/raid1/www/Hosts/bankrupt/TCR_Public/201015.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, October 15, 2020, Vol. 24, No. 288
Headlines
2136 FULTON: Seeks to Tap Maltz Auctions as Real Estate Broker
2836 WEST: Seeks to Hire Maltz Auctions as Real Estate Broker
712 TIMBER: Seeks Approval to Hire Frost & Associates as Counsel
A.R.M. OPCO: May Use Cash Collateral on Interim Basis
AETHON UNITED: Moody's Withdraws B2 CFR on Non-Issuance of Notes
AFFORDABLE AUTO REPAIR: Disclosures OK'd; Nov. 2 Plan Hearing Set
ALLIANCE BREW: Seeks Approval to Tap Scinto Group as Accountant
AMC ENTERTAINMENT: May Run Out of Cash by December
ASCENA RETAIL: Signs Deal to Sell Justice Brand to IHL Group
ASCEND LEARNING: Moody's Affirms B3 CFR Following Term Loan Add-on
BEAMABLE INC: Video Game Tech Ends Up in Chapter 11
BECK & CHASE: Voluntary Chapter 11 Case Summary
BLVCK BVLLED: Plan to be Funded by Business Profits
CALIFORNIA RESOURCES: Court Approves Reorganization Plan
CALIFORNIA RESOURCES: Settles Its Dispute With Unsecured Creditors
CELADON GROUP: Seeks Approval to Hire Receivables Management Agent
COACHELLA VINEYARD: Seeks to Tap Resnik Hayes as Legal Counsel
COMCAR INDUSTRIES: Suncoast Truck Buying Low Value Assets for $2.5K
COMCAR INDUSTRIES: TAC Auction Buying 4 Reefer Trailers for $16K
COMCAR INDUSTRIES: Zellner Buying 2 Pull Behind Trailers for $250
CREME DE LA CREME: Files for Voluntary Ch. 11 Bankruptcy
DALLAS EUROPEAN: Plan of Reorganization Confirmed by Judge
DEAN & DELUCA: Unsec. Creditors to Have Up to 20% Recovery in Plan
DIFFUSION PHARMACEUTICALS: Falls Short of Nasdaq Bid Price Rule
DR. PROCTOR: Seeks Approval to Hire Bankruptcy Attorney
EARTH FARE: Bounces Back After Bankruptcy Filing
EPICOR SOFTWARE: Moody's Assigns B3 CFR, Outlook Stable
FANNIE MAE: SVP Andrew Bon Salle to Retire This Year
FIELDWOOD ENERGY: Taps Houlihan Lokey as Financial Advisor
FILTRATION GROUP: Moody's Lowers CFR to B3, Outlook Stable
FINGER OIL: Case Summary & 9 Unsecured Creditors
FREEDOM MORTGAGE: Fitch to Rate New $500MM Unsec. Notes 'B+(EXP)'
FREEDOM MORTGAGE: Moody's Rates $500MM Unsec. Notes 'B2'
GIGA-TRONICS INC: Receives $4.9 Million Orders from Boeing
GLOBAL EAGLE: SES Asks Court to Compel 8-Transponder Sale Payment
HAWAII MOTORSPORTS: Unsec. Creditors to Have 10% Recovery in Plan
HEAVEN'S LANDING: Seeks to Tap Kelley & Clements as Counsel
HEIKEN CONSTRUCTION: Files for Chapter 7 Bankruptcy
HONOLULU CLUB: Permanently Closes After 5 Decades of Operations
HURON POINTE: Voluntary Chapter 11 Case Summary
IBIO INC: Annual Meeting Set for Dec. 9, 2020
IBIO INC: Incurs $16.4 Million Net Loss in Fiscal 2020
IMERYS TALC: Signs Deal to Sell North American Biz. to Magris
IMH FINANCIAL: Exit Plan Approved, Hands Control to JPM
IMH FINANCIAL: Unsecureds Projected to Recover 100% in Plan
INDIANA: Prelim. Injunction Entered in ACLU Class Action
INPIXON: Closes Acquisition of Nanotron for $8.7 Million
INTERNATIONAL EXHIBITIONS: Files for Chapter 7 Bankruptcy
IRONSIDE LLC: Seeks Approval to Tap Pendergraft & Simon as Counsel
IRONSIDE LLC: Seeks to Tap Funderburk as Special Litigation Counsel
JAGUAR HEALTH: Provides Updates Regarding Capitalization Strategy
JBH PETROLEUM: Seeks Approval to Hire Rafool & Bourne as Counsel
JM BROWN: Unsec. Creditors to Receive $583 per Month over 5 Years
K&W CAFETERIAS: Committee Seeks to Hire Waldrep Wall as Counsel
LAS VEGAS MONORAIL: Judge Approves Series of Motions
LENNAR CORP: S&P Alters Outlook to Positive, Affirms 'BB+' ICR
LIGADO NETWORKS: Sweetening Debt Deal to Avert Bankruptcy
LORD & TAYLOR: IP, E-Commerce Gets $3.75M Bid from Zar Apparel
M&K ROGERS: Unsecured Creditors to be Paid in Full Over 5 Years
MARCO CONSTRUCTION: Seeks Approval to Hire Bankruptcy Attorney
MAS CORP: Case Summary & 20 Largest Unsecured Creditors
MD AMERICA: MeiDu's Texas Oil Explorer in Chapter 11
MD WILLIAMS: Seeks Approval to Hire Bankruptcy Attorney
MDC HOLDINGS: S&P Alters Outlook to Positive, Affirms 'BB+' Rating
MERITAGE HOMES: S&P Alters Outlook to Positive, Affirms 'BB' ICR
MGM RESORTS: S&P Rates $500MM Senior Unsecured Notes 'BB-'
MOUNT MORRIS: Unsecured Creditors to be Paid in Full in 6 Months
NEW HOME: Moody's Rates New $250MM Unsec. Notes Due 2025 'B3'
NOBLE ENERGY: Egan-Jones Withdraws BB- Senior Unsecured Ratings
NORTHERN DYNASTY: Hails Gov. Action to Address Supply Chain Issues
NORTHSTAR HEALTHCARE: Seeks to Tap Durrett Firm as Special Counsel
NOVABAY PHARMACEUTICALS: Says to Have Regained Compliance with NYSE
OGGUSA INC: Unsecured Creditors to Have 0.73% to 3.87% in Plan
OLB GROUP: Incurs $510K Net Loss in Second Quarter
OLB GROUP: Receives Noncompliance Notice from Nasdaq
ONEWEB GLOBAL: Taps BDO Digital to Provide Neutral Audit Assessment
ORANGE BLOSSOM: Seeks to Hire McAtee & Associates as Accountant
PAPS CAB: Has Until Oct. 16 to File Plan & Disclosures
PG&E CORP: Bankruptcy Plan Hinders Elliott's $250M Claim
PICK-YOUR-OWN: Creditors to Get Paid from Property Sale Proceeds
PORTS AMERICA: Moody's Assigns Ba2 CFR, Outlook Stable
PRIMO WATER: S&P Rates New EUR450MM Senior Unsecured Notes 'B'
PULSE HEALTH & FITNESS: Files for Chapter 7 Bankruptcy
RANDOLPH HEALTH: Obtains 7 Takeover Bids During Bankruptcy Auction
RMS HOLDING: S&P Assigns 'B-' Issuer Credit Rating; Outlook Stable
ROCKY MOUNTAIN: M&K CPAs Replaces Prager Metis as Accountant
RUBY TUESDAY: Gets Court Nod to Tap Chunky $18.5M Ch. 11 Loan
SEVEN AND ROSE: Seeks Approval to Hire Barton Brimm as Counsel
SHIFT4 PAYMENTS: Moody's Affirms B2 CFR, Outlook Positive
SMS ENTERPRISES: Unsecureds to Receive Nothing in Sale-Based Plan
SOS TOWING: Combined Plan & Disclosure Confirmed by Judge
SOUTHWEST AIRLINES: Egan-Jones Lowers Sr. Unsecured Ratings to BB+
SOVOS BRANDS: Moody's Affirms B3 CFR & Alters Outlook to Positive
SPOILED SWEET: Unsecureds Owed More than $3.5K to Recover 90%
STAMATINA HOLDINGS: Seeks to Hire Pronske & Kathman as Counsel
UNIFIED PROTECTIVE: Unsecured Creditors to Have 1% Recovery in Plan
WEBER-STEPHEN PRODUCTS: Moody's Assigns B1 CFR, Outlook Stable
ZATO INVESTMENTS: Court Approves Disclosure Statement
[*] North American Energy Bankruptcies Surge in Third Quarter
[*] U.S. Shale Producers Beleaguered by Bankruptcies
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
2136 FULTON: Seeks to Tap Maltz Auctions as Real Estate Broker
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2136 Fulton Realty LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to employ Maltz
Auctions, Inc. as real estate broker and auctioneer.
The Debtor selected Maltz Auctions to assist in the marketing and
sale of its real property located at 2136 Fulton St., Brooklyn,
N.Y.
Subject to approval of the court, Maltz will be compensated by a
buyer's premium of 6 percent (4 percent in the event that Mark
Nussbaum, Erwin Johnson or entities created or controlled by either
are the winning bidder (and Maltz does not offer broker
participation related to either party)). The buyer's premium will
be paid by the winning bidder in addition to the high bid amount.
Maltz may offer a co-brokerage to registered and licensed real
estate brokers who will get 2 percent of the buyer's premium
received by the firm.
Richard Maltz, president of Maltz Auctions, Inc., disclosed in
court filings that the firm has no adverse interest to the Debtor's
estate.
The firm can be reached through:
Richard Maltz
Maltz Auctions, Inc.
39 Windsor Place
Central Islip, NY 11722
Telephone: (516) 349-7022
Facsimile: (516) 349-0105
Email: info@MaltzAuctions.com
About 2136 Fulton Realty
2136 Fulton Realty LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
20-42296) on June 10, 2020, listing under $1 million in both assets
and liabilities. The Hon. Nancy Hershey Lord is the case judge.
Eric H. Horn, Esq., at A.Y. Strauss LLC, serves as the Debtor's
legal counsel.
2836 WEST: Seeks to Hire Maltz Auctions as Real Estate Broker
-------------------------------------------------------------
2836 West Realty LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of New York to employ Maltz Auctions, Inc.
as real estate broker and auctioneer.
The Debtor selected Maltz Auctions to assist in the marketing and
sale of its real property located at 2836 W. 19th St., Brooklyn,
N.Y.
Subject to approval of the court, Maltz will be compensated by a
buyer's premium of 6 percent (4 percent in the event that Mark
Nussbaum, Erwin Johnson or entities created or controlled by either
are the successful bidder, and Maltz does not offer broker
participation related to either party)). The buyer's premium will
be paid by the winning bidder in addition to the high bid amount.
Maltz may offer a co-brokerage to registered and licensed real
estate brokers who will get 2 percent of the buyer's premium
received by the firm.
Richard Maltz, president of Maltz, disclosed in court filings that
the firm has no adverse interest to the Debtor's estate.
The firm can be reached through:
Richard Maltz
Maltz Auctions, Inc.
39 Windsor Place
Central Islip, NY 11722
Telephone: (516) 349-7022
Facsimile: (516) 349-0105
Email: info@MaltzAuctions.com
About 2836 West Realty
2836 West Realty LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
20-42297) on June 10, 2020, listing under $1 million in both assets
and liabilities. The Hon. Nancy Hershey Lord is the case judge.
Eric H. Horn, Esq., at A.Y. Strauss LLC, serves as the Debtor's
legal counsel.
712 TIMBER: Seeks Approval to Hire Frost & Associates as Counsel
----------------------------------------------------------------
712 Timber Craven 1, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Columbia to employ Frost & Associates,
LLC as its bankruptcy counsel.
The firm will render these legal services to the Debtor:
(a) advise Debtor regarding its powers and duties in the
operation of its business and the management of its properties
pursuant to the Bankruptcy Code.
(b) prepare legal papers;
(c) assist in analyses and representation with respect to
lawsuits to which the Debtor is or may be a party;
(d) negotiate, prepare, file and seek approval of a plan of
reorganization;
(e) represent the Debtor at all hearings, meetings of
creditors and other proceedings; and
(f) perform all other legal services for the Debtor.
The Debtor paid to Frost an advanced retainer of $25,000 of which
$25,000 was placed in escrow pending approved applications of the
court. The amount of $10,302 was collected for the filing fees.
The Debtor will pay the normal hourly rate charged to bankruptcy
clients of the firm for ordinary legal services, and reimburse for
costs and charges under procedures approved by the court.
Frost & Associates is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Daniel A. Staeven, Esq.
Frost & Associates, LLC
839 Bestgate Road, Suite 400
Annapolis, MD 21401
Telephone: (410) 497-5947
Facsimile: (888) 235-8405
About 712 Timber Craven 1
712 Timber Craven 1, LLC filed a voluntary petition for relief
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D.C.
Case No. 20-00413) on Oct. 5, 2020. At the time of the filing,
Debtor had estimated assets of between $500,001 and $1 million and
liabilities of between $100,001 and $500,000.
Judge Elizabeth L. Gunn oversees the case. Daniel A. Staeven,
Esq., at Frost & Associates, LLC serves as the Debtor's bankruptcy
counsel.
A.R.M. OPCO: May Use Cash Collateral on Interim Basis
-----------------------------------------------------
Judge Russ Kendig of the U.S. Bankruptcy Court for the Northern
District of Ohio, Eastern Division, has approved the motion filed
by A.R.M. Opco Inc. seeking, among other things, authority to use
cash collateral.
As of the Petition Date, the Debtor was obligations to Austin
Financial Services Inc. in an amount of not less than
$2,687,622.85, including principal, interest, fees is $150,000.00,
an overadvance fee of $19,801.79, a diversion fee of $67,473,
reimbursement obligations, and certain other obligations as
provided in the AFS Prepetition Documents.
AFS was granted a security interest and lien in and on
substantially all of the Debtor's assets and the proceeds thereof,
which was perfected by, among other acts, the filing of a UCC
financing statement with the Secretary of State of Ohio on December
19, 2018, designated as instrument no. OH00227086831.
The Debtor also owes not less than $71,140 to WebBank and not less
than $293,000 to Libertas.
As adequate protection, AFS and WebBank each is granted a valid,
binding, enforceable and perfected post-petition replacement liens
and additional liens in all of the Debtor's assets, excluding the
Avoidance Actions and subject to the USTE/Court Fees.
A full-text copy of the order is available at
https://bit.ly/372AxQE from PacerMonitor.com.
About A.R.M. OPCO
A.R.M. OPCO Inc. -- https://www.toughequipment.com -- is an
equipment manufacturer in Canton, Ohio, with the latest in CNC
burning and forming capabilities, assembly bays, finishing and
painting systems all coupled with 3D computer-aided design. The
company manufactures TerrainPro M3, vacuum leaf, snow & ice
control, dump trucks, oil & gas equipment, septic & pressure
vessels, grappler trucks, and parts & service.
It sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. N.D. Ohio Case No. 20-61308) on August 20, 2020. In the
petition signed by William T. Blackerby Jr., president, the Debtor
disclosed $4,270,274 in assets and $10,680,090 in liabilities.
The case is assigned to Judge Russ Kendig.
Anthony J. DeGirolamo, Esq. of Anthony J. DeGirolamo, is the
Debtor's counsel.
AETHON UNITED: Moody's Withdraws B2 CFR on Non-Issuance of Notes
----------------------------------------------------------------
Moody's Investors Service withdrawn all assigned ratings for Aethon
United BR LP (Aethon), including the B2 Corporate Family Rating
(CFR), as Aethon did not issue its proposed $700 million senior
unsecured notes offering.
Ratings withdrawn:
Issuer: Aethon United BR LP
Probability of Default Rating B2-PD, Withdrawn
Corporate Family Rating B2, Withdrawn
Senior Unsecured Notes B3 (LGD5), Withdrawn
Outlook Actions:
Issuer: Aethon United BR LP
Stable outlook, Withdrawn
RATINGS RATIONALE
The ratings were withdrawn because Aethon did not issue its
proposed $700 million senior unsecured notes offering.
Aethon is an independent exploration & production company focused
primarily on developing natural gas properties in North Louisiana
and East Texas.
AFFORDABLE AUTO REPAIR: Disclosures OK'd; Nov. 2 Plan Hearing Set
-----------------------------------------------------------------
Bankruptcy Judge Mark S. Wallace granted Debtor Affordable Auto
Repair, Inc.'s motion for approval of its Disclosure Statement
describing the Chapter 11 Plan of Reorganization dated 5 August
2020.
The United States Trustee objected to the approval of the
Disclosure Statement on the ground that it describes an
unconfirmable plan.
The Debtor's proposed Chapter 11 Plan of Reorganization dated
August 5, 2020 provides for the treatment of general unsecured
claims placed in Class 4 as follows: (1) Class 4 members who vote
to accept the Plan are paid 8 percent of their claims over 36
months at 4% per annum interest; (2) Class 4 members who vote to
reject the Plan are paid 4% of their claims with no interest, the
payment to be made in one lump sum in the 48th month; and (3) Class
4 members who do not vote (and who do not otherwise oppose Plan
confirmation) are treated in the same manner as Class 4 members who
vote to accept the plan (viz., they are paid 8% of their claims
over 36 months with 4% per annum interest) provided that Class 4 as
a whole accepts the Plan. The Plan candidly states that "Class 4
members are highly incentivized to cast a ballot in favor of the
Chapter 11 Plan by having their claim paid a higher dividend and
faster in the plan."
In its objection, the UST argued that the Plan is not proposed in
good faith because the provisions described prohibit creditors from
exercising rights conferred by the Bankruptcy Code.
In its response to the UST objection, the Debtor argued that courts
generally uphold so-called "death trap" provisions that penalize
creditors voting to reject a chapter 11 plan and reward creditors
voting to accept a chapter 11 plan by providing more generous
dividends to those who vote to accept the plan and less generous
dividends to those who vote to reject the plan. These provisions
are also known as "carrot and stick," "toggle," or
"fish-or-cut-bait" provisions.
According to Judge Wallace, most of the case law under 11 U.S.C.
section 1126(e) appears to relate to bad faith or alleged bad faith
on the part of creditors, but the statutory language is broad
enough to encompass bad faith on the plan proponent's part: ". . .
the court may designate any entity whose acceptance or rejection of
such plan . . . was not solicited or procured in good faith . . ."
Judge Wallace says a Class 4 creditor voting to accept the Plan
(and thereby gain better treatment of such creditor's claim) might
well be regarded as acting in rational self-interest and therefore
would not be considered to be in bad faith under section 1126(e).
However, the fact that such a creditor would be in good faith does
not necessarily lead to the conclusion that the plan proponent is
in good faith. The good faith of one party to a transaction does
not automatically insulate the other party to the transaction from
a charge of bad faith. If a would-be monopolist is offering goods
at a price below the cost of production for the purpose of
destroying a competitor, the good faith of those buying from the
would-be monopolist does not insulate the would-be monopolist from
anti-trust related charges.
For the jurisprudential reasons, the Court makes no ruling at this
time as to whether Class 4 members voting to accept the Plan should
have their votes designated under section 1126(e) on the ground
that such acceptance was not solicited or procured in good faith.
The Court will leave it to the Debtor, the United States Trustee
and any other interested party to examine whether the Plan's
treatment of Class 4 creditors is motivated by a legitimate and
valid business purpose on one hand or, on the other hand, whether
it is a structure intended and designed to facilitate vote-buying
through impermissible coercion rising to the level of bad faith on
the Debtor's part.
The matter is currently unripe for decision. The Court does not now
have before it any motion to designate votes pursuant to section
1126(e) nor any briefing that may be related to such a motion.
Therefore, the Motion is granted, and the Court approves the
Disclosure Statement, with all rights reserved to the UST and any
interested party to take appropriate action with respect to the
matters discussed.
The due date for the return of ballots and deadline for the filing
and service of any objection to confirmation of the Plan is Oct.
23, 2020. The deadline for the filing and service of the Plan
confirmation memorandum and the filing and service of any reply to
an objection to Plan confirmation is Oct. 30, 2020.
The Plan confirmation hearing will be held at 2:00 p.m. on Nov. 9,
2020 at Courtroom 6C, 411 West Fourth Street, Santa Ana, CA 92701.
A copy of the Court's Memorandum Decision and Order is available at
https://bit.ly/3nMIXSm from Leagle.com.
About Affordable Auto Repair
Affordable Auto Repair, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-18367) on Sept.
23, 2019. At the time of the filing, the Debtor had estimated
assets of less than $50,000 and liabilities of less than $500,000.
The case is assigned to Judge Mark S. Wallace. M. Jones and
Associates, PC, is the Debtor's counsel.
ALLIANCE BREW: Seeks Approval to Tap Scinto Group as Accountant
---------------------------------------------------------------
Alliance Brew Gear, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Wyoming to employ Scinto Group, LLP as
accountant.
The Debtor selected Scinto Group to assist in keeping financial
records, preparing bankruptcy reports, and preparing tax returns
and tax-related documents and schedules.
The professionals at the firm will charge hourly rates in the range
of $85 to $140.
David Scinto, a certified public accountant at Scinto Group,
disclosed in court filings that the firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
David Scinto, CPA
Scinto Group, LLP
420 Sierra College Dr., Suite 360
Grass Valley, CA 95945
Telephone: (530) 273-3200
Facsimile: (530) 273-3207
Email: dave@sgcpa.biz
About Alliance Brew Gear
Alliance Brew Gear Inc., a Cheyenne, Wyo.-based manufacturer of
household appliances, filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Wyo. Case No.
20-20477) on Sept. 10, 2020. Alliance Brew President Charles Gross
signed the petition. At the time of the filing, the Debtor
disclosed total assets of $853,369 and total liabilities of
$10,332,245.
Judge Cathleen D. Parker oversees the case.
The Debtor has tapped Macy Law Office and Wadsworth Garber Warner
Conrardy, P.C. as its legal counsel, and Scinto Group, LLP as its
accountant.
AMC ENTERTAINMENT: May Run Out of Cash by December
--------------------------------------------------
Katherine Doherty and John J. Edwards III of Bloomberg News report
that AMC Entertainment Holdings Inc. said it may soon run out of
cash amid fresh signs that the pandemic is pushing cinema operators
close to default.
The world's biggest theater chain said in a filing Tuesday that
liquidity will be largely depleted by the end of this year or early
next year if attendance doesn't pick up, and it's exploring actions
that include asset sales and joint ventures. AMC's shares sunk to
the lowest since April 2020.
"Bankruptcy is an almost foregone conclusion," CreditSights analyst
Matt Zloto said in an interview.
About AMC Entertainment
AMC Entertainment Holdings, Inc., is engaged in the theatrical
exhibition business. It operates through theatrical exhibition
operations segment. It licenses first-run motion pictures from
distributors owned by film production companies and from
independent distributors. The Company also offers a range of food
and beverage items, which include popcorn; soft drinks; candy; hot
dogs; specialty drinks, including beers, wine and mixed drinks, and
made to order hot foods, including menu choices, such as curly
fries, chicken tenders and mozzarella sticks.
It operates over 900 theatres with 10,000 screens globally,
including over 661 theatres with 8,200 screens in the United States
and over 244 theatres with approximately 2,200 screens in Europe.
The Company's subsidiary also includes Carmike Cinemas, Inc.
AMC Theatres has taken a major financial hit by the shutdowns of
its locations across the country due to the coronavirus pandemic.
With the company saddled in debt even before the pandemic hit, AMC
Theatres has been on the verge of bankruptcy since it closed its
locations
in mid-March 2020. By Sept. 4, 2020, 70% of all U.S. AMCs will
have resumed operations.
ASCENA RETAIL: Signs Deal to Sell Justice Brand to IHL Group
------------------------------------------------------------
Greg Chang of Bloomberg News reports that Ascena Retail Group said
it entered into an asset purchase agreement with IHL Group, to sell
the intellectual property, e-commerce business and other assets of
its Justice brand.
IHL will serve as the "stalking horse bidder" in a court-supervised
auction process.
Decision about the remaining Justice retail locations to be made as
part of the auction process.
Terms weren't disclosed and Ascena continues to operate its Ann
Taylor, Loft, Lane Bryant and Lou & Grey brands.
About Ascena Retail Group
Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty
retailer offering apparel, shoes, and accessories for women under
the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus
Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion
(Dressbarn) segments, and for tween girls under the Kids Fashion
segment (Justice). Ascena, through its retail brands, operates
ecommerce websites and approximately 2,800 stores throughout the
United States, Canada, and Puerto Rico. Visit
http://www.ascenaretail.com/for more information.
Ascena Retail reported a net loss of $661.4 million for the fiscal
year ended Aug. 3, 2019, a net loss of $39.7 million for the year
ended Aug. 4, 2018, and a net loss of $1.06 billion for the year
ended July 29, 2017.
On July 23, 2020, Ascena Retail Group and its affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of
Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and
$12,516,261,149 in total liabilities.
The Hon. Kevin R. Huennekens is the case judge.
The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as
bankruptcy counsel, Guggenheim Securities, LLC, as financial
Advisor, and Alvarez and Marsal North America, LLC as restructuring
advisor. Prime Clerk, LLC is the claims agent.
ASCEND LEARNING: Moody's Affirms B3 CFR Following Term Loan Add-on
------------------------------------------------------------------
Moody's Investors Service affirmed the B3 Corporate Family Rating
and B3-PD Probability of Default Rating for Ascend Learning, LLC
following the company's proposed $350 million add-on to its first
lien term loan. Concurrently, Moody's downgraded the company's
existing first lien senior secured credit facilities (revolver and
term loan) ratings to B1 from Ba3, assigned a B1 rating to the
proposed new $350 million first lien term loan, and affirmed the
Caa2 rating on senior unsecured notes. The outlook remains stable.
Proceeds of the term loan add-on along with cash from the balance
sheet will be used to fund a proposed $390 million dividend payment
to Ascend Learning's equity sponsors as well as related expenses.
The transaction is credit negative because it will increase
leverage and cash interest expense and reduce free cash flow
available for investment and debt reduction. Pro forma for the
add-on, debt-to-EBITDA leverage will temporarily increase from 6.9x
for the LTM period ended June 30, 2020 to about 8.7x (Moody's
adjusted EBITDA expenses capitalized content development cost), a
level that is considered very high for the company's B3 rating
given the operating profile, although lower than the 9.1x at the
close of the last debt-funded dividend payment in early 2019. The
affirmation of the B3 CFR reflects Moody's expectation that the
company will be able to de-lever with solid earnings growth over
the next 12 to 18 months following this re-levering transaction.
Pro forma for the transaction, Ascend Learning will also have very
good liquidity with $87 million cash on the balance sheet at the
close of the transaction and is expected to generate solid free
cash flow of more than $80 million over the next year, which also
supports the affirmation of the B3 CFR.
The downgrade of the senior secured ratings to B1 from Ba3 reflects
the increase in secured debt in the capital structure, which
Moody's expects would weaken recovery in the event of a default.
Moody's took the following ratings actions:
Issuer: Ascend Learning, LLC
Ratings Affirmed:
Corporate Family Rating, affirmed at B3
Probability of Default Rating, affirmed at B3-PD
Senior unsecured notes due 2025, affirmed at Caa2 (LGD5)
Ratings Assigned:
New $350 million senior secured first lien term loan, assigned B1
(LGD3)
Ratings Downgraded
Senior secured first lien revolving credit facility, downgraded to
B1 (LGD3) from Ba3 (LGD2)
Senior secured first lien term loan, downgraded to B1 (LGD3) from
Ba3 (LGD2)
Outlook Action:
Outlook, Remains stable
RATINGS RATIONALE
Ascend Learning's credit profile broadly reflects its very high
financial leverage with Moody's adjusted debt-to-EBITDA of about
8.7x (7.7x when adding back change in deferred revenue) for the
trailing twelve months ended June 30, 2020, pro forma for the
proposed dividend transaction. The term loan add-on is being used
to fund a $390 million dividend payment to its sponsors. This is
the second debt-funded dividend payment since the LBO transaction
in 2017, which Moody's views as very aggressive financial policy.
The rating also reflects the company's modest scale as measured by
revenue and competition from larger companies. However, Ascend
Learning's credit profile is supported by its track record of
strong operating performance and ability to de-lever with strong
earnings growth, a dominant market position in the clinical
healthcare test preparation segment, subscription-like revenue
streams and diverse customer base. The rating also benefits from
its very good liquidity and annual free cash flow exceeding $80
million.
The stable outlook reflects Moody's expectation that Ascend
Learning will be able to de-lever with solid earnings growth,
generate at least $80 million of annual free cash flow, and
maintain at least good liquidity over the next 12 to 18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if there is deterioration in
operating performance or additional debt funded transactions that
would cause a delay in anticipated deleveraging, EBITA-to-interest
expense to be less than 1.25x, free cash flow to be weak or
negative, or if liquidity otherwise deteriorates.
The ratings could be upgraded if the company delivers sustained
organic revenue and earnings growth, with Moody's adjusted
debt-to-EBITDA maintained below 7.0x and free cash flow as a
percentage of debt sustained above 5%.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Ascend Learning is a provider of online educational content,
software and analytics in the healthcare, fitness/wellness and
other licensure-driven professions. The company has been owned by
private equity sponsors Blackstone Group and Canada Pension Plan
Investment Board since the LBO transaction in July 2017. For the
twelve months ended June 30, 2020, Ascend Learning generated net
revenues of approximately $538 million.
BEAMABLE INC: Video Game Tech Ends Up in Chapter 11
---------------------------------------------------
Framingham Source reports that a decade-old Framingham technology
company, Beamable, previously Disruptor Beam, a video game
technology company filed Chapter 11 in U.S. Bankruptcy Court this
October 2020. Filings were on October 1 and on October 8.
Located at 100 Pennsylvania Avenue in Framingham, the company had
about 95 employees, a couple of years ago.
The company reported $3.4 million in liabilities, including $1
million owed to a venture capital fund, in court filings.
Jonathan Radoff, is the co-founder and CEO. He is also one of the 6
board members.
The company's product allows game developers who use Unity 3D to
implement Games as a Service using a drag-and-drop interface.
Beamable had produced video games on popular TV shows like Game of
Thrones and the Walking Dead.
In 2014, the company announced a partnership with CBS to create
Star Trek Timelines, a strategy roleplaying game featuring
characters from all of the Star Trek eras.
About Beamble Inc.
Beamable, Inc. -- https://www.beamable.com -- is a software company
in Framingham, Massachusetts. Beamable enables game makers to
easily add social, commerce and content management features to
their games with drag-and-drop prefabs inside Unity3D without the
need of a game server. A Unity package features ready-to-ship user
interfaces distilled from best-practices with every feature, and a
visual skinning designer so they seamlessly integrate with the
developer's game.
Beamable, Inc., formerly Disruptor Beam, Inc., sought Chapter 11
protection (Bankr. D. Mass. Case No. 20-40986) on Oct. 1, 2020. In
the petition signed by Jon Radoff, CEO, the Debtor disclosed total
assets of $637,987 and total liabilities of $3,356,584. ASCENDANT
LAW GROUP LLC, led by Jesse I. Redlener, is the Debtor's counsel.
BECK & CHASE: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Beck & Chase Enterprises, Inc.
dba The Calvert Company
735 W. Taft Ave.
Orange, CA 92865
Business Description: Beck & Chase Enterprises, Inc. --
www.calvertcompany.com -- is a
promotional products supplier in Orange,
California.
Chapter 11 Petition Date: October 13, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-12864
Debtor's Counsel: Jeffrey Smith, Esq.
CURD, GALLINDO & SMITH, LLP
301 E. Ocean Blvd. Suite 1700
Long Beach, CA 90802
Tel: 562-624-1177
E-mail: jsmith@cgsattys.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Donna K. Beck, CEO.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/R422PPQ/Beck__Chase_Enterprises_Inc__cacbke-20-12864__0001.0.pdf?mcid=tGE4TAMA
BLVCK BVLLED: Plan to be Funded by Business Profits
---------------------------------------------------
Blvck Bvlled Investments, LLC, filed with the U.S. Bankruptcy Court
for the Northern District of Georgia, Atlanta Division, a Chapter
11 Plan and a Disclosure Statement on August 21, 2020.
Class 1 consists of the secured claim of U.S. Bank National
Association. As of the Petition Date, the Debtor was approximately
$11,595 in arrears on the Plantation Note. As of Aug. 21, 2020,
total arrears are $15,610 (the "Plantation Arrearage"). The
Plantation Arrearage will be deferred as a non-interest bearing
principal due as a balloon payment on the maturity date of the loan
on May 1, 2048. The Debtor agrees to make regular monthly
contractual payments to SPS, including the escrow payment,
currently in the amount of $796.16.
Class 2 consists of the secured claim of U.S. Bank National
Association. As of the Petition Date, the Debtor was approximately
$10,368 in arrears on the Vineyard note. As of Aug. 31, 2020,
total arrears are $14,459 (the "Vineyard Arrearage"). The Vineyard
Arrearage will be deferred as a non-interest bearing principal due
as a balloon payment on the maturity date of the loan on April 1,
2048. The Debtor agrees to make regular monthly contractual
payments to US Bank, including the escrow payment, currently in the
amount of $681.89. These payments will be applied contractually to
the loan as they are received.
Class 3 consists of the secured claim of U.S. Bank National
Association ("US Bank"). The Debtor will continue to remit
insurance and tax escrow payments for the Marlborough Property to
US Bank in accordance with the prepetition loan documents and
practices between the parties. If the Debtor and US Bank cannot
come to an agreement on the escrow practices within 60 days of
confirmation, Debtor will pay its property taxes and insurance
separately, and any escrow balance held by US Bank will be refunded
to Debtor.
Class 4 consists of the Equity Holders of the Debtor. Each equity
security holder will retain its/his Interest in the reorganized
Debtor as such Interest existed as of the Petition Date. This
class is not impaired and is not eligible to vote on the Plan.
Funds necessary to fund the Plan will be derived from the profits
of Debtor.
A full-text copy of the Disclosure Statement dated August 21, 2020,
is available at https://tinyurl.com/y2o7xk2p from PacerMonitor at
no charge.
