/raid1/www/Hosts/bankrupt/TCR_Public/201224.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, December 24, 2020, Vol. 24, No. 358
Headlines
1 VISION LLC: Seeks to Hire Durrette Arkema as Legal Counsel
3G VENTURE II: Taps Schlueter Mahoney as Legal Counsel
3G VENTURE: Seeks to Hire Cohen & Cohen as Bankruptcy Counsel
99 CENTS: Moody's Assigns Caa1 Rating to New Senior Secured Notes
ABUNDANT LIFE: Court to Confirm No Stay in Effect
AFFINITY GAMING: Moody's Rates New $475MM First Lien Notes 'B3'
AGEMY FAMILY: Gets OK to Hire David W. Steen as Legal Counsel
AKORN OPERATING: Moody's Completes Review, Retains Caa1 CFR
ALVOGEN PHARMA: Moody's Completes Review, Retains B2 CFR
AMERICAN PURCHASING: Gets Interim OK to Hire Claims Agent
AMERICAN PURCHASING: Gets Interim OK to Hire Legal Counsel
AMERICAN PURCHASING: Seeks to Hire CR3 Partners, Appoint CRO
AMNEAL PHARMACEUTICALS: Moody's Completes Review, Retains B3 CFR
APPROACH RESOURCES: Solicitation Exclusivity Extended to Jan. 27
ARCHDIOCESE OF SANTA FE: Fr. Paickattu Not Subject To Sanctions
ASTRIA HEALTH: Nears Plan Approval, Objections Resolved
BLACKJEWEL LLC: Ex-CEO's Bid to Liquidate Company Denied
BLACKRIDGE TECHNOLOGY: Seeks March 1 Plan Exclusivity Extension
BLUE PRAIRIE: Seeks Plan Exclusivity Extension Thru Feb. 12
BORDEN DAIRY: Court Extends Plan Exclusivity Until January 4
BROOKS BROTHERS: Plan Exclusivity Extended Until February 3
BUFFALO SH: Gets OK to Hire Polsinelli as Bankruptcy Counsel
BYRD FAMILY: Taps NAI Nashville as Real Estate Broker
CASA DE LAS INVESTMENTS: Hires Hinds Law Group as New Counsel
CBAV1 LLC: BTL Diffusion Buying Cloud B Assets for $2.25 Million
CEC ENTERTAINMENT: Rent Abatement at 6 Venues Not Possible
CELADON GROUP: HQ Sold for $3 Million a Year After Shutdown
CENGAGE LEARNING: Moody's Hikes CFR to B3, Alters Outlook to Stable
EBONY MEDIA: Court Okays Sale to Former NBA Player for $14 Million
ELANCO ANIMAL: Moody's Completes Review, Retains Ba1 CFR
ENGINEERED PROPULSION: Plan Exclusivity Extended to March 26
EXPO CONSTRUCTION: Seeks Plan Exclusivity Extension Thru March 31
FARM-RITE INC: Court Extends Plan Exclusivity Until March 5
FLAME SEAL: Case Summary & 20 Largest Unsecured Creditors
FRIENDS OF CITRUS: Court Extends Exclusivity Period Thru March 8
GENNADY MOSHKOVICH: $21.2M Sale of Beverly Hills Property Approved
GUITAR CENTER: To Emerge From Bankruptcy by Year End
HERITAGE POWER: Moody's Completes Review, Retains B1 Rating
ICH INTERMEDIATE: S&P Alters Outlook to Negative, Affirms 'B+' ICR
INNERGEX RENEWABLE: S&P Lowers ICR to 'BB+'; Outlook Stable
JAX AVALON: Gets OK to Hire Michael Moecker, Appoint CRO
JAX AVALON: Seeks to Hire Lansing Roy as Legal Counsel
JOSEPH PORADA: Rathje & Woodward Allowed $62k in Fees and Costs
JUMP WESTMINSTER: Case Summary & 19 Unsecured Creditors
KINSER GROUP: Comfort Inn Valued at $1.8M, Holiday Inn at $3.9M
LANNETT COMPANY: Moody's Completes Review, Retains B3 CFR
LLADRO GALLERIES: Futura Buying Personal Property for $33K
LRGHEALTHCARE: Court Slated to Approve Bankruptcy Sale Plan
LUCKY BRAND: Court Extends Plan Exclusivity Thru January 29
MAD RIVER: Seeks Approval to Hire Real Estate Brokers
MALLINCKRODT PLC: Bankruptcy Judge Nixes Shareholders Committee
MCGRAW HILL: Moody's Reviews Caa2 CFR for Upgrade Amid Refinancing
MERITAGE COMPANIES: Court Extends Plan Exclusivity Thru Feb. 26
MILLS FORESTRY: Court Extends Plan Exclusivity Until January 7
MTS SYSTEMS: Moody's Retains B1 CFR Amid $1.7-Bil. Amphenol Deal
NEIGHBOR'S CONSEJO: Court Allows Fausto Fabre's $101k Claim
NEW FORTRESS: Moody's Retains B1 CFR Amid $250MM Add-On Notes
NORTHLAND CORPORATION: Plan Exclusivity Extended Thru Feb. 22
PADDOCK ENTERPRISES: Wins February 1 Plan Exclusivity Extension
PBF HOLDING: S&P Rates $250MM Add-on to Senior Secured Notes 'BB'
PDC WELLNESS: Moody's Affirms B3 CFR & Alters Outlook to Stable
PG&E: Canyon Capital Advisor's Appeal Dismissed
PREMIERE JEWELLERY: RJ Buying Property for $2.58M in Private Sale
PROPERTY VENTURES: Objection to Proof of Claim No. 1 Granted
RBP GLOBAL: Moody's Completes Review, Retains B3 CFR
RHINO BARE: Court Extends Exclusivity Periods Thru Feb. 25
S-TEK 1: Court OK's Interim Cash Collateral Use
SPHERATURE INVESTMENTS: Case Summary & 40 Top Unsecured Creditors
SPIDERMAN AND TINA MULHOLLAND: Court to Deny Proposed Plan
SPIDERMAN AND TINA MULHOLLAND: No Evidence for Dismissal
TALLGRASS ENERGY: Moody's Rates New $500MM Sr. Unsec. Notes 'B1'
TCF FINANCIAL: Moody's Reviews Ba1(hyb) Rating on Preferred Stock
TCMA TRUCKING: Case Summary & 12 Unsecured Creditors
TEA STATION: Seeks to Hire Enenstein Pham as Special Counsel
TEVA PHARMACEUTICAL: Moody's Completes Review, Retains Ba2 CFR
THEAG NORTH: Allegations of Fraud Sufficient, Court Says
TIDWELL BROS: Wants Solicitation Exclusivity Extended Thru March 1
TIMOTHY PLACE: Park Place of Elmhurst Returns to Chapter 11
TOWNSQUARE MEDIA: Moody's Rates New Senior Secured Notes 'B2'
TRANSFORMATION TECH: Seeks to Hire Richards Layton as Counsel
TRANSPINE INC: Court Extends Exclusivity Periods Thru Dec. 31
UNITED RENTALS: Moody's Affirms Ba2 CFR & Alters Outlook to Pos.
USS ULTIMATE: Moody's Raises CFR to B2 & 1st Lien Loan Rating to B1
VAIL RESORTS: Moody's Affirms Ba3 CFR Amid New $500MM Notes Issue
VALVOLINE INC: Moody's Gives Ba3 Rating to New $535MM Unsec. Notes
VANGUARD NATURAL RESOURCES: NPI Preserved by Confirmation Plan
VILLA TAPIA: Solicitation Exclusivity Period Extended to March 8
WATERS RETAIL: Court Approves Plan of Liquidation
WEX INC: eNett Acquisition No Impact on Moody's Ba2 Rating
YOUFIT HEALTH: Committee Engages Dundon as Financial Advisor
YOUFIT HEALTH: Committee Seeks to Hire Berger Singerman as Counsel
YOUFIT HEALTH: Committee Seeks to Hire Pachulski as Co-Counsel
YOUNG MEN'S: Beneficial Bond Owners Entitled to Notice
[*] Biggest Bankruptcies in 2020
[*] Spending Bill Lets Judges Quickly Approve PPP Loans
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
1 VISION LLC: Seeks to Hire Durrette Arkema as Legal Counsel
------------------------------------------------------------
1 Vision LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Virginia to employ Durrette, Arkema, Gerson &
Gill PC to handle its Chapter 11 case.
Bruce Arkema, Esq., and Kevin Funk, Esq., the firm's attorneys who
will be providing the services, will charge $390 per hour and $280
per hour, respectively.
Durrette Arkema will receive reimbursement for out-of-pocket
expenses incurred.
Prior to the petition date, the Debtor provided Durrette Arkema
with a $5,000 retainer of which $1,340 was used to pay the firm's
pre-bankruptcy fees. The firm also used $1,738 of the amount to
pay the filing fee.
Durrette Arkema is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to a court
filing.
The firm can be reached at:
Bruce E. Arkema, Esq.
Kevin J. Funk, Esq.
Durrette, Arkema, Gerson & Gill PC
1111 East Main Street, 16th Floor
Richmond, VA 23219
Tel.: (804) 775-6900
Fax: (804) 775-6911
Email: barkema@dagglaw.com
kfunk@dagglaw.com
About 1 Vision
1 Vision, LLC filed for Chapter 11 bankruptcy protection (Bankr.
E.D. Va. Case No. 20-34763) on Dec. 4, 2020. Lonnie S. Stinson,
owner, signed the petition. At the time of the filing, the Debtor
disclosed $6,028,000 in assets and $1,295,632 in liabilities.
Durrette, Arkema, Gerson & Gill PC is the Debtor's legal counsel.
3G VENTURE II: Taps Schlueter Mahoney as Legal Counsel
------------------------------------------------------
3G Venture II, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Colorado to employ Schlueter, Mahoney & Ross,
P.C. to give legal advice concerning the sale, lease or refinancing
of its real property.
Schlueter Mahoney will be paid at these hourly rates:
Michael A. Schlueter $375
Paralegals $125
The firm will also be reimbursed for work-related expenses.
Schlueter Mahoney is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code, according to a court
filing.
The firm can be reached through:
Michael A. Schlueter, Esq.
Schlueter, Mahoney & Ross, P.C.
999 18th Street, Suite 2200
Denver, CO 80202
Phone: (303) 292-4525
Fax: (303) 292-1229
Email: info@smrlaw.net
About 3G Venture II
3G Venture II, a California bitcoin mining company, sought Chapter
11 protection (Bankr. D. Colo. Case No. 20-17804) on Dec. 8, 2020,
disclosing at least $10 million in assets and less than $10 million
in liabilities. Cohen & Cohen, P.C. is the Debtor's legal counsel.
3G VENTURE: Seeks to Hire Cohen & Cohen as Bankruptcy Counsel
-------------------------------------------------------------
3G Venture II LLC seeks approval from the U.S. Bankruptcy Court for
the District of Colorado to employ Cohen & Cohen, P.C. as its
bankruptcy counsel.
The firm will provide services in connection with the Debtor's
Chapter 11 case, which include:
(a) advising the Debtor regarding its powers and duties under
the Bankruptcy Code;
(b) advising the Debtor regarding its responsibilities in
complying with the U.S. Trustee's operating guidelines and
reporting requirements and with the rules of the court;
(c) preparing legal documents;
(d) protecting the interests of the Debtor in all matters
pending before the court; and
(e) representing the Debtor in negotiating with its creditors
to prepare a plan of reorganization or other exit plan.
Cohen & Cohen will be paid at these hourly rates:
Roberston Cohen $400
Katharine Sender $275
Associates $195 - 275
Paralegal. $100
The firm will also be reimbursed for work-related expenses.
Prior to the Debtor's bankruptcy filing, Cohen & Cohen received
$35,000 from 3G Venture, LLC, the Debtor's manager.
Cohen & Cohen is "disinterested" within the meaning of Section
101(14)) of the Bankruptcy Code, according to a court filing.
The firm can be reached at:
Robertson B. Cohen, Esq.
Katharine S. Sender, Esq.
Cohen & Cohen, P.C.
1720 S. Bellaire St; Ste 205
Denver, CO 80222
Phone: (303) 933-4529
Fax: (866) 230-8268
Email: rcohen@cohenlawyers.com
ksender@cohenlawyers.com
About 3G Venture II
3G Venture II, a California bitcoin mining company, sought Chapter
11 protection (Bankr. D. Colo. Case No. 20-17804) on Dec. 8, 2020,
disclosing at least $10 million in assets and less than $10 million
in liabilities. Cohen & Cohen, P.C. is the Debtor's legal counsel.
99 CENTS: Moody's Assigns Caa1 Rating to New Senior Secured Notes
-----------------------------------------------------------------
Moody's Investors Service changed the outlook for 99 Cents Only
Stores LLC to positive from stable. Moody's also affirmed the
company's Caa1 corporate family rating and Caa1-PD probability of
default rating. Additionally Moody's assigned a Caa1 rating to the
company's new proposed senior secured notes. The rating of the
company's existing senior secured term loan is also affirmed and
will be withdrawn upon closing.
"The company's proposed refinancing will get its capital structure
in line with its overall profitability levels and will improve its
maturity profile hence the positive outlook", Moody's Vice
President Mickey Chadha stated. "However liquidity is still
constrained as we expect free cash flow to remain negative and
operating performance has been weaker than peers", Chadha further
stated. The change in outlook to positive reflects governance
considerations particularly financial strategies as reflected by
the proposed refinancing including an expected reduction in debt as
a result of a potential preferred equity raise.
Assignments:
Issuer: 99 Cents Only Stores LLC
Senior Secured Regular Bond/Debenture, Assigned Caa1 (LGD4)
Affirmations:
Issuer: 99 Cents Only Stores LLC
Probability of Default Rating, Affirmed Caa1-PD
Corporate Family Rating, Affirmed Caa1
Senior Secured Bank Credit Facility, Affirmed Caa2 (LGD4)
Outlook Actions:
Issuer: 99 Cents Only Stores LLC
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
The Caa1 Corporate Family Rating reflects the company's weak cash
flow generation with Moody's expectation that free cash flow will
be negative for the next 12 months. The rating also reflects the
company's small scale, geographic concentration in California and
the intense competitive business environment in its core markets.
Although post refinancing credit metrics will improve with Moody's
adjusted debt/EBITDA expected to be about 4.8x and modestly
improving further to about 4.5x and Moody's adjusted EBIT/interest
improving to be about 1.2x in the next 12 months, the cash
dividends on the proposed $200 million in preferred equity
contribution by existing owners will be about an annual $20 million
drain on cash flow. The company's operating performance has been
weaker than its peers in the value and discount consumables/grocery
sector especially in light of the increased demand for food at home
during the coronavirus pandemic. The rating also reflects the
execution risk related to the company's planned strategic
initiatives and cost cuts especially in an intense competitive
environment. The company's management team has seen some success in
implementing a turnaround strategy which includes improved
inventory and shrink management, and improved efficiencies
including new third party distributor relationships. Management has
also started to upgrade the company's store base to enhance the
customer experience. Other rating factors include positive growth
prospects for the discount and value retail sector which benefits
from affordable, low price points and relative resistance to
economic cycles. However, the industry remains highly competitive
with stronger competitors trying to gain market share.
The positive outlook reflects our expectation that the refinancing
transaction for the term loan is successful, liquidity will remain
adequate, free cash flow generation will improve and management
initiatives will lead operating performance on an upward
trajectory.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if liquidity deteriorates, or the
company is unable to address its term loan maturity in a timely
manner, or EBIT/interest is sustained below 1.0 times or if
operating performance deteriorates such that debt/EBITDA
deteriorates to above 6.0x. Change in the company's financial
policies could also result in a downgrade.
Ratings could be upgraded should earnings grow such that debt to
EBITDA is sustained below 4.5x, EBIT/interest is sustained above
1.5x and free cash flow is positive. A ratings upgrade would also
require good liquidity and financial policies which would support
leverage remaining at its improved levels.
99 Cents Only Stores LLC is controlled by affiliates of Ares
Management and Canada Pension Plan Investment Board. The Company
operates 385 retail stores in California, Texas, Arizona, and
Nevada. Revenues are about $2.3 billion.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
ABUNDANT LIFE: Court to Confirm No Stay in Effect
-------------------------------------------------
Judge Edward J. Coleman, III, of the United States Bankruptcy Court
for the Southern District of Georgia, Savannah Division, will grant
JBB Holdings, LLC's Motion to Confirm No Stay is in Effect.
JBB Holdings is a principal creditor of Abundant Life Worship
Center of Hinesville, GA, Inc. It holds a first-priority lien on
real property consisting of 40 acres in Liberty County, Georgia,
commonly known as 5493 North Coastal Highway, Fleming, Georgia
31309.
In 2011, Abundant Life obtained a loan from United Community Bank
to finance the purchase of the Property. The principal amount of
the original loan was $280,000.00. Thereafter, Abundant Life
financed the construction of a church building on the site, and the
amount of the loan increased to $1,650,167.00 by 2015. Both the
land and the church building served as collateral for the loan.
Subsequently, the loan was divided into two promissory notes, which
were then assigned to JTS Capital, LLC and were later purchased by
JBB Holdings. In 2018, JBB declared the Debtor in default under the
loan transaction.
Abundant Life has three last-minute steps to stop a foreclosure
sale by JBB Holdings. First, minutes before a scheduled
foreclosure, Abundant Life filed a Chapter 11 petition on January
2, 2019, commencing case no. 19-40004-EJC. After that case was
dismissed on March 2, 2020, Abundant Life filed a Verified
Complaint for Preliminary Injunction and Temporary Restraining
Order in the Superior Court of Liberty County, Georgia, and
obtained a temporary restraining order enjoining a second
foreclosure scheduled for March 3, 2020. When that state court
litigation was dismissed as to JBB Holdings on September 18, 2020,
and the injunction lifted, a third foreclosure sale was scheduled
for November 3, 2020. Abundant Life sought a stay from the state
court while it pursued an appeal, but on November 2, 2020, the
state court denied the motion for stay. To stop the sale for a
third time, Abundant Life filed its petition for its current
Chapter 11 case on that same day, November 2, 2020. JBB Holdings
held the sale on the courthouse steps in Hinesville, Georgia,
believing that the foreclosure sale was not subject to the
automatic stay. JBB Holdings submitted the high bid and obtained a
signed deed conveying the Property to JBB Holdings but has not yet
recorded that deed and asserts it will not do so until the Court
rules that no stay came into effect under 11 U.S.C. Section
362(n)(1)(B).
JBB Holdings' Motion to Confirm the Automatic Stay Under 11 U.S.C.
Section 362(a) Does Not Apply to Debtor's Second Small Business
Debtor Case Pursuant to 11 U.S.C. Section 362(n)(1)(B) and its
supplemental motion requesting the same relief was heard on
November 30, 2020. On November 29, 2020, the Abundant Life filed
an amended petition electing to proceed under Subchapter V of
Chapter 11.
Judge Coleman held that the automatic stay of Section 362(a) did
not come into effect upon Abundant Life's filing of its Chapter 11
petition on November 2, 2020. He further held that the November
29, 2020 election to proceed under Subchapter V did not operate to
impose the automatic stay, retroactively or otherwise.
Judge Coleman explained that under Section 362(n)(1)(B), the
automatic stay does not come into effect if three elements are
satisfied: (1) the debtor was a debtor in small business case; (2)
that case was dismissed; and (3) the order dismissing that case
became final in the two-year period ending on the date of the order
for relief. Judge Coleman said that Abundant Life' 2019 case was a
small business case. He also said that the 2019 case was dismissed
based on the Debtor's failure to file its disclosure statement or
plan. Judge Coleman added that the order dismissing the case was
entered on March 2, 2020, which was within the two-year period
preceding the filing of the instant case on November 2, 2020. He
concluded that all three elements were satisfied, and therefore by
operation of Section 362(n)(1)(B), the automatic stay never came
into effect in the 2020.
The case is In re: ABUNDANT LIFE WORSHIP CENTER OF HINESVILLE, GA,
INC., Chapter 11, Debtor. JBB Holdings, LLC, Movant, v. ABUNDANT
LIFE WORSHIP CENTER OF HINESVILLE, GA, INC., Respondent, Case No.
20-40959-EJC, (Bankr. S.D. Ga.). A full-text copy of the Opinion
on Motion to Confirm No Stay is In Effect, dated December 16, 2020,
is available at https://tinyurl.com/yd65awca from Leagle.com.
About Abundant Life Worship Center of Hinesville, GA, Inc.
Abundant Life Worship Center of Hinesville, GA, Inc. is a
tax-exempt religious organization. It is a non-denominational
congregational church originally formed in 1998 under the name
Abundant Life Worship Center, Inc. It filed its voluntary petition
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ga. Case No.
20-40959) on November 2, 2020.
The Petition was signed by Caroll A. Norwood, CEO. The Debtor is
estimated to have $1 million to $10 million in both assets and
liabilities. Tacita A. Mikel Scott, Esq. at WONG FLEMING,
represents the Debtor.
AFFINITY GAMING: Moody's Rates New $475MM First Lien Notes 'B3'
---------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Affinity Gaming
Corporation's proposed $475 million 1st lien senior secured notes
due 2027. Moody's affirmed Affinity's B3 Corporate Family Rating,
B3-PD Probability of Default Rating, B2 1st lien term loan and
revolver and Caa2 2nd lien term loan rating. Affinity's rating
outlook was revised to stable from negative. Moody's expects to
withdraw the ratings on the existing first and second lien debt
upon completion of the refinancing.
Proceeds from the new notes along with $24 million of balance sheet
cash will be used to refinance the company's existing 1st and 2nd
lien term loans in full along with a $22 million cash payment to
the company's sponsor. The cash payment to the sponsor is the same
amount the sponsor provided Affinity in September order for the
company to meet its September 30th 1st lien leverage test through
an equity cure.
As part of the refinancing, a new $50 million super senior
revolving credit facility will replace Affinity's existing $75
million revolving credit facility maturing in July 2021.
"Along with the extension of Affinity's overall debt maturity by
several years, and leverage neutral nature of the refinancing, the
stable outlook and rating affirmation also consider that the
company has performed well in terms of EBITDA and free cash flow
despite the continued challenges related to the coronavirus
pandemic. This will provide Affinity with the opportunity to focus
on managing through the coronavirus challenges and reduce leverage
over time," stated Keith Foley, a Senior Vice President at
Moody's.
The stable outlook also considers that although actual LTM
debt/EBITDA was very high at over 11.0x, leverage based on recent
results is lower. Pro forma debt/EBITDA applying an annual run-rate
based on the Sep. 30, 2020 quarter EBITDA results in much lower
debt-to-EBITDA at about 6.0x. There is uncertainty regarding the
level of sustainable earnings when competing entertainment options
reopen, but the stable outlook reflects that the company has
aggressively managed costs and stabilized performance in a
challenging operating environment. Additionally, while there will
be a slight reduction in balance sheet cash and revolver
availability on a pro forma basis -- pro forma cash plus revolver
availability will drop to $108 million from $156 million --
Affinity's liquidity is still considered substantial as it
represents slightly more than 12-months of the company's estimated
no-revenue scenario monthly cash burn (including debt service and
maintenance capital expenditures) of about $9 million.
The covenant -lite nature of the proposed financial covenants also
factors into the stable rating outlook. Affinity will be subject to
a first-lien coverage test that starts at 6.75x and eventually
drops to 6.0x, but the test is only required if outstanding amounts
under the new revolver is greater than $10 million. The company
will have equity cure rights, too. Pro forma cash is about $58
million, and Moody's expected Affinity will generate $20 to $25
million of annual free cash flow. As a result, Moody's expects that
Affinity will not have to draw on the new $50 million revolver.
Moody's took the following rating actions
Ratings affirmed:
Affinity Gaming Corporation
Corporate Family Rating, at B3
Probability of Default Rating, at B3-PD
Senior secured 1st lien revolver and term loan, at B2 (LGD3)
(to be withdrawn at close)
Senior secured 2nd lien term loan, at Caa2 (LGD5) (to be
withdrawn at close)
Rating assigned:
Affinity Gaming Corporation
$475 million senior secured 1st lien notes due 2027,
Assigned B3 (LGD4)
Outlook Actions:
Issuer: Affinity Gaming Corporation
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Affinity's credit profile (B3 CFR) reflects the company's
geographic diversity and ability to generate positive free cash
flow despite challenging operating conditions. Key concerns
included Affinity's relatively small scale in terms of revenue and
earnings, relatively high leverage, and historically aggressive
financial policy evidenced by payment of leveraged dividend in
early 2018 by ownership, Z Capital Partners, LLC. Moody's assumed
in the ratings that debt-to-EBITDA is reduced to a 6x-7x range in
2021.
Affinity's ratings continue to reflect that the coronavirus
pandemic remains an overriding credit concern for the company and
other regional gaming issuers. Because there is no indication when
the pandemic will pass, Affinity's casinos are still vulnerable to
future closings and capacity restrictions that create significant
earnings uncertainty. Affinity's reopened casinos are experiencing
near-term earnings and margin benefit from limited competition from
other entertainment choices that are more restricted due to the
coronavirus. However, competition for consumer discretionary
spending from these alternate and popular entertainment choices,
including movie theaters and restaurants, will eventually return
once they increase volume and open. Affinity and other regional
casino issuers also remain vulnerable to a challenging
macroeconomic environment and the increased possibility that gaming
customers limit their spending to more essential goods and
services, leaving less for casino-type gaming, which is a highly
discretionary form of entertainment.
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Moody's analysis has considered the effect on the performance of
Affinity from the current weak US economic activity and a gradual
recovery for the coming year. 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 our forecasts is unusually high. Moody's regards the
coronavirus outbreak as a social risk under our ESG framework,
given the substantial implications for public health and safety.
The gaming sector has been one of the sectors most significantly
affected by the shock given its sensitivity to consumer demand and
sentiment. More specifically, the weaknesses in Affinity's credit
profile, including its exposure to travel disruptions and
discretionary consumer spending have left it vulnerable to shifts
in market sentiment in these unprecedented operating conditions and
Affinity remains vulnerable to the outbreak continuing to spread.
Affinity, like other casinos owners and operators, is exposed to
elevated social risks, particularly in terms of evolving
demographic and societal trends that may drive a change in demand
away from traditional casino style gaming. The risks are somewhat
mitigated by having non-gaming attractions including hotels,
restaurants, bars, and entertainment venues.
From a corporate governance perspective, Affinity's financial
policy is aggressive. Moody's view is based on the company's prior
debt-funded dividends and the inherent risks related to the
company's 100% ownership by a private equity firm. These risks
include further shareholder friendly policies in the form of
distributions and maximizing the use of leverage. Moody's does not
expect Affinity will manage its debt/EBITDA much below 6.0x under
normal operating conditions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade is unlikely given the weak operating environment
and continuing uncertainty related to the coronavirus. An upgrade
would require a high degree of confidence on our part that the
gaming sector has returned to a period of long-term stability, and
that Affinity demonstrates the ability and willingness to generate
positive free cash flow, maintain good liquidity, and operate at a
debt/EBITDA level of 6.0x or lower.
Ratings could be also be downgraded if Moody's anticipates renewed
weakness in Affinity's earnings or cash flow generation because of
competition, actions to contain the spread of the virus, or
reductions in discretionary consumer spending. A deterioration in
liquidity or sustained high leverage could also lead to a
downgrade.
Affinity Gaming Corporation is a Nevada corporation, headquartered
in Las Vegas, which owns and operates 8 casinos, five of which are
located in Nevada, two in Missouri, and one in Iowa. Affinity is a
private company that is 100% owned by affiliates of Z Capital and
does not disclose its financial information. Net revenue for the
12-month period ended Sep. 30 2020 was $232 million.
The principal methodology used in these ratings was Gaming
Methodology published in October 2020.
AGEMY FAMILY: Gets OK to Hire David W. Steen as Legal Counsel
-------------------------------------------------------------
Agemy Family Corporation received approval from the U.S. Bankruptcy
Court for the Middle District of Colorado to employ David W. Steen,
P.A. to handle its Chapter 11 case.
The firm will be paid at these rates:
David W. Steen, Esq. $500 per hour
Associate/Contract Attorney $325 per hour
Paralegals $200 per hour
Legal Assistants $175 per hour
David Steen, Esq., disclosed in court filings that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
David W. Steen, Esq.
David W. Steen, P.A.
Tampa, FL 33688-0394
Tel.: (813) 251-3000
Fax: (866) 230-8268
Email: dwsteen@dsteenpa.com
About Agemy Family Corporation
Agemy Family Corporation, a company that operates in the laundry
facilities and dry cleaning services industry, sought Chapter 11
protection (Bankr. M.D. Fla. Case No. 20-08608) on Nov. 22, 2020,
estimating at least $100,000 to $500,000 in assets and less than $1
million to $10 million in liabilities. Agemy Family President
Allie Hassan Agemy signed the petition.
Judge Roberta A. Colton oversees the case. David W. Steen, P.A.
serves as the Debtor's legal counsel.
AKORN OPERATING: Moody's Completes Review, Retains Caa1 CFR
-----------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Akorn Operating Company LLC and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review in which Moody's reassessed the
appropriateness of the ratings in the context of the relevant
principal methodology, recent developments, and a comparison of the
financial and operating profile to similarly rated peers. The
review did not involve a rating committee. Since January 1, 2019,
Moody's practice has been to issue a press release following each
periodic review to announce its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
KEY RATING CONSIDERATIONS
The Caa1 Corporate Family Rating reflects Akorn's high financial
leverage, weak near-term product pipeline, and outstanding FDA
warning letters at two of its plants. The rating also incorporates
the risk that the recent bankruptcy and ongoing regulatory
challenges could harm the company's reputation with customers
(i.e., wholesalers may have concerns about Akorn's ability to
sustainably supply products without disruption), leading to erosion
in market share. The rating is also constrained by uncertainty
around the company's longer-term strategy and ability to grow.
The principal methodology used for this review was Pharmaceutical
Industry published in June 2017.
ALVOGEN PHARMA: Moody's Completes Review, Retains B2 CFR
--------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Alvogen Pharma US, Inc. and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review in which Moody's reassessed the
appropriateness of the ratings in the context of the relevant
principal methodology, recent developments, and a comparison of the
financial and operating profile to similarly rated peers. The
review did not involve a rating committee. Since January 1, 2019,
Moody's practice has been to issue a press release following each
periodic review to announce its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
KEY RATING CONSIDERATIONS
Alvogen's B2 Corporate Family Rating reflects its moderate size and
scale with revenues averaging around $500 million in the highly
competitive generic pharmaceutical industry. Alvogen's rating is
constrained by its high financial leverage which will extend into
2021. The ratings benefit from a good product pipeline which has a
mix of both near-term and longer term opportunities. Alvogen's
ratings benefit from capital support from its parent, which Moody's
expects will continue until its most valuable pipeline assets fully
materialize.
The principal methodology used for this review was Pharmaceutical
Industry published in June 2017.
AMERICAN PURCHASING: Gets Interim OK to Hire Claims Agent
---------------------------------------------------------
American Purchasing Services, LLC and its affiliates received
interim approval from the U.S. Bankruptcy Court for the Southern
District of Florida to hire Prime Clerk LLC as their notice, claims
and solicitation agent.
The firm will oversee the distribution of notices and will assist
in the maintenance, processing and docketing of proofs of claim
filed in the Debtors' Chapter 11 cases.
The firm's hourly rates are:
Claim and Noticing Rates
Technology Consultant $35 - $95
Consultant/Senior Consultant $65 - $165
Director $175 - $195
Chief Operating Officer/Executive VP No charge
Solicitation, Balloting and Tabulation Rates
Solicitation Consultant $190
Director of Solicitation $210
Benjamin Steele, vice president of Prime Clerk, disclosed in court
filings that his firm is "disinterested" as defined in section
101(14) of the Bankruptcy Code.
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
About American Purchasing Services
American Purchasing Services, LLC, which conducts business under
the name American Medical Depot, is a distributor of medical,
surgical, dental and laboratory supplies and equipment. It is
owned 100% by American Medical Depot Holdings, LLC.
American Purchasing Services and its affiliates, including DVSS
Acquisition Company, LLC, AMD Pennsylvania, LLC and American
Medical Depot Holdings sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 20-23495) on Dec.
11, 2020.
At the time of the filing, the Debtors had estimated assets of
between $10 million and $50 million and liabilities of between $50
million and $100 million.
Judge Scott M. Grossman oversees the cases.
The Debtors tapped Berger Singerman LLP as their legal counsel, CR3
Partners LLC as restructuring advisor, and Prime Clerk LLC as
notice and claims agent.
AMERICAN PURCHASING: Gets Interim OK to Hire Legal Counsel
----------------------------------------------------------
American Purchasing Services, LLC, and its affiliates received
interim approval from the U.S. Bankruptcy Court for the Southern
District of Florida to hire Berger Singerman, LLP as their legal
counsel.
The firm's services will include:
(a) advising the Debtors regarding their powers and duties and
the continued management of their business operations;
(b) advising the Debtors regarding their responsibilities in
complying with the U.S. Trustee's operating guidelines and
reporting requirements and with the rules of the court;
(c) preparing legal documents;
(d) protecting the interests of the Debtors in all matters
pending before the court; and
(e) representing the Debtors in negotiations with their
creditors and in the preparation of a Chapter 11 plan.
The hourly rates charged by the attorneys at Berger Singerman range
from $320 to $725. Legal assistants and paralegals charge between
$85 per hour and $250 per hour.
Paul Steven Singerman, Esq., Ilyse Homer, Esq., and Robin Rubens,
Esq., the firm's attorneys who will be principally responsible for
representing the Debtors will charge $720 per hour, $560 per hour
and $550 per hour, respectively.
Mr. Singerman disclosed in court filings that his firm is
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Paul Steven Singerman, Esq.
Robin J. Rubens, Esq.
Berger Singerman LLP
1450 Brickell Avenue, Suite 1900
Miami, FL 33131
Tel: (305) 755-9500
Fax: (305) 714-4340
Email: singerman@bergersingerman.com
rrubens@bergersingerman.com
About American Purchasing Services
American Purchasing Services, LLC, which conducts business under
the name American Medical Depot, is a distributor of medical,
surgical, dental and laboratory supplies and equipment. It is
owned 100% by American Medical Depot Holdings, LLC.
American Purchasing Services and its affiliates, including DVSS
Acquisition Company, LLC, AMD Pennsylvania, LLC and American
Medical Depot Holdings sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 20-23495) on Dec.
11, 2020.
At the time of the filing, the Debtors had estimated assets of
between $10 million and $50 million and liabilities of between $50
million and $100 million.
Judge Scott M. Grossman oversees the cases.
The Debtors tapped Berger Singerman LLP as their legal counsel, CR3
Partners LLC as restructuring advisor, and Prime Clerk LLC as
notice and claims agent.
AMERICAN PURCHASING: Seeks to Hire CR3 Partners, Appoint CRO
------------------------------------------------------------
American Purchasing Services, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the Southern District of Florida
to hire CR3 Partners, LLC and appoint Dennis Gerrard as chief
restructuring officer.
The firm's services will include:
CRO Services:
a. Assist with day-to-day operations of the Debtors, provide
ongoing cash flow management and cash flow control;
b. Develop and report on a 13-week forward looking cash flow
model to assist in tracking the weekly cash budget;
c. Negotiate with the Debtors' current lenders to insure
liquidity;
d. Develop alternative strategies for improving liquidity
(including the development and execution of overhead and expense
reduction initiatives, divestitures, and cash conservation
programs) and assist in the implementation thereof;
e. Assist the Debtors in the development and preparation of an
operating plan, cash flow forecasts, and business plan and
presentation of such plans and forecasts to the board of directors;
f. Evaluate and revise the Debtors' financial projections;
g. Assist the Debtors in evaluating their business, including
identifying and assisting the Debtors in the disposition of any
non-core assets or operations;
h. Manage the development, evaluation, negotiation, and
execution of any restructuring or liquidating transaction;
i. Negotiate with existing lenders, creditors, and other
parties in interest in the implementation of a restructured or
liquidated transaction;
j. Report on any other issues affecting the Debtors' ability
to maintain positive cash flow and profits;
k. Provide timely updates to the Debtors' directors and
supplement with written materials and schedules as needed;
l. Facilitate audit reconciliation process and finalization of
audit;
m. All other items as agreed from time to time between the
Debtors and CR3.
Bankruptcy Services:
n. Provide oversight and support to the Debtors' other
professionals in connection with the execution of the Debtors'
business plan, any sales process and the overall administration of
activities within the chapter 11 proceeding;
o. Provide oversight and assistance in connection with the
preparation of financial-related disclosures required by the
bankruptcy court, including the Schedules of Assets and
Liabilities, the Statement of Financial Affairs and Monthly
Operating Reports and any other disclosures required by the
Debtors in connection with the bankruptcy process;
p. Provide oversight and assistance in connection with the
preparation of financial information for distribution to creditors
and others, including, but not limited to, cash flow projections
and budgets, cash receipts and disbursements analysis of various
asset and liability accounts, and analysis of proposed transaction
s for which court approval is sought;
q. Participate in meetings and provide information to any
official committee appointed in these cases, the U.S. Trustee,
other parties in interest, including contractual counterparties,
and professionals hired by the same;
r. Evaluate, make recommendations and implement strategic
alternatives as needed to maximize the value of the Debtors'
assets;
s. Provide oversight and assistance in connection with the
preparation of analysis of creditor claims;
t. Provide oversight and assistance in connection with the
evaluation and analysis of avoidance actions, including,
fraudulent, conveyances and preferential transfers, and in the
defense and prosecution of other litigation, if necessary;
u. Provide testimony in litigation or bankruptcy matters as
required;
v. Evaluate the cash flow generation capabilities of the
Debtors for valuation maximization opportunities;
w. Provide oversight and assistance in connection with
communications and negotiations with constituents including
investors and other critical constituents to the successful
liquidation of the Debtors;
x. Assist in the development of a plan of liquidation and in
the preparation of information and analysis necessary for the
confirmation of a plan in these chapter 11 proceedings; and
y. Perform other tasks as directed by the restructuring
committee and agreed to by CR3, including all tasks necessary to
facilitate the Debtors' liquidation.
CR3 will be compensated as follows:
1. The CRO's services will be billed at an hourly rate of
$725. The weekly amount to be paid by the Debtors for the services
provided, excluding out-of-pocket expenses, will be capped at
$25,000.
2. Tom O'Donoghue, a partner at CR3, who will be working with
the CRO, will charge an hourly fee of $725, excluding out-of-pocket
expenses.
3. Consultants as required, after consultation with the
Debtors' Board, will be paid at the standard billing rates of $400
to $625 per hour, excluding out-of-pocket expenses.
Mr. Gerrard disclosed in court filings that he and his firm are
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Dennis Gerrard
CR3 Partners, LLC
Phone: (239) 784-9317
Email: dennis.gerrard@cr3partners.com
About American Purchasing Services
American Purchasing Services, LLC, which conducts business under
the name American Medical Depot, is a distributor of medical,
surgical, dental and laboratory supplies and equipment. It is
owned 100% by American Medical Depot Holdings, LLC.
American Purchasing Services and its affiliates, including DVSS
Acquisition Company, LLC, AMD Pennsylvania, LLC and American
Medical Depot Holdings sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 20-23495) on
Dec. 11, 2020.
At the time of the filing, the Debtors had estimated assets of
between $10 million and $50 million and liabilities of between $50
million and $100 million.
Judge Scott M. Grossman oversees the cases.
The Debtors tapped Berger Singerman LLP as their legal counsel, CR3
Partners LLC as restructuring advisor, and Prime Clerk LLC as
notice and claims agent.
AMNEAL PHARMACEUTICALS: Moody's Completes Review, Retains B3 CFR
----------------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Amneal Pharmaceuticals, LLC and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review in which Moody's reassessed the
appropriateness of the ratings in the context of the relevant
principal methodology, recent developments, and a comparison of the
financial and operating profile to similarly rated peers. The
review did not involve a rating committee. Since January 1, 2019,
Moody's practice has been to issue a press release following each
periodic review to announce its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
KEY RATING CONSIDERATIONS
Amneal's B3 Corporate Family Rating reflects its moderate size and
scale by revenue compared to generic pharmaceutical peers, and its
high financial leverage. Amneal has significant concentration in
the US where it faces earnings volatility due to pricing pressure
on its base of existing products and dependence on its pipeline to
grow. Moody's believes earnings will grow in 2021 while generating
good free cash flow.
The principal methodology used for this review was Pharmaceutical
Industry published in June 2017.
APPROACH RESOURCES: Solicitation Exclusivity Extended to Jan. 27
----------------------------------------------------------------
At the behest of Debtor Approach Resources Inc. and its affiliates,
Judge Marvin Isgur extended the periods within which the Debtors
have the exclusive rights to file a plan through and including
November 27, 2020, and to solicit acceptances of a plan to January
27, 2021.
On December 2, 2020, the Order to extend exclusivity periods was
granted by the U.S. Bankruptcy Court for the Southern District of
Texas, Houston Division.
Despite facing unforeseeable and historic challenges relating to
the COVID-19 pandemic and the substantial drop in commodity prices,
the Debtors have made material progress in the chapter 11 Cases.
The following are the relevant factors that strongly favored the
Debtors' exclusivity extensions:
(i) the Debtors have, among other things, initiated litigation
against Alpine and ultimately resolved that litigation in a manner
that generated $22,125,000 million for their estates, and then
remarketed their assets and consummated the sale of substantially
all of the Debtors' assets to Zarvona on September 30, 2020. From
the proceeds of the sale, the Debtors made a $100 million adequate
protection payment to the Secured Lenders. Presently, the Debtors
are in consultation with the Secured Lenders, are close to
finalizing the terms of a liquidating plan of reorganization, and
expect that they will finalize the terms of, and file, their
liquidating plan of reorganization. Also, the Debtors will seek to
schedule a confirmation hearing on as expedites a schedule as
permissible under the circumstances;
(ii) the Debtors have negotiated in good faith with key
constituents since the Petition Date. For the most part, the
Debtors have been able to obtain a consensus among those
constituents regarding the issues in these cases. Accordingly, the
Debtors submit that an additional extension of the Exclusive
Periods is being sought as a means to enable the Debtors and the
Secured Lenders to finalize and file a chapter 11 plan which will
affect the distribution of the remaining proceeds of the sale of
the Debtors' assets; and
(iii) the Debtors are paying all of their post-petition obligations
as they become due and have the resources to pay, and in fact, will
continue to pay, all of their post-petition obligations through the
effective date of their liquidating plan of reorganization.
The Debtors are in the final stages of negotiating the terms of a
liquidating plan of reorganization with their Secured Lenders. Once
finalized, the Debtors will file their liquidating plan of
reorganization and seek to have a confirmation hearing set before
the year ends.
A copy of the Debtor's Motion to extend is available from
epiq11.com at https://bit.ly/2KoTgg1 at no extra charge.
A copy of the Court's Extension Order is available from epiq11.com
at https://bit.ly/37nwCxK at no extra charge.
About Approach Resources
Forth Worth, Texas-based Approach Resources Inc. --
https://www.approachresources.com/ -- is a publicly owned Delaware
corporation. The company and its subsidiaries comprise an
independent energy company focused on the exploration, development,
production, and acquisition of unconventional oil and gas reserves.
Their principal operations are conducted in the Midland Basin of
the greater Permian Basin in West Texas.
Approach Resources Inc. and its affiliates filed for Chapter 11
bankruptcy protection (Bankr. S.D. Tex. Lead Case No. 19-36444) on
Nov. 18, 2019, listing $100 million to $500 million in assets and
liabilities. The petitions were signed by Sergei Krylov, chief
executive officer. The Hon. Marvin Isgur is the presiding judge.
The Debtors tapped Thompson & Knight LLP as legal counsel; Perella
Weinberg Partners LP as investment banker; Alvarez & Marsal North
America, LLC as financial advisor; KPMG US LLP as tax advisor; and
Epiq Corporate Restructuring LLC as claims, noticing, and
solicitation agent.
ARCHDIOCESE OF SANTA FE: Fr. Paickattu Not Subject To Sanctions
---------------------------------------------------------------
Judge David T. Thuma of the United States Bankruptcy Court for the
District of New Mexico will not impose sanctions on Father Thomas
Paickattu for violating the automatic stay.
Fr. Paickattu was the parish administrator of Holy Ghost parish,
one of the 93 parishes in the Archdiocese of Santa Fe. He was with
the parish for about 8 months in 2017. Fr. Paickattu alleged that
he uncovered an embezzlement scheme during his short tenure,
reported the scheme to the parish and the Archdiocese, and was
fired in retaliation.
In October 2018, Fr. Piackattu filed suit in state court against
the Archdiocese, Holy Ghost, and two individual defendants who
worked for the parish, asserting claims for retaliatory discharge,
civil racketeering, defamation, breach of contract, and prima facie
tort.
The Archdiocese filed its Chapter 11 petition on December 3, 2018,
staying the state court action. Fr. Paickattu did not seek relief
from the automatic stay to pursue his state court action against
the Archdiocese, nor did he file a proof of claim. Instead, on
February 26, 2019, he filed an adversary proceeding against the
Archdiocese, seeking denial of the discharge based on the same
facts alleged in the state court action. The Court dismissed the
proceeding without prejudice, ruling that it was premature to
address discharge before the Debtor filed a plan.
