 million in legal fees to six law firms, all of
which he disputes.
Overall, he lists $9.6 million in unsecured claims, including $6.9
million to the Quadrum Property Fund and $450,000 to CSC. He also
claims that his LLC owes him $1.5 million.
The petition lists no assets.
Vernon 4540 Realty is represented by Harrison attorney H. Bruce
Bronson.
VILLA ABRIGO: U.S. Trustee Objects to Disclosure Statement
----------------------------------------------------------
The United States Trustee for Region 21 objects to the disclosure
statement and proposed plan filed by debtor Villa Abrigo at
Celeste, LLC, and in support, states as follows:
* The Debtor is delinquent with the second quarter, 2020 U.S.
Trustee’s fees.
* The plan proposes to file a motion to value the real estate.
The U.S. Trustee cannot understand why the Debtor failed to file
the motion and resolving the issue prior to filing the disclosure
statement.
* The U.S. Trustee believes the Debtor does not operate a
restaurant and has no claims owed to Colonial Surety.
* The U.S. Trustee questions whether the proposed plan is
actually a liquidating plan because the Debtor will not actually
reorganize after confirmation. To the extent the Court agrees, the
Debtor would not be entitled to a discharge under 11 U.S.C. Sec.
1141(d)(3).
* The disclosure statement fails to contain sufficient information
and projections relevant to the creditors' decision to accept or
reject the proposed plan.
A full-text copy of the U.S. Trustee's objection to disclosure
statement dated August 7, 2020, is available at
https://tinyurl.com/y5b6hx9x from PacerMonitor.com at no charge.
About Villa Abrigo at Celeste
Villa Abrigo at Celeste, LLC, a privately held company based in
Delray Beach, Fla., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-10285) on Jan. 9,
2020. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Judge Erik P. Kimball oversees the case. The Debtor is
represented by Brian K. McMahon, Esq.
VOYAGER AVIATION: Moody's Cuts CFR to B3 & Unsec. Rating to Caa2
----------------------------------------------------------------
Moody's Investors Service downgraded Voyager Aviation Holdings,
LLC's corporate family rating to B3 from B1 and its long-term
senior unsecured rating to Caa2 from B2.
The disruption in air travel globally is related to the coronavirus
pandemic, which Moody's regards as a social risk under its
environmental, social and governance (ESG) framework, given the
substantial implications for public health and safety.
Downgrades:
Issuer: Voyager Aviation Holdings, LLC
LT Corporate Family Rating, Downgraded to B3 from B1
Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2 from
B2
Outlook Actions:
Issuer: Voyager Aviation Holdings, LLC
Outlook, Remains Negative
RATINGS RATIONALE
Moody's has downgraded Voyager's ratings to reflect the rising
refinancing risk that the company has with respect to the August
2021 maturity of its $415 million senior unsecured notes,
considering the company's uncertain access to debt capital amid the
aviation sector downturn and limited alternate liquidity. Voyager
management has reported that it is pursuing various alternatives to
enhance the company's cash position and address the upcoming
maturity, including potential additional secured and unsecured
financing arrangements. Most of Voyager's funding is provided by
amortizing non-recourse secured debt whose debt service is
supported by the cash flows generated by pledged aircraft and
associated leases. However, the company's small fleet of 18
aircraft, the collateral pledge of all of its aircraft, as well as
lenders' shift to more conservative loan underwriting in the
current weakened operating environment likely limits Voyager's
ability to extract sufficient funds from secured financing and
other alternatives to repay the senior notes at maturity. Unlike
higher rated aircraft leasing companies, Voyager has no committed
backup line of credit from which it can borrow to cover liquidity
contingencies. Additionally, it is undetermined whether Voyager's
sponsor Centerbridge Partners would consider providing capital
support to strengthen Voyager's liquidity position. Voyager's
limited liquidity alternatives raise the risk that holders of the
company's senior notes could be subject to a distressed exchange of
the notes, in Moody's view.
The downturn in the airline industry has weakened the market value
of commercial aircraft, eroding the current value of Voyager's
residual interest in the aircraft it has pledged to secured
lenders, which constitutes the primary source of asset coverage for
Voyager's senior notes. As a result of the weakened asset coverage,
Moody's has downgraded Voyager's senior unsecured notes by three
notches while downgrading its corporate family rating by two
notches.
Voyager's B3 corporate family and Caa2 long-term senior unsecured
ratings reflect the company's small competitive scale compared to
rated peers, higher aircraft and airline lessee concentrations, and
limited alternate liquidity but also the relatively low average age
and long average remaining lease term of the company's aircraft
fleet and the stronger average credit quality of the company's
airline customers. To date, Voyager has made proportionately fewer
rent deferral accommodations to its customers than other Moody's
rated aircraft leasing companies. A high percentage of Voyager's
customers are "flag" carriers that have received capital support
and should better endure the downturn in air travel compared to
weaker competitors. However, the company continues to work with
certain customers whose rental payments are in arrears regarding
formal rental relief, representing a material proportion of
Voyager's revenues. Secured lenders on the aircraft appear also
likely to temporarily relax debt service requirements on the
aircraft in question, mitigating the decline in Voyager's rent
collections. These factors highlight the above average credit
quality of Voyager's airline customers but also its high customer
concentrations.
Voyager's $1.8 billion fleet of 18 aircraft at 30 June 2020 had an
average age of 5.4 years, which compares favorably with other
aircraft leasing companies, and a weighted average remaining lease
term of 6.8 years, consistent with the rated peer median. The
company's aircraft include recent vintage Boeing 777 and Airbus
A330 passenger and Boeing 747 freighter models that are deployed in
core service by the respective airline and cargo operators, but
whose user base is smaller than widely operated narrow-body
aircraft. Moody's believes that the current downturn has elevated
the residual value and remarketing risks of even newer wide-body
aircraft. Moody's expects that recovery in air travel volumes will
materially strengthen toward 2019 levels in 2023, but that recovery
in utilization of wide-body aircraft will lag utilization
improvements of narrow body aircraft.
Voyager's outlook remains negative, based on Moody's expectation
that the downturn in airline sector will weaken the company's
access to debt capital to refinance its 2021 senior notes maturity
and that the company's cash flow will be pressured by the weakened
financial condition of its airline customers.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. The rating action reflect the negative effects on
Voyager of the breadth and severity of the shock, and the
deterioration in credit quality, profitability, capital and
liquidity it has triggered.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook indicates that rating upgrades are unlikely
over the next 12-18 months. However, the outlook can be stabilized
and the ratings could be upgraded if the company: 1) demonstrates
that it has sufficient liquidity to repay its August 2021 senior
notes as well as meet other operating and financial liquidity
requirements over the outlook horizon; 2) improves fleet and
customer diversification; 3) generates consistently positive
profitability; and 4) reduces its ratio of debt to tangible net
worth to less than 3.5x.
Moody's could downgrade Voyager's ratings if the company: 1) is not
able to refinance or accumulate sufficient funds to repay its
August 2021 $415 million senior notes; 2) significantly increases
its debt-to-tangible net worth ratio; or 3) experiences a
deterioration operating prospects including from a disruption in
air travel and weakening of airline credit quality.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
WALL STREET: Class VII Unsecureds to be Paid in Full over 11 Years
------------------------------------------------------------------
Wall Street Productions, Ltd. (WSPL) filed a First Amended Combined
Plan of Reorganization and Disclosure Statement dated August 7,
2020.
Holders of Allowed Class VII Unsecured Claims will be paid 100% on
such Claims. They will be paid interest on such claims in the
amount of 4.5% per annum. The members of the class will receive
132 equal monthly cash payments equal in the aggregate to the
amount of each Allowed Claim. The first monthly payment will begin
on the one-year anniversary date that is after the Effective Date.
The estimated total monthly payment to the Holders of Unsecured
Claims, including 1/132 of the simple interest accrued during the
first 12 months of the plan, is $4,196.63.
Class VIII consists of the Holders of Allowed Unsecured Claims of
Timothy Rochon against WSPL totaling $205,936. Holders of Allowed
Class VIII Unsecured Claims will be paid 100% on such Claims and
payments shall commence after payment of all other claims to be
paid pursuant to this plan. The Claimants of this Class will
receive equal monthly cash payments equal in the aggregate, to the
amount of each Allowed Claim.
Class IX Interest Holders shall retain their Interests in the
Reorganized Debtor and their rights shall remain the same.
A full-text copy of the First Amended Combined Plan and Disclosure
Statement dated August 7, 2020, is available at
https://tinyurl.com/y37vry47 from PacerMonitor.com at no charge.
The Debtor is represented by:
GUDEMAN & ASSOCIATES
Edward Gudeman
Brian A. Rookard
1026 W. Eleven Mile Rd.
Royal Oak, MI 48067
Tel: (248) 546-2800
About Wall Street Productions
Wall Street Productions, LTD, d/b/a Wall Street Music; d/b/a Wall
Street Productions; and d/b/a Museum Magic, is a promotional video
production specialist in Southfield, Michigan.
Wall Street Productions sought Chapter 11 protection (Bankr. E.D.
Mich. Case No. 19-53212) on Sept. 16, 2019, in Detroit, Michigan.
In the petition signed by Timothy Rochon, president, the Debtor
disclosed $64,442 in total assets and $1,015,719 in total
liabilities as of the Petition Date. The petition was signed by
Timothy Rochon, president. The case is assigned to Judge Phillip
J. Shefferly. GUDEMAN & ASSOCIATES, P.C., is the Debtor's counsel.
WESTERN HOST: Puerto Rico Tourism Objects to Disclosure Statement
-----------------------------------------------------------------
Puerto Rico Tourism Company objects to the approval of the Amended
Disclosure Statement filed by debtor Western Host Associates, Inc.
It asserts that:
* The Debtor failed to include the entire Puerto Rico Tourism
Company's claim as a priority tax claim subject to payment under
Section 507(a)(8) of the Bankruptcy Code. The Puerto Rico Tourism
Company's entire claim of $373,603 constitutes a prepetition
priority claim under Section 507(a)(8)(C) of the Bankruptcy Code
and must be paid in its entirety under the plan.
* The Puerto Rico Tourism Company has not agreed to a different
treatment of its claim. Therefore, it is entitled to "a total
value, as of the effective date of the plan, equal to the allowed
amount of such claim".
* The Amended Disclosure Statement filed by Debtor should also
be rejected because it fails to provide adequate information for
the Puerto Rico Tourism Company to make an informed judgment as to
the viability of the plan of reorganization proposed by Debtor.
* The Debtor has also failed to give any concrete information as
to the status of the proceedings, including a timeline for
discovery and potential resolution. Without this information, it
is impossible for the Puerto Rico Tourism Company to properly
evaluate Debtor's proposal that it will pay $88,000 to the Puerto
Rico Tourism Company within 60 days of the "second disbursement".
