/raid1/www/Hosts/bankrupt/TCR_Public/210414.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, April 14, 2021, Vol. 25, No. 103
Headlines
2374 VILLAGE COMMON: Court Approves Disclosure Statement
AGF MACHINERY: Seeks to Extend Plan Exclusivity Thru May 10
ALPHA HOUSE: Seeks to Hire London Foster Realty as Realtor
AMBERSON NATURAL: Wants Plan Exclusivity Extended Until May 16
AMERICAN NATIONAL: Seeks to Hire Attorney Donald Wyatt as Counsel
ANGLIN CULTURED STONE: Wins Cash Collateral Access Thru May 11
AREU STUDIOS: Portnoy Represents BTCF LLC, Cape and Phelps
ARMATA LLC: Case Summary & 20 Largest Unsecured Creditors
ATLANTA LIFE: A.M. Best Withdraws C(Weak) Fin. Strength Rating
AUTOMOTORES GILDEMEISTER: Case Summary & 30 Unsecured Creditors
BEACON ROOFING: Moody's Upgrades CFR to B1 on Good Liquidity
BERRY PETROLEUM: Moody's Alters Outlook on B2 CFR to Stable
BLTN GROUP: Seeks to Hire Moore & Brooks as Bankruptcy Counsel
BOOTS SMITH: May 20 Plan Confirmation Hearing Set
BOY SCOUTS OF AMERICA: To File New Plan After Mediation Failed
BRAZOS ELECTRIC: Seeks Advisory Committee to Avert Conflicts
CALIFORNIA-NEVADA METHODIST: U.S. Trustee Forms Creditors Panel
CASTEX ENERGY: Plan Outline Milestone Extended to April 19
CEC ENTERTAINMENT: Moody's Rates New $600M Secured Notes 'Caa1'
COMFORT CARE: Seeks to Hire William E. Jamison as Legal Counsel
COMMSCOPE HOLDING: Planned Spin-Off No Impact on Moody's B1 CFR
CONCISE INC: June 2 Disclosure Statement Hearing Set
CONCORD INC: Seeks to Hire Wiggam & Geer as Bankruptcy Counsel
CORNUS MONTESSORI: Seeks to Hire JV Solutions as Accountant
COTO INVESTMENTS: Unsecureds to Get 100% in Sec. 1111(b) Election
CRESTWOOD EQUITY: S&P Affirms 'BB-' Long-Term ICR, Outlook Negative
CREW ENERGY: S&P Alters Outlook to Stable, Affirms 'CCC+' ICR
CROWN HOLDINGS: European Tinplate Deal No Impact on Moody's Ba2 CFR
DEARBORN REAL: Has Until July 1 to File Combined Plan & Disclosure
DEL MONTE: Moody's Hikes CFR to B3 on Strong Operating Performance
DEL MONTE: S&P Upgrades ICR to 'B-', Outlook Positive
DESTINATION HOPE: May 20 Plan & Disclosure Hearing Set
DIAMOND OFFSHORE: Second Amended Joint Plan Confirmed by Judge
DON RAMON'S: Seeks Approval to Hire Brunetti Rougeau as Counsel
DORCHESTER RESOURCES: Seeks to Tap Christensen Law Group as Counsel
DORCHESTER RESOURCES: Taps Dakil Auctioneers as Sales Agent
DORCHESTER RESOURCES: Taps Omni Agent Solutions as Claims Agent
DURRIDGE COMPANY: Wins Cash Collateral Access Thru May 2021
EASTERN NIAGARA: Plan Exclusivity Extended Thru June 3
ELEVATE TEXTILES: S&P Alters Outlook to Pos., Affirms 'CCC+' ICR
ELI & ALI: Hearing Today on Cash Collateral Access Bid
ENTERTAINMENT CINEMAS: Gets OK to Tap HLB as Management Consultant
EVERGREEN GARDENS: Gets OK to Hire Weil Gotshal as Legal Counsel
FIELDWOOD ENERGY: Davis Polk, Haynes 2nd Update on Secured Lenders
FIELDWOOD ENERGY: Fine-Tunes STL & Committee-Backed Plan
FIRST QUANTUM: S&P Ups ICR to 'B' on Deleveraging, Outlook Stable
FOGO DE CHAO: S&P Upgrades ICR to 'B-', Outlook Stable
GL BRANDS: Unsec. Creditors to Recover 1.25% in Merida Sale Plan
GREATER HOUSTON POOL: Taps Attorney Donald Wyatt as Legal Counsel
GREENSILL CAPITAL: U.S. Trustee Appoints New Committee Member
GREYLOCK CAPITAL: Court Dismisses Case After Creditors Deal
GVS PORTFOLIO I B: Another Nate Paul Entity in Chapter 11
GVS PORTFOLIO: Great Value Hits Chapter 11 to Avert Foreclosure
GVS PORTFOLIO: Voluntary Chapter 11 Case Summary
HANKEY O'ROURKE: May 24 Amended Plan Confirmation Hearing Set
HEARTLAND DENTAL: Moody's Raises CFR to B3 on Improved Liquidity
HERTZ CORP: Asks Court to Block Takeover Plan of Centerbridge
HERTZ CORP: First Lien Lender Want Interest at Default Rate
HERTZ CORP: Glenview, Other Shareholders Oppose Plan
HERTZ CORPORATION: Seeks Court Approval to Hire Stout Risius Ross
IMAGEFIRST HOLDINGS: Moody's Assigns First Time B3 CFR
JAMCO SERVICES: Plan Exclusivity Period Extended Thru May 24
JAZZ PHARMACEUTICALS: Fitch Assigns First-Time 'BB-' LongTerm IDR
JAZZ PHARMACEUTICALS: S&P Assigns Prelim BB- Rating on Secured Loan
JB HOLDINGS: Seeks Court Approval to Hire Realtors
JIM'S DISPOSAL: Wants Plan Exclusivity Extended Until June 9
JUSTICE OIL: Seeks to Hire Reed Smith as Bankruptcy Counsel
JVA OPERATING: Seeks to Tap Kelly Hart & Hallman as Counsel
JWB DESIGN: Seeks to Hire Blanchard Law as Legal Counsel
KIMBLE DEVELOPMENT: Seeks to Extend Plan Exclusivity Thru July 6
L C OF SHREVEPORT: Seeks to Hire Trent Millican as Accountant
LUMEN TECHNOLOGIES: Fitch Affirms 'BB' IDR, Outlook Stable
LUXURY OUTER: Bankruptcy Administrator Unable to Appoint Committee
MARZILLI MACHINE: Unsecured Creditors to Recover 25% in Plan
MED EQUITY: Seeks to Hire Fredman Lieberman Pearl as Counsel
MEN'S WEARHOUSE: Moody's Rates $25MM Add-on Priority Term Loan 'B3'
MERCY HOSPITAL: PCO Seeks to Hire Sugar Felsenthal as Legal Counsel
MITEL NETWORKS: S&P Downgrades ICR to 'CCC+', Outlook Negative
MONITRONICS INT'L: Moody's Alters Outlook on Caa1 CFR to Positive
MOUNT ETNA PARTNERS: Bank Seeks to Bar Use of Cash Collateral
MYSTIC WINE: Gets Interim OK to Hire Schatzman as Legal Counsel
NEWS CORP: $1BB Upsized Notes No Impact on Moody's Ba1 CFR
NINE POINT: Court Okays June 2021 Auction, $20 Million DIP Loan
NIR WEST: Wins Cash Collateral Access Thru June 30
NOMAD RETAIL: Seeks Approval to Hire Steven Dexter as Accountant
OCCASION BRANDS: Seeks Confirmation of Liquidating Plan
OGDENSBURG CITY: Moody's Hikes Outstanding GOLT Bonds From Ba1
OMEGA SPORTS: Seeks to Tap Moon Wright & Houston as Legal Counsel
ORBY TV: U.S. Trustee Appoints Creditors' Committee
OVINTIV INC: Moody's Affirms Ba1 CFR & Changes Outlook to Pos.
PALMCO HOMES: Has Until June 29 to File Plan & Disclosures
PALMCO HOMES: U.S. Trustee Unable to Appoint Committee
PAPER SOURCE: Committee Taps Hahn & Hessen as Lead Counsel
PAPER SOURCE: Committee Taps Hirschler Fleischer as Local Counsel
PAPER SOURCE: Committee Taps Province LLC as Financial Advisor
PARADOX ENTERPRISES: May 13 Plan & Disclosure Hearing Set
PATRICIAN HOTEL: Seeks to Tap Robert F. Reynolds as Legal Counsel
PDC WELLNESS: S&P Alters Outlook to Stable, Affirms 'B' ICR
PENINSULA PACIFIC: Moody's Affirms Caa1 CFR Amid Lago Acquisition
PIMA COUNTY IDA: Moody's Affirms B1 Rating on 2013Q Education Bonds
PLATINUM CORRAL: Hits Chapter 11 Bankruptcy Protection
POLYMER ADDITIVES: Moody's Hikes CFR to Caa1, Outlook Stable
PRO-PHARMA ADVISORY: Trustee Taps Greenspoon Marder as Counsel
PURDUE PHARMA: Disclosure Statement Hearing Adjourned to May 4
RAWHIDE RESOURCES: Seeks to Tap Reed Smith as Bankruptcy Counsel
ROMANS HOUSE: Says Pender's Plan Not Confirmable
RUBY PIPELINE: S&P Lowers ICR to 'CCC', Outlook Negative
RUSSELL INVESTMENTS: Moody's Alters Outlook on Ba2 CFR to Negative
SC SJ Holdings: Accor Management Appointed as New Committee Member
SCIENTIFIC GAMES: Moody's Affirms B3 CFR & Alters Outlook to Stable
SERENDIPITY LABS: To Seek Plan Confirmation on May 12
SHORE PROPERTY: Case Summary & 3 Unsecured Creditors
SIWF HOLDINGS: Moody's Hikes CFR to B2 on Strong Operating Profit
SKYFUEL INC: Plan of Reorganization Confirmed by Judge
STANFORD JONES: Seeks Court Approval to Tap Real Estate Agent
STONEWAY CAPITAL: Clearly Gottlieb Represents Noteholder Group
SUMMIT FAMILY: Casa Bonita Files for Chapter 11 Bankruptcy
TECT AEROSPACE: $22MM DIP Loan, Cash Collateral Use OK'd
THEOS FEDRO: Seeks to Tap Stuppi & Stuppi as Bankruptcy Counsel
UNITED AIRLINES: Begins $9-Bil. Debt Sale to Refinance Obligations
US CONSTRUCTION: May Use Cash Collateral Thru April 21
VAMCO SHEET: Seeks Court Approval to Hire Litigation Counsel
VERMILION ENERGY: S&P Affirms 'B' ICR, Outlook Stable
VIRGINIA-HIGHLAND: Unsecureds Owed $200K to Recover 100% in Plan
WASH MULTIFAMILY: Moody's Rates New First Lien Secured Notes 'B3'
WASHINGTON PRIME: Forbearance Extended to April 28, 2021
WC CUSTER CREEK: Seeks Authority to Use Cash Collateral
WEINSTEIN CO: Fights NY Extradition, Confirms LA Indictment
[] Subchapter V Debt-Eligibility Limit Extended Beyond One Year
*********
2374 VILLAGE COMMON: Court Approves Disclosure Statement
--------------------------------------------------------
Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the
Western District of Pennsylvania approved the Disclosure Statement
accompanying the Plan of Liquidation in the Chapter 11 case of 2374
Village Common Drive, LLC.
Judge Agresti also set these deadlines:
* April 16, 2021 - last day for (a) filing ballots either to
accept or reject the Plan, (b) filing claims not yet barred by law,
rule or by a Court order, and (c) filing and serving written
objections to the Plan confirmation.
* April 20, 2021 - deadline for Plan proponent to file a summary
of the balloting.
* April 22, 2021 - last day for filing a complaint objecting to
discharge, if applicable, pursuant to Federal Rules of Bankruptcy
Procedure 4004(a).
* April 22, 2021, at 10 a.m. - plan confirmation hearing by Zoom
Video Conference.
The parties must comply with Judge Agresti's Temporary Modified
Appearance Procedures which can be found at
http://www.pawb.uscourts.gov/sites/
default/files/pdfs/tpa-proc-appearances.pdf. For queries about the
connection, one may contact Courtney Helbling, Judge Agresti's
staff attorney, at 814-464-9781.
The Disclosure Statement, Plan, Plan Summary and a copy of the
Disclosure Statement Approval Order, and a ballot shall be mailed
to all creditors, equity security holders, and other parties in
interest, and shall be transmitted to the United States Trustee on
or before April 12, 2021.
A copy of the order is available for free at tinyurl.com/kr944f9x
from PacerMonitor.com.
About 2374 Village Common Drive
2374 Village Common Drive, LLC is a Pennsylvania limited liability
company, which operates its business at 2374 Village Common Drive,
Erie, Pa. It is a single asset real estate entity under 11 U.S.C
Sec. 101(51B). 2374 Village Common Drive owns the medical facility
where Tri-State Pain Institute, LLC and Greater Erie Surgery
Center, Inc. conduct business.
On March 5, 2021, 2374 Village Common Drive sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Penn. Case No.
21-10118). In the petition signed by Joseph Martin Thomas, M.D.,
sole member, the Debtor disclosed assets of between $1 million and
$10 million and liabilities of the same range. Judge Thomas P.
Agresti oversees the case. Michael P. Kruszewski, Esq. is the
Debtor's legal counsel.
AGF MACHINERY: Seeks to Extend Plan Exclusivity Thru May 10
-----------------------------------------------------------
AGF Machinery, LLC requests the U.S. Bankruptcy Court for the
Middle District of Alabama to extend the exclusive periods during
which the Debtor may file a plan of reorganization and disclosure
statement and to solicit acceptances through and including May 10,
2021, and July 12, 2021, respectively.
Cause exists to extend the plan and disclosure statement filing
deadline as well as the exclusive periods within which only the
Debtor may file and solicit acceptances of a plan. The Debtor is
continuing to negotiate plan treatment with creditors holding
significant claims. So, allowing the Debtor to finalize those
negotiations will result in fewer plan objections and streamline
the confirmation process.
The Debtor's Motion is not submitted for purposes of delay and the
Debtor submits that the relief requested in this motion will not
prejudice any party.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3s7HRBw from PacerMonitor.com.
About AGF Machinery
AGF Machinery, LLC -- https://agfmachinery.com/ -- is engaged in
selling and renting construction equipment, aerial work platforms &
heavy-duty equipment. The company offers a full line of
construction equipment in its sales and rental inventories from
Wacker Neuson, ASV, Skyjack, Toro, and Husqvarna.
AGF Machinery filed a Chapter 11 petition (Bankr. M.D. Ala. Case
No. 20-11029) on August 12, 2020. The petition was signed by
Jeffrey Lee Washington, a member. Debtor disclosed $10 million to
$50 million in both assets and liabilities at the time of the
filing.
Judge William R. Sawyer oversees the case.
The Debtor has tapped Stichter, Riedel, Blain & Postler, P.A. as
its bankruptcy counsel, and Saltmarsh, Cleaveland & Gund as its
financial advisor.
ALPHA HOUSE: Seeks to Hire London Foster Realty as Realtor
----------------------------------------------------------
The Alpha House, Inc. has filed anew an application to employ
London Foster Realty, a Miami Beach, Fla.-based real estate firm,
and its sales agent, Yolande Cortese.
Judge Robert Mark of the U.S. Bankruptcy Court for the Southern
District of Florida had previously denied the Debtor's initial
application to employ the firm and its sales agent, Matthieu
Mamoudi, on grounds that the sales agent is not a "disinterested
party."
The Debtor needs the assistance of a realtor to sell its real
property located at 6945 Abbott Ave., Miami Beach, Fla.
The realtor will receive a commission of 2 percent of the total
purchase price.
Ms. Cortese disclosed in a court filing that she is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Yolande Cortese
London Foster Realty
407 Lincoln Rd., Ste. 10G
Miami Beach, FL 33139
Office: (305) 514-0100
Cell: (786) 389-7080
Email: yolande.cortese@gmail.com
About The Alpha House Inc.
The Alpha House, Inc., owner of the M Boutique Hotel in Miami,
Fla., filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No.
21-12338) on March 11, 2021. Matthieu Mamoudi, president, signed
the petition. At the time of the filing, the Debtor had between $1
million and $10 million in both assets and liabilities.
Judge Robert A. Mark oversees the case.
The Debtor tapped Robert C. Meyer, PA to serve as its legal counsel
and Alvin Hagerich, an accountant practicing in Hudson, Fla.
AMBERSON NATURAL: Wants Plan Exclusivity Extended Until May 16
--------------------------------------------------------------
Debtor Amberson Natural Resources, LLC asks the U.S. Bankruptcy
Court for the Western District of Texas, San Antonio Division to
extend by 60 days the Debtor's exclusive period to file a Chapter
11 Plan and to solicit acceptances through and including May 16,
2021.
The hearing to consider confirmation of the Plan was held on March
3, 2021. At the Confirmation Hearing, the Court set a ruling on
confirmation for March 31, 2021, after the expiration of the
current exclusivity periods.
However, any party in interest may file a plan if the debtor's
proposed plan has not been accepted 180 days after the date the
order for relief was entered, which was the Petition Date, in this
case, resulting in a deadline for the Debtor to confirm a plan by
January 19, 2021.
Because the Court will not hold a hearing to approve the Disclosure
Statement and set a hearing to consider confirmation of the Plan
until January 20, 2021, the Debtor seeks an extension of its
180-day exclusivity period.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3a5etWk from PacerMonitor.com.
About Amberson Natural Resources
Amberson Natural Resources, LLC, a company based in San Antonio,
Texas, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No.
20-51302) on July 20, 2020. In the petition signed by Jon
Christian Amberson, manager, Debtor was estimated to have $1
million to $10 million in both assets and liabilities.
Judge Craig A. Gargotta oversees the case. Wick Phillips Gould &
Martin LLP serves as the Debtor's bankruptcy counsel and Davis &
Santos, P.C., as special counsel to the Debtor.
No trustee or committee has been appointed in the Case.
AMERICAN NATIONAL: Seeks to Hire Attorney Donald Wyatt as Counsel
-----------------------------------------------------------------
American National Carbide Co. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire
Attorney Donald Wyatt, PC as its legal counsel.
The Debtor requires legal assistance to fulfill its obligations
under U.S. bankruptcy laws and to avail itself of the rights and
remedies available to a debtor-in-possession, including the
formulation and confirmation of a Chapter 11 plan of reorganization
and the prosecution or defense of adversary proceedings.
The firm's standard rates range from $100 per hour for paralegals
and law clerks to $600 per hour for highly experienced shareholder
attorney.
The firm received a retainer in the amount of $20,000.
Attorney Donald Wyatt is a disinterested person within the
definition of Section 101 (14) of the Bankruptcy Code, according to
court papers filed by the firm.
The firm can be reached through:
Donald Wyatt, Esq.
Attorney Donald Wyatt PC
26418 Oak Ridge Drive
The Woodlands, TX 77380
Tel: (281) 419-8733
Email: don.wyatt@wyattpc.com
About American National Carbide
American National Carbide Co. -- http://anconline.com-- is a
vertically integrated manufacturer of cemented tungsten carbide
products for a wide range of industries, including metalworking,
oil and gas, and wood processing, as well as zinc reclaim powders
and ready-to-press grade powders.
American National Carbide filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No.
21-31050) on March 26, 2021. Greg Stroud, president, signed the
petition. At the time of the filing, the Debtor disclosed
$1,492,225 in assets and $3,969,983 in liabilities. Attorney
Donald Wyatt PC represents the Debtor as legal counsel.
ANGLIN CULTURED STONE: Wins Cash Collateral Access Thru May 11
--------------------------------------------------------------
Judge John T. Dorsey of the U.S. Bankruptcy Court for the District
of Delaware authorized Anglin Cultured Stone Products, LLC to use
cash collateral from April 6, 2021 to May 11, 2021.
Newtek Small Business Finance, LLC holds a claim against the Debtor
pursuant to these instruments:
(a) A Note dated June 30, 2015, in the original principal
amount of $1,127,000 from the Debtor to Newtek (Loan no. 79721).
The outstanding principal balance of Loan no. 79721 is
$773,324.82.
(b) A Note dated December 27, 2017, in the original principal
amount of $2,575,000 from the Debtor to Newtek (Loan no. 127073).
The outstanding principal balance of Loan no. 127073 is
$2,521,847.56.
(c) A Note dated September 26, 2018, in the original principal
amount of $400,000 from the Debtor to Newtek (Loan no. 166316). The
outstanding principal balance of Loan no. 166316 is $382,051.
(d) A Note dated December 12, 2018, in the original principal
amount of $250,000 from the Debtor to Newtek (Loan no. 185979). The
outstanding principal balance of Loan no. 185979 is $243,336.80,
and interest, late charges and attorneys' fees have accrued and
continue to accrue under the loans.
Newtek asserted that, to secure the Debtor's obligations under the
Notes, the Debtor granted Newtek a security interest in all assets
of the estate pursuant to one or more Security Agreements executed
by the Debtor in favor of Newtek.
The Debtor agreed to grant Newtek, as security for the Debtor's use
of Newtek's cash collateral and only up to the amount of the cash
collateral used:
(a) a first priority post-petition security interest and lien
in and to any and all cash, accounts receivable, contract rights,
general intangibles, and instruments of the Debtor, and all cash
and non-cash proceeds thereof, which are or have been acquired,
generated or received by the Debtor subsequent to the filing of the
Debtor's bankruptcy petition;
(b) a first priority post-petition security interest and lien
in and to any and all bank accounts of the Debtor, and all funds
now and hereafter on deposit therein, whether or not said bank
accounts are located at Newtek and including, but not limited to,
the Debtor-In-Possession accounts; and
(c) a post-petition security interest in inventory and
equipment of the Debtor of the same priority and to the same extent
which Newtek enjoyed as of the petition date.
To the extent the cash collateral in which Newtek held a duly
perfected security interest as of February 8, 2021, has been
diminished as a result of the Debtor's use of such cash collateral,
Newtek was granted an administrative claim against the Debtor and
Debtor-In-Possession having priority over any and all
administrative expenses of any kind specified in the Bankruptcy
Code, except U.S. Trustee's fees and court costs and the fees and
expenses of the Subchapter V Trustee as approved by the Bankruptcy
Court.
The events constitute Events of Default:
a) The Debtor fails to make a payment to Newtek of $5,000
prior to May 11, 2021;
b) The Debtor does anything prohibited hereunder, or fails to
do anything required on a timely basis;
c) The Debtor provides Newtek with any information and/or
documentation that is not true, accurate and complete to the best
of the Debtor's knowledge, information and belief;
d) The case is converted to a case under Chapter 7 of the
Code, and/or if a Trustee is appointed in this case under Section
1104(a)(1);
e) The failure of the Debtor to comply with and/or to perform
under any other terms and/or conditions set forth in the
Agreement;
f) The Debtor fails to make any deposit of any tax required to
be deposited to any taxing authority;
g) The Debtor fails to timely file any tax return required to
be filed with any taxing authority;
h) The Debtor fails to maintain its cash and accounts
receivable under 90 days at the same level and in at least the same
amount as such assets existed as of the petition date;
i) The Debtor makes any payment to any person or entity other
than as authorized in the Budget; and
j) Any party in interest files a Newtek Contest.
A full-text copy of the Third Interim Agreement Authorizing Use of
Cash Collateral is available for free at https://bit.ly/3t0XLik
from PacerMonitor.com.
About Anglin Cultured Stone Products, LLC
Anglin Cultured Stone Products, LLC sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 21-10389)
on February 8, 2021. In the petition signed by Stuart L. Anglin,
sole member and manager, the Debtor disclosed up to $500,000 in
assets and up to $10 million in liabilities.
Charles J. Brown, III, Esq., at GELLERT SCALI BUSENKELL & BROWN,
LLC, represents the Debtor as counsel.
Newtek Small Business Finance, LLC, as lender, is represented by
Ronald J. Drescher, Esq., at DRESCHER & ASSOCIATES, P.A.
AREU STUDIOS: Portnoy Represents BTCF LLC, Cape and Phelps
----------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Portnoy Garner & Nail LLC submitted a verified
statement to disclose that it is representing Behind the Curtain
Funding LLC Eric Cape and Mike Phelps in the Chapter 11 cases of
Areu Studios, LLC.
On March 29, 2021, Nail was formally retained to represent Behind
the Curtain Funding LLC with respect to the Chapter 11 Case.
On March 31, 2021, Nail was formally retained to represent Eric
Cape and Mike Phelps with respect to the Chapter 11 Case.
BTCF LLC is an equity holder of Debtor.
Nail represents only BTCF LLC and Cape and Phelps in the Chapter 11
Case.
As of April 7, 2021, each Clients and their disclosable economic
interests are:
Behind the Curtain Funding LLC
4051 Saint Andrews Sq
Duluth, Georgia, 30096
* Holder of 5% of the equity interests in Debtor
Eric Cape and Mike Phelps
390 Brogdon Road Suwanee
Georgia 30024
* Each is an unsecured creditor with a claim in the amount of
$110,000
Counsel for Behind the Curtain Funding LLC Eric Cape and Mike
Phelps can be reached at:
Garrett A. Nail, Esq.
Portnoy, Garner & Nail LLC
3350 Riverwood Parkway Suite 460
Atlanta, GA 30339
Tel: 404-688-8800
E-mail: gnail@pgnlaw.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3dWfnpa
About Areu Studios
Areu Studios, LLC, which owns and operates a movie studio in
Atlanta, Ga., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ga. Case No. 20-71228) on Oct. 29, 2020. The
petition was signed by Ozzie Areu, the company's manager. At the
time of the filing, the Debtor had estimated assets of less than
$50,000 and liabilities of between $1 million and $10 million.
Judge Paul Baisier oversees the case.
Jones & Walden, LLC is the Debtor's legal counsel.
ARMATA LLC: Case Summary & 20 Largest Unsecured Creditors
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Debtor: Amata, LLC
77 W. Wacker Drive, Suite 4500
Chicago, IL 60601
Business Description: Amata, LLC is engaged in activities related
to real estate.
Chapter 11 Petition Date: April 12, 2021
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 21-04801
Judge: Hon. Jack B. Schmetterer
Debtor's Counsel: Nicholas M. Miller, Esq.
MCDONALD HOPKINS LLC
300 N. LaSalle Dr #1400
Chicago, IL 60654
Tel: (312) 642-6938
E-mail: nmiller@mcdonaldhopkins.com
Total Assets as of April 11, 2021: $6,206,766
Total Liabilities as of April 11, 2021: $8,800,360
The petition was signed by Ronald C. Bockstahler, CEO.
A full-text 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/BXN2GNY/Amata_LLC__ilnbke-21-04801__0001.0.pdf?mcid=tGE4TAMA
ATLANTA LIFE: A.M. Best Withdraws C(Weak) Fin. Strength Rating
--------------------------------------------------------------
AM Best has downgraded the Financial Strength Rating (FSR) to C
(Weak) from C+ (Marginal) and the Long-Term Issuer Credit Rating
(Long-Term ICR) to "ccc+" from "b-" of Atlanta Life Insurance
Company (ALIC) (Atlanta, GA). The outlook of the FSR has been
revised to stable from negative while the outlook of the Long-Term
ICR is negative. Concurrently, AM Best has withdrawn these Credit
Ratings (ratings) as the company has requested to no longer
participate in AM Best's interactive rating process.
The ratings reflect ALIC's balance sheet strength, which AM Best
assesses as weak, as well as its weak operating performance, very
limited business profile and weak enterprise risk management
(ERM).
The rating downgrades reflect significant declines in ALIC's
capital driven by a trend of worsening operating losses beginning
in 2017. Despite a onetime favorable benefit due to a $4 million
capital contribution from the parent in 2019, ALIC continues to see
substantial declines in both capital and operating performance
metrics through the 3rd quarter of 2020. If the company continues
to experience operating losses at a similar rate without a capital
infusion in the near term, AM Best expects that regulatory action
may be necessary within the next 12 months. The company is pursuing
capital investment from strategic investor parties to fund
operations and the company's growth initiatives. Further
complicating the company's operations is the removal of the CEO and
the replacement of the company's former actuarial consultant with a
new appointed actuary, Willis Towers Watson, which still needs to
complete its actuarial review. AM Best notes that there has been an
ongoing trend of weak ERM practices, which have been a contributing
rating factor.
Despite these numerous challenges, the company continues to
maintain a risk-adjusted capital position above regulatory action
levels. AM Best further notes that commencing in the fourth quarter
of 2020, ALIC has executed group life reinsurance treaties with
several major insurance carriers on behalf of approximately 20
major corporate, government and association clients; the
substantial majority of the company's associated risk has been
retroceded to its retrocession partners. As such, ALIC has grown
net premium for the first time in several years in 2020 and this
continued in the first quarter of 2021.
AUTOMOTORES GILDEMEISTER: Case Summary & 30 Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Automotores Gildemeister SpA
Avenida Las Condes 11.000
Borough of Las Condes,
Metropolitan Region
Santiago, Chile
Business Description: The Debtors are vehicle importers and
distributors primarily operating in Chile
and Peru, as well as in Uruguay, Costa Rica
and Brazil. The Debtors consist of a
network of 228 vehicle dealerships, of which
70 are operated by them and 158 are
independent franchises appointed and
supplied by the Debtors.
Chapter 11 Petition Date: April 12, 2021
Court: United States Bankruptcy Court
Southern District of New York
Thirteen affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Automotores Gildemeister SpA (Lead Debtor) 21-10685
Marc Leasing S.A. 21-10686
Carmeister S.A. 21-10687
Comercial Gildemeister S.A. 21-10688
AG Creditos SpA 21-10689
Maquinarias Gildemeister S.A. 21-10690
Fonedar S.A. 21-10691
Fortaleza S.A. 21-10692
Lodinem S.A. 21-10693
Camur S.A. 21-10694
RTC S.A. 21-10695
Maquinaria Nacional S.A. 21-10696
Bramont Montadora Industrial e
Comercial de Veiculos S.A. 21-10697
Judge: Hon. Lisa G Beckerman
Debtors' Counsel: Jane VanLare, Esq.
Adam Brenneman, Esq.
CLEARY GOTTLIEB STEEN & HAMILTON LLP
One Liberty Plaza
New York, New York 10006
Tel: (212) 225-2000
Fax: (212) 225-3999
E-mail: jvanlare@cgsh.com
abrenneman@cgsh.com
Debtors'
Claims
Agent: PRIME CLERK LLC
https://cases.primeclerk.com/gildemeister
Estimated Assets: $500 million to $1 billion
Estimated Liabilities: $500 million to $1 billion
The petitions were signed by Eduardo Moyano, chief financial
officer.
A copy of Automotores Gildemeister's petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/JX4H7JA/Automotores_Gildemeister_SpA__nysbke-21-10685__0001.0.pdf?mcid=tGE4TAMA
Consolidate List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. 7.50% Senior Secured Notes Deficiency Claim $111,796,081
Due 2025
Attn: Pete Lopez
Bank of New York Mellon
240 Greenwich Street, 7E
New York, NY 10286
Email: peter.lopez@bnymellon.com
2. 8.250% Senior Unsecured Notes $23,205,372
Unsecured Notes Due 2021
Attn: Pete Lopez
Bank of New York Mellon
240 Greenwich Street, 7E
New York, NY 10286
Email: peter.lopez@bnymellon.com
3. 7.50% Senior Unsecured Notes Unsecured Notes $9,858,105
Due 2021
Attn: Pete Lopez
Bank of New York Mellon
240 Greenwich Street, 7E
New York, NY 10286
Email: peter.lopez@bnymellon.com
4. 6.750% Senior Unsecured Notes $2,664,771
Unsecured Notes Due 2023
Attn: Pete Lopez
Bank of New York Mellon
240 Greenwich Street, 7E
New York, NY 10286
Email: peter.lopez@bnymellon.com
5. Hyundai Corporation Inventory Financing $2,510,626
Attn: Junghyun Cho
Avenida Nueva De Lyon 096
Providencia, Santiago
Chile
Tel: +56 2 2233 7304
Email: john@hyundaicorp.com
6. China National Heavy Duty Inventory $1,936,288
Truck Corp. Financing
SH 14F, Sinotruck Tower
No 777 Hua'Ao Road, Innovation
Zone
Jinan, Shandong
China
Email: yujianliang@sinotruck.com
7. Guillermo Reyes Rozas Contingent $1,185,016
Bilbao 738, Casa H34 Litigation
Calama, Chile
8. Finance Department of Contingent $1,037,631
Belo Horizonte Litigation
Rodovia Papa Joao Paulo II, 4.001
Cidade Administrative – General
Building 6th and 7th Floor
Bairro Serra Verde-Belo
Horizonte, MG
Brazil
Tel: (31) 3915-6270
9. Seguros Generales Trade Debt $633,257
Suramericana S.A.
Av. Libertador Bernardo
O'Higgins 1449
Santiago, Chile
Email: manuel.zapata@segurossura.cl
10. Volvo Car Corporation Inventory $382,333
SE-105 31 Financing
Gotemburgo
Sweden
11. Top Town Comercio Contingent $325,156
De Veiculos Ltda. Litigation
Avenida Senador Lemos,
3330(PA)
Belem, Brazil
Tel: (91) 98145-0195
12. Carlos Alfaro Contingent $297,245
Arriagada Edmundo Litigation
Perez Zujovic 10.890
Dep. 71
Antofagasta, Chile
13. Asesoria Y Gestion De Trade Debt $240,557
Procesos S.A.
Attn: Miguel Claro
Torre A. 70 A44
Providencia, Chile
Email: rmoreno@agpsa.cl
14. Yutong Hongkong Inventory $204,000
Bus Co Limited Financing
Attn: Raimundo Zhang
Unit 503 5/F Silver Cord
Tower 2
30 Canton Road
Tsim Sha Tsui KL
Hong Kong
Email: zhangkangb@yutong.com
15. THM Comercio E Servico De Contingent $176,704
Automoveis Ltda. Litigation
Avenida Almirante
Alexandrino De
Al, 951 Natal (RN)
Sao Paolo, Brazil
Tel: (84) 3243-2326
Email: helderlane@hotmail.com
16. Consuelo Alvarez Arcos Contingent $172,985
Av. Los Carrera 419 Litigation
El Monte
Chile
17. Curifor S.A. Trade Debt $153,350
Av. Vicuna Mackenna 5951
Santiago La Florida,
Region Metropolitana
Chile
Email: acalderon@curifor.com
18. Bharat Comercial Contingent $132,628
Servicos E Litigation
Veiculos Ltda.
Estrada Br-101 Norte
Contorno
w/o Num. KM 291
Cariacica 22184
Spain
Tel: (27) 3346-2783
Fax: (27) 3346-2790
19. Arena Chile S.A. Trade Debt $128,603
Almirante Pastene #333
Piso 2
Providencia, Chile
Email: elisa.alcaino@havasmg.com
20. DHL Worldwide Express Chile Trade Debt $115,435
Limitada
Rio Itata 9651 Santiago
Pudahuel Region Metropolitana
De Santiago
Chile
Email: carolina.m.rodeigues@dhl.com
21. Sobre Ruedas Comercio De Contingent $111,670
Veiculos E Pecas Ltda. Litigation
Rua Francisco Marques
Fonseca, 621
Bayeux, PB 58308-001
Brazil
Tel: (83) 98787-8173
22. Agencia De Aduanas Trade Debt $96,918
Felipe Serrano
Solar Y Compania Limitada
Dr. Manuel Barros Borgono 225
Santiago Providencia Region
Metropolitana De Santiago
Chile
Email: fserranom@fss.cl
23. Amorin Abogados SAS Professional $86,436
Of. 705 Punta Carretas Tower Services
Peatonal Continuacion, DR
Bolivar Balinas
Montevideo 11300
Uruguay
Email: info@amorin.uy
24. Transportes Contingent $84,317
Litigation
25. Transportes Transauto Ltda. Trade Debt $82,148
Ruta 68 KM 16,5
Santiago, Chile
Email: rchavez@transauto.cl
26. Giser S.A. Trade Debt $75,904
Roger De Flor 2736 81
Santiago
Las Condes Region
Metropolitana De Santiago
Chile
Email: zcartagena@giser.cl
27. Roxana Diaz Arce Contingent $69,453
Condominio Sta. Teresa Litigation
Parcela 35
Isla De Maipo
Chile
28. World Car Veiculos Contingent $63,624
Ltda. Litigation
Avenida Vereador Reynaldo
Figueiro Bastos 4
Pocos De Calda, MG
Brazil
29. Cargo Trader Limitada Trade Debt $61,927
Santa Rosa 282
Santiago, Chile
Email: trafico@pdq.cl
30. Citytime Import Trade Debt $61,879
Export Limitad
Zofriautos Primer Nivel 3
Depto Local Villa POB
Pabellon AU
Iquique, Chile
Email: dgrinspun@citytime.cl
BEACON ROOFING: Moody's Upgrades CFR to B1 on Good Liquidity
------------------------------------------------------------
Moody's Investors Service upgraded Beacon Roofing Supply's
Corporate Family Rating to B1 from B2 and Probability of Default
Rating to B1-PD from B2-PD. Moody's also upgraded the ratings on
Beacon's senior secured debt to Ba3 from B2 and its senior
unsecured notes to B3 from Caa1. The outlook is changed to positive
from negative. In addition, Moody's upgraded the company's
speculative grade liquidity rating to SGL-1 from SGL-2.