On January 20, 2020, Fr. Piackattu filed a new lawsuit in state
court. The facts alleged in the new suit are very similar to those
alleged in the first one and in the denial of discharge proceeding.
The main difference is that in the first two actions the
Archdiocese is a defendant, while in the third one the Archbishop
is. The third suit is the subject of Debtor's motion for
sanctions.
The Debtor and the Archbishop argue that the Archbishop, as the
officeholder of a corporation sole (the Debtor), is sufficiently
intertwined with the Debtor for the automatic stay to apply to Fr.
Paickattu's claims against him.
Judge Thuma held that the Debtor is a corporation sole, meaning
that the Archbishop is not merely the Debtor's decision-maker and
agent, but in some respects essentially is the Debtor. He further
held that Fr. Paickattu's claims against the Archbishop crossed the
admittedly blurry line between officeholder and corporation sole,
and are stayed. Judge Thuma adds that because this area of the law
is so esoteric, sanctions are not appropriate.
The case is IN RE: ROMAN CATHOLIC CHURCH OF THE ARCHDIOCESE OF
SANTA FE, Debtor, Case No. 18-13027-t11, (Bankr. D.N.M.). A
full-text copy of the Opinion, dated December 14, 2020, is
available at https://tinyurl.com/ybvzqpjm from Leagle.com
About the Archdiocese of Santa Fe
The Roman Catholic Church of the Archdiocese of Santa Fe --
https://www.archdiosf.org/ -- is an ecclesiastical territory or
diocese of the southwestern region of the United States in the
state of New Mexico. At present, the Archdiocese of Santa Fe covers
an area of 61,142 square miles. There are 93 parish seats and 226
active missions throughout this area.
The Archdiocese of Santa Fe sought Chapter 11 protection (Bankr.
D.N.M. Case No. 18-13027) on Dec. 3, 2018, to deal with child abuse
claims. It reported total assets of $49,184,579 and total
liabilities of $3,700,000 as of the bankruptcy filing.
Judge David T. Thuma oversees the case.
The archdiocese tapped Elsaesser Anderson, Chtd. and Walker &
Associates, P.C., as bankruptcy counsel; Stelzner, Winter,
Warburton, Flores, Sanchez & Dawes, P.A as special counsel; and
REDW, LLC as accountant.
ASTRIA HEALTH: Nears Plan Approval, Objections Resolved
-------------------------------------------------------
Mai Hoang of Yakima Herald-Republic reports that Astria Health's
bankruptcy-exit plan is nearing approval as objections have been
resolved.
According to the report, legal discussions about Astria Health's
bankruptcy reorganization plan will continue Wednesday, December
23, 2020, to give attorneys more time to work on a version that
includes a financial deal with Tacoma-based MultiCare Health
System.
Meanwhile, Astria Health has resolved objections to the plan filed
by Cerner Corp., its former billing system vendor, and AHM Inc., a
firm owned by former CEO John Gallagher and former Chief Financial
Officer Cary Rowan that employed executives for Astria Health and
its hospitals.
In the third week of December 2020, MultiCare, which operates 10
hospitals a network of clinics in the Spokane and Puget Sound
areas, agreed to provide a $75 million loan to help Astria out of
bankruptcy.
Astria Health anticipates using the loan, along with $5 million of
its funds, to pay off Lapis Advisers, its largest secured creditor.
The proposed deal came together in days and was revealed by Astria
Health's attorneys on Thursday, December 17, 2020.
Astria Health filed for bankruptcy in May 2019, and closed Astria
Regional Medical Center in Yakima in January 2020, along with
several clinics. It continues to operate hospitals in Sunnyside and
Toppenish.
MultiCare and Astria Health have until Jan. 15 to complete the
deal. If that does not happen, an earlier reorganization plan will
go into effect. Under that plan, Lapis Advisers would be repaid
over several years.
,
By paying off Lapis Advisers, Astria Health would be in a firmer
financial position as the loan from MultiCare is at a lower
interest rate, said Michael Lane, Astria Health's chief
restructuring officer, in a declaration filed with the U.S.
Bankruptcy Court.
Astria Health attorney Sam Maizel had previously said he was
planning on filing an amended plan at the end of last week, but had
to work on several things, including addressing concerns from the
Unsecured Creditors Committee about the new development. Committee
attorneys said they agree with the MultiCare deal.
Judge Whitman L. Holt said during the hearing Monday, December 21,
2020, he wanted an amended plan filed by Tuesday, December 22,
2020, morning, to provide all parties at least 24 hours to go
through the document. The hearing will resume at noon Wednesday.
Objections resolved
Cerner Corp.'s concerns centered on whether Astria Health would be
able to repay money it owes, including payments for its electronic
health record services and claims filed previously.
When Astria Health filed for bankruptcy in May 2020, it cited
issues with an unnamed billing vendor that prevented the
organization from collecting tens of millions of revenues, which
hampered its cash flow. Astria Health did not name the vendor,
stating it planned to pursue legal action. Cerner has since
revealed itself as the vendor of those services.
Cerner attorney Paul Hoffmann said during a hearing last week that
it was concerned that Astria Health did not set aside any funds for
claims. In its objection, filed Dec. 16, 2020, Cerner estimated
that Astria Health owes the company $10.7 million, including $1.2
million in funds for its revenue cycle services from May 6, 2019,
when Astria Health filed for Chapter 11 bankruptcy and Oct. 23,
2019, when services officially ended.
Astria Health, in a memorandum supporting its reorganization plan,
argued that it did not reserve any funds because it estimated that
issues with Cerner's billing system caused at least $150 million in
damages and would easily offset any claims. In addition, it said it
would have enough cash flow to pay operating expenses for
Cerner’s electronic health record services and any claims.
On Monday, attorneys from Astria Health and Cerner said they’ve
made progress to resolve concerns and that the main focus would be
finalizing language in an order that would acknowledge Astria
Health's ability to cover payments.
Management contract
Astria Health filed a stipulation Friday that included an agreement
that would address objections from AHM Inc.
In its objection to the plan, AHM Inc. took issue with Astria
Health's decision to end its management contract and hire former
AHM Inc. employees, stating that it would violate a non-compete
clause in its executive services agreement. It also claimed that
Astria Health owed AHM Inc. for bonuses and retirement plans.
In the agreement, Astria Health agreed to pay the executives who
were once AHM Inc. employees $425,000 in signing bonuses to resolve
any owed bonus money to AHM. Astria Health also agreed to pay an
additional $70,000 for bonuses for employees, other than Gallagher
and Rowan, who had employment terminated before the filing date of
an order approving the stipulation. In turn, AHM would accept
Astria Health’s rejection of an executive services agreement and
waive any non-compete provision that would prevent Astria Health
from hiring executives employed by AHM Inc.
The document that lists the executives that would be hired by
Astria Health is under seal, but AHM Inc. established in its
objection that Astria Health contracted with AHM Inc. for several
positions including Gallagher, Rowan, "the rest of Astria's C-suite
and most of its non-C-level system managers" since January 2018.
The notable exception was Lane, the chief restructuring officer,
who was listed as a former AHM employee.
The stipulation also states that Astria Health will enter into
six-month consulting agreements with both Gallagher and Rowan
through AHM, starting Dec. 1, 2020. Under the agreement, Astria
Health would pay $30,000 and $20,000 per month to AHM Inc., for
Gallagher and Rowan, respectively. Any amounts paid to Gallagher
for consulting fees since his departure in late October 2020 will
be deducted from the consulting agreement's total amount.
The agreement states the Gallagher and Rowan would provide
assistance and information on several issues related to executing
the reorganization plan, including assistance on any negotiations
or litigation with Cerner Corp. and affiliates.
Gallagher announced his departure as CEO of Astria Health on Nov.
4, 2020, citing a need to tend to family members' health issues.
The stipulation indicates that Gallagher officially left his role
in late October 2020. Rowan retired as CFO sometime this summer;
Maxwell Owens has served in the position since August 2020.
Astria Health also agreed to pay AHM Inc. $300,000 to resolve
claims fully. AHM, Gallagher and Rowan have agreed to waive and
release any claims filed before the stipulation.
About Astria Health
Astria Health and its subsidiaries -- https://www.astria.health --
are a nonprofit health care system providing medical services to
patients who generally reside in Yakima County and Benton County,
Wash., through the operation of Sunnyside, Yakima, and Toppenish
hospitals, as well as several health clinics, home health services,
and other healthcare services. Collectively, they have 315
licensed beds, three active emergency rooms, and a host of medical
specialties. The Debtors have 1,547 regular employees.
Astria Health and 12 of its subsidiaries filed for bankruptcy
protection (Bankr. E.D.Wash. Lead Case No. 19-01189) on May 6,
2019. In the petitions signed by John Gallagher, president and CEO,
the Debtors estimated assets and liabilities of $100 million to
$500 million.
The Hon. Frank L. Kurtz oversees the cases.
Bush Kornfeld LLP and Dentons US LLP serve as the Debtors' counsel.
Kurtzman Carson Consultants, LLC is the claims and noticing agent.
Gregory Garvin, acting U.S. trustee for Region 18, on May 24, 2019,
appointed seven creditors to serve on an official committee of
unsecured creditors. The Committee retained Sills Cummis & Gross
P.C. as its legal counsel; Polsinelli PC, as co-counsel; and
Berkeley Research Group, LLC as financial advisor.
BLACKJEWEL LLC: Ex-CEO's Bid to Liquidate Company Denied
--------------------------------------------------------
Sydney Boles of Ohio Valley Resources reports that a federal
bankruptcy judge has denied a petition from former Blackjewel coal
executive Jeff Hoops to liquidate the company. The decision means
the reorganization of the company will continue under Chapter 11
bankruptcy as former employees, creditors and state agencies seek
to recover millions owed by the company.
Mr. Hoops cited "permanent negative cash flow" at his former
company, which has accrued at least $80 million in administrative
and other expenses since its bankruptcy filing on July 1, 2019.
The nearly 3,000-filing-long Blackjewel bankruptcy docket
demonstrates an 18-month scramble by the company's creditors to
recuperate as much money as possible from a too-small pot.
According to court filings, Blackjewel also has multiple
outstanding permit violations, an unknown amount of outstanding
environmental reclamation liabilities, unpaid taxes totaling $2
million, tax liabilities of untold amounts, and millions in unpaid
employee healthcare claims.
The request to liquidate, according to coal bankruptcy expert Josh
Macey, was yet more proof that Blackjewel's future was grim.
"Given how long this bankruptcy has dragged on, how poor conditions
for coal are right now, how speculative and unprofitable
Blackjewel's assets have been, it isn't surprising that it's moving
to a liquidation," Macey said.
Federal Judge Benjamin A. Kahn did not explain in his order why he
was denying Hoops' petition to liquidate. But environmental
advocates had previously objected to the request, arguing that a
liquidation would make it less likely that certain of Blackjewel's
mining permits would be reclaimed.
Federal agencies, including the Internal Revenue Service and the
Department of the Interior, also objected to the petition to
liquidate. "The United States believes that the best course of
action is to allow the Debtors [Blackjewel] additional time to
develop a plan that would meet the requirements of Chapter 11 of
the federal bankruptcy laws and not require the Debtors to convert
to a Chapter 7 liquidation," attorneys for the agencies wrote.
Blackjewel made headlines last year after its abrupt collapse left
hundreds of Kentucky and Virginia coal miners out of work and
without pay. Environmental advocates remain concerned that some
coal mines will put strain on state mine land reclamation funds or
go unreclaimed altogether.
Hoops has been sued in the same bankruptcy court over alleged
financial mismanagement of Blackjewel and associated companies.
About Blackjewel LLC
Blackjewel L.L.C.'s core business is mining and processing
metallurgical, thermal and other specialty and industrial coals.
Blackjewel operates 32 properties, including surface and
underground coal mines, preparation or wash plants, and loadouts or
tipples. Combined, Blackjewel and its affiliates hold more than
500 mining permits. Operations are located in the Central
Appalachian Basin in Virginia, Kentucky and West Virginia and the
Powder River Basin in Wyoming.
Blackjewel L.L.C. and four affiliates filed voluntary petitions
seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
W.Va. Lead Case No. 19-30289) on July 1, 2019. Blackjewel was
estimated to have $100 million to $500 million in asset and $500
million to $1 billion in liabilities as of the bankruptcy filing.
The Hon. Frank W. Volk is the case judge.
The Debtors tapped Squire Patton Boggs (US) LLP as bankruptcy
counsel; Supple Law Office, PLLC as local bankruptcy counsel; FTI
Consulting Inc. as financial advisor; Jefferies LLC as investment
banker; and Prime Clerk LLC as the claims agent.
The Office of the U.S. Trustee on July 3, 2019, appointed five
creditors to serve on the official committee of unsecured creditors
in the Chapter 11 case of Blackjewel LLC. Whiteford Taylor &
Preston LLP is the Committee's counsel.
BLACKRIDGE TECHNOLOGY: Seeks March 1 Plan Exclusivity Extension
---------------------------------------------------------------
Blackridge Technology International and its affiliates filed a
third motion asking the U.S. Bankruptcy Court for the District of
Nevada to extend the exclusive periods during which the Debtors may
obtain confirmation of their plan of reorganization from February
1, to and including March 1, 2021.
The Debtors contend that extending the exclusivity period will help
move the chapter 11 cases toward a sensible resolution, and there
is ample "cause." The extension that the Debtors seek is neither
indefinite nor being used to force any creditor to accept an
undesirable plan. The extension of the exclusive period, therefore,
makes legal and practical sense.
In addition, the extension is not being sought in order to pressure
creditors, but rather to give the Debtors adequate time to provide
notice of the plan confirmation hearing.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/3npprKZ at no extra charge.
About Blackridge Technology
Blackridge Technology International develops, markets, and supports
a family of products that provide a next-generation cyber-security
solution for protecting enterprise networks and cloud services.
Blackridge Technology International filed a voluntary Chapter 11
petition (Bankr. D. Nev. Case No. 20-50314) on March 13, 2020. In
the petition signed by Robert J. Graham, president, the Debtor was
estimated $10 million to $50 million in both assets and
liabilities.
Judge Bruce T. Beesley oversees the case. Stephen R. Harris, Esq.,
at Harris Law Practice LLC, is the Debtor's legal counsel. The
Debtor also tapped Patagonia Capital Advisors as their investment
banker.
BLUE PRAIRIE: Seeks Plan Exclusivity Extension Thru Feb. 12
-----------------------------------------------------------
Debtor Blue Prairie Brands, Inc. requests the U.S. Bankruptcy Court
for the District of Delaware to extend the exclusive periods during
which the Debtor may file a Chapter 11 plan and solicit acceptances
for the plan through and including February 12 and April 13, 2021,
respectively.
The Debtor seeks to extend the exclusivity deadlines to afford it
additional time to exclusively formulate and implement a viable
plan and deal with the issues in their Chapter 11 case.
Since the Petition Date, the Debtor's resources were used on
numerous tasks related to maximizing the value of its assets
through, among other things, an orderly and structured sale process
for its core assets. The Debtor has now closed on the sale of its
intellectual property. Additionally, the Debtor has sold its
equipment and vacated its principal facility and the Debtor has
resolved certain claim disputes and objections. The Debtor was
focused on various critical issues related to its Chapter 11 Case,
including among other things:
(i) the preparation of the schedules and statement of financial
affairs;
(ii) negotiating debtor-in-possession financing, completing the
sale of the Debtor's key asset –- its intellectual property;
(iii) preparing the Debtor's other assets, including its equipment,
for sale via an auction process; and
(iv) preparing to vacate the Debtor's primary facility.
Also, the Debtor has been focused on monetizing its other
miscellaneous assets and determining the strategy for a plan of
liquidation. However, such a plan was predicted, in part, on
monetizing those certain insurance proceeds that were subject to a
resolution of a dispute with the Debtor's landlord. However, the
landlord has thus far failed to comply with the terms of the
settlement reached with the Debtor, such that the insurance
proceeds have not been received by the Debtor. This has inhibited
the Debtor's plan process, and the Debtor is currently evaluating
its options in light of this failure, given the delay in receiving
the insurance proceeds as originally anticipated by the settlement
with the landlord.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/2KAzf6s at no extra charge.
About Blue Prairie Brands
Blue Prairie Brands, Inc. -- https://blueprairiebrands.com -- is a
privately held functional food company dedicated to discovering,
developing, and bringing to market novel foods and ingredients that
benefit the health of consumers.
Blue Prairie Brands filed a Chapter 11 petition (Bankr. D. Del.
Case No. 19-12285) on Oct. 27, 2019. In the petition signed by
Thomas R. Burrows, authorized representative, the Debtor estimated
between $1 million and $10 million in both assets and liabilities.
Judge Brendan Linehan Shannon oversees the case. Goldstein &
Mcclintock LLP is the Debtor's legal counsel.
BORDEN DAIRY: Court Extends Plan Exclusivity Until January 4
------------------------------------------------------------
At the behest of Debtors Borden Dairy Company and its affiliates,
Judge Christopher S. Sontchi extended the periods within which the
Debtors have the exclusive right to file a plan through and
including January 4, 2021, and to solicit acceptances of the plan
to January 29, 2021.
According to the Debtors' motion to extend, the extension of the
Exclusive Periods will not prejudice the legitimate interests of
post-petition creditors as the Debtors continue to make timely
payments on their undisputed post-petition obligations.
Not long after Debtors' chapter 11 cases were filed, the global
pandemic struck, and the dairy industry, like so many others, was
adversely affected. Consequently, the Debtors were not only
presented with the challenges traditionally associated with
commencing a chapter 11 case such as stabilizing their business,
reaffirming relationships with key economic stakeholders and
vendors, and responding to the many time-consuming demands that
inevitably accompany chapter 11 filings, but also, they were forced
to respond to these challenges within the context of unprecedented
global health and economic crisis. Nonetheless, the Debtors have
made significant progress in the first ten months of the Chapter 11
Cases.
Since the most recent Prior Extension, the Debtors have continued
to diligently prosecute these Chapter 11 Cases by, among other
things:
(i) evaluating their remaining executory contracts and unexpired
leases;
(ii) engaging in mediation and negotiating a settlement with the
Committee and their equity sponsor to resolve the Committee's
objections to the D/S and Plan;
(iii) winding down their affairs in the wake of the Sale closing;
and
(iv) commencing solicitation of the D/S and Plan and otherwise
preparing for the hearing to consider approval and confirmation of
the D/S and Plan on a final basis.
A copy of the Debtor's Motion to extend is available from
donlinrecano.com at https://bit.ly/3oVVFh9 at no extra charge.
A copy of the Court's Extension Order is available from
donlinrecano.com at https://bit.ly/3865lPv at no extra charge.
About Borden Dairy
Borden Dairy Company -- http://www.bordendairy.com/-- is a
processor and direct-to-store distributor of fresh fluid milk,
dairy case products, and other beverages. It produces and
distributes a wide variety of branded and private label
traditional, flavored, and specialty milk, buttermilk, dips, and
sour cream, juices, tea, and flavored drinks to mass merchandisers,
educational institutions, food service retailers, grocery stores,
drug stores, convenience stores, food, and beverage wholesale
distributors, and retail warehouse club stores across the United
States.
Headquartered in Dallas, Borden Dairy operates 12 milk processing
plants and nearly 100 branches across the U.S. It was founded in
1857 by Gail Borden, Jr. Borden Dairy was estimated to have $100
million to $500 million in assets and liabilities as of the
bankruptcy filing. Borden Dairy and its subsidiaries sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 20-10010) on January 5,
2020.
Judge Christopher S. Sontchi oversees the case. The Debtors tapped
Arnold & Porter Kaye Scholer LLP as general bankruptcy counsel;
Young Conaway Stargatt & Taylor LLP as special counsel; and Donlin
Recano as the claims agent.
BROOKS BROTHERS: Plan Exclusivity Extended Until February 3
-----------------------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware extended the exclusive periods of Brooks
Brothers Group Inc. and its affiliates to file a Chapter 11 plan
through and including February 3, 2021, and to solicit acceptances
of the plan through and including April 5, 2021.
In their motion to extend the exclusive periods, the Debtors said
the requested extensions are both appropriate and necessary as the
chapter 11 cases are large in size and complex in nature. The
requested extensions will also give the Debtors a full and fair
opportunity to confirm a plan without the distraction, cost, and
delay of a competing plan process.
The Debtors have made significant efforts to resolve open issues
regarding numerous matters in the chapter 11 cases with the U.S.
Trustee, their creditor constituencies, and certain third parties.
Additionally, the Debtors' have ongoing discussions with the
Committee and Debtors' preparation of a chapter 11 plan and
disclosure statement, including but not limited to the following:
(i) obtaining first-day relief;
(ii) obtaining Debtor in possession financing and use of cash
collateral;
(iii) conducting a comprehensive marketing and sale process;
(iv) conducting sales of non-core assets;
(v) filing and responding to inquiries regarding schedules of
assets and liabilities and statements of financial affairs;
(vi) incorporating Debtor Brooks Brothers Canada into these Chapter
11 proceedings;
(vii) leases and executory contracts; and
(viii) establishing bar dates and supplemental bar dates.
The Debtors have pursued, obtained the approval of, and consummated
several asset sales, including the sale of substantially all of the
Debtors' assets associated with the Brooks Brothers business for
$325 million, the sale of the Debtors' Deconic jewelry business for
$2,750,000, and the sale of the Debtors' manufacturing facility in
Haverhill, Massachusetts for $14,000,000. The proceeds of these
sales have been used by the Debtors to satisfy over $300 million of
secured debt.
To that end, the Debtors have begun engaging in discussions with
the Committee regarding the plan and related documents and
procedures. The Debtors plan to file each of these documents in the
near term. Also, the Debtors continue to make timely payments on
their undisputed post-petition obligations. The Debtors have sought
to establish an administrative claims bar date for those
administrative claims arising between the Petition Date and August
31, 2020 (the date the Sale Transaction closed) to identify and
reconcile any unpaid post-petition administrative claims that arose
in the period during which the Debtors were operating their primary
business.
Now with the extensions, the Debtors now have the opportunity to
confirm a plan without the distraction, cost, and delay of a
competing plan process and will not pressure the Debtors' creditor
constituencies or grant the Debtors any unfair bargaining leverage.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/3p5jbsP at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/3mH43j1 at no extra charge.
About Brooks Brothers Group
Brooks Brothers -- https://www.brooksbrothers.com -- is a clothing
retailer with over 1,400 locations in over 45 countries. While
famous for its clothing offerings and related retail services,
Brooks Brothers is known as a lifestyle brand for men, women, and
children, which markets and sells footwear, eyewear, bags, jewelry,
watches, sports articles, games, personal care items, tableware,
fragrances, bedding, linens, food items, beverages, and more.
Brooks Brothers Group, Inc. is the Debtors' ultimate corporate
parent, which directly or indirectly owns each of the other Debtor
entities.
Brooks Brothers Group, Inc. and 12 of its affiliates filed for
Chapter 11 protection (Bankr. D. Del., Lead Case No. 20-11785) on
July 8, 2020. The petitions were signed by Stephen Marotta, chief
restructuring officer. The Debtors were estimated to have assets
and liabilities to total $500 million to $1 billion.
The Honorable Christopher S. Sontchi presides over the cases.
Richards, Layton & Finger, P.A., and Weil, Gotshal & Manges LLP
serve as counsel to the Debtors. PJ Solomon, L.P acts as investment
banker; Ankura Consulting Group LLC as financial advisor; and Prime
Clerk LLC as claims and noticing agent.
On July 21, 2020, the Office of the United States Trustee appointed
the Committee pursuant to section 1102 of the Bankruptcy Code. On
July 24, 2020, and July 27, 2020, respectively, the Committee
selected Akin Gump Strauss Hauer & Feld LLP and Troutman Pepper
Hamilton Sanders LLP as its counsel, and on July 27, 2020, the
Committee selected FTI Consulting, Inc. as its financial advisor.
BUFFALO SH: Gets OK to Hire Polsinelli as Bankruptcy Counsel
------------------------------------------------------------
Buffalo SH Partner I, LP received approval from the U.S. Bankruptcy
Court for the Northern District of Illinois to employ Polsinelli PC
as its legal counsel.
The firm will provide these services:
(a) take all necessary actions to protect and preserve the
Debtor's estate, including the prosecution of actions on the
Debtor's behalf, the defense of any actions commenced against the
Debtor, the negotiation of disputes in which the Debtor is
involved, and the preparation of objections to claims filed against
the estate;
(b) provide legal advice with respect to the Debtor's powers
and duties in the continued operation of its business;
(c) prepare legal papers;
(d) appear in court;
(e) assist with any disposition of the Debtor's assets by sale
or otherwise;
(f) take all necessary actions in connection with any plan of
reorganization and related disclosure statement;
(g) review pleadings filed in the Debtor's Chapter 11 case;
and
(h) perform all other legal services in connection with the
case.
Polsinelli will be paid at these hourly rates:
Shareholders $780 - $92
Associates $470 - $495
Paraprofessionals $230 - $390
The firm will also be reimbursed for out-of-pocket expenses
incurred.
In the 12 months preceding the petition date, the Debtor paid
$25,000 in aggregate fees and expenses (exclusive of retainers).
As of the petition date, Polsinelli holds a retainer of $25,000
after the application of payment of all of the firm's
pre-bankruptcy fees and expenses.
Jerry Switzer, Jr., Esq., at Polsinelli, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
Polsinelli can be reached at:
Jerry L. Switzer, Jr., Esq.
Trinitee G. Green, Esq.
Polsinelli PC
150 N. Riverside Plaza, Suite 3000
Chicago, IL 60606
Tel.: (312) 819-1900
Fax: (312) 819-1910
Email: jswitzer@polsinelli.com
tggreen@polsinelli.com
About Buffalo SH Partner I LP
Buffalo SH Partner I LP sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ill. Case No. 20-20671) on Nov. 24,
2020. At the time of the filing, the Debtor had estimated assets
of between $10,000,001 and $50,000,000 and liabilities of between
$1,000,001 and $10,000,000.
Judge Janet S. Baer oversees the case.
Polsinelli PC serves as the Debtor's legal counsel.
BYRD FAMILY: Taps NAI Nashville as Real Estate Broker
-----------------------------------------------------
Byrd Family Properties seeks approval from the U.S. Bankruptcy
Court for the Middle District of Tennessee to employ NAI Nashville
as its real estate broker.
The firm will assist in the sale of the Debtor's real properties
located at (i) 350 Highway 109 N. Lebanon, Tenn.; (ii) 1044
Murfreesboro Road, Lebanon, Tenn.; (iii) 1415 W. Main St., Lebanon,
Tenn.; and (iv) 7008 Charlotte Pike, Nashville, Tenn.
The firm will get a 3 percent commission on the total sale price.
Trey Kirby, the designated listing agent for NAI Nashville,
disclosed in court filings that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Trey Kirby
NAI Nashville
7105 Town Center Way, 3rd Floor
Brentwood, Tennessee 37027
Tel: +1 615 496 1296
Mobile: 16154961296
tkirby@nainashville.com
About Byrd Family Properties
Franklin, Tenn.-based Byrd Family Properties sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No.
20-03017) on July 19, 2020, listing under $1 million in both assets
and liabilities.
Timothy Stone is the Subchapter V trustee in the Debtor's
bankruptcy case. The Hon. Randal S. Mashburn is the case judge.
Denis Graham Waldron, Esq., at Dunham Hildebrand, PLLC, is the
Debtor's legal counsel.
CASA DE LAS INVESTMENTS: Hires Hinds Law Group as New Counsel
-------------------------------------------------------------
Casa De Las Investments, LLC seeks approval from the U.S.
Bankruptcy Court for the Central District of California to employ
The Hinds Law Group, APC as its new legal counsel.
Hinds Law Group will substitute for the Law Offices of Michael Jay
Berger. The firm will provide services in connection with the
Debtor's Chapter 11 case, which include:
(a) advising the Debtor of its legal rights and obligations in
a bankruptcy proceeding and ensuring the Debtor is in full
compliance with the reporting requirements of the U.S. Trustee;
(b) communicating with creditors and the Office of the U.S.
Trustee;
(c) responding to all creditors inquiries;
(d) reviewing proofs of claim and, if appropriate, filing
objections to same;
(e) filing, if appropriate, adversary proceedings; and
(f) preparing a disclosure statement and plan of
reorganization for the Debtor.
Hinds Law will be paid at these hourly rates:
Attorneys $200 - $695
Paraprofessionals $90 - $200
James Andrew Hinds, Jr., Esq., a partner at Hinds Law, disclosed in
court filings that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
Hinds Law can be reached at:
James Andrew Hinds, Jr., Esq.
Rachel M. Sposato
THE HINDS LAW GROUP, APC
21257 Hawthorne Blvd., Second Floor
Torrance, CA 90503
Tel.: (310) 316-0500
Fax: (310) 792-5977
Email: jhinds@jhindslaw.com
rsposato@jhindslaw.com
About Casa De Las Investments
Casa De Las Investments, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-14840) on May 27,
2020. At the time of the filing, Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Judge Vincent P. Zurzolo oversees the case. Debtor has
tapped the Law Offices of Michael Jay Berger as its legal counsel.
CBAV1 LLC: BTL Diffusion Buying Cloud B Assets for $2.25 Million
----------------------------------------------------------------
CBAV1, LLC, asks the U.S. Bankruptcy Court for the Eastern District
of Pennsylvania to authorize the sale of assets that include all of
the Cloud B Assets that were transferred to the Debtor in 2019, all
of the intellectual property, know how, brand names, Trade names,
Patents, models, Internet websites and domains, social networks
assets, production facilities including the molds of all products
and such, product stock, to BTL Diffusion SARL or its nominee for
$2.25 million, subject to higher and better offers.
The Debtor is a special purpose acquisition vehicle formed for the
purpose of purchasing the EWB Note from East West Bank ("EWB"). In
2011, EWB made a loan to Cloud B, Inc. To secure the repayment of
indebtedness to EWB, Cloud B signed a note in favor of EWB and
granted EWB a first position lien upon all of the assets of Cloud
B, for the benefit of EWB, its successors and assigns
On June 4, 2018, the Debtor purchased from EWB all the rights,
title and interest in and to the EWB Loan. In August 2018, Cloud B
defaulted under the EWB Loan. As of Aug. 31, 2018, the balance due
on the EWB Loan was approximately $2.3 million.
On Jan. 29, 2019, the Debtor sent a Public Notification of
Disposition of Collateral to all creditors setting forth, among
other things, Feb. 11, 2019 as the date for a UCC sale of the
collateral of Cloud B.
On Feb. 11, 2019, pursuant to the UCC Sale Notice, the Debtor
submitted the only and highest bid to purchase all of the
collateral of Cloud B. On the same day, all the Cloud B Assets
were transferred to the Debtor pursuant to the transfer statement.
The Debtor has received an offer from B the Buyer to purchase the
Assets. The Offer was negotiated at arms'-length by the Debtor and
the Buyer for the purchase price of $2.25 million, free and clear
of any and all liens, claims, encumbrances and interests. A formal
asset purchase agreement will be negotiated by the parties
concurrent with the sales process. The closing under the sale is
contemplated on Jan. 31, 2021.
The Offer contemplates the sale of the Assets to the Buyer for the
Purchase Price. The Buyer is unrelated to the Debtor or any of the
Debtor's affiliates, officers, or agents. There are no current
agreements, understandings, or arrangements, formal or informal,
oral or written, between the parties other than the terms included
in the LOI. There is no promise of future employment for any of
the Debtor’s employees. The Debtor intends to negotiate and
finalize an asset purchase agreement prior to the Bid Deadline.
The Buyer is conducting due diligence on the purchase of the Assets
and expects the closing of the sale of the Assets to be completed
by Jan. 31, 2021. The Debtor avers that the contemplated sale
provides the best-case scenario for a reasonable payment to its
creditors and the estate as a whole.
The Debtor also asks to sell the Assets subject to higher and
better offers. Accordingly, on Dec. 18, 2020, it filed its Bid
Procedures Motion. In the Bid Procedures Motion, the Debtor set an
auction for Jan. 25, 2021, three business day prior to the hearing
on the Sale Motion. The Bid Procedures Motion also sets 5:00 p.m.
(EST) on Jan. 20, 2021 as the Bid Deadline.
The minimum bid will be $2.35 million. Any initial counter bid for
the Assets must exceed the Purchase Price by $100,000 and all bid
increments thereafter will be in multiples of no less than
$100,000. The Break-up Fee is $50,000 and the Expense
Reimbursement is also $50,000 payable to the Buyer within 15 days
of closing on a competing transaction subject to Court approval.
Although the Debtor believes that the value to be provided pursuant
to the current offer (and the eventual Sale Agreement) is fair and
reasonable, the Debtor submits that the Bid Procedures and the Sale
Hearing will ensure that its estate receives the highest or best
value available by allowing the market to test the Purchase Price
for the Assets.
The Debtor submits that any monies from the Sale be used first to
satisfy any secured creditors and Administrative Creditors of the
Assets. The remaining proceeds, after satisfaction of secured
creditors and administrative creditors, will be paid to creditors
of the estate pursuant to a plan of reorganization.
Pursuant to Federal Rule ofBankruptcy Procedure 6004(b), the Debtor
asks a waiver of the stay provided under Rule 6004(b) to allow for
a closing within the 14-day period.
A copy of the LOI is available at https://bit.ly/34t0lDu from
PacerMonitor.com free of charge.
About CBAV1 LLC
Bethlehem, Pa.-based CBAV1, LLC filed a Chapter 11 petition (Bankr.
E.D. Pa. Case No. 20-14310) on Oct. 30, 2020. In its petition, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities. The petition was signed by Rachel Chell,
manager. The Hon. Patricia M. Mayer presides over the case. The
Debtor tapped Ciardi Ciardi & Astin as bankruptcy counsel, and
Field Law and Chang Tsi & Partners Limited as special counsel.
CEC ENTERTAINMENT: Rent Abatement at 6 Venues Not Possible
----------------------------------------------------------
Judge Marvin Isgur of the United States Bankruptcy Court for the
Southern District of Texas, Houston Division, denied CEC
Entertainment, Inc.'s Motion which sought the abatement of rent
payments at stores affected by government-imposed pandemic
regulations.
Numerous lessors objected to the Abatement Motion. Most of those
objections have been consensually resolved, while one has been
overruled. Six affected lessors remained:
(1) CBL & Associates Management, Inc., which is the managing agent
for a CEC venue located in Greensboro, North Carolina;
(2) Hovde Family Investments, which is the lessor of a CEC venue
located in Spokane, Washington;
(3) Lynnwood Public Facilities District, which is the lessor of a
CEC venue in the Lynnwood Convention Center in Lynnwood,
Washington;
(4) Granada Hills Partners, LLC, which is the lessor at a CEC venue
located in Granada Hills, California;
(5) Portal Plaza LP, which is the lessor of a CEC venue located in
Cupertino, California; and
(6) South Bay SPE, LLC, which is the lessor of a CEC venue in
National City, California.
CEC contended that prior to the pandemic, CEC venues offered a
combination of gaming, entertainment, and dining. It further
conteded that CEC venues were primarily geared towards entertaining
groups of children. James Howell, CEC's Chief Financial Officer,
explained that "when you come to Chuck E. Cheese, you're looking
for, again, food and fun. You're coming for the games, primarily,
and you will eat the food while you are there." Most CEC venues
generate about 30% of their revenue from dining and 50% from
entertainment.
CEC said that when the global pandemic struck, state and local
governments responded by enacting regulations aimed to limit social
gathering. CEC also said that those regulations prohibited the
operation of certain types of business and limited the operations
of others. CEC added that the states of North Carolina, Washington,
and California enacted regulations that impact CEC's business in
three primary ways. First, the regulations prohibit the operation
of gaming and arcade establishments. Second, the regulations
restrict the capacity of in person dining. Third, the regulations
prohibit large group gatherings.
CEC argued that sections 365(d)(3) and 105(a) of the Bankruptcy
Code gave the Court equitable power to alter CEC's rent
obligations. CEC said that alternatively, it believes that the
global pandemic and related government regulations are force
majeure events which allow it to delay contractual performance
under its leases. CEC further argued that, if neither the
Bankruptcy Code nor the force majeure clauses permit rent
abatement, the doctrine of frustration of purpose relieves CEC's
obligation to timely pay rent.
Judge Isgur held that "while the Bankruptcy Code allows the Court
to delay performance of CEC's lease obligations, the Code expressly
prohibits delays beyond sixty days after the order for relief.
That period has expired. The Bankruptcy Code does not provide the
Court with authority to alter lease obligations beyond that
sixty-day window. Of course, if abatement was authorized under
applicable non-bankruptcy law, the sixty-day limitation would not
apply. However, neither the leases nor state laws allow CEC to
abate or reduce its rent obligations at these locations."
The case is IN RE: CEC ENTERTAINMENT, INC., et al PETER PIPER
TEXAS, LLC, PETER PIPER, INC., BHC ACQUISITION CORPORATION, CEC
ENTERTAINMENT CONCEPTS, L.P., CEC ENTERTAINMENT HOLDINGS, LLC, CEC
ENTERTAINMENT INTERNATIONAL, LLC, CEC ENTERTAINMENT LEASING
COMPANY, CEC LEASEHOLDER, LLC, CEC LEASEHOLDER #2, LLC, HOSPITALITY
DISTRIBUTION INCORPORATED, PETER PIPER HOLDINGS, INC., PETER PIPER
MEXICO, LLC, QUESO HOLDINGS INC., SB HOSPITALITY CORPORATION, SPT
DISTRIBUTION COMPANY, INC., TEXAS PP BEVERAGE, INC., Chapter 11,
Debtors, Lead Case No. 20-33163, (Bankr. S.D. Tex.). A full-text
copy of the Memorandum Opinion, dated December 14, 2020, is
available at https://tinyurl.com/y9aqh5d8 from Leagle.com. A
full-text copy of the Order Denying Debtor's Motion for Order
Authorizing Debtors to Abate Rent Payments at Stores Affected by
Governmental Regulations, dated December 14, 2020, is available at
https://tinyurl.com/yazff27l from Leagle.com.
About CEC Entertainment
CEC Entertainment -- http://www.chuckecheese.com-- is a family
entertainment and dining company that owns and operates Chuck E.
Cheese and Peter Piper Pizza restaurants. As of Dec. 31, 2019, CEC
Entertainment and its franchisees operated a system of 612 Chuck E.
Cheese restaurants and 129 Peter Piper Pizza stores, with locations
in 47 states and 16 foreign countries and territories.
As of Dec. 29, 2019, CEC Entertainment had $2.12 billion in total
assets, $1.90 billion in total liabilities, and $213.78 million in
total stockholders' equity.
On June 24, 2020, CEC Entertainment and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Tex. Lead Case No. 20-33163). Judge Marvin Isgur oversees the
cases.
The Debtors have tapped Weil, Gotshal & Manges, LLP as bankruptcy
counsel, FTI Consulting, Inc. as financial advisor, PJT Partners LP
as investment banker, Hilco Real Estate, LLC as real estate
advisor, and Prime Clerk, LLC, as claims, noticing and solicitation
agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on July 13, 2020. The committee has tapped Kelley Drye &
Warren, LLP and Womble Bond Dickinson (US), LLP as its legal
counsel, and Alvarez & Marsal North America, LLC as its financial
advisor.
CELADON GROUP: HQ Sold for $3 Million a Year After Shutdown
-----------------------------------------------------------
CDL Life reports that Celadon headquarters sell for $3 million one
year after sudden shutdown that left thousands of drivers jobless.
Celadon Group Inc. has completed the multi-million dollar sale of
company facilities located in Indiana, just over a year after
closing their doors for good.
On Dec. 17, 2020, the sale of the Celadon property located on the
east side of Indianapolis, Indiana, sold for $3 million to the
Indianapolis Public Transportation Corporation, also known as
IndyGo.
IndyGo will use the 11 acre site to provide extra room for
administrative workers in addition to providing parking for the
city's busses, according to a report from the Indianapolis Star.
The sale of the property comes just over a year after Celadon
abruptly ceased operations.
On December 9, 2019, Celadon officially filed for Chapter 11
bankruptcy protection and announced that they were immediately
shutting down their operations. An estimated 4,000 Celadon workers
were suddenly laid off weeks before Christmas, including thousands
of truck drivers.
The bankruptcy and closure news came just days after the Department
of Justice (DOJ) announced that two former executive officers with
Celadon would face charges related to fraud and lying to investors.
Earlier in 2019, Celadon agreed to pay $42.2 million in
restitution to shareholders for "filing materially false and
misleading statements to investors and falsifying books, records
and accounts."
Celadon was founded in 1985 and was the largest provider of
international truckload services in North America, operating 3,300
tractors and 10,000 trailers at the time of the bankruptcy.
About Celadon Group
Celadon Group, Inc., is a North American truckload freight
transportation company, primarily providing point-to-point
shipping, warehousing, supply chain logistics, tractor leasing and
other transportation and logistics services for major customers
throughout North America. Visit https://celadontrucking.com/ for
more information.
Celadon Group and 25 affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12606) on
Dec. 8, 2019, and announced that they were immediately shutting
down their operations. An estimated 4,000 Celadon workers were
suddenly laid off weeks before Christmas, including thousands of
truck drivers.
As of Dec. 2, 2019, the Debtors disclosed $427 million in assets
and $391 million in liabilities.
Judge Karen B. Owens oversees the cases.
The Debtors have tapped DLA Piper LLP (US) as bankruptcy counsel,
Scudder Law Firm, P.C., L.L.O. as special counsel, Alixpartners,
LLP as financial advisor, and Receivables Control Corporation (RCC)
as receivables management agent. Kurtzman Carson Consultants, LLC,
is the notice, claims and balloting agent and administrative
advisor.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on Dec. 18, 2019. The committee is represented by Cooley
LLP.
CENGAGE LEARNING: Moody's Hikes CFR to B3, Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service upgraded Cengage Learning, Inc.'s ratings
by two notches, including its Corporate Family Rating to B3 from
Caa2, and changed the outlook to stable from negative.
The upgrade and change to a stable outlook reflect the company's
improved liquidity following the extension of the ABL revolver
maturity to October 2023 and its operating performance that was
ahead of prior projections. The better than anticipated operating
results were driven by digital adoptions supporting sales growth in
the higher education segment despite enrollment declines of around
4% and Cengage's ability to effectively manage costs and working
capital amid the COVID-19 pandemic. The rating action also reflects
Moody's view that a portion of the cost actions Cengage took in
response to the pandemic will be permanent, which will further
support the recovery post pandemic. In the first half of fiscal
2021, Cengage reduced its costs by $72 million, a 17% reduction
from the same period last year, and is on track to save roughly $60
million in costs for full fiscal 2021.
Moody's took the following actions:
Issuer: Cengage Learning, Inc.
Ratings Upgraded:
Corporate Family Rating, upgraded to B3 from Caa2
Probability of Default Rating, upgraded to B3-PD from Caa2-PD
$1,710 million Senior Secured Term Loan due 2023: upgraded to
B2 (LGD3) from Caa1 (LGD3)
$620 million Senior Unsecured Notes due 2024; upgraded to Caa2
(LGD5) from Caa3 (LGD5)
Outlook Action:
Outlook is changed to Stable from Negative
RATINGS RATIONALE
Cengage's B3 CFR reflects continued secular challenges pressuring
the higher education segment, including affordability-driven price
compression, intensely competitive markets, rental and used
textbooks and open educational resources. The rating also reflects
the company's highly seasonal business with high leverage at 7.2x
when calculated on a cash EBITDA basis (including the change in
deferred revenue and with cash prepublication costs expensed) and
with Moody's standard adjustments as of LTM 9/2020.
Cengage's rating continues to be supported by its well established
brand, good market position, long-standing relationships with
education institutions, proprietary content developed through
long-term exclusive relationships with leading authors and broad
range of product offerings in higher education publishing. The
company's Cengage Unlimited and Cengage Unlimited eTextbooks
products position it favorably to expand its share in the higher
education market, as on-line learning continues to expand.
The rapid move to a virtual classroom during the coronavirus
pandemic has accelerated advances in online courseware delivery
that might have taken much longer before the pandemic. This
transformation supports digital revenue growth for Cengage and lays
a pathway for a more efficient cost structure in the longer term,
with lower inventory levels and lower earnings volatility
associated with estimation of future period print returns.
The company's adjusted cash revenue declined roughly 7% in FYE
3/2020 and for the six months ending September 30, 2020 from the
same period last year. Moody's expects that revenues will decline
in the low- to mid- single digits for the full fiscal 2021 and grow
slowly in fiscal 2022 driven by adoption share gains, digital unit
and online skills business growth, and a recovery in the
international business offset by low-single digit enrollment
declines in higher education. Moody's projects that the company's
cost reductions taken during the pandemic, a portion of which will
become permanent, coupled with acceleration in digital product
sales, will drive EBITDA and leverage improvements, with Debt/cash
EBITDA declining to the 6.2x -- 6.5x range over the next 12-18
months. While an improvement, this leverage is still high for a
highly seasonal business that generated roughly 55% of revenues and
74% of FYE 3/20 EBITDA less pre-publication costs in the 2nd and
4th fiscal quarters, which coincide with the academic calendar.
