/raid1/www/Hosts/bankrupt/TCR_Public/201002.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, October 2, 2020, Vol. 24, No. 275
Headlines
1716 I LLC: Has Until Nov. 23 to File Plan & Disclosures
2127 FLATBUSH: Seeks to Hire Rosenberg Musso as Legal Counsel
4433 FLORIN: Has Until Oct. 8 to File Plan & Disclosures
4S PROPERTY: Seeks to Hire David Schroeder as Legal Counsel
4S TRANSPORTATION: Seeks to Hire David Schroeder as Legal Counsel
ACADIAN CYPRESS: Says Negotiations with SBA for EDIL Loan Ongoing
ADESSE GLOBAL: Seeks to Hire Kaplan Merzlak as Accountant
ADVANZEON SOLUTIONS: Seeks to Hire Stichter Riedel as Counsel
ANDREW CULLEN: Seeks Approval to Hire Accountant
APOLLO ENDOSURGERY: Discontinues Employee Furlough Program
ARANDELL HOLDINGS: Secures $31.3M Stalking Horse Bid in Chapter 11
ARGYLE CAPITAL: Has Until Oct. 9 to File Plan & Disclosures
AYTU BIOSCIENCE: Delays Filing of Fiscal 2020 Annual Report
B-LINE CARRIERS: Seeks to Hire Stichter Riedel as Legal Counsel
BAINBRIDGE UINTA: Hearing on Cash Collateral Use Set for Oct. 9
BAY HARBOR: Seeks to Hire Crowe & Dunlevy as Legal Counsel
BENEVIS CORP: Seeks Approval to Hire Conway MacKenzie, Appoint CRO
BK TECHNOLOGIES: U.S. Trustee Objects to Plan & Disclosures
BM318 LLC: Seeks to Hire Joyce W. Lindauer as Legal Counsel
BOOTS SMITH: Has Until Oct. 29 to File Plan & Disclosure
BRASSERIE FELIX: Seeks to Hire Morrison Tenenbaum as Legal Counsel
BREAD & BUTTER: Seeks Plan Exclusivity Extension Thru Nov. 5
BROUSSARD INVESTMENT: Hires Weinstein & St. Germain as Counsel
C2 PLUMBING: Unsecured Creditors to Recover 47.84% Over 5 Years
CAITHNESS SHEPHERDS: Fitch Cuts Series A-1-NG Certs to 'BB'
CALIFORNIA PIZZA: Committee Taps Berkeley as Financial Advisor
CATSKILL DISTILLING: Files Liquidating Plan After $3.09-Mil. Sale
CBL & ASSOCIATES: Extends Agreed Petition Date to Oct. 15
CBL & ASSOCIATES: Michael Ashner Quits as Director
CENTRIC BRANDS: Auction of SWIMS AS Stake Cancelled
CEQUENCE ENERGY: CCAA Proceedings Concluded
CHIEF OILFIELD: Seeks Approval to Hire Brady Martz as Accountant
CHILLER SERVICES: Unsecured Creditors to Have 5% Recovery in Plan
CHINOS HOLDINGS: U.S. Trustee Objects to Prearranged Plan
CLEVELAND-CLIFFS INC: Moody's Reviews B1 CFR for Downgrade
COASTAL INTERNATIONAL: Unsecureds to Have 3.16% Recovery in Plan
COMSTOCK MINING: DeCoria Maichel Replaces Deloitte as Auditor
CRAIG A. POPE: $169K Sale of Whitewater Property to Murphys Okayed
DAMEN 4 MANAGEMENT: Seeks to Hire Cozen O'Connor as New Counsel
DELTA TOPCO: Moody's Assigns B3 CFR, Outlook Stable
DEMLOW PRODUCTS: Taps Wilson Auction as Real Estate Broker
DESTINATION MATERNITY: Wins Nov. 16 Plan Exclusivity Extension
DIXON PAVING: Unsecureds Owed $1.23M to Get $50,000 in Plan
DPW HOLDINGS: Explores Potential Rights Offering
ECHO ENERGY: Creditors to Get Paid From Proceeds of Asset Sale
ESCALON MEDICAL: Posts $702K Net Loss in Fiscal 2020
ETHEMA HEALTH: Incurs $10.3 Million Net Loss in First Quarter
EVANGELICAL HOMES: Fitch Cuts Rating on 2013 Bonds to 'BB'
FECK PROPERTIES: Seeks Approval to Hire Booking Manager
FIRST FLORIDA LIVING: Solicitation Period Extended to Dec. 31
FRONTIER COMMUNICATIONS: Fitch Rates $1.65BB DIP Financing 'BB+'
FRONTIER COMMUNICATIONS: Moody's Assigns B3 CFR, Outlook Stable
GARRETT MOTION: Entwistle Represents Gabelli Funds, S. Muoio
GKS CORP: $19.2M Sale of All Assets to Triple M Approved
GLOBAL ACQUISITIONS: Case Summary & 6 Unsecured Creditors
GRIFFON CORP: Fitch Affirms B+ LongTerm IDR, Then Withdraws Rating
IBIO INC: Delays Filing of June 30 Annual Report
INCLUSIVE HEALTHCARE: Seeks to Hire Finas Cowan as Accountant
INCLUSIVE HEALTHCARE: Seeks to Hire Wiley Law as Legal Counsel
INDUSTRIAL CRANE: Case Summary & 20 Largest Unsecured Creditors
INFOBLOX INC: Fitch Lowers LongTerm IDR to B-, Outlook Stable
INFRASTRUCTURE SOLUTION: Komatsu Objects to Joint Disclosure & Plan
JAGUAR HEALTH: Issues 4.8M Common Shares From Aug. 13 to Sept. 25
JAI BANGALAMUKHI: Seeks to Hire Galloway Wettermark as Counsel
JMR100 LLC: Seeks to Hire Joyce W. Lindauer as Legal Counsel
JOHN VARVATOS: Seeks 4-Month Plan Exclusivity Extension
LA SALLE UNIVERSITY: Fitch Lowers Issuer Default Rating to BB+
LAKELAND HOLDINGS: S&P Raises ICR to 'CCC+', Outlook Negative
LAMBERT'S CONSTRUCTION: Unsecureds to Get 25% Dividend in Plan
LAS VEGAS MONORAIL: Nov. 3 Auction of Substantially All Assets
LATAM AIRLINES: Wants Plan Exclusivity Until March Next Year
LIBBEY GLASS: United Steelworkers Object to Disclosure Motion
LIBERTY COMMUNICATIONS: Fitch Affirms 'B+' LT IDR, Outlook Stable
LK SAVAGE: Unsec. Creditors to Get Paid From Remaining Cash Assets
LOCK HAVEN UNIVERSITY: S&P Lowers Bond Rating to 'BB'
LONESTAR RESOURCES INC: Files Chapter 11 Bankruptcy Protection
LONESTAR RESOURCES: Case Summary & 30 Largest Unsecured Creditors
LONESTAR RESOURCES: Files Chapter 11 With Prepackaged Plan
MILLMAC CORPORATION: Unsecured Creditors to Split $120K in Plan
MIRAGE DENTAL: Unsecureds to Receive 51% If Class Votes for Plan
MURPHY SHIPPING: Seeks to Hire Bradford Jackson as Accountant
NEIMAN MARCUS: Moody's Assigns Caa1 CFR on Bankruptcy Emergence
OASIS PETROLEUM: Files for Chapter 11 With Prepackaged Plan
OMAGINE INC: Asks Court to Extend Plan Exclusivity Thru Dec. 7
OUTDOOR BY DESIGN: Oct. 20 Auction of Substantially All Assets
PACIFIC DRILLING SA: Skips $31.4M Interest Payment Due Oct. 1, 2020
PACIFICO NATIONAL: Seeks to Hire Thomas H Yardley as Counsel
PALAZZA SFT: Crusco Family Trust Objects to Disclosure Statement
PATRIOT WELL: Committee Taps Carl Marks as Financial Advisor
PENNGOOD LLC: Unsecured Creditors May Recover 13.87% Over 5 Years
PETCO HOLDINGS: S&P Alters Outlook to Postive, Affirms 'CCC+' ICR
PETSMART INC: S&P Alters Outlook to Positive, Affirms 'B-' ICR
POST OFFICE SQUARE: Developer Files for Chapter 11 Bankruptcy
RAYNOR SHINE: Seeks to Hire NEORR & Associates as Tax Consultant
REMINGTON OUTDOOR: $13M Sale of Business Assets to Roundhill Okayed
REMINGTON OUTDOOR: $30.5M Sale of Barnes Bullet Business Assets OKd
REMINGTON OUTDOOR: $30M Sale of Marlin Business to Sturm Approved
REMINGTON OUTDOOR: Sale of Lonoke Ammunition Business & IP Approved
REMINGTON OUTDOOR: Vista Outdoor Named Successful Bidder
REMORA PETROLEUM: Targets Oct. 21 Confirmation of Plan
REVACH VENTURE: Voluntary Chapter 11 Case Summary
RONNA'S RUFF: Plan Exclusivity Extended Thru November 23
ROSEGOLD HOTELS: Holiday Hospitality Objects to Plan Disclosures
ROSEGOLD HOTELS: West Town Bank Objects to Disclosure Statement
SCIENTIFIC GAMES: Tim Throsby to Serve as Independent Director
SEMILEDS CORP: Stockholders Pass All Proposals at Annual Meeting
SIERRA ENTERPRISES: S&P Affirms 'B-' ICR; Outlook Negative
SIGMA LOGISTICS: Projects 2.88% Recovery for Unsecureds in Plan
SIX FLAGS: S&P Lowers ICR to 'B-', Outlook Negative
STANLEY C. CHESTNUT: $125K Cash Sale of Goldsboro Property Approved
TAILORED BRANDS: Committee Taps Back Bay Management as Consultant
TAYLOR BUILDING: $11.1K Sale of Forklift to Wilson Confirmed
TEMPUR SEALY: Fitch Assigns 'BB' LongTerm IDR, Outlook Stable
TOPGOLF INT'L: Moody's Hikes CFR to Caa1 & Alters Outlook to Stable
TRANSOCEAN LTD: S&P Raises ICR to 'CCC-' Following Debt Exchange
TRI-STATE PAIN: Court Extends Plan Exclusivity Until December 2
U.S. ANESTHESIA: S&P Alters Outlook to Negative, Affirms 'B' ICR
VIRTU FINANCIAL: Fitch Alters Outlook on BB- LT IDR to Stable
VISTA PROPPANTS: Unsecured Creditors Have 2 Options in Joint Plan
WESTERN ROBIDOUX: Wants Plan Exclusivity Extended Thru Nov. 3
WHITE BIRCH: October 7 Plan Confirmation Hearing Set
WHITE CAP: Moody's Assigns B2 CFR, Outlook Stable
WHITE CAP: S&P Assigns 'B' Issuer Credit Rating; Outlook Stable
WHITING PETROLEUM: Court Enters Plan Conifrmation Order
WPX ENERGY: Moody's Puts Ba3 CFR on Review for Upgrade
[*] Cole Schotz's Michael Sirota Named New Jersey Trailblazer
[*] James T. Bentley Joins Winston & Strawn as Bankruptcy Partner
[*] Michaela Crocker Joins Katten's Insolvency Practice in Dallas
[^] BOOK REVIEW: Mentor X
*********
1716 I LLC: Has Until Nov. 23 to File Plan & Disclosures
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Judge S. Martin Teel, Jr. of the U.S. Bankruptcy Court for the
District of Columbia has entered an order within which the time for
debtor 1716 I LLC to file a plan and disclosure statement is
extended to and including Nov. 23, 2020.
A full-text copy of the order dated August 14, 2020, is available
at https://tinyurl.com/y6q9pxmo from PacerMonitor at no charge.
The Debtor is represented by:
Wendell W. Webster, Esq.
1775 K Street, NW, Suite 290
Washington, DC 20006
Nancy Alper, Esq.
441 4th Street, NW, Suite 1010S
Washington, DC20001
About 1716 I
1716 I LLC filed for Chapter 11 bankruptcy protection (Bankr.
D.D.C. Case No. 19-00699) on Oct. 23, 2019. The Hon. S. Martin
Teel, Jr. oversees the case. In its petition, the Debtor was
estimated to have $100,000 to $500,000 in assets and $1 million to
$10 million in liabilities. The petition was signed by Charles
Zhou, shareholder and principal. The Debtor is represented by
Wendell W. Webster, Esq., at Webster & Fredrickson, PLLC.
2127 FLATBUSH: Seeks to Hire Rosenberg Musso as Legal Counsel
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2127 Flatbush Ave, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to hire Rosenberg, Musso
& Weiner as its legal counsel.
The firm will render the following professional services in
connection with the Debtor's Chapter 11 case:
a) advise the Debtor with respect to its powers and duties;
b) prepare legal papers; and
c) perform all other legal services for the Debtor.
The firm received a retainer fee of $7,500 from Gene Burshtein, a
member of the Debtor.
Rosenberg Musso represents no interest adverse to applicant as
debtor-in-possession or the estate.
The firm can be reached through:
Rosenberg, Musso & Weiner, LLP
26 Court Street, Suite 2211
Brooklyn, NY 11242
Telephone: (718) 855-6840
About 2127 Flatbush Ave Inc.
2127 Flatbush Ave Inc., based in Brooklyn, New York, is a Single
Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). The
Company owns a property located at 2127 Flatbush Avenue, Brooklyn,
NY, valued by the Company at $374,000.
2127 Flatbush Ave Inc. filed for Chapter 11 bankruptcy (Bankr.
E.D.N.Y. Case No. 19-45430) on September 11, 2019, listing total
assets of $374,000 and total liabilities of $1,107,658. The
petition was signed by Gene Burshtein, shareholder.
Law Office of Mark Bernstein is Debtor's legal counsel.
4433 FLORIN: Has Until Oct. 8 to File Plan & Disclosures
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On August 13, 2020 at 1:00 p.m., the U.S. Bankruptcy Court for the
Central District of California, San Fernando Valley Division, held
a chapter 11 status conference for Debtor 4433 Florin Road, LLC.
On August 18, 2020, Judge Victoria S. Kaufman ordered that:
* Debtor must file a proposed chapter 11 plan and related
disclosure statement no later than October 8, 2020;
* the Court will hold a continued chapter 11 status conference on
October 22, 2020 at 1:00 p.m.; and
* the Debtor or any appointed chapter 11 trustee must file a status
report, to be served on the Debtor’s 20 largest unsecured
creditors, all secured creditors, and the United States trustee, no
later than October 8, 2020.
A full-text copy of the order dated August 18, 2020, is available
at https://tinyurl.com/y2twu52c from PacerMonitor at no charge.
About 4433 Florin Road
4433 Florin Road, LLC is a Single Asset Real Estate (as defined in
11 U.S.C. Section 101(51B)), whose principal assets are located at
4433 Florin Road Sacramento, CA 95823.
4433 Florin Road filed a Chapter 11 petition (Bankr. S.D. Cal. Case
No. 20-11047) on June 11, 2020. The Hon. Victoria S. Kaufman
oversees the case. Douglas M. Neistat, Esq. of G&B LAW, LLP, is
the Debtor's counsel. At the time of filing, Debtor had $1 million
to $10 million assets and liabilities.
4S PROPERTY: Seeks to Hire David Schroeder as Legal Counsel
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4S Property Investments, LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of Missouri to hire David
E. Schroeder and the law firm of David Schroeder Law Office, P.C.
as its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
(a) advise the Debtor with respect to its powers and duties;
(b) attend meetings and represent Debtor in negotiations;
(c) take all necessary actions to protect and preserve
Debtor's bankruptcy estate;
(d) prepare legal papers;
(e) negotiate and prosecute all contracts for the sale of
assets, plan of reorganization, disclosure statement and all
related agreements or documents; and
(f) appear before the bankruptcy court and protect the
interest of Debtor's estate before the court; and
(g) perform all other necessary legal services.
The firm will be paid at hourly rates as follows:
David E. Schroeder $325
Paralegal $90
The firm will receive a sum of $6,166.25 as general retainer.
David Schroeder, Esq., disclosed in court filings that his firm is
disinterested within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
David E. Schroeder, Esq.
DAVID SCHROEDER LAW OFFICE, P.C.
1524 E. Primrose, Suite A
Springfield, MO 65804
Telephone: (417) 890-1000
Facsimile: (417) 886-8563
E-mail: bk1@dschroederlaw.com
About 4S Property Investments, LLC
4S Property Investments, LLC, a Rogersville, Mo.-based company,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Mo. Case No. 20-60848) on September 17, 2020.
At the time of the filing, Debtor had estimated assets of between
$500,001 and $1 million and liabilities of the same range.
David Schroeder Law Offices, P.C. is Debtor's legal counsel.
4S TRANSPORTATION: Seeks to Hire David Schroeder as Legal Counsel
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4S Transportation, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Missouri to hire David E.
Schroeder and the law firm of David Schroeder Law Office, P.C. as
its legal counsel.
The firm will provide these services in connection with the
Debtor's Chapter 11 case:
(a) advise Debtor with respect to its powers and duties;
(b) attend meetings and represent Debtor in negotiations;
(c) take all necessary actions to protect and preserve
Debtor's bankruptcy estate;
(d) prepare legal papers;
(e) negotiate and prosecute all contracts for the sale of
assets, plan of reorganization, disclosure statement and all
related agreements or documents; and
(f) appear before the bankruptcy court and protect the
interest of Debtor's estate before the court; and
(g) perform all other necessary legal services.
The firm will be paid at hourly rates as follows:
David E. Schroeder $325
Paralegal $90
The firm will receive a sum of $6,296.25 as general retainer.
David Schroeder, Esq., disclosed in court filings that his firm is
disinterested within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
David E. Schroeder, Esq.
DAVID SCHROEDER LAW OFFICE, P.C.
1524 E. Primrose, Suite A
Springfield, MO 65804
Telephone: (417) 890-1000
Facsimile: (417) 886-8563
E-mail: bk1@dschroederlaw.com
About 4S Transportation, LLC
4S Transportation, LLC is a licensed and bonded freight shipping
and trucking company running freight hauling business from
Rogersville, Mo.
4S Transportation sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Mo. Case No. 20-60850) on September
17, 2020.
At the time of the filing, Debtor had estimated assets of less than
$50,000 and liabilities of between $500,001 and $1 million.
David Schroeder Law Offices, P.C. is Debtor's legal counsel.
ACADIAN CYPRESS: Says Negotiations with SBA for EDIL Loan Ongoing
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Acadian Cypress & Hardwoods, Inc., filed amendments to the
Disclosure Statement accompanying its Chapter 11 Plan of
Reorganization dated August 13, 2020.
Class 3 Home Bank USDA Claim. The claim is a claim under the
Debtor's flood insurance policy and has a damage loss element (Home
Bank Collateral), a lost business element and a bad faith element.
A similar type claim arising out of wind damage at the same
location was shared 50/50 with Home Bank.
Rollover of the Current DIP Loan. The DIP Loan shall be reduced by
$50,000 and the $50,000 will be deemed to be a contribution to
capital and serve as a new equity contribution.
It is believed upon exit from Chapter 11 the Debtor will be
immediately eligible for an EDIL loan. The application is being
worked on by Dillard Capital and direct discussion is in place
between a representative of the Debtor and the SBA concerning the
loan. It is believed the loan amount with a grant portion will be
in excess of $450,000 and will fund within six months of the
Effective Date.
A full-text copy of the Amended Disclosure Statement dated August
13, 2020, is available at https://tinyurl.com/y4mdz8xf from
PacerMonitor.com at no charge.
The Debtor is represented by:
Douglas S. Draper
Leslie A. Collins
Greta M. Brouphy
Heller, Draper, Patrick, Horn & Manthey, L.L.C.
650 Poydras Street, Suite 2500
New Orleans, LA 70130-6103
Telephone:(504)299-3300/Fax:(504)299-3399
E-mail: ddraper@hellerdraper.com
E-mail: lcollins@hellerdraper.com
E-mail: gbrouphy@helldraper.com
About Acadian Cypress
Acadian Cypress & Hardwoods, Inc. --
http://www.acadianhardwoods.net/-- manufactures lumber, plywood,
siding, shingles, flooring, fencing and molding profiles.
Acadian Cypress sought Chapter 11 protection (Bankr. E.D. La. Case
No. 19-12205) on April 15, 2019. In the petition signed by Frank
Vallot, president, the Debtor was estimated to have assets and
liabilities ranging from $1 million to $10 million. Judge Jerry A.
Brown oversees the case.
The Debtor tapped Heller, Draper, Patrick, Horn & Manthey, LLC as
its legal counsel, and Raizner Slania LLP as its special counsel.
ADESSE GLOBAL: Seeks to Hire Kaplan Merzlak as Accountant
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Adesse Global Cosmetics, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Arizona to hire Kaplan
Merzlak, P.C. as its accountant.
The firm will provide tax, accounting and bookkeeping advice to the
Debtor prior to its bankruptcy filing.
Kaplan Merzlak will be paid at hourly rates ranging from $90 to
$325.
The firm does not have any connection with the Debtor, its
creditors, or any other party in interest.
The firm can be reached through:
Kaplan Merzlak, P.C.
7011 Orchard Lake Road, Suite 100
West Bloomfield, MI 48322
Telephone: (248) 851-6200
Facsimile: (248) 851-6286
E-mail: kminfo@kkacpa.com
About Adesse Global Cosmetics
Adesse Global Cosmetics, Inc., a cosmetics company with offices in
New York City and Fountain Hills, Ariz., filed its voluntary
petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz.
Case No. 20-07849) on July 2, 2020.
At the time of the filing, Debtor had estimated assets of between
$50,000 and $100,000 and liabilities of between $100,000 and
$500,000.
Ryan Rapp Underwood & Pacheco PLC is Debtor's legal counsel.
Dawn Maguire has been appointed Subchapter V trustee in Debtor's
case.
ADVANZEON SOLUTIONS: Seeks to Hire Stichter Riedel as Counsel
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Advanzeon Solutions, Inc. seeks approval from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Stichter, Riedel,
Blain & Postler, P.A. as its counsel.
The following services are to be rendered by Stichter Riedel:
a. advise the Debtor with respect to its powers and duties;
b. prepare legal papers;
c. appear before the court and the U.S. Trustee;
d. assit in negotiations with creditors and other parties in
interest in formulating a plan of reorganization;
e. represent the Debtor in all adversary proceedings and other
matters involving the administration of the case;
f. represent the Debtor in negotiations with potential
financing sources;
g. perform all other legal services for the Debtor.
The Debtor has agreed to compensate Stichter Riedel on an hourly
basis in the case in accordance with the firm's ordinary and
customary rates.
Stichter Riedel received the aggregate sum of $17,000 on behalf of
the Debtor as a retainer, prior to the filing of the case.
Additionally, the Debtor has agreed, subject to court approval, to
provide an addition $33,000 from the proceeds of debtor in
possession financing or other sources as a post-petition retainer.
Daniel R. Fogarty, Esq., an attorney at Stichter Riedel, disclosed
in court filings that the firm and its attorneys are "disinterested
persons" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Daniel R. Fogarty, Esq.
Stichter, Riedel, Blain & Postler, P.A.
110 East Madison Street, Suite 200
Tampa, FL 33602
Telephone: (813) 229-0144
E-mail: dfogarty@srbp.com
About Advanzeon Solutions, Inc.
Based in Tampa, Fla., Advanzeon Solutions, Inc. provides behavioral
health, substance abuse and pharmacy management services, as well
as sleep apnea programs, for employers, Taft-Hartley health and
welfare Funds, and managed care companies throughout the United
States.
Advanzeon Solutions sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06764) on September
7, 2020.
At the time of the filing, Debtor had estimated assets of between
$500,000 and $1 million and liabilities of between $1 million and
$10 million. The petition was signed by Clark A. Marcus, chief
executive officer.
Stichter, Riedel, Blain & Postler, P.A. is Debtor's legal counsel.
ANDREW CULLEN: Seeks Approval to Hire Accountant
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Andrew Cullen, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Ohio to hire a certified public
accountant.
The Debtor taps John Somerville as its accountant to assist in
preparing financial statement, monthly operating reports and tax
returns.
The accountant will be paid monthly for services to be performed.
Mr. Somerville holds office at:
John Somerville, CPA
9620 Colerain Ave, Suite 27
Cincinnati, OH, 45251
Telephone: (513) 434-8242
E-mail: john@somerville-co.com
About Andrew Cullen
Andrew Cullen, LLC offers residential customers electrical
contracting services. It conducts business under the name Cullen
Electric. Visit https://www.cullenelectriccincinnati.com for more
information.
Andrew Cullen sought Chapter 11 protection (Bankr. S.D. Ohio. Case
No. 20-11715) on June 15, 2020. At the time of the filing, Debtor
disclosed total assets of $155,629 and total liabilities of
$1,056,076.
Judge Jeffery P. Hopkins oversees the case.
Debtor is represented by Goering & Goering, LLC.
APOLLO ENDOSURGERY: Discontinues Employee Furlough Program
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Apollo Endosurgery, Inc., discontinued the employee furlough
program previously announced on its Current Report on Form 8-K,
filed with the Securities and Exchange Commission on April 20,
2020. Of the U.S.-based employees originally placed on furlough,
35 employees will not be recalled. The normalized annual
compensation costs associated with these positions prior to
previously announced compensation reductions due to the COVID-19
pandemic were approximately $5.0 million. Total severance costs in
the third quarter of 2020 are expected to be approximately $0.2
million to $0.3 million.
Expects Higher Third Quarter Revenue
Apollo reported its financial results for the second quarter of
2020 and provided a revenue outlook for the third quarter of 2020
on Aug. 4, 2020. At that time, during the earnings conference
call, the Company's management commented on COVID-19 risks and its
historical experience of lower procedure volumes in the third
quarter especially in its OUS markets. As a result, management
indicated that third quarter sales were expected to be higher
sequentially compared to the second quarter of 2020, but still
below the third quarter of 2019. Sales in the third quarter of
2019 were $11.3 million.
Since then, third quarter 2020 revenue has exceeded those
expectations. As a result, the Company expects third quarter 2020
revenue to exceed its third quarter 2019 revenue.
About Apollo Endosurgery
Apollo Endosurgery, Inc. -- http://www.apolloendo.com/-- is a
medical technology company focused on less invasive therapies to
treat various gastrointestinal conditions, ranging from
gastrointestinal complications to the treatment of obesity.
Apollo's device-based therapies are an alternative to invasive
surgical procedures, thus lowering complication rates and reducing
total healthcare costs. Apollo's products are offered in over 75
countries and include the OverStitch Endoscopic Suturing System,
the OverStitch Sx Endoscopic Suturing System, and the ORBERA
Intragastric Balloon.
Apollo Endosurgery incurred a net loss of $27.43 million in 2019
compared to a net loss of $45.78 million in 2018. As of June 30,
2020, the Company had $60.09 million in total assets, $70.67
million in total liabilities, and a total stockholders' deficit of
$10.58 million.
KPMG LLP, in Austin, Texas, the Company's auditor since 2014,
issued a "going concern" qualification in its report dated March
26, 2020 citing that the Company has suffered recurring losses from
operations, cash flow deficits and debt covenant violations and has
an accumulated deficit that raise substantial doubt about its
ability to continue as a going concern.
ARANDELL HOLDINGS: Secures $31.3M Stalking Horse Bid in Chapter 11
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Arthur Thomas of BizTimes reports that Menomonee Falls-based
Arandell Corp. has secured a $31.3 million stalking horse bid in
its ongoing Chapter 11 bankruptcy case. The bid comes from
Arandell Acquisition Co., an entity created by Pennsylvania-based
private equity firm Saothair.
About Arandell Holdings
Arandell -- https://www.arandell.com/ -- is a commercial printing
company that is located in Menomonee Falls, Wisconsin. The
Company's largest customers are blue chip major retailers and
recognized brands using direct mail catalogs to promote both
in-store and e-commerce sales. Arandell's products and services
include the production and delivery of higher-end catalogs and
other promotional products along with related data analytics
services supporting the needs of marketers.
Arandell Holdings, Inc., based in Menomonee Falls, WI, and its
debtor-affiliates sought Chapter 11 protection (Bankr. D. Del. Lead
Case No. 20-11941) on Aug. 13, 2020. The Hon. John T. Dorsey
presides over the case.
In the petition signed by Bradley J. Hoffman, president and CEO,
Arandell was estimated to have $10 million to $50 million in assets
and $100 million to $500 million in liabilities.
The Debtors tapped STEINHILBER SWANSON LLP, and YOUNG CONAWAY
STARGATT & TAYLOR, LLP, as counsel. VON BRIESEN & ROPER S.C., is
special corporate counsel. HARNEY PARTNERS, is the financial
advisor. PROMONTORY POINT CAPITAL, is the investment banker. BMC
GROUP, INC., is the claims and noticing agent.
ARGYLE CAPITAL: Has Until Oct. 9 to File Plan & Disclosures
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Judge Christopher M. Alston of the U.S. Bankruptcy Court for the
Western District of Washington at Seattle has entered an order
within which debtor Argyle Capital Group LLC shall file a plan and
disclosure statement by October 9, 2020.
A full-text copy of the order dated August 18, 2020, is available
at https://tinyurl.com/y3e8uvj7 from PacerMonitor at no charge.
About Argyle Capital Group
Argyle Capital Group, LLC, a company engaged in renting and leasing
real estate properties, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Wash. Case No. 20-11711) on June 22,
2020. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Judge Christopher M. Alston oversees the case. The Debtor
has tapped Stoll Petteys, PLLC as its legal counsel.
AYTU BIOSCIENCE: Delays Filing of Fiscal 2020 Annual Report
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Aytu BioScience, Inc. filed a Form 12b-25 with the Securities and
Exchange Commission notifying the delay of the filing of its Annual
Report on Form 10-K for the year ended June 30, 2020. Aytu
BioScience has postponed the filing of its Annual Report beyond
Sept. 28, 2020, to allow for additional time to finalize its
financial statements due to the additional workload created by the
recently completed acquisition of Innovus Pharmaceuticals and the
Cerecor, Inc. pediatric prescription portfolio and to accommodate
scheduling needs related to COVID-19. The Company expects to file
the Form 10-K with the Commission no later than fifteen calendar
days after the original prescribed date, as permitted by Rule
12b-25.
About Aytu BioScience
Englewood, Colorado-based Aytu BioScience, Inc. (OTCMKTS:AYTU) --
http://www.aytubio.com-- is a commercial-stage specialty
pharmaceutical company focused on commercializing novel products
that address significant patient needs. The company currently
markets a portfolio of prescription products addressing large
primary care and pediatric markets. The primary care portfolio
includes (i) Natesto, an FDA-approved nasal formulation of
testosterone for men with hypogonadism, (ii) ZolpiMist, an
FDA-approved oral spray prescription sleep aid, and (iii) Tuzistra
XR, an FDA-approved 12-hour codeine-based antitussive syrup.
Aytu Bioscience reported a net loss of $27.13 million for the year
ended June 30, 2019, compared to a net loss of $10.18 million for
the year ended June 30, 2018. As of March 31, 2020, the Company
had $158.95 million in total assets, $73.25 million in total
liabilities, and $85.70 million in total stockholders' equity.
Plante & Moran, PLLC, in Denver, CO, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
Sept. 26, 2019, on the Company's consolidated financial statements
for the year ended June 30, 2019, citing that the Company has
suffered recurring losses from operations and has an accumulated
deficit that raise substantial doubt about its ability to continue
as a going concern.
B-LINE CARRIERS: Seeks to Hire Stichter Riedel as Legal Counsel
---------------------------------------------------------------
B-Line Carriers, Inc. seeks authority from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Stichter, Riedel,
Blain & Postler, P.A. as its legal counsel.
Exscien Corporation requires Stichter Riedel to:
a. render legal advice with respect to the Debtor's powers and
duties as debtor in possession, the continued operation of the
Debtor's business, and the management of its property;
b. prepare on behalf of the Debtor necessary motions,
applications, notices, orders, reports, pleadings, and other legal
papers;
c. appear before this Court and the Office of the U.S. States
Trustee to represent and protect the interests of the Debtor;
d. assist with and participate in negotiations with creditors
and other parties in interest in formulating a plan of
reorganization, draft such a plan and a related disclosure
statement, and take necessary legal steps to confirm such a plan;
e. represent the Debtor in all adversary proceedings,
contested matters, and matters involving the administration of this
case;
f. represent the Debtor in negotiations with potential
financing sources and preparing contracts, security instruments, or
other documents necessary to obtain financing; and
g. perform all other legal services that may be necessary for
the proper preservation and administration of this Chapter 11
case.
Stichter Riedel will be paid based upon its normal and usual hourly
billing rates. Stichter Riedel will also be reimbursed for
reasonable out-of-pocket expenses incurred.
Jodi Daniel Dubose, Esq., a partner at Stichter Riedel, assured the
court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtor and its estates.
Stichter Riedel can be reached at:
Amy Denton Harris, Esq.
Stichter, Riedel, Blain & Postler, P.A.
110 E. Madison St., Suite 200
Tampa, FL 33602
Tel: 813-229-0144
Email: aharris@srbp.com
About B-Line Carriers Inc.
B-Line Carriers, Inc., a full-service petroleum transportation
company, filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06034) on Aug.
7, 2020. The petition was signed by Jason L. Baldree, president.
At the time of filing, Debtor estimated $1 million to $10 million
in both assets and liabilities. Amy Denton Harris, Esq., at
Stichter, Riedel, Blain & Postler, P.A., represents Debtor as
counsel.
BAINBRIDGE UINTA: Hearing on Cash Collateral Use Set for Oct. 9
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas has
continued to October 9, 2020, the hearing on the request of debtors
Bainbridge Uinta Holdings, LLC, and Bainbridge Uinta, LLC, to use
cash collateral on a final basis.
Bankruptcy Judge Mark X. Mullin previously authorized Bainbridge
Uinta to use cash collateral on interim basis, and set a hearing to
consider entry of a final order for September 24. The hearing date
was first rescheduled to September 28.
Computed as of August 31, 2020, the Debtors are liable to the
Prepetition Secured Parties in the aggregate principal amount of at
least $61,900,000, plus any and all interest, fees, costs,
repayment premiums, monthly payments, expenses, charges, and other
claims, debts, or obligations of the Debtors to the Prepetition
Secured Parties.
As adequate protection, the Interim Order says the Debtors will pay
approximately $15,000 per month to the Prepetition Agent. The
monthly interest payment will vary due to the number of days in a
given month; the September 1, 2020 monthly interest payment was
$423,843.06. The Debtors' principal payment shall be $200,000 each
quarter, with the next payment due October 1, 2020. The Agent is
also granted, effective from and after the Petition Date, valid,
binding, continuing, enforceable, fully perfected, unavoidable and
first-priority replacement liens and security interests in all of
the Debtors' property and assets.
In September 2018, the Debtors acquired the Three Rivers Field from
Ultra Petroleum for a purchase price of approximately $75,000,000.
To finance the Debtors' 2018 acquisition, the Debtors entered into
a loan agreement with White Oak Global Advisors, LLC, borrowing an
original principal amount of $62,500,000. Also as part of the
acquisition, the Debtors raised over $16.5 million in equity. The
Debtors successfully operated through year end 2019, and
established proved reserves of approximately $100 million.
Unfortunately, the Global Covid-19 Pandemic and Saudi
Arabia/Russian price war combined to cause a dramatic decrease in
the demand for hydrocarbons resulting in a significant oversupply
and commensurate decrease in prices. Covid-19 rivals any prior
crisis in terms of broad, immediate economic impact. On March 7,
Saudi Arabia announced 2.3 million barrel per day production
increase in response to Russia's failure to agree to a production
cut. The dual impact of these two global crises sent crude prices
falling nearly 50% in just seven trading days.
The Lender asserts liens on the Debtors' Cash Collateral.
A copy of the Debtors' motion is available at
https://bit.ly/2FjIC7K from PacerMonitor.com.
A full-text copy of the Interim Order is available at
https://bit.ly/2RtFlW8 from PacerMonitor.com.
About Bainbridge Uinta LLC
Bainbridge Uinta, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-42794) on Sept. 1,
2020. The Company develops and operates fields to extract crude
oil and natural gas. At the time of the filing, the Debtor
estimated assets of between $50 million to $100 million and
liabilities of between $50 million to $100 million. The petition
was signed by The petition was signed by Paul D. Ching, chief
executive officer.
Joseph M. Coleman, Esq., at Kane Russell Coleman Logan PC, serves
as counsel to the Debtors. Oak Hills Securities Inc. has been
tapped as financial advisor to the Debtors. Stretto is the
Debtors' claims and noticing agent.
BAY HARBOR: Seeks to Hire Crowe & Dunlevy as Legal Counsel
----------------------------------------------------------
Bay Harbor Investment Group, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Texas to employ Crowe
& Dunlevy, P.C as its legal counsel.
Bay Harbor requires Crowe & Dunlevy to render the following legal
services:
a. provide legal advice with respect to the Debtor's powers
and duties;
b. take all necessary steps to protect the Debtor's bankruptcy
estate;
c. serve as counsel of record for the Debtor in all aspects of
the Chapter 11 Case;
d. prepare legal papers;
e. advise the Debtor with respect to corporate and litigation
matters;
f. consult with the Office of the U.S. Trustee and all other
creditors and parties-in-interest concerning the administration of
the case; and
g. provide representation and all other bankruptcy-related
legal services.
The firm's current hourly rates for restructuring work are as
follows:
Shareholders/Directors $370-600
Associates $220-285
Paraprofessionals $150-205
Prior to the petition date, Crowe & Dunlevy received $75,000 from
the Debtor as a retainer.
Vickie Driver, Esq., an attorney at Crowe & Dunlevy, disclosed in
court filings that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Vickie Driver, Esq.
Christina W. Stephenson, Esq.
Seth A. Sloan, Esq.
CROWE & DUNLEVY, P.C.
2525 McKinnon Street, Suite 425
Dallas, TX 7501
Telephone: (214) 420-2163
Facsimile: (214) 736-1762
E-mail: vickie.driver@crowedunlevy.com
christina.stephenson@crowedunlevy.com
seth.sloan@crowedunlevy.com
About Bay Harbor Investment Group, LLC
Based in Midland, Texas, Bay Harbor Investment Group, LLC primarily
engages in renting and leasing real estate properties.
Bay Harbor Investment sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-42757) on August 31,
2020. The petition was signed by Thomas Kelly, president.
At the time of the filing, Debtor had estimated assets of between
$10 million and $50 million and liabilities of the same range.
Crowe & Dunlevy, P.C. is Debtor's legal counsel.
BENEVIS CORP: Seeks Approval to Hire Conway MacKenzie, Appoint CRO
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Benevis Corp. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
Conway MacKenzie Management Services, LLC and appoint Scott Mell,
the firm's managing director, as their chief restructuring
officer.
The CRO and additional personnel from Conway MacKenzie will render
the following services:
(i) oversee all cash and liquidity management;
(ii) develop and implement cash management strategies, tactics
and processes;
(iii) oversee the Debtors' short-term cash flow forecasting
tools and related methodologies;
(iv) oversee the development and execution of a tactical
re-opening plan;
(v) identify future operational improvements, fixed cost
reductions, and additional cost savings opportunities;
(vi) lead the execution of the Debtors' strategy to optimize
its office footprint and associated liability management;
(vii) lead the development of the Debtors' strategic business
plan, and such other related forecasts;
(viii) oversee the development of restructuring plans or
strategic alternatives intended to maximize the enterprise value of
the Debtors;
(ix) assist the Debtors in preparing contingency plans in the
event that a Chapter 11 bankruptcy filing is required;
(x) support the development of the Debtors' strategic business
plan, and such other related forecasts as may be required by
lenders;
(xi) oversee the development of restructuring plans or
strategic alternatives intended to maximize the enterprise value of
the Debtors;
(xii) evaluate the short-term Debtor-prepared cash flows and
financing requirements of the Debtors;
(xiii) lead the Debtors in its planned Chapter 11 proceedings;
(xiv) assist the Debtors in obtaining court approval for use of
cash collateral or other financing;
(xv) assist the Debtors with respect to its bankruptcy-related
claims management and reconciliation process;
(xvi) assist the Debtors in development of a plan of
reorganization;
(xvii) assist management, where appropriate, in communications
and negotiations with other constituents critical to the successful
execution of the Debtors' bankruptcy proceedings;
(xviii) work with the Debtors, as appropriate, and its retained
investment banking professionals;
(xix) assist the Company in communications with key
constituents; and
(xx) perform other services as deemed appropriate and as agreed
to by the firm.
Conway MacKenzie will be paid at these hourly rates:
Managing and Senior Managing Directors $575 to $700
Analysts, Senior Associates, and Directors $415 to $500
Paraprofessionals $135 to $250
The firm is currently holding a retainer in the amount of
$200,000.
Mr. Mell disclosed in court filings that the firm is a
"disinterested person" as that term is defined by Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Scott Mell
CONWAY MACKENZIE MANAGEMENT SERVICES, LLC
2515 McKinney Avenue, Suite 1200
Dallas, TX 75201
Telephone: (214) 891-5500
E-mail: scott.mell@riveron.com
About Benevis Corp.
Benevis Corp. -- https://www.benevis.com/ -- provides non-clinical,
business support services to dental practices in 17 states.
Benevis and its affiliates sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 20-33918) on
Aug. 2, 2020.
At the time of the filing, Debtors had estimated assets of between
$100 million and $500 million and liabilities of between $1 billion
and $10 billion.
Judge David R. Jones oversees the cases.
Debtors have tapped Jackson Walker LLP as their legal counsel,
Conway MacKenzie Management Services, LLC as restructuring advisor,
and Lincoln Partners Advisors, LLC as financial advisor.
BK TECHNOLOGIES: U.S. Trustee Objects to Plan & Disclosures
-----------------------------------------------------------
The United States Trustee objects to the Third Amended Plan of
Reorganization filed by Debtor BK Technologies Inc. on June 1,
2020, on the following basis:
* Under Article 10: Other Provisions, as detailed in the
Attachment to the Plan, the Debtor proposes an injunction
“permanently enjoining those acts described in 11 U.S.C. §
363(a)(1) through (8)” against Brandon Klink and/or Michael Arlia
and against any entity owned or controlled by them at confirmation.
* While the Plan and Attachment in Article 10 cite 11 U.S.C. §
363(a)(1) through (8), the US Trustee believes that this is a
typographical error and the Debtor intended 11 U.S.C § 362(a)(1)
through (8), which relates to the stay of collection activities.
* The United States Trustee recognizes that the Court is
authorized to approve equitable relief in the form of releases
where circumstances warrant However, the Debtor has not
demonstrated that this additional equitable relief in the form of
injunctions against collection of valid debts owed by non-debtor
entities is reasonable and necessary in this case.
* The US Trustee is not satisfied that the record indicates
that all recoverable assets are being devoted to the plan. The US
Trustee views this as a disclosure issue that prevents the Court
and Creditors from making an informed decision on the adoption of a
Plan.
* The United States Trustee requests the Court deny approval of
the Plan or require the debtor to amend the Plan to remove the
injunction contained in Article 10 and that approval of the plan be
denied until adequate financial records be disclosed that allow
parties in interest to conclude that all available assets are being
devoted to the plan for the benefit of creditors.
A full-text copy of the UST's objection dated August 14, 2020, is
available at https://tinyurl.com/y5rmk3cn from PacerMonitor at no
charge.
About BK Technologies
BK Technologies Inc. filed a Chapter 11 petition (Bankr. N.D. W.Va.
Case No. 20-00170) on Feb. 27, 2020. At the time of the filing,
the Debtor had estimated assets of between $100,001 and $500,000
and liabilities of less than $50,000. Judge Frank W. Volk oversees
the case. Sheehan & Associates, P.L.L.C., is the Debtor's legal
counsel.
BM318 LLC: Seeks to Hire Joyce W. Lindauer as Legal Counsel
-----------------------------------------------------------
BM318 LLC seeks approval from the U.S. Bankruptcy Court for the
Northern District of Texas to employ Joyce W. Lindauer Attorney,
PLLC as its legal counsel.
The firm will assist the Debtor to effectuate a reorganization,
propose a plan of reorganization and effectively move forward in
its bankruptcy proceedings.
The hourly billing rates of the firm's attorneys and
paraprofessionals are as follows:
Joyce W. Lindauer $395
Kerry S. Alleyne $250
Guy H. Holman $205
Dian Gwinnup $125
Paralegals and Legal Assistants $65 to $125
The firm has been paid a retainer of $11,717, which included the
filing fee of $1,717 in connection with this proceeding.
Joyce W. Lindauer, the owner of the law practice Joyce W. Lindauer
Attorney, PLLC, and contract attorneys, Kerry S. Alleyne and Guy H.
Holman, disclosed in court filings that the firm is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Joyce W. Lindauer, Esq.
Kerry S. Alleyne, Esq.
Guy H. Holman, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
E-mail: joyce@joycelindauer.com
About BM318, LLC
BM318, LLC is a Single Asset Real Estate (as defined in 11 U.S.C.
Section 101(51B)) based in Aledo, Texas.
BM318, LLC sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Tex. Case No. 20-42789) on September 1, 2020. The
petition was signed by Tim Barton, president.
At the time of the filing, Debtor had estimated assets of between
$1 million and $10 million and liabilities of the same range.
Judge Mark X. Mullin oversees the case.
Joyce W. Lindayuer Attorney, PLLC is Debtor's legal counsel.
BOOTS SMITH: Has Until Oct. 29 to File Plan & Disclosure
--------------------------------------------------------
The United States Trustee and Debtor Boots Smith Completion
Services, LLC, filed with the U.S. Bankruptcy Court for the
Southern District of Mississippi a motion for approval of the
parties' Agreed Scheduling Order.
On Aug. 14, 2020, Judge Katharine M. Samson ordered that:
* The Debtor will maintain insurance customary and appropriate to
the Debtor’s industry(ies) and/or as required by law. The Debtor
shall immediately provide proof that the U.S. Trustee has been made
a notifying party to its insurance policies.
* The Debtor will timely file all tax returns and other required
government filings and timely pay all taxes entitled to
administrative expense priority except those being diligently
contested by appropriate proceedings.
* The Debtor shall file a disclosure statement containing
adequate information and a confirmable plan of reorganization on or
before October 29, 2020.
A full-text copy of the order dated Aug. 14, 2020, is available at
https://tinyurl.com/y66vymug from PacerMonitor at no charge.
Attorney for Debtor:
William J. Little, Jr.
Lentz & Little, P.A.
2505 14th Street; Ste. 500
Gulfport, MS 39501
Telephone: (228) 867-6050
E-mail: bill@lentzlittle.com
About Boots Smith
Boots Smith Completion Services, LLC, is an oilfield service
company, helping oil and gas companies enhance production through a
variety of applications, including completion, workover, and
optimization.
Boots Smith sought Chapter 11 protection (Bankr. S.D. Miss. Case
No. 20-51081) on July 1, 2020. At the time of filing, the Debtor
was estimated to have up to $50,000 in assets and $10 million to
$50 million in liabilities. William J. Little, Jr., Esq. of LENTZ
& LITTLE, P.A. is the Debtor's counsel.
BRASSERIE FELIX: Seeks to Hire Morrison Tenenbaum as Legal Counsel
------------------------------------------------------------------
Brasserie Felix Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to hire Morrison Tenenbaum
PLLC as its legal counsel.
The firm will render the following professional services:
a. advise the Debtor with respect to its powers and duties;
b. assist in any amendments of schedules and other financial
disclosures;
c. negotiate with the Debtor's creditors and take the
necessary legal steps to consummate a plan of reorganization;
d. prepare legal papers;
e. appear before the bankruptcy court to represent and protect
the interests of the Debtor and its estate; and
f. perform all other legal services for the Debtor.
The firm's hourly billing rates are as follows:
Lawrence F. Morrison $525
Brian J. Hufnagel $425
Associates $380
Paraprofessionals $175
On or about July 15, 2020, the firm received a retainer in the
amount of $15,000 from the Debtor.
Lawrence Morrison, Esq., a founding partner at Morrison Tenenbaum,
disclosed in court filings that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Lawrence Morrison, Esq.
Brian J. Hufnagel, Esq.
MORRISON TENENBAUM PLLC
87 Walker Street, Floor 2
New York, NY 10013
Telephone: (212) 620-0938
E-mail: lmorrison@m-t-law.com
bjhufnagel@m-t-law.com
About Brasserie Felix Inc.
Brasserie Felix Inc. is a longtime brasserie serving traditional
French cuisine located in the Soho neighborhood of New York City.
Brasserie Felix sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-42824) on July 31,
2020. The petition is signed by Alex Catteau, president.
At the time of the filing, Debtor had estimated assets of between
$100,001 and $500,000 and liabilities of the same range.
Morrison Tenenbaum, PLLC is Debtor's legal counsel.
BREAD & BUTTER: Seeks Plan Exclusivity Extension Thru Nov. 5
------------------------------------------------------------
Bread & Butter Concepts, LLC and its affiliates ask the U.S.
Bankruptcy Court for the District of Kansas to extend the Debtors'
exclusive period to file a Chapter 11 plan by 120 days through and
including November 5, 2020, and to obtain acceptance of the plan by
180 days through and including January 6, 2021.
Since the Petition Date, the Debtors were making great strides in
their efforts to reorganize, including paying all post-petition
debts on a current basis, as well as rent at all locations and
paying critical vendors, as necessary. Also, the Debtors
aggressively entered into negotiations with each and every landlord
for lease amendments.
"All our monthly operating reports have been provided to the United
States Trustee and filed with the Court. We also paid the current
United States Trustee fees. In addition, we are also in the process
of reviewing proofs of claim and filing objections where it is
appropriate," the Debtors state.
The Debtors' restaurants are:
(1) Debtor Cherry Hall opened in September 2018 and is the
event space and catering arm of the Debtor's business. The event
space is located in downtown Kansas City, Missouri.
(2) Debtor Urban Table opened in July 2011 and is an
Italian-American bistro located in Prairie Village, Kansas.
(3) Debtor Stock Hill opened in December 2016 and is a
high-end steakhouse located on the Country Club Plaza in Kansas
City, Missouri.
(4) Debtor Gram & Dun opened in November 2011 and is a
venerable modern restaurant also located on the Country Club Plaza
in Kansas City, Missouri.
The Debtors had over 200 employees and approximately 140 creditors.
Between its different subsidiaries, the Debtors' gross sales for
Debtors in 2018 exceeded $24.5 million. After the sale of two of
the subsidiaries, the Debtors' gross sales for 2019 are projected
to be $12.1 million.
The Debtors' business was critically impacted by the COVID-19
pandemic. The Debtors' business is cyclical and significant
revenue swings are experienced during the holiday, and the Spring
and Summer. As the pandemic restrictions are slowly being lifted,
the Debtors are only now starting to implement various key
initiatives to maximize revenues, including, but not limited to,
marketing campaigns and other restaurant-specific programs to
recover.
On September 1, 2020, the Court entered an order approving the sale
of substantially all of the Debtors' assets and properties and
identified leases and executory contracts associated with Gram &
Dun, Urban Table, and Cherry Hall as well as the Debtors' certain
personal property assets.
The Debtors believe the additional time is necessary to negotiate
with creditors and determine the feasibility of a Chapter 11 plan
with regard to the remaining assets and in light of the sale of
certain assets.
About Bread & Butter Concepts
Bread & Butter Concepts, LLC -- http://breadnbutterconcepts.com/--
was founded in 2011 and owns and operates multiple upscale
restaurants in the Kansas City metropolitan area.
Bread & Butter Concepts and its affiliates Texaz Crossroads LLC,
Texaz Table Restaurant of KS LLC, Texaz South Plaza LLC, and Texaz
Plaza Restaurant LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Kan. Lead Case No. 19-22400) on Nov. 9,
2019.
At the time of the filing, Bread & Butter disclosed $4,121,754 in
assets and $5,079,795 in liabilities.
The cases have been assigned to Judge Dale L. Somers. Sandberg
Phoenix & von Gontard P.C. is Debtor's legal counsel.
BROUSSARD INVESTMENT: Hires Weinstein & St. Germain as Counsel
--------------------------------------------------------------
Broussard Investment Properties, LLC seeks authority from the U.S.
Bankruptcy Court for the Western District of Louisiana to hire
Weinstein & St. Germain, LLC as its legal counsel.
Debtor requires Weinstein & St. Germain to give legal advice with
respect to its powers and duties in the continued operation of its
business and management of its property, and to perform all other
legal services in connection with its Chapter 11 case.
Weinstein & St. Germain will be paid based upon its normal and
usual hourly billing rates. The firm will also be reimbursed for
reasonable out-of-pocket expenses incurred.
Tom St. Germain, Esq., a partner at Weinstein & St. Germain,
assured the court that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code and does
not represent any interest adverse to the Debtor and its estates.
Weinstein & St. Germain can be reached at:
Tom St. Germain, Esq.
Weinstein & St. Germain, LLC
1414 NE Evangeline Thruway
Lafayette, LA 70501
Tel: (337) 235-4001
About Broussard Investment Properties
Broussard Investment Properties, LLC, filed its voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La.
Case No. 20-50665) on Sep. 4, 2020. The petition was signed by Adam
Broussard, member. At the time of filing, Debtor disclosed
$1,571,744 in assets and $1,741,195 in liabilities. Tom St.
Germain, Esq., at Weinstein & St. Germain, LLC, represents the
Debtor as legal counsel.
C2 PLUMBING: Unsecured Creditors to Recover 47.84% Over 5 Years
---------------------------------------------------------------
C2 Plumbing, Inc., filed with the U.S. Bankruptcy Court for the
Central District of California, Los Angeles Division, a Disclosure
Statement and Plan of Reorganization dated August 13, 2020.
Debtor’s business income and expense projections support
Debtor’s ability to meet its obligations under the proposed Plan.
Since the filing of Debtor’s bankruptcy case, Debtor was able to
complete the projects that were in existence at the time of the
filing and also acquire new projections. Debtor currently has
several projects it is working on and anticipates getting more
projects in the near future which will continue to generate steady
income to enable the Debtor to pay the priority unsecured creditors
in full and 47.84% pro rata distribution to its general unsecured
creditors.
Class #2b: General unsecured claims. Each claimant in Class #2b
will be paid 47.84% of its claim beginning the first relevant date
after the Effective Date. Holders of this Class shall be paid over
5 years in equal monthly installments of $425.O0 per month for
months 1-47; $1,500 per month for months 48-60 due on the first day
of each calendar month/quarter.
Under the Plan, shareholders simply retain their shares of stock.
Proposed Disbursing Agent will pay all amounts due under the Plan
from a fund authorized to be opened. This fund will be maintained
in a segregated, interest-bearing account in a depository approved
by the United States trustee for the Central District of California
for deposits of funds by trustees.
The Debtor's principal Shawna L. Cronin will contribute $4,500 her
personal funds as a gift contribution to the Debtor without seeking
any repayment.
A full-text copy of the Disclosure Statement dated August 13, 2020,
is available at https://tinyurl.com/yyojmfla from PacerMonitor.com
at no charge.