The upgrade of Beacon's CFR to B1 from B2 and the change in outlook
to positive from negative reflects Moody's expectation that Beacon
will benefit from end market dynamics that support growth and will
improve operating performance. Additionally, Moody's believes the
company will use proceeds from the sale of its interior business to
reduce debt. These factors and a more conservative financial
policy, including maintaining adjusted debt-to-LTM EBITDA below
4.0x over the next two years, support these rating actions.
Beacon completed the sale of its interior products and insulation
businesses (approximately $1.2 billion in revenue) to Foundation
Building Materials, Inc. (B2 stable) on February 10, 2021.
The upgrade in Beacon's speculative liquidity rating to SGL-1 from
SGL-2 reflects Moody's expectation that Beacon will generate
consistent free cash flow in excess of $300 million in each of the
next two fiscal years ending September 30. Significant cash on
hand, ample revolver availability and no near-term maturities
contribute to Beacon's very good liquidity.
"Beacon's upgrade and positive outlook are driven by Moody's
expectation that Beacon will follow conservative financial
policies," according to Peter Doyle, a Moody's VP-Senior analyst.
"The likely use of proceeds from an asset sale for debt reduction
is the main reason for expected improvement in credit metrics that
support higher ratings,"
The following ratings are affected by the action:
Upgrades:
Issuer: Beacon Roofing Supply, Inc.
Corporate Family Rating, Upgraded to B1 from B2
Probability of Default Rating, Upgraded to B1-PD from B2-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Senior Secured Term Loan B, Upgraded to Ba3 (LGD3) from B2 (LGD3)
Senior Secured Global Notes, Upgraded to Ba3 (LGD3) from B2
(LGD3)
Gtd. Senior Global Notes, Upgraded to B3 (LGD5) from Caa1 (LGD5)
Outlook Actions:
Issuer: Beacon Roofing Supply, Inc.
Outlook, Changed To Positive From Negative
RATINGS RATIONALE
Beacon's B1 CFR reflects Moody's expectation that the company will
benefit from ongoing demand for residential roofing repair, the
main driver of Beacon's revenue. Moody's projects that Beacon will
maintain good credit metrics, including interest coverage, measured
as EBITA-to-interest expense, that will approximate 3.6x by
September 30, 2022, (fiscal year-end 2022). Moody's also forecasts
good operating performance with adjusted EBITDA (Moody's
calculation) margin sustained in the range of 9.0% - 9.5%. However,
Beacon faces strong competition in all of its markets from other
roofing distributors and its product mix is reliant on
commodity-like products. These factors make it difficult for Beacon
to expand margins beyond Moody's projected range and to
significantly grow market share.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade:
Debt-to-LTM EBITDA is maintained below 4.5x
Extend maturity of revolving credit facility
All net proceeds from asset sale used for debt reduction
Maintenance of conservative financial policies
Factors that could lead to a downgrade:
Debt-to-LTM EBITDA is sustained above 5.0x
The company's liquidity deteriorates
Aggressive acquisition or shareholder return activity
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
Beacon Roofing Supply, Inc., headquartered in Herndon, Virginia, is
one of the largest wholesale distributors of roofing material and
other building products in the US. CD&R, through its affiliates,
controls about 30% of the company's total voting rights.
BERRY PETROLEUM: Moody's Alters Outlook on B2 CFR to Stable
-----------------------------------------------------------
Moody's Investors Service changed Berry Petroleum Company, LLC's
outlook to stable from negative. At the same time, Moody's affirmed
Berry's B2 Corporate Family Rating, B2-PD Probability of Default
Rating and the B3 rating on its unsecured notes. Moody's also
assigned a Speculative Grade Liquidity rating of SGL-2 to Berry.
Assignments:
Issuer: Berry Petroleum Company, LLC
Speculative Grade Liquidity Rating, Assigned SGL-2
Affirmations:
Issuer: Berry Petroleum Company, LLC
Probability of Default Rating, Affirmed B2-PD
Corporate Family Rating, Affirmed B2
Senior Unsecured Notes, Affirmed B3 (LGD4) from (LGD5)
Outlook Actions:
Issuer: Berry Petroleum Company, LLC
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Berry's B2 CFR reflects its modest size, limited asset
diversification, and relatively high cost production using thermal
oil recovery. The company benefits from low absolute debt levels
and moderate leverage, and a steady production profile in its
low-decline oil assets in California's San Joaquin Basin. In
response to the severe drop in oil prices in early 2020 brought on
by the Covid-19 pandemic Berry suspended its dividend and cut
capital spending sharply. The company has reinstated its dividend
and has guided to a 2021 capital budget that will result in
outspending cash flow under Moody's assumed 2021 oil price of
$50/barrel for Brent, though the company has significant cash
balances from which to fund any outspending. Berry's credit profile
is supported by management's conservative financial policies,
underpinned by the company's long-term, through the cycle
debt/EBITDA target of between 1.0x and 2.0x.
The $400 million senior unsecured notes due 2026 are rated B3, one
notch below the B2 CFR, reflecting the notes' more junior priority
of claim on assets relative to borrowings under the secured
revolving credit facility.
Moody's expects Berry will maintain good liquidity through
mid-2022, as indicated by its SGL-2 rating. Liquidity is supported
by the company's undrawn revolving credit facility, which has a
borrowing base of $200 million. Berry was able to build cash in
2020 due to its limited spending and suspension of its dividend and
at December 31, 2020 had $80 million of cash on its balance sheet.
Based on its guidance for capital spending, the resumption of its
dividend (albeit at a lower level than before it was suspended) and
applying Moody's assumed 2021 Brent price of $50/bbl, Berry is
likely to outspend cash flow. However, outspending will be well
within the amount of cash held on its balance sheet.
The revolving credit facility expires in July 2022 and has two
maintenance financial covenants -- a maximum leverage ratio of 4.0x
and minimum current ratio of 1.0x. Moody's expect Berry to remain
well within the stated covenant limits into early 2021. The
company's next debt maturity is on its senior unsecured notes in
2026.
The stable outlook reflects Moody's expectation that Berry will
continue to maintain a balanced approach to returning cash to
shareholders and leverage and return to free cash flow generation
in 2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company can grow production to in
excess of 40 Mboe/d while maintaining strong financial metrics.
Ratings could be downgraded if RCF/debt falls below 15%, capital
efficiency deteriorates, or the company begins purchasing its
unsecured notes at deeply discounted prices.
Berry Petroleum Company, LLC, based in Dallas, Texas and a
wholly-owned subsidiary of Berry Corporation (NASDAQ: BRY), is an
independent oil and gas exploration and production company with its
primary operations focused in California's San Joaquin Basin.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
BLTN GROUP: Seeks to Hire Moore & Brooks as Bankruptcy Counsel
--------------------------------------------------------------
The BLTN Group seeks approval from the U.S. Bankruptcy Court for
the Eastern District of Tennessee to employ Moore & Brooks as its
legal counsel.
Moore & Brooks will render these legal services:
(a) prepare and file bankruptcy statements and schedules;
(b) prepare and confirm a reorganization plan;
(c) negotiate with creditors regarding claims;
(d) appear in bankruptcy court; and
(e) perform all other legal services in the Debtor's Chapter
11 case.
The hourly rates of the firm's counsel and staff are as follows:
James R. Moore $300
Brenda G. Brooks $235
Paralegal $95
In addition, the firm will seek reimbursement for out-of-pocket
expenses.
Prior to the filing, the firm received $2,135 for legal fees from
the Debtor and held a retainer of $8,365.
James Moore, Esq., an attorney at Moore & Brooks, disclosed in a
court filing 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:
James R. Moore, Esq.
Moore & Brooks
6223 Highland Place Way, Suite 102
Knoxville, TN 37919
Phone: (865) 450-5455
Fax: (865) 622-8865
About BLTN Group
The BLTN Group filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tenn. Case No.
21-30559) on April 2, 2021. At the time of the filing, the Debtor
disclosed assets of between $1 million and $10 million and
liabilities of the same range. Moore & Brooks, led by James R.
Moore, Esq., serves as the Debtor's legal counsel.
BOOTS SMITH: May 20 Plan Confirmation Hearing Set
-------------------------------------------------
On Feb. 22, 2021, debtor Boots Smith Completion Services, LLC,
filed with the U.S. Bankruptcy Court for the Southern District of
Mississippi a Disclosure Statement under Chapter 11.
On April 8, 2021, Judge Katharine M. Samson approved the Disclosure
Statement and ordered that:
* May 13, 2021, is fixed as the last day for filing written
objections to confirmation of the Plan.
* May 17, 2021, is fixed as the last day for submitting
ballots of acceptance or rejection of the Plan with the attorney
for the Debtor.
* May 20, 2021, at 1:30 p.m., in the William M. Colmer Federal
Building, Courtroom 2, 701 Main Street, Hattiesburg, Mississippi is
the hearing on confirmation of the Plan.
A full-text copy of the order dated April 8, 2021, is available at
https://bit.ly/3mG0Y4m from PacerMonitor.com at no charge.
The Debtor's counsel:
W. Jarrett Little
William J. Little, Jr.
LENTZ & LITTLE, PA
2505 14th Street, Suite 500
Gulfport, Mississippi 39501
Tel: (228) 867-6050
About Boots Smith
Boots Smith Completion Services, LLC, is an oilfield service
company, helping oil and gas companies enhance production through a
variety of applications, including completion, workover, and
optimization.
Boots Smith sought Chapter 11 protection (Bankr. S.D. Miss. Case
No. 20-51081) on July 1, 2020. At the time of filing, the Debtor
was estimated to have up to $50,000 in assets and $10 million to
$50 million in liabilities. Judge Katherine M. Samson is the case
judge. William J. Little, Jr., Esq., at Lentz & Little, P.A., is
the Debtor's counsel and Horne, LLP as its accountant.
BOY SCOUTS OF AMERICA: To File New Plan After Mediation Failed
--------------------------------------------------------------
Randal Chase of the Associated Press reports that attorneys for the
Boy Scouts of America told a Delaware bankruptcy judge Monday that
they plan to file a new reorganization plan after gaining little
support for a previous proposal that has been roundly criticized by
attorneys for child sex abuse victims.
Jessica Lauria, an attorney for the BSA, told Judge Laurie Selber
Silverstein that an amended plan would be filed Tuesday "unless the
stars align" and the Boy Scouts reach a meaningful resolution with
one or more other parties Monday night.
Ms. Lauria said the new plan is designed to continue momentum from
a three-day mediation session that ended April 1 in Miami. She
acknowledged, however, that differences remain among attorneys
representing abuse victims, insurers and other parties.
"There are some issues that will have to be litigated in connection
with the plan," Lauria said.
The revised proposal will include a default plan, or "Plan A,"
similar to what the BSA proposed in March. It calls for a global
resolution of abuse claims that includes a "substantial
contribution" to a victims trust fund by the BSA's local councils
in return for a release from further liability. Local sponsoring
organizations of Boy Scout troops that contribute to the victims
trust also would be released from further liability under the
amended plan, which, like the previous plan, also would provide a
framework for settlements with BSA insurers.
Unlike the previous plan, however, the new plan will include an
estimation of the Boy Scouts' abuse liabilities, something that
attorneys for abuse victims have said is critical in determining
whether any reorganization plan adequately compensates victims.
"We've heard the parties loud and clear," Lauria said, referring to
court filings by victims' attorneys seeking an estimation
proceeding in federal district court in Delaware. The BSA, which
argues that the estimation process should be overseen by the
bankruptcy court, plans to object to those filings by Thursday's
deadline, Lauria said.
The Boy Scouts of America, based in Irving, Texas, sought
bankruptcy protection last February in an effort to halt hundreds
of lawsuits and create a compensation fund for men who were
molested as youngsters decades ago by scoutmasters or other
leaders.
Attorneys for abuse victims made clear from the onset that they
would go after campsites and other properties and assets owned by
local councils to contribute to a settlement fund. The local
councils, which run day-to-day operations for local troops, are not
debtors in the bankruptcy and are considered by the Boy Scouts to
be legally separate entities, even though they share insurance
policies and are considered "related parties" in the bankruptcy
case.
The bankruptcy case has been bogged down by disputes over the
provision of information by local councils about their financial
assets, claims by the BSA that hundreds of millions of dollars
worth of its own assets are restricted and unavailable to abuse
victims, and concerns by BSA insurers that attorneys for abuse
victims have submitted tens of thousands of claims without ensuring
their validity.
The BSA's previous plan proposed a $300 million contribution by
local councils to a victims trust, about $115 million in cash and
noninsurance assets from the BSA, and the assignment of BSA and
local council insurance policies. In return, the 253 local councils
and thousands of sponsoring organizations would be released from
further liability.
The official tort claimants committee, or TCC, which is charged
with acting as a fiduciary for all abuse victims in bankruptcy, has
estimated the value of the roughly 84,000 sexual abuse claims at
about $103 billion, describing those estimates were "extremely
conservative."
Richard Mason, an attorney for an ad hoc committee representing
local Boy Scouts councils, said Monday that if the case proceeds to
finalizing financial contributions from local councils, the
committee needs to be "much more involved than what we recently
have been asked to be."
Mason also said that, while the councils are willing to contribute
cash, property and insurance rights to a victims trust, "the amount
and other terms, in our view, need to be realistic."
Meanwhile, in the event that "Plan A" fails to win support from
abuse victims, the BSA is also proposing a "Plan B" that would not
involve contributions from, or liability releases for, local
councils and sponsoring organizations. Lauria said such a plan
would be "suboptimal" and would complicate any insurance
settlements, given that BSA and its local councils have shared
policies.
She noted that the BSA-only plan is similar to what has been
proposed by the tort claimants committee. The committee has called
for a plan that allows BSA to emerge from bankruptcy and continue
its operations while leaving liability releases for local councils
and sponsoring organizations to be negotiated later by the
committee or the settlement trust, "but not for the relatively
paltry sum offered by the local councils."
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
BRAZOS ELECTRIC: Seeks Advisory Committee to Avert Conflicts
------------------------------------------------------------
Law360 reports that bankrupt Texas power provider Brazos Electric
is seeking the appointment of a special advisory committee, telling
a judge Friday, April 9, 2021, that its unique governance and
ownership structure could create potential conflicts in its Chapter
11 case.
In its motion, Brazos said that because it is a member-owned
cooperative where its 16 members appoint the board of directors,
and because those same 16 members are creditors of the bankruptcy
estate, conflicts are likely to arise. "While no conflict has yet
to arise and the debtor and board are functioning smoothly as they
did pre-petition, the debtor has proposed the formation of the
Advisory Council."
About Brazos Electric
Brazos Electric Power Cooperative Inc. is a 3,994-megawatt
transmission and generation cooperative which members' service
territory covers 68 counties from the Texas Panhandle to Houston.
It was organized in 1941 and the first cooperative formed in the
Lone Star state with the primary intent of generating and supplying
electrical power. At present, Brazos Electric is the largest
generation and transmission cooperative in the state and is the
wholesale power supplier for its 16 member-owner distribution
cooperatives and one municipal system.
Brazos Electric filed a voluntary petition for relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-30725)
on March 1, 2021. At the time of the filing, the Debtor disclosed
assets of between $1 billion and $10 billion and liabilities of the
same range.
Judge David R. Jones oversees the case.
Brazos Electric hired Norton Rose Fulbright and Dallas partner
Louis Strubeck, to lead its restructuring effort. Lawyers say that
Foley & Lardner LLP bankruptcy partner Holland O'Neil is also
advising Brazos Electric. Stretto is the claims and noticing
agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtor's case on March 15, 2021. The
committee is represented by the law firms of Porter Hedges, LLP and
Kramer, Levin, Naftalis & Frankel, LLP.
CALIFORNIA-NEVADA METHODIST: U.S. Trustee Forms Creditors Panel
---------------------------------------------------------------
The U.S. Trustee for Region 17 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of
California-Nevada Methodist Homes.
The committee members are:
1. Jeffrey Rhodenbaugh
Successor Trustee of the Rhodenbaugh Family Trust
Counsel: Mark Hirsch
New Tech Law Group
40815 Grimmer Blvd.
Fremont, CA 94538
Phone: (510) 659-8884
E-mail: mark@ntlg.us
2. Suzanne M. Kaufmann
3. Martin Overstreet
4. Edward M. Keech
5. Astrid E. Anderson
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About California-Nevada Methodist Homes
California-Nevada Methodist Homes -- http://www.cnmh.org/-- is a
California non-profit public benefit corporation that operates
nursing homes and long-term care facilities. It presently operates
two continuing care retirement communities, one known as Lake Park,
in Oakland Calif., and the other, known as Forest Hill, in Pacific
Grove, Calif.
On March 16, 2021, California-Nevada Methodist Homes filed a
Chapter 11 petition (Bankr. N.D. Calif. Case No. 21-40363). The
Debtor estimated assets of $10 million to $50 million and
liabilities of $50 million to $100 million.
The Hon. Charles Novack is the case judge.
Hanson Bridgett LLP, led by Neal L. Wolf, Esq., and Silverman
Consulting are the Debtor's legal counsel and financial advisor,
respectively. Stretto LLC is the claims agent.
CASTEX ENERGY: Plan Outline Milestone Extended to April 19
----------------------------------------------------------
Judge Marvin Isgur granted a motion by Castex Energy 2005 Holdco,
LLC, et al., to (i) continue the Disclosure Statement hearing
scheduled for April 12 to April 16 at 10:15 a.m., and (ii) extend
the Disclosure Statement Milestone in the Cash Collateral Order to
April 19.
Pursuant to the Order Setting Hearing on Disclosure Statement,
objections to the Disclosure Statement were required to be filed no
later than 12:00 p.m. on April 9, 2021. The Debtors received
multiple formal objections to the Disclosure Statement and several
informal comments. The Debtors are currently working to address the
issues raised in the objections but require additional time before
proceeding with the Disclosure Statement Hearing. Capital One,
National Association, individually as a Secured Lender, as L/C
Issuer and as administrative agent for the Secured Lender, has
agreed to extend the Disclosure Statement Milestone from April 12,
2021 to April 19, 2021.
The Official Committee of Unsecured Creditors has indicated it does
not oppose the extension.
The one-week extension will allow the Debtors to make modifications
to the Disclosure Statement and address the objections to the
Disclosure Statement that have been filed by various parties to the
extent possible. While approval of the Disclosure Statement is
only on a conditional basis, the Debtors, with the support of the
Prepetition Lenders, believe addressing the outstanding objections
to the Disclosure Statement will help streamline the solicitation
process and ultimately aid in the confirmation of the Debtors'
Joint Chapter 11 Plan.
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 on Feb.
26, 2021 (Bankr. S.D. Tex. 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 their bankruptcy counsel, The
Claro Group, LLC, as their financial advisor, and Thompson & Knight
LLP as special counsel and conflicts counsel. Donlin, Recano &
Company, Inc., is the notice, claims and balloting agent.
CEC ENTERTAINMENT: Moody's Rates New $600M Secured Notes 'Caa1'
---------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to CEC
Entertainment, LLC's proposed $600 million senior secured notes
offering due April 2026. In addition, Moody's affirmed CEC's Caa1
corporate family rating and downgraded the probability of default
rating to Caa1-PD from B3-PD. The B2 rating on the first lien term
loan and Caa2 rating on the second lien term loan remain unchanged
and will be withdrawn at the close of the refinancing. The outlook
is negative.
Proceeds from the $600 million secured notes offering will be used
to repay CEC's $200 million 1st lien term loan and $175 million 2nd
lien term loan as well as add an additional $86 million of cash to
the balance sheet. The ratings on the existing 1st and 2nd lien
term loans will be withdrawn upon close of the transaction and
repayment of these bank facilities.
The Caa1 rating assigned to the $600 million senior secured note
offering, the same as the CFR reflects the notes' position as the
bulk of the debt in the capital structure aside from the proposed
$50 million super-priority secured revolving credit facility (not
rated). The affirmation of the Caa1 CFR reflects CEC's good
liquidity provided by its sizeable cash balances which is being
bolstered by the proposed transaction. The CFR also reflects CEC's
very high debt leverage, weak coverage and weak same store sales
trends. The downgrade of the PDR to Caa1-PD reflects the higher
expected recovery in a distressed scenario as a result of improved
liquidity that will help CEC better navigate the challenging
operating environment than previously expected.
Assignments:
Issuer: CEC Entertainment, LLC
GTD Senior Secured Regular Bond/Debenture, Assigned Caa1 (LGD4)
Affirmations:
Issuer: CEC Entertainment, LLC
Corporate Family Rating, Affirmed Caa1
Downgrades:
Issuer: CEC Entertainment, LLC
Probability of Default Rating, Downgraded to Caa1-PD from B3-PD
Outlook Actions:
Issuer: CEC Entertainment, LLC
Outlook, Remains Negative
RATINGS RATIONALE
The Caa1 CFR reflects Moody's view that continued government
imposed capacity restrictions as well as consumers' health and
safety concerns will continue to impact CEC's ability to materially
improve credit metrics over the next 12 to 18 months despite the
gradually easing of restriction to date. For the LTM period ending
September 30, 2020, Moody's adjusted debt leverage was extremely
high at over 15 times and will deteriorate further before it begins
to stabilize and gradually improve while interest coverage will
remain negative for an extended period. Overall, CEC's business
model is more affected by government imposed capacity restrictions
versus standard restaurants, given its high reliance on
in-restaurant entertainment which accounted for the majority of
earnings.
CEC's rating is also constrained by its current level of free cash
flow deficits and the likelihood that the free cash flow deficits
will continue until operating performance materially rebounds.
While CEC will have a meaningful cash balance following the
proposed financing, it will need to stem its current pace of cash
flow deficits in order to preserve its liquidity. The ratings also
incorporate the company's high seasonality of earnings in the first
quarter and store concentration in California, Texas and Florida.
The ratings are supported by CEC's meaningful scale, good
liquidity, solid EBITDA margins driven by its entertainment focus
versus peers, and reasonable level of brand awareness.
The negative outlook reflects Moody's view that adjusted debt to
EBITDA will remain extremely high and EBIT to interest coverage
will stay very weak over the next 12-18 months as government
restrictions on in-door dining and activities are unlikely to
materially subside on a consistent and sustained basis across the
US for an extended period.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded should operations return to a level that
is able to sustain debt to EBITDA below 6.5x and EBIT to interest
expense above 1.1x. An upgrade would also require maintaining at
least good liquidity.
Ratings could be downgraded if liquidity were to weaken for any
reason, if occupancy restrictions remain in place beyond current
assumptions or if earnings failed to improve following a wide
spread lifting of government restrictions on restaurant occupancy.
CEC is headquartered in Irving, Texas, and owns, operates, and
franchises a total of 558 Chuck E. Cheese stores and 114 Peter
Piper Pizza locations that provide family-oriented dining and
entertainment in 47 states and 15 foreign countries. CEC is owned
by a group that includes both pre-petition debt lenders as well as
new debt lenders. Revenue for the full year 2019 were about $913
million but have fallen to around $360 million for 2020.
The principal methodology used in these ratings was Restaurant
Industry published in January 2018.
COMFORT CARE: Seeks to Hire William E. Jamison as Legal Counsel
---------------------------------------------------------------
Comfort Care, LLC seeks approval from the U.S. Bankruptcy Court for
the Northern District of Illinois to hire William E. Jamison, Jr. &
Associates as its legal counsel.
The firm will render these services:
a. advise the Debtor with respect to its powers and duties in
the continued operation of its business;
b. assist the Debtor in the negotiation, formulation, drafting
and confirmation of a plan of reorganization;
c. assist the Debtor in investigating and pursuing all rights
and claims in connection with preserving the value of the Debtor's
assets and rehabilitating property of the estate, including the
prosecution of any claims against any insurer of the Debtor's
property;
d. take such action as may be necessary with respect to any
claims that may be asserted against the Debtor and prepare legal
papers; and
e. perform all other legal services for the Debtor which may
be required in connection with its Chapter 11 case.
The firm will charge an hourly fee of $350. The firm received a
retainer in the amount of $13,262.
The firm can be reached through:
William E. Jamison, Jr., Esq.
William E. Jamison, Jr. & Associates
53 W. Jackson Blvd., Suite #309
Chicago, IL 60604
Tel: (312) 226-8500
Email: wjami39246@aol.com
About Comfort Care
Comfort Care, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No.
21-03842) on March 24, 2021. Sandy Wilborn, manager and chief
executive officer, signed the petition. At the time of the filing,
the Debtor disclosed $500,000 to $1 million in assets and $1
million to $10 million in liabilities. Judge Jacqueline P. Cox
oversees the case. William E. Jamison, Jr. & Associates serves as
the Debtor's legal counsel.
COMMSCOPE HOLDING: Planned Spin-Off No Impact on Moody's B1 CFR
---------------------------------------------------------------
Moody's Investors Service said that CommScope Holding Company,
Inc.'s announcement to divest its Home Networks business does not
impact CommScope's ratings including its B1 Corporate Family Rating
or its negative outlook at this time. CommScope recently announced
plans to spin off its Home Networks segment as a stand-alone public
company by early 2021. Moody's expects the divestiture of the
declining, low margin Home Networks business will improve
CommScope's business profile. However the impact of the lost net
income and cash flow is not yet clear on the overall credit
profile. As part of the spin off, CommScope expects the spun off
Home Networks entity to raise debt, proceeds of which would be
distributed to paydown CommScope debt. Details on the amount of
paydown or stranded costs from the divestiture were not disclosed.
Although the B1 CFR was not impacted by the announcement, details
of the transaction along with ongoing restructuring plans and
profile of the remaining company were limited. Management indicated
that they would continue to focus on deleveraging and that the
divestiture should not impact those plans or timetable. The
negative outlook continues to reflect Moody's concerns about the
pace of deleveraging at CommScope and how long it will take for
leverage to get to 6x or below.
CommScope is in the process of a significant restructuring of its
operations to take out costs, which could offset some or all of the
stranded costs left from the divested business. The divestiture
will modestly reduce diversification, however the Home Network
business is declining and has the lowest margin of CommScope's
segments. The Home Network unit includes the former ARRIS set top
box business as well as home gateways and other customer premise
equipment. The segment declined 31% in 2020 as demand for set top
boxes continued to fall. The declines will likely moderate in
coming years as home gateway and other home solutions offset some
of the long term secular drop in the set top box business. The Home
Networks business represented approximately 28% of total CommScope
revenues in 2020 but only 10% of segment EBITDA.
Debt to EBITDA is very high at CommScope (around 9x based on
December 2020 results) and the B1 CFR is based on the expectations
of de-levering to around 6x by 2022. If the divestiture delays the
de-leveraging, or performance at the remaining businesses do not
improve significantly over the next two years, the ratings could be
downgraded.
CommScope Holding Company, Inc. is the holding company for
CommScope Inc., a supplier of connectivity and infrastructure
solutions for the wireless industry, telecom service and cable
service providers as well as the enterprise market. ARRIS, acquired
April 2019, is one of the largest providers of equipment to the
cable television and broadband industries. Revenue was
approximately $8.4 billion for the twelve months ended December 31,
2020. CommScope is headquartered in Hickory, NC.
CONCISE INC: June 2 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 8, 2021, the Court ordered that:
* June 2, 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 8, 2021, is available at
https://bit.ly/3sdIDwX 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
Jan. 31, 2019. In the petition signed by David Johnson, chief
executive officer, the Debtor disclosed $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.
CONCORD INC: Seeks to Hire Wiggam & Geer as Bankruptcy Counsel
--------------------------------------------------------------
Concord, Inc. seeks approval from the U.S. Bankruptcy Court for the
Northern District of Georgia to hire Wiggam & Geer, LLC as its
legal counsel.
The firm's services include:
(a) preparing pleadings and applications;
(b) conducting examination;
(c) advising the Debtor of its rights, duties and
obligations;
(d) consulting and representing the Debtor with respect to a
Chapter 11 plan;
(e) performing those legal services incidental and necessary
to the day-to-day operations of the Debtor's business;
(f) taking actions incidental to the proper preservation and
administration of the Debtor's estates and business.
The firm will charge $400 per hour for partners, $330 for
associates, and $150 per hour for legal assistants.
Will Geer, Esq., at Wiggam & Geer, disclosed in court filings that
he and his firm neither hold nor represent any interest adverse to
the Debtor and its bankruptcy estate.
The firm can be reached at:
Will B. Geer, Esq.
Wiggam & Geer, LLC
50 Hurt Plaza, SE, Suite 1150
Atlanta, GA 30303
Telephone: (678) 587-8740
Facsimile: (404) 287-2767
Email: wgeer@wiggamgeer.com
About Concord Inc.
Founded in Philadelphia in 1983, Concorde has distinguished itself
as a leader in the provision and management of driver qualification
file management, substance abuse programs, physical examinations,
regulatory compliance consulting, occupational health and safety
services, policy development and consulting, and employee
background screening.
Concord, Inc. filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 21-52482) on
March 26, 2021. At the time of the filing, the Debtor disclosed
$1,000,001 to $10 million in both assets and liabilities. Will B.
Geer, Esq. at Wiggam & Geer, LLC, serves as the Debtor's counsel.
CORNUS MONTESSORI: Seeks to Hire JV Solutions as Accountant
-----------------------------------------------------------
Cornus Montessori, LLC seeks authority from the U.S. Bankruptcy
Court for the Eastern District of Virginia to hire JV Solutions,
LLC as its accountant.
The Debtor requires an accountant to prepare its 2019 and 2020 tax
returns, monthly operating reports, projections and other financial
and accounting information that will be required in its Chapter 11
case.
The firm has requested an advance retainer of $950.
The firm will be paid at these rates:
Partners/Directors $300 per hour
Managers $190 - $250 per hour
Sr. Accountant $175 per hour
Staff Accountant $90 - $130 per hour
Kamal Verma, a certified public accountant and managing member of
JV Solutions, disclosed in a court filing that the firm does not
hold or represent any interest adverse to the Debtor and its
estate.
The firm can be reached through:
Kamal Verma CPA
JV Solutions, LLC
dba Verma CPA & Associates
14701 Lee Highway #308
Centreville, VA 20121
Phone: 703-665-6555
703-870-3699
About Cornus Montessori
Cornus Montessori, LLC, owner of a Montessori school and daycare
business in Chantilly, Va., sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No.
21-10213) on Feb. 11, 2021. At the time of the filing, the Debtor
was estimated to have assets of less than $50,000 and liabilities
of $100,001 to $500,000.
Judge Klinette H. Kindred oversees the case.
The Debtor tapped Roganmillerzimmerman, PLLC as its legal counsel
and JV Solutions, LLC (doing business as Verma CPA & Associates) as
its accountant.
COTO INVESTMENTS: Unsecureds to Get 100% in Sec. 1111(b) Election
-----------------------------------------------------------------
Coto Investments, Inc., d/b/a O'Cairns Inn and Suites (the Hotel),
filed on April 9, 2021, a Disclosure Statement explaining its
proposed Chapter 11 Plan of Reorganization.
The Plan provides for the restructuring of certain allowed creditor
claims and payments under the Plan for a period of five years with
an estimated $291,520 in payments to allowed general unsecured
claims, and full payment to the Debtor's allowed priority tax
claims from the Debtor's cash flow. If NLAC makes a Section
1111(b) election, the General Unsecured Creditors will receive
100% payment and if NLAC does not make a Section 1111(b) election,
General Unsecured Creditors will receive an approximate 12%
distribution. Allowed Claims of Secured Creditors will either be
resolved consensually or through cramdown, pursuant to Section
1129(b) of the Bankruptcy Code.
The Plan will be funded by the Debtor's operation of the Hotel.
A hearing on the Disclosure Statement is on June 8, 2021, at 11:30
a.m., at Courtroom 201, U.S. Bankruptcy Court for the Central
District of California, Northern Division, 1415 State Street, Santa
Barbara, CA 93101.
The Plan will treat claims and interests as follows:
* The National Loan Acquisition Company (NLAC) Allowed Secured
Claim in Class 1 is impaired. The Claim amount is $6,592,028 but
the Debtor has used the value of the hotel securing the Claim of
$3,250,000 in full satisfaction of this Claim. The Debtor proposes
to pay off this amount over 15 years at 4.0% interest unless NLAC
makes an election under Section 1111(b) of the Bankruptcy Code
election, in which case its Allowed Secured Claim will be paid in
full over 15 years with no interest.
* Riverview Bank's Allowed Unsecured Claim in Class 4 is
impaired. The Claim amount of $107,449, to the extent not
forgiven, will be paid from Debtor's Cash Flow biannually over 5
years from the Effective Date. The Claim amount, which the Debtor
expects to be forgiven, is a loan made to the Debtor under the
Paycheck Protection Program of the CARES Act.
* Allowed General Unsecured Claims in Class 5 total
approximately $186,565, if NLAC makes a Section 1111(b) election,
and $3,528,593 if NLAC does not make the Section 1111(b) election.
Under the Plan, the Debtor proposes to pay the amount from its cash
flow biannually over 5 years from the Effective Date. Commencing
180 days after the Effective Date, the holders of such Allowed,
General Unsecured Class 5 Claims shall receive payment, biannually,
of their pro-rata share of Debtor's Cash Flow over 5 years from the
Effective Date in full and complete satisfaction of their Allowed
Claims. The Debtor's Projections provide for biannual payments of
$29,152 to be shared Pro-Rata by holders of Class 5 Claims.
* The existing Interest in Class 6 is canceled and extinguished.
In exchange for the new value contribution, the Plan Proponent
shall be issued 100% of the interest in the Reorganized Debtor.
A copy of the Disclosure Statement may be accessed for free at
tinyurl.com/fembwhd7 from PacerMonitor.com.
About Coto Investments
Coto Investments, Inc., d/b/a O'Cairns Inn and Suites, is a
privately held company in the traveler accommodation industry. It
owns and operates O'Cairns Inn & Suites, a family-style boutique
hotel with hospitality and resort-like amenities.
Coto Investments, Inc. sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 20- 11239) on Oct. 13,
2020. The petition was signed by Tory O'Cairns, chief executive
officer. At the time of the filing, the Debtor disclosed $1 million
to $10 million in both assets and liabilities. Judge Deborah J.
Saltzman oversees the case. The Debtor tapped Goe Forsythe &
Hodges LLP as its counsel and Armory Consulting Co., as financial
advisor.
CRESTWOOD EQUITY: S&P Affirms 'BB-' Long-Term ICR, Outlook Negative
-------------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' long-term issuer credit
rating on Crestwood Equity Partners (CEQP), its 'BB-' issue-level
rating on its unsecured debt, and the 'B-' rating on its preferred
stock.