The stable outlook reflects Moody's expectations for Debt/cash
EBITDA in the 6x -- 6.5x range, good liquidity, and
creditor-friendly financial strategies emphasizing repayment of
debt. The stable outlook also anticipates Cengage will repay or
refinance its 2023 debt maturities well in advance of their due
dates.
ESG CONSIDERATIONS
The key social risks in the education publishing sector lies in
evolving demographic and societal trends and particularly in the
way students choose to study and consume learning materials. As
affordability of textbooks and learning materials are important to
students and higher education institutions, less expensive
alternatives to print textbooks emerged. This social trend resulted
in a multi-year precipitous decline in average spend per student on
learning materials. Publishers, including Cengage, are responding
by growing digital offerings that provide extra value to students.
The coronavirus outbreak is accelerating the transformational
social changes impacting courseware publishers. The move toward
online and hybrid education (a combination of online and on-campus)
has accelerated with the pandemic forcing many previously reluctant
universities and K-12 schools to launch or expand digital
capabilities, driving up the demand for the courseware publishers'
digital solutions. The closure of physical facilities has led to an
accelerated transition to various forms of remote learning and to a
broader adoption of digital courseware. Moody's regards the
coronavirus outbreak as a social risk under our ESG framework,
given the substantial implications for public health and safety.
LIQUIDITY & STRUCTURAL CONSIDERATIONS
Cengage has good liquidity, supported by a sizable $428 million
cash balance as of September 30, 2020, and fully available ABL
revolver maturing in October 2023. Moody's projects that cash on
hand and externally generated cash flow will be sufficient to fund
the company's highly seasonal cash needs and 1% (or $17 million)
annual term loan amortization over the next 12-18 months. Cash flow
needs are highly seasonal with working capital swings of roughly
$100-$150 million as the majority of sales occur in Q2 and Q4
driven by sales of digital product and courseware. The ABL revolver
(with no outstanding balance and $186 million borrowing base as of
September 30, 2020) provides adequate backup for seasonal cash
needs. Of the total $225 million ABL commitments, $18.45 million
matures in June 2021 and the remaining $206.55 million matures on
October 29, 2023 (or 91 days prior to June 7, 2023, if any of the
company's term loans due 2023 are then outstanding). Moody's does
not expect availability on the revolver to fall below the lesser of
$25 million or 10% of the borrowing base that would trigger the
requirement to maintain a minimum 1.0x fixed charge coverage ratio.
If the covenant ratio were to be tested over the next 12-18 months,
Moody's expects that there will be an adequate headroom over the
requirement.
The $1.7 billion senior secured term loan is rated one notch above
the CFR, reflecting the debt cushion from the $620 million Senior
Unsecured Notes. The term loan does not have any financial
covenants. The $620 million Senior Unsecured Note is rated Caa2 due
to its subordination to the company's $225 million asset backed
lending facility and the senior secured term loan.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Cengage is able to consistently grow
revenue and demonstrate earnings growth resulting in debt-to-cash
EBITDA being sustained comfortably below 5x and is committed to
operating at that leverage level. Good liquidity with cash balances
being more than sufficient to cover outflows including seasonal
working capital swings and with free-cash flow-to-debt being
sustained in the mid- single-digit percentage range or better,
would also be needed for an upgrade.
Moody's defines cash EBITDA as EBITDA with cash prepublication
costs expensed, adjusting for deferred revenue and including
Moody's standard accounting adjustments.
Cengage ratings could be downgraded if market conditions or
competitive pressures lead to earnings decline, resulting in
debt-to-cash EBITDA sustained above 6.5x or free cash flow turning
negative. A weakening of liquidity including through such factors
as significant revolver usage, diminishing cash balance or elevated
refinancing risk, would also pressure the company's ratings.
Aggressive financial policy, including debt-funded acquisitions or
distributions to owners, could also lead to a downgrade.
The principal methodology used in these ratings was Media Industry
published in June 2017.
Headquartered in Boston, Cengage Learning, Inc. is a provider of
learning solutions, software and educational services for the
higher education, research, school, career, professional, and
international markets. Large shareholders currently include Apax
Partners, KKR and Searchlight Capital as well as other creditors
who became shareholders upon exit from the Chapter 11 bankruptcy in
2014. Revenue for the last twelve months ended September 30, 2020
totaled $1.24 billion.
EBONY MEDIA: Court Okays Sale to Former NBA Player for $14 Million
------------------------------------------------------------------
Law360 reports that a Texas bankruptcy judge Tuesday, December 23,
2020, approved the sale of the bankrupt owner of long-running Black
cultural magazines Ebony and Jet to a company owned by a former NBA
player for $14 million.
At a brief remote hearing, U.S. Bankruptcy Judge David Jones
approved Ebony Media Operations' sale to Bridgeman Sports and Media
LLC, noting that the process -- which included the removal of
Ebony's board after directors struck a deal with a prospective
rival bidder -- had taken "a turn here and a turn there.
Bridgeman Sports is owned by Ulysses 'Junior' Bridgeman, a former
NBA player. Bridgeman, 67, was a Milwaukee Bucks forward who
retired in 1987 after 12 years in the NBA. He became a successful
fast-food restaurant franchisee after retirement from basketball.
He sold his restaurant interests and in 2017 launched Heartland
Coca-Cola Bottling Co., a Kansas-based facility whose distribution
territory includes Kansas, Missouri, and Southern Illinois.
About Ebony Media
Ebony Media Holdings LLC is the publisher of Black cultural
magazines Ebony and Jet.
Creditors Parkview Capital Credit Inc. and David M. Abner &
Associates, Plum Studio filed involuntary Chapter 7 petitions
against Ebony Media Operations, LLC, and Ebony Media Holdings LLC
(Bankr. S.D. Tex. Case No. 20-33665 and 20-33667) on July 23,
2020.
The court on Sept. 3, 2020, entered an order approving a
stipulation signed by the Debtors and the petitioners to an entry
of order for relief in the bankruptcy cases and the conversion of
the cases to cases under Chapter 11 of the Bankruptcy Code.
The Debtors tapped Pendergraft & Simon, LLP as their legal counsel,
FTI Capital Advisors, LLC as investment banker, and The Claro
Group, LLC as restructuring advisor. Robert Ogle, senior advisor
at Claro Group, is the Debtors' chief restructuring officer.
ELANCO ANIMAL: Moody's Completes Review, Retains Ba1 CFR
--------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Elanco Animal Health Incorporated and other ratings that
are associated with the same analytical unit. The review was
conducted through a portfolio review in which Moody's reassessed
the appropriateness of the ratings in the context of the relevant
principal methodology, recent developments, and a comparison of the
financial and operating profile to similarly rated peers. The
review did not involve a rating committee. Since January 1, 2019,
Moody's practice has been to issue a press release following each
periodic review to announce its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
KEY RATING CONSIDERATIONS
Elanco's Ba1 Corporate Family Rating reflects its high financial
leverage following the acquisition of Bayer's animal health
business as well as the risks associated with integrating the Bayer
business without material disruption and cost overruns. The rating
is supported by Elanco's scale and profitability as the second
largest animal health company globally. Once fully integrated,
Elanco's profitability and free cash flow will be significant,
affording stronger deleveraging in the future. The rating also
reflects Moody's view that the animal health industry has lower
business risk than many other healthcare sectors and has a number
of tailwinds that will drive growth over the long-term.
The principal methodology used for this review was Manufacturing
Methodology published in March 2020.
ENGINEERED PROPULSION: Plan Exclusivity Extended to March 26
------------------------------------------------------------
At the behest of Debtor Engineered Propulsion Systems, Inc., the
Honorable G. Michael Halfenger of the U.S. Bankruptcy Court for the
Western District of Wisconsin extended the periods within which the
Debtor has the exclusive rights to file a plan and to solicit
acceptances to March 26 and May 25, 2021, respectively.
The Debtor said in its motion that the extension will support a
number of important objectives:
(i) it will permit time for the Debtor to move forward with and
focus on the Bid Procedures and Sale Motion;
(ii) it will provide some breathing room in the (unlikely) event
that the sale of the Debtor’s assets is delayed, or negatively
impacted by the continuing COVID-19 pandemic; and
(iii) it will provide the time that the Debtors will need to go
through the claims review process, including potentially the
resolution of other claims objections that may be material to plan
confirmation.
The extension will also provide the Debtor with the additional time
needed to address and resolve other pending matters, in order to
propose a confirmable chapter 11 plan for the benefit of all
creditors and investors.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/3mQTevV at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/3qwHoJs at no extra charge.
About Engineered Propulsion Systems
Engineered Propulsion Systems, Inc., a manufacturer of aircraft
engines and engine parts in New Richmond, Wis., filed a Chapter 11
petition (Bankr. W.D. Wis. Case No. 20-11957) on July 29, 2020.
Engineered Propulsion president Michael Fuchs signed the petition.
At the time of the filing, the Debtor was estimated to have $100
million to $500 million in assets and $10 million to $50 million in
liabilities.
Judge G. Michael Halfenger oversees the case. The Debtor tapped
Steinhilber Swanson, LLP as its bankruptcy counsel; Jarchow Law,
LLC as its general corporate counsel; and Shaun M. Simma, CPA, and
Simma Flottemesch & Orenstein, Ltd. as accountants.
EXPO CONSTRUCTION: Seeks Plan Exclusivity Extension Thru March 31
-----------------------------------------------------------------
Debtor Expo Construction Group, LLC requests the U.S. Bankruptcy
Court for the Southern District of Texas, Houston Division, to
extend the exclusive periods during which the Debtor may file a
Chapter 11 plan and solicit acceptances for the plan through and
including March 31, 2021.
In its motion, the Debtor said that by March 2021, it hopes to
recover from the pandemic, making it possible for them to
reorganize. By allowing the Debtors to have until March 31, 2021,
the Debtor is optimistic that they will be able to reorganize and
emerge successfully from chapter 11.
Most of the Debtor's work was based on new hotel construction. The
worldwide pandemic made it hard for the Debtor to get new projects,
as all hotel owners are not making any money. To add, since most
businesses are slow and closing down due to COVID-19, the Debtor
had a potential customer that was planning to build hotels and now
has stopped.
Also, since the economy is down, it is getting harder for a bank to
approve new construction loans. The Debtor has a potential project
to manage the construction for the hotel owner but the owner is
still waiting on the City to approve the plans. The City is taking
a long time to approve new construction plans since most people are
working from home. All those issues caused delays for the Debtor's
ability to reorganize.
Hotels are not making any money so all future hotel projects are on
hold. The hotel owners the Debtor is still working with have a few
projects but they can't start any since they are waiting on the
bank loans and the City's approval of the said plans. The Debtor
doesn’t have the finances to invest in large projects, thus the
Debtor has been focusing on getting smaller projects.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/3mVMnkJ at no extra charge.
About Expo Construction Group
Expo Construction Group, LLC, a Houston-based general contractor,
filed a voluntary petition for relief under Chapter 11 of the
United States Code (Bankr. S.D. Texas Case No. 20-34099) on August
18, 2020. Melida Taveras, a managing member, signed the petition.
At the time of filing, the Debtor estimated $100,000 to $500,000 in
assets and $1 million to $10 million in liabilities. The Law Office
of Margaret M. McClure serves as the Debtor's legal counsel.
FARM-RITE INC: Court Extends Plan Exclusivity Until March 5
-----------------------------------------------------------
At the behest of Debtor Farm-Rite Inc., the Honorable Judge Jerrold
N. Poslusny, Jr. extended the period within which the Debtor has
the exclusive rights to file a chapter 11 plan to and including
March 5, 2021, and to solicit acceptances of the plan to and
including May 4, 2021.
In its motion to extend, the Debtor said that although they have
made significant progress towards reorganization since the Petition
Date, including streamlining operations and reducing costs, the
Debtor believes that the additional extension will give them the
opportunity to pursue and formulate a feasible plan, allowing them
to negotiate with creditors and determine an appropriate plan that
may provide for refinancing or a sale of the company as a going
concern.
The Debtor also submitted that an extension of the Exclusive
Periods is fully justified because, among other things:
a. Extension of the Exclusive Periods will not prejudice any party
in interest.
b. All creditors will benefit from an extension of exclusivity that
would allow the Debtor additional time to negotiate with creditors
and determine an appropriate plan that may provide for refinancing
or a sale of the company as a going concern.
c. If a creditor files a competing plan that would benefit it in
the short run but cease operations it might harm all other parties
in interest over time and would not be in the best interests of the
estate.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/3quWPSx at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/3otUGVg at no extra charge.
About Farm-Rite Inc.
Farm-Rite Inc. offers agriculture, construction, commercial
irrigation, and commercial landscaping equipment. Bridgeton,
N.J.-based Farm-Rite filed for Chapter 11 bankruptcy (Bankr. D.N.J.
Case No. 20-19379) on August 7, 2020.
In its petition, the Debtor estimated $10 million to $50 million in
both assets and liabilities. The petition was signed by Donald C.
Strang, president.
The case is assigned to Judge Jerrold N. Poslusny, Jr. The Debtor
tapped Arthur J. Abramowitz, Esq., at Sherman Silverstein Kohl Rose
& Podolsky, as the Debtor's counsel and Karpac & Company as
accountant.
FLAME SEAL: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Flame Seal Products, Inc.
15200 West Dr.
Houston, TX 77053
Business Description: Flame Seal Products, Inc. manufactures
fire retardant coatings and penetrants.
Chapter 11 Petition Date: December 22, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 20-60094
Judge: Hon. Christopher M. Lopez
Debtor's Counsel: Richard Lee Fuqua II, Esq.
FUQUA & ASSOCIATES, P.C.
8558 Katy Freeway
Suite 119
Houston, TX 77024
Tel: (713) 860-0277
Email: RLFuqua@FuquaLegal.com
Total Assets: $553,926
Total Debts: $1,073,541
The petition was signed by Craig Keyser, 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/XERNNNA/Flame_Seal_Products_Inc__txsbke-20-60094__0001.0.pdf?mcid=tGE4TAMA
FRIENDS OF CITRUS: Court Extends Exclusivity Period Thru March 8
----------------------------------------------------------------
At the behest of Friends of Citrus And The Nature Coast, Inc.,
Judge Michael G. Williamson extended the Debtor's exclusive rights
to file a plan through and including March 8, 2021, and to solicit
acceptances for the chapter 11 plan to and including May 5, 2021.
In its fifth motion to extend the exclusive periods, the Debtor
said that the extension is needed, given the global Covid-19
related delays, and the current posture of the Vitas Litigation.
The Debtor is not seeking an extension as a delay tactic and
believes that once the court has decided the Vitas Litigation, it
will be able to settle with the United States and propose a plan.
The factors favor extending the Exclusivity Periods in the instant
case for the reasons that follow:
(a) the Debtor and Vitas of Florida, Inc., the pre-petition
purchaser of the Debtor's hospice assets, have been unable to
amicably resolve outstanding claims for recovery of money that the
Debtor believes is owed by Vitas. To that end, the Court held an
evidentiary hearing on the Debtor's Objection and Motion for
Turnover and Vitas' Response on November 10, 12, and 13, 2020, and
continued the same to December 8, 2020; and
(b) the United States filed a proof of claim for an amount of
approximately $2,000,000 that remains due that arose from the
Debtor's previous hospice operations within the 12-counties of
Florida's Nature Coast. The claim pertains to a 2015 DOJ Settlement
Agreement arising from a Zone Integrity Program Contractor's (ZPIC)
audit of the Debtor's Medicare-certified hospice. The Debtor and
the United States are amenable to negotiate a reduction of the same
however, the United States will not negotiate a reduction of its
claim until the Vitas Litigation is resolved.
Also, it is important to note that the Debtor is a not-for-profit
entity that wishes to continue its charitable mission of providing
grief counseling in the Nature Coast and is hoping to retain a
portion of its cash after negotiating a favorable reduction of the
DOJ Settlement Agreement amount so that a plan can be formulated on
a totally consensual basis.
Additionally, during their fourth extension period, the Debtor
settled its objections to claims on the three nursing home claims
(the Greystone Claimants) and received court approval to enter into
a plan support agreement with the Greystone Claimants once the
Vitas Litigation is resolved.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/33VROZB at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/39RV0Jr at no extra charge.
About Friends of Citrus And The Nature Coast
Friends of Citrus And The Nature Coast, Inc. --
https://friendsofcitrus.org/ -- is a charitable organization
providing community grief support workshop for anyone who has
experienced a loss; telephone support; grief support resources for
all ages; educational materials for parents and teachers; and
children's grief support camps.
Friends of Citrus And The Nature Coast, Inc. filed a voluntary
petition in this Court for relief under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-03101) on Aug. 14,
2019. On Aug. 15, 2019, the case was transferred to Tampa Division
and was assigned a new case number (Case No. 19-07720).
In the petition signed by Bonnie L. Saylor, chief executive
officer, Friends of Citrus estimated $7,510,918 in assets and
$5,283,937 in liabilities.
Judge Michael G. Williamson oversees the case. Frank P. Terzo,
Esq. and Nicolette Corso Vilmos, Esq., at Nelson Mullins Broad and
Cassel serves as the Debtor's legal counsel.
GENNADY MOSHKOVICH: $21.2M Sale of Beverly Hills Property Approved
------------------------------------------------------------------
Judge Sheri Bluebond of the U.S. Bankruptcy Court for the Central
District of California authorized Gennady Moshkovich's sale of his
personal residence located at 911 Loma Vista Dr., Beverly Hills,
California to Yarden Consulting, LLC and/or its assignee for $20.4
million, cash, plus $800,000 for certain furniture in the Real
Property, pursuant to the California Residential Purchase Agreement
and Joint Escrow Instructions and related sale documents.
A hearing on the Motion was held on Dec. 2, 2020 at 10:00 a.m.
The sale is free and clear of any and all Interests, with such
Interests to attach to the proceeds of the Real Property Purchase
Price to be received by the Debtor from the sale of the Real
Property.
The Overbid Procedures are approved. The Debtor did not receive
any timely Overbids conforming with the Overbid Procedures.
The parties are authorized to take any and all actions reasonably
necessary to consummate the sale of the Property pursuant to the
Final Purchase Agreements and the Sale Order.
The 14-day stay period set forth in F.R.B.P. Rule 6004(h) is waived
to enable the sale of the Real Property and Personal Property to
close as quickly as possible.
A certified copy of the Sale Order may be filed with the
appropriate clerk and/or recorded with the county recorder to
cancel any deeds of trust, liens, and encumbrances of record, or
other RP Interests and PP Interests, except the Excepted Items.
Any federal, state or local government unit that accepts notices of
interests or liens in real or personal property will accept any
certified copy of the Sale Order for indexing and recording.
In regard to the Real Property, upon closing, the Debtors and the
escrow company are authorized and directed to pay from the proceeds
of the sale of the Real Property out of escrow: (a) any accrued
pre-closing real property taxes secured by the Real Property, (b) a
commission equal to 1% of the purchase price be paid to and split
by Rodeo Realty and Douglas Elliman (i.e., the Current Brokers),
(c) a commission equal to 2% of the purchase price to be paid to
the broker representing the Buyer, (d) the loan secured by the
first position deed of trust on the Real Property based on a
non-expired contractual payoff statement received directly from
Select Portfolio Servicing, Inc., servicing agent for, CSMC
2018-SP3 Trust, which will be paid in full, provided that Select
Portfolio will provide the Debtor's counsel with a copy of the
payoff statement submitted to escrow and Select Portfolio's first
position deed of trust to secure any disputed portion of the claim
will attach to the proceeds of the sale of the Real Property with
the same extent and priority and subject to the same defenses and
avoidability, if any, as before the closing of the sale of the Real
Property to the Buyer and not be released without further order of
the Court or joint agreement by the Debtor and Select Portfolio,
and (e) quarterly fees payable to the United States Trustee based
on disbursements from the proceeds of the sale of the Real
Property.
BOBS, LLC's alleged deed of trust and lien will attach to the
proceeds from the sale of the Real Property.
In regard to the Personal Property, upon closing, the Debtor and
the escrow company are authorized and directed to pay from the
proceeds of the sale of the Personal Property out of escrow: (a)
certain escrow closing fees and charges allocated to the Debtor in
connection with the sale of the Real Property and the Personal
Property as set forth in the Final Purchase Agreements and, to the
extent not addressed in the Final Purchase Agreements, closing fees
and charges customarily charged to the seller in Los Angeles
County, (b) the loan secured by the first position lien on the
Personal Property based on a non-expired payoff statement received
directly from JWR Law, LLC, which will be paid in full, provided
that JWR Law, will provide the Debtor's counsel with a copy of the
payoff statement submitted to escrow and JWR Laws first position
lien to secure any disputed portion of the claim will attach to the
proceeds of the sale of the Personal Property with the same extent
and priority and subject to the same defenses and avoidability, if
any, as before the closing of the sale of the Personal Property to
the Buyer and not be released without further order of the Court or
joint agreement by the Debtor and JWR Law, LLC, and (c) the balance
of proceeds from the sale of the Personal Property to the Debtor.
Provided that the Buyer has deposited the Total Purchase Price into
escrow, by no later than noon on the date that the sale under the
Final Purchase Agreements is supposed to close, the Debtor will
vacate the Real Property and deliver it to the Buyer free of any
occupancy by the Debtor or any other party and free of any personal
property other than personal property to remain at the Real
Property under the terms of the Final Purchase Agreements.
If the Real Property has not been vacated by noon on the Closing
Date, (a) Buyer may postpone the Closing Date and, immediately upon
the filing of a declaration by Buyer that the Debtor has not
complied with the requirements set forth in the immediately
preceding sentence, (b) the Court will instruct the Clerk to
immediately issue a Writ of Possession, ordering possession against
Debtor and all others in possession of the Property and that the
Los Angeles County Sheriff or United States Marshal immediately
post such Writ of Possessions at the Property and immediately
remove the Debtor and all others in possession of the Property from
the Property as applicable under state or federal law, and (c)
escrow will close two (2) business days after Buyer receives notice
that the Real Property has been vacated of all occupants.
Notwithstanding FRBP 6004 and 7062, the Sale Order will be
effective and enforceable immediately upon entry, and the Motion or
notice thereof will be deemed to provide sufficient notice of the
Debtor's request for waiver of the otherwise applicable stay of the
Sale Order.
Gennady Moshkovich sought Chapter 11 protection (Bankr. C.D. Cal.
Case No. 20-11547) on Feb. 12, 2020. The Debtor tapped David
Golubchik, Esq., as counsel.
GUITAR CENTER: To Emerge From Bankruptcy by Year End
----------------------------------------------------
Dylan Smith of Digital Music News reports that about one month
after formally moving to restructure its debts, Guitar Center has
been cleared to exit Chapter 11 bankruptcy.
The 61-year-old music-retailer chain recently announced that a
Virginia bankruptcy court had approved its reorganization plan. As
detailed in November 2020's release concerning the intention to
pursue bankruptcy options, Guitar Center is preparing to emerge
from Chapter 11 by the end of 2020, adopting "a strengthened
capital structure that will eliminate more than $800 million of
existing debt."
The Westlake Village-headquartered company raised $350 million via
senior secured notes (up from the $335 million that it had planned
on generating) and is set to benefit from "a new $375 million
secured asset based financing facility" fronted by "several banks
led by Wells Fargo and JPMorgan." Plus, funds from Ares Management,
Brigade Capital, and The Carlyle Group have committed some “$165
million in new equity investments," for a grand total of $890
million worth of operational capital.
Guitar Center intends to utilize the cash "to support ongoing
operations, invest in its strategic growth initiatives and execute
its business plan," according to the release. Additionally, Guitar
Center CEO Ron Japinga struck an optimistic tone in the
announcement message.
"This approval represents a momentous and positive milestone in our
long-term strategy. Throughout this process, we have continued to
serve our customers in-store and online, helping even more people
make music during these unique times," said the former Kohls and
Macy's exec in a statement.
"I am grateful for our customers, associates, vendors and other
partners for their unwavering support throughout this process.
With our strengthened financial position, we will continue to
reinvest and grow our business. We are nearing the end of a
successful holiday season and I am excited about our bright
future," finished Japinga, who’s been with Guitar Center for
about six and a half years.
The far-reaching economic fallout of the coronavirus crisis has
prompted several other music industry companies to file for
bankruptcy -- or cease operating altogether.
About Guitar Center
Guitar Center, Inc., headquartered in Westlake Village, Cal., is
the largest musical instrument retailer with 312 stores and a
direct response segment, which operates its Web sites. It operates
three distinct musical retail business -- Guitar Center (about 70%
of revenue), Music & Arts (about 7% of revenue), and Musician's
Friend (its direct response subsidiary with 24% of revenue). Total
revenue is about $2 billion.
Guitar Center disclosed a net loss of $72.16 million in 2012, a
net
loss of $236.93 million in 2011 and a $56.37 million net loss in
2010.
Guitar Center, Inc., and 7 of affiliates sought Chapter 11
protection (Bankr. E.D. Va. Lead Case No. 20-34656) on Nov. 21,
2020. Guitar Center was estimated to have $1 billion to $10 billion
in assets and liabilities as of the bankruptcy filing.
The Hon. Kevin R. Huennekens is the case judge.
The Debtors tapped Milbank LLP as general bankruptcy counsel;
Houlihan Lokey Inc. as investment banker; Berkeley Research Group
LLC as operational and financial advisor; Hunton Andrews Kurth LLP
as local bankruptcy counsel; Lyons, Benenson & Company Inc. as
compensations consultant; A&G Realty Partners, LLC as real estate
consultant and advisor; and KPMG LLP to provide audit, tax
compliance and consulting services. Prime Clerk LLC is the claims
agent.
Stroock & Stroock & Lavan LLP is serving as legal counsel to an ad
hoc group of Secured Noteholders and Province is serving as
financial advisor. Kirkland & Ellis LLP is serving as legal counsel
to Ares Management Corporation. Debevoise & Plimpton LLP is
serving as legal counsel to Brigade Capital Management and GLC
Advisors & Co. is serving as financial advisor. Paul, Weiss,
Rifkind, Wharton & Garrison LLP is serving as legal counsel to The
Carlyle Group.
HERITAGE POWER: Moody's Completes Review, Retains B1 Rating
-----------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Heritage Power, LLC and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review in which Moody's reassessed the
appropriateness of the ratings in the context of the relevant
principal methodology(ies), recent developments, and a comparison
of the financial and operating profile to similarly rated peers.
The review did not involve a rating committee. Since January 1,
2019, Moody's practice has been to issue a press release following
each periodic review to announce its completion.
The publication does not announce a credit rating action and is not
an indication of whether or not a credit rating action is likely in
the near future. Credit ratings and outlook/review status cannot be
changed in a portfolio review and hence are not impacted by this
announcement.
Key rating considerations
Heritage Power, LLC's (Heritage or Project; B1) rating is supported
by its stable cash flow from both PJM capacity revenue and two heat
rate call options that run through March 2022. The Project has 16
power plants located across various regions of PJM, some of which
benefit from the premium capacity prices in the EMAAC and ATSI
regions that have occurred in the past because of regional capacity
constraints.
The rating also reflects recent performance that is largely in line
with expectations and the near-term cash flow and revenue
visibility expected over the next few years owing to Heritage's
reliance on revenues from known cleared capacity auction results
through the 2021/22 capacity year in PJM. In addition to capacity
revenues, Heritage is aided by revenue sources from two heat rate
call option hedging arrangements with Morgan Stanley Capital Group
that provide for incremental fixed payments of about $67 million
running through March 2022. The Project also benefits from a
liquidity reserve set up at financial closing of $20 million to top
up cash flow and coverage for 36 months during a period of lower
known capacity prices in PJM.
These positive considerations are balanced against the Project's
exposure to merchant power markets, an expectation for weak
financial results through the rest of 2020 and into the first half
of 2021 largely due to lower known capacity prices. Results should
be better for the full year 2021 given the higher known capacity
prices for the 2021/22 capacity year. The rating also considers the
age of the plants, some of which are over 50 years old, which could
present subsequent operating challenges, though the plants are well
maintained with many components replaced or refurbished over the
years.
The principal methodology used for this review was Power Generation
Projects Methodology published in July 2020.
ICH INTERMEDIATE: S&P Alters Outlook to Negative, Affirms 'B+' ICR
------------------------------------------------------------------
S&P Global Ratings revised its outlook on ICH Intermediate Holdings
II L.P. (InnovaCare) to negative from stable and affirmed its 'B+'
long-term issuer credit rating.
S&P also affirmed its 'B+' senior secured debt ratings on
InnovaCare's first-lien revolver and term loan. InnovaCare's
downstream holding companies, MMM Holdings LLC, ICH US Intermediate
Holdings II Inc., and ICH Flow-Through LLC, are the co-borrowers of
these debt issues.
S&P said, "Our outlook revision to negative follows InnovaCare's
upsizing of its incremental term loan to $200 million from $100
million. We viewed the original $100 million amount as having no
ratings impact because financial leverage would remain below our
40% downside rating trigger. With the upsizing, we expect
InnovaCare's financial leverage will be 42%-43% at year-end 2020
and may not decrease to below 40% until mid-2021 through early
2022."
"Moreover, we believe InnovaCare's higher debt, though it is
incremental, will weaken the quality of its regulated capital.
InnovaCare's two Puerto Rican entities have relatively low
statutory risk-based capital ratios that we expect to be 225%-250%
in 2020-2021 (just above the regulatory requirement of 200%). With
the upsizing, we forecast InnovaCare's capital will be deficient at
the 'BBB' level by close to 30% in 2021. Our capital assessment
includes an adjustment we make for excess debt-funded double
leverage."
"The outlook revision is also driven, to a lesser degree, by
InnovaCare's increased acquisition integration and execution risks
in 2021. We expect InnovaCare to use its debt proceeds to fund
pending and future acquisitions. We believe InnovaCare has good
provider expertise and medical management capabilities that will
help it attract and profitably grow its provider-based business, as
it looks to expand in Florida and potentially other states.
However, we also expect InnovaCare will face intensifying
competition for provider assets, which could temper its growth
strategy and ability to gain scale in its markets."
"We are not lowering our ratings on the company because we believe
it is performing well in 2020, and its other credit metrics
relating to debt repayment and coverage remain healthy."
"The negative outlook reflects the potential for a one-notch
downgrade in 2021. We could lower the rating if we were to expect
financial leverage to remain above 40% beyond 2021. In addition, we
could lower the rating if we were to expect regulated capital to be
more than 30% deficient on a sustained basis. Either scenario would
lead to lower our financial risk assessment on the company."
"We expect revenue of $3.95 billion-$4.0 billion in 2020 and $4.3
billion-$4.35 billion in 2021, and adjusted EBIT margin of 6%-6.5%
in 2020 and 4.5%-5.5% in 2021."
"We expect financial leverage of 42%-43% by year-end 2020 and
39%-41% by year-end 2021, financial obligations to EBITDA of
2x-2.5x in 2020-2021, and EBITDA fixed-charge coverage of 7x-7.5x
in 2020 and 5x-5.5x in 2021."
"We expect regulated capital will be 'BBB' deficient by more than
30% at year-end 2020, and close to 30% at year-end 2021."
"We could lower our rating by one notch in 2021 based on the
aforementioned factors."
Downside scenarios could include competitive position weakening
that is reflected in business losses or lower operating margins,
earnings deterioration due to higher-than-expected medical or
operating costs, and higher leverage due to weaker earnings,
sponsor dividends, or debt-funded acquisitions.
S&P is unlikely to raise its rating in 2021.
INNERGEX RENEWABLE: S&P Lowers ICR to 'BB+'; Outlook Stable
-----------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating (ICR)
on Innergex Renewable Energy Inc. to 'BB+' from 'BBB-'.
S&P also lowered its global scale rating and Canada scale rating on
Innergex's preferred shares by two notches to 'B+' and 'P-4(High)',
respectively, from 'BB' and 'P-3'.
Although Innergex has added considerable generation capacity to its
portfolio, its capital and investment spending has exceeded cash
flow growth. The downgrade essentially reflects credit metrics that
continue to reflect weakness in light of the company's aggressive
expansion, moderate distribution growth, negative free cash flow,
and heavy reliance on corporate debt to fund acquisitions and
development projects. Since the beginning of 2017, Innergex has
brought into operation more than 1.8 gigawatts of net capacity,
either through developments, or via opportunistic acquisitions
across different markets. Although this has helped increase scale,
as well as improve asset and geographical diversity, the growth in
distributable cash at the holdco level has lagged S&P's
expectations, and, combined with an increasing dividend and ongoing
capital spending requirements, has left the company with limited,
or no room for debt reduction.
Between 2016-2019, Innergex's holdco distributions increased
relatively moderately at about 10% annually (to $157 million in
2019 from $118 million in 2016); however, corporate-level debt
increased during the same period by 26% per year--to $987 million
at the end of 2019 from $489 million at the end of 2016.
Hydro-Quebec's equity private placement proceeds temporarily helped
Innergex address its increasing leverage earlier this year
(corporate debt declined to $521 million at the end of
first-quarter 2020); however, the company's expansion spending to
date, as well as its visible development pipeline, lead S&P to
believe that FFO-to-debt will remain below 23% through its forecast
period (2020-2022), absent any credit-positive events. The
company's trailing 12-month FFO-to-debt ratios as of the first,
second, and third quarters of 2020 were 22%, 15%, and 18%,
respectively. Under S&P's revised financial forecast, which
incorporates cash generation from existing and potential assets,
future capital outlays, as well as expected asset-level financings,
S&P estimates that FFO-to-debt through 2022 will be about 19%.
Convertible debentures present an opportunity for Innergex to
improve its credit metrics; however, this improvement remains tied
to the performance of the company's equity, as well as its intended
target capital structure at the holdco level. Innergex series B
convertible debentures, which represent C$150 million in holdco
debt, are convertible into the company's common equity at a
conversion price of C$20 per share at the holder's option. In
addition, Innergex has the ability to call the debentures between
June 30, 2021 and June 30, 2023, if the market price of its shares
is at least 125% of the conversion price, i.e., C$25 per share. The
company's equity closed at C$25.69 per share on Dec. 15, 2020.
Given the levels where Innergex's equity is trading, this opens up
a possibility of a conversion, which will reduce holdco debt, and
could improve credit ratios.
S&P said, "However, we also recognize that this conversion is
linked to the performance of the company's equity, which is to
quite a degree also dependent on the performance of the broader
equity markets, which are inherently unpredictable and reliant on
many factors beyond Innergex's control. More importantly, we
believe that the degree to which a potential conversion would
ultimately affect Innergex's credit ratios would depend on how the
company intends to maintain its capital structure at the holdco
level. In October 2019, Innergex redeemed C$100 million of its
outstanding convertible debentures via 87% equity conversion, with
the remaining debt redeemed in cash. Although the net impact of
this transaction could have been credit-positive, Innergex issued
C$144 million in replacement debentures, which ultimately had a
negative effect on its credit ratios given upsizing. Although it is
difficult to fully predict the company's course of action if a
conversion were to materialize, in our opinion, it is not
unreasonable to assume given Innergex's track record of using debt
to finance growth, that it will replace the conversion with some
form of debt to fund ongoing expansion and cash needs. For these
reasons, we do not factor a conversion into our forecast, and
assume that debentures will remain outstanding until their maturity
dates."
"We continue to assess Innergex's credit quality using our
"Methodology for Rating Project Developers" (published March 21,
2016). The company's business risk essentially reflects the
stability of distribution streams and quality of such distributions
(QD) from subsidiaries to cover corporate-level obligations under
normal and stress situations. This is analogous to a competitive
position. We rank QDs on a scale of '1' to '6', '1' being
strongest."
"Our view of Innergex's QD score is unchanged at '3'. This reflects
a predictable cash flow profile, with approximately 95% of
distributions supported by long-term power purchase agreements
(PPA) that have an average remaining life of 14 years. Counterparty
credit quality is strong, with the majority of revenue being
derived from investment-grade offtakers. We also incorporate into
our analysis the natural level of resource risk associated with
Innergex's exclusively renewable-based generation portfolio. Given
a number of the company's projects have project-level debt, there
is sensitivity to renewable sources (water flows, wind, and
irradiance) and operating availability. Due to structurally senior
project debt, moderate underperformance at the project level could
result in lower distributions to the company. Based on a QD score
of '3', we assess the company's business risk profile as
satisfactory."
"We view Innergex's financial risk profile as aggressive based on
projected FFO-to-debt of about 19% and debt-to-EBITDA of 4.0x-4.5x
through our two-year outlook period. Our analysis excludes both
nonrecourse project debt (and associated debt service) from
corporate debt and adjusted interest expense."
"The stable outlook reflects our expectation that Innergex's cash
flow quality will continue to benefit from its portfolio of
contracted assets, which will generate sufficient cash flows to
support debt obligations at the holdco level. We also expect that
the company's future investments and developments will remain
backed by commercial certainty via contracts or PPAs. Finally,
under our base-case scenario, we forecast that FFO-to-debt will
remain around 19% through 2022."
"We could lower the rating if we forecast FFO-to-debt will remain
below 16% on a consistent basis. This could occur if the company's
reliance on corporate-level debt financing to support growth or
expansion plans is higher than expected, or if its financial
performance falls short of our base-case forecast."
"We could consider a positive rating action if Innergex achieves
and maintains FFO-to-debt ratio of at least 23% on a sustained
basis. This could be achieved if the company experiences
better-than-expected financial performance, or if it reduces debt
at the holdco level."
JAX AVALON: Gets OK to Hire Michael Moecker, Appoint CRO
--------------------------------------------------------
Jax Avalon, LLC, seeks approval from the U.S. Bankruptcy Court for
the Middle District of Florida to hire Michael Moecker &
Associates, Inc. and appoint Mark Healy as its chief
restructuring officer.
Michael Moecker will provide these services in connection with the
Debtor's Chapter 11 case:
a. Assist the Debtor's current manager, Equity China, Inc. and
its director Jinyi Shao, in the Debtor's operations and
management;
b. Oversee the continued remodeling of the Debtor's
residential apartment complex, including the application of the
proposed $200,000 post-petition financing to those repairs and
renovations;
c. Oversee the Debtor's bank accounts and books and
records;
d. Financial statement administration and support of those
matters assigned to outside accounting firms or internal company
controller, if and when hired;
e. Review and audit company performance, income and expenses
for use in calculating net profitability of jobs and tailoring
future bidding procedures accordingly;
f. Along with the Debtor's managing director, Jinyi Shao, be a
point of contact for the Debtor's bankruptcy counsel and be
responsible for the implementation of bankruptcy-related
procedures, financials matters and company relations;
g. Be responsible for the support and execution of those
specific tasks to be performed by the Debtor while operating in the
bankruptcy case;
h. Completion of the Debtor's monthly operating reports;
i. Provide internal administration and support of those
matters assigned to outside professionals; and
j. Along with Ms. Shao, compile financial data and future
projections for use in the Debtor's plan of reorganization and
disclosure statement.
The firm will be paid at these rates:
Mark C. Healy, CRO $325 per hour
Associates $100 - $250 per hour
Clerical work $75 per hour
Mr. Healy and his firm are "disinterested" within the meaning of
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Mark C. Healy
Michael Moecker & Associates, Inc.
1883 Marina Mile Blvd, Ste 106
Fort Lauderdale, FL 33315
Phone: (954) 252-1560
About Jax Avalon
Jax Avalon, LLC is a Florida limited liability company, which owns
and manages a 12-acre, 194-unit residential apartment complex
located at 7557 and 7579 Arlington Expressway, Jacksonville, Fla.
Jax Avalon sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Fla. Case No. 20-03495) on Dec. 8, 2020. At the
time of the filing, the Debtor had estimated assets of between $1
million and $10 million and liabilities of between $10 million and
$50 million.
Judge Jerry A. Funk oversees the case.
Lansing Roy, P.A., and Michael Moecker & Associates, Inc., serve as
the Debtor's legal counsel and restructuring advisor, respectively.
Mark C. Healy of Michael Moecker is the chief restructuring
officer.
JAX AVALON: Seeks to Hire Lansing Roy as Legal Counsel
------------------------------------------------------
Jax Avalon, LLC, seeks approval from the U.S. Bankruptcy Court for
the Middle District of Florida to hire Lansing Roy, P.A., as its
legal counsel.
The firm will provide services in connection with the Debtor's
Chapter 11 case, which include:
a. Advising the Debtor on its rights and duties;
b. Researching, organizing and litigating the extent,
priority, nature and collateral of multiple secured or factoring
lenders of the estate in order to ensure an orderly
estate administration;
c. Preparing pleadings and other court papers, including a
disclosure statement and plan of reorganization;
d. Evaluating potential causes of actions the Debtor may have
against other parties and either representing the Debtor in those
actions or coordinating with outside counsel on behalf of the
Debtor; and
e. Taking all other necessary action incident to the proper
administration of the case.
The hourly rates charged by the firm's attorneys and paralegals
are:
Kevin B. Paysinger $325 per hour
William B. McDaniel $300 per hour
Paralegals $75 per hour
The Debtor provided a retainer fee of $31,717 to the firm.
Lansing Roy is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
William B. McDaniel, Esq.
Lansing Roy, P.A.
1710 Shadowood Ln Ste 210
Jacksonville, FL 32207-2184
Tel: 904-391-0030
Fax: 904-391-0031
Email: information@lansingroy.com
About Jax Avalon
Jax Avalon, LLC is a Florida limited liability company, which owns
and manages a 12-acre, 194-unit residential apartment complex
located at 7557 and 7579 Arlington Expressway, Jacksonville, Fla.
Jax Avalon sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. M.D. Fla. Case No. 20-03495) on Dec. 8, 2020. At the
time of the filing, the Debtor had estimated assets of between $1
million and $10 million and liabilities of between $10 million and
$50 million.
Judge Jerry A. Funk oversees the case.
Lansing Roy, P.A., and Michael Moecker & Associates, Inc., serve as
the Debtor's legal counsel and restructuring advisor, respectively.
Mark C. Healy of Michael Moecker is the chief restructuring
officer.
JOSEPH PORADA: Rathje & Woodward Allowed $62k in Fees and Costs
---------------------------------------------------------------
Judge Timothy A. Barnes of the United States Bankruptcy Court for
the Northern District of Illinois, Eastern Division, disallowed
several time and expense entries claimed by Rathje & Woodward, LLC,
special counsel for Joseph J. Porada, Jr.
Rathje & Woodward requested $63,543.00 in total fees and $72.55 in
total costs. Total fees were reduced by $1,001.00. The amount of
total fees allowed is $62,542, while the amount of total costs
allowed is $$72,55. The firm was allowed total fees and costs in
the amount of $62,614.55.
Judge Barnes said that the Court may impose a ten percent penalty
on entries that appear to be "lumping." He also said that the
Court will reduce each entry marked as such per the penalty. Judge
Barnes denied the allowance in part of compensation for the certain
indicated tasks. He explained that since the professional or
paraprofessional expended an unreasonable amount of time on the
tasks in light of their nature, the experience and knowledge of the
professional performing the tasks, and the amount of time
previously expended by the professional or another on the tasks.
Judge Barnes also denied the allowance of compensation that was
disproportionate to the total hours in the main case.
The case is In re: JOSEPH J PORADA, JR., Chapter 11, Debtor, Case
No. 17bk36268, (Bankr. N.D. Ill.). A full-text copy of the
Findings of Fact and Conclusions of Law in Support of Order
Awarding to Rathje & Woodward, LLC, Special Counsel for Joseph J
Porada, Jr., for Allowance and Payment of Interim Compensation and
Reimbursement of Expenses, dated December 14, 2020, is available at
https://tinyurl.com/ydapsukq from Leagle.com.
JUMP WESTMINSTER: Case Summary & 19 Unsecured Creditors
-------------------------------------------------------
Debtor: Jump Westminster, LLC
1025 Westminster Mall
Suite 2086A
Westminster, CA 92683
Business Description: Jump Westminster, LLC operates an amusement
center in Westminster, California.
Chapter 11 Petition Date: December 18, 2020
Court: United States Bankruptcy Court
Central District of California
Case No.: 20-13447
Debtor's Counsel: Michael G. York, Esq.
LAW OFFICE OF MICHAEL G. YORK
1301 Dove St., Suite 1050
Newport Beach, CA 92660
Tel: (949) 833-8848
Email: michael@michaelyorkattorney.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by James C. Bellino, managing member.
A copy of the Debtor's list of 19 unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/F3L26GA/Jump_Westminster_LLC__cacbke-20-13447__0008.0.pdf?mcid=tGE4TAMA
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/FUVLA6I/Jump_Westminster_LLC__cacbke-20-13447__0005.0.pdf?mcid=tGE4TAMA
KINSER GROUP: Comfort Inn Valued at $1.8M, Holiday Inn at $3.9M
---------------------------------------------------------------
Judge Daniel P. Collins of the United States Bankruptcy Court for
the District of Arizona determined that as of the October 7, 2020
valuation date, Kinser Group, LLC's Holiday Inn and accompanying
personal property had a fair market value of $3.9 million, and that
Kinser Group's Comfort Inn and accompanying personal property had a
fair market value of $1.848 million.