Attorney for Debtor:
Will B. Geer
50 Hurt Plaza, SE, Suite 1150
Atlanta, Georgia 30303
Tel: (404) 233-9800
Fax: (404) 287-2767
About Blvck Bvlled Investments
Blvck Bvlled Investments, LLC, sought protection under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-62128) on Feb.
3, 2020, listing under $1 million in both assets and liabilities.
Judge Paul Baisier oversees the case. Will B. Geer, Esq., at
Wiggam & Geer, LLC, is the Debtor's legal counsel.
CALIFORNIA RESOURCES: Court Approves Reorganization Plan
--------------------------------------------------------
Steven Church of Bloomberg News reports that California Resources
Corp. won court approval for a reorganization plan to slash more
than $5 billion debt in exchange for handing ownership to
creditors.
U.S. Bankruptcy Judge David R. Jones in Houston approved the
proposal during a court hearing Tuesday, October 13, 2020, held by
telephone.
The company will exit bankruptcy as soon as it can implement the
plan, which also cancels existing shares, California Resources
lawyer James Bromley told Jones.
CRC blamed its Chapter 11 case on debt imposed on it as part of its
2014 spinoff from Occidental Petroleum Corp.
About California Resources
California Resources Corporation is an oil and natural gas
exploration and production company headquartered in Los Angeles.
The company operates its resource base exclusively within
California, applying complementary and integrated infrastructure to
gather, process and market its production. Visit
http://www.crc.com/for more information.
On July 15, 2020, California Resources and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Tex. Lead Case No. 20-33568). At the time of the filing, California
Resources disclosed assets of between $1 billion and $10 billion
and liabilities of the same range.
Judge David R. Jones oversees the cases.
The Debtors tapped Sullivan & Cromwell, LLP and Vinson & Elkins LLP
as their bankruptcy counsel, Perella Weinberg Partners as
investment banker, Alvarez & Marsal North America, LLC as
restructuring advisor, and Epiq Corporate Restructuring, LLC as
claims agent.
CALIFORNIA RESOURCES: Settles Its Dispute With Unsecured Creditors
------------------------------------------------------------------
Steven Church of Bloomberg News reports that oil and gas producer
agreed to give unsecured creditors warrants for 5% of the new stock
to be issued as part of California Resources' proposed
reorganization, in a deal that ends the last major obstacle to its
bankruptcy exit plan.
Before the deal, the official committee of unsecured creditors was
preparing to oppose the reorganization proposal in court; the
settlement means nearly all the company’s creditors now back the
plan.
"There are fights worth having and fights not worth having, and
this was one not worth having," California Resources bankruptcy
attorney Jim Bromley said in court.
About California Resources
California Resources Corporation is an oil and natural gas
exploration and production company headquartered in Los Angeles.
The company operates its resource base exclusively within
California, applying complementary and integrated infrastructure to
gather, process and market its production. Visit
http://www.crc.com/for more information.
On July 15, 2020, California Resources and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Tex. Lead Case No. 20-33568). At the time of the filing, California
Resources disclosed assets of between $1 billion and $10 billion
and liabilities of the same range.
Judge David R. Jones oversees the cases.
The Debtors tapped Sullivan & Cromwell, LLP and Vinson & Elkins LLP
as their bankruptcy counsel, Perella Weinberg Partners as
investment banker, Alvarez & Marsal North America, LLC as
restructuring advisor, and Epiq Corporate Restructuring, LLC as
claims agent.
CELADON GROUP: Seeks Approval to Hire Receivables Management Agent
------------------------------------------------------------------
Celadon Group, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Receivables
Control Corporation as their receivables management agent.
The firm will provide the following services to the Debtors:
(a) collect certain receivables identified by the Debtors
within the means permissible under applicable law;
(b) accept payments and endorse checks, notes or money orders
related to recovered receivables for deposit into RCC's trust
account; and
(c) assist with the commencement of legal action to recover
the receivables.
The firm will be compensated on a contingency fee basis as
follows:
Overall Collected Amounts ($U.S.) Contingency Rates
$0 - $499,999.99 25%
$500,000.00 - $999,999.99 15%
$1,000,000.00 - $1,499,999.99 10%
$1,500,000.00 + 5%
Total Dollars Collected Per Account ($U.S.) Contingency Rates
$0 – $24,999.99 40%
$25,000 and over 30%
Foreign Accounts Receivable Contingency Rates
Account collected without attorney intervention 33.3%
Account referred to attorneys 45%
Derek Vidor, a national sales manager for Receivables Control,
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:
Derek Vidor
Receivables Control Corporation
7373 Kirkwood Court, Suite 200
Minneapolis, MN 55369
Telephone: (763) 315-9600
About Celadon Group
Celadon Group, Inc. is a North American truckload freight
transportation company, primarily providing point-to-point
shipping, warehousing, supply chain logistics, tractor leasing and
other transportation and logistics services for major customers
throughout North America. Visit https://celadontrucking.com for
more information.
Celadon Group and 25 affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12606) on
Dec. 8, 2019. As of Dec. 2, 2019, the Debtors disclosed $427
million in assets and $391 million in liabilities.
Judge Karen B. Owens oversees the cases.
The Debtors have tapped DLA Piper LLP (US) as bankruptcy counsel,
Scudder Law Firm, P.C., L.L.O. as special counsel, Alixpartners,
LLP as financial advisor, and Receivables Control Corporation (RCC)
as receivables management agent. Kurtzman Carson Consultants, LLC,
is the notice, claims and balloting agent and administrative
advisor.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Dec. 18, 2019. The committee is represented by Cooley
LLP.
COACHELLA VINEYARD: Seeks to Tap Resnik Hayes as Legal Counsel
--------------------------------------------------------------
Coachella Vineyard Luxury RV Park LLC seeks approval from the U.S.
Bankruptcy Court for the Central District of California to employ
Resnik Hayes Moradi LLP as its bankruptcy counsel.
The firm will render these services to the Debtor:
(a) Advice and assistance regarding compliance with the
requirements of the United States Trustee;
(b) Advice regarding matters of bankruptcy law;
(c) Advice regarding cash collateral matters, if any;
(d) Examinations of witnesses, claimants or adverse parties
and the preparation of reports, accounts and pleadings;
(e) Advice concerning the requirements of the Bankruptcy Code
and applicable rules;
(f) Negotiation, formulation and implementation of a Chapter
11 plan of reorganization; and
(g) Court appearances.
The hourly rates charged by Resnik Hayes' attorneys and paralegals
are as follows:
M. Jonathan Hayes, Partner $525
Matthew D. Resnik, Partner $450
Roksana D. Moradi-Brovia, Partner $425
Russell Stong, Associate $350
David Kritzner, Associate $350
Sloan Youkstetter, Associate $350
Pardis Akhavan, Associate $200
Rosario Zubia, Paralegal $135
Priscilla Bueno, Paralegal $135
Rebeca Benitez, Paralegal $135
The Debtor has agreed to pay the firm an initial retainer fee of
$15,000, of which $1,717 will be used to pay the case filing fee.
M. Jonathan Hayes, Esq., a partner at Resnik Hayes, 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:
M. Jonathan Hayes, Esq.
Resnik Hayes Moradi LLP
17609 Ventura Boulevard, Suite 314
Encino, CA 91316
Telephone: (213) 572-0800
Facsimile: (818) 855-7013
About Coachella Vineyard Luxury RV Park
Coachella Vineyard Luxury RV Park LLC filed a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Case No. 20- 11615) on September 4, 2020. The petition was
signed by Abraham Gottlieb, managing member. At the time of the
filing, the Debtor disclosed $1 million to $10 million in both
assets and liabilities. Judge Victoria S. Kaufman oversees the
case. Resnik Hayes Moradi LLP serves as the Debtor's bankruptcy
counsel.
COMCAR INDUSTRIES: Suncoast Truck Buying Low Value Assets for $2.5K
-------------------------------------------------------------------
Comcar Industries, Inc. and its affiliated debtors filed with the
U.S. Bankruptcy Court for the District of Delaware a notice of
their proposed sale of certain low value assets, as set forth in
the Bill of Sale (Exhibit A), to Suncoast Truck and Trailer for
$2,500, free and clear of all Liens.
On Sept. 2, 2020, the Court entered the Order, which, among other
things, established the De Minimis Asset Sale Procedures.
Pursuant to the De Minimis Asset Sale Procedures, the Debtors
submit the De Minimis Sale Notice in connection with their sale of
the low value assets to the Purchaser.
The total selling price for the Sale to the Purchaser is for
$2,500, which is under the limit set forth in the De Minimis Asset
Sale Procedures. The Sale does not include payments to be made by
the Debtors on account of commission fees to agents, brokers or
auctioneers. The Debtors intend to use the proceeds from the Sale
to fund the administration of these chapter 11 cases and, if
applicable, to distribute funds in accordance with the priority
scheme set forth in orders of the Court, their financing documents
and/or the Bankruptcy Code. The Purchaser is not an insider of the
Debtors.
The Objection Deadline is Oct. 16, 2020 at 4:00 p.m. (ET).
If no objection to the De Minimis Sale Notice is timely filed and
served in accordance with it and the De Minimis Asset Sale
procedures, the Debtors may consummate the sale without further
notice.
Copies of all filings in the Debtors' chapter 11 cases are
available for free on the website of the Court-appointed claims and
noticing agent in these chapter 11 cases, Donlin Recano & Co.,
Inc., at https://www.donlinrecano.com/Comcar.
A copy of the Exhibit A is available at
https://tinyurl.com/yyawk27w from PacerMonitor.com free of charge.
About Comcar Industries
Comcar Industries is a transportation and logistics company
headquartered in Auburndale, Fla., with over 40
strategically-located terminal and satellite locations across the
United States. For more information, visit https://comcar.com/
On May 17, 2020, Comcar Industries and related entities sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In
the petitions signed by CRO Andrew Hinkelman, Comcar Industries was
estimated to have $50 million to $100 million in assets and
liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the presiding judge.
The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting,
Inc. as financial advisor; and Bluejay Advisors, LLC as investment
banker. Donlin Recano & Company, Inc. is the claims agent.
COMCAR INDUSTRIES: TAC Auction Buying 4 Reefer Trailers for $16K
----------------------------------------------------------------
Comcar Industries, Inc. and its affiliated debtors filed with the
U.S. Bankruptcy Court for the District of Delaware a notice of
their proposed sale of four 2006 Great Dane 7011 TZ-1A reefer
trailers, as set forth in the Bill of Sale (Exhibit A), to TAC
Auction Services for $16,000, free and clear of all Liens.
On Sept. 2, 2020, the Court entered the Order, which, among other
things, established the De Minimis Asset Sale Procedures.
Pursuant to the De Minimis Asset Sale Procedures, the Debtors
submit the De Minimis Sale Notice in connection with their sale of
the Reefer Trailers to the Purchaser.
The total selling price for the Sale to the Purchaser is for
$16,000, which is under the limit set forth in the De Minimis Asset
Sale Procedures. The Sale does not include payments to be made by
the Debtors on account of commission fees to agents, brokers or
auctioneers. The Debtors intend to use the proceeds from the Sale
to fund the administration of these chapter 11 cases and, if
applicable, to distribute funds in accordance with the priority
scheme set forth in orders of the Court, their financing documents
and/or the Bankruptcy Code. The Purchaser is not an insider of the
Debtors.
The Objection Deadline is Oct. 16, 2020 at 4:00 p.m. (ET).
If no objection to the De Minimis Sale Notice is timely filed and
served in accordance with it and the De Minimis Asset Sale
procedures, the Debtors may consummate the sale without further
notice.
Copies of all filings in the Debtors' chapter 11 cases are
available for free on the website of the Court-appointed claims and
noticing agent in these chapter 11 cases, Donlin Recano & Co.,
Inc., at https://www.donlinrecano.com/Comcar.
A copy of the Exhibit A is available at
https://tinyurl.com/yy9oqaao from PacerMonitor.com free of charge.
About Comcar Industries
Comcar Industries is a transportation and logistics company
headquartered in Auburndale, Fla., with over 40
strategically-located terminal and satellite locations across the
United States. For more information, visit https://comcar.com/
On May 17, 2020, Comcar Industries and related entities sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In
the petitions signed by CRO Andrew Hinkelman, Comcar Industries was
estimated to have $50 million to $100 million in assets and
liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the presiding judge.
The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting,
Inc. as financial advisor; and Bluejay Advisors, LLC as investment
banker. Donlin Recano & Company, Inc. is the claims agent.
COMCAR INDUSTRIES: Zellner Buying 2 Pull Behind Trailers for $250
-----------------------------------------------------------------
Comcar Industries, Inc. and its affiliated debtors filed with the
U.S. Bankruptcy Court for the District of Delaware a notice of
their proposed sale of two pull behind trailers, Unit No. F220421,
as set forth in the Bill of Sale (Exhibit A), to Todd Zellner for
$250, free and clear of all Liens.
On Sept. 2, 2020, the Court entered the Order, which, among other
things, established the De Minimis Asset Sale Procedures.
Pursuant to the De Minimis Asset Sale Procedures, the Debtors
submit the De Minimis Sale Notice in connection with their sale of
the Pull Behind Trailers to the Purchaser.
The total selling price for the Sale to the Purchaser is for $250,
which is under the limit set forth in the De Minimis Asset Sale
Procedures. The Sale does not include payments to be made by the
Debtors on account of commission fees to agents, brokers or
auctioneers. The Debtors intend to use the proceeds from the Sale
to fund the administration of these chapter 11 cases and, if
applicable, to distribute funds in accordance with the priority
scheme set forth in orders of the Court, their financing documents
and/or the Bankruptcy Code. The Purchaser is not an insider of the
Debtors.
The Objection Deadline is Oct. 16, 2020 at 4:00 p.m. (ET).
If no objection to the De Minimis Sale Notice is timely filed and
served in accordance with it and the De Minimis Asset Sale
procedures, the Debtors may consummate the sale without further
notice.
Copies of all filings in the Debtors' chapter 11 cases are
available for free on the website of the Court-appointed claims and
noticing agent in these chapter 11 cases, Donlin Recano & Co.,
Inc., at https://www.donlinrecano.com/Comcar.
A copy of the Exhibit A is available at
https://tinyurl.com/y26ntlnw from PacerMonitor.com free of charge.
About Comcar Industries
Comcar Industries is a transportation and logistics company
headquartered in Auburndale, Fla., with over 40
strategically-located terminal and satellite locations across the
United States. For more information, visit https://comcar.com/
On May 17, 2020, Comcar Industries and related entities sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-11120). In
the petitions signed by CRO Andrew Hinkelman, Comcar Industries was
estimated to have $50 million to $100 million in assets and
liabilities as of the bankruptcy filing.
The Hon. Laurie Selber Silverstein is the presiding judge.
The Debtors tapped DLA Piper LLP (US) as counsel; FTI Consulting,
Inc., as financial advisor; and Bluejay Advisors, LLC as investment
banker. Donlin Recano & Company, Inc. is the claims agent.
CREME DE LA CREME: Files for Voluntary Ch. 11 Bankruptcy
--------------------------------------------------------
Creme de la Creme Holding LLC (lead) filed for voluntary Chapter 11
bankruptcy protection Sept. 24, 2020 (Bankr. D. Md. Case No.
20-18677).
According to the Baltimore Business Journal, the debtor listed an
address of 17 W. Federal St., Middleburg, and is represented in
court by attorney Augustus T. Curtis. Creme de la Creme Holding
(lead) listed assets ranging from $1 million to $10 million and
debt ranging from $1 million to $10 million. The filing did not
identify a largest creditor.
Creme de la Creme Holding LLC is a primary/secondary education
company based out of 1742 L ST NW, Washington DC.
The Debtor's counsel:
Augustus T Curtis
Cohen, Baldinger & Greenfeld, LLC
Tel: 301-881-8300
E-mail: augie.curtis@cohenbaldinger.com
DALLAS EUROPEAN: Plan of Reorganization Confirmed by Judge
----------------------------------------------------------
Judge Brenda T. Rhoades has entered an order finally approving the
Disclosure Statement and confirming the Amended Plan of
Reorganization of Debtor Dallas European Auto, LLC.
The Plan complies with the applicable provisions of Title 11, and
the Debtor, as the plan proponent, has complied with the applicable
provisions of Title 11. The Plan has been proposed in good faith
and not by any means forbidden by law.
The identity, qualifications, and affiliations of the persons who
are to serve the Debtor, after confirmation of the Plan, have been
fully disclosed, and the appointment of such persons to such
offices, or their continuance therein, is equitable, and consistent
with the interests of the creditors and equity security holders and
with public policy.
The identity of any insider that will be employed or retained by
the Debtor and his compensation has been fully disclosed. The Plan
does not affect any rate change of any regulatory commission with
jurisdiction over the rights of the Debtor.
A full-text copy of the Order and Amended Plan of Reorganization
dated Aug. 25, 2020, is available at https://tinyurl.com/yyk63fpa
from PacerMonitor.com at no charge.
The Debtor is represented by:
Eric A. Liepins
ERIC A. LIEPINS, P.C.
12770 Coit Road
Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
About Dallas European Auto
Dallas European Auto, a Mercedes-Benz repair shop in Plano, Texas,
filed its voluntary Chapter 11 petition (Bankr. E.D. Tex. Case No.
20-40175) on Jan. 17, 2020. At the time of the filing, the Debtor
estimated $50,000 in assets and $1 million to $10 million in
liabilities. Eric A. Liepins, P.C., is the Debtor's legal counsel.
DEAN & DELUCA: Unsec. Creditors to Have Up to 20% Recovery in Plan
------------------------------------------------------------------
Dean & Deluca New York, Inc. and its debtor affiliates filed a
Disclosure Statement for their Second Modified Proposed Joint
Chapter 11 Plan of Reorganization on August 21, 2020.
The Debtors will establish a cash reserve for payment of
administrative and priority claims, with all remaining funds in
that reserve made available for distribution ratably to holders of
unsecured claims who do not elect to receive shares of the
Reorganized Debtors. Pace Development, Pace Food, and the Bank will
waive their right to receive a portion of such cash on account of
their unsecured claims. Because Pace Development, Pace Food, and
the Bank will not participate in any cash distribution, the Debtors
estimate that Holders of General Unsecured Claims who elect to
receive cash will receive a distribution of 0-20% of the Allowed
Amount of such Claims, depending upon the amount of Allowed General
Unsecured Claims and the amount available to satisfy such claims
after satisfaction of Administrative and Priority Claims.
A full-text copy of the Second Modified Proposed Joint Plan dated
August 21, 2020, is available at https://tinyurl.com/y4k86exs from
PacerMonitor at no charge.
Counsel for the Debtors:
William R. Baldiga, Esquire
BROWN RUDNICK, LLP
Seven Times Square
New York, NY 10036
Tel: (212) 209-4800
- and -
Tristan G. Axelrod, Esquire
One Financial Center
Boston, MA 02111
About Dean & Deluca New York
Dean & DeLuca New York, Inc., is a multi-channel retailer of
premium gourmet and delicatessen food and beverage products under
the Dean & DeLuca brand name. It traces its roots to the opening
of the first Dean & DeLuca store in the Soho district of Manhattan,
New York City by Joel Dean and Giorgio DeLuca in 1977.
Affiliate Dean & DeLuca, Inc. was incorporated in Delaware in 1999.
On Sept. 29, 2014, Pace Development Corporation, through its wholly
owned subsidiary, Pace Food Retail Co., Ltd., acquired 100% of the
shares of Dean & DeLuca, Inc. from its then shareholders.
Dean & DeLuca New York and six affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
20-10916) on March 31, 2020. At the time of the filing, the
Debtors had estimated assets of between $10 million and $50 million
and liabilities of between $100 million and $500 million.
The Debtors tapped Brown Rudnick LLP as their legal counsel,
Stretto as claims and noticing agent, and Saul Ewing Arnstein &
Lehr LLP as special counsel.
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors in Debtors' bankruptcy cases. The committee is
represented by Arent Fox, LLP.
DIFFUSION PHARMACEUTICALS: Falls Short of Nasdaq Bid Price Rule
---------------------------------------------------------------
Diffusion Pharmaceuticals Inc. received a written notice from the
staff of the Listing Qualifications Department of The Nasdaq Stock
Market, LLC on Oct. 9, 2020, indicating that the Company was not in
compliance with Nasdaq Listing Rule 5550(a)(2) because the bid
price for the Company's common stock had closed below $1.00 per
share for the previous 30 consecutive business days.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company
has 180 calendar days from the date of such notice, or until April
7, 2021, to regain compliance with the minimum bid price
requirement. To regain compliance, the bid price for the Company's
common stock must close at $1.00 per share or more for a minimum of
10 consecutive business days.
Nasdaq's written notice has no effect on the listing or trading of
the Company's common stock at this time, and the Company is
currently evaluating its alternatives to resolve this listing
deficiency.
About Diffusion Pharmaceuticals
Diffusion Pharmaceuticals Inc. is an innovative biotechnology
company developing new treatments that improve the body's ability
to bring oxygen to the areas where it is needed most, offering new
hope for the treatment of life-threatening medical conditions.
Diffusion's lead drug TSC was originally developed in conjunction
with the Office of Naval Research, which was seeking a way to treat
hemorrhagic shock caused by massive blood loss on the battlefield.
Diffusion reported a net loss of $11.80 million for the year ended
Dec. 31, 2019, compared to a net loss of $18.37 million for the
year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company had
$24.11 million in total assets, $3.97 million in total liabilities,
and $20.13 million in total stockholders' equity.
KPMG LLP, in McLean, Virginia, the Company's auditor since 2015,
issued a "going concern" qualification in its report dated March
17, 2020 citing that the Company has suffered recurring losses from
operations, has limited resources available to fund current
research and development activities, and will require substantial
additional financing to continue to fund its research and
development activities that raise substantial doubt about its
ability to continue as a going concern.
DR. PROCTOR: Seeks Approval to Hire Bankruptcy Attorney
-------------------------------------------------------
Dr. Proctor & Associates seeks approval from the U.S. Bankruptcy
Court for the District of Maryland to employ William Johnson, Jr.,
Esq., of The Johnson Law Group, LLC, as legal counsel.
Mr. Johnson will render these professional services to the Debtor:
(a) general advice and counsel concerning compliance with the
requirements of Chapter 11;
(b) preparation of any necessary amendments to the Debtor's
schedules, statement of financial affairs, and related documents as
appropriate;
(c) representation of the debtor-in-possession in all
contested matters. Certain adversary proceedings in this Court will
require a separate retainer agreement;
(d) representation as appropriate in any related matters in
other Courts;
(e) advice and counsel concerning the structure of a plan and
any required amendments thereto;
(f) advice concerning the feasibility of confirmation of a
plan and representation in connection with the confirmation
process;
(g) liaison, consultation, and where appropriate, negotiation
with creditors and other parties in interest;
(h) review of relevant financial information;
(i) review of claims with a view to determining which claims
are allowable and in what amounts;
(j) prosecution of claims objections, as appropriate;
(k) representation at the section 341 meeting of creditors and
at any hearings or status conferences in court; and
(l) such representations as may be necessary and appropriate
to the case.
Mr. Johnson would charge his regular hourly rate for services,
currently $405 per hour but subject to periodic adjustment, plus
reimbursement for expenses.
Debtor paid the initial retainer fee in the amount of $2,083.
Mr. Johnson disclosed in court filings that he does not have a
connection with the Debtor.
The attorney can be reached at:
William C. Johnson, Jr., Esq.
The Johnson Law Group, LLC
6305 Ivy Lane, Suite 630
Greenbelt, MD 20770
Telephone: (301) 477-3450
Facsimile: (202) 525-2958
Email: William@JohnsonLG.Law
About Dr. Proctor & Associates
Dr. Proctor & Associates sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Md. Case No. 20-19022) on Oct. 5, 2020.
At the time of the filing, Debtor had estimated assets of between
$100,001 and $500,000 and liabilities of less than $50,000.
William C. Johnson, Jr., Esq., serves as the Debtor's legal
counsel.
EARTH FARE: Bounces Back After Bankruptcy Filing
------------------------------------------------
Amanda McDonald of Yahoo Life reports that grocery store chain
Earth Fare has bounced back after it declared bankruptcy.
Lucky's Market, Fairway Market, and more grocery store chains have
filed for bankruptcy this year because of the ongoing pandemic. And
while online grocery orders continue to go up and many in-store
safety rules are still in place, one supermarket is showing others
how to respond after a Chapter 11 bankruptcy filing. Earth Fare is
bouncing back -- 13 locations have opened since June 22, and there
are more to come.
The Director of Grocery Gavin Konkel recently announced the news on
LinkedIn while promoting the latest store opening in Charlotte,
N.C. He also revealed that the chain, which is based in Ashville,
N.C., has opened 13 new stores since June 22, 2020. That is quite
the turnaround after the company filed for Chapter 11 bankruptcy on
Feb. 4, 2020. This specific type of legal action allows a company
to reorganize while looking for a way to pay back debts. This can
be through a new partnership, corporation, or another strategy.
(This news is unlike other announcements this year. Here are 9
Restaurant Chains That Closed Hundreds of Locations This Summer.)
At the time of the bankruptcy declaration, Earth Fare operated 50
stores in 10 states. They also had massive plans to expand. But
then all locations were seemingly closed for good. In March 2020,
the company received an investment from Hulsing Enterprises. The
funds allowed for the original founder and a former president of
the grocery store to restructure, according to Supermarket News.
Then, in late June 2020, The Charlotte Observer reported that Earth
Fare is bouncing back and is planning to open up to five new stores
in the area within the next five years, in addition to opening
current locations again. The first store to reopen was the Westgate
Earth Fare in Ashville.
About Earth Fare Inc.
Founded in 1975 in Asheville, N.C., Earth Fare, Inc. --
http://www.earthfare.com/-- is a natural and organic food retailer
with locations across 10 states. It offers groceries and wellness
and beauty products.
Earth Fare and its affiliate, EF Investment Holdings, Inc., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 20-10256) on Feb. 4, 2020. At the time of the filing,
the Debtors each disclosed assets of between $100 million and $500
million and liabilities of the same range.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP as legal
counsel; FTI Consulting, Inc. as financial and restructuring
advisor; and Epiq Corporate Restructuring, LLC as claims,
solicitation and balloting agent. Malfitano Advisors, LLC provides
disposition advisory services to the Debtors.
The U.S. Trustee for Region 3 appointed five creditors to serve on
the official committee of unsecured creditors in the Chapter 11
cases of Earth Fare, Inc. and EF Investment Holdings, Inc. The
Committee retained Pachulski Stang Ziehl & Jones LLP, as counsel,
and Alvarez & Marsal North America, LLC, as financial advisor.
EPICOR SOFTWARE: Moody's Assigns B3 CFR, Outlook Stable
-------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating and
B3-PD Probability of Default Rating to Epicor Software Corporation
post the acquisition by private equity firm Clayton, Dubilier &
Rice. Moody's also affirmed the B2 ratings on the existing first
lien debt facilities and the Caa2 ratings on the existing second
lien term loan and second lien notes. CD&R is acquiring Epicor from
private equity firm KKR. The existing debt will remain in place
post-closing. The CFR and PDR for the company under KKR ownership
will be withdrawn at closing. For the new entity, the outlook is
stable.
RATINGS RATIONALE
Epicor's B3 CFR reflects the company's very high leverage balanced
by a leading position as a provider of enterprise resource planning
(ERP) software solutions. Epicor sells to a diverse range of
mid-market customers with strong niche positions within certain
manufacturing, distribution and retail verticals. The rating also
recognizes Epicor's high renewal rates, and thus revenue
visibility, on maintenance and subscription revenues as customers
are reluctant to change ERP software providers.
Moody's estimates adjusted leverage based on LTM June 30, 2020, at
about 7.7x excluding certain restructuring, acquisition and other
costs (and 8.0x including those costs) and pro forma free cash flow
to debt of about 2%. Leverage is expected to improve to mid 7x
range over the next 12-18 months in the absence of debt funded
acquisitions or distributions. Over the long term, Moody's expects
that Epicor will have aggressive financial policies under CD&R
ownership as evidenced by the very high leverage at closing. The
company will be privately held and will not have an independent
Board of Directors.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Epicor's good cash flow
characteristics. Though Epicor is impacted by swings in demand from
their cyclical end markets, the significant proportion of recurring
revenues (approximately 71%) provide some cushion during the
economic recession.
The ratings for Epicor could be upgraded if leverage is sustained
below 7.0x, and free cash flow to debt is sustained above 5%. The
ratings could be downgraded if leverage exceeds 8.5x or if free
cash flow is negative on other than a temporary basis.
Liquidity is good based on approximately $30 million of cash at
closing, an undrawn $65 million revolving credit facility maturing
in May 2025, and the expectation of positive free cash flow over
the next 12 to 18 months. Liquidity is moderately weaker post CD&R
acquisition given the smaller cash balance at closing.
Assignments:
Issuer: Epicor Software Corporation (CD&R)
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Outlook Actions:
Issuer: Epicor Software Corporation (CD&R)
Outlook, Assigned Stable
Affirmations:
Issuer: Epicor Software Corporation (KKR)
Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa2 (LGD5)
Senior Secured Regular Bond/Debenture, Affirmed Caa2 (LGD5)
Outlook Actions:
Issuer: Epicor Software Corporation (KKR)
Outlook, Remains Stable
To be withdrawn at close:
Issuer: Epicor Software Corporation (KKR)
Corporate Family Rating, B3
Probability of Default Rating, B3-PD
Epicor Software Corp. is a leading provider of enterprise
application software for mid-sized companies. The company had
revenues of $889 million in the last twelve months ended June 30,
2020.
The principal methodology used in these ratings was Software
Industry published in August 2018.
FANNIE MAE: SVP Andrew Bon Salle to Retire This Year
----------------------------------------------------
Andrew J. Bon Salle, executive vice president -- Single-Family
Mortgage Business of Fannie Mae (formally, the Federal National
Mortgage Association), informed Fannie Mae that he will retire at
the end of this year.
About Fannie Mae and Freddie Mac
Federal National Mortgage Association (OTCQB: FNMA), commonly known
as Fannie Mae -- http://www.FannieMae.com/-- is a
government-sponsored enterprise (GSE) that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold. Fannie Mae helps make the 30-year
fixed-rate mortgage and affordable rental housing possible for
millions of Americans. The Company partners with lenders to create
housing opportunities for families across the country. A brother
organization of Fannie Mae is the Federal Home Loan Mortgage
Corporation (FHLMC), better known as Freddie Mac Freddie Mac
(OTCBB: FMCC) -- http://www.FreddieMac.com/-- was established by
Congress in 1970 to provide liquidity, stability and affordability
to the nation's residential mortgage markets. Freddie Mac supports
communities across the nation by providing mortgage capital to
lenders.
About Fannie Mae's Conservatorship
and Agreements with Treasury
Fannie Mae has operated under the conservatorship of FHFA since
Sept. 6, 2008. Treasury has made a commitment under a senior
preferred stock purchase agreement to provide funding to Fannie Mae
under certain circumstances if the company has a net worth deficit.
Pursuant to this agreement and the senior preferred stock the
company issued to Treasury in 2008, the conservator has declared
and directed Fannie Mae to pay dividends to Treasury on a quarterly
basis for every dividend period for which dividends were payable
since the company entered conservatorship in 2008.
FIELDWOOD ENERGY: Taps Houlihan Lokey as Financial Advisor
----------------------------------------------------------
Fieldwood Energy LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
Houlihan Lokey Capital, Inc. as their financial advisor and
investment banker.
Houlihan Lokey will render these professional services:
(a) assist the Debtor in the development and distribution of
selected information, documents and other materials;
(b) assist the Debtor in evaluating indications of interest
and proposals regarding any Transaction(s) (as defined in the
Engagement Letter) from current and/or potential lenders, equity
investors, acquirers and/or strategic partners;
(c) assist the Debtor with the negotiation of any
Transaction(s);
(d) provide expert advice and testimony regarding financial
matters related to any Transaction(s), if necessary;
(e) attend meetings of the Debtor's Board of Directors,
creditor groups, official constituencies and other interested
parties, as the Debtor and Houlihan Lokey mutually agree; and
(f) provide such other financial advisory and investment
banking services as may be required by additional issues and
developments not anticipated on the effective date of the
Engagement Letter.
Houlihan Lokey will use reasonable efforts to coordinate with the
Debtors' other retained professionals to avoid unnecessary
duplication of services.
The Debtors have agreed to pay Houlihan Lokey the following
proposed compensation:
(a) Monthly Fees. The Debtors shall pay Houlihan Lokey in
advance, without notice or invoice, a nonrefundable cash fee of
$175,000; provided that, beginning with the fourth Monthly Fee, the
Monthly Fee shall be $150,000;
(b) Amendment Fees. Upon the closing of each Amendment,
Houlihan Lokey
shall earn, and the Debtors shall promptly pay to Houlihan Lokey, a
cash fee equal to $250,000; and
(c) Transaction Fee(s). In addition to the other fees provided
for in the Engagement Letter, the Debtors shall pay Houlihan Lokey
the following transaction fees:
(i) Restructuring Transaction Fee. Upon an in-court
Restructuring Transaction (as defined in the Engagement Letter),
the effective date of a confirmed plan of reorganization or
liquidation under Chapter 11 of the Bankruptcy Code, Houlihan Lokey
shall earn, and the Debtors shall promptly pay to Houlihan Lokey, a
cash fee of $8,250,000.
(ii) Sale Transaction Fee. Upon the closing of each Sale
Transaction, Houlihan Lokey shall earn, and the Debtors shall
thereupon pay to Houlihan Lokey immediately and directly from the
gross proceeds of such Sale Transaction, as a cost of such Sale
Transaction, a cash fee of 1.0% of Aggregate Gross Consideration.
