/raid1/www/Hosts/bankrupt/TCR_Public/210126.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, January 26, 2021, Vol. 25, No. 25
Headlines
203 W 107 STREET: KHGF Represents NY Building Tenants
37 CALUMET: May Use Cash Collateral Thru March 22
85 FLATBUSH RHO MEZZ: May Use Cash Collateral Thru Feb. 5
ADAMIS PHARMACEUTICALS: Submits Tempol IND for COVID-19 Treatment
ADVANCED INTEGRATION: S&P Downgrades ICR to 'B-'; Outlook Stable
ADVAXIS INC: Incurs $26.5 Million Net Loss in Fiscal 2020
ALEXANDER D. LEE: Bakers Buying Breckenridge Property for $950K
ALEXANDER D. LEE: Lamb Buying Lighthouse Point Property for $3.3M
ALEXANDER D. LEE: Selling Breckenridge Condo Unit 518 for $1.36M
ALEXANDER D. LEE: Skurchaks Buying Breckenridge Property for $725K
ALPHA MEDIA: Case Summary & 30 Largest Unsecured Creditors
ALPHA MEDIA: Lenders to Take Ownership; Plan Needs FCC Nod
AMC ENTERTAINMENT: S&P Lowers ICR to 'SD' on Distressed Exchange
ANCELLOTTA LLC: Has Until Feb. 4 to File Plan & Disclosures
ATLANTIC POWER: S&P Puts 'BB-' ICR on Watch Neg. on I Squared Deal
AYRO INC: Alpha Capital Has 2.8% Stake as of Dec. 31
BCPE ULYSSES: Fitch Assigns 'CCC+' LongTerm IDR, Outlook Stable
BDF ACQUISITION: Moody's Ups Term Loan to B2, Alters Outlook to Pos
BETHEL UNIVERSITY: S&P Lowers Revenue Bond Rating to 'BB+'
BIOLASE INC: Adjourns Special Meeting Until February 16
BRACHIUM INC: Case Summary & 20 Largest Unsecured Creditors
BRIDGEWATER HOSPITALITY: Revises Treatment of Secured Creditors
CEC ENTERTAINMENT: Moody's Rates $175MM 2nd Lien Term Loan 'Caa2'
CELLA III: To Seek Plan Confirmation on Feb. 24
CHICAGO BOE: Fitch Assigns BB Rating on $450MM ULTGO 2021A Bonds
CHS/COMMUNITY HEALTH: Fitch Rates Secured Notes Due 2029 'CC'
CITCO ENTERPRISES: SBA Agrees to Use of Cash Collateral Thru July
CLAUDIA JOSEFINA N. FRAUSTO: Onate Offers $165K for Omaha Property
CLEANSPARK INC: Investigating Short Seller Culper Research
CONTURA ENERGY: To Change Name to Alpha Metallurgical Resources
COWBOY CLEANERS: Unsecured Creditors to Recover 10% in 72 Months
DESOTO OWNERS: May Use Cash Collateral Thru March 31
DETROIT, MI: S&P Alters Outlook to Stable on Unlimited-Tax GO Debt
DIS TRANSPORTATION: Hires Doug Zandstra CPA as Accountant
EAGLE HOSPITALITY: Jan. 28 Deadline Set for Panel Questionnaires
ECOARK HOLDINGS: Nepsis Reports 12.27% Stake as of Dec. 31
ENDURANCE INTERNATIONAL: S&P Assigns 'B' ICR; Outlook Stable
FANNIE MAE: Appoints New EVP, Chief Risk Officer
FF FUND: Dennis Hersch Says Franzone Plans Unconfirmable
FF FUND: FCA Says Franzone a Fraudster, Plans Fatally Flawed
FF FUND: SEC Wants Additional Plan Disclosures
FIELDWOOD ENERGY: Davis Polk, Haynes Update List of Secured Lenders
FIRST ADVANTAGE: S&P Raises ICR to 'B' on Deleveraging Refinance
FUELCELL ENERGY: Posts $92.4 Million Net Loss in Fiscal 2020
GANNETT CO: Moody's Assigns B3 CFR, Outlook Stable
GANNETT CO: S&P Assigns 'B-' Issuer Credit Rating; Outlook Stable
GIBSON BRANDS: Buys Amplifier Brand Mesa/Boogie
GIGAMON INC: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
GPS HOSPITALITY: S&P Upgrades ICR to 'B-'; Outlook Stable
GWENDOLYN MARIE WILLIAMS: Serrano Buying Oakland Lot for $181K
H2 BEVERAGES: Unsecured Creditors to Recover 100% Over Time
HERTZ CORP: Authorized to Dispose of Lease Vehicles
HOME POINT: Fitch Hikes LongTerm IDR to B+, Outlook Stable
IDEANOMICS INC: Enters Into $37.5M Convertible Debenture with YA II
INTELSAT SA: Wilmer, Zemanian Represent Noteholder Group
INTERPACE BIOSCIENCES: Enters Into $2 Million Promissory Note
ITT HOLDINGS: S&P Cuts ICR to BB- on RS Ivy Acquisition
JAGUAR HEALTH: Regains Compliance with Nasdaq's Bid Price Rule
JAGUAR HEALTH: Sells $6 Million Secured Note Streeterville Capital
JAMES MICHAEL HAYS: Blomme & Brewer Buying Minden Property for $35K
JUAN L. LARINO: Hersh Horowitz Buying Newark Property for $476K
KEIV HOSPITALITY: Court Conditionally Approves Disclosure Statement
KINSER GROUP: Objections Resolved; Court Confirms Plan
KNOWLTON DEVELOPMENT: S&P Affirms 'B-' Issuer Credit Rating
LBM ACQUISITION: Moody's Lowers CFR to B3, Outlook Stable
LBM ACQUISITION: S&P Alters Outlook to Negative, Affirms 'B' ICR
LECLAIRRYAN PLLC: UnitedLex Fights Back Against Its Claims
LEGENDS HOSPITALITY: Fitch Affirms Final 'B-' LongTerm IDR
LIONHEART LLC: Voluntary Chapter 11 Case Summary
LOVES FURNITURE: Granted Interim Use of Cash Collateral
LUMENTUM HOLDINGS: S&P Retains 'BB-' ICR; Outlook Stable
MARTI'S PLUMBING SERVICE: May Use Cash Collateral
MARYWOOD UNIVERSITY: S&P Alters Revenue Bond Outlook to Stable
MEREDITH CORP: S&P Alters Outlook to Stable, Affirms 'B' ICR
MODA INGLESIDE: Moody's Retains Ba3 CFR Amid Credit Amendment
MOHAJER12 CORP: PNC Bank Says Amended Disclosure Fatally Flawed
MOUNT JOY BAPTIST CHURCH: May Use Cash Collateral Thru Feb. 5
NEWELL MOWING: Seeks Cash Collateral Use
NGL ENERGY: Moody's Cuts CFR to B2 & Alters Outlook to Stable
NGL ENERGY: S&P Raises ICR to 'B' on Refinancing; Outlook Negative
OBALON THERAPEUTICS: Increases Annual Salaries of CEO, CFO to $400K
OBALON THERAPEUTICS: Signs Merger Agreement with ReShape
OPTION CARE: Amends Credit Facility to Borrow Additional $250M
OPTION CARE: S&P Affirms 'B-' ICR, 'B-' First-Lien Term Loan Rating
PACIFICO NATIONAL: May Use Cash Collateral Thru March 10
PEABODY ENERGY: S&P Rates New $206-Mil. Senior Term Loan 'CCC+'
PETCO HOLDINGS: S&P Upgrades ICR to 'B-' on IPO, Debt Reduction
PIKE CORP: S&P Affirms 'B' Rating on Term Loan B on Upsize
PIONEERS MEMORIAL: Fitch Affirms 'BB' IDR, Outlook Stable
POPULUS FINANCIAL: Moody's Withdraws B3 CFR & Caa2 Secured Rating
POWDR CORP: S&P Downgrades ICR to 'B-'; Outlook Negative
RENOVATE AMERICA: Obtains $5 Million Loan Rise as Sale Fight Looms
RENT-A-CENTER INC: S&P Affirms 'BB-' ICR on Proposed Acima Deal
ROBERT F. TAMBONE: Proposes $750K Private Sale of Jupiter Property
ROCHESTER DRUG: Further Fine-Tunes Plan Documents
ROCKET TRANSPORTATION: May Use Cash Collateral Thru Feb. 18
RONNA'S RUFF: Omega Buying 2016 Pitts Log Trailer for $11.75K
RS IVY HOLDCO: S&P Assigns 'BB-' ICR; Outlook Stable
SELIM'S DOENER: Seeks to Use Cash Collateral
SEMILEDS CORP: Receives Noncompliance Notice from Nasdaq
SILVER LAKES: Has Until April 30 to File Plan & Disclosures
SOTERA HEALTH: S&P Affirms 'B+' Senior Secured Debt Rating
SOUTHERN CLEARING & GRINDING: Granted Use of Cash Collateral
SOUTHERN FOODS: Selling Honolulu Property to Twenty Lake for $23.9M
SPI ENERGY: Unit to Collaborate with Icona on E-Vehicle Designs
SUPERIOR ENERGY: 8.5% of New Stock to Be Issued in Rights Offering
TALBOTS INC: S&P Downgrades ICR to 'CCC-'; Outlook Negative
TALCOTT RESOLUTION: Moody's Affirms Ba3 Rating on Sr. Unsec. Debt
TALK VENTURE: Unsecured Creditors Will Recover 1% in Plan
TIMOTHY KYLE: Smith Debnam Represents Hanmi Bank, Riegelwood
TOTAL BODY: Unsecureds to Be Paid Monthly in Subchapter V Plan
TUMBLEWEED TINY HOUSE: Court Approves Disclosure Statement
UFC HOLDINGS: S&P Rates New $2.453BB First-Lien Term Loan 'B'
US REAL ESTATE EQUITY: May Use Cash Collateral Thru Jan. 31
VINE OIL: S&P Raises ICR to 'CCC+'; Outlook Negative
VOLUSION LLC: eCommerce Platform Exits Bankruptcy
VTES INC: Unsecured Creditors to Get Payout in Harman Sale Plan
VTV THERAPEUTICS: Unit Signs 1st Amendment to Huadong License Deal
WC 4TH AND COLORADO: Lender Says Plan Disclosures Inadequate
WC CUSTER CREEK: Seeks Use of Spring Custer Cash Collateral
WEEKLEY HOMES: Moody's Hikes CFR to Ba3 on Continued Improvement
WF GRACE CONSTRUCTION: May Use Cash Collateral Thru April 30
WHOLE EARTH: Moody's Assigns First Time 'B2' Corp. Family Rating
WHOLE EARTH: S&P Assigns 'B' ICR; Outlook Positive
YRC WORLDWIDE: Appoints Two New Directors
YUNHONG CTI: Bret Tayne Quits as Director
ZEKELMAN INDUSTRIES: S&P Affirms 'BB-' ICR
ZENERGY BRANDS: Court Confirms Plan of Liquidation
[*] New Year Brings Surge in U.S. Corporate Bankruptcies
[^] Large Companies with Insolvent Balance Sheet
*********
203 W 107 STREET: KHGF Represents NY Building Tenants
-----------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Kellner Herlihy Getty & Friedman, LLP, submitted a
verified statement to disclose that it is representing the Ad Hoc
Group of West 107th Street Tenants in the Chapter 11 cases of 203 W
107 Street LLC et al.
In January 2021, the Ad Hoc Group was formed. Many members of the
Ad Hoc Group had been participating in a rent strike against the
Debtors and had retained Kellner Herlihy Getty & Friedman, LLP to
represent them in a series of code compliance proceedings against
the Debtors. KHGF agreed to represent those tenants who had been
participating in the rent strike with the Debtors' chapter 11 case.
Other members of the Ad Hoc Group retained KHGF separately to
represent them with the Debtors' chapter 11 case.
The members of the Ad Hoc Group hold claims against the Debtors'
estates.
The Ad Hoc Group members are as follows:
* Julia Quintana, who resides at 203 West 107th Street, Apt
1C, New York NY 10025.
* Jeff Dobbs, who resides at 203 West 107th Street, Apt 2A,
New York NY 10025.
* John O'Grady, who resides at 203 West 107th Street, Apt 2B,
New York NY 10025.
* Jhona Huntington, who resides at 203 West 107th Street, Apt
2C, New York NY 10025.
* Teresa Richards, who resides at 203 West 107th Street, Apt
2C, New York NY 10025.
* Avra Matsoukas, who resides at 203 West 107th Street, Apt
3B, New York NY 10025.
* Philip Feil, who resides at 203 West 107th Street, Apt 3C,
New York NY 10025.
* Judith Greentree, who resides at 203 West 107th Street, Apt
4A, New York NY 10025.
* Kelly Irwin, who resides at 203 West 107th Street, Apt 4C,
New York NY 10025.
* Edward Marritz, who resides at 203 West 107th Street, Apt
5A, New York NY 10025.
* Leslie Jaye Goff, who resides at 203 West 107th Street, Apt
5B, New York NY 10025.
* Katherine Marcus, who resides at 203 West 107th Street, Apt
6A, New York NY 10025.
* Irma Laguerre, who resides at 203 West 107th Street, Apt
6B, New York NY 10025.
* Uday K. Dhar, who resides at 203 West 107th Street, Apt 6C,
New York NY 10025.
* Ulrich Becker, who resides at 203 West 107th Street, Apt
6C, New York NY 10025.
* Barbra Friedland, who resides at 203 West 107th Street, Apt
7A, New York NY 10025.
* Josiah Gluck, who resides at 203 West 107th Street, Apt 7A,
New York NY 10025.
* Suzzan Craig, who resides at 203 West 107th Street, Apt 7B,
New York NY 10025.
* Ronald Saleh, who resides at 203 West 107th Street, Apt 9B,
New York NY 10025.
* Tony Rubey, who resides at 203 West 107th Street, Apt 9C,
New York NY 10025.
* Emily Figueroa, who resides at 210 West 107th Street, Apt
1C, New York NY 10025.
* Nancy Lange, who resides at 210 West 107th Street, Apt 1F,
New York NY 10025.
* Joshua Raskin, who resides at 210 West 107th Street, Apt
2I, New York NY 10025.
* Karen Dugan, who resides at 210 West 107th Street, Apt 2I,
New York NY 10025.
* Kathryn Frey, who resides at 210 West 107th Street, Apt 3H,
New York NY 10025.
* Walter Cline, who resides at 210 West 107th Street, Apt 4C,
New York NY 10025.
* James Rush, who resides at 210 West 107th Street, Apt 4C,
New York NY 10025.
* Rosa Arenas, who resides at 210 West 107th Street, Apt 5A,
New York NY 10025.
* Nora Valencia, who resides at 210 West 107th Street, Apt
5D, New York NY 10025.
* Patricia Tompkins, who resides at 210 West 107th Street,
Apt 5I, New York NY 10025.
* Anna Smith, who resides at 210 West 107th Street, Apt 6E,
New York NY 10025.
* Alyssa Goodpaster, who resided at 220 West 107th Street,
Apt 1B, New York NY 10025.
* Howard Kaye, who resides at 220 West 107th Street, Apt 1D,
New York NY 10025.
* Mark Mravic, who resided at 220 West 107th Street, Apt 2B,
New York NY 10025.
* Amanda Levine, who resides at 220 West 107th Street, Apt
2I, New York NY 10025.
* Andrew Goltz, who resides at 220 West 107th Street, Apt 3A,
New York NY 10025.
* Carole Rosen, who resides at 220 West 107th Street, Apt 3B,
New York NY 10025.
* Nobuhiro Arai, who resided at 220 West 107th Street, Apt
4A, New York NY 10025.
* Samantha Huff, who resided at 220 West 107th Street, Apt
4A, New York NY 10025.
* Ben Devar, who resides at 220 West 107th Street, Apt 4A,
New York NY 10025.
* Ellen Davis, who resides at 220 West 107th Street, Apt 4A,
New York NY 10025.
* Tom Pham, who resides at 220 West 107th Street, Apt 4A, New
York NY 10025.
* Mirinda Morency, who resides at 220 West 107th Street, Apt
4A, New York NY 10025.
* Francis Potash, who resides at 220 West 107th Street, Apt
4E, New York NY 10025.
* George Schirmann, who resides at 220 West 107th Street, Apt
4I, New York NY 10025.
* Angela Pistilli, who resides at 220 West 107th Street, Apt
4D, New York NY 10025.
* Howard Stoddard, who resides at 220 West 107th Street, Apt
5E, New York NY 10025.
* Ann Gollin, who resides at 220 West 107th Street, Apt 5F,
New York NY 10025.
* Diane Zinn, who resides at 220 West 107th Street, Apt 6H,
New York NY 10025.
* Jose Alfonso, who resides at 230 West 107th Street, Apt 1D,
New York NY 10025.
* Beverly Shenkman, who resides at 230 West 107th Street, Apt
1E, New York NY 10025.
* Francis Allarey, who resides at 230 West 107th Street, Apt
1H, New York NY 10025.
* Arthur Noguera, who resides at 230 West 107th Street, Apt
1H, New York NY 10025.
* Marlaine Wade, who resides at 230 West 107th Street, Apt
2B, New York NY 10025.
* Gerard Caracciolo, who resides at 230 West 107th Street,
Apt 2E, New York NY 10025.
* Kelly Burchill, who resides at 230 West 107th Street, Apt
2E, New York NY 10025.
* Paul Casale, who resides at 230 West 107th Street, Apt 3J,
New York NY 10025.
* Marie Grace Williams, who resides at 230 West 107th Street,
Apt 4A, New York NY 10025.
* Luz Laureano, who resides at 230 West 107th Street, Apt 4I,
New York NY 10025.
* Mark Setlock, who resides at 230 West 107th Street, Apt 4J,
New York NY 10025.
* David Johnston, who resides at 230 West 107th Street, Apt
4K, New York NY 10025.
* Margaret Wargo, who resides at 230 West 107th Street, Apt
5F, New York NY 10025.
* Jill Cooper, who resides at 230 West 107th Street, Apt 6B,
New York NY 10025.
* Rena Miller Deveza, who resides at 230 West 107th Street,
Apt 6F, New York NY 10025.
* Sally Wilfert, who resides at 230 West 107th Street, Apt
6G, New York NY 10025.
As of Jan. 24, 2021, members of the Ad Hoc Group and their
disclosable economic interests are:
Julia Quintana
203 West 107th Street, Apt 1C
New York NY 10025
* The unsecured claim in the amount of her security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Jeff Dobbs
203 West 107th Street, Apt 1C
New York NY 10025
* The unsecured claim in the amount of her security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
John O'Grady
203 West 107th Street, Apt 2B
New York NY 10025
* The unsecured claim in the amount of her security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Jhona Huntington
203 West 107th Street, Apt 2C
New York NY 10025
* The unsecured claim in the amount of her security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Teresa Richards
203 West 107th Street, Apt 2C
New York NY 10025
* The unsecured claim in the amount of her security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Avra Matsoukas
203 West 107th Street, Apt 3B
New York NY 10025.
* The unsecured claim in the amount of her security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Philip Feil
203 West 107th Street, Apt 3C
New York NY 10025
* The unsecured claim in the amount of his security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Judith Greentree
203 West 107th Street, Apt 4A
New York NY 10025
* The unsecured claim in the amount of his security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Kelly Irwin
203 West 107th Street, Apt 4C
New York NY 10025
* The unsecured claim in the amount of his security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Edward Marritz
203 West 107th Street, Apt 5A
New York NY 10025
* The unsecured claim in the amount of his security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Leslie Jaye Goff
203 West 107th Street, Apt 5B
New York NY 10025
* The unsecured claim in the amount of his security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Katherine Marcus
203 West 107th Street, Apt 6A
New York NY 10025
* The unsecured claim in the amount of his security deposit and
rent abatement for the Debtors' breach of the warranty of
habitability.
Nothing contained in this Statement should be construed as a
limitation upon, or waiver, of any Ad Hoc Group member's right to
assert, file, and/or amend its claim(s) in accordance with
applicable law and any orders entered in these cases establishing
procedures for filing proofs of claim.
The Ad Hoc Group reserves the right to amend and/or supplement this
Verified Statement in accordance with Bankruptcy Rule 2019.
Counsel for the Ad Hoc Group of West 107th Street Tenants can be
reached at:
KELLNER HERLIHY GETTY & FRIEDMAN, LLP
Douglas A. Kellner, Esq.
470 Park Avenue South, 7th Floor
New York, NY 10016-6819
Telephone: (212) 889-2121
Email: dak@khgflaw.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/39bdrbg
About 203 W 107 Street LLC
203 W 107 Street LLC, and 10 other entities affiliated with Emerald
Equity Group sought Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 20-12960) on Dec. 28, 2020.
The Debtors are Single Asset Real Estate entities that each owns a
residential-building property in Manhattan. They own multi-family
residential buildings on 107th Street and 117th Streets in
Manhattan. 203 W 107 Street LLC, 210 W 107 Street LLC, 220 W 107
Street LLC and 230 W 107 Street LLC -- collectively, the "107th
Street Debtors" -- own the properties at 107th Street, New York.
124-136 East 117 LLC, 215 East 117 LLC, 231 East 117 LLC, 235 East
117 LLC, 244 East 117 LLC, East 117 Realty LLC and 1661 PA Realty
LLC -- collectively, the "117 Street Debtors" -- own the properties
at 117th Street. Currently, there are several hundred tenants
residing in the Properties.
203 W 107 Street disclosed total assets of $7,044,031 against
$102,929,476 in liabilities. 210 W 107 Street disclosed total
assets of $13,607,479 against liabilities of $103,053,340. 220 W
107th Street disclosed total assets of $15,413,641 against debt of
$103,046,384.
The petitions were signed by CRO Ephraim Diamond.
Emerald retained Arbel Capital Advisors LLC and Ephraim Diamond,
its managing member, to assist Emerald and the Debtors in complying
with their obligations under the Restructuring Support Agreement
with LoanCore.
Backenroth Frankel & Krinsky, LLP, led by Mark Frankel, Esq., is
serving as counsel to the Debtors.
37 CALUMET: May Use Cash Collateral Thru March 22
-------------------------------------------------
Judge Frank J. Bailey of the U.S. Bankruptcy Court for the District
of Massachusetts has authorized 37 Calumet Street LLC to use cash
collateral on an interim basis through March 31, 2021.
On or before 4:30 p.m. on March 22, 2021, the Debtor will file a
further Motion for Use of Cash Collateral and the Court will hold a
hearing on March 30 at 11:00 a.m. Objections will due March 29 at
12 noon.
Creditor Bridge Loan Venture V QV Trust 2019-2 has no objection to
the use of its collateral.
A copy of the Proceeding Memorandum and Order is available at
https://bit.ly/3sNfutV from PacerMonitor.com.
About 37 Calumet Street LLC
37 Calumet Street LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No.
20-12253) on Nov. 19, 2020. The petition was signed by Patricia
Hounsell, its manager. At the time of the filing, the Debtor
disclosed $1 million to $10 million in both assets and liabilities.
Judge Frank J. Bailey oversees the case. Gary W. Cruickshank,
Esq., serves as the Debtor's counsel.
85 FLATBUSH RHO MEZZ: May Use Cash Collateral Thru Feb. 5
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York has
authorized 85 Flatbrush RHO Mezz LLC and its debtor-affiliates to
use cash collateral on an interim basis generated from the
operations of Debtors 85 Flatbush RHO Hotel LLC and 85 Flatbush RHO
Residential LLC.
The Debtors are authorized to grant adequate protection to 85
Flatbush Avenue 1 LLC as lender.
The Debtors are permitted to use cash collateral in the ordinary
course of business to pay the reasonable and necessary operating
expenses of The Tillary Hotel Brooklyn in general accordance with
the Budget. The Hotel may exceed any line-item in the Budget and
make expenditures not on the Budget for ordinary course of business
expenses that it deems to be appropriate in its business judgment
as necessary to operate the business and maintain the Hotel and the
Hotel Debtor's property, provided that the cumulative additional
expenditures do not exceed 10% of the total monthly budget without
the Lender's consent or further Court order.
As adequate protection for the Hotel Debtor's use of Cash
Collateral, the Hotel Debtor will (a) maintain the value of the
Property though payment of the normal monthly expenditures in
general accord with the Budget, (b) maintain the cash it collects
over and above its expenditures in its debtor-in-possession account
pending further order of the Court,(c) provide that all liens and
security interests of the Lender, if any, in the Cash Collateral
used and consumed pursuant to the Order will constitute a claim,
secured by a lien in all of the prepetition and post-petition
assets of the Hotel Debtor in the same order of priority as existed
prior to the Petition Date to the extent of any diminution in the
level of Cash Collateral as it existed as of the Petition Date,
provided however that the Adequate Protection Lien will at all
times be subordinate to (i) professional fees and reimbursement of
expenses that may be awarded pursuant to 11 U.S.C. sections 330 and
331 to professionals retained by the Hotel Debtor, (ii) any
professionals employed by committees in the case and retained by
order of the Court, and (iii) quarterly fees of the United States
Trustee.
A final hearing to consider the Debtors' use of Cash Collateral
will be held, telephonically, on February 5, 2021 at 10:00 a.m.
A copy of the order and the Debtors' 13-week budget through March
2021 is available at https://bit.ly/3sRCwj6 from PacerMonitor.com.
About 85 Flatbush RHO Mezz LLC
85 Flatbush RHO Mezz LLC is the 100% owner of 85 Flatbush RHO Hotel
LLC and 85 Flatbush RHO Residential LLC. Hotel and Residential
collectively own the property located at 85 Flatbush Extension,
Brooklyn, New York. The Property is a 132,641 square foot,
12-story, mixed use property consisting of a 174-room boutique
hotel on the first 6 floors known as the Tillary Hotel Brooklyn, a
58,652-square foot 64-unit luxury multi-family building and a
5,642-square foot parking garage. The residential component of the
Property has nine studios, 26 one-bedroom units and 29 two-bedroom
units.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-23280) on December 18,
2020. In the petitions signed by David Goldwasser, chief
restructuring officer, the Debtor disclosed around $50 million to
$100 million in both assets and liabilities.
Judge Robert D. Drain oversees the case.
Fred B. Ringel, Esq., at Robinson Brog Leinwand Greene Genovese &
Gluck P.C. represents the Debtors as counsel.
ADAMIS PHARMACEUTICALS: Submits Tempol IND for COVID-19 Treatment
-----------------------------------------------------------------
Adamis Pharmaceuticals Corporation has submitted an Investigational
New Drug (IND) to FDA for the investigational use of Tempol for the
treatment of Coronavirus (COVID-19). The submission of the IND to
FDA followed a Pre-IND meeting with FDA in which FDA gave specific
recommendations on Chemistry, Manufacturing and Controls (CMC) and
Clinical aspects to be included in the IND. The Company plans to
seek government and/or non-government funding to study the
treatment and prevention of COVID-19 with Tempol.
Tempol has demonstrated both potent anti-inflammatory,
anticoagulant, and antioxidant activity. Both inflammatory
cytokines and reactive oxygen species (ROS) from cells of the
immune system called macrophages and neutrophils damage the lung in
Acute Respiratory Distress Syndrome (ARDS). In animal models,
Tempol has been shown to decrease proinflammatory cytokines
(cytokine storm), and through its potent antioxidant activity has
been shown to decrease the harmful effects of ROS. In addition,
Tempol has been shown to decrease platelet aggregation, a problem
observed in many COVID-19 patients. Numerous published articles
describing animal models of ARDS show Tempol to cause a decrease in
lung inflammation and preserve lung pathology associated with acute
and chronic lung injury. To this end, Tempol has been shown to
decrease the genes (HIF-la and HIF-2a) associated with hypoxia.
Hypoxia is a key indicator often associated with severe disease and
a poor outcome. Controlling hypoxia and the cytokine storm can be
considered essential to the successful treatment of COVID-19.
Dr. Dennis J. Carlo, president and CEO of Adamis commented: "With
over 23 million COVID-19 infections in the US and over 394,000
deaths in the US (according to the CDC), additional treatments are
urgently warranted. We believe that Tempol could play a pivotal
role not only in the treatment of COVID-19, but actually in
preventing hospitalization. With new mutations occurring in the
virus, it is apparent there is an ongoing need for new therapies.
The South African and other variants could very well evade the
protection of antibody treatments and also bring up concerns about
the efficacy of the current COVID-19 vaccines. Mutations can
possibly render these vaccines less potent and could require them
to be updated as with influenza vaccines."
About Adamis Pharmaceuticals
Adamis Pharmaceuticals Corporation --
http://www.adamispharmaceuticals.com-- is a specialty
biopharmaceutical company primarily focused on developing and
commercializing products in various therapeutic areas, including
respiratory disease, allergy and opioid overdose. The company's
SYMJEPI (epinephrine) Injection 0.3mg and SYMJEPI (epinephrine)
Injection 0.15mg products were approved by the FDA for use in the
emergency treatment of acute allergic reactions, including
anaphylaxis.
Adamis reported a net loss of $29.31 million for the year ended
Dec. 31, 2019, compared to a net loss of $39 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had $43.91
million in total assets, $16.52 million in total liabilities, and
$27.39 million in total stockholders' equity.
Mayer Hoffman McCann P.C., in San Diego, California, the Company's
auditor since 2007, issued a "going concern" qualification in its
report dated March 30, 2020 citing that the Company has incurred
recurring losses from operations and is dependent on additional
financing to fund operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
ADVANCED INTEGRATION: S&P Downgrades ICR to 'B-'; Outlook Stable
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Advanced
Integration Technology L.P. (AIT) to 'B-' from 'B'. At the same
time, S&P lowered its issue-level rating on the company's
first-lien debt to 'B-' from 'B'. S&P's '3' recovery rating is
unchanged.
The stable outlook reflects S&P's expectation that the leverage
will remain high until at least 2022.
S&P said, "The downgrade reflects our belief that AIT's leverage
will remain high through 2021. The impact of the pandemic on
commercial aircraft demand has caused manufacturers and suppliers
to lower capital expenditures reducing demand for AIT's provides
process improvement services and related tooling. While overall
defense demand has not been affected, the pandemic has led to
delayed orders and much lower than we expected defense revenues in
2020 and likely continuing into 2021. With the commercial aerospace
market unlikely to rebound for multiple years, revenues are
unlikely to rise to previous expectations. As a result of likely
weaker earnings, we expect AIT's debt to EBITDA to be near 10x in
2020 and 7x-7.5x in 2021."
AIT amended its revolving credit facility in December 2020,
improving liquidity. The company amended its revolving credit
facility to extend the maturity to January 2023 from April 2021 and
reduce the size to $40 million from $60 million. The maturity
extension relieves issues regarding the company's liquidity, with
no debt maturities until 2023. While the revolver is now smaller,
S&P doesn't expect the company to need to draw on it as it is
likely to generate modest free cash flow in 2021.
Environmental, social, and governance (ESG) credit factors for this
credit rating change
-- Health and safety
S&P said, "The stable outlook on AIT reflects our expectation that
its debt to EBITDA will remain high through 2021, but it will
maintain positive cash inflows. AIT's credit metrics should
gradually improve with growing defense revenues and a slow recovery
in commercial sales. We expect debt to EBITDA to be near 10x in
2020, and improve to 7x-7.5x in 2021."
Downside scenario
S&P could lower its rating on AIT in the next 12 months if leverage
rises to an unsustainable level and it doesn't expect it to improve
or if liquidity becomes a near-term concern. This could occur if:
-- The commercial aerospace market is even weaker than expected
and commercial OEMs and suppliers continue to cut back on internal
improvements;
-- The pandemic results in an unexpected negative impact to the
defense segment due to contract delays or supply chain issues;
-- The company suffers from operational issues that result in
lower earnings; or
-- Free cash flow is negative constraining liquidity.
Upside scenario
Although unlikely in the next 12 months, S&P could raise the rating
if debt to EBITDA decreases below 7x and S&P expects it to remain
there, and the company is able to maintain at least break-even free
cash flow. This could occur if:
-- The commercial aerospace market rebounds faster than expected,
resulting in higher demand for the company's services; or
-- Defense revenues increase more than S&P expects due to new
contract awards and increased profits due to recent cost
reductions.
ADVAXIS INC: Incurs $26.5 Million Net Loss in Fiscal 2020
---------------------------------------------------------
Advaxis, Inc. filed with the Securities and Exchange Commission its
Annual Report on Form 10-K disclosing a net loss of $26.47 million
on $253,000 of revenue for the year ended Oct. 31, 2020, compared
to a net loss of $16.61 million on $20.88 million of revenue for
the year ended Oct. 31, 2019.
As of Oct. 31, 2020, the Company had $38.53 million in total
assets, $8.35 million in total liabilities, and $30.18 million in
total stockholders' equity.
Advaxis said, "The Company has not yet commercialized any human
products and the products that are being developed have not
generated significant revenue. As a result, the Company has
suffered recurring losses and requires significant cash resources
to execute its business plans. These losses are expected to
continue for an extended period of time. The aforementioned
factors raise substantial doubt about the Company's ability to
continue as a going concern.
Historically, the Company's major sources of cash have been
comprised of proceeds from various public and private offerings of
its common stock, debt financings, clinical collaborations, option
and warrant exercises, income earned on investments and grants and
interest income. From October 2013 through October 2020, the
Company raised approximately $309.4 million in gross proceeds
($17.2 million in fiscal year 2020) from various public and private
offerings of its common stock.
As of Oct. 31, 2020, the Company had approximately $25.2 million in
cash and cash equivalents. Although the Company expects to have
sufficient capital to fund its obligations, as they become due, in
the ordinary course of business until at least January 2022, the
actual amount of cash that it will need to operate is subject to
many factors. Over the past several months, the Company has taken
steps to obtain additional financing, including the at-the-market
program and the equity line with Lincoln Park Capital. Due to the
current state of the Company's stock price and general market
conditions, these programs have not been utilized to the fullest
extent, thereby resulting in lower capital availability than
anticipated. Management's plans to mitigate an expected shortfall
of capital and to support future operations include obtaining
additional funds through partnerships or strategic or financing
investors. The Company was able to raise additional funds
subsequent to year end. The Company has reduced its operating
expenses to $26.7 million for the fiscal year ended Oct. 31, 2020
as compared to $38.9 million during the comparable prior period.
With these funds raised and a reduction in the operating expenses
the Company believes that it has enough cash to fund its operations
for one year from the date of filing. Therefore, the Company said,
such conditions of substantial doubt as of Oct. 31, 2020 have
subsequently been alleviated.
The Company recognizes it will need to raise additional capital in
order to continue to execute its business plan in the future.
There is no assurance that additional financing will be available
when needed or that management will be able to obtain financing on
terms acceptable to the Company or whether the Company will become
profitable and generate positive operating cash flow. If the
Company is unable to raise sufficient additional funds, it will
have to further scale back its operations.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1100397/000149315221001656/form10-k.htm
About Advaxis Inc.
Advaxis, Inc. -- http://www.advaxis.com-- is a clinical-stage
biotechnology company focused on the development and
commercialization of proprietary Lm-based antigen delivery
products. These immunotherapies are based on a platform technology
that utilizes live attenuated Listeria monocytogenes (Lm)
bioengineered to secrete antigen/adjuvant fusion proteins.
TheseLm-based strains are believed to be a significant advancement
in immunotherapy as they integrate multiple functions into a single
immunotherapy and are designed to access and direct antigen
presenting cells to stimulate anti-tumor T cell immunity, activate
the immune system with the equivalent of multiple adjuvants, and
simultaneously reduce tumor protection in the tumor
microenvironment to enable T cells to eliminate tumors.
ALEXANDER D. LEE: Bakers Buying Breckenridge Property for $950K
---------------------------------------------------------------
Alexander Dong Lee asks the U.S. Bankruptcy Court for the Southern
District of Florida to authorize the sale of the real property he
co-owns with Deanne Lee located at 42 Snowflake Drive, Unit 410, in
Breckenridge, Colorado. to Justin Baker and Brian Baker for
$950,000.
The Debtor is a physician and works in an emergency practice of
which he is a minority owner. He is also the owner of several
entities which operate restaurants that are suffering due to the
COVID-19 virus. Some of the restaurants have closed but several
remain operating such as: Crazy Blue Box, Inc., Crazy Goby and
Blind Shrimp, LLC, El Loco Sakana, Inc., Crazy Lion Fish, Inc.,
Crazy Mako Management, Inc., Crazy Blue Fish House, LLC, and Crazy
White Sharks, Inc.
On Jan. 7, 2021, the Debtor and Co-Owner Deanne Lee entered into a
Contract to Buy and Sell Real Estate for the sale of the Property
to the Buyers for $950,000. A $20,000 deposit has been paid and
the Contract is due to close on March 9, 2021.
The 2020 tax appraised value of the Property is $797,640 and the
Property was purchased on Oct. 11, 2018, for $878,000.
The sale is an arms'-length transaction.
On Jan. 4, 2021, the Debtor filed the Debtor's Motion to Approve
Listing Agreement For 42 Snowflake Drive, Unit 410 Breckenridge, CO
80424. The Listing Agreement Motion has not yet been heard by the
Court.
The Listing Agreement Motion asks approval of an Exclusive Right of
Sale Listing Agreement with LIV Sotheby's International Realty to
sell the Property and provides for a 6% commission to be paid to
the Realtor at closing. It further provides that in the event a
cooperating broker is used in connection with the sale, the Realtor
will offer compensation to cooperating broker as follows: Buyers'
agents 3% of the selling price; and transaction-brokers 3% of the
selling price.
The Debtor asks approval and authorization from the Court to
proceed with the sale free and clear of any liens, claims,
interests, encumbrances, with any such liens, claims and
encumbrances to attach to the proceeds of sale. He asks approval
to pay all necessary and customary closing costs in connection with
the sale and to pay the brokers' commissions described and in the
Listing Agreement Motion.
Great Midwestern Bank is the holder of a first mortgage on the
Property. The Debtor has listed a scheduled claim at $305,218 for
the outstanding amount due on the first mortgage.
The Debtor asks authorization to satisfy the outstanding balance
owed to Great Midwestern Bank from the sale proceeds at closing,
along with the broker's commission due pursuant to the Listing
Agreement Motion and all other reasonable, necessary and customary
closing costs.
Subject to the terms and conditions of the sale, the Debtor in the
sound exercise of its business judgment has concluded that
consummation of the sale of the Property to the proposed buyer will
best maximize the value of the estate for the benefit of creditors.
A copy of the Contract is available at https://bit.ly/3p6Lhni from
PacerMonitor.com free of charge.
Alexander Dong Lee sought Chapter 11 protection (Bankr. S.D. Fla.
Case No. 20-21594) on Oct. 23, 2020. The Debtor tapped Robert
Furr, Esq., as counsel.
ALEXANDER D. LEE: Lamb Buying Lighthouse Point Property for $3.3M
-----------------------------------------------------------------
Alexander Dong Lee asks the U.S. Bankruptcy Court for the Southern
District of Florida to authorize the sale of the real property
located at 2420 NE 33rd Street, in Lighthouse Point, Broward
County, Florida, to John Graham Lamb for $3.3 million.
The Debtor is a physician and works in an emergency practice of
which he is a minority owner. He is also the owner of several
entities which operate restaurants that are suffering due to the
COVID-19 virus. Some of the restaurants have closed but several
remain operating such as: Crazy Blue Box, Inc., Crazy Goby and
Blind Shrimp, LLC, El Loco Sakana, Inc., Crazy Lion Fish, Inc.,
Crazy Mako Management, Inc., Crazy Blue Fish House, LLC, and Crazy
White Sharks, Inc.
On Jan. 7, 2021, the Debtor entered into an "AS IS" Residential
Contract for Sale and Purchase for the sale of the Property to the
Buyer for $3.3 million. A $25,000 deposit has been paid and the
Contract is due to close on March 23, 2021.
The 2021 tax appraised value of the Property is $2,829,950 and the
Property was purchased on Dec. 16, 2004, for $2,995,000.
The sale is an arms'-length transaction.
On Jan. 4, 2021, the Debtor filed the Debtor's Motion to Approve
Listing Agreement For 2420 NE 33rd Street, Lighthouse Point, FL
33064. The Listing Agreement Motion has not yet been heard by the
Court.
The Listing Agreement Motion asks approval of an Exclusive Right of
Sale Listing Agreement with Keller Williams Realty Professionals to
sell the Property and provides for a 6% commission to be paid to
the Realtor at closing. It further provides that in the event a
cooperating broker is used in connection with the sale, the Realtor
will offer compensation to cooperating broker as follows: the
Buyer's agents 3% of the selling price; and transaction - brokers
3% of the selling price. However, in the event Cathy and Jack
Prenner of Bryant Roepnack bring the buyer to the transaction, the
commission will be 4.5%.
The Debtor asks approval and authorization from the Court to
proceed with the sale free and clear of any liens, claims,
interests, encumbrances, with any such liens, claims and
encumbrances to attach to the proceeds of sale. He asks approval
to pay all necessary and customary closing costs in connection with
the sale and to pay the brokers' commissions described and in the
Listing Agreement Motion.
Chase Bank is the holder of a first mortgage on the Property.
Proof of Claim No. 37-1 was filed by the lender in the amount of
$619,104 for the outstanding amount due on the first mortgage.
First United Bank holds a second mortgage on the Property. Proof of
Claim No. 46-1 was filed by the lender in the amount of $1,864,444
for the outstanding amount due on the second mortgage.
Broward County Tax Collector filed Proof of Claim No. 15-1 for 2020
property taxes owed in the amount of $35,997.
The Debtor asks authorization to satisfy the outstanding balances
owed to Chase Bank, First United Bank, and Broward Tax Collector
from the sale proceeds at closing, along with the broker's
commission due pursuant to the Listing Agreement Motion and all
other reasonable, necessary and customary closing costs. The
remaining net sale proceeds will be placed in Furr and Cohen, P.A.
Trust account as homestead proceeds.
Subject to the terms and conditions of the sale, the Debtor in the
sound exercise of its business judgment has concluded that
consummation of the sale of the Property to the proposed buyer will
best maximize the value of the estate for the benefit of creditors.
A copy of the Contract is available at https://bit.ly/39Ra4oW from
PacerMonitor.com free of charge.
The Purchaser:
John Graham Lamb
105 Skyline Drive
Moreland Hills, OH 44022
Alexander Dong Lee sought Chapter 11 protection (Bankr. S.D. Fla.
Case No. 20-21594) on Oct. 23, 2020. The Debtor tapped Robert
Furr, Esq., as counsel.
ALEXANDER D. LEE: Selling Breckenridge Condo Unit 518 for $1.36M
----------------------------------------------------------------
Alexander Dong Lee asks the U.S. Bankruptcy Court for the Southern
District of Florida to authorize the sale of the real property he
co-owns with Deanne Lee located at 42 Snowflake Drive, Unit 518,
Bluesky Breckenridge Condo, in Breckenridge, Colorado, to Nicholas
B. Bruggeman and Lisa A. Bruggeman for $1,362,500.
The Debtor is a physician and works in an emergency practice of
which he is a minority owner. He is also the owner of several
entities which operate restaurants that are suffering due to the
COVID-19 virus. Some of the restaurants have closed but several
remain operating such as: Crazy Blue Box, Inc., Crazy Goby and
Blind Shrimp, LLC, El Loco Sakana, Inc., Crazy Lion Fish, Inc.,
Crazy Mako Management, Inc., Crazy Blue Fish House, LLC, and Crazy
White Sharks, Inc.
On Jan. 7, 2021, the Debtor and Co-Owner Deanne Lee entered into a
Contract to Buy and Sell Real Estate for the sale of the Property
to the Buyers for $1,362,500. A $20,000 deposit has been paid and
the Contract is due to close on Feb. 8, 2021.
The 2020 tax appraised value of the Property is $1,287,162 and the
Property was purchased on Feb. 20, 2019 for $1.2 million.
The sale is an arms'-length transaction.
On Jan. 4, 2021, the Debtor filed the Debtor's Motion to Approve
Listing Agreement For 42 Snowflake Drive, Unit 518 Breckenridge, CO
8042. The Listing Agreement Motion has not yet been heard by the
Court.
The Listing Agreement Motion asks approval of an Exclusive Right of
Sale Listing Agreement with LIV Sotheby's International Realty to
sell the Property and provides for a 6% commission to be paid to
the Realtor at closing. It further provides that in the event a
cooperating broker is used in connection with the sale, the Realtor
will offer compensation to cooperating broker as follows: Buyers'
agents 3% of the selling price; and transaction-brokers 3% of the
selling price.
The Debtor asks approval and authorization from the Court to
proceed with the sale free and clear of any liens, claims,
interests, encumbrances, with any such liens, claims and
encumbrances to attach to the proceeds of sale. He asks approval
to pay all necessary and customary closing costs in connection with
the sale and to pay the brokers' commissions described and in the
Listing Agreement Motion.
Great Midwestern Bank is the holder of a first mortgage on the
Property. The Debtor has listed a scheduled claim at $683,818 for
the outstanding amount due on the first mortgage.
The Debtor asks authorization to satisfy the outstanding balance
owed to Great Midwestern Bank from the sale proceeds at closing,
along with the broker's commission due pursuant to the Listing
Agreement Motion and all other reasonable, necessary and customary
closing costs.
Subject to the terms and conditions of the sale, the Debtor in the
sound exercise of its business judgment has concluded that
consummation of the sale of the Property to the proposed buyer will
best maximize the value of the estate for the benefit of creditors.
A copy of the Contract is available at https://bit.ly/35XNjOV from
PacerMonitor.com free of charge.
Alexander Dong Lee sought Chapter 11 protection (Bankr. S.D. Fla.
Case No. 20-21594) on Oct. 23, 2020. The Debtor tapped Robert
Furr, Esq., as counsel.
ALEXANDER D. LEE: Skurchaks Buying Breckenridge Property for $725K
------------------------------------------------------------------
Alexander Dong Lee asks the U.S. Bankruptcy Court for the Southern
District of Florida to authorize the sale of the real property he
co-owns with Deanne Lee located at 465 Four O'Clock Road, Building
A303, in Breckenridge, Colorado, to James Skurchak and Noelle
Skurchak for $725,000.
The Debtor is a physician and works in an emergency practice of
which he is a minority owner. He is also the owner of several
entities which operate restaurants that are suffering due to the
COVID-19 virus. Some of the restaurants have closed but several
remain operating such as: Crazy Blue Box, Inc., Crazy Goby and
Blind Shrimp, LLC, El Loco Sakana, Inc., Crazy Lion Fish, Inc.,
Crazy Mako Management, Inc., Crazy Blue Fish House, LLC, and Crazy
White Sharks, Inc.
On Jan. 11, 2021, the Debtor and Co-Owner Deanne Lee entered into a
Contract to Buy and Sell Real Estate for the sale of the Property
to the Buyers for $725,000. A $7,000 deposit has been paid and the
Contract is due to close on March 1, 2021.
The 2020 tax appraised value of the Property is $585,227 and the
Property was purchased in Aug. 28, 2019 for $620.000. The sale is
an arms'-length transaction.
On Jan. 4, 2021, the Debtor filed the Debtor's Motion to Approve
Listing Contract For 465 Four O'Clock Road, Building A, Unit 303,
Breckenridge, CO 80424. The Listing Agreement Motion has not yet
been heard by the Court. The Listing Agreement Motion asks
approval of an Exclusive Right-to-Sell Listing Contract with LIV
Sotheby's International Realty to sell the Property and provides
for a 6% commission to be paid to the Realtor at closing. It
further provides that in the event a cooperating broker is used in
connection with the sale, the Realtor will offer compensation to
cooperating broker as follows: The Buyers' agents 3% of the selling
price; and transaction-brokers 3% of the selling price.
The Debtor asks approval and authorization from the Court to
proceed with the sale free and clear of any liens, claims,
interests, encumbrances, with any such liens, claims and
encumbrances to attach to the proceeds of sale. He asks approval
to pay all necessary and customary closing costs in connection with
the sale and to pay the brokers' commission described.
Great Midwestern Bank is the holder of a first mortgage on the
Property. The Debtor asks authorization to satisfy the Great
Midwestern Bank mortgage at closing. The current debt due to Great
Midwestern Bank is approximately $425,265.
Subject to the terms and conditions of the sale, the Debtor in the
sound exercise of its business judgment has concluded that
consummation of the sale of the Property to the proposed buyer will
best maximize the value of the estate for the benefit of creditors.
A copy of the Contract is available at https://bit.ly/392txns from
PacerMonitor.com free of charge.
Counsel for Debtor:
Robert C. Furr, Esq.
FURR AND COHEN, P.A.
2255 Glades Road, Suite 301E
Boca Raton, FL 33431
Telephone: (561) 395-0500
Facsimile: (561)338-7532-fax
E-mail: rfurr@furrcohen.com
Alexander Dong Lee sought Chapter 11 protection (Bankr. S.D. Fla.
Case No. 20-21594) on Oct. 23, 2020. The Debtor tapped Robert
Furr, Esq., as counsel.
ALPHA MEDIA: Case Summary & 30 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: Alpha Media Holdings LLC
1211 SW 5th Avenue, Suite 750
Portland, OR 97204
Business Description: Alpha Media is a privately-held radio
broadcast and multimedia company. Formed in
2009 by a veteran radio executive, Alpha
Media grew through acquisitions and now owns
or operates more than 200 radio stations
that provide local news, sports, music, and
entertainment to a weekly audience of more
than 11 million listeners in 44 communities
across the United States. In addition to
its radio stations, Alpha Media provides
digital content through more than 200
websites and countless mobile applications
and digital streaming services.
Chapter 11 Petition Date: January 25, 2021
Court: United States Bankruptcy Court
Eastern District of Virginia
Sixteen affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Alpha Media Holdings LLC (Lead Case) 21-30209
Alpha Media LLC 21-30208
Alpha 3E Corporation 21-30210
Alpha 3E Holding Corporation 21-30211
Alpha 3E Licensee LLC 21-30212
Alpha Media Communications Inc. 21-30213
Alpha Media Communications LLC 21-30214
Alpha Media Licensee LLC 21-30215
Alpha Media of Columbus Inc. 21-30216
Alpha Media of Brookings Inc. 21-30217
Alpha Media of Fort Dodge Inc. 21-30218
Alpha Media of Lincoln Inc 21-30219
Alpha Media of Luverne Inc. 21-30220
Alpha Media of Mason City Inc. 21-30221
Alpha Media USA LLC 21-30222
Alpha Media of Joliet Inc. 21-30223
Judge: Hon. Kevin R. Huennekens
Debtors'
General
Bankruptcy
Counsel: Justin Bernbrock, Esq.
Bryan Uelk, Esq.
SHEPPARD MULLIN, RICHTER & HAMPTON LLP
70 West Madison Street, 48th Floor
Chicago, Illinois 60602
Tel: (312) 499-6300
Fax: (312) 499-6301
Email: jbernbrock@sheppardmullin.com
buelk@sheppardmullin.com
- and -
Colin Davidson, Esq.
SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
30 Rockefeller Plaza
New York, New York 10112
Tel: (212) 653-8700
Fax: (212) 653-8701
Email: cdavidson@sheppardmullin.com
Debtors'
Local
Bankruptcy
Counsel: Jeremy S. Williams, Esq.
Michael A. Condyles, Esq.
Peter J. Barrett, Esq.
Brian H. Richardson, Esq.
KUTAK ROCK LLP
901 East Byrd Street, Suite 1000
Richmond, VA 23219-4071
Tel: (804) 644-1700
Fax: (804) 783-6192
Email: jeremy.williams@kutakrock.com
michael.condyles@kutakrock.com
peter.barrett@kutakrock.com
brian.richardson@kutakrock.com
Debtors'
Financial
Advisor: MOELIS & COMPANY
Debtors'
Restructuring
Advisor: ERNST & YOUNG LLP
Debtors'
Notice,
Claim,
& Balloting
Agent: BANKRUPTCY MANAGEMENT SOLUTIONS, INC.
D/B/A STRETTO
https://cases.stretto.com/AlphaMedia/court-docket
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by John Grossi, chief financial officer.
A copy of Alpha Media Holdings' petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/LRYF4NA/Alpha_Media_Holdings_LLC__vaebke-21-30209__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. ICG North America Unsecured Notes $103,974,381
Holdings Ltd.
600 Lexington Ave
24th Floor
New York, NY 10022
Brian Spenner
Email: brian.spenner@icgplc.com
2. Nielsen Audio, Inc Sales & Marketing $2,366,735
85 Broad St
New York, NY 10004
Eric J. Dale, Chief Legal Officer
Email: brad.kelly@nielsen.com
3. Broadcast Music, Inc. Royalties & Licensing $823,829
10 Music Square East
5th Floor Credit
Nashville, TN 37203
Linda Hugen
Tel: 615-401-2000
Email: NASHVILLE@BMI.COM
4. Crown Castle Towers 05 LLC Landlord $748,597
2000 Corporate Drive
Canonsburg, PA 15317
Kelsey O'Connor
Tel: 724-416-9186
Email: kelsey.oconnor@crowncastle.com
5. American Society of Composers, Royalties & $216,688
Authors, and Publishers Licensing
250 West 57th St
New York, NY 10107
Pamela Blank
Tel: 212-621-6406
Email: pblank@ascap.com
6. American Tower Corporation Landlord $209,139
10 Presidential Way
Woburn, MA 01801
Leslie Corbin
Tel: 781-926-7106
Email: leslie.corbin@americantower.com
7. Internal Revenue Service Tax $158,163
P.O. Box 932700
Louisville, KY 40293-2700
Attn: Legal Department
8. SBA Towers LLC Landlord $149,616
8051 Congress Ave
Boca Raton, FL 33487
Sharon S. Schwartz
Tel: 561-995-7670
Email: sschwartz@sbasite.com
9. Pesto, Inc. Landlord $126,085
725 Broad Street
Augusta, GA 30901
David Myer
Tel:785-823-8111
Email: craig.mitchell@morris.com
10. Pinnacle Towers, LLC Landlord $104,689
2000 Corporate Drive
Canonsburg, PA 15317
Kelsey O'Connor
Tel: 724-416-9186
Email: kelsey.oconnor@crowncastle.com
11. Sound Exchange Inc. Estimated $91,335
733 10th Street NW Royalty Fees
10th Floor
Washington, DC 20001
Brie Jackson
Tel: 202-696-1847
Email: info@soundexchange.com
12. Albert Uresti, MPA, PCC Tax $77,936
Bear County Tax Assessor
PO Box 2903
San Antonio, TX 78299-2903
Tel: 210-335-2251
Email: taxoffice@bexar.org
13. TR Pacwest LLC Landlord $72,129
1211 SW Fifth Ave
Suite 700
Portland, OR 97204
DeAnna L Amende
Tel: 503-468-5501
Email: damende@lpc.com
14. Global Music Rights Royalty & Licensing $70,101
1100 Glendon Ave
Suite 2000
Los Angeles, CA 90024
Spencer Kelly
Tel: 310-209-6437
Email: spencer@globalmusicrights.com
15. Radio Music License Committee Royalty & $69,667
1616 Westgate Circle Licensing
Brentwood, TN 37027
Bill Velez
Tel: 615-844-6260
Email: bill@radiomlc.org
16. Premiere Networks Programming $63,498
15260 Ventura Blvd
Suite 400
Sherman Oaks, CA 91403
Michael Kindhart
Tel: 818-461-5408
Email: mkindhart@premierenetworks.com
17. Insite Towers, LLC Landlord $49,500
1199 North Fairfax St
Suite 700
Alexandria, VA 223
David Denton
Tel: 813-334-8833
Email: david.denton@insitewireless.com
18. Bohn Broadcast Services Utility $47,304
169 Chelsea Station Dr.
Chelsea, AL 35043
Heather
Tel: 844-549-2646
Email: heather@bohnbroadcast.com
19. Marketron Broadcast Solutions Software $42,312
Dept 225
PO Box 30015
Salt Lake City, UT 84130-0015
Tel: 800-476-7226
Email: sales@marketron.com
20. Lancaster County Tax $37,903
Treasurer
555 South 10th Street, RM 102
Lincoln, NE 68508
Rachel Garver
Tel: 402-441-7425
Email: cotreas@lancaster.ne.gov
21. DMR Interactive Sales & Marketing $36,100
20 W. 11th Street
Covington, KY 41011
Tel: 513-403-3066
Email: tbannon@dmrinteractive.com
22. SBA Towers IV, LLC Landlord $32,804
8051 Congress Ave
Boca Raton, FL 33487
Sharon S Schwartz
Tel: 561-995-7670
Email: sschwartz@sbasite.com
23. Riverside County Treasurer Tax $32,072
PO Box 12005
Riverside, CA 92501
Jon Christensen
Tel: 951-955-3900
Email: rcttc@rivco.org
24. RCS Sound Software Software $18,188
445 Hamilton Ave, 7th Floor
White Plains, NY 10601
Jason Ramsey
Tel: 914-259-4709
Email: jramsey@rcsworks.com
25. Platte County Treasurer Tax $16,970
2610 14th St
Columbus, NE 68601
Tel: 402-563-4913
Email: treasurer@plattene.us
26. Denali Media Holdings Corp. Landlord $16,860
2550 Denali St. Ste 100
Anchorage, AK 99503
Tel: 907-274-1111
Email: rboots@denalimediaalaska.com
27. Brookings County Tax $11,902
Finance Office
520 3rd St Suite #100
Brookings, SD 57006
Tel: 605-696-8250
Email: finance@brookingscountysd.gov
28. Radio Advertising Bureau Inc. Dues and $11,425
P.O Box 972036 Subscriptions
Dallas, TX 75397-2036
Erica Farber
Tel: 310-779-1274
Email: efarber@rab.com
29. Kilowatt Inc Engineering $11,342
P.O. Box 77
Humboldt, SD 57035
Attn: Director or Officer
Tel: 605-681-4961
Email: ethan@kilowattinc.com
30. Efficio Solutions Sales & Marketing $10,161
90 Eastgate Rd
Washington, IL 61571-9202
Tel: 877-333-4246
Email: sstraub@efficiosolutions.com
ALPHA MEDIA: Lenders to Take Ownership; Plan Needs FCC Nod
----------------------------------------------------------
Alpha Media, which operates 200 U.S. radio stations, has filed for
Chapter 11 bankruptcy protection.
Radio Online reports that Alpha Media announced that it has entered
into a restructuring agreement with certain lenders to reduce its
debt, as well as raise incremental capital to allow the company to
navigate current market conditions and pursue growth opportunities.
The company expects no disruption to its broadcast operations,
customers or employees. Management will remain in place and
continue to maintain its day-to-day operations.
To implement the restructuring, the company has filed a
pre-arranged plan of re-organization, disclosure statement and
voluntary petition for relief under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court in the Eastern
District of Virginia. Certain of the company's existing lenders
have agreed to provide new capital in the form of committed
debtor-in-possession and exit financing. These lenders, together
with management, are expected to collectively own 100% of the
equity of the re-organized company, subject to regulatory approvals
from the FCC.
The restructuring of the company's balance sheet will require
receipt of bankruptcy court approval and certain regulatory,
including FCC, approvals and satisfaction of other customary
conditions. The vompany expects to conclude the restructuring
process in the first half of 2021.
"We have made significant progress in aggressively deleveraging our
business in recent years. As we proceed with our financial
restructuring to improve our capital structure and manage through
the ongoing downturn caused by the COVID-19 pandemic, the agreement
we reached today will leave Alpha Media well positioned for a
market recovery as a stronger and even more competitive company,"
said Alpha Media Chairman and Chief Executive Officer Bob
Proffitt.
Proffitt continued, "Our core business continues to perform well
despite current market challenges. We will continue to invest in
our talented teams to foster the unique culture that has been key
to Alpha Media's success in delivering dynamic, diverse and
exciting content to our communities."
Alpha Media said it will continue operating its stations without
interruption, providing engaging news, music, sports and
entertainment to its communities. The company's day-to-day
operations will continue in the normal course during this process.
Alpha Media maintains strong relationships with its advertisers,
communities and listeners, and those relationships will continue.
Sheppard, Mullin, Richter & Hampton LLP is serving as Alpha Media's
lead restructuring counsel in connection with this process, and
Kutak Rock LLP is serving as Virginia counsel. Wiley Rein LLP is
serving as the Company's FCC counsel. EY Turnaround Management
Services LLC and Moelis & Co. are serving as the company's
financial advisors.
Kramer Levin Naftalis & Frankel LLP, Quinn Emanuel Urquhart &
Sullivan, LLP, McGuireWoods LLP, and Fletcher Heald & Hildreth PLC
are serving as legal co-counsel to an ad hoc group of certain
lenders, and GLC Advisors & Co. is serving as financial advisor.
About Alpha Media
Alpha Media is a privately-held radio broadcast and multimedia
company. Formed in 2009 by a veteran radio executive, Alpha Media
grew through acquisitions and now owns or operates more than 200
radio stations that provide local news, sports, music, and
entertainment to a weekly audience of more than 11 million
listeners in 44 communities across the United States. In addition
to its radio stations, Alpha Media provides digital content through
more than 200 Web sites and countless mobile applications and
digital streaming services.
Alpha Media Holdings LLC and 15 affiliates sought Chapter 11
protection (Bankr. E.D. Va. Case No. 21-30209) on Jan. 25, 2021.
Alpha Media estimated assets of $10 million to $50 million and
liabilities of $50 million to $100 million as of the bankruptcy
filing.
The Hon. Kevin R. Huennekens is the case judge.
The Debtors tapped SHEPPARD MULLIN, RICHTER & HAMPTON LLP as
general bankruptcy counsel; KUTAK ROCK LLP as local bankruptcy
counsel; MOELIS & COMPANY as financial advisor; and ERNST & YOUNG
LLP as restructuring advisor. BANKRUPTCY MANAGEMENT SOLUTIONS,
INC., d/b/a STRETTO is the claims agent.
AMC ENTERTAINMENT: S&P Lowers ICR to 'SD' on Distressed Exchange
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on AMC
Entertainment Holdings Inc. to 'SD' (selective default) from 'CC'
and its issue-level rating on the second-lien notes to 'D' from
'C'.
In addition, S&P expects AMC will likely run out of cash on hand
within the next few months, incorporating the proceeds from the
transaction, if it doesn't receive additional capital. Therefore,
it believes further debt restructurings are likely in the immediate
future.
The downgrade follows the completion of AMC's exchange offer, where
Mudrick Capital converted $100 million of second-lien AMC notes
into equity. In addition, it has provided the company with $100
million of new first-lien 15%/17% payment in kind (PIK) toggle
notes (unrated). S&P views the proposed debt-for-equity transaction
as distressed and tantamount to a default.
The new $100 million first-lien notes provide incremental near-term
liquidity. However, S&P believes this will only provide less than
one month of additional liquidity, and unless the company is able
to raise additional capital, it will run out of cash in the next
few months. AMC's monthly cash burn was about $125 million in late
2020, and it has seen no indication that it will materially
improve.
ANCELLOTTA LLC: Has Until Feb. 4 to File Plan & Disclosures
-----------------------------------------------------------
Judge M. Elaine Hammond of the U.S. Bankruptcy Court for the
Northern District of California has entered an order within which
the deadline for debtor Ancellotta, LLC, to file a Chapter 11 plan
and disclosure statement is Feb. 4, 2021.
A full-text copy of the order dated Jan. 19, 2021, is available at
https://bit.ly/39XTNyv from PacerMonitor at no charge.
Attorney for Ancellotta:
VINOD NICHANI
NICHANI LAW FIRM
111 North Market Street, Suite 300
San Jose, California 95113
Phone: 408-800-6174
Fax: 408-290-9802
E-mail: vinod@nichanilawfirm.com
About Ancellotta
Ancellotta, LLC filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 20-50872) on
June 9, 2020, listing under $1 million in both assets and
liabilities. Judge M. Elaine Hammond oversees the case. Vinod
Nichani, Esq., at Nichani Law Firm, is the Debtor's legal counsel.
ATLANTIC POWER: S&P Puts 'BB-' ICR on Watch Neg. on I Squared Deal
------------------------------------------------------------------
S&P Global Ratings placed Atlantic Power Corp.'s (APC) 'BB-' issuer
credit rating on CreditWatch with negative implications following
the company's announcement it has entered into an agreement to be
acquired by I Squared Capital for $3.03 per share.
At the same time, S&P placed the issue-level ratings on Atlantic
Power Preferred Equity Ltd. (APLP) Holdings L.P.'s term loan B,
$180 million revolving credit facility, and Atlantic Power L.P.'s
C$210 million medium-term notes on CreditWatch with negative
implications.
The rating agency also placed the preferred shares at Atlantic
Power Preferred Equity Ltd. (APLP) on CreditWatch with negative
implications.
The CreditWatch placements capture S&P's view that the new sponsor
could alter the capital structure.
S&P said, "Pro forma for the transaction, Atlantic Power's
financial policy will be determined by I Squared, which we would
most likely designate a financial sponsor. We typically expect
financial sponsors to use leverage to fund transactions to achieve
returns. Consequently, ratings are generally lower for financial
sponsor-owned companies than strategically owned entities. However,
I Squared indicated it plans to redeem some debt and reorganize
APC's capital structure. We will monitor and reassess financial
policy, forward leverage, and any changes to the business strategy
as we obtain additional clarity on I Squared's plan and as the
transaction approaches financial close."
"Following the necessary approvals by APC's board, shareholders,
and regulators, we anticipate common shareholders will receive
$3.03 per share at the close of the transaction. The unsecured
convertible debt due Jan. 31, 2025, will be converted to common
shares for $3.03, plus accrued and unpaid interest. The company's
senior secured term loan will also be redeemed at 101% of
principal. Atlantic Power Preferred's shares will be redeemed for
C$22 each in cash. Atlantic Power L.P.'s 5.95% medium term notes
due June 23, 2036, will be redeemed for consideration equal to
106.071% of the principal amount plus accrued and unpaid interest
at financial close."
"The CreditWatch listing reflects the likelihood that I Squared's
financial policy will inform the rating on Atlantic Power pro forma
for the transaction. We would most likely classify I Squared as a
financial sponsor. Consequently, any rating implications will
depend on the forward capital structure, our assessment of the
business strategy, and most important how we assess I Squared's
financial policy with regard to APC. We will likely resolve the
CreditWatch when the transaction closes, projected for the second
quarter of 2021."
AYRO INC: Alpha Capital Has 2.8% Stake as of Dec. 31
----------------------------------------------------
In a Schedule 13G/A filed with the Securities and Exchange
Commission, Alpha Capital Anstalt disclosed that as of Dec. 31,
2020, it beneficially owns 752,469 shares of common stock of Ayro,
Inc., which represents 2.78 percent based on 27,022,132 shares of
Common Stock of the Issuer outstanding as of Nov. 23, 2020 as
reported in the Form 424B3 as filed on Dec. 2, 2020. A full-text
copy of the regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1086745/000121390021003509/ea133727-13ga1alpha_ayroinc.htm
About AYRO
Texas-based AYRO, Inc., f/k/a DropCar, Inc. -- http://www.ayro.com
-- is a provider of automotive vehicle support, fleet logistics and
concierge services for both consumers and the automotive industry.
In 2015, the Company launched its cloud-based Enterprise Vehicle
Assistance and Logistics ("VAL") platform and mobile application to
assist consumers and automotive-related companies to reduce the
costs, hassles and inefficiencies of owning a car, or fleet of
cars, in urban centers.
Dropcar reported a net loss of $4.90 million for the year ended
Dec. 31, 2019, compared to a net loss of $18.75 million for the
year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had
$33.85 million in total assets, $3.09 million in total liabilities,
$30.76 million in total stockholders' equity.
Friedman LLP, in East Hanover, New Jersey, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 30, 2020, citing that the Company has recurring losses
and negative cash flows from operations. These conditions, among
others, raise substantial doubt about the Company's ability to
continue as a going concern.
BCPE ULYSSES: Fitch Assigns 'CCC+' LongTerm IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings affirmed the Long-Term Issuer Default Rating (IDR) of
LBM Acquisition, LLC at 'B' following the holding company (holdco)
payment-in-kind (PIK) toggle note offering by BCPE Ulysses
Intermediate, Inc. Fitch also affirmed LBM's senior secured term
loan and delayed draw term loan ratings at 'B+'/'RR3' and affirmed
LBM's senior unsecured notes at 'CCC+'/'RR6'. Fitch assigned a
Long-Term IDR of 'CCC+' to BCPE, the issuer of the holdco PIK
toggle note, and assigned a 'CCC-'/'RR6' rating to BCPE's proposed
holdco PIK toggle note offering. The Rating Outlook for LBM and
BCPE is Stable.
The rating affirmations of LBM's Long-Term IDR and debt issues
reflect Fitch's determination that the proposed holdco notes are
not considered debt of LBM per Fitch's corporate rating criteria
and that LBM is protected from a potential bankruptcy of the parent
(BCPE). BCPE's IDR reflects Fitch's determination that the entity
is weaker than its operating subsidiary, LBM, and that linkages
between the entities are weak due to a lack of cross guarantees and
cross-default or cross-acceleration provisions in the proposed
documentation, combined with the fact that BCPE only has qualified
access to cash flows from LBM.
LBM's IDR reflects the company's high leverage following the close
of the acquisition by Bain Capital in December 2020, the company's
relatively weaker competitive position as a distributor in the
building products supply chain, the high cyclicality of its end
markets, its weak profitability metrics and the sponsor's
aggressive capital allocation strategy. Fitch's expectation for
residential housing growth and a stabilizing commodity environment
into 2021 supports modest deleveraging in the medium term through
EBITDA growth. The company's large scale, breadth of product
offerings, extended debt maturity schedule and adequate liquidity
positions are also factored into the IDR.
KEY RATING DRIVERS
Weaker Parent, Stronger Subsidiary: Fitch believes LBM has a
stronger credit profile than the holdco note issuer, BCPE, due to
LBM's unrestricted access to operating cash flows, compared to
BCPE's qualified access to cash flows through permitted upstreaming
of dividends from LBM to BCPE, which are the only cash flows that
support BCPE's capacity to service its debt. Fitch views the
overall credit linkage between the stronger subsidiary (LBM) and
the weaker parent (BCPE) as weak under Fitch's parent and
subsidiary linkage rating criteria because of weak legal ties
between the entities, as evidenced by a lack of cross-default and
cross-acceleration provisions or cross-guarantees on the debt
between the entities. Additionally, the parent's access to the
subsidiary's cash flows may be restricted during a time of stress
due to covenants in place on LBM's senior secured credit
facilities. These factors support a notching differential between
the Long-Term IDRs of LBM and BCPE.
Consolidated and Standalone Credit Profiles: Fitch continues to
rate LBM's credit profile on a standalone basis following the
holdco note offering, as the note offering will not include
cross-default or acceleration provisions, and there are no security
pledges or guarantees on the note offering, which protect the
subsidiary from a potential parent bankruptcy. LBM's Standalone
Credit Profile is mostly unchanged following the BCPE PIK toggle
note offering, with the exception of somewhat lower annual FCF due
to anticipated upstreaming of dividends to BCPE to service interest
payments on its debt. Fitch anticipates that LBM's FCF will be
1%-2% of revenues after accounting for these dividends during the
rating horizon.
Fitch anchors BCPE's Long-Term IDR on the consolidated credit
profile of the entire group, which Fitch determines is a B- risk
based on total consolidated debt-to-operating EBITDA of above 7x at
close, per Fitch measurements. Fitch rates the IDR of BCPE one
notch lower than the consolidated risk profile, as the parent's
access to subsidiary cash could be constrained by covenants in
place on LBM's debt.
High Leverage Levels: Fitch-measured pro forma total
debt-to-operating EBITDA for LBM (excluding holdco debt) is about
6.3x, and for the consolidated group (including holdco debt) is
about 7.6x for LTM ending Dec. 31, 2020. The strong residential
housing backdrop in 2H20 and the beginning of 2021 support Fitch's
forecast for modest deleveraging to below 6x for LBM and to below
7x for the consolidated group by YE 2021, driven by revenue growth,
slight EBITDA margin expansion and EBITDA contributions from
forecast bolt-on M&A. Fitch forecasts limited debt paydown in the
next couple of years as the company pursues additional bolt-on M&A
with FCF generation and draws on the delayed draw term loan
(DDTL).
Weak Overall Competitive Position: The company's competitive
position is weak relative to more highly rated building products
manufacturers in Fitch's coverage due to its position as a
distributor in the supply chain, LBM's relatively low brand equity
and the company's limited value-added product offerings. Fitch
believes the company has little competitive advantage relative to
competitors of similar or greater scale. Breadth of product
offerings and national scale provide some competitive advantages
relative to distributors with only local presences and niche
product offerings.
The company estimates its market share within the markets it serves
is around 8%-10%, which is strong for the industry but modest on an
absolute basis. Fitch estimates that LBM is the fifth-largest
professional building products distributor in the United States.
The company believes it has the number-one or number-two market
position in its key markets.
Low EBITDA and FCF Margins: LBM's profitability metrics are
commensurate with a 'B'-category building products issuer and are
roughly in line with large distributor peers. Fitch-adjusted EBITDA
margins have historically been in the 6%-7% range, while FCF
margins have sustained in the low single digits. Fitch expects
EBITDA margins to be in the 7.0%-7.5% range during the forecast,
driven by stronger operating leverage and some fixed-cost takeout
in 2020. The company's highly variable cost structure and ability
to wind down working capital should help preserve positive FCF and
liquidity through a modest construction downturn, but material
declines in EBITDA margins could lead to unsustainable long-term
leverage levels.
Financial Flexibility: LBM has good financial flexibility following
the close of the acquisition by Bain Capital due to its extended
debt maturity schedule and adequate liquidity position. The
company's near-term debt maturities are limited to 1% term loan
amortization per year until the term loan comes due in 2027. The
asset-based lending (ABL) facility had about $30 million
outstanding out of $500 million maximum capacity at YE 2020 and
will mature in 2025. The proposed BCPE PIK toggle notes are
expected to mature in 2027.
Broad Product Offering: LBM offers a comprehensive suite of
products for homebuilders and other construction professionals,
including structural, interior and exterior products as well as
some installation services and light manufacturing capacity,
enabling the company to be a one-stop shop for residential and
commercial construction needs. This product breadth enhances
customer relationships, provides some competitive advantage over
smaller distributors and diversifies the company's supplier base.
Aggressive Capital Allocation Strategy: Fitch expects ownership
under Bain Capital to maintain an aggressive posture toward its
balance sheet and an acquisitive growth strategy. Fitch believes
ownership has a relatively high leverage tolerance as evidenced by
the high leverage multiple at the close of the acquisition by Bain
in December 2020 and its willingness to issue holdco PIK notes for
shareholder remuneration shortly after the completion of the
acquisition. Under previous ownership but the same management team,
the company lowered leverage by more than two turns of leverage
from 2016 to 2019, ending 2019 at 4.7x total debt-to-operating
EBITDA, according to Fitch measurements. Management and new
ownership have expressed a desire to focus on deleveraging through
debt reduction and EBITDA growth. Fitch expects most FCF, combined
with draws on the DDTL, to be applied toward bolt-on acquisitions
during the forecast.
