/raid1/www/Hosts/bankrupt/TCR_Public/210301.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, March 1, 2021, Vol. 25, No. 59
Headlines
106 SPRING STREET: Auction on 20.6% Workspace Shares March 2
203 WYCKOFF: Unsecured Creditors to Recover 5% Under Plan
24 HOUR FITNESS: S&P Assigns 'CCC-' ICR, Outlook Negative
3100 E IMPERIAL: JLL to Auction 100% of Plamex on April 15
335 LAKE AVENUE: Hearing on Assumption of Lease & Contract Vacated
413-421 20TH STREET: Voluntary Chapter 11 Case Summary
4202 PARTNERS: Unsecureds to Get At Least $5,000 in Lender's Plan
84 ALBANY REALTY: All Claims Unimpaired in Property Sale Plan
AEPC GROUP: Can Use Cash Collateral Through May 31
AIR FLIGHT: Has Cash Collateral Access Thru March 4
AIR LEASE: S&P Rates Series B Fixed-Rate Preference Shares 'BB+'
ALCHEMY US: Moody's Lowers CFR to B3, Outlook Stable
ALVOGEN PHARMA: Moody's Affirms B2 CFR, Alters Outlook to Negative
AMBICA M&J: Comfort Inn & Golden Corral Sent to Chapter 7
AMERICAN AXLE: S&P Upgrades ICR to 'BB-', Outlook Stable
APOLLO COMMERCIAL: S&P Assigns 'B+' Rating on Incremental Term Loan
APOLLO ENDOSURGERY: Incurs $22.6 Million Net Loss in 2020
ARCONIC CORP: S&P Assigns 'B+' Rating on New Second-Lien Notes
ASCENA RETAIL: Creditors Overwhelmingly OK Committee-Backed Plan
ASCENA RETAIL: Gets Court Approval of Chapter 11 Plan
BALTIMORE HOTEL: S&P Cuts Sec. Rev. Refunding Bond Rating to 'B'
BASS PRO: S&P Rates New $4.1BB Senior Secured Term Loan 'B+'
BCR PARTNERS: Case Summary & 2 Unsecured Creditors
BELK INC: Latham & Watkins Advised Sycamore in Restructuring
BELK INC: S&P Upgrades ICR to 'CCC+' on Restructuring, Outlook Neg
BOOTS SMITH: April 8 Disclosure Statement Hearing Set
BOOTS SMITH: Gulf Coast Factoring Deal, Cash Collateral Use OK'd
BOOTS SMITH: Unsecured Creditors to Get Payments for 5 Years
BRAVEHEART REAL: Selling Real and Personal Property in Princeton
C2R GLOBAL: Seeks Dec. 31 Extension to File Plan
CAMBER ENERGY: Shareholders OK Increase in Authorized Common Stock
CAPSTEAD MORTGAGE: Egan-Jones Cuts Senior Unsecured Ratings to B
CARLA FERRUGIO: Selling Royal Palm Beach Homestead Asset for $345K
CARLA'S PASTA: Seeks to Hire Locke Lord as Legal Counsel
CARVANA CO: Posts $171.1 Million Net Loss in 2020
CASTEX ENERGY: Case Summary & 30 Largest Unsecured Creditors
CDT DE SAN SEBASTIAN: Asks for Final Extension of Plan Deadline
CENTRAL GARDEN: Egan-Jones Hikes Senior Unsecured Ratings to BB
CENTRO EVANGELISTICO: $1.5M Sale of Cutler Bay Property Approved
CMC MATERIALS: Egan-Jones Upgrades Senior Unsecured Ratings to BB+
CNX RESOURCES: Egan-Jones Hikes Senior Unsecured Ratings to CCC
COEUR MINING: S&P Affirms 'B' ICR, Outlook Stable
COVIA HOLDINGS: S&P Assigns 'B-' ICR, Outlook Positive
CPI CARD: Subsidiary Launches $310 Million Offering of Senior Notes
CPI CARD: Swings to $16 Million Net Income in 2020
CPI HOLDCO: Moody's Completes Review, Retains B3 CFR
CRESTVIEW HOSPITALITY: To Seek Plan Confirmation on March 29
CYXTERA DC: S&P Places 'CCC' ICR on Watch Pos. on Starboard Merger
DASEKE INC: S&P Upgrades ICR to 'B', Outlook Stable
DAVID MICHAEL PETWAY: SFR Buying Lithonia Property for $145K
DECO ENTERPRISES: Creditor Says Disclosure Insufficient
DELPHI CORP: 6th Circuit Won't Rethink Retirees' Pension Case Loss
DIAMOND OFFSHORE: Court Gives Green Light for Plan Voting
DIAMOND OFFSHORE: To Seek Plan Confirmation on April 8
DMG PRACTICE: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
DYNATRACE INC: S&P Upgrades ICR ro 'BB+', Outlook Stable
EKSO BIONICS: Incurs $15.8 Million Net Loss in 2020
EKSO BIONICS: To Hold Annual Stockholders' Meeting on June 10
ENRAMADA PROPERTIES: Montes Buying Whittier Property for $785K
EVERGREEN DEVELOPMENT: Case Summary & 15 Unsecured Creditors
EVERGREENS OF APPLE: Case Summary & 15 Unsecured Creditors
FERRELLGAS PARTNERS: Says .09% Unitholders Objections w/o Merit
FIT FOOD: Case Summary & 16 Unsecured Creditors
FIVE STAR: Incurs $7.6 Million Net Loss in 2020
FORM TECHNOLOGIES: S&P Downgrades Issuer Credit Rating to 'SD'
FORM TECHNOLOGIES: S&P Upgrades ICR to 'CCC+' on Restructuring
FORTERRA INC: S&P Places 'B' Long-term ICR on Watch Positive
FOSSIL EXHIBITS: Case Summary & 8 Unsecured Creditors
FR FLOW CONTROL: S&P Alters Outlook to Positive, Affirms 'B-' ICR
FRANCHISE GROUP: S&P Assigns 'BB-' Rating on New First-Lien Loan
FRICTIONLESS WORLD: Banjo Says Plan Disclosures Inadequate
FRONTERA HOLDINGS: Has Final OK on $70MM Loan, Cash Collateral Use
FRONTERA HOLDINGS: Winstead, Morgan Represent Noteholder Group
GABBIDON BUILDERS: $260K Private Sale of Waxhaw Property Approved
GG/MG INC: Sale of Two Forklifts to HGR for $18K Cash Approved
GO DADDY: S&P Rates New $800MM Senior Unsecured Notes 'BB-'
GRASAN EQUIPMENT: March 2 Hearing on Bid Procedures for All Assets
GTM REAL ESTATE: To Seek Plan Confirmation on April 5
GTT COMMUNICATIONS: S&P Downgrades ICR to 'CCC-' on 8-K Filing
HARRIS DAVIS WELCH: Florence County Property Sale to Crawford OK'd
HARRIS DAVIS WELCH: Sale of 1-Acre Clarendon County Property Okayed
HARRIS DAVIS WELCH: Sale of 10-Acre Florence County Property Okayed
HARRIS DAVIS WELCH: Sale of 2-Acre Clarendon County Property Okayed
HARRIS DAVIS WELCH: Sale of 20-Acre Florence County Property Okayed
HARRIS DAVIS WELCH: Sale of Clarendon County Property to Welch OK'd
HARSCO CORP: Moody's Gives Ba2 Rating on $500MM First Lien Loan
HARSCO CORP: S&P Assigns 'BB' Rating on New $500MM Term Loan B
HAYWARD INDUSTRIES: S&P Places 'B' ICR on CreditWatch Positive
HILLENBRAND INC: S&P Alters Outlook to Stable, Affirms 'BB+' ICR
INNOVATIVE SOFTWARE: Wins Cash Collateral Access Thru March 10
INTELSAT SA: Seeks Nov. 13 Plan Exclusivity Extension
JAB OF ROCKLAND: Extends Plan Filing Deadline to May 4
JASON'S HAULING: Wants Authority to Use Cash Collateral
JTS TRUCKING: Has Until April 30 to File Plan & Disclosures
KNOTEL INC: Auction of Substantially All Assets Set for March 12
KOLOBOTOS PROPERTIES: Cash Collateral Access Has Final OK
KOSMOS ENERGY: S&P Affirms 'B' ICR on Debt Issuance, Outlook Neg.
LAN DOCTORS: Wins Cash Collateral Access on Interim Basis
LI GROUP: S&P Rates New $300MM First-Lien Term Loan 'B'
LITTLE JOHN'S: Seeks Structured Dismissal, Plan Extension
LRJ GLOBAL: Unsec. Creditors to Recover 5% in Amended Plan
LSB INDUSTRIES: Incurs $61.9 Million Net Loss in 2020
MALLINCKRODT PLC: Ciardi et al. Update List of Acthar Claimants
MALLINCKRODT PLC: Taps Arnold & Porter as Special Counsel
MALLINCKRODT PLC: Wins Bankruptcy Plan Control Deadline Extension
MARLEY STATION: $19.7M Sale of Glen Burnie Mall to MCB Approved
MASHANTUCKET (WESTERN): S&P Raises Term Loan B Rating to 'CCC-'
MERITOR INC: Egan-Jones Ups Senior Unsecured Ratings to BB-
MICHIGAN MATHEMATICS: S&P Assigns 'BB+' Rating on 2021 Rev. Bonds
MICRON DEVICES: Gets OK to Hire Julia Kefalinos as Legal Counsel
MISS CLAUDY SEIDE: Request for Cash Collateral Use Denied
MOXIE'S CAFE: Can Use Cash Collateral on Final Basis
MTPC LLC: Seeks Aug. 20 Extension of Exclusive Plan Filing Period
N & B MGMT: Trustee's Sale of Forest Hills Property for $68K OK'd
NABORS INDUSTRIES: Posts $820.3 Million Net Loss in 2020
NATIONAL FUEL: Egan-Jones Lowers Senior Unsecured Ratings to BB
NATIONAL RIFLE ASSOCIATION: Sues NY Attorney General
NAVIENT SOLUTIONS: Court Throws Out Involuntary Petition
NCR CORP: S&P Affirms 'BB-' ICR on Cardtronics Acquisition
NEOPHARMA INC: Hearing on Sale of All Assets Set for March 31
NEOPHARMA TENNESSEE: March 26 Auction of Substantially All Assets
NEOVASC INC: Regains Compliance with Nasdaq Min. Market Value Rule
NEW CITIES INVESTMENT: $6.35M Sale of Palm Desert Property Okayed
NEW HOME: S&P Rates New $35MM Senior Unsecured Notes Due 2025 'B-'
NIAGARA FRONTIER: April 7 Disclosure Statement Hearing Set
OCWEN FINANCIAL: S&P Alters Outlook to Stable, Affirms 'B-' ICR
ORYX MIDSTREAM: S&P Alters Outlook to Positive, Affirms 'B-' ICR
OSUM PRODUCTION: S&P Places 'CCC+' ICR on CreditWatch Positive
PACKERS HOLDINGS: S&P Rates New Revolving Credit Facility 'B-'
PATSY MCGIRL: Unsecured Creditors Get 50% of Net Profit for 5 Years
PLANTRONICS INC: S&P Alters Outlook to Stable, Affirms 'B' ICR
POST HOLDINGS: S&P Rates New $1.8BB Senior Unsecured Notes 'B+'
PROJECT RUBY: S&P Assigns 'B' Rating on $1.125BB First-Lien Debt
PURDUE PHARMA: Seeks to Extend Plan Exclusivity Until March 1
QUIKRETE HOLDINGS: S&P Places 'BB-' ICR on CreditWatch Developing
RENFRO CORP: S&P Upgrades ICR to 'CCC-', Outlook Negative
ROBERT F. TAMBONE: $750K Private Sale of Jupiter Property Approved
ROGER LEE HARMON: Stromberger Buying Chase County Assets for $1.2M
ROYAL FLUSH 89: Trucking Companies File for Chapter 7 Bankruptcy
RSG INDUSTRIES: To Seek Plan Confirmation on April 13
RSG INDUSTRIES: Unsecured Creditors to Recover 2% in Plan
SEZIKEYE FINANCIAL: Gets Court Approval to Hire Real Estate Agent
SHARPER HEARING: Court Confirms Plan; Unsecureds Get 24%
SIMPLE SITEWORK: Court Rejects Plan and Disclosures
SIMPLE SITEWORK: Unsecureds to Get Share of Net Profit for 5 Years
SKECHERS USA: Egan-Jones Lowers Senior Unsecured Ratings to BB+
SLIDEBELTS INC: Hearing Today on Further Cash Access
SORROEIX INC: $3M Private Sale of Memphis Property to Asher Denied
SOURCE HOTEL: Case Summary & 20 Largest Unsecured Creditors
SRS DISTRIBUTION: S&P Alters Outlook to Stable, Affirms 'B' ICR
STEPS IN HOME: Unsecured Creditors Will be Paid in Full in Plan
STEREOTAXIS INC: Announces Long-Term CEO Performance Stock Award
STEREOTAXIS INC: Reports 2020 Full Year Financial Results
STEVEN FELLER: Wants Plan Exclusivity Extended Until April 17
STORABLE INC: S&P Assigns B- Rating on Acquisition by EQT Partners
STREAM TV NETWORKS: In Chapter 11 to Reduce Debt Service
STUDIO MOVIE: Landlord Has Issues With Liquidation Analysis
SUNIVA INC: New York Court Orders Ex-Owner to Pay $26M
TAILORED BRANDS: Seeks New Funds to Keep It Afloat
TELEPHONE AND DATA: S&P Rates New Series UU Preferred Shares 'B'
THADEUS A. GADOMSKI, JR.: March 31 Hearing on Wells Property Sale
THADEUS A. GADOMSKI, JR.: Son Buying Wells Property for $400K
TOPBUILD CORP: S&P Rates $400MM Senior Unsecured Notes 'BB'
TRANQUILITY GROUP: Case Summary & 11 Unsecured Creditors
TRINET GROUP: S&P Assigns 'BB' on New $500MM Senior Unsecured Notes
TRONOX LTD: S&P Alters Outlook to Stable, Affirms 'B' ICR
TTM TECHNOLOGIES: S&P Rates New $500MM Senior Unsecured Notes 'BB-'
UNIVERSITY PLACE: Granted Use of Cash Collateral on Final Basis
US ACUTE CARE: S&P Assigns B- Issuer Credit Rating, Outlook Stable
US ACUTE: Moody's Assigns B2 CFR on Strong Competitive Position
US CONSTRUCTION: Can Use Cash Collateral Until March 9
VOYAGER AVIATION: S&P Cuts ICR to 'CC' on Distressed Exchange
VTES INC: Court Confirms Subchapter V Plan
VTV THERAPEUTICS: Incurs $8.5 Million Net Loss in 2020
WAVE COMPUTING: $61M Bankruptcy Sale on Track, Fee Issue Resolved
WC 4811 SOUTH: March 11 Plan Confirmation Hearing Set
WC 4TH AND COLORADO: Unsecured Creditors to Get 100% w/o Interest
WC TEAKWOOD: March 11 Plan Confirmation Hearing Set
WILDWOOD VILLAGES: $114K Lease With Live Oaks for G16-067 Approved
YELLOW CORP: Board Approves 2021 Bonus Plan
YS HOMES: $640K Sale of Annapolis Residential Property Approved
YUM! BRANDS: Egan-Jones Upgrades Senior Unsecured Ratings to B+
[*] Hospitals at Risk of $122-Bil. Revenue Loss in 2021 on COVID
[*] Negative Amortization in Restructuring of Mortgage Debt
[] White & Case Attorneys See More Chapter 11s, Distress in 2021
[^] BOND PRICING: For the Week from February 22 to 26, 2021
*********
106 SPRING STREET: Auction on 20.6% Workspace Shares March 2
------------------------------------------------------------
In accordance with applicable provisions of the Uniform Commercial
Code as enacted in New York, Soho Operating Company LLC, as
successor in interest to Citizens Bank N.A., successor by merger to
Citizens Bank of Pennsylvania, as administrative agent and lender,
will offer for sale, at public auction, all of debtor 106 Spring
Street Owner LLC's right, title and interest in and to (a) 20.6% of
the shares of Workspace Inc., and (b) certain related rights and
property relating thereto.
The public auction will be held on March 2, 2021, at 3:30 p.m., New
York Time, by remote auction via the Cisco WebEx Platform or
web-based video conferencing and telephonic conferencing program
selected by the secured party. The sale will be conducted by:
Mannion Auctions LLC
Attn: Matthew D. Mannion
305 Broadway, Suite 200
New York, New York
Interested parties who intend to bid on the collateral must contact
the secured party, Soho Operating Company, LLC, Kyle Volluz,
Manager, Tel: (469) 405-0908, at kvolluz@pacelineequity.com
203 WYCKOFF: Unsecured Creditors to Recover 5% Under Plan
---------------------------------------------------------
203 Wyckoff Holdings, LLC, filed a Second Amended Plan of
Reorganization on Feb. 22, 2021.
Under the Plan, with respect to the Class 1 Secured Claim of Wells
Fargo Bank, N.A., Wells Fargo will retain its mortgage lien on and
in the Property in the amount of $810,000 which is based on a
valuation of the Property obtained by Wells Fargo dated Sept. 29,
2020. Wells Fargo's claim shall be a fully secured claim to the
extent of $810,000. Upon the Effective Date of the Second Amended
Plan, the terms of repayment of the mortgage debt in the amount of
$810,000 will be rewritten by the Second Amended Plan and Debtor
agrees to pay the total secured claim in the amount of $810,000 at
a 5.25% fixed interest rate with payments calculated at a 360-month
amortization schedule, with all amounts due upon the maturity date
which shall be 180 days from the Effective Date (hereinafter
"Maturity Date"). The Maturity Date shall be 180 days from the
Effective Date and shall be the date all amounts still outstanding
under the rewritten terms of the mortgage shall be due.
Class 2 General Unsecured Claims under the Second Amended Plan
consist of the unsecured claim of Continental Capital Group in the
amount of $762,300, and the unsecured claim of Jolly Equities LLC
in the amount of $420,000 for a total of $1,182,300. Class 2
General Unsecured Claims are impaired under the Second Amended
Plan. The holders of Allowed General Unsecured Claims shall
receive a 5 percent distribution on their claims from the
Distribution Fund on the Distribution Date of the Plan.
Attorneys for the Debtor:
Ronald M. Terenzi
TERENZI & CONFUSIONE, P.C.
Attorneys for 203 Wyckoff Holdings, LLC
Debtor and Debtor-in-Possession
401 Franklin Avenue
Garden City, New York 11530
Tel: (516) 812-0800
A copy of the Plan filed Feb. 22, 2021, is available at
https://bit.ly/3aStxYk from PacerMonitor.com.
About 203 Wyckoff Holdings
203 Wyckoff Holdings, LLC is a single asset real estate debtor (as
defined in 11 U.S.C. Section 101(51B)). 203 Wyckoff Holdings
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
E.D.N.Y. Case No. 20-40766) on Feb. 5, 2020. At the time of the
filing, the Debtor had estimated assets of between $500,000 and $1
million and liabilities of between $1 million and $10 million.
Judge Carla E. Craig oversees the case. The Debtor has tapped
Terenzi & Confusione, P.C., as its legal counsel.
24 HOUR FITNESS: S&P Assigns 'CCC-' ICR, Outlook Negative
---------------------------------------------------------
S&P Global Ratings assigned its 'CCC-' issuer credit rating to 24
Hour Fitness. S&P also assigned its 'CCC' issue-level and '2'
recovery ratings to the $200 million senior secured term loan.
All Day AcquisitionCo LLC (d/b/a 24 Hour Fitness) has emerged from
bankruptcy and recapitalized. The capital structure includes a $200
million senior secured term loan due in 2026 and an unrated
super-priority $40 million senior secured delayed draw term loan
due in 2022.
S&P said, "The negative outlook reflects the possibility the
company could face a near-term liquidity shortfall if its club
reopenings, membership, and revenue recovery are slower than we
assume in our base case, or there are further unanticipated
COVID-19-driven club closures over the next few months.
"The 'CCC-' issuer credit rating and negative outlook reflect our
belief 24 Hour Fitness could face a near-term liquidity shortfall
if cash flow underperforms our base-case forecast. Despite the
company's meaningful reduction of more than $1.2 billion of debt
upon its emergence from bankruptcy, liquidity could be less than
adequate and free cash flow negative in 2021. We believe that as of
Jan. 1, 2021, 24 Hour Fitness had approximately $78 million cash on
the balance sheet. However, we expect that for the first half of
2021 it will generate negative EBITDA and significantly negative
free cash flow on a full-year basis. Even including the incremental
proposed $40 million priority senior secured delayed draw term loan
and incorporating very low cash pay interest expense terms in the
exit term loan, until the company can generate substantially
positive EBITDA, we believe it has little room to underperform our
base-case assumptions without a near-term liquidity shortfall."
24 Hour Fitness has an uncommitted incremental facility under its
credit agreement to allow for an additional $200 million in term
loans. But S&P believes that under a weaker-than-anticipated
revenue recovery or slower-than-expected COVID-19 vaccine
distribution or reopening of gyms, specifically in California, the
company could face significant difficulty attracting financing.
The timing of reopening indoor facilities at the company's
California and Oregon clubs (approximately 65% of its footprint)
and the shape and timing of its membership and revenue recovery are
uncertain. 24 Hour Fitness' member base is down approximately 30%
from 2019, when it was already in decline before the COVID-19
pandemic. Under our base-case forecast, we expect 24 Hour Fitness
can fully reopen the 186 California and Oregon clubs that are
either closed or operating outdoors-only. S&P said, "We also
believe reopening these clubs and restarting billings could trigger
cancellations, at least initially for a portion of members who do
not want to return to the gym. We expect 24 Hour Fitness to resume
selling new memberships and expanding its membership and revenue
base in the second half as widescale vaccine distribution allows
consumers to feel more comfortable returning to the gym."
S&P said, "Still, we expect negative EBITDA through the second
quarter and for the full year even if the company generates
positive EBITDA in the second half. We also expect 24 Hour Fitness
will be required upon reopening its California and Oregon locations
to resume paying rent, including deferred rent, which could result
in additional cash burn if memberships and revenue do not ramp
above the company's break-even labor and rent costs. Under these
assumptions, we believe 24 Hour Fitness could generate negative
free operating cash flow over the next six months that could
substantially use its cash balances."
Restructuring in bankruptcy gave 24 Hour Fitness the opportunity to
exit unfavorable leases and clubs with a history of poor operating
performance, which could be a credit positive if the remaining
clubs can recover from the COVID-19 pandemic. 24 Hour Fitness
significantly reduced its club footprint during the bankruptcy
process to a total of 286 from a pre-bankruptcy and pre-pandemic
footprint of 446. S&P said, "We believe the company removed clubs
in need of significant facility and equipment refreshes and those
that were performing poorly on a membership, revenue, and EBITDA
basis. Additionally, we believe it exited or renegotiated
above-market leases. We believe 24 Hour Fitness consolidated its
club footprint to reduce unnecessary geographic overlap and its
footprint in areas where its supply was too high."
24 Hour Fitness' geographic concentration in California and
uncertainty around its ability to execute a successful turnaround
following the COVID-19 pandemic remain key risks. 174 of the
company's 286 fitness clubs are in California. S&P said, "We
believe this geographic concentration makes the company
particularly vulnerable to economic and competitive conditions in
the state. However, as the most populous state in the U.S., we
believe its concentration in California is favorable compared to
smaller states. We understand 24 Hour Fitness' membership was
already in decline before the COVID-19 pandemic, largely because of
poor new membership sales conversions coupled with high attrition
rates." There is significant uncertainty around its ability to
attract new members and raise conversion rates, stabilize attrition
rates, and to do so under a highly volatile operating environment
during and immediately after the COVID-19 pandemic.
The negative outlook on 24 Hour Fitness reflects that it could face
a near-term liquidity shortfall if its club reopening, membership,
and revenue recovery are slower than we assume in our base case.
There could also be further unanticipated COVID-19-driven club
closures over the next few months.
S&P said, "We could lower our ratings on 24 Hour Fitness over the
next few months if we believe a default or restructuring of its
debt obligations will become a virtual certainty.
"We could revise our outlook on 24 Hour Fitness to positive or
raise ratings if we believe a membership, revenue, and EBITDA
recovery will be sufficient to cover costs and other fixed charges
in a manner that reduces the risk of a near-term default."
3100 E IMPERIAL: JLL to Auction 100% of Plamex on April 15
----------------------------------------------------------
Jones Lang LaSalle, on behalf of secured party Quarry Head 2017-1
Grantor Trust, will offer for sale at public auction 100% of the
limited liability company membership interest in Plamex Investment
LLC, together with certain rights and property representing,
relating to, or arising from the membership interests.
Based upon information provided by debtor 3100 E. Imperial
Investment LLC ("Debtor") and its affiliates, it is the
understanding of the secured party that (i) the membership
interests constitute the principal assets of the Debtor; (ii) the
membership interests and other collateral secured payment of a
mezzanine loan in the original amount of $14 million made by
secured party's predecessor to the Debtor, for which events of
default have occurred, are continuing and all indebtedness due
thereunder has been accelerated by the Secured Party; (iii) the
pledged entity owns Plaza Mexico, which is a retail shopping center
located at SWC Long Beach Blvd., and Imperial Highway in Lynwood,
CA; and (iv) the pledged entity is the borrower under a loan in the
original principal amount of $106 million that is secured by a
mortgage on the property.
The mortgage loan was accelerated by the holder of the mortgage
loan on Ja. 4, 2021.
The sale is set to take place on April 15, 2021, at 10:00 a.m.,
Eastern Time in compliance with New York Uniform Commercial Code
Section 9-610. In recognition of the COVID-19 pandemic and related
limitations on public assemblies, the sale will be conducted
virtually via online video conference. An online datasite for the
sale is available at http://www.plazamexicouccforeclosure.com/
Further information regarding the pubic auction, contact:
Brett Rosenberg
Tel: +1 212-812-5926
brett.rosenberg@am.jll.com
335 LAKE AVENUE: Hearing on Assumption of Lease & Contract Vacated
------------------------------------------------------------------
Judge Joseph G. Rosania, Jr., of the U.S. Bankruptcy Court for the
District of Colorado vacated the evidentiary hearing on 335 Lake
Avenue, LLC's assumption of unexpired leases and execution of
contract in connection with the sale of the real estate located at
335 Lake Avenue, in Aspen, Colorado, to Steven Black for $9.375
million, scheduled for March 3 and 4, 2021, pending the Court's
decisions regarding the Debtor's proposed settlement with Mr. Black
and sale of property free and clear of any interest.
Under the Settlement Agreement, the Debtor and Mr. Black agree that
(1) the Debtor would file the Motion pursuant to Section 363 to
sell the subject property to Mr. Black for the total purchase price
of $9.375 million, including Mr. Black's previous deposit of
$925,000, and (2) following the Closing on the subject property Mr.
Black would dismiss with prejudice Adversary Proceeding No.
20-1145-JGR.
The Debtor will file, by March 22, 2021, a written report advising
the Court as to the status of the case, including whether or not it
will advance the pending Disclosure Statement and Plan of
Reorganization.
About 335 Lake Avenue
335 Lake Avenue, LLC is a single asset real estate (as defined in
11 U.S.C. Section 101(51B)).
On April 1, 2020, 335 Lake Avenue filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo.
Case No. 20-12378). James K. Daggs, Debtor's manager, signed the
petition. At the time of the filing, Debtor disclosed total
assets
of $10 million to $50 million. Judge Joseph G. Rosania Jr.
oversees the case.
Debtor has tapped Weinman & Associates, P.C. as its bankruptcy
counsel and Allen Vellone Wolf Helfrich & Factor, P.C. and Klein
Cote Edwards Citron, LLC as its special counsel.
413-421 20TH STREET: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: 413-421 20th Street LLC
413-421 20th Street
Brooklyn, NY 11215
Business Description: 413-421 20th Street LLC is engaged in
activities related to real estate.
Chapter 11 Petition Date: February 26, 2021
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 21-40515
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: Robert J. Musso, Esq.
ROSENBERG MUSSO & WEINER, LLP
26 Court Street
Suite 2211
Brooklyn, NY 11242
Tel: 718-855-6840
Fax: 718-625-1966
E-mail: courts@nybankruptcy.net
Total Assets: $10,648,000
Estimated Liabilities: $6,400,000
The petition was signed by TKS Group LLC by Thomas McCloskey,
general member.
The Debtor stated it has no creditors holding unsecured claims.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/YJK4PKI/413-421_20th_Street_LLC__nyebke-21-40515__0001.0.pdf?mcid=tGE4TAMA
4202 PARTNERS: Unsecureds to Get At Least $5,000 in Lender's Plan
-----------------------------------------------------------------
4202 Fort Hamilton Debt LLC, a secured creditor and party in
interest, submitted a Disclosure Statement in support of its
Amended Chapter 11 Plan of Liquidation for debtor 4202 Partners LLC
.
The Bankruptcy Court previously denied approval of a disclosure
statement in support of a joint plan of reorganization filed by the
4202 Debtor, along with the debtors in In re 4218 Partners LLC,
Case No. 19-44444-NHL, In re Pulaski RLM LLC, Case No.
19-44445-NHL, and In re 4202 Ki Tov LLC, Case No. 20-40573-NHL
(those other debtors are referred to collectively as the "Other
Debtors"), on the basis that such proposed plan, even as amended,
was patently unconfirmable. As such, the Lender's Plan very well
may be the only opportunity to facilitate a recovery for creditors
in the Chapter 11 Case.
At present, a dispute exists regarding the collection of air rights
owned at one time by the 4202 Debtor. Fort Hamilton Debt contends
that the air rights were improperly transferred prepetition to the
4218 Debtor, and Maguire contends that the air rights are part of
its collateral under its loan to the 4218 Debtor. The question as
to which of these two debtors owns the air rights is a question
that may need to be resolved by litigation if it cannot be resolved
consensually. The Lender's Plan envisions vesting Fort Hamilton
Debt with the right to pursue and/or defend any litigation. No
dispute exists concerning the air rights owned by the 4218 Debtor
prior to the transfer described herein, which air rights are the
property of the 4218 Debtor and the collateral of Maguire.
The Plan proposes to treat claims and interests as follows:
* Class 1: Fort Hamilton Debt Secured Claim. Fort Hamilton Debt
shall either: (a) be paid the Sale Proceeds up to the amount of the
Fort Hamilton Debt Secured Claim, if Fort Hamilton Debt is not the
Successful Bidder; or (b) receives the 4202 Property through the
Sale, if Fort Hamilton Debt is the Successful Bidder. Class 1 is
impaired.
* Class 4: General Unsecured Claims. Each holder of an Allowed
General Unsecured Claim shall receive cash in an amount equal to
the greater of: (a) the amount of such Allowed General Unsecured
Claim, to the extent the Sale Proceeds exceed the value of the Fort
Hamilton Debt Secured Claim in an amount sufficient to pay all
Allowed General Unsecured Claims in full; or (b)(1) a pro rata
share of the remaining Sale Proceeds after payment of the Fort
Hamilton Debt Secured Claim, to the extent such Sale Proceeds
exceed the value of the Fort Hamilton Debt Secured Claim, and (2) a
pro rata share of the General Unsecured Claim Carve-Out. Class 4 is
impaired.
* Class 5: Interests. All Interests in the 4202 Debtor shall be
cancelled as of the Effective Date, and holders of such Interests
shall not receive any distribution under the Lender's Plan.
Distributions to creditors of the 4202 Debtor will be funded from
the Sale Proceeds if such funds are sufficient to fund all such
distributions. To the extent that the sale proceeds are
insufficient to fund all distributions to creditors pursuant to the
Lender's Plan, and only to the extent necessary to fund such
distributions, if the Plan Proponent is the Successful Bidder, then
the Plan Proponent shall fund distributions to satisfy the Allowed
Administrative Expense Claims, Allowed Professional Fee Claims,
Allowed Priority Tax Claims, and Bankruptcy Fees and shall fund up
to $5,000 for the payment of Allowed General Unsecured Claims. The
General Unsecured Claim Carve-Out shall only be funded and
available if the Lender's Plan is confirmed.
Attorneys for 4202 Fort Hamilton Debt LLC:
Jerry Montag
SEYFARTH SHAW LLP
620 8th Avenue
New York, NY 10018
Telephone: (212) 218-4646
Facsimile: (917) 344-1339
Email: jmontag@seyfarth.com
M. Ryan Pinkston
SEYFARTH SHAW LLP
560 Mission Street, Suite 3100
San Francisco, California 94105
Telephone: (415) 544-1013
Facsimile: (415) 397-8549
Email: rpinkston@seyfarth.com
A copy of the Disclosure Statement is available at
https://bit.ly/3dLrQh0 from PacerMonitor.com.
About 4202 Partners
4202 Partners LLC, based in Brooklyn, NY, filed a Chapter 11
petition (Bankr. E.D.N.Y. Case No. 20-42438). In the petition
signed by Samuel Pfeiffer, manager, the Debtor listed $6,500,000
in
assets and $12,403,577 in liabilities. Goldberg Weprin Finkel
Goldstein LLP serves as bankruptcy counsel to the Debtor.
84 ALBANY REALTY: All Claims Unimpaired in Property Sale Plan
-------------------------------------------------------------
84 Albany Realty Corp., submitted a Plan and a Disclosure
Statement.
The Plan is designed as a mechanism for distributing the proceeds
from the sale of the Debtor's real property to the holders of
Allowed Claims. The Debtor's real property located at 84 Albany
Avenue, Freeport, NY was sold on Nov. 12, 2020, pursuant to an
order of the Bankruptcy Court under Section 363 (b) and (f) of the
Bankruptcy Code to the Village of Freeport for approximately
$990,000. The balance of the proceeds of $552,019, after the
payment of the secured liens, is being held in an attorney escrow
account for distribution to Allowed Claims upon Confirmation of the
Plan.
The Plan provides for the liquidation of all, or substantially all,
of the property of the estate; therefore, the Confirmation of the
Plan does not discharge the Debtor.
Secured claims and unsecured claims are all not impaired under the
Plan.
The Bar Date for filing claims was May 29, 2020 at 5:00 p.m., and
the only Allowed Unsecured Claims that were filed were (1) $286.29
from New York State Department of Taxation and Finance and (2)
National Grid in the amount of $5,124. Additionally, Unsecured
Claims of Stonewell Associates and WorldTex that were listed on the
Bankruptcy Schedules as undisputed have been withdrawn and are
therefore null and void. Class 3 Unsecured Claims will be paid in
full.
A copy of the Disclosure Statement filed Feb. 22, 2021, is
available at https://bit.ly/301tnrn from PacerMonitor.com.
About 84 Albany Ave. Realty
84 Albany Ave. Realty Corp. owns in fee simple a commercial
building with 24,000 sq. ft. of space located in Freeport, NY,
having a current value of $1.05 million.
84 Albany Ave. Realty Corp. filed a voluntary petition under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
20-11423) on Feb. 28, 2020. The petition was signed by Robert
Bloom, chief executive officer (CEO). At the time of the filing,
the Debtor disclosed estimated assets of $1 million to $10 million
and estimated liabilities of $500,000 to $1 million. The Hon.
Robert D. Drain oversees the case. The Debtor is represented by
Bronson Law Offices, P.C.
AEPC GROUP: Can Use Cash Collateral Through May 31
--------------------------------------------------
Judge Theodor C. Albert of the U.S. Bankruptcy Court for the
Central District of California approved the Stipulation between
AEPC Group, LLC and Strategic Funding Source, Inc. dba Kapitus
regarding the Debtor's use of cash collateral.
the Debtor is granted immediate use of all cash collateral on hand,
on an interim basis, through May 31, 2021.
Prepetition, Kapitus agreed to advance to the Debtor the principal
sum of $99,900, and the Debtor agreed to repay to Kapitus the
outstanding balance of principal, together with interest mhereon
and other charges as more particularly set forth in a Loan
Agreement dated September 17, 2019.
To secure the Debtor's payment and performance obligations under
the Loan Agreement, the Debtor executed a Security Agreement and
Guaranty, where the Debtor granted to Kapitus a security interest
in certain of its personal property, including accounts, accounts
receivable, cash, inventory, equipment, general intangibles, and
the proceeds thereof.
As of the Petition Date, the Debtor is indebted to Kapitus under
the Loan Documents for the sum of no less than $78,624.23 plus all
additional interest, fees, costs and charges, including attorneys
fees.
The Stipulation contains, among others, these relevant terms:
(a) The Debtor is authorized to use Cash Collateral during the
period commencing on November 1, 2020 and terminating on the
earlier of any of these dates: (i) May 31, 2021, or such further
date as agreed to by Kapitus in writing, or (ii) the date of the
occurrence of an Event of Default.
(b) The Debtor is authorized to use Cash Collateral solely to
pay the expenses set forth on the budget, to the extent actually
incurred by the Debtor for its business operations and not to
exceed the amounts set forth in the Budget by more than 15% in the
aggregate and by more than 15% for any line item expense category
set forth on the budget.
(c) Kapitus is granted by the Debtor, effective as of the
Petition Date, a "replacement lien" pursuant to sections 361 and
363(e) in all prepetition and postpetition assets in which and to
the extent the Debtor holds an interest, whether tangible or
intangible, whether by contract or operation of law, and including
all profits and proceeds thereof, including without limitation,
claims or causes of action possessed by the Debtor's bankruptcy
estate under sections 544, 545, 547, 548, 25 553(b), or 723(b), and
all proceeds therefrom, but only to the extent there is a
diminution in value 26 of the Prepetition Collateral, whether from
the use of Cash Collateral or otherwise.
(d) The Postpetition Lien in favor of Kapitus shall be senior
in priority to any and all prepetition and postpetition claims,
rights, liens and interests, but subject and immediately junior
only to any lien or security interest in the Prepetition Collateral
that is valid, perfected and senior to the interest of Kapitus
effective as of the Petition Date and not otherwise avoided or
subordinated.
(e) Kapitus shall have an allowed super priority
administrative claim of the kind and priority, to the extent
applicable, under sections 503(b) and 27 507(b).
(f) The Debtor shall pay Kapitus monthly adequate protection
payments, in cash, in the amount of $10,000 each month that the
Debtor is authorized to use Cash Collateral.
(g) As further adequate protection, the Debtor shall
immediately transfer $70,000 to a segregated deposit account. the
Debtor shall not use the funds in the Segregated Account for any
purpose pending approval of this Stipulation. Upon approval of
this Stipulation, the funds in the Segregated Account shall be used
solely to make the Monthly Adequate Protection Payments to
Kapitus.
(h) An Event of Default under this Stipulation shall occur
upon any of these events: (i) a breach or failure to comply with
any term, covenant, representation, warranty or requirement of this
Stipulation or any other order of the Court; (ii) the granting in
favor of any party other than Kapitus of a security interest in or
lien upon any property of the Debtor or the Debtor' estate or a
claim against the Debtor having priority senior or pari passu with
the security interests, liens or claims in favor of Kapitus, except
to the extent that such party had a security interest in or lien
upon property of the Debtor on the Petition Date which had priority
senior or pari passu with the security interests, liens or claims
of Kapitus existing on the Petition Date; (iii) entry of an order
converting this Case to a case under chapter 7 of the Bankruptcy
Code; (iv) entry of an order appointing a trustee in this Case; (v)
entry of an order granting relief in favor of any other party
(including lessors and landlords) that includes enabling such party
to exercise state law or contractual rights and remedies with
respect to certain asset or assets of the Debtor that could have a
material adverse effect on the Debtor, its business and/or other
assets, or (vi) any stay, reversal, vacation or rescission of the
terms of this Stipulation, or any modification of any terms of this
Stipulation that is not reasonably acceptable to Kapitus.
A hearing on the Debtor's use of cash collateral is scheduled for
May 26, 2021 at 10 a.m.
A full-text copy of the Stipulation and Order are available for
free at https://tinyurl.com/mh3tpxpe and
https://tinyurl.com/44prf8pw from PacerMonitor.com.
Strategic Funding Source, Inc. dba Kapitus is represented by:
Brian T. Harvey, Esq.
BUCHALTER
A Professional Corporation
1000 Wilshire Boulevard, Suite 1500
Los Angeles, CA 90017-2457
Telephone: 213-891-0700
Email: bharvey@buchalter.com
About AEPC Group
AEPC Group, LLC is an Irvine, Calif.-based full-service,
multi-discipline architectural, engineering and construction
services firm with professional, technical and support personnel.
AEPC Group sought Chapter 11 protection (Bankr. C.D. Cal. Case No.
20-11611) on June 4, 2020. AEPC Group President Ed Ghalib signed
the petition. At the time of the filing, the Debtor disclosed
total assets of $953,625 and total liabilities of $1,327,056.
Judge Theodor Albert oversees the case. the Debtor has tapped
Jeffrey S. Shinbrot, APLC, as its legal counsel and C.Y.G.
Financial Advisory Services as its investment banker.
AIR FLIGHT: Has Cash Collateral Access Thru March 4
---------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, has authorized Air Flight, Inc. to use
cash collateral on an interim basis through March 4, 2021.
The Debtor is authorized to use the cash collateral with a monthly
provision for adequate protection payments to:
* First National Bank, with adequate protection payments of
$1,000 per month;
* The First State Bank, with adequate protection payments of
$250 per month.
The adequate protection payments will begin March 1. The Debtor
will have a five-day grace period in the event of any delinquent
payments.
The Court says any liens in favor of the Banks including, without
limitation, the Replacement Liens, will be subject to carve-out for
all fees due to the U.S. Trustee and/or Clerk of Court; and the
Debtor is authorized to pay the U.S. Trustee fees without further
Court order, pursuant to 28 U.S.C. section 1930.
A final hearing on the matter is scheduled for March 4 at 10 a.m.
A copy of the order and the Debtor's budget through May 21 is
available for free at https://bit.ly/37K2r3l from
PacerMonitor.com.
About Air Flight, Inc.
Air Flight, Inc. filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Fla. Case No. 21-11039) on Feb. 2, 2021, disclosing under $1
million in both assets and liabilities.
Judge Peter D. Russin oversees the case.
The Debtor is represented by Van Horn Law Group, Inc.
AIR LEASE: S&P Rates Series B Fixed-Rate Preference Shares 'BB+'
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating to Los
Angeles-based aircraft lessor Air Lease Corp.'s proposed series B
fixed-rate reset non-cumulative perpetual preference shares (final
amount to be determined upon close). The preferred shares will rank
senior to the company's common stock and S&P classifies them as
having intermediate equity credit (50% equity) based on the
proposed terms, thus it rates the instrument two notches below its
'BBB' long-term issuer credit rating on Air Lease to reflect its
subordination and payment flexibility due to the optional
deferability of the dividend payments. The company will use the
proceeds from this issuance for general corporate purposes,
including to acquire aircraft and repay debt.
S&P said, "Our 'BBB' issuer credit rating on Air Lease reflects its
position as a midsize--albeit rapidly growing--provider of aircraft
operating leases, its young and diverse aircraft fleet, and its
relatively low debt leverage for an aircraft lessor. Air Lease,
like other aircraft leasing companies, has generated materially
less revenue in 2020 than we previously expected due to the effects
of the COVID-19 pandemic on its airline customers. Still, aircraft
lessors are in a better position than airlines because their lease
contracts require payment regardless of whether the planes are in
use. Bankrupt airlines, if they can reorganize, may be more
inclined to keep their leased planes (such as those owned by Air
Lease) because they are mostly newer and more fuel-efficient
models. We could lower our ratings on the company if we believe its
EBIT to interest expense will remain below 1.7x and its funds from
operations (FFO) to debt will stay below 9% on a sustained basis."
ALCHEMY US: Moody's Lowers CFR to B3, Outlook Stable
----------------------------------------------------
Moody's Investors Service downgraded Alchemy US Holdco 1, LLC's
("Kymera") ratings including Corporate Family Rating to B3 from B2,
Probability of Default Rating to B3-PD from B2-PD, and the rating
of the Senior Secured Term Loan B B3 from B2. The outlook is
stable.
Downgrades:
Issuer: Alchemy US Holdco 1, LLC
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Senior Secured Bank Credit Facility, Downgraded to B3 (LGD4) from
B2 (LGD4)
Outlook Actions:
Issuer: Alchemy US Holdco 1, LLC
Outlook, Remains Stable
The downgrade is driven by a significant deterioration in Kymera's
credit profile due to the expected multi-year weakness in
commercial aerospace demand combined with an increased debt load
following the Reading Alloys acquisition. While Moody's expects
that EBITDA and free cash flow will likely strengthen in 2021 and
2022, the level of the anticipated improvement in debt protection
metrics in the next 12-18 months will not be sufficient to support
the prior B2 CFR," said Botir Sharipov, Vice President and lead
analyst for Kymera.
RATINGS RATIONALE
Kymera's B3 corporate family rating reflects the company's small
size, high leverage, modest organic growth prospects and exposure
to cyclical end-markets including the chemicals, automotive and
industrial sectors. The rating considers the challenges faced by
the commercial aerospace supply chain following significant cuts in
aircraft production rates by Airbus and Boeing and the uncertainty
over the pace of the economic recovery and, specifically,
industrial and automotive end-markets, with the latter being
adversely affected by a semiconductor shortage. The rating also
factors in the private equity ownership which could limit the
company's ability to reduce leverage by engaging in
shareholder-friendly activities and M&A. The rating is supported by
the company's broad geographic and customer diversity, adequate
liquidity, modest capex intensity driving the EBITDA conversion to
free cash flow, countercyclical working capital needs during
periods of falling volumes and metal prices and high industry
barriers to entry. The rating also considers the pass-through
provisions in a substantial portion of the company's contracts
which lend some stability to its financial performance.
The acquisition of Reading Alloys was expected to immediately
benefit Kymera by diversifying its exposure from cyclical
industrial, automotive and chemical industries to aerospace and
medical end-markets, enhancing its operating margins through the
addition of Reading higher-value-added, higher-margin products and
increasing cash flow generation. However, sharply lower demand from
automotive, aerospace and industrial customers in Q2 2020, followed
by reduced Q3-Q4 volumes from a large customer in the Chemical
sector that sustained damage from hurricanes and had to temporarily
shut down one of its facilities, as well as continued weakness in
aerospace demand had a significant impact on Kymera's financial
performance in 2020. On a proforma basis, i.e. assuming full
nine-month contribution from Reading Alloys, Kymera's YTD (as of
September 30, 2020) volumes and revenues were down 12.4% and 31.5%,
respectively, driven, in large part, by a substantial decline in
Reading volumes in Q2 and Q3 as well lower commodity prices, mainly
vanadium.
While Kymera responded aggressively by cutting costs, executing
shift reductions and employee furloughs, saving $5 million through
October 31, 2020, and actually generated positive free cash flow by
releasing working capital, its credit metrics deteriorated
substantially due to lower operating profits and high interest
expenses. On a proforma basis, Kymera's debt/EBITDA, as adjusted by
Moody's, is expected to reach 10-10.5x in FY2020, substantially
higher than expected earlier, with interest coverage ratio
(EBITDA/Interest Expense) declining to about 1.4x.
Moody's expects Kymera's EBITDA to rebound materially in 2021 to
low-mid $50 million and to mid-high $60 million in 2022 as legacy
business recovers closer to pre-pandemic levels followed by a
gradual ramp-up in commercial aerospace production rates that will
boost Reading volumes and profitability. However, despite the
expected recovery, the level of the anticipated improvement in
Kymera's credit profile in the next 12-18 months will not be
sufficient to support the prior B2 rating. Moody's estimates that
Kymera's leverage will fall only to 7.5-8x in 2021 and below 6x in
2022, and will remain above the previous downgrade triggers.
The stable outlook assumes that the company will generate positive
free cash flow, excluding an unexpected period of significant
increases in metal prices, and reduce adjusted financial leverage
over the next 12-18 months.
As an emerging specialty materials company, Kymera overall faces
moderate environmental, social and governance risks. However,
governance risk is above average due to private equity ownership,
which is expected to engage in shareholder-friendly activities and
M&A, potentially limiting the company's ability to consistently and
sustainably reduce financial leverage.
Kymera has adequate liquidity supported by $66 million in cash
including $30 million borrowed under the $75 million ABL and about
$45 million available under the ABL as of September 30, 2020. The
credit agreement for the revolving credit facility only contains a
springing fixed coverage ratio based on the excess availability.
Moody's expects that the company would be able to comply with this
covenant with a reasonable cushion. The first lien senior secured
term loan does not have any financial maintenance covenants.
The B3 ratings on the $411 million term loan -- the same as the B3
CFR -- reflect the loan's position as the preponderance of debt in
the capital structure. Moody's view the unrated ABL, which has a
first lien on working capital assets, as better-positioned than the
rated term loan, which has a first lien on fixed assets and a
second lien on working capital assets.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could downgrade the rating with expectations for adjusted
financial leverage sustained above 6 times, retained cash flow
tracking below 5% of debt, or a substantive deterioration in
liquidity. A debt-financed return of capital to the sponsor or a
material step-out acquisition could also have negative rating
implications. Moody's could upgrade the rating if the adjusted
financial leverage is seen as trending toward 5 times, RCF to debt
sustained above 8%. The company would also need to demonstrate a
commitment to more conservative financial policies.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
Headquartered in North Carolina, Kymera produces non-ferrous metal
powders, with particular focus on copper, aluminum powder as well
as vanadium, molybdenum, and niobium alloys. The company operates
10 plants spread across the United States, Australia, China, Europe
and the Middle East serving diverse end-markets including the
aerospace, industrials, chemicals, automotive and medical sectors.
ALVOGEN PHARMA: Moody's Affirms B2 CFR, Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Alvogen Pharma
US, Inc. including the B2 Corporate Family Rating, B2-PD
Probability of Default Rating, and B3 rating on the senior secured
term loan. At the same time, Moody's revised Alvogen's outlook to
negative from stable.
The negative outlook reflects the risk that Alvogen will be unable
to delever to 5x debt/EBITDA in 2021, at a time when it also faces
rising refinancing risk. Alvogen's financial leverage declined
materially in 2020 but still remains very high, owing in part to
product shipment delays with a key government contract. In
addition, Alvogen has faced delays in receiving approval of key new
products. Amid these setbacks, Alvogen has a $125 million tranche
of its term loan that matures next year.
A pending therapeutic equivalence designation by the FDA (known as
an AB-rating) on its approved product, teriparatide (the active
ingredient in Eli Lilly's blockbuster product, Forteo), is a key
near-term earnings catalyst. Moody's believes this designation is
critical to gaining market share in this product. Also, Moody's
expects that Alvogen's delayed shipment to the government, will get
fulfilled in the first half of 2021. The cadence of future
shipments still faces further uncertainty, as the timing can face
delays.
The following ratings/assessments are affected by the action:
Ratings Affirmed:
Issuer: Alvogen Pharma US, Inc.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured Term Loan, Affirmed B3 (LGD4)
Senior Secured Term Loan B, Affirmed B3 (LGD4)
Outlook Actions:
Issuer: Alvogen Pharma US, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Alvogen's B2 Corporate Family Rating reflects its moderate size and
scale with annual revenues averaging around $500 million in the
highly competitive generic pharmaceutical industry. The ratings are
constrained by high financial leverage, as delays on contributions
from notable product launches extend into 2021. These include
product related to a key government contract and teriparatide.
Alvogen will depend on a combination of an AB-rating on its
teriparatide product, realization of continued product shipments to
the government, and growth in other products, in order to
meaningfully deleverage.
Alvogen's ratings benefit from capital support from its parent
while its most valuable pipeline assets fully materialize. One of
these is the volume-limited launch of a generic version of
blockbuster Revlimid, which will be a meaningful contributor in
2022 and beyond. ESG considerations include the limited
transparency into operations and financial performance of related
entities and those outside the US credit group.
Alvogen's liquidity is weak in light of 15% of its term loan, or
$125 million at maturity, due in April 2022. Alvogen had cash of
$113 million at September 30, 2020. Alvogen has a $275 million
asset-based revolver (ABL) that expires on January 29, 2023 and
availability will be limited by the borrowing base calculation in
the credit agreement. The ABL is subject to an accelerated maturity
to January 5, 2022 if the ABL borrowings exceed $50 million on that
date. Free cash flow will be close to breakeven after debt
amortization in 2021. Debt amortization includes approximately $8
million on 15% of its senior secured term loan and 5% annually on
100% of its term loan (about $50 million per year) resuming in June
2021. The term loan does not contain any financial maintenance
covenants and the remaining 85% matures in December 2023.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to a downgrade include failure to reduce
leverage below 5.0x debt/EBITDA on a sustained basis, failure to
achieve therapeutic equivalence on teriparatide, extended delays in
shipments associated with its government contract, or failure to
proactively refinance its term loan and ABL.
Moody's could upgrade the ratings if Alvogen sustains debt/EBITDA
below 3.0x and generates consistently positive free cash flow that
remains within the credit group.
The principal methodology used in these ratings was Pharmaceutical
Industry published in June 2017.
Alvogen Pharma US, Inc. ("Alvogen") is a subsidiary of Alvogen Lux
Holdings S.a.r.l. ("LuxCo"). Alvogen comprises the US generic
pharmaceuticals and contract manufacturing operations of LuxCo,
which also has international operations not included in the US
credit group. For the twelve months ended September 30, 2020,
Alvogen reported revenues of approximately $474 million. Alvogen is
owned by a consortium of private equity firms including CVC Capital
and Temasek. The company's CEO Robert Wessman also owns a
significant stake in the company.
AMBICA M&J: Comfort Inn & Golden Corral Sent to Chapter 7
---------------------------------------------------------
Robin K. Cooper of Albany Business Review reports that a federal
bankruptcy court judge has backed a Florida lender and U.S.
trustee's request to force the owners of the Comfort Inn & Suites
Hotel and Golden Corral in Wilton to liquidate.
"The best interest of creditors are in jeopardy if current
management remains in place," Assistant U.S. Trustee Lisa Penpraze
wrote to federal bankruptcy court judge Robert Littlefield Jr.
The judge agreed and approved a request by Florida lender SDI Matto
JV Holdco LLC to convert a Chapter 11 bankruptcy reorganization
case filed by Niral and Nirmala Patel into a Chapter 7
liquidation.
An interim Chapter 7 trustee has been appointed as a neutral
fiduciary to review the Patels' financials and determine what
assets can be sold to help creditors recover some of their
outstanding debts.
The Patel family has owned and operated the 87-room hotel and
buffet-style restaurant on Old Gick Road in Wilton for two decades.
They defaulted on a loan several years ago and had been working
out a repayment plan when the Covid-19 pandemic hit, which slashed
hotel occupancy and forced them to shut down the restaurant.
The mother-and-son owners filed for Chapter 11 bankruptcy
reorganization in January 2021 to prevent a receiver from taking
over the books and a management firm from coming in to run the
business.
The Patels also are facing allegations from Adirondack Trust Co.,
which accused the owners of improperly spending some of the $1.98
million they received through the federal Paycheck Protection
Program.
Attorney Justin Heller, who represents the Patels in the bankruptcy
case, contends the bank allegations are based on flawed assumptions
and mischaracterizations.
In a letter to the federal bankruptcy court, Niral Patel maintains
that he handled the money properly and pleaded for the court to
allow him to reorganize the business through a Chapter 11 case.
When the Patels filed for Chapter 11 protection, they listed just
under $10 million in secured debt.
Their largest lender, SDI Matto, asked the court to convert the
Patels' case into a Chapter 7 liquidation, claiming it was the
safest way to recover some of the $12.7 million in debt and
interest that they claim they are owed. SDI Matto is an affiliate
of Secured Debt Investments, a Coral Gables, Florida, commercial
real estate company that focuses on distressed properties.
Judge Littlefield ordered the case to be converted to a Chapter 7
bankruptcy this week and appointed an interim trustee on Wednesday,
February 24, 2021.
About Ambica M&J Two
Ambica M&J Two LLC is a Single Asset Real Estate debtor (as defined
in 11 U.S.C. Section 101(51B)), which owns property that's occupied
by the Comfort Inn & Suites Hotel and Golden Corral restaurant at
17 Old Gick Road, Saratoga Springs, New York. Maha Laxmi II Corp.
is the entity that controls the 87-room Comfort Inn. Jagdamba II
Corp. controls the Golden Corral. The three entities are owned by
mother-and-son team Nirmala Patel and Niral Patel.
To stop a receiver from taking control of the hotel and restaurant,
Ambica M&J Two LLC, Jagdamba II Corp., and Maha Laxmi II Corp.
sought Chapter 11 protection (Bankr. N.D.N.Y. Case No. 21-10014 to
21-10016) on Jan. 11, 2021. The petitions were signed by Niral
Patel, secretary.
Ambica M&J Two estimated assets and liabilities of $1 million to
$10 million. Jagdamba II Corp. estimated assets of $500,000 to $1
million and liabilities of $10 million to $50 million. Maha Laxmi
II Corp. estimated assets of $1 million to $10 million and
liabilities of $10 million to $50 million.
The Hon. Robert E. Littlefield Jr. is the case judge.
NOLAN HELLER KAUFFMAN LLP, led by Justin A. Heller, is serving as
the Debtors' counsel.
AMERICAN AXLE: S&P Upgrades ICR to 'BB-', Outlook Stable
--------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on American Axle
& Manufacturing Holdings Inc. (AAM) to 'BB-' from 'B+'. At the same
time, S&P raised its issue-level rating on AAM's secured debt to
'BB' (recovery rating '2') and its issue-level rating on its
unsecured debt to 'B' (recovery rating '6').
The stable outlook reflects S&P's view that the company's free
operating cash (FOCF) to debt will remain above 5% over the next 12
months.
The recovery in global light-vehicle demand and the company's
decreased costs continue to boost its key credit metrics. For
2020, AAM's sales fell to $4.71 billion from $6.53 billion in 2019
as its production decreased due to COVID-19 and due to the sale of
its U.S. casting business in 2019. The company had adjusted EBITDA
of $720 million or 15.3% of its sales in 2020 versus $970 and 14.9%
in 2019. Despite this, AAM was able to deliver solid EBITDA margins
in the second half because of a rebound in production and its
reduced cost structure. By the fourth quarter, the company's
adjusted EBITDA reached $261.5 million or 18.2% of sales.
AAM has demonstrated its adeptness at flexing its costs to adjust
to plummeting demand. It has also been engaged in long-term
structural changes to resize the business to remain profitable amid
a lower level of light-vehicle sales. The company is focused on,
among other things, rationalizing its global manufacturing
footprint, optimizing its manufacturing utilization, reducing its
headcount, and decreasing its procurement costs. Management
curtailed SG&A expenses by $50 million in 2020.
S&P said, "For 2021, we forecast EBITDA margins of more than 16.5%,
debt to EBITDA of less than 4x, and FOCF to debt exceeding 7%.
Beyond 2021, we anticipate the company's debt to EBITDA will
decline toward 3x while its FOCF to debt rises toward the 10%
area.
"Our stable outlook on AAM reflects our expectation that it will
continue to benefit from the recovery in global auto production and
generate key metrics in line with our expectations, namely FOCF to
debt of more than 5%, over the next 12 months.
"We could lower our rating on AAM if we believe it will be unable
to generate FOCF to debt of at least 5% on a sustained basis. This
could occur because of subpar launch execution, lower-than-expected
margins on the company's new and replacement programs, or an
unexpected decline in large truck sales due, for instance, to
semiconduction shortages or new government lockdowns intended to
slow the spread of COVID-19.
"We could raise our rating on AAM if the demand in the U.S.
full-size pickup and large SUV markets remains strong and the
company maintains its good operational execution (with EBITDA
margins exceeding 16.5%) while undertaking significant product
launches across its business segments. At the same time, we would
expect the company to maintain FOCF to adjusted debt of well above
10% on a sustained basis."
APOLLO COMMERCIAL: S&P Assigns 'B+' Rating on Incremental Term Loan
-------------------------------------------------------------------
S&P Global Ratings assigned its 'B+' senior secured debt rating to
Apollo Commercial Real Estate Finance Inc.'s (ARI: B+/Negative/--)
expected $300 million of term B-1 loans due March 2028 under its
existing term loan credit agreement. The company expects initially
to use the loan proceeds to paydown other secured financing,
therefore, we expect no change in the company's leverage, which was
about 2.0x as of Dec. 31, 2020.
S&P said, "Our ratings on ARI reflect its exposure to transitional
commercial real estate loans, reliance on secured repurchase
facilities with the potential for margin calls, and relatively
short operating history. The company's low leverage and limited
short-term maturities are positive ratings factors.
"The negative outlook reflects the potential of ARI's investment
portfolio weakening amid a difficult operating environment. Our
base-case scenario assumes the company will operate with leverage
of 1.75x-2.25x debt to adjusted total equity over the next 12
months while maintaining sufficient excess liquidity on balance
sheet.
"We could downgrade the company if it increases leverage above 2.5x
or does not continue reducing the risk in its portfolio while
increasing leverage. We could also downgrade the company if it has
adverse investment performance or does not maintain sufficient
liquidity relative to the debt drawn from repurchase facilities.
"We could revise the outlook to stable if the performance of the
company's investment portfolio stabilizes and there is more clarity
on the full impact of COVID-19."
APOLLO ENDOSURGERY: Incurs $22.6 Million Net Loss in 2020
---------------------------------------------------------
Apollo Endosurgery, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$22.61 million on $42.05 million of revenues for the year ended
Dec. 31, 2020, compared to a net loss of $27.43 million on $50.71
million of of revenues for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $77.44 million in total
assets, $70.69 million in total liabilities, and $6.75 million in
total stockholders' equity.
Fourt Quarter Highlights
* Fourth quarter U.S. Endoscopy product sales increased 14.9%
* Net operating loss in the fourth quarter was $3.2 million, a
53.0% reduction from the $6.9 million net operating loss in the
fourth quarter of 2019
* Operations used $2.8 million of cash in the fourth quarter of
2020, a 58.1% improvement compared to $6.7 million used in the
fourth quarter of 2019
* Received FDA clearance for the X-Tack Endoscopic HeliX Tacking
system
Todd Newton, CEO of Apollo, said, "Our revenue in the fourth
quarter reflected a continuing recovery of US market procedure
volumes. This recovery combined with our cost reduction efforts
resulted in a pronounced improvement in our profitability and cash
utilization in the fourth quarter, providing a solid foundation as
we transition leadership to Apollo's next CEO, Chas McKhann."
"In addition the 510k clearance of our X-Tack Endoscopic HeliX
Tacking System in December adds a new product to our portfolio and
opens for our suturing franchise a new and significant addressable
market in the lower gastrointestinal tract," said Newton. "With
over 20 million lower gastrointestinal tract endoscopic procedures
performed annually in the U.S., X-Tack fulfills a long-expressed
need for a readily-available advanced closure device to improve
healing and reduce adverse event risks."
Total worldwide revenue increased 7.3% to $12.9 million in the
fourth quarter of 2020 compared to the fourth quarter of 2019. ESS
product sales increased $0.2 million, or 2.3% in the fourth quarter
of 2020 compared to 2019. Fourth quarter U.S. ESS product sales
increased 10.2% while OUS ESS product sales decreased 9.3% due to a
reduction in European direct market procedures following resurgent
COVID-19 concerns during the quarter.
IGB product sales increased 7.1% during the fourth quarter 2020
compared to the fourth quarter 2019. In the U.S., IGB product
sales increased 32.7% while OUS IGB product sales decreased 2.4%.
Gross margin for the fourth quarter of 2020 was 55.9%, compared to
48.7% for the fourth quarter of 2019 due to continued progress on
the Company's gross margin improvement projects, higher overhead
absorption in the fourth quarter of 2020 due to increased inventory
production, and an increase in direct market IGB sales as a
percentage of total revenue.
Total operating expenses decreased $2.3 million to $10.4 million
for the fourth quarter of 2020 compared to the same period of 2019.
This reduction was the result of the operating cost restructuring
completed earlier in 2020.
Net loss for the fourth quarter of 2020 was $3.5 million compared
to $7.2 million for the fourth quarter 2019.
Cash, cash equivalents and restricted cash were $37.2 million as of
Dec. 31, 2020.
In December 2020, the Company entered into an agreement with Solar
Capital Ltd. to extend the interest only period and maturity date
of its existing term loan by 12 months, improving the Company's
2021 liquidity by approximately $12.0 million. The amendment will
further extend the interest only period and term by an additional 6
months if 2021 revenue milestones are achieved.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1251769/000125176921000013/apen-20201231.htm
About Apollo Endosurgery
Apollo Endosurgery, Inc. -- http://www.apolloendo.com-- is a
medical technology company focused on less invasive therapies to
treat various gastrointestinal conditions, ranging from
gastrointestinal complications to the treatment of obesity.
Apollo's device-based therapies are an alternative to invasive
surgical procedures, thus lowering complication rates and reducing
total healthcare costs. Apollo's products are offered in over 75
countries and include the OverStitch Endoscopic Suturing System,
the OverStitch Sx Endoscopic Suturing System, and the ORBERA
Intragastric Balloon.
ARCONIC CORP: S&P Assigns 'B+' Rating on New Second-Lien Notes
--------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level and '6' recovery
ratings to Pittsburgh-based Arconic Corp.'s proposed second-lien
notes. The '6' recovery rating indicates its expectation for
negligible recovery in the event of a default.
S&P said, "Our long-term 'BB' issuer credit rating on Arconic is
unchanged and incorporates the company's weak 2020 full-year
results reported Feb. 23, 2021. We estimate the company's EBITDA of
$619 million will translate into our adjusted debt/EBITDA of about
4.5x for 2020, which is above our downgrade threshold almost a year
after separation from Arconic Inc. (now Howmet Aerospace Inc.). As
with many industrials in the U.S., the company's earnings were
disrupted by the pandemic and its economic effects in mid-2020, but
have since bounced back despite a potentially lengthy downturn in
aerospace demand.
"The proposed issuance is leverage-neutral, because we expect
Arconic will use the new issue and cash on hand to annuitize large
pension obligations, which we treat as debt. Arconic's adjusted
leverage will likely exceed our downgrade threshold for only for
the next quarter or two, even if aerospace markets remain weak. We
expect strong industrial and ground transportation markets in 2021
could make up for weak aerospace demand, and that run-rate EBITDA
will improve by midyear after lapping the lockdown-affected 2020
second quarter.
"Our issue-level and recovery ratings are also unaffected by this
transaction. That said, first-lien debt recovery could improve
after pension obligations are annuitized in 2021, because we
currently reduce our default valuation for recovery purposes by the
tax-affected amount of post-retirement obligations."
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
-- S&P's 'BB+' issue-level and '2' recovery ratings on Arconic
Corp.'s first-lien notes due 2025 are unchanged. The '2' recovery
rating indicates its expectation for high recovery (70%-90%;
rounded estimate: 75%) in the event of a default.
-- S&P's 'B+' issue-level and '6' recovery ratings on Arconic's
second-lien debt are unchanged. The '6' recovery rating indicates
its expectation for negligible recovery (0%-10%; rounded estimate:
0%) in the event of a default.
-- S&P said, "Our simulated default scenario incorporates a
default occurring because of a decline in earnings from
market-share losses or materials substitution. Our simulated
default scenario assumes Arconic's creditors would receive the
greatest recovery if the company emerged from bankruptcy as a going
concern. We estimate a distressed gross recovery value of
approximately $1.8 billion based on emergence EBITDA of about $330
million (consistent with fixed charges) and a 5.5x EBITDA multiple.
This multiple is in line with the multiples we use for Arconic's
downstream metals peers."
-- S&P's emergence EBITDA assumption incorporates its recovery
assumptions for minimum capital expenditures (2.5% based on
historical evidence) and its standard 15% cyclicality adjustment
for metals processors.
Simulated default assumptions
-- S&P assumes Arconic defaults in 2025 after losing key customers
because of competition or substitution that is potentially worsened
by prolonged weakness in its core markets.
-- EBITDA multiple: 5.5x
-- EBITDA at emergence: $330 million
-- Gross estimated enterprise value: $1.8 billion
Simplified waterfall
-- Net enterprise value after 5% administrative costs and $750
million of pension obligations: $1 billion
-- Estimated first-lien claims at default: $720 million (excluding
60% drawn ABL)
--Recovery expectations for first-lien claims: 70%-90% (rounded
estimate: 75%)
-- Remaining collateral value: $0
--Recovery expectations for second-lien claims: 0%-10% (rounded
estimate: 0%)
ASCENA RETAIL: Creditors Overwhelmingly OK Committee-Backed Plan
----------------------------------------------------------------
Mahwah Bergen Retail Group, Inc. (f/k/a Ascena Retail Group, Inc..)
and its affiliated debtors filed final amendments to its Joint
Chapter 11 Plan on Feb. 22 and 24, 2021.