(iii) Financing Transaction Fees. Upon the closing of each
Financing Transaction, Houlihan Lokey shall earn, and the Debtors
shall thereupon pay to Houlihan Lokey immediately and directly from
the gross proceeds of such Financing Transaction, as a cost of such
Financing Transaction, a cash fee equal to the sum of 0.50% of the
gross proceeds of any: (I) indebtedness raised or committed that is
senior to other indebtedness of the Debtors, secured by a first
priority lien and unsubordinated, with respect to both lien
priority and payment, to any other obligations of the Debtors
(other than with respect to debtor-in-possession financing); (II)
indebtedness raised or committed that is secured by a lien (other
than a first lien), is unsecured and/or is subordinated; and (III)
equity or equity-linked securities (including, without limitation,
convertible securities and preferred stock) placed or committed;
provided that, to the extent any of I, II, and III above are raised
from the Debtors' existing lenders and/or equity holders, the
Financing Transaction Fee with respect to such gross proceeds shall
be calculated as 0.25% of such gross proceeds. Houlihan Lokey shall
earn, and the Debtors shall thereupon pay immediately and directly
from the gross proceeds of such Financing Transaction, a Financing
Transaction Fee for any debtor-in-possession financing that is
raised of 0.50% of the gross proceeds of such financing; provided
that, to the extent such financing is raised from the Debtors'
existing lenders and/or equity holders, the Financing Transaction
Fee with respect to such portion of the financing shall be
calculated as 0.25% of such gross proceeds. The Financing
Transaction Fee payable under the Engagement Letter shall be
subject to a $1,000,000 minimum Financing Transaction Fee payable
upon the first closing of a Financing Transaction.
(d) In the event both a Restructuring Transaction Fee and a
Sale Transaction Fee are earned, 50% of the lower such fee shall be
creditable against the larger such fee, except that, in no event,
shall any Transaction Fee be reduced below zero. In the event a
Financing Transaction Fee is earned, it shall be incremental to any
Restructuring Transaction Fee and any Sale Transaction Fee and
shall not be creditable against any such fee, nor shall any
Restructuring Transaction Fee or any Sale Transaction Fee be
creditable against any Financing Transaction Fee.
During the 90 days immediately preceding the Petition Date, the
Debtors paid Houlihan Lokey $625,000.00 in fees and $13,101.96 in
expense reimbursements, which includes $10,000.00 paid on account
of anticipated expenses. Houlihan Lokey did not receive any
payments from the Debtors during the 90 days immediately preceding
the Petition Date.
As of the Petition Date, the Debtors did not owe Houlihan Lokey for
any fees or expenses incurred prior to the Petition Date.
John-Paul Hanson, managing director and head of the Oil & Gas Group
at Houlihan Lokey, 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:
John-Paul Hanson
Houlihan Lokey Capital, Inc.
1001 Fannin St., Suite 4650
Houston, TX 77002
Telephone: (832) 319-5150
Facsimile: (832) 319-5151
About Fieldwood Energy
Fieldwood Energy is a portfolio company of Riverstone Holdings
focused on acquiring and developing conventional assets, primarily
in the Gulf of Mexico region. It is the largest operator in the
Gulf of Mexico owning an interest in approximately 500 leases
covering over two million gross acres with 1,000 wells and 750
employees. Visit https://www.fieldwoodenergy.com for more
information.
Fieldwood Energy and its 13 affiliates previously sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 18-30648) on Feb. 15,
2018, with a prepackaged plan that would deleverage $3.286 billion
of funded by $1.626 billion.
On Aug. 3, 2020, Fieldwood Energy and its 13 affiliates again filed
voluntary Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No.
20-33948). Mike Dane, senior vice president and chief financial
officer, signed the petitions.
At the time of the filing, Debtors disclosed $1 billion to $10
billion in both assets and liabilities.
Judge David R. Jones oversees the cases.
Debtors have tapped Weil, Gotshal & Manges LLP as their legal
counsel, Houlihan Lokey Capital, Inc. as investment banker, and
AlixPartners, LLP as financial advisor. Prime Clerk LLC is the
claims, noticing and solicitation agent.
The first lien group has employed O'Melveny & Myers LLP as its
legal counsel and Houlihan Lokey Capital, Inc. as its financial
advisor.
The RBL lenders have employed Willkie Farr & Gallagher LLP as their
legal counsel and RPA Advisors, LLC as their financial advisor.
The cross-holder group has tapped Davis Polk & Wardwell LLP as its
legal counsel and PJT Partners LP as its financial advisor.
FILTRATION GROUP: Moody's Lowers CFR to B3, Outlook Stable
----------------------------------------------------------
Moody's Investors Service downgraded Filtration Group Corporation's
corporate family rating (CFR) to B3 from B2, the Probability of
Default rating to B3-PD from B2-PD and the senior secured
first-lien ratings to B3 from B2. The rating outlook is stable.
The downgrades reflect reduced financial flexibility as a result of
the proposed $400 million debt-financed dividend to shareholders.
The nearly 25% increase in total debt comes at a time of heightened
macroeconomic uncertainty from the coronavirus pandemic and in
conjunction with Moody's expectations for the company to maintain
an active acquisition strategy. This distribution signals a
significantly more aggressive governance stance and was a key
factor in the rating outcome. While Moody's anticipates increasing
returns from emerging end markets, a meaningful impact to results
will take time to develop. In addition, historical de-levering has
largely taken place by way of stronger earnings versus repayment of
debt, placing greater importance on outsized revenue and margin
expansion in 2021.
RATINGS RATIONALE
Filtration Group's ratings reflect leading positions in niche
markets for filtration products that are used in medical and
bioscience, healthcare, CO2 emission reduction and industrial and
environmental air end markets, many of which are experiencing
favorable demand conditions boosted by the need for products to
address the coronavirus. The replacement/consumables aspect to the
revenue stream (over 80% of total sales) and low capital
expenditure needs translate into a solid free cash flow profile
that has averaged $65 million annually over the past five years.
The large recurring revenue base, combined with the relatively
low-average price of filters and critical importance to customers'
overall systems/processes helps reduce vulnerability to economic
downturns.
Filtration Group benefits from a series of compelling macroeconomic
and demographic trends. The company's products are focused on key
market drivers including medical safety, emissions reductions,
clean air and water, food safety and energy efficiency.
Specifically, emerging growth opportunities from impacts of the
coronavirus are driving a favorable product mix shift to indoor air
quality and medical, bioscience and pharmaceutical filtration.
Pro forma Moody's adjusted debt-to-EBITDA is near 7x at June 30,
2020 but with expectations for significant debt repayment from free
cash flow over the next twelve months, anticipated to fall below 6x
by year-end 2021. Free cash flow (cash flow from operations less
capital expenditures) should eclipse $100 million, resulting in
free cash flow-to-debt in the mid-single digit range. The EBITDA
margin is expected to continue rising, boosted by the favorable
product mix shift and cost reduction initiatives implemented in the
first half of 2020.
Governance considerations acknowledge private ownership and ongoing
risk that debt-funded dividends and/or acquisitions could continue
to push Moody's adjusted debt-to-EBITDA to 7x or higher. The
current cash position is elevated relative to historical levels but
Moody's believes the probability of a substantial portion being
used to help finance future acquisition activity is high.
The stable outlook reflects Moody's expectation for the company to
utilize a meaningful percentage of free cash flow for debt
repayment over the course of 2021, improving financial flexibility
before undertaking additional debt-financed acquisitions.
The liquidity profile is good with expectations for a longer-term
cash position of around $75 million and free cash flow exceeding
$100 million over the next 12-18 months. The $150 million revolving
credit facility set to expire in 2023 was fully available at June
30, 2020 and is expected to incur limited usage through 2021. The
facility includes a springing net leverage covenant based on a 30%
utilization trigger with a threshold of 8.7x. Moody's anticipates
net leverage to remain below the covenant requirement in the event
the test is triggered. The term loan does not have financial
maintenance covenants. Annual amortization payments totaling
approximately $20 million on the term loan are required.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The continuation of organic revenue growth in the mid-to-high
single digits through 2021, leading to greater than anticipated
free cash flow for accelerated debt repayment and/or improved
financial flexibility could result in positive rating action.
Sustainable margin expansion greater than 100 bps per year would
also be viewed favorably. Quantitatively, debt-to-EBITDA in the
mid-5x range and free cash flow-to-debt in the high-single digits
for an extended period of time could result in positive rating
pressure. Ratings could be downgraded if a meaningful portion of
free cash flow is not utilized for debt repayment such that
debt-to-EBITDA remains at or above 6.25x for an extended period of
time or if free cash flow-to-debt falls to the low-single digit
range. A decline in revenues potentially driven by several key end
markets correlating to the downside or increased competition from
larger competitors could also result in negative rating action.
Moody's took the following rating actions on Filtration Group
Corporation:
Downgrades:
Issuer: Filtration Group Corporation
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Senior Secured Bank Credit Facility, Downgraded to B3 (LGD3) from
B2 (LGD3)
Assignments:
Issuer: Filtration Group Corporation
Senior Secured Bank Credit Facility, Assigned B3 (LGD3)
Outlook Actions:
Issuer: Filtration Group Corporation
Outlook, Remains Stable
Filtration Group Corporation is a designer and manufacturer of
fluid and air filtration products to customers in medical &
bioscience, indoor air quality, CO2 emission reduction, food &
beverage and a variety of other end markets. Revenues for the
latest twelve months ended June 30, 2020 were nearly $1.5 billion.
The company is 80%-owned by an affiliate of Madison Industries with
the remaining 20% owned by management.
The principal methodology used in these ratings was Manufacturing
Methodology published in March 2020.
FINGER OIL: Case Summary & 9 Unsecured Creditors
------------------------------------------------
Debtor: Finger Oil & Gas, Inc.
3674 U.S. Hwy 90 West
Castroville, TX 78009
Business Description: Finger Oil & Gas, Inc. is an oil and gas
producer in Castroville, Texas.
Chapter 11 Petition Date: October 13, 2020
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 20-51742
Debtor's Counsel: Dean W. Greer, Esq.
DEAN W. GREER
2929 Mossrock, Suite 117
San Antonio, TX 78230
Tel: (210) 342-7100
E-mail: dean@dwgreerlaw.com
Total Assets: $1,001,500
Total Liabilities: $624,756
The petition was signed by Joseph M. Finger, Jr., president.
A copy of the petition containing, among other items, a list of the
Debtor's nine unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/AFDSHJQ/Finger_Oil__Gas_Inc__txwbke-20-51742__0001.0.pdf?mcid=tGE4TAMA
FREEDOM MORTGAGE: Fitch to Rate New $500MM Unsec. Notes 'B+(EXP)'
-----------------------------------------------------------------
Fitch Ratings expects to assign a 'B+(EXP)' rating to Freedom
Mortgage Corporation's proposed issuance of $500 million in five
and a half-year, senior unsecured notes due 2026. Fitch does not
expect a material impact on the company's funding and leverage
profile as a result of the issuance, as proceeds will be used for
general corporate purposes, including the repayment of existing
secured and unsecured debt.
KEY RATING DRIVERS
IDR AND SENIOR DEBT
The expected rating is equalized with the ratings assigned to
Freedom's existing senior unsecured debt, as the new notes will
rank equally in the capital structure. The senior unsecured debt
rating is one-notch below Freedom's Long-Term Issuer Default Rating
(IDR), given the subordination to senior secured debt in the
capital structure, reflecting weaker recovery prospects in a stress
scenario.
Proforma for this issuance, unsecured debt to total debt is
expected to increase modestly to 15.2% from 12.7%, as of June 30,
2020 as the proceeds will be used to fully repay Freedom's existing
10.75% senior unsecured debt and some of the firm's secured debt
outstanding. This level of unsecured debt is at the lower end of
fitch's 'bb' category funding, liquidity and coverage benchmark
range of 10%-40% for balance sheet heavy finance and leasing
companies with an operating environment score of 'a'. Fitch views
the use of unsecured debt favorably, as it enhances balance sheet
flexibility in times of stress.
Fitch evaluates leverage for mortgage lenders and servicers on the
basis of gross debt to tangible equity. Freedom's leverage was 5.5x
at June 30, 2020, which is above Fitch's previously stated negative
rating sensitivity of 5.0x. Failure to reduce leverage below 5.0x
over the next 12 to 18 months would result in negative rating
action.
Freedom's ratings are supported by its solid franchise and
historical track record in the U.S. nonbank residential mortgage
space, experienced senior management team with extensive industry
background, a sufficiently robust and integrated technology
platform, good historical asset quality performance in its prime
servicing portfolio, adequate reserves to absorb a reasonable level
of repurchase or indemnification demands, and appropriate earnings
coverage of interest expenses. Fitch believes Freedom's
multi-channel origination approach is well positioned relative to
most peers, as it can provide more sustainable earnings through
various interest rate and economic cycles. Freedom's
retained-servicing business model serves also as a natural hedge,
although not a full offset, to the cyclicality of the mortgage
origination business.
Fitch believes the highly cyclical nature of the mortgage
origination business and the capital intensity and valuation
volatility of MSRs of the mortgage servicing business represent
primary rating constraints for nonbank mortgage companies,
including Freedom. Furthermore, the mortgage business is subject to
intense legislative and regulatory scrutiny, which further
increases business risk, and the imperfect nature of interest rate
hedging can introduce liquidity risks related to margin calls
and/or earnings volatility. These industry constraints typically
limit ratings assigned to nonbank mortgage companies to below
investment grade levels.
Rating constraints specific to Freedom include the company's
continued reliance on secured, wholesale funding facilities and
elevated key person risk related to its founder and Chief Executive
Officer, Stanley Middleman, who sets the tone, vision and strategy
for the company.
The Negative Rating Outlook reflects Freedom's elevated leverage,
which is above Fitch's previously stated negative rating
sensitivity of 5.0x, the high degree of macroeconomic uncertainty
and the extended timeframe over which downside risks related to
forbearance are likely to play out which could pressure the
servicing business.
RATING SENSITIVITIES
IDR and SENIOR DEBT
The expected senior unsecured debt rating is primarily sensitive to
any changes to Freedom's Long-Term IDR and would be expected to
move in tandem.
Factors that could, individually or collectively, lead to negative
rating action/downgrade include an inability to maintain sufficient
liquidity to effectively manage elevated servicer advance levels
stemming from further increases in forbearance by borrowers and the
potential for higher delinquencies following the lapse of
forbearance programs. Additionally, if Freedom's leverage were to
be sustained above 5.0x over the next 12 to 18 months it would
result in a ratings downgrade.
Factors that could, individually or collectively, lead to positive
rating action/upgrade, including a revision of the Outlook to
Stable, include confidence in the firm's ability to sustainably
manage leverage at 5.0x or below, a clearer understanding of
potential peak delinquency rates and maintenance of adequate
liquidity to fund corresponding servicing advances, stabilization
of MSR valuation marks, funding sufficiency for increased
origination volume, and continuation of strong earnings
performance. A continued extension of Freedom's funding duration
and/or an increase in unsecured debt to total debt approaching 30%
could also contribute to positive rating momentum.
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
Freedom has an ESG Relevance Score of '4' for Governance Structure
due to elevated key person risk related to its founder and Chief
Executive Officer, Stanley Middleman, who sets the tone, vision and
strategy for the company. An ESG Relevance Score of '4' means
Governance Structure is relevant to Freedom's rating but not a key
rating driver. However, it does have an impact to the rating in
combination with other factors.
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.
FREEDOM MORTGAGE: Moody's Rates $500MM Unsec. Notes 'B2'
--------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Freedom Mortgage
Corporation's proposed $500.0 million senior unsecured notes due in
2026. The rating outlook is stable.
Assignments:
Issuer: Freedom Mortgage Corporation
Senior Unsecured Regular Bond/Debenture, Assigned B2
RATINGS RATIONALE
Moody's has rated the proposed senior unsecured notes maturing in
2026 B2, based on Freedom's B1 corporate family rating and reflects
the application its Loss Given Default (LGD) for Speculative-Grade
Companies methodology and model, which incorporate their priority
of claim and strength of asset coverage. The company has indicated
that the proceeds of the notes will be used to refinance $250
million of senior unsecured debt due in April 2024 and the
remainder to reduce the balance of its outstanding secured debt.
Freedom's B1 corporate family rating reflects the company's
historically solid profitability and its historical solid
capitalization levels. However, capitalization has declined over
the last year, as modest profitability only partially offset an
increase in assets due to rising origination volumes. Moody's
expects capitalization to improve over the next 12-18 months,
driven by elevated profitability from its origination segment. The
rating also incorporates the credit challenges resulting from the
company's reliance on confidence-sensitive secured funding to
finance loan originations as well as its mortgage servicing rights
assets. With very modest levels of unencumbered assets, the
company's alternative financing options, particularly during times
of stress are limited, in Moody's view.
The stable outlook reflects Moody's expectation that the company
will be able to maintain strong profitability and solid capital
levels over the next 12-18 months, against the backdrop of
prolonged low interest rates.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if the company is able to maintain
its strong profitability and solid capital levels for example,
sustained profitability with net income excluding mortgage
servicing rights (MSR) fair value marks to assets above 3.0% and
tangible common equity to tangible assets close to 20%. Moody's
believes the temporary restriction that Ginnie Mae placed on the
company in 2018 from contributing VA single-family loans to Ginnie
Mae I and Ginnie Mae II multi-issuer securities, only allowing the
company to sell VA loans into Ginnie Mae II custom pools,
demonstrated a weakness in risk management and corporate behavior.
Therefore, positive ratings pressure could occur if the company is
able to demonstrate a strengthening in corporate governance.
The ratings could be downgraded if the company's tangible common
equity to tangible managed assets falls below and is expected to
remain below 15%, profitability deteriorates with net income to
assets falling below and expected to remain below 2.0%, the
company's liquidity position weakens. Further material negative
regulatory actions or disclosure of a material operating weakness
would also be viewed unfavorably. An increase in the company's
reliance on secured debt could result in a downgrade of the
long-term senior unsecured rating as it would further subordinate
their priority ranking.
The principal methodology used in this rating was Finance Companies
Methodology published in November 2019.
GIGA-TRONICS INC: Receives $4.9 Million Orders from Boeing
----------------------------------------------------------
Giga-tronics Incorporated has received orders from Boeing totaling
$4.96 million for custom microwave filters for the F-15 aircraft.
The Company also announced preliminary operating results for the
second quarter of fiscal 2021 which ended Sept. 26, 2020. Net
revenues are expected to be approximately $2.7 million, a decrease
of 11% versus the same quarter last year. The decrease in second
quarter revenues was the result of an $820,000 decrease in
Microsource filter revenues due to the timing and delayed receipt
of certain orders, which was partially offset by an $450,000
increase in the Company's Radar/EW test business revenues. The
Company expects that Microsource filter revenue this fiscal year
should exceed last year's Microsource filter revenue of $8.2
million by approximately 20% while Radar/EW test business revenue
is also expected to grow substantially from the prior fiscal year.
The Company expects to report an operating loss of approximately
$450,000 for the second quarter of fiscal 2021 due in part to the
revenue decrease and a 60% increase in research and development to
support ongoing product innovation to continue to capture Radar/EW
testing market share.
John Regazzi, the chief executive officer of Giga-tronics, stated,
"We are very pleased with the large order from Boeing for the F-15
aircraft, reflecting our position as a sole source provider of
these critical custom microwave filters. Second quarter revenues
came in below where we expected largely due to timing of certain
orders. We remain on track for a strong year, and anticpate
increased sales at both our Microsource filter and Radar/EW testing
divisions in the second half of the fiscal year."
Shareholder Rights Plan
Additionally, the Company announced that its Board of Directors has
adopted a Shareholder Rights Plan designed to assure that all
shareholders would receive fair treatment in any attempted takeover
of the Company. The rights plan provides for the distribution of
one preferred share purchase right for each share of common stock
outstanding on the record date of Oct. 22, 2020. The rights will
not prevent a takeover, but are designed to encourage anyone
seeking to acquire the Company to negotiate with the Board of
Directors prior to attempting a takeover.
Mr. Regazzi commented, "The rights are designed to enable the Board
of Directors to act effectively on behalf of our shareholders in
response to any takeover bid. The rights plan is not intended to
prevent or discourage an offer for the Company that is commensurate
with its value and is presented in a manner permitting full review
and negotiation." He also noted, "The Company has not received any
unsolicited acquisition proposal at this time."
The rights plan provides that in the event any person becomes the
beneficial owner of 15% or more of the outstanding common shares,
each right (other than a right held by the 15% shareholder) will be
exercisable, on and after the close of business on the tenth
business day following such event, for the purchase of a number of
Giga-tronics common shares (or equivalent securities) equal to the
exercise price (initially $15.00) divided by 25% of the then
current fair market value of the common stock. The rights plan
further provides that if, on or after the occurrence of such event,
the Company is merged into any other corporation or 50% or more of
the Company's assets or earning power are sold, each right (other
than a right held by the 15% shareholder) will be exercisable to
purchase a similar number of securities of the acquiring
corporation.
The rights expire on Oct. 22, 2025 (unless previously triggered),
and are subject to redemption by the Board of Directors at $.001
per right at any time prior to the first date upon which they
become exercisable to purchase common shares.
About Giga-tronics Inc.
Headquartered in Dublin, California, Giga-tronics is a publicly
held company, traded on the OTCQB Capital Market under the symbol
"GIGA". Giga-tronics -- http://www.gigatronics.com/-- produces
RADAR filters and Microwave Integrated Components for use in
military defense applications as well as sophisticated RADAR and
Electronic Warfare (RADAR/EW) test products primarily used in
electronic warfare test & emulation applications.
Giga-Tronics Inc. reported a net loss attributable to common
shareholders of $2.03 million for the year ended March 28, 2020,
compared to a net loss attributable to common shareholders of $1.04
million for the year ended March 30, 2019. As of June 27, 2020,
the Company had $9.55 million in total assets, $5.11 million in
total liabilities, and $4.45 million in total shareholders' equity.
GLOBAL EAGLE: SES Asks Court to Compel 8-Transponder Sale Payment
-----------------------------------------------------------------
Peter B. de Selding of Space Intel Report reports that satellite
fleet operator SES asked the bankruptcy court handling
in-flight-connectivity provider Global Eagle Entertainment (GEE) to
force GEE to pay the final installment in a contract to purchase
eight transponders on an SES satellite.
SES's claim is one of many being filed with the Bankruptcy Court
for the District of Delaware following the court's Oct. 10, 2020
decision to move forward with the sale of GEE's assets to a group
of GEE creditors.
About Global Eagle Entertainment
Headquartered in Los Angeles, Global Eagle Entertainment Inc. is a
provider of media, content, connectivity and data analytics to
markets across air, sea and land. It offers a fully integrated
suite of media content and connectivity solutions to airlines,
cruise lines, commercial ships, high-end yachts, ferries and land
locations worldwide. Visit http://www.GlobalEagle.com/for more
information.
Global Eagle Entertainment and its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-11835) on July 22,
2020. In the petition signed by CFO Christian M. Mezger, Global
Eagle disclosed $630.5 million in assets and $1.086 billion in
liabilities.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins LLP (CA) and Young Conaway
Stargatt & Taylor, LLP as legal counsel; Greenhill & Co., LLC as
investment banker; Alvarez & Marsal North America, LLC as financial
advisor; and PricewaterhouseCoopers LLP as tax advisor. Prime
Clerk, LLC is the claims and noticing agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Aug. 5, 2020. The committee has tapped Akin Gump
Strauss Hauer & Feld LLP and Ashby & Geddes, P.A., as its legal
counsel, and Perella Weinberg Partners LP as its investment banker.
HAWAII MOTORSPORTS: Unsec. Creditors to Have 10% Recovery in Plan
-----------------------------------------------------------------
Hawaii Motorsports, LLC, a Montana limited liability company, filed
the Amended Disclosure Statement describing its Plan of
Reorganization dated August 21, 2020.
The Class IV claims are the holders of allowed general unsecured
claims in an amount equal to or less than $15,000. The Class IV
claimants will receive 10% of their allowed claims through a single
lump sum payment tendered on the Effective date.
The Class V claims are the holders of allowed general unsecured
claims in excess of $15,000. The Class V claimants will receive
10% of their Allowed Claims through 60 monthly payments commencing
on the Effective Date. A Class V claimant may elect treatment as a
Class V claimant holding an allowed unsecured claim of $15,000 by
so indicating on the ballot.
The Class VI claims are the holders of the Debtor's equity
interests, Barry Usher and TransPacific Holdings, LLC. The Class
VI members will retain their membership interests in the Debtor
limited liability company.
The Plan is an alternative (i) sale or (ii) operating plan. The
Debtor will continue its retail business operations and will (i)
liquidate its property, (ii) reorganize its business and continue
operations, and (iii) utilize a combination of any of the
preceding. The creditors will be paid from the revenues it earns
through its operations or from the proceeds of a sale. All
payments to be made under this Plan will come from these sources.
A full-text copy of the Amended Disclosure Statement dated August
21, 2020, is available at https://tinyurl.com/yy26tj5z from
PacerMonitor at no charge.
Attorney for Debtor:
James A. Patten
Molly S. Considine
PATTEN, PETERMAN, BEKKEDAHL & GREEN P.L.L.C.
2817 2nd Avenue North, Ste. 300
PO Box 1239
Billings, MT 59103
Telephone (406) 252-8500
Facsimile (406) 294-9500
E-mail: apatten@ppbglaw.com
mconsidine@ppbglaw.com
About Hawaii Motorsports
Hawaii Motorsports LLC is a motorcycle dealer in Kahului, Hawaii.
Hawaii Motorsports LLC, based in Kahului, HI, filed a Chapter 11
petition (Bankr. D. Mont. Case No. 20-10006) on Jan. 22, 2020. In
the petition signed by Barry Usher, manager, the Debtor was
estimated to have $500,000 to $1 million in assets and $1 million
to $10 million in liabilities. The Hon. Benjamin P. Hursh is the
presiding judge. James A. Patten, Esq., at Patten Peterman
Bekkedahl & Green, PLLC, serves as bankruptcy counsel to the
Debtor.
HEAVEN'S LANDING: Seeks to Tap Kelley & Clements as Counsel
-----------------------------------------------------------
Heaven's Landing, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to employ Kelley & Clements
LLP as its legal counsel.
Kelley & Clements will render these professional services to the
Debtor:
(a) provide legal advice and services regarding the Debtor's
bankruptcy case and provide substantive and strategic advice on how
to accomplish the Debtor's goals in connection with the prosecution
of its Chapter 11 case;
(b) advise the Debtor of its obligations, duties and rights;
(c) prepare documents to be filed with the court;
(d) appear in court and at any meeting with the U.S. Trustee
and any meeting of creditors;
(e) perform various services in connection with the
administration of the case;
(f) interact and communicate with the court's chambers and
Clerk's Office;
(g) prepare, review, revise, file, and prosecute motions and
other pleadings related to contested matters, executory contracts
and unexpired leases, asset sales, plan and disclosure statement
issues, and claims administration and resolve objections and other
matters relating thereto; and
(h) perform all other necessary services.
Prior to the petition date, the Debtor made retainer payments to
Kelley & Clements totaling $11,717, which funds were deposited in
the firm's trust account. Kelley & Clements invoiced the Debtor
for fees and expenses during that time period of $8,570, leaving a
retainer balance of $3,147. As of the petition date, the Debtor did
not owe Kelley & Clements any amounts for pre-bankruptcy legal
services rendered.
Charles Kelley, Jr., Esq., a partner at Kelley & Clements,
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:
Charles N. Kelley, Jr., Esq.
Kelley & Clements LLP
PO Box 2758
Gainesville, GA 30503
Telephone: (770) 531-0007
Email: ckelley@kelleyclements.com
About Heaven's Landing
Heaven's Landing, LLC -- https://www.heavenslanding.com/ - operates
a mountain estate airpark in Clayton, Georgia. Heaven's Landing is
a 635-acre gated community surrounded by thousands of acres of
National Forest. The aviation centerpiece of Heaven's Landing is a
5,069-foot paved concrete runway with pilot-controlled lighting and
a GPS approach. The runway is designed to accommodate most any
private plane, but is exclusively used by community members and
guests only.
Heaven's Landing filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
20-21350) on Oct. 4, 2020. The petition was signed by Michael J.
Ciochetti, president and general manager. At the time of the
filing, the Debtor disclosed estimated assets of $1 million to $10
million and estimated liabilities of $500,000 to $1 million.
Kelley & Clements LLP serves as the Debtor's legal counsel.
HEIKEN CONSTRUCTION: Files for Chapter 7 Bankruptcy
---------------------------------------------------
Heiken Construction LLC filed for voluntary Chapter 7 bankruptcy
protection Sept. 25, 2020 (Bankr. S.D. Tex. Case No. 20-34661).
According to the Houston Business Journal, the Debtor listed an
address of 3023 Schumann Oaks Drive, Spring, and is represented in
court by attorney Julie Mitchell Koenig. Heiken Construction LLC
listed assets up to $8,510 and debts up to $2,754,448. The
filing's largest creditor was listed as The Guarantee Co. of North
America with an outstanding claim of $466,729.
Heiken Construction LLC operates as a construction company. The
Company specialize in rough and finish grading, mass excavation,
and clearing services.
HONOLULU CLUB: Permanently Closes After 5 Decades of Operations
---------------------------------------------------------------
Leila Fujimori of Star Advertiser reports that the Honolulu Club,
which has been open for nearly five decades, announced Monday,
October 12, 2020, its closure due to difficulties caused by the
COVID-19 pandemic.
The nearly 50-year-old Honolulu Club, resurrected after its former
owner emerged from bankruptcy in 2013, could not survive the
COVID-19 pandemic.
The manager said Monday was the last day of operations for the
fitness and social networking club.
"Like many other local businesses, the devastating impact of
COVID-19 has forced us to make the difficult decision to
permanently close our doors," said General Manager Nick Taylor in a
news release.
"It has been a privilege to be Hawaii's premier health club for
nearly half a century, and it is with great sadness that we say
aloha to our members and teammates."
The club suspended operations March 19, 2020, reopened briefly,
then again closed Aug. 26, 2020 in line with government orders due
to the pandemic.
Many members canceled their membership as a result of the
pandemic.
The club did not say whether it would reimburse members for any
dues paid in advance of Monday's close.
"Members with questions have been encouraged to call the club for
assistance where team members are managing close-out procedures,"
the club said in the news release.
The club's 65,000-square-foot facility boasted amenities including
a 32-foot pool, lounge, personal training, Studio Pilates, racket
sports, private lockers, steam rooms and saunas, cold plunges and
hot tubs. It offered more than 100 classes a week with top
instructors and personal trainers.
Meridian Sports Clubs California LLC, the former owner, filed for
Chapter 11 bankruptcy reorganization in October 2012.
Honolulu Club is a gym and physical fitness center that offers
workout space for men and women.
HURON POINTE: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Huron Pointe Excavating, LLC
32490 South River Rd.
Harrison Township, MI 48045
Business Description: Huron Pointe Excavating, LLC --
https://www.huronpointeseawalls.com/ --
is an excavation and seawall construction
contractor. Its services include:
marine construction & seawalls; water lines;
docks davits, & piling; boat ramps, boat
wells, & boat hoist; boat house footings &
foundations; grinder/lift pumps;
sewer lines & sewer pumps; and dredging.
Chapter 11 Petition Date: October 13, 2020
Court: United States Bankruptcy Court
Eastern District of Michigan
Case No.: 20-50592
Debtor's Counsel: Peter A. Torrice, Esq.
CANU TORRICE LAW, PLLC
32059 Utica Road
Fraser, MI 48026
Tel: 586-285-1700
Email: torricep@yahoo.com
Total Assets: $1,086,374
Total Liabilities: $624,240
The petition was signed by Aaron Hustek, president/managing
member.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/PUBKCUI/Huron_Pointe_Excavating_LLC__miebke-20-50592__0001.0.pdf?mcid=tGE4TAMA
IBIO INC: Annual Meeting Set for Dec. 9, 2020
---------------------------------------------
The Board of Directors of iBio, Inc. established Dec. 9, 2020 as
the date of the Company's 2020 Annual Meeting of Stockholders and
the close of business on Oct. 27, 2020 as the record date for
determining stockholders entitled to notice of, and to vote at, the
2020 Annual Meeting. Because the date of the 2020 Annual Meeting
has been changed by more than 30 days from the anniversary of the
2019 Annual Meeting, stockholders of the Company who wish to have a
proposal considered for inclusion in the Company's proxy materials
for the 2020 Annual Meeting pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended, must ensure that such
proposal is received by the Company's Corporate Secretary, 800 HSC
Parkway, Bryan, Texas 77807 on or before the close of business on
Oct. 21, 2020, which the Company has determined to be a reasonable
time before it expects to begin to print and send its proxy
materials. Any such proposal must also meet the requirements set
forth in the rules and regulations of the Securities and Exchange
Commission in order to be eligible for inclusion in the proxy
materials for the 2020 Annual Meeting. The Oct. 21, 2020 deadline
will also apply in determining whether notice of a stockholder
proposal is timely for purposes of exercising discretionary voting
authority with respect to proxies under Rule 14a-4(c) of the
Exchange Act.
Because the date of the 2020 Annual Meeting has been advanced by
more than 20 days from the anniversary of the 2019 Annual Meeting
of Stockholders, a new deadline has been set for submission of
proposals by stockholders intended to be included in the Company's
proxy statement for the 2020 Annual Meeting. Under the Company's
First Amended and Restated Bylaws, notice of such proposal must be
received by the Company no later than the close of business on the
later of (i) 90 days before the 2020 Annual Meeting and (ii) 10
days after public announcement of the date of the 2020 Annual
Meeting is first made at the Company's principal executive offices
at 800 HSC Parkway, Bryan, Texas 77807 and be directed to the
attention of the Corporate Secretary. All such proposals must be
in compliance with applicable laws and regulations, as well as the
procedural and information requirements set forth in the Bylaws, in
order to be considered for inclusion in the Company's proxy
statement for the 2020 Annual Meeting.
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.
IBIO INC: Incurs $16.4 Million Net Loss in Fiscal 2020
------------------------------------------------------
iBio, Inc., filed with the Securities and Exchange Commission its
Annual Report on Form 10-K disclosing a net loss attributable to
company of $16.44 million on $1.64 million of revenues for the year
ended June 30, 2020, compared to a net loss attributable to the
company of $17.59 million on $2.02 million of revenues for the year
ended June 30, 2019.
