/raid1/www/Hosts/bankrupt/TCR_Public/201001.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, October 1, 2020, Vol. 24, No. 274
Headlines
24 HOUR FITNESS: S&P Assigns 'CCC+' Rating to $515MM DIP Facility
323-327 MAIN ST: Case Summary & 5 Unsecured Creditors
38 MARKET ST: Case Summary & 4 Unsecured Creditors
450 S. WESTERN: Oct. 14 Auction of Los Angeles Property Set
ACADIA HEALTHCARE: Moody's Rates New Sr. Unsec. Notes 'B3'
AERO-MARINE: Vaughns' $410K Punta Gorda Property Sale to Deco OK'd
AHEAD DB: S&P Affirms 'B' Issuer Credit Rating; Outlook Stable
ALLIANCE LAUNDRY: Moody's Assigns B2 CFR, Outlook Stable
ALLIANCE LAUNDRY: S&P Assigns 'B' ICR; Outlook Stable
AMERICAN AGAPE: S&P Cuts Debt Rating to CCC+ on Increased Expenses
ARENA ENERGY: Gets Court Permission for $1-Bil. Chapter 11 Sale
ARKLOW LIMITED: Wins November 30 Plan Exclusivity Extension
ARRAY TECHNOLOGIES: S&P Assigns 'B+' ICR, Outlook Stable
ASCENA RETAIL: $40.8M Sale of Catherines Assets to FullBeauty OK'd
ASCENA RETAIL: Closes More Justice Stores as Part of Bankruptcy
ASCENA RETAIL: S&P Assigns 'B-' Rating to $312.343MM DIP Term Loan
ASCENA RETAIL: Sycamore Bids for Lane Bryant, Loft & Ann Taylor
ASP NAVIGATE: S&P Assigns B- Issuer Credit Rating; Outlook Stable
ATHEROTECH INC: Takes Malpractice Suit to 11th Circuit
AZALEA TOPCO: S&P Assigns 'B' Rating to $180MM First-Lien Term Loan
B NO. 220 CORPORATION: Case Summary & 30 Top Unsecured Creditors
BEEBE RIVER: $320K Sale of 8 Campton Parcels to Driscoll Approved
BOARDRIDERS INC: S&P Raises ICR to 'CCC'; Outlook Negative
BORGER ENERGY: S&P Affirms 'B-' Rating on $117MM Sr. Secured Bonds
BUZZARDS BENCH: Auction Cancelled, Failed to Attract Viable Bids
BUZZARDS BENCH: Court Extends Plan Exclusivity Thru Oct. 30
CACHET FINANCIAL: Plan Exclusivity Period Extended Until Nov. 19
CALIFORNIA PIZZA: Oct. 8 Auction of All Assets Set
CALPINE CORP: S&P Upgrades ICR to 'BB-' on Improved Leverage
CENTENNIAL HOTEL: Proposed Sale of All Assets for $3.2M Denied
CHF COLLEGIATE HOUSING: S&P Cuts 2014A Revenue Bond Rating to 'BB+'
CHG PPC: S&P Raises ICR to 'B' on Strong Recovery; Outlook Stable
CHISHOLM OIL: Court OKs Bankruptcy Plan, Sheds 93% of Debt
CLEARPOINT CHEMICALS: Case Summary & 20 Top Unsecured Creditors
COMSTOCK RESOURCES: S&P Upgrades ICR to 'B'; Outlook Stable
CROWN SUBSEA: S&P Hikes Term Loan Rating to 'BB-', Affirms 'B' ICR
DARLING INGREDIENTS: Moody's Alters Outlook on Ba2 CFR to Pos.
DCG ACQUISITION: Moody's Alters Outlook on B3 CFR to Negative
DEAN & DELUCA: Seeks Oct. 30 Plan Exclusivity Extension
DECO ENTERPRISES: Wins Plan Exclusivity Extension Thru November 30
DENBURY RESOURCES: Emerges from Chapter 11 Bankruptcy
DIMENSION DESIGN: Case Summary & 20 Largest Unsecured Creditors
E.W. SCRIPPS: S&P Places 'B' ICR on Watch Pos. on ION Media Deal
EDWARD DAWSON: Sale of Warden Properties for $3K Each Approved
ENVIVA PARTNERS: S&P Alters Outlook to Positive, Affirms 'BB-' ICR
FORTERRA FINANCE: Moody's Hikes CFR to B1, Outlook Stable
FOX VALLEY PRO: Menominee Nation Arena Exits Chapter 11
FREEDOM MORTGAGE: S&P Alters Outlook to Stable, Affirms 'B-' ICR
FRONTIER COMMUNICATIONS: S&P Assigns Prelim B- ICR, Outlook Stable
GALAXY NEXT: Incurs $14 Million Net Loss in Fiscal 2020
GARRETT MOTION: Junior Creditors Mulling Rival Proposal
GARRETT MOTION: Wants to Move Honeywell Case to Bankruptcy Court
GDS TRANSPORT: Oct. 1 Hearing on Sale of 32 Crusader Buses
GEORGIA DIRECT: $275K Sale of MS' Richmond Property to KT Approved
GEORGIA DIRECT: $612K Sale of MS' Richmond Property to KT Approved
GNC HOLDINGS: Closes Permanently Santa Monica Location
HAWAIIAN HOLDINGS: Signs $420M Loan Agreement with Treasury
HERMITAGE OFFSHORE: Oct. 7 Auction of All Assets Set
HERTZ GLOBAL: Backs New $400M ABS Deal to Restock Vehicle Fleet
HOSANNA BUILDING: Case Summary & 20 Largest Unsecured Cr
IMPRESA HOLDINGS: Files Chapter 11 Due to COVID-19 & 737 Max
INTELSAT SA: Plan Exclusivity Extended Until February
JIMMY LEE THRASH: Rep's $6/Sq. Ft. Sale of Pearl Property Approved
KAR AUCTION: S&P Affirms 'B' Issuer Credit Rating; Outlook Negative
KB US HOLDINGS: Says Buyer Wants to Reject Union Deals
KRAFT HEINZ: S&P Alters Outlook to Stable, Affirms 'BB+' ICR
LAREDO INVESTMENTS: $545K Las Vegas Property Sale to Muckleroy OK'd
LEHMAN BROS: Announces 21st Distribution to Unsecured Creditors
LOANCORE CAPITAL: S&P Affirms 'B' Long-Term ICR; Outlook Negative
MARIANINA OIL: Abandoned Gas Station Owner Files for Chapter 11
MATCHBOX FOOD: Oct. 1 Hearing on Bidding Procedures for All Assets
MAVATAR TECHNOLOGIES: Hilco Selling Patents & Other IP Assets
MERIDIAN MARINA: Plea to Clarify Assets Sale Order Denied as Moot
MIDTOWN CAMPUS: Plan Exclusivity Extended Thru December 7
MKJC AUTO GROUP: Plan Exclusivity Extended Thru January 4
MODELL'S SPORTING: Exit Plan Offers Little Relief to Unsecureds
MONROE COMMUNITY COLLEGE: S&P Lowers 2014AB Bonds Rating to 'BB+'
MORIAH POWDER: Wants Plan Exclusivity Extended Thru April 2021
NATIONAL MEDICAL: Seeks 2021 Exclusivity Extension Amid Bank Row
NEIMAN MARCUS: Cuts Store Employees Amid Business Assessment
NEIMAN MARCUS: Emerges From Chapter 11 Bankruptcy
NEIMAN MARCUS: Plan Exclusivity Extended Thru Dec. 3
NEW ACADEMY HOLDING: S&P Hikes ICR to B- on Lower Refinancing Risks
NEWS-GAZETTE: Wins Approval of Liquidation Plan
NPC INTERNATIONAL: Court OKs Auction for Wendy's & Pizza Hut Assets
NPC INTL: Nov. 18, Nov. 30, & Dec. 1 Auction of Assets Set
OASIS PETROLEUM: Bonds Increases After Filing Chapter 11 Bankruptcy
OASIS PETROLEUM: Case Summary & 30 Largest Unsecured Creditors
OCTAVE MUSIC: S&P Affirms 'B-' ICR; Outlook Negative
P8H, INC: Bankruptcy Trustee Sues Former Board Member
POTOMAC CONSTRUCTION: Sale of DC Property to BWF Trust Approved
Q'MAX AMERICA: Trustee's De Minimis Transaction Procedures Approved
RALPH MARRA: $260K Sale of RJRM's Hoosick Falls Property Approved
REMINGTON OUTDOOR: Furloughs 600 Employees in Ilion, NY
ROBERT D. SPARKS: $108K Sale of State Line Place to Wares Approved
RUBIE'S COSTUME: Court Approves $140M Sale to Atalaya Unit
RYAN ENVIRONMENTAL: Case Summary & 20 Largest Unsecured Creditors
SABRE INDUSTRIES: S&P Upgrades ICR to 'B+' on Reduced Leverage
SACRAMENTO CITY UNIFIED SCHOOL: S&P Affirms BB+ SPUR on Rev. Bonds
SHILOH INDUSTRIES: Court Gives Green Light on its Ch. 11 Sale Plan
SHILOH INDUSTRIES: Oct. 29 Auction of All Assets Set
STEPHEN GOLDBERG: $1.5M Sale of Clarksville Property to Allens OK'd
SUMMIT MIDSTREAM: S&P Cuts ICR to 'SD' on Distressed Debt Exchange
TAILORED BRANDS: Files Amended Bankruptcy Plan
THOMPSON NATIONAL: Solicitation Period Extended Thru October 15
TROIANO TRUCKING: Recycleworks Can't Proceed w/ Assets Remediation
TUMBLEWEED TINY: Court Extends Plan Exclusivity Until November 12
TZEW HOLDCO: Plan Exclusivity Period Extended Thru December 4
U.S. OUTDOOR HOLDING: Seeks to Use Cash Collateral
URSA PICEANCE: Nov. 6 Auction of Substantially All Assets Set
VALARIS PLC: Asks Court Permission to Tap $500M Bondholders' Funds
WEST DEPTFORD: S&P Alters Outlook to Negative, Affirms 'BB-' Rating
WILLCO X: Hilton Hotel in Thornton, CO Owner Enters Chapter 11
WP REALTY: Mired by Bankruptcy & Litigation
[*] Store Closures & Bankruptcies Hit Record in 1st Half of 2020
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
24 HOUR FITNESS: S&P Assigns 'CCC+' Rating to $515MM DIP Facility
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S&P Global Ratings assigned its point-in-time 'CCC+' issue-level
rating to the $515 million debtor-in-possession (DIP)
facility--consisting of a $250 million new-money amount, $250
million roll-up, and $15 million backstop commitment
premium--provided to 24 Hour Fitness Worldwide Inc. The company has
been under Chapter 11 bankruptcy protection since its filing on
June 15, 2020.
S&P said, "Our 'CCC+' issue-level rating on 24 Hour Fitness' DIP
term loan reflects our view of the credit risk borne by DIP
lenders. This includes our debtor credit profile (DCP)
assessment, the prospects for full repayment through reorganization
and emergence from Chapter 11 via our capacity for repayment at
emergence (CRE) assessment, and the potential for full repayment in
a liquidation scenario via our additional protection in a
liquidation scenario (APLS) assessment.
"Our 'b-' DCP reflects the combination of 24 Hour Fitness'
vulnerable business risk profile, highly leveraged financial risk
profile, and potential for difficulty covering even reduced debt
service and restructuring costs if revenue underperforms our
base-case forecast. We expect 24 Hour Fitness will not generate
positive EBITDA or free cash flow until mid-2021. However,
underperformance relative to our base-case scenario in
higher-than-expected member attrition or further mandated or
voluntary club closures as a result of the COVID-19 pandemic may
leave the company vulnerable to a liquidity crisis while in Chapter
11 bankruptcy protection, even if it defers payments to its
landlords under these closures.
"Our CRE assessment of weak coverage of the DIP debt in an
emergence scenario indicates coverage between 100% and 115%. The
emergence scenario leads to a one-notch downward adjustment from
the DCP, reflecting risks related to weak coverage of the DIP
financing by our estimated enterprise value of the restructured
firm. We view repayment prospects for purposes of the CRE
assessment on the basis that all of the DIP facilities are required
to be repaid in full in cash at emergence, consistent with their
superpriority status under the U.S. Bankruptcy Code.
"Our APLS assessment indicates insufficient coverage of the DIP in
a liquidation scenario. Fitness clubs operate under an asset-lite
business model, thus we estimate a total liquidation value of about
$187 million, which covers 36% of the assumed DIP loan outstanding
at emergence. As a result, 24 Hour Fitness does not qualify for an
additional notch of uplift for the APLS modifier.
"We included the maturity of 24 Hour Fitness' DIP facilities as a
use of cash in our liquidity calculation due to the weak CRE, and
we assess liquidity as weak. We do not believe this factor alone
warrants a DCP lower than 'b-' as this risk is adequately reflected
by our one-notch lowering of the DIP facility rating based on the
CRE assessment. We also do not believe the company will encounter a
short-term liquidity crisis under our base-case forecast, in which
it emerges from Chapter 11 by the end of 2020. Even so, liquidity
is extremely tight, with 24 Hour Fitness running out of cash in
early 2021 if emergence is delayed beyond December. Further delays
to revenue recovery including mandated club closures from the
COVID-19 pandemic or faster-than-expected member attrition could
result in a near-term liquidity crisis that would jeopardize 24
Hour Fitness' ability to successfully emerge from Chapter 11
without an additional liquidity source or full or partial deferrals
of debt service.
"We attribute 24 Hour Fitness' bankruptcy filing to liquidity
pressure caused by club closures amid the COVID-19 pandemic,
combined with operational missteps modernizing its high-pressure
sales model that reduced membership pre-pandemic." As part of its
restructuring, 24 Hour Fitness made significant efforts to
rationalize its club footprint, rejecting leases and closing clubs
with histories of poor operating performance. Additionally, like
many fitness operators, it has worked with landlords to defer or
abate rents while clubs are closed. However, despite these changes,
24 Hour Fitness is unlikely to generate positive EBITDA and cash
flow until mid-2021 due to ongoing member attrition, reduced
club-level revenue amid ongoing consumer apprehension about
returning to the gym while the COVID-19 pandemic continues,
continuing high unemployment, and a lack of consumer stimulus.
Further club closures or additional increases in COVID-19 cases
could materially worsen 24 Hour Fitness' recovery pathway,
significantly pressuring liquidity. That could delay positive
EBITDA and cash flow relative to our base case. 24 Hour Fitness is
also likely to face significant competitive pressure over the next
few years as budget and boutique fitness operators and at-home
fitness alternatives provide attractive alternatives to mid-tier
fitness operators. S&P believes the company's materially reduced
club footprint, and member attrition problems before COVID-19
materially impaired its business risk profile, which we revised to
vulnerable from weak. This reflects:
-- High geographic concentration in California, which will account
for approximately 60% of the company's clubs, compared to about 50%
prepetition.
-- Low barriers to entry and high customer attrition rates typical
of the fitness club industry.
-- A small revenue base and operating footprint relative to its
rated peers. This may also reduce convenience for members, as club
clustering benefits will likely be diminished.
-- Poor operating efficiency reflected through membership declines
and lower operating margin than rated peers, even before the
COVID-19 pandemic.
-- Limited brand differentiation than some other fitness
operators. Other operators have consistently attracted and retained
members through some combination of brand identity and high
customer brand affinity, luxury amenities, boutique class or
equipment offerings, or low prices.
S&P said, "Our assessment of 24 Hour Fitness' financial risk
reflects its significantly reduced debt burden ($515 million DIP
debt) in bankruptcy as a result of the stay on prepetition debt
($1.43 billion at the time of filing), offset by our expectation of
negative EBITDA and cash flow over the next 12 months. However,
we believe even this could be unsustainable and result in
insolvency, as 24 Hour Fitness may not attract sufficient exit
financing. Under our criteria, replacing cash interest with
payment-in-kind interest without offsetting compensation to
lenders, which the company has done for its $250 million roll-up
facility, would be considered a selective default; our 'CCC+' DIP
rating reflects the risk 24 Hour Fitness may need to further modify
the terms of its DIP credit agreements to preserve liquidity."
323-327 MAIN ST: Case Summary & 5 Unsecured Creditors
-----------------------------------------------------
Debtor: 323-327 Main St LLC
811 Totowa Rd
Ste 2
Totowa, NJ 07512-1207
Business Description: 323-327 Main St LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)). The company owns a
real property located at 323 Main St # 327,
Paterson, NJ valued at $4.32 million.
Chapter 11 Petition Date: September 30, 2020
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 20-21121
Debtor's Counsel: John O'Boyle, Esq.
NORGAARD, O'BOYLE & HANNON
184 Grand Ave
Englewood, NJ 07631-3578
Email: joboyle@norgaardfirm.com
Total Assets: $4,325,000
Total Liabilities: $4,232,013
The petition was signed by Jennifer Iturralde Pina, member.
A copy of the petition containing, among other items, a list of the
Debtor's five unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/7STBT3A/323-327_Main_St_LLC__njbke-20-21121__0001.0.pdf?mcid=tGE4TAMA
38 MARKET ST: Case Summary & 4 Unsecured Creditors
--------------------------------------------------
Debtor: 38 Market St., LLC
811 Totowa Rd
Ste 2
Totowa, NJ 07512-1207
Business Description: 38 Market St., LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)). The company owns a
property located at 36 Market St # 38,
Paterson, NJ valued at $1.12 million.
Chapter 11 Petition Date: September 30, 2020
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 20-21126
Debtor's Counsel: John O'Boyle, Esq.
NORGAARD, O'BOYLE & HANNON
184 Grand Ave
Englewood, NJ 07631-3578
Email: joboyle@norgaardfirm.com
Total Assets: $1,125,000
Total Liabilities: $4,135,229
The petition was signed by Jennifer Iturralde Pina, sol member.
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/JBNE2ZI/38_Market_St_LLC__njbke-20-21126__0001.0.pdf?mcid=tGE4TAM
450 S. WESTERN: Oct. 14 Auction of Los Angeles Property Set
-----------------------------------------------------------
Judge Ernest M. Robles of the U.S. Bankruptcy Court for the Central
District of California will convene a hearing on Oct. 14, 2020 at
10:00 a.m. (PST) to consider 450 S. Western, LLC's bidding
procedures in connection with the sale of the real property,
located at 450 S. Western, Los Angeles, California, APN
5503-014-020, to Evergreen Capital Assets LP pursuant to the terms
and conditions of their Purchase and Sale Agreement for $45,591,000
cash, plus, a credit bid, subject to overbid.
The Debtor proposed to sell the Property on an "as is, where is"
basis, free and clear of liens, claims, interests and
encumbrances.
G450, LLC, Pontis Capital, LLC, and Five West Capital, LP, assert
that the promissory notes entered into by the Debtor are secured by
first, second, and third position deeds of trust recorded on July
19, 2013, Sept. 4, 2014 and May 14, 2015, respectively.
The liens and encumbrances affecting the Property are:
a. Los Angeles County Treasurer and Tax Collector (2019-2020
and prior) ($2,157,568) - $2,157,568
b. Los Angeles County Treasurer and Tax Collector (2020-2021
tax year) ($179,458) - $179,458
c. G450 ($31,205,507) - TBD1
d. Pontis ($5,082,515) - $5,082,515
e. Five West ($6,352,944) - $6,352,944
f. New Creation Engineering and Builders, Inc. ($1,371,433) -
$1,371,433
g. One Stop Financial Consulting, Inc. ($93,167) - $0
h. Philmont Management, Inc. ($2,361,878) - $0
The Debtor retained CBRE, Inc. as its real estate agent to assist
it in marketing and selling the Property.
Pursuant to Section 3.1 of the PSA, the Proposed Buyer has wired $1
million as an earnest money deposit to the escrow company. The
Proposed Buyer has waived all contingencies, except as otherwise
set forth in the PSA.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 12, 2020 at 5:00 p.m. (PST)
b. Initial Bid: At least $50 million cash
c. Deposit: $1 million
d. Auction: The Debtor will conduct an Auction for the
Property at the U.S. Bankruptcy Court for Central District of
California, Los Angeles Division, Courtroom 1568, 255 E. Temple
St., Los Angeles, CA 90012 on Oct. 14, 2020 at 10:00 a.m., or at
such other date and time as ordered by the Court.
e. Bid Increments: $100,000
f. Sale Hearing: Immediately following the Auction
g. Closing: Oct. 29, 2020
h. Break-Up Fee: $500,000
Notwithstanding the mailing of the Motion and related documents on
Sept. 24, 2020, the deadline for any interested parties to respond
to the Motion will remain Sept. 30, 2020.
A copy of the Bidding Procedures is available at
https://tinyurl.com/yy2lm3da from PacerMonitor.com free of charge.
About 450 S. Western, LLC
450 S. Western, LLC, is the owner and operator of a three-story,
80,316 sq. ft. shopping center -- commonly known as California
Marketplace -- located at the intersection of South Western Avenue
and 5th Street in the heart of Koreatown. The shopping center has
been a staple in the Los Angeles Korean community and is home to 28
thriving and popular stores, restaurants, and retail shops.
450 S. Western sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. C.D. Cal. Case No. 20-10264) on Jan. 10, 2020. At the
time of the filing, the Debtor disclosed assets of between $50
million and $100 million and liabilities of the same range. The
Debtor is a single asset real estate debtor (as defined in 11
U.S.C. Section 101(51B)).
Judge Ernest M. Robles oversees the case.
The Debtor has tapped Arent Fox, LLP as legal counsel; the Law
Offices of Daniel M. Shapiro, as special litigation counsel; and
Wilshire Partners of CA, LLC as financial advisor.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors in the Debtor's case on Feb. 4, 2020. The
committee is represented by Lewis Brisbois Bisgaard & Smith, LLP.
ACADIA HEALTHCARE: Moody's Rates New Sr. Unsec. Notes 'B3'
----------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Acadia Healthcare
Company, Inc.'s new senior unsecured notes. The rating agency
affirmed Acadia's B2 Corporate Family Rating (CFR) and B2-PD
Probability of Default Rating. Moody's upgraded Acadia's existing
senior secured ratings to Ba2 from Ba3 and its senior unsecured
ratings to B3 from Caa1. There was no change to Acadia's
Speculative Grade Liquidity Rating of SGL-3. The outlook is
stable.
Proceeds from the new senior unsecured notes will be used to
refinance the company's term loan B-3 maturity that comes due in
February 2022. The affirmation reflects Moody's views that the
proposed transaction is modestly credit positive, as it will reduce
refinancing risk in a leverage-neutral manner. Acadia's adjusted
debt/EBITDA approximated 6.1 times as of June 30, 2020. The
upgrades of the senior secured and unsecured ratings are driven by
the Loss Given Default for Speculative-Grade Companies Methodology
and reflect changes in the capital structure composition.
While Moody's believes that the coronavirus impact on Acadia will
be moderate relative to other healthcare providers, the pandemic
will nonetheless be a headwind, constraining the company's ability
to materially grow earnings. Further, Moody's believes the company
will continue to deploy a significant portion of its cash flow
towards growth cap-ex in lieu of debt repayment. While the
potential sale of the underperforming UK business offers an
opportunity for deleveraging, the timing of such an event is
uncertain, in light of global disruption caused by the pandemic.
Acadia Healthcare Company, Inc.
Ratings assigned:
New senior unsecured notes due 2029 at B3 (LGD5)
Ratings affirmed:
Corporate Family Rating at B2
Probability of Default Rating at B2-PD
Ratings upgraded:
Senior secured revolving credit facility expiring 2021 to Ba2
(LGD2) from Ba3 (LGD2)
Senior secured term loan due 2021 to Ba2 (LGD2) from Ba3 (LGD2)
Senior secured term loan due 2023 to Ba2 (LGD2) from Ba3 (LGD2)
Senior unsecured notes due 2023 to B3 (LGD5) from Caa1 (LGD5)
Senior unsecured notes due 2024 to B3 (LGD5) from Caa1 (LGD5)
Senior unsecured notes due 2028 to B3 (LGD5) from Caa1 (LGD5)
Ratings upgraded that will be withdrawn upon close:
Senior secured term loan due 2022 to Ba2 (LGD2) from Ba3 (LGD2)
RATINGS RATIONALE
The B2 CFR is constrained by Acadia's high financial leverage as
well as its reliance on government reimbursement, both in the
United States (Medicare and Medicaid) and in the United Kingdom
(National Health Service). Acadia also has exposure to fluctuations
in the British pound and changes in economic conditions in the UK.
There are also risks associated with the rapid pace of growth
through acquisitions, opening of new facilities and the addition of
new beds in existing facilities. Further, the continuing spread of
the coronavirus will temporarily reduce patient volumes at Acadia's
behavioral health facilities.
The B2 rating is supported by the company's large scale and good
business and geographic diversity within the behavioral health care
industry. It is also supported by attractive industry fundamentals,
including growing demand for services and increasing willingness of
payors, including governments, to pay for behavioral health and
addiction treatment services. The B2 rating is also supported by
the company's strong operating cash flow and good liquidity.
The stable outlook reflects the non-elective nature of Acadia's
services, good scale and diversity by geography and behavioral
service line. These factors will help to partially mitigate the
company's high financial leverage, which is unlikely to decline in
the near-term due to the impact of the coronavirus on patient
volumes and costs.
As an operator of inpatient behavioral health hospitals, Acadia
faces high social risk. Any incident, such as a patient fatality or
a patient not receiving appropriate care at one of Acadia's
facilities, can result in increased regulatory burdens, government
investigations, and negative publicity. Acadia also has
environmental risk associated with inclement weather and natural
disasters. For example, Hurricane Dorian weakened patient volumes
in some of the company's North Carolina and Florida facilities in
September 2019, while wildfires in California in October 2019
necessitated the evacuation of three of the company's facilities
and dampened the patient volumes of others. From a governance
perspective, the significant amount of capital that Acadia has
allocated to acquisitions and new bed additions has not yet
demonstrated adequate returns, given that Acadia's LTM EBITDA as of
June 30, 2020 is below where it was in 2016.
The Speculative Grade Liquidity Rating of SGL-3 rating incorporates
upcoming debt maturities and rising refinancing risk. The company
has a $500 million senior secured revolving credit facility and
$333 million of term loan debt that mature in November 2021. That
said, Moody's expects that Acadia will maintain adequate liquidity
over the next 12-18 months. Liquidity is supported by strong cash
flow after maintenance capex (before growth capex) and significant
availability on the revolving credit facility. The company has
three financial maintenance covenants, the tightest of which is the
total net leverage covenant which has step-downs beginning at the
end of 2020. Moody's expects the cushion under this covenant will
decline meaningfully in 2021. That said, Moody's recognizes that
the company has flexibility to sell assets or reduce growth capex
in order to reduce debt and improve covenant cushion and liquidity.
Liquidity will also benefit from the CARES Act and other government
programs, which will provide both grant funding and advanced
Medicare payments to Acadia.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if debt to EBITDA is expected to be
sustained above 6.5 times. Adverse reimbursement developments could
also result in a rating downgrade. Moody's could also downgrade the
ratings if Acadia's financial policy becomes more aggressive, with
respect to the use of leverage for acquisitions or shareholder
returns. Finally, a downgrade could occur if liquidity weakens.
The ratings could be upgraded if the company reduces and sustains
debt/EBITDA below 5.5 times and balances expansion opportunities
and acquisitions with debt reduction. Reduced reliance on Medicaid
and the UK's National Health Service (NHS) would also support an
upgrade.
Acadia is a provider of behavioral health care services. Acadia
provides psychiatric and chemical dependency services to its
patients in a variety of settings, including inpatient psychiatric
hospitals, residential treatment centers, outpatient clinics and
therapeutic school-based programs. Acadia operates behavioral
health facilities spanning across the US, Puerto Rico, England,
Wales, and Scotland. As of June 30, 2020, Acadia generated LTM
revenue of approximately $3.1 billion.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
AERO-MARINE: Vaughns' $410K Punta Gorda Property Sale to Deco OK'd
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Judge Caryl E. Delano of the U.S. Bankruptcy Court for Middle
District of Florida authorized Joseph N. Vaughn and Theresa L.
Vaughn, affiliates of Aero-Marine Technologies, Inc., to sell the
real property located at 8231 Burnt Store Rd, Punta Gorda, Florida
to Deco Products of Florida, LLC, doing business as Superior
Quality Coatings, LLC for $410,000.
A hearing on the Motion was held on Aug. 24, 2019, at 2:00 p.m.
The sale is free and clear of any and all liens, claims,
encumbrances and interests, in with the terms of the "As Is"
Residential Contract for Sale and Purchase.
The Debtors will be responsible for the Closing Costs as further
detailed in the Contract, which will be paid from the proceeds from
the sale at the Closing.
The remainder of the proceeds after payment of the Closing Costs
will be distributed at closing to Central Bank on account of its
lien. The payment received by Central Bank will be applied to
reduce Central Bank's secured claim. Central Bank agrees to the
entry of the Order.
Notwithstanding Bankruptcy Rule 6004(g), and 6006(d) and 7062, the
Order is effective and enforceable immediately upon entry and there
is no reason for delay in its implementation.
About Aero-Marine Technologies
Aero-Marine Technologies, Inc. --
https://www.aero-marinetechnologies.com/ -- provides total support
for waste and water system components found on Boeing, Airbus and
Embraer aircraft. Aero-Marine Technologies is a full-service
Maintenance, repair and overhaul (MRO) with a worldwide customer
base.
Aero-Marine Technologies sought bankruptcy protection under Chapter
11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-07547) on
Aug. 9, 2019. The Debtor's case is jointly administered to that of
Joseph N. Vaughn and Theresa L. Vaughn.
In the petition signed by Joseph N. Vaughn, president,
Aero-Marine's assets are estimated at $500,000 to $1 million, and
its liabilities at $1 million to $10 million.
The Hon. Caryl E. Delano is the case judge.
Stitchler, Riedel, Blain & Postler, P.A. is the Debtor's legal
counsel.
AHEAD DB: S&P Affirms 'B' Issuer Credit Rating; Outlook Stable
--------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
Chicago-based information technology (IT) solutions provider Ahead
DB Holdings LLC (doing business as AHEAD), and assigned its 'B'
issue-level and '3' recovery ratings to the company's new
first-lien senior secured credit facility. Additionally, S&P
assigned its 'CCC+' issue-level and '6' recovery ratings to the
company's second-lien senior secured credit facility.
The stable outlook reflects S&P's expectations for successful
acquisition integration and synergies realization, low- to
mid-single-digit percentage organic revenue growth supported by new
digital infrastructure and cloud deployments, and solid
profitability. It also reflects its expectation for adjusted
leverage to below 6x by the end of 2021 from above 7x at
transaction close.
S&P said, "Despite the sharp increase in debt, we expect AHEAD to
sustain adjusted leverage under our 6.0x threshold for the 'B'
rating.
"Following the transaction, we expect adjusted leverage will
increase to over 7x, up from the mid-4x area. However, we
anticipate the company will deleverage below 6x by the end of 2021,
due to a full year of earnings contributions from recent
acquisitions, the realization of roughly $10 million-$15 million of
acquisition synergies, and the conclusion of roughly $20 million of
integration costs in connection with the transaction. We expect
most synergies from the RoundTower acquisition to come from
duplicative general and administrative (G&A) functions and reduced
sales headcount. Kovarus has a leaner cost structure with a similar
product focus and margin profile to AHEAD, and we expect only
limited synergies from the acquisition."
The company has seen some volatility in the rebate environment, and
benefited from certain favorable rebate programs from Dell that
will not continue. Utilization rates have been steady for the
company as they are able to deploy engineers based on project
needs, and we have seen modest improvements in bill rates per hour.
S&P expects service margins for the existing AHEAD business to be
pressured by additional support costs, which will be partially
offset by improved service margins for RoundTower and Kovarus due
to improved productivity.
Additionally, the company has a record of debt-funded acquisitive
growth, and it could pursue further debt-funded acquisitions in the
future.
AHEAD has demonstrated steady operating performance despite the
significant economic downturn caused by the COVID-19 pandemic.
S&P said, "Year-to-date (YTD) as of June 30, 2020, the company has
roughly flat revenue, driven by ongoing demand for infrastructure
products such as servers and storage devices, and we expect pent-up
demand for data center upgrades from corporate customers to
contribute to low-single-digit growth for the company over the next
12 months. We expect high growth from public cloud solutions (which
make up roughly 10% of the current revenue mix) in the 20%-30%
range, as the business continues to scale. Exposure to
well-positioned end market verticals such as financial services,
health care, and technology, which make up nearly two-thirds of
revenue for the company, have insulated AHEAD during the recent
pandemic. A large, money center bank has been engaged in a
significant product refresh cycle with AHEAD over the last two
years, which has contributed to the recent high growth in
infrastructure products; however, we expect spending from this
customer to return to more normalized levels in 2021, weighing on
product revenues and partially offsetting revenue growth overall."
AHEAD's enhanced scale and capabilities position the company to
drive revenue growth in higher-value-added solutions such as
digital infrastructure, cloud, and enterprise service management
(ESM).
The acquisition of RoundTower adds additional cloud offerings,
improves geographic and customer diversification, and adds a
significant amount of services revenue. S&P said, "AHEAD has
meaningfully improved its scale over the last two years, mostly
through acquisitions, and we expect 2020 pro forma net revenues of
roughly $1.7 billion. We believe the improved scale and technical
expertise should provide a competitive advantage against smaller
participants and enable the company to gain market share."
S&P said, "Pro forma for the acquisitions, we expect AHEAD will
have roughly 10% - 15% of net revenue coming from services, a
relatively small amount when compared to similarly rated peers
Presidio Holdings Inc., SCS Holdings I Inc., and ConvergeOne
Holdings Inc. We view AHEAD's services to total revenue mix as
typical of value-added resellers (VARs). We expect low-double-digit
revenue growth from services in 2021 as delayed projects are
executed and the company ramps up growth investments."
AHEAD competes against significantly larger players in the highly
fragmented and competitive IT outsourced services industry, and has
significant supplier concentration.
S&P's rating reflects the fragmented and highly competitive
outsourced IT services industry, its relatively narrow product
solutions, and significant supplier concentration, with roughly 60%
of sales coming from DellEMC. The company derives most of its sales
from the U.S., with geographic concentration on the East Coast and
Central U.S.
Product resale is subject to pricing pressure because the industry
is fragmented, with smaller regional players competing on price.
Additionally, supplier costs can fluctuate based on the current
rebate environment, with different pricing incentives provided to
favored distributors. Roughly 60% of pro forma revenue is
concentrated in the resale of DellEMC infrastructure equipment and
software, which could cause earnings volatility if there is low
adoption of new products, longer refresh cycles, or other possible
disruptions in demand. Dell recently indicated the potential for a
spin-off of VMware, which could cause some disruption and
uncertainty among end market customers, even though VMware is a
relatively small percentage of overall revenue for AHEAD. S&P said,
"Ultimately, we believe Dell will remain committed to channel
distribution, with key relationships between the two companies
helping future commitments. The second-largest supplier
concentration comes from Cisco Systems, with roughly 20% of pro
forma revenues, and we expect higher growth in Cisco products
versus Dell."
S&P said, "The stable outlook reflects our expectations for
successful acquisition integration and synergies realization, low-
to mid-single-digit percentage organic revenue growth supported by
new digital infrastructure and cloud deployments, and solid
profitability. It also reflects our expectation for adjusted
leverage to below 6x by the end of 2021 from above 7x at
transaction close.
"We could lower the rating if AHEAD's revenue declines, potentially
due to a downturn in customer IT spending as a result of the
current pandemic, weak demand for Dell or EMC products, difficulty
integrating recent acquisitions, or lower profitability due to
increased competition leading to diminished operating earnings such
that leverage is sustained above 6x. This could also result from
the company pursuing additional debt-financed acquisitions or
shareholder returns.
"Although unlikely given its financial sponsor ownership, we could
raise the rating if EBITDA growth or debt repayment results in
sustained leverage below 4x. This would likely result from
better-than-expected performance or a meaningful increase in
revenues generated from higher-margin services, and be contingent
on management's commitment to maintain leverage at or below these
levels."
ALLIANCE LAUNDRY: Moody's Assigns B2 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investor Service assigned a B2 Corporate Family Rating and
a B2-PD Probability of Default Rating to Alliance Laundry Systems
LLC and a B2 rating to the company's proposed first lien senior
secured bank credit facility. The outlook is stable.
The credit facility, consisting of a $1,250 million first lien term
loan and $125 million revolver will be used to fund the refinancing
of existing debt and fund a distribution to repurchase a portion of
preferred equity owned by control shareholder, BDT Capital
Partners.
The assignment of the B2 Corporate Family Rating reflects the
company's high leverage following the transaction. Moody's
estimates leverage will be approximately 7.2x by the end of 2020.
However, Moody's expects credit metrics will improve as the company
grows and realizes benefits from cost reduction initiatives.
The following actions were taken:
Assignments:
Issuer: Alliance Laundry Systems LLC
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
$125 million 1st Lien Revolving Credit Facility due 2025, Assigned
B2 (LGD4)
$1,250 million 1st Lien Term Loan due 2027, Assigned B2 (LGD4)
Outlook Actions:
Issuer: Alliance Laundry Systems LLC
Outlook, Assigned Stable
RATINGS RATIONALE
Alliance Laundry Systems LLC's B2 Corporate Family Rating reflects
the company's high leverage and execution risk of expanding into
emerging markets augmented by bolt-on acquisitions. The rating also
reflects the company's scale allowing for a competitive advantage
along the supply chain and in negotiating long term customer
contracts, efficient access to the supply chain, diversified
product mix, global footprint, the non-cyclical nature of its
business, and the recurring revenue derived from its large global
commercial unit installed base.
The rating also incorporates Moody's consideration of governance
risks associated with the private equity ownership of the company.
Further, Moody's views the initial financial policies as aggressive
given the high pro forma leverage and funding from this transaction
to repurchase control shareholder owned preferred stock.
The stable outlook reflects Moody's expectation that the company
will continue grow organically and through acquisition, while
generating free cashflow that can be used for debt reduction.
Moody's also expects the company to maintain a good liquidity
profile.
Moody's expects the company to have a good liquidity profile over
the next 12 to 18 months characterized by availability under the
proposed $125 million revolving credit facility. Moody's expects
that the company will generate free cash that will be available to
repay revolver borrowings. The company also engages in the sale of
a portion of its receivables to fund its operations, which creates
securitized liabilities that are reflected in Moody's adj debt to
EBITDA calculation. Covenants in the first lien senior secured bank
credit facility are expected to include a maximum springing first
lien net leverage ratio of 7.75x applicable to the $125 million
revolver. There are no financial maintenance covenants on the term
loan. Moody's doesn't expect the company to trigger the test of the
covenant on the revolver.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
FACTORS THAT CAN LEAD TO A DOWNGRADE
-- Adjusted debt to EBITDA is above 6.25x for an extended period
-- Adjusted EBITA to Interest expense is below 2.0x for a
sustained period
-- The company's free cash and liquidity profile deteriorates
FACTORS THAT CAN LEAD TO AN UPGRADE
-- Adjusted debt to EBITDA below 5.0x for a sustained period
-- Adjusted EBITA to Interest expense is approaches 3.0x
-- The company improves its free cash flow and liquidity profile
Headquartered in Ripon, WI, Alliance Laundry Systems LLC was
originally founded in 1908. The company designs, manufactures, and
markets a line of commercial laundry equipment under various
brands, including Speed Queen, Primus, Huebsch, IPSO, and UniMac,
in over 100 countries. Its product offering consists of washers,
drying tumblers and ironers for the coin laundry, multi-housing
laundries, institutional laundries and for consumer residences.
The principal methodology used in these ratings was Manufacturing
Methodology published in March 2020.
ALLIANCE LAUNDRY: S&P Assigns 'B' ICR; Outlook Stable
-----------------------------------------------------
S&P Global Ratings assigned a 'B' issuer credit rating to
U.S.-based commercial laundry equipment manufacturer Alliance
Laundry Holdings LLC (Alliance). The outlook is stable.
S&P said, "In addition, we are assigning a 'B' issue-level rating
to the company's senior secured first-lien credit facilities,
including a $125 million revolving credit facility due 2025 and
$1.25 billion first-lien term loan due 2027. The recovery rating is
'3', reflecting our expectation for meaningful (50%-70%, rounded
estimate 65%) recovery in the event of default.
"The stable outlook reflects our expectation over the next year
that the company will generate stable topline and earnings growth
supported by replacement needs and sustain leverage about 7x.
"Our ratings on Alliance reflect the company's strong market
position and brand recognition, but also narrow product focus,
customer concentration, and raw material cost volatility. Alliance
has a leading market position and strong brand recognition in the
commercial laundry equipment and service industry. Market
participants include Electrolux and Whirlpool, both of which
possess greater scale and financial wherewithal. There is risk that
such competitors could enhance focus and investment in the space in
an effort to become more formidable players. Alliance manufactures
a full line of self-contained commercial laundry equipment,
primarily serving on premise laundries (OPL), laundromats,
multi-unit housing laundries, and retail consumers. We believe the
company's large installed base and the substantial entry capital
required to establish production create high barriers to entry. We
believe switching cost for distributors and route operators is high
due to extensive sales and service training needed to support the
manufacturer's products and investment in service parts inventory
to support the rapid response needs from end customers."
S&P also believes that the company's financing program is an
important component of marketing activities and provides a
competitive advantage in the North America market. The financing
program is offered primarily to laundromat owners to assist with
their purchase of equipment. The net write-off ratio in the loan
portfolio for equipment financing is very low due to strict
underwriting standards.
Nevertheless, the company has a narrow product focus as a niche
manufacturer of stand-alone commercial laundry equipment. The
company has some customer concentration, with its top ten customers
accounting for about 30% of its revenue in 2019 and its largest
customer representing less than 10% of its 2019 sales. S&P believes
the loss of any of these customers would have a material effect on
the company's operations.
Alliance is also exposed to raw material cost volatility, which is
partially offset by its long‐standing relationships with
customers and no significant turnover among distributors and route
operators. While the company uses hedging to contain cost
fluctuation for certain commodities such as nickel, copper, and
aluminum, it is still susceptible to raw material cost volatility,
which could negatively affect profitability.
S&P said, "Our ratings also reflect the controlling shareholder,
very aggressive financial policy and high leverage pro forma for
the transaction. We estimate financial leverage will be about 7x
pro forma at the close of the transaction. Our financial ratios are
captive-finance adjusted given the company's equipment financing
subsidiary's operations. We adjusted the financial ratios by
segregating the equipment financing activities from the core
operations. We treated the preferred equity as debt-like because it
pays a cash dividend annually and has a mandatory redemption date.
In addition, the economic incentive between the common equity and
non-common equity is not aligned."
COVID-19 negatively affected the company's business globally,
primarily in April and May. Both revenue and EBITDA in the second
quarter declined significantly due to declining demand amid the
pandemic. However, monthly performance has stabilized, with sales
in recent months being relatively flat year over year. S&P expects
credit metrics to weaken through the end of 2020, as softness
related to the COVID-19 pandemic lingers, and forecast modest
recovery in 2021 and 2022 levels to be similar to performance
levels before the COVID-19 pandemic.
S&P said, "We believe the company's financial policies are largely
driven by its controlling shareholder BDT Capital Partners and
management, and that those policies will likely prevent the company
from sustaining leverage below 5x for an extended time. Therefore,
while we expect credit metrics to moderately improve over time, we
believe the company will likely add leverage to make acquisitions
or distribute dividends to its shareholders.
"We expect the company's revenue growth to be relatively stable
because a majority of its sales are generated by replacement needs.
We believe Alliance is better positioned in a recession in the
durables space due to the nondiscretionary nature of its industry.
Alliance benefits from stable industry growth with predictable
demand. Its large installed base creates predictable demand based
on replacement needs, which lead to steady recurring sales.
Replacement sales present the majority of all equipment sales in
developed markets. We expect the stable, recurring trends of the
industry to persist, particularly in North America, where growth
prospects are low.
"We believe international expansion presents a growth opportunity.
The company currently generates about 34% of its sales outside of
North America. We believe international expansion presents future
growth opportunities due to increasing per capita income,
urbanization and high population density of emerging markets, and
income rising in line with GDP growth. Further penetration in high
growth emerging market will drive the upside potential in revenue
and margins. We also believe product innovation to be the driver of
future growth as operators seek to revitalize aging laundromats to
create more user-friendly laundromat experiences.
"The stable outlook reflects our expectation over the next year
that the company will generate stable topline and earnings growth
supported by replacement needs and sustain leverage about 7x. The
outlook also reflects our expectation that Alliance will not
exhibit a more aggressive financial policy through large
debt-financed dividends or acquisitions during the next 12 months,
which could increase financial leverage materially beyond our
expectations.
"We could lower our ratings if the company's operating performance
did not recover as expected, possibly due to a lingering impact of
the COVID-19 pandemic or increasing competition, resulting in lower
demand for the company's products or the loss of major customers,
and further resulting in leverage sustained above 7.5x at the end
of 2021. We could also lower our ratings if the company's financial
policy became more aggressive, with significant debt-financed
shareholder distributions or acquisitions.
"Although unlikely in the next 12 months, we could raise the
ratings if the company meaningfully increased scale and diversified
its product offering and geographic exposure. We could also raise
our ratings if the company's operating performance substantially
improved and we were confident that the company would adopt a less
aggressive financial policy, including sustaining leverage below
5x. An upgrade would also be predicated on a commitment from the
controlling shareholder not to pursue debt-financed dividends or
acquisitions that would lead to a meaningful deterioration of
credit ratios."
AMERICAN AGAPE: S&P Cuts Debt Rating to CCC+ on Increased Expenses
------------------------------------------------------------------
S&P Global Ratings lowered its long-term rating on the Public
Finance Authority, Wis.' series 2015A multifamily housing revenue
bonds, issued for American Agape Foundation Inc., Texas three
notches to 'CCC+' from 'B+'. At the same time, S&P Global Ratings
lowered its long-term rating on the authority's series 2015B bonds,
also issued for American Agape, two notches to 'CCC+' from 'B'. The
outlook is negative.
"The downgrade reflects an increase in expenses, which will weaken
adjusted net operating income and result in a precipitous decrease
in adjusted debt service coverage to below 1x in the past two
years," said S&P Global Ratings credit analyst Ki-Beom Park. We
think that the project is vulnerable and dependent on favorable
business and financial conditions to meet its financial
commitments. The issuer's financial commitments appear to be
unsustainable in the long term, although the issuer may not face a
debt service payment crisis in the next 12 months. The rating is no
longer under criteria observation.
The bond proceeds financed the acquisition and rehabilitation of
three multifamily rental housing properties, each owned by one of
three limited liability companies--the sole member of which is
Agape 2015 Portfolio, Inc., an affiliate of American Agape
Foundation. The properties, with a total of 327 units, are: Himbola
Manor in Lafayette, La.; Canaan Tower in Shreveport, La.; and Park
Lake in Fayetteville, Ark. As of fiscal year-end Dec. 31, 2019,
there remains $16.5 million in bonds outstanding.
We recognized that management has contributed about $4 million to
fix the project's deferred maintenance identified in the Real
Estate Assessment Center (REAC) report and pay annual debt service
to honor its obligations in full and on a timely basis. The
negative outlook reflects our view of the project's volatile
operational and financial performance trends.
The rating action incorporates our view regarding the elevated
health and safety risks posed by the COVID-19 pandemic on all
affordable age-restricted housing developments. Specifically, the
risk of increasing expenses and decreases in rental revenue related
to the social risks of the pandemic have been evaluated in our
rating. We view the project's governance risks to be in line with
the sector as they pertain to the sophistication; depth and
breadth; and policies, procedures, and governance practices of the
ownership entity. Environmental risks are also in line with that of
the sector as there are not any elevated environmental threats
present in the associated project areas.
ARENA ENERGY: Gets Court Permission for $1-Bil. Chapter 11 Sale
---------------------------------------------------------------
Law360 reports that a Texas bankruptcy judge on Sept. 25, 2020,
gave Arena Energy LP permission to go ahead and erase nearly all of
its funded debt with its $1 billion Chapter 11 sale to a private
equity-backed entity, after the offshore oil and gas exploration
company told him it has resolved all opposition to the plan.
At a remote hearing, counsel for Arena told U.S. Bankruptcy Judge
Marvin Isgur that the plan now has the support of all of the
company's term and reserved facility lenders and that all
objections had been resolved.
About Arena Energy LP
Arena Energy LP, an offshore oil and gas exploration and production
company based in The Woodlands, Texas.
Arena Energy, LP, filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Tex. Case No. 20-34215) on August 20, 2020. The Debtor hired
Jackson Walker LLP, as bankruptcy counsel, and Susman Godfrey
L.L.P., as special counsel.
ARKLOW LIMITED: Wins November 30 Plan Exclusivity Extension
-----------------------------------------------------------
At the behest of Arklow Limited Partnership and its affiliates, the
Honorable Christopher J. Panos extended the period within which the
Debtors have the exclusive right to file a plan of reorganization
through and including November 30, 2020, and to solicit acceptances
of the plan through and including January 29, 2021.
The Debtors intend to sell substantially all of their assets and
have retained a broker to assist them in this effort. The Debtors
have established a virtual diligence room and provided access to
that room to over 80 individuals. The Debtors have engaged in
discussions with multiple parties interested in purchasing the
Debtors' assets.
The Debtors are currently in the process of soliciting a purchaser
for their assets. In addition to the Debtors' golf courses, hotel,
function room, and restaurant, the Debtors are also offering for
sale approximately 470 acres of undeveloped land, and the sale is
more complex than the sale of a simple golf course.
According to the Debtors, if a creditor, either on its own or in
conjunction with a party interested in purchasing the Debtors'
assets, were to file a plan, it would materially impair the
Debtors' efforts to locate a buyer for their assets. In addition
to creating confusion among the various parties who are in the
process of conducting due diligence, it would slow down the
Debtors' sale process and significantly increase the administrative
costs, both operational and professional, to the Debtors' estates.
About Arklow Limited Partnership
Arklow Limited Partnership owns 700 acres of real estate on which
Bolton, Mass.-based International Golf Club, and Resort, a
lifestyle destination, operates.
International Golf Club and Resort operates as three entities: The
International Golf Club, LLC, which oversees the golf courses and
memberships; Wealyn LLC, a limited liability company that manages
food and beverage service; and Arklow Limited Partnership.
Arklow Limited Partnership sought Chapter 11 protection (Bankr. D.
Mass. Case No. 20-40523) on May 4, 2020. It sought bankruptcy
protection along with The International Golf Club, LLC (Case No.
20-40524), and Wealyn, LLC (Case No. 20-40525), with Arklow
designated as the lead case. At the time of the filing, Arklow
disclosed assets of between $10 million and $50 million and
liabilities of the same range.
The Honorable Christopher J. Panos is the presiding judge. Murphy &
King, Professional Corporation is the Debtors' bankruptcy counsel.
On July 31, 2020, the U.S. Trustee for Region 1 appointed a
committee to represent unsecured creditors in the Chapter 11 case
of Arklow Limited Partnership.
