/raid1/www/Hosts/bankrupt/TCR_Public/210412.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, April 12, 2021, Vol. 25, No. 101
Headlines
1769 LLC: Court Approves Disclosures and Confirms Plan
3P HIGHTSTOWN: Case Summary & 4 Unsecured Creditors
41-23 HAIGHT: Court Approves Disclosure Statement
53 STANHOPE: Says Mortgagee's Plan Trying to Delay Property Sale
58 BRUCE AVENUE: Gary Dove Buying 2 Yonkers Properties for $2.12M
ABB/CON-CISE OPTICAL: Moody's Alters Outlook on Caa1 CFR to Pos.
ADVANTAGE SPORTS: Selling Carrollton Property for $9.2 Million
ADVANZEON SOLUTIONS: Seeks August 3 Plan Exclusivity Extension
AEROCENTURY CORP: April 12 Deadline Set for Panel Questionnaires
AEROCENTURY CORP: April 26 Hearing on Bid Procedures for All Assets
AEROCENTURY CORP: Sets Bid Procedures for Substantially All Assets
AGEMY FAMILY: Court Extends Plan Exclusivity Until May 21
AIR METHODS: Moody's Hikes CFR to B3 & Rates Amended Revolver B2
AIR TRANSPORT: S&P Upgrades ICR to 'BB+', Outlook Stable
ALLEN SUPPLY: Asks Court to Extend Plan Exclusivity Thru July 13
ARNOLD BAKER: Proposes Auction Sale of Interests in Baker Ready Mix
ASTROTECH CORP: Raj Mellacheruvu to Resign as VP, COO
AXIA REALTY: Wants Solicitation Exclusivity Extended Thru June 23
BAUMANN & SONS: Unsecureds to Recover At Least 30% Under Plan
BAY HARBOR: Lincoln Buying 2014 Mercedes-Benz E350 for $17K Cash
BIG KAT: Seeks to Hire Nima Taherian as Legal Counsel
BLACKTOP INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
BLOOMIN' BRANDS: S&P Alters Outlook to Stable, Affirms 'B+' ICR
BLUE STAR: Unit Signs $5M Loan Agreement With Lighthouse Financial
BMSL MANAGEMENT: Claims Will be Paid from Property Sale/Refinance
BOMBARDIER INC: S&P Affirms 'CCC+' ICR on Earnings Recovery Plan
BOUCHARD TRANSPORTATION: Committee Taps Clyde & Co as Counsel
CAJUN COMPANY: Gets OK to Hire Darnall Sikes as Accountant
CAJUN COMPANY: Gets OK to Hire H. Kent Aguillard as Legal Counsel
CAJUN COMPANY: Gets OK to Hire Neuner Pate as Special Counsel
CAJUN COMPANY: Gets OK to Hire Steve Gardes as Financial Consultant
CALLAWAY GOLF: S&P Cuts ICR to 'B' on Completion of Topgolf Merger
CANADIAN RIVER: Case Summary & 7 Unsecured Creditors
CAPITOL FLEET: Seeks to Hire Jones & Walden as Legal Counsel
CARBONLITE HOLDINGS: Court Approves Chapter 11 Financing
CARBONLITE HOLDINGS: PA Debtors' DIP Loan Okayed
CARLSON TRAVEL: S&P Assigns 'CCC' ICR, Outlook Negative
CASTEX ENERGY: Seeks to Hire Thompson & Knight as Special Counsel
CENTURY ALUMINUM: Launches Cash Tender Offer for 12.0% Senior Notes
CENTURY ALUMINUM: Plans to Offer Secured Notes, Convertible Notes
CHINOOK THERAPEUTICS: Widens Net Loss to $81.6 Million in 2020
CLEANSPARK INC: Buys Crypto Mining Equipment for $7.2 Million
CNX MIDSTREAM: S&P Alters Outlook to Positive, Affirms 'B+' ICR
COLLAB9 LLC: Seeks to Hire SulmeyerKupetz as Bankruptcy Counsel
COLLECTED GROUP: April 13 Deadline Set for Panel Questionnaires
COLLECTED GROUP: May 25 Plan & Disclosure Hearing Set
COMMAND ENERGY: Trustee Selling CESI/LLC Pipe to Garvey for $250K
CONCISE INC: May 26 Disclosure Statement Hearing Set
CORECIVIC INC: S&P Rates New $400MM Senior Unsecured Notes 'BB-'
CRAVE BRANDS: Voluntary Chapter 11 Case Summary
CSL CAPITAL: S&P Assigns 'B' Rating on New $570MM Sr. Secured Notes
DEI HOLDINGS: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable
DESOTO OWNERS: HFS Says Disclosure Inadequate
DIAMOND OFFSHORE: Court Okays $2B Plan After Axing Compromise
DIGIPATH INC: Board Approves Revised Compensation Arrangements
DISCOVERY DAY: Solicitation Exclusivity Extended Until April 20
DOWN TOWN ASSOCIATION: Gets OK to Hire PFK O'Conner as Accountant
EARTH FARE: Unsec. Creditors to Receive Nothing in Liquidating Plan
EVEN STEVENS: Asks Accelerated Hearing on Bid Procedures for Equity
EVEN STEVENS: Sets Bidding Procedures for Sale of 92% Equity
FERRELLGAS LP: Moody's Hikes CFR to B2 & Alters Outlook to Stable
FIGUEROA MOUNTAIN: Creekstone Buying All Assets for $7.75 Million
FIGUEROA MOUNTAIN: Seeks to Extend Reply Date to Assets Sale
FIRST TO THE FINISH: Seeks May 5 Plan Exclusivity Extension
FORESTAR GROUP: Moody's Rates New $400MM Unsecured Notes 'B1'
FORESTAR GROUP: S&P Rates New $400MM Senior Unsecured Notes 'B+'
FORTRESS TRANSPORTATION: S&P Rates $500MM Sr. Unsecured Notes 'B'
FREE FLOW: Swings to $850,610 Net Profit in 2020
GALICIAPOKE LLC: $27K Sale of Orlando Personal Property to SEL OK'd
GARRETT MOTION: Wins April 18 Plan Exclusivity Extension
GENEVA VILLAGE: Seeks to Hire Anthony J. DeGirolamo as Counsel
GENTIVA HEALTH: S&P Raises ICR to 'B+', Outlook Stable
GIA REDEVELOPMENT: Seeks to Hire Robert S. Altagen as Legal Counsel
GLENROY COACHELLA: Seeks to Hire Grobstein Teeple as Accountant
GOGO INC: Moody's Raises CFR to B3 & Alters Outlook to Stable
GREENSILL CAPITAL: April 23 Auction of 100% Interest in Finacity
GREENSILL CAPITAL: Sets Bid Procedures for Interest in Finacity
GROM SOCIAL: To Acquire Content Creator Curiosity Ink Media
GUDORF SUPPLY: Seeks to Hire Richey Mills as Financial Advisor
H&S EXPRESS: Court Approves Disclosure Statement
H. EDWARD PARIS DDS: Case Summary & 6 Unsecured Creditors
HANKEY O'ROURKE: Unsecured Creditors to Get At Least $3K in Plan
HAWAIIAN HOLDINGS: S&P Alters Outlook to Pos., Affirms 'CCC+' ICR
HERTZ CORPORATION: Willkie, Young 3rd Update on Noteholder Group
HIGHPOINT RESOURCES: Hires AlixPartners as Financial Advisor
HIGHPOINT RESOURCES: Hires Kirkland & Ellis as Legal Counsel
HIGHPOINT RESOURCES: Hires Perella Weinberg as Investment Banker
HIGHPOINT RESOURCES: Seeks to Hire Klehr Harrison as Co-Counsel
HIGHTOWER HOLDING: Moody's Assigns B3 CFR on Growing Franchise
HIGHTOWER HOLDING: S&P Assigns 'B-' ICR, Outlook Stable
HOVENSA LLC: EPA Asks Court to Shift Emissions Deal to New Owner
HUSCH & HUSCH: Fine-Tunes Plan; Updates Properties for Sale
IHEARTMEDIA INC: S&P Affirms 'B' ICR, Outlook Stays Negative
IMAGEWARE SYSTEMS: Incurs $7.2 Million Net Loss in 2020
IXS HOLDINGS: S&P Affirms 'B' Issuer Credit Rating, Outlook Neg.
JAGUAR HEALTH: Amends Equity Purchase Agreement With Oasis Capital
JAGUAR HEALTH: Promotes Carol Lizak as Chief Financial Officer
JB HOLDINGS: Sets Bidding Procedures for Hobe Sound Property
JELD-WEN INC: Moody's Affirms Ba3 CFR & Alters Outlook to Stable
JFAL HOLDING: Case Summary & 20 Largest Unsecured Creditors
KLAUSNER LUMBER: Florida Sawmills Says Disclosures Deficient
LANNETT INC: S&P Affirms 'B-' ICR on Refinancing, Outlook Negative
LIQUIDNET HOLDINGS: S&P Withdraws 'BB-' Issuer Credit Rating
MADDOX FOUNDRY: June 3 Disclosure Statement Hearing Set
MANSIONS APARTMENT: Says Disclosures Failed to Describe Properties
MAX FINE FURNITURE: PWB Seeks to Delay Plan Hearing to Late May
MCCLATCHY CO: Ex-Couriers and Bankruptcy Trust Reach $22-Mil. Deal
MEATHEAD RESTAURANTS: Voluntary Chapter 11 Case Summary
MEGIDO SERVICE: Wants Until July 18 to Confirm Plan
N-ABLE LLC: Moody's Assigns B1 CFR Following Planned Spin-off
N-ABLE LLC: S&P Assigns 'B+' ICR on Spin-Off from SolarWinds
NATIONAL RIFLE ASSOCIATION: LaPierre Consulted Execs. on Filing
NATIONAL RIFLE ASSOCIATION: Seeks CRO to Suggest Reforms
NEW SEASONG: Amends Plan; Monthly Rental Hiked to $1,800
NEWELL MOWING: Subchapter V Plan to Pay Unsecureds 59.5% of Claims
NEWS CORP: Moody's Assigns Ba1 CFR on Planned Acquisition
NEWS CORP: S&P Assigns 'BB+' Issuer Credit Rating, Outlook Stable
NTH SOLUTIONS: Seeks to Hire Maschmeyer Karalis as Legal Counsel
OECONNECTION LLC: S&P Affirms 'B-' ICR on Debt-Funded Acquisition
OLEMA PHARMACEUTICALS: Dr. Frank McCormick Quits as Director
OLEMA PHARMACEUTICALS: Reports $24 Million Net Loss for 2020
OLIN CORP: S&P Upgrades ICR to 'BB', Outlook Stable
OMNIQ CORP: Gets $1.1M Purchase Order for Data Collection Solutions
OUTFRONT MEDIA: S&P Affirms 'B+' ICR, Outlook Negative
PACIFIC DENTAL: S&P Assigns 'B' ICR on Debt Refinancing
PATRICIAN HOTEL: Wants Plan Exclusivity Extended Thru May 31
PAVEROCK INC: Seeks to Extend Plan Exclusivity Thru May 31
PEAKS FITNESS: Hires Mac Restructuring as Financial Consultant
PENINSULA PACIFIC: S&P Assigns 'B-' ICR, Outlook Positive
POWELL 512: Unsec. Creditors to Get Share of Income in 5 Years
PROFESSIONAL FINANCIAL: Affiliate Seeks to Hire Real Estate Agent
PROJECT BOOST: S&P Affirms 'B-' Long-Term ICR, Outlook Negative
PURDUE PHARMA: Asks Court for Another Month Opioid Suits Reprieve
PYRAMID MANAGEMENT: Destiny USA Explores Debt Restructuring
QUIKRETE HOLDINGS: Moody's Rates Incremental Secured Loan 'Ba3'
QUIKRETE HOLDINGS: S&P Affirms 'BB-' ICR, Outlook Stable
RADNET MANAGEMENT: S&P Assigns 'B' Rating on Senior Secured Debt
RANDAL L. LOEHRKE: $170K Sale of 40-Acre Saxeville Property Okayed
RHINO BARE: Canico Capital Says Plan Legally Flawed
RIOT BLOCKCHAIN: Signs $651 Million Deal to Acquire Whinstone US
ROLLING HILLS: Case Summary & 7 Unsecured Creditors
S & A RETAIL: Geox Shoes Seller Hits Chapter 11 Bankruptcy
S-EVERGREEN HOLDING: S&P Assigns 'B' ICR, Outlook Stable
SAHAR P. MONTALVO: Snyders Buying Fishers Property for $1.35M
SAVE ON COST: Says Covid-19 Impacts Ability to Refinance Debt
SCIH SALT: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
SEG HOLDING: S&P Upgrades ICR to 'B+' on Better Performance
SHD LLC: To Seek Confirmation of Plan on May 6
SHILO INN IDAHO: Plan Exclusivity Extended Thru May 31
SOUND UNITED: Moody's Assigns 'B2' CFR & Rates New $380MM Loan 'B2'
STATION CASINOS: Moody's Affirms B2 CFR & Alters Outlook to Stable
STEIN MART: Ch.11 Plan Okayed After Deal to Fix Litigation Releases
STEPHENS FARMS: Creditor Rabo AgriFinance Files Liquidating Plan
STERN HOLDINGS: Seeks to Hire Abbasi Law Corp. as Legal Counsel
STONEMOR INC: Units Complete $6.2M Sale of Assets to Clearstone
SUNCOKE ENERGY: Moody's Affirms B1 CFR & Alters Outlook to Stable
TD HOLDINGS: Delays Filing of 2020 Annual Report
TECT AEROSPACE: April 15 Deadline Set for Panel Questionnaires
THREESQUARE LLC: US Trustee Opposes Amended Disclosures
TI FLUID: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
TIDEWATER ESTATES: Selling 20-Acre Hancock County Property for $84K
TIDEWATER ESTATES: Selling 20-Acre Hancock County Property for $84K
TIDEWATER ESTATES: Selling 20-Acre Hancock County Property for $86K
TITAN INTERNATIONAL: S&P Upgrades ICR to 'B-', Outlook Stable
TMS INTERNATIONAL: S&P Rates New $300MM Sr. Unsecured Notes 'B'
TOPGOLF INTERNATIONAL: S&P Upgrades ICR to 'B-', Outlook Negative
TOUCHPOINT GROUP: Incurs $3.5 Million Net Loss in 2020
TRADER CORP: S&P Affirms 'B' ICR, Outlook Negative
TRANSPINE INC: Seeks to Hire Kelley Semmel as Special Counsel
TRI POINTE: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
TROPHY HOSPITALITY: Case Summary & 9 Unsecured Creditors
TUMBLEWEED TINY HOUSE: Seeks June 8 Plan Exclusivity Extension
U.S. STEEL: Moody's Hikes Corp. Family Rating to B3
U.S.A. PARTS: $750K Sale of Kearneysville Property Held in Abeyance
VICI PROPERTIES: S&P Alters Outlook to Positive, Affirms 'BB' ICR
VYANT BIO: Completes Merger With StemoniX
WC CUSTER CREEK: Court Conditionally Approves Disclosure Statement
WCOP INC: Case Summary & 3 Unsecured Creditors
WESTERN ROBIDOUX: Sale of Customer Lists to Pittman Approved
YOUNG MEN'S: Seeks Approval to Hire Glenn Haley as CEO
YOUNGEVITY INTERNATIONAL: Delays Filing of 2020 Annual Report
[^] BOND PRICING: For the Week from April 5 to 9, 2021
*********
1769 LLC: Court Approves Disclosures and Confirms Plan
------------------------------------------------------
Judge Nancy Hershey Lord has entered an order approving on the
final basis the Disclosure Statement of 1769 LLC and confirming its
Plan.
The Plan is being implemented through the sale of the Property to
the Purchaser (if the Purchaser closes), pursuant to the Sale
Contract, under which the Property shall be transferred and
conveyed to the Purchaser free and clear of all claims, liens, and
non-permitted encumbrances, which shall attach to the sale proceeds
in their order of priority. Notwithstanding the foregoing, the sale
of the Property is subject to the commercial tenancy of Santander
Bank.
Any Liens held against the Property by any creditor of the Debtor
shall be released at a closing on the sale in consideration for
payment thereof, consistent with the Plan and this Order.
The assumption of the Sale Contract and the transfer and conveyance
of the Property to the Purchaser at Closing is hereby approved .
As stated on the record at the Confirmation Hearing, the terms and
conditions of the resolution reached between the Lender and the
Debtor with respect to the Lender Claim are as follows:
* The mortgage encumbering a property owned by non-debtor 8802
LLC (the "8802 Mortgage") will be paid down 40% of principal amount
plus pro rata share of exit fee at Closing. The amounts to be paid
at Closing, some of which constitutes surplus (not including legal
fees, the interest escrow and tax escrow referred to below), will
in sum be $11,288,932 (including all principal, accrued interest at
the non-default rate, and other agreed costs and expenses,
including a payment equal to forty (40%) percent of the 8802
Mortgage), and the net sum of such amount will be equal to
$10,752,400 after application of various credits due to the
Debtor.
* Legal fees of the Lender will be paid at Closing in the
amount of $137,500. Default interest and late fees for 1769 LLC
will be waived.
* The maturity date for the 8802 Mortgage will be extended to
September 15, 2021 (the "Extension Period").
* The 8802 Mortgage will be brought current at Closing, and
funds in the amount of $130,747 to cover full accrual of
non-default rate interest for the Extension Period will be paid
over to Wells Fargo in escrow, subject to true-up at the end of the
Extension Period based on changes in interest rate at final payoff
of the 8802 Mortgage.
* At Closing, the full tax escrow for the Extension Period in
the amount of $61,511 will be paid over to Wells Fargo.
* For the avoidance of doubt, the total net payment to Lender
at Closing will be $11,082,158.
* Lender will provide an assignment of the Loan at no
additional cost to the Buyer's lender.
* Default interest for the 8802 Mortgage in the amount of
$327,878 will be due and payable on Sept. 15, 2021, which shall be
waived by the Lender in the event of full payment of the 8802
Mortgage at or prior to the end of the Extension Period.
* At Closing, Lender and 8802 LLC shall execute an amendment of
the 8802 Mortgage consistent with this Paragraph 23 (the "8802
Amendment"). Except as set forth in the 8802 Amendment, all 8802
Mortgage documents will remain in full force and effect.
* The I Drive lease for 8802 LLC is terminated.
About 1769 LLC
1769 LLC is a Single Asset Real Estate debtor (as defined in 11
U.S.C. Section 101(51B)). It owns a commercial property located at
1769 86th Street, Brooklyn, New York.
1769 LLC filed a voluntary petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-43646) on Oct. 19,
2020. The petition was signed by Tim Ziss, member. At the time of
the filing, the Debtor disclosed $10 million to $50 million in
assets and $1 million to $10 million in liabilities. Judge
Elizabeth S. Stong oversees the case. Goldberg Weprin Finkel
Goldstein LLP serves as the Debtor's counsel.
3P HIGHTSTOWN: Case Summary & 4 Unsecured Creditors
---------------------------------------------------
Debtor: 3P Hightstown, LLC
4 Essex Avenue, Suite 202
Bernardsville, NJ 07924
Business Description: 3P Hightstown, LLC directly owns 40%
interest in 3PRC, LLC, which owns real
property located in the Borough of
Hightstown, Counter of Mercer, State of New
Jersey identified as Block 8, Lot 12, Block
21, Lots 1-14, 20, 26, Block 30, Lots1-7 and
10-12 and part of 13, together with the
improvements thereon with an approximate
value of $20,000,000, less approximately
$6,000,000 in secured claims against that
property, totaling $14,000,000.
Chapter 11 Petition Date: April 9, 2021
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 21-12957
Debtor's Counsel: Melinda D. Middlebrooks, Esq.
MIDDLEBROOKS SHAPIRO, P.C.
841 Mountain Avenue
First Floor
Springfield, NJ 07081
Tel: (973) 218-6877
Fax: (973) 218-6878
E-mail: middlebrooks@middlebrooksshapiro.com
Debtor's
Special
Counsel: PROFESSIONAL HEROLD LAW, P.A.
Total Assets: $11,200,000
Estimated Liabilities: $0
The petition was signed by Christopher J. Otteau, sole member, 3P
Equity Capital Advisors, LLC.
A copy of the petition containing, among other items, a list of the
Debtor's four unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YP67XAI/3P_Hightstown_LLC__njbke-21-12957__0001.0.pdf?mcid=tGE4TAMA
41-23 HAIGHT: Court Approves Disclosure Statement
-------------------------------------------------
Judge Nancy Hershey Lord has entered an order approving the
Disclosure Statement accompanying the Amended Chapter 11 Plan of
41-23 Haight Realty Inc., a/k/a 41-23 Haight Street Realty, Inc.
A telephonic hearing to consider confirmation of the Amended Plan
will be held before the Honorable Nancy Hershey Lord, United States
Bankruptcy Judge, on May 25, 2021, at 2:30 p.m., at the United
States Bankruptcy Court for the Eastern District of New York
pursuant to the instructions for telephonic hearings.
Any objections to the Amended Plan must be filed and served so as
to be received by May 18, 2021, by 5:00 p.m.
In order to be counted, Ballots must be completed, signed and
received no later than May 18, 2021, by 5:00 p.m.
The Trustee must file a Certification of Ballots in preparation for
the Confirmation Hearing on or before May 20, 2021 by 5:00 p.m.
About 41-23 Haight Street Realty
41-23 Haight Street Realty, Inc. is a single asset real estate (as
defined in 11 U.S.C. Section 101(51B).
On June 4, 2019, an involuntary Chapter 11 petition (Bankr.
E.D.N.Y. Case No. 19-43441) was filed against 41-23 Haight Street
Realty, Inc. by petitioning creditors, Wen Mei Wang, Xian Kang
Zhang, and Yu Qing Wang. Judge Nancy Hershey Lord oversees the
case.
Victor Tsai, Esq., is Debtor's legal counsel.
On Aug. 12, 2019, the court appointed Gregory Messer as Chapter 11
trustee for Debtor's estate. The trustee is represented by
LaMonica Herbst & Maniscalco, LLP.
On July 17, 2020, the Office of the U.S. Trustee appointed a
committee of unsecured creditors. Gleichenhaus, Marchese &
Weishaar, PC serves as the committee's legal counsel.
53 STANHOPE: Says Mortgagee's Plan Trying to Delay Property Sale
----------------------------------------------------------------
53 Stanhope LLC, and its Debtor Affiliates object to the Disclosure
Statement with respect to a Chapter 11 Plan filed by Brooklyn
Lender, LLC ("Mortgagee"):
* The Debtors' Plans provide for prompt plan consummation and
preserve the value of the Debtors' Properties for all parties in
interest.
* Consummation of the Mortgagee's Plan is contingent upon a
final order expunging the Israeli investor claims and an overall
reduction in general unsecured creditor claims to $300,000 which is
unlikely to occur in the foreseeable future, if ever.
* Delaying consummation indirectly denies the Debtors the
benefit of the Court's finding that the defaults asserted by the
Mortgagee were not grounds for acceleration, because the extended
accrual of 24% interest will still result in forfeiture despite the
improper acceleration.
* The Mortgagee's Plan delays a sale of the Property
indefinitely during which the market may decline and or claims
against the estate grow. In that event, the Mortgagee's Plan may
fail to go effective altogether and the Debtors' estates depleted
without cost, accountability or recourse. No liquidation analysis
is included that would disclose these risks.
* The Mortgagee's Plan appears to be part of a delay strategy
that will cause a forfeiture to the Mortgagee. That would follow
the Mortgagee's conduct since acquiring the loans to call
non-material defaults, forcing the Debtors into bankruptcy and then
making a trustee motion despite payment of debt service and a
pending plan of reorganization with funding to support
confirmation.
A full-text copy of the Debtors' objection dated April 6, 2021, is
available at https://bit.ly/3dJR65u from PacerMonitor.com at no
charge.
Attorneys for the Debtors:
BACKENROTH FRANKEL & KRINSKY, LLP
Mark A. Frankel
800 Third Avenue
New York, New York 10022
(212) 593-1100
About 53 Stanhope LLC
53 Stanhope LLC and 17 affiliates are primarily engaged in renting
and leasing real estate properties.
53 Stanhope LLC and its affiliates filed voluntary petitions
seeking relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 19-23013) on May 20, 2019. The petitions
were signed by David Goldwasser, authorized signatory of GC Realty
Advisors.
Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky, LLP,
represents the Debtors.
Each of the Debtors is an affiliate of 73 Empire Development LLC,
which sought bankruptcy protection (Bankr. S.D.N.Y. Case No. 19
22285) on Feb. 21, 2019. Its case is not jointly administered with
those of the Debtors.
Backenroth Frankel also serves as counsel to 73 Empire Development.
58 BRUCE AVENUE: Gary Dove Buying 2 Yonkers Properties for $2.12M
-----------------------------------------------------------------
Gary Dove, a creditor of Debtors 58 Bruce Avenue Corp. and 143
School Street Realty Corp., asks the U.S. Bankruptcy Court for the
Southern District of New York to authorize it to buy the following
from the Debtors, free and clear of all liens, claims, encumbrances
and interests:
a. 58 Bruce Avenue's real property located at 58 Bruce
Avenue, Yonkers, New York for $1.345 million; and
b. 143 School Street's real property located at 143 School
Street, Yonkers, New York for $770,000.
On the Filing Date, Debtor 58 Bruce, filed, inter alia, its
Schedules and Local Bankruptcy Rule 1007-2 Affidavit. In its
Schedules, 58 Bruce values its real property at 58 Bruce Avenue at
$1.1 million, and lists a mortgage with Chase Bank (with a balance
of $486,115.89) and Dove's judgment as a disputed nonpriority
unsecured claim in the amount of $338,000. There are also two
minor claims and de minimis tax claims. In its Rule 1007-2
Affidavit, 58 Bruce states that its bankruptcy filing is "a result
of the litigation filed in the Supreme Court of New York." In
short, the Chapter 11 filing is simply a two-party dispute.
Additionally, on its Schedule G, the Debtor states that it is not a
party to any executory contracts or unexpired leases.
On the Filing Date, Debtor 143 School Street, filed, inter alia,
its Schedules and Local Bankruptcy Rule 1007-2 Affidavit. In its
Schedules, 143 School Street values its real property at 143 School
Street ("School Street Property") at $655,000, and lists a mortgage
with Chase Bank (with a balance of $287,774.85) and Dove's judgment
as a nonpriority unsecured claim in the amount of $338,000. There
are also two minor claims and de minimis tax claims. In short,
the Chapter 11 filing is simply a two-party dispute. Additionally,
on its Schedule G, the Debtor states that it is not a party to any
executory contracts or unexpired leases.
According to the Debtors' Schedules, the Properties have a combined
value of $1.755 million ("Debtors' Valuations"), with combined
mortgages of Chase Bank in the amount of $773,890.74.
On Jan. 21, 2016, Dove or an entity to be formed (also known as
Dove), as the Purchaser, and 143 School Street, as the Seller,
entered into a contract for the sale of the School Street Property
for $770,000. On that date, Dove placed a down payment of $77,000
into the escrow account of 143 School Street's attorney. The
contract provided for a closing date on Feb. 16, 2016. It must be
noted that Dove, in the School Street Agreement, has agreed to pay
an amount $115,000 greater than the $655,000 value for 143 School
Street set forth in the Debtors' Schedules.
Also, on January 21, 2016, Dove or an entity to be formed, as the
Purchaser, and 58 Bruce, as the Deller, entered into a contract for
the sale of the Bruce Avenue Property for $1.345 million. On that
date, Dove placed a down payment of $134,500 into the escrow
account of 58 Bruce's attorney. The contract provided for a
closing date on Feb. 20, 2016. It must be noted that Dove, in the
58 Bruce Avenue Agreement, has agreed to pay an amount $245,000
greater than the $1.1 million value for 58 Bruce set forth in the
Debtors' Schedules.
The combined purchase price for the two Properties is $2.115
million.
The parties intended to close the sales of the Properties
simultaneously, and the closings were scheduled for April 28, 2016.
The Debtors failed to appear at the scheduled closings and
thereafter refused to complete their contractually obligations
under the School Street Agreement and the 58 Bruce Agreement.
On June 6, 2016, Dove, as the Plaintiff, commenced an action
against the Debtors in the State Court titled Gary Dove v. 143
School Street Realty Corp. and 58 Bruce Avenue Realty Corp., Index
No. 57952/2016). The State Court Action included causes of action
for specific performance, anticipatory breach of contract, and for
enforcement of vendee's lien based upon Dove's down payments.
On June 15, 2017, the Supreme Court of the State of New York,
Westchester County, entered the Judgment against the Debtors,
ordering and directing them to specifically perform on the two
contracts of sale for the Properties. In addition to specific
performance, the Judgment holds that, simultaneously with the
delivery of the Deeds, Dove will pay to the Debtors the balance of
the respective ppurchase prices for the respective roperties under
the Contracts of Sale, less any amounts due under any existing down
payment, debt, liens, or encumbrances against the poperties, for
which Dove will be entitled to satisfy and take a credit at
closing; and less $91,563.70 plus interest at the statutory rate of
9% commencing as of June 1, 2016 in the amount of $100,120.52 from
the purchase price for the School Street property, for which Dove
will be entitled to take a credit at closing to compensate it for
those damages established at trial; and less $309,479.20 plus
interest at the statutory rate of 9% commencing as of June 1, 2016
in the amount of $28,921.47 for a total reduction of $338,400.67
from the purchase price for the Bruce Avenue property, for which
Dove will be entitled to take a credit at closing to compensate it
for those damages established at trial.
Although the Judgment provides for and directs specific performance
and includes, inter alia, decretal paragraphs authorizing the
Sheriff for Westchester County to assist Dove with enforcing the
specific performance order, the Judgment adds that, in the event
that Debtors fail to appear for closing and specifically perform on
the Contracts of Sale, Dove hall have monetary judgments against 58
Bruce Avenue in the amount of $443,979.20 (309,479.20 + 134,500)
plus interest at the statutory rate of 9% commencing as of June 1,
2016 in the amount of $41,490.77 for a total monetary judgment of
$485,469.97 in accordance with the damages established at trial and
against 143 School Street in the amount of $168,563.70 ($91,563.70
+ 77,000) plus interest at the statutory rate of 9% commencing as
of June 1, 2016 in the amount of $15,752.62 for a total monetary
judgment of $184,316.32 in accordance with the damages established
at trial.
The Debtors still refused to transfer title to Dove in accordance
with the terms of the Judgment.
On Sept. 10, 2020, in an attempt to avoid addressing the September
2020 Order to Show Cause, the Debtors filed their respective
Chapter 11 cases. Dove wishes to consummate the transactions in
accordance with the terms of the Sale Agreements and the Judgment.
Yet, the Debtors have continued to refuse to do so.
Pursuant to the Judgment, according to the formula discussed, Dove
is entitled to a reduction in the combined purchase prices of (i)
$211,500 based upon the down payments made; (ii) credits at closing
in the combined amount of $401,042.90 (i.e. $100,120.52 +
$309,479.20); and interest at the rate of 9% commencing as of June
1, 2016 ("Judgment Interest"), which as of June 1, 2021 will be in
the approximate amount of $180,469.30. Pursuant to the Judgment,
if Dove were to complete his purchase of the Properties, he would
be required to pay a balance due of $1,321,87.80 ("Purchase
Balance") to the Debtors for the Properties.
Pursuant to the Judgment, according to the formula discussed, if
the Debtors do not specifically perform, Dove is entitled to
monetary judgments in the combined amount of $612,542.90 (i.e.
$443,979.20 + $168,563.70) and interest at the rate of 9%
commencing as of June 1, 2016, which as of June 1, 2021 will be in
the approximate amount of $275,644.30, for a total monetary
judgment against the Debtors of $888,187.20 ("Monetary Judgment").
At this stage, there are only two possible scenarios that exist:
either (i) Dove has a right to specific performance, and the
Debtors must convey the Properties to Dove, with Dove paying the
Purchase Balance at closing per the terms of the Judgment, or (ii)
Dove is the holder of a secured claim of almost $900,000 with
interest continuing to accrue, which will soon render, or has
already rendered, the Debtors administratively insolvent.
Contemporaneously with the filing of the instant motion, Dove
intends to file a Chapter 11 Plan and Disclosure Statement in the
Debtors' Chapter 11 cases. The relief sought in the instant Motion
will result in the highest and best offer, as well as provide the
Debtors with the ability to confirm a Chapter 11 Plan that will be
in the best interest of the Debtors' estates.
According to the Debtors' Schedules, the Properties combined value
is $1.755 million. According to their Schedules, there are
prepetition claims of (i) secured creditor / mortgage holder, Chase
Bank in the combined amount of $773,890.74 and (ii) City of Yonkers
taxes and Con Edison claims in the sum of $37,323.81.
Additionally, the IRS and the New York State Department of Taxation
and Finance have filed Proofs of Claims in the combined sum of
$9,749.29 in the Debtors' cases. Exclusive of any claims of Dove,
the sum of the Debtors' entire prepetition debts is in the
approximate amount $820,963.84. When factoring in Dove's Monetary
Judgment, if specific performance is not ordered, the combined
prepetition claims against the Debtors total $1,709,151.04. Based
upon the Debtors' Valuations of $1.755 million, plus other
administrative costs, it is likely that the Debtor is
administratively insolvent.
Under the Sale Agreements, Dove has agreed to pay $2.115 million,
or $360,000 more than the Debtors' Valuations, for the Properties.
If the Debtors complete the sale of the Properties to Dove, even
after factoring in the Credits and Judgment Interest awarded to
Dove in the Judgment, the Debtors will be able to have a Chapter 11
Plan funded and confirmed, with all creditors being paid 100% of
their Allowed Claims. Furthermore, if the instant Motion is
granted, Dove will voluntarily agree to (i) increase the combined
Purchase Balance due to the Debtors by $50,000, if specific
performance is ordered, or (ii) waive $50,000 of Judgment Interest
if the Court determines that specific performance is not
appropriate and that Dove is merely entitled to the Monetary
Judgment. Regardless, a sale of the Properties to Dove pursuant to
the Sale Agreements per the terms as ordered in the Judgment, plus
the additional $50,000 to the Debtors will not only pull the
Debtors away from the precipice of administrative insolvency, but
will allow the Debtors' interest holders to receive a surplus
distribution as part of the proposed Chapter 11 Plan.
It is Dove's position that he has an absolute right to compel the
Debtors to complete the sale of the Properties to him under
applicable state law and pursuant to the Judgment, which directed
such specific performance. Without the ability to reject the Sale
Agreements, the Debtors' only available options would be to have
their Chapter 11 case dismissed or converted to ones under Chapter
7 or to sell the Properties in accordance with the instant Motion.
Dove asserts that the relief sought in this Motion and the proposed
Chapter 11 Plan will provide the most efficient means of satisfying
all claims against the Debtors.
Under the facts and circumstances of the case, authorizing the sale
of the Properties to Dove in accordance with the Sale Agreements
and / or compelling the Debtors to complete the sale of the
Properties to Dove are the highest and best options available to
the Debtors, and a private sale to Dove is appropriate.
Dove asks authorization to pay (i) the undisputed claims of Chase
Bank at the closing, together with (ii) the allowed claims of the
creditors listed, and (iii) fees for Dove's counsel pursuant to
Section 503 of the Bankruptcy Code, to the extent authorized by the
Court, with the balance of the sale proceeds to be paid to the
Debtors or the Debtors' designated escrow agent.
Dove seeks an order directing that the Debtors take all steps
necessary to close the sale of the Properties within 60 days of the
entry of such order.
A copy of the Agreements is available at
https://tinyurl.com/4dnxxshc from PacerMonitor.com free of charge.
About 58 Bruce Avenue Corp.
58 Bruce Avenue Corp. classifies its business as Single Asset Real
Estate (as defined in 11 U.S.C. Section 101(51B)).
58 Bruce Avenue Corp. filed a voluntary Chapter 11 petition
(Bankr.
S.D.N.Y. Case No. 20-23033) on September 10, 2020. The petition
was
signed by Steve Edlund, president. The case is jointly
administered
with the Chapter 11 case filed by 143 School Street Realty Corp.
(Bankr. S.D.N.Y. Case No. 20-23034).
At the time of the filing, 58 Bruce Avenue estimated to have $1
million to $10 million in both assets and liabilities. M. Cabrera
&
Associates, P.C., led by Matthew M. Cabrera, Esq., serves as the
Debtor's counsel.
ABB/CON-CISE OPTICAL: Moody's Alters Outlook on Caa1 CFR to Pos.
----------------------------------------------------------------
Moody's Investors Service affirmed ABB/CON-CISE Optical Group LLC's
ratings, including the Corporate Family Rating at Caa1, the
Probability of Default Rating at Caa1-PD, the senior secured first
lien credit facility rating at B3, and the senior secured second
lien credit facility rating at Caa2. At the same time, Moody's
revised the outlook to positive from negative.
The change of outlook reflects Moody's expectations that demand for
optical products will continue to recover in 2021 but will remain
below the pre-coronavirus pandemic level until the pandemic fully
recedes.
The affirmation of the Caa1 CFR reflects Moody's expectations that
ABB/CON-CISE will maintain adequate liquidity, with flexibility to
temporarily absorb any negative cash flow from operations. The
affirmation also considers that financial leverage -- albeit very
high -- will materially improve in 2021 with earnings growth.
Rating actions
The following ratings were affirmed:
ABB/CON-CISE Optical Group LLC
Corporate Family Rating at Caa1
Probability of Default Rating at Caa1-PD
Senior Secured First Lien term loan at B3 (LGD3)
Senior Secured First Lien revolving credit facility due 2022 at B3
(LGD3)
Senior Secured Second Lien credit facilities at Caa2 (LGD5)
Outlook action
Revised to positive from negative
RATINGS RATIONALE
The Caa1 Corporate Family Rating reflects ABB/CON-CISE's very high
financial leverage with debt/EBITDA of 8.0 times for the LTM period
ended September 30, 2020, and challenges to growth revenue and
profitability. Deleveraging largely hinges on the company's ability
to grow earnings and reduce costs. The rating is also constrained
by the company's reliance on soft contact lenses which generate
over two-thirds of earnings. Near-term pressure on profitability
and cash flow is likely to continue until the negative impact of
the coronavirus pandemic on demand for soft contact lenses fully
recedes.
The rating is supported by ABB/CON-CISE's leading scale and market
position among US distributors of soft contact lenses and good
diversity across customers and geographies. Moody's expects that
ABB/CON-CISE will benefit from long term fundamentals of the
optical industry, as well as increased technological innovation
within the contact lens market. A weaker economic environment and
some lingering disruptions in the healthcare sector will preclude
these businesses from operating in 2021 at 100% of Moody's
pre-coronavirus expectations, but Moody's expects a significant
rebound that will be a key driver of earnings growth.
Moody's anticipates that ABB/CONCISE's liquidity will remain
adequate, supported by total liquidity (cash and undrawn credit
facilities) of approximately $100 million. Moody's anticipates that
ABB/CON-CISE will have adequate headroom on its financial debt
covenant. The company does not have any significant upcoming
long-term debt maturities, but its revolving credit agreement
expires in December 2022, presenting a degree of refinancing risk.
Among ESG considerations, ABB/CON-CISE has no material exposure to
environment risk. However, the company regularly encounters
elevated elements of social risk, including weak US economic
activity and reduced social interactions due to the coronavirus
pandemic which has reduced demand for some optical products.
Positive social considerations include growing demand for optical
products reflecting the aging population, eye strain caused by the
increased usage of computers and smaller mobile devices, and
technological innovation which has expanded the appeal of the
contact lens market. Governance considerations are material to
ABB/CON-CISE's credit profile due to its private equity ownership
which increases the risk of shareholder-friendly actions that come
at the expense of creditors.
The positive rating outlook reflects Moody's view that ABB/CON-CISE
will be able to improve earnings and reduce its very high leverage
towards 7.0 times within the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if ABB/CON-CISE is able to increase
its scale, improve its margin and cash flow profile, and improves
its liquidity. Quantitatively, the ratings could be upgraded if
debt to EBITDA is sustained below 7.0 times.
The ratings could be downgraded if there is a material
deterioration in operating performance or liquidity or if the
company's capital structure becomes unsustainable, raising
refinancing risk.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
Headquartered in Coral Springs, Florida, ABB/CON-CISE Optical Group
LLC is the largest distributor of soft contact lenses in the United
States. ABB/CON-CISE also designs and manufactures customized
contact lenses, and operates primarily in facilities in New York,
Florida, California and Kentucky. The company is privately owned by
financial sponsor, New Mountain Capital. ABB/CON-CISE generated
revenues of roughly $1.3 billion.
ADVANTAGE SPORTS: Selling Carrollton Property for $9.2 Million
--------------------------------------------------------------
Advantage Sports, Inc., and Advantage Sports Complex, LLC ("ASC"),
ask the U.S. Bankruptcy Court for the Eastern District of Texas to
authorize the sale of ASC's property located at 2800 N. IH35-E, in
Carrollton, Texas, and selected personalty, to South West Athletic
Center, LLC, for $9.2 million, subject to higher and better
offers.
Objections, if any, must be filed within 21 days from the date of
service.
ASC owns the Real Property which it has been marketing for sale for
the past (approximately) 12 months. Advantage Sports, Inc. owns
personalty located at the Real Property, a portion of which has
been offered for sale in connection with the marketing of the Real
Property.
The Debtors have filed the Motion because the Real Property and
selected personalty is currently subject to an offer from the
Purchaser for the total purchase price of $9.2 million, on the
terms of their Real and Personal Property Purchase Agreement. The
Debtors, in the exercise of their reasonable business judgment, ask
authority to convey to the Purchaser, the Real Property and the
personalty designated in the Contract, free and clear of all liens,
claims and encumbrances of any kind or nature, excluding ad valorem
tax liens for 2021. In short, they ask authority to consummate the
transaction set forth in the Contract and to execute any documents
reasonably necessary therefore.
Higher and better offers may be accepted until the time of a final
hearing on the Motion. The Debtors reserve the right to amend the
Motion to propose a different purchase and sale agreement, provided
however that such purchase and sale agreement must exceed the net
consideration to the Debtors for the assets conveyed.
The known lienholders on the Real Property are:
a. Taxes:
1. Parkland Hospital, 1201 Elm St., Suite 2600, Dallas,
Texas 75270
2. Dallas County, 1201 Elm St., Suite 2600, Dallas,
Texas 7527
3. City of Carrollton, 1201 Elm St., Suite 2600, Dallas,
Texas 75270
4. Carrollton-Farmers Branch ISD, 1201 Elm St., Suite
2600, Dallas, Texas 75270
5. City of Carrollton c/o Denton County Tax Assessor,
P.O. Box 90223 Denton, Texas 76202
6. Dallas County Community College, 1201 Elm St., Suite
260, Dallas, Texas 75270
7. Denton County Tax Assessor, P.O. Box 90223, Denton,
Texas 76202
8. Lewisville ISD, c/o Denton County Tax Assessor, P.O.
Box 90223 Denton, Texas 76202
b. First Lien: Veritex Community Bank, 8214 Westchester Drive,
Suite 800, Dallas, Texas 75225
c. Second Lien (partially or wholly unsecured): Capital
Certified Development, 1250 Capital of Texas, Hwy S Bldg 1-600,
Austin, Texas 78746
The known lienholders on the personalty specified in the Contract
are:
a. Taxes:
1. Lewisville ISD, c/o Denton County Tax Assessor, P.O.
Box 90223 Denton, Texas 76202
2. City of Carrollton c/o Denton County Tax Assessor,
P.O. Box 90223 Denton, Texas 76202
3. City of Carrollton, 1201 Elm St., Suite 2600, Dallas,
Texas 75270
4. Carrollton-Farmers Branch ISD, 1201 Elm St., Suite
2600, Dallas, Texas 75270
5. Denton County Tax Assessor, P.O. Box 90223, Denton,
Texas 76202
b. First Lien (partially unsecured):
1. Origin Bank, 3921 Elm Street, Choudrant, LA 71227
2. Leaf Capital Funding, LLC (PMSI), 2005 Market Street,
14th Floor, Philadelphia, PA, 19103
c. Junior Liens (wholly unsecured):
1. Veritex Community Bank, 8214 Westchester Drive, Suite
800, Dallas, Texas 75225
2. Funding Metrics, LLC, 3220 Tillman Drive, Suite 200,
Bensalem, PA 19020
3. Union Funding Source, c/o Maurice Wutscher LLP, 23611
Chagrin Blvd. Suite 207, Beachwood, OH 44122
4. Rockwall Capital L.L.C., 615 National Drive,
Rockwall, TX, 75032
The Debtors further ask that the Court authorizes (but not require)
them to designate a back-up bidder and to compensate the Back-up
Bidder with a due diligence fee of up to $25,000 in the event that
the sale of the Real Property and the personalty designated in the
Back-up Bidder's purchase and sale agreement is not consummated
because the sale to the Purchaser is consummated.
They ask that the Court authorizes them, and any title company
acting pursuant to the authority of the Court's Order granting the
Motion, to close the sale of the Real Property and the personalty
designated in the Contract or the Back-up Contract; to vest title
to same to the Purchaser or the Back-up Bidder free and clear of
all liens, claims and encumbrances whatsoever except those for 2021
ad valorem taxes; and to either (i) remit the sale proceeds as the
Court may direct to secured creditors, in whole or in part, and
(ii) attach the liens of secured creditors to the proceeds which
remain with the Debtor.
Any lien of an ad valorem taxing authority securing the payment of
2021 taxes on the Real Property and the personalty designated in
the Contract or the Back-up Contract will be pro-rated as of the
closing between the Purchaser and the Debtors, to be paid by the
Purchaser when due.
The Debtors ask that the Court orders that Federal Rule of
Bankruptcy Procedure 6004(h) not apply to any Order granting the
relief sought.
A copy of the Agreement is available at
https://tinyurl.com/mfj4s4tk from PacerMonitor.com free of charge.
The Purchaser:
SOUTH WEST ATHLETIC CENTER LLC
c/o Chris Polk
2113 Greenbriar Drive, Suite A
Southlake, TX 76092
E-mail: chrisp@saffeinsurance.com
The Purchaser is represented by:
HIGIER ALLEN & LAUTIN, PC
2400 Cityplace
2711 N. Haskell Ave.
Dallas, TX 75204
Attn: Robert M. Allen
E-mail: rallen@higierallen.com
About Advantage Sports
Advantage Sports, Inc. owns and operates a multipurpose athletic
facility located in Carrollton, Texas.
Advantage Sports and Advantage Sports Complex, LLC sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.
Tex. Lead Case No. 20-40667) on March 2, 2020. The petitions were
signed by John W. Sample, manager. At the time of filing, Debtors
disclosed $10 million to $50 million in assets and liabilities.
Judge Brenda T. Rhoades oversees the cases.
Debtors have tapped Spector & Cox, PLLC as their legal counsel and
Swearingen Realty Group, LLC as their broker.
ADVANZEON SOLUTIONS: Seeks August 3 Plan Exclusivity Extension
--------------------------------------------------------------
Debtor Advanzeon Solutions, Inc. requests the U.S. Bankruptcy Court
for the Middle District of Florida, Tampa Division to extend the
exclusive periods during which the Debtor may file a plan and
disclosure statement through and including August 3, 2021, and to
solicit acceptances of a plan of reorganization through and
including November 2, 2021.
The Debtor's primary asset is its wholly-owned subsidiary, Pharmacy
Value Management Solutions, Inc. ("PVMS"), a Nevada corporation.
PVMS does business as "SleepMaster Solutions" TM (SMS) and operates
a leading, cutting edge sleep apnea testing equipment and
monitoring business.
The Debtor's reorganization will center on PVMS, which is the
Debtor's primary operating asset. PVMS and its operations have been
and continue to be affected in significant ways by the COVD-19
pandemic, including the closure or reduced operations of clinics
from whom PVMS derives a majority of its revenues, the suspension
by the Department of Transportation of requirements for medical
examinations, and other actions impacting various clients and
current and potential customers of PVMS.
The Debtor expects that the existing moratoria and regulation
suspensions will expire on May 31, 2021, and that in part in
preparation for and then following that occurrence examinations
will take place generating revenue for PVMS and its operations.
Additionally, PVMS has taken steps to positively impact its future
successful operations through advanced discussions with partners
for sleep apnea disposable testing devices and services.
As a result of the lifting of regulation suspensions and the
unfolding of these negotiations, the Debtor's efforts to propose,
solicit and confirm a plan will be greatly aided by visibility into
a more normalized environment as a result of the vaccine and other
measures in late spring and early summer. In the interim, the
Debtor is making good faith progress towards reorganization.
Due to the continued effect of the moratoria on testing impacting
the Debtor's subsidiary's operations and other effects of the
pandemic, the Debtor needs more time to operate in a more
normalized environment before it is able to propose a plan.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3sRAgrQ from PacerMonitor.com.
About Advanzeon Solutions, Inc.
Based in Tampa, Fla., -- advanzeonshareholders.com.-- Advanzeon
Solutions, Inc. provides behavioral health, substance abuse, and
pharmacy management services, as well as sleep apnea programs, for
employers, Taft-Hartley health and welfare Funds, and managed care
companies throughout the United States. Additional information is
contained in the Debtor's public filings, available at sec.gov.
Advanzeon Solutions sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06764) on September
7, 2020.
At the time of the filing, the Debtor had estimated assets of
between $500,000 and $1 million and liabilities of between $1
million and $10 million. The petition was signed by Clark A.
Marcus, chief executive officer.
Judge Michael G. Williamson oversees the case.
The Debtor tapped Stichter, Riedel, Blain & Postler, P.A. its legal
counsel; O'Connor, Pagano & Associates, LLC as its certified public
accountant; and Marcus & Marcus as its accountant.
AEROCENTURY CORP: April 12 Deadline Set for Panel Questionnaires
----------------------------------------------------------------
The United States Trustee is soliciting members for an unsecured
creditors committee in the bankruptcy case of AeroCentury Corp.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://bit.ly/3g1OdQp and return it to
Linda.Casey@usdoj.gov at the Office of the United States Trustee so
that it is received no later than 4:00 p.m., on April 12, 2021.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About AeroCentury Corp.
AeroCentury Corp. is engaged in the business of investing in used
regional aircraft equipment and leasing the equipment to foreign
and domestic regional air carriers. The Company's principal
business objective is to acquire aircraft assets and manage those
assets in order to provide a return on investment through lease
revenue and, eventually, sale proceeds. The Company is
headquartered in Burlingame, California.
AeroCentury Corp. and affiliates JetFleet Holdings Corp. and
JetFleet Management Corp. sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Lead Case No. 21-10636) on March 29, 2021.
Morrison & Foerster LLP and Young Conaway Stargatt & Taylor, LLP
are serving as legal advisor, and B Riley Securities, Inc., is
serving as financial advisor and investment banker. Kurtzman
Carson Consultants is the claims agent, maintaining the page
http://www.kccllc.net/aerocentury
AEROCENTURY CORP: April 26 Hearing on Bid Procedures for All Assets
-------------------------------------------------------------------
AeroCentury Corp. and affiliated debtors filed with the U.S.
Bankruptcy Court for the District of Delaware a notice of their
proposed bidding procedures in connection with the sale of all or
substantially all of their aircraft and related assets to Drake
Asset Management Jersey Limited, subject to overbid.
The aggregate consideration for the purchase of the Equipment and
the related Lease Documents will be an amount equal to the amount
of the then-outstanding Secured Obligations as of the Closing
Date.
On March 29, 2021, the Debtors filed their Bidding Procedures
Motion.
A remote hearing on the Bidding Procedures Motion is set for April
26, 2021, at 2:00 p.m. (ET). The Bidding Procedures Objection
Deadline is April 16, 2021, at 4:00 p.m. (ET).
About AeroCentury Corp.
AeroCentury Corp. is engaged in the business of investing in used
regional aircraft equipment and leasing the equipment to foreign
and domestic regional air carriers. The Company's principal
business objective is to acquire aircraft assets and manage those
assets in order to provide a return on investment through lease
revenue and, eventually, sale proceeds. The Company is
headquartered in Burlingame, California.
AeroCentury Corp. and affiliates JetFleet Holdings Corp. and
JetFleet Management Corp. sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Lead Case No. 21-10636) on March 29, 2021.
Morrison & Foerster LLP and Young Conaway Stargatt & Taylor, LLP
are serving as legal advisor, and B Riley Securities, Inc., is
serving as financial advisor and investment banker. Kurtzman
Carson Consultants is the claims agent, maintaining the page
http://www.kccllc.net/aerocentury
AEROCENTURY CORP: Sets Bid Procedures for Substantially All Assets
------------------------------------------------------------------
AeroCentury Corp. and affiliated debtors ask the U.S. Bankruptcy
Court for the District of Delaware to authorize the bidding
procedures in connection with the sale of all or substantially all
of their aircraft and related assets to Drake Asset Management
Jersey Limited, subject to overbid.
The aggregate consideration for the purchase of the Equipment and
the related Lease Documents will be an amount equal to the amount
of the then-outstanding Secured Obligations as of the Closing
Date.
The Debtors retained B. Riley Securities, Inc. in October 2019 to
assist in analyzing options to address their capital structure,
including strategic and financing alternatives to restructure their
indebtedness and other contractual obligations, including on the
Debtors' default under a credit facility for which MUFG Union Bank,
N.A. acted as agent. Obligations owed under the MUFG Credit
Facility were held by five separate institutions ("MUFG Lending
Group") and were secured by substantially all of the Debtors'
assets.
With the assistance of B. Riley, the Debtors negotiated a
forbearance agreement, including three subsequent amendments to the
forbearance agreement, with the MUFG Lending Group. The initial
deadline to submit bids was March 2, 2020 ("Initial IOI Deadline"),
providing potentially interested parties approximately ten weeks to
perform their initial diligence. Unfortunately, this marketing
process and the Initial IOI Deadline coincided with the onset of
the COVID-19 pandemic. As a result, each party who initially
submitted an indications of interest ("IOI") ultimately informed
the Debtors that they were no longer interested in proceeding on
the terms set forth in their original IOIs due to the uncertainty
caused by the COVID-19 pandemic.
The Debtors remained in default, however, and continued to
negotiate with the MUFG Lending Group to determine a viable path
forward despite the impact of the COVID-19 pandemic. Following
extensive negotiations, as a condition for continuing to allow the
Debtors to operate while still in default under the MUFG Credit
Facility, the MUFG Lending Group required the Debtors to restart
the sales and marketing process beginning in early April of 2020 to
solicit highest and best offers.
The Debtors, with the assistance of B. Riley, determined that the
proposal by Drake to acquire all of the accrued and outstanding
obligations owed under the MUFG Credit Facility (together with the
assignment of the valid, enforceable, duly perfected, and
non-avoidable liens and security interests related thereto) was far
and away the best offer submitted. Drake's offer provided the
highest value but also had the fewest contingencies and proposed
the earliest closing. In the subsequent months, Drake worked with
the MUFG Lending Group, the Debtors, and B. Riley to document the
debt acquisition and a subsequent amendment to the MUFG Credit
Facility to be effective upon Drake's purchase of the outstanding
obligations from the MUFG Lending Group.
The Debtors, with the assistance of B. Riley, determined that
Drake's bid for the Membership Interests in E-175 was the highest
and best offer received. Drake's bid provided the highest economic
consideration to the Debtors and provided both the fastest and the
most certain closing. Most importantly, Drake proposed a closing
date at least a month sooner than any other bidder. Further, as
part of the sale of the E-175 aircraft, Drake agreed to allow the
Debtors to retain $2.1 million of sale proceeds, which would be
used to fund the Debtors' continued business operations and further
sale and restructuring efforts. After discussion by the Debtors'
Board of Directors, the Debtors selected Drake as the winning
bidder. The sale of the Membership Interests in E-175 to Drake
closed on March 16, 2021.
Drake agreed to allow the Debtors to retain $2.1 million of cash
from the sale of the E-175 membership interests to continue their
business operations. The Debtors determined that a sale of their
remaining aircraft and other assets under section 363 could provide
the most-value, and the Debtors voluntarily commenced these cases
to pursue such a sale.
The Debtors submit that the Stalking Horse Agreement provides the
best option to maximize value for stakeholders. The Stalking Horse
Bid is a credit bid in the amount of the Stalking Horse Bidder's
Secured Obligations, which are approximately $83,164,109 as of the
Petition Date. Importantly, the credit bid does not include any
break-up fee or expense reimbursement. The Debtors' ultimate
consummation of the Stalking Horse Agreement is subject to higher
or otherwise better offers (in whole or through a combination of
bids) that the Debtors may receive for the Assets pursuant to the
Bidding Procedures. Accordingly, there is a strong business
justification for the Debtors' entry into the Stalking Horse
Agreement.
The Debtors are asking approval of the Bidding Procedures to
establish a clear and open process for the solicitation, receipt,
and evaluation of bids on a timeline that allows them to consummate
a sale of their remaining aircraft prior to confirmation of a
chapter 11 plan that will contemplate a restructuring of the
Debtors around their remaining assets, business platform, and tax
attributes.
By th Motion, the Debtors ask entry of the Bidding Procedures
Order:
a. authorizing and approving the Bidding Procedures in
connection with the receipt and analysis of competing bids for the
Assets;
b. authorizing the Debtors to enter into the Stalking Horse
Purchase Agreement;
c. approving the form and manner of notice of the Auction and
Sale and hearing thereon;
d. authorizing and approving the Assignment Procedures for
the assumption and assignment of the Designated Contracts;
e. approving the form and manner of notice of the potential
assumption and assignment of Designated Contracts;
f. authorizing the Debtors to enter into that certain
Stalking Horse Asset Purchase Agreement, as amended, supplemented
or otherwise modified by the parties thereto, and including the
disclosure of schedules and exhibits attached thereto with the
Stalking Horse Bidder; and
g. establishing the following dates and deadlines, subject to
modification as needed, relating to competitive bidding and
approval of the Sale.
Additionally, by the Motion, the Debtors ask entry of the Sale
Order authorizing: (a) the sale of the Assets free and clear of all
claims, liens, liabilities, rights, interests and encumbrances
(except for any permitted liens and encumbrances); (b) the Debtors
to assume and assign the Designated Contracts; and (c) any and all
related relief requested. The Debtors will file a proposed form of
the Sale Order no later than 14 days prior to the Sale Hearing,
subject to modifications by the Debtors and the Successful Bidder
following the Auction.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: 21 days after the hearing to consider the Bid
Procedures, as the deadline by which all binding bids must be
actually received pursuant to the Bidding Procedures
b. Initial Bid: A Qualified Bid will be valued by the Debtors
based upon any and all factors that the Debtors, in consultation
with the Consultation Parties, reasonably deem pertinent in their
business judgment.
c. Deposit: 10% of the total cash and non-cash consideration
of the Bid
d. Auction: Three Business Days following the Bid Deadline, as
the date and time of the Auction if more than one competing
Qualified Bid is received with respect to the Assets, which will be
held telephonically, by videoconference, or at the offices of Young
Conaway Stargatt & Taylor, LLP, Rodney Square, 1000 North King
Street, Wilmington, Delaware 19801
e. Bid Increments: Each Subsequent Bid at the Auction will
provide net value to the estates in an amount to be announced at or
prior to the Auction over the Starting Bid or the Leading Bid, as
the case may be, as determined by the Debtors in the exercise of
their reasonable business judgment and in consultation with the
Consultation Parties.
f. Sale Hearing: 30 days after the Bid Procedures Hearing, as
the date of the sale hearing to be held before the Court
g. Sale Objection Deadline: Seven days before the Sale
Hearing, as the deadline to object to the Sale
h. Credit Bidding: Pursuant to section 363(k) of the
Bankruptcy Code, the Stalking Horse Bidder, as a secured lender,
has the right (but not the obligatio n) to credit bid any and all
amounts due and owing to it under the Secured Obligations. Any and
all bids, other than those submitted by or on behalf of the
Stalking Horse Bidder, will be in cash.
The Debtors ask approval of the Notice of Auction and Sale Hearing.
Within two business days of entry of the Bidding Procedures Order,
the Debtors will serve the Notice of Auction and Sale Hearing by
first-class mail upon the Notice Parties. They will also post the
Notice of Auction and Sale Hearing and the Bidding Procedures Order
on the website of the Debtors’ claims and noticing agent.
Not later than five business days following the entry of the
Bidding Procedures Order, the Debtors will cause the Notice of
Auction and Sale Hearing to be published once in the national
edition of the New York Times or another nationally circulated
newspaper, with any modifications necessary for ease of
publication, and post the Notice of Auction and Sale Hearing and
the Bidding Procedures Order on the website of their claims and
noticing agent.
As soon as reasonably practicable following conclusion of the
Auction, the Debtors propose to file a notice on the Court's docket
identifying the Successful Bidder(s) for the Assets and any
applicable Next-Highest Bidder(s).
To facilitate the Sale, the Debtors ask authority to assume and
assign to the Successful Bidder certain executory contracts and
unexpired leases, as selected by such Successful Bidder in its
Successful Bid, in accordance with the Assignment Procedures. On
the date that is 10 days prior to the Bid Deadline, the Debtors
will file with the Court and serve on each Non-Debtor counterparty
to any existing contract with the Debtor, the Notice of Assumption
and Assignment, regardless of whether the contract has been listed
as a Designated Contracts. The Cure Cost/Assignment Objection
Deadline is 14 days following the Notice of Assumption and
Assignment.
In the interest of attracting the highest and best bids for the
Assets, the Debtors submit that the Sale should be free and clear
of all encumbrances, with any such encumbrances attaching to the
net proceeds of the Sale.
The Debtors submit that cause exists to justify a waiver of the
14-day stays under Bankruptcy Rules 6004(h) and 6006(d), as
promptly closing the Sale is of critical importance. They
therefore ask that the Sale Order be effective immediately by
providing that the 14-day stay under Bankruptcy Rules 6004(h) and
6006(d) be waived.
A copy of the Agreement and the Bidding Procedures is available at
https://tinyurl.com/5895dt2a from PacerMonitor.com free of charge.
The Purchaser:
DRAKE ASSET MANAGEMENT JERSEY LIMITED
IFC5, St Helier
Jersey JE1 1ST
Attn: The Directors
E-mail: falkoII@sannegroup.com
- and -
FALKO REGIONAL AIRCRAFT LIMITED
1 Bishop Square
St. Albans Rd. West
Hatfield AL10 9NE
Attn: Sarah Dichlian
E-mail: sarah.dichlian@falko.com
legal@falko.com
About AeroCentury Corp.
AeroCentury Corp. is engaged in the business of investing in used
regional aircraft equipment and leasing the equipment to foreign
and domestic regional air carriers. The Company's principal
business objective is to acquire aircraft assets and manage those
assets in order to provide a return on investment through lease
revenue and, eventually, sale proceeds. The Company is
headquartered in Burlingame, California.
AeroCentury Corp. and affiliates JetFleet Holdings Corp. and
JetFleet Management Corp. sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Lead Case No. 21-10636) on March 29, 2021.
Morrison & Foerster LLP and Young Conaway Stargatt & Taylor, LLP
are serving as legal advisor, and B Riley Securities, Inc., is
serving as financial advisor and investment banker. Kurtzman
Carson Consultants is the claims agent, maintaining the page
http://www.kccllc.net/aerocentury
AGEMY FAMILY: Court Extends Plan Exclusivity Until May 21
---------------------------------------------------------
At the behest of the Debtor Agemy Family Corporation d/b/a Quality
Plus Dry Cleaners, Judge Roberta A. Colton of the U.S. Bankruptcy
Court for the Middle District of Florida, Tampa Division extended
the period in which the Debtor may file a Plan of Reorganization
and Disclosure Statement on or before May 21, 2021.
On January 22, 2021, the Court entered an Order on Debtor's
Emergency Motion to Consolidate Cases which administratively
consolidated the above Debtors. The Debtors operate as
Debtors-in-Possession and no trustee or examiner has been appointed
in this case.
The Debtor has been negotiating with various creditors regarding
the Plan treatment of claims. Additional time is needed to complete
negotiation in its attempt to have consensual treatment of
creditors' claims.
Also, the Debtor is seeking to obtain employee retention tax
credits which should bring a large sum refund from IRS into the
estate to be utilized to fund its Plan. Of course, this will
facilitate negotiations with creditors. It is anticipated that any
such refund will be received within 60 days.
As a result of the foregoing, the Debtor seeks an additional 60
days to complete negotiation efforts, to possibly receive tax
credit refunds, and to file its Plan of Reorganization and
Disclosure Statement.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3mxkwYU from PacerMonitor.com.
A copy of the Court's Extension Order is available at
https://bit.ly/3t1tOP9 from PacerMonitor.com.
About Agemy Family Corporation
Agemy Family Corporation d/b/a Quality Plus Dry Cleaners, a company
that operates in the laundry facilities and dry cleaning services
industry, sought Chapter 11 protection (Bankr. M.D. Fla. Case No.
20-08608) on November 22, 2020, estimating at least $100,000 to
$500,000 in assets and less than $1 million to $10 million in
liabilities. Agemy Family President Allie Hassan Agemy signed the
petition.
Judge Roberta A. Colton oversees the case. David W. Steen, P.A. is
the Debtor's legal counsel.
AIR METHODS: Moody's Hikes CFR to B3 & Rates Amended Revolver B2
----------------------------------------------------------------
Moody's Investors Service upgraded Air Methods Corporation's
Corporate Family Rating to B3 from Caa1 and its Probability of
Default Rating to B3-PD from Caa1-PD. Moody's also upgraded the
first lien senior secured term loan rating to B2 from B3 and the
rating on the senior unsecured notes to Caa2 from Caa3. A B2 rating
was assigned to the company's amended $125 million revolving credit
facility due 2024. The outlook is stable.
The upgrade reflects a material reduction in the company's leverage
as a result of ongoing cost rationalization efforts as well as
improvement of patient transport volumes and net revenue per
transport. Moody's estimates that the company's leverage will
remain below 7.5 times over the next 12 months.
In early April 2021, Air Methods amended its first lien credit
agreement and extended the maturity of its $125 million revolver by
2 years from 2022 to 2024. This maturity extension lengthens the
company's debt maturity profile, a positive factor contributing to
the rating upgrade.
Ratings upgraded:
Air Methods Corporation
Corporate Family Rating, to B3 from Caa1
Probability of Default Rating, to B3-PD from Caa1-PD
$1.25 billion senior secured first lien term loan due 2024, to B2
(LGD3) from B3 (LGD3)
$500 million senior unsecured notes due 2025, to Caa2 (LGD5) from
Caa3 (LGD5)
Ratings assigned:
Air Methods Corporation
Amended $125 million senior secured first lien revolving credit
facility expiring 2024 at B2 (LGD3)
The rating of the existing revolver expiring in 2022 will be
withdrawn when the refinancing transaction closes.
Outlook action:
The rating outlook is stable.
RATINGS RATIONALE
Air Methods' B3 CFR reflects high financial leverage, operating
performance volatility caused by adverse weather conditions and
evolving reimbursement regime. Moody's expects the company will
operate with financial leverage of 6.5-7.5 times over the next
12-18 months. Moody's estimated leverage (including ~78 million
add-back for class-action lawsuit-related expenses) was
approximately 7.1 times as of December 31, 2020.
Offsetting the above challenges, Air Methods' B3 CFR is supported
by a sizeable revenue base, positive cash flow, and the company's
position as a leading provider of community-based air ambulance
services in the United States.
The company's liquidity is good. Moody's expects that the company
will generate $35-$50 million in annual free cash flow in the next
12 months. Additionally, the company had $17 million of cash and
$94.2 million availability under its $125 million revolver as of
December 31, 2020. This gives the company adequate flexibility to
manage its debt service requirement of approximately $12.5 million
in 2021 as well as other fixed expenses like non-cancellable leases
and unwinding of advanced Medicare payments which is scheduled to
start in April 2021.
The stable rating outlook reflects Moody's expectation that the
company's strategic cost-cutting and sales and marketing
initiatives will continue to bear positive results and they will
help the company to delever.
As a provider of emergency transport services, Air Methods faces
high social risk. An industry structure where a significant
proportion of emergency transport services are provided on an
out-of-network basis often results in patients getting surprise
medical bills. The pandemic relief package, which was signed into
law in December 2020, included the No Surprises Act, which will
take effect on January 1, 2022. The act prevents out-of-network
providers from "balance billing" patients, including those who are
transported by air ambulances, for any amount that is not covered
by the patients' insurance companies. Moody's believes that over
the next year, ahead of the implementation of the new legislation,
air ambulance providers and insurers will continue to pursue
in-network contracts. This will reduce exposure to the uncertainty
created by out-of-network claims. Air Method's financial policies
are expected to remain aggressive, reflecting its ownership by a
private equity investor. The company is owned by a private equity
firm, American Securities.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the company's operating
performance or liquidity weakens or if there were further negative
legislative actions. Sustained negative free cash flow could also
contribute to a downgrade.
Ratings could be upgraded if the company sustains revenue growth
and maintains profitability such that adjusted debt/EBITDA declines
below 6.0 times. Successful execution of cost reduction efforts and
expansion of in-network relationships with big commercial insurers
would also strengthen the company's credit profile.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Air Methods is one of the largest providers of air medical
emergency services in the United States. In addition to the core
air medical emergency services business, the company also provides
aerial tours in select US tourist destinations. The company also
has a small presence in design, manufacture, and installation of
medical aircraft interiors for domestic and international
customers. Net revenues are around $1.2 billion.
AIR TRANSPORT: S&P Upgrades ICR to 'BB+', Outlook Stable
--------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
air cargo lessor and airline services provider Air Transport
Services Group Inc. (ATSG) to 'BB+' from 'BB' and its issue-level
rating on its senior unsecured notes to 'BB' from 'B+'. S&P also
revised its recovery rating on these notes to '5' (10%-30%; rounded
estimate: 10%) from '6' due to the higher issuer credit rating and
its expectation for lower levels of secured debt in its capital
structure.
S&P said, "Additionally, we revised our assessment of the company's
liquidity to strong from adequate to reflect its prudent risk
management and sufficient sources of liquidity, in the form of
revolver availability and FFO generation, to meet its spending
requirements.
"The stable outlook on ATSG reflects our expectation that its
operations will improve through 2022 supported by the relatively
long-term nature of its contracts and the generally favorable
outlook for cargo aircraft leasing.
"We believe ATSG will continue to benefit from higher demand for
air freight transportation stemming from the COVID-19
pandemic-related rise in e-commerce demand, as well as its
relationship with Amazon.com Inc., over the foreseeable future."
ATSG is a major provider of air freight transportation for Amazon
as it had 31 aircraft leased to the company as of December 2020 and
contracts to lease an additional 11 aircraft by year-end 2021. The
company also provides airline services (such as crew to fly the
planes) for the aircraft it leases to Amazon.
Over the past few years, ATSG has benefited from the higher demand
for freighter aircraft due to the steady growth of the retail
e-commerce industry (and increased focus on faster delivery times)
and expanded demand from Amazon in particular. The shift away from
retail stores during the COVID-19 pandemic (because of
government-mandated movement restrictions and shutdowns, which have
reduced the volume of in-person shopping) accelerated this trend in
2020 and S&P expects the demand for air cargo transportation to
remain strong over the next few years.
ATSG has also benefited from a pickup in demand for its
shorter-term charter and aircraft, crew, maintenance, and insurance
(ACMI) services because of the reduced availability of belly-hold
capacity on passenger flights given the reduced number of flights
amid the pandemic. However, the company's strong performance on the
cargo side is partly offset by the weakness in its commercial and
military passenger operations, which have been affected by the
sharp decline in demand for passenger air travel during the
pandemic.
S&P said, "We expect ATSG's credit metrics to improve through 2022
supported by its strong operations and lower debt levels. We
expect ATSG's credit metrics to benefit from the strong demand for
air cargo transportation over our forecast period. Specifically,
the company plans to continue expanding its fleet given its
increased business from Amazon and other customers. We expect
capital spending of about $450 million-$500 million annually
through 2022 (compared with $510 million in 2020). We also expect
the company's 2021 cash position and credit metrics to benefit
somewhat from its receipt of support from the second and third
rounds of the federal payroll support program (PSP; which we treat
as an offset to its operating expenses)."
On April 6, 2021, ATSG upsized its revolving credit facility to $1
billion and borrowed from the facility to fully repay its $615
million term loan due 2024. The company plans to use the proceeds
from the add-on to its unsecured notes to partly pay down its
outstanding revolver balance. In March 2021, Amazon exercised
warrants issued by ATSG that will provide ATSG with proceeds of
$132 million later in the second quarter of 2021 and increase
Amazon's ownership stake in the company to 19.5%. ATSG intends to
use these proceeds, in addition to the funds from its add-on, to
pay down its outstanding revolver balances.
Improving operational cash generation driven by a larger fleet,
lower debt levels, and somewhat higher equity, all result in
stronger credit metrics. S&P said, "Therefore, we now forecast
ATSG's EBIT interest coverage will increase to the high-4x area in
2021 from 2.9x in 2020, supported by its improving operations,
proceeds from the PSP program, and lower interest expense, before
subsequently declining to the mid-3x area in 2022 (due, in large
part, to the absence of PSP inflows in 2022). In addition, we
anticipate its FFO to debt will be in the high-30% to low-40% area
through 2022 (compared with the low-30% area in 2020). Furthermore,
we forecast its debt to capital will be in the 50%-55% range
through 2022, which compares with 64.4% in 2020. We note that
ATSG's debt to capital improved to 64.4% in 2020 from 77% in 2019
largely due to the reclassification of some warrants to equity from
liabilities."
S&P said, "We expect ATSG to maintain its solid market position in
the global cargo aircraft segment. ATSG operated a fleet of 106
aircraft (100 owned) as of Dec. 31, 2020. Of these aircraft, about
80% were converted Boeing 767 (767-200s and 767-300s) freighters.
The supply of midsize freighters well-suited for regional air
networks has previously been limited, which led to continued strong
demand for Boeing 767 freighters (which ATSG flies for Amazon).
However, we expect the supply situation to improve over the next
few years because passenger airlines have announced accelerated
retirements of their older aircraft (including Boeing 767s) during
the pandemic and we believe this will improve the availability of
such planes for ATSG to expand its fleet. In this context, we
believe ATSG enjoys a differentiated market position given the size
and composition of its fleet, its aircraft conversion capabilities,
and its airline services offerings. ATSG also operates many of its
aircraft under ACMI or crew, maintenance, and insurance (CMI)
contracts for its customers, including Amazon, DHL Network
Operations (USA) Inc., and the U.S. Department of Defense (DoD).
"The stable outlook on ATSG reflects our expectation that its
operations will continue to improve through 2022. We base this on
the long-term nature of its contracts, as well as the favorable
outlook for cargo aircraft leasing supported by the continued
growth of e-commerce and the increasing focus on time-efficient
freight transportation. We forecast the company's EBIT interest
coverage will increase to the high-4x area in 2021 from 2.9x in
2020, supported by its improving operations, proceeds from the PSP
program, and lower interest expense, before subsequently declining
to the mid-3x area in 2022. In addition, we forecast its debt to
capital will be in the 50%-55% range through 2022, compared with
64.4% in 2020, while its FFO to debt remains in the high-30% to
low-40% area through 2022.
"We could lower our rating on ATSG over the next year if aircraft
lease rates weaken or the company has difficulty retaining or
expanding its business with some of its largest customers, causing
its EBIT interest coverage to fall below 3.5x and its debt to
capital to exceed 60% for a sustained period.
"Although unlikely over the next year, we could raise our rating on
ATSG if the demand for cargo aircraft increases significantly or
the company further pays down its debt such that its debt to
capital improves below 45% while its EBIT interest coverage rises
above 3.5x and its FFO to debt expands above 35% for a sustained
period. In addition to improvement in its credit metrics, we would
also require the company to increase the diversity of its customer
base before raising our rating."
ATSG owns and leases cargo aircraft and provides airline
operations, ground services, and aircraft modification,
maintenance, and other support services to delivery companies,
airlines, freight forwarders, and the U.S. government. The
company's fleet of 106 aircraft (100 owned, 6 leased) as of Dec.
31, 2020, comprised 86 freighters, 16 passenger aircraft, and four
combination passenger-freight aircraft.
The company owns and leases aircraft through its wholly-owned
subsidiary Cargo Aircraft Management Inc. (CAM) and provides ACMI,
CMI, and charter services through its three airline
subsidiaries--ABX Air, Air Transport International, and Omni Air
International (which, combined, it refers to as the ACMI segment).
In November 2018, the company acquired Omni Air, through which it
provides full-service passenger charters to the DoD, other
government agencies, and commercial customers.
-- US real GDP expands by 6.5% in 2021 and 3.1% in 2022;
-- Revenue increases by the mid-single-digit percent area in 2021
and 2022 on the continued expansion of its fleet supported by the
growing demand for air transportation to support the expanding
level of e-commerce;
-- S&P Global Ratings-adjusted EBIT margins improve to the
mid-teens percent area in 2021, due mainly to inflows from the
federal PSP (which we treat as an offset to its operating
expenses), reverting to close to 2020 levels in the low-teens
percent area in 2022; and
-- Capital spending of about $450 million-$500 million annually
through 2022.
Based on these assumptions, S&P arrives at the following credit
measures:
-- EBIT interest coverage in the high-4x area in 2021 and the
mid-3x area in 2022;
-- Debt to capital of about 50%-55% area through 2022; and
-- FFO to debt remains in the high-30% to low-40% area through
2022.
S&P said, "We revised our assessment of ATSG's liquidity to strong
from adequate to reflect its prudent risk management and sufficient
liquidity sources. We expect the company's liquidity sources to be
about 2.2x its uses over the next 12 months and approximately 2.1x
its uses over the following 12 months."
Principal liquidity sources:
-- Cash and cash equivalents of about $39 million as of Dec. 31,
2020;
-- $446 million of availability under the company's $600 million
revolving credit facility;
-- FFO of about $500 million-$550 million per year; and
Modest proceeds from asset sales.
Principal liquidity uses:
-- Required annual debt amortization of $16.5 million in 2021 and
$33 million in the following 12 months;
-- Modest working capital outflows; and
-- Capital spending of $450 million-$500 million annually.
S&P said, "Our liquidity analysis reflects the company's current
status and is not pro forma for the ongoing/proposed transactions
related to the upsizing of its revolver or its senior unsecured
note add-on. However, we expect our liquidity assessment to remain
unchanged following completion of those transactions."
The company's senior credit agreement requires it to maintain
aircraft collateral coverage equal to 125% of its total outstanding
term loans and revolving credit facilities. Additionally, the
company is required to maintain total debt to EBITDA of less than
4.25x, a secured debt leverage ratio of less than 3.5x, and a
fixed-charge coverage ratio of above 1.25x. The agreement also
restricts the amount of dividends the company can pay and the
common stock it can repurchase to $100 million during any calendar
year provided its total secured debt to EBITDA is under 3.5x
(incorporating the potential dividends or share repurchases). The
company was in compliance with is covenants as of Dec. 31, 2020,
and S&P expects it to remain in compliance with its covenant
requirements over the next year.
S&P said, "Our 'BB' issue-level rating and '5'recovery rating on
ATSG's unsecured notes reflects our expectation for modest
(10%-30%; rounded estimate: 10%) recovery in the event of a
default.
We revised our recovery rating on these notes to '5' from '6'
(0%-10%; rounded estimate: 0%) to reflect the lower amount of
secured debt in the company's revised capital structure.
"On April 6, 2021, ATSG upsized its revolving credit facility to $1
billion and borrowed from the facility to fully repay its $615
million term loan due 2024. Upon the completion of the proposed
$150 million unsecured note add-on, the company plans to reduce the
size of its revolver to $850 million. Our recovery analysis
incorporates ATSG's revised capital structure, including the
planned reduction in its revolver commitment.
"Our simulated default scenario contemplates a default occurring in
2026 due to a prolonged economic downturn that causes its customers
to opt out of, or decline to renew, their leases. A material
decline in ATSG's revenue amid rising competitive pressure would
adversely affect its margins and cash flow."
-- Year of default: 2026
-- S&P said, "We use a discrete asset valuation to estimate the
company's enterprise value at emergence. Specifically, we
depreciate the current appraised values of all of the owned
aircraft in its fleet to the default year and then apply distressed
realization rates of 40%-65% depending on the desirability of the
aircraft."
-- Net enterprise value (after 5% administrative costs): $824
million
-- Total value available to secured debt: $824 million
-- Total secured obligations: $750 million
-- Total value available to unsecured claims: $75 million
-- Senior unsecured debt claims: $665 million
--Recovery expectations: 10%-30% (rounded estimate: 10%)
ALLEN SUPPLY: Asks Court to Extend Plan Exclusivity Thru July 13
----------------------------------------------------------------
The Allen Supply & Laundry Service, Inc. requests the U.S.
Bankruptcy Court for the District of New Jersey to extend the
exclusive periods during which the Debtor may file a Plan and to
obtain confirmation of a plan to July 13, 2021.
According to the Certification of Herbert Allen, the president, and
stockholder of The Allen Supply & Laundry, Inc., the Debtor has
entered into a contract to sell the Debtor's real estate,
equipment, and related assets and the buyer's due diligence period
expires on April 18, 2021, and they expect to file a sale motion
shortly thereafter if all goes well.