Kinser Group previously filed a Motion to Determine Secured Claim
of First Financial Bank Pursuant to Fed. R. Bankr. P. 3012 and
Request for Evidentiary Hearing.
For purposes of the Valuation Motion, the parties agreed that First
Financial Bank holds perfected first lien positions in the amount
of of $7,503,234.29, as of the August 14, 2020 Petition Date,
against a Bloomington, Indiana Holiday Inn and an adjacent Comfort
Inn, together with accompanying personal property. For the
purposes of the Valuation Motion and Debtor's pending third amended
chapter 11 plan, the parties have agreed that the October 7, 2020
valuation of the Hotels will control the amount of the Bank's
secured claim and unsecured claim, if any.
Judge Collins said that he considered the testimonies from one of
the Debtor's principals, Kenneth Edwards, and Debtor's valuation
expert, Randall Clemson, of Kidder Mathews, and the Bank's
valuation expert, Rajesh Shah, of Cushman Wakefield. He also said
that the Debtor's Plan did not propose a sale of either Hotel.
Rather, the Plan proposes that the Debtor will retain the Hotels
and restructure the Debtor's obligations over an extended period of
time. Judge Collins contended that Mr. Shah's appraisals of the
Hotels are fundamentally flawed in the baseline assumption that the
Hotels are sold on the Valuation Date and would be required to
embark into a Property Improvement Plan of $3 million to be
completed within 1 year. He further contended that the Bank failed
to meet its burden of proof that the Hotels are collectively worth
$8.2 million. Judge Collins explained that he looked more to the
Clemson valuation reports and determined that the Valuation Date
market value of the Comfort Inn was $1,848,000 and the Holiday Inn
was $3,900,000.
Judge Collins found that the Bank's secured claim totals $5.748
million and its Petition Date unsecured claim totaled
$1,755,234.29.
The case is In Re: KINSER GROUP, LLC, Chapter 11 Proceedings,
Debtor, Case No. 2:20-bk-09355-DPC, (Bankr. D. Ariz.). A full-text
copy of the Under Advisement Order on Hotel Valuations, dated
December 18, 2020, is available at https://tinyurl.com/y9sq2t7j
from Leagle.com.
About Kinser Group LLC
Kinser Group LLC is in the hotels and motels business.
Kinser Group LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No.
20-09355) on Aug. 14, 2020. In the petition signed by Kenneth L.
Edwards, manager, the Debtor was estimated to have $1 million to
$10 million in both assets and liabilities. Isaac M. Gabriel,
Esq., at QUARLES & BRADY LLP, represents the Debtor.
LANNETT COMPANY: Moody's Completes Review, Retains B3 CFR
---------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Lannett Company, Inc. and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review in which Moody's reassessed the
appropriateness of the ratings in the context of the relevant
principal methodology, recent developments, and a comparison of the
financial and operating profile to similarly rated peers. The
review did not involve a rating committee. Since January 1, 2019,
Moody's practice has been to issue a press release following each
periodic review to announce its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
KEY RATING CONSIDERATIONS
Lannett's B3 Corporate Family Rating is constrained by high
financial leverage and its refinancing needs. The rating is also
constrained by Lannett's moderate size with revenues of between
$500-$550 million and concentration in the US generic drug market.
Critical to Lannett's ability to reverse near-term earnings
declines will be the cumulative contributions from higher value new
product launches from Lannett's internal and acquired pipeline and
strategic in-licensing deals. Lannett has several sizeable market
opportunities that remain in development but are several years
away.
The principal methodology used for this review was Pharmaceutical
Industry published in June 2017.
LLADRO GALLERIES: Futura Buying Personal Property for $33K
----------------------------------------------------------
Lladro Galleries, Inc., filed with the U.S. Bankruptcy Court for
the Southern District of New York their first amended request for
approval of their proposed bidding procedures in connection with
the sale of remaining personal property, consisting of unsold
retail inventory, to Futura Finances, SAS for $33,000, subject to
overbid.
A hearing on the Motion is set for Jan. 13, 2021 at 11:00 a.m. The
Objection Deadline is Jan. 8, 2021.
The Debtor is a privately-owned company that supported retail sales
in the United States of porcelain figurines and fixtures produced
by its affiliate Lladro, S.A. at four domestic locations in New
York, New York; Woodbury, New York; Williamsburg, Virginia; and
Cabazon, California. On Aug. 27, 2020, the Court entered an Order
authorizing the Debtor to reject the leases at the Retail
Locations. The Debtor has ceased the active conduct of its
business at the Retail Locations and returned the premises to the
landlords.
At the commencement of the case, the Debtor filed a Plan of
Reorganization to provide for the sale of its remaining personal
property and the distribution of the proceeds to creditors. The
Property consists of unsold retail inventory. The Debtor has now
located a purchaser for the Property and wishes to provide notice
of the proposed sale, an opportunity for higher and better bids and
to conclude the sale to facilitate the distribution of the net sale
proceeds to creditors through the Plan.
The Debtor has entered into the Agreement for the sale of the
Property.
The key terms of the Agreement are:
a. Identity of the Purchaser: Futura Finances, SAS
b. Property Being Sold: The property being sold consists of
7,194 retail units of the Debtor's inventory (Exhibit A) broken
down by number of units, unit description and retail price.
c. Purchase Price: $33,000
d. Deposit: $3,300 (10%)
e. Closing Date: Within three days of Sale Order becoming
Final
f. Outside Date for Closing: Jan. 29, 2021. There is a
termination right if sale does not close by the Outside Date.
The Agreement provides for a proposed break-up fee of $1,500 (4.5%)
of purchaser price.
The Debtor has a proposed order approving the break-up fee and bid
procedures as described:
a. Break Up Fee: $1,500
b. Deadline for Objections and/or Higher Bids: Jan. 8, 2021
c. Auction: Jan. 11, 2021
d. Initial Required Over Bid: $35,000
e. Bidding Increments: $500
f. Sale Hearing: Jan. 13, 2021
g. Bid Deadline: Jan. 8, 2021 at 4:00 p.m. (ET)
Lladro asks that the Court sets a Sale Hearing as described and in
the proposed Notice of Sale within 30 days of the entry of any
Bidding Procedures Order. At the Sale Hearing, subject to the
outcome of the Auction (if necessary), Lladro asks entry of an
Order which, among other things, (i) approves the Agreement; (ii)
confirms that the sale of the Property will be free and clear of
all Encumbrances; (iii) waives the 14-day stay incorporated by
Bankruptcy Rules 6004(h) and 6006(d); and (vii) approves certain
findings of fact and conclusions of law, including, without
limitation, that all requirements imposed by Bankruptcy Code
section 363(f) have been satisfied, that the Purchaser is a good
faith purchaser entitled to the protections of Bankruptcy Code
section 363(m), and that the terms of the Sale are fair and
reasonable.
The Debtor shall, within two days of the entry of the Bidding
Procedures Order on the Court's docket, serve a copy of each of the
Motion, the Bidding Procedures Order, and a copy of the Notice of
Sale upon the Notice Parties.
Because the Debtor is unaware of any interests or encumbrances upon
the Property, the Debtor asks that the Property be transferred to
the Purchaser free and clear of all Encumbrances with interests in
property attaching to the proceeds of the Sale of the Property.
A copy of the APA and the Bidding Procedures is available at
https://bit.ly/3gY1gRk from PacerMonitor.com free of charge.
About Lladro Galleries
Lladro Galleries, Inc., a dealer of art galleries and supplies,
sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 20-11618) on
July 14, 2020. At the time of the filing, the Debtor was estimated
to have assets of $50,000 to $100,000 and liabilities of $1 million
to $10 million. Judge Shelley C. Chapman oversees the case.
Nelson Mullins Riley & Scarborough, LLP, is the Debtor's legal
counsel.
LRGHEALTHCARE: Court Slated to Approve Bankruptcy Sale Plan
-----------------------------------------------------------
Rick Green of The Laconia Daily Sun reports that the bankruptcy
court is poised to approve LRGHealthcare's bankruptcy sale plan.
Most objections to a $30 million agreement for Concord Hospital to
purchase assets of LRGHealthcare -- including Lakes Region General
Hospital and Franklin Regional Hospital -- were cleared during a
U.S. Bankruptcy Court hearing Monday, December 21, 2020.
The main outstanding issue is an objection by the state.
Judge Michael Fagone ordered the state, Concord Hospital and
LRGHealthcare to work through that objection before the hearing
resumes on Wednesday, December 16, 2020, at 1 p.m. He also said he
will be ready to decide the matter himself if the parties can't
agree.
The judge is expected to approve the sale order Wednesday, Dec. 16,
2020, although another hearing will be held on Jan. 20, 2021 to set
the amount of money owed on various contracts, LRGH President and
CEO Kevin Donovan said.
The state's objection centers on its contention the sale would
leave it without adequate ability to recoup upwards of $10 million
owed in connection with a state program used to fund uncompensated
care for those who can't pay for health care. It also said the
agreement would jeopardize its ability to collect a tax related to
that program.
An auction that had been scheduled among parties interested in
buying LRGHealthcare's assets was cancelled because Concord
Hospital emerged as the only health care institution interested in
making an acquisition bid.
Once the parties are granted a final order, they can begin the
process of seeking approval from regulatory agencies.
LRGHealthcare and Concord Hospital expect to complete this process
in 2021.
LRGHealthcare filed for Chapter 11 protection under federal
bankruptcy laws on Oct. 19, 2020 citing more than $100 million in
debt. The move came after two years of efforts by LRGH to solve
its financial problems through a merger or acquisition.
The health care system has 1,400 full- and part-time employees and
is the largest employer in the Lakes Region.
Even before the impact of COVID-19, LRGHealthcare was consistently
losing $1 million a month and hindered by the burden of servicing
its large debt.
The court will approve a plan for relieving debt, chiefly a $111
million facility mortgage owed to Key Bank and insured by the U.S.
Department of Housing and Urban Development.
About LRGHealthcare
LRGHealthcare -- http://www.lrgh.org/-- is a not-for-profit
healthcare charitable trust operating Lakes Region General
Hospital, Franklin Regional Hospital, and numerous other affiliated
medical practices and service programs.
LRGH is a community based acute care facility with a licensed bed
capacity of 137 beds, and FRH is a 25-bed critical access hospital
with an additional 10-bed inpatient psychiatric unit. In 2002,
Lakes Region Hospital Association and Franklin Regional Hospital
Association merged, with the merged entity renamed LRGHealthcare.
LRGHealthcare offers a wide range of medical, surgical, specialty,
diagnostic, and therapeutic services, wellness education, support
groups, and other community outreach services.
LRGHealthcare filed a Chapter 11 petition (Bankr. D.N.H. Case No.
20-10892) on Oct. 19, 2020. The petition was signed by Kevin W.
Donovan, president and chief executive officer. At the time of the
filing, the Debtor estimated to have $100 million to $500 million
in both assets and liabilities.
Judge Bruce A. Harwood oversees the case.
The Debtor tapped Nixon Peabody LLP as counsel; Deloitte
Transactions and Business Analytics LLP and Kaufman, Hall &
Associates, LLC as financial advisors; and Epiq Corporate
Restructuring, LLC as claims, noticing, solicitation, and
administrative agent.
LUCKY BRAND: Court Extends Plan Exclusivity Thru January 29
-----------------------------------------------------------
At the behest of Debtors Lucky Brand Dungarees, LLC and its
affiliates, Judge Christopher S. Sontchi extended the Debtors'
exclusivity periods to file a chapter 11 plan through and including
January 29, 2021, and to solicit acceptances through and including
March 30, 2021.
The Debtors said in their motion to extend the exclusive periods
that it is reasonable to request extensions of the Exclusive
Periods given the substantial progress that the Debtors have made
in the Chapter 11 Cases. Given the broad consensus the Debtors have
reached with their primary constituencies in this case, the Debtors
do not foresee needing an alternative plan. However, the Debtors'
request for an extension of the Exclusive Periods ensures that the
Debtors will be able to file and solicit an alternative plan if one
is required.
The Debtors began the Chapter 11 Cases with the goal of conducting
a going-concern sale of substantially all of the Debtors' assets.
Through a successful marketing and sale process, the Debtors closed
the sale of substantially all of their assets to SPARC Group, LLC
on August 14, 2020. Following the closing of the sale, the Debtors
and other key constituents in the Chapter 11 Cases turned their
efforts towards achieving confirmation of a consensual plan of
liquidation in order to conduct an orderly wind-down of the
Debtors' estates for the benefit of all parties in interest. To
that end, on August 28, 2020, the Debtors filed the Plan. The Plan
is supported by the Debtors' prepetition lenders and the Committee,
and the Debtors anticipate confirmation of the Plan in due course.
Without the extension of the Debtors' exclusivity periods, any
proposal and solicitation of any competing plan could complicate
and increase the cost of administering the Chapter 11 cases.
A copy of the Debtors' Motion to extend is available from
PacerMonitor.com at https://bit.ly/382ILac at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/3894duq at no extra charge.
About Lucky Brand Dungarees
Founded in Los Angeles, Calif. in 1990 --
https://www.luckybrand.com -- Lucky Brand Dungarees, LLC is an
apparel lifestyle brand that designs, markets, sells, distributes,
and licenses a collection of contemporary premium fashion apparel
under the "Lucky Brand" name.
Lucky Brand and four of its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Texas Lead Case No.
20-11768) on July 3, 2020. Christopher Cansiani, chief financial
officer, signed the petitions. At the time of the filing, the
Debtors disclosed assets of between $100 million and $500 million
and liabilities of the same range.
Judge Christopher S. Sontchi presides over the cases. The Debtors
have tapped Young Conaway Stargatt & Taylor LLP and Latham &
Watkins LLP as their legal counsel, Berkeley Research Group, LLC as
restructuring advisor, and Houlihan Lokey Capital, Inc. as
investment banker. Epiq Corporate Restructuring, LLC is the claims
and noticing agent.
On July 17, 2020, the U.S. Trustee for Region 3 appointed a
committee of unsecured creditors. Pachulski Stang Ziehl & Jones,
LLP, and Alvarez & Marsal North America, LLC serve as the
committee's legal counsel and financial advisor, respectively.
MAD RIVER: Seeks Approval to Hire Real Estate Brokers
-----------------------------------------------------
Mad River Estates, LLC, seeks approval from the U.S. Bankruptcy
Court for the Northern District of California to hire real estate
brokers Kris Sundeen of Re/Max Humboldt Realty and Todd Wohl of
Braun International.
The Debtor needs the services of a real estate broker to market for
sale its 563-acre real property located at 24748 Korbel Road,
Korbel, Calif.
The Debtor will pay the brokers up to $20,000 in out-of-pocket
expenses. The amount will be used strictly for marketing costs.
The brokers' compensation will be based upon the closing of a sale
transaction approved by the bankruptcy court.
In court papers, Messrs. Sundeen and Wohl disclosed in court
filings that their firms are "disinterested" within the meaning of
Section 101(14) of the Bankruptcy Code.
The brokers can be reached at:
Kris Sundeen
Re/Max Humboldt Realty
944 H Street
Arcata, CA 95521
Phone: (707) 498-4429
-- and --
Todd Wohl
Braun International
438 Pacific Coast Highway
Hermosa Beach, CA 90254
Phone: (866) 568-6638
info@braunco.com
About Mad River Estates
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.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors in Debtor's Chapter 11 case. The committee is
represented by Buchalter, a Professional Corporation.
MALLINCKRODT PLC: Bankruptcy Judge Nixes Shareholders Committee
---------------------------------------------------------------
Law360 reports that after citing evidence that Irish-domiciled
drugmaker Mallinckrodt PLC and its affiliates are "hopelessly
insolvent" and potentially exposed to claims worth trillions, a
Delaware bankruptcy judge on Tuesday, December 22, 2020, rejected a
call to form an equity committee for stockholders facing a total
wipe-out.
Ruling during a teleconference hearing, U. S. Bankruptcy Judge John
T. Dorsey said an expert commissioned by an ad hoc equity group had
failed to carry arguments that something could be left for
stockholders after other creditor payoffs if the Chapter 11
reorganization spun away Mallinckrodt's embattled generics
affiliates.
About Mallinckdrodt PLC
Mallinckrodt -- http://www.mallinckrodt.com/-- 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.
As of March 27, 2020, the Company had $10.17 billion in total
assets, $8.27 billion in total liabilities, and $1.89 billion in
total shareholders' equity.
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 the Company.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Latham & Watkins LLP, Ropes & Gray LLP and Wachtell, Lipton, Rosen
& Katz are serving as counsel to the Company, Guggenheim
Securities, LLC, is serving as investment banker and AlixPartners
LLP is serving as restructuring advisor to Mallinckrodt. Hogan
Lovells is serving as counsel with respect to the Acthar Gel
matter. Prime Clerk LLC is the claims agent.
MCGRAW HILL: Moody's Reviews Caa2 CFR for Upgrade Amid Refinancing
------------------------------------------------------------------
Moody's Investors Service placed McGraw Hill LLC's existing
ratings, including its Caa2 Corporate Family Rating, on review for
upgrade. Concurrently, Moody's rated the company's proposed credit
facilities at B3 and new junior priority secured notes at Caa3 and
placed them on review for upgrade.
The review was prompted by the company's announcement of a debt
refinancing intended to extend its debt maturities, which followed
stronger than previously anticipated fiscal Q2 2021 operating
performance and the company's recent extension of its $150 million
AR facility to August 2023.
McGraw intends to extend the maturity of the existing first lien
term loan to November 2024 and issue up to approximately $800
million of junior priority secured notes due November 2024. The new
junior priority secured notes will be issued in connection with an
exchange for up to $400 million of existing unsecured notes, an
exchange for $191 million of term loans of MHGE Parent, LLC
(McGraw's parent) and new financing commitments. McGraw also
expects to extend the maturity of the revolving credit facility to
November 2023, albeit with a reduced commitment, and downsize the
first lien term loan by up to $200 million. McGraw disclosed in its
Current Report filed that it anticipates closing the proposed
refinancing transaction no later than January 15, 2021. According
to the filing, the company had received exchange consent from
holders of approximately 63% of the existing first lien term loan,
76% of the senior unsecured note holders and 100% of the HoldCo
term loan holders. The company is required to meet certain
thresholds for the successful completion of the refinancing,
including a minimum consent threshold of 95% of the existing first
lien term loan holders.
If completed as proposed, the transaction would be credit positive
because it eliminates near term refinancing risks and extends
access to external liquidity without materially increasing cash
interest expense or leverage. Absent the proposed refinancing, the
existing $350 million revolving credit facility will mature in May
2021, the existing first lien term loan ($1.6 billion outstanding)
and HoldCo (MHGE Parent, LLC) senior secured term loan will mature
in May 2022 and April 2022, respectively, and $400 million of
unsecured notes will come due in May 2024.
On Review for Upgrade:
Issuer: McGraw Hill LLC
Probability of Default Rating, Placed on Review for Upgrade,
currently Caa2-PD
Corporate Family Rating, Placed on Review for Upgrade, currently
Caa2
Senior Secured Bank Credit Facility, Placed on Review for
Upgrade,
currently Caa1 (LGD3)
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Upgrade, currently Caa3 (LGD5)
Assignments:
Issuer: McGraw Hill LLC
Senior Secured Bank Credit Facility, Assigned B3 (LGD3); Placed
on Review for Upgrade
Senior Secured Regular Bond/Debenture, Assigned Caa3 (LGD5);
Placed on Review for Upgrade
Outlook Actions:
Issuer: McGraw Hill LLC
Outlook, Changed To Rating Under Review From Negative
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The review for upgrade of McGraw's existing and proposed credit
ratings will focus on the company's successful execution of the
refinancing.
To the extent the proposed refinancing is completed timely
consistent with the proposed terms and absent any other material
changes to the credit profile, with 100% of Holdco term loan and
approximately 95% of existing term loan exchanged or repaid,
Moody's would consider upgrading the following ratings by two
notches: the corporate family rating to B3 from Caa2, probability
of default rating to B3-PD from Caa2-PD, and any remaining portion
of the existing first lien senior secured bank credit facility to
B2 from Caa1. Under this scenario, Moody's would consider upgrading
the rating on any remaining portion of the company's existing
senior unsecured notes by one notch to Caa2 from Caa3.
Under this scenario, Moody's would consider upgrading the company's
proposed 1st lien senior secured credit facility's rating to B2
from B3. Upon completion of the refinancing, the proposed 1st lien
senior secured credit facilities would benefit from the
subordination of the 1.5 lien note and of the unsecured note stub
(if any remains unexchanged). Under this scenario Moody's would
consider upgrading the proposed junior priority secured notes to
Caa2 from Caa3. The junior priority secured notes would be
subordinated to the 1st lien senior secured credit facilities and
$150 million receivables facility and have a senior position
relative to any remaining existing unsecured notes.
Conclusion of the ratings review for upgrade is also subject to
Moody's review of final terms and conditions.
In addition to the credit positive impact of the refinancing, the
review for upgrade also takes into account McGraw's better than
previously projected operating performance in its seasonally
important quarter ending September 30 (when it typically generates
over 50% of annual billings), which Moody's expects will continue
over the next 12-18 months. While total billings declined 2% for
the quarter and 9% for the first half of fiscal 2021 relative to
prior year, cost reductions and digital billing growth contributed
to adjusted EBITDA growth of 4% and 1% for the same periods,
respectively. Moody's expects that earnings and cash flow will
continue their growth trajectory (estimated at high single percent
growth rate over the next 12-18 months) even on revenues that are
flat to declining in the low single digit percent range. A portion
of the cost actions taken in response to the pandemic is expected
to be permanent, which will further support the positive trajectory
of McGraw's earnings over the next 12-18 months.
As a result of the stronger than expected performance, McGraw's
Debt/Cash EBITDA declined to 6.4x for LTM 9/2020, about a turn
lower than for LTM 12/2019 when Debt/Cash EBITDA was 7.3x (both
metrics Moody's adjusted). Moody's now expects Debt/Cash EBITDA
(including Moody's adjustments) to approach 6x for FYE 3/2021,
supported by EBITDA improvement.
The rapid move to a virtual classroom during the coronavirus
pandemic has accelerated advances in online courseware delivery
that might have taken much longer before the pandemic. Higher
Education institutions and K-12 schools are adapting to digital
learning products and integrating them into courseware. This
transformation supports digital revenue growth for McGraw and lays
a pathway for a more efficient cost structure in the longer term,
with lower inventory levels and lower earnings volatility
associated with estimation of future period print returns.
The principal methodology used in these ratings was Media Industry
published in June 2017.
McGraw Hill LLC is a global provider of educational materials and
learning services targeting the higher education, K-12,
professional learning and information markets with content, tools
and services delivered via digital, print and hybrid offerings.
McGraw Hill LLC LTM 9/2020 GAAP revenue and billing were
approximately $1.5 billion and $1.6 billion, respectively.
MERITAGE COMPANIES: Court Extends Plan Exclusivity Thru Feb. 26
---------------------------------------------------------------
At the behest of Debtor Meritage Companies, LLC, Judge Madeleine C.
Wanslee of the U.S. Bankruptcy Court for the District of Arizona
extended the period by 120 days in which the Debtor may file a
chapter 11 plan and to solicit acceptances for a plan through and
including February 26, 2021.
In its motion to extend the plan exclusivity, the Debtor said the
extension is appropriate under the circumstances as the Debtor has
been actively negotiating the sale of its land parcels, working to
achieve debtor-in-possession financing, and working to complete the
infrastructure of the parcels to complete the sales.
The Debtor is a real estate developer of a raw land assemblage in
North Ogden, UT. During the time the Debtor has been in bankruptcy,
the Debtor has been actively negotiating the sale of its land.
To assist the Debtor in its sale efforts, the Court entered the
Order Approving Petition for Authority to Retain Broker for the
Debtor on October 7, 2020. But to complicate matters, while
attempting to negotiate these sales, both the Debtor and its
principal, Jack A. Barrett have been faced with every effort by
Creditor Robert Gross and his ongoing attempts to stop the sale of
the land and thwart the efforts to fund the Chapter 11 Plan. These
efforts include a lift of stay motions, objections to almost every
motion filed by the Debtor, and multiple hearings, including
attempting a baseless claim of ownership on the land presently
under contract.
So, on October 14, 2020, the Debtor filed the Motion to Approve
Post-Petition Debtor-in-Possession and an expedited hearing
scheduled on October 28, 2020. The funds from this financing will
be used to pay the necessary obligations to the contractors
involved in completing the infrastructure of the land in an effort
to close on the pending sales agreements.
The Debtor's ongoing efforts to obtain a sale resolution to the
benefit of creditors, and various extenuating circumstances,
including attempts by Gross to hamper the pending sale and also
claim ownership to proceeds, justifies the extension of the plan
exclusivity deadlines.
The Debtor has currently a purchase contract of sale pending on one
of its parcels of land owned by the Debtor and anticipates more
sales will follow soon. In light of these issues, the Debtor will
use the additional time to come to an agreement on terms with a
prospective purchaser for the sale of the Debtor's property. This
sale is at the core of the Debtor's reorganization plan. The Debtor
is confident that with additional time to complete the
infrastructure on the land and complete the sale with the Court's
approval, it will be able to fund the Plan of Reorganization and
pay its legitimate creditors.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/2L4EueN at no extra charge.
A copy of the Court's Extension Order is available at
PacerMonitor.com at https://bit.ly/37w84kW at no extra charge.
About Meritage Companies
Meritage Companies, LLC, a land developer in Wasilla, Alaska,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Ariz. Case No. 20-07718) on June 30, 2020. The petition was
signed by Jack A. Barrett, manager.
At the time of the filing, the Debtor had estimated assets of less
than $50,000 and liabilities of between $10 million and $50
million.
Previously, Judge Brenda K. Martin oversees the case. Now, Judge
Madeleine C. Wanslee presides over the case. The Debtor tapped
Lamar D. Hawkins, Esq., at Guidant Law, PLC, as legal counsel,
David H. Bundy, Esq., of the Law Office of David H. Bundy, PC as
special counsel and Coldwell Banker Brokerage-Ogden, as real estate
broker.
MILLS FORESTRY: Court Extends Plan Exclusivity Until January 7
--------------------------------------------------------------
At the behest of Debtors Mills Forestry Service, LLC and Sammy
Clyde Mills, III, Judge Susan D. Barrett extended the periods
within which the Debtors have the exclusive rights to file a plan
of reorganization and to obtain acceptances of the plan through and
including January 7, 2021, and March 5, 2021, respectively.
In its second motion to extend, the Debtors said that given the
sheer number of secured creditors, in particular, and the
significant amount of information that will need to be summarized
in the Disclosure Statement, the Debtors need a modest additional
30 days or so to finalize the Plan and Disclosure Statement and
don't contemplate needing additional time.
The Debtors spent a substantial portion of the extended 120 days of
the Chapter 11 cases focusing on stabilizing their business
operations. To that end, the Debtors have made a conscious effort
to reduce their operating expenses, by among other things,
surrendering excess equipment and reducing their employee numbers.
Additionally, the Debtors have continued to negotiate consensual
resolutions to motions for relief filed by multiple creditors.
The Debtors are now paying almost $19,000 per month inadequate
protection payment to at least 9 creditors. Moreover, the Debtors
have accomplished all of this during a time of substantial economic
uncertainty caused by the COVID-19 pandemic.
There are some unresolved contingencies, especially as to the three
pending adversaries, and although those might not be resolved by
early December, the Debtors anticipate reporting progress on those
matters that will better inform creditors' voting decisions. This
is the Debtors' second request, which is primarily intended to
permit counsel to finalize what are the most substantial pleadings
that these Debtors will file in these cases.
The Debtors have had cursory discussions with a few creditors who
have inquired about the status of the Plan, in addition to
extensive adequate protection discussions that should serve as a
jumping-off point for the final Plan proposal.
A copy of the Debtors' Motion to extend is available from
PacerMonitor.com at https://bit.ly/3amsBeV at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/3oTI75O at no extra charge.
About Mills Forestry Service and Sammy Clyde Mills,
III
Mills Forestry Service, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Ga. Case No. 20-60110) on March 7,
2020. At the time of the filing, the Debtor was estimated to have
assets of between $1 million and $10 million and liabilities of the
same range.
Sammy Clyde Mills, III, filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ga. Case No.
20-30046-SDB) on March 7, 2020.
The bankruptcy cases of Mills Forestry Service, LLC, and Sammy
Clyde Mills III were joint-administered (Bankr. S.D. Ga. Case No.
20-30058) pursuant to the Court's Order dated May 25, 2020.
Judge Susan D. Barrett oversees the case. The Debtor tapped Stone
& Baxter, LLP as its legal counsel. No creditor's committee and no
trustee or examiner has been appointed or requested in these cases.
MTS SYSTEMS: Moody's Retains B1 CFR Amid $1.7-Bil. Amphenol Deal
----------------------------------------------------------------
Moody's Investors Service said Amphenol Corporation's announcement
to purchase MTS Systems Corporation is credit positive although
MTS' ratings, including the senior unsecured at B3, senior secured
at Ba2 and Corporate Family Rating at B1, and stable outlook are
unaffected at this time.
Amphenol's plan for MTS' existing debt is yet to be determined. In
the event the debt is repaid at closing, expected around mid-2021,
Moody's would withdraw MTS' ratings. To the extent debt is assumed,
MTS' ratings would depend on the type of support provided by
Amphenol and/or the sufficiency of information for monitoring of
MTS.
According to Amphenol's announcement, the purchase price of
approximately $1.7 billion includes the assumption of MTS'
outstanding debt and liabilities, net of cash. The transaction has
been unanimously approved by each company's boards and is subject
to the satisfaction of customary closing conditions and regulatory
approvals.
MTS Systems Corporation is a global supplier of high-performance
test and measurement systems and sensors. The test & simulation
segment provides testing solutions (hardware and software) that
simulate forces and motions that customers expect their products to
encounter while in use. The sensors segment provides products used
to automate industrial machinery and equipment for improved safety
and end-user productivity. Revenues for the fiscal year ended
October 3, 2020 were nearly $830 million.
NEIGHBOR'S CONSEJO: Court Allows Fausto Fabre's $101k Claim
-----------------------------------------------------------
Judge S. Martin Teel, Jr. of the United States Bankruptcy Court for
the District of Columbia allowed Fausto Gabriel Fabre's Claim #6 in
the amount of $101,235.30.
The claim consisted of:
(a) $21,341.94 in stipulated back wages;
(b) $79,062.00 in attorneys' fees; and
(c) $831.36 in litigation costs.
Neighbors' Consejo objected to Mr. Fabre's claim, contending that
"an attorney's fee award exceeding 440% is unreasonable and
excessive compensation for prosecuting the underlying wage claim
that was settled without trial for $18,000." Judge Teel noted that
Neighbor's Consejo did not explain why the objection lists
$18,000.00 instead of $21,341.94 as the wage claim. He said that
an $18,000.00 wage claim versus a $21,341.94 wage claim had no
impact on the issue of the fees and expenses to be awarded.
Judge Teel held that "the debtor has failed to point to anything
that would rebut the presumption noted in the Motion to Amend Claim
to Include Attorneys' Fees that the fees are reasonable based on
the hours expended multiplied by the applicable hourly rate. In
issuing the Memorandum Decision entered on October 16, 2020, I
stated: 'Having reviewed Fabre's counsel's records, I find that
they are sufficiently complete and reasonable to warrant an award
of attorney's fees for the full 144.5 hours sought.' The debtor
has presented no objection warranting revisiting that finding."
The case is IN RE NEIGHBORS' CONSEJO, Case No. 15-00373, (Bankr.
D.D.C.). A full-text copy of the Memorandum Decision and Order RE
Attorneys' Fees for Fausto Fabre, dated December 14, 2020, is
available at https://tinyurl.com/y7g4vkqg from Leagle.com.
About Neighbors' Consejo
Neighbors' Consejo is a District of Columbia community organization
dedicated since 1995 to providing Mental Health Rehabilitative
Services and Substance Use Disorder Services to residents of
Washington, D.C., free of charge. Additionally, Neighbors' Consejo
has provided transitional housing for the homeless, who also needed
MHRS or SUD treatment, since 2004.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.D.C. Case No. 15-00373) on July 16, 2015. In the
petition igned by Glenda Rodriguez, executive director, the Debtor
estimated assets and liabilities of $1 million to $10 million.
Judge Martin S. Teel, Jr. presides over the case. Bailey &
Ehrenberg PLLC represents the Debtor as bankruptcy counsel. No
official committee of unsecured creditors has been appointed in
the
case.
NEW FORTRESS: Moody's Retains B1 CFR Amid $250MM Add-On Notes
-------------------------------------------------------------
Moody's Investors Service said B1 ratings of New Fortress Energy
Inc.'s are unchanged following the company's announcement that it
is issuing $250 million senior secured add-on notes, raising the
total outstanding amount of the notes to $1,250 million (rated B1).
Other ratings of NFE, including its B1 corporate family rating,
B1-PD probability of default rating and the SGL-3 Speculative Grade
Liquidity rating remain unchanged. The outlook is stable.
NFE plans to use the proceeds from the placement of the add-on
senior secured notes to fund expansion of operations in 2021-22.
NFE's senior secured notes, including the new notes, are rated B1,
at the same level as the CFR. Following the prepayment by NFE of
all debt previously raised at its operating subsidiaries in 2020,
its senior secured notes comprise substantially all its debt.
NFE's B1 CFR is underpinned by NFE's robust execution on its growth
plan in 2020, backed by long term contracts and proprietary
downstream infrastructure appended to power generation facilities
in Jamaica and Puerto Rico, as well as Mexico and Nicaragua, and
reflect Moody's expectation of NFE's rising earnings and
deleveraging in 2021.
The company's ratings also reflect Moody's views on the credit
quality of its customers. NFE is improving its customer and
geographic diversification in 2020-2021, but its operating cash
flow retains high dependence on a few key utility customers in
Jamaica and Puerto Rico. The rating assumes a relatively low
volatility in earnings, underpinned by a high level of contracted
revenues, including some take-or-pay and minimum volume
commitments, expected volume growth, as well as above market
contracted prices that support strong cash margins.
NFE is a high growth business. The B1 CFR reflects our expectation
that the company will maintain a conservative balance of debt and
equity funding while executing on numerous growth opportunities.
NFE's financial policy targets reasonable financial leverage of
debt/EBITDA of 3x, to be supported by reinvestment of growing
operating cash flow and equity issuance to help fund growth
investments. The company expects to rapidly grow its earnings in
2021 as a result of new facilities in Nicaragua and Mexico coming
online. This should result in leverage declining towards 3x in
2021.
NFE maintains adequate liquidity, reflected in its SGL-3 rating,
that is supported by substantial cash balances, that at the end of
September 2020 stood at $113 million. With all operating facilities
generating substantial operating cash margin, NFE's principal
financing needs are driven by its growth capital investment. The
rating assumes that NFE will maintain a sizable cash balance in
2021 and will continue to proactively raise additional financing to
support growth investment requirements. The adequate liquidity
position is also supported by substantial alternate liquidity
sources, including growing infrastructure power assets, as well as
the demonstrated ability to raise equity to support growth. The
company also benefits from the extended maturity profile of its
debt, with the new notes maturing in 2025.
The stable outlook on all ratings assumes continued robust
execution on growth plans and strong operating performance across
the expanding asset base, as well as proactive management of
funding and liquidity needs.
The B1 CFR could be upgraded if the company sustains growth in
EBITDA and builds a strong operating track-record. The upgrade
would require an improvement in the credit profile of the customer
base, including through broader earnings diversification or larger
exposures to higher rated customers and jurisdictions. Also, the
company will need to demonstrate its commitment to equity
co-funding of future growth projects and its ability to operate
within the stated financial policy with debt/EBITDA below 3x.
The ratings may be downgraded if the deleveraging trend is reversed
as a result of a decline in operations or regulatory interference
with debt/EBITDA not trending below 5x or if liquidity position
weakens. Failure to resolve FERC dispute in Puerto Rico in a timely
manner may cause a significant disruption to operations and lead to
a negative outlook or a downgrade of the ratings.
New Fortress Energy Inc is a US-listed, high growth energy
infrastructure company with downstream LNG operations in Jamaica,
Puerto Rico, Mexico and in the US.
NORTHLAND CORPORATION: Plan Exclusivity Extended Thru Feb. 22
-------------------------------------------------------------
At the behest of Northland Corporation, Judge Joan A. Lloyd
extended the Debtor's exclusivity periods to file a chapter 11 plan
through February 22, 2021, and to solicit acceptances of a plan
through April 23, 2021.
Now with the extension of the exclusive periods, the Debtor
anticipates that a going concern asset sale pursuant to 11 U.S.C.
Sec. 363(b)(1) is likely to yield the most efficient outcome for
parties in interest, and is presently pursuing a "stalking horse"
purchase offer from a prospective buyer.
Also, the additional time will enable the Debtor to manage a robust
sale process and develop a confirmable chapter 11 plan in
conjunction with or subsequent to a sale.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/39VoYMs at no extra charge.
About Northland Corporation
Northland Corporation -- http://northlandcorp.com-- is in the
business of drying, sorting, and grading hardwood lumber. From its
headquarters in LaGrange, Kentucky, and lumberyards in Collinwood,
Tennessee, and Blainville, Quebec, the Debtor processes and sells a
variety of lumber species native to central North America and
imports other hardwoods to customers throughout North America and
beyond.
Northland Corporation filed a Chapter 11 petition (Bankr. W.D. Ky.
Case No. 20-31934) on July 27, 2020. In the petition signed by Orn
E. Gudmundsson, Jr., chief executive officer, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities.
Judge Joan A. Lloyd oversees the case. Kaplan Johnson Abate & Bird
LLP serves as Debtor's bankruptcy counsel.
On September 15, 2020, The Office of the U.S. Trustee appointed a
committee to represent unsecured creditors in the Chapter 11 case
of Northland Corporation and named Kenneth Walker, Timothy A.
Girardi, Ronald W. Nentwig as Committee members and serve as
fiduciaries to the general population of creditors they represent.
PADDOCK ENTERPRISES: Wins February 1 Plan Exclusivity Extension
---------------------------------------------------------------
At the behest of Debtor Paddock Enterprises, LLC, Judge Laurie
Selber Silverstein of the U.S. Bankruptcy Court for the District of
Delaware extended the Debtor's exclusivity period to file a Chapter
11 plan through and including February 1, 2021, and to solicit
acceptances through and including April 5, 2021.
In its request to extend the exclusive periods, the Debtor said
that it does not seek an extension to exert pressure on the
relevant parties in interest or gain unfair bargaining leverage. On
the contrary, the extension of time will provide the parties with a
meaningful opportunity to achieve a consensual resolution and will
not alter creditors' willingness to negotiate with the Debtor and
disrupt ongoing negotiations.
The Debtor's goal in the Chapter 11 Case is to negotiate a
consensual plan of reorganization that resolves its historical
asbestos-related liabilities by establishing a funded trust
pursuant to sections 524(g) and 105(a) of the Bankruptcy Code. To
that end, the Debtor is engaged in ongoing negotiations with the
official committee
of asbestos personal injury claimants (ACC) and the legal
representative for future asbestos claimants (FCR), including
telephonic and virtual meetings, to develop a framework for a
consensual plan of reorganization.
Moreover, the Debtor has also engaged with certain governmental
authorities regarding the status and expected treatment of its
legacy environmental liabilities in the Chapter 11 Case and intends
to continue those discussions and share relevant information in the
coming weeks. While substantial progress continues to be made, the
Debtor requires additional time to fully pursue a consensual
resolution of the Chapter 11 Case.
The Chapter 11 Case presents complex issues of bankruptcy law,
particularly in the context of section 524(g) plan, which requires
the participation of certain key parties, including the ACC and the
FCR, to achieve a consensual resolution of the Debtor's
asbestos-related liabilities. The process of reaching a fair
resolution of the Debtor's asbestos liability and addressing the
various other issues that must be resolved in formulating a
consensual plan requires extensive time and effort on the part of
the Debtor, the ACC, the FCR, and their respective professionals.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/3nu4w9I at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/38c3usi at no extra charge.
About Paddock Enterprises
Paddock Enterprises, LLC's business operations are exclusively
focused on (i) owning and managing certain real property and (ii)
owning interests in, and managing the operations of, its non-debtor
subsidiary, Meigs, which is developing an active real estate
business. It is the successor-by-merger to Owens-Illinois, Inc.,
which previously served as the ultimate parent of the company.
Paddock Enterprises is a direct, wholly-owned subsidiary of O-I
Glass.
Paddock Enterprises sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 20-10028) on Jan. 6, 2020.
At the time of the filing, Debtor disclosed assets of between $100
million and $500 million and liabilities of the same range.
Judge Laurie Selber Silverstein oversees the case. The Debtor
tapped Richards, Layton & Finger, P.A. and Latham & Watkins LLP as
legal counsel; Alvarez & Marsal North America, LLC as financial
advisor; and Prime Clerk, LLC as claims, noticing and solicitation
agent and administrative advisor. James L. Patton Jr. was approved
by Court to be the Debtor's legal representative for future
asbestos injury claimants.
PBF HOLDING: S&P Rates $250MM Add-on to Senior Secured Notes 'BB'
-----------------------------------------------------------------
S&P Global Ratings affirmed the 'B+' issuer credit and senior
unsecured debt ratings on PBF Holding Co. LLC. The outlook is
negative. The 'BB' rating on the secured notes is unchanged as a
result of the proposed add-on.
At the same time, '1' recovery rating on the secured debt is
unchanged. S&P lowered the recovery rating on the unsecured notes
to '4' from '3'. The '4' recovery rating indicates S&P's
expectation for average (30%-50%; rounded estimate: 35%) recovery
in the event of a payment default.
The company announced it will exercise the $250 million add-on to
its senior secured notes. The 'BB' rating on the secured notes is
unchanged as a result of the proposed add-on, which is two notches
above S&P's 'B+' issuer credit rating on PBF Holdings. S&P views
the proposed offering as a means of further strengthening the
company's liquidity for the next 12 months. S&P's previous
expectation of PBF Holdings' adjusted leverage is unchanged as the
rating agency calculates adjusted debt to EBITDA net of cash.
PBF Holdings is a U.S.-based refining company with assets located
on the East Coast, Midcontinent, Gulf Coast, and West Coast
regions. PBF Holdings owns six refineries with a combined capacity
of over 1 million barrels per day (bpd) and a weighted-average
Nelson Complexity Index of 12.8. These refineries include Toledo,
Ohio (170,000 bpd), Delaware City, Del. (190,000 bpd), Paulsboro,
N.J. (180,000 bpd), Chalmette, La. (189,000 bpd), Martinez, Calif.
(157,000 bpd), and Torrance, Calif. (155,000 bpd).
-- S&P's simulated default scenario assumes a prolonged cyclical
downturn in the sector when refinery margins are low and cash flow
is constrained. Capital spending for periodic maintenance,
upgrades, or regulatory and environmental requirements during such
a downturn could also contribute to liquidity issues.
-- S&P uses a discrete asset value method to value the refineries
using an average value of over $2,000 bpd.
-- S&P assumes the working capital and inventory balance satisfies
the credit facility and securitization facility claims in whole,
with no residual value.
-- Despite the rail and catalyst facility being collateralized by
different assets, S&P considers those facilities as having priority
in its default scenario due to their collateral either being
integrated with or integral to the refiners, which supports S&P's
valuation for each refinery.
-- Simulated year of default: 2024
-- Net enterprise value (after 5% administrative costs): $2.03
billion
-- Collateral value available to secured creditors: $1.94 billion
(net of priority claims)
-- Senior secured debt: $1.313 billion
-- Recovery expectations: 90%-100% (rounded estimate: 95%)
-- Collateral value available to unsecured creditors: $625
million
-- Senior unsecured debt: $1.781 billion
-- Recovery expectations: 30%-50% (rounded estimate: 35%)
Note: Debt amounts include six months of prepetition interest.
PDC WELLNESS: Moody's Affirms B3 CFR & Alters Outlook to Stable
---------------------------------------------------------------
Moody's Investors Service changed PDC Wellness & Personal Care
Co.'s ("dba as Parfums") rating outlook to stable from negative. At
the same time, Moody's affirmed the company's Corporate Family
Rating at B3 and its Probability of Default Rating at B3-PD.
Moody's also affirmed Parfums' senior secured credit facility
ratings including the company's 1st lien revolving credit facility
at B2, 1st lien term loan at B2 and 2nd lien term loan at Caa2.
The rating outlook was changed to stable from negative and the
ratings were affirmed because Moody's expects that Parfums' will
continue to improve credit metrics through continued debt repayment
and earnings growth. Specifically, Parfums' has made good progress
in reducing financial leverage by roughly a turn to 5.75x
debt-to-EBITDA due to mid-teens revenue growth, improved
profitability and cash flow. The company has benefitted from the
effects of the coronavirus that have forced consumers to remain
home. Consumers have focused on self-care, which strengthened
demand for products such as the company's Dr. Teal's Epsom salt and
Cantu multi-cultural hair care lines. Cantu also benefitted from a
higher number of consumers forced to care for their hair,
reflecting hair salon closures in the first half of 2020. As the
economic environment stabilizes, Moody's expect Parfums' rate of
growth to slow as consumers return to their regular activities away
from the home. Moody's estimates that Parfums will generate revenue
growth in the low to mid-single digits over the next 12-18 months.
