/raid1/www/Hosts/bankrupt/TCR_Public/210310.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, March 10, 2021, Vol. 25, No. 68
Headlines
218 JACKSON: Case Summary & 10 Unsecured Creditors
41 SHERBROOKE: Voluntary Chapter 11 Case Summary
ADVANCED POWER: April 8 Hearing on Disclosure Statement
AIR FLIGHT: U.S. Trustee Unable to Appoint Committee
AIRPORT VAN: Hires Barnes & Thornburg as Special Corporate Counsel
ALAMO CHANDLER: Unsecureds to Get Profit Share for 3 Years
ALAMO DRAFTHOUSE: Denton Location Not Part of Chapter 11 Filing
ALLIED UNIVERSAL: Moody's Completes Review, Retains B3 CFR
ALPHA MEDIA: Committee Hires Dundon Advisers as Financial Advisor
ALPHA MEDIA: Committee Seeks to Hire Hahn Loeser as Lead Counsel
ALPHA MEDIA: Committee Taps Hirschler Fleischer as Local Counsel
AMERICAN AIRLINES: Borrowing $7.5 Billion in Loyalty-Backed Debt
ANKURA CONSULTING: Moody's Assigns First Time B3 CFR
APFS STAFFING: Moody's Completes Review, Retains B2 CFR
ARAMARK SERVICES: Moody's Completes Review, Retains Ba3 CFR
ARCHDIOCESE OF NEW ORLEANS: Commercial Creditors' Panel Appointed
AREU STUDIOS: Greenberg Georgia Keeps Ozzie Areu as CEO
AZZIL GRANITE: April 15 Hearing on Disclosure Statement
BEL AIRE PROPERTIES: Unsecureds to Get Monthly Payouts for 3 Years
BELVIEU BRIDGE: Case Summary & 2 Unsecured Creditors
BLACK KNIGHT: Moody's Completes Review, Retains Ba2 CFR
BLEU'SPA INC: Further Fine-Tunes Plan Documents
BLEU'SPA INC: Unsecured Creditors Will Recover 100% Under Plan
BRAND INDUSTRIAL: Moody's Affirms B3 CFR & Alters Outlook to Neg.
BRINK'S COMPANY: Moody's Completes Review, Retains Ba2 CFR
CABLE ONE: Moody's Hikes Rating on $800MM Secured Notes to Ba2
CARBONLITE HOLDINGS: Case Summary & 40 Largest Unsecured Creditors
CARBONLITE HOLDINGS: Contemplates May Auction for Assets
CARBONLITE HOLDINGS: Hits Chapter 11 Bankruptcy Protection
CHESAPEAKE ENERGY: Pays $5.3M Restitution in Deal w/ PA Atty. Gen.
CICI'S HOLDINGS: Court Confirms Prepackaged Plan
COLUMBUS MCKINNON: Moody's Puts Ba3 CFR Under Review for Downgrade
COMPASS GROUP: Moody's Affirms Ba3 CFR & Rates Unsecured Notes B1
CORELOGIC INC: Moody's Completes Review, Retains Ba2 Rating
CYPRUS MINES: U.S. Trustee Appoints Tort Claimants' Committee
D. J. GUZZARDO: May 4 Plan Confirmation Hearing Set
DIAMOND BC: Planned IPO No Impact on Moody's B3 CFR
ELECTROTEK CORP: Voluntary Chapter 11 Case Summary
FAIR ISAAC: Moody's Completes Review, Retains Ba2 CFR
FERRELLGAS LP: Seeks $2.2 Billion to Refinance Existing Debt
FERRELLGAS PARTNERS: Seeks to Hire PwC to Provide Tax Services
FIELDWOOD ENERGY: Lexon Says Plan Patently Unconfirmable
FIREBALL REALTY: Court Approves Disclosure Statement
FRONTDOOR INC: Moody's Completes Review, Retains Ba3 CFR
GENESIS INVESTMENT: April 7 Disclosure Statement Hearing Set
GTT COMMUNICATIONS: Starts Formal Creditor Talks on Bankruptcy Plan
H2 BEVERAGES: Court Approves Reorganization Plan
HERTZ CORP: Unsecureds to Recover Not More Than 70% in Joint Plan
IHS MARKIT: Moody's Completes Review, Retains Ba1 CFR
INTELSAT SA: Appointment of Equity Committee Sought
INTELSAT SA: Shareholders Ask Court for Committee Representation
JFK HEATING: Case Summary & 20 Largest Unsecured Creditors
JSAA REALTY: Lee Says Financial Projections Inadequate
JUST ENERGY: Files for Bankruptcy After Texas Freeze Hit
JUST ENERGY: U.S. Judge Grants Provisional Relief
KNOTEL CANADA: Case Summary & 30 Largest Unsecured Creditors
KNOTEL INC: Polsinelli, Arnold & Porter Advise Essential Capital
LAKE CHARLES: Voluntary Chapter 11 Case Summary
LEARNING CARE 2: Moody's Alters Outlook on Caa1 CFR to Stable
LEGENDS HOSPITALITY: Moody's Completes Review, Retains B3 CFR
LONGHORN JUNCTION: Plan to Pay Romspen $19.5M by Oct. 31
LPL HOLDINGS: Moody's Hikes CFR to Ba1 on Resilient Profitability
MAEFIELD DEVELOPMENT: Time Square Edition Nears Foreclosure
MALLINCKRODT PLC: Taps Ernst & Young as Tax Consultant
MCKEESPORT AREA SD: Moody's Assigns Ba1 Issuer Rating
MEDIA LODGE: Seeks to Hire 'Ordinary Course' Professionals
MEDLEY LLC: Files for Chapter 11 With Debt-For-Equity Plan
MENUCHA ENTERPRISE: Case Summary & 20 Largest Unsecured Creditors
MMZ HOLDINGS: Seeks to Hire Michael Jay Berger as Counsel
MSCI INC: Moody's Completes Review, Retains Ba2 CFR
MURPHY OIL: Moody's Rates New Sr. Unsecured Notes Due 2028 'Ba3'
NCL FINANCE: Moody's Rates Planned $550MM Unsecured Note 'Caa1'
OLIN CORP: New Bond Redemption No Impact on Moody's Ba2 CFR
OWENS & MINOR: Moody's Rates New $500MM Unsecured Notes 'B2'
PAPER SOURCE: Seeks to Hire Epiq Corporate as Claims Agent
PARK SEVEN: Arizona Property Rental to Fund Plan Payments
PLAYTIKA HOLDING: Moody's Raises CFR to Ba3 on Revenue Growth
PROVATION SOFTWARE: Moody's Completes Review, Retains B3 CFR
REALOGY GROUP: Moody's Completes Review, Retains B2 CFR
RHINO BARE: Seeks to Hire Russ August as Special Counsel
SCHREINER'S FINE SAUSAGES: Unsecureds to Recover 100% in 66 Months
SCP EYE CARE: Moody's Assigns B3 CFR, Outlook Stable
SHEARER'S FOODS: Moody's Completes Review, Retains B2 CFR
STEREOTAXIS INC: Signs Office Lease Agreement With Globe Building
TEMPUR SEALY: Moody's Affirms Ba3 CFR & Alters Outlook to Positive
TERMINIX COMPANY: Moody's Completes Review, Retains Ba2 CFR
TRANS UNION: Moody's Completes Review, Retains Ba2 CFR
TWITTER INC: $1.25BB Notes Issuance No Impact on Moody's Ba2 CFR
UTZ QUALITY: Moody's Completes Review, Retains B1 CFR
VALARIS PLC: Court Confirms Debt-for-Equity Plan
W.R. GRACE: Moody's Puts Ba2 CFR Under Review for Downgrade
WASHINGTON PRIME: Preps for Chapter 11 Bankruptcy Filing
WATERSHED HOLDINGS: U.S. Trustee Unable to Appoint Committee
WEI SALES: Moody's Completes Review, Retains B1 CFR
WORLD OF DANCE: Trustee Seeks to Hire Business Valuation Expert
[*] Bankruptcy Cases in Hawaii Declined Again Despite Pandemic
*********
218 JACKSON: Case Summary & 10 Unsecured Creditors
--------------------------------------------------
Debtor: 218 Jackson LLC
111 S. Maitland Ave.
Maitland, FL 32751
Chapter 11 Petition Date: March 8, 2021
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 21-00983
Debtor's Counsel: Justin M. Luna, Esq.
Daniel A. Velasquez, Esq.
LATHAM, LUNA, EDEN & BEAUDINE, LLP
P.O. Box 3353
Orlando, FL 32802-3353
Tel: (407) 481-5800
Fax: (407) 481-5801
E-mail: jluna@lathamluna.com
dvelasquez@lathamluna.com
Total Assets as of January 31, 2020: $1,283,900
Total Liabilities as of January 31, 2021: 41,287,387
The petition was signed by Amos Vizer, member of TwoChi, LLC.
A copy of the petition containing, among other items, a list of the
Debtor's 10 unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/D5Z6P5Y/218_Jackson_LLC__flmbke-21-00983__0001.0.pdf?mcid=tGE4TAMA
41 SHERBROOKE: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: 41 Sherbrooke Rd LLC
35 Stonywell Court
Dix Hills, NY 11746
Business Description: 41 Sherbrooke Rd LLC owns four properties in
New York having a total current assets of
$825,000.
Chapter 11 Petition Date: March 7, 2021
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 21-70400
Judge: Hon. Robert E. Grossman
Debtor's Counsel: Raymond W. Verdi, Jr., Esq.
LAW OFFICES OF RAYMOND W. VERDI, JR.
116 East Main Street, Suite C
Patchogue, NY 11772
Tel: (631) 289-2670
E-mail: rverdi@verdilawpc.com
Total Assets: $854,351
Total Liabilities: $2,190,000
The petition was signed by Joseph Johns, managing member.
The Debtor stated it has no creditors holding unsecued claims.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/T7I45CQ/41_Sherbrooke_Rd_LLC__nyebke-21-70400__0001.0.pdf?mcid=tGE4TAMA
ADVANCED POWER: April 8 Hearing on Disclosure Statement
-------------------------------------------------------
Judge Peter D. Russin has entered an order setting a hearing to
consider approval of the Disclosure Statement of Advanced Power
Technologies, LLC, on Thursday, April 8, 2021 at 10:30 a.m. via
Video Conference by Zoom for Government. The last day for filing
and serving objections to the Disclosure Statement is on Thursday,
April 1, 2021.
As reported in the Troubled Company Reporter, Advanced Power
Technologies, LLC, submitted a Chapter 11 Plan of Reorganization
and a Disclosure Statement. Under the Plan, the Class 3 Allowed
Unsecured Claim of Nesco Specialty Rentals, which asserts a claim
of $2.015 million, will recover 14.88% of its claims. Class 7
Allowed General Unsecured Claims in the allowed amount of
$4,104,790 will recover 1.22% of their claims.
The sources of consideration for distributions under the Plan
include the Debtor's cash on hand as of the Effective Date as well
the future profits of the Reorganized Debtor.
Attorneys for the Debtor:
Bradley S. Shraiberg, Esq.
Joshua B. Lanphear, Esq.
SHRAIBERG, LANDAU & PAGE, P.A.
2385 NW Executive Center Drive, Suite 300
Boca Raton, FL 33431
Telephone: (561) 443-0800
Facsimile: (561) 998-0047
E-mail: bss@slp.law
E-mail: jlanphear@slp.law
About Advanced Power Technologies
Advanced Power Technologies, LLC --
http://www.advancedpowertech.com/-- offers interior and exterior
lighting, signage, and electrical service needs throughout the
United States and Canada. It works with commercial, hospitality,
industrial, institutional, restaurant, and retail clients to save
energy and reduce operating costs.
Advanced Power Technologies, LLC, based in Pompano Beach, Fla.,
filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 20-13304) on
March 11, 2020. In the petition signed by Devin Grandis, president,
the Debtor was estimated to have $1 million to $10 million in both
assets and liabilities.
Judge Peter D. Russin Bradley replaced Judge Paul G Hyman Jr., who
previously oversees the case. Bradley S. Shraiberg, Esq., at
Shraiberg Landau & Page PA, serves as Debtor's bankruptcy counsel.
The U.S. Trustee was not able to appoint an Official Committee of
Unsecured Creditors for the Debtor.
AIR FLIGHT: U.S. Trustee Unable to Appoint Committee
----------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Air Flight Inc., according to court dockets.
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.
AIRPORT VAN: Hires Barnes & Thornburg as Special Corporate Counsel
------------------------------------------------------------------
Airport Van Rental, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the Central District of California to
employ Barnes & Thornburg LLP, as their special corporate counsel.
The firm will advise the Debtors generally concerning the proper
registration of their businesses in California, Georgia, Nevada,
Texas and Utah, along with related duties and state filings.
The firm will charge its current hourly rates for its services. It
will also seek reimbursement of its expenses.
William Kirshenbaum, Esq., a partner at Barnes, disclosed in a
court filing that the firm and its professionals are disinterested
persons as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
William B. Kirshenbaum, Esq.
Barnes & Thornburg LLP
2029 Century Park East, Suite 300
Los Angeles, CA 90067
Tel: (310) 284-3894
About Airport Van Rental
Airport Van Rental -- https://www.airportvanrental.com -- is a van
rental company offering short and long-term rentals for road trips,
weekend journeys, moving, and any other group outings.
Airport Van Rental and its affiliates filed their voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
C.D. Calif. Lead Case No. 20-20876) on Dec. 11, 2020. Yazdan Irani,
president and chief executive officer, signed the petitions.
At the time of the filing, Airport Van Rental disclosed assets of
between $10 million and $50 million and liabilities of the same
range.
The Debtors tapped Danning, Gill, Israel & Krasnoff, LLP as their
bankruptcy counsel, CSA Partners LLC as financial consultant, Joel
Glaser, APC as litigation counsel, and Barnes & Thornburg LLP as
their special corporate counsel. Kevin S. Tierney is the Debtors'
chief reorganization officer.
The U.S. Trustee for Region 16 appointed an official committee of
unsecured creditors on Feb. 3, 2021. The committee is represented
by Elkins Kalt Weintraub Reuben Gartside, LLP.
ALAMO CHANDLER: Unsecureds to Get Profit Share for 3 Years
----------------------------------------------------------
Alamo Chandler, LLC, submitted a First Amended Joint Plan of
Reorganization dated March 1, 2021.
This Plan is being proposed by the Debtors to reorganize their
liabilities, so as to permit continued operations from which
Creditors and Interest Holders can be paid, and avoid the
disastrous effects of a liquidation.
Class 2-B consists of the Allowed Secured Claim of the SBA against
Alamo Gilbert. The SBA asserts that the amount of its Claim is
$112,531 and that its claim is secured by a lien on substantially
all of the assets of Alamo Gilbert. Alamo Gilbert disputes that
the SBA's Claim is secured. In accordance with 11 U.S.C. Sec.
506(a), then, the entirety of the SBA's Claim is Unsecured. The
SBA's Claim against Alamo Gilbert, in its entirety, will be deemed
to be Unsecured and treated as a part of, and in accordance with
the treatment in the Plan for Class 5-A.
Class 3-C Allowed Secured Claim of the SBA consists of the Allowed
Secured Claim of the SBA against Alamo Tempe. The SBA asserts that
the amount of its Claim is $150,031 and that its claim is secured
by a lien on substantially all of the assets of Alamo Tempe. Alamo
Tempe disputes that the SBA's Claim is secured. The SBA's Claim
against Alamo Gilbert, in its entirety, will be deemed to be
Unsecured and treated as a part of, and in accordance with the
treatment in the Plan for Class 5-A.
Class 4-C Allowed Secured Claim of AmEx against Alamo Chandler in
the amount of $183,825 will be deemed to be Unsecured and treated
as a part of, and in accordance with the treatment in the Plan for
Class 5-A.
Class 4-D Allowed Secured Claim of the SBA against Alamo Chandler
in the amount of $150,031 will be deemed to be Unsecured and
treated as a part of, and in accordance with the treatment in the
Plan for Class 5-A.
Class 5-A Allowed Unsecured Claims will only receive payment from
the Projected Disposable Income of the Debtor against which each
Creditor has an Allowed Claim. Distributions on account of Allowed
Claims in this Class will be made quarterly, and on a pro rata
basis. Upon the third anniversary of the Effective Date,
irrespective of the amount any holder of a Claim within this Class
5-A has received on account of such Claim, the unpaid balance of
all of the Claims within this Class will be deemed extinguished and
discharged in full.
The Plan will be funded through the Reorganized Debtors' continued
operations.
Attorneys for the Debtors:
Wesley D. Ray (SBN 026351)
Philip R. Rudd (SBN 014026)
SACKS TIERNEY P.A.
4250 N. Drinkwater Blvd., 4th Floor
Scottsdale, AZ 85251-3693
Telephone: 480.425.2600
Facsimile: 480.970.4610
Wesley.Ray@SacksTierney.com
Philip.Rudd@SacksTierney.com
A copy of the First Amended Joint Plan of Reorganization is
available at https://bit.ly/2OwzDVy from PacerMonitor.com.
About Alamo Chandler
Alamo Tempe LLC, Alamo Gilbert LLC,and Alamo Chandler LLC are Alamo
Drafthouse franchisees, owning three theatre locations in Phoenix.
Craig Paschich of Paschich Alamo Holdings LLC is the majority owner
of these franchises.
Alamo Drafthouse Cinema is an American cinema chain founded in 1997
in Austin, Texas and famous for serving dinner and drinks during
the movie.
Alamo Chandler LLC, Alamo Tempe LLC, and Alamo Gilbert LLC sought
Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 20-05017) on
May 13, 2020.
In the petitions signed by Craig Paschich, member of Paschich Alamo
Holdings, Alamo Chandler disclosed total assets of $2,790,300, and
total liabilities of $2,961,665; Alamo Gilbert listed total assets
of $2,040,234 and total liabilities of $1,732,004; and Alamo Tempe
LLC disclosed total assets of $1,023,326 and total liabilities of
$836,730.
Wesley D. Ray, Esq., at Sacks Tierney P.A., serves as bankruptcy
counsel to the Debtors.
ALAMO DRAFTHOUSE: Denton Location Not Part of Chapter 11 Filing
---------------------------------------------------------------
Denton Record Chronicle reports that Denton's Alamo Drafthouse,
which is independently operated, will not be affected by the Alamo
corporation's decision to file for Chapter 11 bankruptcy
protection, the theater chain announced in a news release Thursday,
March 4, 2021.
Seven Alamo Drafthouse Cinemas in the Dallas-Fort Worth area and
Twin Cities — which includes locations in Dallas, Denton &
Tarrant counties — are owned by father and son Bill C. DiGaetano
and Bill D. DiGaetano, who signed a franchise agreement with the
corporation in 2010. The locations are not part of the bankruptcy
filing Alamo announced Wednesday and plans to reopen the franchised
theaters over the next several months with wider distribution of
the COVID-19 vaccine have not changed, according to the release.
The franchise owners announced in September that they would close
North Texas theaters due to the lack of new releases.
"Thanks to our bank, investors, local municipalities and federal
government support, we are targeting a reopening this summer," Bill
C. DiGaetano said. "We cannot wait to see you all again in a safe,
fun and of course, over-the-top theater experience!"
Alamo corporate plans to close a few underperforming theaters, but
operations will otherwise run normally during the bankruptcy
process, which is aimed at providing the theater chain capital to
survive the COVID-19 pandemic.
About Alamo Drafthouse Cinema
The Alamo Drafthouse Cinema -- https://drafthouse.com/ -- is an
American cinema chain founded in 1997 in Austin, Texas that is
famous for its strict policy of requiring its audiences to maintain
proper cinemagoing etiquette. Known for offering full meal and
alcohol service at its theaters, the company also operates a movie
merchandise store and an annual genre film festival, Fantastic
Fest. Alamo Drafthouse had 41 locations as of March 31, 2021, with
23 of those locations ran by franchisees.
On March 3, 2021, Alamo Drafthouse Cinemas Holdings, LLC and 33
affiliated companies filed Chapter 11 petitions (Bankr. D. Del.
Lead Case No. 21-10474).
Alamo Drafthouse 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 Company tapped Young Conaway Stargatt & Taylor LLP as
bankruptcy counsel, Portage Point Partners as its financial
adviser, and Houlihan Lokey Capital as its investment banker. Epiq
Corporate Restructuring, LLC, is the claims agent.
ALLIED UNIVERSAL: Moody's Completes Review, Retains B3 CFR
----------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Allied Universal 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 24, 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
Allied Universal's B3 corporate family rating is pressured by its
primarily debt funded and private equity influenced acquisition
strategies, high financial leverage and short history of generating
free cash flow. The rating is supported by the company's large
revenue scale relative to its peers in the North American security
services industry, stable demand for its offerings a and a track
record of integrating its frequent acquisitions.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
ALPHA MEDIA: Committee Hires Dundon Advisers as Financial Advisor
-----------------------------------------------------------------
The official committee of unsecured creditors of Alpha Media
Holdings, LLC and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia, to retain
Dundon Advisers LLC as their financial advisor.
The firm will render these services:
-- analyzing the debtor-in-possession budget, weekly cash flow
performance, assets and liabilities, and overall financial
condition;
-- reviewing financial and operational information furnished by
the Debtors to the committee;
-- scrutinizing the economic terms of various agreements;
-- analyzing the Debtors' proposed business plans and developing
alternative scenarios, if necessary;
-- assessing the Debtors' various pleadings and proposed
treatment of unsecured creditor claims therefrom;
-- preparing or reviewing avoidance action and claim analyses;
-- assisting the committee in reviewing the Debtors' financial
reports;
-- advising the committee on the current state of the Debtors'
Chapter 11 cases;
-- representing the committee in negotiations with the Debtors
and third parties, as necessary;
-- if necessary, participating as a witness in hearings before
the bankruptcy court; and
-- providing appropriate and non-duplicative support to the
committee's investment banker, Miller Buckfire & Co., LLC, related
to asset valuation, asset sales and financing matters; and
-- other financial advisory services.
The firm will be paid as follows:
Principal $700 - $750 per hour
Managing Director $600 - $675 per hour
Senior Director $550 - $600 per hour
Director $500 - $550 per hour
Associate Director $450 - $500 per hour
Associate $400 per hour
Peter Hurwitz, a principal at Dundon, disclosed in a court filing
that his firm is a "disinterested person' as defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Peter Hurwitz
Dundon Advisers LLC
440 Mamaroneck Avenue, Fifth Floor
Harrison, NY 10528 USA
Phone: +1 (914) 341-1188 / +1 (914) 523-0227
Fax +1 (212) 202-4437
Email: PH@dundon.com
About Alpha Media Holdings
Alpha Media is a privately held radio broadcast and multimedia
company. Formed in 2009 by a veteran radio executive, Alpha Media
grew through acquisitions and now owns or operates more than 200
radio stations that provide local news, sports, music, and
entertainment to a weekly audience of more than 11 million
listeners in 44 communities across the United States. In addition
to its radio stations, Alpha Media provides digital content through
more than 200 websites and countless mobile applications and
digital streaming services.
Alpha Media and its affiliates sought Chapter 11 protection (Bankr.
E.D. Va. Lead Case No. 21-30209) on Jan. 25, 2021. John Grossi,
chief financial officer, signed the petitions. At the time of the
filing, Alpha Media disclosed estimated assets of $10 million to
$50 million and estimated liabilities of $50 million to $100
million.
Judge Kevin R. Huennekens oversees the cases.
The Debtors tapped Sheppard, Mullin, Richter & Hampton LLP as legal
counsel, Kutak Rock LLP as local counsel, Moelis & Company as
financial advisor, and Ernst & Young LLP as restructuring advisor.
Stretto is the claims and noticing agent.
Wilmington Savings Fund Society, the administrative agent to the
first lien lenders, is represented by Debevoise & Plimpton, LLP and
Hunton Andrews Kurth, LLP.
The U.S. Trustee for Region 4 appointed an official committee of
unsecured creditors on Feb. 3, 2021.
The committee tapped Hahn Loeser & Parks, LLP as its bankruptcy
counsel, Hirschler Fleischer, P.C. as local counsel, Dundon
Advisers LLC as financial advisor, and Miller Buckfire & Co., LLC
as investment banker.
ALPHA MEDIA: Committee Seeks to Hire Hahn Loeser as Lead Counsel
----------------------------------------------------------------
The official committee of unsecured creditors of Alpha Media
Holdings LLC and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to retain
Hahn Loeser & Parks LLP as its lead bankruptcy counsel.
The firm will render these services:
1. coordinate with the committee as to the most efficient
means to discharge its duties;
3. advise the committee concerning its rights, powers, and
duties under Section 1103 of the Bankruptcy Code and advise the
committee concerning the administration of the Debtors' Chapter 11
cases;
4. advise the committee concerning any efforts by the Debtors
or other parties to collect and recover property for the benefit of
the Debtors' estates;
5. advise the committee concerning any post-petition lending
sought by the Debtors;
6. advise the committee in connection with the formulation,
negotiation and confirmation of a plan of liquidation or
reorganization;
7. negotiate and evaluate the Debtors' use of cash collateral,
any proposed debtor-in-possession financing and any other potential
financing alternatives;
8. review the nature, validity and priority of liens asserted
against the property of the Debtors and advise the committee
concerning the enforceability of such liens;
9. investigation of unencumbered assets, liabilities,
financial condition and prior transactions of the Debtors, and
operational issues concerning the Debtors that may be relevant to
the Debtors' Chapter 11 cases;
10. consult with other professionals hired by the committee
about matters related to the cases;
11. assist the committee in connection with any potential
disposition of property of the Debtors' estates;
12. prepare legal papers;
13. prepare responses to pleadings that may filed by other
parties in the Debtors' cases;
14. advise the committee concerning the assumption, assignment
or rejection of the Debtors' proposed executory contracts and
unexpired leases;
15. appear in court, participate in litigation as a
party-in-interest and attend statutory meetings of creditors;
16. assist the committee in claims analysis and resolution
matters;
17. commence litigation necessary to assert rights on behalf of
the committee or further the goals of the committee in the
bankruptcy cases;
18. assist in hearing preparation; and
19. provide other necessary legal services.
The firm will be paid as follows:
Partner $330 - $735 per hour
Of Counsel $230 - $460 per hour
Senior Counsel $385 - $610 per hour
Associates $225 - $355 per hour
Paralegals $130 - $280 per hour
Tech Spec/Law Clerk/Other $150 - $300 per hour
Docket/Library $75 - $105 per hour
Christopher Wick, Esq., a partner at Hahn Loeser, disclosed in a
court filing that his firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Daniel A. DeMarco, Esq.
Christopher B. Wick, Esq.
Rocco I. Debitetto, Esq.
Katie L. Steiner, Esq.
Hahn Loeser & Parks LLP
200 Public Square, Suite 2800
Cleveland, OH 44114
Telephone: (216) 621-0150
Facsimile: (216) 241-2824
Email: dademarco@hahnlaw.com
cwick@hahnlaw.com
ridebitetto@hahnlaw.com
ksteiner@hahnlaw.com
About Alpha Media Holdings
Alpha Media is a privately held radio broadcast and multimedia
company. Formed in 2009 by a veteran radio executive, Alpha Media
grew through acquisitions and now owns or operates more than 200
radio stations that provide local news, sports, music, and
entertainment to a weekly audience of more than 11 million
listeners in 44 communities across the United States. In addition
to its radio stations, Alpha Media provides digital content through
more than 200 websites and countless mobile applications and
digital streaming services.
Alpha Media and its affiliates sought Chapter 11 protection (Bankr.
E.D. Va. Lead Case No. 21-30209) on Jan. 25, 2021. John Grossi,
chief financial officer, signed the petitions. At the time of the
filing, Alpha Media disclosed estimated assets of $10 million to
$50 million and estimated liabilities of $50 million to $100
million.
Judge Kevin R. Huennekens oversees the cases.
The Debtors tapped Sheppard, Mullin, Richter & Hampton LLP as legal
counsel, Kutak Rock LLP as local counsel, Moelis & Company as
financial advisor, and Ernst & Young LLP as restructuring advisor.
Stretto is the claims and noticing agent.
Wilmington Savings Fund Society, the administrative agent to the
first lien lenders, is represented by Debevoise & Plimpton, LLP and
Hunton Andrews Kurth, LLP.
The U.S. Trustee for Region 4 appointed an official committee of
unsecured creditors on Feb. 3, 2021.
The committee tapped Hahn Loeser & Parks, LLP as its bankruptcy
counsel, Hirschler Fleischer, P.C. as local counsel, Dundon
Advisers LLC as financial advisor, and Miller Buckfire & Co., LLC
as investment banker.
ALPHA MEDIA: Committee Taps Hirschler Fleischer as Local Counsel
----------------------------------------------------------------
The official committee of unsecured creditors of Alpha Media
Holdings LLC and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to retain
Hirschler Fleischer, P.C. as its local counsel.
The firm will advise the committee and its lead bankruptcy counsel,
Hahn Loeser & Parks LLP, regarding local rules and local practices
and procedures, and will provide other legal services in connection
with the Debtors' Chapter 11 cases.
The firm will be paid at these rates:
Robert Westermann Shareholder $575
Brittany Falabella Associate $360
Robin Henderson Professional Assistant $160
Robert Westermann, Esq., a partner at Hirschler, disclosed in a
court filing that his firm is a "disinterested person" as defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Robert S. Westermann, Esq.
Brittany B. Falabella, Esq.
Hirschler Fleischer, P.C.
The Edgeworth Building
2100 East Cary Street
Richmond, VA 23223
P.O. Box 500
Richmond, VA 23218-0500
Telephone: (804) 771-9500
Facsimile: (804) 644-0957
Email: rwestermann@hirschlerlaw.com
bfalabella@hirschlerlaw.com
About Alpha Media Holdings
Alpha Media is a privately held radio broadcast and multimedia
company. Formed in 2009 by a veteran radio executive, Alpha Media
grew through acquisitions and now owns or operates more than 200
radio stations that provide local news, sports, music, and
entertainment to a weekly audience of more than 11 million
listeners in 44 communities across the United States. In addition
to its radio stations, Alpha Media provides digital content through
more than 200 websites and countless mobile applications and
digital streaming services.
Alpha Media and its affiliates sought Chapter 11 protection (Bankr.
E.D. Va. Lead Case No. 21-30209) on Jan. 25, 2021. John Grossi,
chief financial officer, signed the petitions. At the time of the
filing, Alpha Media disclosed estimated assets of $10 million to
$50 million and estimated liabilities of $50 million to $100
million.
Judge Kevin R. Huennekens oversees the cases.
The Debtors tapped Sheppard, Mullin, Richter & Hampton LLP as legal
counsel, Kutak Rock LLP as local counsel, Moelis & Company as
financial advisor, and Ernst & Young LLP as restructuring advisor.
Stretto is the claims and noticing agent.
Wilmington Savings Fund Society, the administrative agent to the
first lien lenders, is represented by Debevoise & Plimpton, LLP and
Hunton Andrews Kurth, LLP.
The U.S. Trustee for Region 4 appointed an official committee of
unsecured creditors on Feb. 3, 2021.
The committee tapped Hahn Loeser & Parks, LLP as its bankruptcy
counsel, Hirschler Fleischer, P.C. as local counsel, Dundon
Advisers LLC as financial advisor, and Miller Buckfire & Co., LLC
as investment banker.
AMERICAN AIRLINES: Borrowing $7.5 Billion in Loyalty-Backed Debt
----------------------------------------------------------------
American Airlines Group Inc. (NASDAQ: AAL) on March 8, 2021,
announced that the Company's subsidiary, American Airlines, Inc.,
and AAdvantage Loyalty IP Ltd., a newly formed Cayman Islands
exempted company incorporated with limited liability and an
indirect wholly owned subsidiary of the Company and American,
intend to commence a private offering to eligible purchasers of
$2,500,000,000 senior secured notes due 2026 and $2,500,000,000
senior secured notes due 2029 (collectively, the "Notes") and to
enter into a $2,500,000,000 senior secured term loan credit
facility (the "New AAdvantage Term Loan Facility") concurrent with
the closing of the offering of the Notes. American and AAdvantage
Loyalty IP Ltd. will be co-issuers of the Notes and co-borrowers
under the New AAdvantage Term Loan Facility. The Notes and the New
AAdvantage Term Loan Facility will be guaranteed by the Company and
certain of the Company's subsidiaries. The offering of the Notes
is not conditioned upon the closing of the New AAdvantage Term Loan
Facility, and the closing of the New AAdvantage Term Loan Facility
is not conditioned upon the closing of the offering of the Notes.
The final terms and amounts of the Notes and the New AAdvantage
Term Loan Facility are subject to market and other conditions and
may be materially different than expectations.
The Notes and New AAdvantage Term Loan Facility will be secured on
a pari passu senior basis by a first-priority security interest in
American’s AAdvantage program, including American’s rights
under certain related agreements, intellectual property and other
collateral related to the AAdvantage program.
AAdvantage Loyalty IP Ltd. intends to lend the net proceeds from
the offering of the Notes and the New AAdvantage Term Loan Facility
to American, after depositing a portion of the proceeds in certain
reserve accounts. American intends to use the proceeds from this
intercompany loan from AAdvantage Loyalty IP Ltd. to repay all
amounts outstanding under the term loan facility with the U.S.
Department of the Treasury that is currently secured by collateral
that will secure, in part, the Notes and the New AAdvantage Term
Loan Facility and to use the remainder for general corporate
purposes, which may include the repayment of other indebtedness.
The Notes will be offered and sold only to persons reasonably
believed to be qualified institutional buyers, as defined in, and
in reliance on Rule 144A under the Securities Act of 1933, as
amended (the “Securities Act”) and to non-U.S. persons in
offshore transactions outside the United States in reliance on
Regulation S under the Securities Act. The Notes will not be
registered under the Securities Act or any other securities laws of
any jurisdiction and will not have the benefit of any exchange
offer or other registration rights. The Notes may not be offered or
sold in the United States absent registration or an applicable
exemption from registration requirements.
About American Airlines
American Airlines Group Incorporated is an American publicly traded
airline holding company headquartered in Fort Worth, Texas. It was
formed on Dec. 9, 2013, in the merger of AMR Corporation, the
parent company of American Airlines, and US Airways Group, the
parent company of US Airways.
Before the Coronavirus pandemic, American Airlines offered
customers 6,800 daily flights to more than 365 destinations in 61
countries from its hubs in Charlotte, Chicago, Dallas-Fort Worth,
Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington,
D.C. As of Dec. 31, 2018, the company operated a mainline fleet of
956 aircraft.
The airline industry has been severely affected by the economic
shutdowns and travel restrictions brought by the Coronavirus
pandemic.
ANKURA CONSULTING: Moody's Assigns First Time B3 CFR
----------------------------------------------------
Moody's Investors Service assigned Ankura Consulting Group, LLC the
following first-time ratings: B3 corporate family rating and B3-PD
probability of default rating. Moody's also assigned the following
instrument ratings: B2 instrument rating to the proposed first lien
senior secured credit facilities, which include a $465 million term
loan and a $75 million revolving facility and Caa2 instrument
rating to the proposed $150 million second lien senior secured term
loan. The rating outlook is stable. Proceeds from the capital raise
are expected to be used to refinance existing debt, pay fees and
expenses and add to balance sheet cash.