Since the filing of the bankruptcy petition, the Debtor has made
good faith progress in this case. The Debtor has consummated a sale
of its customer accounts, certain equipment, and vehicles, which
should generate funds to pay its creditors. Weekly payments from
the Buyer are supposed to commence the last week of March for a 65
week period. Moreover, the Debtor has the pending sale of its real
estate and equipment as set forth herein. The Debtor has filed all
monthly operating reports and paid all U.S. Trustee fees.
A copy of the Certification of Herbert Allen in support of
extending the Debtor's exclusivity period is available at
https://bit.ly/3rSEhLu from PacerMonitor.com.
About The Allen Supply & Laundry Service
Founded in 1920, The Allen Supply & Laundry Service, Inc. provides
dry cleaning and laundry services. The Allen Supply & Laundry
Service sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D.N.J. Case No. 19-10132) on January 3, 2019. At the time
of the filing, the Debtor was estimated to have assets of $1
million to $10 million and liabilities of less than $1 million.
The Honorable John K. Sherwood oversees the case.
The Debtor tapped Wasserman, Jurista & Stolz, P.C. as bankruptcy
counsel; New & Karfunkel, P.C. as special counsel; and Speed
Financial Services, Inc. as an accountant. Beechwood Capital
Advisors was hired as the Debtor's business broker; and Re/Max
Traditions as its real estate broker.
ARNOLD BAKER: Proposes Auction Sale of Interests in Baker Ready Mix
-------------------------------------------------------------------
Arnold B. Baker asks the U.S. Bankruptcy Court for the Southern
District of Texas to authorize the auction sale of his 51%
Membership Interests and ownership in Baker Ready Mix, LLC,
together with his rights of management and control of the company,
to management in Baker Ready Mix, LLC, a Louisiana Limited
Liability Company.
Objections, if any, must be filed within 21 days of the date the
notice was served.
The sale of stock will be in accordance with and subject to the
terms of the Baker Ready Mix Operating Agreement including the
Right of First Refusal by WDD Investments, LLC, the Super Majority
voting Requirements (Sec. 4.6) and the Tag-Along Provision
regarding sale of the 49% ownership interest (Sec 8.11).
Upon completion of stock after motion and hearing, Arnold Baker's
management rights and duties of Baker Ready Mix are terminated. He
will then execute a formal letter of resignation as manager/member
of Baker Ready Mix.
The auction will take place at a hearing date and time to be set by
the Court and noticed by the Debtor.
The Motion and Notice of Auction hearing will be served on those
interested persons who have appeared electronically in the case
plus any other person who has contacted Mr. Baker in writing
regarding the sale of the Ownership and Management Interests.
Credit bids against any amount due by Baker Ready Mix, the Debtor,
or any corporation, partnership, or other entity in which the
Debtor has or had an ownership interest will not be allowed. Any
person, irrespective of whether they have a claim in the bankruptcy
case may bid.
The minimum opening bid will be not less than $5,000, with bid
increments of not less than $2,500. The highest bidder at the
hearing will be the winning bidder of the 51% Ownership and
Management Interests. All bids will be cash bids payable within
three days of the auction to Arnold B. Baker, Debtor-in-Possession
by cashier's check, to be delivered to Arnold B. Baker,
Debtor-in-Possession, c/o H. Gray Burks, IV, Law Office of Gerald
M. Shapiro, LLP, 13105 Northwest Freeway, Suite 1200, Houston, TX
77040. All bidding will be closed and the winning bid will be
declared at the conclusion of the auction hearing in the Court.
The sale will be completed upon payment by the winning bidder.
The rights and duties of the 51% Ownership and Management Interests
is subject to and set forth in the First Amended and Restated
Operating Agreement of Baker Ready Mix, LLC. The Operating
Agreement includes that the 49% interest owner has a right of first
refusal on sale of the 51% Ownership and Management Interests, that
management rights are subject to super majority requirement of 75%
of outstanding interests, and that the minority 49% interest owner
has a Tag-along Right to sell his interest to the winning bidder
for the same price as the purchase price for the 51% Ownership and
Management Interests.
Baker Ready Mix executed a note and security agreement to SBN V
FNBC LLC, who claims a total amount due by Baker Ready Mix of
$3,409,744.59 as of Feb. 16, 2021. This amount does not include
any accrued and unpaid taxes of Feb. 16, 2021 due to Plaquemines
Parish, the City of New Orleans, or any other Louisiana taxing
entities. The most recent certified appraisals of the assets of
Baker Ready Mix are found in the Certified Appraisal of Movable
Assets dated Feb. 3, 2020 prepared by Revpro and Associates; the
Certified Appraisal Report of the real property at 1118 Engineers
Road, Belle Chasse, Louisiana 70037 prepared by Pelican State Real
Property Appraisal, LLC dated Sept. 4, 2009; and the Certified
Appraisal Report for the real property at 2800 & 2829 Frenchmen
Street, New Orleans, Louisiana 70122-3631 prepared by Pelican State
Real Property Appraisal, LLC dated Sept. 4, 2009.
The appraisal amounts are: i) Movable assets - $640,020, ii)
Engineers Road property - $550,000, and iii) a complete appraisal
to Frenchmen street properties - $315,000.
Each of these three full appraisals may be requested electronically
by any interested person by submitting a request to Arnold B. Baker
c/o H. Gray Burks, IV at gburks@logs.com. The appraisals will be
provided within five working days of request, either in hard copy,
drive, or electronic delivery such as email at Mr. Baker's
discretion.
The two Frenchmen properties may be subject to a Triple Net Lease
between A&E Leasing, LLC and Rhino Ready Mix LLC on the 2800
Frenchmen Street and 2829 Frenchmen Street, New Orleans, Louisiana
properties. Further information regarding the status of the Triple
Net Lease, lease payments, and current property condition may be
available from SBN through its attorney of record, Jake Airey at
jairey@shergarner.com.
The Debtor respectfully prays that the Court (i) sets a hearing on
at least 21 days ' notice (to afford any interested person to
object to terms of the sale as set forth in the Motion and/or to
organize a purchase bid); and (ii) grants him such other relief, in
equity or at law, to which he may show himself justly entitled.
A copy of the Operating Agreement is available at
https://tinyurl.com/4hhjbyhx from PacerMonitor.com free of charge.
About Arnold B. Baker
Arnold B. Baker, dba Abbaker Enterprises, LLC, dba Arnoldbbaker,
LLC, filed voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-33465) on July 7,
2020.
ASTROTECH CORP: Raj Mellacheruvu to Resign as VP, COO
-----------------------------------------------------
Raj Mellacheruvu informed Astrotech Corporation of his intention to
resign from his positions as vice president and chief operating
officer of the Company and as chief executive officer of the 1st
Detect subsidiary, effective April 20, 2021.
Mr. Mellacheruvu's resignation is not in connection with any known
disagreement with the Company on any matter, as disclosed in a Form
8-K filed with the Securities and Exchange Commission.
About Astrotech
Astrotech (NASDAQ: ASTC) -- http://www.astrotechcorp.com-- is a
science and technology development and commercialization company
that launches, manages, and builds scalable companies based on
innovative technology in order to maximize shareholder value. 1st
Detect develops, manufactures, and sells trace detectors for use in
the security and detection market. AgLAB is developing chemical
analyzers for use in the agriculture market. BreathTech is
developing a breath analysis tool to provide early detection of
lung diseases. Astrotech is headquartered in Austin, Texas.
Astrotech reported a net loss of $8.31 million for the year ended
June 30, 2020, compared to a net loss of $7.53 million for the year
ended June 30, 2019. As of Dec. 31, 2020, the Company had $23.58
million in total assets, $4.77 million in total liabilities, and
$18.81 million in total stockholders' equity.
Armanino LLP, in San Francisco, California, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated Sept. 8, 2020, citing that the Company has suffered recurring
losses from operations and has net cash flows deficiencies that
raise substantial doubt about its ability to continue as a going
concern.
AXIA REALTY: Wants Solicitation Exclusivity Extended Thru June 23
-----------------------------------------------------------------
Debtor Axia Realty, LLC requests the U.S. Bankruptcy Court for the
Southern District of New York to extend the exclusive periods
during which the Debtor may solicit acceptances of the Chapter 11
plan through and including June 23, 2021.
Since the Debtor filed its chapter 11 case, it has administered the
property of the estate efficiently and economically and has only
been pending for approximately five months. The Debtor has made
some progress in negotiating with its larger creditor constituents,
and the Debtor is in preliminary discussions with the non-sponsor
unit owners, Phoenix Capital Finance Ltd. and Levant Partners.
Also, the Debtor has demonstrated significant prospects for
confirming its Plan (or an amended plan) in that it has resolved
several of the issues which led to the initial Chapter 11 filing
and is attempting to negotiate a consensual plan with key creditor
constituents.
On February 18, 2021, the United States Trustee filed a motion
pursuant to Bankruptcy Code section 1112(b) to convert or dismiss
the Debtor's case, based solely on the Debtor's alleged failure to
provide evidence of proper liability and property insurance
relating to the Debtor's Retained Condominium Units at the
Property. The UST Motion has now been adjourned to April 6, 2021,
based upon the fact the Debtor recently obtained insurance coverage
on the Retained Condominium Units.
The Debtor has paid all outstanding common charges on its Retained
Condominium Units as well as real estate taxes. The Debtor has
submitted a proposed seventh amendment to the Offering Plan to the
New York AG's Office and received feedback. The Debtor has retained
a broker and is in the process of performing punch list work and
getting one of the Retained Condominium Units in condition to be
properly marketed. An extension of the Exclusive Solicitation
Period is necessary to ensure the Debtor's progress continues.
The Debtor is current on payment of all of its post-petition
obligations and has sufficient liquidity to pay its administrative
expenses in the ordinary course. The Debtor filed a complaint
against the Guardian seeking to enforce the Debtor's rights under
the prepetition prenuptial agreement between the Debtor's two
members, Antonia Milonas, and her husband Spiros Milona, which
governs the rights of Spiros and Antonia with respect to the Debtor
and which is specifically incorporated in the Debtor's Operating
Agreement. The Debtor's Adversary Proceeding seeks to compel the
Guardian to comply with the prenuptial agreement and pay the common
charges on all of the Debtor's Retained Condominium Units. The
Guardian filed an answer to the complaint, thus Adversary
Proceeding remains pending.
The unresolved contingencies in the Debtor's case require
additional time to address, including the Debtor's potential claims
against Levant, the validity of Phoenix's judgment, and the pending
Adversary Proceeding.
The Debtor's requested extension of the Exclusive Solicitation
Period is not a negotiation tactic, nor an attempt to artificially
delay the conclusion of this Chapter 11 case, nor to hold creditors
hostage to an unsatisfactory plan proposal.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/39pEYFK from PacerMonitor.com.
About Axia Realty
New York-based Axia Realty, LLC filed a Chapter 11 petition (Bankr.
S.D.N.Y. Case No. 20-12511) on October 26, 2020. Antonia Milonas,
manager, signed the petition. In its petition, the Debtor disclosed
$45,750,000 in assets and $9,197,428 in liabilities.
Judge Martin Glenn presides over the case.
The Debtor tapped Tarter Krinsky & Drogin LLP as bankruptcy
counsel; Vernon Consulting Inc. as financial advisor and
accountant; and The Corcoran Group as its real estate broker.
BAUMANN & SONS: Unsecureds to Recover At Least 30% Under Plan
-------------------------------------------------------------
Baumann & Sons Buses, Inc., et al., submitted a Plan and a
Disclosure Statement.
At this point in the Chapter 11 Cases, the Debtors have liquidated
substantially all of their assets through Bankruptcy Court-approved
sale transactions and no longer maintain active business
operations. Presently, their Estates continue to be administered
jointly for wind down purposes and under the Bankruptcy Court's
supervision.
An important feature of the Plan involves the substantive
consolidation of the Debtors' assets and liabilities, including,
without limitation, for the purposes of voting and distribution,
with any intercompany or duplicate claims eliminated. What this
means is that Creditors who may have filed duplicate proofs of
claim against more than one of the Debtors will only receive a
single ballot to vote on the Plan and should expect to receive a
single recovery from a common pool of the Debtors' consolidated
assets.
Another important aspect of the Plan is how it seeks to implement
certain settlements and compromises between and among certain
parties in interest in these Chapter 11 Cases. These settlements
include the Insider Settlement reached between the Debtors, their
Estates, the Official Committee, and the Debtor Affiliates. As part
of that settlement and subject to the occurrence of the Effective
Date, the Debtor Affiliates have agreed to pay the Insider
Settlement Contribution which will be used to fund an initial
distribution to Holders of Allowed Claims as soon as practicable
following the Effective Date of the Plan. The Plan provides for
releases in favor of the Debtor Affiliates from potential claims or
causes of action in exchange for the Insider Settlement
Contribution and other consideration provided by the Debtor
Affiliates.
The second settlement that the Debtors seek approval of in the Plan
is a settlement with the Local 252 which provides for, among other
things, the allowance and treatment of the Local 252 Priority
Claim.
The Plan also proposes a more simplified corporate structure for
the final liquidation phase and wind down of these Debtors. As of
the Effective Date, all property interests of the Debtors shall
automatically be assigned and otherwise transferred to ABA (the
parent company). Control over ABA will be thereafter vested in the
Plan Administrator. At that time, the Equity Interests in the
Debtors and all management rights of the Principals shall terminate
in favor of the Plan Administrator. Following the Effective Date
then, decision making and control over the Debtors and the Estates
will be vested only in the Plan Administrator. The Plan
Administrator will receive appropriate funding and will be
empowered to, among other things, review, analyze and object to
claims, or, as appropriate, continue the prosecution of those
objections already being pursued by the Debtors as of the Effective
Date, and to evaluate and potentially pursue the Retained Causes of
Action and make Distributions to holders of Allowed Claims. The
Plan Administrator shall be supervised by, and shall report to, the
Oversight Committee. Apart from the activity that will continue by
the Plan Administrator for ABA and as set forth in the Plan, the
Subsidiary Debtors will be wound down and dissolved as soon as
reasonably practicable after the Effective Date of the Plan.
Holders of unsecured claims in Class 4 will each receive its pro
rata share from the remaining portion of the Plan Consummation
Fund, after satisfaction in full of senior Claims (but not
including Class 3) and until the Class 5 Participation Threshold
has been achieved. As of the filing of this Disclosure Statement,
approximately 350 parties have filed or otherwise hold scheduled
Class 4 Claims in the aggregate amount of approximately $165
million (including duplication). The Debtors estimate that after
reconciliation of such claims is complete and either negotiations
or objections are concluded, the aggregate amount of Class 4 Claims
will total between approximately [$16-$23] million. Class 4 will
recover greater than 30% of their claims. Class 4 is impaired.
Class 5 Subordinated Insider Claims are Allowed as of the Effective
Date in the aggregate amount of $9 million. Each Holder of such
Allowed Subordinated Insider Claim shall receive their pro rata
share, together with Class 4, from the remaining portion of the
Plan Consummation Fund after the Class 5 Participation Threshold
has been achieved. Class 5 is impaired.
Class 7(a) consists of all Equity Interests of the Principals in
ABA. Each Holder of an Equity Interest in ABA shall be entitled to
the pro rata share of any remaining portion of the Plan
Consummation Fund after full and final satisfaction of all senior
Claims in Classes 4 and 5 by the Plan Administrator. Class 7(a) is
impaired.
The Plan shall be funded by a combination of the proceeds of the
sale of the Debtors' Assets, the Insider Settlement Contribution,
and proceeds from liquidation of remaining Assets, including Causes
of Action.
Attorneys for the Debtors:
Sean C. Southard
Lauren C. Kiss
KLESTADT WINTERS JURELLER SOUTHARD & STEVENS, LLP
320 Old Country Road, Suite 203
Garden City, New York 11530
Tel: (212) 972-3000
Fax: (212) 972-2245
A copy of the Disclosure Statement is available at
https://bit.ly/3t4Rz94 from PacerMonitor.com.
About Baumann & Sons Buses
Baumann & Sons Buses, Inc. and ACME Bus Corp., along with their
non-debtor parent and two affiliates, operated a large school bus
transportation concern with contracts with a number of school
districts in Nassau, Suffolk, and Westchester Counties.
On May 27, 2020, Nesco Bus Maintenance and several other creditors
filed involuntary petitions under Chapter 7 of the Bankruptcy Code
against Baumann & Sons and ACME Bus in the U.S. Bankruptcy Court
for the Eastern District of New York. On July 1, 2020, the Court
converted the cases to cases under Chapter 11 (Bankr. E.D.N.Y. Lead
Case No. 20-72121).
On Aug. 3, 2020, Baumann & Sons' affiliates, ABA Transportation
Holding Co. Inc., Brookset Bus Corp., and Baumann Bus Company,
Inc., each filed a voluntary petition for relief under Chapter 11
of the Bankruptcy Code. The cases are jointly administered with
Baumann & Sons (Bankr. E.D.N.Y. Case No. 20-72121) as the lead
case.
Judge Robert E. Grossman oversees the cases. The Debtors tapped
Klestadt Winters Jurellersouthard & Stevens, LLP serves as their
legal counsel; Smith & Downey, PA as their special counsel; and
Boris Benic and Associates LLP as their auditor. On July 27, 2020,
the U.S. Trustee appointed a committee of unsecured creditors.
The Committee selected Silverman Acampora LLP as its bankruptcy
counsel and Ryniker Consultants LLC as its financial advisors.
BAY HARBOR: Lincoln Buying 2014 Mercedes-Benz E350 for $17K Cash
----------------------------------------------------------------
Bay Harbor Investment Group, LLC, asks the U.S. Bankruptcy Court
for the Northern District of Texas to authorize the sale of its
2014 Mercedes-Benz E350 to Pompano Ford Lincoln for $17,000 cash.
The purpose of the Chapter 11 Case is to consummate the sale of the
Debtor's primary real estate asset -- the 2,970-acre High View
Ranch in Midlothian, Texas.
Among the minor assets of the estate is the Automobile. The Debtor
valued its interest in the Automobile at $21,0001 in its schedules.
The Automobile has been at the Debtor's managing member's
residence in Florida and, after filing the schedules, discovered
the Automobile was in poor condition and inoperable, de-valuing the
Automobile.
The Debtor sought offers to purchase the Automobile from several
potential purchasers and ultimately obtained the highest offer from
the Purchaser. The Purchaser sent a check for the proposed
purchase price to the Debtor's counsel and the funds are being held
in trust pending approval of the Motion. The Debtor asks the
Court's approval of the sale of the Automobile to the Purchaser in
exchange for a $17,000 cash payment.
The Debtor has determined, in its business judgment, that the best
interests of its estate and its creditors would be furthered by the
sale of the Automobile in consideration for a payment of $17,000 to
its estate. It does not believe that there would be another buyer
who would pay more for the Automobile and an auction process would
be cost-prohibitive under these circumstances. The Debtor's estate
will also benefit from Transaction because it will no longer need
to pay insurance premiums on the Automobile.
In order to maintain the sale, the Debtor seeks to close quickly
and preserve value for the estate. Therefore, it respectfully asks
that the Court waives the 14-day stay imposed by Federal Rule of
Bankruptcy Procedure 6004(h).
About Bay Harbor Investment Group, LLC
Based in Midland, Texas, Bay Harbor Investment Group, LLC
primarily
engages in renting and leasing real estate properties.
Bay Harbor Investment sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case No. 20-42757) on Aug. 31,
2020. Bay Harbor Investment President Thomas Kelly signed the
petition.
At the time of the filing, Debtor had estimated assets of between
$10 million and $50 million and liabilities of the same range.
Judge Edward L. Morris oversees the case. Crowe & Dunlevy, P.C.
is
Debtor's legal counsel.
BIG KAT: Seeks to Hire Nima Taherian as Legal Counsel
-----------------------------------------------------
Big Kat Daddys, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Texas to hire the Law Office of Nima
Taherian as its legal counsel.
The firm's services include:
i. analyzing the financial situation and rendering legal
advice to the Debtor;
ii. advising the Debtor with respect to its rights, duties, and
powers in its Chapter 11 case;
iii. representing the Debtor at all hearings and other
proceedings;
iv. preparing legal papers;
v. representing the Debtor at the meeting of creditors;
vi. representing the Debtor in judicial or administrative
proceeding where its rights may be litigated or otherwise
affected;
vii. preparing a disclosure statement and Chapter 11 plan of
reorganization;
viii. assisting the Debtor in analyzing the claims of creditors
and in negotiating with such creditors; and
ix. assisting the Debtor in other matters relating to its
bankruptcy case.
Nima Taherian, Esq., the firm's attorney who will be handling the
case, will be paid at the hourly rate of $300 and will receive
reimbursement for work-related expenses incurred.
Ms. Taherian disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
Nima Taherian can be reached at:
Nima Taherian, Esq.
Law Office of Nima Taherian
701 N. Post Oak Rd, Ste 216
Houston, TX 77024
Tel: (713) 540-3830
Fax: (713) 862-6405
Email: nima@ntaherian.com
About Big Kat Daddys
Big Kat Daddys, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Texas Case No. 21-30895) on March 11,
2021. Jayce Thacker, managing member, signed the petition. At the
time of the filing, the Debtor had between $100,001 and $500,000
million in both assets and liabilities.
Judge Jeffrey P. Norman oversees the case.
Nima Taherian, Esq., at the Law Office of Nima Taherian, represents
the Debtor as counsel.
BLACKTOP INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------------
Debtor: Blacktop Industries LLC
1335 Wald Rd Ste 106
New Braunfels, TX 78132-5122
Business Description: Blacktop Industries LLC --
https://blacktopindustries.net -- is a
family owned and operated traffic products
Company based in New Braunfels, Texas. The
Company sells a full range of traffic
products including: posts, sign hardware,
roll up signs, sign stands, traffic cones,
barricades, aluminum sign blanks, rolled
sheeting, and delineators.
Chapter 11 Petition Date: April 8, 2021
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 21-50412
Judge: Hon. Ronald B. King
Debtor's Counsel: Robert Lane, Esq.
THE LANE LAW FIRM
6200 Savoy Dr Ste 1150
Houston, TX 77036-3369
Tel: (713) 595-8200
E-mail: chip.lane@lanelaw.com
Total Assets: $900,869
Total Debts: $1,472,690
The petition was signed by Cherylan Chappell, president.
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/7UC44RA/Blacktop_Industries_LLC__txwbke-21-50412__0001.0.pdf?mcid=tGE4TAMA
BLOOMIN' BRANDS: S&P Alters Outlook to Stable, Affirms 'B+' ICR
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating and
revised the outlook to stable from negative on Tampa, Fla.-based
casual dining restaurant company Bloomin' Brands Inc.
S&P said, "At the same time, we assigned our 'BB' issue-level
rating to the senior secured credit facilities. The recovery rating
is '1', indicating our expectations for very high (90%-100%;
rounded estimate: 95%) recovery in the event of default.
Concurrently, we assigned our 'B' rating to the proposed unsecured
notes. The recovery rating is '5' (10%-30%; rounded estimate:
25%).
"The stable outlook reflects our increasing confidence for material
credit measure improvement and Bloomin's demonstrated ability to
weather a challenging 2020 by pivoting to off-premise sales and
controlling costs."
The outlook revision reflects Bloomin's ability to navigate
pandemic-related challenges over the last year, prospects for
improving performance, and an improved liquidity position following
the proposed transactions. S&P said, "We expect sales to recover in
2021 as the economy rebounds and fewer restrictions on social
interactions support more dine-in demand. We project revenues will
remain about 10% below those of 2019 this year but that Bloomin'
should benefit from cost controls and better-than-anticipated
customer adoption of its takeout and delivery offerings. In
addition, we expect an ongoing reduction in funded debt to improve
credit measures. We project adjusted leverage of less than 5x by
the end of 2021 and improved free operating cash flow (FOCF)
approaching $100 million. We expect further improvement in 2022
should place the top line close to that of 2019 and lower debt will
help strengthen credit metrics."
The refinancing mitigates capital structure concerns. The proposed
capital markets transactions will improve liquidity by extending
maturities and reducing outstanding revolver borrowings. Under the
proposed terms, Bloomin' will continue to be subject to a total net
leverage covenant under the credit facility, stepping down to 4.5x
in the third quarter of 2021, but S&P expects ample cushion.
S&P believes longer-term prospects will hinge on improving
profitability while navigating the still uncertain demand for
casual dining. Bloomin's profitability has lagged peers over the
last several years. Efforts to improve appear to be credible and
gaining traction, notwithstanding the significant headwind
associated with the COVID-19 pandemic and uncertain return of
overall demand. These efforts include simplifying operations,
optimized marketing spending, and tighter overhead cost controls.
Still, the company will need to continue to execute its plans to
improve margins toward those of peers and increasing sales and
brand relevance will be critical.
Over the past year, Bloomin' made progress in off-premise sales
adoption, which mitigated the impact of limited capacity and demand
for in-restaurant dining. In addition, the company is supplementing
sales through the launch of a virtual brand, Tender Shack, which is
expanding rapidly.
S&P Global Ratings believes there remains high, albeit moderating,
uncertainty about the evolution of the coronavirus pandemic and its
economic effects and for widespread immunization, which will help
pave the way for a return to more normal levels of social and
economic activity, achievable by most developed economies by the
end of the third quarter. Still, customer behaviors post-vaccine in
terms of casual dining relative to other experiential spend adds an
element of risk. For this reason, S&P considers the relatively good
off-premise performance of Bloomin', with the company retaining
approximately 50% of the incremental off-premise business since
dining rooms reopened in 2020. The apparent stickiness of consumer
behavior into 2021 is a positive signal.
Its key Outback Steakhouse brand made progress over the last year.
Bloomin' operates across four brands, but is concentrated in its
Outback Steakhouse banner, which accounts for over 50% of sales.
S&P said, "We believe Outback's competitive standing is trending
better in the highly competitive mid-price steak landscape. In
part, we believe progress in consumer value perception supported
results, and Outback's Brazilian operations provide some
diversification benefits." Sales at its fish and premium steak
restaurants Bonefish Grill and Fleming's Prime Steakhouse & Wine
Bar, which account for about 20% of sales, significantly declined
partly because of their higher prices and less suitability to
takeout. Carrabba's Italian Grill, which accounts for about 15% of
sales, had the highest mix of off-premise sales and delivery and
takeout will likely continue to be important sales channels for the
brand going forward.
As with most other casual dining companies, Bloomin' primarily
operates restaurants, with about 20% of its units franchised. S&P
believes this gives it good brand control and can accelerate
execution at the store level. But it increases exposure to
operating risks such as those over the past year relative to
franchisor restaurants more typical of the quick-service segment.
S&P said, "We believe the dynamic conditions of the casual dining
sector present elevated risks. Demand conditions in casual dining
remain in flux given uncertainty around consumer behavior coming
out of the pandemic, including potentially lingering concerns over
social distancing, possible setbacks in the vaccination progress,
and newly adopted food-at-home habits. Casual dining was challenged
even before the pandemic by changing consumer preferences. We
believe it is more subject to volatility based on underlying
economic fluctuations. Maintaining relevance across its suite and
driving improved profitability, which has lagged peers, are both
important characteristics we consider relevant to the credit
profile. This leads us to apply a negative one-notch comparable
rating analysis modifier to our anchor score on Bloomin'.
"The stable outlook reflects our expectation for improving sales
and EBITDA, albeit below pre-COVID-19 performance, in 2021. We
expect this to generate meaningfully positive FOCF, which will be
used to reduce debt and result in adjusted leverage of less than 5x
this year, improving further in 2022."
S&P could lower the ratings if:
-- Operating performance does not maintain a positive trajectory,
resulting in our expectation that adjusted leverage will be
sustained at more than 5.5x; or
-- Bloomin's ability to compete effectively in a changing
landscape weakens, causing us to reassess its competitive
position.
S&P could raise the ratings if:
-- Restaurant sales rebound faster than S&P anticipates, leading
to higher earnings and better cash flow generation than it projects
in its base case, including adjusted leverage of about 4x or less;
and
-- The competitive position of Bloomin's brand portfolio is
well-positioned for long-term success, including prospects for
organic sales growth and profitability improvements.
BLUE STAR: Unit Signs $5M Loan Agreement With Lighthouse Financial
------------------------------------------------------------------
John Keeler & Co. Inc., which is wholly owned by Blue Star Foods
Corp., and Coastal Pride Seafood, LLC entered into a Loan and
Security Agreement with Lighthouse Financial Corp.
Under the agreement, Lighthouse made available to John Keeler & Co.
and its wholly owned subsidiary, Coastal Pride Seafood, a
$5,000,000 revolving line of credit for a term of 36 months,
renewable annually for one-year periods thereafter. Amounts due
under the Line of Credit will be represented by a Revolving Credit
Note issued to Lighthouse by the borrowers.
Pursuant to the terms of the Loan Agreement, the advance rate of
the Line of Credit is 85% with respect to eligible accounts
receivable and the lower of 60% of the borrowers' eligible
inventory, or 80% of the net orderly liquidation value, subject to
an inventory sublimit of $2,500,000. The inventory portion of the
loan shall never exceed 50% of the outstanding balance. Interest
on the Line of Credit is the prime rate (with a floor of 3.25%),
plus 3.75%. The borrowers paid Lighthouse a facility fee of
$50,000 on the day after the Closing Date, and will pay the lender
an additional facility fee of $25,000 on each anniversary of the
Closing Date during the Initial Term and each Renewal Term.
The Line of Credit is secured by a first priority security interest
on all of the assets of each borrower. Pursuant to the terms of a
Guaranty Agreement, Blue Star guaranteed the obligations of the
borrowers under the Note.
John Keeler & Co. and Coastal utilized $784,450 borrowed from
Lighthouse pursuant to the Loan Agreement to repay all the
outstanding indebtedness owed to the borrowers' prior lender, ACF
Finco I, LLP, as of March 31, 2021. As a result, all obligations
owed to ACF Finco were satisfied and the loan agreement with ACF
Finco was terminated in its entirety.
About Blue Star Foods
Blue Star Foods Corp. is a sustainable seafood company that
processes, packages and sells refrigerated pasteurized Blue Crab
meat, and other premium seafood products. Its products are
currently sold in the United States, Mexico, Canada, the Caribbean,
the United Kingdom, France, the Middle East, Singapore and Hong
Kong. The company headquarters is in Miami, Florida (United
States), and its corporate website is:
http://www.bluestarfoods.com/
Blue Star reported a net loss of $5.02 million for the 12 months
ended Dec. 31, 2019, compared to a net loss of $2.28 million for
the 12 months ended Dec. 31, 2018. As of Sept. 30, 2020, the
Company had $9.38 million in total assets, $11.09 million in total
liabilities, and a total stockholders' deficit of $1.71 million.
MaloneBailey, LLP, in Houston, Texas, the Company's auditor since
2014, issued a "going concern" qualification in its report dated
May 29, 2020, citing that the Company has suffered recurring losses
from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
BMSL MANAGEMENT: Claims Will be Paid from Property Sale/Refinance
-----------------------------------------------------------------
BMSL Management, LLC, filed with the U.S. Bankruptcy Court for the
Eastern District of New York a Disclosure Statement for the Plan of
Reorganization on April 6, 2021.
The principal place of business for the Debtor is 131-09 Hillside
Avenue, Richmond Hill, New York 11418. The Debtor is a single asset
real estate company. The Debtor has continued to operate its
business since the filing of the petition, and has continued to
receive rent from JFK Liquor Store.
Class 1 consists of the secured claim of Hillrich Holding Corp. in
the amount of $3,001,867 as of April 30, 2021. This creditor will
be paid on the effective date of the Plan 100% of its claim from
the proceeds of a sale or refinance of the real property. This
class is not impaired.
Class 2 consists of the claim of MLF3 Atlantic, LLC, holding a
secured mortgage lien on the Real Property which is a collateral
guaranty on the creditors' loan to a third-party entity. This
claim is in the approximate amount of $824,024. This Claim will
not receive a distribution under the Plan. It is expected it will
be paid in full by third parties in connection with the Chapter 7
case of Atlantic 111st, LLC Case No: 19-73137. This class is not
impaired.
Class 4 consists of Jarnail Singh as the sole member of the LLC.
The equity rights of the Debtor will remain unaffected by the
Plan.
The Plan shall be funded from the proceeds of a sale of the Real
Property to Zara 9 Brothers, LLC.
A full-text copy of the Disclosure Statement dated April 6, 2021,
is available at https://bit.ly/3dRBb5l from PacerMonitor.com at no
charge.
Proposed Attorneys for Debtor:
Berger, Fischoff & Shumer, LLP
Heath S. Berger, Esq.
6901 Jericho Turnpike, Suite 230
Syosset, New York 11791
Tel: 516-747-1136
E-mail: hberger@bfslawfirm.com
About BMSL Management
BMSL Management LLC filed a Chapter 11 bankruptcy petition (Bankr.
E.D.N.Y. Case No. 20-43621) on Oct. 14, 2020, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by Shiryak Bowman Anderson Gill & Kadochnikov, LLP.
BOMBARDIER INC: S&P Affirms 'CCC+' ICR on Earnings Recovery Plan
----------------------------------------------------------------
S&P Global Ratings affirmed its ratings, including its 'CCC+'
issuer credit rating, on Montreal-based Bombardier Inc.
The negative outlook reflects Bombardier's very high pro forma debt
leverage, refinancing risks, and weak profitability, which make the
company vulnerable to operational missteps.
S&P said, "We expect Bombardier's debt leverage will remain
significant despite anticipated debt repayments. Pro forma the US$6
billion sale of Bombardier Transportation (BT) to Alstom S.A. on
Jan. 29, 2021, Bombardier emerges as a smaller, pure-play business
jet aviation company with 2020 EBITDA of US$200 million against
gross long-term debt of US$10.1 billion (net debt: US$4.7 billion).
For 2021, incorporating adjustments for pension deficit, leases,
and preferred shares, we estimate S&P Global Ratings' adjusted debt
leverage close to 20x, reflecting a still nascent EBITDA recovery
and timing of anticipated debt repayments. We project leverage will
improve to the 11x area by 2022 as the company realizes more than
US$500 million of planned cost savings and repays debt. However, we
believe still-high fixed charges of US$750 million-US$800 million
(principally for interest and capital expenditures [capex]) will
limit material discretionary free cash flow generation and
constrain the company's financial flexibility." Therefore,
Bombardier remains vulnerable to execution risks relating to its
earnings and cash flow recovery plan and depends on very supportive
capital markets and business conditions to meet its financial
commitments.
Refinancing risks remain amid weak cash generation. S&P said,
"Bombardier has about US$4 billion of cumulative long-term debt
maturities in 2021 (including the US$750 million term loan that was
repaid Feb. 19, 2021) and 2022, and we expect the company to
largely address these using the net proceeds from the BT sale of
about US$3.6 billion. However, we estimate negative discretionary
free cash flow of US$550 million-US$600 million over the 2021-2022
period, and the company aims to maintain US$1.5 billion-US$2.0
billion of minimum liquidity to support intro period and seasonal
working capital changes. As a result, we believe Bombardier will
need to bridge the estimated US$1 billion funding shortfall over
the next two years and, more important, address refinancing risks
for its US$1.25 billion senior notes due Jan. 15, 2023 (not
accounting for the US$235 million tender acceptance announced April
5). We understand that management is considering a secured revolver
and other capital management initiatives that, if established,
could make available excess cash to support the 2022 and even a
portion of the 2023 debt repayments."
Bombardier's execution of an ambitious cost take-out is key to
credit stability. The company's five-year initiative to improve pro
forma EBITDA from US$200 million in 2020 to about US$1.5 billion by
2025, is ambitious, but plausible to some extent, in our opinion.
The plan primarily focuses on Bombardier's high-cost structure and
aims to benefit from significantly improved unit cost of the
maturing Global 7500 aircraft, which should be incrementally
visible this year; US$400 million (by 2023) of corporate actions
(including US$150 million from headcount); and growth at the
profitable aftermarket services segment--the latter benefiting from
both higher business jet utilization and market share gain. The
discontinuance of Bombardier's unprofitable Learjet small aircraft
production should also help with profitability beyond 2021. S&P's
base-case scenario assumes these actions translate into more than
US$550 million of incremental EBITDA by 2022 (compared with 2020)
and that the company can generate more than US$150 million of
discretionary free cash flow by 2023.
Bombardier's achievement of this target would position the
company's profitability closer to that of direct peers such as
Gulfstream Aerospace Corp. S&P said, "We also believe demonstrated
progress on Bombardier's cost-cutting initiatives could help
facilitate a refinancing transaction, which we view as critical for
the company. However, rising competitive risks (particularly from
Gulfstream for large aircraft), and the need for the company to
eventually reinvest in its aircraft platforms necessitate a timely
execution of the recovery plan by its new leadership, in our
view.”
The negative outlook reflects Bombardier's very high debt leverage,
refinancing risk relating to the company's senior notes due Jan.
15, 2023, and weak profitability, which make Bombardier vulnerable
to operational missteps along its aggressive earnings recovery
plan.
S&P could lower the ratings on Bombardier if it envisions a default
or distressed exchange in the next 12 months. Conditions supporting
such a scenario are as follows:
-- The company is unable to demonstrate a credible plan to
refinance its 2023 debt maturities within the next 12 months; or
-- S&P believes that the company is failing to execute on stated
cost actions such that reported EBITDA and free cash flow shortfall
will be materially weaker than its base-case scenario increasing
the potential of a liquidity crisis.
Consideration for a stable outlook over the next 12 months will
reflect the company addressing its debt maturities through 2023
while maintaining adequate liquidity and demonstrating a trend of
improving earnings and cash flow consistent with its base-case
scenario.
BOUCHARD TRANSPORTATION: Committee Taps Clyde & Co as Counsel
-------------------------------------------------------------
The official committee of unsecured creditors appointed in the
Chapter 11 case of Bouchard Transportation Co., Inc. and affiliates
seeks approval from the U.S. Bankruptcy Court for the Southern
District of Texas to retain Clyde & Co US LLP as its maritime
counsel.
The firm will render these services:
(a) advise the committee and consult with the Debtors and the
U.S. trustee concerning maritime issues;
(b) review, analyze and respond to pleadings filed by the
Debtors and other parties in interest that implicate maritime
issues, and participate at hearings on such pleadings;
(c) review and analyze maritime-related aspects of the
Debtors' assets, liabilities, agreements, business and operation,
and maritime issues that may arise in the Debtors' Chapter 11
cases; and
(d) provide additional maritime-related support to the
committee and its professionals as requested.
The firm will be paid at these rates:
Partner $750 - $800 per hour
Senior Counsel $450 - $500 per hour
Senior Associates $400 - $450 per hour
Associates $350 - $400 per hour
Clyde & Co is a "disinterested person" as that term is defined in
section 101(14) of the Bankruptcy Code, according to court
filings.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Clyde &
Co. disclosed that:
-- the firm has not agreed to any variations from, or
alternatives to, its standard or customary billing arrangements for
this engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firm has not represented the committee in the 12 months
prior to the Debtors' Chapter 11 filing; and
-- the firm expects to develop a prospective budget and
staffing plan to comply with the U.S. trustee's request for
information and additional disclosures.
The firm can be reached through:
John R. Keough, Esq.
Clyde & Co US LLP
The Chrysler Building
405 Lexington Avenue, 16th Floor
New York, NY 10174
Telephone: 212-710-3983
Email: John.Keough@clydeco.us
About Bouchard Transportation
Founded in 1918, Bouchard Transportation Co., Inc.'s first cargo
was a shipment of coal. By 1931, Bouchard acquired its first oil
barge. Over the past 100 years and five generations later, Bouchard
has expanded its fleet, which now consists of 25 barges and 26 tugs
of various sizes, capacities and capabilities, with services
operating in the United States, Canada and the Caribbean.
Bouchard and certain of its affiliates sought Chapter 11 protection
(Bankr. S.D. Texas Lead Case No. 20-34682) on Sept. 28, 2020. At
the time of the filing, the Debtors had estimated assets of between
$500 million and $1 billion and liabilities of between $100 million
and $500 million.
Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland & Ellis LLP, Kirkland & Ellis
International LLP and Jackson Walker LLP as their legal counsel;
Portage Point Partners, LLC as restructuring advisor; Jefferies LLC
as investment banker; and Berkeley Research Group, LLC as financial
advisor. Stretto is the claims agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' cases. The committee tapped
Ropes & Gray LLP as bankruptcy counsel, Clyde & Co US LLP as
maritime counsel, and Berkeley Research Group LLC as financial
advisor.
CAJUN COMPANY: Gets OK to Hire Darnall Sikes as Accountant
----------------------------------------------------------
The Cajun Company received approval from the U.S. Bankruptcy Court
for the Western District of Louisiana to hire Darnall, Sikes &
Frederick, Inc. as its accountant.
The Debtor requires an accountant to prepare its monthly operating
reports, payroll and tax returns.
Darnall, Sikes & Frederick will be paid at these rates:
Rebecca Gardes $330 per hour
Pamela Bonin $245 per hour
Benjamin Baudoin $160 per hour
Hanna Breaux $80 per hour
The firm will also be reimbursed for out-of-pocket expenses
incurred.
Rebecca Gardes, shareholder of Darnall, Sikes & Frederick,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
Darnall, Sikes & Frederick can be reached at:
M. Rebecca Gardes, CPA
Darnall, Sikes & Frederick, Inc.
2000 Kaliste Saloom Rd
Lafayette, LA 70508
Tel: (337) 232-3312
Fax: (337) 237-3614
About The Cajun Company
The Cajun Company -- http://cajunco.net-- is a family-owned and
operated business that provides industrial insulation services.
The Cajun Company filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. 21-50174) on
March 26, 2021. Julia E. Davis, corporate secretary and
comptroller, signed the petition. 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 John W. Kolwe oversees the case.
The Debtor tapped H. Kent Aguillard, Esq., as bankruptcy counsel,
Neuner Pate as special counsel, Darnall, Sikes & Frederick, Inc. as
accountant, and Steve Gardes, an accountant practicing in
Lafayette, La., as financial consultant.
CAJUN COMPANY: Gets OK to Hire H. Kent Aguillard as Legal Counsel
-----------------------------------------------------------------
The Cajun Company received approval from the U.S. Bankruptcy Court
for the Western District of Louisiana to hire H. Kent Aguillard,
Attorney at Law as its legal counsel.
The firm's services include legal advice regarding the Debtor's
powers and duties in the continued operation of its business and
other legal services necessary to administer its Chapter 11 case.
Its standard rates for bankruptcy-related work range from $425 to
$475 per hour.
The firm's attorneys, H. Kent Aguillard, Esq., and Caleb Aguillard,
Esq., charge $450 per hour and $300 per hour, respectively.
The Debtor paid the firm an initial retainer of $50,000.
Mr. Aguillard disclosed in a court filing that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
H. Kent Aguillard can be reached at:
H. Kent Aguillard, Esq.
H. Kent Aguillard, Attorney at Law
P.O. Drawer 391
Eunice, LA 70535
Tel: (337) 457-9331
Email: kaguillard@yhalaw.com
About The Cajun Company
The Cajun Company -- http://cajunco.net-- is a family-owned and
operated business that provides industrial insulation services.
The Cajun Company filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. 21-50174) on
March 26, 2021. Julia E. Davis, corporate secretary and
comptroller, signed the petition. 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 John W. Kolwe oversees the case.
The Debtor tapped H. Kent Aguillard, Esq., as bankruptcy counsel,
Neuner Pate as special counsel, Darnall, Sikes & Frederick, Inc. as
accountant, and Steve Gardes, an accountant practicing in
Lafayette, La., as financial consultant.
CAJUN COMPANY: Gets OK to Hire Neuner Pate as Special Counsel
-------------------------------------------------------------
The Cajun Company received approval from the U.S. Bankruptcy Court
for the Western District of Louisiana to hire Neuner Pate as its
special counsel.
Neuner Pate will provide legal advice and representation in any
hearings on claims estimation and claims litigation.
The hourly rates for the firm's attorneys who will be providing the
services are as follows:
James Pate $350 per hour
Brandon Letulier $275 per hour
Jeffrey Coreil $275 per hour
Jed Mestayer $275 per hour
As disclosed in court filings, Neuner Pate is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
James L. Pate, Esq.
Brandon W. Letulier, Esq.
Jeffrey K. Coreil, Esq.
Jed M. Mestayer, Esq.
Neuner Pate
One Petroleum Center
1001 West Pinhook Road Suite 200
Lafayette, Louisiana 70503
Phone: (337) 237-7000
Fax: (337) 233-9450
Email: jpate@neunerpate.com
bletulier@neunerpate.com
jcoreil@neunerpate.com
jmestayer@neunerpate.com
thefirm@neunerpate.com
About The Cajun Company
The Cajun Company -- http://cajunco.net-- is a family-owned and
operated business that provides industrial insulation services.
The Cajun Company filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. 21-50174) on
March 26, 2021. Julia E. Davis, corporate secretary and
comptroller, signed the petition. 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 John W. Kolwe oversees the case.
The Debtor tapped H. Kent Aguillard, Esq., as bankruptcy counsel,
Neuner Pate as special counsel, Darnall, Sikes & Frederick, Inc. as
accountant, and Steve Gardes, an accountant practicing in
Lafayette, La., as financial consultant.
CAJUN COMPANY: Gets OK to Hire Steve Gardes as Financial Consultant
-------------------------------------------------------------------
The Cajun Company received approval from the U.S. Bankruptcy Court
for the Western District of Louisiana to hire Steve Gardes, an
accountant practicing in Lafayette, La., as its financial
consultant.
The Debtor requires a financial consultant to provide general
financial advice, assist the Debtor's bankruptcy counsel in
drafting a Chapter 11 plan, and provide management advice on the
preparation of financial reports, monthly reports and projections,
financial markets, financial planning, and feasibility of a plan.
Mr. Gardes will charge $300 per hour for his services.
In court papers, Mr. Gardes disclosed that he does not represent
any interest adverse to the Debtor's bankruptcy estate.
Mr. Gardes can be reached at:
Steve Gardes, CPA
2000 Kaliste Saloom Road 300
Lafayette, LA 70508
Phone: (337) 232-3312
About The Cajun Company
The Cajun Company -- http://cajunco.net-- is a family-owned and
operated business that provides industrial insulation services.
The Cajun Company filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. 21-50174) on
March 26, 2021. Julia E. Davis, corporate secretary and
comptroller, signed the petition. 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 John W. Kolwe oversees the case.
The Debtor tapped H. Kent Aguillard, Esq., as bankruptcy counsel,
Neuner Pate as special counsel, Darnall, Sikes & Frederick, Inc. as
accountant, and Steve Gardes, an accountant practicing in
Lafayette, La., as financial consultant.
CALLAWAY GOLF: S&P Cuts ICR to 'B' on Completion of Topgolf Merger
------------------------------------------------------------------
S&P Global Ratings lowered all of its ratings on U.S.-based golf
equipment and apparel manufacturer Callaway Golf Co. (including our
issuer credit rating) to 'B' from 'B+' and removed them from
CreditWatch, where S&P placed them with negative implications on
Oct. 28, 2020.
The negative outlook reflects S&P's forecast that the group (at
parent company Callaway) will have pro forma leverage of about 8x
as of the end of 2021. It also incorporates the risk that S&P will
lower its rating on the company if S&P believes it will sustain its
leverage at this level.
Callaway Golf Co. completed its previously announced acquisition of
Topgolf International Inc. The all-stock transaction valued Topgolf
at about $2 billion and Topgolf's shareholders now own 48.7% of the
combined company.
As part of the acquisition, Callaway will consolidate Topgolf's
debt, which comprises a term loan ($344 million outstanding), a
$175 million revolving credit facility ($160 million outstanding),
and more than $1 billion of lease obligations and real
estate-related debt. The debt will remain at Topgolf and Callaway
did not provide any guarantees for the debt.
S&P said, "The downgrade primarily reflects the combined entity's
high leverage and lower cash flow over the next few years. We
believe the incremental leverage at the group entity, along with
Callaway's plan to fund Topgolf's growth capital expenditures
(capex), will increase the combined company's financial risk and
offset the strategic benefits of the acquisition, including the
increase in its scale, the breadth of its products and services,
and the pace of its EBITDA expansion over the next few years.
"We view Callaway's decision to fund the transaction with equity
rather than new debt favorably. However, Callaway will consolidate
about $500 million of funded debt from Topgolf and more than $1
billion in lease obligations and real estate-related debt. This
will significantly increase the leverage of the combined entity to
well above our 5x downgrade threshold for Callaway at the previous
'B+' rating through at least 2021 because we do not expect Topgolf
to generate material EBITDA in 2021. In addition, we estimate the
combined company had pro forma leverage of about 15x as of the end
of 2020, primarily due to the negative EBITDA at Topgolf (given
that its venues were closed during the COVID-19 pandemic) as well
as the sustained decline in its group business. Although we believe
the transaction will provide the combined entity with an
opportunity to accelerate Topgolf's growth trajectory and
eventually lead it to sustained profitability, we believe
consolidated leverage will remain high at about 8x in 2021 before
declining to the 6x area in 2022 as Topgolf's venues fully reopen.
"The combined entity will likely have a better growth trajectory,
though its expansion will require significant cash investments. In
our view, the merger's benefits for Topgolf are clear: it does not
generate free cash flow at its current scale and relies on external
capital to add venues to its portfolio. Through the merger,
Callaway will finance a significant portion of Topgolf's venue
development for the next several years, enabling it to resume its
planned rapid expansion. The company has indicated that its goal is
for Topgolf to generate positive free cash flow by 2024, at which
time it will become self-funding. However, this is a long time
horizon. We expect significant variability in the business'
potential operating results depending upon the pace of the recovery
in Topgolf's revenue both during and after the pandemic, the pace
of the recovery in U.S. economic activity and employment, and
changes in consumer preferences over time. Callaway also has
long-standing relationships with golf courses and driving ranges
around the country that Topgolf can leverage to accelerate the
growth of its Toptracer range business, which licenses its
technology to driving ranges. Topgolf will also benefit from joint
marketing efforts at Callaway that will further increase its
exposure.
"There are strategic benefits from the transaction for Callaway as
well, although they will be less significant than those for
Topgolf, in our view. For example, it appears that the largest
benefit for Callaway will be the opportunity to actively market its
golf and apparel brands and products to Topgolf's customers.
Topgolf estimates that 50% of its customers are non-golfers but
many show an interest in pursuing golf after visiting a Topgolf
venue. Therefore, Callaway may increase its exposure and brand
awareness among consumers it would not have easily reached in the
past. There is also potential for cross-selling opportunities
whereby Callaway can increase its golf equipment and lifestyle
apparel sales by selling its goods at Topgolf's venues. We have not
factored in any of these potential synergies into our base-case
projections, thus they present some upside to our model."
The addition of Topgolf increases Callaway's scale and product
breadth, though Topgolf faces significant competition from
alternative out-of-home entertainment options. Topgolf provides
entertainment options as well as food and beverage services to the
general public, corporate customers, and group events. Although S&P
believes Topgolf has a first-mover advantage in creating a unique
golf experience, it faces significant competition from alternative
out-of-home entertainment options, among other substitutes for
consumers' discretionary leisure and entertainment spending. Its
customers may choose lower-priced or alternative venues to
socialize that do not involve golfing, eating, or drinking.
Continued economic pressure could amplify this risk if consumers
limit their spending on discretionary leisure activities.
The recent surge in the popularity of golf will likely provide a
tailwind for the company's performance. Callaway has recovered
rapidly from the early days of the pandemic when
coronavirus-related stay-at-home orders temporarily shut down most
golf courses, retailers, and manufacturing facilities. Since then,
consumer desire for socially distanced outdoor activities has
driven a remarkable increase in golf participation and equipment
sales. Callaway realized a 15% year-over-year increase in its sales
and a nearly 50% rise in its EBITDA in the second half of 2020.
Topgolf enjoyed a similar resurgence in the volume of walk-in
traffic at its venues, although its volume of group business is
still down substantially and its revenue remains below 2019 levels.
It is hard to predict what percentage of the new golfers that
entered the sport in 2020 will remain over the long term. However,
S&P expects the surge in participation to be a tailwind for the
golf industry over the next several years and anticipate both
Callaway and Topgolf will likely benefit from the rise in golf
participation.
The combined entity's significant capex needs and high leverage
will increase its financial risk, although Topgolf's harvest case
will mitigate the downside risk. Despite the strategic benefits of
the acquisition, we believe the combined company's increased
financial risk--due to the leveraging effects of the merger and
Callaway's plan to fund $325 million of Topgolf's capex over the
next three years--will outweigh the strategic benefits from the
combination over the intermediate term. Callaway has significant
cash on its balance sheet, partially because it issued $259 million
of convertible notes near the beginning of the pandemic. S&P said,
"We expect the company will use its cash balance to fund most of
the commitment. However, Callaway will also need to use revolver
borrowings or internally generated free cash flow to cover the
remainder. Callaway has not generated more than $100 million of
free cash flow in any of the past 10 years and we do not expect it
to do so in 2021. That said, we project it could meet this level of
free cash flow generation by 2022. Nonetheless, Callaway will rely
on achieving its goal for Topgolf to generate positive free cash
flow by 2024, otherwise we believe it will be difficult for the
company to maintain the current pace of investment at Topgolf,
which could reduce Callaway's free cash flow for a prolonged
period."
S&P said, "Our rating on Callaway relies on its ability to mitigate
this risk by enacting Topgolf's harvest case, which includes
halting future venue development before breaking ground and
reducing other discretionary capex, allowing Topgolf to harvest the
cash flows from its existing venues. Although it would take 9-12
months to work through the near-term spending commitments on its
partially built venues, the elimination of growth capital spending
and pre-opening expenses beyond this inflection point would likely
enable Topgolf to generate positive free cash flow and EBITDA above
its fixed charges.
"We believe Topgolf is strategically important to the combined
entity and anticipate Callaway will likely support Topgolf under
most foreseeable circumstances. Topgolf shareholders now own 48.7%
of the combined entity and have three board seats, thus they can
exert significant influence. Callaway has also made it clear that
Topgolf is an important part of the company's strategy to create an
unrivaled golf and entertainment business. The company believes the
combination will enhance the growth prospects of both entities.
Callaway's willingness to fund the merger with $1.7 billion of its
stock and plan to commit significant cash to fund development at
Topgolf further demonstrate this commitment. As such, we believe
Callaway would provide extraordinary support to Topgolf under most
foreseeable circumstances. Still, Callaway is not providing
guarantees to Topgolf's debt, which raises some doubts about the
extent of Callaway's support in the event Topgolf encounters
significant credit stress.
"The negative outlook on Callaway reflects our forecast that its
leverage will be about 8x in 2021. In addition, it incorporates the
risk that we will lower our rating on the company if we believe it
will sustain leverage at this level.
"We could lower our rating on Callaway if we believe it will
sustain leverage of more than 7x or its cash flow becomes pressured
for a prolonged period. This would likely occur due to operating
underperformance at Topgolf such that the company does not generate
materially positive EBITDA as soon as we expect. Callaway's cash
flow could also remain pressured if it faces operating headwinds
that impair its cash flow generation and ability to provide funding
for Topgolf's venue development.
"We could revise our outlook on Callaway to stable once we are
confident that it will be able to sustain leverage of less than 7x,
which would likely occur if Topgolf meets or exceeds our forecast
for 2021 such that we believe it will generate materially positive
reported EBITDA in 2022.
"We could also consider revising our outlook to stable if Callaway
exceeds our forecast and generates annual free cash flow in excess
of $100 million on a stand-alone basis and we believe this level of
cash flow generation is sustainable. While this is unlikely in 2021
given our forecast for Callaway's working capital needs, we believe
this level of cash flow could allow the company to continue to fund
some of Topgolf's growth without needing to raise additional debt
or equity."
CANADIAN RIVER: Case Summary & 7 Unsecured Creditors
----------------------------------------------------
Debtor: Canadian River Ranch, LLC
5826 Cooksey Lane
Robinson, TX 76706
Chapter 11 Petition Date: April 9, 2021
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 21-60163
Debtor's Counsel: Thomas D. Berghman, Esq.
MUNSCH HARDT KOPF & HARR, P.C.
500 N. Akard Street, Suite 3800
Dallas, TX 75201-6659
Tel: 214-855-7500
E-mail: tberghman@munsch.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Daryl Smith, managing member.
A copy of the Debtor's list of seven unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/3R4EYWQ/Canadian_River_Ranch_LLC__txwbke-21-60163__0002.0.pdf?mcid=tGE4TAMA
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/3JSVWNQ/Canadian_River_Ranch_LLC__txwbke-21-60163__0001.0.pdf?mcid=tGE4TAMA
CAPITOL FLEET: Seeks to Hire Jones & Walden as Legal Counsel
------------------------------------------------------------
Capitol Fleet Corp. seeks approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to hire Jones & Walden, LLC as
its legal counsel.
The firm's services will include:
(a) preparing pleadings and applications;
(b) conducting examination;
(c) advising the Debtor of its rights, duties and obligations;
(d) consulting with and representing the Debtor with respect to
a Chapter 11 plan; and
(e) other legal services incidental and necessary to the
day-to-day operations of the Debtor's business including, but not
limited to, the institution and prosecution of necessary legal
proceedings, and general business legal advice.
Jones & Walden will be paid at these rates:
Attorneys $225 to $375 per hour
Paralegals $100 to $125 per hour
The firm will also be reimbursed for out-of-pocket expenses
incurred.
As of the petition date, the firm holds a $24,965.50 retainer.
Leon Jones, Esq., a partner at Jones & Walden, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
Jones & Walden can be reached at:
Leon S. Jones, Esq.
Jones & Walden LLC
699 Piedmont Avenue, NE
Atlanta, GA 30308
Tel: (404) 564-9300
Email: ljones@joneswalden.com
About Capitol Fleet
Capitol Fleet Corp. sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 21-52465) on March
25, 2021, listing under $1 million in both assets and liabilities.
Thomas T. McClendon, Esq., at Jones & Walden, LLC serves as the
Debtor's legal counsel.
CARBONLITE HOLDINGS: Court Approves Chapter 11 Financing
--------------------------------------------------------
Law360 reports that plastic recycler CarbonLite Holdings LLC got
the final nod from a Delaware bankruptcy judge Thursday, April 8,
2021, on a complex $174 million post-petition financing package in
its Chapter 11 case and its plan to sell assets.
During a hearing conducted virtually, U.S. Bankruptcy Judge John T.
Dorsey said he would sign off on orders for the financing, which
includes $60 million in new
About CarbonLite Holdings
CarbonLite processes post-consumer recycled polyethylene
terephthalate (rPET) plastic products and produces 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, an affiliate, 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 and Reed Smith LLP serve as the
Debtors' bankruptcy counsel and corporate counsel, respectively.
Stretto is the claims agent. cash, and bidding procedures once they
are submitted to the court under certification of counsel.
CARBONLITE HOLDINGS: PA Debtors' DIP Loan Okayed
------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
authorized CarbonLite P, LLC and CarbonLite P Holdings LLC to,
among other things, use cash collateral and obtain postpetition
secured financing on an interim basis.
Specifically, CarbonLite P may borrow under a DIP financing
facility syndicated by UMB Bank, N.A., as administrative agent and
collateral agent, and the lenders party thereto. The DIP loan
consists of:
(a) a new money term loan facility in an aggregate principal
amount of up to $25,000,000, and
(b) a roll-up facility, which will "roll-up" 2019 bonds of
each DIP Lender or its designated affiliate(s) into
Roll-Up Loans on a basis of $2 for each $1 of New Money
DIP Loan made by the DIP Lender, pursuant to which.
CarbonLite P is authorized to make a single draw of New Money DIP
Commitments in the principal amount of $14,000,000 and borrow (or
be deemed to borrow) Roll-Up Loans in an aggregate principal amount
of $28,000,000 upon interim approval.
Upon final approval of the DIP facility, CarbonLite P may make a
final draw of the full remaining amount of the New Money DIP
Commitments, and borrow (or be deemed to borrow) Roll-Up Loans in
an aggregate principal amount of $22,000,000.
The Pennsylvania Economic Development Financing Authority as Issuer
and UMB, as trustee, are parties to an Indenture of Trust, dated as
of June 1, 2019, pursuant to which (1) the Solid Waste Disposal
Revenue Bonds (CarbonLite P, LLC Project), Series 2019 were issued
in an aggregate principal amount of $61,800,000, and (2) the
Subordinate Solid Waste Disposal Revenue Bonds (CarbonLite P, LLC
Project), Series 2020, were issued in an aggregate principal amount
of $10,000,000.
PEDFA loaned the proceeds of the Bonds to CarbonLite P pursuant to
a Loan Agreement, dated as of June 1, 2019, to finance the
acquisition, construction and equipping of a post-consumer beverage
container processing facility in Reading, Pennsylvania. Payment of
the Bonds is guaranteed by CarbonLite P Holdings.
As of the Petition Date, the PA Debtors owed in the aggregate
principal amount of not less than:
(i) $61,800,000 in respect of outstanding principal amount
of the 2019 Bonds, and
(ii) the aggregate principal amount of not less than
$10,000,000 in respect of outstanding principal amount
of the 2020 Bonds.
The Bonds are secured by first priority security interests in and
liens on substantially all assets of the DIP Loan Parties.
The Interim Order provides that the commitment fee charged to the
DIP Loan Parties shall be limited to 3.0% of the Initial Draw.
The DIP Liens are subject to a carve-out for: (i) all fees required
to be paid to the Clerk of the Court and to the Office of the
United States Trustee under 28 U.S.C. section 1930(a) and 31 U.S.C.
section 3717 plus interest at the statutory rate; (ii) all
reasonable and documented fees and out-of-pocket expenses incurred
by a trustee under section 726(b) of the Bankruptcy Code and
allowed by the Court in an amount not to exceed $25,000; (iii) to
the extent allowed by the Court at any time, whether by interim
order, procedural order, or otherwise, all accrued and unpaid fees,
costs, and out-of-pocket expenses incurred by persons or firms
retained by the Debtors (including Force Ten Partners LLC), and any
Committee pursuant to section 328 or 1103 of the Bankruptcy Code.
As additional adequate protection, the DIP Loan Parties shall pay
in cash all accrued and unpaid reasonable prepetition fees and
expenses of the Prepetition Secured Parties (including all
reasonable fees and expenses of Arnold & Porter Kaye Scholer LLP as
primary counsel, Ankura Consulting Group, LLC as financial advisor,
Longino Public Finance LLC as public finance advisor, and Troutman
Pepper Hamilton Sanders LLP as local counsel.
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.
Counsel to the DIP Agent and the Prepetition Trustee:
Michael D. Messersmith, Esq.
Sarah Gryll, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
70 W. Madison Street, Suite 4200
Chicago, IL 60602
E-mail: michael.messersmith@arnoldporter.com
sarah.gryll@arnoldporter.com
- and -
David Stratton, Esq.
TROUTMAN PEPPER HAMILTON SANDERS LLP
1313 N. Market Street, Suite 5100
Wilmington, DE 19801
E-mail: david.stratton@troutman.com
Counsel to the DIP ABL Lender and Prepetition ABL Secured Parties:
Andrew M. Kramer, Esq.
David E. Morse, Esq.
OTTERBOURG, P.C.
230 Park Avenue
New York, NY 10169-0075
E-mail: akramer@otterbourg.com
dmorse@otterbourg.com
Counsel to the DIP Term Agent and Prepetition Term Secured
Parties:
Jeff Bjork, Esq.
LATHAM & WATKINS LLP
355 South Grand Avenue, Suite 100
Los Angeles, CA 90071-3104
E-mail: jbjork@lw.com
Brian Weiss, the Debtors' CRO, may be reached at:
Brian Weiss
Force 10 Partners LLC
20341 SW Birch Street, Suite 220
Newport Beach, CA 92660
E-mail: bweiss@force10partners.com
CARLSON TRAVEL: S&P Assigns 'CCC' ICR, Outlook Negative
-------------------------------------------------------
S&P Global Ratings assigned its 'CCC' issuer credit rating to
U.S.-based corporate travel management company Carlson Travel Inc.
(CTI).
At the same time, S&P assigned its 'B-' issue-level rating and '1'
recovery rating to its 10.5% first-lien senior secured notes, its
'CCC-' issue-level rating and '5' recovery rating to its
second-lien senior secured euro exchange notes and 6.75% exchange
notes, and its 'CC' issue-level rating and '6' recovery rating to
its third-lien exchange notes.
The negative outlook reflects the risk that, despite the improving
global economy and ongoing coronavirus vaccine rollout, CTI may
violate the minimum liquidity and EBITDA covenants on its amended
revolving credit facility in the next 12 months absent an
improvement in global corporate travel trends, a covenant
amendment, or the receipt of additional financing.
The business travel industry faces a slow recovery and competition
from virtual meetings. CTI, the second-largest global business
travel management company, has experienced a significant decline in
its revenue since March 2020 because of the effects of the COVID-19
pandemic. As the global economy returns to growth in 2021 and
vaccination rates, particularly in developed economies, gather
pace, CTI is well-positioned to benefit from a pick-up in travel
volumes. However, S&P expects the recovery in business travel to be
slow and anticipate it will be among the last of the travel
segments to recover from the pandemic given its dependence on
countries and states lowering their travel restrictions and
companies and individuals feeling comfortable enough to resume
travelling for business. Although widespread vaccination,
particularly in the U.S. and other developed countries, will likely
lead to a rebound in travel transaction volumes, governments and
companies will likely prioritize health and safety and take a
cautious approach toward expanding their non-essential travel. In
addition, the extent of the recovery in business travel remains
somewhat uncertain because--to a large degree--companies have
shifted to virtual meetings in lieu of in-person travel over the
last 12 months and this trend could continue to some degree even
after vaccinations becomes more widespread and travel restrictions
ease.
S&P said, "Our 'CCC' issuer credit rating and negative outlook
reflect the risk of a covenant violation, debt restructuring, or
default over the next 12 months. Our ratings and outlook on CTI
reflect our expectation that the demand for business travel will
likely remain depressed over the next 12 months. This could lead
the company to violate its covenants or pursue a debt restructuring
which we could view as a default, if the demand for business travel
does not sufficiently recover. As of Dec. 31, 2020, CTI's total
liquidity comprised approximately $169 million of cash and $132
million of revolver availability. However, its revolving credit
facility imposes a minimum liquidity covenant and a minimum EBITDA
covenant. Although CTI has pursued significant cost-management
initiatives over the last 12 months and raised capital by issuing
debt and equity with the support of its investor base, we believe
it may need to seek a covenant amendment or raise additional
capital to remain in compliance with its minimum liquidity covenant
over the next 12 months. A slow recovery in the volume of business
travel could also cause the company to violate its minimum EBITDA
covenant.
"We expect the company's restructuring charges to remain elevated
over the next 12 months. Travel management companies have a high
percentage of staffing costs. CTI has implemented cost-reduction
strategies to reduce its labor cost through temporary furlough
programs and permanent job eliminations. In calendar year 2020, the
company saved approximately $495 million of cash expenses largely
through temporary and permanent initiatives. We expect the company
to achieve about $300 million of annualized permanent cost savings
by calendar year-end 2021. However, we also expect it to continue
to incur material restructuring charges in the next 12-18 months to
further reduce its staff and other costs, which will partially
offset the benefits to its EBITDA. Therefore, we expect CTI's
EBITDA and free operating cash flow to remain negative in 2021."
The company took on additional debt to increase its liquidity,
which has increased its leverage. CTI improved its liquidity
position in August 2020 by exchanging its outstanding senior
secured and senior unsecured notes, amending its revolving credit
facility's financial covenants, and raising $250 million through a
$125 million equity infusion and a $125 million senior secured note
issuance. The company subsequently issued $135 million of
incremental senior secured notes in November 2020. A slow recovery
in business travel will likely cause CTI's leverage to remain
elevated at well above 10x in 2022. S&P expects the company to use
a majority of its liquidity to fund free cash flow deficits in
2021.
Environmental, social, and governance (ESG) credit factors for this
rating action:
-- Health and safety
The negative outlook reflects the risk that, despite the improving
global economy and ongoing coronavirus vaccine rollout, CTI may
violate the minimum liquidity and EBITDA covenants on its amended
revolving credit facility in the next 12 months absent an
improvement in global corporate travel trends, a covenant
amendment, or the receipt of additional financing.
S&P said, "We could lower our rating on CTI if we expect it to
default or undertake a distressed exchange in the next six months
because of a covenant violation or liquidity constraints. We
believe this would most likely occur if the demand for business
travel remains depressed.
"We could raise our rating on CTI to 'CCC+' if the conditions for
travel companies improve or it seeks additional liquidity such that
we expect it to remain in compliance with its covenants over the
next 12 months."
CASTEX ENERGY: Seeks to Hire Thompson & Knight as Special Counsel
-----------------------------------------------------------------
Castex Energy 2005 Holdco, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the Southern District of Texas
to employ Thompson & Knight as their special counsel.
Thompson & Knight's services include general corporate, oil and
gas, regulatory, and litigation advice. The firm will also serve
as conflicts counsel for the Debtors.
The firm received payments, including retainer fees from the
Debtors in the aggregate amount of $1,418,653. At the time of the
Debtors' bankruptcy filing, the firm had a retainer of $100,000.
The firm will be paid at these rates:
Partners $705 to $1,245 per hour
Counsel and other Attorneys $430 to $1,250 per hour
Associates $370 to $675 per hour
Paraprofessionals $225 to $395 per hour
The primary attorneys who will be providing the services are:
David M. Bennett, Esq. $1,125 per hour
Barry Davis, Esq. $950 per hour
Steven J. Levitt, Esq. $655 per hour
Mr. Bennett disclosed in a court filing that he and his firm are
"disinterested" as defined in Section 101(14) of the Bankruptcy
Code.
In compliance with Paragraph D.1 of the U.S. Trustee Fee
Guidelines, Mr. Bennett also disclosed the following:
a. Thompson & Knight has not agreed to any variations from, or
alternative to, its customary billing
arrangements for this engagement;
b. No professional at Thompson & Knight included in this
engagement has varied his rate based on the geographic location of
the Debtors' cases;
c. Thompson & Knight represented the Debtors in various
capacities both related and unrelated to their Chapter 11 cases
during the 12-month period prior to their bankruptcy filing. The
rates used during this period are substantially similar to the
rates currently proposed by the firm.
d. The Debtors approved Thompson & Knight's proposed rates and
staffing plan.
Thompson & Knight can be reached through:
David M. Bennett, Esq.
Steven J. Levitt, Esq.
1722 Routh St., Ste. 1500
Dallas, TX 75201
Telephone: 214-969-1700
Facsimile: 214-969-1751
Email: David.Bennett@tklaw.com
Email: Steven.Levitt@tklaw.com
About Castex Energy 2005 Holdco
Castex Energy 2005 Holdco, LLC and its affiliates, Castex Energy
2005, LLC, Castex Energy Partners, LLC, and Castex Offshore, Inc.,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Texas Lead Case No. 21-30710) on Feb. 26, 2021. At the time
of the filing, the Debtors disclosed assets of between $100 million
and $500 million and liabilities of the same range.
Judge David R. Jones oversees the cases.
The Debtors tapped Okin Adams LLP as bankruptcy counsel, The Claro
Group, LLC as financial advisor, and Thompson & Knight LLP as
special counsel and conflicts counsel. Douglas Brickley, managing
director at Claro Group, serves as the Debtors' chief restructuring
officer. Donlin, Recano & Company, Inc. is the notice, claims and
balloting agent.
CENTURY ALUMINUM: Launches Cash Tender Offer for 12.0% Senior Notes
-------------------------------------------------------------------
Century Aluminum Company commenced a cash tender offer for any and
all of its $250 million outstanding principal amount of 12.0%
Senior Secured Notes due 2025. The Tender Offer is being made
pursuant to an Offer to Purchase dated April 5, 2021 and the
related Notice of Guaranteed Delivery.
The Tender Offer expired at 5:00 p.m., New York City time, on April
9, 2021 unless extended or earlier terminated. Tenders of the
Notes may be withdrawn at any time at or prior to 5:00 p.m., New
York City time, on April 9, 2021, unless extended or earlier
terminated, but may not be withdrawn thereafter.
The Tender Offer is being undertaken to refinance the Notes with
longer maturity financing.
All holders of Notes accepted for purchase will receive accrued and
unpaid interest on such Notes from the last interest payment date
up to, but not including, the Settlement Date (which is expected to
be April 14, 2021).
The Tender Offer is not conditioned on any minimum amount of Notes
being tendered. However, Century's obligation to accept for
purchase and to pay for the Notes in the Tender Offer is subject to
the satisfaction or waiver of a number of conditions, including
Century's completion of financing transactions, on terms
satisfactory to Century, pursuant to which Century receives net
proceeds in an amount sufficient to pay the aggregate Tender Offer
Consideration with respect to the Notes accepted for purchase in
the Tender Offer, the aggregate redemption price of any Notes
outstanding following the completion of the Tender Offer and fees
and expenses associated with the Tender Offer. Following
consummation of the Tender Offer, Notes that are purchased pursuant
to the Tender Offer will be retired and cancelled and no longer
remain outstanding obligations. Century reserves the right,
subject to applicable law, to (i) waive any and all conditions to
the Tender Offer, (ii) extend or terminate the Tender Offer or
(iii) otherwise amend the Tender Offer in any respect.
With respect to the payment for the Notes that are validly
tendered, that are not validly withdrawn and that are accepted for
purchase, including those tendered pursuant to the guaranteed
delivery procedures described in the Offer to Purchase, payment
will be made on the Settlement Date. It is anticipated that the
Settlement Date for the Notes will be April 14, 2021, the third
business day after the Expiration Time. Accrued interest will
cease to accrue on the Settlement Date for all Notes accepted for
purchase in the Tender Offer, including Notes accepted for purchase
that have been tendered pursuant to the guaranteed delivery
procedures described in the Offer to Purchase. Under no
circumstances will additional interest accrue or be payable by
Century with respect to the Notes from or after the Settlement
Date, whether by reason of any delay of guaranteed delivery or
otherwise.
On or about the Settlement Date, Century expects to issue a notice
calling for the redemption on May 14, 2021 of any Notes not
purchased upon completion of the Tender Offer. The Redemption will
be made under and in accordance with the indenture governing the
Notes. The redemption price will be equal to 100.00% of the
principal amount of the Notes redeemed plus a make-whole premium
calculated in accordance with the terms of the Indenture.
Notwithstanding such redemption notice, Notes that are validly
tendered, not validly withdrawn and accepted for purchase in the
Tender Offer will be purchased under the Tender Offer.
None of Century, its subsidiaries or its affiliates, its or their
respective boards of directors, officers or employees, the dealer
manager, the tender agent and information agent or the trustee for
the Notes makes any recommendation that holders tender or refrain
from tendering all or any portion of the principal amount of their
Notes, and no one has been authorized by Century or any of them to
make such a recommendation. Holders must make their own decisions
as to whether to tender their Notes, and, if so, the principal
amount of Notes to tender.
All of the Notes are held in book-entry form. Any beneficial owner
whose Notes are held in book-entry form through a custodian bank,
broker, dealer, commercial bank, trust company or other nominee and
who wishes to tender their Notes should contact such custodian
bank, broker, dealer, commercial bank, trust company or other
nominee promptly and instruct such nominee to submit instructions
on such beneficial owner's behalf. In some cases, the custodian
bank, broker, dealer, commercial bank, trust company or other
nominee may request submission of such instructions on a beneficial
owner's instruction form. Please check with your nominee to
determine the procedures for such firm.
Century has retained Credit Suisse Securities (USA) LLC to serve as
dealer manager for the Tender Offer, and D.F. King & Co., Inc. to
act as the tender agent and information agent in respect of the
Tender Offer.
For additional information regarding the terms of the Tender Offer,
please contact Credit Suisse Securities (USA) LLC at (212) 325-6340
or toll free at (800) 820-1653. Copies of the Offer to Purchase
and the Notice of Guaranteed Delivery may be obtained be obtained
online at http://www.dfking.com/cacor by contacting D.F. King &
Co., Inc. at (212) 269-5550, toll free at (877) 283-0318 or
cac@dfking.com.
About Century Aluminum Company
Century Aluminum Company -- http://www.centuryaluminum.com-- is a
global producer of primary aluminum and operates aluminum reduction
facilities, or "smelters," in the United States and Iceland.
Century Aluminum reported a net loss of $123.3 million for the year
ended Dec. 31, 2020, compared to a net loss of $80.8 million for
the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$1.39 billion in total assets, $240.3 million in total current
liabilities, $613.2 million in total noncurrent liabilities, and
$546.1 million in total shareholders' equity.
CENTURY ALUMINUM: Plans to Offer Secured Notes, Convertible Notes
-----------------------------------------------------------------
Century Aluminum Company has proposed private offering of $250
million aggregate principal amount of senior secured notes due
April 2028, subject to market and other conditions. In addition,
Century announced a concurrent proposed private offering of $75
million aggregate principal amount of convertible senior notes due
May 2028, subject to market and other conditions, and intends to
grant to initial purchasers of the Convertible Notes the option to
purchase up to an additional $11.25 million aggregate principal
amount of the Convertible Notes within a 13-day period beginning
on, and including, the date on which the Convertible Notes are
first issued.
Century also commenced a cash tender offer for any and all of its
$250 million outstanding principal amount of 12.0% Senior Secured
Notes due 2025. Century intends to use all the net proceeds from
the Secured Notes Offering and a portion of the net proceeds from
the Convertible Notes Offering to repay all the Existing Notes
pursuant to the Tender Offer and the redemption of any Existing
Notes not acquired in the Tender Offer. Century intends to use the
remaining net proceeds from the Convertible Notes Offering,
together with cash on hand, to repay borrowings under Century's
credit facilities, to pay for the cost of capped call transactions
and to pay fees and expenses relating to these transactions.
The interest rate and other terms of the Secured Notes and the
interest rate, initial conversion rate and other terms of the
Convertible Notes will be determined at the pricing of the Secured
Notes Offering and the Convertible Notes Offering, as applicable.
The Secured Notes will be offered and sold to qualified
institutional buyers in reliance on Rule 144A under the Securities
Act of 1933 and to certain non-U.S. persons in transactions outside
the United States in reliance on Regulation S under the Securities
Act, and the Convertible Notes will be offered and sold only to
qualified institutional buyers pursuant to Rule 144A under the
Securities Act. The Secured Notes and the Convertible Notes have
not been, and Century common stock, if any, issuable upon
conversion of the Convertible Notes will not be, registered under
the Securities Act or any state securities laws and may not be
offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of the
Securities Act and applicable state laws.
With respect to the Convertible Notes Offering, holders of the
Convertible Notes will have the right to convert their Convertible
Notes in certain circumstances and during specified periods.
Century may settle conversions by paying or delivering, as
applicable, cash, shares of Century's common stock or a combination
of cash and shares of Century's common stock, at Century's
election. In addition, Century may redeem the Convertible Notes in
certain circumstances and during specified periods.
In connection with the pricing of the Convertible Notes, Century
expects to enter into capped call transactions with one or more of
the initial purchasers and/or their respective affiliates and/or
other financial institutions. The capped call transactions are
expected generally to reduce the potential dilution to Century's
common stock upon any conversion of Convertible Notes and/or offset
any cash payments Century may be required to make in excess of the
principal amount of converted Convertible Notes, as the case may
be, with such reduction and/or offset subject to a cap. If the
initial purchasers exercise their option to purchase additional
Convertible Notes, Century expects to enter into additional capped
call transactions with the option counterparties.
In connection with establishing their initial hedges of the capped
call transactions, the Option Counterparties or their respective
affiliates expect to purchase shares of Century's common stock
and/or enter into various derivative transactions with respect to
Century's common stock concurrently with or shortly after the
pricing of the Convertible Notes. This activity could increase (or
reduce the size of any decrease in) the market price of Century's
common stock or the Convertible Notes at that time.
In addition, the Option Counterparties or their respective
affiliates may modify their hedge positions by entering into or
unwinding various derivatives with respect to Century's common
stock and/or purchasing or selling Century's common stock or other
securities of Century in secondary market transactions following
the pricing of the Convertible Notes and prior to the maturity of
the Convertible Notes (and are likely to do so on each exercise
date for the capped call transactions, which are expected to occur
on each trading day during the 20 trading day period beginning on
the 21st scheduled trading day prior to the maturity date of the
Convertible Notes, or following any termination of any portion of
the capped call transactions in connection with any repurchase,
redemption or early conversion of the Convertible Notes). This
activity could also cause or avoid an increase or a decrease in the
market price of Century's common stock or the Convertible Notes,
which could affect the ability of noteholders to convert the
Convertible Notes and, to the extent the activity occurs during any
observation period related to a conversion of Convertible Notes, it
could affect the amount and value of the consideration that a
noteholder will receive upon conversion of its Convertible Notes.
About Century Aluminum Company
Century Aluminum Company -- http://www.centuryaluminum.com-- is a
global producer of primary aluminum and operates aluminum reduction
facilities, or "smelters," in the United States and Iceland.
Century Aluminum reported a net loss of $123.3 million for the year
ended Dec. 31, 2020, compared to a net loss of $80.8 million for
the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$1.39 billion in total assets, $240.3 million in total current
liabilities, $613.2 million in total noncurrent liabilities, and
$546.1 million in total shareholders' equity.
CHINOOK THERAPEUTICS: Widens Net Loss to $81.6 Million in 2020
--------------------------------------------------------------
Chinook Therapeutics, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$81.62 million on $827,000 of collaboration and license revenue for
the year ended Dec. 31, 2020, compared to a net loss of $46.52
million on $0 of collaboration and license revenue for the year
ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $429 million in total assets,
$94.38 million in total liabilities, and $334.62 million in total
stockholders' equity.