The Debtor is represented by:
Michael Jay Berger
Sofya Davtyan
Law Offices of Michael Jay Berger
9454 Wilshire Blvd., 6th Floor
Beverly Hills, CA 90212
Tel: (310) 271-6223
Fax: (310) 271-9805
E-mail: Michael. Berger@bankruptcypower.com
E-mail: Sofya.Davtyan@bankruptcypower.com
About C2 Plumbing Inc.
C2 Plumbing, Inc., is a privately owned company specializing in
commercial plumbing construction. It filed for bankruptcy
protection on Nov. 15, 2019 (Bankr. C.D. Cal. Case No. 19-23459).
The petition was signed by Shawna Leigh Cronin, president and chief
financial officer. The Debtor listed total assets of $163,589 and
total liabilities of $1,278,148.
Judge Vincent P. Zurzolo is the presiding judge.
Michael Jay Berger, Esq., of the LAW OFFICES OF MICHAEL JAY BERGER,
represents the Debtor.
CAITHNESS SHEPHERDS: Fitch Cuts Series A-1-NG Certs to 'BB'
-----------------------------------------------------------
Fitch Ratings has downgraded Caithness Shepherds Flat LLC's (CSF)
senior secured non-guaranteed debt as follows:
-- Shepherds Flat Funding Trust I's $105 million series ($105
million outstanding) A-1-NG senior secured fixed-rate trust
certificates due 2032 to 'BB' from 'BBB-';
-- Shepherds Flat Funding Trust II's $135 million series ($56
million outstanding) A-2-NG senior secured floating rate loan due
2024 to 'BB' from 'BBB-'.
Fitch has assigned a Stable Outlook to the non-guaranteed debt.
Fitch has removed the ratings from Rating Watch Negative.
Fitch Ratings has affirmed CSF's senior secured guaranteed debt as
follows:
-- Shepherds Flat Funding Trust I's $420 million series ($420
million outstanding) A-1-G senior secured fixed-rate trust
certificates due 2032 at 'AAA';
-- Shepherds Flat Funding Trust II's $540 million ($194 million
outstanding) A-2-G senior secured floating rate loan due 2024 at
'AAA'.
The Rating Outlook for the A-1-G and A-2-G tranches is Negative.
RATING RATIONALE
Summary: The 'BB' rating on the non-guaranteed debt reflects a U.S.
wind power project that earns all revenue from power purchase
agreements (PPA) with an investment grade offtaker that eliminate
price risk, use of proven technology, O&M by a highly experienced
contractor that is required to achieve high availability targets,
and exposure to a volatile wind regime. The rating downgrade
results from a revised wind study that indicates lower production
and a lack of firm progress on arranging and implementing an
executable plan for a repower project at the site geared towards
boosting production materially to offset the forecast of lower
production. Rating case assumptions of one-year, P90 wind
production, a modest haircut to production and a 10% increase in
O&M costs generate an average debt service coverage ratio (DSCR) of
1.15x over the debt tenor.
The 'AAA' rating of the guaranteed notes reflects the U.S.
Department of Energy's (DOE) guarantee for timely debt service
payments. The Negative Outlook on these ratings reflects the
Negative Outlook on the United States.
The outbreak of coronavirus and related government containment
measures worldwide create an uncertain global environment for the
power sector. While CSF's performance data through most recently
available issuer data may not have indicated impairment, material
changes in revenue and cost profile are occurring across the power
sector and will continue to evolve as economic activity and
government restrictions respond to the ongoing situation. Fitch's
ratings are forward-looking in nature, and Fitch will monitor
developments in the sector as a result of the virus outbreak as it
relates to severity and duration, and incorporate revised base and
rating case qualitative and quantitative inputs based on
expectations for future performance and assessment of key risks.
KEY RATING DRIVERS
Fully Contracted Revenues (Revenue Risk- Price: Stronger)
CSF earns revenue from three fixed-price PPAs with regulated
utility offtaker Southern California Edison (SCE; BBB-/Stable) that
effectively mitigate price and demand risk for the project's output
through debt maturity. CSF's exposure to curtailment risk is
largely mitigated under PPA amendments signed in 2017.
Strong Operating Agreement (Operating Risk: Midrange)
CSF benefits from full-service O&M agreements (FSA) with General
Electric International (GEI), whose expiration coincides with PPA
maturity. The agreements maintain availability warranties,
mitigating most operating shortfalls over the debt tenor. FSA terms
also provide fixed pricing for most technical O&M efforts which
significantly mitigates cost risk. All planned and unplanned
maintenance is included under the agreements.
Variable Wind Resource (Revenue Risk- Volume: Midrange; revised
from Weaker)
Wind projections are based on an updated assessment by the
project's independent technical expert as reported in April 2020.
The updated forecast indicates a material reduction in generation
from the amounts forecast with the original wind study from 2012,
of about 19% at the P50 level and 16% at the P90 (one-year) level.
The wind resource continues to exhibit significant volatility. The
difference between the updated P50 and P90 (one-year) level is
about 13%.
DOE Guarantee for 80% of Project Debt (Debt Structure (Guaranteed):
Stronger):
The 'AAA' rating for the guaranteed A-1-G certificates and A-2-G
loans reflects the certainty of timely debt service payments from
the DOE loan guarantee for 100% of P&I on the guaranteed debt.
Typical Debt Structure (Debt Structure (Non-Guaranteed):
Midrange):
The portion of non-guaranteed debt benefits from a typical debt
structure for contracted wind financings, including six-month
reserves for debt service and O&M, and a 1.20x, 12-month
backward-looking distribution test. All the notes have fixed
interest rates for the life of the debt, including the A-2 loan,
which has a floating to fixed rate hedge.
FINANCIAL PROFILE
The projected DSCR profile in Fitch's rating case reflects an
average of 1.15x, and a minimum 1.12x occurring 2021 and 2022.
These figures exclude forecast availability shortfall payments to
CSF from GEI which is not rated. If those payments are included as
revenue, the DSCR average increases to 1.18x. The rating case
reflects P90 (one-year) production levels with an additional
production haircut for volatility and higher O&M expenses than
generally expected.
PEER GROUP
CSF shares similar attributes to many rated U.S. wind projects, but
its weaker financial performance separates it from all other U.S.
wind projects in Fitch's rated portfolio. In most respects, CSF is
similar to Alta Wind 2010 Pass-Through Trust (Alta Wind;
BBB-/Stable) which has PPA-driven revenues from a single site
project using proven technology. Alta Wind has experienced much
lower than expected wind resources from time-to-time which has
consistently been below initial P90 (one-year) production
estimates. Alta Wind partially mitigates this wind volatility with
financial performance, reflected by rating case DSCRs of about
3.31x average and 1.32x minimum. Outside of the US, Fitch privately
rates several wind transactions in Brazil and EMEA that have a
similarly volatile wind regimes and demonstrate coverages close to
breakeven under P90 production levels. These transactions carry
ratings similar to CSF's when mapped to international scale
ratings.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
-- Improved financial performance with rating case DSCRs
exceeding 1.25x;
-- Demonstrated progress on a viable repowering project providing
a high level of confidence that the financial performance will
improve materially from current levels;
-- Any rating action on the U.S. sovereign rating would trigger
the same rating action on the guaranteed debt.
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
-- Rating case DSCRs below current forecasts on a sustained
basis;
-- Any rating action on the U.S. sovereign rating would trigger
the same rating action on the guaranteed debt.
TRANSACTION SUMMARY
CSF is comprised of three wind-powered generation projects with
aggregate capacity of 845-megawatts located along the Columbia
River Gorge in Gilliam and Morrow Counties, Oregon. CSF was
developed and is currently owned by Caithness Energy.
CREDIT UPDATE
Operational performance and wind generation have been strong thus
far in 2020. Through June 2020, availability was 97.2% at North
Hurlburt, 98.8% at South Hurlburt and 98% at Horseshoe Bend -
performance that compares well to GEI's 98% availability
guarantee.
Wind production through August was a robust 120% of the project
budget. Performance in 1Q20 was 149% of the project budget with
very little curtailment. Curtailment was very significant in May,
June and July - about 38% of budget - but dropped to a typically
minimal amount in August. CSF reported that the events included
economic and Bonneville Power Administration curtailment. SCE
compensates CSF for revenue lost to these curtailment events. CSF
reports that the recent fires in Oregon are distant from the
project and smoke from them had no material impact on operations.
The solid operating and wind performance in 2020 helped to offset
weaker performance in late 2019 to produce a DSCR of 1.42x for the
year ended July 2020.
Market conditions have led to a significant delay in CSF's
development of a repowering project to replace blades with longer
ones to increase energy capture from the wind resource and to make
other improvements to increase energy production.
FINANCIAL ANALYSIS
Key assumptions in Fitch's base case are electricity production at
the P50 level with a 2% reduction typical for projects of this
type, project availability in line with the recent forecast from
the independent technical expert DNV-GL (DNV), and O&M costs in
line with current performance and budget. The wind resource data
reflects DNV's updated forecast from April 2020. Based on these
attributes, the DSCR average is 1.41x and minimum is 1.36x (in
2020) (with an average of 1.45x with forecast GEI payments
included).
Key assumptions in Fitch's rating case are electricity production
at the P90 (one-year) level with a 3% reduction and a 10% increase
in O&M costs not fixed by contracts. In this scenario, the DSCR
average is 1.15x and minimum in 1.12x (in 2020 and 2021) (with an
average of 1.18x with forecast GEI payments included).
In accordance with Fitch Ratings' policies, the issuer appealed and
provided additional information to Fitch Ratings that resulted in a
Rating action that is different than the original Rating committee
outcome.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity, either due to their nature or
to the way in which they are being managed by the entity.
CALIFORNIA PIZZA: Committee Taps Berkeley as Financial Advisor
--------------------------------------------------------------
The official committee of unsecured creditors of California Pizza
Kitchen, Inc. and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
Berkeley Research Group, LLC as its financial advisor.
The committee has requested the firm to provide the following
services:
a. analyze the Debtors' assets (tangible and intangible) and
possible recoveries to creditor constituencies under various
scenarios;
b. review and provide analyses of the filed plan of
reorganization and disclosure statement, related to the
restructuring support agreement entered into by the Debtors;
c. advise and assist the committee in its analysis and
monitoring of the historical, current and projected financial
affairs of the Debtors;
d. develop and issue periodic monitoring reports to enable the
committee to evaluate effectively the Debtors' performance;
e. evaluate and participate in the Debtors' 363 sale process
to ensure the adequacy of the process;
f. evaluate relief requested in cash management motion;
g. advise and assist the committee with respect to any
debtor-in-possession financing arrangements;
h. assist the committee and its counsel in negotiations with
various creditor constituencies regarding restructuring and case
resolution;
i. analyze both historical and ongoing related party
transactions and or material unusual transactions of the Debtors;
j. monitor liquidity and cash flows throughout the cases and
scrutinize cash disbursements and capital requirements on an
on-going basis;
k. advise the committee and its counsel in evaluating any
court motions, applications, or other forms of relief;
l. advise and assist the committee in its assessment of the
Debtors' employee needs and related costs;
m. analyze the Debtors' business plan/supply chain
management/operational restructuring and monitor the implementation
of any strategic initiatives;
n. assist committee's counsel in evaluating all purported lien
claims by creditors;
o. provide support for committee's counsel as necessary to
address restructuring issues;
p. provide support to the committee and its counsel regarding
potential litigation strategies;
q. work with the Debtors' tax advisors to ensure that any
restructuring or sale transaction is structured in a tax efficient
manner;
r. monitor Debtors' claims management process;
s. advise the committee in connection with any potential
claims and causes of action;
t. participate in meetings and discussions with the committee,
the Debtors, and the other parties-in-interest;
u. provide any expert reports and/or testimony as requested by
the committee and its counsel; and
v. perform other matters as may be requested by the committee
or its counsel.
Berkeley Research's standard hourly rates are as follows:
Managing Director $825 to $1,095
Director $625 to $835
Professional Staff $295 to $740
Support Staff $135 to $260
The standard hourly rates for the firm's professionals anticipated
to be assigned to the case are as follows:
Stephen Coulombe $1,095
Haywood Miller $925
Mackenzie Shea $995
Joe Vizzini $850
Charles Reeves $800
Jim Hill $610
Stephen L. Coulombe, managing director at Berkeley Research,
disclosed in court filings that the firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Stephen L. Coulombe
Berkeley Research Group, LLC
99 High Street, Suite 2700
Boston, MA 02110
Telephone: (617) 673-2147
E-mail: scoulombe@thinkbrg.com
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, 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
On August 14, 2020, the Office of the United States Trustee
appointed the official committee of unsecured creditors. The
committee is currently comprised of the following members: (i)
Acquiom Agency Services LLC, (ii) Simon Property Group, and (iii)
NCR Corporation. The committee selected Berkeley Research Group,
LLC to serve as its financial advisor, Kramer Levin Naftalis &
Frankel LLP as its counsel, and Womble Bond Dickinson (US) LLP as
its local counsel.
CATSKILL DISTILLING: Files Liquidating Plan After $3.09-Mil. Sale
-----------------------------------------------------------------
Catskill Distilling Co., Ltd. filed with the U.S. Bankruptcy Court
for the Southern District of New York, Poughkeepsie Division, a
Plan of Liquidation and a Disclosure Statement on August 14, 2020.
The Debtor's Plan of Liquidation is based on the debtor's belief
that the cash flow of the debtor cannot sustain a Chapter 11 plan
of reorganization. As such, the Debtor filed a Motion, pursuant to
11 U.S.C. Sec. 363, seeking to sell substantially all of its
assets, free and clear of liens, claims and encumbrances. The
Motion was approved by the Bankruptcy Court after hearing on Aug.
4, 2020. The highest and best offer, as determined by the Court,
for the purchase of the Debtor's assets was submitted by SVG 26
LLC, with a cash purchase price of $3,088,317 and additional
non-cash consideration, as further evidenced by the Asset Sale and
Purchase Agreement between the Debtor and SVG 26, LLC.
Class 4 Unsecured Claims. Allowed claims of all other creditors of
the debtor, including prepetition unsecured creditors, prepetition
secured creditors to the extent that the Court finds the same
unsecured in whole or in part, subject to an allowance of their
claims by the Court, will be paid pro rata, to the extent that
there are proceeds remaining from the sale of the debtor's assets.
The disbursements shall be made by the Plan Disbursing Agent, after
the final closing on the sale of the debtor's assets. The claims
in this class total approximately $909,540.
Stacy Cohen is the President of the debtor. The Liquidating Plan
contemplates that the Debtor will be dissolved upon Confirmation.
Distributions necessary to creditors in Classes 1, 2, and 3 will be
made in full upon the final closing of the sale of the Debtor's
assets.
A full-text copy of the Disclosure Statement dated August 14, 2020,
is available at https://tinyurl.com/yxebsf84 from PacerMonitor at
no charge.
Attorneys for the Debtor:
GENOVA & MALIN
Hampton Business Center
1136 Route 9
Wappingers Falls, New York 12590
Tel: (845) 298-1600
Andrea B. Malin, Esq.
Michelle L. Trier, Esq.
About Catskill Distilling
Catskill Distilling Company, Ltd., is a distillery in Bethel, N.Y.,
owned and run by Stacy Cohen.
Catskill Distilling Company filed a petition under Chapter 11 of
the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 19-36861) on Nov. 19,
2019. The petition was signed by Catskill President Stacy Cohen.
At the time of the filing, the Debtor was estimated to have $1
million to $10 million in both assets and liabilities. Judge
Cecelia G. Morris oversees the case. The Debtor has tapped Genova
& Malin, as its legal counsel and Saffioti & Anderson as its
special counsel.
CBL & ASSOCIATES: Extends Agreed Petition Date to Oct. 15
---------------------------------------------------------
CBL Properties reports that the Petition Date under the
Restructuring Support Agreement has been extended from Oct. 1, 2020
to Oct 5, 2020.
As previously disclosed, on Aug. 18, 2020, CBL & Associates
Properties, Inc. ("REIT") and CBL & Associates Limited Partnership,
the majority owned subsidiary of the REIT, entered into the
Restructuring Support Agreement with certain beneficial owners
and/or investment advisors or managers of discretionary funds,
accounts or other entities for the holders of beneficial owners in
excess of 60%, including joining noteholders added pursuant to
joinder agreements, of the aggregate principal amount of the
Operating Partnership's 5.25% senior unsecured notes due 2023, the
Operating Partnership's 4.60% senior unsecured notes due 2024 and
the Operating Partnership's 5.95% senior unsecured notes due 2026.
The Company intends to utilize the additional time to continue
collaborative negotiations with its senior, secured lenders and the
Noteholders to attempt to reach a consensual arrangement with both
parties. In the event that such an arrangement were reached, the
Company and the Noteholders would amend the RSA to include its
senior, secured lenders. The agreement may be amended by the
Company and with the consent of noteholders representing at least
75% of the Unsecured Notes that are held by noteholders that are
party to the RSA.
About CBL Properties
CBL & Associates Properties, Inc. -- http://www.cblproperties.com
-- is a self-managed, self-administered, fully integrated REIT.
The Company owns, develops, acquires, leases, manages, and operates
regional shopping malls, open-air and mixed-use centers, outlet
centers, associated centers, community centers, office and other
properties. The Company's Properties are located in 26 states, but
are primarily in the southeastern and midwestern United States.
The Company has elected to be taxed as a REIT for federal income
tax purposes.
CBL & Associates reported a net loss of $131.72 million for the
year ended Dec. 31, 2019, compared to a net loss of $99.23 million
for the year ended Dec. 31, 2018. As of June 30, 2020, CBL &
Associates had $4.65 billion in total assets, $4 billion in total
liabilities, $525,000 in redeemable common units, and $653.74
million in total capital.
* * *
As reported by the TCR on June 1, 2020, Moody's Investors Service
downgraded the ratings of CBL & Associates Limited Partnership,
including the corporate family rating to Ca from Caa1 and senior
unsecured debt to C from Caa3. The rating downgrade reflects
Moody's expectation that CBL's liquidity profile will erode rapidly
in the next two quarters.
CBL & ASSOCIATES: Michael Ashner Quits as Director
--------------------------------------------------
Michael L. Ashner has resigned from CBL Properties' Board of
Directors effective Sept. 29, 2020, for personal reasons.
"On behalf of Management and the Board, we would like to thank
Michael for his many contributions and commitment to the Company
during his time on the Board," said Stephen Lebovitz, chief
executive officer. "We wish him the best in his future pursuits."
About CBL Properties
CBL & Associates Properties, Inc. -- http://www.cblproperties.com
-- is a self-managed, self-administered, fully integrated REIT.
The Company owns, develops, acquires, leases, manages, and operates
regional shopping malls, open-air and mixed-use centers, outlet
centers, associated centers, community centers, office and other
properties. The Company's Properties are located in 26 states, but
are primarily in the southeastern and midwestern United States.
The Company has elected to be taxed as a REIT for federal income
tax purposes.
CBL & Associates reported a net loss of $131.72 million for the
year ended Dec. 31, 2019, compared to a net loss of $99.23 million
for the year ended Dec. 31, 2018. As of June 30, 2020, CBL &
Associates had $4.65 billion in total assets, $4 billion in total
labilities, $525,000 in redeemable common units, and $653.74
million in total capital.
* * *
As reported by the TCR on June 1, 2020, Moody's Investors Service
downgraded the ratings of CBL & Associates Limited Partnership,
including the corporate family rating to Ca from Caa1 and senior
unsecured debt to C from Caa3. The rating downgrade reflects
Moody's expectation that CBL's liquidity profile will erode rapidly
in the next two quarters.
CENTRIC BRANDS: Auction of SWIMS AS Stake Cancelled
---------------------------------------------------
Gregg M. Galardi, Esq., at Ropes & Gray LLP, counsel to Centric
Brands Inc., advised the U.S. Bankruptcy Court for the Southern
District of New York Wednesday that the Debtors are no longer
proceeding with the planned auction of their equity interests in
SWIMS AS.
Galardi said the Debtors had received bids from five separate
proposed bidders by the September 14 bid deadline. However, none
of the bidders had submitted a Qualified Bid pursuant to the
court-approved Bid Procedures.
The Debtors extended the bid deadline to September 29. Still, no
Qualifying Bids were received.
"The Debtors have determined that it is in the best interest of the
Debtors' estates and stakeholders to cancel the Auction, previously
scheduled for September 30, 2020 at 12:00 p.m. (prevailing Eastern
Time), and that this matter shall no longer be going forward at the
hearing scheduled to take place before the Honorable Sean H. Lane
United States Bankruptcy Judge, United States Bankruptcy Court for
the Southern District of New York, on October 1, 2020, at 11:00
a.m. (prevailing Eastern Time)," Galardi said.
On September 21, the Honorable Sean H. Lane entered Findings of
Fact, Conclusions of Law, and Order Confirming the Fifth Amended
Joint Chapter 11 Plan of Reorganization of Centric Brands Inc. and
its Debtor Affiliates. The Plan was supported by the Company's
secured lenders and the Unsecured Creditors' Committee.
After all conditions have been finalized, the Company intends to
emerge from Chapter 11 by the end of October with a recapitalized
balance sheet, new financing facilities, significantly reduced debt
and interest payments, and the full support of its lenders.
Centric Brands expects to emerge as a private company, under the
supportive ownership of its current lenders led by Blackstone,
Ares, and HPS. Upon emergence, the Company expects to substantially
reduce its funded second lien indebtedness, thereby positioning the
business for future growth and success. Blackstone will exchange
its second lien debt for equity interests in the reorganized
company. Existing senior lenders Ares and HPS will retain their
senior loan positions and will receive equity interests in the
reorganized company.
Judge Lane previously signed off on a stipulation and agreed order
between the Debtors and the Official Committee of Unsecured
Creditors, extending the Debtors' exclusive periods to (i) file a
plan of reorganization through October 1, 2020, which is the first
regularly scheduled omnibus hearing date occurring after the
hearing on confirmation of the Debtors' Third Amended Joint Chapter
11 Plan of Reorganization; and (ii) solicit acceptances of the plan
through the day that is 60 days following the date on which the
hearing on confirmation of the Debtors' Third Amended Joint Chapter
11 Plan of Reorganization.
In seeking an extension of the exclusivity periods, the Debtors
said they have made a number of critical advances toward a
successful restructuring, including, among other things:
(i) stabilizing the business operations in order to maximize
the value of the Debtors' estates;
(ii) negotiating, resolving objections to, and obtaining final
court approval of approximately $435 million in
debtor-in-possession financing, as well as ensuring consensual use
of cash collateral, to address the Debtors' liquidity needs during
these chapter 11 cases;
(iii) obtaining relief that has enabled the Debtors to continue
operating their business in the ordinary course, including
obtaining approval to pay certain vendors and prepetition claims of
the Debtors' employees;
(iv) marketing their financing facilities to ensure the best
facilities possible for the estates upon consummation of the Plan
and obtaining approval of an order allowing them to pay certain
fees and expenses in connection;
(v) filing and supplementing the schedules of assets and
liabilities and statements of financial affairs and obtaining
approval of rejection procedures and assumption procedures, all of
which required review and analysis of thousands of claims, assets,
and contracts, made more complicated by lack of access to certain
of the Debtors' facilities due to the COVID-19 pandemic;
(vi) defending against a request to lift the automatic stay to
join certain Debtors in a trademark infringement lawsuit;
(vii) obtaining court approval for the establishment of a claims
bar date and beginning review of filed proofs of claim; and
(viii) conducting an investigation led by a special committee of
the Board of Directors of Centric Brands Inc. of potential claims
and causes of action the Debtors may possess.
The Debtors requested the extension to avoid any risk should the
Confirmation Hearing be delayed or if the Debtors are not able to
confirm the Plan at the Confirmation Hearing. The Debtors also
expect that they will be current on all post-petition obligations
by the time of the hearing of their motion.
The Debtor originally asked the Court to extend the exclusivity
periods to file a plan from September 15, 2020, to and including
November 16, 2020, and to solicit acceptances from November 16,
2020, to and including January 13, 2021. The Committee opposed
such extension.
About Centric Brands
Centric Brands Inc. designs, produces, merchandises, manages, and
markets kidswear, accessories, and men's and women's apparel
under-owned, licensed, and private label brands. Currently, the
company and its affiliates license over 100 brands, including
AllSaints, BCBG, Buffalo, Calvin Klein, Disney, Frye, Herve Leger,
Jessica Simpson, Joe's, Kate Spade, Kenneth Cole, Marvel, Michael
Kors, Nautica, Nickelodeon, Spyder, Timberland, Tommy Hilfiger,
Under Armour, and Warner Brothers. The companies sell licensed
products through both retail and wholesale channels.
Centric Brands and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22637)
on May 18, 2020. As of March 31, 2020, the Debtors disclosed
$1,855,722,808 in total assets and $2,014,385,923 in total
liabilities.
Judge Sean H. Lane oversees the cases. The Debtors tapped Ropes &
Gray, LLP as bankruptcy counsel; PJT Partners, Inc. as investment
banker; Alvarez & Marsal, LLC as financial advisor; and Prime
Clerk, LLC as notice, claims, and balloting agent.
CEQUENCE ENERGY: CCAA Proceedings Concluded
-------------------------------------------
Cequence Energy Ltd. on Sept. 28, 2020, disclosed that it has
implemented the previously announced plan of compromise and
arrangement (the "Plan") of the Company, under the Companies'
Creditors Arrangement Act (Canada) ("CCAA") which was sanctioned on
September 17, 2020 by order of the Court of Queen's Bench of
Alberta (the "Court") under the CCAA. The previous common shares of
the Company have been cancelled, and the issuance of new common
shares of Cequence pursuant to the terms of the Plan is now
complete with distributions to creditors to be completed shortly by
Ernst & Young Inc., the court-appointed monitor.
The Company has emerged from CCAA as a private oil and natural gas
company effective Sept. 28. Implementation of the Plan resulted in
the Plan Sponsors (as defined in the Plan) controlling all of the
issued and outstanding common shares of Cequence. The Company's
former Board of Directors have resigned, and a new Board of
Directors has been appointed effective today, comprised of Todd
Brown, G.A. Cumming, Michael Kanovsky, Jesse Marble, Ron Poelzer
and Greg Turnbull.
The Company intends to submit an application to cease to be a
reporting issuer to the relevant Canadian securities authorities
immediately.
Cequence does not intend to make any further public announcements
related to its exit from CCAA or status as a reporting issuer.
About Cequence
Cequence -- http://www.cequence-energy.com/-- is engaged in the
exploration for and the development of oil and natural gas
reserves. The Company's primary focus is the development of its
Simonette asset in the Alberta Deep Basin with other non-core
assets in Northeast British Columbia and the Peace River Arch of
Alberta.
CHIEF OILFIELD: Seeks Approval to Hire Brady Martz as Accountant
----------------------------------------------------------------
Chief Oilfield Services, LLC seeks approval from the U.S.
Bankruptcy Court for the District of North Dakota to hire Brady
Martz and Associates, P.C. as its accountant.
The firm will provide tax return preparation services to the Debtor
throughout the pendency of the Chapter 11 proceedings.
The firm's services will be provided mainly by Harmony Kolling,
CPA, who will be paid at the rate of $231 per hour, while
additional tax preparation services provided by the firm's
employees would be billed at $85 to $136 per hour.
Ms. Kolling disclosed in court filings that the firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Harmony Kolling, CPA
Brady Martz and Associates, P.C.
2257 Third Avenue W.
Dickinson, ND 58601-2605
Telephone: (701) 483-6000
Facsimile: (701) 483-6004
E-mail: harmony.kolling@bradymartz.com
About Chief Oilfield Services
Chief Oilfield Services, LLC is a Dickinson, N.D.-based company
that provides oil and gas field machinery and equipment.
Chief Oilfield Services filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.D. Case No. 20-30444)
on Aug. 17, 2020. Leon Keator, vice president of operations, signed
the petition.
At the time of the filing, Debtor disclosed estimated assets of
$100,000 and $500,000 and estimated liabilities of $1 million and
$10 million.
Judge Shon Hastings oversees the case.
Fredrikson & Byron, P.A. serves as Debtor's legal counsel.
CHILLER SERVICES: Unsecured Creditors to Have 5% Recovery in Plan
-----------------------------------------------------------------
Chiller Services Rigging & Demo, Inc., filed with the U.S.
Bankruptcy Court for the Central District of California, Los
Angeles Division, a Disclosure Statement and Plan of Reorganization
dated August 14, 2020.
Class 2 General Unsecured Claims will receive one payment on the
effective date equaling 5% of their allowed claims as of July 31,
2020. Those creditors who cast ballots who do not affirmatively opt
out of Class 2 treatment under the Plan will be deemed to have
consented to the Class 2 treatment and to have opted in to this
treatment. If a claimant within Class 2 affirmatively opts out of
Class 2 treatment under the Plan, then that claimant will not
receive any payment under the Plan or be subject to any terms of
the Plan including the release, discharge, and injunction
provisions, and the claimant will retain any and all claims it may
have against Debtor and thirs parties, including Debtor's
insiders.
Under the Plan, the stock will be cancelled and new stock will be
issued for purchase by the current stakeholders.
The Debtor proposes to fund the payments required by the Plan from
its funds currently on hand and equity contributions from Dan Ragan
and Bruce Kolstad.
A full-text copy of the Disclosure Statement dated August 14, 2020,
is available at https://tinyurl.com/yyuf8eft from PacerMonitor.com
at no charge.
The Debtor is represented by:
HABERBUSH, LLP
David R. Haberbush, Esq.
Vanessa M. Haberbush, Esq.
444 West Ocean Boulevard, Suite 1400
Long Beach, SA 90802
Telephone: (562)435-3456
Facsimile: (562)435-6335
E-mail: vhaberbush@albinsolvency.com
About Chiller Services Rigging & Demo
Chiller Services Rigging & Demo, Inc., a privately held company in
Santa Fe Springs, Calif., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-22677) on Oct. 28,
2019. At the time of the filing, the Debtor had estimated assets
of less than $50,000 and liabilities of between $1 million and $10
million. The case is assigned to Judge Sandra R. Klein. The
Debtor is represented by Lane K. Bogard, Esq., at Haberbush &
Associates, LLP.
CHINOS HOLDINGS: U.S. Trustee Objects to Prearranged Plan
---------------------------------------------------------
John P. Fitzgerald, III, Acting United States Trustee for Region
Four, objects to the Prearranged Chapter 11 Plan of Reorganization
of Chinos Holdings, Inc. and Its Affiliated Debtors.
The U.S. Trustee claims that the Plan provides for the assumption
of various insider benefit and incentive programs without
satisfying the standards of section 503(c). Accordingly, the U.S.
Trustee asserts that the Plan fails to comply with Section
1129(a)(1). Confirmation should be denied or alternatively this
provision stricken from the Plan.
The UST points out that the Plan may not be confirmed absent a
showing by the Debtors' that the Benefit Plans and Employee
Arrangements comply with the applicable provisions of Section
503(c).
The UST incorporates herein and renews his objections previously
raised with respect to third party releases and exculpation
provisions proposed in the Plan and believes that releases and
exculpations require a factual analysis on a case-by-case basis.
A full-text copy of the UST's objection to Plan dated August 14,
2020, is available at https://tinyurl.com/y2t95a8h from
PacerMonitor at no charge.
About Chinos Holdings
Chinos Holdings, Inc., designs apparel, offering clothing for men,
women, and children, as well as accessories. It is a global company
with 500 retail stores in nearly every state, including the United
Kingdom and Canada, with nearly 99% of their merchandise sourced
from Asia or Europe, over 10,000 employees, approximately 33,600
creditors and parties in interest on a consolidated basis, and
approximately $2 billion in funded debt. J.Crew Group, Inc., is an
internationally recognized omnichannel retailer of Chinos Holding,
Inc.
Chinos Holdings, Inc. and its 17 related affiliates, including J.
Crew Group, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-32181) on May 4,
2020, after reaching an agreement with lenders on a deal that will
convert approximately $1.65 billion of the Company's debt into
equity.
As of May 4, 2020, the Company operated 181 J.Crew retail stores,
140 Madewell stores, jcrew.com, jcrewfactory.com, madewell.com, and
170 factory stores. The Debtors disclosed assets of between $1
billion and $10 billion and liabilities of the same range as of the
bankruptcy filing. Judge Keith L. Phillips oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy
counsel; Hunton Andrews Kurth, LLP as local counsel; Lazard Freres
Estate, LLC as real estate advisor and investment banker; KPMG LLP
as tax consultant; and Omni Agent Solutions, LLC as claims,
noticing and solicitation agent and as administrative advisor.
AlixPartners, LLP was tapped as restructuring advisor.
The official committee of unsecured creditors appointed in the
Debtors' bankruptcy cases tapped Pachulski Stang Ziehl & Jones LLP
as legal counsel; Hirschler Fleischer, P.C as local counsel; and
Province, Inc. as financial advisor.
Anchorage Capital Group and other members of an ad hoc committee
are represented by Milbank LLP as legal counsel and PJT Partners LP
as an investment banker.
CLEVELAND-CLIFFS INC: Moody's Reviews B1 CFR for Downgrade
----------------------------------------------------------
Moody's Investors Service placed all ratings of Cleveland-Cliffs
Inc., including the B1 Corporate Family Rating (CFR) and the B1-PD
Probability of Default Rating under review for downgrade. The SGL-2
Speculative Grade Liquidity Rating remains unchanged at this time.
The review follows the announcement by Cliffs that it has entered
into a definitive agreement to acquire ArcelorMittal USA for an
implied equity value of $1.4 billion and an enterprise value of
$3.3 billion. The acquisition will be funded by Cliffs issuing 78.2
million shares of common stock, non-voting preferred stock with an
approximate value of $373 million and $505 million cash. The
transaction is expected to close in the fourth quarter and remains
subject to regulatory approvals and other customary closing
conditions.
Proforma for the transaction, Cliffs' steel shipments in 2019 would
have been 17 million net tons. Cliffs asset-based lending facility
will be upsized to reflect the addition of the ArcelorMittal USA
assets.
On Review for Downgrade:
Issuer: Cleveland-Cliffs Inc.
Corporate Family Rating, Placed on Review for Downgrade, currently
B1
Probability of Default Rating, Placed on Review for Downgrade,
currently B1-PD
Gtd Senior Secured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Ba3 (LGD3)
Gtd Senior Unsecured Regular Bond/Debenture, Placed on Review for
Downgrade, currently B2 (LGD4)
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Possible Downgrade, currently B3 (LGD5)
Outlook Actions:
Issuer: Cleveland-Cliffs Inc.
Outlook, Changed to Rating Under Review from Negative
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The review will focus on the expected operational efficiencies and
ability to optimize production at the steel production sites as
well as the expected cost profile and competitive position.
Performance through various steel price points, expected steel
production mix, and end market exposures will be further
considerations. Given the weaker steel industry and end market
operating performance in the first half of 2020 due to the impact
of the corona virus, and slow recovery expected through the balance
of the year and into 2021, Cliffs' leverage is expected to be
elevated, particularly given the assumption of pension obligations
at ArcelorMittal USA. The time frame expected for deleveraging and
ability to be free cash flow generative will be factors in the
review.
Given that this is the second major transformational acquisition
undertaken in 2020 (acquisition of AK Steel Corporation closed in
March 2020), integration risk and the ability to achieve synergies
and maintain operational efficiency will also be a consideration.
Headquartered in Cleveland, Ohio, Cleveland-Cliffs is the largest
iron ore producer in North America with approximately 21.2 million
equity tons of annual capacity. Commercial production at the
Toledo, Ohio HBI facility is expected to commence in late 2020.
Through its AK Steel subsidiary, the company is a mid-tier steel
producer. AK Steel's shipments in 2019 were 5.3 million net tons.
For the twelve months ended June 30, 2020 Cliffs had revenues of
$2.5 billion.
The principal methodology used in these ratings was Steel Industry
published in September 2017.
COASTAL INTERNATIONAL: Unsecureds to Have 3.16% Recovery in Plan
----------------------------------------------------------------
Coastal International, Inc., a Nevada corporation, submitted a
Fourth Amended Chapter 11 Plan and a corresponding Disclosure
Statement on August 14, 2020.
According to the Fourth Amended Disclosure Statement, allowed
General Unsecured Claims (including the Claim of AHAC in Class 4)
will receive: (1) $350,000 on the Effective Date of the Plan; (2) a
percentage of recovery of the Hartford Claim; and (3) a percentage
of recovery of the Plan Agent Assigned Actions. The Debtor
estimates that the total of $350,000 to be paid to Class 3 and
Class 4 equals approximately 3.16% recovery (plus a pro rata
recovery on the Hartford Claim and a pro rata recovery on the Plan
Agent Assigned Actions) on the total amount of the Class 3 Claims.
The total amount of Class 3 Claims is currently estimated at
$892,000, which includes the maximum amount of potential personal
property lease rejection damages.
A full-text copy of the Fourth Amended Disclosure Statement dated
August 14, 2020, is available at https://tinyurl.com/y4xd825g from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Jeffrey I. Golden
Reem J. Bello
WEILAND GOLDEN GOODRICH LLP
650 Town Center Drive, Suite 600
Costa Mesa, California 92626
Telephone 714-966-1000
Facsimile 714-966-1002
E-mail: jgolden@wgllp.com
rbello@wgllp.com
About Coastal International
Coastal International, Inc., is a Nevada corporation formed in
1984, which provides trade show installation and dismantling
services in the exhibit and event industry. Its operations extend
into major cities across the United States, and the Company
maintains a staff of trained, full-time employees to handle most
any installation and dismantling project from start to finish.
Coastal generated approximately $24 million in revenues during
2018.
Coastal International sought creditor protection under Chapter 11
of the Bankruptcy Code (Bankr. C.D. Cal. Case No.19-13584) on Sept.
15, 2019. At the time of the filing, the Debtor was estimated to
have assets of between $1 million and $10 million and liabilities
of between $10 million and $50 million. The case has been assigned
to Judge Theodor Albert. The Debtor tapped Weiland Golden Goodrich
LLP as counsel; and Finestone Hayes LLP, as co-counsel.
COMSTOCK MINING: DeCoria Maichel Replaces Deloitte as Auditor
-------------------------------------------------------------
The Audit Committee of the Board of Directors of Comstock Mining
Inc., upon completion of a formal proposal process with independent
accounting firms, dismissed Deloitte & Touche LLP as its
independent public accountants and selected DeCoria, Maichel &
Teague as the independent public accountants to audit the financial
statements of Comstock and its consolidated subsidiaries for the
fiscal year ending Dec. 31, 2020.
The reports of D&T on the consolidated financial statements of
Comstock as of and for the fiscal years ended Dec. 31, 2017, 2018,
and 2019 did not contain any adverse opinion or disclaimer of
opinion. These reports were not qualified or modified as to
uncertainty, audit scope or accounting principles. During the
fiscal years ended Dec. 31, 2017, 2018, and 2019 there were no
disagreements between D&T and Comstock on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of D&T, would have caused D&T to make reference
to the subject matter of the disagreements in connection with their
reports. Furthermore, during the fiscal years ended Dec. 31, 2017,
2018, and 2019, there were no reportable events (as described in
Item 304(a)(1)(v) of Regulation S-K). The fiscal years ended
December 31, 2018, and 2019 are Comstock's two most recent
completed fiscal years.
During the fiscal years ended Dec. 31, 2017, 2018, and 2019 neither
Comstock nor anyone on its behalf consulted dm-t regarding either
(i) the application of accounting principles to a specified
transaction (either completed or proposed), or the type of audit
opinion that might be rendered on Comstock's consolidated financial
statements, or (ii) any matter that was either the subject of a
disagreement (as described in Item 304(a)(1)(iv) of Regulation S-K)
or a reportable event (as described in Item 304(a)(1)(v) of
Regulation S-K).
About Comstock Mining
Comstock Mining Inc. -- http://www.comstockmining.com-- is a
Nevada-based, gold and silver mining company with extensive,
contiguous property in the Comstock District. The Company began
acquiring properties in the Comstock District in 2003. Since then,
the Company has consolidated a significant portion of the Comstock
District, amassed the single largest known repository of historical
and current geological data on the Comstock region, secured
permits, built an infrastructure and completed its first phase of
production. The Company continues evaluating and acquiring
properties inside and outside the district expanding its footprint
and exploring all of its existing and prospective opportunities for
further exploration, development and mining.
Comstock Mining recorded a net loss of $3.81 million for the year
ended Dec. 31, 2019, compared to a net loss of $9.48 million for
the year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$44.40 million in total assets, $16.76 million in total
liabilities, and $27.63 million in total equity.
Deloitte & Touche LLP, in Salt Lake City, Utah, the Company's
auditor since 2011, issued a "going concern" qualification in its
report dated March 30, 2020 citing that the Company has incurred
recurring losses and cash outflows from operations, has an
accumulated deficit and has debt maturing within 12 months from the
issuance date of the financial statements that raise substantial
doubt about its ability to continue as a going concern.
CRAIG A. POPE: $169K Sale of Whitewater Property to Murphys Okayed
------------------------------------------------------------------
Judge G. Michael Halfenger of the U.S. Bankruptcy Court for the
Western District of Wisconsin authorized Craig A. Pope and Cathleen
A. Pope to sell the residential home located at 826 West Walworth
Avenue, City of Whitewater, Wisconsin, Tax Parcel No. BIR 00016, to
Marylloyd Lynn-Murphy and Paul D. Murphy for $169,000.
The sale is free and clear of liens and other interests.
The Debtors have authority to pay all usual and customary closing
costs, including but not limited to title insurance, transfer fees,
proration of real estate taxes, and recording fees figured through
the date of closing.
A portion of the net proceeds must be paid to the Walworth County
Treasurer for delinquent taxes owed for the property in the amount
of $21,215.
A portion of the net proceeds must be paid to the Debtors, who may
use them to pay the expenses itemized in Exhibit B.
Based on the record, including but not limited to the affidavit of
no objection to the sale motion, all remaining net sale proceeds
must be deposited in the DIP bank account. The Debtors may not use
the remaining proceeds until and unless the Court orders
otherwise.
A copy of the Exhibit B is available at
https://tinyurl.com/y9zcdrur from PacerMonitor.com free of charge.
Craig A. Pope and Cathleen A. Pope sought Chapter 11 protection
(Bankr. W.D. Wisc. Case No. 20-22889) on April 16, 2020. The
Debtors tapped Kristin J. Sederholm, Esq., at Krekeler Strother,
S.C. as counsel.
DAMEN 4 MANAGEMENT: Seeks to Hire Cozen O'Connor as New Counsel
---------------------------------------------------------------
Damen 4 Management of Illinois, LLC and Damen 4 Management, LLC
seek approval from the U.S. Bankruptcy Court for the Northern
District of Illinois to employ Brian L. Shaw and the law firm of
Cozen O'Connor as their new bankruptcy counsel.
Cozen O'Connor will render the same legal services to the Debtors
including without limitation the following:
a. give the Debtors legal advice with respect to their rights,
powers and duties;
b. advise the Debtors with respect to asset dispositions;
c. assist the Debtors in the negotiation, formulation and
drafting of a Chapter 11 plan;
d. take necessary actions with respect to claims that may be
asserted against the Debtors and property of their estates;
e. prepare legal documents;
f. represent the Debtors with respect to negotiations
concerning creditors and property of their estates;
g. initiate, defend or otherwise participate on behalf of the
Debtors in all proceedings before the court;
h. perform any and all other legal services on behalf of the
Debtors.
The firm's principal attorneys and paraprofessionals and their
hourly rates are as follows:
Brian L. Shaw $610
Mark L. Radtke $520
David R. Doyle $430
Patricia M. Fredericks $250
Brian L. Shaw, Esq., a member at Cozen O'Connor, disclosed in court
filings that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Brian L. Shaw, Esq.
Mark L. Radtk, Esq.
David R. Doyle, Esq.
Cozen O'Connor
123 N. Wacker Drive Suite 1800
Chicago, IL 60606
Telephone: (312) 474-1648
Facsimile: (312) 361-8378
E-mail: bshaw@cozen.com
mradtke@cozen.com
daviddoyle@cozen.com
About Damen 4 Management of Illinois
Chicago, Ill.-based Damen 4 Management of Illinois, LLC is a
privately held company in the healthcare industry.
On May 27, 2020, Damen 4 Management of Illinois and its affiliate,
Damen 4 Management, LLC, filed voluntary Chapter 11 petitions
(Bankr. N.D. Ill. Lead Case No. 20-11501). The petitions were
signed by Damen CEO Brian Carey.
At the time of the filings, each Debtor disclosed assets of $1
million to $10 million and liabilities of the same range.
Debtors are represented by Fox Rothschild, LLP.
DELTA TOPCO: Moody's Assigns B3 CFR, Outlook Stable
---------------------------------------------------
Moody's Investors Service assigned to Delta Topco, Inc. a B3
corporate family rating (CFR) and B3-PD Probability of Default
Rating. Concurrently, Moody's assigned B2 ratings to Infoblox's
proposed $1.29 billion senior secured first lien term loan and $200
million revolver and assigned a Caa2 rating to its proposed $455
million second lien term loan. Proceeds from the debt raise along
with new cash equity will be used to fund the acquisition of
Infoblox by funds affiliated with private equity sponsors Warburg
Pincus and Vista Equity Partners. The outlook is stable.
Assignments:
Issuer: Delta Topco, Inc.
Probability of Default Rating, Assigned B3-PD
Corporate Family Rating, Assigned B3
Senior Secured 1st Lien Bank Credit Facility, Assigned B2 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Assigned Caa2 (LGD5)
Outlook Actions:
Issuer: Delta Topco, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
The B3 CFR reflects Infoblox's very high initial leverage of about
8x on a cash adjusted basis (including change in deferred revenue),
relatively small operating scale, and uncertainties from the
changing technologies that affect Infoblox and its peers. Infoblox
derives a significant share of its revenues from its Trinzic DDI
product family and its future revenues are largely derived from
product upgrade sales to its existing DDI (Domain Name Services,
Dynamic Host Configuration Protocol, and IP Address Management)
customers. The refresh and upgrade cycle introduces volatility to
revenues on a 3 to 5-year cycle however, performance is expected to
become more predictable over time as the company converts the vast
majority of its new bookings and renewal bookings into subscription
contracts. The rating is supported by Infoblox's leading share in
its niche market and its high proportion of recurring revenues
derived under software maintenance and subscription agreements. The
company has a strong track record of organic growth within its
installed base and newer security offerings will help accelerate
cross selling and upselling opportunities for the company. The
company's minimal capital expenditure requirements and up-front
cash collection on subscriptions support strong free cash flow
generation, expected to be in the mid-single digit percent of gross
debt. Under private equity ownership, Infoblox is expected to
maintain an aggressive financial strategy, as evidenced by the
large amount of debt used to fund the transaction.
The stable rating outlook reflects Moody's expectation that
Infoblox will maintain a strong liquidity profile and EBITDA will
increase over the next 12-18 months such that cash adjusted
leverage will decline toward 7x, driven by continued organic growth
which is supported by the ongoing product refresh cycle.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could downgrade Infoblox's ratings if competitive or
execution challenges result in revenue and EBITDA declining such
that cash adjusted leverage is sustained above 8x.
Moody's could upgrade Infoblox's ratings if the company generates
strong and sustained revenue growth such that cash adjusted
leverage is maintained below 6.5x while also maintaining strong
free cash flow generation.
Infoblox's liquidity is considered good, supported by expectations
for annualized free cash flow generation of approximately $100
million over the next 12-18 months, $35 million of balance sheet
cash expected at the close of the transaction, and a proposed $200
million revolving credit facility (expected to be undrawn at
closing).
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 our ESG framework, given the substantial
implications for public health and safety. Given Ivanti's exposure
to the North American and European economies, the company remains
vulnerable to shifts in market demand and sentiment in these
unprecedented operating conditions.
Infoblox's capital structure will consist of a first lien revolver
and term loan (both rated B2) and a second lien term loan (rated
Caa2), with each rating reflecting the debt position in the capital
structure relative to the B3 CFR and B3-PD PDR.
Infoblox's appliance and SaaS-based products provide network
control, network automation and domain name system security
services. The company, headquartered in Santa Clara, CA, is owned
by funds affiliated with Warburg Pincus and Vista Equity Partners.
Infoblox generated total revenues of about $506 million in its
fiscal year ended July 31, 2020.
The principal methodology used in these ratings was Software
Industry published in August 2018.
DEMLOW PRODUCTS: Taps Wilson Auction as Real Estate Broker
----------------------------------------------------------
Demlow Products, Inc. seeks approval from the U.S. District Court
for the Eastern District of Michigan to employ Wilson Auction as
its real estate broker.
The Debtor requires the firm to provide advice and assistance
regarding the sale and auction of its personal property and
inventory.
Wayne Wilson, chief executive officer of Wilson Auction, disclosed
in court filings that the firm is a "disinterested person" within
the meaning of Section 101(14) of the Bankruptcy Code.
Wilson Auction can be reached through:
Wayne Wilson
Wilson Auction
825 N. Main St.
Bryan, OH 43506
Telephone: (419) 636-5500
Facsimile: (419) 636-5900
E-mail: bjwilson@wilsonauctionltd.net
About Demlow Products
Demlow Products, Inc. -- https://demlowproducts.com/ -- is an
international supplier of formed wire products. Demlow Products is
a privately held and founded in 1967.
Demlow Products sought protection under Chapter 11 of the US
Bankruptcy Code (Bankr. E.D. Mich. Case No. 19-57161) on Dec. 7,
2019.
In the petition signed by James Demlow, president, the Debtor was
estimated to have $500,000 to $1 million in assets and $1 million
to $10 million in liabilities.
Don Darnell, Esq. at Darnell, PLLC, represents the Debtor.
DESTINATION MATERNITY: Wins Nov. 16 Plan Exclusivity Extension
--------------------------------------------------------------
At the behest of Destination Maternity Corporation and its
affiliates, Judge Brendan L. Shannon extended the period within
which the Debtors have the exclusive right to file a plan of
reorganization to November 16, 2020, and to obtain confirmation of
the plan through and including January 18, 2021.
Last year, the Court approved the asset purchase agreement among
the Debtors, the Marquee Brands, LLC as Purchaser and a contractual
joint venture between Hilco Merchant Resources, LLC and Gordon
Brothers Retail Partners, LLC as Agent. On December 20, 2019, the
Debtors closed the transaction approved in the APA.
Pursuant to the terms of the APA, the Agent conducted going out of
business sales through March 2020. Due to the current Covid-19
pandemic, the Agent had to cease the GOB Sales abruptly. The
Debtors, the Agent, and Purchaser continue to reconcile certain
amounts outstanding among the parties under the APA, including the
reconciliation of an escrow related to inventory and strategic
partnership royalties.
Following the Sale, the Debtors began the process of marketing
their remaining miscellaneous assets that the Debtors believe are
valuable. The Debtors continue to seek to monetize the Remaining
Assets to maximize value for creditors.
The Debtors also continue to negotiate with the Purchase and Agent
regarding the Royalty Escrow, which could result in additional
funds to the Debtors' estates. The Debtors are in the process of
distributing funds.
The Debtors said their diligent efforts to maximize value for all
creditors and stakeholders through the sale of certain assets to
the Purchaser and the GOB Sales over the course of these Chapter 11
Cases have enhanced the bankruptcy estates and the potential
recovery for their creditors. The extension, the Debtors said,
will afford them an opportunity to propose a realistic and viable
chapter 11 plan and an opportunity to negotiate with creditors and
other parties-in-interest without prejudice and relieves the
potential pressure on the Debtors or any other parties-in-interest
to file a plan.
About Destination Maternity Corporation
Destination Maternity is a designer and omnichannel retailer of
maternity apparel in the United States, with the only nationwide
chain of maternity apparel specialty stores, as well as a deep and
expansive assortment available through multiple online distribution
points, including our three brand-specific websites. As of August
3, 2019, Destination Maternity operated 937 retail locations,
including 446 stores in the United States, Canada, and Puerto Rico,
and 491 leased departments located within department stores and
baby specialty stores throughout the United States and Canada. It
also sells merchandise on the Internet, primarily through
Motherhood.com, APeaInThePod.com, and DestinationMaternity.com
websites. Destination Maternity sells merchandise through its
Canadian website, MotherhoodCanada.ca, through Amazon.com in the
United States, and through websites of certain of our retail
partners, including Macys.com. Destination Maternity's 446 stores
operate under three retail nameplates: Motherhood Maternity(R), A
Pea in the Pod(R), and Destination Maternity(R). It also operates
491 leased departments within leading retailers such as Macy's(R),
buybuy BABY(R), and Boscov's(R). Generally, the company is the
exclusive maternity apparel provider in its leased department
locations.
Destination Maternity and its two subsidiaries sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 19-12256) on Oct. 21,
2019. As of Oct. 5, 2019, Destination Maternity disclosed assets of
$260,198,448 and liabilities of $244,035,457.
The Honorable Brendan Linehan Shannon is the case judge. The
Debtors tapped Kirkland & Ellis LLP as legal counsel; Greenhill &
Co., LLC as investment banker; Landis Rath & Cobb LLP as local
bankruptcy counsel; Hilco Streambank LLC as intellectual property
advisor; Prime Clerk LLC as claims agent; and Berkeley Research
Group, LLC as restructuring advisor. BRG's Robert J. Duffy has been
appointed as a chief restructuring officer.
Andrew Vara, acting U.S. trustee for Region 3, on Nov. 1, 2019,
appointed five creditors to serve on the official committee of
unsecured creditors in the Chapter 11 cases of Destination
Maternity Corporation and its affiliates. The Committee hired
Cooley LLP as lead counsel; Cole Schotz P.C., as Delaware and
conflict counsel; and Province, Inc., as a financial advisor.
In 2019, the Court approved the asset purchase agreement among the
Debtors, the Marquee Brands, LLC as Purchaser and a contractual
joint venture between Hilco Merchant Resources, LLC and Gordon
Brothers Retail Partners, LLC as Agent. On December 20, 2019, the
Debtors closed the transaction approved in the APA.
DIXON PAVING: Unsecureds Owed $1.23M to Get $50,000 in Plan
-----------------------------------------------------------
Dixon Paving, Inc., filed with the U.S. Bankruptcy Court for the
Eastern District of North Carolina, Raleigh Division, a Plan of
Reorganization and a Disclosure Statement on Aug. 14, 2020.
The Debtor owns no real property. The majority of the Debtor's
assets consist of equipment used in paving operations or equipment
used in milling operations, as well as accounts receivable
generated from the performance of milling and paving work, vehicles
used by employees to travel to jobsites, and miscellaneous office
furniture and equipment.
The Debtor's liabilities consist of secured, priority, and
unsecured obligations. The Debtor has several secured obligations
with various lenders whereby the Debtor financed the purchase of
its equipment or vehicles. The Debtor also has several outstanding
secured obligations for taxes.
The Debtor's Plan contemplates a reorganization of its operations
and obligations. The Plan is based upon the Debtor's scaling back
its operations to focus only on milling work, selling the paving
equipment to repay debt, and restructuring its remaining
obligations. The Debtor will pay creditors through its ongoing
operations, sales of equipment, future cash flow.