Assignments:
Issuer: Ankura Consulting Group, LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Gtd Senior Secured 1st Lien Revolving Credit Facility, Assigned B2
(LGD3)
Gtd Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD5)
Outlook Actions:
Issuer: Ankura Consulting Group, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
The B3 CFR reflects Ankura Holdings' ("the company"): 1)
established market position within the US across its client base
and track record in creating revenue growth; 2) diversified and
highly specialized business practices that are well positioned for
growth; 3) cash generative model and ability to delever; 4)
relatively stable EBITDA margin through the cycle supported by a
balanced business profile that includes a mix of cyclical,
non-cyclical and counter-cyclical businesses.
However the rating also reflects the company's: 1) high leverage
proforma for the transaction of 7.3x on a Moody's adjusted basis as
of the end of 2020 and very limited free cash flow for this year;
2) reliance on attraction and retention of key staff; and 3) lack
of recurring revenue with reliance on winning repeat business with
new and existing customers, limiting the company's forward revenue
visibility.
Under Moody's ESG framework the company has some social risks.
Human capital and customer relations, particularly with regards to
data security and customer privacy, are the key social risks
impacting Ankuras's credit profile. Since personnel is the largest
cost for the company, if there is less demand for consulting
services or if clients need to pull back on spending on hiring
consultants, one of the levers that Ankura may need to pull to
control costs is reducing headcount, which could potentially lead
to lawsuits. In addition, Ankura sometimes does team "lift-ups"
from competitors as a way to build expertise in certain areas and
as a growth mechanism. Such "lift-ups" could also lead to lawsuits
and often contain non-compete agreements. There is also some
governance risk at Ankura. The company's ratings factor in its
private ownership, its financial policy, which is tolerant of high
leverage, and its track record of combining organic growth with
acquisitions that contribute market share or significant expertise
in certain areas. As a mitigant to this risk the company has good
track record of integration and completion of acquisitions.
Moody's considers the company's liquidity to be good, supported by
the $75 million revolving credit facility which is expected to be
undrawn as closing, and approximately $55 million of cash on the
balance sheet after adjusting for accrued bonuses and other costs.
Free cash flow remains pressured in 2021 and Moody's expects a cash
burn this year. Free cash flow is expected to be positive in 2022,
supported by earnings growth and sustained margins. There is
seasonality associated with the payment of variable compensation in
the first quarter of the year, which could cause the company to
rely on the revolver temporarily. Moody's expects covenants to
include the ability for the company to incur incremental debt. The
springing First Lien Net Leverage Ratio is set at 8x, with no
step-downs and is applicable only when the revolver is 40%
utilized. Moody's does not expect the company to draw on the
revolver over the next 12-18 months.
As proposed, the new credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors, including: i) incremental debt capacity up to the
greater of (a) $100 million and (b) 100% of consolidated EBITDA
plus any unused capacity under the general debt basket, plus any
prepayments of certain debt including the second lien term facility
, plus an unlimited amount of (i) pari passu first lien debt as
long as pro forma Consolidated First Lien Net Leverage Ratio is
4.65x or less, (ii) debt that is secured on a junior basis to the
first lien so long as pro forma Consolidated Secured Net Leverage
Ratio is 6.15x or less, and (iii) debt that is unsecured or secured
by non-collateral so long as either pro forma Consolidated Total
Net Leverage Ratio is 6.65x or less, or the pro forma Consolidated
Interest Coverage Ratio is no less than 2.0x. Alternatively, the
ratio tests may be satisfied so long as leverage (coverage) does
not increase (decrease) on a pro forma basis in the case of
incremental facilities incurred in connection with a permitted
acquisition or investment. The credit facility also includes
provisions allowing early maturity indebtedness up to the greater
of $100.0 million and 100% of Consolidated EBITDA.
The new credit facilities are expected to allow: (i) the ability to
transfer assets to unrestricted subsidiaries, to the extent
permitted under the carve-outs, with no explicit "blocker"
provisions restricting such transfers; ii) the requirement that
only wholly-owned subsidiaries act as subsidiary guarantors,
raising the risk that guarantees may be released following a
partial change in ownership; (iii) leverage-based step downs in the
asset sale prepayment requirement to 50% and 0% at pro forma
Consolidated First Lien Net Leverage ratio of 4.15x and 3.65x,
respectively.
Using Moody's Loss Given Default for Speculative-Grade Companies
(LGD) methodology, the PDR of B3-PDR is in line with the B3 CFR
based on a 50% recovery rate. The 1st Lien TLB and RCF are rated
B2, one notch higher than the CFR, reflecting the first-lien
position in the capital structure. The 2nd Lien TLB is rated Caa2
and this rating reflects its junior position in the capital
structure and first loss feature. Changes to the proposed
instruments and structure could result in a different rating
outcome.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects the expectation that the company will
maintain its solid market position with clients and continue to
achieve revenue growth and stable or improving margins. The outlook
also incorporates the view that the company will be able to build
upon successful engagements with clients that will help in winning
bids for future engagements with new and existing clients. It also
assumes that employee turnover rates will remain stable. The stable
outlook incorporates the view that the economy will be in recovery
mode and exhibit growth over this year and next year. Moody's
expect that Ankura's clients generally will not need to pull back
on spending for consulting projects and will maintain their budgets
for projects. Importantly, the outlook assumes that the company
will delever to below 7.0x by the end of this year, with retained
cash flow (RCF) to debt above 5%, both on a Moody's-adjusted basis.
Liquidity is assumed to remain adequate.
The ratings could be upgraded if (all metrics Moody's adjusted) 1)
Ankura demonstrates stable growth, margins and free cash flow
generation capacity over time; 2) the company is able to complete
and integrate acquisitions that leads to a more diversified
business practice offering and results in winning new engagements;
3) debt/EBITDA decreases toward 5.5x and free cash flow to debt
approaches 5%; and 4) the company maintains good liquidity and
exhibits prudent financial policies.
The ratings could be downgraded if (all metrics Moody's adjusted)
1) revenue or profitability are lower than anticipated, or
financial policies become more aggressive, leading to the
expectation for debt/EBITDA sustained above 7.5x or free cash flow
to debt stays at break-even; 2) the company is not able to win new
engagements or loses clients to competitors leading to impairment
in reputation or if the company loses a significant number of
senior consultants; or 3) liquidity deteriorates.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Ankura Consulting Group, LLC is a global provider of a broad range
of consulting services in the areas of: disputes and economics,
data and technology, risk, forensics and compliance, turnaround and
restructuring, strategy and performance and in transactions and
operations advisory. The company has over 1,500 employees that
includes over 400 consultants at the senior level. The company is
majority owned by Madison Dearborn Partners with a minority equity
stake owned by employees. Ankura generated revenue of approximately
$600 million for the year ended December 2020.
APFS STAFFING: Moody's Completes Review, Retains B2 CFR
-------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of APFS Staffing Holdings, Inc. ("Addison") and other
ratings that are associated with the same analytical unit. The
review was conducted through a portfolio review discussion held on
February 24, 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
Addison's B2 corporate family rating reflects small size relative
to peers in the white-collar staffing industry, thin profit margins
which are typical of the industry and cyclical spending from
clients. The rating is supported by moderately high financial
leverage compared to other B2 rated services issuers, good free
cash flow and proprietary information technology and training
programs that help the company maintain competitive differentiation
and high customer retention rates.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
ARAMARK SERVICES: Moody's Completes Review, Retains Ba3 CFR
-----------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Aramark Services, Inc. and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review discussion held on February 24, 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
Aramark's Ba3 corporate family rating is constrained by the adverse
impacts of the coronavirus pandemic to its revenue and profits,
very high financial leverage and Moody's expectations for little or
no free cash flow under business disruptions abate. The rating is
supported by strong retention of clients with long term contracts
that provide good visibility for revenues, large operating scale in
both the uniform and food business lines and strong liquidity with
over $2 billion of balance sheet cash as of December 31, 2020.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
ARCHDIOCESE OF NEW ORLEANS: Commercial Creditors' Panel Appointed
-----------------------------------------------------------------
David Asbach, Acting U.S. Trustee for Region 5, appointed a
committee to represent unsecured commercial creditors in the
Chapter 11 case of the Roman Catholic Church of the Archdiocese of
New Orleans.
The committee members are:
1. First Bank and Trust (Chairperson)
c/o James R. Noel
118 Lake Drive
Covington, LA 70433
Phone: 985-249-6777
E-mail: jnoel@fbtonline.com
Counsel: Mark C. Landry
Newman, Mathis, Brady & Spedale, PLC
3501 N. Causeway Blvd., Suite 300
Metairie, LA 70002
Phone: 504-837-9040
E-mail: mlandry@newmanmathis.com
2. Crescent Door & Hardware, Inc.
c/o Neuville C. Hotstream, Sr.
6100 Humphreys Street
New Orleans, LA 70123
Phone: 504-733-8366
E-mail: neuville@cdhno.com
Counsel: Wayne Jablonowski, APLC
3705 Ponchartrain Drive
Slidell, LA 70458
Phone: 985-646-1300
E-mail: wayne@wjjlaw.com
3. Brown Rice Marketing, LLC
c/o Mark W. Brown
476 Metairie Road, Suite 202
Metairie, LA 70005
Phone: 504-274-4855
E-mail: mark@brownricemarketing.com
4. MetroStudio, LLC
c/o Heather Gorman
6501 Spanish Fort Blvd.
New Orleans, LA 70124
Phone: 504-283-3685
E-mail: hgorman@metrostudio.net
About the Archdiocese of New Orleans
The Roman Catholic Church of the Archdiocese of New Orleans --
https://www.nolacatholic.org/ -- is a non-profit religious
corporation incorporated under the laws of the State of Louisiana.
Created as a diocese in 1793, and established as an archdiocese in
1850, the Archdiocese of New Orleans has educated hundreds of
thousands in its schools, provided religious services to its
churches and provided charitable assistance to individuals in need,
including those affected by hurricanes, floods, natural disasters,
war, civil unrest, plagues, epidemics, and illness. Currently, the
archdiocese's geographic footprint occupies over 4,200 square Miles
in southeast Louisiana and includes eight civil parishes --
Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John
the Baptist, St. Tammany, and Washington.
The Roman Catholic Church for the Archdiocese of New Orleans sought
Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1,
2020. The archdiocese was estimated to have $100 million to $500
million in assets and liabilities as of the bankruptcy filing.
Judge Meredith S. Grabill oversees the case.
The archdiocese tapped Jones Walker LLP as its bankruptcy counsel
and Blank Rome LLP as its special counsel. Donlin, Recano &
Company, Inc. is the claims agent.
The U.S. Trustee for Region 5 appointed an official committee of
unsecured creditors on May 20, 2020. The committee is represented
by Pachulski Stang Ziehl & Jones, LLP and Locke Lord, LLP.
Berkeley Research Group, LLC is the committee's financial advisor.
AREU STUDIOS: Greenberg Georgia Keeps Ozzie Areu as CEO
-------------------------------------------------------
Areu Studios, LLC, filed on March 1, 2021, a First Modification to
its Second Amended Plan of Reorganization. On March 4, it filed a
supplement to its Disclosure Statement.
According to the Supplement, Areu Studios, the Debtor's principal,
Ozzie Areu, will be employed by Greenberg Georgia Film and TV
Studio Holdings, LLC, as the chief executive officer of the
Reorganized Debtor for an annual salary of $500,000 per annum for
an initial three-year term with two one-year renewal options. Mr.
Areu will also receive 20% of the equity in Greenberg as part of
his employment package.
The First Modification to the Second Amended Plan provides:
* Article 4, Section 4.5 of the Plan shall be deleted in its
entirety and replaced with the following:
Class 5: Secured Claim of LV Atlanta, LLC
Class 5 consists of the first priority secured claim of LV
Atlanta, LLC ("LV"). As of February 1, 2021, LV holds a claim
against Good Deed 317, LLC as Borrower in the total amount of
$12,729,151.36 which includes principal together with accrued and
unpaid interest thereon, attorney's fees and other costs (such
amount owed to LV plus interest, fees, and costs that are
continuing to accrue and incur pursuant to the Class 5 Loan
Documents shall be referred to herein as the "Class 5 Secured
Claim"). The Class 5 Secured Claim is secured by a first priority
lien in Debtor's membership interests in and to Good Deed 317, LLC
as set forth in the Pledge and Security Agreement by and between
Debtor and LV Atlanta, LLC dated December 13, 2018 and as further
set forth in that certain UCC Financing Statement No. 0602018-10262
filed and recorded in the Fulton County, Georgia real property
records on December 14, 2018 (the "Class 5 Collateral"). The Class
5 Secured Claim is being satisfied pursuant to the Plan of
Reorganization filed in the Good Deed 317, LLC Bankruptcy Case No.
20-71227, pending in the United States Bankruptcy Court, Northern
District of Georgia ("Good Deed 317 Plan of Reorganization").
* Article 4, Section 4.8 of the Plan shall be deleted in the
entirety and replaced with the following:
Class 8: Interest Claims
Class 8 consists of Interest Claims. Upon entry of the
Confirmation Order, the prepetition membership interests of the
Debtor (the "Pre-Petition Interests") shall be canceled. The fair
market value of the Pre-Petition Interest will be paid on the
Effective Date, except for the interests of Areu Family Ventures,
LLC and Areu Bros, LLC which are receiving nothing under the Plan.
100% of the new membership interests in the Reorganized Debtor
shall be issued to Greenberg Georgia Film and TV Studio Holdings,
LLC ("Post-Petition Interests") in exchange for a cash infusion in
the amount of $13,761,005.35. Such payment will be used to satisfy
(i) the obligations of Good Deed 317, LLC and Debtor to LV Atlanta,
LLC ($12,500,000.00) and the (ii) the Class 8 Pre-Petition Interest
Claims ($1,261,005.35). The holders of Class 8 Pre-Petition
Interests are impaired.
* Section 6.2 "Sources of Cash for Distribution" of the Plan
shall be deleted in the entirety and replaced with the following:
The source of funds for the payments pursuant to the Plan is a
cash infusion from Greenberg Georgia Film and TV Studio Holdings,
LLC. Debtor operates Areu Bros.' Studio which is an approximately
29-acre studio lot, consisting of five sound stages, an 11-home
suburban backlot and four administration buildings, and is located
in a federal opportunity zone in Fulton County (the "Studio"). Areu
Studios currently has a sublease with Cinelease, Inc., a subsidiary
of Herc Rentals, Inc. through April 2021. Cinelease has expressed
its intention to renew the lease in April 2021 and the Debtor is
currently entertaining other potential lessees/licensees. After the
Confirmation Date, the Debtor is authorized to enter into contracts
and leases, including leases of its assets, in Debtor's sole
business judgement without further order of the Bankruptcy Court.
The income from such new contracts and leases will be a source of
funds for payments pursuant to the Plan.
* Section 8.1 "Objections to Claims" of the Plan shall be
deleted in the entirety and replaced with the following:
The Debtor shall be entitled to object to Claims, provided,
however, that Debtor shall not be entitled to object to Claims that
have been Allowed by a Final Order entered by the Bankruptcy Court
prior to the Effective Date.
Attorney for Debtor:
Cameron M. McCord
JONES & WALDEN, LLC
Georgia Bar No. 143065
699 Piedmont Ave, NE
Atlanta, Georgia 30308
Tel: (404) 564-9300
A copy of the First Modification to the Second Amended Plan is
available at
https://bit.ly/3v4sSLl
About Areu Studios
Areu Studios, LLC, which owns and operates a movie studio in
Atlanta, Ga., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ga. Case No. 20-71228) on Oct. 29, 2020. The
petition was signed by Ozzie Areu, the company's manager. At the
time of the filing, the Debtor had estimated assets of less than
$50,000 and liabilities of between $1 million and $10 million.
Judge Paul Baisier oversees the case.
Jones & Walden, LLC is the Debtor's legal counsel.
AZZIL GRANITE: April 15 Hearing on Disclosure Statement
-------------------------------------------------------
The hearing on the adequacy of the Disclosure Statement of Azzil
Granite Materials, LLC will be held before the Honorable Michael B.
Kaplan on April 15, 2021, at 10:00 a.m. in Courtroom 8, United
States Bankruptcy Court, 402 East State Street, Trenton, New Jersey
08068.
Written objections to the adequacy of the Disclosure Statement must
be filed and served no later than 14 days prior to the hearing
before this Court.
About the Debtors
Azzil Granite Materials is a supplier of high friction granite
aggregates for the New York City and Long Island market. Magnolia
Associates owns a 134-acre property with quarry located in White
Hall, N.Y., which is valued by the company at $15 million.
Based in Hackettstown, N.J., Lizza Equipment Leasing, LLC and its
affiliates, Azzil Granite Materials LLC and Magnolia Associates
LLC, sought Chapter 11 protection (Bankr. D.N.J. Lead Case No.
19-21763) on June 12, 2019. In the petitions signed by Carl J.
Lizza, co-managing member, Lizza Equipment Leasing disclosed $90 in
assets and liabilities of $987,830; Azzil Granite Materials
disclosed total assets of $813,825 and total liabilities of
$23,859,263; and Magnolia Associates disclosed total assets of
$15,317,480, and total liabilities of $13,137,533.
Judge Michael B. Kaplan oversees the cases.
Daniel M. Stolz, Esq., at Wasserman Jurista & Stolz, P.C., is the
Debtors' bankruptcy counsel.
Lizza Equipment won confirmation of its Liquidating Plan on Nov. 6,
2020.
BEL AIRE PROPERTIES: Unsecureds to Get Monthly Payouts for 3 Years
------------------------------------------------------------------
Bel Aire Properties, LLC, submitted an Amended Plan of
Reorganization.
The largest asset of the debtor is the real property located at
1088 East 390 South, American Fork, Utah, 84003), which is
currently leased by a related entity, Bel Aire Senior Living.
Additionally, the debtor owns real property located at 436 East 700
North, Orem, Utah, 84097, which is currently leased by Bel Aire
Homes, also a related entity.
In general, the Debtor's Plan proposes to pay holders of Allowed
Claims the Debtor's Disposable Income for a period of three years,
to be distributed to such holders on a pro rata basis as provided
in the Plan. If holders of Allowed Secured Claims are entitled to
receive payments under the Plan, such holders will be paid
separately (not from the Debtor's Disposable Income), as set forth
in the Plan.
Class 5 General Unsecured Claims are impaired. Each holder of an
Allowed Unsecured Claim shall receive equal monthly distributions
calculated by dividing the Allowed Amount of the applicable
Unsecured Claim over the following payment period, with interest
accruing at the Plan Rate. Monthly payments shall be paid on or
before the 15th day of each month, commencing with the first month
following the Effective Date and continuing until the last month
immediately preceding three years from the Petition Date.
Class 6 Member Interests are impaired. Each holder of a Class 6
Claim, in exchange for all Interests in the Debtor, shall receive
on the Effective Date a Member Interest in the Reorganized Debtor
equal to their Member Interest in the Debtor held by such member on
the day preceding the Effective Date.
Attorneys for the Debtor:
Blake D. Miller
Deborah R. Chandler
ANDERSON & KARRENBERG
50 West Broadway, Suite 700
Salt Lake City, Utah 84101
Telephone: (801) 534-1700
Facsimile: (801) 364-7697
E-mail: bmiller@aklawfirm.com
dchandler@aklawfirm.com
A copy of the Amended Plan of Reorganization is available at
https://bit.ly/2O8jDJm from PacerMonitor.com.
About Bel Aire Properties
Bel Aire Properties is primarily engaged in renting and leasing
real estate properties.
Bel Aire Properties filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case No.
20-25412) on Sep. 8, 2020. The petition was signed by Steven
Sabins, member. At the time of filing, the Debtor estimated $1
million to $10 million in both assets and liabilities. Deborah R.
Chandler, Esq. at ANDERSON & KARRENBERG serves as the Debtor's
counsel.
BELVIEU BRIDGE: Case Summary & 2 Unsecured Creditors
----------------------------------------------------
Debtor: Belvieu Bridge Properties Group, LLC
3919 Belvieu Avenue, Suite G
Baltimore, MD 21215
Business Description: Belvieu Bridge Properties Group is engaged
in activities related to real estate.
The Company is the owner of fee simple
title to three properties in Baltimore,
Maryland having a current value of $2.93
million.
Chapter 11 Petition Date: March 9, 2021
Court: United States Bankruptcy Court
District of Maryland
Case No.: 21-11452
Judge: Hon. David E. Rice
Debtor's Counsel: Brett Weiss, Esq.
THE WEISS LAW GROUP, LLC
6404 Ivy Lane, Suite 650
Greenbelt, MD 20770
Tel: (301) 924-4400
Fax: (240) 627-4186
E-mail: brett@BankruptcyLawMaryland.com
Total Assets: $3,115,322
Total Liabilities: $3,108,307
The petition was signed by Zenebe Shewayene, the managing member.
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/C7CU4BQ/Belvieu_Bridge_Properties_Group__mdbke-21-11452__0001.0.pdf?mcid=tGE4TAMA
BLACK KNIGHT: Moody's Completes Review, Retains Ba2 CFR
-------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Black Knight, Inc. and other ratings that are associated
with the same analytical unit. The review was conducted through a
portfolio review discussion held on February 24, 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
Black Knight's Ba2 corporate family rating is constrained by small
size relative to other software and services issuers also rated in
the Ba2 category, high financial leverage following the recent
acquisition of Optimal Blue and somewhat concentrated customer
base. The rating is supported by a highly recurring subscription
revenue base, high profit rates and good free cash flow.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
BLEU'SPA INC: Further Fine-Tunes Plan Documents
-----------------------------------------------
Bleu'Spa, Inc., a debtor-affiliate of Hesperus Peak, Inc.,
submitted an Amended Disclosure Statement describing its Chapter 11
Plan for Small Business on March 2, 2021.
The Amended Disclosure Statement cites minor alterations in the
source of payments where the Plan will be implemented and funded by
existing cash, cash flow from operations, and the sale of the
Collateral.
Prior iteration shows that the Plan will be implemented and funded
by existing cash, cash flow from operations, loan proceeds, and the
sale of the Collateral. The Debtor is applying for a Second Draw
Paycheck Protection Program (PPP) loan. If such loan is approved
(estimated to be between $0 and $300,000), then funds will be
available for the payment of expenses incurred in the ordinary
course of the operation of the Debtor's business until the closing
of the sale of the Collateral.
The Amended Disclosure Statement does not alter the proposed
treatment for creditors and the equity holder:
* The Class 2 Secured claim of Crystal Lake Bank & Trust Co.,
N.A. totaling 609,499 will receive monthly payments of $8,839
beginning on the Effective Date and ending after closing of sale of
collateral.
* To the extent of any surplus net sale proceeds after payment
of secured and administrative and priority claims, the Debtor will
pay each holder of a Class 4 Unsecured Claim 100% of the amount of
its claim, or to the extent of a deficiency a ratable proportion of
such proceeds and any undistributed cash.
* On the Effective Date, the Equity Interests in the Debtor
will be canceled, and the holder of the interests in Class 5 will
not be entitled to, and will not receive or retain, any property or
interest in the Debtor on account of such interests.
A full-text copy of the Amended Disclosure Statement dated March 2,
2021, is available at https://bit.ly/30mSGEm from PacerMonitor.com
at no charge.
Attorney for the Debtor:
Carolina Y. Sales
Paul M. Bauch
BAUCH & MICHEALS, LLC
53 W. Jackson Blvd., Suite 11115
Chicago, IL 60604
E-mail: pbauch@mlawllc.com
csales@bmlawllc.com
About Bleu'Spa, Inc.
Hesperus Peak, Inc., and affiliate Bleu'Spa, Inc., own and operate
upscale salons and spas. Hesperus Peak operates its business at
the shopping center commonly known as the Arboretum of South
Barrington, which is located at 100 W. Higgins, F-80 in South
Barrington, Illinois. Bleu'Spa operates at 106 N. Second Street in
West Dundee, Illinois.
The Debtors suffered financial difficulties associated with the
depressed economy.
Hesperus Peak, Inc., and Bleu'Spa, Inc., sought Chapter 11
protection (Bankr. N.D. Ill. Case Nos. 20-11616 and 20-11617) on
May 28, 2020. Hesperus estimated less than $500,000 in assets and
less than $1 million in liabilities as of the bankruptcy filing.
BAUCH & MICHEALS, LLC, is the Debtors' counsel.
BLEU'SPA INC: Unsecured Creditors Will Recover 100% Under Plan
--------------------------------------------------------------
Bleu'Spa, Inc.'s Second Amended Chapter 11 Small Business Plan and
a corresponding Disclosure Statement dated March 3, 2021.
Class 2 Crystal Lake Bank & Trust Co., N.A. totaling 609,499 will
receive $8,839 per month beginning on the Effective Date and ending
after closing of the sale of collateral. Class 2 is impaired.
General unsecured creditors are classified in Class 4. To the
extent of any surplus Net Proceeds of Sale after payment of secured
and administrative and priority claims, the Debtor shall pay each
holder of a Class 4 Unsecured Claim 100% of the amount of the
Allowed Unsecured Claim, or to the extent of a deficiency in Net
Proceeds of Sale a Ratable Proportion of such proceeds and any
undistributed Cash.
Class 5 Equity interest holders won't receive anything and the
interests will be canceled.
The Plan will be implemented and funded by existing cash, cash flow
from operations, and the sale of the Collateral. The secured
creditors may purchase the Collateral pursuant to a credit bid.
Attorney for the Debtor:
Carlina Y. Sales
Paul M. Bauch
BAUCH & MICHAELS, LLC
53 W. Jackson Blvd., Suite 11115
Chicago, IL 60604
E-mail: pbauch@bmlawllc.com
csales@bmlawllc.com
A copy of the Disclosure Statement is available at
https://bit.ly/3kPMXjR from PacerMonitor.com.
About Bleu'Spa, Inc.
Hesperus Peak, Inc., and affiliate Bleu'Spa, Inc., own and operate
upscale salons and spas. Hesperus Peak operates its business at
the shopping center commonly known as the Arboretum of South
Barrington, which is located at 100 W. Higgins, F-80 in South
Barrington, Illinois. Bleu'Spa operates at 106 N. Second Street in
West Dundee, Illinois.
The Debtors suffered financial difficulties associated with the
depressed economy.
Hesperus Peak, Inc., and Bleu'Spa, Inc., sought Chapter 11
protection (Bankr. N.D. Ill. Case Nos. 20-11616 and 20-11617) on
May 28, 2020. Hesperus estimated less than $500,000 in assets and
less than $1 million in liabilities as of the bankruptcy filing.
BAUCH & MICHEALS, LLC, is the Debtors' counsel.
BRAND INDUSTRIAL: Moody's Affirms B3 CFR & Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service affirmed Brand Industrial Services,
Inc.'s B3 Corporate Family Rating and B3-PD Probability of Default
Rating. Moody's also affirmed the B3 rating on Brand 's senior
secured bank facility and the Caa2 rating on the company's senior
unsecured notes. The outlook changed to negative from stable.
"The change in outlook to negative from stable reflects the
company's very high leverage and Moody's expectation that
profitability and key credit metrics will take longer to improve
than anticipated, " said Emile El Nems, a Moody's VP-Senior
Analyst. "The affirmation of Brand's B3 Corporate Family Rating
reflects our consideration of the company's large customer base,
flexible cost structure and the sizable liquidity profile that will
provide relative operating and financial stability."
The following rating actions were taken:
Affirmations:
Issuer: Brand Industrial Services, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Secured 1st Lien Revolving Credit Facility, Affirmed B3
(LGD3)
Senior Secured 1st Lien Term Loan B, Affirmed B3 (LGD3)
Senior Unsecured Notes, Affirmed Caa2 (LGD5)
Outlook Actions:
Issuer: Brand Industrial Services, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Brand's B3 CFR reflects the company's high leverage, low EBITA
margins and exposure to cyclical end markets, including the oil &
gas sector. In addition, the rating reflects Moody's expectation
that revenues, profitability and key credit metrics will take
longer than anticipated to recover from the economic disruption
during 2020. At the same time, Moody's also considers the company's
good liquidity profile, a diversified revenue stream, a broad
customer base of more than 35,000 customers and high levels of
recurring revenues. Approximately 95% of Brand's total revenue
tends to be recurring in nature and more than 60% of total revenue
is derived from maintenance related projects.
Moody's expects Brand to maintain good liquidity over the next
12-18 months. At December 31, 2020, Moody's estimates Brand had
approximately $350 million in cash and $705 million in availability
under its undrawn first lien revolving credit facility. The
revolver has a springing leverage covenant of net secured
debt-to-EBITDA (which excludes outstanding borrowing under the AR
facility) of 7.0x as defined under the credit agreement, which gets
triggered if over 35% of the revolver is drawn. Furthermore, the
company's liquidity is supported by a $600 million AR facility
(unrated) maturing in October 2022, under which Moody's assumes
$350 million in borrowings were outstanding at December 31, 2020.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded if:
- Adjusted Debt-to-EBITDA is below 5.5x for a sustained period of
time
- EBITA-to-Interest Expense is above 2.0x for a sustained period
of time
- The company improves its free cash flow and maintains good
liquidity
The rating could be downgraded if:
- Adjusted Debt-to-EBITDA is above 7.0x for a sustained period of
time
- EBITA-to-Interest expense is below 1.0x for a sustained period
of time
- The company's liquidity profile deteriorates
A sizeable debt financed acquisition is completed
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Headquartered in Kennesaw, GA, Brand Industrial Services, Inc. is
the largest provider of scaffolding, insulation, coatings and other
industrial services within the following market segments in North
America: upstream, midstream, and downstream oil & gas, power
generation, industrial and infrastructure. The company is majority
owned by Clayton, Dubilier & Rice and Brookfield Business Partners.
BRINK'S COMPANY: Moody's Completes Review, Retains Ba2 CFR
----------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Brink's Company (The) and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review discussion held on February 24, 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
Brinks' Ba2 corporate family rating is reflects its global revenue
base, leading position in the global cash-in-transit and related
managed logistics industries, and Moody's expectations for profit
margin improvement from cost reduction initiatives and synergies
from its acquisition of certain G4S assets completed in 2020. The
rating is constrained by the growth of non-cash payment methods,
elevated financial leverage and the competitive and mature
industries in which it operates.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
CABLE ONE: Moody's Hikes Rating on $800MM Secured Notes to Ba2
--------------------------------------------------------------
Moody's Investors Service upgraded Cable One, Inc.'s senior secured
bank credit facility ratings to Ba2, from Ba3. All other credit
ratings, including the Ba3 Corporate Family Rating, Ba3-PD
Probability of Default Rating, and B2 senior unsecured rating are
affirmed. The SGL-1 Speculative Grade Liquidity Rating is
maintained. The outlook is stable.
Upgrades:
Issuer: Cable One, Inc.
Senior Secured Bank Credit Facility, Upgraded to Ba2 (LGD3) from
Ba3 (LGD3)
Affirmations:
Issuer: Cable One, Inc.
Probability of Default Rating, Affirmed Ba3-PD
Corporate Family Rating, Affirmed Ba3
Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD5)
Outlook Actions:
Issuer: Cable One, Inc.
Outlook, Remains Stable
On March 1, Cable One announced[1] the commencement of a private
offering (the "Offering") of $500 million aggregate principal
amount of its convertible senior notes due 2026 (the "2026 Notes")
and $300 million aggregate principal amount of its convertible
senior notes due 2028 (the "2028 Notes" and, together with the
"2026 Notes", the "Notes"), subject to market and other conditions.
Cable One expects to grant the initial purchasers of the Notes an
option to purchase up to an additional $75 million principal amount
of 2026 Notes and up to an additional $45 million principal amount
of 2028 Notes, in each case exercisable within a period of 13 days
from the date the Notes are first issued (the "greenshoe").
Proceeds from the transaction are expected to be used to partially
fund the purchase of the remaining interest in Hargray Acquisition
Holdings, LLC, the ultimate parent of Hargray Communications Group,
Inc. (B2 RUR) that Cable One does not already own.
Moody's estimate the acquisition financing will increase pro forma
leverage to approximately 4.8x (Moody's pro forma adjusted) for the
year ended December 31, 2020, pre-synergies, and assuming the
remaining financing is roughly an equal mix of balance sheet cash
and secured debt (Hargray has a $687 million term loan outstanding
that could be assumed). If the greenshoe is exercised, the leverage
ratio would be near 5.0x (Moody's pro forma adjusted), above
Moody's current guidance of 4.5x for the Ba3 CFR. However, with the
realization of synergies and organic growth of the combined
business, and based on the current pro forma capital structure,
Moody's expect leverage to fall to between 4.0x-4.25x by the end of
2022.
RATINGS RATIONALE
Cable One, Inc.'s Ba3 Corporate Family Rating reflects a
diversified footprint, superior network speeds, a favorable
competitive environment, and a very profitable business model that
produces EBITDA margins approaching 50%. Constraining the rating is
the Company's declining video (and voice) services which exhibit
low penetration, and high loss rates. The service offering is
subject to intense competition and is being harvested for cash and
profits. There is moderate governance risk, with a tolerance for
leverage at or below 4.0x-4.5x (management's calculation) for M&A,
and dividends.
The Company has very good liquidity, supported by positive
operating cash flow, an undrawn $500 million revolving credit
facility (with approximately $470 million available at December 31,
2020), and good covenant cushion. The credit profile also benefits
from a favorable maturity profile with no maturities until 2025.
Moody's rate the senior secured credit facilities Ba2 (LGD3), one
notch above the Ba3 corporate family rating (CFR). Secured lenders
benefit from junior capital provided by senior unsecured notes
rated B2 (LGD5) and the unrated senior convertible notes. The B2
rating on the unsecured notes reflects effective subordination to
the secured debt. The rated senior unsecured notes are pari passu
with the convertible notes. The instrument ratings reflect the
probability of default of the company, as reflected in the Ba3-PD
Probability of Default Rating, and an average expected family
recovery rate of 50% at default given mixed capital structure with
multiple claim priorities.
RATING OUTLOOK
The stable outlook reflects our expectation that revenue will rise
to near $1.7 billion and EBITDA will rise to over $900 million,
over the next 12-18 months, with EBITDA margins rising to the mid
50% range. Net of capex (about 25% of revenue) and interest (about
3.5% weighted average borrowing cost), Moody's project free cash
flow to rise near $170 million with free cash flow to debt in the
range of 2.5%-5.0%. Moody's expect leverage to fall to 4.0-4.25x
over the next 12-18 months. Moody's expect liquidity to remain very
good. Unless otherwise notes, all figures are Moody's adjusted and
include Hargray on a pro forma basis, with an estimate of realized
synergies, over next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that Could Lead to an Upgrade
Gross debt / EBITDA (Moody's adjusted) sustained comfortably below
3.5x with commitment by management to sustain metrics at this
level
Free cash flow to gross debt (Moody's adjusted) sustained above
10%
Moody's could also consider a positive rating action if financial
policy was more conservative, the scale of the Company was larger,
or there was more diversity in the business model without negative
implications on profitability.
Factors that Could Lead to a Downgrade
Gross debt / EBITDA (Moody's adjusted) sustained above 4.5x
Free cash flow to gross debt (Moody's adjusted) sustained below
5%
Moody's could also consider a negative rating action if liquidity
deteriorated, financial policy turned more aggressive, or there was
a material and unfavorable change in the scale, diversity or
operating performance.
The principal methodology used in these ratings was Pay TV
published in December 2018.