Highly Cyclical End Markets: The majority of LBM's sales are
directed to highly cyclical end markets. Management estimates that
about 51% of sales are to new single-family home construction, 15%
to multifamily construction, 11% to commercial construction and 5%
to other end markets. The remaining 18% of sales are exposed to the
residential repair and remodel end market, which Fitch views as
less cyclical than new construction activity. The company's
substantial exposure to new construction weighs negatively on the
credit profile when compared with other building products suppliers
with more stable end-market exposure. Credit metrics and
profitability may be more volatile than peers, with higher repair
and replacement demand exposure through the construction cycle.
DERIVATION SUMMARY
LBM has weaker credit and profitability metrics than Fitch's
publicly rated universe of building products manufacturers, which
are concentrated in low-investment grade rating categories. These
peers typically have total debt-to-operating EBITDA of less than or
equal to 3x, global operating profiles and stronger market share
than LBM. The company has a comparable competitive position and
leverage profile to Park River Holdings, Inc. (B/Stable). The
company is smaller in scale but has similar end-market exposure,
profitability metrics and product offerings to its closest publicly
traded peer, Builders FirstSource, Inc. (BLDR), but BLDR has
substantially lower leverage levels. LBM has similar leverage
levels and profitability metrics to Beacon Roofing Supply, Inc
(BECN), but BECN has higher exposure to less cyclical repair and
replacement demand.
KEY ASSUMPTIONS
-- Fitch expects LBM's Fitch-measured pro forma total debt-to
operating EBITDA to be about 6.3x following the BCPE notes
offering (which is not included in Fitch-calculated debt for
LBM) and to decline to below 6.0x by YE 2021;
-- Consolidated group total debt-to-operating EBITDA of about
7.6x following the BCPE notes offering (which is included in
Fitch-calculated debt for purposes of this measure) and to
decline to below 7.0x by YE 2021;
-- Mid-single digit organic revenue growth in 2021 supported by
residential housing strength, partially offset by weakness in
commercial construction activity;
-- Fitch-adjusted EBITDA margins sustain in the 7.0%-7.5% range;
-- FCF generation of roughly 1%-2% of revenues annually (after
deducting anticipated cash upstreamed to BCPE to service
holdco cash interest payments).
-- The company deploys FCF and utilizes undrawn DDTL capacity to
fund bolt-on M&A activity over the next 24 months.
Recovery Analysis Assumptions
The recovery analysis assumes that LBM would be considered a going
concern (GC) in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim.
Fitch's GC EBITDA estimate of $228 million estimates a
post-restructuring sustainable level of EBITDA. This is about 23%
below Fitch calculated pro forma EBITDA for LTM ending Sept. 30,
2020.
The GC EBITDA is based on Fitch's assumption that distress would
arise from weakening in the housing market combined with losses of
certain customers. Fitch estimates that annual revenues that are
about 15% below Fitch-forecast 2020 pro forma levels and
Fitch-adjusted EBITDA margins of about 6% would capture the lower
revenue base of the company after emerging from a housing downturn,
plus a sustainable margin profile after right sizing, which leads
to Fitch's $228 million GC EBITDA assumption.
Fitch assumed a 5.5x evaluation value (EV) multiple to calculate
the GC EV in a recovery scenario. The 5.5x multiple is below the
9.1x purchase multiple paid by Bain Capital to acquire the company,
and below the 8.6x EBITDA multiple when BLDR acquired ProBuild for
$1.6 billion in 2015. Additionally, Beacon Roofing Supply acquired
distributor Allied Building Products for $2.6 billion in 2017 at an
8.7x multiple. Fitch does not have recent data on recovery
multiples for building products distributors.
The ABL revolver is assumed to be 75% drawn at default, which
accounts for potential shrinkage in the available borrowing base
during a contraction in revenues that provokes a default, and is
assumed to have prior-ranking claims to the term loan in the
recovery analysis. The analysis results in a recovery corresponding
to an 'RR3' for LBM's $1.35 billion secured term loan and undrawn
$300 million secured DDTL, and a recovery corresponding to an 'RR6'
for LBM's $550 million unsecured bond. The holdco notes receive a
recovery corresponding to an 'RR6'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
LBM
-- Fitch's expectation that LBM's total debt-to-operating EBITDA
will be sustained below 4.5x;
-- The company lowers its end-market exposure to the new home
construction market to less than 50% of sales in order to
reduce earnings cyclicality and credit metric volatility
through the housing cycle;
-- LBM maintains a strong liquidity position with no material
short-term debt obligations.
BCPE
-- Improvement in the consolidated credit profile of the group,
as evidenced by total debt-to-operating EBITDA sustaining
below 6.0x (which includes holdco PIK toggle notes as debt);
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
LBM
-- Fitch's expectation that total debt-to-operating EBITDA will
be sustained above 6.0x or that net debt-to-operating EBITDA
will be sustained above 5.8x;
-- Escalation of shareholder friendly activity. This may include
further increase of debt at the holdco such that Fitch deems
the probability of default materially increases at LBM vis-à
vis debt or dividends decisions at LBM aimed at supporting the
holdco;
-- FFO interest coverage falls below 2.0x;
-- Fitch's expectation that FCF generation will approach neutral
or fall to negative.
BCPE
-- Deterioration in the consolidated credit profile of the group,
as evidenced by total debt-to-operating EBITDA sustaining
above 7.5x (which includes holdco PIK toggle notes as debt).
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: The company has an adequate liquidity position
following the close of the financing transactions, supported by the
company's ABL revolver capacity. The company had about $30 million
outstanding under its $500 million ABL revolver at YE 2020. The
$300 million DDTL is available for acquisitions and capex subject
to first-lien net leverage of 4.5x. Fitch expects the DDTL will be
drawn over the next 24 months to fund continued bolt-on M&A
activity.
Maturity Schedule: The company has no meaningful debt maturities
post-transaction close until 2025, when the company's ABL revolver
comes due. The group's next debt maturity is 2027, when the
proposed holdco PIK toggle notes will come due. The term loan and
senior unsecured notes have maturities of seven and eight years,
respectively. The term loan amortizes at 1% annually and is subject
to an excess cash flow sweep.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch deducts upstreamed dividends to the holdco from LBM's FFO due
to the fixed recurring nature of the payment and the interest-like
qualities of the dividend, as it is being used to service required
interest payments on the holdco's debt.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3'. This
means ESG issues are credit-neutral or have only a minimal credit
impact on the entity, either due to their nature or the way in
which they are being managed by the entity.
BDF ACQUISITION: Moody's Ups Term Loan to B2, Alters Outlook to Pos
-------------------------------------------------------------------
Moody's Investors Service upgraded BDF Acquisition Corp.'s (Bob's
or Bob's Discount Furniture) senior secured term loan rating to B2
from B3. Concurrently, Moody's changed Bob's outlook to positive
from negative and affirmed the company's B3 corporate family rating
and B3-PD probability of default rating.
The change in outlook to positive from negative reflects the
company's strong operating performance and improvement in liquidity
after its stores reopened, driven by the consumer's focus on the
home as a result of the pandemic and a favorable housing market.
Moody's expects the furniture category to remain strong through the
first half of 2021, however normalization of consumer spending
patterns could occur once healthy and safety concerns abate,
leading to weaker revenue and earnings. Moody's regards the
coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.
The upgrade of the term loan rating to B2 from B3 reflects the
company's reduced reliance on the asset-based revolver, which has
effective priority over the term loan in the liability waterfall,
as well as increased support from vendor payables and leases due to
continued store expansion.
Moody's took the following rating actions for BDF Acquisition
Corp.:
Corporate family rating, affirmed B3
Probability of default rating, affirmed B3-PD
Senior secured first lien term loan due 2023, upgraded to B2
(LGD3) from B3 (LGD3)
Outlook, changed to positive from negative
RATINGS RATIONALE
Bob's B3 CFR reflects the company's moderately high leverage and
adequate liquidity. Leverage was at 5.1 times and EBIT/interest
expense was 1x as of Q3 2020, reflecting a steep drop in earnings
in Q2 2020 and strong recovery in Q3 2020. Moody's expects overall
liquidity to be adequate over the next 12-18 months. Although the
company had $232 million of cash as of September 27, 2020, free
cash flow is expected to be negative even as earnings grow, due to
the unusually high level of customer deposits received ahead of
product deliveries, inventory rebuild to meet demand, and payment
of accrued liabilities and vendor accounts payable. While there are
no borrowings under the asset-based revolver, there is currently no
availability due to reserves for customer deposits. The rating also
reflects Bob's relatively small size, limited geographic presence
and narrow product focus on the highly cyclical furniture category.
In addition, the rating reflects governance risks, specifically the
potential for debt-financed dividend distributions over time given
private equity ownership. As a retailer, Bob's needs to make
ongoing investments in its brand and infrastructure, as well as in
social and environmental drivers including responsible sourcing,
product and supply sustainability, privacy and data protection.
The credit profile positively reflects the strength of the
company's brand in the regions where it operates, and its value
product positioning. Moody's believes that Bob's everyday low price
offering provides a differentiating value proposition in the
fragmented and competitive furniture market. It also supports
demand in weak economic conditions, as consumers trade down from
more expensive retailers and can utilize Bob's financing options.
Over the next 12-18 months, Moody's expects earnings growth to
continue due to store expansion and furniture demand in the first
half of 2021, leading to leverage decreasing to 4.5x from 5.1x and
EBIT/interest improving to 1.3x from 1x.
The positive outlook includes Moody's expectations that growth in
consumer spending on home-related categories will continue in the
near term, resulting in improved liquidity and credit metrics.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if liquidity improves, including
positive free cash flow and good revolver availability.
Quantitatively, the earnings could be upgraded if Moody's-adjusted
debt/EBITDA is maintained below 5.75 times and EBIT/interest
expense above 1.25 times.
The ratings could be downgraded if liquidity or earnings
deteriorate. Quantitatively, the ratings could be downgraded if
debt/EBITDA expected to be sustained above 6.5 times, or
EBIT/interest expense below 1 time.
BDF Acquisition Corp., based in Manchester, Connecticut, was
created to acquire a majority stake in Bob's Discount Furniture, a
retailer of value-priced furniture with 135 stores located
primarily in the Northeast, Mid-Atlantic, and Midwest states.
Revenue for the LTM period ended September 27, 2020 was
approximately $1.5 billion. The company has been majority-owned by
private equity firm Bain Capital since 2014.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
BETHEL UNIVERSITY: S&P Lowers Revenue Bond Rating to 'BB+'
----------------------------------------------------------
S&P Global Ratings lowered its long-term rating on Bethel
University (Bethel), Minn.'s series 2017 revenue bonds to 'BB+'
from 'BBB-'. The outlook is stable.
"The downgrade reflects Bethel's persistent enrollment decline,
which has led to negative operating margins for the past four
years," said S&P Global Ratings credit analyst Steven Sather.
The enrollment decline in fall 2021 and operating pressures for
fiscals 2020 and 2021 are partially due to the additional pressures
from the pandemic. The increasing operating deficits have pressured
the university's already-weak balance sheet.
The stable outlook reflects S&P's understanding that the university
has taken measures to right-size its operations with significant
reductions to faculty and staff, which could result in improved
operations over the medium term.
A negative rating action during the outlook period is possible if
full-accrual operating deficits are sustained or worsen beyond
fiscal 2021 or if enrollment declines increase from current levels.
S&P would also view negatively further declines in financial
resources.
Any positive rating action, while unlikely in the near term, would
depend upon Bethel improving operating performance to near break
even, increasing balance sheet resources, and sustaining enrollment
at near or above current levels.
Bethel's total debt outstanding as of May 31, 2020, was $46.5
million, including $2.0 million outstanding of a term loan utilized
as bridge financing for capital projects.
BIOLASE INC: Adjourns Special Meeting Until February 16
-------------------------------------------------------
Biolase, Inc., held a special meeting of stockholders on Jan. 22,
2021, at which the Company's stockholders approved Proposal 2,
which sought approval to adjourn the Special Meeting, if necessary,
in the reasonable discretion of the chief executive officer and
president of the Company, to solicit additional proxies if there
are insufficient votes at the time of the Special Meeting to
approve the amendment proposal (Proposal 1).
At the time of the Special Meeting, there were insufficient votes
to pass Proposal 1, which sought approval to amend the Company's
Restated Certificate of Incorporation to effect a reverse stock
split of the Company's common stock and reduce the authorized
shares of common stock at a ratio of 1-for-25, if and when
determined by the Company's board of directors. In accordance with
the authority granted pursuant to the approval of Proposal 2, the
Special Meeting was adjourned to allow additional time for voting
with respect to Proposal 1. The Special Meeting will reconvene on
Feb. 16, 2021 at 7:00 a.m. Pacific Time at the Company's corporate
headquarters, located at 27042 Towne Centre Drive, Suite 270,
Foothill Ranch, California 92610.
The Company will file additional proxy materials with information
regarding the reconvened Special Meeting and the new record date.
During the period of adjournment, the Company will continue to
accept stockholder votes on Proposal 1.
About BIOLASE
BIOLASE -- http://www.biolase.com-- is a medical device company
that develops, manufactures, markets, and sells laser systems for
the dentistry, and medicine industries. BIOLASE's proprietary
laser products incorporate approximately patented 259 and 41
patent-pending technologies designed to provide biologically
clinically superior performance with less pain and faster recovery
times.
Biolase reported a net loss of $17.85 million for the year ended
Dec. 31, 2019, compared to a net loss of $21.52 million for the
year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had
$41.99 million in total assets, $28.14 million in total
liabilities, and $13.85 million in total stockholders' equity.
BDO USA, LLP, in Costa Mesa, California, the Company's auditor
since 2005, issued a "going concern" qualification in its report
dated March 27, 2020 citing that the Company has suffered recurring
losses from operations, has negative cash flows from operations and
has uncertainties regarding the Company's ability to meet its debt
covenants and service its debt. These factors, among others, raise
substantial doubt about its ability to continue as a going concern.
BRACHIUM INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Brachium, Inc.
f/k/a Brachium Labs, LLC
660 Fourth St., Ste. 121
San Francisco, CA 94107
Business Description: Brachium, Inc. -- http://brachium.com--
is a healthcare technology startup
redefining the dental experience using
robotics, machine learning, and digital
augmentation.
Chapter 11 Petition Date: January 25, 2021
Court: United States Bankruptcy Court
Northern District of California
Case No.: 21-30047
Judge: Hon. Hannah L. Blumenstiel
Debtor's Counsel: Iain A. Macdonald, Esq.
MACDONALD FERNANDEZ LLP
221 Sansome Street, Third Floor
San Francisco, CA 94104
Tel: (415) 362-0449
Fax: (415) 394-5544
E-mail: iain@macfern.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Yaz Shehab, chief executive officer.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/UAPKW5A/Brachium_Inc__canbke-21-30047__0001.0.pdf?mcid=tGE4TAMA
BRIDGEWATER HOSPITALITY: Revises Treatment of Secured Creditors
---------------------------------------------------------------
Bridgewater Hospitality, LLC, said Jan. 15, 2021, that it is
proposing modification to Plan of Reorganization and to First
Amended Disclosure Statement for Plan of Reorganization Dated June
30, 2020. The changes proposed are neither material nor adverse to
any party and should be made a part of the Plan approved in this
case.
Article V of the Plan and the Amended Disclosure Statement are
modified as follows:
* Class 2 shall consist of the Allowed Secured Claims of
Aldine I.S.D. The Debtor will pay the Aldine I.S.D pre-petition
tax claims for 2019-2020, in equal monthly payments commencing no
later than the first day of the month following the Effective Date.
Such payments shall be calculated to result in payment in full of
the tax claim with all applicable and accrued interest no later
than the fifth anniversary of the petition date. These payments
shall include interest from the petition date through the Effective
Date and from the Effective Date through the date of payment in
full at the applicable state statutory rate of 12% per annum. In
the event of a sale of the Debtor's property then this Claim shall
be paid in full, from the proceeds of the sale.
* Class 3 shall consist of the Allowed Secured Claims of
Harris County, et. al. The Debtor will pay the Harris County, et
al., prepetition tax claims for 2019 2020, in equal monthly
payments commencing no later than the first day of the month
following the Effective Date. Such payments shall be calculated to
result in payment in full of the tax claim with all applicable and
accrued interest no later than the fifth anniversary of the
petition date. These payments shall include interest from the
petition date through the Effective Date and from the Effective
Date through the date of payment in full at the applicable state
statutory rate of 12% per annum. In the event of a sale of the
Debtor's property then this Claim shall be paid in full, from the
proceeds of the sale.
* Class 4 shall consist of the Allowed Secured Claims of
Harris County M.U.D. #321. The Debtor will pay the Harris County
M.U.D. #321 pre-petition tax claims for 2019-2020, in equal monthly
payments commencing no later than the first day of the month
following the Effective Date. Such payments shall be calculated to
result in payment in full of the tax claim with all applicable and
accrued interest no later than the fifth anniversary of the
petition date. These payments shall include interest from the
petition date through the Effective Date and from the Effective
Date through the date of payment in full at the applicable state
statutory rate of 12% per annum. In the event of a sale of the
Debtor's property then this Claim shall be paid in full, from the
proceeds of the sale.
* Class 5 will consist of the Allowed Secured Claims of North
Houston District. The Debtor will pay the North Houston District
prepetition tax claims for 2019-2020, in equal monthly payments
commencing no later than the first day of the month following the
Effective Date. Such payments shall be calculated to result in
payment in full of the tax claim with all applicable and accrued
interest no later than the fifth anniversary of the petition date.
These payments shall include interest from the petition date
through the Effective Date and from the Effective Date through the
date of payment in full at the applicable state statutory rate of
12% per annum. In the event of a sale of the Debtor's property
then this Claim shall be paid in full, from the proceeds of the
sale.
* Class 7 consists of the Allowed Secured Claims of Guaranty
Bank & Trust, N.A. Guaranty filed a single Secured Claim covering
two separate loans with equal first lien priority in the total
amount of $5,118,358. To the extent a Class 7 Claim is Allowed as
Secured the Allowed Secured Claim amount is $3,535,000 less the
amounts owed to the various taxing authorities claiming first liens
on the Debtor's property, it shall be amortized through the
contractual maturity date of June 29, 2042, bearing interest at the
rate of 4.50% per annum. Equal monthly payments of both principal
and interest shall be made by the Reorganized Debtor on the Claim
beginning on the first day of the first month following
Confirmation of the Plan, and on the first day of each month
thereafter.
A full-text copy of Plan Modification and First Amended Disclosure
Statement dated Jan. 15, 2021, is available at
https://bit.ly/3sPpjra from PacerMonitor.com at no charge.
The Debtor is represented by:
Joyce W. Lindauer
Paul B. Geilich
Guy H. Holman
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, Texas 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
Jonathan A. Gitlin
The Patel Law Group, PLLC
1125 Executive Circle, Suite 200
Irving, Texas 75038
Telephone: (972) 650-6848
Facsimile: (972) 650-6167
About Bridgewater Hospitality
Bridgewater Hospitality, LLC, is a privately held company in the
traveller accommodation industry.
Bridgewater Hospitality, LLC, filed its voluntary petition under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No.
20-31546) on March 2, 2020. The petition was signed by Prashant
Patel, manager and general partner. At the time of filing, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities. Joyce Lindauer, Esq. at JOYCE W. LINDAUER
ATTORNEY, PLLC, is the Debtor's counsel.
CEC ENTERTAINMENT: Moody's Rates $175MM 2nd Lien Term Loan 'Caa2'
-----------------------------------------------------------------
Moody's Investors Service assigned a Caa2 to CEC Entertainment,
LLC's $175 million 2nd lien senior secured term loan due December
30, 2027. In addition, Moody's affirmed CEC's Caa1 corporate family
rating, B3-PD probability of default rating and B2 rated $200
million 1st lien senior secured term loan. The outlook is
negative.
The Caa2 rating assigned to the 2nd lien senior secured term loan
is one notch below the Caa1 CFR and reflects the 2nd lien's junior
position in the capital structure with respect to the company's
$200 million 1st lien senior secured term loan. The affirmation of
the Caa1 CFR reflects CEC's adequate liquidity provided by its
sizabel cash balances and continued very high leverage.
Assignments:
Issuer: CEC Entertainment, LLC
Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD5)
Affirmations:
Issuer: CEC Entertainment, LLC
Probability of Default Rating, Affirmed B3-PD
Corporate Family Rating, Affirmed Caa1
Senior Secured 1st Lien term Loan, Affirmed B2 (LGD3)
Outlook Actions:
Issuer: CEC Entertainment, LLC
Outlook, Remains Negative
RATINGS RATIONALE
The Caa1 CFR reflects Moody's view that government imposed capacity
restrictions to help stem the spread of the coronavirus will remain
in place at least thru the end of the first quarter of 2021 and
possibly longer until health safety concerns abate. These
government imposed capacity restrictions as well as consumer's
health safety concerns will continue to impact CEC's ability to
materially improve credit metrics over the next 12 to 18 months
despite the reduction of debt as a part of the bankruptcy process.
For the LTM period ending September 30, 2020, leverage was
extremely high at over 15 times and will deteriorate further before
it begins to stabilize and gradually improve while interest
coverage will remain negative for an extended period. Overall,
CEC's business model is more affected by government imposed
capacity restrictions versus a standard restaurant given its high
reliance on in-restaurant entertainment which accounted for the
majority of earnings.
CEC's rating is also constrained by its current level of free cash
flow deficits and the likelihood that the free cash flow deficits
will continue until operating performance materially rebounds.
While CEC will have a meaningful cash balance following its
emergence from bankruptcy and will be able to pay-in-kind a portion
of its interest, it will need to stem its current pace of cash flow
deficits in order to preserve its liquidity as it will not have in
place any external liquidity sources such as a revolving credit
facility. The ratings also incorporate the company's high
seasonality of earnings in the first quarter and store
concentration in California, Texas and Florida. The ratings are
supported by CEC's meaningful scale, good EBITDA margins driven by
its entertainment focus versus peers and reasonable level of brand
awareness.
The negative outlook reflects Moody's view that debt to EBITDA will
remain extremely high and EBIT to interest coverage will stay very
weak over the next 12-18 months as government restrictions on
in-door dining and activities are unlikely to materially subside on
a consistent and sustained basis across the US for an extended
period.
The B2 rating on the first lien senior secured term loan is two
notches above the assigned CFR. The B2 reflects the first lien term
loan's senior position in the capital structure with respect to the
company's $175 million 2nd lien senior secured term loan and other
non-debt liabilities that include trade claims and lease rejection
claims.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded should operations return to a level that
is able to sustain debt to EBITDA below 6.5x and EBIT to interest
expense above 1.1x. An upgrade would also require maintaining at
least good liquidity.
Ratings could be downgraded if liquidity were to weaken for any
reason, if occupancy restrictions remain in place beyond current
assumptions or if earnings failed to improve following a wide
spread lifting of government restrictions on restaurant occupancy.
CEC is headquartered in Irving, Texas, and owns, operates, and
franchises a total of 558 Chuck E. Cheese stores and 114 Peter
Piper Pizza locations that provide family-oriented dining and
entertainment in 47 states and 15 foreign countries. CEC is owned
by a group that includes both pre-petition debt lenders as well as
new debt lenders. Revenue for the full year 2019 were about $913
million but have fallen to around $360 million for 2020.
The principal methodology used in these ratings was Restaurant
Industry published in January 2018.
CELLA III: To Seek Plan Confirmation on Feb. 24
-----------------------------------------------
Judge Meredith S. Grabill has entered an order approving the
Disclosure Statement, as amended, of Cella III, LLC.
The last day for receipt of written acceptances or rejections of
the Plan is fixed as Feb. 18, 2021, at 5 p.m. Central Time.
Feb. 18, 2021 is fixed as the last day for filing and serving
written objections to Confirmation of the Plan.
A video evidentiary hearing to consider confirmation of the Plan
will be held on Wednesday, Feb. 24, 2021, at 2:30 p.m, before the
undersigned Bankruptcy Judge.
About Cella III LLC
Cella III, LLC, owns the building and real estate bearing the
municipal address 4545, 4539 and 4531 Veteran's Memorial Highway,
Metairie, LA. This property is located at a prominent, heavily
traveled commercial intersection of Veterans Memorial Boulevard and
Clearview Parkway.
Cella III, LLC, filed a Chapter 11 petition (Bankr. E.D. La. Case
No. 19-11528) on June 5, 2019. In the petition signed by George A.
Cella, III, member and manager, the Debtor was estimated to have
$10 million to $50 million in assets and $1 million to $10 million
in liabilities.
The Hon. Jerry A. Brown oversees the case.
The Debtor tapped Congeni Law Firm, LLC as bankruptcy counsel;
Sternberg, Naccari & White, LLC as special counsel; and Patrick J.
Gros, CPA, APAC as accountant.
CHICAGO BOE: Fitch Assigns BB Rating on $450MM ULTGO 2021A Bonds
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB' rating to the following bonds to
be issued by the Chicago Board of Education, IL (CBOE or the
district):
-- $450,000,000 unlimited tax general obligation bonds (dedicated
revenues), series 2021A;
-- $125,565,000 unlimited tax general obligation refunding bonds
(dedicated revenues), series 2021B.
The bonds are expected to sell via negotiation the week of Jan. 25.
Series 2021A bond proceeds will finance various capex including
school facilities construction, ADA accessibility and technology
investments. Series 2021B bond proceeds will be used, together with
other available funds, to refund all or a portion of certain
outstanding unlimited tax general obligation (ULTGO) bonds for debt
service savings without extending final maturity.
Concurrently, Fitch affirms the 'BB' rating on the CBOE's Issuer
Default Rating (IDR) and outstanding ULTGO bonds. The Rating
Outlook is Stable.
SECURITY
The bonds are a general obligation of the district payable from
dedicated CBOE revenues in the first instance and the levy of ad
valorem taxes without limit as to rate or amount against all
taxable property in the city of Chicago.
ANALYTICAL CONCLUSION
The 'BB' IDR and ULTGO rating reflect the district's improved but
still weak financial resilience. Credit risks center on CBOE's
strained revenue environment, limited overall expenditure
flexibility, and elevated long-term liability burden driven by a
rising unfunded pension liability. A revised state funding
framework enacted in 2018 greatly improved the district's credit
profile, with significantly more state aid for both operations and
pension needs leading to consecutive surpluses from fiscal
2018-2020 that helped eliminate a large accumulated general fund
deficit. State funding levels remain a key uncertainty and downside
sensitivity in light of the fiscal pressures faced by the State of
Illinois (BBB-/Negative).
ECONOMIC RESOURCE BASE
Chicago is the economic engine for the Midwestern region of the
U.S. The city's residents are afforded abundant employment
opportunities within this deep and diverse regional economy. The
city also benefits from an extensive infrastructure network,
including a vast rail system and the third largest airport in the
U.S., which supports continued growth. The employment base is
represented by all major sectors with concentrations in the
wholesale trade, professional and business services and financial
sectors. Socioeconomic indicators are mixed as is typical for an
urbanized area, with above-average educational attainment levels,
above-average per capita income and elevated individual poverty
rates. Population trends are flat, and district enrollment is
declining.
KEY RATING DRIVERS
Revenue Framework: 'bbb'
Fitch expects natural revenue growth, absent new revenue action, to
keep pace with inflation, given expectations for property tax
growth and relatively flat state aid growth following the increases
associated with the new funding formula. Common of most U.S. school
districts CBOE's revenue outlook is strongly linked to the
financial position and funding policies of the state. Annual growth
in the property tax levy for operations is limited to the lesser of
5% or the rate of inflation (with exclusions attributed to new
construction values).
Expenditure Framework: 'bbb'
Fitch expects the natural pace of expenditure growth to exceed that
of revenues, necessitating ongoing budget management. After
significant cuts in recent years, some services have been restored,
adding a measure of expenditure flexibility. The state's commitment
to funding the normal cost of pensions and some health care costs
reduces pressure somewhat on fixed carrying costs but overall
flexibility remains limited.
Long-Term Liability Burden: 'a'
Fitch considers the district's long-term liability burden to be in
the elevated range relative to personal income. Pension liabilities
remain the largest component of the burden and Fitch views them as
less predictable and controllable than direct debt which is repaid
at a very slow pace.
Operating Performance: 'bb'
A more favorable state funding environment has improved the
district's operating results and fiscal position but reserves
remain low in relation to its historical revenue volatility and
minimal level of inherent budget flexibility.
ESG - Social: CBOE has an ESG score of '4' for labor relations and
practices, which reflect a history of labor-related spending
pressures and, in Fitch's opinion, a contentious relationship with
its teaching professionals, which staged an 11-day strike in 2019
and is weighing the possibility of collective action in protest of
the district's school reopening plan this year.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Sustained general fund revenue stability and improved reserve
levels that bolster the district's financial resilience to
cyclical economic and budgetary risks.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A weakening of recently improved liquidity and reserves or
increased risk to capital market access for necessary cash
flow borrowing.
-- A reversal of recent improvement in the state funding
environment.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
CURRENT DEVELOPMENTS
The outbreak of coronavirus and related government containment
measures worldwide has created an uncertain global environment for
U.S. state and local governments and related entities. Fitch's
ratings are forward-looking in nature, and Fitch will monitor the
severity and duration of the budgetary impact on state and local
governments and incorporate revised expectations for future
performance and assessment of key risks.
While the initial phase of economic recovery has been faster than
expected, GDP in the U.S. is projected to remain below its 4Q19
level until at least 3Q21. In its baseline scenario, Fitch
anticipates a slower recovery in early 2021 with vaccine rollout to
vulnerable, key workers and older individuals in 1H21 but limited
for most of the population until late 2021. Additional details,
including key assumptions and implications of the baseline scenario
and a downside scenario, are described in the report "Fitch Ratings
Coronavirus Scenarios: Baseline and Downside Cases - Update,"
published on Dec. 7, 2020, and "Fitch Ratings Updates Coronavirus
Scenarios for U.S. State and Local Government," published on Dec.
16, 2020 on www.fitchratings.com.
CBOE Fiscal Update
CBOE (or the district) concluded fiscal 2020 with its third
consecutive surplus, which totaled $45.3 million or 0.7% of total
spending. Fiscal 2020 results reflect lower than budgeted
expenditures associated with school closures and the receipt of
Coronavirus Aid, Relief, and Economic Security (CARES) Act revenues
to offset pandemic-related costs. The unrestricted general fund
position reached $488.8 million or 7.9% of spending and is marked
improvement from the $355 million (-6.7%) accumulated deficit
recorded in fiscal 2017. The district had achieved structural
balance and the restoration of reserves earlier than previously
expected, as a new state funding framework enacted in 2018 greatly
improved its revenues and cash flow.
However, the district's credit quality continues to reflect a
minimal level of inherent revenue and expenditure flexibility which
weighs on the operating performance assessment of 'bb'. CBOE lacks
a reserve cushion sufficient to offset the revenue stress under
Fitch's baseline scenario via the Fitch Analytical Stress Test
(FAST) model (a year one revenue decline of roughly 11%).
FAST relates historical revenue volatility to GDP to support the
assessment of operating performance under Fitch's criteria; FAST
has now been adjusted to reflect GDP parameters consistent with
Fitch's global coronavirus forecast assumptions. FAST provides a
relative sense of revenue risk exposure, but it is not a forecast
and actual revenue declines will vary from FAST results. The
district's historical revenue volatility is attributable to state
funding cuts. Should the revenue environment prove to be more
stable under the new state funding framework over a prolonged
period of time, Fitch may reevaluate the potential for future
revenue volatility as well as the resulting assessment of the
adequacy of reserves.
Liquidity Remains Low
Recent favorable operating results have materially reduced the need
for cash flow borrowing but unrestricted liquidity remained narrow
at the close of fiscal 2020 equivalent to roughly 10 days cash on
hand. The district issued $830 million of tax anticipation notes
(TANs) in fiscal 2020 that were completely repaid from the first
installment of property taxes (property taxes account for $2.9
billion, or roughly 50% of fiscal 2020 revenues). The maximum
amount of TANs outstanding in fiscal 2021 is expected to near $1
billion and accounts for an expected delay in property tax
collection dates given a Cook County ordinance which extends the
property tax payment date by two months. Notably, CBOE has
demonstrated consistent access to external sources of liquidity,
even during periods of fiscal stress and economic uncertainty.
Fiscal 2021 Budget Aided by Additional Federal Stimulus
The fiscal 2021 general fund budget reflects a sizable 9% yoy
increase in spending while projecting a modest $22 million deficit
related to unspent restricted prior year balances. Growth in the
budget is driven by a combination of factors including higher
salary costs associated with collectively bargained
cost-of-living-adjustments and additional hires, and additional
investments to support remote learning, PPE acquisition, charter
schools, and equity grants for high needs schools among other
spending areas.
CBOE expects to receive close to $800 million in federal aid under
the stimulus package signed into law in December, and it previously
received approximately $206 million under the CARES Act (of which
$78 million was allocated to cover fiscal 2020 eligible expenses).
The district budgeted $343 million of federal relief in the fiscal
2021 budget with the balance expected to shift to the fiscal 2022
budget and/or offset unexpected gaps that materialize in fiscal
2021.
Credit Quality Remains Sensitive to State Funding
The district remains sensitive to volatility in state aid levels
enacted by the State of Illinois (IDR BBB-/Negative). The state
budget for fiscal 2021 holds K-12 education funding flat, resulting
in a roughly $65 million reduction in the level of state aid the
district would have received if the state had funded the statutory
minimum prescribed under the evidence-based funding framework
enacted in 2018. However, the district is still expecting to
realize an increase in state aid of about $57 million on the year
largely due to increased pension funding. State aid to the district
is now determined as part of the overall funding decision for
schools statewide, rather than being considered separately, as had
been the case under the prior funding framework. In Fitch's
opinion, this makes the recent gains more durable despite the
financial challenges faced by the state. Furthermore, a
hold-harmless provision protects the district from
demographic-related cuts in state aid, which should be particularly
beneficial given the trend of declining enrollment.
The state has thus far held school districts harmless to state aid
cuts associated with an increase in remote learning. CBOE initiated
a phased reopening of its school facilities with roughly 35% of
eligible pre-K and cluster program students returning to in-person
learning on Jan. 11th. The Chicago Teachers Union (CTU) has
expressed concerns about the reopening and there are reports citing
a moderate number of unapproved teacher absences. The CTU plans to
meet this week to consider a proposal whereby its members would
collectively refuse to return to school facilities but continue to
teach remotely. Fitch will continue to monitor the progression of
CBOE's school reopening and risk associated with state funding
policies and/or the reemergence of labor strife that has negatively
impacted the district in the past.
CREDIT PROFILE
The Chicago Board of Education provides pre-K through 12 education.
The district ranks amongst the largest school districts in the U.S.
with a fiscal 2021 enrollment of 340,658. Enrollment levels
continue to decline reflecting demographic trends across the city
and student migration to private schools and other public
districts. Enrollment was down nearly 14,500 students in fiscal
2021 following a loss of more than 6,000 students the prior year.
CBOE's taxing jurisdiction is coterminous with the city of Chicago.
Chicago Public Schools manages the school system, which includes
514 districts that run elementary and high schools.
ESG CONSIDERATIONS
Chicago Board of Education (IL): Labor Relations & Practices: 4
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
CHS/COMMUNITY HEALTH: Fitch Rates Secured Notes Due 2029 'CC'
-------------------------------------------------------------
Fitch Ratings has assigned a 'CC'/'RR6' rating to CHS/Community
Health Systems, Inc.'s (CHS) junior priority secured notes due
2029. Proceeds are expected to be used to partially redeem the
company's junior priority secured notes due 2023. The ratings apply
to $12.8 billion of debt at Sept. 30, 2020. The Rating Outlook is
Positive, reflecting the company's slowly improving financial
flexibility and operating profile. However, gross debt leverage
remains high, and Fitch expects the company's absolute level of
cash generation to be positive but thin.
KEY RATING DRIVERS
Coronavirus Business Disruption Manageable: Fitch believes that
healthcare services companies, including CHS, should experience
lesser long-term effects from the pandemic than other corporate
sectors because demand is not as economically sensitive and often
times is not discretionary. However, depressed volumes of elective
patient procedures weighed meaningfully on healthcare providers'
revenue and operating margins in 2020. Elective procedures in both
inpatient and outpatient settings were cancelled to increase
capacity for COVID-19 patients and in response to government
orders, but volumes showed a strong pattern of recovery as
healthcare systems restarted operations.
Fitch believes CHS has sufficient headroom in the 'CCC' rating to
continue to absorb the effect of the pandemic on operations in
2021. This is predicated on an assumption that sporadic government
mandated shutdowns and business disruption related to spiking COVID
patient volumes in late 2020 and early 2021 will not significantly
disrupt a recovery in elective patient volumes that began in
mid-2020. There could be downward pressure on the rating if
business disruption accelerates and depresses cash flow more than
Fitch currently anticipates.
Very High Debt Burden: CHS encountered the pandemic with a highly
leveraged balance sheet despite efforts to reduce debt since the
acquisition of rival hospital operator Health Management
Associates, LLC (HMA) in late 2014. Fitch-calculated leverage at
Sept. 30, 2020 was 12.0x (and 8.4x considering grants provided by
the Coronavirus Aid, Relief and Economic Security (CARES) Act,
which Fitch has elected to exclude from its EBITDA calculation),
versus 5.2x prior to the acquisition. CHS paid down more than $3
billion of debt since the beginning of 2016 primarily using
proceeds from the spinoff of Quorum Health Corp. and a series of
smaller divestitures. While Fitch believes CHS's hospital sales
have been for multiples of EBITDA that are slightly deleveraging,
leverage increased steadily until late 2019, when some recovery in
the base business slightly boosted EBITDA.
Incremental Progress Addressing Capital Structure: In addition to
the divestiture funded debt repayment, CHS has slowly been
addressing concerns in the liquidity profile through a series of
transactions including debt exchanges completed in November and
December 2020. Unlike a June 2018 and a December 2019 debt
exchange, Fitch does not consider the 2020 transactions as
distressed debt exchanges, because the recent transactions took
advantage of market pricing and excess liquidity, rather than being
conducted to avoid bankruptcy or similar insolvency.
The junior priority secured notes issuance will begin to address
the large debt maturities remaining in each of 2023 and 2024.
Heightened confidence by Fitch that the company will be able to
address these without resorting to off market options is important
to improvement in the credit profile. The time frame gives CHS a
window to execute an operational turn-around plan focused on
restoring organic growth and improving profitability of hospitals
in the markets remaining after the divestiture program is
completed.
Forecast Reflects Hospital Divestitures: Fitch's $1.5 billion
operating EBITDA forecast for CHS in 2021 reflects completed
hospital divestitures and hospitals under definitive agreement for
sale. The company sold about 60 hospitals with nearly $6 billion of
annualized revenues during 2017-2020, raising about $2.8 billion of
cash proceeds and leaving a footprint of 93 hospitals at Sept. 30,
2020. The divestiture program is part of a long-term plan to
improve same-hospital margins and sharpen focus on markets with
better organic operating prospects. Divestiture proceeds have been
a source of debt paydown, but long-term repair of the balance sheet
will require the company to expand EBITDA through a return to
organic growth and expansion of profitability in the group of
remaining hospitals. CHS concludes the divestiture program in 2020
and Fitch does not include any further divestiture proceeds in its
forecast.
Headwinds to Less-Acute Volumes: CHS's legacy hospital portfolio
faced secular headwinds to less-acute patient volumes, which are
highly susceptible to weak macroeconomic conditions, seasonal
influences on flu and respiratory cases, and health insurer
scrutiny of short-stay admissions and preventable hospital
readmissions. CHS's same-hospital operating trends were weak in
2017 and 2018, although quarterly results showed sequential
improvement in yoy performance on various patient volume measures
throughout 2019. The operating EBITDA margin also showed signs of
stabilization during 2018-2019 after five consecutive quarters of
yoy declines in this metric in 1Q17 to 1Q18. The pandemic
influenced operating results in 2020, with CHS's 1H20 volume
declines and subsequent 3Q20 sequential recovery falling broadly in
line with acute care hospital industry peers.
DERIVATION SUMMARY
CHS's 'CCC' IDR reflects the company's weak financial flexibility
with high gross debt leverage and stressed FCF generation (cash
flow from operations [CFO] less capex and dividends). High leverage
partly reflects a legacy operating profile focused on rural and
small suburban hospital markets that are facing secular headwinds
to organic growth. A pivot toward faster growing and more
profitable markets at the conclusion of the divestiture program
should boost profitability to be more in line with higher rated
industry peers HCA Healthcare Inc. (HCA; BB/Stable), Tenet
Healthcare Corp. (THC; B/Stable) and Universal Health Services Inc.
(UHS; BB+/Stable).
KEY ASSUMPTIONS
Fitch's key assumptions within the Agency's rating case for the
issuer include:
-- A steady recovery in patient volumes following pandemic
related business disruption in 2020 resulting in 6% topline
growth in 2021;
-- EBITDA margin rebounds in 2021 to about 12%;
-- CFO of $400 million-$500 million annually in 2021-2023.
-- Capital intensity assumed at 3% in 2021-2023;
-- Fitch's 2020 revenue and EBITDA calculations for CHS do not
include CARES Act or other fiscal stimulus grant funding, but
these amounts are included in FCF (CFO less capex);
-- The forecast assumes no additional fiscal support and that the
CARES Act items that require repayment are repaid on the
schedule currently outlined by the Centers for Medicare and
Medicaid Services (CMS) in 2021 and 2022;
-- The forecast assumes no additional hospital divestiture
proceeds.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- The operational turn-around plan gains traction in the next
12-18 months, evidenced by stabilization in the operating
EBITDA margin and better growth in organic patient volumes;
-- An expectation that ongoing CFO generation will be sufficient
to fund investment in the remaining hospital markets to
support an expectation of improved organic growth;
-- An expectation that the company will be able to successfully
refinance debt maturities without resorting to off market
options like debt exchanges.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- A downgrade to 'CCC-' or below or a revision of the Outlook to
Stable or Negative would reflect an expectation that the
company will struggle to refinance upcoming maturities. This
would likely be a result of deterioration in revenues and
EBITDA, leading Fitch to expect either another distressed debt
exchange or a more comprehensive restructuring.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity During Pandemic: CHS has maintained a
comfortable liquidity cushion during the pandemic related business
disruption. Sources of liquidity include $1.8 billion of cash on
hand at Sept. 30, 2020 and $654 million of availability under the
$1 billion asset-based lending (ABL) facility, with about $150
million of LOC outstanding. CHS paid down $273 million outstanding
on the ABL earlier in 2020; availability is subject to a borrowing
base calculation.
Liquidity has also been supported by funding received through the
CARES Act. CHS received $719 million in grant funding and about
$1.2 billion in accelerated Medicare payments earlier in 2020.
Other sources of near-term liquidity enhancement include the
deferral of 2020 payroll tax payments. Some of these liquidity
enhancements are temporary measures that are required to be repaid
starting with the Medicare advances beginning in April 2021. Fitch
does not expect the unwinding of these temporary government funded
liquidity bolsters to strain CHS's financial profile. The company's
debt agreements do not include financial maintenance covenants.
Debt Issue Notching: Fitch's recovery assumptions result in a
recovery rate for CHS's approximately $8.7 billion of first-lien,
senior secured debt, which includes the ABL and senior secured
notes, within the 'RR1' range to generate a three-notch uplift to
the debt issue ratings from the IDR, to 'B'/'RR1'. The $3.1 billion
senior secured junior priority notes are notched down by two to
reflect estimated recoveries in the 'RR6' range, to 'CC'/'RR6', and
the $1.7 billion senior unsecured notes are notched down by three,
to 'C'/'RR6' to reflect estimated recoveries in the 'RR6' range and
structural subordination of these notes relative to the prior
ranking junior priority secured notes. Fitch assumes that CHS would
draw $700 million on the ABL prior to a bankruptcy scenario and
includes that amount in the claims waterfall.
Fitch estimates an enterprise value (EV) on a going concern basis
of $8.8 billion for CHS, after a deduction of 10% for
administrative claims. The EV assumption is based on
post-reorganization EBITDA after payments to noncontrolling
interests of $1.4 billion and a 7.0x multiple. Fitch's post
reorganization EBITDA estimate assuming ongoing deterioration in
the business is offset by corrective measures taken to arrest the
decline in EBITDA after the reorganization. Fitch does not believe
that the coronavirus pandemic has changed the longer-term valuation
prospects for the hospital industry and CHS's post-reorganization
EBITDA and multiple assumptions are unchanged from the last ratings
review. The post-reorganization EBITDA estimate is approximately
2.5% lower than Fitch's 2021 forecast EBITDA for CHS. Fitch's post
reorganization EBITDA estimate assumes ongoing deterioration in the
business, but is offset by corrective measures taken to arrest the
decline in EBITDA after the reorganization.
The 7.0x multiple employed for CHS reflects a history of
acquisition multiples for large acute care hospital companies with
similar business profiles as CHS in the range of 7.0x-10.0x since
2006 and the average public trading multiple (EV/EBITDA) of CHS's
peer group (HCA, UHS, and THC), which has fluctuated between
approximately 6.5x and 9.5x since 2011. CHS has recently sold
hospitals in certain markets for a blended multiple that Fitch
estimates is higher than the 7.0x assumed in the recovery analysis.
However, Fitch believes the higher multiple on recent transactions
is due to strong interest by strategic buyers in markets where they
have an existing footprint and so is not necessarily indicative of
the multiple that the larger CHS entity would command.
ESG CONSIDERATIONS
CHS has an ESG Relevance Score of '4' for Exposure to Social
Impacts due to societal and regulatory pressures to constrain
growth in healthcare spending in the U.S. This dynamic has a
negative impact on the credit profile, and is relevant to the
rating in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
CITCO ENTERPRISES: SBA Agrees to Use of Cash Collateral Thru July
-----------------------------------------------------------------
CITCO Enterprises, Inc. and the U.S. government, on behalf of its
agency, the US Small Business Administration, have advised the U.S.
Bankruptcy Court for the Central District of California, Northern
Division, that they have reached an agreement regarding Citco's
Motion for Authority to Use Cash Collateral and now desire to
memorialize the terms of the agreement into an Agreed Order.
The parties agree that any and all of the Debtor's Personal
Property Collateral constitutes the cash collateral of the SBA,
pursuant to 11 U.S.C. section 363(a). The SBA consents to the
Debtor's use of Cash Collateral on the terms set forth in the
stipulation. Other than the Debtor's use of Cash Collateral for the
purposes agreed to, the Debtor represents to the SBA it will make
no additional or unauthorized use of the Cash Collateral
retroactive from the SBA Loan date until entry of an Order
Confirming the Debtor's Plan of Reorganization or July 31, 2021,
whichever occurs earlier, for ordinary and necessary expenses as
set forth in the projections.
As adequate protection, the SBA will receive a replacement lien to
the extent that the automatic stay, pursuant to 11 U.S.C. section
362, as well as the use, sale, lease or grant results in a decrease
in the value of the SBA's interest in the Personal Property
Collateral on a post-petition basis. The replacement lien is valid,
perfected and enforceable and will not be subject to dispute,
avoidance, or subordination. The replacement lien need not be
subject to additional recording. The SBA is authorized to file a
certified copy of the cash collateral order and any other necessary
and related documents to further perfect its lien.
In July last year, CITCO obtained a $150,000 loan from the SBA. The
terms of the SBA Note require the Debtor to pay principal and
interest payments of $731.00 every month beginning 12 months from
the date of the Note over a 30-year term. The SBA Loan has an
annual rate of interest of 3.75% and may be prepaid at any time
without notice or penalty. Under a prior stipulation, the SBA
agreed to the Debtor's use of cash collateral until January 31,
2021.
The parties agree that SBA's claim under the Loan will be allowed
as a secured claim in the amount of $150,000. The Debtor agrees
that payments under the SBA Loan will begin on July 1, 2021,
notwithstanding whether Plan confirmation has occurred or not.
The Debtor also agrees to timely provide all monthly financial
information, maintain insurance on the Personal Property
Collateral, and designate the SBA as a loss payee or additional
insured in accordance with the SBA Loan and related loan documents,
and provide proof of insurance within seven days upon the SBA's
written request.
The Stipulation will remain in effect until July 31, 2021, or until
the Parties enter into an amended Stipulation or a consensual
Chapter 11 Plan, or until the case is converted or dismissed,
whichever first occurs.
A hearing to consider the Stipulation is set for Feb. 2 via Zoom.
A copy of the stipulation is available at https://bit.ly/3iKMFcI
from PacerMonitor.com.
About CITCO Enterprises, Inc.
CITCO Enterprises, Inc., a company that sells Halloween costumes,
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 20-11039) on Aug. 25,
2020. Caesar Ho, chief executive officer, signed the petition. At
the time of filing, the Debtor disclosed $343,141 in assets and
$2,324,905 in liabilities.
Judge Martin R. Barash oversees the case.
The Law Offices of Michael Jay Berger serves as the Debtor's legal
counsel.
CLAUDIA JOSEFINA N. FRAUSTO: Onate Offers $165K for Omaha Property
------------------------------------------------------------------
Claudia Josefina Newton Frausto and Eduardo Teodulo Torres ask the
U.S. Bankruptcy Court for the District of Nebraska to authorize the
sale of the real property commonly known as 11621 Drexel Street, in
Omaha, Nebraska, legally described as Lot 115, in Brookhaven West,
A Subdivision, as surveyed, platted and recorded in Douglas County,
Nebraska, to Lino Onate for $165,000.
The Objection Deadline is Feb. 2, 2021.
The following hold lien on the property: (i) Pinnacle Bank (first
lienholder), (ii) the Internal Revenue Service (second lienholder),
and (iii) Nebraska Department of Revenue ("NDOR") (third
lienholder). These liens will be paid in full subject to a proper
payoff.
Great Western Bank holds a judicial lien on the property arising
out of a judgment rendered in the Douglas District Court bearing
case number CI 18-909 (POC No. 10). It will receive all net sale
proceeds from the sale, after the payoff of the Pinnacle, IRS and
NDOR liens that currently encumber the property, except that the
bank will allow the Debtors to retain $10,000 of the net sale
proceeds.
The sale will be free and clear of liens, with such liens to attach
to the proceeds of the Sale.
The anticipated closing date is Feb. 10, 2021.
The transfer of the title to real property as described will not
result in a tax liability to the Federal or State government
arising out of said transfer.
By the Motion, the Debtors pray that the Court grants the relief
sought.
A copy of the Agreement is available at https://bit.ly/3p3x1f9 from
PacerMonitor.com free of charge.
Claudia Josefina Newton Frausto and Eduardo Teodulo Torres sought
Chapter 11 protection (Bankr. D. Neb. Case No. 20-81097) on Sept.
8, 2020.
CLEANSPARK INC: Investigating Short Seller Culper Research
----------------------------------------------------------
CleanSpark, Inc. has become aware of a report making false
accusations against CleanSpark and its officers. The publisher of
this false report is an unknown entity or group hidden behind the
facade of "Culper Research," which disguises the identity of the
actual authors.
The apparent purpose of the Culper Research "report" is to cover or
profit from the publisher's short positions in the Company, which
the publisher expressly acknowledges holding in the report itself.
Holders of short positions trade on an expected decline in the
price of a stock. Such holders only profit on such positions when
the stock declines and incur potentially unlimited losses if the
price does not decline.
CleanSpark takes seriously any accusations of impropriety, stands
behind its prior statements and disclosures, and will not tolerate
unfounded and reckless claims against the Company. CleanSpark has
retained the law firm of Wilk Auslander LLP in connection with this
matter and will be vigilant in investigating the sources of these
misrepresentations, including the identity of those veiled behind
the entity calling itself Culper Research. We are aware that
litigation premised on the so-called "Culper Report" has been filed
and that plaintiff's firms are trolling for additional
shareholders. The Company will vigorously and relentlessly defend
itself against these actions and against the kind of baseless
accusations made by those behind the "report." We also invite
anyone who has any information regarding the persons or entities
behind Culper Research to contact the Company at the Investor
Relations email address or contact number provided below.
For accurate information about the Company, Shareholders should
refer to the Company's disclosure documents filed with U.S.
Securities and Exchange Commission, which are available online
under the Company's EDGAR profile at www.sec.gov or on the Investor
Relations tab of the Company's website at www.CleanSpark.com.
CleanSpark, Inc.
Investor Relations
(801) 244-4405
IR@cleanspark.com
About CleanSpark
Headquartered in Bountiful, Utah, CleanSpark, Inc. --
www.cleanspark.com -- is in the business of providing advanced
energy software and control technology that enables a plug-and-play
enterprise solution to modern energy challenges. Its services
consist of intelligent energy monitoring and controls, microgrid
design and engineering and consulting services. Its software
allows energy users to obtain resiliency and economic optimization.
The Company's software is uniquely capable of enabling a microgrid
to be scaled to the user's specific needs and can be widely
implemented across commercial, industrial, military and municipal
deployment.
CleanSpark reported a net loss of $23.35 million for the year ended
Sept. 30, 2020, a net loss of $26.12 million for the year ended
Sept. 30, 2019, and a net loss of $47.01 million for the year ended
Sept. 30, 2018.
As of Sept. 30, 2020, the Company had $22.34 million in total
assets, $5.91 million in total liabilities, and $16.43 million in
total stockholders' equity.
CONTURA ENERGY: To Change Name to Alpha Metallurgical Resources
---------------------------------------------------------------
Contura Energy, Inc. will change its name, effective Feb. 1, 2021,
to Alpha Metallurgical Resources, Inc.
The Company expects its common stock, currently traded on the New
York Stock Exchange under the CTRA ticker symbol, to begin trading
under its new ticker symbol, AMR, on Feb. 4, 2021.
The rebranding effort more accurately reflects the Company's
strategic focus on the production of metallurgical coal as a
critical feedstock for steel production. Contura's recent
divestiture of the Cumberland Mine in Pennsylvania largely marked
the company's exit from the thermal coal business.
The Company said the new name, Alpha Metallurgical Resources, is
both an acknowledgment of its rich history and a commitment to a
fresh, bold vision for the future.
"Over a year ago, we outlined our vision to make Contura a premier
metallurgical coal producer," said David Stetson, Contura's
chairman and chief executive officer. "Thanks to the
transformative work of our team over the last several months, that
vision has become a reality. Bringing back the Alpha name is not
only meaningful to us and our history, but it also serves as an
outward display to external stakeholders of the sharpened focus we
have on metallurgical coal. We are excited to announce this
important milestone and we look forward to fully unveiling the
Alpha Metallurgical Resources brand when it becomes effective on
February 1."
About Contura Energy
Contura Energy (NYSE: CTRA) -- http://www.conturaenergy.com-- is a
Tennessee-based coal supplier with affiliate mining operations
across major coal basins in Pennsylvania, Virginia and West
Virginia. With customers across the globe, high-quality reserves
and significant port capacity, Contura Energy reliably supplies
both metallurgical coal to produce steel and thermal coal to
generate power.
Contura Energy reported a net loss of $316.32 million for the year
ended Dec. 31, 2019. As of Sept. 30, 2020, the Company had $1.92
billion in total assets, $1.58 billion in total liabilities, and
$342.96 million in total stockholders' equity.
* * *
As reported by the TCR on Dec. 22, 2020, S&P Global Ratings
affirmed its 'CCC+' issuer credit rating on U.S.-based coal
producer Contura Energy Inc. and revised the liquidity assessment
to less than adequate. S&P said, "We view Contura's business as
vulnerable due to declining thermal demand and prices, which is
driving the company to exit these operations and begin reclamation
work at some of its mines."
In April 2020, Moody's Investors Service downgraded all long-term
ratings for Contura Energy, Inc., including the Corporate Family
Rating to Caa1 from B3. "Contura has idled the majority of its
mines due to weak market conditions. Moody's expects that demand
for metallurgical coal will weaken further in the near-term as
blast furnace steel producers adjust to reduced demand due to the
Coronavirus," said Ben Nelson, Moody's vice president -- senior
credit officer and lead analyst for Contura Energy, Inc. "The
rating action is entirely driven by macro-level concerns resulting
from the global outbreak of coronavirus."
COWBOY CLEANERS: Unsecured Creditors to Recover 10% in 72 Months
----------------------------------------------------------------
Cowboy Cleaners, Ltd., submitted a Second Amended Plan of
Reorganization on Jan. 19, 2021.
The Court approved the Disclosure Statement on Jan. 19, 2021, and
set a hearing for March 3, 2021 at 9:00 a.m. to consider
confirmation of the Plan.
The Plan contemplates the distributions from the proceeds from the
Debtor's future business.
Under the Plan, The Class 1 Creditors, to the extent that their
claims are allowed, will be paid pursuant to their contract. Ally
Financial will be paid $324.48 per month. Leaf Capital Funding,
Acct. Nos. 7949 & 2405, will be paid $725.01 per month. TD Auto
Finance, Acct. No. 2217 will be $622.73 per month. TD Auto Finance,
Acct. No. 2149, shall be paid $458.19 per month. All secured
creditors will retain their lien on the collateral until paid in
full under the Plan.
Class 4 unsecured claims will be paid 10% of their outstanding
claims over a period of 72 months pro rata with 3% interest
commencing 30 days after the date of confirmation.
The Debtor will retain its ownership interest under this Plan. The
Debtor will repurchase all common stock (1,000) of the debtor at
its par value rate ($1.00) assigned during its inception. The
debtor believes this to be an equitable trade as the entity hold no
equity and thereby is not of value further than the debt held
against it.
The Debtor has continued to operate at an overall profit. The
Debtor has continued to remain current on its post-petition tax
liability and make agreed upon cash collateral payments.
The Plan contemplates distributions from the proceeds from the
Debtor's future business. The Debtor anticipates that the business
will be operated profitably, and that it will be able to pay the
allowed claims of the creditors in Classes as scheduled.
A full-text copy of the Amended Disclosure Statement dated Jan. 15,
2021, is available at https://bit.ly/3633QkM from PacerMonitor.com
at no charge.
A full text copy of the Second Amended Plan dated Jan. 19, 2021, is
available at:
https://bit.ly/3sXN54f
Attorney for the Debtor:
JAMES S. WILKINS
JAMES S. WILKINS, P.C.
1100 NW Loop 410, Suite 700
San Antonio, TX 78213
Tel: (210) 271-9212
Fax: (210) 271-9389
About Cowboy Cleaners
Cowboy Cleaners, Ltd., is a San Antonio, Texas-based company that
offers cleaning services. It conducts business under the name
Cowboy Cleaners, Inc.
Cowboy Cleaners sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-50897) on March 8,
2020. The petition was signed by Cowboy Cleaners President
Victoria Maisel. At the time of the filing, Debtor had estimated
assets of less than $50,000 and liabilities of between $500,001 and
$1 million.
Judge Craig A. Gargotta oversees the case. James S. Wilkins, Esq.,
at Wilkins & Wilkins, L.L.P., is Debtor's legal counsel.
DESOTO OWNERS: May Use Cash Collateral Thru March 31
----------------------------------------------------
Judge Jil Mazer-Marino of the U.S. Bankruptcy Court for the Eastern
District of New York approves the stipulation between Desoto Owners
LLC and Romspen US Master Mortgage, LP authorizing the Debtor to
use cash collateral on an interim basis through March 31, 2021.
The parties stipulate and agree that the Debtor is authorized to
use cash, which is the proceeds of collateral in which the Lender
has a valid security interest, to pay immediate and necessary
post-petition expenses for maintenance, operations and preservation
of the Lender's collateral, as set forth in the budget, and for no
other purpose. In the event the Debtor wishes to pay an expense
which does not appear in the Budget or is in an amount more than
$2,000 of that budgeted, the Debtor will notify Romspen's attorneys
via email -- to lleyva@coleschotz.com, jkim@coleschotz.com,
myellin@coleschotz.com and jfrumkin@coleschotz.com -- of the
proposed payment and the justification therefor.
The Debtor is authorized to make the payment if Romspen does not
object within two full business days after receipt of the email
notification. If Romspen timely objects to the payment, then all
parties consent to an expedited hearing before the Bankruptcy Court
on whether the payment will be permitted.
Within 10 days following the last calendar day for the months of,
January 2021, February 2021, and March 2021, the Debtor will
provide to the Lender a complete reconciliation of all amounts
expended under the Budget for the prior month, as applicable.
The Debtor will make these adequate protection payments to the
Lender: (i) Within three days of entry of this order, or the
Debtor's receipt of back rent payments from Hudson's Furniture,
whichever is later, the Debtor will turn over to the Lender the
back rent payments net of sales tax, and (ii) on April 10, 2021,
the Debtor will turn over all Cash Collateral in excess of $55,495.
The Lender is authorized to apply the amounts turned over to it to
the Lender's claim against the Debtor. The Debtor will also keep
segregated all proceeds of rental income.
A copy of the order is available at https://bit.ly/3o5lSZL from
PacerMonitor.com.
About Desoto Owners LLC
Desoto Owners LLC owns a real property commonly known as the Desoto
Square Mall, which is located at 303 301 Blvd W., Bradenton, Fla.
and situated on a 58-acre parcel of land.
Desoto Owners LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
20-43387) on Sep. 22, 2020. The petition was signed by Moshe
Fridman, chief executive officer. At the time of filing, the
Debtor estimated $1 million to $10 million in assets and $10
million to $50 million in liabilities. The Debtor considers itself
a Single Asset Real Estate (as defined in 11 U.S.C. Section
101(51B)).
Judge Jil Mazer-Marino presides over the case.
Isaac Nutovic, Esq. at Nutovic & Associates represents the Debtor
as counsel.
Romspen US Master Mortgage, LP, the Debtor's lender, is represented
by Leo Leyva, Esq., at Cole Schotz P.C.
DETROIT, MI: S&P Alters Outlook to Stable on Unlimited-Tax GO Debt
------------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative on
Detroit, Mich.'s unlimited-tax general obligation (GO) debt. S&P
also affirmed its 'BB-' rating on the city's debt outstanding.
At the same time, S&P revised the outlook to stable from negative
on its 'BB+' ratings on the Michigan Finance Authority's Local
Government Loan Program bonds (City of Detroit financial recovery
income tax revenue and refunding local project bonds), series
2014F-1 and F-2, issued for Detroit and secured by its municipal
income taxes, and on the authority's Local Government Loan Program
bonds (Public Lighting Authority [PLA] local project bonds), series
2014B, issued for the Detroit PLA and secured by the city's user
utility tax (UUT).
Lastly, S&P assigned itsr 'BB-' long-term rating to Detroit's $175
million unlimited-tax GO bonds (social bonds). The bonds will be
issued in two series, a tax-exempt $135 million series 2021A and a
taxable $40 million series 2021B. The outlook is stable."
"The outlook revision on the GO bonds reflects our view that
Detroit's reserves are likely to remain very strong and well above
previous projections, despite the unprecedented revenue losses that
are now forecasted at nearly $430 million." said S&P Global Ratings
credit analyst John Sauter. "The city achieved this with persistent
cost-cutting and maximizing of federal funds, both of which we
expect to continue. Detroit's retention of very strong reserves,
built up through years of strong surpluses, support credit
stability as it gives the city flexibility to absorb a potentially
slower revenue recovery and prepare for increasing pension
obligations."
Ratings in the 'BB' category are differentiated from those in the
'B' category, based on S&P's view that exposure to adverse
business, financial, or economic conditions could impair an
obligor's ability to meet financial commitments, but is not likely
to.
"Despite the extreme pressures of the pandemic, Detroit's ability
to meet obligations has not wavered, and we expect this will hold
true over at least the next year," said Mr. Sauter.
The 'BB+' ratings reflect application of S&P's "Priority-Lien"
criteria (published Oct. 22, 2018, on RatingsDirect), which factors
in both the strength and stability of the pledged revenues, as well
as the general credit quality of the municipality where taxes are
distributed and/or collected (the obligor's creditworthiness [OC]).
The priority-lien rating on both pledges is limited by S&P's view
of Detroit's creditworthiness. The outlook revision on the GO
rating therefore results in the same outlook revision on these
income tax- and UUT-secured obligations.
Detroit was hit fast and hard at the onset of the pandemic, and
officials acted quickly with strong emergency response and
cost-cutting. The city managed to add to reserves in fiscal 2020
and still expects a large drawdown in fiscal 2021, though not
nearly as much as originally forecasted. It expects its fiscal 2022
budget proposal (due in March) will include solutions to close this
year's revenue gap and S&P anticipates the city can do this without
a substantial appropriation of reserves. Next year's performance
will weigh heavily on the pace of job and revenue recovery, or more
specifically, how soon remote workers come back downtown and
casinos and restaurants fully reopen. Detroit has recovered all but
about 11,000 of the 69,000 jobs lost last April, but its
entertainment and hospitality industry remains saddled, which
contributes to the still high 18.7% unemployment rate (November
2020). Still, within the last week, the Biden Administration
proposed a new federal stimulus package and the State of Michigan
announced that its revenues forecasts are exceeding expectations.
These factors, combined with a potentially more federally
coordinated approach to pandemic relief and vaccine roll-out, offer
increasing potential for revenue rebound.
Last November voters approved (with over 70% passage) up to $250
million in unlimited-tax GO bonds to continue funding the city's
neighborhood improvement and blight remediation program. S&P views
the passage as significant in that in will further a key component
of the administration's long-term vision for strengthening the tax
base and do so with a dedicated debt millage as opposed to funding
through reserves or the operating budget. In addition to the
remaining neighborhood improvement bonds, the city retains $40
million in voter-authorized capital improvement bonds (unlimited
tax). On issuance, unlimited- and limited-tax GO debt will total
approximately $1.7 billion.
The health and safety aspects of the pandemic caused a sudden,
substantial decline in operating revenues, and are reflected as a
social risk in S&P's analysis of environmental, social, and
governance (ESG)-related risks.
DIS TRANSPORTATION: Hires Doug Zandstra CPA as Accountant
---------------------------------------------------------
DIS Transportation LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Michigan to hire Doug Zandstra
CPA CFE EA Inc. as its accountant.
The firm's services will include:
a. filing of Debtor's federal and state corporate income tax
returns when necessary;
b. providing financial consulting, advice, research, planning
and analysis services regarding tax compliance and tax consulting
services; and
c. preparing quarterly reports and financial documents.
Doug Zandstra's customary rates are:
a. $200 an hour for Doug Zandstra, CPA, EA, CFE; principal.
b. $75 for bookkeeping and administrative services.
Doug Zandstra is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code, according to court
papers filed by the firm.
The firm can be reached through:
Doug Zandstra, CPA CFE EA
Doug Zandstra CPA CFE EA Inc.
29 Pearl St NW, Ste 225
Grand Rapids, MI 49503
Phone: 616 970 3000
Email: doug@dougzandstra.com
About DIS Transportation LLC
DIS Transportation LLC and DIS Express, Inc. filed for protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Mich.
Lead Case No. 20-03408) on Nov. 10, 2020.
At the time of the filing, DIS Transportation had estimated assets
of between $100,001 and $500,000 and liabilities of between
$500,001 and $1 million. DIS Express listed under $50,000 in both
assets and liabilities.
Judge Scott W. Dales oversees the jointly administered cases.
Chase Bylenga Hulst, PLLC and Doug Zandstra CPA CFE EA Inc. serve
as the Debtor's legal counsel and accountant, respectively.
EAGLE HOSPITALITY: Jan. 28 Deadline Set for Panel Questionnaires
----------------------------------------------------------------
The United States Trustee is soliciting members for an unsecured
creditors committee in the bankruptcy case of EHT US1, Inc.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://bit.ly/397PnpR and return it to
Richard.Schepacarter@usdoj.gov at the Office of the United States
Trustee so that it is received no later than 5:00 p.m., on Jan. 28,
2021.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust and Eagle Hospitality Business Trust. Based in Singapore,
Eagle H-REIT is established with the principal investment strategy
of investing on a long-term basis, in a diversified portfolio of
income-producing real estate which is used primarily for
hospitality and/or hospitality-related purposes, as well as real
estate-related assets in connection with the foregoing, with an
initial focus on the United States.
EHT US1, Inc., and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021.
EHT US1, Inc., estimated $500 million to $1 billion in assets and
liabilities as of the bankruptcy filing.
The Debtors tapped PAUL HASTINGS LLP as bankruptcy counsel; FTI
CONSULTING, INC., as restructuring advisor; and MOELIS & COMPANY
LLC, as investment banker. COLE SCHOTZ P.C. is the Delaware
counsel. RAJAH & TANN SINGAPORE LLP is Singapore Law counsel, and
WALKERS is Cayman Law counsel. DONLIN, RECANO & COMPANY, INC., is
the claims agent.
ECOARK HOLDINGS: Nepsis Reports 12.27% Stake as of Dec. 31
----------------------------------------------------------
Nepsis, Inc. disclosed in an amended Schedule 13D filed with the
Securities and Exchange Commission that as of Dec. 31, 2020, it
beneficially owns 2,647,871 shares of common stock of Ecoark
Holdings, Inc., which represents 12.27 percent of the 21,571,524
outstanding shares. A full-text copy of the regulatory filing is
available for free at:
https://www.sec.gov/Archives/edgar/data/1437491/000108514621000205/zestda8_11521.htm
About Ecoark Holdings
Rogers, Arkansas-based Ecoark Holdings, Inc., founded in 2011,
Ecoark is a diversified holding company. Ecoark Holdings has four
wholly-owned subsidiaries: Ecoark, Inc., a Delaware corporation
which is the parent of Zest Labs, Inc., 440IoT Inc., Banner
Midstream Corp., and Trend Discovery Holdings Inc. Through its
subsidiaries, the Company is engaged in three separate and distinct
business segments: (i) technology; (ii) commodities; and (iii)
financial.
Ecoark reported a net loss of $12.14 million for the year ended
March 31, 2020, compared to a net loss of $13.65 million for the
year ended March 31, 2019. As of Sept. 30, 2020, the Company had
$33.50 million in total assets, $15.71 million in total
liabilities, and $17.79 million in total stockholders' equity.
ENDURANCE INTERNATIONAL: S&P Assigns 'B' ICR; Outlook Stable
------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to
Endurance International Group Holdings Inc. The rating agency also
assigned its 'B' issue-level and '3' recovery ratings to the
company's first-lien debt.
Endurance, a provider of cloud-based solutions for small and
midsize businesses (SMBs) to build, promote, and optimize their
online presence, entered into a definitive agreement to be acquired
by Clearlake Capital Group, L.P. Clearlake Capital has also made a
strategic investment in Web.com and plans to merge the two
companies resulting in Clearlake and Siris Capital each owning 50%
of the new entity. Concurrently, Endurance's digital marketing
segment will be spun off.
The pro forma capitalization will include approximately $1.2
billion of sponsors equity, a $2.295 billion first-lien term loan,
an undrawn $275 million revolver, and $640 million of unsecured
debt to be rated at a later date.
S&P said, "The stable outlook reflects our expectation that the
company's cost optimization efforts will lead to a material
improvement in EBITDA margins and reduce leverage toward the
high-6x area by the end of 2021."
"The 'B' issuer credit rating reflects our expectation that
Endurance's merger with Web.com will improve business diversity and
expand customer base while increasing initial pro forma leverage to
the low 7x area at close. We expect leverage to fall to the high-6X
area by the end of 2021 from cost synergies from combining the two
businesses." The rating also reflects its relatively narrow
end-market focus in the domain registration and web-hosting
industries, which are highly competitive and feature low barriers
to entry. Partly offsetting these factors are the company's high
recurring revenue base, some good brand presence, and fair scale
with annual revenue exceeding $1 billion."
A direct competitor to Endurance, Web.com provides domain and web
hosting services. Over the past two years, Web.com has shifted its
focus to increasing profitability and stability of cash flow
through portfolio optimization such as winding down its legacy
offerings and the sale of its enterprise business in 2020. As it
streamlines its operations and focuses on accretive solutions,
Web.com also took significant cost-reduction actions, amounting to
more than $100 million of cost cuts over two years, although at a
slower pace than S&P previously expected.
The domain and web-hosting industry is large and expanding,
benefiting from a demand surge as more small to midsize businesses
(SMBs) look to digitize their businesses and increase online
presence amid the COVID-19 pandemic. While S&P expect the
competition from GoDaddy and nontraditional competitors, such as
social media platforms, to remain high, the addressable market
remains large enough to support growth for all market participants.
Endure Digital offers mission-critical solutions and benefits from
a sticky client base with long tenure. Its good revenue visibility
comes from contracts that are automatically renewed and collected a
month in advance. Although the company's churn rates have remained
stable, there could be slight downside pressure on its revenue due
to trailing SMB failures related to the pandemic.
S&P said, "We expect the combined revenue to be muted, increasing
by 1% in 2021 as modest growth in subscribers and average revenue
per user is offset by the continued wind down of Web.com's legacy
businesses. The combined company offers increased scale,
longer-term cross-selling prospects, and an imminent large cost
synergy realization plan. Endurance currently operates several of
its brands independently, with separately dedicated management
teams and technology stacks. Aside from reducing duplicative costs,
we expect the company to employ Web.com's established offshore
infrastructure to consolidate resources and integrate the
fragmented platforms. We expect combined EBITDA margins to rise to
the high-30% area in 2021 from about 35% in 2020, mainly stemming
from cost synergy realization. We expect the company to realize the
entire cost-savings plan over the next two years. Nonetheless,
near-term risks could stem from an uptick in client attrition or
inability to grow bookings during its cost control phase."
"We estimate Endure's initial pro forma leverage of low 7x as of
Dec. 31, 2020, and expect leverage to decline toward the high-6x
area by the end of 2021. Our calculation excludes EBITDA
contribution from Endurance's digital marketing segment to be spun
off. We also expect Endure to generate free cash flow of $190
million-$200 million over the next year, and improve further as
acquisition-related one-time costs roll off and cost-savings goals
are met."
"The stable outlook on Endure Digital reflects our expectation that
the company's cost-cutting efforts will materially improve EBITDA
margins and reduce leverage toward the high-6x area by the end of
2021. The stable outlook also reflects our expectation for
low-single-digit percent organic customer growth in its core
product offerings as the company focuses on product integration,
customer retention, and cost cuts. We also expect free cash flow to
debt in the high-mid-single–digit percent over the next 12
months."
"We could lower the rating on Endure Digital if there are delays in
its cost-reduction plans such that we expect leverage to rise and
remain above 7.5x over the coming year. This could occur if Endure
cannot deliver targeted cost cuts, its operations significantly
underperform our base case, or it engages in a large debt-funded
acquisition. We could lower the rating if intensified competition
leads to significant erosion of its core domain and web-hosting
business, and free cash flow as a percentage of debt decreases to
the low-single-digit area."
"Although unlikely over the next 12 months, we could consider an
upgrade if the company grows revenue organically and further
expands EBITDA margins, such that it reduces leverage to below 5x
for an extended period. We expect revenue growth to come from
adding new customers in domain registration and selling
higher-value services to the current base. An upgrade would also
require a commitment to operating with leverage consistently below
5x considering acquisitions and/or shareholder returns."