Class 19 General Unsecured Claims are impaired. As of the date of
the filing of the Plan, total General Unsecured Claims and known or
projected Deficiency Claims that fall within this Class, equal
$1,228,538. The Debtor will pay the holders of allowed undisputed,
general unsecured claims the total sum of $50,000, in quarterly
payments over five years. Quarterly payments will commence on the
earlier of Jan. 15, 2022 and will continue quarterly thereafter.
All payments to creditors within this class shall be distributed
pro rata.
The Debtor may investigate and pursue avoidance actions pursuant to
11 U.S.C. Sec. 547 and 548. Any funds collected through such
actions will be distributed in accordance with the priorities
established by the Bankruptcy Code and orders of the Court.
A full-text copy of the Disclosure Statement dated August 14, 2020,
is available at
https://www.pacermonitor.com/view/NURIHPQ/Dixon_Paving_Inc__ncebke-20-00656__0159.0.pdf?mcid=tGE4TAMA
A full-text copy of the Plan dated August 14, 2020, is available at
https://www.pacermonitor.com/view/NI7OCHY/Dixon_Paving_Inc__ncebke-20-00656__0158.0.pdf
Attorneys for the Debtor:
STUBBS & PERDUE, P.A.
Trawick H. Stubbs, Jr.
E-mail: tstubbs@stubbsperdue.com
Laurie B. Biggs
E-mail: lbiggs@stubbsperdue.com
9208 Falls of Neuse Road, Suite 201
Raleigh, North Carolina 27615
Tel: (919) 870-6258
Fax: (919) 870-6259
About Dixon Paving
Based in Raleigh, North Carolina, Dixon Paving, Inc., is a
commercial paving and milling company. Dixon Paving filed a
Chapter 11 bankruptcy petition (Bankr. E.D.N.C. Case No. 20-00656)
on Feb. 14, 2020. At the time of the filing, the Debtor was
estimated to have $1 million to $10 million in liabilities. Judge
David M. Warren oversees the case. The Debtor's counsel is Trawick
H. Stubbs, Jr., Esq., at Stubb & Perdue, P.A.
DPW HOLDINGS: Explores Potential Rights Offering
------------------------------------------------
DPW Holdings, Inc., is exploring the possibility of conducting a
public subscription rights offering that could involve the issuance
to its shareholders (as of a future record date) a dividend in the
form of a basic subscription right and over-subscription privilege
to purchase shares of its capital stock and/or other securities.
The Company is considering offering any or all of the following
securities: common stock, dividend-yielding preferred stock and
warrants to purchase common stock. In particular, the Company is
considering offering purchasers of its securities in the rights
offering the right to exchange such securities for ownership of its
power electronics subsidiary, Coolisys Technologies Corp., if and
when Coolisys effects an initial public offering of its shares or
other going public transaction such as a spin-off. The offering of
the securities in the rights offering would be made pursuant to a
registration statement on Form S-1 to be filed with the U.S.
Securities and Exchange Commission.
In a rights offering, shareholders as of an announced record date
receive a basic right, but not the obligation, to purchase an
issuer's securities during a to-be-determined subscription exercise
period. Shareholders as of the record date also receive an
over-subscription privilege to purchase additional securities
beyond their pro rata percentage ownership if other shareholders do
not participate in the offering.
DPW intends to use a significant portion of any net proceeds of the
potential rights offering to accelerate the growth of Coolisys'
electric vehicle charger business. Coolisys' principal subsidiary,
Digital Power Corporation, has been providing innovative power
solutions since 1969 and DPW believes that Coolisys is uniquely
positioned to address the emerging EV charger market, which is
projected to reach $27.7 billion by 2027 from an estimated $2.5
billion last year, growing at a compounded annual growth rate of
34.7%, according to the market research firm MarketsandMarkets.
Coolisys' product line of EV chargers includes an innovative
charging solution that is expected to produce a full charge for a
passenger vehicle with a 150-mile range battery in just over 30
minutes. Additional information regarding Coolisys' EV charger
product line is available by listening to the webcast hosted by DPW
on Aug. 4, 2020.
The Company intends to gauge feedback and interest for the
potential rights offering from institutional accredited investors
and qualified institutional buyers. The Company welcomes feedback
from institutional accredited investors and qualified institutional
buyers as it "tests the waters" for the terms of a potential rights
offering.
About DPW Holdings
DPW Holdings, Inc. -- http://www.DPWHoldings.com-- is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact. Through its wholly and majority-owned subsidiaries and
strategic investments, the Company provides mission-critical
products that support a diverse range of industries, including
defense/aerospace, industrial, telecommunications, medical, and
textiles. In addition, the Company owns a select portfolio of
commercial hospitality properties and extends credit to
selectentrepreneurial businesses through a licensed lending
subsidiary. DPW's headquarters are located at 201 Shipyard Way,
Suite E, Newport Beach, CA 92663.
DPW Holdings recorded a net loss available to common stockholders
of $32.93 million for the year ended Dec. 31, 2019, compared to a
net loss available to common stockholders of $32.34 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$40.49 million in total assets, $37.46 million in total
liabilities, and $3.03 million in total stockholders' equity.
Ziv Haft., Certified Public Accountants (Isr.) BDO Member Firm, the
Company's auditor since 2012, issued a "going concern"
qualification in its report dated May 29, 2020 citing that the
Company has a working capital deficiency, has incurred significant
losses and needs to raise additional funds to meet its obligations
and sustain its operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
ECHO ENERGY: Creditors to Get Paid From Proceeds of Asset Sale
--------------------------------------------------------------
Echo Energy Partners I, LLC filed a Chapter 11 Plan of Liquidation
which proposes to distribute the Debtor's assets, including
proceeds from the sale of substantially all of its oil and gas
assets, to its creditors and for the Reorganized Debtor to
liquidate the Debtor's remaining assets, and wind-down its affairs.
Pursuant to the terms of the Plan, a Plan Administrator will
distribute the net proceeds of the sale of substantially all oil
and gas assets, as well the proceeds from any other assets to
creditors in order of the priority of their Claims.
Under the Plan, all Allowed Administrative Claims, all Allowed
Priority Tax Claims, and all Priority Claims shall be paid in full
on or promptly after the Effective Date.
Holders of Other Secured Claims will either, in accordance with the
priority of such Other Secured Claim with respect to the collateral
securing such claim: (i) be paid up to the extent of such Other
Secured Claim; or (ii) receive their collateral, without
representation of warranty. The Allowed Prepetition Lenders'
Secured Claims will be paid the Cash proceeds of the collateral
securing the Prepetition Secured Lenders’ Claim.
General Unsecured Claims will receive their pro rata share of the
Available Assets after payment of Allowed Administrative Claims,
Allowed Priority Tax Claims, Allowed Priority Claims, Allowed Other
Secured Claims, Allowed Prepetition Lenders' Secured Claims, and
the payment of, or provision for, all other amounts payable under
the Wind Down Budget.
Holders of Allowed Interests against the Debtor shall be cancelled
and extinguished, and the holders of Interests shall not receive or
retain any property or assets on account of their Interests.
A full-text copy of the Disclosure Statement dated August 14, 2020,
is available at https://tinyurl.com/y3vodx8y from PacerMonitor.com
at no charge.
Counsel for the Debtor:
BRACEWELL LLP
William A. (Trey) Wood III
Trey.Wood@bracewell.com
Jason G. Cohen
Jason.Cohen@bracewell.com
711 Louisiana, Suite 2300
Houston, Texas 77002
Telephone: (713) 223-2300
Facsimile: (713) 221-1212
About Echo Energy Partners I
Echo Energy Partners I, LLC -- https://www.echoenergy.com/ -- is an
upstream oil and gas firm that partners with financial
institutions, pension funds, family offices, and high net worth
individuals. It currently manages assets in the SCOOP, STACK,
Midland, and Delaware basins in Oklahoma and Texas.
Echo Energy Partners I sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-31920) on March 24,
2020. At the time of the filing, the Debtor was estimated to have
assets of between $50 million and $100 million and liabilities of
between $100 million and $500 million.
Judge David R. Jones oversees the case.
The Debtor tapped Bracewell LLP as legal counsel; Stretto as claims
agent and administrative advisor; and Opportune LLP as
restructuring advisor. Gregg Laswell, a director at Opportune's
subsidiary, Dacarba LLC, is Debtor's chief restructuring officer.
ESCALON MEDICAL: Posts $702K Net Loss in Fiscal 2020
----------------------------------------------------
Escalon Medical Corp. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss
applicable to common shareholders of $702,021 on $9.40 million of
net revenues for the year ended June 30, 2020, compared to a net
loss applicable to common shareholders of $301,616 on $9.63 million
of net revenues for the year ended June 30, 2019.
As of June 30, 2020, the Company had $5.72 million in total assets,
$4.21 million in total liabilities, and $1.51 million in total
shareholders' equity.
Friedman LLP, in Marlton, New Jersey, the Company's auditor since
2018, issued a "going concern" qualification in its report dated
Sept. 28, 2020, citing that the Company's significant accumulated
deficit and recurring losses from operations and negative cash
flows from operating activities raise substantial doubt about the
Company's ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/862668/000086266820000008/esmc_20200630-10k.htm
About Escalon
Headquartered in Wayne, Pennsylvania, Escalon Medical Corp.
operates in the healthcare market, specializing in the development,
manufacture, marketing and distribution of medical devices for
ophthalmic applications.
ETHEMA HEALTH: Incurs $10.3 Million Net Loss in First Quarter
-------------------------------------------------------------
Ethema Health Corporation filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $10.34 million on $83,542 of revenues for the three months ended
March 31, 2020, compared to a net loss of $3.09 million on $82,015
of revenues for the three months ended March 31, 2019.
As of March 31, 2020, the Company had $2.89 million in total
assets, $32.64 million in total liabilities, and a total
stockholders' deficit of $29.75 million.
As of March 31, 2020 the Company has a working capital deficiency
of approximately $28,200,000 and accumulated deficit of
approximately $55,800,000. Management believes that current
available resources will not be sufficient to fund the Company's
planned expenditures over the next 12 months. Accordingly, the
Company will be dependent upon the raising of additional capital
through placement of common shares, and/or debt financing in order
to implement its business plan, and generating sufficient revenue
in excess of costs. If the Company raises additional capital
through the issuance of equity securities or securities convertible
into equity, stockholders will experience dilution, and such
securities may have rights, preferences or privileges senior to
those of the holders of common stock or convertible senior notes.
If the Company raises additional funds by issuing debt, the Company
may be subject to limitations on its operations, through debt
covenants or other restrictions. If the Company obtains additional
funds through arrangements with collaborators or strategic
partners, the Company may be required to relinquish its rights to
certain geographical areas, or techniques that it might otherwise
seek to retain. There is no assurance that the Company will be
successful with future financing ventures, and the inability to
secure such financing may have a material adverse effect on the
Company's financial condition. The Company said these factors
create substantial doubt about its ability to continue as a going
concern.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/792935/000172186820000426/f2sgrst10q092120.htm
About Ethema Health
Headquartered in West Palm Beach, Florida, Ethema Health
Corporation -- http://www.ethemahealth.com-- operates in the
behavioral healthcare space specifically in the treatment of
substance use disorders. Ethema developed a unique style of
treatment over the last eight years and has had much success with
in-patient treatment for adults. Ethema will continue to develop
world class programs and techniques for North America.
Ethema reported a net loss of $14.96 million for the year ended
Dec. 31, 2019, compared to a net loss of $8.18 million for the year
ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had $3.21
million in total assets, $23.23 million in total liabilities, and a
total stockholders' deficit of $20.02 million.
Daszkal Bolton LLP, in Fort Lauderdale, Florida, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated July 10, 2020, citing that the Company had accumulated
deficit of approximately $45.5 million and negative working capital
of approximately $18.3 million at Dec. 31, 2019, which raises
substantial doubt about its ability to continue as a going concern.
EVANGELICAL HOMES: Fitch Cuts Rating on 2013 Bonds to 'BB'
----------------------------------------------------------
Fitch Ratings has downgraded to 'BB' from 'BB+' the ratings on the
following revenue bonds issued on behalf of the Evangelical Homes
of Michigan Obligated Group (EHM OG, dba EHM Senior Solutions):
-- $23,910,000 Michigan Strategic Fund, series 2013;
-- $10,470,000 Economic Development Corporation of the City of
Saline (MI), series 2013.
The Rating Outlook is Stable.
SECURITY
The bonds are secured by a pledge of unrestricted receivables of
the Obligated Group, a mortgage on the revenue-generating property
and structures on the three campuses, and two separate debt service
reserve funds.
KEY RATING DRIVERS
STABLE OPERATING PROFILE: The market area around Saline, MI and
broader Washtenaw County is favorable, notwithstanding the current
pressures and uncertainty that the coronavirus pandemic may present
in regards to supply costs, demand, and occupancy. While senior
living competition is present, EHM operates the only full-service
rental lifeplan community (LPC) in the county. EHM's occupancy
rates historically are favorable, although assisted living unit
(ALU) and skilled nursing facility (SNF) occupancy rates at the end
of fiscal 2020 were affected by the pandemic and related
restrictions on hospital procedures.
MODEST FINANCIAL PROFILE; COVENANT VIOLATION IN 2019; IMPROVEMENT
IN 2020, ALTHOUGH PRESSURES CONTINUE: Maximum annual debt service
(MADS) coverage was very low at 0.4x in fiscal 2019 (per management
calculation), resulting in a violation of the 1.2x minimum MADS
coverage covenant. Operating improvement in fiscal 2020 resulted in
better coverage of nearly 0.8x, but still below covenanted level.
MADS coverage in fiscal 2019 was affected by EHM's $1.9 million
write-off for receivables greater than 365 days. Liquidity ratios
are modest but benefited from CARES Act and PPP funds. Cash on hand
measured a thin 79 days at FYE 2020 and improved to 124 days at
July 31, 2020. Rental-oriented senior living communities tend to
have much more modest days cash than communities with material
entrance fees. Cash-to-debt measured 23% at FYE 2020 and improved
to 34% at July 31, 2020. Operating metrics improved in fiscal 2020,
resulting in an operating ratio of 101% and net operating margin
(NOM) of 3.7%, both roughly in-line with non-investment grade
medians.
FORBEARANCE AGREEMENT: EHM and the bond trustee (UMB Bank) entered
into a short-term forbearance agreement in July 2020. The
short-term agreement expires on Sept. 30, 2020, and a permanent
forbearance agreement is being negotiated. The fiscal 2019 and
fiscal 2020 audits are not expected to be signed until after the
permanent forbearance agreement is in place. Fitch expects that EHM
will receive a forbearance agreement and will be in compliance with
its debt service coverage covenant in the near future, at least by
fiscal 2022. Failure to do so could put additional pressure on the
rating.
MIXED LONG-TERM LIABILITY PROFILE: EHM OG's debt burden is sound.
MADS as a percentage of revenue measured 6.6%, favorably well below
non-investment grade median. Debt-to-net available, on the other
hand, measured a high 20x in fiscal 2020.
ASYMMETRIC RISK FACTORS: There are no asymmetric risk factors
associated with EHM OG's rating.
RATING SENSITIVITIES
The downgrade is a function of continued operating pressures --
despite notable improvement in unaudited fiscal 2020 and into
interim fiscal 2021 -- that have resulted in consecutive years with
a MADS coverage of below 1.0x. Moreover, even with the receipt of
PPP loans (which notably bolstered EHM's cash position, and the
majority of which are expected to be forgiven) EHM's liquidity is
light, particularly days cash on hand. To this point, the
coronavirus pandemic has highlighted the importance of maintaining
a robust liquidity position in order to help an organization
withstand external shocks.
The Stable Outlook at the 'BB' rating level reflects Fitch's
expectation that EHM's operating results will continue to rebound
and stabilize at levels sufficient to support adequate liquidity
ratios at the rating level.
The recent coronavirus pandemic and related government containment
measures have created a more uncertain environment for the entire
LPC sector. Top-line revenue pressure and added expenses started to
affect EHM in April 2020 and could persist depending on the degree
and longevity of the pandemic and related economic challenges.
Fitch's ratings are forward-looking in nature, and Fitch will
monitor developments in the sector as a result of the virus
outbreak as it relates to severity and duration, and incorporate
revised expectations for future performance and assessment of key
risks.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Sustained rebound in operating metrics (e.g., operating ratio
below 100% and/or NOM of better than 5%) leading to cash flow
generation sufficient to build adequate headroom to debt service
coverage covenant;
-- Notably improved liquidity ratios, particularly cash-to-debt
of approximately 50% or better and significantly increased days
cash on hand.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Failure to reach permanent forbearance agreement;
-- Restructuring of debt, particularly if the this dilutes EHM's
financial position;
-- Inability to execute continued operating improvement leading
to additional debt service
coverage covenant violation;
-- Weaker balance sheet metrics, particularly if cash on hand
falls below 100 days and/or cash-to-debt approaches 20%.
CREDIT PROFILE
EHM operates a SNF, a rehabilitation center, and a rental contract
retirement community (Brecon Village), all in Saline, MI.
Additional operations include home care and home support, senior
housing, hospice care and memory support services in southeastern
Michigan.
EHM Senior Solutions (the consolidated system of which EHM OG is
the primary member) also includes non-obligated entities, namely
LifeChoice Solutions. LifeChoice operates the only functioning "LPC
at home" model in Michigan.
EHM's total operating revenue measured just over $38 million in
unaudited fiscal 2020 (April 30 year-end).
STABLE OPERATING PROFILE
The market area around Saline and broader Washtenaw County is
favorable, notwithstanding the current pressures from the
coronavirus pandemic. Heading into the pandemic, the county
experienced population growth just below the national rate and
above the state, while the unemployment rate was below average and
the median household income level was above the national level.
As a rental property, EHM is less dependent on local housing
trends. Nevertheless, the housing market in Washtenaw County was
healthy heading into the pandemic. According to Zillow, the Zillow
home value index in the county as of August 2020 was just over
$296,000, exceeding the U.S. average and home values have increased
steadily since 2012.
While there are senior living competitors in the area, EHM operates
the only full-service rental LPC in Washtenaw County. There are
service line competitors, with ILU facilities and SNFs in the
market. The only other full-service LPC in the immediate area is
Glacier Hills, which operates an entrance fee model facility in Ann
Arbor. United Methodist Retirement Communities (rated BBB-) is
another not-for-profit full service LPC in the broader market that
operates in Dexter and Chelsea (just west of Saline and Ann
Arbor).
EHM's occupancy rates historically are good, with ILU, ALU, and SNF
occupancy consistently exceeding 90%. The coronavirus pandemic
affected occupancy, as ALU dropped to 82% at year-end 2020 and SNF
down to 73%. SNF occupancy rates declined considerably across the
state and throughout most of the U.S. as governors placed strict
restrictions on acute care hospital elective procedures in response
to the coronavirus pandemic. ILU occupancy held up, however,
averaging 90% in fiscal 2020 and even improving to 92% at year-end
2020.
MODEST FINANCIAL PROFILE; COVENANT VIOLATION IN 2019; IMPROVEMENT
IN 2020, ALTHOUGH PRESSURES CONTINUE
EHM's MADS coverage was very low at 0.4x in fiscal 2019 (per
management calculation), resulting in a covenant violation of the
1.2x minimum debt service coverage requirement. Operating
improvement in fiscal 2020 led to improved MADS coverage of nearly
0.8x but remains below the covenant requirement. MADS coverage in
fiscal 2019 was affected by EHM's $1.9 million write-off for
receivables greater than 365 days. When excluding the write-off,
EHM's actual debt service would have been 1.22x in fiscal 2019.
Liquidity ratios are modest but benefiting from CARES Act and PPP
funds. Total unrestricted cash and investments decreased to $8.4
million at FYE 2020 from $11.1 million at FYE 2019. Liquidity
rebounded to $12.9 million at unaudited July 31, 2020, inclusive of
$4.1 million in PPP loans (management expects the vast majority of
the PPP loan to be forgiven). Cash on hand measured a thin 79 days
at FYE 2020 (81 days per management calculation) but improves to
124 days at July 31, 2020 (125 days per management calculation)
(the bond covenant minimum is 75 days). The non-investment grade
LPC median is 307 days. Fitch notes that rental-oriented senior
living communities tend to have much more modest days cash than
LPCs with material entrance fees. Cash-to-debt measured 23% at FYE
2020 and improved to 34% at July 31, 2020 (non-investment grade
median is 30%).
Operating metrics improved notably in fiscal 2020. EHM's operating
ratio in fiscal 2020 measured approximately 101%, down from a much
weaker roughly 110% in fiscal 2019 (non-investment grade median is
101%). Similarly, NOM improved to 3.7% in fiscal 2020 from negative
5.4% in fiscal 2019 (non-investment grade median is 4.8%). The
improvement in fiscal 2020 was the result of multiple factors,
including: maintenance of sound ILU occupancy despite the pandemic;
considerable expense savings, including FTEs, as EHM worked to
align resources with demand; and improved accounts receivables
(A/R) management.
EHM was able to improve operating metrics in fiscal 2020 and in Q1
fiscal 2021 (100% operating ratio, 5.6% NOM) despite the
coronavirus pandemic. Management developed an action plan at the
beginning of the pandemic. As noted, EHM also received various
CARES Act grants and PPP loans. Management notes that EHM did not
have any reported cases of COVID-19 positive patients (as of
September), despite southeastern Michigan being one of the early
hotspots of the virus in the U.S.
Looking forward, Fitch expects EHM to implement additional
improvements and sustain operating momentum. To this end, and as
part of the debt service coverage covenant violation, EHM retained
a consultant to help develop an improvement plan, including:
additional expense savings opportunities, such as vendor contract
renegotiations and consolidation of certain administrative
functions; improved coding and A/R collections; potentially
downsizing or eliminating unprofitable non-core services; and payor
mix enhancements to drive top-line revenue growth. The consultant
report projects that EHM will return to compliance with the debt
service coverage covenant by fiscal 2022; failure to do so may
pressure the rating.
EHM's capital spending plans are limited in the coming years, with
annual capex of approximately $1.5 million - $2 million. The
capital spending ratio average just over 100% between fiscal 2016
and fiscal 2020 (non-investment grade median is 97%). EHM's average
age of plant measured 13.8 years at FYE 2020 (non-investment grade
median is 11.7 years).
FORBEARANCE AGREEMENT
EHM and the bond trustee (UMB Bank) entered into a short-term
forbearance agreement in July 2020. The short-term agreement
expires on Sept. 30, 2020 and a permanent agreement continues to be
negotiated. Terms of the short-term agreement include: EHM granted
UMB a mortgage pledge on development property in Farmington Hills,
MI (which EHM plans to sell); EHM agrees to operate on a cash
budget approved by UMB, with input from the turnaround consultant;
and EHM will post monthly operating statements on EMMA. The fiscal
2019 and fiscal 2020 audits are not expected to be signed until
after the permanent forbearance agreement is in place. Fitch
expects that EHM will receive a forbearance agreement and will be
in compliance with its debt service coverage covenant in the near
future, at least by fiscal 2022. Failure to do so could pressure
the rating.
MIXED LONG-TERM LIABILITY PROFILE
EHM's debt burden is sound. MADS as a percentage of revenue
measured 6.6% in fiscal 2020, favorably well below non-investment
grade median of 16.4%. Debt-to-net available, on the other hand,
measured a high 20x in fiscal 2020 (non-investment grade median of
11.8x). All debt is fixed rate.
EHM has an underfunded defined benefit (DB) Church pension plan.
While the funded status is very low at 19% at FYE 2020, the
absolute value of the underfunded status ($9 million at FYE 2020)
is manageable given the low debt load.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
FECK PROPERTIES: Seeks Approval to Hire Booking Manager
-------------------------------------------------------
Feck Properties LLC seeks authority from the U.S. Bankruptcy Court
for the Middle District of Florida to hire Michael Christian Feck,
an insider, as its booking manager.
The services that will be provided by the booking manager are as
follows:
a. manage reservations;
b. respond to inquiries by phone, email and Internet;
c. respond to issues raised by customers, resulting in a
customer satisfaction rating of 5 stars on most sites, and no less
than 4 stars on any reporting website;
Mr. Feck will get 10 percent of revenues from the vacation-rental
operations.
Mr. Feck can be reached at:
Michael Christian Feck
494 Stearns Ave
Mansfield, MA 02048-3010
About Feck Properties
Feck Properties is primarily engaged in real estate rentals
business in Florida and real estate development and sales business
in Massachusetts.
Feck Properties filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-05209) on July 7, 2020. In the petition signed by Stanley B.
Feck, manager, Debtor disclosed $4,750,000 in assets and $2,773,630
in liabilities. Kevin Christopher Gleason, Esq., at Florida
Bankruptcy Group, LLC represents Debtor as legal counsel.
FIRST FLORIDA LIVING: Solicitation Period Extended to Dec. 31
-------------------------------------------------------------
Judge Jerry A. Funk of the U.S. Bankruptcy Court of the Middle
District of Florida, Jacksonville Division, granted the Debtor's
renewed motion to extend the periods within which First Florida
Living Options, LLC has the exclusive right to obtain acceptances
of its Chapter 11 plan, through and including December 31, 2020.
The Order continues the September 2, 2020 hearing on approval of
the Debtor's Disclosure Statement to December 8 at 11:00 a.m. The
Debtor anticipates that the hearing on the confirmation of its
Chapter 11 Plan will be scheduled shortly thereafter.
About First Florida Living Options
First Florida Living Options LLC, formerly known as Surrey Place of
Ocala, conducts its business under the names Hawthorne Health and
Rehab of Ocala, Hawthorne Village of Ocala, and Hawthorne Inn of
Ocala. The company is based in Ocala, Fla.
First Florida Living Options filed a Chapter 11 petition (Bankr.
M.D. Fla. Case No. 19-02764) on July 22, 2019. The petition was
signed by John M. Crock, its vice president.
The Debtor was estimated to have $1 million to $10 million in both
assets and liabilities as of the bankruptcy filing.
Judge Jerry A. Funk oversees the case. Johnson Pope Bokor Ruppel &
Burns, LLP is the Debtor's bankruptcy counsel.
FRONTIER COMMUNICATIONS: Fitch Rates $1.65BB DIP Financing 'BB+'
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' new issue rating to Frontier
Communications Corp. (Frontier, NYSE: FTR) $1.65 billion of senior
secured Debtor-in-Possession (DIP) financing in the form of a
DIP-to-exit term loan and/or notes. The initial form will be as DIP
facility/notes to be funded while the company is in bankruptcy.
While in bankruptcy, the loan/notes will have a super priority
administrative claim. Once Frontier emerges from bankruptcy, the
DIP loan/notes will convert to first lien senior secured term loan
and notes that will be pari passu with the company's reinstated
first lien senior secured debt and first lien revolver. The DIP
rating is assigned only with respect to the facility as it exists
during the pendency of the bankruptcy. The post-emergence exit
facility will have a distinct rating predicated on the reorganized
debtors' new capital structure and with typical notching off of the
Issuer Default Rating (IDR).
Under Fitch's criteria, DIP instrument ratings are point in time
and accordingly, this issue rating will be withdrawn within one
business day.
Criteria Variation: In the analysis of the Frontier DIP, Fitch has
considered both loan and bond components as being akin to a loan
for the various considerations described in the criteria because
the bonds and the loans components will share the same collateral,
have identical provisions and the distinction in debt form (loan vs
bond) does not impact the relative risk. The variation did not lead
to a category level rating change.
Fitch has also assigned a 'BB-(EXP)' Long-Term IDR to Frontier and
its subsidiaries with a Stable Outlook. In addition, Fitch has
assigned expected instrument ratings based on the capital structure
outlined in 'Liquidity and Debt Structure'. Frontier's and Frontier
Southwest's senior secured debt have been assigned a
'BB+(EXP)'/'RR1' ratings. The senior unsecured debt of Frontier
North, Frontier California and Frontier West Virginia has been
assigned a 'BB(EXP)'/'RR2' rating. The senior unsecured debt of
Frontier Florida has been assigned a 'B+(EXP)'/'RR5' rating. Fitch
expects to assign the ratings following Frontier's emergence in
early 2021. The expected ratings will be reviewed for material
changes prior to Fitch assigning final ratings. Material changes
may include changes in the company's capital structure at
emergence, any material deviations from current assumptions, as
well as Fitch's issuance of updated criteria or criteria exposure
draft. Expected ratings, like any other rating, can be raised,
lowered, placed on Rating Watch or withdrawn.
KEY RATING DRIVERS
DIP Key Rating Drivers:
Collateral Value to DIP Loan/Notes: The overcollateralization of
the DIP facility/notes is the most important rating driver and
carries significant weight in the issue rating. Although
substantially all value is pledged to the DIP lenders, the majority
of the actual collateral is limited to equity interest in certain
subsidiaries. The enterprise valuation underlying the confirmed
plan of reorganization equals $11.25 billion of which approximately
$10.8 billion is included in the DIP collateral package. Fitch
forecasted EBITDA for 2020 and 2021 is $2.38 billion and $2.04
billion, respectively (net of CAF II funding), reflecting a
bankruptcy multiple of approximately 5x. The multiple is supported
by peer trading multiples and purchase multiples in sector M&A
transactions. Structurally senior debt at the subsidiary level as
well as the equally ranking DIP revolving facility eat into the DIP
term loan collateral cushion. Incurrence of incremental term loan
debt and/or additional subsidiary level debt could further reduce
collateral coverage.
Facility Structural Attributes: Structural features of the DIP
agreement are another key rating driver. Certain structural
features of the DIP facility/notes terms were considered to be
protective of lenders, including its priming first lien,
super-priority administrative ranking and the inclusion of
subsidiary guarantees. However, lender control over the bankruptcy
process is limited due to the absence of maintenance financial
covenants and case milestones. The limitation of collateral to
equity interests in subsidiaries is less protective and can give
rise to additional structurally senior or structurally pari debt.
Post-Petition Liquidity and Cash Flow: The $1.650 billion DIP
facility/notes are being used entirely to refinance outstanding
first lien bonds and provides no additional liquidity. However,
Fitch anticipates the core business to produce modestly positive
FCF on a go forward basis (Fitch estimates around $500 million in
2021, declining to $250 million to $300 million in 2022 when CAF II
funding expires and prior to any replacement funding). Furthermore,
Frontier has robust cash reserves as a result of several asset
sales executed during the pendency of the bankruptcy.
Prospects and Restructuring Scope: The DIP-to-Exit facility/notes
executed post-confirmation is unique and alleviates a substantial
amount of risk typically associated with the bankruptcy process.
Fitch anticipates the company will emerge as a going-concern and
continue to operate. Although a somewhat lengthy regulatory
approval process will likely delay emergence until early 2021, the
confirmation of the plan signals the conclusion of the
debtor/creditor negotiation phase and emergence is expected to
occur in due course. Upon emergence, Frontier will have a
significantly improved balance sheet and financial profile with
debt reduced by approximately $11 billion+ and interest expense
reduced by $1 billion.
Expected Rating Key Rating Drivers:
Low Leverage upon Emergence: The 'BB-(EXP)' IDR and Stable Outlook
is supported by relatively low leverage for the IDR and relatively
low leverage compared with other telecom operators in Fitch's U.S.
telecom universe. Fitch expects gross leverage of 2.8x at YE 2021
(net leverage of 2.4x). In the absence of additional rural
broadband support, leverage, both gross and net, could rise
approximately 0.4x to 0.5x. Additionally, a much improved FCF
position will result with a reduction in interest expense of more
than $1 billion annually. Fitch believes the company will have the
opportunity to increase investments in key strategic areas
including fiber to the home, and greater fiber investment to
support enterprise and wholesale services, including fiber to the
tower. The rating is constrained by the near-term expected decline
in legacy revenues and the need to continue to take costs out of
the business.
Managing Impact of Coronavirus: Fitch believes the risk of the
pandemic on the operational performance of the telecom sector is
low relative to other sectors. Enterprise revenues have some
pressure with businesses temporarily closed (with the effect on
small businesses more pronounced), but this has been mitigated by
increased use in communication services to conduct business as
travel is down materially and remote working continues. Stability
in consumer revenues has been supported by demand for broadband,
not only for work at home, but remote learning and increased
consumption of entertainment services such as video and gaming.
Capital Allocation: Frontier is expected to emerge from bankruptcy
in early 2021. The current holders of senior unsecured debt will
become the new owners of the company as a result of the
restructuring support agreement. The company's capital allocation
policy remains uncertain while the company is in bankruptcy with
respect to more aggressive investment plans and an articulated
capital structure. Fitch believes the company and parties to the
restructuring support agreement are targeting a net leverage ratio
of less than three times based upon the anticipated level of debt
at emergence.
Challenging Operating Environment: Frontier's rating incorporates a
challenging operating environment for wireline operators. Fitch
expects Frontier's revenue trends to continue to be negative in the
next couple of years on an organic basis. The expiration of CAF II
funding in 2022 will also have an impact on the company. Fitch
expects this latter effect to be mitigated by the next generation
of broadband support through the Rural Digital Opportunity Fund,
although Fitch's assumptions exclude potential funding from this
program. Additionally, the de-emphasis of products such as video
will impact revenues but have a far lower impact on EBITDA margins
given programming cost offsets.
FCF and Debt: Fitch is estimating FCF will be around $500 million
in 2021, when it is expected to emerge from bankruptcy. FCF could
decline to around $250 million to $300 million in 2022 upon the
expiration of CAF II funding. The effect on FCF due to the
expiration of CAF II funding could be mitigated by additional
broadband funding support. Following the emergence from bankruptcy,
Frontier will have a much more tenable capital structure.
Asset Sale: Frontier sold its operations in Washington, Oregon,
Idaho and Montana (the Northwest operations) to WaveDivision
Capital, LLC (WDC) for $1.352 billion in cash, subject to closing
adjustments. This cash combined with existing cash will be used to
settle claims in the bankruptcy process. Fitch estimated the
transaction multiple was approximately 5.3x based on 2019 estimated
EBITDA (Fitch-calculated EBITDA is before restructuring and other
charges and a goodwill impairment) for the operations.
Secured Debt Notching: Frontier parent secured debt is notched up
two levels from the IDR. The secured debt benefits from certain
guarantees and equity pledges. The first mortgage bonds of Frontier
Southwest are also notched up two levels from the IDR given the
security provided by a first lien on substantially all of its
assets. For rated entities with IDRs of 'BB-' or above, Fitch does
not perform a bespoke analysis of recovery upon default for each
issuance. Instead, Fitch uses notching guidance whereby an issuer's
secured debt can be notched by up to tow rating levels.
Unsecured Debt Notching: For corporate entities rated 'BB-' and
above, the rating assigned to an issuer's senior unsecured debt
instrument assumes an average recovery available to these creditors
in the event of bankruptcy. When average recovery prospects are
present, IDRs and unsecured debt instrument ratings are equal, with
no notching. For subsidiary unsecured debt, Fitch notes the
structural seniority to Frontier parent debt and the rating is
notched up one level to 'BB(EXP)'/'RR2'. At any rating level where
the bespoke approach is not used, analysts can denote contractual
or structural subordination that is detrimental to the unsecured
debt by rating it lower than the IDR; additionally, a bespoke style
analysis determining below average recoveries could also lead to a
rating lower than the IDR. The 'B+(EXP)'/'RR5' Recovery Rating
assigned to Frontier Florida's unsecured debt reflects Frontier
Florida as a guarantor of Frontier's secured credit facility.
Parent-Subsidiary Relationship: Fitch linked the IDRs of Frontier
and its operating subsidiaries based on their strong operational
ties.
Frontier has an ESG Relevance Score of 4 for Management Strategy
due to operational challenges following the close of the Verizon
transaction that resulted in elevated subscriber churn and weaker
than expected revenue, which had a negative impact on the credit
profile, and is relevant to the rating in conjunction with other
factors.
DERIVATION SUMMARY
Frontier has a higher exposure to the more volatile residential
market compared with CenturyLink, Inc. (BB/Stable), one of its
wireline peers, and to some extent, Windstream Services, LLC (not
rated by Fitch). Incumbent wireline operators within the
residential market face wireless substitution and competition from
cable operators, including Comcast Corp. (A-/Stable) and Charter
Communications Inc. (Fitch rates Charter's indirect subsidiary, CCO
Holdings, LLC BB+/Stable.) Cheaper alternative offerings, such as
voice over internet protocol and over-the-top (OTT) video services
provide additional challenges. Incumbent wireline operators had
modest success with bundling broadband and satellite video service
offerings in response to these threats.
Fitch expects the company to emerge from bankruptcy with lower
leverage than its higher rated peers CenturyLink and Charter.
Frontier needs to improve its competitive position in the
enterprise market. In this market, Frontier is smaller than AT&T
Inc. (A-/Stable), Verizon Communications Inc. (A-/Stable) and
CenturyLink. All three companies have an advantage with national or
multinational companies given their extensive footprints in the
U.S. and abroad. Frontier also has a slightly smaller enterprise
business than its wireline peer Windstream.
Compared with Frontier, AT&T and Verizon, have wireless offerings
that provide more service diversification. Frontier's gross
leverage is expected to be slightly higher than AT&T and Verizon
follow its emergence from bankruptcy.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- The maximum DIP size is $1.65 billion as split between the
term loan and notes.
-- The final DIP order and DIP documentation is generally
consistent with the terms provided in the term sheet and DIP
motion.
-- Revenues decline just above 10% in 2020, largely reflecting
the sale of the Pacific Northwest properties on May 1, 2020.
Revenue declines at a slightly lower rate in 2021 and 2022, due to
the partial year of the NW assets in 2020, and the loss of CAF II
revenues, respectively.
-- The EBITDA margin is expected to decline to the high 30% range
in 2020 and 2021 from the low 40% range in 2019. The loss of CAF II
funding further lowers EBTIDA margins in 2022. Pressure in 2022
could be partly offset by future rural broadband subsidies.
-- Capital spending reflects company plans of approximately $1.3
billion in 2020. Thereafter, capital intensity ranges from
16%-18%.
-- Cash taxes are nominal in 2020-2023.
-- The maximum DIP size is $1.65 billion as split between the
term loan and notes.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Gross leverage, defined as total debt with equity
credit/operating EBITDA, expected to be sustained at or below 3.0x,
with FFO leverage of 3.0x, while consistently generating positive
FCF margins in the mid-single-digits;
-- Greater certainty around the company's capital allocation
given the new shareholder base upon emergence;
-- Successful execution on cost reduction plans;
-- Consistent gains in revenues from anticipated investments in
fiber and broadband product areas;
-- Demonstrating stable EBITDA and FCF growth.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A weakening of operating results, including deteriorating
EBITDA margins and an inability to stabilize revenue erosion in key
product areas or offset EBITDA pressure through cost reductions;
-- Discretionary management decisions, including but not limited
to execution of M&A activity that increases gross leverage beyond
4.5x, with FFO leverage of 4.5x, in the absence of a credible
deleveraging plan.
LIQUIDITY AND DEBT STRUCTURE
Frontier has a substantial amount of liquidity at the current point
in time with more than $2 billion of cash. At emergence, the
company expects to have $150 million of cash and an undrawn $625
million credit facility. First lien debt is expected to be $3.344
billion; second lien debt is expected to total $1.6 billion, and
subsidiary debt is expected to total $856 million. Parent takeback
debt is expected to be $750 million, and whether or not it is
secured or unsecured will be determined at emergence. Fitch expects
to provide a final rating on the takeback debt at that time.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Frontier has an ESG Relevance Score of 4 for Management Strategy
due to operational challenges following the close of the Verizon
transaction that resulted in elevated subscriber churn and weaker
than expected revenue, which had a negative impact on the credit
profile, and is relevant to the rating in conjunction with other
factors.
Except for the matters discussed, the highest level of ESG credit
relevance, if present, is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity(ies),
either due to their nature or the way in which they are being
managed by the entity(ies).
FRONTIER COMMUNICATIONS: Moody's Assigns B3 CFR, Outlook Stable
---------------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating and
a B3-PD probability of default rating to Frontier Communications
Corporation (New) (Frontier) in connection with its post-bankruptcy
exit financing. Moody's has also assigned a B3 rating to Frontier's
proposed $1.65 billion first lien debtor-in-possession-to-Exit
financings (DIP-to-Exit financings), which are expected to be
comprised of a $500 million first lien DIP-to-Exit term loan and
$1.15 billion of first lien DIP-to-Exit secured notes. The maturity
of the first lien DIP-to-Exit term loan will be the earlier of
seven years post-closing and 90 days before the maturity of
Frontier's existing prepetition second lien notes due 2026; the
first lien DIP-to-Exit secured notes will mature seven years
post-closing. The net proceeds from the sale of the first lien
DIP-to-Exit financings will be used to fully repay $1.65 billion of
Frontier's prepetition 8% senior secured notes. The outlook is
stable.
Moody's is only rating the post-bankruptcy exit portion of the
company's $1.65 billion first lien DIP-to-Exit financings. Moody's
is not rating the initial debtor-in-possession portion of
Frontier's first lien DIP-to-Exit financings while the company
remains in bankruptcy.
On August 27, 2020 the US Bankruptcy Court for the Southern
District of New York confirmed Frontier's plan of reorganization.
The company expects to complete its financial restructuring process
and emerge from Chapter 11 bankruptcy protection sometime in early
2021 (Bankruptcy Exit). The Bankruptcy Exit date is uncertain due
to the need to obtain remaining regulatory approvals. Upon
emergence the company will reduce its prepetition senior unsecured
funded debt by approximately $11 billion and annual interest
expense by approximately $1 billion. Prepetition holders of the
company's senior unsecured debt will receive new common stock and
$750 million of takeback debt (unrated). The form of this takeback
debt will be determined at Bankruptcy Exit based on several
factors, including whether the company's prepetition second lien
notes are repaid prior to Bankruptcy Exit. Moody's expects that
this takeback debt will either be in the form of junior lien notes
or unsecured notes. The rating on the DIP-to-Exit financings is not
currently expected to be impacted by the final form of the takeback
debt. In anticipation of the Bankruptcy Exit and coincident with
the $1.65 billion first lien DIP-to-Exit financings, Frontier is
also issuing a $625 million first lien DIP-to-Exit revolving credit
facility (unrated) which will be pari passu with the first lien
DIP-to-Exit financings. The company's existing prepetition $850
million revolving credit facility ($749 million drawn as of June
30, 2020) was fully paid down on September 17, 2020 using a portion
of $2.29 billion of existing balance sheet cash (as of June 30,
2020). Frontier's existing prepetition $1.694 billion first lien
term loan B due 2024, $1.6 billion 8.5% second lien notes due 2026
and $856 million of various unsecured notes held at the company's
operating subsidiary levels are all currently expected to remain
outstanding at Bankruptcy Exit and will also all be unrated.
Initially, the borrower under the first lien DIP-to-Exit financings
and first lien DIP-to-Exit revolving credit facility will be
Frontier Communications Corporation as debtor in possession. After
conversion of the first lien DIP-to-Exit financings and first lien
DIP-to-Exit revolving credit facility to actual exit financings at
Bankruptcy Exit, the borrower will be a new domestic entity that
succeeds to the business and operations of Frontier Communications
Corporation as debtor in possession pursuant to the plan of
reorganization. While the company has stated in public filings that
it intends to remain a publicly traded company at Bankruptcy Exit
through the public listing of new common stock issued to unsecured
debtholders pursuant to the plan of reorganization, Moody's notes
that no official decision has yet been made regarding this matter.
The ratings assigned are contingent upon Frontier's emergence from
bankruptcy consistent with the terms of the August 27, 2020
confirmation order and are subject to change based on the company's
performance during bankruptcy.
Assignments:
Issuer: Frontier Communications Corporation (NEW)
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Senior Secured 1st Lien Bank Credit Facility, Assigned B3 (LGD4)
Senior Secured 1st Lien Regular Bond/Debenture, Assigned B3 (LGD4)
Outlook Actions:
Issuer: Frontier Communications Corporation (NEW)
Outlook, Assigned Stable
RATINGS RATIONALE
Frontier's B3 CFR rating reflects the high execution risks
post-bankruptcy of the company's modernization plan across its
operating segments to reverse continuing revenue and EBITDA
declines. Moody's expects revenue and EBITDA contraction will be in
excess of Frontier's rated peers through at least year-end 2022;
this applies even on a pro forma basis that excludes the company's
northwest US operations sold on May 1, 2020. Moody's believes
Frontier's bottoms-up designed modernization plan is likely
still-evolving, but now expects stepped-up capital investments
through 2028 with capital intensity peaking in 2022. Underscoring
the upfront nature and immensity of its turnaround effort the
company plans almost $7 billion of total capital spending for the
five-year period from 2020 to 2024, a portion of which will target
the conversion of 2.9 million homes out of the 11 million copper
homes currently passed to fiber passings. This substantial effort
will target multiple states across Frontier's footprint for network
upgrades, with a focus on the larger markets in Connecticut,
California, Texas and Florida.
As Frontier has historically endured high new customer churn, a
critical element of the company's success-based investing stage --
the extending of upgraded fiber networks laterally to new customer
homes -- is dependent upon effective customer targeting to better
achieve economic paybacks and longer and higher value customer
relationships. The modernization plan will need to incorporate
significantly improved customer care efficiencies to proactively
reduce churn, enhanced sales force capabilities and productivity
and reduced operational costs, including field costs. Despite a
reduced debt load after its emergence from bankruptcy, Frontier
will continue to operate at a competitive disadvantage versus
cable, fiber overbuilder and wireless competitors in the bulk of
its market footprint until meaningful network upgrades bolster its
value proposition. Evidence of good execution on this metric will
be steady market share expansion followed by sustained revenue and
EBITDA growth. Until then, Frontier's broadband speeds and
competitive value proposition to both consumer and commercial
customers is largely limited by a legacy copper network spanning
almost 80% of 14 million broadband-capable homes passed in its
25-state footprint, which includes 3 million fiber home passings
and 1.2 million fiber broadband subscribers today. Frontier also
faces continued steady top line and margin pressures in its
commercial and wholesale business segments, which comprise about
50% of overall revenue.
Post-bankruptcy operational enhancements include new leadership,
consultant hires, sales force and account management structural
changes and a greater prioritizing of strategic product offerings.
While strengthened financial flexibility post-bankruptcy will
afford Frontier a longer turnaround runway than it had
pre-bankruptcy, strengthening its existing core business will
require deft operational skills in the face of high single-digit
revenue declines accompanied by strong EBITDA pressures through at
least 2022. The company's debt leverage (Moody's adjusted) will
increase from projected lower levels at Bankruptcy Exit of around
3x to nearer 4x by year-end 2022, which only heightens the need for
steady and timely strategic execution success.
Post-bankruptcy, Frontier's financial policy includes a long term,
sustainable net leverage target (company defined) of under 3x, the
prioritization of reinvestment of discretionary cash flow into its
business versus shareholder friendly actions and potential asset
optimizations through non-core dispositions, but such potential
optimizations would not be anticipated until the later years of the
current modernization plan.
The instrument ratings reflect the probability of default of
Frontier, as reflected in the B3-PD probability of default rating,
an average expected family recovery rate of 50% at default, and the
loss given default (LGD) assessment of the debt instruments in the
capital structure based on a priority of claims. The first lien
DIP-to-Exit term loan and first lien DIP-to-Exit secured notes are
rated B3 (LGD4), in line with the B3 CFR, reflecting the benefits
from a first lien pledge of stock of certain subsidiaries of
Frontier which represent approximately 90% of Frontier's total
EBITDA and 80% of Frontier's total assets, and guarantees from a
subset of these subsidiaries (although the guarantor details are
not disclosed). In Moody's priority of claim waterfall, we rank the
first lien DIP-to-Exit revolving credit facility, first lien
DIP-to-Exit financings and existing prepetition first lien term
loan B behind structurally senior debt issued by various operating
subsidiaries as well as pension and trade payables of subsidiaries.
The first lien DIP-to-Exit revolving credit facility, first lien
DIP-to-Exit financings and existing prepetition first lien term
loan B are ranked ahead of the existing prepetition second lien
notes (unrated) and expected takeback debt (unrated) at Bankruptcy
Exit.
Moody's views Frontier's liquidity as good. At Bankruptcy Exit
Moody's expects the company to have $150 million in unrestricted
cash and cash equivalents and full borrowing capacity availability
on its $625 million first lien DIP-to-Exit revolving credit
facility. Reduced prepetition interest helps support moderate free
cash flow generation in 2021 but Moody's expects free cash flow to
be around negative $350 million in 2022 due to stepped-up capital
spending and contracting revenue over the next several years. The
company is expected to have high capital spending (Moody's
adjusted) of approximately $1.3 billion in 2021 and $1.7 billion in
2022. Moody's expects the company will need to draw down on a
portion of its revolver by year-end 2022 as a result of its
front-loaded capital spending ambitions. As there is a high level
of uncertainty regarding Frontier's ability to deliver sustained
operational improvements through network investment, any shortfalls
in expectations for future free cash flow generation would limit
financial flexibility and likely impair the company's ability to
maintain its planned pace of network upgrades. Post-bankruptcy,
prepetition unsecured debt holders will have the bulk of economic
and voting control over Frontier's strategic decisions as its
modernization plan is implemented.
The stable outlook reflects Moody's expectations over the next
12-18 months for continuing high single-digit revenue and EBITDA
declines, slightly decreasing EBITDA margins, moderate but slightly
increasing debt/EBITDA (Moody's adjusted) and moderate free cash
flow generation initially. Good liquidity and the company's ability
to smooth out early peaks in planned discretionary capital spending
further supports the stable outlook.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS:
Given the company's current competitive positioning, network
upgrade execution risks and uncertainties regarding share growth
traction across its end markets, upward pressure is limited but
could develop should Frontier's free cash flow to debt (Moody's
adjusted) track towards mid-single-digit levels as a percentage of
Moody's adjusted debt on a sustainable basis. An upgrade would also
require steady market share capture gains across the company's
network footprint in both consumer and commercial end markets over
several years, consolidated revenue and EBITDA growth and
maintenance of a good liquidity profile.
Downward pressure on the rating could arise should the company's
liquidity deteriorate or should execution of its share capture and
growth strategy materially stall or weaken.
Under its first lien DIP-to-Exit credit facilities, comprised of
the $625 million first lien DIP-to-Exit revolving credit facility
(unrated) and $500 million first lien DIP-to-Exit term loan,
Frontier will be permitted to increase or add one or more
additional revolving or term loan credit facilities through an
incremental facility which permits debt up to the greater of $1.375
billion or 50% of latest 12 months EBITDA plus an additional pari
passu amount up to pro forma 1.35x first lien leverage ratio, and
are permitted to reclassify amounts under the ratio basket subject
to capacity. Collateral leakage is permitted, subject to available
basket capacity, through the transfer of assets to unrestricted
subsidiaries. There are no additional "blocker" provisions
precluding the transfer of assets. Restricted payments from the
cumulative credit are subject to a consolidated first lien leverage
ratio no greater than 1.35x at the point of conversion at
Bankruptcy Exit. There are no step-downs to the requirement that
net asset sale proceeds prepay the loans.
The above is proposed terms and the final terms of the first lien
DIP-to-Exit credit facilities agreement can be materially
different.
The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.
Frontier is an Incumbent Local Exchange Carrier (ILEC)
headquartered in Norwalk, CT and the fourth largest wireline
telecommunications company in the US. Frontier generated $7.7
billion of revenue in the last 12 months ended June 30, 2020, which
includes revenue from northwest operations sold in May 2020.
GARRETT MOTION: Entwistle Represents Gabelli Funds, S. Muoio
------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Entwistle & Cappucci LLP submitted a verified
statement that it is representing the following parties in the
Chapter 11 cases of Garrett Motion, Inc., et al.:
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580
- and -
S. Muoio & Co. LLC
509 Madison Avenue, Suite 406
New York, New York 10022
The claims and interest of the Parties-In-Interest against the
Debtors may include, but are not necessarily limited to, unsecured
claims and equity claims or interests. At this time, E&C cannot
specify the amounts or times of acquisition of these claims or
interest.
Each of the Parties-In-Interest has retained E&C to represent its
individual interest in connection with these chapter 11 cases.
Counsel for Gabelli Funds, LLC and S. Muoio & Co. LLC can be
reached at:
ENTWISTLE & CAPPUCCI LLP
Andrew J. Entwistle, Esq.
Frost Bank Tower
401 Congress Avenue, Suite 1170
Austin, TX 78701
Telephone: (512) 710-5960
Email: aentwistle@entwistle-law.com
- and -
Joshua K. Porter, Esq.
299 Park Avenue, 20th Floor
New York, NY 10171
Telephone: (212) 894-7282
Email: jporter@entwistle-law.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/36CHIPx
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.
GKS CORP: $19.2M Sale of All Assets to Triple M Approved
--------------------------------------------------------
Judge Elizabeth D. Katz of the U.S. Bankruptcy Court for the
District of Massachusetts authorized GKS Corp.'s sale of all assets
utilized in operating its business, to Triple M Investments for (i)
$19.2 million cash, plus (ii) new residency agreements with the
residents of the Community, plus (iii) the assumption of the
Assumed Contracts and the Assumed Obligations.
The Assets include without limitation (i) the real property and
improvements known as The American Inn for Retirement Living
located at One Sawmill Park, Southwick Massachusetts ("Community"),
(ii) personal property, including equipment, furniture and
inventory used to operate the Community, (iii) certain executory
contracts to be identified by the Purchaser, (iv) permits and
licenses authorizing the provision of certain services to Community
residents (to the extent transferable), and (v) other
miscellaneous, specified assets including the right to use the
Debtor's trade names and other intellectual property.
On Sept. 23, 2020, the Debtor conducted the Auction in accordance
with the Sale Procedures. The offer of Triple M was designated as
the highest or otherwise best offer to purchase the Assets. The
offer of Aspen Square Management was designated the second best
offer to acquire the Assets. The Back-Up Bid is on essentially the
same terms as the Winning Bid except that it provides for a $50,000
lower cash purchase price.
The Sale Hearing was held on Sept. 30, 2020.
The APA is approved, and the Debtor is authorized to consummate the
transactions contemplated by the APA. In accordance with the APA,
the sale of the Assets is "as is, where is" and otherwise in
accordance with the terms and conditions of the APA. All such
liens,
claims, and interests to attach to the proceeds of sale of the
Assets.
Subject to and conditioned on the Closing, the Debtor is authorized
to assume and assign the Assumed Contracts to the Winning Bidder.
Upon the Closing, the Debtor is authorized to pay or cause to be
paid from sale proceeds the following liabilities of the Debtor:
the C&W Fee, the Bank Claim, the real estate taxes owed by the
Debtor to the Town of Southwick, Massachusetts, and the secured
claim of Wells Fargo. In addition, the Debtor is authorized and
directed to pay or cause to be paid from sale proceeds the Break-Up
Fee and the Expense Reimbursement to VS Southwick at or incident to
the Closing (but not later than the next business day). VS
Southwick and its counsel are granted leave to withdraw their
appearances by the filing of a notice of withdrawal.