As of Dec. 31, 2020, the Company had $250.4 million in cash, cash
equivalents and marketable securities. The Company expects that
its research and development and general and administrative
expenses will increase, and, as a result, the Company anticipates
that it will continue to incur increasing losses in the foreseeable
future.
Chinook said, "We believe that our cash, cash equivalents and
marketable securities as of December 31, 2020 will enable us to
fund our operating expenses and capital expenditure requirements to
the middle of 2023."
"We have not generated any revenue from product sales, and we do
not know when, or if, we will generate any revenue from product
sales. We do not expect to generate any revenue from product sales
unless and until we obtain regulatory approval of and commercialize
any of our product candidates. At the same time, we expect our
expenses to increase in connection with our ongoing development
activities, particularly as we continue the research, development
and clinical trials of, and seek regulatory approval for, our
product candidates. Accordingly, we anticipate that we will need
substantial additional funding in connection with our continuing
operations."
"Until we can generate a sufficient amount of product revenue to
finance our cash requirements, we expect to finance our future cash
needs primarily through the issuance of additional equity,
borrowings and strategic alliances with partner companies. To the
extent that we raise additional capital through the issuance of
additional equity or convertible debt securities, the ownership
interest of our stockholders will be diluted, and the terms of
these securities may include liquidation or other preferences that
adversely affect the rights of existing stockholders. Debt
financing, if available, may involve agreements that include
covenants limiting or restricting our ability to take specific
actions, such as incurring additional debt, making capital
expenditures or declaring dividends. If we raise additional funds
through marketing and distribution arrangements or other
collaborations, strategic alliances or licensing arrangements with
third parties, we may have to relinquish valuable rights to our
technologies, future revenue streams, research programs or product
candidates or grant licenses on terms that may not be favorable to
us. If we are unable to raise additional funds through equity or
debt financings when needed, we may be required to delay, limit,
reduce or terminate our product development or commercialization
efforts or grant rights to develop and market our product
candidates to third parties that we would otherwise prefer to
develop and market ourselves."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1435049/000156459021018017/kdny-10k_20201231.htm
About Chinook
Seattle, WA-based Chinook Therapeutics, Inc. -- www.chinooktx.com
-- is a clinical-stage biotechnology company with a limited
operating history. The Company's operations to date have been
limited primarily to organizing and staffing the Company, business
planning, raising capital, acquiring and developing product and
technology rights, manufacturing, and conducting research and
development activities for its product candidates.
CLEANSPARK INC: Buys Crypto Mining Equipment for $7.2 Million
-------------------------------------------------------------
CleanSpark, Inc. purchased an aggregate of 700 mining servers for
$7.16 million from a premier cryptocurrency mining equipment
supplier.
The company expects to receive the equipment in summer 2021, and
plans to use the equipment to expand its digital currency mining
activities through its wholly-owned subsidiaries.
About CleanSpark
Headquartered in Bountiful, Utah, CleanSpark, Inc. --
www.cleanspark.com -- is in the business of providing advanced
energy software and control technology that enables a plug-and-play
enterprise solution to modern energy challenges. Its services
consist of intelligent energy monitoring and controls, microgrid
design and engineering and consulting services. Its software
allows energy users to obtain resiliency and economic optimization.
The Company's software is uniquely capable of enabling a microgrid
to be scaled to the user's specific needs and can be widely
implemented across commercial, industrial, military and municipal
deployment.
CleanSpark reported a net loss of $23.35 million for the year ended
Sept. 30, 2020, a net loss of $26.12 million for the year ended
Sept. 30, 2019, and a net loss of $47.01 million for the year ended
Sept. 30, 2018. As of Dec. 31, 2020, the Company had $78.17
million in total assets, $6.14 million in total liabilities, and
$72.03 million in total stockholders' equity.
CNX MIDSTREAM: S&P Alters Outlook to Positive, Affirms 'B+' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook on CNX Midstream Partners
L.P. (CNXM) to positive from stable and affirmed its 'B+' issuer
credit rating on the company to reflect its view of CNXM's
strategic importance to CNX and its expectation that CNX will
generate significant free cash and reduce its debt over the next
couple of years.
S&P said, "At the same time, we affirmed our 'BB-' issue-level
rating on CNXM's senior unsecured notes. The '2' recovery rating
remains unchanged, indicating our expectation for substantial
(70%-90%; rounded estimate: 85%) recovery in a payment default
scenario.
"The positive outlook on CNXM reflects our positive outlook on CNX.
Our positive outlook on CNX reflects the likelihood of an upgrade
if we expect its funds from operations (FFO) to debt to remain well
above 30% on a sustained basis.
"Our rating on CNXM reflects our view of its relationship with its
parent. We view CNXM as a core subsidiary to its parent, especially
following the 2020 take-private transaction wherein CNX acquired
all of CNXM's outstanding common units that it did not already own.
Furthermore, CNXM is dependent on its parent for the majority of
its revenue and growth opportunities and both companies share a
management and operations team. As the company's sole parent and
largest counterparty (accounting for 79% of CNXM's 2020 revenue),
CNX plays an integral role in CNXM's operations. In addition, the
company's volumes are heavily dependent upon CNX's production and
performance. Given this integrated and intertwined relationship, we
believe that CNXM's parent has a high-level of influence on its
operations, thus we cap our view of CNXM's credit quality based
upon our rating on CNX."
CNX's hedging program minimizes CNXM's downside risks in the near
term. CNX has hedged 90% of its 2021 volumes and 70% of its 2022
volumes, which will help insulate it from its direct exposure to
commodity prices and maintain its volumes and cash flows at CNXM.
S&P said, "We believe that CNX's hedging program provides it and
CNXM with greater protection against downward pricing pressure
while improving their cash flow visibility. During 2020, CNXM was
able to maintain a flat level of EBITDA relative to 2019 ($237
million in 2020 versus 239 million in 2019) despite the effects of
the coronavirus pandemic. Therefore, we expect it to generate
adjusted EBITDA of between $250 million and $300 million per year
in 2021 and 2022."
S&P said, "We expect CNXM's credit metrics to improve with the
completion of its large midstream infrastructure buildout. While
2020 was a challenging year for many midstream companies, CNXM
maintained flat adjusted EBITDA (relative to 2019) and reduced the
outstanding balance on its unrated revolving credit facility by $20
million, which improved its S&P Global Rating-adjusted 2020
leverage to 2.9x. With the completion of its large midstream
infrastructure build-out, we expect that CNXM's capital budget will
decline to $30 million-$50 million per year in 2021 from $67
million in 2020 and $328 million in 2019. In addition, we estimate
the completion of the build-out positions CNXM to expands its
volumes above 1,880 billion Btus per day (BBtu/d) in 2021 and
maintain this level of production in 2022. With this increase in
its production, we expect CNXM's leverage to decline to the
2.5x-2.7x range in 2021. Furthermore, we expect that the company
will use its excess cash flow to pay down the outstanding balance
on its revolving credit facility or make distributions to CNX.
"The positive outlook on CNXM reflects our positive outlook on its
parent, CNX. The positive outlook on CNX reflects the likelihood of
an upgrade if we expect FFO to debt to improve to well above 30% on
a sustained basis. We anticipate this ratio will be just above 30%
in 2021 and 2022, and to strengthen further in 2023.
"We anticipate CNXM will marginally increase its volumes and
throughput in 2021 now that it has completed its broad
infrastructure build-out. In addition, we continue to expect the
partnership to sustain adjusted debt to EBITDA of between 2.5x and
2.7x in 2021 and adequate liquidity.
"We could raise our rating on CNXM if we raise our rating on CNX.
An upgrade for CNX would require stronger leverage measures,
including projected FFO well above 30% and debt to EBITDA well
below 3x on a sustained basis. The company could achieve these
credit measures if it meets its natural gas production targets
while containing costs and improving gas price realizations.
"We could lower our ratings on CNXM if we lowered our rating on
CNX. We could lower the issuer credit rating on CNX if we forecast
CNX's leverage will weaken over the next two years, such that
projected FFO to debt approaches 20% and debt to EBITDA remains
well above 3x on a sustained basis. This would most likely happen
if gas price realizations deteriorate, or if capital spending rises
without a commensurate increase in production."
COLLAB9 LLC: Seeks to Hire SulmeyerKupetz as Bankruptcy Counsel
---------------------------------------------------------------
Collab9, LLC seeks approval from the U.S. Bankruptcy Court for the
Central District of California to hire SulmeyerKupetz, A
Professional Corporation, as its bankruptcy counsel.
The firm will render these services:
(a) preparation of bankruptcy schedules and statement of
affairs;
(b) compliance with the United States Trustee requirements and
representation at the meeting of creditors;
(c) examination of claims of creditors;
(d) legal advice on the use, sale or lease of property of the
Debtor's estate, use of cash collateral, post-petition financing,
relief from the automatic stay, special treatment of creditors,
payment of pre-bankruptcy obligations, the rejection or assumption
of leases, and related matters;
(e) negotiation with creditors;
(f) preparation of a plan of reorganization or liquidation and
disclosure statement;
(g) objecting to claims; and
(h) review, analysis, legal research and the preparation of
documents.
The firm's hourly rates range from $495 to $750 for attorneys and
$250 to $275 for paraprofessionals.
Victor Sahn, Esq., whose current hourly rate is $750, is the
primary attorney who will be representing the Debtor. Other
attorneys at the firm who are contemplated to work extensively on
this matter are David Kupetz, Esq. and Claire Wu, Esq., who will
charge $725 per hour and $495 per hour, respectively.
Mr. Sahn disclosed in court filings that his firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
David S. Kupetz , Esq.
Steven F. Werth, Esq.
Claire K. Wu, Esq.
SulmeyerKupetz, A Professional Corporation
333 South Grand Ave, Suite 3400
Los Angeles, CA 90071
Tel: 213.626.2311
Fax: 213.629.4520
Email: dkupetz@sulmeyerlaw.com
swerth@sulmeyerlaw.com
ckwu@sulmeyerlaw.com
About Collab9 LLC
Collab9, LLC -- https://www.collab9.com/ -- is a cloud
communications platform that caters to the public sector
marketplace with FedRAMP Authorized Unified Communications as a
Service. The platform integrates voice, video, messaging,
mobility, presence, conferencing, and customer care in one
predictable, user-based subscription model.
Collab9 sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. C.D. Calif. Case No. 21-12222) on March 19, 2021. In
the petition signed by Kevin Schatzle, chief executive officer, the
Debtor disclosed up to $10 million in assets and up to $50 million
in liabilities.
Judge Ernest M. Robles oversees the case.
Victor A. Sahn, Esq., at SulmeyerKupetz, A Professional
Corporation, is the Debtor's legal counsel.
COLLECTED GROUP: April 13 Deadline Set for Panel Questionnaires
---------------------------------------------------------------
The United States Trustee is soliciting members for an unsecured
creditors committee in the bankruptcy case of Collected Group LLC.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://bit.ly/3uHb8Vd and return it to
Benjamin.A.Hackman@usdoj.gov at the Office of the United States
Trustee so that it is received no later than 4:00 p.m., on Tuesday,
April 13, 2021.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About Collected Group LLC
Collected Group LLC is a designer, distributor, and retailer of
three contemporary, consumer-inspired, apparel lifestyle brands:
Joie, Equipment, and Current/Elliott. It was founded in 2001. The
Collected Group, LLC is TCG, the ultimate parent company, wholly
owns Debtors RBR, LLC and The Collected Group Company, LLC. RBR
wholly owns non-debtor The Collected Group Holdings Manager, LLC,
which, in turn, wholly owns non-debtor The Collected Group
Holdings, LLC.
The Company and 4 affiliates filed for Chapter 11 bankruptcy
(Bankr. D. Del. Lead Case No. 21-10663) on April 5, 2021. In the
petitions signed by CRO Evan Hengel, the Debtors estimated assets
of between $50 million and $100 million and liabilities of between
$100 million and $500 million. The Honorable Judge Laurie Selber
Silverstein is the case judge.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison LLP and
Young Conaway Stargatt & taylor, LLP as attorneys. Stifel,
Nicolaus & Co. and affiliate Miller Buckfire & Co. serve as the
Debtor's investment banker, and Berkeley Research Group, LLC, is
the financial advisor. Epiq Corporate Restructuring LLC is the
claims agent.
COLLECTED GROUP: May 25 Plan & Disclosure Hearing Set
-----------------------------------------------------
The Collected Group, LLC, et al., filed with the U.S. Bankruptcy
Court for the District of Delaware a motion for the entry of an
order scheduling a combined hearing on the adequacy of the
Disclosure Statement and the confirmation of the prepackaged Plan.
On April 6, 2021, Judge Laurie Selber Silverstein granted the
motion and ordered that:
* May 25, 2021, at 10:00 a.m., is the Combined Hearing (at
which time this Court will consider, among other things, the
adequacy of the Disclosure Statement, confirmation of the Plan,
assumption and rejection of Executory Contracts and Unexpired
Leases, and Cure Amounts).
* May 18, 2021, is fixed as the last day to file any responses
or objections to the adequacy of the Disclosure Statement or
confirmation of the Plan.
* May 21, 2021, is fixed as the last day for the Debtors and
other Plan supporters to file reply briefs in response to any
objections to the adequacy of the Disclosure Statement and/or
confirmation of the Plan.
Counsel for the Debtor:
Brian S. Hermann
John T. Weber
Brian Bolin
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 Avenue of the Americas
New York, New York 10019
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
Pauline K. Morgan
Andrew L. Magaziner
Joseph M. Mulvihill
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
About Collected Group LLC
Collected Group LLC is a designer, distributor, and retailer of
three contemporary, consumer-inspired, apparel lifestyle brands:
Joie, Equipment, and Current/Elliott. It was founded in 2001. The
Collected Group, LLC is TCG, the ultimate parent company, wholly
owns Debtors RBR, LLC and The Collected Group Company, LLC. RBR
wholly owns non-debtor The Collected Group Holdings Manager, LLC,
which, in turn, wholly owns non-debtor The Collected Group
Holdings, LLC.
The Company and 4 affiliates filed for Chapter 11 bankruptcy
(Bankr. D. Del. Lead Case No. 21-10663) on April 5, 2021. In the
petitions signed by CRO Evan Hengel, the Debtors estimated assets
of between $50 million and $100 million and liabilities of between
$100 million and $500 million. The Honorable Judge Laurie Selber
Silverstein is the case judge.
The Debtors tapped PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP and
YOUNG CONAWAY STARGATT & TAYLOR, LLP, as attorneys. STIFEL,
NICOLAUS & CO. and affiliate MILLER BUCKFIRE & CO. serve as the
Debtor's investment banker, and BERKELEY RESEARCH GROUP, LLC, is
the financial advisor. EPIQ CORPORATE RESTRUCTURING LLC is the
claims agent.
COMMAND ENERGY: Trustee Selling CESI/LLC Pipe to Garvey for $250K
-----------------------------------------------------------------
Ronald J. Sommers, in his capacity as duly appointed Chapter 7
trustee for the estate of Command Energy Services International,
Ltd. ("CESI"), affiliates of Command Drilling Products USA, Ltd.,
Command Energy, LLC, and Command Energy Services Ltd., asks the
U.S. Bankruptcy Court for the Southern District of Texas to approve
a compromise with Charles Garvey and Command Tubular Products, LLC
("CTP") and on the following terms:
a. Trustee Williams has agreed to sell the pipe owned by CESI
and LLC to Garvey for a purchase price of $250,000; and
b. Trustee Williams and Garvey and CTP will exchange mutual
releases including a release to any funds that CESI had in its
Barbados bank accounts and in exchange, CTP will receive an allowed
unsecured claim in the CESI bankruptcy case in the amount of
$150,000.
The Motion is being filed contemporaneously with a Joint Motion to
Compromise under Bankruptcy Rule 9019 by Trustee Williams and Ron
Sommers, chapter 7 trustee for the Command Energy, LLC ("LLC").
The relief requested in the Motion is subject to and contingent
upon the approval of the Joint Motion.
Upon approval of the proposed compromise and execution of the
Assignment and Conveyance between Trustee Williams and Trustee
Sommers, Trustee Williams will execute a Bill of Sale. While
Garvey and CTP have agreed to the terms of the compromise set fort,
the factual recitations and the statements in support of the
proposed settlement set forth are solely those of Trustee Williams
and are not necessarily agreed to by Garvey and CTP.
The CESI and LLC bankruptcy cases are jointly administered but not
substantively consolidated.
As part of the Schedules and Statement of Financial Affairs filed
in the bankruptcy cases, CESI and LLC identified certain pipe held
in inventory by each entity. The pipe owned by CESI is identified
on Exhibit 2-A and the pipe owned by LLC is identified on Exhibit
2-B. The Pipe has been stored in CTP's yard since the filing of
the bankruptcy cases.
The Schedules and Statement of Financial Affairs for CESI also
identified two bank accounts with RBC -- Barbados, including a USD
account ending in XXX-190-9 and a Barbados Dollar account ending in
XXX-629-4 ("Barbados Accounts"). With the assistance of counsel,
the Trustee was successful in transferring the funds in the
Barbados Accounts to an approved debtor account in the United
States.
CTP alleged that the Barbados Accounts included funds paid to the
Debtor for assets sold by the Debtor. Moreover, CTP alleged that
it was entitled to certain of the funds in the Barbados Accounts
because it provided funding to the Debtor for the assets that were
sold by the Debtor.
Subject to the Court's approval, the proposed relief requested will
do the following: Trustee Williams will execute the Bill of Sale,
which will sell the Pipe to Garvey for $250,000. In addition, the
settlement agreement between Trustee Williams and Garvey/CTP
provides for among other things, (i) a mutual release between
Trustee Williams and Garvey/CTP, including any claims to funds that
had been held in the Barbados Accounts, and (ii) CTP to receive an
allowed unsecured claim of $150,000.
The key terms of the Bill of Sale are:
a. Purchase price for the Pipe is $250,000; and
b. The sale is being made "as is, where is," with all faults,
and the Trustee makes no representations or warranties expressed or
implied, of any kind with respect to the pipe, including but not
limited to the amount or type of pipe sold.
Trustee Williams asks that the Court approves the sale of the Pipe
to Garvey free and clear of all liens, claims, interests, and
encumbrances.
A copy of the Settlement Agreement is available at
https://tinyurl.com/42zrfzzh from PacerMonitor.com free of charge.
The bankruptcy case is In re: Command Energy Services Ltd., (Bankr.
S.D. Tex. Case No. 20-30289). The Court appointed Randy W.
Williams as the Chapter 7 Trustee. On Jan. 27, 2020, the Court
entered an order providing for the joint administration of the
Debtor, Command Energy Services International, Ltd., Command
Drilling Products USA, Ltd., and Command Energy, LLC (for
procedural purposes only). All pleadings are filed in Case No.
20-30289.
CONCISE INC: May 26 Disclosure Statement Hearing Set
----------------------------------------------------
On March 8, 2021, debtor Concise Inc. filed with the U.S.
Bankruptcy Court for the District of Columbia a Disclosure
Statement and a Plan. On April 6, 2021, the Court ordered that:
* May 26, 2021, at 2:00 p.m. in Courtroom 1, U.S. Courthouse,
333 Constitution Avenue, Washington, DC 20001 is the hearing to
consider the approval of the disclosure statement.
* All objections to the disclosure statement shall be filed
and served pursuant to Rule 3017(a) prior to the hearing.
A full-text copy of the order dated April 6, 2021, is available at
https://bit.ly/3fVLOXu from PacerMonitor.com at no charge.
Attorneys for the Debtor:
Michael G. Wolff, Esq.
Jeffrey M. Orenstein, Esq.
Wolff & Orenstein, LLC
15245 Shady Grove Road, 465-N
Rockville, MD 20850
Tel: 301-250-7232
About Concise Inc.
Concise, Inc. (dba - CNS) was founded in 2003, as a turnkey
in-building Distributed Antenna System Integrator (DAS). The
Company offers wireless, infrastructure cabling, cyber|cloud
services, IT telecommunications, managed security, and engineering
design services. Visit https://www.conciseinc.com for more
information.
Concise, Inc. filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 19-00079) on
January 31, 2019. In the petition signed by David Johnson, chief
executive officer, the Debtor estimated $51,715 in total assets and
$3,556,125 in total liabilities. Judge Martin S. Teel, Jr.
presides over the case. Jeffrey M. Orenstein, Esq. at Wolff &
Orenstein, LLC represents the Debtor as counsel.
CORECIVIC INC: S&P Rates New $400MM Senior Unsecured Notes 'BB-'
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '3'
recovery rating (rounded estimate of 65%) to CoreCivic Inc.'s
proposed $400 million senior unsecured notes due 2026. The notes
rank pari passu with the company's existing unsecured notes. S&P
expects the company to use the net proceeds to redeem existing
unsecured notes maturing in 2022 and 2023. The transaction is
approximately leverage-neutral and does not impair recovery
prospects for existing lenders and noteholders.
The company has about $1 billion of debt maturing by mid-2023 and
S&P views the transactions as a positive first step toward the
eventual successful refinancing of its near-term debt maturities.
The issuer credit rating on CoreCivic is 'BB-' with a negative
outlook.
CRAVE BRANDS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Crave Brands, LLC
444 W. Lake Street, 17th Floor
Chicago, IL 60606
Chapter 11 Petition Date: April 9, 2021
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 21-04729
Judge: Hon. Timothy A. Barnes
Debtor's Counsel: David A. Warfield, Esq.
THOMPSON COBURN LLP
One US Bank Plaza
Suite 2600
Saint Louis, MO 63102
Tel: 314-552-6000
Fax: 314-552-7000
E-mail: dwarfield@thompsoncoburn.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Steve Karfaridis, 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/RISSJ5Q/Crave_Brands_LLC__ilnbke-21-04729__0001.0.pdf?mcid=tGE4TAMA
CSL CAPITAL: S&P Assigns 'B' Rating on New $570MM Sr. Secured Notes
-------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '2'
recovery rating to CSL Capital LLC's proposed $570 million senior
secured notes due 2028. CSL Capital LLC is a wholly owned
subsidiary of Little Rock, Ark.-based telecom REIT Uniti Group Inc.
The '2' recovery rating indicates its expectation of substantial
(70%-90%; rounded estimate: 75%) recovery in the event of a payment
default. The company will use the proceeds from these notes to
repay its $550 million of 6.00% senior secured notes due 2023 and
pay related fees and expenses.
Because the transaction does not materially affect Uniti's credit
metrics, S&P's issuer credit rating and outlook on the company are
unchanged. Furthermore, we view the transaction favorably because
it helps extend Uniti's debt maturity profile.
Uniti reported solid results for fourth-quarter 2020 including a 5%
and 6% increase in revenue and adjusted EBITDA, respectively.
Further, the company entered 2021 with opportunities to expand its
leasing business from the lease-up of fiber it acquired as part of
its settlement with Windstream. Still, S&P's ratings on the company
continue to reflect the tight linkage of Uniti's credit profile to
that of Windstream (B-/Stable/--), its largest tenant, which
continues to face revenue and EBITDA declines from market share
loses to incumbent cable providers. Notwithstanding ongoing efforts
to diversify its business through sale-leasebacks and other leasing
arrangements, Uniti derives about 80% of its EBITDA from annual
lease payments from Windstream. For 2021, S&P expects EBITDA growth
in the low- to mid-single digits and adjusted debt to EBITDA in the
mid-6x area, down from the mid- to high-6x area in 2020.
DEI HOLDINGS: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to
U.S.-based premium loudspeaker and audio products manufacturer DEI
Holdings Inc., operating as Sound United.
S&P also assigned its 'B' issue-level and '3' recovery ratings to
the proposed term loan (issued by subsidiary DEI Sales, Inc).
S&P said, "The stable outlook reflects our expectation for the
company to realize cost synergies in fiscal 2022 that will offset
modest revenue declines after lapping a very strong 2021, allowing
it to continue deleveraging to the mid-3x area, from about 4.5x at
the end of fiscal 2021.
"The 'B' issuer credit rating on Sound United reflects our
assessment of its ownership by a financial sponsor and track record
of operating with high leverage, participation in a niche and
fragmented industry, relatively small scale, moderate brand
concentration, and the discretionary high-ticket nature of its
products. We also recognize that the company has strong brands in
their categories, good geographic diversity, a well-diversified
customer base, and a resilient supply chain."
Sound United has a narrow focus in the higher end of a competitive
and fragmented industry, which requires ongoing technological and
product innovation, brand support, and operational execution. Due
to a series of acquisitions over the past several years, Sound
United has evolved into a leader in premium and luxury home audio
products, including loudspeakers, audio video receivers (AVR), and
soundbars. However, the home theater market is very fragmented.
Sound United does not participate in the value price points, which
are dominated by global giants like Sony and Samsung. But Sound
United's Polk and Denon brands, which together account for more
than half of the company's $806 million of pro forma revenue, are
in the mass premium and premium segments, respectively, competing
with large well-known brands such as Klipsch, Yamaha, Pioneer, JBL,
Sonos, and Bose. Most of the rest of the company's sales come from
its Marantz and B&W brands in the luxury and ultraluxury segments
where it competes with dozens of niche players. Sound United's
brands are well-regarded, and each have decades of history (albeit
under different ownership). For example, B&W speakers are used in
the famed Abbey Road studios in London because of their exceptional
quality. Still, the market for home theater systems is extremely
fragmented and competitive, and generating consistent sales growth
will be an ongoing challenge requiring consistent technological and
product innovation, brand support, and operational execution.
S&P said, "We believe demand for its high-ticket discretionary
products could be relatively volatile, although there are tailwinds
that support long-term growth. The company designs, manufactures,
and sells high-ticket discretionary products. We believe demand for
home theater products will be relatively volatile over time,
especially near the higher end of the market where Sound United's
brands are largely positioned." During economic downturns we
believe consumers may choose to delay their purchase or trade down
to lower price alternatives. Volatility could also be exacerbated
by the company's exposure to foreign currency fluctuations given
its high level of international sales, although the company does
hedge some of this near-term exposure, which mitigates some of the
risk.
S&P said, "Notwithstanding the potential volatility related to high
competition and changes in consumer discretionary incomes, we
believe there are industry tailwinds that should support growth,
namely the increase in consumer entertainment experienced at home.
The prevalence of music streaming services such as Spotify and
Apple Music is increasing, and there has been a proliferation of
streaming services and content from media companies and movie
studios. The pandemic accelerated a trend that already existed,
whereby some big budget original movies are released directly onto
streaming platforms concurrent with or instead of traditional
theatric releases. Because of the ubiquity and falling prices of
large-screen smart TVs sporting 4K resolution, OLED, and other
technologies, consumers are able to achieve a high quality viewing
experience in their homes. In addition, the ongoing trend toward
slimmer profiles leaves little room in TVs for the components
necessary to produce good sound. Consumers interested in achieving
high quality sound must typically purchase supplementary audio
products, which bodes well for companies like Sound United.
"Robust recovery during the pandemic led to market share increases,
but we expect some pullback this year. Despite initial declines at
the beginning of the pandemic due to its retail customers' store
closures, the company experienced a robust recovery in sales
through the rest of the year. Its organic sales grew about 17% in
fiscal 2021 (ended March 31, 2021), as consumers spent more on home
entertainment due to government-mandated stay-at-home orders and
restrictions on most forms of out-of-home entertainment such as
movie theaters. The company believes that it gained significant
market share during the pandemic, which it attributes to its
resilient supply chain that was able to keep higher in-stock levels
than competitors. This led to retail shelf space gains, some of
which will likely be permanent beyond the pandemic.
"We believe there will be a pullback in spending on home audio
products in the back half of calendar 2021 and into 2022 as the
economy reopens and consumers pursue out-of-home entertainment and
resume spending on travel and experiences. We forecast this decline
will be relatively modest, and that the company will return to
growth next year. However, demand trends over the next few years
could be volatile given the uncertainty about consumer purchasing
patterns once the economy returns closer to normal.
"Ratings are constrained by the company's track record of high
leverage, financial sponsor ownership, and appetite for
opportunistic acquisitions. We are forecasting pro forma debt
leverage in the mid-4x area at the close of the transaction,
improving to the mid-3x area in fiscal 2022, which is relatively
moderate compared to many similarly rated companies. However, we do
not believe the company will sustain leverage at these levels over
the long term, given its track record of high leverage, potential
for opportunistic M&A, and its majority ownership by private equity
firm Charlesbank Capital Partners LLC and minority ownership by KKR
& Co. Under Charlesbank's ownership, Sound United has maintained
S&P-adjusted leverage in the 7.5x-9.0x area almost every year since
at least 2014 (including transaction and integration expenses). We
recognize the company's portfolio is vastly different than it was
during much of that time because of acquisitions and divestitures,
including the acquisition of Denon and Marantz in 2017, the
spin-off of the Directed Technologies automotive products
subsidiary in 2019, and the acquisition of B&W in 2020. Almost 80%
of the company's pro forma revenue comes from brands that it didn't
own before 2017.
"We also acknowledge the company's recent improved operating trends
and proposed new capital structure, which bring pro forma leverage
down considerably and provide plenty of leverage cushion for the
current rating. Management has a relatively conservative long-term
leverage target in the 3.0x-3.5x area, likely because of the
difficulties caused by operating with such high leverage in the
past. Nevertheless, we believe profitability and leverage could be
volatile from year to year. We also believe financial sponsors tend
to maintain high leverage at their portfolio companies, typically
using leverage capacity to fund shareholder distributions or make
acquisitions. The company has made opportunistic acquisitions
occasionally in the past, and we believe it will continue to do so.
Therefore, our rating on the company incorporates our expectation
for leverage above 5x over the longer term, despite our assumption
for lower leverage the next few years.
Despite moderate brand concentration, the company has good
geographic diversity and a diversified customer base. Although its
portfolio contains seven brands, its top four brands generate 95%
of pro forma revenue. Roughly 40% of its revenue is derived from
its largest brand: Denon. Notwithstanding this moderate brand
concentration, the company has good geographic diversification with
more than half of its sales outside the Americas. Its largest
single customer accounts for about 12% of sales, but its customer
base is otherwise well-diversified across electronic super stores,
e-commerce retailers, and specialty audio-video (A/V) distributors.
Sound United has in-house R&D and engineering, as well as some
owned manufacturing facilities. But the majority of its products
are sourced from third parties, which lowers fixed costs compared
to other manufacturers that own their facilities. The company also
licenses its brands to auto original equipment manufacturers (OEMs)
and companies in other industries. S&P views licensing revenue
favorably because it provides contractually recurring, high-margin
revenue. However, Sound United's licensing revenue is currently
negligible compared with its total revenue, therefore it would have
to grow this revenue source considerably before it would
significantly improve its view of its business risk.
The stable outlook reflects S&P's expectation for the company to
realize cost synergies in fiscal 2022 that will offset modest
revenue declines, allowing it to continue deleveraging to the
mid-3x area, from about 4.5x expected at the end of fiscal 2021.
S&P could consider lower ratings if the company's leverage
approaches 6.5x, which could happen if:
-- The moderation in demand for home audio systems when the
economy fully reopens is much greater than we forecast, and
consumers significantly cut spending on discretionary home
entertainment products in favor of out-of-home entertainment and
other leisure spending; or
-- The company makes large, debt-financed acquisitions or
shareholder distributions.
S&P said, "We could also consider lower ratings if Sound United's
competitive position deteriorates and it loses shelf space and
market share, resulting in significantly lower profitability.
"Although unlikely over the next 12 months, we could consider
raising our rating on Sound United if it demonstrates a consistent
track record of operating with debt leverage well under 5x, and we
believe its financial sponsor owners are committed to sustaining
leverage at this level over the long term."
DESOTO OWNERS: HFS Says Disclosure Inadequate
---------------------------------------------
Creditor, Hudson's Furniture Showroom, Inc., objects, to the First
Amended Disclosure Statement filed by Desoto Owners, LLC and Desoto
Holding, LLC.
HFS points out that the Court can quickly conclude the Debtors'
Disclosure Statement fails to meet Section 1125's "adequate
information" standard, for it lacks sufficient information that
would allow HFS to make an informed decision about whether to vote
in favor of, or against, its treatment as Class IV under the Plan.
The Disclosure Statement discusses three choices, A, B, or C, which
represent the following options: 1) a $100,000 distribution upon
the Plan's Effective Date; 2) the option to purchase some portion
of the Debtors' envisioned Mall Property as a substitute for its
current lease location; or 3) receive a distribution in Class V
Unsecured Creditors pursuant to 11 U.S.C. Sec. 365(a) lease
rejection damages.
However, the Disclosure Statement provides zero information related
to the second option: the location and value of some portion of the
Debtors' Mall Property. The Disclosure Statement is clear that the
Debtors anticipate major and substantial changes to the current
real property. Numerous well-regarded professionals are enlisted
to create the new project, yet HFS has no information where it
would be permitted to purchase and build its location despite
repeated requests for material information.
Moreover, the Disclosure Statement fails to provide any information
concerning the clear and present danger of catastrophic reservoir
collapse at the Piney Point reservoir in Manatee County, Florida,
which is currently dumping millions of toxic industrial wastewaters
into Tampa Bay.
Attorneys for Hudson's Furniture Showroom:
R. Scott Shuker, Esq.
Mariane L. Dorris, Esq.
John B. Dorris, Esq.
SHUKER & DORRIS, P.A.
121 S. Orange Ave., Suite 1120
Orlando, Florida 32801
Telephone: (407) 337-2060
Facsimile: (407) 337-2050
E-mail: rshuker@shukerdorris.com
mdorris@shukerdorris.com
jdorris@shukerdorris.com
About Desoto Owners
Desoto Owners LLC is a Single Asset Real Estate (as defined in 11
U.S.C. Section 101(51B)), owning a real property commonly known as
the Desoto Square Mall, which is located at 303 301 Blvd W.,
Bradenton, Fla. and is situated on a 58-acre parcel of land.
Desoto Owners LLC filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
2043387) on Sep. 22, 2020. The petition was signed by Moshe
Fridman, chief executive officer. At the time of filing, the
Debtor estimated $1 million to $10 million in assets and $10
million to $50 million in liabilities. Isaac Nutovic, Esq., at
NUTOVIC & ASSOCIATES, represents the Debtor.
DIAMOND OFFSHORE: Court Okays $2B Plan After Axing Compromise
-------------------------------------------------------------
Law360 reports that a Texas bankruptcy judge on Thursday, April 7,
2021, approved oil and gas company Diamond Offshore Drilling's $2
billion debt-swap Chapter 11 plan after rejecting a compromise
between Diamond and the U. S. trustee's office over the plan's
legal releases.
At a virtual hearing, U.S. Bankruptcy Judge David Jones approved
the plan without the proposed compromise language, saying he would
not be bound by the language and calling the U. S. trustee's
objection part of a "concerted" effort to try to limit legal
releases in bankruptcy plans.
About Diamond Offshore
Diamond Offshore Drilling, Inc., provides contract drilling
services to the energy industry worldwide. The company operates a
fleet of 15 offshore drilling rigs, including 4 drillships and 11
semi-submersible rigs. It serves independent oil and gas companies,
and government-owned oil companies. The company was founded in 1953
and is headquartered in Houston, Texas. Diamond Offshore Drilling
is a subsidiary of Loews Corporation. The company has major offices
in Australia, Brazil, Mexico, Scotland, Singapore, and Norway.
Diamond Offshore Drilling, Inc., along with its affiliates, filed a
voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-32307) on April
26, 2020. The petitions were signed by David L. Roland, senior vice
president, general counsel, and secretary.
As of Dec. 31, 2019, the Debtors disclosed $5,834,044,000 in total
assets and $2,601,834,000 in total liabilities.
The case is assigned to Judge David R. Jones.
Paul, Weiss, Rifkind, Wharton & Garrison LLP and Porter Hedges LLP
are acting as the Company's legal counsel and Alvarez & Marsal is
serving as the Company's restructuring advisor. Lazard Freres & Co.
LLC is serving as financial advisor to the Company. Prime Clerk LLC
is the claims and noticing agent.
DIGIPATH INC: Board Approves Revised Compensation Arrangements
--------------------------------------------------------------
The Board of Directors of Digipath, Inc. approved changes to the
compensation arrangements for each of Edmond A. DeFrank and Dennis
Hartmann for serving as directors of the Company, as follows:
* Effective April 1, 2021, annual compensation is increased from
$18,000 to $30,000, payable in quarterly installments of $7,500
each; and
* Such compensation may now be paid in shares of common stock of
the Company instead of cash, at the discretion of the Company.
The Board of Directors of the Company also approved changes to the
compensation arrangements for Bruce Raben for serving as the
Company's Chairman of the Board, as follows:
* Effective April 1, 2021, annual compensation has been increased
from $30,000 to $60,000, payable in quarterly installments of
$15,000 each; and
* Such compensation may now be paid in shares of common stock of
the Company instead of cash, at the discretion of the Company.
On March 25, 2021, the Board also approved the issuance of 200,000
shares of Common Stock as a bonus to each of Edmond A. DeFrank,
Dennis Hartmann and Bruce Raben.
About DigiPath
Headquartered in Las Vegas, Nevada, Digipath, Inc. --
http://www.digipath.com-- offers full-service testing lab for
cannabis, hemp and ancillary cannabis and hemp infused products
serving growers, dispensaries, caregivers, producers, patients and
eventually all end users of cannabis and botanical products.
DigiPath reported a net loss of $2.31 million for the year ended
Sept. 30, 2020, compared to a net loss of $1.80 million s for the
year ended Sept. 30, 2019. As of Dec. 31, 2020, the Company had
$1.56 million in total assets, $2.86 million in total liabilities,
and a total stockholders' deficit of $1.30 million.
M&K CPAS, PLLC, in Houston, Texas, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
Jan. 29, 2021, citing that the Company has recurring losses from
operations and insufficient working capital, which raises
substantial doubt about its ability to continue as a going concern.
DISCOVERY DAY: Solicitation Exclusivity Extended Until April 20
---------------------------------------------------------------
Chief Judge Caryl E. Delano of the U.S. Bankruptcy Court for the
Middle District of Florida, Fort Myers Division extended the
periods within which Debtor Discovery Day Academy II Inc. has the
exclusive right to solicit Plan acceptances through and including
April 20, 2021.
All corresponding plan and solicitation deadlines are also extended
consistent with the extension of exclusivity through and including
April 20, 2021. The Debtor shall file an amended plan and amended
disclosure statement on or before April 20, 2021.
A copy of the Court's Extension Order is available at
https://bit.ly/3fRhtsU from PacerMonitor.com.
About Discovery Day Academy II
Discovery Day Academy II Inc. is an independent private school
located in Bonita Springs. Founded in 2006, Discovery Day Academy
has developed The Discovery Method, a project-based learning model,
with an emphasis on children ages two to eight years.
Discovery Day Academy II filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-04183) on May 29, 2020. Discovery Day President Elizabeth A.
Garcia signed the petition. At the time of the filing, the Debtor
disclosed $5,500,000 and $6,050,389 in liabilities.
Chief Judge Caryl E. Delano oversees the case. The Debtor is
represented by Michael R. Dal Lago, Esq., at Dal Lago Law and LSI
Companies, Inc. as a real estate broker.
DOWN TOWN ASSOCIATION: Gets OK to Hire PFK O'Conner as Accountant
-----------------------------------------------------------------
The Down Town Association, Inc. received approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire PFK
O'Conner Davies, LLP as its accountant.
The Debtor requires an accountant to prepare and file all documents
regarding pre-bankruptcy and post-petition taxes, and keep its
books and records.
The firm will be paid at these rates:
Partner $250 per hour
Paraprofessional $150 per hour
Kerri Rawcliffe Rawcliffe, a partner at PFK, disclosed in a court
filing that the firm is disinterested as that term is defined in
Section 101(14) of the banruptcy Code.
The firm can be reached through:
Kerri Rawcliffe
PFK O'Conner Davies, LLP
40 Westminster Road, Suite 600
Providence, RI 02903
Phone: 401-621-6200/401-709-3050
Fax: 401-621-6209
Email: krawcliffe@pkfod.com
About Down Town Association
The Down Town Association, Inc. is the oldest social club in lower
Manhattan and a former haven for New York and national power
brokers.
Down Town Association sought Chapter 11 protection (Bankr. S.D.N.Y.
Case No. 21-10413) on March 4, 2021. The Debtor estimated up to
$100,000 in assets and $1 million to $10 million in liabilities as
of the bankruptcy filing.
Judge David S. Jones oversees the case.
The Debtor tapped the Law Offices Of Avrum J. Rosen, PLLC as its
legal counsel and PFK O'Conner Davies, LLP as its accountant.
EARTH FARE: Unsec. Creditors to Receive Nothing in Liquidating Plan
-------------------------------------------------------------------
Earth Fare, Inc., et al., filed with the U.S. Bankruptcy Court for
the District of Delaware a Combined Disclosure Statement and Joint
Chapter 11 Plan of Liquidation on April 6, 2021.
The Debtors entered chapter 11 with the belief that a robust,
public sale process would result in the highest and best price for
the Assets and would best allow the Debtors to maximize the value
of their Estates. Since the Petition Date, the Debtors, with the
aid of their advisors, specifically A&G, Hilco Streambank, and
Hilco/Gordon Brothers, engaged in a wholesale effort to market and
sell all of the Debtors' Assets, from the merchandise in the
Debtors' stores, to all of the Debtors' more significant Assets.
The Debtors' efforts during the Chapter 11 cases were intently
focused on, among other things, selling the Debtors' assets and,
maximizing the recovery to the Debtors' estates.
Following the Sales, the Debtors are focused principally on
efficiently winding down their businesses, preserving Cash held in
the Estates, and monetizing their remaining Assets. The remaining
Assets include Cash, certain deposits, prepayments, credits and
refunds, insurance policies or rights to proceeds thereof,
Holdings' equity interests in Earth Fare, and certain Causes of
Action.
This combined Disclosure Statement and Plan provides for the
Assets, to the extent not already liquidated, to be liquidated over
time and the proceeds thereof to be distributed to Holders of
Allowed Claims in accordance with the terms of the Plan and the
treatment of Allowed Claims. The Wind-Down Officer will effect such
liquidation and distributions. The Debtors will be dissolved as
soon as practicable after the Effective Date.
Since the Committee was appointed, the Debtors, First Lien Agent
and Committee engaged in negotiations with the goal of consensually
resolving the Chapter 11 Cases. These negotiations were ultimately
successful and accomplished several goals expressed by the
Committee. The Committee was part of the Debtors' Sales efforts and
supported the Sales of several of the Debtors' leases and the entry
into lease termination agreements with multiple landlords.
While the Sales were insufficient to satisfy the First Lien
Obligations, leaving the estate with insufficient funds for a
distribution to holders of Allowed General Unsecured Claims, the
Committee and First Lien Lenders reached agreement on the sharing
of Sales proceeds in which the First Lien Lenders agreed to the
Class 3 Effective Date Payment Amount that is estimated to pay
approximately 20% of the First Lien Obligations and, in turn, made
available the monies to establish a reserve fund, not to exceed
$4,000,000, as the sole source for the payment and satisfaction of
Allowed Claims. Second, the Committee sought and received
confirmation that the Preference and Avoidance Actions would not be
prosecuted and would be waived and released by the Debtors, First
Lien Lenders, Second Lien Lenders and Wind-Down Officer, and their
respective successors and assigns.
Class 5 consists of General Unsecured Claims in the amount of
$132,019,597.62. Holders of General Unsecured Claims are not
entitled to receive any Distribution or retain any property under
the Plan on account of such Claims.
Holders of Interests in the Debtors will retain no ownership
interests in the Debtors under the Plan and such Interests shall be
cancelled effective as of the Effective Date.
The Plan will be implemented by the continued existence of one of
the Debtors solely for purposes of monetizing any remaining
non-Cash Assets and any valuable Causes of Action, and the making
of Distributions in accordance with the Plan.
Counsel to the Debtors:
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Pauline K. Morgan
M. Blake Cleary
Sean T. Greecher
Shane M. Reil
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1256
EF@ycst.com
About Earth Fare Inc.
Founded in 1975 in Asheville, N.C., Earth Fare, Inc. --
http://www.earthfare.com/-- is a natural and organic food retailer
with locations across 10 states. It offers groceries and wellness
and beauty products.
Earth Fare and its affiliate, EF Investment Holdings, Inc., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 20-10256) on Feb. 4, 2020. At the time of the filing,
the Debtors each disclosed assets of between $100 million and $500
million and liabilities of the same range.
Judge Karen B. Owens oversees the cases.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP as legal
counsel; FTI Consulting, Inc. as financial and restructuring
advisor; and Epiq Corporate Restructuring, LLC as claims,
solicitation and balloting agent. Malfitano Advisors, LLC provides
disposition advisory services to the Debtors.
The U.S. Trustee for Region 3 appointed five creditors to serve on
the official committee of unsecured creditors in the Chapter 11
cases of Earth Fare, Inc. and EF Investment Holdings, Inc. The
Committee retained Pachulski Stang Ziehl & Jones LLP, as counsel,
and Alvarez & Marsal North America, LLC, as financial advisor.
EVEN STEVENS: Asks Accelerated Hearing on Bid Procedures for Equity
-------------------------------------------------------------------
Even Stevens Sandwiches, LLC, Even Stevens Utah, LLC, and Even
Stevens Idaho, LLC, ask the U.S. Bankruptcy Court for the District
of Arizona to set an accelerated hearing on their proposed bidding
procedures in connection with the sale of 92% of equity in the
Debtors to ES Management, LLC, for $3,016,670, subject to overbid.
The Debtors ask that an accelerated hearing be scheduled regarding
the Bid Procedures Motion to ensure sufficient time to solicit bids
prior to the Equity Sale, which will be scheduled to coincide with
the evidentiary hearing on plan confirmation on May 10, 2021, at
1:30 p.m.
It is necessary for the Court to address the Bid Procedures Motion
on an accelerated basis because the bankruptcy estate will suffer
irreparable harm if the Debtors are unable to proceed with the
Equity Sale and Confirmation Hearing on May 10, 2021. The Debtors
have a small window of opportunity to potentially obtain a loan
under the Payment Protection Program after the application deadline
was extended to May 31, 2021, but at the very least they would need
to obtain confirmation of the Chapter 11 plan before they would be
able to apply.
The Debtors' counsel has notified counsel for the U.S. Trustee's
office, the counsel for the Unsecured Creditors Committee, and all
parties requesting special notice by email. Upon entry of an order
granting the Debtors' request for an accelerated hearing on the Bid
Procedures Motion, the Debtors will provide notice of the
accelerated hearing to all creditors and parties in interest on the
Master Mailing Matrix.
A copy of the proposed order and notice is available at
https://tinyurl.com/hyj9bjat from PacerMonitor.com free of charge.
About Even Stevens Sandwiches
Even Stevens Sandwiches, LLC, opened its first restaurant in
downtown Salt Lake City, Utah, in June 2014. It has eight
operating locations: seven in Utah and one in Idaho.
Even Stevens Sandwiches and its affiliates each filed voluntary
Chapter 11 petitions (Bankr. D. Ariz. Lead Case No. 19-03236) on
March 21, 2019. At the time of the filing, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities.
Pernell W. McGuire, Esq., at Davis Miles Mcguire Gardner, PLLC, is
the Debtor's legal counsel.
EVEN STEVENS: Sets Bidding Procedures for Sale of 92% Equity
------------------------------------------------------------
Even Stevens Sandwiches, LLC, Even Stevens Utah, LLC, and Even
Stevens Idaho, LLC, ask the U.S. Bankruptcy Court for the District
of Arizona to authorize the bidding procedures in connection with
the sale of 92% of equity in the Debtors to ES Management, LLC, for
$3,016,670, subject to overbid.
Pursuant to Article III of the Debtors' Joint Plan of
Reorganization dated April 1, 2021, the Equity Sale will take place
in connection with the Plan confirmation that is scheduled on May
10, 2021, at 1:30 p.m., pursuant to the bidding procedures
established by separate order of the Court.
The Equity Sale is to be free and clear of all liens, claims and
interests, except as agreed to by the parties.
As noted in the Disclosure Statement and Plan, the Stalking Horse
Bidder will buy the Equity for a sale price of $3,016,670, or such
higher and better offer that makes itself known to the Debtors
prior to the final hearing on confirmation, on the following terms:
$1,850,000 paid at closing, minus $300,000 loaned to the Debtors
as part of the Financing Motion -- resulting in a cash infusion of
$1,550,000 on the Effective Date; and fixed semi-annual payments in
the amount of $116,667 beginning six months after the Effective
Date and continuing for 60 for a total of $1,166,670.
Upon closing, the Buyer will receive 92% of the New Equity. The
Class 4 General Unsecured Creditors will receive a pro rata portion
of 8% of the New Equity, which will be retained in the Reorganized
Debtor and distributed only after administrative and priority
claims have been paid in full.
The Debtors believe the sale price of $3,016,670 for 92% of the New
Equity in the Reorganized Debtor is reasonable. The total
estimated value of their current fixed assets is $3,258,004.
Accordingly, the Debtors assert that the value of 92% of New Equity
in the Reorganized Debtor is worth an estimated $3,016,670 and that
8% of New Equity to be distributed to Class 4 General Unsecured
Creditors under the Plan is worth the estimated amount of $241,334.
To date, the $3,016,670 sale price is the highest and best offer
the Debtors have been able to obtain.
The Closing of the transactions required and contemplated under the
Plan will take place on the Effective Date. All documents to be
executed and delivered by any party as provided in this Article VI
and all actions to be taken by any party to implement the Plan as
provided herein will be in form and substance satisfactory to the
Debtors.
These actions will occur at or before the Closing (unless otherwise
specified), and will be effective on the Effective Date of the
Plan:
A. Execution of Documents and Corporate Action: The Debtors
will deliver all documents and perform all actions reasonably
contemplated with respect to implementation of the Plan.
B. Cancellation of Equity Interests and Issuance of New
Equity: On the Effective Date of the Plan, all prepetition equity
interests of the Debtors will be retired, cancelled, extinguished
and/or discharged in accordance with the terms of the Plan, and the
New Equity of the Reorganized Debtor will be issued. The New
Equity will be free and clear of all Liens, Claims, and
encumbrances of any kind, except as otherwise provided in the Plan.
C. Execution and Ratification of the Distribution Trust
Agreement: On the Effective Date, the Distribution Trust Agreement
will be executed by all parties thereto. Each holder of a Claim
will be deemed to have ratified and become bound by the terms and
conditions of the Distribution Trust Agreement.
D. Transfer of Distribution Trust Assets: All property of the
Debtors constituting the Distribution Trust Assets will be conveyed
and transferred by the Debtors to the Distribution Trust, free and
clear of all Liens, Claims, interests, and encumbrances.
E. Executory Contracts and Unexpired Leases: The Debtors are
party to various commercial leases at locations where Even Stevens
Sandwiches currently operates or has operated restaurants. The
Debtors intend to assume the following leases below and assign them
to the Buyer:
Store No. Location
1 815 W Bannock St, Boise, ID 83702
2 131 Main St, Logan, UT 84321
3 2214 Washington Blvd, Ogden, UT 84401
4 414 East 200 South, Salt Lake City, UT 84111
5 2030 South 900 East, Salt Lake City, UT
84105
6 1346 Fort Union Blvd, Cottonwood Heights, UT
84121
7 541 East 12300 South, Draper, UT 84020
All creditors, interested parties, and the general public will have
an opportunity to make a higher and better offer for 92% of the New
Equity in the Reorganized Debtor upon the same terms and conditions
offered to the Stalking Horse Bidder, in accordance with these
Bidding Procedures:
a. The Debtors will solicit higher and better offers by
distributing investment opportunity packages to the parties listed
in the Marketing Plan.
b. Those parties seeking to make a higher and better offer for
92% of the New Equity in the Reorganized Debtor will be required to
serve written notice of their intention to bid on counsel for the
Debtors and the U.S. Trustee, which notice shall contain the
bidder's name, address,
financial statements and tax returns for the last two years, the
terms of the bid and a verified statement that if the bid is
accepted, the bidder will agree to abide by the terms of the sale
as described above and perform the obligations of the Plan.
c. Deposit: An amount equal to 10% of the higher and better
offer in the form of a cashier's or certified check and received by
the Debtors' by close of business on May 3, 2021
d. Auction: In the event that there are competing bids for the
New Equity in the Reorganized Debtor, the Court will hold an
auction at the Confirmation Hearing on May 10, 2021 at 1:30 p.m.
where competing bids will be offered at increments of $1,000. The
successful bidder will then be awarded 92% of the New Equity in the
Reorganized Debtor -- provided, however, that the transaction will
be effectuated only pursuant to confirmation of the Chapter 11
Plan.
e. Creditors of the Debtors will not be permitted to bid their
Claims as part of the purchase price.
f. Payment by the highest bidder will be due on the 15 days
after confirmation of the Plan. In the event that the successful
bidder fails to make the required payment, then the bid will be
deemed withdrawn and the New Equity will be awarded to the next
highest bidder.
The Bidding Procedures establish reasonable parameters under which
the value of the New Equity in the Reorganized Debtor may be tested
and ultimately sold. Accordingly, the Debtors respectfully ask
that the Court enters an Order approving the Bidding Procedures,
and for such further relief as may be appropriate.
A copy of the Agreement, the Bidding Procedures, and the Marketing
Plan is available at https://tinyurl.com/bhd6y722 from
PacerMonitor.com free of charge.
The Purchaser:
ES MANAGEMENT, LLC
11073 North Alpine Highway
Highland, UT 84003
Attn: Aaron Day
E-mail: aaron@bluelemon.com
About Even Stevens Sandwiches
Even Stevens Sandwiches, LLC, opened its first restaurant in
downtown Salt Lake City, Utah, in June 2014. It has eight
operating locations: seven in Utah and one in Idaho.
Even Stevens Sandwiches and its affiliates each filed voluntary
Chapter 11 petitions (Bankr. D. Ariz. Lead Case No. 19-03236) on
March 21, 2019. At the time of the filing, the Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities.
Pernell W. McGuire, Esq., at Davis Miles Mcguire Gardner, PLLC, is
the Debtor's legal counsel.
FERRELLGAS LP: Moody's Hikes CFR to B2 & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Investors Service upgraded Ferrellgas, L.P.'s Corporate
Family Rating to B2 from Caa3 and Probability of Default Rating to
B2-PD from Caa3-PD. Concurrently, Moody's affirmed the B3 rating of
Ferrellgas $1,475 million senior unsecured notes due 2026 and 2029
that were issued in March 2021. The B3 rating for Ferrellgas'
senior secured notes due 2025 and Ca ratings for its senior
unsecured notes due 2021, 2022, and 2023 were withdrawn since they
have been repaid. The Speculative Grade Liquidity rating was also
upgraded to SGL-3 from SGL-4. The rating outlook changed to stable
from ratings under review.
This rating action concludes the review for upgrade on Ferrellgas'
ratings that was initiated on March 15, 2021. It follows the
successful execution of Ferrellgas' refinancing transactions
comprising issuance of $1,475 million of senior unsecured notes due
2026 and 2029, establishment of a new $350 million senior secured
ABL revolving credit facility due April 2025, and issuance of $700
million of new preferred equity. The proceeds from the transaction,
along with cash on hand, were used to refinance Ferrellgas' secured
notes due 2025 and senior notes due 2021, 2022, and 2023.
"Through this transaction, Ferrellgas has addressed its refinancing
risk, reduced debt, and considerably improved its credit profile"
said Arvinder Saluja, Moody's Vice President. "Ferrellgas will now
also benefit from enhanced liquidity, and will be positioned to
further focus on improving its operations."
Upgrades:
Issuer: Ferrellgas, L.P.
Probability of Default Rating, Upgraded to B2-PD from Caa3-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-3 from SGL-4
Corporate Family Rating, Upgraded to B2 from Caa3
Outlook Actions:
Issuer: Ferrellgas, L.P.
Outlook, Changed To Stable From Rating Under Review
Affirmations:
Issuer: Ferrellgas, L.P.
Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD4)
Withdrawals:
Issuer: Ferrellgas, L.P.
Senior Secured Regular Bond/Debenture, Withdrawn , previously
rated B3 (LGD2)
Senior Unsecured Regular Bond/Debenture, Withdrawn , previously
rated Ca (LGD4)
RATINGS RATIONALE
Ferrellgas' B2 CFR reflects the addressing of its refinancing risk,
improved financial leverage, and a tenable capital structure
following a period of balance sheet stress. Its ratings also
reflect improved liquidity, extended maturity profile, and improved
operating profile, stemming from cost reductions and efficiency
improvements. Its credit profile benefits from the company's
substantial scale and geographic diversification that facilitate
cost efficiencies in the fragmented propane distribution industry,
its utility-like services that provide a base level of revenue, and
a propane tank exchange business which generates complementary cash
flows during summer months. Ferrellgas' ratings are constrained by
its exposure to the seasonal nature of propane sales with
significant dependency on cold weather months and the associated
volatility in cash flows.
Ferrellgas' senior unsecured notes due 2026 and 2029 are rated B3,
one notch below the company's B2 CFR. The company's capital
structure is comprised of the senior unsecured notes, which makes
up the majority of debt in the liability structure, and a $350
million secured revolving credit facility (unrated) that has a
borrowing base comprised of a fixed $200 million plus up to $150
million based on a proportion of receivables and inventories, as
defined in the credit agreement. The company's revolver benefits
from first priority claim over the company's assets, subordinating
the senior notes to the claims under the facility.
The SGL-3 speculative grade liquidity rating reflects Moody's view
that Ferrellgas' liquidity will be adequate through at least 2022.
The company has approximately $211 million available on its $350
million secured revolving credit facility due April 2025. The
revolver's financial covenants include a minimum interest coverage
ratio of 2.50x, a maximum secured leverage ratio of 2.50x, and a
maximum total net leverage ratio (with cash netting limited to $100
million) of 5.50x, stepping down to 5.25x on April 30, 2022, and
stepping down by 0.25x every six months thereafter, until reaching
4.75x on April 30, 2023. Moody's expects the company's cash on hand
to stand over $150 million in 2021. The company's working capital
needs are highly seasonal, with peak borrowings during the winter
season that can fluctuate significantly with volatile propane
price. Moody's expects Ferrellgas to generate modest free cash flow
given the lower interest expense expected after refinancing and
some improvement in earnings.
The stable outlook reflects Moody's expectation that Ferrellgas
will generate free cash flow and maintain adequate liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ferrellgas ratings could be upgraded if the company's leverage
(Debt/EBITDA) falls below 4.50x while retained cash flow to net
debt remains above 10%. The ratings could be downgraded with
deterioration of the company's liquidity, or if leverage rises
above 5.50x or EBITA/Interest Expense falls below 1.75x.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Ferrellgas, L.P. (Ferrellgas), is an operating subsidiary of
Ferrellgas Partners L.P., owns and operates propane distribution
businesses based in Overland Park, Kansas.
FIGUEROA MOUNTAIN: Creekstone Buying All Assets for $7.75 Million
-----------------------------------------------------------------
Figueroa Mountain Brewing, LLC, filed with the U.S. Bankruptcy
Court for the Central District of California a notice of its
proposed bidding procedures relating to the sale of substantially
all assets to Creekstone Mountain LLC for approximately $7.75
million, subject to overbid.
A hearing on the Motion is set for April 19, 2021, at 10:00 a.m.
Objections, if any, must be filed no later than 14 days before the
hearing date.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Five business days prior to the Auction
b. Initial Bid: Be on substantially the same terms as the
approved APA, specifically including (i) satisfaction in full of
the allowed amount of the MBT Claim or assumption of the MBT Claim
upon terms acceptable to Buyer and MBT, provided that Buyer may
only assume the MBT Claim and not satisfy in full the MBT Claim if
MBT agrees to release Seller from all liability on the MBT Claim,
(ii) satisfaction in full of the allowed amount of the claim of
White Winston Select Asset Funds, LLC [not to exceed $1.5 million],
to the extent secured by a lien senior to the MBT Lien, which may
be paid by cash and/or turnover of collateral securing the Senior
WW Lien as determined by the Court, (iii), satisfaction of the cure
amounts for the Assigned Contracts, (iv) satisfaction of the DIP
Loan, and (v) provision for payment of administrative expenses in
at least the amount of $750,000 plus any additional amounts owed to
the Debtor's sales agent
c. Deposit: $825,000
d. Auction: If the Debtor receives any Qualified Bids from any
Qualified Bidders, then at the Sale Hearing, the Debtor will
conduct an auction for the Assets on the terms and conditions set
forth. Only Qualified Bidders will be permitted to bid on the
Assets at the Auction.
e. Bid Increments: $100,000
f. Credit Bidding: At the Auction, Creekstone will be
permitted to credit bid its secured claim, and Montecito Bank &
Trust will be permitted to credit bid its secured claim.
Concurrent with the Motion, the Debtor is filing a motion to
prohibit White Winston from credit bidding. White Winston's right
to credit bid will be restricted, if at all, as ordered by the
Bankruptcy Court.
g. Break Up Fee: $375,000
h. The Debtor will be filing an application to employ Onyx
Asset Advisors, LLC and Rabin Worldwide, Inc. as sales agents and
brokers to market the Assets. They will advertise the proposed
sale of assets in national and regional industry publications and
will directly contact parties they believe may be interested in
purchasing the assets based on their experience in the industry.
The sale will be free and clear of all liens, interests and
encumbrances.
The Debtor asks entry of an order:
(1) approving the Asset Purchase Agreement between Creekstone
and the Debtor, to be used by Creekstone and prospective
overbidders who seek to participate in an auction;
(2) approving the bidding procedures, auction format and
stalking horse bid protections;
(3) scheduling an auction and a hearing for the Court to
consider approval of the sale of the Assets to the highest bidder,
including that the sale be free and clear of all liens, interests
and encumbrances, in not less than 60 days from the hearing on the
Motion, as the Court's schedule allows;
(4) approving the form of notice of the Sale Hearing;
(5) establishing procedures for the Sale Hearing, including
objection and reply deadlines;
(6) establishing procedures for the assumption and assignment
of executory contracts and unexpired leases and approving the form
and manner of notice related thereto; and
(7) finding that the form and service of the Motion was
appropriate and either satisfied the requirements of the Federal
Bankruptcy Rules and Local Bankruptcy Rules or that the Debtor is
relieved from its obligation to comply with any inconsistent
requirements.
A copy of the Agreement is available at
https://tinyurl.com/5k4uy4mb from PacerMonitor.com free of charge.
The Purchaser:
CREEKSTONE MOUNTAIN LLC
Attn: Jimmy Chehebar
511 Canal Street, 6th Fl.
New York, NY 10013
Telephone: (212) 924-3100
E-mail: Jimmy@veracitypartners.net
The Purchaser is represented by:
SHEMANO LAW
Attn: David B. Shemano
1801 Century Park East, Suite 1600
Los Angeles, CA 90067
Telephone: (310) 492-5033
E-mail: dshemano@shemanolaw.com
About Figueroa Mountain Brewing
Founded in 2020, Figueroa Mountain Brewing, LLC --
https://www.figmtnbrew.com/ -- is in the business of manufacturing
beer with principal place of business in Buellton, Calif.
Figueroa Mountain Brewing sought protection under Chapter 11 of
the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 20-11208) on Oct. 5,
2020. Jaime Dietenhofer, the company's manager, signed the
petition. At the time of the filing, the Debtor disclosed between
$1 million and $10 million in both assets and liabilities.
Judge Martin R. Barash oversees the case.
Lesnick Prince & Pappas LLP is the Debtor's legal counsel.
FIGUEROA MOUNTAIN: Seeks to Extend Reply Date to Assets Sale
------------------------------------------------------------
Figueroa Mountain Brewing, LLC, filed with the U.S. Bankruptcy
Court for the Central District of California a stipulation to
extend the response date to its proposed bidding procedures
relating to the sale of substantially all assets to Creekstone
Mountain LLC for approximately $7.75 million, subject to overbid.
A hearing on the Motion is set for April 19, 2021, at 10:00 a.m.
Objections, if any, must be filed no later than 14 days before the
hearing date.
The Debtor has filed a Motion to sell assets of the estate. Harry
Poor is the landlord with regard to an unexpired lease of premises
on Industrial Way in Buellton. The Debtor has neither assumed nor
rejected the lease. The parties are discussing issues concerning
assumption of the lease by the stalking horse buyer. The parties
would prefer to delay the filing of any objection to the sale
motion as discussions proceed.
About Figueroa Mountain Brewing
Founded in 2020, Figueroa Mountain Brewing, LLC --
https://www.figmtnbrew.com/ -- is in the business of manufacturing
beer with principal place of business in Buellton, Calif.
Figueroa Mountain Brewing sought protection under Chapter 11 of
the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 20-11208) on Oct. 5,
2020. Jaime Dietenhofer, the company's manager, signed the
petition. At the time of the filing, the Debtor disclosed between
$1 million and $10 million in both assets and liabilities.
Judge Martin R. Barash oversees the case.
Lesnick Prince & Pappas LLP is the Debtor's legal counsel.
FIRST TO THE FINISH: Seeks May 5 Plan Exclusivity Extension
-----------------------------------------------------------
Debtor First to the Finish Kim and Mike Viano Sports Inc. requests
the U.S. Bankruptcy Court for the Southern District of Illinois to
extend the exclusive periods during which the Debtor may file a
plan and disclosure statement through and including May 5, 2021,
and to solicit acceptances through and including July 5, 2021.
Given the pending status of the Motion to Dismiss Debtor's Chapter
11 Case and potential settlement with its creditors, Debtor is
hopeful that the relief requested herein will not be necessary.
However, out of an abundance of caution, Debtor submits it would be
reasonable to allow Debtor extensions of the Plan.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3dJxlv8 from PacerMonitor.com.
About First to the Finish Kim
and Mike Viano Sports Inc.
First to the Finish Kim and Mike Viano Sports Inc. sells sporting
goods, hobbies, and musical instruments.
First to the Finish Kim and Mike Viano Sports filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Ill. Case No. 20-30955) on October 7, 2020. The petition was
signed by Mike Viano, president. At the time of filing, the Debtor
estimated $1 million to $10 million in both assets and
liabilities.
Judge Laura K. Grandy oversees the case. The Debtor is represented
by Carmody MacDonald P.C.
FORESTAR GROUP: Moody's Rates New $400MM Unsecured Notes 'B1'
-------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Forestar Group
Inc.'s proposed $400 million senior unsecured notes due 2026. All
other ratings for the company remain unchanged. The outlook is
positive.
The proceeds from the new notes will be used to fund the redemption
of the 8.0% senior notes due April 2024 and for general corporate
purposes. Pro forma for the proposed offering, Moody's projects
Forestar's total debt to capitalization will be approximately 39%
at September 30, 2021.
"With the proposed $400 million offering, Forestar will increase
its financial flexibility by extending its debt maturity schedule
and lowering its interest expense burden," said Emile El Nems, a
Moody's VP-Senior Analyst. "Pro forma for the offering Forestar
will have no debt maturities until April 2026."
The following rating actions were taken:
Assignments:
Issuer: Forestar Group Inc.
Gtd. Senior Global Notes, Assigned B1 ( LGD4)
RATINGS RATIONALE
Forestar's B1 Corporate Family Rating reflects the company's
position as a leading US land developer across 21 states and 51
markets, differentiated business model, solid execution, good
liquidity and strategic relationship with D.R. Horton Inc., (DHI) a
premiere homebuilder in the US (Baa2 stable). At the same time,
Moody's rating takes into consideration the risk associated with
being a land developer such as potential impairment charges,
industry cyclicality, the competitive nature of its business, and
the absence of any guarantees by DHI for Forestar's debt.
The positive outlook reflects Moody's expectation that the company
will maintain a disciplined financial policy and modest leverage
while aggressively pursuing revenue growth and profitability. In
addition, the positive outlook takes into consideration Moody's
expectations for solid underlying homebuilding industry
fundamentals.
Forestar's Speculative Grade Liquidity Rating of SGL-2 reflects
Moody's expectation of good liquidity over the next 12 to 18
months. At December 31, 2020, Forestar had approximately $237
million in available cash and approximately $340 million in
availability under its revolving credit facility that expires in
October 2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if (all ratios include Moody's
standard adjustments):
EBIT-to-interest expense is approaching 4.0x
Debt-to-capitalization is below 40% for a sustained period of
time
The company improves its liquidity and free cash flow
The rating could be downgraded if:
Debt-to-capitalization is above 45% for a sustained period of
time
Interest coverage is below 3.0x for a sustained period of time
The company's liquidity deteriorates
The homebuilding outlook becomes increasingly tenuous
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
Headquartered in Arlington, Texas, Forestar Group Inc. is a
publicly traded land developer that is currently operating in 51
markets in 21 states. On October 5, 2017, it became 75%-owned by
D.R. Horton, Inc., one of the country's largest homebuilders by
unit volume. Forestar's revenues for the FY 2020, ended September
30, 2019 were $932 million.
FORESTAR GROUP: S&P Rates New $400MM Senior Unsecured Notes 'B+'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level and '2' recovery
ratings to Forestar Group Inc.'s proposed $400 million senior
unsecured notes due 2026. The recovery rating indicates its
expectation of substantial (70%-90%; rounded estimate: 85%)
recovery in the event of payment default. The company will use the
proceeds from the issuance to fully redeem its $350 million senior
unsecured notes due 2024 and for general corporate purposes.
FORTRESS TRANSPORTATION: S&P Rates $500MM Sr. Unsecured Notes 'B'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to Fortress Transportation and Infrastructure
Investors LLC's (FTAI) proposed $500 million senior unsecured notes
due 2028. The '3' recovery rating indicates its expectation for
meaningful recovery (50%-70%; rounded estimate: 55%) in the event
of a default. The company will use the proceeds from these notes to
fully redeem its $400 million senior unsecured notes due 2022 and
allocate any additional net proceeds for general corporate
purposes.
S&P said, "Our 'B' issue-level rating and '3' (50%-70%; rounded
estimate: 55%) recovery rating on FTAI's existing $850 million
senior unsecured notes due 2025 and $400 million senior unsecured
notes due 2027 remain unchanged. The proposed notes will rank pari
passu with the company's existing rated notes.
"Our 'B' issuer credit rating on FTAI continues to reflect the
niche positions of its businesses. In the aircraft and aircraft
engine leasing segment, the company's portfolio is relatively
smaller and older than those of the many other aircraft lessors we
rate. FTAI's infrastructure segment is also relatively small in
scale and limited in terms of asset diversity given its focus on
energy terminals.
"We expect that FTAI's total unsecured debt will only increase by
about $100 million following the transaction, thus we do not expect
there to be any material changes in our projected credit metrics."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- The '3' recovery rating on FTAI's unsecured notes indicates
S&P's expectation for meaningful (50%-70%; rounded estimate: 55%)
recovery in the event of a default.
Simulated default assumptions
-- Simulated year of default: 2024
-- S&P values the company on a discrete asset value basis as a
going concern and its valuations reflect the value of its various
assets at default based on recent market appraisals, which it
adjusts for expected realization rates in a distressed scenario.
Simplified waterfall
-- Net recovery value for waterfall after administrative expenses
(5%): $1.5 billion
-- Obligor/nonobligor valuation split: 100%/0%
-- Value available for senior unrated claims: $1.5 billion
-- Estimated senior unrated claims: $489 million
-- Total value available to junior unsecured claims: $995 million
-- Estimated junior unsecured debt claims: $1.8 billion
--Recovery expectations: 50%-70% (rounded estimate: 55%)
FREE FLOW: Swings to $850,610 Net Profit in 2020
------------------------------------------------
Free Flow, Inc. filed with the Securities and Exchange Commission
its Annual Report on Form 10-K disclosing net profit of $850,610 on
$411,694 of total revenues for the year ended Dec. 31, 2020,
compared to a net loss of $121,810 on $420,538 of total revenues
for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $3.66 million in total assets,
$2.41 million in total liabilities, $330,000 in series B redeemable
preferred stock, $470,935 in series C redeemable preferred stock,
and a total stockholders' deficit of $57,688.
At Dec. 31, 2020, the Company has a total current assets of
$3,662,186 consisting of $83,516 in cash, $202,669 in accounts
receivable and $1,778,824 in inventories and work in progress at
cost. At Dec. 31, 2020, total current liabilities were $951,518
consisting of $9,829 in accounts payable and $1,689 from related
parties and notes payable $940,000 and accrued interest of $0.
On a short-term basis, the Company has generated marginal revenues
sufficient to cover operations. For long term needs the Company
will be dependent on receipt, if any, from the growth in sales.
The Company's capitalization is 100,000,000 common shares with a
par value of $0.0001 per share and 20,000,000 preferred stock, with
a par value of $0.0001 per share.
The Company said it does not have capital sufficient to meet its
expansion Capital needs. The Company will have to seek loans or
equity placements to cover such cash needs.
No commitments to provide additional funds have been made by the
Company's management or other stockholders. Accordingly, there can
be no assurance that any additional funds will be available to the
Company to allow it to cover the Company's expansion budget.
The Company has completed of a Private Placement Memorandum (PPM)
under rule 506 (c) of the SEC Act of 1933 for a sum of $19,500,000
against issuance of convertible preferred shares to augment its
needs for expansion and acquisitions of existing, profitable Auto
Parts companies in USA and Canada. The management is in discussion
with a few Investment Bankers, results are expected in due course
of time. The Company or its Management does not guarantee if this
PPM will be result in attracting subscriptions and that it will be
successful.
GOING CONCERN
Free Flow said, "Future issuances of the Company's equity or debt
securities will be required for the Company to continue to finance
its operations and continue as a going concern. The Company's
present revenues are marginally sufficient to meet operating
expenses. The financial statement of the Company has been prepared
assuming that the Company will continue as a going concern, which
contemplates, among other things, the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company had incurred cumulative net losses of $559,705 since its
inception which have been turned around to net profits of $850,610
during the year 2020 but still requires greater sales for its
contemplated operational and marketing activities to take place.
The Company's ability to increase additional sales through the
future is unknown. The obtainment of additional sales, the
successful development of the Company's contemplated plan of
operations, and its transition, ultimately, to the attainment of
profitable operations are necessary for the Company to continue
operations. The ability to successfully resolve these factors
raise substantial doubt about the Company's ability to continue as
a going concern. The financial statements of the Company do not
include any adjustments that may result from the outcome of these
uncertainties."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1543652/000109690621000715/fflo-20201231.htm
About Free Flow
Free Flow, Inc. is a Delaware company that creates and acquires
operating subsidiaries with the goal of manufacturing and selling
products and services. Through its current subsidiaries - Accurate
Auto Parts, Inc., Motor & Metals, Inc., and Citi Autos, Corp. –
the Company provides OEM (Original Equipment Manufacturer) recycled
auto parts and supplies from a warehousing and shipping facility on
its 19-plus acre facility in King George, Virginia, and 16 acres in
Mineral, VA, USA.
GALICIAPOKE LLC: $27K Sale of Orlando Personal Property to SEL OK'd
-------------------------------------------------------------------
Judge Lori V. Vaughan of the US Bankruptcy Court for the Middle
District of Florida authorized Galiciapoke LLC's sale of personal
property at the leased premises located at 7600 Dr. Phillips Blvd.,
Suite 102, in Orlando, Florida, to SEL Ventures, LLC, for $27,000,
free and clear of all liens, claims, encumbrances, and interests.
The sale of the personal property is approved nunc pro tunc to Feb.
26, 2021.
The liens and security interests of Truist Bank, successor by
merger to SunTrust Bank, will attach to the sale proceeds.
Pursuant to Bankruptcy Rules 6004(h), 6006(d), and 7062(g), the
Sale Order will not be stayed and will be effective immediately
upon entry at which time the Debtor will pay the sale proceeds in
the amount of $27,000 to Truist Bank.
Attorney Jeffrey S. Ainsworth is directed to serve a copy of the
Order on interested parties who do not receive service by CM/ECF
and file a proof of service within three days of entry of the
Order.
About Galiciapoke LLC
Galiciapoke LLC sought protection under chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-04381) on August 3,
2020, listing under $1 million in both assets and liabilities.
Jeffrey S. Ainsworth, Esq. at BRANSONLAW, PLLC represents the
Debtor as counsel.
GARRETT MOTION: Wins April 18 Plan Exclusivity Extension
--------------------------------------------------------
Judge Michael E. Wiles of the U.S. Bankruptcy Court for the
Southern District of New York extended the periods within which
Garrett Motion Inc. and its affiliates have the exclusive right to
file a plan of reorganization through and including April 18, 2021,
and to solicit acceptances on the Plan through and including June
17, 2021.
On January 8, 2021, the Debtors announced the results of the
auction and, in accordance with the milestones set forth in the
winning bid, filed the Plan, Disclosure Statement, and Solicitation
Procedures Motion. Parallel to the auction process and thereafter,
the Debtors considered and negotiated substantially enhanced
proposals for a restructuring transaction with the parties to that
certain Third Amended and Restated Coordination Agreement, dated as
of December 22, 2020, by and among Centerbridge Partners, L.P.,
Oaktree Capital Management, L.P., Honeywell International Inc., and
the Additional Investors.
And since the Petition Date, the Debtors have been in ongoing,
continuous discussions with their major stakeholders, including
their prepetition lenders, prepetition noteholders, the Creditors'
Committee, the Equity Committee, Honeywell International Inc., the
equity holder within the COH Group, and other unaligned equity
holders. The Plan is, among other things, the result of these
extensive discussions and has the support of most of these
stakeholder groups.
Critically, the Plan includes a global settlement with Honeywell,
which is a testament to the good faith progress that the Debtors
have made in negotiating with all creditors. The Debtors intend to
continue constructive communications with stakeholders to build
further consensus for the Plan and the Debtors' prompt emergence
from chapter 11.
The Debtors have completed a lengthy and robust competitive
process, including holding an auction lasting nearly a month to
identify (and improve) transactions that would maximize value for
the Debtors' estates and stakeholders, and, in parallel, the
Debtors extensively negotiated and ultimately entered into the Plan
Support Agreement with the COH Group that provides even more value
to the Debtors' estates and their stakeholders.
The Debtors have filed their Plan and Disclosure Statement, which
reflects input and support from the Debtors' prepetition lenders,
prepetition noteholders, Honeywell, and a majority of GMI's
stockholders.
The Debtors continue to work closely with parties-in-interest,
including the Equity Committee. While the Equity Committee
continues to separately seek termination of exclusivity to pursue
an alternative restructuring path, disagreement with the Debtors
over how to conclude these Chapter 11 Cases provides no basis to
deny the requested extension. The Equity Committee cannot
substitute its business judgment for that of the Debtors. As
detailed herein, the Debtors have made meaningful progress in these
Chapter 11 Cases towards confirmation of a chapter 11 plan and
emergence from these Chapter 11 Cases, and with additional time, it
will give the Debtors the opportunity to bring those efforts to a
successful conclusion.
The Debtors have been paying their undisputed post-petition bills
as they become due. Furthermore, the Debtors continue to generate
positive cash flow every month and have successfully maintained
prepetition business relationships with their critical vendors. The
Debtors' liquidity position remains strong and the DIP financing
remains available. This ensures that the Debtors will continue to
meet their ongoing post-petition obligations and that the requested
extension of the Exclusive Periods will not jeopardize the rights
of any creditors or other parties doing business with the Debtors
during these Chapter 11 Cases.
A copy of the Debtors' Motion to extend is available at
https://bit.ly/2PF1N18 from kccllc.com.
A copy of the Court's Extension Order is available at
https://bit.ly/3sNseA4 from kccllc.com.
About Garrett Motion
Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs,
manufactures, and sells highly engineered turbocharger and
electric-boosting technologies for light and commercial vehicle
original equipment manufacturers and the global vehicle and
independent aftermarket.
Garrett Motion and its affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 20-12212) on September 20, 2020.
Garrett disclosed $2.066 billion in assets and $4.169 billion in
liabilities as of June 30, 2020.
The Debtors tapped Sullivan & Cromwell LLP as counsel, Quinn
Emanuel Urquhart & Sullivan LLP as co-counsel, Perella Weinberg
Partners, and Morgan Stanley & Co. LLC as investment bankers, and
AlixPartners LP as restructuring advisor. Kurtzman Carson
Consultants LLC is the claims agent.
On October 5, 2020, the U.S. Trustee for Region 2 appointed an
official committee of unsecured creditors in the Debtors' Chapter
11 cases. White & Case LLP and Conway MacKenzie, LLC, serve as the
creditors' committee's legal counsel and financial advisor,
respectively.
The U.S. Trustee also appointed an official committee to represent
equity security holders in the Debtors' cases. The equity committee
tapped Glenn Agre Bergman & Fuentes LLP as its legal counsel, MAEVA
Group LLC as a financial advisor, and Cowen and Company, LLC as an
investment banker.
Centerbridge Partners, L.P., and Oaktree Capital Management, L.P.,
as Plan Sponsors are represented in the case by Milbank as legal
counsel and Houlihan Lokey, Inc., as financial advisor.
Kirkland & Ellis is legal counsel to Honeywell, and TRS Advisors
LLC and Centerview Partners LLC are its financial advisors.
Jones Day is s legal counsel to each Additional Investor, and
Rothschild & Co. is their financial advisor.
Fried, Frank, Harris, Shriver & Jacobson LLP, is the legal counsel
and Ducera Partners LLC, is the financial advisor to The Baupost
Group, LLC.