A full-text copy of Puerto Rico Tourism's objection dated August 6,
2020, is available at https://tinyurl.com/yy84vvra from
PacerMonitor.com at no charge.
Puerto Rico Tourism is represented by:
Giselle López Soler
Email gls@lopezsolerlaw.com
LAW OFFICES OF GISELLE LÓPEZ SOLER
Rd. 19 1353
Guaynabo, PR 00966
Tel. (787) 667-0941
About Western Host Associates
Western Host Associates, Inc., owns a four-story commercial hotel
building located at 202 San Jose Street, Old San Juan, Puerto
Rico.
The hotel is currently non-operational and is valued by the company
at $1.35 million.
The company previously sought bankruptcy protection on Nov. 14,
2012 (Bankr. D.P.R. Case No. 12-09093) and on May 19, 2011 (Bankr.
D.P.R. Case No. 11-04152).
Western Host Associates sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.P.R. Case No. 18-02696) on May 15, 2018.
In the petition signed by Luis Alvarez, president, the Debtor
disclosed $1.36 million in assets and $4.82 million in
liabilities.
Judge Brian K. Tester oversees the case.
The Debtor tapped Gratacos Law Firm, PSC, as its legal counsel and
the Law Offices of Jose R. Olmo-Rodriguez, as special counsel.
WILDCATTER DISPOSAL: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: Wildcatter Disposal, LLC
dba Borden County Waste Disposal (a Wildcatter Company)
320 Decker Road
Irving, TX 75062
Business Description: Wildcatter Disposal, LLC offers remediation
and other waste management services.
Chapter 11 Petition Date: September 25, 2020
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 20-32455
Judge: Hon. Harlin Dewayne Hale
Debtor's Counsel: Jason P. Kathman, Esq.
PRONSKE & KATHMAN, P.C.
2701 Dallas Parkway
Suite 590
Plano, TX 75093
Tel: (214) 658-6500
E-mail: jkathman@pronskepc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Randy Edwards, manager.
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/NV5OLQA/Wildcatter_Disposal_LLC__txnbke-20-32455__0001.0.pdf?mcid=tGE4TAMA
WILDWOOD VILLAGES: Seeks to Hire Shapiro Blasi as Legal Counsel
---------------------------------------------------------------
Wildwood Villages, LLC seeks authority from the US Bankruptcy Court
for the Middle District of Florida to hire to employ Shapiro Blasi
Wasserman & Hermann, P.A., as its attorney.
Wildwood Villages requires Shapiro Blasi to:
a. give advice to the Debtor with respect to its powers and
duties as a debtor in possession and the continued management of
its financial affairs and business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the rules of the Court;
c. prepare motions, pleadings, orders, applications, adversary
proceedings, and other legal documents necessary in the
administration of the case;
d. protect the interests of the Debtor in all matters pending
before the Bankruptcy Court in the Chapter 11 case; and
e. represent the Debtor in negotiation with its creditors in
the preparation of a plan and disclosure statement.
Shapiro Blasi will be paid based upon its normal and usual hourly
billing rates. The firm will also be reimbursed for reasonable
out-of-pocket expenses incurred.
Matthew S. Kish, partner of Shapiro Blasi Wasserman & Hermann,
P.A., assured the Court that the firm is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code
and does not represent any interest adverse to the Debtor and its
estates.
Shapiro Blasi can be reached at:
Matthew S. Kish, Esq.
SHAPIRO BLASI WASSERMAN & HERMANN, P.A.
7777 Glades Road, Suite 400
Boca Raton, FL 33434
Tel: (561) 477-7800
Fax: (561) 477-7722
E-mail: mkish@sbwh.law
About Wildwood Villages, LLC
Wildwood Villages, LLC is engaged in activities related to real
estate.
Wildwood Villages, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-02569) on August 28, 2020. The petition was signed by Jonathan
Woods, manager. The Debtor disclosed $3,150,861 in assets and
$3,428,386 in liabilities. Matthew S. Kish, Esq., Esq. at SHAPIRO
BLASI WASSERMAN & HERMANN, PA represents the Debtor as counsel.
WINDSTREAM HOLDINGS: Completes $4 Billion Restructuring
-------------------------------------------------------
Windstream Holdings, a communications and software company, on
Sept. 21, 2020, announced that the company has successfully
completed its financial restructuring process as a privately held
company. Through this process, the company has reduced its debt by
more than $4 billion, or approximately two-thirds, and now has
access to approximately $2 billion in new capital. With an
enhanced capital structure, Windstream is now well-positioned to
continue making substantial network and software investments, fuel
sustainable growth and drive value for all its stakeholders.
"Today marks the start of a new era for Windstream as an even
stronger, more competitive company," said Tony Thomas, president
and chief executive officer of Windstream. "With the completion of
our financial restructuring, we now have an enhanced balance sheet
and a robust capital investment program to expand 1 Gig Internet
service in rural America and maintain our product and software
leadership in SD-WAN and UCaaS for enterprise customers. We are
also pleased to continue our strategic partnership with Uniti Group
and expand our mutually beneficial relationship. With the support
of our new owners and current operational momentum, Windstream will
continue advancing our long-term growth objectives while providing
our customers with quality and reliable services."
Mr. Thomas continued, "I would like to thank our customers, vendors
and business partners for their ongoing support throughout this
process. I would also like to extend my deepest gratitude to the
Windstream team for their dedication to our customers and continued
commitment to delivering essential telecommunications services
during this unprecedented healthcare crisis.”
Mr. Paul Sunu, chairman of the new Windstream Board of Directors,
said, "Tony and the Windstream team have made significant strides
in the last 18 months to better position the company to compete for
the long term. The new Board and I are confident that we have the
right management team and right strategy to accelerate Windstream's
transformation, return to growth and drive sustainable value
creation."
Windstream also unveiled a new corporate logo, marking the next
chapter in the company’s transformative journey.
Windstream will continue to support its customers across the U.S.
with an enhanced value proposition, including:
* Windstream Enterprise: Windstream’s nationwide,
cloud-optimized network and award-winning software solutions –
such as SD-WAN, UCaaS and OfficeSuite UC® – help businesses
across the U.S. manage today's most complex IT and networking
challenges through an industry-leading customer portal, WE
Connect.
* Kinetic by Windstream: Consumers can experience robust
high-speed internet with speeds up to 1 Gig, extensive TV &
entertainment options, home network security, optimal Wi-Fi control
and reliable voice services through a fiber-based network and 5G
fixed wireless service. Small and midsize businesses can choose
from cloud-based collaboration and communication tools along with
wireless internet backup.
* Windstream Wholesale: Windstream is leading the digital
transformation in optical transmission, providing flexible and
customized high-capacity bandwidth and transport services to
content and media providers, cloud and data center operators,
international carriers, cable operators, wireless carriers,
traditional network service providers and more.
Kirkland & Ellis LLP served as legal counsel, PJT Partners LP
served as financial adviser and Alvarez & Marsal served as
restructuring adviser to Windstream during the restructuring
process.
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.
WORLD CLASS: At Least 3 Units Have Filed for Chapter 11 Protection
------------------------------------------------------------------
Paul Thompson, writing for the Austin Business Journal, reports
that at least three more entities connected to Nate Paul's World
Class Holdings have filed for bankruptcy. WC 4th and Colorado LP,
which owns the building that houses the Capital Grille at 319
Colorado Street in downtown Austin, filed for Chapter 11 bankruptcy
protection Aug. 4. Two more World Class limited partnerships filed
for Chapter 11 bankruptcy protection on Aug. 5: WC 1st and Trinity
LP and WC 3rd and Congress LP. WC 1st and Trinity owns a lot at 99
Trinity St. just south of the Austin Convention Center, while WC
3rd and Congress owns three downtown parcels surrounding The
Austonian skyscraper.
About World Class Holdings
World Class is a multi-billion dollar holding company that owns a
diverse portfolio of assets and operating companies. We utilize
proprietary processes, a disciplined operating playbook, and a
data-driven approach to creating long-term value at our companies.
About the Chapter 11 Debtors
WC 4th and Colorado, LP is an Austin, Texas-based single asset real
estate debtor (as defined in 11 U.S.C. Section 101(51B)). WC 4th
and Colorado sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Tex. Case No. 20-10881) on Aug. 4, 2020. Brian
Elliot, authorized agent, signed the petition. At the time of the
filing, Debtor had estimated assets of between $10 million and $50
million and liabilities of between $1 million and $10 million.
WC 1st and Trinity GP, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No.
20-10886) on August 5, 2020, listing under $1 million in both
assets and liabilities.
WC 3rd and Congress GP, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No.
20-10888) on August 5, 2020, listing under $1 million in both
assets and liabilities.
Judge Tony M. Davis oversees the cases.
The Debtors tapped Fishman Jackson Ronquillo PLLC as counsel and
Columbia Consulting Group, PLLC as financial advisor.
YACHT CLUB: Seeks to Hire Lashly & Baer as Counsel
--------------------------------------------------
Yacht Club Vacation Owners Association, Inc. seeks authority from
the US Bankruptcy Court for the Western District of Missouri to
hire Lashly & Baer, P.C. as its counsel.
Services the Debtor will render are:
a. advise the Debtor with respect to its rights, power and
duties in this case;
b. assist and advise Debtor in its consultations with the
Subchapter V Trustee relative to the administration of this case;
c. assist the Debtor in analyzing the claims of creditors and
negotiating with such creditors;
d. assist the Debtor with investigation of the assets,
liabilities and financial condition of Debtor and reorganizing
Debtor’s business in order to maximize the value of Debtor's
assets for the benefit of all creditors;
e. advice the Debtor in connection with the sale of assets,
including conversion of a timeshare community to a condominium
community;
f. assist the Debtor in its analysis of and negotiation with
any third party concerning matters related to, among other things,
the terms of a plan of reorganization;
g. assist and advise Debtor with respect to any communications
with the general creditor body regarding significant matters in
this case;
h. commence and prosecute necessary and appropriate actions
and/or proceedings on behalf of Debtor;
i. review, analyze or prepare, on behalf of Debtor, all
necessary applications, motions, answers, orders reports,
schedules, pleadings and other documents;
j. represent the Debtor at all hearings and other
proceedings;
k. confer with other professional advisors retained by Debtor
in providing advice to Debtor.
l. perform all other necessary legal services in this case as
may be requested by Debtor in this Chapter 11 proceeding; and
m. assist and advise the Debtor regarding pending arbitration
and litigation matters in which Debtor may be involved, including
continued prosecution or defense of actions and/or negotiations on
Debtor's behalf.
Hourly billing rates of Lashly & Baer are:
Partners $300 to $450
Associates $200 to $285
Paralegals $100 to $150
Prior to the Petition Date, the Debtor paid Lashly & Baer a $25,000
retainer.