The remaining proceeds of sale after the Closing Payments and the
payment of the Break-Up Fee, the Expense Reimbursement, and any
reasonable transactional costs and expenses of the Closing
(including the payment of Prepetition Cure Amounts, but excluding
compensation to the Debtor's counsel), will be retained by the
Debtor pending further order of the Court. The Debtor will
promptly after the Closing file a notice with the Court detailing
the sale proceeds received, the Closing Payments made, any Break-Up
Fee and Expense Reimbursement paid, and the funds retained in its
bankruptcy estate.
The Order is a final order and is enforceable upon entry and to the
extent necessary under Rules 5003, 9014, 9021, and 9022 of the
Federal Rules of Bankruptcy Procedure. The Court expressly finds
that there is no just reason for delay in the implementation of the
Order and expressly directs entry of judgment as set forth herein
and the stays imposed by Fed. R. Bankr. P. 6004(h), 6006(d), and
7062 are modified and will not apply to the Order or to the
transactions contemplated by the APA.
The Debtor is authorized and directed to consummate the sale of the
Assets to the Winning Bidder as expeditiously as practicable in the
Debtor's business judgment, and, to that end, to take such acts
required or contemplated under, or reasonably necessary to effect
the purpose of, the APA including the execution and delivery of
such instruments, agreements, and documents as the Debtor deems
necessary or appropriate.
About GKS Corporation
GKS Corporation -- http://www.theamericaninn.net/-- owns and
operates a continuing care retirement community and assisted living
facility for the elderly. It is a 50-acre country village setting
in Southwick, Mass., with easy access to healthcare services,
transportation, shopping and recreation.
GKS Corporation sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Mass. Case No. 19-30998) on Dec. 26,
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.
Michael J. Goldberg, Esq., at Casner & Edwards, LLP, is the
Debtor's legal counsel. OnePoint Partners, LLC was approved to
provide Toby Shea as Chief Restructuring Officer for the Debtor.
GLOBAL ACQUISITIONS: Case Summary & 6 Unsecured Creditors
---------------------------------------------------------
Debtor: Global Acquisitions Holding Group, Inc.
5280 E. Beverly Blvd C276
Los Angeles, CA 90022
Business Description: Global Acquisitions Holding Group, Inc.
is a Single Asset Real Estate (as defined
in 11 U.S.C. Section 101(51)). The Company
is the owner of fee simple title to certain
property located at 15816 La Pena Avenue, La
Mirada, CA 90638, having an appraised value
of $700,000.
Chapter 11 Petition Date: September 30, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-18910
Judge: Hon. Sheri Bluebond
Debtor's Counsel: Onyinye N. Anyama, Esq.
ANYAMA LAW FIRM,
A PROFESSIONAL CORPORATION
18000 Studebaker Road
Suite 325
Cerritos, CA 90703
Tel: (562) 645-4500
Email: info@anyamalaw.com
Total Assets: $700,000
Total Liabilities: $1,220,295
The petition was signed by Zeferino Luna, Jr., president.
A copy of the petition containing, among other items, a list of the
Debtor's six unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/N6EY7KQ/Global_Acquisitions_Holding_Group__cacbke-20-18910__0001.0.pdf?mcid=tGE4TAMA
GRIFFON CORP: Fitch Affirms B+ LongTerm IDR, Then Withdraws Rating
------------------------------------------------------------------
Fitch Ratings has affirmed and withdrawn Griffon Corporation's
Long-Term Issuer Default Rating (IDR) at 'B+', senior secured
credit facility at 'BB+'/'RR1' and senior unsecured notes at
'B+'/'RR4'. The Rating Outlook is Stable.
The ratings were withdrawn for commercial reasons.
KEY RATING DRIVERS
Stable Outlook: The affirmation and Stable Outlook reflect healthy
sales growth and margin expansion as consumers invest in their
homes in the midst of the coronavirus-related economic downturn.
The ratings also consider the company's recent equity issuance,
with proceeds of more than $170 million to be used for general
corporate purposes and to repay borrowings under the revolver.
Operating Improvement: Griffon produced solid 6.8% sales growth in
the first nine months of fiscal 2020 ending June 2020, even as
sales within its segments have been uneven. In addition, the EBITDA
margin improved 130bps to 9.9% in the nine months. The company's
core consumer home and building products segments will be driven by
trends in the housing market while the defense electronics business
is expected to be relatively unaffected by the current downturn.
Lower Financial Leverage: Financial leverage is expected to improve
in fiscal 2020, with gross debt/EBITDA projected in the mid-4.0x
range at the end of fiscal 2020 from 5.3x at the end of fiscal
2019, due to EBITDA growth and debt repayment. Fitch anticipates
steady debt/EBITDA in the mid- to high-4.0x range, depending on the
pace of acquisitions, with management expected to focus on bolt-on
acquisitions that can be financed primarily with cash flow.
Below-Average Margins: Griffon generates below-average margins
relative to other diversified industrials and building products
companies, reflecting competitive conditions within its markets and
its significant exposure to the big box retail channel. Fitch
believes there is some additional upside to the company's margins
over the next few years from savings related to the integration of
recent acquisitions. Below average margins have resulted in limited
FCF after dividends in recent years. Fitch estimates that elevated
capex and growth in working capital will result in FCF of 1%-2% of
revenues over the next two years.
Consumer and Building Products Focus: The ratings reflect Griffon's
solid position within consumer and professional products (45% of
fiscal 2019 sales) and home and building products (40% of sales),
and niche position in advanced radar and communication systems (15%
of sales). The company benefits from the diversity associated with
selling into the residential and commercial construction and
defense markets, though its results are most closely tied to the
residential repair and remodeling market.
Strengths and Concerns: Rating strengths include end-market
diversity, strong positions in niche building products and defense
markets, and moderate long-term growth potential. Rating concerns
include limited pricing power, customer concentrations, limited
FCF, elevated leverage and potential challenges in integrating
recent acquisitions.
DERIVATION SUMMARY
With $2.2 billion in revenue, Griffon is smaller than other
diversified building products companies such as Fortune Brands Home
and Security (Long-Term IDR BBB/Negative), Masco Corporation
(BBB-/Positive) and USG Corporation (NR). However, Griffon has a
solid market presence in its end markets of tools, outdoor decor,
garage doors and defense electronics. The company's EBITDA margin
of 9.5% in fiscal 2019 was well below its larger industry peers,
reflecting competitive market conditions and its significant
customer concentrations with big box retailers. The company also
has higher financial leverage than these peers. No country ceiling,
parent/subsidiary or operating environment aspects affect the
rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
-- Sales are forecast to increase 3% annually;
-- EBITDA margins improve to 10% in fiscal 2020 and are flat
thereafter;
-- Capex as a percentage of revenues are assumed to range from 2%
to 3% annually
-- Proceeds from the August 2020 equity issuance is used to repay
the revolver and other short-term debt;
-- FCF tracks at 1%-2% of revenues and is directed to
acquisitions;
-- Debt/EBITDA improves to the mid-4.0x range in fiscal 2020 from
5.3x at the end of fiscal 2019.
Recovery Assumptions
The recovery analysis assumes that Griffon would be considered a
going-concern in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim.
Griffon's going-concern EBITDA estimate of $170 million reflects
Fitch's view of a sustainable, post-reorganization EBITDA level
upon which Fitch bases the valuation of the company. The
going-concern EBITDA reflects a potential weakening of the housing
market as well as the potential for the loss of a significant
customer, given that Griffon has large customer concentrations.
An EV multiple of 6x is used to calculate a post-reorganization
valuation and reflects a mid-cycle multiple. Transactions involving
building products companies include a 10.3 multiple on the 2015
buyout of Lafarge and an 8.0x multiple on the 2015 buyout of
Woodcraft Industries. In addition, Griffon is estimated to have
paid around 7.4x EBITDA for ClosetMaid and 10.0x EBITDA for
CornellCookson.
The secured revolving credit facility is assumed to be fully drawn
upon default. The credit facility and other secured loans are
senior to the senior unsecured notes in the waterfall. The analysis
results in 'RR1' for the secured revolver (fully drawn at $400
million), representing outstanding recovery prospects (91%-100%).
The waterfall also indicates an 'RR4' for the senior unsecured
notes, corresponding to average recovery prospects (31%-50%).
RATING SENSITIVITIES
Not applicable.
LIQUIDITY AND DEBT STRUCTURE
Liquidity: As of June 30, 2020, Griffon had total liquidity of $346
million, consisting of $72 million of cash and $274 million in
availability under its senior secured revolver, net of outstanding
borrowings and letters of credit. As of Jan. 30, 2020, Griffon
upsized its revolver to $400 million from $350 million and extended
its maturity to March 22, 2025.
Capital Structure: As of June 30, 2020, the company total debt was
$1.1 billion, and was composed of $1.0 billion of senior unsecured
notes maturing in March 2028, $104 million drawn under the
company's senior secured revolver, and $46 million of other secured
debt (foreign term loans and capital leases).
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
IBIO INC: Delays Filing of June 30 Annual Report
------------------------------------------------
iBio, Inc., was unable to file its Annual Report on Form 10-K for
its fiscal year ended June 30, 2020 by the prescribed date without
unreasonable effort or expense because the Company was unable to
compile and review certain information required in order to permit
the Company to file a timely and accurate report on the Company's
financial condition. The Company believes that the Annual Report
will be completed and filed within the fifteen day extension period
provided under Rule 12b-25 of the Securities Exchange Act of 1934,
as amended.
About iBio Inc.
iBio, Inc. -- http://www.ibioinc.com-- is a full-service
plant-based expression biologics CDMO equipped to deliver
pre-clinical development through regulatory approval, commercial
product launch and on-going commercial phase requirements. iBio's
FastPharming expression system, iBio's proprietary approach to
plant-made pharmaceutical (PMP) production, can produce a range of
recombinant products including monoclonal antibodies, antigens for
subunit vaccine design, lysosomal enzymes, virus-like particles
(VLP), blood factors and cytokines, scaffolds, maturogens and
materials for 3D bio-printing and bio-fabrication,
biopharmaceutical intermediates and others, as well as create and
produce proprietary derivatives of pre-existing products with
improved properties.
iBio reported a net loss attributable to the Company of $17.59
million for the year ended June 30, 2019, compared to a net loss
attributable to the Company of $16.10 million for the year ended
June 30, 2018. As of March 31, 2020, the Company had $42.22
million in total assets, $38.26 million in total liabilities, and
$3.96 million in total equity.
CohnReznick LLP, in Roseland, New Jersey, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated Aug. 26, 2019, citing that the Company has incurred net
losses and negative cash flows from operating activities for the
years ended June 30, 2019 and 2018 and has an accumulated deficit
as of June 30, 2019. These matters, among others, raise
substantial doubt about the Company's ability to continue as a
going concern.
INCLUSIVE HEALTHCARE: Seeks to Hire Finas Cowan as Accountant
-------------------------------------------------------------
Inclusive Healthcare Group, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire Finis
Cowan, Attorney at Law, CPA as its accountant.
The professional services which the accounting firm may be
requested to render are as follows:
a. provide auditing services including completion of the
examination of financial statements as of August 31, 2020 which
examination is currently in progress;
b. assist in the preparation of accounting statements as of
December 31, 2019 and August 31, 2020;
c. assist in the preparation of monthly accountings;
d. assist in the preparation of cash flow forecast for the
period commencing August 31, 2019;
e. assit in the preparation of a reorganization plan;
f. prepare tax returns; and
g. provide other accounting services for the Debtor.
The compensation and other terms of employment of the accounting
firm are based on regular billing rates for accounting services.
The firm represents no interest adverse to the Debtor or the estate
of the Debtor in the matters upon which the firm is to be engaged,
and the employment would be in the best interests of the estate.
The accounting firm can be reached through:
Finis E. Cowan, III, CPA
Finis Cowan, Attorney at Law, CPA
One Greenway Plaza, Suite 100
Houston, TX 77046
About Inclusive Healthcare Group, LLC
Inclusive Healthcare Group, LLC, a Conroe, Texas-based health care
provider, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Tex. Case No. 20-34199) on August 19, 2020.
At the time of the filing, Debtor had estimated assets of less than
$50,000 and liabilities of between $100,001 and $500,000.
The Wiley Law Group, PLLC is Debtor's legal counsel.
INCLUSIVE HEALTHCARE: Seeks to Hire Wiley Law as Legal Counsel
--------------------------------------------------------------
Inclusive Healthcare Group, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire Kevin
S. Wiley, Sr. of the Wiley Law Group, PLLC as its legal counsel.
The professional services the counsel will render are:
a. counsel and prepare negotiations for final resolution the
disputed derivative claims of the Debtor;
b. advise the Debtor with respect to its powers and duties in
the Subchapter V of Chapter 11 case;
c. appear before the court to protect Debtor's interests;
d. attend meetings as requested by the Debtor;
e. perform all other legal services for the Debtor; and
f. performing such other functions as requested by the
Debtor.
Wiley Law has received pre-petition compensation from the Debtor in
the amount of $5,000 for services rendered prior to the filing of
the case and $1,717.00 as reimbursement of the filing fee for the
Subchapter V of Chapter 11.
The Debtor agreed to pay the firm a flat fee $10,000 for total fee
compensation, with the other $5,000 subject to application and
approval by the court.
Kevin S. Wiley, Sr., Esq., a managing member at Wiley Law,
disclosed in court filings that the firm is a "disinterested
person" as defined in Section 101 of the Bankruptcy Code.
Wiley Law can be reached through:
Kevin S. Wiley, Sr.
WILEY LAW GROUP, PLLC
325 North St. Paul Street, Suite 2750
Dallas, TX 75201
Telephone: (469) 484-5016
Facsimile: (469) 484-500
E-mail: kevin.wileysr@tx.r.com
About Inclusive Healthcare Group, LLC
Inclusive Healthcare Group, LLC, a Conroe, Texas-based health care
provider, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Tex. Case No. 20-34199) on August 19, 2020.
At the time of the filing, Debtor had estimated assets of less than
$50,000 and liabilities of between $100,001 and $500,000.
The Wiley Law Group, PLLC is Debtor's legal counsel.
INDUSTRIAL CRANE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Industrial Crane Service, Inc.
2301 Petit Bois St.
Pascagoula, MS 39581
Business Description: Industrial Crane Service, Inc. --
https://industrialcraneservices.com --
was originally focused on the retrofit,
relocation, repair, erection and dismantling
of Container Handling Cranes such as Ship-
To-Shore (STS) cranes and Rubber-Tire-Gantry
(RTG) cranes. Since its founding in 2003,
the Company's expertise and capabilities
have expanded into overhead bridge cranes,
Goliath shipyard cranes, bulk-handling
cranes and container handling cranes with a
heavy lift and transport division.
Chapter 11 Petition Date: October 1, 2020
Court: United States Bankruptcy Court
Southern District of Mississippi
Case No.: 20-51464
Judge: Hon. Katharine M. Samson
Debtor's Counsel: Patrick Sheehan, Esq.
SHEEHAN AND RAMSEY, PLLC
429 Porter Ave
Ocean Springs, MS 39564
Tel: 228-875-0572
Email: Mike@sheehanlawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Paul Chase Pritchard, vice president.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at:
https://www.pacermonitor.com/view/6PKX5YY/Industrial_Crane_Service_Inc__mssbke-20-51464__0004.0.pdf?mcid=tGE4TAMA
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/Z3EZIYI/Industrial_Crane_Service_Inc__mssbke-20-51464__0001.0.pdf?mcid=tGE4TAMA
INFOBLOX INC: Fitch Lowers LongTerm IDR to B-, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has downgraded Infoblox Inc.'s Long-Term Issuer
Default Rating to 'B-' from 'B' on the company's recapitalization
in connection with Vista Equity Partners' ownership stake sale to
Warburg Pincus. Fitch has assigned 'B-'/'RR4' ratings to the
1st-lien senior secured term loan and revolving credit facility
(RCF), as well as a 'CCC'/'RR6' rating to the 2nd-lien senior
secured term loan. The Rating Outlook is Stable. Fitch's actions
affect $1.9 billion of proposed debt, including the undrawn $200
million RCF.
The ratings and Outlook reflect considerably weaker leverage
metrics, given a more than doubling of debt levels despite the
company's otherwise solid operating momentum. Infoblox's strong
bookings growth, driven by higher average customer spending, and
the mission critical nature of the company's DDI software
automation tools and the current product refresh cycle should
continue to drive mid- to high-single digit revenue growth through
the forecast. Concurrently, Infoblox will increase its mix of
recurring maintenance revenue from the company's ongoing transition
to a subscription based-model. Stronger profitability from higher
pricing, higher customer spending and operating leverage should
support operating EBITDA margins in the high 20% range, versus
prior expectations in the low 20% range.
Vista announced that it is selling a stake in Infoblox to Warburg
Pincus in a transaction valued at $3.4 billion (14.8x fiscal 2020
cash EBITDA). Vista is fully exiting its existing position and
re-investing with Warburg to each acquire a 50% stake. Together,
Vista and Warburg will contribute $1.7 billion of new equity, and
the remainder of the purchase price will be funded by new $1.3
billion seven-year 1st-lien and $455 million eight-year 2nd-lien
senior secured term loan B credit facilities. The facilities will
include a $200 million 1st-lien five-year RCF. The transaction is
expected to close in calendar 2020. The credit facilities will be
guaranteed by all current and future direct and indirect domestic
subsidiaries on a senior secured basis and secured by substantially
all the assets of the borrowers and guarantors.
KEY RATING DRIVERS
Coronavirus Impact: The impact of the coronavirus pandemic on
Infoblox has been modest to date, due to the mission critical
nature of DDI, a focus on network spending to support
work-from-home (WFH)-enabling infrastructure and digital
transformation and an early stage product refresh cycle. Large
enterprises, which represent Infoblox's core customer base, have
also been better positioned to invest through the pandemic than
their smaller peers. From the supply side, modest supply chain
constraints drove elevated backlog earlier in the year, which
should support revenue growth through the current quarter.
Market Leadership: Fitch expects Infoblox's market leadership in
DDI, which includes domain name services (DNS), dynamic host
configuration protocol (DHCP) and internet protocol address
management (IPAM), to support improved operating performance
through the rating horizon. Infoblox has roughly 50% share in
worldwide DDI software and appliance markets (excluding DNS
security) and higher for large enterprises, to which the company is
highly indexed, large installed base that drives product refreshes,
expansion opportunities and recurring revenue. Competition includes
small niche providers without comprehensive solutions or public
cloud service providers focused on larger addressable markets.
Strengthening FCF: Fitch expects top line growth, expanded profit
margins and higher recurring revenue from the company's
subscription model, will drive stronger and more consistent FCF.
The current product refresh cycle should accelerate in the current
quarter and be sustained through calendar 2021, driving higher cash
flow, after which point Infoblox's focus will shift to new logos
and expansions and adoption of its SaaS security business through
the down-cycle. Fitch expects $50 million to $100 million annually
through the forecast period, providing capacity for tuck-in
acquisitions or debt reduction.
High Leverage Metrics: Fitch expects EBITDA-based leverage metrics
will improve but remain high through the forecast period absent the
use of growing profitability and FCF for voluntary debt reduction.
Fitch estimates total debt to operating EBITDA will be more than
11x on a pro forma basis and still near 10x through the forecast
period and FFO Interest coverage below 2.0x. At the same time, FCF
to total debt should increase and approach 5% through the
intermediate-term, which is in line with higher ratings.
Reduced Revenue Cyclicality: Fitch expects a higher mix of
subscription revenue reduces revenue cyclicality historically
associated with product refresh cycles. Infoblox's product cycles
typically last four years, and the company should benefit from a
product refresh through calendar 2021, after which the company will
require solid execution on expansion and new logos, as well as SaaS
security solutions adoption, to offset negative product refresh
revenue. Infoblox's strategic pivot from hardware and perpetual
software licenses to SaaS provider should partially offset product
refresh cycles with recurring revenue, which was more than 80% for
fiscal 2020.
Threat of Larger Entrants: Fitch continues to believe Infoblox
faces risks as larger players enter the growing and fragmented DDI
market via acquisition and affect industry pricing and
profitability by bundling DNS services with a broad set of service
offerings and leveraging a global sales footprint. Infoblox's
competitors include Microsoft's in-house open-source software-based
solution attached to its Windows server, and AWS' Route 53,
addressing the commodity external authoritative market.
Nonetheless, Fitch believes the small size of the DDI market and
Infoblox's installed base leadership reduces the threat of new
entrants.
Recovery Analysis: Fitch believes Infoblox would be reorganized
rather than liquidated in bankruptcy. In calculating the recovery
waterfall, Fitch assumes a going concern EBITDA of $100 million,
which incorporates Fitch's belief that distress would most likely
be the result of share losses from the deterioration of product
competitiveness. Fitch assumes a reorganization multiple of 7.0x,
which is in line with similar leveraged software peers at Fitch.
After adjusting for administrative claims, Fitch estimates recovery
of 42% for the 1st-lien term loan, or an 'RR4', and 0%, or an RR6,
for the 2nd-lien term loan.
DERIVATION SUMMARY
Fitch believes Infoblox is positioned in line with similarly rated
peers, due to Infoblox's solid operating profile but high leverage
metrics. Renewal rates are comparable and consistent for
as-a-service (aaS) companies, and Infoblox's market share is solid
at over 50%, even higher with large enterprise customers, despite
the relatively small size of its markets. Fitch expects improving
and more consistent annual FCF through the rating horizon, driven
by solid net bookings and growth, including cash from higher
deferred revenue. However, total debt to operating EBITDA will be
more in line with the 'CCC'-rating category, while FCF to total
debt should approach mid-single digits, which is in line with a
higher rating.
KEY ASSUMPTIONS
-- High single digit sequential revenue growth in fiscal 2021
driving by increasing customer spending, the company's transition
to subscription and refresh cycle.
-- This will be followed by mid-single digit growth through the
remainder of the forecast period with increasing security attach
offsetting the maturation of the refresh cycle.
-- Organic operating EBITDA in the high-20% through the forecast
period, driven by faster than previously anticipated top line
growth and operating leverage but partially offset over the longer
term by middle-market penetration.
-- Capex of roughly 1% of revenue.
-- Transaction closes as contemplated in the first half of fiscal
2021.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Pre-dividend FCF to total debt in the mid- to high-single digits
from sustained operating EBITDA margins near 30% and use of excess
FCF for debt reduction.
-- Continued mid-single-digit revenue growth, signifying share
gains within a growing market and validating Infoblox's GTM
strategy and services platform.
-- End market or product diversification from expansion or
acquisitions into adjacent markets representing at least 25% of
consolidated revenue.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Below market revenue growth from deterioration of product
competitiveness and lower than previously expected product
stickiness.
-- Expectation for negative pre-dividend FCF to total debt or FFO
Interest Coverage below 1.5x from operating EBITDA margin
compression to mid- to high-teens.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Pro forma for the transaction, Infoblox's
liquidity remains adequate and supported by $35 million of cash and
cash equivalents, and an undrawn $200 million 1st-lien senior
secured RCF expiring 2025. Fitch's expectation for annual FCF of
$50 million to $100 million through the forecast also supports
liquidity, which is more than sufficient to cover modest mandatory
amortization payments associated with the 1st-lien term loan.
ESG Commentary
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This indicates ESG issues
are credit neutral or have only a minimal credit impact on the
entity, either due to their nature or the way in which they are
being managed by the entity.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
INFRASTRUCTURE SOLUTION: Komatsu Objects to Joint Disclosure & Plan
-------------------------------------------------------------------
Komatsu Financial Limited Partnership objects to the Joint
Disclosure Statement in support of Plans of Reorganization of
debtors Infrastructure Solution Services, Inc. and ISS Management,
LLC.
Komatsu filed an objection to the Disclosure Statement to correct
certain inaccuracies contained therein and to require ISS to
provide more specificity with respect to potential sales of
Komatsu's collateral.
Komatsu claims that the Debtors have inaccurately described
Komatsu’s Contracts and Collateral. Komatsu only has a
contractual relationship with ISS. Komatsu did not finance any
equipment relating to ISS Management.
Komatsu points out that the Disclosure Statement has not properly
identified Komatsu's Collateral. For the sake of clarity, the
Disclosure Statement should be amended to describe Komatsu's
Collateral.
Komatsu asserts that while Debtors' Disclosure Statement and
Proposed Plan indicate an intent to sell all of their respective
assets by a private sale and/or auction, they fail to state with
any specificity when such sales would occur.
Komatsu objects to the Disclosure Statement on the basis that it
fails to contain adequate information that would allow Komatsu to
make an informed judgment about the Proposed Plan, as required by
1125(b) of the Bankruptcy Code.
A full-text copy of Komatsu's objection dated August 14, 2020, is
available at https://tinyurl.com/yy2fa9gr from PacerMonitor at no
charge.
Komatsu is represented by:
BANKS & BANKS
David Banks, Esq.
3038 Church Road
Lafayette Hill, PA 19444
Telephone: (610) 940-3900
Facsimile: (610) 940-0843
E-mail: bbwlaw@yahoo.com
About Infrastructure Solution Services
Infrastructure Solution Services Inc. is a provider of green
stormwater infrastructure solutions in the Philadelphia market.
Based in Jonestown, Pa., Infrastructure Solution Services filed a
Chapter 11 petition (Bankr. M.D. Pa. Case No. 19-03915) on Sept.
13, 2019. In the petition signed by Corey Wolff, director, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities.
Subsidiary Happy Endings Holdings, LLC, also filed for Chapter 11
(Bankr. M.D. Pa. 19-03916) on Sept. 13, listing under $1 million in
assets and $1 million to $10 million in liabilities.
Another subsidiary, ISS Management, LLC, a privately held company
whose principal assets are located at 156 S Bethlehem Pike Ambler,
PA 19002, filed for Chapter 11 bankruptcy protection (Bankr. M.D.
Pa. Case No. 19-04825) on Nov. 12. In its petition, ISS was
estimated to have $1 million to $10 million in both assets and
liabilities.
All three cases are jointly administered under Infrastructure
Solution Services' case. The Hon. Henry W. Van Eck oversees the
cases. The petitions were signed by Corey Wolff, director of
Infrastructure Solution Services.
Robert E. Chernicoff, Esq., at Cunningham Chernicoff & Warshawsky,
P.C., serves as the Debtors' bankruptcy counsel.
JAGUAR HEALTH: Issues 4.8M Common Shares From Aug. 13 to Sept. 25
-----------------------------------------------------------------
Jaguar Health, Inc., entered into a privately negotiated exchange
agreement with a holder of one of its outstanding secured
promissory notes, which resulted in the aggregate issuance by the
Company of more than 5% of the Company's issued and outstanding
shares of common stock, as last reported in the Company's Quarterly
Report on Form 10-Q filed on Aug. 13, 2020.
From Aug. 13, 2020 through Sept. 25, 2020, the Company issued
4,761,904 shares of Common Stock in the following transactions:
* On Sept. 23, 2020, pursuant to an exchange agreement dated
Sept. 23, 2020, the Company issued 1,428,571 shares of
Common Stock to a noteholder in exchange for a $500,000
reduction in the outstanding balance of the secured
promissory note held by such noteholder.
* On Sept. 25, 2020, pursuant to an exchange agreement dated
Sept. 25, 2020, the Company issued 3,333,333 shares of
Common Stock to a noteholder in exchange for a $1,000,000
reduction in the outstanding balance of the secured
promissory note held by such noteholder.
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health/-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar reported a net loss of $38.54 million for the year ended
Dec. 31, 2019, compared to a net loss of $32.15 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$37.58 million in total assets, $25.16 million in total
liabilities, $10.88 million in Series A redeemable convertible
preferred stock, and $1.54 million in total stockholders' equity.
Mayer Hoffman McCann P.C., in San Francisco, California, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated April 2, 2020 citing that the
Company has experienced losses since inception, significant cash
used in operations, and is dependent on future financing to meet
its obligations and fund its planned operations. These conditions
raise substantial doubt about its ability to continue as a going
concern.
JAI BANGALAMUKHI: Seeks to Hire Galloway Wettermark as Counsel
--------------------------------------------------------------
Jai Bangalamukhi Mai, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Alabama to employ Galloway,
Wettermark & Rutens, LLP as its legal counsel.
The professional services to be rendered by the attorneys are:
(a) advise the Debtor with respect to its powers and duties;
(b) protect the interest of the Debtor in connection with
lawsuits filed;
(c) prepare legal papers;
(d) perform all other legal services.
Robert Galloway, Esq. and J. Willis Garrett, III, Esq., the firm's
attorneys who will be handling the case, will be paid an hourly
rate at $295 and $225, respectively.
The attorneys represent no interest adverse to the Debtor as
debtor-in-possession or the estate, according to court filing.
Galloway Wettermark can be reached through:
Robert M. Galloway, Esq.
J. Willis Garrett, Esq.
GALLOWAY, WETTERMARK & RUTENS, LLP
3263 Cottage Hill Road
Post Office Box 16629
Mobile, AL 36616-0629
Telephone: (251) 476-4493
About Jai Bangalamukhi Mai, LLC
Jai Bangalamukhi Mai, LLC, a Mobile, Ala.-based limited liability
company, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. S.D. Ala. Case No. 20-12201) on September 14, 2020.
At the time of the filing, Debtor had estimated assets of between
$50,001 and $100,000 and liabilities of the same range.
Galloway, Wettermark & Rutens, LLP is Debtor's legal counsel.
JMR100 LLC: Seeks to Hire Joyce W. Lindauer as Legal Counsel
------------------------------------------------------------
JMR100, LLC seeks approval from the U.S. Bankruptcy Court for the
Northern District of Texas to employ Joyce W. Lindauer Attorney,
PLLC as its legal counsel.
The firm will assist the Debtor to effectuate a reorganization,
propose a plan of reorganization and effectively move forward in
its bankruptcy proceedings.
The hourly billing rates of the firm's attorneys and
paraprofessionals are as follows:
Joyce W. Lindauer $395
Kerry S. Alleyne $250
Guy H. Holman $205
Dian Gwinnup $125
Paralegals and Legal Assistants $65 to $125
The firm has been paid a retainer of $11,717, which included the
filing fee of $1,717 in connection with this proceeding.
Joyce W. Lindauer, the owner of the law practice Joyce W. Lindauer
Attorney, PLLC, and contract attorneys, Kerry S. Alleyne and Guy H.
Holman, disclosed in court filings that the firm is a
"disinterested person" as defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Joyce W. Lindauer, Esq.
Kerry S. Alleyne, Esq.
Guy H. Holman, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
E-mail: joyce@joycelindauer.com
About JMR100, LLC
Based in Aledo, Texas, JMR100, LLC classifies its business as
Single Asset Real Estate (as defined in 11 U.S.C. Section
101(51B)).
JMR100, LLC sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Tex. Case No. 20-42790) on September 1, 2020. The
petition was signed by Tim Barton, president.
At the time of the filing, Debtor had estimated assets of between
$1 million and $10 million and liabilities of the same range.
Judge Edward L. Morris oversees the case.
Joyce W. Lindauer Attorney, PLLC is Debtor's legal counsel.
JOHN VARVATOS: Seeks 4-Month Plan Exclusivity Extension
-------------------------------------------------------
John Varvatos Enterprises, Inc. and its affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to extend for
approximately four months the periods within which the Debtors have
the exclusive right to file a plan of reorganization from September
3, 2020, to January 4, 2021, and solicit acceptances to the Plan
from November 2, 2020, to March 2, 2021.
Since before the bankruptcy cases were filed, the Debtors have
aggressively pursued a sale of substantially all of their assets.
This involved an extensive prepetition and post-petition marketing
process that culminated in the sale of the Debtors' assets to
Lion/Hendrix Cayman Limited under section 363 of the Bankruptcy
Code on July 24, 2020. The Sale was the result of a long and
sometimes contentious process that required the Debtors' and their
professionals' extensive diligence and attention. The sale closed
on August 12, 2020. The period for LHCL to designate unexpired
leases and executory contracts ended September 11.
The Debtors further disclose that:
(i) with the assistance of their professionals, significant
progress has been made in moving the case to successful completion,
including spending considerable time addressing numerous issues
involving customers, creditors, and other parties in interest.
Additionally, the Debtors are continuing to evaluate unexpired
leases and executory contracts that may be assumed and assigned to
Lion/Hendrix Cayman Limited in connection with the Sale.
(ii) the Debtors' case is now pivoting from focusing on the
successful sale of substantially all of their assets to attending
to the administration of claims.
(iii) the creditors will not be harmed by extending exclusivity
at this time. The Debtors intend to use the extended Exclusive
Periods to, among other things, set a bar date, analyze the claims
against the estates, and negotiate with the Committee, Lion/Hendrix
Cayman Limited, and other parties in interest the successful
resolution of these chapter 11 cases.
About John Varvatos Enterprises
John Varvatos Enterprises, Inc. is an American international luxury
men's lifestyle brand founded by fashion designer John Varvatos in
1999. It operates retail stores in the United States and other
countries worldwide. It sells, manufactures, and designs fashion
products for men such as sweaters, knits, tees, tailored clothing,
jeans, pants, jackets, and accessories.
John Varvatos Enterprises generates revenue through the sale of
merchandise through the department store and specialty wholesale
distribution, a transactional globally accessible website, and its
27 brick and mortar retail locations.
John Varvatos Enterprises, Inc. and its affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 20-11043) on May 6,
2020.
John Varvatos Enterprises was estimated to have $10 million to $50
million in assets and $100 million to $500 million in liabilities
as of the bankruptcy filing.
The Honorable Mary F. Walrath is the case judge. The Debtors tapped
Morris, Nichols, Arsht & Tunnell LLP as counsel; Clear Thinking
Group as financial advisor; MMG Advisors, Inc. as investment
banker; and Omni Agent Solutions as claims agent.
On May 18, 2020, the Office of the United States Trustee appointed
an Official Committee of unsecured creditors.
LA SALLE UNIVERSITY: Fitch Lowers Issuer Default Rating to BB+
--------------------------------------------------------------
Fitch Ratings has downgraded La Salle University's Issuer Default
Rating (IDR) to 'BB+' from 'BBB-' and has downgraded the ratings on
the following bonds issued on behalf of La Salle University (La
Salle):
-- $40,050,000 Philadelphia Industrial Development Authority, La
Salle University Revenue Bonds series 2017 to 'BB+' from 'BBB-';
-- $84,300,000 million Pennsylvania Higher Educational Facilities
Authority, La Salle University Revenue Bonds series 2012 to 'BB+'
from 'BBB-'.
The Rating Outlook has been revised to Stable from Negative.
SECURITY
Revenue bonds are an unsecured, general obligation of the
university.
ANALYTICAL CONCLUSION
The downgrade of the IDR and bond ratings to 'BB+' reflect
continued pressure on La Salle's enrollment, which has been further
exacerbated by the coronavirus pandemic, competitive operating
landscape, and reliance on an unsustainable level of endowment
support in the intermediate term, as strategic efforts to reinforce
student demand and outcomes are implemented. The Outlook revision
to Stable from Negative reflects the limited financial flexibility
afforded by La Salle's $80 million endowment and $75 million in
available funds, which provide some necessary cushion as the
university navigates through near-term pandemic challenges and
executes on key strategic initiatives around enrollment, student
outcomes, and program refinement.
Coronavirus Impacts
The ongoing coronavirus pandemic and related government-led
containment measures create an uncertain environment for the U.S.
public finance higher education sector. Fitch's forward-looking
analysis is informed by management's expectations coupled with
Fitch's common set of baseline and downside macroeconomic
scenarios. Fitch's scenarios will evolve as needed during this
dynamic period. Fitch's current baseline scenario includes a sharp
economic contraction in 2Q20, with an initial bounce in 3Q20
followed by a slower recovery trajectory from 4Q20. For the higher
education sector, the baseline case assumes the closure of most
residential campuses for a three- to four-month period with
continued sporadic closures possible thereafter. Rating
sensitivities address potential rating implications under a
downside scenario, which assumes slower economic recovery and
prolonged or recurring disruptions related to the coronavirus into
fiscal 2021, including enrollment and related revenue pressures for
higher education.
La Salle shifted to remote learning in March 2020 and received just
under $4.3 million in Coronavirus Aid, Relief and Economic Security
(CARES) Act proceeds, of which half was available to help offset
institutional impacts including housing and dining refunds. Fall
2020 is currently underway in a fully remote model.
Revenue Defensibility: 'bbb'
Competitive Pressures on Enrollment, Elevated Endowment Support
La Salle's 'bbb' revenue defensibility is supported by moderate
demand indicators which reflect its regional draw and somewhat
self-selective student population. With a major tuition reset in
2017, Fitch believes La Salle retains some pricing power with a
relatively lower cost of attendance than area peers. However, the
assessment is particularly vulnerable in the context of steady
declines in enrollment and total revenue, and the need for elevated
endowment support in recent years. With its relatively tuition
dependent revenue base, La Salle has elected to utilize a
supplemental endowment draw to offset student revenue pressures at
levels which are not sustainable.
Operating Risk: 'bbb'
Somewhat variable - though sufficient - cash flow.
Inclusive of its supplemental endowment draw, La Salle has
generated operating cash flow margins around 11% which are
consistent with a higher assessment. However, recognition of a
relatively high average age of plant indicative of some future
capital needs, as well as an expectation of a return to standard
endowment support, are better reflected in the 'bbb' assessment.
Financial Profile: 'bb'
Sufficient available funds provide margin of flexibility
The 'bb' financial profile assessment reflects the pressure on La
Salle's operating and leverage profile through an expected period
of continued enrollment and revenue pressure. Absent expected
improvements in enrollment and operating performance, La Salle
remains susceptible to further deterioration in available funds
over the intermediate term.
ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS
Fitch's assessment includes no asymmetric additional risk
considerations.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Recovery in enrollment and solid retention beyond fall 2020,
leading to steady to improving net tuition revenue via sustainable
discount levels.
-- Maintenance of sound operating cash flow levels in the context
of a stable to growing revenue base and reduced reliance on
endowment support to sustainable levels nearer a 5% spend rate.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Continued enrollment pressure in fall 2021, particularly which
pressures net tuition and student fee revenue;
-- Erosion in operating performance which persists beyond fiscal
2021, particularly at levels requiring ongoing extraordinary and
unsustainable endowment support;
-- Unfavorable shift in leverage (as measured by AF/adjusted
debt) either from additional debt or erosion in liquidity, to
levels persisting below 45%-50%.
CREDIT PROFILE
La Salle University, founded in 1863 by the Institute of the
Brothers of the Christian Schools, is located on 133-acre campus 10
miles north of Center City Philadelphia. In addition to its main
campus, the university has a campus in Plymouth Meeting, PA
(Montgomery County), which opened in 2008. La Salle is comprised of
three schools: Arts and Sciences, Business, and Nursing and Health
Sciences. La Salle is accredited by the Middle States Commission on
Higher Education. Total headcount enrollment in fall 2019 was
4,933.
REVENUE DEFENSIBILITY
La Salle's 'bbb' revenue defensibility is supported by primarily
moderate demand indicators and is constrained by unfavorable
enrollment trends which have underperformed following the schools'
fall 2017 tuition reset. An elevated endowment draw has been
utilized over the prior three years to support operations, as
expenses are contained and strategy and leadership in La Salle's
student recruitment and retention areas are adjusted. Enrollment is
expected to decline again in fall 2020 following the university's
pivot to remote learning in August, though Fitch notes that steady
student quality, stable application levels, and improved retention
in fall 2020 support an expectation that demand may recover over a
longer period beyond the current pandemic environment. Several key
initiatives around student recruitment, retention, persistence, and
post-graduate success may support incremental enrollment growth in
La Salle's otherwise competitive northeast market.
La Salle's student base is predominately undergraduate, and its
persistently low acceptance and matriculation levels (near 75% and
15%, respectively, for incoming freshman) are indicative of the
competitive landscape in Philadelphia and the wider northeast
region. La Salle is refocusing its strategy and leadership and
enrollment and retention management efforts; of which the latter
has showed early promise in fall 2020 following a weaker than
expected yield in fall 2019. In addition, La Salle continues to
focus on strategic program delivery, which has included adding
targeted programs and scaling back on certain graduate programs
over the past several years. New leadership in key student-facing
roles will be integral as La Salle executes on its strategy.
La Salle's market is relatively competitive with several
institutions included in its peer group, with its student base
predominately sourced from Pennsylvania (approximately 80% of
undergraduates) and with a relatively well-dispersed out of state
mix. While the high school graduate population is expected to
remain generally steady in Pennsylvania through 2026, beyond that,
declines are expected, which may act as an additional constraint on
La Salle's pricing power and enrollment trajectory.
With a revenue base that is relatively concentrated in
student-generated fees (approximately 80% of unrestricted operating
revenues adjusted for the endowment draw), La Salle will be
susceptible to demand pressures over the longer term.
Fitch calculates La Salle's effective full endowment spend as
averaging over 8% in each of the past three years, above its 5%
allowable payout policy and including a board-approved supplemental
component elevating it above what is generally accepted as a
sustainable level. Leadership is committed to reducing La Salle's
reliance on the supplemental support, and Fitch notes that the
endowment has thus far remained largely resilient over the past
four years.
OPERATING RISK
La Salle's operating performance was steady in fiscal 2020,
although weaker than expected following a thinner 2019 that
included about $2 million in nonrecurring expenses. While cash flow
(11% margin in 2020) alone would indicate a stronger assessment,
the 'bbb' operating risk assessment reflects that La Salle's cash
flow is benefiting from elevated endowment support, and its level
of constrained capital spending planned over the near term against
its relatively high average age of plant that is indicative of
increasing capital needs over the longer term.
La Salle has a solid track record of managing its expense base in
line with its revenues over time, particularly through its tuition
reset in fall 2017 (fiscal 2018). Fiscal 2020 revenues were lighter
than anticipated due in part to the impacts from the pandemic,
though interest expense will decline once a $6.7 million variable
rate loan fully matures in fiscal 2021. The pandemic is expected to
significantly impact fiscal 2021 results, which management reports
will be offset via sizeable expense reductions (including a
reduction in force) and other margin preservation efforts.
With a relatively elevated average age of plant approaching 20
years, Fitch expects La Salle will have some pent-up capital needs
over the longer term. However, recent student housing and other
student-oriented projects position it sufficiently well to allow
for more moderate outlays near $5 million annually over the near
term that could feasibly flex downward as necessary. Some external
support is expected, including state grant and donor funds that La
Salle has solid track record of garnering.
La Salle has a solid history of consistent fundraising; gift
revenue has been very steady over the prior four years, equal to
about 3% of adjusted operating revenue.
FINANCIAL PROFILE
In fiscal 2020, La Salle maintained approximately $75 million in
available funds, equal to approximately 55% of $137 million in long
term debt and capitalized operating leases that Fitch considers
debt equivalents. Available fund levels have remained stable since
2016 despite the elevated support being provided by the endowment.
The 'bb' financial profile assessment reflects La Salle's limited
level of resilience through Fitch's forward-looking scenario
analysis, coupled with an expectation that some mild debt
moderation and steadied recurring operations will be necessary to
preserve AF going forward.
La Salle's debt profile is predominately fixed rate, with $131
million in fixed rate revenue bonds and another $6.7 million in
variable rate loans payable in fiscal 2019. Debt service
requirements on the fixed rate bonds are level near $9 million, and
La Salle has effectively prepaid its variable rate loan that
matures in fiscal 2022 with funds invested and held aside for its
retirement. Annual debt service coverage was sufficient at 1x as
Fitch calculated in fiscal 2020, and should remain steady or better
given reduced annual requirements going forward. No additional debt
is expected.
ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS
No asymmetric factors were incorporated in the rating.
In addition to the sources of information identified in Fitch's
applicable criteria specified, this action was informed by
information from Lumesis.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of '3'. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
LAKELAND HOLDINGS: S&P Raises ICR to 'CCC+', Outlook Negative
-------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Student
travel provider Lakeland Holdings LLC (WorldStrides) to 'CCC+' from
'D' following its emergence from bankruptcy.
S&P said, "At the same time, we are assigning our 'B' issue-level
rating and '1' recovery rating to the company's $110 million (paid
down to $85 million) priority exit facility, our 'B-' issue-level
rating and '2' recovery rating to its $150 million second-out term
loan take back facility, and our 'CCC-' issue-level rating and '6'
recovery rating to its $200 million third-out term loan take back
facility.
"The negative outlook reflects our expectation that WorldStrides'
very high leverage over at least the next few fiscal years may be
unsustainable. In addition, it incorporates our forecast that the
company will likely continue to experience significant revenue
disruption until there is a widely distributed medical solution for
COVID-19.
"The 'CCC+' issuer credit rating reflects our expectation that the
company's new capital structure may be unsustainable, though we
believe it likely has sufficient liquidity for at least the next
year under our current travel recovery assumptions. WorldStrides
has emerged from bankruptcy with $638 million of funded debt. We
view this debt load as potentially unsustainable given that it
equates to a leverage metric of greater than 7x even when using the
company's pro forma 2019 EBITDA. In addition, we do not expect its
EBITDA to recover to 2019 levels for a number of years.
Specifically, we forecast that the company will continue to burn
cash, partly due to its negative EBITDA, until its student travel
business begins to recover, which we do not expect to occur until
near the middle of calendar year 2021 at the earliest.
Additionally, the proposed exit financing facilities carry the
option to pay a substantial portion of their interest in kind,
which we expect the company will use to preserve its liquidity
until it has sufficiently ramped up its operations to cover its
debt service and other fixed charges." While the debt service is
partially pay-in-kind (PIK), the company's funded debt will
increase in the interim because of the accrued interest expense and
we anticipate that its cash flows may be insufficient to support
this over the longer term.
WorldStrides should have adequate liquidity if student travel
resumes by mid-2021. As of Aug. 28, 2020, the company had about
$209 million of cash. WorldStrides has taken a number of liquidity
preserving actions, which--thus far--have included employee
terminations, furloughs, reduced marketing and information
technology (IT) spending, and rent deferrals. S&P said, "We expect
the company to continue burning cash, at least through calendar
2020 and potentially into fall 2021, mostly to fund its operations,
pay its cash debt service, and return deposits. We believe
WorldStrides has already refunded the vast majority of its customer
deposits for previously cancelled tours and anticipate that its net
deposits may turn positive by the end of calendar year 2020 based
on its spring 2021 bookings. While the company should have
sufficient liquidity to withstand some delays in the recovery of
student travel, we believe its liquidity could become strained over
the next 12 months if the resumption of its tours is pushed well
beyond mid-2021 or future cancellations lead to further refunds."
The ongoing pandemic has severely strained WorldStrides' business
and the market for student travel is limited. S&P said, "We do not
expect that student travel will recover until there is a widely
distributed medical solution for COVID-19, which we assume will
occur in mid-2021 although the timing is highly uncertain. Prior to
the availability of a widely distributed medical solution,
WorldStrides will likely face elevated risks that include parental
apprehensions around student travel, unpredictable spikes in
COVID-19 case counts, the enforcement of enhanced cleanliness
standards and social distancing, and the possibility of students
becoming sick while on tour. According to management, the company
has adequate insurance coverage to address its medical, accident,
and evacuation risks. Additionally, we expect that WorldStrides'
domestic travel programs will likely resume sooner than its
higher-priced international trips that involve air travel."
Despite the pandemic, the company will continue to face the
following persistent risks even under a recovery scenario:
-- While Worldstrides has a significant market share in student
travel, it has a lower EBITDA margin and smaller scale than that of
many other broad and globally diversified rated education and
leisure companies. Even though there may be fewer student travel
service providers after the pandemic subsides, the industry will
continue to feature low barriers to entry. Although there are some
barriers for new entrants due to WorldStrides' accreditation as a
school and its relationships with a large network of teachers, S&P
does not believe they are significant enough to provide it with a
substantial and sustainable competitive advantage. While the
accreditation benefits its demand, some of its competitors are also
accredited and the percentage of students who complete for-credit
travel is small;
-- The travel industry is highly cyclical and can be severely
affected by perceived safety risks and terrorist events. However,
S&P expects the demand for WorldStrides' trips to eventually
stabilize once the current pandemic subsides and the economic
environment improves;
-- WorldStrides has a favorable reputation and a track record of
leading K-12 domestic student travel, which has enabled it to
maintain market share of more than 30%; and
-- The company typically benefits from near-term revenue
visibility and a favorable booking window.
S&P said, "The negative outlook reflects our belief that
WorldStrides' very high leverage over the next few years may be
unsustainable. In addition, we expect that the company will likely
continue to face significant revenue disruption until there is a
widely available medical solution for COVID-19.
"We could lower our ratings on WorldStrides if we believe its
liquidity position will worsen or that it will likely default or
enter into a debt restructuring of some form in the next 12
months.
"It is unlikely that we will revise our outlook on WorldStrides to
stable for the duration of the global travel downturn. However, we
could revise our outlook to stable or raise our rating if we
believe that the company will improve its EBITDA and cash flow,
maintain adequate liquidity, and sustain adjusted EBITDA interest
coverage of more than 1.5x."
LAMBERT'S CONSTRUCTION: Unsecureds to Get 25% Dividend in Plan
--------------------------------------------------------------
Lambert's Construction Company of Bluefield, a West Virginia
corporation, filed with the U.S. Bankruptcy Court for the Southern
District of West Virginia a Disclosure Statement and Plan of
Reorganization dated August 13, 2020.
Class U represents unsecured undisputed claims which are
non-contingent. The total in this class is approximately $266,000.
This class is impaired. The Debtor shall make quarterly payments
on these claims at the rate of $3,200 per quarter over a period of
20 quarters which represents a dividend of approximately 25%.
Class O is the ownership interest of Alex Lambert and Lesley
Lambert. The Lamberts will not receive any dividend on monies they
have loaned to the business. The Lamberts will retain equitable
ownership of the business about a reallocation of prior payments as
well as the allocation of the normal post-petition
post-confirmation payments.
The Monthly Operating Reports show the trend of the business.
Revenues have been increasing and the company is now poised for
positive cash flow. It is upon a going concern basis that
sufficient funds can be generated to make a meaningful payment to
creditors.
A full-text copy of the disclosure statement dated August 13, 2020,
is available at https://tinyurl.com/yxfcxw5g from PacerMonitor.com
at no charge.
The Debtor is represented by:
Joseph W. Caldwell
Caldwell & Riffee, PLLC
3818 MacCorkle Avenue, SE
P. O. Box 4427
Charleston, WV 25364
Tel: (304) 925-2100
Fax: (304) 925-2193
E-mail: jcaldwell@caldwellandriffee.com
About Lambert's Construction
Lambert's Construction Company of Bluefield, Inc. --
http://www.lambertscontracting.com/-- is a general contractor in
Bluefield, West Virginia. Its services include masonry, paving,
demolition and excavation, landscaping, and electrical work. It
has been serving the Mercer, Bland, and Giles counties since 2008.
Lambert's Construction Company sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 19-10086) on
July 9, 2019. At the time of the filing, the Debtor was estimated
to have assets between $500,000 and $1 million and liabilities
between $1 million and $10 million. The case is assigned to Judge
Frank W. Volk. The Debtor is represented by Caldwell & Riffee.
LAS VEGAS MONORAIL: Nov. 3 Auction of Substantially All Assets
--------------------------------------------------------------
Judge Natalie M. Cox of the U.S. Bankruptcy Court for the District
of Nevada authorized Las Vegas Monorail Co.'s bidding procedures in
connection with the sale of substantially all assets to the Las
Vegas Convention and Visitors Authority ("LVCVA"), under the terms
of the Asset Purchase and Sale Agreement, dated Sept. 2, 2020,
subject to overbid.
LVCVA will pay to the Debtor the sum of $24,146,094 as
consideration for the Sale Assets. This includes the
non-refundable earnest money deposit of $1,946,730, payment of the
redemption price of $20,207,057 for the Conduit Loan, $150,000 for
the EIDL Loan and $1,842,307 of assumed trade and contractual
liabilities of the Debtor. In addition, the Stalking Horse Bidder
will pay all Cure Amounts for Assumed Executory Contracts.
The Court approved and authorized the following Stalking Horse
Protection to the Stalking Horse Bidder: (i) Reimbursement Payment
in an amount not to exceed $350,000, and Breakup Payment of
$482,940; and (ii) the minimum initial amount of any overbid for
the Assets must (y) include a cash deposit equal to 10% of the
aggregate bid amount, (z) be of a value equal to the sum that is
$100,000 greater than the initial bid of the Stalking Horse Bidder
or such other amount determined by the Debtor in its discretion.
As a condition to the Stalking Horse Bid Protections granted to a
Stalking Horse Bidder, if an Auction is conducted, and the Debtor
does not choose the Stalking Horse Bidder as the Successful Bidder,
but instead chooses the Stalking Horse Bidder as the Bidder that
submitted the next highest or otherwise best bid at the conclusion
of such Auction, the Stalking Horse Bidder will be the back-up
bidder.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 22, 2020 at 12:00 p.m. (PT)
b. Initial Bid: $100,000 greater than the initial bid of the
Stalking Horse Bidder or such other amount determined by the Debtor
in its discretion
c. Deposit: 10% of the aggregate bid amount
d. Auction: If two or more Qualified Bids for the Assets are
received by the Bid Deadline, Debtor will conduct the Auction at
12:00 p.m. (PT) on Nov. 3, 2020, at the offices of the Debtor's
proposed counsel, Garman Turner Gordon, 7251 Amigo Street, Suite
210, Las Vegas, Nevada 89119, or by video, or such later time
and/or day or other place as Debtor will notify all Qualified
Bidders who have submitted Qualified Bids, if a Qualified Bid is
timely received. The Debtor will notify all Qualified Bidders and
all the counsel appearing in the case whether the Auction will be
conducted by video, and the method to participate in any such
videoconference.
e. Bid Increments: $100,000
f. Sale Hearing: Nov. 10, 2020 at 9:30 a.m. (PT)
g. Sale Objection Deadline: Nov. 6, 2020 at 5:00 p.m. (PT)
h. Closing: TBD by the Court
The Sale Notice is approved. Within two business days after the
entry of the Order, the Debtor (or its agents) will serve the Sale
Notice upon the Sale Notice Parties.
Within two business days of entry of the Order, the Debtor will
cause to be served on all non-Debtor counterparties to any Contract
that may be assumed by Debtor and assigned to the Successful
Bidder, the Cure Notice. The Contract Objection Deadline is Oct.
12, 2020 at 5:00 p.m. (PT).
A copy of the Bidding Procedures is available at
https://tinyurl.com/y67jzqgk from PacerMonitor.com free of charge.
About Las Vegas Monorail
Las Vegas, Nevada-based Las Vegas Monorail Company, organized by
the State of Nevada in 2000 as a nonprofit corporation, owns and
manages the Las Vegas Monorail. The Monorail is a seven-stop,
elevated train system that travels along a 3.9-mile route near the
Las Vegas Strip. LVMC has contracted with Bombardier Transit
Corporation to operate the Monorail. Though it benefits from its
tax-exempt status due to being a nonprofit entity, LVMC claims to
be the first privately-owned public transportation system in the
nation to be funded solely by fares and advertising. LVMC says it
receives no governmental financial support or subsidies.