The decrease in revenue is primarily attributable to the timing of
service revenues from CC-Pharming. Revenue earned from CC-Pharming
totaled approximately $1.3 million in 2020, compared with
approximately $1.8 million in 2019. Revenue earned from
third-party customers in 2020 increased approximately 118% to
$371,000 versus $170,000 in 2019. iBio recorded revenues of over
$1.1 million in the fiscal fourth quarter.
"Fiscal 2020 was a pivotal period for iBio, marked by the launch of
our Glycaneering Development Service; new collaborations leveraging
the FastPharming System; and most notably, our transition from a
business model focused on CDMO services to one that also includes
the development of our own, proprietary products," said Tom Isett,
chairman & CEO of iBio. "We developed two SARS-CoV-2 vaccine
candidates, in-licensed a COVID-19 therapeutic candidate, and
reinvigorated our work on IBIO-100 for fibrotic diseases."
Total operating expenses, consisting primarily of research and
development and general and administrative expenses, for the fiscal
year ended June 30, 2020 were approximately $15.6 million, compared
with approximately $17.8 million in 2019.
R&D expenses for the 2020 fiscal year were approximately $3.2
million, compared with approximately $5.5 million in 2019. The
decrease in R&D expense of approximately $1.6 million was primarily
related to decreases in third-party R&D costs of approximately $1.4
million, R&D personnel and consulting costs of approximately
$963,000 and grant income of $37,000; offset by an increase in R&D
project related costs of $112,000.
G&A expenses for the 2020 fiscal year were approximately $12.4
million, compared with approximately $12.3 million in the 2019
fiscal year. The increase is primarily attributable to higher
depreciation and amortization expense of $492,000, professional
fees of $508,000, personnel costs of $380,000 and board of
directors' fees of $168,000; offset by decreases in repairs and
maintenance costs of approximately $817,000, rent of $409,000,
recruiting fees of $131,000, and travel of $212,000.
Other expense for the 2020 and 2019 fiscal years was approximately
$2.4 million and $1.8 million, respectively. The increase resulted
primarily from higher interest expense related to the adoption,
effective July 1, 2019, of ASU 2016-02, "Leases (Topic 842)" and
other associated standards using the modified retrospective
approach for all leases entered into before the effective date.
iBio has continued to strengthen its balance sheet:
* In March, iBio entered into an agreement to sell common stock
to Lincoln Park Capital and raised net proceeds of
approximately $25.2 million prior to concluding the
agreement.
* Through utilization of at-the-market offerings during 2020,
iBio raised net proceeds of approximately $42.2 million.
As of June 30, 2020, iBio had cash of approximately $55.1 million,
compared with approximately $4.4 million as of June 30, 2019.
Subsequent to fiscal year end, the Company completed additional ATM
offerings, resulting in it having approximate cash and cash
equivalents of $83.1 million on Sept. 30, 2020.
As of June 30, 2020, the Company had $94.19 million in total
assets, $37.58 million in total liabilities, and $56.61 million in
total equity.
In the past, the history of significant losses, the negative cash
flow from operations, the limited cash resources on hand and the
dependence by the Company on its ability - about which there was
certainty - to obtain additional financing to fund its operations
after the current cash resources are exhausted raised substantial
doubt about the Company's ability to continue as a going concern.
Based on the total cash on hand of approximately $55.1 million as
of June 30, 2020, combined with subsequent purchases of the
Company's common stock through Oct. 13, 2020( the date of the
filing of this report) totaling approximately $31.4 million, the
Company believes it has adequate cash on hand to support the
Company's activities through fiscal year 2022.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1420720/000110465920114567/tm2024769d1_10k.htm
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.
IMERYS TALC: Signs Deal to Sell North American Biz. to Magris
-------------------------------------------------------------
Magris Resources Canada Inc. ("Magris") is pleased to announce that
it has entered into a definitive stalking-horse agreement to
acquire substantially all the assets of Imerys Talc America Inc.,
Imerys Talc Vermont Inc. and Imerys Talc Canada Inc. (collectively,
the "North American Talc Business") for US$223 million. The North
American Talc Business is being sold under proceedings commenced by
the sellers under Chapter 11 of the United States Bankruptcy Code
and the Companies' Creditors Arrangement Act. The agreement will
become fully effective and legally binding after the relevant
United States and Canadian courts issue orders to approve it.
The North American Talc Business is North America's premier
producer of talc, which is a critical performance-enhancing
ingredient used in a variety of industrial applications. Its
operations consist of three long-life mines and six processing
facilities located in the United States and Canada.
"We are excited to acquire the North American Talc Business, which
is underpinned by high-quality, long-life assets that produce a
variety of talc products for blue-chip customers in diverse
industrial end markets. We have been extremely impressed by the
quality and safety culture of the operations and workforce, and
look forward to partnering with the existing management team to
continue to grow this business," said Aaron Regent, Chairman & CEO
of Magris.
"We look forward to welcoming the North American Talc Business to
the Magris family. The combination of the North American Talc
Business and our existing niobium business in Canada represents a
unique opportunity to realize meaningful synergies and create an
industrial minerals platform that Magris can continue to invest in
and scale," said Matthew Fenton, President & CFO of Magris.
The transaction is expected to close by late 2020 or early 2021,
subject to the receipt of regulatory approvals and other customary
closing conditions.
About Magris
Magris was founded in 2012 by Aaron Regent to acquire, develop and
operate industrial minerals and mining assets on a global basis.
Magris owns and operates Niobec, a Quebec-based producer of
niobium, which is a critical element used in the production of
high-strength, low-alloy steels.
About Imerys Talc America
Imerys Talc and its subsidiaries --
https://www.imerys-performance-additives.com/ -- are
in the business of mining, processing, selling, and distributing
talc. Talc is a hydrated magnesium silicate that is used in the
manufacturing of dozens of products in a variety of sectors,
including coatings, rubber, paper, polymers, cosmetics, food, and
pharmaceuticals. Its talc operations include talc mines, plants,
and distribution facilities located in: Montana (Yellowstone,
Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas
(Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet).
It also utilizes offices located in San Jose, California and
Roswell, Georgia.
Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc
Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13,
2019.
The Debtors were estimated to have $100 million to $500 million in
assets and $50 million to $100 million in liabilities as of the
bankruptcy filing.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtors tapped Richards, Layton & Finger, P.A., and Latham &
Watkins LLP as counsel; Alvarez & Marsal North America, LLC as
financial advisor; and Prime Clerk LLC as claims agent.
IMH FINANCIAL: Exit Plan Approved, Hands Control to JPM
-------------------------------------------------------
Josh Saul of Bloomberg News reports that the federal Judge
Christopher Sontchi approves the bankruptcy-exit plan filed by
bankrupt real estate holding company IMH Financial Corp.
"I'm happy to confirm this plan," says Sontchi in court Tuesday,
October 13, 2020, as he approves the plan. "It is unopposed and
fully resolved."
IMH is a real estate holding company that manages the 150-year-old
MacArthur Place Hotel & Spa in California's wine country.
JPMorgan Chase Funding Inc. receives 100% of new common stock of
the reorganized company under the plan: court filing.
Previously: JPMorgan to Get Part of Luxury Resort After IMH Seeks
Bankruptcy
About IMH Financial Corp.
Scottsdale, Ariz.-based IMH Financial Corporation was formed from
the conversion of IMH Secured Loan Fund, LLC, or the Fund, a
Delaware limited liability company, on June 18, 2010. The
conversion was effected following a consent solicitation process
pursuant to which approval was obtained from a majority of the
members of the Fund to effect the Conversion Transactions and
involved (i) the conversion of the Fund from a Delaware limited
liability company into a Delaware corporation named IMH Financial
Corporation, and (ii) the acquisition by the Company of all of the
outstanding shares of the manager of the Fund Investors Mortgage
Holdings Inc., or the Manager, as well as all of the outstanding
membership interests of a related entity, IMH Holdings LLC, or
Holdings on June 18, 2010.
IMH Financial reported a net loss attributable to common
shareholders of $18.90 million on $32.49 million of total revenue
for the year ended Dec. 31, 2015, compared to a net loss
attributable to common shareholders of $39.46 million on $31.4
million of total revenue for the year ended Dec. 31, 2014.
As of Sept. 30, 2016, IMH Financial had $172.77 million in total
assets, $109.49 million in total liabilities, $31.49 million in
redeemable convertible preferred stock and $31.77 million in total
stockholders' equity.
IMH FINANCIAL: Unsecureds Projected to Recover 100% in Plan
-----------------------------------------------------------
IMH Financial Corporation submitted an Amended Disclosure Statement
explaining its Reorganization Plan.
The Plan generally provides for a restructuring:
* Distributions under the Plan will be funded by the Exit
Facility;
* All Claims against the Debtor will be paid in full in cash on
the Plan Effective Date of the Plan, or otherwise receive such
treatment as leaves such Claims Unimpaired under the Plan;
* Juniper's Preferred Equity Interests in the Debtor will be
redeemed in return for the payment of $8,912,519 in Cash; provided
that, if the Plan Effective Date does not occur within 120 days
after the Petition Date, then the Holders of the Juniper Interests
also will receive payment in Cash of all accrued and unpaid
dividends (and interest thereon, if any, from the date any such
dividends accrued) on the Juniper Interests;
* In full and final satisfaction of all of its Preferred Equity
Interests in the Debtor (the "JPM Interests"), with an aggregate
redemption value of $71,300,347, JPM will be issued 100% of the new
common stock in the Reorganized Debtor (the "New Common Stock") on
the Plan Effective Date;
* Provided that the class votes to accept the Plan, Holders of
existing Common Stock in the Debtor in Class 6 will receive their
Pro Rata share of $7,518,694 in Cash on the Plan Effective Date,
subject to reduction as set forth in the Plan, in full and final
satisfaction of their Interests. In the event Class 6 Common Stock
Interests votes to reject the Plan, the Holders of these Interests
will receive no distribution under the Plan and, in either event,
their Common Stock Interests will be cancelled;
* Provided that the class votes to accept the Plan, Holders of
existing warrants in the Debtor in Class 7 will receive their Pro
Rata share of $52,000 in Cash on the Plan Effective Date in full
and final satisfaction of their Interests. In the event the Class 7
Outstanding Warrant Interests vote to reject the Plan, the Holders
of these Interests will receive no distribution under the Plan and,
in either event, their Outstanding Warrant Interests will be
cancelled;
* All remaining equity Interests in the Debtor of any type,
including, without limitation, Restricted Stock Grants or Stock
Options (the "Miscellaneous Interests"), in Class 8 will receive no
distribution and will be cancelled; and
* The Reorganized Debtor will continue as a going concern,
funded by, among other things, the proceeds of the Exit Facility,
which will remain an obligation of the Reorganized Debtor.
A full-text copy of the Amended Disclosure Statement dated
September 2, 2020, is available at https://tinyurl.com/yxeo4hab
from PacerMonitor.com at no charge.
Co-Counsel for the Debtor:
William P. Bowden, Esq.
Gregory A. Taylor, Esq.
Stacy L. Newman, Esq.
Katharina Earle, Esq.
ASHBY & GEDDES
500 Delaware Avenue, 8th Floor
Wilmington, DE 19801
Telephone: (302) 654-1888
Christopher H. Bayley, Esq.
Steven D. Jerome, Esq.
Benjamin W. Reeves, Esq.
Jill H. Perrella, Esq.
James G. Florentine, Esq.
Molly J. Kjartanson, Esq.
SNELL & WILMER LLP
One Arizona Center
400 E. Van Buren St., Ste. 1900
Phoenix, AZ 85004-2202
Telephone: (602) 382-6000
About IMH Financial Corporation
IMH Financial Corporation -- https://www.imhfc.com/ -- is a real
estate investment holding company. The Company's most significant
real estate assets include: (a) a luxury hotel located in Sonoma,
California, and (b) thousands of acres of undeveloped real property
and related water rights located outside of Albuquerque, New
Mexico. The Company's real estate investments are located primarily
in the southwestern part of the United States, and are held by
wholly-owned or indirectly wholly-owned subsidiaries, none of which
are in bankruptcy.
IMH Financial Corporation filed for bankruptcy protection (Bankr.
D. Del., Case No. 20-11858) on July 23, 2020. The petition was
signed by Chadwick S. Parson, chairman and CEO. Hon. Brendan
Linehan Shannon presides over the case.
The Debtor estimated $100 to $500 million in assets and
liabilities.
Ashby & Geddes PA and Snell & Wilmer LLP have been tapped as
bankruptcy counsel to the Debtor. Donlin, Recano & Co., Inc. is the
Debtor's claim and noticing agent.
INDIANA: Prelim. Injunction Entered in ACLU Class Action
--------------------------------------------------------
In the case, INDIANA CIVIL LIBERTIES UNION FOUNDATION, INC.,
INDIANA CIVIL LIBERTIES UNION, INC., and JANE HENEGAR, KATHRYN
BLAIR, and NEIL HUDELSON, on their own behalf and on behalf of a
class and subclass of those similarly situated, Plaintiffs, v.
SUPERINTENDENT, INDIANA STATE POLICE, MAYOR OF INDIANAPOLIS, and
MARION COUNTY PROSECUTOR, in their official capacities, Defendants,
Case No. 1:20-cv-01094-JMS-TAB (S.D. Ind.), Judge Jane
Magnus-Stinson of the U.S. District Court for the Southern District
of Indiana, Indianapolis Division, granted the Plaintiffs' Motion
for Preliminary Injunction.
The State of Indiana has a statute in place which restricts speech
it labels panhandling and which was to be amended, effective July
1, 2020. The amended version of the statute will effectively
prohibit all panhandling -- long established by the United States
Supreme Court as a form of First Amendment expression -- in
downtown Indianapolis and other urban areas within the state.
Indiana Civil Liberties Union Foundation, Inc. and Indiana Civil
Liberties Union, Inc. ("ACLU of Indiana"), and three of their
employees, have initiated a class action against the Superintendent
of the Indiana State Police, the Mayor of Indianapolis, and the
Marion County Prosecutor (the "Defendants") to enjoin enforcement
of the pre-amendment and amended versions of Indiana Code Section
35-45-17-2, a statute that criminalizes certain panhandling as a
Class C misdemeanor. The amendments to Section 35-45-17-2 were set
to take effect on July 1, 2020.
The amended version of Section 35-45-17-2 expands the prohibition
on panhandling from within 20 feet of an automated teller machine
("ATM") or the entrance to a bank to within 50 feet of an ATM, the
entrance or exit to a bank, business, or restaurant, or the
location where a financial transaction occurs. It seeks to define
"financial transaction." The amended version also adds a
prohibition on panhandling within 50 feet of a public monument.
Indiana Code Section 35-45-17-1.5, which also is to take effect on
July 1, 2020, seeks to define "Public monument" as a building,
structure, or site that is of historical importance or interest
that is preserved as public property.
The Plaintiffs believe that their activities on Constitution Day
fall within the definition of "panhandling" because they solicit
immediate donations or something of value from individuals. The
small copies of the Constitution that are offered to individuals
are of little or no monetary value, and a reasonable person who
received a copy of the Constitution and also contributed would
understand that the contribution is a donation.
The Plaintiffs would like to continue holding their Constitution
Day activities in the Monument Circle area because the area has the
largest number of people who can be approached by ACLU of Indiana
employees and volunteers and also because the Monument marks the
center of Indianapolis. And, given that most of downtown
Indianapolis' sidewalks contain parking meters that accept payment
or nearby pay stations, Plaintiffs believe that there are
practically no places where they and ACLU of Indiana volunteers
will be able to celebrate Constitution Day and solicit once the
amendments to Section 35-45-17-2 take effect on July 1, 2020.
Additionally, even if there is not a parking meter or pay station
on a given part of a downtown sidewalk, the sidewalk is generally
within 50 feet of the establishments listed in the amended version
of Section 35-45-17-2. The amended version of Section 35-45-17-2
has the effect of banning panhandling from virtually all, or most,
of downtown Indianapolis. The ACLU of Indiana will not place its
employees or volunteers in jeopardy of violating the law, so it
will not be able to engage in the planned Constitution Day
celebration absent an injunction from the Court.
In support of their Motion for Preliminary Injunction, the
Plaintiffs argue that they are adversely affected by both the
pre-amendment and amended versions of Section 35-45-17-2, that the
pre-amendment and amended versions of the statute violate the First
Amendment, and that portions of the pre-amendment and amended
versions of the statute are unconstitutionally vague. They argue
that, because they "will suffer a continued assault of their First
Amendment rights" absent an injunction, money damages are
inadequate.
The Plaintiffs further argue that they face irreparable harm absent
an injunction, including either being arrested or receiving a
citation, or altering or ceasing their expressive activity under
the First Amendment. They argue in support of their Motion for a
Preliminary Injunction that the balance of harms favors them
because without an injunction, their constitutional rights will be
violated, and the Defendants cannot claim that requiring them to
comply with the Constitution is harmful. Finally, they contend
that the issuance of an injunction would serve the public interest
because injunctions that protect First Amendment freedoms are
always in the public interest.
Judge Magnus-Stinson first considers whether the Plaintiffs have
demonstrated a likelihood of success on the merits, and then turns
to the remaining factors that must be present for preliminary
injunctive relief.
The Judge finds that the Plaintiffs have standing to challenge the
constitutionality of the statute. The evidence establishes that
the Plaintiffs would be injured if the statute remains in effect
for the Constitution Day celebration, given that they plan to
solicit donations at the event; that the statute would be the cause
of their injury because it would prohibit their planned activities;
and that enjoining enforcement of the statute would remedy their
injury.
Next, the deprivation of First Amendment rights is one for which no
adequate remedy at law exists. The Plaintiffs have sustained their
burden of showing that there is no adequate remedy at law for the
harm they would suffer absent a preliminary injunction.
Also, it is well-settled that the inability to exercise rights
guaranteed by the First Amendment constitutes the type of
irreparable harm that supports the issuance of an injunction. The
Defendants need not show that the ACLU of Indiana would lose a
certain number of memberships or a certain amount of money absent
an injunction. The fact that the statute would deprive the
Defendants of exercising their First Amendment rights at the
Constitution Day celebration is sufficient for the Plaintiffs to
establish irreparable harm absent an injunction.
The Defendants also rely upon the interests they argue the statute
furthers -- for example, public safety and protecting downtown
areas from interference with the public's enjoyment of businesses
and public monuments -- in contending that the balance of harms
weighs in favor of not enjoining enforcement of the statute. But,
these interests are purely speculative. The Defendants have not
presented any evidence that these issues exist and that panhandling
is the cause of these issues. Without some proof of that causal
link, they cannot show that they will suffer harm if enforcement of
the statute is enjoined. Further, given that the statute is a
clear violation of the First Amendmente, the balance of harms would
need to weigh heavily in the Defendants' favor. It does not.
Finally, after finding that the Plaintiff has satisfied the
threshold requirements for a preliminary injunction, the Judge must
also consider whether an injunction is in the public interest.
That analysis is easy in the case. The Defendants have not
presented any evidence supporting their claimed public interests.
Conversely, protecting First Amendment freedoms always serves the
public interest. The Judge finds that enjoining enforcement of the
statute would serve the public interest.
Judge Magnus-Stinson concludes that the Plaintiffs have shown --
along with satisfying the other requirements for the issuance of a
preliminary injunction -- that they have a likelihood of succeeding
on the merits of their claim that Section 35-45-17-2, in both its
pre-amendment and amended forms, is a content-based prohibition on
free speech that violates the First Amendment. Accordingly, the
Judge granted the Plaintiffs' Motion for Preliminary Injunction.
The Defendants are preliminarily enjoined until further order of
the Court from enforcing Indiana Code Section 35-45-17-2, both in
its pre-amendment form and as amended and effective July 1, 2020.
The Defendants are ordered to inform all affected Indiana state
governmental entities of the injunction.
A full-text copy of the District Court's June 30, 2020 Order is
available at https://bit.ly/372ht57 from Leagle.com.
INPIXON: Closes Acquisition of Nanotron for $8.7 Million
--------------------------------------------------------
Inpixon, through its wholly-owned subsidiary Inpixon GmbH, a
limited liability company incorporated under the laws of Germany,
completed the acquisition of all of the outstanding capital stock
of Nanotron Technologies GmbH, a limited liability company
incorporated under the laws of Germany, pursuant to the terms and
conditions of that certain Share Sale and Purchase Agreement, dated
as of Oct. 5, 2020, among the Purchaser, Nanotron and Sensera
Limited, a stock corporation incorporated under the laws of
Australia and the sole shareholder of Nanotron.
As a result of the Acquisition, the Company now owns 100% of
Nanotron. Nanotron's business consists of developing and
manufacturing location-aware IoT systems and solutions.
At the Closing, the Purchaser paid to the Seller an aggregate
purchase price of $8,700,000 (less the Holdback Funds (as defined
below) and certain other closing adjustments) for the Nanotron
Shares. The Purchase Price may be subject to certain post-Closing
adjustments based on actual working capital as of the Closing as
described in the Purchase Agreement. The Purchaser retained
$750,000 from the Purchase Price to secure the Seller's obligations
under the Purchase Agreement, with any unused portion of the
Holdback Funds to be released to the Seller on the date that is 18
months after the Closing Date. The Purchaser paid the Purchase
Price from funds received in connection with a capital contribution
from the Company, and a portion of the Purchase Price was used by
the Seller to satisfy outstanding loans payable by the Seller to
obtain the release of certain existing security interests on
Nanotron's assets.
About Inpixon
Headquartered in Palo Alto, California, Inpixon (Nasdaq: INPX) is
an indoor intelligence company that specializes in capturing,
interpreting and giving context to indoor data so it can be
translated into actionable intelligence. The company's indoor
location and data platform ingests diverse data from IoT,
third-party and proprietary sensors designed to detect and position
all active cellular, Wi-Fi, UWB and Bluetooth devices, and uses a
proprietary process that ensures anonymity. Paired with a
high-performance data analytics engine, patented algorithms, and
advanced mapping technology, Inpixon's solutions are leveraged by a
multitude of industries to do good with indoor data. This
multidisciplinary depiction of indoor data enables users to
increase revenue, decrease costs, and enhance safety. Inpixon
customers can boldly take advantage of location awareness,
analytics, sensor fusion and the Internet of Things (IoT) to
uncover the untold stories of the indoors.
Inpixon reported a net loss of $33.98 million for the year ended
Dec. 31, 2019, compared to a net loss of $24.56 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$56.81 million in total assets, $13.08 million in total
liabilities, and $43.73 million in total stockholders' equity.
Marcum LLP, in New York, NY, the Company's auditor since 2012,
issued a "going concern" qualification in its report dated March 3,
2020, citing that the Company has a significant 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.
INTERNATIONAL EXHIBITIONS: Files for Chapter 7 Bankruptcy
---------------------------------------------------------
International Exhibitions Inc. filed for voluntary Chapter 7
bankruptcy protection Sept. 29, 2020 (Bankr. S.D. Tex. Case No.
20-34696).
According to the Houston Business Journal, the Debtor listed an
address of 1635 W. Alabama St., Houston, and is represented in
court by attorney John V. Burger. International Exhibitions listed
assets ranging from $0 to $50,000 and debts ranging from $500,001
to $1 million. The filing did not identify a largest creditor.
International Exhibitions Inc. is a leading trade fair organizer
for many national & international exhibitions in all over the
world.
IRONSIDE LLC: Seeks Approval to Tap Pendergraft & Simon as Counsel
------------------------------------------------------------------
Ironside, LLC and Ironside Lubricants, LLC seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
Pendergraft & Simon, LLP as legal counsel.
The firm will render these professional services to the Debtors:
(a) Advise the Debtors with respect to their powers and
duties;
(c) Conduct appropriate examinations of witnesses, claimants
and other persons;
(d) Prepare legal papers and consult with and advise the
Debtors connection with the operation of or the termination of the
operation of their business.
(e) Represent the Debtors at the meeting of creditors;
(f) Represent the Debtors in all proceedings before the court
and in any other judicial or administrative proceeding where their
rights may be litigated or otherwise affected;
(g) Prepare, file, negotiate and prosecute a disclosure
statement and plan of reorganization;
(h) Advise and consult with the Debtors concerning questions
arising in the conduct of the administration of the estate and
concerning the Debtors' rights and remedies with regard to the
estate's assets and the claims of creditors;
(i) Investigate pre-petition transactions and prosecution, if
appropriate, preference and other avoidance actions arising under
the Debtors' avoidance powers or any other causes of action held by
the estate;
(j) Defend, if necessary, any motions to lift the automatic
stay, contested matters or adversary proceedings, and, analyze and
prosecute any objections to claim;
(k) Appear on behalf of the Debtors before the court;
(l) Advise and assist the Debtors with real estate and
business organizations issues related to the cases; and
(m) Assist the Debtors in any matters relating to their
bankruptcy cases.
The hourly rates charged by the firm's attorneys and staff are as
follows:
Leonard Simon $500.00
William P. Haddock $300.00
Senior paralegal/senior law clerk $200.00
Junior paralegal/senior law clerk $100.00
The Debtors have agreed to pay for the expenses incurred by the
firm.
On May 28, 2020, each Debtor paid Pendergraft & Simon a retainer of
$15,000.
Leonard Simon, Esq., at Pendergraft & Simon, 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:
Leonard H. Simon, Esq.
William P. Haddock, Esq.
Pendergraft & Simon, LLP
2777 Allen Parkway, Suite 800
Houston, TX 77019
Telephone: (713) 528-8555
Facsimile: (713) 868-1267
About Ironside LLC
Ironside, LLC designs and builds a line of thru-tubing mud motors
and other components for the oilfield industry. Its products
include bearings, transmissions, components, motors, agitator, and
dual flapper valve. Visit https://ironsidemfg.com for more
information.
Ironside, LLC and its affiliate, Ironside Lubricants, LLC, filed
voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-34222) on Aug.
20, 2020. Randy Riney, managing member, signed the petitions. At
the time of the filing, Ironside, LLC disclosed estimated assets of
$1 million to $10 million and estimated liabilities of $500,000 to
$1 million.
Judge Eduardo V. Rodriguez oversees the cases. Pendergraft &
Simon, LLP serves as the Debtors' legal counsel.
IRONSIDE LLC: Seeks to Tap Funderburk as Special Litigation Counsel
-------------------------------------------------------------------
Ironside, LLC and Ironside Lubricants, LLC seek approval from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
Funderburk, Funderburk, Courtois, LLP as special litigation
counsel.
The Debtors need the firm's legal assistance to analyze and defend
claims asserted by a certain Jerry Kutach in the lawsuit styled,
Jerry Kutach vs. Ironside, LLC and Ironside Lubricants, LLC, Case
No. 20-06-07570, in the 410th District Court of Montgomery County,
Texas.
The firm will be paid at hourly rates as follows:
Mark Courtois, Partner $350
Mary Ann Dougharty, Associate $250
Michele Medina, Paralegal $110
Funderburk and its attorneys and paralegals are "disinterested
persons" within the meaning of Section 101(14) of the Bankruptcy
Code, according to court filings.
The firm can be reached through:
Mark J. Courtois, Esq.
Funderburk, Funderburk, Courtois, LLP
2777 Allen Parkway, Suite 1000
Houston, TX 77019
Telephone: (713) 526-1801
Facsimile: (713) 526-2708
About Ironside LLC
Ironside, LLC designs and builds a line of thru-tubing mud motors
and other components for the oilfield industry. Its products
include bearings, transmissions, components, motors, agitator, and
dual flapper valve. Visit https://ironsidemfg.com for more
information.
Ironside, LLC and its affiliate, Ironside Lubricants, LLC, filed
voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-34222) on Aug.
20, 2020. Randy Riney, managing member, signed the petitions. At
the time of the filing, Ironside, LLC disclosed estimated assets of
$1 million to $10 million and estimated liabilities of $500,000 to
$1 million.
Judge Eduardo V. Rodriguez oversees the cases. Pendergraft &
Simon, LLP serves as the Debtors' legal counsel.
JAGUAR HEALTH: Provides Updates Regarding Capitalization Strategy
-----------------------------------------------------------------
Jaguar Health, Inc., provided updates regarding the company's
capitalization strategy and recent non-dilutive financing
transactions.
"I'm pleased to be able to state that we believe our efforts over
the past several years to streamline operations at Jaguar and our
wholly owned subsidiary, Napo Pharmaceuticals, Inc. (Napo), and
improve our long-term financial prospects are being realized," Lisa
Conte, Jaguar's president and CEO, said. "Our core focus today is
on achieving financial sustainability as a commercial business in
2021 based on sales of Mytesi (crofelemer) for the current approved
indication, continuing to remove barriers for patients to access
Mytesi, and on pursuing additional non-dilutive financing -- both
from potential business development partners interested in non-US
licensing rights for Mytesi, and from royalty financing
transactions related to future Mytesi sales -- to fund Napo's
robust pipeline of potential Mytesi and crofelemer follow-on
indications."
"From a capitalization standpoint, we have made progress in 2020 as
we've worked to remove obstacles to conducting non-dilutive
financing transactions and reduced debt related to the 6-year Napo
litigation that was resolved in 2016, which returned Mytesi's
commercial rights to Napo. As a specific tactic, Jaguar has sought
to focus on long-term investors. The company has executed deals to
eliminate and exchange debt, preferences, and warrants not held by
long-term investors, to common stock to simplify the capitalization
of the company and eliminate restrictive covenants associated with
those securities, thereby facilitating non-dilutive financing
alternatives."
Royalty Financing Update and Focus on Long-Term Investors
On Oct. 9, 2020, the company closed on the first $6 million tranche
of its previously announced non-dilutive royalty financing
transaction -- which now has the potential to total $17 million --
involving the sale of royalty rights related to the future revenue
stream for Mytesi. As announced Oct. 7, 2020, the initial tranche
of this financing transaction increased from $5 million to $6
million by mutual consent with the lender, providing additional Q4
2020 funding for Napo's recently initiated single pivotal Phase 3
clinical trial of crofelemer (Mytesi) for prophylaxis of diarrhea
in adult cancer patients receiving targeted therapy ("cancer
therapy-related diarrhea" (CTD)), with potential additional
tranches of $5 million and $6 million in February 2021 and July
2021, respectively, subject to mutual agreement between the
parties.
"We would not have been able to execute a royalty deal of this size
and type in the past given the restrictive covenants in our
outstanding Series A Preferred Stock," Conte said. "We believe the
recent elimination and exchange of the Series A Preferred Stock
coincident with substantially increased sales of Mytesi — Mytesi
Q2 2020 net sales represent 378% of Q1 2020 net sales, setting a
new base level from which to grow our commercial business -- will
allow us to engage in additional non-dilutive financing
opportunities, including business development collaborations, to
ensure crofelemer's development, regulatory approval, and
commercialization to all the target patient populations in need, on
a global basis."
Jaguar and Napo Enter into Fourth Amendment to the Accounts
Receivable Purchase Agreement with Oasis Capital, LLC, Dated
May 12, 2020
Jaguar and Napo have jointly entered into a fourth amendment to the
accounts receivable purchase agreement with Oasis Capital, LLC,
dated May 12, 2020, pursuant to which Oasis agreed to purchase
additional accounts receivable of the Company related to the sales
of the Company's Mytesi drug product to Cardinal Health for the
period of Sept. 8, 2020 through Oct. 7, 2020. The Fifth Tranche
Accounts Receivable has a gross value of $2,117,875.20,
representing customer billings over a 30-day period. The terms of
such purchase are substantially the same as the previous accounts
receivable purchase agreements with Oasis and allow the Company to
move up by almost two months the cash available from sales of
Mytesi.
In Honor of Yesterday's Indigenous Peoples' Day, Jaguar and Napo
Express Gratitude to the Global and Amazonian Indigenous
Communities for Being the Guardians of Our Planet's Ecosystems
"In honor of Indigenous Peoples' Day, we would like to express our
gratitude to the global and Amazonian Indigenous communities for
being the guardians of our planet's ecosystems. We also want to
share our empathy and compassion with all the people, families and
communities who have had such grave loss of life, of elders, of
shamans, of teachers and wise people due to the impact of
COVID-19," commented ethnobotanist Steven King, PhD, Jaguar's chief
sustainable supply, ethnobotanical research & IP officer. "We know
that the Indigenous communities in North America, Central America
and South America have been intensively and disproportionately
impacted by the virus, in part due to the lack of support, health
care, and vital supplies that have not reached them. We are
grateful for the collaboration and teachings that have helped
Jaguar and Napo bring new plant-based medicine into the lives of
people living with HIV-related diarrhea. We want to pay homage to
the global Indigenous peoples for their strength, determination,
creativity, and powerful self determination to help guide us all
towards a sustainable, meaningful, respectful relationship with the
Earth, with each other and our spirits. We are committed to
working as best we can to support and honor the Indigenous peoples
of the world, with respect and gratitude."
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.
JBH PETROLEUM: Seeks Approval to Hire Rafool & Bourne as Counsel
----------------------------------------------------------------
JBH Petroleum & Foodmart, Inc. seeks approval from the U.S.
Bankruptcy Court for the Central District of Illinois to employ
Rafool & Bourne, P.C. as its bankruptcy counsel.
The firm will render these legal services to the Debtor:
(a) give the Debtor legal advice with respect to its rights,
powers and duties in connection with the administration of its
bankruptcy estate and the disposition of its property;
(b) take such action as may be necessary with respect to
claims that may be asserted against the Debtor and property of its
estate;
(c) prepare legal documents;
(d) represent the Debtor with respect to inquiries and
negotiations concerning creditors of its estate and property;
(e) initiate, defend or otherwise participate in all
proceedings before the bankruptcy court or any other court of
competent jurisdiction; and
(f) perform any and all other legal services on behalf of the
Debtor which may be required to aid in the proper administration of
its bankruptcy estate.
The Debtor has agreed to compensate Rafool & Bourne for attorney
work at the rate of $250 per hour and reimburse the firm for
work-related expenses incurred.
Prior to the filing date, the Debtor provided Rafool & Bourne with
a $10,000 retainer, of which $1,717 was used to pay the filing
fee.
Rafool & Bourne is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Sumner A. Bourne, Esq.
Rafool & Bourne, P.C.
411 Hamilton Blvd, Suite 1600
Peoria, IL 61602
Telephone: (309) 673-5535
Facsimile: (309) 673-5537
Email: notices@rafoolbourne.com
About JBH Petroleum & Foodmart
JBH Petroleum & Foodmart, Inc. filed a voluntary petition for
relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D.