In the months following the Petition Date, the Debtors entered into
a series of value-maximizing sale transactions. The Debtors first
obtained a stalking horse bidder for the Catherines assets with an
initial bid of $16 million, and ultimately sold their Catherines
assets on September 22, 2020 for a purchase price of $40.8 million.
On Nov. 12, 2020, the Debtors sold certain of the Justice assets
for a purchase price of $71 million—far exceeding the stalking
horse bid of $44 million and generating significant revenue for the
Debtors' estates. Finally, on Dec. 8, 2020, the Debtors sold the
Lane Bryant and the Premium Brands, which include Ann Taylor, LOFT,
and Lou & Grey, for a purchase price of $540 million and assumption
of certain liabilities, leases, and contracts.
Following the closing of the Premium and Lane Bryan sale, the
Debtors repaid all amounts outstanding under the DIP Term Loan
Facility and the DIP ABL Facility and made certain additional
disbursements contemplated by the sale order, while retaining
sufficient cash reserves with which to pay administrative, priority
and other claims required to be paid under the Plan. The purchaser
of the Premium and Lane Bryan businesses ultimately assumed or
filed notice to assume (or assume and assign) approximately 1,246
real property leases and 1,470 non-lease executory contracts prior
to the lease and contract designation deadline of Feb. 18, 2021.
The sale transactions were supported by nearly all Term Lenders and
the Creditors' Committee and provided the highest and best value
to the Debtors' estates.
Holders of Claims entitled to vote on the Plan ultimately voted
overwhelmingly to accept the Plan. As of the date hereof, 97.25
percent of the holders of Term Loan Claims in Class 4 and, on a
consolidated basis, 87.54 percent of the holders of General
Unsecured Claims in Class 5 voted to accept.
In connection with the Premium and Lane Bryant sale transaction,
the Debtors also executed an amended and restated RSA with
approximately 97.25% of the Term Lenders, providing their support
for confirmation of the revised Plan reflecting the distribution of
sale proceeds. The Debtors also negotiated a global settlement
with the Creditors' Committee, the terms of which are reflected in
the Plan, which supports confirmation of the Plan.
Under the Plan, each holder of an Allowed General Unsecured Claim
shall receive its Pro Rata share of GUC Trust Net Assets as a
beneficiary of the GUC Trust and a holder of GUC Trust Interests.
"GUC Trust Assets" means (i) cash in the amount of $7,250,000; and
(ii) 100% of the first $1 million and 50% of the next $4 million of
proceeds (if any) received by Ascena resulting from Target Corp. et
al. v. Visa Inc. et al., case no. 1:13-cv-03477, as consolidated
into MDL In re Payment Card Interchange Fee and Merchant Discount
Antitrust Litigation, MDL 1720 (MKB) (JO) (E.D.N.Y.), currently
pending in the U.S. District Court for the Eastern District of New
York, net of any costs incurred by Ascena in connection therewith.
Any such proceeds in excess of $5 million (and 50% of proceeds
between $1 million and $5 million) shall be retained by the
Reorganized Debtors.
The Plan embodies the Global Settlement, the key terms of which
include the following:
* the creation of the GUC Trust under the Plan and the GUC
Trustee selected by the Creditors' Committee funded with the GUC
Trust Assets for the benefit of Allowed General Unsecured Claims;
* the Avoidance Action Waiver;
* the withdrawal of the Debtors' Motion for Entry of an Order
(I) Extending Time for Performance of Obligations Arising Under
Unexpired Non-Residential Real Property Leases, and (II) Granting
Related Relief and payment of deferred and stub rent owing to
landlords (and, for the avoidance of doubt, accruing before the
effective date of the rejection of any applicable real property
lease, as applicable) pursuant to the terms of the DIP Financing
Order;
* the commitment by the Debtors to use commercially reasonable
efforts to condition any critical or foreign vendor payment on the
applicable vendor agreeing to (a) provide trade terms at least as
favorable as the most favorable terms provided by such vendor in
the six-month period ending Feb. 29, 2020, for at least six months
after the Effective Date and (b) vote in favor of the Plan, if the
Plan is consistent with the terms of the Global Settlement;
* the commitment by the Debtors to use commercially reasonable
efforts to spend at least 70% of the authorized critical vendor and
foreign vendor payments; provided that the size and terms of the
critical vendor and foreign program shall not otherwise change from
what was previously authorized by the Court; and
* the support of the Creditors' Committee in favor of the Plan.
Co-Counsel to the Debtors:
Edward O. Sassower, P.C.
Steven N. Serajeddini, P.C.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
- and -
John R. Luze
300 North LaSalle
Chicago, Illinois 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
Cullen D. Speckhart
Olya Antle
COOLEY LLP
1299 Pennsylvania Avenue, NW, Suite 700
Washington, DC 20004-2400
Telephone: (202) 842-7800
Facsimile: (202) 842-7899
A copy of the Fourth Amended Plan is available at
https://bit.ly/3bSwibp from Prime Clerk, the claims agent.
A copy of the Fifth Amended Plan is available at
https://bit.ly/2NLRh7x
About Ascena Retail
Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty
retailer offering apparel, shoes, and accessories for women under
the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus
Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion
(Dressbarn) segments, and for tween girls under the Kids Fashion
segment (Justice). Ascena, through its retail brands, operates
ecommerce websites and approximately 2,800 stores throughout the
United States, Canada, and Puerto Rico. Visit
http://www.ascenaretail.com/for more information.
Ascena Retail reported a net loss of $661.4 million for the fiscal
year ended Aug. 3, 2019, a net loss of $39.7 million for the year
ended Aug. 4, 2018, and a net loss of $1.06 billion for the year
ended July 29, 2017.
On July 23, 2020, Ascena Retail Group and its affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of
Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and
$12,516,261,149 in total liabilities.
The Hon. Kevin R. Huennekens is the case judge.
The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as
bankruptcy counsel, Guggenheim Securities, LLC, as financial
Advisor, and Alvarez and Marsal North America, LLC as restructuring
advisor. Prime Clerk, LLC, is the claims agent.
* * *
In September 2020, FullBeauty Brands Operations, LLC, won an
auction to acquire Ascena's Catherines intellectual property assets
for a base purchase price of $40.8 million and potential upward
adjustment for certain inventory.
In November 2020, Ascena won approval to sell the intellectual
property of its Justice Brand and other Justice brand assets to
Justice Brand Holdings LLC, an entity formed by Bluestar Alliance
LLC (a leading brand management company), for $90 million.
The Company continues to operate its Ann Taylor, LOFT, Lane Bryant,
and Lou & Grey brands as normal through a reduced number of retail
stores and online.
ASCENA RETAIL: Gets Court Approval of Chapter 11 Plan
-----------------------------------------------------
Daniel Gill of Bloomberg Law reports that Ann Taylor parent Ascena
Retail Group Inc.'s unsecured creditors will share at least $7.25
million of the company's bankruptcy sale proceeds, following court
approval of its Chapter 11 plan.
The plan, approved Thursday, Feb. 25, 2021, by Judge Kevin R.
Huennekens of the U.S. Bankruptcy Court for the Eastern District of
Virginia, provides unsecured creditors a far better recovery than
the $500,000 initially proposed last July.
Following the distribution, the company will wind down its
remaining operations, having sold its women's clothing businesses
for more than $651 million.
"To have a retail case succeed in this environment is phenomenal,"
Judge Huennekens said Thursday, February 25, 2021.
About Ascena Retail
Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty
retailer offering apparel, shoes, and accessories for women under
the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus
Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion
(Dressbarn) segments, and for tween girls under the Kids Fashion
segment (Justice). Ascena, through its retail brands, operates
ecommerce websites and approximately 2,800 stores throughout the
United States, Canada, and Puerto Rico. Visit
http://www.ascenaretail.com/for more information.
Ascena Retail reported a net loss of $661.4 million for the fiscal
year ended Aug. 3, 2019, a net loss of $39.7 million for the year
ended Aug. 4, 2018, and a net loss of $1.06 billion for the year
ended July 29, 2017.
On July 23, 2020, Ascena Retail Group and its affiliates sought
Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of
Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and
$12,516,261,149 in total liabilities.
The Hon. Kevin R. Huennekens is the case judge.
The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as
bankruptcy counsel, Guggenheim Securities, LLC, as financial
Advisor, and Alvarez and Marsal North America, LLC as restructuring
advisor. Prime Clerk, LLC, is the claims agent.
* * *
In September 2020, FullBeauty Brands Operations, LLC, won an
auction to acquire Ascena's Catherines intellectual property assets
for a base purchase price of $40.8 million and potential upward
adjustment for certain inventory.
In November 2020, Ascena won approval to sell the intellectual
property of its Justice Brand and other Justice brand assets to
Justice Brand Holdings LLC, an entity formed by Bluestar Alliance
LLC (a leading brand management company), for $90 million.
The Company continues to operate its Ann Taylor, LOFT, Lane Bryant,
and Lou & Grey brands as normal through a reduced number of retail
stores and online.
BALTIMORE HOTEL: S&P Cuts Sec. Rev. Refunding Bond Rating to 'B'
----------------------------------------------------------------
S&P Global Ratings lowered the ratings on Baltimore Hotel Corp.'s
(BHC) senior secured revenue refunding bond two notches to 'B'.
BHC owns Hilton Baltimore, which has been connected to the
Baltimore Convention Center (BCC) and operated by an affiliate of
Hilton Worldwide Holdings Inc. since August 2008. It is a 757-room
convention center hotel in downtown Baltimore's Inner Harbor area,
overlooking Oriole Park at Camden Yards and connected to BCC by a
pedestrian bridge. The hotel has approximately 100,000 square feet
of meeting and prefunction space; two ballrooms of 42,400 square
feet; and a 567-space, four-story parking garage with two
subterranean levels. The hotel's net revenue and pledged city tax
revenue secure the bonds. City revenue includes a $7 million annual
appropriation funded through a second lien on the citywide hotel
occupancy tax revenue. It also includes a pledge of site-specific
hotel occupancy tax revenue, which will vary based on the project's
occupancy, and the tax increment financing payment.
S&P said, "Hotel operations have been suspended longer than we
forecast, exhausting operating reserves more quickly than expected.
BHC needs to execute on a reopening plan but will need resources to
do so. The project suspended operations in April 2020 due to the
COVID-19 pandemic. Since then, we calculate that monthly
operational deficits average about $448,000, which the project has
been covering with draws from its cash trap and operating reserve
funds, based on the actual deficits from May to December 2020.
"As of Dec. 31, 2020, BHC depleted its cash trap fund which it used
to pay operating expenses. The hotel has remaining total liquidity
of roughly $25.05 million (including $1.26 million in subordinated
furniture, fixture, and equipment (FF&E) reserve, $2.50 million in
operating reserve, $18.88 million in debt service reserve, and
$2.41 million in a senior FF&E reserve). This is in line with our
forecasted liquidity balance at year-end 2020 of $23.05 million
under the base case.
"However, we had expected the hotel to open early in the first
quarter, which could have covered some of its operating expenses
assuming a limited number of guests. Instead, it continues to be
unable to generate revenue given that the hotel's operation remains
suspended. Using operational deficits from 2020, our preliminary
calculations suggest BHC will deplete all available resources
(subordinated FF&E and operating reserves) to address operational
deficits by April 2021. Thereafter, remaining liquidity will
consist of the debt service reserve and senior FF&E reserve, which
are not permitted to cover operational deficits. For the hotel to
manage past this, it either needs flexibility to utilize some of
these reserves for operating expenses or rely on other sources.
"BHC's debt service payments are supported by a citywide hotel tax
revenue up to $7 million with the stipulation that any support be
restricted to debt service deficiencies. Based on the indenture and
disclosures provided by management, we expect that the project
should be eligible to receive up to approximately $6.5 million in
citywide hotel tax revenues, of which BHC disclosed that $4.5
million has been appropriated, for the March 1, 2021 interest
payment. If this mechanism is triggered, we would not expect the
debt service reserve to be drawn in March."
BHC posted a voluntary disclosure notice to EMMA on Feb. 12
regarding the discussion with bondholders for the hotel's proposed
reopening plan. BHC anticipates a total shortfall of approximately
$2.7 million in operating cash by the end of 2021, and it would not
be able to reopen the hotel if the deficit is not addressed. BHC
proposed two solutions, both of which include a request to use the
anticipated up to $7 million citywide hotel tax revenue, which the
project is permitted to call upon, to cover operating deficits and
fund operating reserve (totaled about $6.56 million) ahead of
allocating the remaining estimated $439,000 towards debt service.
But under the bond indenture, citywide hotel tax revenue is only
permitted to support a deficiency in debt service.
To support the remaining debt service portion not covered by
citywide hotel tax revenue, BHC proposed to either 1) draw $14.48
million from debt service reserve or 2) request a deferral from
lenders of $14.48 million debt service in 2021. Total debt service
in 2021 consists of a $6.58 million interest payment due in March
and a $9.53 million interest plus principal payment due in
September. The plan also outlined a depletion of subordinated FF&E
and operational reserves by April 2021 based on Hilton's pro forma
analysis, which is close to our preliminary calculation.
However, BHC and the bondholders were unable to reach an agreement
regarding the proposed plan as of the date of notice. S&P is
reviewing the project documents to understand what triggers could
occur if there is operational deficit that might lead to event of
default of the bonds.
Although not the preferred financial relief strategy of BHC, a
solution that involves a debt restructuring could constitute a
distressed restructuring and could result in the rating moving to
at least the 'CCC' category upon announcement and 'D' upon
execution. If a resolution that involves a debt service deferral is
executed, the ratings could be subject to additional downgrade,
depending on whether we view it as a distressed debt restructuring
based on the terms and conditions of any agreement with lenders. If
we conclude a distressed restructuring will occur, we would lower
the ratings because lender concessions would be viewed as
tantamount to a default. As discussed in the voluntary disclosure
notice, BHC is currently exploring a range of options for financial
relief and there appears to be limited near-term incentives for
lenders to agree to a debt deferral.
Environmental, social, and governance (ESG) credit factors for this
credit rating change
-- Health and safety.
S&P said, "We consider the impact of the COVID-19 pandemic to be a
social public health and safety issue, related to our ESG factors.
S&P Global Ratings believes there remains high, albeit moderating,
uncertainty about the evolution of the coronavirus pandemic and its
economic effects. Vaccine production is ramping up and rollouts are
gathering pace around the world. Widespread immunization, which
will help pave the way for a return to more normal levels of social
and economic activity, looks to be achievable by most developed
economies by the end of the third quarter. However, some emerging
markets may only be able to achieve widespread immunization by
year-end or later. We use these assumptions 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.
"The CreditWatch placement with negative implications reflects the
uncertainty over the project's ability to resolve its operating
deficits and reopen, and the potential for debt deferral to be an
eventual option agreed to by lenders. Given that the operating
reserve will be depleted no later than April, we are likely to
review the ratings in the next month and we could lower the rating
further if a viable reopening plan is not progressing. Any
agreement to defer debt service payments could trigger a
multiple-notch downgrade if in our view it constitutes a distressed
debt restructuring."
BASS PRO: S&P Rates New $4.1BB Senior Secured Term Loan 'B+'
------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level and '3' recovery
ratings to outdoor retailer Bass Pro Group LLC's (or Great American
Outdoor Group LLC) proposed $4.1 billion senior secured term loan
due 2028. The '3' recovery rating indicates its expectation for
meaningful recovery to lenders (50%-70%; rounded estimate: 55%) in
the event of default. The company intends to refinance its existing
term loan facility in a one-for-one transaction to extend the
maturity of the facility and to lower overall interest costs.
Along with the term loan transaction, Bass Pro (B+/Stable/--)
intends to refinance its undrawn asset-backed lending facility (not
rated), extending the maturity to 2026 and increasing overall
availability by $300 million, to more than $1.5 billion. The
increase in the priority debt in the capital structure results in a
55% rounded estimated recovery on the term loan facility, down from
a 60% rounded estimate in prior analyses. S&P said, "In our
simulated default scenario, we still assume Bass Pro would
experience lower consumer discretionary spending in a volatile
economy and that increased competition would hurt operating
performance."
S&P said, "Our 'B+' issuer credit rating on Bass Pro reflects its
leading market position in the highly competitive sporting goods
and outdoor recreation market. The company's profitability has
historically benefited from its good penetration of private-label
brands and its fast-growing, vertically integrated recreational
boat and adjacent businesses. We view Bass Pro's large destination
store format, compelling in-store experiences, and recently
enhanced e-commerce platform as positive business aspects. We think
these dynamics will help sustain credit metrics, including
projected adjusted leverage in the low-5x area in fiscal year 2021.
Our projections do not directly incorporate the announced
acquisition of Sportsman's Warehouse (not rated). That said, we
believe Bass Pro will fund the purchase with balance sheet cash. We
expect the acquisition, when it closes later this year, will be
largely leverage neutral to modestly deleveraging on a S&P Global
Ratings-adjusted basis."
BCR PARTNERS: Case Summary & 2 Unsecured Creditors
--------------------------------------------------
Debtor: BCR Partners, LLC
769 State HWY 86
Ridgedale, MO 65739
Business Description: BCR Partners, LLC --
https://bransoncedarsresort.com --
is vacation destination offering tree
houses, log cabins, and bungalows.
Chapter 11 Petition Date: February 26, 2021
Court: United States Bankruptcy Court
Western District of Missouri
Case No.: 21-60121
Debtor's Counsel: Ronald S. Weiss, Esq.
Joel Pelofsky, Esq.
BERMAN DELEVE KUCHAN & CHAPMAN, LLC
1100 Main, Suite 2850
Kansas City, MO 64105
Tel: (816) 471-5900
Fax: (816) 842-9955
Email: rweiss@bdkc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael Hyams, COO/partner.
A copy of the petition containing, among other items, a list of the
Debtor's two unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/KCJUNMA/BCR_Partners_LLC__mowbke-21-60121__0001.0.pdf?mcid=tGE4TAMA
BELK INC: Latham & Watkins Advised Sycamore in Restructuring
------------------------------------------------------------
Belk has announced that it has successfully completed its financial
restructuring, finalizing an expedited pre-packaged, one-day
reorganization. Belk's plan of reorganization received nearly
unanimous support from its existing lenders and provides for
suppliers and landlords to be paid in full as well as uninterrupted
operations to continue at all 291 store locations and on Belk's
e-commerce platform. Through the restructuring, the company was
able to preserve approximately 17,000 jobs, substantially
deleverage its capital structure, and emerge with increased
liquidity to support growth and long-term success.
Latham & Watkins LLP represented Sycamore Partners, as sponsor and
the majority owner, in the process, with a restructuring team led
by partners George Davis and Ted Dillman, with counsel Ebba Gebisa
and associate Misha Ross; a corporate team led by partners Michael
Benjamin, Jason Silvera, and David Zaheer, with associate Eric
Sternlieb; a banking team led by partner Joshua Tinkelman, with
associates Lena Dunn and James Sullivan; and a litigation team led
by partners Eric Leon and Amy Quartarolo.
About Belk Inc.
Belk, Inc., is an American department store chain founded in 1888
by William Henry Belk in Monroe, North Carolina. Now based in
Charlotte, Belk serves customers at nearly 300 Belk stores in 16
Southeastern states, at belk.com and through the mobile app.
The company was acquired by Sycamore Partners in a transaction
valued at $3 billion in December 2015.
Store closures and suppressed consumer demand from COVID-19 have
affected Belk and other retailers. Belk raised alarms among
suppliers in late 2020 after delaying vendor payments for months
amid pandemic shutdowns.
Belk announced Jan. 26, 2021, that it has reached an agreement on
terms of a prepackaged plan negotiated by its majority owner,
Sycamore Partners, with the holders of more than 75% of its
first-lien term loan debt and holders of 100% of its second-lien
term loan debt.
Belk Inc. and 17 of its affiliates sought Chapter 11 protection
(Bankr. S.D. Tex. Lead Case No. 21-30630) on Feb. 23, 2021,
confirming its prepackaged plan just a day after its bankruptcy
filing.
Under the Plan, Sycamore Partners will retain majority control of
Belk. The retailer has received financing commitments for $225
million in new capital from Sycamore Partners, investment firms KKR
and Blackstone Credit, and certain existing first-lien term
lenders. Members of an ad hoc crossover lender group led by KKR
Credit and Blackstone Credit and other participating lenders will
acquire minority ownership. The Plan will reduce debt by $450
million.
The Debtors tapped Kirkland & Ellis LLP and Jackson Walker LLP as
restructuring counsel and Lazard Freres & Co. LLC as investment
banker. Alvarez and Marsal Holdings, Inc., have been onboard as
restructuring advisor since April 2020. Prime Clerk LLC is the
claims and solicitation agent.
Sycamore Partners Management, L.P., as Plan Sponsor, engaged Latham
& Watkins, LLP, as legal advisor; the Ad Hoc Crossover Lender Group
engaged Willkie Farr & Gallagher LLP, as legal advisor, and PJT
Partners LP, as investment banker; and the Ad Hoc First Lien Term
Lender Group engaged O'Melveny & Myers LLP, as legal advisors, and
Evercore LLC, as investment banker.
BELK INC: S&P Upgrades ICR to 'CCC+' on Restructuring, Outlook Neg
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Charlotte,
N.C.-based department store operator Belk Inc. to 'CCC+' from 'D'.
S&P said, "At the same time, we are assigning our 'B-' issue-level
and '2' recovery ratings to the new $300 million first-lien
first-out (FLFO) term loan. We are also assigning our 'CCC-'
issue-level and '6' recovery ratings to its new $815 million
first-lien second-out (FLSO) and $110 million second-lien term
loans.
"The negative outlook reflects our expectation that Belk's
operating performance and competitive standing will continue to be
significantly challenged. A slower-than-anticipated recovery could
pressure its liquidity and lead to a lower rating.
"The restructuring has provided Belk with immediately needed
liquidity and lowered its cash interest burden, though we
anticipate continued operating pressure at least over the next 12
months. Belk has emerged from its Chapter 11 proceedings with $225
million of new capital, around $450 million of debt reduction, and
about $70 million cash interest savings. The cash infusion, which
is funded by existing lenders and Sycamore Partners, provides
liquidity to cover accrued debt obligations and anticipated working
capital needs. We anticipate the company will generate sufficient
liquidity to cover its reduced cash-based debt obligations over the
next 12 months. However, Belk faces significant operating pressure
as the pandemic continues to weigh down sales and secular headwinds
persist, leading to very high leverage and weak cash flows. We view
its capital structure as unsustainable based on our expectation for
a slow and limited recovery trajectory for department store
operators.
Much of the company's reduced cash interest burden results from a
payment-in-kind (PIK) option available on the $815 million FLSO
term loan, which allows Belk to reduce its cash interest to 5% from
10% for up to eight quarters and instead accrue PIK interest at 8%.
This option can save the company about $10 million quarterly as it
contends with current depressed sales and thin cash flow. In
addition, the $110 million second-lien term loan accrues PIK
interest of 10%, with no cash coupon. While the lower cash interest
is helpful in terms of liquidity in the short term, it will cause
accumulating debt obligations that we believe is onerous and will
heighten future refinancing risk.
Belk's performance has been significantly depressed as the COVID-19
pandemic's fallout amplified industry headwinds, leading S&P to
believe its business has been impaired for a longer period. Prior
to the pandemic, store traffic had declined steadily at Belk as
consumers gradually migrated their purchasing activity toward
online channels. This trend accelerated in fiscal 2021 (ended Jan.
30, 2021) as store closures and health and safety concerns prompted
many more customers to switch to online shopping, causing in-store
sales to drop by about 50% for the full year. S&P believes
customers will be slow to return to in-store shopping even after
vaccines have been broadly distributed and we do not anticipate
brick-and-mortar sales at Belk to ever reach pre-pandemic levels.
Belk has invested heavily in its omni-channel capabilities over the
past several years, enabling it to capture some of the shift in
demand and partially offset weakness in its stores. Its online
sales penetration improved to about 40% in fiscal 2021 from less
than 20% the prior year. The company's plans to transition stores
to showrooms and online sales fulfillment hubs could further
improve its omni-channel capabilities over time. However, based on
the highly competitive online retail landscape and Belk's
relatively small size, we do not expect online sales to fully
recapture lost brick-and-mortar revenues.
In addition to the shift toward online shopping, the department
store industry is challenged by changing consumer preferences,
including a shift toward more casual apparel and a growing affinity
for value. S&P believes full price brick and mortar operators will
continue losing market share as value-oriented customers migrate
toward off-price channels.
S&P said, "We forecast continued weak credit metrics, including
very high leverage in the low-9x area in fiscal 2022, and negative
free operating cash flow (FOCF). We anticipate cost deleveraging on
permanently impaired revenues and increased costs associated with
fulfilling online orders to pressure EBITDA margin by around
200-300 basis points (bps) compared to fiscal 2020 (ended Feb. 1,
2020). This will drive inflated S&P Global Ratings-adjusted
leverage over at least the next 12 months despite the restructuring
action to reduce its funded debt by around 20%. Some of this debt
reduction may also be short-lived as we expect the company to
utilize availability under its asset-backed lending (ABL) facility
to fund immediate working capital needs, including vendor payables
and inventory purchases. We do not anticipate positive operating
cash over the next 12 months to reduce ABL borrowings.
"Leverage covenants on its new term loans are not effective until
the end of fiscal 2023 (ending Jan. 28, 2023). However, a minimum
liquidity covenant on its FLFO term loan requires the company to
maintain at least $40 million of liquidity and a springing 1x
fixed-charge covenant limits its ability to access the full ABL
borrowing base. We forecast sufficient liquidity to comply with
these requirements, though unfavorable market conditions relative
to our forecast could result in covenant pressure.
"The negative outlook on Belk reflects our forecast for difficult
operating conditions and its highly uncertain path to recovery. We
believe the company is dependent on favorable market conditions to
meet its financial obligations and its liquidity position may
deteriorate over the next 12 months.
"We could lower our rating on Belk if we believe a specific default
scenario over the next 12 months is likely, including a near-term
liquidity shortfall or financial covenant violation. This could
occur if revenue and EBITDA recovery takes longer than anticipated,
pressuring the company's liquidity position.
"We could raise our rating on Belk if we no longer view its capital
structure as unsustainable. If better-than-anticipated recovery
leads to consistent positive FOCF without utilizing the PIK option
on the FLSO term loan, and leverage is sustained below 6.5x, we may
raise the rating."
BOOTS SMITH: April 8 Disclosure Statement Hearing Set
-----------------------------------------------------
On Feb. 22, 2021, debtor Boots Smith Completion Services, LLC,
filed with the U.S. Bankruptcy Court for the Southern District of
Mississippi a disclosure statement and a plan. On Feb. 23, 2021,
Judge Katharine M. Samson ordered that:
* April 8, 2021, at 1:30 p.m. in the U.S. Bankruptcy Court for
the Southern District of Mississippi, William M. Colmer Federal
Building, Courtroom 2, 701 North Main Street, Hattiesburg,
Mississippi is the hearing to consider the approval of the
disclosure statement.
* April 1, 2021, is fixed as the last day for filing and
serving written objections to the disclosure statement.
A full-text copy of the order dated Feb. 23, 2021, is available at
https://bit.ly/3uL94wq from PacerMonitor.com at no charge.
About Boots Smith
Boots Smith Completion Services, LLC, is an oilfield service
company, helping oil and gas companies enhance production through a
variety of applications, including completion, workover, and
optimization.
Boots Smith sought Chapter 11 protection (Bankr. S.D. Miss. Case
No. 20-51081) on July 1, 2020. At the time of filing, the Debtor
was estimated to have up to $50,000 in assets and $10 million to
$50 million in liabilities.
Judge Katherine M. Samson is the case judge. William J. Little,
Jr., Esq., at Lentz & Little, P.A., is the Debtor's counsel and
Horne, LLP as its accountant.
BOOTS SMITH: Gulf Coast Factoring Deal, Cash Collateral Use OK'd
----------------------------------------------------------------
Judge Brenda T. Rhoades of the U.S. Bankruptcy Court for the
Eastern District of Texas, Sherman Division, allowed Kolobotos
Properties, LLC to use cash collateral on a final basis.
"An immediate and critical need exists for the Debtor to obtain
funds in order to continue the operation of its business. Without
such funds, the Debtor will not be able to pay its operating
expenses services needed to carry on its business during this
sensitive period in a manner that will avoid irreparable harm to
the Debtor's estate. At this time, the Debtor's ability to use
Cash Collateral is vital to the preservation and maintenance of the
going concern value of the Debtor's estate," Judge Rhoades held.
The Debtor's property at 4607 Garrison, Dallas, Texas, is subject
to the Prepetition Liens of Hal Collier, Trustee, including liens
on rents received. As of the Petition Date, the Debtor and Collier
were parties to a promissory note and deed of trust, dated October
1, 2015, pursuant to which Debtor granted Collier a security
interest in the Property, as well as in any rental receipts receive
with respect to the Property. As of the Petition Date, the Debtor
allegedly owes Collier a balance of $36,696.52. The receivables
and cash proceeds generated from the Property constitutes income,
proceeds, products, rents, and/or profits of the Property and
constitutes "cash collateral." Collier has a perfected lien and
security interest in the Cash Collateral.
Judge Rhoades permits the Debtor to enter into all agreements
pursuant to the terms of the Order necessary to allow the Debtor to
use Cash Collateral, subject to the protections and consideration
described in the Order in the amounts and for the expenses set
forth on the monthly budget.
Collier is granted valid, binding, enforceable, and perfected liens
co-extensive with their pre-petition liens in the Property. Liens
granted to Collier will have the same validity, extent and priority
as they existed prior to the filing of the bankruptcy case. As
adequate protection, the Debtor was directed to pay to Collier by
the 19th day of each month, commencing on January 19, 2021,
adequate protection payments in the total amount of $245. Collier
was also granted valid and perfected replacement security interests
in, and liens on the Property to the same extent, validity and
priority as existed.
The Debtor is ordered to:
(a) utilize Cash Collateral to pay only the Debtor's normal
and regular expenses of the operation of its business, pursuant to
the Budget;
(b) account for all of the Debtor's expenditures in monthly
operating reports in accordance with the Office of the U.S.
Trustee's guidelines, which the Debtor shall timely file with the
Bankruptcy Court; and
(c) maintain all insurance policies required to conduct its
business, naming Collier as loss payee and certificate holder on
all policies. The Debtor shall provide Collier with proof of all
such coverage upon request, as well as prompt notification of any
change in such coverage which may hereafter occur.
Judge Rhoades said that the occurence of these events, unless
waived by Collier in writing, will consitute an event of default:
(a) the failure by the Debtor to perform, in any material
respect, any of the terms, provisions, conditions, covenants, or
obligations under the Order or the Loan Agreement;
(b) dismissal of the chapter 11 case or conversion of the
chapter 11 case to a chapter 7 case, or appointment of a chapter 11
trustee or examiner, or other responsible person; and
(c) a material default by the Debtor in reporting financial or
operational information as and when required under the Loan
Agreement.
Judge Rhoades also said that "if there is an Event of Default set
forth herein, the automatic stay provided by 11 U.S.C. Section
362(a) shall immediately terminate without any further order of
this Court and Hal Collier, Trustee shall be entitled to pursue all
applicable non-bankruptcy and state law remedies against the
property securing Hal Collier, Trustee's Debt."
A full-text copy of the Final Order is available for free at
https://tinyurl.com/37bufnts from PacerMonitor.com.
Hal Collier, Trustee is represented by:
Robert M. Nicoud, Jr., Esq.
NICOUD LAW
10440 N. Central Expressway, Suite 800
Dallas, TX 75231
Telephone: 214-540-7542
Email: rmnicoud@dallaw-law.com
Dallas County is represented by:
Laurie A. Spindler, Esq.
LINEBARGER GOGGAN BLAIR & SAMPSON, LLP
2777 N. Stemmons Freeway, Suite 1000
Dallas, TX 75207
Telephone: 214-880-0089
Email: Laurie.Spindler@lgbs.com
About Kolobotos Properties
Kolobotos Properties LLC filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bank. E.D. Texas Case No.
20-42234) on Nov. 2, 2020. At the time of the filing, the Debtor
had estimated assets of between $500,001 and $1 million and
liabilities of between $100,001 and $500,000. Judge Brenda T.
Rhoades oversees the case. The Debtor is represented by Joyce W.
Lindauer Attorney, PLLC.
BOOTS SMITH: Unsecured Creditors to Get Payments for 5 Years
------------------------------------------------------------
Boots Smith Completion Services, LLC, filed a Chapter 11 Plan of
Reorganization and a Disclosure Statement on Feb. 22, 2021.
The Plan was conceived by the Debtor as an alternative to the
filing of a Chapter 7 case. The Debtor believes the Plan provides
the Debtor's creditors with distributions having a value greater
than the amount that those holders would receive if the Debtor were
to be liquidated under Chapter 7 of the Bankruptcy Code. The
Debtor believes that the Plan is feasible and that the Plan
provides for the greatest and earliest possible recoveries for the
Creditors of the Debtor.
The Debtor's assets as of the Petition Date as set forth in the
Schedules consist of cash in bank accounts $843,892, deposits and
prepayments $115,497, accounts receivable $142,474, raw materials
$280,859, office furniture and fixtures $4,859, titled and untitled
rolling stock and equipment $2,662,523 and real property $976,000.
The Debtor will pay Allowed Secured Claims based upon the
amortizations set forth in the treatment of each Class of Secured
Claims. Each Unsecured Deficiency Claim will be paid the value of
the Collateral the Debtor proposes to retain for its reorganization
and Fully Secured Claims will be paid in full. The Debtor will
retain the real property located at 17 Perry Road, Laurel,
Mississippi and assume the leases on the leased real property
located at 230 Oakland Road, Shongaloo, Louisiana and the leased
real property located at 2727 Hwy 11 North, Laurel, Mississippi.
Under the Plan, Class 3 consists of the Allowed Secured Claim of
BMO Harris Bank. As of the Petition Date, the balance of BMO
Harris Bank's Secured Claim was $190,000. To the extent the amount
realized from the disposition of the vehicles exceeds the amount of
the BMO Pre-Petition Debt, after addition of sales costs,
Post-Petition attorney's fees and Post-Petition interest, BMO
Harris Bank shall remit such surplus to the Debtor. To the extent
the amount realized from the disposition of the vehicles is less
than the BMO Pre-Petition Debt, BMO Harris Bank will hold a general
unsecured Claim in an amount equal to the BMO Pre-Petition Debt
less the net amount realized from the disposition of the vehicles
after addition of sales costs. Class 3 is impaired.
Class 4 consists of the Allowed Secured Claim of Community Bank.
Community Bank shall have an Allowed Secured Claim in an amount
equal to the indebtedness under the Promissory Note as of the
Effective Date. The maturity of the Promissory Note will be
extended an additional two years. The Debtor shall continue making
the regular monthly installments of $2,070 under the Promissory
Note until April 5, 2025, at which time all outstanding principal,
interest and other unpaid charges shall be fully due and payable.
Class 4 is impaired.
Class 6 consists of the Allowed Secured Claim of Marlin Business
Bank ("Marlin BB"). Marlin BB filed a Proof of Claim in the amount
of $8,333. On the first day of the month following the Effective
Date, the Debtor will begin making the monthly installments of
$757.56 per month, plus any applicable late charges, for eleven
months. Class 6 is impaired.
Class 7 consists of the Allowed Secured Claims of Origin Bank. The
Secured Claim of Origin will be allowed in the total amount of
$925,000. Beginning on the fifteenth day of the month following
the Effective Date and continuing on the fifteenth day of each
month thereafter, Debtor shall pay the Remaining Allowed Secured
Claim in eighty-four monthly installments, plus interest on the
Remaining Allowed Secured Claim at the rate of 6% per annum, which
monthly installments are estimated to be $12,500 based upon an
anticipated Effective Date in June 2021. Class 7 is impaired.
Class 8 consists of the Allowed Secured Claim of Toyota Commercial
Finance. Toyota is owed approximately $34,000. The Forklift will
be surrendered to Toyota in full satisfaction of its Claim. Class
8 is impaired.
Class 9 consists of the Allowed Secured Claim of William L.
Jenkins. Jenkins filed a Proof of Claim in the amount of $452,964.
The Secured Claim of Jenkins will be Allowed and treated as set
forth in the Settlement Agreement and Release.
Class 10 consists of Allowed General Unsecured Claims. The Allowed
General Unsecured Claims will be paid an amount equal to the
unrestricted cash in the Debtor's operating account plus the
balance in the Unsecured Creditor Annual Distribution Escrow
Account on the 45th day before date of distribution in excess of
$250,000. The first distribution will be made within 60 days after
the Effective Date and on each annual anniversary date thereafter
until the earlier of (i) payment of Allowed General Unsecured
Claims in full, plus interest at the rate of 1.8% per annum
accruing after the Effective Date or (ii) five years after the
Effective Date. All distributions to creditors holding Allowed
Class 10 Claims shall be made on a pro-rata basis. Class 10 is
impaired.
In the event (i) the Debtor is unable to generate sufficient income
on an accrual basis for three consecutive months on a cumulative
basis to pay operating expenses, to make the payments required to
Class 2 through 8 Creditors, (ii) to accumulate at least $9,000 in
the Unsecured Creditor Annual Distribution Escrow Account during
each calendar quarter, or (iii) if the Debtor's unrestricted cash
and collectible accounts receivable minus undisputed Post-Petition
accounts payable over 30 days falls below $60,000 at the end of any
month, the Debtor will cease business operations and the Plan shall
become a Full Liquidating Plan.
The Debtor's counsel:
W. Jarrett Little
William J. Little, Jr.
LENTZ & LITTLE, PA
2505 14th Street, Suite 500
Gulfport, Mississippi 39501
Tel: (228) 867-6050
A copy of the Disclosure Statement is available at
https://bit.ly/2NFYoOG from PacerMonitor.com.
About Boots Smith
Boots Smith Completion Services, LLC, is an oilfield service
company, helping oil and gas companies enhance production through a
variety of applications, including completion, workover, and
optimization.
Boots Smith sought Chapter 11 protection (Bankr. S.D. Miss. Case
No. 20-51081) on July 1, 2020. At the time of filing, the Debtor
was estimated to have up to $50,000 in assets and $10 million to
$50 million in liabilities. Judge Katherine M. Samson is the case
judge. William J. Little, Jr., Esq., at Lentz & Little, P.A., is
the Debtor's counsel and Horne, LLP as its accountant.
BRAVEHEART REAL: Selling Real and Personal Property in Princeton
----------------------------------------------------------------
Braveheart Real Estate, Inc., filed with the U.S. Bankruptcy Court
for the Southern District of West Virginia a notice of its proposed
sale of real and personal property located at Stacey Street, in
Princeton, Mercer County, West Virginia.
The property is a mobile home park and eight of the units are owned
by the Debtor. The sale is to be free and clear of liens,
encumbrances and interests.
The Debtor proposes to pay in full the secured claim of First
Community Bank and Gene Buckner at closing. Ad valorem property
taxes will be pro-rated at closing. The Debtor will withhold a sum
sufficient to make disbursement to the Office of the U.S. Trustee.
Unless objections to the proposed sale are filed within 21 days
from the date of the Notice stating the nature of the objection,
the Court may enter an Order approving the sale without further
hearing. If proper objections are submitted, then objections will
be set for hearing upon further notice to the interested parties.
Objections should be submitted to the Court with a copy to the
Debtor's counsel.
About Braveheart Real Estate Inc.
Braveheart Real Estate, Inc., a real estate lessor headquartered
in
Stanaford, W.Va., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. W.Va. Case No. 19-50044) on March 22,
2019. At the time of the filing, the Debtor estimated assets of
between $1 million and $10 million and liabilities of between $1
million and $10 million. The case is assigned to Judge Frank W.
Volk. Caldwell & Riffee is the Debtor's legal counsel.
C2R GLOBAL: Seeks Dec. 31 Extension to File Plan
------------------------------------------------
C2R Global Manufacturing, Inc. asks the U.S. Bankruptcy Court for
the Eastern District of Wisconsin to extend its time to file a plan
and disclosure statement to December 31, 2021.
The Debtor's two largest creditors are POP-Solutions, LLC and Verde
Environmental Technologies, Inc. POP-Solutions filed a proof of
claim in the amount of $981,533.64, based on an arbitration award
and claimed pre-filing costs of collection. Verde Environmental
Technologies filed a proof of claim in the amount of $6,821,918.00,
based on claimed damages for patent infringement and false
advertising.
"Although time has passed since the order granting the First Motion
to Extend and the Second Motion to Extend, and Debtor and Verde
have continued to litigate their dispute, the basic posture is
unchanged. Resolution of the Verde claim is necessary to move the
bankruptcy case forward and to allow for filing and confirmation of
a plan. That resolution will not occur until the conclusion of a
trial. These circumstances outside the control of the debtor can
make adherence to the small business debtor deadlines impossible
without a court-ordered extension . . . As with the First Motion to
Extend and Second Motion to Extend, the Debtor can demonstrate a
likelihood that the Court will confirm a plan within a reasonable
time. The Debtor does not need to have a confirmable plan on file;
it merely must demonstrate that the Court can confirm a plan within
a reasonable amount of time . . . In this case, there remains
sufficient evidence that it is more likely than not that the Court
will confirm a plan within a reasonable time. The Debtor previously
provided summarized monthly operating reports showing net monthly
cash flows less attorney fees to demonstrate its ability to fund a
plan of reorganization at the conclusion of the case . . . There
are no secured creditors in this case . . . There are no priority
unsecured claims . . . The general unsecured claims consist of
POP-Solutions, LLC's claim of $981,533, Quarles & Brady LLP's claim
of $144,269, other unsecured creditors adding up to approximately
$15,000, and Verde's disputed claim . . . In the First Motion to
Extend, the Debtor projected its best estimate of Verde's claim to
ultimately be resolved resulting in an unsecured claim around
$240,000 and potentially requiring monthly royalty payments around
$6,250. At that time, Verde was asserting claims for patent
infringement and false advertising. Since that time, the Debtor
and Verde have settled the patent claims in this case, leaving
Verde's claims for false advertising . . . It is safe to say that
confirmation of a plan within a reasonable time is just as
attainable, or if anything more attainable, given the state of
affairs at this time in comparison to April 2019 and August 2020
when the prior motions were filed," the Debtor tells the Court.
A full-text copy of the Debtor's request is available for free at
https://tinyurl.com/58stf8re from PacerMonitor.com.
About C2R Global Manufacturing
Headquartered in Burlington, Wisconsin, C2R Global Manufacturing,
Inc. -- http://www.c2r-globalmfg.com/-- specializes in developing,
manufacturing, and marketing products for small to medium-sized
customers. Its products include tooling and electronics (software
and circuit design), metal castings, sheet metal fabrications, and
molding all forms of plastics and rubbers.
C2R Global Manufacturing, Inc. sought protection under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Wis. Case No. 18-30182) on Oct.
29, 2018. At the time of the filing, the Debtor estimated assets
of $1 million to $10 million and liabilities of $1 million to $10
million. The case is assigned to Judge Beth E. Hanan. The Debtor
tapped Kerkman & Dunn as its legal counsel.
CAMBER ENERGY: Shareholders OK Increase in Authorized Common Stock
------------------------------------------------------------------
Camber Energy, Inc. held a special meeting of stockholders on Feb.
23, 2021, at which the Company's stockholders approved an amendment
to its Articles of Incorporation to increase the number of its
authorized shares of common stock from 25,000,000 to 250,000,000.
The Company's stockholders also authorized a the Company's Board,
in its discretion, to adjourn the Special Meeting to another place,
or a later date or dates, if necessary or appropriate, to solicit
additional proxies in favor of Proposal 1.
About Camber Energy
Based in Houston, Texas, Camber Energy -- http://www.camber.energy
-- is primarily engaged in the acquisition, development and sale of
crude oil, natural gas and natural gas liquids from various known
productive geological formations, including from the Hunton
formation in Lincoln, Logan, Payne and Okfuskee Counties, in
central Oklahoma; the Cline shale and upper Wolfberry shale in
Glasscock County, Texas; and Hutchinson County, Texas, in
connection with its Panhandle acquisition which closed in March
2018.
Camber Energy reported a net loss of $3.86 million for the year
ended March 31, 2020, compared to net income of $16.64 million for
the year ended March 31, 2019. As of Sept. 30, 2020, the Company
had $11.79 million in total assets, $1.61 million in total
liabilities, $6 million in preferred stock (series C), and $4.18
million in total stockholders' equity.
Marcum LLP, in Houston, Texas, the Company's auditor since 2015,
issued a "going concern" qualification in its report dated June 29,
2020, citing that the Company has incurred significant losses from
operations and had an accumulated deficit as of March 31, 2020 and
2019. These factors raise substantial doubt about its ability to
continue as a going concern.
CAPSTEAD MORTGAGE: Egan-Jones Cuts Senior Unsecured Ratings to B
----------------------------------------------------------------
Egan-Jones Ratings Company, on February 17, 2021, downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Capstead Mortgage Corporation to B from B+. EJR also
downgraded the rating on commercial paper issued by the Company to
C from B.
Headquartered in Dallas, Texas, Capstead Mortgage Corporation is a
real estate investment trust and earns income from investing in
real-estate related assets on a leveraged basis.
CARLA FERRUGIO: Selling Royal Palm Beach Homestead Asset for $345K
------------------------------------------------------------------
Carla Ferrugio asks the U.S. Bankruptcy Court for the Southern
District of Florida to authorize the sale of her homestead property
located at 1130 Pioneer Way, in Royal Palm Beach, Florida, legally
described as Lot 76, of Pioneer Estates, according to the Plat
thereof, as recorded in Plat Book 123, Page 142, Public Records of
Palm Beach County, Florida, to Christine Roman Baird Backscheider
for $345,000, under the terms of their As-Is Residential Contract.
Ms. Ferrugio has claimed the Homestead as her exempt homestead
property on Schedule C, and there is no objection to the claimed
exemption.
On Feb. 5, 2021, the Debtor entered into the Contract to sell her
Homestead to the Buyer who is an unrelated third party for the sum
of $345,000, free and clear of liens. The Debtor believes the sale
price is fair and reflects the market value of the Homestead. The
sale of the property is subject to Court approval.
There are no judicial liens on the Homestead. However, the
property is subject to a first Mortgage lien in the principal sum
of $274,126, executed by Carla I. Ferrugio, a single woman in favor
of Mortgage Electronic Registration Systems, Inc., solely as
nominee for Paramount Residential Mortgage Group Inc., recorded
Jan. 02, 2019 in Book 30340, Page 955, and now held by Amerihome
Mortgage Company, LLC by virtue of that certain assignmentrecorded
in Book 31093, Page 1001.
The Homestead is being sold for a price greater than the aggregate
value of all liens on the Homestead.
A copy of the Contract is available at https://tinyurl.com/5ca2zxko
from PacerMonitor.com free of charge.
Counsel for Debtor:
Susan D. Lasky, Esq.
320 SE 18th Street
Fort Lauderdale, FL 33316
Telephone: (954) 400-7474
Facsimile: (954) 206-0628
On Nov. 8, 2019, Carla Ferrugio filed a voluntary petition under
Chapter 13, Title 11 of the United States Code. On April 15, 2020
the case was converted to a case under Chapter 11, Title 11,
(Bankr. S.D. Fla. Case No. 19-25533-MAM).
CARLA'S PASTA: Seeks to Hire Locke Lord as Legal Counsel
--------------------------------------------------------
Carla's Pasta, Inc. and Suri Realty, LLC seek approval from the
U.S. Bankruptcy Court for the District of Connecticut to employ
Locke Lord LLP as their legal counsel.
The firm will render these services:
a. advise the Debtor with respect to its powers and duties in
the continued management and operation of its business;
b. advise the Debtor with respect to all general bankruptcy
matters;
c. prepare legal papers;
d. represent the Debtor at court hearings and matters
pertaining to its affairs;
e. represent the Debtor in litigated matters that may arise
during its Chapter 11 case;
f. advise the Debtor regarding any sale of its assets or
business;
g. attend meetings and negotiate with representatives of the
Debtor's creditors and other parties-in-interest, and respond to
creditor inquiries;
h. take all necessary action to protect and preserve the
Debtor's estate;
i. review applications and motions filed in connection with
the case;
j. negotiate and prepare, if applicable, a plan of
reorganization, disclosure statement and related documents, and
take any necessary action to obtain confirmation of such plan;
k. represent the Debtor in connection with obtaining
post-petition loans and financing, if necessary;
l. review and evaluate the Debtor's executory contracts and
unexpired leases and represent the Debtor in connection with the
rejection, assumption or assignment of such executory contracts and
unexpired leases;
m. review and analyze various claims of the Debtor's creditors
and the treatment of such claims and the preparation, filing or
prosecution of any objections thereto;
n. advise the Debtor on general corporate, securities, real
estate, litigation, environmental, labor, regulatory, tax, health
care, and other legal matters that may arise during the pendency of
its case; and
o. perform all other necessary legal services.
The firm will be paid at these rates:
Partners $690 - $765 per hour
Associates $570 - $620 per hour
Adrienne Walker, Esq., a partner at Locke Lord, disclosed in a
court filing that his firm neither holds nor represents any
interest adverse to the Debtor.
The firm can be reached through:
Adrienne K. Walker, Esq.
Locke Lord LLP
601 Poydras Street, Suite 2660
New Orleans, LA 70130
Phone: 504-558-5100
Fax: 504-558-5200
Email: awalker@lockelord.com
About Carla's Pasta and Suri Realty
Carla's Pasta Inc. is a family-owned and operated business
headquartered in South Windsor, Conn. It manufactures food
products including pasta sheets, tortellini, ravioli, and steam bag
meals for branded and private label retail, foodservice
distributors, and restaurant. Founded in 1978 by Carla Squatrito,
Carla's Pasta's stock is held by members of the Squatrito family.
On Dec. 31, 2016, Carla's Pasta acquired 100% of Suri Realty, LLC's
membership interests. Suri's business is limited to the ownership
of two adjoining parcels of real property located at 50 Talbot Lane
and 280 Nutmeg Road, South Windsor, Conn.
Carla's Pasta operates its business from an approximately
150,000-sq. ft. BRC+ certified production facility.
On Oct. 29, 2020, an involuntary petition for relief under Chapter
7 of the Bankruptcy Code was filed against Suri by Dennis Group, HJ
Norris, LLC, Renaissance Builders, Inc., and Elm Electrical, Inc.
On Dec. 17, 2020, the court approved Suri's request and converted
the involuntary Chapter 7 case to one under Chapter 11.
Carla's Pasta filed a Chapter 11 petition (Bankr. D. Conn. Case No.
21-20111) on Feb. 8, 2021. It estimated assets of $10 million to
$50 million and liabilities of $50 million to $100 million.
The cases are jointly administered under Case No. 21-20111.
The Debtors tapped Locke Lord LLP as their counsel, Cowen & Co. as
investment banker and Novo Advisors, LLC as financial advisor.
Sandeep Gupta of Novo Advisors is the Debtors' chief restructuring
officer.
CARVANA CO: Posts $171.1 Million Net Loss in 2020
-------------------------------------------------
Carvana Co. filed with the Securities and Exchange Commission its
Annual Report on Form 10-K disclosing a net loss attributable to
the Company of $171.14 million on $5.58 billion of net sales and
operating revenues for the year ended Dec. 31, 2020, compared to a
net loss attributable to the Company of $114.66 million on $3.94
billion of net sales and operating revenues for the year ended Dec.
31, 2019.
As of Dec. 31, 2020, the Company had $3.03 billion in total assets,
$2.23 billion in total liabilities, and $801.50 million in total
stockholders' equity.
"2020 highlighted the strengths of our business model and validated
our vision for the future of car buying," Carvana CEO Ernie Garcia
said. "We're extremely proud of how our team navigated an
unprecedented year of constant adaptation. Their exceptional
execution and relentless focus on delivering the best experiences
to our customers vaulted us to becoming the second largest seller
of used cars in the country, another meaningful milestone in our
march to becoming the largest and most profitable automotive
retailer."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1690820/000169082021000069/cvna-20201231.htm
About Carvana
Founded in 2012 and based in Tempe, Arizona, Carvana Co. --
http://www.carvana.com-- is a holding company that was formed as a
Delaware corporation on Nov. 29, 2016. Carvana is an e-commerce
platform for buying and selling used cars. The Company owns and
operates Carvana.com, which enables consumers to quickly and easily
shop vehicles, finance, trade-in or sell the ir current vehicle to
Carvana, sign contracts, and schedule as-soon-as-next-day delivery
or pickup at one of Carvana's patented, automated Car Vending
Machines.
* * *
As reported by the TCR on May 24, 2019, S&P Global Ratings affirmed
its 'CCC+' issuer credit rating on Carvana Co. to reflect the
company's improved liquidity after it raised $480 million by
issuing about $230 million of common stock and a $250 million
add-on to its existing senior unsecured notes due 2023.
CASTEX ENERGY: Case Summary & 30 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Castex Energy 2005 Holdco, LLC
One Memorial City Plaza
800 Gessner Rd., Suite 925
Houston, TX 77024
Business Description: Castex Energy operates as an exploration and
production company.
Chapter 11 Petition Date: February 26, 2021
Court: United States Bankruptcy Court
Southern District of Texas
Four affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Castex Energy 2005 Holdco, LLC (Lead Case) 21-30710
Castex Energy 2005, LLC 21-30711
Castex Energy Partners, LLC 21-30712
Castex Offshore, Inc. 21-30713
Judge: Hon. David R. Jones
Debtors'
General
Bankruptcy
Counsel: Matthew Okin, Esq.
OKIN ADAMS LLP
1113 Vine St., Suite 240
Houston, TX 77002
Tel: (713) 228-4100
Fax: (888) 865-2118
Email: info@okinadams.com
Debtors'
Financial
Advisors: THE CLARO GROUP, LLC
Debtors'
Special
Counsel &
Conflicts
Counsel: THOMPSON & KNIGHT LLP
Debtors'
Notice,
Claims &
Balloting
Agent: DONLIN, RECANO & COMPANY, INC.
https://www.donlinrecano.com/Clients/cxe/Index
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $100 million to $500 million
The petitions were signed by Douglas J. Brickley, chief
restructuring officer.
A copy of Castex Energy 2005 Holdco's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/ZWYPO6A/Castex_Energy_2005_Holdco_LLC__txsbke-21-30710__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Castex Energy, Inc. Trade $9,152,235
333 N. Sam Houston Pkwy. East
Suite #1060 Houston, TX 77060
2. Shore Offshore Services, LLC Trade $2,002,882
20333 State Hwy 249, Ste. 200
Houston, TX 77070
Email: cody@shoreoffshore.com
3. Walter Oil & Gas Corporation Trade $1,524,541
P.O. Box 301007
Dallas, TX 75303-1007
4. Fieldwood Energy LLC Trade $383,220
2000 W Sam Houston Parkway
Suite 1200, Houston, TX 77042
Email: shane.smith@fwellc.com
5. W&T Offshore, Inc. Trade $247,588
Dept. 611
PO Box 4346
Houston, TX 77210-4346
6. Texas Petroleum Trade $186,084
Investment Company
5850 San Felipe, Suite 250
Houston, TX 77057
7. Petra Consultants, Inc. Trade $181,905
201 Rue Iberville, Suite 400
Lafayette, LA 70508
Email: amay@petracon.com
8. RC Logistics, LLC Trade $154,324
P.O. Box 160
Larose, LA 70373
9. Wood Group PSN, Inc. Trade $134,469
P.O. Box 301415
Dallas, TX 75303-1415
10. Danos, LLC Trade $133,406
3878 West Main Street
Gray, LA 70359
11. Expeditors & Production Trade $128,428
Services Co, Inc.
P.O. Box 80644
Lafayette, LA 70598
12. Island Operating Company, Inc. Trade $127,085
Dept 3998
PO Box 123998
Dallas, TX 75312-3998
13. Barry Graham Service, LLC Trade $124,762
P.O. Box 982
Bayou Batre, AL 36509
Email: jobeth@bgos.net
14. Upstream Insurance Brokers Insurance $112,631
2020 N. Memorial Way
Houston, TX 77007
15. Crosby Energy Services Trade $110,636
P.O. Box 1489
LaRose, LA 70373
Email: smatherne@crosbyenergy.com
16. Offshore Marine Contractors, Inc. Trade $100,665
133 West 113th Street
Cut Off, LA 70345
17. Petroleum Solutions Trade $97,325
International, LLC
P.O. Box 52285
Lafayette, LA 70505-2285
18. John W Stone Oil Dist. LLC Trade $93,250
Dept 322
PO Box 4869
Houston, TX 77210-4869
19. AMPOL Trade $91,480
401 West Admiral Doyle
New Iberia, LA 70560
20. Diverse Safety and Trade $90,914
Scaffolding, LLC
4308 West Highway 90
New Iberia
Email: flasseigne@diversesafetyscaffold.com
21. Archrock Partners Operating LLC Trade $71,786
PO Box 201160
Dallas, TX 75320-1160
22. RLC, LLC Trade $53,361
430 North Eola Road
Broussard, LA 70518
23. United Production & Trade $45,644
Construction Services Inc.
4110 Coteau Rd,
New Iberia, LA 70560
24. Essi Corporation Trade $45,034
200 Cummings Rd
Broussard, LA 70518
25. American Eagle Logistics Trade $38,709
PO Box 896829
Charlotte, NC 28289-6829
26. Datasite LLC Trade $34,848
733 S. Marquette Ave.,
Suite 600
Minneapolis, MN 55402
Email: service@merrillcorp.com
27. Safety Controls, Inc. Trade $29,083
410 Commercial Pkwy
Broussard, LA 70518
Email: ann.colonna@rig.net
28. A-Port LLC Trade $28,783
100 Commission Blvd.
Lafayette, LA 70508
Email: illyh@a-portllc.com
29. Fluid Crane & Trade $27,870
Construction, Inc.
PO Box 386
Abbeville, LA 70511
Email: jrenard@fluidcrane.com
30. Seatrax Inc. Trade $26,445
218 Gunther Lane
Belle Chasse, LA 70037
CDT DE SAN SEBASTIAN: Asks for Final Extension of Plan Deadline
---------------------------------------------------------------
CDT San Sebastian Inc. filed on Feb. 22, 2021, a motion for a final
extension of the deadline to file a Chapter 11 Plan and a
Disclosure Statement. The Debtor asks the Court to extend the Feb.
22, 2021 deadline by 30 days.
The Banco Popular on its Joint Motion filed on this date, the
parties are close to finalizing the terms of the re-payment to the
Bank who is the largest creditor in this case.
As stated by Banco Popular on its Joint Motion, the parties are
close to finalizing the terms of payment to the Bank who is the
largest creditor in this case. It is submitted that the allowance
of the extension requested will result in the prompt confirmation
of the Plan and Disclosure Statement, without additional delay or
litigation.
Counsel for the Debtor:
José R Cintrón, Esq
USDC-PR 208411
605 Condado 605, Suite 602
Santurce, Puerto Rico 00907
Tel: 787-725-4027
Fax: 787-725-1709
Cell: 787-605-3342
E-mail: jrcintron@prtc.net
lawoffice602@gmail.com
About CDT De San Sebastian
CDT De San Sebastian Inc., a tax-exempt entity that operates an
outpatient care center in San Sebastian, P.R., sought Chapter 11
protection (Bankr. D.P.R. Case No. 19-06636) on Nov. 13, 2019. At
the time of the filing, Debtor disclosed assets of between $1
million and $10 million and liabilities of the same range. Judge
Brian K. Tester oversees the case. Debtor has tapped Jose Ramon
Cintron, Esq., as its legal counsel, and JE&MA CPA Consulting
Solutions LLC, as its accountant.
CENTRAL GARDEN: Egan-Jones Hikes Senior Unsecured Ratings to BB
---------------------------------------------------------------
Egan-Jones Ratings Company, on February 16, 2021, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Central Garden & Pet Company to BB from BB-.
Headquartered in Walnut Creek, California, Central Garden & Pet
Company supplies consumer lawn and garden and pet supply products.
CENTRO EVANGELISTICO: $1.5M Sale of Cutler Bay Property Approved
----------------------------------------------------------------
Judge Laurel M. Isicoff of the U.S. Bankruptcy Court for the
Southern District of Florida authorized Centro Evangelistico La
Roca, Inc.'s sale of its real property located at 20851 SW. 97th
Avenue, in Cutler Bay, Florida, Folio Number 36-6009-000-0160, to
Century Homebuilders Group, LLC for $1.5 million.
The Final Sale Hearing on the Motion was held on Feb. 10, 2021, at
3:00 p.m. (EST).
The APA is approved, and the parties thereto are authorized to
immediately close and effectuate the sale of the Property and all
transactions set forth therein. The Buyer is specifically
authorized to assign its interest to a special purpose entity that
is owned or controlled by the Buyer or the Buyer's member prior to
closing and all references to the Buyer in the Order will include
its assigns.
The sale is free and clear of all liens Interests. Any liens,
claims, interests, or encumbrances which may exist, will attach to
the net proceeds of the sale.
Eugenio Duarte, P.A., the Buyer's closing agent, will serve as the
disbursing agent at closing and will be responsible for disbursing
all funds reasonably necessary to satisfy all closing costs, any
allowed secured claims with an interest against the Property.
The Debtor will immediately serve a copy of the Order pursuant to
Bankruptcy Rules 6004(a), (c), 6006, and 2002(a)(2) upon: a) the
Office of the United States Trustee; b) all creditors of the
Debtor; c) all Interest Holders asserting a claim, lien,
encumbrance or interest on or in the Debtor's assets; and d) all
parties who have requested notices pursuant to Rule 2002.
The Court expressly waives the stay requirement enumerated in
Federal Rule of Bankruptcy Procedure 6004(h) such that entry of the
Order will not be subject to an automatic 14-day stay and such that
this Order is effective immediately. Notwithstanding the possible
applicability of Federal Rule of Bankruptcy 6006(d), the terms and
conditions of the Order will be immediately effective and
enforceable upon its entry.
Ariel Sagre is directed to serve a copy of the Order on all parties
in interest and to file a certificate of service.
About Centro Evangelistico La Roca
Centro Evangelistico La Roca, Inc. sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-17654) on
July 15, 2020. At the time of the filing, the Debtor had
estimated
assets of between $1 million and $10 million and liabilities of
between $500,001 and $1 million. Judge Laurel M. Isicoff oversees
the case. Debtor has tapped Sagre Law Firm, P.A. as its legal
counsel.
CMC MATERIALS: Egan-Jones Upgrades Senior Unsecured Ratings to BB+
------------------------------------------------------------------
Egan-Jones Ratings Company, on February 16, 2021, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by CMC Materials Incorporated to BB+ from BB.
Headquartered in Aurora, Illinois, CMC Materials, Inc. supplies
slurries used in chemical mechanical planarization, a polishing
process used in the manufacture of integrated circuit devices.
CNX RESOURCES: Egan-Jones Hikes Senior Unsecured Ratings to CCC
---------------------------------------------------------------
Egan-Jones Ratings Company, on February 16, 2021, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by CNX Resources Corporation to CCC from CC.
Headquartered in Canonsburg, Pennsylvania, CNX Resources
Corporation operates as a natural gas exploration and production
company.
COEUR MINING: S&P Affirms 'B' ICR, Outlook Stable
-------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
Chicago-based gold and silver producer Coeur Mining Inc. At the
same time, S&P assigned its 'B' issue-level rating and '3' recovery
rating to Coeur's proposed $350 million senior unsecured notes due
2029. S&P's 'BB-' issue-level rating on its existing $300 million
revolving credit facility is unchanged.
The stable outlook reflects S&P's view that the company's debt to
EBITDA will remain below 3x in 2021, which is more than a full turn
below our 5x downgrade threshold. We believe this cushion will
likely provide Coeur with the ability to absorb additional debt to
support its capital spending program or potential volatility in
gold prices.
S&P said, "Coeur's current capital spending and exploration program
is one of its largest to date and we expect its free operating cash
flow (FOCF) to debt to be negative over the next two years. We
expect the company's exploration and capital spending to be in the
$300 million-$350 million range in 2021, which is up from about
$100 million annually in 2019 and 2020. Coeur is increasing its
outlays to support constructing and upgrading the mining and
processing facilities at its existing mining operations. The
largest of its projects is at its Rochester open pit silver and
gold mine, which began in 2020. This project includes a new leach
pad, crushing facility, and a process plant, including related
infrastructure, that will help extend the life of the mine. In
addition, the company expects its expanded use of its high-pressure
grinding roll (HPGR) technology (first implemented in 2019) to
simplify the crushing process and improve its throughput and silver
recoveries, which will likely expand its production rates and
improve its margins. Because of the large capital outlays for this
and other projects, we expect Coeur's free operating cash flow
(FOCF) to debt to remain negative over the next two years,
including FOCF (operating cash flow less capital spending) of close
to -$200 million for 2021.
"We believe that Coeur has sufficient sources of liquidity to fund
its exploration and capital spending initiatives. However, we
anticipate that it could require a substantial draw on its
revolving credit facility. Pro forma for the transaction, we
expect the company to have $195 million of cash on hand and about
$265 million of availability under its undrawn $300 million
revolving credit facility due 2022. Concurrent with the close of
the transaction, Coeur plans to extend the maturity of its revolver
by three years to 2025 with an option to upsize the facility by
$100 million if needed. Management also has a $100 million
at-the-market (ATM) equity facility, which it used in the past to
repay drawings on its revolver. Due to its ongoing projects, we
assume the company will undertake total capital spending of about
$600 million-$650 million over the next two years before moderating
its spending below $100 million (in line with its historical
spending). We forecast Coeur will fund slightly over half of this
spending with operating cash flow over the next couple of years
while covering the balance with cash and $170 million-$200 million
of borrowings from its credit facility (notwithstanding that the
company may use its $100 million ATM equity facility to pay down
its outstanding borrowings).
"We expect the company's debt leverage to remain below 3x over the
next 12 months. We expect Coeur's S&P adjusted debt to EBITDA to
remain below 3.0x in 2021, which compares with its leverage of 1.8x
in 2020 and our prior expectation for debt to EBITDA of 3.5x,
despite its heavy capital spending. In 2020, gold prices rose
sharpy and briefly exceeded $2,000 per ounce, which is a historical
peak. We anticipate that gold prices will decline but remain
elevated in 2021 at $1,700 per ounce. Underpinning this assumption
is our expectation for low interest rates as well as continued
financial uncertainty stemming from the coronavirus pandemic.
"The stable outlook on Coeur reflects our view that its debt to
EBITDA will increase but remain below 3.0x in 2021, which provides
it with a cushion of more than a full turn relative to our 5x
downgrade threshold to absorb additional debt to support its
capital spending program or offset potential volatility in gold
prices."
S&P would lower its rating on Coeur Mining if its debt to EBITDA
rises above 5x. S&P believes this occur under the following
scenario:
-- The company's exploration and capital projects experience cost
overruns such that it must take on additional debt to complete
them; or
-- One of the company's large mines is shut down for an extended
period such that its EBITDA declines significantly.
An upgrade is unlikely in the near term given S&P's expectation
that Coeur's higher exploration and capital investments will lead
to cash flow deficits. However, S&Pcould raise its rating on the
company if S&P expects it to successfully complete its planned
projects on time and on budget such that:
-- Its EBITDA margins remain above 25%;
-- Its debt to EBITDA remains below 4x; and
-- Its FOCF to debt climbs above 5%.
COVIA HOLDINGS: S&P Assigns 'B-' ICR, Outlook Positive
------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
U.S.-based industrial minerals and fracking sand producer Covia
Holdings LLC. The outlook is positive.
S&P said, "At the same time, we are assigning our 'B-' issue-level
rating and '3' recovery rating to the company's new $806 million
senior secured term loan due 2026. The '3' recovery rating reflects
our expectation of meaningful (50%-70%; rounded estimate: 50%)
recovery in the event of default.
"The positive outlook reflects that we could raise our rating on
Covia over the next 12 months, if industry conditions develop in
line with our expectations and as the company builds its track
record after the recent restructuring.