The Company filed for Chapter 11 bankruptcy protection (Bankr. D.
Nev. Case No. 10-10464) on Jan. 13, 2010. Gerald M. Gordon, Esq.,
William M. Noall, Esq., and Gabriel A. Hamm, Esq., at Gordon
Silver, assist the Company in its restructuring effort. Alvarez &
Marsal North America, LLC, is the Debtor's financial advisor.
Stradling Yocca Carlson & Rauth is the Debtor's special bond
counsel. Jones Vargas is the Debtor's special corporate counsel.
The Company disclosed $395,959,764 in assets and $769,515,450 in
liabilities as of the Petition Date.
In April 2010, bondholder Ambac Assurance Corp. lost in its bid to
halt the bankruptcy after U.S. Bankruptcy Judge Bruce A. Markell
ruled that Monorail isn't a municipality and is therefore entitled
to reorganize in Chapter 11. U.S. District Judge James Mahan in
Reno upheld the ruling in October 2010.
LATAM AIRLINES: Wants Plan Exclusivity Until March Next Year
------------------------------------------------------------
LATAM Airlines Group S.A. and its affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to extend
the exclusivity deadline to file a Chapter 11 plan through and
including March 22, 2021, and to solicit acceptances of the plan
through and including May 21, 2021, as the company continues to
grapple with the impact of the pandemic.
"Though our airline industry was impacted instantaneously due to
the Covid-19 pandemic restrictions, our cargo operations remain
unaffected, especially the delivery operations for the medical and
other critical supplies to areas affected by the pandemic. But the
cargo demand cannot fully offset the pandemic impact on our
business," the Debtors tell the Court.
The Debtors contend they have made substantial progress in the
initial phases of their Chapter 11 Cases including to stabilize
their operations and lay the groundwork to begin focusing on
related matters. The Debtors' work to date includes:
(i) securing a wide array of first and second-day motions
allowing the Debtors to pay critical vendors, continue wage and
benefit programs, and fund certain other prepetition expenses;
(ii) completing the rejections of certain aircraft-related
leases that were not in line with the Debtors' existing and future
expected fleet needs and commencing discussions with other aircraft
counterparties regarding their leasing arrangements;
(iii) rejection of other onerous contracts and leases that
represented a loss to the Debtors, as well as successful entry of a
rejection procedures order to permit additional rejections of
non-fleet agreements on a streamlined basis;
(iv) securing recognition of the Chapter 11 proceedings in
Chile, Colombia, and the Cayman Islands, minimizing the risk of
seizure or other interference with the Debtors' assets and
operations; and
(v) securing, subject to Court approval, commitments for $2.45
billion in post-petition financing.
Although the worldwide nature of the Debtors' business allows them
to compete in a global market and to provide seamless transport to
its passengers around the world, it presents a number of
complexities that must be considered as part of the Debtors'
formulation of a plan of reorganization, including the sheer size
and breadth of the Debtors' assets and liabilities, as well as
secondary local legal and business considerations. To that end, the
Debtors already have sought and obtained two extensions for filing
schedules of assets and liabilities, schedules of executory
contracts and unexpired leases, and statements of financial
affairs.
Unless the Debtors are given the opportunity to conduct the
analysis of the claims filed in order to have a clear picture of
the amounts and classifications that creditors intend to assert for
their claims and the volume of claim objections, the Debtors cannot
take steps to actually contest claims or make meaningful progress
on negotiations of a plan of reorganization, both of which will
take additional time depending on the amount and classifications
asserted in the proof of claims filed as well as the nature of
claims objections the Debtors will pursue.
Continued exclusivity will permit the Debtors to avoid the business
disruptions that would result from the development of competing
reorganization plans and will benefit all stakeholders, including
the Debtors, their creditors, and other parties in interest since
it will allow all stakeholders to continue making progress toward a
consensual, value-maximizing restructuring.
Absent an extension, the Debtors' current exclusive filing period
was slated to expire September 23, 2020, with respect to the
Initial Debtors; and will expire November 4 with respect to Piquero
Leasing Limited, and November 6 with respect to the remaining
Subsequent Debtors. The current exclusive solicitation period will
expire November 22 with respect to the Initial Debtors; January 3,
2021, with respect to Piquero, and January 5 with respect to the
remaining Subsequent Debtors.
About LATAM Airlines
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise.
LATAM Airlines Group S.A. is the largest passenger airline in South
America. Before the onset of the COVID-19 pandemic, LATAM offered
passenger transport services to 145 different destinations in 26
countries, including domestic flights in Argentina, Brazil, Chile,
Colombia, Ecuador, and Peru, and international services within
Latin America as well as to Europe, the United States, the
Caribbean, Oceania, Asia, and Africa.
LATAM Airlines Group S.A. and its 28 affiliates sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25,
2020. Affiliates in Chile, Peru, Colombia, Ecuador, and the United
States are part of the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of December 31, 2019.
The Honorable James L. Garrity, Jr., is the case judge. The Debtors
tapped Cleary Gottlieb Steen & Hamilton LLP as general bankruptcy
counsel; FTI Consulting as restructuring advisor; and Togut, Segal
& Segal LLP, and Claro & Cia in Chile as special counsel. Prime
Clerk LLC is the claims agent.
LIBBEY GLASS: United Steelworkers Object to Disclosure Motion
-------------------------------------------------------------
The United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied Industrial and Service Workers International Union,
the exclusive collective bargaining representative of employees of
Libbey Glass Inc. and its Debtor Affiliates, objects to the Motion
of the Debtors for Entry of an Order Approving the Disclosure
Statement.
The Union generally agrees with and adopts the position of the
Official Committee of Unsecured Creditors on the appropriate
standards to evaluate the sufficiency of a disclosure statement and
the reasons why this proposed Disclosure Statement is inadequate
and premature.
The Union is involved in very difficult, painful negotiations over
the Debtors' proposals for substantial modifications to the Union's
various collective bargaining agreements ("CBAs"), including the
termination of operations at Shreveport and the dismantling of that
facility.
The Debtors largely propose reorganizing on the backs of their
workforce without, for example, further contributions by their
lenders. Those changes would gut major, longstanding protections
for employees and retirees; the implementation of those changes
would most probably lead to the departure of skilled employees
necessary to the continuation of key aspects of the debtor’s
business.
A full-text copy of the United Steelworkers' objection dated August
14, 2020, is available at https://tinyurl.com/y6o93gj3 from
PacerMonitor.com at no charge.
Attorneys for United Steelworkers:
LAW OFFICE OF SUSAN E. KAUFMAN
Susan E. Kaufman
919 N. Market Street, Suite 460
Wilmington, DE 19801
Tel: (302) 472-7420
Fax: (302) 792-7420
E-mail: skaufman@kaufmanlaw.com
Richard M. Seltzer
Josh Ellison
COHEN, WEISS AND SIMON LLP
900 Third Avenue
New York, New York 10022-4859
Tel: (212) 563-4100
Fax: (646) 473-8219
E-mail: reseltzer@cwsny.com
jellison@cwsny.com
About Libbey Inc.
Based in Toledo, Ohio, Libbey Inc. (NYSE American: LBY) is one of
the largest glass tableware manufacturers in the world. Libbey
operates manufacturing plants in the U.S., Mexico, China, Portugal
and the Netherlands. In existence since 1818, Libbey supplies
tabletop products to retail, foodservice and business-to-business
customers in over 100 countries. Libbey's global brand portfolio,
in addition to its namesake brand, includes Libbey Signature,
Master's Reserve, Crisa, Royal Leerdam, World Tableware, Syracuse
China, and Crisal Glass. In 2019, Libbey's net sales totaled $782.4
million. For more information, visit http://www.libbey.com/
Libbey Glass Inc. and 11 of its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-11439) on June 1, 2020.
In the petition signed by CEO Michael P. Bauer, Libbey Glass was
estimated to have $100 million to $500 million in assets and $500
million to $1 billion in liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtors tapped Latham & Watkins LLP and Richards, Layton &
Finger, P.A., as counsel; Alvarez & Marsal North America, LLC as
financial advisor; and Lazard Ltd. as investment banker. Prime
Clerk LLC is the claims agent, maintaining the page
https://cases.primeclerk.com/libbey.
LIBERTY COMMUNICATIONS: Fitch Affirms 'B+' LT IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed all of Liberty Communications of Puerto
Rico LLC's (LCPR) ratings, including the Long-Term Foreign Currency
Issuer Default Rating (IDR) at 'B+'. In addition, Fitch has
affirmed the 'BB-'/'RR3' ratings on the company's secured debt,
LCPR's revolving credit facility, LCPR Loan Financing LLC's 2026
Term Loan, and LCPR Senior Secured Financing Designated Activity
Company's 2027 notes.
The affirmation reflects the company's recovery from the
hurricanes, including the improvement in LCPR's financial profile
and the restoration of service. The company's senior secured debt
is rated one notch above the IDR due to above-average recovery
prospects.
LCPR's ratings continue to reflect the company's strong business
position in pay-TV and broadband services in Puerto Rico. The
ratings are tempered by LCPR's lack of geographic diversification,
making it vulnerable to weak macroeconomic conditions in Puerto
Rico. In October 2019, LCPR announced the acquisition of AT&T
Inc.'s (ATT; A-/Stable) operations in Puerto Rico and the U.S.
Virgin Islands. The transaction is expected to close in the fourth
quarter of 2020
KEY RATING DRIVERS
Improved Scale and Diversification: Fitch expects LCPR to
approximately triple in size, following the closing of the
acquisition. Fitch expects revenues in the USD1.2 billion-USD1.3
billion range, with EBITDA generation in the USD500 million-USD550
million range over the rating horizon. The combined entity should
benefit from economies of scale, as well as enhanced product
offerings across both its mobile and fixed-line businesses, which
should contribute around 2/3 and 1/3 of the company's revenues,
respectively. There are not significant overlaps in the product
portfolio.
Stronger Market Position: The combined entity boasts leading market
shares in both wireless and broadband Puerto Rico. While the merger
of T-Mobile and Sprint presents a formidable mobile competitor with
a similar market share, neither company has a broadband presence on
the island. America Movil S.A.B. de C.V.'s Claro has a significant
broadband and mobile share on the island; however, AT&T's mobile
subscriber base is weighted towards post-paid, while America
Movil's is weighted towards prepaid. Puerto Rico's mobile base
comprises mostly 4G post-paid customers, which compares favorably
with other markets in Latin America and the Caribbean. AT&T also
has a mobile market share of 49% in the U.S. Virgin Islands.
Recovery from Hurricane: LCPR's standalone financial profile has
strengthened considerably following the hurricanes with leverage
declining from a maximum of over 10.0x on an LTM basis at
third-quarter 2018, as the company largely restored service by YE
2018. Fitch has upgraded the LCPR's IDRs twice following the
downgrade to the company after Hurricanes Irma and Maria in
third-quarter 2017. Fitch expects that the combined company will
maintain net leverage around 4.0x-4.5x, in line with sister
companies CWC and VTR.
Linkages with Liberty Latin America (LLA): LLA's financial
management strategy involves moderately high amounts of leverage
across its operating subsidiaries, each ring-fenced from one
another. While the credit pools are legally separate, LLA has a
history of moving cash around the group for investments and
acquisitions. This approach improves financial flexibility;
however, it also limits the prospects for deleveraging. The high
degree of cash movement throughout the group could support an
eventual equalization of ratings; especially given LCPR's recovery
and new scale compared with Cable & Wireless Communications Limited
(CWC, BB-/Stable) and VTR Finance NV (VTR, BB-/Stable) following
the completion of the merger.
Acquisition Pressures Group's Capital Structure: Net debt across
the group should rise by USD1.95 billion to finance the
acquisition. While Fitch does not rate LLA, the rated subsidiaries
are ultimately responsible for servicing the group's consolidated
debts, including the parent company's USD403 million convertible
bonds due 2024. While net leverage across the rated entities should
remain in the 4.0x-4.5x range, consolidated LLA leverage is high
for the rating category, and could result in a negative rating
actions in the future.
Cash Flow Expected to Improve: Pre-merger, LCPR and AT&T generated
adjusted EBITDA margins of approximately 50% and 39%, respectively,
which results in a pro forma EBITDA margin of 42%. Consolidation of
shared functions should drive modest efficiencies in both costs and
capex, improving FCF. The company's strong market position and the
limited size of the mature island markets both acts as natural
barriers to entry, which supports EBITDA margins around 40%.
Capital intensity has moderated since network restoration, which
was largely completed in second-half 2018, and should continue
declining in the medium term to around 14%-16%.
Mixed Operating Environment Trends: LCPR benefits somewhat from a
dollarized economy with relatively high GDP per capita and
favorable systemic governance characteristics. Unfortunately, GDP
for the island, along with population, is still below pre-Hurricane
levels, and the overall prospects for growth remain highly
uncertain. Political instability is also a negative, as is
stubbornly high unemployment. The U.S. government has allocated
USD950 million for network improvements in PR and the USVI, along
with USD9 billion for infrastructure funds thus far. Combined with
the restructuring of Puerto Rico's debt, the new funds could
provide the island with an economic boost.
DERIVATION SUMMARY
Following the completion of the acquisition, LCPR's credit profile
should be in line with CWC and VTR's. Each is expected to maintain
EBITDA net leverage above 4.0x, and each has a strong competitive
position in their respective markets, which is offset by their lack
of geographic diversification on an individual basis. LLA's
financial management strategy of keeping net leverage above 4.0x
and moving cash around the group to fund acquisitions and
investments could result in the eventual equalization of ratings
across the three credit pools.
Compared with Caribbean peer Digicel International Finance Limited
(CCC+), LCPR has a more diversified product portfolio, which is
more subscription based, and a less leveraged capital structure.
Furthermore, consolidated leverage at the parent is much lower at
LLA (NR) than at Digicel Group Holdings Limited (CCC).
LLA has a business profile similar to Millicom International
Cellular SA's (MIC; BB+/Stable), a holding company whose
subsidiaries have leading positions in several markets. LLA's
revenue base has a higher proportion of dollars and subscription
revenues, while Millicom's revenues are primarily local currency
denominated. Both have seen leverage increase as a result of
acquisitions. However, LLA's leverage remains higher than MIC's,
which Fitch expects to decline to 2.5x-3.0x over the medium term
ESG Considerations
Liberty Communications of Puerto Rico LLC: Group Structure: 4,
Exposure to Environmental Impacts: 4, Financial Transparency: 4
LCPR scores a '4' on Group Structure and Financial Transparency as
a result of LLA's financial management strategies. The company also
scores a '4' on Exposure to Environmental Impacts, due to its
presence in a hurricane-prone region.
Except for the matters discussed, the highest level of ESG credit
relevance, if present, is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity(ies),
either due to their nature or the way in which they are being
managed by the entity(ies).
KEY ASSUMPTIONS
Fixed Operations
-- Fixed RGUs to grow by approximately 1% overall, as growing
broadband penetration offsets flat to declining Pay TV and
telephone over the medium term;
-- Blended Fixed ARPU in the USD38-USD40 range as increases in
broadband offset decreasing Pay TV and telephone over the medium
term;
-- Programming and other direct costs of service to decline as a
percent of revenues as Pay TV revenues decline, with SG&A and other
operating expenses to grow slightly faster than inflation.
Mobile Operations:
-- Postpaid RGUs to grow in the 2%-3% range, with ARPUs declining
by approximately 1%-2%;
-- Blended EBITDA margins of 40%-42% over the medium term,
equivalent to USD500 million-USD550 million;
-- Capex of around USD180 million-USD200 million, or
approximately 14%-16% of revenues
Fitch projects recovery rates in the 50%-70% range, consistent with
an 'RR3'. The recovery analysis assumes that LCPR would be
reorganized as a going-concern in bankruptcy rather than
liquidated. Fitch has assumed a 10% administrative claim. Fitch
estimates a GC EBITDA of approximately USD245 million, which is
roughly equivalent to a 50% decline for the combined business.
Fitch uses an EV/EBITDA multiple of 6.0, between the 5.0x
historical used for LCPR and the 6.5x multiple that LLA is paying
for AT&T's assets.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- A positive rating action is contingent on successful closing
of the transaction, along with the prospect of deleveraging at the
consolidated LLA level to below 4.5x net debt/EBITDA.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- An erosion of the company's business position and/or sizable
cash upstream for M&A or dividends, leading to net debt/EBITDA over
5.0x could trigger a negative rating action.
-- While the three credit pools are legally separate, LLA net
debt/EBITDA sustained above 5.0x could result in negative rating
actions at one or multiple rated entities in the group.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: LCPR had $102 million in readily available cash
and equivalents, and another $1.35 billion in restricted cash as of
June 30th, 2020, and no short-term principal maturities. The
company benefits from its long-dated maturity profile, and the
financial flexibility that LLA enables by moving cash between the
three credit pools. The company also has access to a $125 million
revolving credit facility, which further bolsters liquidity.
In fourth-quarter 2019, LCPR refinanced their existing credit
facilities, replacing the $850 million first lien and $93 million
second lien term loans with a new secured $1.0 billion dollar term
loan due 2026. The company also issued $1.2 billion senior secured
notes, to which 90m have been added. The proceeds of these notes'
issuances were put into escrow to fund the acquisition of AT&T's
assets in PR and USVI.
SUMMARY OF FINANCIAL ADJUSTMENTS
Standard adjustments made in line with Fitch Corporate Rating
Criteria.
Restricted cash was added to cash & equivalents
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Liberty Communications of Puerto Rico LLC: Group Structure: 4,
Exposure to Environmental Impacts: 4, Financial Transparency: 4
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
LK SAVAGE: Unsec. Creditors to Get Paid From Remaining Cash Assets
------------------------------------------------------------------
Lk Savage & Associates, Inc. filed with the U.S. Bankruptcy Court
for the Northern District of Florida, Pensacola Division, a
Combined Plan and Disclosure Statement dated August 14, 2020.
Under the Plan, the Debtor seeks to accomplish payments under the
Plan by, among other things, by liquidating the remaining assets of
the Debtor and distributing same to the Debtor's creditors in
accordance with the Bankruptcy Code and this Plan. The Debtor
estimates that the Effective Date of the Plan will be on or before
July 31, 2020 but may be later based upon the conditions precedent
for the Effective Date.
The Class 1 secured claim shall be paid from the balance of the
Debtor's bank accounts on the Effective Date. Any remaining sums
following this payment shall be defined as the "Remaining Cash
Assets" and will be utilized to pay the unsecured claims.
Class 2 consists of Claims of General Unsecured Creditors. Each
Holder of an Allowed Class 2 Claim shall receive a pro rata
distribution from the Debtor's Remaining Available Funds within 90
days of the Effective Date. No Class 5 Unsecured Claim shall be
allowed to the extent that it is for interest or other similar
charges. Class 2 consists of a scheduled unsecured claim to
Citibank of $19,274 and the unsecured claim of BankUnited in the
amount of $287,529.
On the Effective Date, the Debtor will cease operations except to
take any actions necessary to effectuate the provisions of the Plan
and thereafter shall be dissolved. All Equity Interests shall be
canceled upon dissolution. No distribution of assets shall be made
to Holders of Equity Interests.
A full-text copy of the Combined Plan and Disclosure Statement
dated August 14, 2020, is available at https://tinyurl.com/y6x3okcf
from PacerMonitor at no charge.
The Debtor is represented by:
ZALKIN REVELL, PLLC
NATASHA Z. REVELL
TERESA M. DORR
2441 US Highway 98W, Ste. 109
Santa Rosa Beach, FL 32459
Tel: (850) 267-2111
Fax: (866) 560-7111
About LK Savage & Associates
LK Savage & Associates, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Fla. Case No. 20-30088) on Jan.
30, 2020. At the time of the filing, the Debtor had estimated
assets of between $100,001 and $500,000 and liabilities of between
$500,001 and $1 million. Judge Henry A. Callaway oversees the
case. Natasha Z. Revell, Esq., at Zalkin Revell, PLLC is the
Debtor's legal counsel.
LOCK HAVEN UNIVERSITY: S&P Lowers Bond Rating to 'BB'
------------------------------------------------------
S&P Global Ratings lowered its rating to 'BB' from 'BBB-' on the
Pennsylvania Higher Education Facilities Authority's series 2013A
(tax-exempt) and 2013B (taxable) revenue refunding bonds, issued
for Lock Haven University Foundation (LHUF), for the Evergreen
Commons Student Housing project at Lock Haven University. The
outlook is negative.
"The downgrade and negative outlook reflect demand pressure in
fiscal 2020," said S&P Global Ratings credit analyst Phillip Pena.
S&P sid, "We note that prior to the COVID-19 pandemic, the
college's occupancy was lower than historical results, and that
COVID-19 pressured occupancy further. As a result, coverage is
impaired, and though the project ended fiscal 2020 with requisite
1.2x coverage, it achieved this result solely because of $370,000
in support from the LHUF. According to management, fall 2020
anticipated occupancy is expected to be 64% of built beds and less
foundation support is currently anticipated, and therefore we
believe there is some potential for a draw on the project's debt
service reserve fund during fiscal 2021.
"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 to two
years. 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. The
negative outlook also reflects our view that it is highly likely
the project will continue to generate weaker rental revenues due to
pressured occupancy, and the likelihood that that the project will
need to draw on the debt service reserve for fiscal 2021. In our
opinion, the project's financial operation is sustainable in the
short term given the project's reserve levels and support from
LHUF. Still, if occupancy levels do not return the prepandemic
maximum following fiscal 2021, we could lower the rating further."
Currently, the project has $13.1 million of debt outstanding,
consisting of the series 2013 bonds.
LONESTAR RESOURCES INC: Files Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
Aishwarya Nair of Reuters reports that Lonestar Resources US Inc
filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy
Court for the Southern District of Texas on Wednesday,September 30,
2020, according to court documents.
The Texas based shale driller had announced a restructuring support
agreement in September 2020 with its largest shareholders to
eliminate about $390 million in aggregate debt obligations and
preferred equity interests.
Weak crude demand due to the pandemic has proved to be a
double-whammy for shale companies, which grew rapidly early in the
decade but in the process amassed a large pile of debt.
Through the end of August, 36 oil and gas producers with $51
billion debt have filed for bankruptcy this year, according to the
law firm Haynes and Boone.
It includes Chesapeake Energy CHKAQ.PK, Chaparral Energy CHAP.N,
Whiting Petroleum Corp WLL.N. Oasis Petroleum Inc OAS.O filed for
Chapter 11 on Tuesday.
About Lonestar Resources
Headquartered in Fort Worth, Texas, Lonestar --
http://www.lonestarresources.com/-- is an independent oil and
natural gas company, focused on the development, production, and
acquisition of unconventional oil, natural gas liquids, and
naturalgas properties in the Eagle Ford Shale in Texas, where the
Company has accumulated approximately 72,642 gross (53,831 net)
acres in what it believes to be the formation's crude oil and
condensate windows, as of Dec. 31, 2019.
Lonestar Resources reported a net loss attributable to common
stockholders of $111.56 million for the year ended Dec. 31, 2019,
compared to net income attributable to common stockholders of
$11.53 million for the year ended Dec. 31, 2018.
As of March 31, 2020, the Company had $616.35 million in total
assets, $586.73 million in total current liabilities, $19.28
million in total long-term liabilities, and $10.34 million in total
stockholders' equity.
LONESTAR RESOURCES: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Lonestar Resources US Inc.
111 Boland Street, Suite 300
Fort Worth, Texas 76107
Business Description: Lonestar Resources --
www.lonestarresources.com --
is an independent oil and natural gas
company focused on the exploration,
development and production of
unconventional oil, natural gas liquids
and natural gas in the Eagle Ford Shale
play in South Texas.
Chapter 11 Petition Date: September 30, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Twenty-two affiliates that concurrently filed voluntary petitions
for relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Lonestar Resources US Inc. (Lead Debtor) 20-34805
Lonestar Resources Intermediate Inc. 20-34806
LNR America Inc. 20-34807
Lonestar Resources America Inc. 20-34808
Amadeus Petroleum Inc. 20-34809
Albany Services, L.L.C. 20-34810
T-N-T Engineering, Inc. 20-34811
Lonestar Resources, Inc. 20-34813
Lonestar Operating, LLC 20-34804
Poplar Energy, LLC 20-34814
Eagleford Gas, LLC 20-34815
Eagleford Gas 2, LLC 20-34816
Eagleford Gas 3, LLC 20-34817
Eagleford Gas 4, LLC 20-34818
Eagleford Gas 5, LLC 20-34819
Eagleford Gas 6, LLC 20-34820
Eagleford Gas 7, LLC 20-34821
Eagleford Gas 8, LLC 20-34822
Eagleford Gas 10, LLC 20-34823
Eagleford Gas 11, LLC 20-34824
Lonestar BR Disposal LLC 20-34825
La Salle Eagle Ford Gathering Line LLC 20-34826
Judge: Hon. David R. Jones
Debtors' Counsel: Timothy A. ("Tad") Davidson II, Esq.
Ashley L. Harper, Esq.
HUNTON ANDREWS KURTH LLP
600 Travis Street, Suite 4200
Houston, Texas 77002
Tel: 713-220-4200
Fax: 713-220-4285
Email: taddavidson@HuntonAK.com
ashleyharper@HuntonAK.com
- and -
George A. Davis, Esq.
David A. Hammerman, Esq.
Keith A. Simon, Esq.
Annemarie V. Reilly, Esq.
Madeleine C. Parish, Esq.
LATHAM & WATKINS LLP
885 Third Avenue
New York, New York 10022
Tel: 212-906-1200
Fax: 212-751-4864
Email: george.davis@lw.com
david.hammerman@lw.com
keith.simon@lw.com
annemarie.reilly@lw.com
madeleine.parish@lw.com
Debtors'
Investment
Bankers: ROTHSCHILD & CO.
- AND -
INTREPID FINANCIAL PARTNERS
Debtors'
Financial
Advisor: ALIXPARTNERS, LLP
Debtors'
Claims &
Noticing
Agent: PRIME CLERK LLC
https://cases.primeclerk.com/lonestar/Home-DocketInfo
Total Assets as of August 31, 2020: $559,954,942
Total Debts as of August 31, 2020: $626,219,014
The petitions were signed by Frank D. Bracken, III, chief executive
officer.
A full-text copy of Lonestar Resources US Inc.'s petition is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/PANJEDI/Lonestar_Resources_US_Inc__txsbke-20-34805__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. UMB Bank, N.A. 11.250% Senior $271,171,875
P O Box 414589 Unsecured Notes
Kansas City, MO 641414589
Tel: 816-391-4100
2. PPP Loan U.S. Small Debt $2,156,800
Business Administration
409 3rd St, SW
Washington, DC 20416
Tel: 800-827-5722
Email: answerdesk@sba.gov
3. Independence Contract Trade Payable $1,058,501
Drilling, Inc
20475 SH 249, Suite 300
Houston, Texas 77070
Tel: 281-598-1230
4. Kodiak Gas Services, LLC Trade Payable $361,050
15320 Hwy 105 W, Ste. 210
Montgomery, TX 77356
Tel: 936-539-3300
Email: ar@kodiakgas.com;
Stacie Herlong:
Email: stacie.herlong@kodiakgas.com
5. JACAM Trade Payable $263,391
205 S. Broadway
Sterling, KS 67579
Sue Sillin:
Email: sue.sillin@jacam.com
Tel: 620-278-3355x8130;
Gina Parker:
Email: gina.parker@jacam.com
Tel: 620-278-3355x8123
6. Twilight Services Inc Trade Payable $240,611
5401 Old Granbury Rd.
Granbury, TX 76049
Shannon Hager
Tel: 817-326-4806
Email: shager@twilightservicesinc.com
7. Stellar Drilling Fluids, LLC Trade Payable $236,966
3403 Marquart St.
Houston, TX 77027
Tel: 832-726-0006
8. OSC Energy, LLC Trade Payable $226,342
7426 South Staples Street,
Ste #107
Corpus Christi, Texas 78413
Tel: 830-579-4487
Ellie Cavazos - 361-412-7345
9. Supreme Production Trade Payable $222,032
Services, Inc.
5901 State Highway 44
Corpus Christi, Texas 78406
Yvonne Rosales
Tel: 361-299-2700
Email: Billing@supremeproduction.net
10. TransTex LLC - Transtex Trade Payable $213,625
Treating
440 Louisiana St., Suite 700
Houston, TX 77002-1054
Susan Hinton
Tel: 713-654-4440
Email: shinton@transtextreating.com
11. Liberty Lift Solutions, LLC Trade Payable $182,980
16420 Park Ten Pl #300
Houston, TX 77084
Tel: 713-575-2300
Email: bobby.evans@libertylift.com
12. Trisun Energy Services, LLC Trade Payable $148,602
7501 Miller Road 2
Houston, TX 77049
Lena Fu
Email: lena.fu@trisun-energy.com
Tel: 281-860-0900
Email: info@trisun-energy.com
13. Stallion Oilfield Services Trade Payable $133,771
950 Corbindale Rd #400
Houston, TX 77024
Tel: (713) 528-5544
Penny Krier
Tel: 361-894-0923
Email: pkrier@sofs.cc
14. Wrangler Trucking LLC Trade Payable $133,016
PO Box 1603
Shiner, TX 77984
Janice Walleck
Tel: 361-594-8275
Email: wranglertrucking@gmail.com
15. Pioneer Well Services, LLC Trade Payable $129,794
Pioneer Energy Services
1250 NE Loop 410, Suite 1000
San Antonio, TX 78209
Tel: 210-828-7689
16. 5J Oilfield Services, LLC Trade Payable $125,735
4090 N. Hwy 79,
Palestine, TX 75801
Lindsey Frye
Email: lfrye5JOilfield.net
Tel: 903-723-0253
Email: info@5jtrucking.net
17. Scientific Drilling Trade Payable $125,671
International
16701 Greenspoint Park
Drive, Suite 200
Houston, TX 77060
Tel: 281-443-3300
18. Global Vessel and Tank, LLC Trade Payable $103,032
117 Liberty Avenue
Lafayette, LA 70509
Tel: 337-534-8925
Email: scamel@globalvessel.com
info@globalvessel.com
19. JSA Safety & Consulting, Inc. Trade Payable $94,289
P.O. Box 878
Poteet, Texas 78065
Tel: 830-742-2580
Email: amy@jsa-safety.com
stefanie@jsa-safety.com
20. US Ecology Energy Waste Trade Payable $91,277
Disposal Services, LLC
PO Box 4248 Dept. 6742
Houston, TX 77210-4248
Crystal Kelly
Tel: (346) 388-3421
Email: Crystal.Kelly@usecology.com
21. New Tech Global Ventures, LLC Trade Payable $75,484
1030 Regional Park Dr
Houston, TX 77060
Larry A. Cress, P.E.
Tel: (281) 951-4330
Email: lcress@ntglobal.com
22. HC Carriers, LLC Trade Payable $73,906
4519 San Bernardo Ave
Laredo, TX 78041
Vanessa Laurel:
Tel: (956) 309-3555,
Tel: (956) 517-4050 (Office)
23. New Tech Global Trade Payable $70,172
Environmental, LLC 911
Regional Park Dr
Houston, TX 77060
Tel: 281-872-9300
John Wilson
Email: jwilson@ntglobal.com
Tel: 281-682-9761
24. Schlumberger Technology Trade Payable $69,730
Corporation
1430 Enclave Parkway,
MD750
Houston, TX 77077
Nashida Subhi
Tel: (713) 375-3494
Email: billing@slb.com
25. BJ Services, LLC Trade Payable $65,410
11211 FM 2920 Rd.
Tomball, Texas 77375
Tel: 281-408-2361
26. CB&F Construction LLC Trade Payable $58,945
1379 Garden Laurel New
Braunfels, TX 78130
Tel: 830-560-6925
27. Innovex Downhole Trade Payable $57,073
Solutions, Inc.
4310 N Sam Houston Pkwy E,
Houston, TX 77032
Tel: 281-602-7815
Email: sales@innovex-inc.com
28. CWR Management LLC Trade Payable $55,813
Clear Water Resources LLC
1619 E. Common Street Suite A101
New Braunfels, TX 78130
Stacy Castillo: 915-549-0334
Amanda Robinson:
Tel: 830-627-9044
Email: arobinson@cw-r.com
29. Warrior Supply, Inc. Trade Payable $52,645
3107 Houston Hwy
Victoria, TX 77901
Tel: (361)570-1711 -
Email: Billing@warriorsupply.com
Elaine Brzozowski:
elaine@warriorsupply.com
30. Ron Bridges Corporation Trade Payable $51,757
142 Eldridge Rd, Suite C
Sugar Land, TX 77478
Ron Bridges
Tel: 281-201-2877 Ext 5
Email: ronbridgescorp@aol.com
LONESTAR RESOURCES: Files Chapter 11 With Prepackaged Plan
----------------------------------------------------------
Lonestar Resources US Inc. on Sept. 15 disclosed that it and
certain of its direct and indirect wholly-owned domestic
subsidiaries (collectively with the Company, the "Debtors") have
entered into a Restructuring Support Agreement (the "Support
Agreement") with its largest stakeholders that will eliminate
approximately $390 million in aggregate debt obligations and
preferred equity interests.
Under the terms of the Support Agreement, approximately $250
million of the Company's 11.250% Senior Notes due 2023 (the
"Notes") will be converted to equity and accrued interest thereon
will be extinguished. In addition, lenders under the Company's
revolving credit facility who agree to accept the Plan (as defined
below) will, among other things, receive their pro rata share of
warrants (the "New Warrants") to purchase up to 10% of the new
equity interests in the Company (subject to dilution only by the
issuance of new equity interests under a management incentive plan
("MIP Equity")), revolving loans under the exit revolving credit
facility, and term loans under the second-out exit term facility.
Holders of preferred equity interests in the Company will receive
their pro rata share of 3% of the new equity interests in the
Company (subject to dilution by the MIP Equity and the New
Warrants) and holders of existing Class A Common Stock in the
Company will receive their pro rata share of 1% of the new equity
interests in the Company (subject to dilution by the MIP Equity and
New Warrants).
Under the terms of the Support Agreement, the Debtors would
effectuate the proposed transactions through a prepackaged plan of
reorganization (the "Plan") under Chapter 11 of the U.S. Bankruptcy
Code ("Chapter 11"). The Company has already obtained support for
the proposed transactions from lenders holding 100 percent of the
aggregate principal amount outstanding under its revolving credit
facility, noteholders holding approximately 67.1 percent of the
aggregate principal amount outstanding under its Notes, and holders
of 100 percent of its preferred equity interests.
The Company is confident, based on the Support Agreement, that it
will be able to meet its financial commitments and otherwise
continue to operate its business as usual throughout the
restructuring period. The Company anticipates funding the Cases and
continuing to operate the business with cash-on-hand and certain
proceeds from the consensual termination of the Debtors' existing
hedging arrangements with certain lenders under its revolving
credit facility. The Support Agreement contemplates that the
Company will continue operating its business without disruption to
its customers, vendors, partners or employees. In addition, the
Support Agreement contemplates that unsecured trade creditors will
be paid in full under the Plan.
"We have carefully considered our options in the unprecedented
environment faced by the energy industry and concluded that a
consensual restructuring is in the best interest of the Company. In
combination with our efforts to meaningfully reduce our capital and
operating costs, the significant reduction in leverage that this
transaction will afford the Company will position Lonestar to be
highly competitive going forward," said Frank D. Bracken III, Chief
Executive Officer of the Company.
The Company is represented in this matter by Latham & Watkins LLP,
Hunton Andrews Kurth LLP, Intrepid Partners LLC, Rothschild & Co US
Inc. and AlixPartners, LLP.
About Lonestar Resources
Headquartered in Fort Worth, Texas, Lonestar --
http://www.lonestarresources.com/(NASDAQ: LONE) -- is an
independent oil and natural gas company, focused on the
development, production, and acquisition of unconventional oil,
natural gas liquids, and natural gas properties in the Eagle Ford
Shale in Texas, where the Company has accumulated approximately
72,642 gross (53,831 net) acres in what it believes to be the
formation's crude oil and condensate windows, as of Dec. 31, 2019.
Lonestar Resources reported a net loss attributable to common
stockholders of $111.56 million for the year ended Dec. 31, 2019,
compared to net income attributable to common stockholders of
$11.53 million for the year ended Dec. 31, 2018. As of June 30,
2020, the Company had $583.98 million in total assets, $591.44
million in total current liabilities, $22.76 million in total
long-term liabilities, and a total stockholders' deficit of $30.23
million.
BDO USA, LLP, in Dallas, Texas, the Company's auditor since 2013,
issued a "going concern" qualification in its report dated April
13, 2020 citing that the Company did not satisfy certain covenants
under the Company's revolving credit facility as of Dec. 31, 2019
and does not anticipate maintaining compliance with the
consolidated current ratio covenant over the next twelve months,
which could lead to acceleration of the Company's debt obligations.
These matters raise substantial doubt about the Company's ability
to continue as a going concern.
MILLMAC CORPORATION: Unsecured Creditors to Split $120K in Plan
---------------------------------------------------------------
Millmac Corporation filed with the U.S. Bankruptcy Court for the
Middle District of Florida, Tampa Division, a Disclosure Statement
to the Plan of Reorganization dated August 14, 2020.
Class 8 consists of all Allowed Unsecured Claims not otherwise
classified in the Plan. Each Holder of a Class 8 Allowed Unsecured
Claim shall receive the following treatment:
(d) On the first annual anniversary of the Effective Date, a
Distribution equal to its Pro Rata Share of $10,000.
(e) On the second annual anniversary of the Effective Date, a
Distribution equal to its Pro Rata Share of $20,000.
(f) On the third annual anniversary of the Effective Date, a
Distribution equal to its Pro Rata Share of $25,000.
(g) On the fourth annual anniversary of the Effective Date, a
Distribution equal to its Pro Rata Share of $30,000.
(h) On the fifth annual anniversary of the Effective Date, a
Distribution equal to its Pro Rata Share of $35,000.
Class 9 comprises all Equity Interests in the Debtor. Holders of
Equity Interests will retain such equity interests, which will
become equity interests in the Reorganized Debtor following the
Effective Date. Class 9 is unimpaired and conclusively is presumed
to have accepted the Plan and is not entitled to vote to accept or
reject the Plan.
The Plan provides for the payment of Allowed Claims from (a) the
cash flow of the Debtor derived from continued operations, and (b)
future repayments by Michael Miller to the Debtor on the remaining
balance of a prepetition loan received from the Debtor.
A full-text copy of the Disclosure Statement dated August 14, 2020,
is available at https://tinyurl.com/y62afkwr from PacerMonitor at
no charge.
The Debtor is represented by:
Susan Heath Sharp
Matthew B. Hale
STICHTER, RIEDEL, BLAIN & POSTLER, P.A.
110 East Madison Street, Suite 200
Tampa, Florida 33602
Telephone: (813) 229-0144
Facsimile: (813) 229-1811
E-mail: ssharp@srbp.com
mhale@srbp.com
About Millmac Corporation
Millmac Corporation is a provider of specialized marine labor, ship
repair and dredging for industrial and residential uses.
Based in Bartow, Fla., Millmac Corporation filed for Chapter 11
bankruptcy protection (Bankr. M.D. Fla. Case No. 19-11877) on Dec.
18, 2019. In the petition signed by Michael J. Miller, president,
the Debtor disclosed $1,308,639 in assets and $1,619,039 in
liabilities. Susan Heath Sharp, Esq., at Stichter, Riedel, Blain &
Postler, P.A., is the Debtor's legal counsel.
MIRAGE DENTAL: Unsecureds to Receive 51% If Class Votes for Plan
----------------------------------------------------------------
Mirage Dental Associates, Professional L.L.C. filed the Fifth
Amended Chapter 11 Plan of Reorganization and Disclosure Statement
dated August 14, 2020.
The Plan provides for seven classes of secured claims; and four
classes of unsecured claims, and one class of equity interests.
Distributions to unsecured creditors holding allowed claims will
depend on whether the Plan is confirmed by consent of Class 11 (the
unsecured creditors) or by cram down pursuant to 11 U.S.C. Sec.
1129(b).
If the Plan is confirmed with the consent of Class 11, such
creditors will receive distributions of approximately fifty-one
cents on the dollar (51 percent). If the Plan is confirmed without
the consent of Class 11, such creditors will receive distributions
of approximately forty-three cents on the dollar (43 percent) .
The Plan also provides for payment of administrative and priority
claims in full.
Class 14 includes the Interests in the Debtor held by the
pre-confirmation members, Dr. Michael Moroni. Class 14 is
unimpaired by the Plan. On the Effective Date of the Plan, all
Class 14 interests in the Debtor will be retained by the existing
interest holder subject to the terms of the Plan, and shall retain
all existing rights and privileges.
Payments and distributions under the Plan will be funded by the
Debtor's income, any recoveries from prepetition claims and
post-confirmation distributions from the Net Income into the
Creditor Fund.
A full-text copy of the Fifth Amended Plan dated August 14, 2020,
is available at https://tinyurl.com/y3vwydyv from PacerMonitor at
no charge.
The Debtor is represented by:
BUECHLER LAW OFFICE, LLC
Kenneth J. Buechler, Esq.
999 18th Street, Suite 1230-S
Denver, Colorado 80202
Tel: 720-381-0045
Fax: 720-381-0382
E-mail: ken@KJBlawoffice.com
About Mirage Dental Associates
Mirage Dental Associates, Professional, LLC, is a privately-held
company in Castle Rock, Colorado, that owns a dental clinic.
Mirage Dental Associates sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Colo. Case No. 18-12496) on March 30,
2018. In the petition signed by Michael J. Moroni, Jr., managing
member, the Debtor disclosed $5.41 million in assets and $8.72
million in liabilities. Judge Joseph G. Rosania Jr. oversees the
case. The Debtor tapped Buechler & Garber, LLC, as its legal
counsel. No official committee of unsecured creditors has been
appointed in the Chapter 11 case.
MURPHY SHIPPING: Seeks to Hire Bradford Jackson as Accountant
-------------------------------------------------------------
Murphy Global Shipping & Commercial Services, Inc. seeks approval
from the U.S. Bankruptcy Court for the Southern District of Texas
to hire Bradford Jackson, CPA LLC as its accountant.
The accounting firm will render the following services:
a. provide auditing services, including completion of the
examination of financial statements as of August 31, 2020 which
examination is currently in progress;
b. assist in the preparation of accounting statements as of
August 31, 2020;
c. assist in the preparation of monthly accountings to the
bankruptcy court and the creditors' committee;
d. assist in the preparation of cash flow forecast for the
period commencing September 1, 2020;
e. assist in the preparation of trial exhibits for plans of
reorganization;
f. prepare tax returns; and
g. perform all other accounting services for the Debtor.
The compensation and other terms of employment of the accounting
firm of are based on regular billing rates for accounting
services.
The accounting firm represents no interest adverse to the Debtor or
the estate of the Debtor.
The firm can be reached through:
Bradford Jackson, CPA
Bradford Jackson, CPA LLC
11111 Katy Fwy, Suite 910
Houston, TX 77079
Telephone: (346) 329-3906
E-mail: bradfordjackson@bjjacksoncpa.com
About Murphy Shipping
Murphy Shipping & Commercial Services, Inc. is a Houston-based
full-service logistics company that conducts business under the
name Murphy Global Logistics. Visit http://www.murphyship.comfor
more information.
Murphy Shipping filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No.
20-34049) on Aug. 12, 2020. Murphy Shipping President Jerry Rowell
signed the petition.
At the time of the filing, Debtor disclosed $1,576,696 in assets
and $82,947 in liabilities.
Debtor has tapped The Wiley Law Group, PLLC as its legal counsel.
NEIMAN MARCUS: Moody's Assigns Caa1 CFR on Bankruptcy Emergence
---------------------------------------------------------------
Moody's Investors Service assigned first time ratings to NMG
Holding Company, Inc. following its emergence from bankruptcy,
including a Caa1 Corporate Family Rating ("CFR"); Caa1-PD
Probability of Default Rating ("PDR") and a Caa2 rating on both its
$700 million Senior Secured Term Loan and $50 million Senior
Secured Notes. The ratings outlook is stable.
The term loan and notes are secured by a first priority lien on all
of Neiman's assets (which includes real property and intellectual
property) excluding the collateral securing its $900 million asset
based revolving credit facility ("ABL"). Additionally, the notes
and term loan will have a second priority lien on collateral
securing its ABL, largely its inventory. On September 25, 2020,
Neiman emerged from Chapter 11 proceedings, reducing its funded
debt load from approximately $5 billion pre-emergence to $1.1
billion.
"The Caa1 CFR reflects Neiman's weak credit metrics as it contends
with the significant reduction in demand for luxury apparel during
the current pandemic," said Vice President Christina Boni. "Despite
the high leverage at Neiman, its capital structure following its
emergence will enable Neiman to maintain adequate liquidity as it
works to return its business to more normalized profitability
levels."
Assignments:
Issuer: NMG Holding Company, Inc.
Probability of Default Rating, Assigned Caa1-PD
Corporate Family Rating, Assigned Caa1
Senior Secured Bank Credit Facility, Assigned Caa2 (LGD4)
Senior Secured Regular Bond/Debenture, Assigned Caa2 (LGD4)
Outlook Actions:
Issuer: NMG Holding Company, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
NMG Holding Company, Inc.'s Caa1 CFR reflects its well-known
reputation and solid position in the luxury apparel market. Despite
the considerable contraction in sales as a result of the disruption
caused by the pandemic, Neiman's core customer is of a higher
income demographic and typically has the means to spend.
Participation though remains dependent on the customer's desire to
purchase. Although liquidity is adequate, credit metrics are
expected to remain weak throughout fiscal 2021 (period ended July)
as we do not expect operations to return to more normalized levels
of EBITDA until fiscal 2022 given the continued changes in consumer
behavior that have resulted from COVID-19. Neiman has no near-term
debt maturities emerging from Chapter 11, as its nearest maturity
is now in September 2024. However, its interest burden will remain
significant. The company is now owned by its former debtholders
prior to its bankruptcy filing.
Although the global luxury market is showing signs of recovery,
Neiman is solely exposed to North America and its major city
locations are most at risk to reduced customer traffic. Luxury
apparel also remain weak as occasions to dress for are limited by
the pandemic. Although Neiman has historically had high online
penetration, operational pressure continues as consumer demands
increase and utilization of stores further evolves. Moody's expects
the consumer desire for newness and exclusivity in product in the
face of increased price transparency will continue to require
meaningful changes to its business model.
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. We regard the coronavirus outbreak as a social
risk under our ESG framework, given the substantial implications
for public health and safety. Today's action reflects the impact on
Neiman of the deterioration in credit quality it has triggered,
given its exposure to apparel and urban markets, which has left it
vulnerable to shifts in market demand and sentiment in these
unprecedented operating conditions.
The stable outlook reflects Moody's view that although that
Neiman's operational performance will be hurt in fiscal 2020 by the
disruption of COVID-19, the company has an affluent customer which
is expected to return to more normalized levels of spending when
the demand for its products, particularly apparel, and traffic to
its key urban markets recover.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Neiman improves consistently its sales
and operating performance. Quantitatively, ratings could be
upgraded if debt/EBITDA was sustained below 6.0 times,
EBITA/Interest was sustained above 1.2 times and free cash flow was
positive, while maintaining a good overall liquidity profile.
The ratings could be downgraded if EBITDA is not positioned to
improve materially approaching $100 million of EBITDA in fiscal
2021 and is not posting consistent growth. Any erosion in liquidity
would also put pressure on ratings. Any additional debt incurrence
or shareholder friendly activities would be viewed negatively.
NMG Holding Company, Inc., headquartered in Dallas, TX, operates 38
Neiman Marcus stores, 2 Bergdorf Goodman stores, and 5 off-price
stores under the "Last Call" brand as well as an online and catalog
presence. Total revenue was $4.6 billion for the LTM period ended
February 1, 2020. The company's equity owners include PIMCO,
Davidson Kempner, Sixth Street and JP Morgan Asset Management.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
OASIS PETROLEUM: Files for Chapter 11 With Prepackaged Plan
-----------------------------------------------------------
Oasis Petroleum Inc. (NASDAQ: OAS) on Sept. 30, 2020 announced that
it has entered into a restructuring support agreement (the "RSA")
with substantially all of its lenders in Oasis Petroleum's
revolving credit facility and holders of 52% of the aggregate
principal amount of the Company's bonds on a comprehensive
"pre-prepackaged" restructuring plan (the "Plan") to strengthen the
Company's balance sheet and significantly reduce its debt.
To implement the Plan, Oasis Petroleum and certain of its
affiliates on Sept. 30, 2020, filed voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the Southern
District of Texas (the "Court"). Through this financial
restructuring, Oasis Petroleum intends to reduce its total
indebtedness by $1.8 billion, representing 100% of its senior
unsecured notes and senior unsecured convertible notes. Upon
emergence, the Company expects to have approximately $340 million
of borrowings under the Oasis Petroleum credit facility. It is
expected that the restructuring process will be completed on an
accelerated timeframe allowing for an emergence in November 2020,
subject to Court approval.
Oasis Midstream Partners (NASDAQ: OMP), an independent legal entity
operated as a Master Limited Partnership, and all subsidiaries in
which it owns an equity interest are not included in Oasis
Petroleum's Chapter 11 proceedings.
In light of a volatile market environment that drove a severe
downturn in oil and gas prices, as well as the unprecedented impact
of the COVID-19 pandemic, Oasis Petroleum engaged with its lenders
and an ad hoc committee of noteholders regarding restructuring
alternatives to reduce debt, increase financial flexibility and
position the business for long-term success. After a thorough
review, Oasis Petroleum determined that implementing a
restructuring plan through a controlled, court-supervised
restructuring is the right path forward. Throughout the financial
restructuring process, Oasis Petroleum's upstream operations and
production and Oasis Midstream Partners' operations are expected to
continue as normal, and the companies will continue to prioritize
the safety of their employees and communities.
Chairman and Chief Executive Officer, Thomas B. Nusz commented,
"Oasis Petroleum is a great company with high-quality assets and
employees and a well-earned reputation for excellence in
environmental stewardship, safety and governance. However, due to
historically low global energy demand and commodity prices, we
determined that it is best for Oasis Petroleum to take decisive
action to strengthen our liquidity and overcome the headwinds now
challenging both our company and industry. We are confident that we
are taking the right steps to position the business for long-term
success. We thank our lenders and noteholders for their support,
which reflects their confidence in our business and our team, and
which will allow us to move quickly through the court-supervised
process."
Mr. Nusz continued, "We remain committed to the highest standards
as it relates to environmental stewardship, safety and operational
excellence. We expect to continue our operations as normal and
intend to meet our obligations to vendors, and to continue making
payments to royalty owners, working interest owners and surface
owners on a go-forward basis. We appreciate the support of our
financial stakeholders and look forward to quickly emerging from
this process as an even stronger company."
The Company intends to file customary motions with the Court to
support Oasis Petroleum's ongoing operations without interruption,
including the payment of employee wages and benefits and paying
royalty interest owners, working interest owners and surface
owners, in the ordinary course. In addition, vendors and suppliers
are expected to be paid in full, and the Company intends to seek
Court approval to pay vendors for all goods and services provided
on or after the Chapter 11 filing date in the ordinary course of
business. Under terms of the "pre-packaged" plan, which is subject
to Court approval, general unsecured pre-petition claims will also
be paid in full upon the Company's emergence from Chapter 11.
Financing
In connection with the RSA, and subject to Court approval, Oasis
Petroleum has received a commitment for $450 million in
debtor-in-possession ("DIP") financing from its existing lenders.
Upon Court approval, the new financing, along with cash generated
from the Company's ongoing operations, is expected to provide
sufficient liquidity for the Company to continue operating in the
ordinary course during the court-supervised process.
Additionally, the Company has entered into a commitment letter for
an exit revolving credit facility with borrowing capacity up to
$575 million.
Entities Part/ Not Part of Chapter 11 Filing
The following entities are included in the Oasis Petroleum Chapter
11 filing:
Oasis Petroleum Inc.
Oasis Petroleum LLC
Oasis Petroleum North America LLC
Oasis Well Services LLC
Oasis Petroleum Marketing LLC
Oasis Petroleum Permian LLC
OMS Holdings LLC
Oasis Midstream Services LLC and
OMP GP LLC
The following entities are NOT included in the Oasis Petroleum
Chapter 11 filing: Oasis Midstream Partners LP and subsidiaries,
OMP Operating LLC, Bobcat DevCo LLC, Beartooth DevCo LLC, Bighorn
DevCo LLC and Panther DevCo LLC
Oasis Midstream Partners LP and its subsidiaries, OMP Operating
LLC, Bobcat DevCo LLC, Beartooth DevCo LLC, Bighorn DevCo LLC and
Panther DevCo LLC will not be included in Oasis Petroleum's Chapter
11 filing. Oasis Midstream Partners is well-capitalized and is not
subject to Court rules and oversight and will continue to operate
in the normal course. Oasis Midstream Partners is a fee-based
master limited partnership formed by its sponsor, Oasis Petroleum,
which operates a diversified portfolio of midstream assets in the
Williston and Delaware Basins that are integral to the crude oil
and natural gas operations of Oasis Petroleum and are strategically
positioned to capture volumes from other producers.
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.
Evercore is acting as financial advisor and Paul, Weiss, Rikind,
Wharton & Garrison LLP and Porter Hedges LLP are acting as legal
advisors to the Ad Hoc Committee of Senior Noteholders.
OMAGINE INC: Asks Court to Extend Plan Exclusivity Thru Dec. 7
--------------------------------------------------------------
Omagine Inc. and Journey of Light, Inc., 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 by 90 days to and
including December 7, 2020.
The Debtors are in continuing negotiations to obtain litigation
financing and retain counsel to pursue a breach of contract claim
in Oman, and seek to engage counsel in Oman for the purpose of
pursuing a multi-million dollar set of claims against the office of
Royal Court Affairs of the Sultanate of Oman. The Debtors are
working steadily to secure DIP financing, which will trigger the
engagement of counsel upon approval of the Court.
"Our proposed plan requires time to complete negotiations with
counsel in Oman, to secure DIP financing, and to set a hearing date
on the proposed plan, as may be amended and we believe that 90 days
should be sufficient to accomplish all of those goals," the Debtor
tell the Court.
The Debtors said they have no continuing business other than to
prosecute claims in Oman. Debts, if any, may arise out of approval
of the counsel agreements and approval of a plan. The Debtors' plan
is subject to discussion and negotiation with the U.S. Trustee and
the U.S. Securities and Exchange Commission concerning third-party
releases that the Debtors wish to secure consistent with Chassix
Holdings.
Absent an extension, the Debtor's exclusive right to file a plan of
reorganization was slated to expire on September 8, 2020.
About Omagine and Journey of Light
Omagine, Inc., an entertainment, hospitality, and tourism company,
and Journey of Light, Inc. sought Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 20-10742) on March 10, 2020. At the time of
the filing, Omagine disclosed estimated assets of up to $50,000 and
estimated liabilities of $1 million to $10 million.