FANNIE MAE: Appoints New EVP, Chief Risk Officer
------------------------------------------------
Ryan A. Zanin accepted an appointment to become Federal National
Mortgage Association's executive vice president and chief risk
officer, effective Feb. 1, 2021. Mr. Zanin has over 30 years of
experience in financial services and over 20 years of experience in
risk management. Mr. Zanin served as president and CEO of the
Restructuring & Strategic Ventures Group at GE Capital from 2015
until his retirement from General Electric in July 2018.
Previously, Mr. Zanin served as chief risk officer of GE Capital
from 2010 to 2015 and again served in that role from November 2016
until his retirement. Before joining GE Capital, Mr. Zanin served
as managing director and chief risk officer, International Capital
Markets, at Wells Fargo & Company, from 2008 to 2010, and as chief
risk officer, Corporate and Investment Bank at Wachovia
Corporation, from 2006 to 2008. Before that, he spent 14 years in
leadership roles across Deutsche Bank AG and Bankers Trust
Company.
Mr. Zanin is currently a member of Fannie Mae's Board of Directors.
In connection with his appointment as the company's chief risk
officer, Mr. Zanin notified the company on Jan. 20, 2021 of his
resignation from Fannie Mae's Board of Directors, effective Jan.
31, 2021.
About Fannie Mae and Freddie Mac
Federal National Mortgage Association (OTCQB: FNMA), commonly known
as Fannie Mae -- http://www.FannieMae.com-- is a
government-sponsored enterprise (GSE) that was chartered by U.S.
Congress in 1938 to support liquidity, stability and affordability
in the secondary mortgage market, where existing mortgage-related
assets are purchased and sold. Fannie Mae helps make the 30-year
fixed-rate mortgage and affordable rental housing possible for
millions of Americans. The Company partners with lenders to create
housing opportunities for families across the country. A brother
organization of Fannie Mae is the Federal Home Loan Mortgage
Corporation (FHLMC), better known as Freddie Mac Freddie Mac
(OTCBB: FMCC) -- http://www.FreddieMac.com/-- was established by
Congress in 1970 to provide liquidity, stability and affordability
to the nation's residential mortgage markets. Freddie Mac supports
communities across the nation by providing mortgage capital to
lenders.
About Fannie Mae's Conservatorship
and Agreements with Treasury
Fannie Mae has operated under the conservatorship of FHFA since
Sept. 6, 2008. Treasury has made a commitment under a senior
preferred stock purchase agreement to provide funding to Fannie Mae
under certain circumstances if the company has a net worth deficit.
Pursuant to this agreement and the senior preferred stock the
company issued to Treasury in 2008, the conservator has declared
and directed Fannie Mae to pay dividends to Treasury on a quarterly
basis for every dividend period for which dividends were payable
since the company entered conservatorship in 2008.
FF FUND: Dennis Hersch Says Franzone Plans Unconfirmable
--------------------------------------------------------
Dennis S. Hersch objects to the adequacy of the Disclosure
Statement for the coordinated Chapter 11 Plans of Reorganization
proposed by the Fund and its co-debtor, F5 Business Investment
Partners.
"The Fund is a registered private limited partnership whose
founder, Andrew Franzone, defrauded dozens of investors out of more
than $40 million of invested capital. F5 is the Fund's principal
asset-holding subsidiary. Franzone and an entity he owns and
controls stand accused of fraud, breach of duty, and breach of
contract in three separate lawsuits brought by investors in the
Fund and other entities they manage, and the Fund is the subject of
an active SEC investigation. Brazenly undeterred, or perhaps just
unmoored from reality, Franzone has caused the Fund and F5 to file
the Plans and to seek approval of their related Disclosure
Statement. The Court should not approve the Disclosure Statement
because it lacks "adequate information" under Bankruptcy Code
Section 1125(b) and because the Plans are patently unconfirmable
under multiple prongs of Section 1129(a). Among other things, the
Plans (i) are not proposed in good faith, (ii) are not feasible,
and (iii) violate the United States Supreme Court's mandate that
the new value corollary to the absolute priority rule is not
available when a plan of reorganization grants an exclusive
opportunity to purchase equity in the reorganized debtor without a
market test to determine the adequacy of its new value
contribution," Hersch tells the Court.
Hersch points out that the Disclosure Statement does not contain
adequate information. Mr. Hersch's counsel will work with the
Debtors' counsel to address proposed additional and correcting
disclosures, including a set of financial statements for each
debtor (none are provided) and disclosure of:
(i) the individual investments that comprise the Debtors'
investment portfolio and information to that would permit parties
in interest to assess what those investments may be worth and when
they may be monetized;
(ii) the status of the investment accounts of the Fund's limited
partners;
(iii) the existence and nature of the litigation pending against
Franzone;
(iv) the existence and nature of the SEC's active investigation
of the Fund and Franzone;
(v) the history and detailed terms of the Fund's investment in
Acadaca and Acadaca's loans to Franzone or his affiliates, the
related cash flows associated with those dealings, a summary of the
Fund's potential claims against Acadaca and its principals,
including Jason Feingold, a summary of the potential claims of the
Fund's creditors and limited partners (present and former) against
Franzone related to Acadaca, and a discussion of the legal basis
for the Plan's coerced release of those claims, including a
discussion of why the Plan Fund's constitute sufficient
consideration for them.
Hersch further points out that the plan projection is incomplete
and materially misleading. The Plan projection is incomplete and
misleading, and leaves interested parties without the information
they need to form a judgment about the reasonableness of the
reorganized Fund's principal income stream -- the liquidation of
its investment portfolio. The projection is further flawed because
it obscures the meaning of its bottom-line metric, "Net Liquidity",
and invites one to infer --incorrectly -- that the reorganized Fund
is worth millions of dollars less than it actually may be. The
combined effect is a confusing jumble that does not fairly reflect
the Plans' economic effects and obscures the value Franzone would
wrongly reallocate from the Fund's limited partners to himself.
According to Hersch, the Plans are not confirmable and therefore
the Disclosure Statement cannot be approved:
* In a liquidating scenario with no real prospect of
rehabilitating a business enterprise, the Plans deprive the Fund's
limited partners of their due value entitlements and reallocate
those entitlements to a favored yet bad-faith insider,
over-compensating him and coercively extracting releases from his
creditors and limited partners. As such, the Plans are
inconsistent with the policy of the Bankruptcy Code.
* The Plans cannot be confirmed because they violate Section
1129(b)(2)(B)(ii) of the Bankruptcy Code and the LaSalle Doctrine.
The Plans effectuate a sale of the Debtors to Franzone and his
affiliates. In exchange for an investment guaranty, the proceeds
of which largely go back to Franzone, and making a line of credit
available to the reorganized Debtors, the Plans cancel all
partnership interests but Franzone's. While imposing an extreme
reallocation of value entitlements from the Fund's limited partners
to Franzone, the Plans call for no competitive bidding or other
market test to determine the fairness of the transaction or the
adequacy of the price Franzone proposes to pay.
* The Plans cannot be confirmed because they violate Section
1123(b)(3)(A) of the Bankruptcy Code by proposing coercive releases
of non-debtors that cannot be approved:
-- First, there is no identity of interests between the Debtor
and Franzone in the sense that is relevant to this inquiry. Except
for his claim that the Fund owes him a defense (which Hersch does
not entirely concede), Franzone will enjoy no enforceable indemnity
relationship with respect to the claims that would be released.
-- Second, once scrutinized, Franzone's investment guaranty
does not comprise a substantial contribution to the Debtor's
reorganization because the bulk of his investment guaranty funds
will be returned to him as payment for a questionable but
apparently unexamined claim he has asserted, and the payment of up
to a projected $400,000 annually to manage the reorganized Debtors
liquidation.
-- Third, the releases are not essential to the Debtors'
reorganization because the Plans envision a liquidation, not a
reorganization or rehabilitation of the Fund's business.
-- Fourth, this objection and the objection of the jointly
represented limited partners demonstrate that at least one impacted
class (Class 5 limited partner interests) is not likely to
overwhelmingly vote to accept the plan.
-- Fifth, the Plans do not provide a mechanism to pay for all
of the classes affected by the releases because the Fund's limited
partners are promised an aggregate of only $2 million payable five
years from now, yet the Fund valued those interests at $48 million
as of the Petition Date.
-- And Sixth, the Plans provide no opportunity for limited
partners who choose not to settle to recover in full because
limited partners' recoveries are capped at an aggregate that is far
less than their invested capital.
* The Plans cannot be confirmed because they violate Section
1129(a)(3) of the Bankruptcy Code by not complying with Delaware
Partnership Law. Franzone owes fiduciary duties to the Fund and
all of its limited partners. Yet instead of seeking to preserve
that equity value for the Fund's limited partners by engaging in a
fair, market-based process to secure exit financing for the
Debtors, Franzone has used his control position to grab an
opportunity to provide an "investment guaranty", most of the
proceeds of which he will pay back to himself over the projection
period. In exchange for this dubious new value, Franzone wipes out
his limited partners and grabs all of the reorganized Fund's equity
value for himself. Under Delaware law, this fails to satisfy the
entire fairness standard and is a breach of his duties to the
Fund's limited partners. The Plans thus fails to satisfy
Bankruptcy Code Section 1129(a)(3).
* The Plans cannot be confirmed because they violate Section
1129(a)(11) because Franzone is not a trustworthy fiduciary or
competent manager. Neither the Plans nor the Disclosure Statement
address this aspect of feasibility. But they do state that "the
Debtor shall be managed by its general partner, FF Management,
under the direction and control of Andrew Franzone . . .. Yet
Franzone is an admitted fraudster and is the subject of an ongoing
SEC investigation and three separate civil actions brought against
him by investors of entities he manages.
* The Plans cannot be confirmed because they violate Section
1129(a)(11) by proposing misleading and unreliable financial
projections and estimations. The Plans and their accompanying
Disclosure Statement contain no projections that satisfy Section
1129(a)(11). Mr. Kapila, the Debtor's CRO, disavows the incomplete
and misleading projection attached to the Disclosure Statement, and
affirmatively refuses to make any statement about the value of the
Debtor's assets.
* The Plans cannot be confirmed because it violates Section
1129(a)(3) by not being proposed in good faith. The Plans'
cancellation of its limited partners' interests; its violation of
the LaSalle doctrine and Delaware partnership law (and Franzone's
coincident breach of his continuing fiduciary duty to the Fund's
limited partners); its coercive third party releases of some of the
most serious fraud allegations levelled against Franzone; it's
opaque, misleading, and utterly unsubstantiated projections; and
the Disclosure Statement's inexplicable lack of disclosure,
collectively define cynical and opportunistic bad faith and
preclude confirmation.
Counsel for Dennis S. Hersch:
Brad J. Axelrod
Baron C. Giddings
Yating Wang
WOLLMUTH MAHER & DEUTSCH llp
500 Fifth Avenue
New York, New York 10110
Tel: (212) 382-3300
E-mail: baxelrod@wmd-law.com
bgiddings@wmd-law.com
ywang@wmd-law.com
- and -
Jordi Guso
BERGER SINGERMAN LLP
1450 Brickell Avenue, Suite 1900
Miami, FL 33131
Telephone: (305) 755-9500
Facsimile: (305) 714-4340
jguso@bergersingerman.com
About FF Fund
FF Fund I, L.P., is a limited partnership that was formed in
August, 2010. FF Fund's general partner is FF Management. FF
Fund's offering documents identified a broad range of investment
strategies to achieve its stated objectives of "capital
appreciation and current income."
FF Fund has 13 subsidiaries and affiliates that FF Management set
up and routinely evolved over the roughly 10 years since FF Fund's
formation for various accounting, tax, audit, insurance,
regulatory, liquidity, operational, and administrative reasons.
F3 Real Estate Partners, LLC, was established to invest in real
estate primarily from 2011 through 2019. Prior to the CRO's
appointment, F3 purchased and then sold a residential complex
containing 87 condominium units in West Palm Beach, FL, which sale
transaction closed in May 2019.
F5 Business Investment Partners, LLC, held and currently owns the
majority of the current investments made by FF Fund with monies
received from the Limited Partners. The investments made by the F5
consisted mainly of (i) illiquid, non-tradeable privately held
shares in early stage or start-up companies, (ii) minority
interests in real estate partnerships, or (iii) unsecured
promissory notes.
F6 Standard Securities Partners, LLC, held liquid hedge fund
investments.
The remainder of the subsidiaries had nominal investments.
On Sept. 24, 2019, FF Management retained Soneet R. Kapila to
manage FF Fund. FF Management was and is controlled by Andrew
Franzone.
FF Fund I L.P., an investment company based in Miami, Fla., filed a
voluntary petition for relief under Chapter 11 of Bankruptcy Code
(Bankr. S.D. Fla. Case No. 19-22744) on Sept. 24, 2019. In the
petition signed by CRO Soneet R. Kapila, the Debtor estimated $50
million to $100 million in assets and $1 million to $10 million in
liabilities.
On Jan. 24, 2020, F5 Business Investment Partners, LLC, an
affiliate of FF Fund, filed a Chapter 11 petition (Bankr. S.D. Fla.
Case No. 20-10996). The case is jointly administered with that of
FF Fund on Feb. 4, 2020. At the time of the filing, F5 Business
estimated assets of between $10 million and $50 million and
liabilities of between $1 million and $10 million.
Chief Judge Laurel M. Isicoff oversees the cases.
Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., is
serving as the Debtors' legal counsel.
No creditors' committee has been appointed in the case. In
addition, no trustee or examiner has been appointed.
FF FUND: FCA Says Franzone a Fraudster, Plans Fatally Flawed
------------------------------------------------------------
Florence Capital Advisors, LLC ("FCA"), et al., submitted an
objection to the Disclosure Statement for Chapter 11 Plans of
Reorganization Proposed by FF Fund I, L.P. and F5 Business
Investment Partners, LLC.
Objectors Richard Grausman, Brian Stein, the Ann Lewin Revocable
Trust, Angie Skinner, Michael Skinner, the Kimple 2009 Trust, Lewis
Hall, Scalene Hall, and Ashleigh Aungst were each limited partners
of FF Fund I. Objector Florence Capital Advisors LLC is an
investment advisory firm and its principal is objector Gregory
Hersch. FCA's clients contributed the vast majority of capital
invested in the Fund.1
"The proposed Plans of Reorganization are unconfirmable, and they
are being furthered by a Disclosure Statement that is not merely
inadequate but also misleading in the extreme. Incredibly, the
Plans propose that Andrew Franzone will maintain unmonitored
control and management over a reorganized FF Fund I. Yet Franzone
is an admitted fraudster who bilked the original investors in the
Fund out of tens of millions of dollars, through
misrepresentations, mismarking of assets, mismanagement and
misappropriations," FCA tells the Court.
FCA points out that the disclosure statement should not be approved
because it does not contain adequate information:
* The Disclosure Statement describes Plans that hinge entirely
on the infusion of new capital by FF Management, the general
partner of FF Fund and an entity controlled by Franzone. Disclosure
Statement. Specifically, the Plans are premised on Franzone's
entity delivering an "Investment Guarantee Amount" of $4.0 million
in cash, and providing so-called "Exit Financing" in the form of a
line of credit of $1.5 million. Nowhere does the Disclosure
Statement provide any information about the source of these funds,
including whether the funds for the Investment Guarantee Amount are
being provided by Franzone personally, or a lender, and if the
latter, who the lender is and what the terms of the financing are.
* The financial projections annexed to the Disclosure Statement
do not include sufficient information. The barebones spreadsheets
attached to the Disclosure Statement were prepared not by the
Debtors, but rather solely by Franzone, with no apparent assistance
by an independent fiduciary or any accountant or other
professional.
* The Disclosure Statement and the financial projections contain
no details concerning:
-- The specific current holdings of the Fund, how they are
being valued and, for the respective holdings, specifics about the
investment returns, if any, that could be generated going forward,
including the anticipated level of returns and time frame;
-- The existence, nature and value of litigation claims owned
by the Fund;
-- The existence and potential impact of the pending Delaware
litigation against the Fund that was stayed by the filing of the
instant case; and
-- The specific anticipated post-petition expenses and
proposed management fees that Franzone proposes to pay himself.
* The Debtor provides inadequate information about the Acadaca
Claim. The Plans would coercively release non-Debtors FF Fund
Management Co. and Franzone personally from claims of the Fund's
creditors and limited partners related to the Fund's "Acadaca
Investment," but the Disclosure Statement fails to provide any
material information about the nature of that investment or the
conduct of Franzone or FF Fund Management Co. relating to the
investment. The evidence strongly suggests that Franzone engaged
in actionable misconduct with respect to Acadaca, including what
appear to be kick-backs and money laundering activities.
* The disclosure statement fails to disclose the pending SEC
investigation into the fund and the lawsuits against Franzone for
fraudulent conduct in mismanaging the fund.
* The disclosure statement should not be approved because the
plans of reorganization are fatally flawed. Franzone is the
disgraced former manager of the Fund who engaged in a massive fraud
that led to losses of tens of millions of dollars by investors.
There is overwhelming evidence that (i) instead of executing the
diversified liquid investing trading strategy he promised to
investors, Franzone simply stopped trading in the Fund for many
years (2014-2019) while affirmatively covering up that fact to
investors; (ii) Franzone knowingly mismarked the valuation of the
assets held by the Fund to generate inflated and unwarranted fees
for himself; and (iii) Franzone lied to his investors about the
Fund's performance and assets under management. is fraudulent
schemes are detailed in the pending lawsuits filed against him.
Co-Counsel for the Objectors:
Jordi Guso
BERGER SINGERMAN LLP
1450 Brickell Avenue, Suite 1900
Miami, FL 33131
Telephone: (305) 755-9500
Facsimile: (305) 714-4340
E-mail: jguso@bergersingerman.com
- and -
Theodore R. Snyder, Esq.
Murphy & McGonigle, P.C.
1185 Avenue of the Americas, 21st Floor
New York, NY 10036
Telephone: (212) 880-3976
E-mail: tsnyder@mmlawus.com
About FF Fund
FF Fund I, L.P., is a limited partnership that was formed in
August, 2010. FF Fund's general partner is FF Management. FF
Fund's offering documents identified a broad range of investment
strategies to achieve its stated objectives of "capital
appreciation and current income."
FF Fund has 13 subsidiaries and affiliates that FF Management set
up and routinely evolved over the roughly 10 years since FF Fund's
formation for various accounting, tax, audit, insurance,
regulatory, liquidity, operational, and administrative reasons.
F3 Real Estate Partners, LLC, was established to invest in real
estate primarily from 2011 through 2019. Prior to the CRO's
appointment, F3 purchased and then sold a residential complex
containing 87 condominium units in West Palm Beach, FL, which sale
transaction closed in May 2019.
F5 Business Investment Partners, LLC, held and currently owns the
majority of the current investments made by FF Fund with monies
received from the Limited Partners. The investments made by the F5
consisted mainly of (i) illiquid, non-tradeable privately held
shares in early stage or start-up companies, (ii) minority
interests in real estate partnerships, or (iii) unsecured
promissory notes.
F6 Standard Securities Partners, LLC, held liquid hedge fund
investments.
The remainder of the subsidiaries had nominal investments.
On Sept. 24, 2019, FF Management retained Soneet R. Kapila to
manage FF Fund. FF Management was and is controlled by Andrew
Franzone.
FF Fund I L.P., an investment company based in Miami, Fla., filed a
voluntary petition for relief under Chapter 11 of Bankruptcy Code
(Bankr. S.D. Fla. Case No. 19-22744) on Sept. 24, 2019. In the
petition signed by CRO Soneet R. Kapila, the Debtor estimated $50
million to $100 million in assets and $1 million to $10 million in
liabilities.
On Jan. 24, 2020, F5 Business Investment Partners, LLC, an
affiliate of FF Fund, filed a Chapter 11 petition (Bankr. S.D. Fla.
Case No. 20-10996). The case is jointly administered with that of
FF Fund on Feb. 4, 2020. At the time of the filing, F5 Business
estimated assets of between $10 million and $50 million and
liabilities of between $1 million and $10 million.
Chief Judge Laurel M. Isicoff oversees the cases.
Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., is
serving as the Debtors' legal counsel.
No creditors' committee has been appointed in the case. In
addition, no trustee or examiner has been appointed.
FF FUND: SEC Wants Additional Plan Disclosures
----------------------------------------------
The U.S. Securities and Exchange Commission filed a limited
objection and reservation of rights to the Disclosure Statement for
Chapter 11 Plans of Reorganization Proposed by FF Fund I, L.P. and
F5 Business Investment Partners, LLC.
The SEC staff has requested that the Debtors provide additional
disclosure in three areas: (1) the factual support for the proposed
nonconsensual release in favor of FF Fund I's general partner and
its control person, Andrew Franzone, as evaluated under 11th
Circuit case law; (2) the specific investments and assets of the
Debtors, their estimated values and the projected value of the
limited partnership interests to be issued to the plan funder; and
(3) the terms and conditions of the loan under which the plan
funder will borrow the money necessary to fund the plans, and how
that loan (including any default) could impact the reorganized
debtors.
SEC points out that:
* The Disclosure Statement should provide more information
regarding the factual support for nonconsensual third-party
release. The SEC staff believes that additional disclosure is
required to support the Plans' nonconsensual third-party release in
favor of the General Partner and Mr. Franzone. The releases in
favor of the General Partner and Mr. Franzone may have a
substantial impact on the rights of various parties, including on
limited partners who have commenced litigation in non-bankruptcy
courts. Creditors and equity holders voting on the Plans need
further information about the factual grounds and justifications
supporting these releases in order to make an informed decision on
whether to vote to accept or reject the Plans. The additional
disclosure should include more information about the Acadaca
Investment, which is the subject of the releases.
* The SEC needed information about the debtors' assets and
value of new equity. The Disclosure Statement does not contain
sufficient information about the Debtors' current assets or their
(non-liquidation) values, or the value of the new equity interests,
to assess whether the Plans fairly distribute value between the
General Partner (as purchaser) and the existing limited partners of
FF Fund I. Such additional disclosure is even more critical here,
because the equity transaction involves an insider, during plan
exclusivity, and without any marketing of the assets or equity
interests to other prospective purchasers.
* The disclosure should provide additional information about
the sources of funding. The Disclosure Statement does not provide
any information about the source of that funding. The Debtors have
informed the SEC staff that the General Partner is borrowing that
money from a third-party lender. The staff believes that
additional information should be provided about the terms and
conditions of the third-party loan, and how that loan (including
any defaults by the General Partner) could impact the reorganized
debtors or the feasibility of the Plans.
About FF Fund
FF Fund I, L.P., is a limited partnership that was formed in August
2010. FF Fund's general partner is FF Management. FF Fund's
offering documents identified a broad range of investment
strategies to achieve its stated objectives of "capital
appreciation and current income."
FF Fund has 13 subsidiaries and affiliates that FF Management set
up and routinely evolved over the roughly 10 years since FF Fund's
formation for various accounting, tax, audit, insurance,
regulatory, liquidity, operational, and administrative reasons.
F3 Real Estate Partners, LLC, was established to invest in real
estate primarily from 2011 through 2019. Prior to the CRO's
appointment, F3 purchased and then sold a residential complex
containing 87 condominium units in West Palm Beach, FL, which sale
transaction closed in May 2019.
F5 Business Investment Partners, LLC, held and currently owns the
majority of the current investments made by FF Fund with monies
received from the Limited Partners. The investments made by the F5
consisted mainly of (i) illiquid, non-tradeable privately held
shares in early stage or start-up companies, (ii) minority
interests in real estate partnerships, or (iii) unsecured
promissory notes.
F6 Standard Securities Partners, LLC, held liquid hedge fund
investments.
The remainder of the subsidiaries had nominal investments.
On Sept. 24, 2019, FF Management retained Soneet R. Kapila to
manage FF Fund. FF Management was and is controlled by Andrew
Franzone.
FF Fund I L.P., an investment company based in Miami, Fla., filed a
voluntary petition for relief under Chapter 11 of Bankruptcy Code
(Bankr. S.D. Fla. Case No. 19-22744) on Sept. 24, 2019. In the
petition signed by CRO Soneet R. Kapila, the Debtor estimated $50
million to $100 million in assets and $1 million to $10 million in
liabilities.
On Jan. 24, 2020, F5 Business Investment Partners, LLC, an
affiliate of FF Fund, filed a Chapter 11 petition (Bankr. S.D. Fla.
Case No. 20-10996). The case is jointly administered with that of
FF Fund on Feb. 4, 2020. At the time of the filing, F5 Business
estimated assets of between $10 million and $50 million and
liabilities of between $1 million and $10 million.
Chief Judge Laurel M. Isicoff oversees the cases.
Paul J. Battista, Esq., at Genovese Joblove & Battista, P.A., is
serving as the Debtors' legal counsel.
No creditors' committee has been appointed in the case. In
addition, no trustee or examiner has been appointed.
FIELDWOOD ENERGY: Davis Polk, Haynes Update List of Secured Lenders
-------------------------------------------------------------------
In the Chapter 11 cases of Fieldwood Energy LLC, et al., the law
firms of Davis Polk & Wardwell LLP and Haynes and Boone, LLP
submitted an amended verified statement under Rule 2019 of the
Federal Rules of Bankruptcy Procedure, to disclose an updated list
of Ad Hoc Group of Secured Lenders and their holdings.
The Ad Hoc Group of Secured Lenders formed by certain lenders under
(i) that certain Amended and Restated First Lien Term Loan
Agreement, dated as of April 11, 2018, among Fieldwood Energy Inc.,
Fieldwood, as the borrower, the lenders party thereto and Cantor
Fitzgerald Securities, as administrative agent and collateral agent
and/or (ii) that certain Amended and Restated Second Lien Term Loan
Agreement, dated as of April 11, 2018, among Holdings, Fieldwood,
as the borrower, the lenders party thereto and Cortland Capital
Market Services LLC, as administrative agent and collateral agent,
some Members of which also committed to provide a superpriority,
secured debtor-in-possession credit facility pursuant to that
certain Senior Secured Superpriority Debtor-In-Possession Term Loan
Credit Agreement, dated as of August 24, 2020 among Holdings,
Fieldwood, as the borrower, the lenders party thereto and Cantor
Fitzgerald Securities, as administrative agent and collateral
agent.
In or around March 2020, the Ad Hoc Group of Secured Lenders
engaged Davis Polk to represent it in connection with the Members'
holdings under the Prepetition FLTL Credit Agreement and
Prepetition SLTL Credit Agreement. In May 2020, the Ad Hoc Group of
Secured Lenders engaged Haynes and Boone to act as co-counsel in
the Chapter 11 Cases.
Davis Polk represents only the Ad Hoc Group of Secured Lenders. As
of the date of this Amended Statement, Haynes and Boone represents
the Ad Hoc Group of Secured Lenders and the DIP Agent. Other than
Haynes and Boone's representation of the DIP Agent, Counsel does
not represent or purport to represent any entities other than the
Ad Hoc Group of Secured Lenders in connection with the Chapter 11
Cases. In addition, the Ad Hoc Group of Secured Lenders does not
claim or purport to represent any other entity and undertakes no
duties or obligations to any entity.
As of Jan. 22, 2021, members of the Ad Hoc Group of Secured Lenders
and their disclosable economic interests are:
AEGON USA INVESTMENT MANAGEMENT LLC
227 W. Monroe Suite 6000
Chicago, IL 60606
* $25,095,921.51 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $1,165,758.20 in aggregate principal amount of DIP backstop
commitments under the DIP Credit Agreement
AVENUE CAPITAL MANAGEMENT II, LP
11 W 42nd St.
New York, NY 10036
* $69,147,137.00 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $70,746.53 in aggregate principal amount of loans and
commitments under the DIP Credit Agreement
BANK OF AMERICA, N.A.
900 West Trade St.
Charlotte, NC 28202
* $28,855,005.00 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $18,756,612.00 in aggregate principal amount of loans under the
Prepetition SLTL Credit Agreement
BANK OF AMERICA, SECURITIES, INC
900 West Trade St.
Charlotte, NC 28202
* 241,075 shares of Holdings stock
CIFC ASSET MANAGEMENT LLC
875 3rd Avenue 24th Floor
New York, NY 10022
* $29,014,126.86 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $13,049,999.99 in aggregate principal amount of loans under the
Prepetition SLTL Credit Agreement
COHANZICK MANAGEMENT, LLC
427 Bedford Road Suite 230
Pleasantville, NY 10570
* $ 22,327,000.00 in aggregate principal amount of loans under the
First Lien Credit Agreement
* $8,739,682.00 in aggregate principal amount of DIP backstop
commitments under the DIP Credit Agreement
EATON VANCE MANAGEMENT/BOSTON MANAGEMENT AND RESEARCH
2 International Place 9th Floor
Boston, MA 02110
* $84,707,237.40 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $12,954,179.78 in aggregate principal amount of DIP backstop
commitments under the DIP Credit Agreement
* 589,166 shares of Holdings stock
FRANKLIN ADVISERS, INC.
1 Franklin Parkway Building 970, 1st Floor
San Mateo, CA 94403
* $184,985,251.67 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $17,373,632.51 in aggregate principal amount of DIP backstop
commitments under the DIP Credit Agreement
INVESCO SENIOR SECURED MANAGEMENT, INC.
1166 Avenue of the Americas 26th Floor
New York, NY 10036
* $271,348,930.92 in aggregate principal amount of loans under
the Prepetition FLTL Credit Agreement
* $68,659,093.37 in aggregate principal amount of loans under the
Prepetition SLTL Credit Agreement
* $33,833,902.71 in aggregate principal amount of DIP backstop
commitments under the DIP Credit Agreement
* 1,103,940 shares of Holdings stock
NUVEEN ASSET MANAGEMENT, LLC
555 California Street Suite 3100
San Francisco, CA
* $129,596,413.59 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $51,887,452.40 in aggregate principal amount of loans under the
Prepetition SLTL Credit Agreement
* $19,135,972.10 in aggregate principal amount of loans and
commitments under the DIP Credit Agreement
* 263,272 shares of Holdings stock
SI CAPITAL COMMERCIAL FINANCE, LLC
38955 Hills Tech Drive
Farmington Hills, MI 48331
* $32,203,593.61 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $3,839,384.43 in aggregate principal amount of DIP backstop
commitments under the DIP Credit Agreement
Counsel for the Ad Hoc Group of Secured Lenders can be reached at:
DAVIS POLK & WARDWELL LLP
Damian S. Schaible, Esq.
Natasha Tsiouris, Esq.
Josh Sturm, Esq.
450 Lexington Avenue
New York, NY 10017
Telephone: (212) 450-4000
Facsimile: (212) 701-5800
Email: damian.schaible@davispolk.com
natasha.tsiouris@davispolk.com
joshua.sturm@davispolk.com
- and -
HAYNES AND BOONE, LLP
Charles A. Beckham, Jr., Esq.
Martha Wyrick, Esq.
1221 McKinney Street, Suite 4000
Houston, TX 77010
Telephone: (713) 547-2000
Facsimile: (713) 547-2600
Email: charles.beckham@haynesboone.com
martha.wyrick@haynesboone.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3ccG4GT and https://bit.ly/3qOEL4Z
About Fieldwood Energy LLC
Fieldwood Energy LLC -- http://www.fieldwoodenergy.com/-- is a
portfolio company of Riverstone Holdings focused on acquiring and
developing conventional assets, primarily in the Gulf of Mexico
region. It is the largest operator in the Gulf of Mexico owning an
interest in approximately 500 leases covering over two million
gross acres with 1,000 wells and 750 employees.
Fieldwood Energy and its 13 affiliates previously sought Chapter 11
protection (Bankr. S.D. Texas Lead Case No. 18-30648) on Feb. 15,
2018, with a prepackaged plan that would deleverage $3.286 billion
of funded by $1.626 billion.
On Aug. 3, 2020, Fieldwood Energy and its 13 affiliates again filed
voluntary Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No.
20-33948). Mike Dane, senior vice president, and chief financial
officer signed the petitions. At the time of the filing, the
Debtors disclosed $1 billion to $10 billion in both assets and
liabilities.
Judge David R. Jones oversees the cases.
The Debtors have tapped Weil, Gotshal & Manges LLP as their legal
counsel, Houlihan Lokey Capital, Inc. as an investment banker, and
AlixPartners, LLP as financial advisor. Prime Clerk LLC is the
claims, noticing, and solicitation agent.
The first-lien group has employed O'Melveny & Myers LLP as its
legal counsel and Houlihan Lokey Capital, Inc., as its financial
advisor.
The RBL lenders have employed Willkie Farr & Gallagher LLP as their
legal counsel and RPA Advisors, LLC as their financial advisor.
The cross-holder group has tapped Davis Polk & Wardwell LLP as its
legal counsel and PJT Partners LP as its financial advisor.
The committee of unsecured creditors tapped Stroock & Stroock &
Lavan, LLP, as counsel, Cole Schotz P.C., as co-counsel, and Conway
MacKenzie, LLC as financial advisor.
FIRST ADVANTAGE: S&P Raises ICR to 'B' on Deleveraging Refinance
----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating and the
issue-level rating on the first-lien debt on background screening
services provider First Advantage Holdings LLC to 'B' from 'B-'.
The outlook is stable while the '3' recovery rating is unchanged.
S&P also raised its rating on the second-lien debt to 'CCC+' from
'CCC', but it will be withdrawn following repayment.
First Advantage has outperformed the industry for the fiscal year
ended Dec. 31, 2020. Estimated adjusted leverage is 6x, down from
the low-7x area in the prior year (pro forma for its acquisition by
Silver Lake Partners).
The company seeks to further deleverage by raising $100 million
through a fungible add-on to its first-lien term loan. Proceeds and
cash on hand will be used to repay the second-lien term loan. Pro
forma estimated adjusted leverage is expected to be in the high-5x
area.
S&P said, "The stable outlook reflects our expectations for
continued revenue growth and steady EBITDA margins such that
adjusted leverage will remain below 6x, with free operating cash
flow (FOCF) to debt in the 10% area."
"The upgrade reflects First Advantage's outperformance of peers,
stable U.S. hiring trends, and low leverage. Despite the
historically weak unemployment backdrop, U.S. hiring stabilized
beginning in the second half of 2020. The company outperformed
industry peers by increasing revenues 5.7% while reporting only one
quarter of declines."
"We believe First Advantage's exposure to blue-chip customers in
essential retail, transportation/logistics, technology, and
staffing was the primary factor in better revenue growth than that
of competitors and will likely insulate it from future
COVID-19-related lockdowns. We believe these trends will continue
into 2021, supporting our revenue growth assumption of
high-single-digit percentages. First Advantage's early investments
in migrating to a single platform and robotics process automation
resulted in industry-leading EBITDA margins in the high-20% area."
"The stable outlook reflects our expectations the company will
continue to achieve organic revenue growth rates above U.S. GDP and
the overall background industry, while maintaining EBITDA margins.
Absent debt-funded acquisitions, we expect leverage to be
maintained below 6x and free operating cash flow (FOCF) to debt in
the 10% area."
While unlikely, S&P could lower its ratings over the next 12 months
if the company's leverage were to rise above 7x on a sustained
basis or if free operating cash flow were to decline to the
low-single-digit percent area as a result of:
-- Debt-funded acquisitions and/or dividends;
-- Lower screening volume from enterprise customers, weak
retention rates, and pricing pressure; and
-- Increased technology spending with minimal return on
investment.
S&P could raise the ratings if the company were to commit to
leverage below 5x on a sustained basis and/or its assessment of the
business improves such that it meets the following:
-- Significantly increased revenue and EBITDA base;
-- Demonstrated ability to take meaningful market share;
-- Expanded global reach; and
-- Material EBITDA generated from post-hire monitoring services.
FUELCELL ENERGY: Posts $92.4 Million Net Loss in Fiscal 2020
------------------------------------------------------------
FuelCell Energy, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss
attributable to common stockholders of $92.44 million on $70.87
million of total revenues for the year ended Oct. 31, 2020,
compared to a net loss attributable to common stockholders of
$100.24 million on $60.75 million of total revenues for the year
ended Oct. 31, 2019.
As of Oct. 31, 2020, the Company had $523.54 million in total
assets, $269.13 million in total liabilities, $59.86 million in
redeemable series B preferred stock, and $194.55 million in total
stockholders' equity.
The Company stated, "We believe that our unrestricted cash and cash
equivalents, expected receipts from our contracted backlog, and
release of short-term restricted cash less expected disbursements
over the next twelve months will be sufficient to allow the Company
to meet its obligations for at least one year from the date of
issuance of these financial statements.
"To date, we have not achieved profitable operations or sustained
positive cash flow from operations. The Company's future liquidity
will depend on its ability to (i) timely complete current projects
in process within budget, (ii) increase cash flows from its
generation portfolio, including by meeting conditions required to
timely commence operation of new projects, operating its generation
portfolio in compliance with minimum performance guarantees and
operating its generation portfolio in accordance with revenue
expectations, (iii) obtain financing for project construction, (iv)
obtain permanent financing for its projects once constructed, (v)
increase order and contract volumes, which would lead to additional
product sales, services agreements and generation revenues, (vi)
obtain funding for and receive payment for research and development
under current and future Advanced Technologies contracts, (vii)
implement the cost reductions necessary to achieve profitable
operations, (viii) manage working capital and the Company's
unrestricted cash balance and (ix) access the capital markets to
raise funds through the sale of equity securities, convertible
notes, and other equity-linked instruments, all of which will
require an increase in authorized shares, and/or other debt
instruments. "
Management's Comments
"One year ago we launched our Powerhouse business strategy, with
the first pillar of the strategy - Transform - containing the key
deliverable of building a solid financial foundation," said Mr.
Jason Few, president and CEO. "Having made progress toward this
goal, and as we look toward the second year of our journey, we
intend to focus on operational and commercial excellence, while
maintaining prudent capital deployment, reducing our overall cost
of capital and focusing on lean resource management, cost reduction
opportunities, and developing and defining a clear strategic
roadmap for the Company. We are firmly focused on delivering
revenue growth as we strive to capture the significant market
opportunities that we believe lay before us with our proprietary
technologies."
Mr. Few continued, "During fiscal year 2020, we made progress
executing on our project backlog, including completion of our 2.8
megawatt biogas power platform in Tulare, California.
Additionally, we are near completion on the combined 8.8 megawatts
of new power platforms at the U.S. Navy base in Groton, Connecticut
and at the wastewater treatment facility in San Bernardino,
California. We also recently began early stage construction
activity on 24.5 megawatts of projects, including the Toyota
hydrogen project at the Port of Long Beach, and utility scale
projects in Yaphank, New York and Derby, Connecticut. Financially,
we have improved our balance sheet through a series of strategic
capital raises, allowing us to retire high-cost debt and providing
unrestricted cash to execute on our strategic initiatives and
growth plans."
"The global marketplace is increasingly looking for cleaner energy
solutions to combat climate change, made possible by regulatory
support and private capital being deployed around the world. We
are developing compelling innovations in distributed hydrogen,
long-duration storage and carbon capture that we believe will
differentiate FuelCell Energy solutions from others in the
marketplace and will enable end-users to meet sustainability goals.
Based on the initial policy objectives outlined by the incoming
White House administration, we expect clean energy and climate
policies in the U.S. to begin to match the pace of advancement seen
in other markets such as Europe and Asia, and to be favorable
toward development of the growing hydrogen economy," added Mr.
Jason Few.
"Operationally, continuous improvement and accelerating execution
of our business plan are major focus areas for FuelCell Energy.
For example, during fiscal year 2020, we made a number of
improvements in our manufacturing processes and capabilities,
focusing on increasing throughput and simplifying and streamlining
production steps, while implementing applicable social distancing
protocols. In late June, we restarted operations at our Torrington
manufacturing facility with an annualized production rate of 17
megawatts. As a result of the improvements in our manufacturing
processes and capabilities, the Company now has the capability to
increase our annualized production rate up to 45 megawatts on a
single production shift."
Powerhouse Business Strategy Update
In January 2020, the Company launched its Powerhouse business
strategy, which is focused on initiatives intended to transform,
strengthen and grow the company over a three-year period.
In the fourth quarter of fiscal 2020, the Company:
* Received $3.0 million of funding support from the U.S.
Department of Energ to be used toward the development and
commercialization of FuelCell Energy's reversible solid oxide
fuel cell (RSOFC) system, which performs water electrolysis
for
the production of hydrogen, stores hydrogen, and then produces
power by using the produced hydrogen; and
* Received an $8.0 million funding award from the DOE, in
collaboration with the Office of Nuclear Energy, to support
the
design and manufacture of a SureSource electrolysis platform
capable of producing hydrogen.
Additionally, since the end of fiscal year 2020, the Company has:
* Completed an underwritten offering of 25 million shares of
common stock, resulting in net proceeds to the Company of
approximately $156.3 million, after deducting underwriting
discounts and commissions and other offering expenses;
* Repaid all amounts owed, including accrued interest and
prepayment fees, to the lenders and the agent under the Orion
Credit Agreement, which totaled approximately $87.3 million,
and resulted in the extinguishment of the Orion Credit
Facility
and the release of $11.2 million of restricted cash to the
Company; and
* Paid all amounts owed to Enbridge Inc. under the Series 1
Preferred Shares issued by a subsidiary of the Company, which
totaled Cdn. $27.4 million, or approximately U.S. $21.5
million, following which Enbridge Inc. surrendered its Series
1
Preferred Shares.
Mr. Few concluded, "The four key product opportunities we are
pursuing are: (1) distributed generation, (2) distributed hydrogen,
(3) long-duration hydrogen energy storage and power generation as
well as electrolysis, and (4) carbon capture, sequestration and
utilization (CCSU). These technologies provide an opportunity for
FuelCell Energy to be a key solutions provider and an enabler in
the global clean energy transition. In fiscal year 2021, we are
focused on commercially advancing new applications of our
technology, including working toward delivery of our first
demonstration solid oxide electrolysis platform, while continuing
to execute on our backlog of projects and delivering our
traditional distributed generation solutions."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/886128/000156459021001679/fcel-10k_20201031.htm
About FuelCell Energy
Headquartered in Danbury, Connecticut, FuelCell Energy, Inc. --
http://www.fuelcellenergy.com-- is a global developer of
environmentally responsible distributed baseload power solutions
through its proprietary fuel cell technology. The Company targets
large-scale power users with its megawatt-class installations
globally, and currently offer sub-megawatt solutions for smaller
power consumers in Europe. The Company develops turn-key
distributed power generation solutions and operate and provide
comprehensive service for the life of the power plant.
GANNETT CO: Moody's Assigns B3 CFR, Outlook Stable
--------------------------------------------------
Moody's Investors Service assigned a B3 corporate family rating and
a B3-PD probability of default rating to Gannett Co. Inc. Moody's
also assigned a B1 rating to Gannett Holdings, LLC's proposed
$1.045 billion term loan due 2026. Concurrently, Moody's assigned
the company an SGL-3 speculative grade liquidity (SGL) rating. The
outlook is stable.
Gannett faces secular decline in its print and advertising focused
activities as demographics evolve and consumers taste continue to
gravitate towards digital media. The structural decline in
Gannett's advertising segment is mitigated by the company's prudent
financial policy. Moody's expects that the company will apply its
good free cash flow generation to materially reducing leverage over
the next 12-24 months.
Assignments:
Issuer: Gannett Co., Inc
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Speculative Grade Liquidity Rating, Assigned SGL-3
Issuer: Gannett Holdings, LLC
Senior Secured Bank Credit Facility, Assigned B1 (LGD2)
Outlook Actions:
Issuer: Gannett Co., Inc
Outlook, Assigned Stable
Issuer: Gannett Holdings, LLC
Outlook, Assigned No Outlook
RATINGS RATIONALE
Gannett's B3 CFR reflects the company's challenged business profile
with around 38% of 2020 revenue derived from advertising -- of
which two thirds is print advertising -- which experienced a near
30% decline in the US in 2020 and is expected to continue to
decline in the face of growing digital ad spend. In addition, 41%
of the company's 2020 revenue came from circulation -- most of
which also continues to be print based and in structural decline.
The rating also reflects Gannett's high leverage at closing of the
transaction with 2020 pro-forma Moody's adjusted leverage of around
5x following the refinancing transaction. While leverage is
expected to decline to below 3x in the next 12 months, this is
reliant on voluntary and mandatory debt repayment and also on
further cost synergies being achieved in 2021.
The B3 rating also reflects the company's position as the largest
owner of daily newspapers in the United States and community
newspapers in the UK. Gannett has the potential to mitigate the
decline in print circulation by growing digital subscriptions from
a low base through a more consistent approach to pay-walls and
subscription promotions across its media portfolio. The B3 rating
reflects Moody's expectation for solid cash flow generation in
2021, as the company benefits from lower cash interest expense and
the realization of further cost synergies. Moody's expects that
excess cash will be prioritized for debt reduction in order to
bring leverage below 3x by the end of 2021.
The publishing segment includes over 260 daily publications,
including USA TODAY, and weekly publications in the U.S. and U.K.
Publications are largely in small or mid-sized markets, where
Gannett is the main provider of local news and information.
Publishing revenues are generated through print and digital
subscriptions, along with local, national, and classified
advertising.
Moody's does not expect the structural pressures on Gannett's
advertising and print circulation to ease in the future and any
acceleration in the pace of decline in print circulation revenue
would cancel out any growth in the much smaller digital revenue
segment.
Gannett surpassed 1 million paid digital subscribers in the third
quarter of 2020 (up 31% vs 2019) and is aiming to reach 10 million
over the next five years. Growth in digital-only circulation will
be driven by consistent pay-meters, focus on online branding and
marketing, and enhanced content and price offerings.
Other growth areas the company has been focusing on are Digital
Marketing Services (DMS, 12% of 2020 revenue) and the company's
local Events (1.5% of 2020 revenue). DMS offers various digital
advertising and web presence services to SMEs, although the
majority of its revenue is derived from more commoditized search
products. The addressable market is large and fragmented and
Gannett benefits from local contacts through its advertising
salesforce which should allow it to grow its market share. Given
the highly fragmented market, Moody' s expects that the company may
look to grow its DMS through M&A once it has reduced leverage.
Given the nature of the DMS products, growth in this segment will
lead to EBITDA margins compression.
The Events business also benefits from Gannett's strong foothold in
local communities and while small is expected to nearly triple
revenue in the next two years. The company also operates its own
ticketing platform for these events.
Gannett's circulation and marketing services revenue include a
level of short term predictability with around 71% of 2020
circulation revenue coming from subscriptions -- albeit only
monthly recurring ones - and around 53% of Digital Advertising
revenue are recurring although campaigns can be paused, as they
were in Q2 2020 at the onset of the COVID-19 pandemic.
Environmental risks taken into account in Gannett's ratings focused
mostly on the company's newsprint sourcing which is well defined as
per the company's own environmental policy with steps taken to
reduce consumption (lighter newsprint) and focus on sourcing
sustainability.
Social risks taken into account in Gannett's ratings include
evolving demographic and social trends, with changes in the way
consumers consume media. The print media industry has been affected
by both changing demographics and shifts in consumer behavior for a
preference towards the use of social media and digital platforms
for news content. In addition, the rating takes into account social
risk from potential data privacy breaches and cyber risk.
Governance risks taken into consideration include Moody's
expectation that the company will apply free cash flow to reduce
leverage, a prudent strategy in light of the secular business risks
facing the company.
The B1 rating on the term loan B reflects the probability of
default of the company, as reflected in the B3-PD probability of
default rating, an average expected family recovery rate of 50% at
default, and the term loan's ranking in the capital structure ahead
of $500 million of convertible notes.
The SGL-3 rating reflects Moody's expectation that the company will
maintain adequate liquidity over the next 12 to 18 months, driven
by solid cash flow generation, though most of it is expected to be
used for voluntary debt repayment or to satisfy the expected cash
flow sweep requirement. The company's liquidity profile is
constrained by the lack of a revolving credit facility. The credit
facility is expected to contain a minimum cash balance
requirement.
The stable outlook reflects Moody's expectations that the company
will reduce leverage to below 3x by year end 2021, despite expected
overall revenue decline as a result of EBITDA growth mostly through
cost synergies and debt pay down.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Gannet demonstrates consistent revenue
and EBITDA growth, and sustains Moody's adjusted leverage below
2x.
Ratings could be downgraded if Moody's adjusted leverage does not
decline to below 3x by the end of 2021 or if liquidity materially
deteriorates.
Headquartered in McLean, Virginia, Gannett is the largest owner of
daily newspapers in the United States and community newspapers in
the United Kingdom. Gannett is also the owner of national USA Today
publication. The company is present in 46 states across the US, and
Guam, and it publishes 260 dailies and more than 170 paid weeklies.
In the last twelve months ended September 2020, the company
generated revenue of $3.6 billion and $406 million of EBITDA.
The principal methodology used in these ratings was Media Industry
published in June 2017.
GANNETT CO: S&P Assigns 'B-' Issuer Credit Rating; Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
Gannett Co. Inc. At the same time, S&P assigned its 'B' issue-level
rating and '2' recovery rating to the company's proposed $1.045
billion senior secured term loan, which it will use to refinance
the outstanding balance on its existing term loan.
The stable outlook reflects S&P's expectation that Gannett's
adjusted leverage will improve to about 4x in 2021 as it completes
the integration of its Gannett Media Corp. (legacy Gannett)
acquisition and uses its discretionary cash flow and asset sale
proceeds to repay debt.
S&P's ratings on Gannett reflect the following credit risks:
-- The company's exposure to the newspaper publishing and print
advertising businesses, which are in secular decline;
-- The execution risk related to its integration of legacy
Gannett's operations;
-- The limited proportion of its revenue that it derives from
digital advertising and other digital sources to offset the
declines in its print revenue; and
-- S&P's expectation that its leverage will remain high (about 4x)
for a newspaper publisher in 2021.
These challenges are somewhat offset by the following credit
strengths:
-- Its ability to fund its debt amortization payments and make
discretionary debt repayments using its healthy cash flow
generation and asset sale proceeds;
-- Its national footprint, which helps the company expand its
digital national advertising; and
-- Its lack of near-term liquidity concerns given that its nearest
maturity is in 2026.
Gannett is exposed to the secular declines in print advertising
revenue and newspaper readership. Newspaper publishing and print
advertising remain in secular decline as readers increasingly adopt
alternative sources of paid and free digital news and information.
The coronavirus pandemic and related advertising recession caused
the decline in print advertising revenue to accelerate to more than
30% in 2020.
S&P said, "We expect the company's leverage to improve to about 4x
in 2021, which is high for a newspaper publisher. We expect
Gannett's adjusted leverage will be about 7.5x in 2020 due to its
significant integration and restructuring charges as well as the
effects from the pandemic and related advertising recession. As the
economic recovery from the recession takes hold, we expect the
declines in the company's print advertising and circulation revenue
to moderate. In 2021, we forecast Gannett's leverage will improve
to about 4x as it realizes the expected synergies from its
acquisition, reduces its integration and restructuring charges, and
repays debt. We expect the company to generate healthy
discretionary cash flow of about $150 million in 2021 and
anticipate it will use a significant portion of its cash flows and
asset sale proceeds to repay debt." Gannett's proposed term loan
credit agreement features mandatory amortization of 10% each year,
with a step-down to 5% if it achieves and maintains a first-lien
net leverage ratio that is equal to or less than 1x below the
first-lien net leverage ratio at the transaction closing date. The
proposed terms also require the company to repay debt with any cash
on its balance sheet in excess of $100 million as of the end of
each year."
Unfavorable secular trends pose a risk to S&P's forecast because
they could slow Gannett's ability to deleverage, especially if the
decline in its print advertising revenue accelerates or the
expected expansion of its other revenue sources fails to
materialize. In addition, the company's cash flow and leverage
could be volatile and weaken materially if its revenue declines
accelerate because of a prolonged advertising recession.
The company continues to face execution risk as it seeks to
integrate legacy Gannett and realize its planned synergies. New
Media Investment acquired legacy Gannett in November 2019 to form
the Gannett Co. Inc., through which it expanded its scale and
expects to realize run-rate cost synergies of over $300 million
annually. The company expects to achieve the majority of these
synergies through the consolidation of its newspaper operations,
moving to a centralized sales platform, and reducing corporate
expenses, and realized more than $175 million during 2020. While
its progress remains on track and it has incorporated these
synergies in S&P's forecast, it believes Gannett still faces some
risk, particularly if the revenue from its print newspaper and
advertising business continues to decline at the same rate as in
2020.
The growth and profitability of the company's non-newspaper revenue
streams will be insufficient to offset the declines in its
publishing business.
S&P said, "We expect Gannett's digital marketing services and
events businesses to expand at a healthy rate over the next two
years. However, given the highly competitive environment and the
company's small scale of operations, we do not forecast the growth
of these businesses will be sufficient to offset the declines in
its newspaper publishing business." In addition, Gannett's digital
marketing services business has historically featured a very low
EBITDA margin (about 5% in 2020) and we believe it would need to
increase both the business' revenue and EBITDA margin before it
would materially contribute to the company's EBITDA base."
Gannett's national footprint could help it increase its national
digital advertising revenue. While it still accounts for a small
percentage of its total advertising revenue, the company has
expanded its national digital advertising business in recent
quarters. If Gannett can leverage its national newspaper coverage
to support additional growth, it could help slow the pace of the
decline in its advertising revenue.
The stable outlook on Gannett reflects S&P's expectation that its
adjusted leverage will improve to about 4x in 2021 as its completes
the integration of Gannett Media Corp. (legacy Gannett) and uses
its discretionary cash flow and asset sale proceeds to repay debt.
S&P could lower its ratings on Gannett to the 'CCC' category if it
views its capital structure as unsustainable and believe there is
an increased likelihood of a distressed debt exchange or default.
This could occur if:
-- The declines in its advertising revenue accelerate and it is
unable to profitably expand its non-advertising revenue streams
such that its EBITDA declines limit its ability to generate
discretionary cash flow to repay debt; and
-- Its leverage remains well above 5x without a clear path to
improve to the mid-4x area or lower.
S&P could raise its ratings on Gannett if it expects its EBITDA
margins to improve to the 14%-15% range and its adjusted leverage
to improve well below 4x on a sustained basis, which could occur
if:
-- The company successfully completes its integration of legacy
Gannett and realizes all of the expected synergies;
-- The decline in its advertising revenue returns to a more
normalized level in 2021; and
-- The company uses the majority of its discretionary cash flow
and asset sale proceeds to repay debt.
GIBSON BRANDS: Buys Amplifier Brand Mesa/Boogie
-----------------------------------------------
Chris Eggertsen of Billboard reports that guitar manufacturer
Gibson has acquired boutique amplifier brand Mesa/Boogie.
Founded in 1969 by Randy Smith, Mesa/Boogie began as an amplifier
repair shop before Smith branched out into manufacturing. Among
other innovations, Smith is noted for creating a high-gain
distorted guitar tone, with early customers including Carlos
Santana and Ron Wood and Keith Richards of The Rolling Stones. Adam
Jones of Tool and Captain Kirk Douglas of The Roots also count
themselves as devotees of the brand.
Over subsequent decades, Mesa/Boogie's MESA Engineering became a
leader in tube amplifier technology and in 1991 introduced the Dual
Rectifier Solo Head amp, which became a top seller for the company.
Mesa/Boogie's current flagship product is the MARK I Boogie,
billed as "the world's first high gain, high power, compact 1x12
amplifier."
Under the terms of the acquisition, Smith will join Gibson as
master designer and "pioneer of Mesa/Boogie."
"At Gibson we are all about leveraging our iconic past and leaning
into the innovative future, a quest that started over 100 years ago
with our founder Orville Gibson," said Gibson Brands president and
CEO James "JC" Curleigh. "Today this quest continues with the
addition of Mesa Boogie into the Gibson Brands family, along with
the visionary leadership of Randy Smith and his Team who, for the
past 50 years, have created an iconic and innovative brand that has
stood the test of time. This is a perfect partnership based on our
collective professional experiences and passion for sound."
"I'm 75 years-old and still at work every day," added Smith. "This
is my art and many of our crew have worked along my side for 30 to
40 years. As we witnessed JC and Cesar transform Gibson, we saw
kindred spirits sharing common values and a fierce dedication to
quality. Today, Gibson's guitars are the best-ever and when they
asked if we'd like to become Gibson's Custom Shop for Amplifiers,
we envisioned a perfect collaboration that would expand our
outreach while preserving our legacy beyond my time. Gibson
realizes the unique value of what we've all built together and this
next chapter in the Mesa/Boogie story is a continuation of that
dream. I am so fortunate for this partnership with the new Gibson
after 50 years of doing what I love. It's been the ride of my life
. . . and it ain't over yet!"
Along with other guitar manufacturers, Gibson's sales have surged
during the pandemic, marking an upswing for an industry that
struggled to maintain its relevance in the late 2000s and early
2010s. Gibson itself declared Chapter 11 bankruptcy in May 2018
following an unsuccessful expansion into consumer electronics. It
emerged from bankruptcy that same October when a U.S. bankruptcy
court approved a plan to wipe $500 million in debt and use as much
as $70 million to support the company's growth.
About Gibson Brands
Founded in 1894 and headquartered in Nashville, Tennessee, Gibson
Brands, Inc. -- http://www.gibson.com/-- and its subsidiaries
design and manufacture guitars and other fretted instruments.
Gibson's brands include the Les Paul, SG, Flying V, Explorer, J-45,
Hummingbird, and ES-335, among others.
Gibson Brands, Inc. and 11 affiliates commenced Chapter 11 cases
(Bankr. D. Del. Lead Case No. 18-11025) on May 1, 2018. In the
petition signed by CEO Henry E. Juszkiewicz, Gibson Brands
estimated $100 million to $500 million in assets and liabilities.
The Hon. Christopher S. Sontchi presided over the cases.
The Debtors tapped Goodwin Procter LLP as their lead counsel;
Pepper Hamilton LLP as Delaware and conflicts counsel; Alvarez &
Marsal North America, LLC as restructuring advisor; Brian J. Fox,
managing director of Alvarez & Marsal North America LLC, as chief
restructuring officer; Jefferies LLC as investment banker; and
Prime Clerk LLC as claims and noticing agent.
* * *
Gibson won approval of its Reorganization Plan on Oct. 2, 2018, and
thereafter emerged from Chapter 11 bankruptcy.
GIGAMON INC: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed Gigamon Inc.'s Long-Term Issuer Default
Rating (IDR) at 'B'. The Rating Outlook is Stable. Fitch has also
affirmed Gigamon's $50 million first-lien secured revolver and $550
million first-lien secured term loan at 'B+'/'RR3'.
Fitch's ratings are supported by Gigamon's improving profitability
since its 2019 plan to increase investments in go-to-market and
product development to expand market reach. Fitch estimates EBITDA
margin for 2020 is approximately 20%, up from 16.2% in 2019, and
continued expansion in 2021. Fitch believes the coronavirus
pandemic potentially affected Gigamon's revenue growth in 2020 to
mid-single digits. Fitch estimates Gigamon's gross leverage for
2020 is 7.2x, and declining to below 6.0x in 2021 on higher
EBITDA.
KEY RATING DRIVERS
Market Leader: Gigamon is a market leader in the Network Packet
Broker (NPB) segment with over 35% market share; more than the
combined market share of the next two largest competitors, as a
result of its niche focus and expertise in the segment. In 2019,
management implemented a new go-to-market strategy and invested in
new products to expand market reach. Fitch believes the strategy
has been successfully implemented as of September 2020, and that
this can act as tailwinds, giving the company the ability to
increase revenue growth.
Limited Revenue Scale: Given the niche nature of NPB, Gigamon's
revenue scale is small relative to other IT networking and security
peers; this could lead to greater volatility in revenues and
profits. Furthermore, given the niche nature of the segment, Fitch
does not anticipate meaningful increase in scale through the
forecast period. Despite the small revenue scale, Gigamon has
historically maintained high renewal rates, which should provide
greater revenue visibility for the company.
Rising Network Complexity Supports Secular Growth: Increasing
enterprise network complexity and data speeds are driving demand
for capabilities that enable full network traffic visibility.
Enterprise migration to hybrid cloud is adding additional
complexity in full visibility into the end-to-end network.
Gigamon's ability to provide visibility across both on-premise
networks and cloud infrastructure offers the capabilities required
by its enterprise customers. The company partners with network
infrastructure providers including network equipment, cloud
services, and network monitoring tools; the broad set of
partnerships offer compatibilities in wide-ranging enterprise
network environments.
Susceptible to Industry Cyclicality: Gigamon is susceptible to IT
security industry cycles as demonstrated by the deceleration in
revenue growth since 2016. Fitch believes the weakness may have
been a result of extraordinarily strong growth in the previous two
years, coinciding with heightened IT security awareness that
propelled overall industry growth. Fitch views the current industry
environment as normal and a more realistic base for assessing
future growth potential. Nevertheless, Gigamon's narrowly focused
product expertise will continue to expose the company to industry
cyclicality.
High Leverage: Gigamon's 2020 gross leverage remains near the 7.0x
negative sensitivity threshold previously established. Fitch
estimates 2021 gross leverage to decline below 6.0x driven by
higher revenue growth and margin expansion. The company's capital
structure consists of over 50% equity owned by affiliates of
Evergreen. Fitch believes this demonstrates Evergreen's commitment
and confidence in the industry and Gigamon's business plan. Fitch
expects Gigamon's gross leverage to remain above 5.5x, consistent
with the 'B' rating category, given the private equity ownership
that likely optimizes the capital structure for ROE.
DERIVATION SUMMARY
Gigamon is a market leader in the NPB segment. NPB's provide
network traffic visibility for enterprises for management of IT
networks and security. While Fitch expects the increasing
complexity of enterprise networks will serve as the underlying
demand driver for the segment, the niche nature of the NPB segment
limits upside for Gigamon's revenue scale within the existing
market segments. Gigamon's focus on NPB technologies and products,
and the relatively small revenue scale expose the company to the
industry cyclicality that is inherent to the IT security industry.
Gigamon was acquired by Evergreen Coast Capital Corp., an affiliate
of Elliot Management, in 2017 for $1.6 billion funded with $550
million in term loans, equity contribution from affiliates of
Evergreen, and cash on the balance sheet. Fitch estimates Gigamon's
gross leverage in 2020 is near the negative leverage sensitivity of
7.0x, and below 6.0x by 2021. Gigamon's industry leadership,
revenue scale, and leverage profile are consistent with the 'B'
rating category.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Organic revenue growth in the mid-single digits;
-- EBITDA margins remaining stable at approximately 23%;
-- $15 million outstanding balance on revolving credit facility
repaid in 2021;
-- Internally funded acquisitions averaging $40 million annually;
-- $150 million dividend payment in 2022.
Key Recovery Rating Assumptions
-- The recovery analysis assumes that Gigamon would be
reorganized as a going-concern in bankruptcy rather than
liquidated;
-- Fitch has assumed a 10% administrative claim;
-- Fitch has assumed that the revolver will be drawn down in its
entirety as a result of liquidity constraints.
Going-Concern (GC) Approach
-- Recovery analysis assumes an ~12% revenue decline couple with
margin decline into the ~18% range, resulting in a going
concern EBITDA that is ~30% lower relative to the fiscal 2020
adjusted EBITDA of $77.0 million;
-- Fitch notes the fiscal 2020 estimated EBITDA of $77 million is
lower than the previous $86.9 million LTM EBITDA for fiscal
2019, namely due to one-time costs associated with Gigamon's
investments in their GTM market strategy and product
development;
-- Fitch has applied a 7.0x multiple, up from a 6.50x multiple
previously used, to arrive at an adjusted going-concern EV of
~$340 million. The increase in the multiple reflects the
following: Strong profitability associated with expanded
product reach as a result of investments in GTM strategy and
product development;
-- Software and IT security peer comparisons warranting a 7.0x
recovery multiple;
-- In the 21st edition of Fitch's Bankruptcy Enterprise Values
and Creditor Recoveries case studies, Fitch noted nine past
reorganizations in the Technology sector with recovery
multiples ranging from 2.6x to 10.8x. Of these companies, only
three were in the Software sector: Allen Systems Group, Inc.;
Avaya, Inc.; and Aspect Software Parent, Inc., which received
recovery multiples of 8.4x, 8.1x and 5.5x, respectively.
Gigamon's operating profile is supportive of a recovery
multiple in the middle of this range.
-- The recovery on the first lien is expected to come in at
57%/RR3.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Gross leverage sustained below 5.5x;
-- (CFO-capex ) / Operating EBITDA margins sustained above 7.5%;
-- Successful implementation of growth strategy evidenced by
EBITDA margins sustaining near 23%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Failure to expand margins resulting in gross leverage
sustained above 7.0x;
-- (CFO-capex ) / Operating EBITDA margins sustained below 5%;
-- FFO Interest Coverage sustained below 2.0x;
-- Organic revenue growth sustained below 5%.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: Fitch expects the company's liquidity to remain
solid over the forecast period. Gigamon had approximately $80
million of cash and cash equivalents at the end of 3Q20, in
addition to $35 million available under its $50 million revolver.
Additionally, Fitch anticipates strong pre-dividend free cash flow
throughout the forecast period, ranging from $25 million-$50
million, and consistently in the ~6-11% FCF margin range.
Debt Structure: Gigamon's debt is comprised of a $550 million 1st
lien term loan facility, of which $538 million remains outstanding,
and a $50 million revolving credit facility, of which $35 million
is available. The term loan has a favorable amortization schedule
until maturity in fiscal 2024.
ESG Considerations:
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3' - ESG issues are credit
neutral or have only a minimal credit impact on the entity, either
due to their nature or the way in which they are being managed by
the entity.
GPS HOSPITALITY: S&P Upgrades ICR to 'B-'; Outlook Stable
---------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.
franchise restaurant operator GPS Hospitality Holding Co. LLC to
'B-' from 'CCC+'
At the same time, S&P raised its issue-level rating on the
company's $305 million secured credit facility, which includes a
revolver maturing in 2023 and a first-lien term loan maturing in
2025, to 'B-' from 'CCC+'. S&P's '3' recovery rating remains
unchanged.
S&P said, "The stable outlook reflects our view that GPS will
maintain good cash flow generation while sustaining leverage in the
6x range and adequate covenant headroom in the coming year."
"The upgrade reflects GPS' better-than-expected performance trends
and its capital structure, which we now view as sustainable. GPS'
operations and credit metrics initially weakened in 2020 due to the
negative effects of the pandemic but have slowly improved
throughout the year. We expect this trend to continue over the
coming year and lead to improved credit metrics, including S&P
Global Ratings-adjusted debt to EBITDA in the low-7x area in fiscal
year 2020 before improving to the high-6x area in 2021. We also
project adequate covenant headroom in excess of 15% over the next
12 months, which compares with the mid teen percent area in fiscal
year 2020, and a stronger standing in the credit markets. These
factors lead us to believe the company's capital structure is more
sustainable relative to the weakness and uncertainty we envisioned
in early 2020."
The company's comparable restaurant sales and margin trends have
improved following the initial weakness at the start of the
pandemic. In the third quarter of 2020, GPS' total comparable
sales increased by nearly 3% as all three of its brands expanded
their sales, including a 1% rise at Burger King, a 22% bump at
Popeyes, and a 9% increase at Pizza Hut. This compares with the
company's reported same-store sales decline of more than 9% in the
quarter ended March 31, 2020, and 6% decline in the second quarter
due to government mandates, temporary store closures, and lower
customer traffic. As these initial conditions abated, GPS' revenue
trends benefitted from the gradual reopening of the economy. S&P
also believes the company's sales will continue to expand because
of its restaurant remodels and new store openings as well as its
forecast for a moderate rise in its comparable sales.
S&P said, "At the same time, GPS' restaurant margins were better
than expected in the 12 months ended Sept 30, 2020, compared with
our early 2020 projections. As restaurants reopened, many of the
company's Burger King and Popeyes operations pivoted to drive-thru
operations, which generally feature greater margins than similar
dine-in sales. Moreover, GPS achieved improved labor efficiencies
and other expense controls through its management systems and cost
controls. This enabled the company to genera positive EBITDA from
its Pizza Hut operations, which its acquired in 2019 and were
previously some of the worst performers in its system. While we
expect GPS' dine-in restaurant sales to slowly recover, we also
believe its efficiencies and other operational improvements will
likely lead it to sustain adjusted margins in the 16% range."
"Lower near-term liquidity risks due to its modest expected free
cash flow generation and adequate covenant headroom. We expect the
company to generate modest free operating cash flow (FOCF) in the
$15 million-$20 million range over the coming 12 months as its
spends a projected $25 million annually on capital expenditure
(capex). This is a significant improvement from the negative $26
million of FOCF generation GPS reported during its latest full
fiscal year in 2019. The company's capital spending is primarily
for growth-related investments, including new restaurant
construction and remodeling, which are investments we believe will
help support its expansion. Our projected level of capex consider
GPS' 2020 deferral of contractual new restaurants builds and
remodeling activities. During the early months of the pandemic, the
company negotiated (with its franchisor partners) an extension to
its contractual restaurant investment cadence. We think this
renegotiation has helped balance the company's free cash flow
profile between investments and growth over the next few years."
"Furthermore, GPS has remained in compliance with its required
financial maintenance covenant and we project it will maintain
adequate coverage levels over the next 12 months. This contributes
to our view that its liquidity pressure has abated and its capital
structure is no longer unsustainable over the long term. This view
is also supported by, in our opinion, the company's lack of
near-term maturities (with the nearest being the 2025 maturity of
the term loan facility)."
"Our ratings incorporate the company's good brand position, which
is offset by its limited concept diversity and some regional
concentration. GPS operates as one of the largest Burger King
franchisees with more than 390 restaurant units, which account for
about 2% of Burger King's total operating footprint. The company
also operates a relatively small number of Popeyes Chicken
restaurants and about 70 Pizza Hut stores following the acquisition
it completed in 2019. Together, Popeyes and Pizza Hut contribute
only a modest amount of GPS' consolidated revenue. Therefore, we
view the company as primarily a single-brand restaurant operator
with limited menu diversity that is highly dependent on Burger
King's product/menu innovation and marketing initiatives to support
its overall customer traffic, comparable sales, and EBITDA."
"Our ratings also reflect the company's limited geographic
diversity with restaurants predominately concentrated in the
Southeast and Mid-Atlantic, as well as in Michigan. We believe this
increases GPS' regional economic risk. Moreover, we believe it will
continue to pursue opportunistic acquisitions (mostly
underperforming restaurants) in its Southeast and Gulf Coast
regions and brand footprint. Although the company has a
historically good track record of improving the operations of its
acquired restaurants, we believe this strategy increases its
execution risk and performance volatility."
"The stable outlook on GPS reflects our view that it will report
more consistent income and cash flow generation, leading to better
credit-protection measures including adjusted leverage in the 6x
range."
S&P could lower its rating on GPS if it believes the company's
capital structure is potentially unsustainable. This could could
occur if:
-- The company was unable to execute on its growth strategy,
leading to inconsistent sales and EBITDA and likely resulting in
negative cash flow and potentially a tightening of its covenant
headroom; or
-- Uneven performance and cash flow generation lead to constrained
liquidity such that it pressures the company's ability to service
its debt obligations.
S&P could raise its rating on GPS if:
-- It broadens its scale and materially improves its profitability
through continued successful store development and acquisitions;
and
-- The company adopts a more conservative financial policy such
that S&P expects its adjusted leverage to remain below 6x on a
sustained basis.
GWENDOLYN MARIE WILLIAMS: Serrano Buying Oakland Lot for $181K
--------------------------------------------------------------
Gwendolyn Marie Williams asks the U.S. Bankruptcy Court for the
Northern District of California to authorize the sale of the vacant
lot located at 7475 Woodrow Drive, in Oakland, California, to
Alejandro Serrano Jr. for $181,000.
The Lot was actively marketed by the DIP's real estate agent,
Marshall Johnson of Better Homes and Gardens Reliance Partners.
The Broker listed the Lot at $175,000 and received two offers. The
DIP selected the one with the most favorable combination of terms.
Based on Marshall Johnson's assessment of value, and after
marketing the Lot, the DIP believes the proposed sale is in the
best interest of the Bankruptcy Estate. The Buyer has agreed to
purchase the Lot for the total sum of $181,000 on the terms of the
Vacant Land Purchase Agreement and Joint Escrow Instructions and
the Seller Counter Offer No. 1, subject to Court approval.
The Lot is unencumbered but for real property taxes to the Alameda
County Tax Collector's office in the sum of $2,127. The DIP
proposes to pay associated costs of sale, including but not limited
to, pro-rated real property taxes, city and county transfer taxes
and miscellaneous costs including but not limited to notary fees.
After deduction of the Broker fee of 5% (equates to $9,050) to be
split between the agents, and considering anticipated additional
expenses the Bankruptcy Estate is expected to realize $165,000 from
the contemplated sale.
The sale of the Lot is not subject to overbids. The Lot has been
offered for sale on the open market and is being sold in a
commercially reasonable manner.
The DIP believes that, given the good faith attempt to maximize the
amount that the Lot may bring in a sale, and given all of the facts
set out, the protections afforded by Rule 6004(h) would be
inapplicable to the sale of the Lot. Accordingly, she asks that
the Court orders the sale be effectuated immediately upon entry of
the order.
A copy of the Agreement is available at https://bit.ly/3nZ32DD from
PacerMonitor.com free of charge.
Gwendolyn Marie Williams sought Chapter 11 protection (Bankr. N.D.
Cal. Case No. 20-41797) on Nov. 17, 2020. The Debtor tapped
Michael Primus, Esq., as counsel.
H2 BEVERAGES: Unsecured Creditors to Recover 100% Over Time
-----------------------------------------------------------
Judge Brenda T. Rhoades has entered an order conditionally
approving the Disclosure Statement explaining H2 Beverages'
Reorganization Plan.
The telephonic hearing to consider final approval of the Debtors'
Disclosure Statement and to consider the confirmation of the
Debtors' Plan is fixed and will be held on March 2, 2021 at 9:30
a.m. Feb. 25, 2021 is fixed as the last day for filing written
acceptances or rejections of the Debtors' proposed Chapter 11 plan.
Feb. 23, 2021 is fixed as the last day for filing and serving
written objections to final approval of the Disclosure Statement
and confirmation of the Plan.
Terms of Plan
H2 Beverages submitted a Plan and a Disclosure Statement on Jan.
20, 2021.
Under the terms of the Plan, creditors will be paid from the
continued operations of the Debtor.
The Debtor's assets consist of the money in the bank and the
equipment and machinery used in the operations of the Debtor. The
Debtor believes this property has a value of $30,000.
Class 3 Unsecured Creditors are impaired. All Allowed Unsecured
Creditors other than the monies owed to Kurt Ruppman, in Class 3
will share pro rata in the unsecured creditors pool. The Debtor
will make monthly payments commencing on the Effective Date of
$1,000 into the unsecured creditors' pool. The Debtor will make
distributions to the Class 3 creditors every 90 days commencing 90
days after the Effective Date. The Debtor will make payments until
such time as all Allowed Class 3 creditor will be paid in full.