Ill. Case No. 20-81019) on Oct. 5, 2020. At the time of the
filing, Debtor had estimated assets of between $500,001 and
$1,000,000 and liabilities of between $1,000,001 and $10,000,000.
Judge Thomas L. Perkins oversees the case. Rafool & Bourne, P.C.
serves as the Debtor's legal counsel.
JM BROWN: Unsec. Creditors to Receive $583 per Month over 5 Years
-----------------------------------------------------------------
JM Brown Properties, LLC, filed with the U.S. Bankruptcy Court for
the Middle District of North Carolina, Greensboro Division, a Plan
of Reorganization and a Disclosure Statement dated Aug. 25, 2020.
This Plan of Reorganization contemplates payments to the various
classes of creditors using income derived from rental income. The
Debtor's Plan significantly depends on rental income derived from
Boneyard.
Class VI Allowed General Unsecured Claims, estimated to total
$35,000, will be paid in full in equal monthly installment of
$583.33. The first payment shall be due and payable on the
effective date of the Plan and shall be paid on the same day of
each month for a period of five years.
Class VII Insider Claims shall be subordinated to all other Claims
in this proceeding and no payment on Insider Claims shall be
received, if at all, until all payments on the Claims of Class I
through Class VI are paid in full or received as dividends, all as
required under the terms and conditions of this Plan.
The Debtor anticipate, based upon projected rental income and
resulting cash flow and the restructuring of current indebtedness,
that the Reorganized Debtro will have sufficient funds to pay debt
obligations pursuant to the terms specified in this Plan.
A full-text copy of the Disclosure Statement dated August 25, 2020,
is available at https://tinyurl.com/y4aa5t7f from PacerMonitor.com
at no charge.
The Debtor is represented by:
Samantha K. Brumbaugh, Esq.
Ivey, McClellan, Gatton & Siegmund, LLP
100 South Elm Street, Suite 500
Greensboro, NC 27401
Telephone: (336) 274-4658
Facsimile: (336) 274-4540
E-mail: dws@iveymcclellan.com
About JM Brown Properties
JM Brown Properties, LLC, a company based in Madison, N.C., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C.
Case No. 20-10475) on May 26, 2020. At the time of the filing, the
Debtor disclosed assets of between $100,001 and $500,000 and
liabilities of the same range. Judge Benjamin A. Kahn oversees the
case. Ivey, McClellan, Gatton & Siegmund is Debtor's legal
counsel.
K&W CAFETERIAS: Committee Seeks to Hire Waldrep Wall as Counsel
---------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 case of K&W Cafeterias, Inc. seeks approval from the
U.S. Bankruptcy Court for the Middle District of North Carolina to
employ Waldrep Wall Babcock & Bailey PLLC as its bankruptcy
counsel.
The firm will render these legal services to the committee:
(a) Acting as bankruptcy counsel for the committee in the
Middle District of North Carolina;
(b) Providing the committee with legal advice concerning its
duties, powers, and rights in relation to the Debtors and the
administration of the Debtor's bankruptcy case;
(c) Assisting the committee in the investigation of the acts,
conduct, assets, and liabilities of the Debtor, and any other
matters relevant to the case or to the formulation of a plan of
reorganization;
(d) Assisting the committee and the Debtor in the formulation
of a plan of reorganization, or if appropriate, to formulate the
committee's own plan of reorganization;
(e) Taking such action as is necessary to preserve and protect
the rights of all of the Debtor's unsecured creditors;
(f) Investigating potential causes of action against third
parties for the benefit of the bankruptcy estate;
(g) Preparing legal documents;
(h) Conducting appropriate discovery and investigations into
the Debtor's operations, valuation of assets, lending
relationships, management, and causes of action; and
(i) Performing all other legal services that may be necessary
and in the best interests of the unsecured creditors of the
Debtor's estate.
The customary hourly rates of Waldrep Wall's attorneys and
professionals expected to be involved in this matter are as
follows:
Thomas W. Waldrep, Partner $640
James C. Lanik, Partner $475
Jennifer B. Lyday, Partner $415
Evan A. Lee, Associate $260
John Van Swearingen, Associate $260
Brenda D. Carter, Paralegal $220
Marybeth Ford, Paralegal $220
Waldrep Wall will charge the committee for services provided and
for other charges and disbursements incurred in the rendition of
legal services.
Thomas Waldrep, Jr., Esq., a partner at Waldrep Wall, 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:
Thomas W. Waldrep, Jr., Esq.
James C. Lanik, Esq.
Jennifer B. Lyday, Esq.
Waldrep Wall Babcock & Bailey PLLC
1076 W. Fourth Street
Winston-Salem, NC 27101
Telephone: (336) 717-1280
Facsimile: (336) 717-1340
Email: notice@waldrepwall.com
About K&W Cafeterias
K&W Cafeterias, Inc., a company based in Winston Salem, N.C., filed
a Chapter 11 petition (Bankr. M.D.N.C. Case No. 20-50674) on Sept.
2, 2020. Judge Benjamin A. Kahn presides over the case. In the
petition signed by Dax C. Allred, president, the Debtor disclosed
$30,085,274 in assets and $22,189,229 in liabilities.
The Debtor has tapped Northen Blue, LLP as its bankruptcy counsel
and Bell Davis & Pitt P.A. and Constangy Brooks Smith & Prophete
LLP as its special counsel.
William Miller, U.S. bankruptcy administrator, appointed a
committee to represent unsecured creditors in Debtor's Chapter 11
case. The committee tapped Waldrep Wall Babcock & Bailey PLLC as
its bankruptcy counsel.
LAS VEGAS MONORAIL: Judge Approves Series of Motions
----------------------------------------------------
Richard N. Velotta of Las Vegas Review-Journal reports that the
U.S. Bankruptcy Court Judge Natalie Cox on Tuesday, October 13,
2020, approved a series of motions pushing the Las Vegas Monorail
Co. bankruptcy filing forward as an estimated 49 creditors lined up
to be paid debts owed by the company.
With the court closed by the coronavirus pandemic, attorneys for
creditors participated by telephone in the 25-minute hearing.
The company filed for Chapter 11 bankruptcy protection as part of
its sales agreement with the Las Vegas Convention and Visitors
Authority.
The LVCVA is set to buy the 3.9-mile electric transit system for up
to $24.12 million plus a $1.8 million nonrefundable earnest money
deposit.
Part of the motivation for acquiring the monorail is to secure
control of its noncompete agreement that prevents potential
competitors from entering the transportation market on the east
side of the Strip.
The LVCVA has been working with The Boring Co. for an underground
people-mover system that uses Tesla vehicles in dedicated tunnels
to move conventioneers from one end of the Las Vegas Convention
Center campus to the other.
Elon Musk's Boring Co. is exploring the possibility of expanding
the underground system citywide but wouldn't be able to do so with
the noncompete agreement in effect. On Tuesday, October 13, 2020,
the LVCVA announced that The Boring Co. is close to filing for
permits to begin building the citywide system.
This isn't the first time the Monorail has filed for bankruptcy.
Ridership hit its peak around 2007, when the system was
transporting around 7 million passengers a year, but in the wake of
the Great Recession the company sought Chapter 11 bankruptcy
protection in 2010.
Once the company emerged from bankruptcy, it continued to struggle
financially and was never able to fund some of the expansions that
leaders felt were essential to long-term success.
About Las Vegas Monorail Company
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.
LVMC filed for Chapter 11 bankruptcy protection (Bankr. D. Nev.
Case No. 10-10464) on Jan. 13, 2010. It disclosed $395,959,764 in
assets and $769,515,450 in liabilities as of the petition date.
LVMC has tapped Garman Turner Gordon LLP as its bankruptcy counsel,
Alvarez & Marsal North America, LLC as financial advisor, and
Stradling Yocca Carlson & Rauth and Jones Vargas as special
counsel. Gordon Silver assists LVMC in its restructuring effort.
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.
LENNAR CORP: S&P Alters Outlook to Positive, Affirms 'BB+' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Lennar Corp. to positive
from stable. At the same time, S&P affirmed all its ratings,
including its 'BB+' long-term issuer credit rating on the company
and 'BB+' issue-level rating on its unsecured debt.
The positive outlook reflects lower debt leverage and prudent
capital allocation.
The positive outlook on Lennar takes into account almost two years
of lower debt leverage, as well as prudent capital allocation
before and during the pandemic. Unexpectedly favorable conditions
for new home construction during the pandemic in 2020 boosted the
fortunes of most U.S. homebuilders, including Lennar, supporting
this company's continued deleveraging. The company has reduced debt
to about $7.2 billion from more than $10 billion in early 2018
after the acquisition of CalAtlantic. In addition, the company
improved margins while shifting its mix to lower entry-level price
points and despite early 2020 construction stoppages, as well as
higher pandemic-related costs. Strong demand despite skyrocketing
unemployment has boosted prices 5%-10% in the second half of 2020
while supply remains fundamentally constrained by land inventories
and labor. Prospects for good free cash flow should enable the
company to keep adjusted debt to EBITDA below 3x while it returns
capital to shareholders, demonstrated in October 2020 by doubling
its dividend. Like many homebuilders, the company has been using
more options to secure land instead of outright purchases, which
consumes less cash for inventory compared with other cyclical peaks
in the housing cycle.
Higher prices offset the transition to lower price points and
higher input costs. Strong demand and prices from record-low
mortgage rates have been a significant offset amid an industry-wide
shift to lower price points aimed at capturing a growing cohort of
entry-level homebuyers. The entry-level cohort should provide a
strong secular underpinning for better volumes, as household
formations outstrip housing starts. In addition, faster inventory
turns with a land-light strategy should boost returns if the
company can sustain its margins at a lower average selling price
(ASP).
S&P said, "We now assume Lennar's ASP will drop only about 1% in
fiscal 2020, which is 3%-4% higher than our estimate even before
the pandemic. At that time, we estimated that Lennar would need to
reduce unit production costs by about 300 basis points in 2020 to
preserve its dollar contribution from higher volumes, but higher
prices have offset most of the margin decrement from higher costs
so far this year. Unexpectedly strong prices could add a run rate
of $5,000-$10,000 to each of the company's more than 50,000
closings, boosting annualized contribution margin by $300 million
or 10% of our estimated 2020 EBITDA. Moreover, Lennar cut selling
general and administrative (SG&A) expenses early in 2020 in
response to uncertainty about COVID-19, which further accelerated
profit growth and supported its record-low SG&A to sales ratio;
however, some of these savings will reverse with strong business
conditions. Material costs, which account for more than half of
total cost, have risen with sharply higher lumber prices, and labor
(43% of costs) continues to be a headwind, with wages up about 3%
year over year."
Homebuilder margins are under pressure industrywide, with
persistently rising costs for land and labor, deteriorating
affordability that limits ASP growth, and volume increases that are
constrained by the availability of skilled labor. The industry's
EBITDA margins have dropped marginally in each of the past three
years, even as revenue grew organically at more than 10%, partly
because homebuilders have now churned through all the lower-cost
land inventories acquired after the housing crisis. However,
Lennar's scale makes it quite efficient, as demonstrated by
adjusted EBITDA margins and returns on capital that rank with its
highest-rated peers and are higher than the industry average. For
example, Lennar's adjusted EBITDA margin has averaged about 13.5%
over the past three years, improving in fiscal 2019 with the
integration of CalAtlantic. In addition, Lennar's return on capital
has averaged almost 13% over the same period, which could improve
with steady earnings growth and reduced capital intensity. Lennar's
other key efficiency indicators, such as homebuilder gross margins,
SG&A margins, and inventory turns are also consistent with industry
leaders.
Housing sales are a bright spot in the pandemic, but homebuilders
themselves watch unemployment more than interest rates. The
housing market has recovered from its collapse in April. Various
indicators--sales of new and existing homes, pending sales, and
building permits--all shot up to levels last seen 13 or more years
ago as record-low interest rates and inventories, which have led to
bidding wars, have played a key role. S&P Global Ratings'
economists forecast that housing starts will remain steady in 2020
at about 1.3 million, with a second-half run-rate of 1.4 million
that should close the gap from April and May lockdowns.
S&P said, "We also believe the recent strength might be temporary
and housing starts will overshoot their long-run trend in the first
three quarters of the forecast. We also assume that some of the
strong demand in late 2020 is being pulled forward from 2021, so
that we estimate starts will drop slightly to 1.3 million in 2021."
Finally, job gains in September were less than half the 1.5 million
pace in August. Also, of the 22.2 million jobs destroyed during the
recession, 10.7 million jobs (48.5%) are still lost seven months
into the recovery."
Lennar is one of the largest U.S. homebuilders and is improving
debt leverage the fastest.
S&P said, "Strong geographic diversity, with a portfolio across 76
markets in 21 states, supports our view of Lennar's business
position. We estimate that the company is the leading builder in 19
of the top 50 markets. Lennar's business is as strong as many of
its peers and might be stronger if its profitability begins to
exceed the others following the CalAtlantic transaction. Debt
leverage is a significant differentiator between Lennar and some
higher-rated peers. At the end of 2019, each of Lennar's peers had
leverage of less than 3x for more than a year while MDC Holdings
and D.R. Horton had leverage of less than 2x. Lennar ended 2019
with leverage below 3x for the first time in a decade, lagging its
peers on the path to investment-grade credit measures. We are
projecting Lennar's leverage will continue improving rapidly
compared with most peers, toward 2x in 2020."
"We expect Lennar will sustain adjusted debt to EBITDA below 2.5x
in 2020 despite high unemployment because of pandemic-induced
closures. Tight supply and price gains are offsetting higher costs
and the transition to a mix of lower-priced entry-level products,
but protracted unemployment could ultimately slow demand. The
company's lower debt levels, improving returns, and good cash flow
should provide some buffer to swings in earnings because of either
the industry's inherent cyclicality or changes in business mix.
Nevertheless, margins could be vulnerable to lower ASPs after
several years of price appreciation."
"We could raise the ratings on Lennar to the investment-grade
category in the next 12 months if the company maintained adjusted
debt to EBITDA of 2x-3x and debt to capital below 45%. In such a
scenario, we expect that Lennar would build enough credit buffer to
sustain a typical homebuilding downturn, which could entail a year
or two of 25%-35% lower EBITDA. We expect Lennar will use strong
cash flow to balance modest land inventory growth, debt reduction,
and shareholder returns over the next few years."
"We could revise the outlook back to stable if Lennar's adjusted
debt to EBITDA moved toward 4x because of any combination of
debt-funded initiatives, weaker market conditions, or operating
setbacks. That said, Lennar's lower debt levels make higher
leverage less acute from margin degradation alone, and the
company's size makes the debt quantum for most acquisitions
relatively small. Therefore, debt-funded shareholder returns and
timing acquisitions with good market conditions are key to
preserving a buffer to potentially weaker earnings in this cyclical
industry."
LIGADO NETWORKS: Sweetening Debt Deal to Avert Bankruptcy
---------------------------------------------------------
Davide Scigliuzzo and Gowri Gurumurthy of Bloomberg News report
that wireless communication company Ligado Networks LLC is
considering sweetening the terms on a $4.3 billion debt offering to
refinance upcoming maturities and stave off bankruptcy, according
to people with knowledge of the matter.
The company is negotiating some changes that would make the deal
more attractive to potential investors after facing some resistance
on the original structure, the people said, asking not to be
identified because the talks are private.
It had been pitching interest rates as high as 16% on the loan and
bond deals, which were expected to be completed last week.
About Ligado Networks
Ligado Networks, formerly known as LightSquared, is an American
satellite communications company. It creates innovative commercial
and technology solutions, delivers highly-secure and ultra-reliable
communications over Custom Private Networks, all to accelerate
investment in and deployment of 5G networks.
LORD & TAYLOR: IP, E-Commerce Gets $3.75M Bid from Zar Apparel
--------------------------------------------------------------
Jeremy Hill of Bloomberg News reports that Zar Apparel Group bid
$3.75 million cash plus certain assumed liabilities for
intellectual property and e-commerce platforms belonging to Le Tote
Inc. and subsidiary Lord & Taylor, court papers show.
The bid does not include any real estate or lease interests, per
court papers. The deal allows Le Tote to continue using Lord &
Taylor trademarks until the end of February 2021 while it
liquidates remaining stores.
Zar will serve as the so-called stalking horse for the assets,
meaning a higher bid could still emerge. Status comes with break-up
fee equal to 3% of the cash portion of the offer.
About Lord & Taylor
Privately-held Lord & Taylor LLC -- http://www.lordandtaylor.com/
-- is a New York-based luxury department store that offers luxury
products or women such as belts, shoes, clothes, handbags as well
as accessories. Founded in 1826, the oldest department store in the
country grew to beyond 50 locations and 66,000 employees
nationwide. The chain had 38 stores that were in operation before
the Covid-19 outbreak.
About Le Tote Inc.
Le Tote, Inc. and its affiliates operate both an online,
subscription-based clothing rental service and a full-service
fashion retailer with 38 brick-and-mortar locations and a robust
e-commerce platform. In response to the COVID-19 pandemic, Le Tote
temporarily closed all retail locations in March 2020, although
they continue to operate the Le Tote and Lord & Taylor websites.
Le Tote and its affiliates sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-33332) on
Aug. 2, 2020. At the time of the filing, Debtors disclosed assets
of between $100 million and $500 million and liabilities of the
same range.
Debtors have tapped Kirkland & Ellis LLP and Kirkland & Ellis
International LLP as their legal counsel, Kutak Rock LLP as local
counsel, Berkeley Research LLC as financial advisor, and Nfluence
Partners as investment banker. Stretto is the notice, claims and
balloting agent and administrative advisor.
M&K ROGERS: Unsecured Creditors to be Paid in Full Over 5 Years
---------------------------------------------------------------
M&K Rogers Investments, LLC, filed with the U.S. Bankruptcy Court
for the Northern District of Texas, Fort Worth Division, a
Disclosure Statement for Plan of Reorganization dated August 25,
2020.
The Plan will be funded by the Debtor through the lease payments it
receives from the dental practice of Dr. Mike Rogers. Future
management of the Debtor will consist of the Debtor and its
managing member, Mike Rogers.
Class 4 Allowed Unsecured Claims will be paid in full over a period
of 60 months. The total paid to this Class is $35,000. The amount
will be amortized over 60 months with interest thereon at the rate
of 1.5% per annum. Payments shall commence on the first day of the
month following the Effective Date and shall continue on the first
day of each successive month thereafter until paid under the terms
of this Plan. This Class is Impaired and the holder of a Claim in
this Class is entitled to vote to accept or reject the Plan.
Class 5 Debtor's equity interests will be retained. This class is
unimpaired and are projected to be paid $0.00 under the Plan; the
holder of a Claim in this Class is not entitled to vote to accept
or reject the Plan.
A full-text copy of the Disclosure Statement dated August 25, 2020,
is available at https://tinyurl.com/y4u5rvfw from PacerMonitor at
no charge.
The Debtor is represented by:
Joyce W. Lindauer
Joyce W. Lindauer Attorney, PLLC
1412 Main St., Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
E-mail: joyce@joycelindauer.com
About M&K Rogers Investments
M&K Rogers Investments, LLC, which is primarily engaged in renting
and leasing real estate properties, filed a Chapter 11 petition
(Bankr. N.D. Tex. Case No. 20-42258) on July 6, 2020. At the time
of filing, the Debtor was estimated to have $1 million to $10
million n assets and liabilities as of the bankruptcy filing. The
Hon. Mark X. Mullin oversees the case. Joyce Lindauer, Esq., of
JOYCE W. LINDAUER ATTORNEY, PLLC, is the Debtor's counsel.
MARCO CONSTRUCTION: Seeks Approval to Hire Bankruptcy Attorney
--------------------------------------------------------------
Marco Construction Companies, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of Texas to employ Steve
Stasio, Esq., of the law firm of Stasio & Stasio P.C. as its
attorney.
Mr. Stasio will render these services:
(a) give the Debtor legal advice with respect to its powers
and duties in the continued operation of its business and
management of its property;
(b) take necessary action to avoid any liens against the
Debtor's property obtained by attachment within 90 days before the
filing of the case;
(c) represent the Debtor in connection with any reclamation
proceedings which have been instituted in the bankruptcy court;
(d) prepare legal papers; and
(e) perform all other legal services for the Debtor.
Mr. Stasio will be paid at his standard hourly rate of $350.00.
Mr. Stasio has no connection with the creditors or any other
party-in-interest and their respective attorneys, according to
court filings.
The attorney can be reached at:
Steve Stasio, Esq.
Stasio & Stasio P.C.,
The Plaza Building
303 Main Street, Suite 302
Fort Worth, TX 76102-4069
Telephone: (817) 332-5113
Facsimile: (817) 870-0335
Email: steve.stasio@stasiolawfirm.com
About Marco Construction Companies
Marco Construction Companies, Inc. sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 20-43101) on
Oct. 5, 2020. At the time of the filing, Debtor had estimated
assets of between $500,001 and $1 million and liabilities of
between $100,001 and $500,000.
Judge Edward L. Morris oversees the case. Steve Stasio, Esq., of
Stasio & Stasio P.C. is the Debtor's legal counsel.
MAS CORP: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: MAS Corp
6300 East Hampden Ave
Suite 1212
Denver, CO 80222
Chapter 11 Petition Date: October 13, 2020
Court: United States Bankruptcy Court
District of Colorado
Case No.: 20-16743
Debtor's Counsel: Aaron A. Garber, Esq.
WADSWORTH GARBER WARNER CONRARDY, P.C.
2580 West Main Street
Suite 200
Littleton, CO 80120
Tel: 303-296-1999
E-mail: agarber@wgwc-law.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Steven Muth, president.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/NXX3PQA/MAS_Corp__cobke-20-16743__0001.0.pdf?mcid=tGE4TAMA
MD AMERICA: MeiDu's Texas Oil Explorer in Chapter 11
----------------------------------------------------
Steven Church of Bloomberg News reports that MeiDu Energy Corp.'s
Texas oil explorer filed for bankruptcy after lenders won a court
battle for control of the company's board.
MD America Energy has proposed a restructuring deal that would
reduce debt and hand ownership to the lenders, according to court
papers filed in Houston. It owes them $117.8 million and says it
has their unanimous support.
The dispute revolves around payments that MeiDu supposedly promised
but never made, including one for rescue financing to avert a
default after the oil and gas business stumbled, MD America said in
its court filing.
About MeiDu Energy Corp.
MeiDu Energy Corporation explores and process energy products. The
Company produces crude oil, natural gas, and other energy products.
About MD America
MD America is a Texas based oil and gas operating company engaged
in the acquisition, development, exploitation and production of
crude oil and natural gas properties in East Texas. Assets
currently consist of approximately 71,000 net acres with over 300
drilled and operated wells.
MD America Energy, LLC, which is the principal operating entity,
currently owns approximately 64,683 net acres with 256 operated
wells, focused in the Brazos Valley in East Texas and
over 100 miles of low-pressure natural gas gathering lines owned
and operated by MD America's subsidiary, MD America Pipeline LLC.
For more information, visit https://www.mdae.com/
On Oct. 12, 2020, MD America Energy, LLC, and its affiliates sought
Chapter 11 protection (Bankr. S.D. Tex. Case No. 20-34966) to seek
confirmation of their prepackaged Chapter 11 plan.
The Company is being advised by the law firm of Porter Hedges LLP,
and Paladin Management Group, as CRO, and FTI Consulting, Inc., as
financial advisor. Prime Clerk LLC is the claims agent.
MD WILLIAMS: Seeks Approval to Hire Bankruptcy Attorney
-------------------------------------------------------
MD Williams Logging, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Alabama to employ Barry A.
Friedman, Esq., of Barry A. Friedman & Associates, P.C., as
attorney.
Mr. Friedman will render these professional services to the
Debtor:
(a) take appropriate action with respect to secured and
priority creditors;
(b) take appropriate action with respect to possible voidable
preferences and transfers;
(c) prepare on behalf of the debtor-in-possession necessary
petitions. Answers, orders, reports and other papers and to try
before the court whatever issues are deemed necessary;
(d) investigate the accounts of the Debtor and the financial
transactions related thereto; and
(e) perform all other legal services for debtor-in-possession
which may be deemed necessary.
The attorney will be compensated at an hourly rate of $250, plus
expenses.
Mr. Friedman, a managing partner at Barry A. Friedman & Associates,
disclosed in court filings that he is a "disinterested person" as
that term is defined in section 101(14) of the Bankruptcy Code.
The attorney can be reached at:
Barry A. Friedman, Esq.
Barry A. Friedman & Associates, P.C.
Post Office Box 2394
Mobile, AL 36652
Telephone: (251) 439-7400
Facsimile: (251) 432-2665
About MD Williams Logging
MD Williams Logging, LLC filed a Chapter 11 petition (Bankr. S.D.
Ala. Case No. 20-12217) on Sept. 21, 2020, listing under $1 million
in both assets and liabilities. Barry A. Friedman, Esq., serves as
the Debtor's legal counsel.
MDC HOLDINGS: S&P Alters Outlook to Positive, Affirms 'BB+' Rating
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S&P Global Ratings revised its outlook to positive from stable and
affirmed its ratings on U.S. homebuilder MDC Holdings Inc.
S&P said, "We revised our outlook on MDC Holdings to positive to
reflect improvement in its credit metrics stemming from an annual
improvement in EBITDA that we forecast at roughly one-third,
pushing adjusted debt to EBITDA well below 2x. This occurred
despite the broader adverse impact on the economy from Covid-19. We
believe this stronger than expected performance stems from very low
mortgages rates (around 3% for a conventional 30 year mortgage).
MDC Holdings, and other homebuilders, also appear to have benefited
from homebuyers' desire for more space during the pandemic."
"We expect adjusted debt to EBITDA to remain firmly below 2x and
adjusted debt to capital of about 25%. Importantly, maintaining
adjusted debt to EBITDA of less than 2x during the housing recovery
would provide the company with a cushion of more than one full turn
to weather moderate downturns in the future."
"MDC's improving leverage metrics continue to be driven by robust
profit growth. We expect the company to boost revenues and EBITDA
by nearly 20% and above 30%, respectively, in 2020. As a result of
ongoing sales volume-based growth and further margin improvement,
we now expect MDC to push debt to EBITDA toward 1x into 2021."
"The homebuilding sector performed much better than we forecasted
at the onset of the pandemic and we expect solid performance to
continue through 2021. As we headed into the steepest recession
since World War II in late March, we assumed publicly traded
homebuilders would report a drop in new home orders of as much as
50% in the second quarter. Unemployment spiked to nearly 15% in
April and GDP fell 32% in the quarter. Ordinarily these conditions
would push potential homebuyers to the sidelines. But sales
rebounded sharply in May and through September. This is partly
because 30 year conventional interest rates fell to near-historic
lows of 3%. But it also seems the pandemic fueled a desire to move
to less dense locales and into single family homes with more space
to work and learn from home. We think home sales will remain solid
next year based on our forecast for a gradual economic recovery in
2021 (3.9% GDP growth), lower unemployment (6.7%), and continued
low mortgage rates (3% for a conventional 30 year loan). Because of
this, our economists forecast housing starts to tick up from 1.3
million in 2019 to 1.32 million in 2020, and to 1.33 million in
2021."
"The positive outlook on MDC Holdings is based on our view that the
company will maintain its recently improved credit measures over
the next 12 months, including adjusted debt to EBITDA firmly below
2x, as mortgage rates remain low and the broader economy gradually
recovers from the Covid-19 driven recession."
S&P would upgrade MDC over the next 12 months if it demonstrates
that it can maintain adjusted debt to EBITDA at less than 2x and
adjusted debt to capital at less than 35%. This scenario assumes:
Housing starts continue to improve, albeit at a slower pace
The company maintains its recently improved EBITDA margins while
continuing to execute its organic growth strategy.
S&P would revise its outlook on MDC Holdings to stable if the
conditions in the housing market are weaker than it assumes in its
base-case forecast, causing the company's debt to EBITDA to
increase to 3x or higher. This could occur if a second and more
prolonged recession, perhaps tied to a resurgence in the COVID-19
virus, caused:
-- Revenues to drop 33%, and
-- EBITDA margins to drop 5% from its forecast.
MERITAGE HOMES: S&P Alters Outlook to Positive, Affirms 'BB' ICR
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S&P Global Ratings revised its outlook to positive from stable and
affirmed its 'BB' ratings on Meritage Homes Corp. and on the
company's senior unsecured notes.
S&P said, "The positive outlook indicates the possibility that we
will raise our rating on the company during the next year if it is
able to maintain debt to EBITDA below 3x."
"Our outlook revision to positive reflects Meritage's meaningfully
improved operating performance, resulting in better credit metrics
than we had anticipated at the onset of the pandemic when sales
were initially down about 50% for several weeks. However, since
then, sales rebounded sharply and Meritage's reported second
quarter (ended June 30) orders were up 32% from the previous year.
We expect this improvement to be sustainable because of very low
mortgage rates and buyers' apparent desire for more space. This
supports our revised forecast for EBITDA to approach $600 million,
with adjusted net debt to EBITDA below 2x in fiscal 2020."
"The homebuilding sector performed much better in the second
quarter than we forecast at the onset of the pandemic, and we
expect solid performance to continue through 2021. As we headed
into the steepest recession since World War II in late March, we
assumed publicly traded homebuilders would report a drop in new
home orders of as much as 50% in the second quarter. Unemployment
spiked to nearly 15% in April and GDP fell 32% in the quarter.
Ordinarily these conditions would push potential homebuyers to the
sidelines. But sales rebounded sharply in May and through
September. This is partly because 30-year conventional interest
rates fell to near-historic lows of 3%. But it also seems the
pandemic fueled a desire to move to less dense locales and into
single-family homes with more space to work and learn from home. We
think home sales will remain solid next year based on our forecast
for a gradual economic recovery in 2021 (3.9% GDP growth), lower
unemployment (6.7%), and continued low mortgage rates (3% for a
conventional 30-year loan). Because of this, our economists
forecast housing starts to tick up to 1.32 million in 2020, and to
1.33 million in 2021, from 1.3 million in 2019."
Better economic conditions and Meritage's shift to more affordable
homes positions the company to grow and to maintain a stronger
financial risk profile. Meritage has been transitioning almost
exclusively to the first-time and first-time move-up segment of the
housing market (the average sales price dropped 6% to $359,000 in
the second quarter of 2021 compared with the previous year). These
segments have experienced good demand in recent years. This product
is also typically built on less expensive lots, can be constructed
more quickly than larger homes with more complicated floor plans,
and sell more quickly (the second quarter absorption pace improved
42% year over year). This business model is less capital intense
and should enable the company to support organic growth without
increasing gross debt levels much above the $1 billion reported on
June 30, 2020.
S&P said, "Credit ratios are likely to be better than our upgrade
thresholds in 2021, but the potential for another wave of COVID-19
to push the economy back into recession is a downside risk. We are
forecasting revenue to rise about 16% to nearly $5 billion in 2021.
If EBITDA margins hold steady at near 14%, Meritage would post
approximately $690 million of EBITDA. This would result in adjusted
net debt to EBITDA remaining below 2x next year, with
EBITDA-to-interest coverage above 10x. Adjusted net debt to capital
would also be below 30% in this scenario. These ratios are strong.
But we did see a sharp, albeit brief, drop in sales in spring 2020,
and we suspect sales might not bounce back as quickly if we
experience another steep and potentially longer-lived recession in
the future."
"The outlook is positive based on our view that Meritage will
continue to sustain debt to EBITDA below 3x. This scenario
contemplates a gradual economic recovery and sustained low mortgage
rates over the next 12 months. This scenario also assumes that
Meritage will continue to expand its platform, with an emphasis on
entry-level product while maintaining steady debt levels and gross
margin at about 21%."
S&P would upgrade Meritage during the next year if leverage
remained below 3x EBITDA. This could occur in the likely event:
-- Revenue remained above $3.5 billion (30% below S&P's base
case),
EBITDA margin stayed above 10%, and
-- Reported debt levels were maintained near $1 billion.
S&P said, "We could revise the outlook to stable if we thought debt
to EBITDA would rise above 3x. This could occur if a second wave of
COVID-19 triggered a similarly severe but more prolonged recession
relative to what we witnessed in the first half of 2020, causing
EBITDA to fall 50% from forecast levels."
MGM RESORTS: S&P Rates $500MM Senior Unsecured Notes 'BB-'
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S&P Global Ratings assigned its 'BB-' issue-level rating and '3'
recovery rating to Las Vegas-based casino operator MGM Resorts
International's proposed $500 million senior unsecured notes due
2028 and placed the issue-level rating on CreditWatch with negative
implications. The '3' recovery rating indicates its expectation for
meaningful recovery (50%-70%; rounded estimate: 60%) in the event
of a payment default. S&P's 'BB-' issue-level rating and '3'
recovery rating on MGM's existing senior unsecured debt remain
unchanged.
S&P expects the company to use the proceeds from these notes for
general corporate purposes, which may include refinancing its
existing debt. The proposed notes issuance is largely leverage
neutral given some expected debt repayment with the notes proceeds,
and since it nets excess cash on the balance sheet.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario contemplates a payment default
occurring by 2024 because of a significant decline in cash flow due
to prolonged economic weakness and increased competitive pressures,
particularly in Las Vegas where MGM Resorts' domestic operations
are concentrated.
-- S&P's analysis is based on the company's wholly owned domestic
operations.
-- S&P assumes MGM Resorts' $1.5 billion revolver credit facility
is 85% drawn at the time of default.
-- S&P assumes any debt maturing between now and the year of
default is refinanced on similar terms and its maturity is extended
to at least the year of default.
Simplified waterfall
-- EBITDA at emergence: About $670 million
-- EBITDA multiple: 6.5x
-- Gross recovery value: $4.4 billion
-- Net recovery value (after 5% administrative expenses): $4.1
billion
-- Estimated senior unsecured claims: $6.8 billion
-- Value available for senior unsecured claims: $4.1 billion
-- Recovery expectations: 50%-70% (rounded estimate: 60%)
MOUNT MORRIS: Unsecured Creditors to be Paid in Full in 6 Months
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Mount Morris Mobile Home Park, LLC, filed a Modified Combined Plan
and Disclosure Statement.