Lashly & Baer does not hold or represent any interest adverse to
the Debtor's estate, and is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code, as modified by Sections
1107(b) and 1195 of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Daniel D. Doyle, Esq.
Lashly & Baer, P.C.
714 Locust Street
St. Louis, MO 63101
Phone: 314-621-2939
Fax: 314-621-6844
About Yacht Club Vacation Owners
Association
Yacht Club Vacation Owners Association, Inc. filed its voluntary
petition under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo.
Case No. 20-41555) on August 28, 2020, listing under $1 million in
both assets and liabilities. Daniel D. Doyle, Esq. at LASHLY &
BAER, P.C., ATTORNEYS AT LAW represents the Debtor as counsel.
YONG KANG: Case Summary & 10 Unsecured Creditors
------------------------------------------------
Debtor: Yong Kang Las Vegas Assisted Living Center, LLC
2000 S Eastern Ave
Las Vegas, NV 89104
Business Description: The Debtor owns and operates a continuing
care retirement communities and assisted
living facilities for the elderly.
Chapter 11 Petition Date: September 25, 2020
Court: United States Bankruptcy Court
District of Nevada
Case No.: 20-14788
Debtor's Counsel: Michael M. Lin, Esq.
LIN LAW GROUP
5288 Spring Mtn Rd Ste 103
Las Vegas, NV 89146
Tel: 702-871-9888
Fax: 702-648-0888
Email: linlawgroup@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Longsheng Lei, president.
A copy of the petition containing, among other items, a list of the
Debtor's 10 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/QDBP3VY/YONG_KANG_LAS_VEGAS_ASSISTED_LIVING__nvbke-20-14788__0001.0.pdf?mcid=tGE4TAMA
[*] Abandoned Mall Spaces Could Become Become Amazon Hubs
---------------------------------------------------------
Jonathan Shieber, writing for Tech Crunch, reports that one of the
largest owners of shopping mall real estate in the United Stages,
Simon Property Group, has been talking to Amazon about transforming
its anchor department stores into Amazon distribution hubs,
according to the Wall Street Journal.
In the case of Simon Property, the anchor tenants like J.C. Penney
and Sears that used to be stable sources of revenue are now weights
around the neck of the retail real estate manager, and transforming
their ghostly halls of pale mannequins into warehouses for Amazon
orders simply makes sense.
The transformation from showroom to storehouse for everything from
books and sweaters to kitchenware and electronics won't be too much
of a stretch for the vacant storefronts of businesses that have
both filed for Chapter 11 bankruptcy protection.
Simon's holdings include some 63 J.C. Penney and 11 Sears stores,
according to the Journal's reporting citing a May public filing
from the real estate developer.
This wouldn't be the first time that Amazon had turned to mall
real estate for fulfillment centers. in 2019, the online retailer
acquired a massive physical footprint in Akron, Ohio that it turned
into a distribution center.
Gone are the days when gum smacking tweens and teens and their
beleaguered parents would head to the local mall for a stroll
around the retail block. Now shoppers prefer to peruse online and
kids find Fortnite to be the Hot Topic to hang in.
The deal, if it goes through, would be another nail in the coffin
for a staple of late twentieth century culture that now mostly
exists in the memory of baby boomers and Gen X consumers (thanks
millennials and Gen Z).
Malls these days are lifestyle affairs that promise boutique
branded shops than the sprawling department stores that had
something for everyone. The big-box spaces that the Journal
reported Amazon is negotiating for are the 100,000 square foot,
multi-story behemoths, that are likely not long for the long tail
world of niche commerce anyway.
These days, consumers are looking for brands that appeal to a
persona or the bottom line of a pocketbook, and not the mass casual
one-stop-shop of late twentieth century department store
off-the-rack identities.
The Journal reported that, if the deals went through, Simon would
like rent the space at a considerable discount to what it would
charge another retailer. The paper estimated that rents could be
as low as $4 per square foot to $19 per square foot, while
warehouse rents average about $10.
At this point, shopping malls are looking for anything to bring in
money. They've already tried schools, medical offices and senior
living facilities, but the COVID-19 epidemic has thrown all of
those plans into the abyss.
And, as the Journal notes, malls are already located in places that
make them attractive distribution hubs. Amazon has bought some
sites already and FedEx and DHL have done the same, according to
the paper.
At this point, Amazon ownership may be a better fate for the real
estate than totally abandoning it to empty space and the lingering
soundtrack of 80s rock.
[*] Bankruptcies Expected to Hit 10-Year High Due to Pandemic
-------------------------------------------------------------
Carmen Reinicke of Business Insider reports that U.S. bankruptcies
are on track to hit their worst level in a decade as the
coronavirus pandemic-induced recession continues to slam
businesses, according to a Monday report from S&P Global.
This year through August 9, 2020, as many as 424 companies have
declared bankruptcy, according to S&P Global. That surpassed the
number of filings during any period since 2010, according to the
report. S&P Global's analysis covered public companies and private
companies with public debt.
Consumer-focused companies have been hit particularly hard by the
pandemic and sweeping shutdowns to contain the spread of the virus.
Over 100 of these companies have filed for bankruptcy this year,
according to S&P Global. This list includes popular brands such as
J.Crew, JCPenney, Lord & Taylor, and Neiman Marcus Group.
Beyond retail and consumer-facing companies, other industries were
also hit by the pandemic. The industrial and energy sectors
together accounted for nearly 100 bankruptcies, according to S&P
Global. Bankruptcy filings from the industries included Hertz
Global Holdings and Ultra Petroleum Corp.
Of the companies that have filed for Chapter 11 bankruptcy
protection this year, 35 of them reported more than $1 billion in
liabilities, according to the report.
As the pandemic-induced recession continues, and the US grapples
with high coronavirus cases that threaten to derail the economic
recovery, it's expected that more companies will file for
bankruptcy, according to the report.
[*] Fashion World Hit Hard by Retail Bankruptcies
-------------------------------------------------
Rick Helfenbein wrote an article on Forbes titled "Fashion World
Slammed By Retail Bankruptcies - MMG Explains The Process."
The coach said no-pain no-gain, which aligns with the current
thinking on Fashion Avenue these days. Announcements of retail
bankruptcies pop up daily - there is little explanation, and no end
in sight.
To experience financial pain without a proper coach is not
advisable. Solid planning and strategy help navigate the issues of
the moment and they also align your business to a better path.
Enter New York's prestigious consulting firm MMG Advisors, one of
the industry's premier sources for intelligent financial
information during these difficult times for fashion brands and
retailers.
Truth be told, when discussing the word "uncomfortable," dental
chairs in Manhattan's garment district know the secrets. Perhaps it
is the threat of pain that encourages patients to spill proprietary
beans, when the dentist says: "How's your retail business - are you
safe from bankruptcy?"
Hoping that you have chosen the right path for your issue of the
moment; attention turns to the dentist. "I understand that you are
here for a routine exam, but there is a problem. Your tooth is
cracked." We should yank that tooth. You will wait a few weeks,
there will probably be a bone graft, and then an implant. "Are you
ready?"
As the words spill from the dentist's lips, fear turns to horror.
Your stomach churns, you are immediately spun into a new and
confusing web when – ironic as it may seem, all you wanted was an
dental exam and a cleaning. Strange thoughts circulate. A vision of
Dustin Hoffman suddenly appears in the dental chair (Marathon Man?)
How will this end? Can the dentist be trusted? How did I get in
this situation in the first place?
Eventually, the vision clears, fear subsides, and the conversation
turns back to getting proper advice. The dental experience
parallels the complex web of bankruptcy. To avoid unnecessary pain,
it is best to work with experts like the fashion industry's 30-year
old investment bank, MMG Advisors. Truth be told, MMG knows,
understands, and has experienced all types of financial issues, and
they work with clients to anticipate appropriate steps - so that
all the parties can navigate this difficult terrain. MMG, like the
dental chair, hears the industry secrets.
Led by former retail executives with decades of combined
operational experience, MMG Advisors understands how to leverage
consolidation opportunities. The team finds solutions for companies
requiring either an in-court or out-of-court process – whether
for M&A or for raising capital. Bankruptcy for any retailer may not
be the only solution in today’s complex world, but in our
COVID-19 environment, it has become the fashionable way to ease the
pain.
MMG Managing Director Mary Ann Domuracki indicates that (as a
process) "developing a restructuring plan requires careful up-front
consideration from experienced people who understand the wide
spectrum of potential business solutions. Not everyone needs to
file for bankruptcy." When advisers are allowed into the picture,
they challenge the viewpoints of the client and work to build
consensus. Companies experience a full range of available options
even before a bankruptcy filing is put on the table.
From a retail perspective, in COVID-19 world, the cash crunch has
become overwhelming. There are several reasons that a retailer (or
a brand) feels the summer heat, and bankruptcy is looking (more and
more) like a viable option. Perhaps there is too much debt, or too
many store leases, or vendors are not being paid. Perhaps consumer
habits have changed, or maybe there is litigation that didn't
transact as planned. Whatever the case, at some point it's time to
call in industry experts for technical advice and for problem
solving.
For any remaining retail doubters (that are just tuning in to the
crisis), the bankruptcy list keeps getting longer and longer. Some
of the notables are: Brooks Brothers, Lord & Taylor, Men’s
Warehouse, Jos. A. Banks (Tailored Brands), Lucky Brand, Neiman
Marcus. J.Crew, J.C. Penney, Stage Stores SSI -7.5%, Modell's, Ann
Taylor (Ascena), Sur La Table, J.Hilburn, GNC, True Religion, John
Varvatos, and Chuck E. Cheese.
MMG explains that while Chapter 11 is not the only solution, it's
utilization potentially ensures that a company's creditors and
stakeholders will recover their maximum value (whatever that might
be). The filing is very public - as it runs through the bankruptcy
court docket system. Information is exposed to scrutiny, and
company secrets are laid bare for all to see. MMG's Mary Ann
Domuracki also explains that, if the process is not handled
properly, "bankruptcy can result in owners losing control of their
company, or losing control of the very outcome they seek."
The first question MMG Advisors will ask is: "What solutions exist
for the business?" The next step is to identify what the core
business would look like after the process completes. A retailer
may want to cut stores, or a brand may want to discontinue some
fashion lines. Whatever the change, the process starts with a plan.
The team then works towards achieving consensus among the parties,
since everyone involved loses some value from the original
company.
If the business decides to file, they will approach the court with
a plan detailing how they plan to operate, whether they need to
liquidate assets or, (sadly) whether they can exist at all. The
earlier that a plan is filed, the less costly for all concerned.
The longer it takes, the harder it is to finish the deal. In the
case of J.Hilburn (which was advised by MMG), they filed a
reorganization plan on the first day in court. Their plan included
their lenders, vendors, unsecured creditors, and equity holders and
it allowed J.Hilburn to exit Chapter 11 in only 60 days.
