/raid1/www/Hosts/bankrupt/TCR_Public/201113.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, November 13, 2020, Vol. 24, No. 317
Headlines
15005 NW CORNELL: Teherani-Ami Says Plan Still Unconfirmable
15005 NW: Logan Says Dinihanian Self-Dealing, Opposes Plan
344 SOUTH STREET: To Present Plan for Confirmation Dec. 16
344 SOUTH STREET: Unsecureds to Recover 25% in Plan
5 STONE PRODUCTS: Seeks 60-Day Plan Exclusivity Extension
950 MEAT & GROCERY: Seeks Plan Exclusivity Extension Thru Dec. 23
AAC HOLDINGS: Court Extends Plan Exclusivity Until Dec. 17
ACER THERAPEUTICS: Incurs $5.93 Million Net Loss in Third Quarter
ADVANCED MEDIA: Unsecureds to Recover 100% in Plan
ADVISOR GROUP: Fitch Affirms B- IDR & Rates $244MM Unsec Notes CCC
AMC ENTERTAINMENT: Shelton McNally Acquires Shattered Movie Theater
AMERICORE: Court OKs Sale of St. Alexius to Klein/Alholm Group
AMERIDIAN INDUSTRIES: U.S. Trustee Unable to Appoint Committee
ARCHDIOCESE OF NEW ORLEANS: Appointment of Separate Panel Sought
AREU STUDIOS: Files for Chapter 11 Bankruptcy Protection
ASC INSULATION: Unsecureds to Be Paid 10% of Claims in 6-Year Plan
ASCENA RETAIL: Bluestar Buys Justice Brand for $90 Million
ASTOR EB-5 LLC: Asks Court to Extend Plan Exclusivity Thru Jan. 21
AVINGER INC: Posts $5.5 Million Net Loss in Third Quarter
AVISON YOUNG: Moody's Affirms B2 CFR; Alters Outlook to Stable
BASIC ENERGY: Moody's Cuts CFR to Caa3, Alters Outlook to Negative
BENCHMARK ELECTRONIC: Egan-Jones Lowers Unsec. Debt Ratings to BB
BERTONI GELATO: Unsecureds to Get Surplus From Sale Proceeds
BLACKWATER TECHNOLOGIES: Case Summary & 20 Top Unsecured Creditors
BREW CREW: Stone Bank Questions Plan's Feasibility
BREW CREW: US Trustee Unable to Determine Adequacy of Disclosures
BRIGHTHOUSE FINANCIAL: Fitch Assigns BB+ Rating on Preferred Stock
BRIGHTHOUSE FINANCIAL: Moody's Rates $300MM Pref. Stock 'Ba2(hyb)'
BRUNSWICK CORP: Egan-Jones Hikes Sr. Unsec. Debt Ratings to BB+
CAPE QUARRY: Quarry Aggregates Objects to the Milner Plan
CENTERFIELD MEDIA: S&P Assigns 'B' ICR, Outlook Stable
COMCAR INDUSTRIES: Bluewater Buying Low Value Assets for $9.5K
COMCAR INDUSTRIES: Simpson Buying Low Value Assets for $1K
COMCAR INDUSTRIES: TAC Auctions Buying Low Value Assets for $16K
CONSOL ENERGY: S&P Rates $100MM Unsecured Revenue Bonds 'CCC'
CONTINENTAL RESOURCES: S&P Rates New $1BB Unsecured Notes 'BB+'
CONTURA ENERGY: Incurs $68.6 Million Net Loss in Third Quarter
CORNERSTONE PAVERS: Wants Plan Exclusivity Extended Thru Jan. 29
COSI INC: Court Extends Plan Exclusivity Thru December 21
CP ATLAS: Moody's Assigns 'B3' CFR & Rates First Lien Loans 'B2'
CRED INC: Opens Chapter 11 With Issuance of Creditor Notices
DENNY'S CORP: Egan-Jones Cuts Sr. Unsec. Debt Ratings to B
DESTINY SPRINGS: Court Confirms Reorganization Plan
DIVERSEY: Moody's Affirms B3 CFR; Alters Outlook to Stable
ECTOR COUNTY HOSPITAL: Fitch Withdraws BB Issuer Default Rating
ENGUITY TECHNOLOGY: Court Confims Chapter 11 Plan
EQM MIDSTREAM: S&P Affirms 'BB-' ICR; Outlook Stable
EVOKE PHARMA: Incurs $2.1 Million Net Loss in Third Quarter
EXIDE HOLDINGS: Plan Exclusivity Extended Thru January 2021
FITZ LAW GROUP: Unsecured Creditors to be Paid in Full Over 5 Years
GARRETT MOTION: Honeywell Raises Stake to 2.42-Mil. Shares
GENCANNA GLOBAL: Wins Confirmation of Amended Liquidation Plan
GLOSTATION USA: To Seek Plan Confirmation on Nov. 24
GLOSTATION USA: Unsecureds to Split $100K From Debtor's Parent
GOOD DEED: Seeks to Hire Jones & Walden as Legal Counsel
GORHAM PAPER: U.S. Trustee Appoints Creditors' Committee
GRAVITY HOLDINGS: Case Summary & 2 Unsecured Creditors
GREER FARMS: Seeks to Hire Yerkes & Michels as Accountant
GTT COMMUNICATIONS: Delays Filing of Third Quarter Form 10-Q
GUNSMOKE LLC: Seeks January 18 Plan Exclusivity Extension
HAWKEYE ENTERTAINMENT: Wins Feb. 2021 Plan Exclusivity Extension
HERTZ CORP: Wins March 2021 Plan Exclusivity Extension
HESS CORP: Egan-Jones Lowers Sr. Unsec. Debt Ratings to B+
HIGHPOINT OPERATING: Moody's Downgrades CFR to Ca, Outlook Neg.
HILLMAN COS: S&P Alters Outlook to Stable, Affirms 'B-' ICR
HILLMAN COS: S&P Alters Outlook to Stable, Affirms 'B-' ICR
HOLLINGSWORTH FARMS: Administrator Unable to Appoint Committee
HOLLYWOOD FOR CHILDREN: Seeks to Hire Bencivenga Ward as Accountant
IDEANOMICS INC: Incurs $8.7 Million Net Loss in Third Quarter
INSPIREMD INC: Incurs $2.2 Million Net Loss in Third Quarter
INVESTVIEW INC: Incurs $1.2 Million Net Loss in Second Quarter
IVANTI SOFTWARE: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
IVANTI SOFTWARE: Moody's Affirms B3 CFR, Outlook Stable
JC STRENGTH: Case Summary & 8 Unsecured Creditors
JOHN ADAMS ACADEMIES: S&P Affirms 'BB' Charter Revenue Bond Rating
JW TRUCKING: Seeks to Hire Marc Garcia & Associates as Accountant
KING STREET: Gets Initial Order Under CCAA; MNP as Monitor
KRISJENN RANCH: Seeks Plan Exclusivity Extension Thru Feb. 11
LAKELAND TOURS: Joint Prepackaged Plan Confirmed by Judge
LAKES EDGE: Taps Hatfield Mountcastle as Real Estate Counsel
LAMPKINS PATTERSON: Court Approves Disclosures and Confirms Plan
LIZZA EQUIPMENT: Court Confirms Liquidating Plan
LKQ CORP: Egan-Jones Hikes Sr. Unsecured Debt Ratings to BB-
MAD RIVER: Seeks to Hire Paul A. Beck as Bankruptcy Counsel
MALLINCKRODT PLC: Cole, Akin Gump Represent Opioid Claimants
MALLINCKRODT PLC: Future Claimants' Rep Hires Special Counsel
MALLINCKRODT PLC: Future Claimants' Rep Taps Investment Banker
MALLINCKRODT PLC: Future Claimants' Rep Taps NERA as Consultant
MALLINCKRODT PLC: Future Claimants' Representative Hires a Counsel
MALLINCKRODT PLC: Future Claimants' Representative Taps a Counsel
MALLINCKRODT PLC: Seeks Approval to Hire Administrative Advisor
MALLINCKRODT PLC: Seeks to Hire AlixPartners as Financial Advisor
MALLINCKRODT PLC: Seeks to Hire Guggenheim as Investment Banker
MALLINCKRODT PLC: Seeks to Hire Katten Muchin Rosenman as Counsel
MALLINCKRODT PLC: Seeks to Hire Ropes & Gray as Litigation Counsel
MANZANA CAPITAL: Seeks to Hire Daniel Masters as Bankruptcy Counsel
MARLEY STATION MALL: Foreclosure Auction Hit by Chapter 7 Filing
MARRONE BIO: Incurs $6.06 Million Net Loss in Third Quarter
MATTRESS FIRM: Moody's Assigns B2 CFR, Outlook Stable
MATTRESS FIRM: S&P Assigns B+ Issuer Credit Rating, Outlook Stable
MAVIS TIRE: Moody's Affirms B3 CFR & Rates New Upsized Term Loan B2
MAVIS TIRE: S&P Alters Outlook to Stable, Affirms 'B-' ICR
MECHANICAL TECHNOLOGIES: Plan Exclusivity Extended to March 31
MEDICAL SIMULATION: Moves Disclosures Hearing Amid Objections
MEGNA REAL: Seeks Approval to Hire Real Estate Appraiser
MICRO HOLDING: S&P Affirms 'B' Issuer Credit Rating
N & G PROPERTIES: Seeks Plan Exclusivity Extension Thru Jan. 21
NATIONAL MEDICAL: Wins April 8 Plan Exclusivity Extension
NEFFGEN FAMILY: CBL Says Plan Should Pay Admin. Claim in Full
NEFFGEN FAMILY: Southern Development Says Plan Violates Sec 1129(a)
NEFFGEN FAMILY: U.S. Trustee Says Plan Not Feasible
NESCO HOLDINGS: Posts $15.2 Million Net Income in Third Quarter
NETWORKBUILDER LLC: Secured Creditor Says Disclosures Inadequate
NEW FRONTIERS PUBLIC SCHOOLS: S&P Cuts Revenue Bond Rating to 'BB'
NOFALIA INC: Trudy's Southwest Austin Location Sold to Uchi Owner
NPC INT'L: Flynn Restaurant Has $816 Million Stalking Horse Bid
NPC INTERNATIONAL: Jackson, Gibson 2nd Update of Priority/1L Group
ORCA INVESTMENTS: Taps McGovern Newhall as Real Estate Broker
PARK AVENUE: Seeks to Hire Bederson LLP as Testifying Expert
PAUL SMITH: Unsecureds Will Get 5 Cents on the Dollar in Plan
PBF HOLDING: Fitch Downgrades LT IDR to B+, Outlook Negative
PBF LOGISTICS: Fitch Downgrades LT IDR to B+, Outlook Negative
PEABODY ENERGY: S&P Cuts ICR to 'CCC-'; Ratings on Watch Negative
PHIO PHARMACEUTICALS: Incurs $2.31 Million Net Loss in Third Quarte
PHOENIX PRODUCTS: CTB Says Plan Not Confirmable
PHOENIX PRODUCTS: Unsecureds to Get Escrow, Profit Share Until 2025
PHOENIX PRODUCTS: US Trustee Questions Plan's Feasibility
POTTERS BORROWER: Moody's Assigns B2 CFR, Outlook Stable
PRINTEX INC: Bank Wants Meaningful Analysis Under Sec. 1125 in Plan
PRINTEX INC: F&M Asks for Modified Plan to Account for Arrearrages
PRIORITY HOLDINGS: S&P Alters Outlook to Stable, Affirms CCC+ ICR
PROTEUS DIGITAL: Unsecureds to Have 28% to 40% Recovery in Plan
PROVIDENCE MANAGEMENT: Case Summary & 20 Top Unsecured Creditors
QUALITY WELDING: Unsecured Creditors to Recoup 60% Under Plan
REJUVI LABORATORY: Unsecureds Will be Paid in Full Under Plan
REMORA PETROLEUM: Unsecureds Recover 1.7% in Debt-for-Equity Plan
ROBERTS PROPERTY: SBA's Unsecured Claim Won't Get Any Payment
ROLTA INTERNATIONAL: Seeks to Hire Maples Law as Legal Counsel
ROMANS HOUSE: Seeks to Hire WesternCare as Restructuring Advisor
RWDT FOODS: Files 3-Year Plan; Considers Going Concern Sale
RYDER SYSTEM: Egan-Jones Lowers FC Senior Unsecured Rating to BB-
SANTA CLARITA: Voluntary Chapter 11 Case Summary
SERVICE CORP: Egan-Jones Hikes Sr. Unsecured Debt Ratings to BB+
SIWF HOLDINGS: Moody's Affirms B3 CFR & Alters Outlook to Positive
SIZZLER USA: Seeks to Hire Sheppard Mullin as Bankruptcy Counsel
SNC-LAVALIN GROUP: DBRS Cuts Issuer Rating to BB(high), Trend Neg.
SPINEGUARD INC: Plan Exclusivity Extended Until December 15
ST. LAZARUS FAMILY: Dec. 14 Plan Hearing on 100% Plan Set
ST. LAZARUS FAMILY: Unsecureds to Be Paid in Full Over Time
STEREOTAXIS INC: Incurs $1.57 Million Net Loss in Third Quarter
STREET LEVEL: Seeks to Hire Archer & Greiner as Legal Counsel
STUDIO MOVIE GRILL: Landlords Seek Rent Break Limit
STUDIO MOVIE: Seeks to Hire CR3 Partners, Appoint CRO
STUDIO MOVIE: Seeks to Hire Donlin Recano as Administrative Agent
STUDIO MOVIE: Seeks to Hire Frank J. Wright as Legal Counsel
STUDIO MOVIE: Seeks to Hire Keen Summit as Real Estate Advisor
STUDIO MOVIE: Seeks to Hire Ordinary Course Professionals
SUPPERTIME INC: Court Confirms Reorganization Plan
SUPPERTIME INC: Unsecureds Owed $1.02M to Get $15K in 5 Years
SYNCHRONOSS TECHNOLOGIES: Incurs $15.4-Mil. Net Loss in 3rd Quarter
TEMERITY TRUST: Agrees Disclosures Not Yet Ready for Approval
TEXAS STUDENT HOUSING: S&P Lowers 2001A Bond Rating to 'CCC'
TRONOX LIMITED: Egan-Jones Hikes Sr. Unsec. Debt Ratings to CCC
TUPPERWARE BRANDS: Egan-Jones Hikes Sr. Unsecured Debt Ratings to B
UNITED EQUITABLE: A.M. Best Affirms C++ Financial Strength Rating
UNLOCKD MEDIA: Plan Exclusivity Extended Thru December 18
URBAN ONE: Reports $12.8-Mil. Consolidated Net Loss for 3rd Quarter
WAGLER MANUFACTURING: Taps Culver & Garrity as Financial Accountant
WESTON INSURANCE: A.M. Best Affirms B(Fair) Fin. Strength Rating
[*] Albany's Bankruptcies Decrease During Pandemic
[*] What Lenders Should Know When Borrowers File Chapter 11
[^] BOOK REVIEW: Oil Business in Latin America: The Early Years
*********
15005 NW CORNELL: Teherani-Ami Says Plan Still Unconfirmable
------------------------------------------------------------
Tasha Teherani-Ami ("Ms. Teherani-Ami"), in her capacity as the
trustee of the Sonja Dinihanian GST Trust DTS 1/1/11 (the "Trust"),
objects to the First Amended Joint Disclosure Statement of 15005 NW
Cornell LLC and Vahan M. Dinihanian, Jr.
Ms. Teherani-Ami claims that the Liquidation Analysis is not
accurate. It does not reflect that the Trust owns or has an
equitable interest in 1/4 of the Cornell Property, and thus 15005
LLC only owns 1/4 of the Farm and not 1/2.
Ms. Teherani-Ami points out that approval of the Disclosure
Statement, and certainly fixing a date to consider any plan, should
be continued until the adversary proceedings filed by the Trust,
case no. 20-03077-dwh, and by 15005 LLC (case no. 20-03079-dwh) are
resolved.
Ms. Teherani-Ami asserts that the Disclosure Statement should be
rejected because it reveals a plan that is not confirmable because
the Trust has at least an equitable interest in, if not title to,
an undivided 1/4 interest in the Farm.
Ms. Teherani-Ami further asserts that the Disclosure Statement
states that Mr. Dinihanian is and will continue to be the manager
of 15005 LLC, but the Debtors do not disclose how that can happen
because they do not provide in their plan that they will and can
assume their respective ends of the executory contract by which Mr.
Dinihanian has served as the manager of 15005 LLC.
Ms. Teherani-Ami states that the Operating Agreement provides that
if Mr. Dinihanian cannot serve as the manager, Ms. Teherani-Ami,
steps in. Thus, the Disclosure Statement offered by Mr. Dinihanian
should be rejected because he cannot confirm a plan that provides
for him to continue to serve as the manager of 15005 LLC.
A full-text copy of Teherani-Ami's objection to the First Amended
Joint Disclosure Statement dated October 22, 2020, is available at
https://tinyurl.com/y5uekgd6 from PacerMonitor at no charge.
Attorneys for Tasha Teherani-Ami:
WYSE KADISH LLP
Bruce H. Orr, OSB No. 813297
Telephone: (503) 228-8448
Facsimile: (503) 273-9135
E-mail: bho@wysekadish.com
About 15005 NW Cornell
15005 NW Cornell LLC and its owner Vahan Megar Dinihanian, Jr.,
sought Chapter 11 protection (Bankr. D. Ore. Case Nos. 19-31883 and
19-31886) on May 21, 2019.
Vahan Megar Dinihanian Jr. is an individual who owns and operates
multiple business entities, including several entities that own and
lease commercial real estate, a floral products business, and
entities that provide engineering and consulting services.
Dinihanian's principal business is operating Eagle Holdings, LLC,
which owns other real estate-centered entities.
NW Cornell's primary asset is its 50 percent tenant-in-common
ownership interest is 37 acres of undeveloped real property located
at 15005 NW Cornell Road, Beaverton, Oregon. 15005 NW Cornell LLC,
based in Beaverton, OR, was estimated to have $10 million to $50
million in assets and $1 million to $10 million in liabilities as
of the bankruptcy filing.
The Hon. Trish M. Brown oversees the cases.
15005 NW Cornell tapped Douglas Pahl, a partner of Perkins Coie
LLP, as bankruptcy counsel. Motschenbacher & Blattner LLP is
Dinihanian's general bankruptcy counsel.
15005 NW: Logan Says Dinihanian Self-Dealing, Opposes Plan
----------------------------------------------------------
Creditor Lillian Logan and interested parties Cornell Rd LLC,
Christiana LLC, and Alexander LLC (collectively the "Logan
Parties") filed a continued objection to aid the court in analyzing
the 15005 NW Cornell LLC and Vahan M. Dinihanian, Jr.'s Disclosure
Statement.
Logan Parties point out that:
* Dinihanian's inability to properly account for funds received
post-petition, fully disclose post-petition activities, and follow
this Court's orders make it clear that the proposed disclosure
statement is lacking critical information regarding Dinihanian's
spending habits, post-petition activities, use of estate assets,
and future plans for any funds received from the plan.
* In July 2019, without court approval, Dinihanian sought to
obtain loans from an unknown third party.
* What is made clear by the Dinihanian's liquidation analysis,
Exhibit I-A, is that Dinihanian has been engaging in self-dealing
and has syphoned more than a million dollar out of the bankruptcy
estate without court approval, disclosure, or explanation.
* The personal financial statement shows that the Dinihanian had
funds on deposit in the amount of $140,000.
* As the debtors have made no payments to Dinihanian's creditors
during the bankruptcy, the disclosure statement must explain how,
why, and when, the debtors incurred these obligations.
Attorneys for Lillian Logan, Cornell Rd LLC,
Christiana LLC, and Alexander LLC:
Russell D. Garrett
Daniel L. Steinberg
JORDAN RAMIS PC
Two Centerpointe Dr., 6th Floor
Lake Oswego, Oregon 97035
Telephone: (503) 598-7070
Facsimile: (503) 598-7373
E-mail: russell.garrett@jordanramis.com
daniel.steinberg@jordanramis.com
About 15005 NW Cornell
15005 NW Cornell LLC and its owner Vahan Megar Dinihanian, Jr.,
sought Chapter 11 protection (Bankr. D. Ore. Case Nos. 19-31883 and
19-31886) on May 21, 2019.
Vahan Megar Dinihanian Jr. is an individual who owns and operates
multiple business entities, including several entities that own and
lease commercial real estate, a floral products business, and
entities that provide engineering and consulting services.
Dinihanian's principal business is operating Eagle Holdings, LLC,
which owns other real estate-centered entities.
NW Cornell's primary asset is its 50 percent tenant-in-common
ownership interest is 37 acres of undeveloped real property located
at 15005 NW Cornell Road, Beaverton, Oregon. 15005 NW Cornell LLC,
based in Beaverton, OR, was estimated to have $10 million to $50
million in assets and $1 million to $10 million in liabilities as
of the bankruptcy filing.
The Hon. Trish M. Brown oversees the cases.
15005 NW Cornell tapped Douglas Pahl, a partner of Perkins Coie
LLP, as bankruptcy counsel. Motschenbacher & Blattner LLP is
Dinihanian's general bankruptcy counsel.
344 SOUTH STREET: To Present Plan for Confirmation Dec. 16
----------------------------------------------------------
344 South Street Corporation has won approval of its Disclosure
Statement and is now slated to seek confirmation of its 8th Amended
Plan of Reorganization on Dec. 16, 2020.
Ballots are due Dec. 9, 2020 at 5:00 p.m. Objections to
confirmation of the Plan are due Dec. 14, 2020.
Dec. 16, 2020 at 11:00 a.m. is fixed as the date and time for
hearing on confirmation of the Plan, to be held at the U.S.
Bankruptcy Court, Courtroom No. 1, 900 Market Street, Philadelphia,
Pennsylvania.
About 344 South Street
344 South Street Corp. has operated as a restaurant, serving
Spanish and Mexican cuisine in Philadelphia's South Street
District.
344 South Street Corp. sought protection under Chapter 11 of the
Bankruptcy Court (Bankr. E.D. Penn. Case No. 15-18278) on Nov. 17,
2015, and is represented by Raheem S. Watson, Esq., at Watson LLC,
in Philadelphia, Pennsylvania. At the time of the filing, the
Debtor was estimated assets and liabilities below $500,000.
344 SOUTH STREET: Unsecureds to Recover 25% in Plan
---------------------------------------------------
344 South Street Corporation filed various iterations of its
proposed plan of reorganization, the latest of which was the Eight
Amended Plan of Reorganization filed Oct. 2, 2020.
Creditors shall be treated as follows:
Class 5 General Unsecured Claims: Gold Medal Enviormental, Section
5(A)and City of Philadelphia, Section 5(B) are impaired:
A. Gold Medal Enviormental filed Claim 5-1, it is an unsecured
claim for $13,105. This claim will be paid at 25% of the amount of
the claim, $3,276.33 in two equal installments. The first payment
will be in the 7th month following the Effective Date of the Plan
and the second payment will be made in the 12th month following the
Effective Date of the Plan.
B. City of Philadelphia filed Claim 4-1, it has a general
unsecured claim for $33,810. This claim will be paid at 25% of the
amount of the claim, $8,453.00 in two equal installments. The first
payment will be in the 7th month following the Effective Date of
the Plan and the second payment will be made in the 12th month
following the Effective Date of the Plan.
All existing ownership interest, by the three individual
shareholders totaling 100%, will be retained. The Plan provides
for a cash investment of $25,000 by shareholder Nicholas Ventura.
The ownership of shares changes as a result of this cash infusion.
Nicholas Ventura receives an additional 10% ownership interest,
his ownership interest will be 50% at the effective date of the
Plan. William Curry's current ownership decreases by 10%, his
ownership in will be 40% at the Effective Date of the Plan
The Shareholders have consented to this redistribution of ownership
interests. This class will not receive a distribution under the
plan.
The Debtor's Plan shall be funded by business operations.
A copy of the 8th Amended Plan of Reorganization filed Oct. 2,
2020, is available at:
https://www.pacermonitor.com/view/YHYD6FI/344_South_Street_Corporation__paebke-19-12381__0143.0.pdf
Attorney for the Debtor and
Debtor in Possession:
Michael P. Kutzer
Attorney at Law
1420 Walnut Street, Suite 1216
Philadelphia, PA 19102
About 344 South Street
344 South Street Corp. has operated as a restaurant, serving
Spanish and Mexican cuisine in Philadelphia's South Street
District.
344 South Street Corp. sought protection under Chapter 11 of the
Bankruptcy Court (Bankr. E.D. Penn. Case No. 15-18278) on Nov. 17,
2015, and is represented by Raheem S. Watson, Esq., at Watson LLC,
in Philadelphia, Pennsylvania. At the time of the filing, the
Debtor was estimated assets and liabilities below $500,000.
5 STONE PRODUCTS: Seeks 60-Day Plan Exclusivity Extension
---------------------------------------------------------
5 Stone Products, LLC, requests the U.S. Bankruptcy Court for the
Middle District of Alabama, Eastern Division, to extend the
exclusive periods during which the Debtor may file a Chapter 11
plan and disclosure statement and solicit acceptances for the plan
by 60 days.
For the first five months since filing this case, the Debtor had a
difficult time keeping its monthly operating expenses within its
monthly income. Some of this was due to the costs of broken-down
equipment and repairs, and some were due to COVID-19 and these
uncertain economic times.
However, during July and August, the Debtor had a positive cash
flow and now has over $50,000.00 in its bank accounts. The monthly
reports for June, July, and August show the Debtor's business as
continuing to grow. Preliminary figures for the month of September
show the Debtor will have a similarly positive cash flow in that
month too. Meanwhile, the Debtor is presently paying its debts as
they become due and is also making adequate protection payments to
secured creditors.
5 Stone Products said allowing the Debtor additional time to file
another monthly operating report or two to better confirm its
increasing cash flow before it has to propose a Chapter 11 plan
would be in the best interests of the Debtor, the creditors, and
the court.
So, on October 2, 2020, the Debtor's attorney requests another 60
days to gather the adequate information needed to file a disclosure
statement and propose a plan.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/2JBc4It at no extra charge.
About 5 Stone Products
5 Stone Products, LLC, is a privately held company engaged in
nonmetallic mineral mining and quarrying.
5 Stone Products sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Ala. Case No. 20-80143) on Jan. 29,
2020. At the time of the filing, the Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range.
Judge William R. Sawyer oversees the case. Ralph K. Strawn, Jr.,
Esq., at Strawn & Robertson, LLC, is the Debtor's legal counsel.
950 MEAT & GROCERY: Seeks Plan Exclusivity Extension Thru Dec. 23
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950 Meat & Grocery Inc., requests the U.S. Bankruptcy Court for the
Southern District of New York to extend the exclusive periods for
filing a Chapter 11 plan through and including December 23, 2020,
and to solicit acceptances through and including February 21,
2021.
The Debtor leases the Premises, its place of business, under a
sublease effective as of July 20, 2012, with GLC Market Street LLC
("GLC") as sublandlord. The Debtor commenced its Chapter 11 case in
order to preserve and protect its leasehold interest (the
"Sublease") which was the subject of an eviction proceeding in the
Passaic County Superior Court. Without its Sublease, the Debtor
would be unable to continue to operate its business at its Premises
and to otherwise maintain, protect, and preserve its property. The
Sublease is also necessary for the Debtor's reorganization.
But GLC initiated a landlord/tenant action against the Debtor in
the Superior Court of New Jersey, Passaic County under Docket No.
PAS-L-1701-18 (the "NJ Action"), alleging that the Debtor has
committed several different defaults under the Sublease. The Debtor
disputes and refutes each of GLC's alleged defaults, and the issue
of whether the Sublease is in effect and/or whether there were
defaults which may be cured with monetary payments, is being
heavily contested by the Debtor. As the stay has been modified to
allow the NJ Action to proceed, the parties are awaiting a trial
date from the said Court. A Sale Motion was filed by the Debtor on
August 31, 2020, and was scheduled on September 24. These issues
must be determined prior to the Debtor being able to confirm a plan
of reorganization.
A copy of the Debtor's Motion to Extend is available from
PacerMonitor.com at https://bit.ly/2GJjWGJ at no extra charge.
About 950 Meat & Grocery
950 Meat & Grocery Inc. operates a retail supermarket business at
its place of business located at 946-956 Market Street, Patterson,
New Jersey 07513-1131.
950 Meat & Grocery Inc., based in Paterson, N.J., filed a Chapter
11 petition (Bankr. S.D.N.Y. Case No. 20-10616) on Feb. 27, 2020.
In the petition signed by Kent Tavera, president, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities.
The Honorable Stuart M. Bernstein oversees the case. Clifford A.
Katz, Esq., at Platzer Swergold Levine Goldberg Katz & Jaslow, LLP,
serves as bankruptcy counsel to the Debtor.
AAC HOLDINGS: Court Extends Plan Exclusivity Until Dec. 17
----------------------------------------------------------
At the behest of AAC Holdings, Inc. and its affiliates, Judge John
T. Dorsey extended the periods within which the Debtors have the
exclusive right to file a plan of reorganization through and
including December 17, 2020, and to solicit acceptances of the plan
through and including February 15, 2021.
The Debtors said these factors warrant the extension of the
Exclusive Periods:
(i) since the Debtors' Chapter 11 cases are large and complex,
extra time is required to complete the proposed restructuring as
provided for in the Amended Plan;
(ii) the Debtors' substantial progress in working with their
stakeholders and pursuing the Amended Plan supports the extension
of the Exclusive Periods. And if the Amended Plan is not confirmed
at the Confirmation Hearing, the Debtors will need to resume
negotiations with their creditor constituents which need more time
to deal with;
(iii) the Debtors are not seeking to extend the Exclusive
Periods to pressure creditors to agree to the Debtors'
reorganization demands;
(iv) the Debtors are paying their bills in the ordinary course
of business as they become due and will continue to do so during
the pendency of these Chapter 11 Cases; and
(v) the Debtors commenced these Chapter 11 Cases approximately
three months ago.
Although the time that has elapsed is short, the Debtors have
nevertheless made substantial progress and continue to work with
all creditor constituencies towards a reorganization for the
benefit of all stakeholders.
In accordance with the Bid Procedures Order, the Debtors conducted
a marketing process for the sale of their assets or for sponsorship
for a plan of reorganization, which required the Debtors'
management and employees to regularly engage with their
professionals, stakeholders, and other interested parties.
As contemplated by the Bid Procedures Order, on September 16, 2020,
the Requisite Consenting Lenders delivered a notice to the Debtors
informing them that they should proceed with a Restructuring
Transaction. Accordingly, on September 17, the Debtors filed the
Notice of Debtors' Election to proceed with the Restructuring
Transaction Pursuant to the Amended Joint Chapter 11 Plan Of AAC
Holdings, Inc. and its Debtor Affiliates.
* * *
On October 20, 2020, the Court held a hearing to consider
confirmation of the Plan and subsequently entered an Order
Confirming Second Amended Joint Chapter 11 Plan of AAC Holdings,
Inc. and its Debtor Affiliates, thereby confirming the Plan.
The Debtors are slated to seek court approval at a November 23
hearing of transactions that they deem integral and necessary to
implement the confirmed Second Amended Joint Plan.
A copy of the Debtor's Motion to extend is available from
donlinrecano.com at https://bit.ly/34A7baS at no extra charge.
A copy of the Court's Extension Order is available from
donlinrecano.com at https://bit.ly/35C5717 at no extra charge.
About AAC Holdings
AAC Holdings, Inc., owns American Addiction Centers, substance
abuse treatment facilities for individuals with drug and alcohol
addiction in the United States. AAC provides inpatient and
outpatient substance use treatment services for individuals with
drug addiction, alcohol addiction, and co-occurring mental or
behavioral health issues.
AAC Holdings and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11648) on
June 20, 2020. The Debtors disclosed that they had $449.35 million
in assets and $517.40 million in liabilities as of Feb. 29, 2020.
Judge John T. Dorsey oversees the cases. The Debtors tapped
Greenberg Traurig, LLP as their bankruptcy counsel, Chipman Brown
Cicero & Cole, LLP as conflicts counsel, and Cantor Fitzgerald as
an investment banker. Donlin, Recano & Company, Inc. is the
Debtors' notice, claims, and balloting agent and administrative
advisor.
The U.S. Trustee for Regions 3 and 9 appointed a committee of
unsecured creditors. The committee is represented by Cole Schotz
P.C.
ACER THERAPEUTICS: Incurs $5.93 Million Net Loss in Third Quarter
-----------------------------------------------------------------
Acer Therapeutics Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $5.93 million for the three months ended Sept. 30, 2020,
compared to a net loss of $5.25 million for the three months ended
Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $16.65 million compared to a net loss of $24.26 million
for the nine months ended Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $15.37 million in total
assets, $4.86 million in total liabilities, and $10.50 million in
total stockholders' equity.
"This quarter, we continued to make important progress in the
advancement of our four programs," said Chris Schelling, CEO and
Founder of Acer. "We received valuable feedback from the FDA
regarding our regulatory strategy for ACER-001 for urea cycle
disorders patients, and assuming all our development activities
stay on track, we anticipate having a pre-NDA meeting in the
mid-first half of 2021. Regarding our emetine program, several in
vivo studies are currently being conducted to evaluate the drug's
safety and its specific activity against SARS-CoV-2 in the Syrian
Golden hamster and ferret models. Coupled with the drug's in vitro
data and emetine's long history of use in humans for other
indications, we should have a good understanding of this
candidate's potential as a therapeutic against COVID-19 relatively
soon."
Cash and cash equivalents were $6.2 million as of Sept. 30, 2020,
compared to $12.1 million as of Dec. 31, 2019. Acer believes its
cash position at the end of the third quarter, combined with an
additional $1.0 million of proceeds subsequently received through
Oct. 26, 2020 from the sales of common stock under its ATM facility
and through its purchase agreement with Lincoln Park Capital, will
be sufficient to fund its current operations into the first quarter
of 2021, excluding support for the planned emetine Phase 2/3
clinical trial, which is also subject to ongoing discussions with
the FDA.
Research and development expenses were $3.2 million for the three
months ended Sept. 30, 2020, compared to $2.8 million for the three
months ended Sept. 30, 2019. This increase of $0.4 million was
primarily due to an increase in expenses for contract research
related to preclinical studies, partially offset by decreases in
regulatory consulting and contract manufacturing expenses.
Research and development expenses for the three months ended Sept.
30, 2020 were primarily comprised of $1.8 million related to
emetine, $1.1 million related to ACER-001, and $0.3 million related
to osanetant.
General and administrative expenses were $2.7 million for the three
months ended Sept. 30, 2020, compared to $2.5 million for the three
months ended Sept. 30, 2019. This increase of $0.2 million was
primarily due to an increase in expenses for consulting and
professional services, partially offset by decreases in expenses
related to travel and information technology.
Going Concern
The Company has not established a source of revenues and, as such,
has been dependent on funding operations through the sale of equity
securities. Since inception, the Company has experienced
significant losses and incurred negative cash flows from
operations. The Company has an accumulated deficit of $92.9 million
as of
Sept. 30, 2020 and expects to incur further losses over the next
several years as it develops its business. The Company has spent,
and expects to continue to spend, a substantial amount of funds in
connection with implementing its business strategy, including its
planned product development efforts and potential precommercial
activities.
As of Sept. 30, 2020, the Company had cash and cash equivalents of
$6.2 million and current liabilities of $4.5 million. The
Company's cash and cash equivalents available at Sept. 30, 2020,
combined with the funds raised subsequent to Sept. 30, 2020 via the
ATM and equity line, are expected to fund operations into the first
quarter of 2021, excluding support for a planned emetine Phase 2/3
clinical trial, which is also subject to ongoing discussions with
the FDA.
The Company will need to raise additional capital to fund continued
operations in 2021.
Acer stated, "The Company may not be successful in its efforts to
raise additional funds or achieve profitable operations. The
Company continues to explore potential opportunities and
alternatives to obtain the additional resources that will be
necessary to support its ongoing operations through and beyond the
next 12 months, including raising additional capital through either
private or public equity or debt financing or non-dilutive funding,
as well as using its ATM facility and/or its $15.0 million equity
line facility entered into on April 30, 2020 with Lincoln Park,
which is subject to certain limitations and conditions. The
Company has no commitments for any additional financing, except for
the agreement with Lincoln Park. Any amounts raised will be used
for further development of its product candidates, precommercial
activities, potential acquisitions of additional product
candidates, and for other working capital purposes.
"If the Company is unable to obtain additional funding to support
its current or proposed activities and operations, it may not be
able to continue its operations as proposed, which may require it
to suspend or terminate any ongoing development activities, modify
its business plan, curtail various aspects of its operations, cease
operations, or seek relief under applicable bankruptcy laws. In
such event, the Company's stockholders may lose a substantial
portion or even all of their investment.
"These factors individually and collectively raise substantial
doubt about the Company's ability to continue as a going concern
for twelve months from the date these financial statements are
available, or Nov. 10, 2020.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1069308/000156459020052987/acer-10q_20200930.htm
Acer Therapeutics
Acer -- http://www.acertx.com/-- is a pharmaceutical company
focused on the acquisition, development and commercialization of
therapies for serious rare and life-threatening diseases with
significant unmet medical needs. Acer's pipeline includes four
clinical-stage candidates: emetine hydrochloride for the treatment
of patients with COVID-19; EDSIVO (celiprolol) for the treatment
of
vascular Ehlers-Danlos syndrome (vEDS) in patients with a confirmed
type III collagen (COL3A1) mutation; ACER-001 (a taste-masked,
immediate release formulation of sodium phenylbutyrate) for the
treatment of various inborn errors of metabolism, including urea
cycle disorders (UCDs) and Maple Syrup Urine Disease (MSUD); and
osanetant for the treatment of induced Vasomotor Symptoms (iVMS)
where Hormone Replacement Therapy (HRT) is likely contraindicated.
Each of Acer's product candidates is believed to present a
comparatively de-risked profile, having one or more of a favorable
safety profile, clinical proof-of-concept data, mechanistic
differentiation and/or accelerated paths for development through
specific programs and procedures established by the FDA.
Acer reported a net loss of $29.42 million for the year ended Dec.
31, 2019, compared to a net loss of $21.28 million for the year
ended Dec. 31, 2018. As of March 31, 2020, the Company had $16.14
million in total assets, $2.05 million in total liabilities, and
$14.09 million in total stockholders' equity.
BDO USA, LLP, in Boston, Massachusetts, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
March 18, 2020, citing that the Company has recurring losses and
negative cash flows from operations that raise substantial doubt
about the Company's ability to continue as a going concern.
ADVANCED MEDIA: Unsecureds to Recover 100% in Plan
--------------------------------------------------
Advanced Media Networks, LLC submitted a Plan of Reorganization and
a Disclosure Statement.
Holders of Class 4 General Unsecured Claims are projected to
recover 100 percent.
The Debtor says that if its proceeding was a liquidation in Chapter
7, no dividend would be paid to the Debtor's unsecured creditors.
This is because the Debtor's main asset (its judgment against
A-Mark Foundation) is on appeal and has no present value for cash
disbursement purposes. Further, the judgement is subject to the
lien of the Harold J. Light Law Offices.
In addition, the Debotr is proceeding with the appellate litigation
to reverse a U.S. Patent and Trademark Appeals Board C ruling of
invalidity of the Debtor's mobile telecomputer network Patent No.
6,445,777. While no present value for cash disbursements exists
regarding the patent, monetary recovery from a validated patent may
bring monies in to the Chapter 11 estate "down the line" to pay
creditors. The Debtor has employed the law firm of Meister, Seelig
& Fein, LLP, to prosecute the subject litigation.
The Plan proponent believes it is feasible because, both on the
Effective Date and for the duration of the Plan, the proponent
estimates that Debtor will have sufficient cash to make all
distributions.
A full-text copy of the Disclosure Statement dated September 21,
2020, is available at https://tinyurl.com/y5gvhfmu from
PacerMonitor.com at no charge.
Attorney for Advanced Media Networks, LLC:
Peter T. Steinberg, Esq., SBN 96834
Steinberg, Nutter & Brent, Law Corporation
23801 Calabasas Road, Suite 2031
Calabasas, California 91302
Telephone (818) 876-8535
Telecopier (818) 876-8536
Email: mr.aloha@sbcglobal.net
About Advanced Media Networks
Advanced Media Networks, LLC, provides commercial video
conferencing services and a proprietary mobile telecomputer network
for film and television services.
Advanced Media Networks sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-10846) on May 6,
2019. At the time of the filing, Debtor was estimated to have
assets of between $1 million and $10 million and liabilities of the
same range. Judge Deborah J. Saltzman oversees the case. Steinberg
Nutter & Brent, Law Corporation, is Debtor's legal
counsel.
ADVISOR GROUP: Fitch Affirms B- IDR & Rates $244MM Unsec Notes CCC
------------------------------------------------------------------
Fitch Ratings has affirmed Advisor Group Holdings, Inc.'s Long-term
Issuer Default Rating (IDR) at 'B-', senior secured debt rating at
'B'/'RR3' and senior unsecured debt rating at 'CCC'/'RR6'. The
Rating Outlook remains Negative.
Fitch has also assigned a 'CCC'/'RR6' rating to the $244 million of
senior unsecured notes assumed by Advisor Group from Ladenburg
Thalmann, which was acquired in February 2020. The notes rank pari
passu with Advisor Group's existing unsecured indebtedness.
Additionally, Fitch has assigned a 'B'/'RR3' rating to Advisor
Group's $325 senior secured revolving facility, which ranks equally
with existing secured debt.
KEY RATING DRIVERS
The rating affirmation reflects Advisor Group's improving market
position as one of the largest independent financial advisors in
the U.S.; cash-generative business model; a relatively flexible
cost base, which should help cushion revenue declines in the
current environment; and high advisor retention rates. These points
are counterbalanced against elevated execution risks (integration,
envisioned profitability levels and deleveraging) associated with
the recent acquisition of Ladenburg.
The ratings are constrained by high leverage levels, weak interest
coverage, low margins, and competitive dynamics within the
independent wealth management sector. Additional rating constraints
include the relatively high reliance on transactional revenues and
Advisor Group's private equity ownership, which introduces a degree
of uncertainty over the company's future financial policies and a
potential for more opportunistic growth strategies.
The continuing Negative Outlook reflects Fitch's view that the
challenging economic environment, including lower for longer
interest rates, may prevent Advisor Group from achieving projected
profitability levels over the next 12-18 months, resulting in
higher leverage and weaker interest coverage for an extended
period. The Negative Outlook also reflects uncertainties
surrounding Advisor Group's ability to achieve planned cost
reductions associated with the acquisition of Ladenburg and the
extent to which realized synergies would be sufficient to drive
deleveraging.
Fitch believes Advisor Group's senior management team has an
adequate degree of depth and experience within the wealth
management field. After a period of turnover in several top
management positions in the past three years, Advisor Group's
senior leadership appears to have stabilized with the appointment
of a new CFO in April 2020. The company also made a senior hire for
a position of president, advice and wealth management, a newly
created role overseeing organic growth, including the firm's
consolidated recruiting efforts.
Advisor Group's adjusted EBITDA margin was 11.0% for the trailing
12 months (TTM) ended June 30, 2020. Earnings have come under
increased pressure in the wake of interest rate cuts, leading to
lower net interest income (NII) on cash balances held in sweep
accounts. While the impact of lower for longer interest rates could
be mitigated by the achievement of planned financial synergies from
the Ladenburg acquisition and utilization of other costs savings
opportunities, related to discretionary spending, the realization
of these plans could be subject to execution risks, in Fitch's
view. Net revenue and margin improvement could come from continued
growth of Advisor Group's proprietary advisory platform, which
produce higher net fees, but Fitch expects Advisor Group's adjusted
EBITDA margin will decline, as lower net revenues are only
partially offset by cost reductions. Still, Fitch believes the
company's margin will remain around the lower-end of Fitch's 'bb'
quantitative benchmark range for securities firms with low balance
usage of 10% to 20%.
Advisor Group has reported strong execution to date on targeted
synergies associated with the acquisition of Ladenburg. Cost
synergies are driven primarily by operational staff reductions and
the elimination of organizational redundancies, which are expected
to be realized in phases over the next 12 months. The company has
completed the consolidation of former Ladenburg subsidiaries ahead
of schedule and experienced significantly lower than anticipated
advisor attrition. However, Fitch believes strong retention rates
may have been supported by COVID-19 related asset volatility and
market uncertainty, which could lead to higher attrition rates in
the future.
Advisor Group's asset performance, as reflected in net assets under
administration (AUA) flows, were negative in prior years, despite
the firm's continued investment in recruitment due to mainly
acquisition-related advisor attrition. Still, the firm's
proprietary advisory platform experienced consistent positive
flows, around 2% each quarter, on average, from 1Q18 through 2Q20,
which Fitch views favorably.
Advisor Group's cash flow leverage, as expressed by gross debt to
EBITDA (adjusted for non-cash and non-recurring items) was 6.7x for
the TTM ended June 30, 2020, up from 6.1x at YE19. Fitch believes
that performance headwinds might delay de-leveraging beyond the
Outlook horizon, even if the company executes on cost savings
initiatives, acquisition synergies and organic growth targets.
Failure to reduce and sustain leverage below 6.5x, on Fitch's
basis, could result in negative rating action.
Interest coverage, as calculated by adjusted EBITDA/interest
expense, was 2.0x for the TTM ended June 30, 2020, which is within
Fitch's 'b and below' category benchmark range of below 3.0x for
securities firms with low balance sheet usage. Still, liquidity
risks are partially offset by the relatively long-term maturity
profile of the firm's debt (nearest repayment in 2026) and the cash
generative business model. Advisor Group had cash and net excess
capital of around $488 million at June 30, 2020, including the $114
million drawn on the secured revolving credit facility. The $325
million secured revolver has covenants which restrict utilization
on the revolver to 35%, thus, there is no additional borrowing
capacity. The revolving facility matures in August 2024 and is
priced at LIBOR plus 3.25%.
The senior unsecured notes assumed by Advisor Group following the
acquisition of Ladenburg rank equally in right of payment with all
of Advisor Group's senior unsecured and unsubordinated
indebtedness. The unsecured notes have maturities ranging from 2027
to 2029 and have fixed rates of interest ranging from 6.5% to
7.75%.
The senior secured debt rating is notched up once from the
Long-Term IDR and reflects Fitch's view of above-average recovery
prospects under a stress scenario.
The senior unsecured rating is two notches below the IDR and
reflects structural subordination and poor recovery prospects under
a stress scenario.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade include further deterioration in operating
results, beyond current expectations, that prevent Advisor Group
from making progress toward reducing leverage to 6.5x or below and
interest coverage to at least 2.0x, over the Outlook horizon, will
likely result in a ratings downgrade. Negative rating actions could
also result from an inability to achieve identified cost savings
and envisioned synergies associated with the Ladenburg acquisition;
material declines in advisor and asset retention rates; and/or a
material increase in balance sheet-intensive activities.
Factors that could, individually or collectively, lead to positive
rating action/upgrade including a revision of the Outlook to Stable
from Negative, include an ability to reduce and sustain leverage at
6.5x or below and increase interest coverage above 2.0x. The
successful integration of Ladenburg, as evidenced by strong asset
retention and the achievement of projected cost reductions, while
maintaining a balance-sheet light business model and sound
operating performance, would also be viewed favorably. Longer-term
positive momentum may be driven by improved consistency of
operating performance, a sustained reduction in leverage to below
5.0x and a sustained improvement in interest coverage above 3.0x.
The secured and unsecured debt ratings are primarily sensitive to
changes in Advisor Group's IDR and secondarily to recovery
prospects for each class of debt under a stress scenario.
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
Advisor Group Holdings, Inc. has an ESG Relevance Score of '4' for
Management Strategy due to the execution risks associated with the
operational integration of Ladenburg and achievement of envisioned
synergies and deleveraging, which has a negative impact on the
credit profile and is relevant to the ratings in conjunction 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.
AMC ENTERTAINMENT: Shelton McNally Acquires Shattered Movie Theater
-------------------------------------------------------------------
Caleb Harshberger of Triangle Business Journal reports that the
Atlanta-based real estate investor, Shelton McNally, has paid $8
million for the site of a shuttered Raleigh, N.C. movie theater,
AMC Entertainment, in an area the city has targeted for growth.
On Nov. 3, 2020 Shelton McNally closed on the AMC theater in west
Raleigh just outside the city's beltline. The property is situated
on 13 acres at 600 Blue Ridge Road near a collection of office
properties and apartments. The theater closed earlier this 2020.
Wake County values the two parcels at just shy of $2.4 million,
according to county records. The seller, Georgia-based American
Multi-Cinemas, bought the property in 1993 for $982,000 when the
company was known as Carmike Cinemas Inc.
The site along Blue Ridge Road is part of an area the city wants to
revitalize after years of stagnant growth. A study completed early
this year by the city details the options for making the region a
Municipal Service District, such as what was done for downtown
Raleigh and for the Hillsborough Street region.
Shelton McNally is a commercial real estate investor and developer
with a growing portfolio around the country. According to its
website, the company is "focused on value creation opportunities in
the multifamily, office, student housing and mixed-use sectors,"
and pursues "ground-up development and value-add acquisition
projects across the Southeast and Midwest markets."
Shelton McNally's plans for the property are unclear and the
company did not return a request for comment.
Since the pandemic started, movie theaters have struggled to stay
afloat, with many shutting down or defaulting on loans.
Earlier this 2020, Miami-based CMX Cinemas, filed for Chapter 11
bankruptcy protection. Last 2019, the developers of the Fenton
project in Cary, N.C. had announced that CMX would open a
six-screen, 35,000-square-foot, luxury dine-in theater in the
commercial development set to be anchored by a Wegmans.
Fenton's developers still expect the theater to deliver, likely in
2022.
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.
AMC 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 has been forced to close its shutter its theaters when the
Covid-19 pandemic struck in March 2020. It has reopened its
theaters but admissions have been substantially low.
The world's biggest theater chain said in an October 2020 filing
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.
AMERICORE: Court OKs Sale of St. Alexius to Klein/Alholm Group
--------------------------------------------------------------
Jacob Kirn of St. Louis Business Journal reports that the sale of a
south St. Louis hospital, delayed for months, is now scheduled for
this November 2020.
A bankruptcy judge in the first week of November 2020 approved new
terms for the sale of St. Alexius Hospital to SA Hospital
Acquisition Group LLC, led by health care executives Ben Klein and
Jeff Ahlholm. The hospital is currently owned by Americore
Holdings, which filed Chapter 11 bankruptcy in December.
The transaction was previously scheduled to close in August but was
held up by a state of Missouri investigation into patient care.
The hospital's trustee, Carol Fox, said in a court hearing that she
believed she had resolved any issues with the state, and that
closing is scheduled for Nov. 19, 2020.
The new sale agreement includes language to address new U.S.
Department of Health and Human Services guidance on the use of
federal CARES Act funds. St. Alexius got $16.5 million in funds for
a program aiding "safety net" hospitals, or those that provide care
to individuals regardless of their ability to pay. It was also
approved for $5.1 million in Paycheck Protection Program funding,
also from the CARES Act.
Under the new agreement, SA Hospital would have to indemnify St.
Alexius for any claim from the federal government that expenditures
made from Oct. 1 through the closing date do not qualify under the
CARES Act.
The agreement also said that St. Alexius could now have its PPP
loan forgiven, and that Fox is pursuing that. If the loan isn't
forgiven, SA Hospital will have to pay St. Alexius an extra $2.7
million, it said.
Other terms of the sale:
An $18.6 million purchase price, including $17.1 million to St.
Alexius' estate.
SA Hospital will acquire all real and personal property owned by
St. Alexius entities, including its Broadway and Jefferson Avenue
campuses.
It excludes cash on hand at closing and the rights to $2.5 million
in proceeds from an agreement between St. Alexius and SSM Health
Care for residency slots.
SA Hospital hasn't responded to requests for comment made through
its lobbyist.
The bankruptcy of St. Alexius' parent company, Americore, came
after numerous lawsuits were filed against it, including in St.
Louis, alleging it was not paying critical service providers.
About Americore Holdings
Americore Holdings, LLC and its affiliates, including Americore
Health LLC, own and operate the Ellwood City Medical Center in
Pennsylvania, Southeastern Kentucky Medical Center (formerly
Pineville Community Hospital), Izard County Medical Center in
Arkansas; and St. Alexius Hospital in St. Louis.
Americore Holdings and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Case
No.19-61608) on Dec. 31, 2019. At the time of the filing, the
Debtor had estimated assets of less than $50,000 and liabilities of
less than $50,000. Judge Gregory R. Schaaf oversees the case.
Bingham Greenebaum Doll, LLP is the Debtor's legal counsel.
Carol A. Fox was appointed as the Debtors' Chapter 11 trustee. The
trustee is represented by Baker & Hostetler LLP.
AMERIDIAN INDUSTRIES: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------------
The Office of the U.S. Trustee disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Ameridian Industries, LLC.
About Ameridian Industries
Ameridian Industries LLC, which conducts business under the name
Pacific Torque, offers sales, services and support for the
transmission, engine and powertrain component manufacturers. It is
an authorized distributor of remanufactured Allison and ZF
off-highway transmissions and an authorized dealer for diesel and
industrial engine manufacturers.
Ameridian Industries sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Wash. Case No. 20-12550) on Oct. 8,
2020. At the time of the filing, the Debtor disclosed assets of
between $10 million and $50 million and liabilities of the same
range.
Judge Christopher M. Alston oversees the case. Armand J. Kornfeld,
Esq., at Bush Kornfeld, LLP, is Debtor's legal counsel.
ARCHDIOCESE OF NEW ORLEANS: Appointment of Separate Panel Sought
----------------------------------------------------------------
First Bank and Trust, a creditor of The Roman Catholic Church of
the Archdiocese of New Orleans, has expressed support for the
appointment of a separate unsecured creditors' committee proposed
by TMI Trust Company.
TMI on Oct. 28 sought the appointment of a separate committee in
the archdiocese's Chapter 11 case after the Office of the U.S.
Trustee removed the company from the committee, leaving it
comprised exclusively of six tort claimants.
"TMI correctly points out that the members of the committee, as
currently constituted, have interests that, in many cases, are
diametrically opposed to the interest of general unsecured
creditors in most Chapter 11 cases, and it appears that, in this
case, their interests are not aligned with those unsecured
creditors whose claims stem from their business relationships with
the debtor," Mark Landry, Esq., First Bank's attorney said in court
papers.
"The solution suggested by TMI, that an additional committee be
constituted, is a rational solution to a difficult problem, but one
that does not prevent the differing constituencies from having a
voice, and expressing their support for actions the debtor
proposes, or expressing their concern with those actions," Mr.
Landry said.
First Bank is willing to accept appointment to the new committee,
along with TMI, and any other unsecured creditors that may be
qualified to be appointed, according to the attorney.
Mr. Landry can be reached at:
Mark C. Landry, Esq.
Newman, Mathis, Brady & Spedale
A Professional Law Corporation
3501 N. Causeway Blvd., Suite 300
Metairie, LA 70002
Telephone: (504) 837-9040
Facsimile: (504) 834-6452
Email: mlandry@newmanmathis.com
About the Archdiocese of New Orleans
The Roman Catholic Church of the Archdiocese of New Orleans is a
non-profit religious corporation incorporated under the laws of the
State of Louisiana. For more information, visit
https://www.nolacatholic.org/
Created as a diocese in 1793, and established as an archdiocese in
1850, the Archdiocese of New Orleans has educated hundreds of
thousands in its schools, provided religious services to its
churches and provided charitable assistance to individuals in need,
including those affected by hurricanes, floods, natural disasters,
war, civil unrest, plagues, epidemics, and illness. Currently, the
archdiocese's geographic footprint occupies over 4,200 square Miles
in southeast Louisiana and includes eight civil parishes --
Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John
the Baptist, St. Tammany, and Washington.
The Roman Catholic Church for the Archdiocese of New Orleans sought
Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1,
2020. The archdiocese was estimated to have $100 million to $500
million in assets and liabilities as of the bankruptcy filing.
Judge Meredith S. Grabill oversees the case.
The archdiocese is represented by Jones Walker LLP. Donlin, Recano
& Company, Inc. is the claims agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on May 20, 2020. The committee is represented by
Pachulski Stang Ziehl & Jones, LLP and Locke Lord, LLP. Berkeley
Research Group, LLC is the committee's financial advisor.
AREU STUDIOS: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------
David Allison of Atlanta Business Chronicle reports that the film
studio, founded by Ozzie Areu, former president of Tyler Perry
Studios in Atlanta, filed for Chapter 11 bankruptcy reorganization
on Oct. 29, 2020 in Atlanta. In Chapter 11, a business continues to
operate while it attempts to reorganize its debts. Areu Studios
reported assets of $50,000 or less and liabilities of $1 million to
$10 million dollars. (Read the filing here.)
An affiliate company, Good Deed 317 LLC, also filed for Chapter
11.
Court documents do not state a reason for the filing. But in March,
studios across the state shut down production to avoid the spread
of the novel coronavirus.
Areu Studios was reportedly the first Latino-owned and operated
major film and television studio in the United States.
In December 2018, Areu bought film mogul Tyler Perry's former
57-acre complex in southwest Atlanta. The purchase of the
205,751-square-foot studio at 2769 Continental Colony Parkway S.W.
included a 24-acre site with approximately 33 acres of excess land,
totaling 56.61 acres, the Chronicle reported. A spokesperson for
the seller's realtor, Atlanta Fine Home Sotheby's International
Realty, said the complex sold for $18.5 million.
Areu, who served as president of Tyler Perry Studios for 12 years,
and his brother, Will Areu, teamed up to buy the campus, where
Perry phased out operations when he opened his new studio on the
site of the former Fort McPherson.
The company had said it planned to build recording studios, sound
stages and a technology center.
In August 2019, Areu Studios acquired an Atlanta-based over-the-top
video distribution software company, Endavo Media and
Communications Inc.
About Areu Studios
Areu Studios, LLC, which owns and operates a movie studio in
Atlanta, Ga., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ga. Case No. 20-71228) on Oct. 29, 2020. The
petition was signed by Ozzie Areu, the company's manager. At the
time of the filing, Debtor had estimated assets of less than
$50,000 and liabilities of between $1 million and $10 million.
Jones & Walden, LLC is the Debtor's legal counsel.
ASC INSULATION: Unsecureds to Be Paid 10% of Claims in 6-Year Plan
------------------------------------------------------------------
ASC Insulation Fireproofing, and Supplies, Inc. submitted a Plan
and a Disclosure Statement.
At present, and since July of 2019, the prior managers, Sergio and
Lourdes Castro have withdrawn from the active management of the
debtor, and Michael Castro, current President has been in charge of
the day to day operations of the debtor. Michael has worked
tirelessly to improve the record keeping and cash management of the
debtor which was wholly lacking under prior management.
CLASS 1 ST. CHARLES BANK AND TRUST CO. is impaired. Class 1 shall
consist of the secured claim of St. Charles Bank and Trust Co.
("St. Charles Bank") which holds a blanket security interest in all
of the assets of the debtor. St. Charles Bank has filed a claim in
the amount of $437,481.99. The bank has been paid a total of $
106,500.00 in adequate protection payments during the pendency of
this case pursuant to cash collateral orders. Debtor proposes to
pay the secured claim in the estimated amount of $437,481.99 in
full over a 60-month period at 4.5% interest via monthly payments
of $8,155.97.
CLASS 2 PRIORITY CLAIMS PURSUANT TO 11 USC Sec. 507(a)(5) CHICAGO
LABORERS PENSION WELFARE FUND FOX VALLEY PENSION & WELFARE FUND
CEMENT MASON'S UNION is impaired. Class 2 shall consist of the
priority claims of the Chicago Laborers Pension and Welfare Fund
("Chicago Laborers"), Fox Valley Laborers Welfare and Pension Fund
("Fox Valley"), and the Cement Masons Union Local 502 ("Cement
Masons") in the amount of $252,731.25 for claims entitled to
priority under 11 USC § 507 (a)(5). These claims will be paid in
full, with interest at the federal judgment interest rate of .13%,
over a 6 year period. That payment will be in the amount of
$3,524.05 per month. Each creditor in his claims will receive its
pro rata share of the payment.
CLASS 3 SECURED CLAIM OF CHICAGO LABORERS PENSION AND WELFARE FUND
is impaired. Class 3 shall consist of the secured claim of the
Chicago Laborers Pension and Welfare Fund in the sum of
$334,173.00. This creditor is secured by a blanket lien which is in
second position to the Class1 creditor. Class 3 shall receive a
monthly payment of $2,114.14 per month which represents a 20 year
amortization of the amount due at 4.5% interest. The balance will
be paid at the conclusion of the plan, when the first lien of the
priority secured creditor is released.
CLASS 4 UNSECURED CREDITORS are impaired. Class 4 shall consist of
all unsecured creditors including any non-priority, unsecured
claims of Class 2 and 3. Unsecured claims are estimated at the
total of $1,200,000. Unsecured claims will be paid at approximately
10% via annual payments of $20,000 over a six-year period.
CLASS 5 EQUITY HOLDERS. Class 5 shall consist of the equity
interest of Alfonso Castro. Equity holder Alfonso Castro shall not
receive any dividends or repayment whatsoever on account of his
stock interest. Should all classes of creditors vote to accept the
plan, Alfonso Castro will retain his stock interest.
As of the filing date ASC Insulation Fireproofing and Supplies,
Inc. owned bank accounts with St. Charles Bank and Trust in the
amount of $6,945. As of filing, ASC had accounts receivable in the
face amount of $1,024,144, inventory with a cost value of $52,287,
machinery, equipment and vehicles with a cost value of $401,760,
and miscellaneous furniture and office equipment with a value of
$15,100.
A full-text copy of the Disclosure Statement dated September 21,
2020, is available at https://tinyurl.com/yxjrl4wy from
PacerMonitor.com at no charge.
Attorney for ASC Insulations Fireproofing and Supplies, Inc.:
RICHARD G. LARSEN #06193054
Springer Larsen Greene, LLC
300 S. County Farm Road
Suite G
Wheaton, IL 60187
Tel: 630-510-0000
E-mail: rlarsen@springerbrown.com
About ASC Insulation Fireproofing
ASC Insulation Fireproofing and Supplies, Inc. --
http://www.ascfireproofing.com/-- is a family-owned company
specializing in commercial spray-applied fireproofing coatings,
industrial coatings, intumescent coatings, and thermal and
acoustical coatings.
ASC Insulation sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ill. Case No. 19-31687) on Nov. 6, 2019. Judge
Timothy A. Barnes is assigned to the case. In the petition signed
by its president, Mike Castro, the Debtor was estimated to have
assets of less than $50,000 and debt under $10 million. James Young
Law serves as the Debtor's counsel.
ASCENA RETAIL: Bluestar Buys Justice Brand for $90 Million
----------------------------------------------------------
Ben Unglesbee of Retail Dive reports that Bluestar Alliance is set
to acquire the Justice brand from Ascena Retail Group after winning
a bankruptcy auction for the tween brand. Bluestar -- which owns
the Hurley, Bebe, Tahari, Brookstone, Limited Too and Nanette
Lepore brands -- won Justice with a $71 million cash bid that
ultimately values the brand at $90 million including assumed
liabilities.
Bluestar's winning bid was up more than $10 million from its
original stalking horse bid. WHP Global, which owns the Anne Klein
and Joseph Abboud brands, was the back up bidder, according to
court papers.
A hearing is set for Thursday to consider the sale in the federal
bankruptcy court overseeing Ascena's Chapter 11 case. The parties
expect the deal to close before the end of November, according to a
press release.
Ascena's fire sale of its brands started before it filed for
bankruptcy. Last spring it sold its Maurices brand, and later wound
down its Dressbarn banner and sold the brand to Retail Ecommerce
Ventures, which this year snapped up the Pier 1 and Modell's brands
out of Chapter 11 after those retailers liquidated.
In bankruptcy, Ascena has also moved to sell its Catherines
business to FullBeauty brands, along with closing more than 1,000
stores across its fleet.
Ascena acquired the Justice chain in 2009 to expand into the tween
market. By fall 2019, the chain had 826 stores, and sales had
declined slightly from the previous year. As the Justice brand
changes hands, it is winding down all of its physical stores, which
is expected to be finished in early 2021, according to a separate
press release from Ascena emailed to Retail Dive.
Ralph Gindi, co-founder of Bluestar, said the Justice brand has
"capacity to grow, particularly in categories and distribution."
"Our goal is to create even deeper connections with our consumers
and the brand, while expanding Justice's reach and footprint,"
Gindi said in the release, adding that his company aims to keep the
brand focused on its current demographics and social media
following.
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.
ASTOR EB-5 LLC: Asks Court to Extend Plan Exclusivity Thru Jan. 21
------------------------------------------------------------------
Astor EB-5, LLC, requests the U.S. Bankruptcy Court for the
Southern District of Florida to extend by 90 days the exclusive
periods during which the Debtor may solicit acceptances within
which to negotiate with creditors or to amend plan and disclosure
statement, and solicit acceptances from October 17, 2020, to
January 21, 2021.
"We have been working together with the Creditors toward
negotiating a consensual plan, and have engaged in several
negotiations with prospective purchasers. The additional time is
needed due to continued state court litigation, and delays caused
by the COVID-19 pandemic," the Debtor said.
A copy of the Debtor's Motion to Extend is available from
PacerMonitor.com at https://bit.ly/2TyTsKS at no extra charge.
About Astor EB-5 LLC
Astor EB-5, LLC is a Florida limited liability company that
operates Hotel Astor, in Miami, Florida. Located a few blocks from
the beach, this art deco boutique hotel with original 1930s
terrazzo floors offers modern rooms, private terraces with
courtyard, and on-site pools, among other amenities.
Based in Miami, Florida, Astor EB-5 filed a Chapter 11 petition
(Bankr. S.D. Fla. Case No. 18-24170) on November 14, 2018. In the
petition signed by David J. Hart, manager, the Debtor was estimated
to have $1 million to $10 million in both assets and liabilities.
The Honorable Jay A. Cristol presided over the case. Paul L.
Orshan, Esq., at Orshan, P.A., served as bankruptcy counsel to the
Debtor.
Astor EB-5 sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Fla. Case No. 20-16595) on June 17, 2020. At the
time of the filing, the Debtor Was estimated to have assets of $10
million to $50 million and liabilities of $1 million to $10
million. Judge A. Jay Cristol oversees the case. Joel M. Aresty,
P.A. is the Debtor's bankruptcy counsel in the present case.
AVINGER INC: Posts $5.5 Million Net Loss in Third Quarter
---------------------------------------------------------
Avinger, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss attributable to
common stockholders of $5.49 million on $2.30 million of revenues
for the three months ended Sept. 30, 2020, compared to a net loss
attributable to common stockholders of $5.52 million on $2.41
million of revenues for the three months ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss attributable to common stockholders of $17.28 million on
$6.03 million of revenues compared to a net loss attributable to
common stockholders of $17.01 million on $6.57 million of revenues
for the same period during the prior year.
As of Sept. 30, 2020, the Company had $36.95 million in total
assets, $22.49 million in total liabilities, and $14.45 million in
total stockholders' equity.