A full-text copy of the Order dated Jan. 20, 2021, is available at
https://bit.ly/3qOYmlN from PacerMonitor.com at no charge.
A full-text copy of the Disclosure Statement dated Jan. 20, 2021,
is available at https://bit.ly/368QFyW from PacerMonitor.com at no
charge.
Proposed Attorneys for Debtor:
ERIC A. LIEPINS
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Fax: (972) 991-5788
About H2 Beverages
H2 Beverages, Inc., was established in 2015 with the task of
researching and developing a hydrogen gas infusion prototype system
to infuse hydrogen into liquid beverages for the purpose of
promoting health and wellness benefits. H2 Beverages, in 2017,
leased an industrial space at 1601 Summit Avenue, Suite 100, Plano,
Texas. The Company has formulated a science backed successful
hydrogen infused beverage that is proven to offer real health and
wellness benefits, athletic sports performance improvements and as
a very successful therapeutic for the COVID-19 virus. The beverage
is HYDRO SHOT.
H2 Beverages, Inc., filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No.
20-41948) on Sept. 14, 2020. Eric A. Liepins, Esq., of the law
firm of Eric A. Liepins, P.C., serves as the Debtor's counsel.
HERTZ CORP: Authorized to Dispose of Lease Vehicles
---------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District
of Delaware issued a second order resolving matters related to
Hertz Vehicle Financing II LP Master Lease Agreement.
The Master Lease Agreement is that certain Amended and Restated
Master Motor Vehicle Operating Lease and Servicing Agreement
(Series 2013-G1) dated as of Oct. 31, 2014 (as amended by Amendment
No. 1 thereto, dated as of Feb. 22, 2017, and as further amended,
modified or supplemented from time to time), by and among Hertz
Vehicle Financing, LLC, in its capacity as lessor, Hertz Corp., in
its capacity as lessee, in its capacity as servicer and in its
capacity as guarantor, DTG Operations, Inc., in its capacity as
lessee and those permitted lessees from time to time becoming
lessees thereunder ("Lessee").
On Jan. 7, 2021, Hertz and its affiliates filed the Motion for
Order Approving the Interim Settlement Agreement Between the
Debtors and the HVF II ABS Lenders.
Hertz, in its capacity as Servicer, will dispose of at least
121,510 Lease Vehicles (as defined in the Master Lease Agreement),
at least 113,381 of which will be Series 2013-G1 Non-Program
Vehicles ("Subject Non-Program Vehicles") and the remainder of
which will be Series 2013-G1 Program Vehicles ("Subject Program
Vehicles"), in each case, in accordance with the terms of the
Master Lease Agreement between Jan. 1, 2021 and Sept. 30, 2021,
inclusive ("Second Forbearance Period"). Hertz, DTG, and any other
permitted lessee shall, by Sept. 30, 2021, have no more than
157,262 Lease Vehicles.
The disposed Subject Vehicles will be materially consistent with
the list of Lease Vehicles identified to the ABS Lenders prior to
the date hereof. For the avoidance of doubt, any Lease Vehicle
that becomes a Casualty will not be considered to be a disposed
Subject Vehicle. Hertz will be entitled to retain any proceeds
received from the salvage of such Casualty, provided, for the
avoidance of doubt, that such amounts retained will not reduce the
amount of the Casualty Superpriority Claims and will not constitute
proceeds for purposes of calculating the True-Up Amount.
To the extent that Hertz remits any proceeds received from the
salvage of a Casualty to the HVF Trustee, such proceeds, when
received by the HVF Trustee, will reduce the amount of the Casualty
Superpriority Claims dollar for dollar, but will not constitute
proceeds for purposes of calculating the True-Up Amount.
Hertz, in its capacity as Servicer, shall, on a weekly basis, remit
or cause to be remitted all proceeds from the disposition of
vehicles leased under the Master Lease Agreement to the HVF Trustee
in accordance with the terms of the Master Lease Agreement, the
Collateral Agency Agreement, and associated documents by payment to
the collateral account established for the benefit of the HVF
Trustee, as Beneficiary, pursuant to the terms of the Collateral
Agency Agreement, provided that, for Subject Vehicles sold during
the Second Forbearance Period, Hertz may retain $900 per Subject
Vehicle from such disposition proceeds for vehicles sold through
Hertz's retail channel. For the avoidance of doubt, such amounts
retained will not constitute proceeds for purposes of calculating
the True-Up Amount.
Hertz, in its capacity as Lessee, will make, and will cause each
other Lessee to make, a total of $756 million in payments to the
HVF Trustee (as assignee of the claims of HVF against the Debtors
under the Master Lease Agreement) under the Master Lease Agreement
in nine equal payments of $84 million ("Base Payment") in each case
on the Base Rent payment date set forth in the Master Lease
Agreement starting in January 2021 through September 2021,
inclusive ("Payment Dates"), in each case by payment into the
Collateral Account.
Hertz, in its capacity as administrator under the Group I
Administration Agreement governing the administration of HVF II,
will promptly take all actions to cause draws on the applicable
preexisting prepetition letters of credit to be made in the amounts
permitted under, and subject to, the terms of the HVF II VFN
Supplement or the relevant Series Supplement for the applicable
series of MTN Notes, as applicable, on the relevant payment dates
contemplated thereunder. The proceeds from any such draw will be
used, as applicable, for the payment of (i) all senior fees, costs
and expenses ranking ahead of payments of interest pursuant, as
applicable, to Section 5.3(a)-(c) of the HVF II VFN Supplement and
the analogous provisions of the relevant Series Supplements for the
applicable series of MTN Notes, (ii) all interest payable on the
VFN Notes and MTN Notes, as applicable, (iii) applicable fees under
the HVF II VFN Supplement to be paid to the Agent for the VFN Notes
and (iv) solely to the extent permitted under the terms of such
Letter of Credit and the corresponding HVF II VFN Supplement,
principal payable on the VFN Notes on account of a Principal
Deficit Amount.
For any series of MTN Notes or VFN Notes, to the extent that any
applicable Letter of Credit is exhausted, unavailable or otherwise
unable to be drawn upon in order to satisfy the applicable Interest
Obligations (excluding clause (iv) thereof) for such series of HVF
II Notes, Hertz will deposit in cash into the series interest
collection account for such series of HVF II Notes, an amount
sufficient to pay remaining Interest Obligations for such series of
HVF II Notes during the Second Forbearance Period prior to 11:00
a.m. (NY time) on each payment date for such series of HVF II
Notes.
In the event that the actual cumulative vehicle disposition
proceeds of the Lease Vehicles sold in a given period set forth on
Schedule I are less than 90% of the target cumulative vehicle
disposition proceeds with respect to such period, Hertz, in its
capacity as Lessee, will pay, and will cause each other Lessee to
pay, the HVF Trustee, as assignee of the claims of HVF against the
Debtors under the Master Lease Agreement, an additional cash amount
("True-Up Amount") equal to the difference between (1) 90% of the
target cumulative vehicle disposition proceeds set forth on the
Vehicle Disposition Schedule for such period on Schedule I and (2)
the actual cumulative vehicle disposition proceeds of the Lease
Vehicles sold in such period.
Solely for the purposes of calculating the True-Up Amount,
disposition proceeds for any month will include any receivable
generated from the disposition of a Lease Vehicle (as defined in
the Master Lease Agreement) and not then outstanding for more than
30 days. To the extent a receivable is outstanding for longer than
30 days, such receivable will be removed from the actual cumulative
vehicle disposition proceeds of Lease Vehicles for purposes of
calculating the True-Up Amount until such receivable is paid. Any
such True-Up Amount will be paid with the Base Payment for the
immediately following month, added to the actual cumulative vehicle
disposition proceeds for the immediately following period, and
included in the actual cumulative vehicle disposition proceeds of
the Lease Vehicles for any period thereafter to avoid duplication
when calculating the True-Up Amount.
During the Second Forbearance Period, the Depreciation Charge with
respect to the Series 2013-G1 Non-Program Vehicles will average
approximately 1.43 % per month of such vehicles' Capitalized Costs,
which is equivalent to a Depreciation Charge of 2.34 % per month of
such vehicles' Net Book Value as of Feb. 1, 2021. The Depreciation
Charge for December, which was recognized on Jan. 1, 2021, with
respect to each Series 2013-G1 Non-Program Vehicle was set at least
equal to 2% per month of the Capitalized Costs of such vehicle.
Pursuant to section 364(c)(1) of the Bankruptcy Code, all payments
on account of a Casualty accrued under the Master Lease Agreement
from the Petition Date through the end of the Second Forbearance
Period, plus interest thereon from the date such amount would be
payable under the Master Lease Agreement at the one-month LIBOR
Rate plus 5.5%, will constitute allowed superpriority
administrative expense claims of the HVF Trustee, as assignee of
the claims of HVF arising under the Master Lease Agreement on
behalf of all holders of the VFN Notes and the MTN Notes, against
the Debtors with priority over any and all claims against the
Debtors now existing or hereafter arising, of any kind whatsoever.
Hertz is authorized to dispose of or retain, as applicable, up to
40,000 Subject Vehicles under the Master Lease Agreement by, for
use in the ordinary course of the Debtors' business, by either (i)
purchasing such Subject Vehicles in accordance with the terms of
the Master Lease Agreement at the greater of Net Book Value and
Market Value or (ii) irrevocably agreeing to make timely payments
of Base Rent under the Master Lease Agreement with respect to such
Subject Vehicles, on the basis of a Depreciation Charge of at least
1.67% per month of Capitalized Costs with respect to each Subject
Non-Program Vehicle, and timely payments on account of a Casualty
due under the Master Lease Agreement with respect to such Subject
Vehicles from and after the time of such election.
The Debtors will timely pay (i) all reasonable incurred and
documented fees, costs and expenses accrued through the end of the
Second Forbearance Period of: (x) the advisors to the Agent (or
counsel to the agent), acting in such capacity, (ii) all fees,
costs, expenses and indemnification obligations owed to BNYM, in
its capacity as HVF Trustee or in any capacity related thereto
accrued through the end of the Second Forbearance Period and all
outstanding amounts paid by the ABS Lenders on account of direction
letters sent by certain ABS Parties to BNYM prior to the date
thereof, in each case pursuant to the terms of the Debtors'
prepetition agreements with BNYM and (iii) an additional
administrative agency fee for the Agent payable monthly in advance
during the Second Forbearance Period equal to 0.020% per month
multiplied by the principal amount outstanding under the HVF II VFN
Supplement on the first day of each month, with the payment due as
of Jan. 1, 2021 being made within five days of the entry of the
Order and each subsequent payment will be made on the first day of
each month from February 2021 to September 2021.
The Debtors will also pay an interim transaction fee of $2 million
to GLC Advisors within five business days of the entry of the
Order. Notwithstanding anything contained in the Order, the
Debtors are not authorized, absent further order of the Court, (i)
to pay any transaction fee or success fee to any professional
entitled to payment, other than the GLC Interim Transaction Fee, or
(ii) with respect to the fees, costs and expenses payable.
The professionals whose fees, costs and expenses are payable ("ABS
Lender Professionals") will not be required to submit invoices to
the Court or any other party in interest other than summary
invoices to the Debtors, the Committee, and the United States
Trustee. The summary invoices will include the number of hours
billed and be sufficiently detailed to enable a determination as to
the reasonableness of such fees and expenses.
Upon receipt of a proposal for a refinancing or replacement of the
HVF II ABS Program with a new facility ("HVF 3.0"), Hertz will
notify the Committee, the Agent and GLC Advisors that it has
received a Proposal and convey to the Notice Parties the key terms
of such Proposal and other information that would reasonably be
necessary for the Agent, VFN Lenders and MTN Steering Committee and
the Committee to analyze such Proposal. Hertz, the Agent, and, if
requested by GLC Advisors, a representative of the MTN Steering
Committee (or other HVF II Financing Parties at Hertz's discretion)
will negotiate in good faith on a non-exclusive basis concerning
terms on which the HVF II Financing Parties may provide HVF 3.0.
Notwithstanding any provision of the Order to the contrary, the
terms of the DIP Order with respect to the Casualty Superpriority
Claims as defined in the DIP Order will also apply to the Casualty
Superpriority Claims as defined in the Order, including the
provisions of the DIP Order with respect to the Carve-Out.
The automatic stay of section 362 of the Bankruptcy Code is
modified to the extent necessary to permit the Debtors and the ABS
Lenders to comply with the terms of the Order.
The notice requirement set forth in Bankruptcy Rule 6004(a) is
satisfied.
The Order is immediately effective and enforceable notwithstanding
the provisions of Bankruptcy Rules 4001(a), 6004(h) or otherwise.
A copy of the Schedule I is available at
https://tinyurl.com/y55mzkg2 from PacerMonitor.com free of charge.
About Hertz Corp.
Hertz Corp. and its subsidiaries -- http://www.hertz.com--
operate
a worldwide vehicle rental business under the Hertz, Dollar, and
Thrifty brands, with car rental locations in North America,
Europe,
Latin America, Africa, Asia, Australia, the Caribbean, the Middle
East, and New Zealand. They also operate a vehicle leasing and
fleet management solutions business.
On May 22, 2020, The Hertz Corporation and certain of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court for
the District of Delaware (Bankr. D. Del. Case No. 20-11218).
Judge Mary F. Walrath oversees the cases. The Debtors have tapped
White & Case LLP as their bankruptcy counsel, Richards, Layton &
Finger, P.A. as local counsel, Moelis & Co. as investment banker,
and FTI Consulting as financial advisor. The Debtors also retained
the services of Boston Consulting Group to assist the Debtors in
the development of their business plan. Prime Clerk LLC is the
claims agent.
The U.S. Trustee for Regions 3 and 9 appointed a Committee to
represent unsecured creditors in Debtors' Chapter 11 cases. The
Committee has tapped Kramer Levin Naftalis & Frankel LLP as its
bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as
Delaware counsel, UBS Securities LLC as investment banker, and
Berkeley Research Group, LLC as financial advisor. Ernst & Young
LLP provides audit and tax services to the Committee.
HOME POINT: Fitch Hikes LongTerm IDR to B+, Outlook Stable
----------------------------------------------------------
Fitch Ratings has upgraded Home Point Financial Corporation's (Home
Point) Long-Term Issuer Default Rating (IDR) one notch to 'B+'.
Fitch has also assigned a final Long-Term IDR of 'B+' to Home Point
Capital Inc. (Home Point Capital), the parent of Home Point and the
debt-issuing entity. The Rating Outlooks are Stable. Concurrently,
Fitch has assigned a final rating of 'B'/'RR5' to Home Point
Capital's $550 million, 5% senior unsecured notes due February
2026. Proceeds from the issuance will be used to fund a
distribution to owners and to pay down a portion of the company's
existing MSR facility borrowings.
The assignment of the final ratings follows the receipt of final
documents conforming to information already received. The final
ratings are the same as the expected ratings assigned to the IDR
and senior unsecured debt on Jan. 12, 2020.
KEY RATING DRIVERS
IDRs and SENIOR DEBT
The upgrade of Home Point's rating reflects execution on the
planned unsecured debt issuance, which Fitch believes enhances the
firm's funding flexibility. Home Point's ratings continue to
reflect its growing market position as a wholesale and
correspondent lender in the U.S. non-bank residential mortgage
sector, an improved earnings profile, which has benefited from the
growing platform scale, strong asset quality performance given
below market forbearance rates, the maintenance of sufficient
liquidity despite growth in servicing advance requirements, an
experienced management team with extensive industry background,
sufficient reserves to cover potential representation and warranty
claims, and an appropriate risk control framework.
Rating constraints include the challenging economic backdrop, which
Fitch believes may pressure asset quality over the medium-term,
particularly as coronavirus-related government benefits begin to
expire, Home Point's limited scale, above-average earnings
volatility, partially driven by mortgage servicing rights (MSR)
valuation marks, reliance on secured, short-term wholesale funding
facilities, shorter operating history having been established in
2015, and private equity ownership through affiliated investment
vehicles managed by Stone Point Capital LLC, which increases the
potential for capital extraction and constrains long-term strategic
clarity.
Fitch believes the highly cyclical nature of the mortgage
origination business and the capital intensity and valuation
volatility of MSR within the servicing business are the primary
rating constraints for non-bank mortgage companies, including Home
Point. Furthermore, the mortgage business is subject to intense
legislative and regulatory scrutiny, which further increases
business risk, and the imperfect nature of interest rate hedging
can introduce liquidity risks related to margin calls or earnings
volatility. These industry constraints typically limit non-bank
mortgage companies' ratings to below investment-grade levels.
Home Point is not subject to material asset quality risks because
nearly all originated loans are government or agency eligible and
sold to third parties shortly after origination. However, Home
Point has exposure to potential losses due to repurchase or
indemnification claims from third parties under certain warranty
provisions. Home Point expects to continue to build reserves for
new loan production to account for this risk, which Fitch believes
is prudent. Home Point's historical repurchase and indemnification
claims have been minimal and the company has had sufficient
reserves to cover these charges, which Fitch expects to continue.
Fitch considers the asset quality performance of Home Point's
servicing portfolio to be solid, as delinquencies have been low
relative to peers and the overall market in recent years. While
Home Point's peak forbearance levels were above market averages,
they have since declined and are now below broader market levels.
However, Fitch expects delinquencies to remain above historical
averages for some time as forbearance programs cease and the
macroeconomic effects of the coronavirus continue, which could
result in increased servicing costs.
The company's pre-tax returns on average assets (ROAA) and margins
improved in 2020 after volatile results in recent years. The
improvement was driven by strong origination volume, elevated gain
on sale margins and enhanced scale. Home Point's ROAA for the 12
months ended Sept. 30, 2020 was 20.3%, up from an average of 0.0%
between 2016 and 2019.
Fitch expects Home Point's profitability to moderate from current
levels, driven by the normalization of gain on sale margins,
incremental valuation hits on MSR given the continuation of low
interest rates and elevated prepayments, which will be partially
offset by the company's MSR hedges, and higher funding costs
associated with the unsecured note issuance. Earnings may also be
pressured by increased servicing costs in the event of a prolonged
period of increased delinquencies and defaults resulting from the
impact of the coronavirus on employment and the economy.
Fitch evaluates Home Point's leverage primarily on the basis of
gross debt to tangible equity, which amounted to 3.6x as of Sept.
30, 2020; down from 5.2x at Dec. 31, 2019. Pro-forma for the $550
million senior unsecured note issuance and a $270 million
distribution to shareholders, Fitch expects leverage will increase
to 5.8x. This is consistent with the 'bb' category leverage
benchmark range for balance-sheet intensive finance and leasing
companies with a 'a' category operating environment score.
Fitch expects Home Point's leverage to decline towards 4.0x
throughout 2021 given solid earnings and an absence of additional
shareholder distributions. Home Point's corporate tangible
leverage, which excludes borrowings on warehouse facilities from
total debt and excludes equity used to fund assets through other
debt facilities from tangible net worth, was much lower at Sept.
30, 2020, at 0.9x pro forma for the note issuance, and below the
covenanted maximum of 1.5x under Home Point's MSR secured
facility.
Consistent with other mortgage companies, Home Point has
historically been reliant on the wholesale debt markets to fund
operations. Secured debt, which accounted for 100% of total debt at
Sept. 30, 2020, comprised warehouse facilities, a servicer advance
facility and a term loan facility secured by MSRs. Proforma for the
issuance, Home Point's unsecured debt represented 19.7% of total
debt, as of Sept. 30, 2020.
This level of unsecured funding is consistent with Fitch's funding,
liquidity and coverage benchmark score of 'bb' for balance sheet
intensive finance and leasing companies with an 'a' category
operating environments score. Home Point's secured funding tenor is
short duration and most of its facilities mature within one year;
well below that of other non-bank financial institutions, which
exposes Home Point to increased liquidity and refinancing risk. The
unsecured debt issuance has diversified the firm's funding sources
and added some duration to the funding profile, which Fitch views
favorably.
The company also relies heavily on uncommitted funding, as only
20.5% of funding capacity was made on a committed basis as of Oct.
16, 2020. The proposed unsecured debt issuance will diversify its
funding sources and add some duration to the funding profile, which
Fitch views favorably. However, an increase in committed funding
capacity would also be positive for the ratings.
On April 21, 2020, the Federal Housing Finance Agency, which is the
regulator of Fannie Mae and Freddie Mac (Fannie and Freddie,
collectively the GSEs), announced that GSE mortgage servicers will
not have to advance principal and interest for more than four
months of missed payments for borrowers in forbearance. This
timeframe is consistent with the policy before the coronavirus,
when the GSEs generally purchased loans out of mortgage-backed
security pools after being delinquent for four months. Fitch views
this development positively as it limits the potential liquidity
strain on Home Point from the Fannie and Freddie portions of the
MSR portfolio, which comprised approximately 69% of the MSR
portfolio at Nov. 30, 2020.
Fitch views Home Point's liquidity profile as adequate for the
ratings given actions already taken to shore up liquidity in
response to the coronavirus. As of Oct. 16, 2020, Home Point had
approximately $144.6 million of unrestricted cash, available
borrowing capacity of $1.2 billion on uncommitted warehouse
facilities, $93 million of capacity on committed MSR secured
facilities, $50 million of capacity on uncommitted MSR secured
facilities, $67 million of capacity on uncommitted servicing
advance facilities, and $203 million of capacity on other
uncommitted facilities.
Home Point is amending its MSR secured facility to provide
increased capacity and allow for the funding of servicing advances,
and recently established a new $500 million unsecured warehouse
facility. Fitch would view execution of the MSR secured facility
positively as it would increase funding capacity for servicing
advances.
The Stable Rating Outlook reflects Fitch's expectations that Home
Point will maintain good asset quality and generate consistent
earnings, while maintaining access to diversified funding and
sufficient liquidity. Fitch also expects Home Point's leverage will
decline over time given management's strategy to increase retained
earnings over the Outlook horizon.
The rating on Home Point's senior unsecured debt is one notch below
the Long-Term IDR, given its subordination to secured debt in the
capital structure, a limited pool of unencumbered assets and
therefore weaker relative recovery prospects in a stressed
scenario.
RATING SENSITIVITIES
IDRs and SENIOR DEBT
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch believes there is limited potential for further positive
rating momentum in the near term given the broader economic
backdrop, but continued growth of the business that enhances
Home Point's franchise, enhanced earnings consistency, a
continuation of strong asset quality, a reduction in and
maintenance of leverage below 5.0x, an increase in longer
duration secured and unsecured debt, an increase in the
proportion of committed funding, and an enhanced liquidity
profile would be rating positive.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Negative rating action could also be driven by an inability to
maintain sufficient liquidity to effectively manage elevated
servicer advance requirements stemming from higher than
historical forbearance levels and the potential for higher
delinquencies following the lapse of forbearance programs, a
sustained increase in leverage at-or-above 6.0x, a reduction
in earnings closer to historical levels, an inability to
refinance secured funding facilities, and/or a lack of
appropriate staffing and resource levels relative to planned
growth.
-- Meaningfully, or if Home Point incurred substantial fines that
negatively affect its franchise or operating performance, this
could also drive negative rating momentum.
-- The rating on Home Point's senior unsecured notes is sensitive
to changes in the Long-Term IDR and would be expected to move
in tandem. However, a material increase in unencumbered assets
and/or an increase in the proportion of unsecured funding
could result in the equalization of the senior unsecured
notes' rating with Home Point's Long-Term IDR.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ESG CONSIDERATIONS
Home Point has an ESG Relevance Score of '4' for Governance
Structure due to private equity ownership and board effectiveness
as they relate to protection of creditor and shareholder rights. An
ESG Relevance Score of '4' means Governance Structure is relevant
to Home Point's rating but not a key rating driver. However, it
does have a negative impact on the rating in combination with other
factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
IDEANOMICS INC: Enters Into $37.5M Convertible Debenture with YA II
-------------------------------------------------------------------
Ideanomics, Inc. entered into a convertible debenture, dated Jan.
15, 2021 with YA II PN, Ltd. with a principal amount of
$37,500,000. The Note has a fixed conversion price of $3.31. The
Conversion Price is not subject to adjustment except for
subdivisions or combinations of common stock. The Principal and
the interest payable under the Note will mature on July 15, 2021,
unless earlier converted or redeemed by the Company. At any time
before the Maturity Date, the Investor may convert the Note at
their option into shares of Company common stock at a fixed
conversion price of $3.31. The Company has the right, but not the
obligation, to redeem a portion or all amounts outstanding under
this Note prior to the Maturity Date at a cash redemption price
equal to the Principal to be redeemed, plus accrued and unpaid
interest, if any; provided that the Company provides Investor with
at least 15 business days' prior written notice of its desire to
exercise an Optional Redemption and the volume weighted average
price of the Company's common stock over the 10 Business Days'
immediately prior to such redemption notice is less than the
Conversion Price. The Investor may convert all or any part of the
Note after receiving a redemption notice, in which case the
redemption amount shall be reduced by the amount so converted. No
public market currently exists for the Note, and the Company does
not intend to apply to list the Note on any securities exchange or
for quotation on any inter-dealer quotation system. The Note
contains customary events of default, indemnification obligations
of the Company and other obligations and rights of the parties.
The Company used the proceeds from the offer and sale of the Note,
among other sources of funds, to fund the purchase of Wireless
Advanced Vehicle Electrification, Inc. for an aggregate purchase
price of $50,000,000.
The Note was offered pursuant to the Company's effective
registration statement on Form S-3 (Registration Statement No.
333-239371) previously filed with the Securities and Exchange
Commission and a prospectus supplement thereunder. A prospectus
supplement relating to the offering of the securities has been
filed with the SEC and is available on the SEC's website at
http://www.sec.gov.Upon the offering of the Note, the aggregate
amount of securities registered by the Company under the
Registration Statement was exhausted. The Company currently has
371,604,199 shares of common stock outstanding.
About Ideanomics
Ideanomics is a global company focused on the convergence of
financial services and industries experiencing technological
disruption. Its Mobile Energy Global (MEG) division is a service
provider which facilitates the adoption of electric vehicles by
commercial fleet operators through offering vehicle procurement,
finance and leasing, and energy management solutions under its
innovative sales to financing to charging (S2F2C) business model.
Ideanomics Capital is focused on disruptive fintech solutions and
services across the financial services industry. Together, MEG and
Ideanomics Capital provide their global customers and partners with
leading technologies and services designed to improve transparency,
efficiency, and accountability, and its shareholders with the
opportunity to participate in high-potential, growth industries.
The company is headquartered in New York, NY, with offices in
Beijing, Hangzhou, and Qingdao, and operations in the U.S., China,
Ukraine, and Malaysia.
Ideanomics reported a net loss of $96.83 million for the year ended
Dec. 31, 2019, compared to a net loss of $28.42 million for the
year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had
$138.46 million in total assets, $49.33 million in total
liabilities, $1.26 million in convertible redeemable preferred
stock, $7.37 million in redeemable non-controlling interest, and
$80.50 million in total equity.
B F Borgers CPA PC, in Lakewood, Colorado, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 16, 2020, citing that the Company incurred recurring
losses from operations, has net current liabilities and an
accumulated deficit that raise substantial doubt about its ability
to continue as a going concern.
INTELSAT SA: Wilmer, Zemanian Represent Noteholder Group
--------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Wilmer Cutler Pickering Hale and Dorr LLP and
Zemanian Law Group submitted a verified statement to disclose that
they are representing the Ad Hoc Group of Secured Noteholders in
the Chapter 11 cases of Intelsat S.A., et al.
The Ad Hoc Group of Secured Noteholders of (i) the 9.5% Senior
Secured Notes due 2022 issued under that certain Indenture, dated
as of June 30, 2016, by and among Intelsat Jackson Holdings S.A.,
as issuer, Wilmington Trust, National Association, as trustee, and
certain guarantors party thereto, and (ii) the 8.0% Senior Secured
Notes due 2024.
In January 2021, the Ad Hoc Group retained Wilmer Cutler Pickering
Hale and Dorr LLP to represent them in connection with the chapter
11 cases of the above-captioned debtors and debtors-in-possession.
Also in January 2021, the Ad Hoc Group retained Zemanian Law Group
to serve as Virginia local counsel with respect to such matters.
As of Jan. 21, 2021, members of the Ad Hoc Group and their
disclosable economic interests are:
Aristeia Capital LLC
One Greenwich Plaza 3rd Floor
Greenwich, CT 06830
* 2022 Jackson Secured Notes: $49,084,000.00
* 2024 Jackson Secured Notes: $11,925,000.00
* DIP Loans: $5,790,384.00
Bardin Hill Investment Partners LP
299 Park Avenue 24th Floor
New York, NY 10171
* 2022 Jackson Secured Notes: $44,949,000.00
HBK Services LLC
2300 North Field Street Suite 2200
Dallas, TX 75201
* 2022 Jackson Secured Notes: $57,606,000.00
* 2024 Jackson Secured Notes: $192,321,000.00
* DIP Loans: $6,032,989.00
* Jackson Term Loans: $63,148,916.00
VR Advisory Services, Ltd.
300 Park Avenue 16th Floor
New York, NY 10022
* 2022 Jackson Secured Notes: $12,128,000.00
* DIP Loans: $751,822.06
Counsel to the Ad Hoc Group of Secured Noteholders can be reached
at:
Philip D. Anker, Esq.
Lauren R. Lifland, Esq.
Salvatore M. Daniele, Esq.
WILMER CUTLER PICKERING HALE AND DORR LLP
7 World Trade Center
250 Greenwich Street
New York, NY 10007
Telephone: (212) 230-8800
Facsimile: (212) 230-8888
E-mail: philip.anker@wilmerhale.com
lauren.lifland@wilmerhale.com
sal.daniele@wilmerhale.com
- and -
Benjamin W. Loveland, Esq.
WILMER CUTLER PICKERING HALE AND DORR LLP
60 State Street
Boston, MA 02109
Telephone: (617) 526-6641
Facsimile: (617) 526-5000
E-mail: benjamin.loveland@wilmerhale.com
- and -
Peter G. Zemanian, Esq.
Paul A. Driscoll, Esq.
ZEMANIAN LAW GROUP
223 E. City Hall Ave.
Suite 201
Norfolk, VA 23510
Telephone: (757) 622-0090
E-mail: pete@zemanianlaw.com
paul@zemanianlaw.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/2LT4SsZ
About Intelsat S.A.
Intelsat S.A. -- http://www.intelsat.com/-- is a publicly held
operator of satellite services businesses, which provides a diverse
array of communications services to a wide variety of clients,
including media companies, telecommunication operators, internet
service providers, and data networking service providers. The
Company is also a provider of commercial satellite communication
services to the U.S. government and other select military
organizations and their contractors. The Company's administrative
headquarters are in McLean, Virginia, and the Company has extensive
operations spanning across the United States, Europe, South
America, Africa, the Middle East, and Asia.
Intelsat S.A. and its debtor affiliates concurrently filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Lead Case No. 20-32299) on May 13, 2020. The
petitions were signed by David Tolley, executive vice president,
chief financial officer, and co-chief restructuring officer. At
the time of the filing, the Debtors disclosed total assets of
$11,651,558,000 and total liabilities of $16,805,844,000 as of
April 1, 2020.
Judge Keith L. Phillips oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kutak Rock LLP as legal
counsel; Alvarez & Marsal North America, LLC as restructuring
advisor; PJT Partners LP as financial advisor & investment banker;
Deloitte LLP as tax advisor; and Deloitte Financial Advisory
Services LLP as fresh start accounting services provider. Stretto
is the claims and noticing agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on May 27, 2020. The committee tapped Milbank LLP and
Hunton Andrews Kurth LLP as legal counsel; FTI Consulting, Inc. as
financial advisor; Moelis & Company LLC as investment banker; Bonn
Steichen & Partners as special counsel; and Prime Clerk LLC as
information agent.
INTERPACE BIOSCIENCES: Enters Into $2 Million Promissory Note
-------------------------------------------------------------
Interpace Biosciences, Inc. entered into a secured promissory note
with 1315 Capital II, L.P. on Jan. 7, 2021, pursuant to which 1315
Capital made a loan to the Issuer in an aggregate principal amount
equal to $2,000,000, as disclosed in a regulatory filing with the
Securities and Exchange Commission. The rate of interest on the
Note is equal to eight percent per annum and its maturity date is
the earlier of (a) June 30, 2021 and (b) the date on which all
amounts become due upon the occurrence of any event of default as
defined in the Note. No interest payments are due on the Note
until its maturity date.
Pursuant to the Security Agreement, the Note is secured by a first
priority lien and security interest on substantially all of the
assets of the Issuer. Additionally, if a change of control of the
Issuer occurs the Issuer is required to make a prepayment of the
Note in an amount equal to the unpaid principal amount, all accrued
and unpaid interest, and all other amounts payable under the Note
out of the net cash proceeds received by the Issuer from the
consummation of the transactions related to such change of control.
The Issuer may prepay the Note in whole or in part at any time or
from time to time without penalty or premium by paying the
principal amount to be prepaid together with accrued interest
thereon to the date of prepayment. No prepaid amount may be
re-borrowed.
The Note contains certain negative covenants which prevent the
Issuer from issuing any debt securities pursuant to which the
Issuer issues shares, warrants or any other convertible security in
the same transaction or a series of related transactions, except
that Issuer may incur or enter into any capitalized and operating
leases in the ordinary course of business consistent with past
practice, or borrowed money or funded debt in an amount not to
exceed $4.5 million that is subordinated to the Note on terms
acceptable to 1315 Capital; provided, that if the aggregate
consolidated revenue recognized by the Issuer as reported on Form
10-K as filed with the SEC for any fiscal year ending after Jan.
10, 2020 exceeds $45 million, the Debt Threshold for the following
fiscal year shall increase to an amount equal to: (x) ten percent;
multiplied by (y) the consolidated revenue as reported by the
Issuer on Form 10-K as filed with the SEC for the previous fiscal
year.
In an amended Schedule 13D filed with the SEC, 1315 Capital II,
L.P. and 1315 Capital Management II, LLC disclosed that as of Jan.
7, 2021, they beneficially own 3,166,666 shares of common stock of
Interpace Biosciences, which represents 26.6 percent of the shares
outstanding.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1054102/000149315221001542/formsc13da.htm
About Interpace Diagnostics
Headquartered in Parsippany, NJ, Interpace Biosciences f/k/a
Interpace Diagnostics Group, Inc. -- http://www.interpace.com--
offers specialized services along the therapeutic value chain from
early diagnosis and prognostic planning to targeted therapeutic
applications. Clinical services, through Interpace Diagnostics,
provides clinically useful molecular diagnostic tests,
bioinformatics and pathology services for evaluating risk of cancer
by leveraging the latest technology in personalized medicine for
improved patient diagnosis and management. Pharma services, through
Interpace Pharma Solutions, provides pharmacogenomics testing,
genotyping, biorepository and other customized services to the
pharmaceutical and biotech industries.
Interpace reported a net loss attributable to common stockholders
of $27.16 million for the year ended Dec. 31, 2019, compared to a
net loss attributable to common stockholders of $12.19 million for
the year ended Dec. 31, 2018. As of June 30, 2020, the Company had
$78.43 million in total assets, $30.20 million in total
liabilities, and $46.54 million in preferred stock, and $1.69
million in total stockholders equity.
As of Sept. 30, 2020, the Company had $50.70 million in total
assets, $25.96 million in total liabilities, and $46.54 million in
preferred stock, and $21.80 million total stockholders' deficit.
Interpace Biosciences stated in its Quarterly Report for the period
ended Sept. 30, 2020, that, "The Company has and may continue to
delay, scale-back, or eliminate certain of its activities and other
aspects of its operations until such time as the Company is
successful in securing additional funding. The Company is
exploring various dilutive and non-dilutive sources of funding,
including equity and debt financings, strategic alliances, business
development and other sources. In the event the Company's Common
Stock is delisted from Nasdaq due to its failure to meet minimum
stockholders' equity requirements, the Company's ability to raise
additional capital may be materially adversely impacted. In
addition, the Company's inability to use Form S-3 after it files
its Form 10-K for the fiscal year ended December 31, 2020 may have
an adverse impact on our ability to raise additional capital. The
future success of the Company is dependent upon its ability to
obtain additional funding. There can be no assurance, however,
that the Company will be successful in obtaining such funding in
sufficient amounts, on terms acceptable to the Company, or at all.
As of the date of this Report, the Company currently anticipates
that current cash and cash equivalents will be sufficient to meet
its anticipated cash requirements through the end of the second
quarter . These factors raise substantial doubt about the Company's
ability to continue as a going concern."
ITT HOLDINGS: S&P Cuts ICR to BB- on RS Ivy Acquisition
-------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on ITT Holdings
LLC (IMTT) to 'BB-' from 'BB', which is in line with its issuer
credit rating on RS Ivy Holdco, and removed the rating from
CreditWatch, where the rating agency placed it with negative
implications on Nov. 12, 2020. The outlook is stable.
At the same time, S&P lowered its issue-level rating on the senior
unsecured debt at IMTT to 'BB-' from 'BB' given a recovery rating
of '3'.
The acquisition of IMTT by RS Ivy Holdco was completed in December
2020, and S&P expects IMTT's financial policy to be controlled by
financial sponsor Riverstone Holdings, leading to elevated
financial risk.
S&P said, "We now consider IMTT a subsidiary of RS Ivy, and our
issuer credit ratings on the companies will be aligned at 'BB-'. RS
Ivy is owned and controlled by Riverstone Holdings, an entity that
we consider a financial sponsor. In our view, financial sponsors
often drive financial risk given their proclivity for using
leverage to increase returns. Moreover, on Dec. 23, 2020, RS Ivy
raised $500 million to finance the acquisition, which significantly
affected our consolidated group leverage calculation. As a result
of the control by a financial sponsor and the increase in leverage,
we now think IMTT's financial risk is materially higher."
"We expect IMTT's cash flows to remain very stable going forward.
We project that S&P Global Ratings-adjusted EBITDA will remain in
the $260 million-$270 million per year in our forecast, with some
annual growth. This is driven by utilization that we expect to
remain around 91%-93% and rates that grow with inflation. The
contract profile is short-dated, but benefits from a fixed-fee
structure and firm commitments with investment-grade
counterparties."
"We expect capital expenditures (capex) to be somewhat elevated
over the next 18–24 months, but trend down toward maintenance
levels over time. The outlook for IMTT mirrors the outlook on its
parent, RS Ivy. The stable outlook on RS Ivy reflects our view that
the parent company will maintain consolidated leverage in the
6x–6.5x range over the next few years while gradually
deleveraging. We assume under our base case that IMTT will maintain
utilization in the low-90% area while expiring contracts are
renewed and extended at market prices."
"We could consider a negative rating action for both companies if
our S&P Global Ratings-adjusted consolidated leverage remained
above 6.5x in our forecast for an extended period. This could be
the result if utilization or market rates fell materially, if
demand for the company's services deteriorated such that contracts
were unable to be renewed, or if the sponsor increased leverage to
pay for distributions or growth capital without an offsetting
increase in operating cash flows."
"While unlikely at this time, we could consider a positive rating
action for both RS Ivy and IMTT if consolidated leverage declined
such that adjusted consolidated debt to EBITDA were sustained below
5x in our forecast. This would likely occur if the company
generated free cash flow and the financial sponsor prioritized debt
repayment before equity distributions and growth spending. Any
upgrade would be dependent on a view that the sponsor won't
releverage the company and cash flow stability won't materially
change."
JAGUAR HEALTH: Regains Compliance with Nasdaq's Bid Price Rule
--------------------------------------------------------------
Jaguar Health, Inc. received formal notice on Jan. 21, 2021, that
it has regained compliance with the bid price requirement, as
required by the decision of the Nasdaq Hearings Panel dated Oct.
28, 2020.
"We are very happy to learn that Jaguar has regained compliance
with Nasdaq," Lisa Conte, Jaguar's president and CEO, said. "We
believe our efforts since the second quarter of 2020 to implement
our expanded patient access programs for Mytesi (crofelemer) and
our focus on long-term investors and non-dilutive financings,
including our recent royalty-based capital infusion of $6.0
million, are improving our long-term financial prospects.
Additionally, with the initiation this past October by our wholly
owned subsidiary, Napo Pharmaceuticals, Inc., of the pivotal Phase
3 clinical trial of crofelemer for prophylaxis of diarrhea in adult
cancer patients receiving targeted therapy ("cancer therapy-related
diarrhea" (CTD)), and our recently announced plans to develop and
commercialize crofelemer for the possible indication of prophylaxis
and/or symptomatic relief of inflammatory diarrhea -- initially to
be studied in a 'long-hauler' COVID-19 recovery patient population
in Europe -- we believe the value generated in the Company will be
realized as we work to bring crofelemer and plant-based
prescription medicines to patients on need around the world."
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar reported a net loss of $38.54 million for the year ended
Dec. 31, 2019, compared to a net loss of $32.15 million for the
year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had
$36.23 million in total assets, $28.43 million in total
liabilities, and $7.81 million in total stockholders' equity.
Mayer Hoffman McCann P.C., in San Francisco, California, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated April 2, 2020 citing that the
Company has experienced losses since inception, significant cash
used in operations, and is dependent on future financing to meet
its obligations and fund its planned operations. These conditions
raise substantial doubt about its ability to continue as a going
concern.
JAGUAR HEALTH: Sells $6 Million Secured Note Streeterville Capital
------------------------------------------------------------------
Jaguar Health, Inc. has signed a definitive agreement related to
the previously announced term sheet for the issuance and sale of a
secured promissory note in the principal amount of $6.0 million to
Streeterville Capital, LLC. The sale of the Note closed on Jan.
19, 2021.
Per the terms of the Agreement, in addition to return of principal
and accrued interest at prime interest rate on the Note, the
Investor has a right to 18% of the gross proceeds from the sale of
a possible tropical disease priority review voucher that Jaguar's
wholly owned subsidiary, Napo Pharmaceuticals, Inc., plans to
pursue as incentive for the development of Napo's lechlemer drug
product candidate for the indication of the symptomatic relief of
diarrhea in cholera patients.
Jaguar has the right to redeem the Note at a 12.5% premium any time
after the six-month anniversary of the Agreement effective date and
before the release of data from a pivotal lechlemer trial for the
cholera-related indication. Once the Note is paid in full, the
Return Bonus will decrease to 1.0% in perpetuity.
"We at Jaguar and Napo find it very rewarding to work in the
pharmaceutical industry and be in a position to possibly help
address such an important global health need and meet stakeholder
expectations," stated Lisa Conte, Jaguar's founder, president, and
CEO. "The proposed indication for lechlemer represents a potential
opportunity for Jaguar to have a significant impact on mortality,
and we are thankful to the FDA for creating the priority review
voucher program in an effort to drive development of drugs to
benefit patients suffering from serious but often neglected
diseases."
"We plan to use funds generated by the Agreement to fund clinical
development of lechlemer for the planned cholera-related
indication. Moving this second-generation anti-secretory agent into
clinical development gives the Company 'another shot on goal' - and
we believe that lechlemer, which has the same mechanism of action
as crofelemer and is significantly less costly to produce, may
support development efforts to receive a TDPRV and provide
long-term pipeline management of the novel anti-secretory mechanism
of action of both crofelemer and lechlemer. Proof of concept trial
design was achieved with an anti-secretory mechanism of action
study in cholera patients at the renowned International Centre for
Diarrhoeal Disease Research (icddr,b) in Bangladesh."
Priority review vouchers are granted by the U.S. Food and Drug
Administration (FDA) as an incentive to develop treatments for
neglected diseases and rare diseases. The voucher entitles the
bearer to regulatory review by the FDA in approximately six months
rather than the standard ten months. The FDA awards a priority
review voucher following approval of a treatment for a neglected
disease, rare pediatric disease, or medical countermeasure.
Priority review vouchers are transferable and, in past transactions
by other companies, have sold for prices ranging from $67 million
to $350 million.
Cholera is an acute diarrheal illness caused by infection of the
intestine with the bacterium Vibrio cholerae. According to the
Centers for Disease Control and Prevention of the U.S. Department
of Health & Human Services, an estimated 3-5 million cholera cases
and more than 100,000 cholera-related deaths occur each year around
the world. The infection is often mild or without symptoms but can
sometimes be severe. Approximately one in 10 of infected persons
will have severe disease characterized by profuse watery diarrhea,
vomiting, and leg cramps. In these people, rapid loss of body
fluids leads to dehydration and shock. Without treatment, death
can occur within hours. The largest cholera outbreak in recorded
history recently occurred in Yemen. According to Oxfam, the number
of cholera cases in Yemen in 2019 was the second largest ever
recorded in a country in a single year, surpassed only by the
numbers in Yemen in 2017. According to the Brookings Institution,
cholera continues to spread in Yemen, with 180,000 new cases
reported in the first eight months of 2020.
As recently announced, Napo is receiving preclinical services
support from the National Institute of Allergy and Infectious
Diseases (NIAID) for a 28-day preclinical toxicology and safety
study in dogs that was initiated January 6, 2021 for lechlemer for
the proposed cholera-related indication. NIAID is part of the
National Institutes of Health. Under NIAID's suite of preclinical
services, NIAID-funded contractors are conducting the dog study. As
previously announced, a 28-day preclinical toxicology study in rats
to support lechlemer development for the symptomatic relief of
diarrhea from cholera was initiated in July of last year. Under
NIAID’s suite of preclinical services, NIAID-funded contractors
also conducted the initial 7-day dog and rat toxicology studies,
and completion of these shorter studies allowed for initiation of
the longer-term, 28-day, IND-enabling toxicity studies.
Lechlemer is a drug candidate under the botanical guidance of the
FDA. It is a standardized and proprietary Napo botanical extract
that is distinct from crofelemer, the active pharmaceutical agent
in Mytesi, the Company's FDA-approved drug product. Lechlemer is
sustainably derived from the same source as Mytesi: the Croton
lechleri tree.
Mytesi (crofelemer delayed release tablets), the only oral
plant-based prescription medicine approved under FDA Botanical
Guidance, is a novel, first-in-class anti-secretory agent which has
a basic normalizing effect locally on the gut, and this mechanism
of action has the potential to benefit multiple disorders. Mytesi
is a non-opiate chloride ion channel modulating antidiarrheal
medicine that is approved in the U.S. by the FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar reported a net loss of $38.54 million for the year ended
Dec. 31, 2019, compared to a net loss of $32.15 million for the
year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had
$36.23 million in total assets, $28.43 million in total
liabilities, and $7.81 million in total stockholders' equity.
Mayer Hoffman McCann P.C., in San Francisco, California, the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated April 2, 2020 citing that the
Company has experienced losses since inception, significant cash
used in operations, and is dependent on future financing to meet
its obligations and fund its planned operations. These conditions
raise substantial doubt about its ability to continue as a going
concern.
JAMES MICHAEL HAYS: Blomme & Brewer Buying Minden Property for $35K
-------------------------------------------------------------------
James Michael Hays and Polly Alvirda Hays ask the U.S. Bankruptcy
Court for the District of Nebraska to authorize the sale of the
property at 705 North Yates, in Minden, Kearney County, Nebraska,
legally described as The East 70' of that part of Block 27,
Railroad addition to Minden, Kearney County, Nebraska, lying South
of the Right-of-Way of the Burlington Northern Railroad, formerly
the CB & Q Railroad, to Kerry Blomme and Sherri L. Brewer for
$35,000.
The tax consequences of the sale are set forth in the letter from
Hellman, Main, Coslor & Kathol, P.C., Certified Public Accountants,
indicating that the tax results will be zero.
The Real Estate is subject to a security interest claimed by Minden
Exchange Bank and Trust Co., as Trustee, securing a deed of trust
recorded Oct. 17, 2003. The bank consents to the sale.
The Debtor proposes that after satisfaction of the secured
indebtedness owed to the bank, the net proceeds will be retained by
the Debtor to pay general operating expenses.
A copy of the Purchase Agreement is available at
https://bit.ly/3o538JU from PacerMonitor.com free of charge.
James Michael Hays and Polly Alvirda Hays sought Chapter 11
protection (Bankr. D. Neb. Case No. 20-40847) on June 19, 2020.
The Debtors tapped Galen Stehlik, Esq., as counsel.
JUAN L. LARINO: Hersh Horowitz Buying Newark Property for $476K
---------------------------------------------------------------
Juan Luis Larino asks the U.S. Bankruptcy Court for the District of
New Jersey to authorize the sale of the real property located at
41-43 Manufacturer's Place, in Newark, New Jersey, to Hersh
Horowitz for $476,250, free and clear of interests, claims liens
and encumbrances.
A hearing on the Motion is set for Feb. 16, 2021, at 11:00 a.m.
The Debtor and co-owner, Neil Gelardo, jointly own the Property.
The Property is located in the Ironbound section of Newark, New
Jersey. The 7,300 sq. ft. Property is a mixed used building with 2
residential apartments (3 bedrooms and 2 baths each), a warehouse,
and an office space with garage for 3 vehicles. The Property is
currently occupied by tenants.
Prior to the Petition Date, the Debtor and the co-owner were
attempting to sell the Property, but the Internal Revenue Service
filed liens in the amount of $935,626 against the Debtor, the
co-owner, and Property. Thus, the Debtor filed for bankruptcy with
the intention of selling the Property and using the funds to cure
the tax arrears owed to the IRS.
Subject to Court authorization, the Debtor has entered into a
contract for the sale of the Property to the Buyer for a purchase
price of $476,250. The sale of the Property was approved
previously on Aug. 25, 2020 but the sale was never consummated.
The Liens that may encumber the Property include: (i) any and all
unpaid property taxes; (ii) any and all unpaid municipal charges
for water and/or sewer; (iii) mortgage lien held by ConnectOne Bank
in the amount of $331,30 (Proof of Claim No. 2); (iv) federal tax
lien in favor of the IRS in the amount of $935,626 (Proof of Claim
No. 1); (v) judgment lien in favor of the State of New Jersey
Worker's Compensation Dept. in the amount of $155,160
(DJ-091451-2018); (vi) UCC-1 Financing Statements Filed by
ConnectOne Bank Instrument No. 13066433; Instrument No. 13066436;
and Instrument No. 26392820l and (vii) the joint ownership rights
of Neil Gelardo.
The pertinent terms of the Purchase Agreement are:
a. 41-41 Manufacturers Property:
i. Purchase Price. $476,250 - Deposit: $47,000 (due
upon execution of the contract for sale), Amount of Mortgage:
$357,188 (paid from conventional mortgage), Balance due at closing:
$72,073
ii. Purchaser. Hersh Horowitz
iii. Time and Place of Closing: TBD
iv. Inspection. The Sellers agree to permit purchaser
to inspect the property at any reasonable time prior to closing.
v. Ownership. The Sellers agree to transfer and the
purchaser agrees to accept ownership of the property free of all
claims and rights of others except: i) rights of utility companies;
and ii) recorded agreements which limit the use of the property.
vi. Type of deed. Bargain and Sale with covenants
against grantor's acts.
vii. Personal Property and Fixtures. All fixtures are
INCLUDED except for tenant's personal property.
viii. Physical Condition of the Property. The Property
is being sold "as is."
ix. Inspection of the Property. The Sellers agree to
permit the Purchaser to inspect the Property. All inspections will
be at the Purchaser's expense. If the inspections reveal any
serious defects and the parties do not agree on what corrective
actions or repairs are to be made by the Sellers, either party may
cancel the contract.
x. Flood Area. If the Property is in a “flood area”
the Purchaser may cancel the Purchase Agreement
xi. Cancellation of Purchase Agreement. If the
contract is legally and rightfully canceled, the Buyer can get back
the deposit and the parties will be free of liability to each
other.
xii. Risk of Loss. The Sellers are responsible for any
damage to the Property, except for normal wear and tear, until
closing.
xiii. Adjustments at Closing. The Purchaser and the
Sellers agree to adjust the following expenses as of the closing
date: rents, municipal water charges, sewer charges and taxes.
xiv. Sale is Subject to the following. All tenancies
present at the time of closing; restrictions and easements of
record
xv. Possession. At the closing Sellers will deliver
the entire premises in the condition present at the execution of
this contract, subject only to existing tenancies: (1) Warehouse:
Blue Carpentry, LLC, (2) Office: The Sellers to remain as tenant
occupying office space for a term of 3 years with 3 year option,
(3) Apt. 1: Karen Dacruz, (4) Apt. 2: Cristina Martins - The
Sellers agree to notify the tenant occupying the apartment # 2 of
Purchaser's intent to personally occupy said apartment in
accordance with all legal requirements.
b. Realtor's Commission. It is expressly understood and
agreed that each of the parties warrants to the other that the sale
was not brought about by any real estate broker or any other person
c. Oil Tank Representations: The Sellers represent that the
premises are heated by natural gas and have been so heated during
their term of ownership. The Sellers represent that to the best of
their knowledge there are no heating oil tanks on the Property and
that no oil tank was removed from the Property during the term of
ownership.
d. Seller Representations. The Sellers represent that the
premises are heated by natural gas and have been so heated during
their term of ownership. They further represent that to the best
of their knowledge there are no heating oil tanks on the premises
and that no oil tank was removed from the property during the
Sellers term of ownership.
e. Covenants. The Sellers will maintain the Property and the
personal property therein in substantially the same condition as
the "as is" condition thereof. They will not market any vacant
space at the Property for lease. They will not voluntarily further
encumber the Property between the date thereof and the closing.
f. Bankruptcy Notice of Sale. The Sellers have disclosed to
the Buyer that bankruptcy approval is required for the transaction.
Upon execution of the Agreement, the Sellers will ask that the
Trustee in the bankruptcy matter file a Notice of Proposed Sale
with respect to the transaction with the Court. The Sellers'
obligations under the Agreement are contingent upon either no
objections being filed to the Notice of Sale or an order from the
Bankruptcy Court approving such sale. If such contingency has not
been satisfied on or before 60 days from the Effective Date, the
Buyer may cancel the Agreement on written notice to the Sellers,
whereupon (i) the Buyer will be entitled to the return of the
Deposit, and (ii) except as otherwise expressly provided in the
Agreement, the Agreement and all the rights and obligations of the
respective parties under this Agreement will be null and void. The
Debtor's receipt of any portion of the Sellers' closing proceeds is
expressly conditioned on Court approval.
The co-owner has demonstrated, by his execution of the Purchase
Agreement, that he has consented to the proposed sale.
The Debtor asserts that given the goal by the parties in the case
to sell the Property and bring the case to conclusion in the short
term, there is cause to waive the stay and the Debtor asks that
upon approval of the sale, the 14-day period pursuant to Rule
6004(h) be waived by the Court.
A copy of the Contract is available at https://bit.ly/3a4nYo3 from
PacerMonitor.com free of charge.
The Purchaser:
Hersh Horowitz
1126 58th Street
Brooklyn, NY 11219
Juan Luis Larino sought Chapter 11 protection (Bankr. D. N.J. Case
No. 19-30898) on Nov. 4, 2019. The Debtor tapped David L. Stevens,
Esq., at Scura, Wigfield, Heyer & Stevens as counsel.
KEIV HOSPITALITY: Court Conditionally Approves Disclosure Statement
-------------------------------------------------------------------
Judge Jeffrey P. Norman has entered an order conditionally
approving the disclosure statement filed by Keiv Hospitality, LLC.
Feb. 22, 2021, is fixed as the last day for filing written
acceptances or rejections of the
Plan.
March 3, 2021, at 11:00 a.m. in Courtroom 403, United States
Courthouse, 515 Rusk Street, Houston, Texas is fixed for the
hearing on final approval of the disclosure statement and for the
hearing on confirmation of the Plan.
Feb. 22, 2021, is fixed as the last day for filing and serving
written objections to the disclosure statement and confirmation of
the Plan.
About Keivans Hospitality
and Keiv Hospitality
Based in Katy, Texas, Keivans Hospitality, LLC, is a Texas limited
liability company formed on April 4, 2013 for the purpose of
developing, owning and operating a Hilton Garden Inn hotel located
at 2509 Texmati Drive, Katy, Harris County, Texas. It operates
under a franchise agreement with Hilton Worldwide and has 101 guest
rooms, 1663 square feet of meeting space and a 50 person capacity
restaurant. Keivans is owned by Ben Mousavi (100%).
Keiv Hospitality, LLC, is a Texas limited liability company formed
on April 4, 2013 for the purpose of developing, owning and
operating a Hampton Inn and Suites hotel located at 22055 Katy
Freeway, Katy, Harris County, Texas. It operates under a franchise
agreement with Hilton Worldwide and has 69 guest rooms and 1100
square feet of meeting space. Keiv is owned by Ben Mousavi (50%),
Riba Mousavi (25%), Kevin Mousavi (24%) and Mousavi Hospitality,
Inc. (1%).
Keiv Hospitality and Keivans Hospitality sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-34408) on Sept. 1, 2020. Ben Mousavi, owner, signed the
petitions.
At the time of the filing, Keiv Hospitality estimated assets of
between $1 million and $10 million and liabilities of the same
range while Keivans Hospitality estimated assets of between $10
million and $50 million and liabilities of between $1 million and
$10 million.
Judge Jeffrey P. Norman oversees the cases.
Okin Adams LLP is the Debtors' legal counsel.
KINSER GROUP: Objections Resolved; Court Confirms Plan
------------------------------------------------------
Judge Daniel P. Collins has entered an order that the Plan of
Kinser Group LLC and each of its provisions announced on the record
at the confirmation hearing, are approved and confirmed.
Only two objections were filed in connection with the Plan: (i)
objection to the Plan filed by First Financial Bank and (ii) the
limited objection filed by Holiday Hospitality Franchising, LLC
("HHF"). No other creditor or party-in-interest filed any
objection to the Plan.
The Debtor, FFB, and HHF have resolved their respective plan
objections, with such resolutions to be incorporated into the Plan
Confirmation Order.
According to the Plan Confirmation, the General Unsecured Claim of
Kinser Group II, LLC, is waived, and Kinser II will not share in
any of the Creditor Fund Payments from the Debtor to the holders of
Class 5 Claims.
Section 7.1 of the Plan is modified and amended to add the
following language to the end of Section 7.1:
* The Debtor further acknowledges and agrees that the Debtor
must comply in all respects with the Holiday Inn Franchise
Agreement, including but not limited to all rules and regulations
concerning property improvement plans that are currently in effect
or may come into effect in accordance with the terms of the Holiday
Inn Franchise Agreement.
FFB has made the election under 11 U.S.C. Sec. 1111(b)(2) to have
its secured claim and unsecured claim treated as secured under
Section 4.3.2 of the Plan. In accordance with the agreement
between the Debtor and the FFB, Section 4.3.2 of the Plan is
amended and replaced in its entirety to read as follows:
* 4.3.2 Option 2: First Financial Bank Secured Claim. FFB has
made the Section 1111(b)(2) Election (see Docket No. 162). The
Total FFB Claim shall be Allowed in the amount of $7,503,234.28.
The Total FFB Claim will continue to be evidenced by the FFB Loan
Documents, but will be deemed modified and amended by the terms of
this Plan and the Confirmation Order. The value of FFB's Collateral
will be set at $5,948,000.00, which includes all cash on hand as of
the Confirmation Date.
Notwithstanding any provision of the Plan to the contrary, FFB's
General Unsecured Claim for any unforgiven portion (if any) of the
Debtor's Paycheck Protection Program loan listed at Claim 3.47 in
the Debtor's Schedule E/F will be Allowed, and the FFB PPP Claim
will be reduced or eliminated dollar-for-dollar equal to the amount
of the PPP loan that is forgiven.
Based on the agreement with FFB and the Debtor's Ballot Report, the
Plan, as modified by this Order, has been accepted by all impaired
Classes except Class 5, which did not vote to accept or reject the
Plan.
As set forth below, the Plan has been accepted by each Class of
impaired Claims that was entitled to vote on the Plan, except Class
5, without including any acceptance of the Plan by any insider
because:
(i) Claims in Class 1 are not impaired. Therefore, the
Administrative Claims are deemed to accept the Plan pursuant to 11
U.S.C. Sec. 1126(f).
(ii) Claims in Class 2 are not impaired. Therefore, the Priority
Claims are deemed to accept the Plan pursuant to 11 U.S.C. Sec.
1126(f).
(iii) Claims in Class 3 are impaired and agreed to vote in favor of
the Plan as amended by the Confirmation Order, and have consented
to the entry of the Confirmation Order.
(iv) Claims in Class 4 are impaired and voted to accept the Plan.
(v) Claims in Class 5 are impaired, and no holder of a Class 5
Claim voted on the Plan.
(vi) Interests in Class 6 are not impaired. Therefore, the Class
6 Interest Holders are deemed to accept the Plan pursuant to 11
U.S.C. Sec. 1126(f).
A copy of the Plan Confirmation Order is available at
https://bit.ly/3pjSujV
Attorneys for the Debtor:
Isaac M. Gabriel, Esq.
QUARLES & BRADY LLP
Renaissance One
Two North Central Avenue
Phoenix, AZ 85004-2391
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.
KNOWLTON DEVELOPMENT: S&P Affirms 'B-' Issuer Credit Rating
-----------------------------------------------------------
S&P Global Ratings revised its outlook on Longueil Que.-based
Knowlton Development Holdco Inc. (KDC) to negative from stable, and
affirmed its 'B-' issuer credit rating on the company.
S&P also affirmed its 'B-' issue-level rating, with a '3' recovery
rating, on the company's EUR100 million add-on term loan. The '3'
recovery rating indicates S&P's expectation for meaningful
(50%-70%; rounded estimate: 50%) recovery in default.
The negative outlook reflects S&P's view that the risks associated
with KDC's higher leverage, combined with potential execution
missteps or underperformance, could limit the company's ability to
deleverage over the next 12 months.
S&P said, "We expect fiscal 2021 credit measures will weaken
significantly following the shareholder distribution transaction.
We forecast the proposed transaction will increase KDC's total debt
by more than US$200 million compared with S&P Global Ratings'
adjusted debt as of Oct. 31, 2020. Pro forma the transaction, based
on an LTM ended Oct. 31, 2020 EBITDA, on an S&P Global Ratings'
adjusted basis, debt to EBITDA (based on LTM ended Oct. 31, 2020)
is elevated at 9.7x. We expect debt to EBITDA for fiscal year-end
2021 will remain close to 8.5x-9.0x, which is a meaningful
deterioration compared with our previous expectation of 7.0x-7.5x
for fiscal 2021 and above our downside threshold. The outlook
revision reflects our unfavorable view of the sponsor's aggressive
financial policy where it is pursuing debt-funded dividends as the
company embarks on significant growth plans. We note that KDC has
significantly increased its balance sheet debt since 2018 to fund
acquisitions. The company's balance-sheet debt as of Oct. 31, 2020,
was about US$1.4 billion, which is a sizable increase from US$525
million in 2018. We also note that investors have retained
meaningful amount of equity in the business."
"We believe that, given the company's relative EBITDA to heavy debt
level (on an S&P Global Ratings' adjusted basis) of about US$1.9
billion pro forma the transaction, it could very quickly lead to an
unsustainable capital structure should the business underperform."
Capacity expansion plans introduce execution risks. KDC plans to
invest significantly over 18 months (October 2020-April 2022) in
capacity expansion projects to meet the elevated demand for hand
soaps, creams, sanitizers, and new product lines for its key
customers. The company projects additional expansion capacity
should start coming online in August 2021 and could generate
additional revenues through fiscal 2023 (ending April).
S&P said, "We expect that the incremental revenue and EBITDA should
lead to modest improvement in credit measure in fiscal 2022 such
that leverage improves to the mid-7x area. That said, in our
opinion, an aggressive expansion strategy, introduces execution
risks in the form of unexpected cost overruns or
lower-than-anticipated volumes or demand, which could weigh on the
company's operating performance and credit measures."
"We expect KDC to maintain adequate liquidity. Owing to heavy
capital expenditures (capex) over the next 18 months, we estimate
negligible free cash flows in fiscal 2021 and forecast free cash
flow deficits on an S&P Global Ratings' adjusted basis of US$65
million-US$70 million in fiscal 2022. We believe KDC plans to
fortify its liquidity position by expanding its revolver facility
to US$345 million from the current US$170 million, which should
sufficiently address any cash shortfall we forecast in the near
term. Despite the company's heavy debt burden, KDC is exhibiting
modest supplemental ratios--we forecast EBITDA interest coverage to
remain modest in the 2.5x-3.0x range. We also expect KDC to
maintain its fixed-charge coverage ratio (comprising interest,
maintenance capex, and debt amortization) in the mid-1x area."
"The negative outlook reflects our view that the risks associated
with KDC's higher leverage combined with potential execution
missteps, or underperformance, either due to loss of contracts or
lower volumes, could limit the company's ability to deleverage over
the next 12 months."
"We could lower the ratings if KDC fails to demonstrate its ability
to lower debt to EBITDA below 8x through fiscal 2022 because of
weaker operating performance, integration challenges, execution
risks surrounding capex plans, or if the financial sponsor follows
policies that continue to pressure the company's balance sheet. We
could also take a negative action if KDC's liquidity position
deteriorated, reflecting weakening free cash flow and if
fixed-charge coverage declines from current levels."
"We could revise the outlook to stable if KDC demonstrates a
deleveraging path such that the leverage ratio returns to and is
sustained in the 7.0x-7.5x range."
LBM ACQUISITION: Moody's Lowers CFR to B3, Outlook Stable
---------------------------------------------------------
Moody's Investors Service downgraded LBM Acquisition, LLC's (dba US
LBM) Corporate Family Rating to B3 from B2 and the Probability of
Default Rating to B3-PD from B2-PD. Moody's also affirmed the B2
ratings on the company's senior secured term loans and downgraded
the rating on the senior unsecured notes due 2029 to Caa2 from
Caa1. The outlook is stable.
In a related rating action Moody's assigned a Caa2 rating to BCPE
Ulysses Intermediate, Inc.'s (BCPE) proposed $400 million senior
unsecured PIK toggle notes due 2027. BCPE is LBM Acquisition's
indirect parent holding company. Proceeds from the proposed note
issuance will be used to fund a dividend to shareholders. BCPE's
outlook is stable.
"Bain Capital's aggressive financial strategy, evidenced by a
return of equity through an increase in leverage so soon after
acquiring US LBM, and the resulting deterioration in key credit
metrics warrants the rating downgrade," according to Peter Doyle, a
Moody's VP-Senior Analyst.
The downgrade of US LBM's CFR to B3 from B2 follows the extremely
aggressive financial strategy being pursued by Bain Capital Private
Equity, LP (Bain), the owner of US LBM. US LBM is paying a debt
financed dividend to Bain, less than two months after acquiring US
LBM in a leveraged buyout. The proposed dividend of about $394
million represents approximately 35% of Bain's original equity
investment, several years of future free cash flow and slightly in
excess of one year of adjusted EBITDA. Additionally, the proposed
notes will come due prior to the company's senior secured term
loans and other unsecured debt, creating refinancing risks for
existing debt holders.
Additionally, US LBM has commitments ($300 million delayed draw
term loan) to pursue debt financed acquisitions, which Moody's
believes will not improve leverage meaningfully. The high cash
interest payments and term loan amortization, which will approach
$170 million per year, will stress cash flows and make voluntary
debt reduction very difficult to achieve.
The Caa2 rating assigned to the proposed senior unsecured PIK
toggle notes due 2027, two notches below the Corporate Family
Rating, results from their subordination to LBM Acquisition, LLC's
considerable amount of secured debt, which approaches $2.2
billion.
The following ratings are affected by today's action:
Downgrades:
Issuer: LBM Acquisition, LLC
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Senior Unsecured Global Notes, Downgraded to Caa2 (LGD5) from Caa1
(LGD6)
Affirmations:
Issuer: LBM Acquisition, LLC
Senior Secured 1st Lien Term Loan, Affirmed B2 (LGD3)
Senior Secured Delayed Draw Term Loan, Affirmed B2 (LGD3)
Assignments:
Issuer: BCPE Ulysses Intermediate, Inc.
Senior Unsecured PIK Global Notes, Assigned Caa2 (LGD6)
Outlook Actions:
Issuer: BCPE Ulysses Intermediate, Inc.
Outlook, Assigned Stable
Outlook Actions:
Issuer: LBM Acquisition, LLC
Outlook, Remains Stable
RATINGS RATIONALE
US LBM's B3 CFR reflects Moody's expectation that the company will
remain highly leveraged. Moody's projects pro forma adjusted
debt-to-LTM EBITDA will deteriorate to about 6.8x at year end 2021,
a considerable increase from our previous forecast of 5.8x. Moody's
forecasts adjusted free cash flow-to-debt will be only modestly
positive in 2021 due to high cash interest payments. Moody's
expects that US LBM will dividend cash to BCPE in order to fund the
cash payment of the notes at the parent holding company. At the
same time US LBM may face challenges integrating recent
acquisitions, future bolt on acquisitions, and strong competition.
Providing an offset to US LBM's leveraged capital structure is good
profitability. Moody's forecasts adjusted EBITDA margin in the
range of 7.5% - 10% for 2021, which is the company's greatest
credit strength. Profitability will benefit from higher volumes
from growth in end markets and the resulting operating leverage
from that growth. Moody's projects revenue will approach $4.4
billion for 2021. Moody's also calculates interest coverage,
measured as EBITA-to-interest expense, will be around 1.7x for
2021. Substantial revolver availability and no near-term maturities
support US LBM's credit profile.
The domestic construction end markets, the driver of US LBM's
revenue, are showing resiliency during the coronavirus outbreak and
resulting economic concerns. New home construction accounts for
about two thirds of US LBM's revenue. Moody's has a positive
outlook for the US Homebuilding sector. Repair and remodeling
activity, representing approximately 20% of revenue, is also
exhibiting strong growth. As a national distributor with diverse
product offerings, US LBM should benefit from high levels of
spending in these end markets.
The stable outlook reflects Moody's expectation that US LBM's
interest coverage will remain above 1.0x. Substantial revolver
availability and Moody's expectation that US LBM will successfully
integrate future acquisitions without impacting operations further
supports the stable outlook.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade:
- EBITA-to-interest expense is sustained above 2.0x
- Debt-to-LTM EBITDA is maintained below 6.0x
- The company's liquidity improves enhanced by strong free cash
flow
Factors that could lead to a downgrade:
- EBITA-to-interest expense is sustained near 1.0x
- Debt-to-LTM EBITDA does not improve from the high of 6.8x on a
pro forma basis
- The company's liquidity profile deteriorates
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
LBM Acquisition, LLC, headquartered in Buffalo Grove, Illinois, is
a North American distributor of building materials. Bain Capital
Private Equity, LP, through its affiliates, is the owner of US LBM.
LBM ACQUISITION: S&P Alters Outlook to Negative, Affirms 'B' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based building
materials and products distributor LBM Acquisition LLC to negative
from stable. At the same time, S&P affirmed all its existing
ratings on LBM, including the 'B' issuer credit rating.
Also, S&P assigned its 'CCC+' issue-level rating to the proposed
$400 million HoldCo PIK Toggle notes due 2027. The proposed notes
will be subordinated to all the existing secured debt facilities
and the senior unsecured notes.
S&P said, "The negative outlook reflects our view that the
increased debt burden will result in elevated leverage levels and
depleted cushion, in case demand conditions deteriorate."
LBM Acquisition LLC's holding company intends to issue $400 million
pay-in-kind (PIK) Toggle notes due 2027 to fund a dividend
distribution to its sponsors.
The dividend recapitalization delays any potential deleveraging,
pushing adjusted leverage to the higher end of the 6x-7x range for
the next few quarters. S&P believes the $400 million HoldCo PIK
Toggle notes due 2027, which will finance a dividend payment to the
sponsors, indicate the company's aggressive financial policies.
Absent this debt-funded dividend payment, adjusted leverage would
have improved to under 6x. However, now the incremental debt
offsets the deleveraging from earnings' growth and results in
adjusted leverage sustained between 6x and 7x for the next 12
months.
S&P said, "We expect the company's performance through 2020 and at
least during the first half of 2021 to benefit from tailwinds in
the residential construction and repair and remodeling end markets.
Coupled with incremental earnings from bolt-on acquisitions
completed in 2020, we believe the company's revenue and EBITDA
levels will continue to expand this year."
"Our negative outlook on LBM indicates our view that the increased
debt burden will result in adjusted leverage sustained at the
higher end of the 6x-7x range over the next 12 months. We view
these levels to be high and have minimal cushion if demand
conditions turn unfavorable."
S&P could lower the ratings over the next 12 months if:
-- Lower-than-expected earnings resulted in adjusted leverage
deteriorating to above 7x or EBITDA interest coverage falling below
2x. Such a scenario could materialize in case of a severe downturn,
causing a decline in end-market demand or higher-than-expected cost
inflation that cannot be passed on as price increases, cause margin
compression.
-- The company maintained an aggressive financial policy, such as
pursuing large debt-funded acquisitions or shareholder dividends,
causing adjusted leverage to rise above 7x, on a sustained basis.
S&P could revise the outlook back to stable, over the next 12
months, if earnings improved such that adjusted leverage were
sustained in the 5x-6x range. This could occur if the company
integrated acquisitions without disrupting earnings or cash flow
and residential construction and repair and remodeling activities
grew faster than expected in 2021.
LECLAIRRYAN PLLC: UnitedLex Fights Back Against Its Claims
----------------------------------------------------------
Michael Schwartz of Richmond BizSense reports that the battle over
potentially millions of dollars for the bankruptcy estate of
collapsed Richmond law firm LeClairRyan continues to play out.
Legal services giant UnitedLex, which formed a controversial joint
venture with LeClairRyan leading up to its dissolution, wants the
bulk of the claims filed against it last fall of 2020 by the law
firm's bankruptcy trustee to be dismissed, or at the very least
transferred to a different court where it could have a chance to
argue its case in front of a jury.
UnitedLex, as well as the ULX Partners joint venture entity, was
accused last fall by trustee Lynn Tavenner of keeping the law firm
alive longer than it should have in order to "improperly and
unfairly extract millions of dollars from the estate, to the
detriment of LeClairRyan's creditors."
But in filings submitted to the bankruptcy court earlier this
month, UnitedLex and ULX argue that Tavenner's case presents "a
misguided narrative" as it relates to the relationship between LCR
and ULX, the nature of the joint venture and how much control the
two wielded over a weakened LCR.
"Although a court must accept well pled factual allegations as true
when considering a motion to dismiss, the court is not required to
engage in the willing suspension of disbelief when doing so," the
defendants argued in their Jan. 11, 2021 pleadings. "Yet the story
pushed by the trustee in the complaint asks that one uncritically
accept the premise that prolonging the life of a struggling
business is wrong and inherently harmful to creditors."
Instead, they claim the ULX venture was what it was billed to be at
the time of its creation: an attempt to create a new business model
for law firms by farming out their back office — and thereby
hopefully helping LCR stay afloat and potentially profit from its
share of the business.
UnitedLex and ULX are asking bankruptcy Judge Kevin Huennekens to
dismiss 10 of the 14 claims against them and to allow the others to
be heard in a district court, rather than in bankruptcy court.