ARRAY TECHNOLOGIES: S&P Assigns 'B+' ICR, Outlook Stable
--------------------------------------------------------
S&P Global Ratings assigned its 'B+' issuer credit rating to Array
Technologies Inc. and its 'B+' issue-level rating and '3' recovery
rating to its proposed senior secured term loan.
The company plans to issue a first-lien senior secured $575 million
term loan B to fund a distribution to its shareholders. Pro forma
for the transaction, S&P expects adjusted leverage to be over
4.0x.
The dividend recapitalization transaction increases the company's
debt leverage. The purpose of this debt-financing transaction is to
fund a shareholder distribution to Array's owners. Array has been
majority-owned and controlled by Oaktree Capital Management's Power
Opportunities Group since 2016 and this dividend represents the
first major distribution since the initial investment. S&P said,
"We estimate the company will have an adjusted debt-to-EBITDA ratio
within 4.0x-4.5x by the end of this year, which is a material
increase in debt leverage, because we believe it had operated below
1.5x previously. The new debt leverage estimate does not appear
onerous compared to many other speculative-grade capital equipment
companies; however, we believe there could be increased risk from
carrying a higher debt load given the dynamics of the renewable
energy industry and Array's market position within it."
Photovoltaic installations have experienced high growth lately, but
long-term sustainability is yet to be realized. Solar power
comprises about 2.5% of global power generation currently, roughly
double that of its percentage in 2016. S&P Global Platts Analytics
(SPGPA) sees this percentage rising to the 9%-10% area by 2040 as
the levelized cost of energy of utility-scale solar power
generation has come down and are competitive with other forms of
electricity. Domestically, from 2014 to 2019, annual installations
of ground-mounted solar generation capacity grew at a compound
annual growth rate of 20%, comprising nearly 22% of all new
generation over one megawatt brought online. Renewable energy (wind
and solar) has enjoyed very fast growth recently, supported by
renewable portfolio standard (RPS) mandates, tax incentives, the
Paris Climate Accord, and other catalysts. The growth in renewables
is expected to greatly outpace that of gas, hydroelectric, nuclear,
coal, and oil. However, ongoing growth at a high pace is uncertain.
In June, SPGPA projected capacity additions for solar and wind
capacity of about 162 gigawatts for 2020, which is 6% lower than
its February projection. If the COVID-19 pandemic's recessionary
effects are sustained, then this could eventually put additional
pressure on various countries' support mechanisms for photovoltaic
projects. It remains to be seen whether any challenges to solar
development are structural or temporary.
The company's scale of operations is small, though ongoing
operating functions have been relatively solid as of late. With
less than $1 billion of annual sales, and with its in-house
manufacturing production limited at present to a single plant in
New Mexico, Array Technologies' operational scale is small. It
leases just five warehouses spread across the West, South, and
Midwest portions of the U.S. Despite its limited physical presence,
logistics have been good, with Array achieving greater than 95%
on-time delivery year-to-date. It has multiple third-party
manufacturers as sources of component supply and has low product
failure rates and warranty costs.
Ground mounting systems may be viewed as a commodity in tougher
funding climates. S&P is uncertain whether utilities and
engineering, procurement, and construction (EPC) contractors will
determine if there is compelling value added from their choice of
mounting systems. Traditionally, lower-cost fixed tilt systems were
prevalent before the use of single- and dual-axis trackers became
more widespread. The landscape has since changed, though, as S&P
estimates that single-axis trackers now account for over 75% of
U.S. ground mount projects, up from almost 60% in 2017, and have
taken share away from fixed tilt systems. However, if funding for
solar projects drops significantly, more cost-conscious purchasing
managers could reverse this dynamic, particularly if the costs for
alternative power generation projects remain low.
Array's value proposition to its customers is that its products
have fewer parts, are designed to last 30 years, and do not require
significant aftermarket service and maintenance. The drawback,
though, is that the company is highly dependent on winning new
projects because its cannot rely on recurring maintenance revenue.
For now, S&P believes that Array Technologies' products provide
utilities with some boost to energy generation and cost savings,
and require less field maintenance than dual-axis trackers. As a
provider of single-axis trackers, Array touts its capability to
boost its customers' revenues by 25% per year with only a 7%
increase in project cost. Its systems use fewer motors per megawatt
and use patented clamps, which minimize dead space to achieve
greater power density, providing some differentiation from its
competitors. However, if the sentiment for and viability of solar
energy sours, then customer preferences could revert to more
standard systems and be detrimental to the company's performance.
It is uncertain whether historically high variability in operating
performance and cash flow generation is behind them. Array's track
record of operating performance has been mixed. There have been
periods when Array saw high revenue growth followed by periods
where sales and profitability dipped sharply. These changes were
caused in part by customers pre-ordering in advance of the dilution
of the solar investment tax credit (ITC), followed by the entrance
of a new competitor which disrupted industry pricing. Later on in
2018, Array also suffered self-inflicted wounds through a
problematic enterprise resource planning system implementation, and
its adjusted EBITDA turned negative despite healthy sales growth
that year. However, it was able to retain its customer
relationships during the difficult period.
The company's robust 123% sales increase in 2019 was spurred by a
recurrence of pre-orders in advance of the ITC dilution. Array's
cash from operations is likely to swing drastically this year, to
negative $200 million from more than $380 million in 2019. We
believe variability in operating results and cash flows could
continue in future years as the ITC winds down. The ITC was enacted
in 2006 and extended in 2015. If it is not extended again, then the
26% tax credit for solar systems on residential and commercial
properties in 2020 will drop to 22% in 2021. A more significant
drop occurs in 2022, when commercial and utility-scale applications
will only have a 10% tax credit while residential applications will
no longer benefit at all. Deferred revenue can cause wide working
capital swings, though Array's capital requirements are very low
because it outsources production of some of its sub-assembly
units.
Array has a good market position in a growing sector. Array enjoys
a good position because it believes it holds the leading position
in the U.S. solar tracker market. More than one in four solar
modules installed in U.S. utility scale projects to date use
Array's products. Based on more recent shipment activity, S&P
believes Array's share may be double that figure. The company has
room to grow internationally, with only 10% of its sales generated
from Australia and the rest of the world, while competitor
NEXTracker enjoys a more established market share overseas.
Capital investment is low. Array can spend less than $10 million
per year on capital equipment because it outsources most of its
sub-assemblies. The company produces center structures, gear racks,
motor controller assemblies, clamps, and spring dampers in its
Albuquerque facility. Other products and materials like steel
tubing, drivelines, bearing housings, and kits are sourced
externally and shipped directly to the job site.
S&P said, "We expect financial policies post-transaction to be
supportive of the rating. Array has operated under the ownership of
Oaktree Capital Management's Power Opportunities Group since 2016,
and up until this transaction has kept a somewhat conservative
balance sheet with little debt. Now, following the proposed
dividend recapitalization transaction, Array's adjusted debt
leverage will rise to more than 4x. We adjust our debt balance to
include obligations pertaining to operating leases, a tax
receivable agreement, and earn outs. However, we do not believe
debt leverage will rise greatly during the next year or so. We note
the company has filed a Form S-1 registration statement relating to
an upcoming public offering of shares, and that it intends to use a
portion of the IPO proceeds to reduce term loan debt. Although we
acknowledge the company may potentially use IPO proceeds to
deleverage, we also note the timing, success, and ultimate amount
of proceeds raised remain uncertain.
"If the company completes the IPO, Oaktree exits its investment,
and management uses a significant portion of the proceeds to reduce
debt such that the adjusted debt-to-EBITDA ratio is less than 4x,
we would view the IPO as favorable to credit quality. Such a
development could warrant an outlook revision to positive. In
addition, we could consider a modest upgrade based on a track
record of operating with lower leverage and conservative financial
policies. On the other hand, we could consider an outlook revision
to negative or a downgrade if market dislocation or other factors
render the IPO market not viable and Oaktree and the other owners
decide to exit their investment via a sponsor-to-sponsor sale that
increases debt leverage.
"The stable outlook on Array Technologies reflects our belief that
favorable demand conditions will support earnings growth over the
next 12 months, such that adjusted debt leverage remains well
within the 4x-5x range and EBITDA interest coverage remains above
2x."
S&P may lower our ratings on Array over the next 12 months if:
-- Business conditions in the solar energy sector deteriorate such
that EBITDA declines over 10%, causing adjusted debt leverage to
exceed 5x and EBITDA interest coverage drops below 2x;
-- The company experiences unexpectedly large adverse changes in
cost escalation protection terms on new projects relative to prior
work, which compresses margins and diminishes credit metrics; or
-- It undertakes more aggressive financial policies (e.g.,
additional dividend payouts or engaging in an unexpectedly large
debt-financed acquisition), which sustains adjusted leverage above
5x with no clear prospects of recovery.
S&P may raise its ratings on Array over the next 12 months if:
-- The company executes a public offering of stock that reduces
Oaktree's (or any financial sponsor's) control to less than 40%,
reduces adjusted debt leverage to below 4x on a sustained basis,
and establishes a track record of abiding by conservative financial
policies with a low risk of releveraging; or
-- The company significantly increases its operational scale and
establishes a track record of more consistent operating
profitability and cash flow generation during its growth, while
maintaining adjusted leverage below 4x.
ASCENA RETAIL: $40.8M Sale of Catherines Assets to FullBeauty OK'd
------------------------------------------------------------------
Judge Kevin R. Huennekens of the U.S. Bankruptcy Court for the
Eastern District of Virginia authorized the Definitive Purchase
Agreement, together with all schedules, exhibits, and ancillary
documents related thereto, of Ascena Retail Group, Inc. and
affiliates with FullBeauty Brands Operations, LLC, in connection
with the sale of their right, title, and interest in and to
Catherines Plus Sizes assets, including: (i) specified Contracts,
if assignable under applicable law; (ii) Transferred Intellectual
Property and rights to collect royalties and proceeds in connection
therewith from and after the Closing; (iii) Inventory that is held
or otherwise designated for sale via the E-Commerce Business; (iv)
Customer Data; and (vi) all Documents to the extent related to the
E-Commerce Business.
The aggregate consideration to be paid by Purchaser for the
purchase of the Acquired Assets will be: (i) the assumption of
Assumed Liabilities and (ii) the payment in cash of an amount equal
to the sum of (A) $40.8 million, plus (B) the Inventory Surplus,
minus (C) the Inventory Deficit minus (D) the Break-Up Fee
Difference.
The sale is free and clear of all Liens, Claims, and other
interests of any kind or nature whatsoever, with all such Liens,
Claims, or other interests to attach to the cash proceeds of the
Purchase Price ultimately attributable to the property against or
in which such Liens, Claims, or other interests are asserted,
subject to the terms thereof.
To the maximum extent permitted by applicable law, and in
accordance with the Agreements, the Purchaser will be authorized,
as of the Closing Date, to operate under any license, permit,
registration, and governmental authorization or approval of the
Debtors with respect to the Catherines Assets and the Sale.
Unless otherwise agreed to by Comenity Bank, formerly known as
World Financial Network National Bank, in a separate written
agreement, the private label credit cards offered by Comenity to
qualifying customers of Catherines Stores Corporation ("CSC")
pursuant to that
certain Private Label Credit Card Plan Agreement for Catherines by
and between Comenity, CSC, and Sierra Nevada Factoring, Inc. dated
as of Aug. 12, 2009, will immediately cease being accepted for the
purchase or return of any merchandise or inventory immediately upon
the Closing Date of the sale.
Additionally, Comenity will be permitted to continue the use of
CSC's trademarks and service marks as provided under the existing
Plan Agreement and as necessary to administer the private label
credit card accounts (including, but not limited to collections)
until such time as all the accounts are fully processed, collected,
and closed.
Notwithstanding anything to the contrary in the Order or the Asset
Purchase Agreement, no contract between the Debtors and Oracle
America, Inc., successor in interest to Responsys, Inc., Hyperion
Solutions Corporation, Stellent, ClearApps, Thor Technology,
360Commerce, Retek, Endeca Technologies, ATG Technology, and Sun
Microsytems, Inc., will be assumed and/or assigned without: (1)
Oracle’s prior written consent; (2) cure of any default under
such contract; (3) the provision to Oracle of satisfactory adequate
assurance of future performance by the assignee; and (4) execution
by the Debtors or its successor and the assignee of mutually
agreeable assignment documentation in a final form to be negotiated
after entry of the Order.
In addition, no provision of the Order or any proposed Transition
Services Agreement will authorize: (1) the transfer of any Oracle
license agreement to any third party; or (2) use of any Oracle
license agreement that is inconsistent with the relevant license
grant including, but not limited to, exceeding the number of
authorized users, or, to the extent prohibited by the applicable
license agreement, shared use or license splitting, absent
Oracle’s express prior written consent.
Nothing in the Order limits the Debtors' obligations under the
Transition Services Agreement, including to pay the costs of the
relevant licenses required to provide the Services under the
Transition Services Agreement.
The Debtors are not assuming and assigning their contract with
Kobie Marketing, Inc. to the Purchaser in connection with the
Closing.
Notwithstanding the provisions of Bankruptcy Rules 6004(h) and
6006(d) or any applicable provisions of the Local Rules, the Order
will not be stayed after its entry, but will be effective and
enforceable immediately upon entry, and the 14-day stay provided in
Bankruptcy Rules 6004(h) and 6006(d) is expressly waived and will
not apply.
Time is of the essence in closing the Transaction and the Debtors
and the Purchaser intend to close the Transaction as soon as
practicable. Any party objecting to the Order must exercise due
diligence in filing an appeal and pursuing a stay within the time
prescribed by law and prior to Closing, or risk its appeal will be
foreclosed as moot.
A copy of the Agreements is available at
https://tinyurl.com/y3s56uo8 from PacerMonitor.com free of charge.
About Ascena Retail Group
Ascena Retail Group, Inc. (Nasdaq: ASNA) --
http://www.ascenaretail.com/-- is a national specialty retailer
offering apparel, shoes, and accessories for women under the
Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion
(Lane Bryant, Catherines and Cacique), and Value Fashion
(Dressbarn) segments, and for tween girls under the Kids Fashion
segment (Justice). Ascena, through its retail brands, operates
ecommerce websites and approximately 2,800 stores throughout the
United States, Canada, and Puerto Rico.
Ascena Retail reported a net loss of $661.4 million for the fiscal
year ended Aug. 3, 2019, a net loss of $39.7 million for the year
ended Aug. 4, 2018, and a net loss of $1.06 billion for the year
ended July 29, 2017.
On July 23, 2020, Ascena Retail Group and its affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of
Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and
$12,516,261,149 in total liabilities.
The Hon. Kevin R. Huennekens is the case judge.
The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as
bankruptcy counsel, Guggenheim Securities, LLC as financial
Advisor, and Alvarez and Marsal North America, LLC as
restructuring advisor. Prime Clerk, LLC is the claims agent.
ASCENA RETAIL: Closes More Justice Stores as Part of Bankruptcy
---------------------------------------------------------------
Kelly Tyko of USA Today reports that after permanently closing
600-plus stores this summer, tween retailer Justice is closing more
stores as part of parent company Ascena Retail Group's bankruptcy.
Twenty-three stores in 13 states are on the new closings list
released Thursday, September 24, 2020 with Florida losing the most
locations with four. New Jersey, New York and Ohio have three
closures apiece.
New Jersey-based Ascena, which also operates Lane Bryant,
Catherines, Ann Taylor, Loft, Lou & Grey and Cacique, filed for
Chapter 11 bankruptcy protection July 23 and announced plans to
shutter around 1,600 of the company's 2,800 stores.
The company said in the bankruptcy filing that it planned to
shutter all of its Catherines plus-size stores and "intends to
transition Justice to a primarily online platform and continue Lou
& Grey within go-forward LOFT stores."
The Justice brand, formerly Limited Too, is geared toward girls
ages 6 to 12. It joined Ascena in 2009 and, before the store
closures, had 826 specialty retail and outlet stores.
SB360 Capital Partners will manage the going-out-of-business
liquidation sales and handled Ascena's recent liquidation sales.
The firm has managed liquidation sales for more than 50 years.
The recent round of Justice liquidation sales moved fast, added
Ziggy Schaffer, also an executive vice president at SB360.
"Demand was unbelievably strong, and the Justice customer clearly
understands value," Schaffer said. "With the store closing
discounts of up to 50% off, this will be another very quick sale."
Like other apparel retailers with a heavy commitment to shopping
malls, Ascena was grappling with declining foot traffic long before
the coronavirus pandemic, which has led to an increase of retailers
filing for bankruptcy.
As many as 25,000 stores could shutter this year as retailers
continue to feel the impacts of the pandemic, according to a report
from Coresight Research.
Last week, Bed Bath & Beyond announced 63 more stores will close by
the end of 2020 with 200 of its namesake stores expected to close
over the next two years.
About Ascena Retail Group
Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty
retailer offering apparel, shoes, and accessories for women under
the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus
Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion
(Dressbarn) segments, and for tween girls under the Kids Fashion
segment (Justice). Ascena, through its retail brands, operates
ecommerce websites and approximately 2,800 stores throughout the
United States, Canada, and Puerto Rico. Visit
http://www.ascenaretail.com/for more information.
Ascena Retail reported a net loss of $661.4 million for the fiscal
year ended Aug. 3, 2019, a net loss of $39.7 million for the year
ended Aug. 4, 2018, and a net loss of $1.06 billion for the year
ended July 29, 2017.
On July 23, 2020, Ascena Retail Group and its affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of
Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and
$12,516,261,149 in total liabilities.
The Hon. Kevin R. Huennekens is the case judge.
The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as
bankruptcy counsel, Guggenheim Securities, LLC as financial
Advisor, and Alvarez and Marsal North America, LLC as restructuring
advisor. Prime Clerk, LLC is the claims agent.
ASCENA RETAIL: S&P Assigns 'B-' Rating to $312.343MM DIP Term Loan
------------------------------------------------------------------
S&P Global Ratings assigned a 'B-' issue-level rating to the
$312.343 million debtor-in-possession (DIP) term loan provided to
U.S.-based Ascena Retail Group Inc.
The retailer is operating under the protection of Chapter 11 of the
U.S. Bankruptcy Code following a voluntary filing on July 23, 2020.
S&P's 'D' issuer credit rating on Ascena is unchanged.
The DIP term loan facility consists of $150 million in new money,
along with $162.3 million rolled up from the prepetition term loan.
In addition, the DIP facility includes a $400 million DIP
asset-based loan (ABL) revolver. Per the restructuring support
agreement (which had consent from about 95% of prepetition term
lenders), both the DIP term loan and the DIP ABL revolver will
convert into exit facilities upon the company's planned emergence
from bankruptcy on or around Oct. 31, 2020.
S&P's 'B-' DIP issue rating primarily reflects its view of the
credit risk borne by the DIP term lenders and does not indicate any
ratings it may assign to the reorganized firm after bankruptcy or
to the contemplated exit facilities.
The DIP issue rating is a point-in-time rating effective only for
the date of this report. S&P will not review, modify, or provide
ongoing surveillance of the rating.
S&P's 'B-' issue rating on Ascena's DIP financing facilities
reflects its view of the credit risk borne by the DIP lenders.
These risks include:
-- Ascena's ability to meet its financial commitments during
bankruptcy as reflected through our debtor credit profile (DCP)
assessment;
-- Prospects for full repayment through reorganization and
emergence from Chapter 11 via S&P's capacity for repayment at
emergence (CRE) assessment; and
-- Potential for full repayment in a liquidation scenario via
S&P's additional protection in a liquidation scenario (APLS)
assessment.
S&P said, "Our DCP reflects our view of Ascena's vulnerable
business risk profile and highly leveraged financial risk profile.
"We considered applicable rating modifiers, including projected
liquidity during bankruptcy. The issue rating on the company's DIP
also considers the potential recovery prospects on the DIP loans,
which we reflect in our CRE and APLS assessments.
"Our CRE assessment of adequate coverage of the DIP debt in an
emergence scenario indicates coverage of 115%-150%.
"Our CRE assessment contemplates a reorganization and addresses
whether Ascena could likely attract sufficient third-party
financing at the time of emergence to repay the DIP debt in full.
Our CRE assessment of adequate coverage of the DIP debt indicates
no uplift to the DCP assessment, resulting in a 'B-' issue-level
rating. We assess repayment prospects for purposes of the CRE
assessment on the basis that Ascena must fully repay all of the DIP
facilities in cash at emergence, consistent with super-priority
status under the U.S. Bankruptcy Code.
"Our APLS assessment indicates less than 100% total value coverage
and does not affect the DIP rating.
"Our DIP methodology considers Ascena's ability to fully repay DIP
debt, even in a scenario where it cannot reorganize under
bankruptcy protection. Our APLS assessment indicates insufficient
coverage (30%-50% coverage) of the DIP term loan in a liquidation
scenario. Therefore, we do not provide an additional notch for the
APLS modifier.
"We attribute Ascena's voluntary bankruptcy filing to the COVID-19
pandemic, weakened competitive position, continued pressure on
specialty apparel retail industry and highly leveraged balance
sheet."
Ascena's bankruptcy filing and S&P's business risk assessment
reflect various ongoing business challenges, including:
-- Macroeconomic challenges facing the brick-and-mortar retail
industry, specifically the specialty retail apparel industry, as
competition from online retailers, fast-fashion operators, and
value-oriented off-price apparel retailers increases;
-- S&P's expectation for economic weakness through the bankruptcy
period, along with business and operational disruptions
attributable to the COVID-19 pandemic;
-- Continued top-line pressures and deteriorating profitability
due to depressed store traffic and increased online competition,
reflecting changing consumer behavior; and
-- Challenging market conditions that precluded Ascena from
addressing its capital structure in an out-of-court transaction.
These factors resulted in significant declines in sales, profit,
and cash flow that rendered the prepetition capital structure
unsustainable. S&P views many of these trends as secular and
believe sales will remain challenged, especially for
brick-and-mortar retailers, as the elevated costs of operating in a
post-pandemic environment and mandated customer traffic
restrictions inhibit Ascena's ability to turn around sales and
improve EBITDA margins.
S&P holds this view despite its belief that Ascena's bankruptcy
initiatives may result in modest operating performance improvements
because of the:
-- Optimization of its store fleet by reducing the number of
underperforming stores and negotiating rent relief for remaining
stores;
-- Rationalization of its brand portfolio;
-- Realignment of distribution capabilities for efficient product
flow;
-- Execution of other various cost-saving initiatives; and
-- Continued development of omnichannel capabilities.
S&P's financial risk profile reflects a substantially reduced debt
burden and negative EBITDA generation during the bankruptcy
period.
This is because of the automatic stay on prepetition debt (about
$1.27 billion in term loans and $230 million in revolver drawings
at the time of the filing) and the relatively modest amount of
funded DIP debt ($312 million term loan and $400 million ABL
facility). S&P also considers the level of DIP debt relative to
Ascena's expected EBITDA over the next 12 months, given the global
recession as a result of the COVID-19 pandemic and its effects on
overall industry dynamics.
ASCENA RETAIL: Sycamore Bids for Lane Bryant, Loft & Ann Taylor
---------------------------------------------------------------
Lauren Coleman-Lochner, Eliza Ronalds-Hannon and Katherine Doherty
of Bloomberg News report that Sycamore Partners LLC made a
preliminary bid to buy assets of bankrupt Ascena Retail Group Inc.
including the Ann Taylor brand, according to people familiar with
the matter. The private equity firm is offering to buy the Ann
Taylor, Loft and Lane Bryant labels from Ascena, said the people,
who asked not to be identified because the bid isn't public. The
offer is non-binding, and negotiations will continue before a final
bid is submitted in court, the people said.
About Ascena Retail Group
Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty
retailer offering apparel, shoes, and accessories for women under
the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus
Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion
(Dressbarn) segments, and for tween girls under the Kids Fashion
segment (Justice). Ascena, through its retail brands, operates
ecommerce websites and approximately 2,800 stores throughout the
United States, Canada, and Puerto Rico. Visit
http://www.ascenaretail.com/for more information.
Ascena Retail reported a net loss of $661.4 million for the fiscal
year ended Aug. 3, 2019, a net loss of $39.7 million for the year
ended Aug. 4, 2018, and a net loss of $1.06 billion for the year
ended July 29, 2017.
On July 23, 2020, Ascena Retail Group and its affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of
Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and
$12,516,261,149 in total liabilities.
The Hon. Kevin R. Huennekens is the case judge.
The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as
bankruptcy counsel, Guggenheim Securities, LLC as financial
Advisor, and Alvarez and Marsal North America, LLC as restructuring
advisor. Prime Clerk, LLC is the claims agent.
ASP NAVIGATE: S&P Assigns B- Issuer Credit Rating; Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to ASP
Navigate Acquisition Corp. (doing business as MW Life Sciences).
The rating outlook is stable. S&P also assigned its 'B-'
issue-level rating to its proposed senior secured revolver and
first-lien term loan. The recovery rating is '3' (rounded estimate:
50%), indicating meaningful recovery in the default scenario.
S&P said, "We view the revenue decline related to the pandemic as
temporary and will rebound close to pre-COVID-19 levels in 2021,
leading to our projection of mid-6x adjusted leverage in 2021.
ASP's addressable end markets are mostly related to elective
surgeries with about 70% exposure to orthopedics. As a result of
previous stay-at-home orders and hospitals temporarily stopping
performing elective procedures, the company's second-quarter
performance was adversely affected, with revenues down 20% on a
year-over year basis. Furthermore, due to the timing difference
between the order intake and the revenue conversion, we expect
revenue to trough in the third quarter, which we expect to show
year-over-year revenue declines of around 30%.
"However, we expect to see recovery in 2021 as procedure volumes
continue to rise. This reflects our belief that orthopedic
surgeries could be deferrable for a period of time but not be
deferred permanently. The aging population and high prevalence of
chronic disease will also continue to support the demand in
orthopedics.
"Our 'B-' rating reflects adjusted leverage of about 7x in 2020,
improving to the mid-6x range by the end of 2021. We expect the
company to generate free operating cash flow of about $7 million to
$12 million each year in 2020 and 2021. Still, we expect leverage
to remain above 7x and FOCF to debt to remain relatively thin at
about 2.5% through the parent level, reflecting our expectation for
higher leverage and a slower recovery in the industrial business."
ASP is exposed to similar industry dynamics as its peers, including
concentrated customer base, sticky business with some barriers to
entry, and ongoing pricing pressure, which is offset in part by its
operating efficiency. ASP has a concentrated customer base with
top six customers contributing to about 80% of its 2019 revenue.
Such customer concentration is typical in the medical contract
manufacturing space. Also, long platform lifecycles of about 10 to
15 years provides recurring revenue resulting from replacement
demand.
The medical outsourced contract manufacturing business is sticky in
nature and creates barriers to entry due to high switching costs
for customers as it relates to regulatory compliance. Regulatory
hurdles make it difficult to switch providers as the validation
process is lengthy and expensive. Therefore OEMs tend to keep the
same supplier unless there is significant cost difference or
quality or delivery issues.
While the company could face insourcing risks from OEM customers,
trends in recent years have shown that OEMs continue to use
outsourcing rather than bringing manufacturing in house, likely
because they can reduce manufacturing complexities, limit capital
investment, and focus on developing new programs.
S&P also expects the company to face some modest ongoing pricing
pressure from OEM customers. This reflects indirect pricing
pressure from hospitals, as well as price discounts it offers its
OEM customers for higher volume. Partially offsetting the pricing
pressure is its operating efficiency. ASP has a sales and operation
planning platform that is integrated with customer systems and
therefore allows more accurate and dynamic forecasting of capacity,
and hence better inventory and cost management.
S&P said, "Our 'B-' rating on ASP also reflects its moderately
strategic group status to the ASP MWI group. Although ASP and MWI
will be operated and reported separately as two entities and have
separate credit agreements with no cross-default and no
cross-guarantee, they are owned by the same parent, ASP MWI
Holdings L.P., and will share common management, common board,
certain corporate support functions such as IT, administrative, and
human resources. Consequently, we view the two entities as part of
the same group.
"On a stand-alone basis, we think ASP's creditworthiness is one
notch better than the credit quality for the group. However, the
'b-' group credit profile on ASP MWI caps the rating on ASP under
our group rating methodology.
"Our 'B-' rating on ASP reflects its moderately strategic group
status and equals to ASP MWI group credit profile of 'b-'. Our
assessment of moderately strategic status for ASP reflects our view
that the company is important to the group's long-term strategy and
could provide or receive support from group members under some (but
not all) circumstances.
"The stable outlook reflects adjusted of leverage of about 7x in
2020 amid the pandemic and our projection that 2021 revenue would
return closer to pre-pandemic levels as hospitals resume orthopedic
procedures and OEM customers continue to order. It also reflects
our expectation that leverage of the group is about 8x and FOCF to
debt of about 2.5%.
"We could lower the rating on ASP if 2020 performance deteriorates
more than expected or 2021 fails to improve as expected, leading to
EBITDA margin compression of 350 basis point or more from the level
in 2020 and significant reduction in free operating cash flow, with
limited prospects for improvement. This could lead us to believe
that the company could not sustain its debt over the long term.
"We could raise our rating on ASP if we think that ASP and MWI are
both recovering from the pandemic challenges and performance
collectively improves such that the combined group will sustain
leverage at or below 7x and FOCF to debt approaches the
mid-single-digit percentage."
ATHEROTECH INC: Takes Malpractice Suit to 11th Circuit
------------------------------------------------------
Law360 reports that a defunct diagnostics lab's bankruptcy trustee
told an Alabama federal judge Sept. 23, 2020, that he's appealing
to the Eleventh Circuit Mintz's win in a malpractice case alleging
the law firm failed to advise the cholesterol testing company that
its business practices could run afoul of federal law.
In a two-page notice of appeal, Thomas Reynolds, the bankruptcy
trustee for Jefferson County, Alabama-based Atherotech Inc., told
U.S. District Court Judge Annemarie Carney Axon that he's
challenging her Aug. 26, 2020 order denying his request to alter,
amend or vacate the July 28, 2020 final judgment in favor of Mintz
Levin Cohn Ferris Glovsky.
About Atherotech Inc.
Atherotech's main asset is its VAP cholesterol test, which is
licensed out of the University of Alabama at Birmingham.
Atherotech Inc. filed for Chapter 7 bankruptcy protection (Bankr.
N.D. Ala. Case No. 16-00909) on March 4, 2016. Atherotech Holdings,
Inc., simultaneously filed a separate Chapter 7 petition (Bankr.
N.D. Ala. Case No. 16-00910). Atherotech listed less than $50,000
in assets and between $50,000 and $100 million in liabilities in
its petition, the report said. The Hon. Tamara O Mitchell presides
over the case. Lee Benton -- lbenton@bcattys.com -- of Benton &
Centeno LLP, serves as its bankruptcy counsel.
AZALEA TOPCO: S&P Assigns 'B' Rating to $180MM First-Lien Term Loan
-------------------------------------------------------------------
S&P Global Ratings assigned its 'B' rating and '3' recovery rating
to Azalea Topco Inc. (Press Ganey)'s incremental $180 million
first-lien term loan. The '3' recovery rating indicates its
expectation of average (50%-70%; rounded estimate: 55%) recovery
prospects in the event of a hypothetical payment default.
The issuer credit rating remains 'B'. The issue-level ratings on
the existing $250 million first-lien revolver and $1.24 billion
first-lien term loan remain 'B' with recovery ratings of '3'. The
company also has about $450 million of second-lien notes
outstanding (not rated).
S&P said, "We expect the company to use the proceeds of this new
debt issuance, as well about $30 million of cash and $30 million of
new equity, to fund acquisitions of two companies offering online
reputation management services. We expect Azalea to cross sell
these adjacent services to its customer base of hospitals, and for
these acquisitions to contribute about $15 million of incremental
EBITDA in 2021, after synergies and operating leverage. This
transaction modestly increases our 2021 leverage estimate to about
9.3x from about 8.9x.
"Our 'B' issuer credit rating reflects our assessment of the
company's modest scale (2019 revenue of $480 million), high
concentration (80% of revenues) in the niche market for patient
experience surveys for health care providers, as well as very high
debt leverage and limited free cash flow (after interest costs).
These considerations are partially offset by the company's leading
position in its core business, high margins (about 40%), high
annual customer retention rates (95%), and relative insensitivity
to the economic cycle.
"Our stable outlook on Press Ganey reflects our view of the
company's business as generally quite stable, and our expectation
that leverage will remain above 8x over the next year, given its
ownership by financial sponsors Ares and Leonard Green."
B NO. 220 CORPORATION: Case Summary & 30 Top Unsecured Creditors
----------------------------------------------------------------
Forty-seven affiliates that concurrently filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
B No. 220 Corporation 20-34721
58 South Service Road
Suite 150
Melville, New York 11747
Tug Frederick E. Bouchard Corp. 20-34722
Tug Evening Tide Corp 20-34723
Tug J. George Betz Corporation 20-34724
B No. 225 Corporation 20-34725
Tug Evening Star Corp 20-34726
Tug Jane A. Bouchard Corporation 20-34727
B No. 230 Corporation 20-34728
Tug Bouchard Boys Corp. 20-34729
Tug Evening Mist Corp 20-34730
B No. 252 Corp. 20-34731
Tug Kim M. Bouchard Corp. 20-34732
Tug Evening Light Corp. 20-34733
B No. 205 Corporation 20-34734
Tug Linda Lee Bouchard Corporation 20-34735
B No. 272 Corp. 20-34736
Tug Donna J. Bouchard Corp. 20-34737
B No. 210 Corporation 20-34738
Tug Evening Breeze Corp 20-34739
B No. 260 Corporation 20-34740
Tug Marion C. Bouchard Corp. 20-34741
B No. 280 Corporation 20-34742
Tug Ellen S. Bouchard Corp 20-34743
B No. 215 Corporation 20-34744
B No. 262 Corporation 20-34745
B No. 231 Corporation 20-34746
B No. 282 Corporation 20-34747
B No. 264 Corporation 20-34748
Tug Brendan J. Bouchard Corporation 20-34749
Tug Ralph E. Bouchard Corp 20-34750
Tug Rhea I Bouchard Corp 20-34751
B No. 265 Corporation 20-34752
B No. 284 Corporation 20-34753
B No. 233 Corporation 20-34754
Tug Buster Bouchard Corp 20-34755
Tug Morton S. Bouchard IV Corporation 20-34756
B No. 270 Corp. 20-34757
Tug Robert J. Bouchard Corporation 20-34758
B No. 285 Corporation 20-34759
Tug Morton S. Bouchard Jr. Corp. 20-34760
Tug Captain Fred Bouchard Corp 20-34761
Tug Danielle M. Bouchard Corporation 20-34762
Tug Denise A. Bouchard Corp 20-34763
B No. 235 Corporation 20-34764
B No. 242 Corporation 20-34765
B No. 245 Corporation 20-34767
B No. 250 Corporation 20-34768
Business Description: The Debtors and their non-Debtor
affiliates are independently-owned
ocean-going petroleum barge companies.
Since their establishment over 100 years
ago, Bouchard has expanded its fleet to
encompass 25 barges and 26 tugs, all
with state-of-the-art equipment and
fuel-efficient technologies.
Headquartered in Melville, New York,
Bouchard's operations are extensive and
span waterways connecting the United
States, Canada, and the Caribbean.
Chapter 11 Petition Date: September 29, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Judge: Hon. David R. Jones
Debtors'
General
Bankruptcy
Counsel: Ryan Blaine Bennett, P.C.
W. Benjamin Winger, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: ryan.bennett@kirkland.com
benjamin.winger@kirkland.com
Debtors'
Local
Bankruptcy
Counsel: Matthew D. Cavenaugh, Esq.
Genevieve M. Graham, Esq.
JACKSON WALKER L.L.P.
1401 McKinney Street, Suite 1900
Houston, Texas 77010
Tel: (713) 752-4200
Fax: (713) 752-4221
Email: mcavenaugh@jw.com
ggraham@jw.com
Debtors'
Investment
Banker: JEFFERIES LLC
Debtors'
Restructuring
Advisor: PORTAGE POINT PARTNERS, LLC
Debtors'
Notice &
Claims Agent: BANKRUPTCY MANAGEMENT SOLUTIONS, INC.
D/B/A STRETTO
https://cases.stretto.com/bouchard/court-docket/
Estimated Assets
(on a consolidated basis): $500 million to $1 billion
Estimated Liabilities
(on a consolidated basis): $100 million to $500 million
The petitions were signed by Morton S. Bouchard III, chief
executive officer.
Copies of some of the Debtors' petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/VL77VFI/B_No_220_Corporation__txsbke-20-34721__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/V6YZTGQ/Tug_Frederick_E_Bouchard_Corp__txsbke-20-34722__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/UVAWWFY/Tug_Evening_Tide_Corp__txsbke-20-34723__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/U3VNNBY/Tug_J_George_Betz_Corporation__txsbke-20-34724__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. VT Halter Marine Trade Claim $17,350,000
900 Bayou Casotte Pkwy
Pascagoula, FL MS 39581
Tel: (228) 696-6888
2. International Ship Repair Trade Claim $3,188,010
1616 Penny St
Tampa, FL 33602
Tel: (813) 247-1118
3. McAllister Towing & Trade Claim $2,204,261
Transportation
17 Battery Place, Suite 1200
New York, NY 10004
Buckley McAllister
Tel: (212) 269-3200
Email: mcallister_bb@mcallistertowing.com
4. The Port Authority of Government $1,698,928
NY & NJ Claim
P.O. Box 95000
Philadelphia, PA 19195-1517
Tel: (718) 330-2975
5. Providence Steamboat Trade Claim $1,337,600
P.O. Box 5506
Carol Stream, IL 60197-5506
Tel: (401) 331-1930
6. Clean Water of New York, Inc. Trade Claim $765,973
3249 Richmond Terrace
Staten Island, NY 10303-0312
Tel: (718) 981-4600
7. Stewart & Stevenson Professional $551,909
P.O. Box 301063 Services
Dallas, TX 75303-1063
Tel: (833) 382-0284
8. Freehill, Hogan, & Mahar LLP Professional $453,610
80 Pine Street Services
New York, NY 10005-1759
Tel: 212-425-1900
9. Armorica Sales Inc. Trade Claim $453,505
2589 Richmond Terrace
Staten Island, NY 10310
Tel: (718) 448-9201
10. Owen Petersen & Professional $370,000
Company Services
399 Route 109 Suite 2
West Babylon, NY
11704-6213
Tel: (631) 321-9800
11. Rolls-Royce PLC Trade Claim $365,655
HSBC Bank PLC
London, United Kingdom
SE1 9WP
Tel: (703) 834-1700
12. UnitedHealthCare Trade Claim $345,851
Insurance Company
22703 Network Place
Chicago, IL 60673-1227
Tel: (872) 241-1585
13. Murphy, Rogers, Sloss Professional $296,976
& Gambel Services
One Shell Square
New Orleans, LA 70139-7909
Tel: (985) 340-2007
14. NRE Power Systems Trade Claim $250,000
Incorporated
8440 Solutions Center
Chicago, IL 60677-8004
Tel: (985) 872-5480
15. Plaza Marine Trade Claim $234,856
Incorporated/Harbor
Plaza Consolidated
P.O. Box 842610
Boston, MA 02284-02610
Tel: (732) 223-7000
16. Northeastern Air Trade Claim $226,548
Management Corp.
8200 Republic Airport
Farmingdale, NY 11735
Tel: (800) 234-0046
17. GMD Shipyard Corp. Trade Claim $200,000
Brooklyn Navy Yard
Bldg #595
Brooklyn, NY 11205
Tel: (718) 260-9200
18. ST Engineering Halter Trade Claim $163,681
Marine
PO Box 1308
Pascagoula, MS 39568-1308
Tel: (228) 762-0010
19. Marine Systems Inc. Trade Claim $161,123
PO Box 301284
Dallas, TX 75303-1284
Tel: (270) 538-2900
20. Gulf Copper & Trade Claim $150,000
Manufacturing
5700 Procter Street Ext
Port Arthur, TX 77554
Tel: (409) 983-1691
21. CFGI, LLC Professional $147,138
c/o M&T Lockbox Services
8000159
Amherst, NY 14228
Tel: (646) 360-2850
22. MCA Associates, Inc. Trade Claim $136,057
8 Sound Shore Drive
Greenwich, CT 06830
Tel: (203) 622-6878
23. Skout Monitoring Trade Claim $126,005
270 South Service Road
Melvile, NY 11747
Tel: (631) 206-6600
24. Intercontinental Trade Claim $120,648
P.O. Box 9055
Kansas City, MO 64168
Tel: (816) 741-0700 X103
25. Metropolitan Marine Trade Claim $101,231
Transpiration, Inc.
2411 Richmond Road
Staten Island, NY 10306
Tel: (409) 989-0300
26. Platts Trade Claim $100,362
PO Box 848093
Dallas, TX 75284-8093
Tel: (212) 904-4324
27. Engine Systems Trade Claim $97,094
DBA Marine Systems
PO Box 301138
Dallas, TX 75303-1138
Tel: (985) 223-7100
28. Flight Safety Trade Claim $94,971
International
PO Box 75691
Charlotte, NC 28275
Tel: (718) 565-4100
29. A.R.M. Marine Supply, LLC Trade Claim $94,140
1249 86th Street
Brooklyn, NY 11228
Tel: (718) 833-8787
30. L & R Midland, Inc. Trade Claim $92,470
P.O. Box 19458
Houston, Texas 77224
Tel: (713) 680-0909
* * *
The Debtors have moved for joint administration of their cases
under the case number assigned to the Chapter 11 case of Bouchard
Transportation Co., Inc. (Bankr. S.D. Tex. Lead Case No.
20-34682).
BEEBE RIVER: $320K Sale of 8 Campton Parcels to Driscoll Approved
-----------------------------------------------------------------
Judge Bruce A. Harwood of the U.S. Bankruptcy Court for the
District of New Hampshire authorized Beebe River Business Park,
LLC's sale of the following parcels of land located in Campton, New
Hampshire: (i) Lot 10-15-5-11, Shannon Drive; (ii) Lot 10-15-5-12,
Shannon Drive; (iii) Lot 10-15-5-13, Shannon Drive; (iv) Lot
10-15-5-14, Shannon Drive; (v) Lot 10-15-5-15, Shannon Drive; (vi)
Lot 10-15-5-18, BeeBe River Road; (vii) Lot 10-15-5-19, Shannon
Drive; and (viii) Lot 9-15-31-1, Front Street, to Brendan Driscoll
for $320,000.
The sale is free and clear of all liens, claims, interest and
encumbrances. All liens, claims, encumbrances and interests, if
any, will attach to the proceeds of the sale.
The Debtor is authorized to compensate realtor Linda Matheson and
Peabody & Smith Realty, Inc. at the rate of 6% at closing, from the
proceeds of closing, pursuant to the previously approved listing
agreement.
The $297,900 in anticipated net sale proceeds exceeds the $276,655
aggregate value of the liens encumbering the Property and the
Debtor may sell free and clear of the liens of the Bank of New
Hampshire and the Town of Campton, New Hampshire.
The Debtor is authorized to execute such documents and pay such
costs as are normal and customary to accomplish the sale of the
Property.
The Debtor is authorized to pay from the net proceeds at sale that
amount necessary to satisfy the secured claim of the Bank of New
Hampshire, which it estimates will be no more than $221,196.
It is authorized to pay from the net proceeds at sale that amount
necessary to satisfy the secured claims of the Town of Campton, New
Hampshire, which it estimates will be no more than $55,459.
The 14-day stay of Fed. R. Bank. P. 6004(h) is waived.
About Beebe River Business Park
Based in Campton, N.H., Beebe River Business Park, LLC filed a
voluntary Chapter 11 petition (Bankr. D.N.H. Case No. 20-10210) on
Feb. 26, 2020, listing under $1 million in both assets and
liabilities. The Debtor previously filed a petition for relief on
Aug. 15, 2018 (Bankr. D.N.H. Case No. 18-11103.
Judge Bruce A. Harwood oversees the case.
Ryan M. Borden, Esq., at Ford, McDonald, McPartlin & Borden, P.A.,
is the Debtor's legal counsel.
BOARDRIDERS INC: S&P Raises ICR to 'CCC'; Outlook Negative
----------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S. action
sports apparel company Boardriders Inc. to 'CCC' from 'SD', which
reflects its updated view of the company's still distressed credit
risk underpinned by an unsustainable capital structure, high debt
service burden, and potentially tight covenant cushion when the
covenant becomes effective in first quarter 2022.
S&P said, "In addition, we are assigning our 'CCC' rating to the
company's recently issued super senior term loan with a '4'
recovery rating indicating our expectation of average (rounded
estimate: 35%) recovery.
"We are also raising our ratings on the $119 million remaining
balance on the company's legacy 2024 term loan to 'CC' from 'D'
with a '6' recovery rating indicating our expectations of
negligible (rounded estimate: 5%) recovery.
"The negative outlook reflects that we could lower the rating if
the company's turnaround plans are unsuccessful thereby pressuring
cash flow and liquidity such that a default becomes inevitable
within six months.
"Despite obtaining needed liquidity, we view Boardriders' capital
structure and its debt service burden as unsustainable. The recent
transaction provided Boardriders with needed liquidity to fund its
operations for the next several quarters, but the company's
leverage is still very high. We expect it to generate negative
EBITDA in fiscal 2020 (ending Oct. 31, 2020). Although we expect
substantial improvement in fiscal 2021 due to cost reductions and
the nonrecurrence of pandemic-related store closures, we still
expect leverage to be high over the next two years. In addition, we
forecast the company's reported EBITDA in 2021 will barely cover
its cash interest expense, and we expect it to generate negative
free cash flow for the next two years.
"We believe Boardriders will continue to face significant hurdles
in turning around the business. The company will continue to face
the same challenge it faced before the pandemic hit: restoring
sales growth after several years of flat to declining revenue.
Constant currency revenue was roughly flat in fiscal 2018 and
declined in the mid-single-digit percentages in 2019, primarily due
to planned retail store closures, declines in its DC brand, and a
ransomware attack that shifted some sales into early fiscal 2020.
After completing most of its initial restructuring and cost-savings
initiatives in fiscal 2019, the company planned to shift its focus
to growth investments, but those plans were derailed by the
COVID-19 pandemic. Now that it has additional liquidity, we expect
the company to resume its growth initiatives, primarily those
focused on digital marketing and ecommerce. However, the company
has to increase its spending to achieve growth, which may deplete
its recent liquidity injection if sales growth doesn't accelerate
significantly in the coming quarters. A poor holiday selling season
could extend its losses into next year and prevent it from
investing sufficiently in the business to complete a successful
turnaround.
"We believe another restructuring is possible in the next 12 months
because we forecast Boardriders will have minimal headroom under
its new leverage covenant. One of the tranches of Boardriders'
new super senior term loan has a 6.5x leverage covenant that will
be tested starting the first quarter of fiscal 2022 (the quarter
ending January 2022). This means the company has a little more than
one year to execute its turnaround plan and significantly improve
EBITDA such that it is in compliance with the leverage covenant. We
forecast the company will have minimal headroom under this
covenant. If the company encounters additional operating challenges
and underperforms our forecast, we believe it could engage in
another distressed restructuring transaction to amend the covenant
and reduce the debt burden.
"The negative outlook reflects that we could lower the rating if
the company's turnaround plans are unsuccessful thereby pressuring
cash flow and liquidity such that a default becomes inevitable
within six months.
"We believe a default could become inevitable within six months if
low sales numbers keep the company unprofitable and cause another
liquidity shortfall, or if it becomes highly apparent it will
violate its leverage covenant prompting it to engage in another
distressed restructuring transaction.
"We could consider a positive rating action once demand for the
company's products improves such that unadjusted EBITDA is well in
excess of its cash interest expense, it is able to fund its working
capital and growth initiatives, and it becomes less likely the
company will breach its leverage covenant when it begins to be
tested in January 2022."
BORGER ENERGY: S&P Affirms 'B-' Rating on $117MM Sr. Secured Bonds
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' rating on U.S. electricity and
steam generator Borger Energy Associates L.P./Borger Funding
Corp.'s (Borger) $117 million senior secured first-mortgage bonds
due Dec. 31, 2022.
At the same time, S&P is revising its recovery rating on the senior
debt to '3' from '4', based on a recalibration of its forecasting
assumptions, indicating its expectation of meaningful (50%-70%)
recovery in the event of a payment default.
The outlook is stable. S&P expects Borger to achieve a minimum debt
service coverage ratio (DSCR) of 0.79x in 2020.
Borger Energy Associates L.P./Borger Funding Corp. (Borger) is a
230 megawatt natural gas-fired cogeneration facility near Borger,
Texas. Commercial operations began June 12, 1999. The project sells
its energy output and electrical capacity to Southwestern Public
Service Co. (SPS) under the terms of a 25-year power purchase
agreement (PPA) that expires in June of 2024. Additionally, the
project sells its steam output to Phillips 66 under a 20-year steam
sales and operating agreement that expires in June 2024.
S&P said, "We revised the recovery rating on the senior notes to
'3' (rounded estimate: 65%) from '4' (rounded estimate: 40%). The
improved recovery prospects are largely due a recalibration of our
default assumptions given the short forecast period and less debt
remaining at the project. We conservatively cap our default
assumptions to the end of the debt term (2022), while the PPA runs
up to 2024.
"The project's performance has been in line with our expectations
with no operational disruptions and we expect this trend to
continue. In 2019 and so far in 2020, the project has operated with
minimum operational disruptions, steady steam revenues supported by
the amended steam agreement albeit with lower energy margins
(compared to previous years) as a result of a price reset under its
PPA with SPS coupled with lower capacity factors and low gas
prices. We do not expect major disruptions in operations from the
current pandemic environment. The project continues to meet its
availability target (92% target as per the PPA) to receive full
capacity payments." The PPA with SPS is the main source of
project's cash flows. This PPA provides capacity revenues based on
100% contract capacity and energy revenues based on dispatch.
Additionally, the operations and maintenance (O&M) payment consists
of a fixed-rate and a variable-rate component.
So far in 2020, the project has performed well with availability
and capacity factors of about 94% and 73%, respectively. S&P said,
"We expect the project's capacity factor will gradually decline as
SPS moves its generation sources toward renewable generation but we
do not expect any drastic decline over the debt term. We expect the
project to achieve a minimum DSCR of 0.79x in 2020. This is only
slightly lower than management's expectation because of our
difference in some assumptions--for example fuel costs and heat
rates. Given our current assumptions, we expect the DSCR will
remain close, or a little higher than 1x in 2021 and 2022, when the
debt matures."
The project's steam revenues have been consistent and volumes have
not been disrupted by the pandemic. This is important because even
though some portion of the steam revenues are fixed due to the
changes in the amended steam agreement (effective June 9, 2019),
the steam margins remain directly exposed to the variable demand of
the refinery off-taker (WRB Refining L.P.) and natural gas price
volatility.