Headquartered in Phoenix, AZ, Cable One, Inc. offers traditional
and advanced video services including digital television,
video-on-demand, high-definition television, as well as high-speed
Internet access and phone service. The Company passes 2.3 million
homes, in 21 states across the West, Mid-West, and South (including
Arizona, Idaho, Illinois, Mississippi, Missouri, Oklahoma, and
Texas), serving more than 900 thousand residential and commercial
customers. Revenue for the year ended December 31, 2020 was
approximately $1.3 billion.
Founded in 1947, Hargray is a regional telecommunications company
providing advanced Internet, television, and telephone
communications services to residential and business customers in 14
markets across Alabama, Florida, Georgia, and South Carolina.
Hargray offers gigabit-capable services to approximately 99% of its
customers. Approximately 60% of Hargray's total revenues for the
12-month period ended December 31, 2020 were derived from
residential data and business services customers.
CARBONLITE HOLDINGS: Case Summary & 40 Largest Unsecured Creditors
------------------------------------------------------------------
Lead Debtor: CarbonLite Holdings LLC
10250 Constellation Blvd.
Suite 2820
Los Angeles, CA 90067
Business Description: CarbonLite is engaged in the processing
of post-consumer recycled polyethylene
terephthalate ("rPET") plastic products
and producing rPET and polyethylene
terephthalate ("PET") beverage and food
packaging products through its two
business segments, the Recycling
Business and PinnPack.
Chapter 11 Petition Date: March 8, 2021
Court: United States Bankruptcy Court
District of Delaware
Eleven affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
CarbonLite Holdings LLC (Lead Case) 21-10527
CarbonLite Industries LLC 21-10528
CarbonLite P Holdings LLC 21-10529
CarbonLite P LLC 21-10531
CarbonLite PI Holdings LLC 21-10532
CarbonLite Pinnpack LLC 21-10533
CarbonLite Recycling Holdings LLC 21-10534
CarbonLite Recycling LLC 21-10535
CarbonLite Sub-Holdings, LLC 21-10536
Pinnpack P, LLC 21-10537
Pinnpack Packaging LLC 21-10538
Judge: Hon. John T. Dorsey
Debtors'
Bankruptcy
Counsel: Richard M. Pachulski, Esq.
Gabriel I. Glazer, Esq.
James E. O'Neill, Esq.
Steven W. Golden, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
919 N. Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899 (Courier 19801)
Tel: (302) 652-4100
Fax: (302) 652-4400
E-mail: rpachulski@pszjlaw.com
gglazer@pszjlaw.com
joneill@pszjlaw.com
sgolden@pszjlaw.com
Debtors'
Corporate
Counsel: REED SMITH LLP
Debtors'
Claims,
Noticing,
Solicitation
Agent and
Administrative
Advisor: BANKRUPTCY MANAGEMENT SOLUTIONS, INC.
STRETTO
https://cases.stretto.com/CarbonLite/court-docket
CarbonLite P, LLC's
Estimated Assets: $100 million to $500 million
CarbonLite P, LLC's
Estimated Liabilities: $50 million to $100 million
The petitions were signed by Brian Weiss, chief restructuring
officer.
A copy of CarbonLite Holdings' petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/J2UDKPQ/CarbonLite_Holdings_LLC__debke-21-10527__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 40 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Nestle Waters North America, Inc. Trade Debt $27,206,874
900 Long Ridge Rd
Stamford, CT 06902
Tel: 888-747-7437
Fax: 508-977-8508
Email: maria.french@waters.nestle.com
2. Niagara Bottling, LLC Trade Debt $20,377,497
2560 E Philadelphia St
Ontario, CA 91761
Pamela Anderson Cridlebaugh,
Sid Gulati
Fax: 909-987-0747
Email: Panderson@Niagarawater.com;
Sgulati@NiagaraWater.com
3. American Starlinger Sahm Trade Debt $3,861,609
11 Jack Casey Ct
Fountain Inn, SC 29644
Wes Wood
Tel: 864-297-1900
Email: wwood@starlingersahm.com
4. Riverside Public Utilities Utilities $3,808,674
3900 Main Street
Riverside, CA 92522-0144
Tel: 951-826-5311
Fax: 951-826-2356
Email: CallCenter@RiversideCA.gov
5. Allan Company Trade Debt $3,667,372
14620 Joanbridge St
Baldwin Park, CA 91706
Jason Young CEO
Tel: 626-962-4047
Fax: 626-962-7611
6. Polyquest, Inc. Trade Debt $3,222,880
7979 Eastwood Rd
Suite 201
Wilmington, NC 28403
Heather Mercer
Tel: 910-342-9554 x339
Fax: 910-342-9558
7. Everrank Investment Group, Inc. Trade Debt $2,464,339
17450 SIlica Drive
Victorville, CA 92395
United States
David Ha
Tel: 909-974-2811
Email: DavidHa@EverRankCA.com
8. Bantam Materials International Trade Debt $2,423,531
4207 Ste. Catherine St. West
Suite 202
Montreal, QC H3Z 1P6
Carolina Velarde COO
Tel: 401-952-6261
Email: Carolina.Velarde@BantamInc.com
9. PQ Recycling, Trade Debt $1,608,696
A Polyquest Company
1979 Eastwood Road, Suite 201
Wilmington, NC 28403
United States
Megan Adams
Tel: 910-342-9554
Email: Meganadams@polyquest.com
10. Engie Trade Debt $1,477,219
PO Box 9001025
Louisville, KY 40290-1025
Tamara Cooper
Email: tamara.cooper@engie.com
11. Replenysh, Inc. Trade Debt $1,451,947
345 South Pixley Street
Orange, CA 92868
Mark Luberski
Tel: 909-597-2868
Email: Mark.Luberski@replenysh.com
12. GP Harmon Recycling LLC Trade Debt $1,278,365
dba Harmon Associates LLC
1 Jericho Plaza, Suite 204
Jericho, NY 11753-1681
Susan Roth; Jason Smither
Tel: 951-787-1960
Email: Sroth@GAPAC.com;
Jsmithe@GAPAC.com
13. rPlanet Earth Los Angeles LLC Trade Debt $1,037,480
5300 South Boyle Avenue
Vernon, CA 90058
Rishi Moorjani, Controller
L. Worley
Tel: 213-330-4600
Email: lworley@rplanetearth.com
14. WorldWide of New York, Inc. Trade Debt $1,002,936
169 Commack Rd # 339
Commack, NY 11725
Lisa Lee, Jeff SooHoo
Tel: 516-997-3400
Tel: 516-983-6899
Email: jeff@wwofny.com
15. Southern California Utilities $962,919
Edison Company
10060 Telegraph Road
Ventura, CA 93004
Tel: 800-655-4555
Fax: 805-683-5264
16. Plastic Recycling Corp of Trade Debt $908,612
California
PO Box 1400
Suisun City, CA 94585-4400
Sally Houghton
Tel: 707-935-1997
Email: Shoughton@prcc.biz
17. Banyan Plastics Trade Debt $786,664
2393 South Congress Avenue
Suite 200
West Palm Beach, FL 33406
Sloan Sherman, Account Manager
Tel: 401-952-6261
Email: sloan@banyanplastics.com
18. Duris Corporation Trade Debt $707,170
2655 1st St
Suite 250
Simi Valley, CA 93065
Sam Hong
Tel: 818-262-4735
Email: SamHong805@Gmail.com
19. RePET Inc. Trade Debt $587,372
14207 Monte Vista Ave.
Chino, CA 91710
Tel: 909-594-5333
Email: sales@repetinc.com
20. Custom Polymers Pet, LLC Trade Debt $584,311
831 E. Morehead St, Ste 40
Charlotte, NC 28202
Petra
Email: Petra@custompolymers.com
21. Cigna Insurance $575,349
400 N. Brand Blvd.
3rd Floor
Glendale, CA 91203
Tel: 800-997-1654
Fax: 1-860-687-7336
Email: PDMGlendale@Cigna.com
22. Fairmont Logistics Trade Debt $513,003
9663 Santa Monica Blvd.
Suite 1092
Beverly Hills, CA 90210
Dalila Gomez
Tel: 310-564-7676
Email: dalila@fairmontlogistics.com
23. OCI International Inc. Trade Debt $507,931
11767 Katy Freeway, Suite 1140
Houston, TX 77079
Jake Hwang
Tel: 832-379-0001
Email: jake@ocii.net
24. Quality Freight Logistics, Inc. Trade Debt $473,100
24649 Mound Rd.
Warren, MI 48091
Philip Wojtuniecki
Tel: 248-313-9196
Email: Pwojtuniecki@qflteam.com
25. 2245 Valley, LLC Rent $451,047
225 W. Hospitality Lane
Suite 315
San Bernardino, CA 92408
Jamie Johnson
Tel: 951-565-4649
Fax: 909-890-3630
26. MacDermid Incorporated Trade Debt $407,294
PO Box 843568
Los Angeles, CA 90084-3568
Deborah Gorzelany
Tel: 203-575-5663
Email: Deborah.Gorzelany@macdermi
denthone.com
27. Plastic Express Trade Debt $388,246
15450 Salt Lake Avenue
City of Industry, CA 91745
Tel: 626-336-8111
Fax: 626-336-1180
28. American Supply Company Trade Debt $360,048
Sterling Industries, LP
1621 E. 27th Street
Los Angeles, CA 90011
Alex Nehora
Tel: 323-846-1200
Email: Anehorai@Aol.com
29. Waste Management Utilities $359,398
1001 Fannin
Suite 4000
Houston, TX 77002
Shameka Harney
Tel: 858-292-8111
Email: sharney@wm.com
30. Shermco Industries Inc. Trade Debt $358,423
PO Box 540545
Dallas, TX 75354
Allison Jones
Email: ajones@shermco.com
31. Sorema, Division of Previero Trade Debt $353,247
Via per Cavolto,
17-22040
Anzano del Parco (CO), Italy
Tel: 973-746-5225
Email: cwcozart@aol.com
32. MoLo Solutions Trade Debt $342,240
P.O Box 7050
Carol Stream, IL 60197-7050
Kelly Barnes
Email: kelly.barnes@shipmolo.com
33. Marglen Industries Inc. Trade Debt $340,638
1748 Ward Mountain Rd NE
Rome, GA 30161
M. Cook
Email: mcook@marglen.us
34. KT Resources Trade Debt $337,745
1340 East Route 66
Suite 200-D
Glendora, CA 91740
Kitaek Oh
Tel: 818-846-9134
Email: okt@ktresources.net
35. Indorama Ventures Trade Debt $327,917
Sustainable Solutions -
Fontana
11591 Etiwanda Avenue
Fontana, CA 92337
Paul Lee
Tel: 951-332-4660
Email: Paul.Lee@US.Indorama.net
36. Miles Chemical Company Inc. Trade Debt $326,868
12801 Rangoong Street
Arleta, CA 91331
United States
Dan Zinman
Tel: 818-504-3355
Email: cs@mileschemical.com
37. B&B Plastics Reclyclers Inc. Trade Debt $324,280
3040 N Locust Ave
Rialto, CA 92377
Susana Rodriguez
Tel: 909-829-3606
Email: info@bbplasticsinc.com
38. Exact Staff Trade Debt $324,195
21031 Ventura Blvd
Suite 501
Woodland Hills, CA 91364
Jennie Bowles
Tel: 818-348-1100
Email: jbowles@exactstaff.com
39. City of Riverside - Finance Utilities $318,157
Division
3900 Main Street 6th Floor
Riverside, CA 92522
Tel: 951-826-5311
Fax: 951-826-2356
Email: CallCenter@RiversideCA.gov
40. Shell Energy North Trade Debt $208,727
America (US) L.P.
1000 Main St. Level 12
Houston, TX 77002
Tel: 866-818-5501
Email: SENA.CustomerSupport@Shell.com
CARBONLITE HOLDINGS: Contemplates May Auction for Assets
--------------------------------------------------------
CarbonLite Holdings LLC sought Chapter 11 protection with a deal
with lenders on a sale of the assets to the highest bidder by May
2021.
In March 2010, Leon Farahnik founded CarbonLite Industries LLC
("Industries") to develop and operate a processing facility in
Riverside, California, that recycles recycled polyethylene
terephthalate ("rPET") bottles into food-grade rPET resin pellets.
In October 2013, the Company formed CarbonLite Recycling LLC
("Recycling") to develop and operate a second rPET processing
facility in Dallas, Texas. In 2018, the Company formed CarbonLite
P, LLC ("CLP") to develop and operate a third rPET processing
facility in Reading, Pennsylvania, which facility will be
operational by April 2021.
The Company is the largest supplier of rPET in the world and the
clear #1 supplier in North America with approximately 60% of
available market capacity. The two facilities can process 3.8
billion used bottles per year. Once the Reading Facility is fully
operational, the Company will have the capability to produce an
additional 85 million pounds of rPET pellets per year.
In addition to its core recycling business, in June 2016, the
Company acquired Pinnpack Packaging LLC, a leading producer of
high-quality, food-grade thermoformed PET and rPET packaging
products. PinnPack operates out of a facility in Oxnard,
California, where it produces plastic products including tubs,
bowls, domes, and clamshells for food packaging.
As of the Petition Date, the Debtors employ 492 full-time employees
and one part-time employee.
Prepetition Capital Structure
As of the Petition Date, the Debtors' funded indebtedness is
comprised of:
* $94.02 million outstanding under Tranche A and Tranche C
senior secured term loans provided under a credit agreement with
Orion Energy Partners Investment Agent, LLC, in its capacity as
administrative agent and collateral agent;
* $7.79 million outstanding under a revolving credit facility
with Bank Leumi USA, as lender;
* $45.765 million outstanding under Texas revenue bonds issued
by the Mission Economic Development Corporation pursuant to an
indenture with UMB Bank, N.A., as trustee; and
* $71.8 million outstanding under bonds issued by the
Pennsylvania Economic Development Financing Authority, pursuant to
an indenture with UMB, as trustee, which bonds were used to finance
the construction of the Reading Facility.
As of the Petition Date, certain of the Debtors are obligors with
respect to certain outstanding purchase money or capital lease
indebtedness that is secured by certain furnishings and equipment
located at each of the facilities. Indebtedness owing with respect
to the CA Facilities is $4.0 million, the PinnPack Facility is $2.6
million, and the Dallas Facility is $3.6 million.
In addition, as of the Petition Date, the Debtors' preliminary
estimate is that general unsecured debt (excluding the subordinated
loans, but including the customer deposits) totals approximately
$112.7 million in the aggregate, which estimate is subject to
change and includes certain potential unliquidated and/or
contingent claims.
Industries, Recycling, PinnPack, and CLP are obligors under
promissory notes granted in connection with loans obtained through
the Paycheck Protection Program(the "PPP Loans"). As of the
Petition Date, the approximate aggregate amount of the PPP Loans
made to the Debtors was $7.285 million.
Road to Chapter 11
Force Ten Partners, LLC's Brian Weiss, the Debtors' CRO, explains
that the need to commence the chapter 11 cases was a result of a
confluence of factors, including suboptimal plant utilization,
unfavorable pricing within customer contracts, interest expense on
debt obligations, high operating expenses relative to revenue
generation, and increases in hourly minimum wage obligations.
On a consolidated basis, for the year ended 2019, the Company
generated negative EBITDA of $52.3 million and net losses of $70.4
million. For the eleven months ended November 30, 2020, on a
consolidated basis, the Company generated negative EBITDA of $15.0
million (unaudited) and net losses of $45.8 million (unaudited).
The Company originally projected the Reading Facility to be fully
operational by mid-2020. However, as a result of international
travel restrictions necessitated by the COVID-19 pandemic, the
manufacturers of the equipment being installed at the Reading
Facility were unable to send technicians to Pennsylvania to
commission the state-of-the-art equipment. As a result, the
Reading Facility is presently operating at low capacity, but is
expected to be fully operational by April 2021. Once fully
operational, a significant amount of the Reading Facility's output
is already committed to customers.
In December 2020, the Debtors defaulted under the Prepetition Term
Credit Agreement and Prepetition ABL Credit Agreement, and in
January 2021, the Debtors defaulted under the PA Bonds and TX
Bonds.
In January 2021, the Debtors retained Pachulski Stang Ziehl & Jones
LLP as its restructuring counsel and Jefferies LLC as its
investment banker.
Jefferies commenced a robust marketing process for a sale of all or
a portion of the Debtors' assets. As of the Petition Date,
Jefferies has contacted 135 potential acquirers, and nine
interested parties have so far expressed interest in serving as a
stalking horse bidder for a potential transaction.
Debtors' Chapter 11 Cases
In consultation with their advisors, the Debtors approached
multiple potential lenders, including their existing lenders and
dozens of third-party lenders, regarding potential
debtor-in-possession financing to support the Debtors' efforts in
these chapter 11 cases. Certain members of each of the Prepetition
Term Secured Parties, Prepetition ABL Secured Parties, TX
Prepetition Secured Parties, and PA Prepetition Secured Parties
agreed to provide the Debtors with debtor-in-possession financing
facilities:
* The TX Debtors will obtain $15.0 million of DIP financing;
and
* The PA Debtors will obtain DIP financing consisting of a $25
million new-money term loan facility, and a roll-up facility (on a
basis of $2 dollars for each $1 dollar of new money loan).
The Debtors and the DIP Lenders reached an agreement on a case
timeline that adequately balances the Debtors' need to undertake a
robust marketing process for the sale of all or a portion of their
businesses with the need for all stakeholders to realize asset
value on an expeditious basis.
To that end, the DIP Facilities are conditioned on these case
milestones, among others:
* March 18, 2021: Deadline to file a motion seeking approval of
bidding procedures.
* April 7, 2021: Deadline to obtain approval of bidding
procedures.
* April 12, 2021: Deadline to obtain final approval of Final DIP
Order.
* May 7, 2021: Deadline to conduct the auction.
* May 9, 2021: Deadline to hold sale hearing.
* May 12, 2021: Deadline to obtain approval of sale(s).
* May 22, 2021: Deadline to close sale transaction(s).
Through the bankruptcy cases, the Debtors intend to continue
marketing their assets, whether as a whole or in parts, and work
toward consummating a value-maximizing sale or sales, and
re-negotiate and reject, if necessary, unfavorable customer
contracts.
About CarbonLite
CarbonLite is engaged in the processing of post-consumer recycled
polyethylene terephthalate ("rPET") plastic products and producing
rPET and polyethylene terephthalate ("PET") beverage and food
packaging products.
CarbonLite Holdings LLC and 10 of its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 21-10527) on March 8,
2021.
CarbonLite P, LLC, estimated assets of $100 million to $500 million
and debt of $50 million to $100 million.
The Hon. John T. Dorsey is the case judge.
PACHULSKI STANG ZIEHL & JONES LLP is the Debtors' counsel. REED
SMITH LLP is the corporate counsel. STRETTO is the claims agent.
CARBONLITE HOLDINGS: Hits Chapter 11 Bankruptcy Protection
----------------------------------------------------------
CarbonLite Holdings LLC, which claims to be the largest plastic
bottle recycler, has sought Chapter 11 bankruptcy protection.
Law360 reports that CarbonLite said it is looking for an asset sale
to alleviate nearly $367 million in debt after running at a loss
despite a growing demand for its product.
According to Law360, CarbonLite Holdings said it has been working
with "suboptimal" production levels and unfavorable contracts,
while the COVID-19 pandemic has delayed a new plant opening, slowed
production and depressed the price of plastic.
"We've chosen to take this necessary step during a time of
unprecedented challenge and expect to emerge from reorganization
even more strongly positioned for growth," said Carbonlite.
Present owners of CarbonLite include Sterling Capital LP and Crown
Poly Inc.
The company y owes more than $27 million to Nestle Waters North
America Inc. and more than $20 million to Niagara Bottling LLC.
About CarbonLite
CarbonLite is engaged in the processing of post-consumer recycled
polyethylene terephthalate ("rPET") plastic products and producing
rPET and polyethylene terephthalate ("PET") beverage and food
packaging products through its two
business segments, the Recycling Business and PinnPack.
CarbonLite Holdings LLC and 10 of its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 21-10527) on March 8,
2021.
CarbonLite P, LLC, estimated assets of $100 million to $500 million
and debt of $50 million to $100 million.
The Hon. John T. Dorsey is the case judge.
PACHULSKI STANG ZIEHL & JONES LLP is the Debtors' counsel. REED
SMITH LLP is the corporate counsel. STRETTO is the claims agent.
CHESAPEAKE ENERGY: Pays $5.3M Restitution in Deal w/ PA Atty. Gen.
------------------------------------------------------------------
Pennsylvania Attorney General Josh Shapiro on March 8, 2021,
announced that the Pennsylvania Office of Attorney General has
reached a settlement agreement with Chesapeake Energy (Chesapeake),
who filed for bankruptcy in June 2020. The settlement provides for
better payment of royalties for Pennsylvania landowners with
Chesapeake leases going forward; improved protections for
landowners through appointment of an Ombudsman to investigate
individual claims, OAG compliance and inspection rights, and annual
reporting; and $5.3 million in restitution for Pennsylvania
landowners with Chesapeake leases.
"The bottom line here is that this settlement will end the abuse
from Chesapeake and allow landowners to take a new lease with no
deductions," said AG Shapiro. "This case is about standing up to
powerful interests when they try to take advantage of people. And
it's about my duty, as the Attorney General of this Commonwealth,
to uphold the law and apply it."
The PA Office of Attorney General (OAG) initially filed a complaint
against Chesapeake Energy, the country's second-largest national
gas producer, in December 2015. The complaint alleged Chesapeake
engaged in unfair and deceptive business practices in securing
natural gas leases and in its improper payment of royalties to
Pennsylvania landowners. The complaint was amended in 2016 to add
Anadarko Petroleum (Anadarko) as a defendant and allegations that
Chesapeake and Anadarko allocated markets to secure leases and
deprived landowners of the benefit of competition for securing
leases.
In December 2017, the Bradford County Court of Common Pleas denied
Chesapeake's preliminary objections to the complaint finding that
the defendants and their oil and gas leasing practices are subject
to the Unfair Trade Practices and Consumer Protection Law (UTPCPL)
and that the lawsuit was in the public interest. The company then
appealed the decision and in March 2019, the Commonwealth Court of
Pennsylvania again found defendants and their oil and gas leasing
practices were subject to the UTPCPL. The defendants appealed to
the Pennsylvania Supreme Court, which conducted oral arguments in
May 2020.
On June 28, 2020, Chesapeake filed for bankruptcy in the U.S.
Bankruptcy Court for the Southern District of Texas, Houston
Division. The bankruptcy court stayed the Pennsylvania Supreme
Court case against Chesapeake so it could not go forward. On Feb.
9, 2021, Chesapeake emerged from bankruptcy, but an injunction was
put in place that continues to prevent the Office of Attorney
General from moving forward with this case and getting the
restitution landowners deserve. The case against Anadarko is
awaiting a decision by the Pennsylvania Supreme Court.
"For years, Chesapeake tried to publicly pressure my Office into
settling on their terms. That didn't happen," said Shapiro. "They
tried to argue that our court action was holding up settlements in
a separate, private class-action lawsuit filed directly by
landowners...None of this was necessary; they didn't have to act
like this, and the fact of the matter their conduct exposed their
disregard and mistreatment of folks here in Northeastern
Pennsylvania and in the Northern Tier."
Under the settlement, Chesapeake Energy must:
* Provide an opportunity to Pennsylvania landowners with
Chesapeake leases to obtain better payment of royalties going
forward;
* Stop offering leases that contain "market enhancement" clauses
or "ready for sale or use" clauses to Pennsylvania landowners;
* Hire an Ombudsman to investigate individual claims, selected by
AG Shapiro and Chesapeake, to review and respond to landowner
complaints;
* Allow the Pennsylvania OAG access to Chesapeake’s books and
records to ensure compliance with the settlement agreement;
* Provide clear, transparent pricing information on their
website, as well as an annual report to the Pennsylvania OAG
detailing royalty payments; and
* Pay landowners $5.3 million in restitution and $350,000 to the
OAG towards its costs and fees.
The settlement has been filed in the United States Bankruptcy Court
for the Southern District of Texas, Houston Division. Executive
Deputy Attorney General James Donahue, Chief Deputy Attorney
General Tracy Wertz, and Senior Deputy Attorneys General Joseph
Betsko and Norman Marden of the Public Protection Division and
Antitrust Section managed the case with assistance from the Civil
Division’s Appellate and Financial Enforcement Sections. The
investigation was conducted by Nina Correale and Logan Kane. The
AG’s office has posted a FAQ sheet here for those interested in
how this settlement will impact them.
About Chesapeake Energy Corp.
Headquartered in Oklahoma City, Chesapeake Energy Corporation's
(NASDAQ: CHK) operations are focused on discovering and responsibly
developing its large and geographically diverse resource base of
unconventional oil and natural gas assets onshore in the United
States.
Chesapeake Energy and its affiliates sought Chapter 11 protection
(Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after
reaching terms of a Chapter 11 plan of reorganization to eliminate
approximately $7 billion of debt.
The Debtors tapped Kirkland & Ellis LLP as legal counsel, Jackson
Walker LLP as co-counsel and conflicts counsel, Alvarez & Marsal as
restructuring advisor, Rothschild & Co and Intrepid Financial
Partners as financial advisors, and Reevemark as communications
advisor. Epiq Global is the claims agent, maintaining the page
http://www.chk.com/restructuring-information
Wachtell, Lipton, Rosen & Katz serves as legal counsel to
Chesapeake Energy's Board of Directors.
MUFG Union Bank, N.A., the DIP facility agent and exit facilities
agent, has tapped Sidley Austin LLP as legal counsel, RPA Advisors
LLC as financial advisor, and Houlihan Lokey Capital Inc. as
investment banker.
Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal
counsel to an ad hoc group of first lien last out term loan lenders
while Perella Weinberg Partners and Tudor, Pickering, Holt & Co.
serve as the group's investment bankers.
Franklin Advisers, Inc., has tapped Akin Gump Strauss Hauer & Feld
LLP as legal counsel, FTI Consulting, Inc. as financial advisor,
and Moelis & Company LLC as investment banker.
On July 9, 2020, the Office of the U.S. Trustee appointed a
committee to represent unsecured creditors in Debtors' Chapter 11
cases. The unsecured creditors' committee has tapped Brown Rudnick,
LLP and Norton Rose Fulbright US, LLP as its legal counsel, and
AlixPartners, LLP as its financial advisor.
On July 24, 2020, the bankruptcy watchdog appointed a committee of
royalty owners. The royalty owners' committee is represented by
Forshey & Prostok, LLP.
CICI'S HOLDINGS: Court Confirms Prepackaged Plan
------------------------------------------------
The Hon. Stacey G. Jernigan entered findings of fact, conclusions
of law, and an order confirming the Prepackaged Plan of
Reorganization of Cici's Holdings, Inc., et al.
Classes 1 and 2 constitute Unimpaired Classes, each of which is
conclusively presumed to have accepted the Plan in accordance with
section 1126(f) of the Bankruptcy Code. The Voting Class, Class 3,
has voted to accept the Plan. Holders of Claims and Interests in
Classes 4, 5, 6 and 7 are Unimpaired and conclusively presumed to
have accepted the Plan (to the extent Reinstated) or are Impaired
and deemed to reject the Plan (to the extent cancelled), and, in
either event, are not entitled to vote to accept or reject the
Plan.
As reported in the Troubled Company Reporter, parties to the RSA
are:
1. The Company and its subsidiaries;
2. D&G Investors, LLC, as assignee of Wells Fargo Bank, N.A.,
Citizens Bank, N.A., Cadence Bank, N.A., and Bank of America, N.A.,
the lenders under the Credit Agreement.
3. Interest holders Arlon Food and Agricultural Partners II LP,
AFAP II Co-Invest LP, and Continental Grain Company.
Among other things, the Plan and RSA contemplate the following:
* D&G will receive New Common Equity, which is comprised of
the common stock, limited liability company membership unit, or
functional equivalent thereof of Parent, or any successor or assign
thereof, on or after the Effective Date ("Reorganized Parent") and
a general unsecured deficiency claim;
* The Company's operations will be funded with a new debtor in
possession financing facility (the "DIP Facility") provided by D&G
that will (a) have a principal amount of up to $9 million,
comprised of $3 million of new credit and a deemed term loan "roll
up" of $6 million of Prepetition Credit Agreement Claims.
* Upon the agreement of the Company and D&G, up to $9 million
DIP Claims and an amount to be determined of Prepetition Credit
Agreement Claims may be converted into a new exit facility (the
"Exit Facility").
* Each Holder of an Allowed General Unsecured Claim shall
receive its Pro Rata share of the General Unsecured Recovery Pool.
* All executory contracts not constituting franchise
agreements, including leases of non-residential real property, will
be subject to assumption, rejection, or renegotiation, subject to
pro forma business needs of the Reorganized Debtors and with the
consent of the Consenting Lender.
* Substantially all of the Company's franchise agreements will
be assumed.
* All Administrative Claims, Other Priority Claims, and Other
Secured Claims will be paid in full in Cash or receive such other
treatment that renders such Claims unimpaired under the Bankruptcy
Code.
Under the Plan, each holder of an allowed general unsecured claim
(including, for the avoidance of doubt, deficiency claims of the
prepetition lender) will receive its pro rata share of the General
Unsecured Recovery Pool. "General Unsecured Recovery Pool" means
cash in an amount of $50,000. Holders of allowed general unsecured
claims are deemed to have rejected the Plan pursuant to Section
1126(g) of the Bankruptcy Code. Holders of allowed general
unsecured claims are not entitled to vote to accept or reject the
Plan.
A copy of the Plan Confirmation Order dated March 3, 2021, is
available at https://bit.ly/2PEc5OO
Counsel to the Debtors:
Jason S. Brookner
Aaron M. Kaufman
Lydia R. Webb
Amber M. Carson
GRAY REED & MCGRAW LLP
1601 Elm Street, Suite 4600
Dallas, Texas 75201
Telephone: (214) 954-4135
Facsimile: (214) 953-1332
Email: jbrookner@grayreed.com
akaufman@grayreed.com
lwebb@grayreed.com
acarson@grayreed.com
- and -
Paul D. Moak
GRAY REED & MCGRAW LLP
1300 Post Oak Boulevard, Suite 2000
Houston, Texas 77056
Telephone: (713) 986-7127
Facsimile: (713) 986-5966
E-mail: pmoak@grayreed.com
About CiCi's Holdings
CiCi's Holdings Inc. is the owner, operator and franchisor of
family-oriented unlimited pizza restaurants. With approximately
318 locations across 26 states, including 11 owned restaurants and
307 franchise locations owned and operated by 128 franchisees, the
CiCi's brand is known as a "go-to" destination for family and other
group outings through its wide variety of pizza, pasta, and salad
bar items and cost-effective price point.
CiCi's Holdings and its affiliates sought Chapter 11 protection
(Bankr. N.D. Tex. Lead Case No. 21-30146) on Jan. 25, 2021, with a
restructuring support agreement for a plan that would have lender
D&G Investors LLC take over ownership. D&G is an affiliate of
private investment firm Gala Capital.
Cici's Holdings was estimated to have $10 million to $50 million in
assets and $50 million to $100 million in liabilities as of the
bankruptcy filing.
The Hon. Stacey G. Jernigan is the case judge.
The Debtors tapped Gray Reed & McGRAW LLP as bankruptcy counsel and
Piper Sandler & Co. as investment banker. Stretto is the claims
agent.
COLUMBUS MCKINNON: Moody's Puts Ba3 CFR Under Review for Downgrade
------------------------------------------------------------------
Moody's Investors Service placed Columbus McKinnon Corporation's
Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating
and Ba2 senior secured bank debt ratings on review for downgrade.
There is no change to the company's SGL-1 Speculative Grade
Liquidity Rating.
The review for downgrade is prompted by the company's announcement
that it will acquire Dorner Manufacturing, a precision conveyor
systems provider, for approximately $485 million. Columbus McKinnon
management expects the acquisition to be largely debt-financed.
However, the company intends to raise $150 million of equity to
de-lever post-close of the proposed transaction. The acquisition
will enhance the company's scale and diversify its end-markets,
while contributing favorably to the company's profit margins. At
the same time, Moody's anticipates that the transaction will
increase Columbus McKinnon's financial leverage while the company
is in the midst of focusing on margin and earnings improvement
stemming from coronavirus-driven demand headwinds. Columbus
McKinnon expects to close the acquisition of Dorner during the
fiscal quarter ended June 30, 2021.
Ratings Placed On Review for Downgrade:
Issuer: Columbus McKinnon Corporation
Corporate Family Rating at Ba3
Probability of Default Rating at Ba3-PD
Senior secured first-lien revolving credit facility expiring 2023
at Ba2 (LGD3)
Senior secured first-lien term loan due 2024 at Ba2 (LGD3)
Outlook Actions:
Issuer: Columbus McKinnon Corporation
Outlook, Changed To Ratings Under Review From Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The review reflects Moody's expectation for weaker debt protection
metrics and increased leverage following the acquisition. Pro-forma
for the initial financing, Moody's estimates that total leverage
will exceed 6.5x debt/EBITDA, with subsequent de-levering if the
company successfully issues $150 million equity and uses proceeds
for debt repayment.
From a corporate governance perspective, given the leveraging
nature of the aforementioned transaction, Moody's views the
company's financial policy as more aggressive compared to recent
years. However, Moody's also notes that the company has a good
track record of meaningful de-leveraging post acquisitions.
The ratings review will focus on the overall impact the acquisition
has on Columbus McKinnon's business profile, including greater
scale and broadened end-market diversity. In its review, Moody's
will also consider the level of integration risk as this
acquisition will increase the company's revenues by approximately
20% and the ability of the company to successfully effectuate
anticipated restructuring actions and realize synergies. The review
will also focus on the outlook for the key markets served by the
company and the trajectory of those industries as they recover from
the coronavirus pandemic. Importantly, the review will also focus
on Columbus McKinnon's plans and ability to reduce leverage over
the next two years and the feasibility of that debt reduction based
on the company's anticipated free cash generation.
Headquartered in Getzville, NY Columbus McKinnon Corporation is a
global manufacturer of material handling products, systems and
services, which efficiently and ergonomically move, lift, position
or secure material. Key products include hoists, chains, actuators
and rigging tools and drives and controls. Net sales are
approximately $653 million.
COMPASS GROUP: Moody's Affirms Ba3 CFR & Rates Unsecured Notes B1
-----------------------------------------------------------------
Moody's Investors Service affirmed Compass Group Diversified
Holdings LLC's Corporate Family Rating at Ba3 and Probability of
Default Rating at Ba3-PD. Concurrently, Moody's assigned a Ba1
rating to the company's proposed new $600 million senior secured
revolving facility due 2026, and a B1 rating to the proposed new
$750 million senior unsecured notes due 2029. The Speculative Grade
Liquidity rating remains SGL-1. The outlook is stable.
Proceeds from the proposed new $750 million senior unsecured notes
will be used to refinance the company's existing 8.00% $600 million
senior unsecured notes due 2026, partially repay outstanding
borrowings on its existing $600 million secured revolving facility
due 2023, and to pay related fees and expenses. Following the close
of the proposed refinancing transaction, Moody's will withdraw the
ratings of the company's existing senior unsecured notes and
secured revolver facility as these obligations will no longer be
outstanding.