Jeff Soinski, Avinger's president and CEO, commented, "The third
quarter saw a significant acceleration of case activity, driving a
57% sequential increase in revenue and gross margin of 34%,
effectively returning Avinger to its pre-COVID business levels. We
added 10 new customer sites in the third quarter, with more sites
already added in the fourth quarter and a robust pipeline of sales
opportunities. By maintaining our lean operating expense profile,
we improved bottom line performance over the prior year while
continuing to invest in our strategic growth initiatives."
"Beginning in the fourth quarter, we also took a key step forward
in our growth strategy with completion of the first U.S. commercial
cases for Tigereye, our next generation CTO-crossing catheter.
Patient outcomes have been compelling, demonstrating the power of
Tigereye's enhanced imaging, steerability and new distal tip
design. We will continue launching at key opinion leader sites
throughout the fourth quarter, then progress to full commercial
availability in the first quarter of 2021. Similar to the
successful Pantheris SV launch, we expect Tigereye to fuel higher
revenue growth opportunities across both existing and new user
sites.
"Through our capital raising activities and efficient cost
structure, the Company ended the quarter with more than $25 million
in cash, which is anticipated to fund our growth initiatives
through 2021. We now have the capital to drive increased
utilization of our Lumivascular solutions, support the rollout of
our Tigereye CTO-crossing catheter, finalize the development of our
enhanced L300 Lightbox, and advance our clinical efforts in support
of expanded use and reimbursement. We believe these initiatives
will advance our competitive position and revenue growth
opportunities in 2021 and beyond."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1506928/000143774920023413/avgr20200930_10q.htm
About Avinger
Headquartered in Redwood City, California, Avinger --
http://www.avinger.com-- is a commercial-stage medical device
company that designs and develops image-guided, catheter-based
system for the diagnosis and treatment of patients with Peripheral
Artery Disease (PAD).
Avinger reported a net loss applicable to common stockholders of
$23.03 million for the year ended Dec. 31, 2019, compared to a net
loss applicable to common stockholders of $35.69 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$28.88 million in total assets, $21.33 million in total
liabilities, and $7.55 million in total stockholders' equity.
Moss Adams LLP, in San Francisco, California, the Company's auditor
since 2017, issued a "going concern" qualification in its report
dated March 5, 2020, citing that the Company's recurring losses
from operations and its need for additional capital raise
substantial doubt about its ability to continue as a going concern.
AVISON YOUNG: Moody's Affirms B2 CFR; Alters Outlook to Stable
--------------------------------------------------------------
Moody's Investors Service revised the outlook of Avison Young
(Canada) Inc. to stable from positive. In the same rating action,
Moody's affirmed all of Avison Young's ratings, including its B2
corporate family rating and its B2 senior secured bank credit
facility rating.
The ratings affirmation and outlook revision to stable from
positive, reflect Avison Young's weakened operating performance in
the current environment and failure to maintain leverage and
coverage metrics post the GVA transaction. The company's leverage
has increased above expectations, with debt to EBITDA at 4.4x for
the last twelve-month period ending June 30, 2020. The company's
revenue streams have been negatively affected by a reduction in
business activity and a material decline in leasing and capital
markets transaction volumes including average deal size and tenure,
due to the pandemic. The potential for continued earnings and
revenue erosion due to the deterioration in the macroeconomic
environment has increased with the continued spread of the
coronavirus and a prolonged recovery into 2021 or beyond could put
further pressure on the company's earnings and weaken leverage
ratios above current levels.
Affirmations:
Issuer: Avison Young (Canada) Inc.
-- Corporate family rating, affirmed at B2
-- Senior secured asset-based revolving credit facility, affirmed
at B2 (LGD4)
-- Gtd. senior secured term loan, affirmed at B2 (LGD4)
-- Probability of default rating, affirmed at B2-PD
Outlook Action:
Issuer: Avison Young (Canada) Inc.
-- Outlook changed to Stable from Positive
RATINGS RATIONALE
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.
Its analysis has considered the effect on the performance of
commercial real estate from the current weak 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. The action in part reflects the impact on Avison Young, the
breadth and severity of the shock, and the broad deterioration in
credit quality it has triggered.
Avison Young's B2 corporate family rating reflects its good
near-term liquidity with no upcoming debt maturities, and an
experienced management team that has helped the company expand its
portfolio over time through strategic acquisitions and organic
growth. Avison's rating is constrained by its small size on a
revenue basis relative to its peers and potential cash flow
volatility inherent in its transaction business. Avison Young is a
commercial real estate services company comprised of four main
divisions: brokerage leasing, investment sales and capital markets,
property and project management and advisory/consulting services.
The company's transaction-driven business lines are highly
correlated to real estate and economic cycles, creating volatility
in revenues, though partially mitigated by the 2019 acquisition of
UK-based GVA which provides geographical and business line
diversification.
Moody's views Avison Young's liquidity coverage as good over the
short term, despite a shortfall in revenue given the current
environment as well as limited external sources of liquidity
compared to larger peers. The company has introduced several
initiatives to preserve liquidity and cash flow, including reducing
discretionary spending, capital expenditures and other material G&A
expenses. As of June 30, 2020, the company had approximately CAD
$15.8 million of cash on hand, USD $38.3 million available on its
USD $60 million secured revolving credit facility due in 2024, and
CAD $20 million of undrawn preferred equity. In September 2020, the
company obtained additional financing through a 36-month CAD $50
million second lien delayed draw non-revolving credit facility,
with its equity sponsor Caisse de Depot et Placement due Quebec
("CDPQ") acting as the lender. The facility, which was undrawn at
closing, will be used primarily as a backstop to Avison's existing
sources of liquidity. Positively, debt maturities are manageable
over the short term, consisting primarily of term loan
amortization.
The stable rating outlook reflects Moody's expectation that the
company will continue to grow its recurring fee revenues while
reducing leverage and coverage metrics.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade is unlikely over the intermediate term and would
be predicated on strong operating performance through real estate
and economic cycles as well as a broader, less cyclical business
mix, specifically non-brokerage operating income increasing to over
one-third of total operating income. In addition, an upgrade would
be predicated upon continued revenue growth closer to USD $1
billion annually, achieved in a measured, leverage-neutral manner.
Negative ratings pressure would result should Debt/EBITDA rise
closer to 6x or EBITA/Interest decline closer to 1.5x, both on a
sustained basis. In addition, any deterioration in liquidity would
place negative pressure on the rating.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Headquartered in Toronto, Canada, Avison Young (Canada) Inc. is a
private global commercial real estate services firm serving
property owners, investors and occupiers with approximately 5,000
real estate professionals in more than 100 markets across 15
countries. For the LTM period ended June 30, 2020, Avison Young
reported approximately CAD $816 million in total net fee revenues.
BASIC ENERGY: Moody's Cuts CFR to Caa3, Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service downgraded Basic Energy Services, Inc.
Corporate Family Rating to Caa3 from Caa1, Probability of Default
Rating (PDR) to Caa3-PD from Caa1-PD, and secured 2023 notes to Ca
from Caa2. Moody's also downgraded Speculative Grade Liquidity
(SGL) rating to SGL-4 from SGL-3. The outlook was changed to
negative.
"The downgrade of Basic's ratings to Caa3 reflects heightened
probability of default following the launch of the private exchange
offer on the company's 2023 senior secured notes," commented Elena
Nadtotchi, Moody's Senior Vice President. "The downgrade also
reflects sustained weak conditions in the company's oilfield
service business and Moody's expectation of delayed recovery, as
well as the company's weak liquidity position."
Downgrades:
Issuer: Basic Energy Services, Inc.
Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3
Corporate Family Rating, Downgraded to Caa3 from Caa1
Senior Secured Regular Bond/Debenture, Downgraded to Ca (LGD5) from
Caa2 (LGD4)
Outlook Actions:
Issuer: Basic Energy Services, Inc.
Outlook, Changed To Negative From Positive
RATINGS RATIONALE
Basic's Caa3 CFR and Caa3-PD PDR reflect heightened probability of
default following the private exchange offer launched by the
company and Moody's expectations on recovery rates. The company
offers to exchange part of its existing 2023 notes into 2025 senior
secured notes and seeks a consent to change key terms of the 2023
notes. Based on the proposed terms, Moody's views this exchange as
a distressed exchange and a form of default. Subject to the
completion of the transaction and the final terms, Moody's will
likely append an "/LD" to the Probability of Default Rating
indicating limited default.
The Caa3 CFR also reflects the company's weak operating performance
and its reliance on recovery in Exploration and Production (E&P)
development activity through the rest of 2020 and beyond to reverse
the decline in revenues and cash flows.
Basic's negative outlook reflects weak liquidity position,
currently supported by loans provided by the majority shareholder.
The $300 million senior secured notes due 2023 are rated Ca, below
the Caa3 CFR, reflecting Moody's views on recovery rates and the
existence of priority debt in the capital structure, including the
$75 million senior secured ABL facility, and new notes being
offered and issued as part of the exchange. The ABL facility has a
first lien priority on the relatively more liquid ABL collateral.
Following the exchange, the first priority and new notes due 2025
will also hold priority positions within the capital structure
relative to the senior secured notes which would lose their secured
status pursuant to a consent that is being requested as part of the
exchange offer.
Basic's weak liquidity position is reflected in its SGL-4 rating.
Moody's expects Basic to have negative free cash flow through 2021.
The ABL facility has a springing covenant that will require the
company to maintain a fixed charge coverage ratio of above 1x when
excess availability is less than the greater of (i) 12.5% of the
maximum borrowing amount and (ii) $9,375,000. Basic expects it may
not be able to comply with the covenant if it were triggered. The
company's assets are fully encumbered, limiting the ability to
raise cash through asset sales.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if Basic's operational performance and
liquidity deteriorates further or if Moody's views on recovery
decline. Basic's ratings would be considered for an upgrade if its
liquidity improves and becomes adequate on the back of some
improvement in operations and if its interest coverage is
maintained above 1x.
Fort Worth, TX-based Basic Energy Services provides well site
services to oil and natural gas producing companies in the United
States. Basic's services include completion and remedial services,
fluid services, well servicing and water logistics.
The principal methodology used in these ratings was Global Oilfield
Services Industry Rating Methodology published in May 2017.
BENCHMARK ELECTRONIC: Egan-Jones Lowers Unsec. Debt Ratings to BB
-----------------------------------------------------------------
Egan-Jones Ratings Company, on November 4, 2020, downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Benchmark Electronics Inc. to BB from BB+.
Headquartered in Tempe, Arizona, Benchmark Electronics, Inc.
provides contract electronics manufacturing and design services.
BERTONI GELATO: Unsecureds to Get Surplus From Sale Proceeds
------------------------------------------------------------
Bertoni Gelato Brickell, LLC filed with the U.S. Bankruptcy Court
for the Southern District of Florida a Combined Disclosure
Statement and Plan of Reorganization dated September 17, 2020.
This Plan is a plan to liquidate the assets to pay administrative
and priority claims with any surplus to be divided among unsecured
creditors.
The Debtor is owned and held 100% by Bertoni Holdings, LLC. The
person in charge is Bertoni Holding's manager, Marcelo Pinto. He is
a resident of Miami-Dade County. He is the hands-on manager of the
Debtor. The Debtor will be controlled by Bertoni Holdings, via its
manager, Marcelo Pinto and he will be bound by the Plan and
Confirmation Order.
The Debtor scheduled twenty-nine unsecured claims as undisputed and
six of these creditors have filed unsecured claims. These 29
remaining unsecured creditors have claims that total less than
$225,000, with one debt of approximately $163,000 which is held by
a Debtor affiliate (TF Manufacturing).
Unsecured Creditors will only receive a pro-rata distribution of
amounts collected by the Debtor from property of the Debtor
existing on the confirmation date after satisfaction or settlement
of the foregoing items.
Former equity holders will not retain any property or receive any
payment under the Plan, except the ownership of the Debtor and any
tax carryovers associated therewith.
The Plan will be funded by cash in the estate and existing claims
or collections to be pursued in the name of the Debtor.
A full-text copy of the Combined Disclosure Statement and Plan
dated September 17, 2020, is available at
https://tinyurl.com/y28ke27j from PacerMonitor at no charge.
Counsel to Debtor:
SCOTT ALAN ORTH, ESQ.
LAW OFFICES OF SCOTT ALAN ORTH, P.A.
3860 Sheridan Street, Suite A
Hollywood, FL 33021
Tel: 305.757.3300
Fax: 305.757.0071
E-mail: scott@orthlawoffice.com
service@orthlawoffice.com (primary)
eserviceSAO@gmail.com (secondary)
About Bertoni Gelato Brickell
Based in Miami, Florida, Bertoni Gelato Brickell LLC filed a
voluntary petition under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. Case No. 18-20828) on Aug. 31, 2018, listing less
than $1 million in assets and liabilities. Scott Alan Orth, Esq.,
at the Law Office of Scott Alan Orth, P.A., is the Debtor's
counsel.
BLACKWATER TECHNOLOGIES: Case Summary & 20 Top Unsecured Creditors
------------------------------------------------------------------
Debtor: Blackwater Technologies, Inc.
202 Deer Run Lane
Bremen, GA 30110
Business Description: Blackwater Technologies, based in
Carrollton, Georgia, specializes in fire
protection as well as low voltage projects.
The Company provides fire alarm
installation, maintenance, and inspection
services.
Chapter 11 Petition Date: November 12, 2020
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 20-11518
Judge: Hon. Paul Baisier
Debtor's Counsel: J. Nevin Smith, Esq.
SMITH CONERLY LLP
402 Newnan Street
Carrollton, GA 30117
Tel: 770-834-1160
Fax: 770-834-1190
Email: awilson@smithconerly.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Charles C. Blackwell, CEO.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YKA4QFA/Blackwater_Technologies_Inc__ganbke-20-11518__0001.0.pdf?mcid=tGE4TAMA
BREW CREW: Stone Bank Questions Plan's Feasibility
--------------------------------------------------
Creditor Stone Bank objects to the Disclosure Statement filed by
Debtor Brew Crew Transportation, LLC.
Stone Bank claims that the Disclosure Statement is inadequate and
unreliable as Debtor, which operated a trucking business, is
proposing to liquidate its assets, but the Disclosure Statement
fails to provide any information as to what, if any, experience or
ability that Debtor and its representatives have with liquidating
assets.
Stone Bank points out that the Disclosure Statement fails to
provide any factual support or analysis regarding the reasons
behind Debtor's belief that it should remain in control of the
liquidation process and further fails to provide any factual
support or analysis regarding the Debtor's belief that a
Debtor-controlled liquidation would be the best option for
obtaining the highest value for its assets.
Stone Bank states that the Disclosure Statements fails to provide a
supported, accurate valuation of Debtor's assets and fails to
provide explanation as to how it arrived as such valuation.
Stone Bank asserts that the Disclosure Statement is inadequate as
it fails to specifically identify how the Bank will be involved in
Debtor's liquidation process or how any resulting proceeds will be
distributed to the Bank.
Stone Bank further asserts that the Disclosure Statement fails to
provide sufficient details or information that would allow
creditors and other parties in interest to determine whether the
Plan is feasible. The Debtor's failure to furnish such information
is particularly troubling to the Bank since the Plan proposes to
allow Debtor a full six month time period to liquidate the Bank's
collateral.
Stone Bank says that the Disclosure Statement should not be
approved because the Plan, on its face, is not capable of being
confirmed. The Plan fails to meet all of the requirements of
applicable bankruptcy law, including, but not limited to Section
1129.
A full-text copy of Stone Bank's objection to Disclosure Statement
dated September 18, 2020, is available at
https://tinyurl.com/y4qe95a4 from PacerMonitor.com at no charge.
Attorneys for Stone Bank:
HOPKINS CASTSTEEL PLC
Ryan J. Caststeel
1000 West Second Street
Little Rock, AR 72201
www.hopkinslawfirm.com
Telephone: (501) 375-1517
Facsimile: (501) 375-0231
E-mail: rcaststeel@hopkinslawfirm.com
About Brew Crew Transportation
Brew Crew Transportation, LLC filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ark. Case No.
20-71846) on Aug. 24, 2020. At the time of the filing, Debtor
disclosed assets of between $100,001 and $500,000 and liabilities
of the same range. Judge Ben T. Barry oversees the case. Donald
A. Brady, Esq., of Brady & Conner, PLLC, serves as Debtor's
bankruptcy counsel.
BREW CREW: US Trustee Unable to Determine Adequacy of Disclosures
-----------------------------------------------------------------
The United States Trustee filed an objection to the Disclosure
Statement filed by debtor Brew Crew Transportation, LLC.
The United States Trustee points out that:
* The Debtor fails to give sufficient information regarding the
condition, location, and valuation of the trucks and trailers.
* The Debtor has failed to provide information on its historical
financial condition.
* The Debtor's Disclosure Statement does not contain sufficient
information to enable a hypothetical investor to make an informed
judgment about the plan in accordance with 11 U.S.C. Sec. 1125.
Based on the foregoing, the United States Trustee is unable to
determine the adequacy of the Debtor's Disclosure Statement.
About Brew Crew Transportation
Brew Crew Transportation, LLC filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ark. Case No.
20-71846) on Aug. 24, 2020. At the time of the filing, Debtor
disclosed assets of between $100,001 and $500,000 and liabilities
of the same range. Judge Ben T. Barry oversees the case. Donald A.
Brady, Esq., of Brady & Conner, PLLC, serves as Debtor's
bankruptcy counsel.
BRIGHTHOUSE FINANCIAL: Fitch Assigns BB+ Rating on Preferred Stock
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB+' rating to the noncumulative
preferred stock offered by Brighthouse Financial, Inc.
KEY RATING DRIVERS
The rating for the new offering is equivalent to the rating on
Brighthouse's existing noncumulative preferred stock. Proceeds from
the issuance are intended to be used to repurchase a portion of two
series of existing senior notes under tender offers.
The noncumulative preferred stock is perpetual. Brighthouse may
elect to redeem the stock beginning in 2025. Under certain limited
circumstances, Brighthouse may redeem the stock earlier than 2025.
Dividends will be paid on a noncumulative basis, when and if
declared. Based on Fitch's rating criteria, the noncumulative
preferred stock is afforded 100% equity credit in Fitch's financial
leverage calculations. As such, Fitch expects the noncumulative
preferred stock will improve Brighthouse's financial leverage
ratio, but reduce its coverage ratios.
Fitch affirmed the ratings of Brighthouse with a Negative Outlook
on April 21, 2020.
RATING SENSITIVITIES
The ratings remain sensitive to any material change in Fitch's
rating case assumptions with respect to the coronavirus pandemic.
Periodic updates to Fitch's assumptions are possible given the
rapid pace of changes in government actions in response to the
pandemic, and the pace with which new information is available on
the medical aspects of the outbreak.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
-- A material adverse change in Fitch's ratings assumptions with
respect to the coronavirus impact;
-- Material deterioration in Fitch's assumed pro forma, or
Brighthouse's actual, overall capitalization and leverage to below
an overall score of 'aa-'. This might include a significant decline
in management's strategic target for risk-based capital, a Prism
capital score inconsistent with the overall credit factor score or
financial leverage ratio exceeding 28%.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
-- A positive rating action is prefaced by Fitch's ability to
reliably forecast the impact of the coronavirus pandemic on the
financial profile of both the U.S. life insurance industry and
Brighthouse;
-- A track record of strong operating performance, risk
management and reasonable stability in capitalization.
BRIGHTHOUSE FINANCIAL: Moody's Rates $300MM Pref. Stock 'Ba2(hyb)'
------------------------------------------------------------------
Moody's Investors Service assigned a Ba2(hyb) rating to Brighthouse
Financial, Inc.'s (senior debt Baa3 stable) anticipated issuance of
around $300 million of Series C non-cumulative preferred stock.
Proceeds from the offering will be used to pay off a portion of the
outstanding senior notes due in 2027 and 2047. The outlook on
Brighthouse and its insurance subsidiaries remains stable.
RATINGS RATIONALE
The Baa3 senior unsecured debt rating on Brighthouse Financial and
the A3 insurance financial strength (IFS) ratings of its insurance
company subsidiaries are based on the Brighthouse's solid asset
quality, with modest amount of exposure to high-risk assets, namely
below-investment grade securities and alternative investments.
Brighthouse's capital adequacy is strong, largely to enable the
company to proactively manage the volatility and tail risk
associated with its variable annuity block.
These strengths are mitigated by risk exposures related to a
concentration of legacy variable annuities, mostly with guarantees,
managing a run-off block of institutional spread businesses and
universal life with secondary guarantees and modest projected
statutory capital generation partially due to the high cost of
hedging market-sensitive liabilities.
The Ba2(hyb) rating on the preferred securities reflects Moody's
typical notching for instruments issued by insurers relative to
their IFS and senior debt ratings. Because of equity-like features
contained in the preferred stock, the security will receive partial
equity treatment in Moody's leverage calculation and adjusted
leverage will improve as a result of the transaction.
Moody's believes that the coronavirus-driven economic downturn and
ultra-low interest rates will stress most aspects of life insurers'
financials, including those of Brighthouse. This includes sales,
investment income, reserves and capital adequacy. Most life
insurers, including Brighthouse, start with healthy capital and
asset quality to weather this storm over the near term, but these
conditions will weaken their creditworthiness if they persist.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The following factors could lead to an upgrade of the ratings: 1)
run-rate statutory capital generation in excess of $500 million; 2)
shift in the business mix towards more protection-oriented products
(e.g., life insurance); and 3) earnings and cash flow coverage
above 6x and 4x, respectively. Conversely, the following factors
could lead to a downgrade of the ratings: 1) organic capital
generation diminishes and GAAP return on capital less than 5%; 2)
earnings and cash flow coverage below 4x and 2x, respectively; 3)
adjusted financial leverage (excluding AOCI) above 30%.
AFFECTED RATINGS
The following rating was assigned:
Brighthouse Financial, Inc.: preferred non-cumulative, assigned
Ba2(hyb)
The outlook on Brighthouse and its affiliates remains stable.
The principal methodology used in this rating was Life Insurers
Methodology published in November 2019.
Brighthouse is headquartered in Charlotte, North Carolina. As of
Sept. 30, 2020, Brighthouse reported total assets of $240 billion
and total equity of $18.3 billion.
BRUNSWICK CORP: Egan-Jones Hikes Sr. Unsec. Debt Ratings to BB+
---------------------------------------------------------------
Egan-Jones Ratings Company, on November 6, 2020, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Brunswick Corporation/DE to BB+ from BB-.
Headquartered in Lake Forest, Illinois, Brunswick Corporation
manufactures consumer products serving the outdoor and indoor
active recreation markets.
CAPE QUARRY: Quarry Aggregates Objects to the Milner Plan
---------------------------------------------------------
Quarry Aggregates, LLC (Equity Investor) objects to the proposed
First Amended Plan/Disclosure Statement filed by holders of the DIP
Claim, Celtic Claim and Milner Prepetition Claim (the Milner Plan)
for Debtor Cape Quarry, LLC.
Quarry Aggregates claims that the plan is inadequately funded,
there is no description of where funds are coming from, and it
appears that the way the plan is structured it allows for the
possibility that no capital is ever funded to pay the DIP claim.
Quarry Aggregates points out that the definition of the "Celtic
Objection Condition" indicates that anyone of the unsecured
creditors who votes for Quarry Aggregates plan would get further
impaired treatment and is in bad faith and would have a chilling
effect on the unsecured creditors who might consider voting for
Quarry Aggregates plan.
Quarry Aggregates states that the Plan indicates that there is a
pro rata share of $300,000.00 for each of the allowed unsecured
creditors but again the plan is short on details and does not
indicate where any of the money is coming from or that it is
readily available to carry out the Plan.
Quarry Aggregates asserts that the plan is short on cash as
typically Administrative Expense Claims Reserve are paid first to
get the Debtor out of the Court system and is inconsistent with the
claim of having a $1,000,000.00 "Administrative Reserve" of dubious
origin. It appears to be blue smoke and mirrors.
Quarry Aggregates further asserts that the plan is objectionable as
it does not provide in substance nor is there a corresponding
exhibit indication the availability of the cash, its source or the
differentiation of the two proposed $1,000,000.00 cash injections
to fund the two respective reserves.
A full-text copy of Quarry Aggregates' objection to the Milner Plan
dated September 17, 2020, is available at
https://tinyurl.com/y599zaxl from PacerMonitor at no charge.
Attorneys for Quarry Aggregates:
Matthew Pepper
Pepper & Associates, PC
10200 Grogans Mill Rd. Ste 235
The Woodlands, TX 77380
Tel: (281) 367-2266
Fax: (281) 292-6072
About Cape Quarry
Cape Quarry, LLC, filed a Chapter 11 bankruptcy petition (Bankr.
E.D. La. Case No. 19-12367). The Debtor hired Pepper & Associates,
PC, as attorney.
Pepper & Associates can be reached at:
Matthew L. Pepper, Esq.
PEPPER & ASSOCIATES, PC
10200 Grogans Mill Rd., Suite 235
The Woodlands, TX 77380
Tel: (281) 367-2266
Fax: (281) 292-6072
CENTERFIELD MEDIA: S&P Assigns 'B' ICR, Outlook Stable
------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to Los
Angeles, Calif.-based digital marketing services company
Centerfield Media Parent Inc. and its 'B' issue-level and '3'
recovery ratings to the company's proposed senior secured credit
facility.
S&P's ratings on Centerfield reflects the following credit risks:
-- Participation in a highly competitive and fragmented industry
with low barriers to entry
-- Considerable customer and sector concentration
-- Uncertainty in operating performance due to pay-for-performance
business model
-- Relatively small scale of operations
-- Financial-sponsor ownership expected to pursue debt-financed
acquisitions
-- High adjusted leverage in the mid-5x area
These challenges are somewhat offset by the following credit
strengths:
-- Proven customer acquisition model
-- Good industry growth prospects
-- Profitable affiliate relationship with its clients
-- Centerfield has significant customer and sector concentration
and is relatively small compared to its primary competitor.
The company's top 10 customers generated about 65% of gross profit
for the 12 months ended Sept. 30, 2020, with its top customer
accounting for a significant portion of that total. The company
also generates over 50% of its gross profit from the telecom
sector. Such exposure to a single sector could result in volatility
in an economic downturn, although Centerfield's concentration
within the telecom sector has been resilient through the pandemic
and resulting recession with increased consumer spending on
broadband services. Although S&P expects Centerfield to grow its
other verticals both organically and through acquisition, the loss
of a key customer or a telecom industry downturn could result in a
significant drop in EBITDA and cash flow.
The company generated pro forma adjusted EBITDA of about $85
million for the 12 months ended Sept. 30, 2020, and is much smaller
and targets a less-diversified set of end markets than its main
peer Red Ventures Holdco LP (B+/Negative). While Centerfield and
Red Ventures are the two largest players providing comprehensive
customer acquisition services in the market, there are low barriers
to entry. These two companies have proven technology platforms and
attractive customer-acquisition rates, however their customer
relationships are not exclusive, and Centerfield's largest
customers could easily reallocate marketing dollars to competitors
if they offer a compelling alternative.
Centerfield's pay-for-performance business model makes it
vulnerable to volatility in operating performance.
The company's revenue model typically consists of a
pay-for-performance structure (for example, cost per acquisition)
where it takes responsibility to attract and convert customers. In
addition, the company's contracts incorporate chargeback clauses
with the expectation that the customers acquired through
Centerfield complete their purchase and are retained by
Centerfield's clients for a minimum period of time for Centerfield
to keep its revenue. The pay-for-performance nature of customer
contracts poses operating uncertainty as it makes Centerfield
vulnerable to volatility in earnings as compared to pay-per-click
or subscription-based lead-generation revenue models.
The company has exhibited a good record of revenue growth and
customer acquisition in the telecom and home security sectors.
Centerfield is a data-driven, technology-enabled customer
acquisition partner and online publisher that provides its clients
with a highly customized customer acquisition platform that spans
the entire customer acquisition funnel--discovery and awareness,
conversion or purchase, and ongoing customer engagement. It has
leveraged its proprietary technology platform to establish
strategic partnerships with a limited number of large clients,
primarily in the telecom and home security sectors. The company
often provides solutions that are atypical of traditional online
publisher affiliate partnerships, such as strategic and tactical
marketing consulting services, website hosting within brand
guidelines (such as managing a subdomain of a client's website), or
managing offline marketing channels (such as call routing or sales
center employees).
The company has a record of organic growth by acquiring customers
for its clients at a higher return on investment than its client's
internal sales team. And this success has resulted in new client
growth and expanding share within existing clients.
About 50% of the company's gross profit is generated by owned and
operated websites that are not tied to a specific vendor. These
websites, which are not brand specific, including Broadbandnow.com,
Homesecuritysystems.net, and Savings.com, can provide greater
pricing and a more effective competitive moat for Centerfield than
its client-branded websites because the undecided shopper is more
valuable to the marketplace and demands a premium for customer
conversion. In addition, a well-recognized website with a record of
producing quality content is more likely to be prioritized in
search results and therefore likely to be more profitable than
competitors utilizing paid search advertising. As the company grows
its newer verticals where it has a not yet developed a history of
success, such as retail and pest control, S&P believes there may be
execution risk in achieving the historical growth rates and margin
profile of its telecom and home security verticals.
Centerfield benefits from good industry growth prospects and a
variable cost structure.
The company benefits from the ongoing shift to digital customer
acquisition from offline acquisition. As more customers make their
purchase decisions online, the company has a larger pool of
potential activations. S&P also believes the performance marketing
industry will benefit as organization demand increased
accountability from its chief marketing officers and improved
marketing spending transparency and sales attribution.
Variable marketing spending costs are a key component of
Centerfield's cost base, though the company benefits from organic
(free) search through a number of its owned and operated product
comparison sites. The company also has a high percentage of its
telesales employees in low-cost locations. These factors help the
company achieve pro forma EBITDA margins in mid- to high-20% area,
which is comparable to other digital marketing services companies
but below its primary competitor, Red Ventures.
S&P expects the company's debt-financed acquisition strategy will
keep leverage in the mid-5x area over the next two years.
Pro forma for recent acquisitions, Centerfield's leverage was about
5.3x as of Sept. 30, 2020.
S&P said, "The company is financial sponsor-owned, and we expect it
will aggressively pursue acquisition opportunities to grow the
business in both new and existing verticals. We believe
acquisitions in this industry carry sellers' EBITDA multiples
around 10x and could improve to the 5x-7x range for the buyer after
achieving expected synergies. We expect Centerfield will use debt
to finance these opportunities, which will likely keep adjusted
leverage above 5x. Additionally, we believe acquisitive companies
can exhibit more volatility of cash flows due to ongoing
integration and transaction expenses associated with each new deal.
Still, we expect Centerfield will benefit from good conversion of
EBITDA into cash flows due to its modest capital expenditures
(capex)."
The stable outlook reflects S&P's expectation that the company will
grow revenue and EBITDA organically over the next 12 months and
maintain adjusted leverage in the mid-5x area and FOCF to debt of
8%-10% through 2021.
S&P could lower the rating over the next year if FOCF to debt falls
below 5% and leverage increases well above 6x on a sustained basis
because:
-- Organic growth stalls due to a lack of new business partners or
the inability to increase or sustain wallet share with key clients;
or
-- Increased competition that drives down the profitability of
each customer acquired; or
-- Significant debt-financed acquisitions.
Although unlikely over the next 12 months, S&P could raise the
rating if the company:
-- Meaningfully increases its scale and diversity of customers and
end markets; and
-- Develops a record of maintaining adjusted leverage below 4.5x
with FOCF to debt consistently above 10%.
COMCAR INDUSTRIES: Bluewater Buying Low Value Assets for $9.5K
--------------------------------------------------------------
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 the low value assets described in the Bill
of Sale (Exhibit A) to Bluewater Technologies for $9,500, 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 Assets to the Purchaser.
The total selling price for the Sale to the Purchaser is $9,500,
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 Nov. 3, 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/yxqlseb4 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: Simpson Buying Low Value Assets for $1K
----------------------------------------------------------
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 the low value assets described in the Bill
of Sale (Exhibit A) to Bill Simpson for $1,000, 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 Assets to the Purchaser.
The total selling price for the Sale to the Purchaser is $1,000,
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 Nov. 3, 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/yyy8dqcb 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 Auctions Buying Low Value Assets 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 the low value assets described 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 Assets to the Purchaser.
The total selling price for the Sale to the Purchaser is $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 Nov. 3, 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/y2f4s878 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.
CONSOL ENERGY: S&P Rates $100MM Unsecured Revenue Bonds 'CCC'
-------------------------------------------------------------
S&P Global Ratings assigned its 'CCC' issue-level rating to
U.S.-based coal producer CONSOL Energy Inc.'s proposed $100 million
unsecured solid waste disposal revenue bonds due in 2050 issued by
the Pennsylvania Economic Development Financing Authority. S&P
expects CONSOL to use the proceeds from these bonds to finance a
waste disposal facilities project at its Bailey Preparation Plant.
S&P said, "Our 'B-' issuer credit rating and negative outlook on
CONSOL, as well as the 'B+' issue-level rating on its first-lien
debt, and 'CCC' issue-level rating on its second-lien debt are
unchanged. The negative outlook reflects our view that the
company's capital structure could become unsustainable in the long
term. Though we expect its credit measures to remain commensurate
with our rating over the next year--with leverage peaking at about
5x and interest coverage of more than 3x--it will likely remain
difficult for CONSOL to access the capital markets. Even as its
credit measures recover, investor sentiment may lag given the
long-term prospects for the sector, elevated environmental, social,
and governance (ESG) concerns, and the encroachment of alternative
renewable and gas energy sources."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- CONSOL's capital structure principally comprises the
contemplated $100 million solid waste disposal bonds due 2050, a
$100 million first-lien term loan A maturing in 2023 ($73 million
outstanding), a $275 million first-lien term loan B maturing in
2024 ($270 million outstanding), and $177 million in second-lien
notes due in 2025.
-- The company also has a $400 million cash flow revolver due in
2023 (undrawn) and a $100 million accounts receivable (A/R)
securitization facility maturing in 2023.
-- Finally, the company has $103 million in industrial revenue
bonds associated with its Baltimore marine terminal (jointly
guaranteed by CNX Resources) due in 2025.
-- S&P's recovery analysis contemplates a default associated with
a sustained, severe drop in seaborne metallurgical coal prices and
sharply lower demand for domestic thermal coal. This leads to
negative free cash flow generation and strains the company's
liquidity as it manages its interest and amortization payments
along with its capital spending requirements. In the face of the
limited prospects for a turnaround in the coal markets and its
limited access to the capital markets, the company would pursue
restructuring options ahead of its term loan's maturity.
-- S&P believes that in a default there would continue to be a
viable business model supported by the company's high-quality
reserve base and favorable cost profile relative to its peers in
the northern Appalachian coal basin. Therefore, S&P assumes a
reorganization of the company rather than a liquidation.
-- S&P estimates that about half of CONSOL's tax-adjusted
postretirement obligations materialize as priority claims and apply
5% of what remains toward restructuring administrative expenses.
-- S&P subtracts mandatory debt amortization through the default
year from the claims at default; however, the rating agency assumes
there would be no cash flow sweep repayments in this distressed
scenario.
-- S&P assumes the cash flow revolver would be about 65% drawn at
default and the account securitization facility would be about 70%
drawn, both limited by outstanding letters of credit.
Simulated default assumptions
-- Year of default: 2022
-- EBITDA at emergence: $175 million (which takes into account
S&P's expectations for fixed charges and maintenance capital
spending requirements)
-- Implied enterprise value multiple: 5x (in line with other rated
metals and mining companies)
-- Gross enterprise value: $875 million
Simplified waterfall
-- Net enterprise value (gross enterprise value, $875 million;
less postretirement obligations, $224 million; less restructuring
administrative expenses, $34 million): $617 million
-- Priority claims (A/R securitization, $72 million; other debt
including capitalized leases, $25 million): $97 million
-- Remaining value: $520 million
-- First-lien claims (revolving credit facility, $252 million;
term loan A, $45 million; term loan B, $276 million): $573 million
-- Recovery expectations: 90%-100% (rounded estimate: 90%)
-- Remaining value: None
-- Second-lien note claims(second-lien notes): $186 million
-- Recovery expectations: 0%-10% (rounded estimate: 0%)
-- Remaining value: None
-- Senior unsecured claims(solid waste disposal revenue bond):
$105 million
-- Recovery expectations: 0%-10% (rounded estimate: 0%)
Note: Debt claims includes approximately six months of accrued but
unpaid interest.
CONTINENTAL RESOURCES: S&P Rates New $1BB Unsecured Notes 'BB+'
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '3'
recovery rating to Oklahoma City-based oil and gas exploration and
production company Continental Resources Inc.'s new $1.0 billion
unsecured notes due 2031. The '3' recovery rating indicates S&P's
expectation for meaningful (50%-70%; rounded estimate: 65%)
recovery to creditors in the event of a payment default. The notes
will rank equally with the company's outstanding senior unsecured
notes and unsecured revolving credit facility.
The rating agency expects Continental to use the proceeds from this
issuance to fund a tender offer for up to $1.0 billion of its 5.0%
senior notes due 2022 ($1.1 billion outstanding) and 4.5% senior
notes due 2023 ($1.4 billion outstanding).
S&P's 'BB+' issuer credit rating and negative outlook on the
company are unchanged.
CONTURA ENERGY: Incurs $68.6 Million Net Loss in Third Quarter
--------------------------------------------------------------
Contura Energy, Inc., filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $68.64 million on $400.69 million of total revenues for the
three months ended Sept. 30, 2020, compared to a net loss of $68.53
million on $525.86 million of total revenues for the three months
ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $346.75 million on $1.28 billion of total revenues
compared to a net loss of $175.38 million on $1.79 billion of total
revenues for the nine months ended Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $1.92 billion in total
assets, $1.58 billion in total liabilities, and $342.96 million in
total stockholders' equity.
"Our third quarter results continued to highlight the discipline
and safe, strategic performance of our operations team as we
achieved the lowest full-quarter CAPP - Met cost per ton
performance since the formation of our company," said chairman and
chief executive officer, David Stetson. "As we introduce 2021
guidance, we expect our costs to remain very competitive at our
recent levels while we tackle the continued softness in the met
coal market and the many uncertainties facing the global
economies."
Liquidity and Capital Resources
"We continue to closely manage our cash priorities as prolonged
pandemic uncertainty has created additional softness in both
end-markets and pricing for our products. As such, we expect
fourth quarter capex to come in around $20 million, and we remain
focused on continuing the outstanding execution on costs that has
allowed us to weather adverse market circumstances," said Andy
Eidson, Contura's chief financial officer. "We continue to expect
to receive the accelerated AMT tax refund of $66 million in the
near term. Furthermore, we have filed an NOL carryback in which we
claimed approximately $70 million in additional tax refunds. The
claim is subject to an IRS audit and we hope to finalize the audit
during 2021. All of these items factor into the total liquidity
picture for the company, and our philosophy remains one of
strategic cash preservation as we close out an unprecedented year
and issue guidance and expectations for 2021."
Cash used by operating activities for the third quarter 2020 was
$5.9 million and capital expenditures for the third quarter were
$27.8 million. In the prior period, the cash provided by operating
activities was $79.0 million and capital expenditures were $41.5
million. Contura continues to anticipate that capital expenditures
for the full year 2020 will be in the range of $135 million to $140
million, with 2021 capital expenditures expected to be materially
lower in the range of $80 million to $100 million.
As of Sept. 30, 2020, Contura had $161.4 million in unrestricted
cash and $180.0 million in restricted cash, deposits and
investments. Total long-term debt, including the current portion
of long-term debt as of Sept. 30, 2020, was $597.5 million, down
approximately $31 million from the prior quarter. At the end of
the third quarter, the company had total liquidity of $161.4
million, including cash and cash equivalents of $161.4 million and
no remaining unused availability under the Asset-Based Revolving
Credit Facility (ABL). The future available capacity under the ABL
is subject to inventory and accounts receivable collateral
requirements and the achievement of certain financial ratios. As
of Sept. 30, 2020, the company had $18.4 million in borrowings and
$122.4 million in letters of credit outstanding under the
Asset-Based Revolving Credit Facility. In October, subsequent to
the quarter close, the company repaid $15.0 million of borrowed
principal under the ABL.
2021 Full-Year Guidance
The company is introducing 2021 guidance with coal shipments
guidance range of 20.4 million tons to 22.2 million tons, with CAPP
- Met segment volume expected to be between 13.5 million to 14.5
million tons with pure metallurgical coal shipments of 12.5 million
to 13.0 million tons and thermal shipments in this segment of 1.0
million to 1.5 million tons. CAPP - Thermal segment volume is
anticipated to be between 1.3 million tons to 1.7 million tons.
NAPP volumes are expected to be in the range of 5.6 million tons to
6.0 million tons.
For 2021, Contura has committed and priced approximately 34% of its
metallurgical coal within the CAPP - Met segment at an average
price of $86.41 per ton and 72% of thermal coal in the CAPP - Met
segment at an average expected price of $52.11 per ton. In the
CAPP - Thermal segment the company is 99% committed and priced at
an average price of $57.17 per ton and 100% committed and priced
for NAPP at an average price of $40.43 per ton.
The company expects its strong cost performance to continue in 2021
with CAPP - Met cost of coal sales per ton anticipated at a range
of $68.00 to $74.00. CAPP - Thermal is expected to be in the range
of $45.00 to $49.00 per ton and NAPP between $33.00 and $37.00 per
ton.
For 2021, the company expects its SG&A to be in the range of $45
million to $50 million, excluding non-recurring items and stock
compensation. In light of its decision to forgo certain capital
expenditures for NAPP, the Company's overall 2021 capital
expenditures guidance at a range of $80 million to $100 million is
near the maintenance capital level. Depreciation, depletion and
amortization is expected to be between $160 million and $175
million and cash interest expense in the range of $51 million and
$55 million.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1704715/000170471520000048/ctra-20200930.htm
About Contura Energy
Contura Energy (NYSE: CTRA) -- http://www.conturaenergy.com/-- is
a Tennessee-based coal supplier with affiliate mining operations
across major coal basins in Pennsylvania, Virginia and West
Virginia. With customers across the globe, high-quality reserves
and significant port capacity, Contura Energy reliably supplies
both metallurgical coal to produce steel and thermal coal to
generate power.
Contura Energy reported a net loss of $316.32 million for the year
ended Dec. 31, 2019. As of June 30, 2020, the Company had $2.04
billion in total assets, $1.63 billion in total liabilities, and
$409.41 million in total stockholders' equity.
* * *
As reported by the TCR on June 5, 2020, S&P Global Ratings lowered
its issuer credit rating on U.S.-based coal producer Contura Energy
Inc. to 'CCC+' from 'B-'. S&P expects earnings to deteriorate due
to continued weakness in coal markets further accelerated by the
COVID-19 pandemic.
In April 2020, Moody's Investors Service downgraded all long-term
ratings for Contura Energy, Inc., including the Corporate Family
Rating to Caa1 from B3. "Contura has idled the majority of its
mines due to weak market conditions. Moody's expects that demand
for metallurgical coal will weaken further in the near-term as
blast furnace steel producers adjust to reduced demand due to the
Coronavirus," said Ben Nelson, Moody's vice president -- senior
credit officer and lead analyst for Contura Energy, Inc. "The
rating action is entirely driven by macro-level concerns resulting
from the global outbreak of coronavirus."
CORNERSTONE PAVERS: Wants Plan Exclusivity Extended Thru Jan. 29
----------------------------------------------------------------
Cornerstone Pavers, LLC, and its affiliates request the U.S.
Bankruptcy Court for the Eastern District of Wisconsin to extend
the exclusive period during which the Debtors may obtain acceptance
for the reorganization plan from October 7, 2020, to January 29,
2021.
Since the petition date in February 2020, the Debtors have
continued operating their businesses and faced a lot of issues,
including:
(i) the claims against West Bend Mutual Insurance Company, one
of the Debtors' creditors;
(ii) the COVID-19 pandemic's effects on the jobs that were
available. In early May, the Wisconsin Department of Transportation
("WisDOT") "let" no jobs for bidding that fit the type of work done
by the Debtors. This affected the Debtors' usual business and hurt
the Debtors' ability to determine funds that would be available for
a plan of reorganization; and
(iii) the difficulties with suppliers due to chapter 11 filing.
This took an effort to resolve so that the Debtors could perform on
jobs. The Debtors have fully performed all jobs to which they had
contracts.
The Debtors' receivables are subject to interests of third parties
as trust funds under Wis. Stat. Sec. 779.16 and have honored the
obligations for trust funds since the petition cases. As funds were
collected from pre-petition receivables, they were paid to
creditors or held in separate accounts for the benefit of
creditors, including West Bend Mutual Insurance Company ("West
Bend"). The surety has paid creditors pending receipts by the
Debtors.
In addition, the Debtors have made progress on the issues that
contributed to the chapter 11 filing: the delay in receivables
being paid by WisDOT and others, and the costs incurred due to
AT&T's misrepresentation of its facilities and delay in moving its
facilities so construction work could be done. There have been
meetings with WisDOT and the issues have been defined, so a
decision is in process for resolution either by negotiation or
litigation. The Debtors have collected more than $500,000 of
pre-petition receivables and have filed an adversary proceeding
against AT&T.
The Debtors have had ongoing discussions with West Bend, which is
the largest creditor, and Community State Bank, the Debtors'
lender. Since there was insufficient time to conclude the
discussions, the Debtor requested an adjournment of the October 1
hearing and the Court set another hearing on the disclosure
statement for December 10, 2020.
The Debtors need more time to deal with issues and finalize
everything to exit chapter 11 as soon as possible. "Exiting chapter
11 will help obtain more jobs for the businesses," the Debtors
said.
A copy of the Debtor's Motion to Extend is available from
PacerMonitor.com at https://bit.ly/2HLrqte at no extra charge.
About Cornerstone Pavers
Cornerstone Pavers, LLC -- https://www.cornerstonepaversusa.com/ --
is a heavy and highway concrete paving company that has performed a
wide variety of concrete paving, patching, grading, sidewalk, and
curb & gutter work as a prime contractor and as a subcontractor
since its incorporation in 2005. The business' headquarters and
operations are located in Racine, Wisconsin.
Cornerstone Pavers filed a Chapter 11 petition (Bankr. E.D. Wis.
Case No. 20-20882) on February 4, 2020. On the Petition Date, the
Debtor was estimated to have between $1 million and $10 million in
both assets and liabilities. The petition was signed by
Christopher C. Cape, manager.
Judge Katherine M. Perhach oversees the case. The Debtor tapped
Kerkman & Dunn as counsel and T/A Appraisal, Inc., as an appraiser.
COSI INC: Court Extends Plan Exclusivity Thru December 21
---------------------------------------------------------
At the behest of Cosi Inc. and its affiliates, Judge Brendan L.
Shannon of the U.S. Bankruptcy Court for the District of Delaware,
extended the period in which the Debtors may file a chapter 11 plan
to December 21, 2020, and to solicit acceptances for a plan to
February 18, 2021.
Due to the unprecedented impact of the global COVID-19 pandemic,
the Debtors' bankruptcy cases have not progressed as the Debtors
had originally hoped. The Debtors' focus over the past few months
has been on survival, rather than the formulation of a plan of
reorganization because of the existential threat to the Debtors
(and the entire restaurant industry) posed by the pandemic.
When restrictions started to lift recently, the Debtors have
re-focused upon the development of a plan of reorganization to
emerge from these proceedings. The Debtors have had preliminary
discussions with several third parties to provide the necessary
support and funding and are presently engaged in serious
discussions with certain parties regarding the development of a
plan.
"Prior to the pandemic, we had made considerable progress in
streamlining and focusing our operations, including by greatly
reducing our portfolio of nonresidential real estate leases and the
overall cost structure of our business. And since the Petition
Date, we have been rejecting the leases for thirty-three
unprofitable locations and implemented other cost-cutting
initiatives to the best position for a successful reorganization."
the Debtors said.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/31zVQ8J at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/34nyHrS at no extra charge.
About Cosi Inc.
Cosi, Inc. -- https://www.getcosi.com/ -- and its affiliates
operate fast-casual restaurants under the COSI brand. COSI features
flatbread made fresh throughout the day and specializes in a
variety of made-to-order hot and cold sandwiches, salads, bowls,
breakfast wraps, bagels, melts, soups, flatbread pizzas, snacks,
desserts, and a large offering of handcrafted, coffee-based, and
specialty beverages.
Cosi, Inc. and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 20-10417) on Feb. 24, 2020. Cosi, Inc., was
estimated to have $10 million to $50 million in assets and
liabilities.
Judge Brendan L. Shannon is the case judge. The Debtors tapped
Cozen O'Connor as counsel. Omni Agent Solutions is the claims and
noticing agent.
CP ATLAS: Moody's Assigns 'B3' CFR & Rates First Lien Loans 'B2'
----------------------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating
(CFR) and B3-PD probability of default rating (PDR) to CP Atlas
Buyer, Inc. In addition, Moody's assigned a B2 rating to the
company's prospective senior secured first lien credit facilities,
including a $900 million term loan, $300 million delayed draw term
loan, and $125 million revolving credit facility. Finally, Moody's
also assigned a Caa2 rating to the company's prospective $335
million senior unsecured notes. The outlook is stable.
This transaction follows the announcement that American Bath Group,
LLC will be acquired by funds advised by Centerbridge Partners,
L.P. Proceeds from the new term loan and senior unsecured notes
issued by the newly formed entity, CP Atlas Buyer, Inc., together
with a $617 million cash contribution from the new equity sponsor,
will be used to acquire American Bath for $1.85 billion. The new
$125 million revolving credit facility and $300 million delayed
draw term loan will be undrawn at closing. American Bath's existing
debt of about $760 million will be repaid at closing.
When the financing transaction closes and all related debt
obligations are repaid, Moody's will withdraw all existing ratings
of American Bath Group, LLC, including the B3 CFR, B3-PD PDR, B2
senior secured first lien term loan rating and Caa2 senior secured
second lien term loan rating. Moody's will also withdraw American
Bath's stable outlook.
Assignments:
Issuer: CP Atlas Buyer, Inc.
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
$900 million Senior Secured First Lien Term Loan due 2027, Assigned
B2 (LGD3)
$300 million Delayed Draw Senior Secured First Lien Term Loan due
2027, Assigned B2 (LGD3)
$125 million Senior Secured First Lien Revolving Credit Facility
due 2025, Assigned B2 (LGD3)
$335 million Senior Unsecured Notes due 2028, Assigned Caa2 (LGD6)
Outlook Actions:
Issuer: CP Atlas Buyer, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
The B3 CFR considers CP Atlas Buyer's high debt leverage, which
will be 6.7x on a pro forma basis for the transaction as of
September 30, 2020, and is expected to decline to 6.4x by 2022.
Moody's expectations incorporate modest topline growth coupled with
margin expansion due to favorable fundamentals that support
investment in home improvement, which bolsters demand for bathware
products. Moody's expects the overall building products sector to
continue to benefit from a shift in consumers' discretionary
spending to home improvement over the next twelve months as many
employees continue to regularly work from home as a result of the
coronavirus pandemic. Furthermore, margin improvement considers
ongoing cost-saving measures, including reduced waste and scrap
material, lower prices from 2020 procurement initiatives and the
active management of freight costs. Moody's rating also considers
the highly discretionary nature of bathware and spa products, in
addition to customer concentration with big-box retailers that
exposes the company to sudden shifts in demand. Moody's
acknowledges that builders and contractors are key drivers of sales
through the company's channels.
CP Atlas Buyer's liquidity is expected to be good over the next 12
to 18 months and considers Moody's expectation of positive free
cash flow of approximately $60 million in both 2021 and 2022.
Liquidity is supported by the expectation of full availability
under the new $125 million revolver over Moody's forecast horizon.
The revolver is subject to a springing maximum first lien secured
leverage ratio of 7.75x that is tested when utilization rises above
35%, which Moody's does not expect the company to trigger over the
next 12-18 months. Alternative sources of liquidity are limited as
the majority of the company's assets are encumbered by secured
debt.
Governance considerations include Moody's expectations that CP
Atlas Buyer will maintain an aggressive financial policy that
favors shareholders over creditors. The company has historically
grown through debt-funded acquisitions and Moody's expects that
strategy to continue. Furthermore, given the private equity
ownership, Moody's expects the company to pay dividends, possibly
with additional debt, from time to time.
The B2 rating assigned to CP Atlas Buyer's first lien credit
facilities (term loans and revolver) is one notch higher than the
B3 CFR which reflects their senior position in the capital
structure relative to the unsecured notes (rated Caa2) and other
junior claims including trade payables and operating leases. The
Caa2 rating on the unsecured notes reflects their subordination to
a significant amount of secured debt and the expectation of
considerable loss of value in a distress scenario.
The stable outlook reflects Moody's expectation of stable demand
within the repair and remodel segment, which represents
approximately 45% of CP Atlas Buyer's revenues, as well as
maintenance of good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if CP Atlas Buyer operates with
adjusted debt-to-EBITDA consistently below 5.5x, adjusted
EBITA-to-interest consistently above 2.0x and adjusted free cash
flow to debt consistently above 5.0%.
The ratings could be downgraded if the company's adjusted
debt-to-EBITDA is sustained above 6.5x, adjusted EBITA-to-interest
falls below 1.0x, or the company experiences a deterioration in
liquidity likely as a result of its aggressive financial policy.
The principal methodology used in these ratings was Manufacturing
Methodology published in March 2020.
CP Atlas Buyer, Inc. is a major U.S. and Canadian manufacturer and
distributor of bathware constructed from gelcoat, sheet molded
compound, porcelain on steel, acrylic, and solid surface. The
company also manufactures shower doors and shower wall panels. For
the 12 months ended Sept. 30, 2020, the company generated
approximately $873 million in revenue, which is pro forma for the
IMI and Florestone acquisitions.
CRED INC: Opens Chapter 11 With Issuance of Creditor Notices
------------------------------------------------------------
Law360 reports that cryptocurrency company Cred Inc. sought
permission Tuesday from a Delaware bankruptcy judge to provide
notice of developments in the Chapter 11 case via email, saying its
thousands of customers are spread across the globe.
During a first-day hearing before U.S. Bankruptcy Judge John T.
Dorsey, attorneys for the debtor said that with 6,500 customers
living in more than 140 countries, being able to provide notices of
filings in the case via email would be the most efficient method of
communicating with stakeholders. Judge Dorsey said the situation
was a bit more complex than usual.
About CRED Inc.
Cred Inc. is a cryptocurrency platform that accepts loans of
cryptocurrency from non-U.S. persons and pays interest on those
loans. Cred -- https://mycred.io -- is a global financial services
platform serving customers in over 100 countries. Cred is a
licensed lender and allows some borrowers to earn a yield on
cryptocurrency pledged as collateral.
Cred Inc. and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 20-12836) on Nov. 7, 2020.
Cred was estimated to have assets of $50 million to $100 million
and liabilities of $100 million to $500 million as of the
bankruptcy filing.
The Debtors tapped PAUL HASTINGS LLP as counsel; COUSINS LAW LLC as
local counsel; and MACCO RESTRUCTURING GROUP, LLC, as financial
advisor. DONLIN, RECANO & COMPANY, INC., is the claims agent.
DENNY'S CORP: Egan-Jones Cuts Sr. Unsec. Debt Ratings to B
----------------------------------------------------------
Egan-Jones Ratings Company, on November 2, 2020, downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Denny's Corporation to B from BB-. EJR also
downgraded the rating on LC commercial paper issued by the Company
to B from A3.
Headquartered in Spartanburg, South Carolina, Denny's Corporation
operates as a full-service family restaurant chain directly and
through franchises.
DESTINY SPRINGS: Court Confirms Reorganization Plan
---------------------------------------------------
Destiny Springs Healthcare, LLC, recently won an order confirming
its Chapter 11 plan.
In September, the Court entered an order approving the Disclosure
Statement of Destiny Springs.
Following a hearing on Nov. 3, 2020, Judge Madeleine C. Wanslee
approved the Debtor's Plan of Reorganization dated July 13, 2020.
The Court found that the insider contribution to be provided by
Vidushi Soni M.D., LLC on the Effective Date is (i) new; (ii)
substantial; (iii) money or money's worth; (iv) necessary for
Debtor's successful reorganization; and (v) reasonably equivalent
to the interest being acquired.
The State of Arizona ex rel. Arizona Department of Revenue filed
its Objection to Confirmation of Debtor's Plan of Reorganization
Dated July 13, 2020 [DE 282]. An agreement was reached with the
Department. The Department filed a proof of claim no. 18 and
amended it several times. The Department will file its final
amended proof of claim on or before Nov. 20, 2020. The Debtor will
submit its TPT return for the quarter ending December 31, 2018, on
or before November 13, 2020. Assuming the Debtor agrees with
the Department's calculations, it will pay the Department's
administrative expense and priority claims on or before the
Effective Date of the Plan.
Surprise BH Hospital Partners, LLC filed a Reservation of Rights
with respect to the Plan. The Debtor sought to assume the lease of
non-residential real property dated October 7, 2016 between Debtor
and Surprise BH. The Debtor and Surprise BH later entered into
stipulation, which sets forth the terms upon which the Lease shall
be assumed.
Aetna, Inc. lodged an informal objection to the Plan with Debtor's
counsel related to its status as a priority creditor pursuant to
Section 507(a)(5). The objection was resolved via a stipulation.
Classes 1, 2, 4, and 5 accepted the Plan.
Class 1 is comprised of all Allowed General Unsecured Claims that
(i) are $1,000.00 or less, and (ii) the holders of any Allowed
General Unsecured Claim in excess of $1,000 that elected to reduce
its claim to $1,000.00. There were two Claims in Class 1 that voted
on the Plan.
Class 2 is comprised of the Allowed Claim of Surprise BH Hospital
Partners, LLC (the "Landlord"), pursuant to the Lease. Class 2
voted to accept the plan.
Class 3 is comprised of the asserted Secured Claim of Siemens
Financial Services Inc. Siemens filed a secured claim in the amount
of $26,738,972.73. The Debtor disputes it owes anything on account
of Siemens' Class 3 claim. Siemens Financial Services is deemed to
reject the Plan. 17.
There were five claimants in Class 4 that voted to accept the Plan,
and zero claimants that voted to reject the Plan.
Class 5 is comprised of all Allowed unsecured Claims of insiders.
One Class 5 claimant voted to accept the Plan.
Class 6 is comprised of the Allowed Interests in the Debtor as of
the Petition Date. 100% of the Allowed Interests are held by
Destiny Healthcare Partners, LLC. The Plan provides that on the
Effective Date, all existing equity interests in the Debtor shall
be cancelled and new interests shall be issued to Vidushi Soni,
M.D., LLC in exchange for the Insider Contribution.
A copy of the Plan Confirmation Order dated Nov. 4, 2020, is
available at:
https://www.pacermonitor.com/view/OW5C5AA/Destiny_Springs_Healthcare_LLC__azbke-19-15702__0291.0.pdf?mcid=tGE4TAMA
About Destiny Springs Healthcare
Destiny Springs Healthcare, LLC owns and operates a 90-bed,
67,566-square-foot behavioral healthcare facility located at 17300
N. Dysart Road in Surprise, Ariz. The facility provides both
inpatient and outpatient treatment for adolescents, adults and
geriatric patients.
Destiny Springs Healthcare filed for Chapter 11 bankruptcy
protection (Bankr. D. Ariz. Case No. 19-15702) on Dec. 15, 2019. In
the petition signed by Dr. Martin Newman, M.D., president, Debtor
was estimated to have $1 million to $10 million in both assets and
liabilities. Judge Madeleine C. Wanslee oversees the case.
Grant L. Cartwright, Esq., at May, Potenza, Baran, & Gillespie,
P.C., serves as Debtor's legal counsel.
Susan N. Goodman has been appointed as patient care ombudsman.
DIVERSEY: Moody's Affirms B3 CFR; Alters Outlook to Stable
----------------------------------------------------------
Moody's Investors Service affirmed the Corporate Family Rating
(CFR) of Diamond (BC) B.V. (Diversey) at B3, but changed the
outlook to stable from negative. Other ratings affirmed include the
B1 rating on the first lien term loans and the revolving credit
facility, the Caa2 on the senior unsecured notes due 2025 and the
Probability of Default rating at B3-PD. The change in outlook to
stable reflects the improving EBITDA trend in recent quarters and
improved outlook arising from management actions as well as COVID
related tailwinds and new business opportunities.
"The stable outlook also reflects improved free cash flow through
both improved earnings and reduced collective cash usage for
transitioning to freestanding status following the separation from
Sealed Air, and the reduction in other cash usage for
restructuring, new business wins and net acquisition costs,"
according to Joseph Princiotta, SVP at Moody's and lead analyst for
Diversey. "The stable outlook also reflects the expectation of
positive free cash flow in the second half of the year and for the
full year as well," Princiotta added.
Affirmations:
Issuer: Diamond (BC) B.V.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Gtd. Senior Secured Revolving Credit Facility, affirmed B1 (LGD3)
Gtd. Senior Secured 1st Lien Term Loan, affirmed B1 (LGD3)
Gtd. Senior Unsecured Regular Bond/Debenture, Affirmed Caa2 (LGD5)
Outlook Actions:
Issuer: Diamond (BC) B.V.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The stable outlook reflects the significant improvement in EBITDA
in the last few quarters on a year over year basis, and on a
run-rate basis these quarters would yield full year EBITDA that
would allow for elimination of the cash burn and restoration of
positive free cash flow, albeit still of only modest amounts.
Working capital management is also key to the FCF performance, in
Moody's opinion, given the historical volatility as well as
expected organic growth. In addition to the EBITDA growth, cash
usage for items that were previously very significant in 2018 and
2019 has declined and supports free cash flow going forward. This
includes cash usage for transition and transformation costs, dosing
and dispensing equipment associated with new contract wins, and
cash for restructuring and net acquisitions costs.
Metrics have trended in the right direction owing to EBITDA growth,
while it's likely that free cash flow in the second half and the
full year will revert to positive, removing the key factor that
warranted the previous negative outlook. Gross adjusted leverage
peaked at 8.4x in 2Q19 and improved to 6.7x in 2Q20. Moody's
projects YE gross adjusted leverage in the low-to-mid 6.0x range
and has the potential to improve further in 2021 on EBITDA growth,
with the pace of metric improvement longer term depending on
whether FCF is used for debt reduction.
Despite these improvements, current weaknesses in Diversey's credit
profile include high leverage, notwithstanding the favorable trend,
and still challenged free cash flow, although FCF is expected to
revert to positive in 2020 with a favorable outlook. Other key
risks include a fragmented and competitive market and exposure to
foreign exchange movements given that over 75% of its revenues are
generated outside the U.S. Diversey expects to deleverage through
EBITDA expansion; once leverage improves, Diversey is expected to
remain financially aggressive, focusing on new business wins and
food service growth, both of which require investment, and small
tuck-in acquisitions.
The rating is supported by the company's exposure to stable and
faster-growing end markets, industry-leading positions, a global
footprint, low customer concentration and long-standing customer
relationships. Liquidity is good with the availability under its
$250 million revolver mostly restored following the recent $150
million TL add-on that reduced revolver usage.
With hospitality and food service end markets accounting for about
25% of revenues on a pre-pandemic basis, the pandemic poses a
significant headwind to Diversey's sales and profits in these
markets. However, the pandemic introduced tailwinds to Diversey's
P&L as well, including opportunities in a number of cleaning and
sanitizing product categories including wipes, bulk cleaners, hand
care and alcohol-related products, all of which has helped offset
headwinds caused by the pandemic beyond the first quarter.
Environmental, social, and governance considerations are relevant
to the credit profile but not key drivers of the action or the
ratings at this time. Environmental and social factors are viewed
as favorable given the importance and positioning of cleaning
products and services in the portfolio. In addition, as economies
continue to re-open Moody's expects healthy demand for cleaning
products and services sold to consumer facing businesses and office
and manufacturing buildings. Governance factors pose a meaningful
risk to the profile, as the private equity owners may choose to
limit debt reduction, re-leverage to pay dividends, or seek M&A
activity to support aggressive growth targets.
Diversey's liquidity is considered good due to the $172 million in
cash balance at June 30, 2020 and the improved headroom under the
committed revolver facility restored following the recent $150
million TL add-on that was used to reduce revolver usage. As of
June 30, 2020, the $250 million committed revolver facility was
undrawn with about $9 million LC usage leaving over $240 million
availability. The revolver has a springing first lien net leverage
test of 7.5x when the use of the revolver is more than 35% of the
total revolving commitment. The company is expected to remain in
compliance with the covenant over the next four quarters.
The first half of the year is generally a significant working
capital cash use period; the second half of the year working
capital tends to be a source of cash. The company is expected to
generate free cash flow in the second half and for the full year
but to rely on the revolver time to time for organic growth and
working capital as well as for general corporate purposes. Most
assets are encumbered under the secured facilities leaving little
in the way of alternate liquidity.
The stable outlook reflects the improving EBITDA trend in recent
quarters and improved outlook arising from management actions as
well as COVID related tailwinds and new business opportunities. The
stable outlook also reflects improved free cash flow through both
improved earnings growth, cost reduction actions and reduced
collective cash usage on T&T, D&D, restructuring, new business and
acquisition activity, and the resulting restoration of expected
positive free cash flow in the second half of the year and for the
full year as well.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would consider a positive rating action if positive free
cash flow is restored to comfortable levels, expected to be
sustainable and used to reduce debt; or if gross adjusted leverage
improves below 5.5x on a sustainable basis along with a favorable
trajectory; and liquidity remains adequate.
The ratings could be downgraded if the direction of performance and
free cash flow is not positive and indicates the company will
continue to exceed some or all of its previous downgrade triggers
-- leverage sustained above 6.0x, negative free cash flow on a
sustained basis, EBITDA to interest expense below 2.0 times and
funds from operations to debt below 6.0%.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
Headquartered in Fort Mill, South Carolina, Diversey is a global
supplier of cleaning, hygiene, sanitizing products, equipment and
related services to the institutional and industrial cleaning and
sanitation markets. The company generated approximately $2.6
billion of sales in 2019. Diversey is a portfolio company of Bain
Capital.
ECTOR COUNTY HOSPITAL: Fitch Withdraws BB Issuer Default Rating
---------------------------------------------------------------
Fitch Ratings has withdrawn the following Issuer Default Rating
(IDR) as it is no longer considered by Fitch to be relevant to the
agency's coverage:
-- Ector County Hospital District (TX) IDR. Previous Rating:
'BB'/Rating Watch Negative.
Following the withdrawal of Ector County Hospital District's
ratings, Fitch will no longer be providing the associated ESG
Relevance Scores for the issuer.
IDR is no longer considered by Fitch to be relevant to the agency's
coverage.
ENGUITY TECHNOLOGY: Court Confims Chapter 11 Plan
-------------------------------------------------
Enguity Technology Corp. won an order confirming the Plan of
Enguity Technology Corp.
The Court in September granted preliminary approval of the
Disclosure Statement and set an Oct. 22 hearing to consider
confirmation of the Plan. At the the Oct. 22 hearing, the Court
approved the Disclosure Statement on a final basis. In addition,
the Court granted the Debtor's motion for cram-down on the impaired
classes that did not vote to accept the Plan, and the Court
announced that the Plan would be confirmed.