Ropes & Gray LLP is the legal counsel, and Moelis & Co., the
financial advisor to the Consenting Noteholders.
Gibson, Dunn & Crutcher LLP, is the legal counsel and PJT Partners
LP the financial advisor to the Consenting Lenders.
GENEVA VILLAGE: Seeks to Hire Anthony J. DeGirolamo as Counsel
--------------------------------------------------------------
Geneva Village Retirement Community Ltd. and Geneva Village
Retirement Community LLC seek approval from the U.S. Bankruptcy
Code for the Northern District of Ohio to hire Anthony J.
DeGirolamo, Attorney at Law as their legal counsel.
The firm's services include:
(a) assisting the Debtors in fulfilling their duties under the
Bankruptcy Code;
(b) representing the Debtors with respect to motions filed in
their Chapter 11 cases, including, without limitation, motions for
use of cash collateral or for debtor-in-possession financing,
motions to assume or reject unexpired leases and executory
contracts, motions for relief from stay, and motions for the sale
or use of estate property;
(c) assisting the Debtors in the administration of their
Chapter 11 cases.
The firm will be paid at these rates:
Anthony J. DeGirolamo, Esq. $360 per hour
Paralegals $200 per hour
The firm holds a $10,316 retainer.
DeGirolamo is a "disinterested person" within the meaning of
Sections 101(14) and 327 of the Bankruptcy Code, according to court
papers filed by the firm.
The firm can be reached through:
Anthony J. DeGirolamo, Esq.
Anthony J. DeGirolamo, Attorney at Law
3930 Fulton Dr NW #100b
Canton, OH 44718
Phone: +1 330-305-9700
Email: tony@ajdlaw7-11.com
About Geneva Village Retirement Community
Organized on March 10, 2004, Geneva Village Retirement Community,
Ltd. is an Ohio limited liability company that operates a skilled
nursing facility at 1140 South Broadway, Geneva, Ohio. It conducts
business under the name Geneva Village Skilled Nursing &
Rehabilitation.
Geneva Village Retirement Community Ltd. and Geneva Village
Retirement Community, LLC filed their voluntary petition for relief
under Chapter 11 Bankruptcy Code (Bankr. N.D. Ohio Case No.
21-50498 and 21-50498) on March 30, 2021, listing under $1 million
in both assets and liabilities. Anthony J. DeGirolamo, Attorney at
Law represents the Debtors as counsel.
GENTIVA HEALTH: S&P Raises ICR to 'B+', Outlook Stable
------------------------------------------------------
S&P Global Ratings raisedits issuer credit rating on U.S. home care
provider Gentiva Health Services Inc. and its issue-level rating on
its debt to 'B+ from 'B'.
S&P said, "The stable outlook reflects our expectation of mid- to
high-single-digit revenue growth organically, while adjusted debt
to EBITDA remains about 5x or lower.
"The upgrade reflects our view that the company has achieved and
will maintain credit metrics that are stronger than we previously
anticipated, including adjusted debt to EBITDA improving to below
5x." In 2020, Gentiva experienced reduced census and adverse rate
effects from an unfavorable mix shift as new patient admissions
declined and patient recertifications increased. This put downward
pressure on revenue and profit margin because recertifications are
reimbursed at a lower rate. In response, the company's clinical
staffing levels declined in line with the lower patient census, and
the company implemented significant cost-cutting measures,
including overhead staff reductions as it realized material
synergies from the transition to the Home Care Home Base (HCHB)
platform.
Despite the challenging operating environment brought on by the
COVID-19 pandemic, Gentiva's leverage reduction accelerated in late
2020 and early 2021 as the company repaid debt. These recent debt
paydowns, combined with our expectation for modest EBITDA
expansion, should result in adjusted debt to EBITDA of about 5x in
2021, which is well below the 6x-7x range we had previously
assumed. S&P believes leverage will remain there and that the
company will generate free operating cash flow (FOCF) of more than
$200 million per year or at least 8% of adjusted debt beyond 2021.
The company could benefit from favorable actions by Congress in the
near term. Gentiva's payor profile remains significantly exposed to
reimbursement risk, as evidenced by the Centers for Medicare and
Medicaid Services' 2020 passage of the Patient-Drive Grouping Model
(PDGM). S&P said, "We expected PDGM to be largely disruptive to
home care providers, including Gentiva. However, with the onset of
the pandemic and the subsequent passage of government relief
legislation, PDGM's effect was temporarily offset. The 2020
Coronavirus Aid, Relief, and Economic Security (CARES) Act provided
immediate relief for home care providers such as Gentiva in the
form of emergency funding, advanced accelerated payments, and
payroll tax deferrals. Gentiva has largely repaid the relief funds
as of February 2021, except for the tax deferral, which has a
repayment requirement over the next two years. Part of the CARES
Act legislation was a moratorium of the annual 2% Medicare rate cut
for providers, which extended through March 31, 2021. Although this
moratorium has expired, both the Senate and House of
Representatives have approved individual bills that will likely be
addressed when Congress returns from its standard two-week recess
in mid-April. Although the passage of legislation is uncertain, we
believe Gentiva has implemented sufficient cost cuts and
operational efficiencies as a result of HCHB to offset the
potential sequestration or future rate cut."
The highly fragmented industry with low barriers to entry could
spur mergers and acquisitions. The $100 billion home care industry
is highly fragmented--the top five providers represent about 20% of
the market share. S&P expects Gentiva to increase its rate of
acquisitions modestly over the next 12-18 months, but it assumes
leverage will remain about 5x.
S&P said, "Our stable outlook on Gentiva primarily reflects our
expectation that adjusted debt to EBITDA should remain in the
4.5x-5.5x range over the next few years as EBITDA growth largely
offsets acquisitions funded by incremental debt and internal cash
flow generation. The stable outlook also reflects our expectation
that Gentiva will generate stable EBITDA margins and good FOCF.
Additionally, we expect the company could benefit from a further
suspension of the Medicare sequestration in the near term, and we
assume the reimbursement environment is stable.
"We could lower the rating within the next 12 months if we expect
Gentiva to sustain adjusted debt to EBITDA above 5.5x. This could
occur if the company deploys a significant amount of new debt to
fund an acquisition or distribution to shareholders. It could also
occur if significant reimbursement rate cuts result in weaker
earnings and free cash flow prospects for the company.
"We could upgrade Gentiva within the next 12 months if we expect
adjusted debt to EBITDA to be sustained below 4x and adjusted FOCF
to debt of above 10%. In this scenario, we would expect the
sponsors, TPG Capital (TPG) and Welsh, Carson, Anderson, and Stow
(WCAS), to relinquish control, or we would expect that Humana would
provide credit support."
GIA REDEVELOPMENT: Seeks to Hire Robert S. Altagen as Legal Counsel
-------------------------------------------------------------------
Gia Redevelopment, LLC seeks approval from the U.S. Bankruptcy
Court for the Central District of California to hire the Law
Offices of Robert S. Altagen, Inc., A Professional Corporation as
legal counsel.
The firm's services include:
(a) advising the Debtor regarding its powers and duties in the
continued operation of its business and management of its
property;
(b) consulting with the Debtor, the U.S. trustee and other
parties-in-interest in the administration of the Debtor's Chapter
11 case;
(c) investigating the acts, conduct, liabilities, assets and
financial condition of the Debtor, the operation of the Debtor's
business and any other matter relevant to the case;
(d) preparing legal papers;
(e) participating in the Debtor's formulation of a plan of
reorganization and soliciting acceptances or rejections of the
plan; and
(f) general legal representation of the Debtor in all aspects
relating to its bankruptcy proceeding.
The firm's attorneys and paralegals will be paid at these rates:
Robert S. Altagen, Esq. $450 per hour
Associate Attorneys $325 per hour
Paralegals $150 per hour
The Debtor has agreed to pay the firm an initial retainer of
$7,500.
Robert Altagen, Esq., disclosed in court filings that his firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Robert S. Altagen, Esq.
Law Offices of Robert S. Altagen, Inc.
A Professional Corporation
1111 Corporate Center Drive, Suite 201
Monterey Park, CA 91754
Telephone: (323) 268-9588
Facsimile: (323) 268-8742
Email: robertaltagen@altagenlaw.com
About Gia Redevelopment
Gia Redevelopment, LLC sought Chapter 11 protection (Bankr. D.C.
Calif. Case No. 21-11639) on March 1, 2021. Jeff Thompson,
managing member, signed the petition. At the time of the filing,
the Debtor had between $1 million and $10 million in both assets
and liabilities. Judge Ernest M. Robles oversees the case. The
Debtor tapped the Law Offices of Robert S. Altagen, Inc. as its
legal counsel.
GLENROY COACHELLA: Seeks to Hire Grobstein Teeple as Accountant
---------------------------------------------------------------
Glenroy Coachella, LLC seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Grobstein
Teeple LLP as accountant.
The firm will be paid at these rates:
Partners $335 to $525 per hour
Managers $225 to $335 per hour
Staffs $195 per hour
The firm will also be reimbursed for out-of-pocket expenses
incurred.
Howard Grobstein, a partner at Grobstein Teeple, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Howard B. Grobstein
Grobstein Teeple LLP
6300 Canoga Avenue, Suite 1500
Woodland Hills, CA 91367
Tel: (818) 532-1020
About Glenroy Coachella, LLC
Glenroy Coachella, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-11188) on Feb. 15,
2021. Stuart Rubin, manager, signed the petition. In the petition,
the Debtor had estimated assets of between $50 million and $100
million and liabilities of between $10 million and $50 million.
Judge Sheri Bluebond oversees the case.
The Debtor tapped Weintraub & Selth, APC and Grobstein Teeple, LLP
as its legal counsel and accountant, respectively.
GOGO INC: Moody's Raises CFR to B3 & Alters Outlook to Stable
-------------------------------------------------------------
Moody's Investors Service upgraded Gogo Inc.'s corporate family
rating to B3 from Caa1 and probability of default rating to B3-PD
from Caa1-PD. Concurrently, Moody's affirmed the B3 rating on Gogo
Intermediate Holdings LLC's senior secured notes and maintained
Gogo's speculative grade liquidity rating of SGL-3. The outlook is
stable.
The upgrade follows the company's announcement [1] on April 1st of
plans to refinance its current capital structure through the
issuance of a new $725 million term loan and $100 million revolving
credit facility. Gogo will use the new term loan along with the
proceeds from the sale of its Commercial Aviation (CA) business,
which it sold for $400 million and closed in December, to repay
outstanding balances under its ABL facility as well as all of its
$975 million senior secured notes. At the same time, Gogo has
entered into exchange agreements with holders of around $135
million of its 2022 convertible notes that have agreed to equitize
their holdings early. The resulting reduction in debt quantum and,
in turn, in Moody's expectations of Gogo's leverage, is a key
driver of the rating action.
The following ratings/assessments are affected by the action:
Ratings Upgraded:
Issuer: Gogo Inc.
Corporate Family Rating, Upgraded to B3 from Caa1
Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
Ratings Affirmed:
Issuer: Gogo Intermediate Holdings LLC
Senior Secured Regular Bond/Debenture, Affirmed B3 (LGD3)
Outlook Actions:
Issuer: Gogo Inc.
Outlook, Changed To Stable From Positive
Issuer: Gogo Intermediate Holdings LLC
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Gogo's B3 rating reflects the improvement in the company's business
profile following the sale of its commercial aviation business
which was competitive and volatile as evidenced in 2020 when
commercial air travel was decimated by the coronavirus pandemic.
Gogo's remaining operation, its business aviation segment,
generates the majority of its revenues through a more stable and
predictable subscription model. The proposed refinancing plans will
see Gogo reduce overall debt quantum and improve its available
liquidity sources as well as its cash flow generation ability going
forward.
The B3 rating reflects the reduced scale of the business and the
niche market the company will be operating in. The rating also
reflects the material leverage of the company with debt to EBITDA
(Moody's adjusted) expected around 7.7x in 2021. Leverage should
decline further in H1 2022 as the remaining $103 million of
convertible notes come due in May 2022 and these could potentially
be equitized.
With the sale of the CA business, Gogo's ongoing operations will
focus on business aviation where the company has a leading market
position in the US, with approximately 5,800 ATG business aircraft
online.
In 2021, revenues are expected to increase by mid-teens percentage
point as a large number of aircraft suspended service during the
peak of the COVID pandemic have come back online. Over the next
three years, Gogo believes it can increase its on-line aircraft by
a high single digit percentage CAGR. Given the addressable size of
the market and the increasing need for connectivity, Moody's
believes these assumptions are achievable. With demand for data and
speed increasing, Moody's also believes that Gogo's product mix
will improve as owners upgrade to higher data plans. This should
lead to revenue increasing by low-teens percentage annually in the
coming three years and EBITDA by mid-teens as a result of operating
leverage. By the end of 2022, Moody's expects Gogo's leverage to be
below 6x.
On March 31st, Gogo announced that it had entered into a debt
commitment letter with its banks which had agreed to provide a
7-year $725 million senior secured term loan facility as well as a
five-year revolving credit facility of $100 million.
On April 1st, Gogo announced that it had entered into an exchange
agreement with GTCR pursuant to which GTCR had agreed to exchange
around $105.7 million of Gogo's convertible senior notes for common
equity at a conversion premium of 4% plus remaining unpaid interest
payment on the convertible notes through their May 2022 maturity.
The exchange is expected to complete by mid-April, and
post-equitization GTCR will own around 28.6% of Gogo's shares. In
Q1 2021, Gogo had completed some other convertible note exchanges
leading to a total reduction of around $135 million, leaving around
$103 million of convertible notes outstanding.
The outlook on the ratings is stable and reflects Moody's
expectation that the company's leverage will decrease to below 6x
in 2022 and that the company will maintain adequate liquidity.
As reflected in its SGL-3 speculative grade liquidity rating,
Gogo's liquidity profile is adequate. Following its planned
refinancing, the company will have access to a $100 million
revolving credit facility and Moody's expects it to generate
moderate but positive free cash flow as a result of both
improvement in underlying earnings and lower interest cost. The
$103 million of remaining May 2022 convertibles notes could require
access to the revolver should they not be equitized.
The B3 (LGD3) rating on the senior secured notes reflects the
probability of default of the company, as reflected in the B3-PD
PDR, an average expected recovery rate of 50% at default and the
particular instrument's rankings in the capital structure. Given
the convertible notes come due in the first half of next year,
Moody's has omitted them from Gogo's capital structure for Moody's
Loss Given Default assessment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upwards rating pressure could build up should Gogo demonstrate
steady revenue and earnings growth, meaningful free cash flow
generation as well as a sustained reduction in Moody's adjusted
leverage below 6x.
Downward rating pressure could develop should revenue and EBITDA
fail to grow in line with the company's expectations leading to
leverage remaining above 7x in 2022. Additionally, debt financed
acquisitions and investments which result in a deterioration in
cash flow or overall liquidity position would pressure the
ratings.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
GREENSILL CAPITAL: April 23 Auction of 100% Interest in Finacity
----------------------------------------------------------------
Judge Michael E. Wiles of the U.S. Bankruptcy Court for the
Southern District of New York authorized Greensill Capital Inc.'s
bidding procedures in connection with the sale of its 100%
ownership interests in Finacity Corp. to Adrian Katz, Finacity's
CEO, Dana Katz, and the Katz Family Trust for total consideration
of approximately $24 million, subject to overbid.
The Bid Protections as set forth in the Stalking Horse Purchase
Agreement, and the provisions of the Stalking Horse Purchase
Agreement relating thereto, are approved. The Debtor will pay the
Break-Up Fee to the Stalking Horse Bidder to the extent due and
payable under the Stalking Horse Purchase Agreement.
The Sale Notice is approved. A s soon as reasonably practicable,
but in no event later than the third business day after entry of
this Bidding Procedures Order, the Debtor (or its agent) will serve
the Sale Notice upon the Sale Notice Parties.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: April 20, 2021, at 4:00 p.m. (ET)
b. Initial Bid: Any Baseline Bid must provide for at least
$250,000 of incremental value to the Debtor after taking into
account the payment of the Break-Up Fee and Expense Reimbursement
to the Stalking Horse Purchaser.
c. Deposit: 10% of the proposed purchase price
d. Auction: The Auction is scheduled for 10:00 a.m. (ET) on
April 23, 2021 to be conducted virtually through a Zoom link that
will be made available to Qualified Bidders or at another place and
time designated by the Debtor in a prior written notice emailed
to all Qualified Bidders.
e. Bid Increments: $250,000
f. Sale Hearing: April 27, 2021, at 11:00 a.m. (ET)
g. Sale Objection Deadline: April 26, 2021 at 2:00 p.m. (ET)
h. Closing: April 30, 2021, at 4:00 p.m. (ET)
i. Break-up Fee: $215,000
j. Expense Reimbursement - $75,000
The Debtor is authorized and empowered to take all action necessary
to effectuate the relief granted in the Bidding Procedures Order.
A copy of the Agreement and Bidding Procedures is available at
https://tinyurl.com/5yw77upw from PacerMonitor.com free of charge.
About Greensill Capital
Greensill Capital is an independent financial services firm and
principal investor group based in the United Kingdom and
Australia.
The Company offers structures trade finance, working capital
optimization, specialty financing and contract monetization.
Greensill Capital Pty is the parent company for the Greensill
Group.
Greensill began to unravel in March 2021 when its main insurer
stopped providing credit insurance on US$4.1 billion of debt in
portfolios it had created for clients including Swiss bank Credit
Suisse.
Greensill Capital (UK) Limited and Greensill Capital Management
Company (UK) Limited filed for insolvency in Britain on March 8,
2021. Matthew James Byrnes, Philip Campbell-Wilson and Michael
McCann of Grant Thornton were appointed as administrators.
Greensill Capital Pty Ltd. filed insolvency proceedings in
Australia. Matt Byrnes, Phil Campbell-Wilson, and Michael McCann
of Grant Thornton Australia Ltd, as voluntary administrators in
Australia.
Greensill Capital Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Case No. 21-10561) on March 25, 2021. The petition was
signed by Jill M. Frizzley, director. It listed assets of between
$10 million and $50 million and liabilities of between $50 million
and $100 million. The case is handled by Honorable Judge Michael
E.
Wiles. Togut, Segal & Segal LLP, led by Kyle J. Ortiz, is the
Debtor's counsel.
GREENSILL CAPITAL: Sets Bid Procedures for Interest in Finacity
---------------------------------------------------------------
Greensill Capital Inc. asks the U.S. Bankruptcy Court for the
Southern District of New York to authorize the bidding procedures
in connection with the sale of its 100% ownership interests in
Finacity Corp. to Adrian Katz, Finacity's CEO, Dana Katz, and the
Katz Family Trust ("Katz Parties") for total consideration of
approximately $24 million, subject to overbid.
Finacity is a leader in the structuring and provision of
asset-backed working capital funding solutions, consumer
receivables financing, supplier and payables financing, back-up
servicing, and transaction reporting around the world. As of the
Petition Date, it served as agent on outstanding transactions with
borrowers and obligors in more than 175 countries. Finacity
averages approximately 60 million in accounts receivable items each
year. Its clients range from large-multinational shipping
companies to micro-finance branches in Latin America. While there
is some overlap in the products and services offered by the Company
and Finacity, Finacity operates as a separate business from the
Debtor or the Company.
On June 10, 2019, the Debtor acquired 100% of the outstanding
preferred and common equity interests of Finacity from certain
"Seller Parties" pursuant to a Stock Purchase Agreement, dated June
10, 2019 ("2019 SPA") for a combination of upfront and deferred
cash consideration. The Seller Parties consisted of a consortium
of persons and entities that held 100% of the outstanding shares of
Finacity. Included among the Seller Parties were the Katz Parties.
Prior to the Closing Date, the Katz Parties collectively held
approximately 20.78% of the Finacity Equity.
In connection with the 2019 Acquisition, the Seller Parties other
than the Katz Parties received a cash out payment, and the Katz
Parties received a combination of up-front cash and deferred cash
consideration. This deferred cash consideration included certain
contingent payments to be made by the Debtor, as the purchasing
party under the 2019 SPA, over a period of five calendar years
starting on Jan. 1, 2020 and payable in June of the following year
("Earn-Out Payments"). The Katz Parties are entitled to the full
amount of the Earn-Out Payments each year of $5,304,000 ("Maximum
Earn-Out Payment") if consolidated "Applicable Revenue" for
Finacity exceeds a target threshold of $13.5 million during the
relevant calendar year ("Target"). To the extent that Applicable
Revenue is less than the Target, the Maximum Earn-Out Payment is
reduced by an amount that is equal to twice the proportional
shortfall of the Applicable Revenue relative to the Target.
In both 2019 and 2020, the Applicable Revenue surpassed the Target
for such years. The Debtor paid the 2019 Maximum Earn-Out Payment
to the Katz Parties in June 2020 and owes the 2020 Maximum Earn-Out
Payment to the Katz Parties in June 2021. If Finacity continues to
hit the Target for calendar years 2021 to 2023, the Debtor’s
obligations on account of the Earn-Out Payments will amount to
$21.216 million (including the accrued, earned but unpaid 2020
Earn-Out Payment as described).
In addition, pursuant to guarantees executed in conjunction with
the closing of the 2019 Acquisition, the Debtor's obligation to pay
the Earn-Out Payments is guaranteed by Finacity, as well as by
Greensill Parent. To the extent that the Debtor is not released
from the Earn-Out Payments and the Debtor is unable to satisfy such
liabilities when they come due, the Katz Parties would be able to
seek the remaining payments from Finacity itself—thereby
affecting Finacity's bottom line and reducing the overall value of
the Finacity Equity by a corresponding amount.
Finally, pursuant to his employment agreement with Finacity, Mr.
Katz is entitled to receive compensation as an executive of
Finacity. In general, the Employment Agreement provides for (a) an
annual base salary of $560,000 per year until June 2024, (b) usual
and customary benefits provided on the same terms as similarly
situated employees of Finacity, and (c) certain contingent
compensation in the forms of (i) a "Retention Bonus" of $3,629,000
payable by Finacity to Mr. Katz for each year that Mr. Katz has
worked in good faith to support the application and revocation of
Finacity's receivables monitoring and reporting services across all
relevant financing programs of Finacity and (ii) a performance
bonus of up to $6 million for each of the first five years of Mr.
Katz's employment assuming certain contingencies related to
Finacity's performance are achieved. The Employment Agreement
Obligations are guaranteed by Greensill Parent.
In early 2021, the Company experienced severe financial distress as
a result of a series of factors. The Debtor stated that it was its
intention to pursue a sale of its equity interests in Finacity
pursuant to an orderly sale and marketing process overseen by the
Court.
In furtherance of the Sale Process, on March 26, 2021, the Debtor
engaged GLC Advisors & Co., LLC, as its investment banker ("GLC").
It believes that with the benefit of a robust marketing process
with the assistance of GLC, it will be able to maximize the value
of its key asset and pay a significant portion of general unsecured
and priority claims.
In connection with the Debtor's sale efforts to date, the Debtor
received a bid for the Finacity Equity from the Katz Parties.
After extensive negotiations among the Debtor, the Katz Parties,
Finacity, and their respective advisors, the parties have reached
agreement on the Stalking Horse Purchase Agreement. Pursuant to
the Stalking Horse Purchase Agreement, the Katz Parties will serve
as the initial "stalking horse" bidder for the Finacity Equity,
which will be subject to the auction and marketing process overseen
by the Court pursuant to the proposed Bidding Procedures.
The Katz Parties are in a unique position to provide value to the
Debtor in their capacity as the Stalking Horse Bidder because Mr.
Katz is the founder and current CEO of Finacity. Notably, Mr. Katz
is an insider of Finacity, the Debtor's asset that is being
marketed and sold pursuant to the Sale Process. As an insider of
the asset but not the seller, Mr. Katz is in a particular position
to properly value the Debtor's interest in the Finacity Equity and
set the floor as a Stalking Horse Bidder, but at the same time, has
no conflicts in relation to the Debtor or its officers that would
raise suspicions about the legitimacy or impartiality of the Sale
Process.
The Stalking Horse Purchase Agreement provides for total
consideration of approximately $24 million consisting of: (1) $3
million in cash, which will be paid directly to the Debtor's
estate; and (2) the release of all liabilities stemming from the
Earn-Out Payments, against the Debtor and the guarantors, and of
all other claims held by the Katz Parties against the Debtor,
which, if allowed in their full amounts could aggregate to more
than $21 million in general unsecured claims against the Debtor's
estate.
Significantly, the Debtor's potential liability on account of the
Earn-Out Payments is larger than its estimated general unsecured
claims pool ($21.126 million -- which includes the Maximum Earn-Out
Payment payable in June 2021 and amounts due if Mr. Katz becomes
entitled to the Maximum Earn-Out Payments for the next three years
-- versus approximately $5 to $7 million in general unsecured
claims, excluding intercompany claims). The transaction
contemplated by the Stalking Horse Purchase Agreement is therefore
also beneficial in that it serves to simplify and resolve potential
unsecured claims against the Debtor. If the claims on account of
the Earn-Out Payments were allowed against the Debtor in the
amounts asserted by Mr. Katz, the resulting dilution to the general
unsecured claims would likely reduce creditor recoveries
significantly.
In order to incentivize the Stalking Horse Bidder to serve as the
initial floor bid for the Sale Process, the Stalking Horse Purchase
Agreement provides for a break-up fee of $500,000 (i.e.,
approximately 2% of the total consideration) in the event that the
Finacity Equity is sold to a party other than the Stalking Horse
Bidder and an expense reimbursement not to exceed $100,000.
Importantly, the Break-Up Fee is only payable by the Debtor if the
Debtor consummates a sale of the Finacity Equity to a third party
other than the Stalking Horse Bidder and under no other
circumstances (e.g., the breach or termination of the Stalking
Horse Purchase Agreement by the Debtor or the exercise of a
"fiduciary out").
The Debtor proposes to conduct the Sale and Auction on the
following timeline:
a. April 20, 2021, at 4:00 p.m. (ET) - Bid Deadline
b. April 22, 2021, at 2:00 p.m. (ET) - Deadline for the Debtor
to notify bidders of their status as Qualified Bidders
c. April 23, 2021, at 10:00 a.m. (ET) - Auction (to be held
virtually)
d. April 26, 2021, at 2:00 p.m. (ET) - Sale Objection Deadline
e. April 27, 2021, at 10:00 a.m. (ET) - Sale Hearing
f. April 30, 2021, at 4:00 p.m. (ET) - Sale Closing
The Bidding Procedures are intended to provide for a fair, timely
and competitive sale process consistent with the timeline of this
Chapter 11 Case. If approved, they will enable the Debtor to
identify bids from potential buyers that would constitute the best
and highest offer for the Finacity Equity.
The salient terms of the Bidding Procedures are:
a. Initial Bid: Any Baseline Bid must provide for at least
$250,000 of incremental value to the Debtor after taking into
account the payment of the Break-Up Fee and Expense Reimbursement
to the Stalking Horse Purchaser.
b. Deposit: 10% of the proposed purchase price
d. Auction: If more than one Qualified Bid is received by the
Bid Deadline, the Debtor will conduct the Auction. The Auction
will take place at 10:00 a.m. (ET) on April 23, 2021 (such date, or
such other date as the Debtor may notify Qualified Bidders who have
submitted Qualified Bids and counsel for any Committee) and be held
virtually pursuant to a Zoom link to be provided to
Qualified Bidders prior to the start of the Auction.
e. In the event the Stalking Horse Bid is the only Qualified
Bid received by the Debtor by the Bid Deadline, no Auction will be
conducted, and Stalking Horse Bidder will be the Successful Bidder.
At the Sale Hearing, the Debtor will present the Successful Bid to
the Bankruptcy Court for approval. Following the entry of the Sale
Order, the Debtor will proceed to close the Sale Transaction upon
the satisfaction or waiver of all applicable conditions precedent
to closing.
The Debtor asks approval of the Sale Notice. Within three days of
the entry of the Bidding Procedures Order, the Debtor will serve
the Sale Notice on the Sale Notice Parties. In addition, the
Debtor will also post the Sale Notice and the Bidding Procedures
Order on its case website (https://cases.stretto.com/greensill) by
no later than two days after the entry of the Bidding Procedures
Order.
The sale will be free and clear of all liens, claims, interests and
encumbrances. Based on its review of its books and records and
research on public records, the Debtor believes that the only party
with an interest in the Finacity Equity is the DIP Facility. The
Cash Component provides more than enough cash consideration to
repay the DIP Facility in full in cash. To the extent there are
any other creditors with alleged security interests in, or liens
on, the Finacity Equity, the Debtor believes that the notice
procedures described herein and approved by the Bidding Procedures
Order provide such parties with ample notice and an opportunity to
object.
The Bidding Procedures facilitate an orderly, value-maximizing
Auction, thereby optimizing recoveries for all parties in interest.
Accordingly, the Debtor asks the Court to grant the relief
sought.
Finally, the Debtor asks that any order approving the Motion (or
authorizing a transaction to sell the Finacity Equity) be effective
immediately, thereby waiving the 14-day stays imposed by Bankruptcy
Rule 6004. These waivers or eliminations of the 14-day stays are
necessary for the Sale to close and the funding to be received as
expeditiously as possible.
A copy of the APA and Bidding Procedures is available at
https://tinyurl.com/c3hwj76z from PacerMonitor.com free of charge.
About Greensill Capital
Greensill Capital is an independent financial services firm and
principal investor group based in the United Kingdom and
Australia.
The Company offers structures trade finance, working capital
optimization, specialty financing and contract monetization.
Greensill Capital Pty is the parent company for the Greensill
Group.
Greensill began to unravel in March 2021 when its main insurer
stopped providing credit insurance on US$4.1 billion of debt in
portfolios it had created for clients including Swiss bank Credit
Suisse.
Greensill Capital (UK) Limited and Greensill Capital Management
Company (UK) Limited filed for insolvency in Britain on March 8,
2021. Matthew James Byrnes, Philip Campbell-Wilson and Michael
McCann of Grant Thornton were appointed as administrators.
Greensill Capital Pty Ltd. filed insolvency proceedings in
Australia. Matt Byrnes, Phil Campbell-Wilson, and Michael McCann
of Grant Thornton Australia Ltd, as voluntary administrators in
Australia.
Greensill Capital Inc. filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Case No. 21-10561) on March 25, 2021. The petition was
signed by Jill M. Frizzley, director. It listed assets of between
$10 million and $50 million and liabilities of between $50 million
and $100 million. The case is handled by Honorable Judge Michael
E.
Wiles. Togut, Segal & Segal LLP, led by Kyle J. Ortiz, is the
Debtor's counsel.
GROM SOCIAL: To Acquire Content Creator Curiosity Ink Media
-----------------------------------------------------------
Grom Social Enterprises, Inc. has entered into a binding letter of
intent to acquire kids and family entertainment company, Curiosity
Ink Media, LLC - a producer and developer of original kid-friendly
content –- to complement the Company's existing offerings of
brand-safe social media for kids, animation production and web
filtering for schools, government agencies and private businesses.
Additionally, Grom appointed two former Nickelodeon executives –-
Curiosity's President Russell Hicks and Paul Ward -- to lead the
Company's animation, social media and educational divisions. An
emerging platform and content provider of entertainment for kids
under 13 years old, the Company's subsidiary, Grom Social, Inc.,
provides a secure social media venue for kids that is monitored
around the clock and invites parents and guardians to play an
active role in a child's social media activities. The
announcements were made by Darren Marks, Grom's Chairman and chief
executive officer.
The Company believes that the addition of Curiosity would enable
Grom to explore original programming, including serving as an
original content pipeline for Subscription Video On Demand (SVOD)
services and others looking to fortify their content offerings with
kid and family-friendly programming. Additionally, the Company
anticipates that the acquisition would unlock the potential for
Grom to create cross-platform synergies whereby Curiosity's content
can debut on Grom Social, gain user feedback and help inform series
development.
"We expect that the acquisition of Curiosity will strengthen our
foothold in original content production and allow us to explore
synergies across our animation, social media and educational
services while fortifying our mission to serve kids and families in
a variety of ways," said Marks. "We believe the arrival of Russell
and Paul to drive Grom's portfolio, along with the addition of
Curiosity Ink Media, will be a watershed moment for us. We are
energized and elated by the possible opportunities the addition of
Russell, Paul and Curiosity Ink Media represent."
As Chief Content Officer of Grom, Hicks will continue to oversee
Curiosity Ink Media's original film, television and publishing
projects, in addition to his new role as president of Grom's
subsidiary, Top Draw Animation, Inc. Top Draw boasts a 22-year
history as an animation producer of several series including Tom &
Jerry, The Hollow, Monster Beach and Penn Zero, among others.
Hicks will join Top Draw's Chief Executive Officer and founder,
Wayne Dearing, and the studio's Executive Senior Vice President,
Stella Dearing, in combining original animation with the company's
legacy role as a producer of animated content.
Ward will assume two roles for Grom. In the newly-created position
of President of Grom Social, Ward is charged with building on the
success of Grom's emerging COPPA-compliant social media platform,
which is designed to engage kids while educating users about the
importance of Internet safety. As Executive Vice President, Social
Enterprises, Ward will spearhead the evolution of the Company's
subsidiary, Grom Educational Services, Inc., a provider of
web-filtering services used in education, government and private
businesses.
The Company anticipates that, together, Hicks and Ward will
identify and champion synergistic opportunities across Grom's
portfolio. Both veterans of kids' and family entertainment, Hicks
and Ward served as executives with Nickelodeon and Nick at Nite
during the combined network's historic, uninterrupted 13-year run
as the number one network in ad-supported cable television.
Prior to the formation of Curiosity, Hicks was president of
Production and Development at Nickelodeon, where he was
instrumental in cultivating several blockbuster hits including
SpongeBob SquarePants, Henry Danger, The Loud House and the revival
of the Teenage Mutant Ninja Turtles. Earlier in his career, while
an executive at Warner Bros., Hicks played major roles in the
development of Teddy Ruxpin and the revival of the time-tested and
beloved animated series, Scooby-Doo.
Ward, whose 23-year tenure with Viacom was capped by his role as
Nickelodeon Kids' & Family Group's executive vice president of
Primetime, Acquisitions and Strategy, where he led Nick at Nite's
foray into original programming and was instrumental in securing
top series including Friends, George Lopez and The Nanny to round
out the company's roster of hit programming. As a member of the TV
Land Executive Team, he was instrumental in championing numerous
attention-grabbing promotions including the TV Land Landmarks
initiative, which placed bronze statues of iconic TV characters in
cities that served as their backdrops including a Mary Tyler Moore
statue in Minneapolis and one of Andy Griffith in Raleigh, NC,
among others. Ward also helped develop the Nick at Nite & TV Land
Family Table, a multi-year pro-social campaign designed to promote
the social and academic benefits of families who take time to sit
down and eat together, an initiative he undertook with Columbia
University's CASA (Center on Addiction and Substance Abuse).
About Grom Social
Grom -- http://www.gromsocial.com-- is a media, technology and
entertainment company that focuses on delivering content to
children under the age of 13 years in a safe secure Children's
Online Privacy Protection Act compliant platform that can be
monitored by parents or guardians. The Company operates its
business through the following four wholly-owned subsidiaries: (1)
Grom Social, Inc. was incorporated in the State of Florida on March
5, 2012 and operates its social media network designed for children
under the age of 13 years; (2) TD Holdings Limited operates through
its two subsidiary companies: (i) Top Draw Animation Hong Kong
Limited, a Hong Kong corporation and (ii) Top Draw Animation, Inc.,
a Philippines corporation. The group's principal activities are
the production of animated films and televisions series; (3) Grom
Educational Services, Inc. operates its web filtering services
provided to schools and government agencies; and (4) Grom
Nutritional Services, Inc. intends to market and distribute
nutritional supplements to children. GNS has not generated any
revenue since its inception.
Grom Social reported a net loss of $4.59 million for the year ended
Dec. 31, 2019, compared to a net loss of $4.88 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2020, the Company had $17.80
million in total assets, $8.44 million in total liabilities, and
$9.36 million in total stockholders' equity.
BF Borgers CPA PC, in Lakewood, CO, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
June 30, 2019, citing that the Company has incurred significant
operating losses since inception and has a working capital deficit
which raises substantial doubt about its ability to continue as a
going concern.
GUDORF SUPPLY: Seeks to Hire Richey Mills as Financial Advisor
--------------------------------------------------------------
Gudorf Supply Company, Inc. seeks approval from the U.S. Bankruptcy
Court for the Southern District of Indiana to hire Richey, Mills &
Associates, LLP as its financial advisor.
The firm will render these services:
(a) compile and present financial, tax, operational and
corporate historical information to support analysis of the best
mechanism for sale of the Debtor;
(b) develop the marketplace for the sale and identify
potential buyers;
(c) assist the Debtor in advertising, conducting and closing a
sale;
(d) perform other financial advisory services in connection
with the Debtor's Chapter 11 case.
The hourly rates of Richey, Mills & Associates' professionals are
as follows:
Kenneth K. Wolff $350
Stan Mills $250
Daniel D. Bowser $250
Mike Cobb $175
David Sullivan $150
Sandy Clidence $140
Taisha Haywood $100
Amanda Martin $100
As disclosed in court filings, Richey, Mills & Associates neither
represents nor holds any interest adverse to the matters upon which
the firm is to be employed.
Richey, Mills & Associates can be reached at:
Stan Mills
Richey, Mills & Associates, LLP
3815 River Crossing Pkwy. Suite 170
Indianapolis, IN 46240
Telephone: (317) 713-7540/(317) 713-7546
Facsimile: (317) 713-7541
Email: smills@rmaadvisors.com
About Gudorf Supply Company
Gudorf Supply Company, Inc., a residential heating and air service
company in Jasper, Ind., filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No.
21-70158) on March 10, 2021. Gudorf President Michael Gudorf
signed the petition. At the time of the filing, the Debtor was
estimated to have assets of less than $50,000 and liabilities of $1
million to $10 million.
KC Cohen, Lawyer PC and Richey, Mills & Associates, LLP serve as
the Debtor's legal counsel and financial advisor, respectively.
H&S EXPRESS: Court Approves Disclosure Statement
------------------------------------------------
Judge Gregory L. Taddonio has entered an order approving the
Disclosure Statement of H&S Express, Inc.
On or before May 7, 2021, all ballots accepting or rejecting the
Plan shall be served on the attorney for the plan proponent.
Counsel for the plan proponent will file a summary of the balloting
no later than May 20, 2021.
On or before May 14, 2021, all objections to the Disclosure
Statement and/or objections to Plan confirmation will be filed and
served.
On May 27, 2021, at 11:00 a.m., the final hearing on the Disclosure
Statement and Plan confirmation is scheduled in Zoom.
About H&S Express
H&S Express, Inc., a Fairbank, Pa.-based freight shipping trucking
company, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D. Pa. Case No. 20-22811) on Sept. 29, 2020. The petition
was signed by Kevin L. Hlatky, the company's president. At the
time of the filing, the Debtor estimated assets of between $500,001
and $1 million and liabilities of the same range. Bononi &
Company, P.C., is the Debtor's legal counsel.
H. EDWARD PARIS DDS: Case Summary & 6 Unsecured Creditors
---------------------------------------------------------
Debtor: H. Edward Paris, DDS, P.C.
1821 Whittlesey Road, Suite 100
Columbus, GA 31904-9263
Business Description: H. Edward Paris, DDS is an endodontics
practitioner in Columbus, GA.
Chapter 11 Petition Date: April 8, 2021
Court: United States Bankruptcy Court
Middle District of Georgia
Case No.: 21-40150
Debtor's Counsel: Fife M Whiteside, Esq.
FIFE M. WHITESIDE PC
1124 Lockwood Ave
Columbus, GA 31906-2416
Tel: 706-320-1215
Fax: 706-320-1217
E-mail: whitesidef@mindspring.com
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by H. Edward Paris, authorized
representative.
A copy of the petition containing, among other items, a list of the
Debtor's six unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/TEJGZJY/H_Edward_Paris_DDS_PC__gambke-21-40150__0001.0.pdf?mcid=tGE4TAMA
HANKEY O'ROURKE: Unsecured Creditors to Get At Least $3K in Plan
----------------------------------------------------------------
Hankey O'Rourke Enterprises filed a Third Amended Disclosure
Statement.
During the case, the Debtor has sought financing from several local
lenders which, if successful, would be sufficient to pay the Class
1 claim in full, and provide at least some reduction of the Class
Two claim. While these efforts have not been successful to date,
one of the potential lenders has indicated that once Cove Bowling
resumed operations (which it has), and once the Debtor has emerged
from bankruptcy, it remains willing to consider a loan to refinance
the debt. If the Debtor does not sell the Property, there is a
pending request to lease approximately 4,900 square feet at $4,000
per month on a "triple net" basis.
The Plan treats claims as follows:
* Class One: Claim of IOFUS-FCC Holdings I, LLC ("IOFUS"): the
Petition Date, the Debtor believes that IOFUS was owed
approximately $896,692.04. The creditor will retain its mortgage
and collateral assignment of rents on the Debtor's Property.
Pursuant to a motion filed by the Debtor, in November it commenced
making adequate protection payments which are currently in the
amount of $8,100.00 per month. Commencing in January the Debtor
anticipates increasing the monthly payment to $8,100. These
payments will continue through the sale of the Property, or through
confirmation, and will continue through August 31, 2021. If the
loan remains outstanding at that time, IOFUS may exercise its
remedies to foreclose its mortgage. Class 1 is impaired.
* Class Two: United States Small Business Administration
("SBA"): The SBA holds a second mortgage and collateral assignment
of leases and rents on the Property, and a first priority "blanket"
security interest in the assets of Cove Bowling and Entertainment,
Inc. At the Petition Date, the Debtor believes that the SBA was
owed approximately $743,880. The creditor will retain its mortgage
and collateral assignment of rents on the Debtor's Property.
Pursuant to a motion filed by the Debtor, in November it commenced
making adequate protection payments which are currently in the
amount of $500 per month. Those payments will continue through
Aug. 31, 2021. Upon a sale of the Property, the, and after payment
of administrative claims allowable under 11 U.S.C. Sec. 506(c), and
costs of sale, and after payment of IOFUS' Class One claim. Class 2
is impaired.
* Class Three: United States Small Business Administration
("SBA"): On Aug. 3, 2020 received approval from this Court to
obtain an Economic Injury Disaster Loan from the United States
Small Business Administration, in the principal amount of $37,400.
The loan is secured by a security interest in the Debtor's personal
property. Under the terms of the loan, no payments are due until
August 2021, and payments then would be in the amount of $183.00
per month.
* Class Four: Unsecured Claims: As of this time, there is only
one general unsecured claim, in the amount of $775. This class may
also include an unsecured deficiency claim of the Class Two
creditor; the value of its unsecured deficiency claim is estimated
to be $150,000. If proceeds from the sale of the Property are
sufficient to pay the Class One and Two claims in full, the
remaining proceeds will be distributed pro-rata to holders of Class
Three and Class Four claims. Otherwise, from the funds being
contributed by Ms. O'Rourke and Mr. Hankey, $3,000 will be
allocated for unsecured claims and distributed pro rata amongst the
holders of allowed Class Three and Four Claims. Class 4 is
impaired.
Class Six: Membership Interests: Class Six consists of the Debtor's
members, Juanita O'Rourke and Thomas Hankey. The holders of the
Class Six interests will retain their interests by contribution of
new value in the sum of $25,000, which will be used to pay allowed
administrative claims and non-insider unsecured Class Three and
Class Four Claims. Class 6 is impaired.
The Debtor has received a letter of intent from a third party
solicited by the broker. The amount to be paid is likely to be
sufficient to pay administrative and secured claims in full. The
Debtor is in the process of negotiating various terms but expects
to file a motion for approval of the sale shortly.
Debtor's counsel:
Steven Weiss, Esquire
Shatz, Schwartz and Fentin, PC
1441 Main Street, Suite 1100
Springfield, MA 01103
Tel: (413) 737-1131
E-mail: sweiss@ssfpc.com
A copy of the Disclosure Statement is available at
https://bit.ly/3rXqvXS from PacerMonitor.com.
About Hankey O'Rourke
Hankey O'Rourke Enterprises LLC, a privately held company in Great
Barrington, Mass., filed a voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. D. Mass. Case No. 19-30500) on June 21,
2019. In the petition signed by Juanita O'Rourke, manager, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities. The case is assigned to Judge Elizabeth D.
Katz. Shatz, Schwartz & Fentin, P.C. is the Debtor's counsel.
HAWAIIAN HOLDINGS: S&P Alters Outlook to Pos., Affirms 'CCC+' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its ratings outlook to positive from
negative and affirmed its 'CCC+' issuer credit rating on Hawaiian
Holdings Inc. (parent of Hawaiian Airlines). S&P also revised its
liquidity assessment to adequate from less than adequate.
S&P said, "At the same time, we also lowered our rating on the
company's Class A enhanced equipment trust certificates (EETCs) to
'B-' from 'B'.
"The positive outlook indicates that we could raise our ratings on
Hawaiian if we see sustained improvements in traffic resulting in
funds from operations (FFO) to debt improving to at least the
mid-single-digit-percent area in 2022 and further in 2023, with the
company also continuing to maintain adequate liquidity.
"After a very weak 2020 and early 2021, we expect Hawaiian's
performance to begin benefiting from a rebound in domestic leisure
traffic in the second half of the year. In 2020, in addition to the
overall impact of the steep decline in global air traffic stemming
from the coronavirus, Hawaiian also faced unique challenges given
its focus on the Hawaii market. From March to October 2020, all
incoming visitors to Hawaii were subject to a government-imposed
14-day quarantine, which deterred visitors to the state. Beginning
in October 2020, Hawaii started accepting negative COVID-19 test
results as an alternative to quarantine, which resulted in a
gradual increase in bookings for Hawaiian.
"However, the resurgence of COVID-19 cases in the fourth quarter of
2020 and into the beginning of 2021 pushed out our expectations for
a recovery in U.S. airline passenger traffic. Yet, there have been
positive booking and travel trends to Hawaii over the last few
weeks. According to government reports, on March 31, 2021, total
passengers to Hawaii (excluding inter-island travel) were at a
level just below 70% of 2019 levels, a significant increase from
about 30% of 2019 levels on Feb. 1, 2021. We anticipate a surge in
domestic leisure traffic in the second half of 2021 once the U.S.
achieves widespread vaccinations and passenger confidence
improves.
"That said, we believe it will take longer for the volume of
international traffic to begin to recover. The company's
international exposure includes Japan, South Korea, Australia, and
New Zealand, which all have strict travel and quarantine
restrictions; therefore, we expect demand to remain weak at least
through much of 2021. As of now, we also expect inter-island travel
demand to remain relatively weak in 2021, hindered by the
requirement for pretravel testing or mandatory quarantine on these
short trips, unless quarantine restrictions are lifted as
vaccinations become more widespread.
"We continue to view Hawaiian's position as relatively vulnerable,
as a potential increase in COVID-19 cases could quickly result in
stricter travel procedures and/or quarantine requirements in the
state, thus affecting demand again.
"The company has greatly improved its liquidity, which we now
assess as adequate. In February 2021, the company raised $1.2
billion in senior secured notes backed by its loyalty program and
brand. Additionally, the second and third rounds of federal payroll
support should provide Hawaiian with about $300 million of cash
grants and unsecured loans. These transactions have resulted in pro
forma liquidity of over $2 billion and this eases our previous view
that the company may be unable to face near-term risks and demand
volatility. The company's liquidity position is also supported by
modest capital spending requirements and debt repayment obligations
in 2021.
"Hawaiian's credit measures will likely remain very weak this year,
then improve in 2022. We believe the company will likely report a
sizable, albeit reduced, loss in 2021 before approaching breakeven
in 2022 as the recovery in air traffic continues. Cash grants from
the second and third rounds of the federal payroll support programs
should help partly cover Hawaiian's labor expenses through much of
2021. We forecast negative FFO to debt in 2021, improving to the
mid-single-digit-percent area in 2022.
"We are lowering our ratings on Hawaiian's 2013-1 Class A EETCs. In
our review of Hawaiian's EETCs, we focus primarily on current
market values, given the wide gaps between base and current market
values for the A330-200s that collateralize its EETCs. For the
2013-1 Class A tranche, the loan to value (as measured by appraised
current market values) has weakened further since our last review
and is now above 100%. Therefore, we lowered our affirmation credit
by one notch because we believe an attempt to restructure the EETCs
in a hypothetical bankruptcy scenario is increasingly plausible,
given the certificates' high loan to value.
"The positive outlook reflects Hawaiian's significantly improved
liquidity position and our expectation that the company's
performance will improve gradually in the second half of 2021 and
into 2022. We expect credit metrics to remain weak in 2021, with
FFO to debt remaining negative, then increasing to the
mid-single-digit-percent area in 2022."
S&P could revise its outlook to stable or negative over the next
year if it comes to believe the recovery will be more prolonged
than we currently expect, leading to continued high cash burn and
eroding Hawaiian's current liquidity cushion. This could occur if:
-- Progress on mitigating the effect of COVID-19 on air travel
demand through vaccinations, testing, and other measures is
materially weaker or slower than we expect; and/or
-- Hawaii reintroduces stricter travel or quarantine
requirements.
S&P could raise its rating on Hawaiian over the next year if:
-- S&P sees sustained improvement in traffic resulting in FFO to
debt improving to more than the mid-single-digit-percent area in
2022 with expectations of further improvement going forward; and
-- S&P continue to assess Hawaiian's liquidity as adequate.
HERTZ CORPORATION: Willkie, Young 3rd Update on Noteholder Group
----------------------------------------------------------------
In the Chapter 11 cases of The Hertz Corporation, et al., the law
firms of Willkie Farr & Gallagher LLP and Young Conaway Stargatt &
Taylor, LLP submitted a third amended verified statement under Rule
2019 of the Federal Rules of Bankruptcy Procedure, to disclose an
updated list of Ad Hoc Noteholder Group that they are
representing.
The Ad Hoc Noteholder Group issued under the following indentures:
(a) that certain Indenture, dated as of October 16, 2012, relating
to the 6.25% Senior Notes due 2022; (b) that certain Indenture,
dated as of October 16, 2012, relating to the 5.50% Senior Notes
due 2024; (c) that certain Indenture, dated as of August 1, 2019,
relating to the 7.125% Senior Notes due 2026; and (d) that certain
Indenture, dated as of November 25, 2019, relating to the 6.0%
Senior Notes due 2028.
As of April 3, 2021, members of the Ad Hoc Noteholder Group and
their disclosable economic interests are:
400 Capital Management
510 Madison Ave,
New York, NY 10022
* Senior Notes: $8,000,000
683 Capital Management
3 Columbus Circle, Suite 2205
New York, NY 10019
* Senior Notes: $4,505,000
Aegon Asset Management
227 W Monroe, Suite 6000
Chicago, IL 60606
* Senior Notes: $5,217,000
Bank of America
One Bryant Park
New York, NY 10036
* Senior Notes: $36,984,000
Brean Asset Management, LLC
3 Times Square, 14th Floor
New York, NY 10036
* Senior Notes: $7,000,000
Canso Investment Counsel Ltd.
100 York Blvd
Richmond Hill, ON L4B 1J8
Canada
* Senior Notes: $398,956,000
Capital Ventures International
c/o Susquehanna Advisors Group, Inc.
401 East City Avenue, Suite 220
Bala Cynwyd, PA 19004
* Senior Notes: $20,000,000
Carronade Capital Management, LP
17 Old Kings Highway South, Suite 140
Darien, CT 06820
* Senior Notes: $8,000,000
CarVal Investors
1601 Utica Avenue South, Suite 100
Minneapolis, MN 55416
* Senior Notes: $58,743,000
Cetus Capital, LLC
8 Sound Shore Dr.
Greenwich, CT 06830
* Senior Notes: $4,000,000
CVC Credit Partners
712 Fifth Avenue, 42nd Floor
New York, NY 10019
* Senior Notes: $15,000,000
D.E. Shaw Galvanic Portfolios, L.L.C.
1166 Avenue of the Americas, 9th Floor
New York, NY 10036
* Senior Notes: $182,359,000
Deutsche Bank Securities Inc.
60 Wall Street
New York, NY 10005
* Senior Notes: $22,739,000
Diameter Capital Partners LP
24 W. 40th Street, 5th Floor
New York, NY 10018
* Senior Notes: $53,000,000
Eaton Vance Management
Two International Place
Boston, MA 02110
* Senior Notes: $34,303,000
Farmstead Capital
7 North Broad Street, 3rd Floor
Ridgewood, NJ 07450
* Senior Notes: $38,600,000
Fidelity Management & Research Company
245 Summer Street
Boston, MA 02210
* Senior Notes: $268,728,000
JP Morgan Investment Management Inc.
1 E. Ohio St., 6th Floor
Indianapolis, IN 46204
* Senior Notes: $339,321,000
J.P. Morgan Securities LLC
383 Madison Ave
New York, NY 10017
* Senior Notes: $21,442,000
King Street Capital Management, L.P.
299 Park Avenue, 40th Floor
New York, NY 10171
* Senior Notes: $79,159,000
Livello Capital Management LP
1 World Trade Center, 85th Floor
New York, NY 10007
* Senior Notes: $5,000,000
Lord, Abbett & Co. LLC
90 Hudson Street
Jersey City, NJ 07302-3973
* Senior Notes: $85,515,000
Marathon Asset Management LP
One Bryant Park, 38th Floor
New York, NY 10036
* Senior Notes: $161,141,000
Millennium Management LLC
666 Fifth Avenue, 8th Floor
New York, NY 10103
* Senior Notes: $18,000,000
Moore Capital Management LP
11 Times Square
New York, NY 10036
* Senior Notes: $6,000,000
Morgan Stanley & Co., LLC
158 Broadway, 2nd Floor
New York, NY 10036
* Senior Notes: $33,559,000
Napier Park Global Capital
280 Park Ave, 3rd Floor
New York, NY 10017
* Senior Notes: $10,000,000
Nomura Corporate Research and
Asset Management Inc.
309 W. 49th St.
New York, NY 10019
* Senior Notes: $58,819,000
One Fin Capital Management LP
One Letterman Drive
Building C, Suite C3-400
San Francisco, CA 94129
* Senior Notes: $10,000,000
P. Schoenfeld Asset Management LP
1350 6th Ave, 21st Floor
New York, NY 10019
* Senior Notes: $98,464,000
Paloma Partners Management Company
Two American Lane
Greenwich, CT 06831
* Senior Notes: $36,147,000
Pentwater Capital Management
1001 10th Ave South, Suite 216
Naples, FL 34102
* Senior Notes: $179,486,000
Warlander Asset Management, LP
250 West 55th Street
New York, NY 10019
* Senior Notes: $9,142,000
Wexford Advisors
777 South Flagler Drive, Suite 602
East West Palm Beach, FL 33401
* 2024 Notes: $15,040,000
White Box Advisors
3033 Excelsior Blvd
Minneapolis, MN 55416
* Senior Notes: $6,541,000
Counsel to the Ad Hoc Ad Hoc Noteholder Group can be reached at:
WILLKIE FARR & GALLAGHER LLP
Rachel C. Strickland, Esq.
Daniel I. Forman, Esq.
Agustina G. Berro, Esq.
787 Seventh Avenue
New York, NY 10019
Telephone: (212) 728-8000
Facsimile: (212) 728-8111
Email: rstrickland@willkie.com
dforman@willkie.com
aberro@willkie.com
- and -
YOUNG CONAWAY STARGATT & TAYLOR LLP
Edmon L. Morton, Esq.
Matthew B. Lunn, Esq.
Joseph M. Mulvihill, Esq.
Rodney Square
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
Email: emorton@ycst.com
mlunn@ycst.com
jmulvihill@ycst.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3dPRdMV and https://bit.ly/322PJtg
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.
HIGHPOINT RESOURCES: Hires AlixPartners as Financial Advisor
------------------------------------------------------------
HighPoint Resources Corporation and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Delaware to hire
AlixPartners, LLP as their financial advisor.
The firm will render these services:
-- develop the Debtors' rolling 13-week cash receipts and
disbursements forecasting tool designed to provide on-time
information related to their liquidity;
-- assist the Debtors in developing and implementing cash
management strategies, tactics and processes;
-- assist the Debtors in developing their revised business plan
and such other related forecasts as may be required by the bank
lenders or Debtors for other corporate purposes;
-- assist the Debtors in the design and implementation of a
restructuring strategy to maximize enterprise value, taking into
account the unique interests of all constituencies;
-- assist the Debtors with their communications, diligence or
negotiations with outside parties including stakeholders, banks and
potential acquirers of the Debtors' assets;
-- assist the Debtors to obtain covenant relief from their bank
lenders and other creditors;
-- assist the Debtors to develop contingency plans and financial
alternatives in the event an out-of-court restructuring cannot be
achieved;
-- coordinate and provide administrative support for the
proceeding, and assist in developing the Debtors' plan of
reorganization or other appropriate case resolution, if necessary;
-- assist in the preparation of reports required by the
bankruptcy court as well as providing assistance in such areas as
testimony before the court on matters that are within AlixPartners'
areas of expertise, if necessary;
-- assist in the implementation of bankruptcy court orders;
-- manage the claims and claims reconciliation processes if
necessary; and
-- assist the Debtors with such other matters as may be requested
that fall within AlixPartners' expertise and that are mutually
agreeable.
AlixPartners' standard hourly rates for 2021 are:
Managing Director $1,030 – $1,295
Director $825 – $980
Senior Vice President $665 – $755
Vice President $485 – $650
Consultant $180 – $480
Paraprofessional $305 – $325
AlixPartners received a retainer in the amount of $200,000 from the
Debtors.
Stephen Spitzer, managing director at AlixPartners, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
AlixPartners can be reached at:
Stephen Spitzer
AlixPartners, LLP
909 Third Avenue, 30th Floor
New York, NY 10022
Office: (212) 490-2500/(212) 845-4009
Mobile: (347) 366-0966
Fax: (212) 490-1344
Email: sspitzer@alixpartners.com
About HighPoint Resources
HighPoint Resources Corporation (NYSE: HPR) is a Denver,
Colo.-based company focused on the development of oil and natural
gas assets located in the Denver-Julesburg Basin of Colorado.
Additional information about HighPoint may be found on its website
at http://www.hpres.com/
On March 14, 2021, HighPoint and two affiliated companies filed
petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 21-10565) to seek confirmation of a prepackaged plan
that would provide for a merger with Bonanza Creek Energy, Inc. In
the petition, HighPoint disclosed assets of between $500 million
and $1 billion and liabilities of the same range.
Judge Christopher S. Sontchi oversees the cases.
The Debtors tapped Kirkland & Ellis and Klehr Harrison Harvey
Branzburg LLP as legal counsel, AlixPartners LLP as financial
advisor, and Perella Weinberg Partners LP as investment banker.
Epiq Corporate Restructuring is the claims agent and administrative
advisor.
Evercore and Vinson & Elkins, LLP serve as legal advisors to
Bonanza Creek.
Akin Gump, LLP serves as legal advisor to an informal group of
HighPoint noteholders that signed the TSA.
HIGHPOINT RESOURCES: Hires Kirkland & Ellis as Legal Counsel
------------------------------------------------------------
HighPoint Resources Corporation and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Delaware to hire
Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as
their attorneys.
The firms will render these services:
(a) advise the Debtors regarding their powers and duties in
the continued management and operation of their businesses and
properties;
(b) advise and consult the conduct of the Debtors' Chapter 11
cases;
(c) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(d) take all necessary actions to protect and preserve the
Debtors' estates;
(e) prepare pleadings;
(f) represent the Debtors in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
(g) advise the Debtors in connection with any potential sale
of assets;
(h) appear before the court and any appellate courts;
(i) advise the Debtors regarding tax matters;
(j) take any necessary action to negotiate, prepare and obtain
approval of a disclosure statement and confirmation of a Chapter 11
plan and all documents related thereto; and
(k) perform all other necessary legal services for the Debtors
in connection with the prosecution of the cases.
The hourly rates of the firms' attorneys and staff are as follows:
Partners $1,080 - $1,895
Of Counsel $625 - $1,845
Associates $625 - $1,195
Paraprofessionals $255 - $475
In addition, the firms will be reimbursed for out-of-pocket
expenses incurred.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases ,
Kirkland & Ellis disclosed that:
-- the firms have not agreed to any variations from, or
alternatives to, their standard or customary billing arrangements
for this engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
cases;
-- Kirkland & Ellis' current hourly rates are:
Partners $1,080 - $1,895
Of Counsel $625 - $1,845
Associates $625 - $1,195
Paraprofessionals $255 - $475; and
-- the firms have approved the budget and staffing plan for
the period from March 14 to April 13, 2021.
Joshua Sussberg, Esq., disclosed in a court filing that the firms
are "disinterested persons" within the meaning of Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Joshua Sussberg, Esq.
Kirkland & Ellis LLP
Kirkland & Ellis International, LLP
601 Lexington Avenue
New York, NY 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
Email: joshua.sussberg@kirkland.com
About HighPoint Resources
HighPoint Resources Corporation (NYSE: HPR) is a Denver,
Colo.-based company focused on the development of oil and natural
gas assets located in the Denver-Julesburg Basin of Colorado.
Additional information about HighPoint may be found on its website
at http://www.hpres.com/
On March 14, 2021, HighPoint and two affiliated companies filed
petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 21-10565) to seek confirmation of a prepackaged plan
that would provide for a merger with Bonanza Creek Energy, Inc. In
the petition, HighPoint disclosed assets of between $500 million
and $1 billion and liabilities of the same range.
Judge Christopher S. Sontchi oversees the cases.
The Debtors tapped Kirkland & Ellis and Klehr Harrison Harvey
Branzburg LLP as legal counsel, AlixPartners LLP as financial
advisor, and Perella Weinberg Partners LP as investment banker.
Epiq Corporate Restructuring is the claims agent and administrative
advisor.
Evercore and Vinson & Elkins, LLP serve as legal advisors to
Bonanza Creek.
Akin Gump, LLP serves as legal advisor to an informal group of
HighPoint noteholders that signed the TSA.
HIGHPOINT RESOURCES: Hires Perella Weinberg as Investment Banker
----------------------------------------------------------------
HighPoint Resources Corporation and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Delaware to hire
Perella Weinberg Partners LP and the firm's energy investment
banking division, Tudor, Pickering, Holt & Co., as investment
banker.
The firm will render these services:
General Financial Advisory and Investment Banking Services
-- review the Debtors' financial condition and outlook;
-- assist in the development of financial data and presentations
to the Debtors' board of directors, lenders, creditors and other
parties;
-- analyze the Debtors' financial liquidity and evaluate
alternatives to improve such liquidity;
-- evaluate the Debtors' debt capacity and alternative capital
structures;
-- participate in negotiations among the Debtors and their
creditors, suppliers, lessors and other interested parties with
respect to any of the transactions contemplated by the engagement
letter;
-- advise the Debtors and negotiate with lenders with respect to
potential waivers or amendments of various credit facilities; and
-- provide other advisory services.
Restructuring Services
-- analyze various restructuring scenarios and the potential
impact of these scenarios on the value of the Debtors and the
recoveries of those stakeholders impacted by the restructuring;
-- provide strategic advice with regard to restructuring or
refinancing the Debtors' obligations;
-- provide financial advice to the Debtors in developing a
restructuring;
-- provide financial advice to the Debtors in structuring any new
securities to be issued under a restructuring; and
-- assist the Debtors or participate in negotiations with
entities or groups affected by the restructuring.
Financing Services
-- provide financial advice to the Debtors in structuring and
effecting a financing, identify potential investors and, at the
Debtors' request, contact and solicit such investors; and
-- assist in arranging a financing, including identifying
potential sources of capital, assisting in the due diligence
process, and negotiating the terms of any proposed financing, as
requested.
M&A Services
-- provide financial advice to the Debtors in structuring,
evaluating and effecting any "M&A transaction," identify potential
counterparties and, at the Debtors' request, contact and solicit
potential counterparties; and
-- assist in arranging and executing an M&A transaction,
including identifying potential buyers or parties in interest,
assisting in the due diligence process, and negotiating the terms
of any proposed M&A transaction, as requested.
The firm will be compensated as follows:
-- A monthly financial advisory fee of $175,000, provided that 50
percent of the monthly fees paid after the third full monthly fee
is paid shall be credited against any restructuring fee that
becomes payable.
-- A restructuring fee equal to 0.9 percent of the par value of
any debt obligations materially modified, restructured or
discharged, payable promptly upon consummation of a restructuring
other than a mere amendment; provided, however, that in the event
one or more of the Debtors contemplate filing a "prepackaged" or
"pre-arranged" bankruptcy, then (a) to the extent funds are
available, up to 50 percent of the restructuring fee shall be
payable at the earlier of (i) approval by one or more of the
Debtors of a restructuring support agreement, lock-up agreement or
similar agreement or (ii) the launch of a solicitation of votes for
prepackaged reorganization plan, and (b) the remaining unpaid
restructuring fee shall be payable promptly upon confirmation by
the bankruptcy court of such restructuring.
-- In the event of a material amendment or modification to the
terms of that certain credit agreement dated Sept. 14, 2018 between
HighPoint and JP Morgan Chase Bank, a fee equal to $1 million,
payable promptly upon the Debtors' agreement to the amendment and
effectiveness of the amendment; provided, that 50 percent of such
fee shall be credited against any restructuring fee or M&A
transaction fee.
-- A financing fee equal to (i) 1.0 percent of all gross proceeds
from the issuance of debt securities by the Company; plus (ii) 4.0
percent of all gross proceeds from the issuance of any new equity
or new equity-linked security by one or more of the Debtors, in
each case payable upon the consummation of any financing; provided,
that (iii) if funds are committed prior to one or more of the
Debtors filing a petition to become a debtor under chapter 11 in
connection with a DIP financing, then the financing fee of 1.0
percent of all gross proceeds associated with such financing shall
be calculated based upon the fully committed amount and payable
upon commitment of such financing; and (iv) the financing fees
payable in the case of an exit financing shall equal the respective
debt or equity-linked securities financing fee applied to any fully
committed amounts, including undrawn amounts under any
reserve-based revolving credit facilities.
-- An M&A transaction fee equal to 1.0 percent of the
"transaction value" associated with the transaction, payable
promptly upon consummation of such transaction.
-- An fee equal to $1 million, payable upon the Debtors' request
that Perella deliver an opinion, provided that up to 50 percent of
such fee paid to the firm shall be creditable once against any M&A
transaction fee or TPH breakup fee that becomes payable.
-- A fee to be paid only if the Debtors, in their sole
discretion, determine that the quality of advice and services
justifies such additional compensation.
Kevin Cofsky, a partner at Perella Weinberg Partners, disclosed in
court filings that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Kevin Cofsky
Perella Weinberg Partners LP
767 Fifth Avenue
New York, NY 10153
Telephone: (212) 287-3200
About HighPoint Resources
HighPoint Resources Corporation (NYSE: HPR) is a Denver,
Colo.-based company focused on the development of oil and natural
gas assets located in the Denver-Julesburg Basin of Colorado.
Additional information about HighPoint may be found on its website
at http://www.hpres.com/
On March 14, 2021, HighPoint and two affiliated companies filed
petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 21-10565) to seek confirmation of a prepackaged plan
that would provide for a merger with Bonanza Creek Energy, Inc. In
the petition, HighPoint disclosed assets of between $500 million
and $1 billion and liabilities of the same
range.
Judge Christopher S. Sontchi oversees the cases.
The Debtors tapped Kirkland & Ellis and Klehr Harrison Harvey
Branzburg LLP as legal counsel, AlixPartners LLP as financial
advisor, and Perella Weinberg Partners LP as investment banker.
Epiq Corporate Restructuring is the claims agent and administrative
advisor.
Evercore and Vinson & Elkins, LLP serve as legal advisors to
Bonanza Creek.
Akin Gump, LLP serves as legal advisor to an informal group of
HighPoint noteholders that signed the TSA.
HIGHPOINT RESOURCES: Seeks to Hire Klehr Harrison as Co-Counsel
---------------------------------------------------------------
HighPoint Resources Corporation and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Delaware to hire
Klehr Harrison Harvey Branzburg, LLP.
Klehr Harrison will serve as co-counsel with Kirkland & Ellis, LLP
and Kirkland & Ellis International, LLP, the New York-based law
firms handling the Debtors' Chapter 11 cases.
Klehr Harrison will provide these services:
(a) advise the Debtors regarding local rules, practices,
precedent and procedures, and provide substantive and strategic
advice on how to accomplish the Debtors' goals in connection with
the prosecution of their cases;
(b) appear in court, depositions and at any meeting with the
Subchapter V trustee and creditors;
(c) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(d) negotiate, review, comment and prepare agreements,
pleadings, documents and discovery materials to be filed with the
court, including, among other things, sale motions, agreements,
Chapter 11 plan and disclosure statement;
(e) assist the Debtors with respect to the reporting
requirements of the Subchapter V trustee and U.S. trustee;
(f) take all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors in negotiations concerning litigation in
which the Debtors are involved;
(g) perform various services in connection with the
administration of the Debtors' cases; and
(h) perform all other services assigned by the Debtors.
The firm will be paid at these rates:
Partners $440 to $845 per hour
Counsel $395 to $500 per hour
Associates $305 to $425 per hour
Paralegals $225 to $295 per hour
The firm will also be reimbursed for out-of-pocket expenses
incurred.
Domenic Pacitti, Esq., a partner at Klehr Harrison, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Pacitti disclosed that:
-- Klehr Harrison has not agreed to any variations from, or
alternatives to, its standard or customary billing arrangements for
this engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- Klehr Harrison represented the Debtors during the months
before the petition date commencing Jan. 1, 2021, using these
hourly rates:
Partners $440 to $845
Counsel $395 to $500
Associates $305 to $425
Paralegals $225 to $295
-- the firm has approved the budget and staffing plan for the
period from March 14 to April 13, 2021.
Klehr Harrison can be reached at:
Domenic E. Pacitti, Esq.
Michael W. Yurkewicz, Esq.
Sally E. Veghte, Esq.
Klehr Harrison Harvey Branzburg, LLP
919 N. Market Street, Suite 1000
Wilmington, DE 19801
Tel: (302) 426-1189/(302) 552-5511
Fax: (302) 426-9193
Email: dpacitti@klehr.com
myurkewicz@klehr.com
sveghte@klehr.com
About HighPoint Resources
HighPoint Resources Corporation (NYSE: HPR) is a Denver,
Colo.-based company focused on the development of oil and natural
gas assets located in the Denver-Julesburg Basin of Colorado.
Additional information about HighPoint may be found on its website
at http://www.hpres.com/
On March 14, 2021, HighPoint and two affiliated companies filed
petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Lead Case No. 21-10565) to seek confirmation of a prepackaged plan
that would provide for a merger with Bonanza Creek Energy, Inc. In
the petition, HighPoint disclosed assets of between $500 million
and $1 billion and liabilities of the same range.
Judge Christopher S. Sontchi oversees the cases.
The Debtors tapped Kirkland & Ellis and Klehr Harrison Harvey
Branzburg LLP as legal counsel, AlixPartners LLP as financial
advisor, and Perella Weinberg Partners LP as investment banker.
Epiq Corporate Restructuring is the claims agent and administrative
advisor.
Evercore and Vinson & Elkins, LLP serve as legal advisors to
Bonanza Creek.
Akin Gump, LLP serves as legal advisor to an informal group of
HighPoint noteholders that signed the TSA.
HIGHTOWER HOLDING: Moody's Assigns B3 CFR on Growing Franchise
--------------------------------------------------------------
Moody's Investors Service has assigned a B3 Corporate Family Rating
to Hightower Holding, LLC. Moody's also assigned a B2 senior
secured bank credit facility rating to Hightower's proposed first
lien term loan, first lien delayed draw term loan and first lien
revolver. The outlook is stable.
Moody's said its rating action was in consideration of Hightower's
plans to issue a new $600 million first lien term loan and
establish a $150 million first lien delayed draw term loan and a
$200 million first lien revolver. Hightower also plans to issue a
further $300 million in other unsecured debt. Hightower plans to
refinance its existing capital structure using the proceeds from
its new first lien term loan and other unsecured debt, together
with cash on hand and new equity from its financial sponsor (funds
led by Thomas H. Lee Partners). Moody's noted that the net increase
in debt would be around $130 million following the consummation of
the refinancing transactions.
The following ratings were assigned:
Issuer: Hightower Holding, LLC
Corporate Family Rating, B3
Senior Secured Bank Credit Facility, B2
Outlook, Stable
RATINGS RATIONALE
Moody's said the B3 CFR reflects Hightower's elevated debt
leverage, weak profitability but strong and growing franchise in
the Registered Investment Advisors (RIA) sector. The rating also
reflects the credit benefits associated with Hightower's stable and
recurring revenue model, tempered by partial reliance on the
performance of broad financial markets.
Moody's said that Hightower's asset gathering capabilities have
improved in recent years, with total client assets of $110 billion
as of year-end 2020 (up from about $80 billion in 2019), $70
billion of which is advisory assets. The firm has grown through a
continued execution of a successful strategy of acquiring RIAs.
Moody's views the successful execution of Hightower's growth
strategy as credit positive, particularly because of the structure
of such deals where the interests of Hightower and the financial
advisor partners are broadly aligned. This results in a
partnership-like culture with limitations and covenants around
financial advisor departures, while maintaining advisor
independence. Hightower's strategy differs from the traditional
independent broker-dealer model, that relies on recruitment of
financial advisors through the extension of forgivable loans or
transition assistance.
Moody's expects its measure of Hightower's debt leverage to be
around 8.2x at the end of 2021 (including the debt-like treatment
of Hightower's cash portion of contingent earnout liabilities, and
lease liabilities). Hightower's leverage is higher than a number of
rated peers operating in the same and other industries at the same
rating level. Moody's said the ratings reflect Moody's expectation
for debt leverage improving to around 7.2x (Moody's-adjusted) by
year-end 2022, assuming no changes in the capital structure through
the issuance of additional debt to fund further M&A, or draws on
the delayed draw term loan.
The B2 rating for Hightower's proposed $600 million senior secured
first lien term loan, $150 million delayed draw term loan and $200
million revolving credit facility is based on the application of
Moody's Loss Given Default for Speculative-Grade Companies
methodology and model, and is reflective of their priority ranking
in Hightower's capital structure (considering that Hightower plans
to issue $300 million in other unsecured debt, that will be
subordinated to its first lien facility).
The outlook is stable, reflecting Moody's expectation that the
firm's strong growth trajectory, fueled by profit-generating M&A
transactions and a favorable environment for asset gathering, helps
offset Hightower's high debt leverage.
Governance is highly relevant for Hightower, as it is to all firms
operating in the financial services industry. Governance risks are
largely internal rather than externally driven, and in Moody's
assessment of Hightower's corporate governance, Moody's consider
the firm's majority-ownership by a financial sponsor, with minority
positions held by certain members of the management team and
financial advisors. Hightower's governance structure and financial
policy is representative of a financial sponsor portfolio company,
with potential for periodic increases in leverage or shareholder
distributions over time. This credit challenge is reflected in
Moody's assessment of Hightower's financial profile, and in its
assigned ratings.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade include the following: 1) An
improvement in profitability and debt reduction that results in
Moody's-adjusted debt leverage below 6.5x on a sustained basis; and
2) Increasing scale and evidence of strong organic revenue growth
through asset gathering at existing partners resulting in stronger
profitability while maintaining positive operating leverage.
Factors that could lead to a downgrade include: 1) Failure to
reduce leverage to below 7.5x on a Moody's-adjusted basis by
year-end 2022; 2) More aggressive financial policies or
debt-financed acquisitions, particularly if it becomes evident the
firm will not be able to meet its pre-determined de-leveraging
targets; 3) Revenue deterioration due to rising competition and fee
compression, underperformance or declines in broad financial
markets resulting in lower levels of client assets; 4)
Deterioration in the firm's free cash flow generation as a result
of weaker performance or integration issues following an M&A
transaction; and 5) Utilization of the $150 million delayed draw
term loan for purposes other than immediately highly-accretive
M&A.
The principal methodology used in these ratings was Securities
Industry Service Providers Methodology published in November 2019.
HIGHTOWER HOLDING: S&P Assigns 'B-' ICR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
Hightower Holding LLC. The outlook is stable. At the same time, S&P
assigned its 'B-' issue rating to its first-lien term loan and
first-lien delayed draw term loan. The first-lien term loan and
first-lien delayed draw term loan have recovery ratings of '4'
(40%), indicating an average recovery in the event of a default.
Hightower is issuing a $200 million five-year revolving credit
facility, $600 million seven-year term loan B, and a $150 million
seven-year delayed draw term loan to paydown existing debt.
Hightower, founded in 2008, is a full-service wealth management
firm catering to ultra-high- and high-net-worth clients. The
company acquires registered investment advisers (RIAs) and manages
back-office operations, while the RIA continues to operate with
independent branding and strategy. The company also has brokerage
capabilities and the ability to sell insurance products, as well as
add-on service offerings such as outsourced chief investment
officer (OCIO) and business consulting.
Hightower has been owned by THL Partners since 2018. In a secondary
transaction in December 2020, THL rolled its investment in
Hightower into a new single asset vehicle and added several new
investors, together owning approximately 64% of Hightower. The
balance is owned by Hightower's advisers and management.
Hightower began as a platform for advisers looking to leave
wirehouses and shift to an independent fiduciary model while
keeping the operational support of a larger firm. In 2014, the
company opened its platform to nonaffiliated advisers. In 2016,
Hightower began to acquire existing RIAs. Since 2018, Hightower has
converted most platform affiliates to its long-term affiliation
model and has continued to make investments in new RIAs.
As of February 2021, Hightower had interests in 114 RIAs with 350
advisers and approximately $110 billion in client assets, making it
the fourth-largest RIA in the U.S. by client assets in a fragmented
market. The company has been very acquisitive recently, with 23
acquisitions representing $34 billion in assets under management
(AUM) and 40 adviser businesses converted from the platform to
long-term affiliations since 2018.
The majority (97%) of revenue is generated by RIAs that maintain
long-term contracts with Hightower. Once in a long-term contract,
advisers are consolidated onto one Form ADV. Hightower owns the
client in this agreement, and there are noncompete and
nonsolicitation agreements in place to protect this relationship.
Interests are further aligned in that a portion of purchase
consideration is structured with earnouts and equity in Hightower,
and in that principals retain a significant stake in their
businesses. Hightower acquires a 50%-60% stake in these affiliates,
on average, and shares in earnings commensurate with its ownership
interest.
Client retention is also strong at 97% on average over the past
five years. This strength was demonstrated during the 2020 market
volatility; the company had a 2% attrition rate during the second
and third quarter of 2020, and new inflows continued throughout
2020. The company had organic net new asset growth of 7.3% on
average over the past three years, and 60% of this growth was from
new households.
Offsetting these strengths are Hightower's relatively small size
and narrow focus in high-net-worth, U.S.-based wealth management
when compared to the broader asset management industry. Fee rates
are below average for the industry, in part due to the large size
of client accounts, though the company has made increasing fee
rates to industry standards a priority. Margins are also below
average for the industry, though S&P expects improving margins and
operating efficiency as the company increases scale, and as costs
associated with its legacy strategy and mergers and acquisitions
(M&A) roll off.
While the tailwinds for wealth management are strong, the RIA space
is highly fragmented. The need to achieve scale has driven a
flurry of M&A in the industry and at Hightower. The company has
taken on significant debt to fund M&A over the past couple of
years, weighing on the company's leverage and interest coverage.
S&P expects Hightower to operate with average adjusted debt to
EBITDA well above 5.0x and interest coverage of 1.0x-2.0x over the
next 12 months.
Cash flow from operations has been modest over the last several
years (negative in 2018). Increases in cash have largely been
driven by financing activities as the company continues to invest
in its growth. Under S&P's base-case assumptions, funds from
operations begins to grow, reflecting the run rate of more recent
acquisitions.
The revolving credit facility has a springing covenant at 40%
utilization, requiring first-lien net leverage remain below 8.5x.
First-lien net leverage is 3.8x pro forma for the proposed
transaction. The delayed draw term loan can be drawn as long as
total leverage does not exceed 6.5x on a pro forma basis.
Hightower is significantly smaller than rated peers such as Focus
Partners and Edelman Financial Engines. Focus benefits from some
international presence and earnings downside protection through its
preferred interest structure with partners. Edelman benefits from a
401k managed accounts segment that has proven to be complementary
to its RIA business. Both peers operate with leverage significantly
lower than Hightower--granted, their strategies are somewhat more
mature.
In S&P's base-case scenario, it assumes the following:
-- In S&P's debt to EBITDA and interest coverage calculations, it
weighs its 2021 and 2022 forecast 50% each.
-- S&P assumes 25% revenue growth in 2021 and 9% in 2022,
incorporating the full-year view of 2020 acquisitions and the
earnings of contracted future M&A or step-ups in ownership, and
organic growth of 6% per year.
-- S&P assumes expense growth of 23% in 2021 and 5% in 2021,
incorporating the expected roll-off of some one-time expenses,
growth of business management services expenses in line with the
forecasted growth in equity method income, and other expense growth
in line with organic revenue growth.
-- S&P adjusts EBITDA to include equity method income and an
adjustment for operating leases, and we add back unit grant
compensation.
-- S&P includes as debt the new $600 million first-lien term loan,
the $90 million outstanding second-lien term loan, and the $33
million draw on the second-lien delayed draw term loan. S&P assumes
that the existing first-lien debt will be repaid by the new
first-lien term loan.