The ratings affirmations reflects that the proposed notes offering
is leverage neutral, with Compass' debt/EBITDA leverage at around
3.9x as of fiscal year end December 31, 2020, and pro forma for
recent acquisitions. In addition, the transaction improves
liquidity by increasing revolver availability, extends the
company's debt maturity profile, and will reduce Compass' interest
expense burden given the anticipated lower interest rate on the
proposed new notes.
The Ba1 rating assigned to the company's proposed new $600 million
secured revolving facility due 2026, reflects the revolver's
priority of payment relative to the company's senior unsecured
notes and Moody's expectation that the company will utilize the
revolver to fund prospective acquisitions. Of note, the revolver is
not guaranteed by the company's operating subsidiaries, but is
secured on a first lien basis by Compass' assets, including
intercompany loans, which are secured on a first lien basis by each
subsidiary's assets. The B1 rating assigned to the company's
proposed new $750 million unsecured notes due 2029, reflects the
notes subordination relative to the company's secured revolver.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: Compass Group Diversified Holdings LLC
Senior Secured 1st Lien Revolving Credit Facility, Assigned Ba1
(LGD2)
Senior Unsecured Notes, Assigned B1 (LGD5)
Affirmations:
Issuer: Compass Group Diversified Holdings LLC
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Outlook Actions:
Issuer: Compass Group Diversified Holdings LLC
Outlook, Remains Stable
RATINGS RATIONALE
Compass Ba3 stable credit profile reflects its improving scale with
revenue of around $1.6 billion, pro forma for recent acquisitions,
and its solid industry and product diversification resulting from
its controlling ownership interest in ten distinct operating
businesses. Compass has a publicly stated financial policy that
targets financial leverage of 3.0x - 3.5x (per the company's
calculation). Also, in the event leverage increases to 4.0x, the
company has committed to focus on deleveraging. Compass' very good
liquidity as reflected in its SGL-1 speculative grade liquidity
rating, is supported by around $400 million availability on its
$600 million revolving credit facility pro forma for the
refinancing transaction, together with approximately $77 million of
cash as of December 31, 2020, and its access to alternate
liquidity.
Compass' credit profile also reflects its elevated financial
leverage with debt/EBITDA at around 3.9x as of fiscal year end
December 31, 2020, and pro forma for recent acquisitions and
refinancing transaction, up from 2.4x the end of fiscal year end
2019. The company's higher financial leverage, which is at the high
end of our range set for its Ba3 rating, reduces the cushion to
absorb sustained weaker operating results and credit metrics, and
limits its capacity to utilize debt to fund growth investments and
acquisitions. Also, Compass' policy of distributing the majority of
its cash flow to shareholders limits free cash flow. Moody's
projects debt/EBITDA leverage will improve to the mid-3x over the
next 12-18 months, driven by earnings growth, as Moody's expect the
company will prioritize cash flows to fund add-on acquisitions and
dividend distributions. Compass is exposed to the potential for
headline risk on some of it businesses, particularly Velocity
Outdoor (social risk) and Altor Solutions (environmental risk).
The stable outlook reflects Moody's expectation that Compass will
sustain revenue and earnings growth resulting in good operating
cash flow generation and debt/EBITDA sustained below 4x over the
next 12 months. Moody's also expects Compass to continue to
distribute most of its cash flow to shareholders and pursue add-on
acquisitions over the next 12-18 months, but remain committed to
debt reduction following such acquisition.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company demonstrates steady
revenue growth and stable operating margin, while debt/EBITDA is
maintained below 2.5x, and free cash flow/debt is above 10%.
Ratings could be downgraded if debt/EBITDA is above 4.0x,
EBIT/interest below 2.0x, or if the company increases debt to fund
a distribution or share repurchase.
The principal methodology used in these ratings was Consumer
Durables Industry published in April 2017.
Compass Group Diversified Holdings LLC is a publicly traded company
(NYSE: CODI) that holds majority ownership interests in ten
distinct operating subsidiaries including 5.11 Tactical, Velocity
Outdoor (formerly Crosman), Advanced Circuits, Sterno Group, Arnold
Magnetics, Liberty Safe, Ergobaby, Altor Solutions (formerly Foam
Fabricators), Marucci Sports, and Boa. Pro-forma for the recent
acquisitions of Marucci Sports and Boa Technologies, the company
generated about $1.664 billion of revenue for the fiscal year end
December 31, 2020, pro forma for recent acquisitions.
CORELOGIC INC: Moody's Completes Review, Retains Ba2 Rating
-----------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of CoreLogic, Inc. and other ratings that are associated
with the same analytical unit. The review was conducted through a
portfolio review discussion held on February 24, 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
CoreLogic's Ba2 rating is constrained by the risk for a surge in
pandemic impacts to disrupt mortgage refinancing and home sale
activity, integration risks from M&A activity focused on enhancing
the data analytics business and exposure to regulatory pressures in
the industry. The rating is supported by the company's market
leading position in real estate related businesses, strong free
cash flow and data analytics offerings which have stable recurring
subscription revenues.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
CYPRUS MINES: U.S. Trustee Appoints Tort Claimants' Committee
-------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed a committee to
represent tort claimants in the Chapter 11 case of Cyprus Mines
Corp.
The committee members are:
1. Hillary Corbett, Representative
Estate of Carl F. Lichenstein
c/o Audrey Raphael, Esq.
Levy Konigsberg LLP
605 Third Ave., NY, NY 10158
Tel: 212-605-6206
Fax: 212-605-6290
E-mail: ARaphael@LevyLaw.com
2. Sonna Gregory
c/o John R. Bevis, Esq.
Barnes Law Group, LLC
31 Atlanta Street
Marietta, GA 30060
Tel: 770-227-6375
Fax: 770-227-6373
E-mail: bevis@barneslawgroup.com
3. Betsey P. Hardman
c/o Maura Kolb, Esq.
Lanier Law Firm
10940 W. Sam Houston Pkwy, Suite 100
Houston, TX 77064
Tel: 713-659-5200
Fax: 713-659-2204
E-mail: maura.kolb@lanierlawfirm.com
4. Melissa Lynne Roy Kaiser, Administrator
Estate of Lynne L. Roy
c/o J. Bradley Smith, Esq.
Dean Omar Branham Shirley, LLP
302 N. Market St., Suite 300
Dallas, TX 75202
Tel: 214-722-5990
Fax: 214-722-5991
E-mail: bsmith@dobslegal.com
5. Charles K. Stuart
c/o Beth Gori, Esq.
The Gori Law Firm
156 N. Main Street
Edwardsville, IL 62025
Tel: 618-659-9833
Fax: 618-659-9834
E-mail: beth@gorilaw.com
6. Rosemarie J. Windisch
c/o Justine Delaney, Esq.
Weitz & Luxenberg, PC
700 Broadway
New York, NY 10003
Tel: 212-558-5683
Fax: 212-344-5461
E-mail: jdelaney@weitzlux.com
7. Patsy Young
c/o Leah Kagan, Esq.
Simon Greenstone Panatier, P.C.
1201 Elm Street, Suite 3400
Dallas, TX 75270
Tel: 214-276-7680
Fax: 214-276-7699
E-mail: lkagan@sgptrial.com
About Cyprus Mines Corp.
Cyprus Mines Corporation is a Delaware corporation and a
wholly-owned subsidiary of Cyprus Amax Minerals Co., which is an
indirect subsidiary of Freeport-McMoRan Inc. It currently has
relatively limited business operations, which include the ownership
of various parcels of real property, certain royalty interests that
generate de minimis revenue (e.g., less than $1,500 in each of the
past two calendar years), and the ownership of an operating
subsidiary that conducts marketing activities.
Cyprus Mines is a predecessor in interest of Imerys Talc America,
Inc. In June 1992, Cyprus Mines sold its talc-related assets to
RTZ America Inc. (later known as Rio Tinto America, Inc.) through a
two-step process. First, Cyprus Mines transferred its talc-related
assets and liabilities (subject to minor exceptions) to Cyprus Talc
Corporation, a newly formed subsidiary of Cyprus Mines, pursuant to
an Agreement of Transfer and Assumption, dated June 5, 1992.
Second, Cyprus Mines sold the stock of Cyprus Talc Corporation to
RTZ pursuant to a Stock Purchase Agreement, also dated June 5, 1992
(as amended, the "1992 SPA"). The purchase price was approximately
$79.5 million. Cyprus Talc Corporation was later renamed Imerys
Talc America, Inc. By virtue of the 1992 ATA, the entity now named
Imerys expressly and broadly assumed the talc liabilities of Cyprus
Mines and its former subsidiaries that were in the talc business.
Cyprus Mines filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 21-10398) on Feb. 11, 2021, listing assets of between
$10 million and $50 million, and liabilities of between $1 million
and $10 million.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtor tapped Reed Smith, LLP as its bankruptcy counsel and
Kasowitz Benson Torres, LLP as its special conflicts counsel.
Prime Clerk, LLC is the claims agent.
D. J. GUZZARDO: May 4 Plan Confirmation Hearing Set
---------------------------------------------------
On Feb. 25, 2021, the U.S. Bankruptcy Court for the Eastern
District of Louisiana conducted a hearing on the First Amended
Small Business Disclosure Statement filed by Debtor D. J. Guzzardo,
Inc., on January 27, 2021.
On March 2, 2021, Judge Meredith S. Grabill approved the Disclosure
Statement and ordered that:
* May 4, 2021, at 9:00 a.m. is set for the Plan confirmation
hearing.
* April 27, 2021, is fixed as the last day for filing
acceptances or rejections of the debtor's fourth amended chapter 11
plan of reorganization.
* Tuesday, April 27, 2021, is fixed as the last day for filing
and serving, pursuant to Rule 3020(b) (1), written objections to
confirmation of the Plan.
* April 9, 2021, is fixed as the last day to file an affidavit
of mailing by the Debtor's counsel.
* April 30, 2021, is fixed as the last day for the Debtor's
counsel to tabulate the acceptances and/or rejections of the Plan.
A full-text copy of the order dated March 2, 2021, is available at
https://bit.ly/3eleUP4 from PacerMonitor.com at no charge.
Counsel for the Debtor:
Phillip K. Wallace, Esq.
Phillip K. Wallace, PLC
4040 Florida Street, Suite 203
Mandeville, LA 70448
Telephone: (985) 624-2824
Facsimile: (985) 624-2823
Email: Philkwall@aol.com
About D.J. Guzzardo
D.J. Guzzardo, Inc., sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. La. Case No. 20-10141) on Jan. 20,
2020. At the time of the filing, the Debtor disclosed assets of
between $500,001 and $1 million and liabilities of the same range.
Phillip K. Wallace, Esq., is the Debtor's legal counsel.
DIAMOND BC: Planned IPO No Impact on Moody's B3 CFR
---------------------------------------------------
Moody's Investors Service stated that Diamond (BC) B.V.
(Diversey's) plans for an Initial Public Offering do not
immediately impact the company's ratings, but could become a
material positive credit development for the company depending on
the amount of equity issued and the amount of debt repaid from net
proceeds.
On March 1, 2021, Diversey Holdings, LTD., the ultimate parent
company of Diversey, filed a Form S-1 registration statement with
the SEC relating to an initial public offering of ordinary common
stock. The filing specifies that the net proceeds from the offering
will be used to reduce debt. Full details of the proposed offering,
including the size of the IPO and intended share price, have not
been disclosed. However, Moody's believe that a public offering of
less than half of the company's equity would generate meaningful
proceeds relative to about $2.7 billion in outstanding debt
reported on Diversey's balance sheet at December 31, 2021.
Excluding the benefit of any prospective IPO and debt repayment,
Moody's near-term expectations for the company include adjusted
financial leverage in the range of 6.0-6.5 times (Gross
Debt/EBITDA), positive and improving free cash flow, and roughly
$430 million of available liquidity from cash and revolver
availability. Moody's estimate retained cash flow to debt near 8%
(RCF/Debt) free cash flow to debt near 3% (FCF/Debt) and adjusted
financial leverage in the low-to-mid 6 times range for the twelve
months ending December 31, 2021. Moody's could upgrade the rating
with expectations for adjusted financial leverage sustained below
5.5 times and positive free cash flow, both with a favorable
trajectory, and if liquidity remains adequate.
On November 10, 2020, Moody's affirmed the Corporate Family Rating
(CFR) of Diversey at B3 but changed the outlook to stable from
negative. The stable outlook reflects the restoration of positive
free cash flow through both improved earnings and reduced
collective cash usage for transitioning to freestanding status
following the separation from Sealed Air in 2017, and the reduction
in other cash usage for restructuring, new business wins and net
acquisition costs. The change to a stable outlook also reflects the
improving EBITDA trend and a more favorable outlook arising from
management actions as well as COVID related tailwinds and new
business opportunities.
Headquartered in Fort Mill, South Carolina, Diversey is a global
supplier of cleaning, hygiene, sanitizing products, equipment and
related services to the institutional and industrial cleaning and
sanitation markets. The company generated approximately $2.6
billion of sales in 2020. Diversey is a portfolio company of Bain
Capital.
ELECTROTEK CORP: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Electrotek Corporation
1430 Century Drive
Carrollton, TX 75006
Business Description: Electrotek Corporation is a privately held
company that manufactures electrical
equipment and component.
Chapter 11 Petition Date: March 8, 2021
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 21-30409
Judge: Hon. Michelle V. Larson
Debtor's Counsel: Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Tel: (972) 503-4033
E-mail: joyce@joycelindauer.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Mike Swerdlow, chief financial officer.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/A4WPUOQ/Electrotek_Corporation__txnbke-21-30409__0001.0.pdf?mcid=tGE4TAMA
FAIR ISAAC: Moody's Completes Review, Retains Ba2 CFR
-----------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Fair Isaac Corporation and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review discussion held on February 24, 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
Fair Isaac's (FICO) Ba2 corporate family rating is supported by its
leading eponymous consumer credit score and related analytics and
software, strong free cash flow generation relative to its debt
compared to other Ba2 rated corporate issuers and strong demand
from its credit bureau and financial industry customers. The rating
is constrained by the company's small-for-Ba2 revenue size, narrow
product scope, high customer concentration and financial strategies
emphasizing cash shareholder returns.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
FERRELLGAS LP: Seeks $2.2 Billion to Refinance Existing Debt
------------------------------------------------------------
Allison McNeely of Bloomberg News reports that Ferrellgas LP is
preparing to raise new debt and preferred equity to refinance more
than $2 billion of operating company obligations through 2025, the
final step in efforts to clean up its overall balance sheet.
The propane distributor is working with JPMorgan Chase & Co. to
raise nearly $1.5 billion of new unsecured notes and Moelis & Co.
for about $700 million of new preferred equity, according to people
with knowledge of the matter. Terms of the bond and preferred
equity deals are still being negotiated and could change, the
people said.
About Ferrellgas
Ferrellgas Partners, LP, is a publicly-traded Delaware limited
partnership formed in 1994 that has two direct subsidiaries,
Ferrellgas Partners Finance Corp. and non-debtor Ferrellgas, LP.
Ferrellgas 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 non-debtor OpCo, 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 and commercial and portable tank
exchange customers are generally urban.
Ferrellgas Partners LP and Ferrellgas Partners Finance filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Case Nos. 21-10021 and 21-10020) on Jan. 11,
2021. James E. Ferrell, chief executive officer and president,
signed the petitions.
At the time of the filing, Ferrellgas Partners, LP was estimated to
have $100 million to $500 million in both assets and liabilities
while Ferrellgas Partners Finance was estimated to have less than
$50,000 in assets and $100 million to $500 million in liabilities.
Judge Mary F. Walrath oversees the cases.
The Debtors tapped Squire Patton Boggs (US) LLP as primary
bankruptcy and restructuring counsel; Chipman, Brown, Cicero &
Cole, LLP as local bankruptcy counsel; Moelis & Company LLC as
investment banker; and Ryniker Consultants as financial advisor.
Prime Clerk LLC is the claims, noticing & solicitation agent.
FERRELLGAS PARTNERS: Seeks to Hire PwC to Provide Tax Services
--------------------------------------------------------------
Ferrellgas Partners, LP and Ferrellgas Partners Finance Corp. seek
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ PricewaterhouseCoopers, LLP.
The firm will provide tax services related to the preparation of
investor K-1 tax reporting packages.
PwC will be compensated as follows:
a. For base services such as the preparation of investor tax
packages and revaluation of partnership property, the firm will
receive $200,000 for the tax year 2020 and $200,000 for the tax
year 2021.
b. For services such as the establishment and maintenance of
secure data transfer solution, PwC will bill the Debtors $1.25 per
record.
c. For support services such as access to investor
information, the fee is $.75 per tax package created.
d. PwC's fees for formatting the data reported on the tax
package in a way that conforms to the IRS required electronic file
formats related to the Debtors’ Federal 1065 return are included
in the "base services fee." Additional fees for formatting the
data reported on the tax package in a way that conforms to state
specific requirements or formats are as follows: Prepare partner
data in State eFile format for the State return –- $1,000 USD per
state.
PwC is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code, according to court filings.
The firm can be reached through:
Robert S. Baldwin
PricewaterhouseCoopers LLP
300 Madison Avenue
New York, NY 10017-6204
Tel: +1 (646) 471 3000/4000
About Ferrellgas Partners
Ferrellgas Partners, LP is a publicly traded Delaware limited
partnership formed in 1994 that has two direct subsidiaries,
Ferrellgas Partners Finance Corp. and non-debtor Ferrellgas, LP.
Ferrellgas 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 non-debtor OpCo, 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 and commercial and portable tank
exchange customers are generally urban.
Ferrellgas Partners LP and Ferrellgas Partners Finance filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Case Nos. 21-10021 and 21-10020) on Jan. 11,
2021. James E. Ferrell, chief executive officer and president,
signed the petitions.
At the time of the filing, Ferrellgas Partners, LP was estimated to
have $100 million to $500 million in both assets and liabilities
while Ferrellgas Partners Finance was estimated to have less than
$50,000 in assets and $100 million to $500 million in liabilities.
Judge Mary F. Walrath oversees the cases.
The Debtors tapped Squire Patton Boggs (US) LLP as primary
bankruptcy and restructuring counsel; Chipman, Brown, Cicero &
Cole, LLP as local bankruptcy counsel; Moelis & Company LLC as
investment banker; and Ryniker Consultants as financial advisor.
Prime Clerk LLC is the claims, noticing & solicitation agent.
FIELDWOOD ENERGY: Lexon Says Plan Patently Unconfirmable
--------------------------------------------------------
Lexon Insurance Company, Ironshore Indemnity Inc. and Ironshore
Specialty Insurance Company (collectively "Lexon") object to the
motion of Fieldwood Energy LLC and its Debtor Affiliates for entry
of an order approving the Disclosure Statement.
Lexon points out that the objective of the Disclosure Statement and
Plan is a restructuring of the Debtors' assets by way of assets
being either sold, vesting to new companies, or abandoned. However,
the Disclosure Statement lacks the necessary information that is
required in order for it to be approved.
Lexon further points out that:
* The Disclosure Statement does not disclose how the Lexon
Bonds are to be treated in the restructuring transactions; rather,
the Disclosure Statement appears to rely on a false assertion that
the Lexon Bonds can simply be assumed and assigned to the Credit
Bid Purchaser, FEW I and FEW III.
* The Disclosure Statement and Plan fail to discuss the
requirement that the Credit Bid Purchaser, FEW I and FEW III must
demonstrate an ability to obtain government licensing or regulatory
approval, as well as an ability to replace the Lexon Bonds.
* The Disclosure Statement does not disclose what
decommissioning and plugging & abandonment liability exists on a
lease-by-lease basis.
* The Disclosure Statement does not disclose if the Debtors
plan to conduct any P&A activity utilizing the asset base, which
would exist at confirmation of the Plan.
* The Disclosure Statement does not disclose whether any of
the leases in Exhibits C, D & E have already expired and therefore
not eligible to be transferred.
Lexon asserts that the sheer size of the 11 USC 503(b)(1)(A)
expenses render the Plan patently unconfirmable, citing that:
* The administrative priority nature of the P&A obligations
will need to paid pursuant to 11 USC 1129(a)(9) in order for the
Plan to be confirmed.
* Unless a creditor entitled to an administrative expense
claim has consented to different treatment, the creditor's
administrative expense claim must be paid in full on the effective
date of the plan.
* Without the ability to cover the 11 USC 503(b)(1)(A)
expenses, the Plan is patently unconfirmable and the Disclosure
Statement should be denied approval.
Counsel for Lexon:
Lee E. Woodard, Esq.
HARRIS BEACH PLLC
333 W. Washington Street, Suite 200
Syracuse, New York 13202
Telephone: (315)423-7100
Email: bkemail@harrisbeach.com
About Fieldwood Energy
Fieldwood Energy is a portfolio company of Riverstone Holdings
focused on acquiring and developing conventional assets, primarily
in the Gulf of Mexico region. It is the largest operator in the
Gulf of Mexico owning an interest in approximately 500 leases
covering over two million gross acres with 1,000 wells and 750
employees. Visit https://www.fieldwoodenergy.com for more
information.
Fieldwood Energy and its 13 affiliates previously sought Chapter 11
protection (Bankr. S.D. Texas Lead Case No. 18-30648) on Feb. 15,
2018, with a prepackaged plan that would deleverage $3.286 billion
of funded by $1.626 billion.
On Aug. 3, 2020, Fieldwood Energy and its 13 affiliates again filed
voluntary Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No.
20-33948). Mike Dane, senior vice president and chief financial
officer, signed the petitions.
At the time of the filing, Debtors disclosed $1 billion to $10
billion in both assets and liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Weil, Gotshal & Manges LLP as their legal
counsel, Houlihan Lokey Capital, Inc. as investment banker, and
AlixPartners, LLP as financial advisor. Prime Clerk LLC is the
claims, noticing and solicitation agent.
The first-lien group employed O'Melveny & Myers LLP as its legal
counsel and Houlihan Lokey Capital, Inc. as its financial advisor.
The RBL lenders employed Willkie Farr & Gallagher LLP as their
legal counsel and RPA Advisors, LLC as their financial advisor.
Meanwhile, the cross-holder group tapped Davis Polk & Wardwell LLP
and PJT Partners LP as its legal counsel and financial advisor,
respectively.
On Aug. 18, 2020, the Office of the U.S. Trustee appointed a
committee of unsecured creditors. Stroock & Stroock & Lavan, LLP
and Conway MacKenzie, LLC serve as the committee's legal counsel
and financial advisor, respectively.
FIREBALL REALTY: Court Approves Disclosure Statement
----------------------------------------------------
Judge Michael A. Fagone has entered an order approving the
Disclosure Statement of Fireball Realty LLC and setting an April
13, 2021 hearing to consider confirmation of the Debtor's Plan.
Ballots are due on or before April 6, 2021. Voting tabulation is
due on or before April 9, 2021.
Objections to confirmation of the Plan are due on or before April
6, 2021.
A hearing on confirmation of the Plan will be held on April 13,
2021, at 10:00 a.m. at the United States Bankruptcy Court,
Courtroom A, Warren B. Rudman, U.S. Courthouse, 55 Pleasant Street,
Concord, New Hampshire.
About Fireball Realty
Fireball Realty LLC is a real estate agency in Manchester, New
Hampshire.
The Debtor sought Chapter 11 protection (Bankr. D.N.H. Case No.
19-10922) on June 28, 2019.
The Debtor estimated assets and liabilities in the range of $1
million to $10 million.
The Debtor tapped William S. Gannon, Esq., at William S. Gannon
PLLC as counsel.
The petition was signed by Charles R. Sargent, Jr., member.
FRONTDOOR INC: Moody's Completes Review, Retains Ba3 CFR
--------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of frontdoor, inc. and other ratings that are associated
with the same analytical unit. The review was conducted through a
portfolio review discussion held on February 24, 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
frontdoor's Ba3 corporate family rating is supported by good
profitability, strong free cash flow generation, high customer
retention rates and the leading position in the US home warranty
space of its American Home Shield brand. The rating is constrained
by moderately high leverage and the potential for debt-funded
acquisitions.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
GENESIS INVESTMENT: April 7 Disclosure Statement Hearing Set
------------------------------------------------------------
On Feb. 1, 2021, Debtor Genesis Investment, LLC, filed with the
U.S. Bankruptcy Court for the Western District of New York a
Disclosure Statement and Plan. On March 2, 2021, Judge Michael J.
Kaplan ordered that:
* April 7, 2021, at 11:30 a.m. at Robert H. Jackson U.S.
Courthouse, 2 Niagara Square, 5th Floor, Orleans, Courtroom,
Buffalo, NY 14202 is the hearing to consider the approval of the
Disclosure Statement.
* April 5, 2021, is fixed as the last day for filing and
serving written objections to the Disclosure Statement.
* April 7, 2021, is fixed as the last day for filing proofs of
claim in this case.
* April 7, 2021, is fixed as the last day for filing
governmental proofs of claim.
A full-text copy of the order dated March 2, 2021, is available at
https://bit.ly/2N0lsHQ from PacerMonitor.com at no charge.
Counsel for the Debtor:
Richard J. Friedman, Jr.
RJ Friedman Attorneys
202 Main Street
Hamburg, NY 14075
Phone: 716-648-8000
Fax: 716-649-7672
About Genesis Investment
Genesis Investment, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D.N.Y. Case No. 18-11907) on Sept. 25,
2018. At the time of the filing, the Debtor estimated assets of
less than $500,000 and liabilities of less than $1 million. Judge
Michael J. Kaplan presides oversees the case. RJ Friedman
Attorneys represents the Debtor as bankruptcy attorney.
GTT COMMUNICATIONS: Starts Formal Creditor Talks on Bankruptcy Plan
-------------------------------------------------------------------
Allison McNeely and Katherine Doherty of Bloomberg News report that
GTT Communications Inc. has started formal talks with creditors
around a restructuring plan that would see its unsecured debt
holders take ownership of the telecommunications company through a
bankruptcy filing.
McLean, Virginia-based GTT is presenting creditors a proposal on
Monday, March 8, 2021, that would hand term loan holders a large
cash payment from the $2.15 billion sale of its infrastructure
unit, according to people with knowledge of the matter, who asked
not to be identified discussing confidential negotiations. Lenders
would also get new debt with a coupon in the 7% to 9% range and a
portion of the reorganized equity.
About GTT Communications
Based in Tysons, Virginia, GTT Communications Inc. (NYSE:GTT)
operates a global communications network, providing
telecommunications services to large, multinational enterprises,
carriers, and governments across five continents. On the Web:
HTTP://www.gtt.net/
* * *
At the end of February 2021, 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.
H2 BEVERAGES: Court Approves Reorganization Plan
------------------------------------------------
Judge Brenda t. Rhoades has entered an order confirming the Plan of
Reorganization of H2 Beverages, Inc. The judge also approved the
Disclosure Statement.
Section 5.2 of the Plan is modified to read as follows:
* 5.2 Class 1 Claimants (Allowed Administrative Claims of
Professionals, Landlord and US Trustee) are impaired and will be
paid as follows: Professional fees are subject to approval by the
Court as reasonable. Debtor's attorney's fees approved by the Court
and payable to the law firm of Eric Liepins, P .C. will be paid
immediately following the later of Confirmation or approval by the
Court out of the available cash. The Debtor and its landlord,
CIVF-V-TXI WOI -W02, LLC ("Cabot") entered into that certain Agreed
Order Granting Motion to Assume Lease and Related Relief ("Agreed
Order") entered by the Court at Docket Entry 35 on February 19,
2021. All terms and conditions of the Agreed Order shall govern the
treatment of the claims between the Debtor and Cabot and are
expressly incorporated into this Plan. To the extent that any
provision of the Disclosure Statement, the Plan, any document or
any order entered before Confirmation, including this Confirmation
Order, conflict with or are in any way inconsistent with the
provisions of the Agreed Order, the Agreed Order shall govern and
control. This case will not be closed until all allowed
Administrative Claims are paid in full. Class 1 Creditor Allowed
Claims are estimated as of the date of the filing of this Plan to
not exceed the amount of $15,000 including Section 1930 fees.
Section 1930 fees shall be paid in full prior to the Effective
Date. The Debtor is required to continue to make quarterly payments
to the U.S. Trustee and shall be required to file post-
confirmation operating reports until this case is closed. The Class
1 Claimants are impaired under
this Plan.
Under the Plan, Class 3 Claimants (Unsecured Creditors) are
impaired and shall be satisfied as follows: All Allowed Unsecured
Creditors other than the monies owed to Kurt Ruppman, in Class 3
shall share pro rata in the unsecured creditors pool. The Debtor
shall make monthly payments commencing on the Effective Date of $
1,000 into the unsecured creditors' pool. The Debtor shall make
distributions to the Class 3 creditors every 90 days commencing 90
days after the Effective Date. The Debtor shall make payments
until such time as all Allowed Class 3 creditor shall be paid in
full. The Debtor may prepay any Class 3 Claim at any time without
penalty. Mr. Ruppman shall subordinate his claims to the other
Class 3 claimants, and shall not be paid until all other Class 3
claimants have been paid in full. The Class 3 creditors are
impaired.
The Debtor's obligations under this Plan will be satisfied out of
the ongoing operations of the Reorganized Debtor.
Attorneys for the Debtor:
Eric A. Liepins
ERIC A. LIEPINS, P.C.
12770 Coit Road
Suite 1100
Dallas, Texas 75251
Tel: (972) 991-5591
Fax:
A copy of the Order is available at https://bit.ly/3qiJ0oQ from
PacerMonitor.com.
About H2 Beverages
H2 Beverages, Inc., was established in 2015 with the task of
researching and developing a hydrogen gas infusion prototype system
to infuse hydrogen into liquid beverages for the purpose of
promoting health and wellness benefits. H2 Beverages, in 2017,
leased an industrial space at 1601 Summit Avenue, Suite 100, Plano,
Texas. The Company has formulated a science backed successful
hydrogen infused beverage that is proven to offer real health and
wellness benefits, athletic sports performance improvements and as
a very successful therapeutic for the COVID-19 virus. The beverage
is HYDRO SHOT.
H2 Beverages, Inc., filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No.
20-41948) on Sept. 14, 2020. Eric A. Liepins, Esq., of the law
firm of Eric A. Liepins, P.C., serves as the Debtor's counsel.
HERTZ CORP: Unsecureds to Recover Not More Than 70% in Joint Plan
-----------------------------------------------------------------
The Hertz Corporation and its Debtor Affiliates filed with the U.S.
Bankruptcy Court for the District of Delaware a Joint Chapter 11
Plan of Reorganization and a Disclosure Statement on March 2,
2021.
Class 5 consists of all Unsecured Funded Debt Claims against Hertz
Corp.; Subsidiary Guarantors; and Rental Car Intermediate Holdings,
LLC. Each Holder of an Allowed Unsecured Funded Debt Claim against
Hertz Corp. and the Subsidiary Guarantors shall receive cash in an
amount equal to 70% of its Allowed Unsecured Funded Debt Claim; or
Reorganized Hertz Parent Interests pursuant to the exercise of its
Pro Rata share of Subscription Rights.
Class 6 consists of all General Unsecured Claims against a Debtor.
Each Holder of an Allowed General Unsecured Claim against a Debtor
shall receive, subject to the General Unsecured Elective Claim
election, its Pro Rata share of the General Unsecured Recovery Cash
Pool Amount without regard to the particular Debtor against which
such Claim is Allowed; provided, that, no Holder of an Allowed
General Unsecured Claim shall receive a recovery that exceeds 70%
of the Allowed amount of its General Unsecured Claim.
Class 7 consists of all General Unsecured Elective Claims against a
Debtor. Each Holder of an Allowed General Unsecured Elective Claims
shall receive, on the Effective Date or as soon as practical
thereafter, in full and final satisfaction, compromise, settlement,
release, and discharge of and in exchange for such Allowed General
Unsecured Elective Claim, Cash in an amount equal to the lesser of
(a) the Allowed amount of such Holde's General Unsecured Elective
Claim and (b) without regard to the particular Debtor against which
such Claim is Allowed. The treatment provided to General Unsecured
Elective Claims shall be funded from the General Unsecured Recovery
Cash Pool Account.
Class 10 consists of all Intercompany Interests held by a Debtor in
another Debtor. Intercompany Interests shall be Reinstated so as to
maintain the organizational structure of the Debtors as such
structure exists on the Effective Date unless implementation of the
Restructuring requires otherwise.
Class 11 consists of all Existing Hertz Parent Interests. Existing
Hertz Parent Interests shall be cancelled and released without any
distribution on account of such Interests.
The Plan is being proposed as a joint plan of reorganization of the
Debtors for administrative purposes only and constitutes a separate
chapter 11 plan of reorganization for each Debtor. The Plan is not
premised upon the substantive consolidation of the Debtors with
respect to the Classes of Claims or Interests set forth in the
Plan.
As reported in the Troubled Company Reporter, the proposed Plan
contemplates that Knighthead Capital Management, LLC and its
affiliates ("Knighthead") and Certares Opportunities LLC and its
affiliates ("Certares") will serve as the Plan Sponsors
and will commit to invest up to $4.2 billion to purchase up to 100%
(but not less than a majority) of the common stock of the
reorganized Hertz. This proposed investment, if consummated, will,
together with a new $1 billion first-lien financing, a new $1.5
billion revolving credit facility, and a new asset-backed
securitization facility to finance Hertz's U.S. vehicle fleet,
provide the basis for the proposed Plan and the funding needed for
Hertz to complete its financial restructuring and emerge from
Chapter 11 in early to mid summer. The equity investment will take
the form of a direct purchase of up to approximately $2.3 billion
of common equity of reorganized Hertz, together with a commitment
to backstop a rights offering for up to approximately $1.9 billion
of common equity in reorganized Hertz, which will be made
available
to unsecured creditors as part of the Plan.
The Reorganized Debtors shall fund distributions under the Plan
with Cash on hand; Cash proceeds from the New Money Investment; and
the proceeds of the Exit Term Loan Facility.
On the Effective Date, (i) the Backstop Parties shall purchase the
HHN Notes Guarantee Claim from the Holders of such Claim for
$553,073,500, (ii) all of the HHN Subscription Rights shall be
deemed to have been transferred to the Backstop Parties, pro rata
based on their respective Backstop Commitment, and (iii) the
Backstop Parties shall purchase all Reorganized Hertz Parent
Interests issuable in connection with the HHN Subscription Rights.
Pursuant to the restructuring implementation deed entered into in
connection with the Scheme of Arrangement, the primary obligations
under the HHN Notes will be exchanged for, and each Holder of HHN
Notes will receive, New HHN Notes in the principal amount of
$237,031,500.
Attorneys for the Debtors:
WHITE & CASE LLP
Thomas E Lauria
Matthew C. Brown
200 South Biscayne Boulevard, Suite 4900
Miami, FL 33131
Telephone: (305) 371-2700
- and -
J. Christopher Shore
David M. Turetsky
Andrew T. Zatz
Andrea Amulic
1221 Avenue of the Americas
New York, NY 10020
Telephone: (212) 819-8200
- and -
Jason N. Zakia
111 South Wacker Drive
Chicago, IL 60606
Telephone: (312) 881-5400
- and -
Roberto J. Kampfner
Ronald K. Gorsich
Aaron Colodny
Andrew Mackintosh
Doah Kim
555 South Flower Street, Suite 2700
Los Angeles, CA 90071
Telephone: (213) 620-7700
- and -
RICHARDS, LAYTON & FINGER, P.A.