When contemplating a Chapter 11, the choice exists to utilize
section 363 of the bankruptcy code - which is a more common and
faster method, allowing the company to sell assets in Chapter 11
with notice to potential buyers. There is a timeline, and the
process could complete within 60 days (like J.Hilburn). In the
absence of an upfront agreement, the bankruptcy could take 12
months to resolve.
Chapter 11 is generally referred to as reorganization bankruptcy.
The company will be restructured, and it gets to live another day.
Chapter 7 of the code is liquidation bankruptcy, and assets are
sold to satisfy as many creditors as possible. The company name
could potentially live past the bankruptcy - simply as an asset
that has been transferred, but the core business is completely
dissolved.
The speed of the bankruptcy is accelerated when there is a likely
buyer or "stalking horse" engaged in the process. The potential
buyer prepares an Asset Purchasing Agreement (APA) that is given to
the court at the beginning of the proceedings. The bid from the
stalking horse sets the floor for the asset bidding. An auction is
held, others can bid against the stalking horse, and the court
generally approves the outcome of that auction.
Allan Ellinger, co-founder and Senior Managing Partner of MMG
Advisors, indicated: "One of the benefits of Chapter 11 bankruptcy
is that it draws a line in the sand, a line that insulates the new
owners from any pre-bankruptcy liabilities that the new owner does
not want to assume." This is a key component of the procedure, and
one of the reasons that bankruptcy is becoming such a powerful
resolution tool in this difficult retail environment.
During bankruptcy, the Company directors and officers maintain a
fiduciary responsibility to protect the creditors and shareholders.
Typically, the creditors will form an unsecured committee of
volunteers who then approve (or disapprove) all the key steps. The
committee is public, has an attorney, an accountant, and sometimes
even a financial advisor. When Chapter 11 is filed, the company is
finally free of liens and will exist as an ongoing operation.
In America's COVID-19 economy, the restructuring process has become
a bit more complex. Companies planning to file now have to deal
with stores and offices that may not be open, find records that may
not be available, and deal with people who may not be working. All
this complicates an already difficult situation.
Eventually, the fashion industry will look back on these strange
times and wonder how everything finally got resolved. While the
federal government has helped employees during the COVID-19 crisis,
they have left most employers to fend for themselves. With federal
aid lacking, many credit markets have run completely dry, and
several of today's prominent retailers have been forced to take
matters into their own hands. Some have chosen to sell assets, some
have pared back staff, and others hold open the option of
bankruptcy – which would (in most cases) allow them to start over
with a clean slate.
The fashion industry is working really hard to survive these
difficult times. COVID-19 is challenging the industry, and forcing
retailers to face situations that they have never experienced
before. Proper guidance is welcome, and looking at next steps, it
is helpful to summon the sage wisdom of Warren Buffet who said:
"In a chronically leaking boat, energy devoted to changing vessels
is more productive than energy devoted to patching leaks."
[*] Fed. Govt. Support Can't Stop Next Bankruptcy Wave, Says Lasry
------------------------------------------------------------------
Madeleine Ngo and Vonnie Quinn of Bloomberg News report that Avenue
Capital Group LLC CEO Marc Lasry has projected that rising
bankruptcy filings are coming despite the government support and
efforts to help companies.
More bankruptcies are on the way in spite of U.S. government
efforts to prop up companies, which will create new opportunities
for investors, according to Marc Lasry, chief executive officer of
Avenue Capital Group LLC.
"If you've got access to capital, life is great, you're going to
last for another two years," Lasry said in an interview with Vonnie
Quinn on Bloomberg TV. "But if you don't have access to that
capital, as soon as that runs out, you're filing for bankruptcy."
[*] Hawaii Bankruptcy Filings Virtually Flat in July 2020
---------------------------------------------------------
Dave Segal, writing for Star Advertiser, reports that Hawaii
bankruptcies were virtually flat in July as federal and state
assistance programs kept individuals and businesses afloat.
Whether it was Paycheck Protection Program loans, federal stimulus
payments, state unemployment benefits or the federal $600 weekly
plus-up payments, bankruptcies held steady last month after spiking
nearly 22% in June. Through the first seven months of the year,
bankruptcy filings are down 5.6% from the same time in 2019.
There were 140 bankruptcy filings in July, just two fewer than the
same period a year ago, according to new data from the U.S.
Bankruptcy Court, District of Hawaii. There were 915 cases year to
date through July 31 compared with 969 in the year-earlier period.
"The federal assistance programs are critical for the survival of
businesses and individuals," said Eugene Tian, chief economist for
the state Department of Business, Economic Development and Tourism.
"The bankruptcy situation for the next few months and even the next
few years depends on the condition of the pandemic, the magnitude
and timing of the federal stimulus funds, and the speed of recovery
of the economy. In the Great Recession (of December 2007 to June
2009), the peak of the bankruptcy filing was two years later in
2011 with nearly 4,000 — 3,954 to be exact — bankruptcy
filings."
The recent triple-digit daily surge in COVID-19 cases in Hawaii is
casting a shadow over the state’s economy, Tian said.
"The spike in COVID-19 cases in Hawaii has created a high degree of
uncertainty," he said. "All of us are concerned about our safety
and the economy. If the trans-Pacific travel pre-test program is
delayed (past Sept. 1) due to the spike, it would add more
difficulties for the debtors to survive, especially those in the
tourism industry."
Tian said forecasting the trend of bankruptcies depends on the
magnitude and timing of the federal stimulus funds.
"I would not be surprised if bankruptcy filings go up in some
degree during the next few months if federal money is delayed or in
a smaller quantity," he said.
In July, Chapter 7 liquidation filings — the most common type of
bankruptcy — slipped 2.7% to 107 from 110 in the year-earlier
period.
Chapter 13 filings, which allow individuals with regular sources of
income to set up plans to make installment payments to creditors
over three to five years, inched up 6.5% to 33 from 31.
There were no Chapter 11 reorganization filings last month compared
with one in the year-earlier period.
Bankruptcies were mixed in the four major counties. Honolulu County
filings inched up to 100 from 99 and Maui County filings rose to 20
from 13. Hawaii County filings fell to 13 from 20 and Kauai County
filings declined to seven from 10.
SEEKING RELIEF
Bankruptcy filings in July 2020 fell from a year ago.
2020 2019 PCT. CHANGE
---- ---- -----------
Chapter 7 107 110 -2.7%
Liquidation
Chapter 11 0 1 —
Business reorganization
Chapter 13 33 31 6.5%
Individuals with regular sources of income set up plans to pay
creditors over time
Total 140 142 -1.4%
Source: U.S. Bankruptcy Court, District of Hawaii
[*] New Chapter 11 Law Could Be Lifeline of Small Businesses
------------------------------------------------------------
Peter D. Rhoades wrote an article on Rapid Growth Media titled "New
bankruptcy law could be lifeline for small businesses."
In this COVID-19 environment, we are hearing one giant company
after another (mostly retail-related) filing for Chapter 11
bankruptcy protection. Since Chapter 11 requires significant cash
up-front and may take years and require costly professional service
teams to implement, it is not often a viable solution to
small-business organizations. In response to this dilemma and well
before the onset of the pandemic in the United States, Congress
passed the Small Business Reorganization Act of 2019 (the
"Subchapter V" Act).
As small-business organizations throughout Michigan seek to
identify avenues to survive the economic fallout from the pandemic,
Subchapter V may provide a welcome lifeline that was not previously
available.
I have connected with David Bevins, an attorney and fellow
shareholder at my firm, to help understand this new legislation and
how it can serve organizations during the pandemic
Why is the Chapter 11 process not suited for small businesses?
A Chapter 11 bankruptcy is typically a "reorganization," where the
debtor company is able to shed certain debt and emerge from the
bankruptcy process, at least theoretically, a stronger, leaner
entity. In practice, the Chapter 11 process requires significant
up-front cash or access to cash. Further, the road to a successful
plan can take years, and the debtor entity can become financially
swamped with professional fees, addressing priority issues, and
making deals to achieve a plan. In fact, some studies suggest that
Chapter 11 "success rate," which is companies that emerge following
a successful plan, is only about 10% to 15%.
Who would benefit from filing Subchapter V?
The Subchapter V Act applies to a person or entity, other than the
owner of a single asset constituting real estate, who is engaged in
commercial or business activities, and who has aggregate
non-contingent, liquidated secured and unsecured debt of not more
than $7.5 million. Originally, the debt limit was a little over
$2.725 million, but the CARES Act increased the limit to expand the
applicability of the Subchapter V Act due to the economic impact of
the COVID-19 pandemic.
How does Subchapter V differ from Chapter 11?
The intent behind the Subchapter V Act is to streamline the Chapter
11 process for small businesses. While a Subchapter V debtor still
has the benefit of a stay of actions, many of the typical deadlines
are shortened, and certain obligations are lessened. For example,
the deadline to file a plan is 90 days, compared with a typical
Chapter 11, which allows for up to 18 months under certain
circumstances. Further, the Subchapter V debtor will not have to
deal with or pay for, a creditor’s committee, which often
constitutes a major expense to a Chapter 11 debtor. Instead, a
standing Chapter V Trustee is appointed. Finally, the Subchapter V
debtor is not subject to the Absolute Priority Rule, which
essentially requires more senior debtors to be paid before junior
creditors, or agree to accept less. This is a huge benefit to a
Subchapter V debtor, and provides for much more flexibility in
dealing with creditors.
While the new Subchapter V is intended to provide a small business
with flexibility and a more cost-effective means of reorganizing
through bankruptcy, the devil is always in the details. This
article only touches on a few of the key aspects of the new act.
Get in touch with an attorney who specializes in bankruptcy to see
if this option will work for you.
[*] Overview of the Insolvency, Restructuring and Dissolution Act
-----------------------------------------------------------------
Hellenic Shipping News presents an overview of the Insolvency,
Restructuring and Dissolution Act 2018, (Act No.40 of 2018, the
"Act") , which came into force on July 30, 2020, marks, for now at
least, the final stage in what has been a far-reaching overhaul of
Singapore's insolvency and debt restructuring regime.
This process had started in 2015 with some amendments to the
Bankruptcy Act (Cap 20). Then, in 2017, significant amendments were
made to the Companies Act (Cap 50), in respect of both judicial
management orders and schemes of arrangement. In particular,
aspects of the "Chapter 11" procedure of the US Bankruptcy Code
were imported into a system that has historically always looked to
English company and insolvency law for inspiration -- if that is
the right word -- and provisions were enacted to deal with various
aspects of cross-border insolvency.