The Debtor has engaged in extensive negotiations with the Estate of
Bruce Raze and believes that as result this plan will be confirmed
on a consensual basis.
Pending payment of the Allowed Claim, an amount equal to the
previously approved monthly Adequate Protection Payment (i.e.
$9,000) (the "Raze Payments") will continue to be paid on a
post-confirmation basis, on or prior to the first day of each
month, directly to the Raze Estate, pursuant to wire instructions
provided by the Raze Estate to the Debtor such that they are
actually received on the first day of each month.
The Raze Payments will be applied (i) first to any unpaid interest
paid by the Raze Estate to TriTalent on that certain Promissory
Note dated April 10, 2019 between TriTalent and Bruce Raze that
became due on July 1, 2020 and each month thereafter, (ii) then to
fees owed to TriTalent incurred by the Raze Estate in extending the
TriTalent Note, and (iii) then to interest owed on the Note.
Class II General Unsecured Claims. The Debtor has listed $7,875 in
known unsecured debt along with an unknown claim that the Debtor
believes relates to an incident prior its ownership of the
property. The Debtor intends to pay its obligations to Consumer's
Power and, if his claim isn't waived, to Peter Doerr in full. These
claims will be paid in full within six months of confirmation.
The Debtor's principals, Staci Walbridge and Jeremy Richardson,
intend to remain with the business.
The Debtor will generate the funds necessary for the execution of
this Plan through the earnings of the Reorganized Debtor.
A full-text copy of the Modified Combined Plan and Disclosure
Statement dated August 21, 2020, is available at
https://tinyurl.com/y3ms8v3h from PacerMonitor at no charge.
The Debtor is represented by:
Peter T. Mooney, Esq.
Simen, Figura & Parker, PLC.
5206 Gateway Centre, Ste 200
Flint, MI 48507
Tel: 810-235-9000
E-mail: pmooney@sfplaw.com
About Mount Morris Mobile Home Park
Mount Morris Mobile Home Park, LLC, a company that operates a
mobile home park in Genesee Township, Mich., filed a Chapter 11
bankruptcy petition (Bankr. E.D. Mich. Case No. 20-30939) on May 3,
2020. At the time of the filing, the Debtor had estimated assets
of less than $50,000 and liabilities of between $500,001 and $1
million.
Judge Joel D. Applebaum oversees the case.
Simen Figura & Parker, PLC, is the Debtor's legal counsel.
NEW HOME: Moody's Rates New $250MM Unsec. Notes Due 2025 'B3'
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Moody's Investors Service assigned a B3 rating to The New Home
Company Inc.'s proposed $250 million notes due 2025. New Home's
other ratings and stable outlook remain unchanged. The proceeds of
the new notes, along with cash on hand, will be used to redeem the
remaining balance on the company's 7.25% senior unsecured notes due
2022 of $292.3 million. Pro forma for the transaction, adjusted
debt to total capitalization at June 30, 2020 would decline to
57.3% from 60.6% and the company's debt maturity profile will
improve.
Assignments:
Issuer: The New Home Company Inc.
Senior Unsecured Notes, Assigned B3 (LGD4)
RATINGS RATIONALE
New Home's B3 Corporate Family Rating (CFR) reflects the company's
high leverage, limited operating history, small size and scale,
relatively thin tangible net worth and significant geographic
concentration in the state of California. These factors are offset
by the company's shift in product mix to more affordable homes,
which are in high demand at this point in the cycle, tend to sell
faster and are generally more efficient to build. New Home's rating
also considers investment in newer markets, such as the Inland
Empire in California and Arizona, which will help to diversify the
portfolio longer term.
New Home's proposed and existing senior notes are unsecured and the
creditors have the same priority of claim as the company's
unsecured revolving credit facility. The B3 rating assigned to the
senior unsecured notes, at the same level as the CFR, reflects that
this class of debt represents the preponderance of debt in the
capital structure.
Moody's expects New Home to maintain adequate liquidity over the
next 12 to 18 months. In addition to a pro forma unrestricted cash
balance of approximately $34 million at June 30, 2020. The company
also had full availability on its $60 million senior unsecured
revolver, which matures in 2022.
New Home is a publicly traded company and is required to file
quarterly and annual financial statements with the SEC, along with
any material notices. The company has eight members on its Board of
Directors, five of which are independent. The company does not pay
a regular dividend to its common shareholders. The company targets
leverage of 50% debt to capitalization, which is somewhat more
aggressive than other public peers.
The stable outlook reflects its expectation of solid demand for
single-family housing over the next 18 months driven by strong
fundamentals including low interest rates and limited housing
stock. The stable outlook also assumes the successful execution of
the company's diversification strategy and shift to lower
price-point products.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if the company can increase in size
with growth occurring outside of California. In addition, an
upgrade would require improvement in tangible net worth to greater
than $500 million, debt leverage below 50%, interest coverage above
3x and maintenance of good liquidity.
The ratings could be downgraded should debt leverage rise above
65%, interest coverage drop below 1x or liquidity weakens.
Headquartered in Aliso Viejo, California and established in 2009,
New Home designs, builds, and sells largely upper end homes in
Orange County and other parts of Southern California and somewhat
less expensive homes in Northern California. It also acts as a fee
builder for The Irvine Company. For 2019, its revenue mix was 86%
its own home sales and 14% fee build. Total revenues for twelve
months ended June 30, 2020 were $617 million.
The principal methodology used in this rating was Homebuilding And
Property Development Industry published in January 2018.
NOBLE ENERGY: Egan-Jones Withdraws BB- Senior Unsecured Ratings
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Egan-Jones Ratings Company, on October 5, 2020, withdrew its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Noble Energy Incorporated.
Headquartered in Houston, Texas, Noble Energy, Inc. is an
independent energy exploration and production company.
NORTHERN DYNASTY: Hails Gov. Action to Address Supply Chain Issues
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Northern Dynasty Minerals Ltd. acknowledged the first tangible step
the US government has taken to address the threat to America's
economy and military security posed by a severe over-reliance on
foreign adversaries for the supply of critical mineral and metals.
On Oct. 5, 2020, the United States government announced it would
direct the $60 billion US International Development Finance
Corporation, a federally-funded lender and investor created under
President Trump, to invest $25 million in a UK-based mining group
that specializes in producing rare earth metals. The investment in
TechMet Ltd. will go toward developing a mine in Brazil that
produces nickel and cobalt, both essential for the manufacture of
electric vehicles, mobile phones and batteries.
The announcement follows an Executive Order issued by President
Trump last week on "Addressing the Threat to the Domestic Supply
Chain from Reliance on Critical Minerals from Foreign Adversaries."
In it, he declares a national emergency and states "our Nation's
undue reliance on critical minerals, in processed or unprocessed
form, from foreign adversaries constitutes an unusual and
extraordinary threat."
The Trump Administration has recognized the threat to America's
economic and military security, its domestic manufacturers and
other industries, and its ability to respond to climate change
through the development of clean and renewable power, since
Executive Order 13817 ('A Federal Strategy To Ensure Secure and
Reliable Supplies of Critical Minerals') was issued in 2017.
However, the Tech-Met investment represents the first tangible
action to address this threat.
The US government previously acknowledged there are 35 minerals
"essential to the economic and national security of the United
States" that have supply chains vulnerable to disruption, including
rhenium. For 31 of these minerals, the country is reliant on
foreign producers for between 50 - 100% of its annual needs.
The most recent Executive Order goes further, authorizing use of
the Defense Production Act to speed the development of mines in the
US, and opening the door to government grants and loans to
facilitate domestic mineral production. It also suggests the US
could impose tariffs and quotas on mineral imports from China.
While Northern Dynasty does not expect any US government financial
support or regulatory assistance with respect to the advancement of
its 100%-owned Pebble copper-gold-molybdenum-silver-rhenium project
in Alaska, President & CEO Ron Thiessen said recent pronouncements
from the Trump Administration underline the importance of
developing domestic sources of strategic metals. He said the
Pebble Project can help address many of the critical mineral supply
vulnerabilities outlined in the President's recent order.
Last week, Northern Dynasty filed its '2020 Technical Report on the
Pebble Project, Southwest Alaska, USA,' highlighting a revised
mineral resource estimate that establishes Pebble as the most
significant source of rhenium in the world (see
https://www.northerndynastyminerals.com/site/assets/files/4870/2020-10-02-ndm-nr.pdf).
Rhenium is one of 35 critical minerals acknowledged by the US
government, and one for which the country is reliant on foreign
producers for 82% of its needs (see
https://doi.org/10.3133/mcs2020). Jet engine and related military
applications account for 80% of annual US rhenium consumption, in
addition to industrial applications that employ rhenium as a
catalyst – including for the production of high-octane, lead-free
gasoline.
Once in production, the proposed Pebble mine has the potential to
produce ~12,000 kg of rhenium each year over 20 years of
operations1. This represents a 143% increase in the United States'
annual production of rhenium over 2019 levels. This level of
production could also reduce the percentage of US rhenium
requirements sourced from offshore producers by 25% over 2019
levels.
Last week's Executive Order also provides impetus to the domestic
production of other metals present in the Pebble deposit, and for
which the United States is currently dependent on countries with
inferior records for health and safety, human rights and
environmental protection. In addition to rhenium, the US currently
relies on foreign producers for 35% of its annual copper needs and
68% of its annual silver needs.
"We are excited to be advancing Pebble through federal permitting
at a time when the US is focusing its attention on promoting the
domestic production of important metals," Thiessen said. "Once in
production, Pebble will significantly increase US domestic
production of several strategic minerals and metals – including
copper, rhenium, molybdenum and silver, among others – while
reducing US dependence on foreign suppliers."
From the 'Executive Order on Addressing the Threat to the Domestic
Supply Chain from Reliance on Critical Minerals from Foreign
Adversaries':
"In addition, I find that the United States must broadly enhance
its mining and processing capacity, including for minerals not
identified as critical minerals and not included within the
national emergency declared in this order. By expanding and
strengthening domestic mining and processing capacity today, we
guard against the possibility of supply chain disruptions and
future attempts by our adversaries or strategic competitors to harm
our economy and military readiness. Moreover, additional domestic
capacity will reduce United States and global dependence on
minerals produced in countries that do not endorse and pursue
appropriate minerals supply chain standards, leading to human
rights violations, forced and child labor, violent conflict, and
health and environmental damage. Finally, a stronger domestic
mining and processing industry fosters a healthier and
faster-growing economy for the United States. Mining and mineral
processing provide jobs to hundreds of thousands of Americans whose
daily work allows our country and the world to "Buy American" for
critical technology."
About Northern Dynasty Minerals
Northern Dynasty -- http://www.northerndynastyminerals.com/-- is a
mineral exploration and development company based in Vancouver,
Canada. Northern Dynasty's principal asset, owned through its
wholly-owned Alaska-based US subsidiary Pebble Limited Partnership,
is a 100% interest in a contiguous block of 2,402 mineral claims in
southwest Alaska, including the Pebble deposit. The Company is
listed on the Toronto Stock Exchange under the symbol "NDM" and on
the NYSE American Exchange under the symbol "NAK".
Northern Dynasty reported a net loss of C$69.19 million for the
year ended Dec. 31, 2019, compared to a net loss of C$15.96 million
for the year ended Dec. 31, 2018. As of Dec. 31, 2019, the Company
had $154.62 million in total assets, C$16.12 million in total
liabilities, and C$138.50 million.
Deloitte LLP, in Vancouver, Canada, the Company's auditor since
2009, issued a "going concern" qualification in its report dated
March 30, 2020, citing that the Company incurred a consolidated net
loss of $69 million during the year ended Dec. 31, 2019 and, as of
that date, the Company had a working capital deficit of $0.2
million and the consolidated deficit was $556 million. These
conditions, along with other matters, raise substantial doubt about
its ability to continue as a going concern.
NORTHSTAR HEALTHCARE: Seeks to Tap Durrett Firm as Special Counsel
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Northstar Healthcare Consulting, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Georgia to employ The
Durrett Firm, LLC as special counsel.
The Debtor needs the firm's legal assistance regarding the Health
Insurance Portability and Accountability Act (HIPAA) and other
related corporate issues that arise in the representation of a
company that handles confidential personal healthcare information.
The firm will be compensated at an hourly rate of $325 for
attorneys.
As of the petition date, the firm holds a $5,000 pre-bankruptcy
retainer.
Dana Durrett, Esq., an attorney at Durrett Firm, disclosed in court
filings that the firm neither holds nor represents any interest
adverse to the Debtor and its estate.
The firm can be reached through:
Dana S. Durrett, Esq.
The Durrett Firm, LLC
1845 Peeler Road, Suite D
Atlanta, GA 30338
Telephone: (770) 685-1041
Email: ddurrett@thedurrettfirm.com
About Northstar Healthcare Consulting
Based in Alpharetta, Ga., Northstar Healthcare Consulting, LLC
filed its voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-21076) on Aug. 3,
2020. At the time of filing, the Debtor estimated $100,000 to
$500,000 in assets and $1 million to $10 million in liabilities.
Judge James R. Sacca oversees the case.
The Debtor has tapped Wiggam & Geer, LLC as its legal counsel, The
Durrett Firm, LLC as special counsel, and Assure Professional as
accountant.
NOVABAY PHARMACEUTICALS: Says to Have Regained Compliance with NYSE
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NovaBay Pharmaceuticals, Inc. believes that it has regained full
compliance with the NYSE American's continued listing standards,
subject to NYSE American's formal confirmation that the Company has
regained compliance after the Company files its Quarterly Report on
Form 10-Q for the quarter ended Sept. 30, 2020.
"I'm proud of our ability to meet and maintain the NYSE American's
listing standards, which is important to our Company and our
shareholders," said Justin Hall, NovaBay CEO. "We regained
compliance with the listing requirements by successfully completing
several financings including the exercise of warrants that also
reduced our debt and simplified our capital structure. With these
financings completed, we have strengthened our balance sheet and
improved our position to support future growth."
As previously disclosed, the Company was notified by NYSE American
on April 12, 2019 that it was not in compliance with the NYSE
American's continued listing standards including the minimum
stockholders' equity requirement of Section 1003(a)(iii) of the
NYSE American Company Guide requiring stockholders' equity of $6.0
million or more if the Company has reported losses from continuing
operations and/or net losses in its five most recent fiscal years.
The Company was given until Oct. 12, 2020 to come back into full
compliance. As required by NYSE American, the Company also
continues to remain above the "low price per share" (which is
generally considered to be $0.20 per share per NYSE American
policy).
NovaBay also has applied to the Ontario Securities Commission for
an order to cease to be a reporting issuer under applicable
securities laws in certain Canadian jurisdictions, including
British Columbia, Alberta, Manitoba and Ontario. The Company
became a reporting issuer in the Jurisdictions in connection with
its initial public offering in October 2007 in order to offer and
sell its common stock to Canadian residents. The Company is making
such application as part of its general and administrative expense
reduction initiatives.
If the requested order is granted by the OSC, the Company will no
longer be a reporting issuer in any jurisdiction of Canada and will
no longer be required to file financial statements and other
documents in Canada pursuant to Canadian securities law. However,
the Company will continue to file all financial statements and
other materials required to be filed in accordance with the
applicable laws of the U.S. Securities and Exchange Commission
(SEC) and the rules of the NYSE American, where the Company is
listed.
About Novabay
Headquartered in Emeryville, California, NovaBay Pharmaceuticals,
Inc. -- http://www.novabay.com-- is a biopharmaceutical company
focusing on commercializing and developing its non-antibiotic
anti-infective products to address the unmet therapeutic needs of
the global, topical anti-infective market with its two distinct
product categories: the NEUTROX family of products and the
AGANOCIDE compounds. The Neutrox family of products includes
AVENOVA for the eye care market, CELLERX for the aesthetic
dermatology market, and NEUTROPHASE for wound care market.
Novabay reported a net loss and comprehensive loss of $9.66 million
for the year ended Dec. 31, 2019, compared to a net loss and
comprehensive loss of $6.54 million for the year ended Dec. 31,
2018. As of June 30, 2020, the Company had $13.27 million in total
assets, $12.29 million in total liabilities, and $983,000 in total
stockholders' equity.
OUM & CO. LLP, in San Francisco, California, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 26, 2020 citing that the Company has experienced
operating losses for most of its history and expects expenses to
exceed revenues in 2020. The Company also has recurring negative
cash flows from operations and an accumulated deficit. All of
these matters raise substantial doubt about its ability to continue
as a going concern.
OGGUSA INC: Unsecured Creditors to Have 0.73% to 3.87% in Plan
--------------------------------------------------------------
Debtors OGGUSA, Inc., f/k/a GenCanna Global USA, Inc. ("GCG
Parent"), OGG, Inc., f/k/a GenCanna Global, Inc. ("GCG Opco") and
Hemp Kentucky, LLC ("Hemp KY") filed the Disclosure Statement for
their Amended Plan of Liquidation dated August 18, 2020.
The Plan shall serve as a motion by the Debtors seeking entry of a
Bankruptcy Court order deeming the substantive consolidation of the
Debtors' Estates into a single Estate for all purposes related to
the Plan, including Voting, Confirmation and Distribution. The
Debtors are an integrated enterprise, managed across geographic
boundaries and legal entities. Holders of Allowed Claims against or
Interests in each of the Debtors will receive the same recovery
provided to other Holders of Allowed Claims or Interests in the
applicable Class. The Debtors believe that no creditor will
receive a recovery inferior to that which it would receive if each
Debtor proposed a plan of liquidation that was completely separate
from that proposed by each other entity and, therefore, the Debtors
do not believe that any creditor will be materially adversely
affected by not voting and receiving distributions on an
entity-by-entity basis.
Class 4 consists of all Allowed Unsecured Claims with 0.73% to
3.87% estimated recovery. Except to the extent that a Holder of an
Allowed Unsecured Claim agrees to less favorable treatment, in full
and final satisfaction, compromise, settlement, and release of and
in exchange for such Allowed Unsecured Claim, each Holder of an
Allowed Unsecured Claim shall receive on account of such Allowed
Unsecured Claim against a Debtor, its Trust Ratable Share of the
Beneficial Interests in the Wind-Down Trust. Class 4 is Impaired
under the Plan. Holders of Allowed Unsecured Claims are entitled
to vote to accept or reject the Plan.
Class 7 Interests will be cancelled and released without any
distribution, payments or retention of any property on account of
such interests.
On the Effective Date, the transactions contemplated by the MGG
Settlement Agreement and Plan, including the receipt by the Debtors
or the Wind-Down Trust, as applicable, of the MGG Settlement
Payments as contemplated by the MGG Settlement Agreement, will be
in full and final settlement of all causes of action released or
subject to release pursuant to the terms of the MGG Settlement
Agreement and any action or proceeding that has been or may be
commenced with respect to any such Cause of Action shall be deemed
dismissed with prejudice.
Substantive consolidation of the Debtors and their Estates is an
important element of the Debtors' successful implementation of the
Plan. The Debtors' proposed substantive consolidation structure is
supported by the applicable legal standards, practical
considerations, and available information regarding the Debtors'
prepetition financial affairs. The Plan provides substantial
benefits to creditors, available only to the extent that
substantive consolidation provided for in the Plan occurs.
A full-text copy of the Disclosure Statement dated August 18, 2020,
is available at https://tinyurl.com/y4e2kf4l from PacerMonitor at
no charge.
Counsel for the Debtors:
DENTONS BINGHAM GREENEBAUM LLP
James R. Irving
April A. Wimberg
Christopher B. Madden
3500 PNC Tower
101 South Fifth Street
Louisville, Kentucky 40202
Telephone: (502) 587-3606
E-mail: james.irving@dentons.com
april.wimberg@dentons.com
chris.madden@dentons.com
- and -
Michael J. Barrie
William M. Alleman, Jr.
Gregory W. Werkheiser
BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP
1313 North Market Street, Suite 1201
Wilmington, DE 19801
Telephone: (302) 442-7010
E-mail: mbarrie@beneschlaw.com
walleman@beneschlaw.com
gwerkheiser@beneschlaw.com
- and -
Elliot M. Smith
BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP
200 Public Square, Suite 2300
Cleveland, OH 44114
Telephone: (216) 363-4500
E-mail: esmith@beneschlaw.com
About GenCanna Global USA
GenCanna Global USA, Inc. -- https://www.gencanna.com/ -- is a
vertically-integrated producer of hemp and hemp-derived CBD
products with a focus on delivering social, economic and
environmental impact through seed-to-scale agricultural
production.
GenCanna Global USA was the subject of an involuntary Chapter 11
proceeding (Bankr. E.D. Ky. Case No. 20-50133) filed on Jan. 24,
2020. The involuntary petition was signed by alleged creditors
Pinnacle, Inc., Crawford Sales, Inc., and Integrity/Architecture,
PLLC.
On Feb. 6, 2020, GenCanna Global USA consented to the involuntary
petition and on Feb. 5, 2020, two affiliates, GenCanna Global Inc.
and Hemp Kentucky LLC, filed their own voluntary Chapter 11
petitions.
Laura Day DelCotto, Esq., at DelCotto Law Group PLLC, represents
the petitioners.
The Debtors tapped Benesch Friedlander Coplan & Aronoff, LLP and
Dentons Bingham Greenebaum, LLP as legal counsel, Huron Consulting
Services, LLC as operational advisor, and Jefferies, LLC as
financial advisor. Epiq is the claims agent, which maintains the
page https://dm.epiq11.com/GenCanna
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Feb. 18, 2020. The committee tapped Foley & Lardner
LLP as its bankruptcy counsel, DelCotto Law Group PLLC as local
counsel, and GlassRatner Advisory & Capital Group, LLC as financial
advisor.
* * *
In May 2020, the Company won court approval to sell for $77 million
substantially all of its assets to funds managed by its long-term
investor, MGG Investment Group. The Debtors changed their names to
Oggusa, Inc., et al., following the sale.
OLB GROUP: Incurs $510K Net Loss in Second Quarter
--------------------------------------------------
The OLB Group, Inc., filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $510,409 on $2 million of total revenue for the three months
ended June 30, 2020, compared to a net loss of $472,838 on $2.58
million of total revenue for the three months ended June 30, 2019.
For the six months ended June 30, 2020, the Company reported a net
loss of $1.05 million on $4.61 million of total revenue compared to
a net loss of $879,783 on $5.17 million of total revenue for the
same period in 2019.
As of June 30, 2020, the Company had $11.30 million in total
assets, $15.01 million in total liabilities, and a total
stockholders' deficit of $3.70 million.
In connection with the response to the COVID-19 pandemic in the
United States, the Company has experienced disruptions to its
business and has observed disruptions with its customers and
merchants, which has resulted in a decline in transaction volume.
While the volume of processing transactions by merchants in March
was relatively in-line with the Company's expectations that the
number of transactions during March would be below the prior year
because states in the United States began to implement stay-at-home
orders, the number of transactions and resulting revenue was
approximately 15% lower in March than in February and 30% lower in
April than in March. In May, the number of transactions began to
increase whereby they were 5% higher than in April, and in June,
transactions were 7% higher than May. The Company's revenue during
the period of time decreased and then increased in the amount
similar to the percentage of month-to-month transaction volume.
Despite recent increases in volume, the Company estimates that the
number of transactions will continue to stay at a depressed level
or further decline from the prior year, along with revenues, until
the response to the COVID-19 pandemic relaxes further stay-at-home
restrictions and allows customers to make more point of purchase
transactions for merchants, customers become more comfortable
shopping in stores and/or more merchants provide for additional
contactless and online purchase options. The anticipated amount of
anticipated decline from prior year is unknown, but it will be
impacted by when consumers return to the level of purchasing that
occurred in the prior year and before the pandemic. However,
additional closings and reopenings of businesses or if additional
businesses cease to operate in the future will likely result in a
month over month decline and then increase similar to what occurred
in March through June 2020.
At June 30, 2020, the Company had cash of $330,437 and a working
capital deficit of $1,525,475. In addition, as of June 30, 2020,
the Company was not in compliance with certain financial covenants
required by its Credit Agreement.
As a result of these factors, the Company determined it was
necessary to review its cash flow for 2020 and an overall analysis
of market trends to determine whether or not it has sufficient
liquidity to continue as a going concern for a period of at least
twelve months from the date of this Quarterly Report. The Company
also determined it was necessary to take certain corporate actions,
including reducing discretionary expenses and amending its existing
senior indebtedness, in order to ensure it has sufficient liquidity
to continue as a going concern for a period of at least twelve
months from the date of this Quarterly Report.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1314196/000121390020022316/f10q0620_theolbgroup.htm
About OLB Group
Headquartered in New York, The OLB Group, Inc. --
http://www.olb.com/-- is a commerce service provider that delivers
fully outsourced private label shopping solutions to highly
trafficked websites and retail locations. The Company provides
end-to-end e-commerce, mobile and retail solutions to customers.
OLB Group reported a net loss of $1.34 million for the year ended
Dec. 31, 2019, compared to a net loss of $1.39 million for the year
ended Dec. 31, 2018.
OLB GROUP: Receives Noncompliance Notice from Nasdaq
----------------------------------------------------
The OLB Group, Inc. received written notice from the Listing
Qualifications Department of The NASDAQ Stock Market LLC on Oct. 8,
2020, notifying the Company that, for a period of 30 consecutive
business days, the Company failed to maintain a minimum Market
Value of Listed Securities of $35 million required for continued
listing on the NASDAQ Capital Market pursuant to NASDAQ Listing
Rule 5550(b)(2). In accordance with NASDAQ Listing Rule
5810(c)(3)(C), the Company has 180 calendar days, or until April 6,
2021, to regain compliance. If, at any time during the 180-day
grace period, the Company's MVLS closes at $35 million or more for
a minimum of 10 consecutive business days, the Company will have
regained compliance and Nasdaq will provide it with written
confirmation of such.
If the Company does not regain compliance with the continued
listing requirements during the grace periods, NASDAQ will give the
Company written notice that its securities are subject to
delisting. In the event of such notification, the Company may
appeal Nasdaq's determination to delist its securities, but there
can be no assurance NASDAQ would grant its request for continued
listing.
The Company's common stock will continue to be listed and traded on
the NASDAQ Capital Market during the grace period, subject to its
compliance with the other continued listing requirements of the
NASDAQ Capital Market.
About OLB Group
Headquartered in New York, The OLB Group, Inc. --
http://www.olb.com/-- is a commerce service provider that delivers
fully outsourced private label shopping solutions to highly
trafficked websites and retail locations. The Company provides
end-to-end e-commerce, mobile and retail solutions to customers.
OLB Group reported a net loss of $1.34 million for the year ended
Dec. 31, 2019, compared to a net loss of $1.39 million for the year
ended Dec. 31, 2018. As of June 30, 2020, the Company had $11.30
million in total assets, $15.01 million in total liabilities, and a
total stockholders' deficit of $3.70 million.
ONEWEB GLOBAL: Taps BDO Digital to Provide Neutral Audit Assessment
-------------------------------------------------------------------
OneWeb Global Limited and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of New York to
employ BDO Digital, LLC.
The Debtors selected BDO Digital to provide an independent and
neutral third-party audit assessment of the Debtors' compliance
with their obligations under the National Security Agreement.
Pursuant to the terms of the Services Agreement, SoftBank Group
Corp., the Debtors' single largest equity holder, will pay BDO
Digital for the audit services as follows: (i) a fixed fee of
$175,000 and (ii) reimbursement of out-of-pocket expenses.
BDO Digital will charge the Debtors the following hourly rates for
the "out-of-scope" services:
Partner/Managing Director $595 - $850
Director/Senior Manager $495 - $595
Manager/Vice President $350 - $495
Senior Associate $225 - $395
Associate $150 - $250
Michael Barba, a managing director at BDO Digital, disclosed in
court filings that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael Barba
BDO Digital, LLC
100 Park Avenue
New York, NY 10017
Telephone: (212) 885-8000
Facsimile: (212) 697-1299
About OneWeb Global Limited
Founded in 2012, OneWeb Global Limited is a global communications
company developing a low-Earth orbit satellite constellation system
and associated ground infrastructure, including terrestrial
gateways and end-user terminals, capable of delivering
communication services for use by consumers, businesses,
governmental entities, and institutions, including schools,
hospitals, and other end-users whether on the ground, in the air,
or at sea.
OneWeb's business consists of the development of the OneWeb System,
which has included the development of small-next generation
satellites that have been mass-produced through a joint venture and
the development of specialized connections between the satellite
system and the internet and other communications networks through
the SNPs. For more information, visit https://www.oneweb.world/
OneWeb Global Limited and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
20-22437) on March 27, 2020. The petitions were signed by Thomas
Whayne, chief financial officer. At the time of the filing, Debtors
disclosed assets of between $1 billion and $10 billion and
liabilities of the same range.
Judge Robert D. Drain oversees the cases.
The Debtors tapped Milbank LLP as counsel; Guggenheim Securities,
LLC as investment banker; FTI Consulting, Inc. as financial
advisor; Grant Thornton LLP as tax consultant; and Dixon Hughes
Goodman LLP as tax consulting and compliance services provider.
Omni Agent Solutions is the claims, noticing and solicitation
agent.
ORANGE BLOSSOM: Seeks to Hire McAtee & Associates as Accountant
---------------------------------------------------------------
Orange Blossom Catering, Inc. seeks approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ
McAtee & Associates CPAs, P.A. as accountant.
The Debtor needs assistance of the firm to prepare federal and
state tax reports, report to the U.S. Trustee's Office and provide
other necessary accounting services which are crucial to its
reorganization.
The Debtor proposes to compensate McAtee as follows:
(a) Monthly fee of $500.00 to prepare the Debtor's balance
sheet, profit and loss statement, balancing of checking account,
state unemployment forms, U.S. Trustee's Office monthly and
quarterly reports. $2,000.00 and $350 per return for the
preparation of Federal corporate income tax returns and state/local
corporate tax returns, respectively. In addition, the Debtor
requires hourly the services of McAtee to prepare annual financial
statements and adjustments to the Debtor's books and records in
connection with the preparation of the Debtor's 2019 and subsequent
tax returns, to make adjustments to the Debtor's Quickbooks records
and financial statements for the period from January through
September, 2020, for setup and maintenance of the Debtors
depreciation records and for such other accounting services as are
necessary to maintain the Debtor's books and records. McAtee's
hourly rates for these services are as follows:
Certified Public Accountant $300
Staff Accountant $150
Support Staff $125
Administrative staff $65
(b) McAtee will be compensated for its services with regards
to CC3 Enterprises, LLC, 100 percent shareholder of the Debtor,
which include preparation of Federal corporate income tax returns
(estimated at $1,500 per return), monthly preparation of financial
statements ($250 per month), and hourly services to prepare annual
financial statements and adjustments to CC3's books and records.
(c) An initial retainer of $4,000.
Carol McAtee, a certified public accountant at McAtee & Associates,
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:
Carol McAtee
McAtee & Associates CPAS, P.A.
5401 Central Ave.
Saint Petersburg, FL 33710
Telephone: (727) 327-1999
About Orange Blossom Catering
Orange Blossom Catering, a company based in Saint Petersburg, Fla.,
offers full-service event planning for personal, community and
corporate functions.
Orange Blossom Catering sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06185) on Aug. 14,
2020. Ryan Clelland, president, signed the petition. At the time of
filing, the Debtor disclosed assets of between $500,000 and $1
million and liabilities of between $1 million and $10 million.
Judge Catherine Peek McEwen oversees the case. The Debtor has
tapped Camille J. Iurillo, Esq. and Kevin Hing, Esq. of The Iurillo
Law Group P.A. and McAtee & Associates CPAs, P.A. as accountant.
PAPS CAB: Has Until Oct. 16 to File Plan & Disclosures
------------------------------------------------------
On July 7, 2020, Paps Cab Corp. and its debtor-affiliates filed
with the U.S. Bankruptcy Court for the Eastern District of New York
a motion for entry of an order extending the Debtors' time period
in which to file a chapter 11 plan of reorganization and disclosure
statement.
On August 25, 2020, Judge Carla E. Craig granted the motion and
ordered that the Debtors' time period to file a chapter 11 plan of
reorganization and disclosure statement is extended to and
including October 16, 2020.
A full-text copy of the Order dated August 25, 2020, is available
at https://tinyurl.com/y4yc5nob from PacerMonitor.com at no
charge.
About Paps Cab Corp.
Paps Cab Corp., Vicmarie Hacking, Corp. and Snowstorm Hacking,
Corp. concurrently filed voluntary petitions under Chapter 11 of
the Bankruptcy Code (Bankr. E.D.N.Y. Lead Case No. 19-47238) on
Dec. 2, 2019, listing under $1 million in both assets and
liabilities. Alla Kachan, Esq. at LAW OFFICES OF ALLA KACHAN,
P.C., represents the Debtors.
PG&E CORP: Bankruptcy Plan Hinders Elliott's $250M Claim
--------------------------------------------------------
Maria Chutchian of Reuters reports that the lawyers for PG&E Corp
on Tuesday tried to convince the judge that oversaw its Chapter 11
case that its court-approved reorganization plan prohibits Elliott
Management Corp and other noteholders from pursuing a $250 million
claim stemming from the California utility's bankruptcy.
Elliott, represented by Ropes & Gray, contends that PG&E violated a
restructuring support agreement under which it pledged to use "best
effort" to help the New York-based hedge fund and other noteholders
access up to $2 billion in equity value. PG&E's lawyers at Weil
Gotshal & Manges argued during a telephonic and video hearing on
Tuesday that U.S. Bankruptcy Judge Dennis Montali should not even
hear the merits of Elliott's claim because it is barred outright by
the release and exculpation provisions of the utility's
reorganization plan, which went into effect July 1, 2020.
About PG&E Corp.
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
As of Sept. 30, 2018, the Debtors, on a consolidated basis, had
reported $71.4 billion in assets on a book value basis and $51.7
billion in liabilities on a book value basis.