The negative outlook reflects our expectation that leverage will
remain elevated for 2021, as we expect adjusted debt to EBITDA of
about 5.5x-5.7x in 2021, gradually decreasing to 5.0x-5.3x in 2022
The transaction will increase CEQP's flexibility for distributions
and improve its governance structure. In March, CEQP announced that
it had entered into a series of agreements whereby Crestwood would
acquire approximately 11.5 million common units and the general
partner interest from Crestwood Holdings for $268 million. With the
transaction now finalized, Crestwood will have approximately 62.8
million common units outstanding, or 15% fewer total common units.
First Reserve has also exited its investment in Crestwood,
consisting of 17.5 million common units or approximately 24% of the
total common units, and control of the general partner. The company
will transition to a publicly elected board of directors in the
coming months. In S&P's opinion, the transaction will increase
CEQP's flexibility in terms of distributions and the simplified
corporate structure could remove any future misalignment between
the partnership and general partner sponsorship, improving the
company's governance structure. Furthermore, the transaction could
better position the firm for any consolidation trends that
materialize. However, CEQP is funding the repurchase of the general
partner interest and 11.5 million units held by First Reserve with
a $268 million draw on its revolver, which raises leverage in 2021
and 2022. Consequently, S&P forecasts adjusted debt to EBITDA of
5.5x-5.7x in 2021 and 5.0x-5.3x in 2022. S&P's debt calculations
also include $612 million in outstanding preferred units that we
treat as 100% debt.
S&P said, "We expect revenues to rebound amid improved commodity
prices. With a more constructive commodity price environment
expected in 2021 and the reversal of shut-ins in the oil-weighted
basins of the Bakken and Powder River Basins in the second half of
2020, we now anticipate Crestwood's volume-driven revenues, which
still account for 70%–75% of its cash flow, to rebound in 2021.
We also anticipate reduced capital investment in 2021 with the
company more focused on optimizing its platforms in the Bakken,
Powder River Basin, and Delaware Permian, and forecast capital
expenditure (capex) of $50 million-$70 million in 2021. We now
forecast CEQP to generate adjusted EBITDA of $590 million-$610
million in 2021 with marginal growth in 2022."
The partnership continues to derive about 84% of its 2020 EBITDA
from fixed-fee or take-or-pay contracts, with cash flow derived
from approximately 58% natural gas, 22% crude oil, and 20% natural
gas liquids (NGLs). S&P's assessment of the partnership's business
risk profile remains fair, reflecting the partnership's size and
scale and asset diversity.
S&P said, "The negative outlook reflects our view that adjusted
leverage at the partnership will be 5.5x-5.7x in 2021. We expect
the partnership to use cash over the next 12 months to decrease
leverage; however, we expect credit metrics will remain elevated
over 5.0x through 2021 and 2022."
S&P could consider a negative rating action on CEQP if:
-- S&P no longer expects the partnership's adjusted leverage to be
consistently below 5x. This could happen if throughput volumes
remain flat or decrease or due to softer demand in the
transportation and storage segments.
-- Liquidity deteriorates such that covenant headroom
significantly tightens.
S&P could revise the outlook to stable if the company decreases
leverage such that adjusted debt to EBITDA falls below 5x on a
sustained basis.
CREW ENERGY: S&P Alters Outlook to Stable, Affirms 'CCC+' ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook on Crew Energy Inc. to
stable from negative and affirmed its 'CCC+' issuer credit rating
on the company and 'B-' issue-level rating on Crew's C$300 million
of senior unsecured notes. The '2' recovery rating is unchanged.
S&P said, "The stable outlook reflects our expectation that Crew
will generate an adjusted funds from operations (FFO)-to-debt ratio
of about 25% in 2021 and have sufficient liquidity to fund its
operations over the next 12 months.
"We expect Crew will generate meaningfully improved cash flows and
credit measures following the upward revision to our oil and gas
pricing assumptions. We recently revised our oil and AECO price
assumptions. The oil price increase is largely spurred by
significant OPEC and Russian supply cuts and global stimulus
policies that have improved demand and the economic outlook and led
the recent rebound in prices. At the same time, we raised our AECO
natural gas price assumption for 2022, as the decline in U.S.
associated gas production in tandem with lower shale oil production
has increased Canadian gas volume exports to the U.S. and we
believe U.S. demand for Canadian gas exports will be sustained
through 2022.
"Based on these pricing updates, we expect the company will
generate meaningfully improved cash flow and leverage metrics.
Specifically, we expect its adjusted FFO-to-debt ratio will
increase to 25% in 2021 from 10% in 2020, with further improvement
expected in 2022. The improvement is also led by our expectation
for higher production. We also note that downside risk is limited
to an extent, as Crew has hedged over 50% of its 2021 natural gas
production at C$3.08 per thousand cubic feet and 36% of its gas
production in 2022 at an average price of C$3.05 per thousand cubic
feet.
The 'CCC+' rating reflects reliance on the 364-day credit facility
to bridge operating shortfalls. Based on the favorable natural gas
pricing environment, management has increased the 2021 capital
budget to aggressively expand production and capitalize on existing
infrastructure, which can currently accommodate about 40,000
barrels of oil equivalent (boe) per day of production. The
production increase would also enable the company to lower per unit
costs by over 25% by 2022. S&P said, "We estimate capital spending
of about C$145 million in 2021. Although this is expected to
increase production by more than 20% to about 27,000 boe per day in
2021, we estimate the company will outspend cash flows by about
C$35 million. As a result, we believe the company will remain
reliant on its 364-day facility to bridge our projected cash flow
shortfall. As of Dec. 31, 2020, Crew had about C$115 million
available on its C$150 million 364-day facility and we estimate it
will have about C$80 million available on the facility at year-end
2021. We, however, believe further deterioration in liquidity is
unlikely. Given current industry conditions and growth in reserves,
we believe downside risk to the borrowing base being further
lowered is unlikely; the borrowing base was lowered to C$150
million from C$235 million during second-quarter 2020. In addition,
we assume that if there was a significant decline in natural gas
prices, Crew would cut back a portion of its growth spending."
Furthermore, the company has the option to further dispose of
working interests in its infrastructure assets for C$37.5 million,
which could provide incremental liquidity to bridge our estimated
cash flow shortfall.
Crew's business risk profile reflects the relatively small scale of
production and natural gas concentration. S&P said, "In our
opinion, with average daily production of 20,000-30,000 boe/day,
Crew is relatively small compared with higher-rated North American
peers. Our business risk assessment also reflects a low proved
developed ratio of 32%, which in our view indicates relatively
higher development risk. The company also has limited product
diversity, with about 70% of the production being natural gas.
Partially mitigating this is the market diversification to
different hubs, including Chicago and AECO. The company has
increased its exposure to AECO significantly in 2021, to about 46%
from 5% in 2020 following the reduction of its Alliance service
contract because it better matches take-away capacity and benefits
from lower transportation costs (savings of about C$9 million
annually). Crew has also continued to focus on cost reduction by
improving well efficiencies and unit costs are expected to further
fall as production expands. However, the profitability profile for
gas-focused producers remains weaker than for producers with a
crude oil-focused product mix. Based on our five-year profitability
assessment, we expect Crew's profitability, which we measure using
the company's unhedged unit EBIT, to remain in the bottom quartile
of our rated exploration and production (E&P) peer group."
S&P said, "The stable outlook reflects our view that credit
measures will remain in line with our expectations for the rating
over the next 12 months, including an FFO-to-debt ratio just below
30% over the next two years. The outlook also reflects our
expectation that Crew will maintain sufficient liquidity under its
credit facility over the next year, despite the high growth
spending.
"We could lower our rating on Crew if the company generates
materially higher negative free cash flows, which in our view would
compromise its liquidity position. This would most likely occur if
there is a meaningful drop in commodity prices and the company does
not reduce its capital spending.
"We could raise the rating if Crew is able to fully fund its
expected capital spending through internal cash flow, and its
liquidity improved. This would likely occur if commodity prices
further strengthened and the company limited capital spending
within internal cash flow generation."
CROWN HOLDINGS: European Tinplate Deal No Impact on Moody's Ba2 CFR
-------------------------------------------------------------------
Moody's Investors Service announced that Crown Holdings, Inc.'s
ratings, including the Ba2 Corporate Family Rating, Ba2-PD
Probability of Default Rating and all other instrument ratings are
unchanged. The SGL-2 Speculative Grade Liquidity Rating is also
unchanged and the outlook remains stable. This follows the
announcement that Crown entered into a definitive agreement to sell
its European Tinplate business to KPS Capital Partners, LP.
Crown will receive pre-tax proceeds of approximately EUR1.9 billion
from the transaction and retain a 20% ownership stake in the
business. The European Tinplate business comprises 44 manufacturing
facilities in 17 countries in Europe, the Middle East and Africa
which produce food cans and ends, aerosol cans, metal closures, and
promotional packaging for various consumer brands. In 2020, the
business generated EUR1.9 billion in revenue and approximately
EUR220 million in estimated standalone EBITDA and had approximately
6,300 employees.
Crown expects to use the net proceeds, after closing working
capital adjustments, taxes and other transaction related costs, to
further reduce debt, fund capital projects and repurchase shares
over time under its recent $1.5 billion authorization dated
February 25, 2021.
The sale of the European Tinplate business is expected to close
during the third quarter of 2021 and is subject to certain
regulatory approvals and customary closing conditions.
Moody's expects Crown to pay down enough debt by the end of 2021 to
improve pro forma debt to LTM EBITDA to 4.6x from 5.1x at December
31, 2020. Additionally, the company is expected to benefit from an
improvement in the Transit segment as the global economy continues
to recover from the pandemic and a significant amount of new
business in the Beverage segment.
A failure to allocate enough cash to debt reduction to improve
metrics could jeopardize the rating.
RATINGS RATIONALE
Crown's (Ba2 stable) credit profile reflects an expectation that
credit metrics will improve as the transit segment recovers from
pandemic related shutdowns, the beverage can segment benefits from
new business and free cash flow is used for debt reduction. Pro
forma for the divestiture (and assumed debt paydown), debt to LTM
EBITDA is expected to decline to 4.6x by the end of 2021 from 5.1x
at December 31, 2020. Crown benefits from the consolidated industry
structure in the can segment, high exposure to stable food and
beverage end markets and a large base of installed equipment in the
transit packaging segment that drives a high percentage of
recurring sales of consumables. Crown also benefits from broad
geographic diversity and good liquidity.
Crown's credit profile is constrained by the company's high
customer and product concentration of sales and exposure to
cyclical end markets in the transit packaging segment.
Additionally, the fragmented and competitive industry structure in
the transit packaging segment makes growth and margin expansion
challenging. The ongoing asbestos liability is also a source of
uncertainty.
The SGL-2 speculative grade liquidity rating reflects Crown's
projected good cash flow, ample availability under its revolving
credit facility and good covenant cushion. The company has ample
liquidity, which includes a $1.6 billion secured revolving credit
facility (including multi-currency and a U.S. dollar revolver) that
expires December 2024. Crown also has a securitization facility
with a limit of $375 million that expires annually in July and a
securitization facility with a limit of $265 million that expires
in November 2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Crown sustainably improves credit
metrics within the context of a stable competitive environment and
maintains good liquidity. Specifically, the ratings could be
upgraded if:
-- Adjusted total debt to LTM EBITDA is below 4.0x
-- Free cash flow to debt is over 8.0%
-- EBITDA to interest expense is over 6.0x
The ratings could be downgraded if credit metrics, liquidity or the
competitive environment deteriorate. Additionally, a significant
change in the asbestos liability could also trigger a downgrade.
Specifically, the rating could be downgraded if:
-- Adjusted total debt to LTM EBITDA is above 4.6x
-- Free cash flow to debt is below 6.0%
-- EBITDA to interest expense is below 5.0x
-- Greater than expected allocation of divestiture proceeds
towards stock buy backs versus debt paydown
Crown Holdings, Inc. headquartered in Yardley, Pennsylvania, is a
global manufacturer of steel and aluminum containers for food,
beverage, and consumer products. Crown also manufactures protective
packaging products and solutions. The company generates about 70.0%
of sales outside the US. For the 12 months ended December 31, 2020,
the company generated approximately $11.6 billion in revenue.
DEARBORN REAL: Has Until July 1 to File Combined Plan & Disclosure
------------------------------------------------------------------
Judge Maria L. Oxholm has entered an order within which the
deadline for debtor Dearborn Real Estate Associates, L.L.C. to file
a combined plan and disclosure statement is July 1, 2021 and
established the following dates and deadlines:
* July 7, 2021 is the deadline for creditors who are required
by law to file claims except that for governmental units the
deadline to file claims October 5, 2021.
* May 3, 2021 is the deadline for the debtor to file motions
and deadline to file all unfiled overdue tax returns.
* June 1, 2021, is the deadline for parties to request the
debtor to include any information in the disclosure statement.
* Aug. 5, 2021, is the deadline to return ballots on the plan,
as well as to file objections to final approval of the disclosure
statement and objections to confirmation of the plan.
* Aug. 12, 2021, at 11:00 a.m., in Room 1875, 211 W. Fort
Street, Detroit, Michigan is the hearing on objections to final
approval of the disclosure statement and confirmation of the plan.
* June 1, 2021, is the deadline to file a motion to extend the
deadline to file a plan.
A full-text copy of the order dated April 8, 2021, is available at
https://bit.ly/3mGAyQ5 from PacerMonitor.com at no charge.
About Dearborn Real Estate
Dearborn Real Estate Associates, L.L.C. is primarily engaged in
renting and leasing real estate properties. The Debtor filed
Chapter 11 Petition (Bankr. E.D. Mich. Case No. 21-41804) on March
3, 2021.
Hon. Maria L. Oxholm oversees the case. Edward J. Gudeman, Esq. of
GUDEMAN & ASSOCIATES, PC is the Debtor's Counsel.
At the time of filing, Debtor has $500,000 to $1 million estimated
assets and $1 million to $10 million estimated liabilities.
DEL MONTE: Moody's Hikes CFR to B3 on Strong Operating Performance
------------------------------------------------------------------
Moody's Investors Service, Inc. upgraded ratings of Del Monte
Foods, Inc. including its Corporate Family Rating to B3 from Caa1,
Probability of Default Rating to B3-PD from Caa1-PD and Senior
Secured Debt rating to Caa1 from Caa2. The company's SGL-3
Speculative Grade Liquidity rating is unchanged. The outlook
remains positive.
The rating upgrades reflect the company's strengthening operating
performance following a May 2020 recapitalization and major ongoing
operational restructuring, which have improved liquidity and
allowed the company to accelerate is deleveraging. Moody's
estimates that at the end of this fiscal year ending in April 2021,
debt/EBITDA will be below 4.5x from about 6.5x at the time of the
recapitalization. This also compares favorably to Moody's previous
estimate at the time of the recapitalization that leverage would
approximate 5.6x at the end of fiscal 2021. To be sure, the
company's recent performance has been significantly aided by the
effects of the coronavirus pandemic, that drove elevated retail
demand for shelf stable fruits, vegetables and broths. However,
Moody's believes that a meaningful portion of the over 85% increase
in EBITDA to approximately $170 million fiscal 2021, as anticipated
by Moody's, is driven by significant cost reductions derived from
recent supply chain restructurings that are sustainable.
As a result, Moody's believes that Del Monte has good opportunity
to sustain debt-to-EBITDA leverage below 5.0x for the foreseeable
future, even as favorable pandemic effects abate, and will begin
generating significant and sustained 12-month free cash flow
beginning in the third quarter of fiscal 2022. This is reflected in
the positive outlook.
Moody's has taken the following rating actions:
Ratings upgraded:
Issuer: Del Monte Foods, Inc.
Corporate Family Rating, Upgraded to B3 from Caa1
Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
GTD Senior Secured Global Notes, Upgraded to Caa1 (LGD4) from Caa2
(LGD5)
Outlook Actions:
Issuer: Del Monte Foods, Inc.
Outlook, Remains Positive
The Caa1 rating on the senior secured notes is a notch lower than
the B3 Corporate Family Rating, reflecting the subordinated lien on
its collateral relative to the first-lien $450 million asset backed
revolving credit facility ("ABL" not rated). This notching also
reflects the absence of any significant debt instruments that are
subordinate to the secured notes.
On May 2020, Del Monte completed a major recapitalization. This
included a $387 million equity contribution from parent company Del
Monte Pacific Ltd ("DMPL") and the issuance of $500 million
five-year 11.875% secured notes due 2025, the proceeds from which
were used to repay all of the company's bank term loans. The
company also slightly increased the size of its ABL facility to
$450 million and extended the maturity date to May 2023. This
important recapitalization significantly reduced the company's
leverage and improved liquidity, which provided needed flexibility
to complete the operational restructuring that was launched in
2019. This restructuring involved the sale or closure of four of
its 10 processing facilities in 2020, and other ongoing supply
chain streamlining that Moody's expects will achieve the targeted
$62 million of cost savings by the end of fiscal 2021.
RATINGS RATIONALE
The B3 Corporate Family Rating reflects Del Monte's moderating
financial leverage, the weak long-term category fundamentals in
U.S. canned fruit and vegetables, and remaining execution risk
related to the company's major operational restructuring. The
company's ratings are supported by the strength of the Del
Monte(TM) brand, which holds leading shares in core shelf stable
fruits and vegetables. The ratings are also supported by a history
of significant liquidity support provided by the parent company,
which Moody's expects will continue.
The SGL-3 speculative grade liquidity rating reflects the company's
adequate liquidity. Over the next year, Moody's anticipates that
growth-related inventory rebuilding will consume most of Del
Monte's internally generated funds from operations, leaving little
or no free cash flow after funding approximately $20 million of
capital expenditures. However, the company should maintain at least
$150 million of availability under its $450 million ABL throughout
the year. Moody's also anticipates that Del Monte will maintain a
comfortable cushion within the revolver's minimum 1.0x fixed charge
coverage covenant, which applies if ABL revolver borrowings exceed
certain levels.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Del Monte's ratings could be upgraded if the company is able to
sustain relatively stable operating performance, debt/EBITDA below
5.5x, and good liquidity, including at least $40 million of annual
free cash flow. Del Monte's ratings could be downgraded if earnings
weaken such that debt/EBITDA exceeds 6.5x or if liquidity
deteriorates significantly.
ESG CONSIDERATIONS
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Moody's analysis has considered the effect on the performance of
consumer sectors from the current weak U.S. economic activity and a
gradual recovery for the coming months. Although an economic
recovery is underway, it is tenuous, and its continuation will be
closely tied to containment of the virus. As a result, the degree
of uncertainty around Moody's forecasts is unusually high. Moody's
regard the coronavirus outbreak as a social risk under its ESG
framework, given the substantial implications for public health and
safety.
Headquartered in Walnut Creek, California, Del Monte Foods, Inc. is
a manufacturer and marketer of branded and private label food
products for the US and South American retail market. Its brands
include Del Monte(TM) in shelf stable fruit, vegetable and
tomatoes; Contadina(TM) in tomato-based products; College Inn(TM)
in broth products; and S&W(TM) in shelf stable fruit, vegetable and
tomato products. The company generates annual sales of
approximately $1.5 billion.
The principal methodology used in these ratings was Consumer
Packaged Goods Methodology published in February 2020.
DEL MONTE: S&P Upgrades ICR to 'B-', Outlook Positive
-----------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
Del Monte Foods Inc. (DMFI) to 'B-' from 'CCC+' as a result of its
forecast for continued good operating performance and
de-leveraging. S&P no longer believes the company's capital
structure is unsustainable.
S&P said, "We are also raising our issue-level rating on DMFI's
debt to 'B-' because of the issuer credit rating upgrade. The
recovery remains '3', indicating our expectation for meaningful
(50%-70%; rounded estimate: 65%) recovery in the event of a
default.
"The positive outlook reflects the possibility that we could raise
the ratings over the next 12 months if DMFI maintains steady profit
improvements through fiscal 2022 (ending April 30, 2022), such that
we believe its leverage will be sustained under the mid-5x area and
it will generate positive free cash flow."
The upgrade reflects significant de-leveraging, primarily driven by
cost-savings initiatives, a favorable mix shift, and lower debt
balances. DMFI's sales grew about 12% through the first three
quarters of its fiscal 2021 (ending April 30, 2021), primarily due
to strong demand for the company's shelf-stable product portfolio
of packaged vegetables and broths as U.S. consumers cooked more at
home during the pandemic. This growth more than offset significant
declines from the company's planned exit of lower-margin private
label business. The company was also able to raise prices across
all its categories, after several years of stagnant prices compared
with competitors. More importantly for its leverage, it largely
succeeded in its plan to eliminate $68 million of annual costs by
pivoting to an asset-light manufacturing model and right-sizing its
cost structure. These actions included closing plants and
warehouses, renegotiating supplier contracts, consolidating
purchasing of raw materials, and reducing headcount and other
costs. The company actioned about $62 million of savings as of the
end of January, and we expect the full amount to be realized in
fiscal 2022 (ending April 2022). The realization of a portion of
these savings in fiscal 2021 and the absence of the one-time costs
to achieve them have helped double trailing 12 month EBITDA to
about $150 million (from about $75 million as of the end of fiscal
2020). In addition, the company has been able to reduce its
revolver usage by about $100 million compared with the prior year.
The combination of EBITDA growth and lower debt balances drove
considerable de-leveraging to about 5.3x through the fiscal third
quarter. S&P said, "We now forecast leverage at about the mid-4x
area at the end of fiscal 2021, EBITDA interest coverage at about
2x, and positive free cash flow generation in 2021 and 2022. DMFI
has extended all of its debt maturities until least 2023 when its
asset-based lending facility (ABL) is due, and we believe the
company intends to extend the ABL maturity over the near term.
Therefore, while the company's debt interest cost is high, we
believe its cash flow can support the debt service and operations
and we no longer view the capital structure as unsustainable."
COVID-19-related growth will slow, but the company should benefit
from expanded distribution and innovation. S&P said, "We expect
DMFI's full year fiscal 2021 revenue will moderate significantly
from the 12% year-to-date growth as it laps the pantry loading
period from March to April 2020 in its fourth quarter. We also
expect sales to normalize as the U.S. continues its vaccine rollout
and eases stay-at-home restrictions. However, we still expect at
least low-single-digit revenue growth over the next few years,
primarily due to distribution gains in the club, convenience, and
dollar store channels, as well as price increases and continued
innovation." The company's products are less expensive,
shelf-stable alternatives to fresh produce, so demand could remain
strong if unemployment remains high or consumers continue to spend
more time at home. However, uncertainty remains about the pace of
the vaccine rollout and economic recovery in the U.S., and demand
for DMFI's products could be uneven over the next two years.
Leverage has improved considerably, but free cash flow generation
is still relatively weak. S&P said, "Our forecast credit measures
for DMFI might otherwise be indicative of higher ratings. However,
the company has not demonstrated that its new margin profile and
more moderate leverage levels are sustainable. In addition, its
free cash flow is still relatively weak, mainly due to the
company's need to increase its spending to bolster inventory, and
because it is no longer relying on parent Del Monte Pacific Ltd.
(DMPL) for working capital support. We expect modestly positive
free cash flow in fiscal 2021 and 2022, improving to over $60
million by fiscal 2023. If DMFI meets or exceeds our forecast over
the next 12 months such that we have confidence in its ability to
sustain current leverage levels and generate positive free cash
flow, we would consider higher ratings."
The positive outlook reflects the possibility that S&P could raise
the ratings over the next 12 months if DMFI maintains steady profit
improvements through the remainder of fiscal 2021 into fiscal 2022,
and S&P believes it will sustain leverage under the mid-5x area and
it generates positive free cash flow.
S&P believes the company could achieve these conditions if it:
-- Demonstrates sustained organic growth by continuing to expand
its distribution and achieve higher average prices;
-- Demonstrates good working capital and inventory management
resulting in increasing free cash flow generation;
-- Realizes the remainder of the expected cost savings from its
asset-light restructuring plan, resulting in permanent EBITDA
margin improvement; and
-- Demonstrates conservative financial policies by not making
large, debt-financed dividends or acquisitions.
S&P could revise the outlook to stable if leverage approaches 6.5x
or it does not believe the company will generate meaningful free
cash flow. This could happen if:
-- Cost savings are offset by higher input cost inflation, leading
to significant EBITDA margin erosion compared with S&P's
expectations;
-- Revenue declines due to an inability to effectively expand
distribution, or depressed demand for packaged fruits and
vegetables as the economy re-opens and consumers eat more away from
home; or
-- More aggressive financial policies such as a large
debt-financed acquisition or dividend.
DESTINATION HOPE: May 20 Plan & Disclosure Hearing Set
------------------------------------------------------
On March 11, 2021, SWBG, Inc., f/k/a Destination Hope, Inc., filed
with the U.S. Bankruptcy Court for the Southern District of Florida
a Plan of Liquidation and a corresponding Disclosure Statement.
On April 8, 2021, Judge Peter D. Russin ordered that:
* May 20, 2021, at 10:30 a.m. via Zoom is the hearing to
consider approval of the Disclosure Statement and confirmation of
the Plan.
* May 13, 2021, is fixed as the last day for filing and
serving objections to the disclosure statement.
* May 6, 2021, is fixed as the last day for filing and serving
objections to confirmation of the plan.
* May 6, 2021, is fixed as the last day for filing ballots
accepting or rejecting the Plan.
* May 6, 2021, is fixed as the last day for serving notice of
fee applications.
A full-text copy of the order dated April 8, 2021, is available at
https://bit.ly/3sb3HUM from PacerMonitor.com at no charge.
The Debtor is represented by:
Aaron A. Wernick, Esq.
Wernick Law, PLLC
2255 Glades Road, Suite 324A
Boca Raton, Florida 33431
Telephone: (561) 961-0922
Facsimile: (561) 431-2474
Email: awernick@wernicklaw.com
About Destination Hope
Based in Fort Lauderdale, Fla., Destination Hope, Inc. --
https://destinationhope.com/ -- offers comprehensive drug rehab and
mental health programs, with a special focus on dual diagnosis
while providing clients with the knowledge and tools to overcome
their addiction.
Destination Hope sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-19402) on Aug. 28,
2020. The petition was signed by Benjamin Brafman, the company's
president. At the time of the filing, the Debtor estimated assets
of between $500,000 and $1 million and liabilities of between $10
million and $50 million. Judge Peter D. Russin oversees the case.
Wernick Law, PLLC is Debtor's legal counsel.
DIAMOND OFFSHORE: Second Amended Joint Plan Confirmed by Judge
--------------------------------------------------------------
Judge David R. Jones has entered findings of fact, conclusions of
law and order confirming the Second Amended Joint Chapter 11 Plan
of Reorganization of Diamond Offshore Drilling, Inc. and its debtor
affiliates.
The Plan and the various documents and agreements included in the
Plan Supplement or entered into in connection with the Plan,
including, without limitation, Article IV of the Plan, provide for
adequate and proper means for the Plan's execution and
implementation, thereby satisfying the requirements of section
1123(a)(5) of the Bankruptcy Code.
The Debtors have proposed the Plan in good faith and not by any
means forbidden by law, thereby satisfying section 1129(a)(3) of
the Bankruptcy Code. In determining that the Plan has been proposed
in good faith, the Court has examined the totality of the
circumstances surrounding the filing of the Chapter 11 Cases, the
Plan itself, the process leading to its formulation, the process
leading to Confirmation, the support of Holders of Claims and
Interests in the Voting Classes for the Plan, and the transactions
to be implemented.
The terms and conditions of the Exit Facilities are fair and
reasonable, reflect the Debtors' exercise of prudent business
judgment consistent with their fiduciary duties, are supported by
reasonably equivalent value and fair consideration, and have been
negotiated in good faith and at arm's length.
Co-Counsel for Debtors:
PAUL, WEISS, RIFKIND, WHARTON &
GARRISON LLP
Paul M. Basta
Robert A. Britton
Christopher J. Hopkins
Alice Nofzinger
Shamara R. James
1285 Avenue of the Americas
New York, New York 10019
Telephone: (212) 373-3000
Facsimile: (212) 757-3990
- and -
PORTER HEDGES LLP
John F. Higgins
Eric M. English
M. Shane Johnson
1000 Main St., 36th Floor
Houston, Texas 77002
Telephone: (713) 226-6000
Facsimile: (713) 226-6248
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.
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
Frères & Co. LLC is serving as financial advisor to the
Company. Prime Clerk LLC is the claims and noticing agent.
DON RAMON'S: Seeks Approval to Hire Brunetti Rougeau as Counsel
---------------------------------------------------------------
Don Ramon's Real Estate, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
Brunetti Rougeau, LLP to handle its Chapter 11 case.
Brunetti Rougeau will be paid at these rates:
Gregory A. Rougeau $450 per hour
Kenneth A. Brunetti $450 per hour
Paralegals $150 per hour
Within 90 days prior to the filing of the Debtor's bankruptcy case,
Brunetti Rougeau received from the Debtor the amount of $15,000.
Brunetti Rougeau will also be reimbursed for out-of-pocket expenses
incurred.
Gregory Rougeau, Esq., a partner at Brunetti Rougeau, 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.
Brunetti Rougeau can be reached at:
Gregory A. Rougeau, Esq.
Brunetti Rougeau, LLP
235 Montgomery Street, Suite 410
San Francisco, CA 94104
Tel: (415) 992-8940
Fax: (415) 992-8915
Email: grougeau@brlawsf.com
About Don Ramon's Real Estate
Don Ramon's Real Estate, LLC owns the building that holds the Don
Ramon's Mexican restaurant at 225 11th Street, in South of Market
(SoMa), San Francisco, Calif.
Don Ramon's Real Estate filed for Chapter 11 protection (Bankr.
N.D. Calif. Case No. 21-30191) on March 10, 2021. Leonila Ramirez,
manager, signed the petition. At the time of the filing, the
Debtor disclosed $1 million to $10 million in both assets and
liabilities. Judge Hannah L. Blumenstiel oversees the case. The
Debtor is represented by Brunetti Rougeau, LLP.
DORCHESTER RESOURCES: Seeks to Tap Christensen Law Group as Counsel
-------------------------------------------------------------------
Dorchester Resources, LP seeks approval from the U.S. Bankruptcy
Court for the Western District of Oklahoma to employ Christensen
Law Group, PLLC as bankruptcy counsel.
The firm will render these legal services:
(a) advise the Debtor regarding its powers and duties;
(b) advise and consult on the conduct of the Debtor's Chapter
11 case;
(c) attend meetings and negotiate with representatives of
creditors and other parties in interest;
(d) take all necessary actions to protect and preserve the
Debtor's estate;
(e) prepare pleadings in connection with the Chapter 11 case;
(f) represent the Debtor in connection with obtaining
authority to sell certain property of the estate;
(g) appear before the court and any appellate courts to
represent the interests of the Debtor's estate;
(h) negotiate and document agreements for the Section 363 sale
or disposition of Debtor's primary assets; and
(i) perform all other necessary legal services for the Debtor
in connection with the prosecution of the Chapter 11 case.
The hourly rates of the firm's counsel and staff are as follows:
Directors $385 - $450
Associates $245 - $310
Paralegals $195
The attorneys who will work on this matter and their hourly rates
are as follows:
J. Clay Christensen $450
Jeffrey E. Tate $410
Jonathan M. Miles $385
Brock Z. Pittman $310
Emily J. Irwin $245
Prior to the petition date, the firm received $53,330.32 for fees
and expenses from Dorchester Capital Corporation, an affiliate of
the Debtor.
As disclosed in court filings, Christensen Law Group is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
J. Clay Christensen, Esq.
Jeffrey E. Tate, Esq.
Jonathan M. Miles, Esq.
Brock Z. Pittman, Esq.
Emily J. Irwin, Esq.
Christensen Law Group, PLLC
The Parkway Building
3401 N.W. 63rd Street, Suite 600
Oklahoma City, OK 73116
Telephone: (405) 232-2020
Facsimile: (405) 228-1113
Email: Clay@christensenlawgroup.com
Jeffrey@christensenlawgroup.com
Jon@christensenlawgroup.com
Brock@christensenlawgroup.com
Emily@christensenlawgroup.com
About Dorchester Resources
Dorchester Resources, LP filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla. Case No.
21-10840) on April 5, 2021. At the time of the filing, the Debtor
had between $10 million and $50 million in both assets and
liabilities.
Judge Sarah A. Hall oversees the case.
The Debtor tapped Christensen Law Group, PLLC as counsel and Dakil
Auctioneers, Inc. as marketing and sales agent. Omni Agent
Solutions is the claims and administrative agent.
DORCHESTER RESOURCES: Taps Dakil Auctioneers as Sales Agent
-----------------------------------------------------------
Dorchester Resources, LP seeks approval from the U.S. Bankruptcy
Court for the Western District of Oklahoma to employ Dakil
Auctioneers, Inc. to assist in the marketing and sale of its
assets.
Dakil Auctioneers will receive a commission fee of $250,000 for
selling price of up to $11 million. If the selling price is above
$11 million, the firm will receive additional 3 percent of the
selling price.
Louis Dakil, a marketing agent at Dakil Auctioneers, disclosed in a
court filing 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:
Louis M. Dakil
Dakil Auctioneers, Inc.
200 NW 114th St.
Oklahoma City, OK 73114
Telephone: (405) 458-1645
Facsimile: (405) 752-9669
About Dorchester Resources
Dorchester Resources, LP filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla. Case No.
21-10840) on April 5, 2021. At the time of the filing, the Debtor
had between $10 million and $50 million in both assets and
liabilities.
Judge Sarah A. Hall oversees the case.
The Debtor tapped Christensen Law Group, PLLC as counsel and Dakil
Auctioneers, Inc. as marketing and sales agent. Omni Agent
Solutions is the claims and administrative agent.
DORCHESTER RESOURCES: Taps Omni Agent Solutions as Claims Agent
---------------------------------------------------------------
Dorchester Resources, LP seeks approval from the U.S. Bankruptcy
Court for the Western District of Oklahoma to employ Omni Agent
Solutions as claims and administrative agent.
Omni Agent will oversee the distribution of notices and will assist
in the maintenance, processing and docketing of proofs of claim
filed in the Chapter 11 case of Dorchester Resources. The firm
will also provide bankruptcy administrative services.
On or about Feb. 18, the Debtor provided Omni with a retainer in
the amount of $25,000. Omni received a second payment of $25,000 on
or about March 31.
Omni will be billed at hourly rates ranging from $35 to $205. The
Debtor agrees to reimburse the firm's out-of-pocket expenses. The
firm will serve monthly invoices to the Debtor.
Paul Deutch, the executive vice president of Omni, 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:
Brian K. Osborne
Omni Agent Solutions
5955 De Soto Avenue, Suite 100
Woodland Hills, CA 91367
Telephone: (818) 906-8300
Email: Bosborne@omniagnt.com
About Dorchester Resources
Dorchester Resources, LP filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla. Case No.
21-10840) on April 5, 2021. At the time of the filing, the Debtor
had between $10 million and $50 million in both assets and
liabilities.
Judge Sarah A. Hall oversees the case.
The Debtor tapped Christensen Law Group, PLLC as counsel and Dakil
Auctioneers, Inc. as marketing and sales agent. Omni Agent
Solutions is the claims and administrative agent.
DURRIDGE COMPANY: Wins Cash Collateral Access Thru May 2021
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts has
authorized Durridge Company Inc. to use cash and non-cash
collateral and certain restricted cash as is detailed in the
13-Week Budget on a final basis.
The Debtor is authorized to use cash and cash collateral to meet
and satisfy the Debtor's ongoing business and operational and
administrative expenses.
As adequate protection for the Debtor's use of cash collateral, its
secured creditors, Enterprise Bank and Smith Air Inc., are granted
adequate protection liens to secure any diminution in the value of
their respective interests in their collateral perfected as of the
Petition Date without the necessity of the execution by the Debtor
of security agreements, pledge agreements, financing statements or
other agreements, a valid and perfected replacement security
interest in, and lien on the Collateral which adequate protection
liens will be replacement liens on the postpetition Collateral to
the same extent, validity, perfection, enforceability and priority
as its lien on the Debtor's pre-petition assets.