Judge Michael E. Wiles oversees the cases. Rotbert Business Law
P.C. is Debtors' legal counsel.
OUTDOOR BY DESIGN: Oct. 20 Auction of Substantially All Assets
--------------------------------------------------------------
Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle
District of Florida authorized Outdoor By Design, LLC's bidding
procedures in connection with the auction sale of all or any
portion of their assets.
The Assets include the following: (i) Type 1 Assets being sold
consist of the Wash Tank, 80 x 100 ft. Oven, 50x 60 ft. Oven,Paint
Booth, Torrit Paint Collection System, Torrit Dust Collector, and
CNC machine; and (ii) Sun 3D Printer.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 16, 2020 at 5:00 p.m. (EST)
b. Initial Bid: For the Printer to be included in the sale,
the Debtor must receive a minimum cash bid of $10,000 for the
Printer prior to the Bid Deadline. If no such bid is received by
the Debtor, the Debtor will provide written notice to the counsel
for Bank of the West that the Printer is excluded from the sale,
and the automatic stay will be terminated effective as of the Bid
Deadline, with no further order from the Court, allowing Bank of
the West to recover and sell the Printer.
c. Deposit: 10% of the purchase price
d. Auction: If at least one Qualified Bids in respect of a
particular asset is received by the Bid Deadline, the Debtor will
conduct the Auction for such asset at the offices of Benjamin G.
Martin, 1620 Main Street, Suite One, Sarasota, FL 34236, and by
Zoom video conference at 10:00 a.m. on Oct. 20, 2020 or such other
time as the Debtor, in consultation with Rosenthal, may notify
qualified Bidders who have submitted Qualified Bids.
e. Bid Increments: The Debtor will announce the bidding
increments for bids at the outset of the Auction with respect to
the Assets, as applicable.
f. Sale Hearing: Oct. 26, 2020 at 2:00 p.m. (EST)
g. Sale Objection Deadline: Oct. 23, 2020 at 5:00 p.m. (EST)
h. Closing: Oct. 31, 2020
The form of the Auction and Hearing Notice to be provided by the
Debtor is approved and appropriate and sufficient for all purposes
and no other or further notice will be required. Within five
business days of the date of the Order, the Debtor will place a
publication version of the Auction and Hearing Notice for one day
in the Sarasota Herald Tribune and will have posted the notice onto
the Debtor's website.
Notwithstanding any applicability of Bankruptcy Rule 6004(h),
6006(d) or 9014, the Order will be immediately effective and
enforceable upon entry of the Order. 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/yagg5wwp from PacerMonitor.com free of charge.
About Outdoor By Design
Outdoor By Design, LLC, a manufacturer of outdoor furnishings,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
M.D. Fla. Case No. 20-04253) on June 1, 2020. At the time of the
filing, the Debtor disclosed $3,090,093 in assets and $10,543,170
in liabilities. Debtor has tapped Law Offices of Benjamin Martin
as its legal counsel.
PACIFIC DRILLING SA: Skips $31.4M Interest Payment Due Oct. 1, 2020
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Carl Surran of Seeking Alpha reports that Pacific Drilling (PACD)
looks like the next oil and gas name on the verge of bankruptcy
after electing not to make the $31.4M interest payment due October
1, 2020, for its 8.375% first lien notes due 2023 and the $19.6M
PIK interest payment also due today, according to an 8-K filing.
The company has a 30-day grace period expiring on Oct. 31, 2020
before the non-payment constitutes an "event of default."
Pacific Drilling had $218M of cash and cash equivalents and $6M of
restricted cash as of Sept. 30, 2020.
Pacific Drilling warned in August that it could file for Chapter 11
bankruptcy, saying "we do not believe our current capital structure
will be sustainable" because of "market conditions and our outlook
for contracting opportunities through 2020 and 2021."
About Pacific Drilling SA
Pacific Drilling S.A. (OTC: PACDQ) (NYSE: PACD) a Luxembourg public
limited liability company (societe anonyme), operates an
international offshore drilling business that specializes in
ultra-deepwater and complex well construction services. Pacific
Drilling -- http://www.pacificdrilling.com/-- owns seven
high-specification floating rigs: the Pacific Bora, the Pacific
Mistral, the Pacific Scirocco, the Pacific Santa Ana, the Pacific
Khamsin, the Pacific Sharav and the Pacific Meltem. All drillships
are of the latest generations, delivered between 2010 and 2014,
with a combined historical acquisition cost exceeding $5.0 billion.
The average useful life of a drillship exceeds 25 years.
On Nov. 12, 2017, Pacific Drilling S.A. and 21 affiliates each
filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
17-13193). The cases are pending before the Honorable Michael E.
Wiles and are jointly administered.
Pacific Drilling disclosed $5.46 billion in assets and $3.18
billion in liabilities as of Sept. 30, 2017.
The Debtors tapped Sullivan & Cromwell LLP as bankruptcy counsel
but was later replaced by Togut, Segal & Segal LLP; Evercore
Partners International LLP as investment banker; AlixPartners, LLP,
as restructuring advisor; Alvarez & Marsal Taxand, LLC as executive
compensation and benefits consultant; Ince & Co LLP and Jones
Walker LLP as special counsel; and Prime Clerk LLC as claims and
noticing agent; Deloitte Financial Advisory Services LLP, as
accounting advisor to the Debtor.
The RCF Agent tapped Shearman & Sterling LLP, as counsel, and PJT
Partners LP, as financial advisor.
The ad hoc group of RCF Lenders engaged White & Case LLP, as
counsel.
The SSCF Agent tapped Milbank Tweed, Hadley & McCloy LLP, as
counsel, and Moelis & Company LLC, as financial advisor.
The Ad Hoc Group of Various Holders of the Ship Group C Debt, 2020
Notes and Term Loan B tapped Paul, Weiss, Rifkind, Wharton &
Garrison, in New York as counsel.
PACIFICO NATIONAL: Seeks to Hire Thomas H Yardley as Counsel
------------------------------------------------------------
Pacifico National, Inc. seeks authority from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Thomas H Yardley
Law Offices as its legal counsel.
The firm will provide legal services in connection with Debtor's
Chapter 11 case.
Thomas H Yardley received payment for its services from Pacifico
National President Mark Sangree.
Thomas Yardley, Esq., assures the court that he has no connection
with either the Debtor or its management.
The firm can be reached through:
Thomas H. Yardley, Esq.
Thomas H Yardley Law Offices
1970 Michigan Avenue, Bldg. D
Cocoa, FL 32922-5723
Tel: 321-633-0400
Email: bankruptcy@yardleylaw.net
About Pacifico National
Pacifico National, Inc., which conducts business under the name
AmEx Pharmacy, is a nationwide compounding pharmacy specializing in
dermatology and the development of topical therapies. It services
patients in 38 states throughout the United States. Visit
https://amexpharmacy.com for more information.
Pacifico National filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-05009) on Sept. 3, 2020. Pacifico National President Mark L.
Sangree signed the petition. At the time of the filing, Debtor
disclosed $363,794 in assets and $6,583,984 in liabilities.
Debtor is represented by Thomas H Yardley Law Offices.
PALAZZA SFT: Crusco Family Trust Objects to Disclosure Statement
----------------------------------------------------------------
The Crusco Family Trust Agreement, dated September 12, 2002 objects
to the Disclosure Statement for Plan dated July 17, 2020 filed by
debtor Palazza SFT Residential TX, LLC.
Crusco Family Trust objects to the Disclosure Statement as the
Disclosure Statement and the proposed Plan of Reorganization
recognize Crusco Family Trust’s claim, it lists an incorrect Post
Maturity Interest rate. The correct post-maturity interest rate is
18%.
A full-text copy of the Crusco Family Trust's objection to
Disclosure Statement dated August 18, 2020, is available at
https://tinyurl.com/y34msm5s from PacerMonitor at no charge.
The Crusco Family Trust is represented by:
SAVRICK SCHUMANN JOHNSON MCGARR
KAMINSKI & SHIRLEY, L.L.P.
MitchellD.Savrick
The Overlook at Gaines Ranch
4330 Gaines Ranch mop, Suite 150
Austin, Texas 78735
Tel: (512) 347-1604
Fax: (512) 347-1676
E-mail: mitchell@ssjmlaw.com
About Palazza SFT Residential TX
Palazza SFT Residential TX, LLC, based in Austin, TX, filed a
Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-10336) on March
2, 2020. In the petition signed by Larry R. Stauffer, authorized
representative, the Debtor was estimated to have $1 million to $10
million in both assets and liabilities. The Hon. Tony M. Davis
oversees the case. H. Anthony Hervol, Esq., at the Law Office of
H. Anthony Hervol, serves as bankruptcy counsel to the Debtor.
PATRIOT WELL: Committee Taps Carl Marks as Financial Advisor
------------------------------------------------------------
The official committee of unsecured creditors of Patriot Well
Solutions LLC seeks approval from the U.S. Bankruptcy Court for the
Southern District of Texas to hire Carl Marks Advisory Group LLC as
its financial advisor.
The committee requires Carl Marks to provide the following
services:
a. analyze the current financial position of the Debtor;
b. analyze the Debtor's business plans, cash flow projections,
restructuring programs, and other reports or analyses prepared by
the Debtor or its professionals;
c. attend and advise at meetings with the committee, its
counsel, other financial advisors of the Debtor;
d. advise the committee with respect to the proposed
bankruptcy auction, bid procedures, and sales process;
e. advise the committee and its counsel in the development,
evaluation and documentation of any plan of reorganization;
f. communicate with the Debtor and the Debtor's investment
banking professionals;
g. assist in communications with the Debtor and other
constituents;
h. evaluate potential fraudulent conveyances and other
instances where recovery is possible outside of the estate;
i. monitor the ongoing performance of the Debtor, keep the
committee informed and represent the committee's interest with the
intention to maximize recovery for the unsecured creditors;
j. render testimony in connection with mentioned services;
k. perform other tasks and duties as directed by the
committee.
The hourly rates of the personnel expected to primarily work on the
case range between $400 and $825 for the calendar year 2020, which
are approximately 6% to 11% lower than their normal rates.
H. Brock Hudson, managing director at Carl Marks, disclosed in
court filings that the firm represents no interest adverse to the
Committee, the Debtor, its estate, or any other party-in-interest.
The firm can be reached through:
H. Brock Hudson
Carl Marks Advisory Group LLC
900 Third Ave, 33rd Floor
New York, NY 10022
Telephone: (212) 909-8400
E-mail: bhudson@carlmarks.com
About Patriot Well Solutions
Patriot Well Solutions LLC -- https://www.patriotwell.com --
provides well completion, production and intervention services for
the energy industry. It offers wireline and perforating, coiled
tubing and nitrogen, fluid pumping and crane services.
Patriot Well Solutions sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-33642) on July 20,
2020. The petition was signed by Matthew Foster, its chief
restructuring officer. At the time of the filing, the Debtor
disclosed between $10 million and $50 million in both assets and
liabilities.
Judge Jeffrey P. Norman oversees the case.
The Debtor tapped Squire Patton Boggs (US) LLP as legal counsel,
Sonoran Capital Advisors LLC as restructuring advisor, Piper
Sandler & Co. as financial advisor, and Stretto as claims and
noticing agent.
On August 5, 2020, the United States Trustee for the Southern
District of Texas appointed the official committee of unsecured
creditors in this chapter 11 case. The committee tapped Foley &
Lardner LLP as its counsel.
PENNGOOD LLC: Unsecured Creditors May Recover 13.87% Over 5 Years
-----------------------------------------------------------------
Penngood, LLC, filed with the U.S. Bankruptcy Court for the
District of Columbia a Disclosure Statement describing Plan of
Reorganization dated Aug. 14, 2020.
Since filing this petition, the debtor has relocated to a less
expensive a semi-virtual office in July, 2020. As a result, the
Debtor's monthly rent fell from $7,549.92 to $500.00. In addition,
the debtor has reduced its staff to a core of five full time
employees, and has reduced the leadership management's compensation
by $181,000 per year or 36% from its level at the time of filing.
Clyde Penn, the Debtor's principal, reduced his compensation by
$30,000 from the time of filing as part of the overall compensation
reduction.
The Debtor's Plan proposes a minimum payments of $13,200 each month
for sixty months, for a total of $792,000. The currently known
administrative priority claims are to be paid outside the Plan as
are all lease payments and the payment to the only secured
creditor, the SBA (the EIDL loan).
The priority claims, which are all tax related claims, are paid
under the Plan over sixty months at 3% per annum interest, which
require an aggregate payment of $593,644. This leaves potentially
$198,356 available for distribution to the unsecured creditors,
whose claims total $1,429,549.
Unsecured creditors may receive a distribution equaling as much as
13.87% of their claims. These calculations, and the projected
percentage of distribution to unsecured creditors, are based on
what is known to the debtor at the time this Plan is filed, and
should be considered as a good faith estimate. Future events,
unforseen or unknown, could affect the percentage of distribution
to unsecured creditors, either favorably or unfavorably.
Class 6: This class is comprised of the equity security holder,
Clyde Penn, who will retain his equity interest in the debtor.
The term of the Plan shall be sixty (60) consecutive months from
the effective date of the Plan. It is anticipated that the
debtor’s income shall be sufficient to make all payments
required. The debtor shall act as its own disbursing agent. The
effective date of the Plan shall be the 14th day after the entry of
an Order of Confirmation. The claims designated to be paid inside
the Plan shall be paid in monthly installments of$13,200.00.
A full-text copy of the Disclosure Statement dated August 14, 2020,
is available at https://tinyurl.com/y3jbruwm from PacerMonitor at
no charge.
Counsel for the Debtor:
RICHARD G. HALL
601 King Street
Suite 301
Alexandria, Virginia 22314
703/256-7159
About Penngood LLC
Penngood LLC -- https://www.penngood.com/ -- is a strategic
communications firm specializing in total health.
The Debtor previously sought bankruptcy protection on Feb. 15, 2016
(Bankr. D.D.C. Case No. 16-00051).
Penngood LLC sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.D.C. Case No. 20-00230) on May 19, 2020. At the
time of the filing, the Debtor disclosed assets of between $1
million and $10 million and liabilities of the same range. Judge
Martin S. Teel, Jr. oversees the present case. The Debtor has
tapped Richard G. Hall, Esq., as its legal counsel, and King, King
& Associates, PA as its accountant.
PETCO HOLDINGS: S&P Alters Outlook to Postive, Affirms 'CCC+' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based Petco Holdings
Inc. to positive from negative and affirmed all of its ratings,
including its 'CCC+' issuer credit rating.
S&P said, "The outlook revision reflects that, while we still view
the company's capital structure as unsustainable, our improved
performance expectations and forecast for deleveraging below 6x in
fiscal year 2021 will provide Petco with some positive momentum to
address the rapidly approaching debt maturities.
"We continue to believe the company's capital structure is
unsustainable, though recent positive performance has improved the
likelihood of an at-par refinancing of its term loan."
Petco's second-quarter results and our forecast for the
continuation of certain tailwinds stemming from the coronavirus
will provide the company with some amount of positive momentum in
advance of upcoming maturities. Petco has a $500 million
asset-based lending (ABL) facility maturing in October 2022
(unrated) and a $2.5 billion term loan maturing in January 2023.
S&P said, "We expect the company to try to refinance these
maturities well in advance of their becoming current, which will
likely occur at a time when the markets still exhibit volatility
and continue to be negatively affected by the coronavirus pandemic.
Furthermore, in our view the company would need to continue to
report positive results, which we view as materially uncertain, to
undertake a successful refinancing that ensures lenders are fully
repaid at par. As such, while we believe the likelihood of an
at-par financing has increased, we do not currently have a very
high level of confidence that it will occur at this time."
S&P said, "Petco's second-quarter results were ahead of our
expectations. While we expect tailwinds from the coronavirus
pandemic to support performance, our forecast for the back half of
2020 remains materially uncertain.
"The company's comparable sales increased by 10.5% in the second
quarter, which represents year-over-year growth of 610 basis points
(bps). We believe that Petco has benefitted from a shift in
consumer discretionary spending toward home-related purchases,
including elevating spending on pets, and away from travel, dining,
and other experiences that have been limited due to the
coronavirus. We also view the increased rate of pet ownership as
providing a boost to performance, which we believe will continue to
positively affect results through the end of the year and into
2021. In addition, Petco has significantly expanded e-commerce
sales as consumers increasingly focus on safety and convenience,
which led the e-commerce proportion of sales to roughly double in
the first and second quarters of the year. We believe that the
company's comparable sales will also be positive in the third and
fourth quarters but slow materially relative to the second
quarter."
Petco materially improved margins year over year in the second
quarter. The company was able to expand margins, in part, by
leveraging lower selling, general, and administrative (SG&A) costs
on accelerated revenue growth as well as through a favorable shift
in product mix (with outsize growth in its higher-margin pet
supplies). S&P said, "We expect that Petco's margins will return to
more normalized levels in the second half of the year given the
one-time nature of SG&A savings as the benefits of its mix shift
moderate. Therefore, we currently project S&P-adjusted EBITDA
margins will improve by roughly 50 bps from fiscal-year 2020
levels, which--combined with our increased revenue
expectations--leads us to forecast that S&P-adjusted leverage will
decline below 6x in fiscal year 2021."
The path of the pandemic and its effect on consumer spending
through the fall could lead to additional volatility.
S&P said, "In our view, Petco's second-quarter results were
supported by government stimulus actions that have expired without
a clear replacement. Furthermore, unemployment remains at highly
elevated levels and to the extent that consumers reduce
discretionary spending, potentially as a result of a second wave of
coronavirus or macroeconomic uncertainties, we would expect the
performance uplift Petco has received to be eliminated or
minimized."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
S&P said, "The positive outlook reflects our view that Petco's
strong second-quarter performance and the tailwinds from the
coronavirus pandemic have improved the likelihood it will be able
to complete an at-par refinancing of its term loan facility.
"We could take a negative rating action on Petco if we believe the
likelihood that it will complete an at-par refinancing has
declined, which could occur if performance slows such that
comparable store sales are flat to negative and EBITDA margins
decline."
S&P could raise its rating on Petco if:
-- S&P is highly confident that it will be able to complete an
at-par refinancing of its term loan facility;
-- S&P expects the company to continue to generate positive
comparable sales and maintain EBITDA margins; and
-- S&P believes that Petco will generate consistently positive
free operating cash flow (FOCF).
PETSMART INC: S&P Alters Outlook to Positive, Affirms 'B-' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based PetSmart Inc.
to positive from stable and affirmed all of its ratings, including
its 'B-' issuer credit rating.
S&P said, "The positive outlook reflects our expectation that
continued revenue and EBITDA expansion will lead to leverage in the
mid-6x area as of the end of fiscal year 2020 before improving
further to 6x in fiscal year 2021.
"The outlook revision reflects our expectation that the company's
strong performance in the second quarter has modestly accelerated
our anticipated deleveraging trend. However, some uncertainty
remains around how the pandemic will affect PetSmart's performance
through 2020 and into 2021.
"PetSmart's second-quarter results benefited from a shift in
consumer discretionary spending toward pet-related goods, which we
believe will continue at a moderated pace in the back half of the
year."
PetSmart reported a 10.6% improvement in comparable store sales for
its retail stores in the second quarter, which is a considerable
improvement compared with the 0.2% decline reported for the second
quarter of fiscal 2019. At the same time, Chewy's sales rose by
46%, which led to overall consolidated sales growth of 25%. S&P
said, "We believe that the coronavirus pandemic has led to an
increase in pet ownership as well as a reallocation of consumer
discretionary spending toward home-related purchases, including pet
purchases, and away from travel and dining. While we forecast that
the pace of PetSmart's sales growth will temper in the third and
fourth quarters, we expect that the changes in consumer spending
due to the pandemic will continue to provide a modest tailwind.
Because of this, we now project that the company's comparable sales
will rise by the low- to mid-single digit percent range while
Chewy's sales increase by the 35%-40% range in fiscal 2020 (ending
Jan. 31, 2021), leading to a 15%-20% rise in consolidated sales."
S&P said, "Company S&P-adjusted EBITDA margins were materially
higher than we expected for the second quarter and rose by roughly
300 basis points (bps) year over year. The company increased
margins by leveraging fixed costs on strong sales growth while
experiencing a beneficial shift in sales mix, including a strong
rise in sales of hard and specialty goods. For the second half of
the year, we expect PetSmart's margins to be closer to historical
levels while Chewy's margins continue to improve. This will make up
for the company's weaker margins in the first quarter and leads us
to project S&P-adjusted EBITDA margins of about 10% for the year,
which is higher than we previously anticipated.
"Given the company's performance improvement in the second quarter,
we now forecast leverage will be in the mid-6x area in fiscal year
2020 declining to about 6x in fiscal year 2021.
"PetSmart's accelerated revenue growth and roughly stable margins
will increase absolute EBITDA and lead us to forecast that
S&P-adjusted leverage will be in the mid-6x area in 2020, which
represents a full turn improvement relative to 2019 (7.4x). While
the company's leverage remains elevated at more 6x, performance
tailwinds have accelerated deleveraging such that we now expect
leverage to be about 6x in 2021 and see a potential path for the
company sustain leverage of less than 6x if the tailwinds from the
pandemic continue to support its performance.
"PetSmart has several rapidly approaching debt maturities,
including a $750 million asset-based lending (ABL) facility
maturing in December 2021 (unrated) and $2.7 billion outstanding
term loan maturing in March 2022. We believe that current operating
performance trends and the value of Chewy equity will allow for a
successfully refinance. However, we continue to view markets as
volatile given the uncertainty around the economy and the pandemic
over the next 12 months.
"We believe there is still some potential for volatility in its
performance given the uncertainty around the path of the pandemic
for the remainder of fiscal year 2020 and into fiscal year 2021.
"The path of the pandemic remains uncertain and could lead to
changes in consumer discretionary spending that negatively affect
PetSmart's performance. In our view, the company's second-quarter
results were partially supported by government stimulus actions,
which expired at the end of July with no clear replacement. In
addition, U.S. unemployment remains significantly elevated, which
could lead to a pullback in discretionary spending. While pet
purchases are somewhat non-discretionary (particularly
consumables), we would expect the company's sales of hard goods and
specialty merchandise, which are currently strong sales categories
for PetSmart, to moderate in a weaker consumer spending
environment."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
The positive outlook reflects our expectation that PetSmart's
leverage will decline toward 6x over the next 12 months on positive
same store sales, continued rapid growth at Chewy, and sustained
EBITDA margins.
S&P could revise its outlook on PetSmart to stable if it expects
debt to EBITDA sustained at more than 6x, which could occur if
same-store sales are flat to negative and EBITDA margins decline by
roughly 50 bps.
S&P could raise its rating on PetSmart if:
-- Its debt to EBITDA declines below 6x on a sustained basis,
which could occur through additional debt paydowns;
-- S&P believes PetSmart will sustain positive same-store sales
and EBITDA growth; and
-- PetSmart addresses upcoming maturities of its ABL and term loan
in 2021 and 2022, respectively.
POST OFFICE SQUARE: Developer Files for Chapter 11 Bankruptcy
-------------------------------------------------------------
Bill Heltzel of Westfair Online reports that Post Office Square LLC
filed for bankruptcy.
Rockland developer Larry B. Weinstein is trying to protect his most
valuable asset, a partially built commercial building in Spring
Valley, so he can salvage or sell it. Weinstein cited pending
litigation and an "all-out effort" to protect all of his properties
in a Chapter 11 petition filed Sept. 18 in U.S. Bankruptcy Court by
Post Office Square LLC.
Post Office Square, at Main and Church streets, has been a center
of controversy for several years.
Spring Valley agreed in 2009 to deed the blighted property to
Weinstein as part of an urban renewal plan. Work was to begin
immediately, according to the deal, and to be completed in two
years.
The village deeded the parcel in January 2013, and six months
later, according to court records, he applied for a building permit
for a 3-story commercial building.
Spring Valley sued Weinstein in 2018 to get the property back. The
village argued that he had violated the agreement by not starting
work immediately, failing to finish in two years and leaving an
incomplete structure that is a "blight on the community."
Weinstein countered that he had spent $2.5 million on the project
and that the building needed only $350,000 in work to finish.
Justice Paul I. Marx of Rockland Supreme Court ruled on Aug. 12,
2020 that the Post Office Square property had to be conveyed back
to the village.
Weinstein appealed the ruling last month and then petitioned for
bankruptcy protection.
Post Office Square is also at the center of a personal Chapter 11
bankruptcy petition Weinstein filed last year, in which he
attributed his financial problems to a "period of time when my
health failed."
He had suffered a stroke, followed by a heart attack and long-term
rehabilitation, he stated in an affidavit.
"I was literally out of commission for three years and have been
unable to recover since," he states in the affidavit. He claims
that the village was frustrating his ability to complete Post
Office Square, "to force a default, with the end goal of taking the
partially improved property without compensation."
His assets consisted of homes in Airmont and Lake Worth Florida,
two houses in Spring Valley rented out as apartments, vacant land
upstate and "my most valuable asset, Post Office Square LLC."
He declared assets of nearly $4.4 million and liabilities of $4.3
million. Claims filed in the case, however, total nearly $14.6
million, including $5.9 million asserted by the state Workers’
Compensation Board, more than $1 million in income taxes by the
IRS, $344,130 in state taxes and $236,811 by Rockland County.
Weinstein wants to consolidate his personal bankruptcy with the
Post Office Square case, he states in the affidavit, "as the major
focus in both cases is the very same commercial property."
Post Office Square has not filed detailed financial schedules yet,
but it declared from $1 million to $10 million in assets and
liabilities. Its lists 13 unsecured debts totaling more than $4.7
million, characterizing all as disputed, except for $4 million to
Weinstein himself.
His intention, he states in the affidavit, is to rehabilitate his
properties or sell them.
Chestnut Ridge attorney Harvey S. Barr represents Weinstein and
Post Office Square.
About Post Office Square
Post Office Square, LLC was founded in 2008. The Company's line of
business includes renting, buying, selling and appraising real
estate.
RAYNOR SHINE: Seeks to Hire NEORR & Associates as Tax Consultant
----------------------------------------------------------------
Raynor Shine Services, LLC seeks authority from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Eric Orr and NEORR
& Associates, LLC as its tax consultant.
The Debtor seeks to employ NEORR & Associates for the purpose of
forensic accounting and financial investigative work relative to
any ongoing or future legal proceedings; consultation and
representation before any law enforcement agency, Internal Revenue
Service, or any other regulatory body, and consultation on legal
matters, for the Debtor with regard to the amounts due the Internal
Revenue Service.
The Debtor estimates fees for the services will be less than
$5,000. NEORR & Associates requests a retainer in the amount of
$2,500.
Eric Orr, a consultant at NEORR & Associates, assures the court
that the firm is a disinterested person within the meaning of 11
U.S.C. Sec. 101(14) and holds no interest adverse to the estate.
The firm can be reached through:
Eric Orr
NEORR & Associates, LLC
4300 W. Lake Mary Blvd. 1010-264
Lake Mary, FL 32746
About Raynor Shine Services LLC
Raynor Shine Services, LLC is an environmental recycling company
based in Apopka, Florida. It offers mulch installation, grapple
truck services, recycle yard disposal, land clearing, grinding
services, storm recovery services.
Raynor Shine Services, LLC and Raynor Apopka Land Management, LLC
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
M.D. Fla. Lead Case No. 20-00577) on Jan. 30, 2020. The petitions
were signed by Henry E. Moorhead, CRO. At the time of filing,
Raynor Shine Services was estimated to have $10 million to $50
million in both assets and liabilities and Raynor Apopka Land
Management was estimated to have $1 million to $10 million in both
assets and liabilities. Frank M. Wolff, Esq. at Latham Luna Eden &
Beaudine LLP, serves as the Debtors' counsel. Moss, Krusick &
Associates, LLC, has been tapped as accountant.
REMINGTON OUTDOOR: $13M Sale of Business Assets to Roundhill Okayed
-------------------------------------------------------------------
Judge Clifton R. Jessup, Jr. of the U.S. Bankruptcy Court for the
Eastern District of Kentucky authorized Remington Outdoor Co.,
Inc., and its affiliated debtors to sell all their assets used in
the manufacture, design, marketing and sale of shotguns, rifles,
handguns and modular firearms and related components and
accessories other than the Marlin Business, to Roundhill Group, LLC
for $13 million cash, plus assumption of the Assumed Liabilities,
subject to adjustments, pursuant to their Asset Purchase Agreement,
dated as of Sept. 26, 2020.
The Sale Hearing was held on Sept. 29, 2020.
The Debtors are further authorized to pay, without further order of
the Court, whether before, at, or after the Closing, any reasonable
expenses or costs that are required to be paid to consummate the
Transactions or perform their obligations under the APA.
Except for the Permitted Liens, the Assumed Liabilities or as
expressly provided in the APA, upon the Closing and the Debtors'
receipt of the Purchase Price, the Acquired Assets will be
transferred to the Buyer free and clear of all Interests, with all
such Interests to attach to the proceeds of the Sale.
On Closing, the Buyer will (a) pay the Purchase Price to the
Debtors; (b) pay the Cure Costs as more fully described in the Sale
Order and the APA; (c) assume the Assumed Liabilities; and (d)
perform any other obligations required to be performed by Buyer on
the Closing.
Within three business days of the Debtors' receipt of the Net Sale
Proceeds from the sale of the Acquired Assets, the Debtors will pay
the Net Sale Proceeds of the Acquired Assets to the Priority Term
Loan Agent, for the account of the Priority Term Loan Secured
Creditors, to the extent required under and in accordance with the
terms of the Cash Collateral Order or such other order of the
Court.
The Debtors will pay the Net Sale Proceeds from the sale of the
Acquired Assets to the FILO Agent, for the account of the FILO Term
Loan Secured Creditors, to the extent required under and in
accordance with the terms of the Cash Collateral Order or such
other order of the Court. For the avoidance of doubt, any further
payment to the FILO Agent will be subject to orders previously
entered by this Court and any further orders of the Court or
provided under the Debtors' Chapter 11 plan.
The Debtors' sale, assumption and assignment to the Buyer of the
Assigned Contracts is approved. The Buyer will be responsible for
the satisfaction of the Assumed Liabilities under the Asset
Purchase Agreement, including without limitation the Buyer's Cure
Amount arising under the Assigned Contracts.
Huntsman Holdings, LLC and Century Arms, Inc. are approved as the
Backup Bidders, and the APA submitted by Roundhill and Century, the
sale of the Acquired Assets and consummation of the Sale to the
Backup Bidders are approved as the Backup Bid. The Backup Bids on
the terms set forth in the Backup Bid Agreements are approved and
authorized as Backup Bids and will remain open as Backup Bids
pursuant to the terms of the Bidding Procedures Order and the bid
terms submitted at the Auction.
In the event that the Successful Bidder cannot or refuses to
consummate the Sale because of a breach or failure on the part of
the Successful Bidder, the Backup Bidder will be deemed the new
Successful Bidder and the Debtors will be authorized, but not
directed, to close, and take all actions necessary to close, with
the Backup Bidder on the Backup Bid without further order of the
Court, and in such case the findings and other provisions of the
Sale Order will apply to the Backup Bidder and the Backup Bid
Agreement to the same extent they do with respect to the Buyer and
the Asset Purchase Agreement.
Notwithstanding the provisions of Bankruptcy Rules 6004(h) and
6006(d), the Sale Order will not be stayed for 14 days after its
entry and will be effective immediately upon entry, and the parties
are authorized to close the transaction immediately upon entry of
the Sale Order. Time is of the essence in closing the transactions
referenced, and the parties intend to close the transactions as
soon as practicable.
The Sale Order is a final, appealable order and the period in which
an appeal must be filed will commence upon its entry.
All issues raised by Oracle America, Inc. in its objection are
expressly reserved. The Oracle Objection may be set for hearing on
an expedited basis upon the request of Oracle and/or the Debtors.
To the extent any molds and tooling manufactured by Oneida Molded
Plastics, LLC are included in the Acquired Assets, any lien of
Oneida on the Acquired Mold Product will be released and will
attach to the proceeds thereof with the same priority, extent,
validity, avoidability and enforceability as Oneida's lien, if any,
on the Acquired Mold Product.
Notwithstanding anything to the contrary in the Order or the APA,
the Debtors do not purport to assume or assign to the Buyer the
license agreement dated as of Jan. 23, 2008 between Magpul
Industries Corp. and the Debtors, and nothing in the Order limits
or otherwise modifies, to the extent such license exists, any
express or implied license granted by the Debtors to Magpul in
connection with Magpul’s production of accessories for the
Debtors' firearm products or any rights or defenses of the Debtors
in connection therewith, including any right of revocation and any
right to assign their rights in connection therewith to the Buyer.
A copy of the APA is available at https://tinyurl.com/ybpb7xsm from
PacerMonitor.com free of charge.
About Remington Outdoor Company
Based in Madison, North Carolina, Remington Outdoor Company, Inc.
-- https://www.remingtonoutdoorcompany.com/ -- manufactures and
markets firearms, ammunition, and related products for commercial,
military, and law enforcement customers worldwide. The company
operates through two segments, Firearms and Ammunition.
Remington Outdoor Company, Inc., and its affiliates filed their
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ala. Lead Case No. 20-81688) on July 27, 2020.
The petitions were signed by Ken D'Arcy, chief executive officer.
At the time of filing, the Debtors estimated $100 million to $500
million in both assets and liabilities.
Stephen H. Warren, Esq. and Karen Rinehart, Esq. at O'MELVENY &
MYERS LLP represent the Debtors as general bankruptcy counsel.
Derek F. Meek, Esq. and Hanna Lahr, Esq. at BURR & FORMAN LLP stand
as the Debtors' local counsel.
AKIN GUMP STRAUSS HAUER & FELD LLP is the Advisor to the
Restructuring Committee. M-III ADVISORY PARTNERS, LP is the
Debtors' financial advisor, while DUCERA PARTNERS LLC, stands as
the Debtors' investment banker. PRIME CLERK LLC is the Debtors'
notice, claims & balloting agent.
REMINGTON OUTDOOR: $30.5M Sale of Barnes Bullet Business Assets OKd
-------------------------------------------------------------------
Judge Clifton R. Jessup, Jr. of the U.S. Bankruptcy Court for the
Eastern District of Kentucky authorized Remington Outdoor Co.,
Inc., and its affiliated debtors to sell substantially all assets
related to their Barnes Bullets brand to Sierra Bullets, L.L.C. for
$30.5 million cash, subject to adjustments, pursuant to their Asset
Purchase Agreement, dated as of Sept. 26, 2020.
The Sale Hearing was held on Sept. 29, 2020.
The Debtors are further authorized to pay, without further order of
the Court, whether before, at, or after the Closing, any reasonable
expenses or costs that are required to be paid to consummate the
Transactions or perform their obligations under the APA.
Except for the Permitted Liens, the Assumed Liabilities or as
expressly provided in the APA, upon the Closing and the Debtors'
receipt of the Purchase Price, the Acquired Assets will be
transferred to the Buyer free and clear of all Interests, with all
such Interests to attach to the proceeds of the Sale.
On Closing, the Buyer will (a) pay the Purchase Price to the
Debtors; (b) pay the Cure Costs as more fully described in the Sale
Order and the APA; (c) assume the Assumed Liabilities; and (d)
perform any other obligations required to be performed by Buyer on
the Closing.
Within three business days of the Debtors' receipt of the Net Sale
Proceeds from the sale of the Acquired Assets, the Debtors will pay
the Net Sale Proceeds of the Acquired Assets to the Priority Term
Loan Agent, for the account of the Priority Term Loan Secured
Creditors, to the extent required under and in accordance with the
terms of the Cash Collateral Order or such other order of the
Court.
The Debtors will pay the Net Sale Proceeds from the sale of the
Acquired Assets to the FILO Agent, for the account of the FILO Term
Loan Secured Creditors, to the extent required under and in
accordance with the terms of the Cash Collateral Order or such
other order of the Court. For the avoidance of doubt, any further
payment to the FILO Agent will be subject to orders previously
entered by this Court and any further orders of the Court or
provided under the Debtors' Chapter 11 plan.
The Debtors' sale, assumption and assignment to the Buyer of the
Assigned Contracts is approved. The Buyer will be responsible for
the satisfaction of the Assumed Liabilities under the Asset
Purchase Agreement, including without limitation the Buyer's Cure
Amount arising under the Assigned Contracts.
Barnes Acquisition LLC is approved as the Backup Bidder, and the
APA submitted by Barnes, the sale of the Acquired Assets and
consummation of the Sale to the Backup Bidder are approved as the
Backup Bid. The Backup Bid on the terms set forth in the Backup
Bid
Agreement is approved and authorized as a Backup Bid and will
remain open as a Backup Bid pursuant to the terms of the Bidding
Procedures Order and the bid terms submitted at the Auction.
In the event that the Successful Bidder cannot or refuses to
consummate the Sale because of a breach or failure on the part of
the Successful Bidder, the Backup Bidder will be deemed the new
Successful Bidder and the Debtors will be authorized, but not
directed, to close, and take all actions necessary to close, with
the Backup Bidder on the Backup Bid without further order of the
Court, and in such case the findings and other provisions of the
Sale Order will apply to the Backup Bidder and the Backup Bid
Agreement to the same extent they do with respect to the Buyer and
the Asset Purchase Agreement.
Notwithstanding the provisions of Bankruptcy Rules 6004(h) and
6006(d), the Sale Order will not be stayed for 14 days after its
entry and will be effective immediately upon entry, and the parties
are authorized to close the transaction immediately upon entry of
the Sale Order. Time is of the essence in closing the transactions
referenced, and the parties intend to close the transactions as
soon as practicable.
The Sale Order is a final, appealable order and the period in which
an appeal must be filed will commence upon its entry.
All issues raised by Oracle America, Inc. in its objection are
expressly reserved. The Oracle Objection may be set for hearing on
an expedited basis upon the request of Oracle and/or the Debtors.
A copy of the APA is available at https://tinyurl.com/y9zrpbug from
PacerMonitor.com free of charge.
About Remington Outdoor Company
Based in Madison, North Carolina, Remington Outdoor Company, Inc.
-- https://www.remingtonoutdoorcompany.com/ -- manufactures and
markets firearms, ammunition, and related products for commercial,
military, and law enforcement customers worldwide. The company
operates through two segments, Firearms and Ammunition.
Remington Outdoor Company, Inc., and its affiliates filed their
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ala. Lead Case No. 20-81688) on July 27, 2020.
The petitions were signed by Ken D'Arcy, chief executive officer.
At the time of filing, the Debtors estimated $100 million to $500
million in both assets and liabilities.
Stephen H. Warren, Esq. and Karen Rinehart, Esq., at O'MELVENY &
MYERS LLP represent the Debtors as general bankruptcy counsel.
Derek F. Meek, Esq. and Hanna Lahr, Esq. at BURR & FORMAN LLP stand
as the Debtors' local counsel.
AKIN GUMP STRAUSS HAUER & FELD LLP is the Advisor to the
Restructuring Committee. M-III ADVISORY PARTNERS, LP, is the
Debtors' financial advisor, while DUCERA PARTNERS LLC, stands as
the Debtors' investment banker. PRIME CLERK LLC is the Debtors'
notice, claims & balloting agent.
REMINGTON OUTDOOR: $30M Sale of Marlin Business to Sturm Approved
-----------------------------------------------------------------
Judge Clifton R. Jessup, Jr., of the U.S. Bankruptcy Court for the
Eastern District of Kentucky authorized Remington Outdoor Co.,
Inc., and its affiliated debtors to sell all their assets used in
the design, development, testing, manufacture, marketing, sale and
distribution of Marlin brand products (including discontinued
products and those yet to be launched) using the Marlin name, to
Sturm, Ruger & Co., Inc. for $30 million cash, subject to
adjustments, pursuant to their Asset Purchase Agreement, dated as
of Sept. 26, 2020.
The Sale Hearing was held on Sept. 29, 2020.
The Debtors are further authorized to pay, without further order of
the Court, whether before, at, or after the Closing, any reasonable
expenses or costs that are required to be paid to consummate the
Transactions or perform their obligations under the APA.
Except for the Permitted Liens, the Assumed Liabilities or as
expressly provided in the APA, upon the Closing and the Debtors'
receipt of the Purchase Price, the Acquired Assets will be
transferred to the Buyer free and clear of all Interests, with all
such Interests to attach to the proceeds of the Sale.
On Closing, the Buyer will (a) pay the Purchase Price to the
Debtors; (b) pay the Cure Costs as more fully described in the Sale
Order and the APA; (c) assume the Assumed Liabilities; and (d)
perform any other obligations required to be performed by Buyer on
the Closing.
Within three business days of the Debtors' receipt of the Net Sale
Proceeds from the sale of the Acquired Assets, the Debtors will pay
the Net Sale Proceeds of the Acquired Assets to the Priority Term
Loan Agent, for the account of the Priority Term Loan Secured
Creditors, to the extent required under and in accordance with the
terms of the Cash Collateral Order or such other order of the
Court.
The Debtors will pay the Net Sale Proceeds from the sale of the
Acquired Assets to the FILO Agent, for the account of the FILO Term
Loan Secured Creditors, to the extent required under and in
accordance with the terms of the Cash Collateral Order or such
other order of the Court. For the avoidance of doubt, any further
payment to the FILO Agent will be subject to orders previously
entered by this Court and any further orders of the Court or
provided under the Debtors' Chapter 11 plan.
The Debtors' sale, assumption and assignment to the Buyer of the
Assigned Contracts is approved. The Buyer will be responsible for
the satisfaction of the Assumed Liabilities under the Asset
Purchase Agreement, including without limitation the Buyer's Cure
Amount arising under the Assigned Contracts.
Long Range Acquisition, LLC is approved as the Backup Bidder, and
the APA it submitted, the sale of the Acquired Assets and
consummation of the Sale to the Backup Bidder is approved as the
Backup Bid. The Backup Bid on the terms set forth in the Backup
Bid Agreement is approved and authorized as a Backup Bid and will
remain open as a Backup Bid pursuant to the terms of the Bidding
Procedures Order and the bid terms submitted at the Auction.
In the event that the Successful Bidder cannot or refuses to
consummate the Sale because of a breach or failure on the part of
the Successful Bidder, the Backup Bidder will be deemed the new
Successful Bidder and the Debtors will be authorized, but not
directed, to close, and take all actions necessary to close, with
the Backup Bidder on the Backup Bid without further order of the
Court, and in such case the findings and other provisions of the
Sale Order will apply to the Backup Bidder and the Backup Bid
Agreement to the same extent they do with respect to the Buyer and
the Asset Purchase Agreement.
Notwithstanding the provisions of Bankruptcy Rules 6004(h) and
6006(d), the Sale Order will not be stayed for 14 days after its
entry and will be effective immediately upon entry, and the parties
are authorized to close the transaction immediately upon entry of
the Sale Order. Time is of the essence in closing the transactions
referenced, and the parties intend to close the transactions as
soon as practicable.
The Sale Order is a final, appealable order and the period in which
an appeal must be filed will commence upon its entry.
All issues raised by Oracle America, Inc. in its objection are
expressly reserved. The Oracle Objection may be set for hearing on
an expedited basis upon the request of Oracle and/or the Debtors.
A copy of the APAs is available at https://tinyurl.com/yadu7kae
from PacerMonitor.com free of charge.
About Remington Outdoor Company
Based in Madison, North Carolina, Remington Outdoor Company, Inc.
-- https://www.remingtonoutdoorcompany.com/ -- manufactures and
markets firearms, ammunition, and related products for commercial,
military, and law enforcement customers worldwide. The company
operates through two segments, Firearms and Ammunition.
Remington Outdoor Company, Inc., and its affiliates filed their
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ala. Lead Case No. 20-81688) on July 27, 2020.
The petitions were signed by Ken D'Arcy, chief executive officer.
At the time of filing, the Debtors estimated $100 million to $500
million in both assets and liabilities.
Stephen H. Warren, Esq. and Karen Rinehart, Esq. at O'MELVENY &
MYERS LLP represent the Debtors as general bankruptcy counsel.
Derek F. Meek, Esq. and Hanna Lahr, Esq. at BURR & FORMAN LLP stand
as the Debtors' local counsel.
AKIN GUMP STRAUSS HAUER & FELD LLP is the Advisor to the
Restructuring Committee. M-III ADVISORY PARTNERS, LP is the
Debtors' financial advisor, while DUCERA PARTNERS LLC, stands as
the Debtors' investment banker. PRIME CLERK LLC is the Debtors'
notice, claims & balloting agent.
REMINGTON OUTDOOR: Sale of Lonoke Ammunition Business & IP Approved
-------------------------------------------------------------------
Judge Clifton R. Jessup, Jr. of the U.S. Bankruptcy Court for the
Eastern District of Kentucky authorized Remington Outdoor Co.,
Inc., and its affiliated debtors to sell their Lonoke Ammunition
business and certain of their intellectual property to Vista
Outdoor, Inc., pursuant to their Asset Purchase Agreement, dated as
of Sept. 26, 2020.
At least five Business Days prior to the Closing Date, ROC will
deliver to the Buyer a reasonably detailed statement setting forth
ROC's good faith calculation (i) the Estimated Inventory Amount, as
well as the resulting Estimated Inventory Amount Excess (if any) or
Estimated Inventory Amount Shortfall (if any), as the case may be,
and (ii) the Estimated Purchase Price.
The Sale Hearing was held on Sept. 29, 2020.
The Debtors are further authorized to pay, without further order of
the Court, whether before, at, or after the Closing, any reasonable
expenses or costs that are required to be paid to consummate the
Transactions or perform their obligations under the APA.
Except for the Permitted Liens, the Assumed Liabilities or as
expressly provided in the APA, upon the Closing and the Debtors'
receipt of the Purchase Price, the Acquired Assets will be
transferred to the Buyer free and clear of all Interests, with all
such Interests to attach to the proceeds of the Sale.
On Closing, the Buyer will (a) pay the Purchase Price to the
Debtors; (b) pay the Cure Costs as more fully described in the Sale
Order and the APA; (c) assume the Assumed Liabilities; and (d)
perform any other obligations required to be performed by Buyer on
the Closing.
Within three business days of the Debtors' receipt of the Net Sale
Proceeds from the sale of the Acquired Assets, the Debtors will pay
the Net Sale Proceeds of the Acquired Assets to the Priority Term
Loan Agent, for the account of the Priority Term Loan Secured
Creditors, to the extent required under and in accordance with the
terms of the Cash Collateral Order or such other order of the
Court.
The Debtors will pay the Net Sale Proceeds from the sale of the
Acquired Assets to the FILO Agent, for the account of the FILO Term
Loan Secured Creditors, to the extent required under and in
accordance with the terms of the Cash Collateral Order or such
other order
of the Court. For the avoidance of doubt, any further payment to
the FILO Agent will be subject to orders previously entered by this
Court and any further orders of the Court or provided under the
Debtors' Chapter 11 plan.
The Debtors' sale, assumption and assignment to the Buyer of the
Assigned Contracts is approved. The Buyer will be responsible for
the satisfaction of the Assumed Liabilities under the Asset
Purchase Agreement, including without limitation the Buyer's Cure
Amount arising under the Assigned Contracts.
SIG Sauer, Inc. is approved as the Backup Bidder, and the APA
submitted by Barnes, the sale of the Acquired Assets and
consummation of the Sale to the Backup Bidder are approved as the
Backup Bid. The Backup Bid on the terms set forth in the Backup
Bid Agreement is approved and authorized as a Backup Bid and will
remain open as a Backup Bid pursuant to the terms of the Bidding
Procedures Order and the bid terms submitted at the Auction.
In the event that the Successful Bidder cannot or refuses to
consummate the Sale because of a breach or failure on the part of
the Successful Bidder, the Backup Bidder will be deemed the new
Successful Bidder and the Debtors will be authorized, but not
directed, to close, and take all actions necessary to close, with
the Backup Bidder on the Backup Bid without further order of the
Court, and in such case the findings and other provisions of the
Sale Order will apply to the Backup Bidder and the Backup Bid
Agreement to the same extent they do with respect to the Buyer and
the Asset Purchase Agreement.
Notwithstanding the provisions of Bankruptcy Rules 6004(h) and
6006(d), the Sale Order will not be stayed for 14 days after its
entry and will be effective immediately upon entry, and the parties
are authorized to close the transaction immediately upon entry of
the Sale Order. Time is of the essence in closing the transactions
referenced, and the parties intend to close the transactions as
soon as practicable.
The Sale Order is a final, appealable order and the period in which
an appeal must be filed will commence upon its entry.
All issues raised by Oracle America, Inc. in its objection are
expressly reserved. The Oracle Objection may be set for hearing on
an expedited basis upon the request of Oracle and/or the Debtors.
Notwithstanding anything to the contrary in the Order or the APA,
the Debtors do not purport to assume or assign to the Buyer the
license agreement dated as of Jan. 23, 2008 between Magpul
Industries Corp. and the Debtors, and nothing in the Order limits
or otherwise modifies, to the extent such license exists, any
express or implied license granted by the Debtors to Magpul in
connection with Magpul’s production of accessories for the
Debtors' firearm products or any rights or defenses of the Debtors
in connection therewith, including any right of revocation and any
right to assign their rights in connection therewith to the Buyer.
A copy of the APA is available at https://tinyurl.com/y8y3rk3a from
PacerMonitor.com free of charge.
About Remington Outdoor Company
Based in Madison, North Carolina, Remington Outdoor Company, Inc.
-- https://www.remingtonoutdoorcompany.com/ -- manufactures and
markets firearms, ammunition, and related products for commercial,
military, and law enforcement customers worldwide. The company
operates through two segments, Firearms and Ammunition.
Remington Outdoor Company, Inc., and its affiliates filed their
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ala. Lead Case No. 20-81688) on July 27, 2020.
The petitions were signed by Ken D'Arcy, chief executive officer.
At the time of filing, the Debtors estimated $100 million to $500
million in both assets and liabilities.
Stephen H. Warren, Esq. and Karen Rinehart, Esq. at O'MELVENY &
MYERS LLP represent the Debtors as general bankruptcy counsel.
Derek F. Meek, Esq. and Hanna Lahr, Esq. at BURR & FORMAN LLP stand
as the Debtors' local counsel.
AKIN GUMP STRAUSS HAUER & FELD LLP is the Advisor to the
Restructuring Committee. M-III ADVISORY PARTNERS, LP is the
Debtors' financial advisor, while DUCERA PARTNERS LLC, stands as
the Debtors' investment banker. PRIME CLERK LLC is the Debtors'
notice, claims & balloting agent.
REMINGTON OUTDOOR: Vista Outdoor Named Successful Bidder
--------------------------------------------------------
Vista Outdoor Inc., a global designer, manufacturer and marketer of
products in the outdoor sports and recreation markets, on Sept. 28
disclosed that it has been named a successful bidder in the auction
process conducted in connection with Remington Outdoor Company,
Inc.'s ("ROC's") Chapter 11 bankruptcy cases pending in the United
States Bankruptcy Court for the Northern District of Alabama. As a
result, Vista Outdoor will acquire certain assets related to ROC's
ammunition and accessories businesses, including ROC's ammunition
manufacturing facility in Lonoke, Arkansas and related intellectual
property, including the Remington brand and trademarks. Vista
Outdoor has agreed to pay a gross purchase price of $81.4 million
for the assets to be acquired, subject to certain customary closing
adjustments. The transaction is subject to the approval of the
United States Bankruptcy Court for the Northern District of Alabama
at a hearing currently scheduled for September 29, 2020, and other
customary closing conditions.
"Remington ammunition and accessories have a storied role in
America's sporting heritage, with a legacy dating back to 1816,"
said Chris Metz, Vista Outdoor Chief Executive Officer. "We are
excited and honored to add the iconic Remington brand and green box
to Vista Outdoor's portfolio of ammunition brands, and Remington
accessories to our portfolio of Hunting and Shooting Accessories.
The Remington brand is beloved by hunting and shooting sports
enthusiasts everywhere and we look forward to restoring it to
greatness by leveraging Vista Outdoor's scale, manufacturing
infrastructure, distribution channels and Centers of Excellence.
"We see a clear path to value creation. With our deep expertise
and resources, we can transform Remington's ammunition and
accessories businesses to create a more efficient, profitable and
sustainable operation. At the same time, by rescuing the Remington
ammunition businesses from bankruptcy, we will protect hundreds of
jobs, support wildlife and habitat conservation and ensure that
hunting and shooting sports enthusiasts can continue to purchase
their favorite ammunition and accessories. We look at this
acquisition as a means of better serving millions of consumers with
the products they love from one of the country's original and
best-known brands, while furthering Vista Outdoor's mission of
being a powerhouse of passionate outdoor sports and recreation
brands," Metz added.
For calendar year 2019, aggregate net sales by the Remington
ammunition and accessories brands were approximately $200 million.
Vista Outdoor expects the transaction to be accretive to earnings,
excluding transaction and transition costs, in Fiscal Year 2022.
Vista Outdoor will be using cash on hand and available liquidity
under its asset-based revolving credit facility to complete this
transaction. Assuming court approval is received as anticipated,
Vista Outdoor expects to close the transaction early in the third
quarter of FY21. Remington's other business units, including its
firearms businesses, will be purchased by other bidders in the
auction and operated independently from Vista Outdoor following the
closing of those acquisitions.
About Vista Outdoor Inc.
Vista Outdoor (NYSE: VSTO) -- http://www.vistaoutdoor.com-- is a
global designer, manufacturer and marketer of consumer products in
the outdoor sports and recreation markets. The Company has a
portfolio of well-recognized brands that provides consumers with a
wide range of performance-driven, high-quality and innovative
products for individual outdoor recreational pursuits. Vista
Outdoor products are sold at leading retailers and distributors
across North America and worldwide.
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.
REMORA PETROLEUM: Targets Oct. 21 Confirmation of Plan
------------------------------------------------------
Remora Petroleum, L.P. and its Affiliated Debtors filed with the
U.S. Bankruptcy Court for the Southern District of Texas, Houston
Division, a motion for entry of an order scheduling the Disclosure
Statement Hearing and scheduling Confirmation Hearing.
On August 13, 2020, Judge David R. Jones ordered that:
* September 15, 2020 at 3:00 p.m. in Room 400 of the United
States Bankruptcy Court for the Southern District of Texas, 515
Rusk Street, Houston, TX 77002 is the Disclosure Statement Hearing
at which time this Court will consider, among other things, the
adequacy of the Disclosure Statement.
* October 21, 2020 at 9:30 a.m. in Room 400 of the United States
Bankruptcy Court for the Southern District of Texas, 515 Rusk
Street, Houston, TX 77002 is the Confirmation Hearing at which time
this Court will consider, among other things, the confirmation of
the Plan.
* September 11, 2020 is fixed as the last day to file any
responses or objections to the adequacy of the Disclosure
Statement.
* October 16, 2020 is fixed as the last day to file any
responses or objections to the confirmation of the Plan.
* September 14, 2020 at 4:00 p.m. is fixed as the last day for
Debtors to file any briefs in support of adequacy of the Disclosure
statement or reply briefs in response to any objections.