Tavenner claims ULX and UnitedLex pocketed $19 million worth of
avoidable, fraudulent transfers, the bulk of which came in the
final year of LCR's operations.
She's seeking to recoup that money, plus $42 million from the
defendants for allegedly aiding and abetting a breach of fiduciary
duty. State law allows for those damages to be tripled, to the tune
of $128 million.
The suit also seeks to cancel out the $8 million debt ULX claims it
is owed by re-characterizing it as equity. That figure makes ULX
the firm's largest creditor, according to filings made early on in
the bankruptcy case.
The 14 counts included various types of fraud and conspiracy, as
well as unjust enrichment and alter ego liability.
The defendants, in addition to trying to poke holes in Tavenner's
narrative and arguing for dismissal of the bulk of the claims,
argue that any remaining claims relate more to state law than
federal bankruptcy law, and would be best litigated in front of a
jury.
"The defendants have a constitutional right to a jury trial for
many of these claims, and the bankruptcy court cannot conduct a
jury trial on such claims without the defendants' consent. The
defendants have not given, and at this time do not intend to give,
such consent."
ULX and UnitedLex are represented by attorneys David Barger, Thomas
McKee and Gregory Milmo of Greenberg Traurig.
Tavenner has enlisted special counsel from Foley & Lardner, a major
law firm based in Milwaukee, to investigate potential litigation
related to LCR's downfall.
Tavenner and her team also continue to pursue funds for the estate
from some former LCR shareholders and executives. Demand letters
have gone out to some, which could lead to further litigation.
About LeClairRyan PLLC
Founded in 1988, LeClairRyan PLLC is a national law firm with 385
attorneys, including 160 shareholders, at its peak. The firm
represented thousands of clients, including individuals and local,
regional and global businesses.
Following massive defections by its attorneys LeClairRyan, members
of the firm in July 2019 voted to effect a wind-down of the
Debtor's operations.
LeClairRyan PLLC sought Chapter 11 protection (Bankr. E.D. Va. Case
No. 19-bk-34574) on Sept. 3, 2019, to effect the wind down of its
affairs.
In its Chapter 11 petition, the firm listed a range of 200-999
creditors owed between $10 million and $50 million. The firm
claims assets of $10 million to $50 million.
The Hon. Kevin R Huennekens is the case judge.
Richmond attorneys Tyler Brown and Jason Harbour of Hunton Andrews
Kurth are representing LeClairRyan in the case. Protiviti is its
financial adviser for the liquidation.
LEGENDS HOSPITALITY: Fitch Affirms Final 'B-' LongTerm IDR
----------------------------------------------------------
Fitch Ratings assigned a final Long-Term Issuer Default Rating
(IDR) of 'B-' to Legends Hospitality Holding Company, LLC following
the completion of its refinancing transactions. Fitch also assigned
a final rating of 'BB-'/'RR1' to Legends' $150 million
super-priority revolver and a 'B'/'RR3' rating to its $400 million
senior secured notes, which are co-borrowed by Legends Hospitality
Co-Issuer, Inc. The Outlook is Stable.
While the upsize to the secured notes offering from $350 million
increases Fitch's expectation for secured leverage in 2022 by
around 0.6x, the impact on total leverage is 0.3x given that
Legends now expects to issue $100 million of unsecured
payment-in-kind (PIK) loan to the sponsor relative to $125 million
expected prior, with the rest of the upsize proceeds to be held as
cash on hand.
Fitch's ratings reflect the expectation of continued near-term cash
burn; the high uncertainty about the pace at which the live event
industry will recover, particularly given Legends' geographical
exposure to large metro areas like New York and to the
tourist-focused attractions business; and the implications the
coronavirus pandemic may have for future venue rebuilds and
remodels.
Legends has faced severe disruption to its operations due to the
pandemic. Venue capacity restrictions and event cancelations have
resulted in significant FCF burn, which required the company to
seek a liquidity infusion. The company issued a $250 million junior
note in November, prior to the proposal by Sixth Street to take a
majority equity stake in Legends. While Fitch expects FCF to remain
negative through 2022, liquidity will be sufficient to manage
through the crisis, and Fitch forecasts the company's leverage to
return to the low-6x range by 2022, with potential for further
deleveraging. However, a slower than expected ramp-up in the
business that leads to a higher than expected cash burn would be
negative for the ratings.
Legends is a premium services company serving clients in the
sports, entertainment and attractions industries. The ratings
consider the company's strong earnings and cash flow prospects over
the medium term, given long-term client contracts. Its depth of
expertise in its various segments with a full suite of
complementary offerings from project management, attractions
operations including development and management of properties,
hospitality sales and venue sales make Legends an attractive
partner to potential clients looking to provide upscale offerings
to their customers and provides Legends an ability to upsell its
offerings and capture a higher share of clients' wallets over the
medium term.
KEY RATING DRIVERS
New Equity Stake and Capital Structure: Fitch's ratings reflect the
company's recent refinancing of its prior capital structure, which
included its $235 million revolving credit facility, $81 million
term loan and $254 million in junior notes. While the transaction
added about $145 million of funded debt to the company's balance
sheet, it improved the company's liquidity to over $236 million,
estimated as of Dec. 31, 2020, while extending its earliest funded
maturity to January 2026. This will give the company's operations
time to recover from the adverse impact of the pandemic.
The refinancing transaction was executed concurrently with a
proposed new equity investment by Sixth Street, which will hold a
majority stake in the company with the remaining equity interests
in the issuer held by YGE Legends Holdings, LLC (YGE SubCo; an
affiliate of the New York Yankees organization), Jones Concessions,
LP (an affiliate of the Dallas Cowboys organization) and other
minority equity holders.
Major Disruption from Covid-19: The onset of the pandemic coincided
with the beginning of the Major League Baseball season as well as
the start of peak entertainment months for live performances, which
resulted in restrictions or prohibitions on fan attendance and, in
many cases, event cancelations. While attendance has increased in
recent months due to the kick-off of the National Football League
season in September, Fitch's rating case assumes attendance will
remain below 25% of capacity through the first half of 2021, as
municipalities remain vigilant in containing the virus while
vaccines are distributed. Legends' meaningful exposure to major
metropolitan areas in New York and California, where containment
measures like lockdowns and occupancy restrictions have been more
aggressive, will be a drag on recovery as the economies in these
areas could take longer than anticipated to rebound, affecting the
tourist-driven attractions business.
Legends benefits from some minimum contracted revenue from
management fees and other annuity streams, but the bulk of revenue
is tied to the attendance of live events. As a result, EBITDA since
the pandemic began has been negative, with interest expense and
capex adding to the cash burn. In November 2020, Legends raised
$250 million of junior notes given close to full draw on its
revolver. Negative EBITDA could continue until attendance returns
to 50%-75% of capacity, a level Fitch does not expect to be reached
until late in 2021.
While FCF is expected to remain negative through 2022, Fitch
believes the company's liquidity position is sufficient to carry
the company through 2023 when FCF is expected to return to slightly
positive, though there remains significant uncertainty as to the
pace of the industry's recovery.
Attractive Industry, Model Over Long-Term: The company's services
include hospitality sales, including on-site food and beverage
services (approximately 53% of 2019 EBITDA pre-overhead);
consulting and agency businesses (27%); attractions operations,
including development and management of properties (15%);
merchandise distribution and sales (4%); and other solutions,
including technology ranging from web services to major tech
installations for stadiums and arenas (less than 1%). The
consulting and agency businesses include consulting and project
management relating to venue remodel and construction; venue sales
including season tickets, boxes, events and tours; and partnership
sales including venue sponsorships and naming rights.
While attendance at live events is down due to capacity
restrictions and customer concerns about the pandemic, Fitch
expects that over the medium term, the shift in consumer spending
from products to experiences is likely to resume and provide a
tailwind for Legends. Demand for sports content, including live
consumption of games and matches, has historically been robust,
even during challenging economic and social periods such as the
global financial crisis of 2008-2009 and the aftermath of Sept. 11,
2001. While the current health crisis has stark differences to
those periods, Fitch continues to believe the medium- to long-term
demand for sports content will be robust.
In addition to strong industry dynamics pre-pandemic, Legends'
business model benefits from other favorable characteristics,
including long-duration contracts that provide high medium-term
revenue visibility (Legends estimates the profit-weighted average
remaining contract term to be in excess of 15 years); high quality
customers (sports franchise owners tend to be individuals and
consortiums of very high net worth); and captive audiences within
the venues it services.
Experienced Operator with Strong Competitive Position: From its
founding in 2008 as a partnership between Jones Co. and YGE SubCo
to provide premium hospitality services in their affiliated new
stadiums, Legends has grown to a full-service consulting and
operations company for the sports, entertainment and attractions
industry. Legends' unique position as the only fully integrated
provider of services makes it an attractive partner to potential
clients seeking upscale offerings to their customers while
providing the company the inside track on further revenue
opportunities that arise throughout their clients' property
lifecycle.
Legends' reputation as a provider of premium services and its track
record of improving growth in customer spend has enabled the
company to win key contracts in many high profile projects, such as
providing its full suite of services for the estimated $5 billion
development of the SoFi Stadium in Los Angeles, the new home to the
NFL's Los Angeles Rams and Los Angeles Chargers, as well as a
comprehensive partnership with premier European soccer club, Real
Madrid, to manage the team's omnichannel retail operations. Fitch
believes the company's association with the Cowboys and Yankees
organizations, premier franchises in their respective leagues, is
an asset that can be emphasized when the company seeks new
business.
While Legends competes with several larger, better-capitalized
companies in its core hospitality segment, including Aramark,
Compass Group and Sodexo, it often leads in its other segments,
including the planning segment where the company is the premier
provider of feasibility studies in the U.S. and Europe, and its
partnerships segment where the company has delivered over $2.6
billion in naming rights and founding partnerships, including the
new Allegiant Stadium, the new home of the NFL's Las Vegas Raiders,
and was recently chosen as the sponsorship sales agent for the 2028
Los Angeles Olympics and Team USA.
Runway for Growth: Fitch believes the company has ample
opportunities for growth despite the limited inventory of stadiums
and arenas that are the source of the bulk of the company's
revenues. Of the company's over 200 clients at the end of 2019,
under 21% utilized more than one of Legends' services, providing
meaningful opportunity to expand within its existing client base.
Attractions is a profitable though underserved market for the
company, with just eight attractions globally contributing 11% of
revenue and 15% of EBITDA pre-overhead in 2019. Meanwhile, less
than 1% of Legends' 2019 revenue was derived from international
operations. Legends estimates its total addressable market at over
$10 billion in the U.S. and over $30 billion globally, with the
U.S. market expected to grow in the low-to-mid single digits
annually (excluding Covid-19 impacts).
Legends has significant new contracts wins, including a contract
with SoFi Stadium, which opened in fall 2020, a contract to manage
the observation deck at Chicago's Aon Center, and a contract to
manage several new high-tech video attractions around the U.S.
called Illuminarium.
Disciplined Management with Strong Track Record: Under the current
management team put in place in 2013, annual net operating revenue
growth accelerated to 26% in 2014-2019, with EBITDA growing at an
over 30% CAGR, to Fitch-adjusted EBITDA of around $75 million.
There were a couple of small, strategic acquisitions during this
period, but growth was largely achieved organically by expanding
the company's suite of services, increasing its client base and
capturing a greater share of its customers' spending. The company
has diversified from primarily food and beverage services, which
accounted for most of its EBITDA in 2013, into other areas, with
each segment having favorable growth prospects.
In recent years, Legends maintained a fairly conservative balance
sheet with leverage, measured by total debt/EBITDA, in 2018 and
2019 averaging around 2.6x. As the impact of the pandemic
dissipates, Fitch forecasts the company's leverage could return to
the low-6x range by 2022, with potential for further deleveraging.
DERIVATION SUMMARY
Legends' 'B-' ratings reflects the severe disruption Covid-19 has
had on the company's business, including venue closures and
capacity restrictions and the tremendous amount of uncertainty as
to the pace at which the live event industry will recover. While
FCF is expected to remain negative through 2022, Fitch expects
Legends' liquidity to be sufficient to manage through the crisis,
and Fitch forecasts the company's leverage could return to the
low-6x range by 2022, with potential for further deleveraging.
However, a slower than expected ramp up in the business that leads
to a higher than expected cash burn would be a ratings concern. The
ratings also reflect Legends' strong earnings and cash flow
prospects over the medium term, given long-term client contracts in
the sports, entertainment and attractions industries.
Other rated consumer peers in the 'B-' space include Sizzling
Platter, LLC (B-/Stable), a leading franchisee of the Little
Caesars and Wingstop quick-serve chains, and a franchisee of
Dunkin', Red Robin and Sizzler. Sizzling Platter's rating reflects
the company's limited scale, high adjusted leverage, acquisitive
growth strategy and its reliance on Little Caesars for over 75% of
its cash flow. Despite the severe disruption caused by the pandemic
across the restaurant industry, Fitch expects the quick return to
positive same-restaurant sales in the company's core U.S.
quick-serve chains, with only a modest EBITDA decline in 2020, and
leverage to return to below 7x by 2022.
Legends' rating is higher than Wok Holdings, Inc. (CCC+), operator
of the P.F. Chang's (PFC) chain of casual dining restaurants. PFC's
rating reflects the company's good niche positioning and leading
market position in the full-service Asian category, as well as its
high financial leverage, smaller scale and margin relative to other
large casual chain dining concepts, as well as secular challenges
within the casual dining segment that were exacerbated by the
coronavirus pandemic. Fitch expects leverage to remain elevated
near 8x in 2021, raising concerns about the sustainability of the
company's capital structure.
Sysco Corporation's (BBB/Negative) rating reflects the company's
large scale, good market position and diverse customer base with
broad geographical distribution of an extensive line of food and
nonfood items, including Sysco-branded products, with an estimated
16% share of the U.S. food service market. Sysco is substantially
larger than its main competitors, US Foods Holding Corp. and
Performance Food Group Company, with annual sales of $60 billion in
fiscal 2019 (ended June 30, 2019) with its scale, stronger product
mix and higher route density enabling higher margins. Sysco's
leverage pre-pandemic was in the 2x range, though Fitch expects
leverage to spike to over 10x in fiscal 2021 and trend towards the
low-3x range by fiscal 2022.
KEY ASSUMPTIONS
-- Fitch assumes attendance at live events returns slowly through
2021, largely driven by continued capacity restrictions with
attendance estimated at 10%-20% of capacity in the first half
of the year, improving to around 50% in the second half of the
year. This will result in Legends' 2021 revenue falling by
around 25% from 2019 levels of around $870 million after
factoring in new business wins. Fitch assumes 2022 attendance
will be in the mid-single digits, down from 2019 levels,
though the roll on of new contracts led by the SoFi Stadium
will result in Legends' revenue rising nearly 20% relative to
2019.
-- Gross margins, which had trended in the low 80% prior to the
pandemic, will dip below 70% in 2020 due to lower volumes
before returning to around 80% in 2022, as volumes return to
near pre-pandemic levels. Fitch expects an EBITDA margin of
around 8.0% in 2022, and pre-pandemic levels of 8.7% in 2023,
as volumes fully recover and the company benefits from fixed
cost leveraging from new business wins.
-- After turning sharply negative in 2020, EBITDA returns to
modestly positive in 2021, reaching $85 million in 2021
(relative to Fitch-calculated 2019 EBITDA of $75 million) and
could cross $100 million by 2023.
-- Fitch forecasts negative FCF to continue through 2022 given
the expected revenue and margin trajectory and as the company
continues to invest in growth projects. FCF returns to neutral
in 2023 as volumes fully recover and the company gets the cash
flow benefit of currently contracted new business wins.
-- Leverage recovers to the low-6x range in 2022 due to the
rebound in EBITDA and stable debt levels.
RATING SENSITIVITIES
Factor that could, individually or collectively, lead to positive
rating action/upgrade:
-- Sustained top-line growth resulting in EBITDA of around $100
million such that FCF is consistently positive and leverage,
measured as total debt/EBITDA, is sustained below 6.0x.
Factor that could, individually or collectively, lead to negative
rating action/downgrade:
-- Capacity restrictions and event cancelations extend longer
than expected, resulting in greater than expected cash burn
leading to liquidity concerns or leverage sustained above 7.5x
beyond 2022, raising questions about the sustainability of the
company's capital structure.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Entering 2020, Legends' liquidity totaled approximately $112
million, including $29 million of cash and $83 million available on
its $250 million revolver, net of $117 million of borrowings and
$50 million in LOCs. In addition to the revolver draw, debt
included $85.5 million in outstanding first-lien term loans. In
November 2020, as cash burn due to the pandemic drained liquidity,
the company issued $250 million of junior notes and used the
proceeds to pay down the revolver, which was concurrently downsized
to $180 million.
Following the recent closing of the refinancing transaction, the
company's debt structure consists of a $150 million super-priority
revolving credit facility due in 2025, $400 million of 5% senior
secured notes due in 2026 and a $100 million senior unsecured PIK
loan due in 2027. The revolver and secured notes are secured on a
first-priority basis by substantially all domestic assets of the
company, with the revolver benefiting from first-out status with
respect to the collateral. Legends Hospitality Co-Issuer, Inc. is a
co-issuer on the $400 million secured notes. All the debt is
guaranteed by Legends' current and future domestic restricted
subsidiaries, with certain exceptions.
Pro forma for the transaction, Fitch estimates Legends has around
$236 million of liquidity as of Dec. 31, 2020 consisting of $116
million of unrestricted cash and $120 million of available revolver
capacity net of $30 million in LOCs. Fitch expects the company to
have sufficient liquidity to continue to fund its operations and
capex until live sports and attractions are able to operate at
normalized capacity and the company is able to return to FCF
neutral.
Recovery Considerations
For issuers with IDRs of 'B+' and below, Fitch performs a recovery
analysis for each class of obligations of the issuer. The issue
ratings are derived from the IDR, the relevant Recovery Rating (RR)
and prescribed notching.
Fitch's going-concern EBITDA assumption for Legends assumes the
recovery from the pandemic is more drawn out than expected
resulting in continued cash burn that ultimately leads to a debt
restructuring. Fitch assumes live event attendance remains severely
depressed with revenue, excluding contracts expected to roll on in
2021, 25% lower than the 2019 level of $871 billion. Fixed-cost
deleveraging results in EBITDA margins in the low-7% range relative
to Fitch-calculated 8.7% in 2019. Factoring in contracts expected
to roll on in 2021 results in a post-restructuring EBITDA of $60
million.
Fitch applies a 7.0x evaluation value (EV)/EBITDA multiple, above
the 6.3x median multiple for food, beverage and consumer bankruptcy
reorganizations analyzed by Fitch. The multiple reflects Legends'
leading position in several of its business segments and its long
duration contracts with high quality counterparties, offset by its
small scale compared with peers in its core hospitality segment.
Based on the above going-concern EBITDA and EV/EBITDA multiple,
Fitch arrives at a going-concern valuation under a distressed
scenario of $420 million.
After deducting 10% for administrative claims, Legends'
super-priority revolving credit facility is expected to have
excellent recovery prospects of 90%-100%, and has been assigned
'BB-'/'RR1'. The secured notes are expected to have good recovery
prospects of 50%-70%, and have been assigned 'B'/'RR3' ratings. The
revolver and notes will be secured by a first-priority interest in
substantially all assets of the borrowers and their domestic
subsidiaries.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3'. This
means ESG issues are credit-neutral or have only a minimal credit
impact on the entity, either due to their nature or the way in
which they are being managed by the entity.
LIONHEART LLC: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Lionheart, LLC
4848 Lemmon Avenue
Suite 405
Dallas, TX 75219
Business Description: Lionheart, LLC is engaged in activities
related to real estate.
Chapter 11 Petition Date: January 24, 2021
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 21-30134
Debtor's Counsel: Gregory W. Mitchell, Esq.
FREEMAN LAW, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Tel: (972) 463-8417
E-mail: gmitchell@freemanlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Angelos Kolobotos, president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/7RKOLSQ/Lionheart_LLC__txnbke-21-30134__0001.0.pdf?mcid=tGE4TAMA
LOVES FURNITURE: Granted Interim Use of Cash Collateral
-------------------------------------------------------
Judge Thomas J. Tucker of the U.S. Bankruptcy Court for the Eastern
District of Michigan, Southern Division, has authorized Love
Furniture Inc. to use cash collateral on an interim basis in
accordance with a budget.
The Court concludes that entry of the Order is in the best
interests of the Debtor's estate and creditors as its
implementation will, among other things, allow for the flow of
supplies and services to the Debtor necessary to sustain the
Debtor's business operation and enhance the Debtor's prospects for
a successful completion of the Chapter 11 Case.
Certain of the Debtor's creditors, including but not limited to
STORE Capital Acquisition, LLC, Penske Logistics LLC, Argyle Acres,
A & R Properties, Planned Furniture Promotions, Inc., Toronto
Dominion Bank, Kuehne + Nagel, and Westwood Capital Funding, assert
that they hold liens on the Debtor's inventory and other property
and the proceeds of the same (including, without limitation, any
proceeds of insurance related to the damage or loss of any
collateral) and held the liens as of the Petition Date.
The Debtor estimates it owns about $27,000,000 of inventory as of
the bankruptcy filing date -- more than $11,000,000 in inventory in
the Loves Warren, Michigan warehouse and more than $6,000,000 in
inventory in 12 remaining stores.
The inability to turn its inventory into cash is the major cause of
the Debtor's bankruptcy. The Debtor says it has too much inventory
and too little cash to operate its stores without an infusion of
cash for inventory.
To remedy this issue, and to fund its Chapter 11 case, the Debtor
entered into a Sale Promotion Consulting Agreement with a
contractual joint venture of Planned Furniture Promotions, Inc.,
and Hilco Merchant Resources, LLC, to sell inventory. In
accordance with the Consulting Agreement, the Agent is syndicating
the transaction with Gordon Brothers Retail Partners, LLC and SB360
Capital Partners, LLC. Upon Court approval of the Consulting
Agreement, PFP will pay the Debtor $2,500,000, with additional
compensation to the Debtor coming through the terms of the
Consulting Agreement.
In addition, in connection with its sales at the Debtor's
locations, PFP will pay operating expenses of the Debtor's business
locations, including rent, insurance, utilities, advertising and
other expenses as set forth in the Consulting
Agreement. This will substantially reduce the cash burden on the
estate.
All of the Debtor's inventory to be sold under the Consulting
Agreement is cash collateral. Accordingly, to obtain the benefits
of the Consulting Agreement, and to use the proceeds of the sales
under the Consulting Agreement, the Debtor needs authority to use
cash collateral.
As adequate protection for any diminution in value of the purported
liens held by the Secured Creditors, and any other creditor that
asserts an interest in the Debtor's Cash Collateral prior to the
Final Hearing on the Motion, and in the Debtor's property
purportedly subject to the Prepetition Liens, each of the
Prepetition Cash Collateral Creditors will have valid, binding,
enforceable and perfected replacement liens in the Debtor's
interest in the same categories of Collateral as the Prepetition
Liens on the Petition Date, and in the proceeds of any disposition
of the Collateral.
Notwithstanding the foregoing, and subject to approval of the
Consulting Agreement, however, any lien on proceeds that could have
existed on property of the Debtor that is subject to the Consulting
Agreement will be transferred to and will extend only to the
Debtor's interest in the Consulting Agreement, specifically, the
cash proceeds due to the Debtor under the Consulting Agreement.
The Replacement Liens will enjoy the same validity, priority and
extent as any perfected Prepetition Liens had as of the Petition
Date, subject only to any existing liens and encumbrances in the
Collateral that were valid, binding, enforceable, and perfected
liens existing in the Prepetition Collateral on the Petition Date.
As additional protection of the Prepetition Cash Collateral
Creditors' interest in the Collateral to the extent the Replacement
Liens fail to adequately protect a Prepetition Cash Collateral
Creditor's interest in Collateral, then to the extent the affected
Prepetition Cash Collateral Creditor's prepetition claim is
allowed, it will be treated as a superpriority administrative
expense claim under section 507(b) of the Bankruptcy Code, with
priority over all costs and expenses of administration of the Case
that are incurred under any provision of the Bankruptcy Code, other
than claims under Section 364(c) of the Bankruptcy Code and unpaid
United States Trustee's Fees.
Penske Logistics LLC and Westwood Capital Funding assert liens in
the Debtor's inventory located at its facility located at 6500 E.
14 Mile Road, Warren, MI 48092. The Debtor agree to maintain
inventory at the Warren Facility with an estimated aggregate value
of not less than $2.6 million until such time as the Court enters
an order removing or modifying this requirement.
Loves entered into a lease with SBV-Holland LLC for property
located in Holland, Ohio, a suburb of Toledo. The Interim Cash
Collateral Order provides that in the event the Debtor fails to pay
postpetition rent due to SBV-Holland, LLC by the 5th of a month,
the Debtor consents to an expedited hearing on any motion for
relief from stay by SBV-Holland on two business days' notice
(subject to the Court's schedule).
The final hearing on the Cash Collateral Motion will be held
February 3, 2021, at 11 a.m. Eastern Standard Time.
A copy of the order is available at https://bit.ly/3p9afCE from
PacerMonitor.com.
About Loves Furniture Inc.
Loves Furniture Inc. -- http://www.lovesfurniture.com/-- is a
furniture retailer that sells furniture, mattresses, home decor and
appliances. It conducts business under the name Loves Furniture
and Mattresses.
Loves Furniture sought Chapter 11 protection (Bankr. E.D. Mich.
Case No. 21-40083) on Jan. 6, 2021. The Debtor was estimated to
have $10 million to $50 million in assets and liabilities at the
time of the filing.
Judge Thomas J. Tucker oversees the case.
Butzel Long, A Professional Corporation, led by Max J. Newman,
Esq., is the Debtor's counsel.
LUMENTUM HOLDINGS: S&P Retains 'BB-' ICR; Outlook Stable
--------------------------------------------------------
S&P Global Ratings retained its 'BB-' issuer credit rating on
Lumentum Holdings Inc. Outlook remains stable.
S&P placed its 'BB-' issue-level rating on Lumentum's existing
convertible debt on CreditWatch with negative implications, because
the proposed senior secured term loan will have higher priority in
the capital structure. The rating agency expects the deal to close
in the second half of 2021 and plan to resolve the CreditWatch
before that time.
Lumentum Holdings Inc. announced that it has entered into a
definitive agreement with Coherent Inc., under which Lumentum will
acquire Coherent in a cash and stock transaction valued at $5.7
billion.
The company plans to issue a $2.1 billion term loan B, $1 billion
of cash, and $3.2 billion of Lumentum equity to fund the
acquisition of Coherent.
The CreditWatch placement on the convertible debt follows the
announcement that Lumentum will issue a $2.1 billion senior term
loan B (fully committed) to fund the acquisition of Coherent. The
term loan will have higher priority in the capital structure, which
means S&P could notch down its rating on the convertible debt by a
maximum of two notches. S&P's 'BB-' issuer credit rating and stable
outlook on Lumentum are unchanged.
S&P said, "If the transaction were to close with the proposed
capital structure, we expect Lumentum's S&P adjusted net leverage
to be in the low-3x area at close. The company plans to execute on
$150 million in synergies (67% in COGS and 33% in operating
expenses) over 24 months post-transaction close. We are still
reviewing the transaction, but we expect leverage to fall over the
next 12-24 months to the high-2x area, which is in line with
leverage of other 'BB-' rated companies."
"We expect Lumentum pro forma to be a more diversified company with
exposure to 3D sensing, telecommunications, data communications,
microelectronics, instrumentation, and A&D end markets. Management
also noted that the company would be better positioned to address
end-market transitions such as digitalization, 5G wireless
networking, microelectronics, and new materials."
MARTI'S PLUMBING SERVICE: May Use Cash Collateral
-------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California,
San Jose Division, has authorized Marti's Plumbing Service, Inc. to
use cash collateral in which J.P. Morgan Chase, U.S. Internal
Revenue Service, Pace Supply and the U.S. Small Business
Administration may assert an interest in order to finance its
operations during the Chapter 11 proceedings.
The Secured Creditors are granted a replacement lien in like amount
and in the same priority on post-petition receivables, new cash and
new inventory.
The Debtor will also make adequate protection payments to the
Secured Creditors starting on the 15th day of the month following
entry of the order authorizing use of cash collateral:
Scheduled Adequate
Lien Claimant Pre-petition Debt Protection Payment
------------- ----------------- ------------------
JP Morgan Chase $58,808.40 $1,109.79
IRS $21,926.41 $413.78
Pace Supply $17,765.52 $335.26
US SBA 0 0
----------------- ------------------
TOTAL $98,500.33 $1,858.83
The authorization to use cash collateral will terminate on 10-day
notice with failure to cure should the Debtor default in the
adequate protection payments.
The authorization will continue until the sooner of confirmation,
conversion to another Chapter or dismissal.
A copy of the order is available at https://bit.ly/3iQiQb2 from
PacerMonitor.com.
About Marti's Plumbing Service, Inc.
Marti's Plumbing Service, Inc. sought protection under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Calif. Case No. 20-51687) on
Nov. 24, 2020. At the time of filing, Debtor said assets were less
than $50,000 and liabilities were between $100,001 and $500,000.
The Fuller Law Firm, PC is the Debtor's legal counsel.
MARYWOOD UNIVERSITY: S&P Alters Revenue Bond Outlook to Stable
--------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed its 'BB+' rating on Scranton-Lackawanna Health & Welfare
Authority, Pa.'s revenue debt, issued for Marywood University
(MU).
"The outlook revision to stable reflects our opinion of the
university's recently improved available resource metrics and
operating performance," said S&P Global Ratings credit analyst
Amber Schafer. "And even though the university experiences
enrollment pressure, it has reacted with expense management
measures that resulted in positive operating margins in fiscals
2019 and 2020."
"Despite this improvement, we believe uncertainty remains regarding
the pandemic's ultimate effect on the university, including the
potential for weaker operating performance in fiscal 2021. However,
we believe the university's balance sheet metrics are sufficient to
support the current rating," Ms. Schafer added.
In S&P's view, Marywood University, like other higher education
institutions, faces elevated social risk due to the uncertainty of
the duration of the COVID-19 pandemic. Due to the pandemic, MU's
management team transitioned to remote learning in spring 2020 and
reopened primarily for in-person learning in fall 2020 with a
hybrid instructional format. In addition, the university
de-densified housing and classroom space to protect the health and
safety of students, faculty, and staff; and limit social risk
associated with the community spread of COVID-19. S&P views the
risks posed by COVID-19 to public health and safety as a social
risk under its environmental, social, and governance factors. In
addition, S&P believes the university is affected by demographic
pressure due to a lower number of graduating high school seniors in
the region, which the rating agency views as a social risk, which
it believes could pressure enrollment. Despite the elevated social
risk, S&P believes MU's environmental and governance risk are in
line with its view of the sector.
IHM founded Marywood in 1915 as a college for women in Scranton.
Marywood has been coeducational since 1968, and it gained
university status in 1997. The university is accredited by Middle
States Commission for Higher Education.
MEREDITH CORP: S&P Alters Outlook to Stable, Affirms 'B' ICR
------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
U.S.-based media company Meredith Corp. and revised its outlook to
stable from negative.
The stable outlook reflects S&P's expectation that leverage will
remain below 5.5x during the next year as core television
advertising spending gradually recovers, print declines moderate,
and digital advertising increases.
The outlook revision reflects Meredith's better-than-expected
operating performance since the end of March 2020 and S&P's
expectation the company will maintain adjusted net leverage below
5.5x through fiscal 2022. While advertising revenues faced
challenges through most of 2020 due to the COVID-19 pandemic and
ensuing recession, Meredith outperformed S&P's EBITDA expectations
through cost reductions, strong political advertising revenue, and
digital advertising revenue growth. It also improved cash flows
through cuts to capital expenditure (capex), working capital
optimization, and suspending its dividend.
S&P said, "We forecast adjusted net leverage will be in the low-5x
area for calendar 2020, and we expect it will remain below 5.5x in
fiscal 2021. We also believe leverage could decline toward 4.5x in
fiscal 2022 if non-political advertising revenue recovers in both
its local and national media segments and Meredith repays debt."
"We expect the company will continue to use most of its
discretionary cash flow (DCF) to repay debt. Meredith committed to
repaying debt since its 2018 acquisition of Time Inc., using
internally generated cash and proceeds from asset sales. We expect
this to continue in fiscals 2021 and 2022. We expect Meredith to
generate $260 million-$280 million of DCF in fiscal 2021, supported
by reduced capex, working capital management, and after suspending
its dividend at the beginning of the pandemic. In June, the company
amended its senior secured credit agreement to gain financial
covenant relief through March 31, 2022. As part of the amendment,
Meredith is restricted from issuing a dividend during the covenant
relief period. We expect it will reinstate a dividend either after
the covenant relief period ends in late 2022 or sooner if the
company terminates its covenant relief."
Meredith has sold most of its noncore publishing brands not focused
on its target female demographic since the Time acquisition. It
continues to look for opportunities to right-size its portfolio. In
January, the company announced the sale of Travel + Leisure for
$100 million. S&P expects no significant impact on Meredith's
operating results and that it will use the proceeds to repay debt.
The company's advertising exposure is significant, with a large
percentage in print advertising. Meredith's advertising revenues,
heavily influenced by economic cycles, are a large share of its
total revenue.
S&P said, "We expect about 50% of total revenue to come from
advertising in fiscal 2021, with about 30%-35% of advertising
revenue from print. While traditional media companies (television,
radio, and outdoor) were hurt by the pandemic and resulting
recession in 2020 as advertisers pulled back on spending, core
television advertising sequentially improved since its low point in
April. We expect it will largely recover in calendar year 2021 to
about 90% of 2019 advertising. Print advertising revenue declines
accelerated, exceeding 30% in the first quarter of fiscal 2021.
While we expect declines will moderate over the next 12 months,
they will return to 7%-10% in fiscal 2023."
"Meredith's digital advertising revenue in its national media
segment exceeded our expectations in the first quarter of fiscal
2021, increasing about 15% despite the ongoing advertising
recession and significant competition for digital advertising
dollars from large technology companies such as Alphabet Inc.
(parent of Google LLC), Facebook Inc., and Amazon.com Inc. We
expect digital advertising growth will continue at a double-digit
percent rate through fiscal 2021, but competition could hurt
Meredith's ability to sustain that in later years."
"We believe its high dependence on cyclical advertising and
exposure to secular declines, particularly in the print advertising
and circulation segments, make Meredith more prone to earnings
volatility than other media companies." Notwithstanding, this is
partially offset by the good cash flow generation of the television
broadcasting business and Meredith's track record of debt
repayment."
Meredith's portfolio of television stations provides a stable
source of cash flow. Its local media TV broadcasting segment is
very profitable and the primary driver of cash flow generation as
it integrates acquisitions in its national media segment. The
television broadcasting segment generates about 30% of Meredith's
total revenue, but accounts for a higher percentage of EBITDA. The
segment's strong EBITDA margins benefit from increasing
retransmission revenues, highly rated stations, market duopolies,
and strong political advertising revenue in election years.
Meredith generated a record $165 million of political advertising
revenue in the first half of fiscal 2021, which will help offset
the impact of the recession on the rest of its advertising revenue.
The stable outlook reflects S&P's expectation that leverage will
remain below 5.5x over the next year as core television advertising
spending gradually recovers, print declines moderate, and digital
advertising continues to increase.
S&P could raise the rating over the next 12 months if:
-- The pace of recovery of core television and print advertising
is faster than expected;
-- The company uses its DCF toward debt repayment;
-- S&P expects leverage to improve below 5x on a sustained basis;
and
-- S&P receives more clarity on Meredith's future dividend policy
and expect it will continue to generate meaningful DCF to repay
debt if it reinstates a dividend.
While unlikely over the next 12 months, S&P's could lower the
rating if it expects:
-- Meredith's net leverage to increase above 6.5x; and
-- Free operating cash flow (FOCF) to debt to decrease below 5% on
a sustained basis.
This could occur if economic pressures worsen in 2021,
substantially reducing advertising revenue, and the company's cash
preservation measures do not sufficiently offset them.
MODA INGLESIDE: Moody's Retains Ba3 CFR Amid Credit Amendment
-------------------------------------------------------------
Moody's Investors Service said that Moda Ingleside Energy Center,
LLC's (Moda, Ba3 stable) execution of a credit agreement amendment
will enhance its liquidity and extend revolver maturity, and so
Moody's considers the transaction a positive credit development.
On January 15, 2021, Moda executed the amendment to upsize its
revolving credit facility to $300 million from $45 million.
Concurrently, the revolver's maturity date was also extended by one
year to September 28, 2024. Moda will draw on this meaningfully
upsized revolver to refinance its $171 million delay draw term
loan. Moody's views this transaction as a credit positive for the
company as it will enhance liquidity while being leverage neutral.
However, the debt burden and interest expense will mostly remain
the same. Therefore, Moda's ratings, including its Ba3 corporate
family rating and Ba3 senior secured ratings, as well as the stable
outlook, remain unchanged at this time.
As of September 30, 2020, roughly $15 million was outstanding under
the revolver. Pro forma for the transaction, Moody's expects Moda
will have $294 million outstanding on its term loan B due September
2025 and about $175 million drawn on the revolver, leaving the
company with over $100 million of revolver availability. Moody's
expects Moda to continue maintaining good liquidity. However, if
the company were to a complete a predominantly debt-financed
transaction or a step-out acquisition that increases business risk
profile or indicates an aggressive financial strategy, a downgrade
or a negative outlook could be considered.
After the delayed draw term loan is extinguished, the Ba3 ratings
on the remaining senior secured credit facilities (the revolver and
term loan B) will remain unchanged. The two facilities have a pari
passu first lien secured claim to substantially all of the
company's assets. Since there are no other debts in the capital
structure, these facilities are rated the same as the CFR.
Moda Ingleside Energy Center, LLC, is a wholly owned subsidiary of
Moda Midstream, LLC, a company headquartered in Houston, Texas that
provides storage and export terminalling facility to third-parties.
The company is backed by EnCap Flatrock Midstream, a midstream
private equity firm.
MOHAJER12 CORP: PNC Bank Says Amended Disclosure Fatally Flawed
---------------------------------------------------------------
PNC Bank, N.A., a secured creditor, filed an objection to the
adequacy of the Amended Disclosure Statement filed by debtor
Mohajer12 Corp. dated December 1, 2020.
PNC Bank joins in any other objections and asserts that:
* The Debtor failed to meet two critical benchmarks contained
in the Consent Order. Specifically, Debtor did not timely file a
Disclosure Statement and Plan whose terms PNC Bank agreed to in
writing prior to filing; or timely file a motion to use cash
collateral after the use of PNC Bank's cash collateral expired on
November 17, 2020.
* On Dec. 1, 2020, debtor filed an Amended Disclosure
Statement that did not conform with the key requirements of the
Consent Order.
* The Debtor's Amended Disclosure Statement describes a Plan
of reorganization that is predicated entirely on the incorrect
assertion that Debtor remains in possession of the Azalea Property
and can continue business operations from said location despite the
fact that the Azalea Property was no longer part of the bankruptcy
estate at the time of the Amended Disclosure Statement's filing.
* PNC Bank does not consent to Debtor's continued use or
possession of the Azalea Property. Because Debtor has no right to
possess or operate business out of the Azalea Property, Debtor's
Amended Disclosure Statement is so "fatally flawed" on its face
that it should not be approved.
* The Debtor fails to disclose that it has not filed tax
returns for five years, which is cause to deny confirmation.
* The Debtor fails to explain how the majority of the
creditors will be paid as to the source of income, timing, or
otherwise. There are significant claims filed against the Debtor,
and no assets when one looks past Debtor's incorrect assertion that
Debtor owns or has any rights with respect to the Azalea Property.
A full-text copy of PNC Bank's objection dated Jan. 19, 2021, is
available at https://bit.ly/3ofils1 from PacerMonitor at no
charge.
Attorneys for PNC Bank:
Heather A. Jamison
Christine N. Burns
BURR & FORMAN LLP
420 North 20th Street, Suite 3400
Birmingham, Alabama 35203
Telephone: (205) 251-3000
Facsimile: (205) 458-5100
E-mail: hjamison@burr.com
BURR & FORMAN LLP
11 North Water Street, Suite 22200
Mobile, Alabama 36602
Telephone: (251) 344-5151
Facsimile: (251) 344-9696
E-mail: cburns@burr.com
About Mohajer12 Corp.
Mohajer12 Corp. filed for Chapter 11 bankruptcy (Bankr. S.D. Ala.
Case No. 18-02674) on July 3, 2018, estimating less than $1 million
both in assets and liabilities. Barry A. Friedman, Esq., of
Friedman, Poole & Friedman, P.C., serves as the Debtor's counsel.
No official committee of unsecured creditors has been appointed in
the Chapter 11 case.
MOUNT JOY BAPTIST CHURCH: May Use Cash Collateral Thru Feb. 5
-------------------------------------------------------------
Mount Joy Baptist Church of Washington, D.C. and the National Loan
Acquisitions Co., by their respective counsel, have entered into a
Consent Order Authorizing Debtor's Interim Use of Cash Collateral.
The Debtor said an immediate need exists for it to use NLAC's Cash
Collateral to fund its critical business operations.
The parties stipulate and agree that prior to the Petition Date,
SunTrust Bank extended a $1,300,000 commercial Loan to the Debtor,
as evidenced by, among other things, a $1,300,000 Commercial Term
Note dated May 9, 2014 executed and delivered by the Debtor to the
order of SunTrust Bank, as modified by a Forbearance Agreement,
dated January 6, 2016, by and between the Debtor and SunTrust Bank
and as assigned to NLAC pursuant to an Allonge, dated September 14,
2018, executed by SunTrust Bank and delivered to NLAC.
Prior to the Petition Date, SunTrust Bank also extended a $200,000
commercial Loan to the Debtor, as evidenced by, among other things,
a $200,000 Commercial Term Note dated September 9, 2014 executed
and delivered by the Debtor to the order of SunTrust Bank, as
modified by a Forbearance Agreement, dated January 6, 2016, by and
between the Debtor and SunTrust Bank and as assigned to NLAC
pursuant to an Allonge, dated September 14, 2018, executed by
SunTrust Bank and delivered to NLAC.
As of the petition date, the Debtor owed NLAC $1,595,017. The
indebtedness and obligations owed by the Debtor under the Loans and
the Notes are secured by first-priority duly perfected liens and
security interests in, to and against certain real property and
other assets of the Debtor.
The parties agree that all cash products and proceeds of the
Prepetition Collateral (including all Rents) that come into the
possession, custody or control of the Debtor (both prepetition and
post-petition) constitute NLAC's cash collateral.
The Court says the Debtor may use Cash Collateral through February
5, 2021, only in the amounts and category limits set forth in the
Budget subject to a 10% cumulative variance by line item category
and a 10% variance in total. The Debtor will not: (i) loan or
advance any money to any person or entity for any reason; (ii) pay
any dividend, distribution or other funds, to any of the Debtor's
shareholders, officers or directors; or (iii) redeem any stock in
the Debtor or make any installment payment, distribution or other
transfer to any shareholder or former shareholder of the Debtor in
connection with a previous stock redemption.
As adequate protection for the Debtor's use of cash collateral,
NLAC is granted valid, choate, perfected, enforceable and
non-avoidable first-priority security interests and liens in, to
and against all post-petition property and assets of the Debtor
that constitute proceeds and products of NLAC's Prepetition
Collateral and Cash Collateral.
As additional adequate protection for NLAC's interests in the Cash
Collateral, immediately upon the entry of the Order, and continuing
at all times thereafter, the Debtor will use NLAC's Cash Collateral
to pay the ongoing expenses of the Property, as set forth in the
Budget, and will also use such Cash Collateral to pay for adequate
insurance for the Property and for any real estate taxes owed
against the Property. In addition, on February 1, 2021, the Debtor
will tender to NLAC, in immediately available funds, monthly
payments each in the amount of $5,675.
NLAC is represented by:
Michael D. Nord, Esq.
GEBHARDT & SMITH LLP
One South Street, Suite 2200
Baltimore, MD 21202
Email: mnord@gebsmith.com
A copy of the order and budget through Feb. 5 is available at
https://bit.ly/39ewGRm from PacerMonitor.com.
About Mount Joy Baptist Church of Washington, D.C.
Mount Joy Baptist Church of Washington, D.C., a Baptist church in
Oxon Hill, Md., filed a Chapter 11 petition (Bankr. D. Md. Case No.
19-11707) on Feb. 8, 2019. The Debtor is a District of Columbia
corporation which owns and operates a commercial property in Prince
George's County. In the petition signed by Rev. Bruce Mitchell,
pastor and CEO, the Debtor was estimated to have $1 million to $10
million in both assets and liabilities.
Judge Thomas J. Catliota oversees the case.
Craig M. Palik, Esq., at McNamee Hosea Jernigan Kim Greenan &
Lynch, P.A., serves as bankruptcy counsel to the Debtor. The
Debtor tapped TD Emory, CPA & Associates, as its accountant.
The Office of the United States Trustee has not appointed an
Official Committee of Unsecured Creditors in this case.
On December 5, 2019, the Debtor filed a Disclosure Statement and
Chapter 11 Plan of Reorganization. A hearing on the Disclosure
Statement was held on October 21, 2020, and the Disclosure
Statement was approved. A confirmation hearing on the Plan was
conducted on January 5, 2021 and the Court took the matter under
advisement.
NEWELL MOWING: Seeks Cash Collateral Use
----------------------------------------
The Newell Mowing Co., doing business as Green Man Lawn and
Landscape, asks the U.S. Bankruptcy Court for the District of
Colorado for authority to use cash collateral and provide adequate
protection.
The Debtor requires use of the Cash Collateral to protect and
preserve ongoing operations by paying for monthly overhead
expenses, payroll and costs of goods sold.
Pursuant to Schedule A/B: Assets - Real and Personal Property, the
Debtor maintained the amount of $111.09 within Vectra Bank Checking
Account No. 8357 and valued collectible accounts receivable of
$38,500.83. These constitute the cash collateral.
The Debtor says Bank of the West the United States Department of
Treasury - Internal Revenue may hold validly perfected security
interests against the Cash Collateral.
On May 8, 2015, the Debtor executed a Promissory Note and
Commercial Security Agreement in favor of BOTW, which provides that
the Debtor granted to BOTW a security interest in the Cash
Collateral as consideration for a loan in the principal amount of
$50,000. As of the Petition Date, the Debtor owed to BOTW a balance
of $43,449.98 together with interest assessed at the rate of 3% per
annum; and remained current with an installment plan that required
monthly payments of $660.16.
Pursuant to a Notice of Tax Lien, the IRS holds a perfected
security interest against the Cash Collateral for wage withholding
tax liabilities in the amount of $1,637.85.
The Colorado Department of Revenue also holds a first priority
security interest against the Cash Collateral pursuant to section
39-22-604(7), C.R.S. (2020), even though the CDOR recorded a Notice
of Colorado Tax Lien on August 29, 2019 with the Boulder County,
Colorado Clerk and Recorder's Office but not with the State
Secretary. Pursuant to Proof of Claim 10-1 filed on January 8,
2021, the CDOR holds a secured claim in the amount of $26,876.82.
The Debtor also executed a Kabbage Business Loan Agreement in favor
of Celtic Bank Corporation on or about September 14, 2017, who
assigned its rights and responsibilities to Kabbage, Inc. on an
unknown date and time prior to the Petition Date.
As consideration for immediate and future use of Cash Collateral,
the Debtor proposes these adequate protection payments:
a. A one-time cash payment to CDOR of its entire secured claim
in the amount of $26,876.82 with funds maintained in the DIP Cash
Collateral Account within five days of the Court entering an order
authorizing the Debtor to access the Cash Collateral;
b. Monthly payments to BOTW in the amount of $660.16; and
c. As the IRS may hold an interest in the Cash Collateral
should the collectible amount of pre-petition accounts receivable
exceed expectations, the Debtor proposes tendering monthly payments
of $28.00 as proportionate to the amount of its perfected secured
interest.
The Debtor asserts the IRS and Kabbage are not entitled to adequate
protection on account of their unperfected liens as they do not
hold a secured interest in the Cash Collateral.
A copy of the motion is available at https://bit.ly/2YaF0ep from
PacerMonitor.com.
About The Newell Mowing Co.
The Newell Mowing Co. filed for Chapter 11 bankruptcy protection
(Bankr. D. Colo. Case No. 20-17988) on Dec. 16, 2020. At the time
of filing, the Debtor estimated $100,001 and $500,000 in assets,
and between $500,001 and $1 million in liabilities.
Berken Cloyes, P.C. is the Debtor's legal counsel.
NGL ENERGY: Moody's Cuts CFR to B2 & Alters Outlook to Stable
-------------------------------------------------------------
Moody's Investors Service downgraded NGL Energy Partners LP's
(NGLEP) Corporate Family Rating to B2 from B1, Probability of
Default Rating to B2-PD from B1-PD, and senior unsecured notes to
Caa1 from B3. The SGL-3 Speculative Grade Liquidity Rating was
unchanged. The rating outlook was revised to stable from negative.
Moody's simultaneously assigned a B1 rating to NGL Energy Operating
LLC's proposed $2.05 billion first-lien senior secured notes, due
2026. Net proceeds will be used to repay the existing first-lien
credit facilities and the first-lien Apollo term loan. Concurrent
with the notes offering, the company also put a new $500 million
first-lien secured asset-based revolving facility (ABL, unrated) in
place.
"While the new notes and the ABL will substantially reduce
near-term refinancing risks, the company will continue to operate
with high financial leverage and high interest burden in a tough
industry environment," said Sajjad Alam, Moody's Senior Analyst.
"However, the restricted payment covenant in the new notes
suspending common and preferred dividends until leverage is
reduced, will facilitate a modest amount of free cash generation
and debt reduction over the next several years."
Downgrades:
Issuer: NGL Energy Partners LP
Probability of Default Rating, Downgraded to B2-PD from B1-PD
Corporate Family Rating, Downgraded to B2 from B1
Senior Unsecured Notes, Downgraded to Caa1 (LGD5) from B3 (LGD5)
Assignments:
Issuer: NGL Energy Operating LLC
Senior Secured 1st Lien Notes, Assigned B1 (LGD3)
Unchanged:
Issuer: NGL Energy Partners LP
Speculative Grade Liquidity Rating, SGL-3
Outlook Actions:
Issuer: NGL Energy Operating LLC
Outlook, Assigned Stable
Issuer: NGL Energy Partners LP
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The proposed $2.05 billion first-lien senior secured notes and the
$500 million first-lien ABL facility will be issued by NGL Energy
Operating LLC, which owns substantially all of NGLEP's assets. The
ABL will have a first-priority claim to more liquid working capital
assets and a second priority claim to all other assets. The secured
notes will have a second priority claim to the working capital
assets and a first priority claim to NGL's fixed assets. The
secured notes were rated a notch above the CFR given the
substantial loss absorption cushion afforded by the unsecured
notes. The senior notes were issued on an unsecured basis by NGLEP
-- the top holding company, and therefore, are structurally and
contractually subordinated to the new secured notes and the ABL.
The unsecured notes are rated Caa1, two notches below the B2 CFR
given the substantial amount of secured debt in NGLEP's capital
structure, under Moody's Loss Given Default for Speculative-Grade
Companies rating methodology.
NGLEP's B2 CFR reflects its high debt burden and the significant
related interest costs, reduced operating cash flow due to weak
ongoing oil and gas development and production activity in the US,
and Moody's expectation of a gradual improvement in operating cash
flow and financial leverage metrics. Low commodity prices and tight
capital market conditions have raised the company's cost of
capital. To navigate challenged industry conditions and live within
cash flow, management has significantly reduced capital
expenditures and dividends. While the proposed refinancing will
stabilize its credit profile, the company will need to generate
free cash flow, reduce debt, and address remaining medium-term
maturities to be able to be rated higher. NGLEP's primary strengths
include its significant scale, diversified midstream operations
across several key US hydrocarbon basins and increasing fee-based
cash flow from its large water solutions business in the Delaware
Basin.
NGLEP should have adequate liquidity through mid-2022, which is
captured in the SGL-3 rating. With covenant restriction on common
and preferred dividend payments and voluntary capex reduction,
Moody's expects a modest amount of free cash flow in fiscal 2021
that should grow in fiscal 2022 with ongoing low level of capital
spending and growth in the water solutions business. Pro forma for
the ABL and new secured notes issuances and debt repayments, NGL
will have roughly $232 million of availability (after accounting
for LCs) under the new ABL, which will have an initial borrowing
base of ~$437 million. The ABL will have a five-year tenor with a
springing maturity 91 days prior to any material debt maturity. The
ABL will be subject to a springing fixed charge coverage ratio of
at least 1x, tested quarterly on a trailing basis when excess
availability is less than the greater of (i) 12.5% of the lesser of
facility and borrowing base and (ii) $50 million. NGLEP could sell
certain assets to raise alternate liquidity, although any proceeds
will have to go towards secured debt reduction.
The stable outlook reflects NGLEP's improving free cash flow and
leverage trends as well as Moody's expectation that the refinancing
transaction will reduce the company's financial risks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if leverage is sustained below 5x
while maintaining a prudent distribution policy and good capital
discipline. The ratings could be downgraded if NGLEP is unable to
reduce debt, maintain debt/EBITDA below 6.5x or substantially
eliminate refinancing risk.
The principal methodology used in these ratings was Midstream
Energy published in December 2018.
NGL Energy Partners LP is a diversified midstream Master Limited
Partnership headquartered in Tulsa, Oklahoma.
NGL ENERGY: S&P Raises ICR to 'B' on Refinancing; Outlook Negative
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S&P Global Ratings raised its issuer credit rating on NGL Energy
Partners L.P. (NGL) to 'B' from 'CCC+'. The outlook is negative.
At the same time, S&P assigned its 'BB-' issue-level rating and '1'
recovery rating to NGL Energy Operating LLC's new $2.05 billion
first-lien notes. The '1' recovery rating indicated S&P's
expectation for very high (90%-100%; rounded estimate: 95%)
recovery in the event of a default.
S&P affirmed its issue-level rating on the partnership's senior
unsecured debt at 'CCC+' and revised its recovery rating to '6'
from '4'. The '6' recovery rating indicates the rating agency's
expectation for negligible (0%-10%; rounded estimate: 5%) recovery
in the event of a default.
S&P said, "The negative outlook on NGL highlights that, despite its
constructive refinancing transaction, the partnership still needs
to address its elevated leverage and continue to address its
near-term debt maturities. Specifically, we forecast the company
will achieve adjusted debt to EBITDA in the 6.5x-7.0x range in
fiscal year (FY) 2021 before improving to the 5.75x-6.25x range in
FY 2022."
NGL is undertaking a refinancing to address its outstanding
borrowings on its credit facilities which come due later this year.
The refinancing addresses the near-term debt maturities including
the outstanding borrowings on its credit facilities. The company is
issuing $2.05 billion of new first-lien notes due 2026, the
proceeds of which will be used to repay the outstanding borrowings
under its credit facility and redeem its $250 million first-lien
term loan with Apollo due 2023. The partnership is also
restructuring its asset-based lending (ABL) facility into a new
five-year $500 million ABL facility (unrated) with initial
borrowing capacity of $437 million. This transaction will push out
the partnership's debt wall to 2026, which provides it with
increased financial flexibility to address the 7.5% senior
unsecured 2023 notes maturity. That said, outside of the 2023 debt
maturity, the partnership now has a $2.05 billion first lien debt
maturity in 2026. S&P believed the company will likely term-out or
repay some of this debt over time rather than refinance the entire
amount when due.
The company took further actions to bolster its liquidity by
reducing its forecast capital spending and eliminating its common
and preferred unit distributions until certain leverage thresholds
are met under the terms of the new first lien notes. These actions
allow NGL to retain cash to further pay down its debt. Following
the refinancing, the partnership will have a more manageable debt
load between FY 2022 and FY 2025. As the company continues to
expand its focus on water solutions and crude logistics, NGL has
reshaped its capital structure to better align with the direction
of its business. The water solutions acquisitions NGL completed
over the past few years no longer require as much capital spending
because it has predominately integrated these systems into its
water solutions platform. As the level of drilling activity
continues to normalize somewhat in the Delaware Basin, the
partnership will also generate additional free cash flow to pay
down its debt.
In December 2020, NGL and Grand Mesa Pipeline LLC announced a
settlement agreement with Extraction Oil & Gas Inc. (XOG) related
to XOG's bankruptcy proceedings. Under the settlement, NGL and XOG
entered into a new term supply agreement that retains XOG's crude
volumes for shipping on Grand Mesa. S&P forecasts the new contract
structure will be less favorable for NGL but highlight the
importance of retaining this counterparty to support its long-term
EBITDA growth.
The negative outlook on NGL reflects its elevated leverage metrics
despite its constructive refinancing transaction. The refinancing,
along with the reduction in its capital spending and the
elimination of its distributions, will provide the partnership with
additional financial flexibility to further address its leverage,
though it still faces a sizeable 2023 senior unsecured debt
maturity. S&P forecasts NGL will achieve adjusted debt to EBITDA in
the 6.5x-7.0x range for FY 2021 before improving to the 5.75x-6.25x
range in FY 2022.
S&P said, "We could consider lowering our rating on NGL if any
portion of the October 2021 maturities remains outstanding and the
company lacked the liquidity to repay them when due. We also would
consider a downward ratings action if management doesn't begin to
address the senior unsecured 2023 notes maturity over the near
term. Finally, if NGL sustains adjusted debt to EBITDA of more than
6.5x for an extended period that could also result in a ratings
action."
"We could consider a stable outlook on NGL if it refinances all of
its October 2021 maturities while maintaining adjusted debt to
EBITDA at or below 5.75x for an extended period. This could also
require it to address its 2023 maturity."
OBALON THERAPEUTICS: Increases Annual Salaries of CEO, CFO to $400K
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The board of directors of Obalon Therapeutics, Inc. approved an
increase to the annual base salaries for each of Andrew Rasdal,
chief executive officer of the Company, and Nooshin Hussainy, chief
financial officer of the Company, in each case, to $400,000,
effective from Jan. 1, 2021 through the earlier of (i) the closing
of the transactions contemplated by that certain Agreement and Plan
of Merger, dated Jan. 19, 2021, by and among ReShape Lifesciences
Inc., the Company and Optimus Merger Sub, Inc. and (ii) April 30,
2021. Additionally, the Board approved an amendment to the amended
and restated retention agreements for each of Mr. Rasdal and Ms.
Hussainy to provide that the $250,000 change of control transaction
bonus will now be paid upon the earlier of (i) the closing of the
Merger and (ii) April 30, 2021.
About Obalon
Obalon Therapeutics, Inc. (NASDAQ:OBLN) -- http://www.obalon.com--
is a San Diego-based company focused on developing and
commercializing novel technologies for weight loss.
Obalon recorded a net loss of $23.68 million for the year ended
Dec. 31, 2019, compared to a net loss of $37.38 million for the
year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had
$11.96 million in total assets, $6.04 million in total liabilities,
and $5.92 million in total stockholders' equity.
KPMG LLP, in San Diego, California, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
Feb. 27, 2020, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
OBALON THERAPEUTICS: Signs Merger Agreement with ReShape
--------------------------------------------------------
Obalon Therapeutics, Inc., Optimus Merger Sub, Inc., a direct,
wholly owned subsidiary of Obalon ("Merger Sub"), and ReShape
Lifesciences, Inc., entered into an Agreement and Plan of Merger on
Jan. 19, 2021. Pursuant to the Merger Agreement, and subject to
the satisfaction or waiver of the conditions specified therein,
Merger Sub will be merged with and into ReShape, with ReShape
surviving as a wholly owned subsidiary of Obalon.
The board of directors of each of Obalon and ReShape has
unanimously approved the Merger Agreement and the transactions
contemplated thereby.
Merger Consideration
At the effective time of the Merger, each share of common stock,
par value $0.001 per share, of ReShape and each share of Series B
Preferred Stock, par value $0.01 per share, of ReShape issued and
outstanding immediately prior to the Effective Time (other than the
shares that are owned by Obalon, ReShape, or Merger Sub) will be
converted into the right to receive a number of fully paid and
non-assessable shares of common stock of Obalon, $0.001 par value
per share according to a ratio determined at least 10 days prior to
the Obalon Stockholders' Meeting that will result in the holders of
such ReShape Shares owning 51% of the outstanding Obalon Shares
immediately after the Effective Time.
Treatment of Equity
The Merger Agreement provides that, at the Effective Time, each
outstanding warrant to purchase capital stock of ReShape will be
converted into warrants to purchase a number of Obalon Shares equal
to the number of shares of ReShape Common Stock issuable upon
exercise of such ReShape Warrant multiplied by the Exchange Ratio
with an exercise price equal to the exercise price of such ReShape
Warrant divided by the Exchange Ratio. In addition, each
outstanding option to purchase ReShape Common Stock, whether vested
or unvested, shall be cancelled and terminated without any payment.
Obalon will assume the obligations of the Series C Preferred Stock,
par value $0.01 per share of ReShape and shall file a new
certificate of designation with the same terms and conditions as
the ReShape Series C Certificate of Designation. Each outstanding
option to purchase Obalon Shares and each outstanding restricted
stock unit granted under an Obalon equity plan will become fully
vested at the Effective Time.
Governance
The Merger Agreement provides that as of the Effective Time, Obalon
will be renamed ReShape Lifesciences Inc. and the five current
directors of ReShape will be comprise the board of directors of the
Combined Company: Dan W. Gladney, Barton P. Bandy, Arda M.
Minocherhomjee, Ph.D., Lori C. McDougal and Gary D. Blackford. Mr.
Gladney will serve as the chairperson and Mr. Blackford will serve
as lead director of the board of directors. As of the Effective
Time, Mr. Bandy will serve as chief executive officer and Tom
Stankovich will serve as the chief financial officer of the
Combined Company.
Conditions to the Merger
The consummation of the Merger is subject to customary closing
conditions, including (i) approval of the issuance of Obalon Shares
in connection with the Merger by the affirmative vote of the
majority of Obalon Shares cast at the Obalon Shareholders' Meeting
in favor of the issuance of Obalon Shares in connection with the
Merger, (ii) the adoption of the Merger Agreement by the
affirmative vote of the holders of a majority of all outstanding
shares of ReShape common stock entitled to vote thereon, (iii) the
absence of any law or order by any governmental entity in effect
that seeks to enjoin, make illegal, delay or otherwise restrain or
prohibits the consummation of the Merger, (iv) Nasdaq's approval of
the Obalon Shares to be issued in the Merger being listed on the
Nasdaq, (v) Nasdaq’s approval of the continued listing
application for the Combined Company to maintain Obalon's Nasdaq
listing, (vi) subject to certain materiality exceptions, the
accuracy of certain representations and warranties of each of
Obalon and ReShape contained in the Merger Agreement and the
compliance by each party with the covenants contained in the Merger
Agreement, (vii) the absence of a material adverse effect with
respect to each of Obalon and ReShape and (viii) the registration
statement registering the merger consideration becoming effective.
Certain Other Terms of the Merger Agreement
Obalon, ReShape, and Merger Sub each made certain representations,
warranties and covenants in the Merger Agreement, including, among
other things, covenants by Obalon and ReShape to conduct their
businesses in the ordinary course during the period between the
execution of the Merger Agreement and consummation of the Merger,
to refrain from taking certain actions specified in the Merger
Agreement and to use commercially reasonable efforts to cause the
conditions of the Merger to be satisfied. Subject to certain
exceptions, the Merger Agreement also requires each of ReShape and
Obalon to call and hold stockholders' meetings and requires the
board of directors of each of ReShape and Obalon to recommend
approval of the transactions contemplated by the Merger Agreement.
Obalon and ReShape are restricted from soliciting any acquisition
proposals, or engaging in any discussions related to such
proposals, although each party may engage in discussions related to
a superior proposal subject to certain conditions.
Each party's board of directors may change its recommendation to
its stockholders in response to a superior proposal or an
intervening event (each as defined in the Merger Agreement) (after
giving the other party at least five business days' notice and an
opportunity to negotiate an alternative transaction) or if the
board of directors determines that the failure to take such action
would constitute a breach of the directors' fiduciary duties under
applicable law.
The Merger Agreement provides for certain termination rights for
both Obalon and ReShape. Upon execution and delivery of the Merger
Agreement, ReShape will have deposited $1.0 million with a
third-party escrow agent to secure the obligations of ReShape to
use its reasonable best efforts to obtain Nasdaq's approval of (i)
a Listing of Additional Shares Notice covering the Obalon Shares to
be issued in the Merger and (ii) the continued listing application
for the Combined Company. If Obalon terminates the Merger
Agreement as a result of ReShape's breach of its covenant to use
its reasonable best efforts to obtain the Nasdaq Approvals, or if
either party terminates the Merger Agreement because the Nasdaq
Approvals have not been obtained within 30 days following the later
of the Obalon Stockholders' Meeting and the ReShape Stockholders'
Meeting, then ReShape will be required to pay Obalon the $1.0
million termination fee.
Voting Agreements
On Jan. 19, 2021, following the execution of the Merger Agreement,
Obalon entered into a Voting and Support Agreement with Armistice
Capital Master Fund Ltd. Armistice is the beneficial owner of
approximately 86.4% of the currently outstanding common stock of
ReShape. Pursuant to the ReShape Voting Agreement, Armistice has
agreed, among other things, to vote its shares in favor of the
adoption of the Merger Agreement and against any alternative
proposal and against approval of any proposal made in opposition
to, in competition with, or inconsistent with, the Merger
Agreement, the Merger or any other transactions contemplated by the
Merger Agreement.
On Jan. 19, 2021, following the execution of the Merger Agreement,
ReShape entered into a Voting and Support Agreement with each of
Domain Partners VII, L.P. and DP VII Associates, L.P.,
InterWest Partners X, L.P., Okapi Ventures, L.P. and Okapi Ventures
II, L.P., Armistice Capital Master Fund Ltd. (in its capacity as a
stockholder of Obalon), and Andrew Rasdal, the president and chief
executive officer of Obalon, through his family trust. Together,
such stockholders of Obalon are the beneficial owner of
approximately 24.3% of the currently outstanding common stock of
Obalon. Pursuant to the Obalon Voting Agreement, such stockholders
have agreed, among other things, to vote their shares (A) in favor
of (i) the issuance of the Obalon shares in connection with the
Merger, and (ii) the authorization of the Obalon board of directors
to amend Obalon's certificate of incorporation to effect a reverse
stock split of Obalon's common stock at a ratio to be determined by
the Obalon board of directors with the consent of ReShape and
against any alternative proposal and (B) against approval of any
proposal made in opposition to, in competition with, or
inconsistent with, the Merger Agreement, the Merger or any other
transactions contemplated by the Merger Agreement.
About Obalon
Obalon Therapeutics, Inc. (NASDAQ:OBLN) -- http://www.obalon.com--
is a San Diego-based company focused on developing and
commercializing novel technologies for weight loss.
Obalon recorded a net loss of $23.68 million for the year ended
Dec. 31, 2019, compared to a net loss of $37.38 million for the
year ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had
$11.96 million in total assets, $6.04 million in total liabilities,
and $5.92 million in total stockholders' equity.
KPMG LLP, in San Diego, California, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
Feb. 27, 2020, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raise
substantial doubt about its ability to continue as a going concern.
OPTION CARE: Amends Credit Facility to Borrow Additional $250M
--------------------------------------------------------------
Option Care Health Inc. entered into that certain First Amendment
to First Lien Credit Agreement, by and among the Company, as
borrower, the guarantors party thereto, the financial institutions
party thereto and Bank of America, N.A., as the administrative
agent, which amends that certain First Lien Credit Agreement, dated
as of Aug. 6, 2019, by and among the Company, as borrower, the
guarantors from time to time party thereto, the lenders from time
to time party thereto and Bank of America, N.A., as administrative
agent, to, among other things, (i) permit the incurrence of $250
million of incremental first lien term loan indebtedness, which
will bear interest at LIBOR plus 3.75%, and (ii) reduce the
interest rate on the existing first lien term loans thereunder from
LIBOR plus 4.25% to LIBOR plus 3.75%, and in connection with such
reduced interest rate, the Company incurred approximately $161
million of refinancing first lien term loans to refinance the
existing first lien term lenders under the First Lien Credit
Agreement who did not consent to the reduced interest rate. The
proceeds of the $250 million incremental first lien term loans were
used to extinguish the entire $246 million remaining outstanding
balance of the Company's Senior Secured Second Lien PIK Toggle
Floating Rate Notes due 2027. In connection therewith, on Jan. 21,
2021 the Company deposited $255,847,518.11 with Ankura Trust
Company, LLC, as trustee and collateral agent under the Indenture,
dated as of Aug. 6, 2019, governing the Notes in order to satisfy
and discharge the Company's obligations under the Indenture.
The terms of the additional first lien term loans, including the
maturity date of August 2026, are consistent with the Company's
existing first lien credit agreement.
As a result of the debt transaction, the Company has further
simplified its capital structure and reduced its cash interest
burden. The additional first lien term loan issuance and related
retirement of second lien notes will be reflected in the Company's
first quarter 2021 financial results.
About Option Care Health
Option Care Health is an independent provider of home and alternate
site infusion services. With over 5,000 teammates, including
approximately 2,900 clinicians, the Company works to elevate
standards of care for patients with acute and chronic conditions in
all 50 states. Through its clinical leadership, expertise and
national scale, Option Care Health is reimagining the infusion care
experience for patients, customers and employees.
Option Care recorded a net loss of $75.92 million for the year
ended Dec. 31, 2019, compared to a net loss of $6.11 million for
the year ended Dec. 31, 2018. For the six months ended June 30,
2020, the Company reported a net loss of $27.58 million. As of
Sept. 30, 2020, the Company had $2.66 billion in total assets,
$1.67 billion in total liabilities, and $993.50 million in total
stockholders' equity.
OPTION CARE: S&P Affirms 'B-' ICR, 'B-' First-Lien Term Loan Rating
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Option Care Health Inc. plans to raise a $250 million add-on to its
existing senior secured first-lien term loan due in 2026. S&P
Global Ratings expects Option Care will use the proceeds primarily
to repay the full amount outstanding under its second-lien
payment-in-kind toggle notes due August 2027, which the rating
agency considers to be leverage neutral.
S&P affirmed its 'B-' issuer credit rating on Option Care and its
'B-' rating on the company's first-lien term loan. The capital
structure change has resulted in S&P's estimate for lower recovery
prospects to secured creditors to a rounded estimate of about 50%
from about 60% previously. This is still within S&P's 50%-70% range
for a '3' recovery rating, albeit at the lower end.
S&P's 'B-' issue-level and '3' recovery ratings on Option Care's
first-lien debt indicate its expectation for meaningful recovery
(50%-70%; rounded estimate: 50%) in the event of a payment default.
The revised recovery percentage estimate for secured creditors to
about 50% from about 60% reflects the increase in first-lien debt
that will result from this transaction.
Option Care Health is both a medical service provider (with nurses
administering drug injections or infusions typically at a patient's
home) and a distributor (for the drugs administered). The company's
two therapy segments are chronic (branded drug treatment) and acute
(generic drug treatment for infection and nutrition). Chronic
therapies yield lower margins due to the relatively high cost of
the drug, but higher dollar profits per visit. The company has a
favorable and well-diversified payer mix.
PACIFICO NATIONAL: May Use Cash Collateral Thru March 10
--------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, has authorized Pacifico National Inc. d/b/a AmEx
Pharmacy, to use cash collateral on an interim basis through March
10, 2021.
The Debtor is authorized to use cash collateral to pay amounts
expressly authorized by the court, the current and necessary
itemized expenses set forth in the budget, plus an amount not to
exceed 10% for each line item; and additional amounts as may be
expressly approved in writing by creditor, ASD Specialty
Healthcare, LLC.
The Debtor is directed to timely perform all obligations of a
debtor-in-possession required by the Bankruptcy Code, Federal Rules
of Bankruptcy Procedure, and the Court's Orders.
Each Secured Creditor with a security interest in cash collateral
will have a perfected post-petition lien against cash collateral to
the same extent and with the same validity and priority as the
pre-petition lien, without the need to file or execute any document
as may otherwise be required under applicable non-bankruptcy law.
As adequate protection, ASD Specialty Healthcare will take
$45,148.39 levied from the Debtor's SunTrust Bank account free and
clear of all claims of the Debtor.
A further hearing on the Motion is scheduled for March 10, 2021, at
10 a.m.
A copy of the order is available at https://bit.ly/39TDeE1 from
PacerMonitor.com.
About Pacifico National Inc.
d/b/a AmEx Pharmacy
Pacifico National, Inc. -- https://amexpharmacy.com -- which
conducts business under the name AmEx Pharmacy, is a nationwide
compounding pharmacy specializing in dermatology and the
development of topical therapies. It services patients in 38
states throughout the United States.
Pacifico National filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-05009) on Sept. 3, 2020. Pacifico National President Mark L.
Sangree signed the petition.
At the time of the filing, the Debtor disclosed $363,794 in assets
and $6,583,984 in liabilities.
Bankruptcy Judge Lori V. Vaughan presides over the case.
The Debtor is represented by Thomas H. Yardley Law Offices.
PEABODY ENERGY: S&P Rates New $206-Mil. Senior Term Loan 'CCC+'
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
coal producer Peabody Energy Corp. to 'CC' from 'CCC-', and the
issue-level rating on the 2022 notes to 'CC' from 'CCC-'.
S&P assigned its 'CCC+' issue rating and '3' recovery rating to the
new $206 million senior term loan and $194 million senior notes
issued by AU Holdings LLC. In addition, the rating agency assigned
its 'CCC' issue rating and '5' recovery rating to the new $194
million Peabody notes (based on 2022 notes exchange participation
rate of 86.6%) and $324 million revolving credit facility.
The rating agency removed all ratings from CreditWatch with
negative implications, where it placed them on Nov. 10, 2020. The
outlook is negative, which reflects the likelihood that S&P will
lower the issuer credit rating to 'SD' at the close of the tender.
The downgrade follows the extension of an early exchange offer for
the 2022 notes that S&P views as a distressed debt exchange and
tantamount to a default. The non-participating lenders of the 2022
notes will rank junior to the lenders who exchange their notes. As
such, non-participating lenders will be stripped of the collateral
securing their notes, which will become unsecured obligations of
the company. The non-participating lenders represent about 13.4% of
the 2022 notes, which S&P deems as a material amount of the notes
outstanding, based on the early tender results. S&P does not
anticipate a significant increase in the participation percentage
by the expiration of the offer.
S&P said, "Even though the participating debt holders of the 2022
notes will receive compensation in exchange for an extended
maturity of the new debt, a material amount of the
non-participating lenders will receive less than the promise of the
original securities, which drives our analysis."