S&P said, "We view the project's liquidity as critical to the
current rating, especially in years when the DSCR is less than or
close to 1x. The availability of adequate liquidity is critical to
make debt service payments in years when cash flows are less than
sufficient. In our base case and downside case scenarios, the
project generates a DSCR of below or close to 1x from 2020-2022. We
therefore monitor the project's liquidity carefully and identify it
as a key risk to the 'B-' rating." As on June 30, 2020, the
project's liquidity sources included cash and available reserves
($1.6 million in restricted and unrestricted cash, and a six-month
letter of credit (LOC) backed debt service reserve).
"The stable outlook reflects our view that the project is fairly
insulated from the current pandemic's fallout and will continue to
operate with minimal operational disruptions provided its liquidity
does not significantly decline, which it does not under our base
case scenario. The minimum DSCR of 0.79x, which underpins the 'B-'
rating, occurs in 2020.
"A lower rating would most likely stem from operational issues or a
deteriorating liquidity balance. Specifically, we could lower the
ratings if liquidity balances deteriorate such that the project
cannot meet its full debt-service obligations before depleting
reserves. This situation could occur if the plant's operational
performance weakens and gas price decreases materially.
"Although we consider an upgrade less likely because DSCR remains
close to 1x in 2020-2022, we could raise the rating if the project
maintains consistent operating performance and is able to generate
cash flows that results in a minimum DSCR in the middle of the
1.0x-1.4x range, liquidity balances remain sufficient, and we
continue to rate the parent company and the irreplaceable revenue
counterparties above the project."
BUZZARDS BENCH: Auction Cancelled, Failed to Attract Viable Bids
----------------------------------------------------------------
Buzzards Bench, LLC and Buzzards Bench Holdings, LLC cancelled the
auction sale of substantially all their assets.
The auction was originally scheduled for September 8, 2020.
The auction was cancelled after the Debtors only received one
Qualified Bid by the August 31 bid deadline.
Jason S. Brookner, Esq., at Gray Reed & McGraw, counsel to the
Debtors, said that bid was insufficient to pay off the Debtor's
prepetition secured debt. "As a result, as provided in the Bid
Procedures, the Debtors intend to pursue an Alternative Transaction
and cancel the Auction," Brookner said.
The Alternative Transaction may be a restructuring transaction
under a confirmed joint chapter 11 plan of reorganization or
otherwise.
The Sale Hearing previously set for September 10, 2020, has been
rescheduled and will now take place on October 27, 2020 at 3:00
p.m. (CT) before the Honorable David R. Jones in the United States
Bankruptcy Court for the Southern District of Texas, 515 Rusk
Street, Courtroom 400, Houston, Texas 77002.
About Buzzards Bench
Buzzards Bench -- https://www.buzzardsbench.com/ -- owns and
operates natural gas production and processing assets located in
Carbon and Emery Counties in Utah. Buzzards Bench was established
in 2018 initially to acquire properties located in the Buzzards
Bench field in the State of Utah. These properties were previously
owned and operated by XTO Energy Inc., a subsidiary of ExxonMobil
Corporation.
Buzzards Bench, LLC, based in Houston, Texas, and its
debtor-affiliates sought Chapter 11 protection (Bankr. S.D. Tex.
Lead Case No. 20-32391) on April 30, 2020. In its petition, the
Debtor was estimated to have $10 million to $50 million in both
assets and liabilities. The petition was signed by Jeffrey Clarke,
chief executive officer, and manager.
The Honorable David R. Jones oversees the case. GRAY REED & MCGRAW
LLP, serves as bankruptcy counsel. Claro, LLC, serves as financial
and marketing advisor to the Debtors.
The Office of the U.S. Trustee on June 15, 2020, disclosed that no
official committee of unsecured creditors has been appointed in the
cases.
Counsel to lender 405 Redfish are Hunton Andrews Kurth LLP's Tad
Davidson -- taddavidson@HuntonAK.com -- and Joseph Rovira --
josephrovira@huntonak.com
BUZZARDS BENCH: Court Extends Plan Exclusivity Thru Oct. 30
-----------------------------------------------------------
Buzzards Bench, LLC, and Buzzards Bench Holdings, LLC, ask the U.S.
Bankruptcy Court for the Southern District of Texas, Houston
Division, to extend the periods to file a plan of reorganization
and solicit acceptances to the Plan, to and including October 30
and December 31, 2020, respectively.
Since the Petition Date, the Debtors have negotiated in good faith
and worked collaboratively with their stakeholders. The Debtors
have, among other things, secured critical financial and
operational relief through cash collateral usage, negotiated with
the agent to prepetition lender 405 Redfish LLC, filed their
schedules of assets and liabilities and statement of financial
affairs, engaged in a post-petition marketing and sale process of
their assets, and hired various professionals to help the Debtors
through the reorganization process.
The extension request, the Debtors contend, is justified and
appropriate and will provide the additional time to exercise sound
business judgment to efficiently and exclusively execute the
process set forth in the Bid Procedure Order and the Cash
Collateral Order. Also, the Debtors reveal they have paid their
undisputed post-petition debts when they come due in the ordinary
course of business.
The Debtors seek to maintain exclusivity so parties with competing
interests do not impede the Debtors' efforts to restructure. All
creditor constituencies are benefitted by providing the Debtors
with sufficient time to determine what transaction or combination
of transactions will provide the greatest value to their estate and
the greatest recovery to their creditors.
Absent an extension, the Debtors' exclusive right to file a plan of
reorganization was slated to expire August 28, 2020, and its
exclusive right to solicit plan acceptances expires October 37.
* * *
"The Motion is GRANTED as set forth herein," Judge David R. Jones
ruled on September 25.
The Debtors' exclusive period to file a chapter 11 plan is extended
through and including October 30, 2020, with respect to all parties
in interest other than 405 Redfish LLC, the Debtors' secured
lender.
With respect to Redfish, the Debtors' exclusive period to file a
chapter 11 plan was extended until September 30. If the Debtors
file a chapter 11 plan that is acceptable to Redfish by the Filing
Deadline, then the exclusive period in which only the Debtors may
file a chapter 11 plan shall automatically be extended until
October 30, provided that if the Debtors withdraw the Agreed Plan
or stop pursuing confirmation of the Agreed Plan, the exclusive
period shall terminate as to Redfish. The Debtors and Redfish may
extend the Filing Deadline by mutual written agreement (email shall
suffice).
The Debtors' exclusive period to solicit acceptances of a chapter
11 plan is extended through and including December 31, 2020.
The Court's Order is without prejudice to the Debtors' right to
seek such additional and further extensions of the Exclusivity
Periods as they may deem necessary or appropriate, and the rights
of parties in interest to oppose any further extension.
About Buzzards Bench
Buzzards Bench -- https://www.buzzardsbench.com/ -- owns and
operates natural gas production and processing assets located in
Carbon and Emery Counties in Utah. Buzzards Bench was established
in 2018 initially to acquire properties located in the Buzzards
Bench field in the State of Utah. These properties were previously
owned and operated by XTO Energy Inc., a subsidiary of ExxonMobil
Corporation.
Buzzards Bench, LLC, based in Houston, Texas, and its
debtor-affiliates sought Chapter 11 protection (Bankr. S.D. Tex.
Lead Case No. 20-32391) on April 30, 2020. In its petition, the
Debtor was estimated to have $10 million to $50 million in both
assets and liabilities. The petition was signed by Jeffrey Clarke,
chief executive officer, and manager.
The Honorable David R. Jones oversees the case. GRAY REED & MCGRAW
LLP, serves as bankruptcy counsel. Claro, LLC, serves as financial
and marketing advisor to the Debtors.
The Office of the U.S. Trustee on June 15, 2020, disclosed that no
official committee of unsecured creditors has been appointed in the
cases.
Counsel to lender 405 Redfish are Hunton Andrews Kurth LLP's Tad
Davidson -- taddavidson@HuntonAK.com -- and Joseph Rovira --
josephrovira@huntonak.com
CACHET FINANCIAL: Plan Exclusivity Period Extended Until Nov. 19
----------------------------------------------------------------
At the behest of Cachet Financial Services, Judge Vincent P.
Zurzolo of the U.S. Bankruptcy Court for the Central District of
California, Los Angeles Division, extended the period within which
the Debtor has the exclusive right to file a plan of reorganization
through and including November 19, 2020, and to solicit acceptances
of the plan through and including January 19, 2021, respectively.
Since the Petition Date, the Debtor has made substantial progress
to resolve some of the litigation claims arising from events prior
to the Petition Date including the MyPayroll Action, the P2B
Action, and the Pinnacle Action.
On September 23, 2019, the Debtor filed a Complaint against
MyPayroll, Mann, Valuewise Corporation, Ross Personnel Consultants,
Inc., Southwestern Payroll Services, Inc., Essque, Inc., and Does
1-10 in the U.S. District Court for the Northern District of New
York Court, commencing Case No. 1:19-cv-01181-FJS-CFH ("MyPayroll
Action") and a motion for default against MyPayroll and others
seeking a judgment of over $100 million. The motion remains under
submission and the Debtor expects the judgment will soon be
entered. On October 16, 2019, the New York District Court issued an
injunction with respect to sums held by various banks ("MyPayroll
Injunction"). Once entered, the Debtor will work to collect on the
judgment. The Debtor may also be required to pursue the collection
of any judgment it obtains in the MyPayroll Action against third
parties who are not currently subject to the MyPayroll Injunction.
On February 11, 2020, the Debtor filed a Complaint against P2BI
Holdings LLC d/b/a P2B Investor, in the United States Bankruptcy
Court, commencing Adversary Case No. 2:20-ap-01028-VA ("P2B
Action"). The P2B Action was resolved pursuant to a settlement that
was approved by the Court pursuant to an order entered on May 1,
2020. Under the settlement, the Debtor's bankruptcy estate received
approximately $750,000.
C&J Associates, Inc., dba Pinnacle Workforce Solutions, was a
Remarketer that contracted with the Debtor. In September 2016,
Pinnacle directed payroll transfers which were non-sufficient funds
("NSF"). Pinnacle cured the initial NSF while continuing to provide
directions to the Debtor to make further ACH transfers. Upon
Pinnacle's refusal to cure a Pinnacle directed ACH payment
resulting in a substantial NSF and upon Pinnacle's cessation of any
further communication with the Debtor, the Debtor froze Pinnacle's
funds. Pinnacle then closed its doors and ceased doing business.
The Debtor's subsequent investigation determined that among other
things, Pinnacle had been engaging in an ongoing fraud on the
Debtor relative to Pinnacle's directed ACH transactions. On
November 29, 2016, the Debtor filed an interpleader action in the
United States District Court for the Northern District of
California against Pinnacle and others, commencing Case No.
5:16-cv-06862 ("Pinnacle Action"). With interest accruals, the
current amount on deposit in the Pinnacle Action is $1,958,824.47.
A Special Master was appointed to oversee reasonable claims and
distribution processes to handle the claims in a less formal and
more expeditious manner. Pursuant to an order entered on March 20,
2020, the Debtor was granted relief from the automatic stay to
proceed in the Pinnacle Action to allow the Special Master to file
his final report, to allow the Court to enter an order authorizing
the distribution of funds in this case, and to allow any funds
remaining after distributions are made in this case to be paid to
the Debtor.
The Debtor has tendered claims to three insurance carriers which
are reviewing thousands of pages of documents in support of the
claims.
It has recently filed motions for Rule 2004 examinations and
production of documents by various parties related to transfers
that occurred prior to the Petition Date, as well as for breach of
contract, interference with business relations, and other related
litigation claims which may have to be prosecuted through lawsuits
outside of Bankruptcy Court or adversary proceedings filed in the
Bankruptcy Court. These examinations and document productions are
already underway and are continuing to be conducted over the next
few weeks.
It has also moved toward resolution of an interpleader involving
Bancorp which is an important factor impacting the Debtor's goals
in this case because if some or all of the Remarketers can be paid
from the Stake, it will substantially reduce the number of claims
in the Estate. Before the Stake can be disbursed, however, two
issues needed to be addressed: (1) determining the claims to the
Stake; and then (2) reconciling the activity in the Debtor's
accounts after Bancorp terminated its relationship with the Debtor
and froze the Debtor's accounts. These tasks have been
substantially completed and the Debtor now has the time to address
this reconciliation with the Committee and Bancorp which will allow
for the resolution and payment of over 90% of the Settlement
Account Claims and Reserve Account Claims. The Debtor's
reconciliation shows that the total in those two categories is
approximately $17.2 million while the amount on hand in the Bancorp
Interpleader is approximately $15.8 million. Because of this, the
Debtor believes it is prudent to make a pro-rata distribution to
the Remarketer creditors on account of their Settlement Account
Claims and Reserve Account Claims immediately through the Bancorp
Interpleader. The majority of the remainder of the Remarketer
claims appear to be estimated amounts for damages, setoffs, and/or
other items that are not liquidated and disputed by the Debtor and
will be resolved through the Debtor's bankruptcy case through the
claims objection process and/or the Debtor's plan.
The Debtor had obtained the general claims bar date of September
10, 2020, for non-Remarketer claims. Once this date has passed, the
Debtor will identify potentially objectionable claims and where
necessary file motions on the disputed claims.
The Debtor has taken several affirmative steps progressing toward
resolution of this case and payment of allowed claims, including
but not limited to resolving multiple litigation claims including
the MyPayroll Action, the P2B Action, and the Pinnacle Action,
setting the special bar date for Remarketer claims and following
the expiration of that deadline reconciling the Settlement Account
Claims and Reserve Account Claims with the Debtor's records,
setting the general claims bar date for non-Remarketer claims,
compiling information and submitting claims to insurers, and
commencing the Rule 2004 examination process with a number of
entities to investigate the Estate's potential claims.
Now the requested extension is granted, the Debtor will be able to
accomplish two tasks anticipated to greatly reduce claims in the
case and at the same time simplify the Debtor's Chapter 11 plan.
First, the Debtor has completed its review and reconciliation of
the Remarketer claims and it appears that funds on hand in the
Bancorp Interpleader can be released such that over 90% of the
Remarketer claims can be paid immediately through the return of
funds:
(i) held in the ACH Settlement Account formerly held at
Bancorp that constitute funds debited from the Remarketer and/or
the Remarketer's customers ("Settlement Account Claims"); and
(ii) formerly held at Bancorp related to certain reserve
accounts established under the Remarketer Agreements ("Reserve
Account Claims").
The extension also will allow time for the Debtor to review the
non-Remarketer claims once the general claims bar date of September
10, 2020, has passed, identify potentially objectionable claims,
and where necessary file motions on the disputed claims.
Since it is anticipated these two events will result in a
substantial reduction of claims and assist the Debtor to propose a
much less complicated plan and streamline the confirmation process
for all parties, the Debtor believes that good cause exists for
extending the exclusivity periods a second time. The relief sought
will allow the Estate to preserve and maintain the opportunity for
an orderly, efficient, and cost-effective resolution of this case.
To resolve an informal objection to the Motion raised by the
Official Committee of Unsecured Creditors of the Debtor's estate,
the Debtor will not seek additional extensions of the exclusivity
periods.
Absent the extension, the Debtor's exclusivity period to file a
plan was slated to expire August 21, 2020, and the solicitation
period October 21, 2020, respectively.
About Cachet Financial Services
Cachet Financial Services -- https://www.cachetservices.com/ --
provides Automated Clearing House (ACH) processing services for
payroll-related electronic transactions, including direct deposits,
tax payments, garnishment payments, benefits payments, 401(k)
payments, expense reimbursement payments, agency checks, and fee
collection.
Cachet Financial Services, based in Pasadena, CA, filed a Chapter11
petition (Bankr. C.D. Cal. Case No. 20-10654) on Jan. 21, 2020. In
the petition signed by Aberash Asfaw, president, the Debtor was
estimated to have $10 million to $50 million in both assets and
liabilities. The Honorable Vincent P. Zurzolo presides over the
case. James C. Bastian, Esq., at Shulman Bastian LLP, serves as the
Debtor's bankruptcy counsel.
On May 15, 2020, the Official Committee of unsecured creditors of
the Debtor seeks approval from the U.S. Bankruptcy Court for the
Central District of California to retain Sheppard, Mullin, Richter
& Hampton LLP as its counsel.
CALIFORNIA PIZZA: Oct. 8 Auction of All Assets Set
--------------------------------------------------
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern
District of Texas authorized the bidding procedures proposed by
California Pizza Kitchen, Inc. and affiliates in connection with
the auction sale of substantially all assets.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 2, 2020 at 12:00 p.m. (CT)
b. Initial Bid: In the event a Stalking Horse Bidder is
selected, the Initial Minimum Overbid will include the amount
provided for in the Stalking Horse Bid, plus the amount of the Bid
Protections, plus $500,000.
c. Deposit: 10% of the aggregate value of the cash and
non-cash consideration of the Bid
d. Auction: The Auction, if held, will commence on Oct. 8,
2020, at 10:00 a.m. (CT) via remote video. If the Debtors elect
not to conduct an Auction, then they will file a notice with the
Court of such election within two business days of the
determination of such election.
e. Bid Increments: $500,000
f. Sale Objection Deadline: The deadline established by the
Court by which interested parties must file objections to
Confirmation of the Plan.
g. Any Secured Creditor will have the right to credit bid all
or a portion of the value of such Secured Creditor's claims.
Except as otherwise provided in the Final Purchase Agreement, the
Sale of some or all Assets, as applicable, will be on an "as is,
where is, with all faults, and without any warranty whatsoever,
express or implied" basis and without representations or warranties
of any kind, nature or description.
The Debtors will present the results of the Auction(s) (if any) or
otherwise present the Winning Bidder(s) to the Court at the
Confirmation Hearing.
If the Debtors elect not to conduct an Auction, then the Debtors
will file a notice with the Court of such election within two
business days of the determination of such election by them.
Pursuant to the Bidding Procedures, including any applicable
consent and consultation rights therein, the Debtors are
authorized, but not directed, to select one or more bidders to act
as the Stalking Horse Bidder, and are further authorized, but not
directed, to enter into a Stalking Horse Agreement with such
Stalking Horse Bidder.
The Bid Protections are approved in their entirety and are payable
in accordance with, and subject to the terms of, any Stalking Horse
Agreement.
No later than one business day after the selection of a Stalking
Horse Bidder (if such selection is made), and in prior consultation
with the Committee, the Debtors will file with the Court and cause
to be published on the case website Stalking Horse Selection
Notice.
Parties in interest may file a Stalking Horse Objection within
seven calendar days after service of the Stalking Horse Selection
Notice.
If no timely Stalking Horse Objection is filed and served with
respect to a Stalking Horse Bid in accordance with the Bidding
Procedures, the Bid Protections contemplated by such bid will be
deemed approved without further order of the Court upon the
expiration of seven calendar days after service of the Stalking
Horse Selection Notice.
Notwithstanding anything to the contrary in the Order or the
Bidding Procedures, the Order will only apply while the
Restructuring Support Agreement remains in full force and effect
and the New Bid Procedures Trigger has not occurred.
The terms and conditions of the Order will be immediately effective
and enforceable upon its entry.
Notice of the Motion as provided therein will be deemed good and
sufficient notice of such Motion and the requirements of Bankruptcy
Rule 6004(a) and the Bankruptcy Local Rules are satisfied by such
notice.
A copy of the Bidding Procedures is available at
https://tinyurl.com/y5ueq8e7 from PacerMonitor.com free of charge.
About California Pizza Kitchen
California Pizza Kitchen, Inc. -- http://www.cpk.com/-- is a
casual dining restaurant chain that specializes in California-style
pizza. Since opening its doors in Beverly Hills in 1985, CPK has
grown from a single location to more than 200 restaurants
worldwide. CPK's traditional dine-in locations are full-service
restaurants that serve pizza, salads, pastas and other
California-inspired fare, alongside a curated selection of wines
and a menu of handcrafted cocktails and craft beers. Though the
Company's dine-in restaurants are the primary way the Company
serves its customers, CPK also has a number of "off-premises"
services and licensing agreements that allow customers to get their
favorite CPK dishes on the go.
California Pizza Kitchen, Inc., filed a Chapter 11 petition (Bankr.
S.D. Tex. Case No. 20-33752) on July 29, 2020. The Hon. Marvin
Isgur oversees the case.
At the time of filing, the Debtors have $100 million to $500
million estimated assets and $500 million to $1 billion estimated
liabilities.
Kirkland & Ellis is serving as legal counsel to CPK, Guggenheim
Securities, LLC is serving as its financial advisor and investment
banker, and Alvarez & Marsal, Inc., as restructuring advisor.
Gibson, Dunn & Crutcher LLP is acting as legal counsel for the
group of first lien lenders and FTI Consulting, Inc. is acting as
its financial advisor. Additional information about the Chapter 11
case can be found at https://cases.primeclerk.com/CPK
CALPINE CORP: S&P Upgrades ICR to 'BB-' on Improved Leverage
------------------------------------------------------------
S&P Global Ratings has upgraded U.S.-based independent power
producer (IPP) Calpine Corp. to 'BB-' from 'B+'. S&P has also
raised its ratings on Calpine's senior secured debt to 'BB+' from
'BB', and its senior unsecured debt to 'B+' from 'B'. The recovery
ratings on the secured and unsecured debt are unchanged at '1' and
'5', respectively.
S&P has revised Calpine's financial risk assessment to FS-5 from
FS-6, to reflect its expectation that adjusted leverage will be
below 5.0x and sponsors would reassess capital allocations to
maintain that ratio below 5.0x.
The stable outlook reflects S&P's expectation that adjusted debt to
EBITDA will remain at about 4.75x through 2022.
S&P said, "Our rating revision factors strong performance in 2020
that we expect to see through 2022. Not only is merchant power a
price-taking business, it is biased to the downside in a recession
because both fuel prices and market heat rates decline. Based on
forward curves and the current level of hedges, we previously
estimated Calpine's wholesale EBITDA could decline 15%-20% in 2021
before hedging and mitigation. We saw Calpine's ability to preserve
2021 cash flows as a material risk if there is a second COVID wave,
or should the actual path of the recovery be much slower than
anticipated.
"We are now of the view that Calpine's significant free operating
cash flow (FOCF; funds from operation [FFO] less capital
expenditures [capex]) will continue in 2021 based on the hedging
already undertaken. Generally, coal, oil, and nuclear assets (which
all of Calpine's peers own) have considerably higher capex needs
than Calpine's younger, all-gas fleet. COVID has only underscored
this aspect as we see fossil-fired fleets such as NRG Energy and
Vistra Corp. generate less in 2020 even as generation volumes for
Calpine have held relatively flat compared with 2019.
"Our upgrade reflects the higher level of hedged cash flow through
2023 buoyed by a significant proportion of contracted capacity
margins, regulated capacity margins, and resource adequacy pricing
in California that we expect to be robust through 2025 as thermal
retirements and acknowledgement of solar limits have tightened
capacity supply relative to demand."
The COVID-19 pandemic's impact on Calpine is relatively muted
through August. While S&P still expects some credit weakening as
Calpine experiences the continuing impact of a slower commercial
and industrial (C&I) segment in the second half of the year, volume
degradation has been muted. Management believes it is positioned to
achieve full-year 2020 unlevered free cash flow and other liquidity
metrics, as well as EBITDA levels exceeding the range of its 2019
results of $2.25 billion.
Backwardated power prices remain a concern for Calpine but have
consistently lifted over the past four years. A major risk that S&P
assesses for all IPPs, including Calpine, has been the significant
backwardation of forward power curves in markets such as the
Electric Reliability Council of Texas (ERCOT). However, over the
past four years S&P has observed that forward markets are heavily
influenced by a small number of power purchase agreement
(PPA)-related transactions in a relatively illiquid hedging market
for the outer years (over two years). The forward prices also do
not appear to reflect scarcity pricing impacts associated with
increasing intermittent resources. As a result, forward power
prices have consistently risen in the late summer (or fall) of the
immediately preceding year of delivery as liquidity improved,
resulting in an improvement in our estimate of Calpine's EBITDA for
2019 and 2020 (as measured in years 2016 through 2019.
Calpine's commercial team uses the volatility in forward curves to
create EBITDA and free cash flow (FCF) stability. Given about three
years of visibility, Calpine typically has several opportunities to
transact and optimize its hedging positions. The company has
repeatedly shown its ability to hedge into the volatility, despite
a backwardated forward curve.
While demand has picked up, and there are initial signs of an
uplift in 2021 forward power prices, COVID may dampen any
meaningful uplift in forward power prices as experienced over the
past three years. However, Calpine is very well hedged in
California and ERCOT for 2021, and has a highly hedged position for
2022. S&P sees some potential of margin-at-risk in ERCOT in 2022.
Medium-term risks largely relate to significant renewable build in
California and expected build in ERCOT. As an investment thesis,
the question that is foremost for most investors is the medium- to
long-term prospects for conventional (including gas-fired)
generation, given that cost curve for renewables has continually
declined, raising the prospects of an influx of large build. S&P
sees signs this is not a battle between renewables and gas-fired
generation, with both coexisting through the decade at the expense
of coal-fired generation.
Perversely, the latest modeling in California's Integrated Resource
Plan confirm that almost all current efficient gas generation is
necessary through 2030. However, utilization factors of the gas
infrastructure (both pipelines and generation) will likely
decrease. S&P said, "As a result, we believe the nature of
compensation for these assets is shifting. We already see some
evidence of this in the sharply higher resource adequacy payments
that have increased to over $5/KW-month through 2024 from
$1.5/KW-month as recently as 2017. We believe policymakers need to
address adequate compensation mechanisms and system planning to
maintain reliability while avoiding rate spirals."
Similarly, in ERCOT, the market is now dependent upon new build to
sustain reserve margin and questions persist of whether all of them
will materialize given uncertainty in demand, uncertainty of
financing, and availability of tax equity in the aftermath of
COVID.
Calpine's retail business is still not big enough to counter the
larger wholesale commodity exposure. S&P said, "We see the lack of
a larger retail power business as a weakness relative to peers.
Calpine still generates only about 8%-10% of its EBITDA through its
retail businesses, a proportion that is lower than that of its
peers; NRG Energy Inc. and Vistra Corp. generate 55% and 25%,
respectively (we note that NRG's potential short position in
scarcity months leads to different credit risks). We do not expect
Calpine's retail operations to significantly expand in the forecast
period, though we generally view retail as an important element for
the creditworthiness of U.S. IPPs. We now consider retail power
activity as vital for growth, given our view that wholesale markets
will continue to weaken under the onslaught of distributed energy
resources and energy efficiency."
Free cash flow generation and cash flow generation have stayed
high. Calpine has been able to convert a high proportion of its
cash flow into FOCF. Under S&P's base case, Calpine turns every $1
of EBITDA into over $0.5 of FOCF, a cash flow conversion ratio of
about 50%. This reflects, in part, Calpine's newer natural
gas-fired generation fleet that does not require environmental
retrofits and historical loss carryforwards.
S&P said, "Similarly, over the next three years, we expect Calpine
to generate positive discretionary cash, but we have given no
surplus cash credit to the financial ratios because we expect the
company will distribute much of the excess cash to the sponsor.
More relevant to Calpine's credit quality is the longer-term
leverage levels (post-2022) that the company will manage given
backwardation in power prices and uncertainty in wholesale power
markets.
"We have improved our financial policy assessment of the company to
FS-5 from FS-6. Companies owned by financial sponsors (or
co-investors that are specifically interested in distributions) are
normally scored at FS-6, typically because of the use of high
leverage and our expectation that leverage is likely to stay at
that level.
"We have reassessed Calpine's financial risk profile as a FS-5,
effectively representing an aggressive financial risk profile,
reflecting the sponsor's commitment to keep adjusted debt to EBITDA
in the 4.0x-5.0x range (given its private status we also factor
that stated commitment in an 8-K filing). While Calpine's
calculation of this ratio and ours differs somewhat, we still
calculate the leverage ratio at below 5.0x through 2023. Our
expectation implies that should cash flow fall short of
expectation, the sponsors will reassess their capital allocation
decision to maintain leverage below 5.0x.
"In 2020, we expect to see Calpine's adjusted FFO to debt at about
13.8%-14.0% and its adjusted debt to EBITDA at about 4.8x (our
ratios are higher than the company's due to imputation of
off–balance-sheet debt). We expect leverage ratios at this level
through 2023, which is our forecast window for credits in the 'BB'
category.
"We impute the Geysers nonrecourse project finance debt in
Calpine's consolidated accounts. When an investment is important to
a company's long-term strategy (i.e. is a core or highly strategic
investment) we tend to consolidate it with the financials, even if
the project's obligation is nonrecourse to the parent. We impute
the project finance debt at the Geysers geothermal power plant in
Calpine's account because we believe these assets are valuable to
the company and it is unlikely that Calpine will walk away from
them. Correspondingly, we consolidate the Geyser's EBITDA (as
opposed to distributions) with Calpine's financials.
"We have confirmed that production at the Geysers has not been
affected from the recent California wildfires, because much of the
vegetation surrounding the Geysers had been burned in previous
wildfires, so the threat from new fires is relatively low. However,
bigger fires each successive year raises the prospect that future
production could face curtailment, if not direct damage. We have
factored that into our assessment through lower annual production
in future years compared to budget but consider a direct impact as
an event risk.
"Somewhat separate yet related (as it relates to lower cash flows),
we have not assumed a further leveraging, or minority ownership
sale, of the Geysers into our assessment. If either of these were
to happen, the credit issue will have less to do with the reduction
in cash flow but more to do with the use of the proceeds.
"Our financial ratio calculations also consolidate other project
debt as we consider these assets core to Calpine. We note that this
is a conservative assessment as the company could, legally, walk
away from its nonrecourse obligations.
"The stable outlook reflects our expectation that performance will
remain buoyed through 2020 in ERCOT relative to our assumptions,
and California will also witness upside in resource adequacy
payments. In our view, financial performance could improve, with
downside risk through 2023 contained by the high level of hedging.
The outlook factors our expectation that adjusted debt to EBITDA
will improve to less than 5x and remain about 4.75x through 2022.
"The factors that would lead to a downgrade are primarily
financial, as we expect no adverse changes in the company's
business risk. These factors would especially include a significant
reduction in natural gas prices or market heat rates. More
specifically, we would likely revise the outlook to negative if
adjusted FFO to debt falls to less than 13%, or if adjusted debt to
EBITDA increases and stays above 5.0x. This could happen if the
recent improvement in market fundamentals falters or as a result of
the co-investors' influence over Calpine's financial policy. We
note that at year-end 2019, Calpine slowed its original
leverage-reduction plan, choosing instead to increase distributions
to the sponsors. A credit deterioration may also arise if Energy
Capital Partners exits its investment in Calpine and a new
(majority) owner has a higher appetite for leverage."
Given the prospects of a backwardation in cash flow from commodity
pressures, an upgrade would require Calpine's adjusted FFO to debt
to remain above 17% and adjusted debt to EBITDA to be sustained
below 4.25x. Given Calpine's ability to achieve these financial
measures would be based on a capital allocation decision, rather
than influenced by market risk, any upward momentum is unlikely as
we believe the sponsors would not further delever the company,
choosing instead to take distributions.
CENTENNIAL HOTEL: Proposed Sale of All Assets for $3.2M Denied
--------------------------------------------------------------
Judge Thomas B. McNamara of the U.S. Bankruptcy Court for the
District of Colorado denied Centennial Hotel, LLC's sale of
substantially all of its real and personal property to Ruchira Ray
Barman and Rakesh Kumar Sharma for $3,192,000, pursuant to their
Purchase and Sale Agreement, free and clear of all liens, claims,
and encumbrances.
In connection with the Sale Contract, the Buyers provided an
earnest money deposit in the amount of $250,000. The Sale Contract
further provided that, upon entry of an Order approving the sale of
the Hotel, the Buyers will have 90 days to complete due diligence.
At the conclusion of the due diligence period, it was proposed that
$50,000 of the Earnest Money will become non-refundable in the
event that the Buyers fail to close the sale.
The Debtor proposed to use the Purchase Price to pay costs of
closing, including any commissions owed to CBRE, any tax claims
resulting from the sale, any secured claim for the State of
Colorado, the secured claim of Wells Fargo, and the secured portion
of GGF's claim.
The Second Amended and Restated Ground Lease and Agreement is
deemed rejected.
About Centennial Hotel
Centennial Hotel, LLC, a privately held company in the hotel and
motel business, filed its voluntary Chapter 11 petition (Bankr. D.
Colo. Case No. 19-20694) on Dec. 17, 2019. In the petition signed
by Gregory G. Fulton, managing member of GGF, LLC, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities. Lee M. Kutner, Esq. at Kutner Brinen, P.C., is the
Debtor's legal counsel.
CHF COLLEGIATE HOUSING: S&P Cuts 2014A Revenue Bond Rating to 'BB+'
-------------------------------------------------------------------
S&P Global Ratings lowered its long-term rating and underlying
rating (SPUR) to 'BB+' from 'BBB-' on New Hope Cultural Education
Finance Corp., Texas' series 2014A student housing revenue bonds,
issued for CHF Collegiate Housing College Station I LLC
(CHF-College Station), a not-for-profit corporation organized for
the sole purpose of constructing this student housing project for
Texas A&M University (TAMU) at the College Station campus. The
outlook is negative.
"The downgrade reflects our expectation of a decline in net
operating revenues for fiscal 2021, which would produce projected
debt service coverage below 1.20x and below-covenant requirements,"
said S&P Global Ratings credit analyst James Gallardo.
S&P said, "The negative outlook also reflects our view that the
project's financial operations and debt service coverage could be
further pressured by the COVID-19 pandemic during the outlook
period.
"In our view, privatized student housing projects face elevated
social risk due to the uncertainty on the duration of the COVID-19
pandemic, and unknown effect on fall 2020 enrollment and occupancy
levels. Our ratings action is a result of COVID-19 and the lower
occupancy at the housing project. We view the risks posed by
COVID-19 to public health and safety as a social risk under our
environmental, social, and governance factors. Despite the elevated
social risk, we believe CHF Collegiate Housing College Station I
LLC's environmental and governance risks are in line with our view
of the sector as a whole."
CHG PPC: S&P Raises ICR to 'B' on Strong Recovery; Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings upgraded U.S.-based CHG PPC Intermediate II
LLC's (CHG) to 'B' from 'B-' based on its expectations that
quick-service restaurants (QSRs) will continue to operate even if
the virus persists and that the retail segment will remain strong
from increased food-at-home consumption.
S&P said, "Commensurately, we are raising our issue-level rating on
the first-lien senior secured credit facilities to 'B' from 'B-'.
The recovery rating remains '3'.
"The stable outlook reflects our expectation that the company will
maintain leverage of 7x or below for the next 12 months.
"We are raising the ratings due to stronger-than-expected recovery
in the foodservice business. At the outset of the COVID-19
pandemic, restaurants and other foodservice locations were largely
closed throughout April 2020, resulting in our expectation of a
double-digit percent revenue decline for the fiscal year ending
March 2021. While some QSRs continued to operate their
drive-through and delivery services, we had expected heightened
caution against eating out and that weaker discretionary income
would severely disrupt the company's revenues. Additionally, a
large portion of QSRs in Europe, where the company generates
approximately 15% of revenues, closed completely, even their
drive-through services, during the first quarter of fiscal 2021. We
now expect results to exceed our expectations due to the
substantial reopening of QSR and full-service restaurants in the
U.S. and in European markets. U.S. Census Bureau data showed
sequential monthly improvement in food services & drinking places
revenues from $30 billion in April 2020 to about $55 billion in
August 2020, though still down from $67 billion a year ago."
Although CHG's sales declined about 18% for the first fiscal
quarter of 2021 over the same prior year period, adjusted EBITDA
declined at about 12% due to the company's cost management efforts.
S&P said, "While we do expect sit-down restaurant headwinds for the
remainder of fiscal 2021, we expect sequential sales improvement in
subsequent quarters. This is due to restaurant reopenings,
increased consumer confidence to dine out, new business wins with
national chains, and stronger retail sales, resulting in our
expectation for low-single-digit sales growth for the year. The
company also instituted headcount reductions, temporarily shut
operations (which have all since reopened), and curtailed
discretionary spending to adjust its cost structure and protect its
margin profile. We expect that as sales rebound, the company's
margin profile will benefit from stronger overhead absorption,
resulting in a revised leverage expectation of about 5.5x-6x for
fiscal 2021 and free cash flow generation of over $70 million."
Given the company's significant exposure to the foodservice
channel, operating risks remain. About 70% of CHG's revenues are
from the foodservice channel, with three of its top five
foodservice customers being QSRs. Despite restaurants reopening
nationally, seating capacity remains limited to combat the spread
of COVID-19. Additionally, restaurants utilizing outdoor space to
remain open could suffer as the weather grows colder, further
limiting its seating capacity. While CHG is somewhat insulated from
these impacts given its higher QSR exposure, rising virus cases
could force additional policies to limit dining operations.
Long-term restrictions on dining out due to rising COVID-19 cases
remain a major risk, particularly for permanent restaurant
closures. For instance, in England, stricter lockdown measures were
re-implemented on Sept. 24, 2020, limiting restaurant operating
hours. S&P said, "We expect the company to continue benefitting
from stronger retail revenues, which make up approximately 30% of
the company's revenues, driven by increased dining at home.
Although retail sales may moderate in the back half of the year due
to some initial pantry-loading sales surges, we expect dining at
home trends to remain strong through the rest of fiscal 2021. As
such, we expect the company's retail products to continue to grow,
partially offsetting some of the softness in the foodservice
segment."
S&P said, "We expect cash flows to remain at historical levels and
liquidity to remain adequate. We expect the company to generate
over $70 million of free cash flow in fiscal 2021, driven by cost
reduction efforts and top-line recovery due to stronger QSR
revenues and retail growth. We also expect the company to continue
executing growth initiatives and efficiency improvements, spending
at least $30 million on capital expenditure (capex) in fiscal 2021.
This further supports our upgrade, as the company will generate
cash flow far exceeding its debt amortization payments. However, we
are cognizant of potential downside risks such as a combination of
further lockdown restrictions, moderating retail sales, and colder
weather limiting outdoor dining, which could hurt cash flow
generation. We believe the company will continue maintaining
adequate liquidity, with sources well exceeding uses. The company's
sustained cash flow generation strength, full availability on its
revolver, and $112 million of cash on the balance sheet as of June
27, 2020, more than cover its seasonal working capital peak, capex,
and debt service needs.
"We expect leverage to remain high and the company to continue
making acquisitions. The company is a consolidator in the highly
fragmented baked goods industry. Recent acquisitions include
Cookietree (a producer of premium cookies, cookie dough, brownies,
and scones) in 2018, Mid South Baking Co (a supplier of buns and
English muffins to QSRs) and Wback GmbH (a large-scale soft roll
bakery in Europe) in 2019. We expect the company to pursue
opportunistic acquisitions in category adjacencies or to expand its
bakery footprint to further round out its product portfolio and
grow its margin profile. While we have not modeled any material
acquisitions at the moment, the company currently has an adjusted
leverage position of 5.8x for the 12 months ended June 30, 2020. We
expect CHG will manage long-term adjusted leverage around 6x, but
may flex up for acquisitions.
"The stable outlook reflects our expectation for leverage to stay
at 7x or below over the next 12 months given that we anticipate
operating performance will remain resilient because of its QSR
exposure and strong retail business.
"We would lower the rating if leverage remains above 7x or if we
expect substantial free cash flow decline. While there could be
temporary increases in leverage due to lockdown measures, we would
expect a near-term recovery in credit measures to maintain the
current rating." A sustained increase in leverage or decline in
cash flow generation could result from:
-- Permanent disruptions in the dining industry caused by
COVID-19, such as large-scale restaurant closures; or
-- Business with top QSR customers deteriorating.
The company adopting aggressive financial policies, including a
large debt-financed acquisition or dividend to shareholders.
S&P could raise the rating if:
-- The company's financial sponsor commits to less aggressive
financial policies and to managing leverage below 5x. This could
occur if the company applied discretionary cash flow toward debt
repayment and did not pursue additional debt-financed
acquisitions.
-- The company increases its scale or geographic reach and further
diversifies its customer base, or expands its product offering.
CHISHOLM OIL: Court OKs Bankruptcy Plan, Sheds 93% of Debt
----------------------------------------------------------
Daniel Gill of Bloomberg Law reports that Chisholm Oil and Gas
Operating LLC won bankruptcy court approval of its reorganization
plan, wiping about $482 million of funded debt from its ledger.
The company will emerge from bankruptcy with about $34.77 million
in funded debt remaining.
Under the plan approved by Judge Brendan L. Shannon of the U.S.
Bankruptcy Court for the District of Delaware, creditors holding
$263 million of claims backed by reserves will get 95% of the new
equity in the reorganized company.
Term lenders will get 4% of the equity, worth less than 1% of their
$253 million in claims.
About Chisholm Oil & Gas LLC
Chisholm Oil and Gas Operating, LLC, is an exploration and
production company focused on acquiring, developing, and producing
oil and natural gas assets in the Anarkado Basin in Oklahoma in an
area commonly referred to as the Sooner Trend Anadarko Basin
Canadian and Kingfisher County.
Chisholm Oil and Gas Operating and its affiliates sought Chapter 11
protection (Bankr. Lead Case No. 20-11593) on June 17, 2020.
In the petition signed by CFO Michael Rigg, the Debtors were
estimated to have $1 billion to $10 billion in assets and $500
million to $1 billion in liabilities.
The Hon. Brendan Linehan Shannon presides over the cases.
The Debtors have tapped Weil, Gotshal & Manges, LLP and Young
Conaway Stargatt & Taylor, LLP as legal counsel; Evercore Group,
LLC as investment banker; Alvarez & Marsal North America, LLC as
financial advisor; and Omni Agent Solutions as claims and noticing
agent.
CLEARPOINT CHEMICALS: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Clearpoint Chemicals, LLC
18300 Scenic Highway 98
Fairhope, AL 36532-6844
Business Description: Clearpoint Chemicals, LLC --
https://www.clearpointchemicals.com --
operates in the specialty chemical services
industry. The Company develops customer-
specific chemical solutions, provides in-
house last mile logistics, deliver on-site
application and management, and continued
communication and project assessment
services.
Chapter 11 Petition Date: September 29, 2020
Court: United States Bankruptcy Court
Southern District of Alabama
Case No.: 20-12274
Debtor's Counsel: Alexandra K. Garrett, Esq.
SILVER, VOLT & GARRETT
4317-A Midmost Dr.
Mobile, AL 36609
Tel: (251) 343-0800
Email: agarrett@silvervolt.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by John Harian Foster, president.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/JDWN64Q/Clearpoint_Chemicals_LLC__alsbke-20-12274__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. 22nd State Bank Promissory Note $336,907
PO Box 99 & Security A
Louisville, AL
36048-0099
2. BYK USA, Inc. $365,054
524 S Cherry St
Wallingford, CT
06492-4453
3. Clearpoint Polymers, LLC Money Owed $723,214
18300 Scenic
Highway 98 Ste F
Fairhope, AL
36532-6860
4. Crimson Chemicals $340,722
PO Box 101478
Fort Worth, TX
76185-1478
5. Envirotech $173,531
PO Box 5512
Denver, CO
80217-5512
6. Finoric LLC $1,307,067
8115 Loop 540
Beasley, TX
77417-9485
7. Hoover Ferguson $971,756
PO Box 732866
Dallas, TX
75373-2866
8. Idealease of Acadlana, LLC $227,159
PO Box 52376
Lafayette, LA 70505
9. Integrity Applied Science $500,000
10765 Turner Blvd
Unit E
Longmont, CO
80504-9724
10. Isomeric Industries, Inc. $3,964,200
3400 Research
Forest Dr Ste B4
The Woodlands, TX
77381-4247
11. Oilfield Solutions, Inc. $1,511,461
2614 S County Road
1257
Midland, TX
79706-2845
12. PVS Chloralkall, Inc. $169,442
109000 Harper Ave
Detroit, MI 48201
13. Reagent Chemical & $405,965
Research
PO Box 95000
Philadelphia, PA
19195-0001
14. Rocky Mountain $470,397
Transload, Inc.
4475 E 74th Ave Ste 202
Commerce City, CO
80022-1406
15. Servis First Bank Loan $1,079,800
ServisFirst Bank
c/o Doug Rehm
316 S Baylen Ste Ste 100
Pensacola, FL
32502-5907
16. ServisFirst Bank Promissory Note $187,877
Attn: Doug Rehm & Security A
316 S Baylen St Ste 100
Pensacola, FL
32502-5907
17. Solnexus Chemical $185,297
6001 W Industrial Ave
Midland, TX
79706-2841
18. Solugen, Inc. $151,878
14594 Minneta St
Houston, TX
77035-6524
19. Steve Strbra $723,074
Consulting, Inc.
20. UMB Capital Finance Promissory Note $1,459,029
UMB Bank, N.A. & Security A
c/o James Rine, President
1010 Grand Blvd
Kansas City, MO 64106-2202
COMSTOCK RESOURCES: S&P Upgrades ICR to 'B'; Outlook Stable
-----------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
oil and gas exploration and production (E&P) company Comstock
Resources Inc. and its issue-level ratings on its debt to 'B' from
'B-'. S&P's '4' recovery rating (30%-50% recovery) on the company's
unsecured debt remains unchanged, though it is revising its rounded
recovery estimate to 45% from 40%.
The stable outlook incorporates Comstock's lack of near-term debt
maturities, low-cost structure, and sizeable hedge position. S&P
forecasts that the company's funds from operations (FFO)-to-debt
ratio will exceed 25% and debt to EBITDA of around 2.5x in 2021 and
expect liquidity to continue to improve over the next two years as
the company generates meaningful free cash flow.
S&P said, "We expect Comstock's financial measures to improve
substantially following the upward revision of our natural gas
price assumptions. We currently expect the company's FFO-to-debt
ratio to be just under 20% and its debt to EBITDA to be about 3.5x
in 2020 before improving to more than 25% and about 2.5x,
respectively, in 2021. Comstock successfully completed a common
stock offering in May, which facilitated the redemption of $210
million of its series A preferred stock and reduced its financial
leverage because we treat the preferred stock as a debt-like
instrument." The company does not face any near-term debt
maturities and has reduced the effect of commodity price volatility
by hedging more than 60% of its anticipated natural gas production
for 2021.
The company has dramatically increased its liquidity, primarily
through its recent debt offerings. After effectively completing
two series of 2026 note add-ons in June and August, Comstock used
over $730 million of the proceeds to pay down its heavily drawn RBL
facility maturing in 2024, which now has just over $500 million
drawn and nearly $900 million available on its $1.4 billion
borrowing base. S&P said, "The company has greatly improved its
liquidity position since the beginning of this year and we expect
further improvement over the next two years as the company uses its
excess cash flow to pay down outstanding borrowings. Furthermore,
we believe higher natural gas prices have reduced Comstock's
borrowing base redetermination risk for the upcoming fall cycle and
could provide additional hedging opportunities."
S&P said, "We expect the company's production to continue to grow
within cash flow. We estimate 2020 production of just below 1.3
billion cubic feet equivalent per day (bcfe/d) and forecast an
increase of roughly 10% in 2021 on a slightly higher capital
budget. Nevertheless, we expect Comstock to continue to generate
meaningful free cash flow, which it could use to reduce its
leverage. While the company has publicly disclosed that it may
evaluate and pursue strategic acquisitions, we would expect it to
fund any potential transaction at least partially with equity.
"Our stable outlook incorporates Comstock's lack of near-term debt
maturities, low-cost structure, and sizeable hedge position. We
forecast FFO to debt will exceed 25% and debt to EBITDA of about
2.5x in 2021 and expect liquidity to continue to improve over the
next two years as the company generates meaningful free cash flow.
"We could lower our rating on Comstock if its FFO to debt declines
below 20% on a sustained basis or its liquidity significantly
deteriorates. This could occur if commodity prices fall and the
company relies predominantly on its revolving credit facility to
fund its capital spending or if its production and costs are weaker
than we currently project.
"We could raise our rating on Comstock if it further expands its
production and developed reserves to levels that are more
comparable with those of its higher-rated peers. The company would
also need to maintain at least adequate liquidity, with a low
proportion of outstanding RBL borrowings relative to its capacity,
and FFO to debt comfortably above 20%."
CROWN SUBSEA: S&P Hikes Term Loan Rating to 'BB-', Affirms 'B' ICR
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
U.S.-based Crown Subsea Communications Holding Inc. (SubCom) and
raised its issue-level rating on its term loan to 'BB-' from 'B+'.
SubCom significantly reduced its debt balances with term loan
prepayments this year. The company has shifted to issuing surety
bonds, rather than letters of credit, as a form of financial
assurance for its new project work. As such, it reduced the size of
its cash collateralized letter of credit facility. SubCom then used
this cash to prepay its term loan, decreasing its debt leverage
while it increased its earnings this year.
S&P said, "Despite some work delays caused by the coronavirus
pandemic, we expect the demand for data and connectivity to bolster
SubCom's revenue. Although the company's revenue was negatively
affected by cable project delays earlier in 2020, we expect it to
experience a strong rebound through 2021 as delayed work due to the
pandemic resumes and the company executes on its project backlog.
The increase in SubCom's bookings and backlog this year provide
clear revenue visibility into fiscal year 2021. Overall, we expect
the company to benefit from healthy market demand supported by the
capital spending of its customers in the subsea fiber optic cable
market. We also assume its profitability will improve over the next
few quarters due to its higher-margin cable work. However, SubCom's
fixed-price contracts can expose it to unexpected additional
project costs, which could lead to some earnings volatility.
"We forecast strong free cash generation as a result of cash
inflows during the back-half of the year. We expect SubCom's recent
project bookings will result in increased cash balances at year-end
2020. However, we recognize the company's project-based demand can
lead to working capital swings that may negatively affect its FOCF
generation."
The stable outlook reflects the company's improved credit measures
in 2020 versus 2019 levels, with adjusted debt to EBITDA well below
2x and strong free cash flow, providing good headroom for any
unanticipated earnings volatility.
S&P said, "We could lower our ratings on SubCom if adjusted debt to
EBITDA were to increase above 6x or if we expect the FOCF-to-debt
ratio to fall below 3% on a sustained basis. This could occur if
the company's financial sponsor owners initiate a debt-financed
transaction. Alternatively, this could occur if the company were to
encounter unforeseen execution issues on a large project,
decreasing EBITDA margins materially beyond our expectations.
"We could raise our ratings on SubCom if the company demonstrates a
track record of debt to EBITDA below 4x, with FOCF to debt above
10%, on a sustained basis and if we believe that the company and
its financial sponsor are committed to maintaining financial
policies that will support this level of leverage."
DARLING INGREDIENTS: Moody's Alters Outlook on Ba2 CFR to Pos.
--------------------------------------------------------------
Moody's Investors Service revised Darling Ingredients Inc.'s rating
outlook to positive from stable. At the same time, Moody's affirmed
Darling's ratings, including its Corporate Family Rating (CFR) at
Ba2, Probability of Default rating at Ba2-PD, Senior Secured Credit
Facilities at Ba1, and the Senior Unsecured Notes at Ba3. The
Company's Speculative Grade Liquidity Rating was upgraded to SGL-1
from SGL-2. Moody's also assigned a Ba1 rating to the extended $1
billion secured revolver expiring in 2025, and withdrew the Ba1
rating on the revolver that was to expire in 2021 because the
company recently amended the facility to extend the revolver
expiration.