Parfums will generate good free cash of about $50 -$60 million per
annum due to improved earnings and low capital spending. Moody's
expects the company's major distribution channels -- mass market
retailers, drug stores and grocery stores -- to remain open,
despite concerns related to the effects of a second wave of the
coronavirus.
The following ratings/assessments are affected by the action:
Ratings Affirmed:
Issuer: PDC Wellness & Personal Care Co.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Secured Revolving Credit Facility, Affirmed B2 (LGD3)
Senior Secured 1st Lien Term Loan, Affirmed B2 (LGD3)
Senior Secured 2nd Lien Term Loan, Affirmed Caa2 (LGD5)
Outlook Actions:
Issuer: PDC Wellness & Personal Care Co.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Parfums' B3 CFR reflects its high financial leverage of about
5.75x, small scale relative to larger and better capitalized
competitors, aggressive acquisition strategy, and event risk
related to its majority ownership by a financial sponsor. Demand
for the company's products are vulnerable to shifts in consumer
preferences, weakness in household income, retailers' shelf space
allocation and marketing support. The mass fragrance, bath,
multicultural hair care and beauty segments are also highly
competitive and Parfums faces steep competition from branded
product companies that are significantly larger, more diverse,
financially stronger, and which have much greater investment
capacity. These factors are partially balanced by the company's
projected ability to generate free cash flow, good geographic and
product diversification and solid historical organic growth in
several of the company's key product categories. The rating is also
supported by Parfum's good brand name recognition in niche markets,
its good liquidity and Moody's expectation that continued
distribution gains and product development will support the
company's operating performance over the next 12 to 18 months.
Parfums has a limited track record at its current operating scale
and the majority of its operations were assembled through a series
of acquisitions over the last five years. The management team has
delivered strong growth, despite the unfavorable economic
environment and through actions such as increasing distribution and
focusing on products with favorable demographic support. Moody's
expects performance to gradually moderate toward levels consistent
with the slower category levels. In addition, the company's
revenues and earnings are vulnerable to changing customer
preferences and competition -- in particular from much larger,
better capitalized competitors in the beauty and multi-cultural
haircare care categories. Continued investment in new product
development and marketing is necessary to attract and retain
consumers.
In terms of Environmental, Social and Governance considerations,
the most important factor for Parfums' ratings are governance
considerations related to its financial policies. Moody's views
Parfums' financial policies as aggressive given its appetite for
debt financed acquisitions. Social considerations impact Parfums in
that the company is largely a beauty company. The company sells
products that appeal to customers almost entirely due to "social"
considerations. To the extent such social customs and mores change,
it could have an impact -- positive or negative -- on the company's
sales and earnings.
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Moody's analysis has considered the effect on the performance of
consumer sectors from the current weak U.S. economic activity and a
gradual recovery for the coming months. Although an economic
recovery is underway, it is tenuous, and its continuation will be
closely tied to containment of the virus. As a result, the degree
of uncertainty around our forecasts is unusually high. Moody's
regards the coronavirus outbreak as a social risk under our ESG
framework, given the substantial implications for public health and
safety.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects the uncertainty that Parfums' can
sustain the current earnings level and debt-to-EBITDA below 6.0x
due to potential volatility in product demand as consumers resume a
more normal level of behavior. The stable outlook also reflects
that event risk under the company's financial sponsor ownership
could lead to leveraging transactions if earnings continue to grow,
and that Parfums' will remain modest in scale compared to larger
and better capitalized competitors.
Customer or competitor actions that pressure Parfums' revenue and
EBITDA through a deterioration in market share, retail distribution
or pricing could result in a downgrade. Acquisitions, shareholder
distributions, earnings weakness or other actions that lead to
debt-to-EBITDA above 7.5x, or a deterioration in liquidity could
also result in a downgrade.
An upgrade could be considered if Parfums demonstrates a track
record of profitable growth at its current scale, and maintains
more conservative financial policies that support debt-to-EBITDA
sustained below 6.0x and free cash flow to debt sustained above 6%.
Parfums will also need to maintain good liquidity.
The principal methodology used in these ratings was Consumer
Packaged Goods Methodology published in February 2020.
PDC Wellness & Personal Care Co, (dba as Parfums) headquartered in
Stamford, CT, develops, markets and sells fragrance, bath care and
specialty bath and hair care products to mass market consumers. Key
brands include Dr. Teal's, Cantu, Body Fantasies, Eylure, BODman,
and Bodycology. Parfums has been majority-owned by CVC Partners
since a leveraged buyout in 2017 and generates annual revenues of
about $500 million.
PG&E: Canyon Capital Advisor's Appeal Dismissed
-----------------------------------------------
Judge Haywood S. Gilliam, Jr. of the United States District Court
for the Northern District of California grants the Motion to
Dismiss filed by PG&E Corporation and Pacific Gas and Electric
Company.
Canyon Capital Advisors LLC sought to appeal the Confirmation Order
issued by the United States Bankruptcy Court for the Northern
District of California.
Canyon, together with other Consenting Noteholders, previously
reached a comprehensive settlement with the Debtors regarding all
issues relating to the treatment of the Utility's prepetition
funded debt under the Plan.
On January 27, 2020, the Debtors filed the Noteholder RSA Motion
seeking the Bankruptcy Court's approval of the Noteholder RSA,
which encompassed a comprehensive resolution of all outstanding
disputes with Canyon and the other Consenting Noteholders.
Through the Noteholder RSA, Canyon agreed to:
(i) support the Plan, including its provisions concerning the
payment of postpetition interest at the Federal Judgment Rate,
(ii) vote in favor of the Plan, and
(iii) otherwise act in good faith and take all actions as may
be requested by the Debtors or the Shareholder Proponents that are
reasonably necessary or appropriate and all actions required by the
Bankruptcy Court to support and achieve confirmation of the Plan
and consummation of all transactions and implementation steps
provided for or contemplated in the Noteholder RSA and the Plan.
Canyon further agreed to refrain from otherwise taking any action
that could reasonably be expected to or would interfere with,
delay, impede, or postpone the solicitation of acceptances,
confirmation, consummation, or implementation of the Plan or the
transactions contemplated in the Plan.
Judge Gilliam found that Canyon's notice of appeal was untimely
under Bankruptcy Rule 8002(a)(1). He said that the Bankruptcy
Court entered the Confirmation Order on June 20, 2020. Under
Bankruptcy Rule 8002(a)(1), the deadline for Canyon to file a
notice of appeal of the Confirmation Order would have been July 6,
2020. He explained that Canyon did not file its notice of appeal
until July 17, eleven days after the jurisdictional deadline.
Judge Gilliam contended that even if the appeal were timely, Canyon
is bound by the Noteholder RSA and has waived objection to the Plan
and the Confirmation Order, including its terms providing for
payment of postpetition interest at the Federal Judgment Rate. He
further contended that Canyon's prior commitment to supporting the
Plan, its participation in the Noteholder RSA, its vote to accept
the Plan, and its lack of objection to the Plan contradict any
suggestion that Canyon preserved any objection to, or reserved any
right to appeal confirmation of, the Plan. Judge Gilliam added that
because Canyon knowingly and voluntarily waived its right to object
to, let alone appeal, the Confirmation Order and the PPI Order,
dismissal is warranted because the Bankruptcy Court did not receive
formal notice of Canyon's positions until Canyon filed its notice
of appeal.
Judge Gilliam held that even if Canyon's appeal were timely, and
even if Canyon's failure to object to the Confirmation Order was
not fatal, the appeal should be dismissed because Canyon released
its right to pursue any further litigation related to the treatment
of its prepetition claims under the Plan, including the appropriate
rate of postpetition interest, and the Confirmation Order enjoins
Canyon from further litigating this issue.
The case is Canyon Capital Advisors LLC, Plaintiff, v. PG&E
Corporation, Defendant, Case No. 20-CV-049490-HSG (N.D. Cal.). A
full-text copy of the Order Granting Motion to Dismiss and Denying
Motion to Reset Hearing, dated December 14, 2020, is available at
https://tinyurl.com/y7shb7hy from Leagle.com.
About PG&E Corp.
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
As of Sept. 30, 2018, the Debtors, on a consolidated basis, had
reported $71.4 billion in assets on a book value basis and $51.7
billion in liabilities on a book value basis.
PG&E Corp. and Pacific Gas employ approximately 24,000 regular
employees, approximately 20 of whom are employed by PG&E Corp. Of
Pacific Gas' regular employees, approximately 15,000 are covered by
collective bargaining agreements with local chapters of three labor
unions: (i) the International Brotherhood of Electrical Workers;
(ii) the Engineers and Scientists of California; and (iii) the
Service Employees International Union.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter
11petitions (Bankr. N.D. Cal. Lead Case No. 19-30088).
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, said they are facing extraordinary challenges
relating to a series of catastrophic wildfires that occurred in
Northern California in 2017 and 2018. The utility said it faces an
estimated $30 billion in potential liability damages from
California's deadliest wildfires of 2017 and 2018.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP are
serving as PG&E's legal counsel, Lazard is serving as its
investment banker and AlixPartners, LLP is serving as the
restructuring advisor to PG&E. Prime Clerk LLC is the claims and
noticing agent.
In order to help support the Company through the reorganization
process, PG&E has appointed James A. Mesterharm, a managing
director at AlixPartners, LLP, and an authorized representative of
AP Services, LLC, to serve as Chief Restructuring Officer. In
addition, PG&E appointed John Boken also a Managing Director at
AlixPartners and an authorized representative of APS, to serve as
Deputy Chief Restructuring Officer. Mr. Mesterharm, Mr. Boken and
their colleagues at AlixPartners will continue to assist PG&E with
the reorganization process and related activities. Morrison &
Foerster LLP, as special regulatory counsel. Munger Tolles & Olson
LLP, as special counsel.
The Office of the U.S. Trustee appointed an official committee of
creditors on Feb. 12, 2019. The Committee retained Milbank LLP as
counsel; FTI Consulting, Inc., as financial advisor; Centerview
Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented by
Baker & Hostetler LLP.
PG&E Corporation and Pacific Gas and Electric Company announced
July 1, 2020, that PG&E has emerged from Chapter 11, successfully
completing its restructuring process and implementing PG&E's Plan
of Reorganization that was confirmed by the Bankruptcy Court on
June 20, 2020.
PREMIERE JEWELLERY: RJ Buying Property for $2.58M in Private Sale
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Judge James L. Garrity, Jr., of the U.S. Bankruptcy Court for the
Southern District of New York will convene a telephonic hearing on
Jan. 21, 2021, at 10:00 a.m. (EST), to consider the proposed
private sale by Marjorie Kaufman, the trustee appointed in the
Chapter 11 cases of Premiere Jewellery, Inc. and its affiliates, of
the real property located at 360 Narragansett Park Drive, East
Providence, Rhode Island to RJ Kelly Acquisition, LLC for $2.575
million, cash, on the terms of their Purchase and Sale Agreement,
dated as of Dec. 7, 2020.
The Objection Deadline is Jan. 14, 2021 at 4:00 p.m. (EST).
The Real Property is subject to a first priority Mortgage and
Security Agreement granted by ETYM Properties, LLC in favor of
Webster Bank, National Association, dated and recorded on Sept. 26,
2017 (as amended and modified from time to time). Together with
other collateral security, the Mortgage secures that certain real
estate loan agreement and related Secured Promissory Note, dated
Sept. 26, 2017, entered into between ETYM, as borrower, and Lender,
in a maximum amount of $1.735 million, of which $1,510,896 remained
outstanding as of the Petition Date.
The Real Property is subject to a second priority Mortgage and
Security Agreement granted by ETYM in favor of Lender, dated and
recorded on April 19, 2007 (as amended and modified from time to
time), securing ETYM's guarantee of the Debtors' obligations under
that certain revolving loan agreement, dated April 19, 2007, among
Debtors PAW Holdings, Inc. and Tanya, as borrowers, Lender, as
lender, and Premiere Jewellery, Inc., PJT and ETYM, among others,
as guarantors, with respect to which $7,672,641 was owed to the
Lender as of the Petition Date.
Pursuant to the Mortgages, the Real Property, among other
collateral, secures over $9 million in outstanding obligations owed
to the Lender, far exceeding the value of the Real Property.
Pursuant to a License Agreement, dated as of Oct. 16, 2020, by and
among Unique Designs, Inc., Tanya Creations, LLC, PJT, LLC and ETYM
executed in connection with the Debtors' sale to Unique, Unique is
currently utilizing the Real Property for the operation of its
business and, in exchange, paying fees amounting to market rent and
reimbursement for utility services. Specifically, a License Fee of
$47,250 and estimated Service Fees of over $62,337 are payable for
the period of October through December 2020. In addition, Unique
is maintaining general commercial liability and casualty insurance
on the Real Property. However, the Transition Services Agreement
will expire on Dec. 31, 2020, leaving the carrying costs of the
Real Property to the Debtors in the absence of a sale.
Having completed a sale of substantially all of the Debtors'
operating assets, the Trustee now asks authority to sell the
Debtors' Real Property, a 42,000 square foot, 3.58 acre
flex/industrial property out of which the Debtors formerly operated
their wholesale costume jewelry business. The Real Property
recently appraised for $2.475 million but is subject to the
mortgage liens and security interests of the Debtors' secured
lender totaling over $9 million.
Because the Real Property is mortgaged in an amount far exceeding
its value, the Trustee, in the exercise of her business judgment,
has determined that selling the Real Property by private sale with
the consent of the Debtors' secured lender is in the best interests
of the estates, as such a sale process will maximize the value of
the Real Property in satisfaction of the lender's claims while
avoiding the cost and expense of a court-approved public auction
process that ultimately will result in no excess proceeds for the
benefit of unsecured creditors. In addition, as the carrying costs
of the Real Property are being paid by the purchaser of the
Debtors' operating assets through December 2020, proceeding
expeditiously by private sale will prevent the Debtors from
unnecessarily incurring these expenses beginning again in January
2021.
By the Motion, the Trustee proposed to sell the Real Property to
the purchaser submitting the highest and best offer, the Purchaser,
for a cash purchase price of $2.575 million. The Trustee and her
real estate broker conducted a robust marketing process whereby
multiple offers were received in excess of asking price. All
bidders were requested to submit a second offer constituting their
highest and best offer. The Purchaser's offer is the highest and
best received. Based on the foregoing, the Trustee believes the
sale proposed is in the best interests of the Debtors' estates and
creditors and should be approved.
The salient terms of the Agreement are:
a. Purchase Price: $2.575 million, all cash.
b. Deposit: $25,000 upon execution of the Sale Agreement and
$100,000 upon expiration of the Inspection Period
c. Assets: The Assets to be transferred under the Purchase
Agreement include the Real Property and all easements, rights of
way, appurtenances, improvements and fixtures thereon or inuring to
the benefit of the Real Property.
d. Closing: The Closing will occur via the exchange of
documents in escrow with the Escrow Agent, First American Title
Insurance Company, no later than the later of (i) Dec. 31, 2020 and
(ii) 10 business days after satisfaction of the closing conditions;
provided that (a) the Purchaser will have the right to terminate if
the Sale Order is not entered by Feb. 26, 2021, and (b) the
Purchaser will have the right to extend the closing date for an
additional 30 days upon delivery of an additional $50,000 Extension
Deposit.
e. The Debtors' interests in the Real Property will be sold
free and clear of liens, claims, encumbrances and other interests.
The Trustee has remained in communication with the Lender with
respect to the proposed Sale and Sale Agreement, and the Lender
supports the Motion and the Sale proposed.
The Trustee is asking to transfer the Debtors' interest in the Real
Property in a private sale without the need to conduct a public
auction process. The Lender's Mortgages in excess of $9 million
far exceed the market value of the Real Property, as evidenced by
both the appraised value of $2.475 million,000 and the proposed
purchase price of $2,575,000.
Finally, the Debtor asks waiver of the 14-day stay requirement
under Bankruptcy Rule 6004(h).
A copy of the Agreement is available at https://bit.ly/3nDzMTM from
PacerMonitor.com free of charge.
The Purchaser:
RJ KELLY ACQUISITION, LLC
55 Cambridge St.
Burlington, MA 01803
Attn: Richard Griffin (rgriffin@rjkelly.com)
Brandon D. Kelly (brandon@rjkelly.com)
The Purchaser is represented by:
Donald Lussier, Esq.
PIERCE ATWOOD LLP
100 Summer Street, 22nd Floor
Boston, MA 02110
About Premiere Jewellery
Premiere Jewellery, Inc., and its affiliates design, sell, and
distribute fashion jewelry serving the private label and branded
needs of the retail industry.
On June 25, 2020, Premiere Jewellery and its affiliates
concurrently filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-11484).
The petitions were signed by Howard A. Moser, chief restructuring
officer. At the time of the filing, Premiere Jewellery disclosed
estimated assets of $10 million to $50 million and estimated
liabilities of the same range.
Judge James L. Garrity oversees the cases.
Jeffrey A. Wurst, Esq., at Armstrong Teasdale LLP, is the Debtors'
legal counsel.
On July 17, 2020, the court approved the U.S. trustee's appointment
of Marjorie E. Kaufman as Debtors' Chapter 11 trustee. Ms. Kaufman
has tapped Klestadt Winters Jureller Southard & Stevens, LLP as her
legal counsel, Getzler Henrich & Associates LLC as financial
advisor, and DaHui Lawyers as special counsel.
PROPERTY VENTURES: Objection to Proof of Claim No. 1 Granted
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Judge Brian S. Kruse of the United States Bankruptcy Court for the
District of Nebraska granted Property Ventures, LLC's objection to
John Murante's Proof of Claim No. 1.
Proof of Claim No. 1 includes an opinion of the Nebraska Court of
Appeals captioned John Murante v. Sam Murante, Sr. Mr. Murante
filed Proof of Claim No. 1 in the amount of $391,228.81 as secured
by Debtor's real estate. Mr. Murante was married to Gloria
Murante. They divorced in 2011. The Gloria Murante Intervivos
Revocable Trust is the sole member of Property Ventures.
Mr. Murante contended that in 2002, he paid Property Ventures
$50,213 for a 12.5% interest in the South Omaha City Hall building,
with funds he withdrew from 5622 Ames, LLC. He supported his claim
with a Conveyance Agreement, which conveys a 25% undivided interest
in the SOCH building for $100,000 "in hand paid." The agreement
was signed by his brother, Sam Murante, Sr., and Bob Pelshaw, each
as Manager of Property Ventures and as "Grantors", and by Mr.
Murante and Sam Murante Jr., as "Grantees".
Property Ventures asserted that Mr. Murante never received funds
from 5622 Ames, LLC and that he never paid it $50,213. Guaranty
Solutions, LLC joined the objection to Mr. Murante's claim.
Judge Kruse said that Mr. Murante "received an email from Sam on
July 9, 2007. The document did not contain typical email headers
and appeared to be an unsigned memo. Therein Sam states that
Debtor cannot transfer title to the SOCH, but 'the attached equity
accounting shall be ledgered as a payable of Property Ventures and
for the benefit of the investors as a receivable or payment in full
or partial payment to the investors.'" Judge Kruse added that the
meaning of this was not clear. Mr. Murante called it a promise
that a receivable was owed to him as a result of the 2002
Conveyance Agreement.
Judge Kruse found that on August 1, 2013, Sam executed two
affidavits to encumber Property Ventures' real estate, and that
attached to the affidavits was a promissory note, dated June 1,
2006. The promissory note provided that for value received, Sam
promised to pay Mr. Murante the principal sum of $101,768.12.
Judge Kruse explained that on August 1, 2013, Sam was not a member
or owner of Property Ventures and that he possessed no authority to
act on behalf of Property Ventures. He also explained that the
affidavits were signed by Sam only in his individual capacity and
not on behalf of Property Ventures. Judge Kruse said that it was
not clear how long before August 1, 2013, Sam's membership,
management, and authority terminated or whether it was part of Sam
and Gloria's divorce in 2011.
Judge Kruse held that the note was not issued by Property Ventures.
He further held that the affidavits were not an acknowledgment by
Property Ventures and were, at best, a mere admission of legal
liability by Sam. Judge Kruse said that they did not display a
willingness by Property Ventures or Sam to pay the debt in the
future.
The case is IN THE MATTER OF PROPERTY VENTURES, LLC, Chapter 11,
Subchapter V, Debtor, Case No. BK20-80750, (Bankr. D. Neb.). A
full-text copy of the Order Granting Debtor's Objection to Claim
No. 1 dated December 11, 2020 is available at
https://tinyurl.com/yd7r8xv2 from Leagle.com
About Property Ventures
Property Ventures, LLC is the owner of a property located at
5002-06 S. 24th St Omaha, NE 68107. The Debtor previously sought
bankruptcy protection on Dec. 13, 2017 (Bankr. D. Neb. Case No.
17-81762).
Property Ventures, LLC filed a voluntary petition under Chapter 11
of the Bankruptcy Code (Bankr. D. Neb. Case No. 20-80750) on June
8, 2020. The petition was signed by Lisa Rezac, Trustee, Gloria Ann
Murante Intervivos Trust. At the time of the filing, the Debtor
disclosed total assets of $318,708 and total liabilities of
$6,210,101 as of May 31, 2020. The Debtor tapped Turner Legal
Group, LLC as counsel.
RBP GLOBAL: Moody's Completes Review, Retains B3 CFR
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Moody's Investors Service has completed a periodic review of the
ratings of RBP Global Holdings Ltd and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review in which Moody's reassessed the
appropriateness of the ratings in the context of the relevant
principal methodology, recent developments, and a comparison of the
financial and operating profile to similarly rated peers. The
review did not involve a rating committee. Since January 1, 2019,
Moody's practice has been to issue a press release following each
periodic review to announce its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
KEY RATING CONSIDERATIONS
Indivior's B3 Corporate Family Rating reflects significant revenue
concentration in a key product -- Suboxone Film, which accounts for
about 50% of its revenue. The sustainability of Indivior's future
business profile hinges on the successful commercialization of its
newer products, Sublocade and Perseris. Indivior will be dependent
on their success to improve revenue diversity and partially offset
the significant earnings declines from Suboxone due to generic
competition. Supporting the rating is Indivior's significant cash
balance relative to a modest amount of funded debt.
The principal methodology used for this review was Pharmaceutical
Industry published in June 2017.
RHINO BARE: Court Extends Exclusivity Periods Thru Feb. 25
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At the behest of Debtor Rhino Bare Projects LLC, Judge Sheri
Bluebond extended the Debtor's exclusive right to file a chapter 11
plan from November 27, 2020, to February 25, 2021, and to obtain
acceptances to a Plan from January 26, 2021, to April 26, 2021.
According to the Debtor's motion to extend, the exclusivity
extension will allow for more time for claims to be filed by the
Claims Bar Date and for the Debtor to complete its analysis,
objection to, and/or negotiations with regard to filed and/or
scheduled disputed claims, so as to proceed with reorganization
without the interference and expense of a competing chapter 11
plan, and to extend the period in which Debtor may obtain
acceptances and confirm a chapter 11 plan.
The Debtor is a holding company whose primary asset is an interest
in a holding company known as Canico Capital Group, LLC. The Debtor
commenced the chapter 11 case in good faith, with the intention to
establish a plan of reorganization to timely pay its creditors in a
manner to be overseen by the Court. Chapter 11 was precipitated by
litigation and an impending sheriff's sale of the Debtor's interest
in Canico.
The Debtor timely filed its Schedules and related statements on
September 3, 2020. Canico owns interests in 2 LLCs that own real
estate located in Nevada and Arizona, respectively. The Debtor's
interest in Canico is non-voting and economic only. Canico Capital
Group, LLC is run by Abraham Assil.
The Debtor anticipates meaningful negotiations with its creditors
around the amounts of their claims and payment terms, as the Claims
Bar Date of December 7, 2020, has passed.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/3kY1GYf at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/2USDWdz at no extra charge.
About Rhino Bare Projects LLC
Rhino Bare Projects LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
20-16889) on July 30, 2020. In the petition signed by Victor Galam,
managing member, the Debtor estimated $10 million to $50 million in
both assets and liabilities.
Judge Sheri Bluebond presides over the case. Leslie Cohen, Esq. at
LESLIE COHEN LAW PC represents the Debtor as counsel.
S-TEK 1: Court OK's Interim Cash Collateral Use
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Judge Robert H. Jacobvitz of the United States Bankruptcy Court for
the District of New Mexico, granted S-Tek 1, LLC emergency interim
relief to use cash collateral from December 2, 2020 through the
date of the final hearing on the Motion for Use of Cash
Collateral.
S-Tek proposed to pay its 15 employees approximately $70,400
through December 30, 2020. S-Tek said that this figure represents
an average gross pay of $4,693.33 per employee over two pay
periods. It also said that its "staff includes survey technicians,
crew chiefs, a general manager, drafters, and a licensed surveyor.
None of the staff are paid the statutory minimum wage because
recruiting and hiring qualified employees is difficult. In
addition, the demand for surveying services is currently high,
causing a substantial amount spent on overtime pay, which is
reflected in the budget." S-Tek explained that the proposed budget
for personnel costs is not excessive, and the amounts requested in
the budget to meet the payroll expenses during the Interim Period
is reasonable. S-Tek contended that it would suffer immediate and
irreparable harm if it is not able to pay its employees and other
operating expenses during the Interim Period.
Surv-Tek, Inc. objected to the Debtor's use of cash collateral,
arguing among other things, that pre-petition, a state court
ordered the Debtor to cease operations and the Debtor should not be
permitted to use cash collateral to enable it to continue
operations in violation of the state court's order.
In December 2018, S-Tek entered into a Purchase Agreement with
Surv-Tek whereby S-Tek purchased all or a substantial portion of
the assets of Surv-Tek. S-Tek also excuted a promissory note
payable to Surv-Tek for approximately $1,550,000. The Note
provides for monthly payments of $16,440.15, As part of the sale,
S-Tek and Surv-Tek executed a "Non-Compete Agreement" in which
Surv-Tek agreed not to compete with S-Tek for five years after the
date of sale. The Non-Compete Agreement also provided that, in the
event of uncured default on the Note by S-Tek, the Non-Compete
Agreement's provisions preventing Surv-Tek from providing surveying
services would terminate automatically. Moreover, after an uncured
default, S-Tek would be barred from providing commercial or
residential surveying services in the State of New Mexico if
Surv-Tek elected to conduct a surveying business in New Mexico.
In July 2019, S-Tek sued Surv-Tek and others in the Second Judicial
District Court of New Mexico for fraud, negligent
misrepresentation, material breach of contract, breach of good
faith and fair dealing, equitable recovery, and violation of the
UCC. Surv-Tek counter-claimed for S-Tek's failure to timely pay
the Note, among other things. The State Court found that, as of
October 2020, the amount Debtor was in arrears in its obligations
to Surv-Tek was $180,841.70, which consists of ten past due monthly
installments of $16,440.15 each, plus ten monthly late fees of
$1,644.02 each, for the period beginning January 1, 2020 through
November 1, 2020. The State Court ordered S-Tek to come current on
all indebtedness due and owing under the Note by 5 p.m. on November
2, 2020. It further ordered that in the event S-Tek does not
comply with the Deadline to Cure, it and its owners Randy Asselin
and Christopher Castillo, must immediately abide by all
restrictions and obligations imposed upon them under the subject
Non-Compete Agreement, including, without limitation, to
immediately cease and desist from engaging in any competition with
Surv-Tek, and must relinquish any use or claim to the
domain/website known as www.survtek.com, the tradename known as
Surv-Tek, SurvTek or Survtek or any similar variation thereof, the
Surv-Tek logo, and the telephone number (505)897-3366. The State
Court Order also provided that, even if the amount in arrears was
timely paid, the Debtor myst abide by the Non-Compete Agreement if
it failed to pay $16,440.15 monthly thereafter. S-Tek did not pay
the amount in arrears by November 2, 2020. On November 5, 2020,
S-Tek and Surv-Tek engaged in mediation, during which Surv-Tek
rejected S-Tek's tender of $180,841.70. No agreement was reached
as a result of mediation. Surv-Tek elected to conduct a surveying
business in New Mexico.
Judge Jacobvitz said that the State Court Order requiring the
Debtor to comply with the Non-Compete Agreement as a result of the
Debtor's uncured default would effectively shut down all of
Debtor's operations. He also said that enforcement of the State
Court Order is subject to the automatic stay. Judge Jacobvitz
explained that Bankruptcy Code Section 362(a)(2) provides that with
exceptions not applicable here, the commencement of a bankruptcy
case "operates as a stay, applicable to all entities, of the
enforcement, against the debtor or against property of the estate,
of a judgment obtained before the commencement of the case under
this title." He further explains that the State Court Order falls
within this provision. Judge Jacobvitz adds that it was entered
before the commencement of the bankruptcy case, and enforcement of
the State Court Order would be against the Debtor and would affect
property of the bankruptcy estate.
Judge Jacobvitz held that the Court will allow use of cash
collateral during the Interim Period to pay non-insider employees
for services rendered within the two-week period preceding the
Petition Date to avoid immediate and irreparable harm to the
estate. He further held that the Court has such authority under
Sections 105(a) and 507(a)(4) to prevent harm to the estate. Judge
Jacobvitz contends that there is a greater risk of non-insider
employees quitting if they are not paid their full wages than
insider employees. He adds that such ruling is without prejudice
to the Debtor requesting further use of cash collateral to pay
insider or non-insider employees for services rendered
pre-petition.
The case is IN RE S-TEK 1, LLC, Debtor, Case No. 20-12241-j11,
(Bankr. D.N.M.). A full-text copy of the Memorandum Opinion
Regarding Motion for Use of Cash Collateral on An Interim Emergency
Basis Pending Final Hearing, dated December 11, 2020, is available
at https://tinyurl.com/y9ttl97g from Leagle.com.
About S-Tek 1, LLC
S-Tek 1, LLC aka SurvTek -- https://www.survtek.com -- is a land
surveying and consulting firm providing professional surveying
services to both the private and public sectors throughout New
Mexico.
S-Tek 1, LLC, based in Albuquerque, NM, filed a Chapter 11 petition
(Bankr. D.N.M. Case No. 20-12241) on Dec. 2, 2020. In its
petition, the Debtor disclosed $355,177 in assets and $2,251,153 in
liabilities. The petition was signed by Randy Asselin, managing
member. The Hon. Robert H. Jacobvitz presides over the case. NEPHI
D. HARDMAN ATTORNEY AT LAW, LLC, serves as bankruptcy counsel.
SPHERATURE INVESTMENTS: Case Summary & 40 Top Unsecured Creditors
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Lead Debtor: Spherature Investments LLC
WorldVentures Holdings, LLC
5100 Tennyson Parkway
Plano, TX 75024
Business Description: WorldVentures --
https://www.worldventures.biz --
is a privately held company based in
Plano, Texas, that sells travel and
leisure club memberships providing a
diverse set of products and experiences.
Chapter 11 Petition Date: December 21, 2020
Court: United States Bankruptcy Court
Eastern District of Texas
Six affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
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Spherature Investments LLC (Lead Debtor) 20-42492
Rovia, LLC 20-42493
WorldVentures Marketing, LLC 20-42494
WorldVentures Marketing Holdings, LLC 20-42495
WorldVentures Marketplace, LLC 20-42496
WorldVentures Services, LLC 20-42497
Judge: Hon. Brenda T. Rhoades
Debtors' Counsel: Marcus A. Helt, Esq.
Thomas C. Scannell, Esq.
FOLEY & LARDNER LLP
2021 McKinney Avenue, Suite 1600
Dallas, TX 75201
Tel: (214) 999-3000
Fax: (214) 999-4667
Email: mhelt@foley.com
tscannell@foley.com
Debtors'
Restructuring
Advisor: LARX ADVISORS, INC.
2600 Network Boulevard
Suite 600
Frisco, TX 75034
Debtors'
Claims &
Noticing
Agent and
Administrative
Advisor: STRETTO
https://cases.stretto.com/Spherature/court-docket
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $50 million to $100 million
The petitions were signed by Michael Poates, chief operating
officer.
A copy of Spherature Investments' petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/MDUAESA/Spherature_Investments_LLC__txebke-20-42492__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 40 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Franklin Street Properties Rent $1,784,242
Corp.
33037 Collection Center Drive
Chicago, IL
60693, USA
Christine Villar
Tel: 781-557-1377
Email: cvillar@fspreit.com
2. KGS Services LLC Notes Payable $1,773,430
2504 Beacon Crest Drive
Plano, TX
75093-4226
United States
Tel: (214) 597-9263
Email: waynetnugent@yahoo.com
3. Phelps Dunbar LLP Professional $1,760,727
Post Office Services
Box 974798
Dallas, TX 75397, USA
Haley R. Sylvester
Tel: 251-441-8218
Email: haley.sylvester@phelps.com
4. Tayjak Enterprises Notes Payable $1,722,111
3308 Preston Road
350-154
Plano, TX 75093, USA
Dan Stammen
Tel: 214-228-0669
Email: dan.stammen@verizon.net
5. BG Enterprises, LLC Professional $1,128,848
15707 Coit Rd, Ste C-210 Services
Dallas, TX 75248, USA
Bill Gouldd
Email: billgouldd@me.com
6. Cani Enterprises, LLC Professional $850,000
Matthew Morris Services
4008 Beverly Drive
Carrollton, TX
75010, USA
Matt Morris
Tel: 972-740-2408
Email: matt@mattmorris.com
7. Cani Enterprises, LLC Professional $850,000
Matthew Morris, 4008 Services
Beverly Drive
Carrollton, TX
75010, USA
Matt Morris
Tel: 972-740-2408
Email: matt@mattmorris.com
8. Nancy Lieberman Enterprises Professional $388,923
5756 Quebec Lane Services
Plano, TX 75024, USA
Nancy Lieberman
Tel: 214-924-3784
Email: nancy@nancylieberman.com
9. Working Solutions Professional $227,934
19111 Dallas Pkwy, #180 Services
Dallas TX 75287, USA
Mika Washington
Tel: 972-964-4800
Email: mwashington@workingsol.com
10. WorldVentures Foundation Donations $209,281
5100 Tennyson Parkway
Plano TX 75024, USA
Eddie Head
Tel: 310-595-6954
Email: ehead@wvholdings.com
11. Montgomery Capital Professional $190,000
Advisors, LLC Services
2500 Dallas Parkway
Suite 300
Plano TX 75093, USA
Tom Montgomery
Tel: 214-509-5042
Email: tmontgomery@mca-texas.com
12. West Publishing Corporation Professional $131,959
dba Thomson Reuters - Services
West, West Payment Center
P.O. Box 6292
Carol Stream, IL 60197, USA
Accounts Receivable
Tel: 800-522-0552
Email: west.arpaymentcenter@
thomsonrueters.com
13. Patrick Mirandah Co. Professional $129,878
Suite 3B-19-3, Level 19 Services
Block 3B
Plaza Sental, Jalan Stesen
Sentral 5
Putrajaya MYS
Yan Chongshuo
Tel: +65 6336 4679
Email: chongshuo.yan@mirandahl
14. Wm. Charles Bundren & Professional $122,686
Associates Law Group PLLC Services
2591 Dallas Pkwy
Suite 300
Frisco, TX 75034, USA
Charles Bunden
Tel: 214-808-3555
Email: charles@bundenlaw.net
15. Baker Tilly Virchow Krause Professional $107,806
LLP (MCG) Services
PO Box 78975
Milwaukee, WI 53278, USA
Jeanette Musacchio
Tel: 972-989-2836
Email: Jeanette.Musacchio@bakertilly.com
16. TNS US LLC Professional $103,942
DBA TNS Custom Research Inc. Services
3333 Warrenville Rd
Ste 400, Lisle IL 60532
Accounts Receivable
Email: accountsreceivable-NAmerica@tnsglobal.com
17. InContact, Inc. Professional $100,867
75 West Town Ridge Parkway Services
Tower 1
Sandy UT 84070, USA
Ken Johnson
Tel: 800-399-0928
Email: ken.johnson@niceincontact.com
18. Wayne Nugent Expenses $88,789
2504 Beacon Crest Drive
Plano TX 75093-4226, USA
Wayne Nugent
Tel: 214-597-9263
Email: wayne@worldventures.co
19. Stratus Audio Inc Professional $79,283
(Optimal Phone) Services
PO Box 675007
Detroit MI 48267, USA
Tammy Lawson
Tel: 727-205-9263
Email: TLawson@stratusvideo.com
20. Smartling, Inc. Professional $69,253
1375 Broadway, 14th Floor Services
New York NY 10018, USA
Jack Welde
Tel: 646-493-9494
Email: jack@smartling.com
21. Taylor Wessing LLP Professional $59,979
Parnassusweg 807 Services
1082 LA, Amsterdam,
Netherlands
Ioana Radu
Tel: +44 20 3077 7242
Email: I.Radu@taylorwessing.com
22. Onit, Inc. Professional $53,654
601 Sawyer Services
Ste 750
Houston, TX 77077, USA
York Richards
Tel: 1-800-281-1330
23. Century Link Professional $53,578
P.O. Box 910182 Services
Denver CO 80291, USA
Sperry Belinda
Tel: 720-883-0741
Email: Belinda.Sperry@centurylink.com
24. Qualtrics, LLC Professional $49,000
400 Qualtrics Dr. Services
Provo UT
84604, USA
Katie Burke
Tel: 469-850-6684
Email: kburke@qualtrics.com
25. BlueCross BlueShield/ Employee $48,262
Health Care Service Corp. Benefits
P.O. Box 731428
Dallas, TX 75373, USA
Claudia Nichols
Tel: 972 766 9322
Email: claudia_nichols@bcbstx.com
26. Dave Watson Professional $47,276
9029 S Yosemite Services
#2303
Lone Tree, Co 80124
Littleton CO 80124, USA
Dave Watson
Tel: 1-507-312-0290
Email: davewatson22@hotmail.com
27. Inland Revenue Department Tax $46,480
(Hong Kong), 5 Gloucester Road
Wan Chai, HKG
Tel: 2594-1272
Email: taxpf@ird.gov.hk
28. Lionbridge Technologies, Inc. Professional $46,072
PO Box 347579 Services
Pittsburgh PA 15251, USA
Francis Brown
Tel: 978-964-9559
Email: Francis.Brown@lionbridge.com
29. Abbrivo International, LLC Professional $45,451
dba International Translating Services
Company
299 So Main Street
Ste 1300, Salt Lake City
UT 84111, USA
Daniel Doxey
Tel: 214-649-3213
Email: daniel.doxey@internationaltranslating.com
30. Adobe Systems Inc Professional $40,749
29322 Network Place Services
Chicago, IL 60673, USA
Shrabonti Das
Tel: 720-472-7054
Email: shrdas@adobe.com
31. Harris Rothenberg Professional $39,992
International, Inc. Services
dba Humana Wellness
500 West Main Street
Louisville KY 40202 USA
Becky Carrier
Tel: 502-580-5914
Email: rcarrier@humana.com
32. 2nd Watch, Inc. Professional $38,122
2310 North Molter Services
Ste 103
Liberty Lake WA
99019, USA
Jayme Brown
Email: jabrown@2ndwatch.com
33. O.C. Tanner Recognition Professional $37,879
Company Services
PO Box 410023
Salt Lake City UT 84141, USA
Becky Naster
Tel: 801 493 3129
Email: Becky.Nester@octanner.com
34. Rapid7 LLC Professional $37,365
100 Summer Street Services
13th Floor, Boston MA
02110, USA
Jessica Fernandez
Tel: 866-390-8113
Email: jessica_fernandez@rapid7.com
35. Optimum Technologies, LLC Professional $36,770
1955 S. Val Vista Dr 118 Services
Mesa AZ 85204, USA
Simon Chatfield
Tel: 480-776-6390
Email: simon@optimumhq.com
36. Judin Combrinck Inc. Professional $33,872
The Wanderers Office Park Services
2nd Floor, the Pavillion
52 Corlett Drive
Illova Sandton 2196, ZAF
Michael Judin
Tel: +27 83 300-5000
Email: michael@elawnet.co.za
37. Ruder Finn Professional $33,000
Units C-E 24/F Services
Neich Tower, 128 Gloucester
Road, Hong Kong, HKG
Ian Glover
Tel: 646-757-6106
Email: Gloverl@ruderfinn.com
38. VersionOne, Inc. Professional $26,191
6220 Shiloh Road Services
Ste 400
Alpharetta GA 30005 USA
CollabNet Version 1, +1
Tel: (678) 268-3320
39. CCH Incorporated Professional $24,899
c/o Wolters Kluwer Services
2700 Lake Cook Road
Deerfield IL 60015, USA
David Durst
Tel: 1-888-336-6670
Email: david.durst@wolterskluwer.com
40. Winstead PC Professional $24,039
2728 N. Harwood St Ste 500 Services
Dallas TX 75201, USA
SPIDERMAN AND TINA MULHOLLAND: Court to Deny Proposed Plan
----------------------------------------------------------
Judge Jerry A. Funk of the United States Bankruptcy Court for the
Middle District of Florida, Jacksonville Division held that he will
deny Spiderman Scott Mulholland and Tina Marie Foley Mulholland's
Fourth Modified Amended Chapter 11 Plan.
The Debtors were authorized to maintain possession of estate
property as debtor-in-possession. Their bankruptcy estate includes
one hundred percent of the stock in a Florida corporation named US
Building Consultants, Inc. US Building remediates commercial
construction defects related to water intrusion. US Building is
operated by Spiderman Mulholland, who is the face of the business,
as well as the owner and an employee of US Building. Tina Marie
Mulholland is his wife and is also an employee.
Rebekka Trahan filed a secured proof of claim stemming from a
state-court judgment she obtained against both Debtors in 2018.
The judgment stated that Ms. Trahan shall recover from the
Muhlhollands, the sum of $4,643,000.00, that shall bear interest at
the rate of 5.97% a year. Ms. Trahan's allowed claim is secured by
a statutory judgment lien on Debtors' interest in all personal
property in Florida subject to execution, other than fixtures,
money, negotiable instruments, and mortgages. The Judgment Debt is
nondischargeable as to Spiderman Mulholland. On July 13, 2020, Ms.
Trahan filed an amended proof of claim, which values the claim at
roughly $5.1 million with post-judgment interest.
In July 2019, the Court entered a consent order in which the
parties agreed US Building "is valued at a minimum of" $4.8
million. The Valuation Order resolved Debtors' amended motion to
determine the secured status of Ms. Trahan's claim.
Ms. Trahan is the sole Class 5 creditor and is an impaired creditor
under Section 1124 of the Bankruptcy Code. The Debtors' Proposed
Plan states that as of the Effective Date, Mr. Mulholland will turn
over his 100% equity holding in US Building to Ms. Trahan as the
indubitable equivalent of her claim in the amount of $4,800,000.00,
pursuant to her agreement as to value. After the turnover of the
USBC stock, the remaining balance of Ms. Trahan's claim, will be
$375,639.95. The Debtors will pay this amount through minimum
monthly payments of $2,500, though the Debtors may pay the
outstanding balance at any time without penalty. Upon settlement
of the Debtors' legal malpractice claim, the Debtors will pay the
then remaining balance of Ms. Trahan's claim with the settlement
proceeds. If after such payment any amount of Ms. Trahan's claim
remains unpaid, the Debtors will continue to make $2,500 monthly
payments until the claim is paid in full. On the date that is five
years after the Effective Date, the Debtors will satisfy any
remaining balance of Ms. Trahan's claim through a lump sum payment.
While the claim is outstanding, any remaining unpaid principal
will continue to accrue interest at the statutory rate.
Judge Funk held that Ms. Trahan's claim is impaired because the
Judgment Debt calls for direct cash payment, whereas the Proposed
Plan calls for in-kind payment in the form of turnover of property.
He said that the Proposed Plan does not leave Ms. Trahan's rights
"unaltered." Judge Funk explains that while there is no dispute as
to the proper valuation for US Building, there is no potential
buyer and no clear path for Ms. Trahan to sell US Building to any
third party. He further explains that even if a potential buyer
manifested after a turnover, it would be extremely doubtful that
Ms. Trahan would receive $4.8 million due to the lack of a
noncompete agreement with Mr. Mulholland or any other employee.
Judge Funk adds that US Building's revenue would likely drop
precipitously without Mr. Mulholland's subject-matter knowledge, as
well as the goodwill and book of clients he controls, which are the
core assets of the business. He said that the Court cannot
conclude that Ms. Trahan's treatment is "completely compensatory"
or that there is "no reasonable doubt" Ms. Trahan will be paid in
full under the Proposed Plan. He also said that the turnover of US
Building is anything but compensatory, and substantial doubt exists
as to whether ownership of US Building would allow Ms. Trahan to
recoup the full amount of money owed to her.