-- S&P adjusts debt to include an adjustment for operating leases,
the portion of contingent considerations payable in cash, the cash
consideration payable for future contracted step ups in ownership
of affiliates, and put options on minority stakes.
-- S&P does not net cash against debt given financial-sponsor
ownership and aggressive recent M&A.
-- S&P does not assume further debt issuance or draw on the
revolver or deferred draw term loan.
-- S&P assumes a 4% interest rate margin for the term loan B,
revolver, and delayed draw term loan, and a 6% fixed rate for the
senior unsecured notes. S&P assumes LIBOR will not exceed 1% over
the next 12 months.
-- S&P expects Hightower to operate with average adjusted debt to
EBITDA well above 5.0x and interest coverage of 1.0x-2.0x over the
next 12 months.
Hightower has adequate liquidity, with sources exceeding uses by at
least 1.2x over the next 12 months. S&P includes as sources of
liquidity cash of at least $20 million, a $200 million available
revolver; a $150 million available delayed draw term loan (subject
to covenants that could limit the company's ability to draw), and
the $600 million debt issuance proceeds. S&P includes as uses of
liquidity debt retirement of at least $600 million, expected
negative funds from operations of about $50 million over the next
12 months, capital expenditure of about $7 million, and
distributions to minority shareholders of about $3 million.
S&P said, "The stable outlook reflects our expectation that
Hightower will continue to operate with adjusted debt to EBITDA
above 5.0x and interest coverage of 1x-2x over the next 12 months,
while the company continues to grow both organically and through
M&A.
"We could lower the ratings if Hightower's interest coverage
approaches 1.0x, if liquidity becomes less than adequate, or if
Hightower's cushion against its financial covenants erodes
substantially.
"We do not anticipate raising the ratings over the next 12 months.
Over the longer term, we could raise the ratings if Hightower
maintains leverage below 5.0x and interest coverage above 2x while
continuing to grow organically."
HOVENSA LLC: EPA Asks Court to Shift Emissions Deal to New Owner
----------------------------------------------------------------
Law360 reports that the U.S. government on Thursday asked a federal
court to approve the transfer of some Clean Air Act settlement
obligations to Limetree Bay Terminals LLC, which bought an
offending oil refinery from Hovensa LLC shortly after it went
bankrupt.
The U.S. Environmental Protection Agency told a U.S. Virgin Islands
federal court that an updated settlement was fair, adequate and
reasonable. The agency said that settlement, which was required to
be drafted as a part of Limetree's purchasing of a formerly
offending St. Croix oil refinery and terminal in 2016, would
transfer over some obligations to which Hovensa originally agreed.
About Hovensa LLC
Hovensa, L.L.C., produces and markets refined petroleum products.
The Company offers gasoline, diesel, home heating oil, jet fuel,
kerosene, and residual fuel oil. Hovensa serves customers
throughout North America.
Hovensa L.L.C. filed a Chapter 11 bankruptcy petition in the U.S.
Bankruptcy Court for the District of the Virgin Islands (Bankr. D.
V.I. Case No. 15-10003) on Sept. 15, 2015. The petition was signed
by Sloan Schoyer as authorized signatory. The Debtor has estimated
assets of $100 million to $500 million, and liabilities of more
than $1 billion.
Judge Mary F. Walrath is assigned to the case. The Law Offices of
Richard H. Dollison, P.C., serves as the Debtor's counsel. Prime
Clerk LLC is the Debtor's claims and noticing agent. Alvarez &
Marsal North America, LLC to provide Thomas E. Hill as chief
restructuring officer, effective Sept. 15, 2015 petition date.
The U.S. Trustee appointed five creditors to serve on the committee
of creditors holding unsecured claims.
HUSCH & HUSCH: Fine-Tunes Plan; Updates Properties for Sale
-----------------------------------------------------------
Husch & Husch, Inc., submitted a Second Amended Plan of
Reorganization and a Disclosure Statement on April 6, 2021.
The Debtor's representative put a value of $75,000.00 on Commercial
Lot (Art. II, def. #8(b)). The Debtor believes it has a business
interested in buying the property for this amount.
The Debtor's Plan provides that its representatives shall use their
best efforts to sell Commercial Lot (Art. II, def. #8(b)). It
further provides that the sale shall be upon such terms and
conditions as the Court may approve after notice and hearing. The
sale shall be free and clear of all claims and liens, including
those of Heritage Bank and of Class 16 and 18 members.
The Debtor's Plan proposes that its representatives shall use their
best efforts to sell Open Ground 24 Acres (Art. II, def. #29(b)).
The sale shall be upon such terms and conditions as Court may
approve after notice and hearing. The sale shall be free and clear
of all claims and liens, including those of Heritage Bank and of
Class 16 and 18 members.
The professional Claims of Class 1(a) are provided to be paid from
the collection, liquidation, and distribution of property and plan
payments as set forth in the plan. The total claims should not
exceed $200,000.00. The services are continuing so the amounts are
increasing monthly. The amount listed for Southwell & O'Rourke,
P.S. is for services through March 17, 2021 in the amount of
$165,007.00 plus unreimbursed costs in the amount of $5,839.20.
The Second Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and shareholders:
* It is proposed in Plan that the allowed claims of Class 14
(Unsecured) shall be paid in full together with interest. It
proposes they shall be paid in 12 equal quarterly installments,
with the first installment shall be paid in the third full quarter
following Confirmation.
* The Plan specifies that the 3 members of Class 19
(Shareholders) shall be paid nothing as shareholder unless and
until all other classes are fully paid.
A full-text copy of the Second Amended Disclosure Statement dated
April 6, 2021, is available at https://bit.ly/32gk7AN from
PacerMonitor.com at no charge.
The Debtor's counsel:
KEVIN O'ROURKE
DAN O'ROURKE
SOUTHWELL & O'ROURKE, P.S.
960 Paulsen Center
W. 421 Riverside Avenue
Spokane, WA 99201
Tel: (509) 624-0159
About Husch & Husch
Husch & Husch, Inc. -- http://www.huschandhusch.com/-- is a
family-owned and operated agricultural chemical and fertilizer
company located in Harrah, Washington. It provides conventional
and organic fertilizers, micro-nutrient technology, and chemicals
to help make lawn, garden, agronomic crops, and fruit trees grow to
their full potential. Husch & Husch was founded in 1937 by Pete
Husch.
Husch & Husch, Inc., based in Harrah, WA, filed a Chapter 11
petition (Bankr. E.D. Wash. Case No. 20-00465) on March 4, 2020.
In the petition signed by CFO Allen Husch, the Debtor disclosed
$12,284,732 in assets and $5,966,019 in liabilities. Dan O'Rourke,
Esq., at Southwell & O'Rourke, P.S., is the Debtor's bankruptcy
counsel.
IHEARTMEDIA INC: S&P Affirms 'B' ICR, Outlook Stays Negative
------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
iHeartMedia Inc. because it expects the company's FOCF to debt will
improve comfortably above 5% in 2022, which is our threshold for
the current rating. S&P expects leverage will decline back below 6x
in 2022 from above 10x currently.
The negative outlook reflects the potential for a lower rating if
radio advertising takes longer to recover and we expect FOCF to
debt to remain below 5% in 2022.
S&P said, "We expect radio advertising will largely recover, but
its recovery will extend into 2022. Reduced advertising spending
from the U.S. recession brought on by the pandemic reduced
iHeartMedia's broadcast radio advertising revenue by approximately
28% in 2020. Radio advertising has sequentially improved since its
low point in April 2020, and though we expect it will recover to
about 90% of full-year 2019 levels, we do not expect this to occur
until 2022. Radio advertising is predominantly local and is
dependent on listening in the car, therefore we believe its
recovery will take longer than for other forms of traditional media
such as television. As the pandemic continues, we are uncertain to
what degree smaller advertisers will permanently close their
businesses due to financial distress from the recession.
Additionally, while radio advertising normally has short lead
times, we believe the recession further shortened advertiser
commitments, giving us little visibility into the recovery of radio
advertising."
Digital revenue growth partially offsets the company's exposure to
radio advertising. While digital revenue growth slowed in the
second quarter of 2020, it quickly returned to
double-digit-percentage growth in the third quarter and continued
to grow in the fourth quarter, resulting in total digital revenue
growth of about 26% in 2020. Digital revenue contributed 16% of
total revenue in 2020, up from 10% in 2019 (due to a combination of
digital revenue growth and declines in radio advertising revenue).
S&P said, "We expect digital revenue will be an increasing share of
iHeartMedia's revenue over the next several years, although radio
advertising will still make up the majority of total revenue.
iHeartMedia generates significantly more revenue from its digital
offerings than its broadcast radio peers, including 2.5x the amount
generated by Entercom (the second-largest radio company).
iHeartMedia is the No. 1 commercial podcasting company, generating
over $100 million of podcasting revenue in 2020, which we expect
will accelerate its digital revenue growth given the increasing
popularity of podcasting. We estimate the CPMs (cost per thousand)
for podcasting are more than 3x those for broadcast radio, and
iHeartMedia's management has said that its podcasting margins are
greater than those of the overall company.
"The negative outlook reflects the potential for a lower rating if
radio advertising takes longer to recover and we expect FOCF to
debt to remain below 5% in 2022."
S&P could lower the rating if it expects FOCF to debt to remain
below 5% in 2022. This could occur if:
-- The recovery timeline for radio advertising is delayed further,
or we expect radio to lose greater share to other forms of
advertising above our current expectation of around 10%; or
-- The company uses its cash for sizable acquisitions that are not
immediately accretive rather than paying down debt.
S&P said, "We could revise the outlook to stable if we have
increased confidence in the recovery of radio advertising,
therefore increasing our expectation that FOCF to debt will improve
above 5% in 2022. This could occur if:
"Radio advertising continues to sequentially recover in the second
and third quarters of 2021, increasing our expectation that it will
recover to 90% of full-year 2019 levels in 2022."
IMAGEWARE SYSTEMS: Incurs $7.2 Million Net Loss in 2020
-------------------------------------------------------
Imageware Systems Incorporated filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $7.25 million on $4.78 million of revenue for the year
ended Dec. 31, 2020, compared to a net loss of $11.58 million on
$3.51 million of revenue for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $14.80 million in total
assets, $33.05 million in total liabilities, $1.57 million in
mezzanine equity, and a total shareholders' deficit of $19.82
million.
San Diego, California- based Mayer Hoffman McCann P.C., the
Company's auditor since 2011, issued a "going concern"
qualification in its report dated April 2, 2021, citing that the
Company does not generate sufficient cash flows from operations to
maintain operations and, therefore, is dependent on additional
financing to fund operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/941685/000165495421003840/iwsy10k_12312020.htm
About ImageWare Systems
Headquartered in San Diego, CA, ImageWare Systems, Inc. --
http://www.iwsinc.com-- provides defense-grade biometric
identification and authentication for access to your data,
products, services or facilities. The Company delivers
next-generation biometrics as an interactive and scalable
cloud-based solution. ImageWare brings together cloud and mobile
technology to offer two-factor, biometric, and multi-factor
authentication for smartphone users, for the enterprise, and across
industries.
IXS HOLDINGS: S&P Affirms 'B' Issuer Credit Rating, Outlook Neg.
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on IXS
Holdings Inc. and removed the rating from CreditWatch, where S&P
placed it with negative implications on April of 2020. The outlook
is negative.
S&P affirmed the 'B' issue level rating on the $620 million term
loan B and removed the rating from CreditWatch. The recovery rating
on this debt remains '3' (rounded estimate: 50%).
The negative outlook reflects a modest risk of a downgrade over the
next 12 months if FOCF approaches breakeven or turns negative due
to several headwinds including the impact of semiconductor shortage
on platform launch schedules, which could negatively affect the
company's sales.
S&P said, "We expect a modest improvement in the company's credit
metrics in fiscal 2021, though its customer concentration and
exposure to OEMs makes it susceptible to industry headwinds. As
global light-vehicle demand continues to recover, we anticipate
IXS' sales to grow significantly compared to 2020, though volumes
will remain lower than pre-pandemic levels. The company's exposure
to original equipment manufacturers (OEMs) (over 75% of sales)
could constrain sales as semiconductor chip shortage issues result
in production delays and rescheduling of launches. In addition,
rising commodity prices could pressure margins. We now expect S&P
Global Ratings-adjusted leverage of around 5x and FOCF to debt of
below 5%.
"Although we expect modest improvement in credit metrics, we
recognize the risk of sustained high leverage due to the company's
financial sponsor. While sales growth and improved EBITDA margins
should support higher cash flow generation, distributions to
shareholders may prevent meaningful improvement in leverage, as
cash is used to pay investors rather than pay down debt. IXS
delayed all distributions during 2020, in response to the pandemic,
but continued in the first fiscal quarter of 2021, ended Dec. 31,
2020. We expect these distributions to continue as cash flows
improve, somewhat limiting the upside to credit metrics."
The company has adequate liquidity, supported by its asset-based
lending (ABL) facility, manageable mandatory amortization payments,
and no leverage financial maintenance covenants. The company's low
fixed cost structure compared to other suppliers partially
mitigates profitability impacts, unlike other auto suppliers we
rate. There is also no upcoming refinancing risk, as Clearlake
acquired IXS last year financed through a $620 million first-lien
term loan (maturing 2027), $75 million ABL (maturing 2025), and
common equity. The ABL has a springing fixed-charge coverage ratio
of 1.0:1 if excess availability is the greater of $7.5 million or
10% of the term loan ($62 million). We expect that the company
would remain in compliance, even if the covenant were to be
tested.
Environmental, social, and governance (ESG) factors relevant to the
rating action:
-- Health and safety
The negative outlook reflects a modest risk of a downgrade over the
next 12 months if FOCF approaches breakeven or turns negative due
to several headwinds including the impact of semiconductor shortage
on platform launch schedules, which could negatively affect IXS'
sales.
S&P could lower the rating on IXS over the next 12 months:
-- if debt to EBITDA is expected to significantly exceed 5x in
2021; or
-- if FOCF were to approach breakeven.
This would likely result from a decline in revenues due to delayed
product launches at OEMs in response to the semiconductor chip
shortage.
S&P said, "We could raise our rating on IXS if its end-market
conditions continue to recover, enabling debt to EBITDA to improve
to below 5x and FOCF to debt increases toward 5% on a sustained
basis. In addition, we would look for a sustained track record from
its financial sponsor at maintaining leverage metrics at those
levels."
JAGUAR HEALTH: Amends Equity Purchase Agreement With Oasis Capital
------------------------------------------------------------------
Jaguar Health, Inc. has entered into an amendment to the March 24,
2020 equity purchase agreement with Oasis Capital, LLC.
As previously announced, Oasis is committed to purchasing up to an
aggregate of $2.0 million of Jaguar common stock over the 36-month
term of the Equity Purchase Agreement. Per the terms of the
Amendment, the purchase price for each share of Jaguar common stock
purchased by Oasis Capital under the Equity Purchase Agreement will
increase from $0.436 to $3.00.
"We are very happy to have entered into this Amendment with Oasis,"
said Lisa Conte, Jaguar's president and CEO, "with an increased
share purchase price that is reflective of the recent performance
of the Company's stock. This established equity line provides the
Company with access to proceeds as may be needed for working
capital and general corporate purposes as we continue to work to
become a sustainable, cash flow positive commercial business
supported primarily by sales of Mytesi."
In consideration for Oasis Capital's entry into the Amendment, the
Company shall issue to Oasis Capital a common stock purchase
warrant to purchase 100,000 shares of the Company's common stock,
par value $0.0001 per share, with a per share exercise price equal
to the Minimum Price (as defined under Nasdaq Listing Rules) of the
Company's common stock as of the date of the Amendment.
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar Health reported a net loss and comprehensive loss of $33.81
million for the year ended Dec. 31, 2020, compared to a net loss
and comprehensive loss of $38.54 million for the year ended Dec.
31, 2019. As of Dec. 31, 2020, the Company had $42.84 million in
total assets, $25.64 million in total liabilities, and $17.20
million in total stockholders' equity.
JAGUAR HEALTH: Promotes Carol Lizak as Chief Financial Officer
--------------------------------------------------------------
Jaguar Health, Inc. has promoted Carol Lizak, an accomplished
financial executive, to the expanded role of chief financial
officer.
"We are thrilled to have Carol take on this important and expanded
role as part of Jaguar's management team. Since joining Jaguar,
she has played a pivotal role in the growth and development of the
Company, demonstrating her expertise in business and financial
strategy," commented Lisa Conte, Jaguar's president and CEO.
"Carol's promotion is reflective of her dedicated leadership and
thoughtful contributions across finance, accounting, strategic
planning, and corporate strategy as we've transitioned from an R&D
company to a commercial-stage entity focused on becoming a global
leader in the development and commercialization of novel entries
into the field of gastrointestinal health. I look forward to
continuing to work with Carol as our chief financial officer."
Ms. Lizak, who joined Jaguar in May of 2019, previously held the
title of senior vice president of finance and chief accounting
officer at the Company. She has more than 20 years of corporate
controllership and financial planning and analysis experience under
U.S. GAAP & IFRS. Prior to joining Jaguar, Ms. Lizak served as
senior director and corporate controller of Zosano Pharma
Corporation, as controller of Quantum Secure, Inc., and as
executive director, corporate controller of Alexza Pharmaceuticals,
Inc. Prior thereto, she spent nine years as corporate controller of
a subsidiary of HID Global Corporation. Ms. Lizak holds an MBA
from Pepperdine Graziadio Business School.
In connection with Ms. Lizak's promotion, the Company's board of
directors approved an increase in her base salary from $247,500 to
$290,000, retroactively effective as of April 1, 2021. Ms. Lizak
will continue to be eligible for annual or other grants under the
Company's 2014 Stock Incentive Plan and to participate in the
employee benefit plans that the Company offers to its other
employees.
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar Health reported a net loss and comprehensive loss of $33.81
million for the year ended Dec. 31, 2020, compared to a net loss
and comprehensive loss of $38.54 million for the year ended Dec.
31, 2019. As of Dec. 31, 2020, the Company had $42.84 million in
total assets, $25.64 million in total liabilities, and $17.20
million in total stockholders' equity.
JB HOLDINGS: Sets Bidding Procedures for Hobe Sound Property
------------------------------------------------------------
JB Holdings of Hobe Sound, LLC, asks the U.S. Bankruptcy Court for
the Southern District of Florida to authorize the bidding
procedures in connection with the online auction sale of the real
property located on SE Rohl Way, Hobe Sound, Florida, PCN
34-38-42-480-000-00020-0.
The Debtor is the owner of the Property and legally described as
Parcel 2, Mission Place, according to the Plat thereof, as recorded
in Plat Book 16, Page 85, of the Public Records of Martin County,
Florida.
Neal Litman, Rebecca Litman and Alan Jacobson hold a secured lien
in the Offered Assets in the amount of $564,018.75 (Claim #1).
The Bidding Procedures provide a flexible process where the Debtor
will be soliciting bids for the Offered Assets. The Debtor
expressly reserves the right to modify the relief requested in the
Motion prior to or at the applicable hearings, including modifying
the proposed Bidding Procedures.
The Debtor asks that it be authorized to enter into an agreement
that provides a bidder who is willing to serve as a stalking horse
bidder a Breakup Fee of $10,000 upon a successful closing by either
the Highest and Best bidder or the Backup bidder.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: No later than 24 hours prior to the posted
closing time of the auction.
b. Initial Bid: The gross contract price will be equal to a
high bid + a 7% Buyer's Premium. In the event a Stalking Horse Bid
is received prior to the opening of the online auction event in an
amount exceeding the claim of the Secured Creditor and is approved
by the Debtor, the Initial Overbid by any Qualified Bidder will be
$20,000.
c. Deposit: $10,000
d. Auction: The online auction will be open for bidding by the
qualified bidders until (TBD), subject to the auto-extend features
of the Tranzon Driggers bidding platform.
e. Bid Increments: $10,000
f. Sale Hearing: A hearing to approve the sale will be
requested by the Debtor's counsel to occur within three business
days of the online auction event.
g. Sale Objection Deadline:
h. Closing: The closing will be within 30 days of the online
auction event, or within 10 days of entry of a court order
approving the sale, whichever is longer.
i. Neal Littman, Rebecca Littman and Alan Jacobson and/or
their successors or assigns, are not required to submit a PSA to
credit bid up to their secured credit limit in the online auction.
The Secured Creditor, and/or its successors or assigns, and the
Stalking Horse bidder, if applicable, will be deemed automatically
qualified to participate in the online auction.
The sale will be free and clear of certain liens, claims, and
encumbrances.
The Debtor believes, in its sound business judgment, that the
contemplated auction sale will offer the best price and the best
terms for the sale of the Offered Assets. By way of the Motion, it
asks that the Court schedules a further hearing after completion of
the auction wherein the Debtor will ask the entry of an order from
the Court approving and authorizing the proposed sale to the
successful bidder(s) on the terms and conditions of the successful
bid.
A copy of the Bidding Procedures is available at
https://tinyurl.com/tvfvhpjy from PacerMonitor.com free of charge.
About JB Holdings of Hobe Sound
JB Holdings of Hobe Sound, LLC owns 4.88 acres of unimproved real
estate worth $1.5 million in Hobe Sound, Fla.
JB Holdings of Hobe Sound filed a Chapter 11 petition (Bankr. S.D.
Fla. Case No. 20-24182) on Dec. 31, 2020. In its petition, the
Debtor disclosed $1,510,000 in assets and $504,526 in liabilities.
John Doyle, manager, signed the petition.
Judge Mindy A. Mora oversees the case.
The Debtor tapped Kelley, Fulton & Kaplan, P.L. as its bankruptcy
counsel and McCarthy Summers Wood Norman Melby & Scultz, P.A. as
its special counsel.
JELD-WEN INC: Moody's Affirms Ba3 CFR & Alters Outlook to Stable
----------------------------------------------------------------
Moody's Investors Service changed the outlook for JELD-WEN, Inc. to
stable from negative. Moody's also affirmed JELD-WEN's Ba3
Corporate Family Rating, Ba3-PD Probability of Default Rating, the
Ba2 rating on the company's senior secured term loan and senior
secured notes, and the B2 rating on its senior unsecured notes.
JELD-WEN's SGL-2 Speculative Grade Liquidity Rating is maintained.
The change in the outlook to stable reflects Moody's expectation of
improvement in JELD-WEN's credit metrics over the next 12 to 18
months. Moody's expects JELD-WEN's adjusted debt to EBITDA to
decline toward about 4.0x by 2021 year end through increased
earnings and operating margin growth. The company's operating
performance will be supported by strong end market conditions in
its North American markets, and stable sector trends in its
European markets with respect to new residential construction and
repair and remodeling activity. The company's North American
operations, which represent 60% of total revenue, are expected to
be the largest contributor to top line growth. JELD-WEN's operating
margin is expected to improve modestly over the next 12 to 18
months from cost and productivity initiatives, including footprint
rationalization and equipment modernization. Moody's also expects
maintenance of good liquidity and solid free cash flow.
The following rating actions were taken:
Affirmations:
Issuer: JELD-WEN, Inc.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Senior Secured Bank Credit Facility, Affirmed Ba2 (LGD3)
Senior Secured Regular Bond/Debenture, Affirmed Ba2 (LGD3)
Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD5)
Outlook Actions:
Issuer: JELD-WEN, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
JELD-WEN's Ba3 Corporate Family Rating is supported by its: 1)
strong market position as a leading manufacturer of doors and
windows and one of the largest players in its North American,
Australian, and European end markets; 2) large revenue base of $4.2
billion and its global scale and geographic diversification of
sales across approximately 100 countries, providing manufacturing
and purchasing efficiencies; 3) financial policy that is geared
toward conservative debt leverage; 4) long-term strategies targeted
at productivity enhancements, cost reductions, and price increases
that are expected to result in operating margin improvement; and 5)
supportive end market trends.
At the same time, JELD-WEN's credit profile is constrained by: 1)
the cyclicality of the end markets served, particularly the new
residential construction segment; 2) competition and significant
pricing volatility inherent to the building products sector; 3) an
acquisitive growth strategy, which requires good execution to
realize all expected synergies and presents integration challenges;
4) the risk of shareholder friendly activities, including share
repurchases; and 5) risks related to litigation proceedings which
could result in cash outlays.
The Speculative Grade Liquidity Rating of SGL-2 reflects Moody's
expectation that JELD-WEN will maintain good liquidity in the next
12 to 15 months. Liquidity is supported by $736 million of cash at
December 31, 2020, Moody's expectation of solid free cash flow,
significant availability under the $400 million ABL revolving
credit facility due in December 2022, and a covenant-lite
structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if adjusted debt to EBITDA is
sustained below 3.5x, adjusted EBITA to interest coverage is above
4.5x, and adjusted EBITA margin exceeds 9%. In addition, the
upgrade will take into consideration the company's financial
policy, acquisition strategy, industry conditions, and liquidity.
The ratings may be downgraded if the company's adjusted debt to
EBITDA is sustained above 4.5x, adjusted EBITA to interest coverage
is sustained below 3.0x, operating margin declines or if liquidity
weakens meaningfully.
The principal methodology used in these ratings was Manufacturing
Methodology published in March 2020.
JELD-WEN, Inc., headquartered in Charlotte, NC, is a vertically
integrated manufacturer of doors and windows that are marketed
primarily under the JELD-WEN brand name in the U.S. and Canada and
under a variety of names in Europe and Australia. The company's
product offerings include interior and exterior doors, wood, vinyl,
and aluminum windows for the new residential construction, repair
and remodeling, and non-residential building markets. Onex Partners
III LP and certain affiliates hold approximately 25% of the
company's outstanding stock. In 2020, JELD-WEN generated
approximately $4.2 billion in revenue.
JFAL HOLDING: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: JFAL Holding Company LLC
780 N Resler Drive, Suite B
El Paso, TX 79912
Chapter 11 Petition Date: April 8, 2021
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 21-30285
Debtor's Counsel: Jeff Carruth, Esq.
WEYCER, KAPLAN, PULASKI & ZUBER, P.C.
3030 Matlock Rd.
Suite 201
Arlington, TX 76015
Tel: (713) 341-1158
E-mail: jcarruth@wkpz.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michael Dixson, 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/NMJG7CA/JFAL_Holding_Company_LLC__txwbke-21-30285__0001.0.pdf?mcid=tGE4TAMA
KLAUSNER LUMBER: Florida Sawmills Says Disclosures Deficient
------------------------------------------------------------
Secured creditor Florida Sawmills L.P. objects to the adequacy of
the disclosure statement filed by debtor Klausner Lumber One, LLC,
and the Official Committee of Unsecured Creditors.
The Disclosure Statement does not contain adequate information
within the meaning of Section 1125 of the Bankruptcy Code and the
Plan cannot be approved unless modified to cure the following
deficiencies:
* The description of Class 1A FS Secured Claims should not
include a possible treatment that Creditor could receive the
property that serves as security for such Allowed FS Secured Claim.
The assets were sold and there is no property to be provided to
Creditor.
* There is no description or detail as to why the Plan
Proponents are separately classifying the unsecured claims. The
Plan is a liquidating plan and provides that general unsecured
creditors will receive the same pro rata distribution of available
proceeds. Without a justifiable basis for separate classification,
Creditor does not agree that any unsecured portion of its claim can
or should be separately classified from other unsecured creditors.
* The Disclosure Statement fails to provide for a wind-down
budget.
* Disclosure Statement and Plan Improperly Include Derivative
Claims as part of Liquidating Trust Assets. The Plan Proponents
admit that the Debtor was 100% owned by Klausner Holding USA, Inc.
Therefore, the Debtor cannot assign the membership interests owned
by Klausner Holding USA, Inc. to the Liquidating Trust.
* The Disclosure Statement fails to disclose the identity of
the proposed Liquidation Trustee, the proposed compensation for the
Liquidation Trustee (and his/her professionals) and fails to attach
the Liquidating Trust Agreement.
* The Plan Proponents fail to disclose or describe the scope
of potential causes of action, including avoidance actions that may
provide additional sources for distributions to creditors [or
whether the estimated value of any such causes were incorporated
into the estimated distributions].
A full-text copy of Florida Sawmills' objection dated April 6,
2021, is available at https://bit.ly/2OCSzST from PacerMonitor.com
at no charge.
Counsel to Florida Sawmills L.P.:
THE ROSNER LAW GROUP LLC
Frederick B. Rosner
Zhao (Ruby) Liu
824 Market Street, Suite 810
Wilmington, DE 19801
Telephone: (302) 777-1111
E-mail: rosner@teamrosner.com
liu@teamrosner.com
- and -
MARKOWITZ RINGEL TRUSTY & HARTOG, P.A.
Grace E. Robson
101 NE Third Avenue, Suite 1210
Fort Lauderdale, FL 33301
Tel: (954) 767-0030
E-mail: grobson@mrthlaw.com
- and -
CPLS, P.A.
Lisa Hu Barquist
Florida Bar No.0011488
201 E. Pine Street, Suite 445
Orlando, FL 32801
Tel: (407) 647-7887
Email: lbarquist@cplspa.com
- and -
TEIN MALONE PLLC
Michael R. Tein
3480 Main Highway
Coconut Grove, Florida 33133
Tel: (305) 442-1101
E-mail: tein@teinmalone.com
About Klausner Lumber One
Klausner Lumber One, LLC, is a privately-held company in the lumber
and plywood products manufacturing industry. It is 100% owned by
non-debtor Klausner Holding USA, Inc.
Klausner Lumber One sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 20-11033) on April 30,
2020. At the time of the filing, Debtor disclosed assets of
between $100 million and $500 million and liabilities of the same
range.
Judge Karen B. Owens oversees the case.
The Debtor has tapped Westerman Ball Ederer Miller Zucker &
Sharfstein, LLP as its bankruptcy counsel; Morris, Nichols, Arsht &
Tunnell, LLP as local counsel; Asgaard Capital, LLC as
restructuring advisor; and Cypress Holdings, LLC, as investment
banker.
The Office of the U.S. Trustee appointed a committee to represent
unsecured creditors in the Debtor's Chapter 11 case. The committee
tapped Foley & Lardner LLP and Faegre Drinker Biddle & Reath LLP as
its counsel.
LANNETT INC: S&P Affirms 'B-' ICR on Refinancing, Outlook Negative
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer-level rating on Lannett
Inc. The outlook is negative.
At the same time, S&P assigned a 'B' issue-level rating and '2'
recovery rating to the proposed $350 million first-lien debt. The
'2' recovery rating indicates its expectation for substantial
(70%-90%; rounded estimate 80%) recovery in the event of default.
S&P said, "The negative outlook reflects our expectation for
revenue decline of about 10% in fiscal 2021 and annual free
operating cash flow (FOCF) generation of less than $20 million over
the next couple of years leaving little room for the company to
underperform before we could consider the capital structure
unsustainable.
"The proposed refinancing transaction would extend the company's
debt maturity profile and reduce refinancing risk, but we expect
credit metrics to remain very weak over the next few years. We
expect the transaction, if completed as proposed, would improve
Lannett's liquidity and address looming debt maturities in November
2022. However, given the recent underperformance we expect adjusted
debt to EBITDA to be well above 10x in 2021 and reduce to about 9x
in 2022. We expect this deleveraging will stem primarily from
earnings growth from the company's pipeline of new products, which
relies on the successful launches of their highly anticipated
generic Advair, Insulin Glargine, and Insulin Aspart products.
"Although operating performance continues to decline, we expect
some stabilization in the next 12 to 18 months. Lannett
experienced a more difficult competitive landscape than we
expected, with many of its existing products under pressure.
Competitors entered the market sooner than anticipated contributing
to pricing pressure on its portfolio. This led the company to
discontinue several of its existing low-margin products and
re-evaluate its existing higher-margin products, resulting in
revenue and EBITDA margins trending weaker than we expected. That
said, we expect revenue growth and EBITDA margin expansion beyond
fiscal 2021 stemming primarily from new product launches and a
return of some elective procedures as the vaccine rollout
continues.
"We see ongoing risks to Lannett's ability to strengthen its
portfolio as the broader generics industry remains highly
competitive. Following the portfolio optimization, the company has
approximately 100 marketed products and has reduced therapeutic
concentration in recent years. Its top product, Fluphenazine, still
represents approximately 8% of revenues. We believe Lannett will
need to remain disciplined in its capital investments as it looks
to sustain a strong pipeline of new products; however, the
company's capacity could erode should pricing pressure continue.
"The negative outlook on Lannett reflects our expectation for
revenue to decline about 10% in fiscal 2021 and annual FOCF
generation of less than $20 million over the next couple of years,
leaving little room for the company to underperform before we could
consider the capital structure unsustainable. We believe a
challenging competitive landscape in the broader generic industry
could result in further pricing pressure resulting in
lower-than-expected revenue and EBITDA margins, contributing to
adjusted debt to EBITDA and sustaining elevated leverage over the
next 12 months.
"We could lower the rating within the next 12 months if we consider
the company's capital structure to be unsustainable. This could
occur if operating performance is weaker than we expect,
contributing to our expectation for FOCF generation near breakeven
or negative over the next few years. This could result from delays
in product launches or increased competition on its existing
product portfolio. We could also lower the rating if Lannett is
unsuccessful in extending its maturity profile from this proposed
refinancing transaction, given strong market conditions and
upcoming maturities.
"We could revise the outlook to stable within the next 12 months if
following the completion of the proposed refinancing transaction,
we believe the company's earnings and cash flow prospects,
including from new product launches and stronger performance from
its existing portfolio, will strengthen. In this scenario, we would
likely expect positive annual FOCF generation after normalizing."
LIQUIDNET HOLDINGS: S&P Withdraws 'BB-' Issuer Credit Rating
------------------------------------------------------------
S&P Global Ratings withdrew its 'BB-' issuer credit and senior
secured ratings on Liquidnet Holdings Inc. given repayment of all
rated debt.
S&P is withdrawing its ratings because the rated debt has been
repaid and the company has been acquired by unrated TP ICAP PLC.
MADDOX FOUNDRY: June 3 Disclosure Statement Hearing Set
-------------------------------------------------------
On April 5, 2021, debtor Maddox Foundry & Machine Works, LLC filed
with the U.S. Bankruptcy Court for the Northern District of Florida
a disclosure statement and a plan. On April 6, 2021, Judge Karen K.
Specie ordered that:
* June 3, 2021, at 10:45 a.m., Eastern Time, via CourtCall is
the hearing to consider the approval of the disclosure statement.
* May 27, 2021, is fixed as the last day for filing and
serving written objections to the disclosure statement.
A full-text copy of the order dated April 6, 2021, is available at
https://bit.ly/3mIaNij from PacerMonitor.com at no charge.
About Maddox Foundry & Machine Works
Maddox Foundry & Machine Works, LLC, is a company that operates a
foundry machine shop. It emerged from a prior bankruptcy in 2017.
In February of 2019, Chase Hope took over control of the Debtor
from his parents, Fletcher and Mary Hope through the Debtor's
parent company, Green Health Science, LLC. By April 2019 the
Debtor started to experience financial issues. The Debtor
experienced cash-flow issues and was unable to service its
seven-figure obligations to the McGurn Entities.
Maddox Foundry & Machine Works, LLC, a company that operates a
foundry machine shop, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Fla. Case No. 20-10211) on Oct. 7,
2020. At the time of the filing, the Debtor disclosed assets of
$500,000 and liabilities of $4.495 million.
Judge Karen K. Specie oversees the case.
Seldon J. Childers, Esq., at ChildersLaw, LLC, serves as the
Debtor's legal counsel and Dawn Moesser, ASA, of ICS Asset
Management Services, Inc., as the Debtor's appraiser.
MANSIONS APARTMENT: Says Disclosures Failed to Describe Properties
------------------------------------------------------------------
David Campbell, a secured creditor, filed objections to Mansions
Apartment Homes, at Marine Creek, LLC's First Amended Disclosure
Statement dated April 2, 2021.
Campbell points out that the Plan of Reorganization continues to
propose the Debtor's potential closing of a $1 million loan from
some undisclosed lender which might come to fruition at some point
in the next 12 months, despite the Debtor having been unable to
obtain any financing since its initial purchase of its real estate
in 2018. This hypothetical loan will then be used to pay Debtor's
administrative claimants, to make interim payments of principal and
interest to Happy State Bank and Debtor's unsecured creditors, to
make interest-only payments to David Campbell in spite of his
position ahead of the unsecured creditors, to pay the debt service
on the hypothetical loan and to develop the property so that sales
can be made, all with the goal of paying everyone in full by the
end of that year.
Campbell further points out that the Amended Disclosure Statement
now includes an undated, non-binding expression of interest from
Midland States Bank to one of the Debtor's largest unsecured,
affiliated creditors for a $31 million construction loan which
requires a first lien position for the lender, yet fails to include
any payments to Debtor's current secured creditors.
Campbell asserts that the Amended Disclosure Statement and the
exhibits attached thereto provide direct proof of the Debtor's
inadequate capital structure, proposing a Plan of Reorganization
that relies solely on the potential of hypothetical loans to fund
its operations and continuing the employment of the same management
structure which has already shown its inability to operate
successfully both before and during these bankruptcy proceedings.
According to Campbell, the Amended Disclosure Statement glosses
over the entire time from the Debtor's acquisition of its real
estate in 2018 until its failed attempted sale of a portion of the
real estate to an insider in 2020; it wholly fails to describe how
the Debtor incurred in excess of $4 Million in unsecured debt to
affiliated entities and how such debt was utilized to develop or
benefit the real estate.
Campbell points out that although the Amended Disclosure Statement
now adds a brief rundown of litigation immediately preceding the
bankruptcy filing, it still does not describe the history of
Debtor's operations since it purchased its real estate, the
modification of the first lien indebtedness, nor the prior
litigation with the second lien holder.
Campbell further points out that although the Amended Disclosure
Statement now references the transfer of the 13.433 acres tract to
D4MC, LLC, the Debtor's affiliate, it fails to describe the
valuation of the real estate as it pertains to this tract, the
importance of this tract to Debtor's reorganization plans, nor any
steps by the Debtor to obtain possession of this tract back from
its affiliate.
Campbell asserts that the Amended Disclosure Statement still
contains the exhibit, now denoted Exhibit "C," referencing interim
lender draws, yet still fails to identify any details about the
lender, the loan terms, whether the loan is secured or the status
of the loan application or process.
According to Campbell, the Amended Disclosure Statement is
glaringly vague about the purported construction loan from Midland
States Bank, fails to describe any marketing, operational or
development efforts by the Debtor during the pendency of the
Chapter 11 and lacks any information about the Debtor's actions in
seeking such loan or any investors to fund its proposed
development.
Campbell points out that the Amended Disclosure Statement admits
that a risk exists that Debtor will not obtain any loans or
funding, but fails to provide detail as to the impact of such risk
or any inherent costs, delays and uncertainty of construction
processes and the other myriad issues arising with the development
of multi-family residential projects.
Attorneys for David Campbell:
Mark D. Winnubst
Sheils Winnubst
A Professional Corporation
1701 N. Collins Blvd., Suite 1100
Richardson, Texas 75080
Telephone: (972) 644-8181
Telecopier: (972) 644-8180
E-mail: mark@sheilswinnubst.com
About Mansions Apartment Homes
at Marine Creek
Mansions Apartment Homes at Marine Creek, LLC filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
N.D. Tex. Case No. 20-43643) on Nov. 30, 2020. Tim Barton,
president of Mansions Apartment, signed the petition. In the
petition, the Debtor disclosed assets of between $1 million and $10
million and liabilities of the same range.
Judge Edward L. Morris oversees the case.
Joyce W. Lindauer Attorney, PLLC, serves as the Debtor's legal
counsel.
On Feb. 3, 2021, the court appointed Robert Yaquinto, Jr., as the
Chapter 11 trustee. Bonds Ellis Eppich Schafer Jones LLP serves as
the trustee's legal counsel.
MAX FINE FURNITURE: PWB Seeks to Delay Plan Hearing to Late May
---------------------------------------------------------------
Pacific Western Bank ("PWB"), the prepetition secured lender of Max
Fine Furniture & Appliances, Inc., filed an emergency motion for
continuance of the final hearing on approval of the Disclosure
Statement and confirmation of the Debtor's Plan set for April 14,
2021.
PWB requests that the Court continue the combined hearing on the
Debtor's disclosure statement and plan, currently set for April 14,
2021 at 1:30 p.m., to a date in late May 2021 to allow a sale of
the Debtor's store property (owned by Maximo Saenz) to occur and a
new lease with the Debtor to be negotiated and noticed to creditors
in advance of confirmation.
The basis for the request for emergency consideration of this
Motion is that the disclosure statement and confirmation hearing
are fast approaching and the parties will have to expend
considerable expense to prepare for a contested hearing without
critical information such as lease terms and the identity of the
Debtor's potential landlord.
The Debtor's counsel has stated that the Debtor is agreeable to a
continuance of the confirmation hearing until late May, provided
that the next cash collateral order lowers the floor for the
adequate protection payment to $45,000, while the borrowing base
test is reduced from 70% to 68%.
Counsel to Pacific Western Bank:
Brent R. McIlwain
Brian J. Smith
Holland & Knight LLP
200 Crescent Court, Ste. 1600
Dallas, TX 75201
Tel.: (214) 964-9500
Fax (214) 964-9501
E-mail: brent.mcilwain@hklaw.com
brian.smith@hklaw.com
About Max Fine Furniture and Appliances
Max Fine Furniture & Appliances, Inc. --
https://www.maxfinefurniture.com/ -- sells a wide selection of
bedroom, living room, dining room, leather, home office, kids
furniture and brand name mattresses. It carries several brands,
including Ashley, Restonic Mattresses, and Best Chair.
Max Fine Furniture & Appliances sought Chapter 11 protection on
March 17, 2020 (Bankr. S.D. Tex. Case No. 20-70114). In the
petition signed by Maximo Saenz, president, the Debtor disclosed
$6,283,658 in assets and $4,261,778 in liabilities. Jana Smith
Whitworth, Esq., at JS Whitworth Law FIRM, PLLC, is the Debtor's
counsel.
MCCLATCHY CO: Ex-Couriers and Bankruptcy Trust Reach $22-Mil. Deal
------------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that a group of former
Sacramento Bee newspaper couriers who were misclassified as
independent contractors instead of employees agreed to a $22
million settlement with a bankruptcy trust for the newspaper's
parent McClatchy Co.
The proposed settlement is reasonable and eliminates "the risks of
further litigation," according to a filing jointly submitted by the
courier group and the trust with the U.S. Bankruptcy Court for the
Southern District of New York.
Further litigation would have shifted the trustee's focus, delayed
creditor payments, "and hindered efforts to conclude the claims
process in an expeditious fashion," they said.
About McClatchy Co.
The McClatchy Co. (OTC-MNIQQ) -- https://www.mcclatchy.com/ --
operates 30 media companies in 14 states, providing each of its
communities local journalism in the public interest and advertising
services in a wide array of digital and print formats.
McClatchypublishes iconic local brands including the Miami Herald,
The Kansas City Star, The Sacramento Bee, The Charlotte Observer,
The (Raleigh) News & Observer, and the Fort Worth Star-Telegram.
McClatchy is headquartered in Sacramento, Calif., and listed on the
New York Stock Exchange American under the symbol MNI.
On Feb. 13, 2020, The McClatchy Company and 53 affiliates sought
Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-10418) with
a Plan of Reorganization that will cut $700 million of funded debt
in half.
McClatchy was estimated to have $500 million to $1 billion in
assets and debt of at least $1 billion as of the bankruptcy
filing.
The cases are pending before the Honorable Michael E. Wiles.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as
general bankruptcy counsel; Togut, Segal & Segal LLP as
co-bankruptcy counsel with Skadden; Groom Law Group as special
counsel; FTI Consulting, Inc. as financial advisor; and Evercore
Inc. as investment banker. Kurtzman Carson Consultants LLC is the
claims agent.
MEATHEAD RESTAURANTS: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Meathead Restaurants, LLC
DBA Meatheads Burgers & Fries
444 W. Lake Street, 17th Floor
Chicago, IL 60606
Business Description: Meathead Restaurants, LLC is an American
fast food retailer of hamburgers
and other related menu items.
Chapter 11 Petition Date: April 9, 2021
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 21-04731
Judge: Hon. Benjamin A. Goldgar
Debtor's Counsel: David A. Warfield, Esq.
THOMPSON COBURN LLP
One US Bank Plaza
Suite 2600
Saint Louis, MO 63102
Tel: 314-552-6000
Fax: 314-552-7000
E-mail: dwarfield@thompsoncoburn.com
Total Assets: $6,733,490
Total Liabilities: $8,435,047
The petition was signed by Steve Karfaridis, manager.
The Debtor failed to include a list of its 20 largest unsecured
creditors at the time of the filing.
A copy of the petition is available for free at PacerMonitor.com
at:
https://www.pacermonitor.com/view/RSA7TPY/Meathead_Restaurants_LLC__ilnbke-21-04731__0001.0.pdf?mcid=tGE4TAMA
MEGIDO SERVICE: Wants Until July 18 to Confirm Plan
---------------------------------------------------
Megido Service, Corp., seeks a second extension of its deadline to
confirm a Plan.
On Dec. 8, 2020, the Debtor filed its first motion to extend the
time to confirm a plan and disclosure statement.
On March 8, 2021, the Court entered an order granting the Debtor's
motion to extend the time to confirm a plan of reorganization and
disclosure statement and extending the time due May 19, 2021.
The Debtor requests a second brief extension of the time by which a
Plan of Reorganization should be confirmed for an additional 60
days, through and including July 18, 2021.
According to the Debtor, this second request is not made for the
purposes of delay. The second requested extension of the time
period for confirmation, is necessary due to the fact, that the
time to confirm a plan is set to expire on May 19, 2021.
Furthermore, the Debtor's principal, Edna Calif, passed away on
Jan. 9, 2021, due to the COVID-19 and currently, Gila Kaplan, the
daughter of Edna Calif, is an administrator of the Debtor. To date
the Debtor and Pentagon Federal Credit Union ("PenFed"), the main
Creditor of the case, reached an agreement resolving the PenFed's
claim in its entity. Consequently, the Debtor needs additional
time to draft a Settlement agreement, to obtain a Court approval of
this agreement and further to amend a plan of reorganization with
respect to the terms of a settlement agreement.
Counsel for the Debtor:
Alla Kachan, Esq.
Law Offices of Alla Kachan, P.C.
2799 Coney Island Avenue, 3td Floor
Brooklyn, NY 11235
Tel.: (718) 513-3145
About Megido Service
Megido Service, Corp., sought Chapter 11 protection (Bankr.
E.D.N.Y. Case No. 19-44944) on Aug. 15, 2019, estimating less than
$1 million in both assets and liabilities. The LAW OFFICES OF ALLA
KACHAN, P.C., is the Debtor's counsel.
N-ABLE LLC: Moody's Assigns B1 CFR Following Planned Spin-off
-------------------------------------------------------------
Moody's Investors Service assigned a B1 Corporate Family Rating and
B1-PD Probability of Default rating to N-able, LLC in connection
with the company's planned spin-off from SolarWinds Holdings, Inc.
(B1, review for downgrade). In addition, Moody's assigned a B1
rating to N-able's new senior secured bank credit facilities, and
an SGL-2 Speculative Grade Liquidity Rating. The outlook is
stable.
The senior secured bank credit facilities will consist of a $350
million term loan B due April 2028, and a $60 million revolving
credit facility due April 2026. Proceeds from the term loan B and a
portion of N-able's existing cash will be used to distribute
approximately $400 million to SolarWinds and pay transaction fees
and expenses.
"N-able's B1 rating reflects its leading market position, strong
revenue growth and moderate leverage, offset by modest scale,
spin-off execution risks and the potential credit negative
implications from reputational damage caused by SolarWinds' cyber
incident", said Mariya Moore, Moody's Analyst.
Assignments:
Issuer: N-able, LLC
Corporate Family Rating, Assigned B1
Probability of Default Rating, Assigned B1-PD
Speculative Grade Liquidity Rating, Assigned SGL-2
Senior Secured Term Loan B, Assigned B1 (LGD3)
Senior Secured Revolving Credit Facility, Assigned B1 (LGD3)
Outlook Actions:
Issuer: N-able, LLC
Outlook, Assigned Stable
All ratings are subject to Moody's final review of the
documentation.
RATINGS RATIONALE
The B1 CFR reflects N-able's leading position as a provider of
software solutions for managed service providers (MSPs), with more
than 25,000 MSP partners using the N-able platform to service their
small and medium enterprise (SME) customers. The company's revenue
growth has been strong, in the low teens percentage range over the
past two years, enabled through an acquisition of new MSP partners,
expansion of services to existing partners, growth of MSPs'
customer base and addition of new devices. Moody's expects the
company to continue to benefit from the growth of its addressable
market, supported by the increasing reliance of SMEs on IT service
providers to manage their IT environments. Also supporting the
rating are the company's strong net retention rates, which coupled
with its 100% recurring revenue base provide good revenue
visibility.
The rating is constrained by the company's modest scale and risks
associated with setting up standalone operations. Although the
separation process has advanced substantially, the eventual cost of
building an independent IT infrastructure and staffing positions
could be significantly higher than currently budgeted. Moody's
views the reputational damage to the N-able business caused by the
Sunburst attack (SolarWinds' cyber breach in December 2020), to
have a moderate negative near term impact on the company's
operating performance in the form of higher customer churn, higher
cost of customer acquisition and additional investments in product
security.
Moody's estimates the company's initial leverage at around 4.5x
debt/EBITDA as of 2020, pro forma for expected standalone costs.
Moody's expects the company to increase investments in sales and
product development to accelerate growth and forecasts adjusted
leverage to remain in the low-to-mid 4x range over the next 12
months.
The SGL-2 Speculative Grade Liquidity Rating reflects Moody's
expectation for good liquidity, based on a closing cash balance of
$50 million and an undrawn $60 million revolver. Free cash flow
will be limited due to separation costs in 2021, but is projected
to improve to the mid-teens percentage range of debt in 2022.
Governance considerations include the current majority ownership by
private equity funds and absence of an independent board of
directors. This is partially mitigated by its public company status
and the associated greater level of transparency. Other governance
considerations include the separation and distribution agreement
between N-able and SolarWinds, under which SolarWinds will
indemnify N-able for all liabilities related to the cyber
incident.
The stable outlook reflects Moody's expectation that N-able will
generate positive organic revenue growth in the next 12 months and
will maintain moderate leverage in the low-to-mid 4x range.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the concentrated ownership of N-able and its modest scale, a
ratings upgrade is unlikely in the near term. Ratings could be
upgraded over time if N-able continues to grow organically and
increases in scale, while sustaining leverage below 4x debt/EBITDA
and demonstrating a commitment to conservative financial policies.
Ratings could be downgraded if separation costs and actual
standalone costs are higher than currently anticipated or operating
performance is weaker than projected such that leverage is
sustained above 5x debt/EBITDA or free cash flow to debt is
sustained below 10%. Notwithstanding the separation agreement, the
ratings could be pressured if N-able becomes directly or indirectly
burdened by costs or liabilities related to Sunburst attack.
The B1 rating for N-able's proposed credit facilities reflects a
B1-PD Probability of Default Rating and the company's
covenant-lite, single class debt structure.
The first lien credit facility is expected to contain provisions
for incremental debt capacity up to the greater of $125 million and
100% of pro forma Consolidated EBITDA for the last four quarters,
plus any available General Debt Basket amounts, plus any additional
amounts subject to a First Lien Net Leverage Ratio of 4.5x (pari
passu secured debt). Amounts up to an aggregate outstanding
principal amount of up to the greater of $125 million and 100% of
pro forma Consolidated EBITDA may be incurred with an earlier
maturity date than the initial term loans. Only wholly-owned
domestic subsidiaries must provide guarantees; dividends or
transfers resulting in partial ownership of subsidiary guarantors
could jeopardize guarantees, with no explicit protective provisions
limiting such guarantee releases. The credit agreement permits the
transfer of assets to unrestricted subsidiaries, up to the
carve-out capacities, subject to "blocker" provisions preventing
unrestricted subsidiaries from owning or holding intellectual
property that is material to the business of the company and its
restricted subsidiaries. There are no express protective provisions
prohibiting an up-tiering transaction.
The proposed terms and the final terms of the credit agreement can
be materially different.
Headquartered in Boston, MA, N-able, LLC is a leading provider of
cloud-based software solutions that enable MSPs to serve their SME
end customer. The three core solutions include: remote monitoring
and management (RMM); security and data protection; and business
management. In 2020 the company generated $303 million of revenue.
Following the spin-off, N-able will remain controlled by funds
affiliated with private equity firms Silver Lake and Thoma Bravo.
The principal methodology used in these ratings was Software
Industry published in August 2018.
N-ABLE LLC: S&P Assigns 'B+' ICR on Spin-Off from SolarWinds
------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issuer credit rating to N-able
LLC, a provider of software solutions for managed service providers
(MSPs), and its 'B+' issue-level rating and '3' recovery ratings to
the company's first-lien debt.
The stable outlook reflects S&P's expectation that N-able will
increase revenues in the high-single-digit percent area while
maintaining profitability and generating sufficient cash flow, with
leverage remaining in the 3x area in the next 12 months.
Reliance on small and midsize businesses (SMBs) and potential MSP
partner churn present meaningful business risks, but N-able has
maintained stable operating performance to date through a growing
subscription revenue base. SMBs are increasingly turning to MSPs to
provide core IT functionality and support digital transformations
requiring greater technological aptitude. In turn, MSPs are
partnering with software providers such as N-able to efficiently
deliver services to their customers across on-premise, cloud, or
hybrid environments. N-able has been well positioned to capitalize
on these industry trends, and posted 15% revenue growth in fiscal
year 2020 (ended Dec. 31, 2020), in spite of COVID pandemic related
challenges. Recent demand growth was led by security and data
protection solutions as SMBs require secure and modern remote work
environments.
S&P said, "Nevertheless, we see risks to this market, particularly
related to the highly fragmented MSP marketplace, and fairly high
level of churn in customers as MSPs are acquired or go out of
business. We estimate that N-able needs to grow revenue in the
double digit percentage area with existing partners each year in
order to offset these losses and maintain its current net retention
rate of over 100%. While N-able has built a global base of MSP
partners, it is exposed to volatility among SMBs, which are
typically small companies with less than 1,000 employees, and
therefore could face ineffectiveness in its land-and-expand
strategy. We expect the company to continue to invest in its
competitive position through expanding MSP partnerships as well as
adding new products that will drive usage across its platform."
Increased investment as a stand-alone company will burden
profitability, but highly recurring revenues will support its
sustainable business model. S&P said, "S&P Global Ratings-adjusted
EBITDA margins were about 40% in fiscal year 2020, and we expect
margins to contract to the low-30% area in fiscal 2021. The lower
profitability reflects increased investments, return of variable
expenses scaled back during the pandemic, and public company costs.
In the near term, we expect similar margins as the company incurs
higher costs as a stand-alone business and continues to invest in
research and development (R&D) and international expansion. Despite
lower profitability, N-able will have close to 100% subscription
revenues as it discontinues its legacy programs, and the recurring
nature of the business will provide high visibility. We expect
revenue growth in the high-single-digit percent area in the next
few years as the MSP space expands."
N-able will have meaningful leverage of about low-to-mid 3x EBITDA,
and substantial financial sponsor ownership constrains our
assessment of the firm's financial risk profile. After the
spin-off, Thoma Bravo and Silver Lake will continue to hold
majority ownership stake, with the remainder offered publicly. S&P
said, 'Although we don't discount potential leveraged mergers and
acquisitions (M&A) or shareholder returns, we believe the sponsors
will reduce their stake over the next several years, which in our
view should support a more moderate financial policy. We think it
is unlikely leverage would increase above 5x, with leverage pro
forma for the transaction at 3x and sufficient liquidity to
accommodate higher investment and tuck-in acquisitions as a
stand-alone company."
The cyberattack on SolarWinds poses moderate ongoing litigation and
reputation risk to N-able. In December 2020, SolarWinds announced
that it had been the victim of a cyberattack on its Orion Software
Platform and internal systems. SolarWinds continues to assess
potential financial, legal, and reputational consequences. S&P
said, "Ongoing investigation around the incident makes it difficult
to quantify the ultimate impact on N-able's business, which could
be incurrence of significant expenses or liabilities that we would
view as debt-like. While the company has not identified the breach
in any of N-able's solutions, the incident exposes N-able to
reputation damage and potential claims and litigation that could
severely impair its business. We expect indemnifications will be
put in place in the separation agreement to address any potential
liabilities arising out of the incident, and view the rebranding of
the business from SolarWinds MSP to N-able as part of the
separation to be a potential mitigation to reputation harm. In our
view, barring the discovery of new material information regarding
the incident, these mitigating factors should support the company's
performance and ability to maintain leverage below 5x."
S&P said, "The stable outlook on N-able reflects our expectation
that the company will increase revenues in the high-single-digit
percent area, maintain profitability, and generate $30 million-$60
million of free operating cash flow (FOCF) in the next 12-24
months. We expect its revenue base, which is highly recurring, to
expand as it adds MSP partners and cross-sells to its client
base."
S&P could lower the rating if:
-- N-able suffers from weaker-than-expected revenue growth as the
result of competitive pressures or MSP consolidation, leading to
increased churn, or deterioration in profitability, leading to
leverage sustained above 5x.
-- The company is severely affected by the SolarWinds Sunburst
breach, either through litigation risk or if reputational damage
materially weakens performance.
Although unlikely over the next 12 months due to financial sponsor
ownership, potential challenges with separation from SolarWinds,
and reputation or litigation risk with SolarWinds breach, S&P would
consider an upgrade if:
-- The business maintains robust revenue growth, expands market
share, and improves profitability.
-- Over the next few years, S&P expects Thoma Bravo and Silver
Lake ownership stakes to decline and leverage sustained below 4x.
NATIONAL RIFLE ASSOCIATION: LaPierre Consulted Execs. on Filing
---------------------------------------------------------------
Law360 reports that the leader of the National Rifle Association
testified Wednesday, April 7, 2021, in Texas that he consulted a
three-member group of executives before filing a Chapter 11
petition in January, but he confirmed that the decision to file was
his alone.
During the third day of a trial over whether to dismiss the NRA's
bankruptcy case, Executive Vice President and CEO Wayne LaPierre
said that the special litigation committee created during a Jan. 7,
2021 meeting of the board was consulted before the Chapter 11
petition was submitted in Houston bankruptcy court.
About National Rifle Association
Founded in 1871 in New York, the National Rifle Association of
America is a gun rights advocacy group. The NRA claims to be the
longest-standing civil rights organization and has more than five
million members.
Seeking to move its domicile and principal place of business to
Texas amid lawsuits in New York, the National Rifle Association of
America sought Chapter 11 protection (Bankr. N.D. Tex. Case No.
21-30085) on Jan. 15, 2021. Affiliate Sea Girt LLC simultaneously
sought Chapter 11 protection (Case No. 21-30080).
The NRA was estimated to have assets and liabilities of $100
million to $500 million as of the bankruptcy filing.
Judge Harlin Dewayne Hale oversees the cases.
The Debtors tapped Neligan LLP and Garman Turner Gordon LLP as
their bankruptcy counsel, and Brewer, Attorneys & Counselors as
their special counsel.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors on Feb. 4, 2021. Norton Rose Fulbright US, LLP,
and AlixPartners, LLP, serve as the committee's legal counsel and
financial advisor, respectively.
NATIONAL RIFLE ASSOCIATION: Seeks CRO to Suggest Reforms
--------------------------------------------------------
Steven Church of Bloomberg News reports that Wayne LaPierre,
embattled head of the National Rifle Association, told a federal
judge the gun-rights group is seeking a chief restructuring officer
to help it navigate bankruptcy and possibly suggest reforms.
U.S. Bankruptcy Judge Harlin D. "Cooter" Hale will take LaPierre's
testimony into consideration when deciding whether to appoint a
trustee to run the NRA while it's in bankruptcy, or throw the case
out, as the New York Attorney General has requested.
A committee of unsecured creditors has said in court papers that a
court-appointed restructuring officer would be better than a
trustee who replaces NRA managers.
About National Rifle Association
Founded in 1871 in New York, the National Rifle Association of
America is a gun rights advocacy group. The NRA claims to be the
longest-standing civil rights organization and has more than five
million members.
Seeking to move its domicile and principal place of business to
Texas amid lawsuits in New York, the National Rifle Association of
America sought Chapter 11 protection (Bankr. N.D. Tex. Case No.
21-30085) on Jan. 15, 2021. Affiliate Sea Girt LLC simultaneously
sought Chapter 11 protection (Case No. 21-30080).
The NRA was estimated to have assets and liabilities of $100
million to $500 million as of the bankruptcy filing.
Judge Harlin Dewayne Hale oversees the cases.
The Debtors tapped Neligan LLP and Garman Turner Gordon LLP as
their bankruptcy counsel, and Brewer, Attorneys & Counselors as
their special counsel.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors on Feb. 4, 2021. Norton Rose Fulbright US, LLP,
and AlixPartners, LLP, serve as the committee's legal counsel and
financial advisor, respectively.
NEW SEASONG: Amends Plan; Monthly Rental Hiked to $1,800
--------------------------------------------------------
New Seasong, LLC, submitted an Amended Plan of Reorganization and a
corresponding Disclosure Statement on April 1, 2021.
The Debtor owns a 100% interest in the property located at 925
WillacyCircle, Cedar Hill, Texas ("Property"). The Debtor believes
the current value of the Property is $140,000.
The Debtor has entered into an agreement, subject to Court approval
to rent the Property at a rate of $1,100 per month with Texas
Master Pool Plastering, LLC. On or about Dec. 28, 2020, the Court
required the Debtor to make monthly payments to RJMG in the amount
of $600 commencing on Jan. 1, 2021. The Debtor will also be
required to escrow funds for taxes for the 2021 tax year. The
Debtor is current with the payments required under the Court's
Order. In March 2021, Pools agreed to amend the Lease and increase
the rental payments to $1,800 per month.
Class 4 consists of the Allowed Secured Claim of RJMG Fund, LLC,
which is impaired. On or about Oct. 2, 2019, the Debtor executed
that certain Promissory Note in the original principal amount of
$60,000 in favor of RJMG. The Note was secured by that certain
Deed of Trust dated Oct. 3, 2019, covering certain real property
more fully described in the Deed of Trust, common known as 925
Willacy Circle, Cedar Hill, Texas.
The Note provided the Debtor would make payments of principal and
interest in the amount of $600 per month. The Note would mature on
Nov. 1, 2021. RJMG has filed a Proof of Claim in the amount of
$77,300. The RJMG Allowed Secured Claim 2 will be repaid in full
in 120 equal monthly payments with interest at the rate of 5% per
annum 3 commencing on the Effective Date. RJMG shall retain its
present lien on the Property. Upon payment in full of the Class 4
Claim, RJMG shall release its lien on the Property.
The Current Ownership in Class 5 which is not impaired under the
Plan will be satisfied by retaining her interest in the Debtor.
The Debtor will continue to rent the Property. The rental proceeds
will be used to pay the amount necessary to pay the Allowed Claims
of Class 2 through 4. The Debtor currently has a 5-year lease with
Pools. At the end of the 5-year term, the Debtor believes that
Pools will renew the Lease for another 5 years. If not, it is the
Debtor's intention to find a new tenant for the location.
A full-text copy of the Amended Disclosure Statement dated April 1,
2021, is available at https://bit.ly/3t86eQS from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Eric A. Liepins, Esq.
Eric A. Liepins P.C.
12770 Coit Road, Suite 1100
Dallas, TX 75251
Telephone: (972) 991-5591
Facsimile: (972) 991-5788
About New Seasong
New Seasong LLC is the owner of a piece of real property located at
925 WillacyCircle, Cedar Hill, Texas. It was formed in October
2019 for the purpose of purchasing the Property.
Based in Cedar Hill, Texas, New Seasong sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No.
20-32105) on Aug. 19, 2020, listing under $1 million in both assets
and liabilities. The Debtor is represented by Eric A. Liepins,
P.C.
NEWELL MOWING: Subchapter V Plan to Pay Unsecureds 59.5% of Claims
------------------------------------------------------------------
The Newell Mowing Co., doing business as Green Man Lawn &
Landscape, submitted a Plan of Reorganization for Small Business
Under Chapter V of Chapter 11 dated April 6, 2021.
The Debtor, the Plan Proponent of this Plan of Reorganization under
Subchapter V of Chapter 11 of the Bankruptcy Code, proposes to pay
Holders of Allowed Secured Claims in accordance with the consensual
agreements executed and security interests granted pre-petition,
unless stated otherwise; and proposes to pay Holders of Allowed
Unsecured Claims from Monthly Disposable Income generated
post-confirmation and deposited into the Operating Account within a
60 month period, commencing on the Effective Date.
This Plan provides for 9 Classes of Secured Claims, 2 Classes of
Priority Unsecured Claims, 1 class of Allowed Unsecured Claims, and
1 Class of Equity Interests. The Plan Proponent shall distribute to
Holders of Allowed Unsecured Claims all Available Cash maintained
in the DIP Account at the conclusion of each calendar year, and no
less than – in the approximate amount of $0.59 on the dollar
(59.46%).
Administrative Expense and Priority Tax Claims shall receive
payments either in full on the Effective Date, pursuant to a
written agreement between the Debtor and the Administrative Expense
Claimant, or by an Order of the Bankruptcy Court. The Plan also
provides for the full and final payment of Administrative Expense
and Priority Tax Claims otherwise not classified within any Class.
Class 11 consists of the Allowed Unsecured Claims against the
Debtor. The Plan Proponent estimates that the total sum of Allowed
Unsecured Claims is the amount of $403,604. Holders of Allowed
Unsecured Claims shall receive their Pro-Rata Share of the Monthly
Disposable Income the Plan Proponent realizes for the 3 year period
commencing on the Effective Date up to and through May 31, 2024,
which the Plan Proponent shall deposit into the Plan Payment
Account each and every month for a period of 60 months.
Pursuant to the Monthly Disposable Income, Allowed Unsecured
Claimants shall receive a Pro-Rata Share of no less than $0.59 on
the dollar (59.46%) within 30 days prior to each annual anniversary
of the Effective Date for a period of 5 years, commencing with the
Plan Proponent tendering the 1st annual payment on or before May
31, 2022.
Class 12 consists of the Allowed Equity Interests in the Debtor.
As of the Petition Date, Justin W. Newell was the sole shareholder
and Holder of 100.0% ownership interest in the Debtor. On the
Effective Date of the Plan, the existing Class 12 Holder of Allowed
Equity Interests, Justin W. Newell, shall retain all existing
rights, privileges, and interest in the Debtor.
On or after the Confirmation Date, and no later than the Effective
Date, the Plan Proponent shall open the Plan Payment Account; and,
on the 1st Business Day of each and every month following the
Effective Date, the Debtor shall transfer the sum of $15,558.40
from the Operating Account to the Plan Payment Account for the
benefit of Holders of Allowed Priority Claims, Allowed Secured
Claims and Allowed Unsecured Claims; and maintain the Plan Payment
Account to orderly distribute Plan Payments to Holders of Allowed
Claims.
The Plan Proponent shall fund the Plan using Cash generated from
one, or a combination of such sources, as follows: Post-Petition
Income maintained within the Operating Account; Pursuing Avoidance
Actions and Other Causes of Action; Claims Payable by Third
Parties; and Liquidation of Assets When Necessary.
A full-text copy of the Plan of Reorganization dated April 6, 2021,
is available at https://bit.ly/2Rl6o9n from PacerMonitor.com at no
charge.
Counsel for The Newell Mowing:
BERKEN CLOYES, P.C.
Joshua B. Sheade
1159 Delaware Street
Denver, Colorado 80204
Tel.: (303) 623-4357
Fax: (720) 554-7853
E-mail: joshua@berkencloyes.com
About Newell Mowing
The Newell Mowing Co. filed for Chapter 11 bankruptcy protection
(Bankr. D. Colo. Case No. 20-17988) on Dec. 16, 2020. At the time
of the filing, the Debtor estimated between $100,001 and $500,000
in assets, and between $500,001 and $1 million in liabilities.
Berken Cloyes, P.C., is the Debtor's legal counsel. The Debtor
tapped SL Biggs as its accountant.
NEWS CORP: Moody's Assigns Ba1 CFR on Planned Acquisition
---------------------------------------------------------
Moody's Investors Service assigned to News Corporation ("News Corp
or the Company") a Ba1 Corporate Family Rating, Ba1-PD Probability
of Default Rating, SGL-1 Speculative Grade Liquidity Rating and Ba2
to the Company's new $750 million senior unsecured notes (the
Notes). The outlook is stable.
News Corp is issuing $750 million of senior unsecured notes
maturing 2029. The proceeds will be used for general corporate
purposes which may include acquisitions and working capital.
The Company has also recently announced its intention to acquire
the Houghton Mifflin Harcourt ("HMH") Books & Media segment for
$349 million, Investor's Business Daily ("IBD") for $275 million
and Mortgage Choice (through its REA Group subsidiary) for AUS $244
million (USD $186.5 million). Moody's expect the note proceeds and
existing balance sheet cash will be used to fund these and
potentially other acquisitions.
Assignments:
Issuer: News Corporation
Corporate Family Rating, Assigned Ba1
Probability of Default Rating, Assigned Ba1-PD
Speculative Grade Liquidity Rating, Assigned SGL-1
Senior Unsecured Regular Bond/Debenture, Assigned Ba2 (LGD4)
Outlook Actions:
Issuer: News Corporation
Outlook, Stable
RATINGS RATIONALE
News Corp's Ba1 CFR is supported by a conservative financial
policy, modest financial leverage (projected between 1.75-2.0x,
Moody's adjusted gross debt/EBITDA), and very good liquidity.
Additionally, the company has good scale (over $8 billion in
revenue, Moody's adjusted at year end 2020) and business line
diversity. The company generates multiple revenue streams from 5
distinct operating segments across three major geographies. This
level of diversity provides a fair degree of balance to the
business model, with at least three growth segments, offsetting the
weaker ones. The Company also owns and operates some of the world's
leading brands including the Wall Street Journal, HarperCollins,
and Realtor.com. The strength of these brands and businesses, with
many having leading market positions, helps to defend its market
positions and expand its reach to new digital platforms.
The Company's credit profile is constrained by EBITDA margins in
the mid-teens range, and multiple segments exposed to unfavorable
secular trends, which pressure revenues and profitability. Its
levered video business, Foxtel, is losing linear pay-tv subscribers
and Moody's believe there is little if any equity value
attributable to the investment after close to $2 billion in
write-downs, which approximates the company's initial investment.
In the News Media segment, which accounts for about 24% of total
revenues (for the quarter ended December 31, 2020), Moody's expect
the segment top line to decline by the mid-teens percent with
weakness in print advertising and newspaper circulation. The
segment is also the least profitable, producing low single digit
percent EBITDA margins.
Moody's believes the company is committed to investing into its
growing digital businesses, with a strategic transformation that
includes selling non-performing assets and non-core businesses
while allocating capital to M&A and investments that build its core
growth engines. As management has been executing on this strategy,
Moody's have observed material and favorable changes in the
segmental and revenue mix of the company, with a steady rise in the
contribution of digital subscriptions. At the same time, the EBITDA
contribution from the News Media segment, the most exposed segment,
represents 13% of total EBITDA (for the quarter ended December 31,
2020). Moody's expect this transformation to continue, leading to a
more stable and profitable business model over time. The company
reported very strong operating performance in the first half of the
fiscal year, with a sharp a recovery in nearly all segments of the
business, with strong growth in revenue, EBITDA and free cash
flows. Additionally, Moody's believe the agreements with the major
social media players, including Apple, Facebook, and Google, to
license news content on their platforms, are landmark events that
could transform the economics of not only News Corp's News Media
segment, but the entire industry. These are precedent-setting,
establishing a new and more profitable relationship with the most
dominant digital media platforms in the world.
News Corp is exposed to governance risk, including the closely held
nature of the organization (the Murdoch Family Trust and Rupert
Murdoch collectively control 39.4% through Class B shares),
tolerance for a high dividend payout, potential changes in
leadership upon inevitable succession, history of activist
investors, and event risk with the current strategy to reorder the
portfolio of businesses with a stronger mix of digital media
assets. This will likely entail divesting non-core, weak performing
assets and acquiring new ones with debt-financed M&A, in addition
to making investments in the core segments. Despite the cost and
risk of transacting, the management has a long and steady history
of maintaining a conservative financial policy and very strong
liquidity, with low leverage ratios and significant cash balances.
Management has taken patient, long-term views with respect to
strategic decisions and shareholder cash returns, has maintained
strong cost controls, and a disciplined M&A strategy. Management
targets a 1.5x gross leverage ratio (total debt/EBITDA) and 1.0x
net ratio. Moody's leverage metrics include analytic adjustments
for lease and pension obligations as well as adjustments to
proportionally deconsolidate non-controlling interests, which
Moody's estimate has added up to 1.25x turns of leverage in
historical periods. Moody's believe management has some tolerance
to temporarily exceed their leverage targets for opportunistic M&A,
provided there is a clear path to return to target leverage within
18-24 months. The reported gross and net leverage ratio were inside
management's tolerances as of the last quarter end.
The coronavirus has negatively disrupted some of News Corp's
operations in varying degrees (especially those exposed to print
publishing circulation, advertising revenue, and small businesses).
Business closures (including pubs, clubs and hotels), social
distancing measures, the cancellation of production and sporting
events and related programing, have all put pressure on revenues.
However, despite these challenges and the long-term secular
headwinds in legacy video and News Media segment, the business has
been improving with the slow but steady economic recovery. There
are also fundamental social changes that are driving long-term
growth in many parts of the company's segments including digital
real estate, books, and in digital news subscriptions. In
particular, the company is experiencing a very significant rise in
digital subscribers and related fees as consumers continue to shift
their consumption to digital, over the internet and connected
devices.
News Corp has an SGL-1 Speculative Grade Liquidity rating, which
indicates very good liquidity. The liquidity profile is supported
by significant cash balances that Moody's expect to be sustained
above $1 billion, positive operating cash flow, significant back-up
liquidity with approximately $750 million in revolving credit
facilities that are largely undrawn (excluding subsidiary
facilities), and substantial alternate liquidity with no secured
debt in the capital structure.
The notes will be an obligation of the parent company, and not
guaranteed by operating subsidiaries. The notes will rank equally
in right of payment with all existing and future senior debt,
including the existing revolving credit facility, and rank senior
to all existing and future subordinated debt. The notes will be
subordinate to all existing and future secured debt and
structurally subordinate to all existing and future liabilities of
each the Company's operating subsidiaries. The notes will be
non-callable for 3 years and is subject to repayment upon a change
in control. The senior unsecured notes are rated Ba2 (LGD-4), one
notch below the CFR given the lack of subsidiary guarantees,
subordinating the claim to the more senior payables, lease and
pension obligations at the operating subsidiaries. The instrument
rating reflects the probability of default of the company, as
reflected in the Ba1-PD Probability of Default Rating, and an
average expected family recovery rate of 50% at default.
The stable outlook reflects Moody's expectation that debt, revenue,
and EBITDA will average approximately $2.9 billion, $8.3-$8.7
billion, and $1.3-$1.6 billion, respectively, over the next 12-18
months. Moody's project EBITDA margins rising above mid-teens
percent, producing free cash flows at least $400 million, after
capex (averaging 5%-6% of revenue), borrowing costs (averaging 5%),
and dividends (approximately $160 million). Moody's expect leverage
to be 1.75x-2.0x, and free cash flow to debt to rise over 15%, and
for liquidity to remain very good.
Note: All figures are calculated based on Moody's standard
adjustments, pro forma for pending material transactions
(acquisitions and divestitures), constant currency, and normalized
to proportionally deconsolidate material non-controlling interests
in certain businesses (including Foxtel, REA, and Move). Adjusted
debt includes lease and pension debt, mostly lease obligations.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade:
Maintenance of conservative financial policies targets, modest
leverage and very good liquidity
Sustained growth in digital assets, supported by profitable
execution of transformation strategy
Track record of strong free cash flow generation, with free cash
flow to debt (Moody's adjusted and normalized) sustained above high
single digit percent
Factors that could lead to a downgrade
Gross Debt/EBITDA (Moody's adjusted and normalized) is sustained
above 3.0x, or
FCF/gross debt (Moody's adjusted and normalized) is sustained
below mid-single digit percent
Moody's would also consider a negative rating action if the
financial strategy or policy turned more aggressive, or operating
performance weakened considerably such that the company's market or
financial position implied a weaker credit profile.
The principal methodology used in these ratings was Media Industry
published in June 2017.
News Corporation (Nasdaq: NWS, NWSA; ASX: NWS, NWSLV) is a global,
diversified media and information services company focused on
creating and distributing authoritative and engaging content and
other products and services. The company comprises businesses
across a range of media, including: digital real estate services,
subscription video services in Australia, news and information
services and book publishing. Headquartered in New York, News Corp
operates primarily in the United States, Australia, and the United
Kingdom, and its content and other products and services are
distributed and consumed worldwide. Revenues for the last twelve
months (LTM) ended December 31, 2020 was approximately $8.7 billion
(as reported).
NEWS CORP: S&P Assigns 'BB+' Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issuer credit rating to New
York City-based media company News Corp.
S&P said, "We also assigned a 'BB+' rating and '3' recovery rating
to the company's proposed $750 million senior unsecured notes due
2029. The company plans to use the proceeds from the notes for
general corporate purposes, including funding future acquisitions.
"The stable outlook reflects our expectation that News Corp. will
exhibit steady operating performance with improving EBITDA margins
while pursuing acquisitions that will likely keep leverage at about
1x-2x over the next 12 months."
The 'BB+' issuer credit rating reflects News Corp.'s exposure to
cyclical advertising revenue; the secular decline in print
advertising and readership across the company, including at News
Corp Australia, News UK, and the New York Post; and the risks of
cord-cutting and subscriber churn at the company's Australian
pay-TV business, Foxtel. These risks are partially offset by the
company's growing and highly profitable Digital Real Estate
Services segment, the increasing subscription-based and digital
advertising revenues at Dow Jones, an expanding over the top (OTT)
streaming subscriber base in Australia, its stable Book Publishing
segment, modest leverage for the rating category, and meaningful
annual free cash flow generation.
S&P said, "Growth through acquisitions and organic growth
investments are key priorities for News Corp., though we expect it
will continue to maintain a disciplined financial policy. News
Corp. had modest net leverage of about 1.7x as of Dec. 31, 2020.
This figure is pro forma for the acquisitions announced last month
of Investors Business Daily (IBD) for $275 million, Houghton
Mifflin Harcourt's (HMH's) Books & Media segment for $349 million,
and majority-owned Australian subsidiary REA Group Ltd.'s
acquisition of Mortgage Choice Ltd. for about $188 million. The
acquisitions are expected to close in the fourth quarter of fiscal
2021. We believe News Corp. will continue to invest organically and
through acquisitions to grow its Dow Jones, Book Publishing, and
Digital Real Estate Services segments. Facilitating this will be
the financial flexibility afforded by its free operating cash flow,
which we estimate at over $600 million annually for the next two
years, and its cash balance of over $1.75 billion as of Dec. 31,
2020 (pro forma for its acquisitions and the proposed $750 million
senior unsecured notes issuance). Nevertheless, we expect the
company will pursue a disciplined financial policy, maintaining
leverage in the 1x-2x range over the next 12 months, paying a
modest annual dividend of about $160 million-$165 million on over
$600 million in annual free cash flows, and prioritizing
acquisitions and organic growth investments over share
repurchases."
News Corp. exhibited solid operating performance through the
COVID-19 pandemic. Despite significant declines in print
advertising and elevated subscriber churn at Foxtel's legacy cable
and satellite residential direct-to-home (DTH) service, News Corp.
exhibited solid operating performance through the pandemic. Its
adjusted EBITDA margins improved about 170 basis points (bps) to
13.6% as of the 12 months ended December 2020, and its adjusted net
leverage declined to approximately 1.4x as of Dec. 31, 2020, from
about 1.7x in June 2020 (its fiscal year end) and about 1.8x as of
December 2019. This was driven by growing digital advertising and
subscription revenues across its portfolio and significant
restructuring initiatives, particularly in its News Media and
Subscription Video Services segments, which are facing secular
declines.
The News Media segment is exposed to cyclical advertising revenue
as well as the secular declines in print advertising revenue and
readership. The News Media segment includes regional/national
newspapers under News Corp Australia, News UK, and the New York
Post. They all rely heavily on advertising revenues, which are
highly correlated to GDP growth. Print advertising also faces
secular pressures due to continued declines in readership over the
last decade, which have accelerated during to the COVID-19
pandemic. S&P said, "We expect some moderation in revenue declines
in the latter half of the company's fiscal 2021 and in fiscal 2022
due to improved year-over-year comps, especially as local
businesses reopen following pandemic-driven shutdowns. However, we
believe secular declines will continue to be a headwind for this
segment and will keep restructuring costs elevated as the company
looks to cut costs to offset revenue declines."
Over the last 12 months, News Corp. has pursued significant
restructuring initiatives in the News Media segment. These include
the closure of its Bronx printing plant for the New York Post, and
it also either shut down or transitioned to digital over 100 print
titles in Australia. In addition to its accelerated transition to
digital, the company signed an agreement with Google that allows
Google to utilize news content produced by Dow Jones and the
company's News Media segments in its Google news showcase, enabling
News Corp. to further monetize its news content at healthy margins.