On or before the 15th day of each month, the Debtor will file and
deliver to Enterprise Bank, the U.S. Trustee, the Subchapter V
Trustee, and the designated representative of Smith Air, beginning
on April 15, 2021, and continuing on the same day of each month
thereafter, a reconciliation of the Budget on both a line item and
cumulative basis with respect to the immediately preceding month.
The Debtor will deliver to the Subchapter V Trustee, Enterprise
Bank, and the designated representative of Smith Air, Monthly
Operating Reports at the same time they are submitted to the U.S.
Trustee.
The Debtor is also directed to file a "Further Notice of
Supplements" to the Motion by no later than June 2, 2021, which
attaches as exhibits to the Notice: (i) a supplemental 13-week
budget and (ii) a further revised form of proposed order.
A further hearing to consider the Debtor's continued cash access is
scheduled for June 9 at 10:30 a.m. by telephone. Objections are
due June 8.
A copy of the order is available for free at https://bit.ly/3dJacca
from PacerMonitor.com.
About Durridge Company Inc.
Durridge Company Inc. is a Delaware corporation organized on April
11, 2016 under the name of Sensory Acquisition Company. The name
was changed on that date to Durridge Company Inc. and is registered
to do business in Massachusetts. The location of the principal
office is 900 Technology Park, Billerica, Massachusetts 01821.
Durridge is a provider of professional radon detection equipment
and provides services including radon detection solutions for
businesses, universities, and governments worldwide. Durridge also
provides a wide range of accessories for their proprietary
technology known as RAD7, as well as software for performing
sophisticated radon data analysis, and expert calibration and
maintenance services.
Durridge sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Mass. Case No. 21-40187) on March 15, 2021. In the
petition signed by Wendell Clough, president, the Debtor disclosed
$354,112 in assets and $2,182,277 in liabilities.
The Honorable Christopher J. Panos is the case judge.
Nina M. Parker, Esq. at PARKER & ASSOCIATES LLC represents the
Debtor as counsel.
EASTERN NIAGARA: Plan Exclusivity Extended Thru June 3
------------------------------------------------------
The Honorable Michael J. Kaplan of the U.S. Bankruptcy Court for
the Western District of New York extended the periods by 90 days
within which Eastern Niagara Hospital, Inc. has the exclusive right
to file a Chapter 11 disclosure statement and plan, until June 3,
2021, and to solicit acceptances of the plan to and including
August 2, 2021.
With the additional time, the Debtor will be able to continue
working on its business model with Catholic Health Systems and
discussing its proposal with its secured lenders and Creditors'
Committee, before proposing a plan, since the Debtor intends to
file a plan as soon as practicable.
A copy of the Court's Extension Order is available at
https://bit.ly/3sdzggH from PacerMonitor.com.
About Eastern Niagara Hospital, Inc.
Eastern Niagara Hospital -- http://www.enhs.org-- is a
not-for-profit organization, focused on providing general medical
and surgical services. The Hospital offers radiology, surgical
services, rehabilitation services, cardiac services, respiratory
therapy, obstetrics & women's health, emergency services, acute &
intensive care, chemical dependency treatment, occupational
medicine services, DOT medical exams, dialysis, laboratory
services, and express care.
Eastern Niagara Hospital previously sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. W.D.N.Y. Case No. 19-12342)
on November 7, 2019.
Eastern Niagara Hospital again sought Chapter 11 protection (Bankr.
W.D. N.Y. Case No. 20-10903) on July 8, 2020. In the petition
signed by Anne E. McCaffrey, president and CEO, the Debtor
disclosed between $10 million to $50 million in both assets and
liabilities.
Judge Michael J. Kaplan oversees the case. The Debtor tapped
Jeffrey Austin Dove, Esq., at Barclay Damon LLP, as its legal
counsel.
The U.S. Trustee for Region 2 appointed creditors to serve on the
official committee of unsecured creditors on November 22, 2019. The
committee is represented by Bond, Schoeneck & King, PLLC.
Michele McKay was appointed as health care ombudsman in the
Debtor's bankruptcy case.
On August 27, 2020, the Court appointed Hunt Commercial Real Estate
as a broker.
ELEVATE TEXTILES: S&P Alters Outlook to Pos., Affirms 'CCC+' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook to positive from negative
and affirmed all its ratings on North Carolina-based textile
manufacturer Elevate Textiles Inc., including its 'CCC+' issuer
credit rating.
S&P said, "We believe the company has adequate liquidity with $52
million of cash on the balance sheet and $75 million of
availability under its $125 million asset-backed lending (ABL)
facility.
"The positive outlook reflects the possibility of an upgrade in the
next 12 months, if the economy and consumer demand for apparel
continues to recover and the company's credit metrics continue to
strengthen – such that we no longer consider its capital
structure to be unsustainable. Under our base case forecast,
leverage falls below 8.0x by year-end 2021.
"Elevate weathered the COVID-19 pandemic better than we had
expected, and we now expect leverage to improve to the high-7x area
by the end of 2021. We expect the company to return to growth in
2021, as it laps the first half of 2020 when its manufacturing
facilities were idled for several weeks due to the stay-at-home
orders and order cancellations stemming from the pandemic. Despite
this, the company's 2020 performance was better than we had
expected because of its ability to service the personal protective
equipment (PPE) markets from its medical and barrier fabric
facilities, which are high-margin products. As a result, the
company ended 2020 with leverage of about 9x compared to our
previous expectation of low double-digits. We forecast gross margin
to be slightly better in 2021 as higher plant utilization rates are
partially offset by increasing rising input costs and unfavorable
product mix impact as PPE products demand will be lower in 2021. As
a result, we now project the company to end the year with leverage
in the high-7x area.
"Elevate's liquidity position is adequate despite our expectation
for marginally negative free operating cash flow generation in
2021. Elevate generated $28 million of free operating cash flow in
2020, has $52 million of cash on the balance sheet, and has $75
million of availability under its $125 million ABL facility. This
lessens the risk that the company would need to borrow to cover its
mandatory amortization and interest payments. The company's debt
trading levels have also improved from 65 cents on the dollar at
the onset of the pandemic to 94 cents on the dollar on the
first-lien term loan. The second-lien term loan is still trading at
distressed levels of around 65 cents on the dollar, but given the
company's current cash position we view the risk of a debt buyback
or a balance sheet restructuring as less likely.
"The company's free operating cash flow generation in 2020 was
largely the result of the temporary suspension of capital
expenditures (capex). We estimate capex will increase to $36
million in the next 12-24 months (from $24 million in 2020) as the
company needs to continue to invest its manufacturing facilities to
adapt to the ever-changing supply chain and competitive environment
in the textile industry. We estimate break-even to modestly
negative free operating cash flow because of the higher capex
assumptions."
Textile demand is currently strong, but recovery of consumer demand
would likely be uneven. The company's manufacturing facilities are
running close to full capacity, led by its fabric division, as
denim demands are returning. Key industry participants are
projecting demand will likely return to pre-pandemic levels by the
second half of 2021, and Elevate is seeing order volumes rise at a
rate that supports this expectation, which should help with
improving capacity utilization and operating margins. Although
order volumes look healthy at this time, the company does have a
history of underperformance when consumer demands are uncertain
(for example, the volatilities during 2019's China tariffs). This
could result in the company underperforming S&P's base-case
forecast if it takes longer to contain COVID-19.
S&P said, "Volatility in input costs could put additional strain on
the company's margins. Although the company has improved its input
cost pass-through measures in the last 12 months, we do expect some
input cost pressures in 2021 as freight and cotton costs are
increasing due to congested freight lanes and geopolitical
uncertainty in cotton productions. In addition, we believe the
company's longer lead time and its need to procure raw materials
months ahead of production will continue to add volatility in its
margins.
"The positive outlook reflects the possibility of an upgrade in the
next 12 months if the economy and consumer demand for apparel
continues to recover and the company's credit metrics continue to
improve – such that we no longer consider its capital structure
to be unsustainable. Under our base case forecast, leverage falls
below 8.0x by year-end 2021."
S&P could upgrade the company if the company's adjusted leverage
improves to the mid-7x area. This could occur if:
-- Elevate does not pursue more aggressive financial policies.
-- Textile demand remains healthy, aiding the company's recovery
in revenue and profit growth for the next 12 months.
-- The company maintains its operating margins by efficiently
running its operations and effectively managing input cost
pressures, despite anticipated unfavorable product mix shifts.
-- It manages its capex projects prudently and does not generate
meaningfully negative free operating cash flow.
S&P could take a negative rating action if:
-- There is a likelihood of a distressed exchange, such as
repurchasing debt at below par.
-- The company underperforms S&P's expectations from weaker
consumer demand, its inability to pass-through input cost
pressures, or an unexpected disruption in its facilities. This
would likely cause leverage to spike and the company's liquidity
position to weaken.
ELI & ALI: Hearing Today on Cash Collateral Access Bid
------------------------------------------------------
Eli & Ali, LLC asks the U.S. Bankruptcy Court for the Eastern
District of New York for authority to use cash collateral on an
interim basis and provide adequate protection in accordance with
the proposed budget. A telephonic hearing to consider approval of
the Debtor's request is scheduled for April 14 at 10:00 a.m. before
the Honorable Judge Judge Mazer-Marino.
The Debtor seeks to use $70,000 in cash collateral through April
17, 2021 for reasonable, necessary and foreseeable expenses to be
incurred in the ordinary course of operating its business.
The Debtor's chapter 11 filing was caused by a myriad of factors
coming together in a perfect storm of unbearable financial impact
including depressed sales caused by the the Covid pandemic and
litigation with a former partner.
The Debtor borrowed from several unconventional online lenders such
as On Deck Capital and Kabbage with extraordinarily steep interest
charges. The unconventional funding sources require daily and
weekly repayment schedules that exacerbated the Debtor's cash flow
shortage and ultimately, combined with the other negative factors,
choked the Debtor's operations.
The Debtor intends to utilize the bankruptcy process in order to
recover sales lost to Covid shut downs, stabilize its cash flow,
and consider filing adversary proceedings against its
unconventional funding sources for a determination on the legality
of the loans. Meanwhile, the protections of the Bankruptcy Court
will give the Debtor the protections and breathing room it needs to
stabilize its operations, work on increasing its revenues and its
operating cash while hopefully restructuring its debt.
The Debtor has numerous secured and alleged secured creditors. They
break down into two categories. Those that are conventional bank
lenders with apparent properly perfected liens and the second being
a group of alleged secured creditors that for different reasons are
apparently not properly perfected or improper.
The creditors whose liens are not disputed are:
A) Capital One -- which provided a line of credit and holds a
blanket lien on all of the Debtor's assets. As of the filing date,
Capital One was owed approximately $559,000.
B) TD Bank -- which provided a line of credit secured by a
subordinate blanket lien on all of the Debtor's assets. As of the
filing date, TD Bank was owed approximately $150,000.
C) NMHG Fund Services -- an equipment finance company which
financed the purchase of a "Hilo", Auto Wrapper and Cooler and
believes the outstanding balance for this debt is approximately
$22,322. The Debtor believes further it is only partially secured
by a lien on the equipment financed by NMIIG.
D) The Small Business Administration -- which provided the
Debtor with Payroll Protection Program loans. The SBA has a UCC
filing statement on file but is subordinate to Capital One, TD Bank
and NMHG and therefore the Debtor believes they are wholly
unsecured. Additionally, the Debtor believes the loans will be
forgiven under the terms of the PPP program.
The Debtor's schedules indicate assets of $270,150.
On Deck Capital and Kabbage are alleged to have secured claims and
filed UCCs, but the Debtor disputes the validity and perfection on
these alleged liens.
Each of these creditors are non-conventional internet lenders which
upon information and belief allege they purchased future
unspecified invoices at a "discount" and require weekly or monthly
payments until the purchased invoice including substantial fees and
interest is paid.
As adequate protection, the Debtor proposes to pay Capital One
monthly adequate protection on the value of the collateral securing
its lien in the amount of $450.00 per month. The Debtor does not
propose, at this time, any other adequate protection payments to
the other wholly unsecured creditors.
The Debtor will also grant Capital One Creditor a replacement lien
in all of the Debtor's prepetition and post petition assets and
proceeds, including the cash collateral and the proceeds of the
foregoing, to the extent that they had valid, legal and enforceable
security interests in said pre-petition assets on the Filing Date
and in the continuing order of priority that existed as of the
Filing Date.
A copy of the motion is available for free at
https://bit.ly/3sjarjz from PacerMonitor.com.
About Eli & Ali, LLC
Eli & Ali, LLC is a merchant wholesaler of farm product raw
materials. It sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. N.Y. Case No. 21-40920) on April 7,
2021. In the petition signed by Jeffrey Ornstein, managing member,
the Debtor disclosed $270,150 in assets and $1,427,375 in
liabilities.
Judge Jil Mazer-Marino oversees the case.
Heath S. Berger, Esq. at BERGER, FISCHOFF, SHUMER, WEXLER &
GOODMAN, LLP is the Debtor's counsel.
ENTERTAINMENT CINEMAS: Gets OK to Tap HLB as Management Consultant
------------------------------------------------------------------
Entertainment Cinemas Lebanon, LLC received approval from the U.S.
Bankruptcy Court for the District of New Hampshire to employ Harold
L. Blank, a theatre management consultant doing business as HLB
Entertainment.
Mr. Blank will render these services:
(a) prepare, file and process the Debtor's application for a
Save Our Stages or Shuttered Venues Grant;
(b) prepare the plan for making the renovations to the theatre
necessary to increase revenue beyond the last year;
(c) prepare such business and financial documents, exhibits
and testimony as may be needed during the pendency of the Debtor's
Chapter 11 case; and
(d) provide such other consulting services that may be needed
by the Debtor from time to time.
The consultant will be paid a fee of $20,000 annually. His hourly
fee is $30.
Mr. Blank disclosed in a court filing that he is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The consultant can be reached at:
Harold L. Blank
HLB Entertainment
23 Greystone Road
Nahant, MA 01908
Telephone: (617) 413-2922
About Entertainment Cinemas Lebanon
Entertainment Cinemas Lebanon, LLC filed a Chapter 11 bankruptcy
petition (Bankr. D.N.H. Case No. 21-10143) on March 12, 2021,
disclosing under $1 million in both assets and liabilities. The
Debtor tapped William S. Gannon PLLC as counsel and Harold L. Blank
as theatre management consultant.
EVERGREEN GARDENS: Gets OK to Hire Weil Gotshal as Legal Counsel
----------------------------------------------------------------
Evergreen Gardens Mezz, LLC received approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Weil, Gotshal & Manges LLP as its legal counsel.
Weil will perform these legal services:
(a) take all necessary action to protect and preserve the
Debtors' estates;
(b) prepare legal papers;
(c) take all necessary actions in connection with the
administration of the Debtors' estates including the prepration of
a Chapter 11 plan and related documents;
(d) take all necessary actions in connection with the sale of
the Debtors' assets pursuant to Section 363 of the Bankruptcy Code;
and
(e) perform other legal services necessary to prosecute the
Debtor's Chapter 11 case.
The firm's customary hourly rates are as follows:
Partners and Counsel $1,150 - $1,795
Associates $630 - $1,100
Paraprofessionals $260 - $460
In addition, Weil will seek reimbursement for out-of-pocket
expenses incurred.
Matthew Goren, Esq., a member of Weil, disclosed in court filings
that his firm is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code.
Mr. Goren also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the Revised U.S. Trustee Guidelines:
-- Weil has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of Weil's professionals included in the engagement
vary their rate based on the geographic location of the bankruptcy
case;
-- Weil was formally engaged by the Debtor on Dec. 29, 2020.
In December 2020, Weil's hourly rates were $1,100 to $1,695 for
members and counsel, $595 to $1,050 for associates, and $250 to
$435 for paraprofessionals. In January 2021, Weil adjusted its
standard billing rates for its professionals in the normal course
to $1,150 to $1,795 for members and counsel, $630 to $1,100 for
associates, and $260 to $460 for paraprofessionals. However, Weil's
billing rates and material financial terms with respect to this
matter have not changed post-petition.
-- Weil is developing a prospective budget and staffing plan
for the Debtor's case.
The firm can be reached through:
Matthew P. Goren, Esq.
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153-0119
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
Email: matthew.goren@weil.com
About Evergreen Gardens
Evergreen Gardens Mezz LLC focuses on the development,
construction, acquisition, leasing and management of residential
and commercial income-producing properties in Brooklyn, N.Y. It
owns part of the 900-unit Denizen apartment complex, a millennial
haven in Bushwick, Brooklyn, developed on the former site of the
Rheingold Brewery.
Evergreen Gardens is part of All Year Management, a New York-based
real estate development firm, which has owned, managed and
developed dozens in real estate since its founding.
Evergreen Gardens sought Chapter 11 protection (Bankr. S.D.N.Y.
Case No. 21-10335) on Feb. 22, 2021. The Debtor estimated assets
and debt of $50 million to $100 million as of the bankruptcy
filing. The Hon. Martin Glenn is the case judge. Weil, Gotshal &
Manges LLP, led by Gary T. Holtzer, and Matthew P. Goren, is the
Debtor's legal counsel.
FIELDWOOD ENERGY: Davis Polk, Haynes 2nd Update on Secured Lenders
------------------------------------------------------------------
In the Chapter 11 cases of Fieldwood Energy LLC, et al., the law
firms of Davis Polk & Wardwell LLP and Haynes and Boone, LLP
submitted a second amended joint verified statement under Rule 2019
of the Federal Rules of Bankruptcy Procedure, to disclose an
updated list of Ad Hoc Group of Secured Lenders and their
holdings.
The Ad Hoc Group of Secured Lenders formed by certain lenders under
(i) that certain Amended and Restated First Lien Term Loan
Agreement, dated as of April 11, 2018, among Fieldwood Energy Inc.,
Fieldwood, as the borrower, the lenders party thereto and Cantor
Fitzgerald Securities, as administrative agent and collateral agent
and/or (ii) that certain Amended and Restated Second Lien Term Loan
Agreement, dated as of April 11, 2018, among Holdings, Fieldwood,
as the borrower, the lenders party thereto and Cortland Capital
Market Services LLC, as administrative agent and collateral agent,
some Members of which also committed to provide a superpriority,
secured debtor-in-possession credit facility pursuant to that
certain Senior Secured Superpriority Debtor-In-Possession Term Loan
Credit Agreement, dated as of August 24, 2020 among Holdings,
Fieldwood, as the borrower, the lenders party thereto and Cantor
Fitzgerald Securities, as administrative agent and collateral
agent.
In or around March 2020, the Ad Hoc Group of Secured Lenders
engaged Davis Polk to represent it in connection with the Members'
holdings under the Prepetition FLTL Credit Agreement and
Prepetition SLTL Credit Agreement. In May 2020, the Ad Hoc Group of
Secured Lenders engaged Haynes and Boone to act as co-counsel in
the Chapter 11 Cases.
Davis Polk represents only the Ad Hoc Group of Secured Lenders. As
of the date of this Second Amended Statement, Haynes and Boone
represents the Ad Hoc Group of Secured Lenders and the DIP Agent.
Other than Haynes and Boone's representation of the DIP Agent,
Counsel does not represent or purport to represent any entities
other than the Ad Hoc Group of Secured Lenders in connection with
the Chapter 11 Cases. In addition, the Ad Hoc Group of Secured
Lenders does not claim or purport to represent any other entity and
undertakes no duties or obligations to any entity.
As of April 8, 2021, members of the Ad Hoc Group of Secured Lenders
and their disclosable economic interests are:
AVENUE CAPITAL MANAGEMENT II, LP
11 W 42nd St.
New York, NY 10036
* $126,989,336.00 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $1,236,505.00 in aggregate principal amount of loans and
commitments under the DIP Credit Agreement
BANK OF AMERICA, N.A.
900 West Trade St.
Charlotte, NC 28202
* $33,338,008.00 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $15,672,070.00 in aggregate principal amount of loans under the
Prepetition SLTL Credit Agreement
BANK OF AMERICA, SECURITIES, INC
900 West Trade St.
Charlotte, NC 28202
* 257,906 shares of Holdings stock
CIFC ASSET MANAGEMENT LLC
875 3rd Avenue 24th Floor
New York, NY 10022
* $29,014,126.86 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $13,049,999.99 in aggregate principal amount of loans under the
Prepetition SLTL Credit Agreement
COHANZICK MANAGEMENT, LLC
427 Bedford Road Suite 230
Pleasantville, NY 10570
* $22,327,000.00 in aggregate principal amount of loans under the
First Lien Credit Agreement
* $8,739,682.00 in aggregate principal amount of DIP backstop
commitments under the DIP Credit Agreement
EATON VANCE MANAGEMENT/BOSTON MANAGEMENT AND RESEARCH
2 International Place 9th Floor
Boston, MA 02110
* $84,707,237.40 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $12,514,045.66 in aggregate principal amount of DIP backstop
commitments under the DIP Credit Agreement
* 589,166 shares of Holdings stock
FRANKLIN ADVISERS, INC.
1 Franklin Parkway Building 970, 1st Floor
San Mateo, CA 94403
* $184,985,251.67 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $17,373,632.51 in aggregate principal amount of DIP backstop
commitments under the DIP Credit Agreement
INVESCO SENIOR SECURED MANAGEMENT, INC.
1166 Avenue of the Americas 26th Floor
New York, NY 10036
* $294,343,593.32 in aggregate principal amount of loans under
the Prepetition FLTL Credit Agreement
* $65,657,422.55 in aggregate principal amount of loans under the
Prepetition SLTL Credit Agreement
* $33,763.156.18 in aggregate principal amount of loans and
commitments under the DIP Credit Agreement
* 1,103,940 shares of Holdings stock
NUVEEN ASSET MANAGEMENT, LLC
555 California Street Suite 3100
San Francisco, CA
* $129,596,413.59 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $51,887,452.40 in aggregate principal amount of loans under the
Prepetition SLTL Credit Agreement
* $19,135,972.10 in aggregate principal amount of loans and
commitments under the DIP Credit Agreement
* 263,272 shares of Holdings stock
SI CAPITAL COMMERCIAL FINANCE, LLC
38955 Hills Tech Drive
Farmington Hills, MI 48331
* $32,203,593.61 in aggregate principal amount of loans under the
Prepetition FLTL Credit Agreement
* $3,839,384.43 in aggregate principal amount of DIP backstop
commitments under the DIP Credit Agreement
Counsel for the Ad Hoc Group of Secured Lenders can be reached at:
DAVIS POLK & WARDWELL LLP
Damian S. Schaible, Esq.
Natasha Tsiouris, Esq.
Josh Sturm, Esq.
450 Lexington Avenue
New York, NY 10017
Telephone: (212) 450-4000
Facsimile: (212) 701-5800
Email: damian.schaible@davispolk.com
natasha.tsiouris@davispolk.com
joshua.sturm@davispolk.com
- and -
HAYNES AND BOONE, LLP
Charles A. Beckham, Jr., Esq.
David Trausch, Esq.
1221 McKinney Street, Suite 4000
Houston, TX 77010
Telephone: (713) 547-2000
Facsimile: (713) 547-2600
Email: charles.beckham@haynesboone.com
david.trausch@haynesboone.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3mHdCA8
About Fieldwood Energy
Fieldwood Energy LLC -- http://www.fieldwoodenergy.com/-- is a
portfolio company of Riverstone Holdings focused on acquiring and
developing conventional assets, primarily in the Gulf of Mexico
region. It is the largest operator in the Gulf of Mexico owning an
interest in approximately 500 leases covering over two million
gross acres with 1,000 wells and 750 employees.
Fieldwood Energy and its 13 affiliates previously sought Chapter 11
protection (Bankr. S.D. Texas Lead Case No. 18-30648) on Feb. 15,
2018, with a prepackaged plan that would deleverage $3.286 billion
of funded by $1.626 billion.
On Aug. 3, 2020, Fieldwood Energy and its 13 affiliates again filed
voluntary Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No.
20-33948). Mike Dane, senior vice president, and chief financial
officer signed the petitions. At the time of the filing, the
Debtors disclosed $1 billion to $10 billion in both assets and
liabilities.
Judge David R. Jones oversees the cases.
The Debtors have tapped Weil, Gotshal & Manges LLP as their legal
counsel, Houlihan Lokey Capital, Inc. as an investment banker, and
AlixPartners, LLP as financial advisor. Prime Clerk LLC is the
claims, noticing, and solicitation agent.
The first-lien group has employed O'Melveny & Myers LLP as its
legal counsel and Houlihan Lokey Capital, Inc., as its financial
advisor.
The RBL lenders have employed Willkie Farr & Gallagher LLP as their
legal counsel and RPA Advisors, LLC as their financial advisor.
The cross-holder group has tapped Davis Polk & Wardwell LLP as its
legal counsel and PJT Partners LP as its financial advisor.
The committee of unsecured creditors tapped Stroock & Stroock &
Lavan, LLP, as counsel, Cole Schotz P.C., as co-counsel, and Conway
MacKenzie, LLC as financial advisor.
FIELDWOOD ENERGY: Fine-Tunes STL & Committee-Backed Plan
--------------------------------------------------------
Fieldwood Energy, et al., on April 9, 2021, filed a Fourth Amended
Plan and a corresponding Disclosure Statement to further fine-tune
their plan documents.
The hearing to consider approval of the Disclosure Statement is
scheduled for April 14, 2021, at 2:30 p.m. (prevailing Central
Time) before the Honorable Marvin Isgur, United States Bankruptcy
Judge, United States Bankruptcy Court for the Southern District of
Texas, Courtroom 404, 515 Rusk Street, Houston, Texas 77002.
The Debtors have proposed a June 9, 2021 confirmation hearing on
the Plan, and a June 2 deadline for confirmation objections and
voting.
The Plan is supported by several of the Debtors' key stakeholders,
including:
* the DIP Lenders,
* the Prepetition FLTL Lenders holding 87% of the FLTL Claims,
* the Prepetition SLTL Lenders holding 88.71% of the SLTL
Claims,
* the Prepetition FLFO Lenders holding 100% of the FLFO Claims,
* the Creditors' Committee,
* Apache Corporation, the predecessor in interest for the vast
majority of the Debtors' Shelf Assets, and
* Chevron U.S.A. Inc.("CUSA"), the predecessor in interest for
FWE properties representing 7% of the Debtors' operated P&A
Obligations.
The Creditors' Committee strongly recommends that all holders of
General Unsecured Claims vote to accept the Plan, and that all
holders of Unsecured Trade Claims elect for their claims to be
treated as Unsecured Trade Claims, execute Trade Agreements, and
vote to accept the Plan.
Committee Settlement
On March 9, 2021, the Debtors, together with the Consenting
Creditors, reached an agreement in principle with the Creditors'
Committee. That agreement is reflected in the Plan and provides,
among other things, that:
* An unsecured creditor that is a third-party provider of goods
or services to the Debtors and holds a claim arising from the
provision of such goods and services -- a "Trade Creditor" -- may
elect to have its claim treated as an Unsecured Trade Claim;
* Holders of Unsecured Trade Claims will agree (i) to enter
into a Trade Agreement as defined in the Plan on trade terms that
are no less favorable than the terms provided to the Debtors prior
to the Petition Date, and (ii) to waive any and all liens against
the Debtors, their assets and any co-owned assets, or any other
affiliated person or entity, including any co-working interest
owner of the Debtors, or any such person's or entity's respective
assets or property (real or personal), regardless of the statute or
other legal authority upon which the lien is asserted, held or
asserted by the Trade Creditor relating to the Unsecured Trade
Claim;
* Holders of Allowed Unsecured Trade Claims in Class 6A that
have executed Trade Agreements will receive Cash in the aggregate
amount of the lesser of (i) $8 million and (ii) 14% of the Allowed
Amount of Allowed Unsecured Trade Claims.
* Holders of Allowed General Unsecured Claims in Class 6B will
receive their Pro Rata Share of (i) 8-year warrants for 3.5% of the
New Equity Interests -- calculated on a fully diluted basis giving
effect to the New Equity Interests to be issued pursuant to Section
4.4(a)(i) of the Plan, the New Equity Interests issuable upon the
exercise of the Subscription Rights, the Backstop Commitment
Premium Equity Interests, and the New Equity Interests issuable
upon the exercise of the New Money Warrants and SLTL Tranche 1
Warrants, but excluding the effect of any New Equity Interests
issuable in connection with the Management Incentive Plan -- with a
strike price set at an equity value equal to $1,321,000,000, the
terms of which shall be set forth in the GUC Warrant Agreement;
provided, that if the SLTL Tranche 2 Warrants are exercised, the
GUC Warrants shall be subject to adjustment or true-up as necessary
to retain such percentage after giving effect to the exercise of
the SLTL Tranche 2 Warrants -- GUC Warrants -- and (ii) any
distributable value of the Post-Effective Date Debtors and FWE I
after satisfaction of (x) Allowed Administrative Expense Claims,
Allowed DIP Claims, Allowed Postpetition Hedge Claims, Allowed
Priority Tax Claims, Allowed Priority Non-Tax Claims, Allowed Other
Secured Claims, Allowed FLFO Claims, all Cure Amounts and (y) all
fees, expenses, costs and other amounts pursuant to the Plan and
incurred by the Post-Effective Date Debtors in connection with
post-Effective Date operations and wind-down;
* the GUC Warrants will be held by FWE Parent for distribution
in accordance with the Plan. In addition, to the extent all of the
Cash distributable to holders of Allowed Unsecured Trade Claims is
not distributed on or about the Effective Date, any undistributed
Cash will be held by FWE Parent for future distribution in
accordance with the Plan;
* a person or entity selected by the Creditors' Committee,
subject to the consent of the Debtors, Required DIP Lenders, and
Requisite FLTL Lenders, with such consent not to be unreasonably
withheld, will be appointed as Plan Administrator and the Plan
Administrator Expense Reserve shall be funded with $8 million in
Cash;
* FLTL Deficiency Claims shall not receive any distribution or
recovery under the Plan;
* on the Effective Date, the Post-Effective Date Debtors shall
be deemed to have released all preference actions pursuant to
section 547 of the Bankruptcy Code against the holders of Unsecured
Trade Claims and General Unsecured Claims -- in each case, solely
in their capacity as holders of Unsecured Trade Claims and General
Unsecured Claims, as applicable;
* the Creditors' Committee will waive, as of the Effective
Date, its right as provided in the DIP Order to assert any
Challenge to certain of the Lenders' asserted liens;
* the Creditors' Committee will support and not object to the
Plan; and
* the Creditors' Committee will submit a letter to holders in
Classes 6A and 6B of General Unsecured Claims recommending that
such holders vote to accept the Plan.
STL Settlement
The Debtors, the Consenting Creditors, and the Ad Hoc Group of SLTL
Lenders, and their respective advisors, engaged in vigorous,
arm's-length negotiations to resolve all of their respective issues
on a consensual basis. The negotiations were a success, and on
March 16, 2021, the Debtors, together with the Consenting
Creditors, reached an agreement in principle with the Ad Hoc Group
of SLTL Lenders. In particular, the SLTL Settlement improves
recoveries for SLTL Claims under the Plan, compared to the Initial
Plan. That agreement is reflected in the Plan and provides, among
other things, that:
* Holders of Allowed SLTL Claims will be separately classified
from General Unsecured Claims and will receive their Pro Rata Share
of (i) 8-year warrants for 25% of the New Equity Interests, with a
strike price set at a $1,321 million equity value, with no
Black-Scholes protections -- SLTL Tranche 1 Warrants; (ii) 8-year
warrants for 32.5% of the New Equity Interests, with a strike price
at $1,585 million equity value, with no Black-Scholes protections
-- SLTL Tranche 2 Warrants; and (iii) subscription rights to
acquire New Equity Interests with an aggregate value equal to $20
million, issued at a 30% discount to the equity value of NewCo on
the Effective Date;
* The Ad Hoc Group of SLTL Lenders will backstop the
incremental $20 million equity rights offering, with an 8% backstop
fee, which is payable in equity at a 30% discount to the equity
value of NewCo on the Effective Date; and
* The Debtors will pay the reasonable professional fees of
Kasowitz Benson Torres LLP.
As a result, the Ad Hoc Group of SLTL Lenders and the Creditors'
Committee now support the Plan.
Restructuring Transactions
Consistent with the RSA, the Plan provides for, among other things,
the following transactions to occur on the Effective Date for the
below categories of assets and related liabilities:
-- Specified Deepwater Assets and Shelf Assets: The Debtors will
consummate the sale of certain of their assets, including specified
Deepwater Assets and Shelf Assets -- Purchased Oil & Gas Lease
Interests -- to a new entity -- Credit Bid Purchaser -- formed at
the direction of the Consenting FLTL Lenders for aggregate
consideration of approximately $1.03 billion, consisting of (i) a
credit bid of the Allowed FLTL Claims up to the FLTL Claims Allowed
Amount, (ii) cash in the amount up to approximately $105 million
(which may be increased to $125 million in the sole and absolute
discretion of the Buyer)5, (iii) the GUC Warrants, (iv) the SLTL
Warrants, and (v) the assumption of certain liabilities set forth
in the Credit Bid Purchase Agreement, including the assumption of
the Allowed FLFO Claims remaining following distribution of the
FLFO Distribution Amount -- approximately $139 million of the FLFO
Claims Allowed Amount less the approximately $119 million of the
principal amount of the First Lien Exit Facility.
-- Legacy Apache Properties: After the consummation of the
Credit Bid Transaction, FWE will implement a divisive merger
pursuant to which FWE will be divided into Fieldwood Energy I LLC
and Fieldwood Energy III LLC. Through the divisive merger, FWE I
will be allocated and vested with certain assets FWE acquired from
Apache and related liabilities and obligations. FWE I will, among
other things, own, operate, plug and abandon, and decommission the
Legacy Apache Properties.
-- FWE III Properties: Through the divisive merger, FWE III will
be allocated and vested with all of FWE's assets other than the
Purchased Oil & Gas Lease Interests, Legacy Apache Properties and
Abandoned Properties. FWE III will, among other things, own,
operate, plug and abandon, and decommission the FWE III Properties
and related assets and liabilities.
-- FWE IV Properties: In accordance with an executed,
non-binding term sheet with CUSA, FWE will create a new entity,
Fieldwood Energy IV LLC, through a divisive merger and FWE IV will
be allocated and vested with certain interests in a portion of the
leases assigned previously to FWE by CUSA (and its predecessors and
affiliates), and with the platforms, wells, pipelines and equipment
(including production equipment) located on and attributable to the
CUSA interest in such leases, and any hydrocarbons produced from
such leases, if applicable.
-- Abandoned Properties: Immediately upon the occurrence of the
Effective Date, certain of the Debtors' assets will be abandoned
pursuant to sections 105(a) and 554(a) of the Bankruptcy Code. The
Debtors anticipate BSEE will issue orders compelling either all or
certain entities who are in the chain of title -- Predecessors --
and/or current co-working interest owners -- CIOs -- for each of
the Abandoned Properties to perform the P&A Obligations for each
respective property.
The Debtors have taken several steps to facilitate the safe and
orderly operational transfer of the Abandoned Properties currently
operated by the Debtors and are working to reach long-term
commercial agreements similar to the FWE I and FWE IV structures
with interested Predecessors for assuming operational control for
Abandoned Properties operated by the Debtors. The Debtors (i) have
dedicated about $6 million, in addition to amounts spent in the
ordinary course, on safety related repairs and improvements on the
Abandoned Properties and (ii) have provided Predecessors detailed
operational information on the Abandoned Properties. Additionally,
for any Predecessor with whom a consensual arrangement has not yet
been agreed to, Credit Bid Purchaser will offer a 90-day transition
period post-Effective Date during which Credit Bid Purchaser will
offer to manage at the requesting Predecessor's cost and on its
behalf any of the Abandoned Properties.
A black-lined copy of the Disclosure Statement dated April 9, 2021,
is available at https://bit.ly/3aaeath
About Fieldwood Energy
Fieldwood Energy -- https://www.fieldwoodenergy.com/ -- is a
portfolio company of Riverstone Holdings focused on acquiring and
developing conventional assets, primarily in the Gulf of Mexico
region. It is the largest operator in the Gulf of Mexico owning an
interest in approximately 500 leases covering over two million
gross acres with 1,000 wells and 750 employees.