The outlook change to positive reflects Darling's focus on reducing
debt and leverage, and the increasing asset value of the company's
Diamond Green Diesel joint venture (DGD) with Valero Energy
Corporation. Moody's expects Darling's financial leverage (Moody's
adjusted incorporating cash distributions from DGD into EBITDA) to
fall below 3.5x in the next 12-18 months, driven primarily by
EBITDA growth in its core business and debt repayment from free
cash flow.
Moody's also expects DGD will continue to become an increasingly
important and significant contributor to Darling's reported
operating income, operating cash flows and deleveraging plans. Cash
distributions from DGD are nevertheless volatile and dependent on
DGD's reinvestment plans, which are currently significant. Darling
is unlikely to receive cash distributions from DGD in 2021, as DGD
will likely reinvest its operating cash flow for the construction
of DGD2 (Diamond Green Diesel's expansion in Norco, Louisiana),
which would expand production capacity by 400 million gallons to
675 million gallons of renewable diesel. However, once DGD2
commences full production in 4Q 2021, Moody's expects Darling to
receive cash distributions from DGD (subject to future investment
intitiatives), which it can utilize to further its debt reduction.
Moody's affirmed the CFR because free cash flow from Darling's core
recycling and rendering businesses remains modest, the reinvestment
plans for DGD will limit cash distributions until DGD2 is
operational, and 3.7x debt-to-EBITDA leverage (LTM June 2020
excluding DGD's earnings) remains elevated.
The upgrade of the speculative grade liquidity rating to SGL-1 from
SGL-2 reflects Moody's projection for modest free cash flow over
the next 12 months and the extension of the revolver maturity. Cash
of $75 million at the end of June and about $940 million of undrawn
capacity on the $1 billion revolver expiring in 2025 provide very
good coverage of cash needs including the minimal $5.3 million of
required annual term loan amortization. Moody's also projects
considerable cushion within maximum 5.5x debt-to-EBITDA and minimum
3.0x EBITDA-to-interest expense covenants.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: Darling Ingredients Inc.
Senior Secured 1st Lien Revolving Credit Facility, Assigned Ba1
(LGD2)
Ratings Upgraded:
Issuer: Darling Ingredients Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Ratings Affirmed:
Issuer: Darling Global Finance B.V.
GTD Senior Unsecured Global Notes, Affirmed Ba3 (LGD5)
Issuer: Darling Ingredients Inc.
Corporate Family Rating, Affirmed Ba2
Probability of Default Rating, Affirmed Ba2-PD
GTD Senior Secured 1st Lien Term Loan B, Affirmed Ba1 (LGD2)
Senior Unsecured Global Notes, Affirmed Ba3 (LGD5)
Withdrawals:
Issuer: Darling Ingredients Inc.
Senior Secured 1st Lien Revolving Credit Facility, Withdrawn,
previously rated Ba1 (LGD2)
Outlook Actions:
Issuer: Darling Ingredients Inc.
Outlook, Changed to Positive from Stable
RATINGS RATIONALE
Darling's Ba2 CFR reflects manageable financial leverage, good
geographic and end market diversity, and use of raw material
pricing formulas to help reduce volatility in the majority of its
businesses. The credit profile also reflects some exposure to raw
material price swings and exogenous raw material supply risk. DGD's
asset value is meaningful, but there is some uncertainty regarding
the cash flow effects on Darling given DGD's high reinvestment
levels and event risk surrounding DGD's ownership structure.
Moody's expects the current DGD ownership positions to remain in
place for at least the next several years, and that DGD's operating
cash flow will continue to expand and increase the distribution
potential to Darling. Moody's also anticipates Darling will remain
focused on reducing leverage through earnings growth and debt
repayment through cash generated from the recycling/rendering
businesses and any cash distributions received from DGD.
Moody's expects the market for renewable diesel to grow, but DGD
has different business risk than Darling's recycling/rendering
businesses including high investment needs for capacity expansion,
volatility related to energy prices, and business economics that
are influenced by regulatory policies. Darling's debt-to-EBITDA of
3.7x for the 12 months ended June (excluding DGD's earnings) would
be lower at approximately 3.0x if Darling's cash distributions from
DGD were included in EBITDA. Moody's projects Darling's
debt-to-EBITDA on this cash distribution basis will be 3.4x in 2021
as Moody's does not expect cash distributions from DGD in 2021.
The Positive outlook reflects the fact that, provided successful
capture of DGD's earnings via distributions and significant debt
repayments, Darling's credit ratings could be upgraded in the next
12-18 months. An upgrade is contingent on the successful growth of
DGD as well as Darling utilizing DGD's distribution income for debt
repayment and does not consider any significant acquisitions.
The rapid spread of the coronavirus outbreak, deteriorating global
economic outlook, low oil prices, and high asset price volatility
have created an unprecedented credit shock across a range of
sectors and regions. Moody's regards the coronavirus outbreak as a
social risk under its ESG framework, given the substantial credit
implications of public health and safety. Volatility can be
expected in 2020 due to uncertain demand characteristics, channel
disruptions, and supply chain disruptions.
Governance factors are meaningful including for good continued
collaboration between Darling and Valero with respect to DGD's
operations, financial decisions and ownership structure. Darling is
targeting reducing debt-to-EBITDA (based on the company's
calculation incorporating the company's proportionate share of
DGD's EBITDA) to less than 2.5x over the long term.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Darling reduces its earnings and
cash flow volatility, and sustains debt to EBITDA below 3.5x
(incorporating cash distributions from DGD in EBITDA).
The ratings could be downgraded if earnings or cash flows decline,
liquidity weakens, there is an increase in the volatility of
earnings and cash flows, or debt to EBITDA is sustained above 4.5x
(incorporating cash distributions from DGD in EBITDA).
The principal methodology used in these ratings was Protein and
Agriculture published in May 2019.
Darling Ingredients Inc., headquartered in Irving Texas, provides
rendering and recycling services to the food industry. The company
processes food waste such as animal by-products, used cooking oil,
and commercial bakery residuals into ingredients used in diverse
applications in the food, pet food, pharmaceutical, feed, fuel and
fertilizer industries. Ingredients include gelatin, tallow, feed
grade fats, meat and bone meal, poultry meal, yellow grease, fuel
feed stocks, natural casings and hides. The company's operations
are primarily located in North America and Europe with a modest
presence in China, South America, and Australia. Darling also owns
a 50% interest in the Diamond Green Energy joint venture with
Valero Energy Corporation. The publicly-traded company generates
annual revenue of about $3.4 billion excluding DGD, and DGD's
revenues for fiscal year ended December 2019 were $1.2 billion.
DCG ACQUISITION: Moody's Alters Outlook on B3 CFR to Negative
-------------------------------------------------------------
Moody's Investors Service affirmed DCG Acquisition Corp.'s (dba
DuBois Chemicals, Inc.) B3 Corporate Family Rating (CFR) and B3-PD
Probability of Default Rating (PDR). Moody's also affirmed DuBois
Chemicals' B2 first lien senior secured credit facility and Caa2
second lien term loan. The outlook is revised to negative from
stable.
"The outlook revision reflects DuBois Chemicals' elevated leverage
due to several acquisitions since being acquired by Altas Partners
in late 2019 and recent underperformance relative to expectations,"
said Domenick R. Fumai, Vice President and lead analyst for DCG
Acquisition Corp.
Affirmations:
Issuer: DCG Acquisition Corp.
Probability of Default Rating, Affirmed B3-PD
Corporate Family Rating, Affirmed B3
Senior Secured 1st Lien Term Loan, Affirmed B2 (LGD3)
Senior Secured 1st Lien Delayed Draw Term Loan, Affirmed B2 (LGD3)
Senior Secured 1st Lien Revolving Credit Facility, Affirmed B2
(LGD3)
Senior Secured 2nd Lien Term Loan, Affirmed Caa2 (to LGD6 from
LGD5)
Outlook Actions:
Issuer: DCG Acquisition Corp.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
The outlook revision to negative reflects increased leverage and
weaker-than-expected financial performance versus initial
expectations. DuBois Chemicals has made four acquisitions since
being acquired by its sponsor, Altas Partners, in September 2019.
As a result, despite equity contributions from Altas Partners,
total gross debt on the balance sheet has increased by
approximately $125 million since year-end and pro forma Moody's
adjusted Debt/EBITDA has risen to 9.0x as of June 30, 2020, from an
estimated 6.7x a year ago. While the recent acquisitions have
caused revenues to grow, organic revenues have declined over 9%
through 1H20 compared to the same period last year. Moody's expects
that DuBois Chemicals will continue to face softness in several of
its end markets such as metalworking and industrial applications.
However, as global economic conditions recover and DuBois Chemicals
begins to realize the additional revenue and incremental EBITDA
contribution from recent acquisitions, financial performance should
gradually improve in 2021. Nonetheless, Moody's does not expect
significant debt reduction and leverage to remain elevated at
approximately 8.3x in FY 2021.
DCG Acquisition Corp.'s B3 rating is constrained by elevated
leverage, an acquisitive growth strategy which has resulted in a
substantial increase in absolute debt and lack of organic revenue
and EBITDA growth versus expectations. DuBois Chemicals' rating is
further tempered by its small scale and significant dependence on
North America for revenue and earnings. Private equity ownership is
another consideration limiting the rating.
The rating is supported by exposure to a wide range of end markets,
extensive product offerings serving a diverse customer base in
niche, middle market applications, and long-term customer and
supplier relationships. DuBois Chemicals' credit profile further
reflects the importance of many of its products to their customers,
which on average represent a small portion of overall costs, and
are typically more resilient to economic downturns.
DuBois Chemicals has good liquidity supported by $50 million of
cash on the balance sheet as of June 30, 2020, and expectations
that the company will continue to have full access to its $90
million revolving credit facility. The credit agreement governing
the revolving credit facility contains only a springing net first
lien leverage covenant when the revolver is drawn more than 35%,
which is not expected to be triggered over the next 12 months.
Debt capital is comprised of a $90 million first lien senior
secured revolving credit facility, $560 million first lien term
($556 million outstanding), $110 million delayed draw term loan and
a $145 million second lien term loan. The B2 rating on the first
lien senior secured credit facilities, one notch above the B3 CFR,
reflects a first lien position on substantially all assets. The
Caa2 rating on the second lien term loan, two notches below the B3
CFR, reflects effective subordination to the larger first lien
credit facilities and limited recovery prospects in a default
scenario.
Moody's could revise the outlook to stable if adjusted Debt/EBITDA
is sustained less than 7.0x, the liquidity profile is maintained,
and the company experiences organic growth.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would consider upgrading the ratings if the company
achieves sustained adjusted financial leverage below 6.5x
(Debt/EBITDA) and retained cash flow-to-debt (RCF/Debt) sustained
above 10%. Moody's would likely consider a downgrade of the ratings
if liquidity remains below $70 million for an extended time, or
free cash flow remains materially negative for a sustained period.
Ratings could also be downgraded if there is a further significant
increase in gross debt as a result of acquisitions or dividend
payment to the sponsor.
ESG CONSIDERATIONS
Moody's also considers environmental, social and governance risks
in the rating. Although there are inherent environmental risks
associated with being a chemical company, DuBois Chemicals'
environmental risk is viewed as low compared to other companies in
the chemical industry. DuBois states that it does not have any
ongoing environmental investigations or remediation at any of its
facilities. Moreover, the Water Treatment Services segment sells
products that minimize water, energy and chemical usage allowing
companies to reach their wastewater discharge requirements and
helps promote sustainability. Governance risk is above-average due
to private equity ownership, which includes a lack of independent
directors on the board, limited financial disclosure requirements
compared to public companies and an aggressive financial policy
that has completed four largely debt-financed acquisitions since
the new owners acquired the company.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
DuBois Chemicals, Inc., headquartered in Sharonville, Ohio,
provides consumable, value-added specialty cleaning chemical
solutions and services for manufacturing industrial processes. The
company's extensive range of products include metalworking fluids,
industrial lubricants, rust inhibitors, water treatment solutions,
food and beverage sanitation, as well as performance improving
chemistries for the paper and pulp industries. The company also
serves the consumer car wash and fleet transportation wash markets.
DuBois Chemicals was acquired by private equity sponsor, Altas
Partners, in September 2019 and generated revenue of $445 million
in FY 2019.
DEAN & DELUCA: Seeks Oct. 30 Plan Exclusivity Extension
-------------------------------------------------------
Dean & DeLuca New York, Inc. and its affiliates request the U.S.
Bankruptcy Court for the Southern District of New York to extend
the exclusive periods during which the Debtors may file a Chapter
11 plan and solicit acceptances for the plan to and including
October 30, 2020.
The Debtors have proposed their Second Modified Proposed Joint
Chapter 11 Plan of Reorganization, which they believe should
provide a distribution to unsecured creditors, other than the Plan
Sponsors in the range of 20%. The Official Committee of Unsecured
Creditors believes the plan will result in a smaller distribution
to such creditors. Funds for the distribution are to be provided by
the Plan Sponsors, which include the Debtors' pre- and
post-petition lender, The Siam Commercial Bank Public Company
Limited, and the Debtors' direct and indirect equity owners, Pace
Development Corporation Public Company Limited, and Pace Food
Retail Co. Limited.
The Committee has filed an objection to the Debtors' Disclosure
Statement, arguing that the Plan is not legally confirmable. In the
Objection, the Committee describes that the Debtors, the Committee,
and the Plan Sponsors have previously contemplated mediation of the
Committee's concerns. The Committee has additionally filed a motion
for entry of an order approving the Committee's own plan
solicitation letter and requiring its inclusion in the voting
solicitation package.
On August 24, 2020, the Debtors requested a referral to mediation
with the Committee and the Plan Sponsors, and extension of certain
related deadlines, noting the relevant parties' agreement to the
relief requested.
The Court granted the motion and scheduled a hearing for September
29, 2020, for approval of the Disclosure Statement and solicitation
procedures and the Plan Letter Motion. The Debtors hope that
additional milestones for the Debtors' plan confirmation process
follow, including among others, a confirmation hearing on or before
October 30, 2020. However, the Debtors' plan exclusivity period
expires on or around September 27, 2020.
The Debtors say they are eager to resolve the Committee's concerns
and confirm a plan that both provides a meaningful distribution to
their creditors and helps the Debtors to emerge from bankruptcy on
a strong footing. The Debtors, their CEO Sorapoj Techakraisri, the
Plan Sponsors, and the Committee now all agree that the best way to
accomplish such goals is to commence mediation as soon as possible,
and extend case deadlines to permit them to focus their efforts on
an out-of-court resolution instead of costly litigation and reach
consensus with their stakeholders on the most important issues in
the Debtors' cases.
* * *
A hearing on the Debtor's extension request was set for September
29. However, the omnibus hearing held on September 29 before the
Honorable Michael E. Wiles, at the United States Bankruptcy Court
for the Southern District of New York, has been continued to
October 2, 2020 at 10:00 a.m. (ET). The Court will also consider
approval of the Disclosure Statement at Friday's hearing.
On August 21, 2020, Lisa Fickenscher, writing for NY Post, reports
that Pace Development, the company that drove Dean & Deluca into
bankruptcy is offering $10 million for another shot at running the
gourmet grocer.
About Pace Development
Pace Development Corporation Public Company Limited is a
Thailand-based real estate developer. The Company is involved in
the development of both commercial and residential real estate. It
operates six principal business segments, namely the property
development segment, which develops and sells condominium units;
the investment segment, which invests in shares of the Company's
group businesses; the hotel segment, which operates hotel business;
the luxury condominium segment, which develops and sells luxury
condominium units; the shopping center segment, which develops and
leases out shopping centers, and the food and beverage segment,
which operates food and beverage retail business.
About Dean & Deluca New York
Dean & DeLuca New York, Inc., is a multi-channel retailer of
premium gourmet and delicatessen food and beverage products under
the Dean & DeLuca brand name. It traces its roots to the opening
of the first Dean & DeLuca store in the Soho district of Manhattan,
New York City by Joel Dean and Giorgio DeLuca in 1977. Affiliate
Dean & DeLuca, Inc. was incorporated in Delaware in 1999.
On Sept. 29, 2014, Pace Development Corporation, through its
wholly-owned subsidiary, Pace Food Retail Co., Ltd., acquired 100%
of the shares of Dean & DeLuca, Inc. from its then shareholders.
Dean & DeLuca New York and six affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
20-10916) on March 31, 2020. At the time of the filing, the
Debtors had estimated assets of between $10 million and $50 million
and liabilities of between $100 million and $500 million.
The Honorable Michael E. Wiles is the presiding judge. The Debtors
tapped Brown Rudnick LLP as their legal counsel, Stretto as claims
and noticing agent, and Saul Ewing Arnstein & Lehr LLP as special
counsel.
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors in Debtors' bankruptcy cases. The committee is
represented by Arent Fox, LLP.
DECO ENTERPRISES: Wins Plan Exclusivity Extension Thru November 30
------------------------------------------------------------------
The Honorable Sheri Bluebond of the U.S. Bankruptcy Court for the
Central District of California, Los Angeles Division, extended the
Debtor's exclusive periods to:
-- file a plan to November 30, 2020, instead of December 21,
2020, as the Debtor requested in its motion, and
-- secure acceptances of the plan to February 22, 2021.
Due to unexpected circumstances and the Covid-19 pandemic, the
Debtor was delayed in obtaining the necessary refinancing of the
real property loan of the guarantor of the Debtor's indebtedness to
its lender, Siena Lending Group, LLC, which has, in turn, delayed
the Debtor's ability to close debtor in possession accounts
receivable and inventory financing loans, and to finance the
purchase of inventory needed to service the orders being placed by
Deco's customers and thus improve Deco's finances. These have
delayed Deco's ability to submit a confirmable plan of
reorganization.
The Debtor's former officer and director, Benjamin Pouladian,
caused the improper recordation of a lis pendens against the real
property that collateralizes the guaranty of the Debtor's debt to
Siena and negatively impacted the Debtor's ability to do the
necessary actions.
On August 20, 2020, a motion to expunge the lis pendens was
granted, despite the effect of Covid-19 that added to the Debtor's
difficulties to obtain a hearing to expunge the lis pendens.
However, Pouladian has threatened to file a writ of mandate that
could delay the recordation of the lis pendens expungement order by
another 45 days or more, resulting to further delay in obtaining
the real property refinancing and to file the plan of
reorganization.
Absent an extension, the Debtor's plan exclusivity period was
slated to end September 21, 2020, and its deadline to solicit
acceptances, November 20, 2020.
About Deco Enterprises
Deco Enterprises, Inc., manufactures lighting fixtures and systems.
Deco Enterprises filed a voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11846) on Feb. 20,
2020. In the petition signed by Babak Sinai, president/chief
executive officer, the Debtor was estimated to have $1 million to
$10 million in assets and $10 million to $50 million in
liabilities. Raymond H. Aver, Esq., at the Law Offices of Raymond
H. Aver, APC, is the Debtor's counsel. The Debtor hired Mousavi &
Lee, LLP as special corporate and litigation counsel. The Honorable
Sheri Bluebond oversees the case.
DENBURY RESOURCES: Emerges from Chapter 11 Bankruptcy
-----------------------------------------------------
Denbury Inc. (NYSE: DEN) on Sept. 18, 2020, announced that it has
successfully completed its financial restructuring and emerged from
Chapter 11. Denbury's common stock is expected to commence trading
on the New York Stock Exchange under the ticker symbol DEN at
market open Monday, September 21, 2020.
Consistent with the previously announced Restructuring Support
Agreement and the Company's "pre-packaged" plan, Denbury has
restructured its balance sheet and eliminated $2.1 billion of bond
debt. Throughout the court-supervised process, Denbury has
continued to operate without interruption while fully satisfying
all trade, customer, employee, royalty owner, working, and other
mineral interest claims in the ordinary course.
Chris Kendall, Denbury's President and CEO, commented, "Today is an
important day for Denbury and all of our stakeholders. Having
quickly and efficiently completed our restructuring process,
Denbury is now a stronger company with the financial flexibility to
continue building on our unique CO2 EOR focused strategy for many
years to come. As a result of this process, we are better
positioned to compete in a dynamic and evolving energy market and
capitalize on the many opportunities ahead, including leveraging
our expertise and our strategic assets into an emerging carbon
capture, use, and storage business. As we move forward, we are
committed to maintaining a strong balance sheet.
"On behalf of all of us at Denbury, I would like to thank our
customers, vendors and other business partners for their unwavering
support over the last several months. I would also like to thank
our creditors for their confidence in Denbury, which enabled us to
quickly and efficiently complete this financial restructuring
process. Finally, I am grateful to our dedicated employees whose
determination and hard work have allowed us to continue performing
at a high level while remaining focused on safe, responsible and
efficient operations."
As disclosed on September 15, 2020, Denbury has changed its
corporate name from Denbury Resources Inc. to Denbury Inc. Further
information regarding the restructuring, including the securities 2
being issued, the Company's exit revolving credit facility,
Denbury's newly appointed directors, and other matters associated
with the restructuring will be provided in a Form 8-K filed Sept.
18, which can be viewed on the Company's website at www.denbury.com
or the Securities and Exchange Commission's ("SEC") website at
www.sec.gov.
About Denbury Resources
Headquartered in Plano, Texas, Denbury Resources Inc. --
http://www.denbury.com/--is an independent oil and natural gas
company with onshore production and development activities in the
Gulf Coast and Rocky Mountains regions. The Company's goal is to
increase the value of its properties through a combination of
exploitation, drilling and proven engineering extraction practices,
with the most significant emphasis relating to carbon dioxide
enhanced oil recovery (CO2 EOR) operations.
Denbury filed a Chapter 11 petition (Bankr. S.D. Tex. Case No.
20-33801) on July 30, 2020. The Hon. David R. Jones oversees the
case.
At the time of filing, the Debtors have $4,607,091,000 Total Assets
as of March 31, 2020 and $3,117,646,000 Total Debts as of March 31,
2020.
The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy
counsel; JACKSON WALKER L.L.P. as local bankruptcy counsel;
EVERCORE GROUP L.L.C. as financial advisor; and ALVAREZ & MARSAL
NORTH AMERICA, LLC as restructuring advisor. EPIQ CORPORATE
RESTRUCTURING, LLC, is the claims agent.
DIMENSION DESIGN: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Dimension Design, Inc.
3400 W. Lake Ave.
Glenview, IL 60026
Business Description: Dimension Design, Inc. --
http://www.dimensiondesign.com-- is an
event & experience agency that delivers
custom environments to support the face-to-
face marketing activities of exhibit houses
& brands and turns visions into reality.
With three US locations, the Company offers
designs, graphics, marketing agencies and
fabrication, on site set up installation and
dismantle and asset maintenance.
Chapter 11 Petition Date: September 30, 2020
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 20-17920
Judge: Hon. Lashonda A. Hunt
Debtor's Counsel: Harold D. Israel, Esq.
LEVENFELD PEARLSTEIN, LLC
2 N. LaSalle St.
Suite 1300
Chicago, IL 60602
Tel: 312-346-8380
Email: hisrael@lplegal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael J. Rogers, president.
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/ABHZ5EA/Dimension_Design_Inc__ilnbke-20-17920__0001.0.pdf?mcid=tGE4TAMA
E.W. SCRIPPS: S&P Places 'B' ICR on Watch Pos. on ION Media Deal
----------------------------------------------------------------
S&P Global Ratings placed its 'B' issuer credit rating on
U.S.-based television broadcaster The E.W. Scripps Co. on
CreditWatch with positive implications.
S&P said, "At the same time, we are placing our issue-level ratings
on the company's existing secured and unsecured debt on CreditWatch
with developing implications. This is because, depending on the
resolution of our CreditWatch on the issuer credit rating and the
proportion of secured and unsecured notes included in the $1.85
billion of proposed financing, we could raise or lower the ratings
by one notch or leave them unchanged."
Scripps' scale, U.S. household reach, and profitability will
improve following the transaction. The company expects to add ION
to its national media segment and anticipates that the purchase
will help broaden the distribution of its Katz multicast networks
and Newsy to ION's national audience. ION has a presence in all of
the top 25 designated market areas (DMAs) and 49 of the top 50 DMAs
and reaches over 100 million households. U.S. Federal
Communications Commission (FCC) regulations allow ION to choose
must-carry status, which allows it to avoid carriage disputes with
its distributors. However, this also precludes it from collecting
more-stable retransmission revenue. Therefore, advertising accounts
for more than 90% of ION's total revenue. The addition of ION will
improve Scripps' profitability because the company has historically
maintained margins of over 50% due to its low content costs and
improving advertising monetization. Scripps has proposed divesting
23 ION stations to ease the path for regulatory approval.
S&P said, "We expect Scripps' pro forma leverage to increase
following the largely debt-financed transaction and remain elevated
in 2020. Our leverage threshold for an upgrade could increase
above the low-5x area depending on our assessment of the combined
business, its ability to generate cash flow, and our expectations
for deleveraging. Prior to the acquisition announcement, we had
forecast that Scripps' leverage might improve to the low-5x area by
the end of 2020 if it used the proceeds from its asset sales to
repay debt and reported strong political advertising revenue in the
back half of the year. With the proposed debt-financed transaction,
we believe the company's pro forma leverage will remain above 6x in
2020. We will also likely treat the proposed preferred stock as
debt in our calculations following our review of the final terms.
ION has consistently generated strong annual free cash flow, which
will not only provide Scripps with significant incremental cash
flow but also help smooth out its cash flow during years without
robust political advertising. We believe that the company may be
able to deleverage quickly following the transaction because of
this cash flow potential.
"In resolving the CreditWatch placement on the issuer credit
rating, we will evaluate the benefits of the combined company's
increased scale and U.S. household reach as well as the degree of
execution risk involved in achieving its expected synergies. We
will also consider the company's ability to materially deleverage
over the 12 months following the close of the transaction by
incorporating ION's higher-margin profile and good cash flow
characteristics. We expect to resolve the CreditWatch in the next
90 days after meeting with the company's management. In addition,
we would need to understand the proportion of secured and unsecured
debt included in the proposed financing to resolve the CreditWatch
placement on the issue-level ratings.
"We could raise our issuer credit rating on Scripps by one notch to
'B+' if we believe the benefits of its increased scale, greater
U.S. household reach, and improved profitability more than offset
its increased exposure to advertising revenue and materially
improve our view of its business profile relative to those of its
industry peers. An upgrade would also depend on our assessment of
Scripps' cash flows and leverage and how quickly it can deleverage
following the transaction. Conversely, we could affirm our 'B'
rating if we conclude that our view of the company's business
relative to that of its peers has not materially improved and we
expect its leverage to remain elevated."
EDWARD DAWSON: Sale of Warden Properties for $3K Each Approved
--------------------------------------------------------------
Judge Frederick P. Corbit of the U.S. Bankruptcy Court for the
Eastern District of Washington authorized Edward A. Dawson and
Marcia A. Meade to sell the following real properties to Amy Gomez
for $3,000 each, cash:
a. Property No. 1: Commonly known as S. Madison Street,
Warden, Washington, legally described as Lots 4 through 7,
inclusive, Block 43, Grand Coulee Addition to Warden, according to
the plat thereof recorded in Volume 2 of Plats, Page(s) 101 and
102, records of Grant County, Washington, Parcel NO. 060990000; and
b. Property No. 2: Commonly known as 8th Avenue W, Warden,
Washington, legally described as Lots 1 through 5, Block 69, Second
Addition to Warden, according to the plat thereof recorded in
Volume 2 of Plat, page 104, records of Grant County, Washington,
Parcel No. 060585000.
The sale is free and clear of liens and interests, including, but
not limited to, the following: Liens, Judgments and Warrants
identified as numbers 6 through 11 on both Exhibit 1 and Exhibit 2.
The Liens will attach to the proceeds of sale.
At closing, the following disbursements will be made:
a. A 10% real estate commission will be paid to realtors Joyce
DeLeon of Gary Mann Real Estate and Susan Wade of Unlock Moses Lake
Real Estate; and
b. General and delinquent real estate taxes shown on Exhibits
1 and 2 attached to the Debtors' Motion.
The time period for creditors to object to the Debtors' Motion and
notice thereof be and the same is shortened to a period equal to 12
days from the date of mailing notice.
A copy of the Exhibits is available at https://tinyurl.com/y6clnhbe
from PacerMonitor.com free of charge.
Edward A. Dawson and Marcia A. Meade sought Chapter 11 protection
(Bankr. E.D. Wash. Case No. 18-01857) on June 29, 2018. The
Debtors tapped Dan ORourke, Esq., at Southwell & ORourke, as
counsel.
ENVIVA PARTNERS: S&P Alters Outlook to Positive, Affirms 'BB-' ICR
------------------------------------------------------------------
S&P Global Ratings revised its outlook on Enviva Partners L.P. to
positive from stable. At the same time, S&P affirmed its 'BB-'
issuer credit rating (ICR) on Enviva and its 'B+' issue-level
rating on the partnership's senior unsecured notes. The recovery
rating is unchanged at '5' and indicates a modest (10%-30%, rounded
estimate: 20%) recovery in the event of default.
Enviva will continue to benefit from the favorable outlook for wood
pellets.
The increasing demand for wood pellets is largely driven by the
growing market in Asia and Europe. Under the Renewable Energy
Directives in Europe and the Strategic Energy Plan in Japan,
biomass power generation has been highlighted as a key strategy in
meeting renewable energy targets and phasing out coal.
Enviva is gaining from this positive trend, in large part due to
its advantageous geographic location in the Southeast U.S. The
partnership benefits from one of the lowest wood fiber costs, as it
is a large buyer of wood with limited uses in an area with
plentiful supply. Therefore, offtakers have access to a
high-quality supply at an overall lower cost, given that the
contracts are structured with pass-through provisions or indexed to
commodity cost. As a result, the partnership has been able to sign
with new counterparties, including Sumitomo Corp.
(BBB+/Stable/A-2), Mitsubishi Corp. (A/Stable/A-1), and Marubeni
Corp. (BBB/Stable/--).
Enviva's scale and diversity will continue to improve as the
partnership signs new contracts.
Enviva's business risk will improve as the new contracts start
contributing more meaningfully to revenues. This is positive from a
scale perspective, as the partnership's EBITDA is still smaller
than that of midstream peers. This is partially offset by Enviva's
leadership position in a unique market.
Furthermore, S&P expects credit quality will improve in terms of
counterparties and higher geographic diversity, given that the
majority of these contracts are signed with high-quality Japanese
offtakers. Therefore, the exposure to Enviva's largest
counterparty, Drax Group Holdings (BB+/Stable/--), will materially
decrease in terms of percentage of revenues.
The contractual structure remains robust, as most of the
partnership's revenues will continue to be generated under
long-term take-or-pay agreements. Including the new contracts
associated with the recently acquired Waycross and Greenwood
plants, the average contract length is now about 12.7 years.
The partnership's credit metrics should remain within expectations,
despite Enviva's large acquisition and development program.
To service these new contracts, Enviva will likely continue its
large acquisition and development program. The partnership's
practice is to acquire fully built and operational plants and
terminals from its sponsor, and occasionally from third parties.
S&P said, "We expect that the partnership will continue to finance
itself in a balanced manner with a significant equity component. As
the new contracts start contributing more meaningfully to revenues,
we expect debt to EBITDA to decline from the forecast 4.5x in 2020
to about 3.6x by 2021."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Environmental benefits
-- Greenhouse gas emissions
S&P said, "The positive outlook reflects our expectation that
Enviva will continue to grow via dropdown acquisitions from its
sponsor, while sustaining debt leverage below 4.0x. We expect the
partnership's leverage to be about 4.5x in 2020, before improving
to 3.6x in 2021-2022 as the dropdown assets contribute more
meaningfully to cash flows. We also expect the partnership to
maintain adequate liquidity, as well as to see continuous
improvement in Enviva's contract profile, as the partnership
continues to diversify and improve in terms of counterparties'
credit quality.
"We could revise the outlook to stable over the next year if
Enviva's leverage metrics increase such that weighted-average debt
to EBITDA is above 4.5x. This could occur if the partnership
modified its financial policy or experienced operational
difficulties. In addition, we could revise the outlook to stable if
Enviva experiences difficulties in acquiring or replacing
counterparties for offtake volume.
"We could raise the rating if Enviva continues to grow and
diversify and improve in terms of counterparties' credit quality,
while sustaining debt leverage below 4.0x."
FORTERRA FINANCE: Moody's Hikes CFR to B1, Outlook Stable
---------------------------------------------------------
Moody's Investors Service upgraded Forterra Finance, LLC's
Corporate Family Rating (CFR) to B1 from B3, Probability of Default
Rating (PDR) to B1-PD from B3-PD and senior secured ratings to B2
from B3. Moody's also upgraded the company's Speculative Grade
Liquidity Rating to SGL-2 from SGL-3. The outlook remains stable.
The rating upgrades reflects Moody's expectation of the continued
strengthening of Forterra's credit profile following the steady
improvement in operating performance, the resolution of the
company's legal dispute with HeidelbergCement AG (Baa3 stable), the
voluntary and material prepayment of outstanding borrowings under
the company's term loan facility from free cash flow, and the
resilient underlying growth drivers of the company's end markets.
The upgrade of the senior secured ratings to B2 from B3, reflects
the junior position of the senior secured debt to the $350 million
ABL facility (not rated), which now represents a significant
portion of the company's remaining capital structure.
The upgrade of the Speculative Grade Liquidity Rating to SGL-2 from
SGL-3 reflects the improvement in the company's liquidity profile.
"In this uncertain economic environment, we expect Forterra to grow
revenue, improve profitability and reduce leverage benefiting from
stable underlying growth drivers and higher operating efficiencies"
said Emile El Nems, a Moody's VP-Senior Analyst.
The following rating actions were taken:
Upgrades:
Issuer: Forterra Finance, LLC:
Corporate Family Rating, Upgraded to B1 from B3
Probability of Default Rating, Upgraded to B1-PD from B3-PD
Senior Secured Bank Credit Facility, Upgraded to B2 (LGD4) from B3
(LGD4)
Senior Secured Notes, Upgraded to B2 (LGD4) from B3 (LGD4)
Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3
Outlook Actions:
Outlook, Remains Stable
RATINGS RATIONALE
Forterra's B1 CFR reflects the company's market position as one of
the largest manufacturers of ductile iron and concrete water pipes
in the country (by revenue) servicing state and local governments,
municipalities, the commercial and residential end markets, its
nationwide footprint, broad customer base and large market
opportunity. Moody's rating is also supported by the company's
commitment to reduce leverage, improve profitability and maintain
good liquidity. At the same time, Moody's credit rating takes into
consideration the company's vulnerability to cyclical end markets,
the competitive nature of the business it operates in and
significant revenue exposure to Texas, Florida, California and
Minnesota. Governance characteristics considered for Forterra,
include willingness to reduce leverage to a modest range of 3.0x to
3.5x over the next few years. At December 31, 2021, Moody's expects
total-debt-to EBITDA to be at 3.9x.
The stable outlook reflects Moody's expectation that during this
uncertain economic environment Forterra will steadily grow its
revenues organically, improve its profitability and generate cash
that can be used to de-lever its balance sheet.
Forterra's SGL-2 Speculative Grade Liquidity Rating reflects
Moody's expectation of a good liquidity profile over the next 12 to
18 months. At June 30, 2020, Forterra had approximately $52 million
in cash balance and $262 million in availability under its undrawn
ABL revolving credit facility that expires in June 2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if:
-- Debt-to-EBITDA is below 4.5x for a sustained period of time
-- EBITA-to-Interest expense is above 4.0x for a sustained period
of time
-- Retained cash flow to net debt is above 15% for a sustained
period of time
-- The company improves its free cash flow and maintains its
liquidity profile
-- The company demonstrates a conservative financial policy and
further diversifies its board representation
The ratings could be downgraded if:
-- Debt-to-EBITDA is above 5.5x for a sustained period of time
-- EBITA-to-Interest expense is below 3.0x for a sustained period
of time
-- Retained cash flow to net debt is below 10% for a sustained
period of time
-- The company's liquidity deteriorates
The principal methodology used in these ratings was Manufacturing
Methodology published in March 2020.
Headquartered in Irving, Texas, Forterra Inc. (the parent) is a
leading manufacturer of water and drainage infrastructure pipe and
products in the United States and Eastern Canada. The company
reports its operating results in two segments: 1) Drainage Pipe &
Products and 2) Water Pipe & Products.
FOX VALLEY PRO: Menominee Nation Arena Exits Chapter 11
-------------------------------------------------------
Chris Mueller of Oshkosh Northwestern reports that the Menominee
Nation Arena has emerged from bankruptcy after more than a year
amid financial struggles compounded by the COVID-19 pandemic.
U.S. Bankruptcy Judge Beth Hanan agreed Sept, 29, 2020, to issue a
final decree, bringing an end to the Chapter 11 bankruptcy case
involving the financially troubled arena, which hosts the Wisconsin
Herd, a G-League affiliate of the Milwaukee Bucks, along with
concerts, entertainment and a variety of other events.
Fox Valley Pro Basketball Inc., which owns and operates the Oshkosh
arena, initially asked Hanan to administratively close the case
without removing its legal obligation to repay its debts, but Hanan
suggested a final decree and found the organization's restructuring
plan had been "substantially consummated," court documents say.
The closure of the case should help Fox Valley Pro Basketball avoid
"additional and unnecessary fees," and give it the opportunity to
participate in the Paycheck Protection Program, which was created
by the federal government in response to the pandemic to provide
low-interest, forgivable loans to small businesses — but is "only
available to applicants that are not associated with a bankruptcy,"
court documents say.
In late August, Hanan approved Fox Valley Pro Basketball's
restructuring plan, a critical step in moving forward after years
spent dealing with financial uncertainty and prolonged legal
struggles.
Fox Valley Pro Basketball agreed to enter mediation in June with
Bayland Buildings, a creditor in the case, to settle a dispute over
a previous version of the restructuring plan. Bayland Buildings
previously sued seeking $13 million in unpaid construction costs.
The Wisconsin Herd, the Milwaukee Bucks G-League affiliate, also
had concerns about a previous version of the plan, noting a
"tangible risk" it would end its lease agreement with the arena
over unpaid revenue from ticket sales, concessions, parking fees
and advertisements in the arena.
But the court documents filed earlier this month indicate Fox
Valley Pro Basketball has reached agreements with both the Herd and
the city of Oshkosh and expected to close on exit financing last
week.
"There are no outstanding issues that would preclude the
administrative closure of this case," the court documents say.
About Fox Valley Pro Basketball
Fox Valley Pro Basketball, Inc., is the owner of the Menominee
Nation Arena in Oshkosh, Wis. The arena serves as the home of the
Wisconsin Herd of the NBA G League and the Wisconsin Glow women's
basketball team.
Fox Valley Pro Basketball sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Wis. Case No. 19-28025) on Aug. 19,
2019. At the time of the filing, the Debtor was estimated to have
assets of between $10 million and $50 million and liabilities of
the same range. The case is assigned to Judge Brett H. Ludwig.
Kerkman & Dunn is the Debtor's counsel.
FREEDOM MORTGAGE: S&P Alters Outlook to Stable, Affirms 'B-' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Freedom Mortgage Corp. to
stable from negative. S&P affirmed its 'B-' long-term issuer credit
rating and its 'B-' rating on the company's senior unsecured
notes.
S&P said, "Our outlook revision to stable follows
stronger-than-expected earnings, higher liquidity from the current
refinancing boom, and lower-than-expected forbearance requests. The
current favorable origination environment has led to $48.8 billion
of mortgage originations in the first six months of 2020, an
increase of 92.6% over the first six months of 2019. Combined with
expanding gain on sale margins due to industrywide capacity
restraints, Freedom's origination revenues increased by 719% during
the first six months of 2020, compared with the same period last
year. We expect this trend to continue through 2020 as the company
continues to refinance existing loans in its mortgage servicing
rights (MSR) portfolio which benefit from lower mortgage rates."
Forbearance levels have been lower than we expected, with about 11%
of Federal Housing Administration/Veterans Affairs loans and 5% of
government-sponsored enterprises loans in forbearance as of Aug.
21, 2020. Freedom also amended its Ginnie Mae MSR facility in July
to allow it to include servicing advances as collateral, though the
company has not had to use this new funding capacity yet.
While Freedom has experienced unfavorable mark-to-market
adjustments on its MSRs in the first half of 2020 due to the
lower-rate environment, the company has been able to recapture and
add unpaid principal balance (UPB) to its servicing portfolio,
maintaining debt to tangible equity at or below 1.5x. Freedom
serviced $233.5 billion of UPB as of June 30, 2020, compared with
$221.7 billion at year-end 2019, and debt to tangible equity as of
June 30, 2020 was about 1.5x.
The acquisition of RoundPoint Mortgage Servicing Corp. in August
also added more MSRs to Freedom's portfolio, bringing UPB close to
$300 billion. S&P said, "We view the acquisition favorably because
revenue from servicing assets is more consistent than the volatile
origination channel. Over the next one to two years, we expect the
strong earnings from originations to subside, especially if
interest rates rise and fewer borrowers benefit from refinancing,
often referred to as "refi-burnout."
S&P said, "The stable outlook reflects our expectation that over
the next 12 months, Freedom will operate with debt to tangible
equity at or below 1.5x and EBITDA interest coverage well above 2x.
Although debt to EBITDA is currently below 2x, we believe it will
likely normalize above 5.0x when origination volumes return to
historical levels. The stable outlook also reflects our expectation
that Freedom will continue to organically build its servicing book
and maintain sufficient liquidity for forbearance requests.
"We could lower the ratings over the next 12 months if Freedom
faces unexpected liquidity challenges, if leverage stretches beyond
our base-case expectations, or if the company encounters additional
regulatory actions or scrutiny. We could also lower the ratings if
EBITDA interest coverage nears 1x.
"Over time, we could raise the ratings if we expect Freedom to
maintain debt to EBITDA below 5x and debt to tangible equity
comfortably below 1.5x in a more normal mortgage environment where
interest rates are higher and purchase volume as a percentage of
total volume is closer to historical levels."
FRONTIER COMMUNICATIONS: S&P Assigns Prelim B- ICR, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings assigned a preliminary 'B-' issuer credit rating
on U.S.-based telecommunications provider Frontier Communications
Corp.
S&P said, "We are also assigning a preliminary 'B+' issue-level
rating and '1' recovery rating to the new senior secured exit
facilities, which will consist of a $625 million superpriority
debtor-in-possession (DIP)-to-exit revolving credit facility, $500
million superpriority DIP-to-exit term loan B, $1.15 billion of
superpriority DIP-to-exit first-lien notes, and the existing $1.7
billion senior secured term loan B. The '1' recovery rating
indicates our expectation for very high (90%-100%; rounded
estimate: 95%) recovery in the event of payment default.
"At the same time, we are assigning a preliminary 'B-' issue-level
rating and '4' recovery rating to the existing $1.6 billion
second-lien notes. The '4' recovery rating indicates our
expectation for average (30%-50%; rounded estimate: 35%) recovery
in the event of payment default.
"We are also assigning a preliminary 'CCC+' issue-level rating and
'5' recovery rating to the $750 million of takeback notes (which
will be secured on junior-lien basis or unsecured pursuant to the
Plan of Reorganization). The '5' recovery rating indicates our
expectation for modest (10%-30%; rounded estimate: 10%) recovery in
the event of payment default.
"We assume Frontier will emerge in early 2021 under the terms of
its Plan of Reorganization, which lenders agreed to and the
Bankruptcy Court approved in August. Frontier received court
approval for its Plan of Reorganization and DIP-to-exit financing
in August and September 2020, respectively. The company expects to
emerge from bankruptcy in early 2021 following the receipt of
remaining state regulatory approvals. Given our understanding that
the company is poised to exit Chapter 11 under its court-confirmed
plan of reorganization once requisite regulatory approvals have
been obtained, we are in a position to assign preliminary ratings
reflective of our current view of the company's post-bankruptcy
credit profile assuming emergence from Chapter 11 in the early
2021. However, if the terms on which the company emerges are
materially different from our assumptions, we reserve the right to
withdraw or amend our ratings on Frontier. Moreover, our
preliminary ratings are subject to ongoing surveillance to the same
extent as other types of credit ratings."
Frontier faces sharp revenue declines over the next couple of
years, and its prospects to reverse these trends depend on
successful execution of a fiber upgrade plan. Compared to
wireline peers, a larger proportion of Frontier's majority
copper-based network is only capable of providing lower speeds of
50 megabits (Mbps) per second or less. While its fiber-to-the-home
(FTTH) coverage of 21% compares favorably to some wireline peers,
its significant exposure to legacy copper infrastructure suggests
the company will continue to lose broadband subscribers at a high
rate over the next couple of years. Frontier faces intense
competition for broadband service in its markets from incumbent
cable operators, which, combined with competing fiber providers,
overlap with about 90% of the company's footprint. Cable providers
have upgraded their networks to DOCIS 3.1 and are able to offer
download speeds of 1 gigabit per second (Gbps). Frontier is able to
match those speeds in just one-fifth of its footprint. It plans to
pass around 60,000 additional homes with fiber this year, with a
longer term opportunity to pass 2.5 million to 9 million additional
homes with fiber over the next 10 years. S&P believes the
deployment of fiber provides opportunities for Frontier to improve
the attractiveness of its offerings and grow its broadband market
share. However, reversing its weak financial performance will take
time and there is the potential for execution missteps along the
way.
S&P said, "Underinvestment has plagued the wireline industry, but
we expect Frontier to prioritize network upgrades, which would
enable it to compete more effectively with cable broadband. Our
base-case forecast assumes that following its emergence from
bankruptcy, Frontier will adopt a strategy similar to wireline
peers such as Windstream and Consolidated and allocate the majority
of its cash flow to investments in FTTH. Windstream and
Consolidated have separately outlined plans to ramp-up investment
in fiber, with each increasing capital spending to 20%-25% of total
revenue beginning in 2021. While Frontier's investment plan has not
been formally approved by its new Board (although it is supported
by the existing Board), based on company public disclosures, we
expect it to similarly raise its spending over the next few years.
At the lower end of the range, we believe Frontier could pass
around 3 million more homes with fiber, resulting in coverage of
over 40% over the next 10 years. This compares to Windstream's plan
to pass 1.7 million additional homes with fiber (or fixed wireless
technology) by 2026 (40% coverage) and Consolidated's plan to make
fiber available to an additional 1 million homes by 2025 (60%
coverage). Despite the near-term pressure on cash flow caused by
its declining revenue base and increased investment, we believe
Frontier needs to invest now in order to compete longer term. We
believe this positions the company to grow its broadband market
share and reverse top line and EBITDA declines."
In addition to deploying FTTH in certain markets, the company's
turnaround initiatives include improving product gross margins,
reducing customer churn, and lowering fixed costs. Frontier may
also consider asset divestitures of markets it views as
nonstrategic in support of higher investment in strategic areas.
Despite the reduction in debt as the company emerges from
bankruptcy, leverage remains elevated. Frontier's reorganization
includes the elimination of about $11 billion of debt relative to
pre-bankruptcy levels. While the company's adjusted leverage is
substantially lower, in the mid-3x area upon emergence from about
6x when it entered bankruptcy earlier this year, it is still
elevated given the ongoing declines of its voice, video, and
copper-based broadband revenue, in our view. Furthermore, S&P
believes the company will be challenged to reduce leverage over the
next couple of years because of earnings declines and negative
FOCF.
S&P said, "If Frontier successfully grows its consumer broadband
subscriber base while improving its operating efficiency, we
believe the company could reverse top-line and EBITDA declines,
enabling it to reduce leverage over time, although we currently do
not incorporate this in our base-case forecast.
"The stable outlook reflects our view that although weak economic
conditions and secular industry declines should contribute to lower
earnings over the next couple of years, adjusted leverage will be
supportive of the expected rating, at around 4x in the 12 months
following Frontier's emergence.
"We could lower the ratings if aggressive competition or execution
missteps constrain Frontier's ability to improve its operating
trends, such that EBITDA declines persist, FOCF is weaker than we
expect, and leverage rises over time with narrow prospects for
improvement, leading us to assess the capital structure as
unsustainable. We could also lower the rating if we believe the
company will face a near-term liquidity crunch.
"Over the longer term, we could raise our ratings on Frontier if it
profitably captures broadband share in its markets while growing
EBITDA and improving FOCF." An upgrade would require Frontier to
improve FOCF to debt to above 5% and sustain leverage below 4x.
This could occur longer term if the company increases its network
investments and successfully executes its fiber expansion strategy
while improving operational efficiency.
GALAXY NEXT: Incurs $14 Million Net Loss in Fiscal 2020
-------------------------------------------------------
Galaxy Next Generation, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$14.03 million on $2.32 million of total revenues for the year
ended June 30, 2020, compared to a net loss of $6.66 million on
$1.88 million of total revenues for the year ended June 30, 2019.
As of June 30, 2020, the Company had $4.50 million in total assets,
$12.24 million in total liabilities, and a total stockholders'
deficit of $7.74 million.
Somerset CPAs PC, in Indianapolis, Indiana, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated Sept. 28, 2020, citing that the Company has sufferred
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
Business Has Been Impacted By The Covid-19 Pandemic
The Company stated, "With the global spread of the ongoing novel
coronavirus ("COVID-19") pandemic in 2020, we have implemented
business continuity plans designed to address and mitigate the
impact of the COVID-19 pandemic on our employees and business.
While our sales have not declined and in fact have increased
significantly during the fourth quarter and subsequent thereto in
part as a result of the COVID-19 pandemic, as school systems have
sought to operate remotely during this pandemic, we have
experienced supply chain delays, including delays in shipments from
China. In addition, we could experience payment delays from
customers if they are negatively impacted by the pandemic. The
business of our suppliers and other commercial partners, our
corporate development objectives and the value of and market for
our common stock, will depend on future developments that are
highly uncertain and cannot be predicted with confidence at this
time, such as the ultimate duration of the pandemic, travel
restrictions, quarantines, social distancing and business closure
requirements in the United States and other countries, and the
effectiveness of actions taken globally to contain and treat the
disease. The global economic slowdown and the other risks and
uncertainties associated with the pandemic could have a material
adverse effect on our business, financial condition, results of
operations and growth prospects. In addition, to the extent the
ongoing COVID-19 pandemic adversely affects our business and
results of operations, it may also have the effect of heightening
many of the other risks and uncertainties which we face."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1127993/000109181820000204/gaxy09252020form10k.htm
About Galaxy Next Generation
Headquartered in Toccoa, Georgia, Galaxy Next Generation, Inc. --
http://www.galaxynext.us/-- is a manufacturer and distributor of
interactive learning technologies and enhanced audio solutions. It
develops both hardware and software that allows the presenter and
participant to engage in a fully collaborative instructional
environment.