Mark D. Collins
John H. Knight
Brett M. Haywood
Christopher M. De Lillo
J. Zach Noble
One Rodney Square
910 N. King Street
Wilmington, DE 19801
Telephone: (302) 651-7700
About Hertz Corp.
Hertz Corp. and its subsidiaries -- http://www.hertz.com-- Operate
a worldwide vehicle rental business under the Hertz, Dollar, and
Thrifty brands, with car rental locations in North America, Europe,
Latin America, Africa, Asia, Australia, the Caribbean, the Middle
East, and New Zealand. They also operate a vehicle leasing and
fleet management solutions business.
On May 22, 2020, The Hertz Corporation and certain of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court for
the District of Delaware (Bankr. D. Del. Case No. 20-11218).
Judge Mary F. Walrath oversees the cases. The Debtors have tapped
White & Case LLP as their bankruptcy counsel, Richards, Layton &
Finger, P.A. as local counsel, Moelis & Co. as investment banker,
and FTI Consulting as financial advisor. The Debtors also retained
the services of Boston Consulting Group to assist the Debtors in
the development of their business plan. Prime Clerk LLC is the
claims agent.
The U.S. Trustee for Regions 3 and 9 appointed a Committee to
represent unsecured creditors in Debtors' Chapter 11 cases. The
Committee has tapped Kramer Levin Naftalis & Frankel LLP as its
bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as
Delaware counsel, UBS Securities LLC as investment banker, and
Berkeley Research Group, LLC as financial advisor. Ernst & Young
LLP provides audit and tax services to the Committee.
IHS MARKIT: Moody's Completes Review, Retains Ba1 CFR
-----------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of IHS Markit Ltd. and other ratings that are associated
with the same analytical unit. The review was conducted through a
portfolio review discussion held on February 24, 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 1 January 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
IHS Markit's Ba1 corporate family rating is supported by its
leading position as a data provider in financial, transportation,
energy and other industries, its track record integrating
acquisitions, highly recurring revenue base and solid free cash
flow. The rating is constrained by financial policies which consist
of debt funded acquisitions and share repurchases, and history of
high financial leverage above its target range.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
INTELSAT SA: Appointment of Equity Committee Sought
---------------------------------------------------
A group of equity holders asked the U.S. Bankruptcy Court for the
Eastern District of Virginia to issue an order directing the
appointment of an official committee to represent equity holders in
the Chapter 11 cases of Intelsat S.A. and its affiliates.
The group, which calls itself the ad hoc committee of equity
holders of Intelsat S.A., said the appointment of an official
equity committee is warranted to protect equity holders whose
interests have not been recognized by any fiduciary or
representative.
In a letter to the Office of the U.S. Trustee, the shareholders
explain that the current need for an Official Equity Committee to
adequately represent Equity Holders' interests arises from a
dispute over whether Intelsat S.A. is entitled to receive over $4.8
billion in Accelerated Relocation Payments pursuant to an order
that the Federal Communications Commission adopted on February 28,
2020. According to the shareholders, a Standing Motion was
recently filed by the Ad Hoc Group of Convertible Noteholders
demonstrating a strong argument that Intelsat is entitled to those
payments. That claim would not only provide for a full distribution
to Intelsat S.A.'s $410 million or so of Convertible Noteholder
claims but, also, put equity "into the money" by upwards of $4.4
billion and, thereby, require a significant recovery for Equity
Holders.
Yet, the Intelsat fiduciaries who could be pursuing the payments to
Equity Holders' benefit -- whether conflicted or otherwise induced
from doing so -- have instead blessed a proposed plan that leaves
Convertible Noteholders with little and Equity Holders with
nothing. There is no other stakeholder, let alone a committee of
shareholders, in the case that can adequately protect Equity
Holders' unique interests, the shareholders argue.
On Feb. 12, 2021, Intelsat S.A. (OTC: INTEQ) filed a plan of
reorganization and explanatory disclosure statement. Intelsat said
it has obtained the support of key creditor constituencies on the
terms of a comprehensive financial restructuring that would reduce
the Company's debt by more than half -- from nearly $15 billion to
$7 billion -- and position the Company for long-term success. The
Plan has the support of holders of approximately $3.8 billion of
the Company's funded debt. The Company requested a hearing for
March 17, 2021 to seek Court approval of the Disclosure Statement
and establish procedures to solicit votes on the Plan.
"The committee, in its fiduciary capacity of representing all
equity holders, would be actively involved in the issues that
interest equity holders and would bind all equity holders through
adjudication or a consensual resolution," the ad hoc committee
said.
"The unified, upfront effort of the committee would prevent the
otherwise inevitable disarray, significant costs, and delays posed
by last-minute challenges and potential reversals of arrangements,"
the ad hoc committee further said.
The ad hoc committee is represented by:
Erika L. Morabito, Esq.
Brittany J. Nelson, Esq.
Foley & Lardner, LLP
3000 K Street, N.W., Suite 600
Washington, D.C. 20007-5109
Tel: (202) 295-4791
Fax: (202) 672-5399
E-mail: emorabito@foley.com
bnelson@foley.com
- and -
David E. Kovel, Esq.
Kirby McInerney, LLP
250 Park Avenue, Suite 820
New York, NY 10177
Tel: (212) 371-6600
E-mail: dkovel@kmllp.com
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. It is
also a provider of commercial satellite communication services to
the U.S. government and other select military organizations and
their contractors. The company's administrative headquarters are
in McLean, Virginia, and the Company has extensive operations
spanning across the United States, Europe, South America, Africa,
the Middle East, and Asia.
Intelsat S.A. and its debtor affiliates concurrently filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Lead Case No. 20-32299) on May 13, 2020. The
petitions were signed by David Tolley, executive vice president,
chief financial officer, and co-chief restructuring officer. At the
time of the filing, the Debtors disclosed total assets of
$11,651,558,000 and total liabilities of $16,805,844,000 as of
April 1, 2020.
Judge Keith L. Phillips oversees the cases. The Debtors tapped
Kirkland & Ellis LLP and Kutak Rock LLP as legal counsel; Alvarez &
Marsal North America, LLC as restructuring advisor; PJT Partners LP
as financial advisor & investment banker; Deloitte LLP as tax
advisor; and Deloitte Financial Advisory Services LLP as fresh
start accounting services provider. Stretto is the claims and
noticing agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on May 27, 2020. The committee tapped Milbank LLP and
Hunton Andrews Kurth LLP as legal counsel; FTI Consulting, Inc. as
financial advisor; Moelis & Company LLC as investment banker; Bonn
Steichen & Partners as special counsel; and Prime Clerk LLC as
information agent.
INTELSAT SA: Shareholders Ask Court for Committee Representation
----------------------------------------------------------------
Allison McNeely of Bloomberg News reports that a group of Intelsat
SA shareholders is asking a bankruptcy court to grant them formal
committee representation, empowering the group to fight for a piece
of the $4.8 billion in potential payments coming from the Federal
Communications Commission.
The shareholders argue that if the payments were to be received by
the parent company, it would cover the $410 million in claims
against Intelsat SA as well as 142 million shares, according to a
filing.
"The appointment of an Equity Committee in these consolidated
bankruptcy cases is vital to protect the interests of all Equity
Holders because their interests have not been recognized, let alone
protected, by any fiduciary or representative. Such appointment is
also mandated to further administrative efficiency because,
without an Equity Committee, disparate Equity Holders, who are
materially affected by the issues discussed below, would inevitably
seek to intervene in and/or object to litigation, negotiation,
mediation, and plan confirmation, resulting in greater delay,
confusion and costs than would result with an officially appointed
Committee in place and engaged, the Ad Hoc Committee of Equity
Holders said in court filings.
"Despite initially opposing the appointment of an Equity Committee,
the Debtors now agree, as per their filing last night, with the
need to "conserve[] judicial resources" by providing for these
"extremely complex" disputes to be "addressed in an orderly manner
and on a timeline that will provide all stakeholders with a fair
opportunity to advocate for their rights." The proposed Equity
Committee would certainly further that end. Furthermore, absent an
Equity Committee, a final, binding, and consensual resolution in
any litigation, mediation, or Plan contest proceeding could not be
achieved because Equity Holders, as a unified group, would not be
involved in the process or bound by any adjudication or
resolution."
Co-Counsel for Ad Hoc Committee of Equity Holders:
FOLEY & LARDNER LLP
Erika L. Morabito
Brittany J. Nelson
3000 K Street, N.W., Suite 600
Washington, D.C. 20007-5109
Telephone: (202) 295-4791
Facsimile: (202) 672-5399
E-mail: emorabito@foley.com
bnelson@foley.com
- and -
KIRBY McINERNEY LLP
David E. Kovel, Esq.
250 Park Avenue, Suite 820
New York, NY 10177
Telephone: (212) 371-6600
E-mail: dkovel@kmllp.com
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.
JFK HEATING: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: JFK Heating & Cooling, LLC
DBA JFK Heating and Cooling
DBA JFK Heating & Cooling
2524 Nordic Road
Dayton, OH 45414
Business Description: JFK Heating & Cooling, LLC --
https://www.jfkheatingandcooling.com --
is a heating and cooling company based in
Dayton, Ohio. The Company offers furnace
and air conditioning services in and around
Dayton.
Chapter 11 Petition Date: March 8, 2021
Court: United States Bankruptcy Court
Southern District of Ohio
Case No.: 21-30341
Debtor's Counsel: Patricia J. Friesinger, Esq.
COOLIDGE WALL CO., L.P.A.
33 West First Street, Suite 200
Dayton, OH 45402
Tel: 937-223-8177
Fax: 937-223-6705
E-mail: friesinger@coollaw.com
Total Assets: $431,058
Total Liabilities: $1,212,947
The petition was signed by Jason Kirby, member.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/52GSKLI/JFK_Heating__Cooling_LLC__ohsbke-21-30341__0001.0.pdf?mcid=tGE4TAMA
JSAA REALTY: Lee Says Financial Projections Inadequate
------------------------------------------------------
Hak Man Lee Trust, and subject to its prior objection Lee Trust
files this Objection to JSAA Realty, LLCs Amended Disclosure
Statement dated February 26, 2021.
Lee Trust points out that the disclosure statement does not include
a satisfactory set of financial projections:
* The financial projections of JSAA Enterprise, filed as an
exhibit to the third Amended Disclosure Statement, contains
inconsistent information which drastically alters the net profit.
* The 2021 Month by Month Projections show annual payrolls costs
of $41,000, annual payroll taxes of $3,126.25, annual property
taxes of $19,391.36, annual utility expenses of $18,000, and annual
phone and internet expenses of $4,800.00, all of which equates to
$86,317.61 in additional annual expenses in the year 2021. However,
in the Yearly Projections for 2022 to 2025, the above expenses are
all listed as zero, substantially modifying the anticipated Net
Profit/(Loss). The Yearly Projections will be substantially
different with a dramatically lower net profit once those annual
expenses are included.
Lee Trust further points out that the disclosure statement does not
include the identity and financial wherewithal of the tenant and
its principals:
* The Debtor wholly fails to provide any information as to the
financial wherewithal of the principals, namely Mr. Sincular and
Mr. Joshi. Instead, Debtor only disclosed that JSAA Enterprises had
gross revenues of $175,534.00 in 2019 and $162,325.00 in 2020.
Debtor failed to provide the expenses and net profit/loss of JSAA
Enterprises or its principals for those years. Information which
should be readily available from their prior tax returns. Debtor
also failed to provide the amount of cash on hand and credit
available for JSAA Enterprises and its principals.
* The Debtor should disclose the income, expenses, and profit
for both JSAA Enterprises and its principals as previously ordered
by the Court. If JSAA Enterprises or the principals did not keep
accurate records of their income, expenses, and profit for prior
years, then Debtor instead should disclose that information.
Lee Trust asserts that the disclosure statement does not state the
details regarding the status of the renovations, operations, and
projected opening of the tenant's business:
* The Debtor states "all major structural renovations have been
complete" and provides a short list of additional items that remain
unfinished, claiming that "Debtor believes the total cost for
completion will not exceed $200,000.00.". Debtor further states it
anticipates that the nightclub will be open by the end of 202. In
other words, Enterprises anticipates spending $200,000 in
renovations by the end of 2022. However, the 2021 Month by Month
Projections and Yearly Projections shows JSAA Enterprises only
spending $27,000 in renovations in 2021 and another $27,000 in the
year 2022, for a total to be spent on renovations of $54,000 by the
end of 2022.
* The Debtor fails to disclose where the remaining $146,000 in
funds spent on renovations will come from, and/or whether it
anticipates using the Property as collateral for additional debt.
Counsel for Hak Man Lee Trust:
Scott Crist
TAHERZADEH, PLLC
15851 N. Dallas Parkway, Suite 410
Addison, Texas 75001
Tel: (469) 729-6800
Fax: (469) 828-2772
E-mail: sc@taherzlaw.com
About JSAA Realty
JSAA Realty, LLC, is a single asset real estate debtor (as defined
in 11 U.S.C. Section 101(51B)). It is the owner of a fee simple
title to a property located at 11505 Anaheim Drive, in Dallas,
Texas, which is valued at $2.2 million.
JSAA Realty filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-32504) on
Oct. 2, 2020. Arpit Joshi, the managing member, signed the
petition. At the time of the filing, the Debtor disclosed $2.2
million in assets and $651,046 in liabilities. Eric A. Liepins,
P.C., serves as the Debtor's legal counsel.
JUST ENERGY: Files for Bankruptcy After Texas Freeze Hit
--------------------------------------------------------
Just Energy Group Inc. (TSX:JE; NYSE:JE) has sought and received
creditor protection via an Initial Order under the Companies'
Creditors Arrangement Act ("CCAA") from the Ontario Superior Court
of Justice (Commercial List) and is seeking similar protection
under Chapter 15 of the Bankruptcy Code in the United States.
Just Energy, a retail energy provider specializing in electricity
and natural gas commodities, said it has reached an agreement with
one of its Term Loan lenders for a US$125 million DIP financing.
The Company's largest commodity suppliers have also agreed to
continue to support the Company with commodity supply and ISO
services.
The filings, and associated US$125 million DIP financing arranged
by the Company, enable Just Energy to continue all operations
without interruption throughout the U.S. and Canada and to continue
making payments required by the Electric Reliability Council of
Texas, Inc. -- ERCOT -- and satisfy other regulatory obligations.
Just Energy sought and received a Stay of Proceedings and other
protections provided by the CCAA in order to provide the Company
with breathing room to pursue alternatives that would allow it to
emerge as a strong, stable business. The Stay of Proceedings in
favor of Just Energy has an initial 10-day term, subject to
extension as the Court deems appropriate. The filings have no
impact on customer bills.
Just Energy's March 9 filings are the result of unprecedented cold
weather in Texas in February and corresponding charges from ERCOT
currently totaling over US$250 million that Just Energy must pay in
the near term. The total financial impact may change due to ERCOT
resettlements, potential orders of the Public Utility Commission
with respect to recommendations of the Independent Market Monitor
("IMM"), the outcome of the dispute resolution process initiated by
the Company with ERCOT and potential litigation challenges. Since
these disputes are still pending and not resolved, Just Energy is
unable to pay the full amounts when due to ERCOT this week without
the arrangement of the DIP financing.
While Just Energy hedges weather risk based on historical
scenarios, the Weather Event in Texas was colder than anything
experienced in decades. A combination of customer usage and the
Real Time Settlement Point Price being artificially set at the high
offer cap of US$9,000 per megawatt hour contributed significantly
to the negative financial impact to the Company. The Weather Event
caused the ERCOT wholesale market to incur charges of approximately
US$55 billion over a seven-day period, an amount equal to what it
ordinarily incurs over four years. The total cost to Just Energy
and other market participants is still subject to adjustment by
ERCOT and may change.
On March 3, 2021, the Company filed a petition with the Commission
requesting an order that ERCOT deviate from the deadlines and
timing in its Protocols and Market Guides related to settlements,
collateral obligations, and invoice payments and suspend the
execution or issuance of invoices or settlements for intervals
during the dates of Feb. 14, 2021, through Feb. 19, 2021, until
issues related to the catastrophic Weather Event raised by
executive and legislative branches of the Texas authorities are
investigated, addressed, and resolved. Alternatively, Just Energy
requested that the Commission grant a waiver of certain ERCOT
Protocols to allow Just Energy to delay payment of certain invoices
related to the Weather Event while exercising its rights under the
ERCOT Protocols to dispute the invoiced payment amounts. To date,
Just Energy has not received this relief.
Just Energy will provide further updates as developments warrant. A
copy of the CCAA Initial Order and other information regarding the
CCAA proceedings will be available at the Monitor's website
http://cfcanada.fticonsulting.com/justenergy. Information
regarding CCAA proceedings can also be obtained by calling the
Monitor's hotline at 416-649-8127 or 1-844-669-6340 or by email at
justenergy@fticonsulting.com.
About Just Energy
Just Energy Group Inc. (TSX:JE; NYSE:JE) --
https//www.justenergy.com/ -- is a retail energy provider
specializing in electricity and natural gas commodities and
bringing energy efficient solutions and renewable energy options to
customers. Currently operating in the United States and Canada,
Just Energy serves residential and commercial customers. Just
Energy is the parent company of Amigo Energy, Filter Group Inc.,
Hudson Energy, Interactive Energy Group, Tara Energy, and
terrapass.
On March 9, 2021, Just Energy Group Inc., Just Energy Corp.,
Ontario Energy Commodities Inc., Universal Energy Corporation, Just
Energy Finance Canada ULC, Hudson Energy Canada Corp., Just
Management Corp., Just Energy Finance Holding Inc., 11929747 Canada
Inc., 12175592 Canada Inc., JE Services Holdco I Inc., JE Services
Holdco II Inc., 8704104 Canada Inc., Just Energy Advanced Solutions
Corp., Just Energy (U.S.) Corp., Just Energy Illinois Corp, Just
Energy Indiana Corp., Just Energy Massachusetts Corp., Just Energy
New York Corp., Just Energy Texas I Corp., Just Energy, LLC, Just
Energy Pennsylvania Corp., Just Energy Michigan Corp., Just Energy
Solutions Inc., Hudson Energy Services LLC, Hudson Energy Corp.,
Interactive Energy Group LLC, Hudson Parent Holdings LLC, Drag
Marketing LLC, Just Energy Advanced Solutions LLC, Fulcrum Retail
Energy LLC, Fulcrum Retail Holdings LLC, Tara Energy, LLC, Just
Energy Marketing Corp., Just Energy Connecticut Corp., Just Energy
Limited, Just Solar Holdings Corp., and Just Energy (Finance)
Hungary ZRT filed for protection under the Companies' Creditors
Arrangement Act ("CCAA") before the Ontario Superior Court of
Justice (Commercial List).
Just Energy Group Inc. and its affiliates filed petitions under
Chapter 15 of the Bankruptcy Code in the United States (Bankr. S.D.
Tex. Lead Case No. 21-30823) on March 9, 2021, to seek recognition
of the Canadian proceedings.
FTI Consulting Canada Inc. has consented to act as monitor in the
CCAA proceeding. BMO Capital Markets has been engaged as financial
advisor, Osler, Hoskin & Harcourt LLP and Fasken Martineau DuMoulin
LLP are legal advisors in Canada, Kirkland & Ellis LLP and Jackson
Walker LLP are legal advisors in the United States.
JUST ENERGY: U.S. Judge Grants Provisional Relief
-------------------------------------------------
Just Energy Group Inc. has received creditor protection under
Chapter 15 of the Bankruptcy Code in the United States.
The Chapter 15 order by Bankruptcy Judge Marvin Isgur in the
Southern District of Texas recognizes the protection granted
earlier via an Initial Order under the Companies' Creditors
Arrangement Act ("CCAA") from the Ontario Superior Court of Justice
(Commercial List) so that the CCAA protections also apply to the
Company's assets and creditors located in the United States. In
addition, Judge Isgur ruled that section 525 of the U.S. Bankruptcy
Code would apply and he would retain "exclusive" jurisdiction for
any relief sought under such law -- i.e. any act specified by
section 525 purported to be taken by a "governmental unit" in the
United States against the Company in the United States must be
heard by Judge Isgur; in general, section 525 prohibits a
governmental unit from suspending or revoking a license based upon
a party's status as a debtor in a bankruptcy case or for nonpayment
of certain debts. Finally, Judge Isgur ruled that any payments by
the Company to ERCOT will be subject to Just Energy's rights to
contest the payments and receive a refund or credit under
applicable law.
According to PacerMonitor.com, Judge Isgur on March 9, 2021,
entered an order granting Just Energy provisional relief pursuant
to Sec. 1519 of the Bankruptcy Code. A recognition hearing is
scheduled for April 2 at 11 a.m.
Just Energy said in its announcement that the filings, and
associated US$125 million DIP financing arranged by the Company,
enable Just Energy to continue all operations without interruption
throughout the United States and Canada and to continue making
payments required by ERCOT and satisfy other regulatory
obligations. The filings have no impact on customer bills.
Just Energy will provide further updates as developments warrant. A
copy of the CCAA Initial Order and other information regarding the
CCAA proceedings will be available at the Monitor's website
http://cfcanada.fticonsulting.com/justenergy.Information regarding
the CCAA proceedings can also be obtained by calling the Monitor's
hotline at 416-649-8127 or 1-844-669-6340 or by email at
justenergy@fticonsulting.com. A copy of the Chapter 15 order and
other information regarding the Chapter 15 proceedings will be
available at https://omniagentsolutions.com/justenergy
About Just Energy
Just Energy Group Inc. (TSX:JE; NYSE:JE) --
https//www.justenergy.com/ -- is a retail energy provider
specializing in electricity and natural gas commodities and
bringing energy efficient solutions and renewable energy options to
customers. Currently operating in the United States and Canada,
Just Energy serves residential and commercial customers. Just
Energy is the parent company of Amigo Energy, Filter Group Inc.,
Hudson Energy, Interactive Energy Group, Tara Energy, and
terrapass.
On March 9, 2021, Just Energy Group Inc., Just Energy Corp.,
Ontario Energy Commodities Inc., Universal Energy Corporation, Just
Energy Finance Canada ULC, Hudson Energy Canada Corp., Just
Management Corp., Just Energy Finance Holding Inc., 11929747 Canada
Inc., 12175592 Canada Inc., JE Services Holdco I Inc., JE Services
Holdco II Inc., 8704104 Canada Inc., Just Energy Advanced Solutions
Corp., Just Energy (U.S.) Corp., Just Energy Illinois Corp, Just
Energy Indiana Corp., Just Energy Massachusetts Corp., Just Energy
New York Corp., Just Energy Texas I Corp., Just Energy, LLC, Just
Energy Pennsylvania Corp., Just Energy Michigan Corp., Just Energy
Solutions Inc., Hudson Energy Services LLC, Hudson Energy Corp.,
Interactive Energy Group LLC, Hudson Parent Holdings LLC, Drag
Marketing LLC, Just Energy Advanced Solutions LLC, Fulcrum Retail
Energy LLC, Fulcrum Retail Holdings LLC, Tara Energy, LLC, Just
Energy Marketing Corp., Just Energy Connecticut Corp., Just Energy
Limited, Just Solar Holdings Corp., and Just Energy (Finance)
Hungary ZRT filed for protection under the Companies' Creditors
Arrangement Act ("CCAA") before the Ontario Superior Court of
Justice (Commercial List).
Just Energy Group Inc. and its affiliates filed petitions under
Chapter 15 of the Bankruptcy Code in the United States (Bankr. S.D.
Tex. Lead Case No. 21-30823) on March 9, 2021, to seek recognition
of the Canadian proceedings.
FTI Consulting Canada Inc. has consented to act as monitor in the
CCAA proceeding. BMO Capital Markets has been engaged as financial
advisor, Osler, Hoskin & Harcourt LLP and Fasken Martineau DuMoulin
LLP are legal advisors in Canada, Kirkland & Ellis LLP and Jackson
Walker LLP are legal advisors in the United States.
KNOTEL CANADA: Case Summary & 30 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Knotel Canada, Inc.
5-9 Union Square West
New York, NY 10003
Business Description: Knotel Canada, Inc.., a wholly owned by
Knotel, Inc., is primarily engaged in
renting and leasing real estate
properties.
Chapter 11 Petition Date: March 8, 2021
Court: United States Bankruptcy Court
District of Delaware
Case No.: 21-10540
Judge: Hon. Mary F. Walrath
Debtor's
General
Bankruptcy
Counsel: MILBANK LLP
2029 Century Park East,
33rd Floor
Los Angeles, CA 90067
Debtor's
General
Bankruptcy
Counsel: Robert J. Dehney, Esq.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 N. Market Street
Wilmington, DE 19801-1347
Tel: (302) 658-9200
Email: rdehney@morrisnichols.com
Debtor's
Investment
Banker: MOELIS & COMPANY
399 Park Avenue, 5th Floor
New York, NY 10022
Debtor's
Claims,
Noticing &
Administrative
Agent: OMNI AGENT SOLUTIONS
5955 De Soto Avenue, Suite 100,
Woodland Hills, CA 91367
Debtor's
Special
Corporate
Counsel: FENWICK & WEST LLP
801 California Street,
Mountain View, CA 94041
Debtor's
Canadian
Counsel: CASSELS BROCK & BLACKWELL LLP
2100 Scotia Plaza
40 King Street West
Toronto, ON, Canada
Debtor's
Tax Consultant: ERNST & YOUNG LLP
5 Times Square
New York, New York 10036
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by John M. Jureller, chief financial
officer.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/2PQBLDA/Knotel_Canada_Inc__debke-21-10540__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. One Workpl L Ferrari LLC Supply Chain- $4,985,299
dba Two Furniture
2500 De La Cruz Blvd
Santa Clara, CA 95050
Email: payments@oneworkplace.com
2. Hudson 901 Market LLC Rent $4,042,220
303 2nd St
San Francisco, CA 94107
Attn: Jason Storm
Tel: (310) 445-5700
Email: jstorm@hudsonppi.com
3. Eden Technologies Inc Facilities $3,108,234
54 Gilbert St
San Francisco, CA 94103
Tel: 1-800-754-3166
Email: billing@eden.io
4. 260-261 Madison Ave LLC Rent $2,692,399
261 Madison Ave, Fl 27
New York, NY 10016
5. 505 Howard SF LLC Rent $2,309,973
21575 Ridgetop Cir
Sterling, VA 20166
6. SourceMedia Rent $2,119,571
1 State St
New York, NY 10004
Attn: Anthony DeNoris
Email: Anthony.DeNoris@sourcemedia.com
7. HRC Corp Rent $2,117,099
156 5th Ave, Ste 300
New York, NY 10010
Attn: Robert E. Haddad
Tel: (212) 807-7664 ext. 2
Email: ehaddad@hrccorp.com
8. 530 Broadway Owner LLC Rent $1,560,785
1040 Ave of Americas, 3rd Fl
New York, NY 10018
Attn: Joanne Agoglia
Tel: (212) 519-2036
Email: jagoglia@hspny.com
9. RXR 61 Broadway Owner LLC Rent $1,487,384
61 Broadway
New York, NY 10006
Attn: Jason Barnett, General Counsel
Tel: (212) 797-1330
Email: leasing@rxrrealty.com
10. Hudson 625 Second Rent $1,333,644
LLC 625 2nd
Rincon Ctr, Ste 220
San Francisco, CA 94105
Attn: Sarah Epstein
Tel: (310) 445-5700
Email: sepstein@hudsonppi.com
11. 30 Broad Street Venture, LLC Rent $1,328,846
30 Broad St
New York, NY 10004
12. Office Resources, Inc Supply Chain- $1,245,306
263 Summer St Furniture
Boston, MA 02210
Attn: Leanne Niland
Tel: (617) 896-3263
Email: accountsreceivablegroup@ori.com
13. RELX, Inc Rent $1,115,770
9443 Springboro Pike
Miamisburg, OH 45342
Attn: Daniel J. Weissman
Tel: (202) 857-8202
Email: dan.weissman@lexisnexis.com
14. DP 1550 Bryant LLC Rent $1,084,394
1550 Bryant St, 4th Fl
San Francisco, CA 94103
Attn: Kimberly Tran
Email: bli@downtown-properties.com
15. JLJ LLC Rent $1,057,433
c/o Olmstead Properties Inc
27 W 23rd St
New York, NY 10010
Tel: (212) 564-2240 or
(212) 564-6662
Email: mcarter@olmsteadinc.com
16. 29 W 35th Street LLC Rent $1,041,841
29 W 35th St, Ste 900
New York, NY 10001
17. Alliance Brokerage Corp Legal $991,338
990 Westbury Rd
Westbury, NY 11590
Attn: Michael Vescovo
Tel: (516) 465-1100
Email: mvescovo@abc990.com
18. ASB Allegiance Real Estate Fund Rent $971,442
dba 400 Madison Holdings LLC
c/o Ds400Owner LLC
400 Madison Ave, Ste 14B
New York, NY 10017
Attn: Adeline Juliet Martin,
MYoungkuk Kim
Tel: (301) 523-5721 OR
Email: Julietmartin111@gmail.com
19. Kidder Matthews of California, Inc. Rent $927,672
101 Mission Street, Suite 2100
San Francisco CA 94105
Email: bradv@kiddermathews.com
20. 31 West 27th Street $901,476
Property Investors IV, LLC
31 West 27th Street
New York NY 10001
21. 5 Hanover Square (NY) Owner, LLC Rent $896,606
5 Hanover Square
New York NY 10004
22. 475 Building Company LLC Rent $849,723
750 Lexington Avenue
New York NY 10022
23. 303 2nd Street Sf LLC / Syapse Inc Rent $844,119
303 Second Street, Suite 500 North
San Francisco CA 94107
24. 11 E 44th Street LLC Legal $816,073
346 Madison Ave
New York NY 10017
25. 598 Broadway Realty Assoc, Inc Rent $815,749
P.O. Box 514
Prince St Station
New York, NY 10012
26. Godaddy MSH Inc. Rent $769,884
14455 N. Hayden Rd., Suite 219
Scottsdale, AZ 85260
27. 250 Hudson Street LLC Rent $755,139
28. Legacy 455 Market Street L.P. $747,678
1865 Harman Street, 1R
Ridgewood NY 11385
Attn: Tania A. Monar
29. Essence Global LLC $746,983
54 West 21st Street
New York NY 10010
Email: eyleen.donneys@essenceglobal.com
30. 6 West 48th LLC $730,712
242 West 38th Street
12th Floor
New York NY 10018
Email: ecerritos@hspny.com
KNOTEL INC: Polsinelli, Arnold & Porter Advise Essential Capital
----------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Polsinelli PC and Arnold & Porter Kaye Scholer LLP
submitted a verified statement to disclose that that are
representing Essential Capital Shared Spaces LLC, Essential Capital
Shared Spaces II LLC, Essential Capital Shared Spaces III LLC,
Essential Capital Shared Spaces IV LLC, Essential Media Group LLC,
Finvasco Capital Investments Ltd, and A.O. Consulting Ltd in the
Chapter 11 cases of Knotel, Inc., et al.
The Firms represent only the Interested Parties in these chapter 11
cases and accordingly the Interested Parties are the only persons
or entities with respect to which the Firms are required to file a
Statement pursuant to Federal Rule of Bankruptcy Procedure 2019.
As of March 8, 2021, each Interested Party's and their disclosable
economic interests are:
Essential Capital Shared Spaces LLC
343 E74th Street PH4D
New York, NY 10021
* Common: 602,670
* Series A Preferred: 2,850,040
* Series B Preferred: 218,200
Essential Capital Shared Spaces II LLC
343 E74th Street PH4D
New York, NY 10021
* Common: 564,490
* Series B Preferred: 2,820,750
Essential Capital Shared Spaces III LLC
343 E74th Street PH4D
New York, NY 10021
* Common: 715,950
* Series B Preferred: 954,580
* Note: $150,000.00
Essential Capital Shared Spaces IV LLC
343 E74th Street PH4D
New York, NY 10021
* Series B Preferred: 944,950
* Series C Preferred: 973,042
* Notes: $1,500,000.00
Essential Media Group LLC
343 E74th Street PH4D
New York, NY 10021
* Common: 49,995,000
Finvasco Capital Investments Ltd.
Botsari, 4 Aglantzia
2122, Nicosia, Cyprus
* Common: 1,929,810
* Series A Preferred: 379,590
A.O. Consulting Ltd
Budečská 18 12000, Prague 2
Czech Republic
* Note: $75,000.00
Counsel to Essential Capital Shared Spaces LLC, et al. can be
reached at:
POLSINELLI PC
Shanti M. Katona, Esq.
222 Delaware Ave, Suite 1101
Wilmington, DE 19801
Telephone: (302) 252-0920
Facsimile: (302) 252-0921
E-mail: skatona@polsinelli.com
- and -
ARNOLD & PORTER KAYE SCHOLER LLP
Michael L. Bernstein, Esq.
601 Massachusetts Avenue
NW Washington
District of Columbia 20001
Telephone: (202) 942-5000
Facsimile: (202) 942-5999
E-mail: michael.bernstein@arnoldporter.com
Justin Imperato, Esq.
250 West 55th Street
New York, NY 10019
Telephone: (212) 836-8000
Facsimile: (212) 836-8689
E-mail: justin.imperato@arnoldporter.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3v9HOrq
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.
Judge Mary F. Walrath oversees the cases.
The Debtors tapped Milbank LLP as their bankruptcy counsel, Morris
Nichols Arsht & Tunnell LLP as Delaware bankruptcy co-counsel,
Fenwick & West LLP as corporate counsel, and Moelis & Company LLC
as investment banker and financial advisor. The Debtors also hired
Ernst & Young LLP to provide tax services. Omni Agent Solutions is
the claims agent and administrative agent.
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases.
The committee tapped Potter Anderson & Corroon, LLP and Lowenstein
Sandler, LLP as its legal counsel and FTI Consulting, Inc. as its
financial advisor.
LAKE CHARLES: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Lake Charles Center, L.L.C.
10606 Coursey Blvd.
Suite B
Baton Rouge, LA 70816
Business Description: Lake Charles Center, L.L.C. is a Single
Asset Real Estate debtor (as defined in 11
U.S.C. Section 101(51B)).
Chapter 11 Petition Date: March 9, 2021
Court: United States Bankruptcy Court
Western District of Louisiana
Case No.: 21-20057
Judge: Hon. John W. Kolwe
Debtor's Counsel: David J. Andress, Esq.
ANDRESS LAW FIRM, LLC
120 Rue Beauregard Suite 205
Lafayette, LA 70508
Tel: (337) 347-9919
E-mail: david@andresslawfirm.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Michael D. Kimble, member/manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/G37AO2Y/Lake_Charles_Center_LLC__lawbke-21-20057__0001.0.pdf?mcid=tGE4TAMA
LEARNING CARE 2: Moody's Alters Outlook on Caa1 CFR to Stable
-------------------------------------------------------------
Moody's Investors Service affirmed Learning Care Group (US) No. 2
Inc.'s Caa1 Corporate Family Rating and Caa1-PD Probability of
Default Rating. Concurrently, Moody's affirmed the B3 rating on the
company's the first lien credit facilities (revolver and term
loan), and the Caa3 rating on the second lien term loan. The
outlook is revised to stable from negative.