Now the Act, a massive affair of 527 sections, draws everything
together. There is nothing inherently wrong in having individual
insolvency -- bankruptcy -- dealt with in one statutory regime, and
corporate insolvency dealt with under another. There are
differences and there are similarities between the various sets of
procedures. But it was necessary to consult the Bankruptcy Act in
order to answer quite fundamental questions in relation to
corporate insolvency and the case for consolidation was not
seriously arguable. Now, the Bankruptcy Act will be repealed in its
entirety, and those provisions in the Companies Act dealing with
insolvency will also disappear. Parts 4 to 12 (sections 61 to 272)
of the Act deal with corporate insolvency, and Parts 13 to 21
(sections 273 to 437) deal with bankruptcy. Thus, separate
provisions now exist enabling the court to make orders restoring
the position to what it would have been had the company, or the
individual, as the case may be, not entered into a transaction at
an undervalue or given an unfair preference to a creditor,
following an application by a judicial manager or liquidator of the
company (sections 224 to 227) or by the Official Assignee (sections
361 to 365) respectively.
The Act has not confined itself to simply reorganising the existing
law. There are some important amendments. The most significant, in
the context of corporate insolvency, relates to the troublesome
topic of insolvent trading, dealt with in sections 339 and 340 of
the Companies Act. Under the old law, the combined effect of
sections 339(3) and 340(2) of the Companies Act meant that a
criminal conviction was a pre-requisite to the making of a civil
claim against an officer of a company for insolvent trading.
It was revealed by Mr Edwin Tong, Senior Minister of State for Law,
introducing the second reading of the Bill to Parliament, that not
surprisingly perhaps, the provisions had not been used in any
reported case.
Wrongful & Fraudulent Trading
Section 239(1) of the Act ("Responsibility for wrongful trading")
provides that a company trades wrongfully if it incurs debts or
liabilities without reasonable prospect of meeting them in full,
when the company is insolvent or becomes insolvent as a result of
such debts or liabilities being incurred. The Court is empowered to
declare that any person who was knowingly party to the company
trading wrongfully shall be personally liable for the company's
debts and liabilities so incurred.
The new provision should certainly make company directors sit up
and take notice. The lowering of the threshold for establishing
personal liability in the event of insolvent trading is a
significant measure of reform.
It will be interesting to see how the court interprets the word
"knowingly" in this provision. It is also to be found in the old
section 340 (1) of the Companies Act (now s. 238 of the Act,
"Responsibility for fraudulent trading"). Fraud is a different
thing, however. Determining whether a director is "knowingly party"
to insolvent trading is likely to raise some interesting questions
as to the degree of knowledge required, in particular the question
of whether it will be necessary to establish actual knowledge, or
"Nelsonian" knowledge (putting the telescope to the blind eye, like
the great English admiral) or constructive knowledge, whatever that
means. Is the test to be an objective one, based on the standards
expected of the hypothetical reasonable director, or subjective,
based on the standards of the actual officer? In fashioning its
approach, the court will need to bear in mind that the whole point
of the amendment is to move away from the need for a criminal
conviction; it is the standards of proof and evidence for civil
liability that will have to be imposed.
Mention should also be made of section 239(10) pursuant to which a
company or a company’s counterparty or potential counterparty may
apply to court for a declaration that a particular transaction or
series of transactions, or course of conduct, does not constitute
wrongful trading. It will be interesting to see how often this
power is exercised.
Early Dissolution: Friend or foe?
Sections 209-211 attempt to deal with a problem that is becoming
increasingly common and which, one fears, will only get worse in
current circumstances: cases of companies being wound up when they
have insufficient assets to cover the costs of the winding-up
process, let alone distribute anything to creditors and
contributories. Dealing with this situation involves the
expenditure of much time and public money.
These provisions establish a summary procedure for early
dissolution of a company where the liquidator (who will normally be
the Official Receiver but can also be a private liquidator acting
with the consent of the Official Receiver) has reasonable cause to
believe that realisable assets are insufficient to cover the costs
of the winding-up, and that the affairs of the company do not
require further investigation.
In such circumstances the liquidator may notify the contributories
and creditors that the company will be dissolved at the expiry of
30 days; this gives contributories and / or creditors who disagree
a chance to appoint a replacement liquidator, or apply to court.
Schemes of Arrangement
There are some important amendments relating to restructuring too.
Of particular interest in the context of schemes of arrangement is
section 64, which re-enacts section211B of the Companies Act , but
with a new provision, section 64(12)(b), which restricts the
operation of the various moratoria ( stays of proceedings) mandated
by various provisions in the section. Subsection (12)(b) provides
that such moratoria do not affect “ the commencement or
continuation of any proceedings that may be prescribed by
regulations”. According to Mr Tong, the Minister’s power to
make such regulations will be targeted at particular types of
proceeding and he made specific reference to writs for an action in
rem against a vessel. According to Mr Tong, the filing of a writ in
the High Court will not be impeded by the existence of a stay
imposed under section 64; leave of court is still required under
various subsections in section 64 but the claim against the vessel
will be preserved by the filing of the writ.
Judicial Management
A significant development in the context of judicial management is
the enactment of section 94 of the Act ("Judicial management by
resolution of creditors"). This effectively enables a company to
put itself into judicial management, without the need for a court
order, if the creditors agree. The company can go down this route
if it believes that there is a reasonable probability of achieving
one or more of the statutory objectives of judicial management (now
set out in section 89(1). Once the company is placed in judicial
management, the process continues in the normal way.
Limitation of contractual rights under the Act
Section 440 deals with the challenging issue of ipso facto clauses.
These clause, increasingly common in commercial contracts, enable
one party to a contract to terminate the contract if the other goes
into insolvency.
It is completely understandable why the parties to a contract might
be prepared to agree to such a provision. A party's insolvency
brings with it all sorts of problems, not least to its
counterparties, and the existence of an ipso facto clause at least
allows a measure of certainty to be provided.
Real difficulties occur, however, when a company is undergoing a
debt restructuring exercise. If a substantial number of its
counterparties cancel their contracts, the rehabilitation process
will be severely hampered.
It is this concern that has prompted the enactment of section 440.
Legislators are understandably reluctant to be perceived to be
interfering with established contractual rights in the absence of
oppression and / or unconscionability. But the fact that other
common law jurisdictions have established their own ipso facto
regimes, and the determination that Singapore should become a
restructuring hub of international standing won the day.
Section 440 provides that no party may by reason only that any
restructuring proceedings are commenced act upon certain types of
ipso facto clauses. In particular, a party cannot terminate a
contract with a company by reason only that the company is
insolvent or undergoing restructuring proceedings.
The restriction does not apply to all contracts. Exception is made
for "eligible financial contracts." any commercial charter of a
ship, or any contract which is likely to affect the economic
interest and or national interest of Singapore as may be
prescribed, amongst others under s.440(5).
It is not possible to contract out of the ipso facto regime (s
440(3). The restriction does not apply to other insolvency-related
proceedings, such as winding-up.
It was mentioned above that the section only applies to certain
types of ipso facto clauses. It would not apply, for instance, to a
clause which enabled a counterparty to cancel a contract with a
construction company if that company failed to meet certain
milestones.
There are also amendments to the "cram down" provisions in schemes
of arrangement (section 70), the judicial manager’s power to
assign proceeds from actions brought to unwind actions taken by
errant directors in exchange for third-party funding (section 99
and the First Schedule), the removal of imposition of personal
liability of the judicial manager as agent of the company, and the
nomination of the Official Receiver as liquidator (section 135).
There is an entire Division (Division 3 of Part 3) dealing with the
regulation of licensed insolvency practitioners. Impacts of
Covid-19 and the Act
There is one final important point to note. Amendments have been
made to the Act by the COVID-19 (Temporary Measures) Act 2020
("COVID Act"). These include the following: section 311(1) is
amended to raise the threshold for a bankruptcy application from S$
15,000 to S$ 60,000; section 312 is amended to raise the period
giving rise to a presumption of inability to pay debts for an
individual from 21 days to six months; similar amendments are made
to section 125(a) raising the debt threshold for a company to be
deemed unable to pay its debts for the purposes of a winding-up
application from S$ 15,000 to S$ 100,000 and raising the time
period from 3 weeks to 6 months.
It should be noted that this relief, by default, will last for 6
months beginning from 20 April 2020. The Government will however,
monitor the situation and may adjust this period as and when they
see fit.
[*] Retailers and Fashion Brands Severely Affected by COVID-19
--------------------------------------------------------------
Layla Ilchi of WWD reports that the coronavirus pandemic has taken
a particularly harsh toll on many fashion brands and retailers.
The virus has led to many major retailers and companies, including
Neiman Marcus Group, J.C. Penney, J. Crew, Brooks Brothers and
more, to file for Chapter 11 bankruptcy protection.
Others have seen significant revenue declines and losses so far
this year, including Under Armour, which lost roughly $773 million
in the first half of 2020, and Capri Holdings Ltd., which is
anticipating a 70 percent decline in sales this quarter after
losing $551 million in its 2020 fiscal year fourth quarter.
Here, WWD looks at the fashion companies and retailers that have
suffered the greatest impact on their businesses because of the
COVID-19 pandemic.
* Abercrombie & Fitch Co.:
Abercrombie & Fitch Co. saw net losses widen to $244.2 million in
the quarter ending May 2, compared to $19.2 million in the prior
year. Net sales fell 34 percent to $485.4 million in the last
quarter from $734 million in the year prior.
* American Eagle Outfitters:
The company saw revenues in the three-month period ending May 2
slide to $552 million from $886 million the same time last year.
The American Eagle brand saw topline sales fall 45 percent, while
Aerie's sales decreased by 2 percent.
* Ascena Retail Group
Ascena Retail Group Inc., which operates Ann Taylor, Loft, Lane
Bryant, Justice and Lou & Grey, filed for Chapter 11 bankruptcy on
July 23. The company had initially furloughed half its corporate
staff and cut executive salaries at the start of the pandemic.
* Bldwn:
Los Angeles-based fashion brand Bldwn filed for bankruptcy on March
25 after further losses caused by the COVID-19 fallout. The company
let go of its entire staff, which included 33 people in corporate
roles and 45 associates at its seven stores.
* Brooks Brothers:
Iconic brand Brooks Brothers filed for bankruptcy on July 8. The
brand entered the bankruptcy process with $75 million in
debtor-in-possession financing.
* Burberry:
Burberry's retail sales fell 48.4 percent to 257 million pounds in
the quarter ending June 27. Comparable store sales were down 45
percent.
The company has also cut 5 percent of its workforce, which equals
500 jobs. The cuts include 150 office-based roles in the U.K.
* Capri Holdings Ltd.
Capri Holdings. Ltd, the parent company of Michael Kors, Versace
and Jimmy Choo, is expecting a 70 percent decline in sales during
the current quarter after reporting a loss of $551 million in the
fourth quarter of the 2020 fiscal year.