GARRETT MOTION: Junior Creditors Mulling Rival Proposal
-------------------------------------------------------
Katherine Doherty of Bloomberg News reports that the junior
creditors to auto-parts maker Garrett Motion Inc. are preparing a
rival proposal to provide the bankrupt company with financing for
its restructuring, according to people with knowledge of the
matter.
The group of bondholders organized and is in the process of hiring
investment bank Moelis & Co. to represent them in the case and
submit an offer for a debtor-in-possession loan, the people said,
asking not to be identified discussing a private matter. The group
is getting legal advice from Ropes & Gray, Bloomberg previously
reported.
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.
GARRETT MOTION: Wants to Move Honeywell Case to Bankruptcy Court
----------------------------------------------------------------
Steven Church of Bloomberg News reports that Garrett Motion Inc.
asked a federal court in a filing to let the judge overseeing the
bankruptcy case of the auto-parts maker also take charge of a
nine-month-old lawsuit against former parent Honeywell
International Inc.
The suit accuses Honeywell of dumping tens of thousands of
asbestos-related health claims onto Garrett as part of a 2018
spinoff.
In that transaction, Honeywell required Garrett to borrow $1.6
billion that was used to pay Honeywell a cash distribution,
according to court documents; the deal also required Garrett to
take on 90% of Honeywell's legacy asbestos liability and pay $5.25
billion over 30 years.
About Garrett Motion Inc.
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.
GDS TRANSPORT: Oct. 1 Hearing on Sale of 32 Crusader Buses
----------------------------------------------------------
Judge Mark Mullin of the U.S. Bankruptcy Court for the Northern
District of Texas will convene an expedited hearing on Oct. 1, 2020
at 1:30 p.m. (CT) to consider GDS Transport, LLC's sale of 32 2019
Ford E-350 Champion Crusader Buses.
About GDS Transport, LLC
GDS Transport -- https://logisticorpgroup.com -- is part of
Logisticorp Group -- a full-service logistics, transportation,
supply chain and fleet services company servicing customers
globally. It serves as an end-to-end deployment partner delivering
core supply chain services and warehouse management services.
GDS Transport, LLC, filed its voluntary petition under Chapter 11
of the Bankruptcy Court (Bankr. N.D. Tex. Case No. 20-41765) on May
15, 2020. In the petition signed by Thomas Thacker, president, the
Debtor estimated $4,685,801 in assets and $3,837,395 in
liabilities. Corey W. Haugland, Esq. at James & Haughland P.C.,
represents the Debtor.
GEORGIA DIRECT: $275K Sale of MS' Richmond Property to KT Approved
------------------------------------------------------------------
Judge Robyn L. Moberly of the U.S. Bankruptcy Court for the Sothern
District of Indiana authorized the private sale by Georgia Direct
Carpet, Inc., Georgia Direct West, LLC and M3 Holdings, LLC of M3's
parcel of real estate commonly known as 406 Commerce Road,
Richmond, Indiana, to KT Property Group, LLC, for $275,000,
pursuant to the terms of the Purchase Agreement.
The Payment will be made directly to West End Bank, S.B.
The Real Estate is not subject to any claims, liens, or
encumbrances.
The Debtors will file a Report of Sale within 14 days that the
private sale takes place pursuant to Local Bankruptcy Rule
6004-2(e).
About Georgia Direct Carpet
Georgia Direct Carpet, Inc., also known as Georgia Carpet Direct,
owns and operates a carpet and flooring store in Richmond, Ind. It
offers carpets, hardwoods, laminate flooring and ceramic tile floor
products.
Georgia Direct Carpet and its affiliates sought Chapter 11
protection (Bankr. S.D. Ind. Lead Case No. 19-06316) on Aug. 26,
2019. In the petition signed by Anthony Bledsoe, president,
Georgia Direct Carpet estimated assets and liabilities at $1
million to $10
million. The Hon. Robyn L. Moberly is the case judge.
The Debtors tapped Mattingly Burke Cohen & Biederman LLP as their
legal counsel; Mattingly Burke Cohen & Biederman LLP, as special
counsel; and Barron Business Consulting, Inc. as their financial
advisor.
The Office of the U.S. Trustee appointed creditors to serve on the
official committee of unsecured creditors on Oct. 9, 2019. The
committee is represented by Mercho Caughey.
GEORGIA DIRECT: $612K Sale of MS' Richmond Property to KT Approved
------------------------------------------------------------------
Judge Robyn L. Moberly of the U.S. Bankruptcy Court for the Sothern
District of Indiana authorized the private sale by Georgia Direct
Carpet, Inc., Georgia Direct West, LLC and M3 Holdings, LLC of M3's
parcel of real estate commonly known as 5200 National Road East,
Richmond, Indiana, to KT Property Group, LLC for $612,000, pursuant
to the terms of the Purchase Agreement.
The Payment will be made directly to West End Bank, S.B.
The Real Estate is not subject to any claims, liens, or
encumbrances.
The Debtors will file a Report of Sale within 14 days that the
private sale takes place pursuant to Local Bankruptcy Rule
6004-2(e).
About Georgia Direct Carpet
Georgia Direct Carpet, Inc., also known as Georgia Carpet Direct,
owns and operates a carpet and flooring store in Richmond, Ind. It
offers carpets, hardwoods, laminate flooring and ceramic tile floor
products.
Georgia Direct Carpet and its affiliates sought Chapter 11
protection (Bankr. S.D. Ind. Lead Case No. 19-06316) on Aug. 26,
2019. In the petition signed by Anthony Bledsoe, president, Georgia
Direct Carpet estimated assets and liabilities at $1 million to
$10
million. The Hon. Robyn L. Moberly is the case judge.
The Debtors tapped Mattingly Burke Cohen & Biederman LLP as their
legal counsel; Mattingly Burke Cohen & Biederman LLP, as special
counsel; and Barron Business Consulting, Inc. as their financial
advisor.
The Office of the U.S. Trustee appointed creditors to serve on the
official committee of unsecured creditors on Oct. 9, 2019. The
committee is represented by Mercho Caughey.
GNC HOLDINGS: Closes Permanently Santa Monica Location
------------------------------------------------------
Annie Wei of Canyon News reports that the GNC store at Santa Monica
Blvd in West Hollywood will permanently close. Everything in the
store is now on sale for 50% to 70% off.
A staff member who wishes to remain nameless told Canyon News that
he was not sure about whether the decision of closing the store was
due to the financial impact of the COVID-19 pandemic, saying
customers and staff didn't talk about that.
"Our business has been under financial pressure for the past
several years as we have worked to pay down debt and reposition GNC
to be more competitive in a challenging operating environment," GNC
stated on June 23. "The COVID-19 pandemic created a situation where
we were unable to accomplish our refinancing and the abrupt change
in the operating environment had a dramatic negative impact on our
business."
GNC, the 85-year-old vitamin and health supplement chain company,
filed for Chapter 11 bankruptcy on June 24 and later closed several
stores across the United States.
On September 10, 2020, the U.S. Senator Marco Rubio sent a letter
to U.S. Treasury Secretary Steven Mnuchin to express his concern
over the national security after China-based Harbin Pharmaceutical
Group Co. attempted to buy GNC.
"The acquisition of a major health and nutrition chain with over
5,200 retail stores in the United States and an expansive customer
base presents the opportunity for state-directed actors to purchase
this information legally," said Rubio.
He added, "efforts to obtain personal and sensitive data related to
health information and financial transactions of U.S. persons must
be reviewed with an understanding of the malign foreign policy and
intelligence aims of the Chinese government and Communist Party."
As no other qualified bids for GNC were submitted by September 11,
a bankruptcy court judge approved the sale of GNC Holdings . to
Harbin Pharmaceutical Group Co. for $770 million.
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.
HAWAIIAN HOLDINGS: Signs $420M Loan Agreement with Treasury
-----------------------------------------------------------
Hawaiian Airlines, Inc., a wholly owned subsidiary of Hawaiian
Holdings, Inc., entered into a Loan and Guarantee Agreement, dated
as of Sept. 25, 2020, among Hawaiian, as the borrower, Holdings,
the guarantors party thereto from time to time, the United States
Department of the Treasury, as lender, and the Bank of New York
Mellon, as administrative agent and collateral agent. The Loan
Agreement provides for a secured term loan facility which permits
Hawaiian to borrow up to $420 million.
On the Closing Date, Hawaiian borrowed $45 million and may, at its
option, borrow additional amounts in up to two subsequent
borrowings until March 26, 2021 so long as, after giving effect to
any further borrowing, the collateral coverage ratio is no less
than 2.0 to 1.0. The proceeds from the Facility will be used for
certain general corporate purposes and operating expenses in
accordance with the terms and conditions of the Loan Agreement. As
a condition to the drawing under the Facility, the Company is
required to comply with all applicable provisions of the
Coronavirus Aid, Relief and Economic Security Act of 2020. Based on
the appraisal submitted by Hawaiian in connection with the
execution of the Loan Agreement, the appraised value of the
Collateral is presently in excess of the 2.0 to 1.0 collateral
coverage ratio necessary to access the undrawn amount currently
available under the Facility.
About Hawaiian Holdings
Hawaiian Holdings, Inc.'s primary asset is sole ownership of all
issued and outstanding shares of common stock of Hawaiian Airlines,
Inc. The Company is engaged in the scheduled air transportation of
passengers and cargo amongst the Hawaiian Islands (the Neighbor
Island routes) and between the Hawaiian Islands and certain cities
in the United States (the North America routes together with the
Neighbor Island routes, the Domestic routes), and between the
Hawaiian Islands and the South Pacific, Australia, New Zealand and
Asia (the International routes), collectively referred to as its
Scheduled Operations. The Company offers non-stop service to
Hawai'i from more U.S. gateway cities (13) than any other airline,
and also provide approximately 170 daily flights between the
Hawaiian Islands. In addition, the Company operates various
charter flights.
As of June 30, 2020, the Company had $3.99 billion in total assets,
$1.04 billion in current liabilities, $792.77 million in long-term
debt, $1.34 billion in total other liabilities and deferred
credits, and total shareholders' equity of $825.93 million.
* * *
As reported by the TCR on July 17, 2020, S&P Global Ratings lowered
all ratings on Hawaiian Holdings Inc., including lowering the
issuer credit rating to 'CCC+' from 'B', and removed them from
CreditWatch, where it placed them with negative implications on
March 13, 2020. S&P expects Hawaiian to generate a significant
cash flow deficit in 2020 because of COVID-19's impact on air
travel.
HERMITAGE OFFSHORE: Oct. 7 Auction of All Assets Set
----------------------------------------------------
Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern
District of New York authorized the bidding procedures proposed by
Hermitage Offshore Services Ltd. and affiliates in connection with
the auction sale of substantially all of their vessels and related
assets.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 1, 2020 at 4:00 p.m. (ET)
b. Initial Bid: A cash or credit bid value to the Debtors'
estate of not less than $5 million for each PSV included in the
Bid, and not less than $350,000 for each Crew Boat included in the
Bid
c. Deposit: 10% of the Purchase Price of the Bid
d. Auction: The Auction, if any, will take place at 10:00 a.m.
(ET) on Oct. 7, 2020, at the offices of Proskauer Rose LLP, Eleven
Times Square, New York, New York 10036, or at such other venue (or
by such other medium) as may be agreed to by the Debtors and the
Consultation Parties, or such later date and time as selected by
the Debtors after consultation with the Consultation Parties.
e. Bid Increments: Not less than $100,000 for each PSV
included in the Bid, and not less than $25,000 for each Crew Boat
f. Sale Hearing: Oct. 13, 2020 at 10:00 a.m. (ET)
g. Sale Objection Deadline: Oct. 12, 2020 at 9:00 a.m. (ET)
h. Closing: Oct. 27, 2020
i. The Lenders and any other Qualified Bidder that has a valid
and perfected lien on any Assets will have the right to credit bid
all or a portion of such Secured Creditor's secured claims.
The form of Sale Notice is approved. Within two business days
after the entry of the Order, the Debtors will serve the Order,
Bidding Procedures, and Sale Notice upon the entities on the Master
Service List, the Sale Notice Parties,3 and any party that has
requested notice.
On the date of the conclusion of the Auction or, if no Auction is
held, on Oct. 7, 2020 (or as soon as reasonably practicable
thereafter), the Debtors will file with the Court and serve on the
Sale Notice Parties, and cause to be published on the Noticing
Agent's website, the Notice of Successful Bid.
The form of the Cure Notice is approved. On Sept. 26, 2020, the
Debtors will file with the Court and serve the Cure Notice on all
Contract Counterparties, and post the Cure Notice to the Case
Website (https://cases.primeclerk.com/hermitage). The Cure
Objection Deadline is Oct. 5, 2020 at 4:00 p.m. (ET).
Notwithstanding the possible applicability of Bankruptcy Rules
6004(h), 6006(d), 7062, or 9014, or any applicable provisions of
the Bankruptcy Rules or the Local Rules or otherwise stating the
contrary, the terms and conditions of the Order are immediately
effective and enforceable upon its entry, and any applicable stay
of the effectiveness and enforceability of the Order is waived.
A copy of the Bidding Procedures is available at
https://tinyurl.com/y3s56uo8 from PacerMonitor.com free of charge.
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 GLOBAL: Backs New $400M ABS Deal to Restock Vehicle Fleet
---------------------------------------------------------------
Peg Brickley of Wall Street Journal reports that Hertz Global
Holdings Inc. is backing a new effort to raise $400 million that
would allow it to keep its rental car fleet stocked with new
vehicles for a return to business once the coronavirus pandemic
eases.
The new securitization deal between Donlen Corp., which supplies
Hertz with cars, and Barclays Bank PLC is separate from Hertz's
search for chapter 11 financing in the form of a $1.5 billion loan
that will preserve the company until business returns to normal
levels.
Multiple lenders are offering to provide the bankruptcy loan, Hertz
lawyer Thomas Lauria of White & Case LLP told The Wall Street
Journal Wednesday, September 23, 2020. Some potential financiers
already have money riding on Hertz, but others don't, and there are
offers from potential backers willing to settle all the company's
debts, as part of the bankruptcy financing.
The proposed $400 million asset-backed securitization deal might
reduce Hertz's need to draw down on a bankruptcy loan, but it won't
reduce the size of the chapter 11 financing, Mr. Lauria said.
"We need all the cushion we can get," he said.
Over the next week to 10 days, Estero, Fla.-based Hertz will choose
one or two leading contenders from the financing competition, and
prepare a chapter 11 loan package for the approval of the U.S.
Bankruptcy Court in Wilmington, Del.
Hertz is trimming its existing fleet in a deal that allows it to
sell older cars, potentially chopping billions of dollars out of
its debt load.
The company also wants to welcome customers back with new vehicles
without adding to its debt.
"This is part of a grand plan to, through multiple strategies,
ultimately reduce the liquidity requirements of Hertz on a
go-forward basis," Mr. Lauria said.
The money being raised is coming through Donlen, a Bannockburn,
Ill.-based commercial auto fleet leasing and management company
that is an integral part of Hertz's complex financing
arrangements.
Hertz would get the benefit of a new asset-backed securitization
facility to finance new additions to the fleet of cars it offers
rental customers, guaranteeing Donlen's performance under the
deal.
In court papers, Hertz's lawyers said the new ABS financing is the
best option for finding the money Donlen needs.
Bankruptcy cut off access to new money through existing securitized
vehicles, triggering provisions that protect investors in those
deals. Since filing for bankruptcy, Hertz has been lending its own
cash to Donlen to buy new cars, $173 million to date, straining
Hertz's liquidity.
Donlen would use some of the new money to pay off what it owes
Hertz under the proposed ABS arrangement.
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
HOSANNA BUILDING: Case Summary & 20 Largest Unsecured Cr
--------------------------------------------------------
Debtor: Hosanna Building Contractors, Inc.
278 Semoran Commerce Place
Apopka, FL 32703
Business Description: Hosanna Building Contractors, Inc. --
https://www.hosannabc.com -- is a full-
service contractor providing service to
commercial and residential clients in
Florida and Georgia. It offers repairs,
remodeling, insurance restorations, and new
construction services.
Chapter 11 Petition Date: September 29, 2020
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 20-05457
Debtor's Counsel: Aldo G. Bartolone, Esq.
BARTOLONE LAW, PLLC
1030 N. Orange Avenue
Suite 300
Orlando, FL 32801
Tel: (407) 294-4440
E-mail: aldo@bartolonelaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jane Blankenship, chief executive
officer.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/4UKWPAQ/Hosanna_Building_Contractors_Inc__flmbke-20-05457__0001.0.pdf?mcid=tGE4TAMA
IMPRESA HOLDINGS: Files Chapter 11 Due to COVID-19 & 737 Max
------------------------------------------------------------
Vince Sullivan of Law360 reports that Impresa Holdings Acquisition
Corp., a California company that makes metal parts for the
aerospace industry hit Chapter 11 bankruptcy, blaming the COVID-19
pandemic's impact on travel and the grounding of hundreds of planes
made by Boeing for its financial problems.
Impresa Holdings said in its initial filings that when
international aviation regulators grounded Boeing's 737 Max fleet
and the airplane maker subsequently cut back production on the
plane, its largest source of revenue was eliminated. Coupled with
further damage done to the aviation industry by COVID-19 travel
restrictions, the debtor lost millions in revenue.
"As a result of the pandemic, the debtors' customers began to
schedule out deliveries of parts on orders for which the debtors
have already made cash investments to procure materials and labor,"
Impresa CEO Steven F. Loye said in a first-day declaration. "With
the entire industry facing challenges from COVID-19, it became
increasingly difficult for the debtors to conduct normal business
operations."
The company operates under supply contracts with aviation
companies, with Boeing being its largest customer. A year ago,
Boeing was making more than 50 737 Max airplanes per month, but
after deadly crashes in October 2018 and March 2019 killed more
than 300 passengers and crew members, the fleet was grounded and
Boeing eventually cut back its production plan significantly, Loye
said in the declaration.
Production on the plane stopped completely in January 2020 and
challenged Impresa's cash flow, as it had already made significant
investment in its production lines for the 737 Max parts, according
to the declaration. Production of the plane has resumed at a
smaller scale, but it's now subject to an intensive certification
process by the Federal Aviation Administration before it can be
returned to flight status, Loye said.
These global events have left the debtor holding the bag for $10
million worth of materials it no longer needs or has the ability to
pay for, he said.
In response to these financial challenges, Impresa slashed about
30% of its workforce and obtained $2.1 million in Paycheck
Protection Program loans from the Small Business Administration.
These and other efforts stabilized the company's cash flow, Loye
said, but Impresa was still left with legacy debt obligations to
737 Max suppliers it had no way to pay.
Impresa was left with no other option but to pursue a Chapter 11
filing and a going-concern sale of its assets and operations, with
equity owner Twin Haven Special Opportunities Fund IV LP serving as
a stalking horse bidder with a $10 million offer, Loye said. The
debtor anticipates closing on a sale by mid-December if court
approvals for bidding procedures are obtained.
The company comes to court with about $23 million of secured debt
owed to Twin Haven arising from a pair of note issues. In 2019,
Loye said the company had $43 million in revenue.
A first-day hearing on initial motions for relief, including a
request to use Twin Haven's cash collateral to fund its operations,
was set Sept, 25 before U.S. Bankruptcy Judge Brendan L. Shannon.
About Impresa Holdings
Impresa Holdings designs, manufactures, and supplies precision
sheet metal parts, CNC-machined components, and assemblies for
commercial jets, regional and business aircraft, military aircraft,
and civil/military helicopters. The company's services include
sheet metal fabrication, hydroform pressing, brake.
Impresa began operating in 1973 as Venture Aircraft and expanded
through a 2012 acquisition of Swift-Cor Aerospace. It then changed
its name Impresa Aerospace.
Operating from a production facility in Gardena, California,
Impresa provides machined parts, fabricated components, assembled
parts and tooling for the aerospace and defense industries. In
addition to Boeing, the debtor's customers include Spirit
AeroSystems, Raytheon, Northrop Grumman, Cessna, Lockheed Martin
and Gulfstream. It has provided parts and components for Boeing's
major airframes, including the 787, 777 and 747 as well as the
Airbus A380 and Gulfstream's G550 and G650 planes.
On Sept. 24, 2020, Impresa Holdings Acquisition Corp. et al.,
sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
20-12399). Robert J. Dehney, Matthew B. Harvey, Paige N. Topper
and Taylor M. Haga of Morris Nichols Arsht & Tunnell LLP serve as
counsel to Impresa. Duff & Phelps Securities, LLC, is the
investment banker. Stretto is the claims agent.
INTELSAT SA: Plan Exclusivity Extended Until February
-----------------------------------------------------
Judge Keith L. Phillips of the U.S. Bankruptcy Court for the
Eastern District of Virginia, Richmond Division, has extended
Intelsat S.A. and its affiliates' exclusivity periods to file a
bankruptcy-exit plan and solicit acceptances of that plan through
and including February 15, 2021, and April 12, 2021, respectively.
The Debtors cited the progress they made in the early days of their
complex chapter 11 cases:
(i) the Debtors have executed a smooth transition into chapter
11, securing $1 billion in post-petition financing to provide them
with the liquidity necessary to operate their business and fund the
C-band clearing process;
(ii) the Debtors have gathered and socialized vast amounts of
diligence regarding key issues in these cases and educated their
key creditor constituents and other parties in interest to
facilitate a transparent and effective chapter 11 plan process;
(iii) the Debtors have pursued and negotiated various
resolutions and transactions with their customers and other
counterparties as their customers have grappled with their own
financial distress and operational challenges; and
(iv) the Debtors and their advisors continue to work toward
proposing a workable plan and path to emergence.
The Covid-19 pandemic directly affected the Debtors and caused
acute financial distress. It also placed a substantial logistical
burden on almost every aspect of the Company’s chapter 11 cases,
including the C-band clearing process pursuant to the Federal
Communications Commission order and the day-to-day operation of the
Company's business as the Company's management, employees, and
advisors are working remotely.
The Company has committed to "clearing" the C-band spectrum that
will likely require, among other things, that the Company, procure,
configure, and launch seven satellites on an expedited timeframe,
coordinate the transition of its U.S. media customers to different
transponders, install state of the art compression technologies.
The C-band clearing process requires the Company to spend a
significant aspect of its operations, as the Company has utilized
the C-band spectrum for its satellite communication networks for
decades.
The Debtors will use the additional time provided by the extension
of the exclusivity periods to finalize these analyses, conduct
further discussions regarding their restructuring strategy, and
engage in multiparty negotiations in an effort to ultimately
coalesce their stakeholders around a consensual plan of
reorganization and emergence capital structure.
The Debtors are optimistic that the collaborative efforts of
stakeholders to date will continue into the chapter 11 plan
negotiations and allow them to accomplish a value-maximizing
restructuring plan.
Without the extension, the Debtors' current filing period was
slated to expire on September 10, 2020, and the solicitation period
on November 9, 2020.
About Intelsat S.A.
Intelsat S.A. -- http://www.intelsat.com-- is a publicly held
operator of satellite services businesses, which provides a diverse
array of communications services to a wide variety of clients,
including media companies, telecommunication operators, internet
service providers, and data networking service providers. It is
also a provider of commercial satellite communication services to
the U.S. government and other select military organizations and
their contractors. Intelsat's administrative headquarters are in
McLean, Va., and the company has extensive operations spanning
across the United States, Europe, South America, Africa, the Middle
East, and Asia.
Intelsat and its affiliates concurrently filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va.
Lead Case No. 20-32299) on May 13, 2020. The Debtors disclosed
total assets of $11,651,558,000 and total liabilities of
$16,805,844,000 as of April 1, 2020.
Judge Keith L. Phillips oversees the cases. The Debtors have tapped
Kirkland & Ellis LLP and Kutak Rock LLP as legal counsel, Alvarez &
Marsal North America, LLC as restructuring advisor, PJT Partners LP
as financial advisor and investment banker, Deloitte LLP as tax
advisor, and Stretto as claims and noticing agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on May 27, 2020. The committee has tapped Milbank LLP and
Hunton Andrews Kurth LLP as legal counsel, FTI Consulting, Inc. as
a financial advisor, Moelis & Company LLC as an investment banker,
Bonn Steichen & Partners as special counsel, and Prime Clerk LLC
and Donlin, Recano & Company, Inc. as information agents.
JIMMY LEE THRASH: Rep's $6/Sq. Ft. Sale of Pearl Property Approved
------------------------------------------------------------------
Judge Neil P. Olack of the U.S. Bankruptcy Court for the Southern
District of Mississippi authorized Chandy Lee, the designated
representative of Jimmy Lee Thrash, to sell approximately 2.4 acres
of commercial-property located in Pearl, Mississippi to Upshaw
Enterprises, Inc. for $6 per square foot, with the exact amount of
square footage to be determined by a survey mutually satisfactory
to both the Movant and the Seller.
Subsequent to the filing of the Petition, and prior to taking such
action as necessary to dispose of the assets in the case that were
to be liquidated, the Debtor passed away on Feb. 15, 2020. The
Movant is the duly authorized representative of the Chapter 11
estate of the Debtor.
The ad valorem taxes will be prorated at closing on the Property
from Jan. 1, 2020, to the date of closing.
The Response filed by The Bank of Morton is resolved by the
agreement that the Bank will be paid at closing and it may accept,
and apply, the sales proceeds without further order.
The Response filed by the United States Trustee is resolved by the
agreement of the Movant to file a report of sale with attached
settlement statement or other closing document within 14 days after
the closing on the sale of the Property.
The sale is free and clear of liens, claims and security interests
with the exception of ad valorem tax claims which will be prorated
from Jan. 1, 2020, to the date of closing, and paid at closing,
with all valid liens and claims to attach to the sales proceeds.
However, the increased amount of fees due to the Office of the UST
will also be deducted from the gross sales price and paid to the
UST.
The first, and only, consensual lien is held by the Bank. Upon
closing, all funds from the closing, less ad valorem real estate
taxes and closing costs and the UST incurred fees, will be paid
directly to the Bank who, as noted, holds a deed of trust on the
property in the amount of approximately $632,000.
Jimmy Lee Thrash sought Chapter 11 protection (Bankr. S.D. Miss.
Case No. 15-02421) on Aug. 5, 2015.
KAR AUCTION: S&P Affirms 'B' Issuer Credit Rating; Outlook Negative
-------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on KAR
Auction and issue-level ratings on its debt and removed the ratings
from CreditWatch, where it placed them with negative implications
on April 23, 2020.
S&P said, "The negative outlook reflects the risk (albeit reduced)
that we could downgrade KAR over the next 12 months if pressure on
the company's revenue, margins, or cash flow increases because of
the macroeconomic environment or its inability to achieve synergies
from the acquisition of BacklotCars.
"Used car demand has exceeded our previous expectations and the
subsequent impact on KAR Auction's credit metrics should not be as
severe as initially anticipated. However, the negative outlook
reflects the company's continued exposure to the ongoing
macroeconomic uncertainties. KAR's revenue declined 42% in the
second quarter, largely weighted toward severe impacts in April and
early May. By June, volumes had picked up to 108% of the prior
year, with used car prices reaching record levels. Although
business stabilization could be earlier and stronger than we
anticipated, there remain uncertainties regarding the
sustainability of the volume pickup, as well as ongoing
macroeconomic uncertainties. Unemployment levels, government
subsidy payments, and the subsequent impact on used car demand are
items outside of KAR's control, which greatly affect its business.
We now expect debt to EBITDA of 7.1x-7.5x and free operating cash
flow (FOCF) to debt of around 6%, compared with our previous
expectations of around 8x and 3%, respectively."
The negative outlook reflects the risk of a downgrade over the next
12 months if pressures on the company's revenue, earnings, or cash
flow have increased. This could result from a resurgence of
COVID-19, affecting unemployment and used car demands, or
operational issues such as the integration of BacklotCars.
S&P said, "The negative outlook reflects the risk that we could
downgrade KAR over the next 12 months if there are increased
pressures to the company's revenue, earnings, or cash flow. This
could occur if we expect debt to EBITDA will remain above 7x or
FOCF to debt to remains below 3% in 2021.
"We could revise the outlook to stable if we see consistent
operational execution (such that EBITDA margins approach 22%) and
steady macroeconomic recovery prospects in 2021, which would give
us more confidence about used car demand. This would support debt
to EBITDA solidly below 7x and FOCF to debt of above 3% on a
sustained basis."
KB US HOLDINGS: Says Buyer Wants to Reject Union Deals
------------------------------------------------------
Law360 reports that the parent of the Kings Food and Balducci's
supermarket chains, KB US Holdings, on Sept. 24, 2020, asked a New
York bankruptcy judge to allow the company to reject union
contracts and pension obligations, saying they are standing in the
way of the $75 million bid it has for the company.
At a remote hearing counsel for KB U.S. Holdings said the
rejections were necessary to allow the sale to go forward and meet
a debtor-in-possession funding agreement deadline, and asked U. S.
Bankruptcy Judge Sean Lane to reject union arguments that another
bidder might be found to assume the obligations.
About KB US Holdings
KB US Holdings, Inc. is the parent company of King Food Markets and
Balducci's Food Lover's Market.
Headquartered in Parsippany, N.J., Kings Food Markets has been a
specialty and gourmet food market across the East Coast. In 2009,
Kings Food Markets acquired specialty gourmet retail grocer,
Balducci's Food Lover's Market. As of the petition date, the
Debtors operate 35 supermarkets across New York, New Jersey,
Connecticut, Virginia, and Maryland.
KB US Holdings and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D. N.Y. Lead Case No. 20-22962)
on Aug. 23, 2020. The petitions were signed by Judith Spires, chief
executive officer. At the time of the filing, Debtors disclosed
assets of between $100 million and $500 million and liabilities of
the same range.
Judge Sean H. Lane oversees the cases.
The Debtors tapped Proskauer Rose LLP as their legal counsel; PJ
Solomon, L.P. and PJ Solomon Securities, LLC as investment banker;
Ankura Consulting Group LLC as financial advisor; and Prime Clerk
LLC as claims, noticing and solicitation agent.
KRAFT HEINZ: S&P Alters Outlook to Stable, Affirms 'BB+' ICR
------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' long-term issuer credit
rating on U.S.-based packaged food company Kraft Heinz Co. and
revised its outlook to stable from negative because it does not
expect adjusted leverage to reach our high-4x downgrade threshold
over the next year.
S&P said, "Our outlook revision to stable reflects higher demand
for the company's products because of the coronavirus and the weak
economy, which we believe will continue into 2021. Kraft Heinz
reported 7.5% organic sales and 7.0% S&P Global Ratings-adjusted
EBITDA expansion in the first half of 2020 largely due to
significant volume growth as people increasingly eat at home. We
estimate adjusted leverage for the 12 months ended June 30, 2020,
improved to 4.2x, compared to 4.5x as of Dec. 31, 2019. We forecast
low-4x leverage over the next 12 months because of elevated
industry demand. We do not expect adjusted leverage to reach our
high-4x downgrade threshold over the next year."
Kraft Heinz' recently announced transformation plan lays out a
foundation for stabilization and growth, but execution of the plan
is still in the early stages and S&P believes key risks remain.
Management indicates it has already reorganized the portfolio into
six consumer-driven platforms (emphasizing common consumer needs),
under which individual products were further identified by role
(grow, energize, or stabilize) to guide resource allocation and
investment decisions. This approach could facilitate more effective
and efficient product initiatives, which will focus on big brand
innovation and renovation, compared to the prior approach that
entailed riskier new product introductions spread across the
portfolio. Kraft Heinz also intends to grow its emerging markets
business, and expects to achieve 1%-2% sustainable consolidated
organic sales growth, compared to 1% average annual decline from
2017-2019.
The company created an operations center that is expected to
realize $2 billion of gross productivity savings by 2024 (3%
annually), mainly from procurement ($1.2 billion) and manufacturing
and logistics ($800 million). It is not clear how much of the
expected gross savings might be reinvested versus fall directly to
EBITDA, though numerous initiatives were presented, including
reducing supply chain losses. The company's CFO indicated these
supply chain losses were a primary cause of its EBITDA decline (via
lower gross profit), including an inability to offset cost
inflation. The company's cost focus has shifted toward managing
variable expenses, as opposed to the prior fixed-cost reduction
approach via consolidation. The company also stated that no EBITDA
rebasing is required, and that it plans to increase the amount
spent on marketing by 30% (which equates to an approximately $325
million increase which will be funded through its $2 billion
productivity plan) while allocating more of its marketing budget to
working media. S&P estimates total marketing expense would reach
about 6% of sales. Kraft Heinz believes it will be able to growth
adjusted EBITDA by 2%-3% annually.
S&P said, "We believe management's 1%-2% organic sales target may
be optimistic considering its portfolio consists of the same
low-growth brands (excluding the expected 2021 cheese divestiture)
and highly commoditized with pass-through pricing such as coffee
and peanuts, some of which, in a noncoronavirus environment, may
remain out of favor and/or face competition from attractive
private-label and branded rival offerings. We also believe certain
of Kraft Heinz's brands have sizable price gaps relative to private
label, which could lead to share loses or price erosion. Our
forecast assumes organic sales will stabilize and grow by about
0.5% annually, reflecting management's more targeted resource
allocation framework. In addition, its 2%-3% EBITDA growth target
seems achievable if it is able to stabilize the top line and
realize a portion of its productivity initiatives. However, the 3%
annual cost productivity target (about $400 million per year) is
not an immaterial amount for a company with a poor cost control
record." Regardless, over the near term, the favorable demand
impact from the coronavirus may make it difficult to assess whether
management's transformation plan is working. Our forecast assumes a
more measured flattish to 1.0% annual EBITDA growth rate excluding
the cheese divestiture.
The planned divestiture of certain cheese businesses is a modest
credit ratio positive, though S&P believes future shareholder
enhancing initiatives are possible over the next several years.
Kraft Heinz announced it has agreed to divest the natural, grated,
cultured, and specialty cheese business to Group Lactalis for $3.2
billion gross cash consideration. The transaction is expected to
close in the first half of 2021 and result in about 0.2x leverage
reduction. Kraft Heinz will retain Kraft Mac & Cheese, Kraft
Singles (American cheese), and Philadelphia cream cheese. The
planned divestiture of these assets—which constitute about 5% of
the consolidated entity—does not affect S&P's view of the
business.
Kraft Heinz stated its top priority is to invest for growth and
improvement, while planning to sustain net leverage consistently
below 4x. It also stated as it achieves its deleveraging goals, it
could consider strategic acquisitions or share repurchases. We do
not rule out the potential for future leveraging transactions given
the company's partial ownership by sponsor 3G and its historical
willingness to transact large acquisitions, including Heinz's
acquisition of Kraft and its 2017 offer to purchase Unilever PLC.
S&P said, "The stable outlook reflects our expectation that demand
for the company's products will remain temporarily elevated into
2021 due to the coronavirus and weak economic conditions. This
includes our expectation for mid-single-digit organic sales growth
over the next few quarters, gradually decelerating to
low-single-digit organic declines by mid-2021 assuming a reverse in
coronavirus-related demand spikes, and adjusted leverage sustained
in the low-4x area.
"Although unlikely over the next 12 months, we could raise the
rating if management is able to restore enterprise value,
strengthen its key brands through targeted innovation and effective
marketing, and maintain a higher level of adjusted EBITDA and free
operating cash flow (FOCF) generation, such that adjusted leverage
approaches 3.5x. The successful execution of management's
transformation plan could result in a higher business risk
assessment if the company demonstrates that it is able to control
its cost structure, growth its brands, and accurately forecast
performance. We would also want to see these improvements sustained
without the demand benefits from the coronavirus, and that
financial policy will not become more aggressive, especially
considering the company's historical appetite for large
acquisitions.
"If we raise the long-term issuer credit rating, we would also
raise the short-term commercial paper rating to 'A-3'.
"We could lower the rating if we reassess our view of the business
risk as a result of a renewed deterioration in EBITDA and FOCF
generation, or if the company's disposal of a large amount of
brands results in a less competitive position. We believe the
planned cheese disposal on its own will not have a materially
negative impact on the company's competitive position. Performance
weakness could result if there is a significant reversal of
coronavirus-related volume growth that is presently occurring
across the packaged food industry. It is also possible the
organization—after experiencing significant cost cutting and
consolidation over the past few years--may not be capable of
effectuating a sustained transformation of brands that generally
compete in low-growth, out-of-favor categories with increased
private-label competition and in some cases commoditization. We
could also lower the rating if we forecast that adjusted leverage
will approach the high-4x area."
LAREDO INVESTMENTS: $545K Las Vegas Property Sale to Muckleroy OK'd
-------------------------------------------------------------------
Judge Mike K. Nakagawa of the U.S. Bankruptcy Court for the
District of Nevada authorized Laredo Investments, LLC's sale of the
real property located at 82 Ocean Harbor Lane, Las Vegas, Nevada to
Martin Allen Muckleroy for $545,000.
A hearing on the Motion was held on Sept. 23, 2020 at 9:30 a.m.
The sale is subject to the approval of Secured Creditor Security
National.
Secured Creditor Security National will receive net proceeds at the
closing of no less than $505,000.
About Laredo Investments
Laredo Investments, LLC, sought Chapter 11 protection (Bankr. D.
Nev. Case No. 20-12312) on May 13, 2020. The Debtor tapped Michael
J. Harker, Esq., at Law Offices of Michael J. Harker as counsel.
LEHMAN BROS: Announces 21st Distribution to Unsecured Creditors
---------------------------------------------------------------
Lehman Brothers Holdings Inc. ("LBHI"), as Plan Administrator,
announced Sept. 24 in a court filing the percentage recovery that
will be distributed on October 1, 2020 to holders of allowed claims
against LBHI and its various affiliated debtors.
Lehman's aggregate twenty-first distribution to unsecured creditors
pursuant to its confirmed chapter 11 plan will total approximately
$146.5 million. This distribution includes (1) $134.8 million of
payments on account of third-party claims, which includes
non-controlled affiliate claims, and (2) $11.7 million of payments
among the Lehman Debtors and their controlled affiliates (see
Exhibit B to the court filing, Docket # 60878, for further detail).
Cumulatively through the twenty-first distribution, Lehman's total
distributions to unsecured creditors will amount to approximately
$128.2 billion including (1) $95.3 billion of payments on account
of third-party claims, which includes non-controlled affiliate
claims, and (2) $32.9 billion of payments among the Lehman Debtors
and their controlled affiliates.
In accordance with the chapter 11 plan, which was confirmed on
December 6, 2011, and subject to available funds, the Lehman
Debtors' twenty-second distribution to creditors is anticipated to
be made within 5 business days of March 30, 2021.
The chapter 11 plan, related disclosure statement and other
filings, including the filing referred to above, can be found at
www.lehman-docket.com in the "Key Documents" section. Questions
relating to the distribution can be directed to the Debtors' claims
agent, Epiq Systems, Inc., at 1-866-879-0688 (U.S.) and
1-503-597-7691 (Non-U.S.).
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.
LOANCORE CAPITAL: S&P Affirms 'B' Long-Term ICR; Outlook Negative
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term issuer credit rating
on LoanCore Capital Markets LLC (LCM) and removed it from
CreditWatch, where S&P placed it with negative implications on May
7, 2020. The outlook is negative.
S&P said, "We are affirming our rating on LCM and removing it from
CreditWatch because leverage, measured by debt to adjusted total
equity (ATE), has declined below 6.0x following the repayment of
$300 million senior unsecured notes on June 1, 2020 and the
execution of its COR7 securitization. However, we believe leverage
could increase to over 6.5x when the company ramps up new
originations."
The company sold over $200 million of assets to repay the notes,
resulting in realized losses in May 2020. Among the sales was 42%
of LC Sub Holdings LLC, which holds COR2 to COR7 securities
(retained interests in securitizations). LCM also used proceeds
from its recent COR7 securitization to pay off $196 million of
borrowings under repurchase agreements.
The company's retained earnings remain minimal due to the asset
write-downs in March 2020. Retained earnings and minority interest
equity are the only portion of LCM's total equity that S&P includes
in its adjusted common equity, and our calculation of ATE only
includes preferred stock up to 33% of adjusted common equity. On
this basis, ATE is $71.4 million, compared to reported generally
accepted accounting principles members' equity of $453.5 million,
as of Aug. 31, 2020.
S&P believes LCM has sufficient liquidity, with approximately $125
million of cash and cash equivalents as of Aug. 31, 2020.
S&P said, "The negative outlook reflects our expectation that
leverage will fluctuate around the timing of originations and
securitizations, and it could increase to over 6.5x when the
company ramps up new originations. We believe that LCM may continue
to face headwinds in originating commercial real estate mortgages
and from commercial mortgage-backed securities market volatility,
but it will maintain sufficient liquidity over the next 12
months."
S&P could lower the rating over the next 12 months if:
-- Leverage rises over 6.5x;
-- LCM faces liquidity issues (primarily from margin calls); or
-- The company continues to suffer material losses, profitability
issues, or deteriorating asset quality.
S&P could revise the outlook to stable over the next six to 12
months if the company's liquidity remains adequate, in its view,
asset quality is relatively stable, and leverage remains
sustainably below 6.5x.
MARIANINA OIL: Abandoned Gas Station Owner Files for Chapter 11
---------------------------------------------------------------
Bill Heltzel of Westchester and Fairfield County Business Journal
reports that the owner of an abandoned, contaminated gas station,
across the street from White Plains Hospital and among a dozen
properties the city has condemned for redevelopment, Marianina Oil
Corp, has declared bankruptcy.
"The property, despite the fact that it requires additional
remediation, still has a considerable market value," Marianina
President Frank Codella states in an affidavit.
But he said Marianina needs bankruptcy protection to sell the
property, because it "has no monies or working capital to continue
to defend … pending proceedings or further remediate the
property."
The former BP gas station is at 34 E. Post Road, across the street
from the hospital's emergency entrance.
Marianina bought the property around 1986 for $500,000. Afterward,
Codella states in the affidavit, environmental contamination was
discovered. BP Products North America paid Marianina $50,000 in
compensation and the gas station agreed to take responsibility for
all future contamination claims.
More contamination was found in 1994 when new underground gas tanks
were installed. More than 1,600 tons of petroleum contaminated soil
was removed, according to court documents in a pending lawsuit. But
no groundwater remediation was performed, according to court
records, and substantial contamination was left behind.
Codella contends that the contamination was remediated and that the
state Department of Environmental Conservation "issued closure
documentation" in 1996 indicating that the property was clean.
From 1995 to 2017, Marianina leased the station to other operators,
and for the past three years the station has been inactive.
In 2017, White Plains Housing Authority sued BP for allegedly
contaminating soil and water near the Winbrook Apartments. A toxic,
subsurface plume was allegedly migrating from the gas station to
Building 33, home of about 350 people.
In 6.6 years, according to a recent court opinion, the plume could
reach the building and threaten the health of residents.
Federal and state housing agencies restrict development on
contaminated property, so the plume also jeopardized the housing
authority's plans to build Brookfield Commons, a $350 million
project to replace Winbrook.
The housing authority dropped BP from the lawsuit and added
Marianina, and a month ago, U.S. District Judge Nelson S. Roman
granted the authority a summary judgment against Marianina.
The gas station company is also defending itself against a 2017
Department of Environmental Conservation action, for allegedly
failing to get approval for a remediation plan.
And last year, White Plains Urban Renewal Agency disclosed plans to
condemn a dozen properties on East Post Road, around White Plains
Hospital, for unspecified redevelopment.
The Marianina bankruptcy petition values the gas station property
at $1.6 million, and states that it has a pending lease with Gunks
Holdings Corp., New Paltz, conditioned on cleaning the property.
The company's liabilities include $12.5 million to the housing
authority, $1.7 million to BP and an unknown amount to the state
Department of Environmental Conservation. All three liabilities are
listed as disputed.
Marianina needs bankruptcy protection, according to Codella, to
sell the property to White Plains or a higher bidder, "and
liquidate the claims of the creditors."
About Marianina Oil Corp.
Marianina Oil Corp. is engaged in activities related to real
estate. The company is the owner of fee simple title to a property
located at 34 East Post Road, White Plains, NY 10601, valued at
$1.6 million.
Marianina Oil Corp. filed a Chapter 11 petition (Bankr. S.D.N.Y.
Case No. 20-23070) on Sept. 23, 2020. The Hon. Robert D. Drain is
the case judge. DAVIDOFF HUTCHER & CITRON LLP, led by Robert L.
Rattet, Esq., is the Debtor's counsel. In the petition signed by
Frank Codella, president, the Debtor disclosed total assets of
$1,600,000 and total liabilities of $14,215,000 as of the filing.
MATCHBOX FOOD: Oct. 1 Hearing on Bidding Procedures for All Assets
------------------------------------------------------------------
Judge Lori S. Simpson of the U.S. Bankruptcy Court for the District
of Maryland will convene a hearing on Oct. 1, 2020, at 10:00 a.m.
via Zoom to consider the bidding procedures proposed by Matchbox
Food Group, LLC and affiliates in connection with the sale of
substantially all assets to Thompson Hospitality Corp. for $11.55
million, subject to overbid.
The Debtors propose to sell the assets pursuant to Thompson in
accordance with the terms of their Asset Purchase Agreement. All
assets include (i) the assets of and equity in the Conveying
Subsidiaries; (ii) all intellectual property and intellectual
property rights associated with the "Matchbox" brand; and (iii) and
for the assumption and assignment of certain leases of real
property. Additionally, the Purchaser has agreed to pay to the
Debtors estate a consulting fee in the amount of $550,000 at
closing.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 13, 2020 at 5:00 p.m. (ET)
b. Initial Bid: Greater than or equal to (i) the $11.55
million consideration provided by the Purchaser, plus (ii) Breakup
Fee plus (iii) $550,000 (Consulting Fee), plus (iv) $250,000
c. Deposit: $250,000
d. Auction: To take place via ZOOM on Oct. 14, 2020 at 10:00
a.m. (ET) broadcasted from the offices of McNamee, Hosea, Jernigan,
Kim, Greenan & Lynch, P.A., 6411 Ivy Lane, Suite 200, Greenbelt MD
20770, or such later time or such other place as the Debtors will
designate in a subsequent notice to all Qualified Bidders, in the
event that the Debtors receive a Qualified Bid.
e. Bid Increments: $250,000
f. Sale Hearing: The Debtors propose to hold it in late
October 2020, subject to the availability of the Court.
g. Sale Objection Deadline: TBD
h. Closing: 90 days after the Sale Hearing
i. No party will be allowed to submit a credit bid for some or
all of such Acquired Assets
j. Breakup Fee in the amount of $346,500
The Debtors propose to file a list of Qualified Bids on Oct. 13,
2020. If they do not receive any Qualified Bids other than from
the Purchaser, they will not hold an Auction and the Purchaser will
be named the Successful Bidder.
The sale will be on an "as is, where is" basis and without
representations or warranties of any kind, nature, or description
by the Debtors.
To facilitate and consummate the sale of the Acquired Assets, the
Debtors ask authority to assume and assign certain Designated
Contracts to the Successful Bidder. Within five business days
after entry of the Bidding Procedures Order, the Debtors will file
the Cure Notice. The Assignment and Cure Objection Deadline is no
later than 5:00 p.m. (ET) on the date that is 10 days after the
filing of the Cure Notice.
Lastly, the Debtors ask approval from the Court to change their
names to remove references to the tradename "Matchbox."
A copy of the Bidding Procedures and the Agreement is available at
https://tinyurl.com/yyjv8kh8 PacerMonitor.com free of charge.
About Matchbox Food Group
Matchbox Food Group, LLC and affiliates operate a chain of
casual-dining brand restaurants.
On Aug. 3, 2020, Matchbox Food Group and affiliates filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Md. Lead Case No. 20-17250). The petitions were signed
by Edwin A. Sheridan IV, member. At the time of the filing,
Matchbox Food Group had estimated assets of less than $50,000 and
liabilities of between $50 million and $100 million.
Judge Lori S. Simpson oversees the cases.
McNamee, Hosea, Jernigan, Kim, Greenan & Lynch, P.A. and The
Veritas Law Firm serve as Debtors' bankruptcy counsel and corporate
counsel, respectively.
MAVATAR TECHNOLOGIES: Hilco Selling Patents & Other IP Assets
-------------------------------------------------------------
Hilco Streambank, a leading intellectual property advisory firm
specializing in the valuation and sale of intangible assets, is
selling the intellectual property assets of Mavatar on behalf of
Lynn Schoenmann, as chapter 7 trustee (the "Trustee"), including
the patents, trademarks, domain names and source code for the
Mavatar platform software. Offers are due October 13, 2020, and an
auction will be held on October 15, 2020. The sale is subject to
approval of the United States Bankruptcy Court for the Northern
District of California, which is overseeing the Company's chapter 7
bankruptcy case.
Mavatar created mobile and web applications which provide solutions
for retailers, influencers and consumers. It offered mCart by
Mavatar, a platform-as-a-service and omnichannel marketplace
powered by blockchain that facilitates the creation of shoppable
content, tracks sales and marketing dollars, and makes
micro-payments to influencers.
With Mavatar's technology, retailers are able to close the gap
between their online and offline sales and marketing without any
need for technology integration. The technology removes the
marketing middleman and allows influencers to earn a commission for
the products they promote on behalf of retailers. Influencers are
able to create mCarts which provide consumers with lists of
products from various retailers, as well as background information
for each product such as whether a certain dress was featured on a
popular TV show. These mCarts can be advertised on the influencers'
social media profiles and allow consumers to find various products
across a variety of retailers. "Consumers' universal shopping carts
help them find the best deals," remarked Hilco Streambank senior
vice president Richelle Kalnit. "Mavatar's technology allows
consumers to track products to online and offline retailers and
guides shoppers from movies, magazines, TV shows and social media
directly to checkout."
Parties interested in acquiring the Mavatar intellectual property
assets or learning more about the sale process should CLICK HERE or
contact Hilco Streambank directly using the contact information
provided below.
Gabe Fried Richelle Kalnit Ryan Brenner
CEO Senior Vice President Analyst
gfried@hilcoglobal.com rkalnit@hilcoglobal.com
rbrenner@hilcoglobal.com
617.458.9355 212.993.7214 212.993.7213
About Hilco Streambank
Hilco Streambank is a market leading advisory firm specializing in
intellectual property disposition and valuation. Having completed
numerous transactions including sales in publicly reported Chapter
11 bankruptcy cases, private transactions, and online sales through
IPv4.Global, Hilco Streambank has established itself as the premier
intermediary in the consumer brand, internet and telecom
communities. Hilco Streambank is part of Northbrook, Illinois based
Hilco Global, the world's leading authority on maximizing the value
of business assets by delivering valuation, monetization and
advisory solutions to an international marketplace. Hilco Global
operates more than twenty specialized business units offering
services that include asset valuation and appraisal, retail and
industrial inventory acquisition and disposition, real estate and
strategic capital equity investments.
About Mavatar Technologies
Mavatar Technologies, Inc. is a privately held company that offered
"smarter" online shopping solutions. Mavatar Technologies filed a
Chapter 7 petition (Bankr. N.D. Cal. Case No. 20-30389) on May 7,
2020.