"We do not consider the revolving credit facility exchange offer to
be a distressed transaction because the lenders will receive
adequate compensation. In conjunction with the 2022 notes
exchange, Peabody received 100% participation from its revolving
facility lenders to exchange and extend the maturity of the
revolving facility and eliminate the net leverage covenant. The
compensation, which we consider adequate, includes an at-par
exchange into new securities and a higher interest rate."
"The negative outlook reflects our expectation that we will lower
the issuer credit rating to 'SD' (selective default) upon the
completion of the proposed exchange offer. This reflects our
expectation that a material amount of the 2022 noteholders will not
participate in the exchange offer."
"We expect to lower Peabody's issuer credit rating to 'SD' when the
company completes the distressed debt exchange. We will lower our
issue rating on the senior notes due 2022 to 'D', at the same
time."
"Upon the exchange transaction close, we expect to raise the issuer
credit rating on Peabody to 'CCC+'. In addition, we expect to raise
the ratings on the existing term loan and the 2025 senior notes to
'CCC'. We also expect to raise the rating on the 2022 notes that
did not participate in the debt exchange to 'CCC-', following the
transaction close."
PETCO HOLDINGS: S&P Upgrades ICR to 'B-' on IPO, Debt Reduction
---------------------------------------------------------------
S&P Global Ratings upgraded its issuer credit rating on Petco
Holdings Inc. to 'B-' from 'CCC+' after the company reduced debt by
about $1 billion using proceeds from its recent IPO, and issued
$450 million at a holding company of the financial sponsor. .
The positive outlook reflects potential for an upgrade if Petco
refinances its upcoming debt maturities before they become current
and S&P expects positive operating trends to persist.
The upgrade reflects an improved balance sheet following the IPO
and debt reduction. The transaction resulted in a significant
improvement in S&P Global Ratings-adjusted leverage to the mid-4x
area from mid-6x area. S&P anticipates earnings growth will
modestly improve leverage in the next year, in part because of
tailwinds associated with increased pet adoptions. Petco received
about $1 billion of net proceeds from the IPO.
Higher pet adoption rates through the pandemic have provided
revenue tailwinds, but S&P is monitoring competitive threats. Pet
ownership has increased during the COVID-19 pandemic and has
contributed to solid sales growth during the past few quarters. In
addition, as consumers spend more time at home and reduce spending
on out-of-home entertainment, they have reallocated discretionary
income toward products that improve their lives at home.
S&P said, "In our view, this contributed to higher sales of pet
hardgoods in 2020. We expect Petco to generate positive sales
growth in 2021, albeit at lower rate year over year, as sales of
hardgoods and specialty merchandise (such as leashes and pet beds)
moderate in the weaker consumer spending environment. We believe
Petco's performance has benefited from its heightened emphasis on
business investments."
Online competition from Chewy and Amazon, as well as mass
merchants, remain a formidable threat.
S&P said, "We do not believe Petco has a solid online presence
relative to these peers, and we consider competitive pressures from
larger peers as risks to the company's business. According to
Petco's recent SEC filing, the pet care industry has grown at a
compounded annual growth rate of 5%. However, we believe Petco's
average growth will be below the industry average, given the
onslaught of online competitors and mass merchants, which will
continue to change the competitive landscape."
Refinancing prospects have improved because of debt reduction and
recent good operating trends, but uncertainty about timing remains.
Petco has a $500 million asset-based lending (ABL) facility
maturing in October 2022 (not rated) and a $2.5 billion term loan
maturing in January 2023.
S&P said, "We expect the company will attempt to refinance these
maturities before they become current. Sustained positive sales
growth and our expectations for improved cash flow, partly driven
by lower debt costs, should improve Petco's standing in the
financial markets and allow it to complete an at-par refinancing.
However, these maturities are significant relative to Petco's
liquidity and cash flow, and they occur within the next 24 months.
As a result, we view Petco as having relatively greater refinancing
risks, such that we assigned a negative capital structure
modifier."
In conjunction with the IPO transaction, $450 million (of $750
million) in not-rated senior unsecured notes issued by Petco were
exchanged into notes issued by Scooby Aggregator L.P., a holding
company owned by the financial sponsors, CVC Capital Partners
Advisory (U.S.), Inc. and Canada Pension Plan Investment Board. The
remaining portion was repaid at par. Scooby will hold the financial
sponsors' remaining ownership of the public company (about 80%),
which will secure the new notes issued at Scooby.
S&P said, "We viewed this exchange as opportunistic. Through Scooby
Aggregator L.P., the sponsor owns a substantial majority of Petco's
stock, and we believe it has influence on corporate decision
making. We anticipate that the holding company debt paydown will be
completed through secondary share sales of the equity. However, we
note the potential for future dividends from Petco to pay down debt
or service interest, though we believe the risk of this is low
because of public minority interest ownership and our view that the
sponsor will gradually reduce its ownership. Still, we include the
Scooby obligations ($450 million of debt) in our calculation of
credit metrics to reflect the obligation of the holding company."
Petco's business investments are increasing, and they should help
to defend imminent market threats.
S&P said, "Over the past few years, Petco has invested about $300
million in business transformation initiatives, which we think
helped the company record good top-line growth. We believe these
initiatives, such leveraging its brick-and-mortar stores as mini
distribution centers (to supplement its omni-channel operations)
and its commitment to offer healthy food and general merchandise,
should drive foot traffic at its locations. Additional services,
such as broader veterinary care and tele-vet, can also provide
future growth opportunities. Petco has indicated that its stores
are within three miles of 54% of its customers, and customers who
engage across its multiple-channel approach spend 3x-6x more than
the single-channel customer. We believe that if Petco can offer
competing products and services at attractive prices, it could
sustain decent sales growth over the next two to three years."
The positive outlook reflects S&P's expectation that leverage will
modestly improve on same-store sales growth, providing positive
momentum for Petco to complete a refinancing before its term loan
becomes current.
S&P could raise its rating on Petco if:
-- Petco address upcoming maturities of its ABL and term loan in
timely manner and S&P expects leverage will remain below 5.5x, and
-- S&P believes Petco will sustain positive same-store sales,
EBITDA growth, and generate positive free operating cash flow
(FOCF).
S&P said, "We could revise our outlook to stable if we expect that
debt to EBITDA will increase to and stay at 5.5x or more, which
could occur if we anticipate same-store sales will be negative and
EBITDA margins decline will decline by more than 200 basis
points."
"We could take a negative rating action if we believe the company
will face heightened difficulty in refinancing upcoming
maturities."
PIKE CORP: S&P Affirms 'B' Rating on Term Loan B on Upsize
----------------------------------------------------------
S&P Global Ratings affirmed its 'B' issue-level rating on Pike
Corp.'s (B/Stable/--) proposed $730 million term loan, which has
been upsized by $100 million. Of the total proposed term loan, $415
million will close immediately and $315 million is a delayed draw
that will close March 1, 2021. The recovery rating remains '3',
indicating its expectation that lenders would receive meaningful
(50%-70%; rounded estimate: 60%) recovery of principal in the event
of a payment default. At the same time, S&P affirmed its 'CCC+'
issue-level rating on Pike's senior unsecured notes. The '6'
recovery rating is unchanged, indicating its expectation for
negligible (0%-10%; rounded estimate: 0%) recovery in the event of
a payment default. The company plans to use proceeds of the term
loan to refinance its bridge loan issued December 2020 in
connection with Lindsay Goldberg's purchase of a 50.1% voting
equity stake in the company. In addition, Pike plans to refinance
its existing $336 million term loan and hold cash on its balance
sheet for general corporate purposes.
S&P said, "Our rating and stable outlook on Pike reflect our
expectation that the company will continue to benefit from organic
growth as demonstrated by its backlog of projects and forecast
healthy margins resulting in debt to EBITDA at or below 5x,
although we estimate its free operating cash flow to debt could
decline below 5% in 2021 due to working capital swings."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario assumes a payment default
occurring in 2023 that stems from broader macroeconomic weakness,
which leads to a slowdown in outsourcing and reduced or postponed
maintenance spending by the company's utility customers.
-- This could be further exacerbated if the company is unable to
attract and/or retain a skilled labor force, particularly in the
event of a severe storm when there is an immediate need to mobilize
its employees to provide a timely response.
-- This could cause the company to lose key contracts and
customers, leading its revenue to decline and reducing its margins.
At this point, Pike's cash flow generation would be impaired, its
liquidity eroded, and a payment default could occur.
-- S&P's other assumptions include an 85% draw on its revolving
line of credit.
Simulated default assumptions
-- Simulated year of default: 2023
-- EBITDA at emergence: $114 million
-- EBITDA multiple: 5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $543
million
-- Secured first-lien debt claims: $883 million
-- First-lien recovery expectations: 50%-70% (rounded estimate:
60%)
-- Value available to unsecured claims: $0 million
-- Senior unsecured claims: $514 million
-- Senior unsecured recovery expectations: 0%-10% (rounded
estimate: 0%)
Note: All debt amounts include six months of prepetition interest.
Collateral value equals the asset pledge from obligors after
priority claims plus the equity pledge from non-obligors after
non-obligor debt.
Ratings List
New Rating
Pike Corp.
Senior Secured B
Recovery Rating 3(60%)
Ratings Affirmed
Pike Corp.
Senior Secured B
Recovery Rating 3(60%)
Senior Unsecured CCC+
Recovery Rating 6(0%)
PIONEERS MEMORIAL: Fitch Affirms 'BB' IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has affirmed Pioneers Memorial Healthcare District,
CA's (PMHD) various unlimited tax general obligation (ULTGO)
revenue bonds and Issuer Default Rating (IDR) at 'BB'. The rating
action affects the series 2004 and 2012 GO bonds as well as the
series 2017 revenue bonds issued by PMHD.
The Rating Outlook is Stable and the Rating Watch Negative has been
removed.
SECURITY
The series 2017 revenue bonds are secured by a gross revenue pledge
and further secured by a debt service reserve fund. The series 2012
and 2004 ULTGO bonds are payable from an unlimited ad valorem tax
pledge on all taxable properties within the district boundaries,
without limitation as to rate of amount.
ANALYTICAL CONCLUSION
The 'BB' rating reflects PMHD's limited operational and financial
flexibility as a result of weak operating performance over the past
couple of years. The rating also reflects the district's balance
sheet and liquidity position, which was bolstered by stimulus
funding from the Coronavirus Aid, Relief, and Economic Security
(CARES) Act.
The district continues to maintain a stable market position and
long-term partnerships with Rady Children's Hospital and Scripps
Health which will continue to enhance the district's service
offerings and full continuum of care, supporting market stability
and partially offsets its weak financial and operating profiles at
this time. The short-term relief from federal stimulus funding
combined with the long-term stability of its market position and
Fitch's expectations that balance sheet metrics will remain intact
over the next couple of years are the key drivers for removing the
district's ratings from Rating Watch Negative and affirming the
'BB' rating.
Hospitals in Imperial County continues to see high volumes of
COVID, including PMHD. The district has temporarily shut down
elective procedures to free up capacity to treat coronavirus
patients. Fitch expects the pause in elective procedures will
strain hospital operations through the interim, although additional
stimulus funding expected over the next several months should help
offset this to some extent. As of Nov. 30, 2020, the district still
had about $7 million of CARES stimulus funding yet to be
recognized. Fitch expects the remaining funds will be fully
recognized by fiscal YE 2021.
Despite operating challenges due to the pandemic, Fitch expects
that PMHD will be able to meet its bond covenant requirements in
fiscal 2021 (June 30) driven by receipt of CARES Act funding to
date, and additional stimulus funding expected in the near-term to
support vaccinations and tax revenues, which continue to support
the debt service payments of the GO bonds.
The outbreak of coronavirus created an uncertain and generally
negative environment for the entire healthcare sector. Fitch's
ratings are forward-looking, and Fitch will incorporate revised
expectations for future performance and assessment of key risk.
While Fitch expects not-for-profit acute care hospitals to continue
to face uncertainty and considerable pressure in the coming months,
with the expected rollout of coronavirus vaccines, the long-term
outlook for the sector should improve.
KEY RATING DRIVERS
Revenue Defensibility: 'bb'
Leading Market Share Offsets Weak Payor Mix.
PMHD maintains a leading market position in its primary service
area. The district benefits from ad valorem tax revenues which
provide support for debt service payments on the GO bonds. In
Fitch's view, tax revenues do not improve PMHD's revenue
defensibility assessment given the limited contribution to
operations and the lack of an available taxing margin. Fitch views
the district as vulnerable to reimbursement risk due to elevated
exposures to Medicaid and self-pay.
Operating Risk: 'b'
Pandemic Continues to Strain Operations.
The district's operations remain challenged through the interim
period as the county's COVID infection rates remain elevated. With
the volumes of cases seen after the recent holidays, the district
has chosen to shut down elective surgeries in order to free up
resources and beds to treat COVID patients. Outpatient clinic and
ancillary volumes have returned although they still lag behind
historical pre-pandemic levels. Fitch expects margins will be
strained through the remainder of the 2021 fiscal year with
operating performance in line with fiscal 2020 results.
Fitch views the district's elevated plant age and long-term capex
requirements as providing the hospital with very limited operating
flexibility, especially as the district continues to experience
operating pressures due to the pandemic. The average age of plant
was 21 years as of fiscal 2020. Fitch views additional capital
investments will be required in the medium term in order to meet
the state's seismic regulations.
Financial Profile: 'bb'
Stimulus Funds Bolster Balance Sheet Metrics.
The district's financial profile assessment is weak, driven by its
weak revenue defensibility and operating risk assessments. Fitch
expects the district's capital-related metrics will remain stable
at current levels given support from YTD CARES Act funding and
potentially more stimulus money available in the next several
months from the new stimulus law that passed this December 2020.
While support from stimulus funding will help bolster
capital-related metrics in the interim and maintain current
metrics, Fitch expects key metrics will remain pressured as the
pandemic continues to disrupt hospital operations and potentially
constraint financial performance for the remainder of the fiscal
year.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
-- An upgrade may be warranted if operating performance improves
to where operating EBITDA margins exceed 6% on a consistent
basis;
-- If liquidity levels and the cash to adjusted debt metric
significantly improve where cash to adjusted debt exceeds 120%
on a consistent basis and offset the risk associated with the
district's weak operating risk profile.
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
-- If liquidity levels and cash to adjusted debt metrics decline
below fiscal 2019 levels;
-- If the district fails to meet its days cash on hand (DCOH) and
DSC covenant requirements over the next 12 months (even if
this does not trigger an event of default);
-- If demographic trends weaken and unemployment rises resulting
in permanent weakening of the district's payor mix;
-- If operating EBITDA margins linger below 3% on a consistent
basis;
-- Significant additional debt to fund capital projects;
-- Fitch expects a slowly improving economic recovery trajectory
with comparatively high unemployment levels in 2021, but
improvements in the U.S. GDP to approximately 4.5%. Should
economic conditions decline below these expectations (due to
delays in vaccine disbursement or subsequent continuity waves
of infections), Fitch would expect to see a weaker economic
recovery in 2021, which could pressure the district's rating.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
CREDIT PROFILE
The series 2017 revenue bonds are secured by a gross revenue pledge
and further secured by a debt service reserve fund. The series 2012
and 2004 ULTGO bonds are payable from an unlimited ad valorem tax
pledge on all taxable properties within the district boundaries,
without limitation as to rate of amount.
REVENUE DEFENSIBILITY
PMHD's payor mix is challenging and reflects elevated exposure to
governmental revenue sources and high reimbursement risk. Combined
Medicaid and self-pay represented 41.7% of gross revenues as of
fiscal 2020. Fitch expects Medicaid and self-pay levels will remain
high driven by the district's weak, although stable, demographics
and having to provide health care to a large indigent and
underinsured population.
Taxing Margin Supports GO Debt Service
Tax revenues of $3.2 million (approximately 2.4% of total revenues)
received in fiscal 2020 was applied largely to debt service
payments on the district's GO bonds. PMHD currently levies a tax
rate of $0.03 per $100 assessed valuation (AV) as of the 2020/2021
tax year, a decrease from $0.04 the year prior. The general tax
rate of 1% of $100 AV is capped by California's Proposition 13. The
district does not have the ability to raise taxes above the capped
limit without taxpayer approval. Fitch does not view PMHD's tax
revenues as enhancing the district's revenue defensibility
assessment given the limited contribution to operations and the
lack of an available taxing margin.
The district's 2020/2021 taxable AV of $4.1 billion realized a
10-year CAGR of 1.8% and a five-year CAGR of 2.0%. Despite the
economic disruption in 2020, the AV saw a 2.8% growth over the past
year. The top-10 taxpayers account for about 14% of the total AV
and contribute to a moderate degree of tax-base volatility. Fitch
views the ability to make debt service payments as unlikely to be
reduced by cyclical variations in the tax base due to the unlimited
nature of the tax levy supporting the GO bond debt service, the
growing tax base and relatively low level of the current tax rate.
Fitch considers the tax base very unlikely to suffer losses that
would meaningfully erode repayment capacity even under relatively
severe stress.
Partnerships Support Market Stability
PMHD's PSA boundary is made up of the northern portion of Imperial
County and reports a 32% market share (based on most recent 2019
data) within its PSA. El Centro Regional Medical Center is the
nearest competitor and is located about 15 miles south of PMHD. The
district maintains collaborative partnerships with physicians and
health care organizations in support of its mission to provide
leadership and quality healthcare to the residents of Imperial
County.
PMHD provides specialized medical expertise to residents of the
city of Calexico, the site of its 2018 rural health clinic
expansion and renovation project. As an affiliate of Scripps
Health, PMHD receives consulting services, purchasing and branding
opportunities. Additionally, through an agreement with Rady
Children's Hospital and Health Center, the district receives
support and expertise in the provision of pediatric and neonatal
services. The new Pioneers Children's Health Center in Brawly which
opened in April 2018 further expands the district's pediatric
service lines.
Weak, But Stable Service Area Characteristics
Imperial County is the southeastern most county in California,
bordered by San Diego County to the west. PMHD's PSA includes the
incorporated cities and communities of Brawley, Calipatria,
Westmoreland, Niland and Salton City. Its economy is centered on
energy and agriculture and is realizing ongoing development across
the county.
Estimated 2019 population in the Imperial County was about 182,000
which reflect a 1.8% growth over the past five years. Economic
indicators are weak reflecting median household income levels that
trail behind state and national averages and the county's
above-average unemployment rate of 18.3%, partly as a result of its
large agricultural base.
Major employers represent sugar refining, gypsum products,
government, healthcare, gaming and retail industries. The
district's payor mix is reflective of its weak service area.
Although its service area is weak relative to state and national
indicators and the current pandemic is economically disruptive,
Fitch does not foresee any significant changes in the economy over
the outlook period that would pose material risk to the district's
tax base.
OPERATING RISK
The district's fiscal 2020 operations improved over the prior year
mostly driven by $13 million of CARES Act funding received to help
support hospital operations during the pandemic. This resulted in a
4.1% operating EBITDA margin and 5.3% EBITDA margin as of fiscal
2020. In the past couple of years, the district experienced nursing
challenges with high utilization of agency nurses to fill clinical
gaps.
In fiscal 2020, management filled a number of nursing positions and
was able to decrease its reliance on agency staffing. Furthermore,
during the pandemic, the district was able to receive assistance
from the National Guard, which helped deployed clinical staff to
the hospital to assist in the pandemic through the summer of 2020.
As a result, total agency expenses saw a significant decline of 77%
over the past fiscal year. Although shortage in nurses remains a
challenge for the district, as well as for many hospitals as a
result of the pandemic, PMHD has been able to use locums provided
through California's Emergency Medical Services Authority (EMSA) to
support clinical gaps through the interim period.
Volumes saw a good bounce back after the statewide ban on
non-critical procedures earlier in the year, but the resurgence of
coronavirus cases within the district remains elevated and continue
to strain operations through the interim period. As of the first
five months of fiscal 2021 ended Nov. 30, 2020, the district
generated an operating EBITDA margin of 0.9% and EBITDA margin of
1.4%. This includes $5.5 million of CARES Act funding recognized
through Nov. 30, 2020. The district has about $7 million of
stimulus relief funds yet to be recognized.
Utilization for inpatient services and emergency room through the
interim period remains low although outpatient volumes have
rebounded well. The majority of inpatient volumes have been COVID
cases. Cases are expected to rise given the recent Christmas and
New Year holidays. As such, the district has voluntarily stopped
all elective surgeries in the interim to minimize risk and ensure
adequate resources are available to handle the surge. Management
expects to vaccinate its staff members over the next couple of
months which should help alleviate the clinical staffing challenges
over the near-term.
Fitch expects ongoing operating pressures will remain through at
least fiscal 1Q21 and possibly through the remaining fiscal year
end (June 30) given the current conditions of the virus in Brawley.
Additional stimulus funding anticipated over the next several
months should help offset disruptions in operations and provide
financial support for vaccine distribution.
Long-Term Seismic-Related Capex Required
Fitch views PMHD's plant age as very high combining the district's
average age of plant of 21 years and future capital requirements to
meet California hospital seismic safety regulations. The district
has spent on average about 161% of depreciation over the past five
years.
The district has a cardiac catheterization lab and surgical suite
coming online within the next six months. Once online, the district
will be able to offer new services in cardiology and interventional
radiology. PMHD's main hospital building is not compliant with the
state's seismic requirements and will face significant longer-term
capital needs in order to comply by year 2030.
Management is evaluating the size and scope of required projects
over the next couple of years and will have more information over
the medium term. Developments in legislation could potentially
provide relief for hospitals, proposing alternative methods that
are less costly in meeting the state's requirements.
FINANCIAL PROFILE
Fiscal YE 2020 unrestricted cash and investments grew by 24% to
$32.6 million resulting in a DCOH of 93.5 days compared to 74.4
days in fiscal 2019. Cash was bolstered primarily by receipt of
stimulus funding to support hospital operations during the
pandemic. As a result of the district's improved cash position,
cash-to-adjusted debt improved to 103.6% relative to 86.9% the
prior year and net adjusted debt-to-adjusted EBITDA (NADAE) was
adequate at negative 0.1x.
Through the first five months of fiscal 2021, the district reported
cash-to-adjusted debt of 93% and NADAE of 0.4x. Fitch expects cash
levels should improve slightly from YTD levels once the last half
of tax revenue dollars are received in the second half of the
fiscal year and as the district recognizes the remaining CARES Act
funding received to date.
The district's $23.5 million unrestricted cash and investments as
of Nov. 30, 2020 excludes $7 million of CARES Act funding yet to be
recognized. Inclusive of these funds, cash-to-adjusted debt is
estimated at 119%. Furthermore, the district received $14.8 million
of Medicare accelerated payments in September 2020; these funds are
currently recorded as restricted cash by the district and were not
included in unrestricted cash as the funds are expected to be
repaid.
Scenario Analysis Supports 'BB' Rating Category
Fitch views Pioneer's financial profile as weak, albeit improved
through the interim period, and remaining vulnerable to ongoing
pressure from the pandemic and economic recession. Fitch's
forward-looking scenario analysis anticipates that the U.S. GDP
will contract in 1H21 followed by recovery in 2H21 as vaccinations
of the general population continue and hospital operations rebound.
Although CARES Act funding helped bolster capital-related metrics
through the interim period, Fitch is of the opinion that key
metrics will remain challenged (but relatively stable at current
levels) to some extent over the next year as the potential for
sustained losses surrounding the coronavirus pandemic still remains
a risk. Fitch continues to assess the district's key metrics as
remaining in line with 'BB' category expectations over the outlook
period.
ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS
No asymmetric additional risk considerations were applied in this
rating determination. PMHD's debt structure is conservative with
100% fixed-rate debt. As of 2020, the ULTGO bonds represented 25%
of the district's outstanding debt. There are no exposures to swap
instruments, and PMHD does not have a defined benefit pension
plan.
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
POPULUS FINANCIAL: Moody's Withdraws B3 CFR & Caa2 Secured Rating
-----------------------------------------------------------------
Moody's Investors Service has withdrawn the Caa2 senior secured
rating, B3 corporate family rating, and negative issuer outlook
previously assigned to Populus Financial Group, Inc. Populus
previously completed a redemption of its senior secured notes,
leaving approximately $42 million of the senior secured notes
outstanding, with a new $190 million secured term loan used to
partly finance the redemption ranking senior to the outstanding
notes.
Withdrawals:
Issuer: Populus Financial Group, Inc.
LT Corporate Family Rating, previously B3
Senior Secured Regular Bond/Debenture, previously Caa2
Outlook, previously Negative
RATINGS RATIONALE
Moody's has decided to withdraw the ratings for its own business
reasons.
POWDR CORP: S&P Downgrades ICR to 'B-'; Outlook Negative
--------------------------------------------------------
S&P Global Ratings downgraded POWDR Corp.'s issuer credit rating to
'B-' from 'B' and lowered its rating on its senior secured notes
due in 2025 to 'B-' from 'B'.
The negative outlook reflects the possibility S&P could lower the
rating if the 2020/2021 ski season materially worsens or if there
are delays in the distribution of vaccines in the U.S. and it
believes COVID-19 restrictions may affect the 2021/2022 ski season
and inhibit POWDR's ability to reduce leverage in fiscal 2022.
Capacity limitations and travel restrictions are having a
significant negative impact across the ski industry, and at the
company's resorts in the U.S. and Canada, and as a result, the
company will experience a significant spike in leverage in fiscal
2021 ending in September. Some of POWDR's resorts are located in
the Western US with exposure to customers coming from California,
where residents remain subject to stay-at-home orders, and the
company's two Eastern US resorts are in Vermont, where travelers
are required to complete a 14-day quarantine upon arrival or a
seven-day quarantine with a negative test in their home state. As a
result, S&P believes POWDR's season pass sales will decline as much
as 15% on a unit-sold basis in fiscal 2021.
S&P said, "We assumed in our updated base case that current travel
restrictions will remain in place through the 2020/2021 ski season
and POWDR's total revenue declines approximately 20%. We expect
season pass revenue to decline 10%-15% in fiscal 2021 in line with
skier visits, and for ancillary revenue to be severely depressed
throughout the current ski season, declining 55%-65% as POWDR is
required to restrict capacity or shut down food and beverage
services, lessons, and lodging. We believe POWDR has already taken
steps to cut costs, especially through labor reductions in its
ancillary segments. However, we believe a portion of its cost
structure is fixed such as land and building rent, some labor, and
snowmaking expenses, which are more prevalent in the beginning of
the season. We expect the company to continue to cut costs and
could reduce its overall operating expenditures by about 7%-10%.
Under our base case assumptions, we expect leverage to spike in
fiscal 2021 to potentially above 15x on a lease adjusted basis."
"However, we believe if widespread immunization is achieved through
the distribution of vaccines by about midyear 2021, which is in
line with our current expectation, POWDR could stabilize EBITDA and
cash flow metrics on a run-rate basis as early as the fourth
quarter of calendar 2021. We believe under this assumption most, if
not all, capacity and travel restrictions would be lifted prior to
the 2021/2022 ski season and leverage ending fiscal 2022 could be
below our 6x upgrade threshold, excluding payment-in-kind (PIK)
debt. POWDR has approximately $123 million in low-cost PIK debt
maturing in 2043 held by a strategic partner. The PIK debt service
does not burden cash flow and we understand the debt would not
mature until 2043 as long as POWDR complies with the terms of its
IKON pass partnership agreement, which we expect for the
foreseeable future. Nonetheless, the downgrade and negative outlook
reflect the severity of the impact that COVID-related restrictions
have had on POWDR's performance and the risks that POWDR faces over
the next eight to 12 months if there are delays in the U.S.
vaccination efforts."
"POWDR should have adequate liquidity to weather the remainder of
the pandemic even if the company has to shut down operations. We
believe POWDR's liquidity, which as of Sept. 30, 2020, consisted of
approximately $103 million in cash and full availability under its
$50 million revolving credit facility, is sufficient for the
company to weather the remainder of the pandemic. Our current base
case assumes POWDR will burn approximately $25 million-$30 million
in fiscal 2021. We expect in a shut-down scenario POWDR would
implement furloughs and reduce its workforce, as well as reduce
discretionary spending and delay nonessential capital spending.
Under these assumptions, the company would burn cash of
approximately $5 million-$10 million per month."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety.
S&P said, "The negative outlook reflects the possibility we could
lower the rating if the 2020/2021 ski season materially worsens or
if there are delays in the distribution of vaccines in the U.S. and
we believe COVID-19 restrictions may affect the 2021/2022 ski
season and inhibit POWDR's ability to reduce leverage in fiscal
2022, which could cause POWDR's capital structure to become
unsustainable."
"We would lower the ratings if we believe POWDR's capital structure
is unsustainable. This would likely be the result of a
longer-than-anticipated path to widespread immunization and the
need for states and municipalities to restrict capacity at POWDR
resorts during the 2021/2022 ski season."
"Although unlikely over the next 12 months, we could raise the
rating if POWDR is able to reduce leverage and if we believed the
company would be able to sustain S&P Global Ratings' adjusted debt
to EBITDA under our 6x downgrade threshold, excluding PIK debt."
RENOVATE AMERICA: Obtains $5 Million Loan Rise as Sale Fight Looms
------------------------------------------------------------------
Law360 reports that bankrupt home improvement lender Renovate
America Inc. pushed off a looming fight with unsecured creditors
over its Chapter 11 sale terms Friday, January 22, 2021, after its
bankruptcy lender and stalking horse bidder agreed to add one week
and $5 million to its original $18 million interim loan deadline.
U.S. Bankruptcy Judge Laurie Selber Silverstein approved the
changes after talks among the debtor, lender and prospective buyer
Finance of America Mortgage LLC and Renovate's official committee
of unsecured creditors stretched more than two hours past a
scheduled hearing start.
About Renovate America
Renovate America is one of the nation's preeminent providers of
home improvement financing through its industry-leading home
financing product, Benji. The Company offers a proprietary
technology platform that helps Americans improve their homes while
giving contractors the tools they need to grow their business. In
addition to offering intuitive financing options, Renovate America
offers industry-leading education, training and mentoring to
contractor teams in the field. On the Web:
http://www.renovateamerica.com/
Renovate America, Inc. and two affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-13173) on Dec. 21,
2020.
Renovate America was estimated to have $50 million to $100 million
in assets and $100 million to $500 million in liabilities as of the
bankruptcy filing.
Bryan Cave Leighton Paisner LLP is acting as the Company's legal
counsel. Stretto is the claims agent. Culhane Meadows, PLLC, is
the bankruptcy co-counsel. Armanino LLP is the financial advisor.
GlassRatner Advisory & Capital Group, LLC, is the restructuring
advisor. Stretto is the claims agent.
RENT-A-CENTER INC: S&P Affirms 'BB-' ICR on Proposed Acima Deal
---------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating on
Plano, Texas-based rent-to-own retailer Rent-A-Center Inc. (RCII)
and assigned its 'BB-' issue-level rating to the company's proposed
$575 million term loan B facility. The recovery rating is '3'.
RCII is refinancing its existing capital structure and adding new
debt to fund the acquisition of Acima, a virtual lease-to-own (LTO)
company.
RCII's Acima acquisition will boost the company's virtual partner
base, improving its long-term profitability and cash flow
generation prospects to offset an upfront increase in leverage.
RCII entered into a definitive agreement to acquire Acima Dec. 20,
2020, with an aim to further expand its virtual lease-to-own
platform and accelerate its long-term growth.
S&P said, "We note Acima's recent solid track record, growing
annual revenues from $97 million in 2016 to an expected $1.25
billion in 2020. The company believes it will enhance its potential
to win high-value national retail accounts. It also cites improved
underwriting, digital payment, e-commerce platform capabilities as
well as a strong leadership and sales team. We note Acima's
e-commerce platform has grown to 15% from 1% of total lease count
over the past year. We believe the addition of Acima will also
contribute to stabilizing RCII's performance, as it increases the
contribution to revenue from virtual rent-to-own (which has greater
product diversity than RCII stores), and diversifies RCII's
exposure to third-party retailers. Given these and other benefits,
we are revising our business risk score to fair from weak."
"However, in our view, the acquisition heightens execution risks as
the company works to integrate Acima and generate synergies by
leveraging its technology across other business segments.
Furthermore, RCII has only modest penetration in e-commerce sales,
which has become a critical channel for retailers to remain
competitive in the modern retail environment. As a result of these
factors we are revising our comparable ratings analysis modifier to
negative from neutral. The Acima acquisition will bring RCII's
virtual lease offering closer in size to its largest competitor,
Progressive Leasing. However, the presence of a sizable competitor
with a longer track record may make it more difficult for RCII to
gain large national retailers as third-party partners."
"The transaction does re-lever the company materially, but we
believe there is sufficient room in RCII's credit metrics after
years of deleveraging. Rent-a-Center's last-12-month (LTM) S&P
Global Ratings'-lease adjusted leverage through Sept. 30, 2020
strengthened to 1.5x from 2.2x in the year ago period. The $1.65
billion Acima purchase will be funded with a mix of new secured and
unsecured debt totaling $1.325 billion, stock consideration, a
modest draw on the revolver, and cash on hand. RCII also plans to
refinance its roughly $200 million term loan due 2026 through the
transaction."
"As a result, we expect pro forma adjusted leverage of 2.5x at the
end of the 2021 fiscal year, with a forecast for leverage to
decline toward 2x over the next 24 months. RCII has cited a target
to reduce leverage to less than 2.0x within 18 months after the
transaction closes and 1.5x in the long term as RCII benefits from
lower costs and anticipated EBITDA growth at Acima. The company
expects the transaction to close in the first half of 2021, subject
to customary closing conditions."
"RCII has maintained a disciplined and conservative financial
policy, with no near-term share repurchases expected and $63
million toward dividends in 2020, increasing to $82 million in
2021. We believe RCII will generate sufficient cash flow to fully
fund its growth and pay out anticipated dividends. We do not expect
major acquisitions in the next few years. The company will keep the
Acima team largely intact, which we view as a credit positive, and
we expect RCII will begin realizing modest synergy benefits
beginning in the second quarter of 2021."
"We expect RCII will maintain solid performance across both
traditional and virtual LTO channels over the next 12 months.
RCII's third-quarter comparable sales were up 12.9% at RAC and
revenues increased 9.3% at Preferred Lease. We note positive
same-store sales in the last seven quarters in both segments.
RCII's LTM sales grew 3.8% to $2.76 billion versus the same quarter
last year, and we expect continued growth at RCII stores resulting
from higher merchandise sales, which had been positively affected
by government stimulus and supplemental unemployment benefits in
the first half of the year. We expect preferred lease invoice
volume to remain elevated from new retail partner additions and
investments in sales and product diversity, though it could be
negatively impacted to the extent third party retailers close doors
as a result of the pandemic.. Lastly, we expect adjusted EBITDA
margins will stabilize in the 16% area due to the positive
contribution from Acima and anticipated cost synergies resulting
from the integration of Acima's technology into RCII's broader
business."
"Significant uncertainty remains regarding the path of the pandemic
through 2021 and its potential impacts on consumer spending. As a
result, we believe there are still risks for negative impacts to
RCII's performance."
"The stable outlook reflects our view that the Acima acquisition
will accelerate revenue and EBITDA growth at RCII, which combined
with anticipated debt paydown, leads to modest deleveraging over
the next 12 months."
S&P could raise the rating if:
-- The company reduces leverage to the mid-1x area and FFO to debt
improves to around 45%, and S&P expects the metrics to remain at
those levels; or,
-- RCII can successfully expand market share in the rent-to-own
segment of the retailing industry and maintain good operating
performance while integrating Acima, leading S&P to believe its
competitive position has strengthened.
S&P could lower its rating if:
-- S&P expects adjusted debt to EBITDA to approach 4x, funds from
operations (FFO)/debt to approach 20%, and it sees significant
pressure on cash flows in an operating trough;
-- Operating performance falls below S&P's expectations, leading
to minimal EBITDA expansion and negative same-store sales; or
-- A shift in financial policy to a more aggressive stance results
in substantial debt-funded share repurchases or dividends in the
next 12 months that pressure credit metrics.
ROBERT F. TAMBONE: Proposes $750K Private Sale of Jupiter Property
------------------------------------------------------------------
Robert F. Tambone asks the U.S. Bankruptcy Court for the District
of Massachusetts to authorize the private sale of the real property
located at 1003 Captains Way #1003, in Jupiter, Florida, to Jay R.
Beaulieu and Linda M. McLaughlin or their nominee for $750,000 on
the terms of their Purchase and Sale Agreement, subject to
overbid.
The Debtor and his non-debtor spouse are the owners of the Unit as
tenants by the entirety. The Unit consists of a three-bedroom, two
bath, two story attached home with 2,160 square feet of living
area, a garage, a private terrace, and a private dock. The Unit is
located in Admirals Cove development in Jupiter Florida.
The Court previously authorized the Debtor to employ Anthony Orrico
and Loggerhead Realty as his real estate broker to assist him with
the marketing and sale of the Unit. The Debtor has been marketing
the Unit since prior to the Petition Date. Prior to accepting the
offer, the Debtor received only one other acceptable offer from a
party who ultimately backed out.
The Unit is not subject to a mortgage. After payment of costs of
sale in the approximate amount of $60,000 and payment of the
Debtor's non-debtor spouse on account of her interest in the Unit,
the sale will generate approximately $345,000 in unencumbered funds
for the Debtor's bankruptcy estate.
Pursuant to the Sale Motion, the Debtor asks Court approval to sell
his right, title, and interest in and to the Unit to the
Purchasers. He asks that the sale conveys title to the Unit free
and clear of any liens, claims, encumbrances and interests.
In accordance with the terms of the Sale Agreement, the Purchasers
will pay to the Debtor on the closing date, which is to occur no
later than April 2, 2021, the Purchase Price in the amount of
$750,000, payable as follows: (i) $50,000 paid as a deposit; (ii)
$25,000 paid ten days after the Effective Date under the Sale
Agreement; and (iii) $675,000 paid at the time of delivery of the
deed.
The sale is not subject to a financing contingency or to further
due diligence. Pursuant to the Sale Agreement, the Unit will be
sold in "as is" and "where is" condition, and the Debtor is not
making any representations or warranties whatsoever, either express
or implied, with respect to the Unit.
Approval of the Private Sale is subject to the submission of higher
and better offers. Counteroffers must be in an amount not less
than 2.5% greater than the Purchase Price, or $768,750.
Counteroffers: (a) must be accompanied by a deposit equal to
$76,875 made payable to the Debtor; (b) must include an executed
purchase and sale agreement upon terms substantially consistent
with the terms of the Sale Agreement; and (c) may not be subject to
further due diligence and may not contain any other conditions
precedent to the consummation of the sale other than those provided
in the Sale Agreement.
In the event of a timely counteroffer, each interested bidder will
have an opportunity to participate in an auction before the Court,
upon procedures as approved by the Court. The Debtor asks that the
Deposit submitted by the highest bidder be forfeited to the Estate
if the highest bidder fails to complete the sale by the date
ordered by the Court. The Debtor further asks that, if the sale of
the Unit is not completed by the highest bidder, the Court
authorizes the sale of the Unit to the next highest bidder.
The Debtor has filed a proposed form of Notice, providing for the
terms of the sale, sale procedures and other related information.
He believes that the Notice provides necessary information
respecting the sale and the means for obtaining additional
information regarding the proposed sale.
The Debtor asks authority to pay all costs of sale, including the
Broker's commission, customary closing costs and expenses from the
gross proceeds of the sale of the Unit and to allocate the net
proceeds between the Debtor and his non-Debtor spouse.
The terms of the Sale Agreement are fair and reasonable, and the
Debtor believes
that a sale of the Unit to the Purchasers will yield the maximum
value. The sale of the Unit will generate unencumbered funds for
his bankruptcy estate and reduce his overall carrying costs
associated with the Unit. The Debtor has concluded in his business
judgment that the proposed sale of the Unit to the Purchasers is in
the best interests of his bankruptcy estate and its creditors.
A copy of the Agreement is available at https://bit.ly/39KxjB4 from
PacerMonitor.com free of charge.
Robert F. Tambone sought Chapter 11 protection (Bankr. D. Mass.
Case No. 20-11378) on June 22, 2020. The Debtor tapped Kathleen
Cruickshank, Esq.,
ROCHESTER DRUG: Further Fine-Tunes Plan Documents
-------------------------------------------------
Rochester Drug Cooperative, Inc., filed the Second Amended Chapter
11 Plan of Liquidation and Second Amended Disclosure Statement on
January 15, 2021.
The Second Amended Plan of Liquidation discusses the Class 1a Claim
consists of the Allowed Unsecured Priority Claim held by the IRS in
the amount of $680,650 for the tax year ending March 31, 2019,
which amount will be paid in full in accordance with the terms of
the IRS Settlement Agreement. The Debtor or the Liquidating Trustee
(i) shall pay, either from a reserve or the Estate, any actual tax
liability for the 2020 tax year that is not in fact eliminated by a
carryback of the anticipated NOL from the 2021 tax year or short
year beginning April 1, 2020 as an Administrative Claim and (ii)
shall deposit $1,427,00.00 in a separate bank account at an
appropriate financial institution, which shall remain on deposit
until at least 60 days after the filing of the Debtor's Form 1120-C
federal income tax return for the 2021 Tax Year (or any short year
ended before March 31, 2021). Said Reserve Amount is understood to
be the sum of the anticipated tax for the 2020 tax year in the
amount of $1,338,514.00 plus an additional $88,000.00.
The Class 1b Claims are composed of all other Allowed Unsecured
Priority Claims. The Debtor has identified three government units
who hold Allowed Class 1b Other Priority Claims aggregating
$28,779.00. Each holder of an Allowed Class 1 Other Priority Claim
shall be paid with priority, in full, as soon as practicable after
the later of the fourteenth day after entry of the Confirmation
Order; or the date on which such Person becomes the holder of an
Allowed Other Priority Claim. Other Priority claims shall be paid
in Cash from the Claims Reserve or the Cash in the Estate, prior to
any Distribution to any holder of a Claim in Class 2.
Like in the prior iteration of the Plan, the Liquidating Trustee
anticipates that it will make a single, lump sum pro rata payment
to the holders of Allowed Class 2 Claims following the liquidation
of all remaining Assets. Payments to holders of Allowed Class 2
Claims will be made on the later of the date or dates determined by
the Liquidating Trustee, to the extent there is Cash available for
distribution in the judgment of the Liquidating Trustee, having due
regard for the anticipated and actual expenses, and the likelihood
and timing, of the process of liquidating or disposing of the
Assets, including the expenses of the Liquidating Trustee; and the
date on which such Claim becomes an Allowed Claim. Subject to the
USA Distribution Cap, each holder of an Allowed Class 2 Unsecured
Claim must be paid in full, prior to any Distribution to any holder
of an Interest in Class 3.
The Claims will be paid from the Real Property Waterfall, the Cash
Collateral, the Professional Fee Escrow, the Claims Reserve, the
Trust Reserve, the Assets, the proceeds of Avoidance Actions and
Causes of Action, and other funds that are recovered by the
Liquidating Trustee. On the Effective Date, the Liquidating Trust
will become effective in accordance with the terms of this Plan and
the Liquidating Trust Agreement. Distributions will be administered
by the Liquidating Trustee.
Counsel to the Debtor:
BOND, SCHOENECK & KING, PLLC
Stephen A. Donato, Esq.
Camille W. Hill, Esq.
One Lincoln Center
Syracuse, New York 13202-1355
Telephone: (315) 218-8000
Facsimile: (315) 218-8100
E-mail: sdonato@bsk.com
chill@bsk.com
About Rochester Drug Co-Operative
Rochester Drug Cooperative, Inc., is an independently owned New
York cooperative corporation formed in 1905 and incorporated in
1948 with a principal office and place of business located at 50
Jet View Drive, Rochester, New York 14624. Its principal business
is to warehouse, merchandise, and then distribute, on a cooperative
basis, drugs, pharmaceutical supplies, medical equipment and other
merchandise commonly sold in drug stores, pharmacies, health and
beauty stores, and durable medical equipment business. It is a
wholesale regional drug cooperative that operates as both a buying
cooperative and a traditional drug distribution company created for
the purpose of helping independent pharmacies compete in the
current healthcare environment.
Rochester Drug Cooperative sought Chapter 11 protection (Bankr.
W.D.N.Y. Case No. 20-20230) on March 12, 2020.
The Debtor was estimated to have $50 million to $100 million in
assets and $100 million to $500 million in liabilities.
The Hon. Paul R. Warren is the case judge.
The Debtor tapped Bond, Schoeneck & King, PLLC, led by Stephen A.
Donato, as counsel and Epiq Corporate Restructuring, LLC, as claims
and noticing agent.
ROCKET TRANSPORTATION: May Use Cash Collateral Thru Feb. 18
-----------------------------------------------------------
Judge Maria L. Oxholm of the U.S. Bankruptcy Court for the Eastern
District of Michigan has authorized Rocket Transportation, Inc. to,
among other things, use cash collateral on an interim basis to pay
its operating expenses.
The Debtor is authorized to use cash collateral in the amount of
$100,902 per week to avoid immediate and irreparable harm. The
Debtor's use of cash collateral will conform to the amounts set
forth in a budget with a 10% variance. The Debtor acknowledges that
the amounts set forth in the budget for adequate protection
payments to secured lenders do not constitute a finding that the
amounts adequately protect the secured creditors' interest(s) in
their collateral.
The Debtor's Interested Creditors are granted a replacement
security interest under section 361(2) of the Bankruptcy Code to
the same extent, validity and priority as existed pre-petition and
to the extent the Interested Creditors' cash collateral is used by
the Debtor.
Upon request by the Interested Creditors, the Debtor will execute
and deliver any and all UCC Financing Statements, and UCC
Continuation Statements, or other instruments or documents
considered by the Interested Creditors to be necessary in order to
maintain the security interest and liens to the same extent,
validity and priority as existed pre-petition as granted by the
Order, the Interested Creditors are authorized to receive, file and
record the foregoing, which actions will not be deemed a violation
of the automatic stay; moreover, any filing will be without
prejudice to all claims that Debtor asserts against the Interested
Creditors in any avoidance or other action or concerning lack of
perfection. The Interested Creditors will not make charges against
the Debtors for documentation.
The Debtor is also required to pay CapCall, LLC $2,500 monthly on
or before the 20th day each month in exchange for its consent to
use the receipts it purchased pre-petition. The monthly amount may
change in subsequent interim orders or in a final order. By
agreeing to make this payment, the Debtor does not waive its rights
to challenge the overall nature of CapCall's interest in the
receipts and the priority of its security interest in the receipts,
among other issues, including but not limited to, whether the
receipts are property of the estate.
The final hearing on the Debtor's Cash Collateral Motion will be
held on February 18, 2021, at 11 a.m. EST.
A copy of the order is available at https://bit.ly/3o8OIZr from
PacerMonitor.com.
About Rocket Transportation
Rocket Transportation, Inc., is a privately held company in the
general freight trucking industry.
Taylor, Mich.-based Rocket Transportation filed a Chapter 11
petition (Bankr. E.D. Mich. Case No. 20-52337) on Dec. 14, 2020. In
the petition signed by Amar Al Hadad, president, the Debtor was
estimated to have $500,000 to $1 million in assets and $1 million
to $10 million in liabilities.
Judge Maria L. Oxholm presides over the case. Jaafar Law Group
PLLC serves as the Debtor's bankruptcy counsel.
RONNA'S RUFF: Omega Buying 2016 Pitts Log Trailer for $11.75K
-------------------------------------------------------------
Ronna's Ruff Bark Trucking, Inc., asks the U.S. Bankruptcy Court
for the Western District of Pennsylvania to authorize the sale of
its 2016 Pitts Log Trailer, VIN 5JYLT4226GP162339, to Omega Lumber
for $11,750, on the terms of their Bill of Sale/Agreement, subject
to higher bids.
A hearing on the Motion is set for Feb. 18, 2021, at 11:30 a.m.
The Objection Deadline is Feb. 5, 2021.
These named Respondents either appear to have liens on the property
that is the subject of the sale, or alternatively, are named as
Respondents for the purpose of notifying them that a sale of the
subject property, to which they may have some claim, is being
proposed:
(a) S&T Bank has a mailing address of 355 North Fifth Street,
Indiana, Pennsylvania 15701 and is represented by Beth L. Slaby,
Esquire, Grenen & Birsic, 1 Gateway Center, 9th Floor, 420 Duquesne
Blvd., in Pittsburgh, Pennsylvania 15222. It is being named a
Respondent as it holds a secured claim on virtually all of the
Debtor's assets, including the 2016 Pitts Log Trailer, VIN No.
5JYLT4226GP162339 that the Debtor is proposing to sell. S&T Bank
filed Proof of Claim No. 9 alleging a secured claim in the amount
of $12,555 in regard to the trailer. Upon information and belief
the current balance due on this debt is $11,635.
(b) Commonwealth of Pennsylvania, Dept. of Labor & Industry,
is a governmental agency with a service address of Dept. of Labor &
Industry, 651 Boas Street, Room 925, in Harrisburg, Pennsylvania
17121. The Pa. Dept. of Labor & Industry is represented by
Jennifer M. Irvin, Esquire, 301 Fifth Avenue, Suite 230, in
Pittsburgh, Pennsylvania 15222. The Commonwealth of Pennsylvania
Dept. of Labor & Industry is being named a Respondent because a
lien has been entered in the amount of $6,440 in the Court of
Common Pleas of Clarion County at Case No. 2019-01196. The Dept.
of Labor and Industry filed Proof of Claim No. 1 in the amount of
$5,934 with regard to the claim.
(c) Omega Lumber is the proposed purchaser of the property
and has a mailing address of 21 Council Avenue, Wheatland,
Pennsylvania 16161 or P.O. Box 524, in West Middlesex, Pennsylvania
16159.
The property proposed to be sold either appears to be validly
encumbered by the liens identified, or alternatively, the
Respondents identified are being notified of the proposed sale in
order to divest and transfer any potential lien or claim they may
have to the subject property.
The Debtor believes that the offer of $11,750 for the property is
fair and should be accepted. It proposes that the encumbrances and
other claims identified be divested and transferred to the proceeds
of sale.
The Debtor also proposes that the funds created by the sale be
subject to the prior payment of all administrative costs and
expenses allowed by the Court, including, but not limited to the
filing fee for the Motion to Sell Property of the Estate Free and
Clear of Liens in the amount of $188, as well as the actual
out-of-pocket costs for advertising in both The Clarion News and
the Erie County Legal Journal.
It also proposes payment of all usual and ordinary costs of sale,
including, but not limited its share of the appropriate transfer
and/or sales tax, if any, as well as payment of any and any fees
charged to the Debtor associated with transfer of the Certificate
of Title to the trailer. The remaining proceeds will be paid to
S&T Bank on account of its first lien on the property with a
current balance due of $11,635.
A copy of the Agreement is available at https://bit.ly/3c0V8r1 from
PacerMonitor.com free of charge.
About Ronna's Ruff Bark Trucking
Ronna's Ruff Bark Trucking, Inc., is a privately held company in
the skidding logs business.
Ronna's Ruff Bark Trucking, based in Shippenville, Pa., filed a
Chapter 11 petition (Bankr. W.D. Pa. Case No. 19-11167) on Nov.
25,
2019.
In the petition signed by Erick Merryman, owner, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities.
The Honorable Thomas P. Agresti is the presiding judge. Michael S.
JanJanin, Esq., at Quinn Buseck Leemhuis Toohey & Kroto, Inc.,
serves as bankruptcy counsel. No committee, examiner or trustee
has
been appointed in the case.
RS IVY HOLDCO: S&P Assigns 'BB-' ICR; Outlook Stable
----------------------------------------------------
S&P Global Ratings assigned RS Ivy Holdco Inc. a 'BB-' issuer
credit rating, reflecting its view of ITT Holdings LLC's (IMTT)
operations and the financial policy controlled by financial sponsor
Riverstone Holdings.
S&P also assigned its 'B' rating to the senior secured term loan,
with a recovery rating of '6'.
In a related rating action, S&P lowered its rating on IMTT's senior
unsecured debt to 'BB-' from 'BB' to equalize it with the rating
agency's issuer credit rating on RS Ivy, given the recovery score
of '3'. S&P now views IMTT as a core member of the new RS Ivy
group.
The stable outlook reflects S&P's expectation of debt to EBITDA
over 6x for the next few years, while utilization remains in the
91%-93% range and contracts are renewed and extended as they
mature.
RS Ivy Holdco Inc., a newly formed holding company controlled by
Riverstone Holdings, has purchased Macquarie Terminal Holdings LLC
and its subsidiary ITT Holdings LLC (IMTT) from Macquarie
Infrastructure Corp. for about $2.68 billion, including the
assumption of about $1.1 billion in debt.
RS Ivy issued a $500 million senior secured term loan to partially
finance the acquisition.
S&P said, "We expect RS Ivy to maintain high leverage over the next
few years. We consider Riverstone a financial sponsor and we
believe financial sponsors are more likely to increase leverage to
enhance financial returns. Our forward-looking adjusted debt to
EBITDA for RS Ivy is in the 6x–6.5x range for the next few years,
after consolidating the new holding company's secured term loan
with IMTT's current capital structure. IMTT will be the only
operating subsidiary in the new group, so our cash flow projections
and business risk analysis will reflect our view of IMTT's
operations."
The new term loan has mandatory amortization and an excess cash
flow sweep. This is a credit positive compared to the peer group,
given that it will help the company reduce debt over time.
Although its S&P Global Ratings-adjusted leverage at close is
around 6.5x, S&P thinks leverage will decrease gradually given
these structural debt paydown mechanisms, combined with EBITDA
growth from expansion projects coming online. Under its base-case
assumptions, S&P thinks adjusted leverage will decline towards 6x
over the next few years. The company has the option to prioritize
growth spending over the cash sweep, but the company must sweep
cash in order to make sponsor distributions.
IMTT is the largest pure-play bulk liquid storage provider in the
U.S. and has geographic and commodity diversification. The company,
with about 45 million barrels (mmbbls) of total storage capacity,
has strong market share in both the New York Harbor and lower
Mississippi River regions. The two areas account for roughly 75% of
capacity and cash flows while the remaining terminals are spread
across the U.S. and Canada. There is also good diversification
among products that it stores, with exposure to heavy products
(such as crude and residual oils), distillates, chemicals,
gasoline, and other liquids. The diverse customer base is a credit
positive as well, with the top 20 customers contributing about 65%
of revenues, mitigating exposure to the idiosyncratic risks of its
customers.
The contract profile is short-dated compared to peers, but benefits
from a fixed-fee structure and firm commitments with
investment-grade counterparties.
S&P said, "While the average remaining contract tenure of about 1.7
years detracts from the credit profile, we expect contract length
to increase as growth projects come online over the next few years.
About 80% of cash flows are derived from fixed-fee contracts and
the firm capacity reservations that mitigate volumetric risk and
ultimately contribute to a stable EBITDA base. We also think the
long-term relationships with investment-grade counterparties and a
record of extending and renewing expiring contracts mitigates
counterparty risk." About 80% of customers are investment-grade
companies. While contracts are short to medium term in nature, many
customer relationships span over 20 years."
"We expect IMTT's utilization will be in the low-90% area. The
company's utilization has been somewhat volatile over the last few
years in the 85%-95% range. In 2018 and 2019, utilization dropped
to the mid-80% area due to shifting fuel regulations, which was
followed by a significant repurposing effort. In 2020, utilization
climbed largely as a result of market contango for various energy
commodities. Although utilization is now in the 95% area, we expect
utilization will stabilize around 92% over the next few years,
which we consider a normal run-rate level of utilization for a bulk
liquid storage company."
"We consolidate IMTT to assess RS Ivy's financial risk. Given that
IMTT will be the only operating subsidiary, we expect that the
issuer credit ratings on IMTT and RS Ivy will be the same going
forward."
"The stable outlook reflects our view that RS Ivy will maintain
consolidated leverage in the 6x–6.5x range over the next few
years, gradually delevering over time. We assume under our base
case that IMTT will maintain utilization in the low-90% area while
expiring contracts are renewed and extended at market prices."
"We could consider a negative rating action if the company's S&P
Global Ratings-adjusted consolidated leverage remained above 6.5x
in our forecast for an extended period. This could result from a
material fall in utilization or market rates, a deterioration in
demand for the company's services such that contracts are unable to
be renewed, or an increase in the sponsor's leverage to pay for
distributions or growth capital without an offsetting increase in
operating cash flows."
"While unlikely at this time, we could consider a positive rating
action if RS Ivy reduces debt such that adjusted consolidated debt
to EBITDA were sustained below 5x in our forecast." This would
likely occur if the company generated free cash flow and the
financial sponsor prioritized debt repayment before equity
distributions and growth spending. Any upgrade would be dependent
on a view that the sponsor won't releverage the company and cash
flow stability won't materially change."
SELIM'S DOENER: Seeks to Use Cash Collateral
--------------------------------------------
Selim's Doener Kebap House LP asks the U.S. Bankruptcy Court for
the Northern District of Texas, Dallas Division, to authorize the
use of cash collateral for payroll and general operating expenses.
The Debtor continues to manage and operate its seasoned meat and
restaurant equipment supply business as Debtor-In-Possession
pursuant to sections 1107 and 1108 of the Bankruptcy Code.
Rapid Finance currently asserts a priority lien position on the
Debtor's accounts receivable. The Debtor says Rapid Finance is
incorrect in its assertion. A search in the Texas Secretary of
State shows Rapid Finance is in a junior position. Priority
positions are held by Bank of America, N.A. and Crown Equipment
Corporation.
No hearing will be conducted on the motion unless a written
objection or request for hearing is filed with the US Bankruptcy
Clerk within 21 days from the date of the filing of the motion.
A copy of the motion is available at https://bit.ly/2Ye0VBi from
PacerMonitor.com.
About Selim's Doener Kebap House LP
Selim's Doener Kebap House LP filed a voluntary petition for relief
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case
No. Case 20-33015) on December 10, 2020. In the petition signed by
Sevtap Cevirgen, vice president, the Debtor estimated between
$100,001 to $500,000 in both assets and liabilities.
Robert C. Lane, Esq., at Lane Law Firm PLLC represents the Debtor
as counsel.
No creditors' committee has been appointed in this case by the
United States Trustee.
SEMILEDS CORP: Receives Noncompliance Notice from Nasdaq
--------------------------------------------------------
SemiLEDs Corporation received a notice on Jan. 19, 2021, from The
NASDAQ Stock Market indicating that the Company does not meet the
minimum of $2,500,000 in stockholders' equity required by Listing
Rule 5550(b)(1) for continued listing. The Company also does not
meet the alternatives of market value of listed securities or net
income from continuing operations. Under the listing rule, the
Company has 45 calendar days to submit a plan to regain compliance.
If the plan is accepted by NASDAQ Stock Market, an extension of up
to 180 calendar days from Jan. 19, 2021 will be granted.
About SemiLEDs
Headquartered in Miao-Li County, Taiwan, R.O.C., SemiLEDs --
http://www.semileds.com-- develops and manufactures LED chips and
LED components for general lighting applications, including street
lights and commercial, industrial, system and residential lighting,
along with specialty industrial applications such as ultraviolet
(UV) curing, medical/cosmetic, counterfeit detection, horticulture,
architectural lighting and entertainment lighting.
SemiLEDs reported a net loss of $547,000 for the year ended Aug.
31, 2020, compared to a net loss of $3.56 million for the year
ended Aug. 31, 2019. As of Nov. 30, 2020, the Company had $13.93
million in total assets, $12.09 million in total liabilities, and
$1.84 million in total equity.
KCCW Accountancy Corp., in Diamond Bar, California, the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Nov. 17, 2020, citing that the Company incurred
recurring losses from operations and has an accumulated deficit,
which raises substantial doubt about its ability to continue as a
going concern.
SILVER LAKES: Has Until April 30 to File Plan & Disclosures
-----------------------------------------------------------
Judge Mark S. Wallace has entered a scheduling order requiring
Silver Lakes Resort Lodge Interval Owners Association to file a
plan and disclosure statement on or before April 30, 2021 and
obtain confirmation of the Plan before July 31, 2021.
An updated Status Report is due June 30, 2021. The next status
conference is set for July 13, 2021 at 9:00 a.m.
About Silver Lakes Resort
Lodge Interval Owners Association
Silver Lakes Resort Lodge Interval Owners Association --
https://www.innatsilverlakes.com/ -- is an association of owners of
The Inn at Silver Lakes, a resort in Southern California that is
affiliated with RCI and Interval International.
Silver Lakes Resort Lodge Interval Owners Association sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Case No. 19-16352) on July 20, 2019. In the petition signed
by
Edgar A. Darden, V.P. & chief restructuring officer, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities.
The case is assigned to Judge Mark S. Wallace.
Teresa A. Blasberg, Esq., at BLASBERG & ASSOCIATES, represents the
Debtor.
SOTERA HEALTH: S&P Affirms 'B+' Senior Secured Debt Rating
----------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issue-level rating on Sotera
Health Holdings LLC's senior secured debt. S&P's '3' recovery
rating remained unchanged, indicating its expectation that lenders
would receive meaningful (50%-70%; rounded estimate: 50%) recovery
in the event of a payment default.
Sotera recently announced the repricing of its $1.76 billion
first-lien term loan and the upsizing of its revolver to $347.5
million from $190 million. The maturity dates for its revolver and
repriced term loan remain unchanged at December 2024 and December
2026, respectively.
S&P's 'B+' issuer credit rating and positive outlook on Sotera
reflect its expectation that the company will increase its revenue
at a high-single-digit percent rate, maintain very strong EBITDA
margins, and generate significant free cash flow, which will
improve its leverage materially below 5x in the next 12 months.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- The company's capital structure comprises a $347.5 million
revolving credit facility (assumed 85% drawn at default), a $2.12
billion first-lien term loan ($1.76 billion outstanding), and $100
million of first-lien notes (privately placed; unrated).
-- S&P's hypothetical default scenario contemplates a default
occurring in 2025 due to operational, logistical, legal, or
regulatory (environmental) challenges.
-- S&P values the company on a going-concern basis using a 5.5x
multiple of the rating agency's projected emergence EBITDA. This
multiple is consistent with the multiples S&P uses for similar
companies.
Simulated default assumptions
-- Year of default: 2025
-- EBITDA at emergence: $232 million
-- EBITDA multiple: 5.5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $1.2
billion.
-- Valuation split (obligors/nonobligors): 60%/40%
-- Collateral value available to first-lien creditors: $1.04
billion
-- Secured first-lien debt claims: $2.22 billion
-- Recovery expectations: 50%-70% (rounded estimate: 50%)
Note: All debt amounts include six months of prepetition interest.
Collateral value equals asset pledge from obligors after priority
claims plus equity pledge from nonobligors after nonobligor debt.
SOUTHERN CLEARING & GRINDING: Granted Use of Cash Collateral
------------------------------------------------------------
Judge James P. Smith of the U.S. Bankruptcy Court for the Middle
District of Georgia, Macon Division, has authorized Southern
Clearing & Grinding Inc. to use cash collateral and provide
adequate protection on a final basis.
An immediate and ongoing need exists for the Debtor to use Cash
Collateral to continue the operations of the business as a
debtor-in-possession under Chapter 11 of the Bankruptcy Code, to
preserve the value of Debtor's assets as a "going concern," and to
avoid disruption to operations.
To consolidate a variety of debt, the Debtor borrowed $3,569,500
from Synovus Bank as evidenced by a U.S. Small Business
Administration Note dated September 27, 2019. The current balance
of the Synovus SBA Note is $3,295,283.24. The Synovus SBA Note
matures in eight years. The amount of the monthly installment
payment is currently $48,533.68. Payments are current under the
Synovus SBA Note. To secure repayment of the Synovus SBA Note, the
Debtor granted to Synovus a Security Agreement dated September 27,
2019 and a UCC Financing Statement filed and recorded September 30,
2019 with the Upson County Clerk of Superior Court granting Synovus
Bank a blanket lien on all of the Debtor's assets including but not
limited to all accounts and accounts receivable.
The Debtor entered into separate merchant cash advance financing
agreements with Ascentium, Channel Partners Capital, LLC, Everest
Business Funding, Everyday Funding Group, Forward Financing LLC,
Fox Capital Group, Inc., and On Deck Capital, Inc. All of the
merchant cash advance agreements purport to grant interests in the
Debtor's cash and accounts receivable and at least some of the
Merchant Cash Advance Creditors may have filed UCC Financing
Statements.
At this stage the order of secured priority of the Merchant Cash
Advance Creditors is not clear. All claims of the Merchant Cash
Advance Creditors are subordinate to the Synovus SBA security
interest.
The Debtor estimates that the fair market value of the collateral
as of the Petition Date are:
Equipment $3,174,250.00
Accounts Receivable $267,325.71
Cash in the bank $61,857.72
-------------
Total $3,503,433.43
As adequate protection of its interests, pursuant to Bankruptcy
Code sections 361 and 363(e), each of Ascentium et al. is granted a
replacement lien in the Debtor's property of the kind and in the
priority as Ascentium et al.'s respective liens may have attached
to the Debtor's property as of the Petition Date. Ascentium et al.
may file claims pursuant to sections 503(b) and 507(b) of the
Bankruptcy Code if they allege that use of Cash Collateral results
in diminution of their interest in Cash Collateral as of the
Petition Date. In addition, the Debtor will continue to make the
monthly installment payment to Synovus Bank which is currently
$48,533.68.
Ascentium et al. may be reached at:
Ascentium
11171 Sun Center Drive 200A
Rancho Cordova, CA 95670
Email: NancyZuroinskiiiAscentiumCapital.com
Channel Partners Capital, LLC
Attn: Jill Fleck, Manager
11100 Wayzata Blvd Ste 305
Hopkins, MN 55305-5537
Fax: (763) 592-8297
Everest Business Funding
Katerine Chirino, Account Manager
8200 NW 52nd Ter Suite 200
Miami, FL 33166
Email: isosupport@ev-bf.com
Everyday Funding Group
132 32nd Street, Suite 316
Brooklyn, NY 11232
Email: jmillergmilnmil.com
Forward Financing, LLC
c/o Lauren Hatch, counsel
53 State Street, Floor 20
Boston, MA 02109
Email: lhatch@forwardfinancing.com
Fox Capital Group, Inc.
1979 Marcus Avenue, Suite 210
New Hyde Park, NY 11042
Email: steve@foxbusinessfunding.com
On Deck Capital, Inc.
c/o Vincent Aubrey, Esq.
Aubrey Thrasher LLC
12 Powder Springs Street; Suite 240
Marietta, GA 30064
Email: jross@aubreyfirm.com
vaubrey@aubreyfirm.com
Synovus Bank
c/o Lynn L. Carroll, Esq.
Golder Law, LLC
101 Village Parkway
Building 1, Suite 400
Marietta, GA 30067
Email: lcarroll@golderlawfirm.com
A copy of the order and the Debtor's operating projections through
December 2021 is available at https://bit.ly/3sNAznW from
PacerMonitor.com.
About Southern Clearing & Grinding
Southern Clearing & Grinding, Inc. sought protection under Chapter
11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No. 20-51567) on
Dec. 10, 2020. At the time of the filing, the Debtor disclosed
between $1 million and $10 million in both assets and liabilities.
Judge James P. Smith oversees the case. Paul Reece Marr, P.C. is
the Debtor's legal counsel.
SOUTHERN FOODS: Selling Honolulu Property to Twenty Lake for $23.9M
-------------------------------------------------------------------
Southern Foods Group, LLC and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of Texas to authorize
the sale of the real estate located in Honolulu, Hawaii, to Twenty
Lake Management, LLC for $23.9 million pursuant to the Purchase
Agreement (with the amendment thereto).
A telephonic hearing on the Motion at (832) 917-1510 is set for
Feb. 23, 2021, at 10:00 a.m. (CDT).
The Debtors began the process of winding-down their estates. This
has entailed, among other things, the marketing and sale of all
remaining assets, including those individual real estate parcels
and closed facilities originally marketed, but not sold, in
conjunction with the sale of substantially all assets, e.g. Hayward
Property and the Honolulu Property, as well as the remaining owned
equipment and personal property.
On July 10, 2020, the Debtors filed the Emergency Motion of Debtors
for Entry of an Order (A) Authorizing the Sale of the Debtors'
Hayward Property to DPIF3 Acquisition Co LLC Free and Clear of All
Claims, Liens, Interests, and Encumbrances, (B) Authorizing the
Debtors to Enter into and Perform Their Obligations Under the
Purchase Agreement and Related Documents, and (C) Granting Related
Relief ("Hayward Property Sale Motion") asking approval of a sale
of the real estate located in Hayward, California. On July 22,
2020, after a hearing on the Hayward Property Sale Motion, the
Court entered an order approving the Hayward Property Sale
Transaction.
Following the sale of the Hayward Property, the Honolulu Property
is the Debtors' largest and most valuable remaining unsold asset.
With the assistance of Cushman & Wakefield PLC and their other
advisors, the Debtors began the re-marketing process for the
Honolulu Property immediately following confirmation that the IRG
Sale Transaction would not be consummated.
In light of the COVID-19 pandemic and related macroeconomic
disruptions, the Debtors and their advisors determined that an
expedient sale might not ensure realization of the greatest value
possible for the Honolulu Property, and spent the next months,
pursuing the re-marketing process for the Honolulu Property on a
stand-alone basis. The Debtors (in consultation with the
Committee) narrowed the list of bidders and, in late October 2020,
invited three of them to submit best and final offers.
The Debtors received Final Offers from two of those parties and,
after careful review of the Final Offers by the Debtors and their
advisors, as well as the advisors to the Committee, the Debtors (in
consultation with the Committee) determined that the Final Offer
submitted by the Buyer for a total consideration of $23.9 million
is the highest and otherwise best offer between the Final Offers.
For these reasons, the Debtors respectfully ask the Court enters
the Proposed Order and approves the Honolulu Property Sale pursuant
to the Purchase Agreement. They ask authority to sell the Honolulu
Property to the Buyer free and clear of any and all liens, claims,
interests, and other encumbrances, with any such liens, claims,
interests, and encumbrances attaching to the proceeds of the
applicable sale.
The Debtors are asking approval of the Honolulu Property Sale and
authority to consummate the transactions contemplated by the
Purchase Agreement for the purpose of enhancing the economic value
of the Debtors' estates. Prompt approval of the Honolulu Property
Sale is necessary to avoid the risk of disruption or delay in such
sale that would risk a very substantial cash inflow to the Debtors'
estates. For the foregoing reasons, a strong business
justification exists for approving the Honolulu Property Sale and
related relief sought.
Finally, the relief that the Debtors ask is necessary for them to
ensure consummation of the Purchase Agreement to maximize the value
of their estates and recoveries for their economic stakeholders.
Accordingly, they respectfully ask that the Court waives the 14-day
stay imposed by Bankruptcy Rule 6004(h), as the exigent nature of
the relief sought justifies immediate relief.
About Southern Foods Group, LLC
Southern Foods Group, LLC, d/b/a Dean Foods, is a food and
beverage
company and a processor and direct-to-store distributor of fresh
fluid milk and other dairy and dairy case products in the United
States.
The Company and its 40+ affiliates filed for bankruptcy protection
on Nov. 12, 2019 (Bankr. S.D. Texas, Lead Case No. 19-36313). The
petitions were signed by Gary Rahlfs, senior vice president and
chief financial officer. Judge David Jones presides over the
cases.
The Debtors posted estimated assets and liabilities of $1 billion
to $10 billion.
David Polk & Wardell LLP serves as general bankruptcy counsel to
the Debtors, and Norton Rose Fulbright US LLP serves as local
counsel. Alvarez Marsal is financial advisor to the Debtors,
Evercore Group LLC is investment banker, and Epiq Corporate
Restructuring LLC is notice and claims agent.
SPI ENERGY: Unit to Collaborate with Icona on E-Vehicle Designs
---------------------------------------------------------------
SPI Energy Ltd.'s subsidiary EdisonFuture and automotive design
company Icona Design announced the beginning of a collaboration to
design a range of next generation all-electric vehicles for both
passenger and commercial applications. The passenger and
commercial vehicles will be manufactured and sold by EdisonFuture
and its Phoenix Motorcars subsidiary.
Under this collaboration, Icona will design a host of new products
including advanced pickup trucks and last-mile delivery vans. The
designs and prototypes will incorporate Icona and SPI Energy's
vision for human-centered future transportation and revolutionize
how customers and vehicles interact.
The collaboration aims to build a joint common strategy between
EdisonFuture and Icona to cover a full range of all-electric
vehicles, while drawing from Icona's experience in designing
various cutting-edge products including the autonomous minibus and
all-electric car/crossover platform.
"Icona's vision of the future of transportation is oriented to the
latest technologies. We are proud to be able to cooperate with
EdisionFuture," said Tersio Gigi Gaudio, chairman and CEO of
Icona.
The new products, to be showcased at major 2021 auto shows in the
US, will incorporate various innovations including use of
lightweight materials, solar paneled surfaces to charge the
batteries and advanced electric drivetrain architecture that
focuses on efficiency.
"Our vision for EdisionFuture and Phoenix Motorcars is to be
leaders in sustainable transportation with focus on energy
efficiency and innovative design. We are pleased to be
collaborating with Icona Design to bring this vision to reality,"
stated Xiaofeng Peng, chairman and CEO of SPI Energy.
About SPI Energy Co., Ltd.
SPI Energy -- http://www.spigroups.com-- is a global provider of
photovoltaic solutions for business, residential, government and
utility customers, and investors. The Company develops solar PV
projects that are either sold to third party operators or owned and
operated by the Company for selling of electricity to the grid in
multiple countries in Asia, North America and Europe. The
Company's subsidiary in Australia primarily sells solar PV
components to retail customers and solar project developers. The
Company has its operating headquarter in Hong Kong and its U.S.
office in Santa Clara, California. The Company maintains global
operations in Asia, Europe, North America, and Australia.
SPI Energy reported a net loss attributable to shareholders of the
Company of $15.26 million for the year ended Dec. 31, 2019,
compared to a net loss attributable to shareholders of the Company
of $12.28 million for the year ended Dec. 31, 2018.
Marcum Bernstein & Pinchuk LLP, in Beijing China, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated June 29, 2020, citing that the Company has a
significant working capital deficiency, has incurred significant
losses and needs to raise additional funds to meet its obligations
and sustain its operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
SUPERIOR ENERGY: 8.5% of New Stock to Be Issued in Rights Offering
------------------------------------------------------------------
Superior Energy Services, Inc., and its Affiliate Debtors on Jan.
19, 2021, won an order confirming their First Amended Joint
Prepackaged Plan of Reorganization.
Pursuant to the Plan and the Equity Rights Offering Procedures, the
Debtors are permitted, with the consent of the Required Consenting
Noteholders, to commence the Equity Rights Offering to fund the
Cash Payout. The Required Consenting Noteholders have consented to
the Equity Rights Offering, which will commence on Jan. 20, 2021
and will terminate on Jan. 29, 2021 at 5:00 p.m. (prevailing
Central Time), or such later dates as determined by the Debtors and
acceptable to the Ad Hoc Noteholder Group.