"After the restructuring, we view Covia as a less cyclical business
with a more manageable capital structure. Covia emerged from
bankruptcy on the last day of 2020 after significantly revamping
both its operations and capital structure. While the size of
certain non-debt obligations remains subject to finalization, we
estimate the company will end 2020 with about $952 million in
adjusted pro forma debt. This follows the reduction of its term
loan by almost half as part of the changes that also extended its
maturity out one year to July 2026. The company also restructured
about $340 million in lease liabilities, reducing them to closer to
about $50 million. By shedding railcar lease agreements associated
with an outsized fleet at above-market costs, the company expects
to have a more flexible cost structure and a more efficient
distribution footprint. On the operational side, Covia has idled
more than 27 million tons of frac sand production capacity. In the
face of chronic oversupply and collapsing end-market demand for
frac sand, Covia has rebalanced its active frac sand production to
match end-market demand more closely by region. This has
effectively reduced the overhang of Northern White sand capacity,
where the company had its largest share of frac sand production
capacity. Finally, the company has refocused on its less cyclical
industrial segment, accelerating investment and growth initiatives
for what now accounts for 75% of the company's revenue and even
more of the total contribution margin.
"We expect Covia to maintain steady credit measures, including
adjusted debt leverage in the 3.5x-4.5x range, as its operations
recover over the next 24 months. Covia continues to have a
substantial amount of debt and, by our estimation, over $40 million
in annual interest payments. Nevertheless, we anticipate that the
company will have sufficient and steady earning streams to support
its capital structure. We estimate that the company will generate
an average of $30 million-$60 million in free operating cash flow
(FOCF; operating cash flow less capital spending) over the next two
years. We are expecting ongoing pressure in frac sand prices this
year as frac sand price appreciation lags an initially sluggish
recovery in oil and gas end markets. However, all told, we expect
consolidated EBITDA margins to continue widening in 2021, getting
closer to a steady state, just above 25%. Ultimately, we expect
adjusted leverage to fall to the low end from the high end of the
3.5x–4.5x range through the year.
"Our rating takes into account certain shorter-term uncertainties.
Given the company's limited track record after restructuring, we
incorporate the risks that all the recent changes may result in
unforeseen costs or challenges. In addition, the outlook for the
oil and gas end markets remains uncertain as various global
economies recover from the recent slow down associated with the
pandemic. Lastly, final audited numbers after the restructuring are
still pending. We consider these concerns to be short term in
nature and likely to be resolved within a year. For that reason,
their resolution could result in a higher rating as reflected in
the positive outlook.
"The positive outlook reflects that we could raise our rating on
Covia over the next 12 months, as the company builds its track
record after the recent restructuring if industry conditions
develop in line with our expectations. This is driven by our
forecast for Covia's credit measures, which include adjusted debt
leverage of about 4x at the end of 2021."
S&P could raise its rating on Covia if the company achieves credit
measures in line with our expectations over the next year. Such a
scenario would be consistent with the following:
-- Debt leverage improving towards 4x, and
-- A Track record of delivering positive discretionary cash flow.
S&P could revise the outlook to stable if the recovery in broad
industrial end markets or oil and gas end markets stalled. S&P
could also revise the outlook to stable if some unforeseen event
resulted in a material reduction of liquidity. Such a change could
be in line with either of the following:
-- S&P expected debt leverage to start trending upward towards 6x,
or
-- Interest coverage fell below 1.2x
CPI CARD: Subsidiary Launches $310 Million Offering of Senior Notes
-------------------------------------------------------------------
CPI CG Inc., a wholly-owned subsidiary of CPI Card Group Inc., has
commenced a private offering of $310 million aggregate principal
amount of senior secured notes due 2026. The offering is subject
to market and other conditions, and there is no assurance that the
offering will be completed or, if completed, the terms on which it
will be completed.
The issuer intends to use the net proceeds from the offering,
together with cash on hand and initial borrowings under a $50
million secured asset based revolving credit facility that it
expects to enter into concurrently with the issuance of the notes,
to repay in full and terminate its existing credit facilities and
to pay related fees and expenses. There is no assurance that the
issuer will be able to enter into the ABL revolver simultaneously
with the issuance of the notes or at all.
The notes are expected to be general senior secured obligations of
the issuer and guaranteed by the Company and certain of its current
and future wholly-owned domestic subsidiaries (other than the
issuer) that will guarantee the ABL revolver, and will be secured
by substantially all of the assets of the issuer and the
guarantors, subject to customary exceptions.
The notes and related guarantees will be offered only to persons
reasonably believed to be qualified institutional buyers in
accordance with Rule 144A under the Securities Act of 1933, as
amended, or outside the United States to certain non-U.S. persons
in compliance with Regulation S under the Securities Act. The
issuance and sale of the notes and related guarantees have not
been, and will not be, registered under the Securities Act or the
securities laws of any state or other jurisdiction, and the notes
and related guarantees may not be offered or sold in the United
States absent registration or an applicable exemption from the
registration requirements of the Securities Act and other
applicable securities laws.
About CPI Card
CPI Card Group -- http://www.cpicardgroup.com-- is a payment
technology company and provider of credit, debit and prepaid
solutions delivered physically, digitally and on-demand. CPI helps
its customers foster connections and build their brands through
innovative and reliable solutions, including financial payment
cards, personalization and fulfillment, and Software-as-a-Service
(SaaS) instant issuance. CPI has more than 20 years of experience
in the payments market and is a trusted partner to financial
institutions and payments services providers. Serving customers
from locations throughout the United States, CPI has a large
network of high security facilities, each of which is registered as
PCI Card compliant by one or more of the payment brands: Visa,
Mastercard, American Express, and Discover.
CPI Card reported net income of $16.13 million for the year ended
Dec. 31, 2020, compared to a net loss of $5.12 million for the year
ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $266.15
million in total assets, $404.19 million in total liabilities, and
a total stockholders' deficit of $138.04 million.
* * *
As reported by the TCR on Dec. 29, 2020, Moody's Investors Service
affirmed CPI Card Group Inc.'s Caa1 Corporate Family Rating and
Caa1-PD Probability of Default Rating. CPI's Caa1 CFR reflects the
company's refinancing risk as maturities of the existing credit
facilities will become current in May and August of 2021.
S&P Global Ratings revised its outlook to positive from negative
and affirmed its 'CCC+' issuer credit rating on CPI Card Group Inc,
as reported by the TCR on Dec. 25, 2020. S&P said, "The positive
outlook reflects our expectation that CPI Card Group will generate
at least $10 million of FOCF over the next 12 months, which is our
upside threshold for the ratings. The outlook also reflects our
view that the improved operating performance would reduce CPI Card
Group's refinancing risk when its capital structure become current
between May and August 2021."
CPI CARD: Swings to $16 Million Net Income in 2020
--------------------------------------------------
CPI Card Group Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing net income of
$16.13 million on $312.19 million of total net sales for the year
ended Dec. 31, 2020, compared to a net loss of $5.12 million on
$278.07 million of total net sales for the year ended Dec. 31,
2019.
As of Dec. 31, 2020, the Company had $266.15 million in total
assets, $404.19 million in total liabilities, and a total
stockholders' deficit of $138.04 million.
"Our 2020 results were strong, driven by another year of solid
execution of our customer-centric strategy whereby net sales
increased 12% and our profitability significantly increased," said
Scott Scheirman, president and chief executive officer of CPI.
"Despite challenges presented by the COVID-19 pandemic, we believe
we gained overall market share in 2020 and executed key initiatives
to even better position CPI to meet market and customer needs in
2021 and beyond."
Scheirman continued, "We believe we are well-positioned to
capitalize on market opportunities, including the ongoing
transition to contactless cards in the U.S. and the market demand
for innovative and differentiated products such as our eco-focused
Second Wave contactless product, a debit or credit card featuring a
core made with recovered ocean-bound plastic, and Card@Once, our
Software-as-a-Service instant issuance solution that enables
financial institutions to instantly issue debit and credit cards in
branch."
Fourth Quarter and Full Year 2020 Financial Highlights
Net sales increased 16% and 12% year-over-year to $84.1 million and
$312.2 million in the fourth quarter and full year 2020,
respectively. Gross profit increased 41% and 21% year-over-year in
the fourth quarter and full year 2020, respectively. Gross profit
margin increased to 36.8% in the fourth quarter of 2020, compared
to 30.2% in the prior year period. Gross profit margin increased
to 35.3% from 32.8% in the full year 2020 compared to the prior
year.
Income from operations was $12.4 million and $38.4 million in the
fourth quarter and full year 2020, respectively, compared with $3.7
million and $24.7 million in the fourth quarter and full year 2019,
respectively. In the second quarter of 2019, the Company
recognized a $6.0 million gain related to the cash settlement of
litigation, which was included in income from operations.
Fourth quarter 2020 net income was $7.3 million, or $0.64 per
diluted share, compared to a net loss of $2.4 million, or a $0.21
loss per diluted share, in the fourth quarter of 2019. For the
full year 2020, net income was $16.1 million, or $1.44 per diluted
share, compared to a net loss of $5.1 million, or a $0.46 loss per
diluted share, in 2019.
Adjusted EBITDA increased 99% and 53% year-over-year to $17.5
million and $57.5 million in the fourth quarter and full year 2020,
respectively.
Balance Sheet, Liquidity, and Cash Flow
As of Dec. 31, 2020, cash and cash equivalents was $57.6 million.
Cash provided by operating activities was $11.9 million and capital
expenditures were $3.8 million in the fourth quarter of 2020,
yielding Adjusted Free Cash Flow of $8.1 million. For the full
year 2020, cash provided by operating activities was $22.1 million
and capital expenditures were $7.1 million, yielding Adjusted Free
Cash Flow of $15.0 million. This compares with the full year 2019
when cash provided by operating activities was $3.0 million, or a
$3.0 million cash usage when excluding the $6.0 million cash
received from a litigation settlement, and capital expenditures
were $4.2 million, resulting in Adjusted Free Cash Flow use of $7.2
million. For the full year 2020, cash provided by operating
activities and Adjusted Free Cash Flow increased $19.1 million and
$22.2 million year-over-year, respectively.
Total debt principal outstanding, comprised of the Company's $30
million Senior Credit Facility and its $312.5 million First Lien
Term Loan, was $342.5 million at Dec. 31, 2020. As of Dec. 31,
2020, $8.0 million of debt principal was classified as a current
liability as a result of an excess free cash flow calculation,
which the company will offer to prepay pursuant to the terms of the
debt agreements. Net of debt issuance costs and discount, total
long-term debt, net of current maturities, was $328.7 million as of
Dec. 31, 2020. The Company's Senior Credit Facility matures in May
2022 and the First Lien Term Loan matures in August 2022.
"Solid execution led to strong top-line growth and further
leveraging of our business model, enabling us to significantly
improve our bottom line and generate positive free cash flow," said
John Lowe, chief financial officer. "Our full year financial and
operating performance is reflective of solid progress against our
key strategic priorities. We believe we are well positioned and
have adequate cash and liquidity to support our business plan
moving forward."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1641614/000155837021001721/pmts-20201231x10k.htm
About CPI Card
CPI Card Group -- http://www.cpicardgroup.com-- is a payment
technology company and provider of credit, debit and prepaid
solutions delivered physically, digitally and on-demand. CPI helps
its customers foster connections and build their brands through
innovative and reliable solutions, including financial payment
cards, personalization and fulfillment, and Software-as-a-Service
(SaaS) instant issuance. CPI has more than 20 years of experience
in the payments market and is a trusted partner to financial
institutions and payments services providers. Serving customers
from locations throughout the United States, CPI has a large
network of high security facilities, each of which is registered as
PCI Card compliant by one or more of the payment brands: Visa,
Mastercard, American Express, and Discover.
* * *
As reported by the TCR on Dec. 29, 2020, Moody's Investors Service
affirmed CPI Card Group Inc.'s Caa1 Corporate Family Rating and
Caa1-PD Probability of Default Rating. CPI's Caa1 CFR reflects the
company's refinancing risk as maturities of the existing credit
facilities will become current in May and August of 2021.
S&P Global Ratings revised its outlook to positive from negative
and affirmed its 'CCC+' issuer credit rating on CPI Card Group Inc,
as reported by the TCR on Dec. 25, 2020. S&P said, "The positive
outlook reflects our expectation that CPI Card Group will generate
at least $10 million of FOCF over the next 12 months, which is our
upside threshold for the ratings. The outlook also reflects our
view that the improved operating performance would reduce CPI Card
Group's refinancing risk when its capital structure become current
between May and August 2021."
CPI HOLDCO: Moody's Completes Review, Retains B3 CFR
----------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of CPI Holdco, LLC and other ratings that are associated
with the same analytical unit. The review was conducted through a
portfolio review discussion held on February 23, 2021 in which
Moody's reassessed the appropriateness of the ratings in the
context of the relevant principal methodology(ies), recent
developments, and a comparison of the financial and operating
profile to similarly rated peers. The review did not involve a
rating committee. Since January 1, 2019, Moody's practice has been
to issue a press release following each periodic review to announce
its completion.
This publication does not announce a credit rating action and is
not an indication of whether or not a credit rating action is
likely in the near future. Credit ratings and outlook/review status
cannot be changed in a portfolio review and hence are not impacted
by this announcement.
Key rating considerations
CPI Holdco, LLC's ("Cole-Parmer") B3 Corporate Family Rating
reflects its very high financial leverage, modest scale, as well as
the risk associated with the competitive operating environment of
the global laboratory supplies industry. The rating also
incorporates event and financial policy risk due to private equity
ownership reflected in the company's acquisitive nature and
associated integration risks. However, Cole-Parmer benefits from
its strong brand recognition, relatively high level of proprietary
product sales and niche position led by its self-produced line of
peristaltic pumps, as well as a favorable industry backdrop.
Cole-Parmer's good margins due to favorable revenue and product mix
support the company's good liquidity with solid free cash flow
generation.
The principal methodology used for this review was Distribution &
Supply Chain Services Industry published in June 2018.
CRESTVIEW HOSPITALITY: To Seek Plan Confirmation on March 29
------------------------------------------------------------
Judge Henry A. Callaway has entered an order approving the
disclosure statement filed by Crestview Hospitality LLC on December
11, 2020.
March 22, 2021, is fixed as the last day for filing written
acceptances or rejections of the plan.
On or before March 1, 2021, the proponent of the plan shall serve
by regular U.S. Mail a copy of the plan of reorganization, the
disclosure statement, ballot for accepting or rejecting the plan,
and this Order to the creditors.
A confirmation hearing will be held on March 29, 2021, at 09:30 AM,
Central Time, via Telephone Conference, (877−336−1831, Access
Code 1356129, Security Code 1886).
About Crestview Hospitality
Crestview Hospitality LLC, a company based in Crestview, Fla.,
filed a Chapter 11 petition (Bankr. N.D. Fla. Case No. 20-30704) on
Aug. 12, 2020. In the petition signed by Martha S. Colbert,
manager, the Debtor disclosed $4,939,804 in assets and $3,790,327
in liabilities. Wilson Harrell Farrington Ford Wilson Spain &
Parsons, P.A., serves as the Debtor's bankruptcy counsel.
CYXTERA DC: S&P Places 'CCC' ICR on Watch Pos. on Starboard Merger
------------------------------------------------------------------
S&P Global Ratings placing all ratings on Cyxtera DC Holdings Inc.
on CreditWatch with positive implications, including its 'CCC'
issuer credit rating, because the transaction will improve
Cyxtera's liquidity position and credit metrics.
Cyxtera DC Holdings Inc. has entered into a definitive agreement to
merge with Starboard Value Acquisition Corp. (SVAC), whereby about
$650 million of cash will be contributed to repay about $450
million of debt and add $150 million of cash to the balance sheet,
resulting in pro forma leverage of 7.6x from over 10x (before S&P
Global Ratings' adjustments).
The CreditWatch placement follows Cyxtera's announcement that it
will combine with SVAC, with Cyxtera receiving $654 million of
funds as a result of the merger. S&P said, "We expect the
transaction will improve Cyxtera's liquidity position and credit
metrics, likely resulting in at least a one-notch upgrade. However,
given recent operating challenges and elevated leverage, rating
upside could be limited to one notch if we conclude that the
capital structure remains unsustainable longer term. We view this
as the most likely outcome given that its debt burden relative to
its EBITDA base remains substantial, despite recent earnings
stabilization. It is unclear whether the company can significantly
grow earnings and generate cash internally to reduce debt and
further strengthen credit metrics." Although the company also
generated modestly positive free cash flow through third-quarter
2020, much of the improvement was from temporary working capital
inflows, so the sustainability of this trend is uncertain. Still,
the debt reduction will reduce interest expense about 30% and
bolster its cash flow in 2021 and beyond.
Cyxtera experienced elevated customer churn and challenges selling
space since being spun-out from CenturyLink in 2017, which has
resulted in EBITDA declines and significant cash burn. Although the
company has below-industry-average utilization levels (around 67%),
which create the potential for substantial cash generation with
limited capital investments, S&P believes the company operates at a
competitive disadvantage to many peers given its lack of
significant network carrier diversification and associated
interconnection revenue, which create an attractive ecosystem for
cloud and enterprise customers. Still, a historically tight
liquidity profile may have constrained growth initiatives and
potential investments in the business. With the additional capital
infusion and broadened investor base, Cyxtera may have more
financial flexibility for geographic expansion and strategic
mergers and acquisitions.
S&P said, "We intend to resolve the CreditWatch placement following
transaction close, likely in mid-2021. As part of our review, we
will meet with management to better understand the strategic
direction with new ownership having a stake in the business and
board representation. We will also update our financial models with
a focus on assessing deleveraging prospects following acquisition
close. We will also need to verify adjustments the company has made
to EBITDA, as we typically do not provide credit for many
add-backs, such as restructuring and cost savings initiatives."
DASEKE INC: S&P Upgrades ICR to 'B', Outlook Stable
---------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Daseke Inc.,
a Texas-based flatbed and specialized logistics provider, to 'B'
from 'B-'.
S&P said, "At the same time, we are assigning our 'B' issue-level
rating to the company's proposed $400 million term loan B due 2028,
with a '3' recovery rating indicating our expectation of meaningful
(50%-70%; rounded estimate: 65%) recovery in the event of a payment
default.
"The stable outlook reflects our expectation for stable operating
performance in 2021 with improved credit metrics in line with lower
debt balances."
The upgrade reflects the lower debt level and improved credit
measures following the refinancing transaction. Following good
cash flow generation in 2020, Daseke plans to use approximately $90
million excess cash on balance sheet, to repay a portion of its
existing term loan B. The company plans to refinance the balance
with a $400 million seven-year term loan B. The refinancing will
reduce the company's gross debt, improve its debt maturity profile,
and lower annual interest expense. As a result, S&P anticipates
improved credit metrics in 2021, with adjusted leverage about 4x,
and funds from operations (FFO) to debt of about 20% in 2021.
S&P said, "The stable outlook reflects our assumption that Daseke
will benefit from relatively firm topline and earnings this year
due to good market conditions and improved margins. We expect the
company to maintain its credit metrics this year.
"We could raise the rating on Daseke if the company demonstrates
commitment to maintaining adjusted debt to EBITDA about 3x and FFO
to debt about 30% on a sustained basis. This could occur if, for
example, market conditions in the trucking industry continue to
improve or the company achieves higher margins than we anticipate.
Alternatively, we could raise the ratings if we come to believe
cash flow ratios are less volatile than we currently assume.
"We could lower the rating on Daseke in the next 12 months if the
company's debt-to-EBITDA ratio increases above 5x or FFO to debt
deteriorates to less than 12% on a sustained basis. This could be
caused by weaker-than-anticipated operating performance, demand or
pricing pressure, unexpected execution challenges, or large
acquisitions. We could also lower the rating if its liquidity
becomes constrained."
DAVID MICHAEL PETWAY: SFR Buying Lithonia Property for $145K
------------------------------------------------------------
David Michael Petway and Annease Leslie Petway ask the U.S.
Bankruptcy Court for the Southern District of Alabama to authorize
the sale of their real property located at 7928 Union Grove Road,
in Lithonia, Georgia, to SFR XII ATL Owner 1, LP for $145,000.
The Debtors own the subject property. The subject property is not
the homestead of the Debtors and is not necessary for an effective
reorganization in Chapter l1. It is free and clear of any liens.
The Debtors have had a residential tenant in the subject property
who now wished to purchase it outright. However, the tenant was
unable to obtain the necessary financing. The Debtors have now
been approached by an unrelated investor which has made an offer to
purchase the property. There is substantial equity in the property
and reducing that equity to cash for the Debtors' estate will allow
them to address issues with their other creditors. It is in their
best interests to sell the subject property.
The Debtors have received the attached offer from the investor, the
Buyer, to purchase the subject property for the contract price of
$145,000. They would move the Court to approve the contract for
sale and authorize them to sell the subject property pursuant to
its terms. Time is of the essence and, as such, the Debtors are
contemporaneously with the filing of the motion, filing a motion to
expedite hearing.
A copy of the Contract is available at https://tinyurl.com/ybqfq9qn
from PacerMonitor.com free of charge.
The Purchaser:
SFR XII ATL Owner 1, LP
74645 Hawthorne Lane NW
Washington, DC 20016
Telephone: (703) 244-6357
E-mail: Closing@TiberCapital.com
Counsel for Debtors:
J. Willis Garrett III, Esq.
GALLOWAY, WETTERMARK
& RUTENS, LLP
Post Office Box 16629
Mobile, AL 36616-0629
Telephone: (251) 476-4493
Facsimile: (251) 479-5566
The bankruptcy case is In re: David Michael Petway and Annease
Leslie Petway, (Bankr. S.D. Ala. Case No. 20-10507).
DECO ENTERPRISES: Creditor Says Disclosure Insufficient
-------------------------------------------------------
Creditor Benjamin Pouladian objects to Deco Enterprises, Inc.'s
"original
Disclosure statement".
Creditor asserts that the Disclosure Statement's information is
materially inadequate and the Motion must and should be denied and
Deco ordered to amend to provide specific and detailed information
on the primary funding planned for the proposed Plan of
Reorganization.
"[T]here is no further disclosure regarding this new indefinite
debt or new indefinite Deco ownership obligation to be incurred as
a material part of the Plan. Therefore, creditors have no idea
when the "new investor capital" will be obtained, from whom, or how
and under what terms. Moreover, exactly how much will be it be,
$2.4 Million, $2.45 Million or some other amount? When such "a new
value contribution cash infusion/new investor capital" is obtained,
what form will it take? Will it be a loan? If so, will it be
secured by Deco's assets and what payment priority will it have?
Or, will it be the issuance of new shares in the company and to
whom? These questions go on and on and nowhere in the Statement are
they answered," Creditor points out.
Attorneys for Creditor Benjamin Pouladian:
Bruce G. Landau
LANDAU & LANDAU
11260 Overland Avenue, Unit 14G
Culver City, CA 90230
Tel: (310) 838-1507
Fax: (310) 838-1365
E-mail: bruce@landauandlandau.com
About Deco Enterprises
Deco Enterprises, Inc., manufactures lighting fixtures and
systems.
Deco Enterprises filed a voluntary petition under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11846) on Feb. 20,
2020. In the petition signed by Babak Sinai, president/chief
executive officer, the Debtor was estimated to have $1 million to
$10 million in assets and $10 million to $50 million in
liabilities.
The Honorable Sheri Bluebond oversees the case.
Raymond H. Aver, Esq., at the Law Offices of Raymond H. Aver, APC,
is the Debtor's counsel. Mousavi & Lee, LLP, is the special
corporate and litigation counsel.
DELPHI CORP: 6th Circuit Won't Rethink Retirees' Pension Case Loss
------------------------------------------------------------------
Law360 reports that a Sixth Circuit panel won't rethink its
September 2020 decision to greenlight the shutdown of Delphi
Corp.'s pension plan for salaried employees, upholding the Pension
Benefit Guaranty Corp.'s win in the case Thursday, February 25,
2021.
The three-judge panel's refusal to rehear the case arrives four
months after a group of Delphi retirees asked the court to give
their Employee Retirement Income Security Act suit another look,
arguing that the court's ruling ran afoul of U.S. Supreme Court
precedent. The retirees hammered home their point in a follow-up
brief filed Jan. 12, 2021, urging the court to reconsider handing
the decision.
About Delphi Corp.
Based in Troy, Michigan, Delphi Corporation --
http://www.delphi.com/-- is a global supplier of electronics and
technologies for automotive, commercial vehicle and other market
segments. Delphi operates major technical centers, manufacturing
sites and customer support facilities in 30 countries.
The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead
Case No. 05-44481) on Oct. 8, 2005. Skadden, Arps, Slate, Meagher &
Flom LLP, represented the Debtors in their restructuring efforts.
Latham & Watkins LLP, represented the Official Committee of
Unsecured Creditors. As of June 30, 2008, the Debtors' balance
sheet showed $9.16 billion in assets and $23.7 billion in debt.
The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was
not consummated after a group led by Appaloosa Management, L.P.,
backed out from their proposal to provide $2.55 billion in equity
financing to Delphi. At the end of July 2009, Delphi obtained
confirmation of a revised plan, build upon a sale of the assets to
a entity formed by some of the lenders who provided $4 billion of
debtor-in-possession financing, and General Motors Company.
On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became
effective. A Master Disposition Agreement executed among Delphi
Corporation, Motors Liquidation Company, General Motors Company, GM
Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's
business among three separate parties -- DPH Holdings LLC, GM
Components, and DIP Holdco 3.
Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is
responsible for the post-Effective Date administration and eventual
closing of the Chapter 11 cases as well as the disposition of
certain retained assets and payment of certain retained liabilities
as provided under the Modified Plan.
Delphi Automotive PLC is a UK-based company formed in May 2011 as a
holding company for US-based automotive parts manufacturer Delphi
Automotive LLP. Delphi Automotive LLP is the successor to the
former Delphi Corporation. At the time of its formation, Delphi
Automotive PLC filed an initial public offering seeking to raise at
least $100 million.
DIAMOND OFFSHORE: Court Gives Green Light for Plan Voting
---------------------------------------------------------
Daniel Gill of Bloomberg Law reports that Diamond Offshore Drilling
Inc. got court approval to solicit votes for a restructuring plan
that would swap debt for equity and pay unsecured creditors in
full.
Under the plan, holders of senior notes, totaling about $2 billion,
would get 70% of new common stock issued for the company exiting
bankruptcy. The remaining 30% would go to buyers in a private
placement and separate rights offering.
The plan would leave the debtor with a "sustainable capital
structure" and position it for future success, according to
disclosures approved Friday, February 26, 2021, by Judge David R.
Jones of the U.S. Bankruptcy Court.
About Diamond Offshore
Diamond Offshore Drilling, Inc., provides contract drilling
services to the energy industry worldwide. The company operates a
fleet of 15 offshore drilling rigs, including 4 drillships and 11
semi-submersible rigs. It serves independent oil and gas
companies, and government-owned oil companies. The company was
founded in 1953 and is headquartered in Houston, Texas. Diamond
Offshore Drilling is a subsidiary of Loews Corporation. The
company has major offices in Australia, Brazil, Mexico, Scotland,
Singapore, and Norway.
Diamond Offshore Drilling, Inc., along with its affiliates, filed a
voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32307) on April
26, 2020. The petitions were signed by David L. Roland, senior vice
president, general counsel, and secretary.
As of Dec. 31, 2019, the Debtors disclosed $5,834,044,000 in total
assets and $2,601,834,000 in total liabilities.
The case is assigned to Judge David R. Jones.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Porter Hedges LLP
are acting as the Company's legal counsel and Alvarez & Marsal is
serving as the Company's restructuring advisor. Lazard Freres &
Co. LLC is serving as financial advisor to the Company. Prime
Clerk LLC is the claims and noticing agent.
DIAMOND OFFSHORE: To Seek Plan Confirmation on April 8
------------------------------------------------------
Judge David R. Jones approved Diamond Offshore Drilling, Inc.'s
Disclosure Statement and set a hearing for April 8, 2021, at 9 a.m.
to consider confirmation of the Debtor's Plan.
The deadline for voting and filing objections to confirmation of
the Plan is March 30, 2021, at 4 p.m. (Central Time). The Debtor's
reply deadline is April 6, 2021.
The Debtor filed a Disclosure Statement for the solicitation of
votes on the Second Amended Plan on Feb. 26, 2021.
Holders of over 70% of the RCF Claims (the "Consenting RCF
Lenders") and over 77% of the Senior Notes Claims (the "Consenting
Noteholders") have already agreed, subject to the terms and
conditions of the Plan Support Agreement, to vote in favor of the
Plan.
The Debtors have documented the terms of the Restructuring
contemplated by the Plan Support Agreement, including through the
Plan and this Disclosure Statement. The key terms are:
* Exit Facilities. On the Effective Date, the applicable
Reorganized Debtors will enter into Exit Facilities consisting of
(a) the $300 to 400 million aggregate principal amount first lien,
first out Exit Revolving Credit Facility, (b) the $100 to 200
million aggregate principal amount first lien, last out Exit Term
Loan Facility, and (c) $124,995,750 million aggregate principal
amount in first lien, last out Exit Notes, which are pari passu
with the Exit Term Loan Facility. The Exit Revolving Credit
Facility will be fully-committed, with up to $100 million drawn as
of the Effective Date. $75 million of the Exit Notes (the Funded
Notes) will be issued and outstanding as of the Effective Date,
excluding any Exit Notes issued on account of the Commitment
Premium, while $39.675 million of the Exit Notes (the Delayed Draw
Notes) will remain fully-committed but undrawn as of the Effective
Date and will be accessible through delayed draw mechanics. The
Debtors have secured commitments from certain RCF Lenders pursuant
to a Commitment Letter that ensures that at least $300 million and
up to $400 million aggregate principal amount of the Exit Revolving
Credit Facility is fully-committed on the Effective Date.
* Funding of the Exit Notes. The Debtors have secured
commitments from certain Holders of the Senior Notes pursuant to a
Backstop Agreement that ensures the Exit Notes are fully-funded or
committed to, as applicable, on the Effective Date through (a)
certain Private Placements set forth in the Backstop Agreement and
(b) two fully-backstopped Rights Offerings pursuant to which
eligible Holders of Senior Notes will receive Subscription Rights
to purchase or commit to purchase the Exit Notes not sold or
committed to pursuant to the Private Placements.
* New Equity. Holders of Senior Notes Claims will receive 70%
of the New Diamond Common Shares, subject to dilution by the MIP
Equity Shares and the New Warrants, on account of the full
equitization of their Senior Notes Claims pursuant to the Plan. The
remaining 30% of the New Diamond Common Shares will be issued on
the Effective Date to purchasers of the Exit Notes pursuant to the
Private Placements and the Rights Offerings, subject to dilution by
the MIP Equity Shares and the New Warrants.
* New Warrants. Existing Parent Equity Interests will be
canceled pursuant to the Plan, and Holders of Existing Parent
Equity Interests will receive their Pro Rata share of the New
Warrants on the Effective Date. The New Warrants are exercisable
into 7% of the New Diamond Common Shares, subject to dilution by
the MIP Equity Shares, struck at a total enterprise value implying
a 100% recovery to Holders of Senior Notes Claims on the face value
of their Senior Notes Claims (including accrued interest as of the
Petition Date)
According to the Amended Disclosure Statement, Class 4 Senior Notes
Claims will recover 37% of their claims, and Class 7 Existing
Parent Equity Interests will recover $3 million. General unsecured
creditors are unimpaired, thus, will recover 100% under the Plan.
A copy of the Disclosure Statement for the Second Amended Plan
filed Feb. 26, 2021, is available at https://bit.ly/3sx5Avu
About Diamond Offshore
Diamond Offshore Drilling, Inc., provides contract drilling
services to the energy industry worldwide. The company operates a
fleet of 15 offshore drilling rigs, including 4 drill ships and 11
semi-submersible rigs. It serves independent oil and gas companies,
and government-owned oil companies. The company was founded in 1953
and is headquartered in Houston, Texas. Diamond Offshore Drilling
is a subsidiary of Loews Corporation. The company has major offices
in Australia, Brazil, Mexico, Scotland, Singapore, and Norway.
Diamond Offshore Drilling, Inc., along with its affiliates, filed a
voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32307) on April
26, 2020. The petitions were signed by David L. Roland, senior
vice president, general counsel, and secretary.
As of Dec. 31, 2019, the Debtors disclosed $5,834,044,000 in total
assets and $2,601,834,000 in total liabilities.
The case is assigned to Judge David R. Jones.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Porter Hedges LLP
are acting as the Company's legal counsel and Alvarez & Marsal is
serving as the Company's restructuring advisor. Lazard Freres &
Co. LLC is serving as financial advisor to the Company. Prime
Clerk LLC is the claims and noticing agent.
DMG PRACTICE: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on DMG
Practice Management Solutions. S&P also assigned its 'B'
issue-level and '3' recovery ratings to the company's senior
secured debt. The '3' recovery rating indicates its expectation for
meaningful (50%-70%; rounded estimate: 50%, down from 55%) recovery
in the event of default.
S&P said, "The stable outlook reflects our expectation for steadily
improving patient volume growth as the COVID-19 pandemic eases,
leading to mid-single-digit percent organic growth over the next
two years. We also expect DMG will prioritize its future cash flow
toward its growth strategy while maintaining relatively stable
EBITDA margins.
"We expect DMG to remain highly leveraged with debt-to-EBITDA of
more than 6x over the next two years. The company's proposed use of
$175 million in cash from its balance sheet to fund the dividend
limits the increase in leverage. However, we believe DMG will
pursue an aggressive growth strategy, including the acquisitions of
physician practices. Given the company's modest cash flow, this
will likely require additional debt. We also expect DMG's financial
sponsor to prioritize shareholder-friendly activities over reducing
leverage."
The company's patient volume has recovered to above pre-pandemic
levels. DMG's revenue declined significantly in second-quarter 2020
amid widespread stay-at-home orders during the onset of the
COVID-19 pandemic. After reaching its trough in April, patient
volume steadily recovered each month and currently exceeds
pre-pandemic figures. The company's ability to offer telehealth
visits to its patients contributed to its recovery. Still, S&P sees
some continued uncertainty amid the ongoing pandemic.
S&P said, "We expect strong revenue growth over the next several
years. DMG intends to pursue an aggressive growth strategy that
includes hiring new physicians and acquiring physician practices.
The recent acquisition of its Breakthrough Care Center joint
venture should also contribute to revenue and EBITDA expansion.
"We expect DMG to generate modest cash flow of $24 million-$26
million in 2021 This forecast excludes the required repayment of
Centers for Medicare and Medicaid Services (CMS) advanced payments
and Coronavirus Aid, Relief, and Economic Security (CARES)
Act-related deferred payroll taxes that we view as one-time in
nature. However, we expect capital expenditure (capex) will be
elevated to fund additional projects.
"Our stable outlook on DMG reflects our view that it will direct
all of its cash flow toward growth while maintaining relatively
stable EBITDA margins. We expect DMG's adjusted leverage will
remain above 6x for the next few years, given the company's growth
trajectory and financial-sponsor ownership.
"We could lower our rating on DMG if it suffers a sustained EBITDA
margin decline of 200 basis points or more and a material reduction
in its revenue growth that leads it to sustain free operating cash
flow of less than $20 million, excluding the required repayment of
CMS advanced payments and CARES Act-related deferred payroll taxes.
This would most likely occur if the company is unsuccessful in
integrating new physician practices following a large acquisition
or if the operational performance of its existing facilities
deteriorates and leads to persistent cash flow deficits.
"We view an upgrade as unlikely over the next year given DMG's very
narrow geographic focus and our belief that its financial-sponsor
ownership will continue to result in aggressive financial policies
that prioritize business expansion and shareholder reward over
permanent debt reduction."
DYNATRACE INC: S&P Upgrades ICR ro 'BB+', Outlook Stable
--------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Waltham,
Mass.-based software intelligence company Dynatrace Inc. to 'BB+'
from 'BB-', reflecting greater scale as well as a pristine balance
sheet with low financial leverage and adequate liquidity.
S&P said, "We are also raising our issue-level rating on
Dynatrace's first-lien debt to 'BB+' from 'BB-'. The recovery
rating remains '3'.
"The stable outlook reflects our expectation for strong
double-digit increased revenue for fiscal 2021 and 2022, which will
allow Dynatrace to sustain leverage comfortably below 1.5x, and
generate free operating cash flow (FOCF) to debt above 40%.
"We are revising our view of the Dynatrace's business risk profile
to fair from weak, reflecting greater scale, enhanced
competitiveness, and a modest improvement in profitability.
Dynatrace has significantly outperformed our revenue expectations
while enhancing its operating efficiency, which along with a higher
share of subscriptions revenue had increased trailing-12-months S&P
Global Ratings' EBITDA margin to 30% (as of Dec. 31, 2020).
Furthermore, the company has consistently outpaced the worldwide
APM market growth over the past three years as it continues to add
new logos on the back of increased demand for software solutions
designed to support DevOps and multicloud infrastructure
initiatives. With our expectation of a strong fourth quarter for
fiscal 2021 and a robust fiscal 2022 forecast, we believe that
Dynatrace can continue to achieve revenue growth well in excess of
20% year over year, well ahead industry growth rates (11% compound
annual growth rate). Looking further ahead, we expect Dynatrace to
continue to report robust growth over the next two years, and
anticipate that revenues will surpass the $1 billion mark by fiscal
2023, partially driven by ongoing strong
work-from-home/digitization trends. However, despite our
expectation of consistent strong topline growth, we see limited
margin expansion because the company will make investments in
research and development, marketing, and sales force to support its
robust growth. Accordingly, we expect S&P Global Ratings' EBITDA
margins to remain range-bound in the high-20% to low-30% area for
the next year or two.
The upgrade also reflects Dynatrace's declining leverage and
improved free operating cash flow (FOCF) generation. S&P said, "The
company's S&P Global Ratings' adjusted leverage declined to 2.5x at
the end of third quarter of fiscal 2021, and we expect it to
compress further to below 1.0x by the end of fiscal 2021,
representing a significant improvement from more than 4.0x leverage
in fiscal 2020. Leverage compression is driven by
trailing-12-months EBITDA-margin expansion to 30%, debt repayments
of approximately $120 million, and by a change in Dynatrace's
business risk profile that now results in netting cash and
equivalents against outstanding debt (a practice that is consistent
with our criteria). Moreover, free cash flow generation remains
robust, supported by upfront billings and a significantly lower
interest burden. Subsequently, we expect Dynatrace to generate at
least $200 million in FOCF for 2021 and 2022. Given the notable
strength in the company's cash flow generation ability, we believe
it could repay more of its outstanding debt within the next 24
months, and expect the firm to be in a significant net cash
position by the end of fiscal 2022."
Management's commitment to reduce leverage is consistent with our
current ratings; however, lack of a clearly articulated financial
policy remains a risk. S&P said, "Following Thoma Bravo LLC's
disposition to below 40%, we changed our assessment of Dynatrace's
financial policy to neutral from FS-6. The change in assessment was
consistent with our expectation that management will prioritize
debt repayments over aggressive shareholder returns or any
debt-financed acquisitions. That said, upside to our ratings is
limited by the lack of a stated leverage target (or financial
policy), as financial metrics could deteriorate if the company
starts paying dividends, increases share repurchases, or undertakes
significant acquisitions."
S&P said, "The stable outlook on Dynatrace reflects our view that
its compelling product pipeline will support further market share
gains in the software solutions market/enterprise segment, which
continues to see strong demand driven by work-from-home and
digitization trends. We forecast credit metrics to remain strong,
supported by the firm's conservative balance sheet management and
expect the company to generate robust free cash flow.
"We could lower the rating on Dynatrace if loss of share within
core APM markets, margin erosion due to transition away from
perpetual license sales, or poor execution on separation leads to
weaker EBITDA and cash flow such that leverage remains sustained
above 1.5x, or FOCF to debt subsides below 40%.
"Although highly unlikely over the next 12 months, we would look to
robust revenue and free cash flow growth along with additional
market share gains as primary factors for an upgrade to an
investment-grade 'BBB-' rating. We would also look for further
EBITDA margin expansion as well as net leverage remaining below 1x
and a stated commitment to a conservative financial policy as
additional support for a potential upgrade."
EKSO BIONICS: Incurs $15.8 Million Net Loss in 2020
---------------------------------------------------
Ekso Bionics Holdings, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$15.83 million on $8.88 million of revenue for the year ended Dec.
31, 2020, compared to a net loss of $12.13 million on $13.92
million of revenue for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $20.60 million in total
assets, $16.16 million in total liabilities, and $4.43 million in
total stockholders' equity.
Gross profit for the full year ended Dec. 31, 2020 was
approximately $5.1 million, representing a gross margin of
approximately 57%, compared to gross profit of $6.8 million for the
same period in 2019, representing a gross margin of 49%. The
increase in gross margin was primarily due to higher average
selling prices and lower production costs of the Company's EksoNR
devices, and the introduction of EVO.
Sales and marketing expenses for the full year ended Dec. 31, 2020
were $7.8 million, compared to $11.4 million for the same period in
2019, a decrease of $3.6 million. The decrease was primarily due
to lower employee and selling expenses, lower general marketing and
trade show expenses and a decrease in clinical trial activities due
the completion of the Company's main clinical trial in the first
quarter of 2019.
Research and development expenses for the full year ended Dec. 31,
2020 were $2.5 million, compared to $4.6 million in the same period
in 2019, a decrease of $2.1 million. The decrease was primarily
due to lower employee expenses and lower patent and licensing
costs.
General and administrative expenses for the full year ended Dec.
31, 2020 were $7.7 million, compared to $7.4 million in the same
period in 2019, an increase of $0.3 million primarily due to an
increase in legal expense.
Cash on hand at Dec. 31, 2020 was $12.9 million, compared to $10.9
million at Dec. 31, 2019. For the full year ended Dec. 31, 2020,
the Company used $8.8 million of cash in operations, compared to
$15.8 million for the same period in 2019.
Fourth Quarter 2020 Financial Results
Revenue was $2.3 million for the quarter ended Dec. 31, 2020,
compared to $3.7 million for the same period in 2019. Revenue in
the fourth quarter of 2020 included approximately $2.1 million in
EksoHealth revenue and approximately $0.2 million in EksoWorks
revenue. The Company booked a total of 14 EksoNR units in the
fourth quarter of 2020, including 4 rental units.
Gross profit for the quarter ended Dec. 31, 2020 was $1.4 million,
compared to $1.9 million in the same period in 2019, representing a
gross margin of approximately 60% in the fourth quarter of 2020,
compared to a gross margin for the same period in 2019 of 50%. The
overall increase in gross margin is primarily due to higher average
selling prices and lower production costs of the Company's EksoNR
devices, and the introduction of EVO.
Sales and marketing expenses for the quarter ended Dec. 31, 2020
were $1.8 million, a decrease of $1.0 million, or approximately
35%, compared to the same period in 2019. The decrease was
primarily due to lower employee and selling expenses and lower
general marketing and trade show expenses.
Research and development expenses for the quarter ended Dec. 31,
2020 were $0.7 million, compared to $0.6 million for the same
period in 2019, an increase of $0.1 million. The increase was
primarily due to higher product development activity expenses.
General and administrative expenses for the quarter ended Dec. 31,
2020 were $1.9 million, compared to $1.4 million for the same
period in 2019, an increase of $0.5 million, or approximately 34%.
The increase was primarily due to higher non-salary compensation
expenses.
Loss on warrant liabilities for the quarter ended Dec. 31, 2020 was
$1.5 million due to the revaluation of warrants issued in 2019 and
2020, compared to a $0.3 million gain associated with the
revaluation of warrants issued in 2015 and 2019 for the same period
in 2019.
Net loss applicable to common stockholders for the quarter ended
Dec. 31, 2020 was $4.0 million, or $0.48 per basic and diluted
share, compared to net loss of $2.7 million, or $0.53 per basic and
diluted share, for the same period in 2019.
"Through increased customer engagement levels and promising
traction gained by our new subscription selling model, our fourth
quarter 2020 revenues reflect continued execution of our commercial
strategy in a challenging selling environment," said Jack Peurach,
president and chief executive officer of Ekso Bionics. "Led by our
virtual training solutions and educational webinars, our ability to
adapt to a digital platform allowed us to maintain consistent
customer access and showcase positive patient outcomes from our
EksoNR devices. On the industrial front, we are encouraged by the
growing customer excitement for EVOTM as well as promising order
trends across multiple key industry verticals. With the strong
backing from our shareholders following our recently closed $40
million public offering, we are excited to have the financial
flexibility that will support our growth strategy in 2021 and
beyond."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1549084/000154908421000012/ekso-20201231.htm
About Ekso Bionics
Ekso Bionics -- http://www.eksobionics.com-- is a developer of
exoskeleton solutions that amplify human potential by supporting or
enhancing strength, endurance and mobility across medical and
industrial applications. Founded in 2005, the Company continues to
build upon its expertise to design some of the most cutting-edge,
innovative wearable robots available on the market. The Company is
headquartered in the Bay Area and is listed on the Nasdaq
CapitalMarket under the symbol EKSO.
EKSO BIONICS: To Hold Annual Stockholders' Meeting on June 10
-------------------------------------------------------------
The Board of Directors of Ekso Bionics Holdings, Inc. determined to
schedule the Company's 2021 Annual Meeting of Stockholders for
Thursday, June 10, 2021. The time and location of the Annual
Meeting will be as set forth in the Company's proxy statement for
the Annual Meeting to be filed with the Securities and Exchange
Commission.
Under the Company's By-laws, if a stockholder wishes to present a
proposal or wants to nominate candidates for election as directors
at the Annual Meeting, such stockholder must give written notice to
the Company's Corporate Secretary in writing at its principal
offices, Ekso Bionics Holdings, Inc., 1414 Harbour Way South, Suite
1201, Richmond, California 94804, Attention: Corporate Secretary.
The Secretary must receive such notice no later than March 12,
2021. Additionally, notice of any stockholder proposal (including a
proposal to nominate a candidate for director) that is not
submitted for inclusion in the proxy statement for the Annual
Meeting must be delivered to or mailed and received at the
principal executive offices of the Company not later than April 14,
2021. Any stockholder proposal or director nomination must also
comply with the requirements of Nevada law, the rules and
regulations promulgated by the SEC and the Company's By-laws, as
applicable. Any notice received after these deadlines will be
considered untimely and not properly brought before the Annual
Meeting.
The Company's By-laws also specify requirements as to the form and
content of a stockholder's notice. The Company will not entertain
any proposals or nominations that do not meet those requirements.
About Ekso Bionics
Ekso Bionics -- http://www.eksobionics.com-- is a developer of
exoskeleton solutions that amplify human potential by supporting or
enhancing strength, endurance and mobility across medical and
industrial applications. Founded in 2005, the Company continues to
build upon its expertise to design some of the most cutting-edge,
innovative wearable robots available on the market. The Company is
headquartered in the Bay Area and is listed on the Nasdaq
CapitalMarket under the symbol EKSO.
Ekso Bionics reported a net loss of $15.83 million for the year
ended Dec. 31, 2020, compared to a net loss of $12.13 million for
the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$20.60 million in total assets, $16.16 million in total
liabilities, and $4.43 million in total stockholders' equity.
ENRAMADA PROPERTIES: Montes Buying Whittier Property for $785K
--------------------------------------------------------------
Enramada Properties asks the U.S. Bankruptcy Court for the Central
District of California to authorize the bidding procedures in
connection with the sale of the real property located at 7211
Washington Ave., in Whittier, California, to Ernesto A. Montes for
$785,000, subject to overbid.
A hearing on the Motion is set for March 25, 2021, at 10:00 a.m.
The Fidelity One Investment Trust holds a deed of trust on the
Washington property to secure a note in the approximate amount of
$555,000. The Debtor intends to pay Fidelity One the full amount
required for satisfaction of its lien out of escrow. To the extent
that there is a dispute over the amount required to pay off
Fidelity One's lien, the Debtor will immediately tender the
undisputed portion of the payoff to Fidelity One and keep the
remaining proceeds in a segregated account pending resolution of
the dispute.
The Debtor estimates that approximately $20,146 is due in property
taxes against the Washington Property for fiscal year 2018-2020.
The property taxes Will be paid out of the escrow account.
The sale price of $785,000 represents the Washington Property's
fair market value. The Debtor's real estate agent Lourdes Silva
reviewed comparable sales in the area and-performed an inspection
of the Property. Based on the results of her analysis, the Agent
determined the Property's fair market value to be approximately
$785,000. As provided in Ms. Silva's declaration, she began
marketing the Washington Property in December 2020.
As a result of Ms. Silva's marketing efforts, the Debtor received
the offer to purchase from the Buyer, subject to overbid. It was
the best offer received and was accepted by the Debtor subject to
Court approval.
Subject to Court approval, the Debtor proposes to sell the
Washington Property to the Buyer for $785,000. The parties
executed California Residential Purchase Agreement and Joint Escrow
Instructions and Buyer Counter Offer No. 1. The Buyer has
deposited $10,000 into escrow.
The Purchase Agreement provides in part:
a. Buyer acknowledge that it is buying the Washington Property
"as is" and "where is" without warranties of any kind, express or
implied, being given by the Debtor, its agents concerning the
Property's condition;
b. Buyer is aware the Offer is contingent upon Court
approval;
c. There are no contingencies to this transaction;
d. If a successful overbidder is accepted and approved by the
Court, the successful overbidder is to reimburse the Buyer up to
$2,000 for costs incurred; and
e. Any and all disputes which involve in any manner the
bankruptcy estate or the Trustee arising from the Purchase
Agreement will be resolved only in the Court.
In order to obtain the highest and best offer for the benefit of
the estate's creditors, the Debtor proposes that the offer be
subject to overbid. Notice is being provided of the opportunity
for overbidding to all interested parties.
The Debtor asks that the Court approves the following overbid
procedure:
a. Only qualified bidders may submit an overbid.
b. Each bid must be received by the Debtor and its counsel no
later than three business days prior to the healing on the Motion.
The Debtor has discretion to shorten the deadline to submit
overbids.
c. The initial overbid must exceed the original Offer by a
minimum of $5,000. Each subsequent bid must then be in increments
of at least $2,500.
d. Each bid must be all cash, non-contingent, and on the same
terms and conditions, other than price, as those proposed in the
Offer.
e. Each bidder must match all terms and conditions of the
original bid. Thus, an "earnest money" deposit of at least $10,000
must be made. The deposit must be received by the Debtor no later
than three business days prior to the hearing on the Motion. The
deposit must be deposited with the Debtor so that it will have
access to the funds no later than three business days prior to the
hearing on the Motion.
f. Should a bidder fail to qualify for financing or timely
close escrow, the $10,000
deposit is non-refundable.
The procedures will provide an orderly completion of the Greensward
Property by permitting all bidders to compete on similar terms and
will allow interested parties and the Court to compare competing
bids in order to realize the highest benefit for the estate.
On Jan. 25, 2021, the Court entered its order authorizing the
Debtor to employ Lourdes Silva as its real estate agent. Through
the Motion, the Debtor asks authority to pay its agent an amount
not greater than 3% of the purchase price or applicable overbid,
which will be shared with the Proposed Buyer's broker, if any,
provided that the estate nets a like amount and upon entry of an
order approving the Motion. The Debtor has determined that a 3%
commission is appropriate.
The Motion is in the best interests of the estate and should be
approved. Assuming the Court approves the Motion and no overbids
are received, the estate will receive approximately $170,604. The
net proceeds will be realized for the benefit of the Estate's
creditors.
The waiver of the stay imposed by Rule 6004(h) is appropriate.
Time is of the essence and the Buyer can immediately complete the
sale. Accordingly, the Debtor asks that the Court waives the stay
imposed by Rule 6004(h).
A copy of the Agreement is available at
https://tinyurl.com/xagcj2dx from PacerMonitor.com free of charge.
About Enramada Properties
Enramada Properties, LLC, based in Whittier, California, holds a
joint tenancy interest in a property located in Los Angeles,
California valued at $325,000. It also owns in fee simple two
real
properties in Whittier having an aggregate current value of $1.1
million.
Enramada Properties filed for Chapter 11 bankruptcy (Bankr. C.D.
Calif. Case No. 19-19869) on August 22, 2019. The Hon. Julia W.
Brand oversees the case. Andrew S. Bisom, Esq., at The Bison Law
Group, serves as the Debtor's bankruptcy counsel.
In its petition, the Debtor listed total assets of $1,429,000
against total liabilities of $1,724,414. The petition was signed
by Sylvia Novoa, managing member.
EVERGREEN DEVELOPMENT: Case Summary & 15 Unsecured Creditors
------------------------------------------------------------
Debtor: Evergreen Development Group
FDBA The Evergreens of Apple Valley LLP
104 Oak Street South
New London, MN 56273
Business Description: Evergreen Development Group is primarily
engaged in renting and leasing real estate
properties.
Chapter 11 Petition Date: February 26, 2021
Court: United States Bankruptcy Court
District of Minnesota
Case No.: 21-60066
Judge: Hon. Michael E. Ridgway
Debtor's Counsel: Cameron A. Lallier, Esq.
FOLEY & MANSFIELD PLLP
250 Marquette Avenue, Suite 1200
Minneapolis, MN 55401
Tel: 612-338-8788
Fax: 612-338-8690
E-mail: jlavaque@foleymansfield.com
Debtor's
Financial
Consultant &
Adviser: PLATINUM MANAGEMENT, LLC
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Robert A. Hopman, general partner.
A copy of the petition containing, among other items, a list of the
Debtor's 15 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/2AAU6JQ/Evergreen_Development_Group__mnbke-21-60066__0001.0.pdf?mcid=tGE4TAMA
EVERGREENS OF APPLE: Case Summary & 15 Unsecured Creditors
----------------------------------------------------------
Debtor: The Evergreens of Apple Valley, L.L.P.
6011 Earle Brown Drive
Brooklyn Center, MN 55430
Business Description: The Evergreens of Apple Valley, L.L.P. is
primarily engaged in renting and leasing
real estate properties.
Chapter 11 Petition Date: February 26, 2021
Court: United States Bankruptcy Court
District of Minnesota
Case No.: 21-40334
Judge: Hon. Kathleen H. Sanberg
Debtor's Counsel: Cameron A. Lallier, Esq.
FOLEY & MANSFIELD PLLP
250 Marquette Avenue, Suite 1200
Minneapolis, MN 55401
Tel: 612-338-8788
Fax: 612-338-8690
E-mail: jlavaque@foleymansfield.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Robert A. Hopman, general partner.
A copy of the petition containing, among other items, a list of the
Debtor's 15 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/VRSS6OA/The_Evergreens_of_Apple_Valley__mnbke-21-40334__0001.0.pdf?mcid=tGE4TAMA
FERRELLGAS PARTNERS: Says .09% Unitholders Objections w/o Merit
---------------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District
of Delaware has scheduled March 5, 2021, at 10:30 a.m. (Prevailing
Eastern Time) as the continued hearing date for final approval of
the Disclosure Statement and confirmation of the Plan in the
bankruptcy cases of Ferrellgas Partners, L.P. and Ferrellgas
Partners Finance Corp.
According to the Debtors, support for the Plan is overwhelming and
unequivocal. The Plan has been accepted by both voting classes,
including acceptance by over 95% of the unitholders that voted, and
the Debtors have resolved all but three objections to the Plan.
The Plan effectuates a pre-negotiated debt-for-equity swap to
satisfy the 2020 Notes Claims and leaves existing equity holders
with the same rights and interests that they had on Petition Date.
The mechanics of the Plan are simple -- holders of 2020 Notes
Claims receive New Class B Units, which if not redeemed in the
first five years after the Effective Date, will be converted into
New Class A Units. Meanwhile, holders of Existing LP Units
Interests, despite being "out of the money" and, therefore, not
entitled to any recovery, will retain the same interests that they
currently have, which are renamed New Class A Units.
Given the pre-petition maturity of the 2020 Notes, absent a
consensual restructuring pursuant to the Plan, the holders of the
2020 Notes Claims could have foreclosed on the Debtors' assets and
eliminated the Existing LP Units Interests in their entirety
ensuring no recovery -- a result that management strenuously
opposed in plan negotiations and is successfully avoided under the
Plan.
The most notable feature of the Plan is that it provides value to
the holders of Existing LP Units Interests by allowing them to
retain their interests in Reorganized HoldCo, even though senior
debt is not being paid in full. Notwithstanding the remarkable
outcome achieved for holders of Existing LP Units Interests, three
out of over 60,000 holders of Existing LP Units Interests filed
Objections to approval of the Disclosure Statement and confirmation
of the Plan.
The Objecting Unitholders assert the Plan was not proposed in good
faith and unfairly discriminates against holders of Existing LP
Units Interests. These assertions are without any merit and mirror
the complaints already rejected by the Court when these same
unitholders sought the appointment of an equity committee. Their
Plan objections also perpetuate their ongoing (or purposeful
refusal to acknowledge the) confusion between the Debtors --
Ferrellgas Partners, L.P. and Ferrellgas Partners Finance Corp. --
with non-debtor entities in the Ferrellgas enterprise, particularly
the Ferrellgas enterprise's primary operating company OpCo.5
Despite the Objecting Unitholders' best efforts to fabricate
substantive consolidation of the Debtors with their non-debtor
affiliates, the entities will not be substantively consolidated
under the Plan, nor is there any legitimate basis for such
consolidation. And, while consummation of the overwhelmingly
consensual restructuring of the Debtors is conditioned on
completion of OpCo's restructuring outside of these Chapter 11
Cases, the Objecting Unitholders' attempt to introduce extraneous
and irrelevant facts, while ignoring the irrefutable truth that
their equity interests are being preserved and treated in
accordance with the terms of HoldCo's limited partnership agreement
and applicable law, renders their objections without merit. Thus,
the Disclosure Statement should be approved and the Plan should be
confirmed.
To date, the Debtors have resolved all informal objections and
comments to the Plan, including the comments of the United States
Trustee. The only objections that remain are the Unitholder
Objections, and the Eddystone Rail Company, LLC's reservation of
rights.
The Debtors will endeavor to resolve additional issues before the
Combined Hearing through the inclusion of mutually agreeable
provisions in the Confirmation Order, modification of the Plan, or
by other means. To the extent the Objections are not resolved,
however, the Debtors submit that the Objections should be
overruled.
The Debtors note that the Objecting Unitholders comprise three out
of a total of 3,176 holders (less than .09%) of Existing LP Units
Interests that voted on the Plan.
A copy of the Second Amended Prepackaged Plan filed Feb. 26, 2021,
is available at https://bit.ly/3bLeKhc
About Ferrellgas Partners
Ferrellgas Partners, L.P. ("HoldCo") is a publicly-traded Delaware
limited partnership formed in 1994 that has two direct
subsidiaries, Ferrellgas Partners Finance Corp. and Ferrellgas,
L.P. Partners Finance is a Delaware corporation formed in 1996 and
has nominal assets, no employees and does not conduct any
operations, but solely serves as co-issuer and co-obligor for the
2020 Notes. Ferrellgas, primarily through Ferrellgas, L.P., is a
distributor of propane and related equipment and supplies to
customers in the United States. Ferrellgas' market areas for
residential and agricultural customers are generally rural while
the market areas for industrial/commercial and portable tank
exchange customers are generally urban.
On Jan. 11, 2021, Ferrellgas Partners Finance Corp. and Ferrellgas
Partners, L.P., sought Chapter 11 protection (Bankr. D. Del. Case
No. 21-10020 to 21-10021). The operating company, Ferrellgas LP,
did not file a Chapter 11 petition.
Ferrellgas Partners, L.P., was estimated to have $100 million to
$500 million in assets and liabilities as of the bankruptcy
filing.
The Hon. Mary F. Walrath is the case judge.
The Debtors tapped SQUIRE PATTON BOGGS (US) LLP as primary
restructuring counsel; CHIPMAN, BROWN, CICERO & COLE, LLP, as
Delaware bankruptcy counsel; MOELIS & COMPANY LLC as investment
banker; and RYNIKER CONSULTANTS as financial advisor. PRIME CLERK
LLC is the claims agent.
FIT FOOD: Case Summary & 16 Unsecured Creditors
-----------------------------------------------
Debtor: Fit Food Fresh Inc.
129 NW 13 St
#33
Boca Raton, FL 33432
Business Description: Fit Food Fresh Inc. --
https://fitfoodfresh.com -- is a premium
meal plan provider.
Chapter 11 Petition Date: February 26, 2021
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 21-11858
Judge: Hon. Mindy A. Mora
Debtor's Counsel: Susan D. Lasky, Esq.
SUE LASKY, PA
320 SE 18 Street
Fort Lauderdale, FL 33316
Tel: 954-400-7474
E-mail: Jessica@SueLasky.com
Total Assets: $125,636
Total Liabilities: $1,667,058
The petition was signed by Stephen Kaiser, president.
A copy of the petition containing, among other items, a list of the
Debtor's 16 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/TMHB54Q/Fit_Food_Fresh_Inc__flsbke-21-11858__0001.0.pdf?mcid=tGE4TAMA
FIVE STAR: Incurs $7.6 Million Net Loss in 2020
-----------------------------------------------
Five Star Senior Living Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$7.59 million on $1.16 billion of total revenues for the year ended
Dec. 31, 2020, compared to a net loss of $20 million on $1.41
billion of total revenues for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $454.21 million in total
assets, $177.91 million in total current liabilities, $65.77
million in total long-term liabilities, and $210.53 million in
total shareholders' equity.
Katherine Potter, president and chief executive officer, made the
following statement regarding the fourth quarter 2020 results:
"Five Star took a significant step toward recovery from the impact
of COVID-19 on December 19, 2020, when we began hosting vaccination
clinics in our communities for eligible residents and team members.
As of February 20, 2021, Five Star has hosted vaccination clinics
in 249 of our 252 communities, and 25,319 Five Star residents and
team members have received at least one dose of a vaccine, which is
an average of more than 630 vaccinations per day. By the end of
the first quarter, we expect to have completed vaccination clinics
at substantially all our communities, including administering
second doses to residents and team members.
"Sales leads, which have been an historic leading indicator of
move-in activity and a key component in driving occupancy, are 83%
higher so far in 2021, when compared with the rolling four-week
average sales leads at the beginning of the fourth quarter. We
find this encouraging and believe it is a direct result of our
efforts to make the vaccine available in our communities and the
growing confidence in our ability to provide an exceptional
resident experience.
During the fourth quarter, Five Star continued to generate net
income, despite the ongoing impact of COVID-19 on the senior living
industry. Our rehabilitation and wellness services segment
generated $20.3 million in revenues for the fourth quarter, which
is now 38% of our total management and operating revenues, an
increase from 33% of our overall management and operating revenue
from the previous year pro forma results. Our liquidity remains
strong with $84.4 million of unrestricted cash on our balance sheet
and no amounts outstanding on our $65.0 million revolving credit
facility, and we generated positive Adjusted EBITDA in every
quarter of 2020, including during the COVID-19 pandemic."
Fourth Quarter Highlights:
* On Dec. 19, 2020, eligible residents and team members at
certain of the Company's communities and clinics started
receiving a COVID-19 vaccine. As of Feb. 20, 2021,
approximately 249 communities have held a vaccination clinic
for the initial dose of a COVID-19 vaccine, and approximately
183 communities have also held a vaccination clinic for
the second dose of a COVID-19 vaccine. As a result, as of
that
date 87.2% of its residents and 42.5% of its team members
have
received their initial dose of a COVID-19 vaccine and 52.7%
of
its residents and 26.9% of its team members have received the
second dose of a COVID-19 vaccine. The Company expects its
residents and team members will continue to get vaccinated
through the first quarter of 2021.
* At Dec. 31, 2020, 89% of the Company's senior living
communities were accepting new residents in at least one
service line of business (independent living, assisted
living,
skilled nursing or memory care), which has increased to 98% as
of Feb. 20, 2021. Combined senior living revenues and
management fees, including those for communities FVE leased
from Diversified Healthcare Trust prior to Jan. 1,
2020, and now manages on behalf of DHC, for the fourth quarter
of 2020 decreased to $32.7 million from $253.8 million for the
same period in 2019, primarily due to the conversion of the
formerly leased senior living communities to managed
communities as a result of the Restructuring Transactions, as
described in the Selected Pro Forma Condensed Consolidated
Financial Information and Other Data in the Supplemental
Information of this press release. Average occupancy during
the fourth quarter of 2020 declined 320 basis points at the
communities FVE owns and operates and 300 basis points at the
communities FVE manages on behalf of DHC compared to the
third
quarter of 2020. As of Dec. 31, 2020, occupancy at FVE's
owned
and leased communities was 69.7%, and was 70.8% at the
communities FVE manages on behalf of DHC. FVE continued to
experience declines in average monthly senior living revenue
per available unit (RevPAR) throughout the fourth quarter due
to the continued occupancy challenges resulting from the
impact
of the COVID-19 pandemic.
* Rehabilitation and wellness services revenues for the fourth
quarter of 2020 increased to $20.3 million from $14.0 million
for the same period in 2019, primarily due to the impact of
$4.6 million of inpatient rehabilitation clinic revenue at
communities FVE previously leased from DHC during the fourth
quarter of 2019, which was previously eliminated in
consolidation accounting prior to the Restructuring
Transactions, as well as the impact resulting from the opening
of 34 net new outpatient clinics since Oct. 1, 2019. As
compared to the fourth quarter of 2019 pro forma results,
revenues increased $1.7 million due to the impact of growth in
new clinics throughout the fourth quarter of 2019 and 2020.
* Net income for the fourth quarter of 2020 was $2.9 million, or
$0.09 per diluted share, compared to net income of $16.1
million, or $3.15 per diluted share for the fourth quarter of
2019, which included $14.9 million of one-time benefits
related
to the Restructuring Transactions. Net income decreased by
$2.9 million, or 50.3%, compared to the fourth quarter of 2019
pro forma net income of $5.8 million, or $0.18 per diluted
share. Net income for the fourth quarter of 2020 was
impacted
by $1.9 million of Provider Relief Funds received and
recognized under the Coronavirus Aid, Relief, and Economic
Security Act, or CARES Act, related to its independent and
assisted living communities and rehabilitation and wellness
clinics, which continued to experience a reduction of revenues
and increased expenses related to decreased occupancy and
other
impacts of the COVID-19 pandemic.
* Earnings before interest, taxes, depreciation and
amortization,
or EBITDA, for the fourth quarter of 2020 was $5.8 million
compared to $10.6 million for the fourth quarter of 2019 pro
forma results. Adjusted EBITDA was $5.2 million for the
fourth
quarter of 2020 compared to $10.3 million for the fourth
quarter of 2019 pro forma results.
* As of Dec. 31, 2020, FVE had unrestricted cash and cash
equivalents of $84.4 million. In addition, FVE had no amounts
outstanding on its $65.0 million revolving credit facility.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1159281/000115928121000019/fve-20201231.htm
About Five Star Senior
Headquartered in Newton, Massachusetts, Five Star Senior Living
Inc. -- http://www.fivestarseniorliving.com-- is a senior living
and rehabilitation and wellness services company. As of Dec. 31,
2020, FVE operated 252 senior living communities (29,271 living
units) located in 31 states, including 228 communities (26,969
living units) that it managed and 24 communities (2,302 living
units) that it owned or leased. FVE operates communities that
include independent living, assisted living, memory care,
continuing care retirement communities and skilled nursing
facilities. Additionally, FVE's rehabilitation and wellness
services segment includes Ageility Physical Therapy SolutionsTM, a
division of FVE, which provides rehabilitation and wellness
services within FVE communities as well as to external customers.
As of Dec. 31, 2020, Ageility operated 207 outpatient
rehabilitation clinics and 37 inpatient rehabilitation clinics in
28 states. FVE is headquartered in Newton, Massachusetts.
FORM TECHNOLOGIES: S&P Downgrades Issuer Credit Rating to 'SD'
--------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Form
Technologies LLC to 'SD' (selective default) from 'CC' and its
issue-level rating on its second-lien debt to 'D' from 'C'.
The downgrade follows Form Technologies completion of its
recapitalization. S&P said, "We view the transaction as tantamount
to a default on the second-lien term loan because the majority of
lenders received a 3% discount to par value, which we view as less
than the original promise. Per our criteria, we treat this as a
selective default even though the investors accepted the offer
voluntarily and no legal default occurred. While Form's first-lien
lenders agreed to extend the maturities of its facilities to 2025
as part of the transaction, we believe they will receive sufficient
offsetting compensation in the form of increased interest rates and
a commitment fee."
The restructuring included:
-- Extending the maturity of its RCF to April 2025;
-- Extending the maturity of its first-lien term loan to July
2025;
-- Repaying its existing second-lien term loan at a small discount
to par value;
-- Paying down a portion of its first-lien term loan;
-- A new $175 million second-out, first-lien term loan provided by
its existing lenders; and
-- An investment of $300 million of new preferred equity from a
combination of existing shareholders and third-party investors.
S&P intends to review its ratings on Form Technologies over the
next few days to incorporate its view of the restructuring and its
forward-looking assessment of its creditworthiness.
FORM TECHNOLOGIES: S&P Upgrades ICR to 'CCC+' on Restructuring
--------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Form
Technologies LLC to 'CCC+' from 'SD'.