Fieldwood Energy and its 13 affiliates previously sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 18-30648) on Feb. 15,
2018, with a prepackaged plan that would deleverage $3.286 billion
of funded by $1.626 billion.
On Aug. 3, 2020, Fieldwood Energy and its 13 affiliates again file
voluntary Chapter 11 petitions (Bankr. S.D. Tex. Lead Case No.
20-33948). Mike Dane, senior vice president and chief financial
officer, signed the petitions.
At the time of the filing, the Debtors disclosed $1 billion to $10
billion in both assets and liabilities.
Judge David R. Jones oversees the cases.
The Debtors tapped Weil, Gotshal & Manges LLP as their legal
counsel, Houlihan Lokey Capital, Inc. as investment banker, and
AlixPartners, LLP as financial advisor. Prime Clerk LLC is the
claims, noticing, and solicitation agent.
The first-lien group employed O'Melveny & Myers LLP as its legal
counsel and Houlihan Lokey Capital, Inc. as its financial advisor.
The RBL lenders employed Willkie Farr & Gallagher LLP as their
legal counsel and RPA Advisors, LLC as their financial advisor.
Meanwhile, the cross-holder group tapped Davis Polk & Wardwell LLP
and PJT Partners LP as its legal counsel and financial advisor,
respectively.
On Aug. 18, 2020, the Office of the U.S. Trustee appointed a
committee of unsecured creditors. Stroock & Stroock & Lavan, LLP
and Conway MacKenzie, LLC serve as the committee's legal counsel
and financial advisor, respectively.
FIRST QUANTUM: S&P Ups ICR to 'B' on Deleveraging, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings raised to 'B' from 'CCC+' its long-term issuer
credit and issue ratings on Canada-headquartered copper producer
First Quantum Minerals (FQM) and its senior unsecured bonds.
The stable outlook reflects that S&P expects FQM to generate
positive free operating cash flow (FOCF) while continuing to build
headroom under the rating in the next six-to-12 months.
The upgrade follows the strong rebound of copper prices in the past
six months and our expectation of further supportive prices in the
coming 12-18 months. Under our base case--factoring in copper
prices of $3.85 per pound (/lb) for the rest of 2021 and $3.62/lb
in 2022—S&P now expects FQM to post EBITDA of about $3.5 billion
in 2021 and $4.0 billion in 2022. This would translate into
cumulative FOCF (after capital expenditure [capex] and before
dividends) of up to about $2.8 billion, reducing overall reported
net debt by over $2 billion by the end of 2022. The rating action
is also supported by FQM's improved liquidity position and lower
capex needs after the bulk of the investment in the Cobre Panama
mine is complete.
How FQM will allocate FOCF after achieving its publicly stated
deleveraging target is crucial. As of Dec. 31, 2020, FQM reported
net debt of $7.4 billion (excluding the $1.5 billion Franco Nevada
streaming transaction for Cobre Panama capex) and net debt to
EBITDA of 3.5x. In comparison, FQM has been targeting a reported
debt reduction of $2 billion and reported net debt to EBITDA of
2.0x, which S&P now expects it to achieve during 2022.
On meeting these deleveraging milestones, FQM's management will
need to refresh its financial policy and FOCF allocation priorities
between growth and shareholder remuneration:
Dividends: S&P assumes the company's first step would be to
increase returns to about 15% of net income--which was the
percentage paid prior to the nominal dividend period--from the
current token amounts, with a further potential increase over time,
absent new capex projects.
Future growth: At this stage, the company hasn't committed to
additional mega projects post Cobre Panama. Potential large
projects, which the company could execute after 2023, include Taca
Taca in Argentina (copper production of up to 350 kilotons [kt])
and/or Haquira in Peru.
The stable outlook reflects that S&P expects FQM to generate
positive FOCF while continuing to build headroom under the rating
in the next six-to-12 months.
Under S&P's base case, it projects that in 2021, FQM will generate
S&P Global Ratings-adjusted EBITDA of about $3.5 billion (taking
into account copper prices of $3.85/lb for the rest of 2021),
translating into FOCF of about $1 billion and adjusted debt to
EBITDA of under 3x.
Upside scenario
An upgrade of FQM to 'B+' could be supported by the following:
-- Sufficient comfort that the company would achieve and sustain
adjusted debt to EBITDA below 2x. Under S&P's base case, the
company could be close to this threshold by end-2022;
-- Better visibility over the financial policy after reducing its
debt by $2 billion;
-- Adequate liquidity; and
-- No adverse changes in its ability to operate in Zambia,
including running its mines and the absence of foreign-exchange
controls.
Downside scenario
S&P said, "Given the strong copper prices we expect in the next
six-to-12 months, we do not envision pressure on our 'B' rating on
FQM.
"That said, we could consider a negative rating action if we saw
material risks to FQM's operations stemming from the environment in
Zambia, although this is not part of our base-case scenario. These
could materialize as restricted foreign exchange access for
non-financial entities (as reflected in our 'CCC-' transfer and
convertibility [T&C] assessment of Zambia), or other business
disruptions.
"We could also consider a negative rating action in the event of
issues regarding the enactment of Law 9, which was used to approve
the mining concession contract in Panama. Again, this is not our
base-case scenario."
FOGO DE CHAO: S&P Upgrades ICR to 'B-', Outlook Stable
------------------------------------------------------
S&P Global Ratings raised its ratings on U.S.-based churrascaria
(Brazilian steakhouse) restaurant operator Fogo de Chao Inc.,
including its issuer credit rating to 'B-' from 'CCC+'.
The stable outlook reflects that S&P believes Fogo has sufficient
liquidity to absorb near-term fluctuations in performance and that
credit metrics will recover meaningfully through fiscal 2021, with
year-end leverage in the mid-7x area.
S&P said, "We believe the worst impacts of the COVID-19 pandemic
are behind Fogo and recovery will accelerate throughout fiscal
2021, improving forecast leverage to the mid-7x area. We expect an
improving vaccination outlook and revised forecasts for U.S.
economic recovery (we now anticipate GDP growth of 6.5% in 2021)
will support Fogo's recovery. We believe consumers are beginning to
shift back toward in-restaurant dining after a seismic shift to
food-at-home. This should accelerate through the year and broadly
support spending at casual and upscale dining establishments. We
also note a portion of Fogo's sales are tied to conferences and
events, which we anticipate will remain mostly virtual until the
second half, weighting Fogo's recovery more heavily to this
period.
"We forecast sales recovery will accelerate through fiscal 2021,
leading to overall sales ending the year roughly 5%-10% below 2019
sales. EBITDA recovery will be moderately delayed. We anticipate
adjusted EBITDA margins will end the year roughly 200 basis points
below 2019 levels of about 17% and return there in fiscal 2022.
This leads to leverage in the mid-7x area in fiscal 2021, before
further improving toward pre-pandemic leverage of below 6x. We
expect the company to resume capital spending, primarily for new
units, resulting in roughly flat free operating cash flow (FOCF) in
2021." Still, some risk remains, particularly to the extent
coronavirus variants lead to mandated lockdowns or increased
operating restrictions. In addition, financial sponsor ownership by
Rhone Capital increases the risk of debt-financed actions.
Actions to bolster liquidity through the pandemic give the company
room to absorb near-term volatility. In the first quarter, Fogo
borrowed $35 million under the revolver, then an additional $32.5
million through an incremental term loan ($8.5 million of
availability remaining under the delayed draw facility). These
efforts generated sufficient liquidity to absorb early bumps from
the pandemic, including a $21 million cash burn in the first three
quarters of fiscal 2020. S&P said, "We believe liquidity is now
sufficient to fund operations over the next 12 months, even with
anticipated recovery volatility. We forecast Fogo will generate
roughly flat FOCF for 2021. We note additional borrowings on the
term loan will weigh on the capital structure and moderately delay
reduction to pre-COVID-19 leverage (about 5.7x as of December
2019). Furthermore, the company's cash flow revolver and
incremental term loan mature in 2023. We anticipate Fogo will
address these maturities before they come current on the balance
sheet."
Fogo faces heightened potential volatility given its single-brand
exposure, limited off-premise sales, and exposure to Brazil.Fogo
operates only one brand with limited scale in the highly
competitive casual dining industry. It is also heavily exposed to
protein cost fluctuations, labor costs, and other operating
expenses relative to peers with franchised locations. Its
off-premise sales (which includes to-go and delivery) remains
limited, less than 5% of total sales. Off-premise sales allowed
many restaurants to lessen the pandemic impact as consumers
socially distanced and avoided in-restaurant dining. State
government decisions to reopen in-restaurant dining lessens the
importance of this channel, but if lockdowns or restrictions recur,
S&P anticipates Fogo would underperform peers with more substantial
off-premise operations.
Fogo has six company-operated locations in Brazil (historically
about 10% of revenue), where performance has lagged. S&P
anticipates recovery in this region is unlikely at the same rate as
the U.S., creating a slight lag in Fogo's recovery.
The stable outlook reflects S&P's expectation for improving
performance trends, leading to leverage declining to the mid-7x
area by the end of fiscal 2021, with sufficient liquidity to
support operations and absorb modest volatility in performance.
S&P could lower the rating on Fogo if:
-- S&P views the capital structure as unsustainable. This could
occur if performance is meaningfully below its expectations,
potentially due to faltering recovery trends in the second half
because of COVID-19 variants leading to further restrictions and
lockdowns. Under this scenario S&P expects negative FOCF and
pressured liquidity; or
-- S&P believes the company would have difficulty addressing
upcoming maturities in its capital structure, including the
revolver and incremental term loan facility in 2023.
S&P could raise its rating on Fogo if:
-- Leverage declines under 6x because of improved performance and
S&P anticipates it will be sustained;
-- S&P expects the company will generate sufficient cash flows to
fully cover organic growth projects, limiting revolver draw for
this purpose; and
-- S&P does not anticipate the company will have difficulty
addressing upcoming maturities.
GL BRANDS: Unsec. Creditors to Recover 1.25% in Merida Sale Plan
----------------------------------------------------------------
GL Brands, Inc., formerly d/b/a Freedom Leaf, and
debtor-affiliates, filed on April 9, 2021, a First Amended Joint
Chapter 11 Plan of Reorganization and a corresponding Disclosure
Statement.
Under the Plan, the Debtors propose to sell the Assets, i.e. the
right to receive 100% of the new, to-be issued Equity Interests in
the reorganized Debtors on the Effective Date to the highest
bidder. The Debtors' existing Equity Interests would be canceled.
Merida Capital Partners III, LP, Merida Capital Partners III QP,
LP, and affiliates were named as the Stalking Horse Bidder for the
Debtors' Equity Interests.
The Assets will be sold to the Stalking Horse Bidder for $1,314,019
(through a combination of cash, forgiveness of existing secured
debt, and voluntary subordination of unsecured debt) without an
auction, if the Debtors do not receive, on April 16, 2021 by 5:00
p.m. (CDT), (i) at least one other bid that is higher and better
than the Stalking Horse Bid compliant with the bid qualifications,
and (ii) a bid deposit. Otherwise, the Debtors shall hold an
auction on April 21, 2021.
The proceeds of the sale will be used to:
(1) satisfy all secured indebtedness of the Debtors, pre-petition
and post-petition;
(2) satisfy all Administrative and Priority Claims;
(3) satisfy Secured Tax Claims; and
(4) fund pro-rata Distributions of the Holders of Allowed General
Unsecured Claims against each Debtor.
The Debtors estimate that the sale of the Assets to Merida for the
Stalking Horse Bid amount would support a distribution of
approximately 1.25% to Holders of Allowed General Unsecured Claims,
other that Merida affiliates, whose General Unsecured Claims would
not be paid. The sale of the Assets and confirmation of the Plan
will remove approximately $15,400,000 of debt from the Debtors'
balance sheet.
If Merida purchases the Assets, Merida entities shall subordinate
their approximately $6,400,000 in General Unsecured Claims to the
Holders of all other Allowed General Unsecured Claims. Otherwise,
the Merida entities' Allowed General Unsecured Claims will share
pro rata with other Allowed General Unsecured Claims. Merida has
indicated that if it purchases the Asset, the Debtors will be
converted to non-publicly traded companies on the Effective Date.
According to the Securities and Exchange Commission, GL Brands will
no longer be a publicly traded company on the Effective Date, no
matter who purchases the Assets.
If another bidder overbids Merida at the auction, Merida will
receive (i) a $25,000 break-up fee, to be paid by the Debtors as an
Administrative Claim, and (ii) a $50,000 minimum overbid increment,
in consideration for making the Stalking Horse Bid. An alternative
bid would need to exceed the value Stalking Horse Bid by at least
$75,000, i.e., at least $1,389,019.
If an auction does occur, proceeds of the auction will be
distributed as follows:
* first to repay DIP Loan, the Class 1 Pre-Existing Secured
Claim, the Break-Up Fee, if any, other Allowed Administrative
Claims not otherwise paid through the Debtors' DIP Loan or
available Cash.
* the remaining proceeds shall be divided among the Debtors in
proportion to their Allowed General Unsecured Claims. The
estimated allocation among the Debtors is: GL Brands 78.18%; The
Texas Wellness Center 13.88%; ECS Labs 5.29%; B & B Aesthetics Labs
1.03%; and Leafceuticals 1.61%. The Debtors shall use their
allocated share of the sale proceeds to make a pro-rata
distribution to the Holders of Allowed Unsecured Claims against the
particular Debtor. The pro-rata distribution shall be in full
satisfaction of such Claims.
The Debtors shall notify the Bankruptcy Court and
parties-in-interest of the results of the auction by April 26,
2021. In the event the Successful Bidder at the auction fails to
close the purchase of the Assets, the Successful Bidder's Bid
Deposit will be forfeited to the Debtors' Estates and used to
increase the distribution to the Class 3-7 creditors under the
Plan.
The scheduling hearing on the confirmation of the Plan is on May
20, 2021, at 2 p.m. (CDT).
Ballots, to be counted for voting purposes, must be received no
later than 5:30 p.m.(CDT) on May 14, 2021, by the Debtors'
counsel:
Robert A. Simon, Esq.
Whitaker Chalk Swindle & Schwartz, PLLC
301 Commerce Street, Suite 3500
Fort Worth, Texas 76102
Telephone: (817) 878-0543
Facsimile: (817) 878-0501
Email: rsimon@whitakerchalk.com
A copy of the First Amended Disclosure Statement is accessible at
tinyurl.com/h48jvjhp from PacerMonitor.com free of charge.
About GL Brands
GL Brands -- https://www.glbrands.com/ -- formerly d/b/a Freedom
Leaf, is a global hemp consumer packaged goods company engaged in
the development and sale of cannabis-derived wellness products.
Through its premier brands Green Lotus and Irie CBD, GL Brands
delivers a full portfolio of hemp-derived CBD products, including
tinctures, soft gels, gummies, sparkling beverages, vapes, flower
and topical segments to promote greater wellness and balance, in
the U.S. and throughout the world.
On Dec. 17, 2020, GL Brands, Inc. et al sought Chapter 11
protection (Bankr. N.D. Tex. Lead Case No. 20-43800). GL Brands
disclosed total assets of $100,000 to $500,000 and total
liabilities of $10 million to $50 million. The petition was signed
by CEO Carlos Frias.
Judge Edward L. Morris oversees the case.
The Debtors tapped Robert A. Simon, Esq., at Whitaker Chalk Swindle
and Schwartz, as bankruptcy counsel.
GREATER HOUSTON POOL: Taps Attorney Donald Wyatt as Legal Counsel
-----------------------------------------------------------------
Greater Houston Pool Management, Inc. received approval from the
U.S. Bankruptcy Court for the Southern District of Texas to hire
Attorney Donald Wyatt, PC as its legal counsel.
The Debtor requires legal assistance to fulfill its obligations
under U.S. bankruptcy laws and to avail itself of the rights and
remedies available to a debtor-in-possession, including the
formulation and confirmation of a Chapter 11 plan of reorganization
and the prosecution or defense of adversary proceedings.
The firm's standard rates range from $100 per hour for paralegals
and law clerks to $600 per hour for highly experienced shareholder
attorney.
The firm received a retainer in the amount of $15,000.
Attorney Donald Wyatt is a disinterested person within the
definition of Section 101 (14) of the Bankruptcy Code, according to
court filings.
The firm can be reached through:
Donald Wyatt, Esq.
Attorney Donald Wyatt, PC
26418 Oak Ridge Drive
The Woodlands, TX 77380
Tel: (281) 419-8733
Email: don.wyatt@wyattpc.com
About Greater Houston Pool Management
Greater Houston Pool Management, Inc. filed it voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Texas Case No. 21-31047) on March 21. 2021. Daniel McInnis,
president, signed the petition. At the time of the filing, the
Debtor disclosed $878,683 in total asset and $3,026,960 in total
liabilities. Judge Eduardo V. Rodriguez oversees the case.
Attorney Donald Wyatt, PC serves as the Debtor's legal counsel.
GREENSILL CAPITAL: U.S. Trustee Appoints New Committee Member
-------------------------------------------------------------
The U.S. Trustee for Region 2 appointed Griffith Williams, a
resident of River Forest, Ill., as new member of the official
committee of unsecured creditors in the Chapter 11 case of
Greensill Capital, Inc.
Meanwhile, Neil Hughes, a resident of Brooklyn, N.Y., is no longer
a member of the committee.
The committee is now composed of:
1. Rachelle Bower
330 West 56th Street
New York, NY 10019
E-mail: rbower1515@gmail.com
2. Margaret Stock
77 Park Avenue, Apartment 1515
Hoboken, NJ 07030
E-mail: margaretmstock@gmail.com
3. Griffith Williams
1448 Park Avenue
River Forest, IL 60305
E-mail: griff.williams@gmail.com
About Greensill Capital
Greensill Capital is an independent financial services firm and
principal investor group based in the United Kingdom and Australia.
It 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. Jill M. Frizzley,
director, signed the petition. In the petition, the Debtor listed
assets of between $10 million and $50 million and liabilities of
between $50 million and $100 million. The case is handled by Judge
Michael E. Wiles.
Togut, Segal & Segal LLP, led by Kyle J. Ortiz, is the Debtor's
counsel.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on April 7, 2021. The committee is represented
by George P. Angelich, Esq.
GREYLOCK CAPITAL: Court Dismisses Case After Creditors Deal
-----------------------------------------------------------
Leslie A. Pappas of Bloomberg Law reports that Greylock Capital
Associates LLC convinced a bankruptcy judge to dismiss its Chapter
11 case after it reached agreements with its two largest
creditors.
Monday's, April 12, 2021 dismissal allows Greylock Capital
Associates, the parent of hedge fund Greylock Capital Management
LLC, to sidestep a challenge from the Justice Department's
bankruptcy watchdog over its use of a bankruptcy process for small
businesses.
The company resolved the issues that precipitated the bankruptcy,
so there is no need for the case to continue, Judge Robert D. Drain
of the U.S. Bankruptcy Court for the Southern District of New York
said at a hearing.
About Greylock Capital
Greylock Capital Associates is a hedge fund known for making bets
on distressed debt and troubled sovereign bonds.
Greylock Capital Associates filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No.
21-22063) on Jan. 31, 2021. The petition was signed by David
Steltzer, chief financial officer. At the time of filing, the
Debtor estimated $1 million to $10 million in both assets and
liabilities. The Debtor is represented by Jeffery Chubak, Esq., at
Amini LLC.
GVS PORTFOLIO I B: Another Nate Paul Entity in Chapter 11
---------------------------------------------------------
GVS Portfolio I B, LLC, another entity owned by real estate
entrepreneur Nate Paul, has sought Chapter 11 protection.
GVS Portfolio I B, a privately owned chain of self-storage
facilities, filed a Chapter 11 petition (Bankr. D. Del. Case No.
21-10690) on April 12, 2021.
GVS Portfolio I B, which does business as Great Value Storage, owns
64 self-storage facilities as well as parking lots for cars, boats
and recreational vehicles, in 10 states.
Morrison Cohen LLP and Bayard, P.A., led by Neil B. Glassman, Esq.,
serve as counsel to GVS Portfolio.
Several entities affiliated with Paul's World Class Holdings have
sought bankruptcy protection in the Western District of Texas:
Case Name Case No. Date Filed
--------- -------- ----------
900 Cesar Chavez, LLC 19-11527 11/04/19
905 Cesar Chavez, LLC 19-11528 11/04/19
5th and Red River, LLC 19-11529 11/04/19
7400 South Congress, LLC 19-11530 11/04/19
Silicon Hills Campus, LLC 20-11042 01/07/20
Hirshfeld Moore, LLC 20-10251 02/03/20
WC 103 East Fifth, LLC 20-10252 02/03/20
WC 320 Congress, LLC 20-10253 02/03/20
WC 422 Congress, LLC 20-10254 02/03/20
WC 805-809 East Sixth, LLC 20-10255 02/03/20
WC 901 East Cesar Chavez, LLC 20-10256 02/03/20
WC 1212 East Sixth, LLC 20-10257 02/03/20
WC 9005 Mountain Ridge, LLC 20-10258 02/03/20
WC 2101 Ben White, LP 20-10182 02/04/20
WC 4th and Colorado, LP 20-10881 08/04/20
Nate Paul is the founder and CEO of World Class Capital Group, a
real estate investment firm. World Class has acquired a portfolio
of some of Austin's choicest parcels with ambitious plans to lease
or develop them. Paul took advantage of depressed values during
the recession to build an impressive real estate portfolio.
The Austin American-Stateman reported in December that since late
2019, lenders to Paul and World Class have attempted to foreclose
on a combined $258 million in what they say are overdue loans made
to more than 24 Texas-based real estate entities controlled by
Paul.
Paul has been able to forestall his lenders by filing for Chapter
11 bankruptcy protection on certain entities
But in the cases of 900 Cesar Chavez LLC, 905 Cesar Chavez LLC, 5th
and Red River LLC and 7400 South Congress LLC, owners of the
156-acre former 3M campus in Austin, Texas, the automatic stay in
bankruptcy that prevented foreclosure was lifted by the bankruptcy
court, enabling the lender to acquire the property.
According to Kens5.com, Nate Paul has been a central figure in the
criminal allegations against Texas Attorney General Ken Paxton. In
early October, seven senior aides filed a criminal complaint
against Paxton, claiming abuse of power, bribery and more linked to
his dealings with Paul.
GVS PORTFOLIO: Great Value Hits Chapter 11 to Avert Foreclosure
---------------------------------------------------------------
Soma Biswas of The Wall Street Journal reports that Great Value
Storage filed for Chapter 11 bankruptcy to block foreclosure.
The company lost a bid last March 2021 to stop the sale of
properties it said were damaged in the February storm in Texas and
would be undervalued in a sale.
Great Value Storage, a privately-owned chain of self-storage
facilities, filed for bankruptcy after a New York state court last
month put an end to the company's effort since 2019 to stop a
foreclosure sale by a lender.
About GVS Portfolio
GVS Portfolio I B, LLC, is a privately-owned chain of self-storage
facilities. GVS Portfolio I B, which does business as Great Value
Storage, owns 64 self-storage facilities as well as parking lots
for cars, boats and recreational vehicles, in 10 states.
GVS Portfolio I B is another entity owned by real estate
entrepreneur Nate Paul. Several entities affiliated with Paul's
World Class Holdings have sought bankruptcy protection in the
Western District of Texas. The bankrupt entities own several
parcels of land in Austin, Texas.
GVS Portfolio I B filed a Chapter 11 petition (Bankr. D. Del. Case
No. 21-10690) on April 12, 2021. Morrison Cohen LLP and Bayard,
P.A., led by Neil B. Glassman, serve as counsel to GVS Portfolio.
GVS PORTFOLIO: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: GVS Portfolio I B, LLC
814 Lavaca Street
Austin, TX 78701
Chapter 11 Petition Date: April 12, 2021
Court: United States Bankruptcy Court
District of Delaware
Case No.: 21-10690
Judge: Hon. Christopher S. Sontchi
Debtor's Counsel: Neil B. Glassman, Esq.
BAYARD, P.A.
600 N. King Street, Suite 400
Wilmington, DE 19801
Tel: 302-655-5000
E-mail: nglassman@bayardlaw.com
- and -
MORRISON COHEN LLP
Estimated Assets: $100 million to $500 million
Estimated Liabilities: $50 million to $100 million
The petition was signed by Natin Paul, authorized agent.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/TLNRUFA/GVS_Portfolio_I_B_LLC__debke-21-10690__0001.0.pdf?mcid=tGE4TAMA
HANKEY O'ROURKE: May 24 Amended Plan Confirmation Hearing Set
-------------------------------------------------------------
On March 17, 2021, the U.S. Bankruptcy Court for the District of
Massachusetts conducted a hearing to consider the motion of debtor
Hankey O'Rourke Enterprises for approval of its Disclosure
Statement and the Debtor having made certain changes to the
Disclosure Statement and Plan of Reorganization.
On April 8, 2021, Judge Elizabeth D. Katz approved the Third
Amended Disclosure Statement and ordered that:
* May 17, 2021, is fixed as the last day for all parties
entitled to vote on the Amended Plan to deliver their ballots.
* May 24, 2021, at 10:00 a.m. is the hearing on confirmation
of the Third Amended Plan.
* May 17, 2021, is fixed as the last day to file any objection
to confirmation of the Third Amended Plan.
A full-text copy of the order dated April 8, 2021, is available at
https://bit.ly/32n8Pe5 from PacerMonitor.com at no charge.
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
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.
HEARTLAND DENTAL: Moody's Raises CFR to B3 on Improved Liquidity
----------------------------------------------------------------
Moody's Investors Service upgraded the ratings of HEARTLAND DENTAL,
LLC, including the Corporate Family Rating to B3 from Caa1, the
Probability of Default Rating to B3-PD from Caa1-PD, the first lien
senior secured debt rating to B2 from B3, and the senior unsecured
notes to Caa2 from Caa3. The outlook is stable.
The upgrade reflects Heartland's return of patient volumes to near
pre-pandemic levels, and reduced debt/EBITDA to around 7.0x for the
twelve months ended December 31, 2020. At the same time, Heartland
has improved liquidity with $245 million cash balance as of
December 31, 2020, and an undrawn $135 million revolver.
Heartland's liquidity was bolstered from CARES Act funding,
reduction in variable costs, a $200 million add-on term loan and a
$122 million dollar equity raise in August 2020. Moody's considers
the equity raise, which came from both owner dentists and the
private equity sponsor, to be a positive governance factor.
The stable outlook reflects Moody's expectation that this level of
leverage, along with the company's ability to reduce variable costs
and growth capital expenditures if necessary, position the company
well to withstand the potential for further stress from the
coronavirus pandemic and/or an operating set-back. Moody's expects
Heartland to continue to be aggressive with its growth strategy,
which will likely result in break-even to modestly negative free
cash flow due to elevated growth capital expenditures.
Ratings Upgraded:
Issuer: HEARTLAND DENTAL, LLC
Corporate Family Rating, Upgraded to B3 from Caa1
Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
Senior Secured 1st Lien Revolving Bank Credit Facility, Upgraded
to B2 (LGD3) from B3 (LGD3)
Senior Secured 1st Lien Term Loans, Upgraded to B2 (LGD3) from B3
(LGD3)
Senior Unsecured Regular Bond/Debenture, Upgraded to Caa2 (LGD6)
from Caa3 (LGD6)
Outlook Actions:
Issuer: HEARTLAND DENTAL, LLC
Outlook, remains Stable
RATINGS RATIONALE
Heartland's B3 Corporate Family Rating reflects its high
debt/EBITDA of around 7.0x, and negative free cash flow in light of
its aggressive growth strategy. The rating is supported by the
company's position as one of the largest dental support
organization (DSO) in the US, favorable industry dynamics and good
geographic diversity. Additionally, Heartland has some ability to
improve cash flow and liquidity by reducing new office openings and
new dentist affiliation investments.
Moody's expects Heartland to maintain good liquidity over the next
12-18 months. The company has historically had negative free cash
flow due to growth and acquisition spending. While the company can
reduce these expenditures, Moody's believes that free cash flow
will be only modestly break-even in 2021 as Heartland will continue
to pursue its aggressive growth strategy. Liquidity is supported by
the company's $245 million cash balance as of December 31, 2020,
and an undrawn $135 million revolver. There are no financial
maintenance covenants on the term loans.
Moody's considers coronavirus to be a social risk given the risk to
human health and safety. Aside from coronavirus, Heartland Dental
faces other social risks such as the rising concerns around the
access and affordability of healthcare services. However, Moody's
does not consider the dental service companies to face the same
level of social risk as many other healthcare providers. Heartland
Dental, in particular, generates most of its revenues from
commercial insurance which Moody's views favorably.
From a governance perspective, Moody's views Heartland's growth
strategy to be extremely aggressive given its history of
debt-funded acquisitions and high leverage. Heartland has added
over 200 offices since its acquisition by KKR in March 2018, either
through acquisition or opening new dental offices. While there is
execution risk to rapid growth, acquisitions and new store openings
have generally been executed successfully. Owner dentists and the
equity sponsor contributed about $122 million dollars in August
2020 through an equity raise.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the company's earnings weaken or
financial leverage increases. Pursuit of an overly aggressive
expansion strategy or deterioration in Heartland's cash flow or
liquidity could also result in a ratings downgrade.
The ratings could be upgraded if Heartland adopts less aggressive
financial policies and reduces debt to EBITDA below 6.0 times.
Additionally, the company would have to materially improve free
cash flow.
Heartland provides support staff and comprehensive business support
functions under administrative service agreements to its affiliated
dental offices, organized as professional corporations. Heartland
currently operates 1,142 offices across 38 states. Heartland is
majority-owned by KKR, and Ontario Teachers' Pension Plan Board
maintains partial ownership. The company generated about $1.5
billion in net patient service revenue as of December 31, 2020.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
HERTZ CORP: Asks Court to Block Takeover Plan of Centerbridge
-------------------------------------------------------------
Steven Church of Bloomberg News reports that a group of Hertz Corp.
shareholders asked the judge overseeing the car renter's bankruptcy
to put a reorganization proposal sponsored by Centerbridge
Partners, Warburg Pincus and Dundon Capital Partners on hold.
In court papers filed Friday, April 9, 2021, evening, the
shareholders argued that until there is no hope of an alternative
proposal, Hertz should not be allowed to lock in a 3% break-up fee.
Delaying approval of the potential fee would save Hertz $77.2
million should a competing offer be chosen, the shareholders said.
The group also urged U.S. Bankruptcy Judge Mary Walrath to reject
an outline of Hertz's reorganization plan.
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 engaged 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.
HERTZ CORP: First Lien Lender Want Interest at Default Rate
-----------------------------------------------------------
The Ad Hoc Group of First Lien Lenders in Hertz Corp., et al.'s
cases said in court filings it disagrees with the Debtors about the
rate at which postpetition interest must be paid to make First Lien
Claims unimpaired pursuant to Sec. 1124 of the Bankruptcy Code.
The Debtors' Second Amended Joint Chapter 11 Plan of
Reorganization, filed on April 3, 2021, proposes to pay the first
lien claims in Class 3 in full, in cash, on the Effective Date.
Class 3 is classified as unimpaired and Holders of Class 3 Claims
are not entitled to vote on the Plan. Because the Class 3 Claims
are oversecured and unimpaired, the Plan properly recognizes that
Holders of Class 3 Claims are entitled to postpetition interest "as
required to render the First Lien Claims Unimpaired."
The First Lien Group says it is supportive of the Debtors'
restructuring efforts and commends the Debtors, its professionals
and the other stakeholders for, in large part, working
collaboratively over the past 10 months to propose a resolution to
these cases that many would have thought aspirational last summer.
The First Lien Group, however, filed a reservation of rights with
respect to approval of the latest Disclosure Statement. The
lenders explain they do not aim to delay approval of the Debtors'
Disclosure Statement; the issues they raise can be properly
addressed at the Confirmation Hearing. However, the Group is
hopeful these issues can be resolved prior to that time.
The Plan proposes to pay interest on the First Lien Claims "at the
non-default rate unless the Bankruptcy Court orders otherwise." In
order to render Class 3 unimpaired in accordance with the Credit
Agreement and applicable law, however, the First Lien Claims must
be paid in full on account of all the obligations due pursuant to
the applicable Loan Documents, which include interest at both the
default rate under Section 4.01(e) of the Credit Agreement, and the
ABR. First, certain Events of Default have occurred, each of which
triggered the application of the default rate to interest accruing
on the First Lien Claims. Second, pursuant to the Credit
Agreement, the application of the ABR to outstanding Loans was
triggered. Aside from impairing the First Lien Claims under
applicable agreements and law, failure to pay interest at the ABR
and default rate, among other outstanding obligations, on the First
Lien Claims while paying Second Lien Claims in full would violate
the Intercreditor Agreement that, among other things, governs the
application of proceeds and priority of liens as between the Senior
Priority Obligations and the Junior Priority Obligations. The
Intercreditor Agreement mandates that proceeds be applied to Senior
Priority Obligations until such obligations are fully discharged,
before any proceeds are applied to Junior Priority Obligations.
The Ad Hoc First Lien Group understands that certain changes will
be made to the Plan that preserve the rights of holders of First
Lien Claims with respect to any claims arising from the
Intercreditor Agreement. The Ad Hoc First Lien Group provided
additional comments to the Plan and Disclosure Statement to the
Debtors, including a disclosure that the Ad Hoc First Lien Group
and the First Lien Agent believe they are entitled to, among other
things, postpetition interest at both the default rate and the ABR.
Assuming the comments provided to the Debtors are incorporated
into the Plan and Disclosure Statement, the Ad Hoc First Lien Group
does not object to the approval of the Disclosure Statement and the
other relief requested in the Motion.
While the Ad Hoc First Lien Group will continue to engage in
good-faith discussions with the Debtors to ensure that their
comments are incorporated and their claims are truly unimpaired, it
reserves all of its rights with respect to the Plan, including, but
not limited to, the right to (i) object to confirmation of the Plan
or any other chapter 11 plan on any basis, (ii) assert claims for
postpetition interest that include the default rate and ABR, and
any other amounts due under the Credit Agreement, other Loan
Documents, and applicable law; (iii) assert their rights, as
impaired creditors, to vote on any proposed chapter 11 plan; (iv)
propose further revisions to the Plan and Disclosure Statement (or
any amendment thereof); and (v) seek any other relief in the
Chapter 11 cases.
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.
Co-counsel to the Ad Hoc First Lien Group and DIP Lenders:
David B. Stratton, Esq.
TROUTMAN PEPPER HAMILTON SANDERS LLP
Hercules Plaza
1313 Market Street, Suite 5100
Wilmington, DE 19899-1709
Telephone: (302) 777-6500
Facsimile: (302) 421-8390
- and -
Michael D. Messersmith, Esq.
Michael B. Solow, Esq.
Brian J. Lohan, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
70 West Madison Street, Suite 4200
Chicago, IL 60602-4231
Telephone: (312) 583-2300
Facsimile: (312) 583-2360
- and -
Maja Zerjal Fink, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
250 West 55th Street
New York, NY 10019-9710
Telephone: (212) 836-8000
Facsimile: (212) 836-8689
HERTZ CORP: Glenview, Other Shareholders Oppose Plan
----------------------------------------------------
The ad hoc group of shareholders of Hertz Global Holdings, Inc.,
has asked the Bankruptcy Court to deny approval of the recently
filed Disclosure Statement because, among other things, it
describes a patently unconfirmable plan.
Members of the Ad Hoc Committee of Shareholders include (i) funds
managed by Glenview Capital Management, LLC, (ii) Discovery Capital
Management, (iii) Two Seas Capital LP for and on behalf of Two Sea
Global (Master) Fund LP and affiliated funds, (iv) funds managed by
Alta Fundamental Advisers LLC, (v) Rubric Capital Management LP,
(vi) funds managed by Hein Park Capital Management LP, (vii)
FourSixThree Capital LP on behalf of funds and affiliates it
manages, and (viii) Hampton Road Capital Management LP.