On Nov. 6, 2020, Judge Karen K. Specie entered an order confirming
the Debtor's Plan. She ruled that:
* The Debtor shall file all quarterly reports and pay all
outstanding United States Trustee fees before the entry of an order
closing this Estate.3.
* All secured creditors shall retain their pre-petition lien
rights as modified by the Plan, post confirmation.
* A resolution has been reached on Uniti Fiber, LLC's Class 6
claim, and it shall be treated as follows:
a. The executory contract between the Debtor and Uniti is
deemed rejected.
b. The Debtor will pay Uniti its allowed administrative
claim in the amount of $9,920.50 in full within 30 days of the
Effective Date. Upon timely payment of this amount, the Debtor
shall have no further obligation to Uniti under the Plan and the
Plan Confirmation Order.
c. Uniti shall not be obligated to reconnect services
previously provided to the Debtor.
d. In the event Uniti is not paid the above administrative
claim amount in full within 30 days of the Effective Date, it
shall have an allowed unsecured claim in the amount of $158,488.
* Any prepetition or postpetition claims that any party may have
against the Debtor will be extinguished upon the Effective Date,
except as provided for in the Plan and this Order, or as otherwise
approved by the Court.
* Upon the Effective Date, the executory contracts with the
creditors in Classes 2, 3, 4, and 5 shall be considered assumed,
and the Debtor shall pay the arrearages in accordance with the Plan
for Classes 2 and 3. For Classes 4 and 5, no arrearages are owed
since no claims were filed and the contracts with those creditors
shall be deemed current on the Effective Date.
A copy of the Plan Confirmation Order is available at:
https://www.pacermonitor.com/view/ZU2IPOQ/Enguity_Technology_Corp__flnbke-19-40473__0097.0.pdf
About Enguity Technology
Enguity Technology Corp. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Fla. Case No. 19-40473) on Sept. 6,
2019. At the time of the filing, the Debtor was estimated to have
assets of less than $50,000 and liabilities of less than $100,000.
The Debtor is represented by Bruner Wright, P.A.
EQM MIDSTREAM: S&P Affirms 'BB-' ICR; Outlook Stable
----------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating on EQM
Midstream Partners L.P. and its 'BB-' issue-level rating on its
senior unsecured debt. S&P's '3' recovery rating (rounded estimate:
50%) on this debt remains unchanged.
S&P said, "We believe EQM's announcement of an increase in the
estimated total cost for the MVP project and a delay in the
project's in-service date to the latter half of 2021 indicates the
company's credit metrics will be stressed and execution risks will
be elevated over the next 12 months. We now assume a conservative
in-service date for the MVP of around year-end 2021, which leads us
to expect that the company's leverage will remain above 5.5x over
the next 12 months. The financial impact of the delay is mitigated
by its gas gathering agreement with EQT, given that rate relief to
the upstream customer is also delayed until the project is in
service. The completion of the MVP project is a significant
milestone in our deleveraging expectations because we anticipate
EQM's leverage will fall below 5x once it places the pipeline in
service and finances it at the project level. EQM's share of the
estimated cost increase will likely be more than $100 million,
which will further stress its forward credit metrics. While the
construction on the pipeline is just above 90% complete, the
continued legal challenges and regulatory obstacles indicate that
the exact operational date and final cost estimate will remain
difficult to ascertain while construction continues."
"We would likely review our rating on the company if the pipeline
approached completion and we had greater confidence in the
in-service date. At the same time, further delays and cost overruns
could negatively affect our view of the rating."
"We upgraded EQT Corp., EQM's largest customer, to 'BB' with a
stable outlook. The company derives about 70% of its revenue from
its business relationship with EQT. Therefore, we now view EQM's
counterparty risk as incrementally improved. Our rating on EQT will
continue to place a ceiling on our rating on the company unless EQM
diversifies its customer base. While this is credit positive, we
believe the risks associated with the MVP outweigh the improvement
in its counterparty risk."
"EQM is in arbitration with EQT over the ownership of the
Hammerhead pipeline. While this is not currently a major rating
factor, any signs of further stress in this important customer
relationship or a materially negative outcome could prompt us to
review our rating."
"We expect EQM's full-year 2020 EBITDA and discretionary cash flows
to outperform our prior expectations. We expect the company's cash
flows to improve this year following its announcement that it will
shift capital related to MVP into 2021 from 2020. We expect EQM's
EBITDA to slightly decrease next year given its fairly stable
volumes and lower gathering rates. We also expect its cash flows
and credit metrics to be stressed in 2021 given the elevated
capital spending necessary to complete the MVP. However, we expect
distributions from MVP to help EQM deleverage once that asset is
operational."
"The stable outlook on EQM reflects our view that its operating
cash flows will decline slightly in 2021, but volumes on its gas
transportation and gathering systems will generally remain stable.
Under our base-case scenario, we expect the MVP to become
operational around year-end 2021 and lead the company's leverage
and execution risk to be elevated over the next 12 months. We also
anticipate EQM's S&P-adjusted leverage will remain above 5.5x while
MVP remains under construction before decreasing below 5.0x when
the pipeline commences operations and obtains financing at the
asset level."
"While unlikely at this time, we would take a negative rating
action on EQM if we believe its leverage will remain above 5.5x
over the long term. This would likely occur if MVP is materially
delayed or if the company announces material estimated cost
increases for the project. We could also lower our rating if the
natural gas markets become stressed, which could lead to lower
volumes on its system and/or increased counterparty stress."
"We could consider taking a positive rating action on EQM if we
think it will be able to deleverage such that its S&P-adjusted debt
to EBITDA remains sustainably below 5x in our forecast. This would
most likely occur if we gain greater confidence that the
construction of the MVP project will be completed without material
cost increases or further delays. This is largely dependent on the
resolution of the regulatory and legal hurdles that are currently
plaguing the project and material construction progress."
EVOKE PHARMA: Incurs $2.1 Million Net Loss in Third Quarter
-----------------------------------------------------------
Evoke Pharma, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $2.13 million for the three months ended Sept. 30, 2020,
compared to a net loss of $1.63 million for the three months ended
Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $10.89 million compared to a net loss of $5.71 million
for the same period during the prior year.
As of Sept. 30, 2020, the Company had $6.75 million in total
assets, $8.67 million in total liabilities, and a total
stockholders' deficit of $1.92 million.
Research and development expenses totaled approximately $0.2
million for the third quarter of 2020, compared to approximately
$0.8 million for the third quarter of 2019. The decrease during
the three months ended Sept. 30, 2020 was primarily due to the
decrease in research and development activity following the GIMOTI
NDA approval in June 2020.
For the third quarter of 2020, general and administrative expenses
were approximately $1.9 million compared to approximately $0.8
million for the third quarter of 2019. The increase during the
three months ended Sept. 30, 2020 was primarily due to increased
costs associated with its commercialization and selling activities.
Of the costs incurred during the third quarter of 2020,
approximately $745,000 were related to commercialization
activities.
Total operating expenses for the third quarter of 2020 were
approximately $2.1 million, compared to total operating expenses of
approximately $1.6 million for the third quarter of 2019.
As of Sept. 30, 2020, the Company's cash and cash equivalents were
approximately $6.3 million. The Company expects that its current
cash balance will be sufficient to support operations into the
second quarter of 2021, without consideration of potential future
GIMOTI revenue.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1403708/000156459020052754/evok-10q_20200930.htm
About Evoke Pharma
Headquartered in Solana Beach, California, Evoke --
http://www.evokepharma.com-- is a specialty pharmaceutical company
focused primarily on the development of drugs to treat GI disorders
and diseases. The Company is developing Gimoti, a nasal spray
formulation of metoclopramide, for the relief of symptoms
associated with acute and recurrent diabetic gastroparesis in adult
women.
Evoke Pharma recorded a net loss of $7.13 million for the year
ended Dec. 31, 2019, compared to a net loss of $7.57 million for
the year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$8.27 million in total assets, $8.64 million in total liabilities,
and a total stockholders' deficit of $373,676.
BDO USA, LLP, in San Diego, California, the Company's auditor since
2014, issued a "going concern" qualification in its report dated
March 12, 2020, citing that the Company has suffered recurring
losses from operations and has not generated revenues or positive
cash flows from operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern.
EXIDE HOLDINGS: Plan Exclusivity Extended Thru January 2021
-----------------------------------------------------------
At the behest of Exide Holdings, Inc. and its affiliates, Judge
Christopher S. Sontchi of the U.S. Bankruptcy Court for District of
Delaware extended the period in which the Debtors may file a
chapter 11 plan through and including January 14, 2021, and to
solicit acceptances for a plan through and including March 15,
2021.
The Debtors commenced these chapter 11 cases to implement a sale of
substantially all of their assets in an effort to maximize
recoveries for all creditors and preserve as many jobs as possible.
In the short span of approximately four months, the Debtors have
successfully completed their court-approved post-petition sale and
marketing process pursuant to the Bidding Procedures Order.
The Debtors are in the process of soliciting votes with respect to
the Plan, following which the Debtors will seek approval of:
(i) the Europe/ROW Sale Transaction;
(ii) the Global Settlement (subject to any amendments or
modifications that may be necessary as a result of the approval
process being undertaken by the Settling Governmental Authorities);
and
(iii) various releases or covenants not to sue among the parties
to the Global Settlement, as well as certain consensual and
non-consensual third party releases with respect to the Consenting
Creditors and Transferred Entities in exchange for their
substantial contributions to the chapter 11 cases.
The Europe/ROW Stalking Horse Credit Bid and the Americas Stalking
Horse Bid were both subject to higher or better offers in
accordance with the Bidding Procedures Order. Following the
Americas Stalking Horse Bidder Designation Notice, the Debtors
received three bids by the applicable bid deadline, including the
bid submitted by Battery BidCo LLC (the "U.S. Buyer") for
substantially all of the Debtors' Americas Assets. The Debtors did
not receive any additional bids for the Europe/ROW Assets.
The exclusivity extension gives the Debtors an opportunity to
complete the chapter 11 process by soliciting acceptances and
seeking timely confirmation of the Plan. The additional time will
also be used for other matters the Debtors need to deal with for
the progress of their chapter 11 cases.
A copy of the Debtor's Motion to extend is available from
primeclerk.com at https://bit.ly/3iVcMwg at no extra charge.
A copy of the Court's Extension Order is available from
primeclerk.com at https://bit.ly/352r8Gg at no extra charge.
About Exide Holdings
Founded in 1888 and headquartered in Milton, Ga., Exide Holdings,
Inc. -- https://www.exide.com/ -- is a stored electrical energy
solutions company and a producer and recycler of lead-acid
batteries. Across the globe, Exide batteries power cars, boats,
heavy-duty vehicles, golf carts, power sports, and lawn and garden
applications. Its network power solutions deliver energy to vast
telecommunication networks in need of an uninterrupted power
supply.
Exide Technologies first sought Chapter 11 protection (Bankr. Del.
Case No. 02-11125) on April 14, 2002, and exited bankruptcy two
years after. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq.,
at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang
Ziehl & Jones LLP, represented the Debtors in their successful
restructuring.
Exide returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No.
13-11482) on June 10, 2013, and emerged from bankruptcy in 2015. In
the 2013 case, Exide tapped Skadden, Arps, Slate, Meagher & Flom
LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez &
Marsal as financial advisor; Sitrick and Company Inc. as public
relations consultant. The Official Creditors Committee retained
Lowenstein Sandler LLP and Morris, Nichols, Arsht & Tunnell LLP as
co-counsel, and Zolfo Cooper, LLC served as its bankruptcy
consultants and financial advisors.
Exide Holdings and its affiliates, including Exide Technologies
LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
20-11157) on May 19, 2020. Exide Holdings was estimated to have
$500 million to $1 billion in assets and $1 billion to $10 billion
in liabilities.
In the newest Chapter 11 case, Weil, Gotshal & Manges LLP is
serving as legal counsel to Exide, Houlihan Lokey is serving as
investment banker, and Ankura is serving as financial advisor.
Richards, Layton & Finger, P.A., is the local counsel. Prime Clerk
LLC is the claims agent, maintaining the page
https://cases.primeclerk.com/Exide2020/.
FITZ LAW GROUP: Unsecured Creditors to be Paid in Full Over 5 Years
-------------------------------------------------------------------
The Fitz Law Group, LLC filed the Second Amended Disclosure
Statement and Second Amended Plan dated September 17, 2020.
The managing member, Nicholas P. Fitz, is the Debtor in the related
case 20-3792. The Plan in 20-3792 providing for 100% payment of the
same debt to The Cadle Company which is The Fitz Law Group, LLC's
only creditor.
Class 2 Non-Priority unsecured claim is impaired because the
unsecured creditors will be paid over a period of 5 yrs. The Debtor
will pay a total of $292,849.98 plus 3% interest per annum which is
the total balance owed to this class. Debtor's business has
recovered while in Bankruptcy. Debtor's cash flow reports and cash
flow projections indicate that he can make the payment of 100% with
loans from his exempt retirement accounts if necessary.
The debtor has only one member, Nicholas P. Fitz to whom it owes
nothing.
The debtor has done its best to anticipate its growth as it moves
through the second quarter of 2020 and into the third quarter. The
Plan proponent's financial projections show that the Debtor will
have an aggregate annual average cash flow, after paying operating
expenses and post confirmation taxes of $60,000.00. The final Plan
payment is expected to be paid in September of 2027.
This Plan of Reorganization under Chapter 11 of the Bankruptcy Code
proposes to pay creditors of The Fitz Law Group, LLC from a loan
and his future income.
A full-text copy of the Second Amended Disclosure Statement and
Plan dated September 17, 2020, is available at
https://tinyurl.com/y2u3m258 from PacerMonitor at no charge.
The Debtor is represented by:
Paul C. Sheils, Esq.
Paul C. Sheils Attorney at Law
15 Salt Creek Lane, Suite 122
Hinsdale, IL 60521
Telephone: (630) 655-1204
Email: attorney@paulsheils.com
About The Fitz Law Group
The Fitz Law Group, LLC, filed a Chapter 11 petition (Bankr. N.D.
Ill. Case No. 20-07513) on March 16, 2020. Paul C. Sheils Attorney
at Law serves as the Debtor's legal counsel.
GARRETT MOTION: Honeywell Raises Stake to 2.42-Mil. Shares
----------------------------------------------------------
John Downey of Charlotte Business Journal reports that Honeywell
International Inc. has accelerated purchases of stock in a former
subsidiary, spending more than $7.3 million over three business
days for almost 1.95 million shares of Garrett Motion Inc.
That brings Honeywell's stake to almost 2.42 million shares,
comprising about 3.2% of outstanding shares of the Swiss-based
company that is now in Chapter 11 bankruptcy protection.
A filing with the U.S. Securities and Exchange Commission describes
Honeywell's purchase of 1.7 million shares on Oct. 29 for an
average price of $3.75 each, 117,398 shares on Oct. 30, 2020 for an
average $3.79 and 130,951 shares on Nov. 2 for an average $3.91.
Charlotte-based Honeywell (NYSE: HON) spun off Garrett as a
publicly traded company in 2018. Shares were distributed to current
Honeywell shareholders, and auto supplier Garrett signed an
agreement to reimburse Honeywell for almost all of nearly $1.4
billion in asbestos liability. The liability came from a period
when Honeywell's Bendix brake division used asbestos in
manufacturing. The brake division is now part of Garrett, although
the spinoff has not used asbestos in its brakes.
Garrett filed for Chapter 11 bankruptcy protection Sept. 20, 2020
with a plan to emerge by selling the company to KPS Capital
Partners for $2.1 billion — an offer that later increased to $2.6
billion. That plan would leave Honeywell the only impaired
creditor.
On Oct. 20, Honeywell joined significant Garrett shareholders
Centerbridge Partners, Oaktree Capital Management and others in
proposing to recapitalize Garrett with $250 million in
debtor-in-possession credit and the sale of $1.15 billion in Series
A preferred stock.
The filing notes that Honeywell could be considered a member of a
group that owns 10% of all Garrett shares because of that
agreement. Honeywell "disclaims beneficial ownership of any
securities reported by any other person," but acknowledges that it
"may be a member of a 10% group" for filing purposes.
Honeywell says it has an interest in protecting the current Garrett
shareholders — many of whom could well be Honeywell shareholders.
It has claimed in filings that its purchase was for investment
purposes and to demonstrate that it is aligned with the interest of
current shareholders. It has said it could purchase as much as
4.75% of Garrett altogether.
The alternative proposal has another benefit for Honeywell. The
partners have agreed on a schedule for paying Honeywell for the
asbestos liability over an 11-year period. The plan would call for
Garrett to pay $275 million in 2022 and then $1.175 billion more in
installments through 2033.
The purchases seem designed to increase Honeywell's credibility in
the bankruptcy court. They appear to demonstrate that its interests
are broader than just getting the asbestos payments.
A company spokeswoman said last week that "Honeywell believes in
the long-term value of Garrett's business and remains focused …
on finding the best path for Garrett to emerge from Chapter 11
while preserving maximum value for all stakeholders."
Honeywell bought its first shares of Garrett on Oct. 21. From that
date through Oct. 28, 2020, it spent $1.64 million to buy 467,200
shares. Through the most recent filing, Honeywell has paid more
than $8.9 million to build its current stake.
About Garrett Motion
Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs,
manufactures and sells highly engineered turbocharger and
electric-boosting technologies for light and commercial vehicle
original equipment manufacturers ("OEMs") and the global vehicle
and independent aftermarket.
Garrett Motion and its affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 20-12212) on Sept. 20, 2020.
Garrett disclosed $2,066,000,000 in assets and $4,169,000,000 in
liabilities as of June 30, 2020.
The Debtors tapped Sullivan & Cromwell LLP as counsel, Quinn
Emanuel Urquhart & Sullivan LLP as co-counsel, Perella Weinberg
Partners and Morgan Stanley & Co. LLC as investment bankers, and
AlixpartnersLP as restructuring advisor. Kurtzman Carson
Consultants LLC is the claims agent.
The U.S. Trustee for Region Region 2 on Oct. 5, 2020, appointed a
committee to represent unsecured creditors in the Chapter 11 case.
GENCANNA GLOBAL: Wins Confirmation of Amended Liquidation Plan
--------------------------------------------------------------
OGGUSA, Inc., f/k/a GenCanna Global USA, Inc., has won confirmation
of its Chapter 11 bankruptcy-exit plan.
The Honorable Gregory R. Schaaf entered his Findings of Fact,
Conclusions of Law and Order Approving and Confirming the Debtors'
Second Amended Joint Plan of Liquidation (with Modifications) on
November 12, 2020. A hearing to confirm the Plan was scheduled
for October 28, 2020.
As reported by the Troubled Company Reporter, the Plan provides
that Class 4 Allowed Unsecured Claims in the amount of $112.8
million to $154 million will have a projected recovery of 0.35% to
3.29% in the Plan. Except to the extent that a Holder of an Allowed
General Unsecured Claim agrees to less favorable treatment, in full
and final satisfaction, compromise, settlement, and release of and
in exchange for such Allowed General Unsecured Claim, each Holder
of an Allowed General Unsecured Claim shall receive on account of
such Allowed Unsecured Claim against a Debtor, its Ratable Share of
Senior Beneficial Interests in the Wind-Down Trust. Class 4 is
Impaired under the Plan. Holders of Allowed General Unsecured
Claims are entitled to vote to accept or reject the Plan.
Judge Schaaf previously extended the period in which the Debtors
may file a chapter 11 plan through and including November 18, 2020,
and to solicit acceptances for a plan through January 16, 2021.
Within four months of the commencement of the Chapter 11 Cases, the
Debtors, among other things:
(i) obtained entry of an order authorizing their use of cash
collateral;
(ii) maintained and addressed several obstacles facing the
operations of the business;
(iii) obtained entry of an order authorizing
debtor-in-possession financing on a final basis;
(iv) marketed its businesses for sale; and
(v) obtained entry of an order approving that sale. Following
the closing of the sale transaction, the Debtors have filed a
chapter 11 plan of liquidation and disclosure statement, and have
obtained entry of an order approving the disclosure statement.
The exclusivity extension afforded the Debtors the opportunity to
continue to engage in negotiations regarding, solicit acceptance
of, and obtain an order confirming, the proposed Plan without
unnecessary interference, which will preserve and maximize value
for the bankruptcy estates and the Debtors' creditors. Extending
the exclusivity "also fosters the stability we have already
created, and all interested parties will benefit from the continued
stability and predictability that comes with engaging with us as
the only potential plan proponent, rather than multiple unknown
parties with diverging interests," the Debtors said.
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.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/33XWbnb at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/34ZJurj at no extra charge.
About GenCanna Global USA
OGGUSA, Inc. f/k/a 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.
Judge Gregory R. Schaaf oversees the case. 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 an operational advisor, and Jefferies, LLC as
financial advisor. Epiq is the claims agent.
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 a
financial advisor.
GLOSTATION USA: To Seek Plan Confirmation on Nov. 24
----------------------------------------------------
Glostation USA, Inc., a Delaware corporation, and its affiliated
debtors won approval from the U.S. Bankruptcy Court for the Central
District of California, San Fernando Valley Division of the
Disclosure Statement explaining their Joint Plan of Reorganization
dated September 15, 2020.
Judge Martin A. Barash approved the Disclosure Statement and set a
hearing on November 24, 2020, at 9:00 a.m., Pacific Standard Time,
to consider confirmation of the Plan.
Objections to confirmation are Nov. 16, 2020. Ballots accepting or
rejecting the Plan are due Nov. 5. The Debtors are required to
file a ballot summary by Nov. 6, and a motion to confirm the Plan
by Nov. 9.
About Glostation USA, Inc.
Glostation USA Inc. -- http://sandboxvr.com/-- is a virtual
reality start-up doing business as Sandbox VR. Sandbox is a
futuristic VR experience for groups of up to six where they can see
and physically interact with everyone inside, just like the real
world. Inspired by Star Trek's Holodeck, Sandbox's exclusive worlds
let people feel like they're living inside a game or movie, and are
built by EA, Sony, and Ubisoft veterans.
Glostation USA, Inc., based in Woodland Hills, CA, and its
debtor-affiliates sought Chapter 11 protection (Bankr. C.D. Cal.
Lead Case No. 20-11435) on Aug. 13, 2020.
In its petition, the Debtor was estimated to have $1 million to $10
million in assets and $10 million to $50 million in liabilities.
The petition was signed by Steven Zhao, manager, president, and
CEO.
SULMEYERKUPETZ, A PROFESSIONAL CORPORATION, serves as bankruptcy
counsel to the Debtors.
GLOSTATION USA: Unsecureds to Split $100K From Debtor's Parent
--------------------------------------------------------------
Glostation USA, Inc., and related debtors submitted a First Amended
Joint Plan of Reorganization and a corresponding First Amended
Disclosure Statement.
On Aug. 5, 2020, the Debtors, Sandbox VR, Inc. (Glostation's
non-debtor parent), and the Secured Creditors entered the Plan
Support Agreement and, concurrently, agreed upon the principal
terms of a consensual restructuring of the Debtors through a plan
of reorganization on the terms set forth in the Plan Term Sheet
attached as an exhibit to the PSA. On Sept. 25, 2020, the Court
entered an order authorizing the Debtors' assumption of the PSA.
The Plan contains the terms contemplated by the Plan Term Sheet.
Under the Plan, Parent waives prepetition and postpetition claims
on account of such earlier and ongoing funding provided to the
Debtors. Additionally, Parent agrees to infuse an additional
$700,000 as a new value contribution under the Plan, with $100,000
allocated for the Debtors' general unsecured creditors. The loan
obligations of the Debtors' secured creditors will be paid by
non-debtor Parent, and, therefore, no such payments are reflected
in such projections.
The Estates' primary assets consist of (a) cash on hand, (b)
machinery and equipment, (c) security deposits, and (d)
Glostation's equity interest in non-debtor Glostation Franchising
USA Inc. The net book value of the Debtors' assets is estimated to
be approximately $10,752,000 as of the end of November 2020.
Treatment of Claims
Under the Plan, the Class 1 SVB Secured Claim totaling $4,000,000
is impaired. SVB shall retain the SVB Liens and all of the claims,
liens, and rights in favor of SVB that existed as of the Effective
Date, including all SVB Loan Obligations
The Class 2 TPC Secured Claim in the amount of $8,067,335 is
impaired. TPC shall waive 50% of the TPC Amendment Fees otherwise
due and owing as of the Petition Date. The Debtors shall reaffirm
their obligations under the TPC Loan Documents and TPC Liens and
all of the claims, liens, and rights in favor of TPC.
Class 3 ATEL Secured Claim totaling $1,567,244 is impaired. Parent
and Glostation shall reaffirm their obligations under the ATEL Loan
Documents, including the ATEL Amendment. ATEL shall retain the
ATEL Liens and all of the claims, liens, and rights in favor of
ATEL that existed as of the Effective Date, including all ATEL Loan
Obligations;
Class 5 General Unsecured Claims (other than Intercompany Claims)
totaling $1,053,137 is impaired. Each holder of an Allowed Claim
in this Class shall, based on the Allowed amount of such Claim, be
paid a pro rata share of an amount equal to $100,000 of the Parent
Cash Contribution.
Class 7 Funding Claims are impaired. In full and complete payment,
satisfaction, settlement, release, discharge, and extinguishment of
the Funding Claims, if any, on the Effective Date, the Funding
Claims shall be converted to Equity Interests in Reorganized
Glostation, and shall constitute part of the New Value
Contribution.
A full-text copy of the Disclosure Statement dated September 15,
2020, is available at https://tinyurl.com/y2ss6jz3 from
PacerMonitor.com at no charge.
A full-text copy of the First Amended Disclosure Statement dated
October 14, 2020, is available at https://tinyurl.com/y43rdfbv from
PacerMonitor.com at no charge.
Attorneys for Glostation USA, Inc., et al:
David S. Kupetz
Asa S. Hami
Claire K. Wu
SulmeyerKupetz
A Professional Corporation
333 South Grand Ave, Suite 3400
Los Angeles, California 90071
Telephone: 213.626.2311
Facsimile: 213.629.4520
E-mail: dkupetz@sulmeyerlaw.com
ahami@sulmeyerlaw.com
ckwu@sulmeyerlaw.com
About Glostation USA, Inc.
Glostation USA Inc. is a virtual reality start-up doing business as
Sandbox VR. Sandbox is a futuristic VR experience for groups of up
to six where they can see and physically interact with everyone
inside, just like the real world. Inspired by Star Trek's Holodeck,
Sandbox's exclusive worlds let people feel like they're living
inside a game or movie, and are built by EA, Sony, and Ubisoft
veterans. Visit http://sandboxvr.comfor more information.
Glostation USA, Inc., a company based in Woodland Hills, Calif.,
and its debtor-affiliates sought Chapter 11 protection (Bankr. C.D.
Cal. Lead Case No. 20-11435) on Aug. 13, 2020.
In its petition, Glostation USA was estimated to have $1 million to
$10 million in assets and $10 million to $50 million in
liabilities. The petition was signed by Steven Zhao, manager,
president and chief executive officer.
Sulmeyerkupetz, APC serves as Debtors' bankruptcy counsel.
GOOD DEED: Seeks to Hire Jones & Walden as Legal Counsel
--------------------------------------------------------
Good Deed 317, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to hire Jones & Walden, LLC as
its legal counsel.
The firm will provide the following services:
(a) prepare pleadings and applications;
(b) conduct examination;
(c) advise the Debtor of its rights, duties and obligations;
(d) consult with and represent the Debtor with respect to a
Chapter 11 plan;
(e) perform legal services incidental and necessary to the
day-to-day operations of the Debtor's business; and
(f) take any and all other action incident to the proper
preservation and administration of the Debtor's estate and
business.
The firm has stated present fee rates of $200 to $375 per hour for
attorneys and $100 per hour for legal assistants.
Cameron McCord, Esq., a partner at Jones & Walden, disclosed in a
court filing that the firm neither holds nor represents any
interest adverse to the Debtor and its estate.
The firm can be reached through:
Cameron M. McCord, Esq.
Jones & Walden, LLC
699 Piedmont Ave, NE
Atlanta, GA 30308
Telephone: (404) 564-9300
Email: cmccord@joneswalden.com
About Good Deed 317, LLC
Based in Atlanta, Ga., Good Deed 317, LLC is a single asset real
estate debtor (as defined in 11 U.S.C. Section 101(51B)).
Good Deed 317 sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ga. Case No. 20-71227) on Oct. 29, 2020. Ozzie
Areu, manager, signed the petition.
At the time of the filing, Debtor had estimated assets of between
$10 million and $50 million and liabilities of between $10 million
and $50 million.
Jones & Walden, LLC is Debtor's legal counsel.
GORHAM PAPER: U.S. Trustee Appoints Creditors' Committee
--------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 on Nov. 10, 2020, appointed a
committee to represent unsecured creditors in the Chapter 11 cases
of Gorham Paper and Tissue, LLC and White Mountain Tissue, LLC.
The committee members are:
1. United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied Industrial and Service International Union
Attn: Nathan Kilbert, Assistant General Counsel
60 Boulevard of the Allies, Room 807
Pittsburgh, PA 15221
Phone: 412-562-2548
Fax: 412-562-2429
Email: nkilbert@usw.org.
2. Recycling Associates, Inc.
Attn: Mike Vellucci
1 Whipple Street
Nashua, NH 03060
Phone: 978-479-0832
Email: mike@recyclingassociates.com
3. Select Products LLC
Attn: Nicholas Galante
1 Arnold Drive
Huntington, NY 11743
Phone: 732-796-5150
Fax: 631-448-8888
Email: nickgalante@selectph.com.
4. Blind Industries & Services of Maryland
Attn: Thomas Kohn
3345 Washington Blvd.
Baltimore, MD 21227
Phone: 410-999-8344
Fax: 410-737-2665
Email: Tkohn@bism.org
5. Western Express, Inc.
Attn: Rob Welhoelter
7100 Commerce Way
Brentwood, TN 37027
Phone: 615-846-6978
Email: rwelhoelter@westernexp.com.
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Gorham Paper and Tissue
Founded in 2011, Gorham Paper and Tissue LLC --
http://www.gorhampt.com/-- operates a paper mill and manufactures
customized tissues, towels and specialty packagings.
Gorham Paper and Tissue and affiliate White Mountain Tissue, LLC,
sought Chapter 11 protection (Bankr. D.N.H. Lead Case No. 20-12814
and 20-12815) on Nov. 4, 2020. Gorham Paper was estimated to have
assets of $1 million to $10 million and liabilities of $50 million
to $100 million.
The Hon. Karen B. Owens is the case judge.
The Debtors have tapped Bernstein, Shur, Sawyer & Nelson, P.A. as
their bankruptcy counsel, Polsinelli PC as local counsel, and B.
Riley Securities as investment banker.
GRAVITY HOLDINGS: Case Summary & 2 Unsecured Creditors
------------------------------------------------------
Debtor: Gravity Holdings, Inc.
886 Valentine Lake Road
Elmer, LA 71424
Chapter 11 Petition Date: November 11, 2020
Court: United States Bankruptcy Court
Western District of Louisiana
Case No.: 20-80549
Judge: Hon. Stephen D. Wheelis
Debtor's Counsel: Thomas R. Willson, Esq.
THOMAS R. WILLSON
1330 Jackson Street
Alexandira, LA 71301
Tel: 318-442-8658
Fax: 318-442-9637
Email: rocky@rockywillsonlaw.com
Total Assets: $72,080
Total Liabilities: $2,077,503
The petition was signed by David Blumenstock, president-secretary.
A copy of the petition containing, among other items, a list of the
Debtor's two unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/5XG4AMY/Gravity_Holdings_Inc__lawbke-20-80549__0001.0.pdf?mcid=tGE4TAMA
GREER FARMS: Seeks to Hire Yerkes & Michels as Accountant
---------------------------------------------------------
Greer Farms, Inc. seeks approval from the U.S. Bankruptcy Court for
the District of Kansas to hire Yerkes & Michels, CPA, LLC to
prepare its federal and state income tax returns.
The firm will be paid at the rate of $150 per hour.
J. Dan Carroll, CPA, of Yerkes & Michels, 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:
J. Dan Carroll, CPA
Yerkes & Michels, CPA, LLC
208 E. Laurel St.,
Independence, KS 67301
Telephone: (620) 331-4600
About Greer Farms Inc.
Greer Farms, Inc. is a privately held company in the "Other Crop
Farming" industry.
On Sept. 28, 2020, Greer Farms sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Kansas Case No. 20-11214). At
the time of the filing, the Debtor disclosed $2,403,490 in assets
and $1,845,362 in liabilities.
Judge Dale L. Somers oversees the case.
Klenda Austerman, LLC and Yerkes & Michels, CPA, LLC serve as
Debtor's legal counsel and accountant, respectively.
GTT COMMUNICATIONS: Delays Filing of Third Quarter Form 10-Q
------------------------------------------------------------
GTT Communications, Inc. was unable to file its Quarterly Report on
Form 10-Q for the quarter ended Sept. 30, 2020 within the
prescribed time period without unreasonable effort or expense.
As reported by the Company in its prior filings with the Securities
and Exchange Commission, in the course of closing the Company's
books for the quarter ended June 30, 2020, the Company identified
certain issues related to the recording and reporting of Cost of
Telecommunications Services and related internal controls. The
Company's management and the Audit Committee of the Company's Board
of Directors, with assistance from outside counsel and consultants,
commenced a review with respect to these issues and are assessing
the effect, if any, on the Company's unissued and previously issued
financial statements, as well as whether there are any material
weaknesses in the Company's internal controls.
In addition, as previously disclosed, the Review is examining the
accounting for Cost of Telecommunications Services and has
identified a number of issues in connection with the Company's
previously issued financial statements, including: (i) adjustments
made without adequate support to Cost of Telecommunications
Services during the year ended Dec. 31, 2019 and the three months
ended
March 31, 2020 that had the effect of removing expenses from the
Company's income statement at quarter-end and then recognizing
certain of those expenses in subsequent quarters; and (ii) failures
during the years ended Dec. 31, 2018 and 2017 to recognize certain
expenses on the Company's income statement by recording such
expenses to goodwill and thereby attributing such expenses to
pre-acquisition accruals, without adequate support, for companies
that had been acquired. In addition, the Review is also examining:
(x) certain intercompany transactions recorded during the years
ended Dec. 31, 2019, 2018, 2017 and 2016, and each of the quarters
during the years ended Dec. 31, 2019, 2018, 2017 and 2016; (y)
accounting for bad debt expense during the year ended Dec. 31,
2019; and (z) accounting for credits issued to customers during the
years ended Dec. 31, 2019 and 2018 and the three months ended March
31, 2020.
Furthermore, as disclosed in prior filings with the SEC, the
Company is also reassessing its previous conclusions regarding the
effectiveness of its internal control over financial reporting. At
the conclusion of the Review, the Company expects the Review to
identify material weaknesses in the Company's internal control over
financial reporting, and the Company intends to continue to
evaluate and implement remedial measures to address any such
material weaknesses.
At this time, the Company has not concluded its Review and there is
no assurance that additional items will not be identified. The
Company's management and the Audit Committee, with assistance from
outside counsel and consultants, are continuing to assess the
effect of the matters described above on the Company's financial
statements for the years ended Dec. 31, 2019, 2018, 2017 and 2016,
each of the quarters during the years ended Dec. 31, 2019, 2018,
2017 and 2016 and the quarter ended March 31, 2020. As of Nov. 9,
2020, the Company is unable to estimate the total potential impact
of the issues on its previously issued financial statements.
Although the Company plans to file the Q3 Form 10-Q as soon as
possible after the completion of the Review, the Company does not
anticipate filing the Q3 Form 10-Q on or before Nov. 16, 2020, the
extended period provided for the filing under Rule 12b-25(b) of the
Securities Exchange Act of 1934, as amended. The Company is unable
to predict a specific filing date for the Q3 Form 10-Q or for the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2020 at this time. However, the Company does not expect
to be able to file the Q2 Form 10-Q or the Q3 Form 10-Q by Nov. 30,
2020, which is the currently scheduled expiration date under (i)
the Forbearance Agreement, dated as of Oct. 28, 2020, by and among
the Company, the guarantors party thereto and each of the
beneficial owners (or nominees, investment managers, advisors or
subadvisors for the beneficial owners) of the Company's 7.875%
Senior Notes due 2024 party thereto and (ii) the Forbearance
Agreement, dated as of Oct. 28, 2020, by and among the Company, GTT
Communications, B.V., the guarantors party thereto, each of the
lenders party thereto and KeyBank National Association, as
administrative agent and letter of credit issuer.
The Company's management and Audit Committee have discussed the
matters with CohnReznick LLP, the Company's independent registered
public accounting firm.
About GTT
GTT Communications operates a Tier 1 internet network and owns a
fiber network that includes an expansive pan-European footprint and
subsea cables. The Company's global network includes over 600
unique points of presence ("PoPs") spanning six continents, and the
Company provides services in more than 140 countries.
GTT reported a net loss of $105.9 million for the year ended Dec.
31, 2019, a net loss of $243.4 million for the year ended Dec. 31,
2018, and a net loss of $71.5 million for the year ended Dec. 31,
2017. As of March 31, 2020, the Company had $4.74 billion in total
assets, $4.54 billion in total liabilities, and $196.8 million in
total stockholders' equity.
* * *
As reported by the TCR on Sept. 22, 2020, S&P Global Ratings
retained all ratings on U.S.-based internet protocol (IP) network
operator GTT Communications Inc. (GTT), including the 'CCC+' issuer
credit rating, on CreditWatch with negative implications.
Also in September, 2020, Fitch Ratings downgraded the Long-term
Issuer Default Rating (IDR) of GTT Communications, Inc. (GTT) and
GTT Communications BV to 'CCC' from 'B-'. The rating action
follows the company's announcement that it received a notice of
default on Sept. 2, 2020 from holders representing 25% or more of
outstanding principal ($575 million) of the company's senior
unsecured notes, due to its noncompliance with a reporting covenant
under the notes indenture that required the company to file 2Q20
financials within the stated time frame (allowing for extensions).
GUNSMOKE LLC: Seeks January 18 Plan Exclusivity Extension
---------------------------------------------------------
Gunsmoke, LLC, and its affiliates ask the U.S. Bankruptcy Court for
the District of Colorado to extend the periods within which the
Debtors have the exclusive right to file a plan of reorganization
to and including January 18, 2021.
Gunsmoke, LLC, Happy Beavers, LLC, and Armed Beavers, LLC are
currently working on the request for substantive consolidation or
in the alternative joint administration of the three pending
Chapter 11 bankruptcies.
The requested extension of time to file the proposed plan will
allow the Debtors to:
(i) increase the judicial economy and the efficiency of the
case, by allowing the Debtors to file one plan instead of three
separate plans, should the request for joint administration or
substantive consolidation be granted by the Court. This will reduce
costs for the Debtors as well as the Creditors, as the Creditors
will not have to review three separate plans, but rather can
address one plan for all three entities;
(ii) clarify the assets and liabilities of each entity to also
assist in creating a feasible plan of reorganization. Due to the
interconnectedness of the three entities, there was initially
significant confusion as to the various assets and liabilities of
each Debtor and should not be penalized for the time needed to
sufficiently clarify the assets and liabilities of the entities;
and
(iii) deal with a pending adversary complaint, the outcome of
which will have an impact on the proposed plan as it may reduce the
Debtors' liability to their Creditors. The Debtors anticipate they
may also join the Client Representatives as co-plaintiffs in the
adversarial complaint. Allowing additional time for the Debtors to
present a plan will also allow sufficient time for the Debtors to
attend mediation with the Creditors which may resolve the issues
and result in a consensual plan of reorganization to be presented
to the Court.
The Client Representatives of the Debtors, Chee Wei Fong, and
Richard Weingarten, are also planning to file for individual
Chapter 11 bankruptcy relief. The Client Representatives are in the
process of retaining outside counsel for these filings and
anticipate initiating the voluntary petitions for relief. It is
anticipated that the plans for the entities will strongly resemble
the plans for the individual filings and it will reduce time and
resources to propose these plans simultaneously.
Additionally, the cash collateral budget has been approved by the
Court and the Debtor is operating under COVID-19 restrictions, but
still maintaining the ordinary course of business.
"If we are granted with an extension, we will have an opportunity
to mirror the deadline of a Chapter 11 case which is appropriate
considering the continued protection of the interest of the
Creditors and the statutory intent of Congress to benefit us
through the streamlined process Subchapter V offers," the Debtors
said.
A copy of the Debtors' Motion to Extend is available from
PacerMonitor.com at https://bit.ly/3pg5urq at no extra charge.
About Gunsmoke LLC
Gunsmoke, LLC, a gun shop in Loveland, Colo., sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No.
20-14962) on July 22, 2020. At the time of the filing, the Debtor
had estimated assets of between $100,001 and $500,000 and
liabilities of between $1 million and $10 million.
Judge Joseph G Rosania Jr. oversees the case. The Debtor tapped
Jorgensen, Brownell & Pepin P.C. as legal counsel and Nickie Stobbe
of Profit Accounting Plus and Brian Jacobson of Haynie & Company as
its bookkeeper and accountant, respectively.
Affiliates Happy Beavers, LLC filed its voluntary Chapter 11
petition on July 17, 2020; and Armed Beavers, LLC filed for Chapter
11 on July 22.
HAWKEYE ENTERTAINMENT: Wins Feb. 2021 Plan Exclusivity Extension
----------------------------------------------------------------
Judge Maureen A. Tighe of the U.S. Bankruptcy Court for the Central
District of California, San Fernando Valley Division, extended
Hawkeye Entertainment, LLC's exclusive periods to file a Chapter 11
plan from October 16, 2020, through February 19, 2021, and to
solicit acceptances of the plan from December 16, 2020, through
April 21, 2021.
The Debtor laid out the reason for the extension request, which is
twofold:
(1) the continuance to mid-October 2020 of the evidentiary
hearing on the Debtor's Motion to Assume the Debtor's principal
assets, a commercial lease and sublease; and
(2) the delays and uncertainties caused by the COVID-19
pandemic and consequent orders and regulations.
At the current time, the Debtor anticipates that this request for
an extension will be the last.
The COVID-19 health crisis effectively shut down all businesses,
except the essential ones. While there is a lot of uncertainty and
delay caused, the Debtor is using its best efforts to move forward
with its chapter 11 case. But due to the pandemic, in March 2020,
the Debtor's subtenant, W.E.R.M. Investments, LLC ("WERM"), was
compelled to cancel all of its scheduled events. To preserve the
jobs of as many employees, WERM requested the Debtor for a
temporary rent deferral, to ask the Landlord, the New Vision
Horizon, LLC (successor-in-interest to Pax America Development,
LLC) but the Landlord refused.
The extension permits the Debtor's reopening procedures to
progress, providing the estate, creditors, and interested parties
with a better idea as to when WERM (the operating subtenant) will
be permitted to resume operations and the type of restrictions that
will need to be implemented until normal business operations
resume. This knowledge will assist the Debtor to formulate the
appropriate disclosures in its Disclosure Statement. In the
meantime, WERM has also been exploring a number of alternatives
designed to produce income during the pandemic closure period.
Also, the Debtor has devoted significant effort and time to the
Assumption Motion, which is a critical motion in the case.
Assumption of the Lease and Sublease remains material to the
Debtor's successful reorganization. The Debtor believes that it is
in the best interest of the estate to delay filing a plan until
after the trial on the assumption of the Lease and Sublease since
the preparation for the evidentiary hearing on the said motion will
require extra time. The deadline within which the Debtor may assume
and/or assign or reject the Lease has been extended through the
later of October 31, 2020, and the date which is the first business
day after 30-days following the last hearing date for the
Evidentiary Hearing.
The Debtor said it was not seeking an extension in order to
pressure creditors, rather the additional time will ensure the
Debtor is able to present a comprehensive plan and to ascertain the
Landlord's claim. In fact, once the issues concerning the Lease and
Sublease are decided by the Court, the Debtor intends to make a
good faith effort toward a consensual plan and disclosure
statement.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/33Y65oX at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/3j65ntT at no extra charge.
About Hawkeye Entertainment
Hawkeye Entertainment, LLC's most valuable asset is a written lease
agreement, along with its First Amendment, for the first four
floors and basement of the real property commonly known as the
Pacific Stock Exchange Building located at 618 S. Spring Street, in
Los Angeles, California. Hawkeye is a holding company for the
Lease, which is sublet to a related entity. The business of the
related sublease operates an event venue in downtown Los Angeles
for private parties, corporate events, live entertainment, fashion
shows, and more. Hawkeye previously filed a Chapter 11 petition on
Sept. 30, 2013 (Bankr. C.D. Calif. Case No. 13-16307) due to
disputes with its landlord.
Hawkeye sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. C.D. Cal. Case No. 19-12102) on Aug. 21, 2019. At the time
of the filing, the Debtor disclosed assets ranging between $1
million to $10 million and liabilities of the same range. The
petition was signed by Adi McAbian, president of Saybian Gourmet,
Inc., a member of Hawkeye Ent.
Previously, Judge Victoria S. Kaufman was assigned to the case, but
now Judge Maureen A. Tighe oversees the case. Sandford L. Frey,
Esq., at Leech Tishman Fuscaldo & Lampl, Inc., is the Debtor's
legal counsel.
HERTZ CORP: Wins March 2021 Plan Exclusivity Extension
------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District
of Delaware extended the periods within which The Hertz Corporation
and its affiliates have the exclusive right to file a Chapter 11
plan through and including March 22, 2021, and to solicit
acceptances of the plan through and including May 17, 2021.
The Covid-19 crisis created a sudden need for the Debtors to seek
relief under Chapter 11 to stabilize and right-size their business
in light of the pandemic's effects upon and the economy and the
travel market. Although on-airport rental volume has started to
slowly recover, where the majority of the Debtors' rental revenue
is generated at their airport locations, it is significantly less
in revenue than in previous years. Given the significant reduction
in rentals at many airport locations the Debtors have faced
difficulty in collecting concession fees sufficient to cover the
minimum annual guaranteed ("MAG") payments required under their
leases.
The Debtors diligently worked with the Official Committee of
Unsecured Creditors and other parties on the following to provide
the Company with the foundation for a successful restructuring of
their business and eventual emergence from bankruptcy through a
chapter 11 plan:
(i) reached an interim settlement with the U.S. ABS lenders
related to the U.S. master lease with non-debtor Hertz Vehicle
Financing, LLC, that deferred expensive litigation and
significantly reduced the Debtors' cash rent obligations with
respect to their U.S. fleet for the remainder of 2020;
(ii) negotiated various interim cash collateral orders with
certain of their prepetition lenders that allow the Debtors ongoing
access to cash and liquidity to continue operations while
preserving the rights of various parties with respect to whether
such cash is cash collateral (and deferring expensive litigation on
the issue); and
(iii) obtained authority to repay their prepetition Sidecar
debt, and have done so, saving their estates' significant
post-petition interest expense.
With the additional time, the Debtors will be able to continue
working toward various steps that they will need to take to
ultimately develop, negotiate, and confirm a plan of reorganization
that will maximize the value of the Debtors' estates for all
stakeholders. "We need more time to secure DIP financing to provide
required liquidity for the remainder of the Chapter 11 Cases,
secure replacement vehicle financing to refresh our rental fleet
for 2021, develop a business plan, and finally the Plan" the
Debtors said.
A copy of the Debtor's Motion to extend is available from
primeclerk.com at https://bit.ly/3nTJyBD at no extra charge.
A copy of the Court's Extension Order is available from
primeclerk.com at https://bit.ly/2ItvEFX at no extra charge.
About Hertz Corp.
Hertz Corp. and its subsidiaries -- http://www.hertz.com-- operate
a worldwide vehicle rental business under the Hertz, Dollar, and
Thrifty brands, with car rental locations in North America, Europe,
Latin America, Africa, Asia, Australia, the Caribbean, the Middle
East, and New Zealand. They also operate a vehicle leasing and
fleet management solutions business.
On May 22, 2020, The Hertz Corporation and certain of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court for
the District of Delaware (Bankr. D. Del. Case No. 20-11218).
Judge Mary F. Walrath oversees the cases. The Debtors have tapped
White & Case LLP as their bankruptcy counsel, Richards, Layton &
Finger, P.A. as local counsel, Moelis & Co. as investment banker,
and FTI Consulting as financial advisor. The Debtors also retained
the services of Boston Consulting Group to assist the Debtors in
the development of their business plan. Prime Clerk LLC is the
claims agent.
The U.S. Trustee for Regions 3 and 9 appointed a Committee to
represent unsecured creditors in Debtors' Chapter 11 cases. The
Committee has tapped Kramer Levin Naftalis & Frankel LLP as its
bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as
Delaware counsel, UBS Securities LLC as investment banker, and
Berkeley Research Group, LLC as financial advisor. Ernst & Young
LLP provides audit and tax services to the Committee.
HESS CORP: Egan-Jones Lowers Sr. Unsec. Debt Ratings to B+
----------------------------------------------------------
Egan-Jones Ratings Company, on November 2, 2020, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Hess Corporation to B+ from BB-.
Headquartered in New York, New York, Hess Corporation operates as a
global independent energy company.
HIGHPOINT OPERATING: Moody's Downgrades CFR to Ca, Outlook Neg.
---------------------------------------------------------------
Moody's Investors Service downgraded HighPoint Operating
Corporation's Corporate Family Rating to Ca from Caa2, Probability
of Default Rating (PDR) to C-PD from Caa2-PD and senior unsecured
notes ratings to C from Caa3. Moody's downgraded HighPoint's
Speculative Grade Liquidity (SGL) rating to SGL-4 from SGL-3. The
outlook remains negative.
"The downgrade of HighPoint's ratings reflect high risk of default,
either as a result of its deeming the company's planned bond
exchange a distressed exchange if completed out of court or the
company filing a plan of reorganization under Chapter 11," said
Jonathan Teitel, a Moody's analyst.
Downgrades:
Issuer: HighPoint Operating Corporation
Probability of Default Rating, Downgraded to C-PD from Caa2-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3
Corporate Family Rating, Downgraded to Ca from Caa2
Senior Unsecured Regular Bond/Debenture, Downgraded to C (LGD5)
from Caa3 (LGD4)
Outlook Actions:
Issuer: HighPoint Operating Corporation
Outlook, Remains Negative
RATINGS RATIONALE
HighPoint's Ca CFR and C-PD PDR reflect high risk of default as
well as Moody's view on expected recovery. If the company completes
its bond exchange out of court, Moody's expects to deem such
transaction a distressed exchange and a form of default. Subject to
the completion of the transaction and the final terms, Moody's will
likely append an "/LD" to the Probability of Default Rating
indicating limited default. If the company files for bankruptcy
under Chapter 11 to complete the prepackaged plan of reorganization
subject to confirmation by the court, Moody's expects to downgrade
the company's PDR to D-PD. The company expects to launch its bond
exchange offer in January 2021.
In Nov. 9, HighPoint Resources Corporation (the parent company of
HighPoint Operating Corporation) announced it entered into a merger
agreement with Bonanza Creek Energy, Inc. (unrated) under which a
subsidiary of Bonanza Creek will acquire HighPoint. Under the terms
of the agreement, the companies agreed to launch an exchange offer
and consent solicitation and simultaneous solicitation of a
prepackaged plan of reorganization under Chapter 11. The exchange
offer and consent solicitation will be conditioned on a minimum
participation of at least 97.5% of HighPoint's senior unsecured
notes in the aggregate and a majority of each series of notes.
HighPoint has entered into a transaction support agreement with
holders of 73% of the senior notes due 2022 and 97% of the senior
notes due 2025. This equates to over 83% of outstanding HighPoint
notes in the aggregate. If the minimum participation condition is
met, the companies will complete the exchange transaction and
Bonanza Creek will acquire HighPoint out of court. If the minimum
participation condition is not met, HighPoint intends to file for
bankruptcy under Chapter 11 to complete the prepackaged plan of
reorganization subject to confirmation by the court.
Following a likely default on HighPoint's existing debt, once
restructuring is complete, the merged businesses, with their
complementary assets, will provide benefits to stakeholders going
forward. Participating HighPoint bondholders would receive equity
representing about 30% of the combined company and up to $100
million of new 7.5% senior unsecured notes due 2026. The exchange
notes would equal $100 million less any stub of HighPoint notes
remaining. As of November 6, Bonanza Creek had only $10 million of
debt outstanding under its credit facility. The combined company
will have significantly reduced debt (largely because of HighPoint
debt converted to equity) and consequently improved pro forma
leverage, interest coverage and free cash flow generation
potential. It will have increased scale in Colorado's rural Weld
County with estimated fourth quarter production of 50 Mboe/d (53%
oil) and about 206,000 net acres of contiguous acreage. Also, there
are opportunities for cost and operational synergies.
Upon closing of the exchange, the companies expect their combined
balance sheet to consist of $50 million of cash, an RBL revolver
due 2023 with $150 million of elected commitments, up to $100
million of senior unsecured notes due 2026 and any stub of existing
HighPoint senior unsecured notes that are not exchanged (up to a
maximum of $16 million).
The SGL-4 rating reflects Moody's view that HighPoint has weak
liquidity prior to the planned restructuring. HighPoint expects it
would likely breach the revolver's financial covenant in the second
quarter of 2021. There could also be "going concern" language in
the company's audited financials for 2020, in which case covenants
would be breached in the first quarter of 2021 when financials are
filed. On November 2, elected commitment under HighPoint's revolver
were reduced to $185 million (on a $200 million borrowing base)
from $300 million. As of November 9, HighPoint had $26 million of
borrowing capacity under its revolver ($140 million was drawn and
$19 million in letters of credit were outstanding). The revolver
matures in 2023 but this maturity springs to July 2022 if more than
$100 million of the senior notes due October 2022 are then
outstanding.
HighPoint Operating Corporation's $350 million of 7% senior
unsecured notes due 2022 and $275 million of 8.75% senior unsecured
notes due 2025 are rated C, one notch below the CFR. Moody's views
the C ratings as more appropriate than the ratings suggested by its
loss given default framework given expectations for recovery. The
notes are effectively subordinated to the senior secured revolver.
HighPoint Resources Corporation, HighPoint Operating Corporation's
parent, is a guarantor of the bonds.
The negative outlook reflects likely default including via a
distressed exchange and potential for erosion of value.
FACTORS THAT COULD LEAD TO AN UPGRADE OR A DOWNGRADE OF THE
RATINGS
Factors that could lead to a downgrade include Moody's lowering its
view on expected recoveries, debt repayment acceleration or
bankruptcy.
Factors that could lead to an upgrade include significant reduction
in default risk, adequate liquidity and a tenable capital
structure.
HighPoint Operating Corporation is a subsidiary of HighPoint
Resources Corporation, headquartered in Denver, Colorado and a
publicly traded independent exploration and production company. It
operates in the DJ Basin in Colorado. The company produced 31
Mboe/d in the third quarter of 2020 (53% oil, 25% natural gas and
22% NGLs).
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
HILLMAN COS: S&P Alters Outlook to Stable, Affirms 'B-' ICR
-----------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based The Hillman
Cos. Inc. (Hillman) to stable from negative and affirmed the 'B-'
issuer credit rating.
At the same time, S&P is affirming its 'B-' issue-level rating on
the company's senior secured debt. The '3' recovery rating is
unchanged and indicates the rating agency's expectation for a
meaningful recovery (50%-70%; rounded recovery: 60%). S&P is also
affirming its 'CCC' issue-level rating on the company's senior
unsecured debt. The '6' recovery rating is unchanged and indicates
S&P's expectation for a negligible recovery (0%-10%; rounded
recovery: 0%).
S&P said, "The stable outlook reflects our expectation that
improving demand and product mix will bolster margins, driving
stronger credit metrics. The company's leverage declined to 8.1x
for the last 12 months ended Sept. 30, 2020, from 9.8x from the
same period a year ago. Strong demand drove EBITDA to more than
$200 million for the 12-months-ended Sept. 30, 2020, compared with
about $170 million for the same period a year ago. Additionally,
the company repaid more than $20 million of net debt through the
first nine months of 2020, which helped drive further deleveraging.
The company's Fastening, Hardware, and Personal Protective
Solutions segment grew about 20% for the nine months ended Sept.
30, over the same period a year ago because of stronger repair and
remodeling demand driven by a shift in spending away from travel
and leisure, consumers spending more time at home, and higher
demand for COVID-19 protection products. Although its Consumer
Connected Solutions (CCS) segment sales declined because of lower
demand for keys and engravings, we expect a rebound as consumers
become more comfortable with shopping outside. In particular, the
kiosk side of the business has recovered quicker, although the full
service side remains affected. As a result of stabilizing operating
performance and our expectation that the rebound of the keys and
engravings business will drive stronger EBITDA, we expect leverage
to decline to 6.5x-7x for fiscal 2021 and 6x-6.5x for fiscal
2022."
"Longer term sustainability and growth initiatives remain key to
cash flow generation and EBITDA growth. We believe the tailwinds
the company is experiencing for its personal protective equipment
products and fasteners and hardware products will moderate in 2021.
On the personal protective equipment side, we expect sales to
moderate as a vaccine is deployed, resulting in lower demand for
masks and gloves. We believe fasteners and hardware is experiencing
to some pull-forward demand. As life returns to pre-COVID
normality, consumers will begin shifting their spending to travel
and leisure as they spend more time out of their homes. In order to
continue generating steady EBITDA growth, we believe the company
will have to continue executing on its CCS strategy, further
expanding its keys and engravings business, and rolling out its
knife sharpening business. We forecast capex of about $70 million
in 2021 to support building additional kiosks, the CCS business is
a higher gross margin business and its rebound and growth will be
critical in driving further EBITDA growth. We expect free cash flow
generation of at least $50 million in 2021 due to stronger
operating profitability. As such, we believe the company will
maintain adequate liquidity."
"We believe the company will remain acquisitive under its financial
sponsor ownership. The company has an aggressive acquisition
history, acquiring ST Fastening Systems in 2017, Big Time Products
and Minute Key Holdings in 2018, and Sharp Systems LLC in 2019. In
the near term, we expect the company would primarily deploy capital
to invest in its Minute Key and Resharp businesses to bolster
organic growth, but long term, will continue to seek out
acquisition opportunities. While we have not modeled in material
acquisitions, we expect the company to maintain leverage in line
with historical levels due to its financial policy."
"The stable outlook reflects our belief that the company will
continue growing EBITDA throughout our one-year forecast such that
adjusted leverage is at or below 8x, while generating positive free
cash flow of at least $50 million annually."
"We could downgrade Hillman if we believe its capital structure is
unsustainable, with liquidity becoming constrained or EBITDA
interest coverage declining to near 1.5x. We could also downgrade
the company if we believe its ability to meet its debt service
payments for a prolonged period is a risk. We believe this could
occur if the retail environment remains weak and macroeconomic
conditions deteriorate such that consumers continue to defer their
home improvement projects and discretionary purchases, or decide
against purchasing these products altogether. Additionally, we
believe a substantial disruption at Hillman's distribution centers
or supply chain could materially reduce its profit."
"We could consider raising the rating if the company improves
profitability and continues growing its sales, resulting in better
debt leverage below 7x, while also generating positive free cash
flow. A higher rating would also depend on a more favorable view of
the business, including lower restructuring costs, sustained demand
trends, and stronger EBITDA. Additionally, the company would need
to commit to adopting a less aggressive debt-financed acquisition
strategy for us to consider a higher rating."
HILLMAN COS: S&P Alters Outlook to Stable, Affirms 'B-' ICR
-----------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based The Hillman
Cos. Inc. (Hillman) to stable from negative and affirmed the 'B-'
issuer credit rating.
At the same time, S&P is affirming its 'B-' issue-level rating on
the company's senior secured debt. The '3' recovery rating is
unchanged and indicates the rating agency's expectation for a
meaningful recovery (50%-70%; rounded recovery: 60%). S&P is also
affirming its 'CCC' issue-level rating on the company's senior
unsecured debt. The '6' recovery rating is unchanged and indicates
S&P's expectation for a negligible recovery (0%-10%; rounded
recovery: 0%).
S&P said, "The stable outlook reflects our expectation that
improving demand and product mix will bolster margins, driving
stronger credit metrics. The company's leverage declined to 8.1x
for the last 12 months ended Sept. 30, 2020, from 9.8x from the
same period a year ago. Strong demand drove EBITDA to more than
$200 million for the 12-months-ended Sept. 30, 2020, compared with
about $170 million for the same period a year ago. Additionally,
the company repaid more than $20 million of net debt through the
first nine months of 2020, which helped drive further deleveraging.
The company's Fastening, Hardware, and Personal Protective
Solutions segment grew about 20% for the nine months ended Sept.
30, over the same period a year ago because of stronger repair and
remodeling demand driven by a shift in spending away from travel
and leisure, consumers spending more time at home, and higher
demand for COVID-19 protection products. Although its Consumer
Connected Solutions (CCS) segment sales declined because of lower
demand for keys and engravings, we expect a rebound as consumers
become more comfortable with shopping outside. In particular, the
kiosk side of the business has recovered quicker, although the full
service side remains affected. As a result of stabilizing operating
performance and our expectation that the rebound of the keys and
engravings business will drive stronger EBITDA, we expect leverage
to decline to 6.5x-7x for fiscal 2021 and 6x-6.5x for fiscal
2022."
"Longer term sustainability and growth initiatives remain key to
cash flow generation and EBITDA growth. We believe the tailwinds
the company is experiencing for its personal protective equipment
products and fasteners and hardware products will moderate in 2021.
On the personal protective equipment side, we expect sales to
moderate as a vaccine is deployed, resulting in lower demand for
masks and gloves. We believe fasteners and hardware is experiencing
to some pull-forward demand. As life returns to pre-COVID
normality, consumers will begin shifting their spending to travel
and leisure as they spend more time out of their homes. In order to
continue generating steady EBITDA growth, we believe the company
will have to continue executing on its CCS strategy, further
expanding its keys and engravings business, and rolling out its
knife sharpening business. We forecast capex of about $70 million
in 2021 to support building additional kiosks, the CCS business is
a higher gross margin business and its rebound and growth will be
critical in driving further EBITDA growth. We expect free cash flow
generation of at least $50 million in 2021 due to stronger
operating profitability. As such, we believe the company will
maintain adequate liquidity."
"We believe the company will remain acquisitive under its financial
sponsor ownership. The company has an aggressive acquisition
history, acquiring ST Fastening Systems in 2017, Big Time Products
and Minute Key Holdings in 2018, and Sharp Systems LLC in 2019. In
the near term, we expect the company would primarily deploy capital
to invest in its Minute Key and Resharp businesses to bolster
organic growth, but long term, will continue to seek out
acquisition opportunities. While we have not modeled in material
acquisitions, we expect the company to maintain leverage in line
with historical levels due to its financial policy."
"The stable outlook reflects our belief that the company will
continue growing EBITDA throughout our one-year forecast such that
adjusted leverage is at or below 8x, while generating positive free
cash flow of at least $50 million annually."
"We could downgrade Hillman if we believe its capital structure is
unsustainable, with liquidity becoming constrained or EBITDA
interest coverage declining to near 1.5x. We could also downgrade
the company if we believe its ability to meet its debt service
payments for a prolonged period is a risk. We believe this could
occur if the retail environment remains weak and macroeconomic
conditions deteriorate such that consumers continue to defer their
home improvement projects and discretionary purchases, or decide
against purchasing these products altogether. Additionally, we
believe a substantial disruption at Hillman's distribution centers
or supply chain could materially reduce its profit."
"We could consider raising the rating if the company improves
profitability and continues growing its sales, resulting in better
debt leverage below 7x, while also generating positive free cash
flow. A higher rating would also depend on a more favorable view of
the business, including lower restructuring costs, sustained demand
trends, and stronger EBITDA. Additionally, the company would need
to commit to adopting a less aggressive debt-financed acquisition
strategy for us to consider a higher rating."
HOLLINGSWORTH FARMS: Administrator Unable to Appoint Committee
--------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Middle District of
Alabama on Nov. 10 disclosed in a filing that no official committee
of unsecured creditors has been appointed in the Chapter 11 case of
Hollingsworth Farms, LLC.
About Hollingsworth Farms
Hollingsworth Farms, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Ala. Case No. 20-31975) on Sept. 16,
2020. The petition was signed by James W. Hollingsworth, sole
member of Port Royal Medical Investments LLC. At the time of the
filing, the Debtor was estimated to have $1 million to $10 million
in both assets and liabilities. Judge Judge William R. Sawyer
oversees the case. Espy, Metcalf & Espy, P.C. serves as the
Debtor's legal counsel.
HOLLYWOOD FOR CHILDREN: Seeks to Hire Bencivenga Ward as Accountant
-------------------------------------------------------------------
Hollywood for Children, Inc. seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
Bencivenga Ward & Company CPA's, P.C. as its accountant.
The firm will provide services that will be required to assist in
the successful prosecution of the Debtor's Chapter 11 case.
The firm's employees currently expected to be principally
responsible for the case, and their respective hourly rates are as
follows:
Leonard J. Bencivenga $350
Diana M. Lamb $200
Leonard Bencivenga, CPA, principal at Bencivenga Ward, 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:
Leonard J. Bencivenga, CPA
Bencivenga Ward & Company CPA's, P.C.
420 Columbus Ave # 304
Valhalla, NY 10595
Telephone: (914) 769-5005
About Hollywood for Children Inc.
Hollywood for Children, Inc., a New York non-profit charitable
organization, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. C.D. Cal. Case No. 20-18801) on Sept. 28, 2020. Paul
G. Alberghetti, secretary and treasurer, signed the petition.
At the time of the filing, Debtor had total assets of $31,719 and
total liabilities of $1,423,923.
Judge Robert N. Kwan oversees the case. SulmeyerKupetz, A
Professional Corporation, is Debtor's legal counsel.
IDEANOMICS INC: Incurs $8.7 Million Net Loss in Third Quarter
-------------------------------------------------------------
Ideanomics, Inc., filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $8.72
million on $10.62 million of total revenue for the three months
ended Sept. 30, 2020, compared to a net loss of $12.30 million on
$3.10 million of total revenue for the three months ended Sept. 30,
2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $47.76 million on $15.69 million of total revenue
compared to net income of $12.88 million on $44.50 million of total
revenue for the nine months ended Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $138.46 million in total
assets, $49.33 million in total liabilities, $1.26 million in
convertible redeemable preferred stock, $7.37 million in redeemable
non-controlling interest, and $80.50 million in total equity.
"We reported our third consecutive quarter of MEG revenue growth,
and our pipeline gives us confidence that we can maintain this
momentum through our product and service offerings and global
footprint," said Alf Poor, CEO of Ideanomics. "The MEG division in
China, Treeletrik in Malaysia, and Medici Motor Works and Solectrac
in the U.S. are all progressing towards our objectives for the
remainder of 2020, and into 2021 and beyond. Strong growth in our
taxi and ridesharing business is continuing and we are beginning to
bring other revenues online in Q4, including activity in the bus
segment of our business."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/837852/000110465920123041/idex-20200930x10q.htm
About Ideanomics
Headquartered in New York, NY, with offices in Beijing and Qingdao,
China, Ideanomics is a global company focused on facilitating the
adoption of commercial electric vehicles and developing next
generation financial services and Fintech products. Its electric
vehicle division, Mobile Energy Global (MEG) provides group
purchasing discounts on commercial electric vehicles, EV batteries
and electricity as well as financing and charging solutions.