* Centric Brands:
Centric Brands, which is the licensee to more than 100 fashion
brands including Tommy Hilfiger, Calvin Klein and Under Armour,
filed for Chapter 11 bankruptcy protection on May 18.
* Chico's FAS:
Chico's FAS, the parent company of Chico’s, White House Black
Market, Soma and TellTale brands, saw revenues during the
three-month period ending May 2 fall to $280 million, down from
$517 million during the same time last year.
Chico's FAS Canada, a subsidiary of the company, also filed for
bankruptcy in Ontario, Canada on July 30. It plans to permanently
close all 10 stores in Canada, which includes four Chico’s stores
and six White House Black Market stores.
* Creative Hairdressers Inc.:
The beauty company, which is behind Hair Cuttery, Bubbles and Salon
Cielo, filed for Chapter 11 bankruptcy protection on April 28. The
company operates 750 hair salons.
*David Yurman:
The fine jewelry brand cut nearly 100 corporate jobs in July after
doing companywide furloughs in April. David Yurman revealed the
layoffs affected the brand's marketing, product development,
engineering and finance departments.
* Debenhams:
British retailer Debenhams sought bankruptcy protection on April 9.
The retailer operates 142 stores in the U.K.
* Elizabeth Arden Red Door Spas:
Now known as Mynd Spa & Salon Inc., the business filed for Chapter
7 bankruptcy on March 19, just a few days after closing its
locations in response to the pandemic.
* G-Star Raw Retail Inc.:
The fashion label's U.S. retail operations filed for Chapter 11
bankruptcy protection on July 3.
* Guess Inc.:
Guess Inc. saw revenues during the three-month period ending May 2
fall to $260 million, down from $536 million during the same time
last year.
* H&M:
The Swedish retailer, which owns its namesake chain, Cos, & Other
Stories, Monki and Weekday, said on June 26 it would be closing 170
stores across the U.S. and Europe. The decision comes after the
company saw sales decline 57 percent in local currencies from March
1 to May 6 when many stores in the U.S. and Europe were closed
because of the pandemic.
* J.C. Penney Co.:
The retailer filed for Chapter 11 bankruptcy protection on May 15
after experiencing steady declines caused by its store closures.
Additionally, J.C. Penney is laying off roughly 1,000 employees
across corporate, field management and international positions and
is closing 152 of its 850 stores permanently. The company also
suffered a loss of $546 million in the quarter ending May 2.
The retailer is working toward a going concern sale to continue
operating under the J.C. Penney banner, with its intellectual
property intact.
* J. Crew Group Inc.:
The company, which also owns Madewell, filed for Chapter 11
bankruptcy protection on May 4. J. Crew received a $400 million
debtor-in-possession package and aims to have a confirmation plan
approved by Sept. 1.
* J. Hilburn:
The Dallas-based men's wear seller filed for Chapter 11 bankruptcy
protection on May 5 due to the pandemic. The business saw daily
sales decline by 53 percent in March and by 63 percent in April
compared to the previous year.
* Jeffrey:
Nordstrom said on May 18 it would be permanently closing its three
Jeffrey specialty stores and parting ways with its founder, Jeffrey
Kalinsky.
* John Varvatos:
The fashion label filed for Chapter 11 bankruptcy protection on May
6 due to falling sales and online revenue.
Lion/Hendrix Cayman Ltd. was the highest bidder at a bankruptcy
auction on July 22, with a winning bid that’s estimated to be
around $97 million. It was reported that John Varvatos himself
would leave the company after the acquisition.
* Kering:
The luxury French conglomerate, which owns brands like Gucci, Saint
Laurent and Bottega Veneta, saw revenues in the three months ending
March 31 fall by 15.4 percent to 3.2 billion euros, representing a
decline of 16.4 percent in comparable items.
* Kohl's Corp:
Kohl's Corp recorded net losses of $541 million in the three months
ending May 2. Sales dropped 40.6 percent to $2.4 billion.
* L Brands:
L Brands, the parent company of Victoria's Secret and Bath & Body
Works, saw net revenues for the three months ending May 2 decrease
to $1.65 billion, down from $2.6 billion the previous year.
Victoria's Secret's total sales were $821 million, a 46 percent
decline from the $1.5 billion earned last year.
* Le Tote:
Le Tote, the company that purchased Lord & Taylor for $75 million
last year, filed for Chapter 11 bankruptcy protection on Aug. 2.
The company has $137.9 million in funded debt obligations.
* Levi Strauss & Co.:
The company is cutting 15 percent of its corporate workforce, which
totals roughly 700 positions globally. The cuts will generate an
annualized savings of $100 million for the company.
Additionally, in the quarter ending on May 24, the company saw net
losses equal $363.5 million. Revenues fell 62 percent to $497.5
million.
* Long Tall Sally:
The women's specialty retailer said on June 16 it would be
shuttering its doors permanently. The brand estimated its
e-commerce site will close by the end of August.
* Lucky Brand:
Lucky Brand filed for Chapter 11 bankruptcy protection on July 3.
* LVMH Moët Hennessy Louis Vuitton:
The luxury conglomerate saw net profits decline 84 percent in the
first half of 2020. The company reported sales fell 38 percent in
organic terms in the three months ending June 30 after the pandemic
forced the closure of many of its stores worldwide.
* Macy's:
Net sales for the retailer for the quarter ending May 2 fell more
than 45 percent to roughly $3 billion from $5.5 billion the prior
year. Macy's also revealed in late June that it is cutting 3,900
corporate and management jobs to save $365 million this year and
$630 million in expenses on an annual basis going forward.
* Marc Jacobs:
The Marc Jacobs brand laid off roughly 60 employees, including
recent high-profile hire Olympia Le-Tan at the beginning of June.
* The Modist:
The London and Dubai-based e-tailer — which specialized in modest
fashion — has ceased operations.
* Moncler:
The fashion brand saw sales drop 18 percent to 310.1 million euros
in the three months ending March 31. This is compared to 378.5
million euros in the first quarter of 2019.
Retail revenues dropped 19 percent to 236.3 million euros, compared
to 291.4 million euros the year prior. Wholesale revenues also
decreased by 15 percent to 73.8 million euros, compared to 87.1
million euros.
* Neiman Marcus Group:
The 113-year-old retailer filed for Chapter 11 bankruptcy
protection on May 7. Since the filing, the retailer has decided to
close four locations including its recently opened 188,000
square-foot store at Hudson Yards, as well as its stores in
Bellevue, Wash., Palm Beach, Fla., and Fort Lauderdale, Fla. The
retailer is also closing 17 of 22 Last Call outlet stores.
* Nike Inc.:
Nike Inc. lost $790 million in sales during the three-month period
ending May 31.
* Nordstrom:
Nordstrom is closing 16 of its full-line department stores this
year due to the pandemic. Sources told WWD that the locations
include stores in Naples, Fla.; Flatiron Crossing, Colo.; Short
Pump Town Center in Richmond, Va., and West Farms, Conn.
* PVH Corp.:
PVH Corp., the parent company of Tommy Hilfiger and Calvin Klein,
posted a net loss of $1.1 billion during the first quarter this
year.
The company said on July 14 that it will streamline its North
American operations by exiting its 162 outlet store Heritage Retail
business and reducing its office workforce by roughly 450
positions, accounting for 12 percent of staff.
* Rag & Bone:
The fashion label laid off at least 70 employees across retail and
corporate roles.
* Ralph Lauren:
Ralph Lauren saw revenues fall 65.9 percent to $487.5 million in
the quarter ending on June 27.
* Revlon Inc.:
Revlon Inc. saw sales fall 18.1 percent to $453 million, with an
estimated COVID-19 hit of $54 million. Net losses widened from
$75.1 million to $213.9 million.
* RTW Retailwinds Inc.:
The company, which operates New York & Co. and Fashion to Figure,
filed for Chapter 11 bankruptcy protection on July 13. It expects
to close most of its brick-and-mortar stores and has launched a
liquidation process.
* Salvatore Ferragamo:
The luxury fashion company reported a 46.6 percent decline in sales
to 377 million euros in the first half of the year. This compares
to 705 million euros earned during the same period last year. Sales
in the second quarter fell by 60.1 percent.
* Signet Jewelers:
The jewelry retailer, which is behind Kay Jewelers, Zales, Jared,
H. Samuel, Ernest Jones, Peoples Jewellers, Piercing Pagoda, and
james.allen.com, is closing roughly 400 stores.
The company also experienced a decline in sales by 40 percent in
the three months ending May 2.
* Tailored Brands:
Tailored Brands, the parent company of Men's Wearhouse, Jos. A.
Bank, Moores and K&G, filed for Chapter 11 bankruptcy protection on
Aug. 2.
* Tapestry Inc.:
The conglomerate -- which owns Coach, Kate Spade and Stuart
Weitzman -- reported revenues slipped to $1.07 billion from $1.33
billion last year. The company lost $677 million during the first
quarter 2020, compared to $117 million last year. Coach's sales
fell from $965 million to $772 million, Kate Spade’s sales fell
from $281 million to $250 million and Stuart Weitzman fell from $85
million to $51 million from last year.
* Tod's SpA:
The Italian luxury company saw revenues decrease by 30 percent in
the first quarter this year, totaling at 152.8 million euros.
* True Religion:
The fashion brand filed for Chapter 11 bankruptcy protection on
April 13. In June, the company filed a plan to restructure by
converting a portion of its $110.5 million pre-petition debt.
* Under Armour:
Under Armour reported a loss of $183 million in sales in the second
quarter after reporting a loss of $590 million in the previous
quarter.
* Urban Outfitters Inc.:
The company saw a quarterly net loss of $138 million. In the three
months ending April 30, total sales fell 31.9 percent to $588
million, down from $864 million during the same time last year.
* VF Corp.:
The company, which operates Vans, The North Face, Dickies and
Timberland, posted a loss of $285.6 million in the quarter ending
June 27. Revenues fell 47.5 percent to $1.1 billion from $2.1
billion the previous year.
* Vince Holding Corp.:
The company reported an operating loss of $21.9 million in the
first quarter ending May 2, compared to an operating loss of $6.23
million during the same time last year. Total sales decreased 47.3
percent to $39 million in the first quarter compared to $74 million
from last year.
[*] Surge of U.S. Energy Bankruptcies Continue
----------------------------------------------
Reuters reports that another 16 U.S. energy firms filed for
protection from creditors last July 2020, reflecting crude oil
prices below levels that are profitable for many companies,
according to a report by law firm Haynes and Boone on Tuesday,
August 11, 2020.
More than 50 oil and gas firms have filed for bankruptcy since oil
prices crashed in March, led by exploration and production
companies with 29 filings. The amount of debt held by these
companies, $49.69 billion, is nearly twice the debt held by energy
bankruptcy filers all of last year, the law firm's data showed.
Oil prices have fallen by about a third from above $60 a barrel at
the start of the year as the COVID-19 pandemic crushed fuel demand.