S&P said, "We are assigning our 'CCC+' issue-level and '3' recovery
ratings to Form's $100 million revolving credit facility (RCF) and
$640 million first-out, first-lien term loan. Our '3' recovery
rating reflects our expectation for meaningful (50%-70%; rounded
estimate: 60%) recovery in the event of a default.
"At the same time, we are assigning our 'CCC-' issue-level and '6'
recovery ratings to its $175 million second-out, first-lien term
loan. Our '6' recovery rating reflects our expectation for
negligible (0%-10%; rounded estimate: 0%) recovery in the event of
a default.
"The stable outlook reflects our view of the company's improved
operating performance and adequate liquidity following the
recapitalization. It also reflects our view that S&P Global Ratings
adjusted leverage remains elevated and our expectation for modestly
positive free operating cash flow (FOCF).
"The upgrade reflects our view that liquidity has improved
materially as a result of the new capital structure, but leverage
remains high. Following the transaction, Form's new capital
structure consists of a $100 million RCF, $640 million first-out,
first-lien term loan, and $175 million second-out, first-lien term
loan. The capital structure will also include $275 million in
senior preferred equity with a 14.5% payment-in-kind (PIK) interest
(or 13.5% in cash), and $25 million of junior preferred equity from
existing and new investors. In our view, the new capital structure
provides more flexibility given the extended maturities.
Post-transaction, the company will have about $40 million in cash
and $61 million of availability under its RCF. The company is
undergoing a strategic review of the business in order to enhance
operational performance, leading to elevated capital expenditures
(capex) over the next couple of years. As a result, we expect
negligible FOCF generation in 2021 and that Form will generate
modestly higher positive FOCF going forward. Positively, we believe
the company has room to materially reduce its capex in a stress
scenario if needed.
"Despite the improved liquidity, debt leverage has not improved
significantly because we consider the preferred shares to be debt
under our criteria, primarily because it is callable within five
years. In our view, the semiconductor shortage that has hit
automotive original equipment manufacturers (OEMs) recently could
cause short-term headwinds. Nevertheless, we anticipate a
meaningful improvement in operating performance over the next 12-18
months. We believe S&P Global Ratings adjusted EBITDA margins will
be in the mid-teen-percentage area before improving in 2022. We
believe these factors will result in some deleveraging, but that
debt leverage will still be above 8x in 2021."
The company's overall interest expense has increased, but the PIK
feature of the preferred shares should allow the company to
conserve cash. The benefits from the reduction in senior secured
debt is partially offset by the increased interest rates.
Positively, the lower principal amount of the first-out and
second-out first-lien term loans will reduce the company's
mandatory amortization payments. Although it has the option of
paying in cash, S&P believes the company will elect to PIK the
interest on its preferred shares. This will conserve liquidity over
the short-term but will likely provide a modest headwind in terms
of Form's ability to reduce debt leverage.
Form Technologies maintains high exposure to cyclical end markets,
including automotive, electronics, and oil and gas. The company
faced a particularly challenging second quarter in 2020 when many
automotive OEMs shut down. Since then, the company's operating
performance improved significantly, and we believed there is
optimism for prospects in 2021. S&P said, "In our view, the company
could face challenges over automotive sales as semiconductor
shortages affect the industry. In addition to automotive (which
makes up 38% of the company's sales for the nine months ended Sept.
30, 2020), oil and gas (5%), and recreational vehicle (5%) sales
were also challenged. This was partially offset by strength in its
enterprise technology (12%) consumer electronics (10%), and
healthcare (10%) end markets. Positively, we anticipate a rebound
to the automotive end market, which we believe will bring top-line
sales in 2021 closer to pre-pandemic levels. However, we expect
there to still be a reduction in oil demand, and for continued
softness in the recreational vehicle end market. Currently, we
forecast low-double-digit-percent revenue growth in 2021 as certain
end markets rebound from softer demand stemming from the global
pandemic, followed by mid-single-digit-percent growth in 2022. We
acknowledge there is a degree of risk to the forecast, though,
given recent macroeconomic events."
S&P said, "The stable outlook reflects our view of the company's
improved operating performance and adequate liquidity following the
recapitalization. It also reflects our view that S&P Global Ratings
adjusted leverage remains elevated and our expectation for modestly
positive FOCF.
"We could raise our rating on Form Technologies if the company
sustains its recent improvement in operating performance, resulting
in debt leverage below 9x inclusive of the preferred shares. An
upgrade is also dependent on Form generating steady positive FOCF,
such that it supports a sustainable capital structure, in our view.
At the same time, a higher rating is contingent on our view that
the company won't pursue future restructuring or redemptions of
debt below par.
"We could lower our ratings on Form Technologies if its operating
performance deteriorates to the point where we believe a debt
restructuring which we consider a distressed exchange becomes
likely in the next 12 months."
FORTERRA INC: S&P Places 'B' Long-term ICR on Watch Positive
------------------------------------------------------------
S&P Global Ratings placed all of its ratings on Forterra Inc.
(FRTA), including its 'B' long-term issuer credit rating, on
CreditWatch with positive implications.
Quikrete Holdings Inc. has announced that it will acquire Forterra
Inc. (FRTA) at a price of $24 per share for its outstanding
shares.
S&P said, "The CreditWatch placement reflects our view that FRTA's
credit quality will likely benefit from its acquisition by
Quikrete, which we currently rate at a higher level than FRTA. Per
the agreement, Quikrete will acquire FRTA in an all-cash
transaction at a price of $24 per share. We will likely discontinue
our ratings on FRTA upon the completion of the transaction if all
of its debt is retired or if--under our criteria--we believe we
should rate the debt under Quikrete, in which case Quikrete would
have to become the guarantor of the debt."
FOSSIL EXHIBITS: Case Summary & 8 Unsecured Creditors
-----------------------------------------------------
Debtor: Fossil Exhibits International LLC
9300 Baythorne Dr
Houston, TX 77041
Business Description: Based in Houston, Texas, Fossil Exhibits
International LLC --
http://fossil-exhibits.com-- provides its
clients with trade show booths, permanent
installations, and event management
services.
Chapter 11 Petition Date: February 26, 2021
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 21-30714
Judge: Hon. Christopher M. Lopez
Debtor's Counsel: Ravi Patrick Ratnala, Esq.
THE RATNALA LAW FIRM, PLLC
PO Box 430973
Houston, TX 77243-0973
Tel: (713) 493-5274
E-mail: ratnala@ratnalalaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Cherie Quentin, president.
A copy of the petition containing, among other items, a list of the
Debtor's eight unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/2PHYEQI/Fossil_Exhibits_International__txsbke-21-30714__0001.0.pdf?mcid=tGE4TAMA
FR FLOW CONTROL: S&P Alters Outlook to Positive, Affirms 'B-' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on FR Flow Control Midco
Ltd. to positive from negative and affirmed its 'B-' issuer credit
rating.
The positive outlook reflects the potential for a higher rating
over the next year if FR Flow Control maintains S&P Global
Ratings-adjusted EBITDA margins above 8.5% and continues to
generate sufficient positive free cash flow.
The outlook revision follows FR Flow Control's strong fourth
quarter results, and reflects its resilient performance through the
COVID-19 pandemic and successful transition to a stand-alone
company. Net sales increased approximately 44% in the fourth
quarter to $170 million, bringing full year revenue to around $466
million in 2020. FR Flow Control was able to mitigate the impact of
temporary plant closures and experienced strong equipment sales of
its Gabbionetta-brand pumps. Cost-reduction actions, improved
manufacturing efficiency and capacity utilization, and better
contract management all contributed to earnings growth and
EBITDA-margin expansion during the year. Despite headwinds from
COVID-19 and declining oil prices, the company demonstrated
resilient performance and deleveraged faster than we projected when
the pandemic began. As of the fourth quarter, the company's S&P
Global Ratings-adjusted debt to EBITDA is expected to be slightly
above 5x. S&P now forecasts single-digit revenue growth, steady
EBITDA margins, and positive cash generation will result in S&P
Global Ratings-adjusted debt leverage improving below 5x in 2021,
absent large debt-funded acquisitions.
S&P said, "We believe FR Flow Control's liquidity has improved
significantly since the start of the pandemic. Solid free cash flow
and a focus on liquidity throughout the year resulted in a cash
balance of $59.6 million at year-end. FR Flow Control increased its
cash on hand roughly $30.2 million from the first quarter ended
March 31, 2020, more than doubling its cash position in the last
nine months of the year. For the full year, FR Flow Control
generated about $16.4 million GAAP-reported free operating cash
flow. The company used this cash generation, along with proceeds
from the sale-leaseback of its Ipswich facility and a small
unsecured loan obtained through the French State Guarantee, to
repay all revolver borrowings and bolster its liquidity position.
We believe the company's free operating cash flow will remain
positive over the next 12 months, irrespective of marginally higher
capital spending to support several strategic initiatives and a
modest working capital use of cash.
"We expect FR Flow Control will increase revenues in 2021 supported
by the strength of its backlog. Demand remained steady throughout
the COVID-19 pandemic, with original equipment and aftermarket
bookings down about 8% in 2020. FR Flow Control believes the
decline in orders was less than that of its competitors in the flow
control space, indicating possible market share gain. Similarly,
its order backlog at the end of the year was somewhat lower on a
comparable basis. Despite this decline, the company estimates its
year-end orderbook represents almost 60% of forecasted 2021
revenue, providing some visibility into revenue and profit margins
over the next 12 months."
The positive outlook reflects the potential for a higher rating
over the next year if FR Flow Control maintains S&P Global
Ratings-adjusted EBITDA margins above 8.5% and continues to
generate sufficient positive free cash flow. S&P's forecast assumes
that measured increases in revenue and profitability over the next
12 months will result in S&P Global Ratings-adjusted debt leverage
improving below 5x, absent large debt-funded acquisitions.
S&P could raise its rating on FR Flow Control if:
-- The company maintains S&P Global Ratings-adjusted EBITDA margin
above 8.5% and S&P Global Ratings-adjusted debt leverage remains
comfortably below 6x on a sustained basis; and
-- Generates sufficient free cash flow to cover its debt service,
capital spending requirements, and intrayear working capital needs
such that it is able to maintain ample liquidity.
S&P could revise its outlook on FR Flow Control to stable if:
-- Declining orders and increasing pricing pressure result in
lower sales and EBITDA degradation, causing S&P Global
Ratings-adjusted debt leverage to rise above 6x; or
-- The company pursues large, debt-funded acquisitions or a
sizeable dividend, causing S&P Global Ratings-adjusted debt
leverage to rise above 6x; or
-- A significant shortfall in free cash flow leads to a material
reduction in cash on hand and greater utilization of its revolving
credit facility, resulting in weaker liquidity.
FRANCHISE GROUP: S&P Assigns 'BB-' Rating on New First-Lien Loan
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '2'
recovery rating to Franchise Group Inc.'s proposed $1 billion
first-lien term loan due 2026. The '2' recovery rating indicates
our expectation for substantial recovery (70%-90%; rounded
estimate: 70%) in the event of a default.
At the same time, S&P assigned its 'B-' issue-level rating and '6'
recovery rating to the company's proposed $300 million second-lien
term loan. The '6' recovery rating indicates its expectation for
negligible recovery (0%-10%; rounded estimate: 0%).
Franchise Group announced on Feb. 22, 2021, that it has entered
into a definitive agreement to sell its Liberty Tax business. The
company expects to receive $243 million of proceeds from the sale,
of which roughly $180 million will be cash. Upon the receipt of the
divestment proceeds, the company intends to use the cash portion to
pay down the proposed first-lien term loan. Therefore, S&P's
analysis incorporates the $180 million paydown on its $1 billion
first-lien term loan in the first year.
S&P's 'B+' issuer credit rating on Franchise Group remains
unchanged. The stable outlook reflects its expectation for
improving EBITDA and free operating cash flow generation as the
company integrates it businesses and realizes cost synergies from
its recent acquisitions.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario contemplates a default
occurring in 2025 due to an economic downturn that reduces its
revenue and EBITDA.
-- S&P said, "Our simulated default scenario assumes Franchise
Group reorganizes as a going concern to maximize its lenders'
recoveries. We have utilized an enterprise valuation approach to
assess its recovery prospects and have applied a 5x multiple, which
is in line with the multiples we use for its peers, to our assumed
emergence-level EBITDA."
-- S&P also incorporates that a total of $90 million of borrowings
will be outstanding under the company's proposed $150 million
asset-based lending (ABL) facility, which reflects 60%
utilization.
-- S&P's assumptions also include the $180 million reduction of
the first-lien term loan in 2021.
Simulated default assumptions
-- Simulated year of default: 2025
-- EBITDA at emergence: $145 million
-- Implied enterprise value (EV) multiple: 5x
-- Estimated gross EV at emergence: $723 million
Simplified waterfall
-- Net EV after 5% administrative costs: $687 million
-- Valuation split (obligors/nonobligors/unpledged): 100%/0%/0%
-- Priority ABL claims: $93 million
-- First-lien term loan claims: $818 million
--Recovery expectations: 70%-90% (rounded estimate: 70%)
-- Second-lien term loan claims: $316 million
--Recovery expectations: 0%-10% (rounded estimate: 0%)
Note: All debts amounts include six months of prepetition
interest.
FRICTIONLESS WORLD: Banjo Says Plan Disclosures Inadequate
----------------------------------------------------------
Dan Banjo, sole member of the debtor Frictionless World, LLC,
objects to the adequacy of the First Amended Disclosure Statement
to the Chapter 11 Plan of Liquidation, Dated November 17, 2020, of
the Official Committee of Unsecured Creditors and the Arbitration
Creditors.
Banjo points out that the Disclosure Statement offers no discussion
regarding the rights of the defendants listed in the First Amended
Plan at Exhibit D and how the estate could be affected by the
indemnification and advancement of funds provisions of the Debtor's
operating agreement.
Banjo further points out that the indemnification provisions of the
Operating Agreement must be addressed in any proposed Chapter 11
Plan and Disclosure Statement. Since the amount of attorneys fees
and costs that may be incurred by Mr. Banjo or requested as an
advancement are currently unknown, and are not capped, any
distribution to general unsecured creditors under any proposed
Chapter 11 Plan cannot occur until such fees and costs are
determined and allowed or disallowed.
Counsel for Dan Banjo:
Jeffrey S. Brinen
Jenny M.F. Fujii
KUTNER BRINEN, P.C.
1660 Lincoln Street, Suite 1720
Denver, CO 80264
Telephone: (303) 832-2400
Telecopy: (303) 832-1510
Email: jmf@kutnerlaw.com
About Frictionless World
Frictionless World, LLC -- https://www.frictionlessworld.com/ --
provides professional grade outdoor power equipment, replacement
parts for tractors, hitches and agricultural implements, gate and
fence equipment, lithium ion powered tools, and ice fishing
equipment. It offers brands such as Dirty Hand Tools, RanchEx,
Redback, Trophy Strike and Vinsetta Tools.
Frictionless World sought Chapter 11 protection (Banks. D. Col.
Case No. 19-18459) on Sept. 30, 2019. The Hon. Michael E. Romero is
the case judge. In the petition signed by CEO Daniel Banjo, the
Debtor disclosed total assets of $14,600,503 and total liabilities
of $17,364,542.
The Debtor tapped Wadsworth Garber Warner Conrardy P.C. as
bankruptcy counsel; Thomas P. Howard, LLC as special counsel; r2
Advisors, LLC as financial advisor; and Three Twenty-One Capital
Partners, LLC as investment banker.
The Office of the U.S. Trustee appointed creditors to serve on the
official committee of unsecured creditors on Nov. 20, 2019. JW
Infinity Consulting LLC, is the financial advisor to the
Committee.
Tom Connolly was appointed as Chapter 11 trustee effective as of
October 1, 2020. The trustee is represented by Faegre Drinker
Biddle & Reath, LLP.
FRONTERA HOLDINGS: Has Final OK on $70MM Loan, Cash Collateral Use
------------------------------------------------------------------
Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern
District of Texas, Houston Division, allowed Frontera Holdings LLC
and its affiliated Debtors to obtain postpetition financing and use
cash collateral on a final basis.
The Debtors had sought, among other things:
(a) authorization for Frontera Generation Holdings LLC to
obtain priming, senior secured, superpriority debtor-in-possession
postpetition financing and authorizing certain of the other Debtors
identified in the DIP Credit Documents to unconditionally guarantee
on a joint and several basis, the Borrower's obligations under such
financing facility, which facility shall consist of a new money
term loan credit facility in the aggregate maximum principal
amount of $70 million, of which $30 million was made available on
an interim basis, to be funded by certain Prepetition Secured
Parties;
(b) authorization for the DIP Debtors to (i) enter into a
Senior Secured Super-Priority Debtor-In-Possession Credit Agreement
by and among the Borrower, the Guarantors, lenders from time to
time party thereto, and Cantor Fitzgerald Securities, as
administrative agent and collateral agent, and together with that
certain $70,000,000 Post-Petition Debtor-In-Possession Facility
Commitment Letter executed by certain of the Debtors and certain of
the Prepetition Secured Parties and any related documents and
instruments delivered pursuant to or in connection therewith, and
(ii) to perform their respective obligations thereunder and all
such other and further acts as may be necessary, appropriate, or
desirable in connection with the DIP Credit Documents;
(c) authorization for the DIP Debtors to grant (i) valid,
enforceable, nonavoidable and fully perfected security interests
and liens to the DIP Administrative Agent, for the benefit of the
DIP Secured Parties on all DIP Collateral to secure all obligations
of the DIP Debtors under and with respect to the DIP Facility,
including the DIP Term Loans made under the DIP Facility and all
interest accrued and accruing thereon and all other amounts owing
by the respective DIP Debtors in respect thereof, subject and
subordinate only to Permitted Liens and the Carve Out and (ii)
subject only to the Carve Out, super-priority claims to the DIP
Administrative Agent, for the benefit of the DIP Secured Parties,
having recourse to all prepetition and postpetition property of the
DIP Debtors' estates, now owned or hereafter acquired; and
(5) authorization for the DIP Debtors' use of cash collateral,
as such term is defined in section 363(a) of the Bankruptcy Code,
solely in accordance with the Approved Budget then in effect,
subject to compliance with the Permitted Variance, in each case
pursuant to the terms and conditions set forth in the Final Order
and the DIP Credit Agreement.
Prior to the Petition Date, pursuant to the Prepetition Credit
Agreement, the Prepetition First Lien Lenders extended credit to
the Prepetition First Lien Borrower in the form of a revolving
credit facility, made by certain Prepetition First Lien Lenders,
term loans, made by certain Prepetition First Lien Lenders, letter
of credit or cash management obligations owing to certain
Prepetition First Lien Lenders, and Secured Non-Commodity Hedge
Agreements that qualify as Obligations. Pursuant to the
Prepetition First Lien Guarantee and Security Agreement, the
Debtors party thereto, among other things, unconditionally and
irrevocably guaranteed on a joint and several basis the obligations
in respect of the Prepetition Credit Agreement.
As of the Petition Date, the Prepetition First Lien Obligors were
truly and justly indebted to the Prepetition Secured Parties
pursuant to the Prepetition Secured Debt Documents, without
defense, counterclaim, offset, claim, or cause of action of any
kind, in the aggregate amount of not less than (i) $757,746,240.64
of outstanding principal with respect to term loans under the
Prepetition Credit Agreement plus accrued and unpaid interest with
respect thereto, fees, costs, and expenses and all other
"Obligations" under the Prepetition Secured Debt Documents, (ii)
$15,000,000 in aggregate principal amount drawn and outstanding
under the Prepetition Revolving Credit Facility pursuant to the
Prepetition Credit Agreement plus accrued and unpaid interest with
respect thereto, fees, costs, and expenses under the Prepetition
Secured Debt Documents, (iii) $20,000,000 of outstanding principal
with respect to reimbursement obligations in respect of letters of
credit and cash management obligations arising under the
Prepetition Credit Agreement, including without limitation, the
draw of the DSR L/C on or immediately prior to the Effective Date,
plus accrued and unpaid interest with respect thereto, fees, costs
and expenses under the Prepetition Secured Debt Documents, and (iv)
$12,532,215.56 in aggregate Secured Non-Commodity Hedge Agreements
between Frontera Generation Holdings LLC and Morgan Stanley Capital
Services LLC arising in connection with that certain ISDA Master
Agreement dated as of May 4, 2018, inclusive of interest accrued
through and including February 3, 2021, plus legal fees incurred by
Morgan Stanley Capital Services LLC with respect thereto.
Judge Isgur found that the "The DIP Debtors have an immediate and
critical need to obtain the DIP Facility and to use Cash Collateral
in order to, among other things, (i) permit the orderly
continuation of the operation of the DIP Debtors' business, (ii)
maintain business relationships with customers, vendors, and
suppliers, (iii) make capital expenditures, (iv) satisfy other
working capital and operational needs, and (v) fund expenses of
these Chapter 11 Cases. In the absence of the DIP Facility and the
use of Cash Collateral, the DIP Debtors' business and estates would
suffer immediate and irreparable harm, including, without
limitation, a cessation of substantially all of their operations.
The access by the DIP Debtors to sufficient working capital and
liquidity through the use of Cash Collateral, the incurrence of new
indebtedness under the DIP Credit Documents, and the other
financial accommodations provided under the DIP Credit Documents is
necessary and vital to the preservation and maintenance of the
going concern values of the Debtors and to a successful
reorganization of the Debtors."
The DIP Debtors are authorized to enter into the DIP Credit
Documents, including the DIP Credit Agreement, and such additional
documents, instruments, and agreements as may be required or
reasonably requested by the DIP Secured Parties to implement the
terms or effectuate the purposes of the Court's Final Order.
Frontera Generation Holdings LLC as Borrower is authorized to
borrow from the DIP Lenders, and the Guarantors were authorized and
directed to guaranty, borrowings under the DIP Facility of up to an
aggregate principal amount of $70 million of the DIP Term Loans
under the DIP Facility.
Non-DIP Debtors are prohibited from using any Cash or Cash
Collateral on deposit or maintained in any account or accounts,
whether existing on the Petition Date or any date hereafter except
to pay, including, in each case, interest and fees related thereto
and in each case in accordance with the Approved Budget: (i)
obligations owed to any taxing authorities, (ii) obligations
mandated by law; (iii) obligations owed to DIP Debtors; (iv)
obligations as otherwise agreed to by the DIP Administrative Agent
and DIP Lenders; (v) obligations provided for in the Restructuring
Support Agreement (including the Exhibits attached thereto); (vi)
obligations authorized by order of the Court, or (vii) obligations
otherwise permitted by the DIP Credit Agreement. Claims of the DIP
Debtors against the Non-DIP Debtors for payments made on behalf of
the Non-DIP Debtors will be treated as administrative expense
claims in favor of the paying DIP Debtor.
The DIP Obligations will constitute superpriority administrative
expense claims against each of the DIP Debtors with priority in
payment over any and all administrative expenses, adequate
protection claims, diminution claims, prepetition unsecured claims,
and all other claims against the Debtors, now existing or hereafter
arising, of any kind whatsoever, including, without limitation, any
prepetition claims and adequate protection claims of the
Prepetition Secured Parties, any adequate protection claims granted
in favor of any other parties, and any and all administrative
expenses or other claims of the kinds specified or ordered pursuant
to any provision of the Bankruptcy Code, including, but not limited
to, Bankruptcy Code sections 105, 326, 328, 330, 331, 503(b),
506(c), 507(a), 507(b), 546, 726, 1113, and 1114 or otherwise,
including those resulting from the conversion of any of the Chapter
11 Cases pursuant to section 1112 of the Bankruptcy Code, whether
or not such expenses or claims may become secured by a judgment
lien or other non-consensual lien, levy, or attachment. The DIP
Super-Priority Claims will be subject to the Carve Out.
As adequate protection, the Prepetition First Lien Agent on behalf
of the Prepetition Secured Parties was granted, among others:
(1) Subject to the Carve Out, valid, binding, enforceable, and
perfected security interests in and liens upon all DIP Collateral
without the necessity of the execution of mortgages, security
agreements, pledge agreements, financing statements, or other
agreements. The Adequate Protection Liens granted to the
Prepetition First Lien Agent, for the benefit of itself and the
Prepetition Secured Parties, shall be senior liens, shall rank
immediately senior to the security interests and liens under the
Prepetition Secured Debt Documents, except the Adequate Protection
Liens shall be subject and subordinate to (i) the DIP Liens, (ii)
the Carve Out, and (iii) the Permitted Liens, if any.
(2) Allowed superpriority administrative expense claims
pursuant to sections 503(b) and 507(b) of the Bankruptcy Code,
which will be subject and subordinate to the DIP Super-Priority
Claims and subject to the Carve Out, and shall be allowed claims
against the applicable DIP Debtors with priority over any and all
administrative expenses and all other claims against such DIP
Debtors now existing or hereafter arising, of any kind whatsoever,
including, without limitation, all other administrative expenses of
the kind specified in sections 503(b) and 507(b) of the Bankruptcy
Code, and over any and all other administrative expenses or other
claims arising under any other provision of the Bankruptcy Code,
including, without limitation, sections 105, 326, 327, 328, 330,
331, 503(b), 507(a), 507(b), or 1114 of the Bankruptcy Code,
whether or not such expenses or claims may become secured by a
judgment lien or other nonconsensual lien, levy, or attachment.
(3) As further adequate protection, the DIP Debtors are
authorized and directed to pay, without further Court order, the
reasonable and documented fees and out-of-pocket expenses, whether
incurred before or after the Petition Date, of the Prepetition
First Lien Agent, Morgan Stanley Capital Services LLC, and the Ad
Hoc Group of Term Loan Lenders including, without limitation, the
reasonable and documented fees and out-of-pocket expenses of: (i)
Akin Gump Strauss Hauer & Feld LLP as counsel to the Ad Hoc Group
of Term Loan Lenders; (ii) Houlihan Lokey Capital, Inc., as
financial advisor to the Ad Hoc Group of Term Loan Lenders; (iii)
Nader, Hayaux & Goebel, S.C., as Mexican counsel to the Ad Hoc
Group of Term Loan Lenders; (iv) Competitive Power Ventures, Inc.,
as an industry consultant to the Ad Hoc Group of Term Loan Lenders;
(v) Sargent & Lundy, L.L.C., as an industry consultant to the Ad
Hoc Group of Term Loan Lenders; (vi) Wood Mackenzie, Inc., as an
industry consultant to the Ad Hoc Group of Term Loan Lenders; (vii)
any consultants or other professionals retained by the Ad Hoc Group
of Term Loan Lenders in connection with the Chapter 11 Cases with
the consent of the DIP Debtors (such consent not to be unreasonably
conditioned, withheld, or delayed); (viii) Simpson Thacher &
Bartlett LLP, as counsel to Morgan Stanley; (ix) one local counsel
retained by Morgan Stanley; and (x) Cadwalader, Wickersham and Taft
LLP, as counsel to Morgan Stanley Capital Services LLC.
The "Carve Out" means the sum of:
(1) all fees required to be paid to the Clerk of the Court and
to the Office of the United States Trustee under section 1930(a) of
title 28 of the United States Code plus interest, if any, at the
statutory rate pursuant to 31 U.S.C. Section 3717;
(2) all reasonable fees and expenses up to $100,000 incurred
by a trustee under section 726(b) of the Bankruptcy Code;
(3) to the extent allowed at any time, whether by interim
order, procedural order, or otherwise, all unpaid fees and expenses
incurred by persons or firms retained by the Debtors pursuant to
section 327, 328, or 363 of the Bankruptcy Code and the Creditors'
Committee pursuant to section 328 or 1103 of the Bankruptcy Code at
any time before or on the first business day following delivery by
the DIP Administrative Agent of a Carve Out Trigger Notice, whether
allowed by the Court prior to or after delivery of a Carve Out
Trigger Notice; and
(4) Allowed Professional Fees of Professional Persons in an
aggregate amount not to exceed $1.75 million incurred after the
first business day following delivery by the DIP Administrative
Agent of the Carve Out Trigger Notice, to the extent allowed at any
time, whether by interim order, procedural order, or otherwise.
The Debtors are directed to establish and fund a segregated account
for purposes of funding the Carve Out. The Funded Reserve Account
will be funded first from the proceeds of the DIP Facility and then
from all cash on hand as of such date and any available cash
thereafter held by any Debtor, including cash collateral.
The Approved Budget provided for a 13-week forecast, beginning with
the week ending February 4, 2021 through the week ending April 30,
2021. The Budget provided for total disbursements in the amount of
$35,823,000 for the entire 13-week period.
The Final Order, dated February 23, 2021, is available for free at
https://tinyurl.com/4eumcvun from Prime Clerk.
About Frontera Holdings
Frontera Holdings operates a 526-MW combined-cycle natural gas
plant near Mission, Texas, and exports power to Mexico.
On Feb. 3, 2021, Frontera Holdings LLC and five affiliated debtors
each filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. No. 21-30354) to
seek confirmation of a debt-for-equity plan that would reduce debt
by $800 million.
PJT Partners LP is serving as investment banker for the Company;
Kirkland & Ellis and Jackson Walker L.L.P. are serving as legal
counsel; and Alvarez & Marsal is serving as financial advisor.
Prime Clerk LLC is the claims agent.
The term loan lenders' advisors include Houlihan Lokey Inc. and
Akin Gump Strauss Hauer & Feld LLP.
The noteholders' advisors include Silver Foundry, LP and Morgan,
Lewis & Bockius LLP.
FRONTERA HOLDINGS: Winstead, Morgan Represent Noteholder Group
--------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Winstead PC and Morgan, Lewis & Bockius LLP
submitted a verified statement to disclose that they are
representing the Frontera Noteholder Group in the Chapter 11 cases
of Frontera Holdings LLC, et al.
The Frontera Noteholder Group has engaged Morgan, Lewis & Bockius
LLP to represent them in connection with the restructuring of the
Debtors. Subsequently, on or about February 4, 2021, the Frontera
Noteholder Group engaged Winstead PC to represent it as Texas
co-counsel in connection with the restructuring of the Debtors.
Morgan Lewis and Winstead represent the Frontera Noteholder Group
in connection with the Debtors' chapter 11 cases. As of the date of
this Verified Statement, Morgan Lewis and Winstead do not represent
or purport to represent any other entities in connection with the
Debtors' chapter 11 cases. Morgan Lewis and Winstead do not
represent the Frontera Noteholder Group as a "committee" and, as of
the date of this Verified Statement, do not undertake to represent
the interests of, and are not a fiduciary for, any creditor, party
in interest, or entity other than the Frontera Noteholder Group. In
addition, the Frontera Noteholder Group does not represent or
purport to represent any other entities in connection with the
Debtors' chapter 11 cases.
As of Feb. 24, 2021, each member of the Frontera Noteholder Group
and their disclosable economic interests are:
HoldCo Notes
------------
NONGHYUP Bank, as the trustee of $100,000,000
Hana Alternative US Power No. 2
13F, 120, Tongil-ro
Jung-gu Seoul
Republic of Korea
NONGHYUP Bank, as the trustee of $30,000,000
Hana Alternative US Power No. 3
13F, 120, Tongil-ro
Jung-gu Seoul
Republic of Korea
Pacific Life Insurance Company $30,000,000
700 Newport Center Drive
Newport Beach, CA 92660- 6397
Upon information and belief formed after due inquiry, Morgan Lewis
and Winstead do not hold any disclosable economic interests in
relation to the Debtors.
Counsel to the Frontera Noteholder Group can be reached at:
WINSTEAD PC
Sean B. Davis, Esq.
600 Travis Street, Suite 5200
Houston, TX 77002
Telephone: (713) 650-8400
Facsimile: (713) 650-2400
Email: sbdavis@winstead.com
MORGAN, LEWIS & BOCKIUS LLP
Julia Frost-Davies, Esq.
One Federal Street, 32nd Floor
Boston, MA 02110-1726
Telephone: (617) 341-7700
Facsimile: (617) 341-7701
Email: julia.frost-davies@morganlewis.com
- and –
David L. Lawton, Esq.
David K. Shim, Esq.
One State Street, 22nd Floor
Hartford, CT 06103-3178
Telephone: (860) 240-2700
Facsimile: (860) 240-2701
Email: david.lawton@morganlewis.com
david.shim@morganlewis.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3qYzatg
About Frontera Holdings
Frontera Holdings operates a 526-MW combined-cycle natural gas
plant near Mission, Texas, and exports power to Mexico.
On Feb. 3, 2021, Frontera Holdings LLC and five affiliated debtors
each filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. No. 21-30354) to
seek confirmation of a debt-for-equity plan that would reduce debt
by $800 million.
PJT Partners LP is serving as investment banker for the Company;
Kirkland & Ellis and Jackson Walker L.L.P. are serving as legal
counsel; and Alvarez & Marsal is serving as financial advisor.
Prime Clerk LLC is the claims agent.
The term loan lenders' advisors include Houlihan Lokey Inc. and
Akin Gump Strauss Hauer & Feld LLP.
The noteholders' advisors include Silver Foundry, LP and Morgan,
Lewis & Bockius LLP.
GABBIDON BUILDERS: $260K Private Sale of Waxhaw Property Approved
-----------------------------------------------------------------
Judge Laura T. Beyer of the U.S. Bankruptcy Court for the Western
District of North Carolina authorized Gabbidon Builders, LLC's
private sale of the real property located at 9714 Riva Ridge Lane,
in Waxhaw, Union County, North Carolina, to Sowmyan Madangopal and
Narmi Sowmyan for $260,000, pursuant to their Offer to Purchase and
Contract.
The sale is free and clear of all liens and interests with the
liens and interest, if any, to attach to the net proceeds of the
sale.
The real estate commission of SJ Iyer Realty is approved.
The sales proceeds from the sale of said Property will be forwarded
to the Subchapter V Trustee by the closing attorney or settlement
agent and the closing attorney or settlement agent will provide a
final settlement statement to the Subchapter V Trustee by
submitting a copy addressed to Caleb Brown, Moon Wright & Houston,
PLLC, 121 West Trade Street Suite 1950, Charlotte, NC 28202 within
three days of closing.
Any outstanding taxes to the Union County Tax Collector will be
paid in full at the closing.
The provisions of Bankruptcy Rule 6004(h) are not applicable to the
Order entered by the Court approving the Sale of the Property.
About Gabbidon Builders, LLC
Gabbidon Builders, LLC, a Charlotte, N.C.-based construction
company, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D.N.C. Case No. 20-30845) on September 19, 2020. The
petition was signed by Leonard Gabbidon, the company's owner.
At the time of the filing, Debtor had estimated assets of between
$100,001 and $500,000 and liabilities of the same range.
The Lewis Law Firm, P.A. is Debtor's legal counsel.
GG/MG INC: Sale of Two Forklifts to HGR for $18K Cash Approved
--------------------------------------------------------------
Judge Cathy A. Surratt-States of the U.S. Bankruptcy Court for the
Eastern District of Missouri authorized GG/MG, Inc.'s sale to HGR
Industrial Supples for $18,000, cash, of the following: (a) a JCB
550 forklift; and (b) a CAT T80DSTR forklift.
A hearing on the Motion was held on Feb. 22, 2021.
The sale is on an "as-is, where is" basis, free and clear of any
liens, claims or encumbrances. HGR will be responsible for all
costs to obtain and transport the Forklifts.
The Debtor is authorized and directed to retain the sum of $10,000
from the sale proceeds to pay administrative expenses for its
counsel and the allowed compensation of the Subchapter V Trustee,
and is further authorized and directed to pay the remaining sums to
Midwest Regional Bank.
The provisions of Rule 4001(a)(3) of the Federal Rules of
Bankruptcy Procedure are waived and the provisions of 11 U.S.C.
Section 362 are terminated to the extent necessary so that the
Debtor may immediately close on the transaction set out in the
Motion as approved.
Within three business days of entry of the Order, the Debtor will
serve a copy of the Order on all creditors and parties in interest,
and will file a Certification of Service within one business day of
service.
About GG/MG, Inc.
GG/MG, Inc. was formed in 2004 to continue the 30-year legacy of
the Gunter family and conducts its business under its doing
business as "Landfill Equipment Sales & Service" in a facility
located in Herculaneum, Missouri, just south of St. Louis. The
Debtor provides top level repair, restoration, and reconditioning
with respect to landfill compactors and related equipment used in
the landfill management industry, and also holds an inventory of
rebuilt and refurbished machines, parts, and wheels for said
equipment.
GG/MG, Inc. sought Chapter 11 protection (Bankr. E.D. Mo. Case No.
20-42506-659) on May 12, 2020.
GO DADDY: S&P Rates New $800MM Senior Unsecured Notes 'BB-'
-----------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level and '5' recovery
ratings to Arizona-based Go Daddy Operating Co. LLC's proposed $800
million senior unsecured notes due 2029. The '5' recovery rating
indicates its expectation for modest (10%-30%; rounded estimate:
10%) recovery for lenders in the event of a payment default. All
existing ratings, including S&P's 'BB' issuer credit rating on
GoDaddy, are unchanged.
S&P said, "We expect GoDaddy to assess merger and acquisition
opportunities and potentially use a portion of the proceeds from
the notes for funding over the near term. GoDaddy's most recent
acquisition--of a payment processing company Poynt--absorbed $329
million of cash. We estimate pro forma leverage will be unchanged
from 3.6x as of Dec. 31, 2020, because of our net leverage
calculation. GoDaddy ended 2020 with a cash balance of $765
million, and we continue to expect strong annual free cash flow
generation of $760 million-$770 million.
"GoDaddy holds a leading position in the domain registration and
web-hosting marketplace, with annual revenue of about $3.3 billion.
Adjusted leverage temporarily increased by more than a full turn
from 2.5x a year ago because of the debt-funded settlement of its
tax receivable agreement. We expect leverage will decline to the
low-3x area by year-end 2021 from consistent average revenue per
user growth of 5%-7% and net user adds coupled with relatively
stable EBITDA margins in the low-20% area.
"We could lower the rating if GoDaddy deviates from its stated
financial policies such that debt-financed acquisitions or
shareholder returns raise leverage above 4x. We could also lower
the rating if weaker industry dynamics lead to lower product demand
or if GoDaddy's operating performance deteriorates such that
leverage exceeds 4x."
Issue Ratings--Recovery Analysis
Key analytical factors
-- S&P's recovery rating on the company's senior secured
first-lien debt is '3', and its recovery rating on the senior
unsecured notes is '5'.
-- S&P's simulated default scenario contemplates a default
occurring in 2026 because of increased customer acquisition costs
and pricing pressures as new entrants emerge or existing
competitors increase their product offerings or marketing budgets
to gain market share. S&P's scenario also assumes operational
issues or service disruptions that cause the company's new customer
enrollment rates and existing customer renewal rates to decline.
Simulated default assumptions
-- Simulated default year: 2026
-- EBITDA at emergence: $341 million
-- EBITDA multiple: 6.5x
Simplified waterfall
-- Net emergence value (after 5% administrative costs): About
$2.11 billion
-- Valuation split (obligors/nonobligors): 64%/36%
-- Estimated first-lien claims: About $2.97 billion
-- Value available for senior secured claims: About $2.11 billion
--Recovery expectations: 50%-70% (rounded estimate: 65%)
-- Estimated senior unsecured claims: About $2.55 billion
(including pari passu secured claims)
-- Value available for senior unsecured claims: About $266
million
--Recovery expectations: 10%-30% (rounded estimate: 10%)
Note: All debt amounts include six months of prepetition interest.
GRASAN EQUIPMENT: March 2 Hearing on Bid Procedures for All Assets
------------------------------------------------------------------
Judge Russ Kendig of the U.S. Bankruptcy Court for the Northern
District of Ohio will convene hearing on March 2, 2021, at 10:00
a.m. (ET), to consider Grasan Equipment Co., Inc.'s bidding
procedures in connection with the sale substantially all assets to
Terex USA, LLC for $200,000, subject to overbid.
The Debtor will serve the Notice upon the Notice Parties
immediately upon entry of the Order. It will serve the Bidding
Procedures Motion, in the manner described in the Motion,
immediately upon entry of the Order.
The expedited First Day Hearing on the Bidding Procedures Motion
will be held telephonically pursuant to the Court's Memorandum
dated March 18, 2020, and available at:
https://www.ohnb.uscourts.gov/sites/default/files/memoranda/telephonic-hearing-procedure-31820.pdf.
Parties wishing to participate will dial in at least five minutes
prior to the scheduled time for hearing, counsel and parties should
call (888) 684-8852 and use Access Code 3303949 followed by the
pound sign, which is #.
A copy of the Bidding Procedures and the APA is available at
https://tinyurl.com/4c2gyvxr from PacerMonitor.com free of charge.
About Grasan Equipment Co., Inc.
Grasan Equipment Co., Inc. provides remediation and other waste
management services.
Grasan Equipment sought Chapter 11 protection (Bankr. N.D. Ohio
Case No. 21-60199) on Feb. 19, 2021. The case is assigned to Judge
Russ Kendig.
The Debtor's total assets are at $200,000 and $4,882,416 in total
debt.
The Debtor tapped Patrick W. Carothers, Esq., at Leech Tishman
Fuscaldo & Lampl, LLC as counsel.
The petition was signed by Marian Eilenfeld, authorized
representative.
GTM REAL ESTATE: To Seek Plan Confirmation on April 5
-----------------------------------------------------
Judge Jeffrey P. Norman has entered an order conditionally
approving the Disclosure Statement filed by GTM Real Estate
Partners, LLC, dated Feb. 19, 2021, and setting a hearing for April
5, 2021, to consider final approval of the disclosure statement and
for confirmation of the Debtor's Plan.
The hearing will be held at 9:30 a.m. at the United States
Courthouse, 515 Rusk St., Courtroom 403, Houston, Texas.
March 29, 2021, is fixed as the last day for filing written
acceptances or rejections of the plan.
Plan & Disclosure Statement
The Debtor's means for implementation of its Plan is derived from
its anticipated income from future operations until the sale of its
principal asset, the Yoakum Lot.
In a Chapter 7 liquidation, the Debtor believes that all of the
proceeds would go to its senior secured lender Prosperity Bank and
ad valorem entities and no other creditors would receive any
distribution.
Under the Plan, holders of General Unsecured Claims will be paid
pro-rata cash payments of $1,250 with payments commencing the first
day of the month following 60 months after the Effective Date for a
term of 60 months. In the event of any failure of the Reorganized
Debtor to timely make its required plan payments, which shall
constitute an event of default under the Plan as to these
Claimants, they shall send Notice of Default to the Reorganized
Debtor. If the default is not cured within 30 days of the date of
such notice, the Holders of Allowed Claims may proceed to collect
all amounts owed pursuant to state law without further recourse to
the Bankruptcy Court.
A copy of the Small Business Plan of Reorganization and Disclosure
Statement filed Feb. 19, 2021, is available at
https://bit.ly/3kpXf9Y
About GTM Real Estate Partners
GTM Real Estate Partners, LLC, is owned and operated by Tonya and
Glen Cronin, who have managed the affairs of GTM since its
inception. GTM operates a commercial building located at 9202
Windmill Park Lane, Houston, Texas ("Windmill Property") and leases
it to a single tenant that provides logistics and consulting
services to its tenant. GTM financed the purchase of the Windmill
Property with Prosperity Bank on June 6, 2014, and granted a
security interest in the Windmill Property and assignment of rents
in favor of Prosperity Bank.
GTM Real Estate Partners, LLC, filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas
Case No. 20-35095) on Oct. 22, 2020. Tonya Thomas Cronin,
authorized representative, signed the petition. In the petition,
the Debtor disclosed $10,824,015 in total assets and $9,052,430 in
total liabilities.
Judge Jeffrey P. Norman oversees the case.
The Debtor tapped Susan Tran Adams, Esq., at Tran Singh, LLP, as
legal counsel and Haynie & Company as accountant.
GTT COMMUNICATIONS: S&P Downgrades ICR to 'CCC-' on 8-K Filing
--------------------------------------------------------------
S&P Global Ratings lowered all of its ratings on U.S.-based
internet protocol network operator GTT Communications Inc. by one
notch, including its issuer credit rating, to 'CCC-' from 'CCC', to
reflect the increased likelihood of a default or distressed
exchange over the next six months.
The negative outlook reflects the potential that S&P could lower
its rating on GTT to 'CC' upon its announcement of a default or
distressed exchange.
S&P said, "The downgrade reflects our view that GTT could pursue a
distressed exchange or restructuring to address its very high debt
levels. We believe that even after the company completes the $2.15
billion sale of its infrastructure division to I Squared Capital,
its debt burden would still be elevated at about $1.8 billion. We
expect GTT to complete the asset sale in the second quarter of
2021."
The negative outlook reflects GTT's narrowing liquidity and high
debt balances, which could lead to a default over the next six
months, despite the pending asset sale.
S&P said, "We could lower the rating on GTT to 'CC' if we expect a
default to be a virtual certainty, which would likely occur if
management announces a distressed exchange.
"Although unlikely, we could raise our rating on GTT if the company
improves its liquidity position such that it no longer faces a
near-term cash default. This improvement would most likely occur
from additional asset sales. Furthermore, an upgrade would be
predicated on our expectation that GTT would not pursue a
distressed exchange, which we would view as tantamount to a
default."
HARRIS DAVIS WELCH: Florence County Property Sale to Crawford OK'd
------------------------------------------------------------------
Judge John E. Waites of the U.S. Bankruptcy Court for the District
of South Carolina authorized Harris Davis Welch's sale of interest
in parcel of real estate identified as Florence County, South
Carolina, TMS# 00028-03-037, set out in Exhibit A, to Leslie D.
Crawford.
The sale is free and clear of liens. The liens claimed by The
Citizens Bank will attach to the proceeds of sale.
No objection to the proposed sale has been received or filed by any
party with the Court.
A copy of the Exhibit A is available at
https://tinyurl.com/yn4f3jms from PacerMonitor.com free of charge.
Harris Davis Welch sought Chapter 11 protection (Bankr. D. S.C.
Case No. 20-00020) on Jan. 3, 2020. The Debtor tapped Reid Smith,
Esq., at Bird and Smith, PA.
HARRIS DAVIS WELCH: Sale of 1-Acre Clarendon County Property Okayed
-------------------------------------------------------------------
Judge John E. Waites of the U.S. Bankruptcy Court for the District
of South Carolina authorized Harris Davis Welch's sale of interest
in 1 acre off of Clarendon County, South Carolina, TMS#
324-00-08-001-00, set out in Exhibit A, to Beebe Benneh.
The sale is free and clear of liens. The liens claimed by The
Citizens will attach to the proceeds of sale.
No objection to the proposed sale has been received or filed by any
party with the Court.
A copy of the Exhibit A is available at
https://tinyurl.com/3yt89ff2 from PacerMonitor.com free of charge.
Harris Davis Welch sought Chapter 11 protection (Bankr. D. S.C.
Case No. 20-00020) on Jan. 3, 2020. The Debtor tapped Reid Smith,
Esq., at Bird and Smith, PA.
HARRIS DAVIS WELCH: Sale of 10-Acre Florence County Property Okayed
-------------------------------------------------------------------
Judge John E. Waites of the U.S. Bankruptcy Court for the District
of South Carolina authorized Harris Davis Welch's sale of interest
in 10 acres of real estate, being a portion of Florence County,
South Carolina, TMS 00028-03-002, set out in Exhibit A, to James
Edward Beard.
The sale is free and clear of liens. The liens claimed by The
Citizens Bank will attach to the proceeds of sale.
No objection to the proposed sale has been received or filed by any
party with the Court.
A copy of the Exhibit A is available at
https://tinyurl.com/878pz4f8 from PacerMonitor.com free of charge.
Harris Davis Welch sought Chapter 11 protection (Bankr. D. S.C.
Case No. 20-00020) on Jan. 3, 2020. The Debtor tapped Reid Smith,
Esq., at Bird and Smith, PA.
HARRIS DAVIS WELCH: Sale of 2-Acre Clarendon County Property Okayed
-------------------------------------------------------------------
Judge John E. Waites of the U.S. Bankruptcy Court for the District
of South Carolina authorized Harris Davis Welch's sale of interest
in 2 acres off of Clarendon County, South Carolina, TMS#
324-00-008-001-00, set out in Exhibit A, to Kayleigh Danielle
Hunter.
The sale is free and clear of liens. The liens claimed by The
Citizens Bank will attach to the proceeds of sale.
No objection to the proposed sale has been received or filed by any
party with the Court.
A copy of the Exhibit A is available at
https://tinyurl.com/bmd5d82b from PacerMonitor.com free of charge.
Harris Davis Welch sought Chapter 11 protection (Bankr. D. S.C.
Case No. 20-00020) on Jan. 3, 2020. The Debtor tapped Reid Smith,
Esq., at Bird and Smith, PA.
HARRIS DAVIS WELCH: Sale of 20-Acre Florence County Property Okayed
-------------------------------------------------------------------
Judge John E. Waites of the U.S. Bankruptcy Court for the District
of South Carolina authorized Harris Davis Welch's sale of interest
in 20 acres of real estate, being a portion of Florence County,
South Carolina, TMS 00028-03-002, set out in Exhibit A, to James
Gordon McCuthcheon.
The sale is free and clear of liens. The liens claimed by The
Citizens will attach to the proceeds of sale.
No objection to the proposed sale has been received or filed by any
party with the Court.
A copy of the Exhibit A, is available at
https://tinyurl.com/detck7us from PacerMonitor.com free of charge.
Harris Davis Welch sought Chapter 11 protection (Bankr. D. S.C.
Case No. 20-00020) on Jan. 3, 2020. The Debtor tapped Reid Smith,
Esq., at Bird and Smith, PA.
HARRIS DAVIS WELCH: Sale of Clarendon County Property to Welch OK'd
-------------------------------------------------------------------
Judge John E. Waites of the U.S. Bankruptcy Court for the District
of South Carolina authorized Harris Davis Welch's sale of interest
in parcel of real estate identified in Platt, Clarendon County,
South Carolina, TMS# 323-00-02-011-00, set out in Exhibit A, to
Carroll J. Welch.
The sale is free and clear of liens. The liens claimed by The
Citizens Bank will attach to the proceeds of sale.
No objection to the proposed sale has been received or filed by any
party with the Court.
A copy of the Exhibit A is available at
https://tinyurl.com/4a6wy46b from PacerMonitor.com free of charge.
Harris Davis Welch sought Chapter 11 protection (Bankr. D. S.C.
Case No. 20-00020) on Jan. 3, 2020. The Debtor tapped Reid Smith,
Esq., at Bird and Smith, PA.
HARSCO CORP: Moody's Gives Ba2 Rating on $500MM First Lien Loan
---------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to the new $500
million first lien senior secured term loan B-3 and a Ba2 rating to
the amended $700 million senior secured revolving credit facility
of Harsco Corporation. The company's other ratings, including the
Ba3 Corporate Family Rating, and negative outlook were unchanged.
Proceeds from the proposed term loan issuance will be used to
refinance the company's existing $280 million term loan A-1 and
$218 million term loan B-2. The transaction will be leverage
neutral while improving the company's debt maturity profile and
lowering its interest cost.
The amended senior secured revolving credit facility will have a
final maturity of March 2026, which is a twenty month extension to
the maturity of the existing revolver. The new senior secured term
loan B-3 will have a final maturity of March 2028, which is an
extension from June 2024 for the existing term loan A-1 and
December 2024 for the existing term loan B-2. The maturity
extension of the term loan is limited to May 1, 2027, however,
because of a springing maturity 91 days prior to the final maturity
of the existing senior unsecured notes due July 31, 2027 (rated
B1). This springing maturity is triggered if the unsecured notes
are not redeemed or refinanced by May 1, 2027, which is not
anticipated at this time.
The company is also seeking covenant relief by extending the step
down on the maximum net leverage ratio permitted under the credit
agreement of 5.75x to December 31, 2021 from the current step down
date of March 31, 2021, with quarterly step downs in 2022 and a
final step down to 4.00x thereafter. The ratings on the existing
senior secured term loans A-1 and B-2 (both rated Ba2) and senior
secured revolving credit facility (rated Ba2) will be withdrawn
upon closing of the transaction.
Assignments:
Issuer: Harsco Corporation
Senior Secured 1st Lien Term Loan B3, Assigned Ba2 (LGD2)
Senior Secured Revolving Credit Facility, Assigned Ba2 (LGD2)
RATINGS RATIONALE
Harsco's Ba3 CFR reflects some recovery within its key end markets
including rising capacity utilization and demand within the steel
industry following a slowdown in steel production in the first half
of 2020 due to COVID-19. Strong volume growth in several waste
categories including healthcare, retail and certain industrial
segments which were also impacted by lower volume growth due to
COVID also supports the rating. Harsco's rating also reflects its
long-standing customer relationships, which is reflected in its
sizeable order backlog and provides some revenue visibility for
services under contract. The rating is constrained by Moody's
expectation of declining, but still high leverage, with adjusted
debt to EBITDA projected to be maintained above 4x through the end
of 2022. The rating also incorporates cyclicality in the Harsco
Environmental segment, where sales are largely driven by steel
production volumes and can be impacted by prolonged slowdowns in
steel mill production or excess production capacity. Furthermore,
Moody's expects a protracted recovery in Harsco's Rail segment,
which is reliant on the capital expenditure budgets of its
customers and is currently being affected by reduced ridership.
The Ba2 rating on Harsco's proposed and existing senior secured
bank credit facility, one notch above the Ba3 Corporate Family
Rating, reflects the loss absorption provided by the unsecured debt
in Harsco's capital structure.
Moody's ratings also consider environmental risks including the
various laws and regulations relating to the protection of the
environment that Harsco is subject to. Many of these laws and
government standards require Harsco to incur significant compliance
costs and impose substantial monetary fines and/or criminal
sanctions for violations. These risks are partially offset by the
industry's high barriers to entry, including the high cost and
complexity of obtaining regulatory permits, required in-house
expertise on hazardous and radioactive waste laws and regulations
and high initial capital spending, which all help Harsco in solving
environmental problems.
The negative outlook reflects Harsco's limited cushion to absorb
any additional debt or earnings underperformance at the current
rating level, given its already weak credit metrics.
The speculative grade liquidity rating of SGL-3 reflects Moody's
expectation of adequate liquidity for Harsco over the next 12-18
months, which incorporates $84 million of cash at the end of Q3
2020, ample revolver availability, anticipated positive free cash
flow starting in 2022 and no near-term debt maturities.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade is unlikely given the negative outlook, however
longer term would reflect adjusted debt to EBITDA at or below 3.5x,
EBIT to interest expense at or above 2.5x and EBIT margin at or
above 7.5%, all on a sustained basis. An upgrade would also require
consistent positive free cash generation.
The ratings could be downgraded should the company fail to reduce
adjusted debt to EBITDA below 4.5x, improve EBIT to interest
expense above 2x or should the company's EBIT margin fall below 5%.
A ratings downgrade could also occur should the company experience
any deterioration in liquidity.
Following are some of the preliminary credit agreement terms, which
remain subject to market acceptance.
The proposed term loan agreement contains covenant flexibility for
transactions that could adversely affect creditors, including
incremental facility capacity subject to: (i) 2.25x senior secured
net leverage ratio; plus (ii) $175 million (note that this starter
amount will not be available during any covenant relief periods
where the company elects to receive relief from certain maintenance
covenants). The covenant relief period terminates on the earlier of
(a) achievement of a total net leverage ratio of no greater than
4.0x or (b) March 31, 2023. Collateral leakage is permitted through
the transfer of assets to unrestricted subsidiaries, subject to pro
forma financial covenant compliance, and regardless unrestricted
subsidiaries are prevented from owning or holding intellectual
property material to the business. Guaranteeing subsidiaries must
provide guarantees whether or not wholly-owned, reducing the risk
of future guarantee releases. There are no leverage-based
step-downs to the requirement that net asset sale proceeds prepay
the loans, helping preserve lenders' control over collateral
proceeds.
Harsco Corporation, headquartered in Camp Hill, PA, is a
diversified industrial service company focused on global markets
for outsourced services to metal industries, metal recovery &
mineral-based products, railway track maintenance. Inclusive of the
Environmental Solutions business (ESOL) pro forma revenues for the
12 months ended September 30, 2020 totaled approximately $2.0
billion.
The principal methodology used in these ratings was Environmental
Services and Waste Management Companies published in April 2018.
HARSCO CORP: S&P Assigns 'BB' Rating on New $500MM Term Loan B
--------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating and '2'
recovery rating to Harsco Corp.'s proposed $500 million senior
secured term loan B due March 2028. The '2' recovery rating
indicates its expectation of substantial (70%-90%; rounded
estimate: 75%) recovery in the event of a payment default. The
company will use proceeds from the transaction to repay the
outstanding amount on the existing senior secured term loan A due
June 2024 and senior secured term loan B due December 2024. The
company plans to also extend the maturity on its $700 million
revolving credit facility to March 2026 and delay the step down of
its net leverage covenant until the first quarter of 2022.
S&P said, "The transaction is neutral for leverage and does not
affect our 'BB-' issuer credit rating and negative outlook on
Harsco. The negative outlook reflects our expectation for elevated
leverage, following its acquisition of environmental solutions
business (ESOL) from Stericycle Inc. last year. We also believe
leverage could remain elevated over the next 12 months as a result
of macroeconomic headwinds associated with the pandemic. We could
lower the rating on Harsco if S&P Global Ratings' adjusted debt to
EBITDA remains above 5x.
"Our 'BB' issue-level rating on the revolving credit facility and
'B+' issue-level rating on the senior unsecured notes are also
unchanged. The '2' recovery rating on the company's revolving
credit facility indicates our expectation of substantial (70%-90%;
rounded estimate: 75%) recovery while the '5' recovery rating on
the senior unsecured notes indicates our expectation for modest
(10%-30%; rounded estimate: 15%) recovery in the event of a payment
default."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario assumes a payment default in
2025, reflecting a sustained economic downturn that weakens
Harsco's main end markets and reduces customer demand.
-- S&P said, "We believe if Harsco would default, that lenders
would achieve the greatest recovery value through reorganization
rather than through liquidation. We value the company on a
going-concern basis and apply a 5.5x multiple to our projected
emergence EBITDA."
-- The 5.5x multiple reflects the company's relative scale and
scope of operations within the capital goods sector.
Simulated default assumptions
-- Simulated year of default: 2025
-- EBITDA multiple: 5.5x
-- EBITDA at emergence: $187 million
-- Jurisdiction: U.S.
Simplified waterfall
-- Net enterprise value at default (after 5% administrative
costs): $976 million
-- Valuation split (obligors/nonobligors): 59%/41%
-- Value available to first-lien debt (collateral/noncollateral):
$836 million/$140 million
-- Secured first-lien debt claims: $1.110 billion
--Recovery expectations: 70%-90%; rounded estimate: 75%
-- Value available to unsecured debt (collateral/noncollateral):
$0/$140 million
-- Senior unsecured debt claims: $520 million
-- Pari passu deficiency claims: $275 million
-- Total unsecured claims: $795 million
--Recovery expectations: 10%-30%; rounded estimate: 15%
Note: Debt amounts include six months of accrued interest that S&P
assumes will be owed at default. Collateral value includes asset
pledges from obligors (after priority claims) plus equity pledges
in nonobligors. We generally assume usage of 85% for cash flow
revolvers at default.
HAYWARD INDUSTRIES: S&P Places 'B' ICR on CreditWatch Positive
--------------------------------------------------------------
S&P Global Ratings placed its ratings on Hayward, including its 'B'
issuer credit rating, on CreditWatch with positive implications.
S&P plans to resolve the CreditWatch when the IPO closes and it
knows how much of the proceeds will go to debt repayment, as well
as Hayward's future financial policy.
The CreditWatch placement follows Hayward's S-1 filing, which
indicates it could undertake an IPO on the NYSE in the coming
months. The company has not provided an estimate of expected
proceeds, but S&P believes a portion will be used to repay
borrowings under its credit facilities. The total amount
outstanding as of Dec. 31, 2020, was $1.3 billion. Significant debt
repayment could reduce leverage from estimated S&P Global
Ratings-adjusted high-6x at the end of calendar year 2020.
S&P said, "We expect Hayward's consortium of financial sponsors
will continue majority control and that it will operate as a
"controlled company" upon completion of the IPO. The contemplated
ownership percentage of the sponsors and management has yet to be
disclosed. However, given this structure, we believe the financial
sponsors would continue to dictate financial policy.
"We will seek to resolve the CreditWatch upon the pricing of the
IPO, when we can quantify the proceeds used for debt repayment and
assess the company's future financial policy. We could affirm our
ratings on Hayward or raise them (including the issuer credit
rating, likely up to one notch).
"We will also reassess our recovery ratings on the company's first-
and second-lien debt once debt reduction is confirmed. We could
raise our ratings if Hayward repays a material amount of debt and
continues strong operating performance such that we believe it will
sustain and publicly commit to leverage below 5x."
HILLENBRAND INC: S&P Alters Outlook to Stable, Affirms 'BB+' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed all its ratings, including its 'BB+' issuer credit rating
on the diversified industrial company Hillenbrand Inc.
S&P said, "At the same time, we are assigning our 'BB+' issue-level
and '3' recovery ratings (rounded estimate: 50%) to the company's
proposed $350 million senior unsecured notes due 2031. We believe
the company will use the net proceeds from the notes offering to
partially repay its unsecured term loan.
"The outlook revision reflects Hillenbrand's good operating results
during the pandemic and our expectation that revenue and earnings
will modestly improve next year. Pandemic-related growth in funeral
product volumes, coupled with cost-containment actions across all
segments, and positive working capital performance allowed the
company to generate solid free cash flow of about $300 million in
fiscal 2020 (ended Sept. 30). Hillenbrand ended fiscal 2020 with
S&P Global Ratings-adjusted debt leverage of 3.7x (excluding
one-time transaction expenses), and we expect it will further
decrease its adjusted debt to EBITDA in fiscal 2021 through
earnings growth and a reduction in net debt.
Revenue performance in Batesville is better than usual because of
the pandemic. The Batesville segment, which typically sees a modest
annual revenue decline in the demand for burial caskets due to the
ongoing shift toward cremation, has experienced a surge in volumes
over the past several quarters stemming from COVID-19
pandemic-related deaths. Concurrently, margins in this segment have
expanded on volume leverage. S&P expects Batesville revenue
performance will largely depend on vaccine timing and currently
forecast a year-over-year revenue increase in fiscal 2021 before
moderating in 2022.
The company's industrial businesses (Advanced Process Solutions, or
APS, and Molding Technology Solutions, or MTS) should improve over
the next 12 months, with some areas recovering quicker than others.
The hot runner business, which is shorter cycle, is ramping up
quickly after a two-year slowdown in industrial activity and trade
tensions, but larger polyolefin projects are still facing some
customer-driven delays and S&P expects will recover at a slower
pace.
S&P said, "Following the recent reduction in debt leverage, we
expect Hillenbrand will return to acquisition and modest share
repurchase activity. Hillenbrand is in the process of divesting two
small noncore businesses, and we expect the company will use the
proceeds to pay down debt. We believe Hillenbrand will seek bolt-on
acquisitions that will complement its industrial platform. We
expect share repurchase activity to resume, but at modest levels
primarily to offset dilution. We do not expect the company to
decrease its S&P Global Ratings-adjusted debt leverage to
meaningfully below 3x given its appetite for acquisitions."
Environmental, social, and governance credit factors for this
credit rating change:
-- Health and safety.
The stable outlook reflects S&P's expectation that continued
revenue growth and solid profitability will allow Hillenbrand to
maintain S&P Global Ratings-adjusted leverage below 4x over the
next 12 months.
S&P could raise its ratings on Hillenbrand if:
-- It successfully integrates Milacron and achieves expected
synergies, which can be evidenced by EBITDA margins maintained
above 18%; and
--S&P believes the company's financial policy supports maintaining
S&P Global Ratings-adjusted debt leverage below 3x. To that end,
S&P would expect the company to build sufficient cushion in its
leverage metrics to enable it to sustain leverage below 3x even
when incorporating acquisitions or any potential operating
weakness.
S&P could lower its rating on Hillenbrand if:
-- Its S&P Global Ratings-adjusted debt to EBITDA rises above 4x
due to a prolonged economic weakness or operating challenges; or
-- The company pursues acquisitions that increase S&P Global
Ratings-adjusted debt to EBITDA above 4x.
INNOVATIVE SOFTWARE: Wins Cash Collateral Access Thru March 10
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, has authorized Innovative Software
Solution, Inc. to use cash collateral on an interim basis through
March 10, 2021, and provide adequate protection payments.
The Debtor is authorized to use the cash collateral with a
provision for adequate protection payments to On Deck Capital in
the amount of $100 monthly, however there is no provision for
adequate protection payments to the U.S. Small Business
Administration.
Adequate protection payments will start March 1 and the Debtor will
have a five-day grace period in the event of any delinquent
payments.
Notwithstanding any provision of the Order to the contrary or
failure to include a specific line item in any Budget; any liens in
favor of the Banks including, without limitation, the Replacement
Liens, will be subject to carve-out for all fees due to the U.S.
Trustee and/or Clerk of Court; and the Debtor is authorized to pay
the U.S. Trustee fees without further order of the Court, pursuant
to 28 U.S.C. section 1930.
A final hearing as to the use of cash collateral will be held on
March 10 at 1:30 p.m.
A copy of the Order and the Debtor's budget is available at
https://bit.ly/3qUcx9m from PacerMonitor.com.
About Innovative Software Solution, Inc.
Innovative Software Solution, Inc. filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla.
Case No. 21-10538) on Jan. 20, 2021. Natalie Frazier, president,
signed the petition.
Judge Scott M. Grossman oversees the case.
Van Horn Law Group, PA, serves as the Debtor's legal counsel.
INTELSAT SA: Seeks Nov. 13 Plan Exclusivity Extension
-----------------------------------------------------
Debtors Intelsat S.A. and its affiliates ask the U.S. Bankruptcy
Court for the Eastern District of Virginia, Richmond Division, to
extend by nine months the Debtors' exclusive period to file a plan
of reorganization and to solicit votes to November 13, 2021, and
January 13, 2022, respectively.
An extension of the Exclusivity Periods will provide the Debtors
with additional time to continue their ongoing plan negotiation
process and ultimately implement a value-maximizing restructuring.
The Debtors have initiated this process and made substantial
progress to date: the Debtors have resolved several complex issues
with the Consenting Creditors, culminating in the Plan Support
Agreement pursuant to which the Consenting Creditors have committed
to support the restructuring transactions contemplated by the Plan,
and the Plan takes into account the view of the Debtors' other
creditor constituencies following ongoing, hard-fought discussions
with each.
The Debtors have continued to successfully manage their business,
both on an ordinary-course basis and through other transactions,
including:
(i) Gogo Commercial Aviation Transaction;
(ii) C-Band Clearing Transition Plan;
(iii) Horizons-4 Joint Venture;
(iv) Executory Contracts and Unexpired Leases;
(v) 2021 KEIP; and
(vi) SD Satellite Contract.
Since the Petition Date, the Debtors have paid their vendors and
third-party partners in the ordinary course of business, or as
otherwise provided by orders of the Court. Importantly the Debtors
maintain their ability to continue to pay their bills throughout
these chapter 11 cases in light of the liquidity provided by the
DIP Facility and through the continued use of cash collateral.
The Debtors believe the Plan reflects a fair resolution of the key
issues in these chapter 11 cases. The Debtors will continue to
engage with all stakeholders to gain additional support for the
Plan during the extended Exclusivity Periods sought by their filed
Motion. The extension of the Exclusivity Periods will allow the
Debtors to build upon their success so far in these cases and
prosecute the Plan with their supporting creditors, as well as
continue progressing the C-band clearing process without
distraction from unwarranted and unproductive competing plan
proposals. This is in the best interests of the Company and all of
the Debtors' stakeholders.
A copy of the Debtors' Motion to extend is available from
stretto.com at https://bit.ly/2NftOLL at no extra charge.
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 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,
CFO, and co-CRO. 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.
JAB OF ROCKLAND: Extends Plan Filing Deadline to May 4
------------------------------------------------------
Judge Robert D. Drain entered an order granting JAB of Rockland,
Inc., an extension until May 4, 2021, of its deadline to file a
Chapter 11 Plan and Disclosure Statement. The Debtor's deadline to
obtain confirmation of the Plan is also extended to and including
June 18, 2021.
About JAB of Rockland Inc.
JAB of Rockland, Inc., which conducts business under the name
David's Bagels, filed a Chapter 11 bankruptcy petition (Bankr.
S.D.N.Y. Case No. 19-23153) on June 11, 2019, disclosing under $1
million in both assets and liabilities.