PG&E Corp. and Pacific Gas employ approximately 24,000 regular
employees, approximately 20 of whom are employed by PG&E Corp. Of
Pacific Gas' regular employees, approximately 15,000 are covered by
collective bargaining agreements with local chapters of three labor
unions: (i) the International Brotherhood of Electrical Workers;
(ii) the Engineers and Scientists of California; and (iii) the
Service Employees International Union.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter 11
petitions (Bankr. N.D. Cal. Lead Case No. 19-30088).
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, said they are facing extraordinary challenges
relating to a series of catastrophic wildfires that occurred in
Northern California in 2017 and 2018. The utility said it faces an
estimated $30 billion in potential liability damages from
California's deadliest wildfires of 2017 and 2018.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are
serving as PG&E's legal counsel, Lazard is serving as its
investment banker and AlixPartners, LLP is serving as the
restructuring advisor to PG&E. Prime Clerk LLC is the claims and
noticing agent.
In order to help support the Company through the reorganization
process, PG&E has appointed James A. Mesterharm, a managing
director at AlixPartners, LLP, and an authorized representative of
AP Services, LLC, to serve as Chief Restructuring Officer. In
addition, PG&E appointed John Boken also a Managing Director at
AlixPartners and an authorized representative of APS, to serve as
Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and
their colleagues at AlixPartners will continue to assist PG&E with
the reorganization process and related activities. Morrison &
Foerster LLP, is special regulatory counsel. Munger Tolles & Olson
LLP, is special counsel.
The Office of the U.S. Trustee appointed an official committee of
creditors on Feb. 12, 2019. The Committee retained Milbank LLP as
counsel; FTI Consulting, Inc., as financial advisor; Centerview
Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented by
Baker & Hostetler LLP.
PG&E Corporation and Pacific Gas and Electric Company announced
July 1, 2020, that PG&E has emerged from Chapter 11, successfully
completing its restructuring process and implementing PG&E's Plan
of Reorganization that was confirmed by the Bankruptcy Court on
June 20, 2020.
PICK-YOUR-OWN: Creditors to Get Paid from Property Sale Proceeds
----------------------------------------------------------------
Pick-Your-Own, Inc. filed with the U.S. Bankruptcy Court for the
Western District of New York a Disclosure Statement describing Plan
of Reorganization.
This Plan of Reorganization proposes to pay creditors from sale of
its real property located at 1640 State Route 444, Victor, New York
(14564), County of Ontario.
Class 3 Unsecured Claims of Munir Bahai, Harris Beach PLLC and
Department of the Treasury shall receive from the net proceeds of
the sale of the real property located at 1640 State Route 444,
Victor, New York, a pro-rata share with other unsecured creditors.
Class 4 Equity Security Holders shall retain their equity interests
in the Debtor, which interests are not impaired by the Plan.
A full-text copy of the disclosure statement dated August 25, 2020,
is available at https://tinyurl.com/yxlqubvp from PacerMonitor.com
at no charge.
The Debtor is represented by:
Sammy Feldman, Esq.
Silver & Feldman
3445 Winton Place, Suite 228
Rochester, New York 14623
Telephone: (585)424-4760
E-mail: sfeldman@silverfeldman.com
About Pick-Your-Own Inc.
Pick-Your-Own, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D.N.Y. Case No. 19-20821) on Aug. 20,
2019. At the time of the filing, the Debtor disclosed assets of
between $500,001 and $1 million and liabilities of the same range.
Judge Paul R. Warren oversees the case. Silver & Feldman is the
Debtor's legal counsel.
PORTS AMERICA: Moody's Assigns Ba2 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service assigned a Ba2 Corporate Family Rating
(CFR) and a Ba2-PD Probability of Default Rating (PDR) to Ports
America Holdings, LLC. In connection with the proposed debt
issuance, Moody's also assigned a Ba2 instrument rating (LGD4) to
the new $630 million 8-year senior secured notes. The outlook is
stable.
Net proceeds from the new $630 million notes together with a $125
million 364-day bridge loan will be used to refinance Ports America
Group's outstanding $720 million term loan debt. The bridge loan
will be repaid with the proceeds of asset sales, including the sale
of Ports America Group's stake in one of its terminals (ITS), which
is expected to close in Q4 2020.
Assignments:
Issuer: Ports America Holdings, LLC
Corporate Family Rating, Assigned Ba2
Probability of Default Rating, Assigned Ba2-PD
Senior Secured Notes, Assigned Ba2 (LGD4)
RATINGS RATIONALE
The Ba2 CFR benefits from Ports America Group's high degree of
geographic diversification across the US, the scale of its
operations ($1.3 billion of consolidated revenues in 2019), long
standing relationships with a well-diversified group of customers
despite the industry's high customer concentration, an estimated
weighted average concession length of its core sites of around 32
years, solid industry trends that support long-term growth in
container volumes to be at least consistent with GDP growth, and
the group's increased focus on improving profitability and safety
since a recent change in management in 2018.
Ports America Group has demonstrated the inherent value of its
variable cost structure (80% of costs are variable) during the
coronavirus pandemic. While operating revenue declined by 7.6%
year-over-year (yoy) in Q1 2020 and 23% yoy in Q2 2020, its
adjusted EBITDA margin remained at 11.8% in Q1 2020 and 13.2% in Q2
2020 and thus, very similar to 2019. Its most profitable
subsidiary, Ports America Chesapeake, LLC, was also able to
distribute $13 million to the holding company in the first half of
2020 (compared to $11 million in the first half of 2019).
At the same time, while Moody's considers the group's leading
market share and strong geographical footprint in the US, Ports
America Group's credit profile remains constrained by a high
leverage (8.0x adjusted consolidated debt/EBITDA 2019, pro-forma
unadjusted consolidated debt/EBITDA 7.5x and around 8.0 as adjusted
in 2020), even after the anticipated debt reduction through
proceeds of asset sales, and weak EBITDA margins relative to
international peers.
Management targets continued improvements in EBITDA over the term
of the debt which would support more rapid deleveraging and
improvements in EBITDA margin to close to 20% (based on
proportional accounting of joint ventures (JVs)). Initial
improvements in profit margins have been realized in recent
periods. Moody's expects that management will be able to improve
EBITDA margins over time, but this improvement could occur at a
more gradual pace if competitive pressures intensified or
repercussions from the coronavirus pandemic linger into 2021.
The group relies on dividends and other income from its
subsidiaries, associates and affiliates to pay for debt servicing
and expenses at the head office level. Ports America Group has a
number of non-controlling investments in port assets and therefore
does not have full control over their financial contributions.
However, Moody's understands that the company does not act as a
passive investor and has management/operational control over almost
all of its port investments. A more sustainable track record of a
reduction in leverage and of a financial policy that balances
shareholder and creditors' interests is needed for further rating
improvement.
Moody's expects Ports America Group to maintain an adequate
liquidity position over the next 12 months, underpinned by its (1)
modest operating cash flow generation including distribution from
joint ventures and Ports America Chesapeake LLC, (2) access to a
$65 million committed revolving credit facility and (3)
management's target to maintain at least a minimum unrestricted
cash on balance sheet level of $20-30 million ($69.2 million
consolidated cash on balance sheet at 31 December 2019). Ports
America Group will also have access to an $85 million letter of
credit facility.
STRUCTURAL CONSIDERATIONS
Given that the capital structure contains a mix of bank debt,
secured notes and capital leases, Moody's has aligned the PDR with
the CFR as per Moody's standard approach.
The $630 million notes rank pari passu with the $65 million
revolving credit facility and the $85 million letter of credit
facilities. The Ba2 rating on the notes captures that debt at the
holding company is structurally subordinated to senior secured debt
at Ports America Chesapeake LLC (Baa3 stable), which is a
ring-fenced entity, and to senior secured debt at the JV Port
Newark Container Terminal LLC (PNCT, Ba1 stable). In addition, debt
exists at various joint ventures, mostly PNCT (senior secured Ba1
stable), and total proportional debt at JVs including PNCT is
expected to be around $186 million. Unadjusted debt at Ports
America Chesapeake LLC amounts to around $324 million. Both Ports
America Chesapeake LLC and PNCT have amortizing debt structures.
Security for the notes will consist of a first priority pledge over
equity of the issuer, and any equity interest held by the issuer or
subsidiary guarantor, as well as the 50% membership interest in
PNCT, a first priority security interest in substantially all
tangible and intangible personal property and mortgages on material
fee owned real property of the issuer and each subsidiary
guarantor.
Ports America Chesapeake LLC is ringfenced from the borrower and
parent guarantor and will not guarantee the debt or provide a first
priority pledge over its assets, any joint ventures will not be
guarantors and there will be no security pledge over any
concessions or leases of port assets. As such security to lenders
consists mostly of share pledges, which Moody's views as less
valuable than a pledge over tangible assets or concession
interests.
RATING OUTLOOK
The stable outlook reflects Moody's expectation that trade volumes
and revenue will recover within the next 12-18 months. The stable
outlook also reflects Moody's expectation that Ports America Group
will continue to gradually improve its EBITDA margins, supporting a
decline in Debt/EBITDA to below 8.0x (8.0x in 2019) and maintaining
FFO/debt at least above 5% (5.6% in 2019).
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade
-- Sustained strengthening in Ports America Group's capital
structure with FFO/debt moving towards 10%
-- FFO/interest cover above 2.0x
-- Debt/EBITDA below 6.0x
Factors that could lead to a downgrade
-- Failure to close the ITS sale and other asset sales and reduce
debt as anticipated
-- Inability to improve EBITDA margins leading to a failure to
reduce debt/EBITDA below 8.0x
-- FFO/debt falling below 5.0% on sustained basis
-- Aggressive distributions by sponsors or increase in leverage
that is more reflective of an aggressive financial policy that
favors shareholders' interests over creditors
METHODOLOGY
The principal methodology used in these ratings was Privately
Managed Port Companies published in September 2016.
PROJECT PROFILE
Ports America Group, Inc., the parent guarantor of the borrower,
Ports America Holdings, LLC, is a port terminal and stevedoring
operator with operations on the West, Gulf and East Coasts of the
United States. Operations and services comprise container handling,
general cargo, terminal operations, railhead transfers, general
stevedoring, automobile and rolling stock, breakbulk, bulk and
military cargo, brokered labor services, maintenance and repair
services and cruise ship terminal operations. In 2019, Ports
America Group generated around $1.3 billion in revenue.
Ports America Group is a privately held company and owned by funds
managed by Oaktree (68.6%), CalSTRS, managed by UBS (21.9%) and
Canada Pension Plan Investment Board (9.4%).
PRIMO WATER: S&P Rates New EUR450MM Senior Unsecured Notes 'B'
--------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '4'
recovery rating to Primo Water Holdings Inc.'s proposed EUR450
million senior unsecured notes. The '4' recovery rating indicates
its expectation for modest (30%-50%; rounded estimate: 40%)
recovery in the event of a default. The proceeds of the transaction
will be used to refinance Primo Water Corp.'s existing EUR450
million senior unsecured notes maturing in 2024. S&P views the
proposed transaction to be leverage neutral and debt to EBITDA will
remain close to 5.2x based on last 12 months to June 30 EBITDA (on
an S&P Global Ratings' adjusted basis).
S&P said, "We believe that pandemic-related global shutdowns will
continue to adversely affect the company's revenues for fiscal
2020. Specifically, we believe that Primo could face revenue
pressure because of weaker demand in its commercial segment, which
comprises about 40% of total revenues. We favorably view the
company's exposure to residential customers and big-box retailers
(the other 60% of total revenues) and expect that growth in the
segment should partially offset the revenue pressures in the
commercial segment. Therefore, we estimate that total revenues will
modestly decline in the high single-digit area when compared to pro
forma 2019 revenues (including legacy Primo and excluding the S&D
Coffee & Tea business)."
"Furthermore, in second-quarter 2020, the company enacted
meaningful cost-saving measures including route rationalization and
a significant reduction in discretionary spending, and general and
administration expenses. SP said, "In our opinion, a combination of
operating cost efficiencies and acquisition-related synergies
should sustain EBITDA margins on an S&P Global Ratings' adjusted
basis in the 17.5%-18% range in fiscal 2020, which reflects an
improvement from our previous expectation of 15.5%-16.0%.
Therefore, we expect that Primo will maintain debt to EBITDA (on an
S&P Global Ratings' adjusted basis) in the low-5x area for fiscal
2020 returning to the mid-4x area in 2021. In addition, we believe
the company should generate positive free cash flows to support
tuck-in acquisitions."
ISSUE RATINGS—RECOVERY ANALYSIS
Key analytical factors
-- S&P is assigning its 'B' issue-level rating and '4' recovery
rating to Primo's EUR450 million proposed senior unsecured notes.
The '4' recovery rating indicates S&P's expectation for modest
(30%-50%; rounded estimate: 40%) recovery in the event of a
default.
-- S&P's simulated default scenario incorporates the assumption
that Primo would default in 2023 due to a sharp decline in sales
from a combination of lost customers, heightened competition, and a
prolonged weak economy.
-- S&P assume the company would reorganize or be sold as a going
concern as opposed to being liquidated primarily based on its
viable business model and decent market-share positions in the
North American and European home and office water-delivery
markets.
-- S&P values the company on a going-concern basis using a 6x
multiple on its emergence EBITDA, which corresponds to the
company's estimated fixed charges in the rating agency's simulated
default year.
-- S&P applies an operational adjustment of 5% to better align
EBITDA decline with that of 'B' rated peers.
Simulated default assumptions
-- Simulated year: 2023
-- Emergence EBITDA: US$145 million
-- Multiple: 6x
Simplified waterfall
-- Gross recovery value: US$870 million
-- Net recovery value for waterfall after administrative expenses
(5%): US$827 million
-- Estimated priority claims: US$309 million
-- Remaining recovery value: US$518.4 million
-- Estimated senior unsecured notes claim: US$1.28 billion
-- Value available for senior unsecured notes claim: US$518.4
million
-- Recovery range: 30%-50% (rounded estimate: 40%)
All debt amounts include six months of prepetition interest.
Ratings List
Primo Water Corp.
Issuer Credit Rating B/Stable/--
New Rating
Primo Water Holdings Inc.
Senior Unsecured
EUR450 mil nts due 2028 B
Recovery Rating 4(40%)
PULSE HEALTH & FITNESS: Files for Chapter 7 Bankruptcy
------------------------------------------------------
Pulse Health & Fitness LLC filed for voluntary Chapter 7 bankruptcy
protection (Bankr. D. Md. Case No. 20-18614) on Sept. 22, 2020.
The Baltimore Business Journal reported that the debtor listed an
address of 14630 York Rd. Western Run Business Center Bldg. C,
Sparks Glencoe, and is represented in court by attorney Eric
Steiner. Pulse Health & Fitness listed assets up to $119,676 and
debts up to $163,314. The filing's largest creditor was listed as
Wells Fargo Bank NA with an outstanding claim of $70,804.
Pulse Health & Fitness LLC is a health, wellness and fitness
company.
The Debtor's counsel:
Eric Steiner
Steiner Law Group, LLC
E-mail: eric@steinerlawgroup.com
RANDOLPH HEALTH: Obtains 7 Takeover Bids During Bankruptcy Auction
------------------------------------------------------------------
Ayla Ellison of Beckers Hospital Review reports that Randolph
Health, a single-hospital system based in Asheboro, N.C., sold for
$18.5 million after receiving seven takeover bids during a
bankruptcy auction, according to the Courier-Tribune.
Randolph Health CEO Angie Orth said the hospital, which filed for
Chapter 11 bankruptcy in March, sold to Roanoke, Va.-based American
Healthcare Systems, according to the report.
Objections to the deal will be accepted by the bankruptcy court
until Oct. 16, 2020. If there are no objections, the judge is
expected to issue an order Oct. 22, 2020 to allow the transaction
to proceed.
About Randolph Hospital
Randolph Hospital -- https://www.randolphhealth.org/ -- operates as
a hospital that provides inpatient and outpatient services in North
Carolina. The hospital offers, among other services, cancer care,
imaging, maternity services, cardiac services, surgical services,
outpatient specialty clinics, rehabilitation services, and
emergency services.
Randolph Hospital, Inc. and its affiliates, MRI of Asheboro, LLC
and Randolph Specialty Group Practice, each filed a voluntary
petition for relief under chapter 11 of the Bankruptcy Code (Bankr.
M.D.N.C. Lead Case No. 20-10247) on March 6, 2020. In the petition
signed by CRO Louis E. Robichaux IV, Randolph Hospital was
estimated to have $100 million to $500 million in both assets and
liabilities. The Debtor is represented by Jody A. Bedenbaugh, Esq.,
and Graham S. Mitchell, Esq., at Nelson Mullins Riley &
Scarborough
LLP.
William Miller, the bankruptcy administrator for the U.S.
Bankruptcy Court for the Middle District of North Carolina,
appointed a committee to represent unsecured creditors in the
Chapter 11 cases. The committee retained Spilman Thomas & Battle,
PLLC as counsel; Sills Cummis & Gross, P.C., as co-counsel; and
Gibbins Advisors, LLC, as financial advisor.
Melanie L. Cyganowski was appointed as patient care ombudsman in
Debtors' bankruptcy cases. The PCO is represented by Otterbourg
P.C.
RMS HOLDING: S&P Assigns 'B-' Issuer Credit Rating; Outlook Stable
------------------------------------------------------------------
S&P Global Ratings assigned a 'B-' issuer credit rating to San
Diego, Calif.-based household employment services and in-home care
provider RMS Holding Company, LLC, which does business as TEAM
Services Group.
S&P said, "At the same, we assigned a 'B-' rating and '3' recovery
rating to TEAM's first-lien credit facilities and a 'CCC' rating
and '6' recovery rating to its second-lien credit facility."
The stable outlook reflects S&P's expectation for double-digit
percentage revenue growth, steadily growing free cash flow, and
improving adjusted EBITDA margins (on net revenue) to about
11%-12%, driven by organic and inorganic growth. It also reflects
S&P's expectation of a continued aggressive acquisition strategy
that will likely keep leverage in the mid- to high-single-digit
area depending on level of acquisitions.
"Our ratings on TEAM reflect our view that the company's leverage
is high, its cash flow generation is minimal, and its scale is
limited. While the home care/post-acute care industry is attractive
and growing quickly, we believe it's also competitive and highly
fragmented, with much bigger players such as Gentiva Health
Services Inc. (B/Stable/--) and Addus HomeCare (not rated)
providing competition. We believe that the industry's barriers to
entry are low and that other home health providers--as well as
non-health care companies, such as staffing companies and payroll
processors--could offer some of the services TEAM provides. These
factors only partially offset our expectation that TEAM will
continue to face limited competition in its Risk Management
Strategies division (which provides services to fiduciaries of
primarily special needs trusts) and our expectation that the
company's niche focus on serving individuals who select their own
caregiver differentiates it from competitors. We also believe
because TEAM is owned by a financial sponsor, acquisitions will
remain a component of the company's growth strategy, keeping
leverage above 6x. While we expect TEAM's margins to gradually
improve as it realizes greater benefits of scale, we expect them to
remain lower than those of other health care service providers
given the lower-skill nature of the work TEAM performs."
TEAM benefits from several favorable industry trends and
characteristics, such as a growing aging population who prefer to
have personal care at home and an increased focus on serving
disabled individuals in their communities. These trends reflect
both family preferences and payors' push for lower-cost models. In
addition, S&P expects that even as the COVID-19 pandemic continues,
the company will continue to grow (albeit at a moderated pace)
because home care is perceived to be a safer alternative than
institutional settings.
TEAM primarily operates as an employment administration outsourcer,
providing home care services for seniors and individuals with
long-term disabilities. Within this niche, TEAM focuses on
providing these services for beneficiaries who choose their own
caretaker. TEAM operates through two divisions: Risk Management
Strategies (RMS, which accounts for about 32% of gross revenue) and
Team Public Choices (TPC, about 68%). RMS serves care recipients
across the U.S. who are typically beneficiaries of trusts, while
TPC serves beneficiaries of state-sponsored disability and aging
programs in 24 states.
RMS acts as the employer of record for trusts (most frequently for
individuals with disabilities), eliminating the potential for
employment-related liabilities for both the trust and the trustee
bank and alleviating administrative burdens that come with
employing staff. This business has very high client retention rates
and enjoys stable, small pricing increases. Barriers to entry are
low, and so S&P believes price increases will remain low, but it
believes this is a relationship business, which offers some
stability. Some of RMS's relatively large clients are financial
institutions. In terms of total revenue, its client concentration
is not high, with the largest client accounting for about 9% of
revenue (largest customer channel representing over 1500 clients)
and the top five customers contributing only 26% of revenue.
TPC supports beneficiaries receiving state aid through two models.
About half its revenue in this segment comes from arrangements
where TPC is the employer (agency) and earns a spread between
Medicaid reimbursement and the cost of providing services. This
portion of the business faces reimbursement risk. For the other
half, the beneficiary is the employer (fiscal intermediary), and
TPC earns a fee for its services. In addition, there is some state
concentration in Colorado (15%), Georgia (15%), Pennsylvania (14%),
Louisiana (9%), and California (8%).
TEAM is small (with about $323 million net revenue in 2019) and
operates in a fragmented niche market. The company faces
competition from other home health providers and payroll processing
firms, some of which are much bigger staffing companies with more
financial resources. S&P believes that as the company's target
market grows, it could attract more competition because there are
low barriers to entry.
S&P said, "We expect the company will continue to grow through
debt-financed acquisitions supported by low-double-digit percent
organic revenue growth for the next few years. We also expect
EBITDA margins will improve as it gains scale and increases
operating efficiency, resulting in leverage improvement in the
coming years. However, given its financial sponsor ownership and
its debt-financed growth strategy, we expect adjusted leverage will
be above 6x for 2020 and 2021 and that discretionary free cash flow
(after shareholder tax distributions) will be about $5 million-$15
million in 2020 and 2021."
"The stable outlook reflects our expectation that TEAM's
double-digit percentage revenue growth will continue through a
combination of organic and acquisition-related growth as well as
improving EBITDA margins. At the same time, we expect the company's
aggressive debt-financed growth strategy will cause it to sustain
leverage above 6x through 2021."
"We could lower the rating if TEAM's free cash flow is not able to
cover fixed charges, including debt amortization. This could happen
if the company experiences slowing revenue growth and a
200-basis-point (bp) decrease in gross margins as a result of
increasing competition, integration challenges, reimbursement
pressure rate cuts, a failure to successfully negotiate for price
increases, or acquisition-multiple increases."
"Although unlikely in the next 12 months, we could raise the rating
if we expect the company's discretionary free cash flow after
shareholder tax distribution to be sustained above 3% of debt
(about $15 million)."
ROCKY MOUNTAIN: M&K CPAs Replaces Prager Metis as Accountant
------------------------------------------------------------
Rocky Mountain High Brands, Inc., dismissed Prager Metis CPAs, LLC
as its independent registered public accounting firm. On Oct. 6,
2020, the Company engaged M&K CPAs PLLC as its new independent
registered public accounting firm. The engagement of the New
Accountant was approved by the Company's Board of Directors
effective Oct. 7, 2020.
The Former Accountant's audit reports on the financial statements
of the Company for the fiscal years ended Dec. 31, 2019 and 2018
contained no adverse opinion or disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope or
accounting principles, with the exception of substantial doubt
regarding the Company's ability to continue as a going concern.
During the fiscal years ended Dec. 31, 2019 and 2018, and during
all interim periods up through Oct. 7, 2020, there were no
"disagreements" (as such term is defined in Item 304 of Regulation
S-K) with the Former Accountant on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreements if not resolved
to the satisfaction of the Former Accountant would have caused them
to make reference thereto in their reports on the financial
statements for those periods.
During the fiscal years ended Dec. 31, 2019 and 2018, and through
all interim periods ended Oct. 7, 2020, there were the following
"reportable events" (as such term is defined in Item 304 of
Regulation S-K). As disclosed in Part I, Item 4 of the Company's
Form 10-Q for the quarterly period ended March 31, 2020, the
Company's management determined that the Company's internal
controls over financial reporting were not effective as of the end
of such period due to the existence of material weaknesses related
to the following:
(i) inadequate segregation of duties and ineffective risk
assessment; and
(ii) insufficient written policies and procedures for
accounting and financial reporting with respect to the
requirements and application of both US GAAP and SEC
guidelines.
These material weaknesses have not been remediated as of the date
of this Current Report on Form 8-K.
Prior to retaining the New Accountant, the Company did not consult
with the New Accountant regarding either: (i) the application of
accounting principles to a specified transaction, either
contemplated or proposed, or the type of audit opinion that might
be rendered on the Company's financial statements; or (ii) any
matter that was the subject of a "disagreement" or a "reportable
event" (as those terms are defined in Item 304 of Regulation S-K).
About Rocky Mountain
Rocky Mountain High Brands, Inc. is a lifestyle brand management
company that markets primarily CBD and hemp-infused products to
health-conscious consumers. The Company's products span various
categories including beverage, food, fitness, and skin care. RMHB
also markets a naturally high alkaline spring water and a
water-based protein drink with caffeine and B vitamins. All
products comply with federal regulations on hemp products and
contain 0.0% tetrahydrocannabinol (THC), the psychoactive
constituent of cannabis.
Rocky Mountain reported a net loss of $5.27 million for the year
ended Dec. 31, 2019, compared to a net loss of $3.35 million for
the year ended Dec. 31, 2018.
Prager Metis CPAs, LLC, in Basking Ridge, New Jersey, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated July 8, 2020, citing that the Company has a
shareholders' deficit of $2,622,351 and an accumulated deficit of
$40,285,145 as of Dec. 31, 2019 and has generated operating losses
since inception. These factors among others, raise substantial
doubt regarding the Company's ability to continue as a going
concern.
RUBY TUESDAY: Gets Court Nod to Tap Chunky $18.5M Ch. 11 Loan
-------------------------------------------------------------
Law360 reports that bankrupt casual restaurant dining chain Ruby
Tuesday received permission Friday, Oct. 9, 2020, from a Delaware
judge to tap into a portion of an $18.5 million
debtor-in-possession loan that will help fund its operations as it
pursues a Chapter 11 reorganization.
During a hearing conducted virtually, debtor attorney Maxim B.
Litvak of Pachulski Stang Ziehl & Jones LLP said the financing is a
critical factor in the company's restructuring hopes and without it
the business would likely not be able to continue operating as is
and the value of its assets would fall.
About Ruby Tuesday
Founded in 1972 in Knoxville, Tennessee, Ruby Tuesday, Inc. --
http://www.rubytuesday.com/-- is dedicated to delighting guests
with exceptional casual dining experiences that offer
uncompromising quality paired with passionate service every time
they visit. From signature handcrafted burgers to the farm-grown
goodness of the Endless Garden Bar, Ruby Tuesday is proud of its
long-standing history as an American classic and international
favorite for nearly 50 years. The Company currently owns, operates
and franchises casual dining restaurants in the United States,
Guam, and five foreign countries under the Ruby Tuesday® brand.
On Oct. 7, 2020, Ruby Tuesday, Inc., and 50 affiliates sought
Chapter 11 protection. The lead case is In re RTI Holding Company,
LLC (Bankr. D. Del. Lead Case No. 20-12456).
Ruby Tuesday was estimated to have $100 million to $500 million in
assets as of the bankruptcy filing.
The Hon. John T. Dorsey is the case judge.
Ruby Tuesday is advised by Pachulski Stang Ziehl & Jones LLP as
legal counsel, CR3 Partners, LLC, as financial advisor, FocalPoint
Securities, LLC, as investment banker, and Hilco Real Estate, LLC,
as lease restructuring advisor. Epiq is the claims agent,
maintaining the page https://dm.epiq11.com/RubyTuesday
SEVEN AND ROSE: Seeks Approval to Hire Barton Brimm as Counsel
--------------------------------------------------------------
Seven and Rose LLC seeks approval from the U.S. Bankruptcy Court
for the District of South Carolina to employ Barton Brimm, PA to
handle its Chapter 11 case.
The firm's hourly rates are as follows:
Christine E. Brimm, Attorney $350
Connie L. Fraser, Paralegal $125
In addition, the firm will be compensated for all work-related
expenses incurred.
Christine Brimm, Esq., an attorney at Barton Brimm, 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:
Christine E. Brimm, Esq.
Connie L. Fraser, Esq.
Barton Brimm, PA
P.O. Box 14805
Myrtle Beach, SC 29587
Telephone: (803) 256-6582
Facsimile: (803) 779-0267
About Seven and Rose
Seven and Rose LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.S.C. Case No. 20-03757)
on Oct. 5, 2020. At the time of the filing, Debtor disclosed
assets of between $1 million and $10 million and liabilities of the
same range. Judge John E. Waites oversees the case. Barton Brimm,
PA, led by Christine E. Brimm, Esq., serves as the Debtor's legal
counsel.
SHIFT4 PAYMENTS: Moody's Affirms B2 CFR, Outlook Positive
---------------------------------------------------------
Moody's Investors Service affirmed Shift4 Payments, LLC's Corporate
Family Rating of B2 and Probability of Default Rating of B2-PD.
Moody's assigned a senior unsecured rating of B2 to the company's
proposed senior notes issuance. The first lien senior secured
revolving credit facility rating was upgraded to Ba2 from B2. The
first lien term loan rating of B2 will be withdrawn upon
transaction closing. The rating outlook remains positive. The
action follows Shift4's announcement of a proposed refinancing of
its senior secured term loan with new senior unsecured notes.
"Shift4's continued market share gains will support its growth
trajectory as recovery develops over the course of 2021" said Peter
Krukovsky, Moody's Senior Analyst. "Investments in growth constrain
near-term free cash flow generation, but the strong cash liquidity
position provides ample flexibility. The positive rating outlook
reflects projected deleveraging in 2021 driven by EBITDA growth."
The following rating actions were taken:
Affirmations:
Issuer: Shift4 Payments, LLC
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Upgrades:
Issuer: Shift4 Payments, LLC
Senior Secured 1st Lien Revolving Credit Facility, Upgraded to Ba2
(LGD1) from B2 (LGD3)
Assignments:
Issuer: Shift4 Payments, LLC
Senior Unsecured Regular Bond/Debenture, Assigned B2 (LGD4)
Outlook Actions:
Issuer: Shift4 Payments, LLC
Outlook, Remains Positive
RATINGS RATIONALE
Shift4's credit profile reflects relatively small revenue scale and
high total leverage. However, the company's differentiated
vertical-specific integrated payments solutions position it for
solid growth over the medium term. The high proportion of
integrated customer relationships enhances stability of revenues,
and breadth and differentiation of the product offering presents
meaningful cross-sale growth opportunities. Prior to the
coronavirus (COVID) outbreak, Shift4's organic growth rate of 14%
in 2019 was meaningfully above average for the merchant acquiring
industry.
COVID is impacting Shift4 as payment volumes have declined due to
social distancing and weaker demand driven by high unemployment.
Moody's regards the coronavirus outbreak as a social risk under the
ESG framework. Shift4 is relatively more vulnerable to the COVID
disruption due to high SME and hospitality (restaurants and hotels)
exposure, as well as relatively low e-commerce contribution.
However, Shift4 continues to gain market share in its verticals
during the downturn, positioning it for strong growth in 2021 when
its target markets begin to recover. Moody's project Shift4's net
revenues to decline 6% in 2020 (compared to pro forma 2019
including 12 months of MerchantLink) and projects revenue growth of
17% in 2021. The company is making significant investments in
operating expenses and capitalized customer acquisition costs to
drive revenue growth which constrain near-term free cash flow.
Moody's projects free cash flow to be about breakeven in 2020 in a
trough demand year, and expects higher free cash flow in 2021.
Following equity offerings in June and September 2020, Shift's cash
balance as of September will likely exceed $325 million or over 70%
of funded debt. The pending refinancing of secured bank debt with
unsecured notes will extend maturities, but implies no plans to
repay debt. Moody's projects EBITDA growth in 2021 to drive
Shift4's total leverage below 4.5x. Moody's expects Shift4 to
continue to invest aggressively in organic growth and to
potentially pursue acquisitions.
The Ba2 facility rating for Shift4's secured revolving credit
facility, three notches higher than the B2 CFR, reflects its senior
position in the capital structure and small size relative to the
unsecured notes. The B2 facility rating for the unsecured notes, in
line with the B2 CFR, reflects the fact that the notes comprise the
preponderance of Shift4's debt capital structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The positive outlook reflects Moody's expectation of credit profile
improvement in 2021 driven by revenue growth, with leverage
declining below 4.5x. The ratings could be upgraded if Shift4
generates consistent organic revenue and EBITDA growth, and if
Moody's adjusted total leverage is sustained at about 4.5x and
FCF/debt is sustained in the mid-single digits. The ratings could
be downgraded if Shift4 experiences a sustained revenue or
profitability decline, or if Moody's adjusted total leverage is
sustained above 6.5x and free cash flow is breakeven.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
SMS ENTERPRISES: Unsecureds to Receive Nothing in Sale-Based Plan
-----------------------------------------------------------------
SMS Enterprises, Inc. and its debtor affiliates filed with the U.S.
Bankruptcy Court for the District of New Jersey a Combined Plan of
Liquidation and Disclosure Statement dated August 21, 2020.
The Debtors' Plan is a liquidating plan in which all remaining
assets of the Debtors will be liquidated in accordance with the
provisions of the Bankruptcy Code.
On July 1, 2020, the Debtors sold substantially all of their assets
to Dev Foods 3, LLC free and clear of liens, claims, and
encumbrances. As approved by the Bankruptcy Court, the proceeds of
the sale paid the first position secured claim of Covenant Bank,
the critical vendor Maines Paper & Food Co., and administrative
expenses. Following the sale, the Debtors collectively retained
$349,125 from the sale of the Debtors’ assets. Combined with the
funds previously in the Debtors’ operating accounts and after
payment of the expenses in the ordinary course of business, the
Debtors collectively have $323,683 in their accounts, plus $9,372
held by Debtors' counsel following the sale.
The remainder of the Debtors' funds will be paid to the secured
creditor with the highest priority secured claim. OnDeck Capital,
Inc. has the first position secured claim against each of the
Debtors' estates and will be paid the remainder of the Debtors'
assets, on the 90th day following the Effective Date of the
Debtors' Plan.