They briefly turned negative in April.
Energy companies this year rushed to slash spending by laying off
workers, paring executive salaries and scaling back drilling, but
oil producers posted large losses in the second quarter.
"This latest downturn not only affects smaller recently hatched
shale producers, but July saw two of the largest filings involve
well-established oil companies," lawyers wrote in a note.
Last month, oil and gas producers California Resources Corporation
and Denbury Resources both filed for Chapter 11. Together, those
firms combined account for $7.7 billion in debt.
[*] U.S. Economic Contraction Affects Petroleum Firms Significantly
-------------------------------------------------------------------
Alex Mills of Times Record News reports that the contraction of
U.S. economy has tremendously hit petroleum companies.
Financial analysts within the petroleum industry suspected that the
news was going to be bad, but the severity of the downturn has been
overwhelming.
The financial performance of the upstream oil and gas producing
companies during the first half of 2020 was at record lows.
Even the large integrated companies announced recently second
quarter losses. It is unusual that the major oil companies all
report losses. ExxonMobil reported a loss of $1.1 billion, Chevron
$8.3 billion and BP $17.7 billion.
Others reporting this week were Diamondback Energy, based in
Midland, stating a loss of $2.39 billion, Continental Resource,
based in Oklahoma City, announcing $239 million loss, offshore
producers Noble Corp. and Fieldwood filing for bankruptcy
protection under Chapter 11.
Overall, 23 North American petroleum companies, with some $30
billion in debt, have filed for bankruptcy this year, according to
the law firm of Haynes and Boone.
The financial pain will be felt throughout the petroleum industry.
Service and supply companies have been hard hit too. They provide
services to oil and gas producers, and when drilling and production
declines they feel it quickly.
Demand for petroleum products has declined to historic lows this
year as economic activity worldwide has decreased in response to
the COVID-19 pandemic. The Energy Information Administration (EIA)
reported last week American consumers used the lowest amount of
energy in April since 1989.
In response to the oversupply and lower prices, companies cut
production by 1.99 million barrels per day in the U.S., EIA said.
Even though crude oil prices have remained at or near $40 per
barrel, the drilling rig count is near record low at 251 in the
U.S., which indicates the reserves and production are not being
replaced sufficiently to offset current production.
"The contraction has taken a deep and sharp toll on the statewide
rig count, and the number of employees working in the oil and gas
production industry in Texas," economist Karr Ingham said.
"Starting in late May, the Baker-Hughes rig count in Texas and the
U.S. fell to its lowest weekly and monthly levels since the company
began tallying weekly rig counts in 1944.
The Texas rig count averaged just 113 in March, down from over 400
at year-end 2019. The rig count has continued to decline each
week, falling to 103 on Friday, July 24."
Ingham monitors activity in the petroleum industry and issues a
monthly report, the Texas Petro Index, in conjunction with the
Texas Alliance of Energy Producers.
He said oil and gas employment, already in decline for all of 2019
after reaching its recent cyclical peak in December 2018, began to
fall at a much faster rate beginning in March.
From December 2018 to June 2020, direct upstream oil and gas
employment in Texas has fallen by over 66,000 jobs, a decline of
nearly 30%, with over 41,000 of those losses coming since February
of this year.
"Incredibly, over 25,000 jobs were shed by the industry in the
month of April alone, easily the largest one-month industry
employment decline on record, more than doubling the previous
record," Ingham said.
[*] U.S. Hospitals 'Unfile' Bankruptcy to Obtain Federal Aid
------------------------------------------------------------
Ayla Ellison, writing for Beckers Hospital Review, reports that
several U.S. hospitals had unfiled their bankruptcy protection to
obtain federal aid.
Companies in bankruptcy are not eligible to apply for Paycheck
Protection Program loans made available under the Coronavirus Aid,
Relief and Economic Security Act, but bankrupt organizations have
figured out a way to still receive the loans, according to
Bloomberg Law.
Some companies have "unfiled" for bankruptcy, arranged to receive
PPP funds and then refiled their bankruptcy case, according to the
report. At least three hospitals have used this process.
Lockport, N.Y.-based Eastern Niagara Hospital refiled for Chapter
11 bankruptcy July 8, two weeks after its previous bankruptcy case
was dismissed. The bankruptcy court dismissed the initial case June
24 at the request of the hospital to allow it to apply for a PPP
loan.
Faith Community Health System, a single-hospital system based in
Jacksboro, Texas, refiled for bankruptcy June 11, about three weeks
after its previous bankruptcy case was dismissed. The health
system, part of the Jack County (Texas) Hospital District, first
entered Chapter 9 bankruptcy — a bankruptcy proceeding that
offers distressed municipalities protection from creditors while a
repayment plan is negotiated — in February. The bankruptcy court
dismissed the case May 26 at the request of the health system. The
health system asked the court to dismiss the case to allow it to
apply for a PPP loan through a Small Business Association lender.
Calais (Maine) Regional Hospital asked a federal judge in July to
dismiss its Chapter 11 case so it can seek at least $1.8 million in
PPP funding. If the hospital is allowed to temporarily exit
bankruptcy, a bank has agreed to extend a PPP loan to the hospital,
according to Bangor Daily News.
[^] BOND PRICING: For the Week from September 21 to 25, 2020
------------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
24 Hour Fitness Worldwide HRFITW 8.000 0.250 6/1/2022
24 Hour Fitness Worldwide HRFITW 8.000 1.497 6/1/2022
AMC Entertainment Holdings AMC 5.750 30.134 6/15/2025
Acorda Therapeutics Inc ACOR 1.750 78.266 6/15/2021
American Airlines
2013-1 Class B Pass
Through Trust AAL 5.625 91.050 1/15/2021
American Energy-
Permian Basin LLC AMEPER 12.000 2.750 10/1/2024
American Energy-
Permian Basin LLC AMEPER 12.000 1.831 10/1/2024
American Energy-
Permian Basin LLC AMEPER 12.000 1.831 10/1/2024
Archer-Daniels-Midland Co ADM 3.375 104.714 3/15/2022
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Basic Energy Services Inc BASX 10.750 20.433 10/15/2023
Basic Energy Services Inc BASX 10.750 19.762 10/15/2023
Becton Dickinson and Co BDX 3.250 100.235 11/12/2020
Bristow Group Inc/old BRS 6.250 6.142 10/15/2022
Bristow Group Inc/old BRS 4.500 6.125 6/1/2023
Buffalo Thunder
Development Authority BUFLO 11.000 50.125 12/9/2022
CBL & Associates LP CBL 5.250 39.000 12/1/2023
CEC Entertainment Inc CEC 8.000 12.250 2/15/2022
Calfrac Holdings LP CFWCN 8.500 10.073 6/15/2026
Calfrac Holdings LP CFWCN 8.500 10.046 6/15/2026
California Resources Corp CRC 8.000 1.500 12/15/2022
California Resources Corp CRC 6.000 1.500 11/15/2024
California Resources Corp CRC 8.000 1.745 12/15/2022
California Resources Corp CRC 6.000 1.594 11/15/2024
Callon Petroleum Co CPE 6.250 32.230 4/15/2023
Callon Petroleum Co CPE 6.125 28.304 10/1/2024
Callon Petroleum Co CPE 8.250 27.398 7/15/2025
Callon Petroleum Co CPE 6.375 26.118 7/1/2026
Callon Petroleum Co CPE 6.125 28.104 10/1/2024
Callon Petroleum Co CPE 6.125 28.104 10/1/2024
Chaparral Energy Inc CHAP 8.750 1.000 7/15/2023
Chaparral Energy Inc CHAP 8.750 4.738 7/15/2023
Chesapeake Energy Corp CHK 11.500 14.875 1/1/2025
Chesapeake Energy Corp CHK 5.500 3.260 9/15/2026
Chesapeake Energy Corp CHK 11.500 15.000 1/1/2025
Chesapeake Energy Corp CHK 4.875 4.375 4/15/2022
Chesapeake Energy Corp CHK 6.625 4.438 8/15/2020
Chesapeake Energy Corp CHK 7.000 3.750 10/1/2024
Chesapeake Energy Corp CHK 5.750 4.000 3/15/2023
Chesapeake Energy Corp CHK 8.000 3.750 6/15/2027
Chesapeake Energy Corp CHK 8.000 3.750 1/15/2025
Chesapeake Energy Corp CHK 7.500 4.000 10/1/2026
Chesapeake Energy Corp CHK 8.000 3.882 3/15/2026
Chesapeake Energy Corp CHK 8.000 3.842 1/15/2025
Chesapeake Energy Corp CHK 8.000 3.882 3/15/2026
Chesapeake Energy Corp CHK 8.000 3.863 6/15/2027
Chesapeake Energy Corp CHK 8.000 3.863 6/15/2027
Chesapeake Energy Corp CHK 8.000 3.882 3/15/2026
Chesapeake Energy Corp CHK 8.000 3.842 1/15/2025
Chinos Holdings Inc CNOHLD 7.000 0.332 N/A
Chinos Holdings Inc CNOHLD 7.000 0.332 N/A
Citigroup Inc C 0.718 99.063 9/27/2020
Coca-Cola Co/The KO 2.200 100.028 5/25/2022
Continental Airlines
2000-1 Class A-1