Judge Robert D. Drain oversees the case.
The Debtor is represented by Elizabeth A. Haas, Esq., PLLC.
JASON'S HAULING: Wants Authority to Use Cash Collateral
-------------------------------------------------------
Jason's Hauling, Inc. asks the U.S. Bankruptcy Court for the Middle
District of Florida for authorization to use cash collateral.
The Debtor says the bulk of its secured debt is owed to equipment
lenders with security interests in tractors, trailers, and other
equipment. The Debtor says further that one lender, Commercial
Credit Group Inc., has filed UCC-1 financing statements asserting a
blanket lien on the Debtor's assets, which includes accounts and
inventory. The Debtor adds that it owes approximately $830,000 to
CCG and that CCG may assert an interest in cash collateral.
The Debtor tells the Court that it also owes the aggregate amount
of approximately $1,075,000 to certain merchant cash advance
funders: World Global Capital LLC d/b/a 1 West Financial, Pearl
Delta Funding, LLC, and Flash Funding Services Inc. These MCA
Lenders may also assert an interest in cash collateral.
The Debtor relates that in 2020, it applied for and received relief
funding through the SBA Disaster Loan program from the U.S. Small
Business Administration in the amount of $150,000. The Debtor
further relates that in conjunction with the SBA loan, the Debtor
executed loan documents in favor of the SBA pursuant to which it
was granted a blanket lien on the Debtor's assets. The Debtor says
the SBA may assert an interest in cash collateral.
The Debtor contends that it intends to use Cash Collateral for
payroll, insurance, purchase of necessary materials, payment of
utilities, payment of costs such as fleet fuel charges, payments to
independent contractors and subcontractors, other payments
necessary to sustain continued business operations, care,
maintenance, and preservation of the Debtor's assets, and costs of
administration in its Chapter 11 case.
In exchange for the Debtor's ability to use Cash Collateral in the
operation of its business, the Debtor proposes to grant to the
Lenders, as adequate protection, replacement liens to the same
extent, validity, and priority as existed on the Petition Date. In
other words, the Debtor proposes that the Lenders' "floating" liens
on such assets that would continue to "float" to the same extent,
validity, and priority as existed on the Petition Date,
notwithstanding Section 552 of the Bankruptcy Code. The Debtor
asserts that the interests of the Lenders will be adequately
protected by the replacement liens.
The Debtor believes that if it is allowed to use cash collateral,
it can stabilize its business operations and maintain going concern
value.
A full-text copy of the Debtor's Motion is available for free at
https://tinyurl.com/yxpcbvbr from PacerMonitor.com.
About Jason's Hauling
Jason's Hauling, Inc. sought protection under Chapter 11 of the
Bankruptcy Code on February 23, 2021 (Bankr. M.D. Fla. Case No.
21-00843). The petition was signed by H. Jason Freyre, Jr.,
president. At the time of the filing, the Debtor estimated its
assets and liabilities at $1 million to $10 million. The Debtor is
represented by Scott A. Stichter, Esq. at Stichter, Riedel, Blain &
Postler, P.A.
JTS TRUCKING: Has Until April 30 to File Plan & Disclosures
-----------------------------------------------------------
Judge James J. Robinson has entered an order within which the
deadline for debtor JTS Trucking, LLC to file the Plan and
Disclosure Statement is extended until April 30, 2021 and the time
to achieve confirmation is extended until August 31, 2021.
A full-text copy of the order dated Feb. 23, 2021, is available at
https://bit.ly/2O7PskY from PacerMonitor.com at no charge.
Attorney for the Debtor:
Harry P. Long
Post Office Box 1468
Anniston, Alabama 36202
Tel: (256) 237-3266
E-mail: hlonglega18@gmail.com
About JTS Trucking
JTS Trucking LLC, a trucking company based in Albertville, Alabama,
sought protection under Chapter 11 of the Bankruptcy Court (Bankr.
N.D. Ala. Case No. 20-40423) on March 6, 2020, listing under $1
million in both assets and liabilities. The petition was signed by
Susan M. Lowden, its member. The Debtor tapped Harry P. Long,
Esq., at the Law Offices of Harry P. Long, LLC as its counsel; Bill
Massey and MDA Professional Group, PC as its accountants; and Kevin
Lowery and RE/MAX The Real Estate Group as broker and property
manager for the Debtor's estate.
KNOTEL INC: Auction of Substantially All Assets Set for March 12
----------------------------------------------------------------
Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District
of Delaware authorized the bidding procedures proposed by Knotel,
Inc. and its affiliates in connection with the sale of
substantially all assets to Digiatech, LLC or its designee for $70
million, subject to overbid.
A hearing on the Motion was held on Feb. 18, 2021.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: March 12, 2021, at 10:00 a.m. (ET)
b. Initial Bid: The value of each Bid for all or substantially
all of the Debtors' Assets, as determined by the Debtors in their
business judgment, must exceed (a) the purchase price set forth in
the Stalking Horse Agreement, plus (b) the maximum amount of Bid
Protections payable to the Stalking Horse Bidder under the Stalking
Horse Agreement in the form of a Termination Fee in the amount of
$2.1 million (i.e., 3% of $70 million) and Expense Reimbursement of
up to $500,000, plus (0) the minimum Bid increment of $500,000 (or
such other amount as the Debtors may determine, which amount may be
less than $500,000, including with respect to a Bid for less than
all Assets). The Debtors and their advisors will determine, in
their reasonable business judgment, the value of any assumed
liabilities that differ from those included in the Stalking Horse
Bid.
c. Deposit: 7.5% of the aggregate value of the cash and
non-cash consideration of the Bid
d. Auction: If one or more Qualified Bids is received by the
Bid Deadline, the Debtors will conduct the Auction with respect to
the Debtors' Assets. The Auction will commence on March 12, 2021,
at 2:00 p.m. (ET) by video via Zoom or other similar conferencing
service, or such later time or other place as the Debtors will
timely notify all other Qualified Bidders.
e. Bid Increments: $500,000
f. Sale Hearing: March 18, 2021 at 2:00 p.m. (ET)
g. Sale Objection Deadline: March 16, 2021 at 12:00 p.m. (ET)
h. Expense Reimbursement: $500,000
i. Termination Fee: $2.1 million (i.e., 3% of $70 million)
Notwithstanding anything in the Order to the contrary, unless Cigna
and the Debtors agree otherwise, the Debtors shall, not later than
4:00 p.m. two business days prior to the Sale Hearing provide to
Cigna, through its counsel of record: (i) written notice of the
Debtor's irrevocable (subject to closing of the Sale) decision as
to whether it proposes to assume and assign the Cigna Agreements to
the Successful Bidder as part of the Sale, or reject the Cigna
Agreements as of the Closing Date; (ii) the identity of the
Successful Bidder; and (iii) adequate assurance information for the
Successful Bidder, including a good faith estimate as to the number
of employees of the Debtors who will become employees of the
Successful Bidder.
The Debtors are authorized to select Digiatech, together with any
designated affiliate thereof, as the Stalking Horse Bidder. The
Stalking Horse Agreement is authorized and approved.
The Bidding Procedures, including the Expense Reimbursement
contained therein, are approved in their entirety, and the Bidding
Procedures will govern the submission, receipt, and analysis of all
Bids relating to any proposed Sale. In the event of a competing
Qualified Bid, the Stalking Horse Bidder will be entitled, but not
obligated, to submit overbids and will be entitled in any such
overbids to credit bid all of its claims.
Any deposit provided by a Qualified Bidder will be held in a
segregated account by the Debtors or their agent in accordance with
the Bidding Procedures, and will not become property of the
Debtors' bankruptcy estates unless and until released to the
Debtors pursuant to the terms of the purchase agreement with such
Qualified Bidder or order of the Court.
The Sale Notice is approved. As soon as reasonably practicable
following the entry of the Order, the Debtors will cause the
Bidding Procedures, the Sale Notice, and the Assumption Notice to
be served upon the Notice Parites, and their respective counsel, if
known.
The Assumption Procedures are approved. On Feb. 22, 2021, the
Debtors will file with the Court and serve Assumption Notice. The
Debtors may amend or modify the Assumption Notice no later than
March 8, 2021 (10 days prior to the Sale Hearing). The Cure
Objection Deadline is March 12, 2021 at 5:00 p.m. (ET).
The Assumption Notice and the Notice of Successful Bidder are
approved. As soon as practicable after the Auction and in no event
less than 12 hours after the Auction, the Debtors will file with
the Court and serve on all Counterparties the Notice of Successful
Bidder.
The Committee agrees not to object to or challenge the prepetition
payment of $1 million to Newmark & Company Real Estate, Inc. for
real estate advisory services. Notwithstanding any provision of
the DIP Credit Agreement to the contrary, the Debtors are
authorized to use the approximate $6 million received from the
settlement of a litigation claim shortly before the Petition Date.
The Stalking Horse Agreement will be deemed amended to clarify that
section 2.01 will not include deposits in connection with rejected
executory contracts and unexpired leases as Purchased Assets.
Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions
of the Order are immediately effective and enforceable upon its
entry.
A copy of the Bid Procedures is available at
https://tinyurl.com/4l5uwokf from PacerMonitor.com free of charge.
About Knotel Inc.
Knotel -- http://www.Knotel.com/-- is a flexible workspace
platform that matches, tailors, and manages space for customers.
New York-based Knotel offers workspace properties such as desks,
open, and private spaces on rent for companies in 20 global
markets. In the U.S., Knotel primarily serves in the New York
City
and San Francisco areas.
Knotel, founded in 2015, raised hundreds of millions of dollars
from investors. It expanded rapidly for years and was one of the
more aggressive competitors in the co-working and flexible office
space sector, becoming one of WeWork's fiercest rival.
As the COVID-19 pandemic upended the co-working industry, Knotel,
Inc., and its U.S. subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Case No. 21-10146) on Jan. 30, 2021, to pursue a
sale of the assets to Newmark Group.
Knotel estimated $1 billion to $10 billion in assets and
liabilities as of the bankruptcy filing.
Morris, Nichols, Arsht & Tunnell LLP is serving as the Company's
counsel. Moelis & Company is the investment banker. Omni Agent
Solutions is the claims agent.
KOLOBOTOS PROPERTIES: Cash Collateral Access Has Final OK
---------------------------------------------------------
Judge Brenda T. Rhoades of the U.S. Bankruptcy Court for the
Eastern District of Texas, Sherman Division, allowed Kolobotos
Properties, LLC to use cash collateral on a final basis.
"An immediate and critical need exists for the Debtor to obtain
funds in order to continue the operation of its business. Without
such funds, the Debtor will not be able to pay its operating
expenses services needed to carry on its business during this
sensitive period in a manner that will avoid irreparable harm to
the Debtor's estate. At this time, the Debtor's ability to use
Cash Collateral is vital to the preservation and maintenance of the
going concern value of the Debtor's estate," Judge Rhoades held.
The Debtor's property at 4607 Garrison, Dallas, Texas, is subject
to the Prepetition Liens of Hal Collier, Trustee, including liens
on rents received. As of the Petition Date, the Debtor and Collier
were parties to a promissory note and deed of trust, dated October
1, 2015, pursuant to which Debtor granted Collier a security
interest in the Property, as well as in any rental receipts receive
with respect to the Property. As of the Petition Date, the Debtor
allegedly owes Collier a balance of $36,696.52. The receivables
and cash proceeds generated from the Property constitutes income,
proceeds, products, rents, and/or profits of the Property and
constitutes "cash collateral." Collier has a perfected lien and
security interest in the Cash Collateral.
Judge Rhoades permits the Debtor to enter into all agreements
pursuant to the terms of the Order necessary to allow the Debtor to
use Cash Collateral, subject to the protections and consideration
described in the Order in the amounts and for the expenses set
forth on the monthly budget.
Collier is granted valid, binding, enforceable, and perfected liens
co-extensive with their pre-petition liens in the Property. Liens
granted to Collier will have the same validity, extent and priority
as they existed prior to the filing of the bankruptcy case. As
adequate protection, the Debtor was directed to pay to Collier by
the 19th day of each month, commencing on January 19, 2021,
adequate protection payments in the total amount of $245. Collier
was also granted valid and perfected replacement security interests
in, and liens on the Property to the same extent, validity and
priority as existed.
The Debtor is ordered to:
(a) utilize Cash Collateral to pay only the Debtor's normal
and regular expenses of the operation of its business, pursuant to
the Budget;
(b) account for all of the Debtor's expenditures in monthly
operating reports in accordance with the Office of the U.S.
Trustee's guidelines, which the Debtor shall timely file with the
Bankruptcy Court; and
(c) maintain all insurance policies required to conduct its
business, naming Collier as loss payee and certificate holder on
all policies. The Debtor shall provide Collier with proof of all
such coverage upon request, as well as prompt notification of any
change in such coverage which may hereafter occur.
Judge Rhoades said that the occurence of the following events,
unless waived by Collier in writing, will consitute an event of
default:
(a) the failure by the Debtor to perform, in any material
respect, any of the terms, provisions, conditions, covenants, or
obligations under the Order or the Loan Agreement;
(b) dismissal of the chapter 11 case or conversion of the
chapter 11 case to a chapter 7 case, or appointment of a chapter 11
trustee or examiner, or other responsible person; and
(c) a material default by the Debtor in reporting financial or
operational information as and when required under the Loan
Agreement.
Judge Rhoades also said that "if there is an Event of Default set
forth herein, the automatic stay provided by 11 U.S.C. Section
362(a) shall immediately terminate without any further order of
this Court and Hal Collier, Trustee shall be entitled to pursue all
applicable non-bankruptcy and state law remedies against the
property securing Hal Collier, Trustee's Debt."
A full-text copy of the Final Order is available for free at
https://tinyurl.com/37bufnts from PacerMonitor.com.
Hal Collier, Trustee is represented by:
Robert M. Nicoud, Jr., Esq.
NICOUD LAW
10440 N. Central Expressway, Suite 800
Dallas, TX 75231
Telephone: 214-540-7542
Email: rmnicoud@dallaw-law.com
Dallas County is represented by:
Laurie A. Spindler, Esq.
LINEBARGER GOGGAN BLAIR & SAMPSON, LLP
2777 N. Stemmons Freeway, Suite 1000
Dallas, TX 75207
Telephone: 214-880-0089
Email: Laurie.Spindler@lgbs.com
About Kolobotos Properties
Kolobotos Properties LLC filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bank. E.D. Texas Case No.
20-42234) on Nov. 2, 2020. At the time of the filing, the Debtor
had estimated assets of between $500,001 and $1 million and
liabilities of between $100,001 and $500,000. Judge Brenda T.
Rhoades oversees the case. The Debtor is represented by Joyce W.
Lindauer Attorney, PLLC.
KOSMOS ENERGY: S&P Affirms 'B' ICR on Debt Issuance, Outlook Neg.
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
U.S-based oil and gas exploration and production company Kosmos
Energy Ltd. and 'B+' issue-level ratings. S&P assigned a 'B+'
issue-level rating and '2' recovery rating to the proposed notes
issue.
The negative outlook reflects S&P's view that the company's cash
flow metrics will remain weak over the next few years as it looks
to fund its Tortue liquefied natural gas (LNG) development project
offshore Mauritania and Senegal.
The new debt improves Kosmos Energy's near-term liquidity profile.
Of the $400 million in expected proceeds, the company will use $200
million toward its RBL facility, $100 million toward its corporate
revolver, and $100 million for general corporate purposes.
Moreover, the company recently secured terms for a sale and
leaseback of the Tortue FPSO which, combined with the NOC loan,
should provide funds for the company's Tortue project in 2021.
These measures should help alleviate some of the company's
near-term cash needs. Nevertheless, liquidity remains tight as
evidenced by the company's highly drawn RBL and its recent need to
obtain a waiver on its 2021 leverage covenant.
S&P said, "We expect discretionary cash flow to be negative over
the next two years, which is weak for the rating. Under our
current price deck, we expect Kosmos to meaningfully outspend free
cash flow as it works toward funding its interest in the Tortue LNG
project, despite the more modest development trajectory. Although
the company has secured financing for the majority of its 2021
capex needs, it will need to raise additional capital in 2022.
Future funding sources could come from equity issuance, additional
asset sales, or internally generated cash.
"We expect production to remain subdued over the next two years
before accelerating with the completion of the Tortue project in
2023. We expect total production to average 57,000 t0 60,000
boe/d (90% oil) in 2021 and 2022. We expect the company is on track
to complete phase 1 of its Tortue project, and bring on first gas
in the first half of 2023. As of year-end 2020, the project was 50%
complete with optimization of phase 2 and expansion underway. The
start-up of Tortue should help diversify the company's commodity
mix while lowering its carbon footprint by increasing its
production of natural gas.
"Our negative outlook on Kosmos Energy reflects our view that the
company's cash flow metrics will remain weak over the next few
years as it funds its portion of Tortue LNG project, leaving the
company's cash flow metrics and liquidity vulnerable to additional
commodity price volatility.
"We could lower the rating if credit measures weaken such that
funds from operations (FFO) to debt falls well below 20% for a
sustained period, or if liquidity deteriorates. This would most
likely occur if the company is unable to fund its remaining Tortue
project commitments, production underperforms our expectations, or
capital spending is significantly above our assumptions.
"An outlook revision to stable would be possible if the company's
credit measures improve such that we expect it to sustain FFO to
debt well above 20%. This would most likely occur if oil prices
average well above our price deck assumptions. Additionally, we
would need to see liquidity improve such that there was a clear
path to funding phase 1 of Tortue, along with a renewal of the
company's RBL to defer the high amortization schedule."
LAN DOCTORS: Wins Cash Collateral Access on Interim Basis
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey has
authorized LAN Doctors, Inc. to use cash collateral on an interim
basis in accordance with the budget, with a 20% variance.
The Debtor requires immediate authority to use cash collateral in
order to continue its business operations without interruption
toward the objective of formulating an effective plan of
reorganization.
As of the Petition Date, the Debtor is indebted to various
creditors who assert an interest in collateral, which constitutes
"cash collateral."
One of these creditors, Newtek Small Business Finance, LLC, has
made a prima facie showing that it holds properly perfected liens
on the Debtor's property at the commencement of the case, including
the Debtor's accounts receivables, cash, equipment, and other
collateral, which is or may result in cash collateral and that its
security interest has priority over the interests of other
creditors. Further, based upon the amounts owed to Newtek, it
appears that the claims of all other creditors will be unsecured by
virtue of section 506(a) of the Bankruptcy Code.
As adequate protection for the use of cash collateral, the Secured
Creditors are granted:
a. Replacement Lien. A replacement perfected security interest
under Section 361(2) of the Bankruptcy Code to the extent their
cash collateral is used by the Debtor, to the extent and with the
same priority in the Debtor's post-petition collateral, and
proceeds thereof, that the Secured Creditors held in the Debtor's
pre-petition collateral.
b. Periodic Payments. The Debtor will pay to Newtek $2,000 on
or before February 26, 2021, and $2,000 on or before March 9, 2021.
Thereafter the Debtor will pay $2,000 per month on the first day of
each month commencing with April, 2021, until further Court order.
c. Deemed Perfected. The replacement lien and security
interest granted is automatically deemed perfected upon entry of
the Order without the necessity of Secured Creditors taking
possession, filing financing statements, mortgages or other
documents.
d. Periodic Accounting. The Debtor will provide Secured
Creditors with copies of the Debtor's monthly United States Trustee
operating reports and such other financial information reasonably
requested by the Secured Creditors, including without limitation
regular reports in the same form and detail as the Debtor had
provided prior to the Petition Date.
A final hearing on the matter is scheduled for March 9 at 10 a.m.
A copy of the Order is available at https://bit.ly/3pN8hqV from
PacerMonitor.com.
About LAN Doctors, Inc.
LAN Doctors, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 21-10041) on January 5,
2021. In the petition filed by Dave Raman, vice president, the
Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Vincent F. Papalia oversees the case.
Timothy P. Neumann, Esq. at BROEGE, NEUMANN, FISCHER & SHAVER is
the Debtor's counsel.
LI GROUP: S&P Rates New $300MM First-Lien Term Loan 'B'
-------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level and '3' recovery
ratings to Watertown, Mass.-based LI Group Holdings Inc.'s (dba
Liaison's) new seven-year, $300 million first-lien term loan. The
higher education application and admissions software provider
intends to use the proceeds to refinance its existing $273 million
term loan, with incremental proceeds providing additional
liquidity. The '3' recovery rating reflects its expectation of
meaningful recovery (50-70%; rounded estimate: 50%) in a payment
default.
S&P said, "Our 'B' issuer credit rating reflects the company's
small operating scale and niche end-market focus, offset by a
growing and counter-cyclical operating landscape in higher
education application management software as well as Liaison's
strong market position in application management services.
Liaison's revenues grew by about 13% in the first half of fiscal
2021 on strong demand for its Centralized Applications Services
products. We expect revenues to expand organically in the
low-teens-percentage area in fiscal 2021, and contribution from
TargetX, acquired in September 2020, should further bolster growth.
Our stable outlook is based on our view that while the company's
debt-funded acquisition of TargetX will keep leverage elevated in
the near term, we expect the company to delever to below 7x over
the next 12 months through top-line expansion and stable EBITDA
margins."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's '3' recovery rating on the company's new $300 million
seven-year first-lien term loan due 2028 and existing $15 million
five-year revolving credit facility due in December 2024 are
unchanged.
-- The '3' recovery rating reflects S&P's expectation that in a
hypothetical default scenario, first-lien lenders would receive
meaningful (50%-70%; rounded estimate: 50%) recovery in the event
of payment default.
-- S&P's simulated default scenario analysis contemplates a
default in 2024 stemming from a significant decline in revenue from
increasing competition. Severe attrition in its client base and
failure to expand into adjacent markets could result in the
inability to cover its debt and interest expense.
-- In S&P's analysis, it values the company as a going concern,
which would maximize value to creditors.
-- S&P applies a 6.5x EBITDA multiple to an assumed distressed
emergence EBITDA to derive an estimated gross recovery value of
about $173 million. The valuation multiple is consistent with that
of similar software companies and rated peers in the industry.
Simulated default assumptions
-- Simulated year of default: 2024
-- EBITDA multiple: 6.5x
Simplified waterfall
-- Gross recovery value: $173 million
-- Net enterprise value (after 5% administrative costs): $165
million
-- Valuation split in % (obligors/nonobligors): 100/0
-- Value available to first-lien debt claims: $165 million
-- Secured first-lien debt claims: $316 million
--Recovery expectations: 50%-70% (rounded estimate: 50%)
LITTLE JOHN'S: Seeks Structured Dismissal, Plan Extension
---------------------------------------------------------
Little John's Antique Arms, Inc., has reached a stipulation with
the U.S. Trustee to extend its deadline to file a plan pending
adjudication of the Debtor's motion for structured dismissal of the
case.
The Debtor filed a Chapter 11 bankruptcy case to: (1) preserve
equity in the real property located at 31602 Crystal Sands Drive,
Laguna Niguel, CA; (2) facilitate the sale of the Property; (3)
facilitate post-petition auctions; and (4) either pay all creditors
in full or provide a substantial pro rata distribution to
creditors.
Prepetition, the Debtor scheduled an auction to occur on March
29-30, 2020. Due to the current COVID-19 crisis, the Debtor was
required to postpone the Auction to May 17-19, 2020. The May
Auction went forward as scheduled and resulted in a substantial
benefit to the Estate. The Debtor has since conducted two
additional post-petition auctions, with all three auctions
resulting in an influx of hundreds of thousands of dollars to the
Estate.
On June 5, 2020, the Court set the claims bar date for Aug. 7,
2020, a continued status conference for Sept. 17, 2020, a deadline
for the filing of a status report in advance of that hearing of
September 3, 2020; and a deadline for Debtor to file a Chapter 11
plan of reorganization and disclosure statement of Aug. 28, 2020.
On July 30, 2020, the Debtor filed a motion for order authorizing
the sale of the Property: (1) outside the ordinary course of
business; (2) free and clear of liens; (3) subject to overbid; and
(4) determining good faith of purchaser under Sec. 363(m). On Aug.
26, 2020, the Court entered an order granting the Sale Motion. The
sale netted the Estate approximately $445,000 after payment of
liens, commissions, and other costs of sale.
On July 31, 2020, the Debtor and the Office of the United States
Trustee entered into a stipulation to extend time for Debtor to
file a Chapter 11 Plan of Reorganization and Disclosure Statement.
On July 31, 2020, the Court entered an order approving the
Stipulation and extending the time to file a Disclosure Statement
and Plan to Nov. 27, 2020.
On Oct. 29, 2020, the Debtor, the Office of the United States
Trustee, and Mary Susan Gangel entered into a second stipulation to
extend time for Debtor to file a Chapter 11 Plan of Reorganization
and Disclosure Statement. On Oct. 30, 2020, the Court entered an
order approving the Second Stipulation and extending the time to
file a Disclosure Statement and Plan to Feb. 27, 2021.
With the sale of the Property completed and the proceeds from all
post-petition auctions nearly fully collected, this Estate has
sufficient cash proceeds to pay unsubordinated general unsecured
creditors in full1 and allow Debtor to move toward closure of this
case.
On Feb. 22, 2021, the Debtor filed a motion to dismiss this
bankruptcy case and for authority to disburse funds to unsecured
creditors. The Dismissal Motion proposes to pay all unsubordinated
general unsecured creditors in full and is set for hearing on April
1, 2021.
The deadline for Debtor to file a plan and disclosure statement
under 11 U.S.C. Sec. 1121(e)(2) was January 18, 2021.
The Parties have agreed that, given that Debtor seeks a structured
dismissal of this bankruptcy case, and that the Dismissal Motion
will be heard shortly, that Debtor's deadline to file any plan of
reorganization and disclosure statement should be continued
approximately 90 days to allow the Dismissal Motion to be
adjudicated and for final disbursements to unsecured and
administrative creditors to be made.
About Little John's Antique Arms
Little John's Antique Arms, Inc. --
http://littlejohnsauctionservice.net/-- is a family owned antique
and modern arms auction company. Little John's Antique Arms, Inc.,
based in Orange, CA, filed a Chapter 11 petition (Bankr. C.D. Cal.
Case No. 20-11026) on March 24, 2020. In the petition signed by
John Gangel, president, the Debtor was estimated to have $500,000
to $1 million in assets and $1 million to $10 million in
liabilities. The Hon. Erithe A. Smith oversees the case. Richard
A. Marshack, Esq., at Marshack Hays LLP, serves as bankruptcy
counsel to the Debtor.
LRJ GLOBAL: Unsec. Creditors to Recover 5% in Amended Plan
----------------------------------------------------------
LRJ Global Quality Concrete, Inc., filed a Chapter 11 Small
Business Plan and a Disclosure Statement on Feb. 26, 2021.
General unsecured creditors are classified in Class 3, and will
receive a distribution of 5% of their allowed claims, to be
distributed as per terms of plan.
The corporation owns Light Industrial real property that is located
at Almacigo Bajo Ward, State Road 371, Km L8, Yauco, Puerto Rico,
lot of 3,930.39 sq/mts with a steel commercial building. The
property is encumbered by a commercial loan with creditor, PR
RECOVERY AND DEVELOPMENT JV, LLC (PR RECOVERY JV), formally loan of
"Banco De Desarollo Economico de Puerto Rico", in the amount of
$624,737. The property value is below the debt amount owed, with a
value of $300,000. After the filing of the Disclosure statement
the property was appraised at $200,000.
As to the Class 1 claim of PR Recovery JV in the amount of
$624,737, the Debtor and creditor have agreed on these terms and
conditions for repayment of claim 3-1:
-- With the property appraised at $200,000, the Debtor will
make an upfront payment of $20,000 and 30 days thereafter, will
commence an adequate protection payment of $2,388.70 for a period
of 36 months.
-- At the end of the 36th month, the Debtor will make a final
balloon payment of$ 100,000 plus interest at 4.75%for a total
payment of $213,485.
-- The remainder of the claim will be paid in the pro-rata
unsecured class 3 distribution.
With respect to unsecured claims in Class 3, the class will receive
a dividend of 5% of the allowed claims. CRIM's $1,606 claim will
receive a total payment $80.30 in one single payment in June 2021.
PR Recovery's $297,656 claim will be paid $1,488 in the form of
$300 monthly.
A copy of the Disclosure Statement dated Feb. 26, 2021, is
available at https://bit.ly/3dTgVln
About LRJ Global Quality
LRJ Global Quality Concrete, Inc., owns the 3,930.39-sq/mts Light
Industrial real property located at Almacigo Bajo Ward, State Road
371, Km L8, Yauco, Puerto Rico, with a steel commercial building.
LRJ Global Quality Concrete, Inc., filed a Chapter 11 bankruptcy
petition (Bankr. D.P.R. Case No. 19-06780) on Nov. 19, 2019,
disclosing under $1 million in both assets and liabilities. The
Debtor is represented by Nydia Gonzalez, Esq., at the Law Office of
Santiago & Gonzalez Law, LLC.
LSB INDUSTRIES: Incurs $61.9 Million Net Loss in 2020
-----------------------------------------------------
LSB Industries, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$61.91 million on $351.32 million of net sales for the year ended
Dec. 31, 2020, compared to a net loss of $63.42 million on $365.07
million of net sales for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $1.05 billion in total assets,
$107.29 million in total current liabilities, $467.39 million in
long-term debt, $19.84 million in noncurrent operating lease
liabilities, $6.09 million in other noncurrent accrued and other
liabilities, $30.94 million in deferred income taxes, $272.10
million in redeemable preferred stocks, and $149.64 million in
total stockholders' equity.
Fourth Quarter and Full Year 2020 Highlights
* Record total recordable injury rate (TRIR) of 1.06 for 2020,
an
improvement of 58% compared to 2019
* Net sales of $88.9 million reflects a 31% increase from
stronger sales volumes, partially offset by a 11% decrease
from
weaker pricing relative to the prior year fourth quarter
* Adjusted EBITDA of $10.4 million reflects a $16.3 million
benefit from stronger production and sales volumes, partially
offset by a $9.6 million net impact from weaker pricing and
$2.2 million from COVID-19's impact on demand, relative to the
prior year fourth quarter
* Full year production volume records for ammonia of 827,000
tons
and for UAN of 501,000 tons
* 64% increase in fertilizer sales volumes, including a 105%
increase in UAN sales volumes, versus the fourth quarter of
2019
* Total liquidity of approximately $58 million as of December
31,
2020
"We delivered fourth quarter 2020 results largely in-line with our
expectations headed into the period," stated Mark Behrman, LSB
Industries' president and chief executive officer. "Our
substantial year-over-year increase in production volume more than
offset the continued pricing headwinds on fertilizer sales and the
pandemic-related impact on industrial and mining demand that we
experienced during the quarter. Despite the challenges we faced
across our end markets, we still generated a 44% year-over-year
increase in adjusted EBITDA for the period."
"The fourth quarter capped off our best year of operating
performance across our three facilities in our company's history.
We delivered record production volumes for ammonia and UAN for full
year 2020, reflecting a return on the investments we've made in
plant reliability and product upgrading capabilities over the last
several years as well as our focus on continuous improvement in our
manufacturing operations. We also benefitted from the absence of
any turnaround activity in 2020 as compared to 2019. Overall, we
were pleased with the performance of our plants in 2020 and believe
that we will generate further improvement in operating rates and
production volumes in 2021."
Mr. Behrman continued, "Favorable dynamics for U.S. agriculture
have translated into higher prices for a variety of crops,
including corn, wheat and cotton, which has prompted an increase in
demand and selling prices for fertilizers. In fact, since
mid-January we have seen a significant increase in selling prices
for all the nitrogen fertilizers we sell. We expect that the
benefit of these higher selling prices will have some impact on our
first quarter financial results and be fully reflected in our
second quarter. Regarding our industrial business, we have seen a
steady rebound in demand since the lows experienced in the early
part of the pandemic. However, many sectors are not yet operating
at pre-pandemic levels and while we don't expect that to
significantly impact our industrial sales volumes due to our strong
sales efforts, it is still putting selling price pressure on
certain of our products. We are hopeful that as COVID-19 vaccines
are increasingly distributed, overall demand in the marketplace
will get back to pre-pandemic levels putting less pressure on
selling prices on certain products."
Mr. Behrman concluded, "Regarding our outlook for 2021, we expect
to deliver year-over-year improvement in production and sales
volumes which we believe will translate into improved adjusted
EBITDA and cash flow for the year. We believe that with the
strengthening of fertilizer market dynamics, our anticipated
improvement in our financial performance and the current favorable
credit market environment, we will have an opportunity to refinance
our existing debt at more favorable terms, which would provide us
with greater financial flexibility to pursue growth initiatives."
"Lastly, consistent with the global focus on reducing carbon
emissions, we are currently working on developing a strategy to
enter the clean energy market through the production of "green
ammonia." We view this as a growth platform for our business and
believe that current ammonia producers are best positioned to be
leaders in this market as it develops, due to our ability to
leverage our existing knowledge in ammonia manufacturing, handling,
storage and logistics. We are very excited about the opportunities
ahead of us in 2021 and look forward to providing updates on key
initiatives and developments as we move through the year."
Financial Position and Capital Expenditures
As of Dec. 31, 2020, the Company's total cash position was $16.3
million. Additionally, the Company had approximately $41.8 million
of borrowing availability under its Working Capital Revolver giving
the Company total liquidity of approximately $58.0 million. Total
long-term debt, including the current portion, was $484.2 million
at Dec. 31, 2020 compared to $459.0 million at Dec. 31, 2019. The
increase in long-term debt primarily reflects the refinance of
ammonia storage assets completed during the third quarter. The
aggregate liquidation value of the Series E Redeemable Preferred at
Dec. 31, 2020, inclusive of accrued dividends of $138.2 million,
was $278.0 million.
Interest expense for the fourth quarter of 2020 was $12.6 million
compared to $12.1 million for the same period in 2019.
Capital expenditures were approximately $8.2 million in the fourth
quarter of 2020. For the full year of 2021, total capital
expenditures related to capital work to be performed in 2021 are
expected to be approximately $30 million, inclusive of investments
for margin enhancement purposes.
https://www.sec.gov/ix?doc=/Archives/edgar/data/60714/000156459021008804/lxu-10k_20201231.htm
LSB Industries
Headquartered in Oklahoma City, Oklahoma, LSB Industries, Inc. --
http://www.lsbindustries.com-- manufactures and sells chemical
products for the agricultural, mining, and industrial markets. The
Company owns and operates facilities in Cherokee, Alabama, El
Dorado, Arkansas and Pryor, Oklahoma, and operates a facility for a
global chemical company in Baytown, Texas. LSB's products are sold
through distributors and directly to end customers throughout the
United States.
* * *
As reported by the TCR on Aug. 5, 2020, S&P Global Ratings lowered
its issuer credit rating on LSB Industries to 'CCC' from 'CCC+'.
"The negative outlook reflects our view that LSB will continue to
be affected by lower agriculture selling prices and the impact of
COVID-19 on its industrial end markets. As a result of weaker
EBITDA for 2020 and 2021, we continue to view its leverage as
unsustainable. We expect leverage to remain high, with debt to
EBITDA well into the double-digits over the next 12 months," S&P
said.
In November 2016, Moody's Investors Service downgraded LSB's
corporate family rating (CFR) to 'Caa1' from 'B3', its probability
of default rating to 'Caa1-PD' from 'B3-PD', and the $375 million
guaranteed senior secured notes to 'Caa1' from 'B3'. LSB's 'Caa1'
CFR rating reflects Moody's expectations that the combined
uncertainty over operational reliability and the compressed
margins, resulting from the low nitrogen fertilizer pricing
environment, could result in continued weak financial metrics for a
protracted period.
MALLINCKRODT PLC: Ciardi et al. Update List of Acthar Claimants
---------------------------------------------------------------
In the Chapter 11 cases of Mallickrodt PLC, et al., the law firms
of Ciardi Ciardi & Astin, Haviland Hughes, The Beasley Firm, LLC,
Bartimus, Frickleton, Robertson, Radar PC and Meyers & Flowers, LLC
submitted an amended verified statement under Rule 2019 of the
Federal Rules of Bankruptcy Procedure, to disclose an updated list
of Acthar Group Claimants that they are representing.
As of Feb. 24, 2021, the Acthar Group Claimants and their
disclosable economic interests are:
City of Rockford, Illinois
Illinois
City of Rockford, Illinois as Class Representative
of the Direct Purchaser Class of Acthar Purchasers
Illinois
Steamfitters Local Union No. 420
Pennsylvania
Steamfitters Local Union No. 420
as Representative of Class of Acthar Purhasers
Pennsylvania
International Union of Operating Engineers Local 542
Pennsylvania
United Association Local Union No. 322
of Southern New Jersey
New Jersey
United Association Local Union No. 322 of
Southern New Jersey as Class Representative
of New Jersey Class
New Jersey
Acument Global Technologies, Inc.
Tennessee
Acument Global Technologies, Inc. as
Class Representative of Indirect Purchaser Class
in Rockford Case
Tennessee
American National Life Insurance Company of Texas
Texas
Board of Education of Washington County, Maryland
Maryland
County of Dakota, Nebraska
Nebraska
Counsel for the Acthar Group Claimants can be reached at:
CIARDI CIARDI & ASTIN
Daniel K. Astin, Esq.
1204 North King Street
Wilmington, DE 19801
Telephone: (302) 658-1100
Facsimile: (302) 658-1300
E-mail: dastin@ciardilaw.com
Albert A. Ciardi, III, Esq.
Walter W. Gouldsbury III, Esq.
CIARDI CIARDI & ASTIN
1905 Spruce Street
Philadelphia, PA 19103
Telephone: (215)557-3550
Facsimile: (215)557-3551
E-mail: aciardi@ciardilaw.com
wgouldsbury@ciardilaw.com
Donald E. Haviland, Jr., Esq.
William H. Platt II, Esq.
HAVILAND HUGHES
201 South Maple Ave., Suite 110
Ambler, PA 19002
Telephone: 215-609-4661
Facsimile: 215-392-4400
E-mail: haviland@havilandhughes.com
platt@havilandhughes.com
James Bartimus, Esq.
Anthony DeWitt, Esq.
BARTIMUS, FRICKLETON, ROBERTSON, RADAR PC
11150 Overbrook Road, Suite 200
Leawood, KS 66211
Telephone: 913-266-2300
Facsimile: 913-266-2366
E-mail: jb@bflawfirm.com
ALDewitt@bflawfirm.com
- and -
Peter J. Flowers, Esq.
Jonathan P. Mincieli, Esq.
MEYERS & FLOWERS, LLC
3 North Second Street, Suite 300 St.
Charles, IL 60174
Telephone: 630-232-6333
Facsimile: 630-845-8982
E-mail: pjf@meyers-flowers.com
jpm@meyers-flowers.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/37MK51H
About Mallinckrodt PLC
Mallinckrodt is a global business consisting of multiple
wholly-owned subsidiaries that develop, manufacture, market and
distribute specialty pharmaceutical products and therapies. The
company's Specialty Brands reportable segment's areas of focus
include autoimmune and rare diseases in specialty areas like
neurology, rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. On the Web:
http://www.mallinckrodt.com/
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware in the U.S. (Bankr. D.
Del. Lead Case No. 20-12522) to seek approval of a restructuring
that would reduce total debt by $1.3 billion and resolve
opioid-related claims against them.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
The official committee of unsecured creditors retained Cooley LLP
as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon
Advisers LLC as its financial advisor.
On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an
official committee of opioid related claimants. The OCC tapped
Akin Gump Strauss Hauer & Feld LLP as its lead counsel, Cole Schotz
as Delaware co-counsel, Province Inc. as financial advisor, and
Jefferies LLC as investment banker.
MALLINCKRODT PLC: Taps Arnold & Porter as Special Counsel
---------------------------------------------------------
Mallinckrodt plc and its affiliates received approval from the U.S.
Bankruptcy Court for the District of Delaware to hire Arnold &
Porter Kaye Scholer, LLP, as their special counsel.
The Debtors need the firm's legal assistance in regulatory,
antitrust and litigation matters.
Arnold & Porter will be paid at these rates:
Partners $740 to $1,150 per hour
Counsel $735 to $840 per hour
Associates $425 to $735 per hour
Staff Attorney/Specialists $420 to $468 per hour
Paraprofessionals $180 to $225 per hour
Michael B. Bernstein, Esq., a partner at Arnold & Porter, disclosed
in a court filing that the firm and its attorneys neither hold nor
represent any interest adverse to the Debtors and their estates.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Bernstein made the following disclosures:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing arrangements
for this engagement?
Response: Arnold & Porter's hourly rates are expected to be
within the following ranges:
Partners $740 to $1,150 per hour
Counsel $735 to $840 per hour
Associates $425 to $735 per hour
Staff Attorney/Specialists $420 to $468 per hour
Paraprofessionals $180 to $225 per hour
The hourly billing rates reflect a previously agreed-upon voluntary
15 percent discount from two-year trailing rates (e.g., 2019 rates
charged in 2021). Hourly rates vary with the experience and
seniority of the individuals assigned. These hourly rates are
subject to periodic adjustments to reflect economic and other
conditions (which adjustments will be reflected in the first Arnold
& Porter's fee application following such adjustments) and are
consistent with the rates charged elsewhere.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Response: Yes. Arnold & Porter has discussed with the Debtors
a prospective budget, staffing plan and applicable hourly rates for
its services as well as ongoing FDA regulatory and healthcare
compliance and antitrust counseling. The budget and staffing plan
will cover the period from the petition date to March 2021.
Arnold & Porter can be reached through:
Michael B. Bernstein, Esq.
Arnold & Porter Kaye Scholer, LLP
601 Massachusetts Avenue, NW
Washington, DC 20001-3743
Tel: +1 202.942.5227
Email: michael.b.bernstein@arnoldporter.com
About Mallinckrodt PLC
Mallinckrodt is a global business consisting of multiple
wholly-owned subsidiaries that develop, manufacture, market and
distribute specialty pharmaceutical products and therapies. The
company's Specialty Brands reportable segment's areas of focus
include autoimmune and rare diseases in specialty areas like
neurology, rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware in the U.S. (Bankr. D.
Del. Lead Case No. 20-12522) to seek approval of a restructuring
that would reduce total debt by $1.3 billion and resolve
opioid-related claims against them.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
The official committee of unsecured creditors retained Cooley LLP
as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon
Advisers LLC as its financial advisor.
On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an
official committee of opioid related claimants. The OCC tapped
Akin Gump Strauss Hauer & Feld LLP as its lead counsel, Cole Schotz
as Delaware co-counsel, Province Inc. as financial advisor, and
Jefferies LLC as investment banker.
MALLINCKRODT PLC: Wins Bankruptcy Plan Control Deadline Extension
-----------------------------------------------------------------
Jeremy Hill of Bloomberg News reports that the U.S. Bankruptcy
Judge John Dorsey granted Mallinckrodt's request to bar creditors
from floating their own restructuring plans for an additional six
months.
Judge Dorsey overruled an objection from a group of plaintiffs, who
argued that Mallinckrodt hasn't made enough progress toward
building consensus around their proposed deal.
"This obviously is a very large, complex case and it's not
surprising to me that the debtors -- while they hoped to submit a
plan within four months after filing -- weren't able to do so,"
Judge Dorsey said.
About Mallinckrodt PLC
Mallinckrodt is a global business consisting of multiple
wholly-owned subsidiaries that develop, manufacture, market and
distribute specialty pharmaceutical products and therapies. The
company's Specialty Brands reportable segment's areas of focus
include autoimmune and rare diseases in specialty areas like
neurology, rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. On the Web:
http://www.mallinckrodt.com/
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware in the U.S. (Bankr. D.
Del. Lead Case No. 20-12522) to seek approval of a restructuring
that would reduce total debt by $1.3 billion and resolve
opioid-related claims against them.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
The official committee of unsecured creditors retained Cooley LLP
as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon
Advisers LLC as its financial advisor.
On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an
official committee of opioid related claimants. The OCC tapped
Akin Gump Struss Hauer & Feld LLP as its lead counsel, Cole Schotz
as Delaware co-counsel, Province Inc. as financial advisor, and
Jefferies LLC as investment banker.
MARLEY STATION: $19.7M Sale of Glen Burnie Mall to MCB Approved
---------------------------------------------------------------
Judge Mark X. Mullin of the U.S. Bankruptcy Court for the Northern
District of Texas authorized Marley Station Redemption, LLC's sale
to MCB Acquisition Co., LLC for $19.7 million, of the Mall located
at 7900 Governor Ritchie Highway, in Glen Burnie, Maryland, defined
as:
(a) certain lands consisting of approximately 94.597 acres
located in the City of Glen Burnie, County of Anne Arundel, State
of Maryland, commonly known as 7900 Ritchie Highway;
(b) all buildings, structures, fixtures and improvements
presently located on the Land, including specifically, without
limitation, a retail building containing approximately
834,725square feet of gross floor area;
(c) all equipment, machinery, supplies and spare parts and
personal property used in connection with the use, operation and
maintenance of the Improvements, but specifically excluding any and
all bank accounts, as well as the 2005 Ford F250 Super Duty Truck,
both of which will be retained by the Seller;
(d) all easements, licenses, rights and appurtenances relating
to the Real Property;
(e) all right, title and interest of the Seller, in and to any
intangible personal property relating to the Real Property and/or
the Personal Property, including all licenses, permits, plans,
specifications, operating manuals, trade names, guarantees and
warranties; and
(f) all leases affecting the Real Property or Improvements,
including any extensions, additions and amendments thereto and
security or other Lease-related deposits, to the extent any exist.
The AiNET Objection is sustained.
The sale pursuant to the Amended and Restated Agreement of Sale
dated Jan. 12, 2021 is approved.
Except to the extent set forth in the SPA, the Mall at Closing will
be transferred to the Purchaser in accordance with the SPA and with
the exception of the AiNET Interests, free and clear of all Claims.
Without limiting the generality of the foregoing, the Claims will
include all liens and claims by YAM Capital III, LLC and Shirazi,
LLC, as well as all liens securing property taxes assessed against
the Mall for tax years 2020 and earlier. All such Claims as to the
Mall will attach to the sale proceeds.
The stay imposed under Bankruptcy Rule 6004(h) is waived in its
entirety, such that the Sale Order will be effective upon entry.
The lien supporting the secured claims of YAM, will attach to the
proceeds of the sale pursuant to the SPA. Any undisputed amounts
owed to YAM can be paid at Closing. All other sale proceeds will
be held by the Debtor pending resolution of the disputed portion of
any claims and liens, including YAM's claimed entitlement to
default interest, as well as any claims or liens of Shirazi or any
other creditor or party-in-interest.
The tax lien supporting the secured claim of all taxing authorities
for ad valorem taxes assessed against the Mall for tax years 2020
and before will attach to the sale proceeds. Any other term of the
Order notwithstanding, the Mall will be sold subject to the taxing
authorities' secured claims for ad valorem taxes for tax years 2021
and later, which taxes will be subject to the proration provisions
of the SPA.
Notwithstanding any other language in the Sale Order, after Closing
on the sale of the Mall, the Mall will remain subject to the AiNET
Interests as acknowledged in the SPA. The Court takes no position
on the validity of any such rights or interests, as that issue is
not before the Court for determination. Rather, any rights or
interests by AiNET will remain unchanged from their pre-petition
state and will be neither limited nor expanded in any manner by the
terms of the Sale Order. Nothing contained in the Order will be
construed as AiNET consenting to development of or construction on
any assets at issue in the SPA, including without limitation the
Developer's Adjacent Parcels, the Outparcels, the Shopping Center
Parcel, and/or the Developer's Parcel; rather, AiNET reserves all
rights with respect to the same. The Order is without prejudice to
AiNET or the AiNET Interests.
The benefit intended for G.L. "Buck" Harris, will vest fully in the
Debtor's estate as an asset of the bankruptcy estate without this
Court having determined its value, if any.
About Marley Station Redemption, LLC
Marley Station Redemption, LLC is a Single Asset Real Estate.
The Debtor sought Chapter 11 protection (Bankr. N.D. Tex. Case No.
20-43726) on Dec. 10, 2020.
The Debtor tapped Behrooz P. Vida, Esq., at the Vida Law Firm, PLLC
as counsel.
The Debtor estimated both assets and liabilities in the range of
$10 million to $50 million.
The petition was signed by Buck Harris, manager.
MASHANTUCKET (WESTERN): S&P Raises Term Loan B Rating to 'CCC-'
---------------------------------------------------------------
S&P Global Ratings raised its issue-level rating on
Connecticut-based casino operator Mashantucket (Western) Pequot
Tribe's term loan B to 'CCC-' from 'D', reflecting its view that
the term loan is vulnerable to nonpayment and the Tribe's ability
to meet its commitments under the term loan depends on favorable
business conditions.
S&P said, "Our 'SD' (selective default) issuer credit rating is
unchanged, reflecting that the Tribe is in default on its junior
debt obligations.
"The 'CCC-' issue-level rating reflects our view that some form of
restructuring is inevitable, absent unanticipated and significantly
favorable changes in the Tribe's circumstances. Our issuer credit
rating on the Tribe remains 'SD' because the Tribe has been unable
to make full and timely debt service payments to its junior
debtholders following the receipt of a blocking notice from its
senior lenders.
"Despite our forecast that 2021 revenue and EBITDA could remain
15%-25% below 2019 levels because of ongoing social distancing
measures and general apprehension about being in public spaces, we
believe the Tribe will be able to improve EBITDA over the coming
months to cover its monthly fixed charges. The recent amendment
increases the Tribe's monthly amortization, reduces the allowable
level of maintenance capital expenditure, and limits distributions
to the Tribe based on the amount of EBITDA it generates.
"Nevertheless, we view the Tribe's liquidity as weak because it
will face a material deficit within the next 12 months when the
term loan matures on Feb. 16, 2022. We do not expect the Tribe will
generate sufficient cash flow to repay the term loan's principal at
maturity. Furthermore, the Tribe's highly leveraged capital
structure, weak operating performance, and its inability to make
debt service payments on junior debt limit its access to the
capital markets. As a result, the Tribe will likely need to
negotiate another maturity extension with its lenders next year."
MERITOR INC: Egan-Jones Ups Senior Unsecured Ratings to BB-
-----------------------------------------------------------
Egan-Jones Ratings Company, on February 16, 2021, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Meritor Incorporated to BB- from B+.
Headquartered in Troy, Michigan, Meritor, Inc. is a leading global
supplier of drive train, mobility, braking, aftermarket and
electric power train solutions for commercial vehicle and
industrial markets.
MICHIGAN MATHEMATICS: S&P Assigns 'BB+' Rating on 2021 Rev. Bonds
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' rating to Michigan
Mathematics and Science Academy's (MMSA) series 2021 public school
academy revenue bonds. The outlook is stable.
Total pro forma debt is $11.85 million consisting solely of the
series 2021 bonds. MMSA is issuing the bonds to refinance a 2017
loan used to purchase its Lorraine campus; to purchase its
Dequindre campus, which is currently leased; to finance the costs
of enhancing its existing sites, fully fund a debt service reserve
at maximum annual debt service (MADS) and pay costs of issuance.
The series 2021 bonds are a general obligation of the academy,
secured by 20% of per-pupil state aid, a pledge of existing and
future net assets of MMSA, and a first-mortgage lien on all
facilities. This issuance is intended to achieve material annual
debt service savings and create a fairly level debt payment
schedule over the 30-year maturity.
"We assessed MMSA's enterprise profile as adequate, with solid
academic performance in comparison to local peers, seasoned and
effective management, solid demand, tempered by a modest waitlist,
and declining school aged population in the local area," said S&P
Global credit analyst Mel Brown. We assessed the MMSA's financial
profile as vulnerable, with a small revenue base of less than $10
million, low unrestricted reserves historically, a manageable debt
burden, and solid pro forma lease-adjusted maximum annual debt
service (MADS) coverage. We believe that, combined, these credit
factors lead to an anchor for MMSA of 'bb'. As our criteria
indicate, we may adjust the anchor rating based on a variety of
factors. In our view, the 'BB+' rating better reflects the school's
positive charter standing, academic performance, enrollment
approaching 1,000 students, and the expectation for the maintenance
of pro forma cash and coverage over the near term.
The stable outlook reflects S&P Global Ratings' opinion that over
our outlook period, we expect MMSA to maintain MADS coverage around
current assessment levels despite any state funding cuts, continue
growing days' cash on hand (DCOH) to levels commensurate with the
rating, and preserve its growing enrollment base and good
academics.
MICRON DEVICES: Gets OK to Hire Julia Kefalinos as Legal Counsel
----------------------------------------------------------------
Micron Devices, LLC received approval from the U.S. Bankruptcy
Court for the Southern District of Florida to employ the Law Office
of Julia Kefalinos PA to substitute for Michael Gulisano, Esq., as
its bankruptcy counsel.
The firm will render these services:
a. advise the Debtor with respect to its powers and duties and
the continued management of its business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the U.S. trustee's operating guidelines and
reporting requirements and with the rules of the court;
c. prepare legal papers;
d. protect the interest of the Debtor in all matters pending
before the court;
e. represent the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan; and
f. other legal services.
Julia Kefalinos, Esq., the firm's attorney who will be handling the
case, disclosed in a court filing that she is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Julia Kefalinos, Esq.
Law Office of Julia Kefalinos, P.A.
2121 SW 3rd Ave, Suite 600,
Miami, FL 33129
Phone: 305 856 2713
Email: jk@kefalinoslaw.com
juliakefalinos@bellsouth.net
About Micron Devices
Micron Devices, LLC, a Miami Beach, Fla.-based company that
manufactures medical equipment and supplies, filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Fla. Case No. 20-23359) on Dec. 7, 2020. Laura Perryman,
manager, signed the petition.
At the time of the filing, the Debtor disclosed total assets of
$2,520,764 and total liabilities of $6,254,656.
Judge Laurel M. Isicoff oversees the case. The Debtor is
represented by the Law Office of Julia Kefalinos PA.
MISS CLAUDY SEIDE: Request for Cash Collateral Use Denied
---------------------------------------------------------
Judge Melvin S. Hoffman of the U.S. Bankruptcy Court for the
District of Massachusetts denied Miss Claudy Seide's motion to use
cash collateral, during a video hearing held on February 23, 2021.
The denial was made without prejudice, for "the reasons set forth
on the record."
About Miss Claudy Seide
Miss Claudy Seide filed its Chapter 11 Petition on January 25, 2021
(Bankr. D. Mass. Case No. 21-10076). The Debtor is represented by
Michael Van Dam, Esq.
MOXIE'S CAFE: Can Use Cash Collateral on Final Basis
----------------------------------------------------
Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the
Middle District of Florida authorized Moxie's Cafe & Grill, LLC to
use cash collateral on a final basis, retroactive to the January
25, 2021 Petition Date.
The Debtor had sought the Court's approval to use the cash
collateral of secured creditor AWA of Tampa, LLC.
The Debtor was authorized to use cash collateral to pay:
(a) amounts expressly authorized by the Court;
(b) the current and necessary expenses set forth in the
approved budget, plus an amount not to exceed 10% for each line
item; and
(c) additional amounts as may be expressly approved in writing
by the Secured Creditor.
The Debtor's authorization to use cash collateral will continue
until further Court order.
The Debtor was directed to make adequate protection payments of
$1,150 to the Secured Creditor, beginning on March 21, 2021, and
continuing on the 21st day of each month thereafter. This payment
will be applied only to the secured portion of the Secured
Creditor’s claim.
The Secured Creditor was granted a perfected post-petition lien
against cash collateral to the same extent and with the same
validity and priority as its prepetition lien, without the need to
file or execute any document as may otherwise be required under
applicable non bankruptcy law.
The Court ordered the Debtor to maintain insurance coverage for its
property in accordance with the obligations under the loan and
security documents with the Secured Creditor.
A full-text copy of the Final Order is available for free at
https://tinyurl.com/52p2jwe5 from PacerMonitor.com.
About Moxie's Cafe & Grill
Moxie's Cafe & Grill, LLC filed a voluntary petition under Chapter
11 of the U.S. Bankruptcy Code (Bankr. M. D. Fla. Case No.
21-00271) on Jan. 25, 2021. In the petition signed by Dennis P.
Lee, manager, the Debtor disclosed up to $50,000 in assets and up
to $100,000 in liabilities.
Buddy D. Ford, P.A., serves as the Debtor's bankruptcy counsel.
MTPC LLC: Seeks Aug. 20 Extension of Exclusive Plan Filing Period
-----------------------------------------------------------------
MTPC, LLC, The Proton Therapy Center, LLC and PCPT Hamlin, LLC ask
the U.S. Bankruptcy Court for the Middle District of Tennessee to
extend their exclusive periods for filing and confirming a plan
through August 20, 2021 and October 19, 2021, respectively.
The Debtors' Exclusive Plan Filing Period is currently set to
expire on April 14, 2021, while their Exclusive Solicitation Period
is currently set to expire on June 14, 2021.
The Debtors tell the Court they are seeking to retain Houlihan
Lokey as an investment banker to run a marketing and sale process.
They say a robust Sale Process will necessarily take time, and that
this Sale Process will serve as the foundation for negotiating a
plan with the Debtors' stakeholders. The Debtors aver that their
purpose in seeking extension of the Exclusivity Periods is a
good-faith effort to conclude the plan process without the
distraction and costs of a competing plan process, which would be a
distraction and waste the Debtors' resources and time. The Debtors
further aver that because they are generally paying their debts as
they come due post-petition and anticipate continuing to do so
going forward, the relief requested does not result in prejudice to
any creditor or party-in-interest. The Debtors contend the relief
requested will enable them to continue focusing on the Sale Process
and proposing a plan rather than spending time and money on a
competing-plan process.
A hearing on the Debtors' Motion is scheduled for March 23, 2021 at
9:30 a.m. The deadline for the filing of responses to the Debtors'
Motion is March 16.
A full-text copy of the Debtors' Motion is available for free at
https://tinyurl.com/5cym5s2e from Stretto.com.
About MTPC LLC
MTPC LLC is a proton-therapy cancer-treatment center that serves a
multi-state area of the Southeastern United States and began
operations in 2018. It is a freestanding center with three active
treatment rooms including one fixed beam and two gantries. MTPC is
located in a 43,500-square-foot building adjacent to the campus of
the Williamson Medical Center, in Franklin, Tenn.
MTPC's affiliate, The Proton Therapy Center, LLC, is a Tennessee
limited liability company that was organized in 2010. It is a
freestanding center with three active treatment rooms including one
fixed beam and two gantries. Proton Therapy Center is located in
an 88,000-square-foot building on the campus of the Provision Case
CARES Cancer Center at Dowell Springs, in Knoxville, Tenn., a
comprehensive healthcare campus focusing on cancer treatment,
patient care, research, and education.
PCPT Hamlin, another affiliate of MTPC, is a Florida limited
liability company that was organized in 2018. It includes an
approximately 36,700-square-foot building in the 900-acre Hamlin
planned development in the "Town Center" of the 23,000-acre
"Horizon West" planning area of West Orange County.
MTPC and its affiliates sought Chapter 11 protection (Bankr. M.D.
Tenn. Lead Case No. 20-05438) on Dec. 15, 2020.
As of Aug. 31, 2020, MTPC's unaudited financial statements
reflected total assets of approximately $105.6 million and total
liabilities of approximately $131.2 million. Proton Therapy
Center's unaudited financial statements reflected total assets of
approximately $93.4 million and total liabilities of approximately
$130.2 million. Meanwhile, PCPT Hamlin's unaudited financial
statements reflected total assets of approximately $139.2 million
and total liabilities of approximately $138.5 million.
The Hon. Randal S. Mashburn is the case judge.
The Debtors tapped Waller Lansden Dortch & Davis, LLP and Foley &
Lardner, LLP as bankruptcy counsel, Trinity River Advisors, LLC as
restructuring advisor, and CRS Capstone Partners, LLC as financial
advisor. Stretto is the claims agent.
The U.S. Trustee for Region 8 appointed an official committee of
unsecured creditors on Jan. 8, 2021. The committee is represented
by Sills Cummis & Gross P.C. and Manier & Herod, P.C.
N & B MGMT: Trustee's Sale of Forest Hills Property for $68K OK'd
-----------------------------------------------------------------
Judge Carlota M. Bohm of the U.S. Bankruptcy Court for the Western
District of Pennsylvania authorized Jeffrey J. Sikirica, Chapter 7
Trustee of N & B Management Co., LLC, to sell the real property
located at 1910 Ardmore Boulevard, in Forest Hills Borough,
Allegheny County, Pennsylvania, Tax Parcel 0299-P-00096-0000-00, to
Elmer Pariona or his assigns for $68,000.
A Zoom hearing on the Motion was held on Feb. 23, 2021, at 2:00
p.m.
The sale is "as is, where is," and with all faults, and with no
representations and/or warranties of any kind or implied. It is
free, clear and divested of any and all liens, claims and
encumbrances, and the liens, claims, interests and encumbrances.
At the closing of the sale, the following will be paid:
a. Real estate taxes for the school district, county and city,
including all delinquent real estate taxes due at the time of the
closing, will be prorated over the tax year of the closing date
between the Successful Bidder and the Debtor;
b. Municipal liens for sewage and water due at the time of
closing;
c. Normal miscellaneous closing costs related to
documentation, lien letters, etc., and,
d. The balance of the proceeds will be held in trust by the N
& B Trustee pending distribution pursuant to the confirmed Amended
Plan Chapter 11 Plan dated Jan. 27, 2020 after resolution of any
contested alleged claims that arose as a result of the Sale and
payment of any Federal or State business income tax liabilities or
other administrative liabilities incurred because of the Sale.
The Chapter 11 Trustee is authorized to make and execute on behalf
of the Debtor any and all documents necessary to transfer title to
the Real Property. The deed provided by the Trustee to transfer
the Real Property will be by "Special Warranty Deed."
The sale of the Real Property to the Successful Bidder is pursuant
to a confirmed Amended Chapter 11 Plan dated Jan. 27, 2020 and the
sale is exempt from local and state real estate transfer taxes.
The closing will occur within 30 days of the date of the Order.
Pursuant to W.PA.LBR. 6004-1(c)(4), within seven calendar days of
the Closing Date, the Trustee will file a report of sale.
About N & B Management Co.
N & B Management Company, LLC, filed a Chapter 11 bankruptcy
petition (Bankr. W.D. Pa. Case No. 16-24728) on Dec. 23, 2016,
estimating less than $1 million in both assets and liabilities.
The
Debtor is represented by Francis E. Corbett, Esq.
Jeffrey Sikirica was appointed Chapter 11 trustee in the Debtor's
case on May 15, 2018.
On June 18, 2020 an amended Chapter 11 Plan dated Jan. 27, 2020 was
confirmed by the Court.
NABORS INDUSTRIES: Posts $820.3 Million Net Loss in 2020
--------------------------------------------------------
Nabors Industries Ltd. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss
attributable to common shareholders of $820.25 million on $2.13
billion of total revenues and other income for the year ended Dec.
31, 2020, compared to a net loss attributable to common
shareholders of $720.13 million on $3.05 billion of total revenues
and other income for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $5.50 billion in total assets,
$3.80 billion in total liabilities, $442.84 million in redeemable
noncontrolling interest in subsidiary, and $1.25 billion in total
equity.
Fourth Quarter 2020 Results
Nabors Industries reported fourth quarter 2020 operating revenues
of $443 million, compared to operating revenues of $438 million in
the third quarter of 2020. The net loss from continuing operations
attributable to Nabors common shareholders for the quarter was $112
million, or $16.46 per share. The fourth quarter included $162
million of pretax gains from debt exchanges and repurchases,
partially offset by charges of $71 million mainly from asset
impairments, for a net after-tax gain of $52 million. This
compares to a loss of $161 million, or $23.42 per share in the
prior quarter. The third quarter included net after tax gains of $6
million related to gains from debt repurchases, asset impairments
and severance costs.
For the fourth quarter, adjusted EBITDA was $108 million, compared
to $114 million in the prior quarter. Although adjusted EBITDA for
most of its segments improved sequentially, declines in
International and Rig Technologies more than offset those
increases. Reductions in its International rig count were almost
fully compensated by increases in the North American market.
Anthony G. Petrello, Nabors Chairman, CEO and president, commented,
"Our fourth quarter results were stronger than we expected. Once
again, we executed well across our portfolio of businesses. We
benefitted from activity increases in our North American markets.
Margins were better than we projected in our Lower 48 and
International rig markets, as well as in Drilling Solutions.
"We successfully completed exchanges of our outstanding notes
during the fourth quarter. These transactions materially improved
the Company's leverage and its debt maturity profile. Together
with free cash flow generation during the quarter, we realized a
significant reduction in net debt to just under $2.5 billion.
"Global oil demand increased during the fourth quarter, reducing
the inventory overhang. Commodity prices recovered as well. These
factors have driven activity higher across markets. In the fourth
quarter, the Lower 48 market grew by 23% on average. More
recently, drilling activity has begun to strengthen in various
international markets, particularly in Latin America and Saudi
Arabia. As demand for oil continues to recover post-pandemic, we
would expect drilling activity to increase steadily in the U.S. and
international markets. With utilization continuing to improve, we
also expect to see higher pricing throughout most markets during
2021.
"We are especially pleased to see the significant progress in our
Drilling Solutions segment. Adjusted EBITDA increased by 44%
versus the prior quarter. We saw continued growth in our
SmartSLIDETM and SmartNAVTM apps. SmartSLIDETM is our directional
steering control system which automates slide drilling. SmartNAVTM
is our automated directional guidance system. These offerings are
not only bolstering the performance of our Drilling Solutions
segment, but they are also driving the performance of our global
drilling rig business, allowing us to secure premium pricing and
the highest Lower 48 daily margins among our peers.
"To summarize, the market is driving higher oil prices and higher
drilling activity. As a result, all of our segments are moving in
the right direction."
Free Cash Flow and Capital Discipline
Capital expenditures were $41 million in the fourth quarter and
totaled $190 million for the full year 2020. For 2021, the Company
expects capital expenditures of approximately $200 million,
excluding SANAD newbuild rigs. These rigs are expected to be
funded directly by the joint venture.
Free cash flow, defined as net cash provided by operating
activities less net cash used by investing activities, as presented
in the Company's cash flow statement, reached $66 million in the
fourth quarter after funding capital expenditures of $41 million.
These results reflect the absence of semiannual interest payments
on the Company's senior notes, which are paid in the first and
third quarters. Total debt decreased by $322 million during the
fourth quarter and net debt, defined as total debt less cash, cash
equivalents and short-term investments, declined by $290 million.
During the fourth quarter, Nabors completed exchange transactions
for its senior notes resulting in a decrease in its reported net
debt of $235 million.
Subsequent to year end, the Company further addressed its capital
structure by completing additional debt exchanges and open market
purchases of notes. These transactions reduced the Company's debt
obligations by an additional $22 million. In January, the SANAD
joint venture paid nearly $50 million to each partner.
William Restrepo, Nabors CFO, stated, "The improvement in the
environment in the fourth quarter was welcome after the challenging
conditions earlier in the year. Our overall activity has held up
about as we expected, and our margins have outperformed our
expectations. We are particularly encouraged by the strength of
our industry leading drilling margins and by the success of our
technology offerings, both in growth and profitability. Our
adjusted EBITDA remained above the $100 million mark and well above
the performance of our competitors. We did benefit from $4 million
in non-recurring revenue from early terminations, nonetheless the
resiliency of our global results continues to support our free cash
flow generation.
"Lower 48 industry activity has improved significantly, but spot
market pricing has only increased modestly since its bottom.
Pricing should react positively as the year progresses and we
continue to increase utilization for high specification rigs. We
have turned the corner on International activity and are starting
to benefit from increased rig count in Saudi Arabia and from the
removal of COVID dayrates. We expect consolidated adjusted EBITDA
to decrease modestly in the first quarter, reflecting the absence
of the fourth quarter's early termination revenue."
Mr. Petrello concluded, "I would again like to recognize the
Company's global staff. The Company's success in 2020 stems
directly from our employees, their hard work, and commitment. We
were presented with a unique set of challenges in 2020. The entire
Nabors team responded with resourcefulness and composure, and I am
pleased with the Company's achievements in this difficult
environment.
"As we look to the future, the opportunities to deploy advanced
technology are growing. Our well-established portfolio of advanced
digital solutions has been battle-tested, and has proved to deliver
the promised improvements in efficiency and performance. We plan
to expand this portfolio, with a focus on analytics and further
automation.
"The prominence of ESG, and the emergence of the energy transition,
present an emerging opportunity set for innovators such as Nabors.