The case is In re: SPIDERMAN SCOTT MULHOLLAND and TINA MARIE FOLEY
MULHOLLAND Chapter 11, Debtors, Case No. 3:18-bk-4096-JAF, (Bankr.
M.D. Fla.). A full-text copy of the Findings of Fact and
Conclusions of Law, dated December 11, 2020, is available at
https://tinyurl.com/y7tv3zfh from Leagle.com.
About Spiderman Scott and Tina Marie Mulholland
Spiderman Scott Mulholland and Tina Marie Foley Mulholland filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
M.D. Fla. Case No. 18-04096) on November 24, 2018. They are
represented by Seldon J. Childers, Esq. of CHILDERSLAW LLC.
SPIDERMAN AND TINA MULHOLLAND: No Evidence for Dismissal
--------------------------------------------------------
Judge Jerry A. Funk of the United States Bankruptcy Court for the
Middle District of Florida, Jacksonville Division, held that there
is not enough evidence to grant Rebekka Trahan's Motion to Dismiss,
for Conversion or in the Alternative for Appointment of a Trustee.
Ms. Trahan filed a secured proof of claim stemming from a
state-court judgment debt obtained by her against Spiderman Scott
Mulholland and Tina Mulholland in 2018. The judgment stated that
Ms. Trahan shall recover from the Mulhollands the sum of
$4,643,000.00, that shall bear interest at the rate of 5.97% a
year. Ms. Trahan's allowed claim is secured by a statutory
judgment lien on the Mulhollands' interest in all personal property
in Florida subject to execution, other than fixtures, money,
negotiable instruments and mortgages. The Mulhollands' bankruptcy
estate includes 100% stock in a Florida corporation named US
Building Consultants, Inc., which remediates commercial
construction defects related to water intrusion.
Ms. Trahan alleged the following bases as "cause":
(a) Debtors' diminution of the bankruptcy estate with no
reasonable likelihood of rehabilitation under Section
1112(b)(4)(A);
(b) Debtors' gross mismanagement of the estate under Section
1112(b)(4)(B);
(c) Debtor's failure to maintain insurance that poses a risk
to the estate under Section 1112(b)(4)(C);
(d) Debtors' unexcused untimely financial reporting under
Section 1112(b)(4)(E); and
(e) Debtors' lack of good faith in the filing/administering of
the bankruptcy case.
Judge Funk held that given that the Debtors are in a financially
stable situation, except for the judgment debt owed to Ms. Trahan,
"cause" under Section 1112(b)(4)(A), did not exist because there
was no unlikelihood of rehabilitation. He further held the facts
and evidence presented did not demonstrate mismanagement of the
estate to warrant dismissal, conversion, or appointment of a
trustee.
Judge Funk said that Ms. Trahan's claim that the Debtors' failure
to insure an unimproved 3-acre parcel of land during the bankruptcy
case constitutes "cause", grasps at straws. He explained that the
failure to insure unimproved land does not pose a "risk" to the
bankruptcy estate as contemplated under Section 1112(b)(4)(C). He
further explained that Ms. Trahan presented no credible evidence on
the liability exposure from the unimproved land, and the Court
could not speculate as to such liability exposure. Judge Funk
added that the unimproved parcel does not provide income to the
Debtors or to the bankruptcy estate. He held that there was no
evidence showing this failure to insure the parcel created a viable
risk of "deepening insolvency."
Judge Funk found that the present facts did not demonstrate an
"unexcused failure" by the Debtors to fulfill their reporting as
contemplated by Section 1112(b)(4)(F). He said that the untimely
reports were ultimately produced and were not materially misleading
or false. Judge Funk also found that while the Debtors' Chapter 11
petition was brought with intent to bring Ms. Trahan's debt
collection efforts to a pause, filing a bankruptcy petition for
this purpose was not an abuse of the bankruptcy process and did not
constitute intent to "frustrate" Ms. Trahan's efforts to enforce
her rights. He explained that the Debtors were allowed to use the
bankruptcy process to financially reestablish themselves, and that
the Debtors' use of US Building's cash assets to pay wages and
administrative claims did not cross the line into bad faith under
the circumstances.
The case is In re: SPIDERMAN SCOTT MULHOLLAND and TINA MARIE FOLEY
MULHOLLAND Chapter 11, Debtors, Case No. 3:18-bk-4096-JAF, (Bankr.
M.D. Fla.). A full-text copy of the Order, dated December 11,
2020, is available at https://tinyurl.com/y8eud3os from
Leagle.com.
About Spiderman Scott and Tina Marie
Mulholland
Spiderman Scott Mulholland and Tina Marie Foley Mulholland filed a
voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr.
M.D. Fla. Case No. 18-04096) on November 24, 2018. They are
represented by Seldon J. Childers, Esq. of CHILDERSLAW LLC.
TALLGRASS ENERGY: Moody's Rates New $500MM Sr. Unsec. Notes 'B1'
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Tallgrass Energy
Partners, LP's proposed $500 million senior unsecured notes due
2030. All other ratings of TEP and its parent company, Prairie ECI
Acquiror LP are unchanged, including Prairie's B1 Corporate Family
Rating. The stable outlook is also unchanged.
TEP is a wholly owned subsidiary of Prairie through which Prairie
conducts its operations. The notes are being offered to fund a
simultaneously announced tender offer for TEP's existing senior
unsecured notes due 2023.
Assignments
Issuer: Tallgrass Energy Partners, LP
New Issuance: Senior Unsecured notes due 2030, Assigned B1 (LGD4)
RATINGS RATIONALE
The company intends to use the net proceeds of the proposed senior
notes issuance to redeem its 2023 notes. Moody's views this
transaction as credit neutral as the overall debt burden of Prairie
remains mostly unchanged and the nearest term maturity is being
refinanced.
TEP's senior unsecured notes (including the proposed notes) are
rated B1, the same as Prairie's B1 CFR. Although the notes are
subordinated to TEP's $2.25 billion senior secured revolving credit
facility (unrated), which has a senior secured priority claim to
TEP's assets, the notes are in a structurally superior position
within the capital structure and have a priority claim to the
assets compared to Prairie's $1.5 billion senior secured term loan.
Prairie's term loan is rated B3, two notches below Prairie's B1 CFR
reflecting its structural subordination to TEP's revolving credit
facility and unsecured notes. The term loan is secured only by
Prairie's equity ownership interests in TEP and its General Partner
and is the most junior debt in the capital structure.
Prairie's B1 CFR is constrained by the company's high financial
leverage including Prairie's term loan, debt at TEP and pro-rata
share of Rockies Express Pipeline LLC's (REX, Ba2 stable) debt
vis-a-vis the cash flow generated by the operating assets at TEP
and its share of REX. Prairie's consolidated financial leverage
(debt/EBITDA ratio) at year-end 2020 will be significantly above
7x. Moody's sees little chance for the leverage to improve
significantly in 2021, as growth projects are challenged. Commodity
price stress in 2020 presents a challenging environment for
midstream companies' growth options as oil and gas production
volume will not grow significantly in 2021. Prairie benefits from
its meaningful size, its predominantly interstate pipeline asset
base with cash flow from long-term firm transportation contracts
and some earnings diversification. Prairie's financial sponsors
include Blackstone Infrastructure Partners, and the ratings
incorporate governance considerations including the sponsors'
aggressive financial policies with respect to financial leverage
and distributions.
Prairie's stable rating outlook reflects the predictable cash flow
from the company's existing long-term firm transportation contracts
and some earnings diversification.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
If Prairie's debt leverage is increased through weaker than
expected earnings, aggressive distribution policies or debt funded
growth then its ratings could be downgraded. Consolidated
Debt/EBITDA sustained above 7.5x could result in a ratings
downgrade.
Prairie's ratings could be upgraded if the company reduces debt and
enhances its contracted revenue position and counterparty risk.
Consolidated Debt/EBITDA below 7x could be supportive of a ratings
upgrade.
The principal methodology used in this rating was Midstream Energy
published in December 2018.
Prairie, though its ownership of TEP, provides crude oil
transportation, natural gas transportation and storage, processing
and water business services for customers in the Rocky Mountain,
Appalachian and Midwest regions of the United States.
TCF FINANCIAL: Moody's Reviews Ba1(hyb) Rating on Preferred Stock
-----------------------------------------------------------------
Moody's Investors Service has affirmed the long-term and short-term
ratings and assessments of Huntington Bancshares Incorporated
(Huntington, long-term senior unsecured Baa1), including the a3
standalone Baseline Credit Assessment, of its lead bank, Huntington
National Bank (long-term deposits Aa3), following its announcement
that it has agreed to acquire TCF Financial Corporation. The rating
outlook for Huntington remains stable. However, Moody's has changed
the outlook on Huntington National Bank's long-term deposit, senior
unsecured debt and issuer ratings to negative, from stable, based
on Moody's view that recent deposit growth and changes in the
banks' balance sheet as a result of the acquisition may reduce the
amount of unsecured debt on Huntington's balance sheet, a key input
in Moody's Loss Given Failure analysis, resulting in a lower degree
of protection for its creditors.
In the same action, Moody's has placed on review for upgrade all
long-term ratings of TCF Financial Corporation (TCF, noncumulative
preferred stock Ba1(hyb)) as well as the long-term ratings and
assessments, including the baa1 BCA, of its lead bank, TCF National
Bank (long-term deposits A2). TCF National Bank's Prime-2(cr)
short-term counterparty risk assessment was placed on review for
upgrade. The bank's other short-term ratings were affirmed.
"With the TCF acquisition, Huntington will become one of the
largest regional banks in the US, gaining market positions in its
key midwest market and strengthening the banks' national lending
businesses" said Rita Sahu, Vice President - Senior Credit Officer.
"Although the acquisition introduces significant operational and
integration risks, we have affirmed Huntington's ratings based on
the bank's credit fundamentals and strong acquisition track
record," Ms. Sahu added.
RATINGS RATIONALE
The rating actions for Huntington and TCF follows the banks'
announcement that they will merge in an all-stock transaction.
Huntington and TCF had total assets of $120 billion and $48
billion, respectively, as of 30 September 2020 and the combined
company will operate under the Huntington name. Huntington'
shareholders will have an ownership stake of approximately 69% of
the merged company.
The transaction combines two midwestern US retail and commercial
banking franchises along with national lending businesses. TCF's
footprint overlaps with Huntington's but also includes contiguous
and noncontiguous regional markets. The banks indicated that they
expect cost savings to equal 37% of TCF's noninterest expense base
by 2023, which is substantial.
The combined bank will benefit from increased loan diversification
by asset class and geography, as both banks run traditional
regional bank in-footprint lending businesses and national
businesses. Huntington has been a long-established participant in
indirect automobile and recreational vehicle lending and has a
smaller equipment finance portfolio. TCF has sizeable national
equipment and inventory financing businesses. The combination will
also increase scale and penetration in deposits with the combined
organization having a top five deposit market share in
approximately 69% of the metropolitan statistical areas in which it
operates.
Moody's stated that the proposed merger with TCF is a large
undertaking for Huntington given that TCF's total assets equaled
about 40% of Huntington's at 30 September 2020, which introduces
significant operational and integration risks. However, Moody's
recognizes Huntington's and TCF's good acquisition integration
track records. In 2016, Huntington completed the acquisition of
FirstMerit Corporation, which was also large, equaling about 36% of
Huntington's assets at the time. TCF completed a merger of equals
with Chemical Financial Corporation (Chemical) in 2019. Still,
until the acquisition has been integrated, Huntington's risk
profile will be heightened, particularly as the economic fallout
from the coronavirus pandemic is not yet fully known. The rating
agency may reevaluate its assessment of the transaction prior to
closing should the performance of either company deteriorate beyond
expectations in the coming quarters, against the backdrop of
uncertain operating conditions due to the ongoing coronavirus
pandemic.
Following the ratings affirmation, Huntington's outlook remains
stable. However, Moody's has changed the outlook on Huntington
National Bank and on its long-term deposit, senior unsecured debt
and issuer ratings to negative from stable, based on its view that
recent deposit growth and the planned acquisition may reduce the
amount of unsecured debt on Huntington's balance sheet. This is a
key input to Moody's advanced Loss Given Failure analysis, which
could result in a lower degree of protection for the bank's
creditors.
At the same time, Moody's has placed TCF's BCA and ratings on
review for upgrade because it believes that its creditors may
benefit from the merger. TCF's BCA reflects the bank's solid
balance sheet, supported by its large, low-cost funding base,
improved liquidity, stable asset quality and adequate
capitalization. The BCA also reflects TCF's healthy core
profitability despite recent pressure from low interest rates and
expenses related to the merger between TCF and Chemical in August
2019. TCF's above peer-average growth of certain national lending
businesses in recent years and its commercial real estate
concentration are credit challenges despite generally good asset
quality performance. Huntington expects to recognize a gross credit
mark of 2.4% of TCF's loans.
Moody's review is unlikely to conclude until after the deal has
received regulatory approvals and the transaction closes. The
banks' management teams anticipate this will occur in the second
quarter of 2021.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
For Huntington, upward rating pressure on the BCA and ratings could
arise from an increase in capitalization or significantly higher
levels of profitability relative to similarly rated peers. A
sustained improvement in market funding and liquid assets would
also be positive for the BCA and ratings.
Huntington's BCA and ratings could be downgraded if missteps in the
integration of TCF occur or if there was a material increase in
problems loans or credit losses inconsistent with Moody's current
expectations at either entity. Evidence of weakening in
underwriting standards, lower capitalization or an increase in
confidence-sensitive market funding reliance would also be
negative.
For TCF, Moody's review for upgrade will focus on the benefits to
creditors of the proposed combination, specifically the benefits of
the increased scale and more diverse franchise. Given the direction
of the ratings review, rating downgrades are unlikely over the next
12-18 months.
The principal methodology used in these ratings was Banks
Methodology published in November 2019.
Affirmations:
Issuer: Huntington Bancshares Incorporated
Pref. Stock Non-cumulative, Affirmed Baa3(hyb)
Senior Unsecured Regular Bond/Debenture, Affirmed Baa1, Stable
Subordinate Regular Bond/Debenture, Affirmed Baa1
Pref. Shelf Non-cumulative, Affirmed (P)Baa3
Senior Unsecured Shelf, Affirmed (P)Baa1
Subordinate Shelf, Affirmed (P)Baa1
Issuer: FirstMerit Corporation
Subordinate Regular Bond/Debenture, Affirmed Baa1
Issuer: FirstMerit Bank, N.A.
Subordinate Regular Bond/Debenture, Affirmed Baa1
Issuer: Huntington Bancshares Capital Trust I
Backed Pref. Stock, Affirmed Baa2(hyb)
Issuer: Huntington Capital II
Backed Pref. Stock, Affirmed Baa2(hyb)
Issuer: Huntington National Bank
Adjusted Baseline Credit Assessment, Affirmed a3
Baseline Credit Assessment, Affirmed a3
LT Counterparty Risk Assessment, Affirmed A2(cr)
ST Counterparty Risk Assessment, Affirmed P-1(cr)
LT Counterparty Risk Rating (Local Currency), Affirmed A3
ST Counterparty Risk Rating (Local Currency), Affirmed P-2
LT Counterparty Risk Rating (Foreign Currency), Affirmed A3
ST Counterparty Risk Rating (Foreign Currency), Affirmed P-2
LT Issuer Rating, Affirmed A3, Negative from Stable
Senior Unsecured Regular Bond/Debenture, Affirmed A3, Negative
from Stable
LT Bank Deposits, Affirmed Aa3, Negative from Stable
ST Bank Deposits, Affirmed P-1
Issuer: TCF National Bank
ST Counterparty Risk Rating (Local Currency), Affirmed P-2
ST Counterparty Risk Rating (Foreign Currency), Affirmed P-2
ST Bank Deposits, Affirmed P-1
On Review for Upgrade:
Issuer: TCF Financial Corporation
Pref. Stock Non-cumulative, Placed on Review for Upgrade,
currently Ba1(hyb)
Issuer: TCF National Bank
Adjusted Baseline Credit Assessment, Placed on Review for
Upgrade, currently baa1
Baseline Credit Assessment, Placed on Review for Upgrade,
currently baa1
LT Counterparty Risk Assessment, Placed on Review for Upgrade,
currently A3(cr)
ST Counterparty Risk Assessment, Placed on Review for Upgrade,
currently P-2(cr)
LT Counterparty Risk Rating (Local Currency), Placed on Review
for Upgrade, currently Baa1
LT Counterparty Risk Rating (Foreign Currency), Placed on Review
for Upgrade, currently Baa1
LT Issuer Rating, Placed on Review for Upgrade, currently Baa2
Rating Under Review from Stable
Subordinate Regular Bond/Debenture, Placed on Review for Upgrade,
currently Baa2
LT Bank Deposits, Placed on Review for Upgrade, currently A2,
Rating Under Review from Stable
Outlook Actions:
Issuer: Huntington Bancshares Incorporated
Outlook, Remains Stable
Issuer: Huntington National Bank
Outlook, Changed To Negative From Stable
Issuer: TCF Financial Corporation
Outlook, Changed to Rating Under Review from No Outlook
Issuer: TCF National Bank
Outlook, Changed To Rating Under Review From Stable
TCMA TRUCKING: Case Summary & 12 Unsecured Creditors
----------------------------------------------------
Debtor: TCMA Trucking, Inc.
19411 Clay road
Katy, TX 77449
Business Description: TCMA Trucking, Inc. is a privately held
company that operates a specialized freight
trucking business.
Chapter 11 Petition Date: December 22, 2020
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 20-35989
Judge: Hon. Jeffrey P. Norman
Debtor's Counsel: Russell Van Beustring, Esq.
RUSSELL VAN BEUSTRING, P.C.
5110 Waterbeck St.
Fulshear, TX 77441
Tel: (713) 973-6650
Fax: (713) 973-7811
Total Assets: $232,662
Total Liabilities: $1,407,077
The petition was signed by Felix A. Auz, president.
A copy of the petition containing, among other items, a list of the
Debtor's 12 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/I3YTU2Q/TCMA_Trucking_Inc__txsbke-20-35989__0001.0.pdf?mcid=tGE4TAMA
TEA STATION: Seeks to Hire Enenstein Pham as Special Counsel
------------------------------------------------------------
Tea Station Investment, Inc., and its affiliates seek approval from
the U.S. Bankruptcy Court for the Central District of California to
hire Enenstein Pham & Glass as special litigation counsel.
The Debtors require legal assistance to address the claims of Baodi
Zhou, a plaintiff in a pre-bankruptcy lawsuit (Case No. BC674939)
pending in the Superior Court of the State of California for the
County of Los Angeles. All of the Debtors are defendants in the
lawsuit.
Teri Pham, Esq., the primary attorney who will be providing the
services, will charge an hourly fee of $550. The rates of other
attorneys range from $300 to $710 per hour. Paralegals and clerks
charge between $140 and $300 per hour.
The firm requested a retainer in the amount of $25,000.
Ms. Pham disclosed in court filings that her firm does not hold any
interest adverse to the Debtors' estates.
Enenstein Pham can be reached through:
Teri T. Pham, Esq.
Enenstein Pham & Glass
650 Town Center Drive, Suite 840
Costa Mesa, CA 92626
Tel: (310) 899-2070
Fax: (310) 496-1930
About Tea Station Investment
Tea Station Investment Inc. filed a Chapter 7 voluntary petition
(Bankr. C.D. Cal. Case No. 20-14175) on May 4, 2020. On July 1,
2020, the court issued an order converting the case to one under
Chapter 11.
On Sept. 1, 2020, Tea Station Investment's affiliates including Tea
Station Inc., Tea Creations Inc., Tea City Inc., Tea Hut Inc., Tea
Station Operation Inc., Tea Island Inc., and Tea Professor Inc.
sought protection under Chapter 11 of the Bankruptcy Code. The
cases are jointly administered under Case No. 20-14175.
Tea Station Investment's affiliates reported estimated assets of
between $100,001 and $500,000 and liabilities of between $500,001
and $1 million.
Judge Neil W. Bason oversees the cases.
Leslie Cohen Law, PC serves as the Debtors' bankruptcy counsel.
TEVA PHARMACEUTICAL: Moody's Completes Review, Retains Ba2 CFR
--------------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Teva Pharmaceutical Industries Ltd and other ratings
that are associated with the same analytical unit. The review was
conducted through a portfolio review in which Moody's reassessed
the appropriateness of the ratings in the context of the relevant
principal methodology, recent developments, and a comparison of the
financial and operating profile to similarly rated peers. The
review did not involve a rating committee. Since January 1, 2019,
Moody's practice has been to issue a press release following each
periodic review to announce its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
KEY RATING CONSIDERATIONS
Teva's Ba2 Corporate Family Rating reflects its significant scale
in both generic and branded drugs, its global diversity, and its
position as the world's largest generic drug company. Teva's
ratings are constrained by high financial leverage. Moody's
believes that leverage will steadily decline, driven by debt
repayment and stable earnings in 2021. Moody's believes that Teva
will use a majority of its cash flow to pay down debt. Key risk
factors include rising exposure to opioid and other litigation,
including alleged generic drug price fixing.
The principal methodology used for this review was Pharmaceutical
Industry published in June 2017.
THEAG NORTH: Allegations of Fraud Sufficient, Court Says
--------------------------------------------------------
Judge Edward L. Morris of the United States Bankruptcy Court for
the North District of Texas, Fort Worth Division, granted in part
the Motions to Dismiss filed by Chris and Jean-Ann Taylor and
Stearns Bank, N.A. in relation to Christopher and Sean Allen's
Second Amended Counterclaim and Third-Party Complaint and the
debtor intervenors THEAG North Dallas LLC, THEAG North Arlington
LLC and THEAG Management LLC's Amended Petition in Intervention,
Third-Party Petition, and Request for Disclosure.
The Taylors owned and operated a FASTSIGNS franchised sign
production business through their wholly-owned companies C.J.
Taylor, Ltd., G.P. Taylor Enterprises, Ltd., CTMM Management, LLC
and CJT Real Estate, LLC a/k/a CJ Taylor Real Estate, LLC. The
business was run out of three locations: the North Arlington
FastSigns Store; the North Dallas FastSigns Store; and the Denton
FastSigns Store.
In 2014, the Taylors and Allens began to engage in negotiations
with respect to the Taylors' sale of the business to the Allens.
The Taylors and Allens then executed a Letter of Intent, dated July
2015, pursuant to which the Taylors evidenced their intent to sell,
and the Allens evidenced their intent to purchase, the business for
$5.75 million, subject to offsets and deductions to be negotiated,
and subject to due diligence, franchisor approval, and the
preparation of mutually acceptable definitive documentation.
The LOI called for the Allens to designate an entity substantially
owned and controlled by them to serve as the so-called "Purchasing
Entity" in relation to the contemplated transaction. The Allens
would later designate the Debtor Intervenors and THEAG Denton LLC
to serve as the Purchasing Entity. Section 4 of the LOI provided
for the parties to promptly agree upon a "Due Diligence Checklist"
and for the Taylors to then promptly "allow Purchasing Entity to
complete an examination of Seller's financial, accounting and
business records, contracts and other legal documents and generally
to complete due diligence as set forth in the Due Diligence
Checklist, which shall take place in the 45 days immediately
following the parties executing this Letter of Intent. Section 3
the LOI required the Allens to arrange for an earnest money deposit
of $287,500 to be made by the Purchasing Entity within seven
business days of execution of the LOI. In compliance with the
requirement, the Allens arranged for the Earnest Money Deposit to
be made by or on behalf of the THEAG Entities. Section 6 of the
LOI provided for disposition of the Earnest Money Deposit. Among
other things, it provided that should the Purchasing Entity
terminate the LOI for any reason after expiration of the Due
Diligence Period, or should the transaction contemplated by the LOI
fail to close by August 31, 2015, then the escrow agent was to pay
the Earnest Money Deposit to the Taylors. The parties later
amended the LOI to extend the outside closing date to September 30,
2015 as a result of a delay encountered in obtaining franchisor
approval for the transaction.
The Taylor Entities and the Allens then entered into a definitive
Asset Purchase Agreement, effective as of September 9, 2015. The
APA had, among others, the following relevant terms:
(1) with respect to the financial terms of the transaction, the
previously agreed-upon purchase price of $5.75 million was to be
satisfied as follows under the terms of the APA: (a) release of the
$287,500 Earnest Money Deposit to the Taylor Entities on the
Closing Date; (b) payment of $5.175 million in immediately
available funds to the Taylor Entities on the Closing Date; and (c)
the delivery of a promissory note made payable to the Taylors in
the original principal amount of $287,500 on the Closing Date. The
Taylor Entities and Allens also agreed to an allocation of the
purchase price within the APA, with over $4.0 million of the
purchase price allocated to the goodwill of the Stores;
(2) as security for payment of the Promissory Note, the APA
conditioned closing on the delivery of a personal guaranty by the
Allen Defendants for the benefit of the Taylors;
(3) the Taylor Entities agreed to the following post-closing
non-compete protections: Seller and Seller's principal,
Christopher J. Taylor, and the wife of Christopher J. Taylor,
Jean-Ann Taylor, agree that for a period of two years from and
after the Closing Date, neither it, nor Seller's Principal, will
own, manage, operate, provide consulting services to, or control
any business engaged in sign production within a 40 mile radius of
(i) Seller's current Business locations or (ii) any other location
in which Purchaser operates a business engaged in sign production.
In addition, Seller and Seller's Principal agree that for the same
two year period they will not directly or indirectly (a) solicit,
induce, encourage or attempt to persuade any customer or any other
person having a commercial relationship with the Business to
terminate, curtail or cancel his/her or its relationship with
Purchaser, or (b) in any way interfere with any such relationship;
(4) the Purchaser could terminate the APA at any time prior to the
Closing Date if any representation of Seller contained in the APA
or in any other document delivered by Seller pursuant to the APA is
or becomes untrue in any material respect and any such
misrepresentation is not cured, waived or eliminated within ten
days. Similarly, the Purchaser could terminate the APA on the
Closing Date in the absence of satisfaction of each of the
conditions of Article VII of the APA, including that all of the
representations of Seller contained in the APA shall have been true
and correct in all respects when initially made and shall be true
and correct in all respects as of the Closing Date; and
(5) in the event of the APA's termination by either party for any
reason, or in the event of the failure of the transaction to close
by September 30, 2015 for any reason, the Earnest Money Deposit
would be subject to disbursement in accordance with the terms of
the LOI.
The parties decided to make certain modifications to the APA. The
modifications were made by an amendment, dated February 24, 2016,
executed by the Taylor Entities, the Allens and the THEAG Entities,
pursuant to which: (a) the Allens assigned all of their rights
under the APA to the THEAG Entities; (b) the purchase price payment
provisions of the APA were modified to reduce the Cash Payment
obligation to $4.525 million and correspondingly increase the
amount of the Promissory Note to $937,500; and (c) as additional
security for payment of the Promissory Note (i) all post-closing
cellular tower lease payments under a particular lease specified
within the amendment would be assigned to the Taylor Entities in
partial satisfaction of the Promissory Note until the time of the
Promissory Note's payment in full, and (ii) all royalty payment
rebates from the franchisor beginning as of January 2016 would be
made payable to the Taylor Entities in partial satisfaction of the
Promissory Note until the time of the Promissory Note's payment in
full.
The sale closed at the end of February 2016. In connection with
the closing, the THEAG Entities executed the Promissory Note made
payable to the Taylors in the original principal amount of
$937,50032 and the Allen Defendants executed the Guaranty. With
respect to the Cash Payment, the THEAG Entities made the payment
out of proceeds of a $4,943,500 loan obtained from Stearns.
Under the terms of the Promissory Note, the THEAG Entities were
required to make a one-time lump sum payment of $1,033,594 on the
Maturity Date of December 31, 2017. In September 2018, after the
THEAG Entities allegedly failed to make the payment, the Taylors
initiated litigation against the Allen Defendants in the 44th
District Court of Dallas County, Texas to pursue recovery under the
Guaranty. On March 12, 2019, the Debtor Intervenors filed a
petition in intervention to assert claims of breach of contract,
fraud, conspiracy to commit fraud, and tortious interference with
contract against the Taylors, known as the Original Intervention
Claims and claims of breach of contract, fraud and conspiracy to
commit fraud against Stearns, known as the Original Intervenor
Third-Party Claims. On March 13, 2019, the Allen Defendants
followed suit with the filing of their Counterclaim and Third-Party
Petition to assert various claims against both the Taylors and
Stearns.
In response to the Defendants' First Amended Pleading and the
Intervenors' Original Petition, the Taylors filed a motion to
dismiss each of the Original Counterclaims and Original
Intervention Claims. In response to the Intervenors' Original
Petition, Stearns also filed a motion to dismiss each of the
Original Intervenor Third-Party Claims. In each case, the motions
sought dismissal of the claims for failure to plead with
particularity and/or for failure to state a claim upon which relief
can be afforded, as applicable. Both the Allen Defendants and the
Debtor Intervenors responded in opposition to the motions.
On July 18, 2019, the Court conducted a hearing on the first round
of dismissal motions. After entertaining arguments of counsel, the
Court orally ruled that the Debtor Intervenors' breach of contract
claim against the Taylors would be dismissed with prejudice, but
that all other Original Intervention Claims, as well as all
Original Counterclaims and all Original Intervenor Third-Party
Claims, would be conditionally dismissed subject to the right of
the Allen Defendants or Debtor Intervenors, as applicable, to
replead such claims by August 16, 2019. By agreement between the
Allen Defendants and Stearns, the Allen Defendants were also given
the opportunity to replead the Original Defendant Third-Party
Claims by the same deadline. The Court then entered orders to
effectuate both the ruling and the Allen Defendants-Stearns
agreement.
On August 16, 2019, the Allen Defendants filed the Defendants' Live
Pleading and the Debtor Intervenors filed the Intervenors' Live
Pleading.
The THEAG Parties made the following allegations:
(a) that the Taylors oversaw and managed the financial records of
the Business. They alleged that after the Earnest Money Deposit
had been made, the Taylors began to slow the purchase process down
by delaying or failing to provide updated financials with respect
to the Business while at the same time pressuring the THEAG
Entities and Allen Defendants to move forward in the closing
process under the threat of a walk away with the Earnest Money
Deposit. They further alleged that the updated financials
ultimately provided by the Taylors in the fourth quarter of 2015
had been manipulated by the Taylors to inaccurately represent a
thriving business, and that when questioned about previously
undisclosed information, the Taylors reassured the accurateness of
the financial information supplied. The THEAG Parties claimed
that, after the closing, they discovered that the profit and loss
statements that had been provided were not accurate, that pursuant
to the purchase price allocation provided by the Taylors for
inclusion in the APA, the goodwill of the Stores had been
overstated, and that the Taylors had altered the books of the
Stores by transferring business from the Dallas Store to the Denton
Store to artificially inflate the Denton Store revenues to ensure
that the Denton Store would qualify for a royalty rebate from the
franchisor that would be payable to the Taylors/Taylor Entities.
The Taylors intentionally concealed, obfuscated and failed to
disclose material facts relating to the accounting and financial
records of the Stores; that the Taylors reassured and falsely
explained away the concerns raised; and that the Taylors failed to
exercise reasonable care and competence in obtaining and
communicating the Business operational information and finances;
(b) that, in convincing the THEAG Parties to close on the sale, the
Taylors falsely promised and misrepresented to the THEAG Parties
that following the closing they would assist the Debtor Intervenors
in both maintaining current client relationships and accounts and
also in generating new business and increasing the revenue to the
Stores;
(c) that the Taylors undermined the Debtor Intervenors' current and
future client relationships and ongoing business by laying the
groundwork to siphon clients from the Debtor Intervenors
immediately after expiration of the APA non-compete period. In
this regard, the Debtor Intervenors allege that Chris Taylor
sabotaged the business post-closing by destabilizing relationships
with long-time clients. He allegedly accomplished this by, among
other things, slowly obtaining confidential, proprietary
information about the status of the business from his prior
employees still working at the Stores, such as Lance Tucker, and
then using the information to compete with the Debtor Intervenors
and to hinder the Debtor Intervenors' operations and client
relationships;
(d) that Stearns represented to the THEAG Parties that the sale was
being finalized under a typical Small Business Association loan
structure with normal borrower protections and guidelines in order
to encourage the THEAG Parties to close on the sale, but that,
instead, Stearns structured the Stearns Loan in an atypical manner.
In this regard, the THEAG Parties allege that Stearns' structuring
of the Stearns Loan in relation to the goodwill, Stearns'
negotiations with the Taylors in relation to the sale and its deal
with the Taylors on the Promissory Note, and Stearns' failure to
fully subordinate the Promissory Note to the Stearns Loan or to
otherwise enforce such subordination took the Stearns Loan out of
SBA guidelines. The THEAG Parties allege that the Taylors provided
false information relating to the financing for purchase of the
Stores and that both Stearns and the Taylors intentionally
concealed, obfuscated and failed to disclose material facts
relating to the nature of the financing;
(e) that Stearns intentionally intruded on their solitude,
seclusion and private affairs by disclosing non-public, highly
sensitive, confidential financial information to the Taylors both
pre-closing and post-closing. The THEAG Parties further allege
that the Taylors intentionally intruded on their solitude,
seclusion and private affairs by soliciting such information and by
disclosing and discussing such information with clients and other
third parties; and
(f) that the Taylors and Stearns gave each other assistance and
encouragement in their negligent misrepresentations to the THEAG
Parties with respect to the financing for purchase of the Stores
and the nature of the Stearns Loan and that their assistance and
encouragement to each other was a substantial factor in
facilitating and causing the negligent misrepresentations to be
made to the THEAG Parties.
Among other things, Judge Morris held:
(1) that while there is clearly a degree of overlap in the
allegations of the THEAG Parties with respect to the complained of
misrepresentations supporting the common law fraud claims, the
Allen Defendants have alleged sufficient actual, concrete and
particularized harm to themselves as a result of the obligations
incurred under the Guaranty to establish constitutional standing
with respect to their common law fraud claim against the Taylors;
(2) that the THEAG Parties have provided sufficient particularity
in alleging the following: (a) that the Taylors supplied inaccurate
profit and loss statements with respect to the Stores; (b) that the
Taylors altered the books of the Denton Store by transferring
business from the Dallas Store to the Denton Store to artificially
inflate its revenues; (c) that the Taylors transferred revenue
between the Stores to reflect higher rebate payment obligations for
the years prior to the closing; and (d) that the Taylors
mispresented the values of the Arlington Store, Dallas Store and
Denton Store in the APA price allocation by overstating the
goodwill associated with each of the Stores;
(3) that the Live Pleadings include the allegation that when the
THEAG Parties questioned the Taylors with respect to
inconsistencies noticed in the financial information supplied, the
Taylors falsely explained away the concerns and reassured the THEAG
Parties that the financial information was accurate. Coupled with
allegations concerning the pressure put on the THEAG Parties to
close in order to avoid the potential loss of the Earnest Money
Deposit, the THEAG Parties have each alleged sufficient facts with
respect to justifiable reliance to present a plausible claim of
common law fraud;
(4) that the Defendants' Live Pleading includes the assertion that
the Allen Defendants entered into the Guaranty based upon the
Taylors' pledge of support and that, had they known that such
support was falsely pledged, they would never have guaranteed the
obligations of the Debtor Intervenors. Similarly, the Intervenors'
Live Pleading includes the assertion that the Debtor Intervenors
were induced to close the sale based upon the Taylors' pledge of
support. These allegations with respect to reliance are sufficient
to present a plausible claim of fraud in the inducement; and
(5) that while the Debtor Intervenors allege in the Intervenors'
Live Pleading that Stearns represented to the Debtor Intervenors
that the Stearns Loan was an SBA loan; that Stearns used the
protections and advantages that an SBA loan affords to a small
business owner to attract the Debtor Intervenors to do business
with Stearns; that the Stearns Loan was structured in an atypical
way eliminating various anticipated protections and advantages
afforded by an SBA loan; that Stearns deliberately failed to inform
the Debtor Intervenors of the true facts of the Stearns Loan
status, intending for the Debtor Intervenors to rely on its
representations and close the sale; and that the Debtor
Intervenors, in fact, relied on the representations and omissions
in financing and closing the sale; nowhere within the Intervenors'
Live Pleading is there any allegation of particularity with respect
to (a) what specific representations were made, by whom, and when
with respect to the SBA loan characteristics that the Stearns Loan
would allegedly have; (b) why or how each of those specific
representations was untrue; (c) in exactly what ways the Stearns
Loan allegedly did not qualify as an SBA loan; (d) what specific
information with respect to the Stearns Loan was improperly
concealed/withheld and not disclosed and the basis for Stearns'
alleged duty to disclose such information; and (e) in what way the
Debtor Intervenors reasonably relied upon each such representation
and omission.
The case is In re: THEAG NORTH ARLINGTON LLC, et al., Chapter 11,
Debtors. CHRIS TAYLOR and JEAN-ANN TAYLOR, Plaintiffs, v.
CHRISTOPHER ALLEN, SEAN ALLEN, DAWN BERRY and APRIL CROSSE,
Defendants/Third-Party Plaintiffs, v. STEARNS BANK, N.A.,
Third-Party Defendant. THEAG NORTH DALLAS LLC, THEAG NORTH
ARLINGTON LLC and THEAG MANAGEMENT LLC, Intervenors, v. CHRIS
TAYLOR and JEAN-ANN TAYLOR, Plaintiffs, and STEARNS BANK, N.A.,
Third-Party Defendant, Case No. 19-41108-ELM, Adversary No.
19-04034, (Bankr. N.D. Tex.). A full-text copy of the Memorandum
Opinion, dated December 11, 2020, is available at
https://tinyurl.com/yanjgwnt from Leagle.com.
About Theag North Arlington LLC
Theag North Arlington, LLC, THEAG Management, LLC and THEAG North
Dallas LLC, a sign, graphics and visual communications company,
filed Chapter 11 petitions (Bankr. N.D. Texas Lead Case No.
19-30957) on March 18, 2019. At the time of the filing, each
Debtor disclosed assets of between $1 million and $10 million and
liabilities of the same range.
Judge Edward L. Morris oversees the cases.
Debtors have tapped Hayward & Associates PLLC as their legal
counsel, Lain Faulkner & Co., P.C. as accountant, and CoreStrength
Financial Advisors as financial advisor.
TIDWELL BROS: Wants Solicitation Exclusivity Extended Thru March 1
------------------------------------------------------------------
Tidwell Bros. Construction Inc. requests the U.S. Bankruptcy Court
for the Middle District of Florida, Jacksonville Division, to
extend the exclusive period during which the Debtor may solicit
acceptances for the reorganization plan through and including March
1, 2021.
Though the Debtor filed a Chapter 11 plan on October 23, 2020, and
the Debtor is anticipating that the Plan will be confirmed, the
Debtor is still working with some of its creditors to fine-tune
some of the details of the Plan.
The Debtor submits that granting of this requested extension will
not prejudice the rights of any creditor or any party in interest
and is made in good faith and not for the purposes of delay.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/3gspqmE at no extra charge.
About Tidwell Bros. Construction
Tidwell Bros. Construction Inc. f/k/a Tidwell Bros. Paving, Inc.,
is a privately-held construction company in Florida serving
industrial, commercial, and residential clients. It specializes in
all phases of earthwork, paving, construction/demolition, and
aggregate production.
Tidwell Bros. Construction Inc. filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code (Bankr. M.D. Fla.
Case No. 20-00837) on March 6, 2020. The petition was signed by
Anthony J. Tidwell, president. At the time of filing, the Debtor
was estimated to have $1 million to $10 million in both assets and
liabilities.
Judge Cynthia C. Jackson oversees the case. Aaron A. Wernick, Esq.
of Wernick Law, PPLC is the Debtor's attorney.
TIMOTHY PLACE: Park Place of Elmhurst Returns to Chapter 11
-----------------------------------------------------------
Chuck Sudo of Senior Housing News reports that Illinois continuing
care retirement community Park Place of Elmshurst filed for Chapter
11 bankruptcy protection last week, after defaulting on a portion
of its $141 million in debt.
Park Place of Elmhurst in Elmhurst, Illinois defaulted on nearly
$15.5 million in bond debt issued by the Illinois Finance Authority
in 2016, a document filed in the Northern District of Illinois
bankruptcy court indicates. This is the second time in the past
five years that the CCRC has filed for bankruptcy protection.
Park Place of Elmhurst is owned and operated by Providence Life
Services, a Tinley Park, Illinois-based nonprofit provider of 11
CCRCs.
"This process fortifies Park Place as a financially stronger
community," Park Place Chairman Rich Van Hattem said in a statement
published by Crain's Chicago Business. "At this time, Park Place's
occupancy is very stable and above national averages. All
refundable entry fees have been paid, as promised, to former
residents or their estates. Park Place continues to honor
employees' compensation and benefit programs. All our vendors are
paid in a timely manner."
The 2016 bonds were supposed to be paid from initial move-in and
turnover entrance fees. However, a slower than expected turnover in
occupancy has occurred, and entrance fee revenues have decreased as
a result.
Additionally, Park Place applied in April for nearly $1.4 million
in Paycheck Protection Program (PPP) funds under the CARES Act. The
application was approved and the funds were received in May 2020,
triggering a default under the 2016 restructuring requiring the
CCRC to transfer any gross revenues to the bond trustee.
Park Place reported $15.7 million in total operating revenue as of
October 30, 2020, $4.7 million in net income before debt service
and a net loss of nearly $1.9 million. It listed total assets of
$135.4 million against $241.1 million in liabilities.
As of Dec. 15, 2020, Park Place of Elmhurst owed $141.1 million in
outstanding principal stemming from the 2016 debt issuance.
The community previously filed for bankruptcy in January 2016,
seeking to restructure over $146 million in bond debt issued for
the campus' construction in 2010. Court documents revealed that
Park Place made timely payments on the "A" and "B" bond debt. With
the "C" tranche, however, it paid a single $23,126 interest payment
in May 2017, and has never been able to generate excess revenue to
further service the principal or interest on the bonds.
The community soon found itself struggling to service the "B"
tranche of bond debt, which was supposed to be fully redeemed by
May 15, 2020.
The filing reveals that a restructuring term sheet is being
negotiated which should allow Park Place to exit bankruptcy in
roughly four months, after approval. Under the terms of that
agreement, the current bond holders will exchange the outstanding
debt with $107.3 million in new bond issuance. Park Place will also
be required to deposit an additional $3 million in a liquidity fund
for payment of monthly interest or principal, and for payment of
operating expenses as needed.
The restructuring plan will honor all residents' contracts, protect
Park Place's vendors and employees' compensation and benefits.
Providence Life Services will continue to own the campus after the
restructuring is complete.
"We are confident in this process because it protects the future of
our residents and community while it provides more beneficial bond
terms for Park Place," Van Hattem said in a statement provided to
Senior Housing News.
Another Chicago-area CCRC, Clare Oaks in Bartlett, Illinois, filed
for Chapter 11 protection in June 2019. Last August 2020, the
community and its bondholders reached a restructuring agreement on
how to exit bankruptcy.
Under the terms of the agreement, Clare Oaks will be managed by
Evergreen Senior Living Properties LLC, an operator of a portfolio
of several CCRCs in Texas. The plan also calls for $5 million in
deferred capital improvements, converting 60 skilled nursing units
to 32 assisted living units, and independent living residents would
be asked to modify their residency agreements related to when
entrance fee refunds are paid. This is intended to prevent future
liquidity crunches.
About Park Place of Elmhurst
Timothy Place, NFP, owns Park Place of Elmhurst, a continuing care
retirement community located in Elmhurst, Illinois. The Campus is
improved with a building which includes (i) 181 independent living
apartments, (ii) 46 assisted living apartments, (iii) 20 memory
care apartments, (iv) 37 nursing beds, and (v) related common areas
and parking.
Timothy Place, NFP, first sought Chapter 11 protection (Bankr. N.D.
Ill. Case No. 16-bk-01336) on Jan. 17, 2016.
Timothy Place, NFP, along with affiliate Christian Healthcare
Foundation NFP, again sought Chapter 11 protection (Bankr. N.D.
Ill. Lead Case No. 20-21554) on Dec. 15, 2020. The Debtors
disclosed total assets of $113,592,694 and total liabilities of
$141,267,675 as of the filing. The Hon. Benjamin A. Goldgar is the
case judge. DOPKELAW LLC, led by Bruce C. Dopke, is serving as
the Debtors' counsel. GLOBIC ADVISORS, INC., is the claims agent.
TOWNSQUARE MEDIA: Moody's Rates New Senior Secured Notes 'B2'
-------------------------------------------------------------
Moody's Investors Service affirmed Townsquare Media, Inc.'s B2
Corporate Family Rating and B2-PD Probability of Default Rating and
assigned a B2 rating to the proposed senior secured note. The
outlook remains negative.
The use of net proceeds will be the repayment of $272 million of
outstanding term loans and $273 million of senior unsecured notes.
The transaction is leverage neutral and extends out Townsquare's
debt maturity to 2026, but is projected to lead to higher interest
expense. The ratings on the existing debt will be withdrawn after
repayment.
Assignments:
Issuer: Townsquare Media, Inc.
Senior Secured Regular Bond/Debenture , Assigned B2 (LGD4)
Outlook Actions:
Issuer: Townsquare Media, Inc.