On April 3, 2021, the Debtors made their choice and filed (i) the
Second Amended Joint Chapter 11 Plan of Reorganization of The Hertz
Corporation and its Debtor Affiliates and (ii) Disclosure
Statement. The Plan reflects the Debtors' selection of an
alternative group of plan sponsors, which included Centerbridge
Partners LP, Warburg Pincus LLC and Dundon Capital Partners LLC, in
lieu of Knighthead Capital Management, LLC and Certares
Opportunities LLC.
Under the Plan, Existing Hertz Parent Equity Interests would be
canceled and released without any distribution on account of such
interests. Furthermore, Unsecured Funded Debt Claims Noteholders
are to receive (i) 48.2% of the Reorganized Hertz Parent Common
Interests, representing (according to the Debtors) an estimated
recovery of 75% on account of such Claims, and (ii) exclusive
Subscription Rights to purchase an additional 38.4% of the
Reorganized Hertz Parent Common Interests.
According to the Shareholders Group, the Plan is patently
unconfirmable because: (i) it wipes out existing equity interests
while the Debtors have a total enterprise value that puts equity
holders firmly "in the money," and (ii) Holders of Unsecured Funded
Debt Claims are receiving more than a 100% recovery on their claims
through their distribution of the Debtors' reorganized equity.
The shareholders aver that while it may have seemed obvious to some
stakeholders that Hertz shareholders were out of the money during
the pandemic downturn, it is equally obvious -- based on the
Debtors' own projections -- that they are squarely in the money
now.
"Market data validates this conclusion. The Debtors unsecured bonds
traded between $36-$48 in November 2020, but they are now trading
at par. The market capitalization of the Debtors' equity has
ranged from $64 million to $329 million in 2021. The increase in
these valuations has coincided with a meteoric rise in the stock
price of Hertz's largest competitor, Avis, which traded at $10.98
in March 2020 but is now trading at $74.35," the Shareholders tell
the Court.
"The Plan completely ignores these irrefutable facts by canceling
all equity interests with no recovery at all. At the same time,
the Disclosure Statement conspicuously omits an enterprise
valuation of the Debtors from their financial advisor, Moelis &
Company, to justify this treatment of shareholders."
The shareholders also point out that the Plan violates the absolute
priority rule by paying the Holders of unsecured funded debt claims
more than the value of their claims.
"The absolute priority rule prohibits precisely what the Plan
proposes to do -- grant a class of creditors more than the total
amount of its claims. The recovery afforded to Holders of
Unsecured Funded Debt Claims under the Plan is 48.2% of the
Reorganized Hertz Parent Common Interests plus 38.4% of that common
stock via the Rights Offering, which is offered exclusively to
those noteholders. The Debtors state that the direct allocation of
new common stock alone (without consideration of the right to
participate in the Rights Offering) equals 75% of those claims.
Based on a correct valuation of the Debtors, however, that equity
allocation is worth more than the Unsecured Funded Debt Claims,"
the Shareholders aver.
"Considering the Subscription Rights given to Holders of Unsecured
Funded Debt Claims, their recoveries are well above the value of
their claims. That unsecured noteholders would be receiving more
than 100% of their claims cannot reasonably be disputed given that
the notes are currently trading at par. There would be no reason
for the entities that have recently purchased the notes -- many of
them sophisticated institutional investors -- to pay close to par
for the right to receive much less than par (as the Debtors' Plan
value would suggest). The inescapable conclusion is that the Plan
violates the absolute priority rule, and is patently unconfirmable,
because it gives a subset of creditors an impermissible premium in
excess of their allowed claims."
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.
An Ad Hoc Committee of Shareholders is represented by:
Robert J. Dehney, Esq.
Eric D. Schwartz, Esq.
Joseph C. Barsalona II, Esq.
Brett S. Turlington, Esq.
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 N. Market St., 16th Floor
Wilmington, DE 19899-1347
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
E-mail: rdehney@morrisnichols.com
eschwartz@morrisnichols.com
jbarsalona@morrisnichols.com
bturlington@morrisnichols.com
- and -
Andrew K. Glenn, Esq.
Shai Schmidt, Esq.
Rich Ramirez, Esq.
Naznen Rahman, Esq.
GLENN AGRE BERGMAN & FUENTES LLP
55 Hudson Yards, 20th Floor
New York, NY 10001
Telephone: (212) 358-5600
E-mail: aglenn@glennagre.com
sschmidt@glennagre.com
rramirez@glennagre.com
nrahman@glennagre.com
HERTZ CORPORATION: Seeks Court Approval to Hire Stout Risius Ross
-----------------------------------------------------------------
The Hertz Corporation and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Stout
Risius Ross, LLC.
The firm's services include fresh start valuation, fresh start
accounting and reporting, and project management office support.
Stout intends to use the services of independent contractor Riveron
Consulting, LLC to assist in providing fresh start accounting and
reporting services.
The hourly rates of Stout's professionals, including Riveron's
professionals, range as follows:
Managing Director $300 – $780
Director $325 – $540
Senior Manager/Vice President $275 – $475
Manager/Vice President $175 – $420
Associate/Senior Associate $120 – $350
Analyst $100 – $250
In addition, Stout will seek reimbursement for expenses.
Andrew Fargason, a managing director at Stout Risius Ross, and
Stephen Hamilton, a managing director at Riveron Consulting,
disclosed in court filings that their firms are "disinterested
persons" within the meaning of Section 101(14) of the Bankruptcy
Code.
Stout can be reached through:
Andrew S. Fargason
Stout Risius Ross, LLC
1201 West Peachtree Street NW, Suite 710
Atlanta, GA 30309
Telephone: (404) 369-1110
Facsimile: (404) 330-9736
Email: afargason@stout.com
About The Hertz Corporation
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 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 them in the development of their business plan and Stout
Risius Ross, LLC to provide corporate valuation and fresh start
accounting services. Prime Clerk LLC is the claims agent.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases.
The committee 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.
IMAGEFIRST HOLDINGS: Moody's Assigns First Time B3 CFR
------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating and
B3-PD Probability of Default Rating to ImageFirst Holdings, LLC in
connection with the company's proposed refinancing transaction. At
the same time, Moody's assigned a B3 rating to ImageFirst's
proposed $310 million first lien senior secured credit facility,
consisting of a $50 million revolving credit facility, a $210
million term loan and a $50 million delayed draw term loan. The
outlook is stable.
The proceeds from the proposed $210 million first lien term loan
will be used to refinance existing debt and pay transaction fees
and expenses. The proposed $50 million revolving credit facility is
expected to be undrawn at close. ImageFirst has been majority owned
by Calera Capital since October 2018.
"Despite ImageFirst's strong value proposition to its healthcare
clients, the company's modest size, narrow business focus,
aggressive growth strategy that relies on frequent debt issuances,
as well as our expectation for negative free cash flow generation
over the next 12-18 months are constraints on the company's
rating," said Moody's AVP-analyst Oleg Markin.
Moody's favorably considers the company's established market
position within outsourced laundry and textile rental services to
the outpatient and specialty healthcare end market, and good track
record of scaling the business over the last three years, both
organically and through acquisitions. The company's credit profile
is supported by its route-based business model servicing
non-cyclical and growing healthcare market, contractual revenues
with a diverse and national customer base than has historically
exhibited high renewal rates, as well as its solid EBITDA margin.
Assignments:
Issuer: ImageFirst Holdings, LLC
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Senior Secured first lien Term Loan B, Assigned B3 (LGD3)
Senior Secured first lien Delayed Draw Term Loan, Assigned B3
(LGD3)
Senior Secured first lien Revolving Credit Facility, Assigned B3
(LGD3)
Outlook Actions:
Issuer: ImageFirst Holdings, LLC
Outlook, Assigned Stable
The assignment of ratings remain subject to Moody's review of the
final terms and conditions of the proposed refinancing transaction
that is expected to close by end of April 2021.
RATINGS RATIONALE
ImageFirst's B3 CFR balances its modest size and lack of meaningful
cash flow generation against the company's good standing in the
outsourced laundry and textile rental services market and
comparatively robust profitability metrics. Moody's believes
ImageFirst has solid growth prospects over the next 12-18 months
supported by the company's multi-year contracts that provide good
revenue visibility, demonstrated ability to maintain high customer
renewal rates and continue to win new business, as well as a long
term secular growth trends in the healthcare spending. The rating
reflects the company's highly scalable business model and diverse
customer base. These considerations are tempered by its elevated
pro forma debt-to-EBITDA (Moody's adjusted) of about 4.7 times as
of March 31, 2021 and high governance risk associated with private
equity ownership, including the potential for an aggressive growth
strategy or shareholder distributions. Since the beginning of 2019,
ImageFirst completed four acquisitions and consolidated several of
its franchisees, and the delayed draw term loan suggests a high
likelihood of additional acquisitions over the next two years.
The stable outlook reflects continued topline growth both
organically and through bolt-on acquisitions over the next 12-18
months, and that the company will increase profitability and cash
flows as operational improvements and route density benefits are
realized. Moody's also expects that the company will maintain
adequate liquidity over the same period.
Moody's expects ImageFirst to maintain adequate liquidity over the
next 12-15 months. Cash balances are expected to be very modest
with pro forma cash of about $6.7 million at close of the
refinancing. Over the next 12-15 months, Moody's projects negative
annual free cash flow generation because of on-going working
capital needs, capital expenditures, and several earnout payments
related to previous acquisitions. External liquidity is provided by
a $50 million revolving credit facility (undrawn at closing) that
expires in 2026. Moody's expects the company will need to draw on
the facility in order to supplement for any cash shortfalls over
the next 12-15 months. There are no financial maintenance covenants
under the term loan, but the revolver is subject to a springing
maximum first lien net leverage ratio of 7.7x if the amount drawn
exceeds more than 35% of the revolving credit facility. The company
is expected to maintain covenant compliance over the next 12-15
months even if the covenant is triggered.
As proposed, the first lien credit facility (term loan, revolver
and delayed draw term loan) is expected to provide covenant
flexibility that if utilized could negatively impact creditors.
Notable terms include the following: Incremental debt capacity up
to the greater of $57.8 million or 100% of pro forma LTM adjusted
EBITDA, plus unlimited amounts subject to 5.0x first lien net
leverage ratio. The credit agreement prohibits the sale or transfer
of material intellectual property to unrestricted subsidiaries,
which limits collateral "leakage" to unrestricted subsidiaries.
Non-wholly-owned subsidiaries are not required to 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 proposed terms and the final terms of the credit agreement may
be materially different.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company were able to generate
consistently positive free cash flow on annual basis and sustain
growth in revenue and earnings, while maintaining its
debt-to-EBITDA (Moody's adjusted) below 5.5 times. Free cash
flow-to-gross debt (Moody's adjusted) of at least 5% would also be
necessary for an upgrade.
Moody's could downgrade the ratings if debt-to-EBITDA (Moody's
adjusted) rises above 6.5x or revenue and profitability growth are
materially lower than projected. Sustained negative free cash flow
generation, a growing reliance on revolver borrowings, or other
factors that limit liquidity would create downward rating
pressure.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
ImageFirst is a national provider of outsourced healthcare laundry
and textile rental services to the outpatient end market in the
United States. The company has been majority owned by Calera
Capital Advisors L.P. since October 2018. The company generated pro
forma annual revenue of approximately $300 million as of December
31, 2020.
JAMCO SERVICES: Plan Exclusivity Period Extended Thru May 24
------------------------------------------------------------
At the behest of the Debtor Jamco Services LLC, Judge Tony M. Davis
of the U.S. Bankruptcy Court for the Western District of Texas,
Midland Division extended the period in which the Debtor may file a
Chapter 11 plan through and including May 24, 2021, and to solicit
acceptances of the plan through and including July 23, 2021. This
is the Debtor's first request to extend the Exclusive Periods in
this chapter 11 case.
Since the Petition Date, the Debtor has negotiated the use of cash
collateral with its secured creditors, negotiated adequate
protection payments with multiple of its equipment lenders, made
progress negotiating with one of its largest account debtors
towards payment of a significant receivable, investigated multiple
options for financing its exit from bankruptcy, and begun a
detailed analysis of every single piece of its equipment to
determine whether that asset is needed to reorganize or whether the
Debtor and its creditors would be best served by selling the asset
and paying down debt.
However, owing to the uneven recovery of the oil and gas industry
thus far in 2021 and the delays and difficulties caused by the
statewide winter storm in February, the Debtor needs a little more
time to finalize this analysis and set it forth in chapter 11
plan.
The Debtor was not seeking an extension of the Exclusive Periods to
artificially delay the administration of this chapter 11 case or to
pressure creditors. Rather, the now granted extension recognizes
the posture of the case and the time needed to successfully
complete the planning process without the disruption and
distraction created by competing plan proposals.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3tdlSuh from PacerMonitor.com.
A copy of the Court's Extension Order is available at
https://bit.ly/3d8e2fF from PacerMonitor.com.
About Jamco Services
Jamco Services, LLC, -- https://www.jamcoservices.com/ -- which
conducts business under the name Jam Construction, is a
full-service heavy equipment construction company. Its services
include drilling construction, frac pit construction, site
remediation, oilfield construction, game fencing, pit lining, and
oilfield construction.
Jamco Services sought Chapter 11 protection (Bankr. W.D. Texas Case
No. 20-70142) on November 25, 2020. The Debtor was estimated to
have $1 million to $10 million in assets and liabilities.
Judge Toby M. Davis oversees the cases.
The Debtor tapped Condon Tobin Sladek Thornton, PLLC as its legal
counsel and EGK Financial, LLC as its accountant.
JAZZ PHARMACEUTICALS: Fitch Assigns First-Time 'BB-' LongTerm IDR
-----------------------------------------------------------------
Fitch Ratings has assigned a first-time Long-Term Issuer Default
Rating (IDR) of 'BB-' to Jazz Pharmaceuticals plc (Jazz, or the
parent company) and to certain of its subsidiaries. The Rating
Outlook is Stable.
Fitch has also assigned expected ratings of 'BB+(EXP)'/'RR1' to new
long-term secured credit facilities that apply to Jazz and certain
of its subsidiaries that are co-borrowers. The new secured
long-term credit facilities will comprise a five-year $500 million
revolving credit facility and a seven-year USD and EUR 2.650
billion Term Loan B.
Additionally, Fitch has assigned new 'BB'-/'RR4' senior unsecured
debt ratings to existing exchangeable unsecured notes issued by
Jazz Investments I Limited, a wholly owned subsidiary of the
parent.
The proceeds of the new secured credit facilities, along with
proceeds from the expected sale of other senior secured debt and
issuance of Jazz common stock, are expected to be used to fund the
acquisition of GW Pharmaceuticals plc. The new secured credit
facilities will be senior to the existing exchangeable unsecured
notes of Jazz and its subsidiaries.
The expected ratings on the proposed new secured credit facilities
will be converted to final ratings after confirmation that the
acquisition of GW Pharmaceuticals has been completed in accordance
with terms of the final credit and merger agreements.
The 'BB-' IDR for Jazz reflects its leadership position in the sale
and development of products to address sleep and movement disorders
and its growing business in oncology, including hematologic
malignancies and solid tumors. In addition, the rating reflects
Jazz's significant cash flow generation and its expanding pipeline
of therapeutics. The combination with GW Pharmaceuticals adds
additional leadership in the sale of cannabinoid products to
address epilepsies, increases Jazz's scale and will grow and
diversify its revenue and cash flow sources. These strengths are
primarily offset by the increase in debt tied to the GW
acquisition, increased borrowing costs and significant, albeit
declining, product concentration.
KEY RATING DRIVERS
Innovative, High Growth Biopharmaceutical Company: The acquisition
of GW Pharmaceuticals by Jazz positions the combined company to
become a leader in the neuroscience field as a result of
complementary products with significant future growth prospects.
Jazz has a solid track record of launching innovative products
serving the sleep disorder market and has recently expanded its
portfolio of oncology products with the launch of Zepzelca. The
addition of Epidiolex to the revenue base of the combined company
creates the opportunity for revenue and EBITDA growth and
diversification, which has been missing from Jazz's credit profile.
GW is at the forefront of cannabinoid science and offers a
promising pipeline of new drugs.
New Product Launches and Pipeline Opportunities: Jazz launched
three key products in 2019 and 2020: Zepzelca (lung cancer), Xywav
and Sunosi (sleep disorder). Fitch anticipates that the new
products (already launched) will comprise an increasingly greater
percentage of total revenues. Beginning in 2022, such products are
expected to represent greater than 50% of Jazz's stand-alone total
revenue. The addition of Epidiolex is expected to drive this
percentage to approximately 65% of total consolidated revenue. In
addition, the new product launches provide diversification across
neuroscience and oncology. The addition of GW provides immediate
diversification and enhances the combined company's growth profile
with its key product, Epidiolex, which is diversified across
indications with potentially additional ones to come. Two more
important product approvals and launches are anticipated in 2021,
with JZP-458 in acute lymphocytic leukemia and Xywav - JZP-258 for
ideopathic hypersomnia, which further diversifies Jazz's revenues.
High Leverage Over the Near Term: Following the combination with GW
Pharmaceuticals, Jazz's leverage is expected to peak in fiscal 2021
on a pro forma basis in the range of 5.5x-6.0x - gross debt to
EBITDA and with pro forma FCF to debt between 5%-10%. Thereafter,
if the company applies substantially all of its FCF to debt
reduction over fiscal years 2021 through 2023, Fitch believes debt
to EBITDA may decline below 3.5x. The substantially increased debt
will reduce the flexibility of the combined company to respond to
changing business and economic conditions by increasing borrowing
costs and potentially reducing or delaying investments of the
combined company.
Growth through Acquisition Strategy: Fitch anticipates that Jazz
will continue to pursue a steady level of investments in companies
or assets to build out its portfolio of products but will remain
largely focused on areas of significant unmet needs and targeted
therapeutic conditions. The acquisitions of Celator Pharmaceuticals
and GW Pharmaceuticals and expenditures on IPR&D are clear
indications of the company's willingness to increase financial
leverage to continue to grow revenues and cash flows. As a result,
Fitch anticipates that financial leverage may rise and fall as the
company continues to explore and invest in adjacent therapeutic
categories.
Competition for Xyrem: Xyrem is currently the top selling product
approved by the FDA and marketed in the U.S. for the treatment of
both cataplexy and excessive daytime sleepiness (EDS) in patients
with narcolepsy. Currently, Jazz is highly dependent on Xyrem, and
its financial results have been significantly influenced by sales
of Xyrem. Jazz's ability to successfully commercialize Xywav (a
newly launched low-sodium product), which will replace Xyrem, will
depend on its ability to obtain and maintain adequate coverage and
reimbursement for Xywav and acceptance of Xywav by payors,
physicians and patients. Fitch anticipates that, in the future,
Xyrem and Xywav will face competition from authorized generics and
generic versions of sodium oxybate, though Fitch expects Jazz to
receive meaningful revenues on Xyrem authorized generics. In
addition, non-oxybate products intended for the treatment of EDS or
cataplexy in narcolepsy, including new market entrants, even if not
directly competitive with Xyrem or Xywav, could have the effect of
changing treatment regimens and payor or formulary coverage of
Xyrem or Xywav in favor of other products.
Replacement of Erwinaze: Jazz faces the loss of revenue from
Erwinaze as a result of the expiration of its licensing and supply
agreement with Porton Biopharm Limited (PBL) as of Dec. 31, 2020.
Subject to successful receipt and FDA approval of final batches
from PBL, Fitch understands that Jazz expects to distribute
available Erwinaze supply through 2Q21.
If Jazz is unable to replace the Erwinaze sales, it would represent
a reduction of approximately $150 million of revenues after 2021.
Fitch understands that Jazz plans to bring a replacement product to
the market in the form of JZP-458 by the middle of 2021.
DERIVATION SUMMARY
Jazz's 'BB-' IDR reflects its leadership position in the sale and
development of products to address sleep and movement disorders and
its growing business in oncology, including hematologic
malignancies and solid tumors. In addition, the rating reflects
Jazz's significant cash flow generation and its expanding pipeline
of therapeutics. The combination with GW Pharmaceuticals adds
additional leadership in the sale of products to address
epilepsies, increases Jazz scale and will grow and diversify its
revenue and cash flow sources.
These strengths are primarily offset by the significant increase in
debt tied to the GW acquisition, increased borrowing costs and
somewhat less financial flexibility and the significant, albeit
declining, product concentration in Xyrem and other oxybate
products that are expected to produce a majority of Jazz's revenues
over the next two years. Jazz also faces patent challenges on Xyrem
that create the potential for diminished sales over the medium
term. Another key credit risk for Jazz is its leveraged growth
strategy, which may cause leverage to exceed Fitch's negative
rating sensitivities for relatively short periods.
Relative to other companies of a similar size, such as Horizon
Therapeutics, Jazz will have significantly more leverage after the
GW Pharmaceuticals acquisition. Currently, Horizon has less product
diversification compared to Jazz but the expectation is that Jazz
will be more diversified within two years following the GW
acquisition. Jazz is not exposed to the significant opioid
litigation that has troubled other companies, such as Endo
Pharmaceuticals or Mallinckrodt Pharmaceuticals.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- A revenue growth rate on a combined basis of approximately 12%
over the forecast period of 2021-2024, with growth driven
primarily from increased sales of Epidiolex, Xywav, Sunosi and
Zepzelca.
-- Gross margins and EBITDA margins of approximately 92%-94%% and
35%-42% across the forecast period, respectively. EBITDA
margins are subject to some variation based on the level of
new product launch expenses and R&D investment. R&D investment
is assumed to be approximately 20%-22% over the next two
years.
-- A cash tax rate of approximately 17% over the forecast period.
-- Working capital changes are assumed to generally be a use of
cash of $100 million or less over the forecast period.
-- Capital expenditures, one-time costs to achieve synergies and
milestone payments range from 3% to 5% of revenue.
-- Acquisition and share repurchase activity resume in 2023-2024
after gross leverage reaches 3.5x; no common dividends are
assumed to be paid.
-- A cash balance of approximately $250 million-$500 million is
maintained until gross leverage is 3.5x or lower.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Successful integration of the GW Pharmaceuticals acquisition,
as evidenced by strong revenue growth and expanding sales of
Epidiolex.
-- Successful product launches for Xywav for idiopathic
hypersomnia (JZP-258) and "new" Erwinaze (JZP458), along with
a continued solid uptake of recent product launches for
Zepzelca, Xyway and Sunosi.
-- Diversifying revenue sources such that oxybate products (Xyrem
and Xywav) contribute less than 50% of total sales.
-- Total debt to EBITDA sustained below 3.5x and CFO-capex to
total debt with equity credit greater than 10%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Continued product concentration in oxybate products,
particularly Xyrem.
-- A material loss of Xyrem product sales because of a successful
"at risk" launch of a competing generic, coupled with slower
revenue growth of Epidiolex, Xywav, Zepzelca, Sunosi and "new"
Erwinaze.
-- A large debt-funded transaction or significant investments in
IP R&D that cause total debt to EBITDA to be sustained at or
above 4.5x.
-- CFO-capex to total debt with equity credit at less than 5%.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Good, Steady Source of Liquidity: Jazz is expected to have good
liquidity to support debt service and potential investments in its
business to fortify its long-term growth strategy. The company was
able to manage liquidity challenges effectively during the peak of
the coronavirus pandemic with the use of its revolving credit
facility. Following the close of the GW Pharmaceuticals
acquisition, Jazz's primary sources of liquidity are expected to be
CFO; a five-year, $500 million revolving credit facility; and an
expectation of approximately $250 million-$500 million in cash over
the near term. Fitch believes Jazz will have sufficient resources
to fund operations and meet required obligations.
Manageable Maturities of Long-Term Debt: After the completion of
the GW Pharmaceuticals acquisition, Jazz is expected to add
approximately $5.3 billion of new debt but will repay an existing
term loan A for $584 million at the closing and another $219
million in exchangeable unsecured notes (due in August 2021).
Required principal payments on the new debt are expected to be
modest compared to FCF. As a result, Fitch believes Jazz will have
significant flexibility to pay down its new term loan B rapidly.
Fitch understands that Jazz has a target leverage ratio of less
than 3.5x on a net basis. Based on the Fitch forecast of FCF for
the combined company, that leverage ratio appears to be attainable
in two to three years following the combination.
Hybrid Instruments: Fitch has treated the three exchangeable notes
as 100% debt in its ratio calculations. According to Fitch's
Corporate Hybrid and Rating Criteria, optional convertibles
(whether the option is with the issuer, instrument holder or both)
will be treated as debt in all cases, unless the instrument has
other features as described in the criteria report and which are
conducive to equity credit. This is not the case for the three
exchangeable notes because they have stated maturities and required
interest payments with no deferral features.
SUMMARY OF FINANCIAL ADJUSTMENTS
Adjustments have been made to add back impairment losses to
EBITDA.
ESG CONSIDERATIONS
Jazz has an ESG Relevance Score of '4' for Exposure to Social
Impacts due to pressure to contain healthcare spending, a highly
sensitive political environment and social pressure to contain
costs or restrict pricing. This has a negative impact on the credit
profile and is relevant to the ratings in conjunction with other
factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
JAZZ PHARMACEUTICALS: S&P Assigns Prelim BB- Rating on Secured Loan
-------------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BB-' issue-level and
'3' recovery ratings to Jazz Pharmaceuticals PLC subsidiary Jazz
Financing Lux Sarl's proposed $2.65 billion senior secured term
loan. S&P expects proceeds from this proposed issuance, along with
$2.7 billion in other secured debt, cash, and equity will be used
to fund the company's acquisition of GW Pharmaceuticals PLC. S&P
also expects Jazz Pharmaceuticals PLC will guarantee the term loan
B and that it would rank pari-passu to the company's other secured
debt.
S&P sid, "Our preliminary rating on the proposed senior secured
term loan B incorporates our expectation that we would lower our
issuer-credit rating on Jazz Pharmaceuticals PLC by one notch to
'BB-' from 'BB' following the completion of the company's
acquisition of GW Pharmaceuticals PLC.
"All of our existing ratings on Jazz Pharmaceuticals PLC, including
our 'BB' issuer credit rating, remain on CreditWatch with negative
implications. We expect the acquisition to close in the second
quarter of 2021, at which point we intend to resolve our
CreditWatch."
Issue Ratings - Recovery Analysis
Key analytical factors
-- The company's proposed capital structure following its
acquisition of GW Pharmaceuticals PLC consists of a new $500
million secured revolving credit facility, new $2.65 billion
secured term loan, new $2.7 billion of other secured debt, existing
$1.0 billion of unsecured exchangeable notes due 2026, existing
$575 million of unsecured exchangeable notes due 2021 ($219 million
outstanding at transaction close and expected to be repaid in
August 2021), and existing $575 million of unsecured exchangeable
notes due 2024 (not rated).
-- S&P's simulated default scenario contemplates a default in
2025, stemming from unexpected competition and pricing pressure
that deeply erodes key products, including oxybate sales,
pressuring cash flows.
-- S&P estimates that for the company to default, EBITDA would be
significantly lower from what the company generated in 2020,
representing a dramatic deterioration from the current business
trajectory. If a default occurs, S&P assumes the company would
reorganize as a going concern rather than liquidate.
-- In S&P's hypothetical default scenario, it assumes the
revolving credit facility is 85% drawn and borrowing costs increase
modestly stemming from higher LIBOR and margin rates following
covenant violations.
Simulated default assumptions
-- Simulated year of default: 2025
-- EBITDA at emergence: $557 million
-- EBITDA multiple: 6.5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $3.436
billion
-- Valuation split (obligors/nonobligors): 100%/0%
-- Collateral value available to secured creditors: $3.436
billion
-- Secured first-lien debt (revolver and term loan): $5.844
billion
--Recovery expectations: 50%-70%; rounded estimate: 55%
-- Total value available for unsecured debt: 0
-- Senior unsecured debt: $1.589 billion
--Recovery expectations: 0%-10%; rounded estimate: 0%
Note: All debt amounts include six months' prepetition interest.
JB HOLDINGS: Seeks Court Approval to Hire Realtors
--------------------------------------------------
JB Holdings of Hobe Sound, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Jamie Mix and Cheryl Giannunzio, realtors based in Fla.
The Debtor needs the assistance of realtors to liquidate its real
property located at SE Rohl Way, Hobe Sound, Fla.
Realtors will receive a commission of 6 percent of the sales
price.
As disclosed in court filings, both realtors are "disinterested
persons" within the meaning of Section 101(14) of the Bankruptcy
Code.
The realtors can be reached at:
Jamie Mix
Cheryl Giannunzio
Realty One Group Engage
3591 NW Federal Highway
Jensen Beach, FL 34957
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.
JIM'S DISPOSAL: Wants Plan Exclusivity Extended Until June 9
------------------------------------------------------------
Debtor Jim's Disposal Service, LLC asks the U.S. Bankruptcy Court
for the Western District of Missouri to extend by 60 days the
Debtor's exclusive period to file a Chapter 11 Plan to June 9,
2021, and to solicit acceptances to August 4, 2021.
On March 16, 2021, the Court approved the proposed sale of the
Debtor's real property located at 3738 Gardner Avenue, in Kansas
City, Missouri, for $1.5 Million, which will pay off in full
Debtor's largest secured creditor, Security Bank of Kansas City.
Security Bank of Kansas City ("SBKC") and the Debtor have proposed
a settlement providing for, inter alia, the satisfaction of SBKC's
prepetition and post-petition claims for payment of $605,000 from
the proceeds of this sale by May 28, 2021, or such other date as
SBKC and the Debtor may agree.
An extension of sixty days for both the deadline in § 1121(b) and
(c)(2), and the deadline in § 1121(c)(3), is necessary for Debtor
to finalize its budget projections for the smaller, single
location; make additional progress on resolving PBGC's claim; and
lockdown additional commercial and residential contracts.
No creditor has expressed an interest in proposing a plan to date,
so it appears that no creditor or party in interest will be harmed
by the extension of exclusivity requested herein. Moreover, this
will be the Debtor's final extension.
To date, no trustee, examiner, or committee has been appointed in
this case.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3d8M7MV from PacerMonitor.com.
About Jim's Disposal Service
Jim's Disposal Service, LLC, a company that specializes in
residential waste solutions, filed a Chapter 11 petition (Bankr.
W.D. Mo. Case No. 20-40050) on January 6, 2020. At the time of the
filing, the Debtor was estimated to have less than $50,000 in
assets and $1 million to $10 million in liabilities.
Judge Brian T. Fenimore oversees the case.
The Debtor tapped Mann Conroy, LLC as its legal counsel and Cochran
Head Vick & Co., P.A. as its accountant.
JUSTICE OIL: Seeks to Hire Reed Smith as Bankruptcy Counsel
-----------------------------------------------------------
Justice Oil & Gas, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Wyoming to employ Reed Smith LLP as its
bankruptcy counsel.
Reed Smith will render these legal services:
(a) advise the Debtor regarding its powers and duties in the
continued operation of its business and the management of its
property;
(b) advise the Debtor and take all necessary or appropriate
actions to protect and preserve the Debtor's estates;
(c) draft all necessary legal papers;
(d) represent the Debtor in negotiations with all other
creditors and other parties in interest;
(e) take all necessary or appropriate actions in connection
with a plan of reorganization, disclosure statement and all related
documents; and
(f) perform other necessary legal services in connection with
the Debtor's Chapter 11 case.
The hourly rates of Reed Smith's professionals who will be
principally engaged in this matter are:
Keith M. Aurzada, Partner $825
Devan Dal Col, Associate $485
Shikendra Bedford-Rhea, Paralegal $295
In addition, Reed Smith will seek reimbursement for expenses.
The Debtor does not owe Reed Smith any amounts relating to services
rendered prior to the petition date.
Keith Aurzada, Esq., a partner at Reed Smith, disclosed in a court
filing 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:
Keith M. Aurzada, Esq.
Reed Smith LLP
2850 N. Harwood Street, Suite 1500
Dallas, TX 75201
Telephone: (469) 680-4292
Facsimile: (469) 680-4299
Email: kaurzada@reedsmith.com
About Justice Oil & Gas
Justice Oil & Gas, LLC, a privately held company in the oil and gas
extraction industry, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Wyo. Case No. 21-20102) on March 24,
2021. Thomas R. Wright, managing member, signed the petition. At
the time of the filing, the Debtor disclosed total assets of
$629,609 and total liabilities of $1 million to $10 million. Reed
Smith LLP serves as the Debtor's counsel.
JVA OPERATING: Seeks to Tap Kelly Hart & Hallman as Counsel
-----------------------------------------------------------
JVA Operating Company, Inc. and its affiliates seek approval from
the U.S. Bankruptcy Court for the Western District of Texas to
employ Kelly Hart & Hallman LLP as their legal counsel.
Kelly Hart will render these legal services:
(a) serve as counsel of record for the Debtors in all aspects
of their Chapter 11 cases;
(b) prepare all legal papers;
(c) take all necessary actions in connection with a Chapter 11
plan, disclosure statement and all other related documents;
(d) take all necessary action to protect and preserve the
Debtors' estates; and
(e) perform all other legal services that may be necessary or
appropriate in the administration of the Chapter 11 cases.
Kelly Hart has received a payment in the amount of $15,000 from the
Debtors, which is being held at the firm's trust account.
As of the petition date, the Debtors owed Kelly Hart $9,900 in
connection with pre-bankruptcy services and expenses.
Kelly Hart will be compensated based on its normal hourly rates and
reimbursement policies.
Michael McConnell, Esq., a partner at Kelly Hart, disclosed in a
court filing 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:
Michael A. McConnell, Esq.
Kelly Hart & Hallman LLP
201 Main Street, Suite 2500
Fort Worth, TX 76102
Telephone: (817) 878-3569
Facsimile: (817) 878-9280
Email: michael.mcconnell@kellyhart.com
About JVA Operating Company
JVA Operating Company, Inc., an oil and gas exploration and
production company based in Midland, Texas, and its affiliates
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Texas Lead Case No. 21-70028) on March 5, 2021. Jerry V.
Atkinson, president, signed the petitions. In the petitions, the
Debtors disclosed between $1 million and $10 million in both assets
and liabilities. Kelly Hart & Hallman LLP is the Debtors' legal
counsel.
JWB DESIGN: Seeks to Hire Blanchard Law as Legal Counsel
--------------------------------------------------------
JWB Design Build Construction Services, LLC seeks approval from the
U.S. Bankruptcy Court for the Middle District of Florida to hire
Blanchard Law, P.A. as its legal counsel.
Blanchard Law will provide these services:
a. advise the Debtor with respect to its powers and duties in
the continued operation of its business and management of its
property;
b. prepare legal papers; and
c. perform other legal services necessary to administer the
Debtor's Chapter 11 case.
The firm will be paid at these rates:
Attorneys $375 per hour
Associates $275 per hour
Paralegals $100 per hour
The firm will also be reimbursed for out-of-pocket expenses
incurred.
The retainer fee is $8,000.
Jake Blanchard, Esq., a partner at Blanchard 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.
The firm can be reached at:
Jake C. Blanchard, Esq.
Blanchard Law, P.A.
1501 Belcher Road South Unit 6B
Largo, FL 33771
Tel: (727) 531-7068
Fax: (727) 535-2086
Email: jake@jakeblanchardlaw.com
About JWB DesignBuild Construction Services
JWB Design Build Construction Services, LLC sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
21-01349) on March 23, 2021, listing under $1 million in both
assets and liabilities. Blanchard Law, P.A. serves as the Debtor's
legal counsel.
KIMBLE DEVELOPMENT: Seeks to Extend Plan Exclusivity Thru July 6
----------------------------------------------------------------
Debtor Kimble Development Baton Rouge I LLC requests the U.S.
Bankruptcy Court for the Middle District of Louisiana to extend the
exclusive periods during which the Debtor may file and obtain
acceptances for the plan, and any amendments, through and including
July 6, 2021, and September 7, 2021, respectively.
On November 10, 2020, and December 22, 2021, the Court authorized
the Debtor to retain and employ Dowd Commercial Real Estate, Inc.
and Beau Box as its real estate brokers to sell the Debtor's
shopping center. Beau Box has been substituted for Latter & Blum,
Inc. as the Debtor's local real estate broker.