A full-text copy of the order dated August 13, 2020, is available
at https://tinyurl.com/yyqyqpje from PacerMonitor.com at no
charge.
Proposed Counsel for the Debtors:
HUNTON ANDREWS KURTH LLP
Timothy A. (“Tad”) Davidson II (TX Bar No. 24012503)
Joseph P. Rovira (TX Bar No. 24066008)
Catherine A. Diktaban (TX Bar No. 24109810)
600 Travis Street, Suite 4200
Houston, Texas 77002
Tel: (713) 220-4200
Fax: (713) 220-4285
Email: taddavidson@huntonak.com
josephrovira@huntonak.com
cdiktaban@huntonak.com
About Remora Petroleum
The Debtors engage in the exploration, development, production and
acquisition of conventional oil and gas assets, with a focus on
assets that are heavy on proved developed producing ("PDP")
reserves. Since the Debtors formation in 2011, they have acquired
assets in a variety of locations.
The Debtors filed Chapter 11 Petition (Bankr. S.D. Tex. Lead Case
No. 20-34037) on August 12, 2020. Hon. David R. Jones oversees the
case.
At the time of filing, the Debtors have $10 million to $50 million
estimated assets and $50 million to $100 million estimated
liabilities.
REVACH VENTURE: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Revach Venture LLC
1420 East 22nd Street
Brooklyn, NY 11210
Case No.: 20-43534
Chapter 11 Petition Date: September 30, 2020
Court: United States Bankruptcy Court
Eastern District of New York
Judge: Hon. Elizabeth Stong
Debtor's Counsel: Fred B. Ringel, Esq.
ROBINSON BROG LEINWAND GREENE GENOVESE &
GLUCK P.C.
875 Third Avenue
New York, NY 10022
Tel: (212) 603-6300
Email: fbr@robinsonbrog.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Shmelka Guttman, sole member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/2XHR7DA/Revach_Venture_LLC__nyebke-20-43534__0001.0.pdf?mcid=tGE4TAMA
RONNA'S RUFF: Plan Exclusivity Extended Thru November 23
--------------------------------------------------------
The Honorable Thomas P. Agresti of the U.S. Bankruptcy Court for
the Western District of Pennsylvania has extended for an additional
90 days Ronna's Ruff Bark Trucking, Inc.'s exclusivity period to
file a bankruptcy-exit plan from August 24, 2020, to November 23,
2020.
The Debtor said an extension will put it in a better position to
evaluate the use of its trucks/equipment once the full impact of
the economic downturn due to the COVID-19 pandemic is clear, and
determine which items may be sold or surrendered.
The extension, the Debtor added, will track the extension set forth
in the Third Stipulation Extending Use of Cash Collateral entered
into with S & T Bank, which will allow the Debtor to make
interest-only payments for three more months -- an ample time to
allow the Debtor to continue to negotiate with S&T Bank so that it
is able to formulate a consensual and feasible Chapter 11 Plan.
About Ronna's Ruff Bark Trucking
Ronna's Ruff Bark Trucking, Inc., is a privately held company in
the skidding logs business.
Ronna's Ruff Bark Trucking, based in Shippenville, Pa., filed a
Chapter 11 petition (Bankr. W.D. Pa. Case No. 19-11167) on Nov. 25,
2019. In the petition signed by Erick Merryman, the owner, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities.
The Honorable Thomas P. Agresti is the presiding judge. Michael S.
JanJanin, Esq., at Quinn Buseck Leemhuis Toohey & Kroto, Inc.,
serves as bankruptcy counsel. No committee, examiner, or trustee
has been appointed in the case.
ROSEGOLD HOTELS: Holiday Hospitality Objects to Plan Disclosures
----------------------------------------------------------------
Holiday Hospitality Franchising, LLC, objects to the Disclosure
Statement for Plan of Reorganization filed by Debtor Rosegold
Hotels, LLC.
HHF claims that the Disclosure Statement lacks adequate information
regarding the assumption of the License Agreement and necessary
cure. HHF will consent to assumption of the License Agreement
provided the monetary fees are paid, the Guest Love default is
preserved, and the clarifications are addressed.
HHF points out that the Disclosure Statement lacks adequate
information regarding the possible rejection and termination of the
License Agreement. There is no explanation in the Disclosure
Statement about the requirement that any new buyer must apply for
and obtain a new license agreement, which may or may not be
approved in HHF's sole and absolute discretion.
HHF asserts that the Disclosure Statement and Plan should clarify
that the Guaranty on the License Agreement is unaffected by
confirmation. The Plan should unambiguously provide that the
rights of HHF under the Guaranty is not being and cannot be altered
or enjoined, and there is no exculpation for the Guarantor
regarding the License Agreement.
A full-text copy of HHF's objection dated August 18, 2020, is
available at https://tinyurl.com/y3b8fslq from PacerMonitor at no
charge.
HHF is represented by:
David A. Wender
ALSTON & BIRD LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309-3424
Telephone: (404) 881-7000
Facsimile: (404) 881-7777
E-mail: david.wender@alston.com
- and -
Leib M. Lerner
ALSTON & BIRD LLP
333 S. Hope Street, 16th Fl.
Los Angeles, CA 90071
About Rosegold Hotels LLC
Rosegold Hotels LLC, d/b/a Holiday Inn Express Eunice, is a
privately held company in the traveler accommodation industry. It
filed a Chapter 11 bankruptcy petition (Bankr. E.D. Tex. Case No.
20-40502) on Feb. 19, 2020. In the petition signed by Rukshanda
Hasham, managing member, the Debtor was estimated to have between
$1 million and $10 million in both assets and liabilities. Joyce
W. Lindauer, Esq., Attorney at Law & Mediator, represents the
Debtor.
ROSEGOLD HOTELS: West Town Bank Objects to Disclosure Statement
---------------------------------------------------------------
West Town Bank & Trust objects to the Disclosure Statement for Plan
of Reorganization filed by Debtor Rosegold Hotels, LLC.
West Town claims that the Debtor has not provided a narrative of
its business model or business plan prior to this filing so that
the creditors can obtain an accurate picture of Debtor prior to the
bankruptcy filing and determine whether or to what extent this
model/plan has changed or would be successful in the future.
West Town points out that while the Disclosure Statement assigns
values to assets, it provides no detail of the bases of these
values. At a minimum, Debtor should be required to explain the
basis for its $2.1 million valuation of the real estate and
improvements.
West Town states that the Debtor identified a claim of one Jules
Slim in the amount of $80,000 stating it was on account of a
"Mechanics lien/Statutory lien." The Disclosure Statement is
devoid of any facts evidencing or detailing this claim.
West Town asserts that the projections of Debtor illustrate that it
does not really have a plan for its anticipated future. The Debtor
should be required to provide the creditor constituency with the
specific factual bases that support these projections as well as
its actual business plan, if any, for the next five years that may
support these projections.
West Town would object to any market test or auction in conjunction
with confirmation of the Plan, but for purposes of the Disclosure
Statement it presently objects to the process as stated because it
lacks specificity and would not provide a true market test.
A full-text copy of West Town's objection dated August 18, 2020, is
available at https://tinyurl.com/y5evymkj from PacerMonitor at no
charge.
West Town is represented by:
KESSLER & COLLINS
Howard C. Rubin
E-mail: hrubin@kesslercollins.com
Daniel P. Callahan
E-mail: dcallahan@kesslercollins.com
2100 Ross Avenue, Suite 750
Dallas, Texas 75201
Tel: (214) 379-0722
Fax: (214) 373-4714
About Rosegold Hotels LLC
Rosegold Hotels LLC, d/b/a Holiday Inn Express Eunice, is a
privately held company in the traveler accommodation industry. It
filed a Chapter 11 bankruptcy petition (Bankr. E.D. Tex. Case No.
20-40502) on Feb. 19, 2020. In the petition signed by Rukshanda
Hasham, managing member, the Debtor was estimated to have between
$1 million and $10 million in both assets and liabilities. Joyce
W. Lindauer, Esq., Attorney at Law & Mediator, represents the
Debtor.
SCIENTIFIC GAMES: Tim Throsby to Serve as Independent Director
--------------------------------------------------------------
Tim Throsby will join Scientific Games Corporation's Board of
Directors as a new independent director effective Oct. 1, 2020. The
Scientific Games Board will comprise nine directors, the majority
of whom are independent.
Mr. Throsby brings decades of executive financial leadership and
business growth and development experience to Scientific Games. He
most recently served as CEO of Barclays Bank Plc and president of
Barclays International where he designed and executed a
comprehensive restructuring to help transform the performance and
culture of the organization. Under Mr. Throsby's leadership,
Barclays Bank Plc doubled its return on tangible equity (ROTE) over
a US$20 billion top line portfolio of businesses.
"We are delighted to have a financial leader of Tim's caliber join
our Board," said Jamie Odell, executive chair of Scientific Games.
"Tim brings extraordinary financial and operational leadership
experience. I'm confident Scientific Games will greatly benefit
from his expertise as we continue to execute on our strategy to
drive growth across our business and unlock value for our
stakeholders."
Mr. Odell continued, "With Tim's appointment and our recent
governance enhancements, Scientific Games is moving forward from a
position of strength with a refreshed, independent Board. We are
focused on optimizing our portfolio, deleveraging our business, and
capitalizing on the dynamic growth across our industry as key
markets continue to reopen."
"Scientific Games has a strong team and compelling opportunity to
capture substantial market opportunity in the expanding digital
gaming and sports betting ecosystem," said Mr. Throsby. "I look
forward to working closely with Jamie, CEO Barry Cottle, the Board
and management team during this important time in the Company's
evolution and supporting its efforts to deliver sustainable growth
and shareholder value."
Mr. Throsby's appointment follows Scientific Games' disclosure that
the Company would appoint an additional independent non-executive
director in connection with its Sept. 14, 2020 announcement that a
number of long-term institutional investors, including highly
credentialed gaming industry investor Caledonia, reached agreement
to acquire a 34.9% stake in the Company. As part of the
transaction, the Company is implementing certain governance
enhancements and refreshment to its board. Mr. Throsby's
appointment follows the appointment of Executive Chair Jamie Odell
and Executive Vice Chair Toni Korsanos.
About Scientific Games
Based in Las Vegas, Nevada, Scientific Games Corporation
(NASDAQ:SGMS) -- http://www.scientificgames.com/-- is a developer
of technology-based products and services and associated content
for the worldwide gaming, lottery, social and digital gaming
industries. Its portfolio of revenue-generating activities
primarily includes supplying gaming machines and game content,
casino-management systems and table game products and services to
licensed gaming entities; providing instant and draw-based lottery
products, lottery systems and lottery content and services to
lottery operators; providing social casino solutions to retail
consumers and regulated gaming entities, as applicable; and
providing a comprehensive suite of digital RMG and sports wagering
solutions, distribution platforms, content, products and services.
Scientific Games reported a net loss of $118 million for the year
ended Dec. 31, 2019, compared to a net loss of $352 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$7.84 billion in total assets, $10.32 billion in total liabilities,
and a total stockholders' deficit of $2.48 billion.
SEMILEDS CORP: Stockholders Pass All Proposals at Annual Meeting
----------------------------------------------------------------
SemiLeds Corporation held its Annual Meeting on Sept. 25, 2020, at
which the stockholders:
(a) elected Trung T. Doan, Walter Michael Gough, Dr. Edward
Hsieh, Roger Lee, and Scott R. Simplot as directors;
(b) ratified the appointment of KCCW Accountancy Corp as the
Company's independent registered public accounting firm
for the fiscal year ending Aug. 31, 2020; and
(c) approved the Amended SemiLEDs Corporation 2010 Equity
Incentive Plan to increase the authorized share reserve by
an additional 400,000 shares.
About SemiLEDs
Headquartered in Miao-Li County, Taiwan, R.O.C., SemiLEDs --
http://www.semileds.com/-- develops and manufactures LED chips and
LED components for general lighting applications, including street
lights and commercial, industrial, system and residential lighting,
along with specialty industrial applications such as ultraviolet
(UV) curing, medical/cosmetic, counterfeit detection, horticulture,
architectural lighting and entertainment lighting.
SemiLEDs reported a net loss of US$3.56 million for the year ended
Aug. 31, 2019, compared to a net loss of US$2.98 million for the
year ended Aug. 31, 2018. As of May 31, 2020, the Company had
$14.67 million in total assets, $12.04 million in total
liabilities, and $2.63 million in total equity.
KCCW Accountancy Corp, in Diamond Bar, California, the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Nov. 20, 2019, citing that the Company incurred
recurring losses from operations and has an accumulated deficit,
which factors raise substantial doubt about its ability to continue
as a going concern.
SIERRA ENTERPRISES: S&P Affirms 'B-' ICR; Outlook Negative
----------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on Sierra
Enterprises LLC and removed it from CreditWatch, where S&P placed
it with negative implications on March 31, 2020.
S&P said, "At the same time, we are affirming all of our
issue-level ratings, including our 'B-' rating on its first-lien
senior secured facilities (including a $35 million first-lien
revolver due November 2022 and a $282 million first-lien term loan
due November 2024) and removing them from CreditWatch. Our '3'
recovery rating on the senior secured debt is unchanged, indicating
our expectation for average (50%-70%; rounded estimate: 55%)
recovery for lenders in a default scenario."
The negative outlook reflects the risk that cash flows could become
constrained by a slower economic recovery than we currently
forecast. This could jeopardize the company's ability to
significantly improve its operating performance and moderate its
high leverage over the next 12-18 months.
Sierra's adjusted leverage could decline below 6.5x in 2021
following a spike this year, assuming the effects of the pandemic
subside. Sierra's sales declined 26% in the third quarter of fiscal
2020, which S&P considers to be the trough of the pandemic's
impact, due to a significant decline in order volumes from
foodservice and quick service restaurant (QSR) customers. Although
stay-at-home orders and social-distancing measures resulted in a
sharp drop in sales and profitability in the latter half of March
and April, performance improved sequentially each month since
April. Traffic at the QSR customers recovered most quickly as a
result of increased takeout and delivery activity and its sales to
this channel improved to comparable levels to the prior-year period
in June.
Sierra's variable cost base and cost-reduction efforts gave the
company incremental flexibility to address the economic pressures
from the pandemic. Management has implemented cost-cutting
measures, including laying off employees, reducing overtime and
temporary labor, and cutting back on travel and brokerage expenses.
Raw material purchase volumes were also drastically reduced in
response to lower production requirements.
While according to the company its adjusted EBITDA declined by 97%
in the month of April compared to the prior-year period, EBITDA was
only 4% below prior-year levels in June. This sequential
improvement in operating performance has caused us to update our
base-case assumptions for 2020 and 2021. S&P said, "We now assume
mid-single-digit-percentage decline in total revenues in 2020
versus high—single-digit-percentage decline expected previously.
We believe Sierra's EBITDA will continue to improve over the next
several quarters. Our EBITDA margin forecast assumes that some of
the cost cuts (salary and staff reductions and brokerage expense
reductions) that Sierra made over the past few months will remain
in place through 2021, particularly if demand remains soft."
S&P said, "We forecast Sierra's adjusted debt to EBITDA will be
close to 8x and EBITDA coverage of interest expense will be in the
high-1x area in 2020, compared with 7.7x and 2.2x, respectively in
2019. In 2021, we believe the company can strengthen credit
metrics, including leverage declining to 6.0x-6.5x and EBITDA to
interest increasing to the mid-2x area.
"Although we expect Sierra's cash flow to improve in 2020, we
project its free operating cash flow (FOCF) will be negligible
after accounting for its substantial growth capital expenditure
(capex). We now expect Sierra to generate in excess of $30 million
of operating cash flow in 2020. This projection incorporates the
benefits from the company's efforts to preserve liquidity by
focusing on working capital management that includes reducing
inventory of some raw materials, extending payment terms with
suppliers, halting early payment programs with suppliers, and
limiting customer payment terms extensions. The company has also
deferred some of its consulting projects and reduced capital
expenditures in the underlying Lyons Magnus business. We recognize
that some of the working capital-related measures are temporary and
therefore, we expect cash flow generation to be weaker in 2021
driven by the reversal of some working capital benefits,
particularly the buildup of inventory levels in line with higher
sales volumes and normalization of supplier payment terms. Based on
these assumptions, we expect the underlying business to generate
FOCF of more than $20 million in 2020, albeit this will decline
significantly in 2021."
Sierra has maintained its plan of building out the Lyons Magnus
North (Tru) facilities, which will support
high-single-digit-percent revenue growth, once complete. While the
capex requirements related to Tru do not encumber the company's
core business (as they were prefunded by incremental debt raised in
2019), these investments will continue to drain the company's
excess cash balances. S&P said, "We forecast that capex
requirements and working capital usage for the expansion of Tru
facilities will be in the $25 million-$30 million range over the
next 12 months. Therefore, we expect Sierra to generate negligible
free cash flow in 2020, which will decline further in 2021."
Sierra has adequate liquidity to navigate through the economic
downturn over the next 12 months. Sierra had $84 million of cash on
hand, which includes $31 million of proceeds from the drawdown of
the revolving credit facility that was undrawn as of June 30, 2020.
The company has no substantial debt maturities until November 2022.
S&P said, "We expect Sierra will repay the revolver as performance
slowly improves on an economic recovery. The revolver has a
springing maximum 6.25x net leverage financial maintenance covenant
that goes into effect when more than 33% of the facility is
outstanding. The company's draw on the revolver means that the
covenant was triggered as of the quarter ending March 2020. We
expect the company to have sufficient cushion under this covenant
(about 25%) at the end of fiscal 2020; however, if the fallout from
COVID-19 restrictions were to extend past our assumed timeline,
worsening our earnings expectations, the company could begin to
face covenant pressures."
The negative outlook reflects the risk that Sierra's cash flow
could become constrained because of the current challenging
environment, and that a slower-than-expected economic recovery
could jeopardize the company's ability to significantly grow its
EBITDA and reduce debt over the next 12-18 months.
S&P said, "We could lower our rating if we believe the company will
be unable to grow its EBITDA sufficiently over the next 12-18
months, thereby keeping leverage elevated and increasing the risk
that the capital structure becomes unsustainable. We could also
lower the rating if EBITDA interest coverage falls to the low-1x
area or if the company's liquidity weakens. This could result from
a slower-than-expected economic recovery, or if the company faces
higher input costs that it is not able to offset with price
increases. This could also occur if the company incurs
higher-than-expected implementation costs related to its Tru
expansion initiatives.
"We could revise the outlook to stable if the company exhibits
consistent revenue and EBITDA growth, moderates leverage, and we
believe that it is likely that the company will maintain annual
FOCF above $10 million. An outlook revision to stable would also be
predicated on the company executing its Tru capacity expansion
without excessive cost overruns and on time, including
substantially ramping up sales by the second quarter of fiscal
2021."
SIGMA LOGISTICS: Projects 2.88% Recovery for Unsecureds in Plan
---------------------------------------------------------------
Sigma Logistics Inc. filed with the U.S. Bankruptcy Court for the
Northern District of Georgia, Atlanta Division, a Plan of
Reorganization and a Disclosure Statement on Aug. 14, 2020.
Class 9 will consist of General Unsecured Claims, including
deficiency claims. The Debtor will pay general unsecured creditors
(1) a pro rata share of $10,000 to be paid on the first anniversary
of the Effective Date, and (2) a pro rata share of $10,000 to be
paid on the second anniversary of the Effective Date. The Debtor
anticipates and projects but does not warrant the 2.88% total
distribution to Holders of Class 9 Claims. The Claims of the Class
9 Creditors are impaired by the Plan and the holders of Class 9
Claims are entitled to vote to accept or reject the Plan.
Class 11 consists of the Interest Claims. In the event the
Unsecured Creditors (Class 9) vote to accept the Plan as class then
David Houston (40%), Newburn Houston (10%), Ronald Jefferson (10%)
and Tarrence Houston (40%) will each retain their respective
interest of the share in Debtor.
In the event Unsecured Creditors do not vote to accept the Plan,
then all pre-petition interests in the Debtor shall be cancelled.
In this event, (i) David Houston shall purchase 40% of the shares
in Debtor on the Effective Date (ii) Newburn Houston shall purchase
10% of the shares in Debtor on the Effective Date (iii) Ronald
Jefferson shall purchase 10% of the shares in Debtor on the
Effective Date and (iv) Tarrence Houston shall purchase 40% of the
shares in Debtor on the Effective Date to fund any administrative
expense claims, or otherwise fund claims in accordance with the
priorities set forth in the Bankruptcy Code, for the greater of:
(i) $15.00 per percentage interest (i.e. $15,000 total); or (ii)
such other amount as shall be approved at the Confirmation Hearing.
Any Effective Date contribution by the principals of Debtor shall
constitute "new value." New value is the vehicle through which
current equity holders purchase the equity interest of the Debtor.
At the time of filing, the Debtor had 14 of its 22 trucks occupied.
Currently, the Debtor has 19 trucks occupied. The remaining three
trucks have required engine rebuilds, which typically cost
approximately $20,000 each. The Debtor has worked diligently to
completely these during the bankruptcy and anticipates filling
these trucks within the next couple of months from the date of this
filing, thus producing maximum freight occupancy. With the
additional freight and equipment capacity, the debtor will be able
to meet all obligations.
The source of funds for the payments pursuant to the Plan is the
continued operation of the Business.
A full-text copy of the Disclosure Statement dated August 14, 2020,
is available at https://tinyurl.com/yyoajdzr from PacerMonitor at
no charge.
Attorneys for the Debtor:
Thomas T. McClendon
Leslie M. Pineyro
Jones & Walden, LLC
699 Piedmont Ave NE
Atlanta, Georgia 30308
Tel: (404) 564-9300
About Sigma Logistics
Sigma Logistics, Inc. is a full service logistics provider that
specializes in dedicated operations. It is equipped to warehouse
dry products and transport both dry and refrigerated products.
Sigma Logistics filed for Chapter 11 bankruptcy protection (Bankr.
N.D. Ga. Case No. 19-69496) on Dec. 4, 2019. In its petition, the
Debtor was estimated to have $500,000 to $1 million in assets and
$1 million to $10 million in liabilities. The petition was signed
by Tarrance Houston, authorized representative. Judge Paul Baisier
oversees the case. The Debtor is represented by Leslie M. Pineyro,
Esq., at Jones & Walden, LLC.
SIX FLAGS: S&P Lowers ICR to 'B-', Outlook Negative
---------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
regional theme park operator Six Flags Entertainment Corp. by two
notches to 'B-' from 'B+' and removed its ratings on the company
from CreditWatch, where S&P placed them with negative implications
on March 13, 2020, because it materially reduced its assumed
recovery pace for its attendance, revenue, and EBITDA. In S&P's
view, this will delay the expected improvement in the company's
credit measures and cause it to burn cash through 2021.
S&P said, "At the same time, we are lowering our issue-level rating
on Six Flags' senior secured notes and senior secured credit
facility by two notches to 'B' from 'BB-' and our issue-level
rating on its existing senior unsecured notes by two notches to
'CCC' from 'B-'.
"The negative outlook reflects the possibility we could lower our
rating on Six Flags if its recovery is slower than we currently
assume and its revenue, EBITDA, and cash flow underperform our
base-case assumptions such that we believe its capital structure
may be unsustainable.
"The downgrade reflects the substantial reduction in our base-case
assumptions for a recovery in Six Flags' attendance, revenue, and
EBITDA, which leads us to anticipate that its leverage could remain
very high through 2021. We assume COVID-19 will remain a threat
until a vaccine or effective treatment becomes widely available,
which could occur around mid-2021. Therefore, we lowered our
attendance assumptions for Six Flags' parks to reflect our forecast
that its visitation may not begin to recover until its seasonally
important third quarter in 2021. However, we anticipate that the
company's attendance will remain substantially below its 2019
attendance levels in 2021. The 'B-' issuer credit rating reflects
our expectation that the company's EBITDA will be only modestly
positive while its leverage remains very high through 2021. In
addition, we expect Six Flags to burn significant amounts of cash
in both 2020 and 2021. Furthermore, we expect that the company's
leverage could remain very high, potentially as high as 6.5x-7.0x
in 2022, following a presumed partial recovery in its attendance
beginning in the second half of 2021. Although we preliminarily
estimate that Six Flags' leverage will be below our 7.5x upgrade
threshold in 2022, there is too much uncertainty around its
performance and we do not expect it to have a large enough cushion
to support a higher rating given the limited visibility.
"We believe the company's regional theme parks may face an extended
period of depressed demand through 2021 because of consumer fears
around entering public spaces due to COVID-19 until there is a
vaccine or effective medical treatment. Although Six Flags has
reopened some of its parks, its attendance levels remain very
depressed and are lower than we had previously assumed because of
cautious consumer behavior among its target family segments,
discomfort with wearing masks for extended periods in warm outdoor
weather, and its implementation of social distancing measures. To
preserve its liquidity, Six Flags has trimmed its planned capital
expenditure significantly below historical levels. While we would
typically view its diminished capital spending as potentially
impairing the historically high asset quality of its parks or
deterring a rebound in its attendance, we anticipate its asset base
can probably weather a couple of years of low capital spending. The
company has chosen to extend the privileges of its 2020 season pass
holders through the end of the 2021 season. This extension could
benefit its customer retention and quicken the recovery in its
attendance by encouraging pass holders to return to its parks
sooner, although this will depend on how consumers respond to
safety measures to limit the spread of the virus next summer if a
vaccine is not widely distributed by then. Due to this extension,
the company will likely forgo some 2021 season pass revenue.
Partially offsetting these risk factors are the company's portfolio
of drive-to assets, which may recover faster than
destination-oriented properties due to consumer aversion to air
travel amid the pandemic. Additionally, regional theme parks have
historically exhibited some resiliency in recessions due to a shift
in consumer preference toward lower-cost and closer-to-home
experiences.
"We believe Six Flags will have adequate liquidity through 2021.
As of June 30, 2020, Six Flags had about $296 million of
unrestricted cash on hand and $481 million available under its
revolving credit facility. We assume the company will burn an
average of about $25 million-$30 million per month over the next
six months while its parks remain closed before its cash burn
begins to moderate as it reopens its parks in 2021. We also expect
that it has sufficient liquidity to weather its cash burn at the
current rate until the end of 2021, if necessary. Six Flags also
has no material debt maturities until 2024, which provides it with
some cushion against credit market volatility. Additionally, the
company generated substantial cash flow from its operations prior
to the pandemic. If Six Flags' attendance begins to recover
following the release of a widely distributed medical solution to
COVID-19, we believe it could generate positive cash flow from
operations in 2022. We view the company's geographically diverse
portfolio of high-quality assets as positioning it to begin
reducing its leverage following a presumed recovery from the
pandemic."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
S&P said, "The negative outlook reflects the possibility we could
lower our rating on Six Flags if its recovery is slower than we
currently assume and its revenue, EBITDA, and cash flow
underperform our base-case assumptions such that we believe its
capital structure may be unsustainable.
"We would likely lower our rating on Six Flags if it underperforms
our current base case and is unable to generate sufficient cash
flows to sustain its capital structure. We could also lower our
ratings if its ongoing cash burn reduces its liquidity below levels
we consider to be adequate.
"It is unlikely that we will revise our outlook on Six Flags to
stable for the duration of the pandemic. However, we could raise
our ratings on the company over the longer term if we believe it
will sustain leverage of less than 7.5x."
STANLEY C. CHESTNUT: $125K Cash Sale of Goldsboro Property Approved
-------------------------------------------------------------------
Judge Joseph N. Callaway of the U.S. Bankruptcy Court for the
Eastern District of North Carolina authorized Stanley Claxton
Chestnut's private sale of one parcel of real estate described as
709 NC 581 Hwy. S., Goldsboro, North Carolina, NC PIN 2670644527,
consisting of .43 acres, more or less, and being more particularly
described in that deed recorded Book 1259, Page 519, Wayne County
Registry, to N Projects, LLC for $124,900, cash.
The sale is free and clear of all liens, claims, encumbrances,
rights, and interests of record, and all valid and enforceable
liens, claims, and interests in the Property attach to the Net
Proceeds of the sale.
Beth Hines, the real estate agent, is allowed reasonable and
necessary compensation from the gross sales proceeds in the amount
of $6,245 to be paid at closing;
The Debtor is authorized to execute such documents and instruments
as necessary to effectuate the sale.
The Buyer will not have any responsibility for any liabilities or
obligations of the Debtor, whether in rem or in personam.
A copy of the Offer is available at https://tinyurl.com/y4379map
from PacerMonitor.com free of charge.
Stanley Claxton Chestnut sought Chapter 11 protection (Bankr. E.D.
N.C. Case No. 19-00698) on Feb. 15, 2019. The Debtor tapped David
F. Mills, Esq., as counsel.
TAILORED BRANDS: Committee Taps Back Bay Management as Consultant
-----------------------------------------------------------------
The official committee of unsecured creditors of Tailored Brands,
Inc. seeks authority from the U.S. Bankruptcy Court for the
Southern District of Texas to retain Back Bay Management
Corporation and its division, The Michel-Shaked Group as its expert
valuation consultant, and Brad Orelowitz as its expert valuation
witness.
The committee seeks to retain Back Bay Management for the purpose
of providing expert consulting services and, if requested by the
committee, providing one or more expert opinions and reports, and,
if necessary, deposition or trial or hearing testimony: (a) in any
litigation or contested matter regarding the valuation of the
Debtors or certain of the Debtors, including as to solvency issues;
and (b) where expert testimony regarding the valuation of the
Debtors or certain of the Debtors, including as to solvency issues,
may otherwise be requested by the committee.
Back Bay Management's current range of standard hourly rates are:
Senior Vice Presidents $650
Paraprofessionals $175
Mr. Orelowitz's standard hourly rate is $650.
Mr. Orelowitz disclosed in court filings that the firm and its
personnel do not have any connection with the Debtors, creditors or
other "parties in interest."
The firm can be reached at:
Brad Orelowitz
Back Bay Management Corporation
The Michel-Shaked Group
2 Park Plaza, Suite 500
Boston, MA 02116
Phone: 617-426-4455
Fax: 617-426-6555
Email: borelowitz@michel-shaked.com
About Tailored Brands
Tailored Brands, Inc., (NYSE: TLRD) is an omni-channel specialty
retailer of menswear, including suits, formalwear and a broad
selection of polished and business casual offerings. It delivers
personalized products and services through its convenient network
of over 1,400 stores in the United States and Canada as well as its
branded e-commerce websites at http://www.menswearhouse.com/and
http://www.josbank.com. Its brands include Men's Wearhouse, Jos.
A. Bank, Moores Clothing for Men and K&G.
Tailored Brands reported a net loss of $82.28 million for the year
ended Feb. 1, 2020, compared to net earnings of $83.24 million for
the year ended Feb. 2, 2019. As of Feb. 1, 2020, the Company had
$2.42 billion in total assets, $2.52 billion in total liabilities,
and a total shareholders' deficit of $98.31 million.
On Aug. 2, 2020, Tailored Brands and its subsidiaries sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33900) on
Aug. 2, 2020. As of July 4, 2020, Tailored Brands disclosed
$2,482,124,043 in total assets and $2,839,642,691 in total
liabilities.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker L.L.P., Stikeman Elliot LLP and Mourant
Ozannes as co-bankruptcy counsel; PJT Partners LP as financial
advisor; Alixpartners, LLP as restructuring advisor; and A&G Realty
Partners, LLC as the real estate consultant and advisor. Prime
Clerk LLC is the claims agent.
On August 11, 2020, the Office of the United States Trustee
appointed the Committee pursuant to section 1102 of the Bankruptcy
Code. The Committee tapped Pachulski Stang Ziehl & Jones LLP as
its lead counsel.
TAYLOR BUILDING: $11.1K Sale of Forklift to Wilson Confirmed
------------------------------------------------------------
Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the
Western District of Pennsylvania confirmed Taylor Building
Products, LLC's private sale of its Genie GTH-844 Telehandler
Forklift, Serial Number 10596, to Wilson Excavating Services, LLC
for $11,100.
A video hearing held via the Zoom Video Conference Application on
the Motion was held on Sept. 30, 2020 at 10:00 a.m.
The liens, claims and interests of the Respondents, if any, are
transferred to the proceeds of sale. The sale is free, clear and
divested of said liens, claims and interests.
After due notice to the claimants, lien creditors, and interest
holders, and no objection having been made or, if made,
resolved/overruled, the incidental and related costs of sale and of
the within bankruptcy proceeding, will be paid in advance of any
distribution to said lien creditors, if any. The Buyer will be
responsible for any and all sales tax associated with the sale as
well as any and all costs associated with the transfer of title to
said Forklift.
The sale of the Forklift will be a sale of the Forklift in "as is,
where is," condition, without representations or warranties of any
kind whatsoever.
The Buyer will be responsible for all costs of repair, if any, to
the Forklift.
The Buyer will remit payment to the counsel for the DIP, Spence,
Custer, Saylor, Wolfe & Rose, LLC.
The sale proceeds will be disbursed in accordance with the
Complaint.
The Movant will serve a copy of the within Order on each Respondent
(i.e., each party against whom relief is sought) and its attorney
of record, if any, upon any attorney or party who answered the
motion or appeared at the hearing, the attorney for the Debtor, the
Purchaser, and the attorney for the Purchaser, if any, and file a
certificate of service.
The closing will occur within 30 days of the Order and the Movant
will file a report of sale within seven days following closing.
About Taylor Building Products
Taylor Building Products LLC, a privately held company that
provides concrete building products, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No.
19-70426) on July 15, 2019. At the time of the filing, the Debtor
was estimated to have assets of between $1 million and $10 million
and liabilities of the same range. Judge Jeffery A. Deller
oversees the case. Spence, Custer, Saylor, Wolfe & Rose, LLC is
the Debtor's bankruptcy counsel.
TEMPUR SEALY: Fitch Assigns 'BB' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has assigned first-time ratings to Tempur Sealy
International, Inc. (TPX) and Tempur-Pedic Management, LLC,
including Long-Term Issuer Default Ratings (IDR) of 'BB'. Fitch has
assigned 'BB'/'RR4' ratings to TPX's senior unsecured notes and
'BB+'/'RR1' ratings to TPX's senior secured revolving credit
facility and senior secured term loan. Tempur-Pedic Management, LLC
is an additional borrower under the senior secured facility and
term loan. The Rating Outlook is Stable.
TPX's ratings reflect its leading market position as a vertically
integrated global bedding company with well-known, established
brands across a wide variety of price points offered through broad
distribution channels. The ratings are tempered by the single
product focus in a highly competitive, fragmented market that is
exposed to potential pullbacks in discretionary consumer spending
during periods of macroeconomic weakness. The mattress industry has
been susceptible to periods of irrational pricing, secular shifts
in consumer preferences and bankruptcies in both the supplier and
distribution side, leading to volatility in TPX top line and EBITDA
performance over the past few years.
Fitch expects strong organic revenue growth in the second half of
2020 driven by retail distribution expansion and increased consumer
home spending, resulting in EBITDA based on Fitch adjustments in
the low $600 million range, and FCF of $250 million to $300 million
for 2020. Fitch expects EBITDA to moderate to the mid $500 million
range beginning 2021 on potential revenue pullback against tough
comparisons with FCF sustained above $250 million. Gross leverage
(total debt to operating EBITDA after associates and minorities) is
expected below 2.5x in 2020 but trend toward the mid-to-upper 2x
range in 2021. Over time, Fitch expects the company to manage
leverage within its targeted range with gross leverage less than
3x, diverting FCF towards shareholder returns and opportunistic
acquisitions.
KEY RATING DRIVERS
Leading Global Position: TPX maintains a strong market position
that leverages a distribution model operating through an
omni-channel strategy across both wholesale and direct channels for
a portfolio of well-known, established brands with a wide variety
of price points, anchored by the Tempur-Pedic brand. The wholesale
channel, including third party distribution, hospitality and
healthcare represented 87.5% of net sales in 2019 while
company-owned stores, e-commerce and call centers and represented
12.5% of net sales. The company benefits from global
diversification with approximately 18% of sales are in
international markets with the remainder in North America.
The mattress industry has been susceptible to periods of irrational
pricing, secular shifts in consumer preferences and bankruptcies in
both the supplier and distribution side. Over the past few years,
TPX faced intense competition from the e-commerce/"bed-in-a-box"
space (i.e. Casper, Amazon, other mattress e-tailers) as sales have
increased rapidly from this segment during the past five years,
reaching roughly 10% of industry sales. In addition to offering
convenience, attractively-priced e-commerce mattresses have fueled
price competition in the industry. TPX has responded by selling its
own low-price "bed-in-a-box," called Sealy-to-go, a mid-level
product called Cocoon by Sealy and a premium offering named Tempur
Cloud, and expanding offerings on its e-commerce platform.
To ensure ongoing success, TPX must maintain a strong innovation
pipeline that requires product line refreshes every three to five
years with on-trend product innovation supported by significant
investments in marketing and promotion to sustain its competitive
position. The Tempur-Pedic and Steans & Foster lines were
completely refreshed in 2019 while Sealy is in the fourth year of
its current product line.
Past Earnings Volatility: TPX experienced earnings pressure in 2017
and 2018 with EBITDA (based on Fitch adjustments) declining to
around $400 million from approximately $500 million driven by the
distribution loss of the Mattress Firm contract and competitive
landscape pressures. In January 2017, TPX terminated the contract
with its largest customer Mattress Firm, which accounted for
approximately $670 million in revenue or approximately 21% of 2016
revenue - due to disagreement on contract terms.
Consequently, TPX focused on expanding distribution to existing and
new retailers and channels, building out company-owned retail
stores, and sharpening its e-commerce strategy to recapture North
America market share following the termination of the Mattress Firm
contract. In addition, the company implemented expense management
programs and focused on improving manufacturing quality. Revenues
stabilized in 2018 and increased by approximately 15% in 2019 with
EBITDA growing to $480 million.
Market Share Gains Driving Growth: Prior to the Coronavirus
pandemic, TPX experienced strong top-line growth that was
broad-based, across multiple distribution channels driven primarily
by the expansion of the retail distribution network supported by
strong North American share gains of the higher margin Tempur-Pedic
brand. In June 2019, following Mattress Firm's emergence out of
bankruptcy in late 2018, TPX re-entered into supply agreements with
Mattress Firm, the largest specialty mattress retailer in North
America, to reintroduce its product lines in 2,500 stores beginning
4Q19. TPX also announced an expansion of its supply agreement with
Big Lots, a 1,400-store retailer to grow entry level Sealy
products. TPX also experienced direct channel growth in excess of
55% in 2019 reflecting increases in ecommerce sales, same-store
sales and company-owned locations.
Manageable Near-term Coronavirus Implications: TPX effectively
managed sharp top-line declines due to store closures in late March
and April as the company shifted a portion of sales to the
e-commerce channel combined with aggressive cost cutting actions.
TPX's cost structure is highly variable at roughly three-quarters
of overall costs that enabled the company flexibility to reduce
variable expenses given lower customer demand during the second
quarter. Gross margins declined by roughly 300 basis points during
2Q driven by product, brand mix and fixed cost deleverage partially
offset by decreased floor model expenses, lower commodity costs and
favorable country mix. For 2Q20, revenues declined 8% and EBITDA
based on Fitch adjustments declined 16% to $89 million.
Mattress sales rebounded strongly beginning in May, supported by
the shift in consumer spending from travel/leisure/entertainment
towards home-related purchases and government stimulus checks.
Strong consumer demand for mattresses continued into the third
quarter with demand expected to remain solid through 2020. Fitch
projects revenue and EBITDA increases for 2H20 of approximately 20%
and around 30% respectively, that would result in in full year
EBITDA, based on Fitch adjustments, in the low $600 million range.
This compares to EBITDA of $480 million in 2019.
Fitch's forecast for 2021 assumes a normalization in demand with
EBITDA moderating to the mid-$500 million range on potential
revenue pullback against tough comparisons. This is based on
Fitch's assumption of a pull forward in demand, a moderation in
consumer at-home spending, ongoing macroeconomic weakness, negative
product mix shift and competitors regaining share. There could be
upside to Fitch's forecast in the event TPX sustains improved
operating momentum supported by continued strength in consumer
spending for at-home products on a global basis, sustained market
share gains and positive product mix.
Balanced Capital Allocation: Fitch expects TPX's capital allocation
over the medium-to-longer term will be focused on capital
investments, bolt-on acquisitions and shareholder returns within
the context of maintaining its net leverage target (net
debt/EBITDA) between 2.0x and 3.0x. TPX's net leverage calculation
equates relatively similar to Fitch's gross leverage (total debt to
operating EBITDA after associates and minorities) assuming cash
levels around $50 million to $75 million.
TPX does not pay a dividend. Capital spending is expected to be in
the low $100 million range through 2021 or approximately 3% of
sales due to investments in stores, manufacturing capacity and ERP
systems with spending as a percentage of sales reverting back to
historical capital intensity levels in the low 2% range beginning
in 2022.
Fitch assumes the majority of FCF will be directed towards share
buybacks and small opportunistic bolt-on acquisitions over the
forecast period with expectations for annual FCF generation in the
range of $250 million to $300 million. While TPX has a shareholder
friendly financial policy with total share repurchases of
approximately $885 million since 2015, the company has demonstrated
a willingness to pull back share repurchase to protect its credit
profile in difficult times which occurred in 2017 following the
loss in sales related to the Mattress Firm contract termination.
TPX accelerated repurchases during the first quarter of 2020 and
repurchased approximately $200 million in shares before suspending
the program due to the coronavirus pandemic. Fitch assumes the
company will resume share buybacks in 2021 as business trends
improve in the back half of 2020.
LTM gross leverage was 3.3x as of June 30, 2020. Fitch's forecast
in 2020 projects gross leverage below 2.5x and total adjusted debt
to EBITDAR below 3.5x driven by EBITDA growth and debt repayment.
This compares to gross leverage of 3.0x in 2019 and 3.8x in 2018.
Fitch's projects gross leverage will trend toward the mid-to-upper
2x range in 2021 and total adjusted debt to EBITDAR in the
mid-to-upper 3x range based on EBITDA moderating to the mid $500
million range. TPX's strong FCF generation, which is currently
supported by no dividend, provides flexibility to manage its
leverage profile in the event of material earnings pressure.
DERIVATION SUMMARY
TPX's 'BB'/Stable ratings reflects its leading market position as a
vertically integrated global bedding company with well-known,
established brands across a wide variety of price points offered
through broad distribution channels. The ratings are tempered by
the single product focus in a highly competitive, fragmented market
that is exposed to potential pullbacks in discretionary consumer
spending during periods of macroeconomic weakness. In addition, the
mattress industry has been susceptible to periods of irrational
pricing, secular shifts in consumer preferences and bankruptcies in
both the supplier and distribution side. Fitch expects 2020 EBITDA
in the low $600 million range and FCF of $250 million to $300
million for 2020. Fitch expects EBITDA to moderate to the mid $500
million range beginning 2021 on potential revenue pullback against
tough comparisons with FCF sustained above $250 million. Gross
leverage (total debt to operating EBITDA after associates and
minorities) is expected below 2.5x in 2020 but trend toward the
mid-to-upper 2x range in 2021. Over time, Fitch expects the company
to manage leverage within its targeted range with gross leverage
less than 3x, diverting FCF towards shareholder returns and
opportunistic acquisitions.
TPX has a materially stronger financial profile compared to its
main competitor, Serta Simmons Bedding, LLC's, which is private
equity owned. Serta Simmons is experiencing financial distress and
embroiled in legal proceedings regarding a debt transaction to
inject capital and restructure a portion of its capital structure.
Similarly rated credits in Fitch's consumer portfolio include
Spectrum Brands, Inc. and ACCO Brands Corporation.
ACCO Brands Corporation's 'BB'/Stable rating reflects the company's
consistent FCF and reasonable gross leverage, which has
historically been around 3x given ongoing debt repayment post
recent acquisitions. The company has taken steps over the last few
years to manage costs, given pressures on U.S. organic growth, and
has executed well on diversifying its customer base toward higher
growth, higher-margin channels in North America, as well as
acquisitions in international markets. The ratings are constrained
by secular challenges in the office products industry and channel
shifts within the company's customer mix, as evidenced by recent
results, along with the risk of further debt-financed
acquisitions.
EBITDA in 2020 could decline toward $200 million from $290 million
in 2019 due to the coronavirus pandemic and its negative impact on
economic and scholastic activity. Leverage could climb to around
4x, improving toward the mid-3x beginning 2021 assuming EBITDA
stabilizes and continued debt reduction.
Spectrum Brands, Inc. (BB/Stable): Spectrum Brands, Inc.'s
'BB'/Stable Long-Term Issuer Default Rating (IDR) reflects the
company's diversified portfolio across products and categories with
well-known brands, and commitment to maintain leverage (net
debt/EBITDA) between 3.5x and 4.0x. This equates to a similar gross
debt/EBITDA target assuming around $150 million in cash longer
term, compared with approximately $470 million at the end of June
2020. The rating also reflects expectations for modest organic
revenue growth over the long term, reasonable profitability with an
EBITDA margin near 15%, and positive FCF.
These positive factors are offset by profit margin pressures across
segments and the company's acquisitive posture, which could cause
temporary leverage spikes. The rating also considers expected
near-term business challenges due to the impact of the coronavirus
on manufacturing capabilities, and the impact of the recession on
operating segments like hardware and home improvement.
TPX and Levi Strauss & Co. (BB/Negative) share similar distribution
strategies across specialty retailers and department stores along
with self-distribution through company-operated stores and
ecommerce with Levi having greater scale in revenues (more than $5
billion pre pandemic) and reliance on self-distribution. Levi's
ratings continue to reflect the company's position as one of the
world's largest branded apparel manufacturers, with broad channel
and geographic exposure, while also considering the company's
narrow focus on the Levi brand (around 87% of revenue) and in
bottoms (around 72% of revenue). The company benefits from its
broad distribution across department stores, specialty, mass, and
discount, in addition to self-distribution (36% of sales are
generated from company-operated stores and its online presence),
which somewhat mitigates secular challenges in the U.S. mid-tier
apparel industry. The company's financial profile improved in
recent years from a focus on expense management and more stable
constant currency revenue growth, somewhat mitigated by the
negative impact of the strengthening U.S. dollar.
Fitch anticipates a sharp increase in adjusted leverage (adjusted
debt/EBITDAR, capitalizing leases at 8x) to around 9x in fiscal
2020 (ending November 2020) from 3.1x in fiscal 2019 based on
EBITDA declining to approximately $123 million from approximately
$750 million in 2019 on a nearly 29% sales decline to $4.1 billion.
Adjusted leverage is expected to be around 4.3x in fiscal 2021,
assuming sales declines of around 15%-20% and EBITDA declines of
around 35% from 2019 levels. Fitch assumes Levi's proactive $300
million revolver draw and $500 million in debt issuance in 2020 are
repaid in fiscal 2021.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer for
2020 and 2021
-- Revenue and EBITDA increases in 2H20 of roughly 20% and around
30% respectively, resulting in 2020 revenue of approximately $3.5
billion and EBITDA in the low $600 million range. Fitch's forecast
for 2021 considers a normalization in demand causing a decline in
TPX revenue and EBITDA of approximately 4% and 9% respectively that
would result in revenue of approximately $3.4 billion and EBITDA
within the mid $500 million range.
-- Capital spending in the low $100 million range;
-- FCF generation in the range of $250 million to $300 million;
-- Excess cash utilized for bolt-on acquisitions and share
repurchases. The forecast does not assume TPX will implement a
dividend during the forecast period;
-- Gross leverage of less than 2.5x in 2020, increasing to the
mid-to-upper 2x range in 2021.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- An upgrade could be considered with sustained EBITDA levels
above $600 million driven by mid-single digit revenue growth,
sustained market share gains, demonstrated operating resiliency
through shifts in the competitive environment and economic cycles
with sustained gross leverage (total debt / operating EBITDA after
associates and minorities) under 2.5x and total adjusted
debt/operating EBITDAR below 3.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- EBITDA levels declining below $500 million caused by sales
and/or margin declines;
-- Operational weakness, debt-funded shareholder-friendly
policies or a large debt financed acquisition, absent an
appropriate plan to reduce leverage 12 to 24 months post
acquisition close, leading to sustained gross leverage above 3x and
total adjusted debt/operating EBITDAR above 4x.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Fitch views TPX's liquidity as sufficient,
supported by expectations for good FCF generation, material
available revolver capacity, cash on hand and minimal maturities.
Liquidity was $571 million as of June 30, 2020 consisting of $147
million in cash and approximately $424 million of availability
(after netting $1 million of outstanding letters of credit) on a
$425 million revolving credit facility maturing 2024. The company
also maintains an accounts receivable securitization program
maturing April 2021 that is subject to an overall limit of $120
million. TPX had availability of approximately $41 million (no
outstandings) as of June 30, 2020. TPX was in compliance with all
of its covenant requirements as of June 30, 2020.
During the second quarter 2020, TPX entered into an amendment to
the existing credit agreement that provided for a new 364-day $200
million term loan which was fully drawn at the end of the second
quarter. TPX repaid the 364-day term loan during September using
excess cash-on-hand. Long-term debt maturities through 2022 are
modest and include $21 million in annual term loan amortization.
TPX does not have a significant maturity until late 2023 when $450
million in senior notes mature.
Recovery Considerations
Fitch has assigned Recovery Ratings (RRs) to the various debt
tranches in accordance with Fitch criteria, which allows for the
assignment of RRs for issuers with IDRs in the 'BB' category. Given
the distance to default, RRs in the 'BB' category are not computed
by bespoke analysis. Instead, they serve as a label to reflect an
estimate of the risk of these instruments relative to other
instruments in the entity's capital structure. Fitch has assigned
the first-lien secured term loan and revolver an 'RR1', notched up
from the IDR and indicating outstanding recovery prospects given
default. Unsecured debt will typically achieve average recovery,
and thus was assigned an 'RR4', in line with the company's IDR.
SUMMARY OF FINANCIAL ADJUSTMENTS
Financial statement adjustments that depart materially from those
contained in the published financial statements of the relevant
rated entity or obligor are disclosed (in bullet points):
EBITDA adjusted to exclude stock-based compensation and one
time/non-ordinary charges
Operating lease expense capitalized by 8x to calculate historical
and projected lease-adjusted debt
ESG Considerations
The highest level of Environmental, Social and Governance (ESG)
credit relevance, if present, is a score of '3'. This means ESG
issues are credit neutral or have only a minimal credit impact on
the entity(ies), either due to their nature or the way in which
they are being managed by the entity(ies).
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
TOPGOLF INT'L: Moody's Hikes CFR to Caa1 & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service upgraded Topgolf International, Inc.'s
Corporate Family Rating (CFR) to Caa1 from Caa2, Probability of
Default Rating (PDR) to Caa2-PD from Caa3-PD, and the first lien
credit facility ratings (including a senior secured revolver and
term loan) to Caa1 from Caa2. The outlook was changed to stable
from negative.
The upgrade of Topgolf's ratings reflect the recent improvement in
liquidity due to $100 million of additional preferred equity with a
commitment for another $80 million in preferred equity by the end
of 2020. Additionally, the company received an amendment to obtain
covenant relief from its lenders and a small shareholder loan was
converted to preferred equity. While Topgolf will continue to be
substantially impacted by the pandemic and leverage is expected to
increase further in the near term, Moody's expects the enhanced
liquidity will better position the company to manage through the
impact of the pandemic. Future development of additional facilities
is expected to slow after existing facilities under construction
are completed to help manage liquidity.
Upgrades:
Issuer: Topgolf International, Inc.
Probability of Default Rating, Upgraded to Caa2-PD from Caa3-PD
Corporate Family Rating, Upgraded to Caa1 from Caa2
Senior Secured Bank Credit Facility, Upgraded to Caa1 (LGD3) from
Caa2 (LGD3)
Outlook Actions:
Issuer: Topgolf International, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Topgolf's Caa1 CFR reflects negative LTM EBITDA levels and very
high leverage which Moody's expects will deteriorate further in the
near term, before improving in 2021 and 2022. All of Topgolf's
locations have reopened after being closed due to the pandemic, but
are operating below normal levels. Topgolf's gameplay and food and
beverage segment are expected to recover faster than the event
business which will take longer to recover. Topgolf has expanded
the number of locations over the past several years which increases
the company's scale and geographic diversity. The venues are high
quality and typically significant in size which provides a unique
experience to its guests and materially differentiates it from
basic driving ranges and golf courses. While revenue generated from
Topgolf's venues account for most of its revenue, the company also
has several other smaller divisions including Media, Swing Suite,
Toptracer, and an international licensing division.
Topgolf's business will remain cyclical and will compete for
discretionary consumer income with an increasing array of
alternative entertainment options. The large number of pro forma
add backs to EBITDA for one-time startup costs and run rate
operating performance of new locations is also a negative. In
addition, the terms of the preferred equity, which include a
liquidity demand notice, elevates uncertainty in the future. While
operating performance is expected to improve, Moody's expects some
consumers will maintain social distancing and avoid large crowds so
a recovery to prior levels is not expected until at least 2022. The
very high leverage level will also leave Topgolf vulnerable to any
future period of underperformance or reduced consumer activity as a
result of the pandemic or weak economic conditions.
A governance consideration that Moody's considers in Topgolf's
credit profile is the company's very aggressive financial policy
historically given the development strategy of building and opening
several new facilities without a fully funded business plan. The
reduced development plan going forward and additional liquidity
provided by equity investors are expected to lead to a less
aggressive financial strategy and provide adequate liquidity,
although additional development is projected in future years after
conditions improve.
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 our ESG framework, given the substantial
implications for public health and safety. The credit profile
reflects the impact on Topgolf of the deterioration in credit
quality the pandemic has triggered, given the company's exposure to
consumer entertainment. This has left the company vulnerable to
shifts in market demand and sentiment in these unprecedented
operating conditions.
The stable outlook incorporates Moody's expectation of improving
performance but operating losses and cash usage is expected to
continue in the near term due to the coronavirus outbreak's impact
on Topgolf's attendance levels and revenues. As locations currently
under construction are opened in 2021 and existing facilities
recover Moody's projects leverage will decline toward the 7x range,
but free cash flow is expected to remain negative in the near
term.
Topgolf's liquidity position is adequate following the $100 million
of new preferred equity with another $80 million expected by the
end of 2020. Topgolf had $160 million drawn under its $175 million
revolving credit facility and $77 million of cash on the balance
sheet as of Q2 2020. Moody's expects negative free cash flow to
continue until 2022 due to the lingering disruptions caused by the
pandemic and the need to complete construction of new locations.
Topgolf recently executed an amendment that provides a covenant
waiver period through Q1 2022, but will be subject to a minimum
liquidity test of $30 million.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade is unlikely as long as the coronavirus limits the
ability to operate Topgolf's venues at normal capacity. Leverage
levels expected to be sustained below 7x, positive free cash flow
generation, and the expectation that the company would remain in
compliance with its covenants would also be required.
The ratings could be downgraded due to elevated concerns about the
potential for default or a distressed exchange arising from a
period of weak operating performance. A continuing deterioration of
the company's liquidity position or inability to obtain an
amendment to its financial covenant in the future, if needed, would
also lead to a downgrade.