Ideanomics Capital includes DBOT ATS and Intelligenta which
provide
innovative financial services solutions powered by AI and
blockchain. MEG and Ideanomics Capital provide its global
customers and partners with better efficiencies and technologies
and greater access to global markets.
Ideanomics reported a net loss of $96.83 million for the year ended
Dec. 31, 2019, compared to a net loss of $28.42 million for the
year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$147.99 million in total assets, $56.12 million in total
liabilities, $1.26 million in convertible redeemable preferred
stock, $7.26 million in redeemable non-controlling interest, and
$83.35 million in total equity.
B F Borgers CPA PC, in Lakewood, Colorado, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 16, 2020, citing that the Company incurred recurring
losses from operations, has net current liabilities and an
accumulated deficit that raise substantial doubt about its ability
to continue as a going concern.
INSPIREMD INC: Incurs $2.2 Million Net Loss in Third Quarter
------------------------------------------------------------
InspireMD, Inc., filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $2.23
million on $980,000 of revenues for the three months ended Sept.
30, 2020, compared to a net loss of $2.07 million on $939,000 of
revenues for the three months ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $6.69 million on $2.33 million of revenues compared to
a net loss of $7.48 million on $2.71 million of revenues for the
same period a year ago.
As of Sept. 30, 2020, the Company had $15.61 million in total
assets, $4.33 million in total liabilities, and $11.28 million in
total equity.
As of Sept. 30, 2020, cash and cash equivalents were $10,882,000
compared to $5,514,000 as of Dec. 31, 2019.
Third Quarter 2020 and recent highlights:
* The U.S. Food and Drug Administration (FDA) granted InspireMD
approval of its Investigational Device Exemption (IDE)
application to initiate a pivotal study of CGuard EPS. The
company has begun to plan its pivotal study and has retained
Dr.
Christine Brennan, recognized expert in carotid artery disease,
as a consultant during the planning process.
* InspireMD added Dr. Gary Roubin to its Board of Directors.
* The Company appointed Andrea Tommasoli as senior vice president
of global sales and marketing.
* InspireMD appointed Patrick Jamnik as vice president of
business
development and strategic initiatives. Patrick will oversee
the
Company's business development activities and play a key role
in
advancing its short and long-term strategic goals.
Marvin Slosman, InspireMD's chief executive officer commented, "Our
third quarter financial results return us to our pre-COVID revenue
levels, and while we remain cautiously optimistic about the fourth
quarter, new restrictions instituted to combat the spread of
COVID-19 may provide additional uncertainly in our markets.
Nevertheless, our strategic pathway to growth for CGuard EPS is
robust, rooted in broadening market share in endovascular carotid
artery stent procedures in our served markets, while encouraging
practitioners to make the shift from carotid endarterectomy to
carotid stenting and launching our products in new countries. We
view carotid artery disease as the next significant vascular
condition to shift toward an endovascular standard of care, much
the same way cerebral aneurysms, coronary artery disease,
thoracic/abdominal aortic aneurysms, and peripheral artery disease
already have. Therefore, making the case for the value of expanded
application of carotid stenting to the vascular surgeon and INR
(interventional neuroradiology) communities remains a top
priority.
"Another of our key goals is the initiation of our pivotal study in
the United States, and we are buoyed by the addition of Dr. Gary
Roubin to our Board of Directors and Dr. Christine Brennan as a
strategic advisor, both of whom will be instrumental in the
development and implementation of the trial. While it is important
to continue to grow revenues in the markets we currently serve, we
believe our investments in the world's largest markets, including
the United States, China and Japan, will pave a pathway to global
adoption of CGuard EPS.
"Finally, to meet the needs of each physician specialty, our
strategy includes developing a new advanced tool set of adjunctive
delivery system options including periprocedural embolic
protection, specifically targeted for the vascular surgical
community, all intended to drive adoption of CGuard EPS. These
advances represent additional significant revenue pathways for
InspireMD, and we are excited to broaden our portfolio and build on
our growth and market adoption," concluded Mr. Slosman.
Liquidity
InspireMD stated, "The Company has an accumulated deficit as of
Sept. 30, 2020, as well as a history of net losses and negative
operating cash flows in recent years. The Company expects to
continue incurring losses and negative cash flows from operations
until its products (primarily CGuard EPS) reach commercial
profitability. As a result of these expected losses and negative
cash flows from operations, along with the Company's current cash
position, the Company has sufficient resources to fund operations
through the third quarter of 2021. Therefore, there is substantial
doubt about the Company's ability to continue as a going concern.
These financial statements have been prepared assuming that the
Company will continue as a going concern and do not include any
adjustments that might result from the outcome of this
uncertainty.
"Management's plans include the continued commercialization of the
Company's products and raising capital through the sale of
additional equity securities, debt or capital inflows from
strategic partnerships. There are no assurances however, that the
Company will be successful in obtaining the level of financing
needed for its operations. The COVID-19 pandemic has resulted in
significant financial market volatility and uncertainty in recent
weeks. A continuation or worsening of the levels of market
disruption and volatility seen in the recent past could have an
adverse effect on our ability to access capital and on the market
price of our common stock, and we may not be able to successfully
raise capital through the sale of our securities. If the Company
is unsuccessful in commercializing its products and raising
capital, it may need to reduce activities, curtail or cease
operations."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1433607/000149315220020759/form10q.htm
About InspireMD Inc.
Headquartered in Tel Aviv, Israel, InspireMD --
http://www.inspiremd.com/-- is a medical device company focusing
on the development and commercialization of its proprietary
MicroNet stent platform technology for the treatment of complex
vascular and coronary disease. A stent is an expandable
"scaffold-like" device, usually constructed of a metallic material,
that is inserted into an artery to expand the inside passage and
improve blood flow. Its MicroNet, a micron mesh sleeve, is wrapped
over a stent to provide embolic protection in stenting procedures.
InspireMD recorded a net loss of $10.04 million for the year ended
Dec. 31, 2019, compared to a net loss of $7.24 million for the year
ended Dec. 31, 2018. As of June 30, 2020, the Company had $17.74
million in total assets, $4.53 million in total liabilities, and
$13.21 million in total equity. As of June 30, 2020, cash and cash
equivalents were $13,861,000 compared to $5,514,000 as of Dec. 31,
2019.
Kesselman & Kesselman, in Tel-Aviv, Israel, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 9, 2020, citing that the Company has suffered recurring
losses from operations and cash outflows from operating activities
that raise substantial doubt about its ability to continue as a
going concern.
INVESTVIEW INC: Incurs $1.2 Million Net Loss in Second Quarter
--------------------------------------------------------------
Investview, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $1.19
million on $7.75 million of net total revenue for the three months
ended Sept. 30, 2020, compared to a net loss of $1.75 million on
$7.24 million of net total revenue for the three months ended Sept.
30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $6.10 million on $13.34 million of net total revenue
compared to a net loss of $4.76 million on $14.75 million of net
total revenue for the nine months ended Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $9.71 million in total
assets, $29.32 million in total liabilities, and a total
stockholders' deficit of $19.61 million.
The Company has incurred significant recurring losses, which have
resulted in an accumulated deficit of $52,536,063 as of Sept. 30,
2020, along with a net loss of $6,101,547 for the six months ended
September 30, 2020. Additionally, as of Sept. 30, 2020, the
Company had cash of $583,955 and a working capital deficit of
$18,383,173. The Company said these factors raise substantial doubt
about its ability to continue as a going concern.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/862651/000149315220020839/form10-q.htm
About Investview
Headquartered in Salt Lake City, Utah, Investview, Inc., is a
diversified financial technology organization that operates through
its subsidiaries, to provide financial products and services to
individuals, accredited investors and select financial
institutions.
Investview reported a net loss of $21.28 million for the year ended
March 31, 2020, compared to a net loss of $4.98 million for the
year ended March 31, 2019. As of March 31, 2020, the Company had
$10.40 million in total assets, $24.66 million in total
liabilities, and a total stockholders' deficit of $14.26 million.
Haynie & Company, in Salt Lake City, Utah, the Company's auditor
since 2017, issued a "going concern" qualification in its report
dated June 29, 2020, citing that the Company has suffered losses
from operations and its current cash flow is not enough to meet
current needs. This raises substantial doubt about the Company's
ability to continue as a going concern.
IVANTI SOFTWARE: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has assigned a first-time Long-Term Issuer Default
Rating (IDR) of 'B' to Ivanti Software, Inc. The Rating Outlook is
Stable. Fitch has also assigned a 'BB-'/'RR2' rating to Ivanti's
$1.4 billion Senior Secured First Lien Credit facilities, which
will be comprised of a $175 million revolving credit facility and a
$1.26 billion First Lien Term Loan, and to the $500 million of
other First Lien indebtedness. In addition, Fitch has assigned a
'CCC+'/'RR6' rating to Ivanti's $545 million Second Lien Term Loan.
The proceeds will be used to finance Ivanti's acquisition of
MobileIron, Inc. and Pulse Secure, LLC., and refinance the existing
debt at Ivanti.
Fitch's ratings are supported by the secular growth trends for
remote working, security and endpoint management, Ivanti's sizeable
base of recurring revenues, strong EBITDA and FCF margins as well
as the enhanced product portfolio pro forma for the acquisitions.
Ivanti offers both cloud-based and on-prem solutions that
facilitate service delivery and management of end-point IT assets,
including mobile devices, in addition to its Pulse Secure VPN
products. Fitch believes that while the coronavirus pandemic has
accelerated the shift to enabling remote work, the demand for UEM,
Secure Access and remote workplace technology will continue to
grow
Fitch expects Ivanti's leverage to remain in the 6.0x-6.5x range
over the rating horizon. Ivanti's industry position, revenue scale,
and leverage profile are consistent with the 'B' rating category.
KEY RATING DRIVERS
Highly recurring and diversified revenues: On a pro forma basis,
the company has a strong base of recurring revenues, representing
over 65% of total revenues with net retention rates in excess of
105%. Ivanti is in the early stages of its transition to a
subscription/SaaS model, and Fitch expects recurring revenues will
grow to 80% of total revenues over the rating horizon, which is in
line with the company's SaaS peers in the 'B' rating category. On a
combined basis the company has over 50,000 customers and no end
vertical concentration. Fitch believes these characteristics
reflect the combined company's mission-critical product, which is
embedded in the customers workflow. Fitch also views Ivanti's
continued transition towards a subscription-based model as credit
positive, as the high levels of recurring revenue and retention
rates provide greater visibility and consistency of revenue and
cash flows.
Secular Tailwinds Across Business Segments: The proliferation of
Bring Your Own Devices (BYOD), combined with the enhanced demand
for remote working, increased cyber security concerns and the
digital transformation of customers' technology infrastructure, has
created strong demand across each of Ivanti's product offerings.
The total addressable market for the combined business is expected
to grow to $39 billion, driven by the UEM market, which is expected
to grow at a mid-30% CAGR from fiscal years 2020-2024. Fitch
believes the pandemic has accelerated the demand for both UEM and
end-point security, front ending the growth in the sector. Finally,
Fitch expects that customers will look to consolidate their
endpoint security management over the medium term. The combined
entity is well-positioned to take advantage of this shift.
Highly Fragmented and Competitive Marketplace: Ivanti operates in
highly fragmented markets across each of its products. As a result,
Fitch expects Ivanti is exposed to intensifying competition,
including from market leaders like Microsoft, IBM, Citrix, and
VMWare, who are larger, have greater financial flexibility and have
the ability to bundle and up-sell their customers at very
competitive price points. In the ITSM segment, Ivanti competes with
peers such as Service Now in the enterprise segment, and LogMeIn in
the middle market, both with strong cloud-native offerings.
Strong Free Cash Flow Characteristics: Ivanti's management has
outlined a sizeable cost rationalization program, and the
successful execution of this will result in EBITDA margins in the
40% range, in line with its at-scale software peers. Fitch expects
Ivanti to generate FCF margins in the mid-teens from fiscal 2022
onwards upon the completion of the rationalization.
Leverage to Remain Elevated: Fitch expects pro forma gross leverage
at FYE Dec. 31, 2020 of 6.4x, which is in line with its peers in
the 'B' rating category. Fitch expects leverage to remain above
6.0x over the rating horizon. Fitch believes the company will make
ongoing investments in technologies and products to keep pace with
the fast-moving industry, limiting its deleveraging primarily to
EBITDA growth. Private Equity ownership will also limit
deleveraging to optimize ROE.
DERIVATION SUMMARY
On a pro forma basis, Ivanti will primarily operate in three
end-markets, namely unified endpoint management and security,
remote access and ITSM. The broader market for endpoint security
and remote working has been growing, supported by the proliferation
of access points into secure networks, greater awareness around
security breaches and the increasing complexity of IT networks and
applications. While Fitch expects Ivanti to benefit from these
trends, its growth will be tempered by the highly competitive
landscape.
Ivanti is well-positioned for its rating given its sizeable base of
recurring revenues, strong profitability and FCF margins. On a pro
forma basis, Ivanti's EBITDA margins and FCF margins are in line
with its larger and better capitalized peers like IBM, VMWare,
LogMeIn and Citrix, while Fitch expects Ivanti's leverage to remain
higher than the aforementioned peers, and in excess of 6x range
over the rating horizon. The ratings also reflect Fitch's
expectation that despite strong secular demand for UEM and endpoint
security, Ivanti's growth will be tempered by the highly
competitive landscape in its end-markets, especially against larger
software peers who also offer a comprehensive solution.
KEY ASSUMPTIONS
Fitch's Key Assumptions within its Rating Case for the Issuer
-- Organic revenue growth in the low single-digit range over the
rating horizon, reflecting the mix shift between perpetual license
and subscription revenues as well as the unwinding of the pandemic
benefit to Pulse Secure revenues.
-- EBITDA margins are expected to stabilize above 40%, reflecting
the full impact of the proposed cost savings
-- Normalized free cash flow margins in the mid-teens.
Key Recovery Rating Assumptions
The recovery analysis assumes a going concern EBITDA that is in
line with pro forma LTM June 30, 2020 EBITDA. Fitch applies a 6.5
multiple to arrive at an enterprise value (EV) of $1.75 billion.
The multiple is higher than the median Telecom, Media and
Technology EV multiple but is in line with the Fitch employed
multiple for other 'B'-rated software companies. In the 21st
edition of Fitch's Bankruptcy Enterprise Values and Creditor
Recoveries case studies, Fitch noted nine past reorganizations in
the Technology sector with recovery multiples ranging from 2.6x to
10.8x. Of these companies, only three were in the Software sector:
Allen Systems Group, Inc.; Avaya, Inc.; and Aspect Software Parent,
Inc., which received recovery multiples of 8.4x and 5.5x,
respectively. Median M&A multiples for the sector are in the 9x
range. The 6.5x multiple is supported by Ivanti's scale, strong
margins, highly recurring revenues and strong FCF profile
-- Fitch assumes a fully drawn revolver in its recovery analysis
since credit revolvers are tapped as companies are under distress.
Fitch assumes a full draw on Ivanti's $175 million revolver.
-- Fitch estimates strong recovery prospects for the first lien
credit facilities and rates them 'BB-'/'RR2', or two notches above
Ivanti's 'B' IDR. Fitch estimates limited recovery prospects for
the second lien term loan and rates it 'CCC+'/'RR6', two notches
below Ivanti's IDR.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Expectation of gross leverage (total debt with equity credit /
operating EBITDA) sustaining below 5.5x;
-- Cash flow leverage, defined as (CFO - capex) / Total debt,
sustained above 8%;
-- FFO interest coverage sustaining above 3x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Expectation of gross leverage (total debt with equity credit /
operating EBITDA) sustaining above 7x;
-- Cash flow leverage, defined as (CFO - capex) / Total debt,
sustained below 5%;
-- Integration risks and delays in executing the cost
rationalization impair EBITDA margin improvement;
-- FFO Interest Coverage sustained below 1.50x.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Fitch believes Ivanti has a strong liquidity
profile with $40 million of cash funded to the balance sheet at the
close of the transaction. The liquidity profile is further
supported by significant free cash flow generation, in excess of
$300 million throughout the forecast period driven by cost savings
and synergies from the Pulse and Mobile Iron acquisition. Lastly,
the company has an undrawn $175 million revolving credit facility.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has made no material adjustments that are not disclosed
within the company's public filings.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, is a score
of '3'. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).
IVANTI SOFTWARE: Moody's Affirms B3 CFR, Outlook Stable
-------------------------------------------------------
Moody's Investors Service affirmed Ivanti Software, Inc.'s B3
Corporate Family Rating (CFR) and B3-PD Probability of Default
Rating (PDR). Concurrently, Moody's assigned B2 ratings to the
company's proposed first lien bank credit facilities consisting of
a $1.26 billion term loan B and $175 million revolving credit
facility. Ivanti's proposed $500 million senior secured debt which
is expected to be pari pasu with the first lien bank credit
facilities is currently unrated. Moody's also assigned a Caa2
rating to Ivanti's proposed $545 million second lien term loan. The
outlook remains stable.
Proceeds from the issuance, along with approximately $130 million
of balance sheet cash and $210 million of new cash equity will be
used to fund the company's acquisitions of MobileIron, Inc. and
Pulse Secure, LLC, fund an estimated $40 million of cash to the
balance sheet and pay associated fees and expenses.
MobileIron is expected to contribute $215 million of revenue to the
combined business. The acquisition of MobileIron will enhance
Ivanti's scale with a complementary product set of enterprise-grade
mobile endpoint management and security solutions that will
strengthen competitive positioning and cross-selling opportunities
for the combined company. Pulse Secure is expected to add $173
million of revenue. The acquisition of Pulse Secure will also boost
Ivanti's scale with a portfolio of secure network access products,
including VPN and secure remote network, application and cloud
access. Both acquisitions are expected to create significant cost
saving opportunities to the combined business.
Affirmations:
Issuer: Ivanti Software, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Assignments:
Issuer: Ivanti Software, Inc.
Senior Secured Bank Credit Facility, Assigned B2 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Assigned Caa2 (LGD6)
Outlook Actions:
Issuer: Ivanti Software, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Ivanti's B3 CFR reflects the company's very high leverage,
aggressive financial policies and significant execution risks
associated with the acquisition and integration of MobileIron and
Pulse Secure. Though weakly positioned in the B3 rating category,
Ivanti benefits from its strong niche market position in endpoint
management and security software to enterprise customers, high
proportion of recurring revenues and very high profitability.
Ivanti's primary products face competition from much larger
companies including Microsoft Corporation, BMC Software,
International Business Machines Corporation and Broadcom
Corporation (Symantec and CA), as well as numerous other niche
players. Ivanti has faced challenges through the recession brought
on by the coronavirus outbreak, particularly in its service
offerings. New license sales have also declined in 2020 though this
result was expected as the company continues to grow its SaaS and
subscription offerings. While Moody's expects Ivanti's revenues to
decline modestly in 2020, over the long term, the company has the
potential to grow in the low to mid-single-digit percent range.
As of the LTM period ended June 30, 2020 and pro forma for the
acquisitions of both MobileIron and Pulse Secure, Moody's adjusted
leverage was about 7.8x when adjusting for certain one-time
expenses and non-headcount related synergies. If Ivanti achieves
its sizable cost reductions during the integrations of MobileIron
and Pulse Secure, and grows revenues in the mid-single-digit
percent range, leverage could decline to below 7x over the next
12-18 months. Moody's expects that Ivanti will maintain positive
free cash flow to debt of approximately 1-3% through 2021.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. Ivanti is owned by private equity funds associated with
TA Associates and Clearlake Capital and is expected to maintain an
aggressive financial strategy, including potential debt-funded M&A
activity and dividend payments.
The stable outlook reflects Ivanti's good liquidity and Moody's
expectation that over the next 12-18 months Ivanti will grow EBITDA
through a combination of cost reduction activities and organic
growth across the consolidated business such that leverage will
decline toward 6x.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if the company is not on track to
reduce leverage below 7x over the next 12-18 months or if free cash
flow generation is expected to be negative on other than a
temporary basis.
Ratings could be upgraded if Ivanti successfully integrates the
acquisitions, demonstrates consistent organic growth, and sustains
Moody's adjusted leverage below 6x while also generating cash flow
of approximately 5% of total gross debt.
Ivanti Software, Inc. is a provider of IT operations management
software and security software to global enterprise customers. The
company is headquartered in Utah and owned by funds affiliated with
private equity sponsors Clearlake Capital and TA Associates.
The principal methodology used in these ratings was Software
Industry published in August 2018.
JC STRENGTH: Case Summary & 8 Unsecured Creditors
-------------------------------------------------
Debtor: JC Strength & Conditioning, Inc.
530 Central Park Overlook
Alpharetta, GA 30004
Business Description: Established in 2008, JC Strength &
Conditioning, Inc. is in the health and
fitness business.
Chapter 11 Petition Date: November 12, 2020
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 20-21528
Debtor's Counsel: William A. Rountree, Esq.
ROUNTREE, LEITMAN & KLEIN, LLC
Century Plaza I
2987 Clairmont Road, Ste 175
Atlanta, GA 30329
Tel: 404-584-1238
Fax: 404 704-0246
Email: swenger@rlklawfirm.com
Total Assets: $1,354,709
Total Liabilities: $1,353,796
The petition was signed by Justin Tway, president.
A copy of the petition containing, among other items, a list of the
Debtor's eight unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RXI2BCA/JC_Strength__Conditioning_Inc__ganbke-20-21528__0001.0.pdf?mcid=tGE4TAMA
JOHN ADAMS ACADEMIES: S&P Affirms 'BB' Charter Revenue Bond Rating
------------------------------------------------------------------
S&P Global Ratings revised the outlook to stable from negative and
affirmed its 'BB' long-term rating on the California Municipal
Finance Authority's series 2014A, 2015A, and 2015B charter revenue
bonds issued for John Adams Academies Inc. (JAA).
"The outlook revision reflects our view of the school's improved
financial performance based on unaudited fiscal 2020 results and
expectations of stronger results for fiscal 2021," said S&P credit
analyst Robert Tu.
S&P views the risks posed by COVID-19 to public health and safety
as an elevated social risk for all charter schools under the rating
agency's environmental, social, and governance factors. It believes
this is a social risk for JAA given potential decreases in state
funding that may occur as a result of recessionary pressures
affecting the state budget, or enrollment fluctuations given
uncertainty about the mode of instruction should social distancing
measures associated with the pandemic persist. Despite the elevated
social risk, S&P believes the school's environmental and governance
risk are in line with the rating agency's view of the sector as a
whole.
JW TRUCKING: Seeks to Hire Marc Garcia & Associates as Accountant
-----------------------------------------------------------------
JW Trucking LLC seeks approval from the U.S. Bankruptcy Court for
the Western District of Texas to hire Marc Garcia & Associates as
its accountant.
The firm will provide the following services:
(a) advise the Debtor with regard to its bookkeeping on a
monthly basis;
(b) prepare all necessary monthly operating reports; and
(c) perform all other accounting services for the Debtor.
Marc Garcia, CPA, disclosed in a court filing that his firm neither
holds nor represents any interest adverse to the Debtor and its
estate.
The firm can be reached through:
Marc Garcia, CPA
Marc Garcia & Associates
1951 E 37th Street, Suite A
Odessa, TX 79762
Telephone: (432) 272-2233
About JW Trucking, LLC
JW Trucking, LLC is a privately held company that operates in the
trucking industry.
JW Trucking filed its petition for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-70100)
on Aug. 20, 2020. In the petition signed by Jeffrey Waugh, Jr.,
member, the Debtor estimated $1 million to $10 million in both
assets and liabilities.
Judge Tony M. Davis oversees the case. Tarbox Law, P.C. and Marc
Garcia & Associates serve as Debtor's legal counsel and accountant,
respectively.
KING STREET: Gets Initial Order Under CCAA; MNP as Monitor
----------------------------------------------------------
King Street Company Inc., The King Street Hospitality Group Inc.,
Bonta Trading Co. Inc., 2268218 Ontario Inc., 1733667 Ontario
Limited, The King Street Food Company Inc., The King Street
Restaurant Company Inc., 2112047 Ontario Ltd., Ji Yorkdale Inc., Ji
Square One Inc., 1771669 Ontario Inc. , Cxbo Inc., 2608765 Ontario
Inc., 2272224 Ontario Inc., 2327729 Ontario Inc., 2577053 Ontario
Inc., 2584858 Ontario Inc., 2621298 Ontario Inc., 2641784 Ontario
Inc., and 2656966 Ontario Inc., sought and obtained from The
Ontario Superior Court of Justice (Commercial List) an order under
the Companies' Creditors Arrangement Act. Pursuant to The Initial
Order, MNP Ltd. has been appointed as CCAA monitor.
According to court documents, the COVID-19 Pandemic has resulted in
unprecedented liquidity issues for the Companies.
The Companies' senior secured lenders, led by Third Eye Capital
Corporation, in its capacity as the administrative agent for and on
behalf of certain lenders under the Companies' senior secured
credit facilities have facilitated the the Companies growth
objectives and brand development efforts since 2015. Recently,
throughout the COVID-19 Pandemic, the lenders have supported the
Companies' attempts to manage the devastating impacts of the
pandemic on its business.
The Companies' operations need to be restructured through an
orderly process under the CCAA. A Court-supervised process will
allow the Companies to develop and oversee an orderly restructuring
of its business that will allow its brands to continue to thrive
when more favorable conditions return by way of a right-sizing of
its balance sheet and the implementation of a sales and investment
solicitation process.
The Initial Order is available at the Monitor's website at
https://mnpdebt.ca/en/corporate/corporate-engagements/king-street-restaurant-group.
Monitor can be reached at:
MNP Ltd.
111 Richmond Street West
Toronto, Ontario M5H 2G4
Sheldon Title
Tel: (416) 263-6945
Fax: (416) 323-5240
Email: sheldon.title@mnp.ca
Counsel to the Monitor:
Miller Thomson LLP
40 King Street West, Suite 5800
Toronto, Ontario M5H 4A9
Bobby Sachdeva
Tel: (905) 532-6670
Email: bsachdeva@millerthomson.com
Craig Mills
Tel: (416) 595-8596
Email: cmills@millerthomson.com
Counsel to The King Street:
Gowling WLG (CANADA) LLP
1 First Canadian Place
100 King Street West Suite 1600
Toronto, Ontario M5X 1G5
Virginie Gauthier
Tel: (416) 844-5391
Email: virginie.gauthier@gowlingwlg.com
Thomas Gertner
Tel: (416) 369-4618
Fax: (416) 862-7661
Email: thomas.gertner@gowlingwlg.com
Counsel to Third Eye Capital Corporation and BENNETT JONES LLP
Third Eye Capita Corporation
2830 - 181 Bay Street
Toronto, Ontario M5J 2T3
Adrienne Love
Tel: (416) 601-2280
Fax: (416) 981-3393
Email: adrienne@thirdeyecapital.com
Peter Neelands
Tel: (416) 601-9297
Fax: (416) 981-3393
Email: peter@thirdeyecapital.com
Bennett Jones LLP
100 King Street West, Suite 3400
Toronto, Ontario M5X 1A4
Sean Zweig
Tel: (416) 777-6254
Email: zweigs@bennettjones.com
Jesse Mighton
Tel: (416) 777-6255
Email: mightonj@bennettjones.com
King Street Company Inc. owns, develops and operates high-end
restaurants in the City of Toronto and the surrounding areas. The
Company has historically operated under the following brands (i)
Jacobs and Co Steakhouse; (ii) Buca; (iii) Bar Buca; (iv) La
Banane; (v) Jamie's Italian; and (vi) CXBO.
KRISJENN RANCH: Seeks Plan Exclusivity Extension Thru Feb. 11
-------------------------------------------------------------
KrisJenn Ranch, LLC, and its affiliates request the U.S. Bankruptcy
Court for the Western District of Texas, San Antonio Division, to
extend the exclusive periods for filing a Chapter 11 plan until
February 11, 2021, and to solicit and confirm their plan until
April 25, 2021.
The Ranch and a 60-mile pipeline and right of way are encumbered by
a $5.9 million loan from Mcleod Oil related to an investment in a
pipeline and its right of way.
Longbranch Energy, L.P., and DMA Properties, Inc. have claimed
disputed interests in the Pipeline. The issues regarding the
pipeline are being litigated in Adversary Number 20-05027, which
was set for trial on December 7, 2020. This trial date has since
been continued to January 11, 2021.
The Debtors need the time to resolve the litigation to determine
the terms for their plan of reorganization. Once the litigation is
resolved, a confirmable plan will be promptly filed; however, a
plan proposed would likely be significantly different from the
final plan resulting in unnecessary expenses. The Debtors are
requesting a second extension in the exclusivity period due to the
postponed trial date.
Absent an extension, the Debtors' exclusivity period is set to
terminate on November 25, 2020.
A copy of the Debtors' Motion to Extend is available from
PacerMonitor.com at https://bit.ly/38opXEt at no extra charge.
About KrisJenn Ranch
KrisJenn Ranch, LLC, a privately held company in the livestock
farming industry, KrisJenn Ranch, LLC Series Uvalde Ranch and
KrisJenn Ranch, LLC Series Pipeline Row sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Lead Case No.
20-50805) on April 27, 2020.
At the time of the filing, KrisJenn Ranch, LLC disclosed total
assets of $16,246,409 and total liabilities of $6,548,315.
Judge Ronald B. King oversees the cases. Muller Smeberg PLLC is
Debtors' legal counsel.
LAKELAND TOURS: Joint Prepackaged Plan Confirmed by Judge
---------------------------------------------------------
Judge James L. Garrity, Jr. has entered findings of fact,
conclusions of law and order confirming the Amended Joint
Prepackaged Chapter 11 Plan of Reorganization of Lakeland Tours,
LLC and its Debtor Affiliates.
Article III of the Plan provides the same treatment for each Claim
or Interest within a particular class unless the Holder of a
particular Claim or Interest has agreed to a less favorable
treatment with respect to such Claim or Interest. The Plan,
therefore, satisfies the requirements of section 1123(a)(4) of the
Bankruptcy Code.
The Plan and the various documents and agreements set forth in the
Plan Supplement provide adequate means for the Plan's
implementation. The Plan, therefore, satisfies the requirements of
Section 1123(a)(5) of the Bankruptcy Code.
The Debtors proposed the Plan in good faith and not by any means
forbidden by law. In so determining, the Bankruptcy Court has
examined the totality of the circumstances surrounding the filing
of the Chapter 11 Cases, the Plan itself, the process leading to
confirmation of the Plan, and the transactions to be implemented
pursuant thereto.
A full-text copy of the order dated September 15, 2020, is
available at https://tinyurl.com/yxqqrkkh from PacerMonitor at no
charge.
About Lakeland Tours
Lakeland Tours, LLC and its affiliates, including WorldStrides
Holdings, LLC, provide full-service educational travel and
experiential learning programs domestically and internationally for
students from K12 to graduate level. They are one of the largest
accredited U.S. travel companies, providing organized educational
travel and other experiential learning programs for more than
550,000 students in 2019.
WorldStrides claims to be the largest student educational travel
company in the country. WorldStrides has provided a variety of
educational travel programs to more than two million elementary,
middle, and high school students since its inception in 1967.
Lakeland Tours and certain of its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No. 20-11647) on July 20, 2020. Kellie Goldstein, chief financial
officer, signed the petitions.
At the time of the filing, the Debtors had consolidated assets of
$1 billion to $10 billion and consolidated liabilities of $1
billion to $10 billion.
The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis
International, LLP as their bankruptcy counsel, KPMG LLP as
financial advisor, Houlihan Lokey Capital Inc. as investment
banker, and Daniel J. Edelman Holdings Inc. as communications
consultant and advisor. Stretto is Debtors' notice and claims
agent.
LAKES EDGE: Taps Hatfield Mountcastle as Real Estate Counsel
------------------------------------------------------------
Lakes Edge Group, LLC seeks approval from the U.S. Bankruptcy Court
for the Middle District of North Carolina to hire Hatfield,
Mountcastle, Deal, Van Zandt & Mann, LLP as its real estate
counsel.
The firm will represent the Debtor in its real estate closing for
the refinancing of the loan for the property located at 301
Walkertown Ave., Winston Salem, N.C.
Hatfield Mountcastle will be paid a fee of $30,000 for the
refinancing of the loan for the property.
The firm is a "disinterested person" as that term is defined in
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
R. Brandt Deal, Esq.
Hatfield, Mountcastle, Deal, Van Zandt & Mann, LLP
2990 Bethesda Place, Ste. 605-C
Winston Salem, NC 27103
About The Lakes Edge Group
The Lakes Edge Group, LLC classifies its business as single asset
real estate (as defined in 11 U.S.C. Section 101(51B)).
The Lakes Edge Group filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Case No.
20-50715) on Sept. 24, 2020. Mark Fletcher, authorized
representative, signed the petition.
At the time of the filing, the Debtor had estimated assets of less
than $50,000 and estimated liabilities of $1 million to $10
million.
Judge Lena M. James oversees the case.
Bennett-Guthrie PLLC is the Debtor's legal counsel.
LAMPKINS PATTERSON: Court Approves Disclosures and Confirms Plan
----------------------------------------------------------------
Judge Jerry A. Funk has entered an order approving Lampkins
Patterson, Inc.'s Amended Disclosure Statement is approved and
confirming the Debtor's Second Amended Plan of Reorganization.
The Plan was amended in open Court to include the following:
(a) As to Article V11, paragraph 7.01 Property of the Estate;
Release of Liens: should be amended to read as follows:
"The Debtor will retain all property of the estate and such
property shall revest in the Debtor at discharge. Thereafter, the
Debtor may use, acquire and dispose of its property free of any
restrictions of the Bankruptcy Code, the Bankruptcy Rules, and the
Bankruptcy Court except as specifically provided in the Plan or the
order confirming Plan. As of the effective date of this Chapter 11
Plan, all property retained by the Debtor and sold shall be free
and clear of any and all liens and interests except as specifically
provided in the Plan or the order confirming Plan."
The Plan was further modified by 11 U.S.C. Sec.1129 (b) motions
filed as to Class No. 4, and Order was entered on the said motion.
Except as modified by the Plan or the Plan Confirmation Order,
secured creditors shall retain any lien on property in which the
estate has an interest to the extent of the value of such a
creditor's interest in the estate's interest in such property or as
agreed between the parties in the Debtor's Chapter 11 Plan of
Reorganization.
A copy of the Plan Confirmation Order is available at:
https://cdn.pacermonitor.com/pdfserver/M7CLOHQ/131592054/Lampkins_Patterson_Inc__flmbke-19-03776__0088.0.pdf
About Lampkins Patterson
Lampkins Patterson Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03776) on Oct. 4,
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 Jerry A. Funk. The
Debtor tapped Rehan N. Khawaja, Esq., at the Law Offices of Rehan
N. Khawaja, as its legal counsel.
LIZZA EQUIPMENT: Court Confirms Liquidating Plan
------------------------------------------------
Judge Michael B. Kaplan has entered an order confirming the Plan of
Liquidation of Lizza Equipment Leasing, LLC.
The Court in September preliminarily approved the Disclosure
Statement and set a Nov. 5 hearing to consider final approval of
the Disclosure Statement and confirmation of the Plan.
Following a hearing, the judge confirmed the Second Amended Plan of
Orderly Liquidation filed by the Debtor on Oct. 30, 2020.
The Second Amended Plan filed by the Debtor is amended and
modified to substitute Robert S. Dowd, Esq., as Plan Administrator
and delete reference to Wasserman, Jurista & Stolz, P.C.
All objections to confirmation of the Plan be and are overruled.
A copy of the Plan Confirmation Order is available at:
https://www.pacermonitor.com/view/2GHTXYA/Lizza_Equipment_Leasing_LLC__njbke-19-21763__0342.0.pdf
Counsel to the Debtor-in-Possession:
DANIEL M. STOLZ, ESQ.
WASSERMAN, JURISTA & STOLZ, P.C.
110 Allen Road, Suite 304
Basking Ridge, NJ 07920
Phone: (973) 467-2700
Fax: (973) 467-8126
About Lizza Equipment Leasing
Azzil Granite Materials is a supplier of high friction granite
aggregates for the New York City and Long Island market. Magnolia
Associates owns a 134-acre property with quarry located in White
Hall, N.Y., which is valued by the company at $15 million.
Based in Hackettstown, N.J., Lizza Equipment Leasing, LLC and its
affiliates, Azzil Granite Materials LLC and Magnolia Associates
LLC, sought Chapter 11 protection (Bankr. D.N.J. Lead Case No.
19-21763) on June 12, 2019. In the petitions signed by Carl J.
Lizza, co-managing member, Lizza Equipment Leasing disclosed $90 in
assets and liabilities of $987,830; Azzil Granite Materials
disclosed total assets of $813,825 and total liabilities of
$23,859,263; and Magnolia Associates disclosed total assets of
$15,317,480, and total liabilities of $13,137,533.
Judge Michael B. Kaplan oversees the cases.
Daniel M. Stolz, Esq., at Wasserman Jurista & Stolz, P.C., is the
Debtors' bankruptcy counsel.
LKQ CORP: Egan-Jones Hikes Sr. Unsecured Debt Ratings to BB-
------------------------------------------------------------
Egan-Jones Ratings Company, on November 6, 2020, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by LKQ Corporation to BB- from B+.
Headquartered in Chicago, Illinois, LKQ Corporation offers
automotive products and services.
MAD RIVER: Seeks to Hire Paul A. Beck as Bankruptcy Counsel
-----------------------------------------------------------
Mad River Estates, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of California to hire the Law
Office of Paul A. Beck, A Professional Corporation, as its
bankruptcy counsel.
The firm will provide the following services in connection with the
Debtor's Chapter 11 case:
a. advise Debtor regarding its rights, responsibilities,
duties, powers and roles;
b. advise Debtor with respect to its bankruptcy estate and the
rights, claims and interests of creditors and other parties, and
consult with the official committee of creditors holding unsecured
claims;
c. file legal applications, pleadings and documents;
d. appear at all hearings and in all proceedings;
e. represent Debtor in the context of its Chapter 11 case and,
potentially, in any adversary proceedings or contested matters;
f. advise Debtor regarding any potential sale of its assets
and in negotiations concerning a plan of reorganization;
g. assist in investigating the acts, conduct, assets,
liabilities, and financial condition of Debtor;
h. advise Debtor regarding its rights with respect to its
creditors, any creditors committee, and third parties; and
i. perform other necessary legal services for Debtor in
connection with its bankruptcy case.
The firm's professionals who will mainly provide the services and
their hourly rates are:
Paul A. Beck (Attorney) $450
Raychael Trear Urquidi (Paralegal) $95
The firm is requesting that the court approve the Debtor's payment
of a post-petition retainer of $65,000 for its initial services.
The firm has further advised the Debtor of its practice to charge
professional fees for each attorney and paraprofessional involved
in the case, that currently, its hourly rates range from $375 to
$495 and its paraprofessionals' hourly rates range from $75 to
$225, and that wherever possible, the firm will utilize the
services of less highly compensated attorneys and paraprofessionals
for services suited to their particular skills and expertise.
Paul A. Beck, Esq., a principal at the Law Offices of Paul A. Beck,
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:
Paul A. Beck, Esq.
Law Offices of Paul A. Beck
13701 Riverside Drive, Suite 202
Sherman Oaks, CA 91423
Telephone: (818) 501-1141
Facsimile: (818) 501-1241
Email: pab@pablaw.org
About Mad River Estates LLC
Mad River Estates, LLC is a Korbel, Calif.-based company engaged in
activities related to real estate.
Mad River Estates sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-10470) on Aug. 14,
2020. Dean Bornstein, the company's manager, signed the petition.
At the time of the filing, Debtor had estimated assets of between
$1 million to $10 million and liabilities of the same range.
Paul A. Beck, APC is Debtor's legal counsel.
MALLINCKRODT PLC: Cole, Akin Gump Represent Opioid Claimants
------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Cole Schotz P.C. and Akin Gump Strauss Hauer &
Feld LLP submitted a verified statement to disclose that they are
representing the official Committee of Opioid Related Claimants in
the Chapter 11 cases of Mallinckrodt PLC, et al.
The Debtors are pharmaceutical companies that manufacture and sell,
among other products, opioid pain medications such as hydrocodone
and oxycodone. These two opioid products have historically
accounted for a significant percentage of the Debtors' total sales,
including approximately 20% of the Debtors' total sales in 2019.
The Debtors have been named as defendants in thousands of lawsuits
filed in the state and federal courts as a result of their role in
the ongoing opioid epidemic that has wracked this country and
others and resulted in hundreds of thousands of deaths—and
continues to result in approximately 150 deaths each day.
On October 12, 2020, the Debtors commenced voluntary cases under
chapter 11 of title 11 of the United States Code.
On October 27, 2020, the United States Trustee for Region 3
appointed seven opioid claimants to serve on the Opioid Claimants
Committee in the Chapter 11 Cases pursuant to Bankruptcy Code
section 1102(a)(1). The Opioid Claimants Committee currently
comprises the following entities and persons: (1) Brendan Berthold;
(2) Blue Cross and Blue Shield Association; (3) Lyda Haag; (4)
Garret Hade; (5) Life Point Health System; (6) Michael Masiowski,
M.D.; and (7) Kathy Strain.
The Members understand the Opioid Claimants Committee to have been
appointed in recognition of the outsized role that the Debtors'
opioid liability has played in the Debtors' determination to
commence these Chapter 11 Cases. Indeed, by some estimates the
Debtors produced 38% of the opioids manufactured in the United
States between 2006 and 2012. Moreover, while the Members are all
private individuals and corporations, a significant number of
opioid plaintiffs are governmental entities.
The Opioid Claimants Committee Members include the following
claimants asserting claims arising from the Debtors' actions:
* Brendan Berthold's wife Kelly was addicted to prescription
opioids, including those manufactured by the Debtors, for
several years, and ultimately died in her home on April 18,
2012 from cardiorespiratory arrest as a result of taking
opioid medications. Prior to her death, she worked in
healthcare as a Health Information Administrator, and
previously as a caregiver in a nursing home for retired nuns.
Kelly had planned to start a home healthcare provider
franchise, because she found that serving others' most basic
needs was the most rewarding and worthwhile time of her life.
Mr. Berthold became a plaintiff in a class action against
several pharmaceutical companies, including the Debtors, in
2020. Mr. Berthold's unliquidated claims include litigation
claims based on the wrongful death of his wife and loss of
consortium.
* BCBS Association is a national association of 36 independent,
community-based Blue Cross and Blue Shield companies. The
BCBS Companies provide healthcare coverage to one-third of
all Americans, including approximately 5.5 million federal
employees and annuitants who are members of a health plan
established under the Federal Employee Health Benefits Act
that BCBSA administers. BCBSA's claims arise from payments of
excessive amounts for prescription medications used by
members of this Federal Employee Health Benefit Plan and for
other amounts paid for the treatment of illnesses, injuries,
and addiction sustained by members of this plan from
consumption of the Debtors' drugs, and costs that would not
have been incurred but for the actions of the Debtors.
* Lyda Haag became addicted after being prescribed opioids,
including those manufactured by the Debtors, to treat pain
resulting from aggravation of neck injuries in a car
accident. As a result of her opioid dependency during
pregnancy, Ms. Haag's son was diagnosed with NAS at birth.
Ms. Haag filed an action against Mallinckrodt seeking to be
named as class representative in a lawsuit seeking to
establish a medical monitoring program for children born
addicted to opioids and securing compensation for those
children. Ms. Haag's unliquidated claims comprise a putative
class action filed in the multi-district litigation currently
pending in the Northern District of Ohio seeking medical
monitoring and personal injury damages.
* Garrett Hade became addicted after being prescribed opioids,
including those manufactured by the Debtors, in his youth
beginning in 2005 for various minor injurious resulting from
skateboarding. Following a years-long cycle through jails,
detoxes, and hospitals caused by his addition, as well as a
two-year span during which he was homeless, Mr. Hade began
his recovery in 2015 with a stable recovery residence and a
peer support network. Since then, Mr. Hade has been a
dedicated advocate for the victims of the opioid crisis, co-
founding The Voices Project as a non-profit organization
dedicated to shattering the stigma associated with addiction
and empowering others to share their own recovery stories.
Mr. Hade has also worked to advance policy reforms for the
treatment of substance use disorder, including working on
federal and state legislation dedicated to establishing best
practices and reforming the treatment industry. Mr. Hade's
claims are unliquidated and, when filed, will include claims
based on personal injury, including damages for inducing the
unnecessary prescription of opioid medication, resulting in
severe personal injury, addiction, overdoses, lost wages, and
emotional injury.
* Life Point is a health system with 89 hospital campuses
spread throughout 30 states in rural, suburban, and urban
communities. Life Point's hospitals have been on the
frontline of the opioid crisis, and have borne the brunt of
uncompensated and undercompensated care for harm inflicted by
the Debtors. Before the Debtors commenced the Chapter 11
Cases, Life Point and its associated hospitals were
asserting claims for these harms in litigation under the
federal RICO statute and state RICO statutes, as well as
under theories of nuisance, negligence, violation of
consumer protection statutes, fraud and deceit, civil
conspiracy, and unjust enrichment. Life Point's damages
include: (1) the cost of opioids; (2) the cost of adapting
operations in response to the opioid crisis; and (3)
unreimbursed costs of providing treatment relating to opioid
use.
* Michael Masiowski, M.D. is an emergency room physician who
has provided emergency opioid treatment services to patients
who were uninsured, were indigent or otherwise eligible for
services through programs such as Medicaid. Dr. Masiowski, is
the class representative for a putative class of emergency
room physicians who have been forced to provide an inordinate
amount of emergency room services related to the "opioid
epidemic," either for no compensation or for compensation
substantially below market rates. Other damages relate to
reimbursed expenses incurred. Dr. Masiowski's putative class
action against certain of the Debtors, along with other
opioid manufacturers, seeks damages for these harms based on
RICO violations, various forms of negligence and fraud.
* Kathy Strain is a national advocate for family members
affected by their loved ones' addiction to opioids. In 2018,
Ms. Strain lost a child to an opioid overdose. In addition,
Ms. Strain has adult children in recovery from opioid
addiction after taking prescribed opioids. Ms. Strain's
grandchild, whom she has custody of, was born with NAS after
the child's mother became addicted to prescribed opioids,
including those manufactured by the Debtors. As a result of
in utero exposure to opioids, Ms. Strain's grandchild was
diagnosed at birth with NAS, among other health ailments.
Thereafter, Ms. Strain's grandchild suffered neonatal opioid
withdrawal syndrome. Ms. Strain's unliquidated claims
comprise personal injury damages.
As of Nov. 5, 2020, each Opioid Claimants Committee Member and
their disclosable economic interests are:
Brendan Berthold
Jonathan Schulman
Slater Slater Schulman LLP
488 Madison Ave. 20th Floor
New York, NY 10022
* Unliquidated unsecured claim of at least $2.5 million on the
basis of wrongful death.
Blue Cross and Blue Shield Association
1310 G Street
NW Washington, DC 20005
* Unliquidated unsecured claim including claims for costs of
covering treatment for opioid use disorder.
Lyda Haag
Donald Creadore
The Creadore Law Firm, P.C.
450 Seventh Ave. Ste. 1408
New York, NY 10123
* Unliquidated unsecured class claim on the basis of medical
monitoring costs and unliquidated unsecured class claim for
direct compensation to each NAS victim.
Garrett Hade
c/o Anne Andrews
Andrews & Thorton, AAL, ALC
4701 Von Karman Ave., Suite 300
Newport Beach, CA 92660
* Unliquidated unsecured claim on the basis of personal injury,
including addiction, lost wages and emotional injury.
Life Point Health System
330 Seven Springs Way
Brentwood, TN 37027
* Unliquidated unsecured claims.
Michael Masiowski, M.D.
c/o Paul S. Rothstein
626 NE 1st Street
Gainesville, FL 32601
* Unliquidated unsecured class claim totaling of at least $100
million on the basis of RICO violations, various forms of
negligence and fraud.
Kathy Strain
c/o Harold D. Israel
Levenfeld Pearlstein, LLC
2 N. LaSalle Suite 1300
Chicago, IL 60602
* Unliquidated unsecured claim of at least $1 million on the basis
of personal injury to her granddaughter, who suffers from the
long term effects of NAS.
Nothing contained in this Verified Statement should be construed as
a limitation upon, or waiver of, any Opioid Claimants Committee
Member's rights to assert, file and/or amend its claim(s) in
accordance with applicable law and any orders entered in these
cases establishing procedures for filing proofs of claim.
The Opioid Claimants Committee reserves the right to amend or
supplement this Verified Statement in accordance with the
requirements set forth in Bankruptcy Rule 2019.
Proposed Counsel to the Committee of Opioid Related Claimants can
be reached at:
COLE SCHOTZ P.C.
Justin R. Alberto, Esq.
Seth Van Aalten, Esq.
Sarah A. Carnes, Esq.
Andrew J. Roth-Moore, Esq.
500 Delaware Avenue, Suite 1410
Wilmington, DE 19801
Telephone: (302) 652-3131
Facsimile: (302) 652-3117
Email: jalberto@coleschotz.com
svanaalten@coleschotz.com
scarnes@coleschotz.com
aroth-moore@coleschotz.com
- and –
AKIN GUMP STRAUSS HAUER & FELD LLP
Arik Preis, Esq.
Mitchell P. Hurley, Esq.
Sara L. Brauner, Esq.
One Bryant Park
New York, NY 10036
Telephone: (212) 872-1000
Facsimile: (212) 872-1002
Email: apreis@akingump.com
mhurley@akingump.com
sbrauner@akingump.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/35opUGs and https://bit.ly/3nt5d2H
About Mallinckdrodt
Mallinckrodt is a global business consisting of multiple
wholly-owned subsidiaries that develop, manufacture, market and
distribute specialty pharmaceutical products and therapies. The
company's Specialty Brands reportable segment's areas of focus
include autoimmune and rare diseases in specialty areas like
neurology, rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.com/for
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware in the U.S. (Bankr. D.
Del. Lead Case No. 20-12522) to seek approval of a restructuring
that would reduce total debt by $1.3 billion and resolve
opioid-related claims against them.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes &
Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
MALLINCKRODT PLC: Future Claimants' Rep Hires Special Counsel
-------------------------------------------------------------
Roger Frankel, the proposed legal representative for Future
Claimants in the chapter 11 cases of Mallinckrodt plc and its
debtor affiliates, seeks approval from the U.S. Bankruptcy Court
for the District of Delaware to employ Greenberg Traurig, LLP as
his special counsel.
The firm will provide special litigation, transactional, and
regulatory services which may include, but are not limited to:
(a) any estimation proceedings in these Chapter 11 Cases,
including with respect to any analyses, reports or testimony any
expert may provide relating to estimation of opioid-related claims,
and any claims evaluation and distribution procedures established
for the processing and payment of opioid related claims;
(b) litigation in connection with confirmation proceedings, or
if necessary, in connection with proceedings for any wind-down or
liquidation;
(c) transactions in which the Proposed Future Claimants'
Representative has an interest, including any settlements with the
Debtors and/or with one or more parties-in-interest or other
parties; and
(d) other activities incidental thereto or necessary for
Greenberg Traurig to provide the services contemplated hereby.
The Proposed Future Claimants' Representative, along with his
retained professionals, will work together to ensure that there is
no unnecessary duplication of effort or cost.
Greenberg Traurig's current customary hourly rates are as follows:
Junior Associates $495
Senior Associates $1,450
Paralegals $95 - $360
The firm will also seek reimbursement for reasonable and necessary
expenses incurred in connection with these chapter 11 cases.
In addition to the foregoing expenses, during the pendency of these
Chapter 11 Cases, Greenberg Traurig will retain Laurence M.
Westreich, M.D. as a medical consultant to assist the Proposed
Future Claimants' Representative with medical issues relating to
opioid use, abuse and addiction. The Proposed Future Claimants'
Representative and Greenberg Traurig estimate that Dr. Westreich's
monthly fees will be approximately $5,000.
The Debtors provided Greenberg Traurig with an advance payment
retainer. Greenberg Traurig applied the retainer to issued
invoices, and the Debtors would thereafter replenish the retainer.
As of the filing on this Application, the retainer totaled
$145,047. Greenberg Traurig will apply the remaining retainer to
its postpetition fees and expenses as such amounts become payable.
Greenberg Traurig also made the following disclosures in response
to the request for additional information set forth in Paragraph
D.1 of the Revised U.S. Trustee (UST) Guidelines:
Question: Did you agree to any variations from, or alternatives to,
your standard or customary billing arrangements for this
engagement?
Answer: No.
Question: Do any of the professionals included in this engagement
vary their rate based on the geographic location of the bankruptcy
case?
Answer: No.
Question: If you represented the client in the 12 months
pre-petition, disclose your billing rates and material financial
terms for the pre-petition engagement, including any adjustments
within the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Answer: As noted above, the Proposed Future Claimants'
Representative retained Greenberg Traurig to provide legal services
pursuant to the Engagement Letter. The billing rates and financial
terms set forth in the Engagement Letter are substantially the same
as those set forth in the Application and this Declaration, and are
consistent with Greenberg Traurig's customary billing practices.
Question: Has your client approved your prospective budget and
staffing plan and, if so, for what budget period.
Answer: In accordance with the UST Guidelines, Greenberg Traurig
and the Proposed Future Claimants' Representative expect to develop
a budget and staffing plan for the period through and including
December 31, 2020.
Nancy A. Peterman, a shareholder at Greenberg Traurig, LLP,
disclosed in court filings that the firm is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code and does not hold or represent any interest that is
materially adverse to the Proposed Future Claimants' Representative
or the interests of Future Claimants.
The firm can be reached through:
Nancy A. Peterman, Esq.
GREENBERG TRAURIG, LLP
77 West Wacker Drive, Suite 3100
Chicago, IL 60601
Telephone: (312) 456-8410
Facsimile: (312) 889-0341
E-mail: petermann@gtlaw.com
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. The company's
Specialty Brands reportable segment's areas of focus include
autoimmune and rare diseases in specialty areas like neurology,
rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12522) to
seek approval of a restructuring that would reduce total debt by
$1.3 billion and resolve opioid-related claims against them. The
petitions were signed by Bryan M. Reasons, executive vice president
and chief financial officer.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
On October 13, 2020, the Debtors filed a motion for entry of an
order appointing Roger Frankel as the Future Claimants'
Representative in the Chapter 11 Cases. Mr. Frankel has tapped
Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as his
counsel; Greenberg Traurig, LLP as special counsel; Ducera Partners
LLC as investment banker; and NERA Economic Consulting as
consultant.
MALLINCKRODT PLC: Future Claimants' Rep Taps Investment Banker
--------------------------------------------------------------
Roger Frankel, the proposed legal representative for Future
Claimants in the chapter 11 cases of Mallinckrodt plc and its
debtor affiliates, seeks approval from the U.S. Bankruptcy Court
for the District of Delaware to employ Ducera Partners LLC as
investment banker.
The firm will render the following general investment banking and
transaction services:
(a) evaluate from a financial perspective any proposed
resolution of claims made, and claims which may be asserted in the
future, against the Debtors;
(b) assess the ability of the Debtors to contribute to the
resolution of the claims, as well as the exposure, if any, of any
legacy owners of the Debtors;
(c) assist with an assessment of insurance coverage,
indemnification rights, and supplier, distributor and retailer
liability exposure;
(d) assist with analysis and evaluation of alternative
potential resolution scenarios and strategic alternatives available
to the Debtors;
(e) provide deposition and hearing testimony, as such may be
necessary, relating to matters on which Ducera has been engaged to
perform its investment banking services;
(f) assist with the evaluation, arrangement, structuring,
negotiation, and effectuation of a Transaction;
(g) assess and analyze the Debtors' financial liquidity and
evaluate alternatives to improve such liquidity in connection with
a Transaction; and
(h) provide such other investment banking services as may be
agreed upon by Ducera, proposed counsel to the Proposed Future
Claimants' Representative and the Proposed Future Claimants'
Representative.
The Proposed Future Claimants' Representative, along with his
retained professionals, will work together to ensure that there is
no unnecessary duplication of effort or cost.
The Debtors and Ducera have agreed that Ducera shall, in respect of
its services, be compensated under the following fee structure:
a. Monthly Fee. A non-refundable monthly cash fee of $150,000,
due and payable on the first day of each month during the
engagement until the earlier of the consummation of a Transaction
and the termination of Ducera's services for the Proposed Future
Claimants' Representative; plus
b. Completion Fee. A $3,500,000 fee payable upon consummation
of a Transaction; provided, however, that Ducera shall grant the
Proposed Future Claimants' Representative a discount on the
Completion Fee equal to $75,000 for each month commencing six
months after the commencement of the Monthly Advisory Fee;
provided, further, that the Ducera Discount shall only apply if any
and all outstanding invoices have been paid before, or in
connection with, the consummation of the Transaction and provided
further that Ducera shall receive a minimum of $2,187,500; plus
c. Expense Reimbursement. Reimbursement for all reasonable and
documented out-of-pocket expenses incurred in connection with the
services provided to the Proposed Future Claimants'
Representative.
Agnes K. Tang, a partner of Ducera Partners LLC, disclosed in court
filings that the firm is a "disinterested person" as that term is
defined in section 101(14) of the Bankruptcy Code and does not hold
or represent any interest that is materially adverse to the
Proposed Future Claimants' Representative or the interests of
Future Claimants.
The firm can be reached through:
Agnes K. Tang
DUCERA PARTNERS LLC
11 Times Square, 36th Floor
New York, NY 10036
Telephone: (212) 671-9700
Facsimile: (212) 671-9701
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. The company's
Specialty Brands reportable segment's areas of focus include
autoimmune and rare diseases in specialty areas like neurology,
rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12522) to
seek approval of a restructuring that would reduce total debt by
$1.3 billion and resolve opioid-related claims against them. The
petitions were signed by Bryan M. Reasons, executive vice president
and chief financial officer.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
On October 13, 2020, the Debtors filed a motion for entry of an
order appointing Roger Frankel as the Future Claimants'
Representative in the Chapter 11 Cases. Mr. Frankel has tapped
Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as his
counsel; Greenberg Traurig, LLP as special counsel; Ducera Partners
LLC as investment banker; and NERA Economic Consulting as
consultant.
MALLINCKRODT PLC: Future Claimants' Rep Taps NERA as Consultant
----------------------------------------------------------------
Roger Frankel, the proposed legal representative for Future
Claimants in the chapter 11 cases of Mallinckrodt plc and its
debtor affiliates, seeks approval from the U.S. Bankruptcy Court
for the District of Delaware to employ NERA Economic Consulting as
consultant.
The firm will render these services:
(a) Advise the Proposed Future Claimants' Representative with
respect to matters involving present and future opioid-related
personal injury claims against the Debtors;
(b) Estimate the number and value of, and provide any analysis
with respect to, present and future opioid-related personal injury
claims against the Debtors;
(c) Assist the Proposed Future Claimants' Representative in
negotiations with various parties regarding the Debtors'
opioid-related liability;
(d) Perform due diligence regarding the Debtors' current,
potential and overall opioid-related liability;
(e) Assist in the prosecution of Proposed Future Claimants'
Representative's positions; and
(f) Render such other advisory services as the Proposed Future
Claimants' Representative or his counsel may deem necessary and
consistent with the role of a consultant for a future claimants'
representative.
The services to be rendered by NERA will not duplicate the services
to be rendered by any other professionals retained by the Proposed
Future Claimants' Representative in these Chapter 11 Cases.
The hourly rates for NERA's professionals for this type of
assignment and for this engagement team are as follows:
Denise Martin $975.00
Stephanie Plancich $695.00
Janeen McIntosh $490.00
Research Analysts $330.00 - $425.00
Administrative Assistants $95.00
In addition, NERA will be reimbursed for its reasonable and
necessary out-of-pocket expenses incurred in connection with its
engagement.
Prior to the Petition Date, the Debtors provided NERA with advance
payment retainers in order to pay its prepetition fees and
expenses. After reconciling, the remaining balance of the retainer
as of the Petition Date is $357,628.50. Subject to further order of
this Court, NERA will apply the remaining Retainer to its
post-petition fees and expenses when such amounts become payable.
Denise N. Martin, a managing director with NERA Economic
Consulting, disclosed in court filings that the firm is a
"disinterested person" as that term is defined in section 101(14)
of the Bankruptcy Code and does not hold or represent any interest
that is materially adverse to the Proposed Future Claimants'
Representative or the interests of Future Claimants.
The firm can be reached through:
Denise N. Martin
NERA ECONOMIC CONSULTING
1166 Avenue of the Americas
New York, NY 10036
Telephone: (212) 345-3000
Facsimile: (212) 345-4650
E-mail: denise.martin@nera.com
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. The company's
Specialty Brands reportable segment's areas of focus include
autoimmune and rare diseases in specialty areas like neurology,
rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12522) to
seek approval of a restructuring that would reduce total debt by
$1.3 billion and resolve opioid-related claims against them. The
petitions were signed by Bryan M. Reasons, executive vice president
and chief financial officer.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
On October 13, 2020, the Debtors filed a motion for entry of an
order appointing Roger Frankel as the Future Claimants'
Representative in the Chapter 11 Cases. Mr. Frankel has tapped
Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as his
counsel; Greenberg Traurig, LLP as special counsel; Ducera Partners
LLC as investment banker; and NERA Economic Consulting as
consultant.
MALLINCKRODT PLC: Future Claimants' Representative Hires a Counsel
------------------------------------------------------------------
Roger Frankel, the proposed legal representative for Future
Claimants in the chapter 11 cases of Mallinckrodt plc and its
debtor affiliates, seeks approval from the U.S. Bankruptcy Court
for the District of Delaware to employ Young Conaway Stargatt &
Taylor, LLP his counsel.
The firm will provide these legal services:
(a) Provide legal advice with respect to the Proposed Future
Claimants' Representative's powers and duties as Proposed Future
Claimants' Representative for the Future Claimants;
(b) Take any and all actions necessary to protect and maximize
the value of the Debtors' estates for the purpose of making
distributions to Future Claimants and to represent the Proposed
Future Claimants' Representative in connection with negotiating,
formulating, drafting, confirming and implementing a plan(s) of
reorganization, and performing such other functions as are
reasonably necessary to effectively represent the interests of the
Future Claimants;
(c) Appear on behalf of the Proposed Future Claimants'
Representative at hearings, proceedings before the Court, and
meetings and other proceedings in the Chapter 11 Cases, as
appropriate;
(d) Prepare and file, on behalf of the Proposed Future
Claimants' Representative, all applications, motions, objections,
answers, orders, reports, and other legal papers as may be
necessary and as may be authorized by the Proposed Future
Claimants' Representative in connection with the Chapter 11 Cases;
(e) Represent and advise the Proposed Future Claimants'
Representative with respect to any contested matter, adversary
proceeding, lawsuit or other proceeding in which the Proposed
Future Claimants' Representative may become a party or otherwise
appear in connection with the Chapter 11 Cases; and
(f) Perform any other legal services and other support
requested by the Proposed Future Claimants' Representative in
connection with the Chapter 11 Cases.
The Proposed Future Claimants' Representative, along with his
retained professionals, will work together to ensure that there is
no unnecessary duplication of effort or cost.
Young Conaway's current customary hourly rates are as follows:
Partners and Counsel $1,400 - $470
Associates $610 - $325
Paralegals $305 - $275
In addition, the firm will seek reimbursement for reasonable and
necessary expenses incurred in connection with these chapter 11
cases.
The Debtors provided to Young Conaway a retainer of $500,000 to pay
the prepetition fees and expenses Young Conaway incurred while
conducting due diligence of the Debtors and their opioid-related
claims. To replenish the retainer, Young Conaway received $257,829
on May 21, 2020 and $382,890.56 on July 21, 2020. The retainer was
supplemented with: $125,000 on September 11, 2020; $250,000 on
September 24, 2020; and $175,000 on October 8, 2020. Young Conaway
will apply the balance of the Retainer to Young Conaway's
post-petition fees and expenses as such post-petition fees and
expenses become payable during the Chapter 11 Cases.
Young Conaway also made the following disclosures in response to
the request for additional information set forth in Paragraph D.1
of the Revised U.S. Trustee Guidelines:
Question: Did you agree to any variations from, or alternatives to,
your standard or customary billing arrangements for this
engagement?
Answer: Young Conaway has not agreed to a variation of its standard
or customary billing arrangements for this engagement.
Question: Do any of the professionals included in this engagement
vary their rate based on the geographic location of the bankruptcy
case?
Answer: None of Young Conaway's professionals included in this
engagement have varied their rate based on the geographic location
of the Chapter 11 Cases.
Question: If you represented the client in the 12 months
pre-petition, disclose your billing rates and material financial
terms for the pre-petition engagement, including any adjustments
within the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Answer: Young Conaway was retained by the Proposed Future
Claimants' Representative as counsel pursuant to the Engagement
Letter. The billing rates and material terms of the prepetition
engagement are the same as the rates and terms described in the
Application.
Question: Has your client approved your prospective budget and
staffing plan and, if so, for what budget period.
Answer: The Proposed Future Claimants' Representative has or will
approve the prospective budget and staffing plan for Young
Conaway's engagement for the postpetition period as appropriate. In
accordance with the U.S. Trustee Guidelines, the budget may be
amended as necessary to reflect changed or unanticipated
developments.
Edwin J. Harron, a partner in the law firm of Young Conaway
Stargatt & Taylor, LLP, disclosed in court filings that the firm is
a "disinterested person" as that term is defined in section 101(14)
of the Bankruptcy Code and does not hold or represent any interest
that is materially adverse to the Proposed Future Claimants'
Representative or the interests of Future Claimants.
The firm can be reached through:
James L. Patton, Jr., Esq.
Robert S. Brady, Esq.
Edwin J. Harron, Esq.
Jaclyn C. Marasco, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
E-mail: jpatton@ycst.com
rbrady@ycst.com
eharron@ycst.com
jmarasco@ycst.com
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. The company's
Specialty Brands reportable segment's areas of focus include
autoimmune and rare diseases in specialty areas like neurology,
rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12522) to
seek approval of a restructuring that would reduce total debt by
$1.3 billion and resolve opioid-related claims against them. The
petitions were signed by Bryan M. Reasons, executive vice president
and chief financial officer.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
On October 13, 2020, the Debtors filed a motion for entry of an
order appointing Roger Frankel as the Future Claimants'
Representative in the Chapter 11 Cases. Mr. Frankel has tapped
Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as his
counsel; Greenberg Traurig, LLP as special counsel; Ducera Partners
LLC as investment banker; and NERA Economic Consulting as
consultant.
MALLINCKRODT PLC: Future Claimants' Representative Taps a Counsel
-----------------------------------------------------------------
Roger Frankel, the proposed legal representative for Future
Claimants in the chapter 11 cases of Mallinckrodt plc and its
debtor affiliates, seeks approval from the U.S. Bankruptcy Court
for the District of Delaware to employ Frankel Wyron LLP as his
counsel.