The agreement follows the passage of a law by the Australian
parliament requiring large internet platforms to pay for news
content referenced in their products. S&P believes these
initiatives should allow the News Media segment to moderate losses
and generate positive EBITDA after restructuring costs in fiscal
2022.
The company's Subscription Video Services segment continues to
experience broadcast subscriber churn, though restructuring
initiatives and growth in OTT subscribers should help improve
EBITDA margins. The Subscription Video Services segment faces
secular pressures from cord-cutting as consumers increasingly look
to cut their cable costs and utilize lower-cost or free-to-air
television and broadband to access entertainment content. The churn
rate of News Corp.'s legacy Foxtel cable and satellite residential
DTH business has consistently exceeded 15% and was about 17.5% as
of the quarter ended December 2020. Average revenue per user (ARPU)
stabilized somewhat in fiscal 2021 at about A$80 for the quarter
ended December 2020, but it has declined significantly from about
A$93 in fiscal-year 2015. S&P expects secular declines in the DTH
services to continue to remain elevated over the coming years as
consumers increasingly embrace a growing array of OTT offerings,
though its OTT subscriber growth should help offset secular
headwinds over the longer term. In addition, its cost-reduction
initiatives at Foxtel--including overhead reductions and the
restructure of sports rights costs following recent
negotiations--should help improve its profitability in the near
term.
OTT subscriber growth should help offset revenue pressures at
Foxtel. The expansion of Foxtel's streaming platforms has helped
offset subscriber losses from its DTH offering, albeit at a lower
ARPU. Foxtel leverages its sports and entertainment content rights
through its Kayo sports streaming platform (launched November 2019;
prices start at about A$25 per month), entertainment streaming
service Binge (launched in May 2020; prices start at about A$10 per
month), and Foxtel Now streaming platform (prices start at about
A$25 per month). The Subscription Video Services segment's revenues
have benefited from an increase in the number of paid subscriptions
for its OTT offerings. In addition, its Kayo OTT product, which
focuses on live sports, will likely benefit from Foxtel's minority
shareholder Telstra's decision to discontinue live-streaming NRL
and AFL games on its Live Pass product and withdraw from funding
sports rights directly. Live Pass has over 3 million subscribers
and has negotiated a deal with News Corp. to allow its customers to
switch to Kayo for A$5 per month for the lowest/basic tier for the
first 12 months before their subscription price steps up. In
addition, the company's Binge OTT offering has had good uptake
since its launch in May 2020, with over 431,000 paid subscribers as
of December 2020.
A premium news product, a high-value audience for advertisers, and
growing demand for professional information services support growth
for Dow Jones. Over the years, The Wall Street Journal (part of
Dow Jones) has grown into a global newspaper with over 3.2 million
subscribers, almost 2.5 million of which are digital-only. The
growth in The Wall Street Journal and other Dow Jones publications
underscores the demand for premium content among its target
audience. The Investors Business Daily acquisition further grows
the company's digital subscriber base, provides opportunities for
cross-selling to its existing subscribers, and adds a high-ARPU
subscriber base. Further, Dow Jones has effectively leveraged its
sales force in placing ads through its direct channel, monetizing
the premium placed by advertisers in reaching its subscriber base.
The Dow Jones Professional Information Business is also well
positioned to benefit from increased secular demand for its Risk
and Compliance offerings, such as know-your-customer and
risk-management products. However, it competes with much larger
data and information services companies such as Thomson Reuters
Corp., Moody's Corp., and Dun & Bradstreet Holdings Inc.
The Digital Real Estate Services segment is very profitable and
benefits from a dominant market position in Australia. The
company's REA Group business, which is within the Digital Real
Estate Services segment, maintains a dominant position in the
Australian real estate listing business. Because of continued
strong housing demand and resilient property prices, it has
performed well over the last 12 months despite local shutdowns
caused by the COVID-19 pandemic. In addition, New Corp.'s Move Inc.
business, which owns Realtor.com®, has also had a significant rise
in the demand for its lead generation and referral offerings,
supported by the robust demand for U.S. residential real estate and
low interest rates over the last six to nine months. The Mortgage
Choice Ltd. acquisition provides further growth opportunities for
the REA business beyond its traditional real estate listings and
referrals offerings, where it maintains a dominant position, into
the mortgage brokerage business. The Digital Real Estate Services
segment is also the company's most profitable segment, with EBITDA
margins exceeding 40% for six months ended December 2020. News
Corp. consolidates the segment in its financials, though REA Group
is publicly listed and News Corp. relies on dividends to access the
cash flows generated at REA Group.
S&P said, "We expect News Corp.'s Book Publishing segment to
provide steady profitability and cash flow. Harper Collins is the
No. 2 publisher in the industry, though it is much smaller than its
largest competitor: Penguin Random House. The segment's sales and
profitability increased significantly through 2020 as readers
sheltered in place and their consumption of books--including
e-books and audiobooks--grew. Over half of the company's sales in
this segment came from orders for backlist titles, and the
company's acquisition of HMH Books & Media adds an extensive and
successful backlist library, which we expect will continue to
provide a reliable stream of high margin revenues. We expect the
business' global presence and diverse array of titles to provide it
with stable profitability and cash flow, though there could be some
volatility in a given year, depending on the timing of key title
launches. We also expect the business to continue to grow in
international markets and expand its audio book offerings. The
growing demand for audiobooks and e-books due to COVID-19 provides
it with longer-term growth opportunities. We believe the risks to
the segment's profitability over the next few years include larger
advances to authors that do not result in successful titles and an
inability to renew contracts with its largest distributors at
similar rates, which could increase its operating expenses.
"The stable outlook reflects our expectation that News Corp. will
exhibit steady operating performance with improving EBITDA margins
while pursuing acquisitions that will likely keep leverage at about
1x-2x over the next 12 months.
"We could lower the rating if we expect News Corp.'s leverage to
increase above 2.5x. This could be due to significant leveraging
acquisitions or operating challenges, such as acceleration of the
secular declines in its News Media and Subscription Video Services
businesses, that lead to increased subscriber churn and declining
ARPU and advertising revenue. We could also revise our view of the
company's business and tighten our downside leverage threshold for
the rating if its business performance weakens due to the secular
challenges facing the media sector."
An upgrade is unlikely over the next 12 months. However, S&P could
upgrade News Corp. if it expects it to increase the diversity of
its revenue through a combination of acquisitions and organic
growth while continuing to expand its core segments. In addition,
we would look for a reduction in its exposure to the segments in
secular decline, either through a sale or a turnaround in these
businesses, such that the company generates consistently increasing
EBITDA margins and cash flows while maintaining overall leverage of
less than 2x.
NTH SOLUTIONS: Seeks to Hire Maschmeyer Karalis as Legal Counsel
----------------------------------------------------------------
Nth Solutions, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Pennsylvania to hire Maschmeyer
Karalis, PC as its legal counsel.
The firm's services include:
a. advising the Debtor of its rights, powers and duties in the
continued operation and management of its assets;
b. assisting in the negotiation and documentation of the
Debtor's use of cash collateral, debtor-in-possession financing,
debt restructuring and related transactions;
c. reviewing the nature and validity of agreements relating to
the Debtor's business;
d. reviewing the nature and validity of liens, if any,
asserted against the Debtor and advising the Debtor as to the
enforceability of such liens;
e. advising the Debtor concerning the actions it might take to
collect and recover property for the benefit of its estate;
f. preparing legal papers;
g. advising the Debtors in connection with the formulation,
negotiation and promulgation of a plan of reorganization and
related documents; and
h. other legal services necessary to administer the Debtor's
Chapter 11 case.
Maschmeyer Karalis will be paid at these rates:
Shareholders $530 per hour
Associates $315 - $445 per hour
Paralegals $130 per hour
Prior to the filing of its case, the Debtor paid Maschmeyer Karalis
the sum of $10,000 as retainer. The Debtor will also reimburse the
firm for out-of-pocket expenses incurred.
Paul Maschmeyer, Esq., shareholder of Maschmeyer Karalis, disclosed
in a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
Maschmeyer Karalis can be reached at:
Paul B. Maschmeyer, Esq.
Maschmeyer Karalis PC
1900 Spruce Street
Philadelphia, PA 19103
Tel: (215) 546-4500
Fax: (215) 985-4175
About Nth Solutions
Nth Solutions, LLC -- https://nth-solutions.com/ -- operates a
facility located at 15 East Uwchlan Avenue in Exton, Pa., where it
manufactures electronic and mechanical precision devices. In
addition to its own product line, Nth Solutions also works with its
clients using a proprietary market-driven methodology in order to
produce additional "state-of-the-art" products.
Nth Solutions sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Pa. Case No. 21-10782) on March 26, 2021. In the
petition signed by Susan Springsteen, managing partner and member,
the Debtor was estimated to have assets of less than $50,000 and
liabilities of $1 million to $10 million. Judge Eric L. Frank
oversees the case. Maschmeyer Karalis P.C. represents the Debtor as
counsel.
OECONNECTION LLC: S&P Affirms 'B-' ICR on Debt-Funded Acquisition
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
OEConnection LLC. At the same time, S&P affirmed its 'B-' issue
rating on the company's first-lien credit facility, and 'CCC' issue
rating on the company's second-lien credit facility.
S&P assigned a 'B-' rating to the company's planned $75 million
first-lien delayed-draw term loan.
S&P said, "The stable outlook reflects our expectation that
OEConnection will support its debt burden with positive free cash
flow generation. While starting leverage is elevated, we expect
earnings growth to support deleveraging over the next 12 months."
OEConnection LLC plans to raise $150 million of first-lien debt
(half of which will fund an acquisition and half as a delayed-draw
term loan earmarked for other acquisitions).
S&P said, "We expect OEConnection's highly recurring revenues and
technology penetration to support growth over the next year.
Despite the negative pressures original equipment manufacturer
(OEM) and dealership customers experienced during 2020,
OEConnection was able to expand its revenues, earnings, and cash
flow year-over-year. The company grew organic revenues 2.5%, as
robust growth in North American business more than offset declines
in Europe. Its software solutions are sticky with customers (94%
gross revenue retention rate in 2020) as they facilitate a network
effect for original equipment auto parts between dealerships,
repair facilities, and OEMs. Growth is supported by growing into
customers who historically did not use tech-enabled solutions for
parts procurement and by adding on services with customers--such as
business intelligence software. Growth momentum picked up toward
the end of 2020, with fourth-quarter revenues up 7% year-over-year.
We expect high-single-digit percentage revenue growth in 2021 as
the company further grows its subscription solutions with new and
existing customers and as transaction revenues in Europe improve as
COVID-19 mobility restrictions ease."
OEConnection's de-leveraging will be from organic and inorganic
earnings growth. Pro forma for the $150 million debt-funded
acquisition, S&P Global Ratings-adjusted leverage is 9.5x. While
leverage is high, S&P believes the company can de-lever from
continued earnings growth. The company has a recent history of
levering up, and then de-levering over time. In 2019, its leverage
pro forma for its sponsor-to-sponsor sale was 10x. While the
company made acquisitions since then, it was still able to de-lever
towards the high 8x range by the end of 2020.
In 2021 OEConnection's management will increase sales resources to
support new offerings that help further penetrate its tech-enabled
solutions to dealerships and OEMs. S&P expects S&P Global
Ratings-adjusted margins to remain stagnant at around the high-30%
area as the company goes through this investment period.
The company's revenue is still modest compared to that of other
software peers, and so OEConnection will likely continue pursuing
acquisitions to improve its scale and product scope. Since S&P
initially assigned the ratings in 2017, OEConnection has acquired
four acquisitions (inclusive of its soon-to-close acquisition of
Project Horizon) that have added about $80 million to annual
revenues. Acquisitions have helped the company gain more OEM/dealer
relationships outside its core customer base of Ford and GM (which
make up 60% of annual revenue) and have added new products the
company can offer. Project Horizon expands OEConnection's offering
to include retail inventory management for OEMs.
S&P said, "The stable outlook reflects our expectation that
OEConnection LLC will support its debt burden with continued
earnings growth, stable free cash flow generation, and full
integration of the Project Horizon, Summit Consulting, and NuGen IT
acquisitions over the next year. We expect the company to make
investments to its sales force and offerings, which help fuel
continued earnings growth for de-leveraging.
"We could lower the ratings if OEConnection's EBITDA expansion is
weaker-than-expected because of increased competition from
aftermarket parts, greater-than-expected dealer churn, or
diminished ability to implement price increases. Annual free
operating cash flow generation falling toward breakeven levels with
no credible path for de-leveraging could lead to a downgrade as
this could lead us to believe the capital structure is
unsustainable.
"Any ratings upside is unlikely over the next 12 months because of
the company's elevated leverage. We could raise the rating if the
company continues its revenue growth trajectory, driven by price
increases and dealer network expansion, such that leverage is below
7x on a sustained basis."
OLEMA PHARMACEUTICALS: Dr. Frank McCormick Quits as Director
------------------------------------------------------------
Frank McCormick Ph.D., F.R.S., D.Sc. (Hon), a director of Olema
Pharmaceuticals, Inc., resigned as a member of the Company's Board
of Directors effective April 5, 2021.
Dr. McCormick's resignation was not the result of any disagreement
or dispute with the Company. In connection with the resignation,
Dr. McCormick and the Company entered into a consulting agreement,
dated April 5, 2021, pursuant to which Dr. McCormick will provide
advisory services on scientific matters to the Company.
On April 5, 2021, upon the recommendation of the Nominating and
Corporate Governance Committee of the Board, the Board appointed Yi
Larson as a Class III director to fill the vacancy left by Dr.
McCormick's resignation, which appointment became effective
immediately. Ms. Larson's term will expire, along with the terms
of the other Class III directors, at the Company's annual meeting
of stockholders in 2023. The Board also appointed Ms. Larson to
serve as a member of the Nominating Committee.
There are no arrangements or understandings between Ms. Larson and
any other persons pursuant to which she was selected as a director.
The Board has determined that Ms. Larson qualifies as an
independent director under the independence requirements set forth
under Rule 5605(a)(2) of the Nasdaq Rules and listing standards.
Additionally, there are no transactions involving the Company and
Ms. Larson that the Company would be required to report pursuant to
Item 404(a) of Regulation S-K.
In connection with her appointment to the Board and pursuant to the
Company's non-employee director compensation policy as currently in
effect, Ms. Larson received initial equity awards as follows: (x) a
nonstatutory stock option to purchase 21,520 shares of the
Company's common stock and (y) a nonstatutory stock option to
purchase 3,773 shares of the Company's common stock. The Initial
Grant will vest in a series of 36 successive equal monthly
installments over the three-year period measured from the date of
grant, subject to Ms. Larson's continuous service through each
applicable vesting date. The Partial Year Grant will vest in full
on the date of the Company's 2021 annual meeting of stockholders,
subject to Ms. Larson's continuous service through such date. Each
grant is subject to the terms and conditions of the Company's 2020
Equity Incentive Plan and its related agreements.
Pursuant to the Company's non-employee director compensation
policy, Ms. Larson will also be entitled to receive an annual cash
retainer of $40,000, additional annual cash retainers for service
on a Board committee (including $5,000 for service on the
Nominating Committee), and an annual equity award of a nonstatutory
stock option to purchase 21,520 shares of the Company's common
stock.
The Company has also entered into its standard form of
indemnification agreement with Ms. Larson.
About Olema
San Francisco, California-based Olema Pharmaceuticals, Inc. --
https://www.olemapharma.com -- is a clinical-stage
biopharmaceutical company focused on the discovery, development and
commercialization of next generation targeted therapies for women's
cancers.
Olema reported a net loss attributable to common stockholders of
$23.99 million for the year ended Dec. 31, 2020, compared to a net
loss attributable to common stockholders of $4.32 million for the
year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$342.72 million in total assets, $4.58 million in total
liabilities, and $338.14 million in total stockholders' equity.
OLEMA PHARMACEUTICALS: Reports $24 Million Net Loss for 2020
------------------------------------------------------------
Olema Pharmaceuticals, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss
attributable to common stockholders of $23.99 million for the year
ended Dec. 31, 2020, compared to a net loss attributable to common
stockholders of $4.32 million for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $342.72 million in total
assets, $4.58 million in total liabilities, and $338.14 million in
total stockholders' equity.
The Company had $338.5 million of cash and cash equivalents at Dec.
31, 2020, which management believes is sufficient to fund the
Company's operating expenses and capital expenditure requirements
through the end of 2022.
Olema said, "The extent of the impact of the COVID-19 pandemic on
the Company's business, operations and development timelines and
plans remains uncertain, and will depend on certain developments,
including the duration of the outbreak and its impact on the
Company's development activities, planned clinical trial
enrollment, future trial sites, CROs, third-party manufacturers,
and other third parties with whom the Company does business, as
well as its impact on regulatory authorities and the Company's key
scientific and management personnel. During 2020, although the
Company modified its operations and practices due to the COVID-19
pandemic and to comply with federal, state and local requirements,
its business, operations and development timelines were not
material adversely affected. However, the extent to which the
COVID-19 pandemic may affect the Company's business, operations and
development timelines and plans in the future, including the
resulting impact on its expenditures and capital needs, remains
uncertain."
The Company has incurred net losses since inception, and it expects
to continue to incur net losses for the foreseeable future. The
Company expects to continue to incur increased expenses and
operating losses for the foreseeable future as it continues its
research and development efforts and seek to obtain regulatory
approval for OP-1250. In addition, the Company may be unable to
continue as a going concern over the long term.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1750284/000155837021003141/tmb-20201231x10k.htm#Item1Business_656638
About Olema
San Francisco, California-based Olema Pharmaceuticals, Inc. --
https://www.olemapharma.com -- is a clinical-stage
biopharmaceutical company focused on the discovery, development and
commercialization of next generation targeted therapies for women's
cancers.
OLIN CORP: S&P Upgrades ICR to 'BB', Outlook Stable
---------------------------------------------------
S&P Global Ratings raised the issuer credit rating on Olin Corp. to
'BB' from 'BB-'. The outlook is stable. In addition, S&P raised all
issue-level ratings on the company's debt by one notch. The
recovery ratings on the company's debt are unchanged.
S&P said, "The stable outlook reflects our expectation that the
significant improvement in cash flows and debt levels will lead to
a material improvement in weighted-average credit measures, such
that the company is able to maintain funds for operations (FFO) to
debt in the 12%-20% range.
"The rating action follows our updated forecast in which we expect
a significant improvement in 2021 EBITDA. Olin pre-announced 2021
first-quarter EBITDA will be in the $475 million to $500 million
range, which is up significantly from both first-quarter 2020
levels (around $125 million) and sequentially from fourth-quarter
2020 levels (around $250 million). The key drivers behind the
substantial improvement were the company's relatively new strategy
to focus on maximizing the Electrochemical Unit (ECU) value by
matching output to demand, as opposed to chasing volumes at the
expense of price. We believe this momentum will carry into the
second quarter, further supported by improving chlorine prices and
a recovery in caustic prices from cyclical troughs. As a result of
these factors, we now expect 2021 EBITDA will exceed previous peak
2018 levels, which was roughly $1.25 billion.
"As a result of the improved EBITDA and the company's stated
financial policies, we expect a material reduction in debt levels.
Based on public statements in which the company has stated that its
number one priority for cash flow generation is debt reduction, we
would expect a meaningful deleveraging in 2021. As a result of the
likely EBITDA improvement and debt reduction, we expect a step
change in credit measures from weak 2020 year-end levels, when FFO
to debt was around 7% and debt to EBITDA approached 8x. For the
current rating, we would expect FFO to debt in the 12%-20% range on
a weighted-average basis.
"Our assessment of Olin's business risk reflects its leading global
market positions in many of its segments as well as its status as
the company with the largest chlorine production capacity. Olin is
the largest global producer of membrane caustic soda and
chlorinated organics, and the No. 1 global supplier of epoxy
materials. The company also benefits from its position at the lower
end of the cost curve for some of its raw materials, particularly
electricity, which it usually purchases from natural gas or
hydroelectric sources. We expect U.S.-based chlor-alkali to have a
sustained low-cost advantage, particularly given our expectation
that natural gas prices will remain in the $2.50-$2.75 per million
Btus (mmBtu) range for the next two years. Despite its weakness in
2019-2020, we view the chlor-alkali industry's medium- to long-term
fundamentals as favorable and expect increasing demand to far
outpace supply additions over the next several years. We believe
the current caustic prices are not sufficient to support additional
supply additions." Even if prices improve materially, building a
new greenfield facility would take three to four years to complete.
Olin's advantages are partially offset by its major dependence on
the highly cyclical end markets served by the chlor-alkali industry
for most of its earnings and fluctuation in its raw material costs.
Caustic soda is a key input in the pulp and paper market, which is
in structural decline. Additionally, alumina consumption is a key
driver of caustic demand and is heavily tied to the cyclical
automotive market.
Growth in the global housing market and increased industrial
manufacturing production are the primary drivers of demand for
Olin's chlorine and caustic soda products, while it primarily sells
its epoxy products in the coatings, adhesives, and electronics end
markets. The company has increased its downstream chlorine
applications and reduced its proportion of merchant chlorine and
merchant caustic soda sales, which has helped to reduce its high
freight costs. S&P said, "We believe the Winchester ammunition
segment will be more stable than it has been in years past,
particularly given the new Lake City contract the company was
awarded in late 2020, which helps balance this segment's exposure
among commercial and military and law enforcement. We do however
note that the commercial part of this segment will remain
susceptible to potential future gun legislation, which could
depress earnings."
S&P said, "The stable outlook reflects our expectation that Olin
will see a substantial increase in 2021 EBITDA compared to 2020,
driven by the continued implementation of Olin's new pricing
strategy and a rebound in the global macroeconomic environment.
While credit measures at year-end were weak for the rating, we
expect a significant improvement once the company reports
first-half results, as it is coping with a very weak first half of
2020. More specifically, we now expect 2021 EBITDA will exceed
previous peak 2018 levels, which was roughly $1.25 billion. Based
on the company's stated financial policies and the expected
significant cash flow improvement, we expect a step-change
improvement in 2021 credit measures. For the current rating, we
expect the company to maintain FFO to debt in the 12%-20% range.
The presence of activist investor, Sachem Head Capital Management
(which holds a 9.4% stake in Olin as of December 2020), does impart
some unpredictability into future financial policy decisions.
However, to date Olin's financial policies have remained
conservative and we have not assumed a shift in the company's
financial policies going forward.
"We could lower the rating by one notch within the next 12 months
if key product prices such as chlorine, caustic soda, or epoxy
significantly decline, which could happen if the U.S. housing
market and industrial production are much weaker than we expect. We
could also consider a downgrade if the company's pricing strategy
is not successful for an extended period of time, or a more
competitive market led to a material decline in prices.
Specifically, we could consider a lower rating if revenues were
moderately weaker than we project, combined with at least a
500-basis-point drop in EBITDA margins, causing weighted-average
pro forma FFO to debt to remain around 10%, with no prospects for
improvement. We could also consider a lower rating if the company
does not maintain financial policies that we consider commensurate
with the current rating, including pursuing large debt-funded
growth initiatives or shareholder rewards.
"We could upgrade Olin within the next 12 months if caustic soda,
chlorine, and epoxy prices increase more rapidly than we currently
project, resulting in revenues 5% higher and EBITDA margins at
least 200 basis points greater than our base-case expectation. We
could also raise the rating if the company generates free cash flow
faster than we project in our base-case scenario and it is
prioritized toward debt repayment, resulting in lower debt levels
and significantly better leverage measures. To consider raising the
rating, we would expect FFO to debt to improve to and remain in the
20%-30% range. Of equal importance, we would need to gain clarity
that the company's financial policies would remain supportive of
maintaining credit metrics that we consider to be appropriate for
the rating."
OMNIQ CORP: Gets $1.1M Purchase Order for Data Collection Solutions
-------------------------------------------------------------------
OMNIQ Corp has received an approximately $1.1 million purchase
agreement from a leading global specialty apparel retailer, which
generates over $3 billion in annual revenue. The agreement calls
for mobile computerized IoT equipment as well as distribution
center solutions to support their e-commerce initiatives and
operations.
OMINQ's customer has more than 750 stores across the United States,
Canada, Europe, Asia and the Middle East.
OMNIQ's suite of supply chain mobility solutions include advanced
mobile technologies that are transforming the way businesses
operate by automating the process and eliminating manual and
paper-based processes that cause delays in operation and losses.
OMNIQ's Solutions provide the tracking all the IoT devices,
managing applications and content, all while keeping devices and
data, safe and secured. The systems provide a more "contactless"
approach to the customer's retail and logistics operations, and
will be integrated with the corporate automated services.
"I am satisfied with the 2021 momentum with this $1.1 million
contract we achieved a record of over $28 million in new orders
generated since January 1st," commented Shai Lustgarten, CEO of
OMNIQ. "We're pleased to supply this leading retailer with OMNIQ's
supply chain solutions to generate better efficiencies, service,
and operations."
About omniQ Corp.
Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) --
http://www.omniq.com-- provides computerized and machine vision
image processing solutions that use patented and proprietary AI
technology to deliver data collection, real time surveillance and
monitoring for supply chain management, homeland security, public
safety, traffic & parking management and access control
applications. The technology and services provided by the Company
help clients move people, assets and data safely and securely
through airports, warehouses, schools, national borders, and many
other applications and environments.
Omniq Corp. reported a net loss attributable to common stockholders
of $11.31 million for the year ended Dec. 31, 2020, compared to a
net loss attributable to common stockholders of $5.31 million for
the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$38.66 million in total assets, $43.70 million in total
liabilities, and a total stockholders' deficit of $5.04 million.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2019, issued a "going concern" qualification in its report
dated March 31, 2021, citing that the Company has a deficit in
stockholders' equity, and has sustained recurring losses from
operations. This raises substantial doubt about the Company's
ability to continue as a going concern.
OUTFRONT MEDIA: S&P Affirms 'B+' ICR, Outlook Negative
------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on
Outfront Media Inc.
The negative outlook reflects the uncertainty surrounding the
recovery from the coronavirus pandemic and the risk that structural
changes in public transit ridership could keep Outfront's leverage
above 6.5x.
S&P said, "We expect the outdoor advertising industry to recover to
about 90% of 2019 revenue levels in 2021 and return to pre-pandemic
levels in 2022. We now forecast that real U.S. GDP will increase
6.2% in 2021, with out-of-home activity increasing sharply in the
second half of the year. Outdoor advertising is highly correlated
with consumer confidence and expectations for spending, which
should be aided by the recent stimulus. We believe the overall
outdoor advertising industry will grow 8.9% in 2021 and 10.9% in
2022. Outfront derives most of its billboard revenue from large
markets, where measures to combat the coronavirus pandemic have
been stricter. As such, Outfront's billboard revenue declined more
than small to mid-market peers in 2020, but we expect its billboard
revenue growth to outpace the industry in 2021."
The recovery in transit-related advertising will continue to lag
the rest of the outdoor advertising industry. About 15% of
Outfront's pre-pandemic U.S. revenue comes from the New York
Metropolitan Transit Authority (MTA), and the company is in the
middle of a 10-year contract it signed in fourth-quarter 2017. It
also has transit contracts in Boston, the San Francisco Bay Area,
and Washington D.C. In total, transit revenue accounted for nearly
a third of pre-pandemic revenue. S&P said, "Due to widespread
working from home and people choosing to avoid public transit due
to safety concerns, Outfront's transit revenue declined more
severely than its billboard revenue in 2020, and we expect it to
remain weak until robust transit ridership returns. While we expect
widespread vaccination by sometime in the third quarter, it is
unclear how quickly commuters will return to the office and whether
they will feel comfortable taking public transportation. While we
expect transit revenue can return to 2019 levels without ridership
returning to 100% of pre-pandemic levels, a significant structural
change in commuter behavior can significantly affect Outfront's
future revenue. We expect transit revenue will only recover to
roughly 60% of 2019 levels in 2021 and 85% of 2019 levels in
2022."
S&P said, "We expect Outfront's leverage will remain above 6.5x
until late 2022. Outfront's adjusted leverage was 7.3x at the end
of 2020, and we expect leverage to remain elevated at roughly 7x in
2021. Our leverage metric adjusts for leases and lease-like
contracts, which somewhat smooths the spike in leverage in 2020. We
previously expected the company's leverage to decline back below
the 6.5x area in 2021; however, with the delay in the expected
recovery of transit revenue, we do not expect this to occur until
2022 at the earliest. If we expect transit revenue to remain anemic
through 2022 and beyond, leverage could remain above 6.5x and we
could lower the issuer credit rating.
"Outfront's MTA deployment spending will cause cash flow to remain
negative until 2023. While the company reduced net deployment
spending related to its MTA contract in 2020, it mainly deferred
the cash flow impact from 2020 into 2021 and 2022. We still believe
this deployment spending, which is related to converting static
displays to digital displays, provides long-term upside because the
company can charge higher rates for digital displays than static
billboards. But this upside is now somewhat tempered by the risk
that ridership may not return to pre-pandemic levels. Deployment
spending of $125 million in 2021 and increase to pre-pandemic
levels in 2022 will cause a reported free operating cash flow
deficit of over $100 million in 2021 and roughly $20 million in
2022. Including acquisitions, debt repayment, and dividends, we
expect total cash burn to be roughly $260 million-$280 million in
2021 and $160 million-$180 million in 2022." The company ended 2020
with $710 million in cash on the balance sheet, coupled with an
undrawn $500 million revolving credit facility, which provides more
than enough liquidity to fund these deficits.
The negative outlook reflects the uncertainty surrounding the
recovery from the coronavirus pandemic and the risk that structural
changes in public transit ridership could keep Outfront's leverage
above 6.5x.
S&P said, "We could lower our rating on Outfront if we expect its
leverage to remain above 6.5x post-pandemic. This could occur if
public transit ridership does not show signs of material
improvement in the second half of 2021 such that we believe
Outfront's transit revenue will never recover to pre-pandemic
levels.
"We could revise our outlook on Outfront to stable if we expect its
leverage to decline and remain below 6.5x over the next 12 months.
This could occur if we see evidence that U.S. population traffic
statistics are returning to within 70% of pre-pandemic levels."
PACIFIC DENTAL: S&P Assigns 'B' ICR on Debt Refinancing
-------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to dental
support organization (DSO) Pacific Dental Services LLC. S&P
assigned its 'B' issue-level rating and '3' recovery rating to the
company's senior secured debt, indicating its expectations for
50%-70% (rounded estimate: 55%) recovery in the event of a
default.
S&P's stable outlook reflects our expectation for revenue growth in
the high-teens to low-20 percent range, driven partly by growth at
maturing practices and resulting in leverage below 4x in
2021-2022.
S&P said, "Our rating reflects the company's leading position in
the DSO space and adjusted leverage below 5x. The company has a
narrow business focus in the highly competitive DSO market, which
we view as fragmented and having low barriers to entry. Offsetting
this weakness is the company's leading position in the space with
816 offices in 24 states, its limited reliance on government
payors, and its long operating history since its founding in 1994.
We expect the company's leverage to be in the mid-4x range in 2021,
which is lower than that of all the rated DSO peers. We also expect
the company to reach a large enough scale by 2022 to be able to
fund all or most of its annual de novo investment with internally
generated cash flow.
"We expect the company to continue pursuing a de novo growth
strategy to complement its organic growth, but don't project any
acquisitions over the next few years. Pacific Dental has
successfully executed on its growth strategy over time, though we
believe its rapid pace of expansion--coupled with the upfront
investment and several months of run losses its new practices
require before becoming profitable--introduces additional risks. To
mitigate these risks, the company is now focusing on achieving
optimal density in its existing markets rather than expanding into
new geographies, which should help the new offices achieve
profitability faster.
"We project the company's adjusted EBITDA margins will remain in
the 13%-14% range over the next several years despite its rapid
growth, reflecting continued EBITDA pressure from the newly opened
practices. At the same time, we believe the company has the ability
to scale back its new growth investments if necessary--for example,
in response to an economic downturn or an inability to identify
appropriate locations." As evidence of this, the company reduced
the pace of new offices openings in 2020 in response to the
pandemic and as a result managed to preserve EBITDA margin and even
grow it slightly.
The company's joint venture structure with affiliated practices
helps align interests with dentists but requires higher cash
distributions. The company has an owner-dentist model that aligns
the interest of the dentists with the company, resulting in a
strong owner dentist retention. The joint venture structure allows
the company to share the de novo costs with the partnering
dentists, resulting in less reliance on outside debt, compared to
other rated dental support organizations that do not use this
ownership structure. However, this structure also results in higher
cash distributions to non-controlling interest shareholders,
pressuring the company's cash flow generation.
The pandemic weakened the business, especially in the second
quarter of 2020, but performance has improved. Although the
company's business was significantly affected by the pandemic in
the second quarter of 2020, with about a 25% decline year over
year, its revenue growth recovered to 13% in the third quarter and
6% in the fourth. Also, the 25% revenue decline in the second
quarter of 2020 was less severe than for all the other rated DSOs,
many of which experienced at least a 40% decline. Pacific Dental
also managed to slightly grow adjusted EBITDA margin in 2020
through reduced headcount and lower new investment.
The company's management and governance structure is a risk but is
consistent with peers'. Pacific Dental is majority-owned by Stephen
Thorne, who owns about 65% of the company. He is also the founder
and CEO of the company. S&P believes there are risks associated
with family-controlled business, including the board's lack of
independence and the potential that it may favor the majority
shareholders to the detriment of other stakeholders.
S&P said, "We believe the risks of this closely held ownership
structure are somewhat mitigated by the company's extensive 27-year
operating history, its experienced and well-established management
team--which includes 28 regional leadership teams--and its
owner-dentist model with 700 owner-dentists. Furthermore, the
company has a formal succession plan in place should Mr. Thorne
exit the company. Given these factors, we believe its management
and governance is consistent with that of its peers.
"Our stable outlook reflects our expectation for revenue growth in
the high-teens to low-20 percent range, driven by growth at
maturing practices complemented by the addition of new offices,
adjusted EBITDA margin sustained between 13% and 14%, adjusted
leverage in the mid-4x range, and discretionary cash flow deficits
of about $15 million-$20 million (after funding all capital
expenditures [capex], de novo expenditures, and non-controlling
interest and tax distributions, but before proceeds from capital
leases) in 2021.
"We could consider a downgrade if the company adopts a much more
aggressive expansion strategy, resulting in a free operating cash
flow (FOCF) to debt ratio sustained at 2.5% or below (FOCF is
calculated as free operating cash flow after non-controlling
interest and tax distributions, but before de novo capital
expenditures). We believe in this scenario, leverage is likely to
increase and be sustained materially above 5x.
"We could consider an upgrade if the company continues to grow and
its cash flow generation improves such that it is able to largely
cover its de novo spending, resulting in only modest need for
external debt funding. We believe this scenario would be consistent
with an adjusted FOCF/debt ratio firmly maintained above 6% (FOCF
is calculated as in the upside scenario) and leverage sustained
comfortably below 5x."
PATRICIAN HOTEL: Wants Plan Exclusivity Extended Thru May 31
------------------------------------------------------------
Patrician Hotel, LLC and its affiliates ask the U.S. Bankruptcy
Court for the Southern District of Florida, Miami Division to
extend by 60 days the Debtors' exclusive periods to file a plan and
disclosure statement through and including May 31, 2021, and to
solicit acceptances of a plan through and including July 30, 2021.
When the Debtors filed their Objection for the claims filed by Blue
Tide Properties, LLC, All Seasons Condominium Associations, Inc.,
and to other three cases, both the Association and the Blue Tide
Group responded to the Objections. In addition, the Association
filed a motion seeking adequate protection that is being carried
with the claims objections.
The Court ruled in favor of the Debtors with regard to the Blue
Tide Objection. With regard to the issues with the Association, the
parties agreed to an interim adequate protection amount that the
Debtors are paying monthly. The Debtors and the Association
continue to discuss a final resolution of the amounts due to the
Association that would be paid out of a sale of the Debtor's
units.
Additionally, as the Court heard at the hearings on March 10, there
is a buyer interested in purchasing the Debtors' units as well as
other units in the building. The Debtors have negotiated the terms
of a contract that have now been agreed to and finalized and expect
to present the same to the Court in the very near future.
The Court should also be aware that undersigned counsel has opened
his own law firm effective April 1 and moved into new office space.
Counsel will be filing the appropriate papers to seek substitution
and retention of the new firm on behalf of the Debtors within the
next several days. The disruption from moving has set counsel back
a few days, although counsel continued to speak with the attorneys
for the Association and the buyer as was possible in order to
finalize the terms of the sale contract and attempt to reach a
resolution of the issues with the Association.
The Debtors, after first attempting to negotiate a sale of the
entire building, have prosecuted the major remaining issues in this
case towards a resolution and received a favorable ruling on one of
those issues. While the Debtors remain hopeful that a sale of any
or all units in the building would resolve the remaining issues,
the Debtors have nonetheless attempted to move the remaining issues
forward and have been successful in locating a buyer who is
interested in purchasing the Debtors units.
Morgan Reed MI2, LLC, a secured creditor in this case who holds
mortgages against several of the Debtors' units, has indicated it
does not have any opposition to the extension requested herein.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3fTEjjN from PacerMonitor.com.
About Patrician Hotel LLC
Based in Miami Beach, Fla., Patrician Hotel, LLC and three
affiliates filed voluntary petitions under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 19-25290) on
November 14, 2019, listing under $1 million in both assets and
liabilities.
Judge Robert A. Mark oversees the case.
Robert F. Reynolds, Esq. at Slatkin & Reynolds, P.A., represents
the Debtor as counsel. The Debtors tapped DWNTWN Realty Advisors,
LLC, as their real estate broker.
PAVEROCK INC: Seeks to Extend Plan Exclusivity Thru May 31
----------------------------------------------------------
Debtor Paverock, Inc. requests the U.S. Bankruptcy Court for the
Southern District of Texas, Houston Division to extend the
exclusive periods during which the Debtor may file a Chapter 11
plan from April 12, 2021 until May 31, 2021.
The Debtor is hopeful that it can reorganize, but it needs
additional time. The Debtor has been hit by COVID-19, and needs
additional time to get the business back on track to its
pre-COVID-19 condition. Because it is Spring, more people are
thinking about fixing their yards, and other outdoor construction.
By the end of May, 2021, the Debtor hopes it will be on its way to
recovery from the pandemic and it will be able to reorganize. By
allowing the Debtors to have until May 31, 2021, to file a plan of
reorganization, the Debtor is optimistic that it will be able to
reorganize and emerge successfully from chapter 11.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/31Uq2v3 from PacerMonitor.com.
About Paverock Inc.
Paverock, Inc. filed a voluntary petition for relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 20-
34982) on October 13, 2020, listing under $1 million in both assets
and liabilities.
Judge Eduardo V. Rodriguez oversees the case. Margaret M. McClure,
Esq. serves as the Debtor's attorney.
PEAKS FITNESS: Hires Mac Restructuring as Financial Consultant
--------------------------------------------------------------
Peaks Fitness, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the District of Arizona to employ Mac
Restructuring Advisors, LLC as financial consultant.
The firm's services include:
a. assisting the Debtors in complying with the administrative
reporting requirements;
b. analyzing the Debtors' financial and operational information;
and
c. preparing financial projections, formulating the financial
terms of a plan of reorganization, and ensuring the plan's
satisfaction of and compliance with the requirements for
confirmation, including feasibility.
The firm will be paid at the rate of $375 per hour and will be
reimbursed for out-of-pocket expenses incurred.
Ted Burr, managing director at Mac Restructuring Advisors,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Ted Burr
Mac Restructuring Advisors, LLC
10191 E. Shangri La Rd.
Scottsdale, AZ
Tel: (602) 418-2906
Email: Ted@MacRestructuring.com
About Peaks Fitness
Peaks Fitness, LLC, an Arizona-based health, wellness and fitness
company, sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Ariz. Case No. 21-01971) on March 19, 2021. In the
petition signed by Ross Suozzi, the managing member, the Debtor
disclosed $50,000 to $100,000 in assets and $1 million to $10
million in liabilities. Judge Daniel P. Collins oversees the case.
Randy Nussbaum, Esq., at Sacks Tierney P.A. is the Debtor's legal
counsel.
PENINSULA PACIFIC: S&P Assigns 'B-' ICR, Outlook Positive
---------------------------------------------------------
S&P Global Ratings raised its ratings, including its issuer credit
rating, on Virginia-based gaming operator Peninsula Pacific
Entertainment LLC (P2E) one notch, to 'B-' from 'CCC+'.
S&P said, "The positive outlook reflects our forecast for continued
EBITDA growth over the next several quarters, which would translate
into adjusted leverage below 6.5x and interest coverage above 2x,
metrics that are aligned with a one-notch higher rating for P2E.
"We believe P2E will maintain EBITDA at a level that will support
coverage of fixed charges by at least 1.5x and a meaningful
improvement in credit measures by the end of 2021. We expect that
over the next few quarters, absent any further prolonged property
closures, P2E can maintain a level of EBITDA that will translate
into coverage of fixed charges in the mid-1x area and cause a
meaningful reduction in adjusted leverage and improvement in
adjusted EBITDA coverage of interest, from weak levels at the end
of 2020. We believe the easing of operating restrictions will fuel
incremental revenue and EBITDA in 2021, relative to 2020, since
current restrictions limit operating hours, the number of guests at
certain of the company's properties, and the ability to offer
certain amenities. These restrictions have been particularly
hurtful to the Lago property, which competes largely with Native
American operators that currently do not operate under the same
restrictions given their sovereign status. We believe the easing of
restrictions should translate into more customer visits and
customers staying at the properties longer, driving incremental
revenue and EBITDA."
S&P's pro forma EBITDA forecast includes a full year of Hard Rock
Sioux City (HRSC) (acquired October 2020) and a full year of our
forecast for Lago's revenue and EBITDA in 2021. S&P's base case
forecast also assumes:
-- U.S. GDP grows 6.5% in 2021 and 3.1% in 2022.
-- U.S. consumer spending grows 6.9% in 2021 and 4.2% in 2022,
which should support visitation and spending at casinos through
2022.
-- Meaningful year-over-year revenue growth in 2021 given a
favorable comparison with 2020, which was affected by property
closures for part of the year and operating restrictions. S&P said,
"We assume that operating restrictions in P2E's markets ease
through the year, which should translate into incremental revenue
since P2E would, in that scenario, be able to stay open more hours,
allow more customers to come to the property at any given time, and
offer more amenities to attract customers to the property and keep
customers on the property longer. We also believe the January 2021
opening of P2E's fifth Virginia property will drive some
incremental revenue."
-- Meaningful year-over-year EBITDA growth in 2021 due largely to
growth in revenue. S&P said, "We assume 2021 EBITDA margin will be
higher than 2020's, which was affected by property closures, but
will decline sequentially through the year. This is because we
assume that as the year progresses more lower-margin amenities are
offered, more leisure alternatives become available so the company
increases marketing spending, and we assume there are incremental
expenses associated with having more table game positions available
by the end of the year."
-- S&P's 2021 EBITDA forecast also incorporates a partial year
benefit to Lago from the budget that the New York State legislature
and governor have agreed upon and which we expect the state
legislature to pass shortly. The budget contains gaming tax relief
which reduces the tax rate on slot revenue to 30%, from 37% for the
next five years, and allows for one online sports betting license.
The governor of New York will need to sign the budget for it to
become effective. However, even in a scenario where the governor
does not sign the budget into effect, we believe meaningful EBITDA
growth in 2021 is still achievable given our expectation for
revenue growth.
-- Revenue growth in 2022 of about 20%-25% driven largely by a
full year benefit of the proposed expansion (adding 350 historical
horse racing (HHR) machines) at P2E's Vinton, Va. property, and our
forecast for Lago's revenue to increase meaningfully, to about the
level in 2019, since we assume the property will no longer be
subject to current operating restrictions.
-- EBITDA growth of about 10%-15% in 2022 due to revenue growth.
We assume margin declines modestly year over year given higher
assumed marketing and labor expenses, at least compared with the
first half of 2021.
-- Our measure of EBITDA is after subtracting management fees,
which are calculated as 1% of gross revenue and 5% of EBITDAM
(earnings before interest, taxes, depreciation, amortization, and
management fees).
S&P Global Ratings believes there remains high, albeit moderating,
uncertainty about the evolution of the coronavirus pandemic and its
economic effects. Vaccine production is ramping up and rollouts are
gathering pace around the world. Widespread immunization, which
will help pave the way for a return to more normal levels of social
and economic activity, looks to be achievable by most developed
economies by the end of the third quarter. However, some emerging
markets may only be able to achieve widespread immunization by
year-end or later. S&P said, "We use these assumptions about
vaccine timing in assessing the economic and credit implications
associated with the pandemic. As the situation evolves, we will
update our assumptions and estimates accordingly."
Based on these assumptions, and pro forma to include a full year of
operations of HRSC and Lago in 2020 and 2021 and the proposed
add-on, S&P arrives at the following credit measures:
-- Adjusted leverage improving to about 6.5x at the end of 2021,
from about 14x at the end of 2020, and to the mid-5x area in 2022.
-- Adjusted EBITDA coverage of interest expense improving to about
2x at the end of 2021, from about 1x at the end of 2020, and
remaining in the low-2x area in 2022.
P2E is vulnerable to potential increased competition in its
operating markets in the next two to three years due to new state
licenses, potentially spurring a modest overall EBITDA decline in
the long run. P2E's operations in both Virginia and Iowa are
vulnerable to increased competition in the next few years, which
S&P believes may cause significant declines in EBITDA at some of
P2E's properties once new competition opens; however, this is
unlikely until sometime in 2023 or 2024.
In March 2020, Virginia passed a bill permitting up to five gaming
facilities that can offer Class III slot machines and table games.
Of the five proposed locations, two are within 25 miles of P2E's
Hampton location and one is in Richmond, where P2E has a property
and that is about 30 miles west of P2E's Colonial Downs location.
S&P believes that if these three locations open, they could have a
modestly (it is forecasting between 5% and 10%) negative impact on
P2E's EBITDA in 2024 since its Virginia properties cater largely to
local customers within 25 miles, and the new facilities would be
marketing to the same target customer base. S&P said, "Further, we
believe the proposed casinos will have a competitive advantage
since they will be able to offer table games and Class III slots,
compared with only HHR machines permitted at P2E's locations as per
the provisions of its license with the state. HHR machines
generally lack well-recognized brands and game titles; the jackpots
are smaller (due to limited opportunities to pool gameplay to
create sizable jackpots); and in our opinion, the game play on HHR
machines is modestly slower than that of Class III slots. That
being said, the design and content of HHR machines is improving,
particularly as larger gaming equipment manufacturers have begun
offering more products for this space. We also expect the proposed
casinos will offer a greater assortment of food, beverage, and
other amenities, given the level of investment required for these
casinos. We believe these additional amenities could draw
customers."
There are currently three proposed sites for the Richmond casino:
one near Chippenham Village, about 5 miles north of P2E's current
Richmond property; one in north Richmond, around 7 miles north of
P2E's current Richmond facility; and one in south Richmond, around
6 miles southeast of P2E's current Richmond property. P2E has an
agreement to manage the proposed casino in south Richmond. S&P
said, "We believe there may be a material negative impact to P2E's
existing Richmond facility if the Chippenham Village or north
Richmond sites are chosen. Nevertheless, we believe P2E's Colonial
Downs location may still capture a large portion of customers
coming from areas to the east of that location. Areas to the north
of Richmond and to the south and east of Colonial Downs are densely
populated. We also believe P2E's Hampton location has an advantage,
relative to the approved Portsmouth and Norfolk casino locations,
as customers north of Hampton come from densely populated areas
such as Newport News." Further, P2E should benefit from an
effective gaming tax rate of 16%, relative to the rate of between
18% and 30% for the proposed casinos. This could translate into an
ability to allocate a higher level of revenue toward marketing
initiatives.
S&P said, "We believe P2E's HRSC will be negatively affected by the
future opening of casino gaming at the racetrack in South Sioux
City, about 10 miles from HRSC. Depending on the level of
investment for the casino, we believe a new gaming facility in
South Sioux City could have a meaningfully negative impact on HRSC
since it draws the majority of its customers from within 50 miles.
Nevertheless, we believe this eventuality is several years away,
given the amount of time required to secure local permits and
gaming licenses, secure financing for a project, and develop and
construct the facility. Further, since the existing track in South
Sioux City is owned by a Native American tribe that already owns
and operates casinos in the South Sioux City region, we believe the
Tribe may not make a meaningful investment in a commercial casino
at this location. This is because the commercial casino would be
subject to gaming taxes, and the new casino could deter customers
from using its existing facilities, which are not subject to
commercial gaming taxes.
"We believe P2E remains vulnerable to EBITDA volatility because the
Virginia properties will still represent about half of its EBITDA.
Pro forma for the addition of the Lago property to the portfolio,
P2E's Virginia operations will still represent a little over half
of its EBITDA. Therefore, we believe P2E's earnings remain
vulnerable to event risks, such as a regional economic slowdown,
additional mandatory property closures, meaningful capacity or
other operating restrictions at the properties in Virginia, changes
in competition, adverse weather, or brand degradation.
Nevertheless, Lago adds some diversity given operations in a
different market.
"We believe risks exist around potential future leveraging
transactions. We believe that over the next few years, P2E may
pursue development opportunities that could potentially result in
higher leverage. P2E holds a riverboat gaming license in Louisiana
for a facility that is currently not operating. While at this point
P2E has no specific or imminent plans with respect to its license
in Louisiana, we believe that in the next few years the company may
look to develop a new casino. Further, P2E and a partner have
submitted a bid for the Richmond Class III casino license. While we
believe that the company's investment in the future casino would be
somewhat limited, it would still reflect a future call on cash that
would occur at least a year or so in advance of any cash inflow
from that casino.
"The positive outlook reflects our forecast for continued EBITDA
growth over the next several quarters, which would translate into
adjusted leverage below 6.5x and interest coverage above 2x,
metrics that are aligned with a one-notch higher rating for P2E.
"We could raise the rating one notch once we believed P2E could
sustain adjusted leverage under 6.5x and interest coverage of at
least 2x. Before raising the rating, we would need to believe that
P2E would maintain a cushion relative to these measures even
incorporating any future potential development spending.
"We would revise the outlook to stable if we no longer expected
adjusted leverage to improve to 6.5x or below, which would occur if
2021 EBITDA slightly underperformed our forecast. We would consider
lower ratings if in the next few quarters EBITDA were meaningfully
weaker than we are forecasting, resulting in adjusted leverage
remaining above 7.5x, interest coverage in the low-1x area, or a
strained liquidity position. This would likely occur if there were
further prolonged property closures."
POWELL 512: Unsec. Creditors to Get Share of Income in 5 Years
--------------------------------------------------------------
Powell 512, LLC, filed with the U.S. Bankruptcy Court for the
Eastern District of New York a proposed Plan of Reorganization and
a Disclosure Statement on April 6, 2021.
The Debtor owns a real property known as 2319 Bedford Ave,
Brooklyn, New York (the "Brooklyn Property"). The Brooklyn Property
is a three-family property. The Brooklyn Property is subject to 2
mortgages. The Debtor filed this bankruptcy to restructure the
Debt on the Brooklyn Property.
Under the Plan, Class 1 consists of the secured claim of Electrical
Safety Inspection, Inc. Class 1 claims will have a secured claim up
to the value of the Brooklyn, with the remaining balance of the
claim reclassified as a wholly unsecured claim. The Secured portion
of the Claim will be on a 40-year amortization schedule at 4%
interest, with the first payment to be made within 30 days of the
effective date of the Plan, unless otherwise agreed by the parties.
Class 1 is Impaired and Class 1 claimholders are therefore entitled
to vote on the Plan.
Class 2 consists of General Unsecured Claims, including the 2nd
Mortgage of First United Banking Corp. on the Brooklyn Property and
the under secured amount of the 1st Mortgage of Electrical Safety
Inspection, Inc. on the Brooklyn Property. Class 2 Claims will be
paid a pro rata share of the Debtor's disposable income over a
period of 5 years. Payments will be made starting from the
Effective Date of the Plan. Class 2 Claims are impaired and are
entitled to vote.
Class 3 consists of Priority Unsecured Claims. Class 3 claims will
be paid in full on or before the effective date of the Plan. Class
3 is Unimpaired, and the Holder of the Class 3 Claim is
conclusively presumed to have accepted the Plan.
The Plan will be funded from rental income received on the Brooklyn
Property. Additionally, the Debtor is in discussion with a company
that is interested in providing bankruptcy financing to the Debtor
in an amount sufficient to fund the proposed plan. Any unclaimed
Distributions shall be retained by the Disbursing Agent in trust
for the beneficial holders of Allowed Claims entitled thereto for a
period of 180 days after the applicable Distribution Date.
Any Distribution remaining unclaimed 180 days after the applicable
Distribution Date shall be canceled, the Claim relating to such
Distribution shall be deemed disallowed and expunged, and the
holder of such Claim shall be removed from the Claims list and
shall receive no further Distributions under the Plan. Any and all
cancelled Distributions shall be deemed available Cash and shall be
distributed to the holders of Allowed Claims in accordance with the
Plan until such Claims are paid in full, and then to the Debtor.
A full-text copy of the Disclosure Statement dated April 6, 2021,
is available at https://bit.ly/3d4aX08 from PacerMonitor.com at no
charge.
Attorney for the Debtor:
Charles A. Higgs, Esq
Law Office of Charles A. Higgs
44 S. Broadway, Suite 100
White Plains, NY 10601
Tel: (917) 673-3768
E-mail: Charles@FreshStartEsq.com
About Powell 512 LLC
Powell 512, LLC, is a Single Asset Real Estate debtor (as defined
in 11 U.S.C. Section 101(51B)). The Company is the owner of a fee
simple title to a 3-family house valued at $850,000.
Powell 512, LLC, filed a Chapter 11 petition (Bankr. E.D.N.Y Case
No. 21-40032) on Jan. 6, 2021. At the time of filing, the Debtor
has $850,000 total assets and $1,160,000 total liabilities. The
Hon. Jil Mazer-Marino oversees the case. Charles Higgs, Esq., of
THE LAW OFFICE OF CHARLES A. HIGGS, is the Debtor's counsel.
PROFESSIONAL FINANCIAL: Affiliate Seeks to Hire Real Estate Agent
-----------------------------------------------------------------
Professional Investors 49, LLC, an affiliate of Professional
Financial Investors, Inc., seeks approval from the U.S. Bankruptcy
Court for the Northern District of California to employ Scott
Gerber, a real estate agent at Meridian Commercial.
The Debtor requires a real estate agent to facilitate the sale of
Lincoln Redwoods, a 19-unit apartment complex located at 1732
Lincoln Avenue, San Rafael, Calif.
The Debtor will pay Mr. Gerber a 4 percent commission on the sales
price.
Mr. Gerber disclosed in a court filing that he and all members of
Meridian Commercial are disinterested persons who do not hold or
represent an interest adverse to the Debtor's bankruptcy estate.
Mr. Gerber can be reached at:
Scott Gerber
Meridian Commercial
711 Grand Ave #290
San Rafael, CA 94901
Phone: (415) 927-8888
Email: scott@scottgerber.com
About Professional Financial Investors
Professional Financial Investors, Inc. and Professional Investors
Security Fund, Inc. are engaged in activities related to real
estate. PFI directly owns 28 real property locations in fee simple
and has an interest as a tenant in common at another real property
location, primarily consisting of apartment buildings and office
parks, located in Marin and Sonoma Counties, California, with an
aggregate value of approximately $108 million, according to an
early July 2020 valuation.
On July 16, 2020, a group of creditors filed an involuntary Chapter
11 petition (Bankr. N.D. Cal. Case No. 20-30579) against
Professional Investors Security Fund. On July 26, 2020,
Professional Financial Investors sought Chapter 11 protection
(Bankr. N.D. Cal. Case No. 20-30604). On Nov. 20, 2020,
Professional Financial Investors filed involuntary Chapter 11
petitions against Professional Investors Security Fund I, A
California Limited Partnership and 28 other affiliates. The cases
are jointly administered under Case No. 20-30604. Between February
3-4, 2021, Professional Financial Investors filed involuntary
Chapter 11 petitions against Professional Investors 31, LLC and
nine other affiliates. The cases are jointly administered under
Case No. 20-30579.
At the time of the filing, Professional Financial Investors
disclosed assets of between $100 million and $500 million and
liabilities of the same range.
Hannah L. Blumenstiel oversees the cases.
The Debtors tapped Sheppard, Mullin, Richter & Hampton, LLP, as
their legal counsel; Trodella & Lapping LLP as conflicts counsel;
Ragghianti Freitas LLP, Weinstein & Numbers LLP, Wilson Elser
Moskowitz Edelman & Dicker LLP, Nardell Chitsaz & Associates, and
Kimball Tirey & St. John, LLP as special counsel; and Donlin,
Recano & Company, Inc. as claims, noticing, and solicitation agent
and administrative advisor.
Michael Hogan of Armanino LLP was appointed as the Debtors' chief
restructuring officer. FTI Consulting, Inc. is the financial
advisor.
On Aug. 19, 2020, the Office of the U.S. Trustee appointed a
committee of unsecured creditors. The committee is represented by
Pachulski Stang Ziehl & Jones.
Professional Investors 31 and affiliates tapped Sheppard, Mullin,
Richter & Hampton LLP as general bankruptcy counsel; Trodella &
Lapping LLP as conflicts counsel; FTI Consulting, Inc. as financial
advisor; and Armanino LLP as tax accountant. Donlin, Recano &
Company, Inc. is the claims, noticing and solicitation agent.
PROJECT BOOST: S&P Affirms 'B-' Long-Term ICR, Outlook Negative
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term issuer credit rating
on London, Ont.-based Project Boost Purchaser LLC (PBP).
The negative outlook reflects S&P's view of PBP's high leverage
that leaves the company vulnerable to execution risks, especially
the ability to drive organic topline growth and timely achievement
of cost savings to support PBP's deleveraging strategy.
S&P said, "PBP's capital structure consists of about US$1.7 billion
debt, redeemable class A preferred shares, and class B common
shares. Given that the class A preferred shares could be partially
redeemed at any time, we no longer view them as satisfying all of
the qualitative conditions--including creating an alignment of
economic incentives--necessary to exclude from our adjusted debt
calculation. Therefore, we have reclassified these shares to debt
from equity and included the value of these securities in our
adjusted debt calculations. This reclassification increases PBP's
debt to EBITDA on an S&P Global Ratings' adjusted basis to about
21x compared with 11x, excluding preferred shares for fiscal 2020,
but it has no effect on PBP's underlying creditworthiness and cash
flow generation capability. While this treatment elevates PBP's
debt levels on an S&P Global Ratings' adjusted basis, fundamentally
nothing has changed in the company's cash flow generating capacity.
We foresee negligible risk to PBP liquidity from these class A
shares because they do not require mandatory cash dividend payments
or contain any financial maintenance covenants or cross-default
clauses that could trigger an acceleration of their repayment.
"Furthermore, we anticipate the company's organic topline growth
strategy, along with successful realization of cost savings, will
lead to low double-digit EBITDA growth in fiscal 2021, thus
supporting the company's deleveraging strategy such that S&P Global
Ratings' adjusted debt to EBITDA could improve to about 18.0x-18.5x
(excluding preferred shares it could be about 9.0x-9.5x) along with
S&P Global Ratings' adjusted free operating cash flow (FOCF) to
debt to about 2%-3% (excluding preferred shares it could be about
4%-5%). Therefore, PBP's ability to execute its growth strategy and
timely achievement of cost savings will be key factors in
determining the direction of our ratings on the company.
"The negative outlook reflects our view of the company's high
balance-sheet debt that could leave PBP vulnerable to execution
risk surrounding its ability to increase organic topline growth and
timely achievement of cost savings. We expect these will be key
factors in the company's deleveraging strategy over the next 12
months.
"We could lower the ratings over the next 12 months if the company
is unable to generate sufficient free cash flow to cover its
first-lien debt amortization and if PBP's fixed-charge coverage
ratio (S&P Global Ratings' adjusted excluding the dividends on the
preferred shares) approaches 1x, leading to an unsustainable
capital structure. Such a scenario could occur if there is a
prolonged economic downturn leading to weaker operating performance
stemming from lower revenues or an inability to upsell new products
to existing customers, thereby pressuring EBITDA generation.
"We could revise the outlook to stable if the company is able to
deliver organic EBITDA growth, probably reflecting an improving
macroeconomic outlook for North America and timely achievement of
slated cost savings, leading to an S&P Global Ratings' adjusted
FOCF-to-debt ratio approaching 3% (excluding the preferred shares
approaching 5%) over the next 12 months."
PURDUE PHARMA: Asks Court for Another Month Opioid Suits Reprieve
-----------------------------------------------------------------
Law360 reports that Purdue Pharma has asked a New York bankruptcy
judge for another month of relief from lawsuits over its opioid
sales, saying negotiations on the final form of its Chapter 11 plan
are at a "critical stage."
In a motion filed Wednesday, Purdue said an injunction pausing
lawsuits against it and the Sackler family should be extended for
another 29 days, saying its reorganization will suffer "irreparable
harm" if litigation restarts before it can submit a Chapter 11 plan
to the court.
About Purdue Pharma
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation. The Debtors' consolidated
balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets
and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain oversees the cases.
The Debtors tapped Davis Polk & Wardwell LLP and Dechert LLP as
legal counsel; PJT Partners as investment banker; AlixPartners as
financial advisor; and Prime Clerk LLC as claims agent.
Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the
official committee of unsecured creditors appointed in Debtors'
bankruptcy cases.
David M. Klauder, Esq., was appointed as fee examiner. The fee
examiner is represented by Bielli & Klauder, LLC.
PYRAMID MANAGEMENT: Destiny USA Explores Debt Restructuring
-----------------------------------------------------------
Andrew Scurria and Alexander Gladstone of Wall Street Journal
report that the owner of the Destiny USA shopping complex, Pyramid
Management Group, in Syracuse has engaged restructuring advisers
amid continued pressure from the pandemic.
The owner of Destiny USA, the largest shopping center in New York,
is exploring a possible restructuring of the struggling property's
municipal and mortgage-backed debt obligations, people familiar
with the matter said, according to the Journal.
Pyramid Management Group has hired financial adviser Houlihan Lokey
Inc. and law firm Orrick Herrington & Sutcliffe LLP to look into
restructuring options for Destiny USA as pandemic regulations
continue to affect the mall's bottom line, according to people
familiar with the matter.
A six-story structure in Syracuse, N.Y., by Onondaga Lake, Destiny
USA owes roughly $286 million in municipal bond debt and about $430
million in commercial mortgage-backed securities. Bond insurer
Syncora Holdings Ltd. guarantees more than a quarter of the
tax-exempt debt and is being advised by investment bank Moelis &
Co. and law firm White & Case LLP on the mall's financial troubles,
the people said.
Discussions, which are in early stages, are expected to focus on
how much debt the mall can support and on the timetable for
repayment, the people said.
Pyramid, which is privately held, borrowed heavily to expand and to
build entertainment extravaganzas at Destiny USA and another mall,
Palisades Center in West Nyack, N.Y., hoping to draw foot traffic
and reverse the yearslong struggles of mall operators battling
online shopping.
About Pyramid Management Group
Pyramid Management Group is the largest privately-held shopping
mall developer in the Northeast, owning, leasing, and operating 15
shopping centers. It was formed in 1968 in Upstate New York, by
Robert J. Congel.
QUIKRETE HOLDINGS: Moody's Rates Incremental Secured Loan 'Ba3'
---------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Quikrete
Holdings, Inc.'s incremental senior secured term loan facility due
in 2028. All other ratings for the company have been affirmed,
including the Ba3 Corporate Family Rating and Ba3-PD Probability of
Default Rating. The outlook is stable.
Moody's believes that proceeds from the incremental senior secured
term loan facility will only be used to fund the acquisition of
Forterra, Inc. Moody's expects funding of the incremental term loan
will incur simultaneously with the completion of the acquisition.
Quikrete expects the transaction to close by December 31, 2021 as
it awaits regulatory approval. Pro forma for the Forterra
acquisition (assuming no divestitures), Moody's projects Quikrete's
total debt-to-EBITDA at year-end 2021, will be 4.7x (inclusive of
Moody's adjustments).
The incremental senior secured term loan facility consists of two
tranches, (i) a proposed $1,500 million senior secured credit term
loan currently under syndication and (ii) an $890 million senior
secured term loan to be syndicated at a later date.
"The acquisition of Forterra adds significant scale, increases
product and revenue diversity and further strengthens Quikrete's
competitive positions in concrete pipe, and ductile iron pipe, "
said Emile El Nems, a Moody's VP-Senior Analyst.
The Ba3 rating assigned to the incremental senior secured term loan
is on par with Quikrete's corporate family rating and the existing
$2,500 million senior secured term loan (together the credit
facility) reflecting its position as the preponderance of debt in
Quikrete's capital structure. The credit facility has a first lien
on substantially all of the non-ABL revolver (unrated) collateral
of Quikrete's assets and a second priority lien on collateral
pledged to the ABL revolver. The incremental facility amortizes 1%
per year with a bullet payment at maturity. Quikrete's subsidiaries
will provide lenders with upstream guarantees.
Assignments:
Issuer: Quikrete Holdings, Inc.
Senior Secured Term Loan B1, Assigned Ba3 (LGD4)
Senior Secured Term Loan B2, Assigned Ba3 (LGD4)
Affirmations:
Issuer: Quikrete Holdings, Inc.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Senior Secured 1st Lien Term Loan, Affirmed Ba3 (LGD4)
Outlook Actions:
Issuer: Quikrete Holdings, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Quikrete's Ba3 corporate family rating reflects its solid operating
fundamentals driven by good profitability and a stable construction
industry. Moody's also expects the company to maintain good
liquidity, characterized by stable free cash flow and ample
availability on its revolving credit facility. At the same time,
the rating takes into consideration the company's high leverage,
exposure to cyclical end markets, dependence on national retail
chains for distribution, and integration risk associated with the
Forterra acquisition.
Governance aspects considered by Moody's include risks associated
with a company that is privately held and has grown through a
series of acquisitions. This risk is somewhat mitigated by the
controlling family's focus on execution, growing the business
through successful acquisitions and reinvesting most of the free
cash flow back in the business, limiting themselves to small
dividend distributions.
The stable outlook reflects Moody's expectations that Quikrete will
successfully integrate Forterra, grow revenue organically, improve
profitability, and generate free cash to reduce leverage. This is
largely driven by Moody's views that the US economy and US
construction industry will remain stable and supportive of the
company's underlying growth drivers.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded if (all ratios include Moody's
standard adjustments):
Adjusted debt-to-EBITDA is below 3.75x for a sustained period of
time
Adjusted EBITA-to-interest expense is above 6.0x for a sustained
period of time
The company maintains its free cash flow and improves its
liquidity
The company demonstrates a conservative financial policy
The rating could be downgraded if:
Adjusted debt-to-EBITDA is above 4.75x for a sustained period of
time
Adjusted EBITA-to-interest expense is below 4.5x for a sustained
period of time
The company's liquidity and profitability deteriorates
The principal methodology used in these ratings was Manufacturing
Methodology published in March 2020.
Headquartered in Atlanta, Georgia, Quikrete Holdings, Inc. is a
North American manufacturer and distributor of packaged concrete,
cement mixes, segmental concrete and ceramic tile installation
products. In addition, Quikrete is a leading designer, manufacturer
and distributor of engineered water infrastructure solutions for
domestic construction. The company is privately owned by the
Winchester family.
QUIKRETE HOLDINGS: S&P Affirms 'BB-' ICR, Outlook Stable
--------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating on
U.S.-based building materials supplier Quikrete Holdings Inc. The
outlook is stable. At the same time, S&P removed all its ratings on
the company from CreditWatch, where S&P placed them with developing
implications on Feb. 23, 2021.
The stable outlook reflects S&P's view that pro forma leverage will
increase, with anticipated debt to EBITDA of about 4.5x compared
with about 3x in 2020. It also reflects that leverage could remain
close to current levels, in the 3.0x-3.5x range, over the next 12
months given the long-dated closing and subsequent debt issuance,
which will not occur until the fourth quarter of 2021.
Quikrete Holdings Inc. is buying water and drainage pipe
manufacturer Forterra Inc. for total consideration of $2.74 billion
in a mostly debt-financed transaction.
The proposed financing will consist of a $1.5 billion incremental
term loan B-1, borrowings on its upsized asset-based lending
facility (ABL), cash on hand at close, as well as an additional
financing commitment of a $890 million term loan B-2 (unrated) to
cover any shortfall in funding.
The acquisition could improve Quikrete's competitive position but
there are integration risks. The combination expands Quikrete's
market share in concrete pipe because Forterra's drainage pipe and
products segment complements Quikrete's Rinker division while its
water and pipe products segment expands product offerings. There
are also similarities in manufacturing and distribution that
complement Quikrete's nationwide distribution network. S&P said,
"We also expect improved scale, with expected EBITDA of about $1
billion pro forma for the transaction, assuming no divestitures are
required. We anticipate some improvements in diversity, with
reduced end-market exposure to cyclical residential repair and
remodeling, which we now expect to comprise about 40% of sales from
50%-55% previously." Exposure to more stable infrastructure end
markets also increases to almost 30% of sales from 18% previously.
While the company still has a concentrated customer base,
especially with a dependance on big box stores, this also improves
somewhat. These positive attributes are somewhat offset by risks
associated with an acquisition of this size, including integration
and execution risks as Quikrete works to realize its expected
synergies. Although the company has historically been acquisitive
and completed large acquisitions, such as its $1.08 billion
acquisition of Contech in 2016, this is the largest acquisition to
date, which could take longer to integrate and realize synergies
than expected.
S&P said, "We expect credit metrics to remain in line with the
current rating, with debt to EBITDA remaining below 5x. Quikrete
benefited from strong residential construction and repair and
remodel spending in 2020, with expected debt leverage of about 3x.
Pro forma for the transaction, we expect leverage of about 4.5x,
excluding potential synergies. The acquisition is expected to close
in the fourth quarter of 2021 or the first quarter of 2022 and is
subject to regulatory approval. At this time, we do not have a view
of the timing of or magnitude of potential divestitures, but we
estimate credit metrics will remain in line with our expectations
for the rating, with debt to EBITDA remaining below 5x based on the
assumption that proceeds from divestitures will be used toward debt
reduction.
"We expect Quikrete to generate positive free cash flows over the
next 12 months. We expect Quikrete to continue to generate positive
free cash flows of $350 million-$360 million in 2021 and $430
million-$440 million in 2022 due to working capital management and
stable capital spending. Quikrete completed acquisitions totaling
about $60 million in 2020 and $198 million in 2019, and we expect
the company to remain acquisitive. However, we expect Quikrete will
limit the funding sources of future acquisitions to internally
generated cash as it deleverages after the Forterra acquisition.
"The stable outlook reflects our view that pro forma leverage will
increase, with anticipated debt to EBITDA of about 4.5x compared
with about 3x in 2020. It also reflects that leverage could remain
close to current levels in the 3.0x-3.5x range over the next 12
months given the long-dated closing and subsequent debt issuance,
which will not occur until the fourth quarter of 2021."
S&P could lower its ratings on Quikrete over the next 12 months if
demand in the company's end markets declined or there were
integration challenges with Forterra that delayed or sharply
reduced synergy savings, causing:
-- Debt to EBITDA to rise and be sustained above 5x, or
-- EBITDA to interest to fall below 3x.
S&P could raise its ratings on Quikrete over the next 12 months
when we have a clearer view of progress toward integration,
divestiture requirements (if any), and the acquisition's overall
impact on its view of Quikrete's competitive advantage.
Specifically, S&P would expect:
-- Debt to EBITDA to sustainably fall below 4x, and
-- EBITDA interest coverage above 4x.
RADNET MANAGEMENT: S&P Assigns 'B' Rating on Senior Secured Debt
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '4'
recovery rating to Los Angeles-based diagnostic imaging servicer
RadNet Management Inc.'s proposed $195 million first-lien revolving
credit facility and $675 million first-lien term loan B. The '4'
recovery rating indicates its expectation for average (30%-50%,
rounded estimate: 45%) recovery in the event of a payment default.
The company plans to use the proceeds from the new term loan to
repay its existing term loan (about $611 million), cover fees and
expenses, and add over $50 million cash to the balance sheet.
This transaction extends RadNet's recently upsized $195 million
revolver through 2026. Together, the upsized revolver and new term
loan improve liquidity by increasing access to capital and adding
cash to the balance sheet and through lower annual amortization
than the previous term loan. That said, the increase in first-lien
debt and lower mandatory amortization modestly weaken the recovery
prospects on the senior secured debt compared with the previous
capital structure.
S&P said, "Our 'B' issuer credit rating and stable rating outlook
on RadNet Inc. are unchanged and reflect the company's narrow focus
in the highly fragmented and capital-intensive diagnostic imaging
industry, characterized by low barriers to entry and intense
competition. It also reflects our expectation that it will maintain
leverage of about 4x-5x.
"We expect mid-single-digit growth stemming from low-single-digit
organic growth supplemented by acquisitions and new joint ventures.
We anticipate adjusted EBITDA margins of about 20% and free cash
flow of over $25 million each year in 2021 and 2022. We believe the
company will continue to prioritize acquisitions and investments in
joint ventures to maintain its leading market share in the
fragmented, highly competitive diagnostic imaging industry while
continuing to report modest same-facility volume growth."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- The company's proposed capital structure comprises a $195
million revolving credit facility (assumed 85% drawn at default)
and a $675 million first-lien term loan.
-- S&P excludes the credit facilities from the New Jersey Imaging
Networks subsidiary in its debt claims waterfall and exclude any
potential value from that subsidiary in our recovery analysis. The
debt at that subsidiary is nonrecourse to RadNet.
-- S&P's '4' recovery rating on the first-lien term loan indicates
the expectation of average (30%-50%; rounded estimate: 45%)
recovery.
-- S&P's simulated default scenario contemplates a default in
2024, precipitated by intensified competition, cost increases, and
declining reimbursement rates.
Simulated default assumptions
-- Year of default: 2024
-- EBITDA at emergence: $76.6 million
-- EBITDA multiple: 5.5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $400
million
-- Valuation split (obligors/nonobligors): 100%/0%
-- Collateral value available to first-lien creditors: $400
million
-- Secured first-lien debt claims: $846.5 million
--Recovery expectations: 30%-50% (rounded estimate: 45%)
Note: All debt amounts include six months of prepetition interest.
Collateral value equals the asset pledge from obligors after
priority claims plus the equity pledge from nonobligors after
nonobligor debt.
RANDAL L. LOEHRKE: $170K Sale of 40-Acre Saxeville Property Okayed
------------------------------------------------------------------
Judge Katherine Maloney Perhach of the U.S. Bankruptcy Court for
the Eastern District of Wisconsin authorized Randal L. Loehrke and
Marjorie K. Loehrke to sell their 40 acres of vacant land located
in the Town of Saxeville, Waushara, Wisconsin, Tax Parcel No.
030-00113-0000, to Maximilian W. Hecht and Courteney R. Hecht for
the sum of $170,000 on other terms and conditions specified in the
Offer to Purchase.
The legal description of the Property is as follows: The Southwest
1/4 of the Northeast 1/4 of Section 1, Township 20 North, Range 12
East, Town of Saxeville, Waushara County, Wisconsin.
The sale is free and clear of all liens and encumbrances and the
Debtors have authority to pay all usual and customary closing
costs, including but not limited to, title insurance, transfer
fees, proration of real estate taxes and recording fees figured
through the date of closing.
A portion of the net proceeds will be paid to the lienholder,
Waushara County Treasurer, for delinquent taxes owed for the
Property in the amount of $400.90.
The remaining proceeds will be held in the Debtors' DIP account
until further order of the Court, with the exception of funds in
the amount of $35,000 that the Debtors are authorized to use for
the expenses stated in the attached budget.
The $34,000 in funds for the estimated capital gains taxes will be
held in the Debtors' DIP account until further order of the Court.
Based upon the representation made on the record at the hearing by
the counsel for Bank First, N.A., Bank First does not have a
post-petition lien on the Debtors' 2021 crops at this time.
The Debtors are required to obtain crop insurance for the 2021
crops.
A copy of the Budget is available at https://tinyurl.com/24rbk6uh
from PacerMonitor.com free of charge.
Randal L. Loehrke and Marjorie K. Loehrke sought Chapter 11
protection (Bankr. E.D. Wisc. Case No. 20-24784) on July 9, 2020.
The Debtors tapped Michelle A. Angell, Esq., at Krekeler Strother,
S.C. as counsel.
RHINO BARE: Canico Capital Says Plan Legally Flawed
---------------------------------------------------
Secured creditor Canico Capital Group, LLC, objects to approval of
the Disclosure Statement of Debtor Rhino Bare Projects, LLC.
Canico points out that the Disclosure Statement lacks adequate
information regarding Mike Galam's ability to make payments to
unsecured creditors that are promised under the Plan. And if
Canico's general unsecured claim is allowed, he would have to pay
more than $15 million. However, the Disclosure Statement contains
no evidence of his ability to do so.
Canico claims that the Disclosure Statement fails to explain why
the Debtor expects to prevail in the State Court action, in the
duplicative adversary proceeding against Canico, Best West and
Assil, and on the objection to Canico's proof of claim. Indeed, the
Debtor did not even disclose its duplicative pending State Court
action or its claims against Canico in its Statement of Financial
Affairs and its Schedules.
Canico states that the Disclosure Statement explanation is unclear
regarding the Plan's treatment of the six secured creditors, who
are Canico and the five former members, who purportedly sold their
interests in Canico to the Debtor in early 2013.
Canico says that the Disclosure Statement contains no reliable
information explaining why Debtor's 59.933% economic interest in
Canico is worth the newly-claimed amount of $10,951,722.00 or the
value of $10,787,940.00 claimed in the Debtor's Schedules.
Canico asserts that the Plan faces obvious feasibility problems,
given the lack of evidence of Mike Galam's ability to make a
multi-million dollar payment to unsecured creditors on October 1,
2021, and the lack of any reliable evidence of the value of the
Debtor’s 59.933% interest in Canico.
Canico further asserts that the Plan is legally flawed in its
treatment of the six secured creditors because it is based upon an
uncertain valuation of the 59.933% interest and it provides no
equity cushion to assure them of payment. Instead, the Plan stacks
up the secured claims according to the amount of the claims as of
the petition date, and it ignores accrued interest and future
accruing interest.
A full-text copy of Canico's objection dated April 6, 2021, is
available at https://bit.ly/2QaZ7bR from PacerMonitor.com at no
charge.
Attorneys for Secured Creditor:
HILL, FARRER & BURRILL LLP
Daniel J. McCarthy
One California Plaza
300 S. Grand Avenue, 37th Floor
Los Angeles, California 90071-3147
Telephone: 213.620.0460
Fax: 213.624.4840
dmccarthy@hillfarrer.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. Judge Sheri Bluebond presides over the
case. Leslie Cohen, Esq. at LESLIE COHEN LAW PC, represents the
Debtor.
RIOT BLOCKCHAIN: Signs $651 Million Deal to Acquire Whinstone US
-----------------------------------------------------------------
Riot Blockchain, Inc. has signed a definitive agreement pursuant to
which Riot will acquire Whinstone US, Inc., including all of its
assets and operations, for consideration of $80 million cash plus a
fixed 11.8 million shares of Riot common stock, equal to an implied
total transaction value of approximately $651 million based on
Riot's last closing price of $48.37.
The acquisition of Whinstone is a transformative event for Riot and
its shareholders. Riot views Whinstone as a foundational element
in its strategy to become an industry-leading Bitcoin mining
platform, on a global scale. Upon the closing of this acquisition,
Riot is expected to be the largest publicly-traded Bitcoin mining
and hosting company in North America, as measured by total
developed capacity.
"The acquisition of Whinstone is the most significant achievement
in Riot's growth to-date and positions Riot as an industry leader
in Bitcoin mining," said Jason Les, CEO of Riot. "After the
consummation of this transaction, we will have created a very clear
path for the Company's future growth. Riot will wholly own the
largest Bitcoin mining facility in North America, with very low
power costs, and one of the most talented development teams in the
industry. Whinstone will serve as the foundation of Riot's Bitcoin
mining operations, upon which we will drive our goal of increasing
the American footprint in the global Bitcoin mining landscape."
Riot will be able to continue rapidly scaling its self-mining
business with Whinstone's industry-leading team. Led by Chad
Harris, the Whinstone team has become an industry-leading developer
and operator of Bitcoin hosting facilities over the past two years,
as Bitcoin mining has reached institutional scale. The Whinstone
team is comprised of approximately 100 employees who have built
Whinstone's Texas operations from greenfield to commercialization
in less than twelve months. The talented Whinstone team, combined
with the facility's substantial expansion capacity significantly
de-risks Riot's future operational and financial growth.
Whinstone is based in Rockdale, Texas and its facility is located
on an 100-acre site, hosting Bitcoin mining customers in three
buildings totaling 190,000 square feet. An additional 60,000
square foot building is also under development. The site is
subject to a long-term lease agreement, with electricity provided
via a long-term power supply contract.