The revision of outlook to stable from negative reflects Moody's
expectation that operating performance including enrollment and
center occupancy rates will continue to recover in 2021 as a higher
share of the public receives vaccinations and the coronavirus
pandemic subsides. Learning Care's lease adjusted debt-to-EBITDA
leverage stood at about 8.6x for the LTM period ended December 30,
2020 and Moody's expects it will decline to approaching 6.0x over
the next 12 to 18 months. The revision also reflects Moody's
expectation of adequate liquidity over the next year with an
approximately $200 million cash balance at calendar year end 2020
and access to an undrawn $75 million revolver due 2023 ($63 million
available net of letters of credit). However, Moody's expects the
company to pursue accretive acquisitions at attractive multiples,
which could amount to up to half of its cash over the next 6-12
months. Learning Care is taking advantage of the current market
environment which also shows its confidence in the long term
outlook of the childcare and early childhood education sector.
Moody's baseline assumption also favorably expects continued
funding from the government under the additional Cares Act over the
rest of FY21 at level similar to first half of the fiscal year and
expects the company will be able to return to modestly positive
free cash flow in FY22 (July 2021 to June 2022).
Moody's took the following rating actions:
Issuer: Learning Care Group (US) No. 2 Inc.
Corporate Family Rating, affirmed Caa1
Probability of Default Rating, affirmed Caa1-PD
Senior Secured First Lien Bank Credit Facility (Revolver and Term
Loan), affirmed B3 (LGD3)
Senior Secured Second Lien Term Loan, affirmed Caa3 (LGD5)
Outlook Actions:
Issuer: Learning Care Group (US) No. 2 Inc.
Outlook, revised to Stable from Negative
RATINGS RATIONALE
Learning Care's Caa1 CFR reflects high leverage with Moody's lease
adjusted debt-to-EBITDA of about 8.6x for the LTM period ended
December 31, 2020. Moody's expects leverage will decline to
approaching 6.0x over the next 12 to 18 due to earnings recovery as
the childcare industry continues to gradually restore enrollment
and utilization as it recovers from the coronavirus pandemic. The
rating is also constrained by the cyclical, highly fragmented and
competitive nature of the child-care and early childhood education
industry as well as the susceptibility to reductions in federal and
state funding support. The rating also considers event and
financial policy risk due to private equity ownership. However, the
rating is supported by the company's large scale within the
childcare and early childhood education industry, broad geographic
diversity within the U.S., and well-recognized brands. The rating
also incorporates the favorable long term demographic social factor
related to increasing percentage of dual income families as well as
increased focus on early childhood education.
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Moody's analysis has considered the effect on the performance of
Learning Care from the current weak US economic activity and a
gradual recovery for the coming months. Although an economic
recovery is underway, it is tenuous and its continuation will be
closely tied to containment of the virus. As a result, the degree
of uncertainty around our forecasts is unusually high. Moody's
regards the coronavirus outbreak as a social risk under its ESG
framework, given the substantial implications for public health and
safety. Specifically, the weaknesses in Learning Care's credit
profile, including its exposure to discretionary consumer spending
have left it vulnerable to shifts in market sentiment in these
unprecedented operating conditions and the company remains
vulnerable to the ongoing coronavirus pandemic and social
distancing measures. Moody's expects the coronavirus concern for
the childcare industry will start to subside in the second half of
2021 once a growing share of the public has been vaccinated.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's view that Learning Care's
leverage will decline to approaching 6.0x debt-to-EBITDA over the
next 12 to 18 months because of an earnings recovery and acquired
earnings. The stable outlook also reflects Moody's expectation for
adequate liquidity over the next year including access to an
undrawn $75 million of revolver and expectation for modestly
positive free cash flow in FY22.
The ratings could be upgraded if the company resumes revenue and
earnings growth with Moody's lease adjusted debt-to-EBITDA leverage
maintained below 6.0x with good liquidity including positive free
cash flow generation.
The ratings could be downgraded if there is further deterioration
of enrollment, pricing, or operating performance, leverage
increases due to earnings declines, debt-funded acquisitions or
shareholder distributions, or if liquidity weakens.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Learning Care Group (US) No. 2 Inc. is a provider of early
childhood education and childcare services. The company operates
about 943 schools (12 are located internationally) across the
United States. Learning Care has nine brands, including Childtime,
Tutor Time, The Children's Courtyard, La Petite Academy, Montessori
Unlimited, Everbrook Academy, Creative Kids Learning Centers,
Pathways Learning Academy and U-GRO (acquisition closed in FY3Q
2021). Learning Care has been owned by the private equity firm
American Securities LLC since 2014. LTM revenue as of December 31,
2020 was approximately $794 million.
LEGENDS HOSPITALITY: Moody's Completes Review, Retains B3 CFR
-------------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Legends Hospitality Holding Company, LLC and other
ratings that are associated with the same analytical unit. The
review was conducted through a portfolio review discussion held on
February 24, 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
Legends' B3 Corporate Family Rating is constrained by high customer
concentration, the uncertain timing of a return to widespread
in-person events, a significant monthly cash burn while operations
are disrupted by the coronavirus pandemic and moderate
profitability in its core food and hospitality services. The credit
rating is supported by long term contracts with its largest
customers, a highly variable cost structure and limited maintenance
capital expenditure requirements.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
LONGHORN JUNCTION: Plan to Pay Romspen $19.5M by Oct. 31
--------------------------------------------------------
Longhorn Junction Land and Cattle Company, LLC and SC Williams, LLC
submitted the First Amended Joint Disclosure Statement on March 2,
2021.
Under the Debtor's Plan, Romspen will be paid $19,599,456 from the
pending sales and, after the closing of the pending sales, the
Debtors will still own a combined 92.95 acres with an appraised
value of over $20,000,000.
The Debtors have received additional offers of over $2,500,000 and
continue to explore deals with potential purchasers and with
sources of refinancing to pay creditors in full under their Plan.
The Debtors believe that, once the pending sales close and
development on the tracts begin, the marketability and value of
Longhorn Junction will increase and the momentum for sales and
development will increase.
Under the Plan, Longhorn Junction will continue to pursue its sales
strategy to sell its tracts of property, led by Hilco. Due to the
efforts of Hilco, as of the filing of this Disclosure Statement,
the Debtors have signed two contracts in addition to the sale
pending court approval. Those contracts to sell Tract #5 to
Provident Realty Advisors for over $16 million and to sell Tract #6
to Molto Development, LLC for approximately $10.5 million will make
significant payments towards the outstanding secured debt owed to
Romspen. The Debtors' current plan proposes to pay Romspen over
another $19 million by October 31, 2021, for a total of $22,799,457
and pay off the remaining debt by February 28, 2022. In
comparison, the Confirmed Plan would have paid Romspen at least
$19,200,000 by November 30, 2021 and the remaining balance by
February 28, 2022.
The prior iteration of the Plan proposes to pay Romspen over $20
million by the end of the calendar year and pay off the remaining
debt by the end of the 2nd quarter in 2022.
Under the Plan, the Debtors are paying Romspen's Allowed Claim
faster than under the Confirmed Plan in the prior Chapter 11. By
November 30, 2021, the Debtors will have paid Romspen a minimum of
$22,799,4579 (or $23,788,080 if the Tract 3 sale is closed)
compared to payments of $19,200,000 by November 31, 2021 under the
Confirmed Plan in the prior Chapter 11. The balance of Romspen's
debt will have the same maturity date, February 28, 2022.
The Debtors must have sufficient property under one or more
contracts by the Effective Date of the Plan to make a payment of
$19.5 million to Romspen at closing. For each Initial Contract:
* by May 1, 2021, Buyer must provide the initial site plan to
Seller;
* by July 1, 2021, Buyer must provide the final site plan to
Seller;
* by August 1, 2021, Buyer must have survey completed, if
required under the contract; and
* the due diligence period must not extend beyond September
15, 2021.
The Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and the equity holder:
* Class 6 Claims consists of Allowed Unsecured Claims against
Longhorn Junction. The deadline for filing Proofs of Claim has not
yet occurred but, the best of Debtor's knowledge, the amount of
unsecured claims against Longhorn Junction exceeds $46,000. Each
holder of an Allowed Claim in Class 6 Claims will be paid in full
with 5% interest accruing from sales of the Longhorn Junction
Property after Romspen has been paid in full and from sales of Sun
City Property after the holder of Allowed Claims against SC
Williams have been paid but, in no event, in more than 24 months
from the Effective Date of the Plan.
* Class 7 Claims consists of Allowed Unsecured Claims against
SC Williams. The deadline for filing Proofs of Claim has not yet
occurred but, the best of Debtor's knowledge, the following parties
have unsecured claims against SC Williams in excess of $336,000.
Each of holder of an Allowed Claim in Class 7 Claims will be paid
in full with 5% interest accruing from sales of the Sun City
Property after Romspen has been paid in full and from sales of
Longhorn Junction Property after the holder of Allowed Claims
against Longhorn Junction have been paid but, in no event, in more
than 24 months from the Effective Date of the Plan.
* The equity interest holder in both Debtors, Gregory Hall,
will retain his Interest.
The Debtors' ability to pay Romspen depends on the ability of the
Debtors to sell Tracts at prices sufficient to make the payments to
Romspen. Based upon the current contracts, the fair market
valuations of the property, and Debtor's substantial equity in the
Property, Debtors are confident that the marketing and sales
process will continue to attract bids sufficient for Debtors to
timely make the payments to Romspen and their remaining creditors.
A full-text copy of the First Amended Joint Disclosure Statement
dated March 2, 2021, is available at https://bit.ly/3c8Zf2I from
PacerMonitor.com at no charge.
Attorneys for the Debtors:
Todd Headden
Ron Satija
HAYWARD PLLC
901 Mopac Expressway South
Building 1, Suite 300
Austin, Texas 78746
Tel/Fax: 737.881.7100
E-mail: theadden@haywardfirm.com
About Longhorn Junction Land
Longhorn Junction Land and Cattle Company, LLC and SC Williams, LLC
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Tex. Lead Case No. 21-10003) on Jan. 4, 2021.
At the time of the filing, Longhorn Junction disclosed assets of
between $10 million and $50 million and liabilities of the same
range. SC Williams had estimated assets of between $1 million and
$10 million and liabilities of between $10 million and $50
million.
Judge Tony M. Davis oversees the cases.
The Debtors tapped Hayward PLLC and Hilco Real Estate Auctions, LLC
as their legal counsel and real estate advisor, respectively.
LPL HOLDINGS: Moody's Hikes CFR to Ba1 on Resilient Profitability
-----------------------------------------------------------------
Moody's Investors Service upgraded LPL Holdings, Inc.'s Corporate
Family Rating to Ba1 from Ba2. Moody's also upgraded LPL's senior
unsecured notes to Ba2 from B1 and upgraded the firm's senior
secured term loan and revolving credit facility to Baa3 from Ba1.
The outlook remains stable.
Moody's has taken the following rating actions:
Issuer: LPL Holdings, Inc.
Corporate Family Rating, Upgraded to Ba1 from Ba2
Backed Senior Secured Bank Credit Facility, Upgraded to Baa3 from
Ba1
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2 from B1
Outlook Actions:
Issuer: LPL Holdings, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Moody's said the CFR upgrade reflects LPL's resilient profitability
in facing a challenging operating environment, flexible expense
management, increasing scale and its favorable shift in revenue mix
shift towards recurring advisory asset fees. Moody's said that LPL
has successfully navigated the challenging macroeconomic and
operating environment of 2020 while sustaining a strong earnings
profile and creditor-friendly financial policies.
In the first quarter of 2020, the Federal Reserve Board's (Fed) cut
to the fed funds rate (to a range of 0%-0.25%) put pressure on
LPL's cash sweep program asset-based revenue, while the broad
market downturn resulted in lower advisory fees and asset-linked
commission revenue. Since then, the rebound in equity markets in
the latter half of 2020, coupled with rising client engagement, has
helped LPL - and the broader retail brokerage sector -- enter 2021
on a much stronger footing. Moody's added that in addition to
exogenous factors (such as the positive impact from rising
markets), the ratings upgrade reflects LPL's maintenance of a
prudent financial policy, coupled with flexible expense management
capabilities and positive operating leverage.
Moody's said LPL's credit profile has benefited in recent years
from a number of credit positive strategic and financial policies
that LPL's management has adopted. Prime of which was LPL's 2018
commitment to lowering its net debt leverage target to 2.0x - 2.75x
from 3.25x - 3.5x. LPL's transparent and maintained focus on
managing its capital structure and leverage appetite has been
credit positive.
Moody's said the lower short-term interest rate environment will
continue to be a drag on LPL's profitability. That is because in
the third quarter of 2018, LPL's management started moving client
cash balances into fixed-rate contracts, generally with an average
duration of around four years. Moody's said that LPL is unique
among its rated broker-dealer peers in having adopted this
structure. Should interest rates remain low for an extended period
of time, such as beyond the average four year duration of these
contracts, this source of revenue will deteriorate. However,
Moody's expects that over the course of this timeline, growth in
LPL's revenue from advisory fees will help offsetting the
cash-sweep revenue erosion. Moody's said LPL's advisory assets have
grown to 51% of its total client assets in the fourth quarter 2020
(compared to 45% two years ago), and as such, a greater portion of
LPL's revenue is driven by client asset levels in the form of
advisory fees, as opposed to client-driven commission income.
Although advisory fees are recurring, they are more highly linked
to broad equity market levels, and the fees could decline should
there be a market downturn. However, Moody's expects LPL's large
scale, positive operating leverage and strong balance sheet to help
in shielding the effect of a downturn on its credit profile.
In December 2020, LPL agreed to acquire Waddell & Reed's wealth
management business in a $300 million transaction and serving $70
billion in client assets, funded through a combination of cash and
new debt. LPL expects to complete the acquisition in the middle of
2021. Moody's anticipates LPL's Moody's-adjusted debt leverage to
increase to around 3.3x following the consummation of the
transaction, up from 2.8x as of the end of 2020. Moody's said that
should additional M&A opportunities arise, LPL may operate at above
its leverage target for some time, but its cash generating
capabilities would permit delevering within a reasonable timeframe.
Moody's expects LPL's inorganic growth to be structured around
recruiting, as opposed to large and complex transactions, while
maintaining an overall creditor-friendly funding strategy.
The rating outlook is stable, reflecting Moody's expectation that
LPL's profitability will continue benefiting from a growing mix of
advisory revenue, offsetting the revenue drag from the lower
interest rate environment.
Moody's said the upgrade to Ba2 from B1 of LPL's senior unsecured
notes, and the upgrade to Baa3 from Ba1 of LPL's senior secured
term loan and revolving credit facility, reflects the improvement
in LPL's creditworthiness and the application of Moody's Loss Given
Default (LGD) for Speculative-Grade Companies methodology. The Baa3
rating assigned to LPL's senior secured bank credit facility is
based on the application of Moody's LGD methodology, and is
reflective of its priority ranking in LPL's capital structure. The
Ba2 rating assigned to LPL's senior unsecured notes reflects the
notes' weaker ranking in LPL's capital structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
LPL's ratings could be upgraded should its competitive position
within the wealth management space further improve, resulting in an
increase in pretax earnings above $800 million and increased profit
margins; continued demonstration of prudent financial policies and
strategic approach to inorganic growth, resulting in maintaining
Moody's-adjusted debt leverage below 2.5x.
LPL's ratings could be downgraded should there be a shift in its
financial policy that significantly increases debt to fund
shareholder-friendly capital plans; M&A activity outside of LPL's
main business focus that would result in a sustained level of
Moody's-adjusted debt leverage above 3.5x; or should there be a
significant failure in LPL's regulatory compliance or technology
infrastructure.
The principal methodology used in these ratings was Securities
Industry Service Providers Methodology published in November 2019.
MAEFIELD DEVELOPMENT: Time Square Edition Nears Foreclosure
-----------------------------------------------------------
Patrick Clark and Allison McNeely of Bloomberg News report that
Times Square hotel and retail property, Time Square Edition, once
valued at more than $2 billion, is a step closer to foreclosure
after a court victory for a group of lenders led by Natixis SA.
The court granted the lenders the right to foreclose on the
property, which features the 42-story Times Square Edition hotel
designed by Marriott International Inc. and hospitality legend Ian
Schrager. The judge also scheduled a hearing to decide how to
proceed with a sale.
It's the latest setback for owner Maefield Development, which has
been facing foreclosure since 2019, after construction delays.
About Maefield Development Corp.
Maefield Development Corporation, a real estate company, acquires,
develops, and sells undervalued and underutilized properties in the
United States. Its projects include retail and office spaces, and
single-family and multi-family residences. Maefield Development
Corporation was founded in 1991 and is based in Indianapolis,
Indiana with an additional office in Miami, Florida.
MALLINCKRODT PLC: Taps Ernst & Young as Tax Consultant
------------------------------------------------------
Mallinckrodt plc and its affiliates received approval from the U.S.
Bankruptcy Court for the District of Delaware to hire Ernst &
Young, LLP as their tax consultant.
Ernst & Young's services include business consulting and tax
services related to the Debtors' Chapter 11 cases.
The firm will be paid as follows:
Internal Audit
Partner, Principal, or
Managing Director $422 per hour
US Senior Manager $315 per hour
US Manager $203 per hour
US Senior $135 per hour
US Staff $118 per hour
Internal Controls Testing
US Managing Director $388 per hour
US Senior Manager $305 per hour
US Manager $240 per hour
US Senior $213 per hour
US Staff $120 per hour
US Intern $120 per hour
General Tax Consulting
Partner or Principal $459 per hour
Managing Director $400 per hour
Senior Manager $400 per hour
Manager $300 per hour
Senior $205 per hour
Staff $151 per hour
Ernst & Young LLP is a "disinterested person" as defined within
Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Michael G. Weiss
Ernst & Young LLP
5 Times Square
New York, NY 10036-6530
Direct: +1 212 773 3000
Fax: +1 212 773 6350
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.
MCKEESPORT AREA SD: Moody's Assigns Ba1 Issuer Rating
-----------------------------------------------------
Moody's Investors Service has assigned a Ba1 issuer rating to
McKeesport Area School District, PA. The issuer rating reflects the
district's ability to repay debt and debt-like obligations without
consideration of any pledge, security, or structural features.
Concurrently, Moody's has upgraded the district's general
obligation unlimited tax (GOULT), and general obligation limited
tax (GOLT) ratings to Ba1 from Ba2, affecting $8.4 million and
$51.4 million in debt outstanding, respectively. The outlook is
stable. This action concludes a review for possible upgrade
initiated on January 26, 2021 in conjunction with release of the US
K-12 Public School Districts methodology.
RATINGS RATIONALE
The district's Ba1 issuer rating reflects its satisfactory reserves
that are poised for stability, weak wealth and income, declining
enrollment, and moderate leverage. The rating also incorporates the
district's moderate fixed costs with debt service requirements that
will grow in the near term.
The ratings assigned to the district's general obligation bonds
were upgraded one notch because they are equivalent to the Ba1
issuer rating. The absence of distinction between the issuer,
GOULT, and GOLT ratings reflects Pennsylvania school districts'
ability to apply for exceptions to the cap on property tax
increases in order to cover debt service, the Commonwealth's
history of granting such exceptions, and the district's full faith
and credit pledge supporting all general obligation debt.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. The pandemic has not had a material impact on the
district given its reliance on state aid and local property tax
revenue, which are stable year over year. Governance is material to
the credit rating, as the district has historically had difficulty
budgeting for cyber/charter school tuition and special education
costs.
RATING OUTLOOK
The stable outlook reflects Moody's expectation that the district's
financial position will remain satisfactory in the near term,
supported by federal funding which will augment the district's
financial resources, along with Moody's expectation that its debt
burden will not grow following the recent restructuring which
moderated annual debt service over the next several years.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
- Materially improved wealth and income levels
- Material reduction in leverage and fixed costs
- Significantly improved reserves and liquidity
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
- Materially weakened reserves and liquidity
- Significant additional debt that leads to an outsize leverage
metric
LEGAL SECURITY
The district's Series D of 1997, Series of 2001, and Series A of
2019 bonds are secured by the district's general obligation
unlimited tax (GOULT) pledge, as they were issued prior to (or to
refund debt originally incurred prior to) the 2006 implementation
of Pennsylvania's Act 1 "Taxpayer Relief Act."
The district's Series of 2012, Series of 2013, and Series B of 2019
bonds are secured by the district's general obligation limited tax
(GOLT) pledge, as they are subject to the limits of the Act 1
index.
PROFILE
McKeesport Area School District is in Allegheny County (Aa3
stable), 15 miles southeast of Pittsburgh (A1 stable) and serves
approximately 3,046 students in McKeesport City, South Versailles
Township, and the Boroughs of Dravosburg, Versailles, and White Oak
through two elementary, one middle, and one high school.
METHODOLOGY
The principal methodology used in these ratings was US K-12 Public
School Districts Methodology published in January 2021.
MEDIA LODGE: Seeks to Hire 'Ordinary Course' Professionals
----------------------------------------------------------
Media Lodge, Inc. seeks approval from the U.S. Bankruptcy Court for
the District of Delaware to hire professionals utilized in the
ordinary course of its business.
The motion, if granted, would allow the Debtor to hire "ordinary
course professionals" without filing separate employment
applications.
The OCPs are:
Warren Averett CPAs and Advisors
6 Concourse Parkway, Suite 600
Atlanta, GA 30328
Accountant
Culhane Meadows PLLC
PO Box 49716
Atlanta GA 30359
General/Corporate
R.M. Warner PLC
8283 N Hayden Rd, Suite 229
Scottsdale AZ 85258
General/Corporate
Gordon & Reese LLP
1111 Broadway Suite 1700
Oakland CA 94607
General/Corporate
Nelson Mullins Riley & Scarborough LLP
PO Drawer 11009
Columbia SC 29211
General/Corporate
Each OCP will be paid 100 percent of its fees and expenses without
formal application to the court. The proposed fee cap for each OCP
is $50,000 per month.
About Media Lodge
Media Lodge, Inc. -- http://www.medialodge.com-- is a content
creation studio, digital distribution platform, and sales
representation company dedicated to outdoor enthusiasts. The Media
Lodge content studio creates exclusive online articles, product
reviews and original video series such as The Good Fight, Finding
Fearless, The American New Shooter Academy, American Nomads, New
Gear and Guns, In The Hunt, Range Drills, At the Ranch --
Whitetail, At the Range, 4Outdoors featuring Dog2DogTags, The
Shooting Sports Industry Influencer Series and more.
Media Lodge sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Case No. 20-12969) on Nov. 10, 2020. The
petition was signed by Jeff Siegel, the company's chief executive
officer and president.
At the time of the filing, the Debtor had estimated assets of
between $100,000 and $500,000 and liabilities of between $10
million and $50 million.
Judge John T. Dorsey oversees the case. Gellert Scali Busenkell &
Brown, LLC is the Debtor's legal counsel.
MEDLEY LLC: Files for Chapter 11 With Debt-For-Equity Plan
----------------------------------------------------------
On March 7, 2021, Medley LLC commenced a voluntary case under
chapter 11 of title 11 of the United States Code in the United
States Bankruptcy Court for the District of Delaware.
The Medley investment platform is comprised of a number of
investment advisers and other related entities. Medley LLC is the
only entity on the platform that has filed for Chapter 11
protection. Medley Management Inc. (NYSE: MDLY) ("MDLY") and the
other affiliated adviser entities on the Medley platform are not
filing any bankruptcy petitions.
Medley LLC will continue to operate its business as
"debtor-in-possession" under the jurisdiction of the Bankruptcy
Court and in accordance with the applicable provisions of the
Bankruptcy Code and the orders of the Bankruptcy Court. To ensure
its ability to continue operating in the ordinary course of
business, Medley LLC has filed with the Bankruptcy Court motions
seeking a variety of "first day" relief, including authority to
continue utilizing and maintaining its existing cash management
system.
In connection with the Chapter 11 Case, Medley LLC filed with the
Bankruptcy Court a proposed Plan of Reorganization and a proposed
Disclosure Statement related thereto. Medley LLC intends to seek
the Bankruptcy Court's approval of the Disclosure Statement and
confirmation of the Plan.
The stakeholders of Medley LLC would receive the proposed treatment
under the Plan:
* Secured Claims. Each holder of an Allowed Secured Claim shall
receive, at the option of the Debtor and in its sole discretion:
(i) payment in full in Cash of its Allowed Secured Claim; (ii) the
collateral securing its Allowed Secured Claim; (iii) Reinstatement
of its Allowed Secured Claim; or (iv) such other treatment
rendering its Allowed Secured Claim Unimpaired in accordance with
Section 1124 of the Bankruptcy Code.
* Other Priority Claims. Each holder of an Allowed Other
Priority Claim shall receive treatment in a manner consistent with
Section 1129(a)(9) of the Bankruptcy Code.
* Notes Claims. On the Effective Date, each holder of an Allowed
Notes Claim shall receive: (i) if such holder votes to accept the
Plan, 0.600 shares of newly-issued Class A Common Stock of MDLY for
each $25 principal amount of 7.25% senior notes due 2024 ("2024
Notes") and/or 6.875% senior notes due 2026 ("2026 Notes") held by
such holder; (ii) if such holder does not take any action and does
not vote on the Plan, 0.450 shares of newly-issued Class A Common
Stock of MDLY for each $25 principal amount of 2024 Notes and/or
2026 Notes held by such holder; or (iii) if such holder elects to
Opt-Out of the Third Party Release contained in Article VIII of the
Plan and/or votes to reject the Plan, the lesser of (x) 0.134
shares of newly-issued Class A Common Stock of MDLY for each $25
principal amount of 2024 Notes and/or 2026 Notes held by such
holder or (y) a pro rata share of the Rejecting Noteholder Pool.
* Strategic Claim. The holder of the Allowed Strategic Claim
shall receive: (i) 218,182 shares of newly-issued Class A Common
Stock of MDLY; (ii) $350,000 in Cash on the Effective Date or as
soon as practicable thereafter; and (iii) a secured promissory
note, the form of which will be negotiated between the parties
prior to the Confirmation Hearing, which provides for 10
consecutive quarterly payments of $225,000 in Cash, commencing on
the last Business Day of the first full calendar quarter following
the Effective Date.
* General Unsecured Claims. Each holder of an Allowed General
Unsecured Claim shall receive, at the option of the Debtor: (i) the
lesser of the amount of its Allowed General Unsecured Claim in
Cash, or its pro rata share of the General Unsecured Claims Pool;
or (ii) Reinstatement.
* Intercompany Claims. Each Allowed Intercompany Claim shall
be, at the option of the Debtor, either: (i) Reinstated; or (ii)
canceled, released, and extinguished and without any distribution
at the Debtor's election and in its sole discretion.
* Interests. Each holder of an Interest will retain such
Interest.
Debt Instruments
The commencement of the Chapter 11 Case constitutes an event of
default that accelerates the obligations under the following debt
instruments:
-- 7.25% senior notes due 2024 (of which approximately $69
million in aggregate principal amount are outstanding), issued
pursuant to that certain Indenture, dated as of August 9, 2016, as
supplemented by that certain Third Supplemental Indenture, dated as
of January 18, 2017, and that certain Fourth Supplemental
Indenture, dated as of February 22, 2017, each between Medley LLC
and U.S. Bank National Association, as Trustee, and each as
amended, restated, supplemented, or otherwise modified from time to
time; and
-- 6.875% senior notes due 2026 (of which approximately $54
million in aggregate principal amount are outstanding), issued
pursuant to that certain Indenture, dated as of August 9, 2016, as
supplemented by that certain First Supplemental Indenture, dated as
of August 9, 2016, and that certain Second Supplemental Indenture,
dated as of October 18, 2016, each between Medley LLC and U.S. Bank
National Association, as Trustee, and each as amended, restated,
supplemented, or otherwise modified from time to time.
Any efforts to enforce payment obligations under the Debt
Instruments are automatically stayed as a result of the filing of
the Chapter 11 Case and the holders' rights of enforcement with
respect to the Debt Instruments are subject to the applicable
provisions of the Bankruptcy Code.
Regulatory Matter
In connection with the commencement of the Chapter 11 Case, Medley
LLC disclosed in its pleadings filed with the Bankruptcy Court
certain matters related to MDLY’s and Medley LLC's business.
On Sept. 17, 2019, the staff of the Securities and Exchange
Commission's Division of Enforcement informed MDLY that it was
conducting an informal inquiry and requested the production and
preservation of certain documents and records. MDLY fully
cooperated with the Staff's informal inquiry and began voluntarily
providing the Staff with any requested documents.
By letter dated Dec. 18, 2019, the Staff advised MDLY that a formal
order of private investigation had been issued and that the
informal inquiry was now a formal investigation. The Order
indicated that the investigation relates to Section 17(a) of the
Securities Act of 1933, Section 10(b) of the Exchange Act of 1934
(the "Exchange Act") and Rule 10b-5 thereunder, and Sections
206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940,
Rule 206(4)-8, Sections 13(a) and 14(a) of the Exchange Act and
Rules 12b-20, 13a-1, 13a-11, 13a-13, and 14a-9 thereunder. MDLY
continues to cooperate fully with the investigation.
MDLY cannot predict the outcome of, or the timeframe for, the
conclusion of this investigation. An adverse outcome could have a
material effect on MDLY’s and Medley LLC's business, financial
condition, or results of operations.
About Medley LLC
Medley LLC, through its direct and indirect subsidiaries, including
Medley Capital LLC, is an alternative asset management firm
offering yield solutions to retail and institutional investors.
The Company provides investment management services to a permanent
capital vehicle, long-dated private funds, and separately managed
accounts, and serves as the general partner to the private funds.
The Debtor is headquartered in New York City and incorporated in
Delaware.
As of Sept. 30, 2020, Medley had $3.4 billion of assets under
management in two business development companies, Medley Capital
Corporation (NYSE: MCC) and Sierra Income Corporation, and several
private investment vehicles. Over the past 18 years, Medley has
provided capital to over 400 companies across 35 industries in
North America.
On March 7, 2021, Medley LLC filed a Chapter 11 bankruptcy petition
(Bankr. D. Del. Case No. 21-10526).
The Debtor disclosed $5,422,369 in assets and $140,752,116 in
liabilities as of March 2, 2021.
The Debtor tapped LOWENSTEIN SANDLER LLP as general bankruptcy
counsel; MORRIS JAMES LLP as local Delaware counsel; and B. RILEY
SECURITIES, INC., as investment banker. EVERSHEDS SUTHERLAND (US)
LLP is special counsel. KURTZMAN CARSON CONSULTANTS LLC is the
claims agent, maintaining the page https://www.kccllc.net/medley
MENUCHA ENTERPRISE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Menucha Enterprise LLC
295 S. Locust Street, Suite 101
Denver, CO 80224
Business Description: Menucha Enterprise LLC is primarily engaged
in renting and leasing real estate
properties.
Chapter 11 Petition Date: March 9, 2021
Court: United States Bankruptcy Court
District of Colorado
Case No.: 21-11106
Debtor's Counsel: Kevin S. Neiman, Esq.
LAW OFFICES OF KEVIN S. NEIMAN, PC
999 18th Street, Suite 1230 S
Denver, CO 80202
Tel: (303) 996-8637
E-mail: kevin@ksnpc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Aharon Sirota, the managing member.
A copy of the petition containing, among other items, a list of the
Debtor's 20 largest unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/CDMGHTQ/Menucha_Enterprise_LLC__cobke-21-11106__0001.0.pdf?mcid=tGE4TAMA
MMZ HOLDINGS: Seeks to Hire Michael Jay Berger as Counsel
---------------------------------------------------------
MMZ Holdings, LLC seeks approval from the U.S. Bankruptcy Court for
the Central District of California to hire the Law Offices of
Michael Jay Berger as its legal counsel.
The firm will render these legal services:
(a) communicate with creditors of the Debtor;
(b) review the Debtor's bankruptcy schedules;
(c) advise the Debtor of its legal rights and obligations in a
bankruptcy proceeding;
(d) work to bring the Debtor into full compliance with
reporting requirements of the Office of the United States Trustee;
(e) prepare status reports as required by the court; and
(f) respond to any motions filed in the Debtor's Chapter 11
proceeding.
The firm will be paid at these rates:
Michael Jay Berger $595 per hour
Sofya Davtyan $495 per hour
Mark Domeyer $495 per hour
Debra Reed $435 per hour
Carolyn M. Afari $435 per hour
Samuel Boyamian $350 per hour
Senior Paralegals and Law Clerks $225 per hour
Bankruptcy Paralegals $200 per hour
In addition, the firm will seek reimbursement for its expenses.
The retainer fee is $20,000.
Michael Jay Berger, Esq., disclosed in court filings that his firm
is a "disinterested person" as that term is defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael Jay Berger, Esq.
Law Offices of Michael Jay Berger
9454 Wilshire Blvd., 6th Floor
Beverly Hills, CA 90212-2929
Telephone: (310) 271-6223
Facsimile: (310) 271-9805
Email: michael.bergerbankruptcypower.com
About MMZ Holdings
MMZ Holdings, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No.
21-11230) on Feb. 16, 2021. Michael Itaev, managing member, signed
the petition. At the time of the filing, the Debtor estimated $1
million to $10 million in both assets and liabilities. The Law
Offices of Michael Jay Berger serves as the Debtor's legal counsel.
MSCI INC: Moody's Completes Review, Retains Ba2 CFR
---------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of MSCI Inc. and other ratings that are associated with the
same analytical unit. The review was conducted through a portfolio
review discussion held on February 24, 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
MSCI's Ba2 corporate family rating is constrained by its modest
revenue size compared to other Ba2-rated services issuers, narrow
operating scope with some concentration among its customers, its
aggressive financial strategies including frequent debt funded
shareholder returns and exposure to volatile equity market risks
for the portion of its products with AUM- based fees. The rating is
supported by strong profit rates and free cash flow generation and
a highly recurring subscription revenue.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
MURPHY OIL: Moody's Rates New Sr. Unsecured Notes Due 2028 'Ba3'
----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Murphy Oil
Corporation's proposed senior unsecured notes due 2028 and affirmed
its Ba3 Corporate Family Rating, Ba3-PD Probability of Default
Rating the Ba3 ratings on its existing senior unsecured notes. The
SGL-2 Speculative Grade Liquidity Rating is unchanged. The outlook
was changed to stable from negative. Proceeds from the proposed
notes will be used for the redemption of two existing tranches of
senior unsecured notes due 2022.
"The notes issuance and refinancing of Murphy's notes due 2022 will
improve its debt maturity profile," stated James Wilkins Moody's
Vice President. "The refinancing transactions will have no material
impact on the company's leverage."
Assignments:
Issuer: Murphy Oil Corporation
Senior Unsecured Notes, Assigned Ba3 (LGD4)
Affirmations:
Issuer: Murphy Oil Corporation
Probability of Default Rating, Affirmed Ba3-PD
Corporate Family Rating, Affirmed Ba3
Senior Unsecured Shelf, Affirmed (P)Ba3
Senior Unsecured Notes, Affirmed Ba3 (LGD4)
Outlook Actions:
Issuer: Murphy Oil Corporation
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The change in Murphy's outlook to stable from negative reflects
Moody's expectation that the company's production will remain
stable or grow modestly in 2021-2022, while the company limits
capital spending such that it generates flat or positive free cash
flow. While oil prices are well above Moody's expectations for 2021
and could decline from current levels, the company is well
positioned to fund sufficient capital investment to avoid further
declines in production and depletion of its reserves base,
supporting the stable outlook.