The Debtor continues to work with the real estate brokers to market
and sell its property. Therefore, the Debtor is seeking the
extension of the 11 U.S.C. §1121(b) and 11 U.S.C. §1121(c)(3)
deadlines for the plan to be filed and obtain acceptances by each
class of claims or interests that is impaired so that the time
period does not lapse before the Debtor has sufficient time to
market and sell its property which is necessary to propose and
confirm a feasible and satisfactory plan. The Debtor submits that
these circumstances constitute sufficient "cause" under 11 U.S.C.
§1121(b) for the requested relief.
The Debtor submits that good-faith progress in marketing the
Debtor's shopping center has been made to date, warranting an
extension and that an extension will not prejudice any parties in
interest. Moreover, this extension does not exceed the 18-month
limitation for the exclusive period to file a plan or the 20-month
limitation to obtain acceptances for a plan. Rather, the Debtor's
requested extension is well within these limitations.
Although the Debtor hopes that a plan of reorganization is filed
within the 11 U.S.C. section 1121(b) extended period and that the
Debtor is able to obtain acceptances for the plan within the 11
U.S.C. section 1121(c)(3) extended period, as a precaution, the
Debtor reserves the right to seek further extension without
prejudice.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3wPY9mc from PacerMonitor.com.
About Kimble Development Baton Rouge I
Kimble Development Baton Rouge I LLC is a Louisiana-limited
liability company that owns and operates a shopping center complex
located in Baton Rouge. The Debtor filed for relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. M.D. La. Case No. 20-10632)
on September 8, 2020.
The case is assigned to Judge Douglas D. Dodd.
The Debtor is represented by Cherie Dessauer Nobles, Esq., at
Heller, Draper, Patrick, Horn & Manthey, L.L.C.
L C OF SHREVEPORT: Seeks to Hire Trent Millican as Accountant
-------------------------------------------------------------
L C of Shreveport, LLC and C L of Bossier, LLC seek approval from
the U.S. Bankruptcy Court for the Western District of Louisiana to
employ Trent Millican, CPA, RBM LLP as accountant.
The firm will provide these services:
(a) auditing services;
(b) prepare accounting statements;
(c) prepare monthly accountings to the bankruptcy court;
(d) prepare cash flow forecast;
(e) prepare a plan of reorganization;
(f) prepare tax returns;
(g) prepare bankruptcy schedules, statements of financial
affairs and any other filings required; and
(h) all other necessary accounting services.
Trent Millican, the firm's accountant who will provide the
services, will be billed at his hourly rate of $225, plus
reimbursement of expenses.
Mr. Millican disclosed in a court filing that he and the firm are
"disinterested persons" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Trent Millican
Trent Millican, CPA, RBM LLP
624 Travis Street
Shreveport, LA 71101
About L C of Shreveport
L C of Shreveport, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No.
21-10113) on Feb. 9, 2021. Chad D. Fangue, managing member, signed
the petition. In the petition, the Debtor disclosed $1 million to
$10 million in both assets and liabilities. Judge John S. Hodge
oversees the case. The Debtor tapped Robert W. Raley, Esq., as
counsel and Trent Millican, CPA, RBM LLP as accountant.
LUMEN TECHNOLOGIES: Fitch Affirms 'BB' IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings affirmed the Issuer Default Ratings for Lumen
Technologies, Inc. and its subsidiaries at 'BB' with Stable
Outlooks. This affirmation primarily reflects progress in reducing
debt, realizing synergies following the merger with Level 3
Communications, Inc. in late 2017, and ongoing additional
cost-reduction plans. Fitch's base case assumption reflects further
planned debt reduction over the next few years. Concerns include
the impact on revenues and EBITDA in 2022 as Connect America Fund
II (CAF II) federal support revenue goes away. The impact on FCF is
expected to largely be offset by lower capex as the CAF II program
winds down.
KEY RATING DRIVERS
Key Competitor in Business Services: Lumen operates in an industry
where scale is a key factor, and is a large competitor overall, the
second-largest operator serving business customers after AT&T Inc.
Lumen is modestly larger than the business customer operations of
Verizon Communications Inc. The company's network capabilities, in
particular a strong metropolitan network, and a broad product and
service portfolio emphasizing IP-based infrastructure and managed
services, provide the company with a solid base to grow enterprise
segment revenue.
Prioritizing Debt Reduction: Lumen reduced its common dividend in
February 2019, cutting annual payments to approximately $1.08
billion from $2.30 billion. The additional annual FCF of more than
$1.2 billion is being directed to a faster pace of debt repayment
over three years. The company also announced a commitment to a
lower and narrower range of net target leverage. Over the next few
years, the company is targeting net debt/adjusted EBITDA of
2.75x-3.25x, down from 3.0x- 4.0x. Fitch is encouraged by the
revised capital-allocation policies and believes this will better
position the company in the long term.
Cost Reductions: Operational initiatives set in motion in early
2019 targeted an annualized $800 million-$1 billion of additional
EBITDA-improving initiatives over three years at a cost of $450
million-$650 million. Lumen says it achieved a run rate of $830
million in annualized cost savings in 4Q20, after exiting 2019 at a
run rate of $430 million.
Secular Challenges Facing Telecoms: In Fitch's view, Lumen
continues to face secular challenges similar to other wireline
operators in its residential business. Following the acquisition of
Level 3, the consumer operation became a much smaller part of the
overall business and accounts for approximately one-quarter of
revenue, down from 35% in 2016. Fitch expects this share to
continue to decline over time, given legacy revenue trends and a
more targeted investment strategy in the segment.
Parent-Subsidiary Relationship: Fitch links the ratings of Lumen
and its operating subsidiaries, based on strong operational and
strategic ties.
DERIVATION SUMMARY
Lumen has a relatively strong competitive position based on the
scale and size of its operations in the enterprise/business
services market. In this market, Lumen has a moderately smaller
revenue position than AT&T Inc. (BBB+/Stable) and is similar in
size to Verizon Communications Inc. (A-/Stable). All three
companies have an advantage with national or multinational
companies, given extensive footprints in the U.S. and abroad. Lumen
also has a larger enterprise business that notably differentiates
it from other wireline operators, such as Windstream Services, LLC
and Frontier Communications Corporation (BB-(EXP)).
AT&T and Verizon maintain lower financial leverage, generate higher
EBITDA margins and FCF, and have wireless offerings providing more
service diversification compared with Lumen. FCF improved at Lumen
due to the dividend reduction and cost synergies.
Lumen has lower exposure to the secularly challenged residential
market than wireline operators Frontier and Windstream. Within the
residential market, incumbent wireline operators face wireless
substitution and competition from cable operators with
facilities-based triple-play offerings, including Comcast Corp.
(A-/Stable) and Charter Communications Inc. Fitch rates Charter's
indirect subsidiary CCO Holdings, LLC 'BB+'/Outlook Stable. Cheaper
alternative offerings, such as voice over internet protocol and
over-the-top video services, provide additional challenges.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- Fitch assumes revenues will decline in the mid-single-digits
in 2021, due to pressure in legacy business lines, a slower
recovery in the business market as purchasers delay decisions
and due to the sale of a small business line in 2020. Revenues
further decline in 2022 due to the expiration of the CAF II
funding;
-- EBITDA margins are expected to be around 42% in 2021;
-- EBITDA margins decline 50 bps to 100 bps in 2022-2024 due to
the loss of CAF II funding;
-- Fitch expects capex to be toward the middle of company
guidance of $3.5 billion-$3.8 billion. Capex declines in 2022
based on the expiration of CAF II leading to lower spending in
areas previously supported by this subsidy;
-- FCF directed to deleveraging over the forecast horizon.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Gross leverage, defined as total debt with equity
credit/operating EBITDA, remaining at or below 3.0x, with FFO
leverage of 3.0x, while consistently generating positive FCF
margins in the mid-single-digits;
-- Demonstrating consistent EBITDA and FCF growth.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A weakening of Lumen's operating results, including
deteriorating margins and consistent mid-single-digit or
greater revenue erosion brought on by difficult economic
conditions or competitive pressures the company is unable to
offset through cost reductions;
-- Discretionary management decisions, including but not limited
to execution of M&A activity that increases gross leverage
beyond 4.5x, with FFO leverage of 4.5x, in the absence of a
credible deleveraging plan.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Lumen's cash and cash equivalents totalled $406
million at Dec. 31, 2020. Total debt as of Dec. 31, 2020 was just
under $31.9 billion before finance leases, unamortized discounts,
debt issuance costs and other adjustments. On the same basis, pro
forma for subsequent events, YE 2019 debt was $33.7 billion.
Lumen continued to actively managed its debt structure in 2020, and
in addition to reducing total debt, refinanced approximately $13
billion in long-term debt, which has reduced interest expense and
extended maturities. since the end of 2018, reducing its debt
maturities on a pro forma basis during 2020-2025 by more than $15
billion through repayment or by extending maturities.
The credit agreement was amended and restated in January 2020. The
$2.2 billion senior secured revolving credit facility had $150
million drawn as of Dec. 31, 2020. Lumen's secured credit facility
benefits from secured guarantees by Qwest Communications
International, Inc.; Qwest Services Corporation; CenturyTel
Investments of Texas, Inc.; and CenturyTel Holdings, Inc.
A stock pledge is provided by Wildcat HoldCo, LLC, the parent of
Level 3 Parent, to the Lumen credit facility. The credit facility
is guaranteed on an unsecured basis by Embarq Corporation and Qwest
Capital Funding, Inc. The largest regulated subsidiary, Qwest
Corporation, does not guarantee Lumen's secured facility, nor does
Level 3 Parent.
The Lumen senior secured notes are guaranteed by the same
subsidiaries that guarantee the senior secured credit facilities
and will be secured by the same collateral. CenturyLink
Communications, LLC was released as a guarantor of the senior
secured credit facility, which makes the notes pari passu with the
credit facility.
The secured revolving credit facility and Term Loan A limit Lumen's
gross debt/EBITDA to no more than 4.75x. The current credit
agreement requires cash interest coverage to be no less than 2.0x.
The company is subject to an excess cash flow sweep of 50%, with
step downs to 25% and 0%, at total leverage of 3.5x and 3.0x,
respectively. The excess cash flow calculation provides credit for
voluntary prepayments and certain other investments.
Fitch estimates 2021 FCF, or cash flow from operations less capex
and dividends, will be in the $1.5 billion to $1.6 billion range.
Long-term debt maturities in 2021 total approximately $2.4 billion,
and $1.5 billion in 2022.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
LUXURY OUTER: Bankruptcy Administrator Unable to Appoint Committee
------------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Eastern District of North
Carolina disclosed in a court filing that no official committee of
unsecured creditors has been appointed in the Chapter 11 case of
Luxury Outer Banks Homes, LLC.
About Luxury Outer Banks Homes
Luxury Outer Banks Homes, LLC owns a house and lot located at 1340
DuckRoad, Duck, N.C., valued at $4.85 million, and a house and lot
located at 116 Duchess Court, Kill Devil Hills, N.C., valued at
$489,700.
Luxury Outer Banks Homes sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.C. Case No. 21-00508) on Mar. 5,
2021. Kimberly H. Lane, manager, signed the petition. At the time
of the filing, the Debtor disclosed total assets of $5,352,747 and
total liabilities of $2,192,061.
Judge Joseph N. Callaway oversees the case.
Howard, Stallings, From, Atkins, Angell & Davis, PA, led by James
B. Angell, Esq., serves as the Debtor's counsel.
MARZILLI MACHINE: Unsecured Creditors to Recover 25% in Plan
------------------------------------------------------------
Marzilli Machine Co., filed with the U.S. Bankruptcy Court for the
District of Massachusetts a Chapter 11 Plan of Reorganization and a
corresponding Disclosure Statement.
The Debtor's Plan is a "bootstrap" or stand-alone plan. It relies
on the future income of the Debtor to pay its obligations under the
Plan.
The Plan contemplates:
* the satisfaction of all administrative and priority claims,
* the satisfaction of the allowed secured claims of Bristol
County Savings Bank and Mass Growth Capital Corp.,
* the satisfaction of the secured portion of the claims of Bank
of the West, U.S. Bank, and Siemens Financial Services, and
* the payment of a 25% dividend to holders of allowed general
unsecured claims, over a period of 60 months from the effective
date of the Plan.
Class 4A Allowed General Unsecured Claims are estimated to total
$569,192. Each holder of an Allowed Class 4A Claim shall receive
payment equal to 25% of the allowed claim, to be paid as follows:
(i) each holder of an allowed Class 4A claim entitled to receive
a total distribution under the Plan in an amount equal to or less
than $500 will receive a one-time lump sum cash payment on the
Effective Date; and
(ii) each holder of an allowed Class 4A claim entitled to receive
a total distribution under the Plan in an amount exceeding $500
will be paid (a) distributions in deferred cash payments, over 60
months from the Effective Date; or (b) may elect instead to be
treated as a di minimis claimant by voluntarily agreeing to reduce
total distribution up to a maximum amount of $500.
Class 4B Allowed Claim of The U.S. Small Business Administration
(SBA) amounting to $150,894 on account of a COVID-19 related EIDL
loan is impaired. The Debtor will pay the SBA Claim in full over a
period of up to 30 years, according to the terms of the EIDL loan
documents.
As to Class 5 Equity Interests, the equity interests holders James
Marzilli, Lee Anne Marzilli and Daniel Martins will receive no
distribution under the Plan but their interests will remain
unaltered.
A copy of the Disclosure Statement is available for free at
tinyurl.com/ums7r2xc from PacerMonitor.com.
About Marzilli Machine Co.
Marzilli Machine Co. -- https://marzmachine.com -- is a
manufacturer of military, aerospace, medical and firearms
components. Marzilli Machine filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass.
Case no. 20-12007) on Oct. 2, 2020.
Marzilli Machine's President Lee Anne Marzilli signed the petition.
At the time of filing, the Debtor disclosed $1,155,586 in assets
and $1,763,992 in liabilities.
Judge Christopher J. Panos oversees the case. Madoff & Khoury, LLP
serves as Debtor's legal counsel.
MED EQUITY: Seeks to Hire Fredman Lieberman Pearl as Counsel
------------------------------------------------------------
Med Equity LLC seeks approval from the U.S. Bankruptcy Court for
the Central District of California to employ Fredman Lieberman
Pearl, LLP as its bankruptcy counsel.
The firm will render these legal services:
(a) assist the Debtor in complying with the requirements of
the Office of the U.S. Trustee and advise the Debtor regarding its
duties;
(b) assist in administering the Debtor's Chapter 11 case,
marshaling and preserving assets, and formulating a Chapter 11 plan
of reorganization.
(c) appear in the bankruptcy court;
(d) negotiate with parties-in-interest and advise the Debtor
about its roles in those negotiations;
(e) examine claims filed against the estate and resolve any
disputes;
(f) prosecute avoidance and adversary actions or any actions
removed to the bankruptcy court;
(g) assist and guide other bankruptcy professionals; and
(h) perform all other legal services that may be required in
the Debtor's case.
On the petition date, the firm received $15,000 from CalPac
Mortgage Fund LLC and $11,717 from Pukini Trust. Both payments
were loans to the Debtor and secured by a pre-existing junior deed
of trust against the Debtor's real property.
The hourly rates of the firm's counsel and staff are as follows:
Howard S. Fredman $565
Marc A. Lieberman $565
Mark J. Pearl $565
Greg Yaris $550
Alan W. Forsley $500
Legal Assistant $165
Heavy data entry and secretarial overtime $45
The firm will also seek reimbursement for out-of-pocket expenses
incurred.
Alan Forsley, Esq., a principal at Fredman Lieberman Pearl,
disclosed in a court filing 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:
Marc A. Lieberman, Esq.
Alan W. Forsley, Esq.
Fredman Lieberman Pearl LLP
1875 Century Park East, Suite 2230
Los Angeles, CA 90067
Telephone: (310) 284-7350
Facsimile: (310) 432-5999
Email: marc.lieberman@flpllp.com
alan.forsley@flpllp.com
About Med Equity
Med Equity, LLC filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-12447) on
March 26, 2021, disclosing $1 million to $10 million in both assets
and liabilities. Joshua R. Pukini, managing member, signed the
petition. Judge Ernest M. Robles oversees the case. Fredman
Lieberman Pearl LLP serves as the Debtor's counsel.
MEN'S WEARHOUSE: Moody's Rates $25MM Add-on Priority Term Loan 'B3'
-------------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to The Men's
Wearhouse, LLC's $25 million add on senior secured priority term
loan due 2025 and changed the company's outlook to negative from
stable. At the same time, Moody's affirmed the company's existing
ratings, including the Caa1 corporate family rating, Caa1-PD
probability of default rating, B3 rating on the $75 million senior
secured priority term loan due 2025, and Caa1 rating on the $365
million takeback senior secured term loan due 2025.
Net proceeds from the $25 million add-on senior secured priority
term loan along with $50 million of new junior lien convertible
notes due 2024 (not rated by Moody's) were used to repay $30
million of outstanding borrowings under the company's asset-based
revolving credit facility due 2024 ("ABL" not rated by Moody's),
with remaining proceeds placed in a restricted cash account held by
New TMW MidCo LLC, which may be withdrawn and contributed to Men's
Wearhouse, LLC so long as pro forma liquidity is less than $87.5
million (the threshold under the takeback and add-on priority term
loan facility to exercise the PIK interest option), with any
remaining proceeds to be released on December 2, 2021. As part of
the transaction, New TMW TopCo , Inc. and New TMW MidCo LLC were
added as Guarantors.
While the added liquidity is credit positive for Men's Wearhouse,
the transaction highlights the ongoing risks and uncertainties
around the pace of recovery from the coronavirus pandemic,
including easing of restrictions and the recovery in consumer
demand. Thus the outlook change to negative reflects the risk that
continued weak demand for men's tailored clothing and rentals will
further impact the company's ability to drive a recovery in
operating performance, cash flow and liquidity. The company has yet
to demonstrate that it can consistently generate positive free cash
flow and reduce its currently high outstanding revolver borrowings.
Moody's regards the coronavirus outbreak as a key social risk under
its ESG framework given the substantial implications for public
health and safety.
Assignments:
Issuer: Men's Wearhouse, LLC (The)
Priority Senior Secured Bank Credit Facility (Local Currency),
Assigned B3 (LGD3)
Outlook Actions:
Issuer: Men's Wearhouse, LLC (The)
Outlook, Changed To Negative From Stable
Affirmations:
Issuer: Men's Wearhouse, LLC (The)
Probability of Default Rating, Affirmed Caa1-PD
Corporate Family Rating, Affirmed Caa1
Priority Senior Secured Bank Credit Facility (Local Currency),
Affirmed B3 (LGD3)
Senior Secured Bank Credit Facility (Local Currency), Affirmed
Caa1 (LGD4)
RATINGS RATIONALE
Men's Wearhouse's Caa1 CFR reflects its current weak operating
performance and credit metrics stemming from significant
pandemic-related declines in revenue and earnings. Although the
company materially improved its capital structure upon exit from
its chapter 11 bankruptcy, financial leverage remains very high and
interest coverage weak due to depressed sales and negative
earnings. While Moody's expects sequential improvement, sales and
earnings will remain below 2019 levels for the next several years
as the company contends with pandemic-related changes in consumer
behavior. Moody's expects sequential improvement to stem from
improved sales trends and cost savings and efficiency initiatives,
partly offset by margin pressures which include mix shift toward
lower margin casual clothing and online sales, and continued
investment in growth initiatives such as e-commerce and digital
marketing. The rating also reflects governance considerations,
including the company's recent bankruptcy emergence and ownership
by former debtholders prior to bankruptcy.
The rating is supported by Moody's expectation for adequate
liquidity over the next twelve months, which was recently boosted
by an additional $75 million of debt capital into the company.
Moody's also expects free cash flow to turn positive during 2021
due to working capital improvement, with reductions in borrowings
under its ABL facility. Liquidity also benefits from the lack of
near-term maturities, and the extension of the ABL and term loan
financial maintenance covenant holidays until July 2022 and January
2023, respectively; although significant operating improvement will
be needed to meet those covenant requirements. The rating also
reflects Men's Wearhouse's meaningful scale in the men's clothing
market, offering a similar product mix and brand diversity, with
each brand focusing on different customer demographics. While the
company operates in a relatively narrow segment of the apparel
industry, primarily selling and renting men's tailored and polished
casual clothing for business and special occasions, Moody's views
this category as generally having less fashion risk than most
segments of apparel retailing. Nevertheless, the shift towards more
casual clothing and increased penetration of online shopping have
been a persistent challenge, and these trends have accelerated due
to the pandemic.
Former parent company, Tailored Brands, Inc., and certain
subsidiaries filed for Chapter 11 bankruptcy on August 2, 2020. On
December 1, 2020, Tailored Brands, Inc. completed its financial
restructuring and emerged, with debt having been reduced by around
$680 million (not including the new $25 million priority and $50
million convertible incremental debt), or nearly 50%, to less than
$750 million. The Men's Wearhouse LLC, an intermediate holding
company, is the borrower under the rated facilities. The B3 ratings
on the $75 million priority senior secured term loan due 2025 and
$25 million priority senior secured term loan add-on due 2025
reflect their priority first lien on all assets of the borrower,
except short term assets such as inventory and receivables on which
it has a second lien behind the unrated $430 million ABL revolver.
The Caa1 rating on the $365 million senior secured term loan due
2025 reflects its second priority position behind the $75 million
priority senior secured term loan and sizeable ABL revolver. These
rated facilities also benefit from the fairly sizeable level of
more junior claims in the capital structure, including the unrated
$50 million junior lien 6% pay-in-kind (PIK) convertible notes due
2024, and unsecured claims such as leases and accounts payable.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if liquidity deteriorates, such as
weaker free cash flow and an inability to reduce revolver debt, if
revenue and earnings trends do not sequentially improve, or if its
probability of default otherwise increases for any reason.
The ratings could be upgraded if operating performance sustainably
improves such that debt/EBITDA is expected to remain below 6.0
times and EBIT/Interest sustained above 1.0 time, while maintaining
an adequate overall liquidity profile.
The Men's Wearhouse, LLC is an omni-channel specialty retailer of
menswear, including suits, formal wear and a broad selection of
business casual offerings. The company operates over 1,000 stores
in the U.S. and Canada under the Men's Wearhouse, Jos. A. Bank,
Moore's Clothing for Men and K&G brands. Revenues for the twelve
month period ended October 31, 2020 were less than $1.5 billion.
The company is owned by former debt holders prior to its bankruptcy
filing, with no one owner having majority control.
The principal methodology used in these ratings was Retail Industry
published in May 2018.
MERCY HOSPITAL: PCO Seeks to Hire Sugar Felsenthal as Legal Counsel
-------------------------------------------------------------------
David Crapo, the patient care ombudsman appointed in the Chapter 11
cases of Mercy Hospital and Medical Center and Mercy Health System
of Chicago, seeks approval from the U.S. Bankruptcy Court for the
Northern District of Illinois to employ Sugar Felsenthal Grais &
Helsinger, LLP as his legal counsel.
The ombudsman requires the assistance of commercial bankruptcy
counsel to carry out certain procedural duties and, if appropriate,
provide other legal services in connection with the Debtors'
bankruptcy cases.
The firm's services include:
a. representing the ombudsman in any proceeding or hearing in
the bankruptcy court;
b. filing court papers;
c. preparing and filing fee applications and any required
notices; and
d. performing such other legal services as may be required
under the circumstances of these cases in accordance with the
ombudsman's powers and duties under the Bankruptcy Code.
The firm has agreed to render services in accordance with its
ordinary and customary hourly rates, capped at $595 per hour.
Sugar Felsenthal is a disinterested person within the meaning of
Sections 101(14) and 327(a) of the Bankruptcy Code, according to
court papers filed by the firm.
The firm can be reached through:
Mark S. Melickian, Esq.
Sugar Felsenthal Grais & Helsinger LLP
30 N. LaSalle St., Ste. 3000
Chicago, IL 60602
Tel: 312.704.9400
Fax: 312.372.7951
Email: mmelickian@sfgh.com
About Mercy Hospital
Mercy Hospital operates the general acute care hospital known as
Mercy Hospital & Medical Center located at 2525 South Michigan
Ave., Chicago. The hospital offers inpatient and outpatient
services. Mercy Health System of Chicago, an Illinois
not-for-profit corporation, is the sole member of Mercy Hospital.
The health care facilities are part of Trinity Health's network of
health care providers. On the Web: http://www.mercy-chicago.org/
Mercy Hospital and Medical Center and Mercy Health System of
Chicago sought Chapter 11 protection (Bankr. N.D. Ill. Case Nos.
21-01805 and 21-01806) on Feb. 10, 2021. Mercy Hospital estimated
$100 million to $500 million in assets and liabilities as of the
bankruptcy filing.
Judge Timothy A. Barnes oversees the case.
Foley Lardner LLP, led by Matthew J. Stockl, is the Debtors' legal
counsel. Epiq Corporate Restructuring, LLC is the claims,
noticing, solicitation and administrative agent.
David N. Crapo is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases. The PCO is represented by Sugar
Felsenthal Grais & Helsinger, LLP.
MITEL NETWORKS: S&P Downgrades ICR to 'CCC+', Outlook Negative
--------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Ottawa-based telephony communications company Mitel Networks
(International) Ltd. to 'CCC+' from 'B-'.
S&P said, "At the same time, S&P Global Ratings lowered its
issue-level ratings on the company's first-lien senior secured debt
to 'CCC+' from 'B-' and second-lien senior secured debt to 'CCC-'
from 'CCC'. The recovery ratings are unchanged at '3' and '6',
respectively.
"The negative outlook reflects the execution risk surrounding
Mitel's turnaround strategy to transition customers to the
company's cloud-based offering (UCaas) from its on-premise service
offering. Weak performance against a backdrop of unsustainable
capital structure and negative FOCF could make it vulnerable for an
early debt restructuring.
"Mitel's credit metrics will remain weak through 2021. The
downgrade reflects our expectation that Mitel's capital structure
will be unsustainable over the next 12 months with leverage
forecast at 10x. We anticipate the company's adjusted EBITDA will
decline by about the low-to-mid-teens percentage area in 2021
compared with 2020 as Mitel shifts to its new strategy to capture
market share in the cloud-based Ucaas service offering and
continues its customer transition to this cloud-based platform from
its on-premise offering. Absent a meaningful EBITDA growth and
improvement in FOCF generation over the next 12-24 months, we
expect the company's credit quality will remain pressured and
liquidity will deteriorate, making the company vulnerable to an
early debt restructuring."
Execution risks surrounding the company's new growth strategy could
derail Mitel's ability to improve credit measures over the next
12-24 months. The company's strategy to transition customers to its
cloud-based service offering could improve Mitel's recurring
revenue base in the long term and support better EBITDA
predictability and stability. S&P said, "We anticipate the
company's newly formulated strategy through Mitel's partner vendor
program, will allow it to gradually transform its business mix from
on premise to cloud. The resellers would not only target new
customers but also provide support to the new cloud-based
customers, thus accelerating the pace of transition while also
supporting Mitel's long-term cash flow generation. Despite the
higher recurring revenue potential, we view the strategy as
dilutive to Mitel's profitability levels (adjusted EBITDA margins
to be 14%-15%, lower by 300 basis points compared with 2020). In
our view, the lower EBITDA margins reflect higher sales, general,
and administrative costs associated with the commissions to
value-added resellers, while jointly owning the customer
relationship and transitioning the customer to the cloud. In
addition, execution risks surrounding the successful implementation
of this new strategy, against the backdrop of an intensely
competitive market, could dampen Mitel's ability to meaningfully
improve EBITDA and credit metrics over the next 12-24 months."
Near-term liquidity should be sufficient to support the company's
turnaround strategy. S&P said, "We expect the company will exhibit
negative FOCF (S&P Global Ratings' adjusted) of US$5 million-US$10
million over the next 12 months reflecting lower EBITDA and higher
levels of capital expenditure (capex). Mitel's investment in cloud
infrastructure, to support the company's growth strategy, results
in an elevated level of capex (about US$40 million in 2021 compared
with US$24 million in 2020). However, we expect the negative FOCF
and US$11.2 million scheduled debt amortization will be funded
through the revolving credit facility (RCF; availability of about
US$65 million as of fourth-quarter 2020) and cash on hand (about
US$53 million of as of fourth-quarter 2020). Therefore, in our
view, Mitel has sufficient liquidity to fund its new strategy while
it navigates through a tough operating environment and transforms
its business to the cloud-based service offering."
S&P said, "The negative outlook reflects our view of the execution
risks surrounding Mitel's ability to transition customers to the
cloud-based offering amid an intensely competitive market. Weak
performance against a backdrop of an unsustainable capital
structure and negative FOCF could lead to liquidity tightness and
make Mitel vulnerable to an early debt restructuring."
S&P could lower the ratings over the next 12 months if it envisions
a default or distressed exchange in the next 12 months. Conditions
that could lead to such a scenario are:
-- If the company's operating performance weakens due to Mitel's
inability to transition customers to the cloud or
higher-than-anticipated on-premise revenues declines lead to EBITDA
deterioration.
-- S&P believes that the company continues to burn cash,
materially higher than in our base-case scenario, which could lead
to a liquidity crisis.
S&P could revise the outlook to stable over the next 12 months if
the company is successful in transitioning customers to the cloud
and delivers meaningful organic EBITDA growth without pressuring
margins more than its base-case assumptions, leading to improvement
in leverage measures and an ability to maintain adequate levels of
liquidity.
MONITRONICS INT'L: Moody's Alters Outlook on Caa1 CFR to Positive
-----------------------------------------------------------------
Moody's Investors Service affirmed Monitronics International,
Inc.'s credit ratings, including the Caa1 corporate family rating
and Caa1-PD Probability of Default Rating, as well as B1 facility
ratings on the residential alarm monitor's first-lien
super-priority debt, including a $145 million revolver and a $150
million term loan. Moody's affirmed the Caa2 instrument rating on
the company's $812 million (amortized amount as of year-end 2020)
first-lien term loan. Monitronics' Speculative Grade Liquidity
rating continues to be SGL-3, reflecting adequate liquidity.
Moody's changed the company's outlook to positive, from stable.
Affirmations:
Issuer: Monitronics International, Inc.
Corporate Family Rating, Affirmed Caa1
Probability of Default Rating, Affirmed Caa1-PD
Senior Secured Super-priority 1st lien Bank Credit Facilities,
Affirmed B1 (LGD1)
Senior Secured 1st lien Bank Credit Facility, Affirmed Caa2
(LGD4)
Outlook Actions:
Issuer: Monitronics International, Inc.
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
Monitronics' improved outlook takes into account a generally
positive trend in credit metrics and operating performance,
including revenue stabilization and declining execution risks with
regard to the company's evolving sales strategy. In 2020
Monitronics posted improvements in attrition and creation
multiples, as well as in cash flow from operations and free cash
flow, the latter which turned slightly positive. Revenues were
effectively flat for the year, at $504 million, in contrast to
Moody's expectations for a low-single-digit percentage decline.
While Moody's expects operating trends to continue to be moderately
favorable again this year, the company faces tens of millions of
dollars in annual upgrade expenditures for customers that use 3G or
CDMA telecom technologies that those technologies' providers are in
the process of phasing out. At present approximately 35% of
Monitronics customers may require their alarm monitoring systems to
be upgraded in order to work with the next generation of telecom
technology. Through year-end 2020, Monitronics has spent close to
30% of the total, approximately $90 million estimate for conversion
costs. These likely obligations -- subscribers with older cellular
networks may need to have certain security equipment replaced to
maintain their monitoring service -- will make demands on
Monitronics' liquidity and could pressure attrition. Other
initiatives like bulk purchases of subscribers and earn-out
obligations could strain liquidity. Monitronics has a small amount
of cash on hand and about $125 million of availability under its
revolver that Moody's believes provide adequate liquidity to meet
the combined demands of growth initiatives and 3G conversion
outlays.
The positive outlook takes into account Moody's expectations for a
continuation in 2021 of generally improving trends in operating
metrics that were posted in 2020, including a return to revenue
growth and improvements in subscriber attrition rates, creation
multiples, and steady-state free cash flow, the last of which
Moody's expects may turn slightly positive this year. The outlook
also reflects a continued and successful transition from an
all-dealer network to a hybrid sales model employing both dealer
and direct-to-consumer ("DTC") channels, with the expectation that
dealer sales will generate three quarters of revenue by the end of
this year, as compared with more than 90% in 2019.
Bulk subscriber purchases and DTC sales (the latter which includes
lower-ARPU, DIY customers) are becoming an increasingly important
revenue source for Monitronics and will help to continue to bring
down creation costs given lessened reliance on the dealer network.
Attrition should continue to ease over the next couple years as
well, as the company's robust analytical and marketing efforts to
support customer retention take hold. Debt-to-RMR leverage over the
ratings horizon will hold within a band of 25 to 28 times, strong
relative to most other rated alarm monitoring companies.
Moody's views Monitronics' liquidity as adequate. The company as of
early 2021 continues to have a small amount of cash on hand and
ample availability under the $145 million revolver that, Moody's
believe, provide adequate liquidity to meet the combined demands of
growth initiatives and 3G conversion outlays. Moody's expect
steady-state free cash flow as a percentage of debt in the
low-single-digits, a marked improvement over the negative levels of
the last three years. Liquidity is supported by the standard
industry assumption that an alarm monitor can curtail the active
subscriber acquisition programs in order to free up funds.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Monitronics can maintain improving
operating trends, including revenue growth, and if liquidity and
free cash flow improve. The ratings could be downgraded if revenue
growth turns significantly negative, or if Monitronics' liquidity
position deteriorates.
Doing business as Brinks Home Security, Monitronics International,
Inc. provides alarm monitoring services to nearly 940,000 (as of
December 31, 2020) mainly residential customers in the U.S. and
Canada. Moody's expects the company will generate 2021 revenue of
about $530 million, a 5% improvement over 2020.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
MOUNT ETNA PARTNERS: Bank Seeks to Bar Use of Cash Collateral
-------------------------------------------------------------
Central Bank of Tampa, FL asks the U.S. Bankruptcy Court for the
Western District of Missouri to prohibit Mount Etna Partners, LLC
and affiliate Mount Etna Investments, Inc., from using cash
collateral.
Central Bank also asks the Court to compel the Debtors to account
for the use of cash collateral, and to segregate all cash
collateral currently in the Debtors' possession or control.
Central Bank says the Debtors owe it a total of $1,228,181 in
principal, interest, fees, costs and expenses, pursuant to an SBA
Promissory Note between the parties, as of the Petition Date.
Under the Note and Security Agreement, Central Bank is entitled to
its attorney's fees, costs and other expenses incurred in
collection of the debt, including those incurred in this
proceeding. The Bank says the Debtors failed to make the payments
due for July, August and September 2019 and have failed to make any
payments thereafter.
On September 10, 2019, Central Bank demanded payment of the past
due amounts under the Note, but the Debtors have failed and refused
to pay the balance due. On March 28, 2020, Central Bank
accelerated the debt and sued for the full amount thereof by filing
a Petition in the Circuit Court of Jasper County, Missouri, Case
No. 20AO-CC00080.
Alternatively, Central Bank asks the Court to compel the Debtors to
pay adequate protection for the use of cash collateral, and for
allowance of an administrative expense claim equal to the amount of
cash collateral used without Court consent. The debt is secured by
an interest in the Debtors' personal property with an estimated
value of $231,300.
A copy of the motion is available at https://tinyurl.com/584m2njn
from PacerMonitor.com free of charge.
About Mount Etna Partners
Mount Etna Partners, LLC -- http://www.americanfibrex.com/-- is a
manufacturer of high temperature industrial insulation products.
It conducts business under the name American Fibrex.
Mount Etna Partners filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No.
21-30025) on Feb. 23, 2021. Garrett Reincke, president and chief
executive officer, signed the petition. In the petition, the
Debtor estimated $500,000 to $1 million in assets and $1 million to
$10 million in liabilities.
Collins, Webster & Rouse P.C. serves as the Debtor's legal
counsel.
Counsel to Central Bank of Tampa, FL, as lender:
Dan Nelson, Esq.