Frankel Wyron will provide these legal services:
(a) Provide legal advice to the Proposed Future Claimants'
Representative with respect to his powers and duties;
(b) Provide legal advice to the Proposed Future Claimants'
Representative on strategic issues relating to the rights and
positions of parties in the Chapter 11 cases and their impact on
the interests of Future Claimants;
(c) Represent and advise the Proposed Future Claimants'
Representative in connection with the formulation, negotiation,
confirmation, and implementation of a plan (or plans) of
reorganization, and any transactions related thereto;
(d) Work with the Proposed Future Claimants' Representative to
coordinate the work of his professionals to ensure that he is
provided with the advice and information necessary to perform his
duties efficiently and effectively;
(e) Advise the Proposed Future Claimants' Representative with
respect to, and assist as appropriate in connection with, any
contested matter, adversary proceeding, or other proceeding in
which the Proposed Future Claimants' Representative may become a
party or may otherwise appear;
(f) Consult as appropriate with the Debtors, any official or
ad hoc committees, other creditors and parties-in-interest, and
their respective professionals, and the U.S. Trustee, concerning
the Chapter 11 Cases; and
(g) Perform such other legal services, in conjunction and
coordination with other professionals retained by the Proposed
Future Claimants' Representative, as the Proposed Future Claimants'
Representative believes may be necessary and proper in the Chapter
11 Cases.
The Proposed Future Claimants' Representative, along with his
retained professionals, will work together to ensure that there is
no unnecessary duplication of effort or cost.
In February 2020, the Debtors provided Frankel Wyron with a
retainer of $400,000 as security for fees and expenses that it
would incur in connection with its prepetition work.
Frankel Wyron will charge hourly rates for its services in these
cases that are consistent with the rates it charges in bankruptcy
and non-bankruptcy matters. Richard H. Wyron, Esq.'s hourly rate is
$900.
In addition, the firm will seek reimbursement for reasonable and
necessary expenses incurred in connection with these chapter 11
cases.
Frankel Wyron also made the following disclosures in response to
the request for additional information set forth in Paragraph D.1
of the Revised U.S. Trustee Guidelines:
Question: Did you agree to any variations from, or alternatives to,
your standard or customary billing arrangements for this
engagement?
Answer: Frankel Wyron LLP has not agreed to a variation of its
standard or customary billing arrangements for this engagement.
Question: Do any of the professionals included in this engagement
vary their rate based on the geographic location of the bankruptcy
case?
Answer: Frankel Wyron LLP's professionals have not varied their
rate based on the geographic location of the Chapter 11 Cases.
Question: If you represented the client in the 12 months
pre-petition, disclose your billing rates and material financial
terms for the pre-petition engagement, including any adjustments
within the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Answer: Frankel Wyron LLP was retained by the Proposed Future
Claimants' Representative as counsel pursuant to the engagement
letter attached as Exhibit C to the Application. The billing rates
and material terms of the prepetition engagement are the same as
the rates and terms described in the Application.
Question: Has your client approved your prospective budget and
staffing plan and, if so, for what budget period.
Answer: The Proposed Future Claimants' Representative has or will
approve the prospective budget and staffing plan for Frankel Wyron
LLP's engagement for the post-petition period as appropriate. In
accordance with the U.S. Trustee Guidelines, the budget may be
amended as necessary to reflect changed or unanticipated
developments.
Richard H. Wyron, a partner in the law firm of Frankel Wyron LLP,
disclosed in court filings that the firm is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code and does not hold or represent any interest that is
materially adverse to the Proposed Future Claimants' Representative
or the interests of Future Claimants.
The firm can be reached through:
Richard H. Wyron, Esq.
FRANKEL WYRON LLP
2101 L Street, NW, Suite 800
Washington, DC 20037
Telephone: (202) 367-9127
E-mail: rwyron@frankelwyron.com
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. The company's
Specialty Brands reportable segment's areas of focus include
autoimmune and rare diseases in specialty areas like neurology,
rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12522) to
seek approval of a restructuring that would reduce total debt by
$1.3 billion and resolve opioid-related claims against them. The
petitions were signed by Bryan M. Reasons, executive vice president
and chief financial officer.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
On October 13, 2020, the Debtors filed a motion for entry of an
order appointing Roger Frankel as the Future Claimants'
Representative in the Chapter 11 Cases. Mr. Frankel has tapped
Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as his
counsel; Greenberg Traurig, LLP as special counsel; Ducera Partners
LLC as investment banker; and NERA Economic Consulting as
consultant.
MALLINCKRODT PLC: Seeks Approval to Hire Administrative Advisor
---------------------------------------------------------------
Mallinckrodt plc and its debtor affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Prime
Clerk LLC as administrative advisor.
The firm will render these professional services:
(a) Assist with, among other things, solicitation, balloting,
and tabulation of votes, and prepare any related reports, as
required in support of confirmation of a chapter 11 plan, and in
connection with such services, process requests for documents from
parties-in-interest;
(b) Prepare an official ballot certification and, if
necessary, testify in support of the ballot tabulation results;
(c) Assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
(d) Provide a confidential data room, if requested;
(e) Manage and coordinate any distributions pursuant to a
chapter 11 plan; and
(f) Provide such other processing, solicitation, balloting,
and other administrative services described in the Engagement
Agreement, but not
included in the Section 156(c) Application, as may be requested
from time to time by the Debtors, the Court, or the Office of the
Clerk of the Bankruptcy Court.
The hourly rates for Prime Clerk's services are as follows:
A. Claim and Noticing Rates
Analyst $35 - $55
Technology Consultant $35 - $95
Consultant/Senior Consultant $70 - $170
Director $175 - $195
B. Solicitation, Balloting and Tabulation Rates
Solicitation Consultant $195
Director of Solicitation $215
In addition, Prime Clerk will charge the Debtors for its reasonable
and necessary out-of-pocket expenses incurred in connection with
its engagement.
Benjamin J. Steele, the vice president of Prime Clerk LLC,
disclosed in court filings that the firm is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code and does not hold or represent any interest that is
materially adverse to the Debtors' estates.
The firm can be reached through:
Benjamin J. Steele
PRIME CLERK LLC
One Grand Central Place
60 East 42nd Street, Suite 1440
New York, NY 10165
Telephone: (212) 257-5490
E-mail: bsteele@primeclerk.com
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. The company's
Specialty Brands reportable segment's areas of focus include
autoimmune and rare diseases in specialty areas like neurology,
rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12522) to
seek approval of a restructuring that would reduce total debt by
$1.3 billion and resolve opioid-related claims against them. The
petitions were signed by Bryan M. Reasons, executive vice president
and chief financial officer.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
On October 13, 2020, the Debtors filed a motion for entry of an
order appointing Roger Frankel as the Future Claimants'
Representative in the Chapter 11 Cases. Mr. Frankel has tapped
Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as his
counsel; Greenberg Traurig, LLP as special counsel; Ducera Partners
LLC as investment banker; and NERA Economic Consulting as
consultant.
MALLINCKRODT PLC: Seeks to Hire AlixPartners as Financial Advisor
-----------------------------------------------------------------
Mallinckrodt plc and its debtor affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
AlixPartners, LLP as financial advisor.
AlixPartners will provide these professional services to the
Debtors:
(a) assist the Debtors in developing and preparing contingency
plans and financial alternatives;
(b) assist the Debtors with their treasury activities;
(c) provide assistance with implementing vendor management
programs to maintain vendor support;
(d) provide assistance to the Debtors with the development of
materials for stakeholder diligence, coordination of due diligence
and the maintenance of their data room;
(e) provide assistance to management in connection with the
Debtors' development of their business plans, and such other
related forecasts as may be required;
(f) advise senior management in the negotiation and
implementation of restructuring initiatives and evaluation of
strategic alternatives;
(g) assist management and its other professionals in sourcing,
negotiating and implementing any financing;
(h) assist the Debtors in responding to and tracking calls
received from suppliers in a vendor communications center;
(i) assist the Debtors in the preparation of financial related
disclosures as may be required by this Court;
(j) assist the Debtors in the identification of executory
contracts and unexpired leases and the performing of cost/benefit
evaluations with respect to the assumption or rejection of each as
necessary;
(k) provide assistance with implementation of Court orders;
(l) assist the Debtors and provide overall coordination of
claims processing, analysis, and reporting, including plan
classification modeling and claim estimation;
(m) participate in meetings, develop informational materials,
and otherwise provide support to the Debtors and their other
professional advisors in negotiations with potential investors,
banks and other secured lenders, bondholders, the statutory
creditors' committee appointed in these chapter 11 cases (if any),
the U.S. Trustee, other parties-in-interest, and professionals
hired by the same, as requested;
(n) assist in developing accounting and operating procedures
to segregate prepetition and post-petition business transactions,
and to track payments of prepetition obligations against the
various motions;
(o) assist in the evaluation and analysis of avoidance
actions;
(p) assist the Debtors with plan distribution activities;
(q) assist with the preparation of information and analysis
necessary for the confirmation of a plan of reorganization in these
chapter 11 cases;
(r) provide expert witness testimony before the Bankruptcy
Court on matters that are within AlixPartners' areas of expertise;
and
(s) assist with such other matters as may be requested that
fall within AlixPartners' expertise and that are mutually agreed.
The Debtors expect AlixPartners will use reasonable efforts to
coordinate with the Debtors' other professionals to avoid
unnecessary duplication of effort or cost.
AlixPartners' standard hourly rates are as follows:
Managing Director $1,000 – $1,195
Director $800 – $950
Senior Vice President $645 – $735
Vice President $470 – $630
Consultant $175 – $465
Paraprofessional $295 – $315
In addition, AlixPartners will seek reimbursement for reasonable
and necessary expenses incurred in connection with these chapter 11
cases.
AlixPartners received unapplied advance payments from the Debtors
in the amount of $1,000,000.00. The Debtors do not owe AlixPartners
any sums for prepetition services.
Randall S. Eisenberg, a managing director of AlixPartners, LLP,
disclosed in court filings that the firm is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy
Code.
The firm can be reached through:
Randall S. Eisenberg
ALIXPARTNERS, LLP
909 Third Avenue
New York, NY 10022
Telephone: (212) 490-2500
Facsimile: (212) 490-1344
E-mail: reisenberg@alixpartners.com
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. The company's
Specialty Brands reportable segment's areas of focus include
autoimmune and rare diseases in specialty areas like neurology,
rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12522) to
seek approval of a restructuring that would reduce total debt by
$1.3 billion and resolve opioid-related claims against them. The
petitions were signed by Bryan M. Reasons, executive vice president
and chief financial officer.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
On October 13, 2020, the Debtors filed a motion for entry of an
order appointing Roger Frankel as the Future Claimants'
Representative in the Chapter 11 Cases. Mr. Frankel has tapped
Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as his
counsel; Greenberg Traurig, LLP as special counsel; Ducera Partners
LLC as investment banker; and NERA Economic Consulting as
consultant.
MALLINCKRODT PLC: Seeks to Hire Guggenheim as Investment Banker
---------------------------------------------------------------
MALLINCKRODT plc and its debtor affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
Guggenheim Securities, LLC as investment banker.
The firm will render these professional services:
(a) Review and analysis of the business, financial condition
and prospects of the Debtors;
(b) Evaluation of the liabilities of the Debtors, their debt
capacity and their strategic and financial alternatives;
(c) With respect to any Transaction the Debtors elect to
pursue:
i. Evaluation from a financial and capital markets point of
view of alternative structures and strategies for implementing the
Transaction;
ii. Preparation of offering, marketing or other transaction
materials concerning the Debtors and the Transaction for
distribution and presentation to the relevant Transaction
Counterparties;
iii. Development and implementation of a marketing plan
with respect to the Transaction;
iv. Identification and solicitation of, and the review of
proposals received from, prospective Transaction Counterparties;
and
v. Negotiation of the Transaction;
(d) If the Debtors determine to pursue or effect any
Transaction in connection with a Bankruptcy Case:
i. Provide financial advice and assistance to the Debtors
in negotiating, developing and seeking approval of any such
Transaction, including a Plan, which may be a plan under Chapter 11
of the Bankruptcy Code confirmed in connection with the Bankruptcy
Case in Bankruptcy Court; and
ii. Participation in hearings before any applicable
Insolvency Authority with respect to the matters upon which
Guggenheim Securities has provided advice.
Guggenheim Securities will coordinate and work with other
professionals retained by the Debtors to minimize any duplication
of services.
Guggenheim Securities and the Debtors have agreed, among other
things, on the following terms of compensation and expense
reimbursement:
(a) Monthly Fees.
i. The Debtors will pay Guggenheim Securities a non-refundable
Monthly Fee of $200,000 per month, which will be due and paid by
the Debtors in advance promptly on the first day of each month
during the period of Guggenheim Securities' engagement under the
Amended Engagement Letter, in each case, whether or not any
Transaction is consummated.
ii. An amount equal to (1) 100% of the first Monthly Fee6 and
(2) 50% of all subsequent Monthly Fees actually paid to Guggenheim
Securities shall be credited (to the extent actually paid and only
once, without duplication) against any Financing Fee, LM
Transaction Fee, Restructuring Transaction Fee or Sale Transaction
Fee that thereafter becomes payable pursuant to the Amended
Engagement Letter.
(b) Restructuring Transaction Fee.
i. If in connection with any Bankruptcy Case any Restructuring
Transaction is consummated, then the Debtors will pay Guggenheim
Securities a Restructuring Transaction Fee in an amount equal to
$25,000,000.
ii. Any such Restructuring Transaction Fee will be payable
promptly upon the consummation of any Restructuring Transaction;
provided, however, that (x) in connection with any 2020 Bankruptcy
Case, the Restructuring Transaction Fee will be payable in two
installments.
(c) Financing Fee(s).
i. Upon the consummation of any Financing Transaction, in each
case, the Debtors will pay Guggenheim Securities one or more
Financing Fee(s) in an amount equal to the sum of:
(A) 100 basis points (1.00%) of the aggregate face amount of
any debt obligations to be issued or raised by the Debtors in any
Debt
Financing; plus
(B) 200 basis points (2.00%) of the aggregate face amount of
any debt obligations to be issued or raised by the Debtors in any
Debt Financing; plus
(C) 300 basis points (3.00%) of the aggregate amount of gross
proceeds raised by the Debtors in any Equity Financing; plus
(D) With respect to any other securities or indebtedness
issued that is not otherwise covered by sections 4(d)(i)(A) to
4(d)(i)(C) of the Amended Engagement Letter, such financing fees,
underwriting discounts, placement fees or other compensation as
customary under the circumstances and mutually agreed in advance by
the Debtors and Guggenheim Securities.
ii. A separate Financing Fee will be payable to Guggenheim
Securities with respect to each Financing Transaction in the event
that more than one Financing Transaction is effected or occurs.
(d) Sale Transaction Fee(s).
i. Upon the consummation of any Sale Transaction, the Debtors
will pay Guggenheim Securities one or more Sale Transaction Fee(s)
on account of each Sale Transaction in an amount equal to the sum
of: (x) with respect to the first $2,000,000,000 of cumulative
Aggregate Sale Consideration involved in all Sale Transactions
since the effective date of the Engagement Letter, 1.00% of said
Aggregate Sale Consideration involved in such Sale Transaction,
plus (y) with respect to any additional amount of Aggregate Sale
Consideration involved in all Sale Transactions since the effective
date of the Engagement Letter, 0.50% of said Aggregate Sale
Consideration involved in such Sale Transaction.
ii. An amount equal to 50% of any Sale Transaction Fee
actually paid to Guggenheim Securities shall be credited against
any Restructuring Transaction Fee that thereafter becomes payable
pursuant to the Amended Engagement Letter; it being understood that
any such amount of such Sale Transaction Fee can only be credited
once against such Restructuring Transaction Fee and cannot be
credited against any other fee payable under the Amended Engagement
Letter.
iii. A separate Sale Transaction Fee will be payable to
Guggenheim Securities with respect to each Sale Transaction in the
event that more than one Sale Transaction is effected or occurs.
(e) Expense Reimbursement. In addition to any fees payable by
the Debtors to Guggenheim Securities under the Amended Engagement
Letter, the Debtors will, whether or not any Transaction
contemplated by the Amended Engagement Letter will be proposed or
consummated, promptly reimburse Guggenheim Securities, upon
request, for all reasonable and documented out-of-pocket expenses
reasonably incurred in connection with or arising out of the
Amended Engagement Letter.
During the 90-day period preceding the commencement of these
chapter 11 cases, the Debtors paid in the ordinary course certain
fees and expense reimbursements due under the Amended Engagement
Letter. Specifically, the Debtors paid (a) $201,554.86 on August 4,
2020 on account of the Monthly Fee for August 2020 and related
expense reimbursements; (b) $201,710.42 on September 1, 2020 on
account of the Monthly Fee for September 2020 and related expense
reimbursements; (c) $437,724.56 on September 24, 2020 on account of
the Monthly Fees for October and November 2020 and related expense
reimbursements; and (d) $10,898,297.50 on September 24, 2020 on
account of the Restructuring Transaction Fee, after giving effect
to the crediting of the applicable Accrued Credits in respect
thereof.
Brendan Hayes, a senior managing director at Guggenheim Securities,
LLC, disclosed in court filings that the firm is a "disinterested
person" as that term is defined in section 101(14) of the
Bankruptcy Code and does not hold or represent any interest that is
materially adverse to the Debtors' estates.
The firm can be reached through:
Brendan Hayes
GUGGENHEIM SECURITIES, LLC
330 Madison Avenue
New York, NY 10017
Telephone: (212) 739-0700
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. The company's
Specialty Brands reportable segment's areas of focus include
autoimmune and rare diseases in specialty areas like neurology,
rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12522) to
seek approval of a restructuring that would reduce total debt by
$1.3 billion and resolve opioid-related claims against them. The
petitions were signed by Bryan M. Reasons, executive vice president
and chief financial officer.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
On October 13, 2020, the Debtors filed a motion for entry of an
order appointing Roger Frankel as the Future Claimants'
Representative in the Chapter 11 Cases. Mr. Frankel has tapped
Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as his
counsel; Greenberg Traurig, LLP as special counsel; Ducera Partners
LLC as investment banker; and NERA Economic Consulting as
consultant.
MALLINCKRODT PLC: Seeks to Hire Katten Muchin Rosenman as Counsel
-----------------------------------------------------------------
Mallinckrodt Equinox Finance Inc., Mallinckrodt Enterprises
Holdings, Inc., Mallinckrodt ARD Finance LLC, Mallinckrodt
Enterprises LLC, Mallinckrodt LLC, SpecGx LLC, SpecGx Holdings LLC,
and Mallinckrodt APAP LLC, collectively called as Specialty Generic
Debtors, seek approval from the U.S. Bankruptcy Court for the
District of Delaware to employ Katten Muchin Rosenman LLP as
counsel.
The Debtors desire to retain Katten at the sole direction of Marc
Beilinson and Sherman Edmiston III, the disinterested managers of
the board of managers or directors of the Specialty Generics
Debtors. The retention of independent counsel is necessary to the
disinterested managers fulfilling their fiduciary duties in these
chapter 11 cases.
Katten will charge the following hourly rates for its services:
Partners $770 - $1,555
Of Counsel $895 - $1,475
Associates $460 - $970
Paraprofessionals $195 - $580
In addition, Katten will charge the Debtors for its reasonable and
necessary out-of-pocket expenses incurred in connection with its
engagement.
Katten received fee deposits from the Debtors and applied the
amounts to time spent and expenses incurred before the Petition
Date. After those amounts were applied, Katten held, and continues
to hold, surplus funds in the amount of $568,239.68. Katten will
continue to hold any remaining retainer balance throughout the
chapter 11 cases.
Katten also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the Revised U.S. Trustee Guidelines:
Question: Did the firm agree to any variations from, or
alternatives to, the firm's standard or customary billing
arrangements for this engagement?
Answer: No. The firm and the Disinterested Managers have not agreed
to any variations from, or alternatives to, the firm's standard
billing arrangements for this engagement. The rate structure
provided by the firm is appropriate and is not significantly
different from (a) the rates that the firm charges for other
non-bankruptcy representatives, or (b) the rates of other
comparably skilled professionals.
Question: Do any of the firm professionals included in this
engagement vary their rate based on the geographical location of
these chapter 11 cases?
Answer: No. The hourly rates used by the firm in representing the
Specialty Generics Debtors at the sole direction of the
Disinterested Managers are consistent with the rates that the Firm
charges other comparable chapter 11 clients, regardless of the
location of the chapter 11 case.
Question: If the firm has represented the Debtors in the 12 months
pre-petition, disclose the firm's billing rates and material
financial terms for the prepetition engagement, including any
adjustments within the 12 months prepetition. If the firm's billing
rates and material financial terms have changed post-petition,
explain the difference and the reasons for the difference.
Answer: Since Katten's engagement by the Disinterested Managers on
December 17, 2019, Katten has followed the hourly billing rates set
forth in Exhibit A of the Engagement Letter, attached to the
Application as Exhibit 1 to the Proposed Order.
Question: Have the Debtors approved the firm's prospective budget
and staffing plan and, if so, for what budget period?
Answer: Yes. The Disinterested Managers have approved a monthly
budget and staffing plan for these chapter 11 cases for the period
from the Petition Date to and including January 11, 2021.
Steven J. Reisman, a partner of the law firm of Katten Muchin
Rosenman LLP, disclosed in court filings that the firm does not
hold or represent any interest that is materially adverse to the
Debtors' estates and has no connection to the Debtors, their
creditors, or other parties-in-interest.
The firm can be reached through:
Steven J. Reisman, Esq.
KATTEN MUCHIN ROSENMAN LLP
575 Madison Avenue
New York, NY 10022
Telephone: (212) 940-8700
Facsimile: (212) 940-8776
E-mail: sreisman@katten.com
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. The company's
Specialty Brands reportable segment's areas of focus include
autoimmune and rare diseases in specialty areas like neurology,
rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12522) to
seek approval of a restructuring that would reduce total debt by
$1.3 billion and resolve opioid-related claims against them. The
petitions were signed by Bryan M. Reasons, executive vice president
and chief financial officer.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
On October 13, 2020, the Debtors filed a motion for entry of an
order appointing Roger Frankel as the Future Claimants'
Representative in the Chapter 11 Cases. Mr. Frankel has tapped
Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as his
counsel; Greenberg Traurig, LLP as special counsel; Ducera Partners
LLC as investment banker; and NERA Economic Consulting as
consultant.
MALLINCKRODT PLC: Seeks to Hire Ropes & Gray as Litigation Counsel
------------------------------------------------------------------
Mallinckrodt plc and its debtor affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Ropes
& Gray LLP as special litigation counsel.
Ropes & Gray will render the following legal services:
(a) Continue to advise and represent the Debtors in any
ongoing opioid litigation;
(b) Continue to advise and represent the Debtors in matters
related to U.S. Department of Justice and other opioid-related
investigations;
(c) Continue to advise and represent the Debtors in connection
with any ongoing litigation and potential litigation in connection
with opioid-related taxes and fees;
(d) Prepare compliance reports and respond to monitoring
required by a settlement agreement with state Attorneys General and
voluntary injunction;
(e) Negotiate further compliance terms with state Attorneys
General, including selection of a compliance monitor;
(f) Continue to advise the Debtors with respect to their
obligations under agreed compliance terms;
(g) Implement a document disclosure program required by an
agreement with state Attorneys General; and
(h) Continue to advise and represent the Debtors in connection
with any ongoing litigation regarding allegations of price-fixing
and related conduct with respect to certain of the Debtors'
pharmaceutical products.
The services of Ropes & Gray will complement and not duplicate the
services rendered by any other professional retained in these
chapter 11 cases.
In accordance with the Engagement Letter, Ropes & Gray will be
compensated for services rendered on an hourly basis at a fixed
blended hourly rate for attorney professionals of $706 per hour for
services related to any document or written discovery and a fixed
blended hourly rate for attorney professionals of $846 per hour for
all other services.
For non-attorney paraprofessionals, Ropes & Gray will be
compensated for services rendered on an hourly basis at an hourly
rate of $171 to $348 per hour based on the seniority and experience
of the paraprofessional.
In addition, Ropes & Gray will charge the Debtors for its
reasonable and necessary out-of-pocket expenses incurred in
connection with its engagement.
In the 90 days prior to the Petition Date, Ropes & Gray received
compensation for fees and reimbursement for expenses related to
services rendered in the aggregate amount of $7,027,734.62, and on
the Petition Date, the balance of the retainer was $2,702,651.98.
Ropes & Gray also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the Revised U.S. Trustee Guidelines:
Question: Did you agree to any variations from, or alternatives to,
your standard or customary billing arrangements for this
engagement?
Answer: Yes. Given Ropes & Gray's longstanding representation of
Mallinckrodt in opioid-related litigation, as described in
Paragraph 15 above, Ropes has achieved certain efficiencies in its
representation of Mallinckrodt and can therefore effectively manage
to a blended hourly rate for attorney time. The Debtors and Ropes &
Gray have therefore agreed to a fixed blended hourly rate for
attorney professionals of $706 per hour for services related to any
document or written discovery and a fixed blended hourly rate for
attorney professionals of $846 per hour for all other services. The
Debtors and Ropes & Gray have agreed to an hourly rate of $171 to
$348 per hour for non-attorney paraprofessionals based on the
seniority and experience of the paraprofessional.
Question: Do any of the professionals included in this engagement
vary their rate based on the geographic location of the bankruptcy
case?
Answer: No.
Question: If you represented the client in the 12 months
pre-petition, disclose your billing rates and material financial
terms for the pre-petition engagement, including any adjustments
within the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Answer: As disclosed above, Ropes & Gray represented the Debtors
since June 2017 regarding opioid-related litigation, among other
matters. During that period, Ropes & Gray charged the Debtors fixed
blended hourly rates or in certain matters a discounted hourly rate
for attorney professionals. Post-petition, Ropes & Gray will render
services at fixed blended hourly rates for attorney professionals
substantially consistent with the fixed blended hourly rates that
were used prepetition. For non-attorney paraprofessionals, Ropes &
Gray will bill at hourly rates based on the seniority and
experience of the paraprofessional consistent with the hourly rates
that were used prepetition.
Question: Has your client approved your prospective budget and
staffing plan and, if so, for what budget period.
Answer: Ropes & Gray will develop a budget and staffing plan for a
period to be determined by the Debtors, and as to which Ropes &
Gray reserves all rights. Ropes & Gray will present the forthcoming
budget and staffing plan to the Debtors for their approval.
Brien T. O'Connor, a partner with the firm of Ropes & Gray LLP,
disclosed in court filings that the firm does not hold or represent
any interest that is materially adverse to the Debtors' estates and
has no connection to the Debtors, their creditors, or other
parties-in-interest.
The firm can be reached through:
Brien T. O'Connor, Esq.
ROPES & GRAY LLP
Prudential Tower, 800 Boylston Street
Boston, MA 02199
Telephone: (617) 951-7000
Facsimile: (617) 951-7050
E-mail: Brien.O'Connor@ropesgray.com
About Mallinckrodt
Mallinckrodt is a global business consisting of multiple wholly
owned subsidiaries that develop, manufacture, market and distribute
specialty pharmaceutical products and therapies. The company's
Specialty Brands reportable segment's areas of focus include
autoimmune and rare diseases in specialty areas like neurology,
rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-12522) to
seek approval of a restructuring that would reduce total debt by
$1.3 billion and resolve opioid-related claims against them. The
petitions were signed by Bryan M. Reasons, executive vice president
and chief financial officer.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors have tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
On October 13, 2020, the Debtors filed a motion for entry of an
order appointing Roger Frankel as the Future Claimants'
Representative in the Chapter 11 Cases. Mr. Frankel has tapped
Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP as his
counsel; Greenberg Traurig, LLP as special counsel; Ducera Partners
LLC as investment banker; and NERA Economic Consulting as
consultant.
MANZANA CAPITAL: Seeks to Hire Daniel Masters as Bankruptcy Counsel
-------------------------------------------------------------------
Manzana Capital, Inc. seeks approval from the U.S. Bankruptcy Court
for the Southern District of California to hire Daniel Masters,
Attorney at Law as its bankruptcy counsel.
The firm will provide the following legal services:
a. advise and consult with the Debtor concerning questions
arising in the estate and concerning the rights and remedies;
b. appear, prosecute, and to defend suits and proceedings
concerning assets of the estate;
c. assist the Debtor with the preparation of pleadings which
may be required to be filed by the court; and
d. provide all other legal services for the Debtor.
The billing rate of Daniel Masters, Esq., will be $350 per hour,
and current paralegal billing rate is $150 per hour.
Mr. Masters disclosed in court filings that his firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Daniel Masters, Esq.
Daniel Masters, Attorney at Law
PO Box 66
La Jolla, CA 92038
Telephone: (858) 459-1133
Facsimile: (858) 459-1103
Email: masters@lawyer.com
About Manzana Capital
Manzana Capital, Inc., filed a Chapter 11 bankruptcy petition
Bankr. S.D. Cal. Case No. 20-04045) on Aug. 10, 2020, disclosing
under $1 million in both assets and liabilities. Daniel Masters,
Esq., is Debtor's legal counsel.
MARLEY STATION MALL: Foreclosure Auction Hit by Chapter 7 Filing
----------------------------------------------------------------
Melody Simmons of Baltimore Business Journal reports that a late
bankruptcy filing in Texas has halted the sale of the Marley
Station Mall in Glen Burnie after it was sold in a foreclosure
auction in mid-September 2020.
The suburban mall changed hands to an undisclosed buyer on Sept.
14, 2020 for $1.65 million, according to Paul Cooper of Alex Cooper
Auctioneers, which handled the sale.
That same day, a Chapter 7 bankruptcy filing was made by mall owner
Marley Station Mall LLC, a subsidiary of Dallas-based investor G.L.
Harris, in the United States Bankruptcy Court for the Northern
District of Texas.
The filing has left the auction sale in limbo, Cooper said on
Monday. It also provides a glimpse into the uncertain status of a
regional retail hub that has been impacted over the past seven
months by the novel coronavirus.
"The sale may be terminated by the court," Cooper said in an email
on Monday evening, noting the uncertainty of the sale transaction.
Mark J. Petrocchi, the Fort Worth, Texas-based attorney for Marley
Station Mall LLC, was unavailable for comment late Monday.
Malls and shopping centers, including some in Greater Washington,
have suffered serious impacts of the Covid crisis. The Mazza
Gallerie mall in Northwest D.C. was sold at auction earlier this
year, and dozens of Saks Fifth Avenue and Lord & Taylor locations
around the country, including some in the region, are the subject
of a foreclosure suit.
Marley Station's status has suffered as its retail anchors have
been hit hard by the pandemic. Sears, which has a
212,000-square-foot space, was closing stores in Maryland even
before the pandemic began. The mall's other anchor, J.C. Penney,
which occupies a 133,000-square-foot location, is also in
bankruptcy and closing stores. Another anchor, a
109,500-square-foot Macy's, laid off more than 200 workers in the
area earlier this year.
Investor G.L. Harris acquired the mall through the entity for $22.7
million in 2017 from Simon Property Group, state records show.
Since then, it has struggled with vacancies and was hit harder this
year as the Covid-19 pandemic shutdown dragged on.
The Marley Station Mall bankruptcy filings in Texas reflected that
impact. The documents show the mall's gross revenue from Jan. 1
through Sept. 14 was $946,987, compared to $5.76 million in 2019.
Its gross revenue in 2018 was $6.55 million, the documents show.
The bankruptcy case is proceeding with several motions and legal
proceedings in the North Texas court, according to documents.
About Marley Station Mall
Marley Station Mall LLC owns an enclosed shopping mall in Glen
Burnie, Maryland. Opened in 1987, it was expanded in 1994 and 1996.
It is owned and managed by Dallas-based developer G.L. "Buck"
Harris.
Marley Station Mall sought Chapter 7 bankruptcy protection (Bankr.
N.D. Tex. Case No. 20-42885) on Sept. 14, 2020, estimating less
than $50,000 in assets and liabilities.
The Debtor's counsel:
Behrooz P. Vida
The Vida Law Firm, PLLC
Tel: 817-358-9988
E-mail: filings@vidalawfirm.com
MARRONE BIO: Incurs $6.06 Million Net Loss in Third Quarter
-----------------------------------------------------------
Marrone Bio Innovations, Inc., filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $6.06 million on $8.83 million of total revenues for
the three months ended Sept. 30, 2020, compared to a net loss of
$16.37 million on $6.97 million of total revenues for the three
months ended Sept. 30, 2019.
"Our third-quarter results were particularly encouraging as we
delivered on our ambitions to expand our international presence and
to further penetrate the seed treatment market for row crops," said
Chief Executive Officer Kevin Helash. "The benefit of this
strategic shift was reflected in another quarter of gross margins
in line with our annual target in the mid-50% range, and sales that
keep us on track to achieve full year revenue growth in the range
of our historical levels. Additionally, we continue to make
progress on cost management, reducing our operating expense ratio
while making targeted investments in the areas that will accelerate
our path to profitability.
"While we are expanding our business in Latin America, the second
half of the year is typically a smaller period for us in terms of
revenue," Helash added. "While we anticipate that our 2020
full-year revenues will be in the range of our historical growth
rate, we continue to believe that our sales mix will continue on
the historical trend of being stronger in the first half of the
year than the second, and will continue to do so as we move
forward."
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $15.96 million on $30.65 million of total revenues
compared to a net loss of $27.03 million on $22.68 million of total
revenues for the nine months ended Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $72.06 million in total
assets, $48.96 million in total liabilities, and $23.10 million in
total stockholders' equity.
Marrone Bio stated, "The Company has a limited number of
commercialized products and an operating history that includes
periods of negative operating cash flows, which indicate
substantial doubt exists related to the Company's ability to
continue as a going concern for the next 12 months from the date of
issuance of these condensed consolidated financial statements. As
of September 30, 2020, the Company had an accumulated deficit of
$336,606,000, has incurred significant losses since inception, and
expects to continue to incur losses for the foreseeable future.
The Company funds operations primarily with the proceeds from the
sale of its products, promissory notes and term loans, net proceeds
from the private placements of convertible notes, as well as with
the proceeds from equity instruments. The Company will need to
generate significant revenue growth to achieve and maintain
profitability. As of September 30, 2020, the Company had a working
capital surplus of $1,066,000, including cash and cash equivalents
of $8,971,000. In addition, as of September 30, 2020, the Company
had debt and debt due to related parties of $17,700,000 and
$7,300,000, respectively, for which the underlying debt agreements
contain various financial and non-financial covenants, as well as
certain material adverse change clauses. As of September 30, 2020,
the Company had a total of $1,560,000 of restricted cash relating
to these debt agreements.
"The Company believes that its existing cash and cash equivalents
of $5,574,000 at November 6, 2020, together with expected revenues,
expected future debt or equity financings and cost management will
be sufficient to fund operations as currently planned through one
year from the date of the issuance of these condensed consolidated
financial statements. The Company anticipates securing additional
sources of cash through equity and/or debt financings,
collaborative or other funding arrangements with partners, or
through other sources of financing, consistent with historic
results. However, the Company cannot predict, with certainty, the
outcome of its actions to grow revenues, to manage or reduce costs
or to secure additional financing from outside sources on terms
acceptable to the Company or at all. Further, the Company may
continue to require additional sources of cash for general
corporate purposes, which may include operating expenses, working
capital to improve and promote its commercially available products,
advance product candidates, expand international presence and
commercialization, general capital expenditures and satisfaction of
debt obligations and any potential negative economic impacts from
the current COVID-19 pandemic on the Company's operations."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1441693/000149315220020840/form10-q.htm
About Marrone Bio Innovations
Based in Davis, California, Marrone Bio Innovations, Inc. --
http://www.marronebio.com/-- discovers, develops and sells
innovative biological products for crop protection, plant health
and waterway systems treatment. MBI has screened over 18,000
microorganisms and 350 plant extracts, leveraging its in-depth
knowledge of plant and soil microbiomes enhanced by advanced
molecular technologies to rapidly develop seven effective and
environmentally responsible pest management products to help
customers operate more sustainably while uniquely improving plant
health and increasing crop yields. Supported by a robust portfolio
of over 400 issued and pending patents around its natural product
chemistry, MBI's currently available commercial products are
Regalia, Grandevo, Venerate, Majestene, Haven Stargus and
Amplitude, Zelto and Zequanox.
Marrone Bio reported a net loss of $37.17 million for the year
ended Dec. 31, 2019, compared to a net loss of $20.21 million for
the year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$78.40 million in total assets, $52.30 million in total
liabilities, and $26.10 million in total stockholders' equity.
Marcum LLP, in San Francisco, CA, the Company's auditor since 2018,
issued a "going concern" qualification in its report dated March
16, 2020 citing that the Company has incurred significant losses
and needs to raise additional funds to meet its obligations and
sustain its operations. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
MATTRESS FIRM: Moody's Assigns B2 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service assigned new ratings to Mattress Firm,
Inc., including a B2 corporate family rating, B2-PD probability of
default rating (PDR) and a B1 rating on the proposed $550 million
new senior secured term loan due 2027. The ratings outlook is
stable.
"Mattress Firm is benefitting from its business transformation
initiatives and the surge in home-related consumer spending," said
Moody's analyst Raya Sokolyanska. "With good liquidity and moderate
debt levels, the company has the flexibility to address a potential
reversal in the currently strong demand trends, while continuing to
evolve its business to meet consumer purchasing preferences amid a
competitive landscape."
Proceeds from the $550 million proposed senior secured term loan,
along with $184 million of balance sheet cash, will be used to
repay the existing $465 million term loan and $192 million HoldCo
loan, and pay for loan prepayment premiums and transaction fees and
expenses. The new financing will also include a proposed $125mm
asset-based revolving credit facility (unrated). Mattress Firm's
existing capital structure was put in place as part of its exit
financing package upon emergence from bankruptcy on November 21,
2018, which eliminated the majority of its $3.5 billion
pre-petition debt.
Moody's took the following rating actions for Mattress Firm, Inc.:
Corporate family rating, assigned B2
Probability of default rating, assigned B2-PD
Senior secured term loan, assigned B1 (LGD3)
Outlook, assigned stable
RATINGS RATIONALE
The B2 CFR reflects the company's moderately high leverage,
dependence on cyclical discretionary consumer spending, and narrow
product focus in a highly competitive product category. As of
September 30, 2020, and pro-forma for the refinancing transaction,
Moody's-adjusted debt/EBITDA will be at an estimated 4.1 times and
EBITA/interest expense will be 1.8 times. Moody's expects continued
growth over the next several quarters, as a result of the ongoing
shift in consumer spending towards the home category. However, in
Moody's view some of the demand strength experienced in Q4 FY 2020
ended September 30 was driven by pull-forward spending, and is
likely to reverse when health and safety concerns abate, prompting
consumers to resume spending on leisure and entertainment. Moody's
expects FY 2021 revenue and earnings to increase, followed by flat
to modestly higher performance in FY 2022. However, there is
significant uncertainty with regard to the extent and timing of any
future demand weakness. The ratings also incorporate governance
considerations, including the risk associated with control by hedge
funds and other former creditors. In addition, as a retailer,
Mattress Firm needs to make ongoing investments in its brand and
infrastructure, as well as in social and environmental drivers
including responsible sourcing, product and supply sustainability,
privacy and data protection.
Nevertheless, the rating benefits from Mattress Firm's recognized
brand name and leading position in the mattress retail industry.
Mattress Firm's good liquidity over the next 12-18 months also
supports the credit, including expectations for solid positive free
cash flow, good revolver availability, a springing-covenant only
capital structure and a lack of near-term maturities. The company
has turned around many aspects of its operations since the
bankruptcy restructuring, including closing unprofitable stores,
revamping its management team, and the reintroduction of
TempurSealy products. As a result, both comparable sales and EBITDA
have recovered significantly each quarter since the bankruptcy,
with the exception of Q3 2020 when operating performance
deteriorated due to temporary store closures. Moody's expects the
company's initiatives to provide revenue growth and margin
improvement opportunities, including its omnichannel and digital
initiatives, increased focus on customer engagement and growing
private brand assortment.
The stable outlook reflects Moody's projections for stable to
modestly growing earnings and good liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if liquidity deteriorates or
operating performance declines. Quantitatively, Moody's-adjusted
debt/EBITDA above 5.25 times or EBITA/interest expense below 1.5
times could result in a downgrade.
Ratings could be upgraded if the company demonstrates sustained
earnings growth beyond the current period of strong demand. An
upgrade would also require a commitment to conservative financial
policies and maintenance of good liquidity. Quantitatively, the
ratings could be upgraded if Moody's expects debt/EBITDA to be
sustained below 4.0 times, and EBITA/interest expense above 2.25
times.
The term loan credit facility is expected to have no financial
maintenance covenants. It is expected to contain covenant
flexibility for transactions that could adversely affect creditors,
including incremental facility capacity of $100 million, plus
amounts for senior secured and junior debt, subject to leverage
restrictions.
The proposed terms and the final terms of the credit agreement can
be materially different.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
Headquartered in Houston, Texas, Mattress Firm, Inc. is a leading
US mattress retailer offering mattresses and related products
through over 2,400 stores across the United States and its website.
Revenues for the twelve months ended Sept. 29, 2020 were around
$3.3 billion. The company is owned by its former creditors and
Steinhoff International Holdings N.V.
MATTRESS FIRM: S&P Assigns B+ Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issuer credit rating to
Mattress Firm Inc. At the same time, S&P assigned its 'B+'
issue-level rating and '3' recovery rating to the company's
proposed senior secured term loan. The '3' recovery rating
indicated its expectation for meaningful (50%-70%; rounded
estimate: 65%) recovery in the event of a payment default.
S&P's ratings reflect Mattress Firm's position in the highly
cyclical and competitive mattress industry.
The rating agency believes the company's big-ticket and
commoditized nature of its main bedding products cause its profit
to be more volatile than that of its retail peers given the
mattress industry's highly discretionary and cyclical nature.
Mattress purchases are largely replacement driven and can be easily
deferred during an economic downturn. The company has strengthened
its omni-channel capabilities in the mattress industry, which
features some barriers to entry for new competitors due to the
lower volumes and high unit shipping costs, since 2018. However,
pure e-commerce competitors now comprise approximately 25% of the
mattress market and pose a significant threat to Mattress Firm's
sizeable brick-and-mortar operations. While most mattresses are
still sold in stores, the percentage of mattresses sold online has
steadily increased over the past few years as new online entrants,
such as Amazon, expanded their U.S. mattress and foundation market
share to about 7% in 2019.
Somewhat offsetting these risks are Mattress Firms' larger scale
compared with its peers and relatively strong merchandise
assortment.
Mattress Firm controls about 18% market share in the highly
fragmented and consolidating U.S. specialty and conventional
mattress industry, according to industry estimates. In S&P's view,
the company's national operations help solidify its supplier
relationships, including with direct-to-consumer brands that
require a scalable retail experience and must efficiently allocate
their inventory. S&P believes Mattress Firm's large network also
enables it to maintain leading delivery times and service
offerings, which support its position amid the increased level of
e-commerce purchases and mattress deliveries.
S&P said, "We view the company's merchandise selection, which
includes national brands, private-label offerings, and partnerships
with direct-to-consumer brands that serve a wide range of price
points, as sufficiently diverse. Private-label sales allow Mattress
Firm to curate its product assortment, which contributes to its
above-average margins. However, private-label sales only account
for about 14% of the company's total sales. In addition, we believe
Mattress Firm's supplier concentration could lead to additional
risk given that it generates about two-thirds of its sales from the
Tempur-Sealy and Serta Simmons brands."
Post-bankruptcy, the company is benefiting from management's
turnaround initiatives and elevated at-home consumer spending
trends.
The company emerged from bankruptcy in November 2018 following a
series of merchandising missteps, an overextended store footprint,
and a highly leveraged capital structure because of a history of
debt-financed acquisitions.
S&P said, "We believe Mattress Firm has addressed these legacy
issues by restoring its relationship with key supplier
Tempur-Sealy, rationalizing its store base (nearly 850 net closures
to date after the acquisition of Sleepy's in 2016), and appointing
a new management team that--among other initiatives--is
implementing more robust internal control systems, which we view
favorably."
Mattress Firm has significantly invested in its omni-channel
capabilities following its restructuring and reported compelling
profitability trends, including consistently positive comparable
sales (excluding the effects of COVID-19 and its related store
closures during the third quarter of 2020) with adjusted EBITDA
margins in the high-teens percent area.
S&P said, "We also attribute the recent improvement in its
comparable sales to an increased emphasis on at-home spending as
consumers seek comfort during the pandemic. Although we anticipate
these trends will continue in the near term, we recognize that some
of its recent sales may due to the pull forward of future demand
and, therefore, may reduce its future sales potential."
A significant reduction in Mattress Firm's funded debt from its
pre-bankruptcy levels also supports S&P's rating and outlook.
The company reduced its total debt from $3.5 billion in October
2018 to a proposed $550 million following the restructuring. While
the proposed refinancing transaction will modestly reduce its
reported debt, it will also significantly reduce Mattress Firm's
annual interest expense given the high fees associated with its
post-emergence capital structure.
S&P said, "We anticipate that the company's leverage will modestly
decline to the mid-3x area in fiscal year 2021 from the high-3x
area in fiscal year 2020 on EBITDA expansion. While Mattress Firm
lacks a track record of financial policy guidance, we expect its
capital management priorities to focus on reinvesting in its
business through store remodels, digital initiatives, and net unit
growth beginning in fiscal year 2021 and to maintain a sufficient
cushion in its credit metrics to withstand a short-term economic
downturn."
"Notwithstanding these strengths, Mattress Firm's competitive
position remains threatened by the changing industry dynamics
introduced by online players in an otherwise highly cyclical
industry. In addition, the short operating track record of its
current management team, which is handling the execution of its
omni-channel and private-label expansion strategies, introduces
additional volatility to its forecast performance relative to that
of its higher-rated peers, thus we apply a negative one-notch
comparable ratings analysis modifier to our anchor on Mattress
Firm."
"The stable outlook reflects our view that Mattress Firm has a
sufficient cushion in its credit metrics to withstand a short-term
economic downturn. We believe the company's leverage will remain in
the mid- to high-3x range during the next 12 months based on its
lower debt load post-restructuring, continued positive same-store
sales growth, and modest EBITDA margin expansion."
S&P could lower its ratings on Mattress Firm if:
-- S&P expects its adjusted debt to EBITDA to increase to the high
4x area; or
-- Its free operating cash flow declines significantly to less
than $100 million on a sustained basis. S&P believes this could
occur if its same-store sales turn flat or become negative and its
gross margins decline by about 300 basis points (bps) from its
current expected levels due to a loss of market share and
intensifying competitive pressures from online players. This could
also occur if the company pursues large debt-financed share
repurchases or acquisitions.
While unlikely during the next 12 months, S&P could raise its
ratings on Mattress Firm if:
-- S&P expects it to maintain leverage below the mid-3.0x area on
a sustained basis;
-- S&P sees prospects for it to generated sustained free operating
cash flow approaching $200 million annually; and
-- S&P believes the company has strengthened its competitive
position by establishing a track record of successfully improving
its market share and omni-channel capabilities while remaining
committed to a conservative financial policy.
MAVIS TIRE: Moody's Affirms B3 CFR & Rates New Upsized Term Loan B2
-------------------------------------------------------------------
Moody's Investors Service, Inc. affirmed the ratings of Mavis Tire
Express Services Corp., including the B3 corporate family rating,
and assigned a B2 rating to the proposed upsized term loan. The
outlook is stable.
"T[he] affirmation acknowledges Mavis' proposed acquisition of Town
Fair Tire, which Moody's believes is sensible from both geographic
and product fit perspectives," stated Moody's Vice President
Charlie O'Shea. "Both companies have demonstrated their resilience
in dealing with the effects of the COVID-19 pandemic, and the
purchase price is reasonable," continued O'Shea. "That said,
governance remains a critical rating factor given Mavis' leverage
remains very elevated as its financial strategies continue to
support debt-financed acquistions balanced by its proven ability to
seamlessly and expeditiously integrate its acquisitions, as well as
its prudent and effective greenfield and brownfield new center
development," added O'Shea. "Moody's notes that Mavis maintains
good liquidity, which is improved by the $30 million upsizing of
its revolver to $130 million, and the nearest debt maturity is the
revolver in 2023."
Assignments:
Issuer: Mavis Tire Express Services Corp.
Senior Secured Bank Credit Facility, Assigned B2 (LGD3)
Affirmations:
Issuer: Mavis Tire Express Services Corp.
Probability of Default Rating, Affirmed B3-PD
Corporate Family Rating, Affirmed B3
Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa2 (LGD5)
Outlook Actions:
Issuer: Mavis Tire Express Services Corp.
Outlook, Remains Stable
RATINGS RATIONALE
Mavis' B3 corporate family rating considers its weak quantitative
profile, particularly its leverage, which remains in the 8 times
range (giving some credit for the pro-forma run-rate earnings from
recent acquisitions and greenfield locations), its favorable market
position in a highly fragmented segment of retail, with penetration
and brand recognition evident in its chosen markets, which is being
strengthened with the proposed Town Fair acquisition. Mavis'
liquidity profile, which Moody's characterizes as good, is another
key factor, with the upsizing of the revolver a plus. Ratings also
consider the potential for shareholder-friendly financial policies
associated with the company's financial sponsor ownership,
including an aggressive pace of debt-funded acquisitions which has
resulted in elevated leverage levels. While the company's scale
will benefit from growth in revenue and EBITDA driven by new
acquisitions, greenfields, and the continued ramp of
recently-acquired locations, the company runs the risk of limited
financial flexibility in the event that earnings deteriorate from
current levels. Until Mavis' leverage profile improves materially
and becomes more predictable, there is no tolerance for equity
extractions at the current rating level. Social considerations are
moderate for Mavis due to the risks related to workplace safety;
however, the company has had no issues of note in this regard.
Additionally, social risk related to demographic and societal
trends, including changing consumer preferences remains a factor
for retail issuers, although it is viewed as immaterial given the
relatively non-discretionary nature of Mavis's business offering.
The stable outlook continues to hinge on Mavis' ability to
successfully source, finance, and integrate new acquisition and
development opportunities such that they are accretive from an
EBITDA perspective within 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if debt/EBITDA reduces below 6.5 times
and EBIT/interest was sustained around 1.5 times. Ratings could be
downgraded if liquidity were to weaken, or if credit metrics do not
show a reasonable path to improvement such that debt/EBITDA on a
"normalized" basis, including some benefits from ongoing
acquisitions and new location development, can be maintained below
8 times, or if EBIT/interest remains below 1 time.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
Mavis Tire Express Services Corp. is the parent company of Mavis
Discount Tire, Inc. and Express Oil Change & Tire Engineers, and is
owned by affiliates of Golden Gate Capital.
MAVIS TIRE: S&P Alters Outlook to Stable, Affirms 'B-' ICR
----------------------------------------------------------
S&P Global Ratings revised its outlook on Mavis Tire Express
Services Corp. to stable from negative and affirmed the 'B-' issuer
credit rating following the company's entry into an agreement to
acquire Town Fair Tire Centers, funded with an incremental $470
million first-lien term loan, seller rollover equity, and balance
sheet cash.
At the same time, S&P is affirming its issue-level ratings on the
company's first- and second-lien term loan facilities and
maintaining the respective '3' and '6' recovery ratings. It is
also assigning a 'B-' issue level rating with a '3' recovery rating
(50%-70%, rounded estimate 55%) to the proposed $470 million term
loan.
Mavis's credit measures will improve on earnings growth, but
leverage will remain elevated.
S&P said, "Pro forma for the Town Fair acquisition, we estimate
adjusted leverage will trend to about 8x in 2021 on acquisition
synergies, operating efficiencies and improving EBITDA. This, in
combination with our expectation for better operating performance
through the pandemic period, support the outlook revision to stable
from negative. After weak results for the first quarter of 2020
because of shelter in place order that reduced customer traffic at
Mavis, second-quarter results rebounded as customers resumed
spending to maintain their cars, a trend that accelerated into the
third quarter. We expect EBITDA expansion to continue and the
company's low-cost capital spending model to drive growth in free
operating cash flow (FOCF)."
"However, we expect continued acquisitions in the medium-term will
results in elevated leverage for the foreseeable future. As a
result, we do not expect meaningful debt repayment outside of
contractual requirements."
"We believe Mavis will remain a consolidator, broadening its scale
in a highly fragmented industry."
Acquisitions have allowed the company to improve its competitive
advantage in the fragmented retail tire and automotive services
industry, in areas such as purchasing and brand-name recognition.
This includes the recently announced acquisition of Town Fair Tire,
with its operations of about 100 locations in the New England
region broadening Mavis Tire's geographic footprint with little
store overlap. S&P estimates Mavis will control about a 2% market
share in the industry and that further consolidation opportunities
are significant.
Many players provide the same or similar services as Mavis with a
broader product assortment and convenience.
S&P said, "However, we believe Mavis' products and services, as
well as its information technology system and customer service
focus, are key industry differentiators. For example, the company
has a dedicated call center that refers more than 75% of customers
to local store managers for service, which we believe helps improve
service and loyalty."
Mavis' acquisition-driven expansion strategy increases execution
risks.
The company's aggressive acquisition strategy increases operational
risks because of potential integration issues that could hinder
management's ability to achieve procurement savings, an important
consideration in S&P's deleveraging expectations. S&P believes
Mavis will continue to pursue a dual approach to acquisitions,
consolidating both small independent operations and larger industry
players when the opportunity arises. This is based on the company's
recent track record, which includes the acquisition of STS Tire &
Auto Centers in 2017, Express Oil Services in 2018, about 100 NTB
Tire & Service Centers in early 2020, and the pending Town Fair
transaction. Still, S&P believes Mavis has executed past
integrations well and its "plug-and-play" technology systems have
helped lessen integration risks.
S&P expects resilient industry demand will support Mavis'
performance growth in the next 1-2 years.
The average vehicle age has increased to more than 11 years in the
U.S., which should propel demand for repair and maintenance
services, including replacement tire and oil changes. S&P also
believes the challenging U.S. economy will likely push consumers to
defer new car purchases and maintain vehicles longer, supporting
S&P's performance expectations for Mavis in the next year.
The stable outlook reflects S&P's expectation for improving
performance in 2021 largely through acquisition benefits including
procurement savings, new store openings, and industry tailwinds.
These performance trends should drive the improvement in credit
metrics, including adjusted leverage in the low-8x area.
S&P could raise the rating on the company if:
-- Revenue and operating income growth exceed S&P's base-case
forecast over the next 12 months;
-- The company successfully diversifies its store footprint by
profitably expanding into new markets; and
-- It reduces debt beyond S&P's expectation and adopts a more
conservative financial policy, likely resulting in S&P Global
Ratings' adjusted leverage calculation approaching 7x on a
sustained basis and reported FOCF approaching $150 million
annually.
S&P could lower the rating on Mavis if it believes the company's
capital structure is potentially unsustainable. This scenario would
likely include:
-- The company is unable to profitably execute on its acquisition
and growth strategies leading to lower sales and declining EBITDA
margins; and
-- The company generates sustained FOCF deficits and operating
losses.
MECHANICAL TECHNOLOGIES: Plan Exclusivity Extended to March 31
---------------------------------------------------------------
At the behest of Mechanical Technologies Corp. d/b/a Alpine Air,
the U.S. Bankruptcy Court for the District of Nevada extended the
periods within which the Debtor has the exclusive right to obtain
confirmation of a plan to March 31, 2021.
The Debtor filed its Plan and Disclosure Statement on March 24,
2020. The Court initially set a hearing for November 6 to consider
approval of the Debtor's Disclosure Statement. That hearing has
now been rescheduled to January 21.
The Court will also consider at the January 21 hearing a Motion to
Convert Case to Chapter 7 filed by Creditors Advnc Air
Technologies, Michael Donovan and Mary Regina Donovan.
Absent an extension, the Debtor's deadline to obtain plan
confirmation is December 4.
A copy of the Debtor's Motion to Extend is available from
PacerMonitor.com at https://bit.ly/3mzcflZ at no extra charge.
About Mechanical Technologies
Mechanical Technologies d/b/a Alpine Air --
http://alpineheatingandair.com/-- specializes in offering
single-source contracting for all residential and commercial
design/build needs. The Company services and installs residential
heating and air conditioners. Alpine Air has designed, installed,
and serviced projects including computer rooms, environmental
chambers, manufacturing facilities, biotech laboratories, burn-in
rooms, and dry rooms. Alpine Air was established in 1987.
Mechanical Technologies Corp. d/b/a Alpine Air, based in Reno,
Nevada, filed a Chapter 11 petition (Bankr. D. Nev. Case No.
19-51146) on Sept. 26, 2019. In the petition signed by John
Donovan, president, the Debtor was estimated to have $1 million to
$10 million in both assets and liabilities.
The Honorable Bruce T. Beesley oversees the case. Stephen R.
Harris, Esq., at Harris Law Practice LLC, serves as bankruptcy
counsel and Robison Sharp Sullivan & Brust, is special counsel.
MEDICAL SIMULATION: Moves Disclosures Hearing Amid Objections
-------------------------------------------------------------
Judge Elizabeth E. Brown has granted Medical Simulation
Corporation's request for continuance of the hearing to consider
approval of the Disclosure Statement explaining its Chapter 11
plan. At the Debtor's behest, the judge will convene a hearing on
the Disclosure Statement on Dec. 16, 2020, at 11:00 a.m., in
Courtroom F, United States Bankruptcy Court for the District of
Colorado, United States Custom House, 721 19th Street, Denver,
Colorado. The hearing was previously scheduled for Nov. 5.
In seeking a delay, the Debtor explained that objections to the
Disclosure Statement have been filed by these parties: (a) the
Official Committee of Unsecured Creditors and (b) Greywacke LLC and
Sicily FOLLC. Brett Enlow and William Younkes,both who are
membersof the Committee, joined into the Committee's objection.
The Debtor said that a continuance will give the Debtor would like
an opportunity to try to resolve some or all of the issues raised
in the objections prior to any hearing on the Disclosure Statement.
The Debtor intends to engage in discussion with the Objectors and
also, where appropriate, to amend the Disclosure Statement. The
Debtor will also address the Court's comments to the Disclosure
Statement.
About Medical Simulation Corp.
Medical Simulation Corp., a manufacturer of medical equipment and
supplies, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Colo. Case No. 19-20101) on Nov. 22, 2019. At the time
of the filing, the Debtor had estimated assets of between $10
million and $50 million and liabilities of between $1 million and
$10 million. The case is assigned to Judge Elizabeth E. Brown.
MEGNA REAL: Seeks Approval to Hire Real Estate Appraiser
--------------------------------------------------------
Megna Real Estate Holdings, Inc. seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
Michael Siegfried, a licensed real estate appraiser practicing in
Woodland Hills, Calif.
Mr. Siegfried will conduct an appraisal of the Debtor's property
located at 3751 Lankershim Boulevard, Studio City in Los Angeles,
Calif. He will be paid a sum of $750 for the appraisal and $400
per hour for additional services, with a 50 percent discount for
travel time and waiting time.
In court filings, Mr. Siegfried disclosed that he is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
Mr. Siegfried holds office at:
Michael W. Siegfried
21900 Marylee Street, Suite 260
Woodland Hills, CA 91367
Telephone: (818) 716-1147
Email: Homewest@socal.rr.com
About Megna Real Estate Holdings, Inc.
Megna Real Estate Holdings, Inc. is primarily engaged in renting
and leasing real estate properties. Its principal assets are
located at 3751 Lankershim Blvd., Studio City, Los Angeles, Calif.
Megna sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. C.D. Cal. Case No. 20-10010) on Jan. 3, 2020. Megna
President Mahmud Ulkarim signed the petition.
At the time of the filing, Debtor had estimated assets of between
$1 million and $10 million and liabilities of the same range.
Judge Deborah J. Saltzman oversees the case. Donahoe & Young LLP
is Debtor's legal counsel.
MICRO HOLDING: S&P Affirms 'B' Issuer Credit Rating
---------------------------------------------------
S&P Global Ratings affirmed all of its existing ratings, including
its 'B' issuer credit rating on Micro Holding Corp. (doing business
as Internet Brands), which is seeking to raise a $350 million
incremental term loan due 2024 that, along with the cash on its
balance sheet, will be used to fund a special dividend to its
shareholders and future acquisitions.
The rating agency is also affirming its 'B' issue-level and '3'
recovery ratings to Micro Holding's senior secured debt following
the proposed $350 million incremental first-lien term loan. The '3'
recovery rating indicates S&P's expectation for meaningful
(50%-70%; rounded estimate: 60%) recovery of principal in the event
of a payment default.
S&P said, "The rating affirmation reflects our expectation that
leverage will be temporarily elevated in 2020 before declining in
2021."
"Pro forma for the add-on term loan and associated transaction
costs, Micro Holdings had about $1.06 billion in cash as of Sept.
30, 2020. We expect the company will use about $400 million-$500
million of the cash balance to fund a shareholder dividend and use
about $400 million-$500 million to fund acquisitions, including
about $83 million of cash to fund acquisitions for which it has
signed a letter of intent with the seller. We expect the company's
leverage pro forma for the planned acquisitions in 2020 will
approach our 7.5x downside threshold for the rating, but we expect
the company to use its excess cash to fund additional acquisitions
in 2021. These acquisitions, in addition to organic growth in its
digital health care advertising and various health care and legal
software-as-a-service subscription products, should support
leverage declining below 7x. Furthermore, our rating on Micro
Holding reflects its good cash flow conversion of its EBITDA with
FOCF to debt remaining in the high-single-digit area in 2020 and
2021."
Micro Holding's business model has proved resilient through the
COVID-19 pandemic, and it benefits from solid underlying growth
prospects.
Micro Holding's total revenue increased about 10% in the first nine
months of 2020, as a result of strong pharmaceutical sales in its
WebMD business and inorganic growth from acquisitions. This was
partially offset by moderate revenue declines to its smaller
Internet Brands business segment, particularly for its legal lead
generation product, and autos advertising segment. EBITDA grew at a
faster pace than revenue, aided by the company's cost-reduction
initiatives, primarily on the labor side. Despite macroeconomic
headwinds and an economic contraction, S&P expects Micro Holding to
grow organically from strong secular industry trends in e-commerce
and digital ad spending and inorganically from future
acquisitions.
The company's aggressive acquisition strategy and history of large
shareholder returns demonstrate a tolerance for relatively high
leverage and pose downside risks for the rating.
S&P said, "We expect the company's leverage will remain high, given
its acquisitive growth strategy, high leverage tolerance, and
history of large shareholder returns to its owner, Kohlberg Kravis
Roberts & Co. L.P. Micro Holding has a history of integrating and
increasing the margins of the companies it acquires, such as
StayWell in March 2020 and the four acquisitions it completed in
2019. However, sizable future acquisitions pose integration risk
and could keep leverage elevated for a prolonged period."
"The stable outlook reflects our expectation that Micro Holding's
leverage pro forma for the dividend and planned acquisitions will
increase to the low- to mid-7x area in 2020 before approaching the
7x area in 2021. This expectation assumes Micro Holding's FOCF to
debt remains above 5% while the company integrates acquisitions and
generates strong, mid-single-digit percent organic growth in its
health and legal businesses."
S&P could lower its issuer credit rating on Micro Holding if:
-- Competitive pressures in the legacy Internet Brands segments or
a prolonged economic slowdown cause its organic growth in its legal
and health segments (excluding WebMD) to slow to the
low-single-digit percent area;
-- The company pursues additional debt-financed dividends; or
-- Leverage increases and remains above 7.5x while FOCF to debt
falls below 5% on a sustained basis.
Although unlikely, S&P could raise the rating if:
-- S&P expects the company will pursue a less aggressive financial
policy such that it reduces and maintains leverage below 5.5x; and
-- It successfully increases diversification and
subscription-based services through an acquisition while
maintaining healthy cash flow generation of about 10% of debt.
N & G PROPERTIES: Seeks Plan Exclusivity Extension Thru Jan. 21
---------------------------------------------------------------
N & G Properties, LLC asks the U.S. Bankruptcy Court for the
District of New Jersey to extend the Debtor's exclusive period to
file a Chapter 11 plan by 120 days through and including January
21, 2021, and to obtain acceptances of the plan by 180 days through
and including March 22, 2021.
The Debtor owns a single property that generates all of the
Debtor's income and which designates the case as a "single asset
real estate" case. The Property consists of a single story building
with approximately 21,168 square feet on a 4.1-acre size lot. There
are currently five tenants occupying the premises with an
additional 5,000 square feet available for new tenant occupancy.
The Debtor sought bankruptcy protection only days before a
Sheriff's sale in order to save the Property and have the ability
to reorganize its financial affair.
Since the petition date, the Debtor has been carefully reviewing
its operations in order to formulate a successful Plan of
Reorganization. Before the bankruptcy filing on January 19, 2019, a
state court rent receiver was appointed in connection with a
pending foreclosure proceeding bearing case number F-023139-18.
This rent receiver is still in place and counsel for the Debtor and
secured creditor successfully negotiated terms for an interim
consent order on July 27, 2020, allowing the rent receiver to
remain, with conditions, while the Debtor proceeds to exercise its
rights and protections afforded to it under the Bankruptcy Code.
Because of it, all of the financial records available at the time
of the petition date were not in the possession of the Debtor and
the Debtor and its professionals have had to spend considerable
amounts of time reviewing this information and assessing the
Property's cash flow and financial condition.
The global COVID-19 pandemic has affected all aspects of the
Debtor's normal business operations and cash flow to be able to
appropriately propose a feasible Plan at this juncture of this
global crisis.
The Debtor has finalized a lease with a new tenant performing dog
grooming services which will provide an additional rental income
stream of $2,700.00 per month. All terms for the new lease have
been finalized and the only delay has been obtaining an Engineer's
Certification confirming that the septic system for the building
will be sufficient to support the usage of the new dog grooming
business in order to obtain the certificate of occupancy.
The Counsel for the Debtor and SB One Bank are in the process of
negotiating an amended proof of claim for the secured creditor in
lieu of filing a motion to object to the claim to preserve estate
assets and minimize attorney fees expenses for litigating same.
To summarize, the Debtor needs the time to:
(i) establish positive cash flow and the ability to market the
available open space for additional income for years to come;
(ii) determine which leases and/or executory contracts will be
assumed or rejected (the Debtor is the Lessor and not the Lessee in
all the current lease agreements) since the consent order
authorizing the rent receiver to remain on an interim basis. It
will also allow the Debtor to be reimbursed for repair and
maintenance expenses incurred on the property will aid the Debtor
with positive cash flow to fund a plan of reorganization; and
(iii) resolve the claim so that a proper equity analysis could
be determined so that the Debtor can aggressively market the
property for a sale or refinance and ultimately exit bankruptcy
protection.
About N & G Properties
N & G Properties, LLC is a single asset real estate, a limited
liability company with a property address of 1572-1574 Sussex
Turnpike, Randolph, NJ 07869. On January 24, 2020, the Debtor filed
a voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D.N.J. Lead Case No. 20-11146).
At the time of the filing, N & G Properties estimated $0 to $50,000
in assets and $1 million to $10 million in liabilities. The
petition was signed by Joon Tae Yi, a managing member.