The proposed senior unsecured notes rank pari passu with Murphy's
existing senior unsecured notes and are rated Ba3, at the CFR
level. The capital structure is comprised of the senior unsecured
notes, which make up the majority of debt in the liability
structure, and an unsecured revolving credit facility. Moody's
notes that the company's revolving credit facility benefits from
upstream guarantees from the operating companies, structurally
subordinating the senior notes to the claims under the facility.
Moody's does not expect Murphy to actively maintain material
borrowings under the credit the facility. In addition, the
company's asset coverage of debt is strong. Accordingly, Moody's
believes that the Ba3 rating is more appropriate for the notes than
the rating suggested by the Moody's Loss Given Default Methodology.
A higher use of the facility than expected could result in a
downgrade of the notes.
Murphy's Ba3 CFR reflects its diversified portfolio of onshore and
offshore assets, significant scale, oil-weighted production and
reasonable leverage for the rating. Its onshore production is
sourced from the Eagle Ford shale and Canada, while its offshore
production is predominately in the US Gulf of Mexico (GOM). Over 60
percent of production is liquids. Murphy has scale typical of a
higher rated entity. There are higher exploration and regulatory
risks associated with developing deep water US GOM assets compared
to onshore Eagle Ford shale and Canadian onshore assets. Moody's
expects the company to lower its leverage by growing its production
volumes and generating higher earnings. Free cash flow generation
should improve in 2021 over 2020 levels due to higher average oil
prices, the dividend cut implemented in 2020, reduced capital
spending compared to historical levels and a modest increase in
production volumes. The company has major US Gulf of Mexico
projects that will provide a boost to production volumes and cash
flows starting in 2022.
Murphy's SGL-2 Speculative Grade Liquidity Rating reflects its
adequate liquidity through mid-2022. The liquidity position is
supported by cash balances that stood at $311 million at year-end
2020 and a $1.6 billion unsecured revolving credit facility ($200
million drawn at year-end 2020) with $3.8 million of letters of
credit outstanding. The revolving credit facility matures in
November 2023. Moody's expects the company to remain well in
compliance with its financial covenants of EBITDAX/Interest
coverage no less than 2.5x and debt/EBITDAX of less than 4.0x.
Murphy's next maturities, $259 million and $317 million of senior
notes maturing in 2022, will be redeemed with the proceeds of the
proposed notes issuance, after which the next notes maturity is in
2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Murphy's ratings could be upgraded if the company demonstrates
consistent production growth funded within its cash flow, while
sustaining a solid leverage profile with retained cash flow to debt
above 30% and a leveraged full-cycle ratio (LFCR) of at least 1.5x.
The ratings could be downgraded if retained cash flow to debt
remains below 20% or the LFCR falls below 1.5x or the company
generates sustained negative free cash flow.
Murphy Oil Corporation, headquartered in Houston, Texas, is an
independent E&P company with producing and/or exploration
activities in the US and Canada, as well as in Mexico, Brazil and
Vietnam.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
NCL FINANCE: Moody's Rates Planned $550MM Unsecured Note 'Caa1'
---------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to NCL Finance,
Ltd.'s ("NCL Finance") planned $550 million senior unsecured note
issuance and placed it on review for possible downgrade. NCL
Corporation's ("NCL") existing ratings are unchanged and remain on
review for downgrade, including its B2 corporate family rating,
B2-PD probability of default rating, B1 senior secured bank credit
facility rating, B1 senior secured rating, and Caa1 senior
unsecured rating. The company's speculative grade liquidity rating
of SGL-2 also remains unchanged.
NCL intends to issue a total of $1.1 billion in new senior
unsecured debt which will be broken up into two tranches: 1) A $550
million add-on to its existing 5.875% senior unsecured notes due
2026 issued by NCL, and 2) $550 million of new unsecured notes
issued by NCL Finance. The new notes will be guaranteed by NCL and
certain NCL operating subsidiaries. Proceeds will be used to, among
other things, repay in full the approximate $450 million secured
debt related to the Norwegian Jewel and Norwegian Pride credit
facilities with the balance to be used for general corporate
purposes. Pro forma for this transaction, liquidity at December 31,
2020 is about $3.95 billion. This amount of liquidity provides NCL
the ability to support its current level of monthly cash flow
deficit while cruise operations remain suspended and the increased
costs of ramping up operations to bring ships back on line when
cruise operations are allowed to resume.
Assignments:
Issuer: NCL Finance, Ltd.
Gtd. Senior Unsecured Regular Bond/Debenture, Assigned
Caa1 (LGD5); Placed On Review for Possible Downgrade
Outlook Actions:
Issuer: NCL Finance, Ltd.
Outlook, Assigned Rating Under Review
RATINGS RATIONALE
NCL's credit profile is supported by its good liquidity, market
position as the third largest ocean cruise operator worldwide, its
well-known brand names -- Norwegian Cruise Line, Oceania Cruises,
and Regent Seven Seas Cruises, as well as the historic strong
performance of its new ships in terms of pricing and bookings
relative to its other ships which enables the company to compete
against larger rivals across all its price points. Moody's view
that over the long run, the value proposition of a cruise vacation
relative to land-based destinations as well as a group of loyal
cruise customers supports a base level of demand once health safety
concerns have been effectively addressed. In the short run, NCL's
credit profile will be dominated by the length of time that cruise
operations remain suspended, the path forward to resuming
operations and the resulting impact on the company's cash
consumption and its liquidity profile. The normal ongoing credit
risks include its current exceptionally high leverage, the highly
seasonal and capital intensive nature of cruise companies and the
cruise industry's exposure to economic and industry cycles, weather
incidents and geopolitical events. Moody's expect the company's
debt/EBITDA will exceed 6.5x for at least the next two years
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
NCL's credit profile is supported by its good liquidity, market
position as the third largest ocean cruise operator worldwide, its
well-known brand names -- Norwegian Cruise Line, Oceania Cruises,
and Regent Seven Seas Cruises, as well as the historic strong
performance of its new ships in terms of pricing and bookings
relative to its other ships which enables the company to compete
against larger rivals across all its price points. Moody's view
that over the long run, the value proposition of a cruise vacation
relative to land-based destinations as well as a group of loyal
cruise customers supports a base level of demand once health safety
concerns have been effectively addressed. In the short run, NCL's
credit profile will be dominated by the length of time that cruise
operations remain suspended, the path forward to resuming
operations and the resulting impact on the company's cash
consumption and its liquidity profile. The normal ongoing credit
risks include its current exceptionally high leverage, the highly
seasonal and capital intensive nature of cruise companies and the
cruise industry's exposure to economic and industry cycles, weather
incidents and geopolitical events.
The review for downgrade will focus on the timeline for the company
to return to service, the potential to ramp up operations in a
meaningful way in 2021, and the resulting impact to its liquidity.
Moody's do not expect US cruise operations will be able to resume
until there are indications that the coronavirus spread is
slowing.
Prior to the review for downgrade, the factors that could lead to a
downgrade include if the company's liquidity weakened in any way or
if the recovery is delayed beyond Moody's base assumptions which
include a resumption of US cruising in the first half of 2021 with
capacity days reaching at least 65% of their 2019 levels and
occupancy reaching at least 70% by the second quarter with
continued improvement from there. The ratings could also be
downgraded if there are indications that the company is not on a
path to restoring leverage to a sustainable level. The outlook
could be revised to stable if the impacts from the spread of the
coronavirus stabilizes and cruise operations resume at a level that
enables the company to maintain debt/EBITDA below 6.0x. Ratings
could be upgraded if the company is able to maintain leverage below
5.5x with EBITA/interest expense sustained above 2.0x.
NCL Corporation Ltd., headquartered in Miami, FL, is a wholly owned
subsidiary of Norwegian Cruise Line Holdings, Ltd. Norwegian
operates 28 cruise ships under three brand names; Norwegian Cruise
Line, Oceania Cruises, and Regent Seven Seas Cruises. Net revenues
were about $1.3 billion for the fiscal year ended December 31,
2020.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
OLIN CORP: New Bond Redemption No Impact on Moody's Ba2 CFR
-----------------------------------------------------------
Moody's Investors Service says Olin Corporation's (Ba2 CFR;
negative) action to reprice existing credit facilities and increase
the size of it's delayed draw term loan by $315 million to
refinance a portion of the company's 2025 Notes is a credit
positive development because it will reduce the company's ongoing
interest burden. However, the company's ratings and outlook remain
unchanged.
Moody's expects improved earnings and cash flow generation in 2021.
Moody's forecast assumes that Olin's management-adjusted EBITDA
will improve to $900-950 million in 2021, which is lower than the
company's guidance of EBITDA exceeding $1 billion and up
meaningfully from $636 million in 2020. Recovery in the global
economy will support improved volumes and pricing with potential
upside from Olin's new commercial strategy. Moody's also expects
the company will convert a much greater portion of its EBITDA into
free cash flow in 2021. While the impact of the global outbreak of
Coronavirus on the company's earnings, combined with a significant
number of one-time items related to a past acquisition and new
business wins, resulted in debt-funded cash consumption in 2020,
Moody's expect at least $250 million of free cash flow in 2021.
Evidence of stronger end market conditions or commercial progress
could prompt an upward revision to Moody's forecast for earnings
and cash flow.
Moody's also expects Olin will be more focused on debt reduction.
Olin has not reduced debt since acquiring chlor-alkali assets from
Dow Chemical in 2015. The company reported $3.9 billion of debt at
December 31, 2020, disclosed a $120 million payment in January
2021, and guided towards using internally generated free cash flow
to facilitate further debt reduction in 2021. Management expects
Net Debt/EBITDA (management-defined) to fall to the 3.0x range by
the end of 2021. Meaningful progress toward reducing total debt and
maintaining a lower debt balance would be a material
credit-positive development.
Taken together, Moody's expects meaningful improvement in key
credit metrics in the coming quarters and could stabilize the
outlook with further progress in that direction. Adjusted financial
leverage remains high for the rating over 7 times (Debt/EBITDA;
including Moody's standard analytical adjustments) and retained
cash flow-to-debt remains low for the rating at about 5% (RCF/Debt)
for the twelve months ended December 31, 2020. These metrics, on a
point-in-time basis, are indicative of much lower ratings. However,
the company has good liquidity to support operations while credit
metrics remain weak on a temporary basis and improving financial
performance expected to drive substantive improvement in key credit
metrics. Moody's expects adjusted financial leverage will fall
toward 5 times and retained cash flow-to-debt will improve toward
10% by year-end. Moody's could stabilize the outlook before credit
metrics reach these thresholds if we see some debt reduction and a
clear path toward the appropriate metrics.
Olin Corporation is a Clayton, Missouri-based manufacturer and
distributor of commodity chemicals and a manufacturer of small
caliber firearm ammunition.
OWENS & MINOR: Moody's Rates New $500MM Unsecured Notes 'B2'
------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Owens & Minor,
Inc.'s proposed $500 million senior unsecured notes due 2029.
Concurrently, Moody's upgraded Owens & Minor's senior secured
ratings to Ba2 from B1 reflecting the new layer of loss absorption
that will be provided by the proposed senior unsecured notes. There
are no changes to Owens & Minor other existing ratings including
the B1 Corporate Family Rating, B1-PD Probability of Default
Rating, and SGL-1 Speculative Grade Liquidity rating. The outlook
remains positive.
Proceeds of the offering will be primarily used to repay borrowings
under the existing revolving credit facility, refinance the
existing term loan B, and pay related fees and expenses. In
conjunction with the notes issuance, the company is refinancing its
existing $400 million revolving credit facility with a new $300
million facility and is upsizing its existing A/R securitization
facility to $450 million from $325 million, along with resetting
the maturity to 3 years. Moody's views the transaction as a credit
positive as it will improve liquidity and lower interest costs
while extending Owens & Minor's debt maturity profile. The proposed
transaction will have no impact on financial leverage, which
Moody's estimates at 4.1x for the last twelve months to December
31, 2020.
Assignments:
Issuer: Owens & Minor, Inc.
Senior Unsecured Regular Bond/Debenture, Assigned B2 (LGD5)
Upgrades:
Issuer: Owens & Minor, Inc.
Senior Secured Regular Bond/Debenture, Upgraded to Ba2 (LGD3) from
B1 (LGD3)
RATINGS RATIONALE
Owens & Minor's B1 CFR is constrained by moderate scale in the
highly competitive medical distribution business and low margins
overall despite an increasing contribution from its profitable
manufacturing operations. Manufacturing margins have improved due
to higher manufacturing throughput from demand for personal
protective equipment (PPE). However, as the pandemic wanes, sales
growth and manufacturing margin on these products will likely
moderate. Moody's expects that adjusted debt to EBITDA will
continue to decline and remain in the 2.5x to 3.0x range over the
next 12-18 months supported by further profitability improvement
and debt reduction. With revenues of $8.5 billion in 2020, Owens &
Minor competes against significantly larger companies, such as
Cardinal Health, Inc., which also has a more diversified product
offering. The ratings are supported by Moody's view that the
company will continue to expand its manufacturing business while
sustaining positive free cash flow.
The Speculative Grade Liquidity Rating of SGL-1 reflects the
company's very good liquidity, including ample headroom under its
financial covenants, positive free cash flow after required debt
amortization and access to external credit facilities. At December
31, 2020, Owens & Minor had unrestricted cash of $83 million. The
company has recently repaid its 2021 notes and the term loan due in
2022. The new $300 million revolving credit facility will expire in
2026.
The positive outlook reflects Moody's expectation that financial
leverage will improve to between 2.5x and 3.0x over the next 12 to
18 months as the company further grows its manufacturing business,
stabilizes its core distribution business, and repays debt.
Following are some of the preliminary terms for the proposed new
debt instruments, which remain subject to market acceptance.
The company expects the proposed senior unsecured notes to have no
financial maintenance covenants while the proposed revolving credit
facility will contain a maximum Total Net Leverage Ratio of 4.5x
(with 0.5x step-up for 12 months following a qualified acquisition)
and a Minimum Interest Coverage Ratio of 2.0x. The new unsecured
notes will have a change of control clause at 101%.
Owens & Minor has limited exposure to environmental risks. The
coronavirus pandemic, which Moody's considers as a social risk, has
materially affected Owens & Minor's performance by reducing demand
for surgical equipment as a result of a decline in hospital
procedures in 2020. However, this adverse impact was partly
mitigated by a strong increase in demand for PPE that the company
manufactures and distributes. With respect to governance, Owens &
Minor has had several management changes within the last two years
and therefore the current management team has a limited track
record at Owens & Minor. Under the prior management team, the
company pursued several leveraging acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company is able to sustain
organic revenue and margin growth in the manufacturing business,
and further reduce leverage. Specifically, if adjusted debt/EBITDA
is expected to be sustained below 3.0x, Moody's could upgrade the
ratings.
The ratings could be downgraded if liquidity deteriorates from
current levels, if the company experiences margin pressure, or if
cash flow weakens. Specifically, if adjusted debt/EBITDA is
sustained above 4.0x Moody's could downgrade the ratings.
Owens & Minor, headquartered in Mechanicsville, VA, is a nationwide
provider of distribution and logistics services to the healthcare
industry. Owens & Minor operates two divisions: Global Solutions
(80% of revenue) that includes a comprehensive portfolio of
products and services to healthcare providers and manufacturers,
and Global Products (20% of revenue) that manufactures and sources
medical surgical products. Owens & Minor had revenue of $8.5
billion in 2020.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
PAPER SOURCE: Seeks to Hire Epiq Corporate as Claims Agent
----------------------------------------------------------
Paper Source, Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Virginia to hire Epiq Corporate
Restructuring, LLC as its claims and noticing agent.
The firm will oversee the distribution of notices and the
maintenance, processing and docketing of proofs of claim filed in
the Chapter 11 cases of Paper Source and its affiliates.
Epiq will charge these hourly fees:
Clerical/Administrative Support $35 - $55
IT/Programming $65 - $85
Case Managers $85 - $165
Consultants/Directors/VPs $165 - $195
Solicitation Consultant $195
Executive VP, Solicitation $215
Executives No Charge
Before the petition date, the Debtors provided Epiq a retainer in
the amount of $25,000.
Brian Hunt, consulting director at Epiq, disclosed in court filings
that the firm is "disinterested" as defined in Section 101(14) of
the Bankruptcy Code.
Epiq can be reached through:
Brian Hunt
Epiq Corporate Restructuring, LLC
777 Third Avenue, 12th Floor
New York, NY 10017
Phone: 917 359 4553
About Paper Source
Paper Source, Inc. operates as lifestyle brand and retailer of
premium paper products, crafting supplies and related gifts,
including custom invitations, greeting cards and personalized
stationery and stamps. It sells fine and artisanal papers, wedding
paper goods, books and gift wrap through its 158 domestic stores
and e-commerce website. Its administrative headquarter is in
Chicago.
Paper Source and Pine Holdings, Inc. sought Chapter 11 protection
(Bankr. E.D. Va. Case No. 21-30660) on March 2, 2021. At the time
of the filing, the Debtor disclosed assets of between $100 million
and $500 million and liabilities of the same range.The Hon. Keith
L. Phillips is the case judge.
The Debtors tapped Willkie Farr & Gallagher LLP and Whiteford
Taylor & Preston LLP as bankruptcy counsel, M-III Advisory LP as
restructuring advisor, SSG Capital Advisors LLC as investment
banker, and A&G Real Estate Partners as real estate advisor. Epiq
Corporate Restructuring, LLC is the claims agent.
PARK SEVEN: Arizona Property Rental to Fund Plan Payments
---------------------------------------------------------
Park Seven Holdings, LLC, filed with the U.S. Bankruptcy Court for
the District of Arizona a Disclosure Statement describing Plan of
Reorganization on March 2, 2021.
The Debtor is the owner of real property located at 10234 N. 7th
Ave. Phoenix, AZ 85021 ("7th Ave. Property"). The 7th Ave.
Property is adjacent to North Mountain and is presently leased to
Park Seven Operations, LLC dba The Park at 7th Ave. ("Park Seven
Operations") which operates an assisted living facility.
The Debtor's proposed Plan seeks to reorganize its current debts
into a reasonable repayment schedule for the next five years.
Through the terms and protections of the Plan, the Debtor can
continue its business operations which will provide it with a
steady stream of income to repay pre-petition Creditors in full.
Class 1 consists of the Allowed Secured Claim of Chatham relating
to the Chatham Loan. The Debtor shall cure the defaults under the
Chatham Loan and reinstate the Chatham Loan according to its terms.
All loan documents concerning the Chatham Loan, including but not
limited to, the Note, Deeds of Trust, Assignment of Rents Security
Agreement and Fixture Filing, Security Agreements, Assignment of
Lease, and multiple Guarantees, shall survive this bankruptcy and
not be modified in any way by the Plan or otherwise in this
bankruptcy. The holder of the Class 1 Claim shall be paid pursuant
to the terms and conditions of the Chatham Loan.
Class 2 consists of the Allowed Secured Claim of Mulligan Funding
relating to the Merchant Agreement entered into jointly by the
Debtor, Park Seven Operations, and DPAC Holdings LLC. In accordance
with Mulligan Funding's Proof of Claim, the Class 2 Claim shall not
accrue interest. If necessary, the Debtor shall pay the Class 2
Claim in full through 24 monthly payments of $2,018.12 beginning on
the first business day after the third annual anniversary of the
Effective Date and continuing each month thereafter until paid in
full.
Class 3 consists solely of the Allowed Secured Claim of the
Maricopa County Treasurer ("MCT") in the amount of $31,121.92
(Claim No. 1) and secured by the 7Th Ave Property. The various tax
year liabilities that make up the Class 3 Claim accrue interest at
different rates. The Class 3 Allowed Secured Claim shall be paid in
55 monthly payments of principal and interest in the total amount
of $733.16 or in such amounts of principal and interest necessary
to pay the MCT's Allowed Secured Claim in full.
The Debtor does not believe it has or owes any Class 4 Creditors or
Claims, nor were any unsecured claims filed or timely filed with
the Court. Accordingly, the Debtor is not proposing any treatment
for Class 4 General Unsecured Creditors.
Class 5 consists of all equity interests in the Debtor held by JEMA
Capital Park Seven Fund, LLC. After full payment to all
higher-priority classes, JEMA Capital Park Seven Fund, LLC shall
retain its equity interest in the Debtor. Class 5 is not impaired
and not entitled to vote on the Plan.
The Plan will be funded from the Debtor's post-confirmation income.
The Debtor's rental income is in an amount sufficient for the
Debtor to make ongoing payments owing under the Chatham Loan. On or
by the Effective Date, the Debtor and Park Seven Operations will
amend the Lease, subject to Chatham's approval, so that Park Seven
Operations will be required to pay the Debtor supplemental rent in
an amount sufficient for the Debtor to make the Plan payments and
cure its pre-petition default under the Lease.
A full-text copy of the Disclosure Statement dated March 2, 2021,
is available at https://bit.ly/3ccVB7T from PacerMonitor.com at no
charge.
Attorneys for the Debtor:
Hilary L. Barnes, Esq.
Allen Barnes & Jones, PLC
1850 N. Central Avenue, Suite 1150
Phoenix, AZ 85004
Tel: 602-256-6000
Email: hbarnes@allenbarneslaw.com
About Park Seven Holdings
Park Seven Holdings, LLC filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No.
20-13014) on Dec. 2, 2020. The petition was signed by Jean
Gonzvar, managing member of Jema Capital, LLC, manager. At the
time of the filing, the Debtor estimated $1 million to $10 million
in both assets and liabilities. Hilary L. Barnes, Esq., at Allen
Barnes & Jones, PLC, represents the Debtor.
PLAYTIKA HOLDING: Moody's Raises CFR to Ba3 on Revenue Growth
-------------------------------------------------------------
Moody's Investors Service upgraded Playtika Holding Corp.'s
Corporate Family Rating to Ba3 from B1 and Probability of Default
Rating to Ba3-PD from B1-PD in connection with the company's
proposed debt recapitalization. Concurrent with the upgrade,
Moody's assigned Ba2 ratings to Playtika's proposed $1.8 billion
senior secured first lien term loan B and $600 million senior
secured revolving credit facility. Moody's also assigned a B2
rating to the proposed $600 million senior unsecured notes. The
rating outlook is stable.
Net proceeds from the new debt, in addition to about $15 million of
cash from the balance sheet, will be used to retire Playtika's
existing $2.375 billion term loan B. Moody's expects to withdraw
ratings on the existing term loan B and revolver upon the close of
the pending transaction.
The ratings upgrade follows Playtika's strong and consistent growth
in revenues, profits and free cash flow, which Moody's expects to
continue over at least the next two years. Playtika also
successfully completed an IPO process in January 2021, which
enhanced liquidity and information disclosure.
Upgrades:
Issuer: Playtika Holding Corp.
Corporate Family Rating, Upgraded to Ba3 from B1
Probability of Default Rating, Upgraded to Ba3-PD from B1-PD
Assignments:
Issuer: Playtika Holding Corp.
Speculative Grade Liquidity Rating, Assigned SGL-1
Senior Secured 1st Lien Term Loan B, Assigned Ba2 (LGD3)
Senior Secured Revolving Credit Facility, Assigned Ba2 (LGD3)
Senior Unsecured Regular Bond/Debenture, Assigned B2 (LGD6)
Outlook Actions:
Issuer: Playtika Holding Corp.
Outlook, Remains Stable
RATINGS RATIONALE
The Ba3 CFR reflects Playtika's moderate leverage level pro forma
for the propose refinancing, acquisition appetite and concentration
of ownership. Playtika's pro forma adjusted leverage was a little
over 4x as of the year ended December 31, 2020 (when adjusting for
certain one-time expenses on a Moody's adjusted basis). Moody's
expects leverage to decline toward 3x over the next 12-18 months,
driven by continued organic revenue and EBITDA growth in the low to
mid double-digit percent range and, potentially, acquisition
activity.
The rating also incorporates Playtika's limited end-market
diversification, as the company offers various mobile gaming
applications via mobile and internet application platforms with the
vast majority of revenues generated through in-app purchases.
Playtika is expected to remain acquisitive as the company's
strength lies in keeping casual gaming users engaged with its
products and converting them into paying customers. Rather than
developing regular major game releases, Playtika is expected to
acquire less profitable game studios with existing customer bases
which can be converted into paying users over time by adding
personalized features and content that increases user engagement.
The credit profile also considers Playtika's leading market
position within the category of casino-themed and casual mobile
gaming market sub-segments, as well as strong revenue growth rates
and free cash flow generation. Playtika maintains high
profitability, with adjusted EBITDA margins in the mid to high 30%
range, and robust free cash flow, which is expected to exceed 15%
of gross debt. The prospects for continued profit growth results
from Playtika's proven capabilities in content personalization and
monetization (live game operations).
At the same time, Playtika is smaller in scale relative to gaming
competitors such as Tencent Holding, Limited, Activision Blizzard
and Electronic Arts, Inc. which are also more flexibly capitalized
and have more diversified revenue streams. There is potential for
other competitors to pivot toward Playtika's strategy of acquiring
existing game studios which could drive up M&A valuations over
time.
The Ba3 CFR incorporates governance and ownership considerations.
While Playtika is a publicly traded company with independent
directors, the company is ultimately controlled by Giant Network
Group and Giant's chairman, Shi Yuzhu. Despite the concentrated
ownership, Moody's expects that Playtika will maintain a moderate
financial strategy that balances both shareholder and creditor
interests over time.
The stable outlook reflects Moody's expectation that Playtika will
generate low to mid double-digit percent revenue and EBITDA growth
over the next 12-18 months while also generating free cash flow in
excess of 15% of gross debt balances. The stable outlook also
considers the company's consistent growth profile and very strong
interest coverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if Playtika were to adopt more
aggressive financial policies as evidenced by large debt-funded
acquisitions or shareholder returns. Ratings pressure could also
arise if the company were to experience material diminution of
earnings growth or cash flow generation due to end-market declines
or competitive pressures.
Ratings could be upgraded if Playtika were to reduce leverage such
that Moody's adjusted debt to EBITDA was sustained below 3x while
also maintaining strong revenue and profit growth profiles.
The Speculative Grade Liquidity (SGL) rating of SGL-1 reflects
Playtika's very good liquidity which is supported by pro forma cash
balances of about $975 million at the close of the transaction, an
undrawn $600 million revolving credit facility and expectations for
free cash flow generation in excess of 15% of gross debt over the
next 12-18 months.
The Ba2 rating for Playtika's proposed bank credit facilities, one
notch higher than the CFR, reflects a Ba3-PD PDR, expectations for
an average recovery rate in the event of default, and the debt's
senior most position ahead of the company's B2 rated unsecured
notes.
Playtika Holding Corp, headquartered in Nevada, USA with major
operations in Tel Aviv, IL is a provider of casino-themed and
casual mobile gaming applications offered through a variety of
social network and mobile application platforms. The company
generated gross revenues of approximately $2.371 billion, primarily
through in-app purchases, in the year ended December 31, 2020.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
PROVATION SOFTWARE: Moody's Completes Review, Retains B3 CFR
------------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Provation Software Group, Inc. and other ratings that
are associated with the same analytical unit. The review was
conducted through a portfolio review discussion held on February
24, 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
Provation Software's B3 corporate family rating is constrained by
small revenue size in the fragmented clinical medical software
market, aggressive financial strategies typical for its private
equity sponsor owners and very high financial leverage. The rating
is supported by a leadership position in the US gastroenterology
market, highly recurring subscription revenues and strong EBITDA
margins expected to be over 50%.
The principal methodology used for this review was Software
Industry published in August 2018.
REALOGY GROUP: Moody's Completes Review, Retains B2 CFR
-------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Realogy Group LLC and other ratings that are associated
with the same analytical unit. The review was conducted through a
portfolio review discussion held on February 24, 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
Realogy's B2 corporate family rating is constrained by high
financial leverage, dependence on volatile, cyclical and seasonal
existing home sale price and volume for profitability and the
potential for further business disruptions from the coronavirus
pandemic. The rating is supported by strong free cash flow
expectations, the company's multiple leading brands and
market-leading share of the US existing home sales market by
volume, and economic tailwinds, including low interest rates, to
the company's operating performance.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
RHINO BARE: Seeks to Hire Russ August as Special Counsel
--------------------------------------------------------
Rhino Bare Projects LLC seeks approval from the U.S. Bankruptcy
Court for the Central District of California to hire Russ, August &
Kabat as its special counsel.
The firm will represent the Debtor in an adversary proceeding to be
filed against Canico Capital Group, LLC, West Best Capital Group,
LLC, and Abraham Assil for breach of fiduciary duty.
The primary attorney handling the litigation is Nathan Meyer, Esq.
Mr. Meyer’s billing rate is $700 per hour. The rates of other
attorneys in the firm range between $550 and $1,275.
Paralegals, legal assistants, secretaries and other personnel bill
between $65 and $265 per hour.
The firm has requested a retainer of $25,000.
Mr. Meyer disclosed in a court filing that the firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Nathan Meyer, Esq.
Russ August & Kabat
12424 Wilshire Blvd
Los Angeles, CA 90025
Phone: +1 310-826-7474
Email: nmeyer@raklaw.com
About Rhino Bare Projects LLC
Rhino Bare Projects LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
20-16889) on July 30, 2020. In the petition signed by Victor Galam,
managing member, the Debtor estimated $10 million to $50 million in
both assets and liabilities.
Leslie Cohen Law PC and Russ August & Kabat serve as the Debtor's
bankruptcy counsel and special counsel, respectively.
SCHREINER'S FINE SAUSAGES: Unsecureds to Recover 100% in 66 Months
------------------------------------------------------------------
Schreiner's Fine Sausages, Inc., filed with the U.S. Bankruptcy
Court for the Central District of California, Los Angeles Division,
a Disclosure Statement in support of the Chapter 11 Plan of
Reorganization on March 2, 2021.
The Plan is a reorganization plan. The Debtor seeks to accomplish
payments under the Plan by making payments to its creditors over
time with interest, and thus pay them in full on account of their
allowed claims.
The Debtor operates a wholesale and retail fine meat market, known
as Schreiner's Fine Sausages, located at 3417 Ocean View Blvd,
Glendale, California 91208. Walter Thomas Schreiner holds 15% of
the ownership in the Debtor, with the other 85% ownership is held
by his mother, Marcia Schreiner. The Debtor's bankruptcy was
precipitated in part by certain high interest merchant finance
agreements entered by the Debtor as part of its efforts to maintain
and grow business operations, which the Debtor was ultimately
unable to keep up with for reasons including the current Covid-19
pandemic.
Since filing its bankruptcy case, the Debtor has continued business
operations, worked with creditors, improved its business operations
and financial structure, and is current on its post-petition
obligations. The Debtor has, and is, experiencing strong growth in
its business revenues.
Class 6 consists of Non-Priority Unsecured Claims. Allowed Class 6
claims shall be paid 100% of their claims within 66 months
following the effective date, with interest accruing at the federal
judgment rate on the unpaid balance starting from the petition
date, at the judgment rate in effect in the petition date (0.16%).
The known claims total approximately $310,000, including
approximately $108,900 received by the Debtor on account of the
United States Small Business Paycheck Protection Program, made
available to the Debtor in response to the Covid-19 pandemic, which
is expected to be forgiven. If forgiven as expected, the total
amount of claims would approximate $201,100. Class 6 is impaired
and entitled to vote on the Plan.
Class 8 equity interest holders are unaffected by the Plan.
The source of funding for the Plan will come from cash on hand on
the effective date, expected to approximate $200,000, and income
generated from the Debtor's ongoing business operations. The Debtor
shall pay a minimum of $10,000 per month toward payments to allowed
claims under the Plan.
The Debtor will manage its own affairs under the Plan, through its
President and Chief Executive Office, Walter Thomas Schreiner, who
shall not receive any compensation for such services called for
under the Plan, other than compensation normally due to him for
non-bankruptcy duties, which currently amounts to monthly salary of
$7,068.72.
A full-text copy of the Disclosure Statement dated March 2, 2021,
is available at https://bit.ly/3v5pIHe from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Robert B. Rosenstein
Rosenstein and Associates
28600 Mercedes Street, Suite 100
Temecula, CA 92590
Telephone: (951)296-3888
Facsimile: (951)296-3889
E-mail: Robert@thetemeculalawfirm.com
About Schreiner's Fine Sausages
Schreiner's Fine Sausages, Inc., operates a wholesale and retail
fine meat market, known as Schreiner's Fine Sausages, located at
3417 Ocean View Blvd, Glendale, California
91208. The Debtor filed Chapter 11 Petition (Bankr. C.D. Cal. Case
No. 20-14808) on May 26, 2020. Robert B. Rosenstein, Esq. of
ROSENSTEIN & ASSOCIATES is the Debtor's Counsel.
SCP EYE CARE: Moody's Assigns B3 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating and
B3-PD Probability of Default Rating to SCP Eye Care Services, LLC
("EyeSouth"). Moody's also assigned a B3 rating to the company's
proposed revolving credit facility and first lien term loans. The
rating outlook is stable.
Proceeds from the transaction will be used to refinance EyeSouth's
existing debt, finance its near-term acquisition pipeline and pay
for fees and expenses associated with the transaction. The delayed
draw first lien term loan can be used to fund acquisitions and
future growth over the next 18 months.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: SCP Eye Care Services, LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Senior Secured Revolving Credit Facility, Assigned B3 (LGD3)
Senior Secured 1st Lien Term Loan, Assigned B3 (LGD3)
Senior Secured 1st Lien Delayed Draw Term Loan, Assigned B3
(LGD3)
Outlook Actions:
Issuer: SCP Eye Care Services, LLC
Outlook, Assigned Stable
RATINGS RATIONALE
The B3 CFR reflects EyeSouth's small scale relative to peers and
its geographic concentration, with around 50% of revenue generated
in Georgia. Additionally, the rating reflects EyeSouth's high pro
forma adjusted leverage, with debt/EBITDA exceeding 7 times. In
addition, the rating is constrained by the risks associated with
the company's rapid expansion strategy (primarily through
acquisitions). Moody's expects leverage will decline to the low 6
times by FYE 2021 due to solid same store sales growth and
accretive acquisitions.
The rating benefits from the industry's favorable long-term growth
prospects, including growing demand for ophthalmological services
due to aging demographics and the growing prevalence of myopia and
cataracts. Moody's anticipates that EyeSouth's ambulatory surgery
centers will benefit from growing demand, as patients and payors
generally prefer the outpatient environment (primarily due to lower
cost and better outcomes) for certain specialty procedures,
including cataract surgeries. The rating also reflects Moody's
expectation for positive free cash flow.
Moody's expects the company's liquidity to be good over the next
12-18 months, primarily supported by approximately $85 million of
cash at close, and around $20 million in projected annual free cash
flow. The company will also have access to a $15 million revolver
(undrawn at close) and a $65 million delayed draw term loan that
can be used to fund acquisitions over the next 18 months. EyeSouth
has limited alternative sources of liquidity, as the company's
assets are pledged as collateral for the secured credit
facilities.
Moody's considers coronavirus to be a social risk given the risk to
human health and safety. Aside from coronavirus, EyeSouth faces
other social risks such as the rising concerns around the access
and affordability of healthcare services. However, Moody's does not
consider eye care providers and ambulatory surgery centers to face
the same level of social risk as many other healthcare providers
like hospitals. From a governance perspective, Moody's views
EyeSouth's growth strategy to be aggressive. Given the company's
private equity ownership, Moody's considers it likely that the
company will continue to pursue debt funded acquisitions.