Whinstone's site has a total power capacity of 750 MW, with 300 MW
currently developed. Whinstone's facility is believed to be the
largest single facility, as measured by developed capacity, in
North America for Bitcoin mining. In pursuit of achieving the most
efficient power strategy, Whinstone combines fixed low-cost power
agreements, real-time spot power procurement and income from
ancillary power services revenue. Bitcoin miners benefit from
low-cost energy to maximize production margins, benefiting from an
electricity supply with the flexibility to respond rapidly to
supply and demand events in the power market.
Whinstone currently hosts Bitcoin mining operations for three
institutional clients who, by the end of 2021, are expected to
utilize up to 300 MW of aggregate power capacity. In addition to
hosting revenue, Whinstone generates engineering and construction
services revenue from hosting clients on site, including revenue
derived from the fabrication and deployment of immersion cooling
technology for Bitcoin mining.
"We are excited to be joining Riot, as both Riot and Whinstone
share a vision for the future of Bitcoin mining in America," said
Chad Harris, co-founder of Whinstone. "Riot's strategic vision and
resources combined with Whinstone's infrastructure strength will
allow our combined teams to achieve our shared growth plans."
Northern Data AG, a leading developer and operator of
High-Performance-Computing infrastructure solutions, acquired
Whinstone in 2020 and has successfully demonstrated its set of
capabilities in establishing one of the world's largest HPC
centers.
"With Whinstone we have built and established one of the largest
HPC centers in the world with significant potential and scale to
further ramp up capacity. The transaction will provide Riot with
the opportunity to not only utilize Whinstone's existing
operational capacity for their own mining operations but also to
scale capacity and establish themselves as the leading bitcoin
miner in the US. By becoming a minority shareholder in Riot going
forward, through its equity stake in Riot, Northern Data will be
able to benefit from the synergies generated by the transaction and
continues to directly participate in the growth of Bitcoin value
potential."
"Simultaneously, Northern Data will be able to use the cash
proceeds from the transaction to focus on, and further implement,
its decentralized, multi-site, scalable and ESG-focused strategy.
The transaction will allow both companies to further strengthen
their respective core businesses and to substantially accelerate
their strategies," said Aroosh Thillainathan, CEO of Northern
Data.
Upon closing of the transaction, Northern Data will own
approximately 12% percent of the total outstanding common stock of
Riot.
The transaction is expected to close in the second quarter of 2021,
subject to the satisfaction or waiver of customary closing
conditions, including receipt of required regulatory clearances.
XMS Capital Partners, LLC is serving as exclusive financial advisor
and Sidley Austin LLP is serving as legal advisor to Riot.
About Riot Blockchain
Headquartered in Castle Rock, Colorado, Riot Blockchain --
http://www.RiotBlockchain.com-- specializes in cryptocurrency
mining with a focus on bitcoin. The Company is expanding and
upgrading its mining operations by securing the most energy
efficient miners currently available. Riot is headquartered in
Castle Rock, Colorado, and the Company's mining facility operates
out of upstate New York, under a co-location hosting agreement with
Coinmint.
Riot Blockchain reported a net loss of $12.67 million for the year
ended Dec. 31, 2020, compared to a net loss of $20.30 million for
the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$280.15 million in total assets, $3.07 million in total
liabilities, and $277.07 million in total stockholders' equity.
ROLLING HILLS: Case Summary & 7 Unsecured Creditors
---------------------------------------------------
Debtor: Rolling Hills Apartments, LLC
DBA Robert K. Bennett dba Rolling Hills Management
DBA Rolling Hills Apartments
DBA Rolling Hills Apts.
DBA Rolling Hills
DBA RHA
8869 Maya Lane, Apt G
Saint Louis, MO 63136
Business Description: Rolling Hills Apartments is a Single Asset
Real Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: April 9, 2021
Court: United States Bankruptcy Court
Eastern District of Missouri
Case No.: 21-41314
Judge: Hon. Kathy A. Surratt-States
Debtor's Counsel: Robert E. Eggmann, Esq.
CARMODY MACDONALD P.C.
120 S. Central Ave., Suite 1800
Saint Louis, MO 63105
Tel: 314-854-8600
Fax: 314-854-8660
E-mail: ree@carmodymacdonald.com
Total Assets: $3,486,865
Total Liabilities: $3,752,509
The petition was signed by Robert Keith Bennett, manager.
A copy of the petition containing, among other items, a list of the
Debtor's seven unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/LMVLJEY/Rolling_Hills_Apartments_LLC__moebke-21-41314__0001.0.pdf?mcid=tGE4TAMA
S & A RETAIL: Geox Shoes Seller Hits Chapter 11 Bankruptcy
----------------------------------------------------------
Bill Heltzel of the Westchester and Fairfield County Business
Journals reports that Irvington affiliates of Geox shoes, S&A
Retail Inc. and S&A Distribution Inc., have filed for Chapter 11
bankruptcy.
S&A Retail Inc. and S&A Distribution Inc. saw sales drop
precipitously last year, but management believes the brand can
survive by getting out of brick-and-mortar retail.
The "core business model is sound," Bridgette Nally, a corporate
officer states in a March 26, 2021 affidavit, "and sales are
expected to increase as Covid-19 recedes."
The companies have about $7.7 million in assets and $4.2 million in
liabilities.
They are controlled by Geox Holland B.V., a Dutch subsidiary of
Geox S.p.A., Montebulluna, Italy.
Goods are manufactured primarily in the Far East, according to
Nally, shipped to a Canadian subsidiary and then shipped to S&A
Distribution.
S&A Retail sales fell by 55% last year.
It was selling shoes at 14 U.S. stores in 2014, but by early 2020
it was down to two, Aventura Mall near Miami and 34th Street in
Manhattan. Both closed because of the pandemic, though the
Aventura Mall location reopened.
S&A Retail also sells products through the company's website.
Sales for S&A Distribution, the wholesale side of the business,
fell by 40% last year, according to Nally.
Department stores and smaller outlets that carry the brand were
closed because of the pandemic. Prestigious outlets, such as Neiman
Marcus and Lord & Taylor, declared bankruptcy, leaving S&A
Distribution with uncollectible payments.
Nally said the plan is to shed store leases, restructure debt,
"quickly emerge from Chapter 11 as stronger and well-positioned
companies," and focus on e-commerce and wholesale.
Manhattan bankruptcy attorney Joseph T. Moldovan represents the S&A
companies.
Ahout S&A Retail
S&A Retail Inc. and S&A Distribution Inc. sell Geox branded
footwear and apparel through wholesale and e-commerce distribution
channels and at two retail locations in New York and Florida.
Both companies filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y.
Case No. 21-22174 and 21-22175) on March 26, 2021.
S & A Retail estimated assets between $100,000 and $500,000 and
liabilities between $1 million and $10 million. S & A Distribution
listed assets between $1 million and $10 million and liabilities
between $10 million and $50 million.
The Honorable Judge Robert D. Drain is the case judge.
The Debtors tapped MORRISON COHEN LLP, led by Joseph T. Moldovan,
and David J. Kozlowski, as general bankruptcy counsel. RYNIKER
CONSULTANTS, LLC, is the financial advisor. OMNI AGENT SOLUTIONS
DBA OMNI is the claims and noticing agent.
S-EVERGREEN HOLDING: S&P Assigns 'B' ICR, Outlook Stable
--------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to
Bellevue, Wash.-based thrift retailer S-Evergreen Holding Corp.
(Savers).
S&P said, "At the same time, we assigned our 'B' issue-level rating
and '3' recovery rating to the proposed $600 million senior secured
first-lien term loan due in 2028.
"The stable outlook reflects our expectation that sales recovery
and labor-focused operating initiatives will improve profitability
and adjusted leverage to below 5x in 2021."
Savers faces competition from mass merchants and nonprofit thrift
shops. A national footprint of about 300 stores split evenly across
the U.S. and Canada makes it the largest for-profit thrift retailer
in North America. Savers competes against much larger nonprofit
organizations and discounters that have greater resources and more
stable supply chains. Its merchandising strategy, sourcing apparel
and hard goods from nonprofit partners and on-site donations,
introduces some uncertainty into its business model. Historical
deterioration in profitability caused by high-cost, low-quality
suppliers led to supply source and portfolio optimization
initiatives in 2016 and 2017. S&P believes the recent completion of
these initiatives will support profitability and drive traffic
through more stable inventory and higher-quality merchandise
offering. Moreover, long-standing relationships with over 120
nonprofit partners alleviate some uncertainty surrounding the
ability to control merchandise availability and quality.
Savers is somewhat more insulated from online threats than its
traditional retail peers given its treasure hunt experience and the
manually sorted nature of thrift goods. The company's merchandise
is priced 70%-80% below traditional retailers' price equivalent
items, which drives recurring traffic. Nonetheless, S&P continues
to believe narrow scope, inability to control supply, and
competition in thrift retailing threaten Savers' competitive
position.
The company's comparable sales growth is resilient in the U.S. and
Canada despite profit volatility. Savers has generated positive
comparable sales growth for more than 20 consecutive years in both
major geographies, benefiting from its recession-resistant busines
model of affordable prices, value proposition, and trade-down
effect. However, operational missteps by past management and
shifting industry dynamics within the recycling business resulted
in historical performance challenges and deteriorating
profitability. S&P said, "Although we think the majority of
historical issues have abated given the closure of nearly 35
underperforming stores from 2016-2020 and reduced reliance on the
recycling segment for overall profitability (approximately 8% of
EBITDA in 2020 versus 40% in 2015), we believe rising labor costs
will continue to pressure margins over the next 12-24 months."
S&P said, "Savers' business investment plans should drive
performance benefits and improve its competitive position in the
medium term, in our view. Strategic initiatives are focused on
addressing the company's labor-intensive business model to improve
profitability, including significant investment in automated
technology. We believe it will realize benefits from these
initiatives slowly over the next four years, though significant
uncertainty to increased profitability remains based on its track
record. Savers is also focused on improving profitability by
expanding on-site donations, which yield higher-quality goods at
much lower cost. U.S. on-site donations increased to 55% of total
donations in 2019 from 30% in 2012, and Canada on-site donations
increased to 53% of donations in 2019 from 40%. We anticipate the
favorable shift to greater on-site donations to continue over the
next 12-24 months, further supporting margin expansion.
"We expect Savers' S&P Global Ratings-adjusted leverage to be about
high-4x in 2021 before declining to the mid-4x area in 2022.
Although we believe credit measures will improve over the next two
years on earnings improvement, our assessment also reflects the
company's controlling ownership by financial sponsor Ares
Management, which owns 100% of the company pro forma for the
transaction. We expect Savers' financial policies to remain
aggressive and anticipate it could use cash flows or future debt
issuance to fund its growth strategy and shareholder returns.
"The stable outlook reflects our expectation that the company will
gradually recover from the COVID-19 pandemic impact and improve its
EBITDA margin while management executes operational initiatives.
This would result in annual EBITDA recovering to above that of 2019
and S&P Global Ratings-adjusted leverage improving to high-4x by
the end of fiscal 2021."
S&P could lower the rating if:
-- It sustains leverage at about 5.5x, leading to minimal free
operating cash flow (FOCF) generation beyond 2021. This could occur
if revenue recovery is below our expectations due to a prolonged
macroeconomic slowdown or EBITDA margins contract due to
operational setbacks or a less favorable shift in donation mix.
S&P could raise the rating if:
-- Savers executes on strategic initiatives leading to
significantly stronger operating performance, including adjusted
EBITDA margins sustained in the high-teens percentage area. This
could occur from continued positive sales trends, sustained on-site
donations growth, and execution of strategic initiatives leading to
labor efficiencies;
-- The company expands its scale and breadth of operations so that
it reduces the risk of profit volatility in pressured macroeconomic
and operating environments; and
-- S&P believes the company will maintain a less aggressive
financial policy such that the risk of releveraging is low under
the sponsor ownership structure and leverage will remain below the
mid-4x area.
SAHAR P. MONTALVO: Snyders Buying Fishers Property for $1.35M
-------------------------------------------------------------
Sahar P. Montalvo and Lacy J. Montalvo ask the U.S. Bankruptcy
Court for the Southern District of Indiana to authorize the private
sale of the residential real estate located at 12925 Water Ridge
Dr., Fishers, Indiana, to Karina A. Snyder and Mark A. Snyder for
$1.35 million.
Sahar Montalvo began investing in real estate relatively recently
and had interests in several residential properties, including the
Asset, prior to filing the case. In order to bring all those
properties into a single case before the Court, two entities owned
and controlled by the Debtors conveyed their interests in the
properties they owned to Sahar. Such conveyances are expressly and
legally subject to liens and encumbrances existing at the time of
the conveyance.
On Sept. 24, 2020, a purchase offer for sale of the Asset was made
by the Buyers as Buyers to Northgate Redevelopment Group, LLC, the
entity that owned the Asset at the time, as the Seller. After
seven counter offers the parties reached agreement for the sale of
the Asset. The purchase price for the Asset under the Purchase
Agreement is $1.35 million.
The Asset was marketed by a respected realtor using common MIBOR
listing tools that expose the Asset to the market in the widest and
best advertised way known for assets of this nature. The sale
documented by the Purchase Agreement represents the highest and
best offer the Debtors believe will be received for the Asset.
Liens and encumbrances exceed the amount of the purchase price
under the Purchase Agreement. The sale proposed is still in the
best interest of creditors of this estate for the reason that it
will dramatically reduce deficiency claims resulting from the sale,
as a sheriff’s sale of the Asset is the only alternative to the
relief sought in this Motion and that mechanism would not benefit
from the commitment of the buyers under the Purchase Agreement.
The Purchase Agreement was set to close long before the case was
filed but was extended for six months pursuant to the terms of a
Pre-Closing Possession Agreement entered between the Seller and the
Buyers on Dec. 23, 2020. Under that agreement the Buyers paid a
flat amount of $4,500 to occupy the Asset subject to closing until
June 23, 2021. Meanwhile, the Debtors stand the risk of loss and
costs to carry the Asset that do not diminish as the period
expires. Accordingly, time is of the essence.
Informed by title work provided by a reputable title company, the
Debtors believe that the following costs of sale and liens in order
of their priority exist:
a. Debtor's counsel and US Trustee fees due from sale
($11,500) - $1,338,500
b. Hamilton County Assessor (real estate taxes paid in
arrears) ($10,373.50) - $1,328,126.50
c. Realtors' commission and costs to close ($91,000) -
$1,237,126.50
d. Constructive Loans, LLC (1st mortgage) (1,236,000) -
$1,126.50
e. Wenlan Zhao (seller take back mortgage) ($250,000) - $0
f. Fulcrum Investments Company (mechanic's lien) ($56,723) -
$0
g. Arsami Electric (mechanic's lien) ($10,870) - $0
The Debtors submits that sound business justification exists to
sell the Asset at this time and in the manner proposed as described
above to limit deficiency claims that will dilute the distribution
to general unsecured creditors overall in the case.
By the Motion, the Debtors ask the entry of an order (a)
authorizing them to sell the Asset at auction, outside the ordinary
course of business, pursuant to Bankruptcy Code Section 363(b); (b)
authorizing them to sell the Asset free and clear of liens, claims,
encumbrances, and interests, with liens to attach to the proceeds
of sale subject to the approval of the winning bid by the Court;
(c) determining that the purchaser is a good faith purchaser
pursuant to Bankruptcy Code Section 363(m); (d) waiving the 14-day
waiting period under Bankruptcy Rule 6004(h); (e) ordering the
proceeds of sale to be distributed in accordance with the priority
of liens as
determined by the Court; and (f) granting all other just and proper
relief.
Sahar P. Montalvo and Lacy J. Montalvo sought Chapter 11 protection
(Bankr. S.D. Ind. Case No. 21-01235) on March 29, 2021. The
Debtors taped KC Cohen, Esq., as counsel.
SAVE ON COST: Says Covid-19 Impacts Ability to Refinance Debt
-------------------------------------------------------------
Save On Cost Manufacturing, LLC, submitted an Amended Disclosure
Statement describing its Chapter 11 Plan on April 6, 2021.
This is a reorganizing plan. In other words, SOCM proposes to
restructure its debts through the Plan and accomplish payments
under the Plan with funds generated through a refinance loan and,
if necessary, contributions to be made by No Keun Kwak, SOCM's sole
member. SOCM shall have until Aug. 15, 2021, to complete a
refinance, and satisfy the claims of all allowed claimants.
If SOCM is unable to timely complete a refinance, SOCM shall have
until March 15, 2022 to sell the Bellflower Property, unless
extended by the Court for good cause shown. The effective date of
the Plan is 30 days following entry of a final order confirming the
Plan and refinance of the Bellflower Marketplace loan (by August
15, 2021) or sale of the Bellflower Marketplace (by March 15,
2022).
No Keun Kwak is prepared to utilize any net proceeds he may receive
from a refinance of the Manchester Marketplace and/or the Glendale
Residence to facilitate SOCM's reorganization.
The ability to refinance the debt against the Bellflower Plaza has
been negatively affected by the COVID-19 pandemic in two primary
ways. First, lenders have been reluctant to refinance loans secured
by small retail shopping center properties due to the general
economic uncertainty caused by the pandemic. Second, the value of
small retail shopping center properties have become less certain
because of the negative impact of the pandemic has had on the small
business tenants of these small retail shopping center properties.
Fortunately for SOCM, three of its tenants are national companies,
which have been better able to weather the economic downturn caused
by the pandemic. The anticipated future of SOCM has significantly
improved with the rollout of the COVID-19 vaccines, and the opening
up of the Southern California company. While it might take several
months, SOCM is confident a tenant will be found for the one vacant
unit, which will significantly bolster SOCM's ability to obtain a
refinance loan in an amount sufficient to satisfy the allowed
claims of its creditors.
Class 6 consists of General Unsecured Claims in the total amount of
$21,699. General unsecured creditors will receive a dividend of
100% of their claims paid in a lump sum. The source of the payment
will be the net monthly income from operation of SOCM's business,
and a refinance loan or the sale of the Bellflower Marketplace --
in the event a refinance loan cannot be obtained by August 15,
2021.
The Plan will be funded by a refinance loan; and, if necessary,
contributions to be made by No Keun Kwak, SOCM's sole member. If
SOCM is unable to timely complete a refinance, SOCM will sell the
Bellflower Marketplace.
A full-text copy of the Amended Disclosure Statement dated April 6,
2021, is available at https://bit.ly/3t6k2eJ from PacerMonitor.com
at no charge.
Proposed General Insolvency Counsel for the Debtor:
Raymond H. Aver, Esq.
Law Offices of Raymond H. Aver
A Professional Corporation
10801 National Boulevard, Suite 100
Los Angeles, CA 90064
Telephone: (310) 571-3511
Email: ray@averlaw.com
About Save On Cost Manufacturing
Save on Cost Manufacturing, LLC, filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal.
Case No. 21-10057) on Jan. 5, 2021. Jae Sung Kwak, co-manager,
signed the petition. At the time of filing, the Debtor disclosed $1
million to $10 million in both assets and liabilities. Judge Barry
Russell oversees the case. Law Offices of Raymond H. Aver, A
Professional Corporation, serves as the Debtor's counsel.
SCIH SALT: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit on SCIH Salt
Holdings Inc. and removed its ratings on the company from
CreditWatch, where S&P placed them with developing implications on
Feb. 9, 2021.
The stable outlook reflects S&P's view that the company's leverage
will improve but remain high over the next 12 months such that it
maintains debt to EBITDA of more than 7x as it works to integrate
OU Americas.
SCIH Salt is buying K+S Americas' operating unit (OU Americas),
which includes Morton Salt, for $3.2 billion.
The company will fund the acquisition and re-pay its $200 million
second lien term loan primarily with debt totaling $2.7 billion as
well as $993 million of equity from its sponsor.
S&P said, "The acquisition is transformational and improves our
view of SCIH's competitive position, though there are integration
risks associated with an acquisition of this size. The combined
company will be the largest salt company in the world with
anticipated pro forma revenue of about $2 billion and annual
capacity of 29 million tons, which compares with about $430 million
and 5 million tons, respectively, in 2020. The acquisition also
expands SCIH's end-market, geographic, and customer diversity. We
expect the consumer and industrial end markets to be more stable
and less exposed to volatile weather that the end markets for
de-icing salt. On a pro forma basis, SCIH will derive more than
half of its revenue from non-deicing products which it sells to
various end markets in the consumer, food processing, water
softening, industrial, and pharmaceutical industries. The company
will also have greater geographic diversity due to its added
exposure to Eastern Canada and the American East and reduced
dependance on the Great Lakes region. This added diversity will
mitigate the effects of weather volatility in a specific region on
its performance. These positive attributes are somewhat offset by
the risks associated with integrating an acquisition of this size,
as well as the long time frame before we expect it to realize its
targeted synergies from the tie-up.
"We expect SCIH's leverage to remain above 7x over the next 12
months. The company will primarily fund the acquisition with debt,
including $2.7 billion of incremental debt, as well as $993 million
of sponsor equity. SCIH will use the proceeds from this debt to
fund the acquisition and repay its outstanding $200 million
second-lien term loan (unrated). We expect that the company's
leverage could remain elevated above 7x over the next 12 months, or
for even longer, given the size of the transaction and the level of
synergies it expects to realize. While we anticipate that SCIH will
use some of the proceeds from its required sale of U.S. Salt for
debt reduction, the exact amount remains unclear. We also
acknowledge that the company may use some of the proceeds to
finance dividends depending on its leverage requirements.
Historically, SCIH has typically enjoyed minimal capital
expenditure (capex) requirements of about 5% of revenue and
predictable working capital needs. However, we expect the company's
capital spending to increase over the next 12 months due to the
higher capital spending requirements at OU Americas as well as
management's growth initiatives. Specifically, we forecast capital
spending of $135 million in 2021 before declining to about $100
million-$110 million annually thereafter.
"We expect SCIH's profitability to be less volatile given its
reduced exposure to weather-dependent de-icing salt sales. The
demand for de-icing salt is less affected by economic cycles given
its use as an essential public safety product. However, de-icing
salt volumes and prices can vary widely depending on weather
patterns. This leaves companies with a high exposure to de-icing
salt vulnerable to periods of weak winter weather. We now expect
SCIH's revenue exposure to this business to decline to 44% from
about 80% previously. Specifically, we estimate it will derive most
of its revenue (56%) from non-deicing end markets, the demand for
which is not tied to weather conditions. Instead, the demand for
evaporated sale is generally tied to population growth and consumer
tastes, which tend to be more stable. The company's expanded
geographic footprint will also likely lessen the effects of weather
volatility in a specific region on its performance.
"Stable demand that we expect to exceed the domestic supply for
both de-icing and evaporated salt will likely support pricing
increases over time. In addition, the company's acquisition of the
Patillos mine will eliminate its need for more expensive imported
salt. The U.S. is a net importer of salt and no new mines have been
built in the last 60 years. This has led to a long-term positive
supply-and-demand balance for the salt industry that tends to
support steady volumes and price increases. The margins at these
companies have also benefited from their efficient, vertically
integrated production facilities and low-cost canning and packaging
lines. SCIH's acquisition of the Patillos surface mine in Chile
will add about 10 million tons of salt to its annual capacity. The
Patillos mine is the largest surface mine in the world and its
low-cost extraction enables the company to export salt to the U.S.
at favorable prices, which eliminates its need for higher-priced
imported salt.
"The stable outlook reflects our expectation that SCIH's leverage
will improve but remain high over the next 12 months, with debt to
EBITDA remaining above 7x, as it works to integrate OU Americas."
S&P views the acquisition of OU Americas as transformational and
believes it could take time to integrate. S&P could lower its
ratings on SCIH Salt if there are unanticipated challenges with the
integration of OU Americas and delays in its realization of
expected synergies such that:
-- S&P expects its leverage to remain above 7x on a sustained
basis; and
-- S&P anticipates its EBITDA interest coverage will remain below
2x.
S&P could raise its rating on SCIH if its progress in integrating
OU Americas leads them to believe the associated risks are modest
such that:
-- EBITDA margins improve above 25%,
-- Debt to EBITDA declines below 5x and S&P believes its financial
sponsor is committed to maintaining its metrics at these improved
levels.
SEG HOLDING: S&P Upgrades ICR to 'B+' on Better Performance
-----------------------------------------------------------
S&P Global Ratings raised its rating on SEG Holding LLC
(Southeastern Grocers) to 'B+' from 'B'. The outlook is stable. S&P
also withdrew its rating on BI-LO LLC, the borrower entity of the
previous term loan, which has been repaid.
S&P said, "At the same time, we raised our rating on SEG's senior
secured notes to 'BB-' from 'B+'. The '2' recovery rating is
unchanged and indicates our expectation for substantial (70%-90%;
rounded estimate: 70%) recovery in the event of a payment default.
The stable outlook reflects our expectation for relatively solid
performance over the next 12-24 months, following the disposition
of its lower-margin BI-LO banner and exit from the competitive
North Carolina and South Carolina markets.
"The upgrade reflects our view that SEG will be a smaller but
stronger, less leveraged business going forward, with a more
conservative financial policy than we have traditionally seen with
the company." Southeastern Grocers significantly improved its
capital structure over the past year as it directed excess cash
flows and proceeds from the sale of its BI-LO pharmacy business to
repay over $450 million of funded debt. The company repaid its
first in, last out facility and all outstanding balances under its
asset-based loan (ABL) facility. It also reduced the commitment
under its ABL to $450 million from $550 million and replaced its
term loan with $325 million of senior secured notes.
Strong performance in 2020 driven by social distancing mandates
amid the COVID-19 pandemic helped the company generate sufficient
cash to reduce its debt burden. It also experienced strong EBITDA
growth in 2020, leading to S&P Global Ratings-adjusted leverage of
1.9x.
S&P said, "In 2021, we expect same store sales in the
mid-single-digit percent area above 2019 levels, reflecting a
pullback from what we view as unique and partially pandemic-related
2020 same store sales growth of over 15%. Meanwhile, its smaller
store count will also contribute to leverage normalizing in the
low-3x area from the mid-4x area in 2019. Our leverage forecast
contemplates EBITDA margin expanding about 50-100 basis points
relative to 2019 levels, driven largely by the exit of its weaker
BI-LO banner and incremental benefit from continued store renewals.
Based on our expectation for improved credit metrics moving
forward, we have revised our financial risk profile assessment to
significant from aggressive.
"Southeastern Grocers will cease operating its BI-LO banner by the
end of the first quarter (ending April 21, 2021), which we view as
credit positive given its historical underperformance. The company
is in the process of disposing of about 125 stores and exiting the
North and South Carolina markets, which are its most competitive
markets. The divestment process began last year with the sale of
its BI-LO pharmacy business and subsequent sale of 24 of its
grocery stores. The company has reached agreements to sell most of
the remaining stores, with about 35 units remaining that it also
intends to sell. We expect proceeds from these divestments to be
directed toward its store renewal efforts."
The divestment will leave Southeastern Grocers with a smaller base
of 423 more profitable stores, heavily concentrated in Florida and
in the Winn Dixie banner. While its smaller revenue base will
likely have a deleveraging effect on fixed costs, S&P believes the
more productive remaining store base will offset any of this
deleveraging and result in overall EBITDA margin benefit relative
to 2019.
Its store renewal initiative has been transformative, and S&P's
expect continued improving store level productivity metrics over
the next few years. Upon emergence from bankruptcy in 2018,
Southeastern Grocers' prospects were dim, in S&P's view, because it
operated an aged store fleet in highly competitive markets. The
company has thus far executed its turnaround strategy more
successfully than we had anticipated, which has centered on
eliminating its weakest stores and renewing its remaining fleet.
As of the end of fiscal 2020, it had renewed over 50% of its 423
post-divestment stores. S&P said, "We believe the renewal
initiative has benefited store productivity, evidenced by its
average sales per square foot steadily improving to $325 in 2019
from about $300 in 2017, followed by a spike to $390 in 2020. We
anticipate 2021 sales productivity in the $350 per square foot area
as demand moderates relative to 2020. This reflects solid
improvement over 2019 based on a more productive remaining store
base, improved customer retention, and continued renewal efforts.
We also expect lower levels of performance volatility associated
with the remaining store fleet. Accordingly, we have revised our
business risk profile assessment to weak from vulnerable."
S&P said, "We expect Southeastern Grocers to accelerate its store
renewal program and complete renewal of its entire fleet by the end
of 2024. We anticipate proceeds from its planned disposition will
fund some of this initiative and that it may also borrow from its
ABL in future years to fund the heightened capital spending. Even
though the store renewals are necessary for the company to remain
relevant, the associated capital spending is significant.
"In our view, this decreases the company's ability to compete
effectively with large grocery operators and keep up with shifting
consumer expectations. For example, we believe the company lags
competitors in its omni-channel service offering. In its primary
Florida market, Southeastern Grocers faces stiff competition from
well-capitalized operators, including Walmart, Publix, and Aldi,
which all have the resources to quickly react to changing consumer
preferences. We therefore apply a negative comparable sales
analysis modifier."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Health and safety
S&P said, "The stable outlook reflects our view that the
divestiture of the BI-LO banner and continued Winn-Dixie store
renewal initiative should modestly improve store productivity,
which continues to lag industry peers. We expect the company to
generate consistent operating cash flow, while its elevated
discretionary capital expenditures over the next few years could be
funded in part by ABL borrowings."
S&P could lower our rating on Southeastern Grocers if:
-- S&P expected S&P Global Ratings adjusted leverage to exceed
4x;
-- Adjusted EBITDA margin deteriorated below 5.5%, perhaps driven
by lower-than-anticipated productivity improvements from its store
renewal program; or
-- S&P anticipated significant volatility from its concentrated
store base and increasing competitive threats, particularly in the
Florida market.
S&P could raise its rating on Southeastern Grocers if:
-- It demonstrated stable performance with consistently positive
same store sales and gradually improving profit margins, with store
level productivity approaching that of its peers;
-- It maintained adjusted debt-to-EBITDA at least in the low-3x
area on a sustained basis, supported by management's financial
policy; and
-- It completes its planned divestiture and its ongoing store
renewal program progresses according to plan.
SHD LLC: To Seek Confirmation of Plan on May 6
----------------------------------------------
Judge Rebecca B. Connelly has entered an order approving on final
basis the Disclosure Statement of SHD, LLC.
May 6, 2021, at 11:00 a.m., is fixed for the hearing on
confirmation of the Plan, which hearing will be conducted by Zoom.
May 5, 2021, is fixed as the last day for filing and serving
written objections to the Disclosure Statement and confirmation of
the Plan.
About SHD LLC
SHD, LLC filed a voluntary petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Va. Case No. 20-50831) on Nov. 30,
2020. Robert E. Ladd, the manager, signed the petition. At the
time of the filing, the Debtor disclosed assets of between $1
million and $10 million and liabilities of the same range. Woods
Rogers PLC and Elmore Hupp & Company, P.L.C., serve as the Debtor's
legal counsel and financial advisor, respectively.
SHILO INN IDAHO: Plan Exclusivity Extended Thru May 31
------------------------------------------------------
Judge Brian D. Lynch of the U.S. Bankruptcy Court for the Western
District of Washington, Tacoma extended the periods within which
Shilo Inn, Idaho Falls, LLC has the exclusive right to file a Plan
from March 2, 2021, to May 31, 2021, and to solicit acceptances of
its plan from May 1, 2021, to July 30, 2021.
Since the Petition Date, the Debtor has timely filed its bankruptcy
schedules, statement of financial affairs, chapter 11 status
report, all of its required small business debtor filing documents,
attended and concluded the sections 341(a) meeting of creditors,
filed all papers required for reporting to the United States
Trustee and filed all of its monthly operating reports.
Additionally, the Debtor filed all motions required to obtain use
of cash collateral and operate its business as a debtor in
possession within the first days of the case.
The Debtor's primary asset is a hotel, which is collateral for a
certain promissory note originally made in November 2015 and now
held by RSS CGCMT 2017P7-ID SIIF, LLC and serviced by Rialto
Capital Advisors, LLC.
The Debtor filed its application to employ Business Debt Solutions,
Inc. d/b/a Business Capital ("Bizcap") as its financial advisor on
December 8, 2020, which was set for hearing and approved on January
13, 2021. The Debtor requires the assistance of Bizcap as a
financial advisor for searching the market for refinancing loans or
otherwise providing expertise in preparing terms for restructuring
the Loan as a secured debt in a chapter 11 plan.
In early January 2021, Lender filed its motion for relief from
stay, the Debtor filed its objection, and the contested matter is
set for an evidentiary hearing on April 15 and 16, 2021, and
central to the hearing is the issue of the value of the Debtor's
Hotel.
The Debtor submitted that good cause exists to extend the Debtor's
plan exclusivity periods, among other reasons:
(i) there is an evidentiary hearing set for April 15, 2021,
regarding the Hotel, which will be central to the treatment of
Lender's claim in a plan;
(ii) the Debtor requires more time for meaningful discussions with
certain key creditors, including Lender, about its chapter 11 goals
and exit plan, and is not yet ready to propose a Plan;
(iii) this is the Debtor's initial request for extension of the
exclusivity periods; and
(iv) the Debtor is current on all material reporting requirements
under the Bankruptcy Code, Bankruptcy Rules, and Guidelines of the
United States Trustee.
Further, the form and terms of the Debtor's eventual Plan will
likely be influenced by the amount of the Lender's disputed claim,
results of Bizcap's efforts to obtain refinancing, and discussions
with Lender based on Lender's asserted claim and Bizcap's results.
The Debtor is motivated by its desire to pursue a consensual Plan,
for the benefit of all of its creditors, in an orderly fashion and
with minimal expense to the estate. Now with the extension, the
Debtor will be able to work on the issues and not delay their
bankruptcy case any longer.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3cUKFxx from PacerMonitor.com.
A copy of the Court's Extension Order is available at
https://bit.ly/2PJ8gZ3 from PacerMonitor.com.
About Shilo Inn, Idaho Falls, LLC
Shilo Inn, Idaho Falls, LLC filed a Chapter 11 petition (Bankr.
W.D. Wash. Case No. 20-42489) on November 2, 2020. At the time of
filing, the Debtor disclosed up to $50 million in assets and up to
$10 million in liabilities.
Judge Brian D. Lynch oversees the case.
Levene, Neale, Bender, Yoo & Brill LLP, and Stoel Rives LLP serve
as the Debtor's bankruptcy counsel and local counsel, respectively.
Business Debt Solutions, Inc. is the Debtor's financial advisor.
RSS CGCMT 2017P7-ID SIIF, LLC, as the lender, is represented by
Lane Powell PC.
SOUND UNITED: Moody's Assigns 'B2' CFR & Rates New $380MM Loan 'B2'
-------------------------------------------------------------------
Moody's Investors Service assigned ratings to DEI Sales, Inc. (dba
Sound United), including a B2 Corporate Family Rating and a B2-PD
Probability of Default Rating. Concurrently, Moody's assigned a B2
rating to the company's proposed $380 million senior secured first
lien term loan due 2028. The outlook is stable.
Net proceeds from the proposed $380 million first lien term loan,
after paying fees and expenses, are expected to be used to
refinanced approximately $322.3 million of existing debt, and to
pay a $52 million dividend distribution to shareholders. Concurrent
with the transaction, the company will also enter into a new $75
million asset based lending (ABL) revolving facility due 2026
(unrated) that is anticipated to be undrawn at close.
All ratings are subject to Moody's final review of the
documentation.
Assignments:
Issuer: DEI Sales, Inc.
Probability of Default Rating, Assigned B2-PD
Corporate Family Rating, Assigned B2
Senior Secured 1st Lien Term Loan, Assigned B2 ( LGD4)
Outlook Actions:
Issuer: DEI Sales, Inc.
Outlook, Stable
RATINGS RATIONALE
Sound United's B2 CFR broadly reflects its high financial leverage
with debt/EBITDA expected at around 3.9x for fiscal year end March
31, 2021 (ratios are Moody's adjusted, otherwise stated), pro forma
for the proposed transaction and the recent Bowers & Wilkins (B&W)
acquisition. Sound United's core products are discretionary with
exposure to cyclical consumer spending and changes in consumer
preferences and technology trends. In particular, component audio
speakers and AV receivers, the company's largest revenue
contributors, are mature segments of the home audio market and are
exposed to the increased penetration of sound bars, wireless
speakers, and all-in-one devices. Also, the consumer electronics
industry is highly competitive featuring larger players with
greater financial resources, and the company has supplier and
customer concentration. Governance factors consider the company's
aggressive financial policies under private equity ownership,
including high financial leverage, growth through acquisitions
strategy, and debt funded shareholder distributions.
Sound United's credit profile also reflects its solid foothold in
its core audio products with well-known brands in key product
categories that garner some support from a core end customer base
including sound bars, wireless speakers, and all-in-one devices.
The acquisition of B&W further enhanced the company's product
portfolio, adding a well-recognized brand in the premium audio
category with better growth prospects than audio speakers and AV
receivers. Demand for the company's products has been very high
over the past few quarters, benefiting from the increase in
consumer spending on home entertainment. The legacy Sound United
segment reported year-over-year revenue and adjusted EBITDA
(management calculation) growth of 22% and 40% respectively, for
the third quarter ending December 31, 2020. Moody's expects
continued good consumer demand at least thought the first half of
calendar 2021, that combined with the company's historically high
backorder levels should support stable revenue and EBITDA in fiscal
2021. In addition, the company expects to achieve about $24 million
of synergies in the next 12 months. Sound United has good
geographic diversification with almost 50% of sales outside the US,
primarily in Europe and Japan. the company's very good liquidity is
supported by its relatively healthy cash balance of $80 million,
Moody's expectations for free cash flow in the $45-$50 million
range over the next 12 months, and its access to an undrawn $75
million ABL revolver due 2026, and lack of meaningful near-term
debt maturities.
The B2 rating assigned to the company's proposed $380 million first
lien term loan consistent with the CFR reflects the term loans'
preponderance within the company's capital structure.
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
Sound United from the current weak global economic activity and a
gradual recovery for the coming months. Although an economic
recovery is underway, it is tenuous, and its continuation will be
closely tied to containment of the virus. As a result, the degree
of uncertainty around Moody's forecasts is unusually high. Moody's
regards the coronavirus outbreak as a social risk under its ESG
framework, given the substantial implications for public health and
safety. The weak economic conditions experienced because of the
coronavirus pandemic is a unique downturn with mixed effects on
Sound United's business. Country lockdowns and social distancing
measures in efforts to curve the spread of the pandemic negatively
impacted the company's sales and supply chain due to retail stores
and manufacturing facilities closures, as well as equipment
installers inability to access customers' homes. However, home
audio equipment demand subsequently increased to very high levels
as consumers spending shifted to home improvement, and
entertainment activities such as movie theaters closed or
restricted access in 2020. Moody's expects these activities to be
more broadly open in 2021 but still below pre-coronavirus levels
and for consumer demand to continue to be elevated at least through
the first half of 2021.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation for continued good
consumer demand at least through the first half of calendar 2021
combined with Sound United's historically high backorder levels
should support debt/EBITDA leverage remaining at around 3.9x over
the next 12-18 months. The stable outlook also reflects Moody's
expectations the company will maintain good liquidity over the next
12-18 months.
Ratings could be upgraded if the company demonstrates consistent
organic revenue and earnings growth, with debt/EBITDA sustained
below 3.5x, and free cash flow/debt percentage in the high single
digits. A ratings upgrade would also require maintenance of at
least good liquidity and financial policies that support credit
metrics at the above levels.
Ratings could be downgraded if the company's revenue or profit
margin deteriorates, or if debt/EBITDA is sustained above 4.5x.
Ratings could also be downgraded if the company completes a large
debt-financed acquisition or shareholder distribution that
materially increases financial leverage, or if liquidity
deteriorates for any reason including negative free cash flow or
increased reliance on the revolving facility.
The proposed first lien credit agreement contains provisions for
incremental debt capacity up to the greater of $130.0 million and
100% of consolidated pro forma EBITDA for the most recent test
period, plus reallocated amounts under the general debt basket,
plus additional amounts subject to a pro forma first lien senior
secured net leverage requirement not to exceed 3.0x (if pari passu
secured). Up to $65 million of the incremental term loans may be
incurred with an earlier maturity date than the initial term loans.
Subsidiaries must provide guarantees whether or not wholly-owned,
eliminating the risk that guarantees will be released because they
cease to be wholly-owned. There are no express "blocker" provisions
which prohibit the transfer of specified assets to unrestricted
subsidiaries; such transfers are permitted subject to carve-out
capacity and other conditions. There are no express protective
provisions prohibiting an up-tiering transaction. The proposed
terms and the final terms of the credit agreement can be materially
different.
The principal methodology used in these ratings was Consumer
Durables Industry published in April 2017.
Headquartered in Vista, California, DEI Sales, Inc. through its
subsidiary Sound United, LLC (Sound United) is a designer and
manufacturer of home audio equipment under brands Denon, Polk
Audio, Marantz, Definitive Technology, HEOS, Classe, Boston
Acoustics, and Bowers & Wilkins. Pro forma for the B&W Acquisition
annual revenue are approximately $800 million. The company has been
majority-owned by affiliates of Charlesbank Capital Partners, LLC
since 2011, with FS KKR Capital Corp holding a minority stake since
2020.
STATION CASINOS: Moody's Affirms B2 CFR & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service affirmed Station Casinos LLC's Corporate
Family Rating of B2 and Probability of Default Rating of B2-PD. The
company's existing senior secured revolver and term loans were
affirmed at B1, and the company's existing senior unsecured notes
were affirmed at Caa1. The company's Speculative Grade Liquidity
rating remains SGL-2 and the outlook was changed to stable from
negative.
The change in outlook to stable and affirmation of Station's B2 CFR
considers the strong operating performance since the company's
casinos have reopened, supported by the company's good liquidity
including robust free cash flow generation and full revolver
availability. Even as revenue remains below pre-pandemic levels,
the company has been able to improve EBITDA margins significantly
and increase absolute EBITDA levels back above pre-pandemic levels
for Q3 and Q4 2020 following the closures in Q1 and Q2 of 2020.
Affirmations:
Issuer: Station Casinos LLC
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured Bank Credit Facility, Affirmed B1 (LGD3)
Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 (LGD5)
Outlook Actions:
Issuer: Station Casinos LLC
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Station Casinos LLC's B2 CFR reflects the meaningful earnings
decline from efforts to contain the coronavirus and the potential
for a slow or uneven recovery as most properties have reopened. The
rating is supported by historically stable operating results,
limited supply growth, solid margins, positive free cash flow
before growth capex and good liquidity. Station is constrained due
to its limited geographic diversification and earnings
vulnerability to changes in the general economic environment given
the highly discretionary nature of consumer spending on casino
gaming. Moody's projects Station's debt-to-EBITDA leverage will
decline to a mid-5x range in 2021 from near 8x at year end 2020
because the company's earnings continue to recover from the weak
first half of 2020. EBITDA remains constrained by social distancing
and pandemic related restrictions and Moody's expects that EBITDA
margins will decline from very high levels when competing
entertainment alternatives are restored, and facility services and
marketing ramp back up over time. As a casino operator, social risk
is elevated, as evolving consumer preferences related to
entertainment choices and population demographics may drive a
change in demand away from traditional casino-style gaming.
Station's speculative-grade liquidity rating of SGL-2 reflects good
liquidity and that largely all of the company's casinos have
reopened and have demonstrated EBITDA margin improvement, while
generating strong free cash flow of over $250 million for Q3 and Q4
2020. As of December 31, 2020, the company had $121 million of
cash, and an undrawn $1.03 billion revolving credit facility due
February 2025. Moody's estimates the company could maintain
sufficient internal cash sources after maintenance capital
expenditures to meet required annual amortization and interest
requirements assuming a sizeable decline in annual EBITDA. Station
has no near-term debt maturities, with its nearest maturity in 2025
given its recent refinancing in 2020. The company's term loan A
matures in February 2025, term loan B is due February 2027, and
notes mature in 2025 and 2028. Station's bank credit facilities
contain a minimum interest coverage ratio and a maximum total
leverage ratio test. The company was in compliance with these
covenants at year end 2020 given the ability to add to covenant
EBITDA cash distributions funded from the revolver draw that were
initially made to an unrestricted subsidiary and returned to the
restricted group to repay the revolver. Moody's anticipates the
company will remain in compliance with the covenants despite the
runoff in this adjustment because earnings will recover from the
weak levels experienced in the first half of 2020.
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
Station from the current weak US economic activity and a gradual
recovery for the coming year. Although an economic recovery is
underway, it is tenuous, and its continuation will be closely tied
to containment of the virus. As a result, the degree of uncertainty
around Moody's 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 gaming sector has been one of the sectors most significantly
affected by the shock given its sensitivity to consumer demand and
sentiment. More specifically, the weaknesses in Station's credit
profile, including its exposure to travel disruptions and
discretionary consumer spending have left it vulnerable to shifts
in market sentiment in these unprecedented operating conditions and
Station remains vulnerable to the outbreak continuing to spread.
Governance risk includes concentration of control by the Fertitta
family who has shown a willingness to increase leverage to support
development spending. However, the company has stated leverage
targets which include the use of free cash flow to reduce leverage
levels. Moody's expect leverage will come down in coming months
from improved performance and debt reduction. Leverage is currently
elevated above Moody's expectations as a result of the impact of
the coronavirus on operations, but is projected to decline.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook considers the recovery in the company's business
and margin improvement exhibited in Q3 and Q4 2020, and the
expectation for sustained improvement in 2021. The stable outlook
also incorporates the company's good liquidity and the expectation
for leverage to continue to come down from current levels as the
business continues to recover and debt is reduced. Station remains
vulnerable to travel disruptions and unfavorable sudden shifts in
discretionary consumer spending and the uncertainty regarding the
sustainable EBITDA margin and the pace at which consumer spending
at reopened gaming properties will recover.
Ratings could be downgraded if liquidity deteriorates or if Moody's
anticipates Station's earnings recovery will take longer or be more
prolonged because of actions to contain the spread of the virus or
reductions in discretionary consumer spending. Debt-to-EBITDA
leverage sustained over 6x could result in a downgrade.
Ratings could be upgraded if the company's facilities remain open
and earnings recover such that consistent and comfortably positive
free cash flow and reinvestment flexibility is fully restored, and
debt-to-EBITDA is sustained below 5.25x.
The principal methodology used in these ratings was Gaming
Methodology published in October 2020.
Station Casinos LLC owns and operates ten major hotel/casino
properties and ten smaller casino properties (three of which are
50% owned) in the Las Vegas metropolitan area. Station managed the
Graton Resort & Casino located in Sonoma County, CA on behalf of
The Federated Indians of Graton Rancheria through February 5, 2021.
Station's net revenue for the LTM period ended December 31, 2020
was $1.18 billion. Station is owned by Red Rock Resorts, Inc., a
publicly traded holding company whose principal asset is Station.
Red Rock Resorts owns Station Casinos LLC; The Fertitta family
controls approximately 86% of the voting rights and 40% of the
economic interest in Red Rock Resorts.
STEIN MART: Ch.11 Plan Okayed After Deal to Fix Litigation Releases
-------------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that Stein Mart Inc. won
approval to wind down in bankruptcy after agreeing to amend
litigation release language in its Chapter 11 plan that caused the
court to reject an earlier version.
The department store chain will revise the plan to satisfy the
court and concerns from the U.S. Trustee, the Justice Department's
bankruptcy watchdog, Stein Mart's attorney, Gardner Davis of Foley
& Lardner LLP, said at a hearing Thursday, April 7, 2020.
"It's a liquidating case," said Judge Jerry A. Funk of the U.S.
Bankruptcy Court for the Middle District of Florida. "I don't know
what they would sue on anyway."
About Stein Mart Inc.
Stein Mart, Inc. -- http://www.SteinMart.com/-- was a national
specialty omni off-price retailer offering designer and name-brand
fashion apparel, home decor, accessories, and shoes at everyday
discount prices. The company operated 281 stores across 30
states.
Stein Mart Inc. and its affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. M.D. Fla. Case Nos. 20-02387 to
20-02389) on Aug. 12, 2020. As of May 2, 2020, the Debtors had
total assets of $757.6 million and total liabilities of $791.2
million. Judge Jerry A. Funk oversees the cases. The Debtors tapped
Foley & Lardner LLP as their legal counsel, Clear Thinking Group
LLC as a financial advisor, and Stretto as claims and noticing
agent.
STEPHENS FARMS: Creditor Rabo AgriFinance Files Liquidating Plan
----------------------------------------------------------------
Rabo AgriFinance LLC, a creditor of debtor Stephens Farms, has
filed a Plan of Liquidation and a Disclosure Statement for the
Debtor on April 6, 2021.
Rabo filed the Plan of Liquidation because Rabo believes that the
Debtor's Plan filed on August 31, 2020, was not proposed in good
faith, is not feasible and is not fair and equitable to creditors
because the Plan proposes to pay less than the value of the
property of the Debtor to creditors while proposing that equity
security holders retain full, complete and exclusive ownership of
the Debtor to the significant detriment to its creditors.
The Debtor is a Tennessee partnership with Gerald W. Stephens and
Riley W. Stephens as general partners. Gerald Stephens is and has
been the managing partner of the Debtor. Other insiders of the
Debtor are Lori Stephens and Susie Stephens. It operates a row
crop and livestock farming operation. It owns certain real and
personal property that is used for farming operations.
In April 2015, the Debtor obtained a line of credit in the amount
of $2,100,000 from Rabo to fund its row crop and cattle operations.
The Line of Credit matured in June 2017 at which time the full
amount became due and payable. In the summer of 2019 when
negotiations for renewal and extension of the Line of Credit
failed, Rabo made demand upon the Debtor for payment of the Line of
Credit.
Class 1 consists of the Allowed Secured Claim of Rabo in the
aggregate amount of $90,000. The Rabo Secured Claim will be paid
from the liquidation of the Debtor's livestock by the Plan
Administrator. The liquidation will occur as soon as practical and
reasonable, but in no event later than 90 days from the Effective
Date, and in a commercially reasonable manner. Interest shall
accrue at fixed rate of 5.25% per annum.
Class 4 will consist of all Allowed General Unsecured Claims.
These allowed Claims shall be paid pro rata with other Allowed
Claims in this Class from the liquidation of the assets of the
estate. Post-petition and post-confirmation interest will not
accrue or be paid on claims in this class.
Class 5 consists of the ownership interests of the Debtor in
property of the estate. These interests will continue in existence
under the Plan in all property of the estate.
The Debtor's primary source for implementation of this Plan is the
liquidation of the livestock and the marketing and sale of the real
property of the Estate. All of the property of the estate shall
remain property of the estate and shall not vest in the Debtor at
confirmation.
Marianna Williams is appointed as the Plan Administrator Agent to
administer the Plan. The Plan Administrator shall be compensated on
the distributions made to creditors under the Plan. Upon the
Effective Date of the Plan, the Plan Administrator shall undertake
reasonable and prudent measures and means to liquidate the personal
property assets, including the Debtor's cattle, as efficiently and
effectively as possible to maximize the value of the assets while
minimizing the expenses and burdens on the Debtor.
Comparison with Debtor's Plan
Rabo's Plan provides a much greater distribution to creditors
within a much shorter time period without the significant risk that
follows the Debtor's Plan. Rabo's Plan would realize the equity in
the Debtor's Real Property through the orderly liquidation of
assets over a period of 12 to 18 months. The Debtor's Plan asserts
that there is no equity in the Real Property and therefore does not
propose any distribution to unsecured creditors from these assets.
However, recent appraisals in February 2021 obtained by Rabo shows
that there is over $1,000,000 in equity in the Real Property that
can be realized and distributed to unsecured creditors.
The short marketing period proposed in Rabo's Plan allows
sufficient time to expose the Real Property to realize its fair
market value. This orderly liquidation has very little risk because
the Plan Administrator can assess any offer to determine if they
are consistent with the Real Property's fair market value and can
reject any that are not. Also, if the Plan Administrator feels that
additional marketing would maximize the return to creditors, the
Plan Administrator can extend the Marketing Period to up to 18
months. Secured creditors' rights are protected because they
retain their rights under § 363(k) to ensure the Real Property is
sold for its fair value.
Lastly, unlike the Debtor's Plan, Rabo's Plan is not dependent on
the success of the Debtor's row crop and cattle operations. The
Debtor must generate enough net operating income to pay the annual
debt service to the secured creditors and enough profits associated
with the Debtor's Plan. If the 2020 crop season is any indication,
the Debtor's Plan will fail. The Debtor's Plan projected that the
Debtor would net $140,000 from its 2020 crop season and those funds
would be distributed to unsecured creditors. However, given that
the Debtor has only $8,147 in the bank after all of the 2020 crops
have been sold and expenses paid, the Debtor missed its projections
by over $132,000.
A full-text copy of Rabo's Liquidating Plan dated April 6, 2021, is
available at https://bit.ly/3myQST3 from PacerMonitor.com at no
charge.
Attorneys for Rabo AgriFinance:
Ronald G. Steen, Jr.
Phillip G. Young, Jr.
Thompson Burton PLLC
6100 Tower Circle, Suite 200
Franklin, TN 37067
Tel: 615-465-6000
Fax: 615-807-3048
Email: phillip@thompsonburton.com
ronn@thompsonburton.com
- and -
James S. Livermon, III
Womble Bond Dickinson (US) LLP
555 Fayetteville Street, Suite 1100
Raleigh, NC 27601
Telephone: (919) 755-2148
Charlie.Livermon@wbd-us.com
About Stephens Farms
Stephens Farms filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 20
10599) on March 18, 2020. At the time of filing, the Debtor
estimated $1,000,001 to $10 million in both assets and liabilities.
C. Jerome Teel, Jr., ESq. at Teel & Maroney, PLC represents the
Debtor as counsel.
STERN HOLDINGS: Seeks to Hire Abbasi Law Corp. as Legal Counsel
---------------------------------------------------------------
Stern Holdings, Inc. seeks approval from the U.S. Bankruptcy Court
for the Central District of California to hire Abbasi Law
Corporation as its legal counsel.
The firm's services include:
a. representing the Debtor at its initial interview;
b. representing the Debtor at the meeting of creditors;
c. representing the Debtor at court hearings;
d. preparing legal papers;
e. advising the Debtor regarding matters of bankruptcy law,
including its rights and remedies with respect to its assets and
claims of its creditors;
f. representing the Debtor in all contested matters;
g. representing the Debtor with regard to the preparation of a
disclosure statement and the negotiation, preparation, and
implementation of a plan of reorganization;
h. analyzing any secured, priority or general unsecured claims
that have been filed in the Debtor's Chapter 11 case;
i. negotiating with creditors regarding the amount and payment
of their claims;
j. objecting to claims as may be appropriate;
k. advising the Debtor with respect to its powers and duties
in the continued operation of its business;
l. advising the Debtor on general corporate, securities, real
estate, litigation, environmental, state regulatory and other legal
matters, which may arise during the pendency of its case; and
m. other legal services necessary to administer the case.
The firm will be paid at these rates:
Attorneys $325 per hour
Paralegals $60 per hour
Law Clerks $25 per hour
Prior to the commencement of the case, the firm received from the
Debtor a retainer in the amount of $7,500, and $1,738 for the
filing fee.
Abbasi Law will also be reimbursed for out-of-pocket expenses
incurred.
Matthew Abbasi, a partner of Abbasi Law, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
Abbasi Law can be reached at:
Matthew Abbasi, Esq.
Abbasi Law Corporation
6320 Canoga Ave., Suite 220
Woodland Hills, CA 91367
Tel: (310) 358-9341
Fax: (888) 709-5448
Email: matthew@malawgroup.com
About Stern Holdings
Stern Holdings, Inc. filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Court (Bankr. C.D. Calif. Case No.
21-11352) on Feb. 19, 2021. Shahin Melamed, authorized officer and
owner, signed the petition. At the time of the filing, the Debtor
was estimated to have assets of less than $50,000 and liabilities
of $1 million to $10 million. Judge Neil W. Bason oversees the
case. Matthew Abbasi, Esq., at Abbasi Law Corporation, represents
the Debtor as legal counsel.
STONEMOR INC: Units Complete $6.2M Sale of Assets to Clearstone
---------------------------------------------------------------
StoneMor Inc.'s wholly-owned indirect subsidiaries, StoneMor Oregon
LLC, StoneMor Oregon Subsidiary LLC and StoneMor Washington, Inc.,
completed the previously announced sale of substantially all of the
company's assets in Oregon and Washington.
The assets, which consist of nine cemeteries, 10 funeral
establishments and four crematories, were sold pursuant to the
terms of an Asset Sale Agreement with Clearstone Memorial Partners,
LLC for a net cash purchase price of $6.2 million, subject to
certain adjustments.
StoneMor Inc. intends to use at least 80% of the net proceeds from
such sale and the net proceeds from certain other real estate sales
to redeem an additional $6.7 million of principal amount of its
9.875%/11.500% Senior Secured PIK Toggle Notes due 2024 in
accordance with the terms of the indenture governing those notes.
About StoneMor Inc.
StoneMor Inc. (http://www.stonemor.com),headquartered in Bensalem,
Pennsylvania, is an owner and operator of cemeteries and funeral
homes in the United States, with 313 cemeteries and 80 funeral
homes in 26 states and Puerto Rico. StoneMor's cemetery products
and services, which are sold on both a pre-need (before death) and
at-need (at death) basis, include: burial lots, lawn and mausoleum
crypts, burial vaults, caskets, memorials, and all services which
provide for the installation of this merchandise.
StoneMor reported a net loss of $8.36 million for the year ended
Dec. 31, 2020, compared to a net loss of $151.94 million for the
year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had
$1.63 billion in total assets, $1.72 billion in total liabilities,
and a total owners' equity of($92.41 million).
SUNCOKE ENERGY: Moody's Affirms B1 CFR & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Investors Service changed the ratings outlook for SunCoke
Energy, Inc. from negative to stable. At the same time, Moody's
affirmed SunCoke's corporate family rating of B1, the probability
of default rating of B1-PD and the B2 rating of senior unsecured
notes of SunCoke Energy Partners, L.P. (SXCP) which are guaranteed
by SunCoke. The Speculative Grade Liquidity Rating remains SGL-2.
"The change in the outlook to stable reflects a significant
improvement in the North American steel industry conditions and the
renewal and the extension of the company's cokemaking take-or-pay
contracts that were previously set to expire in 2020 and 2021,"
said Botir Sharipov, Vice President and lead analyst for SunCoke
Energy, Inc.
Affirmations:
Issuer: SunCoke Energy, Inc.
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Issuer: SunCoke Energy Partners, L.P.
Gtd Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD5)
Outlook Actions:
Issuer: SunCoke Energy Partners, L.P.
Outlook, Changed To Stable From Negative
Issuer: SunCoke Energy, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
SunCoke's B1 corporate family rating reflects its still moderate
leverage and relative earnings stability offered by its long-term
take-or-pay contracts with pass-through provisions, offset by
potential event risk related to high customer concentration and the
company's exposure to the volatile steel and coal industries. The
ratings acknowledge the strength of SunCoke's relationships with
its steelmaking customers, which despite the headwinds faced by the
steel industry in the past, either continued to take the contracted
deliveries, made make-whole payments to the company or demonstrated
willingness to extend the contracts on largely similar terms in
exchange for a coke supply relief. The company's coke supply
contracts allow for pass-through, with some variation in contract
structure, of most costs, including metallurgical coal, the
principal raw material input and largest cost component in the
coke-making process. The ratings also acknowledge that the
company's portfolio of efficient and technologically advanced coke
batteries gives it a distinct competitive advantage over other
aging cokemaking facilities in North America that are likely to
continue to close due to environmental challenges and rising
costs.
SunCoke faced substantial uncertainty coming into 2020. Coke supply
contracts representing 43% of its cokemaking capacity were set to
expire in 2020-2021 amid weakening, at the time, domestic steel
industry conditions. The industry environment worsened in 1H 2020
due to pandemic-related steel mill shutdowns, weaker demand in the
automotive and Oil Country Tubular Goods (OCTG) sector and along
with service center destocking, contributed to a significant steel
price declines in the first half. Steel prices surged in late 2020
and in 2021 on a temporary supply/demand dislocation driven a
quicker-than-expected economic recovery, curtailed steel capacity
and the need to refill inventories amid strong consumer demand.
Despite what was a challenging operating environment, SunCoke was
able to renew and extend its contracts with key customers AK Steel
and ArcelorMittal USA (now Cleveland-Cliffs Inc. (B2 stable)) to
2025 in exchange for a relief on a portion of volumes. The Indiana
Harbor coke supply agreement that expires in October 2023 now
represents the nearest contract maturity. In addition to lower
volumes in 2020, SunCoke agreed to a combined Haverhill I and
Jewell supply reductions of 470kt of coke in 2021 and 870kt
bringing total contracted domestic coke volumes to about 3.8
million tons in 2021 and 3.4 million tons in 2022. The company
plans to export the remaining produced met coke volumes and has
converted a portion of the its cokemaking capacity to produce
foundry coke for the domestic market.
SunCoke generated $211 million in Moody's-adjusted EBITDA and $64
million in free cash flow in 2020. Following the repayment of about
$110m of SXCP notes, Debt/ EBITDA, as adjusted, stood at 3.3x at
December 31, 2020, effectively unchanged from 2019 with lower
quantum of debt offsetting lower earnings. Moody's expects the
adjusted EBITDA in the range of $205-215 million and that SunCoke
will remain free cash flow positive in 2021, which will support
further debt reduction and help maintain adjusted leverage in the
3.0x-3.3x range. Moody's estimates that Logistics segment will
contribute at least $20 million to the company's EBITDA in 2021.
The stable outlook reflects an improvement in the North American
steel industry conditions, the resolution around the company's
take-or-pay coke contracts that were due to expire 2020-2021 and
the expected stabilization of the company's operating profile in
2021.
As a producer of coke and a supplier of key input ingredient for
the steel industry, SunCoke is exposed to elevated environmental
social and governance risks. SunCoke, like all producers of
carbon-based products is subject to numerous regulations including
environmental laws aimed at reducing greenhouse gas and air
pollution emissions, among a number of other sustainability issues
and will likely incur costs to meet increasingly stringent
regulations. As of December 31, 2020, the company also had $64.6
million in obligations for coal workers' black lung benefits
related to its legacy coal mining business.
SunCoke's SGL-2 speculative grade liquidity rating reflects its
good liquidity, supported by $48 million in cash as of December 31,
2020 and $300 million available under the $400 million revolving
credit facility. Moody's expect SunCoke to be in compliance with
the restrictive financial covenants under the credit agreement,
which include maximum consolidated leverage ratio of 4.50x and a
minimum consolidated interest coverage ratio of 2.50x.
Substantially all assets that could be pledged are encumbered under
the terms of the credit agreement and Moody's do not view asset
sales as representing an additional source of liquidity.
The B2 rating on SXCP's senior unsecured notes, which are
guaranteed by SunCoke, reflect their relative position in the
capital structure with respect to claim on collateral behind
SunCoke's secured revolver.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade is unlikely in the near term but would be considered if
the company continues to reduce debt, establishes a strong market
position in the domestic foundry market or is able to successfully
export coke on a sustained basis to supplement, if required, coke
sales under the long-term take-or-pay contracts with domestic
steelmakers. Quantitatively, the ratings could be upgraded if Debt/
EBITDA, as adjusted by Moody's, were expected to be maintained
below 2.5x on a sustained basis. The ratings could be downgraded if
liquidity were to deteriorate or if Debt/ EBITDA, as adjusted, were
expected to exceed and sustain above 4.0x.
SunCoke Energy, Inc. is the largest independent US based producer
of coke, a key ingredient in the production of steel in blast
furnace steel operations. The company owns and operates five
metallurgical coke making facilities in the US, and also operates a
cokemaking facility in Brazil on behalf of ArcelorMittal (Ba1
stable). The company's logistics business comprised of 4 terminals,
provides handling and mixing services to steel, electricity
utility, coke and coal producing and other manufacturing companies.
The company generated $1.3 billion in revenues in 2020.
The principal methodology used in these ratings was Steel Industry
published in September 2017.
TD HOLDINGS: Delays Filing of 2020 Annual Report
------------------------------------------------
TD Holdings, Inc. filed a Form 12b-25 with the Securities and
Exchange Commission notifying the delay in the filing of its Annual
Report on Form 10-K for the year ended Dec. 31, 2020.
TD Holdings was unable to file its Annual Report on a timely basis
because it requires additional time to finalize the 2020 Quarterly
Reports for the periods ended March 31, 2020, June 30, 2020, and
September 30, 2020. The Company anticipates that it will file the
Form 10-K no later than the fifteenth calendar day following the
prescribed extended filing date relying on the Order (Release No.
34-88318) issued by the SEC.
On March 26, 2021, the Audit Committee of the Board of Directors of
TD Holdings, after discussion with the management, concluded that
the Company's previously issued financial statements contained in
its Quarterly Reports on Form 10-Q for the periods ended March 31,
2020, June 30, 2020, and Sept. 30, 2020, originally filed on June
26, 2020, Aug. 14, 2020, and Nov. 13, 2020, respectively, should no
longer be relied upon.
It is expected that for the fiscal year ended Dec. 31, 2020, the
Company will report a net loss of approximately $12.4 million
compared to a net loss of approximately $5.9 million for the fiscal
year ended Dec. 31, 2019.
About TD Holdings
Headquartered in Beijing, People's Republic of China, TD Holdings,
Inc., (formerly known as Bat Group, Inc.) has become a used
luxurious car leasing business as well as a commodities trading
business operating in China since the disposition of its direct
loans, loan guarantees and financial leasing services to
small-to-medium sized businesses, farmers and individuals in July
2018. The Company's current operations consist of leasing of
luxurious pre-owned automobiles and operation of a non-ferrous
metal commodities trading business.
For the year ended Dec. 31, 2019, the Company incurred net loss
from continuing operations of approximately $6.94 million, and
reported cash outflows of approximately $2.17 million from
operating activities. The Company said these factors caused
concern as to its liquidity as of Dec. 31, 2019.
TECT AEROSPACE: April 15 Deadline Set for Panel Questionnaires
--------------------------------------------------------------
The United States Trustee is soliciting members for an unsecured
creditors committee in the bankruptcy case of TECT Aerospace Group
Holdings.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a Questionnaire
available at https://bit.ly/3uIkmAF and return it to
Linda.Casey@usdoj.gov at the Office of the United States Trustee so
that it is received no later than 4:00 p.m., on Thursday, April 15,
2021.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About TECT Aerospace
TECT Aerospace Group Holdings, Inc., and its affiliates manufacture
high precision components and assemblies for the aerospace
industry, specializing in complex structural and mechanical
assemblies, and, machined components for a variety of aerospace
applications. The Debtors produce assemblies and parts used in
flight controls, fuselage/interior structures, doors, wings,
landing gear, and cockpits.
The Debtors operate manufacturing facilities in Everett,
Washington, and Park City and Wellington, Kansas and their
corporate headquarters is located in Wichita, Kansas. The Debtors
currently employ approximately 400 individuals nationwide.
The Debtors are privately held companies owned by Glass Holdings,
LLC and related Glass owned or Glass controlled entities.
TECT Aerospace Group Holdings, Inc., and 6 affiliates sought
Chapter 11 protection (Bankr. D. Del. Case No. 21-10670) on April
6, 2021.
TECT Aerospace estimated assets of $50 million to $100 million and
liabilities of $100 million to $500 million as of the bankruptcy
filing.
The Debtors tapped RICHARDS, LAYTON & FINGER, P.A., as counsel;
WINTER HARBOR, LLC, as restructuring advisor; and IMPERIAL CAPITAL,
LLC, as investment banker. KURTZMAN CARSON CONSULTANTS LLC is the
claims agent.
THREESQUARE LLC: US Trustee Opposes Amended Disclosures
-------------------------------------------------------
John P. Fitzgerald, III, Acting United States Trustee for Region
Four, objects to the Amended Disclosure Statement of ThreeSquare,
LLC.
The United States Trustee claims that the debtor has not filed
post-petition income tax returns as required. Although the debtor
is a pass-through entity, it is required to file income tax returns
even if attached to the income tax returns filed by its principals,
David and Monica Levine.
The United States Trustee points out that no reason for the
increased management fee is given, nor does the debtor disclose
what will occur should the management arrangement with the Levines
not be renewed beyond the one-year term, or for that matter how the
debtor will fund its proposed plan if the Levine's default under
the terms of the management agreement.
The United States Trustee asserts that the Amended Disclosure
Statement fails to adequately describe valuation of assets in the
liquidation analysis. The debtor values the East German Street
property at $250,000 on the schedules. The Jefferson County
Assessor values the property at $334,500.
The United States Trustee further asserts that the Amended
Disclosure Statement states that attorney fees/professional
fees/UST fees are classified as administrative claims (designated
as Class I). The debtor states these claims will be paid by either
the debtor (in the case of UST fees) or David and Monica Levine (in
the case of professional fees), but provides no estimated amount
for these claims.
The United States Trustee states that the debtor does not disclose
how it arrived at the estimated reduced secured debt payment amount
of $1,500 in month 38 of the plan, nor does the debtor disclose
what financing terms the debtor would require from an alternative
lender to reduce its monthly secured debt payment from $1,675 to
$1,500.
A full-text copy of the United States Trustee's objection dated
April 6, 2021, is available at https://bit.ly/3t5Dzf6 from
PacerMonitor.com at no charge.
About ThreeSquare LLC
ThreeSquare, LLC, a West Virginia corporation which has been in
business since 2002, with business consists of renting commercial
property for retail and/or office space to interested tenants.
The Debtor filed a Chapter 11 bankruptcy petition (Bankr. N.D.
W.Va. Case No. 19-00975) on Nov. 12, 2019. The Debtor was
estimated to have $500,001 to $1 million in assets and less than
$10 million in liabilities. Judge Frank W. Volk oversees the case.
The Debtor hired Turner & Johns, PLLC, as its legal counsel.
TI FLUID: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
---------------------------------------------------------
S&P Global Ratings affirmed the 'BB-' issuer credit rating and
revised the outlook on TI Fluid Systems PLC (TI) to stable from
negative.
The stable outlook reflects S&P's view that the company's free
operating cash flow (FOCF) to debt will remain above 5% over the
next 12 months.
TI plans to issue EUR600 million in senior unsecured notes maturing
in 2029. S&P assigned a 'B+' issue-level and '5' recovery rating to
these notes.
The company will use net proceeds from the offering to pay down a
portion of its outstanding USD and EUR term loans. As a result, S&P
raised the issue-level on the secured debt to 'BB+' from 'BB-'; the
recovery rating on this debt is '1'.
TI's success in decreasing costs in response to falling
light-vehicle demand in 2020 underscores the resiliency of its
business. With the impact of COVID-19 pandemic, TI's reported
revenue declined 17.5% in line with the decrease in global
light-vehicle production. However, the company achieved solid
margins and positive free cash flow generation, driven by its
flexible cost structure and financial discipline. Vehicle
production declined in all regions due to the effect of
government-mandated shutdowns of industry and lockdowns of the
population. Revenue in Europe showed underperformance due to
program ramp downs in its Fuel Tank and Delivery Systems business,
partially offset by new battery electric vehicle (BEV) launches in
its Fuel Carrying Systems business. North American revenue declined
due to program ramp-downs in its powertrain business and its
under-indexed position versus large pickups and large SUVS.
Nevertheless, margins held up reasonably well. TI's adjusted EBIT
came in at 6.2% and its adjusted EBITDA margin was 11.8%. The
company has targeted a 16% reduction of its fixed costs through
various restructuring actions, including six plant closures in
Europe and the U.S. as well as cutbacks in headcount. In addition
to its well-balanced manufacturing footprint around the world, TI's
success in adjusting costs in different volume environments
contributes to the resiliency of its business model.
S&P said, "We believe a key priority of the company is to
deleverage its balance sheet and improve credit metrics. We see
TI's financial policy as generally strengthening key credit
metrics. TI aims to grow its business through spending as a
percentage of sales on capitalized research and development and
capex. While investing in the business will expand margins, the
company acknowledges that expanding margins alone will not be
enough to achieve its long-term debt leverage targets. TI plans to
reduce net debt levels to between 1x-1.5x in line with those of its
European auto supplier peers. Therefore, the company's ongoing free
cash flow generation will play an important role in reaching its
target. We expect debt to EBITDA and free operating cash flow to
debt to improve in 2021 and 2022."
The company has positioned itself to become a major supplier of
thermal products for the BEV market. In 2020, 30% of new business
wins and approximately 3% of its 2020 revenue were on full battery
electric vehicles (BEV). BEV wins averaged content per vehicle that
was 12.5% higher than that of 2018. These wins have expanded to all
major production regions. Moreover, TI has content on over
two-thirds of 46 key BEV platforms coming to market through 2022.
The solid win rate suggests that the company has positioned itself
well to capitalize on higher BEV adoption rates.
S&P said, "The stable outlook on TI reflects our view that the
company's FOCF-to-debt ratio will remain above 5% over the next 12
months, supported by its recent financial performance and the
ongoing recovery in light-vehicle sales.
"To raise the rating, we would have to believe the company would
continue to strengthen its market position and improve its
profitability through operational efficiencies, organic growth, and
innovative products. As a result, we would expect to see TI's
debt-to-EBITDA metric stay below 4.0x and its FOCF-to-debt ratio
exceed 10% on a sustained basis. Moreover, we would anticipate that
Bain, its financial sponsor, would relinquish its stake (=20%).
"We could lower our rating on the company if its FOCF-to-debt ratio
falls below 5% or if its debt-to-EBITDA metric, including our
adjustments, exceeds 4x on a sustained basis. For example, we
estimate the company's FOCF-to-debt ratio could fall below our
expectations for the current rating if greater-than-expected
weakness in the global economy results in lower vehicle production,
due, for instance, to lockdowns to curtail COVID-19 or chip
shortages."
TIDEWATER ESTATES: Selling 20-Acre Hancock County Property for $84K
-------------------------------------------------------------------
Tidewater Estates, Inc., asks the U.S. Bankruptcy Court for the
Southern District of Mississippi to authorize the sale of
approximately 20 acres on the South end of Hancock County,
Mississippi, Tax Parcel No. 066-0-24-013.000, to Jeffery C.
Compton, Jr., and Latisha Lanee' Cuevas for $84,000 or $4,200 per
acre, free and clear of all liens.
At the time of the filing of the Petition, the Debtor was the owner
of a parcel of real property located in Hancock County,
Mississippi, proximate to the City of Diamondhead, Mississippi.
The Debtor entered into a Contract for the Sale and Purchase of
Real Estate dated March 9, 2021 as to the Property, to sell to the
Buyers. The Property to be purchased is lying North of the
Kiln-Delisle Road and fronting 25 feet on Runnymede Road, and
identified on the 2020 Appraisal as part of Parcel No. 3/4.
If approved by the Court, the sale of the Property will be closed
by May 5, 2021, or as soon thereafter as an Order from the Court
approving sale is entered.
As set forth in the Contract, the Debtor has agreed to pay the
following expenses only:
a. A Real Estate Commission of 10% of the sale price to
Paulette Snyder and Re/Max Coast Delta Realty. Such commission is
the usual commission in the instant real estate market for
unimproved land to be paid to a reputable broker and sales agent.
b. Taxes due for 2020 and prior years.
c. Prorated taxes for 2021 to the date of closing.
The Purchaser has agreed to pay all closing costs and to pay for a
survey.
A real estate commission will become due on the sale to Paulette
Snyder and RE/Max Coast Delta Realty. Re/Max Coast Delta Realty
and Paulette Snyder have been approved by the Court to be retained
and compensated as real estate professionals for the Debtor.
The sale contemplated by the Motion should release the Property
from all existing liens and transfer such liens to the proceeds of
sale.
Interested party and alleged creditor, Gregory E. Bertucci, filed a
Lis Pendens Notice with the Chancery Clerk of Hancock County,
Mississippi on Dec. 30, 2015, recorded at Lis Pendens Book 2015,
Page 45, which, until cancelled in whole or in part, manifests an
alleged lien on all of the Debtors real property, including the
property proposed to be sold.
Gregory E. Bertucci has filed a claim, (Claim No. 1), in the case
for $364,378.02, to which the Debtor has objected as barred by the
applicable statutes of limitations, not supported by documentation
and improperly submitted (in part) on behalf of third parties, via
Adversary Proceeding No. 20-06032-KMS before the Court. Said
Adversary Proceeding also seeks a Court determination of the
validity and extent of the alleged lien manifested by said lis
pendens notice, and a finding that the lis pendens is invalid and
should be cancelled in its entirety.
After the sale of the 20 acres here sought to be sold, the Debtor
will have property of adequate value to pay all of its obligations,
and to protect the claim of Gregory E. Bertucci in the event it is
determined to be valid.
The subject property has been market tested via exposure to the
market over many months, and $4,300 per acre is a fair market price
as attested to by Paulette Snyder in a hearing on other sales of
similar property proximately located at a hearing before the Court
on Feb. 26, 2021.
The Debtor has a business justification for selling the Property
and other real property outside of the ordinary course of business,
which is to partially retire a commercial loan from Gulf Coast Bank
& Trust Go, now assigned to Bryan J. Bertucci, which loan has
matured and bears default interest at 21% per annum. The Debtor's
board of directors has made a judgment that it would be in the best
interest of the Debtor to sell the subject property and reduce the
principal amount of the aforesaid high interest loan.
Based on the foregoing, the Debtor prays that the Court will enter
the Order authorizing the sale of the Property to the Buyers
pursuant to the Contract, provided payment is made in the following
manner:
a. Proration of the County ad valorem taxes for 2021.
b. County Ad Valorem taxes for 2020 and unpaid Ad Valorem
taxes for prior years, if any.
c. A real estate commission of 10% of the sale price to
Paulette Snyder and Re/Max Coast Delta Realty and Paulette Snyder.
The Debtor further prays that the Court authorizes that the
Property be sold free and clear of all liens. It further prays
that it be authorized to pay down the secured lien held by Dr.
Bryan J. Bertucci in amount of up to 85% of the net proceeds of
sale (purchase price net of taxes and commissions).
The Debtor further prays that it be granted such other, further and
general relief to which it may be entitled.
A copy of the Contract is available at https://tinyurl.com/xc3juejp
from PacerMonitor.com free of charge.
About Tidewater Estates, Inc.
Tidewater Estates, Inc. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case
No.
20-50955) on June 9, 2020. In the petition signed by Emile A.
Bertucci, III, director, secretary/treasurer, the Debtor estimated
$1 million to $10 million in assets and $500,000 to $1 million in
liabilities. The Debtor is represented by Patrick Sheehan, Esq. at
SHEEHAN AND RAMSEY, PLLC.
TIDEWATER ESTATES: Selling 20-Acre Hancock County Property for $84K
-------------------------------------------------------------------
Tidewater Estates, Inc., asks the U.S. Bankruptcy Court for the
Southern District of Mississippi to authorize the sale of
approximately 20 acres on the South end of Hancock County,
Mississippi, Tax Parcels No. 066-0-24-013.000 and 066-0-24-016.000,
to sell to Gabriel L. Whitfield and Pablo Corona for $84,000 or
$4,200 per acre, free and clear of all liens.
At the time of the filing of the Petition, the Debtor was the owner
of a parcel of real property located in Hancock County,
Mississippi, proximate to the City of Diamondhead, Mississippi.
The Debtor entered into a Contract for the Sale and Purchase of
Real Estate dated March 9, 2021 as to the Property, to sell to the
Buyers. The Property to be purchased is lying South of the
Kiln-Delisle Road and fronting on the West side of Rotten Bayou
Road, and identified on the 2020 Appraisal as part of Parcel No.
3/4 and part of Parcel No. 5.
If approved by the Court, the sale of the Property will be closed
on or before April 30, 2021, or as soon thereafter as an Order from
the Court approving sale is entered.
As set forth in the Contract, the Debtor has agreed to pay the
following expenses only:
a. A Real Estate Commission of 10% of the sale price to
Paulette Snyder and Re/Max Coast Delta Realty. Such commission is
the usual commission in the instant real estate market for
unimproved land to be paid to a reputable broker and sales agent.
b. Taxes due for 2020 and prior years.
c. Prorated taxes for 2021 to the date of closing.
The Purchaser has agreed to pay all closing costs and to pay for a
survey.
A real estate commission will become due on the sale to Paulette
Snyder and RE/Max Coast Delta Realty. Re/Max Coast Delta Realty
and Paulette Snyder have been approved by the Court to be retained
and compensated as real estate professionals for the Debtor.
The sale contemplated by the Motion should release the Property
from all existing liens and transfer such liens to the proceeds of
sale.
Interested party and alleged creditor, Gregory E. Bertucci, filed a
Lis Pendens Notice with the Chancery Clerk of Hancock County,
Mississippi on Dec. 30, 2015, recorded at Lis Pendens Book 2015,
Page 45, which, until cancelled in whole or in part, manifests an
alleged lien on all of the Debtors real property, including the
property proposed to be sold.
Gregory E. Bertucci has filed a claim, (Claim No. 1), in the case
for $364,378.02, to which the Debtor has objected as barred by the
applicable statutes of limitations, not supported by documentation
and improperly submitted (in part) on behalf of third palties, via
Adversary Proceeding No. 20-06032-KMS before the Court. Said
Adversary Proceeding also seeks a Court determination of the
validity and extent of the alleged lien manifested by said lis
pendens notice, and a finding that the lis pendens is invalid and
should be cancelled in its entirety.
After the sale of the 20 acres here sought to be sold, the Debtor
will have property of adequate value to pay all of its obligations,
and to protect the claim of Gregory E. Bertucci in the event it is
determined to be valid.