The Honorable Vincent F. Papalia oversees the case. The Debtor
tapped Steven D. Pertuz, Esq. of the Law Offices of Steven D.
Pertuz, LLC as legal counsel.
NATIONAL MEDICAL: Wins April 8 Plan Exclusivity Extension
---------------------------------------------------------
At the behest of National Medical Imaging, LLC and its affiliates,
Judge Eric L. Frank of the U.S. Bankruptcy Court for the Eastern
District of Pennsylvania extended the period in which the Debtors
may file a chapter 11 plan through and including April 8, 2021, and
to solicit acceptances for a plan through June 7, 2021.
With the extension, the Debtors will be able to maintain a
framework conducive to an orderly, efficient, and cost-effective
liquidation process and avoid critically impair the Debtors'
ability to successfully liquidate their remaining assets with no
benefit to the Debtors' estates or creditors.
"We will be able to spend the next couple of months addressing the
U.S. Bank's Motion to dismiss the complaint and expedite the
proceedings as much as possible so that it will be resolved within
the outside limitations," the Debtors said.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/2TnHcg4 at no extra charge.
About National Medical
National Medical Imaging, LLC, and National Medical Imaging Holding
Company, LLC provide medical and diagnostic laboratory services
with a principal place of business located at 1425 Brickell Ave.,
Apt. 57E, Miami.
On June 12, 2020, National Medical Imaging and National Medical
Imaging Holding Company filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Lead Case No.
20-12618). At the time of the filings, each Debtor disclosed assets
of $10 million to $50 million and liabilities of the same range.
The Debtors have tapped Dilworth Paxson LLP as their bankruptcy
counsel and Kaufman, Coren & Ress, P.C. and Karalis P.C. as their
special counsel. On October 23, 2020, the Debtors hired Erwin
Chemerinsky, the dean and Jesse H. Choper Distinguished Professor
of Law of the University of California, Berkley School of Law, as
their special counsel.
Prior to Debtors' voluntary Chapter 11 filing, DVI Receivables
Trusts and other creditors filed involuntary Chapter 11 petitions
(Bankr. E.D. Pa. Case Nos. 05-12714 and 05-12719) against Debtors
on March 3, 2005.
In 2014, National Medical Imaging hit U.S. Bank N.A. and eight
others with a $50 million lawsuit in Pennsylvania federal court
alleging the bank ruined its business by forcing it into
involuntary bankruptcy proceedings just as it was beginning to
implement a turnaround plan. National Medical Imaging claims that
the involuntary bankruptcy petitions ultimately destroyed its
business even though the cases were ultimately tossed.
NEFFGEN FAMILY: CBL Says Plan Should Pay Admin. Claim in Full
-------------------------------------------------------------
CBL & Associates Management, Inc., managing agent for Westgate
Crossing Limited Partnership (Landlord), landlord from which Debtor
Neffgen Family Stores, LLC d/b/a Mighty Dollar leased real
property, objects to the Disclosure Statement and Plan of
Reorganization of the Debtor.
CBL objects to the Plan absent it providing for full payment of
CBL's administrative claim (tentatively calculated in the amount of
$29,806.25 plus attorneys' fees) on the effective date of a Plan.
CBL claims that it is quite likely that Debtor's administrative
claim amount is as much as $100,000 higher than Debtor indicates in
the Plan given Debtor's apparent attempt to avoid paying scheduling
or administrative rent claims to multiple landlords.
CBL asserts that it is similarly unclear how this Debtor can
consummate the Plan as filed Given Debtor's failure to put a
comprehensive plan to monetize the estate's assets.
CBL points out that Debtor should be required to set an
administrative claim bar date so this Court can determine the
amount of administrative claims outstanding and if the proposed
Plan is financially feasible, and present the current assets of the
estate and their proposed value.
A full-text copy of CBL's objection dated September 15, 2020, is
available at https://tinyurl.com/y6f8gsr4 from PacerMonitor.com at
no charge.
Attorneys for CBL:
Richard R. Gleissner
District Court ID No. 5389
1237 Gadsden Street, Suite 200A
Columbia, SC 29201
Tel: (803) 787-0505
E-mail: Rick@Gleissnerlaw.com
About Neffgen Family Stores
Neffgen Family Stores, LLC, is a seller of home goods with various
locations in upstate South Carolina.
Neffgen Family Stores sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.S.C. Case No. 20-00571) on Feb. 1, 2020.
At the time of the filing, the Debtor was estimated to have assets
of between $500,000 and $1 million and liabilities of between $1
million and $10 million. Judge Helen E. Burris oversees the case.
The Debtor is represented by The Cooper Law Firm.
NEFFGEN FAMILY: Southern Development Says Plan Violates Sec 1129(a)
-------------------------------------------------------------------
Southern Development of Greenville, Inc., objects to the Disclosure
Statement and Plan of Reorganization of debtor Neffgen Family
Stores, LLC, d/b/a Mighty Dollar.
Southern Development notes that the Plan and Disclosure Statement
provides that Class 5 claimants will have 30 days after the
confirmation date, or such additional time as the Court may allow,
to file a proof of claim. Neither the Plan nor the Disclosure
Statement provide any further information regarding how or when the
Class 5 claims will be paid.
Southern Development believed that the Debtor would vacate the
Greenville Store Premises upon rejection of the Lease, and shortly
thereafter, Southern Development would then file its administrative
priority claim; however, the Debtor failed to vacate the Greenville
Store Premises upon rejection of the Lease.
Southern Development objects to such a limitation to the extent the
Debtor is seeking, through the Plan, to limit Southern
Development's total claim, including its administrative priority
claim, to the amount stated in the Southern Development POC.
Southern Development points out that the Plan fails to satisfy the
requirements of Section 1129(a) of the Bankruptcy Code.
A full-text copy of Southern Development's objection dated
September 15, 2020, is available at https://tinyurl.com/yxpbnccl
from PacerMonitor.com at no charge.
Attorneys for Southern Development:
Kyle A. Brannon
NEXSEN PRUET, LLC
1230 Main Street, Suite 700
Post Office Drawer 2426
Columbia, South Carolina 29202
Tel: (803) 540-2168
Fax: (803) 727-1447
E-mail: kbrannon@nexsenpruet.com
About Neffgen Family Stores
Neffgen Family Stores, LLC, is a seller of home goods with various
locations in upstate South Carolina.
Neffgen Family Stores sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.S.C. Case No. 20-00571) on Feb. 1, 2020.
At the time of the filing, the Debtor was estimated to have assets
of between $500,000 and $1 million and liabilities of between $1
million and $10 million. Judge Helen E. Burris oversees the case.
The Debtor is represented by The Cooper Law Firm.
NEFFGEN FAMILY: U.S. Trustee Says Plan Not Feasible
---------------------------------------------------
The Acting United States Trustee for Region Four (the UST) objects
to the Disclosure Statement and Plan of Reorganization of Debtor
Neffgen Family Stores, LLC d/b/a Mighty Dollar.
The UST claims that the Disclosure Statement provides for the sale
of all assets, but it does not discuss the various options
discussed in the Motion to Sell. The Disclosure Statement also has
not been amended to reflect the issues raised by landlords to the
Motion to Sell.
The UST points out that the Disclosure Statement does not specify
what costs the debtor's principal is willing to cover or where the
debtor's principal will obtain the money to make the 25% payment to
creditors if the liquidation of the debtor's assets yields
insufficient funds.
The UST asserts that on page 5 of the Disclosure Statement, it
discusses preferential transfers that includes the transfer of
$350,000 to an affiliated entity. The Disclosure Statement fails to
discuss whether it will pursue recovery of preferential transfers
to distribute to creditors.
The UST states that the Plan is not feasible and the Plan also
fails to address all claims against the debtor.
A full-text copy of the UST's objection to plan and disclosure
statement dated September 15, 2020, is available at
https://tinyurl.com/y6f8gsr4 from PacerMonitor.com at no charge.
Linda K. Barr, Id. 6284
Trial Attorney
Office of the United States Trustee
1835 Assembly St., Suite 953
Columbia, South Carolina 29201
(803) 765-5219
linda.k.barr@usdoj.gov
About Neffgen Family Stores
Neffgen Family Stores, LLC, is a seller of home goods with various
locations in upstate South Carolina.
Neffgen Family Stores sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.S.C. Case No. 20-00571) on Feb. 1, 2020.
At the time of the filing, the Debtor was estimated to have assets
of between $500,000 and $1 million and liabilities of between $1
million and $10 million. Judge Helen E. Burris oversees the case.
The Debtor is represented by The Cooper Law Firm.
NESCO HOLDINGS: Posts $15.2 Million Net Income in Third Quarter
---------------------------------------------------------------
Nesco Holdings, Inc., filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing net income
of $15.17 million on $69.26 million of total revenue for the three
months ended Sept. 30, 2020, compared to a net loss of $18.01
million on $62.44 million of total revenue for the three months
ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $13.95 million on $219.48 million of total revenue
compared to a net loss of $30.16 million on $186.79 million of
total revenue for the same period during the prior year.
As of Sept. 30, 2020, the Company had $769.45 million in total
assets, $40.88 million in total current liabilities, $752.97
million in total long-term liabilities, and a total stockholders'
deficit of $24.41 million.
"In the third quarter we saw sequentially improving demand and the
beginning of a return to normal seasonality trends as new projects
ramped up," said Lee Jacobson, chief executive officer of Nesco.
"The pandemic continued to impact our business through July and
early August, but we saw substantial improvement in late August
that continued into September and October. While our average
original equipment cost on rent for the third quarter was down 4.1%
year-over-year to $464 million, we exited the third quarter with
$489 million of original equipment cost on rent, an increase of
more than 10% from the start of the quarter, with momentum
continuing into the fourth quarter. We have good visibility into
planned project starts and are excited about the recovery that is
now under way."
"We maintained a disciplined approach to costs and capital
investments in the third quarter, which helped drive positive free
cash flow for the second consecutive quarter and enabled us to
reduce debt and maintain strong liquidity," said Josh Boone, chief
financial officer of Nesco. "Additionally, we continue to optimize
our working capital balances and dispose of underperforming assets,
putting the organization in a solid financial position. For the
remainder of the year and beyond, we are focused on executing on
our disciplined capital allocation strategy of investing in our
fleet to maximize asset level returns, balanced with free cash flow
generation and debt reduction. We are confident in our ability to
maximize shareholder value and are committed to a long-term
leverage target of 3.0x to 3.5x."
Liquidity and Cash Flow
The Company had cash of $1.6 million and availability of $67.4
million under its asset-based credit facility for total liquidity
of $69.1 million as of Sept. 30, 2020. Net debt outstanding,
including capital leases, was $764.8 million at the end of the
third quarter of 2020. The Company has no near-term debt
maturities, as its $385.0 million credit facility and $475.0
million senior secured notes both mature in 2024.
Nesco reported negative cash flow from operating activities of $4.8
million, an increase of $0.3 million compared to third quarter of
2019. Net cash inflow from investing activities of $5.4 million
improved from a $26.5 million cash outflow for the same period of
2019 as Nesco curtailed capital expenditures and increased sales of
rental equipment. Free cash flow increased to $0.5 million from
negative free cash flow of $29.3 million in the third quarter of
2019.
Average fleet count increased 7.6% to 4,542 units, compared to
4,221 units a year ago. Total net capital expenditures were
negative $5.3 million, resulting in a net cash inflow. Gross
capital expenditures, which include purchases of rental fleet and
property and equipment, were $3.4 million. The Company received
$8.7 million from sale of rental equipment and parts as well as
insurance proceeds from damaged equipment. Nesco has invested
$30.0 million in net capital expenditures to date in 2020.
2020 Outlook
The Company has withdrawn its previous full year 2020 guidance as a
result of the unpredictable nature of the COVID-19 pandemic. While
a recovery from the COVID-19 pandemic appears to be under way and
there is more visibility into future projects and demand, the
Company plans to reinstate earnings guidance at a future date as it
continues to assess the continuously changing economic and market
conditions.
The Company is updating its outlook for net capital expenditures to
be between $30 to $35 million for the full year 2020.
"As we look to the remainder of the year, we are well positioned to
capitalize on new project starts and improving market demand.
Momentum is building in our core markets and long-term tailwinds
should continue to be a catalyst for our financial results in 2021
and beyond. Our focus on navigating through the pandemic and
short-term execution continues in the fourth quarter. We remain
focused on long-term strategic growth, generating free cash flow,
reducing leverage and driving shareholder value," Jacobson said.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1709682/000170968220000064/nsco-20200930.htm
About Nesco
Nesco -- https://investors.nescospecialty.com/ -- is a provider of
specialty equipment, parts, tools, accessories and services to the
electric utility transmission and distribution, telecommunications
and rail markets. Nesco offers its specialized equipment to a
diverse customer base for the maintenance, repair, upgrade and
installation of critical infrastructure assets including electric
lines, telecommunications networks and rail systems. Nesco's
coast-to-coast rental fleet of over 4,600 units includes aerial
devices, boom trucks, cranes, digger derricks, pressure drills,
stringing gear, hi-rail equipment, repair parts, tools, and
accessories.
Nesco reported net losses of $27.05 million in 2019, $15.53 million
in 2018, and $27.09 million in 2017.
* * *
As reported by the TCR on May 5, 2020, S&P Global Ratings lowered
its issuer credit ratings on NESCO Holdings Inc. and subsidiary
Capitol Investment Merger Sub 2 LLC to 'CCC+' from 'B'. "The
downgrade and negative outlook reflect the increasing risk of
tightening liquidity given our expectation for slowing demand in
specialty equipment rental and sales during a recession," S&P said.
NETWORKBUILDER LLC: Secured Creditor Says Disclosures Inadequate
----------------------------------------------------------------
SN Servicing Corporation, its successors and/or assignees, as
servicer for the current noteholder ("Secured Creditor"), submited
an objection to the approval of the Networkbuilder LLC's Disclosure
Statement and Plan with regard to the real property located at 5504
Full Moon Drive, Fort Worth TX 76132 ("subject property").
The Secured Creditor points out that:
* The Debtor's disclosure statement and plan seek to limit
Secured Creditor's total claim to the amount of its proof of claim,
without taking in account post-petition interest, fees, etc.
* The disclosure statement and plan do not provide any
information regarding the alleged 4% interest rate proposed to pay
Secured Creditor.
* The plan and disclosure statement do not provide for any
information regarding the continued maintenance of taxes and
insurance on the subject property, whether those obligations are to
be paid through escrow or directly by the Debtor.
* The disclosure statement and plan do not provide for adequate
default provisions in the event the debtor defaults on the plan
terms post-confirmation.
Counsel for the Secured Creditor:
Chase Berger, Esq.
600 E John Carpenter Fwy., Ste. 200
Irving, TX 75062
E-mail: cberger@ghidottiberger.com
About Networkbuilder LLC
Based in Fort Worth, Texas, Networkbuilder LLC filed a petition
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No.
19-44550) on Nov 4, 2019, listing under $1 million in both assets
and liabilities. The Law Office Of Alice Bower is the Debtor's
counsel.
NEW FRONTIERS PUBLIC SCHOOLS: S&P Cuts Revenue Bond Rating to 'BB'
------------------------------------------------------------------
S&P Global Ratings lowered its long-term rating on the Texas Public
Finance Authority Charter School Finance Corp.'s series 2010A
tax-exempt education revenue bonds and series 2010Q education
revenue bonds, issued for New Frontiers Public Schools (NFPS,
formerly known as New Frontiers Charter School) to 'BB' from 'BB+'.
The outlook is negative.
"The downgrade reflects continued enrollment declines through fall
2020, which have been greater than we anticipated at the time of
our last review. The downgrade also reflects the school's softening
financial performance in the past three fiscal years, demonstrated
by decreasing unrestricted days' cash on hand and weakened
lease-adjusted maximum annual debt service (MADS) coverage based on
our calculations. Additionally, we understand there is an ongoing
disagreement between the school and its authorizer, Texas Education
Agency (TEA) related to the agency's directive for NFPS to phase
out its elementary and middle school campuses," S&P said.
"The negative outlook reflects our view of the uncertainty
surrounding NFPS' relationship with TEA and its associated charter
contract while also recognizing its financial profile could
continue to weaken over the near term if operating margins do not
meet management's projections for fiscal 2021, or if enrollment
continues to decline without a credible plan to reverse the
enrollment trend," said S&P Global Ratings credit analyst Chase
Ashworth," the rating agency said.
NOFALIA INC: Trudy's Southwest Austin Location Sold to Uchi Owner
-----------------------------------------------------------------
Paul Thompson of Austin Business Journal reports that most of the
locations of Tex-Mex staple Trudy's were purchased out of
bankruptcy this past summer by private equity firm Hargett Hunter
Capital Management LLC.
But one that had closed back in 2019, in far Southwest Austin near
Dripping Springs, was not part of the deal. It has now been sold:
Daryl Kunik, owner of Central Austin Management Group and co-owner
of acclaimed sushi restaurant Uchi, bought the restaurant for $4.1
million, according to bankruptcy records.
The property was sold by a Trudy's affiliate called Nofalia Inc.
Attorney Steve Sather of Barron & Newburger PC, who represented
Trudy's throughout the bankruptcy process, said on Nov. 2 the deal
had been finalized and the "money is in the bank."
The hope, Sather said, is that unsecured creditors of Trudy's will
get a portion of the proceeds.
"Being at the end of the case with money left to distribute is a
good result," he said.
"It's a relief that the Trudy's Nofalia assets are in the hands of
people who will be able to put them to good use," Sather continued.
"Now it's just a matter of completing the administrative aspects of
the bankruptcy."
Central Austin Management Group is behind the development of
restaurant projects including Uchi and sister restaurant Uchiko,
the Emo's music venue in the East Riverside Drive area and creative
office campus Springdale General in East Austin.
Pete Narvarte, vice president of development at Central Austin
Management Group, confirmed Nov. 3, 2020 the company has closed on
the property.
"Right now it's just a purchase," Narvarte said. "We've got lots of
ideas, but that takes time to kind of bake."
The location has an Austin address at 13059 Four Star Blvd., though
it has typically been referred to as the Dripping Springs location.
It was most recently appraised for tax purposes at nearly $4.9
million, according to Hays Central Appraisal District records.
The site comprises about 4.89 acres, according to bankruptcy
documents, while the building has a usable area of 12,435 square
feet, according to Hays CAD. But Narvarte pointed out the site also
has about 5,000 square feet of patio space.
"It's going to take a pretty special user in there to fill that
17,000 square feet," he said.
The Dripping Springs/Southwest Austin location of Trudy's was a
money pit for the Tex-Mex restaurant chain. It was losing nearly $1
million before it shuttered and was blamed in bankruptcy documents
for putting Trudy's in a precarious financial position.
Hargett Hunter in July won an auction sale with a $6.5 million bid
for the rest of the Trudy's locations — three locations of
Tex-Mex eatery Trudy's in Austin as well as South Congress Cafe,
which all remain open.
The private equity firm beat out some local bidders in the auction,
including Steiner Ranch Steakhouse and a group that included Ellis
Winstanley, co-owner of prominent Austin restaurants such as El
Arroyo and Abel's on the Lake.
Trudy's was founded by Gary Truesdell in 1977 and has been in the
family ever since. Dan Smith took over as CEO of Trudy's after the
Hargett Hunter purchase.
Trudy's filed for Chapter 11 bankruptcy protection in January
2020.
About Nofalia Inc.
Nofalia, Inc. owns in fee simple three real properties in Austin,
Texas, having a total current value of $13.6 million.
Nofalia filed a Chapter 11 petition (Bankr. W.D. Tex. Case No.
20-10212) on Feb. 13, 2020. In the petition signed by Stephen
Truesdell, authorized representative, the Debtor disclosed
$13,600,550 in assets and $7,675,266 in liabilities. The Hon. Tony
M. Davis oversees the case. Stephen W. Sather, Esq., at Barron &
Newburger, PC, is the Debtor's bankruptcy counsel.
NPC INT'L: Flynn Restaurant Has $816 Million Stalking Horse Bid
---------------------------------------------------------------
NPC International, Inc., announced Nov. 6, 2020, that it has
entered into a stalking horse asset purchase agreement (the "APA")
with Flynn Restaurant Group LP through certain of its subsidiaries
and will seek approval of Flynn as the stalking horse bidder from
the U.S. Bankruptcy Court for the Southern District of Texas.
Flynn has agreed to acquire substantially all of NPC's assets in a
sale process under Section 363 of the U.S. Bankruptcy Code. The
agreement is subject to Court approval and any higher or better
offers pursuant to the bidding procedures and deadlines previously
approved by the Court.
Under the terms of the APA, Flynn would acquire all of NPC's more
than 1,300 Pizza Hut and Wendy's restaurants across the country, as
well as NPC's Shared Services assets for $816 million. Flynn has
committed to offer employment to substantially all of NPC's more
than 30,000 full and part time employees.
Flynn is the largest restaurant franchisee in the United States.
Founded in 1999 and headquartered in San Francisco, Flynn operates
over 1,200 Applebee's, Taco Bell, Panera and Arby's restaurants
across the country.
"This is a significant step in our restructuring process, and we
are very pleased to have reached this agreement with Flynn, which
validates the strong value and long-term potential of NPC's
business," said Jon Weber, CEO & President of NPC's Pizza Hut
division. "As we continue to work through the sale process and
solicit bids for our assets from other interested parties in
accordance with the Court approved bidding procedures, our
restaurants across the country will remain open."
"An important aspect of the stalking horse agreement is Flynn's
commitment to offer employment to substantially all of NPC's
employees," said Carl Hauch, CEO & President of NPC's Wendy's
division. "We are pleased that Flynn recognizes the unique value of
our team of employees, and we are tremendously proud of the
commitment our employees have shown during this challenging year as
we navigate the effects of the COVID-19 pandemic."
"We are very excited about the possibility of acquiring NPC's
portfolio of Pizza Hut and Wendy's restaurants, as well as its
Shared Services division," said Greg Flynn, Founder, Chairman and
Chief Executive officer of Flynn Restaurant Group. "These are
great assets and iconic restaurant brands, and we are confident we
can maximize the long-term value of the business as we continue to
pursue our goal of being the premier franchise group in the
restaurant industry."
A court hearing to approve Flynn as the stalking horse bidder will
take place on Nov. 13, 2020. NPC intends to continue to solicit
bids from other interested parties for some or all of its assets in
accordance with the Court-approved bidding procedures and expects
to hold a sale hearing on December 4. Interested bidders are
encouraged to contact the Company's financial advisors, Greenhill &
Co., which may be reached by contacting Neil Augustine (
neil.augustine@greenhill.com ), Thomas McCarthy (
thomas.mccarthy@greenhill.com ) or Nick Drayson (
nick.drayson@greenhill.com ).
About NPC International Inc.
NPC International, Inc. -- https://www.npcinternational.com/ -- is
a franchisee company with over 1,600 franchised restaurants across
two iconic brands -- Wendy's and Pizza Hut -- spanning 30 states
and the District of Columbia. NPC International is the largest
franchisee of any restaurant concept in the U.S., based on unit
count, and the fifth largest restaurant unit operator, based on
unit count, in the U.S. The Company, which is headquartered in
Leawood, Kansas and has a shared services center located in
Pittsburg, Kansas, has more than 30,000 full and part time
employees at both Pizza Hut and Wendy’s, and operates in 30
states and District of Columbia.
NPC International and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-33353) on July 1, 2020. At the time of the filing, the Debtors
disclosed assets of between $1 billion and $10 billion and
liabilities of the same range.
Judge David R. Jones oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP, as bankruptcy
counsel; Alixpartners, LLP as financial advisor; Greenhill & Co.,
LLC as investment banker; and Epiq Corporate Restructuring, LLC as
claims, noticing and solicitation agent and administrative
advisor.
Davis Wright Tremaine LLP and Kirkland & Ellis LLP are serving as
legal counsel to Flynn Restaurant Group LP, the stalking horse
bidder for the Debtors' assets. Flynn has signed a deal to
purchase the assets for $816 million absent higher and better
offers.
NPC INTERNATIONAL: Jackson, Gibson 2nd Update of Priority/1L Group
------------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Jackson Walker LLP and Gibson, Dunn & Crutcher LLP
submitted a corrected first amended verified statement to disclose
an updated list of Ad Hoc Priority/1L Group that they are
representing in the Chapter 11 cases of NPC International, Inc., et
al.
In July 2019, the members of the Ad Hoc Priority/1L Group retained
counsel, who as of October 2019 joined Gibson, Dunn & Crutcher LLP
to represent them as counsel in connection with a potential
restructuring of the outstanding debt obligations of the
above-captioned debtors and certain of their subsidiaries and
affiliates. Subsequently, on or about June 24, 2020, Gibson Dunn
contacted Jackson Walker LLP to serve as Texas co-counsel to the Ad
Hoc Priority/1L Group.
On July 2, 2020, the Ad Hoc Priority/1L Group filed the Verified
Statement of the Ad Hoc Priority/1L Group Pursuant to Bankruptcy
Rule 2019 [Docket No. 91]. This Verified Statement amends and
replaces the Original Verified Statement.
Gibson Dunn and Jackson Walker represent the members of the Ad Hoc
Priority/1L Group in their capacities as lenders under (i) that
certain Super-Priority Term Loan Credit Agreement, dated as of
January 21, 2020, among NPC Restaurant Holdings, as Holdings and
guarantor, NPC International, NPC Quality and NPC Operating, as
borrowers and guarantors, KKR Loan Administration Services LLC, as
administrative Agent, and Deutsche Bank Trust Company Americas, as
collateral agent, and the several lenders from time to time parties
thereto, and (ii) that certain First Lien Credit Agreement, dated
as of April 20, 2017, among NPC Restaurant Holdings, as Holdings
and guarantor, NPC International, NPC Quality and NPC Operating, as
borrowers and guarantors, KKR, as administrative agent, and the
lenders from time to time party thereto.
Gibson Dunn and Jackson Walker do not represent or purport to
represent any other entities in connection with the Debtors'
chapter 11 cases. Gibson Dunn and Jackson Walker do not represent
the Ad Hoc Priority/1L Group as a "committee" and do not undertake
to represent the interests of, and are not fiduciaries for, any
creditor, party in interest, or other entity that has not signed a
retention agreement with Gibson Dunn or Jackson Walker. In
addition, the Ad Hoc Priority/1L Group does not represent or
purport to represent any other entities in connection with the
Debtor' chapter 11 cases. Each member of the Ad Hoc Priority/1L
Group does not represent the interests of, nor act as a fiduciary
for, any person or entity other than itself in connection with the
Debtors' chapter 11 cases.
Upon information and belief formed after due inquiry, Gibson Dunn
and Jackson Walker do not hold any disclosable economic interests
in relation to the Debtors.
As of Nov. 5, 2020, members of the Ad Hoc Priority/1L Group and
their disclosable economic interests are:
CMAC Fund 1, L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $97.21
* First Lien Term Loan Indebtedness: $1,165.96
Bain Capital Specialty Finance, Inc.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $411,584.94
* First Lien Term Loan Indebtedness: $4,936,708.86
Suzuka INKA
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $88,679.28
* First Lien Term Loan Indebtedness: $1,063,653.01
AVAW Loans Sankaty
z.H Internationale Kapitalanlagegesellschaft
GmbH
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $36,146.14
* First Lien Term Loan Indebtedness: $433,550.79
Aon Hewitt Group Trust
High Yield Plus Bond Fund
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $75,142.95
* First Lien Term Loan Indebtedness: $901,293.63
Baloise Senior Secured Loan Fund II
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $106,418.64
* First Lien Term Loan Indebtedness: $1,276,426.33
CommonSpirit Health Operating Investment Pool
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $44,833.09
* First Lien Term Loan Indebtedness: $537,745.18
Commonspirit Health Retirement Master Trust
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $42,697.14
* First Lien Term Loan Indebtedness: $512,125.92
Bain Capital Distressed and
Special Situations 2019 (A), L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $3,113.90
* First Lien Term Loan Indebtedness: $37,450.69
Bain Capital Distressed and
Special Situations 2019 (B Master), L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $8,241.94
* First Lien Term Loan Indebtedness: $99,125.46
Bain Capital Distressed and
Special Situations 2019 (F), L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $2,898.38
* First Lien Term Loan Indebtedness: $34,853.63
Bain Capital DSS 2019 Investment Vehicle, L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $1,056.08
* First Lien Term Loan Indebtedness: $12,701.94
FirstEnergy System Master Retirement Trust
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $47,837.25
* First Lien Term Loan Indebtedness: $158,778.21
Future Fund Board of Guardians
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $78,732.30
* First Lien Term Loan Indebtedness: $944,345.20
Bain Capital Credit Managed Account (FSS), L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $160,549.33
* First Lien Term Loan Indebtedness: $1,925,689.80
Government Employees Superannuation Board
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $83,776.54
* First Lien Term Loan Indebtedness: $1,004,848.03
Global Loan Fund
c/o Bain Capital Credit, LP
200 Clarendon Street Boston, MA 02116
* Priority Term Loan Indebtedness: $148,735.56
* First Lien Term Loan Indebtedness: $1,783,990.90
Floating Rate Income Fund
a series of John Hancock Funds II
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $144,340.14
* First Lien Term Loan Indebtedness: $1,731,270.55
Los Angeles County Employees Retirement Association
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $37,983.86
* First Lien Term Loan Indebtedness: $455,592.87
Future Fund Board of Guardians for and
on behalf of Medical Research Future Fund
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $67,746.62
* First Lien Term Loan Indebtedness: $812,579.22
Bain Capital Credit Rio Grande FMC, L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $20,068.67
* First Lien Term Loan Indebtedness: $240,711.22
City of New York Group Trust
New York City Employees' Retirement System
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* First Lien Term Loan Indebtedness: $447,750.07
$447,750.07
City of New York Group Trust
New York City Fire Department Pension Fund System
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* First Lien Term Loan Indebtedness: $227,664.20
Bain Capital Credit Managed Account (PPF) L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $1,907.95
* First Lien Term Loan Indebtedness: $22,884.62
Bain Capital Credit Managed Account (PSERS), L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $44,610.90
* First Lien Term Loan Indebtedness: $535,080.40
Retail Employees Superannuation Trust
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $184,696.86
* First Lien Term Loan Indebtedness: $2,215,324.41
San Francisco City and
County Employees’ Retirement System
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $16,893.31
* First Lien Term Loan Indebtedness: $202,624.78
Bain Capital High Income Partnership, L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $186,966.68
* First Lien Term Loan Indebtedness: $2,242,549.50
Bain Capital Senior Loan Fund, L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $272,673.77
* First Lien Term Loan Indebtedness: $3,270,553.00
Bain Capital Senior Loan Fund (SRI), L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $25,927.38
* First Lien Term Loan Indebtedness: $310,982.89
Sunsuper Pooled Superannuation Trust
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $20,545.02
* First Lien Term Loan Indebtedness: $246,424.76
Bain Capital Credit Managed Account (Blanco), L.P.
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $21,260.13
* First Lien Term Loan Indebtedness: $255,002.12
Blue Cross of California
c/o Bain Capital Credit, LP
200 Clarendon Street Boston, MA 02116
* Priority Term Loan Indebtedness: $72,512.11
* First Lien Term Loan Indebtedness: $869,737.89
Community Insurance Company
c/o Bain Capital Credit, LP
200 Clarendon Street
Boston, MA 02116
* Priority Term Loan Indebtedness: $35,369.67
* First Lien Term Loan Indebtedness: $424,237.27
Investcorp Credit Management US LLC
280 Park Avenue
New York, NY 10017
* Priority Term Loan Indebtedness: $1,588,399.35
* First Lien Term Loan Indebtedness: $20,280,104.41
KKR Credit Advisors (US) LLC
555 California Street, 50th Floor
San Francisco, CA 94104
* Priority Term Loan Indebtedness: $4,699,382.19
* First Lien Term Loan Indebtedness: $72,511,834.89
Monarch Alternative Capital LP
535 Madison Avenue, 26th Floor
New York, NY 10022
* Priority Term Loan Indebtedness: $20,618,358.40
* First Lien Term Loan Indebtedness: $288,600,931.02
* Second Lien Term Loan Indebtedness: $55,275,726.37
Solel Partners LP
699 Boylston Street, 15th Floor
Boston, MA 02116
* Priority Term Loan Indebtedness: $3,991,011.00
* First Lien Term Loan Indebtedness: $72,281,361.00
* Second Lien Term Loan Indebtedness: $14,012,418.00
Sound Point Capital Management, L.P.
375 Park Avenue, 33rd Floor
New York, NY 10152
* Priority Term Loan Indebtedness: $3,981,459.84
* First Lien Term Loan Indebtedness: $39,069,203.97
Counsel for the Ad Hoc Priority/1L Group can be reached at:
Bruce Ruzinsky, Esq.
JACKSON WALKER LLP
1401 McKinney St., Suite 1900
Houston, TX 77010
Telephone: (713)-752-4200
Facsimile: (713) 308-4155
Email: bruzinksy@jw.com
- and -
Scott J. Greenberg, Esq.
Michael J. Cohen, Esq.
GIBSON, DUNN & CRUTCHER LLP
200 Park Avenue
New York, NY 10166
Telephone: (212) 351-4000
Facsimile: (212) 351-4035
Email: sgreenberg@gibsondunn.com
mcohen@gibsondunn.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3kn2Oo9
About NPC International
NPC International, Inc. -- https://www.npcinternational.com/ -- is
a franchisee company with over 1,600 franchised restaurants across
two iconic brands -- Wendy's and Pizza Hut -- spanning 30 states
and the District of Columbia.
NPC International and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-33353) on July 1, 2020. At the time of the filing, the Debtors
disclosed assets of between $1 billion and $10 billion and
liabilities of the same range.
Judge David R. Jones oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP, as bankruptcy
counsel; Alixpartners, LLP as financial advisor; Greenhill & Co.,
LLC as investment banker; and Epiq Corporate Restructuring, LLC as
claims, noticing and solicitation agent and administrative advisor.
ORCA INVESTMENTS: Taps McGovern Newhall as Real Estate Broker
-------------------------------------------------------------
ORCA Investments, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Massachusetts to hire McGovern Newhall, LLC as
its real estate broker.
The firm will market and sell the Debtor's interest in the property
located at 88 Broadway, Salem, Mass.
The firm will be paid a commission upon sale equal to 4 percent of
the gross sales price of the property. The firm will also pay up to
2 percent of the sales price to non-agent facilitators, such as a
buyer's broker.
Patricia Torto of McGovern Newhall disclosed in court filings that
the firm neither holds nor represents any interest adverse to the
Debtor, its creditors, or the estate, and is a "disinterested
person" as that term is defined by the Bankruptcy Code.
The firm can be reached through:
Patricia Torto
McGovern Newhall, LLC
8 Spofford Street
Georgetown, MA, 01833
About Orca Investments
Orca Investments, LLC, based in Georgetown, Mass., filed a Chapter
11 petition (Bankr. D. Mass. Case No. 20-11930) on Sept. 23, 2020.
In the petition signed by Matthew D. Newhall, manager, the Debtor
was estimated to have $1 million to $10 million in assets and
$500,000 to $1 million in liabilities.
Judge Melvin S. Hoffman presides over the case.
Parker & Associates, LLC serves as Debtor's bankruptcy counsel.
PARK AVENUE: Seeks to Hire Bederson LLP as Testifying Expert
------------------------------------------------------------
Park Avenue Leather Goods LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Bederson LLP as its testifying expert.
The firm's services include the preparation of an expert report
setting forth the liquidation analysis for the Debtor, the
provision of expert testimony, and other related work in connection
with the liquidation analysis.
Bederson will receive a fixed fee of $10,000 to prepare the
Debtor's liquidation analysis. It received a retainer in the amount
of $5,000.
Charles Lunden, Esq., a partner at Bederson, 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:
Charles S. Lunden, Esq.
Bederson LLP
347 Mt. Pleasant Avenue, Suite 200
West Orange, NJ 07052
Telephone: (610) 283-9406
Email: clunden@bederson.com
About Park Avenue Leather Goods
Park Avenue Leather Goods LLC, which conducts business under the
name T. Anthony, LLC, is a luxury goods company established in New
York in 1946 that specializes in luggage and leather goods. Visit
https://tanthony.com for more information.
Park Avenue Leather Goods sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-12495) on October 22,
2020. The petition was signed by Steven M. Cherniak, the company's
chief operating officer.
At the time of the filing, Debtor had total assets of $1,378,925
and total liabilities of $3,426,217.
Skolnick Legal Group, P.C. is Debtor's legal counsel.
PAUL SMITH: Unsecureds Will Get 5 Cents on the Dollar in Plan
-------------------------------------------------------------
Paul Smith Jr., DDS, Inc. submitted an Amended Chapter 11 Plan.
The Debtor's primary creditor is the IRS who, on the Petition Date,
was owed $1.16 million that consists of 941 income taxes. The
other creditor is the State of Ohio Income tax for which the Debtor
owed $231,000.
This Plan provided 4 classes of Claims consisting of:
* class of priority claims;
* class of secured claims;
* class of non-priority unsecured claims; and
* class of equity security holders.
The Debtpr's projection shows that the Debtor will have disposable
income for the period descirbe in Sec. 1191(c)(2) of about $10,000.
The final plan payment is expected to be paid on the fifth
anniversary from the Effective Date.
Non-priority unsecured creditors will receive an estimated
distributions from the Debtor's Disposable Income over the length
of this Plan approximately [5] cents on the dollar.
The Plan provides that:
* Class 2. There is one creditor in this Class the IRS with a
Secured Claim amount of $166,647.35.
* Class 3. The Debtor has two unsecured, non-priority claims,
one with IRS of $828,512.67 and one with the State of Ohio of
$73,720.64.
* Class 4. Dr. Smith is the sole member in this class.
The IRS priority claim amount of $164,701.47 will bear interest at
the rate specified in 26 U.S.C. 6621(a)(2)(currently 3%) and will
be paid in full in monthly installments of $2,959.47 per month for
60 months from the filing date of this bankruptcy case.
State of Ohio priority claim amount of $152,059.65 will bear
interest at 3% and will be paid in monthly installments of
$2,731.31 month.
Payment to IRS will bear interest at the rate specified in 26
U.S.C. 62221(a)(2)(currently 3%) and will be paid in monthly in
payments of $2,994.43.
The unsecured amount of the IRS is $828,512.67 and for the State of
Ohio is $73,730.64 which will be paid pro rata from the disposable
income of the Debtor projects that it will ultimately pay at 5% of
the amount owed. Payments will be made monthly commencing on the
first day of the first month following the month in which the
Effective Date of this Plan occurs and shall continue to be made on
the first day each such month thereafter until completion of the
Plan.
Dr. Smith is the sole Equity holder in the Debtor. Dr. Smith will
continue to own the Debtor after confirmation of this Plan. Dr.
Smith is unimpaired under this Plan and not entitled to vote on the
Plan.
Debtor does not anticipate objecting to any claims.
A full-text copy of the Amended Chapter 11 Plan dated September 16,
2020, is available at https://tinyurl.com/y69qobj9 from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Gary Cook, Esq.
23880 Commerce Park, Suite 2
Beachwood, Ohio 44122
Email: gcookesq@yahoo.com
About Paul Smith
Paul Smith Jr., DDS., Inc. is a dental services provider owned and
managed by Paul Smith Jr. Business has been conducted in
Beachwood, Ohio for the past 20 years. The company's property
consists entirely of dental equipment while the company is leasing
its operating space from a third party. Paul Smith Jr., DDS.,
Inc., sought Chapter 11 protection in 2019 (Bankr. N.D. Ohio Case
No. 19-11251). The case is pending before Judge Athur I. Harris.
Gary Cook is Debtor's counsel.
PBF HOLDING: Fitch Downgrades LT IDR to B+, Outlook Negative
------------------------------------------------------------
Fitch Ratings has downgraded PBF Holding Company LLC's Long-Term
Issuer Default Rating (IDR) to 'B+' from 'BB-'. Fitch also affirmed
the rating of the asset-based lending (ABL) Working Capital
Revolving Credit Facility at 'BB+'/'RR1' and the senior secured
bonds at 'BB'/'RR2'. Fitch has downgraded the senior unsecured
notes to 'B+'/'RR4' from 'BB-'/'RR4'. The Rating Outlook remains
Negative.
The downgrade reflects the continued duration and depth of the
refining sector downturn, which has led to material FCF deficits
and tightening liquidity. Fitch believes that recent actions taken
by the company, including the $1 billion issuance of first-lien
debt in May, reductions in operating costs and capital spending,
and the announced reconfiguration of the East Coast refineries,
should help mitigate the cash outflow. However, Fitch does not
believe that PBF Holding currently has access to the unsecured debt
capital markets and there is considerable uncertainty as to when
the refining sector will turn around.
Liquidity should be sufficient to carry the company through 2021,
but the absence of a recovery in the second half of 2021 could lead
to significantly tighter liquidity conditions thereafter. Fitch
notes that PBF Holding's next maturity is the revolver in 2023 and
the next bond maturity is early 2025.
Refiners have historically shown an ability to adjust quickly to
drops in demand and can rebound quickly as demand increases. Given
PBF Holding's scale, a slight change in crack spreads could lead to
materially higher cash flow. Gasoline demand has increased to 90%
of pre-pandemic levels but jet fuel demand continues to lag. Fitch
expects the sector to gradually improve over time, although Strip
futures crack spreads point to a modest recovery for 2021. Fitch
also questions whether the response to the pandemic may bring more
secular changes to the demand for refined products, such as more
employees working from home and reduced air travel.
The Negative Outlook reflects the risk to the refining sector that
demand will not return for an extended period of time. In addition,
while Fitch believes that PBF Holding has additional levers to
enhance liquidity, a downgrade could occur if overall liquidity
declines below $500 million. The Negative Outlook could be removed
if conditions normalize and liquidity has not been materially
compromised. Additional reconfigurations could potentially lead to
lower recovery valuations for the senior unsecured notes on a
negative rating action that could result in a multiple notch
downgrade for those notes.
KEY RATING DRIVERS
Coronavirus Impact: The coronavirus that led to the current
economic downturn and subsequent reduction in demand for gasoline
and jet fuel has had a material impact on PBF Holding's credit
metrics. Adjusted EBITDA as reported by the company declined to
negative $717 million for the nine months ended September 2020
compared with $459 million for the prior year period. Fitch expects
PBF to generate negative EBITDA through the first half of 2021 with
the expectation that the impact of the coronavirus on the economy
will be reduced over time, although recognizing there is no
certainty as to the duration or the depth of its impact. Fitch
believes PBF has sufficient liquidity to withstand an extended
downturn through 2021, although a continued reduction in economic
activity beyond 2021 will severely stress liquidity measures
thereafter.
Liquidity Sufficient for Now: PBF has an estimated $1.9 billion of
liquidity, including $1,253 million of cash on hand as of Sept. 30
2020 and approximately in excess of $600 million of availability
under its revolver. The revolver is an asset-based revolver, and
PBF's access was limited earlier in the year when crude prices
tumbled, which reset inventory valuations. Thus, availability could
be reduced when most needed if there is another sharp decline in
crude prices.
The company does not have any material maturities until 2023 when
the revolver is due. PBF will have $1,725 million due in 2025 when
two bonds mature. PBF also has a $300 million uncommitted
receivables purchase facility that allows the company to sell
certain receivables. The company also has a carveout of $250
million for incremental first-lien debt and $500 million for
second-lien debt. However, given current trading prices for these
notes, an unsecured debt issuance is unlikely. Fitch believes these
carveouts could be utilized to exchange for senior unsecured notes
at a discount, although this would not have the effect of enhancing
liquidity. Fitch does not believe management has current plans for
a debt exchange.
East Coast Reconfiguration: PBF Holding announced it was
reconfiguring its East Coast refining system, which includes its
Delaware City and Paulsboro refineries. The company plans to idle
the smaller of two crude units, a coker, a fluid catalytic cracker
and several smaller units at its Paulsboro refinery. Throughput
capacity will decline to 260,000 barrels per day from 370,000
barrels per day and the reconfiguration is expected to be completed
by year-end 2020. Management expects to reduce annual operating
expenses by $100 million and annual capital spending by $50
million. The company will also receive a one-time working capital
benefit of $35 million and incur approximately $15 million in legal
and severance costs. Fitch believes PBF has reconfiguring
opportunities at its other refineries, particularly at its West
Coast refineries, if necessary.
Other Actions Taken: Since the onset of the coronavirus, PBF has
taken several actions to enhance liquidity. Management claims to
have achieved $225 million in operating cost reductions from its
original plan of $140 million and corporate expenses were reduced
by $20 million. The company has also reduced planned capital
spending by $240 million to $360 million. PBF monetized five
hydrogen plants in a sales-leaseback transaction for $530 million
in April 2020. Finally, the company raised approximately $1 billion
through a sale of senior secured notes that greatly enhanced
liquidity. Fitch believes PBF has other levers available if the
downturn is deeper or of an extended duration, including further
sale-leaseback transactions, idling more units and reducing
inventory to free up working capital.
Manageable Scale and Diversification: The acquisition of the
Martinez refinery in California, which was completed in February
2020, expanded PBF Holdings' geographic diversification, increased
throughput capacity to over one million barrels per day (bpd) and
expanded the company's footprint in California. During a mid-cycle
environment, PBF should benefit from its scale and diversification
along with the relatively high complexity of its refiners, which
allows it use heavy and sour oil to produce higher value refined
products. Fitch believes the unusual impact of the coronavirus on
the economy has had an outsized impact on both its East Coast
refineries, given their exposure to more competitive markets and
higher operating costs, and its West Coast refineries, as lockdown
restrictions began earlier and were more restrictive in
California.
Unfavorable Regulatory Headwinds: U.S. refiners face a number of
unfavorable regulatory headwinds that will cap long-term demand for
U.S. refined product, including rising renewable fuel requirements
under the renewable fuel standard (RFS) program, higher corporate
average fuel economy standards, and regulation of greenhouse gases
on the federal and state levels as a pollutant. These are expected
to limit growth in domestic product demand and keep the industry
reliant on exports to maintain full utilization. The industry has
seen regulatory relief under the current administration, including
small refinery waivers for the RFS programs, which resulted in a
significant drop in RIN prices that benefitted all refiners.
PBF Logistics Relationship: PBFX is a fee-based master limited
partnership established by PBF in 2014 to acquire, own and operate
crude oil and refined products logistics assets. PBF Energy Company
LLC owned 48.2% of PBFX and 100% of PBF Holding as of Sept. 30,
2020. PBF Holding and PBFX have entered into a series of
transactions in which PBF Holding contributed certain assets to PBF
Energy Company LLC, which in turn contributed those assets to PBFX.
PBF Energy Company LLC received cash considerations that were
eventually contributed to PBF Holding. Although Fitch expects
similar transactions may occur in the future, PBFX's stated
strategy is to expand through organic growth and acquisition of
third-party assets. Even though the operations of PBF Holding and
PBFX are intertwined, the companies have separate boards of
directors.
Relationship with PBF Energy: PBF Holding is an indirect subsidiary
of PBF Energy Inc., a holding company with primary subsidiaries of
PBF Holding and its 48% ownership in PBFX. PBF Holding typically
distributes cash to PBF Energy to fund tax payments and dividends.
PBFX also sends its 48% share of distributions to PBF Energy, which
can be used to cover a portion of the tax payments and
distributions. The parent has no debt.
PBF Holding has an ESG Relevance Score of '4' for Exposure to
Environmental Impacts due to the potential of operational
disruptions from extreme weather events, including PBF Holding's
exposure to hurricanes on the Gulf Coast through its Chalmette
refinery, which has a negative effect on the credit profile, and is
relevant to the rating in conjunction with other factors.
DERIVATION SUMMARY
PBF Holding's ratings reflect its status as an independent refiner,
although it does not have non-refinery operations such as retail,
unlike Marathon Petroleum Corporation (BBB/Negative), which can
reduce cash flow volatility. PBF Holding's crude capacity of 1.04
million bpd is mid-range. It is significantly smaller than Marathon
(three million bpd) and Valero Energy Corporation (BBB/Negative;
2.6 million bpd), but larger than HollyFrontier Corporation
(BBB-/Negative, 457,000 bpd) and CITGO Petroleum Corp.
(B/Negative), 749,000 bpd). PBF Holding is believed to be the
nation's most complex independent refiner, with a weighted average
Nelson complexity index of 12.8. This compares with Valero at
11.4.
PBF Holding has solid geographic diversification, with a refinery
in every PADD other than PADD 4. PBF Holding's EBITDA margins are
well below those of Marathon, Valero and HollyFrontier, reflecting
the lack of non-refinery operations as well as the effect of its
exposure to different regional crack spreads.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- West Texas Intermediate (WTI) oil price of $38 in 2020, $41 in
2021, $45 in 2022 and $50.00 long term;
-- Gross refining margin of $3.78 in 2020, $7.68 in 2021, $8.06
in 2022 and $9.03 in 2023;
-- Throughput declining 8% in 2021 from East Coast
reconfiguration and flat over the remaining forecast period;
-- Operating expenses per throughput of $6.68 in 2020, $5.89 in
2021, $5.77 in 2022 and $5.68 in 2023;
-- Capex is expected to be $470 million in 2021, $520 million in
2021 and $620 million in 2023.
-- Dividends are suspended over the forecast period as well as no
acquisitions.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Liquidity enhancement measures without materially impacting
profitability or operations;
- Material reduction in revolver balance through FCF proceeds;
- Through-the-cycle debt/EBITDA at or below 3.0x;
- Through-the-cycle lease-adjusted FFO gross leverage at or below
3.5x.
- Greater scale and geographic diversification;
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Material reduction in liquidity to less than $500 million;
- A downgrade may result in lower recovery ratings for the senior
unsecured notes and lead to a multiple notch downgrade;
- Through-the-cycle debt/EBITDA above 4.0x;
- Through-the-cycle lease-adjusted FFO gross leverage at or above
4.5x;
- The issuance of additional secured debt could result in a
downgrade of the senior unsecured notes.
- A change in financial policy that includes greater use of debt
in acquisitions or greater contributions to its parent to fund
share repurchases or higher dividends.
LIQUIDITY AND DEBT STRUCTURE
Tightening Liquidity: PBF Holding had cash on hand of $1,253
million and availability under its revolver of in excess of $600
million with $900 million borrowed on its revolver as of Sept. 30,
2020. The revolver matures in May 2023. The revolver borrowing base
is derived from a formula based on cash on hand, accounts
receivable and inventory. PBF Holding has historically exhibited
significant working capital swings, driven by volatility in crude
and refined product prices and M&A activity. While the revolver
should be adequate to meet cash needs during these swings, Fitch
notes that in times of weakening conditions in the refinery sector,
the borrowing base availability reduces at a time when it is needed
most.
PBF also has a $300 million uncommitted receivables purchase
facility in which it could sell certain eligible receivables
derived from the sale of refined product over truck racks.
Fitch expects PBF to generate negative FCF throughout the remainder
of 2020 and most of 2021. Cash on hand and revolver availability
should be sufficient through 2021, but an extended and deeper
economic downturn could hamper liquidity as the company enters
2021. Fitch believes the company has additional levers to enhance
liquidity, including potential asset sales (primarily
sales/leaseback transactions), idling of units, reconfiguring of
other refinery assets and working capital management.
The maturity schedule is manageable. PBF Holding issued a $1
billion bond in January 2020 and applied proceeds to the Martinez
acquisition and redeeming the 2023 notes. The company also issued
$1 billion of senior secured notes due 2025 in May 2020 with
proceeds used for general corporate purposes. The next significant
maturities are the revolver in May 2023 and the 9.25% senior
secured notes in May 2025 and the 7.25% notes in June 2025.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that PBF Holding would be reorganized
as a going-concern in bankruptcy rather than liquidated.
Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
PBF's GC EBITDA assumption uses the 2023 projected EBITDA from the
stress case. This assumes a period of depressed results during
2020-2022, followed by an uptick in EBITDA in 2023 as the company
emerges from the downturn.
The GC EBITDA estimate of reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which Fitch bases the
enterprise valuation.
The GC EBITDA of $859 million reflects a level that is below what
Fitch would consider a mid-cycle EBITDA ($1.0 billion- $1.35
billion) as crack spreads are assumed to be moving from the trough
of the cycle level to mid-cycle levels. In addition, Fitch assumes
PBF has taken additional cost reduction steps.
An EV multiple of 3.75x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value. The choice of
this multiple considered the following factors:
Publicly traded multiples for refiners (PBF Energy, Marathon
Petroleum, HollyFrontier, Valero Energy, CVR Energy) have primarily
been in the 5x-7x range. Certain of PBF peers have ancillary
businesses, like retail, chemicals or logistics, that can boost
multiples as those segments reduce the volatility of the refining
business.
There have been limited refinery asset sales over the past several
years. In addition, large, independent majors, such as Shell, are
selling their refinery assets or converting them into renewables or
chemical refineries.
Several of PBF's refineries, such as its East Coast and Toledo
refineries, are located in markets with heavy competition that are
unlikely to receive premium multiples. In addition, relatively high
operating costs versus peers would not warrant a higher multiple
given the more severe impact during a down-cycle period.
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that could be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors.
The 50% inventory advance rate supported by ABL advance rates and
adjusted for the inherent price volatility from changes in oil
prices.
The 50% adjustment to property, plant and equipment reflects the
uncertainty from the lack of mergers and acquisitions in the
sector, and capacity rationalization.
The revolver is assumed to be 80% drawn upon default as Fitch
assumes the borrowing base will be reduced during a downturn. The
revolver is secured by current assets (cash, accounts receivable,
inventory) and is considered to have superior recovery in a
default. The senior secured notes are secured by property, plant
and equipment. Fitch assumes that these notes should be fully
covered, but notches the notes from the revolver to reflect the
difference in certainty of recovery from the different collateral.
The allocation of value in the liability waterfall results in
recovery corresponding to 'RR1' for the first-lien revolver ($1.2
billion), RR2 for the senior secured notes ($1 billion), and RR4
for the senior unsecured notes ($1,725 million).
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
PBF Holding has an ESG Relevance Score of '4' for Exposure to
Environmental Impacts due to the potential of operational
disruptions from extreme weather events, including PBF Holding's
exposure to hurricanes on the Gulf Coast through its Chalmette
refinery, which has a negative effect on the credit profile, and is
relevant to the rating in conjunction 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.
PBF LOGISTICS: Fitch Downgrades LT IDR to B+, Outlook Negative
--------------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Rating of
PBF Logistics LP to 'B+' from 'BB-'. The senior secured revolver
has been upgraded to 'BB+'/'RR1' from 'BB'/'RR1'. The senior
unsecured notes have been downgraded to 'B+'/'RR4' from
'BB-'/'RR4'. The notes are co-issued by PBF Logistics Finance
Corporation, which also had unsecured notes downgraded to
'B+'/'RR4' from 'BB-'/'RR4'. The Outlook remains Negative.
The instrument ratings have moved in accordance with Fitch's
bespoke recovery which resulted in a one-notch upgrade of the
senior secured revolver while the IDR was downgraded. In the event
of a bankruptcy, the bespoke recovery forecasts an excellent
recovery for the senior secured revolver while the senior unsecured
notes were downgraded one notch reflecting the prospects of an
average recovery in the event of default.
The downgrade of the IDR and the Negative Outlook reflect the
negative rating actions at PBF Holding Company LLC, PBFX's
affiliate and primary counter-party. Fitch previously stated that a
negative rating action at PBF Holding would result in negative
rating action at PBFX. PBF Holding's Long-Term IDR was downgraded
to 'B+'/ 'Negative', reflecting concerns around the duration and
depth of the downturn in the refining sector, which has resulted in
material FCF deficits and tightening liquidity. Although PBF
Holding has taken some actions to preserve liquidity, industry
conditions remain weak and uncertain. Fitch considers liquidity at
PBF Holding to be adequate to carry the company through 2021.
However, absence of a recovery in 2H21, significantly tighter
liquidity conditions could follow. The Negative Outlook reflects
the risk to the refining sector that demand will not return for an
extended period of time.
PBFX's rating reflects its strong operational ties with PBF Holding
whereby PBFX derives a substantial portion of its revenues
(approximately 84% for LTM September 2020) from PBF Holding. Fitch
expects this to continue in the near to intermediate term and
believes PBF Holding is the primary driver behind PBFX's ability to
service its debt obligations.
The ratings also consider Fitch's concern of leverage being higher
should the duration of the current downturn continue for an
extended period, although supported by fee-based contracts that
limit commodity exposure and provide some volume protection through
minimum volume commitments (MVC). Fitch expects PBFX's leverage to
be between 3.2x-3.5x for YE 2020.
Although Fitch recognizes that PBF Holding and PBFX have taken some
constructive actions to preserve liquidity, industry conditions
remain weak and may present an outsized event risk should there be
an operating, production or financial issue at PBF Holding if the
current downturn prolongs, considering PBFX's heavy dependence on
PBF Holding. The Negative Outlook for PBF Holdings could be removed
if conditions normalize and liquidity has not been materially
compromised.
KEY RATING DRIVERS
Counterparty Concentration Risk: PBFX derives approximately 80%-85%
of its revenues from its affiliate, PBF Holding. PBF Holding is
expected to continue to be the partnership's largest customer in
the near to intermediate term, as PBFX provides PBF Holding with
critical logistics assets that support its operations. Fitch
typically views midstream service providers like PBFX with
single-counterparty concentration as having exposure to outsized
event risk, should there be business or operational issues at PBF
Holding whereby throughput volumes at PBFX's facilities will be
significantly reduced, adversely impacting cash flows and
distributions. The economic slowdown due to the coronavirus
pandemic has led to material demand destruction of gasoline and
other refined products, a driving force of PBF Holding's refinery
utilization cutbacks.
Impact of Coronavirus: The material reduction in gasoline demand
since the onset of the coronavirus pandemic is likely to result in
significantly lower refinery margins as well as lower utilization
rates. PBF Holdings ran its six refineries at an average 70%
capacity during 3Q20. To preserve further cash burn, PBF Holding
recently announced the reconfiguration of its East Coast refining
system, including the idling of the smaller of two crude units, a
fluid catalytic cracker and several smaller units at the Paulsboro
refinery by YE 2020. Management expects the utilization rate to
continue to remain low until there is sustained demand. In response
to the challenged market conditions, PBFX took some credit
supportive measures to enhance liquidity that includes limiting
2020 capital spending, reducing operating expenses and corporate
overhead, and cutting the quarterly dividend by 42%. Management
stated it plans to use excess cash flow for deleveraging.
Modest Size and Scale: The partnership is geographically
diversified, with presence in four Petroleum Administration for
Defense Districts' (PADD), although most of the assets and
operations are concentrated on the East Coast. Fitch views this
operational concentration and the partnership's EBITDA of
approximately $200 million makes PBFX vulnerable to weak East Coast
margins should there be an outsized event or slowdown in the
region's refining market. The impact of the coronavirus pandemic is
likely to drive significantly lower margins at refineries resulting
in lower utilization rates.
Consistent Cash Flow: PBFX's operations are underpinned by
long-term, take-or-pay contracts with PBF Holding, with an
approximate seven-year weighted average contract life. PBFX
provides services at fixed fee (including inflation escalators and
certain increases in operating costs) with MVCs, limiting PBFX's
commodity price sensitivity and providing some volumetric downside
protection.
Corporate Family Relations: PBFX is operationally and strategically
integral to PBF Holding as PBFX supports it with critical
infrastructure. PBF Holding is the fourth largest independent
refiner in the U.S. and its parent, PBF Energy Company LLC (PBF
Energy) holds 100% of the general partners and 48.0% of limited
partner interests in PBFX. Midstream growth has been a key
component of PBF's strategy. As such, PBF has been supporting
growth at PBFX with drop down transactions, completing five
drop-down transactions since inception. PBFX also retains a 10-year
right of first offer to purchase certain logistics assets owned by
PBF Holding in the event PBF disposes, sells or transfers those
assets. Given that PBF directly benefits from the sustainable
growth of PBFX through its ownership, Fitch believes that PBFX will
continue to benefit from support from PBF Energy.
Parent Subsidiary Linkage: Overall, a weak parent-subsidiary
relationship exists between PBFX and PBF Energy Inc. and Fitch
rates PBFX on a stand-alone basis. The most important ties are
legal ties and those are deemed to be weak as there is no debt at
PBF Energy Inc and PBFX does not provide upstream guarantees. There
are also provisions in place that restrict payments to PBF Energy
Inc. In addition, there are no cross defaults that could occur
elsewhere in the group that could impact PBFX. PBFX is
operationally integral to PBF Energy's core business, providing
critical midstream logistics infrastructure. There are operational
and strategic ties and share common management. In Fitch's view,
there is legal insulation explicitly designed to support PBFX's
stand-alone credit profile.
Potential Conflict of Interest: PBFX's parent company, PBF Energy,
which owns and controls the general partners of the partnership is
required to act in good faith, but is not held to the same level of
fiduciary laws were PBFX to be organized as a standard C-Corp. As
such, PBF Energy plays an important role in a wide variety of
actions at PBFX, which may have a bearing on the credit quality of
PBFX, whether positive, negative or neutral.
ESG Considerations: PBFX has a relevance score of 4 for Group
Structure with significant related party transactions. This has a
negative impact on the credit profile and is relevant to the rating
in conjunction with other factors.
DERIVATION SUMMARY
PBFX's ratings reflect relatively modest leverage and conservative
financial profile of the partnership supported by long term
fee-based contracts that limit commodity price exposure and provide
some volume protection through minimum volume commitments. This is
offset in part by PBFX's limited size and scale. The partnership is
geographically well diversified with assets in four PADD's, but
approximately 55%-60% of EBITDA is generated from assets in the
East Coast (Delaware and Paulsboro, NJ). With the reconfiguration
and idling of some assets at the Paulsboro refinery in the East
Coast, this proportion is expected to reduce modestly but still
continue to remain a significant contributor of aggregate EBITDA.
Although PBFX's assets are integral to PBF Holding's refining
operations, the heavy dependence on PBF Holding could present an
outsized event risk should there be an operating, production or
financial issue at PBF Holding.
PBFX's leverage is strong for its rating category. Fitch expects
PBFX's leverage to be between 3.2x-3.5x for YE 2020 and YE 2021.
Scale and the significant exposure to PBF Holding are limiting
factors to PBFX's ratings. Leverage is lower than MPLX LP's (MPLX;
BBB/Negative), with Fitch expecting MPLX's leverage of roughly
4.8x-5.2x for YE 2020, declining to 4.2x to 4.7x by the end of
2021. However, MPLX is significantly larger and more diverse from a
geographic, operating business line and counterparty exposure
perspective, which warrants the difference in IDRs between the
entities. Relative to a 'BB-'-rated issuers like NuStar (NS;
BB-/Stable), PBFX has better leverage, but significantly smaller
scale of operations. NuStar does not have customer concentration
like PBFX does.
PBFX is rated below Holly Energy Partners L.P (HEP; BB+/Negative).
Like PBFX, HEP's rating is supported by stable cash flows that are
largely MVC's from its sponsor and largest counterparty, Holly
Frontier Corporation (HFC; BBB-/ Negative). With adjusted EBITDA
roughly half of HEP, PBFX's lower rating is driven by its smaller
scale and significant exposure to PBF Holding.
KEY ASSUMPTIONS
-- West Texas Intermediate (WTI) oil price of $38 in 2020, $41 in
2021, $45 in 2022 and $50.00 long term;
-- Throughput and storage expected to be reduced in 2021 and
gradually returning to normalized levels over the forecast period,
aligned with Fitch estimates for PBF Holding;
-- Capex spending in 2020 in line with management guidance;
-- Distribution is held at current levels through 2021 and is
subsequently restored to prior levels;
-- No asset sales or equity issuance assumed.
In its recovery analysis, Fitch assumed that PBFX is reorganized as
a going-concern rather than liquidated. Fitch used a going-concern
EBITDA of $140 million for PBFX, which reflects a repricing of its
contracts and lower volume. Fitch used a 6x EBITDA multiple to
arrive at PBFX's going-concern enterprise value. The multiple is in
line with recent reorganization multiples in the energy sector.
There have been a limited number of bankruptcies and
reorganizations within the midstream space but bankruptcies, Azure
Midstream and Southcross Holdco, had multiples between 5x and 7x by
Fitch's best estimates. In Fitch's bankruptcy case study report
"Energy, Power and Commodities Bankruptcies Enterprise Value and
Creditor Recoveries," published in April 2019, the median
enterprise valuation exit multiplies for 35 energy cases for which
this was available was 6.1x, with a wide range of multiples
observed. Fitch has assumed a standard 10% allowance for
administrative claims from the going-concern enterprise value.
Assuming a full draw on the revolver, the recovery rating
corresponds to 'RR1' for the senior secured revolver and 'RR4' for
the senior unsecured notes.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
-- Favorable rating action at PBF Holding may lead to positive
rating action for PBFX, provided the factors driving a rating
change at PBF Holding have benefits that accrue to the credit
profile of PBFX;
-- If PBF Holding has better credit profile and expected leverage
(total debt with equity credit/ operating EBITDA) at PBFX is at or
below 5.0x on a sustained basis, Fitch may take favorable action;
-- As and when PBFX demonstrates a move towards further
insulation from its reliance on PBF Holding, such that third-party
revenues contribute at least 30% of total revenues with credit
metrics remaining within sensitivities, Fitch may consider a
separation between the IDR's of PBF Holding and PBFX and/or
revising the Outlook to Stable.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Expected leverage (total debt with equity credit/operating
EBITDA) above 5.5X and/or Distribution Coverage below 1.0x on a
sustained basis;
-- Negative rating action at PBF Holding will negatively impact
rating at PBFX;
-- Material change to contractual arrangement or operating
practices with PBF Holding that negatively impacts PBFX's cash flow
or earnings profile;
-- Reduced liquidity at PBFX.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity in Near Term: As of Sept. 30, 2020, PBFX had
approximately $310 million in available liquidity. Cash on the
balance sheet was $27.9 million, in addition to the $282 million
available under the $500 million senior secured revolver. The
revolver includes a $75 million sub-limit for standby LOC and a $25
million sub-limit for swing-line loans. PBFX had LOC of $4.9
million outstanding under the revolver. The partnership's liquidity
in the near term is considered to be adequate. The revolver may be
increased by an aggregate amount of $250 million, subject to
lender's consent. It is secured by a first-priority lien on the
asset of PBFX and its restricted subsidiaries that are joint and
several guarantors under the facility.
The bank agreement for the revolver has three financial covenants:
minimum consolidated interest coverage ratio is at least 2.5x,
consolidated total leverage ratio which cannot exceed 4.5x and
consolidated senior secured leverage ratio cannot exceed 3.5x. As
of Sept. 30, 2020, PBFX was in compliance with its covenants and
Fitch expects PBFX to maintain compliance with its covenants in the
near term.
PBFX also has $525 million unsecured notes due 2023 which are
co-issued by PBF Logistics Finance Corp., a wholly owned subsidiary
of PBFX. The notes are guaranteed on a senior unsecured basis by
all the subsidiaries of PBFX. In addition, PBF LLC, the general
partner provides a limited guarantee to the notes for the
collection of principal amounts, but is not subject to the
covenants governing the notes.
Debt Maturity Profile: PBFX does not have debt maturities until
2023. The revolver matures on July 30, 2023 and may be extended for
one year up to two occasions. The 2023 notes mature on May 15,
2023.