James R. Selth of Weintraub And Selth, Apc served as counsel to the
Debtor.
E. Lynn Schoenmann was appointed as Chapter 7 trustee.
MERIDIAN MARINA: Plea to Clarify Assets Sale Order Denied as Moot
-----------------------------------------------------------------
Judge Mindy A. Mora of the U.S. Bankruptcy Court for the Southern
District of Florida denied as moot Secured Creditor Martin County
Marine Holdings, LLC's request to clarify the proposed order on
Meridian Marina & Yacht Club of Palm City, LLC's sale of the real
property located at 1400 SW Chapman Way, 1120 SW Chapman Way, Palm
City, Florida, together with certain assets, to Marina Development
Partners, LLC, as assigned to Integra Real Estate, LLC, for $8
million.
A hearing on the Motion was held on Sept. 22, 2020.
Marine Holdings noted that despite the Court's approval of the
proposed order in the form existing at that time (plus the rulings
by the Court), both the counsel to the Purchaser and the Debtor
made additional and numerous substantive changes to the proposed
order. Certain of the requested changes by the Debtor's counsel
were not agreed to by the Court because those changes related to
authorization for the Debtor to object to certain of Marine
Holding's claim after confirmation and the sale contemplated by the
Sale Motion, despite the lapse of the deadline to object to claims
of Aug. 13, 2020 and the filing of Applications for Compensation by
the counsel to Marine Holdings scheduled for confirmation.
Because of the continued insistence by the Debtor's counsel that
the proposed order allow a belated objection, Marine Holdings was
forced to file a Motion for Court Determination of Allowed Amount
of Secured Claim, that is also scheduled for confirmation.
The Integra contracts are not in play because Debtor defaulted
Integra, Integra delivered a notice of termination and the deposits
due under the sale contracts were not made. Accordingly, because
the Sale Motion contemplated the contracts to Integra, it is
suggested that the Court should not include provisions in an Order
on the Sale Motion regarding Integra's terminated contracts and
that have been rendered moot by subsequent events.
About Meridian Marina & Yacht Club
Meridian Marina & Yacht Club of Palm City, LLC, based in Palm City,
FL, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No.
19-18585) on June 27, 2019. In the petition signed by Timothy
Mullen, member and manager, the Debtor disclosed $8,528,155 in
assets and $5,790,533 in liabilities. The Hon. Erik P. Kimball
oversees the case. Craig I. Kelley, Esq. at Kelley Fulton & Kaplan,
P.L., serves as bankruptcy counsel.
No official committee of unsecured creditors has been appointed in
the Chapter 11 case.
MIDTOWN CAMPUS: Plan Exclusivity Extended Thru December 7
---------------------------------------------------------
At the behest of Midtown Campus Properties, LLC, Judge Robert A.
Mark of the U.S. Bankruptcy Court for the Southern District of
Florida, Miami Division, extended the period within which the
Debtor has the exclusive right to file a Chapter 11 plan by 90
days, through and including December 7, 2020, and the exclusive
right to solicit plan acceptances through and including February 4,
2021.
The Debtor and its Debtor-in-Possession Lender, and their
respective advisors will use the extension to complete a student
housing apartment complex project, and to analyze the assumption
and/or rejection issues related to the Debtor's contracts and
leases regarding the Project. The extension also will allow the
Debtor to address and potentially resolve objections to
confirmation and proceed towards emergence from bankruptcy.
In the weeks prior to the Petition Date, the Debtor faced numerous
issues and disputes with its general contractor, Sauer, Inc. that
made a continuation of the business relationship weak. On June 27,
2020, the Debtor served Sauer with a formal Notice of Intent to
Terminate Saur's Contract. Additionally, the Debtor's Project
suffered from the macroeconomic effects of the COVID-19 pandemic.
This required the Debtor to assess its limited cash reserves to
finalize the Project and seek a restructuring transaction with the
support of BMI Financial Group, Inc., the DIP lender. Ultimately,
the Debtor -- in a sound exercise of its fiduciary duties --
elected to pursue an orderly reorganization and commenced this
case, including to complete the construction and leasing of the
Project under the protection of this Court.
The Debtor notes it has made significant progress in continuing
with the construction of the Project despite numerous obstacles and
to endure with Sauer and the transition of construction of the
Project to a new contractor post-petition, to complete the initial
phases of the Project.
On July 31, 2020, the Debtor received a Temporary Certificate of
Occupancy for Phase 1A of the Project. Since that date, the Debtor
has been focused on preparing Phase 1A -- consisting of
approximately 170 "beds" -- for tenant move-in, which commenced on
August 17, 2020, for the start of classes at Santa Fe College on
August 24 and the University of Florida on August 31, 2020. The
Debtor has also been heavily focused on continuing the construction
of Phase 2A. Upon completion of Phases 1A and 2A, the Debtor will
then proceed to complete construction on the remainder of the
Project by the end of the calendar year 2020.
On May 27, 2020, the Court approved the Debtor to negotiate a Joint
Stipulation Authorizing Disbursement with U.S. Bank National
Association as Indenture Trustee to facilitate the restructuring
process. Also, the Indenture Trustee was authorized to pay the
Debtor's Bondholders the interest payment on the Bonds due on June
1, 2020, and in December 2020, from the funds on deposit in the
Debt Reserve Fund as required by the terms of the Indenture.
About Midtown Campus Properties
Midtown Campus Properties, LLC, is a single asset real estate that
owns the Midtown Apartments. The Midtown Apartments is a 310-unit
student housing apartment complex currently under construction at
104 NW 17th St in Gainesville Florida, just across the University
of Florida. It consists of a six-story main building, parking
garage for resident and public use, and commercial retail space.
Each unit includes a full-size kitchen, carpet, tile, and hardwood
floors and be fully furnished. It is located near several Midtown
bars and restaurants frequented by students, and just a couple
minutes' walk from Ben Hill Griffin Stadium.
On May 8, 2020, Midtown Campus Properties sought Chapter 11
protection (Bankr. S.D. Fla. Case No. 20-15173). The Debtor was
estimated to have $50 million to $100 million in assets and
liabilities as of the bankruptcy filing. The Honorable Robert A.
Mark is the presiding judge. The Debtor tapped Genovese Joblove &
Battista, P.A., as bankruptcy counsel; and The Bosch Group, Inc.,
as construction consultants.
No creditors' committee has been appointed in this case. In
addition, no trustee or examiner has been appointed.
MKJC AUTO GROUP: Plan Exclusivity Extended Thru January 4
---------------------------------------------------------
MKJC Auto Group LLC asks the U.S. Bankruptcy Court for the Eastern
District of New York to extend the periods within which it has the
exclusive right to file a Chapter 11 plan by 90 days, through and
including January 4, 2021, and -- in the event that the Debtor
files a plan of reorganization on or before January 4 -- extend the
Debtor's exclusive time to solicit acceptances by 90 days, through
and including April 5, 2021.
Since the Petition Date, the Debtor and its professionals have
devoted significant effort to:
(i) obtain the relief that enabled the Debtor to stabilize its
operations in chapter 11; and
(ii) explore exit scenarios in this case, including a sale of
its assets pursuant to section 363 of the Bankruptcy Code.
In light of its ongoing discussion with potential bidders for the
acquisition of the Debtor's business, the Debtor is not yet in a
position to file a plan of reorganization.
As the Debtor's exclusive right to file a plan would expire on
October 6, 2020, and its solicitation period on January 4, 2021,
the Debtor seeks to extend its Exclusivity and Acceptance Periods
to ensure that the Court, the Debtor, and other parties-in-interest
are not distracted by the filing of any competing or premature
plans.
The Debtor also believes that a brief extension will continue to
promote the orderly, and hopefully consensual, reorganization of
the Debtor, without the need to devote unnecessary time, money, and
energy to defending against or responding to a premature competing
plan filed by a third party.
* * *
The Court granted the Debtor's request and extended the Plan
Exclusivity Period to January 4, 2021.
About MKJC Auto Group, LLC
MKJC Auto Group, LLC owns and operates the automobile dealership
out of Long Island, New York, known as Hyundai of Long Island City,
selling and leasing new and pre-owned Hyundai automobiles to
consumers.
MKJC Auto Group, LLC, filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
20-42283) on June 8, 2020. The petition was signed by Ryan
Kaminsky, Executor of The Estate of Mitchell Kaminsky. At the time
of filing, the Debtor estimated $10,319,999 in assets and
$10,034,320 in liabilities.
The Honorable Carla E. Craig is the presiding judge. Joel M.
Shafferman, Esq. at SHAFFERMAN & FELDMAN LLP represents the Debtor
as counsel. The Debtor has hired the Law Offices of Paul J. Solda,
Esq. as its special corporate and real estate counsel.
MODELL'S SPORTING: Exit Plan Offers Little Relief to Unsecureds
---------------------------------------------------------------
SGV Media reports that Modell's Sporting Goods Inc., after nearly
six months in bankruptcy proceedings, filed its Chapter 11
liquidation plan that calls for unsecured creditors, including
trade vendors with claims, to recover less than one percent of
their claims.
The disclosure statement, filed Sept. 18, 2020 with the U.S.
District Court for the District of New Jersey, also provided a
summation of the New York City-based chain's bankruptcy
reorganization efforts that were halted with the emergence of
COVID-19.
Modell's entered bankruptcy proceedings with a plan to liquidate
all of its 134 stores while continuing to explore a
recapitalization of its business through a sale of some, or all, of
its assets or equity investments to revive the failed business.
The coronavirus pandemic not only challenged its efforts to find a
suitable investor but delayed the liquidation sale. And because
sporting goods stores are not deemed essential businesses, state
directives shuttered the company's stores shortly after the
bankruptcy filing date, effectively preventing the liquidation
sales from proceeding.
Modell's disclosure plan indicated that administrative claims of
$4.8 million would be paid in full. Full recoveries are also set
for holders of secured tax claims, priority tax claims, other
secured claims, and other priority claims.
As of the petition date, unsecured claims against Modell's were in
excess of $100 million, according to the plan document. The claims
included accrued and unpaid trade and other unsecured debts
incurred in the ordinary course of business, unpaid amounts owed to
vendors and claims for unpaid rent and other obligations under its
leases.
Unsecured claims also included a $6.8 million loan from Mitchell
Modell, CEO and owner of the retail chain, in June 2019 to help
overcome a liquidity crisis at that time. Modell took ownership of
the company in April 2019.
Modell's was also jointly liable with Henry Modell & Company to
make quarterly contributions to its pension plan that was
underfunded by $25.8 million. The pension claim is being treated as
an unsecured claim.
Path to Liquidation
Modell's bankruptcy and subsequent liquidation follow several years
of "Diminished Operating Performance" amid a challenging commercial
environment, according to the disclosure statement. The challenges
for Modell's were exacerbated by increased competition from big-box
and specialty sporting goods retailers, declining participation in
team sports among youth and teens and a shift in customer
preference away from physical retail stores toward online-only
stores.
According to the disclosure statement, Modell's was "heavily
dependent on in-store traffic, which declined in recent years."
Modell's financial conditions were also "weighed down by a store
footprint that is disproportionate to market demands."
Complicating matters, the Northeastern states, where Modell's
operated, experienced unseasonably warmer weather than expected in
December 2019 and January 2020, causing a decrease in cold-weather
apparel and footwear sales.
The success of regional sports teams "also significantly
influenced" Modell's sales, and sales were impacted by a lack of
success by teams in New York where most of the company's stores
were located.
Outside weak sales overall, Modell's never fully recovered after
vendors demanded more favorable terms, including reduced payment
schedules or cash in advance and reduced customary trade credit,
following rumors of a potential bankruptcy sparked by an article in
the Wall Street Journal published in February 2019.
The article detailed Modell's missed payments in February and March
rents on most of its stores and significantly curtailed payments to
the majority of its vendors due to liquidity challenges. According
to court filings, the liquidity challenges were partly due to
general underperformance but also because of higher than expected
costs to move into a new distribution center.
Modell's, subsequently, in early 2019, suffered a disruption in its
inventory position which impacted its retail location of needed
merchandise for several months that negatively affected its
financial performance. The $6.2 million loan by Mitchell Modell
helped shore up credit, and Modell's in early 2019 was also able to
obtain rent deferrals, re-negotiate many of its store leases and
secured improved payment terms from vendors. Yet Modell's continued
to miss sales targets in the back-half of 2019 that caused "another
strain on liquidity."
Sales Process Unsuccessful
In January 2020, Modell's retained RBC Capital Markets (RBC) to
explore a sales process. RBC had been retained in January 2019 to
explore a sale, but the process ended by the summer after Mitchell
Modell's investment and as trade credit stabilized.
After January 29, 2020, RBC contacted 14 strategic buyers, some of
which who were also contacted in early 2019. Negotiations with a
potential bidder on a going concern sale were ongoing before the
bankruptcy filing but were “ultimately unsuccessful."
Reports at the time identified JackRabbit, which acquired
Maine-based Olympia Sports in October 2019, as a prospective
bidder.
The filing also noted that the Mitchell Modell, in the final weeks
before the bankruptcy, was able to secure additional rent
concessions from certain of its landlords to support an
out-of-court restructuring but "lacked sufficient liquidity to
execute on a business plan that would be acceptable to their
vendors."
In the weeks leading up to the bankruptcy filing, prepetition
lenders increased discretionary reserves further constraining
already tightening liquidity. By the date of the bankruptcy
filing, prepetition lenders had imposed incremental reserves of $18
million. As a result, Modell's availability, under the credit
agreement, "was reduced to a mere $9.589 million and deprived the
debtors of sufficient liquidity to continue to operate in the
ordinary course of business."
Modell's began liquidation sales in mid-March, but sales in its
stores were soon postponed as the coronavirus pandemic began
ramping up. In late June, going-out-of-business sales at its
remaining 104 locations resumed. Proceeds largely supported payouts
under the disclosure plan.
On August 10, 2020 Retail Ecommerce Ventures, led by digital
entrepreneurs, Dr. Alex Mehr and Tai Lopez, acquired Modell's
intellectual property and other assets related to the e-commerce
business for $3.64 million. Modell’s had drawn two bids at a
bankruptcy auction for those assets.
Modell's also retained A&G Realty Partners to sell its leasehold
interests but was only able to sell the lease to its location at
531 86th Street, Brooklyn, NY for $217,604, over the objection of
the landlord.
Other information included in the disclosure plan:
Founded in 1889, Modell’s was America's oldest family-owned and
operated retailer of sporting goods, athletic footwear, active
apparel, and licensed fan gear;
For the fiscal year ending February 2020, Modell's had gross sales
totaling approximately $490 million.
As of the petition date, Modell's balance sheet reflected
approximately $220 million in assets and approximately $288 million
in liabilities; and as of the petition date, Modell's employed
approximately 3,623 employees, comprised of approximately 341
full-time employees and 3,282 hourly employees.
About Modell's Sporting Goods
Modell's Sporting Goods -- https://www.modells.com/ -- is a
family-owned and operated retailer of sporting goods, athletic
footwear, active apparel, and fan gear. Modell's Sporting Goods
operates stores throughout New York, New Jersey, Pennsylvania,
Connecticut, Massachusetts, New Hampshire, Delaware, Maryland,
Virginia and the District of Columbia.
Modell's Sporting Goods, Inc., and its affiliates sought Chapter 11
protection (Bankr. D.N.J. Lead Case No. 20-14179) on March 11,
2020.
Modell's Sporting Goods was estimated to have $500,000 to $1
million in assets and $1 million to $10 million in liabilities. The
Hon. Vincent F. Papalia is the case judge.
The Debtors tapped Cole Schotz P.C. as counsel; Berkeley Research
Group, LLC, as restructuring advisor; and Prime Clerk LLC as claims
agent.
On March 23, 2020, the Office of the United States Trustee
appointed the Official Committee of Unsecured Creditors of Modell's
Sporting Goods. The Committee retained Lowenstein Sandler LLP, as
counsel.
MONROE COMMUNITY COLLEGE: S&P Lowers 2014AB Bonds Rating to 'BB+'
-----------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'BB+' from
'BBB-' on Monroe County Industrial Development Corp., N.Y.'s series
2014A and B revenue bonds, issued on behalf of Monroe Community
College Association Inc. (MCCA). The outlook is negative.
On March 25, 2020, S&P revised the outlook to negative on MCCA and
several other U.S. higher education privatized (off-balance-sheet)
student housing projects in the wake of the COVID-19 pandemic and
the uncertainty about the ultimate economic fallout.
"The downgrade reflects operating pressure that MCCA faces due to
what we view as the projected loss of fiscal 2021 rental revenue
following the reduction of available beds in the housing projects
because of the implementation of safety measures related to the
pandemic," said S&P Global Ratings credit analyst Brian Marshall.
The association is a not-for-profit corporation established in 1964
to advance and promote programs and services for Monroe County
Community College.
"The negative outlook reflects our belief that all projects in the
sector are facing negative economic or fundamental business
conditions that could result in downgrades over the next one-two
years," Mr. Marshall added. In addition, the negative outlook
reflects expected challenges facing the industry due to a sudden
and potentially prolonged decline in student housing occupancy and
the associated loss of rental revenue because many colleges and
universities have transitioned to remote learning from in-person
learning. S&P sid, "The negative outlook also reflects our view
that it is highly likely the project will continue to generate
weaker rental revenues and there is a high likelihood that that the
project will need to draw on available liquidity for fiscal 2021.
In our opinion, the project's financial operation is sustainable in
the short term given MCCA's very solid liquidity support. Still, if
occupancy levels do not return to the pre-pandemic 772-bed maximum
following fiscal 2021, we could lower the rating further."
The rating reflects S&P's view of the following credit weaknesses:
-- Recent declines in coverage in fiscal 2020 and fiscal 2021
following years of coverage, with projections expecting coverage
will meet the 1.2x covenant level in fiscal 2020 and be lower than
1.0x in fiscal 2021 following lower maximum occupancy due to
recently implemented safety measures;
-- Reduction of maximum occupancy by about 50% due to recently
implemented safety measures, which materially limit potential
project revenue generation;
-- Material enrollment declines in recent years tied to
unfavorable demographic shifts, although management is instituting
plans to stabilize enrollment levels; and
-- Limited revenue stream, which includes student fees and
bookstore revenues.
Partially offsetting the above weaknesses, in S&P's view, are the
association's:
-- Very solid liquidity, with unrestricted cash of $21 million
(inclusive of a $6 million board restricted renewal and replacement
fund), coupled with management's willingness to use these resources
to continue to make timely debt service payments in fiscal 2021;
-- Limited number of beds relative to total headcount and no plans
to expand; and
-- Maintenance of all assets at MCCA, without the transfer of
surplus funds back to the college.
The downgrade reflects our opinion of the operating pressure that
the project faces due to the likelihood of the projected loss of
rental revenue as maximum occupancy levels have been reduced by
about 50% due to recently implemented safety measures for fall 2020
in response to the pandemic. The college transitioned to remote
learning to protect the health and safety of students, and limit
the community spread of the coronavirus. S&P said, "We view the
risks posed by the pandemic to public health and safety as a social
risk under our environmental, social, and governance factors.
Despite the elevated social risk, we believe the project's
environmental and governance risk are in line with our view of the
sector as a whole."
S&P could lower the rating if occupancy doesn't rebound following
projected declines due to pandemic-related safety measures that
lowered maximum occupancy in fiscal 2021 and if available liquidity
falls materially from current levels due to continued occupancy
pressures beyond fall 2020, such that a draw on available funds is
necessary leaving little cushion for additional pressures.
While unlikely in the near term, a return to as stable outlook
would be predicated on evidence of sustained solid occupancy and
cash flows sufficient to meet covenants and debt service payments
on an ongoing basis.
MORIAH POWDER: Wants Plan Exclusivity Extended Thru April 2021
--------------------------------------------------------------
U.S. Realm Powder River, LLC, f/k/a Moriah Powder River, LLC, asks
the U.S. Bankruptcy Court for the District of Wyoming to extend the
period within which it has the exclusive right to file a chapter 11
plan to and including April 30, 2021. It asks the Court to extend
its exclusivity period to obtain acceptance of a plan for 60 days
thereafter, through and including June 30, 2021.
The Honorable Cathleen D. Parker previously granted U.S. Realm's
request to extend for 60 days its exclusive periods to file a
chapter 11 plan through and including September 25, 2020, and
obtain acceptances for 60 days through and including December 25,
2020, to give the Debtor the necessary time to negotiate and
finalize a hedging transaction with Delek Royalty US, LLC, the
parent entity of Powder River VPP, LLC, the senior secured creditor
of the Debtor. At that time, the Debtor also noted it recently
paid approximately 90% of all privately owned royalties through
February, would pay the remaining 10% to be paid within weeks (now
accomplished), and would finalize a stipulation with the State of
Wyoming and the United States to address the assumption and cure of
the Debtor's state and federal leases (now accomplished).
"While the structure and process for Debtor to enter into a hedging
agreement with Delek is now available (subject to Court approval),
such an agreement is not necessary at this time. Specifically,
Debtor was recently able to lock pricing for the future sale of its
gas -- essentially providing the Debtor with the same benefits of a
formal hedging contract -- guaranteed prices -- without the
downsides of additional fees and costs and relinquishing control of
cash," U.S. Realm says. "80% of Debtor's future gas production
through October 2021 is now subject to set pricing at amounts that
will generate cash surplus on a going forward basis."
According to U.S. Realm, the recently locked-in gas pricing will
generate surplus cash to fund a plan. Under the price locking
arrangements, however, the highest prices locked in will occur
during the winter months -- with the Debtor receiving the cash 60
days in arrears (thus, the Debtor will realize the benefits of
price locking from winter months on around the end of April 2021).
An extension of exclusivity is warranted to allow the Debtor to
begin enjoying the benefit of higher prices and build up its cash
resources to fund a plan.
About Moriah Powder River
Moriah Powder River, LLC, now known as US Realm Powder River, LLC,
is a privately held natural gas company with headquarters in
Sheridan, Wyoming, and operates in the Powder River Basin located
in northeast Wyoming.
Moriah Powder River filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Wyo. Case No.
19-20699) on Oct. 31, 2019. The petition was signed by Craig
Camozzi, chief operating officer.
At the time of filing, Debtor estimated $100 million to $500
million in assets and $50 million to $100 million in liabilities.
Bradley T Hunsicker, Esq., at Markus Williams Young & Zimmermann
LLC, is the Debtor's legal counsel, and Hall & Evans, LLC as its
special counsel.
No creditors' committee has been appointed in this case, nor has
any trustee or examiner been appointed.
NATIONAL MEDICAL: Seeks 2021 Exclusivity Extension Amid Bank Row
----------------------------------------------------------------
National Medical Imaging, LLC and its affiliates request the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania to extend
by 180 days the periods within which the Debtors have the exclusive
right to file and solicit acceptances of a Chapter 11 plan of
reorganization, through and including April 8 and June 7, 2021,
respectively.
The Debtors tell the Court they have made substantial progress in
the three short months the Chapter 11 cases have been pending,
despite having to respond to U.S. Bank's aggressive efforts to
derail the Debtors' liquidation strategy. The Debtors filed for
bankruptcy protection to prevent a judicial sale of certain causes
of action against U.S. Bank and other entities for relief under
Section 303(i) of the Bankruptcy Code. To advance the progress of
the Chapter 11 Cases, the Debtors commenced an adversary proceeding
against U.S. Bank (Adversary No. 20-00219-ELF) to resolve certain
threshold issues regarding whether or not U.S. Bank holds a secured
claim, whether or not U.S. Bank may participate as a creditor in
any distribution of proceeds from the Section 303(i) Claims through
a chapter 11 plan, and whether or not U.S. Bank's claim against the
Debtors' estates should be equitably subordinated pursuant to
Section 510(c). Resolution of these issues, which will impact the
classification of claims under a chapter 11 plan and U.S. Bank's
voting rights, is necessary before the Debtors can proceed with
filing and soliciting votes for a chapter 11 plan. On August 24,
2020, U.S. Bank filed an extensive Motion to Dismiss the U.S. Bank
Adversary, which the Debtors intend to vigorously oppose. The
Debtors hoped to move forward quickly with a trial on the issues
raised in the U.S. Bank Adversary, but U.S. Bank slowed the
litigation by filing the Motion to Dismiss.
The Debtors also note they entered into a Funding and Carveout
Agreement with Douglas Rosenberg 2004 Trust and have sought Court
approval of the Funding Agreement. The Agreement resolves certain
issues regarding the Debtors' ability to distribute proceeds from
the Section 303(i) Claims through a liquidating plan given the
Trust's assertion of a security interest in those same proceeds.
The Funding Agreement will allow the Debtors to proceed reasonably
quickly with proposing a liquidating claim once the issues raised
in the U.S. Bank Adversary are resolved.
The Debtors explain their extension request is intended to maintain
a framework conducive to an orderly, efficient, and cost-effective
liquidation process and avoid to critically impair the Debtors'
ability to successfully liquidate their remaining assets with no
benefit to the Debtors' estates or creditors.
Despite the fact that U.S. Bank's Motion to Dismiss remains
pending, the Debtors moved quickly to file the U.S. Bank Adversary
so that these important issues could be resolved by the Court
expeditiously.
"We are prepared to expedite the proceedings as much as possible so
that they can be resolved within the outside limitations for the
exclusive periods and with the Court, we will spend the next couple
of months addressing the U.S. Bank's Motion to dismiss the
complaint," the Debtors add.
Absent an extension, the exclusive filing period for the Debtors
will expire on October 10, 2020, and the exclusive solicitation
period on December 9, 2020.
About National Medical Imaging
National Medical Imaging, LLC, and National Medical Imaging Holding
Company, LLC provide medical and diagnostic laboratory services
with a principal place of business located at 1425 Brickell Ave.,
Apt. 57E, Miami.
On June 12, 2020, National Medical Imaging and National Medical
Imaging Holding Company filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Lead Case No.
20-12618). At the time of the filings, each Debtor disclosed
assets of $10 million to $50 million and liabilities of the same
range.
The Debtors have tapped Dilworth Paxson LLP as their bankruptcy
counsel, and Kaufman, Coren & Ress, P.C., and Karalis P.C. as their
special counsel.
Prior to the Debtors' voluntary Chapter 11 filing, DVI Receivables
Trusts and other creditors filed involuntary Chapter 11 petitions
(Bankr. E.D. Pa. Case Nos. 05-12714 and 05-12719) against Debtors
on March 3, 2005.
In 2014, National Medical Imaging hit U.S. Bank N.A. and eight
others with a $50 million lawsuit in Pennsylvania federal court
alleging the bank ruined its business by forcing it into
involuntary bankruptcy proceedings just as it was beginning to
implement a turnaround plan. National Medical Imaging claims that
the involuntary bankruptcy petitions ultimately destroyed its
business even though the cases were ultimately tossed.
NEIMAN MARCUS: Cuts Store Employees Amid Business Assessment
------------------------------------------------------------
Kim Bhasin of Bloomberg News reports that Neiman Marcus Group Inc.
is reducing the size of its store workforce as part of a
reassessment of its business as it emerges from bankruptcy.
The department store said it began laying off some store workers
after a reorganization of staff at its Neiman Marcus and Bergdorf
Goodman locations.
"We are evaluating every part of our business to ensure that the
company is positioned for long-term success," Neiman Marcus said in
a statement. 'We plan to separate from selling and non-selling
associates."
The company declined to disclose how many employees would be
affected by the cuts.
About Neiman Marcus Group
Neiman Marcus Group LTD, LLC -- https://www.neimanmarcus.com/ -- is
a luxury omni-channel retailer conducting store and online
operations principally under the Neiman Marcus, Bergdorf Goodman,
and Last Call brand names. It also operates the Horchow e-commerce
website offering luxury home furnishings and accessories. Since
opening in 1907 with just one store in Dallas, Neiman Marcus and
its affiliates have strategically grown to 67 stores across the
United States.
Weeks after being forced to temporarily shutter stores due to the
coronavirus pandemic, Neiman Marcus Group and 23 affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32519) on
May 7, 2020, after reaching an agreement with a significant
majority of our creditors to undergo a financial restructuring
that
will substantially reduce the Company's debt load, and provide
access to considerable financing to ensure business continuity.
Kirkland & Ellis LLP is serving as legal counsel to the Company,
Lazard Ltd. is serving as the Company's investment banker, and
Berkeley Research Group is serving as the Company's financial
advisor. Stretto is the claims agent, maintaining the page
https://cases.stretto.com/NMG
Judge David R. Jones oversees the cases.
The Extended Term Loan Lenders are represented by Wachtell, Lipton,
Rosen & Katz as legal counsel, and Ducera Partners LLC as
investment banker.
The Noteholders are represented by Paul, Weiss, Rifkind, Wharton &
Garrison LLP as legal counsel and Houlihan Lokey as investment
banker.
NEIMAN MARCUS: Emerges From Chapter 11 Bankruptcy
-------------------------------------------------
Neiman Marcus Holding Company, Inc., on Sept. 25, 2020, announced
it has emerged from voluntary Chapter 11 protection, successfully
completing its restructuring process and implementing the Plan of
Reorganization that was confirmed by the U.S. Bankruptcy Court for
the Southern District of Texas, Houston Division on Sept. 4, 2020.
The Company emerges with the full support of its creditors and new
equity shareholders, now operating with a strengthened capital
structure that eliminated more than $4 billion of existing debt and
more than $200 million of cash interest expense annually, with no
near-term maturities.
"With the successful implementation of our restructuring, Neiman
Marcus and Bergdorf Goodman will continue to be the preeminent
luxury shopping destinations for years to come. While the
unprecedented business disruption caused by COVID-19 has presented
many challenges, it has also given us the opportunity to reimagine
our platform and improve our business. We emerge from Chapter 11 as
a stronger, more innovative retailer, brand partner, and employer,"
stated Geoffroy van Raemdonck, Chief Executive Officer of Neiman
Marcus Group.
"Our new owners, which include PIMCO, Davidson Kempner Capital
Management, and Sixth Street, understand the value of our brands
and the opportunity for growth," continued Mr. van Raemdonck.
"They are also strongly committed to supporting our company on
sustainability issues – where we intend to be a leader within the
industry. At the conclusion of this process, I remain profoundly
impressed by the strength of Neiman Marcus and Bergdorf Goodman,
the commitment of our associates, the unwavering support of our
brand partners, and the loyalty of our customers."
The new owners are funding a $750 million exit financing package
that fully refinances the debtor-in-possession ("DIP") loan and
provides significant additional liquidity for the business. The
Company has also secured a $125 million FILO facility led by
Pathlight, the proceeds of which refinance existing debt and will
provide liquidity to support the Company's ongoing operations and
strategic initiatives. The exit Term Loan financing and FILO
facility are in addition to the liquidity provided by the $900
million ABL led by Bank of America and a consortium of commercial
banks. With the support of its new shareholders and funds
available from the exit financing, FILO facility, and ABL facility,
the Company expects to be able to execute on the strategic
initiatives to ensure a long and successful future for Neiman
Marcus.
Neiman Marcus Group also emerges with a newly constituted Board of
Directors, including:
* Geoffroy van Raemdonck, who serves as Chief Executive Officer
of Neiman Marcus Group;
* Meka Millstone-Shroff, whoserves as a strategic operating
advisor and board member to a variety of companies, including
serving as an independent director on the boards of Party City and
Nanit;
* Pauline Brown, who most recently served as the Chairman of
North America for LVMH Moet Hennessy Louis Vuitton and served on
the boards of L Capital and several LVMH subsidiaries, including
Donna Karan, Marc Jacobs, and Fresh Cosmetics;
* Pamela Edwards, who most recently served as Chief Financial
Officer of the Mast Global and Victoria's Secret divisions of L
Brands, the multi-brand specialty retailer;
* Kris Miller, who most recently served as the Chief Strategy
Officer for eBay, the global e-commerce marketplace, from
2014-2020; and
* Scott D. Vogel, who is the Managing Member at Vogel Partners
LLC.
About PIMCO
PIMCO is one of the world's premier fixed income investment
managers. With its launch in 1971 in Newport Beach, California,
PIMCO introduced investors to a total return approach to fixed
income investing. In the 45+ years since then, the firm has
continued to bring innovation and expertise to our partnership with
clients seeking the best investment solutions. Today PIMCO has
offices across the globe and 2,800+ professionals united by a
single purpose: creating opportunities for investors in every
environment. PIMCO is owned by Allianz SE, a leading global
diversified financial services provider.
About Davidson Kempner
Davidson Kempner Capital Management LP ("DKCM") is a
U.S.-registered global institutional investment management firm
with more than 35 years of experience and a focus on fundamental
investing with a multi-strategy approach. DKCM has over $33 billion
in assets under management with over 400 professionals in five
offices (New York, Philadelphia, London, Hong Kong and Dublin).
About Sixth Street
Sixth Street is a global investment firm with approximately $47
billion in assets under management and committed capital. Sixth
Street operates eight diversified, collaborative investment
platforms across our growth investing, adjacencies, direct lending,
fundamental public strategies, infrastructure, special situations,
agriculture and par liquid credit businesses. Our long-term
oriented, highly flexible capital base and “One Team” cultural
philosophy allows us to invest thematically across sectors,
geographies, and asset classes. Founded in 2009, Sixth Street has
more than 275 team members including over 140 investment
professionals operating from nine locations around the world. For
more information, visit www.sixthstreet.com.
About Neiman Marcus Group
Neiman Marcus Group LTD, LLC -- https://www.neimanmarcus.com/ -- is
a luxury omni-channel retailer conducting store and online
operations principally under the Neiman Marcus, Bergdorf Goodman,
and Last Call brand names. It also operates the Horchow e-commerce
website offering luxury home furnishings and accessories. Since
opening in 1907 with just one store in Dallas, Neiman Marcus and
its affiliates have strategically grown to 67 stores across the
United States.
Weeks after being forced to temporarily shutter stores due to the
coronavirus pandemic, Neiman Marcus Group and 23 affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32519) on
May 7, 2020, after reaching an agreement with a significant
majority of our creditors to undergo a financial restructuring that
will substantially reduce the Company's debt load, and provide
access to considerable financing to ensure business continuity.
Kirkland & Ellis LLP is serving as legal counsel to the Company,
Lazard Ltd. is serving as the Company's investment banker, and
Berkeley Research Group is serving as the Company's financial
advisor. Stretto is the claims agent, maintaining the page
https://cases.stretto.com/NMG
Judge David R. Jones oversees the cases.
The Extended Term Loan Lenders are represented by Wachtell, Lipton,
Rosen & Katz as legal counsel, and Ducera Partners LLC as
investment banker.
The Noteholders are represented by Paul, Weiss, Rifkind, Wharton &
Garrison LLP as legal counsel and Houlihan Lokey as investment
banker.
NEIMAN MARCUS: Plan Exclusivity Extended Thru Dec. 3
----------------------------------------------------
At the behest of Neiman Marcus Group LTD, LLC and its affiliates,
Judge David R. Jones of the U.S. Bankruptcy Court for the Southern
District of Texas, Houston Division, extended the periods within
which the Debtors have the exclusive right to file a Chapter 11
plan, through and including December 3, 2020, and the exclusive
right to solicit acceptances to the plan through and including
February 1, 2021.
The Debtors said their chapter 11 process is working as intended to
align stakeholders and maximize value for the Debtors' estates.
Since commencing these chapter 11 cases, the Debtors have expanded
upon the wide support embodied in the Restructuring Support
Agreement and are close to reaching a global resolution of the
outstanding issues in these cases.
The Debtors have also stabilized their business operations,
obtained Court approval of important procedural and operational
relief, and filed their schedules and statements. The Debtors and
their key stakeholders continue to negotiate critical documents
required for emergence, including key settlement, financing, and
corporate governance documents, and working constructively to
narrow open issues and arrive at consensual resolutions in advance
of plan confirmation and emergence, and the Debtors are confident
that a successful resolution will be reached. all while avoiding
the disruptive effects of competing chapter 11 plans.
The Debtors seek an extension of their exclusive periods to file
and solicit a chapter 11 plan to protect the progress made to date
and to ensure that the Debtors stay on track to emerge from chapter
11 on a swift timeline in the best interests of the Debtors'
estates.
On July 30, 2020, the Court entered an order approving the adequacy
of the Disclosure Statement explaining the Debtors' Plan. If
confirmed, the Plan will result in a comprehensive balance sheet
restructuring that will reduce the Debtors' balance sheet by as
much as $4 billion.
About Neiman Marcus Group
Neiman Marcus Group LTD, LLC -- https://www.neimanmarcus.com/ -- is
a luxury omnichannel retailer conducting store and online
operations principally under the Neiman Marcus, Bergdorf Goodman,
and Last Call brand names. It also operates the Horchow e-commerce
website offering luxury home furnishings and accessories. Since
opening in 1907 with just one store in Dallas, Neiman Marcus and
its affiliates have strategically grown to 67 stores across the
United States.
Weeks after being forced to temporarily shutter stores due to the
coronavirus pandemic, Neiman Marcus Group and 23 affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-32519) on
May 7, 2020, after reaching an agreement with a significant
majority of our creditors to undergo a financial restructuring that
will substantially reduce the Company's debt load, and provide
access to considerable financing to ensure business continuity.
Kirkland & Ellis LLP is serving as legal counsel to the Company,
Lazard Ltd. is serving as the Company's investment banker, and
Berkeley Research Group is serving as the Company's financial
advisor. Stretto is the claims agent, maintaining the page
https://cases.stretto.com/NMG
Judge David R. Jones oversees the cases.
The Extended Term Loan Lenders are represented by Wachtell, Lipton,
Rosen & Katz as legal counsel and Ducera Partners LLC as their
investment banker.
The Ad Hoc Secured Noteholder Committee is represented by Paul,
Weiss, Rifkind, Wharton & Garrison LLP as legal counsel, and
Houlihan Lokey as an investment banker.
AlixPartners provides independent financial advisory services to
Anthony R. Horton, the disinterested manager of the board of
managers of the Debtor.
NEW ACADEMY HOLDING: S&P Hikes ICR to B- on Lower Refinancing Risks
-------------------------------------------------------------------
S&P Global Ratings raised its issuer-credit rating on U.S.-based
outdoor and sports retailer New Academy Holding Co. LLC (Academy)
to 'B-' from 'CCC+' on lower refinancing risks.
At the same time, S&P is raising its rating on its senior secured
term loan to 'B-' from 'CCC+'. The '4' recovery rating reflects its
expectation for average recovery (30%-50%; rounded estimate: 40%)
in a payment default.
The ratings upgrade reflects S&P's belief that Academy's
refinancing prospects have significantlyy improved.
The developing outlook reflects S&P's view that an upgrade or a
downgrade is possible over the next year, depending on whether
Academy can successfully refinance its July 2022 term loan
maturity, sustaining a lower leverage reflecting a moderated
financial policy, as well as maintain generally consistent
operating performance trends.
Academy's operating performance has improved since late 2019, as
sales and EBITDA benefited from increased demand for outdoor
equipment and sports equipment. S&P said, "Although we think the
long-term demand trends remain uncertain, we believe good
performance will continue over the near term, albeit normalizing in
the 2021. In our opinion, the performance improvement along with
better free operating cash flow (FOCF) have led to lower near-term
refinancing risks. In addition, Academy recently filed for a
potential IPO and we believe the proceeds from such a transaction
(along with cash generation) could be used to redeem part of its
term loan debt at par if the transaction were to materialize. These
events in addition to the recent increase in pricing on its secured
term loan facility lead us to believe that refinancing prospects
have improved and the risk of a near-term below-par restructuring
has diminished."
S&P said, "That said, our view is tempered by other risks. This
includes continued uncertainty around the timing of the term loan
refinancing, which becomes current in July 2021, regardless of a
potential IPO. We also continue to expect uncertain long-term
positive performance sustainability at Academy and think the
company remains susceptible to fierce industry competition.
"Risks notwithstanding, we expect continued growth and FOCF
generation in 2020."
Through the second quarter ended in July 2020, total revenue and
comparable store sales increased more than 18% and 15%,
respectively, on escalating demand for outdoor products. At the
same time, S&P's adjusted EBITDA gained more than 40% over the same
period. S&P said, "We attribute the performance improvement to
higher spending on sports and outdoor equipment, in large part
attributable to consumers looking for socially distance
entertainment options and hobbies during the pandemic. Although we
expect the apparent demand to abate over time, we also believe this
growth will continue through 2020 and project sales and EBITDA
increasing at a double-digit-percent rate on a full-year basis."
S&P said, "Moreover, Academy has generated more than $700 million
in FOCF through the first half of the year. We think the cash
generated resulted from a combination of performance improvement
and timing of working capital flows. For the full year, we project
FOCF in excess of $400 million despite continued performance
improvement, largely because the negative expected working capital
flows in the back half of the year. We believe the company's FOCF
generation supports its improved refinancing prospects, as we
project a significant proportion of the cash generation will remain
on the company's balance sheet notwithstanding a potential IPO and
debt redemption.
"The company's operating results will likely normalize in 2021 and
we project a low-single-digit-percent decline in sales and a modest
decline in adjusted EBITDA.
"We believe 2020 results likely benefited from pull-forward demand
and government stimulus, the latter especially relevant to
Academy's customer segmentation. We do not project either events to
reoccur in our base-case projections for next year. We also expect
Academy's apparel and footwear sales, comprising more than 30% of
its sales, to experience uneven performance for the next 12-18
months. In addition, we think the company's firearm and ammunition
revenue will likely remain volatile. Firearms and ammunition
contribute a significant portion of sales (about 6% of the revenue)
and have been historically unpredictable, a trend we expect to
continue.
"We believe Academy will maintain a limited market position in the
sports retailing sub-industry.
"Academy participates in the highly competitive and mature sport
retailing industry. We view the company as a larger regional player
in its space, with stores primarily in Texas and adjacent southern
states. The company positions itself as a value player and competes
with significantly larger and better-capitalized players. We think
this position places the company at a potentially long-term
disadvantage, as the industry is prone to discounting and
competitive pricing. We also believe sporting goods and related
products remain a highly fragmented sector with increasing
competition from many players, including larger specialty retailers
such as Bass Pro, pure-play e-commerce competitors such as Amazon,
and big box retailers such as Walmart. Moreover, we believe Academy
and the sports retailing industry may experience increased volatile
performance over the medium term following the recent gains,
because of the pandemic and its effects on the economy.
"Academy's recent performance trends have benefited from its market
position as a value-oriented sporting goods retailer. In addition,
we project a lower capital spending of about $50 million in 2020,
from $62 million in 2019 and more than $100 million in 2018. The
reduced capital spending reflects the company's strategic pullback
on new store openings and greater focus on in-store experiences and
omni-channel initiatives. As such, we expect Academy to primarily
invest in its omni-channel capabilities over the next few years.
This spending has benefited operating performance, especially in
the early months of the pandemic, and in part because of these
initiatives we have revised our view of the company's business risk
to weak from vulnerable.
"Still, we project Academy's omni-channel sale penetration amounts
to about 10% of its total sales. This is despite management's
efforts to narrow the gap in recent quarters and the significant
growth experienced during the last few months. Moreover, as the
company works to expand its online capability, we believe its lack
of experience and operational know-how in this area could lead to
potential setbacks and amplify profit volatility."
S&P Global Ratings acknowledges a high degree of uncertainty about
the evolution of the coronavirus pandemic. The current consensus
among health experts is that COVID-19 will remain a threat until a
vaccine or effective treatment becomes widely available, which
could be around mid-2021. S&P said, "We are using this assumption
in assessing the economic and credit implications associated with
the pandemic. As the situation evolves, we will update our
assumptions and estimates accordingly."
S&P said, "The developing outlook reflects the probability that we
could lower or raise the rating, depending on whether or not
Academy can successfully refinance its July 2022 maturity,
sustaining a lower leverage based on a more moderate financial
policy, as well as maintaining generally consistent operating
performance trends.
"We could lower the rating if we don't expect a timely refinance of
Academy's term loan facility maturing July 2022, leading us to view
its capital structure as potentially unsustainable. Under such a
scenario, we would expect either uneven operating performance or
debt market volatility, leading us to believe the company would not
secure a refinancing before the term loan goes current in July
2021.
"We could raise the rating if we viewed Academy financial policy
more favorably, potentially supported by a successful execution of
an IPO, refinance of the term loan, and meaningfully reduced
private equity ownership to 40% or lower. Such a scenario would
likely occur along with continued improvement in operating
performance resulting in adjusted leverage sustaining below the 5x
range."
NEWS-GAZETTE: Wins Approval of Liquidation Plan
-----------------------------------------------
Daniel Gill of Bloomberg Law reports that Midwestern newspaper
publisher News-Gazette Inc. won approval of its Chapter 11
liquidation plan, wiping out much of its pension obligations and
clearing the way for the century-old company to wind down after
selling assets.
The sale proceeds are sufficient to pay all administrative,
priority, and secured claims in full, according to the plan
approved by Judge Karen B. Owens of the U.S. Bankruptcy Court for
the District of Delaware Wednesday at a virtual hearing.
While secured creditors are to be paid in full, unsecured creditors
will receive between 60% and 81% of their claims, estimated to be
between $310,000 and $420,000, according to the plan disclosure
statement. Pension claims will recover up to 36%.
About The News-Gazette
The News-Gazette is a daily newspaper serving 11 counties in the
eastern portion of Central Illinois and specifically the
Champaign-Urbana metropolitan area.
The News-Gazette Inc. and its debtor affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case
No. 19-11901) on Aug. 30, 2019. At the time of the filing, the
Debtor had estimated assets of between $1 million and $10 million
and liabilities of between $10 million and $50 million. Judge
Karen B. Owens oversees the case. William E. Chipman, Jr. at
Chipman Brown Cicero & Cole, LLP, is the Debtors' legal counsel.
NPC INTERNATIONAL: Court OKs Auction for Wendy's & Pizza Hut Assets
-------------------------------------------------------------------
On Aug. 25, 2020, NPC International, Inc. and its debtor affiliates
filed with the Bankruptcy Court a motion seeking approval of bid
procedures by which the Debtors will solicit and select the highest
or otherwise best offer for sale(s) of the Debtors' Pizza Hut
Assets, Wendy's Assets, or the WholeCo Assets.
On Sept. 25, 2020, the Court approved the proposed bid procedures.
The Debtors will offer for sale the Pizza Hut Assets pursuant to a
purchase agreement for (a) all of the Debtors' Pizza Hut Assets; or
(b) groups of restaurants representing one or more of the Debtors'
three Pizza Hut divisions in its entirety. The Debtors will also
accept bids on a region-by-region basis. The Debtors reserve the
right to not consider Qualified Bid(s) or to determine to not
proceed to an Auction or Sale Hearing for such Qualified Bid(s), if
the aggregate value of such Qualified Bid(s) does not exceed an
amount necessary to, among other things, fund plan distributions,
fund working capital, and secure the support of the Ad Hoc
Priority/1L Lender Group. At this time, the Debtors believe such
amount is $325 million on account of the Pizza Hut Assets.
The Debtors will offer for sale the Wendy's Assets pursuant to an
asset purchase agreement of all of the Debtors' Wendy's Assets; or
groups of restaurants representing an entire market in its
entirety. The Debtors reserve the right to not consider Qualified
Bid(s) or to determine to not proceed to an Auction or Sale Hearing
for such Qualified Bid(s), if the aggregate value of such Qualified
Bid(s) does not exceed an amount necessary to, among other things,
fund plan distributions, fund working capital, and secure the
support of the Ad Hoc Priority/1L Lender Group. At this time, the
Debtors believe such amount is $400 million on account of the
Wendy's Assets. WholeCo Assets.
The Debtors will offer for sale the WholeCo Assets pursuant to a
purchase agreement. For the avoidance of doubt, any bidder who
wishes to bid on the WholeCo Assets can but is not required to
separately bid for the Pizza Hut Assets and Wendy's Assets.
The bid deadline for all NPC assets ("WholeCo Assets") is Nov. 20,
with an auction on Dec. 1. The bid deadline for Pizza Hut assets
is Nov. 20, 2020 with auction Nov. 30, 2020. The bid deadline for
Wendy's assets is Nov. 10, 2020, with an auction scheduled for Nov.
18, 2020
A hearing to consider approval of the proposed sale transactions is
on Dec. 4, 2020 at 3:00 p.m. (Central Time).
The new dates were later than the previous schedule, according to
Bloomberg.
About NPC International
NPC International, Inc. -- https://www.npcinternational.com/ -- is
a franchisee company with over 1,600 franchised restaurants across
two iconic brands -- Wendy's and Pizza Hut -- spanning 30 states
and the District of Columbia.
NPC International and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-33353) on July 1, 2020. At the time of the filing, Debtors
disclosed assets of between $1 billion and $10 billion and
liabilities of the same range.
Judge David R. Jones oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP, as bankruptcy
counsel; Alixpartners, LLP as financial advisor; Greenhill & Co.,
LLC as investment banker; and Epiq Corporate Restructuring, LLC as
claims, noticing and solicitation agent and administrative advisor.
NPC INTL: Nov. 18, Nov. 30, & Dec. 1 Auction of Assets Set
----------------------------------------------------------
Judge David R. Jones of the U.S. Bankruptcy Court for the Southern
District of Texas authorized the bidding procedures proposed by NPC
International, Inc. and affiliates in connection with the auction
sale of their WholeCo assets, comprising the assets of Wendy's,
Pizza Hut.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: (i) Wendy's - Nov. 10, 2020 at 5:00 p.m.