According to a Jan. 20 notice by the Debtors, as of the cash
opt-out deadline of Jan. 15, 2021, Prepetition Noteholders holding
$1,189,786,000 principal amount of the Prepetition Notes elected to
opt-out of the Cash Payout, and, as a result, Prepetition
Noteholders holding $110,214,000 principal amount of the
Prepetition Notes shall receive the Cash Payout.
Accordingly, approximately 8.5% of the New Common Stock will be
issued pursuant to the Equity Rights Offering (the "Equity Rights
Offering Shares"). Each Accredited Cash Opt-Out Noteholder is
entitled to subscribe for its pro rata share of Equity Rights
Offering Shares, which will be issued at $1.31 per share. If you
have any questions regarding this notice or the Equity Rights
Offering Procedures, please contact the Voting and Claims Agent
by calling the Debtors' restructuring hotline at (888) 802-7207
(U.S./Canada) or (781) 575-2107 (international) or via E-mail at
SuperiorEnergyInfo@kccllc.com (please reference "Superior" in the
subject line).
Counsel for the Debtors:
Timothy A. ("Tad") Davidson II
Ashley L. Harper
Philip M. Guffy
HUNTON ANDREWS KURTH LLP
600 Travis Street, Suite 4200
Houston, Texas 77002
Telephone: 713-220-4200
Facsimile: 713-220-4285
- and -
George A. Davis
Keith A. Simon
George Klidonas
LATHAM & WATKINS LLP
885 Third Avenue
New York, New York 10022
Telephone: (212) 906-1200
Facsimile: (212) 751-4864
About Superior Energy Services
Headquartered in Houston, Texas, Superior Energy Services (SPN)
serves the drilling, completion and production-related needs of oil
and gas companies worldwide through a diversified portfolio of
specialized oilfield services and equipment. Visit
htttp://www.superiorenergy.com/ for more information.
As of June 30, 2020, Superior Energy Services had $1.73 billion in
total assets, $222.9 million in total current liabilities, $1.28
billion in long-term debt, $135.7 million in decommissioning
liabilities, $54.09 million in operating lease liabilities, $2.53
million in deferred income taxes, $125.74 million in other
long-term liabilities, and a total stockholders' deficit of $95.13
million.
On Dec. 7, 2020, Superior Energy and its affiliates sought Chapter
11 protection (Bankr. S.D. Tex. Lead Case No. 20-35812) to seek
approval of a prepackaged Chapter 11 plan of reorganization.
Westervelt T. Ballard, Jr., authorized signatory, signed the
petitions.
At the time of the filing, Superior Energy disclosed $884,723 in
assets and $1,383,151,024 in liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Latham & Watkins, LLP and Hunton Andrews Kurth,
LLP as their legal counsel; Ducera Partners, LLC and Johnson Rice &
Company, LLC as investment banker and financial advisor; Alvarez &
Marsal North America, LLC as restructuring advisor; and Ernst &
Young, LLP as tax advisor. Kurtzman Carson Consultants, LLC is the
notice, claims and balloting agent.
Davis Polk & Wardwell LLP and Porter Hedges LLP serve as legal
counsel for an ad hoc group of noteholders. Evercore LLC is the
noteholders' financial advisor.
FTI Consulting, Inc. serves as financial advisor for the agent for
the Debtors' secured asset-based revolving credit facility, with
Simpson Thacher & Bartlett LLP acting as legal counsel.
TALBOTS INC: S&P Downgrades ICR to 'CCC-'; Outlook Negative
-----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
specialty apparel retailer The Talbots Inc. to 'CCC-' from 'CCC+'.
At the same time, S&P lowered its issue-level rating on the
company's term loan facility to 'CCC-' from 'CCC+'. The '3'
recovery rating remains unchanged, indicating S&P's expectation for
meaningful (50%-70%; rounded estimate: 50%) recovery in the event
of a default.
S&P said, "The negative outlook reflects our view that Talbots may
pursue a restructuring or distressed exchange in the next six
months."
Deflated customer demand amid the coronavirus pandemic continues to
pressure the company's liquidity position and S&P believes a
near-term shortfall is possible. The company has taken aggressive
action to preserve cash since the beginning of the pandemic,
including delaying payables, withholding rent, and slashing its
payroll and other expenses.
S&P said, "Despite these steps, we expect its cash balance to
dwindle in the near term. In our view, Talbots will continue to
contend with depressed sales over the next several months along
with sustained margin pressure. Moreover, as its sales and
profitability begin to improve later in the year, the accelerated
unwinding of its working capital could further pressure its cash
flow. Therefore, we believe Talbots' capital structure is
unsustainable and its ability to meet its financial obligations is
in jeopardy. Based on our forecast for deteriorating cash and the
sizable quarterly interest payments of nearly $10 million due in
March and June, we believe the company could look to restructure
over the next six months."
The company's asset-based lending (ABL) facility and term loan are
due next year, which leaves little time for its business to recover
before it must undertake a refinancing. Talbots' $185 million ABL
matures in October 2022 and its term loan (about $350 million
outstanding) matures in November 2022.
S&P said, "We believe the company will face challenges in pursuing
a refinancing if it is unable to demonstrate sustainable cash
generation. The prospects for an at-par refinancing appear
increasingly dim given its current depressed sales performance amid
the extended COVID-19 pandemic. While Talbot's customers continue
to engage with the brand digitally, their purchase intent remains
weak, which may indicate that its demand will improve following the
widespread rollout of coronavirus vaccinations. Nevertheless, our
lack of visibility into post-pandemic consumer behavior and
shopping habits leads us to anticipate heightened refinancing
risk."
Performance improvement depends on developments related to new
COVID-19 infections and vaccine distribution. Talbots' core
customers are 55 years and older, which is a demographic that is
generally more susceptible to COVID-19 related hospitalizations and
serious long-term effects. Consequently, the company has
experienced a disproportionate decline in its sales as its
customers avoid shopping and attending events that necessitate new
attire. Specifically, its revenue declined by about 40% over the
first three quarters of fiscal year 2020 and--based on the rising
U.S. COVID-19 infection rates in the fourth quarter of 2020--S&P
anticipates the company's sales will continue to decline by the
double-digit percent area. S&P believes improving sales are highly
dependent on the successful and broad distribution of effective
COVID-19 vaccines.
As vaccine rollouts in several countries continue, S&P Global
Ratings believes there remains a high degree of uncertainty about
the evolution of the coronavirus pandemic and its economic effects.
Widespread immunization, which certain countries might achieve by
midyear, will help pave the way for a return to more normal levels
of social and economic activity.
S&P said, "We use this assumption about vaccine timing in assessing
the economic and credit implications associated with the pandemic.
As the situation evolves, we will update our assumptions and
estimates accordingly."
Environmental, social, and governance (ESG) factors for this credit
rating change:
-- Health and safety
S&P said, "The negative outlook on Talbots reflects our view that
its liquidity position is extremely limited and a restructuring or
payment default is likely in the next six months. Our outlook also
incorporates the looming maturities of the company's term loan and
ABL facilities."
"We could lower our rating on Talbots if it announces an interest
or principal payment default or a restructuring that will cause its
lenders to receive less than they were originally promised under
its debt facilities."
"We could raise our rating on Talbots if we believe an interest or
principal payment default, or restructuring are unlikely in the
next six months."
TALCOTT RESOLUTION: Moody's Affirms Ba3 Rating on Sr. Unsec. Debt
-----------------------------------------------------------------
Moody's Investors Service has affirmed the Baa3 insurance financial
strength ratings of Talcott Resolution Life Insurance Company (TL)
and Talcott Resolution Life & Annuity Insurance Company (TLA), as
well as the Ba3 senior unsecured debt rating of Talcott Resolution
Life, Inc. The affirmation follows the company's announcement that
Sixth Street has entered into a definitive agreement to acquire
Talcott from its existing consortium of investors. The outlook of
the Talcott entities is stable. Sixth Street Specialty Lending,
Inc. (issuer rating Baa3 negative), a business development company,
is an affiliate of Sixth Street.
Sixth Street is a global investment firm with over $50 billion in
assets under management. It pursues investments in the insurance
sector through its Sixth Street TAO platform, which consists of $25
billion in flexible, long-dated capital. Talcott's existing
consortium of investors is led by Cornell Capital LLC, Atlas
Merchant Capital LLC, TRB Advisors LP, Global Atlantic Financial
Group, Pine Brook, J. Safra Group, and Hartford Financial Services
Group, Inc. (senior debt Baa1 stable). The transaction is expected
to close in the second quarter of 2021, subject to regulatory
approvals and other customary closing conditions.
RATINGS RATIONALE
According to Moody's, the affirmation of Talcott's ratings reflects
expectations of continuity of management of the entities and
continued strong capitalization and financial flexibility. A
material change to Talcott's current strategy, which was not
contemplated in our rating action, could have an impact on
Talcott's credit profile.
Talcott has strong asset quality and prudent risk management.
However, it has significant exposure to earnings and capital
volatility from equity markets and must manage capital requirements
that are sensitive to policyholder behavior, equity market returns,
and interest rates.
Moody's believes that the coronavirus-driven economic disruption
and ultra-low interest rates will stress most aspects of life
insurers' financials, including those of Talcott. This includes
investments, reserves and capital adequacy. Most life insurers,
including Talcott, as noted, start with healthy capital and asset
quality to weather this storm over the near term, but these
conditions will weaken their creditworthiness if they persist.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The following factors could lead to an upgrade of Talcott's
ratings: 1) successful execution of growth strategy that enhances
business and financial profile; 2) further minimizing the
volatility associated with stress scenarios for the legacy block of
variable annuities; and 3) effective management of the inforce
business that results in consistent capital generation. Conversely,
factors that could lead to a downgrade include: 1) material
increase in volatility of total statutory capital, or unanticipated
decline in total statutory capital by 20% over a short period of
time; 2) unanticipated regulatory capital volatility and/or
sustained RBC ratio levels (company action level) fall below 350%;
3) financial leverage at Talcott above 15%.
The following ratings have been affirmed:
Talcott Resolution Life Insurance Company – long-term insurance
financial strength at Baa3; short-term insurance financial strength
at P-3;
Talcott Resolution Life & Annuity Insurance Company – long-term
insurance financial strength at Baa3;
Talcott Resolution Life, Inc. – senior unsecured debt at Ba3;
Hartford Life Institutional Funding – senior secured debt at
Baa3.
The outlook on Talcott and its affiliates remains stable.
The principal methodology used in these ratings was Life Insurers
Methodology published in November 2019.
As of September 30, 2020, Talcott Resolution Life Insurance Company
reported total assets of $90.1 billion and total capital and
surplus of $3.4 billion on a statutory basis.
TALK VENTURE: Unsecured Creditors Will Recover 1% in Plan
---------------------------------------------------------
Talk Venture Group, Inc., submitted an Amended Chapter 11 Plan and
a Disclosure Statement on Jan. 20, 2021.
The Debtor's online business is the Debtor's primary asset. The
asset is well managed and is generating positive cash flow. With
the availability of the vaccine and increase in E-commerce, the
Debtor believes that its business will remain steady and will
generate sufficient income to fund its reorganization plan.
The Plan proposes to treat claims and interests as follows:
* Class 1(A). Wells Fargo Bank, N.A. holds a claim secured by a
UCC-1 Financing Statement, with a claim amount of$l,018,019.89 as
of the Petition date. This class is impaired. Debtor proposes to
pay Wells Fargo $547,471.00 as a secured claim at $9,057.85 per
month for 60 months, with the first payment due on the Effective
Date. The remaining balance of $474,548.89 is treated as a general
unsecured claim in Class 2B.
* Class 1(B). Wells Fargo Bank has a claim secured by UCC-1
Financing Statement, with a claim amount of $229,408.33 as of the
Petition date. This class is impaired. Debtor proposes to pay Wells
Fargo $22,940.83 as a secured claim at $382.34 per month for 60
months, with the first payment due on the Effective Date. The
remaining balance of $206,467.50 is treated as a general unsecured
claim in Class 2B.
* Class 1(C). Banc of California has a claim secured by UCC-1
Financing Statement, with a claim amount of $1,706,874.42 as of the
Petition date. This class is impaired. Debtor proposes to pay Bane
of California $170,687.44 as a secured claim at $2,844.79 per month
for 60 months, with the first payment due on the Effective Date.
The remaining balance of $1,536,186.98 is treated as a general
unsecured claim in Class 2B.
* Class 1(D). Bane of California has a claim secured by UCC- 1
Financing Statement, with a claim amount of $87,155 as of the
Petition date. This class is impaired. Debtor proposes to pay Bane
of California $8,715.50 as a secured claim at $145.25 per month for
60 months, with the first payment due on the Effective Date. The
remaining balance of $78,439 is treated as a general unsecured
claim in Class 2B.
* Class 1(E). Aaron Knirr has a claim secured by UCC-1
Financing Statement, with a claim amount of $206,250 as of the
Petition date. This class is impaired. The Debtor proposes to pay
Aaron Knirr $20,625 as a secured claim at $343.75 per month for 60
months, with the first payment due on the Effective Date. The
remaining balance of $185,625 is treated as a general unsecured
claim in Class 2B.
* Class 1(F). American Express, N.A. holds a claim secured by a
UCC-1 Financing Statement, with a claim amount of $211,975 as of
the Petition Date. This class is impaired. American Express will
have an allowed secured claim of $21,197.50 to be paid over 60
months, with the first payment of $353.29 due on the Effective
Date, and continuing on the first day of each month thereafter for
a period of 59 months until the balance of the secured claim is
paid in full. America Express, N.A. agrees to be paid the $190,778
remainder due and owing to it as an unsecured creditor under the
Plan at the same rate and pro rata amounts as the other unsecured
creditors identified in Class 2B.
* Class 2 General Unsecured Claims. In the present case, the
Debtor estimates that there are approximately $4,588,613 in general
unsecured debts. This class is impaired. Holders of general
unsecured claims will receive their pro-rata share of $763.78 per
month for a total of $45,827 over the five-year period of the Plan.
The payments will start on the first day of the first month
following the month within which the Effective Date occurs. Based
on the proposed payments, the unsecured class will receive
approximately 1% of their claims.
* Class 3 Interest Holders. The Debtor's interest holder is
Paul Sc Won Kim who is the Debtor's President and 100% shareholder.
Mr. Kim will retain his equity interest in the Debtor.
The Debtor will fund the Amended Plan from the continued operation
of its online Amazon sales business.
A hearing on adequacy of Amended Disclosure Statement will be on
Feb. 10, 2021 at 10: 00 am in Courtroom 5B, 411 West Fourth Street,
Santa Ana, CA 92701-4593
A full-text copy of the Amended Disclosure Statement dated January
20, 2021, is available at https://bit.ly/3qHZXcU from
PacerMonitor.com at no charge.
Attorney for Debtor:
Micheal Jay Berger
Law Offices of Micheal Jay Berger
9454 Wilshire Blvd. 6th Floor
Beverly Hills, CA 90212-2929
Telephone: (310) 271-6223
Facsimile: (310) 271-9805
E-mail: Micheal.berger@bankruptcypower.com
About Talk Venture Group
Talk Venture Group, Inc., sells a variety of products, including
baby safety products, auto towing straps, security surveillance
cameras, and bicycling apparel and shoes. It currently and
historically generates income from selling various merchandise
through Amazon.com.
Talk Venture Group filed for Chapter 11 bankruptcy protection
(Bankr. C.D. Cal. Case No. 19-14893) on Dec. 19, 2019. In the
petition signed by Paul Se Won Kim, its president, the Debtor was
estimated to have under $500,000 in assets and under $10 million in
liabilities. The Hon. Theodor Albert oversees the case. The
Debtor is represented by Michael Jay Berger, Esq., at the Law
Offices of Michael Jay Berger.
TIMOTHY KYLE: Smith Debnam Represents Hanmi Bank, Riegelwood
------------------------------------------------------------
In the Chapter 11 cases of Timothy Kyle Ellis and Melody Roxann
Ellis, the law firm of Smith Debnam Narron Drake Saintsing & Myers,
LLP submitted a verified statement under Rule 2019 of the Federal
Rules of Bankruptcy Procedure, to disclose that it is representing
with these creditors:
Hanmi Bank
c/o Byron L. Saintsing
Smith Debnam Narron Drake Saintsing & Myers, LLP
PO Box 176010
Raleigh, NC 27619-6010
* Creditor holds Equipment Finance Agreement and Personal Guaranty
of Debtor Timothy K. Ellis, Individually and d/b/a TK Ellis
Trucking & Logging, together with a Settlement Agreement and
Mutual Release, all signed by Debtor Timothy K. Ellis,
Individually and doing business as TK Ellis Trucking & Logging.
The Equipment Finance Agreement and Personal Guaranty are
secured by certain Equipment known as one (1) used 2015 Tigercat
620E Dual Arch Skidder and related Equipment and a UCC recorded
by Hanmi Bank as to same.
* Principal amount: Principal balance of $102,000.00 with past due
arrearage of $5,253.93
* Time of Acquisition: June 13, 2017
Riegelwood Federal Credit Union
c/o John M. Sperati
Smith Debnam Narron Drake Saintsing & Myers, LLP
PO Box 176010
Raleigh, NC 27619-6010
* Nature of Claim 1: Money Loaned/Cross-Collateralized by trucks
below and secured by Riegelwood Shares
Account
* Principal amount: $8,019.60
* Time of Acquisition: June 2, 2020
* Nature of Claim 2: Purchase Money Loaned for 2015 Ford F-550
Crew Cab VIN# 1FD0W5HT3FEA45550
* Principal amount: $35,363.00
* Time of Acquisition: July 18, 2018
* Nature of Claim 3: Purchase Money Loaned for 2014 F-150 Supercab
XLT VIN# 1FTFX 1ET9EKD4 1505
* Principal amount: $5,431.41
* Time of Acquisition: September 2, 2016
The following are the facts and circumstances in connection with
this firm's employment by the companies named in the foregoing
paragraph:
This firm was retained by Hanmi Bank to represent its interests
in this case related to the Equipment Finance Agreement,
Personal Guaranty, and Settlement Agreement entered into with
Debtor Timothy K. Ellis, individually and doing business as TK
Ellis Trucking and Logging, on which there remains a balance to
be paid.
This firm was retained by Riegelwood Federal Credit Union to
represent their interests in this case related to purchase
money loans for two (2) vehicles and money loaned and cross-
collateralized by said vehicles and a shares account, on which
there remain balances to be paid.
This firm does not own, nor has it ever owned, any claim whatsoever
against the Debtors in this case nor any equity securities of the
Debtors.
Each entity or person listed above has consented to this joint
representation.
Counsel for Hanmi Bank can be reached at:
Byron L. Saintsing, Esq.
SMITH DEBNAM NARRON DRAKE
SAINTSING & MYERS, LLP
PO Box 176010
Raleigh, NC 27619-6010
Telephone: (919) 250-2000
E-mail: bsaintsing@smithdebnamlaw.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/2YdqFy2
The Chapter 11 case is In re Timothy Kyle Ellis And Melody Roxann
Ellis (Bankr. E.D.N.C. Case No. 20-03833-5-JNC).
TOTAL BODY: Unsecureds to Be Paid Monthly in Subchapter V Plan
--------------------------------------------------------------
Total Body Laser Center, LLC, has filed a Plan of Reorganization
under Chapter 11 of the Bankruptcy Code, Subchapter V, that
proposes to pay the creditors of Total Body from the net income
generated from the business operations.
According to the First Amended Plan of Reorganization dated Jan.
20, 2021, the Chapter 11 Debtor in Possession, Total Body, has
prepared an amended cash flow basis over the 60 months of the Plan
to show that there is sufficient income and cash flow to meet the
requirements of the Plan. The Debtor has been affected by the
COVID-19 pandemic due to loss of sales but has continued to operate
and cash flow with reduced staff. The Debtor does not plan on
operating a salon in the future but may have small amounts of
income for salon services generated from staff. The final Plan
payment is expected to be paid on or before March of 2026.
In the event of a consensual plan, the Plan proposes to pay the
non-priority unsecured claims an amount of $500 per month for the
1st through the 30th months. The payments to the non-priority
unsecured claims will increase to $1,000 per month from the 31st
though the 60th month. This will be distributed on a pro-rata
basis by the Debtor on a monthly basis to all the listed and filed
claims which are approved by the Court.
The liquidation analysis shows that there would be $3,500 available
for the unsecured creditor class upon a liquidation. There are no
priority creditors in the Chapter 11 case. The Debtor is proposing
more payments in the Chapter 11, Subsection V plan than would be
received in a liquidation.
A full-text copy of the First Amended Plan of Reorganization dated
Jan. 20, 2021, is available at https://bit.ly/3p7LJl7 from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Wade M. Pittman
Attorney No: 1090712
PITTMAN & PITTMAN LAW OFFICES, LLC
702 N Blackhawk Ave, Suite 101
Madison, WI 53705
Tel: (608) 233-4336
About Total Body Laser Center
Total Body Laser Center, LLC, is a medical grade skin care
specialist based in Madison, Wis., that offers tattoo removal, hair
removal, laser skin treatments, scar and stretch mark removal,
spider vein removal, and toenail fungus treatment. On the Web
https://www.totalbodylasermedspa.com/
Total Body Laser Center filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No. 20-11328) on
May 19, 2020. At the time of the filing, the Debtor disclosed
total assets of $138,150 and total liabilities of $1,026,300.
Judge Catherine J. Furay oversees the case. Pittman & Pittman Law
Offices, LLC, is the Debtor's legal counsel.
TUMBLEWEED TINY HOUSE: Court Approves Disclosure Statement
----------------------------------------------------------
Judge Kimberley H. Tyson has approved the Disclosure Statement of
Tumbleweed Tiny House Company, Inc., and set a hearing to consider
confirmation of the Debtor's Plan.
The hearing at which the Court will determine whether to confirm
the Plan will take place on Feb. 24, 2021 at 9:30 a.m. by video
conference.
The ballot must be received by 5:00 p.m. on Feb. 19, 2021 or it
will not be counted.
Objections to the confirmation of the Plan must be filed with the
Court and served upon counsel for the Debtor by 5:00 p.m. on Feb.
19, 2021.
Tumbleweed Tiny House Company filed an Amended Chapter 11 Plan and
a corresponding Disclosure Statement on Jan. 20, 2021.
The Plan provides:
* Class 1 Allowed Impaired Secured Claim of Janine Sagert, Claim
No. 22-1, totaling $150,000. The Reorganized Debtor will pay
Janine Sagert $150,000 with 8% interest over 7 years with payments
beginning the first full month following the Effective Date. Each
monthly payment will be due before the last day of each month.
This class is impaired.
* Class 2 Allowed Impaired Secured Claim of Redi Gunn 1, LLC
totaling $100,000. The Reorganized Debtor will pay Redi Gunn
$100,000 with 8% interest over 7 years with payments beginning the
first full month following the Effective Date. This class is
impaired.
* Class 3 Allowed Impaired Secured Claim of PIRS Capital, LLC,
Claim No. 26-1, totaling $323,326. The Debtor will transmit 3% of
all payments made by cash, check, electronic transfer, credit card
transactions or other form of monetary payments to Debtor in the
ordinary course of the Debtor's business for the payment of
Debtor's sale of goods until $323,326 is paid to PIRS. Such
payments will be made on a monthly basis by the last day of each
month with payments beginning the first full month following the
Effective Date. This class is impaired.
* Class 4 Allowed Impaired Unsecured Claim of Forward Financing,
LLC, totaling $85,000. Forward Financing is an allowed unsecured
creditor and its $85,000 claim will be treated under Class 10 of
the Plan. This class is impaired.
* Class 5 Allowed Impaired Secured Claim of Ford Motor Credit
Company, LLC, totaling $8,074. Under the Plan, the Debtor will
retain the 2014 Ford F-250 and satisfy the allowed secured claim of
Ford Motor Credit by curing any default under the prepetition
financing agreement on the Effective Date (this amount is estimated
to be approximately $5,000) and resuming the normal monthly
payments due under the financing agreement. This class is
impaired.
* Class 6 Allowed Impaired Priority Claims Under 11 U.S.C. Sec.
507(a)(7) – Completed Houses. Class 6 is comprised of creditors
with whom the Debtor had prepetition executory contracts and who
would have held priority claims under Section 507(a)(7) of the
Bankruptcy Code but for the fact that the Debtor satisfied its
obligations under the sales contracts at issue postpetition and is
assuming their contracts under the Plan. This class is impaired.
* Class 7 Allowed Impaired Priority Claims Under 11 U.S.C. Sec.
507(a)(7) - Houses Not Yet Completed. Each creditor listed on the
Debtor's schedules as a priority claimant under 11 U.S.C. Sec.
507(a)(7), who is a party to an executory contract for which a home
has not yet been completed, which the Debtor intends to assume the
contracts. This class is impaired.
* Class 8 Allowed Impaired Priority Claims Under 11 U.S.C. Sec.
507(a)(7) - Rejected Sales Contracts. The Reorganized Debtor, at
its discretion, may satisfy or pay off any of the Class 8 Claims
any time after the Effective Date. This class is impaired.
* Class 9 Executory Contracts and Unexpired Leases. Any
unexpired leases or executory contracts not otherwise dealt with in
the Plan will be deemed rejected. Under the terms of any lease
agreements, in the event that a lease is rejected, the equipment or
property will be returned to the lessor, unless Debtor and the
lessor otherwise agree.
* Class 10 General Unsecured Claims. Allowed Class 10 Claims
will receive their pro rata share of the Net Profits Fund.
Distributions from the Net Profits Fund will continue for five
years following the Effective Date. Distributions to Class 10
claimants will not exceed the amount of the Allowed Unsecured Claim
plus interest calculated at 2.5% per annum. Distributions to Class
10 will be made annually on the anniversary of the Effective Date
and will begin in 2022.
A full-text copy of the Disclosure Statement dated Jan. 20, 2021,
is available at https://bit.ly/3o3v8xL from PacerMonitor.com at no
charge.
A full-text copy of the Order dated Jan. 20, 2021, is available at
https://bit.ly/3c3zimW from PacerMonitor.com at no charge.
Attorneys for the Debtor:
David V. Wadsworth
David J. Warner
WADSWORTH GARBER WARNER CONRARDY, P.C.
2580 W. Main St., Ste. 200
Littleton, CO 80120
Tel: (303) 296-1999
Fax: (303) 296-7600
About Tumbleweed Tiny House Company
Tumbleweed Tiny House Company, Inc., a manufacturer of tiny house
RVs, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Colo. Case No. 20-11564) on March 4, 2020. At the time
of the filing, the Debtor estimated assets of between $500,000 and
$1 million and liabilities of between $1 million and $10 million.
Judge Kimberley H. Tyson oversees the case. Wadsworth Garber
Warner Conrardy, P.C., is the Debtor's legal counsel. Stockman
Kast Ryan + Company is the accountant.
UFC HOLDINGS: S&P Rates New $2.453BB First-Lien Term Loan 'B'
-------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to the proposed first-lien term loan of $2.453
billion, to be issued by UFC Holdings LLC. The company will use all
proceeds from the debt issuance to repay the existing term loan,
and the new debt will mature in April 2026, the same as the
existing debt.
Because this is a refinancing transaction, it is mostly
leverage-neutral and does not impair recovery prospects for term
loan lenders.
S&P said, "Our issue-level rating assigned to the proposed term
loan is 'B', the same as the 'B' rating on the company's existing
first-lien term loan. The '3' recovery rating reflects our
expectation of meaningful (30% to 50%; rounded estimate: 55%)
recovery for term loan lenders in the event of a payment default.
The rounded estimate of recovery increased to 55% from 50% because
of principal amortization over time and our assumption of a
slightly lower interest rate on the new term loan, resulting in
modestly lower assumed debt claims in a hypothetical default."
"Based on UFC's reported operating results through the third
quarter of 2020 and the fact that the company produced 41 events in
2020, which is almost the same number as 42 in 2019, we believe the
company likely outperformed our previously published leverage
forecast. We estimate that net leverage is likely below 6x at the
end of 2020."
RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario contemplates a payment default
in 2024 due to a substantial decline in UFC's cash flow because of
a combination of factors. They could include an inability to meet
minimum event requirements related to the ESPN media right
agreements, poorly timed production costs and investments,
leveraging cash distributions to shareholders, a failure to retain
or recruit key performers, increased competition from new entrants
or alternative sports categories, and unsuccessful new business
ventures.
-- S&P assumes UFC would reorganize following a default and use an
emergence EBITDA multiple of 6.5x to value the company.
Simulated default assumptions
-- Year of default: 2024
-- EBITDA at emergence: $243 million
-- EBITDA multiple: 6.5x
-- Cash flow revolver: 85% drawn at default
Simplified waterfall
-- Net recovery value (after 5% administrative expense): $1.5
billion
-- Obligor/nonobligor valuation split: 100%/0%
-- Estimated secured commercial debtholder claims: $34 million
-- Estimated first-lien debt claims: $2.61 billion
-- Recovery range: 50%-70% (rounded estimate: 55%)
Note: All debt amounts include six months of prepetition interest.
US REAL ESTATE EQUITY: May Use Cash Collateral Thru Jan. 31
-----------------------------------------------------------
Judge Robert D. Berger of the U.S. Bankruptcy Court for the
District of Kansas has authorized Eric L. Johnson, the Chapter 11
Trustee of U.S. Real Estate Equity Builder, LLC and U.S. Real
Estate Equity Builder Dayton, LLC, to use cash collateral until
January 31, 2021.
The Trustee asserts that an immediate need exists for him to use
Cash Collateral in order to continue pay necessary and ordinary
business expenses. The Trustee says his inability to use the Cash
Collateral would immediately and irreparably harm the Debtors, the
bankruptcy estates, and their creditors.
As of the Petition Date, the Debtors were originally in possession
and/or control of cash and, since the Petition Date, has continued
business operations that generate cash. The Debtors also have
reduced and continue to reduce various assets of the bankruptcy
estate to cash including, without limitation, collections of
rents.
Various lenders assert a security interest in the Cash Collateral,
including Anchor, Lima One Capital, PS Funding, Winblad, USA
Regrowth Fund, LLC, Aloha LOC, Patch of Land, and Lending Home
Financial.
The Court says that, to the extent the Secured Creditors' liens in
postpetition rents prove inadequate to protect them from a
demonstrated diminution in value of collateral positions from the
Petition Date, the Secured Creditors are granted an administrative
expense claim under 11 U.S.C. section 503(b) with priority in
payment under 11 U.S.C. section 507(b).
A copy of the order is available at https://bit.ly/2Y5eQd4 from
PacerMonitor.com.
About US Real Estate Equity Builder
US Real Estate Equity Builder LLC is primarily engaged in renting
and leasing real estate properties.
US Real Estate Equity Builder and its affiliate, US Real Estate
Equity Builder Dayton, LLC, filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Lead Case
No. 20-21358) on Oct. 2, 2020. Judge Robert D. Berger oversees the
cases.
At the time of the filing, US Real Estate Equity Builder disclosed
$5,281,000 in assets and $13,985,020 in liabilities. US Real
Estate Equity Builder Dayton disclosed between $1 million and $10
million in both assets and liabilities.
George J. Thomas, Esq., at Phillips & Thomas LLC, is the Debtors'
legal counsel.
The Office of the U.S. Trustee has appointed an official committee
to represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee is represented by Sader Law Firm.
Eric L. Johnson has been appointed as the Chapter 11 trustee. He is
represented by Spencer Fane LLP.
VINE OIL: S&P Raises ICR to 'CCC+'; Outlook Negative
----------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Texas-based
oil and gas exploration and production (E&P) company Vine Oil & Gas
L.P. to 'CCC+' from 'CCC-'. The outlook is negative. S&P raised its
rating on the company's senior unsecured notes due April 2023 to
'CCC-' (recovery rating: '6') from 'C'.
S&P said, "The negative outlook on Vine reflects the possibility
that we could lower the rating if the company is unable to
refinance its 2023 debt maturity on favorable terms or its
liquidity position deteriorates."
"The upgrade reflects our view that the possibility of the company
defaulting within the next six months is now remote. We believe a
distressed debt exchange is now unlikely in the short term given
higher debt-trading levels (close to 0.85), and given Vine's
improved capital structure following the refinancing of its
super-priority loan and its RBL. The recent transactions have
materially improved the company's debt maturity profile: Vine
refinanced its super priority loan due November 2021 with a new
second lien term loan due December 2025 (unrated), and extended the
RBL from November 2021 to January 2023. We also forecast the
company will generate free cash flow in the $50 million to $100
million range annually over the next two years while maintaining
adequate credit measures, including funds from operations (FFO) to
debt of about 25% and debt to EBITDA of about 2.5x-3x under our
base-case scenario. In addition, we note that the company's
dependence on commodity prices over the next two years is greatly
reduced by its strong hedges."
"We believe the company remains vulnerable and dependent on
favorable business and market conditions to meet its financial
obligations. Vine's liquidity is likely to deteriorate, as
commitments under the new RBL shrink over time. Indeed the $300
million commitments under the RBL are scheduled to step down
quarterly, to reach $240 million at year-end 2021 and $100 million
at year-end 2022. Currently, $240 million is drawn under the RBL.
Although we expect the company to generate enough free cash flow to
pay down its revolver in 2021, the company will likely have have to
find other sources of liquidity to offset the anticipated decrease
in its RBL. We also believe the refinancing of Vine's unsecured
notes due April 2023 could prove challenging, as current yields on
the company's unsecured debt remain high."
The 'CCC+' issuer credit rating on Vine reflects S&P Global
Ratings' view that the company is dependent on favorable market
conditions to meet its financial commitments. S&P could lower the
rating if the company were unable to refinance its 2023 maturity on
favorable terms or its liquidity position deteriorates.
S&P said, "We could lower our ratings on Vine if its liquidity
deteriorated or it were not able to refinance its senior notes due
2023 by April 2022. This would most likely occur if natural gas
prices deteriorated and capital markets conditions became
unfavorable."
"We could revise our outlook or ratings on Vine if the company were
able to refinance its 2023 notes and natural gas prices remained
favorable, supporting the company's free cash flow generation and
liquidity."
VOLUSION LLC: eCommerce Platform Exits Bankruptcy
-------------------------------------------------
eCommerce platform provider Volusion, LLC, announced that the
Company emerged from Chapter 11 bankruptcy protection on January 19
after successfully restructuring the company’s matured debt with
Main Street Capital Corporation ("Main Street") and receiving plan
confirmation from the Texas Southern District Bankruptcy Court on
November 20, 2020. With a strengthened balance sheet and renewed
focus on platform enhancements, Volusion is well positioned for
long-term growth and success.
"The commitment of our key stakeholders, including our
shareholders, key lender and Board of Managers, to our people and
business is a testament to our strategic direction and growth
potential," said Troy Pike, Volusion's Chief Executive Officer.
"The organization has made significant progress and sees a clear
opportunity to distinguish our platform in the marketplace--adding
substantial value for our merchants, employees and other
stakeholders."
Volusion filed for Chapter 11 protection on July 27, 2020, in order
to restructure matured debt with Main Street as its secured
creditor. Through successful negotiations over the four-month
period after filing, Volusion entered into an agreement with Main
Street to revise terms of the matured debt. Additionally, the
Company took action to implement organizational changes and
efficiencies that will better enable it to drive innovation moving
forward.
"Volusion is advantaged by its longevity, passionate associates and
loyal customers," said Jesse Morris, Main Street's Chief Operating
Officer. "We believe the business is in the right market at the
right time and has significant potential to grow its value in the
months and years to come. Our recent restructuring agreements are
intended to provide Volusion the flexibility to capture these
significant opportunities for the benefit of all stakeholders."
Prior to filing for bankruptcy protection, Volusion had made
significant investment in developing new platform features and
capabilities, many of which it will bring to market later this
2021.
About Volusion LLC
Volusion, LLC, is an ecommerce software company based in Austin,
Texas. It designs and builds custom websites for clients. Visit
http://www.volusion.comfor more information.
Volusion filed a Chapter 11 petition (Bankr. S.D. Tex. Case No.
20-50082) on July 27, 2020. Judge David R. Jones presides over the
case. In the petition signed by CRO Timothy B. Stallkamp, the
Debtor was estimated to have $10 million to $50 million in both
assets and liabilities.
Jackson Walker LLP and Conway Mackenzie Management Services, LLC
serve as Debtor's bankruptcy counsel and restructuring advisor,
respectively.
VTES INC: Unsecured Creditors to Get Payout in Harman Sale Plan
---------------------------------------------------------------
Vtes, Inc., et al., submitted a Second Amended Small Business
Subchapter V Plan.
A hearing to consider confirmation of the Plan is scheduled for
Feb. 19, 2021 at 2:00 p.m.
The Debtor's Plan contemplates a sale of substantially all assets
to buyer Harman Becker Automotive Systems, Inc. The Plan will be
funded from the proceeds generated by the sale. The Plan
contemplates (i) the payment of all allowed secured claims, allowed
administrative claims and allowed priority claims in full; and (ii)
distributions to creditors holding allowed general unsecured claims
at the conclusion of the Debtors' claims reconciliation process.
The Debtors estimate that following the claims reconciliation
process, the holders of allowed general unsecured claims against
the Debtors will receive distributions under the Plan on account of
such holder's allowed general unsecured claim.
Holders of each allowed general unsecured claim in Class 4 will
receive (a) a pro rata share of cash in an amount not to exceed the
amount of such claim, (b) a pro rata share of any accounts
receivable payments received within one year and one month after
the closing of the Sale, or (c) such other treatment as may be
agreed upon by the Trustee and the claim holder. Final
distributions to holders of Class 4 claims are expected to occur
approximately one year and one month after the Effective Date in a
single payment.
Because the Debtors are selling substantially all of their Assets
and are not continuing as a going concern after the closing of the
Sale, the Debtors will not have Disposable Income post Effective
Date over a 3, 4, or 5 year period. Instead, holders of Allowed
Claims will receive a lump sum Distribution from the sale proceeds
and potential supplemental Distributions from Accounts Receivable
Payments on the Distribution Date, which will exceed Liquidation
Value. Specifically, the Plan will provide distributions to
creditors that are a multiple of the Liquidation Value.
According to the Liquidation Analysis, the Debtors and their
advisors have concluded that a liquidation of the Debtors' assets
would result in a range of recoveries from approximately $645,000
to $922,000 available for the satisfaction of the Claims of all
impaired creditors whose Claims are estimated to between $7.6
million to $8.3 million, which would result in no distribution to
unsecured creditors.
A black-lined copy of the Second Amended Chapter 11 Plan dated
January 20, 2021, is available at https://bit.ly/3og8p1D from
PacerMonitor.com at no charge.
Proposed Counsel for the Debtors:
Scott A. Griffin
Michael D. Hamersky
GRIFFIN HAMERSKY LLP
420 Lexington Avenue, Suite 400
New York, New York 10170
Telephone: (646) 998-5580
Facsimile: (646) 998-8284
About VTES, Inc.
Savari -- https://savari.net/ -- builds software and hardware
sensor solutions for OEM automotive car manufacturers, the
automotive aftermarket, smart cities, and pedestrians with the
vision of making transportation predictive, safer and more
efficient.
VTES, Inc., Savari, Inc., and Savari Systems Pvt. Ltd. filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 20-12941) on Dec. 27, 2020. The
petitions were signed by Ravi Puvvala, the CEO. At the time of the
filing, each Debtor was estimated to have $1 million to $10 million
in both assets and liabilities.
The Debtors tapped Griffin Hamersky LLP as counsel, Rock Creek
Advisors LLC as financial advisor, and Stretto as claims agent and
administrative advisor.
On Dec. 28, 2020, the Office of the United States Trustee for
Region 2 appointed Nat Wasserstein of Lindenwood Associates, LLC as
the subchapter V trustee.
VTV THERAPEUTICS: Unit Signs 1st Amendment to Huadong License Deal
------------------------------------------------------------------
vTv Therapeutics LLC, a subsidiary of vTv Therapeutics Inc.,
entered into the First Amendment to License Agreement with Hangzhou
Zhongmei Huadong Pharmaceutical Co., Ltd. to amend the License
Agreement previously entered into between vTv LLC and Huadong on
Dec. 21, 2017. The First Amendment eliminates vTv LLC's obligation
to sponsor a Phase 2 Multi-Region Clinical Trial and corresponding
obligation to contribute up to $3.0 million in support of such
trial. The First Amendment also reduces the total potential
development and regulatory milestone payments of $25.0 million
under the Original Agreement by $3.0 million.
About vTv Therapeutics
vTv Therapeutics Inc. is a clinical-stage biopharmaceutical company
focused on developing oral small molecule drug candidates. vTv has
a pipeline of clinical drug candidates led by programs for the
treatment of type 1 diabetes, Alzheimer's disease, and inflammatory
disorders. vTv's development partners are pursuing additional
indications in type 2 diabetes, chronic obstructive pulmonary
disease (COPD), and genetic mitochondrial diseases.
vTv Therapeutics reported a net loss attributable to common
shareholders of $17.91 million for the year ended Dec. 31, 2019
compared to a net loss attributable to common shareholders of $8.65
million for the year ended Dec. 31, 2018. As of Sept. 30, 2020,
the Company had $7.05 million in total assets, $12.83 million in
total liabilities, $45.59 million in redeemable noncontrolling
interest, and a total stockholders' deficit attributable to the
Company of $51.37 million.
Ernst & Young LLP, in Raleigh, North Carolina, the Company's
auditor since 2000, issued a "going concern" qualification in its
report dated Feb. 20, 2020 citing that to date, the Company has not
generated any product revenue, has not achieved profitable
operations, has insufficient liquidity to sustain operations and
has stated that substantial doubt exists about the Company's
ability to continue as a going concern.
WC 4TH AND COLORADO: Lender Says Plan Disclosures Inadequate
------------------------------------------------------------
Colorado Third Street LLC submitted an objection to conditional
approval of adequacy of the WC 4TH and Colorado, LP's Disclosure
Statement.
On June 3, 2020, with the matured Loan unpaid for six months, the
Lender provided the Debtor with the first Notice of Substitute
Trustee's Sale of the non-judicial foreclosure sale scheduled for
July 7, 2020 and filed a state court proceeding styled Colorado
Third Street, LLC v. WC 4th and Colorado, LP in the 261st Judicial
District of Travis County, Texas. The Debtor filed a counterclaim
against Lender on July 1, 2020.
On July 6, 2020, the Debtor obtained a temporary restraining order
enjoining the July 7, 2020 foreclosure sale. The Lender
subsequently submitted a second Notice of Substitute Trustee's Sale
on July 14, 2020, for an Aug. 4, 2020 foreclosure sale. The Debtor
sought a temporary injunction, which was denied on July 31, and the
Lender moved forward with its scheduled foreclosure of the
Property.
Colorado points out that the Disclosure Statement lacks adequate
information such as a description of the events leading to the
Debtor's Chapter 11 filing, the Debtor's available assets and their
value, the source of information stated in the Disclosure
Statement, the present condition of the Debtor while in Chapter 11,
the collectability of accounts receivable, or financial
information, data, valuations or projections relevant to the
creditors' decision to accept or reject the Chapter 11 plan.
Colorado further points out that the Disclosure Statement does not
even mention the accounting method utilized to produce financial
information and the name of the accountants responsible for such
information, the future management of the Debtor, the actual or
projected realizable value from recovery of preferential or
otherwise voidable transfers, or the relationship of the Debtor
with its affiliates.
Colorado asserts that the Disclosure Statement describes a plan
that is patently unconfirmable. It points out that nearly three
months have passed since the Debtor was required to file its Plan
and Disclosure Statement under 11 U.S.C. Sec. 362(d)(3), yet the
Debtor has not provided (a) any evidence of committed refinancing,
(b) any indication that it has taken steps to procure a sale of its
property, (c) the name of any affiliate willing and able to provide
an equity infusion to the Debtor, or (d) financial projections
which take into account the Debtor's current and prior financial
condition.
Counsel for Colorado Third Street:
Jason G. Cohen
Christopher L. Dodson
BRACEWELL LLP
711 Louisiana, Suite 2300
Houston, Texas 77002
Telephone: (713) 223-2300
Facsimile: (713) 221-1212
E-mail: Jason.Cohen@bracewell.com
Chris.Dodson@bracewell.com
Plan & Disclosure Statement
WC 4th and Colorado filed an Amended Plan of Reorganization and a
corresponding Disclosure Statement on Nov. 25, 2020.
Under the Plan, the Lender's Allowed Claim in the amount of $8.676
million in Class 1 and JAC's allowed claim totaling $103,304 in
Class 2 will be paid at the election of the Debtor either (a) over
the time period specified in the Plan or (b) from cash from
proceeds of refinancing or sale. General unsecured claims totaling
$53,978 in Class 4 will receive payment in full of the allowed
amount of each holder's claim, with 2% interest, to be paid 30 days
following payment of the Class 1 claim and the Class 2 claim.
Equity interests are unimpaired under the Plan.
A copy of the Amended Disclosure Statement dated Nov. 25, 2020, is
available at https://bit.ly/3a36xnB
About WC 4th and Colorado
WC 4th and Colorado, LP, is an Austin, Texas-based single asset
real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It
owns and operates a facility located at 117 W. 4th Street, Austin,
Texas, that houses a number of restaurant and entertainment related
businesses. The Company is owned by Nate Paul, a successful real
estate entrepreneur very active in the Austin market.
WC 4th and Colorado sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W. D. Tex. Case No. 20-10881) on Aug. 4,
2020. Brian Elliot, authorized agent, signed the petition. At the
time of the filing, the Debtor estimated assets of between $10
million and $50 million and liabilities of between $1 million and
$10 million. Mark Ralston, Esq., is the Debtor's legal counsel.
WC CUSTER CREEK: Seeks Use of Spring Custer Cash Collateral
-----------------------------------------------------------
WC Custer Creek Center Property LLC advises the U.S. Bankruptcy
Court for the Western District of Texas, Austin Division, that it
has reached an agreement with Spring Custer, LLC authorizing the
Debtor to use Spring Custer's cash collateral.
The Debtor will use Spring Custer's cash collateral to pay
environmental services and related material to effectuate the
remediation required by the City of Plano to address alleged
environmental issues resulting from the failure of the wastewater
discharge plumbing system serving the Debtor's retail shopping
center, commonly known as the "Custer Creek Center."
Absent further agreement or authority of the Bankruptcy Court, the
Debtor is authorized to pay DNA Plumbing Services, LLC, up to and
including $2,000 for removal and replacement of potentially
contaminated fill dirt on the Center; and pay Cleaning Guys LLC
d/b/a CG Environmental up to and including $6,862.37 for
remediation of, among other things, sewage water contamination on
concrete and asphalt areas in the Center, removal of leaves or
other possibly contaminated debris at the Center, and cleaning of
possibly contaminated storm drains.
The Debtor proposes to grant Spring Custer a replacement lien and a
super-priority administrative claim for any diminution in value of
Spring Custer's collateral resulting from the approved use of cash
collateral to satisfy the cost of the Approved DNA Services and the
Approved CGE Services.
Counsel for Spring Custer, LLC:
W. Stephen Benesh, Esq.
Christopher L. Dodson, Esq.
Jason Cohen, Esq.
Bracewell LLP
711 Louisiana, Suite 2300
Houston, TX 77002-2770
E-mail: Jason.cohen@bracewell.com
A copy of the Debtor's Notice is available at
https://bit.ly/2NpetrA from PacerMonitor.com.
About WC Custer Creek Center Property LLC
Austin, Texas-based WC Custer Creek Center Property, LLC filed a
Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-11202) on Nov. 2,
2020. Natin Paul, manager, signed the petition. In its petition,
the Debtor estimated $10 million to $50 million in assets and $1
million to $10 million in liabilities.
Judge Tony M. Davis oversees the case.
Fishman Jackson Ronquillo, PLLC and Columbia Consulting Group, PLLC
serve as the Debtor's bankruptcy counsel and financial advisor,
respectively.
WEEKLEY HOMES: Moody's Hikes CFR to Ba3 on Continued Improvement
----------------------------------------------------------------
Moody's Investors Service upgraded the Corporate Family Rating and
senior unsecured notes of Weekley Homes, LLC to Ba3 from B1 and the
Probability of Default to Ba3-PD from B1-PD. The outlook remains
stable.
The upgrade reflects Moody's expectation of continued improvement
in credit metrics through 2022, including debt to book
capitalization trending to 35%, as a result of increased retained
earnings, and EBIT to interest increasing to 6.8x. The stable
outlook reflects Moody's expectation that Weekley Homes will
continue to diversify geographically while maintaining a
conservative financial policy.
Upgrades:
Issuer: Weekley Homes, LLC
Corporate Family Rating (Local Currency), Upgraded to Ba3 from B1
Probability of Default Rating, Upgraded to Ba3-PD from B1-PD
Senior Unsecured Notes, Upgraded to Ba3 (LGD4) from B1 (LGD4)
Outlook Actions:
Issuer: Weekley Homes, LLC
Outlook, Remains Stable
RATINGS RATIONALE
The Ba3 CFR reflects the success of Weekley Homes' asset-lite
business model, which reduces the risk of impairment related to
long land exposure. The rating also takes into account Moody's view
of the company's broad product offering and price point
diversification, solid credit metrics, including gross operating
margin above the industry average, low leverage and high interest
coverage. These factors are offset by geographic concentration in
the state of Texas, which represents approximately 41% of annual
revenues. Finally, the rating reflects industry cost pressures,
including land, labor and materials that could negatively impact
gross margin, as well as the cyclical nature of the homebuilding
industry that could lead to protracted revenue declines.
Moody's expects Weekley Homes to generate approximately $7 million
of free cash flow in 2021 and $46 million in 2022, while
maintaining good liquidity over the same time period. In addition
to $116 million of unrestricted cash at September 30, 2020, the
company had full availability on its $400 million unsecured
revolver and is expected to maintain ample cushion on its
maintenance covenants.
As a family owned, private homebuilder, the company pays dividends
to cover tax obligations of shareholders as well as a discretionary
profit distribution, which is expected to increase to 25% of net
income, from 15%. However, Moody's views Weekley Homes' governance
risk as low given the company's conservative financial policy,
including the presence of three independent board members out of a
total of seven and maintenance of low financial leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Weekley Homes maintains strong
credit metrics, including debt to book capitalization sustained
below 40% and EBIT to interest above 5.0x. An upgrade would also
require maintenance of a good liquidity profile, including
consistent free cash flow generation. Finally, an upgrade would
require a meaningful increase in size and scale, while continuing
to diversify geographically.
The ratings could be downgraded if debt to book capitalization
approaches 50%, EBIT to interest falls below 4.0x or adjusted gross
margins fall below 20%, all on a sustained basis. A downgrade would
also result should Weekley Homes experience a material
deterioration in liquidity or engages in aggressive shareholder
friendly activities.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
Established in 1976 and headquartered in Houston, TX, Weekley
Homes, LLC is one of the largest private homebuilders in the US,
constructing entry level, first move-up, second move-up, and custom
homes. Owned entirely by the Weekley family, senior management, a
charitable trust and an ESOP, the company has a presence in 20
metropolitan areas across 12 states. For the 12 months ended
September 30, 2020, the company generated approximately $2.2
billion in revenues and $177 million in net income.
WF GRACE CONSTRUCTION: May Use Cash Collateral Thru April 30
------------------------------------------------------------
Judge Bruce A. Harwood of the U.S. Bankruptcy Court for the
District of New Hampshire has authorized WF Grace Construction, LLC
to use cash collateral on an interim basis through April 30, 2021,
and provide adequate protection to potential cash collateral
lienholders.
The Debtor is authorized to use and expend cash collateral to pay
the costs and expenses incurred by the Debtor in the ordinary
course of business to the extent provided for in the Budget up to
$421,451.08.
The Debtor will make monthly payments to TBK Bank, SSB in the
amount of $3,474.29, beginning on the 15th day from the date of the
Order and on the same date of each succeeding month thereafter
during the Use Term. On or before the 10th day of each month, the
Debtor will likewise deliver these reports to TBK's counsel: (i)
copies of all monthly operating reports filed with the office of
the United States Trustee; and (ii) such other financial
statements, information, and reports that the Debtor prepares or
keeps in the ordinary course of business as TBK may reasonably
request regarding the results of the Debtor's operations during the
Case.
The Debtor is also authorized to make the monthly payments to TD
Bank, N.A. in the amount of $1,426.78 in accordance with the
Stipulated Order Between Debtor and TD Bank, N.A. Providing
Adequate Protection [Doc. 214] during the Use Term.
Each Potential Cash Collateral Lienholder will be and is granted a
replacement lien in, to and on the Debtor's post-petition property
of the same kinds and types as the collateral in, to and on which a
Potential Cash Collateral Lienholder held valid and enforceable,
perfected liens on the Petition Date as security for any loss or
diminution in the value of such collateral held by any such Record
Lienholder on the petition date resulting from the use thereof by
the Debtor, each of which will have and enjoy the same priority as
it had on the Petition Date under applicable state law.
The Replacement Liens granted are valid and perfected
notwithstanding any requirements of non-bankruptcy law with respect
to perfection and will be recognized and enforceable only to the
extent of and is limited to any diminution in value of the
collateral held by a Record Lienholder on the petition date that is
caused by and results from the use of cash collateral pursuant to
the Order.
A further hearing on the motion for permission to use cash
collateral will be held April 21, 2021 at 2:00 p.m.
A copy of the order and the Debtor's budget for the period January
30 to April 30, 2021, is available at https://bit.ly/3ivWqLN from
PacerMonitor.com.
About WF Grace Construction, LLC
W.F. Grace Construction, LLC is part of the residential
construction contractors industry.
W.F. Grace Construction, LLC filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. N.H. Case
No. 20-10844) on Sept. 28, 2020. The petition was signed by William
F. Grace, Jr., sole member. At the time of filing, the Debtor
estimated $1 million to $10 million in both assets and liabilities.
Judge Bruce A. Harwood oversees the case.
William S. Gannon, Esq. at WILLIAM S. GANNON PLLC represents the
Debtor as counsel.
WHOLE EARTH: Moody's Assigns First Time 'B2' Corp. Family Rating
----------------------------------------------------------------
Moody's Investors Service assigned first-time ratings for Whole
Earth Brands, Inc. including a B2 Corporate Family Rating, a B2-PD
Probability of Default Rating, a Speculative Grade Liquidity Rating
of SGL-2, and B2 ratings on $450 million of proposed senior secured
first lien credit facilities. The outlook is stable.
The rating assignments reflect elevated leverage (projected
pro-forma debt-to-EBITDA of 4.5x on a Moody's adjusted basis) and
small scale with projected revenues of $500 million (pro-forma for
the Wholesome acquisition) as of December 31, 2020. The liquidity
position is good with expectations to hold nominal cash on the
balance sheet along with a $75 million revolving credit facility
that could be used to partially fund future acquisitions.
Governance considerations acknowledge Whole Earth Brands' growth
through acquisitions strategy, having announced two acquisitions in
the last two months, Swerve, L.L.C. ("Swerve") and WSO Investments,
Inc. ("Wholesome"). Whole Earth Brands is targeting a long-term
leverage ratio of less than 3.0x debt-to-Adjusted EBITDA, estimated
to be 3.9x at closing, based on the company's calculations.
Accordingly, the commitment embedded in the financial policy to
reduce leverage was a key consideration in the rating outcome.
The ratings assignments follow the company's plan to raise new
senior secured debt comprised of a $75 million senior secured first
lien revolver expiring in 2026 and a $375 million senior secured
first lien term loan expiring in 2028. Proceeds from the proposed
term loan will be used to refinance existing credit facilities and
to fund the acquisition of Wholesome. All ratings are subject to
Moody's review of final documentation.
Assignments:
Issuer: Whole Earth Brands, Inc.
Corporate Family Rating, Assigned B2;
Probability of Default Rating, Assigned B2-PD;
Speculative Grade Liquidity Rating at SGL-2;
$75 million senior secured 1st lien revolving credit facility
expiring 2026, assigned B2 (LGD3);
$375 million senior secured 1st lien term loan B expiring 2028,
assigned B2 (LGD3);
Outlook Actions:
Issuer, Whole Earth Brands, Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
The B2 CFR reflects Whole Earth Brands' global presence in the
natural and sugar free sweeteners categories as well as its global
leadership position in natural licorice extracts and derivatives.
The rating also reflects the company's good profitability and
predictable free cash flow generation resulting from its asset
light business model. Offsetting these factors are the company's
relatively small scale with revenues of $500 million pro-forma for
the acquisition of Wholesome and focus on the mature and
competitive sweetener categories. Acquisitions targeted at
sweeteners that will benefit from consumer demand for healthier
options should help mitigate the relatively flat to declining
revenue performance in recent years in the company's legacy
products including artificial sweeteners. Moody's projects modest
low single digit growth over the next few years. The company also
has high financial leverage, estimated to be 4.5x debt-to-EBITDA on
a Moody's adjusted basis pro-forma for the acquisition of Wholesome
as of December 31, 2020. Moody's expects the company to be
acquisitive to build its portfolio of sweetener products with a
focus on products experiencing growing consumer demand.
Whole Earth Brands' SGL-2 rating reflects good liquidity based on
Moody's estimates of approximately $27 million of pro-forma cash,
$40 million of annual projected free cash flow in 2021, $60 million
of remaining undrawn capacity on the revolver, and no debt
maturities through 2026. The cash sources provide ample resources
for the $3.75 million of required annual term loan amortization,
reinvestment needs and potential acquisitions. There are no term
loan financial maintenance covenants and Moody's projects the
company will maintain good cushion within the maximum net leverage
and minimum fixed charge coverage ratio maintenance covenants in
the revolver.
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.
Our analysis has considered the effect on the performance of
corporate assets 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.
Notwithstanding, Whole Earth Brands and many other packaged food
companies are likely to be more resilient than companies in other
sectors, although some volatility can be expected through 2021 due
to uncertain demand characteristics, channel shifting, and the
potential for supply chain disruptions and difficult comparisons
following these shifts. Moody's regards the coronavirus outbreak as
a social risk under its ESG framework, given the substantial
implications for public health and safety.
Moody's expects Whole Earth Brands' lower calorie and natural
products to benefit from changing consumer food habits including a
focus on healthier foods that are free from sugar and that are
plant based. Demand for other company products such as artificial
sweeteners are likely to be hurt by these consumer trends.
Moody's views Whole Earth Brands' commitment to deleveraging and
its long-term debt-to-Adjusted EBITDA target, as defined by the
company of less than 3.0x, as a credit positive.
Environmental considerations are not material considerations in the
rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that Whole Earth
Brands will successfully integrate its November 2020 acquisition of
Swerve and its upcoming acquisition of Wholesome. Furthermore,
Moody's assumes in the outlook that Whole Earth Brands will
continue to grow its revenues and EBITDA in a low single digit
range, expanding its customer reach through new product
innovations, generate approximately $40 million of annual free cash
flow, and maintain good liquidity.
Whole Earth Brands' ratings could be upgraded if there is a
material diversification in the company's product profile, the
company is able to accelerate organic revenue and earnings growth,
capture a growing share of the sweeteners market, maintain good
liquidity, and sustain debt-to-EBITDA below 4.0x while pursuing its
acquisition-based growth strategy. Alternatively, ratings could be
downgraded if organic revenue performance is weak or declining,
margins contract, free cash flow is low, liquidity deteriorates, or
adjusted debt-to-EBITDA is sustained above 5.0x.
The proposed first lien credit agreement contains provisions for
incremental debt capacity up to the greater of $67.5 million and
75% of consolidated pro forma trailing four quarter consolidated
EBITDA, plus additional amounts subject to a pro forma total net
leverage requirement not to exceed 4.0x (if pari passu secured).
The incremental debt that is a separate tranche can not be incurred
with an earlier maturity date or an earlier weighted average
maturity than the remaining weighted life to maturity of the
initial Term Loan. Only wholly-owned domestic subsidiaries act as
subsidiary guarantors; partial dividend of ownership interest could
jeopardize guarantees subject to limitation by credit agreement.
The credit agreement also permits the designation of unrestricted
subsidiaries and the transfer of assets to unrestricted
subsidiaries, subject to a limited blocker provision that prohibits
an unrestricted subsidiary from owning property identified as
"Material Property", and the limitations and baskets in the
negative covenants. The credit agreement requires 100% of net asset
sale proceeds to be used to repay the credit facility, if not
reinvested within 18 months (or 24 months in the event a letter of
intent or commitment letter is entered into within such 18-month
period), with no step-downs on the prepayment / reinvestment
requirement. The above are proposed terms and the final terms of
the credit agreement can be materially different.
Whole Earth Brands, Inc. ("Whole Earth Brands", NASDAQ: FREE) based
in Chicago, Illinois, is a publicly traded global platform of
branded products and ingredients focused on the consumer transition
towards healthier lifestyles, such as free from sugar, natural
solutions, plant-based and clean label. With brands such as Whole
Earth, Swerve, Pure Via, Equal, and Canderel, Whole Earth Brands
has formed a global presence in the zero/low sugar, calorie
sweeteners and reduced sugar categories. The Company's branded
product line, Magnasweet, offers versatile masking agents,
sweetness intensifiers and extenders and flavor enhancers. Whole
Earth Brands generated net sales for the twelve months ended
September 30, 2020 of approximately $500 million pro-forma for the
acquisitions of Swerve and Wholesome.
The principal methodology used in these ratings was Consumer
Packaged Goods Methodology published in February 2020.
WHOLE EARTH: S&P Assigns 'B' ICR; Outlook Positive
--------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to Whole
Earth Brands Inc. At the same time, S&P assigned its 'B'
issue-level and '3' recovery rating to the company's senior secured
credit facilities, indicating its expectation for meaningful
(50%-70%, rounded estimate: 65%) recovery in the event of default.
The positive outlook reflects that S&P could raise its rating on
the company over the next 12 months if good operating performance
resulted in leverage declining below 4.5x. This assumes strong
demand for the company's branded consumer products and successful
execution of its channel penetration strategy.
Whole Earth Brands Inc., a better-for-you branded food and
ingredients company, is refinancing its capital structure to fund
the acquisition of WSO Investments Inc. (Wholesome).
The company's pro forma capital structure will include a $75
million five-year revolving credit facility, $15 million drawn at
close, and a $375 million seven-year senior secured first-lien term
loan B. The rating agency expects pro forma S&P-adjusted leverage
for fiscal 2020 of 5.1x.
S&P said, "Our ratings reflect our expectation that good operating
performance, free cash flow generation, and prudent financial
policy will enable the company to maintain leverage at about 4x.
Upon the closing of the transaction, we estimate Whole Earth's pro
forma fiscal 2020 leverage to be approximately 5.1x on an adjusted
basis and forecast it will decrease toward 4x in 2021 due to sales
growth and lapping of one-time costs. The company's pro forma 2020
S&P Global Ratings-adjusted EBITDA (EBITDA) margin of about 16% is
suppressed due to costs related to an initiative to consolidate its
manufacturing footprint. These costs will roll-off through 2021,
and we also expect Whole Earth will realize lower manufacturing
labor and overhead costs, modest cost synergies in its supply
chain, and a more favorable product mix due to growth of its
branded offerings within the consumers products segment. We
forecast that this will result in EBITDA margins improving toward
the mid-17% area. However, we anticipate that further margin
expansion will be inhibited by rapid growth in the Wholesome
segment, which operates at a lower margin due to a sizable private
label business."
"We also forecast that Whole Earth's asset-lite business model will
enable it to generate S&P Global Ratings-adjusted free operating
cash flow (FOCF) of more than $40 million on a pro forma basis. A
portion of this might be applied toward its authorized $20 million
share repurchase program, but we believe the company will
prioritize using excess cash flow to execute its growth strategy
through product innovation, geographic expansion, and merger and
acquisition activity."
"However, we expect the company's financial policy decisions will
be prudent to maintain its stated long-term leverage target of 3x
(about 4x on an S&P Global Ratings-adjusted basis). While we expect
that leverage might temporarily rise above this target as the
company completes small tuck-in acquisitions to support growth, the
company has stated that it would subsequently reduce leverage back
toward its target. We do not forecast that the company will
complete larger deals over the next 12 months as it continues to
integrate Swerve and Wholesome."
"Our ratings also reflect Whole Earth's good market share,
well-established customer relationships, and leading innovation
capabilities, but small scale, narrow product breadth, and limited
growth prospects in the flavors and ingredients business. Whole
Earth holds an approximate 12% share of the total North American
sweeteners market, with its well-recognized brands such as Whole
Earth, Pure Via, Equal, and Canderel, holding leading market
positions across global markets. In November 2020, the company
completed the acquisition of Swerve, a manufacturer and marketer of
an assortment of plant-based sweeteners, as well as adjacent
products such as baking mixes that are friendly to low-calorie and
other specialty diets. The company also announced the acquisition
of Wholesome, a provider of organic cane sugar and other natural
sweeteners such as agave and honey. That acquisition is expected to
close sometime in the first quarter of the current year. Wholesome
provides Whole Earth with a leadership position in the organic
sugar category, and access to its customer base for branded retail
products, private label, and ingredients. As a result of the Swerve
and Wholesome acquisitions, we believe the company has a more
diverse assortment of organic, natural, and free-from products
relative to peers in the sweeteners category. This leaves it
positioned to leverage its well-established relationships with
large retailers for increased channel penetration of its recent
acquisitions."
"We also view the company's product innovation capabilities in the
sweetener space as a key advantage because it enables the company
to increase brand awareness while meeting consumer taste
preferences. We believe this capability will be a driver of organic
growth, especially as the acquired product portfolios benefit from
the company's focus on innovation and complement the current
pipeline of new products."
Still, the branded natural and artificial sweeteners category
remains fragmented, and increasing competition for shelf space from
new entrants or better-capitalized existing players could hinder
the company's plan to gain increased distribution with customers.
In addition, the branded consumer product segment is small relative
to peers in the broader packaged food sector and is entirely
concentrated in the niche better-for-you sweeteners and adjacent
products segment. This leaves Whole Earth highly susceptible to
operating performance disruption due to changes in consumer taste.
The company's flavors and ingredients business, which accounted for
about 20% of pro forma 2020 revenue, offers a modest degree of
diversification, albeit with limited growth prospects. Through its
Magnasweet product line, the company is the leading provider of
licorice extracts and derivatives for flavor masking and as a
moistening agent for a variety of end markets including tobacco,
pharmaceutical, and confectionary.
S&P said, "We believe the company's supply chain capabilities,
manufacturing footprint, and application expertise enable it to
maintain strong relationships with customers and win contracts over
less-sophisticated competitors. However, we view the market for
licorice products as quite mature and believe it exhibits limited
opportunities for sales growth."
The company's portfolio of natural sweeteners and free-from
products leaves it well positioned to realize organic growth from
favorable consumer demand trends.
S&P said, "We believe consumers' increasing prioritization of their
health and wellness, and a growing awareness around the impact
their diet has, will drive long-term demand for conventional sugar
alternatives. Specifically, we expect the company's plant-based
sweeteners and free-from baking products will benefit from
consumers paying more attention to ingredient labels and a broader
adoption of specialty diets."
In addition, stay-at-home orders due to the COVID-19 pandemic have
induced changes in consumer behavior that are favorable for the
company, offsetting declines it saw in food service. Notably,
consumption of coffee and tea has increased, and consumers are
baking at home at a higher rate. These activities are among the
major applications of sweeteners and drive increased demand.
Further, the pandemic accelerated e-commerce sales of packaged
food, a channel that is underpenetrated in the industry. This
resulted in the company's percent of sales from retail e-commerce
customers' channels growing to about 10% from the
low-single-digits. Although S&P expects these trends to continue to
benefit the company in the near term, they might soften when the
pandemic subsides.
The positive outlook reflects that S&P could raise its rating on
Whole Earth if it successfully integrated its recent acquisitions
and achieved revenue and EBITDA growth to the extent consumer
demand for natural sweeteners remains strong and the company
increases retail penetration at several national retailers where
those brands do not yet have a meaningful presence. This would
enable the company to sustain leverage below its 4.5x upgrade
threshold.
S&P could raise its rating over the next 12 months if the company
integrated its recent acquisitions, continued to generate
mid-to-high single-digit organic growth rates of its acquired
brands, and reduced leverage to below 4.5x. An upgrade would also
be predicated on the company not pursuing a large debt-funded
acquisition that leads to a meaningful deterioration of credit
metrics.
S&P could revise its outlook on Whole Earth to stable if it
believed leverage would remain elevated above 5x because the
company:
-- Is unable to realize forecast levels of organic growth in its
branded consumer products due to weak demand; or
-- Does not achieve distribution gains with key retailers due to
integration difficulties or increased competition.
S&P could also revise the outlook to stable if the company remained
acquisitive before reducing debt to EBITDA below 4.5x, such that
debt to EBITDA on average remained closer to 5x.
YRC WORLDWIDE: Appoints Two New Directors
-----------------------------------------
The Board of Directors of YRC Worldwide Inc. increased the size of
the Board from eight to ten members, and elected David S. McClimon
and Chris T. Sultemeier to fill the vacancies. Mr. McClimon and
Mr. Sultemeier will serve as directors for an initial term expiring
at the Company's 2021 Annual Meeting of Stockholders and are
anticipated to be renominated to stand for election at that meeting
by the Board.
Mr. McClimon will serve on the Compensation Committee of the Board
and Mr. Sultemeier will serve on the Governance Committee of the
Board.
Messrs. McClimon and Sultemeier will participate in the Company's
director compensation program and will receive a pro-rated annual
cash retainer for the 2020-2021 board term based on the Company's
Fourth Amended and Restated Director Compensation Plan.
About YRC Worldwide
YRC Worldwide Inc., headquartered in Overland Park, Kan., is a
holding company for a portfolio of less-than-truckload (LTL)
companies including Holland, New Penn, Reddaway, and YRC Freight,
as well as the logistics company HNRY Logistics. YRC Worldwide
companies -- http://www.yrcw.com-- offer expertise in flexible
supply chain solutions, ensuring customers can ship industrial,
commercial and retail goods with confidence.
YRC Worldwide reported a net loss of $104 million for the year
ended Dec. 31, 2019. As of Sept. 30, 2020, the Company had $2.11
billion in total assets, $711.5 million in total current
liabilities, $1.09 billion in long-term debt and financing (less
current portion), $104.2 million in pension and postretirement,
$196.2 million in operating lease liabilities, $320.3 million in
claims and other liabilities, and a total stockholders' deficit of
$323.1 million.
* * *
As reported by the TCR on July 14, 2020, S&P Global Ratings raised
its issuer credit rating on Overland Park, Kan.-based
less-than-truckload (LTL) and logistics company YRC Worldwide Inc.
to 'CCC+' from 'CCC' after the company announced the U.S.
Department of the Treasury will lend it an aggregate of $700
million under the Coronavirus Aid, Relief, and Economic Security
(CARES) Act, and that it has amended its term loan agreement to
waive the minimum EBITDA covenant through December 2021.
In July 2020, Moody's Investors Service confirmed the ratings of
truck carrier YRC Worldwide Inc., including the Caa1 corporate
family rating, following YRC's announcement that the United States
Department of Treasury intends to provide a $700 million loan to
YRC under authorization of the CARES Act. The Caa1 CFR considers
the company's position as one of the largest less-than-truckload
truck carriers in North America, thin operating margins and
substantial debt balance, in part due to Moody's adjustments
related to underfunded pension obligations.
YUNHONG CTI: Bret Tayne Quits as Director
-----------------------------------------
Bret Tayne resigned from the board of directors of Yunhong CTI Ltd.
on Jan. 15, 2021. There were no disagreements between Mr. Tayne
and the Company that caused his resignation, as disclosed in a Form
8-K filed with the Securities and Exchange Commission.
About Yunhong CTI Ltd.
Yunhong CTI Ltd. fka CTI Industries is a manufacturer and marketer
of foil balloons and producer of laminated and printed films for
commercial uses. Yunhong CTI also distributes Candy Blossoms and
other gift items and markets its products throughout the United
States and in several other countries. For more information about
its business, visit its corporate website at
www.ctiindustries.com.
Yunhong CTI reported a net loss of $8.07 million for the year ended
Dec. 31, 2019, compared to a net loss of $3.74 million for the year
ended Dec. 31, 2018.
RBSM, the Company's auditor since 2019, issued a "going concern"
qualification in its report dated May 14, 2020, citing that the
Company has suffered net losses from operations and liquidity
limitations that raise substantial doubt about its ability to
continue as a going concern.
ZEKELMAN INDUSTRIES: S&P Affirms 'BB-' ICR
------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating and its
'BB' issue-level rating on U.S.-based steel processor Zekelman
Industries Inc.'s senior secured term loan.
The outlook revision to positive from stable reflects the potential
for a higher rating if the company maintains its financial policy
and demonstrates it will sustain leverage at or below 2x on a
long-term basis, and completes its capital projects without
significant cash flow dilution.
S&P said, "The outlook revision reflects our expectations that the
company could maintain leverage at 2x or below. Zekelman has
improved its credit profile through the combination of strong
earnings in its fiscal year 2020 (ended Sept. 26, 2020) and $150
million of debt reduction following the prepayment of its senior
secured notes last year. We expect the company to ship 2
million-2.2 million tons in fiscal 2021, down from about 2.3
million tons shipped in fiscal 2020. We also expect its average
sales price to increase in pipe and tube by 5%-10%, given the
current price of hot-rolled coil (HRC) at about $1,000/short ton
(st). As such, we expect S&P Global Ratings-adjusted EBIDTA of $500
million-$600 million, supporting debt to EBITDA of 2x or below."
S&P Global Ratings-adjusted leverage was 1.6x as of Sept. 26, 2020,
down from 2.6x at Zekelman's fiscal year-end 2019. The company's
EBITDA improved more than $100 million in 2020, despite the
economic slowdown caused by the COVID-19 pandemic. The improvement
can be attributed to higher tons shipped, the reversal of steel and
aluminum tariffs on Canadian and Mexican imports, and lower raw
material costs because of a decline in the price of HRC steel. The
price of HRC averaged $540/st in Zekelman's fiscal 2020, down from
$670/st in fiscal 2019. The company has a pass-through mechanism
tied to its steel purchases. As such, its average selling prices
fell in line with the decline in HRC prices in 2020. However,
Zekelman held on to and improved its spread of price over costs
given its value-added products and services, including quicker lead
times and more mixed product shipments compared to competitors.
Maintaining the current financial policy will be a key requirement
for a higher rating. Zekelman has a short history of maintaining
S&P Global Ratings-adjusted leverage at 2x and below. Five years
ago, S&P Global Ratings-adjusted leverage was as high as 8.0x,
before it gradually improved below 2x. However, the company has
shown a willingness to reduce its debt by prepaying its previously
outstanding $375 million senior secured notes. Zekelman made a
small opportunistic $4 million open-market purchase of its term
loan debt during its fiscal 2020 third quarter. S&P Global
Ratings-adjusted debt is $947 million after accounting for excess
cash, pension, and lease obligations, down from $1.2 billion of
adjusted debt at the same period last year.