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
PBFX has a relevance score of '4' for Group Structure with
significant related party transactions. This has a negative impact
on the credit profile and is relevant to the rating in conjunction
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.
PEABODY ENERGY: S&P Cuts ICR to 'CCC-'; Ratings on Watch Negative
-----------------------------------------------------------------
S&P Global Ratings lowered its ratings on U.S.-based coal producer
Peabody Energy Corp., including lowering its issuer credit rating
to 'CCC-'from 'CCC+', and placed all ratings on Peabody on
CreditWatch with negative implications.
The CreditWatch placement reflects the potential for a conventional
or selective default within the next six months precipitated by a
restructuring of Peabody's debt.
Covenant breach could accelerate Peabody's $1.6 billion in
long-term debt obligations within the next six months.
S&P said, "The rating downgrade reflects our view that Peabody
could breach its first-lien leverage covenant in the next six
months. This could cause a cross-default under the terms of its
senior notes, accounts-receivable securitization program, and
certain lease agreements. We do not think that the company will
have sufficient liquidity to repay $1.6 billion of debt if
maturities are accelerated."
Steep discounts on the company's rated obligations raise the
potential for a selective default. Peabody has $459 million of
senior notes outstanding due in 2022 and $500 million of senior
notes outstanding due in 2025. These securities recently traded at
less than 45% and 30% of par, respectively. S&P believes these
prices could incentivize lenders to accept changes in terms or
exchanges that it would view to be a de facto restructuring.
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Greenhouse gas emissions
S&P said, "The CreditWatch with negative implications indicates
that we may lower our ratings within the next 90 days if a covenant
breach is left uncured and the company's debt maturities are
accelerated. We would also lower our ratings if the company pursues
a debt restructuring or exchange whereby investors receive less
than originally promised."
"We would affirm or raise our ratings and remove them from
CreditWatch if Peabody receives covenant waivers and if it appears
a potential default is pushed beyond the immediate future."
PHIO PHARMACEUTICALS: Incurs $2.31 Million Net Loss in Third Quarte
-------------------------------------------------------------------
Phio Pharmaceuticals Corp. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $2.31 million on $0 of revenues for the three months ended Sept.
30, 2020, compared to a net loss of $2.09 million on $0 of revenues
for the three months ended Sept. 30, 2019. The increase in net
loss was primarily attributable to an increase in research and
development expenses.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $6.33 million on $0 of revenues compared to a net loss
of $6.25 million on $21,000 of revenues for the same period during
the prior year.
As of Sept. 30, 2020, the Company had $18.24 million in total
assets, $2.78 million in total liabilities, and $15.45 million in
total stockholders' equity.
"During the quarter, we continued to execute on the development of
our INTASYL RNAi technology as a cancer immunotherapy platform for
innovative therapeutics. Promising new in vivo data was recently
presented at the Society for Immunotherapy of Cancer's (SITC)
annual meeting. This data showed that our INTASYL compounds
targeting PD-1, PD-L1 or TIGIT inhibited tumor growth, and that
such antitumoral effect can be significantly improved by combining
different INTASYL compounds without having a negative impact on the
tolerability of the treatment," said Dr. Gerrit Dispersyn,
president and CEO of Phio. "Immune checkpoint therapy with
systemic antibodies can result in dose limiting toxicities,
especially when used in combination. With our INTASYL platform, we
can easily combine multiple targets in a single therapeutic. Our
data suggest that local administration with INTASYL compounds, even
when used in combination, may provide a safer and more
cost-effective alternative to antibody-based immune checkpoint
therapy. Based upon these exciting results, we look forward to
finalizing our IND-enabling studies and to moving our INTASYL
compounds into the clinical phase of development in the near
future."
At Sept. 30, 2020, the Company had cash of $16.9 million as
compared with $6.9 million at Dec. 31, 2019. The Company expects
its cash will be sufficient to fund currently planned operations
for at least the next 12 months.
Research and development expenses were approximately $1.3 million
for the quarter ended Sept. 30, 2020, compared to approximately
$1.0 million for the quarter ended Sept. 30, 2019. The increase is
primarily due to an increase in the use of third-party service
providers to conduct preclinical research studies to support the
development of the Company's pipeline programs as compared to the
prior year period offset by a decrease in the use of an outside
interim temporary labor consultant in the prior year period.
General and administrative expenses were relatively steady at $1.1
million for the three-month periods ended Sept. 30, 2020 and 2019.
Going Concern
Phio stated, "The Company has reported recurring losses from
operations since inception and expects that the Company will
continue to have negative cash flows from operations for the
foreseeable future. Historically, the Company's primary source of
funding has been the sale of its securities. The Company's ability
to continue to fund its operations is dependent on obtaining
funding from third parties, such as proceeds from the issuance of
debt, sale of equity, or strategic opportunities, in order to
maintain its operations. This is dependent on a number of factors,
including the market demand or liquidity of the Company's common
stock. There is no guarantee that debt, additional equity or other
funding will be available to us on acceptable terms, or at all.
Moreover, the global coronavirus pandemic has led to significant
uncertainty and increased volatility in the capital markets. While
the potential economic impact brought by, and the duration of, the
coronavirus pandemic is difficult to assess or predict, if these
conditions in the capital markets continue for an extended period
of time it may reduce our ability to access capital, which could
negatively impact our short-term and long-term liquidity and our
ability to complete our planned preclinical and clinical studies on
a timely basis, or at all. The ultimate impact of the coronavirus
pandemic on our liquidity is highly uncertain and subject to
change. While we anticipate that we may experience a continued
impact to our research and development activities, we do not yet
know the full extent of potential delays or the impact on our
business, financial condition, or our preclinical and clinical
trial activities. There may be developments outside of our control
that require us to adjust our operating plans and given the nature
of the situation, we cannot reasonably estimate the impact of the
coronavirus on our financial condition, results of operations or
cash flows in the future. If we fail to obtain additional funding
when needed, we would be forced to scale back or terminate our
operations or seek to merge with or to be acquired by another
company.
"While we believe that the coronavirus pandemic has not had a
significant impact on our financial condition and results of
operations at this time, the extent to which the coronavirus
pandemic impacts our results will depend on future developments,
which are highly uncertain and cannot be predicted, including new
information which may emerge concerning the severity of the
coronavirus pandemic and the actions to contain the coronavirus or
treat its impact, among others. The Company believes that its
existing cash, should be sufficient to fund operations for at least
the next 12 months from the date of the release of these financial
statements."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1533040/000168316820003809/phio_10q-093020.htm
About Phio
Phio Pharmaceuticals Corp. is a biotechnology company developing
the next generation of immuno-oncology therapeutics based on its
self-delivering RNAi therapeutic platform. The Company's efforts
are focused on silencing tumor-induced suppression of the immune
system through its proprietary INTASYL platform with utility in
immune cells and/or the tumor micro-environment. The Company's
goal is to develop powerful INTASYL therapeutic compounds that can
weaponize immune effector cells to overcome tumor immune escape,
thereby providing patients a powerful new treatment option that
goes beyond current treatment modalities.
Phio reported a net loss of $8.91 million for the year ended Dec.
31, 2019, compared to a net loss of $7.36 million for the year
ended Dec. 31, 2018. As of June 30, 2020, the Company had $20.21
million in total assets, $2.48 million in total liabilities, and
$17.73 million in total stockholders' equity.
"If we are unable to achieve or sustain profitability or to secure
additional financing, we may not be able to meet our obligations as
they come due, raising substantial doubts as to our ability to
continue as a going concern. Any such inability to continue as a
going concern may result in our common stockholders losing their
entire investment. There is no guarantee that we will become
profitable or secure additional financing. Our financial
statements do not include any adjustments to, or classification of,
recorded asset amounts and classification of liabilities that might
be necessary if we were unable to continue as a going concern.
Changes in our operating plans, our existing and anticipated
working capital needs, the acceleration or modification of our
expansion plans, increased expenses, potential acquisitions or
other events will all affect our ability to continue as a going
concern," the Company stated in its 2019 Annual Report.
PHOENIX PRODUCTS: CTB Says Plan Not Confirmable
-----------------------------------------------
Community Trust Bank, Inc. filed an objection to Phoenix Products,
Inc.'s Disclosure Statement for the Debtor's Plan of Reorganization
under Chapter 11 of the United States Bankruptcy Code.
CTB objects to the Disclosure Statement initially because the plan
is not confirmable on its face and, "a disclosure statement should
be disapproved where the plan it describes is patently
unconfirmable.
CTB points out that:
* The Plan and Disclosure Statement are silent as to any other
details of the Exit Loan including, but not limited to, whether the
Debtor has a commitment for the Exit Loan, the proposed lender and
the repayment and similar terms of the Exit Loan.
* The Debtor otherwise claims that Ms. Wilson holds claims
against the Debtor that are undescribed in the Disclosure Statement
including how the Debtor validated such claims and do not estimate
how much Ms. Wilson might expect to receive on account of such
claim assuming the Debtor's Plan were confirmed and the Debtor
performed thereunder.
* The Debtor's Plan and Disclosure Statement purport to
potentially bifurcate CTB's claims into secured and unsecured
portions and otherwise modify similar rights.
* The Debtor generally proposes a sale of unidentified property
and at undetermined times on yetto-be decided terms including by
way of absolute auction, without any detail or discussion on
how/why the Debtor should so be authorized since CTB will not be
paid in full through such sale(s).
CTB further objects to the Disclosure Statement primarily because
the information provided therein is inadequate under the applicable
legal standards. CTB asserts that:
* The information to be provided in the disclosure statement
"should be comprised of all factors presently know to the plan
proponent that bear upon the success or failure of proposals
contained in the plan."
* The Disclosure Statement fails to provide any reliable and
substantiated details regarding (i) a detailed description of the
assets and their value, (ii) the basis upon which the Debtor's
projections are based (i.e., current purchase orders, details
regarding their IDIQ contracts, their value, term, pre-petition
existence, amounts collected pre-petition), (iii) specific plans
for management and consulting once the Mentor Protégé Agreement
expires (expected 2021), (iv) details regarding any proposed
assumed contracts, (v) Ms. Wilson's asserted claims that impact her
claim of a "new value" contribution, (vi) values of property from
the proposed auctioneer, and the valuation basis for its
liquidation analysis including valuations of the Debtor's
intellectual property.
* The Debtor's Plan and Disclosure Statement and, in particular,
the Debtor's liquidation analysis, is insufficient and potentially
inaccurate based on the information provided to the Court in prior
hearings and as testified to by the Debtor's purported expert.
* The Disclosure Statement fails to include adequate information
as to several of the factors considered in In re Cardinal
Congregate I, especially in regards to the financial information,
the anticipated future of the Debtor, and the accounting and
valuation methods.
Attorneys for Community Trust Bank, Inc.:
Martin B. Tucker, Esq. (KBA #89992)
Sara A. Johnston, Esq. (KBA #96769)
DINSMORE & SHOHL LLP
100 West Main Street, Suite 900
Lexington, Kentucky 40507
Tel: (859) 425-1000
Fax: (859) 425-1099
E-mail: martin.tucker@dinsmore.com
sara.johnston@dinsmore.com
About Phoenix Products
Phoenix Products, Inc. -- https://acstuff.com/ -- provides
components and Technical Data Packages (TDP) for the U.S.
Government. It has significant, relevant experience in the
machining, fabrication, and assembly of Helicopter Main Rotor Blade
Shipping and Storage Containers (SSCs), Engine and Propulsion
Systems Containers, Aircraft Flight Worthy Components, and Ground
Support Equipment (GSE), including Missile SSCs. Its customer base
includes the Department of Defense, Defense Logistics Agency,
Lockheed Martin, Sikorsky, Rolls-Royce, and other OEMs.
Phoenix Products sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Ky. Case No. 20-60370) on March 18,
2020. The petition was signed by Peggy Wilson, the Debtor's CEO.
At the time of the filing, the Debtor was estimated to have assets
of between $500,000 and $1 million and liabilities of between $1
million and $10 million.
Judge Gregory R. Schaaf oversees the case.
Delcotto Law Group, PLLC is the Debtor's legal counsel.
An Official Committee of Unsecured Creditors has been appointed in
the case and is represented by DENTONS BINGHAM GREENEBAUM LLP.
PHOENIX PRODUCTS: Unsecureds to Get Escrow, Profit Share Until 2025
-------------------------------------------------------------------
Phoenix Products, Inc., on Nov. 4 an Amended Disclosure Statement
to its proposed Plan of Reorganization.
Following the internal formulation of its Plan of reorganization,
the Debtor has communicated with its major secured lenders. The
Debtor has discussed concepts for its Plan with these parties and
others in advance of its filing. The Debtor has worked diligently
to prepare a plan of reorganization that is feasible, fair and
equitable among all of its Creditors and parties in interest. The
Debtor submits that the Plan filed with the Court and attached
hereto represents the product of these efforts and provides the
best possible recovery for all Creditors.
The Plan contemplates a combination of the sale of the Debtor's
non-commercial real property in order to reduce its debt service,
obtaining an exit loan and the continued business operations of the
Debtor as the "Reorganized Debtor" following confirmation, with the
potential for a sale of the Debtors' assets as a going concern free
and clear of liens, claims and encumbrances after Plan
confirmation. Proceeds from the sale of real property unrelated to
the Debtor's business operations will be applied primarily to
reduce the Debtor's SBA loan with Community Trust Bank. In turn,
this reduction in the principal balance of the Debtor's largest
secured debt is expected to reduce its debt service expense and
enhance the Debtor's profitability. Proceeds from the exit loan
will be used to pay costs of administration for the bankruptcy case
and to provide working capital for the Debtor
After payment of all administrative and priority Claims, the Plan
provides that each holder of an Allowed Claim in Class 10 shall
receive Distribution(s) to the greatest extent possible from the
Class 10 Escrow and Net Profits of the Reorganized Debtor for a
period of 60 months following the Effective Date. "Net Profits"
shall mean at least 25 percent of the net cash remaining at the end
of a calendar year after payment or reservation for all ongoing
business obligations including, but not limited to, costs of goods,
payroll, operating expenses, required payments on Allowed Secured
Claims, lease payments, capital expenditures, taxes, a reserve for
contingencies, and required payments on Allowed Priority Tax
Claims. Estimated reserved and Net Profit payments are set forth on
the Income Projection portion of the Debtor's financial
projections. Beginning 30 days after the Effective Date and
continuing for 60 months, the Reorganized Debtor shall deposit into
the Class 10 Escrow the monthly sum of $1,000 per month for months
1-12; $1,500 per month for months 12-24; $2,500 per month for
months 25-36; and $5,000 per month for months 37-60 for the
purposes of paying Class 10 Allowed Unsecured Claims. In addition,
the Debtor shall deposit Net Profits generated during each full
calendar year after the Effective Date into the Class 10 Escrow, to
be distributed pursuant to the Plan. The Reorganized Debtor shall
make Distributions from the Class 10 Escrow to each holder of an
Allowed Class 10 Claim annually, beginning on December 1, 2022 and
ending on Dec. 1, 2025, in the amount of each Claimant's pro rata
share of the Class 10 Escrow on that date. The Class 10 Claims are
Impaired.
The Plan provides that on the Effective Date, the equity interests
in the Debtor will be retained by Mrs. Wilson in exchange for total
capital contributions of $5,000 (the "New Value"), a waiver of
claims and proceeds from the sale of Mrs. Wilson's personal assets
which were used to reduce the Debtor's obligations postpetition
(the "New Value"). In addition to payment of $5,000, the Owner
will waive any claims she may have against the Debtor as of the
Effective Date, including but not limited to the claim for unpaid
wages in the amount of $102,800. Since the Petition Date, Mrs.
Wilson has sold the following assets which she owned personally,
with the net proceeds being used to reduce the debt of the Debtor:
Cattle (creditor is SKED): $9,597
Real Property (creditor is Community Trust Bank) $108,885
Upon Confirmation, the Plan provides that Mrs. and Mr. Wilson, as
CEO and President of the Debtor, shall continue the Debtor's
manufacturing operations.
The Debtor intends to obtain an exit loan secured by a first
priority lien in the Debtors' personal property, including but not
limited to equipment, inventory and accounts receivable, in an
amount not to exceed $500,000.
A full-text copy of the Disclosure Statement dated September 16,
2020, is available at https://tinyurl.com/y2dy3owt from
PacerMonitor.com at no charge.
A full-text copy of the Amended Disclosure Statement dated November
2, 2020, is available at https://tinyurl.com/y2n6m3wx from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Dean A. Langdon, Esq.
DELCOTTO LAW GROUP PLLC
200 North Upper Street
Lexington, Kentucky 40507
Telephone: (859) 231-5800
Facsimile: (859) 281-1179
dlangdon@dlgfirm.com
About Phoenix Products
Phoenix Products, Inc. -- https://acstuff.com/ -- provides
components and Technical Data Packages (TDP) for the U.S.
Government. It has significant, relevant experience in the
machining, fabrication, and assembly of Helicopter Main Rotor Blade
Shipping and Storage Containers (SSCs), Engine and Propulsion
Systems Containers, Aircraft Flight Worthy Components, and Ground
Support Equipment (GSE), including Missile SSCs. Its customer base
includes the Department of Defense, Defense Logistics Agency,
Lockheed Martin, Sikorsky, Rolls-Royce, and other OEMs.
Phoenix Products sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Ky. Case No. 20-60370) on March 18,
2020. The petition was signed by Peggy Wilson, the Debtor's CEO.
At the time of the filing, the Debtor was estimated to have assets
of between $500,000 and $1 million and liabilities of between $1
million and $10 million.
Judge Gregory R. Schaaf oversees the case.
Delcotto Law Group, PLLC is the Debtor's legal counsel.
An Official Committee of Unsecured Creditors has been appointed in
the case and is represented by DENTONS BINGHAM GREENEBAUM LLP.
PHOENIX PRODUCTS: US Trustee Questions Plan's Feasibility
---------------------------------------------------------
Paul A. Randolph, Acting United States Trustee, objected to the
approval of the Disclosure Statement for Phoenix Products Inc.'s
Plan of Reorganization under Chapter 11 of the United States
Bankruptcy Code.
The United States Trustee believes the Disclosure Statement does
not contain adequate information in violation of section
1125(a)(1), and specifically fails to include adequate information.
The United States Trustee points out that:
* The Disclosure Statement does not contain any information on
how the Debtor would calculate such a reserve.
* The projections in the Disclosure Statement do not clearly
illustrate the Net Profits the Debtor expects to have available to
pay unsecured creditors at the end of each Plan year.
* The Debtor's cash flow projections show sufficient cash flow to
pay significant amounts to all unsecured creditors out of the
Debtor's operations, but the United States Trustee and creditors
are unable to link the "Net Profits" definition from the Plan to
the amounts included within the cash flow budget.
The United States Trustee further points out that the projections
in the Disclosure Statement do not contain adequate information
regarding Plan feasibility.
The United States Trustee asserts that the Disclosure Statement
does not contain any information about the specific property that
will secure the exit loan, nor does the Disclosure Statement
discuss the terms of the loan. It also notes that the Debtor does
not currently have an agreement with any bank or financial
institution to fund the exit loan.
About Phoenix Products
Phoenix Products, Inc. -- https://acstuff.com/ -- provides
components and Technical Data Packages (TDP) for the U.S.
Government. It has significant, relevant experience in the
machining, fabrication, and assembly of Helicopter Main Rotor Blade
Shipping and Storage Containers (SSCs), Engine and Propulsion
Systems Containers, Aircraft Flight Worthy Components, and Ground
Support Equipment (GSE), including Missile SSCs. Its customer base
includes the Department of Defense, Defense Logistics Agency,
Lockheed Martin, Sikorsky, Rolls-Royce, and other OEMs.
Phoenix Products sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Ky. Case No. 20-60370) on March 18,
2020. The petition was signed by Peggy Wilson, the Debtor's CEO.
At the time of the filing, the Debtor was estimated to have assets
of between $500,000 and $1 million and liabilities of between $1
million and $10 million.
Judge Gregory R. Schaaf oversees the case.
Delcotto Law Group, PLLC is the Debtor's legal counsel.
An Official Committee of Unsecured Creditors has been appointed in
the case and is represented by DENTONS BINGHAM GREENEBAUM LLP.
POTTERS BORROWER: Moody's Assigns B2 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service assigned first-time ratings to Potters
Borrower, LP including a B2 Corporate Family Rating and B2-PD
Probability of Default Rating (PDR). Moody's also assigned B2
ratings to the company's proposed senior secured first lien credit
facilities, consisting of a $75 million revolving credit facility
maturing 2025 and $390 million term loan due 2027. Proceeds from
the first lien term loan in addition to a $280 million equity
contribution will fund the $650 million acquisition of Potters
Industries by The Jordan Company as well as transaction fees,
expenses and cash on the balance sheet. The outlook is stable.
The ratings are subject to the deal closing as proposed, and the
receipt and review of the final documentation.
"The B2 rating reflects Potters Industries' strong position in both
the transportation safety and engineered glass materials markets
and relatively stable sales volumes, offset by its lack of scale
and product diversity," said Domenick R. Fumai, Moody's Vice
President and lead analyst for Potters Borrower, LP.
Assignments:
Issuer: Potters Borrower, LP
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3)
Senior Secured 1st Lien Revolving Credit Facility, Assigned B2
(LGD3)
Outlook Actions:
Issuer: Potters Borrower, LP
Outlook, Assigned Stable
RATINGS RATIONALE
Potters Borrower's B2 CFR is supported by Potters Industries'
leading positions in the global glass microsphere market in North
America, Europe and Latin America and number two in Asia-Pacific
used in transportation safety and EGM (engineered glass materials),
where it holds number one or two positions in a variety of industry
segments. The rating also reflects relatively stable sales volumes,
particularly in transportation safety, attractive EBITDA margins
historically averaging well-above 20% and fairly moderate leverage
with pro forma Debt/EBITDA, including Moody's standard adjustments,
estimated at 5.5x in FY 2020 and slightly declining to 5.4x in FY
2021. The rating further considers Potters Industries' extensive
global production network with 29 facilities worldwide that serve a
diverse customer base with long-term customer relationships.
The B2 rating is constrained by its limited scale and product
diversity with very modest growth prospects. The rating is further
tempered by EGM's exposure to several end markets including general
industrial, automotive and oil and gas that are likely to remain
negatively impacted by weaker economic growth because of the
coronavirus pandemic. Private equity ownership is another factor
incorporated in the rating profile.
Moody's expects Potters Industries to have good liquidity over the
next 12 months with available cash on the balance sheet of
approximately $15 million, modest positive free cash flow
generation and substantial availability under its $75 million
revolving credit facility, which is expected to be undrawn at
closing.
The B2 rating for the first lien credit facilities are in line with
the B2 CFR reflecting the preponderance of first lien debt in the
capital structure with no second lien debt to absorb losses. The
credit facilities have a first lien security interest on
substantially all the assets of the company and guarantors.
The proposed first lien term loan is not expected to contain
financial maintenance covenants while the proposed revolving credit
facility will contain a springing maximum first lien net leverage
ratio of 8.85x that will be tested when the revolver is more than
40% drawn at the end of the quarter. The new credit facilities are
expected to provide covenant flexibility that could adversely
impact creditors.
The rating outlook is stable as the sponsor has capitalized the
company on a relatively conservative basis ensuring solid credit
metrics, but the company's small size and limited product diversity
limit future upside to the rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would likely consider a downgrade if leverage is above 6.0x
and free cash flow is negative for a sustained period, or if there
is a significant deterioration in liquidity, a debt-financed
acquisition or large dividend. Moody's would consider an upgrade if
financial leverage, including Moody's standard adjustments, is
sustained below 4.0x, the company's size increases to over $500
million in revenue, product or end-market diversity improves
materially providing the potential for greater organic growth, free
cash flow growth remain positive and the private equity sponsor is
supportive of maintaining leverage below 4.0x on a sustained
basis.
ESG CONSIDERATIONS
Environmental, social and governance factors are relevant to the
credit profile but are not key drivers of the rating. As a
specialty chemicals company, environmental risks are categorized as
moderate. Potters Industries does not currently have any
substantial litigation or remediation related to environmental
issues. The major raw material used in production, recycled glass,
promotes sustainability while the other major inputs include silica
derivatives from sand and soda ash, which are not harmful to the
environment. Glass microspheres also play an important role in
producing light-weight plastics that provide
environmentally-friendly product substitutes. Social risk is
below-average as the company's products are used for transportation
safety on roads, highways, airport runways and guardrails. Potters
Industries should continue to benefit from an aging population in
many developed countries as well as increased standards of living
in less-developed nations that will require additional
infrastructure. Governance risks are elevated due to private equity
ownership by The Jordan Company, which includes a board of
directors with minority representation by independent directors and
reduced financial disclosure requirements as a private company.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
Potters Industries, LLC is a leading provider of glass spheres for
highway and safety markings and engineered glass materials (EGM)
used in a variety of end-use applications. The company operates in
two segments: Transportation Safety and Engineered Glass Materials,
which represented 59% and 41% of FY 2019 sales, respectively.
Potters generated approximately $362 million in revenue for the
twelve months ending June 30, 2020.
PRINTEX INC: Bank Wants Meaningful Analysis Under Sec. 1125 in Plan
-------------------------------------------------------------------
First Bank of the Lake ("Bank"), filed a limited objection and
reservation of rights to Printex, Inc., et al.'s Combined
Disclosure Statement and Liquidating Plan of Reorganization.
Bank points out that:
* The Plan fails to provide for what happens if the sale is not
closed within 60 days or if the sale is not closed at all.
* The Plan fails to describe or address the Bank's potential
administrative expense claim for the months in which the Debtors
have used the real estate without payment to the Bank.
* Finally, while the Plan provides that Chapter 5 causes of
action will not be pursued, the Plan fails to provide for a
meaningful analysis for creditors consistent with 11 U.S.C. 1125.
Attorneys for First Bank of the Lake:
THOMAS H. RISKE
CARMODY MACDONALD P.C.
120 S. Central Avenue, Suite 1800
St. Louis, Missouri 63105
Tel: (314) 854-8600
Fax: (314) 854-8660
E-mail: thr@carmodymacdonald.com
About Printex Inc.
Printex Inc. and its affiliates, Medford Randal Park and Midamerica
Pick & Pack Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mo. Case Nos. 19-20132 to 19-20134) on
May 31, 2019. The cases were jointly administered under Lead Case
Case No. 19- 20132.
At the time of the filing, Printex was estimated to have assets of
between $1 million to $10 million and liabilities of the same
range. Meanwhile, Midamerica Pick was estimated to have assets of
less than $50,000 and liabilities of between $1 million and $10
million.
Cruse.Chaney-Faughn, PC, is the Debtors' their legal counsel.
PRINTEX INC: F&M Asks for Modified Plan to Account for Arrearrages
------------------------------------------------------------------
F&M Bank and Trust Company (hereinafter "F&M"), objects to
confirmation of Printex, Inc, Medford Randal Park and Midamerica
Pick and Pack, Inc.'s Combined Disclosure Statement and Liquidating
Plan of Reorganization unless agreed modifications are made.
At the time the Debtor, Medford Randall Park, filed the Petition
for Relief, Debtor owned the following real property commonly known
as 2510 Laclede Street, Hannibal, MO 63401. Debtor, Medford Randall
Park, has executed and delivered a Note dated October 2, 2017, in
the original amount of $100,000 given to F&M. Debtor has executed a
mortgage-dated October 2, 2017 given to F&M granting a security
interest in the Property, which was contemporaneously recorded.
That said note secured by the real estate is in arrears yet no
provision has been made in the Plan for payment of said arrearage.
During the pendency of this bankruptcy, the Debtors have failed to
pay all sums as they would have been due pursuant to said notes.
That the claims of F&M are listed as Claim Class 2 and 3 in Debtors
Combined Disclosure Statement and Liquidating Plan of
Reorganization Dated 20 August 2020. The Plan fails to provide
for a modification of said notes to allow repayment of the
arrearages and continuation of all other standard terms of said
notes.
F&M said that the it and the Debtors have agreed to language being
added at confirmation to clarify the need of a modification and
extension of the notes to cure the arrearages by adding the
additional payments to the end of the loans without change the
periodic payment amount.
Attorney for F&M Bank and Trust Company, LLC:
John M. Hark MO 45660
999 Broadway, P.O. Box 1013
Hannibal, MO 63401
Tel: (573)221-7333
Fax: (573)221-8824
About Printex Inc.
Printex Inc. and its affiliates, Medford Randal Park and Midamerica
Pick & Pack Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mo. Case Nos. 19-20132 to 19-20134) on
May 31, 2019. The cases were jointly administered under Lead Case
Case No. 19- 20132.
At the time of the filing, Printex was estimated to have assets of
between $1 million to $10 million and liabilities of the same
range. Meanwhile, Midamerica Pick was estimated to have assets of
less than $50,000 and liabilities of between $1 million and $10
million.
Cruse.Chaney-Faughn, PC, is the Debtors' their legal counsel.
PRIORITY HOLDINGS: S&P Alters Outlook to Stable, Affirms CCC+ ICR
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on
U.S.-based merchant acquirer Priority Holdings LLC and revised its
outlook to stable from negative.
The rating affirmation follows the company's repayment of $106.5
million of its first-lien term loan with the proceeds from the sale
of certain assets in the Real Estate business. The debt paydown
improved near-term liquidity and credit metrics.
Meanwhile, S&P raised its issue-level rating on Priority's secured
credit facilities to 'B-' from 'CCC+' and revised the recovery
rating to '2' from '3' commensurate with the debt repayment.
Priority's near-term liquidity has improved following the sale of
certain assets of its Real Estate business (PRET) for about $123
million in net proceeds. The company used the proceeds to repay
$106.5 million of its first-lien term loan and added $16.5 million
of unrestricted cash to the balance sheet. The rating affirmation
reflects S&P's expectation that although leverage and free cash
flow metrics have improved, to the low-8x on pro forma basis at the
end of 2020 and slightly positive free cash flow, respectively,
Priority will need to meet materially higher debt amortizations in
the next two years. Its revolver, which has an outstanding balance
of $14.5 million as of June 30, 2020, is due January 2022. The term
loan matures January 2023. The divestiture of PRET will result in
about $16 million in revenue loss from the company's Integrated
Partners segment and about $7 million-$8 million in EBITDA. Pro
forma for the PRET sale, S&P calculate leverage in the low-9x
range, declining to the low-8x by the end of 2020. The cash flow
impact of the sale will be positive because the company is losing
about $7 million-$8 million in earnings but gaining close to $10
million in cash interest savings.
Required amortization on its term loan facility will rise from $4
million annually to $19.4 million in 2021 and $38.9 million in
2022. S&P forecasts slightly positive free cash flow for 2020 and
about $20 million in 2021 based on continued growth in the consumer
payments segment. Given the total cash balance of $22.4 million as
of June 30, 2020, pro forma for the asset sale, while it projects
that the company will meet these obligations, modest
underperformance or adverse shocks could pressure liquidity.
Covenant headroom under Priority's financial covenant test for its
total net leverage ratio improved following the debt reduction.
S&P said, "We expect the pro forma EBITDA headroom under the test
to improve to about 20% from 3.7% as of the second-quarter 2020. We
forecast the cushion to remain at about 20% over the coming year.
We now expect the company to have full access to the undrawn
balance of its $25 million revolver due in January 2022."
Total revenue will grow in the mid- to high-single-digits in 2020
driven by strong performance in the e-commerce business and the
Integrated Partners segment despite the impact of the sale on
fourth-quarter results. The company's consumer payments segment
(which accounts for about 90% of total revenues) reported
better-than-expected performance through the height of the pandemic
in second-quarter 2020 as revenues declined only 5% sequentially
and were flat year-over-year. S&P anticipates the segment to report
top-line growth in the second half of the year as processing
volumes gradually return close to their pre-pandemic levels and the
e-commerce business gains momentum. Priority reported stronger
margins year-to-date for second-quarter 2020 as a result of
improved cost control measures and a favorable merchant mix, but
S&P expects profitability to slightly decline in the coming
quarters due to the loss of the highly profitable PRET business.
The stable outlook reflects S&P's expectation of continued revenue
growth and steady margins in the company's core consumer payments
business, despite leverage remaining high. The debt repayment
modestly improved free cash flows and the company's near-term
liquidity profile.
S&P's could lower its issuer credit rating on the company if:
-- Free cash flow generation ability dwindles such that S&P
expects the company would not meet its rising debt obligations.
-- There is a likelihood of a distressed debt exchange or debt
restructuring within 12 months.
A higher rating would be contingent on the following:
-- Successful refinancing of upcoming debt maturities.
-- Maintaining a fair amount of headroom under its financial
covenants.
-- Sustained generation of positive free cash flows.
-- Continued growth in the consumer payments segment.
PROTEUS DIGITAL: Unsecureds to Have 28% to 40% Recovery in Plan
---------------------------------------------------------------
Proteus Digital Health, Inc. filed the First Amended Combined
Disclosure Statement and Chapter 11 Plan of Liquidation on October
2, 2020.
Class 3 consists of General Unsecured Claims with $11 million to
$13 million estimated amount of claims and shall receive a
distribution of 28% to 40%. Each Holder of an Allowed General
Unsecured Claim shall receive in full and final satisfaction,
settlement, and release of and in exchange for such Allowed General
Unsecured Claim such Holder's pro rata share of the Liquidating
Trust Interests, or such other treatment which the Debtor or the
Liquidating Trust, as applicable, and the Holder of such Allowed
General Unsecured Claim have agreed upon in writing.
A full-text copy of the First Amended Combined Disclosure Statement
and Plan dated October 2, 2020, is available at
https://tinyurl.com/y6zo52f2 from PacerMonitor at no charge.
A full-text copy of the Combined Disclosure Statement and Plan
dated September 17, 2020, is available at
https://tinyurl.com/yxound95 from PacerMonitor at no charge.
Counsel for the Debtor:
GOODWIN PROCTER LLP
Nathan A. Schultz (admitted pro hac vice)
Three Embarcadero Center, 28th Floor
San Francisco, CA 94111
Tel: (415) 733-6000
Fax: (415) 677-9041
E-mail: nschultz@goodwinlaw.com
Barry Z. Bazian (admitted pro hac vice)
The New York Times Building
620 Eighth Avenue
New York, NY 10018-1405
Tel: (212) 833-8800
Fax: (212) 355-3333
E-mail: bbazian@goodwinlaw.com
- and -
POTTER ANDERSON & CORROON LLP
L. Katherine Good (No. 5101)
Aaron H. Stulman (No. 5807)
1313 North Market Street, 6th Floor
Wilmington, Delaware 19801
Tel: (302) 984-6000
Fax: (302) 658-1192
E-mail: kgood@potteranderson.com
astulman@potteranderson.com
About Proteus Digital Health
Proteus Digital Health, Inc., was founded in 2002 to research and
develop Digital Medicines. It has developed and commercialized a
service offering called Proteus Discover, a Digital Medicines
solution.
Proteus Digital Health sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 20-11580) on June 15,
2020. At the time of the filing, Debtor had estimated assets of
between $100 million and $500 million and liabilities of between
$50 million and $100 million.
The Debtor tapped Goodwin Procter, LLP, as bankruptcy counsel;
Potter Anderson & Corroon, LLP, as Delaware and conflicts counsel;
SierraConstellation Partners, LLC, as financial advisor; and
Kurtzman Carson Consultants, LLC, as notice and claims agent and
administrative advisor.
PROVIDENCE MANAGEMENT: Case Summary & 20 Top Unsecured Creditors
----------------------------------------------------------------
Debtor: Providence Management Environmental LLC
6750 W Highway 67
Cleburne, TX 76033
Chapter 11 Petition Date: November 12, 2020
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 20-32839
Judge: Hon. Michelle V. Larson
Debtor's Counsel: Robert Lane, Esq.
THE LANE LAW FIRM
6200 Savoy Dr Ste 1150
Houston, TX 77036-3369
Email: chip.lane@lanelaw.com
Total Assets: $462,912
Total Liabilities: $1,335,181
The petition was signed by Kim Tindol, president/owner.
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/USMQYZQ/Providence_Management_Environmental__txnbke-20-32839__0001.0.pdf?mcid=tGE4TAMA
QUALITY WELDING: Unsecured Creditors to Recoup 60% Under Plan
-------------------------------------------------------------
Quality Welding & Fabrication, Inc. filed with the Bankruptcy Court
its Chapter 11 Small Business Subchapter V Plan on November 9,
2020.
Under the Plan, Holders of Allowed General Unsecured Claims in
Class 9 are projected to receive a distribution of 60% of the
Debtor's remaining Earnings Before Interest, Taxes, Depreciation
and Amortization, after all scheduled Plan payments, as calculated
quarterly.
Kenneth Breakfield, the Debtor's 100% equity holder, will retain
his equity interest in the Debtor and the Reorganized Debtor.
Judge Katharine M. Samson previously extended the Debtor's
exclusive period to file a Chapter 11 plan through and including
November 8, 2020.
Due to the COVID-19 pandemic, the Debtor said an extension is
needed so it will have an opportunity to fully formulate and file a
proposed Plan.
A copy of the Plan is available from PacerMonitor.com at
https://bit.ly/3poCCNK at no extra charge.
About Quality Welding & Fabrication
Based in Columbia, Mississippi, Quality Welding & Fabrication, Inc.
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Miss. Case no. 20-50970) on June 11, 2020, listing $1 million
to $10 million in both assets and liabilities.
Judge Katharine M. Samson oversees the case. Robert Alan Byrd,
Esq., at Byrd & Wiser represents the Debtor as counsel. Massey
Higginbotham & Vise, P.A. was hired as its special counsel.
REJUVI LABORATORY: Unsecureds Will be Paid in Full Under Plan
-------------------------------------------------------------
Rejuvi Laboratory, Inc submitted a Combined Plan of Reorganization
and tentatively approved Disclosure Statement.
The Plan proposes to treat claims as follows:
* Secured claims. Debtor will pay the entire amount
contractually due by making all post-confirmation regular monthly
payments, and by paying all pre-confirmation arrears (including
attorneys' fees and late charges) by paying a lump sum 90 days from
the EffectiveDate on the above secured claims. These secured claims
are impaired and entitled to vote on confirmation of the Plan.
* Class 2(a). Claim of creditors Warwick and Olson. This class
is impaired. Within 30 days from the Effective Date, the Class 2(a)
creditors shall receive a total of $30,000 in full satisfaction of
their claim. In return for the payment, the Class 2(a) creditors
will execute a full release of Debtor, its agents, representatives,
employees, successors, any potentially liable other parties and the
parties' insurers, from any of the allegations and claims in the
District Court Litigation and the claims filed by the Class 2(a)
claimants.
* Class 2(b). Claim of Maria Corso. Having an amount of claim
$1,118,980.80. Rejuvi shall receive a $30,000 credit against the
claim amount noted above as of the Petition Date, reducing the
amount to $1,088,980.80 (the "Agreed Claim"). No later than 30 days
from the date a Confirmation Order is entered, Rejuvi shall deposit
$375,000(the "Initial Deposit") in its counsel's trust account to
be held pursuant to the terms of the Plan. Also, within 30 days of
the Final Decision, Rejuvi will make a first monthly payment of
$8,923.27 to Corso's counsel and shall continue monthly payments in
the same amount for a period of six years.
* Class 2(c). General Unsecured Claims. This class is impaired
with a total claim of $183,697.92. These creditors, other than Wei
"Wade" Cheng, shall receive payment of their claims in full 90 days
from the Effective Date without any interest accruing on the claim,
unless such claim is in dispute, in which case the claim will be
paid once it is allowed and the determination of such allowance is
final.
* Class 3. Equity Interests. This class consists of all equity
interest in the Debtor whether the interest holder has preferred or
common stock. The holders of equity interest in the Debtor will not
receive any distributions under the Plan on account of their
interests. Their stock, however, will not be cancelled and holders
will retain their interest and will otherwise retain the legal,
equitable and contractual rights provided by their interests.
If the Plan is confirmed, the payments promised in the Plan
constitute new contractual obligations that replace the Debtor's
pre-confirmation debts. Creditors may not seize their collateral or
enforce their pre-confirmation debts so long as Debtor performs all
obligations under the Plan.
A full-text copy of the Combined Chapter 11 Plan of Reorganization
and Disclosure Statement dated September 16, 2020, is available at
https://tinyurl.com/yytlqvza from PacerMonitor.com at no charge.
A full-text copy of the Combined Plan of Reorganization and
tentatively approved Disclosure Statement dated October 19, 2020,
is available at https://tinyurl.com/y3nlbydw from PacerMonitor.com
at no charge.
About Rejuvi Laboratory
Founded in 1988 by Dr. Wade Cheng, Rejuvi Laboratory, Inc. --
http://www.rejuvilab.com/-- is an integrated cosmetic laboratory
with ongoing research, development and production capability.
Rejuvi Laboratory sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Cal. Case No. 18-31069) on Sept. 27,
2018. In the petition signed by Wei Cheng, president, the Debtor
disclosed $2,870,211 in assets and $1,357,213 in liabilities. Judge
Dennis Montali presides over the case. Stephen D. Finestone, Esq.
and Jennifer C. Hayes, Esq. at FINESTONE HAYES LLP represent the
Debtor as counsel.
REMORA PETROLEUM: Unsecureds Recover 1.7% in Debt-for-Equity Plan
-----------------------------------------------------------------
Remora Petroleum, L.P. and its debtor affiliates filed with the
U.S. Bankruptcy Court for the Southern District of Texas, Houston
Division, a Plan of Reorganization and a corresponding Disclosure
Statement.
The Plan is the result of these extensive good faith discussions
and encompasses a comprehensive restructuring of the Debtors'
existing debt obligations in these Chapter 11 Cases. The
Restructuring proposed by the Debtors will provide substantial
benefits to the Debtors and their stakeholders, including, without
limitation, the following:
* Except as otherwise provided in the Plan, all assets of the
Debtors will be transferred to Remora Operating prior to and as a
condition to the Effective Date. The Restructuring will transfer
the equity interests in Remora Operating, LLC in satisfaction of
the Allowed First Lien Lender Secured Claims and/or DIP Claims.
After the Effective Date, holders of the Allowed First Lien Lender
Secured Claims will own 100% of the equity interests in Reorganized
Remora Operating, LLC.
* The continuation of Reorganized Remora Operating's business,
including the ability to participate in future exploration
activities, will provide benefit by way of maintaining contractual
relationships among working interest owners, continued
participation by Reorganized Remora Operating in funding its
portion of operating and development costs for drilling,
exploration, and production operations, and continued compliance
with decommissioning and plugging and abandonment obligations.
* The Restructuring will also provide the basis for moving
forward for Reorganized Remora Operating to continue to do business
with many current vendors and suppliers, thereby providing economic
contribution to the vendor and supplier community.
* The Restructuring will provide recovery to certain Classes of
Claims that could expect a lesser recovery, or no recovery, if the
Debtors were liquidated under chapter 7 of the Bankruptcy Code or
if the Holders of the First Lien Lender Secured Claims were to
exercise foreclosure rights. Absent the consent of the First Lien
Lenders, the Class 2 Cash Distribution and the Class 3 Cash
Distribution would otherwise not be available to Holders of Allowed
Second Lien Claims and Allowed General Unsecured Claims,
respectively.
Class 3 consists of all Allowed Unsecured Claims against each
Debtor, including the PPP Loan and First Lien Lender Deficiency
Claim, with an estimated percentage recovery of 1.7%. On the
Effective Date, except to the extent that a Holder of a Class 3
Claim agrees to a less favorable treatment, in full and final
satisfaction, compromise, settlement, release, and discharge of and
in exchange for the Unsecured Claims against the Debtors, each such
Holder shall receive its respective Pro Rata share of the Class 3
Cash Distribution.
On the Effective Date, all Equity Interests in Remora Operating
shall automatically be deemed cancelled, and the Holders of such
Equity Interests shall not receive any Plan Distribution or retain
any property or interest in property on account of their respective
Equity Interests in Remora Operating. On the Effective Date, Equity
Interests in Remora and Remora GP shall remain issued and
unaffected, provided that Holders of such Equity Interests shall
not receive any Plan Distributions or retain any other property or
interest in property on account of their respective Equity
Interests in any of the Debtors unless all Allowed Claims are paid
in full.
On the Effective Date, Equity Interests in Remora CA and Remora LA
shall remain issued and unaffected and Reorganized Remora shall
continue to own Reorganized Remora CA and Reorganized Remora LA
provided that Holders of such Equity Interests shall not receive
any Plan Distributions or retain any other property or interest in
property on account of their respective Equity Interests in any of
the Debtors.
The Reorganized Debtors shall fund any Cash Plan Distributions with
Cash on hand, including Cash from operations and borrowing under
the Exit Facility.
A full-text copy of the disclosure statement dated September 15,
2020, is available at https://tinyurl.com/y3yb8o8h from
PacerMonitor.com at no charge.
Proposed Counsel for the Debtors:
HUNTON ANDREWS KURTH LLP
Timothy A "Tad" Davidson II
Joseph Rovira
Catherine Diktaban
600 Travis, Suite 4200
Houston, Texas 77002
Tel: (713) 220-4200
About Remora Petroleum
Remora Petroleum, L.P. and its affiliates are engaged in the
exploration, development, production and acquisition of
conventional oil and gas assets, with a focus on assets that are
heavy on proved developed producing (PDP) reserves. They have
acquired assets in various locations since their formation in
2011.
Remora Petroleum and four affiliates filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 20-34037) on Aug. 12, 2020. John T. Young, Jr., chief
restructuring officer, signed the petitions. At the time of the
filing, Debtors disclosed estimated assets of $10 million to $50
million and estimated liabilities of $50 million to $100 million.
Judge David R. Jones oversees the cases.
Debtors have tapped Hunton Andrews Kurth LLP as counsel, Conway
MacKenzie Management Services, LLC as financial advisor, and
Seaport Gordian Energy, LLC as investment banker. Donlin, Recano &
Company, Inc. is the claims, noticing and solicitation agent.
ROBERTS PROPERTY: SBA's Unsecured Claim Won't Get Any Payment
-------------------------------------------------------------
Roberts Property & Holdings LLC submitted a Second Amended Chapter
11 Plan, which says the Debtor will continue in its operations
after the confirmation.
The Plan treats claims as follows:
* CLASS 1 - BBVA USA. This class is impaired. Class 1 - BBVA USA
is comprised of the secured claims and unsecured claims of BBVA
USA. This creditor holds a first mortgage on all real property
owned by the Debtor and a first priority security interest in all
personal property owned by the Debtor. The BBVA Claim shall be
treated as an allowed secured claim in the amount of $1,719,422.58.
Monthly payment obligation of the Debtor to BBVA shall be
calculated by reamortizing the amount of the BBVA Claim together
with the interest which has accrued on the BBVA Claim from the
August 21, 2020 through the effective date of the plan over 360
months with interest at 5.68% per annum.
* CLASS 2 - SBA. This class is impaired. Class 2 - SBA is
comprised of the secured claims and unsecured claims of SBA. This
creditor holds the second mortgage on all real property owned by
the Debtor and a second priority security interest in all personal
property owned by the Debtor. SBA holds Claim 3 in the amount of
$1,025,653.69. The SBA Secured Claim shall be paid in full with
interest as follows: The SBA Secured Claim shall be reamortized
over 180 months with interest at 5.00% per annum and a balloon
payment in the 121st month. Payments shall be made monthly. The
estimated monthly payment is $1,205.82. The SBA will not receive
any payment on the SBA unsecured claim.
* CLASS 3 - Equity Interests. The rights of the sole member,
Louie F. Wise III's Kendall Holdings, will remain unchanged and
unmodified.
The plan will be funded from payments made by Climate Control
Mechanical Services, Inc., and other Debtor affiliates for use of
the space owned by the Debtor.
A full-text copy of the Second Amended Chapter 11 Plan dated
September 16, 2020, is available at https://tinyurl.com/yyfejfau
from PacerMonitor.com at no charge.
Attorney for Debtor:
RICHARD A. PERRY
RICHARD A. PERRY P.A.
Law Practice
820 East Fort King Street
Ocala, FL 34471-2320
(352)732-2299
richard@rapocala.com
About Roberts Property & Holdings
Roberts Property & Holdings, LLC sought protection under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03409) on
Sept. 9, 2019. At the time of the filing, the Debtor disclosed
assets of between $1,000,001 and $10 million and liabilities of the
same range. The case is assigned to Judge Jerry A. Funk. The
Debtor is represented by Richard A. Perry, Esq., at Richard A.
Perry P.A.
ROLTA INTERNATIONAL: Seeks to Hire Maples Law as Legal Counsel
--------------------------------------------------------------
Rolta International, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Northern District of Alabama to hire
Maples Law Firm, P.C. as their legal counsel.
The firm will provide the following services:
a. prepare pleadings and applications;
b. develop the relationship of the status of the Debtors to
the claims of creditors;
c. advise the Debtors of their rights, duties and
obligations;
d. take any and all other necessary action incident to the
proper preservation and administration of the Debtor's Chapter 11
cases; and
e. advise and assist the Debtors in the formation and
preservation of a plan to Chapter 11 of the Bankruptcy Code.
The firm's current rate for the bankruptcy partner that will be the
Debtors' main contact is $395 per hour. The rate for associates
charged by the firm is $250 per hour while paralegals is $100 to
$250 per hour.
A retainer of $75,000 and $10,000 in advanced expenses for filing
fees was paid to the firm.
Stuart Maples, Esq., at Maples Law, 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:
Stuart M. Maples, Esq.
Maples Law Firm, PC
200 Clinton Avenue West, Suite 1000
Huntsville, AL 35801
Telephone: (256) 489-9779
Facsimile: (256) 489-9720
Email: smaples@mapleslawfirmpc.com
About Rolta International
Huntsville, Ala.-based Rolta International, Inc. provides
information technology solutions, services, and software.
Rolta International and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Lead Case No.
20-82282) on Oct. 29, 2020. The petitions were signed by Preetha
Pulusani, president of the Debtors' international operations.
At the time of the filing, Rolta International had estimated assets
of less than $50,000 and liabilities of between $500 million and $1
billion.
Judge Clifton R. Jessup Jr. oversees the cases. Maples Law Firm,
PC is Debtor's legal counsel.
ROMANS HOUSE: Seeks to Hire WesternCare as Restructuring Advisor
----------------------------------------------------------------
Romans House, LLC and its affiliate Healthcore System seek approval
from the U.S. Bankruptcy Court for the Northern District of Texas
to hire WesternCare Management, LLC as their restructuring
advisor.
The firm will assist in the Debtors' reorganization efforts and
ensure they comply with the terms of the order approving their
stipulation with Pender West Credit 1 REIT, L.L.C. regarding, inter
alia, extension of the closing date contemplated under the Debtors'
confirmed plan of reorganization.
WesternCare Management is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code, according to
court filings.
The firm can be reached through:
Denise Deapen
WesternCare Management, LLC
1701 River Run Rd., Ste. 1015
Fort Worth, TX 76107
About Romans House
Based in Forth Worth, Texas, Romans House, LLC operates Tandy
Village Assisted Living, a continuing care retirement community and
assisted living facility for the elderly in Fort Worth, Texas.
Affiliate Healthcore System Management, LLC, operates Vincent
Victoria Village Assisted Living, also an assisted living facility
for the elderly.
Romans House, LLC, and Healthcore System sought Chapter 11
protection (Bankr. N.D. of Tex. Case No. 19-45023 and 19-45024) on
Dec. 9, 2019. Romans House was estimated to have $1 million to $10
million in assets and liabilities while Healthcore was estimated to
have $1 million to $10 million in assets and $10 million to $50
million in liabilities.
The Hon. Edward L. Morris is the case judge.
Demarco Mitchell, PLLC, is the Debtors' legal counsel.
RWDT FOODS: Files 3-Year Plan; Considers Going Concern Sale
-----------------------------------------------------------
RWDT Foods, Inc., which currently operates four Denny's
restaurants, two in North Carolina (Durham and Fayetteville) and
two in South Carolina (North Charleston and North Myrtle Beach),
said in its proposed Plan and Addendum that it intends to pursue a
sale of the four open restaurants as going concerns.
Sales of the open restaurants could occur before or after the
effective date of the Plan, and the Debtor may sell the restaurants
individually or in groups of two or more locations. In the event
restaurants are sold prior to full consummation of the Plan, the
net sale proceeds will be distributed to holders of allowed claims.
However, in the event a sale of the restaurants as going concerns
is not achieved, the Plan will be funded by cash flow derived from
operations over a period of three years.
The Plan treats claims as follows:
* Class 1: Priority (Non-Tax) Claims. Class 1 will consist of
any employee wage or benefit claims which are allowed, entitled to
priority under the Bankruptcy Code and remain outstanding. If any
such claims are filed and allowed, such Class 1 Allowed Priority
(Non-tax) Claims shall be paid in full over the three year term of
the Plan.
* Class 2: Secured Claims. Class 2 will consist of the Allowed
Secured Claim of Bridge Funding Group, Inc., which as of the
commencement of this case had an outstanding balance of
approximately $461,300 secured by a lien upon substantially all
property of the estate. The Plan provides that the Debtor will
continue such payments until the obligation is paid in full or, in
the event of a sale of the businesses, the net sale proceeds will
be applied to the remaining balance outstanding until paid in full.
* Classes 3 and 4: Non-priority Unsecured Claims. Non-priority
unsecured claims are divided into two classes, (i) Class 3 will
consist of Allowed Non-priority Non-insider Unsecured Claims, and
(ii) Class 4 will consist of Allowed Non-priority Insider Unsecured
Claims. Over the initial three-year period of the Plan, the Debtor
projects that $132,854 will be available for payment of allowed
unsecured claims in Class 3 and no distributions to allowed
unsecured claims in Class 4, as Class 4 allowed unsecured claims
will be subordinated to holders of Class 3 allowed unsecured
claims.
In the event of a sale of one or more of the restaurant businesses
prior to full consummation of the Plan, the net sale proceeds will
be applied in the following priority: (i) Allowed Administrative
Expense Claims, (ii) Class 2 Secured Claim until paid in full,
(iii) Allowed Priority (Non-tax) Claims, if any, until paid in
full, (iv) Allowed Priority Tax Claims until paid in full, (iv)
Class 3 Allowed Non-priority Non-insider Unsecured Claims, until
Class 3 Claims have received aggregate payments equal to $132,854,
(v) Class 4 Allowed Non-priority Insider Unsecured Claims, and (vi)
Class 5 Equity Interests. Any sale of one or more of the restaurant
businesses will be subject to approval by the Court after notice
and hearing.
A full-text copy of the Revised Addendum to Plan of Reorganization
dated September 16, 2020, is available at
https://tinyurl.com/y2fanz3y from PacerMonitor.com at no charge.
Counsel for the Debtor:
John A. Northen
Vicki L. Parrott
Northen Blue, LLP
Post Office Box 2208
Chapel Hill, NC 27515-2208
Telephone: 919-968-4441
E-mail: jan@nbfirm.com
vlp@nbfirm.com
About RWDT Foods
RWDT Foods, Inc., owns and operates 4 franchised Denny's
restaurants. RWDT Foods, Inc., based in Durham, NC, filed a
Chapter 11 petition (Bankr. N.D.N.C. Case No. 20-80300) on June 24,
2020. In the petition signed by Larry D. Thompson, president, the
Debtor disclosed $3,047,359 in assets and $8,825,879 in
liabilities. The Hon. Lena M. James oversees the case. NORTHEN
BLUE, LLP, serves as bankruptcy counsel to the Debtor. WYRICK
ROBBINS YATES & PONTON LLP, is special counsel.
RYDER SYSTEM: Egan-Jones Lowers FC Senior Unsecured Rating to BB-
-----------------------------------------------------------------
Egan-Jones Ratings Company, on November 3, 2020, downgraded the
foreign currency senior unsecured rating on debt issued by Ryder
System Inc to BB- from BB.
Headquartered in Miami, Florida, Ryder System, Inc., commonly known
as Ryder, is an American transportation and logistics company.
SANTA CLARITA: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Santa Clarita, LLC
2055 South Cottonwood Drive
Tempe, AZ 85282
Business Description: Santa Clarita, LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: November 12, 2020
Court: United States Bankruptcy Court
District of Arizona
Case No.: 20-12402
Judge: Hon. Madeleine C. Wanslee
Debtor's Counsel: Thomas H. Allen, Esq.
ALLEN BARNES & JONES, PLC
1850 N. Central Avenue, Suite 1150
Phoenix, AZ 85004
Tel: 602-256-6000
Email: tallen@allenbarneslaw.com
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $500 million to $1 billion
The petition was signed by David W. Lunn, CEO of Remediation
Financial, Inc., manager of the Debtor.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/FC2XCDY/SANTA_CLARITA_LLC__azbke-20-12402__0001.0.pdf?mcid=tGE4TAMA
SERVICE CORP: Egan-Jones Hikes Sr. Unsecured Debt Ratings to BB+
----------------------------------------------------------------
Egan-Jones Ratings Company, on November 6, 2020, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Service Corporation International/US to BB+ from
BB.
Headquartered in Houston, Texas, Service Corporation International
is proud to be North America's leading provider of funeral,
cremation, and cemetery services.
SIWF HOLDINGS: Moody's Affirms B3 CFR & Alters Outlook to Positive
------------------------------------------------------------------
Moody's Investors Service affirmed SIWF Holdings, Inc.'s Corporate
Family Rating at B3, Probability of Default Rating (PDR) at B3-PD,
senior secured first lien term loan rating at B2, and the senior
secured second lien term loan rating at Caa2. At the same time,
Moody's changed the outlook to positive from negative.
"T[he] ratings and outlook actions reflect Springs' strong
third-quarter performance, and its view that high consumer demand
for the company's window coverings driven by affordable home
reinvestment will sustain the improved financial leverage and free
cash flow," said Oliver Alcantara, Moody's lead analyst for the
company. "The very strong recovery of Springs' dealer and retail
channels from April lows has more than offset weakness in its
commercial business, and resulted in better-operating profit
results year-to-date and versus its previous expectations" added
Alcantara.
Moody's affirmed the ratings because elevated unemployment and a
tenuous economic recovery are likely to continue to lead to
volatility in discretionary consumer spending. Shareholder friendly
financial policies under private equity ownership could also lead
to leveraging shareholder distributions or acquisitions.
The following ratings/assessments are affected by the action:
Ratings Affirmed:
Issuer: SIWF Holdings, Inc.
Corporate Family Rating, Affirmed at B3
Probability of Default Rating, Affirmed at B3-PD
GTD Senior Secured 1st Lien Term Loan, Affirmed at B2 (LGD3)
GTD Senior Secured 2nd Lien Term Loan, Affirmed at Caa2 (LGD5)
Outlook Actions:
Issuer: SIWF Holdings, Inc.
Outlook, Changed to Positive from Negative
RATINGS RATIONALE
Springs' B3 CFR reflects its high financial leverage with
debt/EBITDA at around 5.2x for the last twelve months (LTM) period
ended September 26, 2020, and its exposure to cyclical downturns
given the discretionary nature of its products. A prolonged period
of high unemployment or weak economic conditions will negatively
affect the company's operating results. Springs has customer
concentration with two national retailers accounting for
approximately a quarter of revenue, and the company's direct
competitor is considerably larger with global scale, which creates
the potential for market share volatility. Governance factors
include aggressive financial policies under private equity
ownership, including high financial leverage.
The rating also reflects Springs' strong position in the window
coverings market, supported by a broad product portfolio and
ability to execute quick order turnaround times. The company has
good channel diversification and has long-standing relationships
with well-recognized retailers. Demand for the company's product
significantly declined during the second quarter of fiscal 2020 due
to plant shutdowns and a sharp pullback in discretionary consumer
spending related to the coronavirus, which had a material negative
impact on revenue and earnings. However, the sharp sales recovery
in the company's dealer and retail channels in recent months, aided
by more residential investment while consumers spend more time at
home and capitalize on low borrowing costs, is more than offsetting
lingering weakness in Spring's commercial business. Moody's expects
continued good consumer demand for the balance of 2020, and into
fiscal 2021, which should support stable revenue and earnings as
well as credit metrics. Springs' very good liquidity reflects its
relatively healthy cash balance of $148 million as of September 26,
2020, good free cash flow generation, and access to an undrawn $125
million revolving credit facility due 2023. In addition, there is
current cushion with Moody's financial leverage expectations for
Springs' at the B3 rating level to absorb further weakness in the
commercial channel, renewed drop in residential demand, or a
potential leveraging event.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The positive outlook reflects Springs' improved credit metrics
highlighted by meaningfully lower debt/EBITDA at around 5.2x and
Moody's expectation that continued good consumer demand will
support credit metrics at this level.
The ratings could be upgraded if the company consistently reports
meaningful positive free cash flows while benefitting from organic
revenue growth and EBITDA margin expansion. A ratings upgrade would
also require the company to maintain balanced financial policies
that sustain debt/EBITDA below 6.0x, and maintain at least good
liquidity.
The ratings could be downgraded if the company's operating results
deteriorate, highlighted by revenue declines or weakness in
operating margins, or if free cash flow is weak or negative.
Ratings could also be downgraded if liquidity meaningfully
deteriorates, the company completes a sizable debt-financed
acquisition or shareholder distribution, debt/EBITDA is above 7.0x
or EBITA/interest is below 1.0x.
The principal methodology used in these ratings was Consumer
Durables Industry published in April 2017.
Headquartered in Middleton, Wisconsin, Springs Windows designs and
manufactures window coverings. Revenue is approximately $1 billion.
The company is owned by AEA Investors and British Columbia
Investment Management Corporation.
SIZZLER USA: Seeks to Hire Sheppard Mullin as Bankruptcy Counsel
----------------------------------------------------------------
Sizzler USA Acquisition, Inc. and its affiliates seek approval from
the U.S. Bankruptcy Court for the Northern District of California
to hire Sheppard, Mullin, Richter & Hampton LLP as their bankruptcy
counsel.
Sheppard Mullin will provide the following services:
a. advise and assist the Debtors with respect to compliance
with the requirements of the United States Trustee;
b. advise the Debtors with respect to their powers and duties
as a debtors in possession;
c. advise the Debtors on the conduct of their respective
bankruptcy cases;
d. attend meetings and negotiate with the representatives of
creditors and other parties in interest;
e. take all necessary actions to protect and preserve the
Debtors' estate;
f. prepare pleadings in connection with the bankruptcy cases;
g. make any court appearances on behalf of the Debtors;
h. assist the Debtors in the formulation, negotiation,
confirmation, and implementation of a Chapter 11 plan; and
i. take such other action and performing such other services
for the Debtors.
The firm's normal and customary hourly rates are as follows:
Ori Katz Partner $850
Richard Brunette Partner $715
Jeannie Kim Associate $555
Gianna Segretti Associate $510
Ori Katz Esq., a partner at Sheppard Mullin, 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:
Ori Katz, Esq.
Jeannie Kim, Esq.
Gianna Segretti, Esq.
Sheppard, Mullin, Richter & Hampton LLP
Four Embarcadero Center, 17th Floor
San Francisco, CA 94111-4109
Telephone: (415) 434-9100
Facsimile: (415) 434-3947
Email: okatz@sheppardmullin.com
jekim@sheppardmullin.com
gsegretti@sheppardmullin.com
About Sizzler USA Acquisition
Sizzler USA Acquisition, Inc. is a United States-based restaurant
chain with headquarters in Mission Viejo, California. It offers
steak, seafood, chicken, and burgers. Visit https://www.sizzler.com
for more information.
Sizzler USA Acquisition and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Lead Case No.
20-30746) on September 21, 2020. The petitions were signed by
Christopher Perkins, chief services officer.
At the time of the filing, each Debtors had estimated assets and
liabilities of $1 million to $10 million.
Sheppard, Mullin, Richter & Hampton, LLP is Debtor's legal counsel.
SNC-LAVALIN GROUP: DBRS Cuts Issuer Rating to BB(high), Trend Neg.
------------------------------------------------------------------
DBRS Limited downgraded the Issuer Rating and Senior Debentures
rating of SNC-Lavalin Group Inc. (SNC or the Company) to BB (high)
from BBB (low) and maintained the Negative trend. DBRS Morningstar
also assigned a recovery rating of RR4 to the Senior Debentures.
The downgrade is driven by recurrent losses in the Projects
business and continued underperformance in SNC's earnings and
credit metrics during year-to-date (YTD) Q3 2020—when compared
with other investment-grade peers. DBRS Morningstar notes that the
recurrence of project losses (despite their arising from distinct
projects and being one-off in nature) continues to surprise on the
negative side and demonstrates a relative weakening of project
control. The Negative trend is maintained as DBRS Morningstar
remains concerned about earnings recovery and the potential for
further challenges in the Projects business until the completion of
the remaining lump-sum turnkey (LSTK) contract backlog.
At the time of the last downgrade in July 2019, DBRS Morningstar
had factored in the weak Q2 2019 results and worsening of the
adjusted debt-to-EBITDA ratio beyond 3.0 times (x) as of F2019,
despite a profitable H2 2019. While DBRS Morningstar initially
expected the earnings recovery to continue in 2020 after a strong
H2 2019, the impact of the Coronavirus Disease (COVID-19) pandemic
(despite the resilient nature of the construction sector) led us to
revise our Base Case forecasts downward earlier this year,
expecting credit metrics as of F2020 to be in line with last year.
However, YTD Q3 2020 results and Q3 2020 results, in particular,
indicate continued challenges in the Projects business (primarily
due to a $58 million loss from an unfavorable arbitration ruling on
a legacy LSTK project) and deterioration in credit metrics. This
has led DBRS Morningstar to further adjust our forecasts downward
with adjusted debt-to-EBITDA surpassing 4.2x as of F2020 (from 3.9x
as of LTM September 30, 2020) and not improving to a level below
3.0x by the end of F2021, unless the Company repays a material
portion of outstanding debt or demonstrates a strong earnings
recovery in 2021 that exceeds our expectations.
DBRS Morningstar notes that SNC's Engineering Services business has
performed favorably during the pandemic and is expected to perform
better going forward, compared to the Projects business. However,
the outperformance of the Engineering Services business is
insufficient to prevent a material earnings decline as of F2020 or
drive strong earnings recovery for SNC during F2021.
DBRS Morningstar also notes that SNC is making positive strategic
decisions: first with the announcement of exiting LSTK construction
contracts in July 2019 and then with the proposed transformation of
the Resources business in July 2020. On July 31, 2020, SNC
announced its plans to scale down the Resources Services business
to key regions (Americas and Middle East) and focus on completing
the remaining LSTK Resources Projects backlog by Q1 2021. If SNC's
new strategy is executed as proposed with timely and on budget
completion of the fixed-price project backlog, the Company's
business risk profile would be positively affected, notwithstanding
the smaller scale of the remaining business. DBRS Morningstar notes
that SNC could continue to face some losses in the Resources
business at least until H1 2021 as the reduction in overheads for
the Resources Services business (due to streamlining geographic
presence) comes with a lag effect, and the likelihood of the
Resources Projects business facing additional challenges remaining
high. While the majority of the Resources Projects backlog might be
completed by Q4 2020, DBRS Morningstar notes that the entire
Resources Projects backlog will not be complete until H1 2021.