(CT), (ii) Pizza Hut - Nov. 20, 2020 at 5:00 p.m. (CT), (iii)
WholeCo - Nov. 20, 2020 at 5:00 p.m. (CT)
b. Initial Bid: If a Stalking Horse Bidder is selected prior
to the applicable Bid Deadline, such Qualified Bid must result in
value more than the aggregate of the value of the sum of: (A) the
cash purchase price of the applicable Stalking Horse Agreement;
plus (B) the applicable Stalking Horse Bidder's assumed liabilities
in an estimated amount determined by the Debtors in consultation
with the Consultation Parties; plus (C) the sum of any applicable
bid protections, if any; plus (D)(x) $1 million with respect to any
bid for all of the Pizza Hut Assets, Wendy's Assets, or WholeCo
Assets, as applicable; and (y) $500,000 with respect to any Pizza
Hut Division Bid, Pizza Hut Region Bid, or Wendy's Market Bid, as
applicable.
c. Deposit: An amount equal to: (1) with respect to a Pizza
Hut Division Bid, Pizza Hut Region Bid or a Wendy's Market Bid, the
greater of (a) $1 million and (b) 10% of the cash purchase price of
the bid, and (2) with respect to all other bids, 10% of the cash
purchase price of the bid.
d. Auction: (i) Wendy's - Nov. 18, 2020 at 8:00 a.m. (CT),
(ii) Pizza Hut - Nov. 30, 2020 at 8:00 a.m. (CT), (iii) WholeCo -
Dec. 1, 2020 at 8:00 a.m. (CT). The Auctions will be held
telephonically, or at such other place and time as the Debtors,
after consulting the Consultation Parties, will select.
e. Bid Increments: (i) Pizza Hut and Wendy's Assets - For each
round, all Qualified Bids at the Auction or Sub-Auction will be
based on the Initial Highest Bid and increased therefrom, and
thereafter made in minimum increments of at least (x) $1 million
with respect to any bid for all of the Debtors' Restaurants, and,
if applicable, (y) $500,000 with respect for any bid for an entire
division, region, or market than the previous Qualified Bid, or in
such other increments as the Debtors may determine, in consultation
with the Consultation Parties. (ii) WholeCo Assets - For each
round, all Qualified Bids at the WholeCo Auction will be based on
the Initial Highest Bid and increased therefrom, and thereafter
made in minimum increments of at least $1 million or in such other
increments as the Debtors may determine, in consultation with the
Consultation Parties.
f. Sale Hearing: Wendy's, Pizza Hut, and WholeCo - Dec. 4,
2020 a 3:00 p.m. (CT)
g. Sale Objection Deadline: (i) Wendy's - Nov. 25, 2020 at
5:00 p.m. (CT), (ii) Pizza Hut - Dec. 4, 2020 a 3:00 p.m.(CT),
(iii) WholeCo - Dec. 4, 2020 a 3:00 p.m.(CT)
h. Closing: (i) Wendy's - Nov. 25, 2020 at 5:00 p.m. (CT),
(ii) Pizza Hut -
i. In conjunction with any Sale Transaction, the PTL Agent and
the 1L Agent will have the respective right to credit bid any
portion and up to the entire amount of the respective prepetition
claims under the PTL Credit Agreement and First Lien Credit
Agreement, as applicable, and subject to the applicable
intercreditor agreement, on any individual Asset, portion of the
Assets, or all Assets, in each case, constituting Prepetition
Collateral.
In accordance with the Bid Procedures, the Debtors may enter into a
Stalking Horse Agreement, subject to higher or otherwise better
offers at the applicable Auction, with any Stalking Horse Bidder
that submits a Qualified Bid acceptable to the Debtors to establish
a minimum Qualified Bid at the applicable Auction. In the event
they select a Stalking Horse Bidder, they will ask Court approval
of such Stalking Horse Bidder, the applicable Stalking Horse
Agreement, and any bid protections.
The form of Sale Notice is approved. Within three business days
after the entry of the Order, the Debtors will file with the Court
and serve the Sale Notice and the Order, including the Bid
Procedures, upon the Sale Notice Parties.
The Debtors are directed to post the Sale Notice on their case
information website at https://dm.epiq11.com/case/npc/info.
The form of Post-Auction Notice is approved. The Debtors will
serve the applicable Post-Auction Notice, Notice of Desired 365
Contracts, and Adequate Assurance Information on the counterparties
to the Desired 365 Contracts, the Sale Notice Parties, and all
parties entitled to notice, and in no event later than one day
after the applicable Auction.
The Assumption and Assignment Procedures are approved. The form of
Initial Assumption and Assignment Notice is approved. The Initial
Assumption and Assignment Deadline is Oct. 9, 2020. The Cure
Objection Deadline is Oct. 23, 2020 at 5:00 p.m. (CT).
The form of Notice of Desired 365 Contracts is approved. The
Contract Objection Deadline is Nov. 25, 2020 at 5:00 p.m. (CT).
Notwithstanding Bankruptcy Rules 6004(h), 6006(d), 9014, or
otherwise, the Court, for good cause shown, orders that the terms
and conditions of the Order will be immediately effective and
enforceable upon its entry.
A copy of the Bidding Procedures is available at
https://tinyurl.com/y48c6hst from PacerMonitor.com free of charge.
About NPC International
NPC International, Inc. -- https://www.npcinternational.com/ -- is
a franchisee company with over 1,600 franchised restaurants across
two iconic brands -- Wendy's and Pizza Hut -- spanning 30 states
and the District of Columbia.
NPC International and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-33353) on July 1, 2020. At the time of the filing, Debtors
disclosed assets of between $1 billion and $10 billion and
liabilities of the same range.
Judge David R. Jones oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP, as bankruptcy
counsel; Alixpartners, LLP as financial advisor; Greenhill & Co.,
LLC as investment banker; and Epiq Corporate Restructuring, LLC as
claims, noticing and solicitation agent and administrative
advisor.
OASIS PETROLEUM: Bonds Increases After Filing Chapter 11 Bankruptcy
-------------------------------------------------------------------
Ilya Banares of Bloomberg News reports that Oasis Petroleum bonds
jumped Wednesday, September 30, 2020, after the company filed for
Chapter 11 bankruptcy protection in Texas after struggling with
consistently low oil and gas prices.
Houston-based company's 6.875% bonds due 2022 rose nearly 7 cents
on the dollar, the most since April 2020, to around 23.7 cents,
according to Trace.
Its 6.875% bonds due 2023 soared 7 cents to 23.25 cents.
Oasis plans to reduce debt by $1.8 billion through its bankruptcy
process, eliminating its senior unsecured bonds and senior
unsecured convertible notes.
It has a commitment for $450 million in debtor-in-possession
financing, according to a statement.
About Oasis Petroleum
Headquartered in Houston, Texas, Oasis --
http://www.oasispetroleum.com/-- is an independent exploration and
production company focused on the acquisition and development of
onshore, unconventional crude oil and natural gas resources in the
United States. Its primary production and development activities
are located in the Williston Basin in North Dakota and Montana,
with additional oil and gas properties located in the Delaware
Basin in Texas.
Oasis reported a net loss attributable to the company of $128.24
million for the year ended Dec. 31, 2019, compared to a net loss
attributable to the company of $35.29 million for the year ended
Dec. 31, 2018.
For the six months ended June 30, 2020, the Company reported a net
loss attributable to the company of $4.40 billion on $554.15
million of total revenues compared to a net loss attributable to
the company of $72.12 million on $1.10 billion of total revenues
for the same period in 2019.
As of June 30, 2020, the Company had $2.62 billion in total assets,
$3.21 billion in total liabilities, and a total stockholders'
deficit of $589.91 million.
On Sept. 30, 2020, Oasis Petroleum Inc. and its affiliates sought
Chapter 11 protection
(Bankr. S.D. Tex. Lead Case No. 20-34771).
The Hon. Marvin Isgur is the case judge.
The Debtors tapped KIRKLAND & ELLIS LLP as counsel; JACKSON WALKER
L.L.P. as co-bankruptcy counsel; TUDOR, PICKERING, HOLT & CO. and
PERELLA WEINBERG PARTNERS LP as investment banker; and ALIXPARTNERS
LLP as financial advisor. KURTZMAN CARSON CONSULTANTS LLC is the
claims agent. PRICEWATERHOUSECOOPERS is the external auditor and
DELOITTE TOUCHE TOHMATSU LIMITED is the tax advisor.
OASIS PETROLEUM: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------------
Lead Debtor: Oasis Petroleum Inc.
1001 Fannin Street
Suite 1500
Houston, TX 77002
Business Description: Headquartered in Houston, Texas, the
Debtors operate an independent
exploration and production company with
a focus on unconventional crude oil and
natural gas development. The Debtors'
primary production and development
activities are located in the Williston
Basin in North Dakota and Montana, with
additional oil and gas properties
located in the Delaware Basin in Texas.
Chapter 11 Petition Date: September 30, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Nine affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Oasis Petroleum Inc. (Lead Debtor) 20-34771
Oasis Midstream Services LLC 20-34772
OMP GP LLC 20-34773
Oasis Petroleum Marketing LLC 20-34774
Oasis Petroleum LLC 20-34775
OMS Holdings LLC 20-34776
Oasis Petroleum North America LLC 20-34777
Oasis Petroleum Permian LLC 20-34778
Oasis Well Services LLC 20-34779
Judge: Hon. Marvin Isgur
Debtors' Counsel: Brian Schartz, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
609 Main Street
Houston, Texas 77002
Tel: (713) 836-3600
Fax: (713) 836-3601
Email: brian.schartz@kirkland.com
- and -
Chad J. Husnick, P.C.
David L. Eaton, Esq.
John Luze, Esq.
300 North LaSalle Street
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: chad.husnick@kirkland.com
david.eaton@kirkland.com
john.luze@kirkland.com
- and -
AnnElyse Scarlett Gains, Esq.
1301 N. Pennsylvania Ave., N.W.
Washington, D.C. 20004
Tel: (202) 389-5000
Fax: (202) 389-5200
Email: annelyse.gains@kirkland.com
Debtors'
Co-Bankruptcy
Counsel: Bruce J. Ruzinsky, Esq.
Matthew D. Cavenaugh, Esq.
Jennifer F. Wertz, Esq.
Vienna F. Anaya, Esq.
JACKSON WALKER L.L.P.
1401 McKinney Street, Suite 1900
Houston, Texas 77010
Tel: (713) 752-4200
Fax: (713) 752-4221
Email: bruzinsky@jw.com
Email: mcavenaugh@jw.com
Email: jwertz@jw.com
Email: vanaya@jw.com
Debtors'
Investment
Bankers: TUDOR, PICKERING, HOLT & CO.
- and -
PERELLA WEINBERG PARTNERS LP
Debtors'
Financial
Advisor: ALIXPARTNERS LLP
Debtors'
Notice,
Claims, &
Solicitation
Agent and
Administrative
Advisor: KURTZMAN CARSON CONSULTANTS LLC
https://www.kccllc.net/oasis/document/list/5219
Debtors'
External
Auditor: PRICEWATERHOUSECOOPERS
Debtors'
Tax
Advisor: DELOITTE TOUCHE TOHMATSU LIMITED
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 Nickolas Lorentzatos, executive vice
president.
A copy of Oasis Petroleum Inc.'s petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/GIWOZ3I/Oasis_Petroleum_Inc__txsbke-20-34771__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. US Bank N. A. 6.875% Bond Due $866,178,605
8 Greenway Plz. Ste 1100 March 2022
Houston, TX 77046
Alejandro Hoyos
Tel: 346-262-3741
Email: alejandro.hoyos@usbank.com
2. US Bank N. A. 6.25% Bond Due $405,548,831
8 Greenway Plz. Ste 1100 May 2026
Houston, TX 77046
Alejandro Hoyos
Tel: 346-262-3741
Email: alejandro.hoyos@usbank.com
3. US Bank N. A. 6.875% Bond Due $312,253,098
8 Greenway Plz. Ste 1100 January 2023
Houston, TX 77046
Alejandro Hoyos
Tel: 346-262-3741
Email: alejandro.hoyos@usbank.com
4. US Bank N. A. 2.625% Convertible $248,392,730
8 Greenway Plz. Ste 1100 Bond Due
Houston, TX 77046 September 2023
Alejandro Hoyos
Tel: 346-262-3741
Email: alejandro.hoyos@usbank.com
5. US Bank N. A. 6.5% Bond Due $44,797,605
8 Greenway Plz. Ste 1100 November 2021
Houston, TX 77046
Alejandro Hoyos
Tel: 346-262-3741
Email: alejandro.hoyos@usbank.com
6. Schlumberger Technology Corp. Trade Debts $1,039,833
121 Industrial Blvd
Sugar Land, TX 77478
Imanol Hernandez
Tel: 281-285-6876
Email: IHernandez11@slb.com
7. Riverbend Oil & Gas VIII, LLC Trade Debts $999,671
500 Dallas Street, Suite 1250
Houston, TX 77002
Randy Newcomer
Tel: 281-779-8670
Email: rnewcomer@rboil.com
8. BV Energy Investments II, LLC Trade Debts $753,885
440 Louisiana St., Suite 900
Houston, TX 77002
Thomas Egleston
Tel: 713-252-2211
Email: te@glendalecap.com
9. Lufkin Industries Trade Debts $625,396
11375 W. Sam Houston Pkwy,
Suite 800
Houston, TX 77031
Brandon Furr
Tel: 281-495-1100
Fax: 281-495-6333
10. MI Swaco Trade Debts $437,849
5950 North Course Dr.
Houston, TX 77072
Joseph Bacho
Tel: 281-998-1815
Fax: 821-988-1859
11. Creedence Energy Services LLC Trade Debts $355,486
5930 16th Ave W
Williston, ND 58801
Kevin Black
Tel: 701-740-7481
Email: kevin.black@creedence-energy.com
12. Mckenzie Energy Partners, LLC Trade Debts $282,037
500 2nd Ave SW
Watford City, ND 58854
Erin White
Tel: 701-213-1059
Email: erin@mckenzieenergypartners.com
13. CTAP LLC Trade Debts $260,187
2585 Trailridge Dr E
Lafayette, CO 80226
Terry Herbst
Tel: 970-467-2758
Email: Therbst@ctapllc.com
14. L & K Electric, LLC Trade Debts $248,552
1155 Dairy Ashford, Suite 450
Houston, TX 77079
Reid Mann
Tel: 701-774-1094
Email: reid.mann@lk-electric.com
15. XTO Energy Inc Trade Debts $241,496
22777 Springwoods Village Pkwy.
Spring , TX 77389
Vinicius Koehler Pierri
Tel: 832-625-9191 Ext. 4547
Email: vinicius.k.pierri@exxonmobil.com
16. Black Hawk Energy Services Inc Trade Debts $233,589
118 84th St W
Willston, ND 58801
Thom White
Tel: 307-272-1954
Email: thom.white@steelteams.com
17. DNOW L.P. Trade Debts $221,641
7402 North Eldridge Parkway, Texas
Houston, TX 77041
Kelsey King
Tel: 281-823-4019
Email: Kelsey.King@dnow.com
18. West Dakota Water LLC Trade Debts $206,801
5015 Sunrise Dr
Williston, ND 58801
Jeffrey White
Tel: (701) 580-1512
Email: jwhite@jmacresources.com
19. Liberty Lift Solutions LLC Trade Debts $204,896
16420 Park Ten Place, Ste 300
Houston, TX 77084
Robert Hardie
Tel: 713-575-2171
Email: robert.hardie@libertylift.com
20. Patriot Pump LLC Trade Debts $189,075
5817 Baldwin Ln
Williston, ND 58801
Russell Stevens
Tel: 918-706-9550
Email: rstevens@usrodco.com
21. KLX Energy Services LLC Trade Debts $180,455
3040 Post Oak Blvd
Houston, TX 77056
Douglas Barnette
Tel: 713-594-8464
Email: douglas.barnette@klxenergy.com
22. Continental Resources Inc Trade Debts $180,440
20 N. Broadway
Oklahoma City, OK 73102
Rory Sabino
Tel: 405-234-9620
Email: Rory.Sabino@CLR.com
23. Point Energy Partners Water, LLC Trade Debts $147,806
300 Throckmorton St., Suite 620
Fort Worth, TX 76102
John Sabia
Tel: Office: 682-302-3451
Tel: 817-701-6289
24. Weatherford US LP Trade Debts $140,410
2000 Saint James Pl
Houston, TX 77056
Krystal Comeaux
Tel: 337-552-1811
Email: krystal.comeaux@weatherford.com
25. Edgen Murray Corporation Trade Debts $135,835
10370 Richmond Ave, Suite 900
Houston, TX 77042
Roland Baylous II
Tel: 281-268-7200
Email: roland.baylous@edgenmurray.com
26. Northern States Fishing Co Inc Trade Debts $127,419
1004 4Th St Sw
Watford City, ND 58854
Billy Carlson
Tel: 701-842-3350
Email: bcarlson@northernstatesfishing.com
27. Felix Water, LLC Trade Debts $118,836
1530 16Th St.
Suite 500
Denver, CO 80202
Justin Pratt
Tel: 720-974-2093
Fax: 720-974-2093
Email: justinp@felix-energy.com
28. Stateline Services, Inc Trade Debts $116,856
501 48th St. W
Williston, ND 58801
Kenny Brown
Tel: 701-572-1832
Email: k.brown@statelineenergyservices.com
29. Astro Chem Lab Inc Trade Debts $115,762
4102 Second Ave. W.
Williston, ND 58801
Christina Jungels
Tel: 701-572-7355
Email: christinaj@astrochemlab.com
30. Bedrock Petroleum Trade Debts $115,636
Consultants, LLC
800 Gessner Road, Suite 800
Houston, TX 77024
Paul Comaniuk
Tel: 403-899-0278
Email: paul.comaniuk@nesgt.com
OCTAVE MUSIC: S&P Affirms 'B-' ICR; Outlook Negative
----------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating and
issue-level rating on the senior secured credit facility on The
Octave Music Group Inc., and removed them from CreditWatch, where
S&P placed them with negative implications on March 19, 2020. The
outlook is negative.
S&P said, "Our affirmation of the 'B-' issuer credit rating and
negative outlook reflect the partial return of revenues in Octave's
Touchtunes segment, which along with cost savings allowed the
company to limit its cash burn. However, we believe there remains
substantial risk to cash flows and liquidity due to the uncertainty
of an economic recovery over the next few quarters.
"Foot traffic in bars and restaurants has improved in some areas
since the onset of the pandemic, but we expect revenue performance
to remain weak until 2021. In the first quarter of 2020, U.S.
cities and states enacted substantial restrictions on public
gatherings to limit the spread of the coronavirus. This
substantially damaged Octave's revenues, which are exposed to
retail, bar, and restaurant clients. While we expect large
population centers such as New York and California will be the last
to fully reopen, these restrictions have progressively eased in
most cities and states in recent months. As a result, gross coinage
for Octave's Touchtunes products have returned to roughly 70% of
prior-year levels. The return of patronage will allow Octave to
improve leverage and cash flow. However, there are substantial
uncertainties such as the risk of increasing restrictions due to
worsening COVID-19 infections, reduced patronage during winter
months, and the timing of a potential vaccine.
"Our negative outlook reflects Octave's direct exposure to lower
foot traffic in bars and restaurants that utilize its Touchtunes
products due to government limitations on social gatherings and
changing consumer preferences during the COVID-19 pandemic. While
revenue has stabilized in some areas in the U.S., there remains
substantial risk that further disruptions could damage operating
performance and pressure liquidity over the next 12 months such
that we view the capital structure as unsustainable.
"We could lower our rating on Octave if we believe business
disruptions from the pandemic will create additional operating
challenges and liquidity pressures such that we view the capital
structure as unsustainable. This would most likely occur if
COVID-19 cases resurge, state and local governments return to more
stringent social-distancing measures, and consumer preferences
change such that foot traffic in bar and restaurants that utilize
Octave's services substantially falls.
"We could revise the outlook back to stable if the company
stabilizes and increases revenues, EBITDA, and cash flows such that
FOCF to debt nears 5%, sufficient to comfortably cover its fixed
charges. We would also require Octave to maintain covenant margin
of compliance over 15%. This scenario would most likely occur with
an economic recovery and reduced threat from a resurgence of
COVID-19 infections, such that consumer foot traffic in restaurants
and bars that utilize Octave's services approaches 2019 levels."
P8H, INC: Bankruptcy Trustee Sues Former Board Member
-----------------------------------------------------
Maximiliano Duron of Art News reports that the bankruptcy trustee
for online marketplace Paddle8 sued a former member of its board of
directors, John Textor, for disregard of duty.
Earlier in 2020, just as the coronavirus pandemic was forcing much
of the world into lockdown, the online marketplace Paddle8, which
has been used by many nonprofits to conduct charity art auctions,
filed for Chapter 11 Bankruptcy protection. That news came after
one nonprofit sued to get back money that was allegedly owed to it,
and in the months since more lawsuits have been filed against the
organization and some of its key players.
Now, a new lawsuit has been filed in U.S. Bankruptcy Court,
Southern District of New York, by the company’s Chapter 11
Bankruptcy trustee, Megan E. Noh, against an alleged former member
of Paddle8's board of directors, John Textor, and companies with
which he has been affiliated. The suit alleges that he displayed "a
reckless disregard for his duties" by putting the interests of his
companies ahead of those of the stakeholders of Paddle8, which
includes its creditors. The lawsuit is seeking $6 million in
damages plus interest from Textor and $1 million in damages plus
interest from the other companies named in the lawsuit.
In an email to ARTnews, Textor said, "Neither I nor the companies
mentioned have been involved in quite some time, though it is
standard practice for a trustee to cast a wide net in filing
speculative claims for recovery."
In a statement sent to ARTnews, Noh said, "I continue to discharge
my fiduciary duty to maximize the value of the bankruptcy estate of
[Paddle8], using all rights and remedies available, including in
connection with the allegations in our complaint."
According to the lawsuit, Textor was elected to Paddle8's board of
directors in November 2019 through his role as a senior executive
and director of a company called FaceBank (since renamed fuboTV
Inc. and previously known as Pulse Evolution Group, Inc.). The
suit says that FaceBank is wholly owned by a Swiss joint-stock
company named FBAG (and previously doing business as Oakley Capital
International AG).
In his email, Textor disputed the lawsuit's claims that he was ever
a director at Paddle8. "I was an employee of a lender that was
also seeking recovery," he said. "None of the parties named had
any opportunity to influence the outcome at [Paddle8], which was
certainly insolvent prior to our involvement. I expect the claims
will be dropped in the very near term."
In March 2019, according to the lawsuit, Oakley/FBAG lent Paddle8
$10 million. Ultimately, after various transactions, FaceBank owned
51 percent of Paddle8's stock through one of its subsidiaries.
While Textor was a board member of Paddle8, he was also "the
individual having primary responsibility for FaceBank's direct and
indirect investment" in Paddle8, the lawsuit says. (Textor resigned
from Paddle8's board shortly before it filed a petition for
bankruptcy protection, according to the suit.)
Noh was named a Trustee in the case at the beginning of May because
all of Paddle8's board members had resigned by early March 2020.
In the lawsuit, Noh alleges that, "as a result of the deteriorating
financial results, [Paddle8's] board of directors refused to
approve a budget for the company for the year 2020." By the
beginning of the year, the lawsuit goes on to allege, Paddle8 had
fallen behind on making payments to the organizations it had
partnered with to sell charity auction items.
The lawsuit alleges that Textor "engaged in acts of gross
mismanagement and disloyalty" that kept the company from paying its
creditors, including not accessing a line of credit in order to
does so, "because such courses of action were adverse to his
personal financial interests." It also accuses him of having
"knowingly caused or permitted the misappropriation of funds
generated from [Paddle8's] online auctions and storefront sales,
including charity auctions, to be used to pay the [company's]
operating expenses" instead of paying back nonprofits who were owed
money.
In his email, Textor denied that allegation, saying, "We made it
clear from the day we showed up that we wanted no collection of our
secured debt, if artists and nonprofits had not first achieved full
recovery. ... We knew the charities relied on those funds more than
we did, and we wanted to see a perfect resolution."
About Paddle8
Paddle8 was founded in 2011 by Alexander Gilkes, Aditya Julka, and
Osman Khan. It is one of the first online auction house that
specialized in the art world's "middle market." It announced a
high-profile merger with the Berlin-based online auction house
Auctionata in 2016, but the partnership was dissolved in 2017 when
Auctionata filed for insolvency.
P8H, Inc., doing business as Paddle 8, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No.
20-10809) on March 16, 2020. At the time of the filing, the Debtor
was estimated to have assets of less than $50,000 and liabilities
of between $50,001 and $100,000. Judge Stuart M. Bernstein
oversees the case. The Debtor is represented by Kirby Aisner &
Curley, LLP.
Megan E. Noh is the Debtor's Chapter 11 trustee. The trustee is
represented by Pryor Cashman, LLP.
POTOMAC CONSTRUCTION: Sale of DC Property to BWF Trust Approved
---------------------------------------------------------------
Judge Elizabeth L. Gunn of the U.S. Bankruptcy Court for the
District of Colorado authorized Potomac Construction Flats, LLC's
sale of the real property located at 1412 15th Street NW,
Washington, DC to BWF Trust EB, LLC or its assigns, pursuant to the
terms of the Debtor's Confirmed Plan of Reorganization.
A hearing on the Motion was held on Sept. 15, 2020.
The sale is free and clear of any lien claim, or interests or
encumbrances.
The making and delivery of an instrument of transfer under the Plan
and the Order is exempt from taxation under any law imposing a
document recording tax, stamp tax, conveyance fee, intangibles or
similar tax, mortgage tax, real estate transfer tax, sales or use
tax, mortgage recording tax, Uniform Commercial Code filing or
recording fee, or similar tax or government assessment.
The Debtor is authorized and directed: (i) to sell the Real
Property to the Purchaser upon the terms and conditions of the Plan
and the Asset Purchase Agreement (ii) to execute and deliver a
Warranty Deed conveying the Real Property to the Purchaser, along
with any other documents reasonably required by the title company,
in escrow, to be deposited with Palisades Title Company 4530
Wisconsin Ave. NW Suite 300 Washington, DC 20016, Attention Steven
M. Buckman, within 24 hours following entry of the Order to be held
by the escrow
agent pending the closing of the sale pursuant to the Plan and the
Order.
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.
On Aug. 31, 2020, the Court confirmed the Debtor's Plan of
Reorganization.
Q'MAX AMERICA: Trustee's De Minimis Transaction Procedures Approved
-------------------------------------------------------------------
Judge Christopher Lopez of the U.S. Bankruptcy Court for the
Southern District of Texas authorized the amended procedures
proposed by Christopher J. Murray, the duly appointed chapter 7
Trustee for the chapter 7 estates of the Q'Max America, Inc. and
affiliates, in connection with the sales of de minimis assets.
The De Minimis Transaction Procedures are:
a. Non-Noticed Transactions: For property that, in the
Trustee's good faith determination, has a fair market value of less
than $500,000 and is proposed to be sold in a transaction, or in a
series of related transactions, where no one piece of property
exceeds $500,000:
i. Business Judgment Standard: The Trustee is authorized
to consummate the sale of such property without further order of
the Bankruptcy Court or notice to any party if the Trustee
determines in a reasonable exercise of his business judgment that
such a sale is in the best interest of the Debtors' estates;
provided, that to the extent reasonably practicable, the Trustee
will provide e-mail notification to counsel to HSBC Bank Canada and
KPMG three business days prior to the consummation of such sale.
ii. Sale Free and Clear: Any such sale of property will
be free and clear of all Liens, with any valid and properly
perfected Liens attaching only to the sale proceeds.
iii. Non-Noticed Transaction Reports: Within 30 days of
each calendar quarter commencing with the period ending Sept. 30,
2020, the Trustee will file with the Bankruptcy Court a report
summarizing any Non-Noticed Transactions that were completed
pursuant to the De Minimis Transaction Procedures during the
immediately preceding quarter, and serve it on the Notice Parties.
b. Noticed Transactions: For property that in the Debtors'
good faith determination has a fair market value equal to or
greater than $500,000 and less than or equal to $1 million, and is
proposed to be sold in a transaction, or in a series of related
transactions:
i. Business Judgment Standard: The Trustee is authorized
to consummate such a sale without further order of the Court,
subject to the procedures, if the Trustee determines in a
reasonable exercise of his business judgment that such a sale is in
the best interest of the Debtors' estates.
ii. Sale Free and Clear: Any such sale will be free and
clear of all Liens, with any valid and perfected Liens attaching
only to the sale proceeds.
iii. Transaction Notice: The Trustee shall, at least
seven days prior to closing such sale, serve the Transaction Notice
to the Notice Parties.
iv. Objection Procedures: Parties objecting to a Noticed
Transaction must file and serve a written objection no later than
five business days after the date the Trustee serve the relevant
Transaction Notice.
v. No Objection: If no objection to a Noticed Transaction
is timely filed by any of the Notice Parties within five business
days after service of such Transaction Notice, the Trustee is
authorized to immediately consummate such Noticed Transaction.
vi. Unresolved Objections: If a timely objection is filed
and not withdrawn or resolved, the Trustee will file a notice of
hearing to consider the unresolved objection, and such hearing will
be held on an expedited basis. If such objection is overruled or
withdrawn, or if the sale of De Minimis Assets is specifically
approved by further order of the Court.
c. Sale Pursuant to Motion: For property that, in the
Trustee's good faith determination, has a fair market value greater
than $1 million, and is proposed to be sold in a transaction, or in
a series of related transactions, the Trustee will ask authority to
sell such property pursuant to a motion and in accordance with the
Bankruptcy Code, Bankruptcy Rules, and the Bankruptcy Local Rules.
De Minimis Transactions will be deemed authorized pursuant to the
terms of this Order and no further or additional waivers of the
14-day stay of Bankruptcy Rule 6004(h) will be required for the
Trustee to consummate any De Minimis Asset Transaction, subject to
compliance with the De Minimis Transaction Procedures.
Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions
of the Order are immediately effective and enforceable upon its
entry.
The bankruptcy case is In re Q'Max America, Inc., (Bankr. S.D. Tex.
Case No. 20-60030 (CML). Christopher J. Murray is the duly
appointed chapter 7 Trustee for the chapter 7 estate.
RALPH MARRA: $260K Sale of RJRM's Hoosick Falls Property Approved
-----------------------------------------------------------------
Judge Michael G. Williamson of the U.S. Bankruptcy Court for the
Middle District of Florida authorized Ralph Brian Marra's sale of
RJRM Properties, LLC's real property consisting of adjoining
parcels, identified on the Residential Purchase Contract, located
at Old Route 22, Hoosick Falls, New York to Mar Indico, LLC for
$260,000, pursuant to their Residential Purchase Contract.
A hearing on the Motion was held on Aug. 26, 2020 at 11:00 a.m.
The Real Property consists of approximately 300 acres.
The sale is free and clear of all liens, claims, interests, and
encumbrances.
Any necessary recording fees, taxes, or document stamps will be
paid at closing. The Debtor will deposit all other proceeds of the
sale of the Real Property into the trust account of the Debtor's
counsel where the proceeds will remain until further order of the
Court. The Buyer broker fees and transactional attorney fees will
be paid subject to 11 U.S.C. Section 330.
The Debtor will provide the Office of the United States Trustee the
closing statement and bill of sale relative to the sale of the Real
Property within 14 days of the closing of the sale.
Ralph Brian Marra sought Chapter 11 protection (Bankr. M.D. Fla.
Case No. 19-02370) on March 19, 2019. The Debtor tapped Steven M.
Berman, Esq., at Shumaker, Loop & Kendrick, LLP as counsel.
REMINGTON OUTDOOR: Furloughs 600 Employees in Ilion, NY
-------------------------------------------------------
Tom Coyne of CNY Homepage reports that 600 or so employees at
Remington Arms are being furloughed from the gun manufacturing
plant in Ilion, New York.
Ilion Mayor Brian Lamica confirmed the furloughs.
The local gun making operation is owned by the Remington Outdoor
Company. The company filed for Chapter 11 bankruptcy in July of
this year. It was the second bankruptcy filing for the company
since 2018.
Remington Arms was purchased in 2007 by Cerberus Capital
Management, a private equity company. In 2015, Cerberus expanded
the company by renovating a former auto making plant in Huntsville,
Alabama. Finances associated with Cerberus and the holding company
it created to purchase Remington led to the 2018 Chapter 11 filing.
As a result of the 2018 bankruptcy, the ownership of Remington Arms
was transferred to its debt holders, which included investors
Franklin Resources and JP Morgan Chase & Company. In that
bankruptcy Remington also took $775 million dollars of debt off its
books.
Still, Remington had to deal with high interest debt and the
uncertainty of a high profile lawsuit stemming from the 2012 Sandy
Hook shooting where a Remington Bushmaster rifle was used to kill
20 people, most of the victims being school children.
According to the Wall Street Journal, Franklin Resources has lost
about $250 million dollars in its Remington operation. Franklin is
the majority owner of Remington Outdoor. The decision to file a
second Chapter 11 bankruptcy came from Remington executives.
Franklin has the power to influence the auction for the company,
that is going on now.
At one time, this past summer, there were talks between Remington
and the Navajo Indian Nation for the purchase of the company. Those
talks fell through.
Earlier this month, a bid of $65 million dollars was made by JJE
Capital Holdings to purchase Remington Outdoor's ammunition
operations. The status of that sale is contingent of the auction
that is ongoing. A court hearing on the bankruptcy auction is set
for Tuesday morning in Alabama.
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.
Remington Outdoor Company and its affiliates 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 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.
ROBERT D. SPARKS: $108K Sale of State Line Place to Wares Approved
------------------------------------------------------------------
Judge Robert L. Jones of the U.S. Bankruptcy Court for the Northern
District of Texas authorized Robert Dial Sparks' sale of his tract
of farm land more particularly described as the Northwest Quarter
of Section 25, Block "B," Capitol Syndicate Subdivision, Panner
County, Texas ("State Line Place") to Justin and Mikayla Ware for
$107,800.
A hearing on the Motion was held on Sept. 23, 2020 at 1:30 p.m.
From the $107,800 sales price of the State Line Place, there will
be deducted therefrom the cost of an Owner's Policy of Title
Insurance and the usual and customary closing costs, the sale to be
free and clear of liens with the net proceeds to be distributed to
Mr. Sparks and deposited in the separate DIP account into which the
sales proceeds from the sale of the Rundell Place have been
deposited and into which the sales proceeds from any and all other
sales of property, if any, will be deposited, said proceeds to be
disbursed only after Motion to and Order by the Court.
Robert Dial Sparks sought Chapter 11 protection (Bankr. N.D. Tex.
Case No. 20-50079) on May 1, 2020. The Debtor tapped Byrn R. Bass,
Jr., Esq., as counsel.
RUBIE'S COSTUME: Court Approves $140M Sale to Atalaya Unit
----------------------------------------------------------
Daniel Gill Of Bloomberg Law reports that bankrupt Rubie's Costume
Co. won court approval of an asset sale that would raise about $140
million to pay off much of creditors' claims.
The approval Thursday, September 24, 2020, by Judge Alan S. Trust
of the U.S. Bankruptcy Court for the Eastern District of New York
allows Rubie's to close the deal that transfers the company to
Rubies II LLC.
Joel Weinshanker, chairman of the National Entertainment
Collectibles Association Inc., and funds managed by Atalaya Capital
Management will own 70% of Rubies II, according to court filings.
About Rubie's Costume Company
Rubie's Costume Company Inc. is a distributor, manufacturer and
designer of costume and party-related accessories that serve over
2,000 retail accounts. It also maintains licensing partnerships
with top studios like Nickelodeon, Warner Bros, Lucasfilm, Marvel,
and Disney for products inspired by WWE, Ghostbusters, Stranger
Things, DC Comics, JoJo Siwa, Harry Potter, and Star Wars.
Rubie's Costume Company and its affiliates sought Chapter 11
protection (Bankr. E.D.N.Y. Lead Case No. 20-71970) on April 30,
2020. Rubie's Costume was estimated to have $100 million to $500
million in assets and $50 million to $100 million in liabilities as
of the filing.
Judge Alan S. Trust oversees the cases.
Debtors have tapped Meyer, Suozzi, English & Klein, P.C. and Togut,
Segal & Segal LLP as bankruptcy counsel; BDO USA, LLP as
restructuring advisor; and SSG Capital Advisors LLC as investment
banker. Kurtzman Carson Consultants is the claims agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on May 18, 2020. The committee is represented by Arent
Fox, LLP.
RYAN ENVIRONMENTAL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Ryan Environmental, LLC
DBA Ryan Energy Services
DBA Ryan Pipeline Services
DBA Ryan Corrosion Services
5793 W. Veterans Memorial Hwy, Ste 101
Bridgeport, WV 26330
Business Description: Ryan Environmental, LLC offers environmental
consulting, remediation, cleaning services,
emergency spill response, hydrocarbon lab
services, corrosion services, well services,
general roustabout, and both steel and poly
pipeline construction.
Chapter 11 Petition Date: September 29, 2020
Court: United States Bankruptcy Court
Northern District of West Virginia
Case No.: 20-00738
Debtor's Counsel: Martin P. Sheehan, Esq.
SHEEHAN & ASSOCIATES, P.L.L.C.
1 Community St., Ste 200
Wheeling, WV 26003
Tel: 304-232-1064
Email: sheehanbankruptcy@wvdsl.net
Total Assets: $6,572,062
Total Liabilities: $16,361,068
The petition was signed by Clayton Rice, managing member.
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/ELUAY5A/Ryan_EnvironmentalLLC__wvnbke-20-00738__0001.0.pdf?mcid=tGE4TAMA
SABRE INDUSTRIES: S&P Upgrades ICR to 'B+' on Reduced Leverage
--------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Texas-based
utilities and telecommunications structures manufacturer Sabre
Industries Inc. to 'B+' from 'B', and raised its issue-level and
recovery ratings on Sabre's term loan to 'BB-' and '2' from 'B' and
'3'.
S&P said, "We expect Sabre Industries to maintain debt leverage
below 4x, and maintain more conservative financial policies. We
forecast the company to grow its EBITDA (Sabre is privately owned
and does not release financials), such that it will maintain debt
leverage below 4x and closer to 3x for the foreseeable future.
Sabre's credit ratios have strengthened in recent years on a
combination of debt reduction and increased earnings. The company
prepaid $31 million on its $445 million term loan during its fiscal
first quarter (ending July 31), bringing S&P Global Ratings'
adjusted leverage down to 3x on a rolling 12-month basis. However,
given the company is still owned by a private equity financial
sponsor we cannot rule out the possibility Sabre increases leverage
through various actions such as raising debt to fund acquisitions
or dividends. Although, we do not see this as likely given the
sponsor's less aggressive fiscal policy since it purchased Sabre in
April 2019.
"We expect Sabre to continue to improve its profitability and
strengthen its business profile. EBITDA margins (not disclosed)
are now solidly at the higher end of the range we consider average
for S&P rated building and construction materials manufacturers and
are considerably higher than levels of several years ago. Higher
volumes have lifted capacity utilization, which in turn has boosted
profitability. Industry fundamentals for Sabre remain solid.
Sabre's utility segment should continue to grow as utility
companies and municipalities continue to invest in overburdened and
outdated electrical grid infrastructure. We expect stable demand in
telecom over the next 12 months because of the industry's ongoing
investment in communication capacity, as well as the ongoing shift
to 5G mobile networks. Further, the critical infrastructure
markets, such as energy and communications, in our view are
relatively less susceptible to the present recession due to
long-term government and municipality spending plans.
"Sabre's performance has remained resilient through the COVID-19
pandemic, given earnings stability provided by contracted backlog
orders and alliance partnerships. Although we expect minimal
revenue growth this year compared to last year's 5% increase, an
overall slowdown in infrastructure and construction spending will
be offset by the company's growing backlog of purchase orders.
Sabre maintains alliance partnerships with some of the largest
utility companies in the U.S. that provide repeatable and
consistent work. Approximately 60% of the company's sales are
derived from its utility segment, which has a backlog of contracted
purchase orders stretching out six to 12 months. The company's
telecom backlog is strong as well, but visibility is less clear,
lasting about a quarter at a time. These contracts provide margin
stability. Many have been shifting toward more long-term nature,
compared to one-off deals. These arrangements have helped EBITDA
margins to grow at nearly a 20% compound annual growth rate over
the last three years.
"The stable outlook reflects our expectation that leverage will
remain below 4x through our forecast period, absent any debt-funded
financial sponsor activities. The company's strong order book,
solid industry fundamentals, and recent debt reduction frame our
leverage forecast."
S&P could lower its ratings on Sabre if the company sustains debt
leverage above 4x on an ongoing basis. This could occur if:
-- A large debt-financed acquisition, capital improvement, or
dividend occurs; or
-- A severe and prolonged economic shock disrupts construction and
telecommunication spending.
S&P could upgrade Sabre over the next 12 months if:
-- The company grows meaningfully in size and scale while
maintaining its current EBITDA margins and credit ratios; and
-- The financial sponsor continues to maintain a conservative
financial policy or begins to reduce its ownership in Sabre.
SACRAMENTO CITY UNIFIED SCHOOL: S&P Affirms BB+ SPUR on Rev. Bonds
------------------------------------------------------------------
S&P Global Ratings affirmed its 'BBB' long-term rating and
underlying rating (SPUR) on Sacramento City Unified School
District, Calif.'s existing general obligation (GO) bonds and its
'BB+' SPUR on the district's lease revenue bonds. The outlook is
negative.
S&P said, "The rating on the lease revenue bonds is two notches
below our view of the district's general creditworthiness, because
we believe the district's liquidity is stressed, calling into
question its ability to appropriate lease payments. Also supporting
our assessment is the district's projection that it will be cash
insolvent in its general fund by May 2021, although we understand
that the district will likely use interfund borrowing to continue
operating beyond this date."
"In our view, the district's trajectory remains significantly
negative despite producing an operating surplus in fiscal 2020,"
said S&P Global Ratings credit analyst Tim Tung. S&P said, "We
understand that the operating surplus was driven primarily by
reduced expenditures related to the one-time, unforeseen
circumstances related to COVID-19, rather than through intentional
budgetary adjustments to address the structural deficit. We also
view this favorable operating result as offset by recessionary
pressures on the local economy, increased liquidity pressure driven
by substantial state aid deferrals in fiscal 2021, and heightened
uncertainty regarding state education funding if the state
continues to face budgetary challenges in fiscal 2022. We note that
the district's oversight body--the Sacramento County Office of
Education--has rejected the district's previous multiyear budgets,
because they failed to meet the state-mandated 2% minimum reserve
target in each year, and we expect that this pattern will continue
until the district is able to adequately adjust its cost
structure."
S&P said, "Despite more than a year passing since our last review,
we understand that there have not been any changes to the
district's labor agreements related to wages and benefits, which we
have previously noted as the primary driver behind the district's
projected insolvency by May 2021. The district reports that it met
with its teachers union, Sacramento City Teachers Association
(SCTA), during spring 2020 for two negotiating sessions on wages
and benefits before pivoting to discussing adapting work conditions
as necessitated by social distancing and efforts to reduce the
spread of COVID-19. Based on the limited progress made since our
last review and the track record of contentious negotiations
between the district and SCTA--including district management
walking out of a Jan. 9, 2019, meeting with its teachers union
citing an unproductive dialogue, and SCTA not responding to nine
consecutive requests for a date to commence negotiations--we
believe it is unlikely that a breakthrough will be made in these
negotiations absent imminent insolvency. We also do not rule out
the possibility that the district and SCTA are not able to reach an
agreement in a timely manner, and the district is forced to request
an emergency loan to stave off insolvency."
"The negative outlook reflects our belief that, absent significant
reductions during the next fiscal year, the district will face cash
insolvency by May 2021, will continue to experience budget deficits
with worsening operating results, and could experience negative
fund balances by the close of fiscal 2022," Mr. Tung added. "The
district's lack of a specific and credible plan to restore balance
to the budget also contributes to our negative outlook on the
district credit rating."
Should the district fail to make significant expenditure reductions
or fail to secure emergency funding from the state, leading S&P to
believe that cash insolvency or a negative fund balance is
imminent, it could lower the rating.
Should the district's operations stabilize, resulting in
stable-to-positive fund balance growth, or if it secures additional
assistance from the state, S&P could revise the outlook to stable.
SHILOH INDUSTRIES: Court Gives Green Light on its Ch. 11 Sale Plan
------------------------------------------------------------------
Jeff Montgomery of Law360 reports that auto parts supplier Shiloh
Industries received a green light for its Delaware Chapter 11
stalking horse sale plan, with an affiliate of private equity firm
MiddleGround Capital LLC tapped as the bidder-to-beat with a $218
million offer for the business.
The decision positioned the company, which produces motor vehicle
frames and other components for cars and trucks, to begin a more
than month-long sale effort for the Ohio-based manufacturer.
MiddleGround affiliate Grouper Holdings LLC will serve as stalking
horse for the bidding, which has a qualifying bid deadline of Oct.
26, to be followed by an auction on Oct. 29 if warranted and
disclosure of the winning bidder on Oct. 30.
D. Reid Snellenbarger, a managing director and shareholder at
Houlihan Lokey Capital, Inc. and restructuring adviser to Shiloh,
said that Grouper's offer to serve as bidder-to-beat in the case
requires payment of a $7.1 million "break-up" fee were the company
to choose another buyer, as well as payment of up to $1.4 million
in expenses.
"Importantly, the Stalking Horse bidder intends to continue
operation of the debtors' business as a going-concern and, as a key
part of the Stalking Horse agreement, has agreed to offer
employment to all or substantially all of the sellers' existing
employees," Snellenbarger said.
The break-up fee and expense agreement amount to 3.9% of the $218
million offer, Snellenbarger said, with both seen as customary in
Chapter 11 sales.
Shiloh sought bankruptcy protection on Aug. 31 with $563.4 million
in debt, reporting that the business had been shaken by a
combination of factors, including international trade friction and
production downturns associated with global economic troubles.
Disappointing results from newly launched initiatives and plant
acquisitions, as well as COVID-19-related plant shutdowns, also put
the company on a downward spiral.
In a case-opening declaration in August, Jeffrey Ficks, Shiloh's
financial adviser and a turnaround specialist with Ernst & Young
LLP, said that Shiloh and its affiliates were directly impacted by
the COVID-19 pandemic, with more than half of the debtors' plants
being entirely closed starting in early April 2020 and continuing
into May 2020.
Shiloh explored a range of sale or refinancing opportunities before
filing for Chapter 11, Snellenbarger said, and received 17
indications of interest, including five financing offers, with the
rest involving various acquisition proposals.
None of the refinancing offers, however, would have made the new
debt fully junior to that held by Shiloh's current prepetition
lenders.
"In Houlihan's judgment, in consultation with the debtors and their
other advisors, the financing/recapitalization proposals submitted
were not executable and/or would require the prepetition lenders'
consent," Snellenbarger said.
Current lenders, he added, were unlikely to accept the "meaningful"
impairment of their claims that would be needed.
The offer from Grouper Holdings includes an agreement to hire
Shiloh's employees immediately after the deal's closing, with jobs
to be retained at pay and benefits comparable to Shiloh's rates for
at least six months.
Current schedules call for a sale hearing on Nov. 10, 2020 with the
deal to close by Dec. 15, 2020.
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.
The company has 3,400 employees and operates a network of
manufacturing and technical centers in Asia, Europe and North
America.
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.
SHILOH INDUSTRIES: Oct. 29 Auction of All Assets Set
----------------------------------------------------
Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for
the District of Delaware authorized the bidding procedures proposed
by Shiloh Industries, Inc. and affiliates in connection with the
sale of substantially all assets to Grouper Holdings, LLC for an
aggregate purchase price of approximately $218 million, subject to
overbid.
The Debtors, in the exercise of their reasonable business judgment
and their fiduciary duties, are authorized to pay the Termination
Payment in accordance with the Stalking Horse Agreement without
further order of the Court.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 26, 2020 at 4:00 p.m. (ET)
b. Initial Bid: Each bid submitted in connection with the
Assets that are the subject of the Stalking Horse Bid must either
(a) (i) be a bid for all of the Stalking Horse Assets in the
Stalking Horse Bid and (ii) exceed the cash purchase price in the
Stalking Horse Bid (taking into account any working capital
adjustment under the Stalking Horse Agreement), plus any applicable
Termination Payment and the applicable Minimum Overbid, which for
the purpose of submitting a Qualified Bid by the Bid Deadline will
be $500,000; or (b) propose an alternative transaction that, in the
Debtors' reasonable business judgment, provides higher or better
terms than the Stalking Horse Bid, taking into account, among other
things, any applicable Termination Payment.
c. Deposit: 10% of the proposed purchase price
d. Auction: The Auction, if required, will be conducted on
Oct. 29, 2020 at 10:00 a.m. (ET), either (i) at the Cleveland
office of Jones Day, located at North Point, 901 Lakeside Avenue,
Cleveland, Ohio 44114-1190, or (ii) virtually or at such other
date, time or location as designated by the Debtors, after
consulting with the Consultation Parties. If the Debtors conduct
the Auction virtually, the Debtors will provide instructions
setting forth how to attend the Auction to the participants and
other attendees via electronic mail.
e. Bid Increments: After consulting with the Consultation
Parties, the Debtors will announce 24 hours before the Auction the
minimum required increments for successive Qualified Bids (in any
event an amount not less than $500,000, except in the case of a
Partial Bid, for which only the aggregate amount of combined
Partial Bids for an Auction Package must not be less than
$500,000).
f. Sale Hearing: Nov. 10, 2020 at 2:00 p.m. (ET)
g. Sale Objection and Cure Objection Deadline: Oct. 26, 2020
at 4:00 p.m. (ET)
h. Closing: Dec. 15, 2020
i. The Bidding Procedures permit credit bidding in accordance
with the terms of the DIP Orders.
Within one day after the conclusion of the Auction, the Debtors
will file with the Court, serve on the Sale Notice Parties, and
cause to be published on the Prime Clerk Website, the Notice of
Auction Results. The Supplemental Sale Objection Deadline is (i)
Nov. 6, 2020 or (ii) five days after the Auction commences.
The Sale Notice is approved, and no other or further notice of the
proposed sale of the Assets, the Auction, the Sale Hearing, the
Sale Objection Deadline, or the Supplemental Sale Objection
Deadline will be required if the Debtors serve and publish the Sale
Notice in the manner provided in the Bidding Procedures and the
Order.
By no later than four business days after the entry of the Order,
the Debtors will file with the Court, serve on the Sale Notice
Parties, and cause to be published on the Prime Clerk Website, the
Sale Notice. Within four business days after the entry of the
Order, the Debtors will cause the information contained in the Sale
Notice to be published once in the national edition of USA Today
and once in the Local Publications.
The Assumption and Assignment Notice is approved, and no other or
further notice of the Debtors' proposed Cure Costs with respect to
Contracts listed on an Assumption and Assignment Notice is
necessary or required. By no later than four business days after
the entry of the Order, the Debtors will file with the Court, serve
on the applicable Counterparties (and the counsel, if known), and
cause to be published on the Prime Clerk Website, the Assumption
and Assignment Notice. The Adequate Assurance Objection Deadline
is (i) Nov. 6, 2020 or (ii) five days after the Auction commences.
Notwithstanding anything to the contrary, the Order will not
prejudice any rights or objections of FCA US LLC, Ford Motor Co.,
Honda of America Mfg., Inc., General Motors LLC, BMW Manufacturing
Co. LLC and Mercedes-Benz U.S. International, Inc., and in each
case, its respective subsidiaries and affiliates ("OEMs"), and each
OEM's tiered suppliers that use or incorporate goods or services
supplied by any of the Debtors and all such rights and objections
are expressly reserved as to any matters related to the Sale
Transaction, the Sale, and any Sale Order, and any such objections
may be raised until the Supplemental Sale Objection Deadline.
Notwithstanding the applicability of any of Bankruptcy Rules
6004(h), 6006(d), 7062, 9014, or any other provisions of the
Bankruptcy Rules or the Local Rules stating to the contrary, the
terms and provisions of the Order will be immediately effective and
enforceable upon its entry, and any applicable stay of the
effectiveness and enforceability of the Order is waived.
A copy of the Agreement and the Bidding Procedures is available at
https://tinyurl.com/y539og87 from PacerMonitor.com free of charge.
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.