The subject property has been market tested via exposure to the
market over many months, and $4,200 per acre is a fair market price
as attested to by Paulette Snyder in a hearing on other sales of
similar property proximately located at a hearing before the Court
on Feb. 26, 2021.
The Debtor has a business justification for selling the Porperty
and other real property outside of the ordinary course of business,
which is to partially retire a commercial loan from Gulf Coast Bank
& Trust Go, now assigned to Bryan J. Bertucci, which loan has
matured and bears default interest at 21% per annum. The Debtor's
board of directors has made a judgment that it would be in the best
interest of the Debtor to sell the subject property and reduce the
principal amount of the aforesaid high interest loan.
Based on the foregoing, the Debtor prays that the Court will enter
the Order authorizing the sale of the Property to the Buyers
pursuant to the Contract, provided payment is made in the following
manner:
a. Proration of the County ad valorem taxes for 2021.
b. County Ad Valorem taxes for 2020 and unpaid Ad Valorem
taxes for prior years, if any.
c. A real estate commission of 10% of the sale price to
Paulette Snyder and Re/Max Coast Delta Realty and Paulette Snyder.
The Debtor further prays that the Court authorizes that the
Property be sold free and clear of all liens. It further prays
that it be authorized to pay down the secured lien held by Dr.
Bryan J. Bertucci in amount of up to 85% of the net proceeds of
sale (purchase price net of taxes and commissions).
The Debtor further prays that it be granted such other, further and
general relief to which it may be entitled.
A copy of the Contract is available at https://tinyurl.com/pkjsmht6
from PacerMonitor.com free of charge.
About Tidewater Estates, Inc.
Tidewater Estates, Inc. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case
No.
20-50955) on June 9, 2020. In the petition signed by Emile A.
Bertucci, III, director, secretary/treasurer, the Debtor estimated
$1 million to $10 million in assets and $500,000 to $1 million in
liabilities. The Debtor is represented by Patrick Sheehan, Esq. at
SHEEHAN AND RAMSEY, PLLC.
TIDEWATER ESTATES: Selling 20-Acre Hancock County Property for $86K
-------------------------------------------------------------------
Tidewater Estates, Inc., asks the U.S. Bankruptcy Court for the
Southern District of Mississippi to authorize the sale of
approximately 20 acres on the South end of Hancock County,
Mississippi, Tax Parcel No. 066-0-24-013.000, to Benny Breazeale
and Karen Breazeale for $86,000 or $4,300 per acre, free and clear
of all liens.
At the time of the filing of the Petition, the Debtor was the owner
of a parcel of real property located in Hancock County,
Mississippi, proximate to the City of Diamondhead, Mississippi.
The Debtor entered into a Contract for the Sale and Purchase of
Real Estate dated March 9, 2021 as to the Property, to sell to the
Buyers. The Property to be purchased is lying South of the
Kiln-Delisle Road and fronting on the West side of Rotten Bayou
Road, and identified on the 2020 Appraisal as part of Parcel No.
3/4.
If approved by the Court, the sale of the Property will be closed
by April 16, 2021, or as soon thereafter as an Order from the Court
approving sale is entered.
As set forth in the Contract, the Debtor has agreed to pay the
following expenses only:
a. A Real Estate Commission of 10% of the sale price to
Paulette Snyder and Re/Max Coast Delta Realty. Such commission is
the usual commission in the instant real estate market for
unimproved land to be paid to a reputable broker and sales agent.
b. Taxes due for 2020 and prior years.
c. Prorated taxes for 2021 to the date of closing.
The Purchaser has agreed to pay all closing costs and to pay for a
survey.
A real estate commission will become due on the sale to Paulette
Snyder and RE/Max Coast Delta Realty. Re/Max Coast Delta Realty
and Paulette Snyder have been approved by the Court to be retained
and compensated as real estate professionals for the Debtor.
The sale contemplated by the Motion should release the Property
from all existing liens and transfer such liens to the proceeds of
sale.
Interested party and alleged creditor, Gregory E. Bertucci, filed a
Lis Pendens Notice with the Chancery Clerk of Hancock County,
Mississippi on Dec. 30, 2015, recorded at Lis Pendens Book 2015,
Page 45, which, until cancelled in whole or in part, manifests an
alleged lien on all of the Debtors real property, including the
property proposed to be sold.
Gregory E. Bertucci has filed a claim, (Claim No. 1), in the case
for $364,378.02, to which the Debtor has objected as barred by the
applicable statutes of limitations, not supported by documentation
and improperly submitted (in part) on behalf of third palties, via
Adversary Proceeding No. 20-06032-KMS before the Court. Said
Adversary Proceeding also seeks a Court determination of the
validity and extent of the alleged lien manifested by said lis
pendens notice, and a finding that the lis pendens is invalid and
should be cancelled in its entirety.
After the sale of the 20 acres here sought to be sold, the Debtor
will have property of adequate value to pay all of its obligations,
and to protect the claim of Gregory E. Bertucci in the event it is
determined to be valid.
The subject property has been market tested via exposure to the
market over many months, and $4,300 per acre is a fair market price
as attested to by Paulette Snyder in a hearing on other sales of
similar property proximately located at a hearing before the Court
on Feb. 26, 2021.
The Debtor has a business justification for selling the Porperty
and other real property outside of the ordinary course of business,
which is to partially retire a commercial loan from Gulf Coast Bank
& Trust Go, now assigned to Bryan J. Bertucci, which loan has
matured and bears default interest at 21% per annum. The Debtor's
board of directors has made a judgment that it would be in the best
interest of the Debtor to sell the subject property and reduce the
principal amount of the aforesaid high interest loan.
Based on the foregoing, the Debtor prays that the Court will enter
the Order authorizing the sale of the Property to the Buyers
pursuant to the Contract, provided payment is made in the following
manner:
a. Proration of the County ad valorem taxes for 2021.
b. County Ad Valorem taxes for 2020 and unpaid Ad Valorem
taxes for prior years, if any.
c. A real estate commission of 10% of the sale price to
Paulette Snyder and Re/Max Coast Delta Realty and Paulette Snyder.
The Debtor further prays that the Court authorizes that the
Property be sold free and clear of all liens. It further prays
that it be authorized to pay down the secured lien held by Dr.
Bryan J. Bertucci in amount of up to 85% of the net proceeds of
sale (purchase price net of taxes and commissions).
The Debtor further prays that it be granted such other, further and
general relief to which it may be entitled.
A copy of the Contract is available at https://tinyurl.com/2km4wt9v
from PacerMonitor.com free of charge.
About Tidewater Estates, Inc.
Tidewater Estates, Inc. filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case
No.
20-50955) on June 9, 2020. In the petition signed by Emile A.
Bertucci, III, director, secretary/treasurer, the Debtor estimated
$1 million to $10 million in assets and $500,000 to $1 million in
liabilities. The Debtor is represented by Patrick Sheehan, Esq. at
SHEEHAN AND RAMSEY, PLLC.
TITAN INTERNATIONAL: S&P Upgrades ICR to 'B-', Outlook Stable
-------------------------------------------------------------
S&P Global Ratings raised all of its ratings on Titan International
Inc., a U.S.-based manufacturer of off-highway wheels, tires, and
undercarriages for global agriculture and construction end markets,
including its issuer credit rating, to 'B-' from 'CCC+'.
S&P said, "At the same time, we assigned our 'B-' issue-level
rating and '4' recovery rating to the company's proposed $400
million senior secured notes due 2028. The company plans to use the
net proceeds from this issuance to refinance its existing $400
million senior secured notes due 2023.
"The stable outlook reflects our expectation that improving
end-market demand will support stronger sales and profitability,
causing Titan's leverage to decline to the 5.5x-6.5x range and
enabling it to generate neutral to positive free operating cash
flow (FOCF) during 2021."
Strong demand in its agricultural end markets and improving demand
in its construction end markets will significantly increase Titan's
sales. At various points over the past few years, soft agricultural
commodity prices, unfavorable weather, trade disputes, and
macroeconomic uncertainty have weighed on farmer confidence. S&P
said, "We believe stronger demand for agricultural products during
2021--as evidenced by the higher prices for corn, soybeans, and
grains--will lead to a large increase in agricultural equipment
investment over the next 12-18 months. Government stimulus and
infrastructure investment globally will also likely increase over
the next 1-2 years. Although uncertainty surrounding
non-residential real estate demand could continue to weigh on this
end market in the near term, we expect construction activity to
begin to rise at a more rapid pace in the second half of 2021 and
into 2022."
Although Titan's operating leverage remains high, improved sales
volumes and cost structure will lift its profitability. The
company's weak sales during 2019 led to suboptimal production runs
and unabsorbed fixed costs, which caused its S&P Global
Ratings-adjusted EBITDA margin to be very weak at 2.4%. Sales
volume declined further in 2020, but reductions in its
manufacturing costs and labor force benefitted its margin, which
rose to 4.0%. These structural cost reductions will likely support
an improvement in Titan's profitability in 2021. S&P said,
"However, we believe the company's operating leverage remains
substantial due to the high fixed costs inherent in its global
manufacturing base. A higher level of sales will likely
considerably improve Titan's fixed-cost absorption and increase its
manufacturing efficiency in 2021, relative to 2019 and 2020. We
forecast Titan will be able to largely mitigate the effect of raw
material costs inflation through pricing and procurement
measures."
S&P said, "Our lower debt leverage and neutral to positive free
cash flow forecast support our view that Titan's capital structure
is sustainable. The combination of higher volumes and improved
profitability will likely reduce the company's S&P Global
Ratings-adjusted debt to EBITDA to roughly 6x, which is much better
than its leverage of 10x as of 2020 (a level we viewed as
unsustainably high). We forecast Titan will reduce both its
inventory and accounts receivable as a share of its revenue during
2021, limiting the amount of working capital investment required to
support its growth. In addition, products with quick inventory turn
now account for a larger portion of its inventory than in previous
years. Furthermore, strong demand for and a market shortage of
tires, wheels, and undercarriages will likely enable Titan to
negotiate faster collection and improved pricing from original
equipment manufacturers (OEMs).
"The proceeds from the company's asset sales bolstered its
liquidity and enabled it to reduce its debt. During 2020, Titan
sold its remaining Wheels India stake for $33 million and its
unused Brownsville, Texas manufacturing facility for $11 million
and used the proceeds to repay the outstanding borrowings on its
ABL revolver. This strengthened our view of the company's
liquidity. We also believe Titan was able to extend its short-term
overdraft and working capital facilities during 2020 and anticipate
it will have the ability to extend these facilities without
difficulty in the future.
"We believe the proposed senior secured notes issuance addresses
Titan's near-term refinancing risk. Although the company's ABL
expires in February 2023, we believe its improving leverage profile
will allow it to extend this facility during 2021.
"The stable outlook on Titan reflects our expectation that solid
demand will support stronger sales and profitability, reducing its
leverage to the 5.5x-6.5x range and enabling it to generate neutral
to positive FOCF during 2021."
S&P could lower its rating on Titan if it believes:
-- Its FOCF will be significantly negative over the next 12
months, either due to continued weak profitability or
higher-than-anticipated annual working capital outflows;
-- Its liquidity will deteriorate because its intra-period working
capital requirements are significantly higher than S&P expects or
because it anticipates it will struggle to roll over its short-term
working capital facilities in Europe; or
-- Its leverage will revert to the high levels of 2020.
S&P could raise its rating on Titan if S&P expects that it will
generate good FOCF while further reducing its leverage, which will
enable it to better withstand a cyclical downturn. For instance,
S&P could raise its rating if it believes Titan will:
-- Generate adjusted FOCF to debt of consistently above 5%; and
-- Reduce and maintain its adjusted debt to EBITDA below 5x.
TMS INTERNATIONAL: S&P Rates New $300MM Sr. Unsecured Notes 'B'
---------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level and '5' recovery
ratings to U.S. steel mill services provider TMS International
Corp.'s proposed $300 million unsecured notes due 2029. The '5'
recovery rating indicates its expectation for modest recovery
(10%-30%; rounded estimate: 15%) in the event of a payment
default.
The company will use the proceeds from the issuance to refinance
its existing $236 million senior unsecured notes due 2025, repay
the asset-based loan (ABL) borrowings, and for general corporate
purposes. The existing issuer credit rating is unchanged.
Leverage increased to 5.5x in 2020, driven by the incremental term
loan debt issuance in December to fund the recent acquisitions of
The Stein Cos. and Kent Environmental. However, S&P expects
leverage to decline below 5x toward the end of 2021 upon the
successful integration of these acquisitions, as well as a
sustained recovery in domestic steel production and utilization
rates.
S&P's ratings on TMS International continue to reflect its close
correlation with the cyclical steel industry and the highly
competitive steel mill services market. These risks are partly
offset by its long-term contracts and variable cost structure.
ISSUE RATINGS--RECOVERY ANALYSIS
-- S&P assigns a 'B' rating and a recovery rating of '5' to the
proposed $300 million unsecured notes due 2029. The '5' recovery
rating indicates its expectation for modest recovery (10%-30%;
rounded estimate: 15%) in the event of a payment default.
-- S&P does not expect any change in the 'BB-' issue-level and '2'
recovery ratings on TMS' $550 million secured term loan B due 2024
(including the $150 million incremental borrowings). The '2'
recovery rating indicates its expectation for substantial recovery
(70%-90%; rounded estimate: 75%) in the event of a payment
default.
-- S&P assesses recovery prospects on the basis of a gross
reorganization value for TMS of approximately $605 million,
reflecting about $110 million of emergence EBITDA and a 5.5x
multiple.
-- The $110 million of emergence EBITDA incorporates our recovery
assumptions for minimum capital expenditure (at 3% of sales based
on future expectations) and our standard 15% cyclicality adjustment
for issuers in the metals and mining downstream sector.
-- The 5.5x multiple is in line with the multiples S&P assigns to
other companies in the metals and mining downstream sector.
-- S&P's recovery analysis assumes that in a hypothetical default
scenario, TMS' outstanding borrowings from its ABL revolving credit
facility would be fully covered. S&P also assume 60% of its $150
million ABL credit facility (net of outstanding letters of credit)
would be drawn at the time of default.
Simulated default assumptions
-- S&P's default scenario contemplates that global steel markets
will face a prolonged period of depressed prices and demand, which
leads TMS' customers to produce less steel and choose not to renew
their contracts. In this scenario, TMS cannot finance its fixed
charges with free cash flow, precipitating a payment default, debt
restructuring, or bankruptcy filing.
Simulated year of default: 2025
-- EBITDA at emergence: $110 million
-- Implied enterprise value multiple: 5.5x
-- Gross enterprise value: $605 million
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $574
million
-- Domestic (obligor)/foreign (nonobligor) valuation split:
65%/35%
-- Priority claims and first-lien debt: $105 million
-- Estimated value of collateral available for secured term loan
holders: $398 million
-- Estimated secured term loan claim: $532 million
-- Total value available to secured term loan holders: $419
million
--Recovery expectation for senior secured term loan: 70%-90%
(rounded estimate: 75%)
--Recovery rating: '2'
-- Estimated unsecured claim (including deficiency claims ranks
pari passu): $442 million
-- Total value available to unsecured claims: $70 million
--Recovery expectation for senior unsecured notes: 10%-30%
(rounded estimate: 15%)
--Recovery rating: '5'
TOPGOLF INTERNATIONAL: S&P Upgrades ICR to 'B-', Outlook Negative
-----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Topgolf
International Inc. by one notch to 'B-' from 'CCC+' (one notch
higher than its rating on the company on a stand-alone basis) and
removed its ratings from CreditWatch, where S&P placed them with
positive implications on Oct. 29, 2020.
The negative outlook reflects the risk that the company will not
expand its EBITDA as quickly as S&P anticipates, causing its cash
funding needs to exceed our assumptions, which could pressure
Callaway's liquidity.
U.S.-based golf equipment and apparel manufacturer Callaway Golf
Co. completed its previously announced acquisition of Topgolf. The
all-stock transaction valued Topgolf at about $2 billion and
Topgolf's shareholders now own 48.7% of the combined company.
S&P said, "We view Topgolf as strategically important to Callaway
and believe the company would likely support Topgolf under most
foreseeable circumstances.
"The upgrade reflects our belief Topgolf is strategically important
to the combined entity and that Callaway will likely support
Topgolf under most foreseeable circumstances. Topgolf's
shareholders now own 48.7% of the combined entity and have three
board seats, thus they can exert significant influence on the
combined entity. Callaway has also made it clear that Topgolf is an
important part of the company's strategy to create an unrivaled
golf and entertainment business. The company believes the
combination will enhance the growth prospects of both entities. We
believe Callaway's willingness to fund the merger with $1.7 billion
of its stock, as well as its plan to devote significant cash to
fund development at Topgolf, further demonstrates this commitment.
As such, we believe Callaway would provide extraordinary support to
Topgolf under most foreseeable circumstances. Because of this, we
raised our issuer credit rating on Topgolf to 'B-', which is one
notch higher than our rating on the company on a stand-alone basis.
Still, Callaway is not guaranteeing Topgolf's debt. This raises
some doubts about the extent of Callaway's support if Topgolf
encounters significant credit stress, which limits any further
notching support.
"We believe Topgolf's stand-alone capital structure is still
unsustainable, although the downside risk to our forecast is
mitigated by its harvest case. Even though we forecast Topgolf's
revenue and EBITDA will recover closer to pre-pandemic levels in
2021, we still forecast it will have very high leverage of about
14x, weak interest coverage of about 1x, and generate negative free
cash flow. We view these metrics as unsustainable. Over the next
few years, Topgolf will meet its cash investment needs with funding
from Callaway. Callaway has significant cash on its balance sheet,
partially because of its issuance of $259 million of convertible
notes in mid-2020, that it will use to fund much of the commitment.
Still, Topgolf must achieve its goal of generating positive free
cash flow by 2024, otherwise we believe it will be difficult to
maintain its current pace of investment without pressuring
Callaway's liquidity.
"We believe this risk could be mitigated by Callaway's ability to
enact Topgolf's harvest case, which includes halting future venue
development before breaking ground and cutting discretionary
capital expenditures (capex), allowing Topgolf to harvest the cash
flow from its existing venues. Although it would take 9-12 months
to work through the near-term spending commitments on its partially
built venues, the elimination of growth capital spending and
pre-opening expenses beyond this inflection point would likely
allow Topgolf to generate positive free cash flow and EBITDA above
its fixed charges.
"The merger will likely improve Topgolf's growth trajectory, though
it will require significant cash investment from Callaway. In our
view, the merger's benefits for Topgolf are clear: it does not
generate free cash flow at its current scale and relies on external
capital to add venues to its portfolio. Through the merger,
Callaway will finance a significant portion of Topgolf's venue
development for the next several years, enabling it to resume its
planned rapid expansion. The company has indicated its goal is for
Topgolf to generate positive free cash flow by 2024, when it could
become self-funding. However, this is a long time horizon. In
addition, we expect significant variability in the company's
operating results depending upon Topgolf's revenue recovery during
and following the pandemic, the pace of the recovery in U.S.
economic conditions and employment, and changes in consumer
preferences over time." Callaway also has long-standing
relationships with golf courses and driving ranges around the
country that Topgolf can leverage to accelerate the growth of its
Toptracer range business, under which it licenses its technology to
driving ranges. Topgolf will also benefit from joint marketing
efforts at Callaway that will further increase its exposure, such
as by featuring Topgolf's logos on the apparel worn by PGA Tour
professionals at televised tournaments.
Topgolf faces significant competition from alternative out-of-home
entertainment options. Topgolf provides entertainment options as
well as food and beverage services to the general public, corporate
customers, and group events. Although S&P believes Topgolf has a
first-mover advantage in creating a unique golf experience, it
faces significant competition from alternative out-of-home
entertainment options, among other substitutes for consumers'
discretionary leisure and entertainment spending. Its customers may
choose lower-price socializing alternatives that do not involve
golfing, eating, or drinking. Continued economic pressure could
amplify this risk if consumers limit their spending on
discretionary leisure activities.
The recent surge in the popularity of golf will likely provide a
tailwind for further growth. Since last summer, the consumer desire
for outdoor socially distanced activities has driven a remarkable
increase in golf participation. It is hard to predict what
percentage of the new golfers that entered the sport in 2020 will
remain over the long term. However, S&P expects the surge in
participation to be a tailwind for the golf industry over the next
several years and anticipates both Callaway and Topgolf will likely
benefit from this trend.
The negative outlook on Topgolf reflects the risk that the company
will not expand its EBITDA as quickly as anticipated, which would
increase its expected cash funding needs and pressure Callaway's
liquidity.
S&P said, "We could lower our ratings on Topgolf if it increases
its EBITDA at a slower pace than we expect such that we no longer
see a clear path for it to generate positive free cash flow on a
stand-alone basis over the intermediate term. In our view, this
would impair the group's credit profile because it would require
cash infusions from Callaway that it may not be able to sustain."
S&P believes this could occur if:
-- Its group and corporate event bookings remain depressed even
after the pandemic subsides;
-- The rise in walk-in traffic at the company's venues does not
sustain its recent momentum as the economy opens up and its venues
face competition from various other forms of leisure, travel, and
entertainment;
-- The company is not able to sufficiently control its costs as it
expands; or
-- Callaway faces operating headwinds that impair its cash flow
generation and ability to provide funding for Topgolf's venue
development.
S&P said, "We could revise our outlook on Topgolf to stable if the
company meets or exceeds our EBITDA forecast in 2021 and we have
confidence that it will generate materially positive reported
EBITDA in 2022.
"We could also consider revising our outlook to stable if Callaway
exceeds our forecast and generates annual free cash flow in excess
of $100 million on a stand-alone basis and we believe this level of
cash flow generation is sustainable. While this is unlikely in 2021
given our forecast for Callaway's working capital needs, we believe
this level of cash flow would allow the company to continue to fund
some of Topgolf's growth without needing to raise additional debt
or equity."
TOUCHPOINT GROUP: Incurs $3.5 Million Net Loss in 2020
------------------------------------------------------
Touchpoint Group Holdings, Inc. filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $3.54 million on $174,000 of revenue for the year ended
Dec. 31, 2020, compared to a net loss of $6.63 million on $170,000
of revenue for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $2.74 million in total assets,
$2.53 million in total liabilities, $605,000 in temporary equity,
and a total stockholders' deficit of $397,000.
Tampa, Florida-based Cherry Bekaert, LLP, the Company's auditor
since 2016, issued a "going concern" qualification in its report
dated April 9, 2021, citing that the Company has recurring losses
and negative cash flows from operations that raise substantial
doubt about its ability to continue as a going concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/225211/000175392621000093/g082115_10k.htm
About Touchpoint Group
Headquartered in Miami, Florida, Touchpoint Group Holdings Inc. --
http://touchpointgh.com-- is a media and digital technology
acquisition and software company.
TRADER CORP: S&P Affirms 'B' ICR, Outlook Negative
--------------------------------------------------
On April 7, 2021, S&P Global Ratings affirmed its 'B' issuer credit
rating on Toronto-based Trader Corp.
The negative outlook reflects the possibility that, given Trader's
high balance-sheet debt, the company could be vulnerable to
continued additional pandemic-related risks and the recent economic
slowdown could have a prolonged adverse effect on operating
performance.
Trader's capital structure consists of about a C$670 million of
term loan, redeemable class A preferred shares, and class B common
shares. The class A shares are entitled to earn a cumulative
dividend of 9% per year. S&P said, "Given that the class A
preferred shares could be partially redeemed at any time as long as
certain requirements under the credit agreement are met, we no
longer deem them as satisfying all of the qualitative
conditions--including creating an alignment of economic
incentives--necessary to exclude from our debt calculation.
Therefore, we have reclassified these shares to debt from equity
and included the value of these securities (estimated C$1.3 billion
as of Sept. 30, 2020) in our adjusted debt calculations. This
reclassification increases Trader's debt to EBITDA on an S&P Global
Ratings' adjusted basis to about 25x compared with our previous
8.6x (excluding preferred shares) as of the last 12 months (LTM)
ended Sept. 30, 2020, but it has no effect on Trader's underlying
creditworthiness and cash flow generation capability. Although this
treatment elevates Trader's debt levels on an S&P Global Ratings'
adjusted basis, fundamentally nothing has changed in the company's
cash flow-generating capacity. We foresee negligible risk to the
company's liquidity from these class A shares because they do not
require mandatory cash dividend payments or contain any financial
maintenance covenants or default events that could trigger an
acceleration of their repayment."
S&P said, "We believe that Trader's strong market position as
Canada's leading automobile-focused digital marketing services
provider should support a meaningful recovery in operating
performance in 2021 with credit metrics returning to levels that we
believe are commensurate with the rating. These include a
debt-to-EBITDA ratio on an S&P Global Ratings' adjusted basis of
about 20x (excluding preferred shares below 7x) and EBITDA cash
interest coverage that improves to the mid-high 2x area from about
2x as of LTM ended Sept. 30, 2020. Furthermore, we believe Trader
will continue to generate positive free operating cash flows on an
S&P Global Ratings' adjusted basis in the C$40 million-C$45 million
range in 2021, which in our view further support the 'B' issuer
credit rating."
The negative outlook reflects the possibility that, given the
company's high balance-sheet debt, Trader could be vulnerable to
continued additional pandemic-related risks, and the economic
slowdown could have a prolonged adverse effect on Trader's
operating performance. The outlook also reflects the risks that the
company's EBITDA cash interest coverage ratio could remain weak
through fiscal 2021 potentially due to slower-than-anticipated
recovery in demand for listings.
Consideration for a lower rating will include:
-- A stalled earnings recovery likely driven by additional
closures owing to the pandemic, which could affect customers'
ability and desire to list;
-- Recessionary conditions, which lead to lower demand for cars
and therefore advertising, and increased competition; and
-- S&P's expectation that EBITDA cash interest coverage on an S&P
Global Ratings' adjusted basis will be sustained close to 2x in the
next 12 months.
S&P said, "We could revise the outlook to stable if Trader can
sustain its EBITDA cash interest coverage in the mid-high 2x area
on an S&P Global Ratings' adjusted basis and continue to generate
positive free cash flows on a sustained basis. We believe this
could occur if Trader's EBITDA and margins fully rebound to
historical levels."
TRANSPINE INC: Seeks to Hire Kelley Semmel as Special Counsel
-------------------------------------------------------------
Transpine, Inc. seeks approval from the U.S. Bankruptcy Court for
the Central District of California to employ Kelley Semmel as
special counsel.
The Debtor needs the firm's legal assistance in the state court
litigation (Case No. LC105743) with Overland Direct, Inc. filed in
the Los Angeles Superior Court.
Kelley Semmel will be paid at the rate of $425 per hour for
attorneys and $95 per hour for paralegals. The firm will also be
reimbursed for out-of-pocket expenses incurred.
Paul Kelly, Esq., a partner at Kelley Semmel, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Paul Kelly, Esq.
Kelley Semmel
5757 Wilshire Blvd., Penthouse 5
Los Angeles, CA 90036
Tel: (323) 592-3450
About Transpine Inc.
Transpine, Inc. is a Tarzana, Calif.-based corporation whose
primary asset is its 100 percent ownership of the real property
located at 4256 Tarzana Estates Drive, Tarzana.
Transpine filed a Chapter 11 petition (Bankr. C.D. Calif. Case No.
20-11286) on July 22, 2020. In the petition signed by CEO Nisan
Tepper, the Debtor was estimated to have $1 million to $10 million
in both assets and liabilities. Judge Victoria S. Kaufman presides
over the case.
Leslie Cohen Law, PC and Kelley Semmel serve as the Debtor's
bankruptcy counsel and special counsel, respectively.
TRI POINTE: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
-----------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit and issue-level
ratings on Irvine, Calif.-based homebuilder Tri Pointe Homes Inc.
(TPH) and revised its outlook to stable from negative.
The stable outlook reflects the likelihood that Tri Pointe will
trim debt to EBITDA closer to 2x over the next 12 months.
Rising cash flows are improving Tri Pointe's balance sheet. The
company finished 2020 with about $620 million in cash, which was
nearly double than the previous year. Thanks to a combination of
surging profits and reduced land investment, last year's free
operating cash flow (FOCF) of $568 million reached 40% of its debt.
Although S&P expects the company will boost land spend and related
outlays in 2021, it forecasts debt to EBITDA trending down toward
2x, leaving cash of almost $500 million on the balance sheet by the
end of 2021.
Robust ongoing improvements in home orders is a favorable indicator
of upcoming results. The company began 2021 with close to 70% more
homes in its backlog than the prior year. S&P thinks these
aggregated orders—with deposits in hand—will become closed
homes over the course of 2021, helping drive revenues up by some
17% this year. Modest margin improvement should further boost
EBITDA by more than 20% for the second consecutive year in 2021.
The company is reducing its dependence on California.
The state accounted for 45% of revenues and slightly more than half
of all inventories in 2020. However, with help from expansion
within solidly growing existing markets such as Phoenix, the
Carolinas, and Texas, S&P thinks the company will reduce its
housing revenues and land inventories in California to 40% each
over the next 12 to 18 months.
S&P said, "Our stable outlook reflects the expectation that debt to
EBITDA will finish 2021 at less than 2.5x, modestly below 2.6x in
2020, largely because of anticipated profit growth that's largely
volume-driven. Although we expect growth-based investment to resume
and a steady pace of share buy-backs this year, we think debt to
capital will fall below the 38% level from the past two years.
"We could upgrade Tri Pointe if it brings debt to EBITDA
sustainably below 2x. Alternatively, the company would need to
increase annual revenues closer to $4 billion or $5 billion (or
nearer to that of KB Home and Mattamy Group).
"We could lower the rating if Tri Pointe's adjusted debt to EBITDA
appears likely to sustainably exceed 4x. This could occur if
currently, healthy demand shows a sharp reversal, causing extensive
cancellations of existing home orders and resulting in a roughly
45% decline from our expected 2021 EBITDA."
TROPHY HOSPITALITY: Case Summary & 9 Unsecured Creditors
--------------------------------------------------------
Debtor: Trophy Hospitality, LLC
DBA Trophy Park
3351 Waverly Drive
Celina, TX 75009
Chapter 11 Petition Date: April 8, 2021
Court: United States Bankruptcy Court
Eastern District of Texas
Case No.: 21-40512
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS
12770 Coit Road
Suite 1100
Dallas, TX 75251
Tel: 972-991-5591
Fax: 972-991-5788
E-mail: eric@ealpc.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jeremiah Miranda, managing member.
A copy of the petition containing, among other items, a list of the
Debtor's nine unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/3PBY5XQ/Trophy_Hospitality_LLC__txebke-21-40512__0001.0.pdf?mcid=tGE4TAMA
TUMBLEWEED TINY HOUSE: Seeks June 8 Plan Exclusivity Extension
--------------------------------------------------------------
Debtor Tumbleweed Tiny House Company, Inc. requests the U.S.
Bankruptcy Court for the District of Colorado to extend the 180-day
Period during which the Debtor may file a plan of reorganization to
June 8, 2021. This is the Debtor's fourth request for an extension
of the 180-day Period.
An objection to confirmation of the Debtor's Plan was filed by
FreedomRoads Holding Company, LLC. The objection filed by
FreedomRoads remains unresolved. After two continuances, a status
and scheduling conference regarding confirmation of the Plan was
scheduled for March 31, 2021.
The Debtor will soon file a motion to employ special litigation
counsel for the reasons that follow. This bankruptcy was filed
after the Debtor and its owner, Steve Weissmann, appeared on CNBC's
The Profit, a television program. In connection with the appearance
on the show, the Debtor was induced into borrowing a significant
amount of money from FreedomRoads toward an expansion project
recommended by the host of the program, Marcus Lemonis. Mr.
Weissmann signed a personal guaranty in connection with the loan.
Upon information and belief, Mr. Lemonis is a co-owner of
FreedomRoads and its subsidiary, Camping World. After Mr. Lemonis
failed to hold up his end of the bargain, the deal eventually fell
apart and the Debtor was left with significant debt without any of
the anticipated benefits. FreedomRoads is listed in the Debtor's
schedules with a disputed claim.
The basis for the Debtor's potential claims against FreedomRoads
and others is principally based on fraud in the inducement of the
loan at issue (the "Potential Claims") but the Debtor believes that
grounds supporting other related causes of action exist. After
special litigation counsel is employed and the Potential Claims are
investigated, the Debtor will be prepared to decide how to proceed
in this bankruptcy case.
The Debtor's business continues to improve and interruptions in the
Debtor's supply chain are less frequent after the COVID-19 pandemic
restrictions caused quite a change in businesses and individuals
around the world. The Debtor has acted diligently to address the
issues present in this bankruptcy case, has filed a Plan, and is
investigating its Potential Claims against FreedomRoads.
The Debtor requires additional time to attempt to investigate its
Potential Claims and to attempt to resolve its dispute with
FreedomRoads. The Debtor has made good faith progress toward
seeking confirmation of a plan of reorganization. The Debtor
continues to work well with its secured creditors and to make the
required adequate protection payments.
The Debtor has been paying its bills as they come due as shown by
its most recent Monthly Operating Reports.
The Debtor has acted with diligence to address issues in this case
that must be dealt with prior to developing and seeking
confirmation of a plan. Extending the 180-day Period will not
materially prejudice the interests of creditors and other
interested parties. Finally, the Debtor is not requesting an
extension to gain a tactical advantage over any of its creditors.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3fLcjyF from PacerMonitor.com.
About Tumbleweed Tiny House Company
Tumbleweed Tiny House Company, Inc., a manufacturer of tiny house
RVs, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Colo. Case No. 20-11564) on March 4, 2020. At the time
of the filing, the Debtor estimated between $500,000 and $1 million
in assets and between $1 million and $10 million in liabilities.
Judge Kimberley H. Tyson oversees the case.
Wadsworth Garber Warner Conrardy, P.C.and Gerard Fox Law, P.C.
serves as the Debtor's bankruptcy counsel and special counsel,
respectively. Stockman Kast Ryan + Company is the Debtor's
accountant.
U.S. STEEL: Moody's Hikes Corp. Family Rating to B3
---------------------------------------------------
Moody's Investors Service upgraded United States Steel
Corporation's Corporate Family rating to B3 from Caa1, its
Probability of Default rating to B3-PD from Caa1-PD, and its senior
unsecured debt rating to Caa1 from Caa2. At the same time, Moody's
assigned a rating of (P)Caa1 to U. S. Steel's senior unsecured
shelf and upgraded Big River Steel LLC's secured debt rating to B1
from B3. U. S. Steel's and Big River Steel's ratings outlook was
changed to positive from stable to reflect the likelihood its
credit metrics will be strong for the rating over the next 12
months and that further ratings upside is possible if they are
sustained at a similar level. The Speculative Grade Liquidity
Rating was upgraded to SGL-2 from SGL-3.
"The upgrade of U. S. Steel's ratings reflects the materially
improved steel sector fundamentals along with its recent debt and
interest expense reduction initiatives, which will support a strong
near term operating performance and sustainably stronger credit
metrics." said Michael Corelli, Moody's Senior Vice President and
lead analyst for U. S. Steel.
Assignments:
Issuer: United States Steel Corporation
Senior Unsecured Shelf, Assigned (P)Caa1
Upgrades:
Issuer: United States Steel Corporation
Corporate Family Rating, Upgraded to B3 from Caa1
Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3
Senior Unsecured Conv./Exch. Bond/Debenture, Upgraded to Caa1
(LGD5) from Caa2 (LGD5)
Senior Unsecured Regular Bond/Debenture, Upgraded to Caa1 (LGD5)
from Caa2 (LGD5)
Issuer: Allegheny County Industrial Dev. Auth., PA
Senior Unsecured Revenue Bonds, Upgraded to Caa1 (LGD5) from Caa2
(LGD5)
Issuer: Bucks County Industrial Development Auth., PA
Senior Unsecured Revenue Bonds, Upgraded to Caa1 (LGD5) from Caa2
(LGD5)
Issuer: Hoover (City of) AL, Industrial Devel. Board
Senior Unsecured Revenue Bonds, Upgraded to Caa1 (LGD5) from Caa2
(LGD5)
Issuer: Indiana Finance Authority
Senior Unsecured Revenue Bonds, Upgraded to Caa1 (LGD5) from Caa2
(LGD5)
Issuer: Ohio Water Development Authority
Senior Unsecured Revenue Bonds, Upgraded to Caa1 (LGD5) from Caa2
(LGD5)
Issuer: Southwestern Illinois Development Authority
Senior Unsecured Revenue Bonds, Upgraded to Caa1 (LGD5) from Caa2
(LGD5)
Issuer: Big River Steel LLC
Gtd. Senior Secured Regular Bond/Debenture, Upgraded to B1 (LGD2)
from B3 (LGD3)
Issuer: Arkansas Development Finance Authority
Senior Secured Revenue Bonds, Upgraded to B1 (LGD2) from B3
(LGD3)
Outlook Actions:
Issuer: United States Steel Corporation
Outlook, Changed To Positive From Stable
Issuer: Big River Steel LLC
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
U. S. Steel's B3 corporate family rating reflects its high debt
level and somewhat elevated leverage and weak interest coverage in
a normalized steel price environment, as well as its inconsistent
free cash flow which will continue to be impacted by its elevated
capital investments in its "Best of Both" strategy. It also
reflects its highly variable operating performance due to its
exposure to cyclical end markets and volatile steel prices. The
rating also incorporates the company's large size and scale and
strong market position as a leading US flat-rolled steel producer
and whose footprint is further enhanced by its diversification in
Central Europe. It also considers Moody's expectation for a
significantly improved operating performance in 2021 that will
result in near term metrics that are strong for the rating, but are
not likely sustainable as steel prices return to a more normalized
level when supply and demand comes into balance later this year.
U. S. Steel's operating results are expected to materially
strengthen in 2021 and adjusted EBITDA could rise to $2 billion or
higher due to a quicker than anticipated recovery in its key end
markets, with the exception of the oil & gas sector, along with the
addition of Big River Steel and the recent surge in steel prices.
Its U. S. Steel Europe segment will also benefit from the same
improved fundamentals as its domestic operations. Domestic steel
prices have surged with hot rolled coil prices (HRC) at a record
high of about $1,300 per ton in April 2021 after declining to a 4.5
year low around $440 per ton in July 2020 due to the effects of the
pandemic. The price surge has been attributable to a temporary
dislocation of supply and demand, low steel inventories and rising
iron ore and scrap prices. However, Moody's anticipate that demand
will ebb as inventories are replenished and supply continues to
ramp up as productivity improves and new capacity comes online and
for the worldwide supply/demand imbalance to still exist and for
prices to gradually decline towards their 10-year average price
range of about $600 - $700 per ton. Steel prices have historically
overshot to the upside and the downside for short periods of time
before returning to more normalized price levels.
U. S. Steel has taken advantage of the favorable steel sector
dynamics and accommodative capital markets and completed
significant financing actions in the first quarter of 2021 to pay
down its debt, reduce its interest costs, maintain a good liquidity
profile, enhance its financial flexibility and push out its debt
maturities. The company raised $790 million in a secondary stock
offering and issued $750 million of 6.875% Senior Notes due 2029
and used the proceeds from these transactions to redeem all of its
$1.056 billion of 12% Senior Secured Notes due 2025. It also used a
portion of its cash balance to repay the remaining $180 million of
borrowings under the Export-Import loan and $621 million of
borrowings under the US and USSK credit facilities. These actions
have reduced debt by approximately $1.1 billion and annual run-rate
interest expense by around $90 million, excluding the impact of the
Big River Steel debt assumed in connection with the acquisition in
January 2021.
If U. S. Steel is able to produce adjusted EBITDA of more than $2
billion and uses its free cash flow to pay down debt, then its
leverage ratio (debt/EBITDA) could decline to about 3.0x and its
interest coverage (EBIT/Interest) could rise to around 4.0x. These
metrics will be strong for the B3 corporate family rating and the
company's rating could be considered for further upgrade if it
continues to generate free cash flow and pays down debt, steel
prices stabilize at a higher than historical level and it
successfully integrates Big River Steel and executes on its "Best
of Both" strategy.
U. S. Steel has a speculative grade liquidity rating of SGL-2 since
it is expected to maintain good liquidity. It had about $2.0
billion of unrestricted cash and borrowing availability of $944
million on its $2 billion asset based revolving credit facility as
of December 31, 2020. The credit facility matures in October 2024
and had $505 million of borrowings outstanding. The facility
requires the company to maintain a fixed charge coverage ratio of
1.0x should availability be less than the greater of 10% of the
total aggregate commitment and $200 million. The company's
borrowing availability was effectively reduced by $200 million
since it would not be able to meet the fixed charge coverage ratio.
Additionally, due to the level of receivables and inventory
qualifying for inclusion in the borrowing base being less than the
facility total, availability was reduced by a further $351 million.
Moody's anticipate the company's cash balance materially declined
in the first quarter since a portion was used to pay down
borrowings and to fund the acquisition of the remaining ownership
interest in Big River Steel for an aggregate purchase price of
approximately $773 million in January 2021. However, its borrowing
availability likely increased significantly as covenant
restrictions were potentially removed and the borrowing base rose
along with higher inventories and receivables.
The company also has a Euro 460 million ($564 million equivalent at
December 31, 2020) secured credit facility at its U. S. Steel
Kosice (USSK) subsidiary in Europe, which matures in September
2023. Euro 300 million (roughly $368 million) was outstanding as of
December 31, 2021.
The two-notch upgrade of Big River Steel's secured debt reflects
its priority position in the consolidated capital structure and the
benefit of U. S. Steel redeeming all of its secured notes and
issuing additional unsecured debt which enhances the loss absorbing
buffer below the secured debt. The Caa1 ratings on U.S. Steel's
convertible notes, senior unsecured notes and IRB's reflects their
effective subordination to the secured ABL, secured notes and bonds
as well as priority payables.
The positive ratings outlook incorporates Moody's expectation for a
significantly improved operating performance in 2021 that will
result in credit metrics that are strong for the company's rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
U. S. Steel's ratings could be considered for an upgrade if steel
prices are sustained above historical averages, Big River Steel is
successfully integrated and the strategic benefits of the "Best of
Both" strategy is achieved. Quantitatively, if U. S. Steel is able
to sustain leverage of no more than 4.5x through varying price
points and (CFO-dividends) in excess of 13% of its outstanding
debt, ratings could be positively impacted.
The company's ratings could be downgraded should steel sector
conditions materially deteriorate such that its leverage ratio is
sustained above 6.0x or (CFO-dividends) below 8% of its outstanding
debt, or it fails to consistently generate free cash flow or
maintain an adequate liquidity profile.
Headquartered in Pittsburgh, Pennsylvania, United States Steel
Corporation is the third largest flat-rolled steel producer in the
US in terms of production capacity. The company manufactures and
sells a wide variety of steel sheet, tubular and tin products
across a broad array of industries including service centers,
transportation, appliance, construction, containers, and oil, gas
and petrochemicals. It also has an integrated steel plant and coke
production facilities in Slovakia (U. S. Steel Kosice). Revenues
for the twelve months ended December 31, 2020 were $9.7 billion.
principal methodology used in these ratings was Steel Industry
published in September 2017.
U.S.A. PARTS: $750K Sale of Kearneysville Property Held in Abeyance
-------------------------------------------------------------------
Judge David L. Bissett of the U.S. Bankruptcy Court for the
Northern District of West Virginia held in abeyance his
consideration of U.S.A. Parts Supply, Cadillac U.S.A. Oldsmobile
U.S.A. Limited Partnership's sale of the real property located at
261 Industrial Blvd., in Kearneysville, West Virginia, legally
described as Lot No. 8, Bardane Industrial Park, located in
Jefferson County, West Virginia, together with a Leaseback, to 261
Industrial Boulevard, LLC for $750,000, subject to higher and
better offers.
The Motion to Sell is held in abeyance pending a decision on
confirmation and the motions to dismiss filed by the United State
Trustee and Creditors, Michael Chiacchieri and Christopher Corrado.
About U.S.A. Parts Supply
U.S.A. Parts Supply, Cadillac U.S.A. and Oldsmobile U.S.A. LP
(formerly doing business as Cadillac U.S.A. Parts Supply LP) is an
auto parts supplier in Kearneysville, W. Va.
U.S.A. Parts Supply filed a voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. W.Va. Case No. 20-00241) on March
22, 2020. The petition was signed by Michael Cannan, sole
shareholder and officer of general partner CUSAPS, Inc. At the
time of filing, the Debtor estimated $1 million to $10 million in
both assets and liabilities.
James P. Campbell, Esq. at Campbell Flannery, P.C., is the
Debtor's
legal counsel.
VICI PROPERTIES: S&P Alters Outlook to Positive, Affirms 'BB' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on gaming REIT VICI
Properties Inc. to positive from stable and affirmed all of its
ratings on the company, including its 'BB' issuer credit rating.
The positive outlook reflects the possibility that S&P could raise
its rating on VICI over the next 12 months if it continues to fund
its future acquisitions in a manner that enables it to sustain
leverage in the 5.0x-5.5x range and makes progress toward
unencumbering a significant portion of its asset base by
refinancing at least a material portion of its secured term loan,
possibly in conjunction with its planned near-term acquisition
financing.
VICI plans to fund its $4 billion acquisition of the real estate
assets of the Venetian Resort Las Vegas with the proceeds from a
sizable equity issuance, which will allow it to maintain leverage
in its long-term policy range of 5.0x-5.5x. VICI plans to use
approximately $2.4 billion of proceeds from equity forward sale
agreements and about $1.7 billion of incremental debt to fund this
acquisition, which S&P expects to close by the end of 2021. The
company's use of a sizable equity issuance to fund this large
acquisition demonstrates its commitment to its financial policy of
using sufficient equity to fund its acquisitions such that it
maintains leverage in the 5.0x-5.5x range. This provides it with
some cushion relative to our 6x adjusted debt to EBITDA upgrade
threshold.
VICI's use of equity forward sale agreements to fund its
acquisitions reduces its funding risk. Over the past few years,
VICI has demonstrated a track record of issuing equity or putting
in place a mechanism to secure future equity proceeds through
forward-sale agreements when it announces large acquisitions, as it
did at the time of the Venetian Resort acquisition announcement in
March 2021 and at the time it announced the acquisition of three
regional casinos and certain lease modifications with Caesars
Entertainment Inc. in June 2019. The company also used an equity
forward sale agreement in June 2020 to raise equity when it
announced an agreement to provide a mortgage loan to Caesars
Entertainment Inc. for the Caesars Forum Convention Center in Las
Vegas. This reduces its funding risk by ensuring it has access to
sufficient proceeds to finance the equity portion of its announced
acquisitions and lessens the risk that the equity markets will
become weak or volatile in the period between when it announces its
acquisition and when the acquisition closes, which can be long in
the gaming sector.
The Venetian Resort acquisition will enhance VICI's scale and add
incremental tenant diversity, though it will also increase the
company's exposure to Las Vegas. Pro forma for the acquisition, we
expect VICI's revenue and EBITDA to increase by approximately 20%
because it is adding significant scale and a high-quality resort
asset to its portfolio. The acquisition will also improve its
tenant diversity and lessen the company's reliance on its current
largest tenant, Caesars Entertainment Inc. In 2022, S&P expects
rent from Caesars to account for about 70% of VICI's rental
revenue, down from 83% in 2021. However, the Venetian acquisition
will increase VICI's exposure to Las Vegas, which is a gaming
market that it expects will recover from the pandemic at a slower
pace than other local and regional markets because it relies on
conventions and air travel. Pro forma for the acquisition, the Las
Vegas market will account for about 40% of VICI's rent in 2022,
which compares with 30% in 2021.
Rent coverage based on the asset's current EBITDA generation is
negligible and would be under 2x based on the property's 2019
EBITDA. In addition, the parent of the buyer of the Venetian's
operations (affiliates of Apollo Global Management) is not
guaranteeing its rent payments to VICI. However, Apollo will
benefit (as will VICI indirectly) from a contingent lease support
agreement that Las Vegas Sands Corp. (LVS), the seller, agreed to
provide Apollo through 2023. Specifically, LVS has agreed to
temporarily support the buyer's rent payments to VICI by up to $250
million annually through 2023 if the property's EBITDAR is below
$500 million. Given our expectation that Las Vegas will recover
more slowly than other gaming destinations because of its reliance
on conventions and air travel, S&P believes LVS may be called upon
to support the tenant's rent payments and anticipate it will have
ample liquidity to do so, which will provide material support to
VICI's rent revenue from the acquired asset.
VICI's capital structure compares unfavorably with those of other
higher-rated REITs. Despite a significant shift in the company's
capital structure, as it has taken on an increasing level of
unsecured debt since late 2019 and moved away from its previous
all-secured capital structure to provide it with an increasing
level of financial flexibility and capital markets access, its
asset base remains largely encumbered because of its existing
secured term loan. Therefore, VICI's capital structure compares
unfavorably with those of the other higher-rated gaming and
traditional REITs we cover. S&P said, "We expect the company will
continue to access the unsecured notes market to fund its future
acquisitions, including its purchase of the Venetian, which will
increase the amount of unsecured debt in its capital structure over
time. Additionally, we expect VICI to refinance at least a material
portion of its term loan in the unsecured notes market over the
next year, which is in line with its public statements that it will
refinance portions of the term loan in conjunction with its
acquisition financing and its financial policy goal to unencumber
its balance sheet. The company has interest-rate swap agreements on
about $1.5 billion of the $2 billion term loan that don't mature
until 2023 and could face some breakage costs there. However, we
believe it could refinance a material portion of the term loan in
conjunction with its debt capital raise for the Venetian
acquisition. In addition, we believe it will likely fully
unencumber its asset base, presumably over the next two years."
The recovery in gaming is already underway, which reduces the risks
that VICI will need to offer rent deferrals or renegotiate its
rents because of the pandemic. Although the coronavirus pandemic
led to the closure of all U.S. casinos, starting in mid-March of
last year and continuing through much of the second quarter, VICI
did not experience any cash flow volatility under its triple-net
leases because nearly all of its rents are fixed and its tenants
continue to make full cash rent payments. The company reported that
all of its tenants fulfilled their cash rent obligations from the
beginning of the pandemic through February 2021. This compares
favorably with the experiences of a number of other REITs that
renegotiated or deferred their rents or accepted real estate in
exchange for rent credits.
S&P said, "Although there remains some uncertainty as to how the
gaming recovery will unfold over the next few quarters, we believe
the continued pace of vaccinations, ongoing economic stimulus, and
our economists' forecast for good consumer spending growth will
continue to support the revenue and cash flow of casinos. That
said, we believe VICI will be less directly affected by the slower
recovery in gaming given its master lease agreements with its
tenants and their current good liquidity positions. In our view,
the company's tenants are also better equipped to handle further
operational disruptions if the number of cases spike in their
markets and the states or their gaming regulators enact additional
operating limitations or require properties to close again. This is
because of the liquidity-enhancing transactions tenants completed
in 2020, as well as good regional gaming operating performance
since they reopened despite the reduced levels of visitation and
gaming capacity. We believe the vast majority of VICI's tenants,
especially its largest tenant Caesars Entertainment Inc., have
sufficient liquidity to continue making their rent payments even in
a lower revenue environment. As of Dec. 31, 2020, Caesars
Entertainment Inc. had approximately $4 billion of liquidity,
including unrestricted cash and revolver availability. Therefore,
we believe it is unlikely VICI would need to renegotiate or defer
its rents.
"The positive outlook reflects the possibility that we could raise
our rating on VICI over the next 12 months if it continues to fund
future its acquisitions in a manner that enables it to sustain
leverage in the 5.0x-5.5x range and makes progress toward
unencumbering a significant portion of its asset base by
refinancing at least a material portion of its secured term loan,
possibly in conjunction with its planned near-term acquisition
financing. We also expect the company's cash rent collection to
remain very high over the next year. This incorporates the good
liquidity positions of its two largest tenants, the recent
improvement in regional gaming operators' cash flow generation, and
our view that the company will not likely need to provide its
tenants with material rent deferrals.
"We could raise our rating on VICI if it successfully unencumbers a
significant incremental portion of its asset base by refinancing a
material portion of its secured term loan, demonstrating its
ability to execute on its financial policy commitment to transition
to an all-unsecured debt capital structure and increase its
financial flexibility. We would also expect VICI to fund any future
announced acquisitions such that it maintains leverage in line with
its financial policy range, which would provide it with some
cushion relative to our 6x upgrade threshold. Prior to raising our
rating, we would also need to conclude VICI's largest tenant's
liquidity and long-term credit quality would not be impaired by the
effects of COVID-19 or its recent mergers and acquisitions in a
manner that increases VICI's business or financial risks.
"We could revise our outlook on VICI to stable if we no longer
believe it will be able to successfully unencumber its asset base,
it announces acquisitions that cause its leverage to increase above
our 6x upgrade threshold, or we believe its tenants' credit quality
or liquidity is impaired such that we expect the company's business
or financial risks to increase. While less likely given the
liquidity position of the company's largest tenant, we could revise
our outlook to stable or negative if a rising volume of coronavirus
cases led to additional closures or lockdowns that caused its
tenants' liquidity to deteriorate in a manner that increased the
risk of rent renegotiations or deferrals. We could also lower our
rating if we believe VICI will sustain leverage of more than 7.5x.
Given the cushion we expect VICI to maintain relative to this
downgrade threshold and the company's current financial policy of
sustaining leverage in the 5.0x-5.5x range, we believe a downgrade
would most likely occur due to a significant shift in its financial
policy such that it tolerates a higher level of leverage in
conjunction with undertaking a leveraging acquisition."
VYANT BIO: Completes Merger With StemoniX
-----------------------------------------
Vyant Bio, Inc., formerly known as Cancer Genetics, Inc., completed
its business combination with StemoniX, Inc., in accordance with
the Agreement and Plan of Merger and Reorganization, dated as of
Aug. 21, 2020 by and among the Company, StemoniX and CGI
Acquisition, Inc., a wholly-owned subsidiary of the Company
("Merger Sub"), as amended, pursuant to which Merger Sub merged
with and into StemoniX, with StemoniX surviving the merger as a
wholly-owned subsidiary of the Company. The Company continues to
operate VYNT's historical biotech business and also focuses on
advancing StemoniX's microOrgans platform and augmented
intelligence tools (AnalytiXTM) for drug discovery and
development.
Under the terms of the Amended Merger Agreement, the Company issued
(i) an aggregate of 17,977,272 shares of VYNT common stock, par
value $0.0001 per share to the holders of StemoniX capital stock
(after giving effect to the conversion of StemoniX preferred shares
and StemoniX convertible notes) and StemoniX warrants (which does
not include certain warrants issued to a certain StemoniX
convertible note holder, (ii) options to purchase an aggregate of
893,179 shares of Common Stock to the holders of StemoniX options
with exercise prices ranging from $0.66 to $4.61 per share and a
weighted average exercise price of $1.46 per share, and (iii)
warrants expiring Feb. 23, 2026 to purchase 143,890 shares of
Common Stock at a price of $5.9059 per share to the holder of the
Convertible Note Warrants.
Immediately after the Merger, there were approximately 28,984,458
shares of Common Stock outstanding. In addition, there were
options to purchase an aggregate of approximately 949,086 shares of
Common Stock and warrants to purchase an aggregate of approximately
2,301,576 shares of Common Stock outstanding.
The shares of Common Stock issued to the former equity holders of
StemoniX, and the shares of Common Stock issuable upon the exercise
of newly issued VYNT options and Exchange Warrants, were registered
with the Securities and Exchange Commission on a Registration
Statement on Form S-4 (Reg. No. 333-249513), as amended.
The Common Stock is listed on the Nasdaq Capital Market and
previously traded through the close of business on March 30, 2021
under the ticker symbol "CGIX." It commenced trading on the Nasdaq
Capital Market, on a post-merger basis, under the ticker symbol
"VYNT" on March 31, 2021. The Common Stock has a new CUSIP number,
92942V109.
Change in Company's Certifying Accountant
Prior to the Merger, the Company's consolidated financial
statements were audited by Marcum LLP. For accounting purposes,
the Merger is treated as a reverse acquisition and, as such, the
historical financial statements of the accounting acquirer,
StemoniX, which have been audited by Deloitte & Touche LLP, will
become the historical consolidated financial statements of the
Company. In a reverse acquisition, a change of accountants is
presumed to have occurred unless the same accountant audited the
pre-transaction financial statements of both the legal acquirer and
the accounting acquirer, and such change is generally presumed to
occur on the date the reverse acquisition is completed. As a
result of the Merger, on March 31, 2021, the Audit Committee of the
Board of Directors of the Company approved the dismissal of Marcum
as the Company's independent registered public accounting firm,
effective on
March 31, 2021, and the engagement of Deloitte as its new
independent registered public accounting firm as of and for the
year ended Dec. 31, 2021. The change in independent registered
public accounting firm is not the result of any disagreement with
Marcum.
Marcum's report on the Company's financial statements for the
fiscal year ended Dec. 31, 2019 contained a paragraph stating that
there was substantial doubt about the Company's ability to continue
as a going concern. Except as described in the previous sentence,
Marcum's reports on the Company's financial statements for the
fiscal years ended Dec. 31, 2020 and Dec. 31, 2019 did not contain
an adverse opinion or a disclaimer of opinion, and neither such
report was qualified or modified as to uncertainty, audit scope, or
accounting principle.
During the fiscal years ended Dec. 31, 2020 and Dec. 31, 2019 and
the subsequent interim period through March 30, 2021, (i) there
were no disagreements with Marcum on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreement, if not resolved to
the satisfaction of Marcum, would have caused Marcum to make
reference thereto in its reports on the financial statements for
such years, and (ii) there were no reportable events as described
in paragraph (a)(1)(v) of Item 304 of Regulation S-K, other than
the material weaknesses in the internal control over financial
reporting that were previously reported in the Company's Forms 10-K
filed with the U.S. Securities and Exchange Commission on May 29,
2020 and March 31, 2021.
During the Company's fiscal years ended Dec. 31, 2019 and 2020 and
the subsequent interim period through March 31, 2021, neither the
Company nor anyone on its behalf has consulted with Deloitte on any
matter that:
(i) involved the application of accounting principles to a
specified transaction, either completed or proposed, or the
type of audit opinion that might be rendered on the
Company's
financial statements, and neither a written report nor oral
advice was provided to the Company that Deloitte concluded
was an important factor considered by the Company in
reaching
a decision as to any accounting, auditing or financial
reporting issue; or
(ii) was either the subject of a "disagreement" (as such term is
defined in Item 304(a)(1)(iv) of Regulation S-K and the
related instructions to Item 304 of Regulation S-K) or a
"reportable event" (as such term is defined in Item
304(a)(1)
(v) of Regulation S-K).
Director Resignations
In accordance with the Amended Merger Agreement, on March 30, 2021,
at the effective time of the merger, Edmund Cannon and Franklyn G.
Prendergast, M.D., Ph.D. resigned from the Board, with Geoffrey
Harris and Howard McLeod remaining on the Board. Following such
resignations and effective as of the Effective Time, the following
individuals, were appointed to the Board: John A. Roberts,
Yung-Ping Yeh, Paul Hansen, Marcus Boehm, John Fletcher (board
chair) and Joanna Horobin, whose terms expire at the Company's next
annual meeting of stockholders.
Appointment of Certain Officers
In accordance with the Amended Merger Agreement, on March 30, 2021,
the Board appointed the following officers of the Company,
effective at the Effective Time: Yung-Ping Yeh as chief innovation
officer and Andrew D.C. LaFrence, CPA as chief financial officer.
These officers join John A. Roberts, the Company's president and
chief executive officer, and Ralf Brandt, Ph.D, the Company's
president of Discovery & Early Development Services, as the
Company's executive officers.
Yung-Ping Yeh, MS, MBA, PgMP, PMP co-founded StemoniX in April 2014
and, since then, has served as its chief executive officer and a
Board Member. Prior to co-founding StemoniX, Mr. Yeh
commercialized multiple technologies to the tech industry.
Highlights include serving as team lead for the first solid state
drive product for Seagate Technology, leading the global
partnership between Samsung and Seagate to create new flash
technology and program managing the operating system software
development for Dell enterprise storage systems. Mr. Yeh has
successfully led through a multi-disciplinary approach for the last
two decades of his career. Mr. Yeh holds a bachelor of science and
master's degree in mechanical engineering (nanotechnology) from
University of California, San Diego, and a master's degree in
business administration from University of Minnesota's Carlson
School of Management. He has attained professional certifications
in program and project management from the Project Management
Institute and Mergers and Acquisitions from Northwestern's Kellogg
School of Management. Mr. Yeh serves on the UC San Diego Alumni
Board of Directors and Board of Directors for the Medical Alley,
the leading association in the healthcare industry.
Andrew D.C. LaFrence joined StemoniX as its chief financial officer
in August 2019 and, since March 2020, he has also served as its
chief operating officer. Mr. LaFrence has 36 years of accounting
and finance experience, including executive management positions at
public and private life sciences companies. Previously, he was
senior vice president and chief financial officer of Biothera
Pharmaceuticals, Inc. from May 2018 to August 2019, as well as vice
president Finance, Information Systems and chief financial officer
at Surmodics, Inc. (NASDAQ: SRDX) for five years. Prior to
Surmodics, Mr. LaFrence served as chief financial officer for CNS
Therapeutics, a venture-backed intrathecal drug company. He was an
audit partner at KPMG LLP where he focused on supporting
venture-backed, high-growth medical technology, pharmaceutical,
biotech and clean tech private and public companies. Mr. LaFrence
is a certified public accountant and has a bachelor's degree in
accounting and a minor in business administration from Illinois
State University.
Appointment of Directors
In accordance with the Amended Merger Agreement, on March 30, 2021,
effective at the effective time of the Merger, the following
individuals were appointed to the Board as directors, along with
Mr. Roberts and Mr. Yeh.
John Fletcher (board chair) brings to the board more than 30 years
of strategy and financing experience across the pharmaceutical and
healthcare industry. In 1983, Mr. Fletcher founded Fletcher
Spaght, Inc., a consulting firm that provides growth-focused
strategy assistance to client companies, and since its founding has
served as its chief executive officer. Since 2001, Mr. Fletcher
has also served as the managing partner of Fletcher Spaght
Ventures, a venture capital fund. Mr. Fletcher's current and past
board experience includes both public and private companies. Mr.
Fletcher currently serves on the boards of Repro Med Systems, Inc.
(aka Koru Medical), Clearpoint Neuro, Inc., and Axcelis
Technologies, Inc., all of which are public companies. Mr.
Fletcher previously served on the boards of The Spectranetics
Corporation, Autoimmune, Inc., Fischer Imaging Corp., Panacos
Pharmaceuticals Inc., NMT Medical Inc., and Quick Study Radiology
Inc., all of which are public companies, and on the board of
GlycoFi, Inc., a private company. In addition, Mr. Fletcher has
served on the boards of many academic and non-profit institutions.
Mr. Fletcher worked on the $2 billion acquisition of Spectranetics
by Koninklijke Philips N.V. (Royal Philips) and the $400 million
acquisition of GlycoFi by Merck & Co., Inc., and received the
National Association of Corporate Directors (NACD) Director of the
Year Award in 2018 specifically for his work at Spectranetics. Mr.
Fletcher is a graduate of Southern Illinois University (MBA),
Central Michigan University (Master's Degree in International
Finance), and George Washington University (BA) and has served as
an instructor in International Business at the Wharton School of
Business, and as a Captain and jet pilot in the United States Air
Force.
Marcus Boehm has led research and development programs in
biotechnology for 29 years. He is co-founder of Escient
Pharmaceuticals, Inc. where he has served as chief scientific
officer since 2018. Escient Pharmaceuticals, Inc. is a San
Diego-based pre-clinical stage company focused on finding novel
solutions to auto-reactive clinical conditions with high unmet
medical need. Previously, he was co-founder and chief technology
officer at Receptos, Inc. from 2009 to 2015, when it was acquired
by Celgene Corporation. At Receptos, Inc., Dr. Boehm collaborated
to develop treatments for multiple sclerosis, ulcerative colitis,
and eosinophilic esophagitis and also led early discovery research
and development programs, chemical manufacturing and controls, and
supported corporate financing and partnering activities. In 2001,
Dr. Boehm served as vice president, Chemistry at Conforma
Therapeutics Corp, where he led a team that discovered and
developed a treatment for solid tumors. Dr. Boehm started his
industry career with Ligand Pharmaceuticals in 1991 where he held
various positions with progressing responsibility. He led
chemistry efforts on programs resulting in the discovery and
development of treatment of patients with AIDS-related
complications. He is a co-author and inventor of over 100 patents
and publications in the area of oncology, autoimmune and metabolic
diseases. He has served on Board of Directors for StemoniX and is
currently a member of its Scientific Advisory Board. Dr. Boehm
received a B.A. in Chemistry from the University of California, San
Diego, a Ph.D. in Chemistry from the State University of New York
Stony Brook and completed a National Institutes of Health
Postdoctoral Fellowship at Columbia University.
Paul Hansen has been a member of the Board of Directors of StemoniX
since 2015. Since 2014, Mr. Hansen has served as a Senior Fellow
with the University of Minnesota's Technological Leadership
Institute. Mr. Hansen is a founder and, since 2016, has been
President of Minnepura Technologies, SBC. From 1999 to 2014, Mr.
Hansen held senior executive positions at 3M Company, including
President and CEO of 3M Mexico. Mr. Hansen holds a BA in Chemistry
and Economics from St. Olaf College and an MBA in Marketing
Management from the Carlson School of Management at the University
of Minnesota.
Dr. Joanna Horobin is an accomplished drug developer and biotech
leader with over 35 years of experience in the pharmaceutical and
biotech sector. Dr. Horobin serves as a non-executive director on
the boards of Kymera Therapeutics Inc. (NASDAQ, KYMR), Nordic
Nanovector ASA (Oslo, NANO), Liquidia Corporation (NASDAQ, LQDA)
and as Chair of privately held iOnctura SA. Dr. Horobin has held
multiple C-suite roles in biotech companies, most recently as the
Chief Medical Officer at Idera Pharmaceuticals Inc. (NASDAQ, IDRA)
and was also the CEO of Syndax Pharmaceuticals (NASDAQ, SNDX). She
worked initially in clinical development roles resulting in the
development and launch of 8 products in the anti-infective,
cardiovascular, and anti-inflammatory categories. Moving to
general management roles of increasing responsibility in the UK,
France, and US, she shifted to cancer drug development, which has
been her major career focus. She led a joint venture between Rhone
Poulenc and Chugai to develop and launch Chugai's gCSF product
Granocyte in Europe and, as VP Oncology, launched Rhone Poulenc
Rorer (now Sanofi) as a major player in oncology with the global
launch of Taxotere. After gaining her medical qualifications from
the University of Manchester Medical School in the United Kingdom
Dr. Horobin gained membership of the Royal College of General
Practitioners and practiced as a general practitioner in London,
England.
Amendments to Bylaws
On March 30, 2021, the Company's Board of Directors authorized an
amendment to the Company's certificate of incorporation to change
the corporate name of the Company from "Cancer Genetics, Inc." to
"Vyant Bio, Inc." The Company filed the COI Amendment on March 30,
2021 with the Secretary of State of the State of Delaware to effect
the Name Change. The Name Change did not alter the voting powers
or relative rights of the Common Stock.
On March 31, 2021, the trading symbol on the Nasdaq Capital Market
for the Common Stock was changed from "CGIX" to "VYNT" solely to
reflect the Name Change.
Following the merger, the Company's principal executive offices are
located at 2370 State Route 70 West, Suite 310, Cherry Hill, NJ
08002.
About Vyant Bio
Vyant Bio, Inc. (formerly known as Cancer Genetics, Inc.) is
emerging as an advanced biotechnology drug discovery company. With
capabilities in data, science (both biology and chemistry),
engineering and regulatory, the Company is rapidly identifying
small and large molecule therapeutics and derisking decision making
through multiple in silico, in vitro and in vivo modalities.
Vyant Bio reported a net loss of $8 million for the year ended Dec.
31, 2020, compared to a net loss of $6.71 million for the year
ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $8.35
million in total assets, $4.37 million in total liabilities, and
$3.98 million in total stockholders' equity.
WC CUSTER CREEK: Court Conditionally Approves Disclosure Statement
------------------------------------------------------------------
Judge Tony M. Davis has entered an order conditionally approving
the Disclosure Statement of WC Custer Creek Center Property, LLC.
May 7, 2021, at 5:00 p.m. (CT), is fixed, as the last day for
filing and serving written objections to confirmation of the Plan.
May 7, 2021, at 5:00 p.m. (CT), is fixed as the last day for
submitting ballots for acceptances or rejections of the Plan.
A hearing on the confirmation of the Plan and any objections
thereto shall commence on May 12, 2021, at 1:00 p.m. (CT), at the
U.S. Bankruptcy Court, Courtroom No. 1, 903 San Jacinto Blvd.,
Austin, Texas. The hearing will be held via Webex.
About WC Custer Creek
Nate Paul is a successful real estate entrepreneur in the Austin
market -- one of the hottest real estate markets in the country.
WC Custer Creek Center Mezz, LLC is the manager of WC Custer Creek
Center Property, LLC; and Nate Paul is the manager. WC Custer
Creek Center Property owns an approximately 78,705 square feet
parcel of real property improved by an income-producing shopping
center in Plano, Texas.
Austin, Texas-based WC Custer Creek Center Property, LLC, filed a
Chapter 11 petition (Bankr. W.D. Tex. Case No. 20-11202) on Nov. 2,
2020. Natin Paul, the manager, signed the petition. In its
petition, the Debtor was estimated to have $10 million to $50
million in assets and $1 million to $10 million in liabilities.
Judge Tony M. Davis oversees the case. The Debtor tapped Fishman
Jackson Ronquillo, PLLC, and Reed Smith LLP as its legal counsel.
Columbia Consulting Group, PLLC, is the Debtor's financial advisor.
WCOP INC: Case Summary & 3 Unsecured Creditors
----------------------------------------------
Debtor: WCOP, Inc.
Windy City Market
DBA Windy City Produce
3340 N. Pulaksi Road
Chicago, IL 60641
Business Description: WCOP, Inc.
Chapter 11 Petition Date: April 9, 2021
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 21-04679
Judge: Hon. Lashonda A. Hunt
Debtor's Counsel: J. Kevin Benjamin, Esq.
BENJAMIN LEGAL SERVICES PLC
1016 W. Jackson Blvd.
Chicago, IL 60607-2914
Tel: (312) 853-3100
Fax: (312) 577-1707
E-mail: attorneys@benjaminlaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Pasquale Lucchetto a/k/a Joseph
Luccetto, president.
A copy of the petition containing, among other items, a list of the
Debtor's three unsecured creditors is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/RQXPVXY/WCOP_Inc__ilnbke-21-04679__0001.0.pdf?mcid=tGE4TAM
WESTERN ROBIDOUX: Sale of Customer Lists to Pittman Approved
------------------------------------------------------------
Judge Brian T. Fenimore of the U.S. Bankruptcy Court for the
Western District of Missouri authorized Western Robidoux, Inc.'s
use and sale of its customer list and certain associated property
to Pittman Printing, Inc., in accordance with the terms and
conditions of their Customer List Purchase Agreement.
In exchange, Pittman proposes to exclusively purchase the Debtor's
customer lists for the payment of $1,500 in addition to 15% of the
sales made by Pittman to the Debtor's customers for one year and
12% of the sales made to the Debtor's customers in the following
two years.
Without need for any additional Court order, the Debtor and its
agents are authorized and directed to execute and deliver, and
empowered to perform under, consummate, and implement the sale and
grant of exclusive use of the Assets and to take all further
actions as may be reasonably requested by Pittman to consummate or
facilitate the sale or grant of exclusive use.
Pittman will have no liability or responsibility for any liability
or other obligation of the Debtor arising under or related to the
Assets other than as expressly set forth in the Order.
Notwithstanding the provisions of Bankruptcy Rule 6004(h), there is
no stay pursuant to Bankruptcy Rule 6004(h) and except at otherwise
provided herein the Order will be effective and enforceable
immediately upon entry.
The counsel for the Debtor will serve a copy of the Order by mail
to all interested parties who were not served electronically.
A copy of the Agreement is available at
https://tinyurl.com/jd57ws2r from PacerMonitor.com free of charge.
About Western Robidoux
Western Robidoux, Inc. is a family-owned commercial printing and
fulfillment company in St. Joseph, Missouri, run by the Burri
family for more than 40 years.
Western Robidoux sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Mo. Case No. 19-50505) on Oct. 19,
2019. The petition was signed by Connie S. Burri, president. At
the
time of the filing, the Debtor estimated to have $1 million and
$10
million in both assets and liabilities.
The case is assigned to Judge Brian T. Fenimore. The Debtor tapped
Victor F. Weber, Esq., at Merrick, Baker & Strauss, P.C. as
counsel; German May PC and Horn, Aylward, & Bandy, LLC as special
counsel; and Liechti, Franken & Young as accountant.
YOUNG MEN'S: Seeks Approval to Hire Glenn Haley as CEO
------------------------------------------------------
The Young Men's Christian Association of Topeka, Kansas seeks
approval from the U.S. Bankruptcy Court for the District of Kansas
to hire Glenn Haley as its chief executive officer.
The services to be provided by the CEO include:
1. assessing operations, finances and bankruptcy proceedings
in partnership with the YMCA of the USA, the state Alliance of
Kansas, and the Wichita YMCA;
2. engaging the board of directors in planning and
implementing short-term plan to stabilize YMCA and decision-making
about future transition of the YMCA to permanent management
options;
3. applying YMCA best practices and resources from YMCA of the
USA to gather data, and implementing a short-term plan to address
critical or legacy issues facing the local YMCA;
4. directing and managing staff team and making appropriate
changes with the board's knowledge and support;
5. ensuring prudent fiscal management, reporting and controls,
and overseeing financial operations;
6. overseeing YMCA operations and programs and providing
strong leadership in turnaround management; and
7. acting as a resource to the board and helping the board
members understand and appreciate their role and responsibilities.
Mr. Haley will receive an annual salary of $100,000, to be paid as
part of the regular payroll process.
Mr. Haley disclosed in a court filing that he is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
About YMCA of Topeka, Kansas
The Young Men's Christian Association of Topeka, Kansas --
https://www.ymcatopeka.org/ -- is a tax-exempt organization that is
focused on youth development, healthy living and social
responsibility. For more information, visit
https://www.ymcatopeka.org/.
Young Men's Christian Association sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Kan. Case No. 20-20786) on May
21, 2020. At the time of the filing, the Debtor disclosed
$4,850,289 in assets and $5,490,339 in liabilities. Judge Dale L.
Somers oversees the case. The Debtor is represented by Hinkle Law
Firm, LLC.
YOUNGEVITY INTERNATIONAL: Delays Filing of 2020 Annual Report
-------------------------------------------------------------
Youngevity International, Inc. filed a Form 12b-25 with the
Securities and Exchange Commission notifying the delay in the
filing of its Annual Report on Form 10-K for the year ended Dec.
31, 2020.
Youngevity International was unable to compile and review certain
information required to permit the company to file a timely and
accurate report on its financial condition.
About Youngevity
Chula Vista, California-based Youngevity International, Inc. --
https://ygyi.com -- is a multi-channel lifestyle company offering a
hybrid of the direct selling business model that also offers
e-commerce and the power of social selling. Assembling a virtual
main street of products and services under one corporate entity,
the Company offers products from the six top selling retail
categories: health/nutrition, home/family, food/beverage (including
coffee), spa/beauty, apparel/jewelry, as well as innovative
services.
Youngevity reported a net loss attributable to common stockholders
of $23.50 million for 2018 following a net loss attributable to
common stockholders of $12.69 million for 2017. As of Sept. 30,
2019, the Company had $141.18 million in total assets, $85.01
million in total liabilities, and $56.17 million in total
stockholders' equity.
Mayer Hoffman McCann P.C., in San Diego, California, the Company's
auditor since 2011, issued a "going concern" qualification in its
report dated April 15, 2019, on the consolidated financial
statements for the year ended Dec. 31, 2018, citing that the
Company has recurring losses and is dependent on additional
financing to fund operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
[^] BOND PRICING: For the Week from April 5 to 9, 2021
------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bank of America Corp BAC 3.532 99.677 4/12/2021
Basic Energy Services Inc BASX 10.750 19.250 10/15/2023
Basic Energy Services Inc BASX 10.750 20.099 10/15/2023
Briggs & Stratton Corp BGG 6.875 8.500 12/15/2020
Buffalo Thunder
Development Authority BUFLO 11.000 50.000 12/9/2022
Chinos Holdings Inc CNOHLD 7.000 0.332 N/A
Chinos Holdings Inc CNOHLD 7.000 0.332 N/A
Corporate Office
Properties LP OFC 3.600 105.303 5/15/2023
Dean Foods Co DF 6.500 1.733 3/15/2023
Dean Foods Co DF 6.500 1.925 3/15/2023
Diamond Offshore Drilling DOFSQ 7.875 17.750 8/15/2025
Diamond Offshore Drilling DOFSQ 3.450 18.250 11/1/2023
ENSCO International Inc VAL 7.200 10.088 11/15/2027
EnLink Midstream Partners ENLK 6.000 62.489 N/A
Energy Conversion Devices ENER 3.000 7.875 6/15/2013
Energy Future Competitive
Holdings Co LLC TXU 0.988 0.072 1/30/2037
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 37.183 7/15/2023
Exela Intermediate LLC /
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Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011
Frontier Communications FTR 8.750 65.000 4/15/2022
Frontier Communications FTR 6.250 66.000 9/15/2021
Frontier Communications FTR 9.250 65.500 7/1/2021
GNC Holdings Inc GNC 1.500 1.250 8/15/2020
GTT Communications Inc GTT 7.875 15.482 12/31/2024
GTT Communications Inc GTT 7.875 27.750 12/31/2024
Goldman Sachs Group Inc/The GS 3.400 99.710 4/13/2021
Goodman Networks Inc GOODNT 8.000 28.578 5/11/2022
High Ridge Brands Co HIRIDG 8.875 1.134 3/15/2025
High Ridge Brands Co HIRIDG 8.875 1.134 3/15/2025
Hornbeck Offshore Services HOSS 5.000 0.568 3/1/2021
Liberty Media Corp LMCA 2.250 46.986 9/30/2046
MAI Holdings Inc MAIHLD 9.500 15.899 6/1/2023
MAI Holdings Inc MAIHLD 9.500 15.899 6/1/2023
MAI Holdings Inc MAIHLD 9.500 15.899 6/1/2023
MF Global Holdings Ltd MF 9.000 15.625 6/20/2038
MF Global Holdings Ltd MF 6.750 15.625 8/8/2016
Mashantucket Western
Pequot Tribe MASHTU 7.350 15.750 7/1/2026
Michaels Stores Inc MIK 8.000 112.306 7/15/2027
Michaels Stores Inc MIK 4.750 110.404 10/1/2027
Michaels Stores Inc MIK 4.750 109.930 10/1/2027
Michaels Stores Inc MIK 8.000 111.601 7/15/2027
National Rural Utilities
Cooperative Finance Corp NRUC 3.000 99.773 4/15/2021
National Rural Utilities
Cooperative Finance Corp NRUC 2.000 99.763 4/15/2021
National Rural Utilities
Cooperative Finance Corp NRUC 2.750 99.769 4/15/2021
National Rural Utilities
Cooperative Finance Corp NRUC 2.900 99.772 4/15/2021
National Rural Utilities
Cooperative Finance Corp NRUC 2.000 99.760 4/15/2021
Navajo Transitional
Energy Co LLC NVJOTE 9.000 65.500 10/24/2024
New York Life Global
Funding NYLIFE 2.000 99.881 4/13/2021
New York Life Global
Funding NYLIFE 2.000 99.910 4/13/2021
Nine Energy Service Inc NINE 8.750 36.411 11/1/2023
Nine Energy Service Inc NINE 8.750 39.407 11/1/2023
Nine Energy Service Inc NINE 8.750 39.623 11/1/2023
OMX Timber Finance
Investments II LLC OMX 5.540 1.439 1/29/2020
Optimas OE Solutions
Holding LLC / Optimas
OE Solutions Inc OPTOES 8.625 89.707 6/1/2021
Optimas OE Solutions
Holding LLC / Optimas
OE Solutions Inc OPTOES 8.625 89.707 6/1/2021
Pride International LLC VAL 6.875 18.000 8/15/2020
Pride International LLC VAL 7.875 18.000 8/15/2040
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Revlon Consumer
Products Corp REV 6.250 35.605 8/1/2024
Rolta LLC RLTAIN 10.750 1.729 5/16/2018
Sears Holdings Corp SHLD 8.000 1.125 12/15/2019
Sears Holdings Corp SHLD 6.625 2.824 10/15/2018
Sears Holdings Corp SHLD 6.625 2.824 10/15/2018
Sears Roebuck Acceptance SHLD 6.500 0.811 12/1/2028
Sears Roebuck Acceptance SHLD 6.750 0.403 1/15/2028
Sears Roebuck Acceptance SHLD 7.000 0.592 6/1/2032
Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014
Summit Midstream Partners SMLP 9.500 62.250 N/A
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Transworld Systems Inc TSIACQ 9.500 31.572 8/15/2021
Voyager Aviation
Holdings LLC / Voyager
Finance Co VAHLLC 9.000 45.500 8/15/2021
Voyager Aviation
Holdings LLC / Voyager
Finance Co VAHLLC 9.000 46.000 8/15/2021
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***