S&P said, "Additionally, we expect $200 million-$300 million of
capital spending in 2021 to fund growth initiatives. We expect the
projects will be accretive to profitability in the long term but
may pressure cash flow over the next 12 months, if any run over
budget or schedule. We believe Zekelman is committed to reducing
its leverage, but a longer history of operating at with debt to
EBITDA of 2x or below and completing its capital projects without
significant cash flow dilution is a prerequisite for a higher
rating."
Zekelman is transforming and strengthening its business to reduce
the effects of economic and construction cycles. Zekelman's
fundamental operating risks are related to a decline in volumes
from potential slowdowns in economic growth and construction
activity. The company's exposure to HRC steel prices is also a
risk, but that is less significant given the pass-through
mechanisms in its pricing structure. Zekelman usually benefits from
the release of working capital during periods of declining prices
which supports free cash flow. However, short-term volatility from
steel price changes can still exist, given a lag in implementing
pricing changes into contracts. Although construction slowed in
parts of the residential, commercial, and lodging markets in 2020,
Zekelman has found growth in other sectors. Warehouses, data
centers, distribution centers, leisure equipment, and industrial
fencing have been sources of growth for Zekelman through the
COVID-19 pandemic, and they continue to show positive momentum. The
biggest impediment to Zekelman is more likely to be the shortage of
labor in its plants and shipping providers, leading to a delay in
filling orders. S&P expects the Z-modular business to continue
dragging on company earnings, given the recent decline in demand
from its targeted end markets, including hotels, student housing
developments, and long-term care facilities, as well as the often
lengthy and complex permitting requirements that differ across
jurisdictions and projects.
The positive outlook reflects the potential for a higher rating
over the next 12 months if the company maintains its
less-aggressive financial policies and maintains leverage at 2x or
below, while remaining on time and on budget with capital spending
projects that preserve free operating cash flow (FOCF).
S&P could revise the outlook to stable if:
-- S&P believes leverage will be sustained above 3x, potentially
as the result of more-aggressive financial policies or weakened
operating performance; and
-- The company runs over budget on its capital spending projects
such that FOCF to debt contracts toward 15%.
-- S&P could raise the rating if it believes the company will
sustain leverage at or below 2x and FOCF to debt of about 25% or
more.
-- This would be predicated on S&P's view that the company will
not pursue large debt-financed acquisitions and dividends; and
-- The company remains on budget and on schedule with its 2021
capital projects.
ZENERGY BRANDS: Court Confirms Plan of Liquidation
--------------------------------------------------
Judge Brenda T. Rhoades on Jan. 20, 2021, entered an order
confirming the Plan of Liquidation of Zenergy Brands, Inc., et al.,
in each and every respect pursuant to Section 1129 of the
Bankruptcy Code. The judge also approved the Disclosure Statement
on a final basis.
On March 16, 2020, the Debtors filed the Debtors' Plan of
Reorganization (the "TCA Plan"). However, due to conditions out of
their control, the Debtors lost the exit financing to support the
TCA Plan. The loss of exit financing forced the Debtors to abandon
the TCA Plan and pivot to filing the Debtors' Plan of Liquidation.
The Plan of Liquidation and the Disclosure Statement were filed on
Nov. 19, 2020.
The Plan confirmation hearing concluded on Jan. 7, 2021.
All objections to confirmation of the Plan or approval of the
Disclosure Statement were expressly overruled.
At least one impaired class has voted to accept the Plan. Because
all initial votes rejecting the Plan have been resolved and changed
to votes accepting the Plan, the Plan was considered a consensual
plan for the purposes of confirmation.
The Plan will effect an orderly wind down of the Debtors' business
operations, a controlled liquidation of all collateral, including
the sale of certain assets to Eco Investments, and the transfer of
all Causes of Action to the Liquidation Trust.
The terms of the Plan are:
* Pursuant to Section 1123(a)(5) of the Bankruptcy Code, the
Debtors will sell and transfer the Transferred Assets to Eco
Investments for (i) $500,000, (ii) issuance to holders of the
allowed unsecured claims membership interests totaling 9% of the
issued and outstanding membership interests of Eco Investment as of
the Closing Date, and (iii) Eco Investment fulfilling the servicing
requirements in the Residual MESAs.
* Eco Investments will obtain the $500,000 that will be
transferred to the Debtors' Estates by selling the Floresville ISD
MESA, which will be one of the assets included in the Transferred
Assets received by Eco Investments, to the Floresville ISD MESA
Purchaser. Each MESA has a financing and servicing obligation.
Eco Investment will undertake the servicing obligation of the
Floresville ISD MESA to facilitate the sale and transfer of the
Transferred Assets. Eco Investments will also receive a portion of
the sale price of the Floresville ISD MESA for undertaking this
servicing obligation.
* The Liquidation Trust will be established and a trustee of the
Liquidation Trust will be appointed upon Confirmation.
* All Remaining Assets, including Causes of Action, all rights
to challenge the extent, priority and validity of alleged liens,
and all collateral not surrendered under the terms of this Plan
will be transferred to the Liquidation Trust and the Liquidation
Trustee.
* All holders of Allowed Administrative Claims will be paid from
liquidation proceeds.
* The Liquidation Trust shall be solely obligated to object to,
reconcile and resolve all Unsecured Claims such that all such
claims will become Allowed Unsecured Claims. Upon completion of
the Claims objections and reconciliation, the Liquidation Trust
shall provide Eco Investments with a final list of all Allowed
Unsecured Claims for purposes of pro rata distribution of the
Creditor Membership Interests.
* All holders of Allowed Unsecured Claims will receive a
beneficial interest in the Liquidation Trust equal to the pro rata
amount of their Allowed Unsecured Claim, and the Liquidation
Trustee will make distributions to all Allowed Unsecured Claims in
Class 11 pursuant to the terms and conditions of this Plan and a
Liquidation Trust Agreement. The beneficial interests in the
Creditors Trust will be uncertificated and non-transferable.
* Eco Investments will issue to holders of the Allowed Unsecured
Claims membership interests totaling 9% of the issued and
outstanding membership interests of Eco Investment as of the
Closing Date.
* TCA Global's Unsecured Claim is a Disputed Claim. To the
extent Allowed, TCA Global's Claim shall be treated as a
subordinated Claim pursuant to 11 U.S.C. Sec. 510(c) to all
unclassified Claims, including Allowed Administrative Claims, and
Allowed Claims in Class 1, Class 2, and Class 5 and shall not
receive any payment unless and until all unclassified Claims,
including Allowed Administrative Claims, and Allowed Claims in
Class 1, Class 2, and Class 5 are paid in full, at which time the
Class 3 Claim shall be satisfied by a Pro Rata Share of
Distributions from the remaining Liquidation Trust Assets. All
Causes of Action against TCA Global are reserved under this Plan.
* TCA Special Situations Claim will be subordinated pursuant to
11 U.S.C. Sec. 510(c) to all unclassified Claims, including Allowed
Administrative Claims, and Allowed Claims in Class 1, Class 2, and
Class 5. Holders of the TCA Special Situations Claim will receive
no Distribution under the Plan on account of its subordinated claim
unless and until all unclassified Claims, including Allowed
Administrative Claims, and Allowed Claims in Class 1, Class 2, and
Class 5 are paid in full, at which time the Class 3 Claim will be
satisfied by pro rata share of distributions from the remaining
Liquidation Trust Assets. All causes of action against TCA Special
Situations are reserved under the Plan.
* All Equity Interests will be cancelled on the Effective Date,
and no holder of an Equity Interest will receive a distribution on
account of such Equity Interest unless and until all Allowed Claims
in Classes 1-5 are paid in full.
A full-text copy of the Plan Confirmation Order dated January 20,
2021, is available at https://bit.ly/2Y1uWnQ from claims agent
Stretto at no charge.
Counsel for the Debtors:
Marcus A. Helt
FOLEY GARDERE
Foley & Lardner LLP
2021 McKinney Avenue, Suite 1600
Dallas, TX 75201
Telephone: (214) 999-3000
Facsimile: (214) 999-4667
E-mail: mhelt@foley.com
- and -
Jack G. Haake
FOLEY & LARDNER LLP
Washington Harbour
3000 K Street, N.W., Suite 600
Washington, D.C. 20007-5109
Telephone: (202) 295-4085
Facsimile: (202) 672-5399
E-mail: jhaake@foley.com
About Zenergy Brands
Zenergy Brands, Inc. -- https://whatiszenergy.com/ -- is a
next-generation energy and technology company engaged in selling
energy-conservation products and services to commercial, industrial
and municipal customers. It is a business-to-business company whose
platform is a combined offering of energy services and smart
controls. Zenergy Brands is a public company, fully reporting to
the Securities and Exchange Commission and trading on the OTCQB.
Zenergy Brands and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. E.D. Tex. Lead Case No. 19-42886)
on Oct. 24, 2019. As of June 30, 2019, Zenergy Brands had total
assets of $1,944,089 and liabilities of $8,369,818.
Judge Brenda T. Rhoades oversees the cases.
The Debtors tapped Foley & Lardner LLP as their legal counsel, and
Stretto as their claims, noticing, and solicitation agent.
The Office of the U.S. Trustee has appointed creditors to serve on
the Official Committee of unsecured creditors. The committee is
represented by Kane Russell Coleman Logan PC.
[*] New Year Brings Surge in U.S. Corporate Bankruptcies
--------------------------------------------------------
Tayyeba Irum and Chris Hudgins of S&P Global Market Intelligence
report that more companies turned to U.S. bankruptcy courts in the
early days of the New Year, 2021, a sign of continuing struggles
for many industries during the coronavirus era.
A total of 33 companies entered bankruptcy proceedings between Jan.
1 and Jan. 19, 2021 exceeding the number the filings during any
comparable period since 2012, according to S&P Global Market
Intelligence data. The initial surge follows a 10-year record of
630 corporate bankruptcies in 2020.
Companies that entered bankruptcy proceedings between Jan. 1 and
Jan. 19, 2021 include hotel operator Wardman Hotel Owner LLC,
Kansas-based energy company Ferrellgas Partners LP and consumer
lender Aura Financial Corp.
Aura Financial filed a voluntary petition for liquidation under
Chapter 7 on Jan. 9. Co-founder and CEO James Gutierrez said in a
Jan. 11 LinkedIn post that the company is shutting down due to the
disruption and uncertainty caused by the COVID-19 crisis.
Consumer-focused industries continue to account for a higher share
of filings than other sectors, with eight companies entering
bankruptcy in January so far. Nearly 160 consumer-focused
companies went bankrupt in 2020 as struggling retailers faced a
breaking point. Notable filings from the sector in 2020 include
Ascena Retail Group Inc., Tailored Brands Inc., Stein Mart Inc. and
J. C. Penney Co. Inc., which has changed its name to Old Copper Co.
Inc. and is looking for a new CEO after the departure of Jill
Soltau.
Among the hardest-hit companies in retail is women's apparel seller
Christopher & Banks Corp., which sought court protection on Jan.
13, 2021 and plans to close "a significant portion, if not all, of
its brick-and-mortar stores," according to a statement.
[^] Large Companies with Insolvent Balance Sheet
------------------------------------------------
Total
Share- Total
Total Holders' Working
Assets Equity Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------ -------- -------
ABSOLUTE SOFTWRE ABST CN 136.7 (40.5) (9.7)
ABSOLUTE SOFTWRE OU1 GR 136.7 (40.5) (9.7)
ABSOLUTE SOFTWRE ABST US 136.7 (40.5) (9.7)
ABSOLUTE SOFTWRE ABT2EUR EU 136.7 (40.5) (9.7)
ACCELERATE DIAGN AXDX US 104.2 (49.7) 85.0
ACCELERATE DIAGN 1A8 GR 104.2 (49.7) 85.0
ACCELERATE DIAGN AXDX* MM 104.2 (49.7) 85.0
ADAPTHEALTH CORP AHCO US 1,548.8 439.7 169.6
ADVANZ PHARMA CO CXRXF US 1,537.9 (68.1) 178.1
AGENUS INC AGEN US 204.5 (179.4) (21.4)
AGILITI INC AGLY US 745.0 (67.7) 17.3
ALPINE 4 TECHNOL ALPP US 36.6 (13.6) (5.2)
AMC ENTERTAINMEN AMC US 10,876.2 (2,335.4) (979.6)
AMC ENTERTAINMEN AMC* MM 10,876.2 (2,335.4) (979.6)
AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2)
AMERICAN AIR-BDR AALL34 BZ 62,773.0 (5,528.0) (4,244.0)
AMERICAN AIRLINE A1G QT 62,773.0 (5,528.0) (4,244.0)
AMERICAN AIRLINE AAL US 62,773.0 (5,528.0) (4,244.0)
AMERICAN AIRLINE A1G GR 62,773.0 (5,528.0) (4,244.0)
AMERICAN AIRLINE AAL* MM 62,773.0 (5,528.0) (4,244.0)
AMERICAN AIRLINE A1G TH 62,773.0 (5,528.0) (4,244.0)
AMERICAN AIRLINE AAL11EUR EU 62,773.0 (5,528.0) (4,244.0)
AMERICAN AIRLINE AAL AV 62,773.0 (5,528.0) (4,244.0)
AMERICAN AIRLINE AAL TE 62,773.0 (5,528.0) (4,244.0)
AMERICAN AIRLINE A1G SW 62,773.0 (5,528.0) (4,244.0)
AMERICAN AIRLINE A1G GZ 62,773.0 (5,528.0) (4,244.0)
AMERISOURCEB-BDR A1MB34 BZ 44,274.8 (839.6) (797.4)
AMERISOURCEBERGE ABG TH 44,274.8 (839.6) (797.4)
AMERISOURCEBERGE ABG QT 44,274.8 (839.6) (797.4)
AMERISOURCEBERGE ABG GR 44,274.8 (839.6) (797.4)
AMERISOURCEBERGE ABC US 44,274.8 (839.6) (797.4)
AMERISOURCEBERGE ABC2EUR EU 44,274.8 (839.6) (797.4)
AMERISOURCEBERGE ABG GZ 44,274.8 (839.6) (797.4)
AMYRIS INC 3A01 GR 205.9 (78.7) 27.7
AMYRIS INC 3A01 TH 205.9 (78.7) 27.7
AMYRIS INC AMRS US 205.9 (78.7) 27.7
AMYRIS INC AMRSEUR EU 205.9 (78.7) 27.7
AMYRIS INC 3A01 QT 205.9 (78.7) 27.7
AMYRIS INC 3A01 SW 205.9 (78.7) 27.7
APACHE CORP APA GR 12,875.0 (37.0) 337.0
APACHE CORP APA* MM 12,875.0 (37.0) 337.0
APACHE CORP APA TH 12,875.0 (37.0) 337.0
APACHE CORP APA1 SW 12,875.0 (37.0) 337.0
APACHE CORP APAEUR EU 12,875.0 (37.0) 337.0
APACHE CORP APA QT 12,875.0 (37.0) 337.0
APACHE CORP APA US 12,875.0 (37.0) 337.0
APACHE CORP APA GZ 12,875.0 (37.0) 337.0
APACHE CORP- BDR A1PA34 BZ 12,875.0 (37.0) 337.0
AQUESTIVE THERAP AQST US 50.4 (36.5) 13.3
AUTOZONE INC AZO US 14,568.6 (1,027.0) 380.1
AUTOZONE INC AZ5 GR 14,568.6 (1,027.0) 380.1
AUTOZONE INC AZ5 TH 14,568.6 (1,027.0) 380.1
AUTOZONE INC AZOEUR EU 14,568.6 (1,027.0) 380.1
AUTOZONE INC AZ5 QT 14,568.6 (1,027.0) 380.1
AUTOZONE INC AZ5 GZ 14,568.6 (1,027.0) 380.1
AUTOZONE INC AZO AV 14,568.6 (1,027.0) 380.1
AUTOZONE INC AZ5 TE 14,568.6 (1,027.0) 380.1
AUTOZONE INC AZO* MM 14,568.6 (1,027.0) 380.1
AUTOZONE INC-BDR AZOI34 BZ 14,568.6 (1,027.0) 380.1
AVID TECHNOLOGY AVID US 261.4 (144.2) 11.7
AVID TECHNOLOGY AVD GR 261.4 (144.2) 11.7
AVIS BUD-CEDEAR CAR AR 19,596.0 (76.0) 469.0
AVIS BUDGET GROU CUCA GR 19,596.0 (76.0) 469.0
AVIS BUDGET GROU CAR US 19,596.0 (76.0) 469.0
AVIS BUDGET GROU CAR2EUR EU 19,596.0 (76.0) 469.0
AVIS BUDGET GROU CUCA QT 19,596.0 (76.0) 469.0
AVIS BUDGET GROU CAR* MM 19,596.0 (76.0) 469.0
AVIS BUDGET GROU CUCA TH 19,596.0 (76.0) 469.0
AZIYO BIOLOGIC-A AZYO US 46.1 (18.3) (3.4)
BABCOCK & WILCOX BW US 605.8 (320.8) 116.9
BABCOCK & WILCOX UBW1 GR 605.8 (320.8) 116.9
BABCOCK & WILCOX BWEUR EU 605.8 (320.8) 116.9
BBTV HOLDINGS IN BBTV CN 1.0 (1.2) (0.7)
BBTV HOLDINGS IN BBTOF US 1.0 (1.2) (0.7)
BELLRING BRAND-A BRBR US 653.5 (161.0) 137.1
BELLRING BRAND-A BR6 GR 653.5 (161.0) 137.1
BELLRING BRAND-A BR6 TH 653.5 (161.0) 137.1
BELLRING BRAND-A BR6 GZ 653.5 (161.0) 137.1
BELLRING BRAND-A BRBR1EUR EU 653.5 (161.0) 137.1
BIGCOMMERCE-1 BIGC US 235.5 158.5 160.4
BIGCOMMERCE-1 BI1 GR 235.5 158.5 160.4
BIGCOMMERCE-1 BI1 GZ 235.5 158.5 160.4
BIGCOMMERCE-1 BI1 TH 235.5 158.5 160.4
BIGCOMMERCE-1 BIGCEUR EU 235.5 158.5 160.4
BIGCOMMERCE-1 BI1 QT 235.5 158.5 160.4
BIODESIX INC BDSX US 46.5 (61.2) (38.4)
BIOHAVEN PHARMAC BHVN US 782.0 (153.8) 491.2
BIOHAVEN PHARMAC 2VN GR 782.0 (153.8) 491.2
BIOHAVEN PHARMAC BHVNEUR EU 782.0 (153.8) 491.2
BIOHAVEN PHARMAC 2VN TH 782.0 (153.8) 491.2
BIONOVATE TECHNO BIIO US - (0.4) (0.4)
BLACK IRON INC BKIN MM 2.3 (1.3) 1.6
BLUE BIRD CORP BLBD US 317.4 (53.2) 5.2
BLUE BIRD CORP 4RB GR 317.4 (53.2) 5.2
BLUE BIRD CORP BLBDEUR EU 317.4 (53.2) 5.2
BLUE BIRD CORP 4RB GZ 317.4 (53.2) 5.2
BOEING CO-BDR BOEI34 BZ 161,261.0 (11,553.0) 38,705.0
BOEING CO-CED BAD AR 161,261.0 (11,553.0) 38,705.0
BOEING CO-CED BA AR 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BA PE 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BOE LN 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BA US 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BCO TH 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BOEI BB 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BA SW 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BA* MM 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BA TE 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BCO GR 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BAEUR EU 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BCO QT 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BA EU 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BA CI 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BA AV 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BAUSD SW 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE BCO GZ 161,261.0 (11,553.0) 38,705.0
BOEING CO/THE TR TCXBOE AU 161,261.0 (11,553.0) 38,705.0
BOMBARDIER INC-B BBDBN MM 24,109.0 (6,448.0) 791.0
BONE BIOLOGICS C BBLG US 0.0 (11.9) (0.5)
BRINKER INTL BKJ GR 2,335.3 (465.1) (269.9)
BRINKER INTL EAT US 2,335.3 (465.1) (269.9)
BRINKER INTL BKJ TH 2,335.3 (465.1) (269.9)
BRINKER INTL EAT2EUR EU 2,335.3 (465.1) (269.9)
BRINKER INTL BKJ QT 2,335.3 (465.1) (269.9)
BRP INC/CA-SUB V B15A GR 4,240.0 (666.0) 759.8
BRP INC/CA-SUB V DOOO US 4,240.0 (666.0) 759.8
BRP INC/CA-SUB V DOOEUR EU 4,240.0 (666.0) 759.8
BRP INC/CA-SUB V B15A GZ 4,240.0 (666.0) 759.8
BRP INC/CA-SUB V DOO CN 4,240.0 (666.0) 759.8
CADIZ INC CDZI US 73.4 (22.5) 5.1
CADIZ INC 2ZC GR 73.4 (22.5) 5.1
CADIZ INC CDZIEUR EU 73.4 (22.5) 5.1
CALIFORNIA RESOU CRC US 4,856.0 (1,581.0) (774.0)
CALIFORNIA RESOU 1CLD GR 4,856.0 (1,581.0) (774.0)
CALIFORNIA RESOU 1CLD QT 4,856.0 (1,581.0) (774.0)
CALIFORNIA RESOU CRC1EUR EU 4,856.0 (1,581.0) (774.0)
CALUMET SPECIALT CLMT US 1,807.5 (44.8) 69.3
CAP SENIOR LIVIN CSU2EUR EU 740.5 (259.0) (305.6)
CDK GLOBAL INC C2G TH 2,915.7 (514.5) (88.2)
CDK GLOBAL INC CDKEUR EU 2,915.7 (514.5) (88.2)
CDK GLOBAL INC C2G GR 2,915.7 (514.5) (88.2)
CDK GLOBAL INC CDK US 2,915.7 (514.5) (88.2)
CDK GLOBAL INC CDK* MM 2,915.7 (514.5) (88.2)
CDK GLOBAL INC C2G QT 2,915.7 (514.5) (88.2)
CEDAR FAIR LP FUN US 2,501.5 (551.3) 43.1
CENGAGE LEARNING CNGO US 2,849.9 (153.0) 161.4
CENTRUS ENERGY-A 4CU GR 468.2 (275.6) 70.5
CENTRUS ENERGY-A LEUEUR EU 468.2 (275.6) 70.5
CENTRUS ENERGY-A LEU US 468.2 (275.6) 70.5
CEREVEL THERAPEU CERE US 150.5 142.6 (1.7)
CHEWY INC- CL A CHWY US 1,643.2 (56.4) (182.2)
CHEWY INC- CL A CHWY* MM 1,643.2 (56.4) (182.2)
CHOICE HOTELS CZH GR 1,570.1 (21.4) 163.2
CHOICE HOTELS CHH US 1,570.1 (21.4) 163.2
CHUN CAN CAPITAL CNCN US - (0.0) (0.0)
CINCINNATI BELL CBB US 2,563.8 (204.5) (88.5)
CINCINNATI BELL CIB1 GR 2,563.8 (204.5) (88.5)
CINCINNATI BELL CBBEUR EU 2,563.8 (204.5) (88.5)
CLOVER HEALTH IN CLOV US 828.7 797.9 (1.2)
CLOVIS ONCOLOGY C6O GR 593.1 (163.4) 165.3
CLOVIS ONCOLOGY CLVS US 593.1 (163.4) 165.3
CLOVIS ONCOLOGY CLVSEUR EU 593.1 (163.4) 165.3
CLOVIS ONCOLOGY C6O TH 593.1 (163.4) 165.3
CLOVIS ONCOLOGY C6O QT 593.1 (163.4) 165.3
CLOVIS ONCOLOGY C6O GZ 593.1 (163.4) 165.3
CODIAK BIOSCIENC CDAK US 110.4 (44.0) 18.0
CODIAK BIOSCIENC 32W TH 110.4 (44.0) 18.0
CODIAK BIOSCIENC 32W GR 110.4 (44.0) 18.0
CODIAK BIOSCIENC CDAKEUR EU 110.4 (44.0) 18.0
CODIAK BIOSCIENC 32W QT 110.4 (44.0) 18.0
COGENT COMMUNICA OGM1 GR 1,000.9 (260.7) 380.1
COGENT COMMUNICA CCOI US 1,000.9 (260.7) 380.1
COGENT COMMUNICA CCOIEUR EU 1,000.9 (260.7) 380.1
COGENT COMMUNICA CCOI* MM 1,000.9 (260.7) 380.1
COMMUNITY HEALTH CYH US 16,516.0 (1,476.0) 1,063.0
COMMUNITY HEALTH CG5 GR 16,516.0 (1,476.0) 1,063.0
COMMUNITY HEALTH CG5 TH 16,516.0 (1,476.0) 1,063.0
COMMUNITY HEALTH CYH1EUR EU 16,516.0 (1,476.0) 1,063.0
COMMUNITY HEALTH CG5 QT 16,516.0 (1,476.0) 1,063.0
CONVERGE TECHNOL CTS2EUR EU 493.1 48.3 (105.8)
CONVERGE TECHNOL 0ZB GZ 493.1 48.3 (105.8)
CONVERGE TECHNOL CTS CN 493.1 48.3 (105.8)
CONVERGE TECHNOL 0ZB GR 493.1 48.3 (105.8)
CONVERGE TECHNOL CTSDF US 493.1 48.3 (105.8)
CROWN ELECTROKIN CRKN US 1.0 (6.6) (6.9)
CURIS INC CRIS US 45.7 (28.6) 19.2
CURIS INC CUSA GR 45.7 (28.6) 19.2
CURIS INC CUSA TH 45.7 (28.6) 19.2
CURIS INC CRISEUR EU 45.7 (28.6) 19.2
CYTODYN INC CYDY US 143.8 (6.5) 15.1
CYTODYN INC 296 GR 143.8 (6.5) 15.1
CYTODYN INC CYDYEUR EU 143.8 (6.5) 15.1
CYTODYN INC 296 GZ 143.8 (6.5) 15.1
DEEP LAKE CAPITA DLCAU US - - -
DELEK LOGISTICS DKL US 957.6 (111.5) 11.7
DENNY'S CORP DENN US 450.8 (138.4) (15.3)
DENNY'S CORP DE8 TH 450.8 (138.4) (15.3)
DENNY'S CORP DE8 GR 450.8 (138.4) (15.3)
DENNY'S CORP DENNEUR EU 450.8 (138.4) (15.3)
DIEBOLD NIXDORF DBD QT 3,627.8 (811.7) 391.4
DIEBOLD NIXDORF DBD TH 3,627.8 (811.7) 391.4
DIEBOLD NIXDORF DBD SW 3,627.8 (811.7) 391.4
DIEBOLD NIXDORF DBD GR 3,627.8 (811.7) 391.4
DIEBOLD NIXDORF DBD US 3,627.8 (811.7) 391.4
DIEBOLD NIXDORF DBDEUR EU 3,627.8 (811.7) 391.4
DIEBOLD NIXDORF DBD GZ 3,627.8 (811.7) 391.4
DINE BRANDS GLOB DIN US 2,070.9 (356.4) 203.3
DINE BRANDS GLOB IHP GR 2,070.9 (356.4) 203.3
DINE BRANDS GLOB IHP TH 2,070.9 (356.4) 203.3
DOMINO'S PIZZA DPZ US 1,620.9 (3,211.5) 468.0
DOMINO'S PIZZA EZV GR 1,620.9 (3,211.5) 468.0
DOMINO'S PIZZA EZV TH 1,620.9 (3,211.5) 468.0
DOMINO'S PIZZA EZV QT 1,620.9 (3,211.5) 468.0
DOMINO'S PIZZA EZV GZ 1,620.9 (3,211.5) 468.0
DOMINO'S PIZZA DPZEUR EU 1,620.9 (3,211.5) 468.0
DOMINO'S PIZZA DPZ AV 1,620.9 (3,211.5) 468.0
DOMINO'S PIZZA DPZ* MM 1,620.9 (3,211.5) 468.0
DOMO INC- CL B DOMO US 193.1 (78.5) (14.2)
DOMO INC- CL B 1ON GR 193.1 (78.5) (14.2)
DOMO INC- CL B DOMOEUR EU 193.1 (78.5) (14.2)
DOMO INC- CL B 1ON GZ 193.1 (78.5) (14.2)
DOMO INC- CL B 1ON TH 193.1 (78.5) (14.2)
DYE & DURHAM LTD DND CN 271.9 112.3 0.8
DYE & DURHAM LTD DYNDF US 271.9 112.3 0.8
EOS ENERGY ENTER EOSE US 177.3 175.5 (1.3)
EVERI HOLDINGS I EVRI US 1,458.2 (15.4) 89.9
EVERI HOLDINGS I G2C GR 1,458.2 (15.4) 89.9
EVERI HOLDINGS I G2C TH 1,458.2 (15.4) 89.9
EVERI HOLDINGS I EVRIEUR EU 1,458.2 (15.4) 89.9
FATHOM HOLDINGS FTHM US 35.2 30.3 29.7
FLEXION THERAPEU FLXN US 263.4 (3.1) 186.2
FLEXION THERAPEU F02 GR 263.4 (3.1) 186.2
FLEXION THERAPEU F02 TH 263.4 (3.1) 186.2
FLEXION THERAPEU FLXNEUR EU 263.4 (3.1) 186.2
FLEXION THERAPEU F02 QT 263.4 (3.1) 186.2
FRONTDOOR IN FTDR US 1,407.0 (71.0) 211.0
FRONTDOOR IN 3I5 GR 1,407.0 (71.0) 211.0
FRONTDOOR IN FTDREUR EU 1,407.0 (71.0) 211.0
FTS INTERNAT-A FTSI US 452.2 (84.0) 187.2
FTS INTERNAT-A FT5 GR 452.2 (84.0) 187.2
FTS INTERNAT-A FTSI1EUR EU 452.2 (84.0) 187.2
GCM GROSVENOR-A GCMG US - - -
GODADDY INC-A 38D GR 6,207.8 (163.8) (1,101.8)
GODADDY INC-A 38D QT 6,207.8 (163.8) (1,101.8)
GODADDY INC-A GDDY US 6,207.8 (163.8) (1,101.8)
GODADDY INC-A 38D TH 6,207.8 (163.8) (1,101.8)
GODADDY INC-A GDDY* MM 6,207.8 (163.8) (1,101.8)
GOGO INC GOGO US 984.5 (647.2) 363.1
GOGO INC G0G QT 984.5 (647.2) 363.1
GOGO INC G0G GR 984.5 (647.2) 363.1
GOGO INC G0G TH 984.5 (647.2) 363.1
GOGO INC GOGOEUR EU 984.5 (647.2) 363.1
GOGO INC G0G GZ 984.5 (647.2) 363.1
GOOSEHEAD INSU-A 2OX GR 120.0 (49.4) 25.2
GOOSEHEAD INSU-A GSHDEUR EU 120.0 (49.4) 25.2
GOOSEHEAD INSU-A GSHD US 120.0 (49.4) 25.2
GRAFTECH INTERNA G6G GZ 1,467.6 (472.1) 445.4
GRAFTECH INTERNA EAF US 1,467.6 (472.1) 445.4
GRAFTECH INTERNA G6G GR 1,467.6 (472.1) 445.4
GRAFTECH INTERNA G6G TH 1,467.6 (472.1) 445.4
GRAFTECH INTERNA EAFEUR EU 1,467.6 (472.1) 445.4
GRAFTECH INTERNA G6G QT 1,467.6 (472.1) 445.4
GREEN PLAINS PAR GPP US 103.9 (61.6) (37.0)
GREENSKY INC-A GSKY US 1,461.9 (205.9) 784.2
GURU ORGANIC ENE GURU CN 0.0 (0.0) (0.0)
GURU ORGANIC ENE GUROF US 0.0 (0.0) (0.0)
H&R BLOCK - BDR H1RB34 BZ 2,556.4 (280.0) 40.3
H&R BLOCK INC HRB TH 2,556.4 (280.0) 40.3
H&R BLOCK INC HRB US 2,556.4 (280.0) 40.3
H&R BLOCK INC HRB GR 2,556.4 (280.0) 40.3
H&R BLOCK INC HRB QT 2,556.4 (280.0) 40.3
H&R BLOCK INC HRBEUR EU 2,556.4 (280.0) 40.3
H&R BLOCK INC HRBCHF SW 2,556.4 (280.0) 40.3
HERBALIFE NUTRIT HLF US 2,921.2 (912.9) 639.4
HERBALIFE NUTRIT HLFEUR EU 2,921.2 (912.9) 639.4
HERBALIFE NUTRIT HOO QT 2,921.2 (912.9) 639.4
HERBALIFE NUTRIT HOO GR 2,921.2 (912.9) 639.4
HERBALIFE NUTRIT HOO TH 2,921.2 (912.9) 639.4
HERBALIFE NUTRIT HOO GZ 2,921.2 (912.9) 639.4
HEWLETT-CEDEAR HPQ AR 34,681.0 (2,228.0) (5,572.0)
HEWLETT-CEDEAR HPQD AR 34,681.0 (2,228.0) (5,572.0)
HEWLETT-CEDEAR HPQC AR 34,681.0 (2,228.0) (5,572.0)
HILTON WORLD-BDR H1LT34 BZ 17,129.0 (1,319.0) 2,285.0
HILTON WORLDWIDE HI91 QT 17,129.0 (1,319.0) 2,285.0
HILTON WORLDWIDE HLT US 17,129.0 (1,319.0) 2,285.0
HILTON WORLDWIDE HI91 TH 17,129.0 (1,319.0) 2,285.0
HILTON WORLDWIDE HI91 GR 17,129.0 (1,319.0) 2,285.0
HILTON WORLDWIDE HLTW AV 17,129.0 (1,319.0) 2,285.0
HILTON WORLDWIDE HLT* MM 17,129.0 (1,319.0) 2,285.0
HILTON WORLDWIDE HI91 TE 17,129.0 (1,319.0) 2,285.0
HILTON WORLDWIDE HLTEUR EU 17,129.0 (1,319.0) 2,285.0
HILTON WORLDWIDE HI91 GZ 17,129.0 (1,319.0) 2,285.0
HORIZON GLOBAL HZN US 458.0 (22.1) 91.8
HORIZON GLOBAL 2H6 GR 458.0 (22.1) 91.8
HORIZON GLOBAL HZN1EUR EU 458.0 (22.1) 91.8
HOVNANIAN ENT-A HOV US 1,827.3 (436.1) 829.0
HOVNANIAN ENT-A HO3A GR 1,827.3 (436.1) 829.0
HOVNANIAN ENT-A HOVEUR EU 1,827.3 (436.1) 829.0
HP COMPANY-BDR HPQB34 BZ 34,681.0 (2,228.0) (5,572.0)
HP INC HPQ TE 34,681.0 (2,228.0) (5,572.0)
HP INC HPQ US 34,681.0 (2,228.0) (5,572.0)
HP INC 7HP TH 34,681.0 (2,228.0) (5,572.0)
HP INC 7HP GR 34,681.0 (2,228.0) (5,572.0)
HP INC HPQ SW 34,681.0 (2,228.0) (5,572.0)
HP INC 7HP QT 34,681.0 (2,228.0) (5,572.0)
HP INC HPQ CI 34,681.0 (2,228.0) (5,572.0)
HP INC HPQ* MM 34,681.0 (2,228.0) (5,572.0)
HP INC HPQ AV 34,681.0 (2,228.0) (5,572.0)
HP INC HPQUSD SW 34,681.0 (2,228.0) (5,572.0)
HP INC HPQEUR EU 34,681.0 (2,228.0) (5,572.0)
HP INC 7HP GZ 34,681.0 (2,228.0) (5,572.0)
IAA INC IAA US 2,388.8 (3.6) 352.4
IAA INC 3NI GR 2,388.8 (3.6) 352.4
IAA INC IAA-WEUR EU 2,388.8 (3.6) 352.4
IDERA PHARMACEUT HXXB GR 32.3 (32.4) 24.4
IDERA PHARMACEUT IDRA US 32.3 (32.4) 24.4
IDERA PHARMACEUT HXXB TH 32.3 (32.4) 24.4
IDERA PHARMACEUT HXXB QT 32.3 (32.4) 24.4
IMMUNOGEN INC IMGN US 248.0 (42.9) 119.5
IMMUNOGEN INC IMU GR 248.0 (42.9) 119.5
IMMUNOGEN INC IMU TH 248.0 (42.9) 119.5
IMMUNOGEN INC IMU QT 248.0 (42.9) 119.5
IMMUNOGEN INC IMU SW 248.0 (42.9) 119.5
IMMUNOGEN INC IMGNEUR EU 248.0 (42.9) 119.5
IMMUNOGEN INC IMGN* MM 248.0 (42.9) 119.5
IMMUNOGEN INC IMU GZ 248.0 (42.9) 119.5
IMMUNOME INC IMNM US 12.0 (0.7) 2.1
INFINITY PHARMAC I3F GR 47.0 (14.1) 33.6
INFINITY PHARMAC INFI US 47.0 (14.1) 33.6
INFINITY PHARMAC INFI1EUR EU 47.0 (14.1) 33.6
INFINITY PHARMAC I3F GZ 47.0 (14.1) 33.6
INFINITY PHARMAC I3F TH 47.0 (14.1) 33.6
INFINITY PHARMAC I3F QT 47.0 (14.1) 33.6
INFRASTRUCTURE A IEA US 722.4 (72.1) 97.1
INFRASTRUCTURE A IEAEUR EU 722.4 (72.1) 97.1
INFRASTRUCTURE A 5YF GR 722.4 (72.1) 97.1
INHIBRX INC INBX US 143.6 91.7 97.1
INHIBRX INC 1RK GR 143.6 91.7 97.1
INHIBRX INC 1RK TH 143.6 91.7 97.1
INHIBRX INC INBXEUR EU 143.6 91.7 97.1
INHIBRX INC 1RK QT 143.6 91.7 97.1
INSEEGO CORP INO TH 223.7 (27.2) 40.7
INSEEGO CORP INO QT 223.7 (27.2) 40.7
INSEEGO CORP INO GZ 223.7 (27.2) 40.7
INSEEGO CORP INSG US 223.7 (27.2) 40.7
INSEEGO CORP INO GR 223.7 (27.2) 40.7
INSEEGO CORP INSGEUR EU 223.7 (27.2) 40.7
INSPIRED ENTERTA INSE US 320.3 (95.0) 10.3
INTERCEPT PHARMA I4P TH 591.4 (130.3) 398.0
INTERCEPT PHARMA ICPT US 591.4 (130.3) 398.0
INTERCEPT PHARMA I4P GR 591.4 (130.3) 398.0
INTERCEPT PHARMA ICPT* MM 591.4 (130.3) 398.0
INTERCEPT PHARMA I4P GZ 591.4 (130.3) 398.0
JACK IN THE BOX JBX GR 1,906.5 (793.4) (4.8)
JACK IN THE BOX JACK US 1,906.5 (793.4) (4.8)
JACK IN THE BOX JACK1EUR EU 1,906.5 (793.4) (4.8)
JACK IN THE BOX JBX GZ 1,906.5 (793.4) (4.8)
JACK IN THE BOX JBX QT 1,906.5 (793.4) (4.8)
JOSEMARIA RESOUR JOSE SS 28.8 (9.4) (18.4)
JOSEMARIA RESOUR NGQSEK EU 28.8 (9.4) (18.4)
JOSEMARIA RESOUR JOSES IX 28.8 (9.4) (18.4)
JOSEMARIA RESOUR JOSES EB 28.8 (9.4) (18.4)
JOSEMARIA RESOUR JOSES I2 28.8 (9.4) (18.4)
JUST ENERGY GROU JE CN 1,137.7 (170.7) (33.8)
JUST ENERGY GROU 1JE GR 1,137.7 (170.7) (33.8)
JUST ENERGY GROU JE US 1,137.7 (170.7) (33.8)
JUST ENERGY GROU JEEUR EU 1,137.7 (170.7) (33.8)
JUST ENERGY GROU 1JE1 TH 1,137.7 (170.7) (33.8)
L BRANDS INC LTD GR 11,161.0 (1,564.0) 1,597.0
L BRANDS INC LB US 11,161.0 (1,564.0) 1,597.0
L BRANDS INC LTD TH 11,161.0 (1,564.0) 1,597.0
L BRANDS INC LBEUR EU 11,161.0 (1,564.0) 1,597.0
L BRANDS INC LB* MM 11,161.0 (1,564.0) 1,597.0
L BRANDS INC LTD QT 11,161.0 (1,564.0) 1,597.0
L BRANDS INC LTD SW 11,161.0 (1,564.0) 1,597.0
L BRANDS INC LBRA AV 11,161.0 (1,564.0) 1,597.0
L BRANDS INC-BDR LBRN34 BZ 11,161.0 (1,564.0) 1,597.0
LA JOLLA PHARM LJPC US 80.7 (85.5) 23.4
LENNOX INTL INC LXI GR 1,981.2 (115.7) 353.0
LENNOX INTL INC LII US 1,981.2 (115.7) 353.0
LENNOX INTL INC LII* MM 1,981.2 (115.7) 353.0
LENNOX INTL INC LXI TH 1,981.2 (115.7) 353.0
LENNOX INTL INC LII1EUR EU 1,981.2 (115.7) 353.0
LESLIE'S INC LESL US 746.4 (827.0) 113.9
LESLIE'S INC LE3 GR 746.4 (827.0) 113.9
LESLIE'S INC LESLEUR EU 746.4 (827.0) 113.9
LESLIE'S INC LE3 TH 746.4 (827.0) 113.9
LESLIE'S INC LE3 QT 746.4 (827.0) 113.9
MADISON SQUARE G MSGS US 1,219.4 (239.9) (216.3)
MADISON SQUARE G MS8 GR 1,219.4 (239.9) (216.3)
MADISON SQUARE G MSG1EUR EU 1,219.4 (239.9) (216.3)
MANNKIND CORP MNKD US 95.7 (186.4) (39.8)
MANNKIND CORP NNFN SW 95.7 (186.4) (39.8)
MCAFEE CORP - A MCFE US 5,553.0 (2,323.0) (1,182.0)
MCAFEE CORP - A MC7 GR 5,553.0 (2,323.0) (1,182.0)
MCAFEE CORP - A MCFEEUR EU 5,553.0 (2,323.0) (1,182.0)
MCDONALD'S CORP TCXMCD AU 50,699.3 (8,472.1) 455.9
MCDONALDS - BDR MCDC34 BZ 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MDO TH 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MCD US 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MCD SW 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MDO GR 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MCD* MM 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MCD TE 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MDO QT 50,699.3 (8,472.1) 455.9
MCDONALDS CORP 0R16 LN 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MCD CI 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MCD AV 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MCDUSD SW 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MCDEUR EU 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MDO GZ 50,699.3 (8,472.1) 455.9
MCDONALDS CORP MCD PE 50,699.3 (8,472.1) 455.9
MCDONALDS-CEDEAR MCD AR 50,699.3 (8,472.1) 455.9
MCDONALDS-CEDEAR MCDC AR 50,699.3 (8,472.1) 455.9
MCDONALDS-CEDEAR MCDD AR 50,699.3 (8,472.1) 455.9
MEDIAALPHA INC-A MAX US 133.8 (146.6) (4.0)
MEDLEY MANAGE-A MDLY US 38.7 (132.0) (15.2)
MEDLEY MANAGE-A 731 GR 38.7 (132.0) (15.2)
MERCER PARK BR-A MRCQF US 411.4 (7.6) 2.7
MERCER PARK BR-A BRND/A/U CN 411.4 (7.6) 2.7
MICHAELS COS INC MIK US 4,263.3 (1,389.9) 381.9
MICHAELS COS INC MIM GR 4,263.3 (1,389.9) 381.9
MICHAELS COS INC MIM TH 4,263.3 (1,389.9) 381.9
MICHAELS COS INC MIKEUR EU 4,263.3 (1,389.9) 381.9
MICHAELS COS INC MIM QT 4,263.3 (1,389.9) 381.9
MICHAELS COS INC MIM GZ 4,263.3 (1,389.9) 381.9
MICROVISION INC MVIN TH 9.0 (4.2) (5.8)
MICROVISION INC MVIS US 9.0 (4.2) (5.8)
MICROVISION INC MVIN GR 9.0 (4.2) (5.8)
MICROVISION INC MVISEUR EU 9.0 (4.2) (5.8)
MICROVISION INC MVIN GZ 9.0 (4.2) (5.8)
MICROVISION INC MVIN QT 9.0 (4.2) (5.8)
MILESTONE MEDICA MMDPLN EU 1.0 (16.3) (16.3)
MILESTONE MEDICA MMD PW 1.0 (16.3) (16.3)
MOGO INC MOGO CN 101.5 (3.3) -
MONEYGRAM INTERN MGI US 4,494.0 (249.1) (94.5)
MONEYGRAM INTERN 9M1N GR 4,494.0 (249.1) (94.5)
MONEYGRAM INTERN 9M1N QT 4,494.0 (249.1) (94.5)
MONEYGRAM INTERN 9M1N TH 4,494.0 (249.1) (94.5)
MONEYGRAM INTERN MGIEUR EU 4,494.0 (249.1) (94.5)
MONTES ARCHIM-A MAAC US 0.5 (0.0) (0.5)
MONTES ARCHIMEDE MAACU US 0.5 (0.0) (0.5)
MOTOROLA SOL-BDR M1SI34 BZ 10,361.0 (740.0) 659.0
MOTOROLA SOL-CED MSI AR 10,361.0 (740.0) 659.0
MOTOROLA SOLUTIO MTLA GR 10,361.0 (740.0) 659.0
MOTOROLA SOLUTIO MOT TE 10,361.0 (740.0) 659.0
MOTOROLA SOLUTIO MSI US 10,361.0 (740.0) 659.0
MOTOROLA SOLUTIO MTLA TH 10,361.0 (740.0) 659.0
MOTOROLA SOLUTIO MTLA QT 10,361.0 (740.0) 659.0
MOTOROLA SOLUTIO MOSI AV 10,361.0 (740.0) 659.0
MOTOROLA SOLUTIO MSI1EUR EU 10,361.0 (740.0) 659.0
MOTOROLA SOLUTIO MTLA GZ 10,361.0 (740.0) 659.0
MSCI INC MSCI US 4,111.7 (386.6) 1,008.2
MSCI INC 3HM GR 4,111.7 (386.6) 1,008.2
MSCI INC 3HM GZ 4,111.7 (386.6) 1,008.2
MSCI INC 3HM SW 4,111.7 (386.6) 1,008.2
MSCI INC MSCI* MM 4,111.7 (386.6) 1,008.2
MSCI INC 3HM QT 4,111.7 (386.6) 1,008.2
MSCI INC 3HM TH 4,111.7 (386.6) 1,008.2
MSCI INC-BDR M1SC34 BZ 4,111.7 (386.6) 1,008.2
MSG NETWORKS- A MSGN US 893.6 (515.7) 294.3
MSG NETWORKS- A 1M4 TH 893.6 (515.7) 294.3
MSG NETWORKS- A 1M4 GR 893.6 (515.7) 294.3
MSG NETWORKS- A 1M4 QT 893.6 (515.7) 294.3
MSG NETWORKS- A MSGNEUR EU 893.6 (515.7) 294.3
NANTHEALTH INC NEL TH 209.0 (92.3) 10.2
NANTHEALTH INC NH US 209.0 (92.3) 10.2
NANTHEALTH INC NHEUR EU 209.0 (92.3) 10.2
NANTHEALTH INC NEL GZ 209.0 (92.3) 10.2
NATHANS FAMOUS NATH US 106.3 (63.1) 79.0
NATHANS FAMOUS NFA GR 106.3 (63.1) 79.0
NATHANS FAMOUS NATHEUR EU 106.3 (63.1) 79.0
NATIONAL CINEMED NCMI US 1,097.8 (210.4) 183.0
NAVISTAR INTL IHR TH 6,637.0 (3,822.0) 1,206.0
NAVISTAR INTL NAVEUR EU 6,637.0 (3,822.0) 1,206.0
NAVISTAR INTL NAV US 6,637.0 (3,822.0) 1,206.0
NAVISTAR INTL IHR GR 6,637.0 (3,822.0) 1,206.0
NAVISTAR INTL IHR QT 6,637.0 (3,822.0) 1,206.0
NAVISTAR INTL IHR GZ 6,637.0 (3,822.0) 1,206.0
NESCO HOLDINGS I NSCO US 769.5 (24.4) 54.0
NEW ENG RLTY-LP NEN US 293.1 (39.3) -
NORTHERN OIL AND NOG US 1,025.5 (83.7) 13.3
NORTHERN OIL AND 4LT1 GR 1,025.5 (83.7) 13.3
NORTHERN OIL AND NOG1EUR EU 1,025.5 (83.7) 13.3
NORTONLIFEL- BDR S1YM34 BZ 6,313.0 (476.0) 44.0
NORTONLIFELOCK I NLOK US 6,313.0 (476.0) 44.0
NORTONLIFELOCK I SYM TH 6,313.0 (476.0) 44.0
NORTONLIFELOCK I SYM GR 6,313.0 (476.0) 44.0
NORTONLIFELOCK I SYMC TE 6,313.0 (476.0) 44.0
NORTONLIFELOCK I SYM QT 6,313.0 (476.0) 44.0
NORTONLIFELOCK I SYMC AV 6,313.0 (476.0) 44.0
NORTONLIFELOCK I NLOK* MM 6,313.0 (476.0) 44.0
NORTONLIFELOCK I SYMCEUR EU 6,313.0 (476.0) 44.0
NORTONLIFELOCK I SYM GZ 6,313.0 (476.0) 44.0
NUTANIX INC - A NTNX US 2,315.9 (557.4) 854.5
NUTANIX INC - A 0NU SW 2,315.9 (557.4) 854.5
NUTANIX INC - A 0NU GZ 2,315.9 (557.4) 854.5
NUTANIX INC - A 0NU GR 2,315.9 (557.4) 854.5
NUTANIX INC - A NTNXEUR EU 2,315.9 (557.4) 854.5
NUTANIX INC - A 0NU TH 2,315.9 (557.4) 854.5
NUTANIX INC - A 0NU QT 2,315.9 (557.4) 854.5
OASIS PETROLEUM OAS US 2,506.8 (638.2) (235.9)
OASIS PETROLEUM OS70 GR 2,506.8 (638.2) (235.9)
OASIS PETROLEUM OAS1EUR EU 2,506.8 (638.2) (235.9)
OCULAR THERAPEUT 0OT GR 98.2 (4.1) 59.0
OCULAR THERAPEUT OCUL US 98.2 (4.1) 59.0
OCULAR THERAPEUT 0OT GZ 98.2 (4.1) 59.0
OCULAR THERAPEUT 0OT TH 98.2 (4.1) 59.0
OCULAR THERAPEUT OCULEUR EU 98.2 (4.1) 59.0
OLEMA PHARMACEUT OLMA US 0.1 (1.2) (1.3)
OMEROS CORP OMER US 227.1 (87.3) 148.3
OMEROS CORP 3O8 GR 227.1 (87.3) 148.3
OMEROS CORP 3O8 TH 227.1 (87.3) 148.3
OMEROS CORP OMEREUR EU 227.1 (87.3) 148.3
OMEROS CORP 3O8 QT 227.1 (87.3) 148.3
ONDAS HOLDINGS I ONDS US 2.6 (16.4) (16.3)
OPENDOOR TECHNOL OPEN US 414.7 394.7 (4.9)
OPTIVA INC OPT CN 84.2 (82.4) 3.3
OPTIVA INC RKNEF US 84.2 (82.4) 3.3
OTIS WORLDWI OTIS US 10,473.0 (3,383.0) (20.0)
OTIS WORLDWI 4PG GR 10,473.0 (3,383.0) (20.0)
OTIS WORLDWI OTISEUR EU 10,473.0 (3,383.0) (20.0)
OTIS WORLDWI 4PG GZ 10,473.0 (3,383.0) (20.0)
OTIS WORLDWI OTIS* MM 10,473.0 (3,383.0) (20.0)
OTIS WORLDWI 4PG TH 10,473.0 (3,383.0) (20.0)
OTIS WORLDWI 4PG QT 10,473.0 (3,383.0) (20.0)
OTIS WORLDWI-BDR O1TI34 BZ 10,473.0 (3,383.0) (20.0)
PAPA JOHN'S INTL PZZA US 816.7 (14.1) 19.4
PAPA JOHN'S INTL PP1 GR 816.7 (14.1) 19.4
PAPA JOHN'S INTL PZZAEUR EU 816.7 (14.1) 19.4
PAPA JOHN'S INTL PP1 GZ 816.7 (14.1) 19.4
PAPA JOHN'S INTL PP1 TH 816.7 (14.1) 19.4
PAPA JOHN'S INTL PP1 QT 816.7 (14.1) 19.4
PARATEK PHARMACE PRTK US 198.7 (79.9) 172.1
PARATEK PHARMACE N4CN GR 198.7 (79.9) 172.1
PARATEK PHARMACE N4CN TH 198.7 (79.9) 172.1
PHILIP MORRI-BDR PHMO34 BZ 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN 4I1 GR 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN PM US 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN PM1CHF EU 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN 4I1 TH 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN PM1 TE 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN PMI SW 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN PM1EUR EU 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN 4I1 QT 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN PMIZ EB 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN PMIZ IX 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN 0M8V LN 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN PMOR AV 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN PM* MM 39,129.0 (10,245.0) 1,928.0
PHILIP MORRIS IN 4I1 GZ 39,129.0 (10,245.0) 1,928.0
PLANET FITNESS-A PLNT US 1,801.6 (722.9) 440.8
PLANET FITNESS-A 3PL TH 1,801.6 (722.9) 440.8
PLANET FITNESS-A 3PL GR 1,801.6 (722.9) 440.8
PLANET FITNESS-A 3PL QT 1,801.6 (722.9) 440.8
PLANET FITNESS-A PLNT1EUR EU 1,801.6 (722.9) 440.8
PLANET FITNESS-A 3PL GZ 1,801.6 (722.9) 440.8
PLANTRONICS INC PLT US 2,201.5 (145.0) 193.1
PLANTRONICS INC PTM GR 2,201.5 (145.0) 193.1
PLANTRONICS INC PLTEUR EU 2,201.5 (145.0) 193.1
PLANTRONICS INC PTM GZ 2,201.5 (145.0) 193.1
PLANTRONICS INC PTM TH 2,201.5 (145.0) 193.1
PLANTRONICS INC PTM QT 2,201.5 (145.0) 193.1
PPD INC PPD US 6,041.5 (915.2) 203.0
PRIORITY TECHNOL PRTH US 380.4 (98.3) 3.6
PRIORITY TECHNOL PRTHEUR EU 380.4 (98.3) 3.6
PRIORITY TECHNOL 60W GR 380.4 (98.3) 3.6
PROGENITY INC 4ZU TH 119.6 (60.4) 5.7
PROGENITY INC 4ZU GR 119.6 (60.4) 5.7
PROGENITY INC 4ZU QT 119.6 (60.4) 5.7
PROGENITY INC PROGEUR EU 119.6 (60.4) 5.7
PROGENITY INC 4ZU GZ 119.6 (60.4) 5.7
PROGENITY INC PROG US 119.6 (60.4) 5.7
PSOMAGEN INC-KDR 950200 KS 49.5 36.8 25.3
PUMA BIOTECHNOLO PBYI US 261.7 (0.5) 41.6
PUMA BIOTECHNOLO PBYIEUR EU 261.7 (0.5) 41.6
PUMA BIOTECHNOLO 0PB GR 261.7 (0.5) 41.6
PUMA BIOTECHNOLO 0PB TH 261.7 (0.5) 41.6
QUANTUM CORP QNT2 GR 173.3 (196.2) (1.5)
QUANTUM CORP QMCO US 173.3 (196.2) (1.5)
QUANTUM CORP QTM1EUR EU 173.3 (196.2) (1.5)
QUANTUM CORP QNT2 TH 173.3 (196.2) (1.5)
RADIUS HEALTH IN RDUS US 196.0 (108.6) 101.7
RADIUS HEALTH IN 1R8 TH 196.0 (108.6) 101.7
RADIUS HEALTH IN 1R8 QT 196.0 (108.6) 101.7
RADIUS HEALTH IN RDUSEUR EU 196.0 (108.6) 101.7
RADIUS HEALTH IN 1R8 GR 196.0 (108.6) 101.7
REC SILICON ASA RECSIO IX 258.4 (19.2) 47.9
REC SILICON ASA REC SS 258.4 (19.2) 47.9
REC SILICON ASA RECSIO S1 258.4 (19.2) 47.9
REC SILICON ASA RECSIO TQ 258.4 (19.2) 47.9
REC SILICON ASA REC EU 258.4 (19.2) 47.9
REC SILICON ASA RECSIO EB 258.4 (19.2) 47.9
REC SILICON ASA RECSIO S2 258.4 (19.2) 47.9
REC SILICON ASA RECSIO PO 258.4 (19.2) 47.9
REC SILICON ASA RECSIO QX 258.4 (19.2) 47.9
REC SILICON ASA RECSIO B3 258.4 (19.2) 47.9
REC SILICON ASA REC NO 258.4 (19.2) 47.9
REC SILICON ASA RECSIO QE 258.4 (19.2) 47.9
REC SILICON ASA RECSIO T1 258.4 (19.2) 47.9
REC SILICON ASA RECSIO I2 258.4 (19.2) 47.9
REC SILICON ASA RECO S4 258.4 (19.2) 47.9
REVLON INC-A REV US 2,973.3 (1,582.9) (38.9)
REVLON INC-A RVL1 GR 2,973.3 (1,582.9) (38.9)
REVLON INC-A REV* MM 2,973.3 (1,582.9) (38.9)
REVLON INC-A RVL1 TH 2,973.3 (1,582.9) (38.9)
REVLON INC-A REVEUR EU 2,973.3 (1,582.9) (38.9)
RICE ACQUISIT- A RICE US 0.4 (0.1) 0.0
RICE ACQUISITION RICE/U US 0.4 (0.1) 0.0
RIMINI STREET IN RMNI US 220.3 (61.5) (64.7)
SBA COMM CORP SBACEUR EU 9,034.7 (4,471.2) (92.7)
SBA COMM CORP 4SB QT 9,034.7 (4,471.2) (92.7)
SBA COMM CORP 4SB GR 9,034.7 (4,471.2) (92.7)
SBA COMM CORP SBAC US 9,034.7 (4,471.2) (92.7)
SBA COMM CORP 4SB TH 9,034.7 (4,471.2) (92.7)
SBA COMM CORP SBAC* MM 9,034.7 (4,471.2) (92.7)
SBA COMM CORP 4SB GZ 9,034.7 (4,471.2) (92.7)
SBA COMMUN - BDR S1BA34 BZ 9,034.7 (4,471.2) (92.7)
SCIENTIFIC GAMES TJW TH 8,102.0 (2,541.0) 1,424.0
SCIENTIFIC GAMES TJW GZ 8,102.0 (2,541.0) 1,424.0
SCIENTIFIC GAMES SGMS US 8,102.0 (2,541.0) 1,424.0
SCIENTIFIC GAMES TJW GR 8,102.0 (2,541.0) 1,424.0
SCOPUS BIOPHARMA SCPS US 1.0 0.6 0.6
SEAWORLD ENTERTA SEASEUR EU 2,650.2 (66.5) 211.5
SEAWORLD ENTERTA SEAS US 2,650.2 (66.5) 211.5
SEAWORLD ENTERTA W2L GR 2,650.2 (66.5) 211.5
SEAWORLD ENTERTA W2L TH 2,650.2 (66.5) 211.5
SELECTA BIOSCIEN SELB US 181.0 (7.4) 89.5
SHELL MIDSTREAM SHLX US 2,394.0 (414.0) 311.0
SINCLAIR BROAD-A SBGI US 12,483.0 (1,483.0) 1,567.0
SINCLAIR BROAD-A SBTA GR 12,483.0 (1,483.0) 1,567.0
SINCLAIR BROAD-A SBTA TH 12,483.0 (1,483.0) 1,567.0
SINCLAIR BROAD-A SBTA QT 12,483.0 (1,483.0) 1,567.0
SINCLAIR BROAD-A SBGIEUR EU 12,483.0 (1,483.0) 1,567.0
SINCLAIR BROAD-A SBTA GZ 12,483.0 (1,483.0) 1,567.0
SIRIUS XM HO-BDR SRXM34 BZ 10,702.0 (911.0) (2,185.0)
SIRIUS XM HOLDIN SIRI US 10,702.0 (911.0) (2,185.0)
SIRIUS XM HOLDIN RDO GR 10,702.0 (911.0) (2,185.0)
SIRIUS XM HOLDIN RDO TH 10,702.0 (911.0) (2,185.0)
SIRIUS XM HOLDIN RDO QT 10,702.0 (911.0) (2,185.0)
SIRIUS XM HOLDIN SIRI AV 10,702.0 (911.0) (2,185.0)
SIRIUS XM HOLDIN SIRIEUR EU 10,702.0 (911.0) (2,185.0)
SIRIUS XM HOLDIN RDO GZ 10,702.0 (911.0) (2,185.0)
SIX FLAGS ENTERT 6FE GR 2,865.0 (532.7) (46.8)
SIX FLAGS ENTERT SIX US 2,865.0 (532.7) (46.8)
SIX FLAGS ENTERT 6FE QT 2,865.0 (532.7) (46.8)
SIX FLAGS ENTERT 6FE TH 2,865.0 (532.7) (46.8)
SIX FLAGS ENTERT SIXEUR EU 2,865.0 (532.7) (46.8)
SLEEP NUMBER COR SNBR US 780.1 (102.8) (348.2)
SLEEP NUMBER COR SL2 GR 780.1 (102.8) (348.2)
SLEEP NUMBER COR SNBREUR EU 780.1 (102.8) (348.2)
SOTERA HEALTH CO SHC US 2,580.7 (627.5) 128.4
SOTERA HEALTH CO SH5 GR 2,580.7 (627.5) 128.4
SOTERA HEALTH CO SHCEUR EU 2,580.7 (627.5) 128.4
STARBUCKS CORP SRB GR 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SRB TH 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUX US 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUX SW 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SRB QT 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUX* MM 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUX PE 29,374.5 (7,799.4) 459.6
STARBUCKS CORP TCXSBU AU 29,374.5 (7,799.4) 459.6
STARBUCKS CORP USSBUX KZ 29,374.5 (7,799.4) 459.6
STARBUCKS CORP 0QZH LI 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUX CI 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUX AV 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUXEUR EU 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUX TE 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUX IM 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUXUSD SW 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SRB GZ 29,374.5 (7,799.4) 459.6
STARBUCKS CORP SBUXCL CI 29,374.5 (7,799.4) 459.6
STARBUCKS-BDR SBUB34 BZ 29,374.5 (7,799.4) 459.6
STARBUCKS-CEDEAR SBUXD AR 29,374.5 (7,799.4) 459.6
STARBUCKS-CEDEAR SBUX AR 29,374.5 (7,799.4) 459.6
STONEMOR INC STON US 1,626.4 (87.2) 95.7
SUNPOWER CORP S9P2 GR 1,449.3 (7.1) 107.0
SUNPOWER CORP SPWR US 1,449.3 (7.1) 107.0
SUNPOWER CORP S9P2 TH 1,449.3 (7.1) 107.0
SUNPOWER CORP S9P2 QT 1,449.3 (7.1) 107.0
SUNPOWER CORP S9P2 SW 1,449.3 (7.1) 107.0
SUNPOWER CORP S9P2 GZ 1,449.3 (7.1) 107.0
SUNPOWER CORP SPWREUR EU 1,449.3 (7.1) 107.0
TELOS CORP TLS US 85.8 (133.8) (11.3)
TELOS CORP 1C3 GR 85.8 (133.8) (11.3)
TELOS CORP TLS2EUR EU 85.8 (133.8) (11.3)
TENNECO INC-A TNN GR 11,811.0 (43.0) 1,258.0
TENNECO INC-A TEN US 11,811.0 (43.0) 1,258.0
TENNECO INC-A TEN1EUR EU 11,811.0 (43.0) 1,258.0
TENNECO INC-A TNN GZ 11,811.0 (43.0) 1,258.0
TENNECO INC-A TNN TH 11,811.0 (43.0) 1,258.0
TRANSDIGM - BDR T1DG34 BZ 18,395.0 (3,968.0) 5,344.0
TRANSDIGM GROUP TDG US 18,395.0 (3,968.0) 5,344.0
TRANSDIGM GROUP T7D GR 18,395.0 (3,968.0) 5,344.0
TRANSDIGM GROUP TDGEUR EU 18,395.0 (3,968.0) 5,344.0
TRANSDIGM GROUP T7D QT 18,395.0 (3,968.0) 5,344.0
TRANSDIGM GROUP TDG* MM 18,395.0 (3,968.0) 5,344.0
TRANSDIGM GROUP T7D TH 18,395.0 (3,968.0) 5,344.0
TRIUMPH GROUP TGI US 2,533.4 (1,064.4) 790.5
TRIUMPH GROUP TG7 GR 2,533.4 (1,064.4) 790.5
TRIUMPH GROUP TG7 TH 2,533.4 (1,064.4) 790.5
TRIUMPH GROUP TGIEUR EU 2,533.4 (1,064.4) 790.5
TUPPERWARE BRAND TUP GR 1,191.4 (244.0) (655.5)
TUPPERWARE BRAND TUP US 1,191.4 (244.0) (655.5)
TUPPERWARE BRAND TUP QT 1,191.4 (244.0) (655.5)
TUPPERWARE BRAND TUP TH 1,191.4 (244.0) (655.5)
TUPPERWARE BRAND TUP1EUR EU 1,191.4 (244.0) (655.5)
TUPPERWARE BRAND TUP GZ 1,191.4 (244.0) (655.5)
UBIQUITI INC UI US 751.9 (261.9) 334.9
UBIQUITI INC 3UB GR 751.9 (261.9) 334.9
UBIQUITI INC UBNTEUR EU 751.9 (261.9) 334.9
UBIQUITI INC 3UB GZ 751.9 (261.9) 334.9
UNISYS CORP USY1 GR 2,407.4 (200.3) 549.4
UNISYS CORP USY1 TH 2,407.4 (200.3) 549.4
UNISYS CORP UIS US 2,407.4 (200.3) 549.4
UNISYS CORP UIS1 SW 2,407.4 (200.3) 549.4
UNISYS CORP UISEUR EU 2,407.4 (200.3) 549.4
UNISYS CORP UISCHF EU 2,407.4 (200.3) 549.4
UNISYS CORP USY1 GZ 2,407.4 (200.3) 549.4
UNISYS CORP USY1 QT 2,407.4 (200.3) 549.4
UNITI GROUP INC UNIT US 4,838.0 (1,995.1) -
UNITI GROUP INC 8XC GR 4,838.0 (1,995.1) -
UNITI GROUP INC 8XC SW 4,838.0 (1,995.1) -
UNITI GROUP INC 8XC TH 4,838.0 (1,995.1) -
VALVOLINE INC VVV US 3,051.0 (76.0) 994.0
VALVOLINE INC 0V4 GR 3,051.0 (76.0) 994.0
VALVOLINE INC VVVEUR EU 3,051.0 (76.0) 994.0
VALVOLINE INC 0V4 QT 3,051.0 (76.0) 994.0
VECTOR GROUP LTD VGR US 1,443.0 (662.1) 360.6
VECTOR GROUP LTD VGR GR 1,443.0 (662.1) 360.6
VECTOR GROUP LTD VGR QT 1,443.0 (662.1) 360.6
VECTOR GROUP LTD VGR TH 1,443.0 (662.1) 360.6
VECTOR GROUP LTD VGREUR EU 1,443.0 (662.1) 360.6
VECTOR GROUP LTD VGR GZ 1,443.0 (662.1) 360.6
VERISIGN INC VRS TH 1,764.3 (1,386.2) 228.1
VERISIGN INC VRSN US 1,764.3 (1,386.2) 228.1
VERISIGN INC VRS GR 1,764.3 (1,386.2) 228.1
VERISIGN INC VRS QT 1,764.3 (1,386.2) 228.1
VERISIGN INC VRSN* MM 1,764.3 (1,386.2) 228.1
VERISIGN INC VRSNEUR EU 1,764.3 (1,386.2) 228.1
VERISIGN INC VRS GZ 1,764.3 (1,386.2) 228.1
VERISIGN INC-BDR VRSN34 BZ 1,764.3 (1,386.2) 228.1
VERISIGN-CEDEAR VRSN AR 1,764.3 (1,386.2) 228.1
VERY GOOD FOOD C 0SI GR 15.8 9.1 8.1
VERY GOOD FOOD C VERY1EUR EU 15.8 9.1 8.1
VERY GOOD FOOD C VERY CN 15.8 9.1 8.1
VERY GOOD FOOD C VRYYF US 15.8 9.1 8.1
VERY GOOD FOOD C 0SI TH 15.8 9.1 8.1
VERY GOOD FOOD C 0SI GZ 15.8 9.1 8.1
VERY GOOD FOOD C 0SI QT 15.8 9.1 8.1
VIVINT SMART HOM VVNT US 2,924.7 (1,437.3) (300.3)
WARNER MUSIC-A WMG US 6,410.0 (45.0) (1,042.0)
WARNER MUSIC-A WA4 GZ 6,410.0 (45.0) (1,042.0)
WARNER MUSIC-A WMGEUR EU 6,410.0 (45.0) (1,042.0)
WARNER MUSIC-A WA4 GR 6,410.0 (45.0) (1,042.0)
WARNER MUSIC-A WMG AV 6,410.0 (45.0) (1,042.0)
WARNER MUSIC-A WA4 TH 6,410.0 (45.0) (1,042.0)
WARNER MUSIC-BDR W1MG34 BZ 6,410.0 (45.0) (1,042.0)
WATERS CORP WAT US 2,679.3 (41.6) 569.5
WATERS CORP WAZ GR 2,679.3 (41.6) 569.5
WATERS CORP WAZ TH 2,679.3 (41.6) 569.5
WATERS CORP WAZ QT 2,679.3 (41.6) 569.5
WATERS CORP WATEUR EU 2,679.3 (41.6) 569.5
WATERS CORP WAT* MM 2,679.3 (41.6) 569.5
WATERS CORP-BDR WATC34 BZ 2,679.3 (41.6) 569.5
WAYFAIR INC- A W US 4,558.4 (1,459.6) 826.1
WAYFAIR INC- A 1WF GR 4,558.4 (1,459.6) 826.1
WAYFAIR INC- A 1WF TH 4,558.4 (1,459.6) 826.1
WAYFAIR INC- A WEUR EU 4,558.4 (1,459.6) 826.1
WAYFAIR INC- A W* MM 4,558.4 (1,459.6) 826.1
WAYFAIR INC- A 1WF GZ 4,558.4 (1,459.6) 826.1
WAYFAIR INC- A 1WF QT 4,558.4 (1,459.6) 826.1
WIDEOPENWEST INC WOW1EUR EU 2,499.3 (222.5) (100.6)
WIDEOPENWEST INC WU5 QT 2,499.3 (222.5) (100.6)
WIDEOPENWEST INC WU5 GR 2,499.3 (222.5) (100.6)
WIDEOPENWEST INC WU5 TH 2,499.3 (222.5) (100.6)
WIDEOPENWEST INC WOW US 2,499.3 (222.5) (100.6)
WINGSTOP INC WING US 219.7 (183.5) 24.9
WINGSTOP INC EWG GR 219.7 (183.5) 24.9
WINGSTOP INC WING1EUR EU 219.7 (183.5) 24.9
WINGSTOP INC EWG GZ 219.7 (183.5) 24.9
WINMARK CORP WINA US 35.8 (8.8) 10.4
WINMARK CORP GBZ GR 35.8 (8.8) 10.4
WORKHORSE GROUP WKHS US 120.4 (12.2) (32.4)
WORKHORSE GROUP 1WO GR 120.4 (12.2) (32.4)
WORKHORSE GROUP WKHSEUR EU 120.4 (12.2) (32.4)
WORKHORSE GROUP 1WO TH 120.4 (12.2) (32.4)
WORKHORSE GROUP 1WO GZ 120.4 (12.2) (32.4)
WORKHORSE GROUP 1WO QT 120.4 (12.2) (32.4)
WW INTERNATIONAL WW US 1,503.0 (581.2) (42.9)
WW INTERNATIONAL WW6 GR 1,503.0 (581.2) (42.9)
WW INTERNATIONAL WTWEUR EU 1,503.0 (581.2) (42.9)
WW INTERNATIONAL WW6 QT 1,503.0 (581.2) (42.9)
WW INTERNATIONAL WW6 TH 1,503.0 (581.2) (42.9)
WW INTERNATIONAL WTW AV 1,503.0 (581.2) (42.9)
WW INTERNATIONAL WW6 GZ 1,503.0 (581.2) (42.9)
WYNDHAM DESTINAT WYND US 7,822.0 (993.0) 1,562.0
WYNDHAM DESTINAT WD5 GR 7,822.0 (993.0) 1,562.0
WYNDHAM DESTINAT WD5 TH 7,822.0 (993.0) 1,562.0
WYNDHAM DESTINAT WD5 QT 7,822.0 (993.0) 1,562.0
WYNDHAM DESTINAT WYNEUR EU 7,822.0 (993.0) 1,562.0
WYNN RESORTS LTD WYR TH 13,967.1 (546.6) 2,180.8
WYNN RESORTS LTD WYNN* MM 13,967.1 (546.6) 2,180.8
WYNN RESORTS LTD WYNN US 13,967.1 (546.6) 2,180.8
WYNN RESORTS LTD WYNN SW 13,967.1 (546.6) 2,180.8
WYNN RESORTS LTD WYR QT 13,967.1 (546.6) 2,180.8
WYNN RESORTS LTD WYR GR 13,967.1 (546.6) 2,180.8
WYNN RESORTS LTD WYNNEUR EU 13,967.1 (546.6) 2,180.8
WYNN RESORTS LTD WYR GZ 13,967.1 (546.6) 2,180.8
WYNN RESORTS-BDR W1YN34 BZ 13,967.1 (546.6) 2,180.8
YRC WORLDWIDE IN YEL1 GR 2,108.3 (323.1) 321.6
YRC WORLDWIDE IN YEL1 QT 2,108.3 (323.1) 321.6
YRC WORLDWIDE IN YRCWEUR EU 2,108.3 (323.1) 321.6
YRC WORLDWIDE IN YEL1 TH 2,108.3 (323.1) 321.6
YRC WORLDWIDE IN YEL1 SW 2,108.3 (323.1) 321.6
YRC WORLDWIDE IN YRCW US 2,108.3 (323.1) 321.6
YUBO INTERNATION YBGJ US - (0.0) (0.0)
YUM! BRANDS -BDR YUMR34 BZ 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC TGR TH 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC TGR GR 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC YUMEUR EU 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC TGR QT 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC YUM SW 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC YUM US 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC YUM* MM 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC YUM AV 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC TGR TE 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC YUMUSD SW 6,061.0 (7,919.0) 477.0
YUM! BRANDS INC TGR GZ 6,061.0 (7,919.0) 477.0
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
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are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***