Pass Through Trust UAL 8.048 95.134 11/1/2020
Continental Airlines
2000-1 Class B Pass
Through Trust UAL 8.388 94.365 11/1/2020
Continental Airlines
2012-2 Class B Pass
Through Trust UAL 5.500 96.837 10/29/2020
Dean Foods Co DF 6.500 1.300 3/15/2023
Dean Foods Co DF 6.500 1.150 3/15/2023
Diamond Offshore Drilling DOFSQ 7.875 9.625 8/15/2025
Diamond Offshore Drilling DOFSQ 5.700 10.000 10/15/2039
Diamond Offshore Drilling DOFSQ 4.875 10.438 11/1/2043
Diamond Offshore Drilling DOFSQ 3.450 10.125 11/1/2023
ENSCO International Inc VAL 7.200 11.500 11/15/2027
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 7.750 22.500 5/15/2026
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 9.375 0.001 5/1/2024
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 7.750 23.000 5/15/2026
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 8.000 0.424 2/15/2025
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 9.375 0.029 5/1/2024
EP Energy LLC / Everest
Acquisition Finance Inc EPENEG 8.000 0.424 2/15/2025
EnLink Midstream Partners ENLK 6.000 43.500 N/A
Endologix Inc ELGX 3.250 93.875 11/1/2020
Energy Conversion Devices ENER 3.000 7.875 6/15/2013
Energy Future Competitive
Holdings Co LLC TXU 1.018 0.072 1/30/2037
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 30.543 7/15/2023
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 30.469 7/15/2023
Extraction Oil & Gas Inc XOG 7.375 26.500 5/15/2024
Extraction Oil & Gas Inc XOG 5.625 25.000 2/1/2026
Extraction Oil & Gas Inc XOG 7.375 25.681 5/15/2024
Extraction Oil & Gas Inc XOG 5.625 22.400 2/1/2026
FTS International Inc FTSINT 6.250 34.375 5/1/2022
Federal Farm Credit Banks
Funding Corp FFCB 0.800 99.877 6/2/2025
Federal Farm Credit Banks
Funding Corp FFCB 0.830 99.842 6/17/2025
Federal Home Loan Banks FHLB 4.180 99.490 9/28/2035
Federal Home Loan Mortgage FHLMC 1.000 99.718 12/30/2026
Federal Home Loan Mortgage FHLMC 1.540 99.616 3/28/2028
Ferrellgas Partners LP /
Ferrellgas Partners
Finance Corp FGP 8.625 21.125 6/15/2020
Ferrellgas Partners LP /
Ferrellgas Partners
Finance Corp FGP 8.625 20.750 6/15/2020
Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011
Frontier Communications FTR 10.500 42.750 9/15/2022
Frontier Communications FTR 7.125 38.000 1/15/2023
Frontier Communications FTR 7.625 42.500 4/15/2024
Frontier Communications FTR 8.750 39.500 4/15/2022
Frontier Communications FTR 9.250 40.250 7/1/2021
Frontier Communications FTR 6.250 40.500 9/15/2021
Frontier Communications FTR 10.500 42.794 9/15/2022
Frontier Communications FTR 10.500 42.794 9/15/2022
GNC Holdings Inc GNC 1.500 1.375 8/15/2020
General Electric Co GE 5.000 78.874 N/A
Global Marine Inc GLBMRN 7.000 17.952 6/1/2028
Goodman Networks Inc GOODNT 8.000 43.000 5/11/2022
Great Western Petroleum
LLC / Great Western
Finance Corp GRTWST 9.000 58.250 9/30/2021
Great Western Petroleum
LLC / Great Western
Finance Corp GRTWST 9.000 58.178 9/30/2021
Grizzly Energy LLC VNR 9.000 6.000 2/15/2024
Grizzly Energy LLC VNR 9.000 6.000 2/15/2024
Hertz Corp/The HTZ 6.250 46.470 10/15/2022
Hi-Crush Inc HCR 9.500 6.624 8/1/2026
Hi-Crush Inc HCR 9.500 7.180 8/1/2026
High Ridge Brands Co HIRIDG 8.875 3.500 3/15/2025
High Ridge Brands Co HIRIDG 8.875 3.000 3/15/2025
HighPoint Operating Corp HPR 7.000 23.179 10/15/2022
HighPoint Operating Corp HPR 8.750 25.320 6/15/2025
ION Geophysical Corp IO 9.125 72.791 12/15/2021
International Wire Group ITWG 10.750 89.250 8/1/2021
International Wire Group ITWG 10.750 88.750 8/1/2021
J Crew Brand LLC /
J Crew Brand Corp JCREWB 13.000 54.098 9/15/2021
JC Penney Corp Inc JCP 5.875 30.625 7/1/2023
JC Penney Corp Inc JCP 7.625 0.655 3/1/2097
JC Penney Corp Inc JCP 5.650 0.950 6/1/2020
JC Penney Corp Inc JCP 5.875 30.980 7/1/2023
JC Penney Corp Inc JCP 8.625 2.250 3/15/2025
JC Penney Corp Inc JCP 8.625 2.500 3/15/2025
JC Penney Corp Inc JCP 7.125 1.183 11/15/2023
JC Penney Corp Inc JCP 6.900 0.235 8/15/2026
JCK Legacy Co MNIQQ 6.875 0.920 3/15/2029
JCK Legacy Co MNIQQ 6.875 11.123 7/15/2031
JCK Legacy Co MNIQQ 7.150 1.998 11/1/2027
Jonah Energy LLC / Jonah
Energy Finance Corp JONAHE 7.250 11.125 10/15/2025
Jonah Energy LLC / Jonah
Energy Finance Corp JONAHE 7.250 11.256 10/15/2025
K Hovnanian Enterprises HOV 5.000 10.743 2/1/2040
K Hovnanian Enterprises HOV 5.000 10.743 2/1/2040
LSC Communications Inc LKSD 8.750 14.500 10/15/2023
LSC Communications Inc LKSD 8.750 14.220 10/15/2023
Liberty Media Corp LMCA 2.250 47.250 9/30/2046
Lonestar Resources America LONE 11.250 16.999 1/1/2023
Lonestar Resources America LONE 11.250 17.455 1/1/2023
MAI Holdings Inc MAIHLD 9.500 16.094 6/1/2023
MAI Holdings Inc MAIHLD 9.500 16.094 6/1/2023
MAI Holdings Inc MAIHLD 9.500 16.094 6/1/2023
MBIA Insurance Corp MBI 11.535 23.000 1/15/2033
MBIA Insurance Corp MBI 11.535 23.000 1/15/2033
MF Global Holdings Ltd MF 6.750 15.625 8/8/2016
MF Global Holdings Ltd MF 9.000 15.625 6/20/2038
Macy's Retail Holdings LLC M 6.900 4.902 4/1/2029
Mashantucket Western
Pequot Tribe MASHTU 7.350 16.000 7/1/2026
Men's Wearhouse Inc/The TLRD 7.000 2.000 7/1/2022
Men's Wearhouse Inc/The TLRD 7.000 1.370 7/1/2022
NWH Escrow Corp HARDWD 7.500 41.875 8/1/2021
NWH Escrow Corp HARDWD 7.500 41.875 8/1/2021
Nabors Industries Inc NBR 5.750 28.314 2/1/2025
Nabors Industries Inc NBR 0.750 23.000 1/15/2024
Nabors Industries Inc NBR 5.500 49.483 1/15/2023
Nabors Industries Inc NBR 5.750 28.544 2/1/2025
Nabors Industries Inc NBR 5.750 28.291 2/1/2025
Neiman Marcus
Group LLC/The NMG 7.125 3.951 6/1/2028
Neiman Marcus Group
LTD LLC / Neiman Marcus
Group LLC / Mariposa
Borrower / NMG NMG 8.000 4.750 10/25/2024
Neiman Marcus Group
LTD LLC / Neiman Marcus
Group LLC / Mariposa
Borrower / NMG NMG 14.000 27.250 4/25/2024
Neiman Marcus Group
LTD LLC / Neiman Marcus
Group LLC / Mariposa
Borrower / NMG NMG 8.750 5.155 10/25/2024
Neiman Marcus Group
LTD LLC / Neiman Marcus
Group LLC / Mariposa
Borrower / NMG NMG 8.000 4.727 10/25/2024
Neiman Marcus Group
LTD LLC / Neiman Marcus
Group LLC / Mariposa
Borrower / NMG NMG 14.000 27.250 4/25/2024
Neiman Marcus Group
LTD LLC / Neiman Marcus
Group LLC / Mariposa
Borrower / NMG NMG 8.750 5.155 10/25/2024
Neiman Marcus Group Ltd NMG 8.000 58.750 10/15/2021
Neiman Marcus Group Ltd NMG 8.750 53.625 10/15/2021
Neiman Marcus Group Ltd NMG 8.750 53.625 10/15/2021
Neiman Marcus Group Ltd NMG 8.000 58.750 10/15/2021
Nine Energy Service Inc NINE 8.750 29.408 11/1/2023
Nine Energy Service Inc NINE 8.750 29.532 11/1/2023
Nine Energy Service Inc NINE 8.750 29.963 11/1/2023
Northwest Hardwoods Inc HARDWD 7.500 35.750 8/1/2021
Northwest Hardwoods Inc HARDWD 7.500 35.250 8/1/2021
OMX Timber Finance
Investments II LLC OMX 5.540 0.573 1/29/2020
Oasis Petroleum Inc OAS 6.875 14.576 3/15/2022
Oasis Petroleum Inc OAS 6.875 14.683 1/15/2023
Oasis Petroleum Inc OAS 2.625 15.550 9/15/2023
Oasis Petroleum Inc OAS 6.250 14.106 5/1/2026
Oasis Petroleum Inc OAS 6.500 17.336 11/1/2021
Oasis Petroleum Inc OAS 6.250 14.106 5/1/2026
Occidental Petroleum Corp OXY 1.504 96.830 8/13/2021
Optimas OE Solutions
Holding LLC / Optimas
OE Solutions Inc OPTOES 8.625 55.000 6/1/2021
Optimas OE Solutions
Holding LLC / Optimas
OE Solutions Inc OPTOES 8.625 55.081 6/1/2021
Party City Holdings Inc PRTY 6.125 24.750 8/15/2023
Party City Holdings Inc PRTY 6.125 35.911 8/15/2023
Peabody Energy Corp BTU 6.000 64.982 3/31/2022
Pride International LLC VAL 6.875 7.570 8/15/2020
Pride International LLC VAL 7.875 10.125 8/15/2040
QEP Resources Inc QEP 6.875 102.340 3/1/2021
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Revlon Consumer
Products Corp REV 5.750 32.194 2/15/2021
Revlon Consumer
Products Corp REV 6.250 12.553 8/1/2024
Rolta LLC RLTAIN 10.750 4.729 5/16/2018
SESI LLC SPN 7.750 17.783 9/15/2024
SESI LLC SPN 7.125 15.851 12/15/2021
SESI LLC SPN 7.125 40.250 12/15/2021
SanDisk LLC SNDK 0.500 92.167 10/15/2020
SandRidge Energy Inc SD 7.500 0.500 2/15/2023
Sears Holdings Corp SHLD 6.625 3.938 10/15/2018
Sears Holdings Corp SHLD 6.625 3.990 10/15/2018
Sears Roebuck Acceptance SHLD 7.000 0.608 6/1/2032
Sears Roebuck Acceptance SHLD 6.500 0.731 12/1/2028
Sears Roebuck Acceptance SHLD 6.750 0.495 1/15/2028
Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014
Senseonics Holdings Inc SENS 5.250 33.500 1/15/2025
Senseonics Holdings Inc SENS 5.250 45.750 2/1/2023
Summit Midstream Partners SMLP 9.500 15.250 N/A
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Tesla Energy Operations TSLAEN 3.600 93.005 11/5/2020
Tilray Inc TLRY 5.000 41.000 10/1/2023
Transworld Systems Inc TSIACQ 9.500 27.000 8/15/2021
Ultra Resources Inc/US UPL 11.000 5.750 7/12/2024
Voyager Aviation
Holdings LLC /
Voyager Finance Co VAHLLC 8.500 50.254 8/15/2021
Voyager Aviation
Holdings LLC /
Voyager Finance Co VAHLLC 8.500 51.411 8/15/2021
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***