Outlook, Remains Negative
Affirmations:
Issuer: Townsquare Media, Inc.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
RATINGS RATIONALE
The B2 CFR reflects Townsquare's high leverage (9.4x as of Q3 2020,
excluding Moody's standard lease adjustments) due to the impact of
the pandemic on the economy and advertising spending. Moody's
projects Townsquare will benefit from strong political advertising
in Q4 and that leverage will begin to decline in Q2 2021 as the
company recovers from the pandemic and anniversaries weak quarters
in the 2nd and 3rd quarter of 2020. While the digital portion of
Townsquare's business is projected to continue to grow, the radio
industry is being negatively affected by the shift of advertising
dollars to digital mobile and social media as well as heightened
competition for listeners from a number of digital music
providers.
Secular pressures and the cyclical nature of radio advertising
demand have the potential to exert pressure on EBITDA from its
radio assets over time. Townsquare's live event business will be
impacted by the coronavirus outbreak, but this division accounted
for less than 4% of revenue in 2019 following prior asset sales and
the costs related to live events are largely variable.
Townsquare has leading positions in its markets as well as its
growing digital marketing solutions (Townsquare Interactive) and
digital programmatic advertising platform (Townsquare Ignite) that
expands its service offering. Moody's expects the Townsquare
Interactive service to continue to grow as small businesses look to
improve their website and digital capabilities during the pandemic,
but this service may not be large enough to offset any future
declines in traditional radio.
Townsquare has been focused on growing local advertising revenue in
small to mid-sized markets and increasing revenue diversification
with its digital product offerings. Townsquare operates in smaller
markets where competition is limited as most radio broadcasters
choose to operate primarily in larger markets. The geographically
diversified footprint focused on small markets is projected to
support performance if some markets are less impacted by the
pandemic and not subject to additional health restrictions. In
contrast to traditional radio operators, executive management has
diverse media experience and does not come exclusively from legacy
broadcasters.
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Moody's analysis has considered the effect on the performance of
advertising revenue from the current weak US economic activity and
a gradual recovery for the coming months. Although an economic
recovery is underway, it is tenuous and its continuation will be
closely tied to containment of the virus. As a result, the degree
of uncertainty around our forecasts is unusually high. Moody's
regards the coronavirus outbreak as a social risk under our ESG
framework, given the substantial implications for public health and
safety.
A governance impact that Moody's considers in Townsquare's credit
profile is the expectation of a relatively aggressive financial
strategy going forward. While Moody's projects Townsquare will be
focused on preserving liquidity in the near term, a portion of free
cash flow is expected to be used for debt reduction or equity
friendly transactions over time as the impact of the pandemic
subsides. Townsquare is a publicly traded company listed on the New
York Stock Exchange, but funds managed by private equity firm,
Oaktree Capital, maintain a substantial ownership position and
voting control of the company.
Townsquare's liquidity is adequate as reflected in the SGL-3
rating, supported by $79 million of cash on the balance sheet as of
Q3 2020 and an undrawn $50 million revolver facility due April
2022. The revolver maturity is coterminous with the existing term
loan maturity (April 2022), but the repayment of the term loan
eliminates the springing maturity provision of the revolving
facility (six months inside the term loan maturity). Townsquare is
expected to refinance the existing revolver with a similarly sized
ABL revolver in the near term.
The quarterly dividend of $2.1 million was eliminated earlier this
year and Moody's expects the company will reduce capex ($16 million
LTM Q3 2020) to help preserve liquidity. Townsquare does not expect
to be a full taxpayer in the near term given significant federal
NOL's. As the impact of the pandemic subsides, free cash flow and
excess cash may be directed to debt repayment or equity friendly
transactions.
There are no financial maintenance covenants for the proposed
senior secured note and the existing revolver is subject to a 3.75x
maximum 1st lien leverage ratio (as defined) with no step downs and
is applicable only when the revolver balance exceeds 30% of total
commitments.
The negative outlook reflects the impact on radio advertising
demand and the disruption of small businesses from the pandemic.
While Moody's projects Q4 2020 to be supported by political
advertising and digital revenue growth, radio advertising demand is
expected to remain under pressure in the beginning of 2021. As the
impact of the coronavirus abates and a vaccine becomes widely
distributed, Moody's expects results will improve and leverage will
decline to approximately 6x by the end of 2021 as the company
anniversaries weak quarters from 2020.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if Moody's expects that
Townsquare's leverage will be sustained above 5.75x due to
underperformance, audience and advertising revenue migration to
competing media platforms, or ongoing economic weakness. Sustained
negative free cash flow or a weakened liquidity profile could also
lead to a downgrade.
An upgrade for Townsquare is not expected in the near term due to
the impact of the pandemic and Moody's projection of high leverage
levels in the near term. The outlook could be changed to stable if
Townsquare was expected to reduce leverage below the 5.75x range
with positive organic growth and free cash flow. The ratings could
be upgraded if leverage declined below 4x, as calculated by
Moody's, with a good liquidity profile and a percentage of free
cash flow to debt ratio of approximately 10%. Positive organic
revenue growth and expanding EBITDA margins would also be required
in addition to confidence that the financial sponsors would
maintain financial policies consistent with a higher rating level.
Townsquare Media, Inc. owns and operates 322 radio stations and
more than 330 related websites in 67 small to mid-sized markets. It
also operates two digital services (Townsquare Interactive and
Townsquare Ignite). Headquartered in Purchase, NY and founded in
2010, the company represents an acquisition roll up of small to
mid-sized market stations. Townsquare is publicly traded and the
largest shareholders are prior debt holders including Oaktree
Capital Management, L.P. as the controlling shareholder with
majority voting power. Net revenue for the last twelve months ended
September 30, 2020 totaled $375 million.
The principal methodology used in these ratings was Media Industry
published in June 2017.
TRANSFORMATION TECH: Seeks to Hire Richards Layton as Counsel
-------------------------------------------------------------
Transformation Tech Investors, Inc., seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to hire Richards,
Layton & Finger, P.A. as its bankruptcy counsel.
The firm will provide services in connection with the Debtor's
Chapter 11 case, which include:
(a) advising the Debtor of its rights, powers, and duties
under Chapter 11 of the Bankruptcy Code;
(b) preparing legal papers;
(c) taking all necessary actions to protect and preserve the
Debtor's estate, including the prosecution of claims and causes of
action on the Debtor's behalf, the defense of actions commenced
against the Debtor, the negotiation of disputes and the filing of
objections to claims against the Debtor;
(d) assisting the Debtor in the sale of its assets;
(e) preparing a plan of reorganization, disclosure statement
and related documents necessary to solicit votes on the plan; and
(f) prosecuting any proposed plan and seeking approval of all
transactions contemplated therein and in any amendments thereto.
The hourly rates charged by the firm's attorneys and
paraprofessionals are:
Directors $725 to $1,200 per hour
Counsel $650 to $700 per hour
Associates $400 to $665 per hour
Paraprofessionals $295 per hour
The principal attorneys and paraprofessionals designated to
represent the Debtor and their standard hourly rates are:
Paul N. Heath $875 per hour
Michael J. Merchant $875 per hour
Amanda R. Steele $750 per hour
Christopher M. De Lillo $550 per hour
Garrett S. Eggen $400 per hour
Rebecca V. Speaker $295 per hour
Prior to the petition date, the Debtor paid Richards Layton a
retainer in the total amount of $500,000.
Richards Layton is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Paul N. Heath, Esq.
Richards, Layton & Finger, P.A.
One Rodney Square, 920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7700
Email: heath@rlf.com
About Transformation Tech Investors
Transformation Tech Investors, Inc., is a managed services provider
delivering business security systems, managed network services,
managed voice over IP, and business intelligence solutions to
distributed enterprises.
Transformation Tech Investors, Inc., sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No.
20-12970) on Nov. 11, 2020. At the time of the filing, the Debtor
had estimated assets of between $100,000 and $500,000 and
liabilities of between $100 million and $500 million.
The Debtor tapped Richards, Layton & Finger, P.A. as its legal
counsel, Imperial Capital LLC as financial advisor, and Reliable
Companies as claims and noticing agent and administrative advisor.
TRANSPINE INC: Court Extends Exclusivity Periods Thru Dec. 31
-------------------------------------------------------------
At the behest of Debtor Transpine, Inc., Judge Victoria S. Kaufman
extended the Debtor's exclusive rights to file a Plan from November
19, 2020, to and including December 31, 2020, and to obtain
acceptances to a Plan is extended from January 18, 2021, to and
including March 15, 2021.
In its motion to extend, the Debtor said that the extension will
allow for time for claims to be filed by the Claims Bar Date and
for the Debtor to complete its analysis, objection to, and/or
negotiations with regard to filed and/or scheduled disputed claims,
so as to proceed with reorganization without the interference (and
expense) of a competing chapter 11 plan, and to extend the period
in which Debtor may obtain acceptances and confirm a chapter 11
plan. The Debtor believes that an extension of exclusivity is in
the best interest of the estate and creditors and is not making any
pressure on any creditor or other entity.
The Debtor timely filed its Schedules and related statements on
September 4, 2020. Per the Schedules, Debtor's chief asset is the
Property. The Debtor is a corporation whose primary asset is its
100% ownership of the real property located at 4256 Tarzana Estates
Drive, Tarzana, CA 91356. Debtor's liabilities primarily include
alleged secured claims of the first trust deed holder, as well as
pending litigation claims involving Overland Direct, Inc. which is
challenging the validity of the Debtor's ownership of the
Property.
This Chapter 11 was largely precipitated by a pending foreclosure
sale by the purported first trust deed holder, Wooshies, Inc. It is
the Debtor's intention to reorganize by arranging for the
satisfaction of claims under the provisions of the Bankruptcy
Code.
Although the Debtor removed the Overland litigation to the
Bankruptcy Court, it has since been remanded and automatic stay
issues are pending. The Debtor anticipates meaningful negotiations
with its creditors around the amounts of their claims and payment
terms once the Claims Bar Date of December 18, 2020, has passed.
According to the Declaration of Nisan Tepper, the CEO of the Debtor
and Debtor-in-Possession, the Debtor continues to manage its estate
as debtor-in-possession pursuant to Sections 1107 and 1108 of the
Bankruptcy Code. To date, no Committee, Examiner, or Trustee has
been appointed in the Debtor's case and the Debtor is in compliance
with all requirements of the Office of the U.S. Trustee.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/37GKFNH at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/3qBbOdK at no extra charge.
About Transpine Inc.
Transpine, Inc., based in Tarzana, CA, filed a Chapter 11 petition
(Bankr. C.D. Cal. Case No. 20-11286) on July 22, 2020. In the
petition signed by CEO Nisan Tepper, the Debtor was estimated to
have $1 million to $10 million in both assets and liabilities.
The Honorable Victoria S. Kaufman presides over the case. LESLIE
COHEN LAW PC serves as bankruptcy counsel to the Debtor.
UNITED RENTALS: Moody's Affirms Ba2 CFR & Alters Outlook to Pos.
----------------------------------------------------------------
Moody's Investors Service affirmed United Rentals (North America),
Inc.'s Ba2 corporate family rating, Ba2-PD probability of default
rating, Baa3 senior secured first lien rating, Ba1 senior secured
second lien rating, and Ba3 senior unsecured rating. Moody's also
changed the company's speculative grade liquidity rating to SGL-1
from SGL-2. The outlook has also been changed to positive from
stable.
The positive outlook reflects Moody's view that URNA will continue
to perform well despite the challenging economic environment, as
the company has recently generated solid free cash flow and
profitability despite a year-over-year revenue decline in the
mid-teens. Moody's expects that leverage could improve somewhat
more since levering up for the acquisitions of BakerCorp and
BlueLine in 2018, such that debt-to-EBITDA improves to below 2.5
times in 2021. Moody's also expects URNA to generate over $2
billion of free cash flow in 2020, in large part from a significant
decline in fleet investment since the onset of the recession, and
further anticipates more than $1.5 billion of free cash flow
generation in 2021, all of which will be available for debt
repayment.
"There is considerable uncertainty around the 2021 outlook for
non-residential construction activity, which accounts for almost
half of United Rental's revenue," said Brian Silver, a Moody's
Vice-President and lead analyst for United Rentals.
"However, the bulk of its remaining revenue comes from a very broad
base of industrial customers and if United Rentals is able to
sustain its low leverage and solid cash flow as visibility improves
in 2021, the ratings could be upgraded," continued Silver.
RATINGS RATIONALE
URNA's Ba2 rating reflects the company's considerable scale from
its leading position in the North American equipment rental
industry, as well as its moderate debt-to-EBITDA of 2.6 times for
the twelve months ended September 30, 2020 (all ratios are Moody's
adjusted unless otherwise stated). Further deleveraging is possible
absent a sharp increase in market demand that could require
meaningful investment in equipment. Notably, all of the large
participants in the equipment rental industry operate with
relatively modest levels of financial leverage, recognizing the
sharp turns in the industry.
URNA had been acquisitive prior to the onset of the pandemic, but
the ratings incorporate URNA's track record of quickly integrating
acquisitions and subsequently deleveraging to restore its credit
metrics. While the event risk around another large acquisition
remains, there are not many sizable gen-rent acquisition candidates
in the US. As a result, Moody's believes URNA is more likely to
pursue specialty equipment rental companies to broaden its product
line-up, while also focusing on managing expenses and capital
spending.
The equipment rental industry is susceptible to a high degree of
cyclicality and is a very competitive and fragmented space, with
local companies competing against the few national scale
participants such as URNA. Staying competitive requires access to
considerable capital to grow the equipment fleet. The potential
always exists for rapid changes and significant fluctuations in the
demand for rental equipment. Moody's also continues to expect to
improve its product mix while broadening and diversifying its
equipment offerings. There is also uncertainty around the ability
to continue to dispose of equipment at reasonable prices and
Moody's believes there is potential for increased share buyback
activity or the potential initiation of a dividend over time.
Moody's views the company's environmental risk to be low, but URNA
adheres to a number of regulations around the disposal of hazardous
waste and wastewater from equipment washing. Moody's also views
social risk to be low, but URNA does have union-represented
employees, and must abide by regulations around worker safety and
training. Governance risk is also viewed to be relatively low, as
the company halted shareholder returns through its share repurchase
program, but the company does have a history of engaging in
relatively large, debt-funded acquisitions. The board of directors
is comprised of a majority of independent directors, but has the
potential to change abruptly since they are elected annually.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded with sustained debt-to-EBITDA of
about 2.5 times and EBITDA-to-interest of better than 7 times and
strong margins, preserving financial flexibility to fund what may
be large capital investment in an expanding market after sometime
of lower than replacement level spending, along with better
visibility of medium term rental volumes and secondary market for
used equipment.
The ratings could be downgraded if debt-to-EBITDA is likely to be
sustained above 3 times or free cash flow (cash from operations
less capex less dividends, plus proceeds from equipment sales) is
below $1 billion or, if overly aggressive market expansion is
likely to stress margins, there is a loss of market share during an
expanding market, an inability to promptly delever following
debt-funded acquisitions or weakening liquidity.
Upgrades:
Issuer: United Rentals (North America), Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Affirmations:
Issuer: United Rentals (North America), Inc.
Corporate Family Rating, Affirmed Ba2
Probability of Default Rating, Affirmed Ba2-PD
Senior Secured Bank Credit Facility, Affirmed Baa3 (LGD2)
Senior Secured Regular Bond/Debenture, Affirmed Ba1 (LGD3)
Senior Unsecured Regular Bond/Debenture. Affirmed Ba3 (LGD5)
Outlook Actions:
Issuer: United Rentals (North America), Inc.
Outlook, Changed To Positive From Stable
The principal methodology used in these rating was Equipment and
Transportation Rental Industry published in April 2017.
United Rentals (North America), Inc., headquartered in Stamford,
CT, is the largest US equipment rental company estimated to have a
market share of roughly 13% in 2019 and a rental fleet of
approximately 635,000 units. Investment in rental equipment
approximates $14.1 billion across the company's 1,170 rental
locations across North America (and 11 branches in Europe). The
company has two reportable segments: General Rentals and Trench,
Power and Pumps. While the primary source of revenue is from
renting equipment, the company also sells new and used equipment
and related parts and services. United Rentals reported $8.7
billion of revenue for twelve month period ending September 30,
2020.
USS ULTIMATE: Moody's Raises CFR to B2 & 1st Lien Loan Rating to B1
-------------------------------------------------------------------
Moody's Investors Service upgraded USS Ultimate Holdings, Inc.'s
Corporate Family Rating to B2 from B3 and its Probability of
Default Rating to B2-PD from B3-PD. Concurrently, Moody's upgraded
the ratings on the company's senior secured first lien term loan to
B1 from B2 and its senior secured second lien term loan to Caa1
from Caa2. The outlook remains stable.
The upgrade of the CFR to B2 reflects strong organic growth in
revenue and profitability as well as timely cost actions that are
meaningfully improving credit metrics and liquidity. The company
delivered better than expected operating results in 2020 despite
early challenges related to the pandemic. Moody's expects USS will
sustain the positive operating momentum over the next 12-18 months,
including projected revenue growth in the high-single digits and
profitability gains at slightly higher growth rates. Moody's
projects debt-to-EBITDA to trend towards 4.0 times and the company
will generate annual cash flow in excess of $100 million in 2021.
Upgrades:
Issuer: USS Ultimate Holdings, Inc.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Senior Secured 1st Lien Term Loan, Upgraded to B1 (LGD3) from
B2 (LGD3)
Senior Secured 2nd Lien Term Loan, Upgraded to Caa1 (LGD5) from
Caa2 (LGD5)
Outlook Actions:
Issuer: USS Ultimate Holdings, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The B2 CFR reflects USS' leading market position within the
fragmented portable sanitation and services market with a diverse
and national customer base, historically high customer retention
rates, continued industry tailwinds driven by strong demand for
increased service frequency and favorable pricing as safety and
hygiene remain a primary focus, and the expectation that USS will
maintain very good liquidity. Moody's expects USS's debt-to-EBITDA
to trend towards 4.0x over the next 12-18 month from an estimated
4.8x as of September 30, 2020 and for the company to generate free
cash flow in the high single digits as a percent of outstanding
debt.
The company's rating is constrained by its moderate operating scale
with revenue concentration in the highly cyclical residential and
commercial construction end markets, narrow market focus, and
aggressive financial growth strategies under financial sponsor
ownership.
The stable outlook reflects Moody's anticipation of further credit
metric and liquidity improvements over the next 12-18 months.
Moody's expects the company will continue to benefit from strong
market demand in the route based sanitation sector, recognize
benefits from recent cost actions and acquisitions, and drive
margin improvement. The stable outlook also assumes the company
will maintain a good liquidity profile.
Moody's expects USS to have very good liquidity over the next 12-15
months. Sources of liquidity consist of expected cash balances in
excess of $100 million at the end of fiscal 2020, projected annual
free cash flow of approximately $120 million in 2021, and full
availability under the company's $125 million ABL revolving credit
facility. Current cash sources provide good coverage of
approximately $9.1 million of annual mandatory debt amortization.
There are no financial maintenance covenants under the first and
second lien term loans but the ABL revolver is subject to a
springing 1.0 times minimum fixed charge coverage covenant if
excess availability falls below the greater of 10% of the aggregate
commitments or $5 million. Moody's does not expect the covenant to
be tested over the next year and believes there is ample cushion
within the covenant based on projected earnings levels for the next
12-15 months if it were to be measured.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward rating pressure is limited by the company's aggressive
financial policy, moderate size and lack of business diversity.
However, the ratings could be upgraded if the company expands its
operating scope and commits to a more balanced financial policy
while maintaining good liquidity. Quantitatively, the ratings could
be upgraded if debt reductions combined with sustained earnings
growth leads to a material improvement in credit metrics such that
debt-to-EBITDA is sustained below 4.0x and free cash flow-to-debt
above 10%.
Conversely, Moody's could downgrade USS' ratings if revenue growth
slows or profitability declines, leading to low or no free cash
flow, or financial policies become more aggressive. Quantitatively,
the ratings could be pressured if debt-to-EBITDA (Moody's adjusted)
trends towards 6.0x, or EBITA-to-interest expense falls below 1.5x
on sustained basis.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Headquartered in Westborough, MA and controlled by affiliates of
Platinum Equity, USS is a provider of portable sanitation units,
temporary fencing, storage containers and temporary electric
equipment serving the construction, commercial and industrial,
special event, government agency and other end markets. Moody's
projects pro forma revenues of around $950 million in 2020.
VAIL RESORTS: Moody's Affirms Ba3 CFR Amid New $500MM Notes Issue
-----------------------------------------------------------------
Moody's Investors Service affirmed ratings for Vail Resorts, Inc.
including its Ba3 Corporate Family Rating and Ba3-PD Probability of
Default Rating following the company's launch of the proposed $500
million convertible notes offering. Moody's took no action on the
Speculative Grade Liquidity rating of SGL-1. Concurrently Moody's
upgraded the rating for the company's existing $600 million senior
unsecured notes due 2025 to B1 from B2. The outlook remains
stable.
Proceeds from the $500 million convertible notes will be used to
increase cash on hand and for general corporate purposes.
Moody's expects Vail's gross debt-to-EBITDA leverage will remain at
above 6.0x in FYE July 2021 as the 2020-2021 ski season will be
challenging due to social distancing measures and capacity
constraints as the result of the ongoing coronavirus pandemic.
There is also the possibility of shutdowns in certain locations if
the coronavirus situation continues to worsen this winter. Strong
season pass sales for FY2021 in part reflect reservation policies
established to control facility utilization, but also indicate
healthy underlying demand for winter sports activities. A higher
mix of visitation by season pass holders will limit availability
for higher-priced daily ticket sales that will reduce lift revenue,
while other mountain revenues such as from restaurants, rentals and
lessons will be also be down meaningfully in FY 2021.
Moody's affirmed the ratings because looking past FY 2021, Moody's
expects debt-to-EBITDA leverage will decline to below 5.0x with the
assumption that earnings will recover in FY 2022 when capacity
restrictions are eased. With the proposed $500 million convertible
notes offering on top of the $600 million term loan issued in
April, Vail's very good liquidity with over $1.7 billion of total
pro forma cash and unused revolver capacity will be beneficial to
manage through the uncertain operating environment in FY2021, which
is also an important factor in the affirmation of ratings.
The upgrade of the rating for Vail's existing $600 million senior
unsecured notes due 2025 to B1 from B2 is due to the additional
loss absorption cushion provided by the issuance of the
subordinated debt, which reduces the loss given default estimate
for the 2025 notes. The additional liquidity provided by the $500
million convertible notes will also be available for reinvestment
in earnings-enhancing projects and acquisitions once the economic
downturn and coronavirus eases and this would increase the asset
base and recovery potential for more senior creditors.
Moody's took the following actions:
Ratings Affirmed:
Issuer: Vail Resorts, Inc.
Corporate Family Rating, Affirmed at Ba3
Probability of Default Rating, Affirmed at Ba3-PD
Ratings Upgraded:
Issuer: Vail Resorts, Inc.
Senior Unsecured Regular Bond/Debenture (Local Currency), upgraded
to B1 (LGD5) from B2 (LGD5)
Outlook Actions:
Issuer: Vail Resorts, Inc.
Outlook, Remain Stable
RATINGS RATIONALE
Vail's Ba3 CFR reflects its elevated financial leverage with
Moody's adjusted debt-to-EBITDA remaining at above 6.0x throughout
FY2021 pro forma for the proposed convertible not offering. Moody's
expects the upcoming 2020-2021 ski season to remain challenging
given the ongoing coronavirus pandemic and expect earnings to
decline meaningfully vs FY2020. Moody's expects skier visits,
effective ticket prices and ancillary revenue to be below normal
levels given social distancing measures and capacity constraints.
Looking past FY21 and over the next 18 months, Moody's projects
debt-to-EBITDA leverage to decline to below 5.0x with earnings
recovering in FY22. Moody's estimates that Vail's EBITDA will
decline by approximately 10% in FY 2021 vs FY2020 and rebound by
roughly 40% in FY 2022. The rating is constrained by Vail's
operating results which are highly seasonal and exposed to varying
weather conditions and discretionary consumer spending. Governance
factors primarily relate to the company's aggressive acquisition
strategy with acquisitions funded mainly with incremental debt.
Environmental considerations in addition to exposure to adverse
weather include the need to access large quantities of water, which
may be challenging following periods of severe drought, and the
vast amounts of forest land the company is responsible to properly
operate and protect.
However, the rating is supported by Vail's leading position in the
North American ski resorts industry with a very strong portfolio of
ski resorts, including some premier ski destinations that attract
high income consumers and can command higher prices relative to
peers. Vail benefits from its good geographic diversification and
higher local skier customer mix. Vail's high and growing
penetration of its Epic Pass provides a stable revenue stream that
helps mitigate weather exposure. The North American ski industry
has high barriers to entry and has exhibited resiliency even during
weak economic periods, including the 2007-2009 recession.
Vail's SGL-1 speculative-grade liquidity rating reflects the
company's very good liquidity bolstered by the material $1.1
billion of cash as of November 30, 2020 (pro forma for the
offering), and almost $600 million of combined unused capacity on
its subsidiaries' revolver credit facilities. The company's
amendment to its credit agreement in April eliminated financial
maintenance covenants through January 31, 2022 and requires a $150
million minimum liquidity through the same period. In conjunction
with the proposed convertible notes offering, a planned amendment
to the credit agreement covenants would increase the minimum
liquidity test to $300 million. Moody's expects the company to have
strong cushion within the covenant. These liquidity characteristics
provide financial flexibility to fund operations and required debt
service over the next 12-to-18 months. Moody's projects free cash
flow will continue to be highly seasonal but break even overall for
the next 12 months.
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Moody's analysis has considered the effect on the performance of
Vail from the current weak US economic activity and a gradual
recovery for the coming months. Although an economic recovery is
underway, it is tenuous and its continuation will be closely tied
to containment of the virus. As a result, the degree of uncertainty
around Moody's forecasts is unusually high. We regard the
coronavirus outbreak as a social risk under Moody's ESG framework,
given the substantial implications for public health and safety.
More specifically, the weaknesses in Vail's credit profile,
including its exposure to mandated stay at home orders, increased
social distancing measures and discretionary consumer spending have
left it vulnerable to shifts in market sentiment in these
unprecedented operating conditions and the company remains
vulnerable to the ongoing coronavirus pandemic and social
distancing measures.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that debt-to-EBITDA
leverage will decline to below 5.0x by the end of FY22 (July 2022)
with anticipated earnings recovery. The stable outlook also
reflects the company's very good liquidity, which will allow the
company to fund its operations and required debt amortization over
the next 12 to 18 months.
The ratings could be upgraded if operating performance improves
with Moody's adjusted debt-to-EBITDA sustained below 4.0x and the
company maintains very good liquidity.
The ratings could be downgraded should operating performance be
weaker than expected or fail to rebound as anticipated. Moody's
adjusted debt-to-EBITDA sustained above 5.0x or a weakening of
liquidity could also prompt a downgrade.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Vail Resorts, Inc. is a leading operator of mountain resorts and
regional ski areas, operating 37 mountain resorts, with 33 in the
US, 1 in Canada, and 3 in Australia. The company is publicly traded
(NYSE: MTN) and reported revenue of approximately $1.8 billion for
the twelve months period ending October 31, 2020.
VALVOLINE INC: Moody's Gives Ba3 Rating to New $535MM Unsec. Notes
------------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Valvoline Inc.'s
new $535 million senior unsecured notes expected to mature in 2031.
The rating is one notch below the company's CFR rating of Ba2
reflecting the priority of the senior secured tranche of term loan
debt in the capital structure. Proceeds from the debt issuance,
together with cash from the company's substantial cash availability
will be used to repay the existing senior unsecured notes of
roughly $800 million due in 2025. The outlook on the ratings
remains stable.
Assignments:
Issuer: Valvoline Inc.
Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD5)
RATINGS RATIONALE
Valvoline's credit profile reflects its leading market positions in
retail (conventional and synthetic) passenger car lubricants, in
the quick lube DIFM (Do It For Me) market, where the company is
focusing its growth initiatives, and the distributor and direct
installer service markets in the US. The ratings also reflect
strong and relatively stable margins in this mostly recession
resistant space, which is largely tied to miles driven and
requirements for periodic oil changes in the auto and truck
markets.
The ratings also reflect the strong Quick Lube platform that
positions the company as the second leading player in the US in
this fragmented market and facilitates growth through acquisitions,
helping offset secular and competitive pressures in the other two
segments over time. The Quick Lubes segment is expected to account
for more than half of EBITDA in 2021 as the company grows its store
count and possibly same store sales as well. The company is
targeting 140-160 annual store growth consisting of new stores to
be built, growth in franchise stores and stores acquired through
M&A transactions; M&A and capex are expected to be higher in 2021
and over the medium term. Already in 1Q21 the company has acquired
54 stores (including 27 former franchise stores) in six
transactions for $162 million. In addition, the company recently
closed on another acquisition for 27 stores. Of the 27 locations,
15 will be company-owned and 12 will be franchise-owned and
operated.
The Core NA and International segments benefit from the growing
share of synthetic oils in new vehicles, but competition in these
products is against larger more entrenched competitors. Moreover,
the Core NA segment at times faces highly competitive promotional
activities from private label brands, as was the case through much
of 2019, putting pressure on volume and price. Secular risks
include the longer term growth trend in electric vehicles which use
little or no motor oils, although this trend is longer tail in
nature.
The company achieved EBITDA of $510 million in 2020, up 7% yoy
reflecting moderating promotional pressure from private label
competition, Quick Lubes store growth, cost reduction efforts and
lower base oil costs due to lower oil prices earlier in the year.
As of September 30, 2020, Valvoline's credit metrics appear
stressed for the rating with Moody's adjusted gross leverage
(Debt/EBITDA) of 4.6x and Retained Cash Flow/Debt (RCF/Debt) of
16.8%. However, 'net' debt/EBITDA is in the mid 2x range, which
Moody's emphasizes for now recognizing the temporary spike by
Valvoline (and many other companies) in debt and cash to shore up
liquidity during COVID. The ratings anticipate that the high cash
balances and free cash flow post-pandemic will eventually be used
to restore gross debt leverage to the low-to-mid 3.0x range as the
crisis pressure subsides. The company recently guided to 2021
EBITDA of $560-$580, helped by store count growth and installer
channel recovery in the Core NA segment, also supporting a
favorable outlook for leverage metrics.
Moody's expects Valvoline to maintain strong liquidity during and
beyond the COVID crisis including substantial balance sheet cash of
roughly $760 million at Sept 30, 2020. There are no outstanding
borrowings under the $475 million secured revolver and the revolver
is at its full availability as the company was able to repay the
borrowings using net proceeds from the $400 million bond offering
in May and cash and cash equivalents on hand. Also, Moody's expects
modest free cash flow from operations, despite the continuous
pressure on EBITDA from the COVID crisis. Maintenance covenants on
the revolver include a Net Leverage test (maximum 4.5 times) and
coverage test (minimum 3.0 times) with ample cushion expected on a
one year forward basis. The company also has access to a $175
million ($88 million outstanding) accounts receivable
securitization facility with $79 million of remaining borrowing
capacity based on the availability of eligible receivables as of
September 30, 2020. There are no near-term facilities with
outstanding balances as of September 30, 2020.
The most significant ESG issue stems from the longer term trend in
electric vehicles, which use far less engine lubes than
conventional internal combustion engine vehicles and represent a
long term headwind to demand for Valvoline's products. However,
significant penetration by EVs is likely still many years away, and
the total global count of existing vehicles, which will continue to
grow and require periodic oil changes, will remain substantially
larger than new vehicle sales for decades to come. Social issues,
while high profile given the connection with the transportation
space and its carbon footprint, are still viewed as only modest due
to the very long tail that lube products are expected to sustain,
albeit against secular demand pressure. Moody's regards the
coronavirus outbreak as a social risk under the ESG framework given
the substantial implications for public health and safety. The
'essential' designation of Valvoline's services by local
governments during the pandemic is a positive factor, as the
company has been able to maintain its operations and continue to
serve its customers during this period. As a public company,
governance issues for Valvoline are also viewed as modest and are
supported by what has thus far been adherence to conservative
financial policies
The stable outlook anticipates leverage remaining at or below 3.5x
and RCF/Debt to remain near or above 20% for the foreseeable
future, excluding the impact from additional acquisitions. The
ratings also anticipate small to moderate bolt-on acquisitions that
do not spike leverage substantially above 3.5x on a sustained
basis, or with a delayed recovery in leverage following larger
acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Prospects for an upgrade are currently limited given the pressure
on earnings from the COVID crisis, as well as the importance of M&A
in Quick Lubes segment growth. However, successful execution in
profitable store growth and overall margin stability and expansion
could eventually support a higher rating if adjusted leverage were
to sustainably fall below 2.5 times. Moody's could consider a
downgrade if adjusted gross leverage is not restored closer to 3.5
times or if retained cash flow to debt falls below 10%, on a post
COVID sustained basis; or due to a shift in financial policies,
poor performance, aggressive share repurchases, or if acquisitions
cause leverage to spike meaningfully above 3.5x with delayed
recovery.
Valvoline Inc., headquartered in Lexington, Kentucky, is a marketer
of premium-branded automotive and commercial lubricants. The
company sells its products through over 50,000 retail outlets and
about 1,432 franchised and company-owned stores. Its three business
segments are Core North America (41% of sales), which includes
"Do-It-Yourself", "Do-It-For-Me", and commercial and industrial;
Quick Lubes (37% of sales); and International (22% of sales), which
includes passenger and heavy duty branded products sold to about
140 countries outside the US and Canada. The company has revenues
of over $2.4 billion for FY2020.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
VANGUARD NATURAL RESOURCES: NPI Preserved by Confirmation Plan
--------------------------------------------------------------
Judge Marvin Isgur of the United States Bankruptcy Court for the
Southern District of Texas, Houston Division, denies Vanguard
Operating, LLC's Motion for Summary Judgment.
In the 1950s, Malco Refineries, Inc., El Paso Natural Gas Company,
and Continental Oil Company, known as the First Parties, were
granted the right to develop land in the Pinedale Basin by the
United States Bureau of Land Management under the Pinedale Unit
Agreement. In connection with their efforts to develop the Pinedale
Unit, the First Parties entered into an Assignment Agreement with
Novi Oil Company. Under the Assignment Agreement, Novi was
entitled to 5% of the net profits realized from operation for oil
and gas by the First Parties under the leases. Additionally, the
parties executed the Pinedale Unit Area Net Profits Contract,
detailing how the NPI was to be calculated. Among other things,
the NPC provided:
(1) the NPI entitled Novi to 5% of the net profits resulting
from operations for oil and gas by First Parties, or any of them,
under those certain leases; and
(2) that "net profits" meant the gross revenue (not required
for payment of overriding royalties) from unit operations allocable
to said leases after deduction of all expenses of unit operation.
The NPC was supplemented by a Supplemental Accounting Agreement
between the parties, which detailed how the First Parties were to
account for and pay Novi amounts due under the NPI.
In the decades following the creation of the NPI, Novi conveyed its
NPI to various successors. For decades, no payments were made by
or to any party pursuant to the NPI because production was
"impracticable." In 1977, the Pinedale Unit was contracted to
roughly one-quarter of its original acreage. The Pinedale Unit
terminated in 1981 without ever earning any profits.
Two units were created out of the Pinedale Unit in the years
following its termination. One unit was known as the Mesa Unit.
The agreement creating the Mesa Unit provided that the Mesa Unit
was subject to the Pinedale Unit Agreement. The agreement also
provided that the Pinedale Unit Agreement would merge into the Mesa
Unit Agreement in the event oil and gas were produced in paying
quantities.
In 2005, leases within the Mesa Unit, which were burdened to the
NPI, became profitable. At that time, the NPI Owners sent a letter
to the holders of working interests in the leases burdened by the
NPI demanding an accounting and payment of the NPI. The NPI
Owners' demand was denied by those Working Interest Holders. The
NPI Owners then filed suit against the Holders to enforce the NPI.
Central to the ensuing lawsuit was whether the NPI survived the
termination of the Pinedale Unit. The Working Interest Holders
asserted that the NPI terminated along with the Pinedale Unit.
Without the Pinedale Unit, the Holders argued that the NPI no
longer burdened the leases in which they held interests. The
Wyoming District Court disagreed. It found that the NPI was a
"covenant running with the leases," which was "analogous to a
royalty interest," the district court concluded that the NPI "was
not dependent on the continuation and/or modification of the
Pinedale Unit." The District Court held that because it was a
covenant running with the land, the NPI continued to burden the
Interest Holders' leases, obligating the Holders to pay the NPI.
The District Court also found that the NPI Owners held 4.98%
ownership interest in the NPI and that interest entitled the NPI
Owners to 4.98% of the net profits of operations under the burdened
leases.
All parties appealed from the District Court's ruling. The Wyoming
Supreme Court praised the District Court for arriving at "what was
essentially a correct resolution of the case." However, the
Supreme Court remanded the case because the District Court
incorrectly determined how net profits were to be calculated under
the NPC.
On remand, the Wyoming District Court issued an Amended Judgment
conforming its original judgment to the Opinion of the Wyoming
Supreme Court. In its Amended Judgment, the District Court
reiterated its conclusion that the NPI continued to burden the
Holders' leases after the termination of the Pinedale Unit. The
Amended Judgment did not alter the District Court's original
conclusion that the NPI is a covenant running with the land.
Additionally, the District Court incorporated by reference its
finding that the NPI was analogous to a royalty interest.
Nearly seven years later, Vanguard Natural Resources, LLC, and
various subsidiaries, filed voluntary petitions for relief under
Chapter 11 the Bankruptcy Code. Among those subsidiaries was
Vanguard Operating LLC, the plaintiff in this case. Vanguard's
Joint Plan of Reorganization was confirmed on July 18, 2017.
The Court's order confirming Vanguard's Plan of Reorganization
included a Vesting Clause. The Vesting Clause provides that
"Pursuant to Section 1141(b) and (c) of the Bankruptcy Code, except
as otherwise provided in the Plan, on the Effective Date, all
property in each Estate, all Causes of Action, and any property
acquired by any of the Debtors pursuant to the Plan shall vest in
each applicable Reorganized Debtor, free and clear of all Liens,
Claims, charges or other encumbrances." Additionally, Vanguard's
Plan of Reorganization included a clause, which purported to
preserve "Royalty and Working Interests" in leases held by
Vanguard. Specifically, the RWI Clause provided that all Royalty
and Working Interests shall be preserved and remain in full force
with the terms of the granting instruments or other governing
documents and no Royalty and Working Interests shall be compromised
or discharged by the Plan. The Plan defines "Royalty and Working
Interests" as "working interests granting the right to exploit oil
and gas, and certain other royalty or mineral interests, including
but not limited to, landowner's royalty interests, overriding
royalty interests, net profit interests, non-participating royalty
interests, and production payments."
On June 29, 2018, Vanguard Operating, LLC initiated the adversary
proceeding attempting to discharge the NPI burdening its working
interest. Vanguard's Complaint set forth the following claims
against the NPI Owners:
i. Count I. A declaration that the Pinedale Assets, along with all
proceeds and profits therefrom are property of the estate pursuant
to 11 U.S.C. Section 541.
ii. Count II. A declaration that the NPI Obligation pursuant to the
Net Profits Contract is a general unsecured claim.
iii. Count III. A declaration that the Pinedale Assets, along with
all proceeds and profits therefrom, vested in Vanguard free and
clear of the Net Profits Interest pursuant to 11 U.S.C. Section
1141.
iv. Count IV. A turnover action for all proceeds and profits
derived from the Pinedale Assets pursuant to section 11 U.S.C.
Section 542(a).
On August 27, 2018, the NPI Owners moved to dismiss the adversary
proceeding. With the exception of Vanguard's claim that the NPI
was discharged pursuant to Section 1141, the Court granted the NPI
Owners' motion to dismiss. In making this determination, the Court
found it only had jurisdiction to adjudicate the discharge issue
pursuant to Section 1141(c). The Court declined Vanguard's
argument that the Court had authority to make an independent
declaration regarding the rights and responsibilities of the
parties under the leases. However, the Court noted that it may be
necessary to determine whether the NPI ran with the land, meriting
an independent assessment of the leases.
The NPI Owners filed two motions for summary judgment, both seeking
a determination that the NPI was not subject to discharge pursuant
to Vanguard's confirmed plan. The NPI Owners advanced, among
others, the following arguments:
i. The Wyoming District Court and the Wyoming Supreme Court
determined that: (1) the NPI burdens the leases and did not
terminate with the Pinedale Unit; and (2) the NPI is a covenant
that runs with the land subject to the leases.
ii. Vanguard, as a successor-in-interest to Lance Oil & Gas
Company, is bound by the Wyoming Courts' determinations.
iii. The documents creating the NPI demonstrate that the First
Parties and Novi intended to create a real property interest rather
than a contractual interest.
Vanguard filed its own motion for summary judgment, largely
reiterating the arguments made in opposition to the NPI Owners'
motions. Vanguard emphasized that any payment due under the NPI
represented a prepetition "claim," which was discharged by the
Court's Confirmation Order.
Judge Isgur contended that the "parties' dispute centers on a
determination of whether the NPI was discharged by this Court's
Confirmation Order. Resolving the dispute requires the Court to
determine whether the Vesting Clause or the RWI Clause dictates the
dischargeability of the NPI. Determining which clause affects the
NPI requires consideration of the type of interest represented by
the NPI. That is, whether the NPI is a royalty or working interest
within the meaning of Vanguard's Plan, or whether it is an
'encumbrance,' which was discharged by the Confirmation Order.
Given the extent to which the Wyoming Litigation addressed the
nature of the NPI, as well as the rights and obligations
thereunder, the Court must decide if it is bound by the outcome of
the Wyoming Litigation. Specifically, whether the Wyoming District
Court's finding-that the NPI is a covenant running with the
land—binds this Court. The binding effect, if any, of the
District Court's finding necessarily affects the Court's
determination of whether the Vesting Clause or, instead, the RWI
Clause controls the dischargeability of the NPI."
Judge Isgur held that "the NPI was preserved by the Plan. The
inclusion of the RWI Clause in Vanguard's Plan preserved the NPI as
a 'Royalty and Working Interest' because the NPI falls within the
Plan's definition of Royalty and Working Interests. The definition
of 'Royalty and Working Interests' encompasses the NPI because it
is a covenant running with the land, which, in this case, is
identical to royalty interests under Wyoming law.
The case is IN RE VANGUARD NATURAL RESOURCES, LLC, Chapter 11,
Debtor. VANGUARD OPERATING, LLC, Plaintiff, v. MICHAEL L. KLEIN,
et al, Defendants, Case No. 17-30560, Adversary No. 18-3178,
(Bankr. S.D. Tex.). A full-text copy of the Amended Memorandum
Opinion, dated December 11, 2020, is available at
https://tinyurl.com/y7e8omfu from Leagle.com.
About Vanguard Natural Resources, LLC
Vanguard Natural Resources, LLC (OTC: VNRSQ) --
http://www.vnrllc.com/-- is a publicly traded limited liability
company focused on the acquisition, production and development of
oil and natural gas properties. Vanguard's assets consist
primarily of producing and non-producing oil and natural gas
reserves located in the Green River Basin in Wyoming, the Permian
Basin in West Texas and New Mexico, the Gulf Coast Basin in Texas,
Louisiana, Mississippi and Alabama, the Anadarko Basin in Oklahoma
and North Texas, the Piceance Basin in Colorado, the Big Horn Basin
in Wyoming and Montana, the Arkoma Basin in Arkansas and Oklahoma,
the Williston Basin in North Dakota and Montana, the Wind River
Basin in Wyoming, and the Powder River Basin in Wyoming.
Vanguard Natural Resources, LLC, and certain subsidiaries filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Tex. Lead Case No. 17-30560) on Feb. 2, 2017.
The Chapter 11 cases are assigned to the Hon. Judge Marvin Isgur.
The Debtors listed total assets of $1.54 billion and total debt of
$2.3 billion as of Feb. 1, 2017.
Paul Hastings LLP is serving as legal counsel and Evercore Partners
is acting as financial advisor to Vanguard. Opportune LLP is the
Company's restructuring advisor. Prime Clerk LLC is serving as
claims and noticing agent.
Judy R. Robbins, the U.S. Trustee for Region 7, on Feb. 14, 2017,
appointed three creditors to serve on the official committee of
unsecured creditors appointed in the Debtor's case. The Committee
hired Akin Gump Strauss Hauer & Feld LLP as counsel and FTI
Consulting, Inc., as financial advisor.
The Company on March 16, 2017, filed a motion with the Bankruptcy
Court disclosing a Stipulation and Agreed Order entered into on
March 15, 2017, by and between the Debtors and certain Unaffiliated
holders of its Preferred Units and common units pursuant to which
the Debtors and the Ad Hoc Equity Committee agreed, among other
things, that professionals for the Ad Hoc Equity Committee would be
funded by the Debtors' estates for services performed within a
defined scope and subject to agreed caps on fees and expenses as
described in the Stipulation and Agreed Order.