Further, DBRS Morningstar notes that SNC's Infrastructure Projects
backlog includes some complex light-rail transit projects under
fixed-price contracts that are expected to be completed by 2024.
Despite our expectations of gradual improvement in SNC's business
profile during the near to medium term, DBRS Morningstar maintains
the Negative trend as earnings recovery remains a key issue. DBRS
Morningstar would like SNC to demonstrate improvement in earnings
and credit metrics, substantial progress towards completion of the
Resources Projects backlog as well as stricter project control at
least for two consecutive quarters before reinstating the Stable
trend. However, if SNC's credit metrics deteriorate further from
our Base Case expectations through F2021 because of
higher-than-anticipated losses (specifically, in the Projects
business), incremental borrowings, or lower-than-expected EBITDA
that keeps the adjusted debt-to-EBITDA ratio above 4.5x through
2021, this could cause further negative rating action.
Notes: All figures are in Canadian dollars unless otherwise noted.
SPINEGUARD INC: Plan Exclusivity Extended Until December 15
-----------------------------------------------------------
Judge John T. Dorsey of the U.S. Bankruptcy Court for the District
of Delaware extended SpineGuard, Inc.'s exclusive periods to file a
Chapter 11 plan through and including December 15, 2020, and to
solicit acceptances of the plan through and including February 16,
2021.
Since the Petition Date, the Debtor has worked diligently with its
secured creditors (the "Bondholders") to obtain access to cash
collateral to fund the Chapter 11 case and has worked to ensure a
smooth transition into chapter 11 for its customers and employees.
The Debtor sought and obtained a claims bar date which has now
passed. The Debtor's parent is in its own insolvency proceedings in
France and resolution of the two cases is necessarily linked.
The COVID-19 pandemic negatively impacted the Debtor's business
operations. The Debtor is cautiously optimistic that the worst is
over and has seen some encouraging signs pointing to a pick-up in
its business. The Debtor and its French parent, which is currently
in the midst of its own "safeguard proceeding" in France, have had
on-going negotiations with the Bondholders regarding a global plan
of reorganization. Those discussions will continue during the
extended plan period.
The extension will allow time for the Debtor to continue
negotiations with the Bondholders to create a plan of
reorganization and resolve critical issues, maximizing value for
creditors and progressing the Chapter 11 case.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/37pSw3y at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/3oalpH6 at no extra charge.
About SpineGuard, Inc.
Based in San Francisco, California, SpineGuard, Inc.
--https://www.spineguard.com/ -- is an importer and distributor of
single-use, disposable, Dynamic Surgical Guidance (DSG) instruments
that measure the density of the tissue and enable surgeons to drill
holes, safely and without damaging nerves, into the pedicles of a
vertebral body in the spine during spinal fusion surgery.
A wholly-owned subsidiary of SpineGuard, S.A., SpineGuard, Inc.,
filed a Chapter 11 petition (Bankr. D. Del. Case No. 20-10332) on
Feb. 13, 2020. In the petition signed by Steve McAdoo, general
manager, USA, the Debtor estimated between $1 million and $10
million in both assets and liabilities.
Judge John T. Dorsey is assigned to the case. Hanson Bridgett LLP
is the Debtor's counsel.
On March 24, 2020, Judge John T. Dorsey of the U.S. Bankruptcy
Court for the District of Delaware authorized SpineGuard, Inc. to
use cash collateral on an interim basis from the Petition Date
through and including the earliest to occur of (i) April 17, 2020,
at 5:00 p.m. Eastern Time, or (ii) the occurrence of a termination
event.
A copy of the Order is available for free at
https://is.gd/Y2yXC2from PacerMonitor.com.
ST. LAZARUS FAMILY: Dec. 14 Plan Hearing on 100% Plan Set
---------------------------------------------------------
On Nov. 4, 2020, the U.S. Bankruptcy Court for the Western District
of Texas, San Antonio Division, conducted a hearing to consider
approval of a proposed Disclosure Statement filed by debtor St.
Lazarus Family Practice, P.A. Judge Craig A. Gargotta approved the
Disclosure Statement and ordered that:
* The Ballot shall conform to Official Form 314 and contain a
provision that provides that general unsecured creditors will
receive a 100% payment.
* December 4, 2020 at 5:00 p.m. is fixed as the last day for
submitting Ballots for acceptances or rejections of the Plan.
* Dec. 4, 2020 is fixed as the last day for filing and serving
written objections to confirmation of the Plan.
* Dec. 10, 2020 is fixed as the last day for the Debtor to file
with the Court a Ballot summary.
* Dec. 14, 2020 at 10:00 a.m. is the telephonic hearing to
consider confirmation of the Plan.
A full-text copy of the order dated November 5, 2020, is available
at https://tinyurl.com/yyr53yg3 from PacerMonitor.com at no charge.
The Debtor is represented by:
Heidi McLeod Law Office PLLC
3355 Cherry Ridge Ste. 214
San Antonio, TEX 78230
Tel: (210) 853-0092
Fax: (210) 853-0129
About St. Lazarus Family Practice
St. Lazarus Family Practice, P.A., filed a Chapter 11 bankruptcy
Petition (Bankr. W.D. Tex. Case No. 19-52743) on Nov. 21, 2019,
estimating less than $1 million in both assets and liabilities.
Judge Craig A. Gargotta oversees the case. Heidi McLeod, Esq., at
Heidi McLeod Law Office, is the Debtor's legal counsel.
ST. LAZARUS FAMILY: Unsecureds to Be Paid in Full Over Time
-----------------------------------------------------------
St. Lazarus Family Practice, P.A. submitted a Combined Disclosure
Statement and Plan.
Dr. Contreras is the current manager of the practice and will
continue to manage the practice after case is confirmed.
Class 2 Financial Pacific Leasing is impaired. Debtor will
surrender the laser in full satisfaction of the debt.
Class 3 Unsecured Creditors -- comprised of all creditors not
consigned by Dr. Contreras -- are impaired. Unsecured creditors
will be paid out over time in equal installments without interest.
The estimated amount of debt is $93,416. The monthly payment is
$1,297 over 7 years.
Class 4 Insider Guaranteed General Unsecured Claims totaling
$175,726 is impaired. The Debtor will make monthly payments on a
pro rata basis beginning the month after confirmation and continue
until paid in full with no interest over a 10-year period at $1,464
per month.
Class 5 insider Dr. Christine Contreras s impaired. The Debtor
will surrender her claim in order to have a contribution to the
plan.
Payments and distributions under the Plan will be funded from
future income of operation of the business, rent from labs and
support businesses.
A full-text copy of the Combined Disclosure Statement and Plan
dated September 16, 2020, is available at
https://tinyurl.com/y3hd6ys4 from PacerMonitor.com at no charge.
Counsel for Debtor:
Heidi McLeod
3355 Cherry Ridge, Suite 214
San Antonio, TX 78230
Tel: (210) 853-0092
Email: heidimcleodlaw@gmail.com
About St. Lazarus Family Practice
St. Lazarus Family Practice, P.A., filed a Chapter 11 bankruptcy
petition (Bankr. W.D. Tex. Case No. 19-52743) on Nov. 21, 2019,
estimating less than $1 million in both assets and liabilities.
Judge Craig A. Gargotta oversees the case. Heidi McLeod, Esq., at
Heidi McLeod Law Office, is the Debtor's legal counsel.
STEREOTAXIS INC: Incurs $1.57 Million Net Loss in Third Quarter
---------------------------------------------------------------
Stereotaxis, Inc., filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $1.57 million on $8.70 million of total revenue for the three
months ended Sept. 30, 2020, compared to net income of $43,748 on
$8.20 million of total revenue for the three months ended Sept. 30,
2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss of $5.46 million on $19.80 million of total revenue
compared to a net loss of $3.51 million on $22.01 million of total
revenue for the same period during the prior year.
As of Sept. 30, 2020, the Company had $57.13 million in total
assets, $16.51 million in total liabilities, $5.60 million in
convertible preferred stock, and $35.01 million in total
stockholders' equity.
Gross margin in the quarter was $4.7 million, or 54% of revenue.
Gross margin on recurring revenue was consistent with prior
quarters. Gross margin on system revenue reflected the allocation
of overhead expenses and initial installation costs, and was not
reflective of cash margins generated from the system sales or
expected future GAAP margins. Operating expenses in the third
quarter of $6.2 million decreased from $6.4 million in the prior
year quarter with increased investment in R&D offset by reduced
travel and marketing expenses. Operating loss and net loss in the
quarter were ($1.6) million. Adjusted negative free cash flow for
the quarter was ($0.2) million.
At Sept. 30, 2020, Stereotaxis had cash and cash equivalents of
$43.8 million.
"Stereotaxis is pleased to report revenue growth with the
successful installation of the first Genesis RMN and Model S
Imaging Systems in both the United States and Europe. Our newest
robotic technology has performed to the high expectations demanded
by premier medical institutions, been used successfully in over
ninety procedures, and proven reliable and robust with
uninterrupted up-time," said David Fischel, Chairman and CEO.
"While hospitals remain negatively impacted by COVID-19, we have
experienced a gradual return towards more normal capital planning.
We received an additional order for a Genesis system from a US
hospital that is establishing a new robotic electrophysiology
program. Given the advanced status of multiple additional
discussions, we are comfortable providing preliminary guidance for
$10-20 million in Genesis system revenue in 2021."
"Stereotaxis' advanced robotically-navigated magnetic ablation
catheter is advancing on schedule with initial commercialization
and initiation of a pivotal US trial expected in 2021. Meaningful
progress continues on an additional wave of innovations within
electrophysiology and beyond that are expected to drive
transformational revenue growth. We expect to share details on
this next wave of innovation towards the end of next year."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1289340/000149315220020777/form10-q.htm
About Stereotaxis
Based in St. Louis, Missouri, Stereotaxis, Inc. --
http://www.stereotaxis.com-- is an innovative robotic technology
company designed to enhance the treatment of arrhythmias and
perform endovascular procedures. Its mission is the discovery,
development and delivery of robotic systems, instruments, and
information solutions for the interventional laboratory. These
innovations help physicians provide unsurpassed patient care with
robotic precision and safety, improved lab efficiency and
productivity, and enhanced integration of procedural information.
Over 100 issued patents support the Stereotaxis platform. The core
components of Stereotaxis' systems have received regulatory
clearance in the United States, European Union, Japan, Canada,
China, and elsewhere.
Stereotaxis reported a loss attributable to common stockholders of
$6.02 million for the year ended Dec. 31, 2019, compared to a loss
attributable to common stockholders of $1.32 million for the year
ended Dec. 31, 2018. As of June 30, 2020, the Company had $57.05
million in total assets, $15.68 million in total liabilities, $5.68
million in convertible preferred stock, and $35.68 million in total
stockholders' equity.
The Company has sustained operating losses throughout its corporate
history and expects that its 2020 expenses will exceed its 2020
gross margin. The Company expects to continue to incur operating
losses and negative cash flows until revenues reach a level
sufficient to support ongoing operations or expense reductions are
in place. The Company's liquidity needs will be largely determined
by the success of clinical adoption within the installed base of
its robotic magnetic navigation system as well as by new placements
of capital systems. The Company's plans for improving the
liquidity conditions primarily include its ability to control the
timing and spending of its operating expenses and raising
additional funds through debt or equity financing, as disclosed in
the Company's Annual Report for the year ended Dec. 31, 2019.
STREET LEVEL: Seeks to Hire Archer & Greiner as Legal Counsel
-------------------------------------------------------------
Street Level LLC seeks approval from the U.S. Bankruptcy Court for
the Southern District of New York to hire Archer & Greiner, P.C. as
its legal counsel.
The firm will render the following legal services:
(a) represent the Debtor in its Chapter 11 case and any
matter;
(b) advise the Debtor concerning the requirements of the
Bankruptcy Code and Bankruptcy Rules and the requirements of the
Office of the United States Trustee;
(c) represent the Debtor in any litigation matter;
(d) advise the Debtor with respect to legal strategies
supporting restructuring and an ultimate resolution of the case;
(e) assist the Debtor with reports to the court, monthly
operating statements, fee applications or other matters required by
the court or the United States Trustee; and
(f) perform such other legal services for the Debtor.
The firm will be paid at hourly rates as follows:
Allen G. Kadish Attorney $730
Gerard DiConza Attorney $710
Harrison H.D. Breakstone Attorney $395
Lance A. Schildkraut Attorney $300
Christian Hansen Paralegal $220
Allen Kadish, Esq., an attorney at Archer & Greiner, 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:
Allen G. Kadish, Esq.
Harrison H.D. Breakstone, Esq.
Archer & Greiner, P.C.
1211 Avenue of the Americas, Suite 2750
New York, NY 10036
Telephone: (212) 682-4940
Email: akadish@archerlaw.com
hbreakstone@archerlaw.com
About Hudson Mercantile
Hudson Mercantile is a portfolio of fresh and modern studio event
spaces in the Hudson Yards district of Midtown Manhattan.
Street Level LLC, doing business as Hudson Mercantile, sought
Chapter 11 protection (Bankr. S.D.N.Y. Case No. 20-12464) on Oct.
19, 2020, estimating less than $1 million in both assets and
liabilities.
Archer & Greiner, P.C., led by Allen G. Kadish, is the Debtor's
counsel.
STUDIO MOVIE GRILL: Landlords Seek Rent Break Limit
---------------------------------------------------
Daniel Gill of Bloomberg Law reports that the landlords of Studio
Movie Grill Holdings are opposing further rent extensions for the
bankrupt movie-restaurant chain, citing its incoming revenues after
the doors reopened.
Studio Movie, whose theaters offer dine-in food, already has a
60-day extension, AmREIT SSPF Berkeley LP Wednesday told the U.S.
Bankruptcy Court for the Northern District of Texas. A rent
deferral beyond 60 days isn't justified under the law or
considering the facts, it said.
AmREIT's objection followed another filed Nov. 10 by BRE RC Lincoln
Square TX LP.
Both landlords note that Studio Movie's 33 locations are currently
operating at 75% capacity.
About Studio Movie Grill
Studio Movie Grill and its affiliates operate a chain of movie
theatres that include full-service dining during the show. Studio
Movie Grill is based in Dallas and runs 33 theater-restaurants.
Studio Movie Grill Holdings, LLC, and its affiliates sought Chapter
11 protection (Bankr. N.D. Tex., Case No. 20-32633) on Oct. 23,
2020. Studio Movie Grill was estimated to have $50 million to $100
million in assets and $100 million to $500 million in liabilities.
The Hon. Stacey G. Jernigan is the case judge. The Law Offices of
Frank J. Wright, PLLC is the Debtors' counsel.
STUDIO MOVIE: Seeks to Hire CR3 Partners, Appoint CRO
-----------------------------------------------------
Studio Movie Grill Holdings, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the Northern District of Texas
to hire CR3 Partners, LLC and appoint its partner, William Snyder,
as chief restructuring officer.
The firm will provide the following services:
a. make William Snyder available to serve as the Debtors' CRO
with such responsibilities and authority as is commensurate with
said position;
b. provide other temporary employees to assist with the
restructuring efforts and completion of bankruptcy related
reporting requirements;
c. establish a communication protocol with stakeholders;
d. assist in the preparation and review of financial
projections and cash flow budgets;
e. assist in the preparation and review of reports or filings
as required by the court or the Office of the United States
Trustee;
f. assist in preparation of a plan of reorganization;
g. assist the Debtors and counsel with preparation for
hearings, testimony, creditor meetings, and creation of supporting
exhibits and motions;
h. assist the Debtors and counsel in developing litigation
strategy and related analysis;
i. identify liquidity needs;
j. assist with evaluating executory agreements as necessary;
and
k. perform such other advisory services and/or other functions
as requested by the Debtors or their counsel.
The firm's hourly rates are as follows:
Partner $695 - $795
Director $450 - $625
Manager & Associates $375 - $450
Mr. Snyder hourly rate is $795 for the Debtors' Chapter 11 cases.
The firm received a retainer fee of $100,000.
Michael Juniper, Esq., a partner at CR3 Partners, 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 Juniper, Esq.
CR3 Partners, LLC
13355 Noel Road, Suite 2005
Dallas, TX 75240
Telephone: (214) 215-3940
About Studio Movie Grill
Studio Movie Grill and its affiliates operate a chain of movie
theatres that include full-service dining during the show. Studio
Movie Grill is based in Dallas and runs 33 theater-restaurants.
Studio Movie Grill Holdings, LLC, and its affiliates sought Chapter
11 protection (Bankr. N.D. Tex., Case No. 20-32633) on Oct. 23,
2020. Studio Movie Grill was estimated to have $50 million to $100
million in assets and $100 million to $500 million in liabilities.
The Hon. Stacey G. Jernigan is the case judge. The Law Offices of
Frank J. Wright, PLLC is the Debtors' counsel.
STUDIO MOVIE: Seeks to Hire Donlin Recano as Administrative Agent
-----------------------------------------------------------------
Studio Movie Grill Holdings, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the Northern District of Texas
to hire Donlin, Recano & Company, Inc. as their noticing,
balloting, and administrative agent.
The firm will send out notices and serve motions, orders, and other
pleadings filed in the Chapter 11 cases; prepare individualized
ballots for voting on the Debtors' Chapter 11 plans, transmit
ballots to all parties in interest, tabulate and verify the
results, and prepare voting reports; and maintain an informational
Website to be used by the Debtors to disseminate information to
parties in interest.
The firm will be paid at hourly rates as follows:
Executive Management No charge
Senior Bankruptcy Consultant $175-$205
Case Manager $160-$175
Consultant/Analyst $130-$155
Technology/Programming Consultant $95-$120
Clerical $35-$45
Nellwyn Voorhies, an executive director at Donlin Recano, 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:
Nellwyn Voorhies
DONLIN, RECANO & COMPANY, INC.
6201 15th Avenue
Brooklyn, NY 11219
Telephone: (800) 591-8236
About Studio Movie Grill
Studio Movie Grill and its affiliates operate a chain of movie
theatres that include full-service dining during the show. Studio
Movie Grill is based in Dallas and runs 33 theater-restaurants.
Studio Movie Grill Holdings, LLC, and its affiliates sought Chapter
11 protection (Bankr. N.D. Tex., Case No. 20-32633) on Oct. 23,
2020. Studio Movie Grill was estimated to have $50 million to $100
million in assets and $100 million to $500 million in liabilities.
The Hon. Stacey G. Jernigan is the case judge. The Law Offices of
Frank J. Wright, PLLC is the Debtors' counsel.
STUDIO MOVIE: Seeks to Hire Frank J. Wright as Legal Counsel
------------------------------------------------------------
Studio Movie Grill Holdings, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the Northern District of Texas
to hire the Law Offices of Frank J. Wright, PLLC as their legal
counsel.
The firm will provide the following services:
A. advise the Debtors of their nghts, obligations, and powers
in these Chapter 11 cases;
B. attend meetings and negotiate with representatives of
creditors and other parties in interest;
C. assist the Debtors in the preparation of all administrative
documents required to be filed or prepared herein, and prepare
legal documents required;
D. assist the Debtors in obtaining court approval for use of
cash collateral and other negotiations with secured creditors;
E. take such action as is necessary to preserve and protect
the Debtors' assets and interests;
F. advise the Debtors in connection with any potential sale of
assets or other disposition of their estates' assets;
G. assist the Debtors in the formulation of a disclosure
statement and in the formulation, confirmation, and consummation of
a plan of liquidation or reorganization;
H. appear before the court;
I. consult with the Debtors regarding tax matters; and
J. perform any and all other legal services for the Debtors.
The firm will be paid at hourly rates as follows:
Frank J. Wright $750
Associates $400-$450
Frank J. Wright Esq. disclosed in court filings that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Frank J. Wright, Esq.
Law Offices of Frank J. Wright, PLLC
2323 Ross Ave., Suite 730
Dallas, TX 75201
Telephone: (214) 935-9100
About Studio Movie Grill
Studio Movie Grill and its affiliates operate a chain of movie
theatres that include full-service dining during the show. Studio
Movie Grill is based in Dallas and runs 33 theater-restaurants.
Studio Movie Grill Holdings, LLC, and its affiliates sought Chapter
11 protection (Bankr. N.D. Tex., Case No. 20-32633) on Oct. 23,
2020. Studio Movie Grill was estimated to have $50 million to $100
million in assets and $100 million to $500 million in liabilities.
The Hon. Stacey G. Jernigan is the case judge.
The Law Offices of Frank J. Wright, PLLC is the Debtors' counsel.
STUDIO MOVIE: Seeks to Hire Keen Summit as Real Estate Advisor
--------------------------------------------------------------
Studio Movie Grill Holdings, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the Northern District of Texas
to hire Keen-Summit Capital Partners as their real estate advisor.
The firm will provide the Debtors real estate expertise and
advisement with respect to their existing commercial leases in
connection with the Chapter 11 cases.
The firm's fee structure are as follows:
(i) "Advisory Fee": $50,000 (which the Debtors paid
pre-petition).
(ii) "Lease Modification Transaction Fee":
(a) Transaction Fee: On the Lease Modification Agreement
Date, Keen shall have earned, on a per Property basis, 25 percent
of the amount that is $2,500 plus six percent of "Savings." The
remaining 75 percent will be earned and payable upon the assumption
of the Lease Modification as approved by the court, whether
assigned to an asset purchaser or as part of a plan of
reorganization.
(b) Non-Monetary Value.
(1) For a rent deferral, Keen shall have earned and
Debtors shall pay a fee of 25 percent of the amount that is $2,500
plus 3 percent of the deferred amount per property. After
negotiating a rent deferral, if Keen is asked to negotiate further
rent deferrals, then upon the successful completion of each
additional Lease Modification Agreement, Keen shall have earned an
additional fee of 3 percent of the additional deferred amount. The
remaining 75 percent will be earned and payable upon the assumption
of the Lease Modification as approved by the court, whether
assigned to an asset purchaser or as part of a plan of
reorganization.
(2) For a lease modification that results in "rent as
a percentage of sales" to be paid to the landlord, then Keen shall
have earned 25 percent of the amount that is 6 percent of the
Savings. Keen shall be paid 25 percent of the amount that
constitutes a 3 percent advance against estimated savings subject
to a year-end true-up for all such modifications. The remaining 75
percent of the advance will be earned and payable upon the
assumption of the Lease Modification as approved by the court,
whether assigned to an asset purchaser or as part of a plan of
reorganization.
(iii) "Expenses":
Company shall be responsible for all of Keen's
out-of-pocket expenses (including, without limitation, travel,
lodging, FedEx, photocopying charges, approved out of pocket
marketing costs and expenses, and the reasonable fees and expenses
of counsel) incurred by Keen pursuant to its engagement hereunder.
Matthew Bordwin, managing director at Keen Summit, disclosed in
court filings that his firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Matthew Bordwin
Keen-Summit Capital Partners
1 Huntington Quadrangle, Suite 2C04
Melville, NY 11747
Telephone: (646) 381-9202
E-mail: mbordwin@keen-summit.com
About Studio Movie Grill
Studio Movie Grill and its affiliates operate a chain of movie
theatres that include full-service dining during the show. Studio
Movie Grill is based in Dallas and runs 33 theater-restaurants.
Studio Movie Grill Holdings, LLC, and its affiliates sought Chapter
11 protection (Bankr. N.D. Tex., Case No. 20-32633) on Oct. 23,
2020. Studio Movie Grill was estimated to have $50 million to $100
million in assets and $100 million to $500 million in liabilities.
The Hon. Stacey G. Jernigan is the case judge.
The Law Offices of Frank J. Wright, PLLC is the Debtors' counsel.
STUDIO MOVIE: Seeks to Hire Ordinary Course Professionals
---------------------------------------------------------
Studio Movie Grill Holdings, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the Northern District of Texas
to hire professionals used in the ordinary course of business.
The ordinary course professionals, their addresses, and their type
of services are as follows:
Baker Tilly
PO Box 72975, Milwaukee WI 53278
-- Federal & State tax returns, Annual Audit, 401(k) Audit
Ryan & Co
PO Box 848351, Dallas, TX 75284
-- Property tax negotiations; sales tax audit help
Marsh & McLennan
PO Box 9496, New York, NY 10087
-- Benefit Management
Ogietree Deakins
PO Box 167, Greenville, SC 29602
-- Employee litigation
Bell Nunnally
2323 Ross Ave, Ste 1900, Dallas, TX 75201
-- General litigation work; corporate work
Nexsen Pruet
PO Box 2426, Columbia, SC 29202
-- Liquor license work
Martin Frost
3345 Bee Cave Rd., Ste 105, Austin, TX 78746
-- Texas liquor license work
Parker Milliken
555 South Flower St, 30th Floor, Los Angeles, CA 90071
-- Bakersfield Panterra Lawsuit and Citrus Heights Lawsuit
Rutledge Ecenia
PO Box $51, Tallahassee, FL 32302
-- Floriday liquor license attorney
Mozley Finlayson
1050 Crown Pointe Parkway, Ste 1500, Atlanta, GA 30339
-- Marietta Lease Default - GA Representation
Flaherty & Ohara
610 Smithfield St, Ste 300, Pittsburgh, PA 15222
-- Willow Grove Liquor License attorney
Larsson & Scheu
1500 Market St, Ste 3510, Philadeiphia, PA 19102
-- Liquor Iicense work for multiple properties
Lynn Pinker Cox
2100 Ross Ave, Ste 2700, Dallas, TX 75201
-- AT&T Matter and mediation
Curley Hurtgen
2000 Mark St, Ste 2850, Philadelphia, PA 19103
-- Santee future development
Coren O'Conner
1650 Market St, Ste 2800, Philadelphia, PA 19103
-- Virginia Liquor License Attorney
Sard & Leff
3789 Roswell Ad, Atlanta, GA 30342
-- Northpoint Liquor License Attorney
Jackson Lewis
1133 Westchester Ave, Ste s125, West Harrison, NY 10604
-- Employee insurance claim in Illinois
Anthanassious Law Office
5181 Winding Way, Vacaville, CA 95688
-- Legal Settlement - Employee attorney
Locke Lord
111 South Wacker Dr, Chicago, IL 60606
-- Illinois legal issue
Lawyers for Justice
410 West Arden Ave., Ste 203, Glendele, CA 91203
-- Legal Settlement - Employee attorney
Husch Blackwell
PO Box 790379 St. Louis, MO 63179
-- College Station Midway lawsuit
Goldfarb & Fleece
560 Lexington Ave, 6th Floor, New York, NY 10022
-- Lease Negotiations - COVID
Cochran Davis
36 Malaga Cove Plaza, Palos Verdes Estates, CA 90274
-- Legal representative for employee lawsuit
Law Office of Joseph R Manning
20062 SW Birch St, Ste 200, Newport Beach, CA 92660
-- Legal Settlement - Employee attorney
Parker Poe
401 S. Tryon St., Ste 3000, Charlotte, NC 28202
-- Prosperity General Contractor lawsuit - NC Rep
American Arbitration
120 Broadway, 21st Floor, New York, NY 10271
-- Citrus Heights & Panterra Mediations
Drinker Biddle
1717 Main St, Ste 5400, Dallas, TX 75201
-- 401(k) Legal work for transition and audits
Faegre Drinker
1717 Main St., Ste 5400, Dallas, TX 75201
-- 401(k) Legal work for transition and audits
Penman & Associates
150 N Michigan Ave, Ste 800, Chicago, IL 60601
-- Legal Settlement - Employee attorney
Adams & Adams
PO Box 1014, Pretoria, South Africa 0001
-- South Africa trademark work
Law Office of Stephen K Yungblut
PO Box 822325, Dallas, TX 75231
-- Panterra mediation for Bakersfield
Webster Powell
323 West Ohio, Ste 501, Chicago, IL 60654
-- Illinois liquor license attorney
Watts & Browning
1180 Bells Ferry Rd, Marietta, GA 30066
-- Northpoint legal work pre construction
Burch & Cracchiolo
PO Box 16882, Phoenix, AZ 85011
-- Scottsdale legal fees
McKean Law Firm
9105 East 56th St, Ste 317, Indianapolis, IN 46216
-- Indiana liquor license attorney
Robyn Gregory
9314 Woodgrove Dr., Dallas, TX 75218
-- Website Changes
Matthew Clay
5250 Old Haven Court, Cumming, GA 30041
-- Recruitment for Prosperity Opening
Stagen
3535 Travis St, Ste 100, Dallas, TX 75204
-- Executive Coach
Agile Bronco
0621 Arbor Creek, McKinney, TX 75072
-- Marketing Consultant
TEK Systems
PO Box 198568, Atlanta, GA 30384
-- IT Temporary Work
Melba Stevens
7051 Chipperton Dr, Dallas, TX 75225
-- Payroll implementation/ HR Audit help
MRD Consulting
3911 Stockton Lane, Dallas, TX 75287
-- NovaTime and Isolved implementation; acting Payroll Mgr
Christi Key
6502 Sondra Dr, Dallas, TX 75214
-- Accounting consultant
Rachel Weber
9600 Colt Rd, #1212, Plano, TX 75025
-- Design work (former EE)
Lynn McQuaker
3136 San Simeon Way, Plano, TX 75023
-- PR work (former EE)
The Prenner Group
11333 Moorpark St., Ste 374, Studio City, CA 91602
-- PR consulting
Brian Wing
5619 Ridgetown Circle, Dallas, TX 75230
-- Interim CFO
William Daniels
2328 Stadium Dr, Fort Worth, TX 76109
-- Interim CFO
The professionals neither hold nor represent any interest adverse
to the Debtors and their estate, according to court filings.
About Studio Movie Grill
Studio Movie Grill and its affiliates operate a chain of movie
theatres that include full-service dining during the show. Studio
Movie Grill is based in Dallas and runs 33 theater-restaurants.
Studio Movie Grill Holdings, LLC, and its affiliates sought Chapter
11 protection (Bankr. N.D. Tex., Case No. 20-32633) on Oct. 23,
2020. Studio Movie Grill was estimated to have $50 million to $100
million in assets and $100 million to $500 million in liabilities.
The Hon. Stacey G. Jernigan is the case judge.
The Law Offices of Frank J. Wright, PLLC is the Debtors' counsel.
SUPPERTIME INC: Court Confirms Reorganization Plan
--------------------------------------------------
Suppertime, Inc., d/b/a Hurricane Cafe, has won approval of its
Plan of Reorganization.
In September, the Court preliminarily approved the Disclosure
Statement and set a hearing for Oct. 27, 2020 to consider
confirmation of the Plan.
Following the hearing Judge Mindy A. Mora ruled that
* The Disclosure Statement including any amendments via
interlineations filed therewith is APPROVED; and
* The Plan of Reorganization including any amendments via
interlineationsfiled therewith is CONFIRMED.
Class 1 is amended herein by interlineation to reflect that the
claim is unimpaired.
The Court will conduct a post-confirmation status conference on
December 15, 2020 at 1:30 p.m. in the U.S. Bankruptcy Court, 1515
N.Flagler Drive,Courtroom A, West Palm Beach, Florida 33401.
A copy of the Plan Confirmation Order is available at:
https://www.pacermonitor.com/view/BDEVP4I/Suppertime_Inc__flsbke-19-25666__0153.0.pdf
About Suppertime Inc.
Suppertime, Inc., operates as a restaurant known as Hurricane Cafe,
which is located in Juno Beach, Florida. Suppertime sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Fla. Case No. 19-25666) on Nov. 20, 2019. The petition was signed
by G. Scott Philip, president. At the time of the filing, Debtor
was estimated to have assets under $100,000 and less than $1
million in debts.
The case has been reassigned to Judge Mindy A. Mora after Judge
Erik P. Kimball was removed from the case.
The Debtor is represented by Craig I. Kelley, Esq. at Kelley,
Fulton & Kaplan, P.L.
SUPPERTIME INC: Unsecureds Owed $1.02M to Get $15K in 5 Years
-------------------------------------------------------------
Suppertime, Inc. d/b/a Hurricane Cafe, filed with the U.S.
Bankruptcy Court for the Southern District of Florida, West Palm
Beach Division, a Plan of Reorganization and a corresponding
Disclosure Statement on September 15, 2020.
The general unsecured claims total the amount of $1,019,266, which
will be paid over the five year term of the Plan at the rate of
$750 per quarter on a pro rata basis. Nothing herein shall prohibit
the Debtor from paying these creditors sooner than the five-year
period. To the extent that the Debtor is successful or unsuccessful
in any or all of the proposed objections, then the dividend and
distribution to each individual creditor will be adjusted
accordingly. These claims are impaired.
There shall be no distribution to the equity holder, Gordon Scott
Phillip under the confirmed Plan and no dividends to this class of
claimants. The equity shareholders shall retain their currently
held equity interest. This claim is impaired.
A possible risk includes the possibility of a loss or decrease of
income. As with any similar situation, there is always the risk
that the Debtor may not perform as forecasted, but the Debtor
firmly believes that the projections for its future income and
expenses are conservative and reasonable.
The payments to be made pursuant to the Plan by the Debtor shall be
in full settlement and satisfaction of all claims against the
Debtor. The payments of new value contributions and other
post-bankruptcy contributions by the principal of the Debtor, as
necessary to fund operations, shall be in full settlement and
satisfaction of all claims against the principal/shareholder of the
Debtor.
A full-text copy of the Disclosure Statement dated September 15,
2020, is available at https://tinyurl.com/y5wlm7gy from
PacerMonitor.com at no charge.
The Debtor is represented by:
Dana Kaplan, Esquire
Florida Bar No.: 44315
KELLEY, FULTON & KAPLAN, P.L.
1665 Palm Beach Lakes Blvd.
The Forum - Suite 1000
West Palm Beach, Florida 33401
Telephone: (561) 491-1200
Facsimile: (561) 684-3773
About Suppertime Inc.
Suppertime, Inc., operates as a restaurant known as Hurricane Cafe,
which is located in Juno Beach, Florida. Suppertime sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Fla. Case No. 19-25666) on Nov. 20, 2019. The petition was signed
by G. Scott Philip, president. At the time of the filing, Debtor
was estimated to have assets under $100,000 and less than $1
million in debts.
The case has been reassigned to Judge Mindy A. Mora after Judge
Erik P. Kimball was removed from the case.
The Debtor is represented by Craig I. Kelley, Esq. at Kelley,
Fulton & Kaplan, P.L.
SYNCHRONOSS TECHNOLOGIES: Incurs $15.4-Mil. Net Loss in 3rd Quarter
-------------------------------------------------------------------
Synchronoss Technologies, Inc., filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss attributable to the company of $15.37 million on $68.64
million of net revenues for the three months ended Sept. 30, 2020,
compared to a net loss attributable to the company of $69.43
million on $52.21 million of net revenues for the three months
ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss attributable to the company of $37.79 million on $222.29
million of net revenues compared to a net loss attributable to the
company of $122.05 million on $218.16 million of net revenues for
the nine months ended Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $498.57 million in total
assets, $132.88 million in total current liabilities, $2.56 million
in deferred tax liabilities, $17.52 million in deferred revenues
(non-current), $48.78 million in non-current leases, $3.21 million
in other non-current liabilities, $12.50 million in redeemable
noncontrolling interest, $227.86 million in series A convertible
participating perpetual preferred stock, $53.25 million in total
stockholders' equity.
"We are taking a pragmatic approach to the business by focusing our
resources on lines of business that are generating the highest
return for shareholders and have the most potential for future
growth and profitability. Despite the recent leadership change, we
haven't lost a step as an organization and we continue to execute
and build momentum, including renewing our largest cloud client,
Verizon, to a five-year contract extension. Our teams have deep
relationships with our customers, and we look forward to building
on that strength by expanding those relationships and adding new
ones. Our improved adjusted EBITDA for the third quarter highlights
our sharpened focus on increasing our profitability and cash flow
going forward."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1131554/000113155420000088/sncr-20200930.htm
About Synchronoss Technologies
Synchronoss -- http://www.synchronoss.com/-- transforms the way
companies create new revenue, reduce costs and delight their
subscribers with cloud, messaging, digital and IoT products,
supporting hundreds of millions of subscribers across the globe.
Synchronoss' secure, scalable and groundbreaking new technologies,
trusted partnerships, and talented people change the way TMT
customers grow their businesses.
Synchronoss reported a net loss attributable to the company of
$136.73 million for the year ended Dec. 31, 2019, a net loss
attributable to the company of $243.75 million for the year ended
Dec. 31, 2018, and a net loss attributable to the company of
$109.44 million for the year ended Dec. 31, 2017.
TEMERITY TRUST: Agrees Disclosures Not Yet Ready for Approval
-------------------------------------------------------------
Temerity Trust Management, LLC, a/k/a Temerity Management, LLC,
said in an Oct. 20, 2020 filing that it agrees with claims by Cairn
Capital Investment Funds ICVA that the Debtor's Disclosure
Statement is not yet ready for approval.
The Debtor said that negotiations for financing have not progressed
to the point where soliciting votes on a plan would be appropriate.
Given that nature of the Debtor's efforts to obtain financing, the
Debtor has determined to sell the primary asset of the estate, the
home in Beverly Hills (the "Beverly Hills Property"). For this
reason, the Debtor requests that the Court continue the hearing on
the disclosure for approximately two months.
Cairn Capital has filed an objection to the motion for approval of
the Disclosure Statement explaining the Debtor's Second Amended
Plan of Reorganization dated Sept. 15, 2020.
The Debtor responded to certain issues raised by Cairn.
"The Debtor's subsidiaries both before and during this bankruptcy
case have been receiving significant payments with respect to
accounts receivable generated by the film Serenity. The
receivables are subject to Cairn Capital’s liens and are
currently being collected directly by Cairn Capital. Combined with
the significant value in the residence, Cairn is fully and
adequately protected by a significant equity cushion," the Debtor
said.
The Debtor also acknowledged a criminal asset forfeiture proceeding
pending against the spouse of the owner of the Debtor, but noted
that the lis pendens has no effect on the Debtor's property.
"The United States Attorney for the Southern District of New York
earlier this week recorded a lis pendens with respect to a criminal
asset forfeiture proceeding pending against William Sadleir, the
spouse of the owner of the Debtor. The lis pendens identifies the
Beverly Hills Property as the property that is subject to the
asset forfeiture proceeding against Mr. Sadleir. The criminal
indictment is limited to seeking forfeiture of Mr. Sadleir's
interest in the property. Mr. Sadler has no such interest. The
property is owned solely by the Debtor, which in turn owned solely
by Ms. Kadadu as her separate property. Ms. Kadadu’s ownership
interests in the Debtor were placed in an estate planning trust,
but her ownership interest in the Debtor retained its character as
her sole separate property while held in the trust. The lis
pendens, therefore, has no effect on the Debtor's interest in the
property and the Debtor’s ability to sell the property," the
Debtor said.
To recall, the Debtor's Plan contemplates, among other things, the
Debtor marketing and selling the Beverly Hills Residence to obtain
funds to pay its creditors.
About Temerity Trust Management
Temerity Trust Management, LLC, based in Beverly Hills, CA, filed a
Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-15015) on June 1,
2020. In the petition signed by William K. Sadleir, manager, the
Debtor was estimated to have $10 million to $50 million in both
assets and liabilities. The Hon. Barry Russell oversees the case.
Kurt Ramlo, at Levene Neale Bender Yoo & Brill L.L.P., serves as
bankruptcy counsel to the Debtor.
TEXAS STUDENT HOUSING: S&P Lowers 2001A Bond Rating to 'CCC'
------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'CCC' from 'B'
on the Texas Student Housing Corp.'s (TSHC) series 2001A housing
revenue bonds. These bonds were issued for the University of North
Texas (UNT) Denton student housing project. The outlook is
negative.
"The downgrade and negative outlook reflect our view of the
project's continued weak and speculative business fundamentals that
have been further amplified by the COVID-19 pandemic and its impact
on occupancy during fiscal year 2021," said S&P Global Ratings
credit analyst Phillip Pena. As of fall 2020, occupancy is 73.5%
relative to a required breakeven occupancy of 92.5%; occupancy
pressure in fall 2020 is a direct result of COVID-19. The previous
year's occupancy averaged about 96% in fall 2019 and 95% in spring
2020. S&P believes the below-average occupancy in fall 2020 will
ultimately cause the project to draw on its already underfunded
debt service reserve ($1.7 million of $2.4 million required as of
fiscal 2020) to meet debt service coverage (DSC) for fiscal 2021.
S&P anticipates further pressure, including a potential default
could occur as early as fiscal 2022 should occupancy remain weak or
the housing corporation experiences further pressure.
The negative outlook reflects S&P's view that it is highly likely
the project will continue to generate weaker rental revenues due to
pressured occupancy, and that management will need to draw on the
debt service reserve (DSR) for fiscal 2021, and will remain in
technical default with DSC below 1.25x. The outlook further
reflects S&P's belief that there could be potential default in
fiscal 2022 should occupancy see further pressure. S&P believes all
projects in the sector are facing negative economic or fundamental
business conditions that could result in downgrades over the next
two years. In addition, the negative outlook reflects expected
challenges facing the industry due to a sudden and potentially
prolonged decline in student housing occupancy and the associated
loss of rental revenue, because many colleges and universities have
transitioned to remote learning from in-person learning. In S&P's
opinion, the project's financial operation is not sustainable in
the short term given the project's reserve levels, reliance on
draws from the DSR in fiscal 2021, history of technical default,
and lack of external support in the event DSC falls below 1.0x. If
occupancy levels do not return to pre-pandemic levels following
fiscal 2021, S&P could lower the rating further.
The downgrade reflects S&P's opinion of the operating pressure that
the project faces due to the likelihood of the projected loss of
rental revenue, as occupancy levels have declined for fall 2020 in
response to the COVID-19 pandemic. S&P views the risks posed by
COVID-19 to public health and safety as a social risk under its ESG
factors. Despite the elevated social risk, S&P believes the
project's environmental and governance risk are in line with its
view of the sector as a whole.
S&P anticipates the project will remain in technical default (DSC
below 1.25x and underfunded DSRF) in fiscal 2021, however, the
rating agency could lower the rating if it believes the project is
beginning to approach default. It would view a lack of DSC at or
above 1.0x in fiscal 2021, or a draw on reserves as pressuring
credit factors. In S&P's view, the project will likely not
replenish reserves given historical underfunding of the DSR for
much of the project's history. Finally, should occupancy see
further declines from current levels in fiscal 2022 S&P could
consider a negative rating action.
While unlikely in the near term, S&P could revise the outlook to
stable if the project sustains solid occupancy and cash flows
sufficient to meet DSC of 1.0x or greater, including debt service
payments on an ongoing basis.
TRONOX LIMITED: Egan-Jones Hikes Sr. Unsec. Debt Ratings to CCC
---------------------------------------------------------------
Egan-Jones Ratings Company, on November 3, 2020, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Tronox Limited to CCC from CCC-.
Headquartered in Stamford, Connecticut, Tronox Limited operates
mining and inorganic chemical businesses.
TUPPERWARE BRANDS: Egan-Jones Hikes Sr. Unsecured Debt Ratings to B
-------------------------------------------------------------------
Egan-Jones Ratings Company, on November 6, 2020, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Tupperware Brands Corporation to B from B-.
Headquartered in Orlando, Florida, Tupperware Brands Corporation is
a portfolio of global direct selling companies that sell products
across multiple brands and categories through an independent sales
force.
UNITED EQUITABLE: A.M. Best Affirms C++ Financial Strength Rating
-----------------------------------------------------------------
AM Best has revised the outlooks to negative from stable and
affirmed the Financial Strength Rating (FSR) of C++ (Marginal) and
the Long-Term Issuer Credit Rating (Long-Term ICR) of "b" for
United Equitable Insurance Company (United Equitable).
Concurrently, AM Best has revised the outlook to negative from
stable for the Long-Term ICR and affirmed the FSR of C- (Weak) and
the Long-Term ICR of "ccc-" of American Heartland Insurance Company
(American Heartland). The outlook for the FSR is stable. Both
companies are headquartered in Morton Grove, IL.
The Credit Ratings (ratings) of United Equitable reflect its
balance sheet strength, which AM Best categorizes as weak, as well
as its adequate operating performance, limited business profile and
marginal enterprise risk management (ERM).
The ratings of American Heartland reflect its balance sheet
strength, which AM Best categorizes as very weak, as well as its
adequate operating performance, limited business profile and
marginal ERM.
The revised outlooks to negative from stable for United Equitable
and the revised Long-Term ICR outlook for American Heartland are
based on continued pressure on their balance sheet strength
assessments through third-quarter 2020, driven by significant
recent growth and equity market volatility. Risk-adjusted
capitalization, as measured by Best's Capital Adequacy Ratio
(BCAR), has declined to the lower end of the weak range for both
companies. The stable FSR outlook for American Heartland is based
on AM Best's expectation that the company's operating performance
will remain adequate over the intermediate-term, supported by its
prudent underwriting practices.
UNLOCKD MEDIA: Plan Exclusivity Extended Thru December 18
---------------------------------------------------------
The Honorable James L. Garrity, Jr. of the U.S. Bankruptcy Court
for the Southern District of New York extended (i) the time for
Unlockd Media Inc. and Unlockd Operations US Inc. to confirm their
chapter 11 plan through and including December 18, 2020. Judge
Garrity also said the Debtors' exclusive period to confirm a plan
is extended through and including December 18.
On the eve of the Unlockd Limited f/k/a Unlockd Media Pty. Ltd's
proposed public offering in 2018, Google, whose Google Play Store
and ADMob advertising networks carried the majority of the Unlockd
family's advertising, announced it was removing the Unlockd app
from the Google Play Store and the ADMob advertising network. This
was a devastating blow to Unlockd and its subsidiaries, including
Debtors.
The Debtors believed Google's removal of Unlockd from the Google
Play Store and the ADMob advertising network was done for an
illegitimate purpose in an attempt to try to bury a potential
advertising giant and competitor, in violation of various laws
concerning competition and trade monopolies, including United
States antitrust laws. Unlockd sued Google in both Australia and
Great Britain seeking to enjoin Google from removing the Unlockd
apps from the Google platforms and was successful.
In their fifth motion to extend time, the Debtors said they were
preparing to sue Google in the United States, which cause of action
is the Debtors' primary asset. The Debtors, with their counsel,
Mayerson & Hartheimer, PLLC, have made significant progress on
moving the prospective litigation forward. Counsel for the Debtors
has met in person with Matthew Berriman, the Director of Unlockd.
At this meeting, Berriman and counsel for the Debtors developed a
litigation strategy and a plan of action. The Debtors' counsel has
also received access to data rooms, containing hundreds of
documents, prepared by Unlockd's U.K. and Australian counsel.
The Debtors' counsel has also conducted legal research as to
bringing their antitrust claims against Google in the United
States. Upon review of the documents and their legal research,
Mayerson prepared an extensive memorandum which was used to attract
litigation financing and/or Special Counsel that would work on the
litigation. But when the Debtors engaged Boise Schiller Flexner
("BSF") as special counsel, on September 9, 2020, due to internal
issues and personnel changes, the BSF inform the Debtor's counsel
that they no longer wished to act as a special counsel and caused a
significant setback for the Debtor's matter. In addition to seeking
replacement special counsel, the Debtors also resumed their search
for litigation financing.
The Debtors said they will use the additional time to accomplish
the following:
(i) continue to develop their litigation strategy to ensure
the plan is viable, including, without limitation, against Google
which includes, locating and securing Special Antitrust Counsel and
the trustee, and continuing to seek litigation financing;
(ii) solicit acceptances of the plan through a Court-approved
process; and
(iii) continue to collect receivables.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/2IOZCV3 at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/31y0GmK at no extra charge.
About Unlockd Media Inc.
and Unlockd Operations US Inc.
Unlockd Media Inc. -- https://unlockd.com/ -- is a company that
offers Unlockd a mobile platform that rewards consumers when they
unlock their digital device and view targeted ads, content, or
offers.
Unlockd Media and its affiliate Unlockd Operations US Inc. sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Case Nos. 18-13243 and 18-13248) on Oct. 26, 2018. At the time of
the filing, each Debtor estimated assets of less than $500,000 and
liabilities of $1 million to $10 million.
The cases have been assigned to the Honorable James L. Garrity,
Jr.
The Debtors are represented by Sandra E. Mayerson, Esq., and David
H. Hartheimer, Esq., at Mayerson & Hartheimer, PLLC.
On December 9, 2019, the Debtors filed the Amended Small Business
Debtors' Combined Plan of Liquidation and Disclosure Statement. On
January 29, 2020, the Debtors filed the Second Amended Small
Business Debtors' Combined Plan of Liquidation and Disclosure
Statement.
On February 5, 2020, a hearing was held on the Debtors' Combined
Plan and Disclosure Statement Motion. The Court approved the
Debtors' request to file a combined disclosure statement and plan,
subject to entry of an Order.
A full-text copy of the Amended Combined Plan of Liquidation and
Disclosure Statement dated January 29, 2020, is available at
https://tinyurl.com/s4vxdke from PacerMonitor.com at no charge.
URBAN ONE: Reports $12.8-Mil. Consolidated Net Loss for 3rd Quarter
-------------------------------------------------------------------
Urban One, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a consolidated net
loss attributable to common stockholders of $12.77 million on
$91.91 million of net revenue for the three months ended Sept. 30,
2020, compared to consolidated net income attributable to common
stockholders of $5.36 million on $111.05 million of net revenue for
the three months ended Sept. 30, 2019.
For the nine months ended Sept. 30, 2020, the Company reported a
net loss attributable to common stockholders of $34.54 million on
$262.79 million of net revenue compared to consolidated net income
attributable to common stockholders of $8.85 million on $331.07
million of net revenue for the nine months ended Sept. 30, 2019.
As of Sept. 30, 2020, the Company had $1.21 billion in total
assets, $1.03 billion in total liabilities, $11.12 million in
redeemable noncontrolling interests, and $162.45 million in total
stockholders' equity.
The Company said, "Given the expected continued decreases in
revenues caused by the COVID-19 pandemic, we assessed our
operations considering a variety of factors, including but not
limited to, media industry financial reforecasts for 2020, expected
operating results, estimated net cash flows from operations, future
obligations and liquidity, capital expenditure commitments and
projected debt covenant compliance. If the Company were unable to
meet its financial covenants, an event of default would occur and
the Company's debt would have to be classified as current, which
the Company would be unable to repay if lenders were to call the
debt.
We concluded that the potential that the Company could incur
considerable decreases in operating profits and the resulting
impact on the Company's ability to meet its debt service
obligations and debt covenants were probable conditions giving rise
to assess whether substantial doubt existed over the Company's
ability to continue as a going concern.
"As a result, during the third quarter of 2020, the Company
performed a complete reforecast of its 2020 anticipated results
extending through one year from the date of issuance of the
consolidated financial statements. In reforecasting its results,
the Company considered the offsetting impact of certain of
cost-cutting measures including furloughs, layoffs, salary
reductions, other expense reduction (including eliminating travel
and entertainment expenses), eliminating discretionary bonuses and
merit raises, decreasing or deferring marketing spend, deferring
programming/production costs, reducing special events costs, and
implementing a hiring freeze on open positions."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/Archives/edgar/data/1041657/000110465920123917/tm2029657-1_10q.htm
About Urban One
Urban One, Inc. (urban1.com), together with its subsidiaries, is a
diversified media company that primarily targets Black Americans
and urban consumers in the United States. The Company owns TV One,
LLC (tvone.tv), a television network serving more than 59 million
households, offering a broad range of original programming, classic
series and movies designed to entertain, inform and inspire a
diverse audience of adult Black viewers. As of June 2020, Urban
One currently owns and/or operates 61 broadcast stations (including
all HD stations, translator stations and the low power television
stations it operates) branded under the tradename "Radio One" in 14
urban markets in the United States. Through its controlling
interest in Reach Media, Inc. (blackamericaweb.com), the Company
also operates syndicated programming including the Rickey Smiley
Morning Show, the Russ Parr Morning Show and the DL Hughley Show.
In addition to its radio and television broadcast assets, Urban One
owns iOne Digital (ionedigital.com), its wholly owned digital
platform serving the African-American community through social
content, news, information, and entertainment websites, including
its Cassius, Bossip, HipHopWired and MadameNoire digital platforms
and brands. The Company also has invested in a minority ownership
interest in MGM National Harbor, a gaming resort located in Prince
George's County, Maryland.
As of June 30, 2020, the Company had $1.21 billion in total assets,
$1.04 billion in total liabilities, $10.80 million in redeemable
noncontrolling interests, and $159.46 million in total
stockholders' equity.
* * *
As reported by the TCR on April 22, 2020, S&P Global Ratings
lowered its issuer credit rating on Urban One Inc. to 'CCC' from
'B-'. The outlook is negative. "The negative outlook reflects our
view that Urban One could breach its covenants in 2020 as economic
weakness from the COVID-19 outbreak reduces advertising revenue and
elevates leverage. The negative outlook also reflects refinancing
risk associated with the company's senior secured notes due April
2022 and the springing maturity of its senior secured term loan in
January 2022. If the company does not refinance these maturities
over the next year, it might be unable to obtain a clean auditor's
opinion when filing its 10-K in March 2021," S&P said.
WAGLER MANUFACTURING: Taps Culver & Garrity as Financial Accountant
-------------------------------------------------------------------
Wagler Manufacturing, Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Iowa to hire Culver & Garrity,
CPA, P.C. as its financial accountant.
The firm will provide the following services:
a. prepare monthly accounting reports for the administration
of the case;
b. advise the Debtor as to its tax obligations, duties, and
financial responsibility as Debtor;
c. prepare income tax returns as needed by the Debtor during
the pendency of the Chapter 11 case; and
d. advise and assist the Debtor and counsel in the formation
and preservation of a plan pursuant to Chapter 11 of the Bankruptcy
Code, support to maximize the value of the estate's assets in the
course of the restructuring, and any and all matters.
The firm's current bookkeeping rate is $75 to $130 per hour. The
current rate for tax return filings is a flat fee rate that
fluctuates based on the number of schedules required to be filed,
but is approximately $750 per return per entity based on the
Debtor's current needs.
Sonja Christen, an accountant at Culver & Garrity, 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:
Sonja Christen
Culver & Garrity, CPA, P.C.
2451 Coral Court, Suite 4
Coralville, IA 52241
Telephone: (319) 545-4829
About Wagler Manufacturing
Wagler Manufacturing, Inc., based in Wayland, IA, filed a Chapter
11 petition (Bankr. N.D. Iowa Case No. 20-01069) on Sept. 10, 2020.
In the petition signed by Curtis D. Wagler, president, the Debtor
was estimated $1 million to $10 million in both assets and
liabilities.
Beecher Field Walker Morris Hoffman & Johnson, P.C., serves as
bankruptcy counsel to the Debtor.
WESTON INSURANCE: A.M. Best Affirms B(Fair) Fin. Strength Rating
----------------------------------------------------------------
AM Best has affirmed the Financial Strength Rating of B (Fair) and
the Long-Term Issuer Credit Rating of "bb" of Weston Insurance
Company (Weston) (Coral Gables, FL). The outlook of these Credit
Ratings (ratings) is negative. Concurrently, AM Best has withdrawn
these ratings as the company has requested to no longer participate
in AM Best's interactive rating process.
The ratings reflect Weston's balance sheet strength, which AM Best
categorizes as adequate, as well as its marginal operating
performance, limited business profile and appropriate enterprise
risk management (ERM).
Weston's balance sheet strength assessment of adequate is supported
by its strong, albeit declining, level of risk-adjusted
capitalization, as measured by Best's Capital Adequacy Ratio
(BCAR), along with its conservative investment portfolio, which are
offset by the company's elevated underwriting leverage measures and
a surplus position that has declined in consecutive years. The
ultimate parent, Weston Insurance Holdings Corporation, recently
completed a number of transactions that reduced financial leverage
pressure materially and led to a neutral assessment of the holding
company as it relates to Weston's overall balance sheet strength
assessment. AM Best considers Weston's operating performance to be
marginal, marked by moderate volatility in underwriting results
that rely on ceding commissions to produce returns. AM Best views
the company's business profile as limited, based on its geographic
and product concentration as a property writer predominately in
Florida. AM Best considers Weston's ERM practices to be appropriate
for its risk profile.
The negative outlooks reflect pressure on Weston's balance sheet
strength given the unfavorable trends in its risk-adjusted
capitalization and material surplus erosion in recent years.
Additionally, the negative outlooks reflect concern regarding
Weston's ERM program and its ability to mitigate ongoing pressures
effectively, given the observed increase in retained exposure at
tail events. This concern is highlighted by the hardening
reinsurance market given Weston's business model, which
strategically relies on reinsurance to generate ceding commissions.
[*] Albany's Bankruptcies Decrease During Pandemic
--------------------------------------------------
Michael DeMasi of Albany Business Review reports that corporate,
personal bankruptcies decline in Albany region during pandemic.
Corporate and personal bankruptcies have declined this year in a
wide swath of upstate New York, including Albany, despite the
economic upheaval wrought by the coronavirus pandemic.
There have been seven Chapter 11 federal bankruptcy filings since
January in the 32-county area included in New York's Northern
District, according to court statistics posted online.
Chapter 11 filings are down from the 24 cases filed last year and
25 in 2018.
The high point over the past decade was 2015, when there were 50
filings.
About 3.4 million people live in the district.
Companies that file Chapter 11 are trying to reorganize their
debts, often in an effort to save the business. Others do so to
halt foreclosure proceedings stemming from unpaid taxes or loans.
Robert J. Rock, an attorney at Tully Rinckey PLLC in Albany with
almost 40 years' experience in bankruptcy law, isn't surprised the
caseload declined this year.
Reasons include:
Chapter 11 filings tend to be filed when business have reasons to
be optimistic about the future. Although it sounds
counter-intuitive, Rock said, "They wish to make an effort to save
the business. When they're pessimistic, they close up. The whole
purpose of Chapter 11 is to avoid that result."
In the months leading up to the presidential election there was
uncertainty over who would win, and therefore which policies would
be pursued in terms of mandatory government shutdowns, continued
reopening and additional federal spending to help businesses.
Billions in federal aid that have already been provided to
businesses through low-interest loans, along with federal and state
moratoriums on evictions and mortgage foreclosures. Lenders may
also be reluctant to foreclose because they don't want to take
possession of buildings or equipment that can be difficult to
market and re-sell.
The statistics are helpful to understanding the impact of the
pandemic, but they don't tell the whole story.
"There have been so many things going on, we can't really conclude
anything," Rock said.
Personal bankruptcy filings have also declined.
Year-to-date there have been 3,049 Chapter 7 filings and 747
Chapter 13 filings.
Both are lower than last year's pace for the first 10 months of the
year.
Chapter 7 is for people who cannot afford to repay their debts.
Chapter 13 is for those who have the ability to work out a
repayment plan with debtors, typically banks that loaned money to
purchase a home.
Shawn Moodie, a credit coach and founder of CBM Business Solutions
in Albany, said the pandemic has impacted people in a variety of
ways.
"I've got some people actually starting a business in this
environment," Moodie said. "They’re looking to get access to
business funding. They have a low credit score and want a bank loan
or get a loan to keep the business afloat."
"The other piece is a lot of small business owners I've encountered
are running their business with personal credit, which is very
dangerous. If you’re taking on personal credit card debt and fall
behind, your credit score takes a hit. And now you're in a vicious
cycle," he said.
[*] What Lenders Should Know When Borrowers File Chapter 11
-----------------------------------------------------------
Carmine Castellano, Jessica Chue, Garry Graber, Christian Soller,
James Thoman, and Richard Weisz of Hodgson Russ LLP wrote an
article on JDSupra titled "When a Borrower Files a Chapter 11
Bankruptcy: What Lenders Should Know."
As the effects of COVID-19 and its related government restrictions
continue to be felt across the United States and Canada, businesses
are evaluating how to recover from the economic slowdown. For many
creditors, this involves recovering money or collateral from a
business which has filed for bankruptcy protection. In a previous
alert, related herein, we discussed sales under Article 9 of the
Uniform Commercial Code and the potential for judicial foreclosure
in the event a borrower defaults on its obligations. However, if a
borrower will not consent to a cooperative liquidation by its
lender and seeks to attempt to pursue a sale on its own terms or
restructure, a bankruptcy filing may ensue. Often, this is done
under Chapter 11 of the United States Bankruptcy Code. This alert
discusses several key issues lenders should be aware of at the
outset of a Chapter 11 filing.
The Borrower's Right to the "Automatic Stay"
Because a lender can use its rights to self-help and demand payment
from the borrower's account debtors or set-off the balances in the
borrower's operating and deposit accounts, if they are maintained
by the lender without the need for court intervention, the Lender
can very quickly cut off the borrower's access to cash and,
therefore, its ability to operate. If a lender were to exercise
this remedy, the borrower may file for relief under Chapter 11 to
obtain the benefit of the "automatic stay." The automatic stay,
imposed pursuant to section 362(a) of the Bankruptcy Code, bars any
attempt by the lender to enforce its rights and collect
indebtedness owed by the borrower by prohibiting any commencement
or continuation of any process to recover a claim against the
debtor that arose prior to the bankruptcy filing. This includes any
attempt to obtain possession of the debtor's property, to perfect
or enforce liens against the debtor’s property. A lender's right
of setoff is also stayed. There are exceptions to the stay for
settlement payments for securities contracts, commodity contracts,
forward contracts, repurchase agreements, swaps and other
derivatives which we will not address here. Generally speaking, the
stay enables the borrower more flexibility to attempt to refinance
or self-liquidate. However, the stay is not indefinite.
The Lender's Right to "Adequate Protection"
During the Chapter 11 case, a lender who has a lien on the debtor's
assets is entitled to "adequate protection." Adequate protection is
defined in Section 361 of the Bankruptcy Code and provides for a
debtor to: (1) make a cash payment or payments to the extent the
stay results in a decrease in the value of its collateral; (2)
provide the creditor an additional or replacement lien; or (3)
granting other relief that will result in the "realization" of the
"indubitable equivalent" of the creditor's interest in its
collateral. However, creditors that lack collateral ("unsecured
creditors") are not entitled to adequate protection payments.
Creditors who are undersecured (their collateral is worth less than
the amount of the debt) will only be entitled to "adequate
protection" on the secured portion of their claim to the extent
they can demonstrate the value of their collateral is decreasing.
Only fully secured creditors will be entitled to post-petition
interest. Obviously, valuation of a lender's collateral is the key
to this analysis and a lender may need to provide evidence to the
Court, possibly through the use of expert testimony, in a dispute
regarding valuation of collateral/adequate protection.
The Lender's Access to the Borrower's "Cash Collateral"
Often a lender's security interest will include the debtor's cash
("cash collateral"). A Chapter 11 debtor needs court approval to
use cash collateral following the bankruptcy filing. Typically, the
debtor will file a motion seeking authority to use cash collateral
at the outset of the case. The lender is entitled to adequate
protection of its interest in the cash collateral, which usually
includes the granting of a lien in the cash collateral generated
following the bankruptcy filing. A lender will often use the
debtor's request to use cash collateral as an opportunity to
negotiate for certain rights and concessions from the debtor. If
the debtor and lender cannot agree on adequate protection, then the
Court may hold a hearing and accept evidence from the parties as to
the lender's interest in the cash collateral and the appropriate
adequate protection for the lender. For example, if a lender has an
interest in accounts receivable it may receive a replacement lien
on post-petition receivables. The "replacement lien" is necessary
because section 522 of the Bankruptcy Code cuts off a lender’s
security interest in property acquired by the debtor after the
bankruptcy filing.
The Lender's Ability to Foreclose on Collateral
If a lender seeks to foreclose on its collateral during the Chapter
11 bankruptcy, it must obtain Court approval for terminating the
automatic stay. A lender may make an application to the bankruptcy
court to terminate the stay for "cause." Section 362(d) permits
"any party in interest" to request the stay be terminated "for
cause, including a lack of adequate protection of an interest in
property of the party in interest." While "cause" is not defined in
the Bankruptcy Code, it can be summarized as a balancing of the
harms to both the creditor and the debtor based upon the debtor's
continued use of the lender's collateral. Section 362(d)(2)
provides more specific requirements for terminating the stay. The
stay shall be terminated if: (A) the debtor does not have any
equity in the property securing the debt; and (B) such property is
not necessary for a reorganization of the debtor. Once again, the
value of the collateral is a key component in the court's
determination of whether to terminate the stay.
[^] BOOK REVIEW: Oil Business in Latin America: The Early Years
---------------------------------------------------------------
Author: John D. Wirth Ed.
Publisher: Beard Books
Softcover: 282 pages
List price: $34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at
http://is.gd/DvFouR
This book grew out of a 1981 meeting of the American Historical
Society. It highlights the origin and evolution of the state-owned
petroleum companies in Argentina, Mexico, Brazil, and Venezuela.
Argentina was the first country ever to nationalize its petroleum
industry, and soon it was the norm worldwide, with the notable
exception of the United States. John Wirth calls this phenomenon
"perhaps in our century the oldest and most celebrated of
confrontations between powerful private entities and the state."
The book consists of five case studies and a conclusion, as
follows:
* Jersey Standard and the Politics of Latin American Oil
Production, 1911-30 (Jonathan C. Brown)
* YPF: The Formative Years of Latin America's Pioneer State
Oil Company, 1922-39 (Carl E. Solberg)
* Setting the Brazilian Agenda, 1936-39 (John Wirth)
* Pemex: The Trajectory of National Oil Policy (Esperanza
Duran)
* The Politics of Energy in Venezuela (Edwin Lieuwen)
* The State Companies: A Public Policy Perspective (Alfred
H. Saulniers)
The authors assess the conditions at the time they were writing,
and relate them back to the critical formative years for each of
the companies under review. They also examine the four
interconnecting roles of a state-run oil industry and distinguish
them from those of a private company. First, is the entrepreneurial
role of control, management, and exploitation of a nation's oil
resources. Second, is production for the private industrial sector
at attractive prices. Third, is the integration of plans for
military, financial, and development programs into the overall
industrial policy planning process. Finally, in some countries is
the promotion of social development by subsidizing energy for
consumers and by promoting the government's ideas of social and
labor policy and labor relations.
The author's approach is "conceptual and policy oriented rather
than narrative," but they provide a fascinating look at the
politics and development of the region. Mr. Brown provides a
concise history of the early years of the Standard Oil group and
the effects of its 1911 dissolution on its Latin American
operations, as well as power struggles with competitors and
governments that eventually nationalized most of its activities.
Mr. Solberg covers the many years of internal conflict over oil
policy in Argentina and YPF's lack of monopoly control over all
sectors of the oil industry. Mr. Wirth describes the politics and
individuals behind the privatization of Brazil's oil industry
leading to the creation of Petrobras in 1953. Mr. Duran notes the
wrangling between provinces and central government in the evolution
of Pemex, and in other Latin American countries. Mr. Lieuwin
discusses the mixed blessing that oil has proven for Venezuela,
creating a lopsided economy dependent on the ups and downs of
international markets. Mr. Saunders concludes that many of the
then-current problems of the state oil companies were rooted in
their early and checkered histories." Indeed, he says, "the
problems of the past have endured not because the public petroleum
companies behaved like the public enterprises they are; they have
endured because governments, as public owners, have abdicated their
responsibilities to the companies."
John D. Wirth was Gildred Professor of Latin American Studies at
Stanford University. He died in June 2002 in Toronto.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***