We recently committed to develop science-based targets for our
greenhouse gas emissions, aligned with the Science Based Targets
initiative. To our knowledge, Nabors is the first land drilling
contractor to do so.
"This commitment to reduce our own carbon footprint facilitates the
pursuit of a spectrum of initiatives. We are currently evaluating
technologies aimed at carbon capture and sequestration, power
management, and emissions reduction. These solutions are readily
integrated on our own fleet, and ultimately could reach into the
global rig market.
"As we enter 2021, the improving fundamentals in our existing
markets and our progress on innovative technology deployment are
increasing our confidence in reaching our financial goals."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1163739/000155837021001631/nbr-20201231x10k.htm
About Nabors
Nabors (NYSE: NBR) owns and operates land-based drilling rig fleets
and provides offshore platform rigs in the United States and
several international markets. Nabors also provides directional
drilling services, tubular services, performance software, and
innovative technologies for its own rig fleet and those of third
parties. Leveraging advanced drilling automation capabilities,
Nabors highly skilled workforce continues to set new standards for
operational excellence and transform the industry.
* * *
As reported by the TCR on Dec. 14, 2020, S&P Global Ratings raised
its issuer credit rating on U.S.-based onshore drilling contractor
Nabors Industries Ltd. to 'CCC+' from 'SD', reflecting its
assessment of the company's credit risk following the debt
exchange.
Also in December 2020, Fitch Ratings downgraded the Issuer Default
Rating (IDR) for Nabors Industries, Ltd. and Nabors Industries,
Inc. (collectively, Nabors) to 'RD' from 'C' upon the completion of
the company's exchange of senior unsecured notes for new senior
unsecured priority guaranteed notes. Fitch has deemed the exchange
as a distressed debt exchange (DDE) under its criteria.
NATIONAL FUEL: Egan-Jones Lowers Senior Unsecured Ratings to BB
---------------------------------------------------------------
Egan-Jones Ratings Company, on February 18, 2021, downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by National Fuel Gas Company to BB from BB+.
Headquartered in Williamsville, New York, National Fuel Gas Company
is an integrated natural gas company with operations in all
segments of the natural gas industry, including utility, pipeline
and storage, exploration and production, and marketing operations.
The Company operates across the United States.
NATIONAL RIFLE ASSOCIATION: Sues NY Attorney General
-------------------------------------------------------------------
Jonathan Stempel of Reuters reports that the National Rifle
Association filed a countersuit against New York Attorney General
Letitia James, saying she lacks authority to invoke state laws
governing nonprofits in her zeal to destroy the gun rights group.
In a Tuesday, Feb. 23, 2021, night court filing, the NRA, which
filed for bankruptcy last month and said it would switch its
incorporation to Texas from New York, accused James of
"weaponizing" her powers to pursue a "blatant and malicious
retaliation campaign" against the group because she dislikes what
it stands for.
"While we review this filing, we will not allow the NRA to use this
or any other tactic to evade accountability and my office's
oversight," James said in an emailed statement.
The Democrat had sued the NRA and Chief Executive Wayne LaPierre
last August 2020 in a state court in Manhattan.
She accused it of diverting millions of dollars to fund luxurious
trips for officials, no-show contracts for associates, and other
questionable expenses.
In seeking the lawsuit's dismissal, the NRA countered that James
sued "with the sole purpose of seeking to dissolve a political
enemy."
It also said her "selective enforcement" of state not-for-profit
laws violated its constitutional rights to free speech and equal
protection.
Both the NRA and LaPierre denied many of James' specific
accusations in court filings on Tuesday, February 23, 2021.
The lawsuit deepens the divide between the NRA and James, who is
also seeking to dismiss the group's bankruptcy.
Noting that the NRA claims to be solvent, James has called its
bankruptcy and plan to reincorporate in Texas after 150 years in
New York a bad-faith effort to escape her lawsuit and oversight.
She has also proposed letting a court-appointed trustee take over
the NRA's affairs if the bankruptcy proceeds.
A hearing on James' requests is scheduled for March 29, 2021 in the
Dallas bankruptcy court.
Bankruptcy filings normally halt existing litigation, but James has
said she deserves an exemption to enforce her "police and
regulatory power."
The case is New York v. National Rifle Association et al, New York
State Supreme Court, New York County, No. 451625/2020.
About the National Rifle Association
Founded in 1871 in New York State, the National Rifle Association
of America is a gun rights advocacy group. The NRA claims to be the
longest-standing civil rights organization and has more than five
million members.
Seeking to move its domicile and principal place of business to
Texas amid lawsuits in New York, National Rifle Association of
America sought Chapter 11 protection (Bankr. N.D. Tex. Case No.
21-30085) on Jan. 15, 2021. Affiliate Sea Girt LLC simultaneously
sought Chapter 11 protection (Case No. 21-30080).
The NRA was estimated to have assets and liabilities of $100
million to $500 million as of the bankruptcy filing.
Judge Harlin Dewayne Hale oversees the cases.
The Debtors tapped Neligan LLP and Garman Turner Gordon LLP as
their bankruptcy counsel, and Brewer, Attorneys & Counselors as
their special counsel.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors on Feb. 4, 2021. The committee is represented
by Norton Rose Fulbright US, LLP.
NAVIENT SOLUTIONS: Court Throws Out Involuntary Petition
--------------------------------------------------------
Steven Church of Bloomberg News reports that Navient Corp. beat
back an attempt to force its debt collection unit into bankruptcy
when a judge dismissed the complaints of three student-loan
borrowers.
U.S. Bankruptcy Judge Martin Glenn threw out the so-called
involuntary petition. The borrowers claimed they were creditors
entitled to force Navient Solutions into Chapter 11 because the
company had collected money from them after their student loans
were dismissed in bankruptcy.
Judge Glenn ruled that any money Navient may owe the student
borrowers was subject to a legitimate dispute, which means the
borrowers can't put Navient Solutions into bankruptcy.
About Navient Solutions
Navient Solutions is the servicing unit of student loan giant
Navient Corp. (Nasdaq:NAVI). Navient Solutions is a wholly-owned
subsidiary of Navient Corp. and acts as the principal management
company for most of Navient's business activities. Navient
Solutions' servicing division manages and operates the loan
servicing functions for Navient and its affiliates.
According to PacerMonitor.com, Sarah Bannister, Brandon Hood, and
LaBarron Tate have filed an involuntary Chapter 11 petition against
Navient Solutions, LLC (Bankr. S.D.N.Y. Case No. 21-10249) on Feb.
8, 2021, saying they were owed a combined $45,684 in "overpayments"
that they say the servicer illegally collected.
The Petitioners reportedly had their private student debts
discharged in bankruptcy but have been hounded and lied to for more
than a decade to repay discharged debts.
The Petitioners' counsel:
Austin C. Smith, Esq.
Smith Law Group LLP
95 Cove Hollow Rd
East Hampton, NY 11937
E-mail: acsmithlawgroup.com
aconnellsmith@gmail.com
NCR CORP: S&P Affirms 'BB-' ICR on Cardtronics Acquisition
----------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating on
U.S.-based ATM and point-of-sale hardware and services provider NCR
Corp.
S&P said, "At the same time, we are placing our ratings on NCR's
debt on CreditWatch with negative implications pending review of
the final capital structure. Depending on the final mix of secured
and unsecured acquisition debt funding, issue-level and recovery
ratings may be pressured.
"The stable outlook reflects our expectation for steady business
recovery in 2021 that will support revenue growth and margin
expansion, allowing for deleveraging. We also expect the company
will suspend shareholder returns and divert excess cash flow toward
debt reduction.
"The rating affirmation reflects our expectation for a business
recovery in 2021 and the company's commitment to prioritize debt
reduction. The transaction emerges as both NCR and Cardtronics
navigate COVID-19 pandemic-related disruption that substantially
reduced revenue 15%-20% in 2020, though we don't expect high
declines to persist over the next 12 months. The Cardtronics
acquisition will be fully debt-funded and raise adjusted leverage
to the mid-6x area on a trailing-12-months basis as of Dec. 31,
2020. Despite the high starting leverage, we expect its good free
operating cash flow (FOCF) to debt of 10%-12% to provide some
credit protections. We believe NCR's ability to manage cash outlays
including restructuring charges, pension contributions, shareholder
returns, and acquisitions supports debt reduction post-close.
"The debt-funded Cardtronics acquisition may increase business
execution risk. While we expect NCR will restore revenue and profit
growth as economies gradually reopen and hard-hit sectors such as
retail and hospitality improve, the pace of recovery following the
pandemic is uncertain. Widespread vaccine immunizations, which will
help economic activity, are likely by the end of the third quarter
of 2021. NCR's focus on integrating a sizable debt-funded
acquisition and higher debt service requirements may reduce
flexibility to manage a slow recovery in challenged end markets
while it invests to pivot from a hardware-centric business model.
"We expect the addition of Cardtronics will help diversify NCR's
services, though near-term revenues in retail and hospitality
depend on the resumption of economic activity. Additionally, a
greater percentage of revenues will be tied to ATM services. We
expect longer-term growth challenges for ATM markets as cash
transactions decline amid technological disruption such as emerging
digital contactless payment forms and the broader digitization of
banking, particularly in developed economies where the company has
significant exposure.
"While cash use is prevalent globally, we believe investments in
these newer technologies accelerated during the pandemic and are
likely to persist longer term. NCR has growth opportunities such as
in self-checkout offerings in retail end markets and digital
services for banking clients, but long-term structural industry
risks may pressure business prospects longer term."
Cardtronics improves NCR's business mix and margin profile over
time. The acquisition will provide more service-oriented business.
NCR expects total recurring sources will exceed 60%, up from about
54%. The recurring nature of Cardtronics's ATM service contracts
provide revenue visibility and may reduce cash flow volatility as
it reduces reliance on one-time hardware sales. Additionally,
Cardtronics may offset some business pressures by expanding ATM
services as banks consolidate footprints and outsource more. The
growth in Cardtronics' ATM bank branding and surcharge-free debit
network, AllPoint, may help growth as financial institutions look
to preserve their market presence in the U.S. and convenience for
customers.
Cardtronics' adjusted EBITDA margin in the low-20% area is higher
than NCR's. S&P expects increasing services and NCR's moderating
restructuring charges to support a higher-margin profile over time,
to 15%-17% from 12%-14% historically.
NCR expects to realize $100 million-$120 million run-rate cost
savings by the end of 2022. S&P incorporates at least $100 million
of savings that could support further margin expansion if not
reinvested or offset by additional restructuring charges, which
have been significant historically.
S&P said, "The stable outlook reflects our expectation for revenue
growth, margin expansion, and conservative financial policies to
support rapid deleveraging following close of the Cardtronics
acquisition. Specifically, we expect the company will suspend
shareholder returns and divert excess cash flow toward debt
reduction, such that adjusted leverage is below the mid-5x area
within 12 months."
S&P could lower the rating if:
-- Adjusted leverage remains above 5.5x or FOCF to debt declines
below the mid-single-digit percents;
-- Revenues and profits do not increase as expected because of a
slower recovery in pandemic-affected end markets and the reopening
of economies, threatening deleveraging prospects; and
-- The company continues more aggressive financial strategies such
as further debt-funded acquisitions or shareholder returns, leading
us to reassess its financial policy.
An upgrade is unlikely over the next 12 months because of the
company's elevated leverage profile. S&P could raise the rating
if:
-- Adjusted leverage is sustained below the mid-4x area and FOCF
to debt remains above 10% even when accounting for acquisitions and
shareholder returns; and
-- The company executes strategies to increase recurring sources,
sustainably increases revenue, and expands margins to offset
long-term secular growth challenges and potential digital
disruption in cash usage.
NEOPHARMA INC: Hearing on Sale of All Assets Set for March 31
-------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
Chapter 11 cases of Neopharma, Inc. and Neopharma Tennessee LLC,
and Gary M. Murphey, Chapter 11 trustee for the Debtors, filed with
the U.S. Bankruptcy Court for the Eastern District of Tennessee a
notice of their proposed sale of the substantially all assets of
the Debtors outside the ordinary course of business.
A hearing on the Motion is set for March 31, 2021, at 10:00 a.m.
The Objection Deadline is March 16, 2021 at 4:00 p.m. (ET).
The Committee and the Chapter 11 Trustee are engaged in a joint and
fully cooperative, Court-approved, fair and open marketing and sale
process designed to maximize the value of the Assets. On Feb. 18,
2021, the Court approved bidding procedures that the Movants and
their advisors are currently utilizing to generate as much interest
as possible in the market.
The Movants recognize that the estates are incurring significant
administrative expense liabilities as long as the Assets remain in
chapter 11--including substantial electricity and other utility
charges. As the Court recognized in entering the Bidding
Procedures Order, the Assets need to be sold as expeditiously as
possible. Accordingly, as of the date of the Motion, the sale
process is already well underway. The Movants and their advisors
expect to work diligently and with urgency in the weeks leading up
to the March 24, 2021 bid deadline to increase the likelihood of
receiving multiple qualified bids, resulting in a competitive
auction.
For the reasons set forth in the Motion, as well as any further
supporting argument and evidence submitted by the Movants in
advance of the hearing on the Sale Hearing, the Movants
respectfully ask that the Court approves the Sale and enters the
Order. In the interest of attracting the best available offers and
maximize value for creditors and other stakeholders, it is
appropriate to sell the Debtors' assets on a final, "as is" basis,
free and clear of any and all liens, claims, encumbrances, and
interests otherwise expressly set forth in the Order or an APA
with a Successful Bidder, as applicable).
The only purported secured debt that exists on the Debtors' assets
is a disputed loan in the amount of approximately $250,000 by Peta
Pharma Inc. The Debtors have already taken the position that the
promissory note giving rise to the Peta Pharma Claim was not duly
authorized by the Debtors when it was issued.
In addition, the Peta Pharma Claim purports to be secured by an
"all assets" lien, including the Debtors' pharmaceutical plant.
However, it does not appear that Peta Pharma recorded any real
property mortgage to perfect its real property security interest.
Accordingly, in the event that Peta Pharma objects to the sale free
and clear, the Court should still approve such a sale given that,
inter alia, a bona fide disputes exist regarding whether (a) the
Peta Pharma Note was duly authorized by the Debtors and (b) the
asserted Peta Pharma Claim is a validly perfected secured claim at
all.
Finally, the Movants ask that the Court waives the stays imposed
under Bankruptcy Rules 6004(h) and 6006(d). Their Court-approved
sale process is premised on the fact that the Debtors' assets need
to be marketed and sold as expeditiously as possible. The Court
has already approved an accelerated timeline for the Sale, which
appropriately balances the estates' interest in maximizing value
while also recognizing that the assets must be sold quickly to
minimize the administrative expense burden imposed on these
estates. Accordingly, the Movants submit that the waiver of the
stays under Bankruptcy Rules 6004(h) and 6006(d) is reasonable and
appropriate under the circumstances.
About Neopharma Inc.
Neopharma Inc. and Neopharma Tennessee, LLC, manufacturers of
pharmaceutical and medicinal products, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tenn. Lead Case No.
20-52015) on Dec. 22, 2020.
At the time of the filing, the Debtors disclosed assets of between
$1 million and $10 million and liabilities of the same range.
Judge Shelley D. Rucker oversees the cases.
Hunter, Smith & Davis, LLP and Province LLC serve as the Debtors'
legal counsel and financial advisor, respectively.
On Jan. 14, 2021, the U.S. Trustee for Region 8 appointed an
official committee of unsecured creditors. The committee tapped
Buchalter P.C. as its lead bankruptcy counsel, Woolf McClane
Bright
Allen & Carpenter PLLC as Tennessee counsel, and Province LLC as
financial advisor.
Gary M. Murphey is the Debtors' Chapter 11 trustee. He is
represented by Polsinelli PC.
NEOPHARMA TENNESSEE: March 26 Auction of Substantially All Assets
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Neopharma Tennessee, LLC and Neopharma, Inc. filed the U.S.
Bankruptcy Court for the Eastern District of Tennessee a notice of
their auction sale of substantially all assets.
On Jan. 27, 2021, the official committee of unsecured creditors in
the cases filed their Bidding Procedures Motion asking entry of the
Bidding Procedures Order (i) authorizing the Committee to market
the Debtors' assets for sale, (ii) approving the Bidding
Procedures, (iii) approving the form of Asset Purchase Agreement,
(iv) approving a stalking horse bid and certain bid protections,
(v) authorizing the Committee chairperson or the Committee's
designee to execute all necessary documents in furtherance of the
sale process and (vi) granting certain related relief.
On Feb. 12, 2021, Gary M. Murphey, the Chapter 11 Trustee, filed
the Trustee Joinder, pursuant to which the Chapter 11 Trustee
joined the Committee's Bidding Procedures Motion.
On Feb. 18, 2021, the Court entered the Bidding Procedures Order,
approving, among other things, the Bidding Procedures, which
establish key dates and times relating to the Sale and the Auction.
The Bidding Procedures set forth in detail the requirements for
submitting Qualified Bids, and any person interested in making an
offer to purchase the Assets must comply strictly with the Bidding
Procedures. Only Qualified Bids that are submitted in accordance
with the Bidding Procedures will be considered by the Committee and
the Chapter 11 Trustee.
The salient terms of the Bidding Procedures are:
a. Stalking Horse Designation Deadline: March 1, 2021
b. Bid Deadline: March 24, 2021, at 5:00 p.m. (ET) Initial
Bid:
c. Auction: If two or more Qualified Bids are received by the
Bid Deadline, the Committee and the Chapter 11 Trustee will conduct
the Auction, which will take place on March 26, 2021 commencing at
10:00 a.m. (ET) (i) virtually by videoconference, (ii) only if
permitted and advisable in light of the then-current status of the
COVID-19 pandemic, at the offices of counsel to the Chapter 11
Trustee: Polsinelli, PC, 401 Commerce Street, Suite 900, Nashville,
TN 37219, or (iii) on such other date and/or at such other location
or by other virtual means as determined by the Committee and the
Chapter 11 Trustee in consultation with the U.S. Trustee. If the
Committee and the Chapter 11 Trustee receive only one timely
Qualifying Bid, the Committee and the Chapter 11 Trustee will not
hold an Auction and the Qualifying Bid will be deemed the
Successful Bid.
d. Sale Hearing: March 31, 2021, at 10:00 a.m. (ET)
f. Sale Objection Deadline: March 16, 2021, at 4:00 p.m. (ET)
The Sale will be free and clear of any liens, claims, encumbrances
and other interests.
About Neopharma Tennessee LLC
Neopharma Tennessee LLC is a privately held company in the
pharmaceutical and medicine manufacturing industry.
The Debtor sought Chapter 11 protection (Bankr. E.D. Tenn. Case No.
20-52016) on Dec. 22, 2020.
The Debtor estimated both assets and liabilities in the range of $1
million to $10 million.
The Debtor tapped Mark S. Dessauer, Esq., at Hunter, Smith & Davis,
LLP as counsel.
The petition was signed by David Argyle, chief restructuring
officer.
On Jan. 29, 2021, the Court appointed Gary M. Murphey as the
chapter 11 trustee.
NEOVASC INC: Regains Compliance with Nasdaq Min. Market Value Rule
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Neovasc Inc. has received written notification from the Nasdaq
Stock Market LLC informing the Company that it has regained
compliance with the minimum market value requirement set forth in
the rules for continued listing on the Nasdaq Capital Market.
Neovasc received a letter from the Nasdaq in December 2020
notifying the Company that it was not in compliance with the
minimum market value requirement set forth in Listing Rule
5550(b)(2). The Nasdaq Notice confirms that the Company has
regained compliance with Listing Rule 5550(b)(2) pursuant to
Listing Rule 5810 as the Company's market value exceeded US$35
million for 14 consecutive business days between Feb. 2, 2020
through Feb. 22, 2020.
The Company is now in compliance with all previously announced
breaches of the Listing Rules.
About Neovasc Inc.
Neovasc -- http://www.neovasc.com/-- is a specialty medical device
company that develops, manufactures and markets products for the
rapidly growing cardiovascular marketplace. Its products include
the Reducer, for the treatment of refractory angina, which is not
currently commercially available in the United States (2 U.S.
patients have been treated under Compassionate Use) and has been
commercially available in Europe since 2015, and Tiara, for the
transcatheter treatment of mitral valve disease, which is currently
under clinical investigation in the United States, Canada, Israel
and Europe.
Neovasc recorded a net loss of $35.13 million for the year ended
Dec. 31, 2019, compared to a net loss of $107.98 million for the
year ended Dec. 31, 2018. At Dec. 31, 2019, the Company had $10.10
million in total assets, $24.55 million in total liabilities, and a
total deficit of $14.44 million.
Grant Thornton LLP, in Vancouver, Canada, the Company's auditor
since 2002, issued a "going concern" qualification in its report
dated March 30, 2020 citing that the Company incurred a
comprehensive loss of $33,618,494 during the year ended Dec. 31,
2019, and as of that date, the Company's liabilities exceeded its
assets by $14,445,765. These conditions, along with other matters,
raise substantial doubt about the Company's ability to continue as
a going concern.
NEW CITIES INVESTMENT: $6.35M Sale of Palm Desert Property Okayed
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Judge M. Elaine Hammond of the U.S. Bankruptcy Court for the
Northern District of California authorized New Cities Investment
Partners, LLC's private sale of the real property located at 74351
Hovley Lane East, in Palm Desert, California, APNs 624-040-019 and
624-060-089, to Bravo Properties, LLC for $6.35 million, on the
terms of their Purchase and Sale Agreement.
A tele/videoconference on the Motion was held on Feb. 11, 2021, at
10:00 a.m.
The Debtor is authorized to pay the following undisputed liens or
claims at closing of the sale: (1) Riverside County Tax Collector;
and (2) Century Housing Corp.
The sale is free and clear of the Affected Interests: (1) Riverside
County Tax Collector's lien in the Palm Desert Real Property; and
(2) Century Housing's lien in the Palm Desert Real Property.
Unless the holders of the liens, claims or interests have agreed to
other treatment, their liens, claims or interests will attach to
the proceeds of the sale.
The Buyer has not assumed any liabilities of the Debtor.
The Debtor, and any escrow agent upon the Debtor's written
instruction, will be authorized to make such disbursements on or
after the closing of the sale as are required by the purchase
agreement or order of the Court, including, but not limited to, (a)
all delinquent real property taxes and outstanding post-petition
real property taxes pro-rated as of the closing with respect to the
real property included among the purchased assets; (b) disbursement
of the proceeds from escrow to the Affected Interests in order of
their priority under applicable nonbankruptcy law to the extent
funds are available to pay them; (c) payment of a broker's
commission to The Hoffman Company; (d) payment of U.S. Trustee
Fees, and taxes; (e) real property taxes; water, sewer, and utility
charges; closing fees charged by the title company; and any escrow
fees; (f) transfer taxes and recording fees for the releases of
any mortgage or other encumbrance; and (g) and other closing costs.
The Order will be effective immediately upon entry. No automatic
stay of execution, pursuant to Rule 62(a) of the Federal Rules of
Civil Procedure, or Bankruptcy Rules 6004(h), applies with respect
to the Order.
About New Cities Investment Partners
New Cities Investment Partners, LLC is engaged in activities
related to real estate. The company owns a vacant real property
located in Palm Desert, Calif.
New Cities Investment Partners sought protection under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 19-52584) on
Dec.
23, 2019. The petition was signed by Lee E. Newell, chief
executive officer of New Cities Land Company, Inc., Debtor's
manager. At the time of the filing, Debtor disclosed assets of
between $1 million and $10 million and liabilities of the same
range. Judge M. Elaine Hammond oversees the case.
Debtor has tapped MacDonald Fernandez LLP as its legal counsel and
Hayashi Wayland Accounting & Consulting, LLP as its accountant.
Debtor filed its Chapter 11 plan of reorganization and disclosure
statement on March 20, 2020.
NEW HOME: S&P Rates New $35MM Senior Unsecured Notes Due 2025 'B-'
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S&P Global Ratings assigned its 'B-' issue-level rating and '3'
recovery rating to The New Home Co. Inc.'s proposed $35 million
senior unsecured notes due 2025. The '3' recovery rating indicates
its expectation for meaningful (50%-70%; rounded estimate: 60%)
recovery in the event of a payment default. The terms of these
tack-on notes are identical to the terms of its existing 7.25%
senior notes, which it issued on Oct. 13, 2021, other than the
issuance date and price. S&P expects the company to use the
proceeds from this offering for general corporate purposes,
including to fund its land acquisitions, investments in new
markets, and working capital.
NIAGARA FRONTIER: April 7 Disclosure Statement Hearing Set
----------------------------------------------------------
On Feb. 19, 2021, debtor Niagara Frontier Country Club, Inc. filed
with the U.S. Bankruptcy Court for the Western District of New York
a disclosure statement and plan. On Feb. 21, 2021, Judge Michael
J. Kaplan ordered that:
* April 7, 2021, at 12:00 p.m. at Robert Jackson United States
Courthouse, 2 Niagara Square, 5th Floor – Orleans Courtroom,
Buffalo, NY 14202 is the hearing to consider the approval of the
disclosure statement.
* April 1, 2021, is fixed as the last day for filing and
serving written objections to the disclosure statement.
A full-text copy of the order dated Feb. 23, 2021, is available at
https://bit.ly/2O1UAYb from PacerMonitor.com at no charge.
About Niagara Frontier Country Club
Niagara Frontier Country Club, Inc. --
http://niagarafrontiergolfclub.com/-- is a private,
membership-based golf club located in Youngstown, New York. The
18-hole Niagara Frontier course at the Niagara Frontier Country
Club facility features 6,236 yards of golf from the longest tees
for a par of 70.
Niagara Frontier Country Club sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D.N.Y. Case No. 18-11695) on Aug. 30,
2018. In the petition signed by Henry Sandonato, president, the
Debtor was estimated to have assets of $1 million to $10 million
and liabilities of $1 million to $10 million.
Judge Michael J. Kaplan oversees the case.
OCWEN FINANCIAL: S&P Alters Outlook to Stable, Affirms 'B-' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook on Ocwen Financial Corp. to
stable from negative. S&P also affirmed its 'B-' long-term issuer
credit rating on the company.
S&P said, "At the same time, we assigned a 'B-' rating to the
company's first-lien notes. The recovery rating is '3', reflecting
our expectation of meaningful recovery (50%-70% range, rounded
estimate: 60%) in a simulated default scenario.
"We revised the outlook based on Ocwen's refinancing transaction
that removes near-term maturity risk from its senior secured term
loan and second-lien notes that were set to mature in 2022. Our
prior negative outlook was also based on liquidity risk from rising
forbearance and the potential that the company may record losses
that erode its cushion from tangible net worth covenants." Since
then, the company has reported stable tangible net worth and has
been able to finance advances while maintaining liquidity.
Ocwen has launched a transaction to refinance its senior secured
term loan due 2022, its second-lien notes due 2022, and legacy PHH
Mortgage Corp. notes with a first-lien note issued from PHH and a
subordinated note issued from the holding company. The new
longer-dated debt mitigates any near-term liquidity pressure
associated with refinancing risk.
The first-lien notes will be issued by Ocwen operating subsidiary
PHH Mortgage Corp. The new first-lien notes will not have a
maintenance covenant based on loan to value or minimum tangible net
worth like the prior secured term loan. That said, loan to value on
the first-lien notes is expected to be approximately 36% pro
forma.
The company recently announced that it has reached an agreement to
issue $285 million of notes with a $35 million original issue
discount issued from the holding company to funds and accounts
managed by Oaktree Capital Management L.P. These notes will be
funded in two tranches, one when the first-lien notes are issued
and the second at the launch of Oaktree and Ocwen's mortgage
servicing rights (MSR) joint venture. These notes will have
financial maintenance covenants including a minimum book value of
$275 million (compared to above $400 million pro forma for the
transaction) and minimal unrestricted cash of $50 million (compared
to $328 million pro forma). The holding company notes issued to
Oaktree will be subordinate to existing indebtedness, including the
new first-lien notes.
These transactions deepen Ocwen's partnership with Oaktree. On Dec.
22, Ocwen entered into a $250 million equity MSR joint venture with
Oaktree. Oaktree is expected to invest 85% of the equity while
Ocwen invests the remainder. Ocwen is expected to manage,
subservice, and receive recapture income from the joint venture. In
addition, Oaktree will invest 4.9% of Ocwen's common stock at
$23.15 per share and receive warrants equal to 3.0% of the
outstanding common stock struck at $24.31 per share. Ocwen's
holding company notes are contingent, in part, on closing the joint
venture. Ocwen will receive $199.5 million of proceeds from the
holding company notes upon closing, with the remaining $85.5
million received at closing if Ocwen has a minimum tangible net
worth of $360 million.
S&P said, "We view the Oaktree partnership as a credit positive
since it creates a path for Ocwen to grow its servicing and
subservicing portfolio while leveraging its loan servicing platform
sooner than if it had to grow its servicing portfolio organically.
"The stable outlook reflects S&P Global Ratings' view that Ocwen
will maintain EBITDA interest coverage above 1.5x. We expect Ocwen
will work to stabilize and grow its servicing portfolio by
expanding its origination channel and subservicing relationships as
well as through continued bulk MSR purchases. We also expect Ocwen
to maintain a cushion from its minimum tangible net worth
covenants.
"We could lower the rating in the next 12 months if the company's
interest coverage falls below 1.5x. We could also lower the rating
if the company approaches its debt covenants or if regulatory
actions impede the company's operations.
"An upgrade is unlikely in the next 12 months. In the longer term,
we could upgrade the company if it reduces leverage to below 5.0x
debt to EBITDA while maintaining a stable or growing servicing
portfolio without material regulatory actions.
"Our simulated default scenario contemplates a default occurring in
2023, in the face of substantial curtailments of business practices
because of regulatory and compliance deficiencies in servicing
practices."
Eventually, the company's liquidity and capital resources could
become strained to the point where it cannot continue to operate
without an equity infusion or bankruptcy filing.
As a result, the company might have to liquidate its assets. S&P
believes the causes of a default would be inherent to the company's
operating activities.
S&P said, "As a result, we believe creditors would place the most
value on the company's MSRs and advances. We have therefore valued
the company through a discrete asset valuation of its MSRs and
advances."
-- Regulatory and compliance deficiencies
-- A sustained period of rapid amortization of MSRs with limited
ability to refinance the repayments
-- Reduced new origination activity
-- An increase in borrower delinquencies and costs to service
-- An increase in the discount rate to value MSRs
-- Net enterprise value (after 5% administrative costs): $521
million
-- Collateral value available to secured creditors: $247.33
million
-- First-lien debt: $419 million
--Recovery expectations: (50%-70%, rounded estimate: 60%)
Note: All debt amounts include six months of prepetition interest.
ORYX MIDSTREAM: S&P Alters Outlook to Positive, Affirms 'B-' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Oryx Midstream Holdings,
a Texas-based crude oil gathering and transportation business, to
positive from negative.
S&P said, "At the same time we are affirming out 'B-' issuer credit
rating on Oryx and our 'B-' issue-level rating on its senior
secured term loan B. The recovery rating is unchanged at '3',
indicating our expectation for meaningful (50%-70%; rounded
estimate: 60%) recovery in the event of default.
"The positive outlook reflects our view that Oryx will continue to
gain throughput volumes and generate strong free cash flows in 2021
and 2022. We anticipate adjusted debt to EBITDA of 5.5x-5.75x over
the next 12 months.
"Oryx had better-than-anticipated performance in 2020, and we
expect recovery of throughput volumes during the next 12-18 months
supported by more rigs in the Permian basin. We now expect adjusted
debt to EBITDA of 5.5x-5.75x in 2021, declining to about 5x in
2022. In second-quarter 2020 Oryx's Delaware volumes declined 12%
to approximately 470 thousand barrels per day (Mb/d) due to the
production curtailment and wells shut-ins on its dedicated acreage.
However, in the second half of the year average Delaware throughput
improved and amounted to about 490 Mb/d, which we expect to
continue to grow in 2021. We anticipate exploration and production
companies in the Permian basin to increase their drilling activity
given West Texas Intermediate (WTI) spot prices above $50 per
barrel, which is higher than the $30-$35 per barrel break-even
levels. However, volume recovery will be more pronounced in the
second half of 2021 as we expect producers to focus on capital
management and debt reduction in the first half of this year."
Oryx is relatively small, with expected EBITDA of $240 million this
year. Oryx's operations are concentrated in a single area (the
Delaware basin), and it has volumetric exposure due to 100% acreage
dedication contracts. In early 2020, Oryx completed the
equity-financed acquisition of Targa's Permian crude gathering
assets, which increased Oryx's scale and EBITDA.
The credit quality of Oryx's counterparties has improved as large
integrated oil and gas companies acquired some of its smaller
customers. Oryx may get access to better acreage of the larger
exploration and production companies, which will support its
throughput. We estimate that investment-grade customers now account
for about half of Oryx's volumes compared with 40% last year, while
the rest comes from non-rated or lower-credit-quality companies.
S&P said, "The positive outlook reflects our view that Oryx will
continue to gain throughput volumes and generate strong cash flows
in 2021 and 2022, which will be driven by production ramp-up in its
dedicated acreage. We anticipate adjusted debt to EBITDA of
5.5x-5.75x over the next 12 months, improving to the low-5x range
in 2022. We also expect Oryx to have adequate liquidity and
maintain ample headroom over its 1.1x DSCR financial covenant.
"We could change the outlook to stable if we expect Oryx's leverage
to remain between 6x-6.5x. This could happen if throughput volumes
remain flat, or if the company incurred significant debt-financed
capital expenditures.
"We could raise our rating on Oryx if the company continues to
increase its throughput volumes, while generating positive free
cash flows and reducing leverage to below 6x on a sustained basis.
OSUM PRODUCTION: S&P Places 'CCC+' ICR on CreditWatch Positive
--------------------------------------------------------------
On Feb. 22, 2021, S&P Global Ratings placed all ratings on Osum
Production Corp.'s (OPC) and Osum Oil Sands Corp.'s (OOSC),
including the 'CCC+' issuer credit rating, on CreditWatch with
positive implications.
Waterous Energy Fund (WEF), the current owner of 45% of OPC's
parent company, Osum Oil Sands Corp.'s (OOSC) common shares, has
launched a takeover bid for the remaining portion of the company.
On Feb. 18, 2021, WEF increased its offered purchase price to C$3
per share from its original C$2.40 per share, and OOSC's
independent board members and members of the company's executive
team agreed to tender their shares to the improved offer.
As S&P believes the term loan will be fully repaid when the
acquisition is completed, we expect to withdraw its ratings on OPC
and OOSC at that time.
The WEF acquisition would trigger a change-of-control provision
under OPC's rated term loan, requiring full repayment of the loan.
As WEF's takeover bid circular confirms its intent to fully repay
the outstanding amount under OPC's term loan, the anticipated
repayment effectively eliminates the refinancing risk underpinning
the negative outlook on our ratings.
The company's credit profile and rating remain constrained by OPC's
small production base and focus on low-value bitumen production.
Despite the material debt reduction expected with the planned
repayment of the term loan, which totaled C$174 million on Sept.
30, 2020, and very strong projected 2021 positive free operating
cash flow (FOCF), the company's credit profile and the ratings
would remain constrained by OPC's single-product focus and small
scale; 2021 daily average production is estimated at about 20,000
barrels per day. S&P said, "With 2021 capital spending estimated at
about C$40 million, we project the company would generate about
C$100 million-C$110 million in positive FOCF in 2021. This
projected free cash flow could support some level of organic
production growth; however, the company would not be able to
achieve the scale needed to improve its credit profile and the
ratings during our current cash flow forecast period. Nevertheless,
the good reservoir quality of OPC's thermal bitumen assets, and the
company's competitive unit breakeven costs, which S&P Global
Ratings estimated at US$6.52 per barrel at Sept. 30, 2020, places
the company's profitability in the midrange of the global
exploration and production peer group ranking."
The CreditWatch placement reflects the strong likelihood of WEF
fully acquiring OPC and its parent, triggering a full repayment of
OPC's term loan at the close of the acquisition. Furthermore, the
anticipated full repayment of the term loan effectively eliminates
the refinancing risk, previously attributed to the negative
outlook; however, an upgrade is unlikely as the scale of Osum's
operations and expected cash flow generation remains insufficient
to support any meaningful organic growth. Considering the full
repayment of OPC's term loan, S&P expects to withdraw the ratings
when the WEF acquisition is completed.
PACKERS HOLDINGS: S&P Rates New Revolving Credit Facility 'B-'
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S&P Global Ratings assigned its 'B-' issue-level and '3' recovery
ratings to U.S.-based third-party sanitation service provider for
food-service products Packers Holdings LLC's proposed $54 million
revolving credit facility and $1.055 billion first-lien term loan.
The '3' recovery rating indicates its expectation for meaningful
recovery (50%-70%; rounded estimate: 55%) in the event of a payment
default.
Packers (B-/Stable/--) intends to use the net proceeds from the new
first-lien term loan to refinance its existing outstanding $700
million first-lien term loan, $350 million non-fungible first-lien
term loan, and transaction expenses. The transaction is generally
leveraged neutral, but it extends the company's weighted-average
debt maturity to 6.5 from 4.1 years.
Issue Ratings--Recovery Analysis
Key analytical factors
-- S&P's simulated default scenario contemplates a payment default
in 2023 as a result of the loss of a major client, increasing
customer in-sourcing, a failure of food safety audits or another
reputation-damaging event, or a substantial drop in plant
production days or protein consumption.
-- Packers is the borrower of the debt, which is guaranteed by
ultimate parent PSSI Holdings LLC, PSSI Sub-Holdings LLC, and the
borrower's wholly-owned U.S. subsidiary.
-- S&P believes that if Packers were to default, it would still
have a viable business model, given its client relationships,
favorable reputation, and the essential nature of its services.
Simulated default assumptions
-- Simulated year of default: 2023
-- EBITDA at emergence: $121.4 million
-- EBITDA multiple: 5.5x
-- Gross recovery value: $667.5 million
Simplified waterfall
-- Net recovery value: $634.1 million
-- Valuation split (obligors/nonobligors): 100%/0%
-- Value available to first-lien debt: $634.1 million
-- Secured first-lien debt claims: $1.112.3 billion
--Recovery expectations: 50%-70% (rounded estimate: 55%)
-- Total value to unsecured claims: $0
--Recovery expectations: Not applicable
All debt amounts include six months of prepetition interest.
PATSY MCGIRL: Unsecured Creditors Get 50% of Net Profit for 5 Years
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Patsy Mcgirl, LLC, filed a Chapter 11 Small Business Plan and a
corresponding Disclosure Statement.
The Debtor operates a pet market. After the effective date of the
order confirming the Plan, it will continue to operate the company.
Payments and distributions under the Plan will be funded by
through future income from the operations of the company
Secured Lender The Fundworks, LLC in Class 3B has filed a secured
claim in the amount of $80,115. The Debtor will pay this claim in
full in 120 months. The payments will be approximately $668 per
month with the first monthly payment being due and payable on the
15th day of the first full calendar month following 60 days after
the effective date of the plan. This class is impaired.
The allowed general unsecured creditors will be paid as much of
what they are owed as possible. Each year, if the Reorganized
Debtor made a profit, after income taxes, and after making all
priority and secured plan payments and normal overhead payments,
the Reorganized Debtor shall pay to the allowed unsecured creditors
their pro-rata share of 50% of the net profit for the previous
year, in twelve monthly payments beginning on June 15th of the year
in which the financial statement is mailed to these creditors. Each
year, during the term of the five-year Plan, the Reorganized Debtor
will repeat the 12-month payment plan to the allowed unsecured
creditors if the Reorganized Debtor made a net profit the previous
year as reflected in the previous year's financial statement.
A copy of the Disclosure Statement is available at
https://bit.ly/3dTwt8O from PacerMonitor.com.
About Patsy McGirl
Patsy's Pet Market is Katy's Local Pet Farmers Market filled with
wholesome, healthy dog and cat foods and unique specialty items.
As the neighborhood pet supply market, store owners Patsy McGirl
with more than 25 years in the pet industry and Alex McCray with
more than 15 years as a business development consultant bring a
combination of dynamic energy and distinctive skills necessary to
create a fast-growing, long-lasting natural pet provisions
company.
Patsy McGirl LLC, filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Tex. Case No. 20-32981) on June 9, 2020, disclosing under $1
million in both assets and liabilities. Judge Christopher M. Lopez
oversees the case. The Debtor is represented by the Law Office of
Margaret M. McClure; and Mueller Pye & Associates CPA, LLC as an
accountant to the Debtor.
PLANTRONICS INC: S&P Alters Outlook to Stable, Affirms 'B' ICR
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S&P Global Ratings revised its outlook on U.S.-based provider of
communications and collaboration devices Plantronics Inc. (Poly) to
stable from negative and affirmed its 'B+' issuer credit rating.
S&P affirmed its 'B+' ratings on the company's senior secured
credit facilities. S&P also assigned a 'B' rating to a proposed
$500 million of senior unsecured notes being used to fully repay
the existing notes of about $480 million outstanding.
S&P said, "The stable outlook reflects our expectation that Poly
will experience at least mid-single-digit-percent revenue growth in
fiscal 2022 and maintain EBITDA margins in the mid-teen-percent
area, driven by demand tailwinds for video and headset products. In
addition to lower restructuring costs and term loan prepayments, we
expect this to result in leverage decreasing toward the 5x area and
FOCF to debt increasing to about 10% in fiscal 2022.
Return to revenue growth and debt reductions should help Poly
reduce leverage below 6x in fiscal 2022. The rating action reflects
our view that persistent hybrid working environments should
continue to drive near-term demand for video and headset devices
that support remote collaboration, which should exceed reduced
demand for desktop phones and audio conferencing products. S&P
said, "We expect this to lead to at least mid-single-digit-percent
revenue growth in fiscal 2022 as Poly increases its production
capacity to meet the strong demand that led to record backlog
levels at end of the fiscal quarter ending Dec. 26, 2020. We also
expect stable EBITDA margins in the mid-teen-percent area as
operating leverage gains from higher volumes are partly offset by
airfreight costs. In addition to the company's current focus on
debt reduction, this EBITDA growth should support a reduction in
leverage toward the 5x area and improvement in FOCF to debt to the
10% area. Although leverage remains somewhat high, we view the FOCF
generation favorably given the company's current focus on debt
reduction."
S&P said, "Our adjusted figures include our standard adjustments
for operating leases and stock-based compensation. We adjust EBITDA
for the impact of purchase accounting on acquired deferred revenues
and noncash restructuring expenses related to impairments.
"We expect ongoing operational improvements to help support the
company's competitiveness when current demand tailwinds normalize.
Following the hiring of a new CEO in September 2020 and other more
recent managerial hires, we expect Poly to continue taking actions
to improve its operations and strategic positioning, including
optimizing its supply chain, improving distributor and partner
relationships, and investing in an e-commerce sales model. This
follows good execution over the last few quarters to increase
production capacity and launch significant products this month to
better align the portfolio to a remote working and learning
environment. Therefore, we believe Polycom integration issues
should be less of a headwind going forward. We also believe these
action will help improve Poly's long-term competitive position
after the current market tailwinds normalize and support
longer-term revenue growth, albeit at a lower rate than in fiscal
2022.
"Good FOCF generation supported by modest capital expenditures
(capex) and decreasing interest payments. We expect FOCF to
increase to $150 million-$170 million in fiscal 2022 from $100
million-$110 million in fiscal 2021 driven by EBITDA growth, but
also supported by relatively modest capex of about $25 million due
to the outsourcing of some manufacturing. Furthermore, as we expect
Poly to continue paying down its term loan, cash interest should
steadily decrease. We view these debt reductions positively and in
line with the company's previously stated target of reducing
reported net leverage to 3x.
"The stable outlook reflects our expectation that Poly will
experience at least mid-single-digit-percent revenue growth in
fiscal 2022 and maintain EBITDA margins in the mid-teen-percent
area driven by improved production capacity and continued demand
tailwinds for video and headset products to support hybrid working
environments. In addition to lower restructuring costs and term
loan prepayments, we expect this to result in leverage decreasing
toward the 5x area and FOCF to debt increasing to about 10% in
fiscal 2022."
S&P could lower its rating if:
-- Poly faces operational or sales execution challenges, a weaker
demand environment, or increased competition such that there is a
sustained revenue decline; or
-- Prolonged greater-than-expected restructuring or freight costs
results in EBITDA margins being maintained below 15%; or
-- Leverage remains above 6x or FOCF to debt falls to the
mid-single-digit-percent area on a sustained basis, which could be
due to a reduced pace of debt reduction; or
-- Poly's liquidity position weakens significantly because of
weaker FOCF generation or an inability to address tightening
covenant headroom, resulting in reduced availability of the
revolving credit facility (RCF).
Although unlikely over the next 12 months, S&P could raise its
rating if:
-- Poly successfully manages its operations, sales execution, and
product portfolio such that it is able to support consistent
mid-single-digit-percent revenue growth and EBITDA margins above
15%; and
-- The company reduces leverage below 4.5x, while maintaining FOCF
to debt well above 10%.
POST HOLDINGS: S&P Rates New $1.8BB Senior Unsecured Notes 'B+'
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S&P Global Ratings assigned its issue-level rating and '3' recovery
rating to Post Holdings Inc.'s proposed $1.8 billion senior
unsecured notes due 2031. The '3' recovery rating indicates our
expectation for meaningful (50%-70%; rounded estimate: 55%)
recovery in the event of a payment default.
Post plans to use the proceeds from this issuance to redeem its
existing $1.7 billion 5% senior notes maturing in 2026 and pay fees
and expenses. S&P said, "The company intends to use any remaining
proceeds for general corporate purposes, which we believe will
include future acquisitions or shareholder returns. We will
withdraw our ratings on the existing notes once they are fully
repaid. Our ratings on the notes are based on preliminary terms and
are subject to review upon the receipt of final documentation."
S&P said, "All of our other ratings on the company, including our
'B+' issuer credit rating, are unaffected by this transaction,
which we expect will be net leverage neutral. Despite the continued
operating weakness in Post's food service segment due to the
pandemic, we expect it to maintain leverage in the 5x-6x range when
factoring in its active acquisition strategy. The company retains
majority ownership stakes in BellRing Brands and 8th Avenue Food &
Provisions, which it could use as an additional source of liquidity
by selling down some of its ownership. Most recently, Post
announced the launch of its corporate-sponsored special-purpose
acquisition company (SPAC) through a newly created wholly-owned
subsidiary Post Holdings Partnering Corp. (PHPC). We believe the
approach is consistent with the company's holding-company strategy
whereby it buys and sells assets on a regular basis."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- Post is the issuer of all of the company's debt
Following this transaction, the company's debt structure will
comprise:
-- A $750 million revolving credit facility due 2025;
-- $1.5 billion 5.75% senior unsecured notes due 2027;
-- $1 billion 5.625% senior unsecured notes due 2028;
-- $750 million 5.5% senior unsecured notes due 2029;
-- $1.65 billion 4.625% senior unsecured notes due 2030; and
-- $1.8 billion proposed senior unsecured notes.
-- The revolving credit facility is unconditionally guaranteed by
Post's existing and subsequently acquired direct and indirect
domestic subsidiaries and is secured by a security interest in
substantially all of it and its subsidiary guarantors' assets,
including certain material real property.
-- The notes are fully and unconditionally guaranteed on a senior
unsecured basis by the company's existing and future domestic
subsidiaries. The company's foreign subsidiaries do not guarantee
the notes and account for less than 15% of its sales.
-- Post is incorporated and headquartered in the U.S. In the event
of an insolvency proceeding, S&P anticipates that the company would
file for bankruptcy protection under the auspices of the U.S.
federal bankruptcy court system and would not likely involve other
foreign jurisdictions.
Simulated default assumptions
-- S&P's simulated default scenario assumes Post's liquidity is
strained by weak sales and profitability. This could occur because
of heightened competitive pressures, higher commodity costs, and an
increased consumer preference for other products or a major product
recall. These factors hamper the company's margins and cash flow
and render it unable to meet its fixed charges.
-- Year of default: 2025
-- EBITDA at emergence: $693 million
-- Emergence enterprise value multiple: 7x
-- The emergence-level EBITDA incorporates a 35% operational
adjustment (to reflect some recoupment of sales volume and
cost-cutting efforts that improve margins) on top of the
default-level EBITDA. S&P said, "The default EBITDA roughly
reflects fixed-charge requirements of about $366 million in
interest costs (we assume a higher rate because of the default and
include prepetition interest) and $147 million in minimal capital
expenditures assumed at default. We estimate a gross valuation of
$4.9 billion assuming a 7x EBITDA multiple. This multiple is in the
same range as the multiples we use for some of the company's
peers."
Simplified waterfall
-- Gross recovery value: $4.9 billion
-- Net recovery value for waterfall after administrative expenses
(5%): $4.6 billion
-- Obligor/nonobligor valuation split: 85%/15%
-- Collateral value available to secured debt: $3.9 billion
-- Estimated senior secured claims: $661 million
--Recovery expectations for senior secured debt: 90%-100%
(rounded estimate: 95%)
-- Remaining value to unsecured claims: $3.9 billion
-- Estimated unsecured debt claims: $6.6 billion
--Recovery expectations for senior unsecured debt: 50%-70%
(rounded estimate: 55%)
Note: All debt amounts include six months of prepetition interest.
PROJECT RUBY: S&P Assigns 'B' Rating on $1.125BB First-Lien Debt
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S&P Global Ratings assigned its 'B' issue-level rating and '2'
recovery rating to Project Ruby Parent Corp.'s (dba Wellsky)
proposed $110 million first-lien revolving credit facility due 2026
and $1.125 billion first-lien term loan due 2028. The '2' recovery
rating indicates its expectation for substantial (70%-90%; rounded
estimate: 70%) recovery in the event of a payment default. The
company is also proposing to issue a new $405 million second-lien
term loan due 2029. This debt will be unrated. The debt will be
issued by Project Ruby's subsidiary, Project Ruby Ultimate Parent.
S&P said, "Our 'B-' issuer credit rating on the company remains
unchanged. The stable outlook reflects our expectation that
Wellsky's customer renewal rates will remain strong while its
organic revenue increases by the high-single-digit percent area. We
also expect the company's EBITDA margin to improve to the mid-30%
range in 2022, which will enable it to generate positive free
operating cash flow (FOCF) despite its high leverage. We also
anticipate that it will successfully integrate its recent
acquisition, CarePort, with Wellsky."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- Project Ruby's capital structure, pro forma for the completion
of the pending refinancing, comprises a $110 million revolver
maturing in 2026, a $1.125 billion first-lien term loan maturing in
2028, and a $405 million second-lien term loan maturing in 2029.
-- S&P continues to value the company as a going concern using a
6.5x multiple of its projected emergence EBITDA.
-- This valuation multiple is consistent with the multiples S&P
uses for similar smaller software companies operating in the health
care information technology (IT) industry.
-- S&P's simulated default scenario assumes a default occurring in
2023 due to increased competition, a failure to retain customers,
and service disruptions.
Simulated default assumptions
-- Simulated year of default: 2023
-- Emergence EBITDA: $149 million
-- Multiple: 6.5x
-- Jurisdiction: U.S.
Simplified waterfall
-- Gross enterprise value: $969 million
-- Net recovery value for waterfall after admin. expenses (5%):
$921 million
-- Obligor/nonobligor valuation split: 98%/2%
-- Estimated priority claims: $0
-- Estimated first-lien claim: $1.233 billion
-- Value available for first-lien claim: $914 million
--Recovery expectations: 70%-90% (rounded estimate: 70%)
-- Estimated second-lien claim: $424 million
-- Value available for second-lien claim: $0
--Recovery expectations: 0%-10% (rounded estimate: 0%)
PURDUE PHARMA: Seeks to Extend Plan Exclusivity Until March 1
-------------------------------------------------------------
Debtors Purdue Pharma LP and its affiliates request the U.S.
Bankruptcy Court for the Southern District of New York to extend
the exclusive periods during which the Debtors may file a Chapter
11 plan of reorganization through and including March 1, 2021.
The Debtors' previously requested 67-day extension of the Exclusive
Filing Period was sought, among other things, to facilitate
completion of the ongoing mediation of two remaining key issues,
the resolution of which are critical to the formulation of a Plan:
(1) the resolution of potential claims or causes of action that may
be asserted by the Debtors and others against the Sackler families
and associated entities; and
(2) the precise structure and governance of the successor entity to
which the Debtors' assets will be transferred upon the
effectiveness of the Plan.
Though the mediation has resulted in important progress on both
issues, material points remain the subject of intense ongoing
negotiations and it is not yet knowable whether and to what extent
agreement will ultimately be reached.
The Debtors will be filing a Plan in the very near future with the
goal of ensuring that the greatest value possible is distributed to
creditors to be put to work abating the opioid crisis. Filing a
Plan prematurely, however, would likely disrupt and derail
negotiations among key parties with respect to billions of dollars
of estate claims and other matters central to the formulation of
the Plan. The Debtors have continued to make timely payments on
account of their undisputed post-petition obligations.
The Debtors and their major creditor constituencies have invested
an incredible amount of time and effort—at a substantial cost to
the Debtors' estates—in the carefully negotiated agreements
reached to date.
The Debtors thus believe that a brief further extension of the
Exclusive Filing Period at this time is necessary to allow
productive discussions to continue in the hope that consensual
resolutions in the best interest of their estates can be reached.
Also, the Debtors are seeking an extension of the Exclusive Filing
Period in order to attempt to resolve the handful of material
issues that remain after the extensive work done to date as
expeditiously as possible and file a Plan.
The Ad Hoc Committee, the Multi-State Governmental Entities Group,
and the Creditors' Committee support the relief sought herein. The
Non-Consenting State Group has informed the Debtors that it does
not object to the Limited Extension.
The Debtors are in the midst of serious and productive discussions
with key constituencies with the goal of putting forth a
value-maximizing Plan with as broad creditor support as feasible.
A copy of the Debtors' Motion to extend is available from
primeclerk.com at https://bit.ly/37kD4Fh at no extra charge.
About Purdue Pharma LP
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers, and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities, and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation. The Debtors' consolidated
balance sheet as of August 31, 2019, showed $1.972 billion in
assets and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors
tapped Davis Polk & Wardwell LLP and Dechert LLP as legal counsel;
PJT Partners as investment banker; AlixPartners as financial
advisor; and Prime Clerk LLC as claims agent.
Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the
official committee of unsecured creditors appointed in Debtors'
bankruptcy cases.
David M. Klauder, Esq., was appointed as fee examiner. The fee
examiner is represented by Bielli & Klauder, LLC.
QUIKRETE HOLDINGS: S&P Places 'BB-' ICR on CreditWatch Developing
-----------------------------------------------------------------
S&P Global Ratings placed all its ratings on Quikrete Holdings
Inc., including its 'BB-' issuer credit rating, on CreditWatch with
developing implications.
The CreditWatch placement follows Quikrete's announcement that it
will acquire all outstanding shares of Forterra Inc. for $24 per
share for total consideration of $2.74 billion, including all of
Forterra's outstanding reported debt (about $960 billion as of
Sept. 30, 2020). S&P expects to receive more information in the
near term that could provide clarity on a potential rating action
upon close of the transaction.
At this point, Quikrete is primarily debt-funding the purchase of a
company with a lower credit rating, which could lead to a lower
rating. S&P said, "However, we expect the issuer credit rating on
Quikrete could change in either direction due to potential changes
in the pro forma company's asset base, business mix (including end
markets' exposure), and resulting capital structure. We anticipate
asset divestitures could occur as part of the regulatory approval
process because Quikrete could be required to divest parts of its
portfolio given overlapping capabilities with Forterra. At this
time, we also do not have details on the combined company's capital
structure, which could be influenced by potential debt reduction
from asset sales. The company expects Wells Fargo to provide debt
financing for the transaction, which could strain pro forma credit
metrics. Furthermore, at this point, we are unsure of the structure
of a future infrastructure bill, and what it may provide in regard
to the material underpinnings of the combined entity's product
demand."
By S&P Global Ratings' calculation, both Quikrete and Forterra have
each demonstrated improved credit metrics leading into 2021 due to
infrastructure being deemed essential work and strong residential
housing market growth specifically in suburban areas. S&P revised
its rating outlook on Quikrete to positive from stable in December
2020. In addition, we upgraded the S&P rating on Forterra in
October 2020.
RENFRO CORP: S&P Upgrades ICR to 'CCC-', Outlook Negative
---------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
sock manufacturer Renfro Corp. to 'CCC-' from 'SD' (selective
default), its issue-level rating on its term loan to 'CC' from 'D',
and its issue-level rating on the priming term loan to 'CCC+' from
'D'. S&P also assigned its 'CCC+' issue-level rating and '1'
recovery rating to the company's new $10 million super priming term
loan.
Renfro recently completed a transaction wherein it issued a new $10
million super priming term loan facility, including $5 million of
new money in the form of a delayed draw term loan, that is
currently undrawn and a $5 million roll-up from the original term
loan into the new super priming term loan. The transaction provided
the company with additional liquidity to help support its
operations through the following months. Although 100% of Renfro's
lenders approved the transaction, we viewed it as tantamount to a
default on the existing term loan because the existing term loan is
now in a junior collateral position relative to the newly issued
tranche and the company's credit metrics are depressed. Renfro's
credit agreements previously required it to provide annual audited
financial statements without a going-concern qualification. This
transaction extended its waiver of this requirement through June
14, 2021. S&P continues to believe that the company will file its
audited financial statements for the fiscal year ended January
2021, at which point it will remain in compliance with the
going-concern covenant in its credit agreements because of the
receipt of the waiver as part of the transaction.
S&P said, "We still view Renfro's capital structure as
unsustainable. The company's unrated asset-based lending (ABL)
revolving credit facility matures in May 2021 and its $220 million
term loan ($135 million currently outstanding), $20 million priming
term loan, and $10 million super priming term loan mature shortly
afterward on June 14, 2021. Moreover, we expect Renfro's leverage
to remain very high due, in part, to its rapid accumulation of PIK
debt obligations. The company's $10 million super priming term loan
and $20 million priming term loan accrue PIK interest at a rate of
LIBOR plus 9% and the $220 million term loan accrues PIK interest
at a rate of LIBOR plus 5.5%. Both the principal and interest on
these obligations accrete rapidly, which will add to Renfro's
substantial leverage. We believe the company may not be able to
refinance its debt at reasonable terms before it matures due to its
very high leverage, weak operating underperformance, negative free
cash flow generation, tight covenant cushion, and the uncertainty
created by the COVID-19 pandemic. Therefore, we consider a default
or restructuring to be highly likely in the next six months absent
significantly favorable changes in Renfro's circumstances."
The negative outlook reflects the high probability that Renfro will
default on its debt obligations or engage in a restructuring
transaction over the next six months.
S&P said, "We could lower our rating on Renfro if it announces a
debt restructuring whereby its debtholders receive less than they
were originally promised or it files for bankruptcy protection.
"We could raise the rating on Renfro if we no longer believe there
is a high probability of a near-term default, distressed exchange,
or other form of debt restructuring. This would likely require the
company to successfully refinance both its ABL revolver and term
loan facilities on satisfactory terms."
ROBERT F. TAMBONE: $750K Private Sale of Jupiter Property Approved
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Judge Janet E. Bostwick of the U.S. Bankruptcy Court for the
District of Massachusetts authorized Robert F. Tambone's 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.
The sale is free and clear of liens.
The Debtor will by March 2, 2021, file a proposed order and submit
the order in Word format by email to jeb@mab.uscourts.gov.
Robert F. Tambone sought Chapter 11 protection (Bankr. D. Mass.
Case No. 20-11378) on June 22, 2020. The Debtor tapped Kathleen
Cruickshank, Esq.,
ROGER LEE HARMON: Stromberger Buying Chase County Assets for $1.2M
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Roger Lee Harmon asks the U.S. Bankruptcy Court for the District of
Nebraska to authorize the sale to Bart Stromberger for $1.2 million
of the following:
(i) his real property described as Township 6 North, Range 41
West of the 6th P.M., Chase County, Nebraska, Section 12: E1/2; and
(ii) his equipment comprised of two Renke pivots, two electric
motors, two control panels, two liquid fertilizer tanks,
underground wiring and wells.
The Objection Deadline is March 15, 2021.
The sale will be free and clear of all liens, taxes and
encumbrances.
The Debtor and the Buyer have entered into an Agreement for the
sale of the Property. The Debtor asks that he be allowed to
complete the terms of the Agreement; sell and convey the Property
to the Purchaser as provided in the Agreement; have the closing
agent pay: first closing costs, second pay all real estate,
personal property and occupational taxes related to the Property,
pay all of the remaining balance to the Secured Creditor, Rabo
Agrifinance, Inc., now known as Rabo Agrifinance, LLC, to be
applied to the indebtedness owed to such Secured Creditor by the
Debtor: first to accrued interest at the rate of 6% per annum as
provided for in the Plan and second to principal; and convey title
to the Property to the Purchaser by Warranty Deed and Bill of Sale
free and clear of all liens, taxes and encumbrances.
The Purchaser may have relationship directly with the Case as he is
one of the owners of Stromberger & Sons Partnership, a Tenant of
the Debtor and a Creditor of the Debtor.
The Debtor does not expect any tax consequences to arise from the
sale based upon the advice of his certified public accountant as
there is no anticipated gain nor net taxable income arising from
the sale.
While the proposed sale is substantial such sale does not encompass
all or substantially all of the assets of the Estate.
The proceeds of sale will be used to benefit Class 1, Rabo
Agrifinance, Inc. as set forth.
The extent of the Debtor's liabilities is set forth on the Debtor's
Schedules, which totaled $10,996,434 at the Petition date.
The estimated net value of any of the remaining assets not subject
to the proposed sale based upon the Debtor's Schedules is
$6,252,867 ($12,652,867 - $5.2 million - $1.2 million).
The business justification for disposing of these assets is to
comply with the terms of the confirmed Plan.
A copy of the Agreement is available at
https://tinyurl.com/3gejegal from PacerMonitor.com free of charge.
Roger Lee Harmon sought Chapter 11 protection (Bankr. D. Neb. Case
No. 19-40903) on May 24, 2019. The Debtor tapped Wayne E. Griffin,
Esq., at Wayne E. Griffin Law Office.
ROYAL FLUSH 89: Trucking Companies File for Chapter 7 Bankruptcy
----------------------------------------------------------------
Clarissa Hawes of Freightwaves reports that the owner of two
defunct California trucking companies filed for Chapter 7
bankruptcy on Wednesday, February 24, 2021.
This action comes after three breach-of-contract judgments
amounting to over $317,000 were entered against Royal Flush 89
Transport and its owner, Getsemani Cuevas of Riverside,
California.
In its filing with the U.S. Bankruptcy Court for the Central
District of California, Royal Flush maintains that no funds will be
available for unsecured creditors once it pays administrative
fees.
Among the company's list of unsecured creditors, which are last in
line for payment, are Pearl Beta Funding, owed nearly $172,000,
Mantis Funding, owed $113,500, and Comdata Inc., owed nearly
$32,200. Mr. Cuevas was ordered to pay the companies in the
breach-of-contract lawsuits.
Trucking companies Sierra Mountain Express Inc. of Orlando,
Florida, is owed nearly $4,900, and H & S Car Carriers of Nahunta,
Georgia, is owed $2,600, according to the petition.
Mr. Cuevas, who also owned Cuevas Transport, filed a personal
Chapter 7 bankruptcy petition, listing assets of up to $50,000 and
his liabilities of between $1 million and $10 million. In the
filing, he lists the IRS as owed $19,500 in back taxes and the U.S.
Treasury as owed more than $26,000. Both are listed as having
priority unsecured claims against Cuevas.
He also cites the legal judgments against Royal Flush and other
company debts in his personal filing. The personal bankruptcy
filing includes Cuevas Transport.
Royal Flush had 12 power units and 11 drivers, according to the
Federal Motor Carrier Safety Administration SAFER website. The
carrier’s authority was revoked in December 2018 after its
insurance was canceled.
His intrastate carrier, Cuevas Transport, had four power units and
eight drivers before shutting its doors.
A creditor's meeting is scheduled for March 30, 2021.
About Royal Flush 89 Transport Inc.
Royal Flush 89 Transport, Inc. is a licensed and bonded freight
shipping and trucking company running freight hauling business from
Riverside, California.
Royal Flush 89 Transport is owned by Getsemani Cuevas, who also
owns Cuevas Transport.
Royal Flush 89 Transport Inc. filed a Chapter 7 bankruptcy petition
(Bankr. C.D. Cal. Case No. 21-10905) on Feb. 24, 2021. Royal Flush
lists assets of up to $50,000 and liabilities of between $500,000
and $1 million.
Getsemani Cuevas Cuevas filed his own Chapter 7 petition (Bankr.
C.D. Cal. Case No. 21-10904) on Feb. 24, 2021. He listed assets of
up to $50,000 and his liabilities of between $1 million and $10
million. In the filing, he lists the IRS as owed $19,500 in back
taxes and the U.S. Treasury as owed more than $26,000.
The Debtors' counsel:
Michael Smith
Shioda, Langley And Chang, LLP
Tel: 951-383-3388
E-mail: mike@slclawoffice.com
RSG INDUSTRIES: To Seek Plan Confirmation on April 13
-----------------------------------------------------
Judge Scott M. Grossman on Feb. 26, 2021, entered an order
approving RSG Industries Corp.'s First Amended Disclosure
Statement, and setting a hearing for April 13, 2021, at 9:30 a.m.
to consider confirmation of the Debtor's First Amended Plan.
March 30, 2021, is the deadline for objections to plan confirmation
and for ballots accepting or rejecting the Plan. April 8, 2021, is
the Debtor's deadline to file a report and confirmation affidavit.
A copy of the First Amended Disclosure Statement dated Feb. 24,
2021, https://bit.ly/2ZXCucn
About RSG Industries Corp.
RSG Industries Corp. is in the business of repairing and selling
used automobiles. It said that a move to a smaller location, at
1500 West Copans Road, Pompano Beach Florida, resulted to lower
sales.
RSG Industries Corp. sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-19238) on Aug.
26, 2020, listing under $1 million in both assets and liabilities.
Judge Scott M. Grossman oversees the case. Chad Van Horn, Esq., at
Van Horn Law Group, P.A., is the Debtor's legal counsel.
RSG INDUSTRIES: Unsecured Creditors to Recover 2% in Plan
---------------------------------------------------------
RSG Industries Corp., d/b/a MB Automotive Corp, on Feb. 24, 2021,
filed a First Amended Disclosure Statement in support of its Plan
of Reorganization.
On Jan. 1, 2020, through Aug. 26, 2020 (the date of filing), the
Debtor reflected a net loss of ($43,000) on sales of $365,000. The
average gross per month was $46,000, and average loss of $5,402.50
per month.
The Debtor anticipates, based upon its current rate of gross
revenue and expenses (as adjusted), and as shown in the proposed
MOR Budget History & Projections, the Debtor will be able to pay
back its only secured creditor, TD Bank, over 60 months (Class 1).
The Debtor anticipates net profits averaging $1387 per month over 5
years or $16,647 per year available to fund a plan, for which the
Debtor needs $13,316 annually.
The Plan stated only three classes of claims:
* Class 1 - TD Bank (secured): $25,386
* Class 2 - IRS (Priority $3.37
* Class 3 - General Unsecured Claims: $256,372
* Admin. - Van Horn Law Group (capped): $40,000
The aggregate total amount of allowed claims included in Class 3is
$256,372. The allowed unsecured claimants will receive a
distribution of 2 percent. The class will receive total plan
payments of $5,060, in the form of 20 quarterly plan payments of
$253.
Attorney for the Debtor:
Chad Van Horn, Esq.
Florida Bar No. 64500
Van Horn Law Group, P.A.
330 N. Andrews Ave., Suite 450
Fort Lauderdale, Florida 33301
Telephone: (954) 765-3166
Facsimile: (954) 756-7103
Email: Chad@cvhlawgroup.com
A copy of the Disclosure Statement is available at
https://bit.ly/3qZwTOM from PacerMonitor.com.
About RSG Industries Corp.
RSG Industries Corp. is in the business of repairing and selling
used automobiles. It said that a move to a smaller location, at
1500 West Copans Road, Pompano Beach Florida, resulted to lower
sales.
RSG Industries Corp. sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-19238) on Aug.
26, 2020, listing under $1 million in both assets and liabilities.
Judge Scott M. Grossman oversees the case. Chad Van Horn, Esq., at
Van Horn Law Group, P.A., is the Debtor's legal counsel.
SEZIKEYE FINANCIAL: Gets Court Approval to Hire Real Estate Agent
-----------------------------------------------------------------
Sezikeye Financial Investment, LLC, received approval from the U.S.