The proposed loans are expected to have a springing maximum first
lien net leverage ratio that will be tested, beginning with the
first full fiscal quarter after closing, when the revolver is more
than 35% drawn. If tested, the covenant will require first lien net
leverage to be below a level which reflects an approximately 35%
cushion on projected EBITDA levels reflected in the sponsor's
model. In addition, the first lien credit facility contains
incremental facility capacity up to the greater of $70 million and
100% of EBITDA, plus unlimited additional amounts up to 5.50x first
lien net leverage ratio (if pari passu secured), up to 6.50x senior
secured net leverage ratio (if junior secured), and up to 6.75x
total net leverage ratio (if unsecured or secured by
non-collateral). Alternatively, the ratio tests may be satisfied so
long as leverage does not increase if incurred in connection with a
permitted acquisition or investment. The credit agreement will
permit a portion of the incremental to be incurred with an earlier
maturity date than the initial term loans (amount TBD). The credit
agreement permits the transfer of assets to unrestricted
subsidiaries, to the extent permitted under the carve-outs, with no
"blocker" provisions restricting such transfers. There are
step-downs in the asset sale prepayment requirement to 50% and 0%
upon achieving first lien net leverage ratios of 5.0x and 4.5x
first lien net leverage, respectively. Only wholly-owned
subsidiaries are required to provide subsidiary guarantees; partial
dividends of ownership interest could jeopardize guarantees.
The outlook is stable reflecting Moody's expectation that the
company will continue to generate positive same store sales growth
and will effectively manage its acquisition strategy.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if EyeSouth's revenue or
profitability weakens or if the company fails to effectively manage
its rapid growth. A downgrade could also occur if the company's
liquidity weakens or if the company's financial policies become
more aggressive.
The ratings could be upgraded if EyeSouth materially increases is
size and scale and demonstrates stable organic growth while
effectively executing its expansion strategy. An upgrade would be
supported by sustained, stable free cash flow and debt to EBITDA
that is expected to be maintained below 5.0 times.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
SCP Eye Care Services, LLC ("EyeSouth") provides practice
management services to a network of affiliated ophthalmology
practices, specializing in essential treatments for eye health
conditions. EyeSouth's service offering includes cataract, retina,
glaucoma and cornea care. EyeSouth operates over 100 locations
across 8 states, with a predominant footprint in the South and 13
wholly affiliated ASCs. EyeSouth is headquartered in Atlanta, GA
and was formed in 2017 by Shore Capital Partners, its private
equity owner. EyeSouth generated about $250 million of revenue as
of September 30, 2020.
SHEARER'S FOODS: Moody's Completes Review, Retains B2 CFR
---------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Shearer's Foods, 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
Shearer's credit profile (B2 CFR) is constrained by high financial
leverage following a $388 million one-time dividend to share
holders. Free cash flow is strong which will aid in debt repayment.
Profitability has improved through pricing initiatives, elimination
of less profitable SKUs which have improved mix, permanent
improvements in procurement and in the manufacturing cost structure
to generate efficiencies and the cycling of the one-time costs
associated with integration and operating issues that arose after a
string of acquisitions. Customer concentration remains a risk. The
company has solid relationships with its largest customers and
benefits from its leading position as a producer of private label
snacks, with a broad manufacturing footprint that allows it to
service customers nationally.
The principal methodology used for this review was Consumer
Packaged Goods Methodology published in February 2020.
STEREOTAXIS INC: Signs Office Lease Agreement With Globe Building
-----------------------------------------------------------------
Stereotaxis, Inc. entered into an office lease agreement with Globe
Building Company, under which the Company will lease executive
office space and manufacturing facilities of approximately 43,100
square feet of rentable space located at 710 N. Tucker Boulevard,
St. Louis, Missouri that will serve as the Company's new principal
executive and administrative offices and manufacturing facility.
The Lease for the Premises is effective at the later of Jan. 1,
2022 or the date on which the Company has received an occupancy
permit, and has a term of ten years, with two renewal options of
five years each. The minimum annual rent under the terms of the
Lease ranges from approximately $0.8 million in 2022 to $1.0
million in 2031. At the Lease commencement, the Company will
relocate its current St. Louis, Missouri operations to the Premises
in the new building.
The Company had exercised its final renewal term under its current
Office Lease dated as of Nov. 15, 2004, as amended, with VTR LS
4320 FOREST PARK, LLC (successor-in-interest to Cortex West
Development I, LLC), which Office Lease will expire and terminate
in accordance with its terms on Dec. 31, 2021.
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.
TEMPUR SEALY: Moody's Affirms Ba3 CFR & Alters Outlook to Positive
------------------------------------------------------------------
Moody's Investors Service affirmed Tempur Sealy International
Inc.'s Corporate Family Rating at Ba3, Probability of Default
rating at Ba3-PD, and senior unsecured debt instrument rating at
B1. The Speculative Grade Liquidity rating was changed to SGL-1
from SGL-2. The outlook was changed to positive from stable.
The rating affirmation reflects Moody's expectation that Tempur
Sealy will continue to demonstrate good operating performance in
2021 as consumers continue to focus on at-home purchases around
comfort and the US housing market remains strong. The pandemic has
shifted consumer spending towards upgrading their homes rather than
for travel and leisure. However, as 2021 progresses into 2022,
Moody's expects that demand in mattresses will subside as the
rollout of the vaccine will enable consumers to travel more and
focus their spending outside of the home. For this reason, Moody's
expects that sustainability of the strong operating performance
past 2021 is unlikely to continue as consumers redirect their
spending habits. Additionally, government stimulus checks will
likely not continue past 2021 as the pandemic subsides, thus
further dampening spending on discretionary durables products.
Moody's expects that EBITDA (Moody's-adjusted) will peak at around
$900 million in 2021 and then decline to around $850 million in
2022 as the coronavirus tailwinds subside.
The company's aggressive plans to repurchase 6% of its shares in
2021 and 3% thereafter will continue to lead to moderate financial
leverage of around 2.0x to 2.5x debt to EBITDA. However, given the
cyclicality of mattress purchases and Moody's expectation of some
operating performance decline beyond 2021, the company may find its
financial leverage well above that level if it does not curtail
planned share repurchases. Historically the company has engaged in
large share repurchases, though has adjusted these levels during
economic uncertainty. The company's stated financial policy of a
leverage target of 2.0x to 3.0x net debt to EBITDA (2.5x to 3.5x
Moody's adjusted debt to EBITDA) signals that it will comfortably
be able to manage leverage such that its metrics remain within the
Ba3 rating category. Over the next 12-18 months, Moody's expects
Tempur Sealy will maintain debt/EBITDA comfortably below 3.0x
however this leverage will likely increase as demand subsides past
2021 and if the company continues to pursue outsized share
repurchases.
The upgrade of the Speculative Grade Liquidity rating to SGL-1 is
due to Tempur Sealy's very good liquidity that is supported by $65
million of cash as of December 31, 2020 and access to a $425
million revolving credit facility that expires in 2024, of which
$425 million was available at year-end. This revolver was increased
to $725 million in February 2021 to allow for the refinancing of
notes and Moody's estimates that around $400 million was available
post refinancing. Liquidity is also enhanced by the company's
strong annual free cash flows. Moody's expects the company to
generate approximately $460 million of free cash flows in 2021
after taking into account approximately $60 million of annual
dividends and higher than normal growth capital expenditures
associated with the buildout of three facilities to support its
growth and expansion into the OEM foam and mattress businesses.
Tempur does not have any major debt maturities until 2024 when its
revolver and term loan A mature. Moody's expects Tempur will
maintain adequate levels of cash on hand and unused revolver
capacity to maintain excellent liquidity.
The positive outlook reflects Moody's expectation for continued
good operating performance over the next 12-18 months that can lead
to an upgrade if the company demonstrates a disciplined financial
policy approach such that debt to EBITDA remains below 3.0x as the
pandemic tailwinds subside. The positive outlook also reflects
Tempur's very good liquidity profile over the next 12 months.
Upgrades:
Issuer: Tempur Sealy International Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Affirmations:
Issuer: Tempur Sealy International Inc.
Probability of Default Rating, Affirmed Ba3-PD
Corporate Family Rating, Affirmed Ba3
Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5)
Outlook Actions:
Issuer: Tempur Sealy International Inc.
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
Tempur Sealy's Ba3 CFR reflects the discretionary nature of its
products, and sensitivity to the housing market, macroeconomic
conditions, and volatility in consumer spending. Tempur Sealy's
credit profile is constrained by its financial policy of debt
financed share repurchases and sensitivity to economic cycles and
cash flows experienced during economic downturns. The rating also
incorporates the Company's strong market position, brand strength,
product innovation, breadth of products in varying pricing points,
and diverse omnichannel approach.
Tempur Sealy is moderately exposed to environmental, social and
governance (ESG) risks. The company uses, transports, and stores
chemicals in its foam manufacturing process. A failure to adhere to
environmental regulations and safe practices could result in
financial penalties and remediation costs. From a governance
standpoint, Tempur Sealy's share repurchases are at times
aggressive but there is flexibility to pull back on share buybacks
when operating pressures increase, as it did in early 2020. Moody's
also views corporate governance as improving and a key driver to
the ratings given a more conservative leverage target by
management. The majority of Tempur Sealy's board members are
independent directors and have extensive consumer product
experience. But the Chairman of the Board is also the CEO. Tempur
Sealy is a widely held public company.
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Moody's analysis has considered the effect on the performance of
Tempur Sealy from the current weak US economic activity and a
gradual recovery for the coming months. Although an economic
recovery is underway, it is tenuous, and its continuation will be
closely tied to containment of the virus. As a result, the degree
of uncertainty around our forecasts is unusually high. Moody's
regards the coronavirus outbreak as a social risk under its ESG
framework, given the substantial implications for public health and
safety. The consumer durables industry is one of the sectors most
meaningfully affected by the coronavirus because of exposure to
discretionary spending.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if liquidity deteriorates, the company
adopts a more aggressive financial policy, operating performance
weakens, or if leverage increases. A significant drop in consumer
confidence or any material disruption in the housing market could
also lead to a downgrade. Debt to EBITDA sustained above 4.0x or
annual share repurchases in excess of free cash flow generation
could also lead to a downgrade.
Ratings could be upgraded if Tempur Sealy's operating performance
remains strong and leverage remains at a low level for a sustained
period. Specifically, ratings could be upgraded if debt to EBITDA
remains below 3.0x and the company generates consistently strong
free cash flow.
The principal methodology used in these ratings was Consumer
Durables Industry published in April 2017.
Tempur Sealy International Inc.'s develops, manufactures, markets
and sells bedding products, including mattresses, foundations and
adjustable bases, and other products such as pillows and
accessories. Revenue for the publicly-traded company approximates
$3.7 billion for the last-twelve-month period ended December 31,
2020.
TERMINIX COMPANY: Moody's Completes Review, Retains Ba2 CFR
-----------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of The Terminix Company, LLC and other ratings that are
associated with the same analytical unit. The review was conducted
through a portfolio review discussion held on February 24, 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
Terminix's Ba2 corporate family rating is supported by its strong
customer retention rates, strong free cash flow, and leading
position in the consumer and business pest control services market.
The rating is constrained by the limited potential for net customer
growth and the need to fund and integrate acquisitions to achieve
revenue growth.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
TRANS UNION: Moody's Completes Review, Retains Ba2 CFR
------------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Trans Union, LLC and other ratings that are associated
with the same analytical unit. The review was conducted through a
portfolio review discussion held on February 24, 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
Trans Union's Ba2 Corporate Family Rating is supported by its
leading US consumer credit bureau and other information and
software solutions, strong free cash flow and revenue from diverse
geographic and product sources. The rating is constrained by
pressure from the need to invest in technology and new products to
grow, limited flexibility from an all-secured debt capital
structure and potential for higher than anticipated financial
leverage if consumer finance market conditions decline.
The principal methodology used for this review was Business and
Consumer Service Industry published in October 2016.
TWITTER INC: $1.25BB Notes Issuance No Impact on Moody's Ba2 CFR
----------------------------------------------------------------
Moody's Investors Service said that Twitter, Inc.'s (Twitter, Ba2
stable) proposed issuance of $1.25 billion of senior unsecured
convertible notes due 2026, which will be used to pay off $954
million of senior unsecured convertible notes maturing in 2021 and
for general corporate purposes, is credit negative because it
increases leverage. The transaction has no affect on Twitter's Ba2
corporate family rating, Ba2 Senior Unsecured rating, or the stable
outlook because of Twitter's strong liquidity position and Moody's
expectation for declining gross leverage in 2022 after the company
completes its planned increased investments in 2021.
While the transaction further increases leverage above our
downgrade guidance of 3.5x, the company has a net cash liquidity
position, with pro forma cash and short-term investments near $7.8
billion as of December 31, 2020. Moody's expects free cash flow
generation of about $500 million to $700 million in 2021. Moody's
also expects adjusted gross leverage to remain elevated in 2021
near 4.5x as the company continues to re-invest in the business to
drive future growth but to decline in 2022 driven by revenue and
profitability growth.
Twitter had a strong fourth quarter with a 30.5% year over year
increase in advertising revenue, a company adjusted EBITDA margin
of 39.5% and a 26.3% increase in monetizable daily active users.
Twitter's 2021 guidance includes a significant increase in total
costs and expenses related to investments in infrastructure and
headcount, with a focus on engineering to increase development.
Increased investment into the business is expected to result in
depressed EBITDA margins in the short-term, but the company's
long-term target for EBITDA margins is 40-45%. Additionally,
Twitter announced plans to double its revenue and increase its
monetizable DAUs to 315 million by the end of 2023 by gaining
market share with performance ads, growing brand advertising, and
expanding products to small and medium sized businesses. The
company announced some new products and revenue streams, including
Super Follows, which is a profit sharing subscription model service
offering users the ability to charge followers for exclusive
content.
Twitter, Inc., with its headquarters in San Francisco, California,
is a social networking internet based mobile and desktop platform
that helps users discover and converse about what's happening in
the world right now. As of December 31, Twitter had 192 million
monetizable daily active users and is available in more than 40
languages around the world. The company generated approximately
$3.7 billion of revenue in 2020, roughly 86% of which was generated
through the company's Advertising Services segment.
UTZ QUALITY: Moody's Completes Review, Retains B1 CFR
-----------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of Utz Quality Foods, 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
Utz Quality Foods, LLC's B1 CFR is constrained by its relatively
small share of the large and attractive salty snack market, its
subnational footprint, and modest but growing segment
diversification. The Acquisition of Truco (On the Border snacks or
OTB) in December 2020 for $480 million will improve the company's
scale, profitability, cash generation, and market position, as well
as its product, channel and market diversification. These factors
are counterbalanced by the expectation that the company will
continue to look for acquisitions to grow its US footprint which
could temporarily elevate leverage and increase execution risk, as
well as that going forward it will pay annual dividends.
The principal methodology used for this review was Consumer
Packaged Goods Methodology published in February 2020.
VALARIS PLC: Court Confirms Debt-for-Equity Plan
------------------------------------------------
Judge Marvin Isgur has entered an order confirming the Plan of
Valaris PLC, et al., in it its entirety.
"Objection by Catherine Cranston overruled on the record. As stated
on the record, the exculpation provision in the plan is limited to
exculpations that are permitted by the in re 5th Circuit Pacific
Lumber opinion and that the Court is retaining exclusive
jurisdiction to apply that limitation and to determine the extent
of exculpations in light of the limitations that have been
announced on the record. As stated on the record, each of the
parties that are identified in the confirmation brief filed by the
Debtors, who have claimed to have opted-out as set forth in the
brief, have opted out and are now identified by the docket entry as
being opt-out parties by incorporation of their listing in the
brief and that objecting party Catherine Cranston also is an
opt-out party. Plan is confirmed on the record, order to be
entered," according to the minutes of the March 3 hearing.
The Plan is the product of good faith, arm's-length negotiations by
and among the Debtors, the Debtors' directors and officers, the
Consenting Creditors, the Ad Hoc Group, the DIP Lenders, the
Creditors Committee, each member of the Creditors Committee, and
their respective representatives and professionals.
With respect to Class 3 Credit Facility Claims totaling
$581,000,000:
* Each Non-Consenting Lender will receive to its pro rata share
of the RCF Base Treatment Pool (i.e. 22.980% of the New Valaris
Equity, subject to dilution).
* Each Consenting Base Treatment Lender shall receive its pro
rata share of (i) $96,053,482 in cash and (ii) shares of stock.
* Each New Money Participating Credit Facility Creditor shall
receive its Pro Rata share of: (i) 5.340% of the New Valaris
Equity, subject to dilution, (ii) 2.427% of the New Secured Notes
(and associated Participation Equity offered in the Rights
Offering), and (iii) $7,802,008 in cash.
With respect to senior notes:
* Holders of Class 4 Pride Bond Claims totaling $439,296,781
will each receive its pro rata share of 8.808% of the Senior Notes
Distributable Pool and an aggregate $1.25 million payment in cash.
* Holders of Class 5 Ensco International Bond Claims totaling
$114,229,894 will each receive its pro-rata share of 1.549% of the
Senior Notes Distributable Pool and an aggregate $1 million payment
in cash.
* Holders of Class 6 Jersey Bond Claims totaling $863,607,717
will each receive its pro-rata share of 20.204% of the Senior Notes
Distributable Pool.
* Holders of Class 7 Valaris Bond Claims totaling $3,123,087,570
will each receive its pro rata share of 36.834% of the Senior Notes
Distributable Pool Class 7 is impaired.
* Holders of Class 8 Legacy Rowan Bond Claims totaling
$2,178,878,109 will each receive its pro rata share of 32.605% of
the Senior Notes Distributable Pool and an aggregate $23.75 million
payment in cash.
"Senior Notes Distributable Pool" means (a) 38.980% of the New
Valaris Equity, subject to dilution on account of the Management
Incentive Plan, the Newbuild Equity Pool, and the New Warrants, as
applicable, and (b) 97.573% of the Subscription Rights.
Holders of Class 9 General Unsecured Claims will each receive
payment in full in cash within ninety days after the later of (i)
the Effective Date and (ii) the date such Allowed General Unsecured
Claim comes due under applicable law or in the ordinary course of
business in accordance with the terms and conditions of the
particular transaction, agreement, conduct, or judgment giving rise
to such Allowed General Unsecured Claim. Class 9 is impaired.
With respect to Class 10 Newbuild Claims, if the Shipyard votes in
favor of the Plan, the Shipyard shall receive the Newbuild Equity
Pool, $5 million in cash payable on or prior to the Effective Date,
and such other consideration as set forth in the Newbuild
Contracts, as amended and assumed pursuant to Article V hereof. If
it does not vote in favor of the Plan, the Shipyard shall receive
its Liquidation Recovery promptly after the date the Newbuild
Claims are Allowed, but in any event no later than 10 days after
such date. Class 10 is impaired.
The Debtors and New Valaris Holdco shall fund distributions under
the Plan, as applicable, with proceeds from the Rights Offering,
including those received from the issuance of the New Secured Notes
and the issuance of the New Valaris Equity; issuance of the New
Warrants; issuance of the New Valaris Equity; and any other Cash on
hand, including cash from operations.
Co-Counsel to the Debtors:
Matthew D. Cavenaugh
Kristhy M. Peguero
Genevieve Graham
JACKSON WALKER L.L.P.
1401 McKinney Street, Suite 1900
Houston, Texas 77010
Telephone: (713) 752-4200
Facsimile: (713) 752-4221
Email: mcavenaugh@jw.com
kpeguero@jw.com
ggraham@jw.com
Anup Sathy, P.C.
Ross M. Kwasteniet, P.C.
Spencer A. Winters
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, Illinois 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200\
Email: anup.sathy@kirkland.com
ross.kwasteniet@kirkland.com
spencer.winters@kirkland.com
A copy of the Order is available at https://bit.ly/3qlZDAa from
Stretto, the claims agent.
About Valaris PLC
Valaris plc (NYSE: VAL) provides offshore-drilling services. It is
an English limited company with its corporate headquarters located
at 110 Cannon St., London. On the Web: http://www.valaris.com/
On Aug. 19, 2020, Valaris and its affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 20-34114). The Debtors
had total assets of $13,038,900,000 and total liabilities of
$7,853,500,000 as of June 30, 2020.
The Debtors tapped Kirkland & Ellis LLP and Slaughter and May as
their bankruptcy counsel, Lazard as investment banker, and Alvarez
& Marsal North America LLC as their restructuring advisor. Stretto
is the claims agent, maintaining the page
http://cases.stretto.com/Valaris
Kramer Levin Naftalis & Frankel LLP and Akin Gump Strauss Hauer &
Feld LLP serve as legal advisors to the consenting noteholders
while Houlihan Lokey Inc. serves as their financial advisor.
W.R. GRACE: Moody's Puts Ba2 CFR Under Review for Downgrade
-----------------------------------------------------------
Moody's Investors Service placed W.R. Grace & Co.-Conn.'s Ba2
Corporate Family Rating, Ba2-PD Probability of Default Rating, Ba1
first lien senior secured credit facility and Ba3 senior unsecured
notes ratings on review for downgrade. The SGL-2 Speculative Grade
Liquidity rating is unchanged. The outlook has been changed to
ratings under review from stable.
"The review for downgrade follows the announced acquisition of
Albemarle's Fine Chemistry Services business that further stresses
credit metrics already weak for the existing rating category," said
Domenick R. Fumai, Moody's Vice President and lead analyst for W.R.
Grace & Co.-Conn.
On Review for Downgrade:
Issuer: W.R. Grace & Co.-Conn.
Corporate Family Rating, Placed on Review for Downgrade, currently
Ba2
Probability of Default Rating, Placed on Review for Downgrade,
currently Ba2-PD
Gtd Senior Secured Bank Credit Facility, Placed on Review for
Downgrade, currently Ba1 ( LGD2)
Backed Senior Unsecured Regular Bond/Debenture, Placed on Review
for Downgrade, currently Ba3 (LGD6)
Senior Unsecured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Ba3 ( LGD5)
Outlook Actions:
Issuer: W.R. Grace & Co.-Conn.
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE/ FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The review for downgrade reflects Moody's concerns that the
acquisition of Albemarle's Fine Chemistry Services (FCS) business
for $570 million will add further stress to credit metrics that
have exceeded the current threshold for the Ba2 rating. Grace's
absolute debt levels have remained elevated over the last several
years and a challenging macroeconomic environment in 2020 has
resulted in a weaker-than-expected credit profile. Grace's adjusted
Debt/EBITDA was 5.8x, interest coverage measured 4.0x and free cash
flow-to-debt (FCF/Debt) of 4.9% for the last twelve months ended
September 30, 2020.
While Moody's anticipates Grace's results will improve in FY 2021
as refinery utilization rates continue to recover, financial
performance in 2020 has underperformed expectations. The pandemic
has especially affected Refining Technologies, where FCC and HPC
sales sharply declined due to lower refining utilization rates and
deferred change-outs, while in Materials Technologies the coatings
and chemical processes sub-segments were also weak. Moreover,
Moody's views Grace's financial policies as more favorable towards
shareholders and with the involvement of an activist investor, 40
North, likely to maintain an aggressive financial policy.
Moody's review will focus on Grace's strategy to delever, including
the pace of absolute debt reduction, integration of the
acquisition, the company's plans regarding the preferred equity
issuance, future M&A strategy and adoption of a more balanced
financial policy including progress towards a successful
remediation with activist shareholder, 40 North, as the standstill
agreement expires at the end of March. It is unlikely that a
ratings downgrade will exceed two notches.
Grace will fund the acquisition with a combination of up to $300
million in an incremental term loan and a $270 million
non-participating preferred equity issued out of new subsidiary
that will have no payment for the first two years and 12%
payment-in-kind (PIK) dividend thereafter. The acquisition is
expected to add about $160 million in revenue and $60 million in
EBITDA in FY 2021 on a full-year run rate basis and represents a
9.5x EV/EBITDA multiple. Moody's estimates FY 2020 pro forma
adjusted leverage will be roughly mid-6x. FCS manufactures
high-value regulatory starting materials (RSMs), intermediates and
active pharmaceutical ingredients (APIs) and agrichemicals. Moody's
believes this complements Grace's existing pharma portfolio;
however, the acquisition also introduces integration risk. Grace is
already a leading supplier of silica materials and fine chemicals
and this transaction expands its presence in Pharma & Consumer,
which is less cyclical than its Catalysts Technologies segment, to
more than half of Materials Technologies' revenue. Moreover, the
acquisition reduces its dependence on FCC/HPC sales that are tied
to the refinery industry and face longer-term structural
challenges.
Grace's rating is supported by strong market positions in several
key end markets, significant R&D capabilities and favorable
industry prospects due to increased global environmental
regulations and policies, a focus on sustainability initiatives, as
well as positive demographic trends. Grace's business profile
further benefits from high barriers to entry, a good operating
track record with attractive EBITDA margins, and the ability to
generate free cash flow through economic cycles compared to a
number of comparably rated peers in the chemical industry.
The rating is tempered by expectations that leverage will remain
elevated for the rating category. Grace's rating is further
constrained by financial policies that include a willingness to
incur debt to fund strategic acquisitions and prioritize
shareholder-friendly activity. The rating also incorporates modest
business diversity with a significant emphasis on catalysts.
The SGL-2 Speculative Grade Liquidity rating indicates good
liquidity to support operations in the near term, including
approximately $306 million of balance sheet cash and cash
equivalents and about $392 million of availability under its $400
million revolving credit facility and about $40 million of
availability under foreign credit facilities as of December 31,
2020.
An upgrade is unlikely at this time, but Moody's could upgrade the
rating with expectations for adjusted financial leverage sustained
near 3.0x (Debt/EBITDA), interest coverage sustained above 6.0x
(EBITDA/Interest), retained cash flow-to-debt sustained above 15%
(RCF/Debt) and more balanced financial policies towards debt
reduction. An upgrade would also assume a reduction in event risk
such that the size of future acquisitions would not raise pro forma
leverage meaningfully above 4.0x.
Moody's could downgrade the rating with expectations for adjusted
financial leverage sustained above 4.0x, interest coverage below
4.0x, or retained cash flow to debt sustained below 10%,a
significant deterioration in the company's liquidity position or a
change in financial policies, including a large debt-financed
acquisition, could also have negative rating implications.
Headquartered in Columbia, MD., W.R. Grace & Co. is the ultimate
parent of W.R. Grace & Co. -- Conn. Grace manufactures specialty
chemicals and materials operating and/or selling in over 70
countries. The company has two reporting segments: Catalysts
Technologies and Materials Technologies. Catalysts Technologies is
a globally diversified business that includes refining, polyolefin
and chemicals catalysts. Materials Technologies includes specialty
materials such as silica-based and silica-alumina-based materials
used in consumer/pharmaceutical, chemical processes and coatings
applications. Grace generated approximately $1.73 billion of sales
for the year ended December 31, 2020.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
WASHINGTON PRIME: Preps for Chapter 11 Bankruptcy Filing
--------------------------------------------------------
Bloomberg reported that Washington Prime Group is preparing to
potentially file for Chapter 11 bankruptcy protection, with time
running thin before the company defaults after it skipped an
interest payment on its debt.
In February 2021, Washington Prime missed a $23 million interest
payment and said it would be entering a 30-day grace period to
continue negotiations with lenders.
But those talks have since been faltering, Bloomberg reported,
citing conversations with people familiar with the matter. Still,
the plan to pursue bankruptcy could change, Bloomberg said, if
Washington Prime is able to make progress with its lenders or if
its grace period is extended.
CNBC notes that Washington Prime currently operates about 100 malls
across the country, a number of which are considered B- and
C-rated, meaning they bring in fewer sales per square foot than an
A-rated asset. Those properties have been under even more pressure
during the Covid pandemic, with fewer people venturing out of the
house to shop. When they do, they’re likely opting for open-air
shopping centers over enclosed malls.
And with a number of retail, restaurant and entertainment tenants
requesting rent relief or shuttering more locations, mall owners
have struggled to meet their own obligations. That stress has
already pushed some over the edge and into bankruptcy.
Last November, two other mall owners, CBL and Pennsylvania Real
Estate Investment Trust, filed for Chapter 11 bankruptcy
protection. The latter has since emerged.
About Washington Prime Group
Columbus, Ohio-based Washington Prime Group Inc. (NYSE: WPG) is a
retail REIT that owns a mix of enclosed malls and open-air
community centers across the United States. Gross assets totaled
$7.7 billion including pro-rata share of JVs as of 2Q20.
The real estate investment trust, based in Columbus, Ohio, was
formed in May 2014 following a spinoff from the biggest U.S. mall
owner, Simon Property Group. It went on to grow its portfolio of
shopping malls when it acquired Glimcher Realty Trust, in January
2015. Washington Prime currently operates about 100 malls across
the country.
* * *
Washington Prime Group, L.P., the operating partnership of
Washington Prime Group Inc., said in a regulatory filing that on
Feb. 15, 2021, it elected to withhold an interest payment of $23.2
million due on Feb. 15, 2021, with respect to WPG L.P.'s
outstanding Senior Notes due 2024.
WPG L.P. has engaged Kirkland & Ellis LLP as legal counsel and
Guggenheim Securities, LLC as investment banker to assist the
Company and its subsidiaries with respect to their continuing
discussions with certain counterparties as well as other lenders
within the Company's capital structure.
WATERSHED HOLDINGS: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------
The U.S. Trustee for Region 18 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Watershed Holdings, LLC.
About Watershed Holdings
Watershed Holdings, LLC is the owner of fee simple title to three
real properties in Seattle, Washington, having a total comparable
sale value of $6 million.
Watershed Holdings sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Wash. Case No. 21-10235) on Feb. 3,
2021. At the time of the filing, the Debtor disclosed $6,000,331
in assets and $7,076,083 in liabilities.
Judge Timothy W. Dore oversees the case. Larry B. Feinstein, PS is
the Debtor's legal counsel.
WEI SALES: Moody's Completes Review, Retains B1 CFR
---------------------------------------------------
Moody's Investors Service has completed a periodic review of the
ratings of WEI Sales 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
WEI Sales LLC's B1 CFR reflects its participation in the low growth
and highly competitive ice cream industry as well as modest scale
relative to the two global ice cream market leaders, Nestlé and
Unilever. The rating is also constrained by high financial
leverage, aggressive shareholder distributions, execution risk of
several recent acquisitions, and low margins and free cash flow.
The rating is supported by the company's strong position in the
private label ice cream category, good diversification across
novelty and packaged ice cream, and a private family ownership that
supports reinvestment.
The principal methodology used for this review was Consumer
Packaged Goods Methodology published in February 2020.
WORLD OF DANCE: Trustee Seeks to Hire Business Valuation Expert
---------------------------------------------------------------
Mark M. Sharf, Subchapter V Trustee of World of Dance Tour Inc.
seeks approval from the U.S. Bankruptcy Court for the Central
District of California to retain Schenk Group, Inc., a business
valuation expert.
The firm will be valuing the assets of the Debtor's business --
both on a liquidation basis and a going concern basis.
The firm has estimated that the services are likely to result in an
invoice of between $15,000 and $25,000.
Steven Schenk, founder and managing director of Schenk Group,
assures the court that neither the firm nor any person comprising
or employed by it has any interest adverse to the Estate, and all
are disinterested persons as defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Steven Schenk
Schenk Group, Inc.
Phone: (619) 851-7011
About World of Dance Tour Inc.
World of Dance Tour Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 20-12963) on Oct. 23,
2020. At the time of the filing, the Debtor disclosed assets of
between $500,001 and $1 million and liabilities of the same range.
Judge Theodor Albert oversees the case.
Stradling Yocca Carlson & Rauth and Kahana & Feld LLP serve as the
Debtor's bankruptcy counsel and special counsel, respectively.
[*] Bankruptcy Cases in Hawaii Declined Again Despite Pandemic
--------------------------------------------------------------
Dave Segal of Star Advertiser reports that Hawaii bankruptcy cases
plunge again despite COVID-19.
Nearly a year ago,2020, with COVID-19 cases surging nationwide,
Honolulu bankruptcy attorney Greg Dunn forewarned that Hawaii
should brace itself for "the mother of all recessions."
This first week of March 2021, Mr. Dunn said he's going to get out
of the prediction business.
Statewide bankruptcies in February 2021 fell below 100 for the
second month in a row and plunged 32.4% from the same time in 2020,
according to new data released by the U.S. Bankruptcy Court,
District of Hawaii. There were only 92 cases last month, compared
with 136 in February 2020. In January 2021, there were just 91
filings. The last time bankruptcy cases dropped below 100 prior to
this year was in 2017 when there were three months when filings
were in the 90s.
"It's difficult to say what's going to happen the rest of 2021,
because I thought last year would be the 'mother of all
recessions,'" Mr. Dunn said. "I was wrong and that's fine, and I
don't want to predict again what's going to happen. I'm not making
any predictions this year."
Mr. Dunn said that in April 2020 when he made the prediction, he
didn't factor in the abundance of financial aid.
"I didn't know that the government would provide so much financial
support for people, and so it didn't work out the way I predicted,"
he said. "So in a way it's good that people didn’t have to file
for bankruptcy. But the debt still accumulated, and the creditors
gave people a break and didn't pursue people that much. There was
a foreclosure moratorium and a rental moratorium to keep the
creditors off the people's backs. We don't know how far it's going
to go this year. I think they're still going to provide
substantial support for people, but I don't know how much. So that
may definitely play a part on how bankruptcies go this year."
Dunn said despite financial stimulus, unemployment compensation and
payment deferrals, there are many people still struggling.
"I still see the same problems," he said. "People aren't making
that much money these days. A lot of them are underemployed or
unemployed, and they haven't been able to get as much money as they
need from the government. So these people have to turn to
bankruptcy if they're working and trying to protect their checks
from getting garnished."
In February 2021, Chapter 7 liquidation filings - the most common
type of bankruptcy — fell 28.4% to 63 from 88 in the year-earlier
period.
Chapter 13 filings, which allow individuals with regular sources of
income to set up plans to make installment payments to creditors
over three to five years, plunged 56.3% to 21 from 48.
There were eight Chapter 11 filings last February 2021 — compared
with none a year earlier — which all came from Pacific Links US
Holdings Inc. and seven affiliates. Chapter 11 filings are
primarily for business reorganization.
The affiliates collectively owned 644 acres of development property
in Makaha Valley and - with help from golf legend Tiger Woods - was
trying to establish a new resort in Makaha Valley as part of a
joint venture with local real estate developer Stanford Carr.
But the company, which has leadership ties to China and a Canadian
parent that sells memberships for play at over 500 participating
golf courses worldwide to customers largely in China, said it
experienced geopolitical troubles in recent years getting money out
of China to realize its plan for Makaha Valley.
Then the coronavirus pandemic hit last 2020 and exacerbated
difficulties for parent Pacific Links International.
Two foreclosure lawsuits involving Makaha Valley were pending
against Pacific Links US when it filed bankruptcy in Honolulu.
Around the state, bankruptcies fell in two of the four major
counties last February 2021. Honolulu County filings decreased to
69 from 99, and Hawaii County filings declined to three from 22.
Maui County filings rose to 15 from 12, and Kauai County filings
edged up to five from three.
*********
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then-ending.
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*********
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Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9474.
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