STEPHEN GOLDBERG: $1.5M Sale of Clarksville Property to Allens OK'd
-------------------------------------------------------------------
Judge David E. Rice of the U.S. Bankruptcy Court for the District
of Maryland authorized Stephen Bruce Goldberg's sale of the real
property and improvements located at 12453 Watkins Bridge Lane,
Clarksville, Maryland to Erin and John Allen for $1.5 million.
The sale is free and clear of liens pursuant to the terms of their
contract.
The Debtor is authorized to make the following distributions from
the proceeds of sale at settlement: 1) payment of all cost
associated with settlement, including transfer taxes and
recordation charges; 2) payment of $90,395 to the real estate
agents in consideration of their commission and fees; 3) payment in
full of Sandy Spring Bank's secured claim, including all interest,
attorney's fees, and other accruals through the date of settlement
(currently approximately $1.3 million) in complete satisfaction of
its lien on the Property; and 4) payment of the remaining sale
proceeds to Berkshire Bank in consideration of its lien on the
Property.
The stay of the Order for 14 days pursuant to Federal Rule of
Bankruptcy Procedure 6004 is waived.
Stephen Bruce Goldberg sought Chapter 11 protection (Bankr. D. Md.
Case No. 20-10612) on Jan. 16, 2020. The Debtor tapped Richard
Rosenblatt, Esq., as counsel.
SUMMIT MIDSTREAM: S&P Cuts ICR to 'SD' on Distressed Debt Exchange
------------------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on Summit
Midstream Partners Holdings LLC (SMP Holdings) to 'SD' (selective
default) from 'CC'. S&P also lowered its issue-level rating on
Summit Midstream Holdings LLC's senior unsecured debt to 'D' from
'CC'.
S&P is affirming its 'C' rating on SMLP's preferred stock because
it is excluded from these transactions.
The downgrade follows SMLP's announcement that it retired
approximately $38.7 million aggregate principal of the 2025 notes
at or below the price of $575 per $1,000 principal amount of the
2025 notes, and approximately $33.5 million aggregate principal
amount of the 2022 notes at or below the price of $700 per $1,000
principal amount of the 2022 notes. S&P views these transactions as
distressed, based on the discounted trading levels and the
noteholders' receiving less than originally promised.
S&P said, "We acknowledge the partnership continues to take a
proactive approach in cleaning up the balance sheet, but still
faces several hurdles with its capital structure over the next
18-24 months. Since May, the partnership has retired $210.8 million
aggregate principal amount of the senior unsecured notes at a
weighted average discount of approximately 39%. We forecast the
partnership will achieve an adjusted 2020 EBITDA base between $250
million and $260 million and adjusted debt-to-EBITDA ratio now
between 6x and 6.5x at year-end 2020. We previously forecasted
adjusted debt to EBITDA in the 6.5x-7x range.
"Summit Midstream Partners Holdings LLC The negative outlook
reflects our expectation that we will lower SMP Holding's issuer
credit rating to 'SD' if it completes an exchange or restructures
the term loan debt over the near term. We would consider it to be a
distressed exchange. At that point, we would lower our rating on
the term loan to 'D'.
"We would lower our rating on SMP Holdings if it completes a
distressed debt exchange or if it defaults.
"Although unlikely at this time, we could revise SMP Holding's
outlook to stable if we expect it to continue to honor its upcoming
financial obligations on the term loan."
TAILORED BRANDS: Files Amended Bankruptcy Plan
----------------------------------------------
Josh Saul of Bloomberg News reports that Tailored Brands Inc., the
bankrupt parent company of Men's Wearhouse, files an amended
bankruptcy plan with new details on lender recoveries.
The reorganized debtors will enter into exit facilities of a new
senior secured loan of $400 million and a new ABL loan of $430
million, according to its disclosure statement.
Holders of about $398.2 million of DIP ABL claims will receive a
pro rata share of the exit ABL facility.
Holders of prepetition term loan will receive a pro rata share and
interest in exit term loan facility and 100 percent of new equity
issued by reorganized debtor, projected claims will be $877.4
million.
About Tailored Brands
Tailored Brands, Inc., (NYSE: TLRD) is an omni-channel specialty
retailer of menswear, including suits, formal wear 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.
THOMPSON NATIONAL: Solicitation Period Extended Thru October 15
---------------------------------------------------------------
Judge Scott C. Clarkson of the U.S. Bankruptcy Court for the
Central District of California, Santa Ana Division, has extend the
period during which Thompson National Properties LLC, has the
exclusive right to solicit acceptances for the Chapter 11 plan to
October 15, 2020.
The Debtor said the extension will preserve their plan exclusivity
rights under the Bankruptcy Code and maintain the opportunity for
an orderly, efficient and cost-effective resolution. Also, it will
provide sufficient time for the Debtor to solicit votes on the
Second Amended Plan following approval of the Second Amended
Disclosure Statement.
The Debtor has taken several affirmative steps progressing towards
resolution of their Chapter 11 case, including efforts to monetize
assets for the benefit of creditors. It has reviewed and filed
objections to various claims and worked with the Cohen Parties in
order to formulate and propose a consensual plan. Moreover, the
Debtor has diligently worked on producing documents as requested by
the Cohen Parties in accordance with the Court's 2004 order entered
December 17, 2019. From an administrative standpoint, the Debtor
has submitted all of the information required in compliance with
the United States Trustee's Office.
On August 28, 2020, the Debtor filed its Second Amended Chapter 11
Plan and related disclosure statement.
A hearing on the Disclosure Statement was initially scheduled for
May 7, 2020, and afterward continued from time to time with the
continued hearing on approval of the Disclosure Statement scheduled
for September 24, 2020.
About Thompson National Properties
Thompson National Properties LLC -- http://www.tnpre.com/-- is a
real estate advisory company specializing in acquisitions for high
net worth investors and their joint venture partners, along with
third party property management, asset management and receivership
advisory services. Headquartered in Costa Mesa, California, TNP
was founded in April 2008.
TNP sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. C.D. Cal. Case No. 19-13728) on Sept. 26, 2019. The
petition was signed by Anthony W. Thompson, chief executive
officer. At the time of filing, the Debtor had $983,766 in assets
and $12,990,235 in debts.
The case is assigned to Judge Scott C. Clarkson. The Debtor is
represented by Leonard M. Shulman, Esq., at Shulman Hodges &
Bastian, LLP. No official committee of unsecured creditors has been
appointed in this case.
TROIANO TRUCKING: Recycleworks Can't Proceed w/ Assets Remediation
------------------------------------------------------------------
Judge Christopher J. Panos of the U.S. Bankruptcy Court for the
District of Massachusetts continued the telephonic hearing on the
request of Steven Weiss, the duly appointed Chapter 11 Trustee of
Troiano Trucking, Inc. and Troiano Realty, LLC, to modify the order
authorizing the sale of assets to Recycleworks Green, LLC for $3.05
million, to Sept. 29, 2020 at 3:00 p.m.
The Trustee states that Recycleworks cannot commit the significant
resources of time and money (in addition to its bid price of $3.05
million) to proceed with the remediation of the property.
Conversely, without the assistance of Recycleworks, the bankruptcy
estates do not have the resources to comply with the Administrative
Consent Order with Penalty.
The acquired assets, include the following: (i) the real estate at
109 Creeper Hill Road, North Grafton, Massachusetts; (ii) all of
Trucking's equipment and inventory; (iii) all of Trucking's motor
vehicles and dumpsters; and (iv) all other assets of Trucking
except the Excluded Assets.
Pursuant to the Order, $1.95 million of the Purchase Price is
allocated to the assets owned by Realty and $1.1 million to the
assets owned by Trucking.
To participate, the Parties will dial (877) 873-8018 and enter
access code 1167883.
About Troiano Trucking
Troiano Trucking, Inc. -- http://www.troianotrucking.com/-- is a
privately held company in Grafton, Mass., in the waste hauling
business. The company maintains a fleet of four trucks, which
allows it to service its customers with removal of bakery waste,
rubbish, demolition materials and recyclables. It serves
construction companies, roofing companies, bakeries and individual
home owners.
Troiano Realty, LLC, is a real estate lessor whose principal assets
are located at 109 Creeper Hill Road, North Grafton, Mass. The
property is valued at $1.48 million based on tax valuation
assessment method.
Troiano Trucking and Troiano Realty sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Mass. Lead Case No. 19-40656)
on April 23, 2019. At the time of the filing, Troiano Trucking was
estimated to have assets and liabilities of between $1 million and
$10 million. Troiano Realty disclosed $1,485,000 in assets and
$4,220,210 in liabilities.
TUMBLEWEED TINY: Court Extends Plan Exclusivity Until November 12
-----------------------------------------------------------------
The Honorable Kimberly H. Tyson of the U.S. Bankruptcy Court for
the District of Colorado has extended the periods within which
Tumbleweed Tiny House Company, Inc., has the exclusive right to
file a chapter 11 plan by 120 days through and including November
12, 2020, and to solicit acceptances to that plan by 180 days
through and including January 11, 2021.
The Debtor said an extension will give it a meaningful opportunity
to develop and confirm a consensual plan of reorganization and
allow it to improve its ability to withstand any additional
disruptions and more accurately forecast its ability to make plan
payments. The Debtor projects the SBA loan proceeds will provide it
with sufficient operating capital to perform under a plan of
reorganization.
The COVID-19 pandemic and the mandatory government restrictions
that followed had a negative impact on the Debtor's ability to
formulate and propose a plan of reorganization. With the lifting of
the government's pandemic restrictions and more streamlined
operations, the Debtor's financial situation has improved. However,
current events outside the Debtor's control continue to disrupt the
Debtor's supply chain. Additionally, financial assistance that was
made widely available to other businesses was not provided to the
Debtor due to the pending bankruptcy.
While the Debtor was initially approved for an SBA loan (and
Bankruptcy Court approval for the same was obtained), the Debtor's
original loan application expired and the Debtor was forced to
reapply. The Debtor continues to wait for the SBA loan to be
approved and funded.
The Debtor also obtained Court authority to sell several trucks but
has not yet been able to find buyers for the vehicles. The Debtor
continues to pay its post-petition debts as they come due. As
business restrictions are lifted, the Debtor anticipates that
orders for tiny houses will continue to increase.
The Court previously extended the Debtor's exclusive filing period
for 120 days and exclusive solicitation period for 180 days through
and including August 27 and October 26, 2020, respectively.
About Tumbleweed Tiny House Company
Tumbleweed Tiny House Company, Inc., a manufacturer of tiny house
RVs, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Colo. Case No. 20-11564) on March 4, 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 Kimberley H. Tyson oversees the case. Wadsworth Garber Warner
Conrardy, P.C. is the Debtor's legal counsel. The Debtor has hired
Stockman Kast Ryan + Company as its accountant.
TZEW HOLDCO: Plan Exclusivity Period Extended Thru December 4
-------------------------------------------------------------
Judge Christopher S. Sontchi granted the request of TZEW Holdco,
LLC, and its affiliates for an extension of their exclusive periods
to file a Chapter 11 plan through and including December 4, 2020,
and to solicit votes to accept a proposed plan through and
including February 2, 2021.
Since filing for Chapter 11 relief, the Debtors have, among other
things:
(i) stabilized their businesses through the approval of
various crucial first day motions;
(ii) negotiated and obtained final approval of post-petition
secured financing and for the use of the Debtors' cash collateral;
(iii) rejected certain burdensome contracts and leases pursuant
to the omnibus lease and contract rejection motions;
(iv) filed their schedules of assets and liabilities and
statements of financial affairs for each of the Debtors on May 4,
2020;
(v) conducted significant post-petition marketing of the
Debtors' assets pursuant to sale and bidding procedures approved by
the Court;
(vi) sold substantially all of the Debtors' assets;
(vii) closed the sale of their assets to the Purchaser; and
(viii) supported the post-closing transition of their businesses
to the APX Operating Company, LLC, the Purchaser, pursuant to the
Transition Services Agreement approved by the Court.
While the sale closed in early June, the Debtors continue to
support the transition of their businesses to the Purchaser
pursuant to the Transition Services Agreement for long after the
closing. The Debtors will use the additional time provided to focus
upon the evaluation and (if appropriate) development of a
consensual plan.
The Debtors are currently in discussions with key stakeholders in
these cases with respect to evaluating the potential for a
consensual plan of liquidation and believe they have made some
progress toward the development of a strategy. Considering the
significant tasks required to evaluate the Debtors' assets and
liabilities to support the development of a plan, the extension of
the exclusivity periods is reasonable and justified.
The Debtors also needed the additional time to conclude discussions
with interested parties and, based upon the outcome of those
discussions, develop a consensual plan of liquidation. The Debtors
noted they have been diligent in administering these cases by,
among other things, proceeding with the sale of substantially all
assets of the Debtors, rejecting certain burdensome contracts and
leases, and supporting the post-sale transition process. The
Debtors will have the time to maximize the value of their estates
for the creditors since the Debtors have access to sufficient
available cash to pay their debts as they become due.
About TZEW Holdco
TZEW Holdco, LLC -- http://www.apexparksgroup.com-- and its
affiliates are privately held owners and operators of amusement
parks, resorts, and family entertainment centers across the United
States. Founded in 2014, the companies' business strategy focuses
on the acquisition, operation, growth, and development of various
properties into economical, family-friendly entertainment and
amusement venues. The companies locations include year-round
family entertainment centers, water parks, and amusement parks in
states across the country, including California, Texas, and
Florida. Each of the companies' locations provides affordable,
family-friendly entertainment to local markets and features
numerous attractions, including rides, games, and events.
TZEW Holdco and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-10910) on
April 8, 2020. At the time of the filing, the Debtors had
estimated assets of between $50 million and $100 million and
liabilities of between $100 million and $500 million.
The Debtors have tapped Pachulski Stang Ziehl & Jones, LLP as their
legal counsel, Imperial Capital, LLC as an investment banker and
financial advisor, Paladin Management Group, LLC as restructuring
advisor, and Kurtzman Carson, LLC as claims and noticing agent.
The Debtors hired Grant Thornton, LLP, to provide tax compliance
services.
The U.S. Trustee for Regions 3 and 9 appointed a committee of
unsecured creditors on April 23, 2020. The committee is
represented by Kelley Drye & Warren LLP.
U.S. OUTDOOR HOLDING: Seeks to Use Cash Collateral
--------------------------------------------------
U.S. Outdoor Holding LLC asks the U.S. Bankruptcy Court for the
District of Oregon for entry of an interim order authorizing the
use of cash collateral. The Debtor says its business depends on the
ability to obtain new merchandise for resale and employees who will
then facilitate the sale of such merchandise, which would be
greatly jeopardized by any delay in the Debtor's use of the cash
collateral to obtain merchandise or pay the employees.
The COVID-19 pandemic, social unrest in Downtown Portland, and the
dramatic customer move to online retail from brick-and-mortar
stores have rendered the Debtor's previous business model
untenable. Leasing a large retail space in Downtown Portland became
impossible to justify, and the Debtor's recent move attempts to
find a more sustainable operation.
To avoid immediate and irreparable harm, the Debtor requires the
use of Cash Collateral for the payment of operating expenses. The
Debtor proposes to use Cash Collateral of $206,647, according to
the terms of the proposed interim cash collateral order. The
Debtor proposes to use Cash Collateral of $2,007,622.00 on the
terms set forth in the proposed final cash collateral order.
The Cash Collateral includes, but is not limited to, any uncashed
checks made payable to the Debtor and cash collateral in possession
of a Lien Creditor or an agent for a Lien Creditor on the Petition
Date.
The entities that may claim a lien in the Cash Collateral are
Tecnica Group USA Corporation, National Funding, U.S. Small
Business Administration, and the State of Oregon Department of
Revenue.
The Debtor proposes to grant each creditor with a replacement lien
on all of the post-petition property of the same nature and kind in
which each of them has a pre-petition line or security interest.
The replacement liens shall have the same relative priority
vis-a-vis one another as existed on the petition date with respect
to the original liens.
A copy of the motion is available at https://bit.ly/2HGiLbm from
PacerMonitor.com.
About U.S. Outdoor Holding LLC
U.S. Outdoor Holding LLC -- https://www.usoutdoor.com/ -- is an
authorized dealer of many top outdoor brands. The Company is
family-owned and operated since 1957. It sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ore. Case No.
20-32571) on September 4, 2020. In the petition signed by Edward A.
Ariniello, member manager, the Debtor disclosed $1,531,809 in
assets and $3,352,108 in liabilities.
The case is assigned to Judge David W. Hercher.
Douglas R. Ricks, Esq., at VANDEN BOS & CHAPMAN, LLP is the
Debtor's counsel.
URSA PICEANCE: Nov. 6 Auction of Substantially All Assets Set
-------------------------------------------------------------
Judge Brendan L. Shannon of the U.S. Bankruptcy Court for the
District of Delaware authorized the bidding procedures proposed by
Ursa Piceance Holdings, LLC and its affiliates to govern the
auction sale of substantially all of their assets free and clear of
all Liens.
The Assets are comprised primarily of oil and gas properties and
producing and midstream infrastructure. The Debtors own
approximately 41,000 net acres of oil and gas properties in the
Piceance Basin, which is a tight sands formation that includes the
second largest natural gas accumulation in the United States per
the United States Geological Survey. Their acreage is concentrated
in the Boies Ranch, Battlement Mesa, Gravel Trend, and Castle
Springs regions of the Piceance, which include 579 gross operated
wells currently producing natural gas, Natural Gas Liquids, and
oil.
The Debtors, in consultation with the DIP Agent, the Prepetition
RBL Agent, the agent to the Prepetition Second Lien Lender and the
Official Committee of Unsecured Creditors (if any), may select a
Stalking Horse Bidder for substantially all of the Debtors' Assets
or any grouping or subset of the Debtors' Assets. If they ask to
designate a Stalking Horse Bidder and/or provide Bid Protections
for any Stalking Horse Bidder, the Debtors will file a supplement
to the sale motion asking approval of the same.
Objections to the designation of a Stalking Horse Bidder or any of
the terms of a Stalking Horse Bid will be filed with Court and be
served on the Objection Notice Parties within seven calendar days
after the service of the Stalking Horse Supplement.
The Sale Notice is approved and will be served within three
business days of entry of the Order, upon (i) the Notice Parties
identified in the Motion, (ii) all entities contacted by Lazard at
any point during the pre-petition marketing process(es), and (iii)
those entities and individuals appearing on the Debtors' creditor
matrix.
Within 10 business days of entry of this Order, or as soon as
reasonably practicable thereafter, the Debtors will publish the
Publication Notice in the National Edition of USA Today and the
Denver Post.
The Cure, Consent, and Preferential Right Notice is approved. No
later than five business days following entry of the Bidding
Procedures Order, the Debtors will serve the Cure, Consent, and
Preferential Right Notice on all Counterparties and any
third-parties that may hold hard consent or preferential rights
with respect to the Assets.
The Contract Objection Deadline is 5:00 p.m. (ET) on the date that
is 14 days after the filing and service by the Debtors to the
Counterparty of the Cure, Consent, or Preferential Right Notice or
the Previously Omitted Contract Notice.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Nov. 2, 2020 at 5:00 p.m. (ET)
b. Initial Bid: The initial Overbid will provide for total
consideration to the Debtors with a value that exceeds the value of
the consideration under the Baseline Bid, giving effect to the
credit for the Bid Protections if the Stalking Horse Bid is the
Baseline Bid, by an incremental $500,000.
c. Deposit: 10% of the aggregate cash and non-cash unadjusted
Purchase Price of the Bid
d. Auction: The Auction will take place at 1:00 p.m. (ET) on
Nov. 6, 2020 telephonically or by videoconference, or such later
date and time as selected by the Debtors in consultation with the
Consultation Parties. The Debtors will file a notice of the date
and time for the Auction no later than 5:00 p.m. (ET) on Nov. 5,
2020.
e. Bid Increments: $500,000
f. Sale Hearing: Nov. 12, 2020 at 10:00 a.m. (ET)
g. Sale Objection Deadline: Nov. 9, 2020 at 5:00 p.m. (ET)
h. If the DIP Agent submits a credit bid on behalf of the
lenders under the DIP Credit Agreement, the Prepetition RBL Agent
submits a credit bid on behalf of the lenders under the Prepetition
RBL Credit Agreement, or the Prepetition Second Lien Agent submits
a credit bid on behalf of the lenders under the Prepetition Second
Lien Credit Agreement, the DIP Agent, Prepetition RBL Agent, and/or
the Prepetition Second Lien Agent, as the case may be, will be
deemed to be a Qualified Bidder, and any such credit bid will be
considered a Qualified Bid and may be submitted at any time prior
to or at the Auction if it otherwise complies with the requirements
for a Qualified Bid.
i. The DIP Agent, Prepetition RBL Agent, and/or the
Prepetition Second Lien Agent, as the case may be, will be deemed
to be a Qualified Bidder, and any such credit bid will be
considered a Qualified Bid and may be submitted at any time prior
to or at the Auction if it otherwise complies with the requirements
for a Qualified Bid.
Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions
of the Order will be immediately effective and enforceable upon its
entry.
All time periods set forth in the Order will be calculated in
accordance with Bankruptcy Rule 9006(a).
A copy of the Bidding Procedures is available at
https://tinyurl.com/y2y7cc8u from PacerMonitor.com free of charge.
About Ursa Piceance Holdings
Ursa Piceance Holdings LLC -- http://www.ursaresources.com/-- is
engaged in the development and production of oil and gas in the
Piceance Basin, principally in rural areas of Western Colorado.
The Company's operations are focused on natural gas and natural gas
liquids.
Ursa Piceance Holdings LLC and its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case
No. 20-12065) on Sept. 2, 2020. The petitions were signed by Jamie
Chronister, chief restructuring officer. The Hon. Karen B. Owens
oversees the cases.
The Debtor posted estimated Assets of $100 million to $500 million
and estimated Liabilities: $100 million to $500 million.
Sidley Austin LLP has been tapped as general bankruptcy counsel to
the Debtors while Young Conaway Stargatt & Taylor LLP has been
tapped as Delaware counsel. Conway MacKenzie Management Services
LLC serves as interim management services provider to the Debtors.
Lazard Freres & Co. LLC is the Debtors' investment banker and Prime
Clerk LLC is the Debtors' claims and noticing agent.
VALARIS PLC: Asks Court Permission to Tap $500M Bondholders' Funds
------------------------------------------------------------------
Law360 reports that offshore drilling contractor Valaris PLC asked
a Texas bankruptcy judge Sept. 24, 2020, to allow it to take out
$500 million in financing from a group of its bondholders over the
objections of Citibank, which argued the company's bank creditors
offered a better deal. In a remote hearing late Thursday,
witnesses for Valaris said while the banks had offered slightly
better terms, the bondholders had offered both more money and
support for a plan to fully convert the company's $7. 1 billion in
debt to equity. "We thought it provided the best pathway to the
broader restructuring structure the debtor wanted," Valaris CFO
Johnathan said.
About Valaris plc
Valaris plc (NYSE: VAL) provides offshore drilling services. It is
an English limited company with its corporate headquarters located
at 110 Cannon St., London. Visit http://www.valaris.com/for more
information.
On Aug. 19, 2020, Valaris and its affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 20-34114).
The Debtors tapped Kirkland & Ellis LLP and Slaughter and May as
their bankruptcy counsel, Lazard as investment banker, and Alvarez
& Marsal North America LLC as their restructuring advisor. Stretto
is the claims agent, maintaining the page
http://cases.stretto.com/Valaris
Kramer Levin Naftalis & Frankel LLP and Akin Gump Strauss Hauer &
Feld LLP serve as legal advisors to the consenting noteholders
while Houlihan Lokey Inc. serves as their financial advisor.
WEST DEPTFORD: S&P Alters Outlook to Negative, Affirms 'BB-' Rating
-------------------------------------------------------------------
S&P Global Ratings revised the outlook on West Deptford Energy
Holdings LLC's (WDE) to negative from stable. S&P also affirmed its
'BB-' rating on the project's senior secured term loan B and credit
facility.
S&P said, "We are also revising our recovery expectation on the
project to '2' from '1', reflecting higher projected debt levels at
default. The '2' recovery rating indicates our expectation for
substantial (70%-90%; rounded estimate: 85%) recovery in a default
scenario
"The outlook revision reflects our view that WDE could face some
pressure maintaining a debt service coverage ratio (DSCR) of 1.4x
and sweep cash in 2020 if recovery in the broader power sector is
sluggish and market fundamentals continue to be unfavorable."
WDE is a 744 megawatt (MW) combined-cycle natural gas-fired power
plant in Gloucester County, N.J. It dispatches into the Eastern
Mid-Atlantic Area Council (EMAAC) zone of the PJM Interconnection.
The project is owned by LS Power Group (17.8%), Marubeni Corp.
(17.5%), Kansai Electric Power Co. Inc.
(17.5%), ULLICO Group (14.5%), Arctic Slope Regional Corp. (11.6%),
Prudential & Lincoln (11.1%), and Sumitomo Corp. (10%).
Strengths
WDE is located in the Eastern Mid-Atlantic Area Council (EMAAC)
region of Pennsylvania-Jersey-Maryland (PJM) Interconnection where
capacity prices have historically been at a premium to the rest of
the Regional Transmission Organization (RTO) due to transmission
constraints.
Market risk is mitigated until December 2020 via a revenue put.
The project has access to natural gas connection to two interstate
gas pipelines, Columbia Gas Transmission and Transco.
Risks
As the project sells its power into the merchant market, it is
exposed to uncertain power prices driven by demand, supply, and
commodity prices, particularly after its revenue put expires in
December 2020.
The single-asset nature of the project results in limited scale,
scope, and geographic diversification, and concentrates the risk of
unforeseen operational outages.
A maintenance-related outage affected generation, and combined with
effects from COVID hurt energy margins. In March 2020, WDE needed
to extend the planned Spring outage as it was discovered upon
in-depth inspection that the plant's turbine belly bands needed to
be replaced and upgraded due to unacceptable wear. Several row two
vanes on each turbine were also replaced as part of the maintenance
procedure. The outage was originally planned to last 17 days, but
was proactively extended to April 30. The longer outage had the
combined effect of curtailing expected generation (with capacity
factors averaging around 32%) for the first half of 2020, while
also increasing unbudgeted maintenance outlays for the project. The
outage did occur during the shoulder months that has historically
experienced softer pricing and the project has a low equivalent
forced outage rate (EFORd) of around 1% as of June 2020.
The extended outage, combined with a mild winter and the
unprecedented decline in power demand across wholesale power
markets this year due to COVID-19, resulted in a realized energy
margin of around $5.5 million as of June 2020--below its
expectations for the year. WDE did receive some benefit from the
project's revenue put but experienced material slippage on the
hedge due to the operational outage. Consequently, WDE has been
unable to sweep substantial cash for debt paydowns, with about $439
million outstanding on the project's term loan and a tight cushion
on the loan's 1.1x DSCR financial covenant as of June 2020.
Although S&P does not anticipate WDE to breach its financial
covenant in the near term, due to the challenges the project faced
in 2020 it now expects a debt balance at maturity of about $290
million compared to our prior expectation of about $220 million.
Although S&P forecasts performance to rebound in the second half of
2020, based on current forward prices in the PJM region it expects
WDE's energy margins and spark spreads will be weaker than
previously expected. New Jersey rejoining the Regional Greenhouse
Gas Initiative program in January 2020 has resulted in incremental
variable costs for carbon dioxide emissions for a number of power
generation facilities, including WDE, which will hamper
already-pressured energy margins. While capacity, ancillary, and
other contracted revenue provide good visibility to a large portion
of WDE's cash flow, energy margin makes up the rest, and is subject
to significant price volatility.
WDE is exposed to merchant forces but has some protection from
capacity payments. The project continues to benefit from being
located in the EMAAC region, where current capacity prices are at a
premium compared to the rest of the RTO. Cleared capacity prices in
EMAAC for the 2020-2021 and 2021-2022 delivery years at $188 per
megawatt (MW) per day and $166/MW-day, which are significantly
higher than the 2019-2020 delivery year. S&P said, "Earlier this
year, we lowered our forecasts for future PJM capacity price
auctions; however, we continue to foresee a separation for EMAAC
from the RTO for the 2022-2023 delivery year with similar or higher
premium to the RTO because of lower capacity emergency transmission
limits and higher load forecasts. As a result, we expect EMAAC
prices of $145-$150 per MW/day in the 2022-2023 and 2023-2024
delivery year capacity auctions with these levels escalating at 2%
in all future periods. On the other hand, we expect RTO prices of
$100/MW-day in the 2022-2023 and 2023-2024 capacity auctions and
$120/MW-day escalated at 2% for future years."
S&P said, "We expect the project's performance to remain soft in
2020 before recovering in 2021 along with the broader power market.
We currently forecast merchant power generators such as WDE will
realize spark spreads in the mid- to high-single-digit area per MW
range in 2020 and into 2021 as power markets gradually recover. In
our base case, we now expect WDE to generate a DSCR of about 1.4x
for 2020 and generally above 1.5x for next few years. We also
expect the weaker operational cash flows from the project will
sufficiently cover debt service but reduce cash sweeps in the near
term. We anticipate cash flow available for debt service between
$35 million-$40 million and a modest sweep of about $6 million-$8
million in 2020. We also expect the project's near-term debt
service costs to be somewhat lower than we previously forecast
because of extremely low LIBOR forward rates.
"We assume the term loan B will be refinanced at maturity in 2026
with a mortgage-style repayment profile and anticipate that it will
be fully repaid in 2040 (based on a useful asset life through
2045). We will continue to monitor market developments and the
project's performance during over the next several quarters.
"We expect that the demand shock stemming from the coronavirus
pandemic will be followed by a prolonged recovery. Due to the
reduced demand for power because of the coronavirus pandemic, we
expect power prices to remain somewhat depressed in 2020 and
potentially into 2021. We expect that reduced demand will last
through second-quarter 2020 and possibly beyond. While our
base-case scenario assumes a recovery in power prices, we expect it
to occur gradually."
S&P Global Ratings acknowledges a high degree of uncertainty about
the rate of spread and peak of the coronavirus outbreak. S&P said,
"Some government authorities estimate the pandemic will peak about
midyear, and we are using this assumption in assessing the economic
and credit implications. We believe the measures adopted to contain
COVID-19 have pushed the global economy into recession. As the
situation evolves, we will update our assumptions and estimates
accordingly."
S&P said, "The negative outlook reflects our view that WDE could
face some near-term pressure maintaining a DSCR of about 1.4x and
sweep less cash over the next several quarters than expected if the
recovery in the power sector after the pandemic is slower than
expected and market fundamentals continue to be unfavorable.
"We could lower our rating if the project fails to sweep material
cash prior to maturity such that its expected DSCRs fall below 1.4x
on a sustained basis over the assumed refinance tenor. This would
likely be caused by further mild weather, additional unplanned
operational outages, or continued market impacts due to COVID-19
that increase debt outstanding at refinancing.
"We could revise our outlook to stable if the project's minimum
DSCR increases to notably above 1.5x in our base case, including
the refinancing period, and if the project deleverages though its
cash flow sweep mechanism over the next several quarters. This
could stem from robust operational performance, combined with a
strong rebound in spark spreads and higher-than-expected capacity
payments in uncleared periods in the PJM EMAAC zone."
WILLCO X: Hilton Hotel in Thornton, CO Owner Enters Chapter 11
--------------------------------------------------------------
Dan Mika of BizWest reports that the owners of the Hilton Garden
Inn in Thornton, Colorado, have filed for Chapter 11 bankruptcy
protection, a week after another hotel managed by Fort Collins
hotel developer and operator Spirit Hospitality LLC filed for
bankruptcy protection.
In documents filed with the U.S. Bankruptcy Court for the District
of Colorado, on Sept. 29, 2020 the Fort Collins-based Spirit
declared between $10 million and $50 million in both assets and
liabilities, but does not fully list those two out or provide
specific totals.
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that benefit commercial property owners directly.
The majority of the 20 largest creditors for the bankruptcy are
listed as construction and operating vendors, which are owed a
combined $1.18 million.
Another Spirit Hospitality property, the Johnstown Comfort Inn &
Suites, filed for bankruptcy last week, declaring $14.17 million in
assets and $10.27 million in liabilities a month after creditors
filed a $6.4 million foreclosure demand.
Jeffrey Weinman, the attorney listed on the Thornton hotel's
bankruptcy, told BizWest in an email that the ongoing COVID-19
pandemic led the hotel into difficulty. The hotel plans to spread
out accumulated unsecured debts over a longer period of time and
potentially seek adjustments to secured debts, he said.
About Willco X Development
Willco X Development, LLLP, operator of the Hilton Garden Inn of
Thornton in Colorado, filed a Chapter 11 petition (Bankr. D. Colo.
Case No. 20-16438) on Sept. 29, 2020. The Hon. Joseph G. Rosania
Jr. is the case judge. The Debtor was estimated to have $10
million to $50 million in assets and liabilities as of the
bankruptcy filing. WEINMAN & ASSOCIATES, P.C., led by Jeffrey A.
Weinman, is the Debtor's counsel.
WP REALTY: Mired by Bankruptcy & Litigation
-------------------------------------------
Bill Heltzel of Westchester and Fairfield County Business Journal
report that the developer of a proposed New Rochelle hotel, WP
Realty Acquisition III, is mired by litigation and bankruptcy.
A proposed 24-story hotel and conference center that was promoted
as a tourist destination, a commanding gateway to New Rochelle and
the biggest hotel project in Westchester in 20 years, is
floundering.
The developer, WP Realty Acquisition III, filed for bankruptcy
Sept. 11, citing management and litigation disputes.
WP badly needs Chapter 11 relief, manager Jonathan Sacks states in
an affidavit, "to put the ... project back on the correct
footing."
The hotel is the dreamchild of D'Wayne Prieto, of Ward Capital
Management, Dobbs Ferry.
He formed WP in 2016 and purchased a wedge of land on Cedar Street
at the Exit 16 interchange of the New England Thruway (I-95) that
includes a 4-story, 1905 building that once housed Don Coqui, a
Puerta Rican restaurant operated by Prieto's wife, Jewelle.
The plan is to convert the building to a conference center and
build a 225-room hotel and parking garage that would by operated by
Wyndham Hotels.
In 2019, the New Rochelle Industrial Development Agency granted
Prieto nearly $3.3 million in mortgage and sales tax exemptions and
20-year tax abatement reportedly worth $16.7 million.
The project "will be completely transformative," the city's
commissioner of development, Luiz Aragon, told the IDA board. "It
will change how people perceive our city."
Prieto had hoped to begin construction in 2019 and open the hotel
this year or next.
But the project has stalled, according to Sacks.
Sacks' company, 188th St. Development LLC, became WP's majority
partner in 2018 and now holds an 88.9% interest in the company,
according to his affidavit. He invested $1.5 million and loaned
$610,713 to launch the project, and he assumed full management
control this year.
But real estate developer Bradley Gold claims he owns WP. Gold
loaned $100,000 to Prieto in 2016, for an interest in future real
estate projects. Prieto defaulted on the loan, according to court
documents, and in 2019 Gold got a court judgement against WP for
$154,000.
This past March, Gold removed Prieto as WP's manager, citing terms
of a 2016 "strategic relationship agreement," claimed 100% interest
in the company, and appointed himself as the manager.
Sacks claims in WP's lawsuit against Gold that he had no knowledge
of the loan when he invested in WP. In any event, he says, the
strategic relationship agreement is "illusory" and has nothing to
do with WP and the New Rochelle hotel project.
Sacks asserts that the liens should be vacated, because when Prieto
acknowledged his debts to Gold, he signed papers as president and
sole member of WP, when in fact he was the manager and owned 20%.
Prieto admits in a court filing that his "confessions of judgment"
to Gold were erroneous.
But Gold claims in a lawsuit against Prieto and Sacks that they
conspired to buy the Cedar Street property and that Sacks knew or
should have known about the loans.
WP has no chance of raising capital for the project, according to
Sacks, unless the Gold claims are addressed.
The goal of the Chapter 11 case is to move the litigation to
bankruptcy court and expedite the rulings, Sacks states, "so the
project can begin to move forward without a cloud of uncertainty."
The petition lists $4,177,531 in assets, consisting mostly of the
Cedar Street property, and $4,674,590 in liabilities.
WP in represented by Manhattan attorneys Kevin J. Nash in the
bankruptcy case and Edward P. Gilbert in its lawsuit against Gold.
Prieto is represented by Manhattan attorney Bernard H. Jackson III.
Gold is represented by Eastchester attorney Clifford H. Greene.
About WP Realty Acquisition III
P Realty Acquisition III LLC is engaged in activities related to
real estate. It owns a property located in New Rochelle, New York
having a current value of $4.1 million (estimated without
development).
WP Realty Acquisition III filed a Chapter 11 petition (Bankr.
S.D.N.Y. Case No. 20-23038) on Sept. 11, 2020. The Debtor
disclosed $4,177,531 in total assets and total liabilities
$4,674,589. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP, led by Kevin J.
Nash, is the Debtor's counsel.
[*] Store Closures & Bankruptcies Hit Record in 1st Half of 2020
----------------------------------------------------------------
Aisha Al-Muslim of the Wall Street Journal reports that retail
bankruptcies, liquidations and store closings in the U.S. reached
records in the first half of 2020 as the Covid-19 pandemic
accelerated industry changes, particularly the shift to online
shopping, according to according to a report by
professional-services firm BDO USA LLP.
In the first six months, 18 major retailers filed for chapter 11
protection, mostly concentrated in apparel and footwear, home
furnishings, grocery and department stores, according to the
report. They include department-store operators Neiman Marcus Group
Ltd., J.C. Penney Co. JCPNQ, +3.86% and Stage Stores Inc. SSINQ,
-8.39% , home-goods retailers Pier 1 Imports Inc. PIRRQ, +4.34%
and Tuesday Morning Corp. and vitamin seller GNC Holdings Inc.
From July through mid-August 2020, 11 more retailers filed,
including apparel retailers Lucky Brand Dungarees LLC, Brooks
Brothers Inc., Ann Taylor parent Ascena Retail Group Inc. ASNAQ,
+10.02% , Stein Mart Inc., and Men’s Wearhouse and Jos. A. Bank
parent Tailored Brands Inc. TLRDQ, -1.31%
The year 2020 is on pace to rival 2010, when 48 retailers filed for
bankruptcy in the wake of the 2007-09 recession, BDO said. Retail
bankruptcies in 2020 have already surpassed the 22 such filings
recorded last year.
"This is almost certainly the worst year in recent history for
retail," said Kyle Sturgeon, a managing partner at Atlanta-based
turnaround advisory firm Meru LLC.
Government-mandated store closures and social-distancing measures
have intensified challenges that were facing bricks-and-mortar
retailers before the pandemic, according to BDO.
Consumers stuck at home due to the pandemic are buying more online
than ever, the report said. That trend comes on top of excessive
debt, store saturation, high unemployment and changing shopper
behaviors. Demand for business attire and outfits for social
occasions, in particular, has cratered.
High rates of bricks-and-mortar store closures are expected to
continue, BDO said. From January through mid-August, retailers had
announced they would close a total of more than 10,000 stores in
the U.S., including locations of solvent companies such as Macy’s
Inc. M, -4.86% , Bed Bath & Beyond Inc. BBBY, -2.48% and Gap
Inc. GPS, -2.84%
That has already topped last year's record 9,500 store closures.
Many of the closings through mid-August 2020 were due to retail
bankruptcies, which accounted for nearly 6,000 closings.
Retailers are likely to decide to close as many as 25,000 U.S.
stores in 2020, according to global market-research firm Coresight
Research.
Many of the stores going dark are anchors and other tenants in
shopping malls. Real-estate research firm Green Street Advisors LLC
has forecast that more than half of all mall-based department
stores in the U.S. will close by the end of 2021.
Landlords including mall owners Simon Property Group Inc. and
Brookfield Property Partners LP have been stepping up, buying
troubled tenants like J.C. Penney out of chapter 11, their third
acquisition in four years of a bankrupt tenant.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Mohit Singh Randhawa
Bankr. E.D. Cal. Case No. 20-90645
Chapter 11 Petition filed September 23, 2020
represented by: David Johnston, Esq.
In re RAM DMD, PLLC
Bankr. M.D. Fla. Case No. 20-05340
Chapter 11 Petition filed September 23, 2020
See
https://www.pacermonitor.com/view/KVOJJOY/RAM_DMD_PLLC__flmbke-20-05340__0001.0.pdf?mcid=tGE4TAMA
represented by: Darren Mills, Esq.
WIDERMAN MALEK PL
E-mail: dmills@uslegalteam.com
In re The Church That Feeds and Shelters All People, Inc
Bankr. S.D. Fla. Case No. 20-20267
Chapter 11 Petition filed September 23, 2020
See
https://www.pacermonitor.com/view/SSGT6EI/The_Church_That_Feeds_and_Shelters__flsbke-20-20267__0001.0.pdf?mcid=tGE4TAMA
represented by: Chad Van Horn, Esq.
VAN HORN LAW GROUP, P.A.
Email: chad@cvhlawgroup.com
In re David M. Martin
Bankr. D. Mass. Case No. 20-40936
Chapter 11 Petition filed September 23, 2020
represented by: Marques Lipton, Esq.
PARKER & LIPTON
Email: mlipton@parkerlipton.com
In re Thomas Francis Young and Connie Angelina Young
Bankr. D.N.M. Case No. 20-11844
Chapter 11 Petition filed September 23, 2020
represented by: Louise Montoya, Esq.
In re Honnie Patricia Spencer
Bankr. W.D.N.C. Case No. 20-30853
Chapter 11 Petition filed September 23, 2020
represented by: Robert Lewis, Esq.
In re Rosemarie Repici Riley
Bankr. E.D. Pa. Case No. 20-13831
Chapter 11 Petition filed September 23, 2020
represented by: Albert Ciardi, Esq.
In re Southern Concrete Company, LLC
Bankr. M.D. Ala. Case No. 20-32021
Chapter 11 Petition filed September 24, 2020
See
https://www.pacermonitor.com/view/H3P3XRI/Southern_Concrete_Company_LLC__almbke-20-32021__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael A. Fritz, Sr., Esq.
FRITZ LAW FIRM
E-mail: bankruptcy@fritzlawalabama.com
In re Jason Del Vecchio and Louis Del Vecchio
Bankr. S.D. Cal. Case No. 20-04757
Chapter 11 Petition filed September 24, 2020
represented by: Victor E. Ramirez, Esq.
In re Kenneth Lawrence Cohen
Bankr. S.D. Fla. Case No. 20-20339
Chapter 11 Petition filed September 24, 2020
represented by: Craig Kelley, Esq.
KELLEY, FULTON & KAPLAN, P.L.
In re General Machine Solutions Inc.
Bankr. N.D. Ind. Case No. 20-21885
Chapter 11 Petition filed September 24, 2020
See
https://www.pacermonitor.com/view/IPAFEWI/General_Machine_Solutions_Inc__innbke-20-21885__0001.0.pdf?mcid=tGE4TAMA
represented by: Donald L. Freeland, Esq.
DANIEL L. FREELAND & ASSOCIATES, P.C.
E-mail: Dlf9601@aol.com
In re MGDJR Properties LLC
Bankr. D.N.J. Case No. 20-20920
Chapter 11 Petition filed September 24, 2020
See
https://www.pacermonitor.com/view/MV7GSHY/MGDJR_Properties_LLC__njbke-20-20920__0001.0.pdf?mcid=tGE4TAMA
represented by: Scott E. Kaplan, Esq.
LAW OFFICES OF SCOTT E. KAPLAN, LLC
E-mail: scott@sekaplanlaw.com
In re Charles Martin
Bankr. D.N.M. Case No. 20-18680
Chapter 11 Petition filed September 24, 2020
represented by: Michelle Maloney-Raymond, Esq.
In re Stacey E. Woodruff
Bankr. N.D. Ill. Case No. 20-17709
Chapter 11 Petition filed September 25, 2020
represented by: Xiaoming Wu, Esq.
In re Scott A. O'Neil and Cynthia C. O'Neil
Bankr. E.D.N.C. Case No. 20-03240
Chapter 11 Petition filed September 25, 2020
represented by: Jonathan Friesen, Esq.
In re Mark R. Ormond
Bankr. N.D. Ill. Case No. 20-17726
Chapter 11 Petition filed September 27, 2020
represented by: Ariel Weissberg, Esq.
In re Dominic Munib Hakmat Barbar
Bankr. C.D. Cal. Case No. 20-18809
Chapter 11 Petition filed September 28, 2020
represented by: David Hagen, Esq.
In re Blackstone Capital Strategies, LLC
Bankr. S.D. Fla. Case No. 20-20485
Chapter 11 Petition filed September 28, 2020
See
https://www.pacermonitor.com/view/CJL27QQ/Blackstone_Capital_Strategies__flsbke-20-20485__0001.0.pdf?mcid=tGE4TAMA
represented by: Mark S. Roher, Esq.
LAW OFFICE OF MARK S. ROHER, P.A.
E-mail: mroher@markroherlaw.com
In re Grupo Maritimo Royal, LLC
Bankr. S.D. Fla. Case No. 20-20474
Chapter 11 Petition filed September 28, 2020
See
https://www.pacermonitor.com/view/ZE5SWVY/Grupo_Maritimo_Royal_LLC__flsbke-20-20474__0001.0.pdf?mcid=tGE4TAMA
represented by: Kevin Christopher Gleason, Esq.
FLORIDA BANKRUPTCY GROUP, LLC
E-mail: bankruptcylawyer@aol.com
In re Augusta Motors, Inc.
Bankr. S.D. Ind. Case No. 20-05414
Chapter 11 Petition filed September 28, 2020
See
https://www.pacermonitor.com/view/NVMV23A/Augusta_Motors_Inc__insbke-20-05414__0001.0.pdf?mcid=tGE4TAMA
represented by: David R. Krebs, Esq.
HESTER BAKER KREBS LLC
E-mail: dkrebs@hbkfirm.com
In re Westlane Financing, Inc.
Bankr. S.D. Ind. Case No. 20-05416
Chapter 11 Petition filed September 28, 2020
See
https://www.pacermonitor.com/view/SGZYKGY/Westlane_Financing_Inc__insbke-20-05416__0001.0.pdf?mcid=tGE4TAMA
represented by: David R. Krebs, Esq.
HESTERr BAKER KREBS LLC
E-mail: dkrebs@hbkfirm.com
In re Jimmy G. Greer and Brenda K. Greer
Bankr. D. Kan. Case No. 20-11212
Chapter 11 Petition filed September 28, 2020
represnted by: KLENDA AUSTERMAN LLC
In re Amazing Security & Investigations,LLC
Bankr. D. Md. Case No. 20-18791
Chapter 11 Petition filed September 28, 2020
See
https://www.pacermonitor.com/view/NAWEZJI/Amazing_Security__InvestigationsLLC__mdbke-20-18791__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert N. Grossbart, Esq.
GROSSBART, PORTNEY & ROSENBERG, P.A.
E-mail: Robert@Grossbartlaw.com
In re TG Serenity Wellness, Limited Liability Company
Bankr. D. Md. Case No. 20-18801
Chapter 11 Petition filed September 28, 2020
See
https://www.pacermonitor.com/view/7VV42UQ/TG_Serenity_Wellness_Limited_Liability__mdbke-20-18801__0001.0.pdf?mcid=tGE4TAMA
represented by: Dennis J. Shaffer, Esq.
WHITEFORD, TAYLOR & PRESTON, LLP
E-mail: dshaffer@wtplaw.com
In re Jerry Wayne Ramer
Bankr. E.D. Okla. Case No. 20-80931
Chapter 11 Petition filed September 28, 2020
represented by: Jimmy Veith, Jimmy, Esq.
In re Julie Barela
Bankr. C.D. Cal. Case No. 20-12724
Chapter 11 Petition filed September 29, 2020
represented by: Thomas Ure, Esq.
In re 712 Timber Pitt 1, LLC
Bankr. D.D.C. Case No. 20-00401
Chapter 11 Petition filed September 29, 2020
See
https://www.pacermonitor.com/view/Y3AUFVA/712_Timber_Pitt_1_LLC__dcbke-20-00401__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel A. Staeven, Esq.
FROST & ASSOCIATES, LLC
E-mail: daniel.staeven@frosttaxlaw.com
In re 712 Timber, LLC
Bankr. D.D.C. Case No. 20-00400
Chapter 11 Petition filed September 29, 2020
See
https://www.pacermonitor.com/view/YXPESZI/712_Timber_LLC__dcbke-20-00400__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel A. Staeven, Esq.
FROST & ASSOCIATES, LLC
E-mail: daniel.staeven@frosttaxlaw.com
In re 712 Timber Pitt 2, LLC
Bankr. D.D.C. Case No. 20-00402
Chapter 11 Petition filed September 29, 2020
See
https://www.pacermonitor.com/view/ZMPEXEI/712_Timber_Pitt_2_LLC__dcbke-20-00402__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel A. Staeven, Esq.
FROST & ASSOCIATES, LLC
E-mail: daniel.staeven@frosttaxlaw.com
In re John A C Cartner
Bankr. D.D.C. Case No. 20-00399
Chapter 11 Petition filed September 29, 2020
represented by: Daniel Staeven, Esq.
In re Thomas D. Brown
Bankr. M.D. Fla. Case No. 20-05445
Chapter 11 Petition filed September 29, 2020
represented by: Jeffrey Ainsworth, Esq.
In re Stop & Go Airport Shuttle Service, Inc.
Bankr. N.D. Ill. Case No. 20-17814
Chapter 11 Petition filed September 29, 2020
See
https://www.pacermonitor.com/view/JQM7WLY/Stop__Go_Airport_Shuttle_Service__ilnbke-20-17814__0001.0.pdf?mcid=tGE4TAMA
represented by: David P. Lloyd, Esq.
DAVID P. LLOYD, LTD.
E-mail: info@davidlloydlaw.com
In re Tired Texan BBQ, LLC
Bankr. D. Neb. Case No. 20-81197
Chapter 11 Petition filed September 29, 2020
See
https://www.pacermonitor.com/view/J3EV7IY/Tired_Texan_BBQ_LLC__nebke-20-81197__0001.0.pdf?mcid=tGE4TAMA
represented by: Patrick Patino, Esq.
PATINO LAW OFFICE LLC
E-mail: patrick@omaha@BKlaw.com
In re Continental Coiffures, Ltd.
Bankr. W.D. Pa. Case No. 20-22808
Chapter 11 Petition filed September 29, 2020
See
https://www.pacermonitor.com/view/USIQ3NA/Continental_Coiffures_Ltd__pawbke-20-22808__0001.0.pdf?mcid=tGE4TAMA
represented by: Jason L. Ott, Esq.
JACKSON KELLY PLLC
E-mail: jason.ott@jacksonkelly.com
In re H&S Express, Inc.
Bankr. W.D. Pa. Case No. 20-22811
Chapter 11 Petition filed September 29, 2020
See
https://www.pacermonitor.com/view/VAPT73Y/HS_Express_Inc__pawbke-20-22811__0001.0.pdf?mcid=tGE4TAMA
represented by: Corey J. Sacca, Esq.
BONONI & COMPANY, P.C.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
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the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
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then-ending.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
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