Bankruptcy Court for the District of Maryland to hire Kris Ghimire,
a real estate agent at Ghimire Homes.
The Debtor needs the services of a real estate agent to market for
sale four real properties located at:
(1) 2212 Park Ave., Baltimore, Md.
(2) 1809 Park Ave., Baltimore, Md.
(3) 1802 Madison Ave., Baltimore, Md.
(4) 517 W 28th St., Baltimore, Md.
Mr. Ghimire will receive a 2.5 percent commission on the sale price
and a $500 flat fee.
As disclosed in court filings, Mr. Ghimire does not have interest
adverse to the Debtor and its bankruptcy estate.
Mr. Ghimire holds office at:
Kris Ghimire
Ghimire Homes
8030 Belair Road, Suite 100
Nottingham, MD 21236
Office: (410) 497-5238
Cell: (443) 858-1491
Email: kris@ghimirehomes.com
About Sezikeye Financial Investment
Sezikeye Financial Investment sought Chapter 11 protection (Bankr.
D. Md. Case No. 20-20529) on Dec. 2, 2020, disclosing $500,001 to
$1 million in both assets and liabilities. Judge Michelle M.
Harner oversees the case. The Law Offices Robert M. Stahl, LLC, is
the Debtor's legal counsel.
SHARPER HEARING: Court Confirms Plan; Unsecureds Get 24%
--------------------------------------------------------
Judge Henry W. Van Eck has entered an order confirming the Amended
Plan of Reorganization of Sharper Hearing Aid Center, Inc.
With the Amended Plan of Reorganization filed on January 11, 2021
having been transmitted to creditors and required parties in
interest, and it having been determined after notice and a hearing
that the requirements for confirmation of the plan have been
satisfied, Judge Van Eck confirmed the Plan.
Under the Plan, non-priority unsecured creditors holding allowed
claims will receive distributions, which the proponent of the Plan
has valued at approximately 24 cents on the dollar. Plan payments
to non-priority unsecured creditors shall commence 12 months from
the Plan confirmation date due to uncertainty with the COVID-19
pandemic. This Plan also provides for the payment of
administrative, secured, and priority claims. The Plan is a
nonconsensual Plan
A copy of the Amended Plan dated Jan. 11, 2021, is available at
https://bit.ly/3aZ1Pc8
About Sharper Hearing Aid Center
Sharper Hearing Aid Center, Inc., opened for business in August
2010. Over the ensuing years, it expanded to 14 locations in
Central Pennsylvania and Maryland. The business is a dispensing
agent primarily for Beltone Hearing Aids. Not only do patients
come to the various locations to have hearing aids tested and
fitted, but a significant amount of business is attending to
patients in retirement homes and rehabilitation facilities.
Sharper Hearing Aid Center filed a Chapter 11 bankruptcy petition
(Bankr. M.D. Pa. Case No. 1:20-bk-02363) on Aug. 5, 2020. The
Debtor hired the Law Offices of Craig A. Diehl, as counsel.
SIMPLE SITEWORK: Court Rejects Plan and Disclosures
---------------------------------------------------
Judge Jeffrey P. Norman on Feb. 26, 2021, entered an order denying
Simple Sitework, Inc.'s Disclosure Statement and Plan.
The Court gave the Debtor 14 days to file an amended Disclosure
Statement and Chapter 11 Plan.
"The Debtor has filed a disclosure statement and plan under Chapter
11 of the Bankruptcy Code on Feb. 24, 2021. After review and
consideration, the Court notes that the debtor's ability to
discharge indebtedness under a Chapter 11 Plan is dependent on the
proposed liquidation analysis. The disclosure statement must
provide adequate information which is defined as information of a
kind, and in sufficient detail, as far as is reasonably practicable
in light of the nature and history of the debtor and the condition
of the debtor's books and records, including a discussion of the
potential material federal tax consequences of the plan to the
debtor, any successor to the debtor, and a hypothetical investor
typical of the holders of claims or interests in the case, that
would enable such a hypothetical investor of the relevant class to
make an informed judgment about the plan. The liquidation analysis
attached to the disclosure statement does not show that the general
unsecured creditors will receive at least as much as they would
receive if the debtor were liquidated under a chapter 7 as required
for confirmation by 11 U.S.C. Sec. 1129(a)(7). As such, the plan
is also deficient," Judge Norman ruled.
About Simple Sitework
Simple Sitework, Inc., is a locally owned and operated company
providing residential and commercial sitework throughout Southeast
Texas.
Simple Sitework filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-34508) on
Sept. 11, 2020. Judge Jeffrey P. Norman oversees the case.
Margaret M. McClure, Esq., is the Debtor's bankruptcy counsel.
SIMPLE SITEWORK: Unsecureds to Get Share of Net Profit for 5 Years
------------------------------------------------------------------
Simple Sitework, Inc., filed a Chapter 11 Plan of Reorganization
and a Disclosure Statement on Feb. 24, 2021.
After the effective date of the order confirming the Plan, the
Debtor will continue to operate the company. Payments and
distributions under the Plan will be funded by future income from
the operations of the company.
Under the Plan, Class 3(b) Secured Lender Creditors will be paid as
follows:
* Third Coast Bank, SSB, has filed three secured claims. It
filed a claim for a commercial loan in the amount of $2,559,532, a
PPP loan in the amount of $391,000.00 and a truck loan on a 2018
Ford F150 in the amount of $29,398. The payment on the commercial
loan will be $27148.00 per month for 120 months after deducting the
adequate protection payments, with the first monthly payment being
due and payable on the 15th day of the first full calendar month
following 60 days after the effective date of the plan. The PPP
loan is in the process of being forgiven, so there will be no plan
payments allocated to this loan. The truck payment is $707.00 per
month.
* Wells Fargo Equipment Finance, Inc., has filed a secured claim
in the amount of $114,983 for a Sakai Model SV544T Pad Foot Roller,
although the Debtor believes that only $102,983 was due on the
petition date. The payment on this claim will be $1,907 per month
for 60 months after deducting the adequate protection payments,
with the first monthly payment being due and payable on the 15th
day of the first full calendar month following 60 days after the
effective date of the plan.
* IPFS Corporation filed a secured claim for financing the
Debtor's insurance policies in the amount of $9,722. The Debtor
will continue making its payments on the insurance policies being
financed by IPFS Corporation.
* Caterpillar Financial Services Corporation filed a secured
claim in the amount of $792,983. The parties will extend the lease
by agreement on the Dozer D4k2 2019 KR207359 to 60 months and the
Debtor will pay $2,169 per month under the Dozer lease. The first
monthly payment is due and payable on the 15th day of the first
full calendar month following 60 days after the effective date of
the plan.
* Del Lage Landen Financial Services, Inc., is a secured
creditor on three pieces of equipment. The payment on the 2019 Ford
F750 will be $1,254.00 per month for 60 months with the first
monthly payment being due and payable on the 15th day of the first
full calendar month following 60 days after the effective date of
the plan.
* US Bank Equipment Financial is a secured creditor on a 2011
Ford F350 in the approximate amount of $23,832. The payment on
this claim will be $549.82 per month with the first monthly payment
being due and payable on the 15th day of the first full calendar
month following 60 days after the effective date of the plan.
General Unsecured Claims will be paid as much of what they are owed
as possible. Each year, if the Reorganized Debtor made a profit,
after income taxes, and after making all priority and secured plan
payments and normal overhead payments, the Reorganized Debtor shall
pay to the allowed unsecured creditors their pro-rata share of 50%
of the net profit for the previous year, in twelve monthly payments
beginning on June 15th of the year in which the financial statement
is mailed to these creditors. Each year, during the term of the
five-year Plan, the Reorganized Debtor will repeat the 12-month
payment plan to the allowed unsecured creditors if the Reorganized
Debtor made a net profit the previous year as reflected in the
previous year's financial statement.
A copy of the Disclosure Statement is available at
https://bit.ly/3koGMmF from PacerMonitor.com.
About Simple Sitework
Simple Sitework, Inc., is a locally owned and operated company
providing residential and commercial site-work throughout Southeast
Texas.
Simple Sitework filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-34508) on
Sept. 11, 2020. Judge Jeffrey P. Norman oversees the case.
Margaret M. McClure, Esq., is the Debtor's bankruptcy counsel.
SKECHERS USA: Egan-Jones Lowers Senior Unsecured Ratings to BB+
---------------------------------------------------------------
Egan-Jones Ratings Company, on February 18, 2021, downgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Skechers USA Incorporated to BB+ from BBB-.
Headquartered in Manhattan Beach, California, Skechers U.S.A., Inc.
designs and markets branded contemporary casual, active, rugged,
and lifestyle footwear for men, women, and children.
SLIDEBELTS INC: Hearing Today on Further Cash Access
----------------------------------------------------
Judge Fredrick E. Clement of the U.S. Bankruptcy Court for the
Eastern District of California authorized SlideBelts, Inc. to use
cash collateral up to February 28, 2021.
Judge Clement continued the hearing on the Debtor's motion to use
cash collateral to March 1, 2021 at 1:30 p.m. "The debtor will not
have authority to use cash collateral past February 28, 2021 until
a cash collateral order is signed by the court," Judge Clement
said.
A full-text copy of the Order is available for free at
https://tinyurl.com/9z566f7p from PacerMonitor.com.
About SlideBelts Inc.
SlideBelts, Inc. is an El Dorado Hills, Calif.-based belt company
founded in 2004. Visit https://slidebelts.com for more
information.
SlideBelts sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Cal. Case No. 20-24098) on Aug. 25, 2020. At the
time of the filing, Debtor had estimated assets of between $1
million and $10 million and liabilities of between $1 million and
$10 million.
Judge Clement oversees the case.
Reynolds Law Corporation is Debtor's legal counsel.
SORROEIX INC: $3M Private Sale of Memphis Property to Asher Denied
------------------------------------------------------------------
Judge Jimmy L. Croom of the U.S. Bankruptcy Court for the Western
District of Tennessee denied with prejudice Sorroeix, Inc.'s
private sale of the tract or parcel of land, with such improvements
as are located thereon, described as Package of 65 homes, located
in Memphis, Shelby County, Tennessee, to Zoe Asher, LLC for
$3,011,750, pursuant to the offer letter dated Dec. 2, 2020.
The proposed sale of the property free and clear of all Liens is
denied without prejudice to the Debtor proposing an alternative
sale through a sale procedures motion to be filed no later than
Feb. 22, 2021.
About Sorroeix, Inc.
Sorroeix, Inc. sought Chapter 11 protection (Bankr. W.D. Tenn. Case
No. 20-11492) on Nov. 25, 2020. The case is assigned to Judge
Jimmy L. Croom.
The Debtor estimated assets in the range of $0 to $50,000 and $1
million to $10 million in debt.
The Debtor tapped Steven N. Douglas, Esq., at Harris Shelton, PLLC
as counsel.
The petition was signed by Matthew Jones, president/CEO.
SOURCE HOTEL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: The Source Hotel, LLC
6988 Beach Blvd, Suite B-215
Buena Park, CA 90621
Type of Business: The Source Hotel owns a four-star, full-service
Hilton Hotel development located in Buena Park,
California on the same property as The Source
Retail. This seven-story building will offer
178 guest rooms, banquet and conference space,
fitness, full-service restaurant, and a rooftop
pool. The Source Hotel will be operated by
Interstate Hotel & Resorts, the largest hotel
management company in the United States.
Chapter 11 Petition Date: February 26, 2021
Court: United States Bankruptcy Court
Central District of California
Case No.: 21-10525
Judge: Hon. Erithe A. Smith
Debtor's Counsel: Ron Bender, Esq.
LEVENE, NEALE, BENDER, YOO & BRILL L.L.P.
10250 Constellation Blvd., Suite 1700
Los Angeles, CA 90067
Tel: (310) 229-1234
E-mail: rb@lnbyb.com
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by Donald Chae, manager.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/SUGJJLQ/The_Source_Hotel_LLC__cacbke-21-10525__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Newgens, Inc. $413,601
14241 Foster Rd.
La Mirada, CA 90638
Ted Sul
Email: tedsul@newgens.com
2. Cabrillo Hoist $226,301
P.O. Box 3179
Rancho Cucamonga, CA 91729
Rachel Castro
Email: rcastro@cabrillohoist.com
3. Solid Construction Company, Inc. Vendor $112,512
883 Crenshaw Blvd.
Los Angeles, CA 90005
4. WESCO Distribution Inc. Vendor $108,209
6251 Knott Ave.
Buena Park, CA 90620
5. Harbor All Glass & Vendor $108,000
Mirror, Inc.
1926 Placentia Ave.
Costa Mesa, CA 92627
6. Diablo Consulting $84,625
13200 Crossroads
Parkway N
Ste. 115
City of Industry, CA 91746
Edward Riggs
7. Ace Tek Roofing Co. Vendor $76,968
747 S. Ardmore Ave., Suite 405
Los Angeles, CA 90005
8. Morrow Meadows $69,213
231 Benton Court
City of Industry, CA 91789
Briana Ochoa
Email: bochoa@morrow-meadows.com
9. Evergreen Electric Vendor $63,000
Construction Inc.
629 Grove View
LaneLa Canada, CA 91011
10. Chefs Toys $57,273
18430 Pacific Street
Fountain Valley, CA 92708
Steve Ruck
Email: stever@chefstoys.com
11. Stumbaugh & Associates, Inc. Vendor $33,000
3303 N. San Fernando Blvd
Burbank, CA 91504
12. HBA Procurement, Inc. Vendor $27,600
3216 Nebraska Ave.
Santa Monica, CA 90404
13. OJ Insulation LP $27,260
600 S Vincent Ave.
Azusa, CA 91702
Roger J Fujit
14. DKY Architects Vendor $20,835
15375 Barranca
Pkwy. Suite A-210
Irivne, CA 92618
15. Master Glass $19,200
2225 W. Pico Blvd.
Unit C
Los Angeles, CA 90006
Dooman Jun
Email: masterglass411@yahoo.com
16. Universal Flooring Systems $12,282
15573 Commerce Lane
Huntington Beach,CA 92649
Cecilia Dinh
Email: cdinh@universalflooring.com
17. L2 Specialties Vendor $10,440
3613 W. Macarthur Blvd., #611
Santa Ana, CA 92704
18. Ficcadenti Waggoner Vendor $8,800
16969 Von Karman Avenue
Suite 240
Irivne, CA 92606
19. Retrolock Corporation Vendor $6,594
17915 Railroad Street
City of Industry, CA 91748
20. American Engineering Vendor $6,525
Laboratories Inc.
PO Box 1816
Whittier, CA 90609
SRS DISTRIBUTION: S&P Alters Outlook to Stable, Affirms 'B' ICR
---------------------------------------------------------------
S&P Global Ratings revised the outlook to stable from negative and
affirmed its 'B' issuer credit rating on McKinney, Texas-based
roofing and building products distributor SRS Distribution Inc.
S&P said, "At the same time, we are affirming our 'B' issue-level
ratings on SRS's secured debt, with a '4' recovery rating
indicating our expectation for substantial (30%-50%; rounded
estimate 40%), and our 'CCC+' issue-level ratings on the unsecured
debt with a '6' recovery rating, indicating our expectation for
average (0% to 10%; rounded estimate 0%) recovery in the event of a
payment default.
"The stable outlook indicates our view that total leverage
(including leases) will be sustained below 6x with EBITDA interest
coverage above 3x for the next 12 months on the back of steady
demand for residential roofing products and exterior building
materials products.
"We expect the company to maintain solid cash flows over the next
12 months such that the S&P Global Ratings' adjusted debt leverage
is below 6x. We are now revising our prior forecast and believe SRS
will be able to maintain leverage below 6x for the next 12 months,
barring any debt-financed acquisitions or dividends. Our previous
forecast, we expected the company would end fiscal 2020 with
leverage in the 6x-6.5x range.
"However, we expect margins to face some downside pressure in 2021
from the rising input costs particularly from crude oil-based
products (as they are expected to rebound from the lows of 2020)
and overheads costs in the form of labor and freight. In our
opinion, the company's ability to pass through higher costs would
be instrumental for its operating performance and the resulting
credit metrics. Nonetheless, we expect the company to generate
adjusted EBITDA of roughly $400 million and adjusted EBITDA margins
of nearly 10.0% in 2021 (versus about 11.5% in fiscal 2020). SRS
has historically enjoyed higher-than-average EBITDA margins for a
building materials distributor largely because of its scale,
purchasing power, and the synergies it derives from its
acquisitions.
"We attribute the company's growth prospects to its robust
performance in the repair and remodeling markets. Out of SRS' total
sales, roughly 70% are tied to residential roofing, with 85% of
that being tied to repair and remodel sector of residential roofing
projects. Low mortgage rates and rising demand for more spacious
suburban homes are now combining with those recovery trends. We
believe that with new housing starts of 1.4 million and
low-single-digit growth in residential construction, SRS should see
stable metrics over the next 12 months. We expect the commercial
segment to be challenged as it makes a slower recovery, yet SRS'
commercial end markets equate to only about 15% of projected sales.
Additionally, the company benefits from increased investment in
outdoor living spaces and other complementary building products, a
segment which contributes roughly 15% of SRS' total revenue.
"We expect SRS will continue its strategy of expanding through
acquisitions and greenfield projects to increase its geographic
footprint and revenue base. SRS resumed its prior pace of
acquisitions—it acquired about 12 companies across the U.S. in
fiscal 2020 six so far in fiscal 2021, with cumulative spending of
about $236 million and $121 million, respectively. Consolidation
has continued within the roofing distribution industry. We estimate
the company is 3x larger than its next largest competitor and view
the remainder of the roofing industry as highly fragmented.
Therefore, we anticipate SRS will use most, if not all, of its free
cash flow for acquisitions and greenfield expansions. However, we
also expect some borrowings from its revolving facility for funding
purposes, which may cause spikes in the intra-year debt leverage.
We recognize SRS has a strong track record of using earnings growth
to deleverage following acquisitions, therefore we expect debt
leverage will stay about 6x.
"SRS' ownership by private-equity firm Leonard Green & Partners
L.P. and Berkshire Partners LLC remains a limiting factor on our
rating. We generally believe companies owned by financial sponsors
have more aggressive financial policies given the risk of large
cash distributions, increased debt, or leveraged buyouts. Although
the sponsors have not funded any debt-financed dividends since its
acquired SRS in May 2018, we cannot rule out the possibility that
it may choose to do so at a future date. SRS has a history of
operating with high debt leverage as it actively uses debt to
finance its acquisitions. This is evident from the fact that the
company, since the sponsor change, has completed about 27
acquisitions and continues to look for further opportunities.
"The stable outlook indicates our view that total leverage
(including leases) will remain lower than 6x with EBITDA interest
coverage above 3x for the next 12 months on the back of steady
demand for residential roofing products and exterior building
materials products."
S&P could lower its rating over the next 12 months if:
-- Lower-than-expected EBITDA margins of below 9% that would
result in adjusted leverage sustained above 6x or EBITDA interest
coverage below 2x;
-- The company undertakes an aggressive financial policy, such as
pursuing large debt-funded acquisitions or shareholder dividends,
causing adjusted leverage to stay above 6x, on a permanent
sustained basis
-- S&P could raise the rating over the next 12 months if the
company's EBITDA improves such that adjusted leverage, with a
commitment by the controlling financial sponsors, remains less than
4x.
STEPS IN HOME: Unsecured Creditors Will be Paid in Full in Plan
---------------------------------------------------------------
Steps in Home Care, Inc., filed an Amended Plan of Reorganization
and a corresponding Disclosure Statement.
General unsecured creditors are classified in Classes 1 and 2, and
will receive a distribution of 100% of their allowed claims to be
distributed as follows: class 1 creditors will be paid in full on
the effective date and class 2 creditors will receive monthly
payments in the amount of $39,107 until paid in full. Class 1
claim of American Express National Bank in the amount of $44.65 is
unimpaired while the Class 2 claim of Oak Banking Company in the
amount of $694,900 in connection with a PPP Loan is impaired.
The equity holders are unimpaired and will retain their interests.
Payments and distributions under the Plan will be funded from cash
on hand and future operations.
A copy of the Disclosure Statement dated Feb. 24, 2021, is
available at https://bit.ly/2NCBsjD
Attorneys for the Debtor:
LAWRENCE F. MORRISON
BRIAN J. HUFNAGEL
MORRISON TENENBAUM PLLC
87 Walker Street, Floor 2
New York, New York 10013
Telephone: (212) 620-0938
Facsimile: (646) 390-5095
About Steps in Home Care
Steps in Home Care Inc. is a home health care provider located at 3
Barker Avenue, 2nd Floor, White Plains, New York 10601. It was
founded in 2011 and it has offices in Garden City, New York and
Stamford, Connecticut. The company was owned by Jennifer Baukol
and sister Lisa Wade. It offers home companions, skilled nursing,
basic assistance and concierge services, like driving patients to
their appointments and managing their insurance claims.
On May 1, 2020, Steps in Home Care sought Chapter 11 protection
(Bankr. S.D.N.Y. Case No. 20-22615) on May 1, 2020. The Debtor was
estimated to have less than $50,000 in assets and liabilities.
Morrison Tenenbaum, PLLC, is the Debtor's counsel.
STEREOTAXIS INC: Announces Long-Term CEO Performance Stock Award
----------------------------------------------------------------
Stereotaxis Inc. announced a 10-year CEO performance stock award
for David Fischel with vesting entirely contingent upon the company
achieving billion-dollar market capitalization milestones.
David Fischel has served as unpaid CEO of Stereotaxis since
February 2017. Over his four-year tenure he has led the
revitalization of Stereotaxis' commercial capabilities,
strengthened its financial position, and led the development of a
robust innovation strategy. Shareholders have benefited
substantially, with Stereotaxis' stock appreciating approximately
10-fold during this period. The performance stock agreement is
designed to retain Mr. Fischel for the long term and align his
compensation with continued substantial shareholder returns.
Mr. Fischel's total cash compensation is now fixed at $60,000
annually. He will not be eligible for any additional cash or
time-vested equity or stock option awards. In place of competitive
cash or long-term incentives typically consisting of stock or stock
options, Mr. Fischel is granted, subject to shareholder approval,
performance stock awards consisting of 10 tranches of stock that
vest in 10 years only if Stereotaxis' market cap appreciates
substantially above its current value. To meet the first
milestone, Stereotaxis' market cap must increase to $1 billion.
Vesting of each of the remaining milestones is contingent upon
Stereotaxis' market capitalization continuing to increase in
additional $500 million increments. Thus, full vesting of the
award is contingent upon Stereotaxis' market cap increasing to $5.5
billion. The award is designed to provide Mr. Fischel with
approximately 10% equity ownership in Stereotaxis on a fully
diluted basis if this highest threshold is accomplished.
"David Fischel has demonstrated an ability to develop and execute a
highly-attractive strategic plan despite considerable challenges,"
said Dr. Arun Menawat, Stereotaxis director and chairman of
Stereotaxis' Compensation Committee. "The first stage of
Stereotaxis' turnaround process has played out successfully, and as
we look towards subsequent stages, we are excited by the scope of
efforts to drive long-term growth and value. This plan ensures
Stereotaxis can benefit from David's contributions in the coming
years."
"My focus is on executing a long-term strategic plan whereby
Stereotaxis has a transformative impact on patients, physicians,
medical progress and shareholders," said David Fischel. "I
strongly believe in the importance of alignment of interests and
appreciate having a plan that aligns my success with creating that
transformative positive impact."
The new performance award was inspired by a similar compensation
plan adopted by Tesla to retain and incentivize its CEO, Elon Musk.
Stereotaxis' plan was created and unanimously approved by the
independent members of the Board of Directors in consultation with
Compensia, a third-party compensation consultant, and Globalview
Advisors, a third-party valuation expert. Effectiveness of the
performance stock agreement is subject to approval by Stereotaxis'
shareholders, who will be asked to approve it at the annual
shareholder meeting expected to be held in May of this year.
About Stereotaxis
Based in St. Louis, Missouri, Stereotaxis, Inc. --
http://www.stereotaxis.com-- is an innovative robotic technology
company designed to enhance the treatment of arrhythmias and
perform endovascular procedures. Its mission is the discovery,
development and delivery of robotic systems, instruments, and
information solutions for the interventional laboratory. These
innovations help physicians provide unsurpassed patient care with
robotic precision and safety, improved lab efficiency and
productivity, and enhanced integration of procedural information.
Over 100 issued patents support the Stereotaxis platform. The core
components of Stereotaxis' systems have received regulatory
clearance in the United States, European Union, Japan, Canada,
China, and elsewhere.
Stereotaxis reported a loss attributable to common stockholders of
$6.02 million for the year ended Dec. 31, 2019, compared to a loss
attributable to common stockholders of $1.32 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had $57.13
million in total assets, $16.51 million in total liabilities, $5.60
million in convertible preferred stock, and $35.01 million in total
stockholders' equity.
The Company has sustained operating losses throughout its corporate
history and expects that its 2020 expenses will exceed its 2020
gross margin. The Company expects to continue to incur operating
losses and negative cash flows until revenues reach a level
sufficient to support ongoing operations or expense reductions are
in place. The Company's liquidity needs will be largely determined
by the success of clinical adoption within the installed base of
its robotic magnetic navigation system as well as by new placements
of capital systems. The Company's plans for improving the
liquidity conditions primarily include its ability to control the
timing and spending of its operating expenses and raising
additional funds through debt or equity financing, as disclosed in
the Company's Annual Report for the year ended Dec. 31, 2019.
STEREOTAXIS INC: Reports 2020 Full Year Financial Results
---------------------------------------------------------
Stereotaxis reported financial results for the fourth quarter and
full year ended Dec. 31, 2020.
"2020 was a year of significant progress despite a challenging
macro environment," said David Fischel, chairman and CEO. "The
highlight of the year was receipt of FDA clearance for the Genesis
RMN System and successful installations of the first systems in the
United States and Europe. We begin 2021 with purchase orders for
five robotic systems reflecting the initial green shoots of a
broad-based global resurgence in interest in our robotic
technology."
"Stereotaxis continues to advance a robust innovation pipeline.
Our proprietary robotically-navigated magnetic ablation catheter is
poised to enter formal validation studies and on track for EU
commercialization and initiation of a US pivotal trial in late
2021. We have made methodical progress on a set of additional
innovations and expect to be in a position to showcase them at the
end of the year. We are confident in the positive impact these
innovations will have on patients, physicians, providers, and on
Stereotaxis' financial and strategic foundation."
"Our commercial and technological progress was accomplished while
remaining prudent with shareholder capital. Stereotaxis starts the
year in the strongest financial position of its history with $44
million in cash and a modest controlled operating loss as we invest
in meaningful innovation and growth initiatives."
2020 Fourth Quarter and Full Year Financial Results
Revenue for the fourth quarter of 2020 totaled $6.8 million,
consistent with the prior year fourth quarter. Recurring revenue
for the quarter was $5.9 million and system revenue was $0.7
million. Revenue for the full year 2020 totaled $26.6 million.
Recurring revenue of $22.0 million for the full year 2020 declined
15% from the prior year, primarily due to the impact of the
COVID-19 pandemic on procedure volumes. System revenue of $3.6
million for the full year 2020 increased from $2.1 million in the
prior year reflecting the successful installation of its initial
Genesis RMN Systems.
Gross margin for the fourth quarter and full year 2020 were
approximately 77% and 71% of revenue, respectively. Operating
expenses in the fourth quarter were $6.4 million, consistent with
the $6.3 million in the prior year quarter. Operating expenses for
the full year 2020 totaled $25.7 million, down from $27.6 million
in the prior year. Operating loss and net loss in the fourth
quarter were both ($1.2) million. For the full year 2020,
operating loss was ($6.7) million and net loss was ($6.6) million.
Negative free cash flow for the full year 2020 was ($3.3) million,
and including funding from the payroll protection program was
($1.2) million, compared to ($4.6) million for the full year 2019.
Cash Balance and Liquidity
At Dec. 31, 2020, Stereotaxis had cash and cash equivalents of
$44.2 million.
A copy of the 2020 financial results is available for free at:
https://www.sec.gov/Archives/edgar/data/1289340/000149315221004794/ex99-1.htm
About Stereotaxis
Based in St. Louis, Missouri, Stereotaxis, Inc. --
http://www.stereotaxis.com-- is an innovative robotic technology
company designed to enhance the treatment of arrhythmias and
perform endovascular procedures. Its mission is the discovery,
development and delivery of robotic systems, instruments, and
information solutions for the interventional laboratory. These
innovations help physicians provide unsurpassed patient care with
robotic precision and safety, improved lab efficiency and
productivity, and enhanced integration of procedural information.
Over 100 issued patents support the Stereotaxis platform. The core
components of Stereotaxis' systems have received regulatory
clearance in the United States, European Union, Japan, Canada,
China, and elsewhere.
Stereotaxis reported a loss attributable to common stockholders of
$6.02 million for the year ended Dec. 31, 2019, compared to a loss
attributable to common stockholders of $1.32 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had $57.13
million in total assets, $16.51 million in total liabilities, $5.60
million in convertible preferred stock, and $35.01 million in total
stockholders' equity.
The Company has sustained operating losses throughout its corporate
history and expects that its 2020 expenses will exceed its 2020
gross margin. The Company expects to continue to incur operating
losses and negative cash flows until revenues reach a level
sufficient to support ongoing operations or expense reductions are
in place. The Company's liquidity needs will be largely determined
by the success of clinical adoption within the installed base of
its robotic magnetic navigation system as well as by new placements
of capital systems. The Company's plans for improving the
liquidity conditions primarily include its ability to control the
timing and spending of its operating expenses and raising
additional funds through debt or equity financing, as disclosed in
the Company's Annual Report for the year ended Dec. 31, 2019.
STEVEN FELLER: Wants Plan Exclusivity Extended Until April 17
-------------------------------------------------------------
Debtor Steven Feller PE PL requests the U.S. Bankruptcy Court for
the Southern District of Florida, Fort Lauderdale Division to
extend the exclusive periods during which the Debtor may file a
plan of reorganization through and including April 17, 2021, and to
solicit ballots on such a plan until July 16, 2021.
At the time of the commencement of this Chapter 11, the Debtor was
either the main defendant or potential named defendant in at least
eleven pending lawsuits. In addition, the Debtor was served with
various notices pursuant to Chapter 558 of the Florida Statute,
from various claimants who intended to sue but had not yet
commenced a lawsuit against the Debtor at the time of the
commencement of this case.
In an effort to streamline the process of resolving these claims
being made against the Debtor, the Debtor filed its Debtor's Motion
to Refer Matters to Judicial Settlement Conference. The Court
granted this motion and entered its Order Granting Motion to Refer
Matters to Judicial Settlement Conference.
The Debtor is in the process of setting up the judicial settlement
conference to be conducted by Judge Hyman. There are many
claimants, and it is taking some time to come up with an agreed
date with all the affected claimants. It is anticipated that the
settlement conference could take place in the month of March 2021.
The deadline for general creditors to file claims expired on
December 28, 2020. The time period for the government to file
claims is April 15, 2021. Until the governmental bar date passes,
the Debtor will not know the full extent of the creditor body.
The Debtor desires to focus its full attention on stabilizing the
business, resolving the claims through the judicial settlement
conference, and formulating an exit strategy to this Chapter 11
case. The Debtor does not want to be concerned with competing
plans. Also, the Debtor's exclusivity extension request is not for
any dilatory purpose and no prejudice will result to any party if
the requested extension is granted.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3dIAj4z from PacerMonitor.com.
About Steven Feller PE PL
Steven Feller PE, an engineering design services company, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Fla. Case No. 20-21341) on October 17, 2020. The petition was
signed by Steven Feller, authorized representative. At the time of
the filing, the Debtor had estimated assets of between $1 million
and $10 million and liabilities of between $500,000 and $1
million.
Judge Scott M. Grossman oversees the case. The Debtor tapped Behar,
Gutt & Glazer, P.A. as the Debtor's legal counsel, and Derrevere
Stevens Black & Cozad, as their special insurance counsel.
STORABLE INC: S&P Assigns B- Rating on Acquisition by EQT Partners
------------------------------------------------------------------
S&P Global Ratings assigned a 'B-' issuer credit rating to
Storable, Inc., an Austin, Texas-based provider of integrated
technology solutions to the self-storage industry, 'B' issue-level
and '2' recovery rating to the company's proposed first-lien credit
facilities, and 'CCC' issue-level and '6' recovery rating to the
company's proposed second-lien term loan.
The ratings reflect the following key credit risks and strengths:
Key risks:
-- Very high starting leverage of more than 10x, with financial
sponsor ownership and an aggressive financial policy track record;
-- Small revenue scale, and narrow end-market concentration with
small self-storage operators in the U.S.;
-- High and potentially ongoing execution risk as the company
integrates its acquisitions, executes a high-growth strategy, and
pursues additional debt-funded acquisitions to expand into adjacent
markets;
-- Limited earnings visibility over the 12 to 36 months timeframe
given the preponderance of short-term (monthly) client contracts,
high transaction-based revenues (the majority of revenue), and
uncertain levels of residual catastrophic insurance risk; and
-- Modest entry barriers and attractive industry dynamics that may
result in higher capital investments and more intense competition
over time.
Key strengths:
-- The self-storage industry is large (about $30 billion),
resilient through economic cycles, highly fragmented with limited
adoption of digital customer acquisition and workflow automation
solutions among small and medium sized business, and provides
Storable-which has the leading integrated industry technology
solutions-the opportunity to drive strong organic growth and to
consolidate the market; and
-- Despite monthly service contracts and high transaction
revenues, improved productivity resulting from the integrated
workflows of Storable's solutions creates high exit costs and
strong retention rates.
High starting leverage, growth investment needs, and financial
sponsor ownership will likely keep adjusted leverage higher than 8x
through 2022. S&P said, "Our ratings reflect Storable's very high
adjusted leverage, over 10x on an S&P Global Ratings' adjusted
basis pro forma as of Dec. 31, 2020, and the risk that financial
policy remains aggressive under its new financial sponsor owner EQT
Partners. Despite higher interest expense related to the
transaction financing, we expect the company will generate free
operating cash flow (FOCF) to debt in the low-to-mid-single-digit
percent area annually over the next two years due to strong
double-digit percent revenue growth, improved fixed-cost operating
leverage, and modest tax outflows."
S&P said, "Nevertheless, our ratings reflect our expectation for
further debt-funded acquisitions, and related transaction,
integration and earn-out expenses as the company seeks to
capitalize on its first mover and leading market position. Although
less likely over the next 12 months, our assessment also reflects
the high risk tolerance of financial sponsors and the risk the
company prioritizes cash flows for shareholder dividends over debt
repayment or business investments to de-risk EQT's significant
equity investment."
Storable has grown rapidly since 2018, often through debt-funded
acquisitions. Under its previous financial sponsor, Cove Hill
Equity Partners, the company acquired SiteLink Companies, and
StorEDGE. This provided unique capacities and expanded the company
into adjacent markets. The acquisitions improved Storable's
competitive position and supported client retention as they
realized enhanced service breadth and efficiencies. In late 2019,
the company began an initiative to integrate its acquisitions and
modernize its technology capabilities which not only allows for
improved user experience but also for a platform to better
integrate acquisitions. Industry EBITDA multiples have historically
ranged from the high-single-digits for payments and insurance
capabilities, to the low-teens for software services providers,
potentially supporting deleveraging with cash or equity financing.
However, valuation multiples for property technology (PropTech)
have spiked recently. Recent acquisitions (which are high priced
compared with the current debt capitalization) generally resulted
in enhanced capabilities that improve the value proposition of an
integrated software platform. Under the proposed credit agreement,
which is covenant lite, the company will be permitted to issue
incremental first-lien debt (free and clear) equal to the greater
of closing EBITDA and the most recent trailing-12-month EBITDA.
Small business scale and niche focus, high exposure to monthly
contracts and transaction-based revenues, and the uncertain
residual insurance risks limit our assessment of the business.
Storable generated about $160 million in revenues and about $42
million of S&P Global Ratings' adjusted EBITDA in 2020 and is
exclusively focused on software solutions for self-storage
operators. Larger operators, including public REITs, are more
likely to internally develop facility management systems, limiting
the addressable market for Storable's software, payments, and
insurance solutions. Nevertheless, Storable's marketplace solutions
have seen good industry adoption from larger operators. The
company's customer base is well diversified across small, medium
and large-sized clients in the U.S. (90% of revenues), Canada,
Australia, and the U.K. (10% combined). However, the company
generated a sizeable percentage of revenue from its largest five
clients, which often use Storable's marketplace solutions. S&P
views Storable's marketplace solutions as more discretionary and
less sticky than its workflow automation and insurance solutions.
Storable's customers typically sign monthly contracts that often
utilize solutions that have transaction-based revenue models. These
terms mirror the industry-standard convention for self-storage
leases contracts but are atypical from the annual subscription
contracts of our rated software and services industry peers.
Additionally, less stable transaction revenues comprise the
majority of revenues, which is very high compared with our rating
peers.
Revenue from the company's marketplace, insurance, and payments
segments, despite being offered as an integrated solution and value
proposition, are susceptible to declining transaction volumes or
erosion of the company pricing economics. Additionally, 30- to
180-day signed backlog conversion increases the risk of project
delays affecting revenues. That said, the company's strong gross
retention rates (with churn primarily driven by industry
consolidation), net revenue retention, and its track record of
price increases demonstrate the value of its services, the
importance of Storable's integrated solutions to its clients
workflows, and the high costs of potential service disruption
incurred when switching providers. The consolidation of smaller
storage operators by the large public REITs accounts for a majority
of Storable's annual client attrition and a sharp increase in
consolidation could result in lower retention rates.
The company benefits from the high gross margins of insurance
contracts sold to self-storage tenants. The insurance policies are
self-insured, but the company limits the dollar coverage for
self-storage tenants and the company's exposure to catastrophic
loss events is partially reinsured. The risks of the self-insured
business model are reflected in our ratings. However, S&P notes the
company has not experienced a catastrophic loss event.
S&P said, "However, we believe the company is well-positioned for
growth in the highly resilient self-storage industry as tailwinds
propel the adoption of modern information technology and marketing
solutions. The $30 billion U.S. self-storage industry has proven to
be resilient to the effects of the COVID-19 pandemic and the
resulting steep decline in economic conditions. We believe the
pandemic is accelerating the digital transformation of the
industry, and we expect storage operators and their end clients
will increasingly adopt digital workflows that streamline the
reservation and payment process and optimize operations." Tailwinds
from the demographic shift of ownership and management of small and
medium-sized operators toward the more technology-savvy Millennials
and Gen-X age group will likely result in steady adoption of
Storable's solutions over time.
For example, as of the third-quarter 2020, the proportion of
reservations fulfilled online increased meaningfully. It
demonstrates the advantages of modern online performance-based
customer acquisition and the growing importance of the Storable
platform, datasets, and network. Compared with competitors,
Storable's online marketplace (SpareFoot.com) provides a
differentiated solution. SpareFoot.com competes with Google for its
operators marketing dollars, and with the internal search
directories on the websites of the large public REIT's for
consumers. S&P believes the low-cost-to-value of operators
marketing spend and the competitive customer acquisition costs of
SpareFoot relative to Google should support Marketplace's growth.
Although this segment saw sharp annual revenue growth in 2020,
increased competition for adwords, partner referrals, or unexpected
changes in internet search algorithms could impact growth.
Modest entry barriers and bright industry growth prospects will
likely result in more intense competition over time. Storable has
benefited from its early-mover advantage and has grown its market
share. However, we expect increasing competition in the facility
management systems (FMS) segment as the industry undergoes its
digital transformation, due to the low entry barriers, solid
industry demand, and high potential investment returns.
Relative to niche competitors, Storable's service breadth and
comprehensive product suite provide a unique advantage. However
some competitors offer comprehensive FMS platforms with a range of
similar offerings, and in some cases additional features including
mobile app-enabled access control or electric locks at somewhat
lower price points than Storable. S&P expects the marketplace to
consolidate as additional investment capital enters the industry
niche.
S&P said, "The stable outlook reflects our expectation for strong
operating performance and market share gains over the next 12
months. In 2021, we expect organic revenue growth in the low-teens
percent area to about $179 million, adjusted EBITDA margins in the
mid-30% area, adjusted leverage declining to about 9x from more
than 10x at transaction close, and low-to-mid-single-digit percent
area free operating cash flow (FOCF) to debt.
"We could lower our ratings on Storable if operating performance
deteriorates such that FOCF deficits threaten to constrain
liquidity and covenant compliance, or EBITDA to cash interest
coverage declines toward the low-1x area, or we assess the capital
structure as unsustainable." This could occur with:
-- Increased industry competition resulting in significant market
share declines;
-- Aggressively debt-financed or poorly timed acquisitions; and
-- Operational missteps, including integration missteps or data
breach, resulting in profit margin declines.
While unlikely over the next year, S&P could raise its ratings on
Storable if it expects S&P Global Ratings'-adjusted leverage will
decline and remain below 7x with FOCF to debt in the
mid-single-digit percent area. This would require strong
operational execution, new large customer wins and cross-sell
initiatives, margin improvement, and a reserved financial policy.
STREAM TV NETWORKS: In Chapter 11 to Reduce Debt Service
--------------------------------------------------------
Stream TV Networks, Inc., has filed for Chapter 11 bankruptcy
protection to pursue a reorganization plan that will reduce its
debt service requirements.
Stream TV was founded in 2009 as a "new media" company to pursue
new technologies that enhance user entertainment and communications
experiences. The technology that the Company is currently seeking
to launch allows TV and tablet manufacturers to convert
two-dimensional devices into three-dimensional without the need for
viewing glasses.
The Debtor has principal executive offices located in Philadelphia,
Pennsylvania.
The top shareholders are SLS Holdings VI, LLC (15.9%), Askhaya
Holdings, LLC (8.78%), and Vayikra Capital LLC (5.17%). Akshaya
Holdings is owned by members of the Rajan family.
According to Mathu Rajan, director, the board has authorized the
Company's bankruptcy filing after the board reviewed the materials
presented by the management and the advisors of the Company
regarding the liabilities and liquidity situation of the Company,
the strategic alternatives available to it, and the impact of the
foregoing on the Company's business.
The Debtor intends to generate revenue from providing 3D components
to final market assemblers (such as TV manufacturers and tablet
makers). The Debtor views its approach as similar to how major
computer manufacturers use processors in their products and note
their products as such.
The Debtor intends to restructure its debt through the Chapter 11
case so that its debt service is reduced to a level that will allow
the Company to sustain its operations for the long term.
On the Petition Date, the Debtor only filed a motion to maintain
and continue its prepetition insurance policies, and an application
to hire Dilworth Paxson LLP as counsel.
About Stream TV Networks
Philadelphia, Pennsylvania-based Stream TV Networks, Inc., develops
technology intended to display three-dimensional content without
the use of 3D glasses.
On Feb. 24, 2021, Stream TV Networks filed a Chapter 11 petition
(Bankr. D. Del. Case No. 21-10433). The petition was signed by CEO
Mathu Rajan, and the bankruptcy case is handled by Honorable Judge
Karen B. Owens. The Company listed assets of about $100 million to
$500 million and liabilities of $100 million to $500 million.
DILWORTH PAXSON LLP, led by Martin J. Weis, is the Debtor's
counsel.
STUDIO MOVIE: Landlord Has Issues With Liquidation Analysis
-----------------------------------------------------------
Rosedale Bakersfield Retail VI, LLC, a lessor, creditor and party
in interest, objects to the Studio Movie Grill Holdings, LLC, et
al.'s Exhibit D to their Disclosure Statement.
Rosedale is the landlord of an unexpired lease with one of the
Debtors' entities, Movie Grill Concepts XXXV, LLC, as assignee of
Movie Grill Concepts XX, LLC. Movie Grill Concepts XXXV, LLC is
the tenant of 46,311 square feet of space in the Rosedale Village
Shopping Center, 2733 Calloway Dr., Bakersfield, CA 93312, in which
Movie Grill Concepts XXXXV operates a dine-in movie theater
business, pursuant to the terms of a written shopping center Lease
dated Dec. 30, 2016.
While negotiations are presently underway between Debtors and
Rosedale over a modification of the Lease, it is unknown at this
time if an agreement will be reached so this protective and limited
objection is required to be filed.
The Debtors cannot liquidate or sell property they do not own.
Under the terms of the Lease, Rosedale owns ALL of the FF&E other
than the digital projectors. More specifically, Section 4.7 of the
Lease provides:
"4.7 Theater FF&E Ownership. Landlord shall be deemed to be
the owner of the Theatre FF&E except for the digital projection
equipment. Tenant shall have the right to use Theatre FF&E during
the Term of the Lease."
Rosedale objects to Exhibit D to the Disclosure Statement as it
includes in Debtors' Liquidation Analysis Rosedale's FF&E that
Debtors do not own.
Previously, on January 13, 2021, Rosedale filed its "Objection of
Rosedale Bakersfield Retail VI, LLC to Assumption Including Cure
Amount in Amended Notice of Unexpired Leases Which May Be Assumed,
Etc." Rosedale incorporates by reference this previous objection it
filed as Debtors schedule no pre-petition arrearage due Rosedale in
their Schedules to the Disclosure Statement.
Counsel for Rosedale Bakersfield Retail VI, LLC:
Glenn A. Ballard, Jr.
DENTONS US LLP
Texas Bar No. 01650200
2000 McKinney Ave., Suite 1900
Houston, Texas 77201
Tel: (214) 259-0999
Email: Glenn.Ballard@Dentons.com
- and -
Jess R. Bressi
California State Bar No. 110264
4675 MacArthur Court, Suite 1250
Newport Beach, California 92660
Tel: (949) 241-8967
E-mail: Jess.Bressi@Dentons.com
About Studio Movie Grill
Studio Movie Grill and its affiliates operate a chain of movie
theatres that include full-service dining during the show. Studio
Movie Grill is based in Dallas and runs 33 theater-restaurants.
Studio Movie Grill Holdings, LLC, and its affiliates sought Chapter
11 protection (Bankr. N.D. Tex. Case No. 20-32633) on Oct. 23,
2020. Studio Movie Grill was estimated to have $50 million to $100
million in assets and $100 million to $500 million in liabilities.
The Hon. Stacey G. Jernigan is the case judge.
The Law Offices of Frank J. Wright, PLLC, is the Debtors' counsel.
Donlin Recano is the claims agent.
SUNIVA INC: New York Court Orders Ex-Owner to Pay $26M
------------------------------------------------------
Law360 reports that a New York state judge has ordered the former
equity owner of solar cell maker Suniva Inc. to make a $26.1
million loan default payment to an asset manager, saying neither a
Chapter 11 settlement nor a short-notice collateral sale let it off
the hook for its loan guaranty.
In a ruling issued Tuesday, February 23, 2021, New York state
Supreme Court Judge Andrew Borrok rejected Shunfeng International
Clean Energy Ltd.'s arguments that SQN Asset Servicing LLC's
Chapter 11 settlement with Suniva nor its sale of its loan
collateral cost SQN the right to enforce the credit agreement.
About Suniva, Inc.
Founded in 2007 by Dr. Ajeet Rohatgi, Suniva, Inc. --
http://www.suniva.com/-- is a manufacturer of PV solar cells with
manufacturing facilities at its metro-Atlanta, Georgia headquarters
as well as in Saginaw, Michigan.
Impacted by Chinese manufacturers who are able to flood the U.S.
market for solar cells and modules with cheap imports, Suniva,
Inc., filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 17-10837) on April 7,
2017. Suniva estimated $10 million to $50 million in assets and
$100 million to $500 million in debt.
The Hon. Kevin Gross is the case judge.
Kilpatrick, Townsend & Stockton LLP is serving as general counsel
to the Debtor. Potter Anderson & Corroon LLP is serving as Delaware
counsel, with the engagement led by Stephen R. McNeill, Jeremy
William Ryan. Garden City Group, LLC, is the claims and noticing
agent.
Andrew R. Vara, Acting U.S. Trustee for Region 3, on April 27,
2017, appointed five creditors of Suniva, Inc., to serve on the
official committee of unsecured creditors. The Committee tapped
Seward & Kissel LLP as counsel, Morris, Nichols, Arsht & Tunnell
LLP as co-counsel, and Emerald Capital Advisors as financial
advisors.
TAILORED BRANDS: Seeks New Funds to Keep It Afloat
--------------------------------------------------
Katherine Doherty and Jeremy Hill of Bloomberg News report that
Men's Wearhouse owner Tailored Brands Inc. is seeking a lifeline to
help it stay afloat less than three months after it emerged from
bankruptcy protection.
Tailored Brands has "severely underperformed" compared to the
projections in its Chapter 11 reorganization plan and needs roughly
$75 million by the beginning of March 2021 to avoid a default,
according to court papers.
The company has arranged a tentative deal with Silver Point
Capital, its largest equity holder and a lender, to provide the
funds and help it avoid another bankruptcy, according to a notice
from Mohsin Meghji of M-III Partners.
About Tailored Brands
Tailored Brands, Inc., (NYSE: TLRD) is an omni-channel specialty
retailer of menswear, including suits, formal wear and a broad
selection of polished and business casual offerings. It delivers
personalized products and services through its convenient network
of over 1,400 stores in the United States and Canada as well as its
branded e-commerce websites at http://www.menswearhouse.com/and
http://www.josbank.com. Its brands include Men's Wearhouse, Jos.
A. Bank, Moores Clothing for Men and K&G.
Tailored Brands reported a net loss of $82.28 million for the year
ended Feb. 1, 2020, compared to net earnings of $83.24 million for
the year ended Feb. 2, 2019. As of Feb. 1, 2020, Tailored Brands
had $2.42 billion in total assets, $2.52 billion in total
liabilities, and a total shareholders' deficit of $98.31 million.
On Aug. 2, 2020, Tailored Brands and its subsidiaries sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-33900).
As of July 4, 2020, Tailored Brands disclosed $2,482,124,043 in
total assets and $2,839,642,691 in total liabilities.
The Hon. Marvin Isgur is the case judge.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Jackson Walker L.L.P., Stikeman Elliot LLP and Mourant
Ozannes as co-bankruptcy counsel; PJT Partners LP as financial
advisor; Alixpartners, LLP as restructuring advisor; Deloitte &
Touche LLP as auditor, and A&G Realty Partners, LLC as the real
estate consultant and advisor. Prime Clerk LLC is the claims
agent.
* * *
Tailored Brands said on Dec. 1, 2020, emerged from bankruptcy
protection following a financial restructuring process that helped
the U.S. men's fashion retailer eliminate $686 million of debt from
its balance sheet. It confirmed in November 2020 a restructuring
plan that consisted of a $430 million lending facility.
TELEPHONE AND DATA: S&P Rates New Series UU Preferred Shares 'B'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating to
Chicago-based Telephone and Data Systems Inc.'s proposed redeemable
perpetual series UU preferred shares (amount to be determined). The
company will use the proceeds from these shares for general
corporate purposes, which S&P expects will include the funding of
out-of-territory overbuild opportunities. S&P classifies the
preferred shares as having intermediate equity credit (50% equity)
based on the proposed terms and rate them three notches below its
'BB' long-term issuer credit rating on the company to reflect their
subordination relative to the other debt in the capital structure
and the deferability of their dividend payments.
S&P's intermediate equity assessment reflects the instrument's
permanence, subordination, and the deferability of its dividend
payments to conserve cash. The instrument is perpetual with no
maturity date and there is no incentive to redeem it for a
long-dated period, although the company can redeem the instrument
after five years. The dividend payments are deferrable and there is
no limit on how long they can be deferred. Furthermore, the
instrument is subordinated to all of Telephone and Data Systems'
existing and future senior debt obligations.
THADEUS A. GADOMSKI, JR.: March 31 Hearing on Wells Property Sale
-----------------------------------------------------------------
Thadeus A. Gadomski, Jr., and Marianne C. Gadomski filed with the
U.S. Bankruptcy Court for the District of Massachusetts a notice of
their proposed private sale of all of his right, title and interest
in the real property with the improvements thereon located at 15
Central Avenue, in Wells, Maine, to their son, Thadeus A. Gadomski,
III, for $400,000, cash, subject to higher and better offers.
A video hearing on the Motion is set for March 31, 2021, at 10:00
a.m. The Objection Deadline is March 17, 2021, at 4:30 p.m.
The hearing is open to the public on a listen-only basis via
telephone. Dial 1.888.675.2535 and enter access code 3497831. Any
difficulties accessing the hearing should be promptly reported to
the Courtroom Deputy via email to
msh.courtroom.deputy@mab.uscourts.gov.
The Debtors have received the offer from their son to purchase the
property for the sum of $400,000 in cash.
The sale will take place by March 31, 2021. The Buyer has paid a
deposit in the sum of $10,000. The terms of the proposed sale are
more particularly described in Motion to Approve Sale filed with
the Court on February 22, and a written purchase and sale agreement
dated Feb. 18, 2021. The Motion to Approve Sale and the purchase
and sale agreement are available at no charge upon request from the
counsel for Debtor.
The property will be sold free and clear of all liens, claims and
encumbrances. Any perfected, enforceable valid liens will attach
to the proceeds of the sale according to priorities.
Through the Notice, higher offers for the Property are solicited.
Any higher offer must be accompanied by a cash deposit of $10,000
in the form of a certified or bank check made payable to the
undersigned. Higher offers must be on the same terms and
conditions provided in the Purchase and Sale Agreement, other than
the purchase price.
The deposit will be forfeited to the estate if the successful
purchaser fails to complete the sale by the date ordered by the
Court. If the sale is not completed by the buyer approved by the
Court, the Court, without further hearing, may approve the sale of
the Property to the next highest bidder.
Thadeus A. Gadomski, Jr. and Marianne C. Gadomski sought Chapter 11
protection (Bankr. D. Mass. Case No. 20-11537) on July 21, 2020.
The Debtors tapped Michael Feinman, Esq., as counsel.
THADEUS A. GADOMSKI, JR.: Son Buying Wells Property for $400K
-------------------------------------------------------------
Thadeus A. Gadomski, Jr., and Marianne C. Gadomski ask the U.S.
Bankruptcy Court for the District of Massachusetts to authorize the
private sale of all of his right, title and interest in the real
property with the improvements thereon located at 15 Central
Avenue, in Wells, Maine, to Thadeus A. Gadomski, III, for
$400,000.
On a post-petition basis, by agreement dated Feb. 18, 2021, the
Debtors entered into a conditional Purchase and Sale Agreement for
the sale of the Property to the Buyer for the sum of $400,000. On
a pre-petition basis, the Property was a secondary residence of the
Debtors, but later leased to their son, the Buyer.
The sale of the Property proposed is to be free and clear of all
liens, claims, interests and encumbrances, with such liens, claims,
interests and encumbrances to attach to the proceeds.
The holders of interests in the Property are, in order of priority,
(i) Town of Wells, Maine (Real estate taxes) - $2,000, and (ii) PHH
Mortgage (First Mortgage) - $169,905.21.
The Property had not been marketed using conventional methods, as
the Property is being purchased by a family member, but the
Property has been reviewed by a real estate broker in the Wells,
Maine area.
The Debtors ask approval for the distribution of a portion of the
proceeds at the time of sale. Specifically, they ask that the real
estate taxes and the claims of PHH Mortgage, be paid at the time of
closing, as well as all ordinary and usual closing adjustments and
costs, such as recording fees and transfer taxes.
A private sale, rather than a public sale is best in the case due
to several factors. First, the Property is located in Maine, which
is not conveniently marketed in the case from Massachusetts.
Second, the Property is in a state of disrepair, with an existing
tenant. The Buyer, as tenant, is aware of the Property and all
issues involved.
The sale is the major asset of the Debtor, but with time being of
the essence, a private sale is warranted outside of a Plan in order
to work within the time frames of all parties involved.
Pursuant to Rule 6004-1(c)(2), the Debtors propose to distribute
notice of the proposed sale of the Property to brokers in the
immediate vicinity of Wells, Maine. Such notice will be provided
electronically.
The Debtors propose to pay, from sale proceeds at time of closing,
a fee of 2% of the sales price to any broker that produces a
purchaser for a higher price, with the condition that the purchaser
purchases the Property and pays the purchase price. To the extent
that approval is required for this provision, they ask such
approval.
The Debtors ask the sale of the Property as set forth, and after
payment of claims, all remaining proceeds will be held by their
counsel in escrow for purposes of their Plan, and as may be allowed
by the Court. They also propose that all of the liens, interests,
and encumbrances on the property attach to the proceeds therefrom.
The Debtors have submitted and filed with the Motion, a Notice of
Intended Private Sale for purposes of solicitation of higher offers
and, counteroffers, and objections pursuant to Official Local Form
2A, and they ask the Court to allow the sale to take place upon the
terms and conditions set forth in the Purchase and Sale Agreement
and subject to the terms and provisions of the Motion. They also
ask that the Court approves the Notice of Intended Private Sale, to
the extent required, for issuance.
A copy of the Agreement is available at
https://tinyurl.com/ilalsx7a from PacerMonitor.com free of charge.
Thadeus A. Gadomski, Jr. and Marianne C. Gadomski sought Chapter 11
protection (Bankr. D. Mass. Case No. 20-11537) on July 21, 2020.
The Debtors tapped Michael Feinman, Esq., as counsel.
TOPBUILD CORP: S&P Rates $400MM Senior Unsecured Notes 'BB'
-----------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating and '3'
recovery rating to Daytona Beach, Fla.-based insulation and
building material installer and distributor TopBuild Corp.'s
proposed $400 million senior unsecured notes due 2029. The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 50%) recovery in the event of a payment default.
The company will use the proceeds from these notes to redeem its
existing $400 million 5.625% senior unsecured notes due 2026.
S&P said, "The transaction is leverage neutral, and thus it does
not affect our 'BB' long-term issuer credit rating or stable
outlook on TopBuild. The stable outlook reflects our view that the
company's leading market position and strong market conditions will
enable it to maintain low financial leverage in line with
management's target to manage its net leverage ratio between 2.0x
and 2.5x. We expect TopBuild to continue to undertake acquisitions
of core and adjacent product installers and distributors without
materially increasing its leverage."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- In addition to the new $400 million senior unsecured notes,
TopBuild's debt capitalization comprises (all unrated) a $450
million revolving credit facility and $300 million senior secured
term loan, both due 2025, as well as about $40 million of priority
claims related to vehicle and equipment notes due through 2024.
-- TopBuild Corp. is the issuer and borrower of the debt. The new
notes rank junior to the company's existing senior secured credit
facilities.
-- S&P's simulated default scenario contemplates a default
occurring in 2026 stemming from decreased demand due to a downturn
in the company's end markets (namely U.S. single- and multi-family
residential construction) and heightened competition.
-- S&P's assessment of its recovery prospects contemplates a
reorganization value for the company of about $850 million, which
reflects emergence EBITDA of about $170 million and a 5x multiple.
-- The 5x multiple is the standard multiple it uses for companies
that provide services (such as installation) for homebuilders.
Simulated default assumptions
-- Simulated year of default: 2026
-- EBITDA at emergence: $170 million
-- Implied enterprise valuation multiple: 5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): About
$808 million
-- Priority claims and adjustments (vehicle and equipment notes):
$40 million
-- Total collateral value available for secured debt: $768
million
-- Secured debt claims: About $546 million
-- Total collateral available for unsecured debt: $222 million
-- Unsecured debt claims: About $407 million
--Recovery expectations: 50%-70% (rounded estimate: 50%)
Note: All debt amounts include six months of prepetition interest.
TRANQUILITY GROUP: Case Summary & 11 Unsecured Creditors
--------------------------------------------------------
Debtor: Tranquility Group, LLC
769 State Hwy 86
Ridgedale, MO 65739
Business Description: Tranquility Group, LLC owns a vacation
destination offering tree houses, log
cabins, and bungalows.
Chapter 11 Petition Date: February 26, 2021
Court: United States Bankruptcy Court
Western District of Missouri
Case No.: 21-60120
Debtor's Counsel: Ronald S. Weiss, Esq.
BERMAN DELEVE KUCHAN & CHAPMAN, LLC
1100 Main, Suite 2850
Kansas City, MO 64105
Tel: (816) 471-5900
Fax: (816) 842-9955
Email: rweiss@bdkc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael R. Hyams, COO/partner.
A copy of the petition containing, among other items, a list of the
Debtor's 11 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/EPRZPBI/Tranquility_Group_LLC__mowbke-21-60120__0001.0.pdf?mcid=tGE4TAMA
TRINET GROUP: S&P Assigns 'BB' on New $500MM Senior Unsecured Notes
-------------------------------------------------------------------
S&P Global Ratings assigned its 'BBB-' issue-level rating and '1'
recovery rating to the TriNet Group, Inc.'s proposed $500 million
secured revolving credit facility due 2026. The '1' recovery rating
indicates its expectation for very high (90%-100%; rounded
estimate: 95%) recovery in the event of a payment default.
S&P said, "At the same time, we assigned our 'BB' issue-level
rating and '3' recovery rating to the company's proposed $500
million senior unsecured notes due 2029. The '3' recovery rating
indicates our expectation for meaningful (50%-70%; rounded
estimate: 55%) recovery in the event of a payment default. We
expect TriNet will use proceeds from these notes to repay its $370
million outstanding term loan A due 2023 and add cash to its
balance sheet."
S&P's 'BB' issuer credit rating and stable outlook on TriNet are
unchanged. S&P's ratings reflect:
-- The company's leading market position in the underpenetrated
professional employer organization (PEO) industry (about 6% of
small business employees currently utilize a PEO);
-- The shift in its revenue mix and its vertical alignment toward
clients in lower-risk end markets (such as financial services,
technology, life sciences, and professional services), which has
supported its operating performance through the 2020 economic
recession;
-- The company's manageable S&P Global Ratings-adjusted leverage,
which we forecast will remain in the 2x area over the next 12-24
months; and
-- TriNet's healthy liquidity position pro forma for the
transaction, which will include the $500 million revolving credit
facility and cash balances of about $431 million.
The offsetting factors in S&P's analysis include:
-- The company's high exposure to cyclical small business
employment levels;
-- Its retained insurance deductible risks;
-- S&P's expectation for revenue and profit margin declines in
2021 as health care utilization continues to normalize and the
company accrues for its Recovery Credit Program to return $160
million in health care cost savings to its clients; and
-- The uncertain effects of health care reform on the industry's
longer-term growth prospects.
S&P said, "We have a generally favorable view of the PEO industry's
longer-term growth prospects and expect a return to mid- to
high-single-digit percent area industry revenue growth rates likely
in 2022. Over the next 12 months, we expect TriNet to benefit from
a decline in the U.S. unemployment rate (to 6.4% in 2021 from 8.3%
in 2020) and a rebound in U.S. economic growth (to a 4.2% expansion
in real GDP in 2021 from a 3.9% decline in 2020)." Furthermore,
TriNet's Recovery Credit Program, which seeks to share the excess
cost savings it generated from underutilized health services with
its clients, will likely support its client satisfaction and
retention rates in 2021.
S&P Global Ratings believes there remains high, albeit moderating,
uncertainty about the evolution of the coronavirus pandemic and its
economic effects. Vaccine production is ramping up and rollouts are
gathering pace around the world. Widespread immunization, which
will help pave the way for a return to more normal levels of social
and economic activity, looks to be achievable by most developed
economies by the end of the third quarter. However, some emerging
markets may only be able to achieve widespread immunization by
year-end or later. S&P said, "We use these assumptions 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."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- Pro forma for the transaction, TriNet's debt capitalization
will comprise the $500 million secured first-lien revolving credit
facility due 2026 (undrawn at close) and the $500 million senior
unsecured notes due 2029.
-- S&P's simulated default scenario contemplates a default
occurring in 2026 due to a severe and sustained economic downturn
that reduces employment across the company's installed base, a
reputation-damaging event leading to significant client attrition,
or sharp spikes in larger-than-expected insurance claims, which
challenge TriNet's revenue and cash flows such that it cannot meet
its obligations.
-- S&P believes the company would reorganize as a going concern in
the event of a default due to its expertise in payroll processing,
tax administration, employment, and benefit law compliance and its
established client relationships.
Simulated default assumptions
-- Year of default: 2026
-- EBITDA at emergence: $127 million
-- EBITDA multiple: 6x
-- Gross enterprise value: About $760 million
-- The revolving credit facility is 85% drawn at default.
-- All debt amounts include six months of accrued but unpaid
interest at default.
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): About
$721 million
-- Valuation split (obligors/nonobligors): 100%/0%
-- Value available to first-lien debt claims: About $721 million
-- Estimated first-lien debt claims: About $441 million
--Recovery expectations: 90%-100% (rounded estimate: 95%)
-- Value available to unsecured claims: About $281 million
-- Estimated unsecured debt claims: About $508 million
--Recovery expectations: 50%-70% (rounded estimate: 55%)
Ratings List
New Rating
TriNet Group Inc
Senior Unsecured BB
Recovery Rating 3(55%)
TriNet USA Inc
Senior Secured BBB-
Recovery Rating 1(95%)
TRONOX LTD: S&P Alters Outlook to Stable, Affirms 'B' ICR
---------------------------------------------------------
S&P Global Ratings affirmed its ratings on Tronox Ltd., including
its 'B' issuer credit rating, on the company. At same time, S&P
revised its outlook to stable from negative.
S&P said, "We are also assigning our 'BB-' issue rating and '1'
recovery rating to the company's proposed new first-lien debt,
consisting of a $350 million revolving credit facility and about
$1.3 billion term loan. We expect proceeds will refinance an
existing term loan of about $1.6 billion.
"Our stable outlook reflects the diminished risk of credit metrics
weakening to levels below what we consider appropriate for the
rating.
"Our outlook revision to stable from negative reflects our view
that the probability of credit metrics weakening to levels below
those appropriate for the rating has declined. The company's 2020
operating performance was slightly stronger than our expectations.
We anticipate Tronox will build on that operating performance and
slight improvements in pricing and volumes will strengthen
operating earnings and lift credit metrics modestly in 2021. We
previously expected a negative impact from the economic downturn.
However, key end markets for Tronox's products including titanium
dioxide (TiO2) such as the housing market, held up in 2020 relative
to other end markets such as auto. We continue to recognize that
Tronox has opportunities to capture substantial synergies and
operational improvements following its acquisition of Cristal in
2019. We expect the company will sustain credit measures that are
appropriate for the 'B' rating, with the ratio of funds from
operations (FFO) to total debt of around or slightly below 12%
after considering the potential for earnings volatility.
"Our assessment of Tronox's business risk reflects its position as
one of the largest and the only vertically integrated global
producer of TiO2 and good geographic diversity. TiO2 is
historically a highly cyclical and volatile industry, which offsets
some of its strengths from a credit quality perspective. We believe
Tronox's vertical integration should provide production cost
advantages over peers. In past Ti02 downturns, this benefit has
been evident as the company has been able to hold, or even improve
margins, despite a significant drop in revenues. We also believe
the company should be more insulated from spikes in titanium
feedstock prices than some less integrated peers. However, given
the volatility we believe is inherent in the sector, we expect
Tronox will remain exposed to variability in earnings. Our
assessment also reflects the benefits of Tronox's use of the
chloride process for most of production when compared with peers.
The chloride process is generally perceived as producing
higher-value Ti02 with less energy and less waste compared with its
alternative, the sulfate process. We do not believe the Cristal
assets have been as productive as Tronox and key competitors, and
we expect operational improvement at these assets to take several
years.
"We expect TiO2 demand growth over the long term to reflect growth
in the global economy and key end markets related to the housing
and automotive sectors, as well as population growth and rising
standards of living in emerging markets.
"Our assessment of Tronox's financial risk reflects our expectation
that credit measures will remain appropriate for the current
rating, with adjusted debt to EBITDA between 5x and 6x on a
weighted average sustained basis. Although we recognize that credit
measures could appear stronger than this for periods of time, we
view EBITDA and cash flows in the Ti02 sector as very volatile,
with pricing and supply being particularly unpredictable.
Therefore, our assessment of financial risk also considers
volatility in Ti02 pricing beyond what we have forecasted in our
base case. We do not believe the improvements will warrant a rating
upgrade and we are affirming our 'B' issuer credit rating. As a
result of this improvement, we believe Tronox will have sufficient
cushion under its credit metrics at the current rating for any
unexpected short-term hiccup in operating performance. In our base
case, we expect FFO to total debt between 12% and 20% on a
weighted-average basis (three-year weights). Our rating factors in
potential for volatility in earnings that could weaken this ratio,
but not to an extent that the ratio slips well below 12%.