The Debtors have unsecured claims as follows: (i) SMS Enterprises,
Inc. - $1,310,240; (ii) SPS Enterprises, Inc.- $514,075; (iii) ETA
Enterprises, Inc. -$493,338. This Plan does not provide for the
payment of any amounts to unsecured creditors.
Following the confirmation of the Plan, the interest holders will
have their equity held in the Debtors cancelled and the Debtors
anticipate dissolving the Debtors in accordance with New Jersey
state law.
Given the fact that the same professionals, the State of New
Jersey, and OnDeck will receive all funds from the Debtors'
estates, this plan substantively consolidates all of the Debtors'
estates into one estate. No creditors are negatively affected by
this substantive consolidation since no individual Debtor has
sufficient funds to pay OnDeck’s claim against it in full.
A full-text copy of the Combined Plan and Disclosure Statement
dated August 21, 2020, is available at https://tinyurl.com/y2bw2wyx
from PacerMonitor at no charge.
Counsel for the Debtors:
DAMIEN NICHOLAS TANCREDI, ESQUIRE
FLASTER/GREENBERG P.C.
Commerce Center
1810 Chapel Avenue West
Cherry Hill, NJ 08002-4609
Tel: (215) 587-5675
About SMS Enterprises
SMS Enterprises Inc. is a privately held company that operates in
the restaurant industry. SMS Enterprises, based in Marlton, NJ,
filed a Chapter 11 petition (Bankr. D.N.J. Case No. 19-21332) on
June 5, 2019. In the petition signed by Eric Salisbury, chief
executive officer/owner, the Debtor was estimated to have $1
million to $10 million in both assets and liabilities. The Hon.
Jerrold N. Poslusny Jr. oversees the case. Paul W. Verner, Esq.,
serves as bankruptcy counsel.
SOS TOWING: Combined Plan & Disclosure Confirmed by Judge
---------------------------------------------------------
Judge Brenda T. Rhoades has entered an order confirming the
Combined First Chapter 11 Plan and Disclosure Statement of Debtor
SOS Towing, LLC.
The Plan has been proposed in good faith and not by any means
forbidden by law. Any payments for services or for costs and
expenses in connection with the case, or in connection with the
Plan and incident to the case, have been approved by, or are
subject to the approval of, this Court as reasonable.
The proponent of the Plan has disclosed the identity and
affiliation of any individual proposed to serve, after confirmation
of the Plan, as an affiliate or successor of the Debtor, the
continuation in such employment is in the best interest of the
creditors and public policy, and the nature of any compensation for
such insider.
Holders of Allowed Administrative Claims will be paid in full.
Holders of Allowed Priority Claims will be paid pursuant to Section
1129.
A full-text copy of the order dated August 21, 2020, is available
at https://tinyurl.com/y458gfbl from PacerMonitor at no charge.
The Debtor is represented by:
Joyce W. Lindauer
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, Texas 75202
About SOS Towing
SOS Towing, LLC, a Texas-based company that offers automotive
towing services, filed a voluntary petition under Chapter 11
Bankruptcy Code (Bankr. E.D. Tex. Case No. 20-40496) on Feb. 18,
2020. The petition was signed by SOS Towing President Anthony
Trujillo. At the time of the filing, Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Debtor has tapped Joyce W. Lindauer Attorney, PLLC as its
legal counsel.
SOUTHWEST AIRLINES: Egan-Jones Lowers Sr. Unsecured Ratings to BB+
------------------------------------------------------------------
Egan-Jones Ratings Company, on October 8, 2020, downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Southwest Airlines Co to BB+ from BBB-.
Headquartered in Dallas, Texas, Southwest Airlines Co. is a
domestic airline that provides primarily short-haul,
high-frequency, and point-to-point services.
SOVOS BRANDS: Moody's Affirms B3 CFR & Alters Outlook to Positive
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Moody's Investors Service affirmed the ratings of Sovos Brands
Intermediate, Inc, including its Corporate Family Rating at B3, its
Probability of Default Rating at B3-PD, and its first lien senior
secured debt instrument ratings at B3. Moody's also assigned a B3
rating to a proposed $380 million term loan launched that Sovos
will use to refinance existing debt and to fund a pending
acquisition. The outlook was revised to positive from stable.
Proceeds from the proposed $380 million term loan along with cash
on hand will be used to refinance an existing $280 million secured
term due 2025 and to partially fund the acquisition of premium
pancake mix brand Birch Benders, along with associated transaction
fees and expenses. Moody's took no action on the B3 rating on the
existing term loan and will withdrawal the rating once the facility
is repaid as part of the proposed transactions.
Moody's changed the rating outlook to positive, reflecting the
strong performance of the Rao's franchise, the company's successful
efficiency initiatives, and lower integration costs that together
have increased earnings and free cash flow meaningfully in 2020 and
reduced financial leverage.
Moody's considers the proposed transactions to be credit positive,
but not a key factor in the positive outlook. In addition to the
benefit of extending the company's debt maturities, the acquisition
of Birch Benders will improve sales and segment diversification and
enhance the growth potential of Sovos' business portfolio. In
addition, the use of a significant amount of cash on hand to fund a
third of the purchase price for Birch Benders mitigates the
acquisition's effect on financial leverage.
Moody's affirmed the B3 CFR, taking into consideration that the
transactions will increase proforma debt/EBITDA at LTM Q2 2020 to
roughly 5.4x from 4.3x. In addition, while Birch Benders will
improve earnings diversity, Moody's expects that EBITDA generation
will continue to be highly concentrated in the fast-growing Rao's
franchise, which represents over 60% of total EBITDA. All of the
company's brands are currently benefiting from the effects of
coronavirus that has boosted retail sales of retail packaged foods
including pasta sauce. Thus, a portion of the company's sales gains
are not likely to be sustained through 2021 as the positive effects
gradually abate, which creates risk that the current leverage and
free cash flow levels will not be sustained.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: Sovos Brands Intermediate, Inc
GTD Senior Secured 1st Lien Term Loan B, Assigned B3 (LGD4)
Ratings Affirmed:
Issuer: Sovos Brands Intermediate, Inc
Corporate Family Rating, Affirmed at B3
Probability of Default Rating, Affirmed at B3-PD
GTD Senior Secured Revolving Credit Facility, Affirmed at B3
(LGD4)
Outlook Actions:
Issuer: Sovos Brands Intermediate, Inc
Outlook, Revised to Positive from Stable
RATINGS RATIONALE
Sovos Brands Intermediate, Inc's B3 CFR reflects its moderately
high financial leverage, limited operating history (since 2017),
and execution risks associated with its acquisition driven growth
strategy. The rating is supported by the growing brand equities of
its "Rao's", "noosa", and "Birch Benders" brands. Sovos has good
segmental sales diversification in pasta sauce, yoghurt, frozen
meals, and pancake mix although Rao's represents more than half of
total sales. The company's credit profile is constrained by its
high financial policy risk reflecting possible future acquisitions;
concentration of earnings in the highly competitive pasta sauce and
yoghurt categories; weak long-term growth prospects of the US
yoghurt category; and small scale of its "Michael Angelo's" frozen
food brand.
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Moody's analysis has considered the effect on the performance of
consumer sectors from the current weak U.S. economic activity and a
gradual recovery for the coming months. Although an economic
recovery is underway, it is tenuous and its continuation will be
closely tied to containment of the virus. As a result, the degree
of uncertainty around its forecasts is unusually high. Moody's
regards the coronavirus outbreak as a social risk under its ESG
framework, given the substantial implications for public health and
safety.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Sovos Brands sustains stable operating
performance in key segments, debt/EBITDA below 7.0x, and
EBITA/interest above 1.5x. In addition, the company will need to
maintain earnings close to the higher base achieved in 2020 and
sustainably generate positive free cash flow before Moody's would
consider an upgrade.
Ratings could be downgraded if operating performance deteriorates
because of lower revenue or market share, financial leverage moves
meaningfully higher, or EBITA/interest falls below 1.0x. Ratings
also could be downgraded if significantly negative free cash flow
persists, or if liquidity weakens.
The principal methodology used in these ratings was Consumer
Packaged Goods Methodology published in February 2020.
Berkley, CA based Sovos Brands was formed in 2016 by private equity
firm Advent International as a platform to build a diversified
branded packaged food company, principally through acquisitions.
Since inception, the company has acquired three major brands:
Michael Angelo's frozen Italian meals in January 2017, Rao's pasta
sauces in July 2017, and Noosa yoghurt in November 2018. The
acquisition of Birch Benders will close this year. The company's
sales, pro forma for the pending Birch Benders acquisition, were
approximately $520 million for the twelve months ending June 30,
2020.
SPOILED SWEET: Unsecureds Owed More than $3.5K to Recover 90%
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Spoiled Sweet Designs, Inc. filed with the U.S. Bankruptcy Court
for the Western District of Tennessee, Western Division, a
Disclosure Statement describing Chapter 11 Plan dated August 21,
2020.
On June 10, 2020, Debtor received preliminary approval for a
federal Economic Injury Disaster Loan (“EIDL”). The Debtor will
use the use the EIDL funds to make substantial initial payments
(“Down Payments”) to TDR and Landmark to reduce their balances,
as they are, by far, the largest creditors of the Debtor’s
estate. The remaining funds will be used as operating capital to
fund Debtor’s operations, primarily in purchasing inventory for
the fall and Christmas seasons. Debtor’s walk-in retail business
has recovered substantially, and its online and telephone orders
have increased significantly. As indicated by its monthly operating
reports, Debtor has, overall, been profitable since the Chapter 11
filing, notwithstanding two unprofitable months as the Covid-19
virus took hold.
The Class 6 claims, unsecured claims equal to or reduced to $3,500
or less, shall be paid in full in cash from funds on had in the
Debtor's operating account in three approximately equal monthly
installments within 60 days of the Effective Date.
The Class 7 claims, unsecured claims of more than $3,500, shall be
paid 90% of the claim amount over a period of 60 months in
approximately equal monthly installments commencing within 60 days
of the Effective Date.
The Class 10 equity holders shall retain their interest in the
Debtor and the members of Class 10 shall continue to retain and
hold their shares in the Debtor corporation.
The Debtor intends to continue to operate Spoiled Sweet Boutique in
its present location and fund the plan payments from its operating
revenues. To the extent it may be possible, Debtor will accumulate
all or a portion of its surplus revenue periodically and use any
such surplus to make advance payments on the scheduled payments set
forth in this Plan, in order to complete execution of the Plan as
quickly and expeditiously as possible. Provided, that any such
advance payments will be in the Debtor’s sole, exclusive and
absolute discretion and based solely on the Debtor’s
determination that there are adequate funds to make advance
distributions without hindering the Debtor’s business operations
or financial position.
A full-text copy of the disclosure statement dated August 21, 2020,
is available at https://tinyurl.com/y6my49mg from PacerMonitor.com
at no charge.
Attorney for Spoiled Sweet:
WAMPLER, CARROLL, WILSON & SANDERSON, PC
P. Preston Wilson (BPR #4304)
44 N. 2nd Street, Suite 500
Memphis, TN 38103
Tel: 901-523-1844
About Spoiled Sweet Designs
Based in Germantown, Tennessee, Spoiled Sweet Designs, Inc. filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Tenn. Case No. 19-28449) on Oct. 23, 2019,
disclosing under $1 million in both assets and liabilities. Judge
George W. Emerson Jr. oversees the case. Preston Wilson, Esq., at
Wampler & Pierce, PC, is the Debtor's legal counsel.
STAMATINA HOLDINGS: Seeks to Hire Pronske & Kathman as Counsel
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Stamatina Holdings, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Texas to employ Pronske &
Kathman, P.C. as legal counsel.
Pronske & Kathman will render these legal services:
(a) provide legal advice with respect to the Debtor's powers
and duties in the continued operation of its business and the
management of its property;
(b) take all necessary action to protect and preserve the
Debtor's estate;
(c) prepare legal papers;
(d) assist the Debtor in preparing a disclosure statement and
plan of reorganization; and
(e) perform other legal services for the Debtor in connection
with its Chapter 11 case.
The firm will charge at its normal billing rates for attorneys and
legal assistants and will request reimbursement for out-of-pocket
expenses incurred.
Prior to the petition date, the firm received a $4,000 retainer
from the Debtor.
Gerrit Pronske, Esq., an attorney at Pronske & Kathman, disclosed
in court filings that the firm neither holds nor represents any
interest adverse to the Debtor's estate.
The firm can be reached through:
Gerrit M. Pronske, Esq.
Megan F. Clontz, Esq.
Pronske & Kathman, P.C.
2701 Dallas Parkway, Suite 590
Plano, TX 75093
Telephone: (214) 658-6500
Facsimile: (214) 658-6509
Email: gpronske@pronskepc.com
mclontz@pronskepc.com
About Stamatina Holdings
Stamatina Holdings, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No.
20-41538) on July 6, 2020, listing under $1 million in both assets
and liabilities. Judge Brenda T. Rhoades oversees the case. Pronske
& Kathman, P.C., serves as the Debtor's legal counsel.
UNIFIED PROTECTIVE: Unsecured Creditors to Have 1% Recovery in Plan
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Unified Protective Services, Inc., filed an Amended Chapter 11
Disclosure Statement which relates to the accompanying Amended
Chapter 11 Plan.
Class 4 General Unsecured Claims consists of general unsecured
claims which will receive, over time, the following estimated
percentage of their claims: 1 percent. The Amended Plan may
designate a subclass of small "convenience class" claims which will
be paid in full on the Effective Date, and in rare situations the
Amended Plan may designate additional unsecured subclasses.
Class 5 Interests will remain unchanged unless otherwise stated in
the exhibits to the Amended Plan or this Amended Disclosure
Statement.
As reflected in the Updated Cash Flow Projections, the Debtor will
have sufficient cash on the effective date to make the required
plan payments. Debtor's income varies from month to month and
around the holidays, many of the Debtor's customersare in increased
need for security guards. This will generate additional income
necessary for the effective date payments. Debtor is also
diligently working on getting new accounts which will generate
sufficient income to fund the Amended Plan.
A full-text copy of the Amended Disclosure Statement dated Aug. 25,
2020, is available at https://tinyurl.com/y5tte92o 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 Unified Protective
Unified Protective Services, Inc., is a security guard service
provider in Hawthorne, California. Its services include day and
night armed or unarmed security, vehicle security patrol, camera
surveillance and executive protection.
On June 1, 2019, Unified Protective Services sought Chapter 11
protection (Bankr. C.D. Cal. Case No. 19-16482). The Debtor was
estimated to have $500,000 to $1 million in assets and $1 million
to $10 million in liabilities as of the bankruptcy filing. The
Hon. Neil W. Bason is the case judge. The LAW OFFICES OF MICHAEL
JAY BERGER is the Debtor's counsel.
WEBER-STEPHEN PRODUCTS: Moody's Assigns B1 CFR, Outlook Stable
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Moody's Investors Service assigned first-time new issuer ratings
for Weber-Stephen Products LLC (Weber), including a B1 Corporate
Family Rating (CFR) and B1-PD Probability of Default Rating (PDR).
Concurrently, Moody's assigned a B1 rating to the company's senior
secured first lien credit facilities, consisting of a proposed new
$300 million 5-year revolver due 2025 and $1,200 million 7-year
term loan B due 2027. The outlook is stable.
Net proceeds from the proposed $1,200 million senior secured first
lien term loan, after paying fees and expenses, are expected to be
used to refinance existing debt, increase cash liquidity by $200
million available for general corporate purposes including working
capital, prefund $350 million of growth investments including M&A,
or if not utilized within six months of closing, to pay a dividend
distribution to shareholders. The revolver facility is expected to
be undrawn at close.
All ratings are subject to Moody's review of final documentation.
Assignments:
Issuer: Weber-Stephen Products LLC
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B1-PD
Senior Secured 1st Lien Term Loan, Assigned B1 (LGD3)
Senior Secured 1st Lien Revolving Credit Facility, Assigned B1
(LGD3)
Outlook Actions:
Issuer: Weber-Stephen Products LLC
Outlook, Assigned Stable
RATINGS RATIONALE
Weber's B1 CFR reflects its relatively moderate and improving scale
with annual revenue under $1.5 billion, and its solid
market-leading position and good brand recognition within the
outdoor grill industry, aided by its over 70 year history. The
company benefits from its good geographic diversification, long
stablished relationships with its major customers, and its growing
ecommerce business. Consumer demand for the company's products has
been very strong year-to-date as consumers increased food-at-home
consumption and are spending more on outdoor activities such as
grilling, due to stay at home and social distancing measures
because of the coronavirus pandemic. Moody's expects good consumer
demand to continue into the first half of calendar 2021, supported
by a solid US housing market, and continued focus on social
distancing, outdoor activities, and at-home dining. Weber's
diversified product offering within the outdoor grills category
with different price points should appeal to different consumer
income demographics and tastes, and helps mitigate exposure to weak
macroeconomic cycles. Weber has a relatively good EBIT margin that
supports good cash flow generation and strong interest coverage.
Profit margins should benefit from ongoing cost savings and
operating efficiency initiatives over the next 12-18 months.
However, free cash flows will be pressured by the associated higher
capital expenditures in fiscal 2021. The credit profile reflects
Moody's view that free cash flow excluding the elevated capital
spending and working capital needs in fiscal September 2021 are in
the $70-$90 million range, and Moody's expects Weber's free cash
flow to be in that range in fiscal 2022. The company's good
liquidity reflects its relatively healthy cash balance of around
$276 million and access to a $300 million undrawn revolver due
2025, pro forma for the recapitalization transaction. The cash
balance helps prefund the seasonal working capital needs and
elevated capital spending expected in fiscal 2021.
Weber's rating also considers its narrow product focus in the
somewhat mature and discretionary outdoor grills product category.
The company's financial leverage is high with debt/EBITDA at around
5.5x for the twelve months period ending June 30, 2020, and pro
forma for the recapitalization transaction. However, Moody's
projects debt/EBITDA will improve to 5.0x or lower based on strong
consumer demand for grills this summer. Moody's believes it will be
challenging to sustain that elevated demand level in fiscal 2021
but that debt/EBITDA will remain under 5.0x over the next 12-18
months, primarily from growth initiatives with flexibility to
reduce debt from free cash flow if earnings are weaker than
anticipated. The company has high customer concentration, and its
profitability and cash flows are highly seasonal, centered around
the summer months. The company has aggressive financial policies
under ownership by its controlling shareholder, highlighted by its
history of debt-financed shareholder distributions.
The B1 rating assigned to the company's proposed senior secured
first lien credit facilities, the same as the CFR, reflects these
facilities represent the preponderance of the company's capital
structure.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Moody's analysis has considered the effect on the performance of
consumer durables companies from the current weak US economic
activity and a gradual recovery for the coming months. Although an
economic recovery is underway, it is tenuous and its continuation
will be closely tied to containment of the virus. As a result, the
degree of uncertainty around its forecasts is unusually high.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.
Environmental considerations are not significant credit
considerations, but factors such as responsible sourcing help
protect Weber's strong and valuable brand image.
Governance risks factors primarily considered the company's
aggressive financial policies under private equity ownership,
highlighted by its history of shareholder distributions financed
with incremental debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that Weber's
debt/EBITDA financial leverage will moderate to under 5.0x over the
next 12-18 months driven largely from stable revenues with
operating profit margin expansion, as sales benefits from continued
good consumer demand and profitability benefits from ongoing
operating efficiency initiatives. The stable outlook also reflects
Moody's expectation that the company will maintaining at least good
liquidity over the next 12-18 months with free cash flow of $70-90
million excluding elevated capital spending and working capital
needs in fiscal 2021.
The ratings could be upgraded if the company demonstrates
consistent organic revenue growth and operating margin expansion,
while debt/EBITDA is sustained below 4.0x and retained cash flow
(RCF)/net debt is sustained above 17.5%. A ratings upgrade would
also require the company to maintain at least good liquidity, and
Moody's expectations of more balanced financial policies.
Ratings could be downgraded if the company's operating performance
deteriorates with consistent declines in revenue or profit margins
deterioration, or if debt/EBITDA is sustained above 5.0x, or
RCF/net debt falls below 10%. Rating could also be downgraded if
the company completes a large debt-financed acquisition or
shareholder distribution that materially increases financial
leverage, or if liquidity deteriorates for any reason.
The proposed first lien credit agreement contains provisions for
incremental debt capacity up to the greater of $230 million and
100% of consolidated pro forma trailing four quarter consolidated
EBITDA, plus additional amounts under the general debt and lien
baskets (up to $230 million), plus additional amounts subject to a
pro forma first lien net leverage requirement not to exceed 4.5x
(if pari passu secured). The incremental could also be used to
finance a permitted acquisition or investment, with a requirement
not to increase first lien net leverage on a pro forma basis. Up to
$230 million of the incremental debt can be incurred with an
earlier maturity date. Moody's estimates the incremental first lien
net leverage that the company can incur adds about 2.5x of first
lien leverage. Only wholly-owned domestic subsidiaries act as
subsidiary guarantors; partial dividend of ownership interest could
jeopardize guarantees subject to limitation by credit agreement.
The credit agreement also permits the designation of unrestricted
subsidiaries and the transfer of assets to unrestricted
subsidiaries, subject to a limited blocker provision limiting the
transfer of intellectual property material to the business, taken
as a whole to unrestricted subsidiaries, and the limitations and
baskets in the negative covenants. In addition, the asset-sale
proceeds prepayment requirement has leverage-based step-downs and
is eliminated if the first lien net leverage ratio is less than
3.5x, with the right to reinvest or commit to reinvest within 18
months (subject to extension to 24 months). The above is proposed
terms and the final terms of the credit agreement can be materially
different.
Headquartered in Palatine, Illinois, Weber-Stephen Products LLC
(Weber) is a global manufacturer, marketer and distributor of
barbecue grills and accessories. Since 2010, the company is
controlled by BDT Capital Partners, LLC, with the Stephen family
and management holding a minority interest. Revenue for the last
twelve months period ending June 30, 2020 was under $1.5 billion.
The principal methodology used in these ratings was Consumer
Durables Industry published in April 2017.
ZATO INVESTMENTS: Court Approves Disclosure Statement
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Judge Phyllis M. Jones has entered an order approving the
Disclosure Statement of debtor Zato Investments Ltd. Co. in all
respects and the Debtor may solicit ballots on the acceptance or
rejection of its Amended Chapter 11 Plan of Reorganization.
One objection to the sufficiency of the Disclosure Statement was
received in the time allowed by the aforementioned Notice, that of
JTS Capital Realty SB LLC. The court is advised that such
objection is withdrawn, and its withdrawal is done by the entry of
the Order.
A full-text copy of the order dated August 25, 2020, is available
at https://tinyurl.com/y6h988t3 from PacerMonitor at no charge.
About Zato Investments
Zato Investments Ltd. Co. owns real estate and improvements,
consisting of single-family and multi-family residences for lease
to the public at Little Rock, Arkansas.
Zato Investments sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Ark. Case No. 19-13288) on June 24,
2019. At the time of the filing, the Debtor was estimated to have
assets of between $500,001 and $1 million and liabilities of the
same range. The case is assigned to Judge Phyllis M. Jones.
Stanley V. Bond, Esq., of Bond Law Office, is the Debtor's counsel.
[*] North American Energy Bankruptcies Surge in Third Quarter
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Reuters reports that bankruptcies in the North American energy
industry surged in the third quarter as companies struggled with
weak fuel demand due to the COVID-19 pandemic, lower crude prices
and a dearth of available credit, according to law firm Haynes and
Boone.
In the three months to September 2020, 17 oil producers sought
bankruptcy protection, fueling a 21% jump in such filings in the
first nine months of 2020 from a year earlier, the report said on
Tuesday.
As producers halted or scaled back exploration and drilling to rein
in expenses, oilfield service providers have been hit even harder.
There were 26 new bankruptcy filings from service companies in the
third quarter, compared with 11 in the year-ago period, the report
notes.
The pain is set to worsen as lenders undertake the bi-annual
redetermination of how much credit should be available to
producers.
Available credit is expected to drop 15.7% after the fall
redetermination season, a Haynes and Boone survey shows. Tens of
billions of dollars in borrowing power was wiped out during the
spring redeterminations.
The midstream sector has been relatively shielded from the recent
rout, but with the market turmoil dragging on and producers trying
to avoid onerous contracts, a number of them may approach
bankruptcy courts during the rest of the year, said Haynes and
Boone.
Through Sept. 30, just 32 midstream companies had filed for Chapter
11 bankruptcy in the United States since 2015, with only one of
those in the third quarter.
[*] U.S. Shale Producers Beleaguered by Bankruptcies
----------------------------------------------------
Sayantika Bhattacharya of Nasdaq reports that the coronavirus chaos
has perturbed most energy players, especially the offshore drilling
companies. As the drop in oil prices and the ramp-down of business
activity due to the pandemic mess weakened demand for offshore
drilling services, the relevant companies were left debt-laden
without access to credit.
Of the seven largest offshore drillers, Diamond Offshore Drilling
DOFSQ as well as three other companies, namely Noble Corporation
NE, Seadrill Limited and Valaris Plc VALPQ either sought protection
from creditors under the chapter 11 or already began
debt-restructuring discussions to avoid insolvency. These companies
tend to utilize the proceedings of reformation to streamline and
boost their balance sheet positions, thereby attaining a more
secure debt profile while continuing to concentrate on safe,
reliable and efficient contract drilling services for their global
clients.
Apart from the offshore drillers, the steep fall in oil prices
caused several shale producers to go bankrupt. Not so long ago, the
United States became the world's largest oil producer, led by shale
companies with production of about 13 million barrels per day
(bpd). However, shale drilling usually suffers sharp decline rates,
causing quick depletion of wells. Consequently, the operators are
required to go on drilling new wells to compensate for the lost
barrels of oil produced. This induced most shale producers to incur
heavy debt to finance their operations.
Eventually, with the meltdown in oil prices, activity in the shale
region became economically inviable, given the massive capital
burns, depressed returns and huge debts. What followed was a string
of bankruptcies.
Shale producer Oasis Petroleum OAS is the latest to file for
Chapter 11 bankruptcy protection after coronavirus-induced oil
price crash dried up the available capital in the energy industry.
The company filed for Chapter 11 with an intention to improve its
financial position and significantly lower its debt.
Last September 2020, another energy player Whiting Petroleum
Corporation WLL recovered from bankruptcy and its ownership was
made available to the public on the New York Stock Exchange.
Whiting Petroleum filed for chapter 11 bankruptcy on Apr 1, 2020
and finally overcame the crisis through a strenuous realigning
process on Sep 1. The entity was the first publicly traded shale
producer to file for bankruptcy after the historic plunge in crude
prices during March.
Some shale companies, such as Lonestar Resources, Chaparral Energy,
Extraction Oil & Gas XOGAQ, Lilis Energy, Ultra Petroleum and
currently the Zacks Rank #3 (Hold) Chesapeake Energy CHKAQ were
already struggling to make a profit even before the coronavirus had
struck and therefore all filed for bankruptcy.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re DAJR Trucking, LLC
Bankr. E.D. Ark. Case No. 20-13842
Chapter 11 Petition filed October 7, 2020
See
https://www.pacermonitor.com/view/ZHIFOBY/DAJR_Trucking_LLC__arebke-20-13842__0001.0.pdf?mcid=tGE4TAMA
represented by: Asa Francis King, Esq.
LAW OFFICE OF ASA F. KING PLLC
E-mail: asa@kingfirm.us
In re Freedom 123 LLC
Bankr. E.D. Cal. Case No. 20-24691
Chapter 11 Petition filed October 7, 2020
See
https://www.pacermonitor.com/view/IM5FVII/Freedom_123_LLC__caebke-20-24691__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Next Move Inc
Bankr. D. Colo. Case No. 20-16643
Chapter 11 Petition filed October 7, 2020
See
https://www.pacermonitor.com/view/EKMZ3MA/Next_Move_Inc__cobke-20-16643__0001.0.pdf?mcid=tGE4TAMA
represented by: Devon Michael Barclay, Esq.
DEVON BARCLAY PC
E-mail: devon@devonbarclaypc.com
In re Platinum Care Services, Inc.
Bankr. N.D. Ill. Case No. 20-18358
Chapter 11 Petition filed October 7, 2020
See
https://www.pacermonitor.com/view/B47AGPQ/Platinum_Care_Services_Inc__ilnbke-20-18358__0001.0.pdf?mcid=tGE4TAMA
represented by: John J. Lynch, Esq.
LYNCH LAW LLC
E-mail: JLynch@Lynch4Law.com
In re Marina Lyubarova
Bankr. E.D.N.Y. Case No. 20-43573
Chapter 11 Petition filed October 7, 2020
represented by: Alla Kachan, Esq.
In re Data Analyzers, LLC
Bankr. M.D. Fla. Case No. 20-05685
Chapter 11 Petition filed October 8, 2020
See
https://www.pacermonitor.com/view/GEJ3MGI/Data_Analyzers_LLC__flmbke-20-05685__0001.0.pdf?mcid=tGE4TAMA
represented by: Jeffrey S. Ainsworth, Esq.
BRANSONLAW, PLLC
E-mail: jeff@bransonlaw.com
In re Puthenveetil K. Bobby
Bankr. N.D. Ill. Case No. 20-18444
Chapter 11 Petition filed October 8, 2020
represented by: Ariel Weissberg, Esq.
In re Jean N. Chery
Bankr. D. Mass. Case No. 20-12034
Chapter 11 Petition filed October 8, 2020
represented by: Patrick Culhane, Esq.
In re Kathy J. Stidham
Bankr. E.D. Mo. Case No. 20-44779
Chapter 11 Petition filed October 8, 2020
represented by: David Dare, Esq.
In re Olympic Restaurants LLC
Bankr. N.D. Ohio Case No. 20-14537
Chapter 11 Petition filed October 8, 2020
See
https://www.pacermonitor.com/view/IUMYOLA/Olympic_Restaurants_LLC__ohnbke-20-14537__0001.0.pdf?mcid=tGE4TAMA
represented by: Frederic P. Schwieg, Esq.
FREDERIC P SCHWIEG ATTORNEY AT LAW
E-mail: fschwieg@schwieglaw.com
In re Fremont Hills Development Corporation
Bankr. N.D. Calif. Case No. 20-51485
Chapter 11 Petition filed October 9, 2020
See
https://www.pacermonitor.com/view/LHRPOTA/Fremont_Hills_Development_Corporation__canbke-20-51485__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael D. Lee, Esq.
LEE BANKRUPTCY & RESTRUCTURING COUNSEL
E-mail: Michael.Lee@Lee-Li.com
In re Ronald G. Linaburg
Bankr. W.D. Pa. Case No. 20-22898
Chapter 11 Petition filed October 9, 2020
represented by: Brian Thompson, Esq.
THOMPSON LAW GROUP, P.C.
In re The Cracked Egg LLC
Bankr. W.D. Pa. Case No. 20-22889
Chapter 11 Petition filed October 9, 2020
See
https://www.pacermonitor.com/view/XSANPQQ/The_Cracked_Egg_LLC__pawbke-20-22889__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert O. Lampl, Esq.
ROBERT O LAMPL LAW OFFICE
E-mail: rlampl@lampllaw.com
In re SRAK Corporation
Bankr. N.D. Tex. Case No. 20-43155
Chapter 11 Petition filed October 9, 2020
See
https://www.pacermonitor.com/view/HXZOAEY/SRAK_Corporation__txnbke-20-43155__0001.0.pdf?mcid=tGE4TAMA
represented by: Brandon Tittle, Esq.
GLAST PHILLIPS & MURRAY, P.C.
E-mail: btittle@gpm-law.com
In re 511 Group LLC
Bankr. S.D. Fla. Case No. 20-21098
Chapter 11 Petition filed October 12, 2020
See
https://www.pacermonitor.com/view/TQQKEFY/511_Group_LLC__flsbke-20-21098__0001.0.pdf?mcid=tGE4TAMA
represented by: Joel M. Aresty, Esq.
JOEL M. ARESTY P.A.
E-mail: aresty@icloud.com
In re Elite Tour Travel Club, LLC
Bankr. D. Md. Case No. 20-19201
Chapter 11 Petition filed October 12, 2020
See
https://www.pacermonitor.com/view/FGP5BVI/Elite_Tour_Travel_Club_LLC__mdbke-20-19201__0001.0.pdf?mcid=tGE4TAMA
represented by: Jason E. Miles, Esq.
LAW OFFICE OF J. EUGENE MILES
E-mail: jeugenemiles@gmail.com
In re Charles W. Jones
Bankr. W.D. Tenn. Case No. 20-11324
Chapter 11 Petition filed October 12, 2020
represented by: Jerome C. Teel, Jr., Esq.
In re Wislon Salon and Spa Inc.
Bankr. S.D. Fla. Case No. 20-21138
Chapter 11 Petition filed October 13, 2020
See
https://www.pacermonitor.com/view/EJFZGZI/Wislon_Salon_and_Spa_Inc__flsbke-20-21138__0001.0.pdf?mcid=tGE4TAMA
represented by: Julianne Frank, Esq.
JULIANNE FRANK, ATTY AT LAW
E-mail: julianne@jrfesq.com
In re LeMar Allen Bowers
Bankr. E.D. Va. Case No. 20-34139
Chapter 11 Petition filed October 13, 2020
represented by: James Kane, Esq.
KANE & PAPA, PC
In re Luis Antonio Esteves Rivera
Bankr. D. P.R. Case No. 20-04034
Chapter 11 Petition filed October 13, 2020
represented by: Jesus Enrique Batista Sanchez, Esq.
In re Paverock, Inc.
Bankr. S.D. Tex. Case No. 20-34982
Chapter 11 Petition filed October 13, 2020
See
https://www.pacermonitor.com/view/CC32JRI/Paverock_Inc__txsbke-20-34982__0001.0.pdf?mcid=tGE4TAMA
represented by: Margaret M. McClure, Esq.
LAW OFFICE OF MARGARET M. MCCLURE
E-mail: margaret@mmmcclurelaw.com
In re Brian Christopher Nyberg
Bankr. D. Utah Case No. 20-26108
Chapter 11 Petition filed October 13, 2020
represented by: Geoffrey L. Chesnut, Esq.
RED ROCK LEGAL SERVICES, P.L.L.C.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
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public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
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the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
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than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
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liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
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then-ending.
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***