Counsel to the Ad Hoc Equity Committee are Sharon M. Beausoleil,
Esq., Alexander Chae, Esq., and Holland N. O'Neil, Esq., at Gardere
Wynne Sewell LLP.
Attorneys for Citibank, N.A, as administrative agent under the
Third Amended and Restated Credit Agreement, dated as of Sept. 30,
2011, are Chris Lopez, Esq., Stephen Karotkin, Esq., and Joseph H.
Smolinsky, Esq., at Weil Gotshal & Manges LLP.
VILLA TAPIA: Solicitation Exclusivity Period Extended to March 8
----------------------------------------------------------------
At the behest of Debtor Villa Tapia Citi Fresh Supermarket Corp,
Judge Nancy Hershey Lord of the U.S. Bankruptcy Court for the
Eastern District of New York extended the periods by 92 days within
which the Debtor has the exclusive rights to obtain confirmation of
a plan from December 6, 2020, to March 8, 2021.
In its motion to extend, the Debtor said that the Court requires
three conditions per Section 1121(e)(3) to extend the said deadline
for a filed plan to be confirmed. The first condition is that the
debtor must "demonstrate by a preponderance of the evidence that it
is more likely than not that the court will confirm a plan within a
reasonable period of time." It is more likely than not that the
Court will confirm the Debtor's Plan because the Debtor's Plan and
the Debtor's Disclosure Statement demonstrate that the Debtor is in
a financially stable position going forward:
(i) the Debtor has been granted a Small Business Administration
Loan in the amount of $150,000 which has already enabled the Debtor
to catch up on its rental arrears and assume its lease, and which
will also be used to pay down post-petition administrative fees to
Con Edison. Additionally, the SBA Loan proceeds will help the
Debtor pay off other post-petition administrative fees and this
will put them in a much better position to successfully manage
their Chapter 13 Plan;
(ii) a large Sanitation garage is being built next door to the
Debtor's location, which all but assures a significant flow of
customers for the duration of the construction and for when the
garage opens;
(iii) the Debtor is in the process of recovering its WIC license,
which will further increase revenue; and
(iv) the Debtor has, for the first time, embarked on a marketing
blitz that includes local advertisement and deliveries.
The second condition of Section 1121(e)(3) is a new deadline will
be imposed at the time the extension is granted. The new deadline
will be imposed at the next hearing, which was scheduled for
December 1, 2020. And lastly, the third condition is that the order
extending time will be signed before the existing deadline has
expired. The order was signed on November 12, 2020, which is before
the December 6 exclusivity deadline.
The Debtor's Plan has already been reviewed by all the Debtor's
creditors. It is anticipated that after some minor revisions have
been made, the second draft of the Debtor's Plan and the Debtor's
Disclosure Statement will be ready to be voted on.
A copy of the Debtor's Motion to extend is available from
PacerMonitor.com at https://bit.ly/2WfhZ9p at no extra charge.
A copy of the Court's Extension Order is available from
PacerMonitor.com at https://bit.ly/39JUOfc at no extra charge.
About Villa Tapia Citi Fresh Supermarket Corp.
Based in Brooklyn, N.Y., Villa Tapia Citi Fresh Supermarket Corp.
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-40357) on January 20,
2020, listing under $1 million in both assets and liabilities.
Previously, Judge Elizabeth S. Stong oversees the case, now the
case is assigned to Judge Nancy Hershey Lord. Phillip Mahony, Esq.,
is Debtor's bankruptcy counsel. Debtor tapped Sgouras Law Firm,
PLLC as its legal counsel for non-bankruptcy matters, and Marcum
LLP as its accountant.
WATERS RETAIL: Court Approves Plan of Liquidation
-------------------------------------------------
Judge Stacey H.C. George of the United States Bankruptcy Court for
the Northern District of Texas, Dallas Division, confirmed Waters
Retail TPA, LLC's Plan of Liquidation.
Allison Byman was designated as the Consolidated Liquidating
Trustee.
Judge George had previously entered an Order, among other things,
Conditionally Approving the First Amended Disclosure Statement in
Support of First Amended Plan of Liquidation of Waters Retail TPA,
LLC, and approving certain procedures for the sale of substantially
all of the Waters Retail's Assets to a third party as well as the
solicitation and tabulation of votes for the Plan. A hearing to
confirm the Plan was held on December 16, 2020.
The Disclosure Statement and Plan provides for the purchase and
sale of the Debtor's Property. The Disclosure Statement included a
copy of the Waters Retail and WMG Development, LLC, or the Waters
Retail Buyer, Purchase and Sale Agreement as well as certain
bidding requirements for parties interested in submitting a
competing bid to purchase the Waters Property. On November 24,
2020, the Court granted the Expedited Motion of Waters Retail TPA,
LLC Only for Bidding Procedures, Break-Up Fee and Other Protections
in Advance of Sale, and Granting Related Relief, which approved of
Debtor's selection of WMG as the Stalking Horse Bidder as well as
other bid qualifications and protections. The Disclosure Statement
provided that the Waters Retail Property would be sold to WMG
pursuant to the Waters Retail PSA unless Debtor received a signed
PSA on the same or better terms as the Waters Retail PSA, including
a purchase price of no less than $3,880,000.00, by the Waters Bid
Deadline.
In addition to Administrative Expense Claims and Priority Tax
Claims, which need not be classified, the Plan designates five
Classes of Claims: Classes 1.1, 2.1, 2.2, 2.3, and 3. The Claims
placed in each Class are substantially similar to other Claims in
each such Class, and such classification was deemed consistent with
Bankruptcy Code Section 1122.
The Plan is a liquidating plan. Article 5 of the Plan specifies the
treatment of Equity Interest Holders. Equity holders will only
receive distributions under the Plan to the extent that all senior
claims have been paid in full. The plan provides for the
designation of the Consolidated Liquidating Trustee to liquidate
remaining assets, make distribution to creditors, and wind up the
Debtor's business.
Article 6 of the Plan provides adequate and proper means for
implementing the Plan. Article 6 establishes the procedures for the
sale of the Debtor's Property to the Waters Retail Buyer. The Plan
implements the sale of the Waters Retail Property to the Waters
Retail Buyer and the receipt of the Waters Retail Proceeds from the
sale of the Waters Retail Property shall fund the Plan payments.
Article 6 also sets forth the establishment of the Consolidated
Liquidating Trust upon the Effective Date. The Consolidated
Liquidating Trustee will be authorized to pursue any and all Causes
of Action on behalf of the Debtor and its Estate, including Chapter
5 Causes of Action.
The Plan has been accepted by Creditors that hold at least
two-thirds in amount and more than one-half in number of the
Allowed Claims and Interests that have voted to accept or reject
the Plan. Judge George found that the procedure by which ballots
were received and tabulated was fair, properly conducted, and in
accordance with the Bankruptcy Code, the Bankruptcy Rules, Local
Rules, the Disclosure Statement and the Disclosure Statement
Order.
Judge George approved, on a final basis, the adequacy of the
Disclosure Statement. She likewise approved and confirmed the
Plan, and its modifications, in its entirety. Judge George said
that the modifications did not materially and adversely affect or
change the treatment of any creditor who has not accepted such
modifications. She also said that pursuant to Bankruptcy Rule
3019, such modifications did not require additional disclosure
under Section 1125 of the Bankruptcy Code, or re-solicitation of
acceptances or rejections under Section 1126 of the Bankruptcy
Code, nor did they require that holders of Claims not accepting
such modifications be afforded an opportunity to change previously
cast acceptances or rejection of the Plan. No objections were
filed to the confirmation of the Plan.
The case is n re: WATERS RETAIL TPA, LLC et al., Debtors, Case No.
Case No. 20-30644-sgh-11, (Bankr. N.D. Tex.). A full-text copy of
the Findings of Fact, Conclusions of Law and Order Confirming Plan
of Liquidation of Waters Retail TPA, LLC, dated December 16, 2020,
is available at https://tinyurl.com/ybsxtju3 from Leagle.com.
About Waters Retail TPA
Waters Retail TPA, LLC is a Single Asset Real Estate debtor (as
defined in 11 U.S.C. Section 101(51B)). Waters Retail TPA, LLC,
filed its voluntary petition under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Tex. Case No. 20-30644) on Feb. 27, 2020. In the
petition signed by Donald L. Silverman, manager, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities. Vickie L. Driver, Esq. at CROWE & DUNLEVY, P.C.,
represents the Debtor.
WEX INC: eNett Acquisition No Impact on Moody's Ba2 Rating
----------------------------------------------------------
Moody's Investors Service said that the completion of the
acquisition of eNett International (Jersey) Limited and Optal
Limited is credit positive for WEX Inc. (Ba2 Negative), but has no
immediate ratings implications.
On December 15, 2020, WEX announced that it had reached an
agreement with the former owners of eNett and Optal to acquire the
firms for a total cash consideration of $577.5 million, roughly
just a third of the original purchase price of $1.7 billion. eNett
and Optal are integrated travel payments processing businesses
operating in Europe and the Asia-Pacific region, and as such have
been severely impacted by the ongoing coronavirus pandemic which
has depressed travel volumes globally. Given the new purchase
price, and WEX's own $1 billion corporate cash balance at September
30, 2020, the acquisition will likely not require any new debt and
will leave WEX with robust liquidity, including $818 million
availability under the firm's corporate revolver as of September
30, 2020. The new terms of the acquisition are credit positive
because they will help moderate leverage and maintain strong
liquidity.
Offsetting these positives, WEX's payments processing and account
servicing businesses remain depressed amid the ongoing pandemic.
WEX's travel volumes were down between 45% and 60% between the
weeks ending July 3, 2020 and October 23, 2020 relative to the same
period last year. These pressures drove a 35% revenue decline in
WEX's Corporate & Travel Payments segment during the third quarter
of 2020 compared to the same reporting period in the prior year.
WEX's Fleet segment, which accounts for roughly 60% of total
revenue, experienced an 18% revenue decline in the third quarter
relative to the same period last year. Somewhat mitigating these
trends, WEX's Health and Employee Benefits segment has continued
solid performance, posting 7% year-over-year revenue growth during
the third quarter. Furthermore, travel volumes have begun to
rebound from their low point during the second quarter of 2020,
which should help improve earnings in the coming quarters.
The revenue pressures and the cash outflow associated with
completing the transaction are likely to lead the firm to exceed
its own 2.5x-3.5x net debt to EBITDA leverage target in early 2021,
particularly as the trailing twelve months EBITDA calculation
replaces pre-coronavirus fiscal quarters with quarters whose
results are negatively impacted by the pandemic.
The announcement follows a legal battle following the onset of the
pandemic, where WEX claimed that eNett and Optal had suffered a
material adverse change under the terms of the original purchase
agreement signed on January 24, 2020. WEX contended that the MAC
nullified its obligation to complete the acquisition. In October
2020, WEX received a favorable ruling in a preliminary issues
court, with the court finding that eNett and Optal operated within
the broader B2B payments industry, not the travel payments
industry, for the purposes of assessing whether they had been
disproportionately impacted by the pandemic relative to industry
participants, a requirement for assessing that a MAC had occurred.
Given the negative outlook, a ratings upgrade is unlikely over the
next 12-18 months. However, the rating could be upgraded if WEX
were to improve profitability to a level whereby net income to
assets exceeded 3% on a sustainable basis. Increased business scale
and diversification, and consistent demonstration of conservative
financial policies, such as managing to a company-reported bank
covenant net debt/EBITDA to remain between 2.5x to 3.5x absent an
acquisition, would also be positive for the ratings. The outlook
could return to stable if the company's bank covenant net debt to
EBITDA falls and remains below 5.0x, and begins to trend towards
the company's target range of 2.5x and 3.5x.
The ratings could be downgraded if the company were to increase
materially its leverage, evidenced by the company-reported bank
covenant net debt / EBITDA above 5.0x that Moody's expects to
persist for four or more quarters, or if the company-reported bank
covenant net debt / EBITDA were to rise above 5.5x. In addition, a
rating downgrade could be prompted if the company took any actions
that would increase leverage or harm its liquidity.
YOUFIT HEALTH: Committee Engages Dundon as Financial Advisor
------------------------------------------------------------
The official committee of unsecured creditors appointed in YouFit
Health Clubs LLC's Chapter 11 case seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to hire Dundon
Advisers LLC as its financial advisor.
The committee needs a financial advisor to monitor the Debtor's
restructuring and sale process, assist in soliciting transactions
that would support unsecured creditor recovery, and review any
proposed Chapter 11 plan or assist in developing an alternative
plan.
The hourly rates charged by the firm's professionals are:
Alez Mazier $700
Ammar Alyemany $400
April Kimm $525
Colin Breeze $630
Demetri Xistris $550
Eric Reubel $600
Harry Tucker $475
Heather Barlow $700
HeJing Cui $400
Laurence Pelosi $700
Lee Rooney $400
Mark Firedler $675
Matthew Dundon $750
Michael Garbe $525
Peter Hurwitz $700
Phillip Preis $650
Tabish Rizvi $550
Matthew Dundon, a principal at Dundon Advisers, disclosed in court
filings that the firm is "disinterested" within the meaning of
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Matthew Dundon
Dundon Advisers
440 Mamaroneck Avenue, Fifth Floor
Harrison, NY 10528
Phone: +1 (914) 341-1188/ +1 (917) 838-1930
Fax: +1 (212) 202-4437
md@dundon.com
About YouFit Health Clubs
YouFit Health Clubs, LLC, and its affiliates own and operate 85
fitness clubs in the states of Alabama, Arizona, Florida, Georgia,
Louisiana, Maryland, Pennsylvania, Rhode Island, Texas, and
Virginia. Visit https://www.youfit.com for more information.
On Nov. 9, 2020, YouFit Health Clubs and its affiliates sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12841).
YouFit was estimated to have $50 million to $100 million in assets
and $100 million to $500 million in liabilities as of the filing.
The Hon. Mary F. Walrath is the case judge.
The Debtors tapped Greenberg Traurig LLP as its bankruptcy counsel,
FocalPoint Securities LLC as investment banker, Red Banyan Group
LLC as communications consultant, and Hilco Real Estate LLC as real
estate advisor. Donlin Recano & Company Inc. is the claims agent.
On Nov. 18, 2020, the U.S. Trustee for Region 3 appointed a
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. The committee tapped Berger Singerman LLP and Pachulski
Stang Ziehl & Jones LLP as its legal counsel, and Dundon Advisers
LLC as its financial advisor.
YOUFIT HEALTH: Committee Seeks to Hire Berger Singerman as Counsel
------------------------------------------------------------------
The official committee of unsecured creditors appointed in YouFit
Health Clubs LLC's Chapter 11 case seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to hire Berger
Singerman LLP as its legal counsel.
The firm will provide services in connection with the Debtor's
bankruptcy case, which include the preparation of a Chapter 11 plan
of reorganization, negotiations and investigation of the Debtor's
financial condition and previous transactions.
The hourly rates charged by the firm's attorneys and
paraprofessionals are:
Partners $425 - $725
Of Counsel $385 - $585
Associates $295 - $450
Paraprofessionals $85 - $250
Brian Rich, Esq., at Berger Singerman, disclosed in court filings
that the firm is "disinterested" within the meaning of Section
101(14) of the Bankruptcy Code.
In response to the request for additional information set forth in
Paragraph D.1 of the Revised U.S. Trustee Guidelines, Mr. Rich
disclosed that his firm did not agree to any variations from, or
alternatives to, its standard or customary billing arrangements for
this engagement and that no professional at the firm varied his
rate based on the geographic location of the Debtor's case.
Berger Singerman did not represent the committee before its
formation and that the firm's billing rates have not changed since
its retention, Mr. Rich further disclosed, adding that the firm is
developing a budget and staffing plan that will be presented for
approval by the committee.
Berger Singerman can be reached through:
Brian G. Rich, Esq.
Berger Singerman LLP
313 North Monroe St., Suite 301
Tallahassee, FL 32301
Phone: 850-561-3010/850-521-6725
Fax: 850-561-3013
brich@bergersingerman.com
About YouFit Health Clubs
YouFit Health Clubs, LLC, and its affiliates own and operate 85
fitness clubs in the states of Alabama, Arizona, Florida, Georgia,
Louisiana, Maryland, Pennsylvania, Rhode Island, Texas, and
Virginia. Visit https://www.youfit.com for more information.
On Nov. 9, 2020, YouFit Health Clubs and its affiliates sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12841).
YouFit was estimated to have $50 million to $100 million in assets
and $100 million to $500 million in liabilities as of the filing.
The Hon. Mary F. Walrath is the case judge.
The Debtors tapped Greenberg Traurig LLP as its bankruptcy counsel,
FocalPoint Securities LLC as investment banker, Red Banyan Group
LLC as communications consultant, and Hilco Real Estate LLC as real
estate advisor. Donlin Recano & Company Inc. is the claims agent.
On Nov. 18, 2020, the U.S. Trustee for Region 3 appointed a
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. The committee tapped Berger Singerman LLP and Pachulski
Stang Ziehl & Jones LLP as its legal counsel, and Dundon Advisers
LLC as its financial advisor.
YOUFIT HEALTH: Committee Seeks to Hire Pachulski as Co-Counsel
--------------------------------------------------------------
The official committee of unsecured creditors appointed in YouFit
Health Clubs LLC's Chapter 11 case seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to hire Pachulski
Stang Ziehl & Jones, LLP.
Pachulski will serve as co-counsel with Berger Singerman, LLP, the
other firm representing the committee in the Debtor's bankruptcy
case.
The hourly rates charged by the firm's attorneys and paralegals
are:
Partners/Counsel $650 - $1,495
Associates $625 - $725
Paralegals $395 - $425
Bradford Sandler, Esq., a partner at Pachulski, disclosed in court
filings that the firm is "disinterested" within the meaning of
Section 101(14) of the Bankruptcy Code.
In response to the request for additional information set forth in
Paragraph D.1 of the Revised U.S. Trustee Guidelines, Mr. Sandler
disclosed that his firm did not agree to any variations from, or
alternatives to, its standard or customary billing arrangements for
this engagement and that no professional at the firm varied his
rate based on the geographic location of the Debtor's case.
Pachulski did not represent the committee in the 12-month period
prior to the Debtor's bankruptcy filing, Mr. Sandler further
disclosed, adding that the firm anticipates filing a budget at the
time it files its interim fee applications, which may be amended as
necessary to reflect changed circumstances or unanticipated
developments.
Pachulski can be reached through:
Bradford J. Sandler, Esq.
Pachulski Stang Ziehl & Jones, LLP
919 North Market Street, 17th Floor
Wilmington, DE 19801
Tel: 302.652.4100/302.778.6424
Fax: 302.652.4400
bsandler@pszjlaw.com
info@pszjlaw.com
About YouFit Health Clubs
YouFit Health Clubs, LLC, and its affiliates own and operate 85
fitness clubs in the states of Alabama, Arizona, Florida, Georgia,
Louisiana, Maryland, Pennsylvania, Rhode Island, Texas, and
Virginia. Visit https://www.youfit.com for more information.
On Nov. 9, 2020, YouFit Health Clubs and its affiliates sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12841).
YouFit was estimated to have $50 million to $100 million in assets
and $100 million to $500 million in liabilities as of the filing.
The Hon. Mary F. Walrath is the case judge.
The Debtors tapped Greenberg Traurig LLP as its bankruptcy counsel,
FocalPoint Securities LLC as investment banker, Red Banyan Group
LLC as communications consultant, and Hilco Real Estate LLC as real
estate advisor. Donlin Recano & Company Inc. is the claims agent.
On Nov. 18, 2020, the U.S. Trustee for Region 3 appointed a
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. The committee tapped Berger Singerman LLP and Pachulski
Stang Ziehl & Jones LLP as its legal counsel, and Dundon Advisers
LLC as its financial advisor.
YOUNG MEN'S: Beneficial Bond Owners Entitled to Notice
------------------------------------------------------
Judge Dale L. Somers of the United States Bankruptcy Court for the
District of Kansas denied the Young Men's Christian Association of
Topeka, Kansas' Motion to determine the adequacy of procedures for
plan voting.
In 2000, the City of Topeka issued Economic Refunding Revenue
Bonds, Series 2000A, dated August 1, 2000 for the purpose of
construction, furnishing, and equipping the YMCA's 38,000 square
foot facility in southwest Topeka. In 2011, Series 2011 A Bonds in
the principal amount of $7,055,000 were issued for the purpose of
refunding and redeeming the outstanding Series 2000A bonds.
The Bonds were issued in accordance with the Kansas Economic
Development Revenue Act, which empowers a city to issue revenue
bonds, the proceeds of which shall be used for the purpose of
paying all or part of the cost of purchasing facilities for
commercial development and to enter into leases for such
facilities. Under this industrial revenue bond financing
arrangement, the City is the fee holder of Debtor's facility, and
the YMCA leases the facility from the City. CoreFirst Bank & Trust
serves as Indenture Trustee.
On May 21, 2020, the YMCA filed for relief under Subchapter V of
Chapter 11. The schedules listed CoreFirst as having a claim for
$5,260.000, partially secured by Debtor's facility, whose
construction was funded through the Bond issuance. Neither the
record holders of the Bonds nor the holders of the beneficial
interests in the Bonds were listeded as creditors. CoreFirst, as
"Bond Trustee for Economic Development Refunding Bonds, Series
2011A," filed a proof of claim for $5,774,391.48, stating that the
amount of the secured portion is currently unknown and will be
settled when the Court determines the value of the facility.
On August 18, 2020, Debtor filed its Subchapter V plan of
reorganization. Service was made on the Indenture Trustee, but not
those with interests in the Bonds. The Court set September 30,
2020 as the deadline for objections to the plan and October 9, 2020
as the date for the confirmation hearing. The plan treats Debtor's
obligations under the Bonds as partially secured claims, in accord
with bankruptcy case law treating Kansas industrial revenue bond
transactions as secured loans, rather than as true leases. Under
this approach, the bondholders are secured creditors of Debtor.
There has been no objection to this treatment. The plan provided
that the bondholders, represented by CoreFirst as Bond Trustee,
have a secured claim for $1,635,000, the alleged value of the
facility, and an unsecured claim for the remaining balance owed.
On September 21, 2020, Debtor filed its Motion to determine the
adequacy of procedures for plan voting. It alleged that Debtor's
counsel had been put on notice by one of the bondholders that it,
as well as other bondholders, expect to vote on Debtor's
reorganization plan. The Debtor further alleged that the
bondholder challenged Debtor's failure to determine the identity of
beneficial owners of the Bonds and to provide them notice of the
plan and a ballot. The Debtor requested the Court to affirm
Debtor's position that under the Bond documents, notice to
CoreFirst, the Indenture Trustee, provides adequate notice to the
bondholders and that the Indenture Trustee, not individual
bondholders, is entitled to ballot the plan.
Judge Somers held that the beneficial owners of the Bonds, not the
Indenture Trustee, are entitled to vote on Debtor's reorganization
plan. He explained that the Continuing Disclosure Agreement for
the IRB transaction defines beneficial owner to mean "any
registered owner of any Bonds which (a) has the power, directly or
indirectly, to vote or consent with respect to, or dispose or
ownership, of any Bonds (including persons holding Bonds through
nominees, depositories or other intermediates), or (b) is treated
as the owner of any Bonds for federal income tax purposes." He
further explains that "because the beneficial holder will receive
the benefits of any plan distribution, it is the beneficial holder,
not the holder of record, who has the claim and the right to
payment and is entitled to vote to accept or reject a debtor's
plan. Judge Somers contended that the Debtor must undertake
providing notice, including a copy of the plan and a ballot, to the
beneficial owners of the Bonds.
The case is IN RE: YOUNG MEN'S CHRISTIAN ASSOCIATION OF TOPEKA,
KANSAS, Chapter 11, Debtor, Case No. 20-20786 (Bankr. D. Kan.). A
full-text copy of the Memorandum Opinion and Order Addressing
Procedures for Plan Voting, dated December 14, 2020, is available
at https://tinyurl.com/y79okh56 from Leagle.com.
About Young Men's Christian Association
The Young Men's Christian Association of Topeka, Kansas, is a
tax-exempt organization that is focused on youth development,
healthy living and social responsibility. For more information,
visit https://www.ymcatopeka.org/.
Young Men's Christian Association sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Kan. Case No. 20-20786) on May
21, 2020. At the time of the filing, Debtor disclosed $4,850,289
in assets and $5,490,339 in liabilities. Judge Dale L. Somers
oversees the case. Debtor is represented by Hinkle Law Firm, LLC.
The Office of the U.S. Trustee on June 15, 2020, disclosed in a
court filing that no official committee of unsecured creditors has
been appointed in the Chapter 11 case of The Young Men's Christian
Association of Topeka, Kansas.
[*] Biggest Bankruptcies in 2020
--------------------------------
Matilda Coleman of Upnews Info reports one industry after another
saw activity grind to a near halt in March as the pandemic broke
out in the United States. Retailers contended with stores closed
for weeks and shoppers too shellshocked to spend on anything but
essentials; energy companies faced big declines in demand and, by
extension, prices; health care companies dealt with the sector's
shift toward addressing COVID and away from more standard
care—and the list goes on.
The result has been 610 bankruptcies as of Dec. 13, 2020, according
to S&P Global Market Intelligence. That statistic is the highest
it's since 2012, according to the ratings agency and compares to
552 bankruptcies over the same period in 2019. (S&P tracks
companies, private or publicly traded, with debt traded on the
markets.)
Few sectors were spared by the pandemic-fueled recession, judging
by the roster of 2020 bankruptcies. That list includes retailers
such as J.C. Penney, Neiman Marcus, and J.Crew, car rental giant
Hertz, mall operator CBL & Associates Properties, Internet provider
Frontier Communications, oilfield services provider Superior Energy
Services, and hospital operator Quorum Health.
The wave of bankruptcies was particularly brutal for department
stores, clothing companies, and other retailers selling
nonessential goods. Consumers gravitated to big-box stores where
they could do all their shopping under one roof, and they focused
on things like food and home improvements. About 20% of the
bankruptcy filings were by nonessential retailers, according to S&P
-- far more than any other category.
Even as the rollout of vaccines begins in the United States, giving
people a much needed morale boost, 2021 will still be a tough one
for U.S. companies overall.
Retail, in particular, is likely in for additional pain. As of
November 2020's soft consumer spending numbers show, Americans are
quick to hold back in the absence of support for the millions
without work, or in the presence of new restrictions. And mass
vaccinations, which may alleviate the situation, are still months
away.
The ratings agencies are keeping a close eye on companies they
consider distressed to see how they fare in 2021. On the retail
side, that means businesses such as Jo-Ann Stores, Rite-Aid, Party
City, and Belk; in the restaurant sector, they include Potbelly and
Noodles & Co.
The agency expects overall profits to be up in 2021 since retailers
won't have to invest as much in things like plexiglass dividers,
curbside pickup areas, and other such items. But companies that
were struggling before the pandemic, and somehow slogged through
2020, are very far from being out of the woods.
"You're going to see some weaker players fall off," Moody's vice
president Mickey Chadha tells.
* Frontier Communications ($17.1 billion): The phone and
Internet service provider choked under an enormous debt load and
investments in fiber infrastructure that came too late. Yet
Frontier is poised to emerge from Chapter 11 soon.
* Neiman Marcus ($5.3 billion): The luxury department store's
weak balance sheet proved untenable at a time of declining store
sales and upscale brands getting more aggressive about selling via
their own stores and sites. It has emerged from bankruptcy
protection but faces more of the same tough landscape.
* Diamond Offshore Drilling ($6.3 billion): A record drop in
crude oil prices as the global economy practically shut down in
spring destroyed demand for oil exploration at sea.
* Tailored Brands ($1.5 billion): With millions of men working
from home during the pandemic, the parent company of suit purveyor
Men's Wearhouse, still struggling to digest its 2014 acquisition of
Jos. A. Bank, experienced an untenable sales plunge.
* The McClatchy Co. ($1.5 billion): The newspaper company had
been struggling with declining print subscriptions for years,
leading to its bankruptcy filing in February 2020.
* CBL & Associates Properties (more than $1 billion): The mall
operator's second-tier properties have been grappling with
declining shopper visits for some time, and COVID-19 pushed the
company over the edge.
* 24 Hour Fitness Worldwide (more than $1 billion): Gyms were
among the first businesses closed during lockdowns and the last to
be allowed to reopen, leading to enormous strains on the finances
of chains like 24 Hour Fitness.
* Hertz (more than $1 billion): The near halt in travel,
particularly business travel, proved too much for a company
struggling to deal with threats to its business model, forcing it
to restructure its debt.
* Quorum Health (more than $1 billion): The operator of 24
hospitals struggled with a heavy debt load made tougher to bear as
the COVID-19 pandemic reduced its ability to perform elective
procedures that are most profitable to hospitals. (It exited
Chapter 11 in June 2020.)
* J.C. Penney, J.Crew, Ascena Retail (Ann Taylor), Stage Stores,
and Stein Mart: These retailers had been wobbly long before
COVID-19 arrived and decimated apparel spending, exposing their
weaknesses.
[*] Spending Bill Lets Judges Quickly Approve PPP Loans
-------------------------------------------------------
Daniel Gill of Bloomberg Law reports that bankruptcy judges would
be able to approve Paycheck Protection Plan loans on an expedited
basis under the government spending bill currently under
consideration in Congress.
The Consolidated Appropriations Act (H.R. 133) revealed Monday,
December 21, 2020, would add a section allowing Chapter 11 debtors
or trustees to seek final approval of a PPP loan, with a hearing
only seven days from filing the request. It's one of a handful of
provisions aimed at helping bankrupt debtors during the Covid-19
pandemic.
But the change won't be effective unless and until the
administrator of the Small Business Administration advises the
director of the Executive Office of the U.S. Trustee -- the Justice
Department's bankruptcy watchdog -- that it will accept
applications from bankrupt borrowers.
The SBA's policy thus far has been to exclude bankrupt businesses
from applying for the loans.
This policy has been the subject of significant litigation in
bankruptcy courts across the country, with differing results. The
U.S. Court of Appeals for the Fifth Circuit is the only federal
appeals court to have ruled on the issue, finding that the SBA
can't be required to accept applications from bankrupt borrowers.
The Second and Eleventh circuits are currently considering the
question.
Businesses say PPP loans' favorable terms -- including their
eventual forgiveness -- make them more like a grant, and the
bankruptcy code prohibits denying grants solely because of a
bankruptcy filing.
"Now that Congress' intent to authorize bankrupt companies for
CARES Act borrowing is explicit," the SBA could start accepting
bankrupt borrowers' applications, said Jared Ellias, a law
professor at the University of California, Hastings.
Leases, Rent
The bill also would make two significant changes to a debtor's
options for handling non-residential leases and rent.
Bankrupt companies currently have 210 days to decide whether to
keep or reject their leases before being subject to penalties for
not paying rent, a time frame retailers in particular are having
trouble meeting because of pandemic-spurred shutdowns, Ellias
said.
H.R. 133 would temporarily extend that time by 90 days, requiring
the decision to be made 300 days after filing for bankruptcy.
Companies filing under Subchapter V of Chapter 11, a new proceeding
tailored to small businesses, could also get an additional 60 days
to cure their rent defaults, for up to 120 days, if the court finds
that the Covid-19 pandemic is the cause of delayed payments.
The additional time could let businesses "wait and see what happens
with the vaccination campaigns" before deciding whether to reject
their leases, Ellias said.
Another provision would allow suppliers and landlords to accept
payments in the 90 days before a bankruptcy filing without being
subject to clawbacks, if they had agreed to payment extensions
because of the pandemic.
Bankruptcy law currently allows a debtor-in-possession or trustee
to claw back payments made to creditors in the 90 days prior to a
bankruptcy filing, called "preferences," in order to prevent
debtors from preferring some creditors over others. The bill
provision would provide an incentive to cut businesses a break in
light of the pandemic.
On the consumer side, the bill would allow individuals in Chapter
13 to fall behind on their mortgage payments by up to three
months—if because of Covid-19—without endangering their ability
to discharge debts remaining after the payment plan period ends.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Kelly L. Nascarella
Bankr. M.D. Fla. Case No. 20-09077
Chapter 11 Petition filed December 14, 2020
represented by: Buddy Ford, Esq.
BUDDY D. FORD, P.A.
Email: Buddy@tampaesq.com
In re Rene Arriaga and Florence Perez-Arriaga
Bankr. M.D. Fla. Case No. 20-03542
Chapter 11 Petition filed December 14, 2020
represented by: Richard A. Perry, Esq.
RICHARD A. PERRY
E-mail: richard@rapocala.com
In re California Transport, LLC
Bankr. S.D. Ala. Case No. 20-12812
Chapter 11 Petition filed December 15, 2020
See
https://www.pacermonitor.com/view/7J4LWZQ/California_Transport_LLC__alsbke-20-12812__0001.0.pdf?mcid=tGE4TAMA
represented by: Frances Hoit Hollinger, Esq.
FRANCES HOIT HOLLINGER, LLC
E-mail: FranHollinger@aol.com
In re Guy La Ferrera's International Design III, Inc.
Bankr. S.D. Fla. Case No. 20-23589
Chapter 11 Petition filed December 15, 2020
See
https://www.pacermonitor.com/view/C5WBF4I/Guy_La_Ferreras_International__flsbke-20-23589__0001.0.pdf?mcid=tGE4TAMA
represented by: Angelo A. Gasparri, Esq.
SHAPIRO, BLASI, WASSERMAN & HERMANN, P.A.
E-mail: mkish@sbwh.law
In re Designs By SDB, LLC
Bankr. N.D. Ga. Case No. 20-72663
Chapter 11 Petition filed December 15, 2020
See
https://www.pacermonitor.com/view/DVNDL7Q/Designs_By_SDB_LLC__ganbke-20-72663__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re 1100 Clearview, L.L.C.
Bankr. E.D. La. Case No. 20-12053
Chapter 11 Petition filed December 15, 2020
See
https://www.pacermonitor.com/view/YDQCK7Q/1100_Clearview_LLC__laebke-20-12053__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert L. Marrero, Esq.
ROBERT L. MARRERO, L.L.C.
E-mail: office@bobmarrero.com
In re 806 Race, LLC
Bankr. D. Md. Case No. 20-20789
Chapter 11 Petition filed December 15, 2020
See
https://www.pacermonitor.com/view/46JJJQA/806_Race_LLC__mdbke-20-20789__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert M. Stahl, Esq.
LAW OFFICES OF ROBERT M. STAHL
E-mail: StahlLaw@comcast.net
In re Congers Pharmacy Inc.
Bankr. S.D.N.Y. Case No. 20-23275
Chapter 11 Petition filed December 15, 2020
See
https://www.pacermonitor.com/view/X6VSLEA/Congers_Pharmacy_Inc__nysbke-20-23275__0001.0.pdf?mcid=tGE4TAMA
represented by: H Bruce Bronson, Esq.
BRONSON LAW OFFICE, P.C.
E-mail: hbbronson@bronsonlaw.net
In re Kristina Maria McGuire
Bankr. N.D. Ohio Case No. 20-15364
Chapter 11 Petition filed December 15, 2020
represented by: Michael A. Steel, Esq.
BRENNAN, MANNA & DIAMOND, LLC
E-mail: masteel@bmdllc.com
In re HJJ Fitness, LLC
Bankr. N.D. Ohio Case No. 20-61828
Chapter 11 Petition filed December 15, 2020
See
https://www.pacermonitor.com/view/NPEXN2A/HJJ_Fitness_LLC__ohnbke-20-61828__0001.0.pdf?mcid=tGE4TAMA
represented by: Edwin H. Breyfogle, Esq.
EDWIN H. BREYFOGLE
E-mail: edwinbreyfogle@sssnet.com
In re The Newell Mowing Co.
Bankr. D. Colo. Case No. 20-17988
Chapter 11 Petition filed December 16, 2020
See
https://www.pacermonitor.com/view/4UWMORY/The_Newell_Mowing_Co__cobke-20-17988__0001.0.pdf?mcid=tGE4TAMA
represented by: Joshua Sheade, Esq.
BERKEN CLOYES, PC
E-mail: joshua@berkencloyes.com
In re Marshall Spiegel
Bankr. N.D. Ill. Case No. 20-21625
Chapter 11 Petition filed December 16, 2020
represented by: David Lloyd, Esq.
In re Istanbul Rego Park, Inc.
Bankr. E.D.N.Y. Case No. 20-44294
Chapter 11 Petition filed December 16, 2020
See
https://www.pacermonitor.com/view/CT6ML5A/Istanbul_Rego_Park_Inc__nyebke-20-44294__0001.0.pdf?mcid=tGE4TAMA
represented by: Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
E-mail: alla@kachanlaw.com
In re Kaiser and Associates, DDS, P.A.
Bankr. M.D.N.C. Case No. 20-80555
Chapter 11 Petition filed December 16, 2020
See
https://www.pacermonitor.com/view/7V2CKBQ/Kaiser_and_Associates_DDS_PA__ncmbke-20-80555__0001.0.pdf?mcid=tGE4TAMA
represented by: Trawick H. Stubbs, Esq.
William H. Kroll, Esq.
STUBBS & PERDUE, P.A.
E-mail: tstubbs@stubbsperdue.com
In re Marcos Devarie Diaz and Aixa Morales Fontenez
Bankr. D.P.R. Case No. 20-04865
Chapter 11 Petition filed December 16, 2020
represented by: Noemi Landrau Rivera, Esq.
In re HWY 24 Lumber & Feed, Inc.
Bankr. E.D. Tex. Case No. 20-42468
Chapter 11 Petition filed December 16, 2020
See
https://www.pacermonitor.com/view/W3APJUI/HWY_24_Lumber__Feed_Inc__txebke-20-42468__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric A. Liepins, Esq.
ERIC A. LIEPINS
E-mail: eric@ealpc.com
In re Daniel P. Wergin and Carol J. Wergin
Bankr. E.D. Wisc. Case No. 20-28000
Chapter 11 Petition filed December 16, 2020
represented by: Paul Swanson, Esq.
STEINHILBER SWANSON LLP
Email: pswanson@steinhilberswanson.com
In re 8723 E. Via De Commercio, LLC
Bankr. D. Ariz. Case No. 20-13410
Chapter 11 Petition filed December 17, 2020
See
https://www.pacermonitor.com/view/W7AV45Q/8723_E_Via_De_Commercio_LLC__azbke-20-13410__0001.0.pdf?mcid=tGE4TAMA
represented by: Nino Abate, Esq.
THE LAW OFFICE OF NINO ABATE, PLC
E-mail: nino@abatelaw.com
In re J.B.Whalen Dairy Farming L.L.C.
Bankr. N.D. Cal. Case No. 20-51756
Chapter 11 Petition filed December 17, 2020
See
https://www.pacermonitor.com/view/RCBTGBI/JBWhalen_Dairy_Farming_LLC__canbke-20-51756__0001.0.pdf?mcid=tGE4TAMA
represented by: Stanley Zlotoff, Esq.
STANLEY A. ZLOTOFF
In re Rangers Enterprise Satellite, LLC
Bankr. N.D. Ga. Case No. 20-72760
Chapter 11 Petition filed December 17, 2020
See
https://www.pacermonitor.com/view/QLC4OXQ/Rangers_Enterprise_Satellite_LLC__ganbke-20-72760__0001.0.pdf?mcid=tGE4TAMA
represented by: Paul Reece Marr, Esq.
PAUL REECE MARR, P.C.
E-mail: paul.marr@marrlegal.com
In re Alabama Highway Bridgeport, LLC
Bankr. M.D. La. Case No. 20-10825
Chapter 11 Petition filed December 17, 2020
See
https://www.pacermonitor.com/view/KZZBCFQ/Alabama_Highway_Bridgeport_LLC__lambke-20-10825__0001.0.pdf?mcid=tGE4TAMA
represented by: William H. Patrick, III, Esq.
FISHMAN HAYGOOD LLP
E-mail: wpatrick@fishmanhaygood.com
In re Louisiana Highway St. Gabriel, LLC
Bankr. M.D. La. Case No. 20-10824
Chapter 11 Petition filed December 17, 2020
See
https://www.pacermonitor.com/view/KKKIL5Y/Louisiana_Highway_St_Gabriel_LLC__lambke-20-10824__0001.0.pdf?mcid=tGE4TAMA
represented by: William H. Patrick, III, Esq.
FISHMAN HAYGOOD LLP
E-mail: wpatrick@fishmanhaygood.com
In re Industrial Park Boulevard Warner Robbins, LLC
Bankr. M.D. La. Case No. 20-10827
Chapter 11 Petition filed December 17, 2020
See
https://www.pacermonitor.com/view/IFPDJPQ/Industrial_Park_Boulevard_Warner__lambke-20-10827__0001.0.pdf?mcid=tGE4TAMA
represented by: William H. Patrick, III, Esq.
FISHMAN HAYGOOD, LLP
E-mail: wpatrick@fishmanhaygood.com
In re Range Line Road Mobile, LLC
Bankr. M.D. La. Case No. 20-10828
Chapter 11 Petition filed December 17, 2020
See
https://www.pacermonitor.com/view/JH4O4MI/Range_Line_Road_Mobile_LLC__lambke-20-10828__0001.0.pdf?mcid=tGE4TAMA
represented by: William H. Patrick, III, Esq.
FISHMAN HAYGOOD LLP
E-mail: wpatrick@fishmanhaygood.com
In re Dawn L. Burnham
Bankr. D. Maine Case No. 20-10507
Chapter 11 Petition filed December 17, 2020
represented by: James Molleur, Esq.
In re Yevgeniy Viktorovich Demchenko
Bankr. E.D.N.Y. Case No. 20-44301
Chapter 11 Petition filed December 17, 2020
represented by: Alla Kachan, Esq.
In re Keith Micheal Ruegsegger and Cathy Gaddis Ruegsegger
Bankr. D.S.C. Case No. 20-04559
Chapter 11 Petition filed December 17, 2020
represented by: Robert Cooper, Esq.
In re Jeffrey J. Gordon and Vicki Gordon
Bankr. E.D. Wash. Case No. 20-02164
Chapter 11 Petition filed December 17, 2020
represented by: Donald Boyd, Esq.
In re Timothy Ernest Davis and Anissa Katherine Davis
Bankr. N.D. W.Va. Case No. 20-00888
Chapter 11 Petition filed December 17, 2020
represented by: Joe M. Supple, Esq.
In re Mary Elizabeth Lewis-McLaughlin
Bankr. M.D. Fla. Case No. 20-09244
Chapter 11 Petition filed December 18, 2020
represented by: Erik Johanson, Esq.
ERIK JOHANSON PLLC
Email: erik@johanson.law
In re Camp Woof Of Norcross LLC
Bankr. N.D. Ga. Case No. 20-72802
Chapter 11 Petition filed December 18, 2020
See
https://www.pacermonitor.com/view/F7S3FGQ/Camp_Woof_Of_Norcross_LLC__ganbke-20-72802__0001.0.pdf?mcid=tGE4TAMA
represented by: Paul Reece Marr, Esq.
PAUL REECE MARR, P.C.
E-mail: paul.marr@marrlegal.com
In re Joshua W. Pettus and Hannah H. Pettus
Bankr. M.D. Ala. Case No. 20-11556
Chapter 11 Petition filed December 21, 2020
represented by: Cameron A. Metcalf, Esq.
In re Marie Guerrera
Bankr. E.D.N.Y. Case No. 20-73654
Chapter 11 Petition filed December 21, 2020
In re Schnell Services, LLC
Bankr. E.D.N.C. Case No. 20-03955
Chapter 11 Petition filed December 21, 2020
See
https://www.pacermonitor.com/view/HTSTTNA/Schnell_Services_LLC__ncebke-20-03955__0001.0.pdf?mcid=tGE4TAMA
represented by: Danny Bradford, Esq.
PAUL D. BRADFORD, PLLC
E-mail: dbradford@bradford-law.com
In re IKD S St, LLC
Bankr. E.D. Cal. Case No. 20-25628
Chapter 11 Petition filed December 22, 2020
See
https://www.pacermonitor.com/view/XZ7LL3Q/IKD_S_St_LLC__caebke-20-25628__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Oz Steel Inc.
Bankr. E.D.N.Y. Case No. 20-44339
Chapter 11 Petition filed December 22, 2020
See
https://www.pacermonitor.com/view/FUPIGVI/Oz_Steel_Inc__nyebke-20-44339__0001.0.pdf?mcid=tGE4TAMA
represented by: Lawrence F. Morrison, Esq.
MORRISON TENENBAUM, PLLC
E-mail: info@m-t-law.com
In re Willemma Corp.
Bankr. S.D.N.Y. Case No. 20-23291
Chapter 11 Petition filed December 22, 2020
See
https://www.pacermonitor.com/view/5DLPHUA/Willemma_Corp__nysbke-20-23291__0001.0.pdf?mcid=tGE4TAMA
represented by: Charles Higgs, Esq.
THE LAW OFFICE OF CHARLES A. HIGGS
E-mail: charles@freshstartesq.com
*********
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
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includes links to freely downloadable images of these small-dollar
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Each Friday's edition of the TCR includes a review about a book of
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then-ending.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
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Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2020. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***