"Our base-case assumes scenario the global economy will improve in
2021 and beyond relative to 2020. In particular, economic recovery
in the U.S. 2021 will support demand growth for the company's
products. We believe the company can improve earnings through
synergy and operational efficiencies following its 2019 acquisition
of Cristal. Our rating continues to reflect the expectation for
high volatility in the company's credit measures. We consider a
ratio of around or slightly below 12% during downturns. We believe
the ratio could be in the 12% to 20% range under favorable market
conditions we anticipate in 2021.
"We could lower our rating on Tronox over the next 12 months if we
expect weighted average debt to EBITDA will exceed 7.0x on a
sustained basis, or the ratio of FFO to total debt to decline below
8%. This could occur if we believe sales and earnings will weaken
more than we anticipate because of disruptions from the coronavirus
pandemic. TiO2 pricing and demand have been steady in the first
quarter of 2020, but we expect demand to weaken beginning in the
second quarter because of a global macroeconomic recession in the
first half of the year. If such weakening is sharper or longer
lasting than our base-case scenario, we could lower the rating. We
believe debt to EBITDA could weaken to such levels if EBITDA
margins compress several hundred basis points (bps) to levels in
the high teens or lower. This could also occur if operational
improvement initiatives related to the Cristal acquisition prove to
be a smaller-than-expected benefit, or if unexpected cash outlays
or weaker-than-expected cash flows cause liquidity sources to drop
below 1.2x liquidity uses.
"We could raise our ratings in the next 12 months if there is a
significant and permanent drop in the company's debt levels or
earnings grow beyond our expectation. In such a scenario, we would
expect debt to EBITDA consistently in the 3x to 4x range and a FFO
to total debt ratio higher than 20%. We believe an improvement in
EBITDA margins by about 400 bps above our expectations could result
in credit measures at those levels and generate sufficient earnings
to account for potential volatility."
TTM TECHNOLOGIES: S&P Rates New $500MM Senior Unsecured Notes 'BB-'
-------------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level and '5' recovery
ratings on U.S.-based print circuit board (PCB) manufacturer TTM
Technologies Inc.'s (TTMI) new $500 million senior unsecured notes.
S&P also affirmed its 'BB+' issue-level rating, with a '2' recovery
rating, on the company's existing first-lien debt.
S&P's issuer credit rating on TTMI remains 'BB', with a stable
outlook.
The stable outlook reflects S&P's view that TTMI will generate free
cash flow of $100 million or better and sustain leverage below the
2x area through 2021, while executing on its share buyback goals.
The proposed debt-refinancing transaction is neutral for leverage.
TTMI to raise $500 million of senior unsecured notes and use the
proceeds to prepay its existing 5.625%, $375 million senior
unsecured notes as well as repay the $40 million outstanding under
its Asia ABL facility. S&P notes that TTMI prepaid $400 million of
its outstanding term loan in July 2020 from the proceeds of the
sale of its four plants in China, leading to S&P Global Ratings'
adjusted leverage under 2x. Adjusted leverage was lowered further
to about mid-1x post the repayment of the $250 million of
convertible notes in December 2020.
TTMI's recent quarter performance indicates the potential for a
turnaround. The company's performance for fourth quarter of fiscal
2020 remained resilient with topline sequentially growing by 2%,
supported by strength in the auto and aerospace industries,
partially offset by COVID-19-related headwinds. S&P believes
factory utilization rates will likely improve, supporting the
company's margins. In the first quarter of fiscal 2021, the company
announced a $100 million stock repurchase program. With expected
leverage in the mid- to low-1x range and positive cash flow
generation, the company has the flexibility to pursue share
buybacks.
S&P said, "We view TTMI's long-term secular growth trajectory to be
intact. Secular trends in 5G, medical instrumentation, and internet
of things support its long-term growth, and we expect key segments
to fall back to historical growth in fiscal 2021.
"The stable outlook reflects our view that TTMI will generate free
cash flow of $100 million or better and sustain leverage below the
2x area through 2021, while executing its share buyback goals.
"We could lower the rating if declines in its key end
markets--resulting in part from volatility in the automotive,
networking, and communications industries; pricing pressure from
customers; or higher labor costs--further reduced EBITDA, raising
leverage over 3x.
"We could raise our rating on TTMI if the company's key end markets
returned to growth (automotive, computing, and networking), and it
sustains leverage below the mid-1x area."
UNIVERSITY PLACE: Granted Use of Cash Collateral on Final Basis
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington
has authorized University Place Rehabilitation Center, LLC and
affiliates to use cash collateral on a final basis and obtain
post-petition financing.
The Debtors require the continued use of Cash Collateral to
minimize disruption to and avoid termination of their operations,
and thereby avoid immediate and irreparable harm to their
business.
The Debtors and CNH Finance Fund I, L.P. entered into a Credit and
Security Agreement dated as of February 20, 2018 pursuant to which
CNH Finance as the Original Lender made a loan to the Debtors.
The Original Lender sold the Loan to The Capital Foresight Limited
Partnership in accordance with and subject to the terms of a Loan
Purchase Agreement dated as of January 17, 2019, and in connection
therewith assigned to Capital Foresight as the First Lienholder all
of the Original Lender's right, title and interest in and to the
Credit Agreement and all documents related to the Loan.
As of December 18, 2020, the Debtors are indebted to the First
Lienholder under the Loan for the unpaid principal balance of
$3,234,250 together with attorneys' fees, costs, and other
expenses.
University Place and C.F. Franklin, L.P. are parties to a Lease and
Security Agreement dated as of June 1, 2017.
Debtor Renton Healthcare Rehabilitation Center, LLC, and C.F.
Renton, LLC are parties to a Lease and Security Agreement dated as
of June 1, 2017.
Debtor Rehabilitation Center, LLC, and C.F. Talbot, LLC are parties
to a Lease and Security Agreement dated as of January 1, 2018.
The University Place Landlord, the Renton Landlord, and the Talbot
Landlord are all affiliates of the First Lienholder.
The Debtors are each borrowers under an Amended and Restated
Promissory Note dated as of March 1, 2020 in favor of the Landlords
and under the terms of the Landlords' Note, the Debtors'
obligations under the Landlords' Note are secured by the
Pre-Petition Collateral in priority equal to that granted to the
Landlords under the Leases.
As of December 18, 2020, the Debtors are indebted to the Landlords
under the Landlords' Note for the unpaid principal balance of
$500,000, plus accrued and unpaid interest in the amount of
$176,243, together with attorneys' fees, costs, and other
expenses.
Moreover, payments to the Debtors on account of their account
receivables are made to one of six accounts held by the Debtors at
Bank Leumi USA. These payments constitute substantially all of the
Debtors' revenue. Each day, any funds in those six accounts are
swept into a concentration account and, also each day, funds in the
concentration account are swept and applied against the balance of
the Pre-Petition Loan Obligation. The Debtors' operating expenses
are, in turn, funded by the First Lienholder advancing funds under
the Loan. Loan Advances constitute substantially all of the funds
available to the Debtors to pay operating expenses.
The Debtors and the First Lienholder have continued this
arrangement under the Loan post-petition, subject to the terms and
conditions of the Interim Order, and seek to continue this
arrangement subject to the terms and conditions of the Final
Order.
Pursuant to the Final Order, the Debtors are authorized on a final
basis, and only in accordance with the terms of the Final Order and
the Final Budget, to (i) use Cash Collateral to fund the
reasonable, necessary and ordinary costs and expenses of their
operations, and (ii) continue requesting, and to the extent in
compliance with the terms and conditions of the Order and the Loan
documents, receiving Loan Advances from the First Lienholder on the
same terms and conditions as the Loan; provided, however, such
authority to use Cash Collateral and the DIP Loan will immediately
terminate upon the earlier of (a) March 31, 2021, (b) entry of a
subsequent order of the Court terminating the Debtors' authority to
use Cash Collateral or the DIP Loan; or (c) the occurrence of a
Change Event.
As adequate protection for the Debtor's use of cash collateral, the
First Lienholder is granted valid, binding, enforceable, and
perfected security interests and liens to the extent and validity
of, and in the same priority as the First Lienholder's Pre-Petition
Liens in the same type of property as the Pre-Petition Collateral
and all proceeds thereof to secure the First Lienholder Diminution.
The First Lienholder's Replacement Liens are and will be in
addition to the First Lienholder's Pre-Petition Liens, and will
remain in full force and effect notwithstanding any subsequent
conversion or dismissal of any of the Debtors' bankruptcy cases.
The granting of such First Lienholder's Replacement Liens will be
in addition to the First Lienholder's rights in the Pre-Petition
Collateral. The First Lienholder's Replacement Liens will be senior
in priority to any and all liens or security interests in the
assets of the Debtors and their estates, whenever granted.
The Landlords are granted valid, binding, enforceable, and
perfected security interests and liens to the extent and validity
of, and in the same priority as the Landlords' Pre-Petition Liens
in the Post-Petition Collateral, and all proceeds thereof to secure
the Landlords Diminution. Landlords' Replacement Liens are and will
be in addition to the Landlords' Pre-Petition Liens, and will
remain in full force and effect notwithstanding any subsequent
conversion or dismissal of any of the Debtors' bankruptcy cases.
The Landlords' Replacement Liens are senior in priority to any and
all liens or security interests in the assets of the Debtors and
their estates, whenever granted, with the exception of the First
Lienholder's Replacement Liens.
As additional adequate protection for the Debtors' continued use of
Cash Collateral and the DIP Loan, the Debtors and the First
Lienholder will continue to apply the proceeds of the Debtors'
accounts receivable to reduce the debts it owes to the First
Lienholder under the Loan and the DIP Loan.
A copy of the Order is available for free at https://bit.ly/3dJ109s
from PacerMonitor.com.
About University Place Rehabilitation Center, LLC
University Place Rehabilitation Center, LLC owns and operates a
skilled nursing care facility in University Place, Wash.
University Place Rehabilitation Center and its affiliates, Renton
Healthcare Rehabilitation Center LLC and Talbot Rehabilitation
Center LLC, filed Chapter 11 petitions (Bankr. W.D. Wash. Lead Case
No. 20-42793) on Dec. 18, 2020.
CEO Eric Orse of Orse & Company, Inc. signed the petitions. In the
petitions, University Place Rehabilitation Center disclosed
$3,746,381 in assets and $5,684,608 in liabilities.
The Debtors tapped Bush Kornfeld LLP as their bankruptcy counsel,
and Tracy Law Group, PLLC and McNaul Ebel Nawrot & Helgren PLLC as
special counsel.
The U.S. Trustee for Region 18 appointed an official committee of
unsecured creditors in the Debtors' cases on Jan. 4, 2020. The
committee hired Troutman Pepper Hamilton Sanders LLP as bankruptcy
counsel and Groshong Law PLLC as local counsel.
US ACUTE CARE: S&P Assigns B- Issuer Credit Rating, Outlook Stable
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S&P Global Ratings assigned its 'B-' issuer credit rating to
Canton, Ohio and Dallas, Texas-based emergency medicine provider
U.S. Acute Care Solutions Inc. (USACS). The outlook is stable. At
the same time, S&P assigned a 'B-' issue-level rating and '3'
recovery rating to its secured debt.
The stable outlook reflects S&P's expectation of mid single-digit
growth supported by new contracts and modest free cash flow
generation.
U.S. Acute Care Solutions Inc.'s business risk profile reflects its
limited scale and narrow focus in emergency room staffing. USACS
generated roughly $890 million revenue in 2020, placing the company
as the No. 4 emergency department provider after peers Envision
Healthcare, Team Health, and Schumacher. Emergency medicine has
experienced headwinds from both volumes and pricing due to the
impact of the pandemic. Although emergency department visits are
often not discretionary, patients have demonstrated a willingness
to avoid visits or use alternate providers such as urgent care
clinics or physicians through the use of telehealth technologies
during the COVID pandemic. At the same time, both public and
private payors have significantly pressured reimbursement for
emergency department services.
Despite these headwinds, USACS has minimal out-of-network risk; low
self-pay (only 4%); strong physician retention rates of 94%,
benefitting from the company's physician ownership model; and
stable relationships with the large payors. Unlike some peers,
USACS has not to date had any major disputes with payors over
payment rates, nor has it had any contracts cancelled. We expect
the company's margins to be in the high-single-digit area, which is
near or slightly above peers, influenced in part by its recently
successful effort with revenue cycle management and improvement in
revenue per encounter related to recent changes in patient mix.
Still, S&P recognizes that upcoming Medicare reimbursement
reductions in each of the next two years could constrain margins.
S&P said, "We expect low-single-digit percentage growth to come
primarily from new contracts, and we do not expect patient
encounter volumes to recover to pre-COVID-19 levels. USACS has
historically grown through new contracts, with 78 new contracts
added within their top 15 health systems since 2016. We expect this
trajectory to continue as the company expands in the highly
fragmented emergency medicine market. We do not expect patient
encounter volumes to recover to pre-COVID-19 levels. The COVID-19
pandemic led to a decline in patient encounters, which have
rebounded from trough levels from April 2020 but remain at about
80%-85% of prepandemic levels as of December 2020. Partially
offsetting the effect of lower volumes is higher average acuity
levels during this period, as lower acuity patients choose to avoid
ERs or find alternate providers when possible. We expect permanent
patient behavior regarding the use of ERs, coupled with ongoing
utilization measures and reimbursement pressure by payors, will
continue to constrain ER patient volumes. Despite these headwinds
in terms of patient encounter volumes, we expect midsingle-digit
revenue growth driven by new contracts.
"We expect a highly leveraged financial risk profile, with adjusted
debt to EBITDA of over 10x and free cash flow to debt of about 3%
in 2021. We view the financial risk of USACS as highly leveraged,
taking into account the pro forma capital structure, including the
preferred equity, which we treat as debt. We expect margins to be
more comparable with pre-2020 margin, with some uplift from the
company's recent efforts to improve billing and collections, as
well as the benefit of its growing scale. We expect the company's
margins to be in the high-single-digit percentage area, leading to
free cash flow near $30 million and adjusted debt to EBITDA of over
10x in 2021.
"Our evaluation and presentation of adjusted credit measures
includes treatment of the company's $467 million preferred equity
as debt. Although we recognize that the preferred equity includes a
PIK dividend component, which avoids a use of cash flow, the
accretion will cause an ongoing increase to our adjusted debt
calculation, reflecting our view that the tranche could be replaced
with debt in the future.
"The stable outlook on U.S. Acute Care Solutions Inc. reflects our
expectation that adjusted debt to EBITDA will remain above 8x and
free cash flow to debt will remain near 3%. For purposes of
evaluating credit measures, we treat the company's preferred equity
as debt.
"We could lower our rating if the company's cash flow generation
deteriorated such that there were cash-flow deficits with limited
prospects for improvement." This could occur if:
-- Cash flow were continually burdened more than expected by items
such as acquisition and integration costs, consulting fees, or
other non-recurring items;
-- Pricing were unfavorable due to increased pressure from
payors;
-- The company lost a major contract; or
-- A resurgence of the pandemic led to a material drop inpatient
encounters.
S&P could raise its rating if debt to EBITDA sustainably improved
to below 8x with free operating cash flow (FOCF) to debt above 3%.
This could occur if the company demonstrated that recent
profitability improvements were sustainable, leading to expanded
EBITDA margins and free cash flow generation.
US ACUTE: Moody's Assigns B2 CFR on Strong Competitive Position
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Moody's Investors Service assigned a B2 Corporate Family Rating and
B2-PD Probability of Default Rating to U.S. Acute Care Solutions,
LLC ("USACS"). Moody's also assigned a B2 rating to the company's
proposed senior secured notes. The outlook is stable.
Proceeds from the proposed $375 million secured notes along with
additional $466 million preferred equity financing from Apollo
Management L.P, the new private equity (PE) investor, will be used
to pay existing debt, purchase a portion of outstanding shares and
cover transaction-related expenses. As a result of this
transaction, the current PE investor, Welsh, Carson, Anderson &
Stowe will sell all of its stake in the company.
The following ratings were assigned:
Issuer: U.S. Acute Care Solutions, LLC
Corporate Family Rating of B2
Probability of Default Rating of B2-PD
Proposed $375 million senior secured notes due 2026 of B2 (LGD3)
Outlook action:
Issuer: U.S. Acute Care Solutions, LLC
Outlook assigned stable.
RATINGS RATIONALE
The B2 CFR reflects USACS' market position as the fourth largest
emergency department physician staffing provider, high financial
leverage, and material execution risk associated with an active
debt-funded acquisition strategy. Further, USACS has some
geographic concentration with Texas, Maryland and Ohio representing
approximately 50% of business volumes. Moody's estimates that the
company's proforma debt/EBITDA at the close of the refinancing
transaction, including certain add-backs for transaction expenses
on COVID-related one-time expenses, will approximate 5.0 times.
The B2 CFR is supported by USACS' strong competitive position in
the markets where it operates. The company has relationships with
approximately half of the top ten health systems in the US. In
USACSs rating, Moody's incorporates the benefits of USACS'
ownership model, in which the physicians own a significant stake in
the company. This results in high alignment between the interests
of the company and its physician-owners. However, these benefits
are partially offset by the risk that the company (which is a
non-public company) will need to "buy out" physicians who seek to
retire or otherwise leave the organization, possibly by issuing
debt.
Moody's notes that a very significant portion of USACS' capital
structure is provided by the $466 million in perpetual, redeemable
preferred stock. These securities provide a strong loss-absorption
cushion to creditors in the event of default. However, if the
company's restricted payment capacity (as defined in the notes
offering memorandum) allows, the company has an option to redeem
its preferred shares between the third and fifth anniversaries of
the proposed refinancing transaction. Moreover, Apollo also has the
right to request full redemption of its preferred share investment
beginning in year 6. If USACS is unable to redeem the preferred
shares fully after five years, its cost of using the preferred
capital provided by Apollo will increase substantially, and Apollo
can force the sale of the company. Consequently, Moody's recognizes
the likelihood of a material change in the company's capital
structure starting from the third -- but more likely following the
fifth -- anniversary of the proposed transaction. Depending on how
the company's capital structure evolves, Moody's will update its
credit analysis accordingly.
The rating also reflects the company's good liquidity profile. This
liquidity assessment is supported by Moody's expectations of $5-$10
million in free cash flow in the next 12 months as well as cash
balances of approximately $20 million at the end of March 2021. It
also reflects Moody's expectation of full availability under the
company's $75 million senior secured first lien revolver
(unrated).
The stable outlook reflects Moody's expectation that the company
will continue its expansion while employing a balanced growth
strategy and keeping leverage in 4.5 - 6.0 times range.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. In addition, as a provider of emergency room staffing
to hospitals, USACS faces high social risk. The No Surprise Act,
which was signed into law in December 2020, will take the patient
out of the provider-payor dispute. The inability to bill
out-of-network patients for amounts over in-network rates will
impact those companies that have sizeable out-of-network revenues.
The extent to which each company will be impacted will depend on
the percentage of out-of-network patients they treat and their
specific billing and collections practices, including how often
they balance bill and how aggressively they pursue collecting these
balances. Moody's expects the company's financial policies to
remain aggressive reflecting the PE sponsor's (Apollo Management
L.P) significant preferred equity investment. However, since the
physicians will control the vast majority of the common equity
stake in the company, they will also have a material influence in
deciding the company's policies. Moody's does not consider the
environmental component of ESG material to the overall credit
profile of the issuer.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if USCAS successfully executes its
growth strategy, evidenced by expanded scale and diversity while
maintaining its current level of profitability. A demonstrated
track record of positive free cash flow and sustained debt/EBITDA
below 4.5 times would also support an upgrade.
The ratings could be downgraded if USACS' operating performance
deteriorates, if the volume of its in-network relationships shrinks
materially, or if it becomes a target of adverse regulation in one
or more of its key markets. In addition, if at any point Moody's
anticipates that the company will commence paying a material
portion of preferred dividends in cash or replace its preferred
shares with debt, ratings could be downgraded. Ratings could also
be lowered if debt/EBITDA is sustained above 6.0 times, or
liquidity weakens.
Headquartered in Canton, OH, US Acute Care Solutions, LLC is a
provider of emergency medicine, hospitalist and observation
services in 19 US states. After the proposed financing transaction,
the company will be approximately 90% owned by physicians. The
company's revenues are approximately $990 million.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
US CONSTRUCTION: Can Use Cash Collateral Until March 9
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Judge Jeffrey P. Norman of the U.S. Bankruptcy Court for the
Southern District of Texas authorized US Construction Services, LLC
to use cash collateral, on an interim basis for 14 days, or until
March 9, 2021.
The Debtor was permitted to pay the February utilities for
electricity, waste and telephone/internet services from the Cash
Collateral. The approved Budget allocated $250 for electricity
expenses and $150 for phone expenses.
For the adequate protection of the interests of lender Veritex
Community Bank against diminution in value of its interests in the
Cash Collateral, the Lender was granted a continuing valid,
binding, enforceable, and automatically perfected postpetition
security interest in, and replacement liens on, any and all
presently owned and hereafter acquired assets of the Debtor and all
other assets of the Debtor and its estate, together with the
proceeds thereof.
The Lender's adequate protection liens on the collateral has the
same validity and priority as its lien on the Debtor's property as
existed on the Petition Date.
A further hearing on the Debtor's motion to use cash collateral is
scheduled for March 10, 2021 at 11 a.m.
A full-text copy of the Agreed Order and Budget, both dated
February 23, 2021, are available at https://tinyurl.com/a2ymhvut
and https://tinyurl.com/fmx247ky from PacerMonitor.com.
About US Construction Services
US Construction Services, LLC is a privately held company in the
residential building construction industry. It sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No.
21-80029) on February 19, 2021. The petition was signed by Whitney
Jones, the managing member. As of the petition date, US
Construction Services declared total assets at $2,400,000 and total
liabilities at $1,262,826. It is represented by Gabe Perez, Esq.,
at Zendeh Del & Associates, PLLC.
VOYAGER AVIATION: S&P Cuts ICR to 'CC' on Distressed Exchange
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S&P Global Ratings lowered its issuer credit rating on Voyager
Aviation Holdings LLC to 'CC' from 'CCC-'. The 'C' issue-level
rating and '6' recovery rating on the senior unsecured notes are
unchanged.
S&P said, "All our ratings remain on CreditWatch, where we placed
them with negative implications on Feb. 18, 2021. This reflects our
expectation that we will lower our issuer credit rating on Voyager
to 'SD' (selective default) and issue-level rating on the senior
unsecured notes to 'D' (default) upon completion of the proposed
transaction.
'The downgrade reflects our view that Voyager's proposed
restructuring plan represents a selective default on the senior
unsecured notes. According to terms of the proposed restructuring
plan announced on Feb. 19, 2021, the outstanding $415 million
senior unsecured notes due Aug. 15, 2021 will be exchanged for $150
million in new 8.5% senior unsecured notes due in 2026 (same coupon
as the existing notes), $200 million in preferred equity, and 100%
of common equity. Existing equity holders will receive $15 million
of the new unsecured notes. About 60% of Voyager's bondholders and
all its equity holders have approved the transaction and it is
expected to be completed in the first quarter of 2021.
"We view the proposed transaction as a distressed exchange and
tantamount to default because bondholders will receive less than
originally promised. Additionally, we foresee a high likelihood of
a conventional payment default in the absence of the proposed
transaction, given the nearing maturity and limited access to other
refinancing options."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
S&P Global Ratings believes there remains high, albeit moderating,
uncertainty about the evolution of the coronavirus pandemic and its
economic effects. Vaccine production is ramping up and rollouts are
gathering pace around the world. Widespread immunization, which
will help pave the way for a return to more normal levels of social
and economic activity, looks to be achievable by most developed
economies by the end of the third quarter. However, some emerging
markets may only be able to achieve widespread immunization by
year-end or later. S&P said, "We use these assumptions 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."
CreditWatch
The CreditWatch negative reflects S&P's expectation that it will
lower its issuer credit rating on Voyager to 'SD' and issue-level
rating on the senior unsecured notes to 'D' upon completion of the
proposed transaction.
VTES INC: Court Confirms Subchapter V Plan
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James L. Garrity, Jr. has entered an order confirming the Third
Amended Chapter 11 Plan of Vtes, Inc., et al., under Subchapter V
of Chapter 11 of the Bankruptcy Code.
On Dec. 31, 2020, the Debtors filed their initial Plan, as now
amended.
Class 4 General Unsecured Claims have voted to accept the Plan.
Class 1 Superpriority DIP Claims, Class 2 Secured Claims, and Class
3 Priority Non-Tax Claims are not impaired under the Plan and thus
are deemed to have accepted the Plan.
There were no objections pertaining to confirmation of the Plan.
The Plan provides for Nat Wasserstein, the Subchapter V Trustee, to
administer Distributions and wind down the Debtors' business in
accordance with the Plan.
The Third Amended Chapter 11 Plan will be funded from the proceeds
generated by a sale of substantially all of the Debtors' assets.
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. The Plan is a "pot plan," meaning that a lump sum
will be available to holders of General Unsecured Claims, each of
whom will receive a pro rata distribution from the "pot."
Class 4 General Unsecured Claims will receive (a) a pro rata share
of Cash in an amount not to exceed the amount of such Allowed
General Unsecured 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 holder of such Allowed General
Unsecured Claim. 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.
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
A copy of the Order is available at https://bit.ly/2ZPIZxY from
Stretto, the claims agent.
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: Incurs $8.5 Million Net Loss in 2020
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vTv Therapeutics Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss
attributable to common shareholders of $8.50 million on $6.41
million of revenue for the year ended Dec. 31, 2020, compared to a
net loss attributable to common shareholders of $17.91 million on
$2.76 million of revenue for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $14.79 million in total
assets, $10.99 million in total liabilities, $83.89 million in
redeemable noncontrolling interest, and a total stockholders'
deficit attributable to the company of $80.10 million.
"Despite the challenges of operating through a global pandemic,
2020 was a successful year for vTv Therapeutics," Steve Holcombe,
president and chief executive officer, said. "We had positive
results in the Phase 2 SimpliciT-1 Study with our lead compound,
TTP399, paving the way for our continued development of this asset
in patients with type 1 diabetes. In addition, we strengthened our
current and future financial position with the initiation of our
ATM, agreement with Lincoln Park Capital, and licensing agreement
with Anteris Bio."
"In 2021, we look forward to building on these successes as we
advance our two lead programs for the treatment of type 1 diabetes
and psoriasis. We plan to initiate our first pivotal study of
TTP399 along with other supporting studies to demonstrate our
unique glucokinase activator's potential to reduce the incidence of
hypoglycemia in people with type 1 diabetes. Furthermore, we have
commenced a multiple ascending dose study with HPP737 to be
followed by a phase 2 study in patients with psoriasis in order to
demonstrate HPP737's potential to be a well-tolerated,
next-generation PDE4 inhibitor," Mr. Holcombe.
Ernst & Young LLP, in Raleigh, North Carolina, the Company's
auditor since 2000, issued a "going concern" qualification in its
report dated Feb. 24, 2021, citing that 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.
Fourth Quarter 2020 Financial Results
The Company's cash position as of Dec. 31, 2020, was $5.7 million
compared to $1.8 million as of Sept. 30, 2020.
Revenue for the fourth quarter was $6.4 million and was
insignificant for the third quarter of 2020. The revenue for the
fourth quarter was primarily attributable to the upfront
consideration, consisting of cash and an equity interest, received
in connection with the Company's license agreement with Anteris
Bio.
Research and development expenses were $2.5 million and $1.8
million for the three months ended Dec. 31, 2020 and Sept. 30,
2020, respectively. This increase of $0.8 million was driven
primarily by the reversal of certain performance-based compensation
accruals which occurred in the third quarter.
General and administrative expenses were $2.0 million for the
fourth quarter of 2020 and $1.1 million for the third quarter,
respectively. The increase of $1.0 million was driven by the
reversal of certain performance-based compensation accruals in the
third quarter.
Net income before non-controlling interest was $1.6 million for the
fourth quarter of 2020 compared to a net loss of $2.3 million for
the third quarter of 2020.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1641489/000156459021008149/vtvt-10k_20201231.htm
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.
WAVE COMPUTING: $61M Bankruptcy Sale on Track, Fee Issue Resolved
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Leslie A. Pappas of Bloomberg Law reports that Delaware has issued
the certificates Wave Computing Inc. needed for its $61 million
bankruptcy sale after the company agreed to pay franchise tax fees
owed to the state.
The processor technology company's payment of nearly $47,000
resolves its dispute with the state over the Good Standing
Certificates Wave needed to complete the sale to Tallwood
Technology Partners LLC, Wave said Feb. 26, 2021, in a filing with
the U.S. Bankruptcy Court for the Northern District of California.
Wave earlier in the last week of February 2021 asked the bankruptcy
court to intervene after Delaware's refusal to issue the
certificates.
About Wave Computing
Wave Computing, Inc. -- https://wavecomp.ai -- is a Santa Clara,
Calif.-based company that revolutionizes artificial intelligence
(AI) with its data flow-based solutions.
Wave Computing and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Cal. Lead Case No. 20 50682)
on April 27, 2020. At the time of the filing, Debtors had estimated
assets of between $1 million and $10 million and liabilities of
between $50 million and $100 million.
Judge Elaine M. Hammond oversees the cases.
The Debtors have tapped Sidley Austin, LLP as their bankruptcy
counsel, Affeld Grivakes LLP as conflict counsel, Paul Weiss
Rifkind Wharton & Garrison LLP as special counsel. Lawrence
Perkins, chief executive officer of SierraConstellation Partners
LLC, is the Debtors' chief restructuring officer.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on May 18, 2020. The committee is represented by Hogan
Lovells US, LLP.
On Nov. 20, 2020, the Court approved the Fifth Amended Disclosure
Statement for the Joint Chapter 11 Plan of Reorganization for Wave
Computing, Inc. and its Debtor Affiliates.
WC 4811 SOUTH: March 11 Plan Confirmation Hearing Set
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On Feb. 12, 2021, the U.S. Bankruptcy Court for the Western
District of Texas, Austin Division, conducted a hearing to consider
approval of the Amended Disclosure Statement in Support of Amended
Chapter 11 Plan of Reorganization of debtor WC 4811 South Congress,
LLC.
On Feb. 21, 2021, Judge Tony M. Davis conditionally approved the
Disclosure Statement and ordered that:
* March 4, 2021, at 5:00 pm is fixed as the last day for the
Debtor and 8209 Burnet, LP ("Noteholder") to exchange all documents
to be offered by either of them as evidence either in support of or
in opposition to confirmation of the Plan.
* March 7, 2021, at 5:00 p.m. is fixed as the last day for
filing and serving written objections to confirmation of the Plan.
* March 8, 2021, at 5:00 p.m. is fixed as the last day for
submitting ballots for acceptances or rejections of the Plan.
* March 10, 2021, at 5:00 pm is fixed as the last day for
counsel for the Debtor to file with the Court a ballot summary in
the form required by Local Bankruptcy Rule 3018(b) with a copy of
the ballots.
* March 11, 2021, at 9:00 am at the U.S. Bankruptcy Court,
Courtroom No. 1, 903 San Jacinto Blvd., Austin, Texas via Webex is
the hearing on the confirmation of the Plan.
A full-text copy of the order dated Feb. 21, 2021, is available at
https://bit.ly/3svVQS2 from PacerMonitor.com at no charge.
Proposed Attorneys for the Debtor:
Michael P. Cooley (TX Bar No. 24034388)
REED SMITH LLP
2850 N. Harwood Street, Suite 1500
Dallas, Texas 75201
Tel: (469) 680-4200
Fax: (469) 680-4299
About WC 4811 South Congress
WC 4811 South Congress LLC, a single asset real estate debtor (as
defined in 11 U.S.C. Section 101(51B)), owns an income-producing
mixed-use real estate development located at 4811 South Congress
Ave. in Austin, Texas that includes a mobile home park, rental
buildings and land to be used for future development.
World Class Holdings III, LLC, is the managing member of WC 4811
South Congress and is an affiliate of Natin Paul.
WC 4811 South Congress sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-11105) on Oct. 6,
2020. The petition was signed by Natin Paul, president of the
managing member. At the time of the filing, the Debtor had
estimated assets of between $10 million and $50 million and
liabilities of between $1 million and $10 million. Fishman Jackson
Ronquillo PLLC is the Debtor's legal counsel.
WC 4TH AND COLORADO: Unsecured Creditors to Get 100% w/o Interest
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WC 4th and Colorado, LP, submitted a Second Amended Chapter 11 Plan
of Reorganization and a corresponding Disclosure Statement on Feb.
21, 2021.
The Debtor owns and operates a building in the Warehouse District
of downtown Austin, Texas located at 117 West 4th Street, Austin,
Texas, generally consisting of real property improved by a building
featuring food and entertainment-related venues. The Debtor
generates revenue to sustain its operations from the rents
collected from its tenants and, as of this filing, the Property is
fully occupied. Although the Debtor believes that one tenant's
lease recently expired, the Debtor believes the rent under that
lease was at below-market rates, and anticipates that it will be
able to re-let that space once it is vacated.
Class 1 consists of the Noteholder Claim in the amount of not less
than $8,679,267 as of the Petition Date. The Allowed Noteholder
Claim shall be paid in full on or prior to Aug. 4, 2021. Until the
Allowed Noteholder Claim is paid in full or paid in full under the
terms of this Section 4.6, interest will accrue and be payable on
the unpaid balance of the Allowed Noteholder Claim at the rate of
5.25% per annum or such other amount as is determined by the
Bankruptcy Court. Noteholder may be paid in whole or in part at
any time without penalty prior to August 4, 2021; provided, that
the proceeds of any sale or refinancing of the Property shall be
used to repay the Allowed Noteholder Claim.
Class 1A consists of the JAC Secured Claim in the amount of not
less than $103,304 as of the Petition Date. The Allowed JAC
Secured Claim shall be paid in full, without interest, on the later
of 30 days after the Effective Date or 10 days after such Claim
becomes an Allowed Claim. The Debtor presently anticipates that it
will object to the allowance of some or all of the JAC Secured
Claim. This Class is Impaired, and holders of Claims in this Class
are entitled to vote to accept or reject the Plan.
Class 3 consists of all Unsecured Claims that are not Insider
Claims. The Debtor believes there are approximately $128,918 in
non-insider Unsecured Claims. Each Allowed Unsecured Claim shall be
paid in full, without interest, on the later of thirty days after
the Effective Date or 10 days after such Claim becomes an Allowed
Claim. The Debtor does not presently anticipate an objection to the
allowance of any Unsecured Claim except for any Unsecured Claim
asserted by the Noteholder and the Unsecured Claim asserted by JAC
in the amount of $51,000. This Class is Impaired, and holders of
Claims in this Class are entitled to vote to accept or reject the
Plan.
Each holder of an Equity Interest shall retain such interests, but
shall not receive any distribution on account of such interests
until Class 1, 1A, 2, 3 and 4 Claims are paid in full.
All consideration necessary for the payment or tender of
Distributions under the Plan will be derived from Cash on hand on
the Effective Date, income generated by the Reorganized Debtor from
operations, and the proceeds from any sale or refinancing of the
Property.
The Debtor or Reorganized Debtor plans to sell all or part of the
Property or refinance all or any part of the existing obligations
that encumber the Property, including the obligations to the
Noteholder. In the event such a transaction is consummated by the
Debtor or Reorganized Debtor, the net proceeds from such sale or
refinancing shall be paid to Noteholder and JAC until each of the
Allowed Noteholder Claim and Allowed JAC Secured Claim is
satisfied.
Based on the funds proposed to be available for distribution under
the Plan, including funds from the Reorganized Debtor's future
operations, the Debtor believes that it will be able to make all
payments required to be made pursuant to the Plan. The Debtor does
not anticipate any plan shortfalls on the Effective Date or
thereafter, however, if prior to the Confirmation Date, there are
any anticipated shortfalls through August 4, 2021 (the maturity
date of the Noteholder's claim), funds sufficient to cover such
shortfall will be escrowed with the Debtor on or prior to the
Confirmation Date, with such funding treated as an equity
contribution by the Equity Owner, which is itself wholly controlled
and beneficially owned by Mr. Nate Paul.
A full-text copy of the Second Amended Disclosure Statement dated
Feb. 21, 2021, is available at https://bit.ly/3b1v7ap from
PacerMonitor.com at no charge.
Counsel for the Debtor:
FISHMAN JACKSON RONQUILLOPLLC
Mark H. Ralston (TX Bar No. 16489460)
Three Galleria Tower
13155 Noel Road, Suite 700
Dallas, TX 75240
Telephone: (972) 419-5544
Facsimile: (972) 4419-5500
E-mail: mralston@fjrpllc.com
Proposed Co-Counsel for the Debtor:
Omar J. Alaniz, Esq.
Michael P. Cooley, Esq.
Devan J. Dal Col, Esq.
Reed Smith LLP
2850 N. Harwood, Suite 1500
Dallas, TX 75201
Tel: (469) 680-4200
Fax: (469) 680-4299
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)).
WC 4th and Colorado sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W. D. Texas Case No. 20-10881) on Aug. 4,
2020. Brian Elliot, authorized agent, signed the petition. At the
time of the filing, the Debtor had estimated assets of between $10
million and $50 million and liabilities of between $1 million and
$10 million.
Mark Ralston, Esq., is the Debtor's legal counsel.
WC TEAKWOOD: March 11 Plan Confirmation Hearing Set
---------------------------------------------------
On Feb. 12, 2021, the U.S. Bankruptcy Court for the Western
District of Texas, Austin Division, conducted a hearing to consider
approval of the Amended Disclosure Statement in Support of Amended
Chapter 11 Plan of Reorganization of debtor WC Teakwood Plaza,
LLC.
On Feb. 21, 2021, Judge Tony M. Davis conditionally approved the
Disclosure Statement and ordered that:
* March 4, 2021, at 5:00 pm is fixed as the last day for the
Debtor and 8209 Burnet, LP ("Noteholder") to exchange all documents
to be offered by either of them as evidence either in support of or
in opposition to confirmation of the Plan.
* March 7, 2021, at 5:00 p.m. is fixed as the last day for
filing and serving written objections to confirmation of the Plan.
* March 8, 2021, at 5:00 p.m. is fixed as the last day for
submitting ballots for acceptances or rejections of the Plan.
* March 10, 2021, at 5:00 pm is fixed as the last day for
counsel for the Debtor to file with the Court a ballot summary in
the form required by Local Bankruptcy Rule 3018(b) with a copy of
the ballots.
* March 11, 2021, at 9:00 am at the U.S. Bankruptcy Court,
Courtroom No. 1, 903 San Jacinto Blvd., Austin, Texas via Webex is
the hearing on the confirmation of the Plan.
A full-text copy of the order dated Feb. 21, 2021, is available at
https://bit.ly/3bCUaPY from PacerMonitor.com at no charge.
Proposed Attorneys for the Debtor:
Michael P. Cooley
REED SMITH LLP
2850 N. Harwood Street, Suite 1500
Dallas, Texas 75201
Tel: (469) 680-4200
Fax: (469) 680-4299
About WC Teakwood Plaza
Based in Austin, Texas, WC Teakwood Plaza LLC owns and operates a
3.4-acre shopping center at 8201-8209 Burnet Road, Austin, Texas
that houses a number of business tenants.
World Class Holdings III, LLC, is the managing member of WC
Teakwood and is an affiliate of Natin Paul.
WC Teakwood Plaza sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Tex. Case No. 20-11104) on Oct. 6,
2020. The petition was signed by Natin Paul, president of managing
member. At the time of the filing, the Debtor had estimated assets
of between $10 million and $50 million and liabilities of between
$1 million and $10 million. Fishman Jackson Ronquillo PLLC is the
Debtor's legal counsel.
WILDWOOD VILLAGES: $114K Lease With Live Oaks for G16-067 Approved
------------------------------------------------------------------
Judge Roberta A. Colton of the U.S. Bankruptcy Court for the Middle
District of Florida authorized Wildwood Villages, LLC, to enter a
lease with Live Oaks Community Church, Inc. for Parcel G16-067,
which sits on approximately 3 acres of land.
The lease is for an initial period of five years, and the terms
provide that the rent for the first year is $114,000. The rent
increases in the second year to $144,000, with a "cost of living"
increase each following year. The lease also provides that the
Church will be responsible for maintaining the landscaping, and
paying all utilities for the entire Parcel.
The Church intends to use the buildings that sit on the Parcel as
worship and congregation areas.
The Court denied the Debtor's request to enter the lease nunc pro
tunc to Jan. 1, 2021.
About Wildwood Villages, LLC
Wildwood Villages, LLC is engaged in activities related to real
estate.
Wildwood Villages, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-02569) on August 28, 2020. The petition was signed by Jonathan
Woods, manager. The Debtor disclosed $3,150,861 in assets and
$3,428,386 in liabilities. Matthew S. Kish, Esq., Esq. at SHAPIRO
BLASI WASSERMAN & HERMANN, PA represents the Debtor as counsel.
YELLOW CORP: Board Approves 2021 Bonus Plan
-------------------------------------------
The Board of Directors of Yellow Corporation approved the Yellow
Corporation 2021 Bonus Plan along with a form award agreement. The
Plan authorizes the Company to grant from time-to-time cash bonuses
and awards to selected employees on terms and conditions approved
by the Company's Compensation Committee. At this time, no award
agreements have been issued to or executed by any employee. The
Plan provides that no payment will be made if it would violate the
Company's existing credit agreements.
About Yellow Corporation
Yellow Corporation -- www.myyellow.com -- is a holding company
that, through its operating subsidiaries, offers its customers a
wide range of transportation services.
The Company reported a net loss of $53.5 million for the year ended
Dec. 31, 2020, compared to a net loss of $104 million for the year
ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $2.18
billion in total assets, $700.7 million in total current
liabilities, $1.22 billion in long-term debt (less current
portion), $16.7 million in pension and postretirement, $172.6
million in operating lease liabilities, $297.7 million in in claims
and other liabilities, and a total shareholders' deficit of $223.3
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.
YS HOMES: $640K Sale of Annapolis Residential Property Approved
---------------------------------------------------------------
Judge Michelle M. Harner of the U.S. Bankruptcy Court for the
District of Maryland authorized YS Homes, LLC's sale of the
improved residential real property located at 1413 Howard Road, in
Annapolis, Maryland, to Kimberly S. Nelson and Terrence M.
Overholser or their designee for $640,000.
The Debtor will hold the aggregate net proceeds of sale subject to
further order of the Court.
The sale is free and clear of all Interests, with all such
Interests to attach to the Proceeds.
Upon payment of the purchase price by the Purchaser, the Debtor is
authorized to pay from the purchase price (i) the commissions set
out in the Sale Motion and (ii) any current or past due real estate
taxes and other related charges to the appropriate state authority
as required by applicable non-bankruptcy law and not contrary to
the Contract.
The Debtor, through Zvi Guttman as the designated managing member
of the Debtor for purposes of this transaction, will be authorized,
on behalf of the Debtor, to (a) fully perform under, consummate and
implement the Sale of the Property to the Purchaser, including the
execution of all instruments and documents that may be reasonably
necessary, required or desirable to implement the Agreement, and
(b) to take all further actions as may be requested by the
Purchaser for the purpose of transferring, granting, and conveying
the Property to the Purchaser, free and clear of Interests.
Nothing in the Order will prejudice the rights, claims and defenses
of the Debtor, Zvi Guttman as chapter 7 trustee for Yousef Sihweil,
creditors or any party-in-interest, including Yaser Sehwail, to
later challenge the jurisdiction of the Bankruptcy Court over the
Debtor with respect to matters other than the Property and the Sale
contemplated by the Order, or any other assets of the Debtor. Any
such subsequent challenge, regardless of the Court's ruling will
have no effect upon, and will not impact, the Property or the
finality of the Sale Order, or the closing of the transaction
contemplated by the Order.
The stays provided for in Bankruptcy Rules 6004(h) and 6006(d) are
waived, and the Sale Order will be effective immediately upon its
entry.
The case is In re: YS Homes, LLC, (Bankr. D. Md. Case No. 21-10874
(MMH)).
YUM! BRANDS: Egan-Jones Upgrades Senior Unsecured Ratings to B+
---------------------------------------------------------------
Egan-Jones Ratings Company, on February 17, 2021, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Yum! Brands Incorporated to B+ from B.
Headquartered in Louisville, Kentucky, Yum! Brands, Inc, owns and
franchises quick-service restaurants worldwide.
[*] Hospitals at Risk of $122-Bil. Revenue Loss in 2021 on COVID
----------------------------------------------------------------
Lauren Coleman-Lochner of Bloomberg News reports that U.S.
hospitals face up to $122 billion in lost revenue this year, 2021,
as the pandemic continues its rampage.
Even a best-case scenario would cost hospitals $53 billion,
according to a new Kaufman, Hall & Associates report for the
American Hospital Association.
How quickly hospitals recover depends on the vaccine rollout, the
spread of more infectious strains, and how potential patients
behave -- both in terms of how cautious they remain and how willing
they are to return for not only profitable elective procedures but
even for emergencies.
"While national CDC metrics show some signs that the country may be
turning the corner on the pandemic, its repercussions for the
healthcare industry will persist indefinitely. The January
performance results reflect the continued burden on U.S. hospitals
and health systems, and emphasize the importance of remaining
vigilant in combatting the virus and moving these vital
institutions toward recovery," according to the Kaufman Hall
report.
[*] Negative Amortization in Restructuring of Mortgage Debt
-----------------------------------------------------------
L. James Dickinson and Patrick Potter of Pillsbury Winthrop Shaw
Pittman LLP wrote an article on JDSupra titled "Negative
Amortization Chapter 11 Plans as a Potential Bridge Over the
Economic Recovery Gap."
Hospitality debtors with substantial equity but prolonged depressed
revenues due to COVID-19 may find negative amortization, a tool
used sparingly pre-pandemic, helpful in the restructuring of
mortgage debt under a chapter 11 plan until operations are turned
around.
TAKEAWAYS
* Negative amortization is permissible in chapter 11 plans, even if
infrequently
used.
* The pandemic recovery may present favorable conditions for debt
restructurings
that feature negative amortization.
* The hospitality debtors with substantial equity may be likely
candidates for such
plans.
This is the eleventh in a series of alerts on insolvency topics
affecting real estate. In this alert, we discuss the potential for
hotels responding to the impact of COVID-19, particularly those
with meaningful equity and presently depressed revenues, to confirm
three-to-four-year reorganization plans that negatively amortize
the mortgage debt while the debtor reestablishes its occupancy
rates and revenue streams.
Hospitality Debtors' Susceptibility to Negative Amortizing Plans
Due to COVID-19
The broader leisure facilities industry, which includes
hospitality, was amongst the hardest hit by COVID-19. Hotels
across the country and globally are struggling to service their
mortgage debts. As vaccination data comes into sharper focus,
hotel industry forecasts have begun to converge on a
two-to-three-year time period for recovery. These predictions may
be setting the stage for a perhaps disfavored but legally
permissible mechanism to help debtors address lower occupancies and
revenues during the extended recovery for this sector. In light of
some economic expectations for the next few years, a cram-down plan
that restructures debt with deferred debt-service payments may be
more appropriate now than ever.
Pre-COVID-19 Treatment of Negative Amortizing Plans
In a plan of reorganization, negative amortization occurs where
part or all the interest of a secured claim is deferred and
accrues, adding to the principal at a rate sufficient to preserve
the present value of the secured claim. There is no per se rule
against the use of negative amortization, but the application has
historically been sparingly used by debtors and carefully adopted
by courts when evaluating compliance with cram-down requirements.
In re Club Associates, 107 B.R. 385, 398 (Bankr. N.D. Ga.1989). To
confirm a cram-down plan, the bankruptcy court must find that the
plan is fair and equitable under §1129(b). Courts have fashioned a
non-exhaustive, 10-factor list determine if a negative-amortizing
plan is fair and equitable. In re Apple Tree Partners, L.P., 131
B.R. 380, 398 (Bankr. W.D. Tenn. 1991). The list includes
evaluating, for example, the proposed equity cushion, the duration
of payment deferral, the interest rate, and the debtor’s
financial projections, among other considerations.
While courts frequently rely upon the weight and significance of
these and other factors, individual factors can be dispositive.
About half of the factors ultimately rely upon valuations, which
unavoidably rely upon financial projections and, in some instances,
the uncertainty that may accompany them.
Hospitality Industry Hit Particularly Hard by COVID-19
Perhaps no industry's narrative for the future is more compelling
than that of hotels. While many destination hotels are operating
at below 25 percent occupancy, and non-destinations hotels are
operating below 10 percent occupancy, surveys indicate considerable
pent-up demand. And, the adoption of long-term work-from-home
strategies by more companies may result in a shift toward more
conferences and in-person events for companies that value such
interactions within their workforce. Bankruptcy judges are
currently busy making feasibility determinations and approving
plans for scores of debtors in sectors with far less reason to be
optimistic.
Three cases -- that have stood the test of time—support plans
that would defer mortgage payments under the right conditions for
the relatively long recovery periods predicted by hotel industry
forecasts. The Tenth Circuit affirmed a plan with no interest or
principal payments for up to three years, justified by a
substantial equity cushion. In re Pikes Peak, 779 F.2d 1456, 1459
(10th Cir.1985). The Ninth Circuit Bankruptcy Appellate Panel
affirmed a plan allowing interest accrual without payment for up to
three years, safeguarded by a substantial equity cushion.1 In re
Pine Mountain, Ltd., 80 B.R. 171 (B.A.P. 9th Cir. 1987). Plans
with negative amortization periods up to four years have been
approved. In re Wood, Case No. 89-0111, Civil Action No.
90-0042-C, 1991 U.S. Dist. LEXIS 20083, at *23 (W.D. Va. Nov. 11,
1991).
Features and Feasibility of a Negative Amortization Plan
If a potential debtor’s valuation indicates a comfortable equity
cushion to protect secured claims throughout the payment deferment
period at a sufficient rate of interest, then most of the other
factors often fall into place, and a debtor can follow the
guideposts in the caselaw to carefully craft a plan that employs
negative amortization.
Valuation will also impact the interest rate the plan can support.
The "prime-plus" methodology for determining acceptable cram-down
interest rates was adopted by the Supreme Court in Till in a plan
not featuring negative amortization. Notably, the Bankruptcy Court
in In re Aspen Village found prime-plus to be fair and equitable in
the debtor’s negative amortization plan.2
Prime-plus starts with the prime interest rate -- currently 3.25%
-- and adds a premium to compensate the secured creditor for the
risk it must bear over the life of the plan. Those premiums
typically range from 1% – 3%.3 Thus, potential debtors
considering negative amortization may initially contemplate
interest rates in the range of 4.25% – 6.25%.
Lenders seeking to push rates upwards will likely pursue
"market-influenced" methodologies, using tranche financing that
have occasionally been endorsed in commercial real estate cases.
See, e.g., Pacific First Bank v. Boulders on the River, Inc. (In re
Boulders on the River, Inc.), 164 B.R. 99, 105 (9th Cir B.A.P.
1994). In the market-influenced approach, to the extent that a
loan is less than 70% of the value of the property securing the
loan, a market interest rates have prevailed. To the extent that
the loan exceeds 70 percent of the value, the lender is exposed to
additional risk and should therefore be compensated by a
corresponding increase in the interest rate.
Lenders seeking to counter a negative amortization plan will likely
challenge feasibility under § 1129(a)(11). The feasibility test
requires the court to assess—by a preponderance of the
evidence—whether a plan's chance of success is probable as
opposed to possible, i.e., not likely to be followed by liquidation
or further financial reorganization. Pertinent factors to be
considered include "(1) the adequacy of the debtor's capital
structure; (2) the earning power of its business; (3) economic
conditions; (4) the ability of the debtor's management; (5) the
probability of the continuation of the same management; and (6) any
other related matters which determine the prospects of a
sufficiently successful operation to enable performance of the
provisions of the plan." 7 Collier on Bankruptcy ¶ 1129.02 (16th
2020).
Conclusion
Before COVID-19, bankruptcy courts somewhat sparingly permitted
negative amortization plans. The present pandemic recovery may
present ideal conditions for travel-related businesses (especially
hotels) seeking to preserve and rebuild cash during the multiyear
recovery to propose reorganization plans using negative
amortization to bridge the gap. We expect bankruptcy courts to
give such debtors a fair shake, particularly where they are
responding to factors outside their control. Nevertheless, the
path to confirmation will likely remain at least somewhat
challenging. Those debtors demonstrating strong pre-pandemic
occupancy and revenues, coupled with meaningful equity, will likely
have the greatest shot at success. Debtors with no or insufficient
equity will likely find the road to confirmation of a negative
amortizing plan more difficult.
1. Interest that had accrued prior to the effective date was added
to the principal amount of secured indebtedness. The entire
indebtedness then accrued interest, but payments were only to be
made as development of parcels of the project were completed and
sold. In re Pine Mountain, 80 B.R. at 174.
2. Though found unconfirmable on other grounds (sufficient to pay
the present value of the original principal but excluded an
additional $3 million in penalties, fees and accrued interests
claimed by the creditor), the court addressed each of the negative
amortization factors to facilitate an amendment to the plan. In re
Aspen Village at Lost Mountain Assisted Living, LLC, 609 B.R. 555,
574 (Bankr. N.D. Ga. November 26, 2019).
3. “[O]ther courts have generally approved 1% to 3%, but
respondent claims a risk adjustment in this range is inadequate.
The issue need not be resolved here; it is sufficient to note that
courts must choose a rate high enough to compensate a creditor for
its risk but not so high as to doom the bankruptcy plan. Till v.
SCS Credit Corp., 541 U.S. 465, 468, 124 S. Ct. 1951, 1955 (2004).
[] White & Case Attorneys See More Chapter 11s, Distress in 2021
----------------------------------------------------------------
Bojan Guzina and Andrew O'Neill of White & Case LLP wrote an
article on JDSupra titled "Chapter 11 cases soared in 2020, with
more distress likely in 2021."
In 2020, commercial chapter 11 bankruptcy filings climbed to their
highest levels in recent years, as COVID-19 disruption sparked
sharp declines in GDP and volatile stock market swings. Notably,
the pandemic accelerated the restructurings of some companies that
were already on the precipice of financial distress, particularly
in the retail, energy, travel and hospitality sectors.
Year-on-year commercial chapter 11 filings increased 29% in 2020.
The 7,128 filings in 2020 were the most since 2012, which saw 7,789
filings, according to data prepared by Epiq for the American
Bankruptcy Institute.
However, after a significant spike in the number of commercial
chapter 11 filings in the second and third quarters of 2020, the
pace of new chapter 11 filings slowed significantly toward the end
of the year.
We enter 2021 with continued exuberance in the capital markets and
soaring stock valuations, but also with record levels of US
corporate debt. As government support measures wind down and
longer-term business impacts from the pandemic are realized in
2021, chapter 11 filings are expected to resume their earlier 2020
pace or perhaps even increase, as many businesses that were spared
the worst of the economic fallout may have to right-size their
balance sheets and adjust post-pandemic business models. This
upward trend in filings would be particularly acute if the current
market conditions result in inflationary pressures and a rise in
interest rates.
COVID-19 as catalyst and accelerant for 2020 filing increase
In certain sectors, the impact of COVID-19 lockdowns was the
catalyst for the spike in chapter 11 volume, and in
others—particularly energy and retail—the effects of the
pandemic hastened the need for many already-distressed businesses
to file. COVID-19 also initially roiled the markets early in 2020,
as the S&P 500 fell by more than a third from the beginning of
February to the end of March as the pandemic accelerated. In Q2
2020, US GDP fell by a record 31.4% and large numbers of businesses
were forced to seek bankruptcy protection.
Market disruption could have been worse and the number of new
chapter 11 filings would likely have been higher were it not for
wide-ranging stimulus measures. The CARES Act, signed into US law
at the end of March 2020, provided more than US$2 trillion of
financial support for businesses and consumers, with US$454 billion
made available to the Federal Reserve to provide loans and loan
guarantees to businesses.
At the same time, banks and other capital providers showed a
willingness to modify loans, relax covenants and provide additional
liquidity to allow borrowers to survive the pandemic. And, for
many large businesses with the ability to raise further funding
under their current debt documents, there was seemingly unlimited
appetite for additional leveraged loans and high yield debt in the
capital markets.
Government action and the resulting abundance of capital paid
immediate dividends. The S&P 500 jumped almost 13% in April and
ended the year with a total return of almost 18%. US GDP increased
by 33.4% in Q3, completely erasing the losses from Q2, and grew by
an additional 4% in Q4. The major stock market indices posted
all-time highs in early 2021.
More distress anticipated in 2021 and beyond
Although government stimulus funds remain available for certain
businesses (and more stimulus measures are expected under the Biden
administration), these measures will likely wind down in time,
which may lead to more defaults and bankruptcy filings. Moreover,
the recent surge in the number of so-called zombie companies --
ones for which interest expense exceeds operating income-- portends
a need for significant de-leveraging.
It is less clear when or if private capital will become less
abundant, and how long already over-leveraged issuers will be able
to access the capital markets and continue to add more debt to
their balance sheets. US leveraged loan default rates were already
increasing steadily throughout 2020 to reach 4.5% in December, up
from 1.7% at the end of 2019, according to ratings agency Fitch,
with further increases anticipated for 2021—particularly if the
capital markets become less hospitable to leveraged issuers.
Chapter 11 filings were also kept in check by creditors’
reluctance to enforce remedies and realize losses when asset values
were so uncertain due to the pandemic. This has been especially
pertinent in sectors such as commercial real estate, travel,
leisure and aviation, where businesses often have no obvious
alternative operators should lenders opt to foreclose and take
control of troubled companies’ assets. As markets stabilize and a
clearer picture forms of the longer-term, post-pandemic business
landscape, lenders will have a better sense of where the value of
their collateral breaks. This, in turn, will lead to more
restructuring activity and a likely uptick in the number of chapter
11 filings.
2020 saw fewer freefall cases than 2019
According to the Debtwire Restructuring Database, when companies
initiated chapter 11 proceedings in 2020, they were fairly evenly
divided between “freefall” cases (where a business enters
chapter 11 without an agreement with creditors on the terms of its
restructuring) and pre-packaged or pre-arranged cases (where the
terms of the restructuring have been agreed upon, and in the case
of pre-packaged proceedings, voted on by the creditors prior to the
filing).
This stands in sharp contrast to 2019, when there were three times
as many freefall cases as pre-packaged or pre-arranged filings.
This suggests that, in 2020, companies facing an inability to
refinance or take out existing debt—possibly due to the impact of
COVID-19—more often chose to address those immediate balance
sheet issues through pre-packaged or pre-arranged cases, rather
than tinker too heavily with their operations and business models
given the business and asset value uncertainties related to the
pandemic.
Freefall chapter 11 cases take longer to resolve on average and as
a consequence are generally more expensive—more time translates
to higher costs in the form of professional fees and other
administrative costs during the pendency of the cases. Freefall
cases are also necessarily more uncertain, which can be more
damaging to the company’s business operations and relationships
with customers, vendors and employees. However,
debtor-in-possession (DIP) financing is often obtained prior to the
filing, providing the company operating capital to fund the case
and providing assurance to stakeholders that the company will
continue to operate in the ordinary course. DIP financing must be
approved by the bankruptcy court and usually ranks higher in lien
and payment priority than existing debt.
Although it is often preferable to agree on restructuring terms
before the filing, if creditors are unable to agree on where value
breaks and how the restructuring should proceed a freefall filing
may be the only option. And, despite the increased cost and
uncertainty of a freefall, it does allow for more time and latitude
to effect a true operational restructuring, which is often not the
case in pre-packaged or pre-arranged cases.
Pre-packaged and pre-arranged cases are generally less disruptive
to a company's business but are equally effective in reducing the
company’s funded debt. In addition, these cases can last anywhere
from a day or two on the extreme short end of the spectrum, to
several months, instead of potentially years with certain freefall
cases. The shorter chapter 11 process typically results in
significantly lower administrative costs than in freefall cases,
although it is often the case that more professional fees are
incurred prior to a pre-packaged or pre-arranged chapter 11 filing
while the terms of the restructuring plan are being negotiated. In
addition, to secure consensus from different classes of creditors,
pre-packaged and pre-arranged cases sometimes run the risk of not
going far enough to restructure the company’s debts, which
increases the risk of the business encountering further distress
following its emergence from bankruptcy.
Although the data has not yielded a clear trend, as business
conditions normalize and stimulus tapers off it will be interesting
to monitor the respective levels of freefall and pre-packaged and
pre-arranged cases. On the one hand, it is likely that companies in
certain sectors will need to undergo a significant reduction in
footprint and change in business model due to lasting changes
resulting from the pandemic. These companies could likely be better
served by a freefall case with a significant operational
restructuring component, as well as debt restructuring. On the
other hand, many companies have survived COVID-19 by expanding
their balance sheets to levels that will be hard to sustain, even
if their business returns to pre-pandemic levels. For these
companies, the faster and cheaper pre-packaged or pre-arranged
routes will likely be more attractive as a means to right-size
their balance sheets without the uncertainty and costs associated
with a freefall case.
[^] BOND PRICING: For the Week from February 22 to 26, 2021
-----------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
Avis Budget Car Rental
LLC / Avis Budget
Finance Inc CAR 10.500 119.220 5/15/2025
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Basic Energy
Services Inc BASX 10.750 19.250 10/15/2023
Basic Energy
Services Inc BASX 10.750 19.278 10/15/2023
Briggs & Stratton BGG 6.875 8.625 12/15/2020
Bristow Group Inc/old BRS 6.250 6.250 10/15/2022
Bristow Group Inc/old BRS 4.500 0.001 6/1/2023
Buffalo Thunder
Development
Authority BUFLO 11.000 50.000 12/9/2022
CBL & Associates LP CBL 5.250 43.250 12/1/2023
CHS/Community Health
Systems Inc CYH 6.875 99.773 2/1/2022
Celgene Corp CELG 3.250 104.640 2/20/2023
Dean Foods Co DF 6.500 1.925 3/15/2023
Dean Foods Co DF 6.500 2.000 3/15/2023
Diamond Offshore
Drilling Inc DOFSQ 7.875 17.000 8/15/2025
Diamond Offshore
Drilling Inc DOFSQ 3.450 21.500 11/1/2023
ENSCO International VAL 7.200 8.500 11/15/2027
EnLink Midstream
Partners LP ENLK 6.000 60.500 N/A
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Energy Future
Competitive
Holdings Co LLC TXU 0.988 0.072 1/30/2037
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 31.778 7/15/2023
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 32.180 7/15/2023
Expedia Group Inc EXPE 7.000 110.139 5/1/2025
Federal Farm Credit
Banks Funding Corp FFCB 0.470 99.889 1/22/2024
Federal Home Loan
Banks FHLB 1.250 99.873 3/2/2021
Federal Home Loan
Mortgage Corp FHLMC 0.440 99.863 6/2/2023
Fleetwood
Enterprises Inc FLTW 14.000 3.557 12/15/2011
Frontier
Communications FTR 10.500 57.125 9/15/2022
Frontier
Communications FTR 8.750 54.500 4/15/2022
Frontier
Communications FTR 7.125 52.750 1/15/2023
Frontier
Communications FTR 6.250 52.750 9/15/2021
Frontier
Communications FTR 9.250 51.500 7/1/2021
Frontier
Communications FTR 10.500 56.701 9/15/2022
Frontier
Communications FTR 10.500 56.701 9/15/2022
GNC Holdings Inc GNC 1.500 1.250 8/15/2020
GTT Communications GTT 7.875 18.364 12/31/2024
GTT Communications GTT 7.875 18.389 12/31/2024
Global Eagle
Entertainment Inc GEENQ 2.750 0.010 2/15/2035
Goodman Networks Inc GOODNT 8.000 22.500 5/11/2022
Harley-Davidson
Financial
Services Inc HOG 1.168 99.860 3/2/2021
Hi-Crush Inc HCR 9.500 0.063 8/1/2026
Hi-Crush Inc HCR 9.500 0.703 8/1/2026
High Ridge Brands Co HIRIDG 8.875 1.500 3/15/2025
High Ridge Brands Co HIRIDG 8.875 1.137 3/15/2025
HighPoint Operating HPR 7.000 52.638 10/15/2022
Hornbeck Offshore
Services Inc HOSS 5.875 0.645 4/1/2020
J Crew Brand LLC /
J Crew Brand Corp JCREWB 13.000 53.725 9/15/2021
LSC Communications LKSD 8.750 8.250 10/15/2023
LSC Communications LKSD 8.750 12.875 10/15/2023
Liberty Media Corp LMCA 2.250 46.765 9/30/2046
MAI Holdings Inc MAIHLD 9.500 16.500 6/1/2023
MAI Holdings Inc MAIHLD 9.500 16.500 6/1/2023
MAI Holdings Inc MAIHLD 9.500 16.500 6/1/2023
MF Global Holdings MF 6.750 15.625 8/8/2016
MF Global Holdings MF 9.000 15.625 6/20/2038
Mashantucket Western
Pequot Tribe MASHTU 7.350 15.750 7/1/2026
Men's Wearhouse TLRD 7.000 1.750 7/1/2022
Men's Wearhouse TLRD 7.000 1.307 7/1/2022
NWH Escrow Corp HARDWD 7.500 28.512 8/1/2021
NWH Escrow Corp HARDWD 7.500 28.512 8/1/2021
Navajo Transitional
Energy Co LLC NVJOTE 9.000 65.500 10/24/2024
Neiman Marcus Group NMG 7.125 4.345 6/1/2028
Neiman Marcus Group
LTD LLC / Neiman
Marcus Group LLC /
Mariposa
Borrower / NMG NMG 8.000 4.863 10/25/2024
Neiman Marcus Group
LTD LLC / Neiman
Marcus Group LLC /
Mariposa
Borrower / NMG NMG 14.000 27.250 4/25/2024
Neiman Marcus Group
LTD LLC / Neiman
Marcus Group LLC /
Mariposa
Borrower / NMG NMG 8.750 4.863 10/25/2024
Neiman Marcus Group
LTD LLC / Neiman
Marcus Group LLC /
Mariposa
Borrower / NMG NMG 8.000 4.863 10/25/2024
Neiman Marcus Group
LTD LLC / Neiman
Marcus Group LLC /
Mariposa
Borrower / NMG NMG 14.000 27.250 4/25/2024
Neiman Marcus Group
LTD LLC / Neiman
Marcus Group LLC /
Mariposa
Borrower / NMG NMG 8.750 4.863 10/25/2024
Nine Energy Service NINE 8.750 48.271 11/1/2023
Nine Energy Service NINE 8.750 47.439 11/1/2023
Nine Energy Service NINE 8.750 47.480 11/1/2023
Northwest Hardwoods HARDWD 7.500 30.750 8/1/2021
Northwest Hardwoods HARDWD 7.500 28.310 8/1/2021
OMX Timber Finance
Investments II LLC OMX 5.540 0.573 1/29/2020
Optimas OE Solutions
Holding LLC /
Optimas OE
Solutions Inc OPTOES 8.625 90.000 6/1/2021
Optimas OE Solutions
Holding LLC /
Optimas OE
Solutions Inc OPTOES 8.625 90.000 6/1/2021
Pride International VAL 6.875 7.250 8/15/2020
Pride International VAL 7.875 10.858 8/15/2040
Prologis LP PLD 3.375 109.707 2/20/2024
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Revlon Consumer
Products Corp REV 6.250 33.446 8/1/2024
Rolta LLC RLTAIN 10.750 2.000 5/16/2018
Sears Holdings Corp SHLD 8.000 1.410 12/15/2019
Sears Holdings Corp SHLD 6.625 6.110 10/15/2018
Sears Holdings Corp SHLD 6.625 3.354 10/15/2018
Sears Roebuck
Acceptance Corp SHLD 7.500 0.672 10/15/2027
Sears Roebuck
Acceptance Corp SHLD 6.750 0.687 1/15/2028
Sears Roebuck
Acceptance Corp SHLD 6.500 0.735 12/1/2028
Sears Roebuck
Acceptance Corp SHLD 7.000 0.663 6/1/2032
Sempra Texas
Holdings Corp TXU 5.550 13.500 11/15/2014
Summit Midstream
Partners LP SMLP 9.500 44.500 N/A
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Transworld Systems TSIACQ 9.500 30.000 8/15/2021
ViacomCBS Inc VIAC 2.900 104.057 6/1/2023
Voyager Aviation
Holdings LLC /
Voyager Finance Co VAHLLC 9.000 60.070 8/15/2021
Voyager Aviation
Holdings LLC /
Voyager Finance Co VAHLLC 9.000 60.386 8/15/2021
*********
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.
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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
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Monthly Operating Reports are summarized in every Saturday edition
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The Sunday TCR delivers securitization rating news from the week
then-ending.
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Point your Web browser to http://TCRresources.bankrupt.com/and use
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***