Topgolf International, Inc. currently owns and operates 61 golfing
centers (58 in the US and 3 in the UK) as of September 2020 with 8
additional facilities under construction in the US. There are also
2 international franchise venues located in Australia and Mexico.
The company has a Swing Suites offering that provides a simulated
golf experience, its Toptracer golf tracking technology for
traditional driving ranges, courses and broadcasters as well as its
Media division. The company is privately owned by a group of
investors that include WestRiver Group, Providence Equity Partners,
Dundon Capital Partners, Callaway Golf and Fidelity Research and
Management. Reported revenue LTM as of Q2 20 was over $800
million.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
TRANSOCEAN LTD: S&P Raises ICR to 'CCC-' Following Debt Exchange
----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on
Switzerland-based offshore drilling contractor Transocean Ltd. to
'CCC-' from 'SD' (selective default). The outlook is negative. S&P
also raised its issue-level ratings on the company's unsecured debt
with subsidiary guarantees to 'CCC' from 'D' (recovery rating:
'2'), and its senior unsecured debt to 'CCC-' from 'D' (recovery
rating: '3').
S&P said, "At the same time, we are lowering our issue-level
ratings on Transocean's secured debt to 'CCC+' from 'B-' (recovery
rating: '1') and on its 2020 notes to 'CCC-'from 'CCC'' (recovery
rating: '3) and removing them from CreditWatch, where we placed
them with negative implications on Sept. 11, 2020."
The negative outlook reflects Transocean's unsustainable leverage,
heavy debt burden, and the likelihood of a distressed debt exchange
or restructuring.
The 'CCC-' issuer credit rating reflects the high likelihood of
additional distressed transactions. Although Transocean has
reduced total debt by nearly $1.0 billion, the company still has
$8.6 billion in total debt outstanding, versus 2019 S&P Global
Ratings-adjusted EBITDA of about $820 million. Although the company
has sufficient liquidity, S&P believes its still-elevated debt
level, combined with its depressed debt-trading levels and the weak
sector backdrop, could lead it to engage in additional transactions
that we would consider to be distressed. Current yields on the
company's medium-term unsecured notes are about 25%.
The offshore drilling industry continues to be under tremendous
stress and we expect market conditions to remain difficult for the
next several years, particularly for deepwater drilling. The
recent material drop in oil prices--kicked off by the Saudi-Russian
price war and worsened by the unprecedented drop in demand as a
result of the coronavirus pandemic--has led to sharp reductions in
oil producers' capital spending plans for 2020, which we expect to
continue through 2021. This will significantly reduce demand for
the oilfield services sector. S&P said, "We expect offshore
activity to be hit particularly hard, given the higher upfront
costs and higher operating risk for offshore projects relative to
onshore plays. Although we believe most ongoing development
projects will continue (as long as crews and supplies are
available), there have been several postponements in reaching final
investment decisions on new projects and minimal exploration
activity this year." Offshore producers will likely remain more
cautious about committing capital to longer-term projects until oil
price fundaments are more stable and prices recover, which could
affect Transocean's revenues and margins beyond the next 12
months.
S&P said, "Transocean's backlog is the strongest in the sector, but
we do not expect meaningful new work to be contracted before 2022.
As of July 15, 2020, Transocean's contract backlog was $8.9
billion, nearly 4x higher than its closest peer, providing
significant revenue visibility over the next two years.
Thirty-three of its 39 rigs have contracts through at least part of
2021, while its four newest drillships have contracts into 2026 at
well above market rates. In addition, the Deepwater Titan,
currently under construction, will commence a five-year contract
with Chevron at $455,000 per day upon delivery in the fourth
quarter of 2021, and the Deepwater Atlas has a conditional
agreement to start work for Beacon Offshore Energy in early 2022.
Yet given current oil price volatility, we do not expect many new
contracts to be signed before late 2021. Also, there is a risk of
contract cancellations or renegotiations as offshore producers
curtail their capital programs."
Liquidity remains adequate, despite Transocean's hefty capex and
debt maturity schedule over the next two years. As of June 30,
2020, Transocean had about $1.7 billion in cash (including $200
million of restricted cash earmarked for debt repayment) and nearly
full availability on its $1.3 billion revolving credit facility
maturing in 2023. These sources, along with $320 million of
estimated funds from operations (FFO) should be sufficient to cover
the estimated $1.6 billion in capital spending, and $1.2 billion in
debt maturities and amortization payments over the next two years.
The negative outlook reflects Transocean's unsustainable leverage,
heavy debt burden, and the likelihood of a distressed debt exchange
or debt restructuring within the next six months.
S&P would lower the rating if the company announced a debt exchange
or restructuring we viewed as distressed.
S&P could raise the rating if it no longer viewed a distressed debt
exchange as likely, which would most likely occur in conjunction
with a recovery in offshore drilling activity.
TRI-STATE PAIN: Court Extends Plan Exclusivity Until December 2
---------------------------------------------------------------
At the behest of Tri-State Pain Institute through its attorneys,
Marsh Schaaf, LLP, and Gary v. Skiba, Esq., Bankruptcy Judge Thomas
P. Agresti extended the period within which the Debtor has the
exclusive right to file a plan of reorganization, an explanatory
disclosure statement, and to obtain confirmation of the plan
through and including December 2, 2020.
The Debtor's operations have been affected by the Covid-19
pandemic; its staff and physicians have been reduced. Though the
Debtor's financial situation improved somewhat in recent months, it
still needs to be stabilized to the extent necessary for it to file
a plan, disclosure statement, and summary.
The Debtor will use the additional time to stabilize the
operations, and increase revenues and/or reduce expenses to be able
to file a realistic and plausible Plan for the benefit of all
concerned.
The Debtor originally sought an extension through January 20,
2021.
About Tri-State Pain Institute
Tri-State Pain Institute, LLC, sought protection under Chapter 11
of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 20-10049) on
January 23, 2020. At the time of the filing, the Debtor had
estimated assets of between $500,001 and $1 million and liabilities
of between $1,000,001 and $10 million.
Judge Thomas P. Agresti oversees the case. Marsh, Spaeder, Baur,
Spaeder, and Schaaf, LLP, is the Debtor's legal counsel.
The U.S. Trustee for Regions 3 and 9 appointed a committee of
unsecured creditors on Feb. 14, 2020. The committee was previously
represented by Knox, McLaughlin, Gornall & Sennett, P.C. On August
14, 2020, a new Official Committee of Unsecured Creditors was
appointed and is represented by Guy C. Fustine, Esq.
U.S. ANESTHESIA: S&P Alters Outlook to Negative, Affirms 'B' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S. Anesthesia Partners
Holdings Inc. (USAP) to negative from stable and affirmed its 'B'
issuer credit rating.
The negative outlook reflects the risk to the company's margin and
cash flow should the outcome with UHC be worse than what it models,
and the risk other insurers take similar actions on USAP to lower
reimbursement rates.
USAP EBITDA could be pressured further if UHC terminates in-network
contracts with other states, as well as if related cost increases.
In early 2020, UHC pushed USAP into an out-of-network relationship
in Washington state (which contributes less than 2% revenue) and
attempted to do so in Texas as well in April 2020, despite the
contract not expiring until 2021. UHC is presumably seeking to
pre-emptively reduce reimbursement rates well before the contract's
expiration date in 2021. An arbitration panel ruled in favor of
UHC, regarding UHC's motion to vacate an emergency interim order,
which effectively forced USAP out-of-network effective late July
2020, while the arbitration process continues. In addition, UHC
forced USAP out of network in Colorado, effective Sept. 1, 2020.
UHC revenue from those two states contribute 13% of USAP's total
revenue. The outlook revision reflects the risk to the company's
margin and cash flow should the outcome of the current situation
with UHC be worse than what we model (which already includes the
effect of the pandemic, and six months of the Texas UHC contract
termination), and the risk that other payers may take similar
actions on USAP to lower their reimbursement rates. S&P also
recognizes that USAP's physicians are variably compensated, which
it believes will cover about 70% of the burden from the lowered
rates, providing some degree of insulation against rate cuts.
S&P said, "Our current estimate of a 50% rate cut from UHC in Texas
and Colorado would result in revenue and EBITDA declining about
$120 million and $10 million, respectively. UHC is the source for
about 16% of USAP's total revenue. Based on historical evidence
with peers we believe a potential sizeable rate cut is possible in
Texas and Colorado. Under this scenario, we estimate revenue and
EBITDA could decline about $120 million and $10 million,
respectively. Furthermore, if UnitedHealth continues to terminate
contracts in other states representing the remaining 3% of revenue,
revenue and EBITDA could decline an additional $30 million and $5
million, respectively, assuming a similar 50% rate cut. Additional
legal and advocacy cost could add even more risk to profitability.
"We project revenue to decline in the low-teens-percent range for
2020 and to grow by mid-single-digit percent in 2021 from the
combination of low-single-digit-percent organic growth and
acquisitions. Our 2020 forecast includes a half-year effect of
the UHC contract terminations in Texas and Colorado, and estimated
pandemic impact for the year. Our 2021 forecast includes the
full-year effect from contract terminations based on our
expectation that volumes will rebound close to pre-COVID-19 levels.
Also, we expect some fluctuations in working capital. Because of
this, we expect free cash flow generation will remain low,
resulting in adjusted free cash flow to debt of 1.5-1.7% for 2020
and 2.5-3.0% for 2021, while adjusted leverage will remain high,
above 10.5x, over the next two years. We expect the company to
continue to pursue acquisitions."
Despite EBITDA pressure and higher adjusted leverage because of the
contract termination along with the effects from COVID-19,
liquidity has been adequate. As of Sept. 15, 2020, the company
had $254 million cash in hand and $200 million undrawn revolver
capacity. This will adequately cover its near-term uses, which
includes $16 million annual mandatory debt amortization, $5 million
of minimal capital expenditure (capex) spending and estimated
working capital usage of $20 million-25 million.
The negative outlook reflects the risk to the company's margin and
cash flow should the outcome with UHC be worse than what S&P
anticipates, the risk other insurers take similar actions on USAP
in order to lower the rates they pay, and if administrative
expenses related to contract negotiations are excessively high. Our
view also reflects uncertainty around the potential impact of any
new surprise billing legislation. These factors could cause
leverage to increase above 10.5x for at least two years and further
impair free operating cash flow generation.
S&P said, "We could consider a lower rating if we expect leverage
to be sustained above 11x, most likely due to United pursuing
aggressive rate reductions in additional states, or if
restructuring costs exceed our expectation. We estimate this could
cause free cash flow to debt to fall below 1.5% and EBITDA margin
to fall by 150-200 basis points (bps).
"We could revise the outlook to stable if the negative impact to
margins from the ongoing re-negotiations with United does not
exceed our expectations. In addition, we would need to believe the
company will not incur another large margin decline related to
another surge in the COVID-19 pandemic. Sustained leverage below
8x, with free cash flow exceeding $50 million and lessened downside
contractual risk would support an upside."
VIRTU FINANCIAL: Fitch Alters Outlook on BB- LT IDR to Stable
-------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) and senior secured first lien debt ratings of Virtu
Financial LLC and its debt-issuing subsidiaries, VFH Parent LLC and
Impala Borrower LLC (collectively Virtu) at 'BB-'. The Rating
Outlook has been revised to Stable from Negative. Fitch has also
affirmed and withdrawn the ratings of Orchestra Co-Issuer, Inc., as
the entity no longer exists.
The ratings were withdrawn as the bonds were repaid early.
KEY RATING DRIVERS
IDRs AND SENIOR DEBT
The Outlook revision reflects Virtu's strong operating performance
during the first six months of 2020, demonstrated ability to manage
operational and market risks despite extreme asset price
volatility, and the reduction in outstanding debt. While trading
activity has since come down from its heightened 1H20 levels, Fitch
believes Virtu will have the ability to further reduce borrowings
and/or manage operating costs such that its leverage will remain
at-or-below 2.5x on a gross debt to EBITDA basis.
The affirmation of Virtu's ratings reflects its established market
position as a technology-driven market maker across various venues,
geographies and products and improving scale and diversification
supported by the acquisitions of KCG Holdings in 2017 and
Investment Technology Group, Inc. (ITG) in 2019. Ratings also
reflect Virtu's strong operating performance, scalable business
model, experienced management team, and the expectation that Virtu
will maintain moderate leverage and reasonable liquidity in a lower
volatility environment. Additionally, Fitch believes that Virtu's
market-neutral trading strategies in highly liquid products and
extremely short holding periods minimize market and liquidity
risks.
Primary rating constraints include elevated operational risks
inherent in technology-driven trading, reliance on volatile
transactional revenue, and heightened regulatory scrutiny of
designated market making, high-frequency trading and dark pools.
Virtu's EBITDA margin is strong, at 47.3% for the trailing 12
months (TTM) ended June 30, 2020; up from an average of 31% in
2016-2019, driven by increased business volumes as a result of
market volatility in 1H20. Fitch believes Virtu's EBITDA margins
will remain in-line with or slightly above historical levels as
market volatility and trading volume subsides. Virtu is also
expected to achieve additional cost flexibility from the continued
integration of ITG's systems and processes, which were put on hold
in the midst of the coronavirus disruption. Prior to the onset of
the pandemic, execution against planned cost synergies had been
relatively good, in Fitch's view. The firm achieved $105 million in
cash cost synergies in 2019 and expected to realize a total of $155
million to $182 million by the end of 2020.
Virtu's cash flow leverage was 1.4x for the TTM ended June 30,
2020: down from 4.4x at YE19, supported by stronger earnings from
increased trading volumes and the repayment of $188 million of debt
during the first half of the year. While trading volumes are
expected to return to more normalized levels, Virtu intends to
repay an additional $100 million of debt in 3Q20, which will help
to offset the expected decline in EBITDA in a lower volatility
environment. Fitch views Virtu's stated leverage target of
2.00x-2.25x and its ability to execute on its de-leveraging plan,
following its acquisition of ITG, favorably. An inability to
maintain leverage at or below 2.5x on a sustained basis would be
viewed negatively by Fitch.
Interest coverage (adjusted EBITDA to interest expense) was 11.4x
for the TTM ended 2Q20; up from an average of 6.4x in 2016-2019.
Interest coverage will likely decline in a lower volatility
environment, but Fitch expects it to remain within-or-above Fitch's
'bb' category quantitative benchmark range for securities firms
with low balance sheet usage of 3x to 6x.
Fitch views Virtu's liquidity as adequate, as the risks of its
confidence-sensitive and predominantly secured funding profile are
partially offset by the largely liquid balance sheet. Virtu's
operating liquidity needs depend on various factors, including
exchange and counterparty collateral requirements and settlements,
which can vary with the size of Virtu's trading assets and
liabilities and market volatility. Still, these needs are generally
predictable due to Virtu's market-neutral trading strategies.
However, as a part of its execution services business, Virtu may
have to trade clients' directional portfolios, which may result in
higher margin requirements for Virtu. During 1H20, Virtu expanded
its broker-dealer borrowing capacity and entered into a $300
million committed credit facility with its key shareholder to help
fund a potential increase in margin requirements imposed by
clearing houses. The broker-dealer facilities and the shareholder
facility were unused as of June 30, 2020.
At June 30, 2020, Virtu had $670.8 million in cash and cash
equivalents to support operating activities, capital expenditures
and for general corporate purposes, as well as approximately $2.2
billion of available borrowing capacity on short-term credit
facilities at the broker dealer. The balance sheet also includes
highly liquid trading assets and liabilities, primarily securities
inventory, which could be liquidated and turned into cash, as
necessary, in a one- to three-day settlement time frame under
normal market conditions.
The secured term loan rating is equalized with Virtu's IDR,
reflecting average recovery prospects in a stress scenario.
SUBSIDIARY AND AFFILIATED COMPANIES
The ratings of VFH Parent LLC and Impala Borrower LLC and are
equalized with those of Virtu, reflecting the full ownership and
unconditional guarantee on the debt issued by those entities.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
An inability to maintain leverage at or below 2.5x on a gross
debt/adjusted EBITDA basis, a material deterioration in interest
coverage, approaching 3x, or adverse legal or regulatory actions
against Virtu, which results in a material fine, reputational
damage, or alteration in the business profile. A rating downgrade
could also result from material operational or risk management
failures, an idiosyncratic liquidity event, an inability to
maintain Virtu's market position in the face of evolving market
structures and technologies, and/or a material shift into trading
fewer liquid products.
Positive rating action is likely limited to the 'BB' rating
category given the significant operational risk inherent in
technology-driven trading.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
--Consistent operating performance and minimal operational losses
over a longer time period while maintaining cash flow leverage
consistently at-or-below 2.0x on a gross debt/adjusted EBITDA
basis.
--Increased funding flexibility, including demonstrated access to
third party funding through market cycles, could also contribute to
positive rating momentum.
The secured term loan rating is primarily sensitive to changes in
Virtu's IDR, and secondarily, to material changes in Virtu's
capital structure and/or changes in Fitch's assessment of the
recovery prospects for the debt instruments.
SUBSIDIARY AND AFFILIATED COMPANIES
The ratings of VFH Parent LLC and Impala Borrower LLC are equalized
with those of Virtu and would be expected to move in tandem.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING
The principal sources of information used in the analysis are
described in the Applicable Criteria.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
VISTA PROPPANTS: Unsecured Creditors Have 2 Options in Joint Plan
-----------------------------------------------------------------
Vista Proppants and Logistics, LLC and its subsidiaries filed the
First Amended Disclosure Statement in support of the First Amended
Joint Plan of Reorganization dated August 13, 2020.
Class 6 General Unsecured Claims. If and only if Class 6 votes to
accept the Plan, the following Treatment: On the Effective Date or
as soon as reasonably practicable thereafter, in full and final
satisfaction, compromise, settlement, release, and discharge of and
in exchange for each Allowed General Unsecured Claim, each holder
of an Allowed General Unsecured Claim shall receive its Pro Rata
share of the Litigation Trust Interests, and the Litigation Trust
shall be funded by a GUC Cash Pool in the amount of $500,000. The
GUC Cash Pool shall be utilized or distributed at the discretion of
the Litigation Trustee, subject to the terms of the Litigation
Trust.
If and only if Class 6 votes to reject the Plan, the following
Treatment: On the Effective Date or as soon as reasonably
practicable thereafter, in full and final satisfaction, compromise,
settlement, release, and discharge of and in exchange for each
Allowed General Unsecured Claim, each holder of an Allowed General
Unsecured Claim shall receive its Pro Rata share of the Litigation
Trust Interests, and the Litigation Trust shall receive no funding
for the GUC Cash Pool. The holders of Allowed Term Loan Deficiency
Claims shall not be required to waive any portion of their Allowed
Term Loan Deficiency Claims if the holders of Class 6 Claims vote
to reject the Plan.
Estimated total Allowed Class 6 Claims: Approximately $310,811,000
including aggregate trade claims of approximately $40,850,000,
aggregate rejection damages of approximately $44,961,000, and
aggregate Term Loan Deficiency Claims of $225,000,000.
Distributions under the Plan shall be funded with: (1) Cash on
hand; (2) the ABL Priority Collateral; (3) the MAALT Priority
Collateral; (4) the issuance and distribution of the New Equity
Interests; (5) the Exit Facility; (6) the GUC Cash Pool (if any);
and (7) interests in the Litigation Trust, as applicable.
A full-text copy of the first amended disclosure statement dated
August 13, 2020, is available at https://tinyurl.com/y56x39af from
PacerMonitor.com at no charge.
Proposed Counsel for the Debtors:
Stephen M. Pezanosky
Matthew T. Ferris
David L. Staab
HAYNES AND BOONE, LLP
2323 Victory Avenue, Suite 700
Dallas, TX 75219
Telephone: 214.651.5000
Facsimile: 214.651.5940
E-mail: stephen.pezanosky@haynesboone.com
E-mail: matt.ferris@haynesboone.com
E-mail: david.staab@haynesboone.com
About Vista Proppants and Logistics
Vista Proppants and Logistics, LLC -- https://www.vprop.com/ -- is
a pure-play, in-basin provider of frac sand solutions in producing
regions in Texas and Oklahoma, including the Permian Basin, Eagle
Ford Shale and SCOOP/STACK. It is headquartered in Fort Worth,
Texas.
Vista Proppants and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Tex. Lead Case No. 20-42002)
on June 9, 2020. At the time of the filing, Vista Proppants had
estimated assets of less than $50,000 and liabilities of between
$100 million and $500 million.
Judge Edward L. Morris oversees the cases.
The Debtors tapped Haynes and Boone, LLP, as their legal counsel.
The Company has retained Alvarez & Marsal North America, LLC, as
its Chief Restructuring Officer. Kurtzman Carson Consultants, LLC,
is the claims, noticing, balloting and solicitation agent.
WESTERN ROBIDOUX: Wants Plan Exclusivity Extended Thru Nov. 3
-------------------------------------------------------------
Western Robidoux, Inc., requests the U.S. Bankruptcy Court for the
Western District of Missouri to extend the exclusive periods during
which the Debtor may file a Chapter 11 plan and solicit acceptances
for the plan by 62 days to November 3, 2020, and January 3, 2021,
respectively.
Initially, in January 2020, the Debtor sought an extension of the
time to file a plan in order to liquidate the claims between it
Breht Burri, and Infodeli, LLC. That matter has been tried and
decided by the jury and the Debtor prevailed on all counts, winning
verdicts against Breht Burri for $250,000 and against Infodeli, LLC
for $250,000. A judgment has been entered on these verdicts and
Breht Burri and Infodeli, LLC has appealed.
The Covid-19 crisis materially affected the Debtor's business,
reducing the Debtor's sales and guidance of what is going to happen
in the Debtor's future performance. Despite the third time of
extension, the Debtor's situation is still the same. At the
Debtor's current level of sales, proposing a feasible
reorganization plan will be a challenge.
The Debtor note that during the fall season, its sales historically
increase; it hopes that with increased sales and with the lessening
effects of COVID-19 on its business, it will be able to demonstrate
that it can operate profitably. However, the Debtor says it is
uncertain if the increased sales will continue into the future (in
the medium term, that is, the next few months to a year) or drop.
It is the emphatic preference of the Debtor's board of directors to
reorganize and continue doing business rather than to liquidate.
The Debtor seeks the additional 62-day extension to see if the
recovery of its sales in its sales will continue and if the Debtor
can, in good faith, propose a plan which will permit it to continue
doing business and to be certain what is the best course of action
to be done in the future.
Absent an extension, the Debtor's exclusive right to file a plan of
reorganization was slated to expire on September 2, 2020, and its
exclusive right to solicit plan acceptances expires November 2.
About Western Robidoux
Western Robidoux Inc. is a family-owned commercial printing and
fulfillment company in St. Joseph, Missouri, run by the Burri
family for more than 40 years. Western Robidoux sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No.
19-50505) on Oct. 19, 2019. At the time of the filing, the Debtor
disclosed assets of between $1 million and $10 million and
liabilities of the same range.
The case is assigned to Judge Brian T. Fenimore. The Debtor is
represented by Victor F. Weber, Esq., at Merrick, Baker & Strauss,
P.C. The Debtors hired Liechti, Franken & Young as its accountant.
WHITE BIRCH: October 7 Plan Confirmation Hearing Set
----------------------------------------------------
On Aug. 12, 2020, White Birch Brewing LLC filed with the U.S.
Bankruptcy Court for the District of New Hampshire an Amended
Disclosure Statement with respect to the Plan.
On Aug. 13, 2020, Judge Bruce A. Harwood approved the Disclosure
Statement and established the following dates and deadlines:
* Sept. 30, 2020 is fixed as the last day for filing written
acceptances or rejections of the Plan.
* Sept. 30, 2020 is fixed as the last day for filing and serving
written objections to confirmation of the Plan.
* Oct. 7, 2020, at 2 p.m., at the United States Bankruptcy
Court, Courtroom A, Warren B. Rudman U.S. Courthouse, 55 Pleasant
Street, Concord, New Hampshire is the hearing on confirmation of
the Plan.
A full-text copy of the order dated August 13, 2020, is available
at https://tinyurl.com/y32lrhcu from PacerMonitor.com at no
charge.
About White Birch Brewing
White Birch Brewing LLC, a brewery company specializing in
handcrafted batches of beer, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D.N.H. Case No. 19-10622) on May 5,
2019. At the time of the filing, the Debtor had estimated assets
of less than $500,000 and liabilities of between $10 million and
$50 million. The case is assigned to Judge Bruce A. Harwood. The
Debtor is represented by Van De Water Law Offices, PLLC.
WHITE CAP: Moody's Assigns B2 CFR, Outlook Stable
-------------------------------------------------
Moody's Investors Service (Moody's) assigned a first time B2
Corporate Family Rating (CFR) and B2-PD Probability of Default
Rating to White Cap Buyer, LLC (White Cap). Moody's also assigned a
B2 rating to the proposed senior secured bank credit facility and a
Caa1 to the proposed senior unsecured notes due 2028. The outlook
is stable.
Clayton, Dubilier & Rice (CD&R), through its affiliates, is
acquiring HD Supply Inc.'s Construction and Industrial (C&I)
business, which operates as White Cap, for $2.9 billion. At the
same time CD&R will combine the C&I business with the Construction
Supply Group (CSG), a distributor of construction products and
currently owned by affiliates of The Sterling Group. The combined
entity will be the largest rated distributor in North America of a
diverse mix of concrete accessories and specialty construction and
safety products with pro forma revenue of about $4.2 billion and
significant procurement opportunities over time. Upon the closing
of both transactions, CD&R will hold a 65% ownership interest in
the combined company and The Sterling Group will hold a 35%
interest. Ownership will be in the form of common stock. White Cap
will be the surviving entity with an expected closing in October
2020.
White Cap's capital structure will consist of a $750 million asset
based revolving credit facility expiring in 2025, with the
potential of some borrowings at closing for working capital, a
senior secured bank credit facility consisting of a revolving
credit facility expiring 2025 and a $2.3 billion term loan maturing
2027, and $640 million in unsecured notes due 2028. Aggregate
commitment of revolving credit facilities will total $750 million.
Proceeds from the borrowings and an equity contribution from CD&R
will be used to purchase White Cap from HD Supply and to pay off
CSG's debt. The Sterling Group is rolling over its equity in CSG.
"Despite many strengths, such as good profitability, White Cap will
remain highly leveraged through 2021, which is a significant
constraint to the rating," according to Peter Doyle, a Moody's
VP-Senior Analyst.
The following ratings are affected by today's action:
Assignments:
Issuer: White Cap Buyer, LLC
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Senior Secured Term Loan, Assigned B2 (LGD3)
Senior Secured Multi Curr Revolving Credit Facility, Assigned B2
(LGD3)
Senior Unsecured Global Notes, Assigned Caa1 (LGD6)
Outlook Actions:
Issuer: White Cap Buyer, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
White Cap's B2 CFR reflects Moody's expectation that the company's
leverage will remain elevated over the next eighteen months.
Moody's projects adjusted debt-to-LTM EBITDA of 5.8x at fiscal
year-end 2021 and adjusted free cash flow-to-debt in the low end of
the 2% - 5% range in 2021. Debt service requirements including cash
interest payments and term loan amortization will approach $200
million per year, constraining free cash flow after required debt
payments and reducing financial flexibility. At the same time White
Cap will face challenges operating as an independent company while
integrating CSG, which is a roll-up of other distributors and
continues to integrate its own acquisitions.
Providing an offset to the White Cap's leveraged capital structure
is reasonable profitability. Moody's projects operating margin of
around 8.5% for 2021, which is the company's greatest credit
strength. Profitability will benefit from higher volumes from
growth in end markets, resulting operating leverage from that
growth and some cost saving synergies. Also, Moody's forecasts that
White Cap will have good liquidity over the next two years, which
is another key credit strength. Substantial revolver availability
and no near-term maturities provide more than ample financial
flexibility for White Cap to integrate CSG and to contend with
volatility in end markets.
The domestic construction end markets, the driver of White Cap's
revenue, are showing resiliency during the coronavirus outbreak and
resulting economic concerns. New home construction and
infrastructure combined account for about 50% White Cap's pro forma
revenue. Moody's has a stable outlook for both US Homebuilding and
Building Materials with modest growth expected in each sector.
Non-residential construction, representing approximately 45% of pro
forma revenue, is not expected to grow meaningfully. However, as a
very large distributor of building products throughout North
America, White Cap should be able to capitalize on its scale and
geographic diversity to price competitively for new wins and
benefit from significant procurement opportunities over time.
Governance characteristics we consider in White Cap's credit
profile include an aggressive financial strategy, evidenced by high
leverage. CD&R will control the company with four board seats,
including Mr. Philip Knisely as Chairman of the Board, while The
Sterling Group will have two board seats. Mr. Knisely is also
Chairman of the Board of Beacon Roofing Supply, Inc., a national
wholesale distributors of roofing material and other building
products in the US, which may divert attention from White Cap
during this transformational period. With this level of board
representation from private equity Moody's believes that leverage
will remain elevated and deleveraging will come from earnings
growth rather than a material reduction in debt. However, Moody's
also believes that management will forego acquisitions,
concentrating on operating White Cap as an independent company and
integrating CSG while striving to achieve cost savings and
synergies.
The B2 rating assigned to White Cap's senior secured bank credit
facility, the same rating as the Corporate Family Rating, results
from its subordination to company's asset based revolving credit
facility but priority of payment relative to the company's senior
unsecured notes. The bank credit facility has a first lien on
substantially all noncurrent assets and a second lien on assets
securing the company's asset based revolving credit facility (ABL
priority collateral).
The Caa1 rating assigned to the company's senior unsecured notes
due 2028, two notches below the Corporate Family Rating, results
from their subordination to the company's considerable amount of
secured debt.
The stable outlook reflects Moody's expectation that White Cap will
maintain leverage below 6.0x. A good liquidity profile and Moody's
expectation that White Cap will successfully be able to adapt to
operating as stand-alone company and integrate CSG without
impacting operations further supports the stable outlook.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade:
(All ratios incorporate Moody's standard adjustments)
-- Debt-to-LTM EBITDA is maintained near 4.5x
-- Positive trends in end markets and sustained organic growth
-- A good liquidity profile is preserved
Factors that could lead to a downgrade:
(All ratios incorporate Moody's standard adjustments)
-- Debt-to-LTM EBITDA is expected to stay above 6.0x
-- EBITA-to-interest expense is sustained below 1.5x
-- The company's liquidity profile deteriorates
White Cap Buyer LLC, headquartered in Norcross, Georgia, is a
leading North American industrial distributor of specialty
construction products. White Cap is privately owned and does not
disclose financial information publicly.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
WHITE CAP: S&P Assigns 'B' Issuer Credit Rating; Outlook Stable
---------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to White
Cap Buyer LLC. At the same time, S&P assigned its 'B' issue-level
rating and '3' recovery rating to the company's proposed first-lien
term loan due 2027. S&P also assigned its 'CCC+' issue-level rating
and '6' recovery rating to the company's proposed senior unsecured
notes due 2028.
White Cap Buyer LLC is a leading distributor of specialty concrete
and construction products and services in North America, with a
high pro forma debt load, operating in a cyclical sector. On a pro
forma basis, White Cap Buyer LLC is the largest distributor of
specialty concrete and construction products in North America. Its
servicing capabilities, well-developed market channels, and broad
supplier base provide a healthy competitive advantage in a highly
fragmented specialty construction distribution market.
White Cap Buyer LLC competes primarily with small local and
regional distributors, and to a lesser degree, broadline
distributors (Fastenal, W.W. Grainger), home centers (Home Depot,
Lowe's), and manufacturers that sell directly to customers. The
company estimates that it has a 9% market share in North America,
which S&P views as modest, in an addressable $42 billion market.
White Cap Buyer LLC's mostly small and medium-sized customer base
values a "one-stop-shop" value proposition, and the company has a
broad product portfolio across the full construction project
lifecycle, as well as fleet of delivery trucks that provide same-
or next-day jobsite delivery (something many competitors can't do).
Still, commercial and residential construction markets are highly
cyclical, and we believe the company's earnings and debt leverage
can be volatile through the business cycle.
S&P said, "We believe White Cap Buyer LLC's credit measures could
be stretched for a few quarters following the integration with CSG.
Specifically, we project the transaction will result in an S&P
Global Ratings-adjusted debt-to-EBITDA ratio of about 7x as of the
end of fiscal 2020 (ended Jan. 31, 2021, and pro forma for 12
months of CSG EBITDA). We expect White Cap Buyer LLC will
moderately grow its EBITDA and use the majority of its free
operating cash flows for making minimum required debt amortization
payments and for acquisitions. We project White Cap Buyer LLC will
maintain respectable operating performance during the recession of
2020, allowing it to moderately expand its EBITDA margin and
decrease S&P Global Ratings-adjusted debt to EBITDA to below 7x
over the next 12 months.
"We expect tuck-in acquisitions, ongoing sales initiatives, and a
modest amount of new store openings to be the primary drivers of
future revenue growth. Over the past few years, White Cap Buyer LLC
(specifically the White Cap business) has benefitted from
consistent integration of opened and acquired branches and
operations (including A.H. Harris acquisition in 2018) into a
unified nationwide platform. Post combination with CSG, we expect
White Cap Buyer LLC to continue to be acquisitive but grow through
the acquisition of mostly smaller regional and local players that
represent an 85% share of the remaining highly fragmented specialty
construction distribution market. We expect the company will
benefit from strengthening of its one-stop-shop capabilities,
pricing optimization, and cross-selling opportunities across the
integrated stores. We also expect the company will continue to gain
market share by opening several stores per year and focusing on
investments in digital capabilities (including at stores and
distribution centers). Still, the modest penetration of private
label products and the evolving e-commerce landscape (currently a
negligible share of White Cap Buyer LLC's sales), with customer
preference shifting toward digital channels, continue to pose a
competitive risk.
"We believe the company can offset most cost inflation through
higher prices and improved product mix. White Cap Buyer LLC is
exposed to some product cost volatility, including from direct
tariff-related inflation, particularly for commoditized rebar
sales. We believe the company can generally offset most cost
inflation through higher prices (although with a short-term lag).
Additionally, management's focus on expanding higher-margin safety
and tools product revenues (CSG's safety products category of
around 2% is comparatively underpenetrated compared to 8% for White
Cap) should allow White Cap Buyer LLC to maintain its EBITDA
margins in the range we consider above average for industrial
distributors (above 9%).
"The stable outlook reflects our view that, despite a weak
macroeconomic environment, White Cap Buyer LLC's above-average
EBITDA margins will enable the company to generate moderate free
cash flow in 2020, and that its S&P Global Ratings-adjusted debt to
EBITDA, although elevated at around 7x in 2020, will decline to the
low- to mid-6x area by the end of 2021 based on our expectations
for economic recovery."
S&P could lower the rating if:
-- White Cap Buyer LLC's S&P Global Ratings-adjusted debt to
EBITDA does not improve and leverage is trending above 7x on a
sustained basis. This could happen if the commercial and
residential construction markets meaningfully contract;
-- The company is unable to generate positive free operating cash
flows; or
-- The company pursues a more aggressive financial policy such as
a debt-funded dividend to its financial sponsors, though S&P sees
this route as less likely in the near-term given the uncertainty in
the macroeconomic environment.
Although unlikely over the next 12 months given our expectation for
company's cyclicality and its ownership by a financial sponsor, S&P
could raise its ratings on White Cap Buyer LLC if:
-- Stronger-than-expected operating performance reduces its
leverage metric below 5x; and
-- The company's financial sponsors commit to maintaining leverage
at less than 5x throughout the business cycle.
WHITING PETROLEUM: Court Enters Plan Conifrmation Order
-------------------------------------------------------
Judge David R. Jones has entered findings of fact, conclusions of
law and order confirming the Joint Chapter 11 Plan of
Reorganization of Whiting Petroleum Corporation and its Debtor
Affiliates.
The exculpation, described in Article VIII.D of the Plan, is
appropriate under applicable law because it was proposed in good
faith, was formulated following extensive good faith,
arm’s-length negotiations with key constituents, and is
appropriately limited in scope.
The Plan is the product of good faith, arm's length negotiations by
and among the Debtors, the parties to the Restructuring Support
Agreement and the Creditors' Committee, among others.
Based on the foregoing and the findings contained in Article IX of
the Plan, the Debtors, as proponents of the Plan, have met their
burden of proving by a preponderance of the evidence, which is the
applicable evidentiary standard for Confirmation, that the Plan
satisfied all applicable elements of sections 1129(a) and 1129(b)
of the Bankruptcy Code required for Confirmation.
A full-text copy of the order and joint plan dated Aug. 14, 2020,
is available at https://tinyurl.com/y5tjztvd from PacerMonitor at
no charge.
Proposed Co-Counsel to the Debtors:
JACKSON WALKER L.L.P.
Matthew D. Cavenaugh
Jennifer F. Wertz
Veronica A. Polnick
1401 McKinney Street, Suite 1900
Houston, Texas 77010
Telephone: (713) 752-4200
Facsimile: (713) 752-4221
E-mail: mcavenaugh@jw.com
jwertz@jw.com
vpolnick@jw.com
- and -
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
Gregory F. Pesce
300 North LaSalle Street
Chicago, Illinois 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
E-mail: gregory.pesce@kirkland.com
- and -
Stephen Hessler, P.C.
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
E-mail: stephen.hessler@kirkland.com
- and -
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
Brian Schartz, P.C.
Anna Rotman, P.C.
609 Main Street
Houston, Texas 77002
Telephone: (713) 836-3600
Facsimile: (713) 836-3601
E-mail: brian.schartz@kirkland.com
anna.rotman@kirkland.com
About Whiting Petroleum Corporation
Whiting Petroleum Corporation, a Delaware corporation
--http://www.whiting.com/-- is an independent oil and gas company
that explores for, develops, acquires and produces crude oil,
natural gas and natural gas liquids primarily in the Rocky Mountain
region of the United States. Its largest projects are in the Bakken
and Three Forks plays in North Dakota and Niobrara play in
northeast Colorado. Whiting Petroleum trades publicly under the
symbol WLL on the New York Stock Exchange.
Whiting Petroleum and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-32021) on April 1, 2020. At the time of the filing, Debtors
disclosed $7,636,721,000 in assets and $3,611,750,000 in
liabilities. Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP, Kirkland & Ellis
International, LLP and Jackson Walker L.L.P. as legal counsel;
Moelis & Company as investment banker; Alvarez & Marsal as
financial advisor; Stretto as claims and solicitation agent, and
administrative advisor; and KPMG LLP US as tax consultant.
WPX ENERGY: Moody's Puts Ba3 CFR on Review for Upgrade
------------------------------------------------------
Moody's Investors Service placed the ratings of WPX Energy, Inc.'s
(WPX) on review for upgrade, including its Ba3 Corporate Family
Rating (CFR) and the B1 ratings on existing senior unsecured
notes.
The review of WPX's ratings follows the announcement [1] that WPX
and Devon Energy Corporation (Devon, Ba1 stable) have reached an
agreement under which Devon will acquire WPX in an all stock deal,
valuing the combined entities (including debt) at $12 billion. The
acquisition, which is subject to the approval of WPX's shareholders
and Devon's shareholders as well as regulatory approvals, is
expected to close in the first quarter 2021.
"The potential acquisition of WPX Energy by Devon Energy
Corporation is a credit positive for WPX given Devon's stronger
credit profile," stated James Wilkins, Moody's Vice President -
Senior Analyst.
On Review for Upgrade:
Issuer: WPX Energy, Inc.
Probability of Default Rating, placed on review for upgrade,
currently at Ba3-PD
Corporate Family Rating, placed on review for upgrade, currently at
Ba3
Senior Unsecured Shelf, placed on review for upgrade, currently at
(P)B1
Senior Unsecured Regular Bond/Debenture, placed on review for
upgrade, currently at B1 (LGD4)
Outlook Actions:
Issuer: WPX Energy, Inc.
Outlook, changed to Rating Under Review from Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
WPX's ratings were placed on review for upgrade based on the
potential ownership by Devon (Ba1 stable) which has a stronger
credit profile and greater financial resources. Devon has not
announced plans for WPX's existing outstanding senior notes
following the close of the acquisition. If the notes remain
outstanding and are guaranteed by Devon, then the ratings on the
notes would be upgraded to Devon's rating level. If WPX were to be
an unguaranteed subsidiary of Devon post acquisition and continue
to provide separate audited financial statements going forward,
then its ratings would likely be upgraded based on anticipated
parental support.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
WPX Energy, Inc., headquartered in Tulsa, Oklahoma, is an
independent exploration and production company.
[*] Cole Schotz's Michael Sirota Named New Jersey Trailblazer
-------------------------------------------------------------
Cole Schotz P.C. on Sept. 24, 2020, disclosed that Michael Sirota,
co-managing shareholder of the firm and co-chair of its national
Bankruptcy & Corporate Restructuring Department, has been named a
2020 New Jersey Trailblazer by the New Jersey Law Journal, which
recognized him as a "change agent," innovator and thought leader.
Mr. Sirota was recognized for his groundbreaking work as debtor's
counsel representing Modell's Sporting Goods in its Chapter 11
proceedings as COVID-19 erupted across the United States. Mr.
Sirota and his team turned to the rarely used Section 305(a) of the
Bankruptcy Code to suspend the bankruptcy hearings for their client
for the duration of the mandatory store closures. His use of 305(a)
resulted in several other judges also embracing the concept of
pausing bankruptcy proceedings during the pandemic.
The Modell's representation is just one instance of the
Cole Schotz bankruptcy group developing innovative strategies to
help a diverse client base across industries such as retail,
pharmaceutical, and hospitality, to name a few, in navigating new
challenges brought on by the pandemic. Other recent high-profile
matters on which the firm is representing the company or creditors'
committee include Chapter 11 cases for Pier 1, Neiman Marcus, True
Religion, LVI Holdco, Sur La Table, and J.C. Penney.
"Our clients have faced extraordinary challenges brought on by the
COVID-19 pandemic and we're thankful they have turned to us to help
them find creative solutions to accomplish their objectives," Mr.
Sirota said. "Cole Schotz restructuring lawyers are working
tirelessly across the country to advocate on behalf of our clients'
interests amid these turbulent times."
Since the start of 2019, Cole Schotz has represented parties in
more than 300 bankruptcy matters in the retail, hospitality,
pharmaceutical and life sciences, energy, and many other
industries. These include advising on filings involving Purdue
Pharma, Novum Pharma, Destination Maternity, Landry's (purchaser),
Hilltop Energy, and many others.
"In 2020, Sur La Table consummated a going concern sale in record
time, exited bankruptcy with new owners and is now on solid
financial footing due to the expertise, intelligence, and hard work
of Michael Sirota and the Cole Schotz team," said retailer Sur La
Table CEO Jason Goldberger. "I have no doubt that our successful
exit would not have happened without Cole Schotz."
Cole Schotz' Bankruptcy & Corporate Restructuring practice is a
distinguished and nationally renowned full-service group that
remarkably has 14 lawyers ranked in four states in Chambers USA:
America's Leading Lawyers for Business and is lauded for a track
record that boasts unparalleled effectiveness, success and value.
The New Jersey Trailblazers list was launched by the New Jersey Law
Journal in 2019 and this year's feature was included as part of the
August 2020 issue. The New Jersey Trailblazers distinction is given
to attorneys who have made significant marks on the practice,
policy and technological advancement of their practice areas. The
profile of Mr. Sirota may be viewed on Page 18 of the digital
edition here.
About Cole Schotz
Cole Schotz P.C. serves clients nationally from its offices in New
Jersey, New York, Delaware, Maryland, Texas and Florida. The firm
represents a variety of entities including private equity firms,
hedge funds, closely-held businesses, Fortune 500 companies and
select individuals. Founded in 1928, the firm has attorneys who
provide counsel in a number of primary areas of practice:
Bankruptcy & Corporate Restructuring; Blockchain Technology and
Digital Currency; Cannabis; Construction; Corporate, Finance &
Business Transactions; Employment; Environmental; Healthcare;
Intellectual Property; Litigation; Real Estate; Real Estate Special
Opportunities; Restaurant & Hospitality; Sports; Tax, Trusts &
Estates; and White Collar Litigation & Government Investigations.
[*] James T. Bentley Joins Winston & Strawn as Bankruptcy Partner
-----------------------------------------------------------------
Winston & Strawn LLP on Sept. 23, 2020, announced the addition of
James T. Bentley, an experienced and respected bankruptcy and
restructuring attorney, as a partner in the firm's New York
office.
Mr. Bentley has considerable experience in corporate
restructurings, representing numerous constituencies in bankruptcy
and out-of-court workouts. He has represented hedge funds, private
equity funds, alternative asset managers, trustees, and other
stakeholders in every aspect of the restructuring process. James
has experience across a broad range of industry sectors, including
retail, automotive, energy, healthcare, restaurants, radio and
television, real estate, and securities.
"I am thrilled to join Winston & Strawn," said Mr. Bentley. "The
synergies between my creditor representations and Winston &
Strawn's premier private equity and finance practices provide an
ideal platform for the next stage of my practice. As restructurings
continue to increase, I am delighted to join a dynamic
restructuring team with the experience and insight needed to
anticipate and effectively address the developing market needs of a
diverse clientele."
"We could not be more pleased to welcome James to our team," said
Jonathan Birenbaum, Managing Partner of Winston's New York office.
"Not only will James be instrumental in addressing the recent surge
in bankruptcy and restructuring cases, but his experience will
support our clients' needs in various sectors, including M&A,
energy, finance, and private equity."
"The COVID-19 pandemic has created unprecedented disruption in the
global capital markets and a surge in both the number and
complexity of corporate bankruptcy filings," said Winston Chairman
Tom Fitzgerald. "James will be a tremendous asset as we continue to
address evolving client needs across a broad spectrum of industries
worldwide."
Mr. Bentley also counsels international and domestic clients on
insolvency-related issues associated with securitizations and other
structured financing transactions. He represents issuers and
lenders in connection with bankruptcy-remote asset-backed
securitizations, including collateralized loan obligations (CLOs),
warehouse facilities, and repackagings. James also provides pro
bono assistance to the New York Bankruptcy Assistance Project and
serves as a panelist on the New York City Bar Association's Pro
Bono & Legal Services Committee, advising individuals about
bankruptcy. James has authored dozens of articles on
restructuring-related topics that have appeared in the New York Law
Journal, the Norton Journal of Bankruptcy Law and Practice, Law
360, The Bankruptcy Strategist, and Bloomberg.
Winston & Strawn LLP -- http://www.winston.com/-- is an
international law firm with 15 offices located throughout North
America, Asia, and Europe.
[*] Michaela Crocker Joins Katten's Insolvency Practice in Dallas
-----------------------------------------------------------------
Katten on Sept. 21 disclosed that the firm has added a new partner,
Michaela Crocker, to its Insolvency and Restructuring practice in
Dallas. She is the tenth attorney to join the practice this year
and the third this month.
Ms. Crocker, who helps clients navigate some of the most complex
Chapter 11 cases, also is the latest partner addition to Katten's
Dallas office, which opened in 2018 with seven partners and has
since expanded to more than 40 attorneys.
"Michaela is known as a talented attorney whose sophisticated,
business-minded approach gets to the root of what distressed
companies need. She has a great deal of experience and is an
excellent addition to our team," said John Sieger, chair of
Katten's Insolvency and Restructuring practice.
Ms. Crocker regularly represents debtors, creditors, Chapter 7 and
Chapter 11 trustees, and creditors' committees with a range of
insolvency matters. She is particularly skilled at advising clients
in the retail, telecommunications and energy sectors and has
managed plan negotiations, asset sales, debtor-in-possession
financing, leases and executory contracts, preference and
fraudulent transfer matters, and bankruptcy appeals.
More specifically, Ms. Crocker has represented, among many others,
the debtors in the liquidation of one of the largest retail
furniture chains in the state of Texas; and the Chapter 11 trustee
of a holding company that owed non-debtor operating subsidiaries
engaged in telecommunications and media businesses in the United
States, Virgin Islands, Martinique and Guadeloupe.
Ms. Crocker formerly was of counsel in the Business Restructuring &
Reorganization practice at Jones Day. Prior to that, she served as
career law clerk to the chief bankruptcy judge for the Northern
District of Texas, where she worked closely with bankruptcy judges
nationally. Earlier in her career, Crocker spent 12 years at Vinson
& Elkins LLP.
Earlier this month, John Mitchell, formerly with Akerman LLP, and
Terence Banich, formerly co-chair of the Bankruptcy Litigation
practice group at Fox Rothschild LLP, joined Katten's Insolvency
and Restructuring practice in Dallas and Chicago respectively.
Katten's Insolvency and Restructuring practice was much more in
demand during the first half of 2020 than during the same period in
2019 as the practice continues to take on key roles in some of the
most noted bankruptcy cases. The practice generally represents
debtors, independent directors, key creditor constituencies and
stakeholders in major Chapter 11 and Chapter 15 cases throughout
the country.
Katten -- http://katten.com-- is a full-service law firm with
nearly 700 attorneys in locations across the United States and in
London and Shanghai. Clients seeking sophisticated, high-value
legal services turn to Katten for counsel locally, nationally and
internationally. The firm's core areas of practice include
commercial finance, corporate, financial markets and funds,
insolvency and restructuring, intellectual property, litigation,
real estate, structured finance and securitization, transactional
tax planning, and trusts and estates. Katten represents public and
private companies in numerous industries, as well as a number of
government and nonprofit organizations and individuals.
[^] BOOK REVIEW: Mentor X
-------------------------
The Life-Changing Power of Extraordinary Mentors
Author: Stephanie Wickouski
Publisher: Beard Books
Hard cover: 156 pages
ISBN: 978-1-58798-700-7
List Price: $24.75
Order this Book: https://is.gd/EIPwnq
Long-time bankruptcy lawyer Stephanie Wickouski at Bryan Cave
impressively tackles a soft problem of modern professionals in an
era of hard data and scientific intervention in her third published
book entitled Mentor X. In an age where employee productivity is
measured by artificial intelligence and resumes are prescreened by
computers, Stephanie Wickouski adds spirit and humanity to the
professional journey.
The title is disarmingly deceptive and book browsers could be
excused for assuming this work is just another in a long line of
homogeneous efforts on mentorship. Don't be fooled; Mentor X is
practical, articulate and lively. Most refreshingly, the book
acknowledges the most important element of human development: our
intuition.
Mrs. Wickouski starts by describing what a mentor is and
distinguishes that role from a teacher, coach, role model, buddy or
boss. Younger professionals may be skeptical of the need for a
mentor, but Mrs. Wickouski deftly disabuses that notion by relating
how a mentor may do nothing less than change the course of a
protege's life. Newbies to this genre need little convincing
afterwards.
One of the book's worthiest contributions is a definition of mentor
that will surprise most readers. Mentors are not teachers, the
latter of which impart practical knowledge. Instead, according to
Mrs. Wickouski, her mentors "showed me secrets that I could learn
nowhere else. They showed me how doors are opened. They showed me
how to be an agent of change and advance innovative and
controversial ideas." What ambitious professional doesn't want more
of that in their life?
The practicality of the book continues as Mrs. Wickouski outlines
the qualities to look for in a mentor and classifies the various
types of mentors, including bold mentors, charismatic mentors, cold
and distant mentors, dissolute mentors, personally bonded mentors,
younger mentors, and unexpected mentors. Mentor X includes charts
and workbooks which aid the reader in getting the most out of a
mentor relationship. In a later chapter, Mrs. Wickouski provides an
enormously helpful suggestion about adopting a mentor: keep an open
mind. Often, mentors will come in packages that differ from our
expectations. They may be outside of our profession, younger, less
educated, etc... but the world works in mysterious ways and Mrs.
Wickouski encourages readers to think about mentors broadly.
In this modern era of heightened workplace ethics, Mrs. Wickouski
articulates the dark side of mentors. She warns about "dementors"
and "tormentors" -- false mentors providing dubious and sometimes
self-destructive advice, and those who abuse a mentor relationship
to further self-interested, malign ends, respectively. She
describes other mentor dysfunctions, namely boundary-crossing,
rivalry, corruption, and a few others. When a mentor manifests such
behaviors, Mrs. Wickouski counsels it's time to end the
relationship.
Mrs. Wickouski tells readers how to discern when the mentor
relationship is changing and when it is effectively over. Those
changes can be precipitated by romantic boundaries crossed,
emergence of rivalrous sentiment, or encouragement of unethical
behavior or corruption. Mrs. Wickouski aptly notes that once
insidious energies emerge, the mentorship is effectively over.
At this point, certain readers may say to themselves, "Okay, I've
got it. Now I can move on." Or, "My workplace has a formal
mentorship program. I don't need this book anymore." Or even,
"Can't modern technology handle my mentor needs, a Tinder of
mentorship, so to speak?"
Mrs. Wickouski refutes that notion. She analyzes how many mentoring
programs miss the mark. In one of the best passages in the book,
Mrs. Wickouski writes, "Assigning or brokering mentors negates the
most critical components of a true mentor–protege relationship:
the individual process of self-awareness which leads a person to
recognize another individual who will give the advice singularly
needed. That very process is undermined by having a mentor assigned
or by going to a mentoring party." She does not just criticize;
she offers a solution with three valuable tips for choosing the
right mentor and five qualities to ascertain a true mentor in the
unlimited sea of possibilities.
Next, Mrs. Wickouski distinguishes between good advice and bad
advice. She punctuates that discussion with many relevant and
relatable examples that are easy to read and colorfully enjoyable.
This section includes interviews with proteges who have had
successful mentorships. The punchline: in the best mentorships, the
parties harmoniously share personal beliefs and values. Also
important, the protege draws inspiration and motivation from the
mentor. The book winds down as usefully as it started: Mrs.
Wickouski interviews proteges, asking them what they would have
done differently with their mentors if they could turn back the
clock. A common thread seems to be that the proteges would have
gone deeper with their mentors -- they would have asked more
questions, spent more time, delved into their mentors' thinking in
greater depth.
The book wraps up lightly by sharing useful and practical
suggestions for maintenance of the mentor relationship. She answers
questions such as, "Do I invite my mentor to my wedding?" and "Who
pays for lunch?"
Mentor X is an enjoyable read and a useful book for any
professional in any industry at, frankly, any point in time.
Advanced individuals will learn much from the other side, i.e., how
to be more effective mentors. Mrs. Wickouski does a wonderful job
of encouraging use of that all knowing aspect of human existence
which never fails us: proper use of our intuition.
About The Author
Stephanie Wickouski is widely regarded as an innovator and
strategic advisor. A nationally recognized lawyer, she has been
named as one of the 12 Outstanding Restructuring Lawyers in the US
by Turnarounds & Workouts and as one of US News' Best Lawyers in
America. She is the author of two other books: Indenture Trustee
Bankruptcy Powers & Duties, an essential guide to the legal role of
the bond trustee, and Bankruptcy Crimes, an authoritative resource
on bankruptcy fraud. She also writes the Corporate Restructuring
blog.
*********
Monday's edition of the TCR delivers a list of indicative prices
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Each Friday's edition of the TCR includes a review about a book of
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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
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Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
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Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9474.
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