KUTAK ROCK LLP
John Q. Hammons Parkway, Suite 800
Springfield, MO 65806
Telephone: (417) 720-1410
Telecopier: (417) 720-1411
E-mail: Dan.Nelson@kutakrock.com
- and -
Stephanie C. Lieb, Esq.
TRENAM LAW
101 E. Kennedy Boulevard, Suite 2700
Tampa, FL 33602
Telephone: (813) 227-7469
Facsimile: (813) 227-0469
MYSTIC WINE: Gets Interim OK to Hire Schatzman as Legal Counsel
---------------------------------------------------------------
Mystic Wine & Spirits, Inc. received interim approval from the U.S.
Bankruptcy Court for the Southern District of Florida to hire
Schatzman & Schatzman, P.A. as its legal counsel.
The firm will render these services:
a. advise the Debtor with respect to its power and duties and
the continued management of its business operations;
b. advise the Debtor with respect to its responsibilities in
complying with the U.S. trustee's operating guidelines and
reporting requirements and with the rules of the court;
c. prepare legal documents;
d. protect the interest of the Debtor in all matters pending
before the court;
e. represent the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan.
The firm received a retainer in the amount of $10,000.
Jeffrey Schatzman, Esq. of Schatzman assured the court that the
firm is a disinterested person as required by 11 U.S.C. 101 (14).
The firm can be reached through:
Jeffrey N. Schatzman, Esq.
Schatzman & Schatzman, P.A.
9990 SW 77th Ave Penthouse 2
Miami, FL 33156
Phone: +1 305-670-6000
Email: jschatzman@schatzmanlaw.com
About Mystic Wine & Spirits
Mystic Wine & Spirits, Inc. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
21-12894) on March 29, 2021, listing under $1 million in both
assets and liabilities. Judge A. Jay Cristol oversees the case.
Jeffrey N. Schatzman, Esq., at Schatzman & Schatzman, P.A.,
represents the Debtor as legal counsel.
NEWS CORP: $1BB Upsized Notes No Impact on Moody's Ba1 CFR
----------------------------------------------------------
Moody's Investors Service says News Corporation's ratings,
including the Ba1 Corporate Family Rating, Ba1-PD Probability of
Default rating, Ba2 Senior Unsecured Notes rating, and SGL-1
Speculative Grade Liquidity ratings are unaffected by the upsize of
the unsecured notes to $1 billion, from $750 million. The outlook
remains stable.
Moody's view the upsize as credit neutral. The upsize will increase
leverage by approximately .25x but have an insignificant affect on
free cash flow and provides additional liquidity.
News Corp (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).
NINE POINT: Court Okays June 2021 Auction, $20 Million DIP Loan
---------------------------------------------------------------
Law360 reports that Colorado-based oil and gas company Nine Point
Energy got approval Monday, April 12, 2021, for its Chapter 11
financing and auction process after telling a Delaware bankruptcy
judge it had reached a compromise with creditors who said the sale
was moving too fast.
Pumpjacks work in a field near Lovington, New Mexico. On Monday,
oil and gas company Nine Point Energy got the green light for its
Chapter 11 financing and auction process. At a brief virtual
hearing, U.S. Bankruptcy Judge Mary Walrath approved Nine Point's
debtor-in-possession financing and asset sale procedures.
About Nine Point Energy
Nine Point Energy Holdings, Inc. -- https://ninepointenergy.com/ --
is a private exploration and production company focused on value
creation through the safe, efficient development of oil and gas
assets within the Williston Basin.
Nine Point Energy Holdings, Inc., sought Chapter 11 protection
(Bankr. D. Del. Case No. 21-10570) as the Lead Case, on March 15,
2021. The three affiliates that concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code are
Nine Point Energy, LLC (Bankr. D. Del. Case No. 21-10571), Foxtrot
Resources, LLC (Case No. 21-10572), and Leaf Minerals, LLC (Case
No. 21-10573). The cases are assigned to Judge Mary F. Walrath.
In the petitions signed by Dominic Spencer, authorized signatory,
the Debtors estimated assets and liabilities (on a consolidated
basis) in the range $100 million to $500 million.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Latham
& Watkins LLP as counsel; AlixPartners LLP as financial advisor;
Perella Weinberg Partners L.P. as investment banker; and Lyons,
Benenson & Co., Inc. as compensation consultant. Stretto is the
claims and noticing agent and administrative advisor.
NIR WEST: Wins Cash Collateral Access Thru June 30
--------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of California,
Sacramento Division, has authorized Walter R. Dahl, the Subchapter
V Trustee of NIR West Coast, Inc. dba Northern California Roofing
Co. to use cash collateral on an interim basis through June 30,
2021.
The Debtor is authorized to use cash collateral to pay customary
and normal operating expenses in the ordinary course of the
Debtor's business in accordance with the monthly budgets, with the
percentage variances noted for each line item being allowed at the
discretion of the Trustee.
As adequate protection for the use of its cash collateral, the
Trustee is authorized and directed to disburse to Bank of the West
the sum of $50,000 promptly upon entry of the order. In addition,
the Trustee will continue to disburse to Bank of the West the sum
of $1,250 on the 10th of each month, to be applied first to
post-petition interest, and second to principal.
Bank of the West and the U.S. Small Business Association are
granted replacement liens pursuant to 11 U.S.C. section 361(2) in
and to all property of the estate of the kind securing the Debtor's
indebtedness to them respectively, and such post-petition
replacement liens are deemed in the same priority and perfected to
the extent of the priority and perfection of such creditors
pre-petition liens, without the necessity of filing, executing or
recording any additional financing statements or other documents as
may otherwise be required under applicable non-bankruptcy law.
Notwithstanding such, Bank of the West and the US Small Business
Association may file or record any pleadings, financing statements
or other documents, including without limitation motions for relief
from stay, they deem necessary and appropriate.
A copy of the order and the Debtor's budgets for April, May, and
June is available at https://bit.ly/3rV4okZ from PacerMonitor.com.
The Debtor projects total income/gross sales of $335,000 for April,
$345,000 for May, and $355,000 for June.
About NIR West Coast, Inc.
dba Northern California Roofing Co.
NIR West Coast, Inc. -- https://northerncaliforniaroofing.com/ --
which conducts business under the name Northern California Roofing,
is a general building contractor that specializes in all phases of
the roofing process: from roof repairs to roof replacements, as
well as maintenance programs and complete roof overhauls.
NIR West Coast filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Calif. Case No.
20-25090) on Nov. 4, 2020. The petition was signed by Gregory Lynn,
president and chief executive officer. At the time of filing, the
Debtor estimated $1 million to $10 million in both assets and
liabilities.
Judge Christopher D. Jaime oversees the case.
Weintraub Tobin Chediak Coleman Grodin Law Corp. represents the
Debtor as legal counsel.
NOMAD RETAIL: Seeks Approval to Hire Steven Dexter as Accountant
----------------------------------------------------------------
NoMaD Retail, LLC and ETX Retail, LLC seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
Steven Dexter, CPA, a solo practitioner offering services in the
Houston metropolitan area, as its accountant.
Mr. Dexter will render these services:
a. prepare federal and requested state income tax returns;
b. perform bookkeeping services necessary to prepare income
tax returns;
c. prepare personal property tax returns, if requested;
d. provide tax advisory services; and
e. provide other accounting services as needed during the
administration of the Debtors' Chapter 11 cases.
The accountant will charge at the hourly rate of $125.
Mr. Dexter disclosed in a court filing that he is a "disinterested
person" within the definition of Section 101(14) of the Bankruptcy
Code.
Mr. Dexter can be reached at:
Steven M. Dexter, CPA
14510 Stroman Drive
Cypress, TX 77429
About NoMaD Retail
NoMaD Retail, LLC and ETX Retail, LLC filed for Chapter 11
protection (Bankr. S.D. Texas Lead Case No. 21-30821) on March 8,
2021. Ryan D. Vinson, president, signed the petitions. In the
petitions, NoMaD Retail disclosed $1 million to $10 million in both
assets and liabilities while ETX Retail disclosed $500,000 to $1
million in assets and $100,000 to $500,000 in liabilities.
Judge Christopher M. Lopez oversees the cases.
The Debtors tapped Haselden Farrow, PLLC and Steven M. Dexter, CPA
as their legal counsel and accountant, respectively.
OCCASION BRANDS: Seeks Confirmation of Liquidating Plan
-------------------------------------------------------
Old OB LLC, formerly known as Occasion Brands, LLC, before selling
its assets, is asking the Bankruptcy Court to confirm its
Liquidating Plan.
The sale of substantially all of the Debtor's assets closed on Nov.
24, 2020. Consummation of the sale transaction facilitated the
Debtor's ability to confirm the Plan that will provide, among other
things, for the transfer of the Debtor's assets to a Creditor Trust
and a substantial recovery to holders of General Unsecured Claims.
The Debtor sold most of its assets to New Occasion Brands, LLC (an
affiliate of Milestone Partners and David Wilkenfeld), the stalking
horse bidder. The purchase price for the Debtor's assets consisted
of, inter alia, (a) a credit bid in an amount equal to $1,500,000,
plus (b) $400,000, plus (c) 25.5% to 30.5% of the post-closing
gross proceeds of all Inventory acquired by Purchaser on the
Closing Date as calculated pursuant to the Net Sale Payout
Calculation, plus assumption by Purchaser at the Closing of the
Assumed Liabilities. The Debtor determined that the amount of the
Inventory purchased by the Stalking Horse Bidder at closing was
worth $5,678,108, providing for a Net Sale Payout Percentage of
28.08%.
Holders of Claims in Class 3 -- the sole voting class -- voted to
accept the Plan, and no party in interest objected to confirmation
of the Plan. Approximately 97% of the amount of Claims and 92% of
the Holders of Claims in Class 3 voted to accept the Plan.
The Plan provides for the separate classification of Claims and
Membership Interests into these classes: Class 1: Priority Non-Tax
Claims; Class 2: Secured Claims; Class 3: General Unsecured Claims;
and Class 4: Membership Interests. The Plan identifies Classes 3
and 4 as Impaired
Based on all available information, the Debtor estimates a 100%
recovery under the Plan for Holders of Allowed Administrative
Claims, Professional Compensation Claims, Secured Claims, and
Priority Non-Tax Claims. The Holders of Allowed General Unsecured
Claims will receive between 10.6% and 15.5% in a Chapter 11
scenario and between 9.4% and 14.6% if the Chapter 11 Case is
converted to a case under Chapter 7. Holders of membership
interests in the Debtor won't receive any distribution on account
of those interests.
The Plan will effectuate and facilitate the liquidation and
wind-down of the Debtor's estates for the benefit of creditors.
Moreover, the Plan is the product of negotiation among the Debtor
and the Committee, and is supported by the Debtor's stakeholders.
Article IV of the Plan provides for the following means, among
others, by which the Plan will be implemented:
i. Creation of an escrow to receive the Net Sale Payout, which
shall be (a) for the sole benefit of the Creditor Trust and (b)
carved-out and preserved solely for the payment of Allowed General
Unsecured Claims;
ii. Establishment of the Creditor Trust and appointment of the
Creditor Trustee; and
iii. Creation of a Plan Oversight Committee that will receive
updates, every six months, regarding the status of the wind-down of
the Debtor's estate, the claims reconciliation process, the payment
of the Net Sale Payout, and other matters as the Creditor Trustee
deems relevant.
A copy of the Disclosure Statement dated Feb. 12, 2021, is
available at
https://casedocs.omniagentsolutions.com/cmsvol2/pub_47398/874277_182.pdf
About Occasion Brands
Founded in 1998, Occasion Brands, LLC --
https://www.occasionbrands.com/ -- owned a family of e-commerce
websites that focus on the prom, homecoming, bridal, and other
special occasion events. It is a pure-play e-commerce platform for
prom dresses and operates its business through three web
properties: promgirl.com, simplydresses.com, and
KleinfeldBridalParty.com teen events.
Occasion Brands sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y., Case No. 20-11684) on July 22,
2020. Robert Nolan, chief restructuring officer, signed the
petition.
At the time of the filing, the Debtor was estimated to have assets
of $1 million to $10 million and liabilities of $10 million to $50
million.
The Honorable Stuart M. Bernstein is the case judge. S. Jason
Teele, Esq. and Daniel J. Harris, Esq., of Sills Cummins & Gross
P.C. serve as Debtor's counsel. Insight Partners, LLC, is the
Debtor's Restructuring Advisor, and Omni Agent Solutions is the
claims and noticing agent.
OGDENSBURG CITY: Moody's Hikes Outstanding GOLT Bonds From Ba1
--------------------------------------------------------------
Moody's Investors Service has upgraded the rating of the city of
Ogdensburg, New York's outstanding general obligation limited tax
(GOLT) bonds to Baa3 from Ba1. Additionally, Moody's has upgraded
the city's issuer rating to Baa3 from Ba1. The outlook has been
revised to stable from positive. The action affects about $6
million of outstanding debt.
RATINGS RATIONALE
The upgrade to Baa3 reflects a significant turnaround in the city's
financial position as management has worked to restore balanced
operations. Additionally, the rating reflects a limited and
concentrated tax base with a significant amount of tax-exempt
properties and elevated long term liabilities. Governance is a key
driver for the rating as previous city management drew down fund
balance levels to very minimal levels before a new management team
began implementing conservative budgeting practices, which helped
generate three consecutive surpluses. The rating also incorporates
that the city's management team is transitioning, with a newly
appointed comptroller who works contractually for the city.
Moody's consider the outstanding debt to be GOLT because of
limitations under New York State law on property tax levy
increases. The lack of distinction between the GOLT rating and the
Issuer rating reflects the city's ability to override the property
tax cap and the faith and credit pledge in support of debt
service.
RATINGS OUTLOOK
The stable rating reflects Moody's expectation that management will
maintain or improve current reserve levels. Additionally, Moody's
expect the tax base to remain stable.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
Continued operating surpluses leading to additional growth in
liquidity and reserves
Material reduction in long term leverage and fixed costs
Significant improvement in resident wealth and incomes and/or tax
base size
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
Return to structural imbalance, driving draws on liquidity and
reserves
Resumed cash flow borrowing
Material growth in long term leverage and fixed costs
Multi-year decline in tax base valuation
LEGAL SECURITY
The bonds are secured by the city's faith and credit general
obligation pledge as limited by the Property Tax Cap - Legislation
(Chapter 97 (Part A) of the Laws of the State of New York, 2011).
PROFILE
The City of Ogdensburg covers eight square miles in St. Lawrence
County (A2 positive) along the Canadian border, about 60 miles
south of Ottawa. The city had 10,635 residents as of 2019.
METHODOLOGY
The principal methodology used in these ratings was US Local
Government General Obligation Debt published in January 2021.
OMEGA SPORTS: Seeks to Tap Moon Wright & Houston as Legal Counsel
-----------------------------------------------------------------
Omega Sports, Inc. seeks approval from the U.S. Bankruptcy Court
for the Western District of North Carolina to employ Moon Wright &
Houston, PLLC as its bankruptcy counsel.
The firm will render these legal services:
(a) advise the Debtor regarding its powers and duties in the
continued operation of its business and management of its
properties;
(b) negotiate, prepare, and pursue confirmation of a Chapter
11 plan and approval of a disclosure statement and all related
reorganization documents;
(c) prepare legal papers;
(d) represent the Debtor in all adversary proceedings related
to the Debtor's Chapter 11 case;
(e) represent the Debtor in all litigation arising from or
relating to causes of action owned by the estate or defending
causes of action brought against the estate, in any forum;
(f) appear in bankruptcy court; and
(g) perform all other legal services that may be necessary in
the Debtor's case.
The hourly rates of the firm's counsel and staff are as follows:
Richard S. Wright $550
Andrew T. Houston $525
Caleb Brown $325
Shannon L. Myers $180
Amy Murray $150
In addition, the firm will seek reimbursement for expenses
incurred.
Andrew Houston, Esq., a partner at Moon Wright & Houston, disclosed
in a court filing that the firm is a "disinterested person" within
the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Andrew T. Houston, Esq.
Caleb Brown, Esq.
121 W. Trade Street, Suite 1950
Charlotte, NC 28202
Telephone: (704) 944-6560
Email: ahouston@mwhattorneys.com
cbrown@mwhattorneys.com
About Omega Sports
Greensboro, North Carolina-based Omega Sports, Inc. --
https://www.omegasports.com/ -- manufactures and sells sporting
goods, including apparel, footwear, and gear and accessories.
Omega Sports sought Chapter 11 protection (Bankr. W.D.N.C. Case No.
21-30160) on March 25, 2021, disclosing between $1 million and $10
million in both assets and liabilities. Ronald Craig Carlock, Jr.,
owner and chief executive officer, signed the petition.
The case is handled by Honorable Judge Laura T. Beyer.
The Debtor tapped Moon Wright & Houston, PLLC as legal counsel and
The Finley Group as financial advisor.
ORBY TV: U.S. Trustee Appoints Creditors' Committee
---------------------------------------------------
The U.S. Trustee for Region 16 on April 13 appointed an official
committee to represent unsecured creditors in the Chapter 11 case
of Orby TV, LLC.
The committee members are:
1. AT&T Services, Inc.
One Rockefeller Plaza
New York, NY 10020
Attn. James W. Grudus
Phone: (212) 205-0659
E-mail: james.grudus@att.com
- and -
Karen A Cavagnaro
Phone: (908) 532-1957
E-mail: Km1426@att.com
2. Cannella Response Television, LLC
848 Liberty Drive
Burlington, WI 53105
Attn. Karl Theile
Phone: (262) 806-9064
E-mail: ktheile@cannellamedia.com
3. Discovery Communications
9271 Sherrill Blvd.
Knoxville, TN 37932
Attn. Nat McCall
Phone: (865) 985-7787
E-mail: nat_mccall@discovery.com
4. Starz Entertainment, LLC
1647 Stewart St.
Santa Monica, CA 90404
Attn. Elizabeth Patterson
Phone: (424) 204-4126
E-mail: Elizabeth.patterson@starz.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Orby TV
Orby TV was established in 2017 as a satellite television service
to compete with competitors such as DirectTV and Dish Network, with
an initial Series A capital raise of approximately $25.4 million.
Orby TV filed its voluntary petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. C,D, Calif. Case No. 21-10428) on March
14, 2021. Alexander Izzard, chief operating officer, signed the
petition. At the time of filing, the Debtor estimated $500,000 to
$1 million in assets and $50 million to $100 million in
liabilities.
Ron Bender, Esq., at Levene, Neale, Bender, Yoo & Brill L.L.P.
serves as the Debtor's counsel.
OVINTIV INC: Moody's Affirms Ba1 CFR & Changes Outlook to Pos.
--------------------------------------------------------------
Moody's Investors Service affirmed Ovintiv Inc.'s Ba1 corporate
family rating, Ba1-PD probability of default rating, Ba1 senior
unsecured notes rating, and Not Prime commercial paper rating. The
outlook was changed to positive from stable, and Speculative Grade
Liquidity Rating was changed to SGL-1 from SGL-2.
"Ovintiv's announced March 2021 asset sales have accelerated its
path to reducing debt to $4.5 billion or by almost $2.5 billion,
which will improve leverage in 2021 and 2022", said Paresh Chari,
Moody's analyst. "Ovintiv has also continued to decrease costs and
improve returns across its sizable asset base, leading to strong
capital efficiencies."
Affirmations:
Issuer: Ovintiv Inc.
Corporate Family Rating, Affirmed Ba1
Probability of Default Rating, Affirmed Ba1-PD
Commercial Paper, Affirmed NP
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1
Issuer: Ovintiv Canada ULC
Commercial Paper, Affirmed NP
Issuer: Ovintiv Exploration Inc.
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1
Upgrades:
Issuer: Ovintiv Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Outlook Actions:
Issuer: Ovintiv Exploration Inc.
Outlook, Changed To Positive From Stable
Issuer: Ovintiv Inc.
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
Ovintiv's Ba1 CFR benefits from: (1) a sizable production and
proved reserves base; (2) diversification across several North
American basins and across several products; (3) a strong leveraged
full-cycle ratio (LFCR) that will remain above 2x due to low F&D
costs, which reflects Ovintiv's operational excellence; and (4)
very good liquidity. Ovintiv is challenged by: (1) large capital
spend to maintain production due to the high shale decline rates;
and (2) low margins due to the high proportion (65%) of natural gas
and NGL production.
Ovintiv has very good liquidity (SGL-1). Pro forma for the Q1 2021
asset sales and tax proceeds, and at December 31, 2020, Moody's
believes Ovintiv would have about $300 million of cash and full
availability under its $4 billion revolving credit facilities
maturing in 2024. Moody's expects $600 million in free cash flow
through 2021. Moody's expects Ovintiv to be in full compliance with
its sole financial covenant requiring debt to adjusted
capitalization to be under 60%. Ovintiv has $518 million of debt
maturing in November 2021 and $600 million in January 2022.
The senior unsecured notes are rated Ba1, at the CFR, as all the
debt in the capital structure is unsecured. Ovintiv Inc. fully and
unconditionally guaranteed the debt issued by Ovintiv Exploration
Inc. and Ovintiv Exploration Inc. fully and unconditionally
guaranteed the debt assumed by Ovintiv Inc. Ovintiv Canada ULC also
provides guarantees to Ovintiv Inc and Ovintiv Exploration Inc.
The positive outlook reflects Moody's expectation that debt will
materially decrease thereby improving retained cash flow to debt
above 40%.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if RCF to debt is above 40% (24% LTM
Dec-2020), the LFCR is above 1.5x (2.6x LTM Dec-2020), and PD
reserve life exceeds 5 years (5.6 years LTM Dec-2020).
The ratings could be downgraded if RCF to debt is below 20% (24%
LTM Dec-2020) or if the LFCR is below 1x (2.6x LTM Dec-2020).
Denver Colorado-based Ovintiv Inc. is a large North American
independent exploration and production companies, with 2020
production of 544,000 barrels of oil equivalent per day.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
PALMCO HOMES: Has Until June 29 to File Plan & Disclosures
----------------------------------------------------------
Judge Erik P. Kimball of the U.S. Bankruptcy Court for the Southern
District of Florida has entered an order within which debtor Palmco
Homes II, LLC shall file a Plan and Disclosure Statement on or
before June 29, 2021.
A full-text copy of the order dated April 8, 2021, is available at
https://bit.ly/3sfBCLX from PacerMonitor.com at no charge.
The Debtor is represented by:
Chad T. Van Horn, Esq.
Van Horn Law Group, Inc.
330 N. Andrews Ave., Suite 450
Fort Lauderdale, FL 33301
Tel: (954) 765-3166
E-mail: Chad@cvhlawgroup.com
About Palmco Homes II
Palmco Homes II, LLC sought protection from the U.S. Bankruptcy
Code for the Southern District of Florida (Bankr. S.D. Fla. Case
No. 21-12044) on March 1, 2021, listing under $1 million in both
assets and liabilities. Van Horn Law Group, PA, serves as the
Debtor's legal counsel.
PALMCO HOMES: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Palmco Homes II, LLC, according to court dockets.
About Palmco Homes II
Palmco Homes II, LLC sought protection from the U.S. Bankruptcy
Code for the Southern District of Florida (Bankr. S.D. Fla. Case
No. 21-12044) on March 1, 2021, listing under $1 million in both
assets and liabilities. Judge Michael E. Wiles oversees the case.
Van Horn Law Group, PA serves as the Debtor's legal counsel.
PAPER SOURCE: Committee Taps Hahn & Hessen as Lead Counsel
----------------------------------------------------------
The official committee of unsecured creditors of Paper Source, Inc.
and Pine Holdings, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Virginia to retain Hahn & Hessen
LLP as its bankruptcy counsel.
The firm's services include:
a. rendering legal advice to the committee with respect to its
duties and powers in the Debtors' cases;
b. assisting the committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors, the operation of the Debtors' business, the desirability
of continuance of such business, and any other matters relevant to
the cases or to the business affairs of the Debtors;
c. advising the committee with respect to the proposed
debtors-in-possession financing;
d. advising the committee with respect to any proposed sale of
the Debtors' assets or business operations and any other relevant
matters;
e. advising the committee with respect to any proposed plan of
reorganization or liquidation and the prosecution of claims against
third parties, if any, and any other matters relevant to the case
or to the formulation of a plan of reorganization or liquidation;
f. negotiating with the Debtors or any other
parties-in-interest;
g. assisting the committee in requesting the appointment of a
trustee or examiner pursuant to Section 1104 of the Bankruptcy
Code, if necessary and appropriate; and
h. performing other legal services.
The firm will be paid at hourly rates as follows:
Partners $750 to $1,025
Counsel $450 to $900
Associates $360 to $700
Legal Assistants $150 to $300
The firm will also be reimbursed for out-of-pocket expenses
incurred.
Janine Figueiredo, Esq., a member of Hahn & Hessen, disclosed in a
court filing that he and his firm are "disinterested" as 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, Ms.
Figueiredo disclosed that:
-- Hahn & Hessen 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;
-- Hahn & Hessen has not represented the committee in the 12
months prior to the Debtors' Chapter 11 filing; and
-- Hahn & Hessen is developing a budget and staffing plan that
will be presented for approval by the committee and anticipates
filing a budget approved by the committee at the time the firm
files its interim and final fee applications.
Hahn & Hessen can be reached through:
Mark S. Indelicato, Esq.
Mark T. Power, Esq.
Janine M. Figueiredo, Esq.
Jeffrey Zawadzki, Esq.
Hahn & Hessen LLP
488 Madison Avenue
New York, NY 10022
Tel: (212) 478-7200
Fax: (212) 478-7400
Email: mindelicato@hahnhessen.com
mpower@hahnhessen.com
jfigueiredo@hahnhessen.com
jzawadzki@hahnhessen.com
About Paper Source
Paper Source, Inc. operates as lifestyle brand and retailer of
premium paper products, crafting supplies and related gifts,
including custom invitations, greeting cards and personalized
stationery and stamps. It sells fine and artisanal papers, wedding
paper goods, books and gift wrap through its 158 domestic stores
and e-commerce website. Its administrative headquarter is in
Chicago.
Paper Source and Pine Holdings, Inc. sought Chapter 11 protection
(Bankr. E.D. Va. Case No. 21-30660) on March 2, 2021. At the time
of the filing, the Debtor disclosed assets of between $100 million
and $500 million and liabilities of the same range. The Hon. Keith
L. Phillips is the case judge.
The Debtors tapped Willkie Farr & Gallagher LLP and Whiteford
Taylor & Preston LLP as bankruptcy counsel, M-III Advisory LP as
restructuring advisor, SSG Capital Advisors LLC as investment
banker, and A&G Real Estate Partners as real estate advisor. Epiq
Corporate Restructuring, LLC is the claims agent.
The U.S. Trustee for Region 4 appointed a committee to represent
unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped Hahn & Hessen, LLP as its lead bankruptcy counsel,
Hirschler Fleischer, P.C. as local counsel, and Province, LLC as
financial advisor.
PAPER SOURCE: Committee Taps Hirschler Fleischer as Local Counsel
-----------------------------------------------------------------
The official committee of unsecured creditors of Paper Source, Inc.
and Pine Holdings, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Virginia to retain Hirschler
Fleischer, P.C. as its Virginia local counsel.
The firm will render these services:
a. advise the committee regarding its rights, powers, and
duties under the Bankruptcy Code;
b. advise and consult with the committee on the conduct of the
Debtors' Chapter 11 cases including all legal and administrative
requirements under Chapter 11;
c. attend meetings and negotiate with representatives of the
Debtors, the secured and unsecured creditors, equity holders,
employees, and other parties in interest;
d. advise the committee regarding any contemplated sale of
assets or business combinations including the negotiation of asset
sales, stock purchases, mergers or joint ventures, formulation and
implementation of bidding procedures, evaluation of competing
offers, drafting of appropriate documents regarding proposed sale
and counseling regarding the closing of such sales;
e. to the extent necessary, advise the committee regarding
pre-bankruptcy and post-petition financing and cash collateral
arrangements and negotiate documents relating thereto;
f. advise the committee on matters relating to the Debtors'
assumption, assumption and assignment, and rejection of executory
contracts and unexpired leases;
g. advise the committee on matters relating to the ordinary
course of business including employment matters, tax,
environmental, banking, insurance, securities, corporate, business
operations, contracts, joint ventures, real and personal property,
press and public relations matters, and regulatory matters;
h. provide advice and counseling on actions to protect and
preserve the Debtors' estates including actions and proceedings by
the Debtors or other designated parties to recover assets, defense
of actions and proceedings brought against the estate, negotiations
regarding all litigation in which the Committee may be involved,
and objections to claims filed against the estate;
i. prepare and file legal papers;
j. review all pleadings, financial and other reports filed by
the Debtors and advise the committee about the potential
implications thereof;
k. review the nature and validity of any liens asserted
against the Debtors' property and advise the committee concerning
the enforceability of such liens;
l. investigate the acts, conduct, assets, liability, and
financial condition of the Debtors, the operation of the Debtor's
business and the desirability of the continuance of such business,
and any other matter relevant to the case or to the formulation of
a plan;
m. commence and conduct any and all litigation necessary or
appropriate to assert rights held by the committee or protect
assets of the Chapter 11 estates;
n. negotiate and participate in the preparation of the
Debtors' plan of reorganization, related disclosure statement, and
other related documents and agreements, and advise and participate
in the confirmation of such plan;
o. attend meetings with third parties and participate in
negotiation;
p. appear before the bankruptcy court, other courts, and the
U.S. trustee to protect and represent the interests of the
committee and its constituents;
q. advise the committee regarding local rules, local
practices, and procedures, as the same may be applicable in these
cases;
r. meet and coordinate with other counsel and other
professionals representing the Debtors and other parties in
interest; and
s. perform all other necessary legal services.
The firm will be paid at these rates:
Robert Westermann Shareholder $575 per hour
Brittany Falabella Associate $360 per hour
Robin Henderson Professional Assistant $160 per hour
Robert Westermann, Esq., a partner at Hirschler, disclosed in a
court filing that his firm is a "disinterested person" as defined
in Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Westermann disclosed that:
-- Hirschler 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;
-- Hirschler has not represented the Committee in the 12
months prepetition; and
-- Hirschler is developing a budget and staffing plan that
will be presented for approval by the committee and anticipates
filing a budget approved by the committee at the time the firm
files its interim and final fee applications.
The firm can be reached through:
Robert S. Westermann, Esq.
Brittany B. Falabella, Esq.
Hirschler Fleischer, P.C.
The Edgeworth Building
2100 East Cary Street
Richmond, VA 23223
P.O. Box 500
Richmond, VA 23218-0500
Telephone: (804) 771-9500
Facsimile: (804) 644-0957
Email: rwestermann@hirschlerlaw.com
bfalabella@hirschlerlaw.com
About Paper Source
Paper Source, Inc. operates as lifestyle brand and retailer of
premium paper products, crafting supplies and related gifts,
including custom invitations, greeting cards and personalized
stationery and stamps. It sells fine and artisanal papers, wedding
paper goods, books and gift wrap through its 158 domestic stores
and e-commerce website. Its administrative headquarter is in
Chicago.
Paper Source and Pine Holdings, Inc. sought Chapter 11 protection
(Bankr. E.D. Va. Case No. 21-30660) on March 2, 2021. At the time
of the filing, the Debtor disclosed assets of between $100 million
and $500 million and liabilities of the same range. The Hon. Keith
L. Phillips is the case judge.
The Debtors tapped Willkie Farr & Gallagher LLP and Whiteford
Taylor & Preston LLP as bankruptcy counsel, M-III Advisory LP as
restructuring advisor, SSG Capital Advisors LLC as investment
banker, and A&G Real Estate Partners as real estate advisor. Epiq
Corporate Restructuring, LLC is the claims agent.
The U.S. Trustee for Region 4 appointed a committee to represent
unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped Hahn & Hessen, LLP as its lead bankruptcy counsel,
Hirschler Fleischer, P.C. as local counsel, and Province, LLC as
financial advisor.
PAPER SOURCE: Committee Taps Province LLC as Financial Advisor
--------------------------------------------------------------
The official committee of unsecured creditors of Paper Source, Inc.
seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Virginia to retain Province, LLC as its
financial advisor.
The firm's services include:
a. becoming familiar with and analyzing the
debtor-in-possession budget, the Debtors' weekly cash flow
performance, assets and liabilities, and overall financial
condition;
b. reviewing financial and operational information furnished
by the Debtors to the committee;
c. scrutinizing the economic terms of various agreements,
including, but not limited to, the Debtors' first day motions and
various professional retentions;
d. analyzing the Debtors' proposed business plans, investment
memoranda and financial forecasts and developing alternative
scenarios, if necessary;
e. assessing the Debtors' various pleadings and proposed
treatment of unsecured creditors therefrom;
f. preparing or reviewing avoidance action and claim
analyses;
g. assisting the committee in reviewing the Debtors' financial
reports, including, but not limited to, statement of financial
affairs, schedules, cash budgets, and monthly operating reports;
h. advising the committee on the current state of the Debtors'
Chapter 11 cases;
i. representing the committee in negotiations with the Debtors
and third parties, as necessary;
j. if necessary, participating as a witness in hearings before
the bankruptcy court with respect to matters upon which Province
has provided advice; and
k. any other activities approved by the committee and its
legal counsel and agreed to by Province.
The firm will be paid at these rates:
Managing Directors and Principals $750 - $1,050 per hour
Vice Presidents, Directors,
and Senior Directors $550 - $750 per hour
Analysts, Associates,
and Senior Associates $270 - $550 per hour
Paraprofessionals $185 - $225 per hour
Sanjuro Kietlinski, a managing director at Province, disclosed in
court filings that he and his firm are "disinterested" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Sanjuro Kietlinski
Province, LLC
2360 Corporate Circle, Suite 330
Henderson, NV 89074
Tel: +1 (702) 685-5555
Email: skietlinski@provincefirm.com
info@provincefirm.com
About Paper Source
Paper Source, Inc. operates as lifestyle brand and retailer of
premium paper products, crafting supplies and related gifts,
including custom invitations, greeting cards and personalized
stationery and stamps. It sells fine and artisanal papers, wedding
paper goods, books and gift wrap through its 158 domestic stores
and e-commerce website. Its administrative headquarter is in
Chicago.
Paper Source and Pine Holdings, Inc. sought Chapter 11 protection
(Bankr. E.D. Va. Case No. 21-30660) on March 2, 2021. At the time
of the filing, the Debtor disclosed assets of between $100 million
and $500 million and liabilities of the same range. The Hon. Keith
L. Phillips is the case judge.
The Debtors tapped Willkie Farr & Gallagher LLP and Whiteford
Taylor & Preston LLP as bankruptcy counsel, M-III Advisory LP as
restructuring advisor, SSG Capital Advisors LLC as investment
banker, and A&G Real Estate Partners as real estate advisor. Epiq
Corporate Restructuring, LLC is the claims agent.
The U.S. Trustee for Region 4 appointed a committee to represent
unsecured creditors in the Debtors' Chapter 11 cases. The
committee tapped Hahn & Hessen, LLP as its lead bankruptcy counsel,
Hirschler Fleischer, P.C. as local counsel, and Province, LLC as
financial advisor.
PARADOX ENTERPRISES: May 13 Plan & Disclosure Hearing Set
---------------------------------------------------------
On April 7, 2021, debtor Paradox Enterprises, LLC, filed with the
U.S. Bankruptcy Court for the Eastern District of Tennessee,
Winchester Division, a disclosure statement referring to a plan.
On April 8, 2021, Judge Nicholas W. Whittenburg conditionally
approved the disclosure statement and ordered that:
* May 6, 2021, is fixed as the last day for submitting ballots
accepting or rejecting the plan.
* May 13, 2021, at 10:30 a.m. in Courtroom A of the Bankruptcy
Court is fixed for the hearing on final approval of the disclosure
statement and on confirmation of the plan.
* The court exercises authority under Fed. R. Bankr. P.
9006(c) to shorten the period for notice of time to file objections
under Fed. R. Bankr. P. 2002 because there is a pending motion to
approve financing that affects the feasibility of the plan.
* May 6, 2021, is fixed as the last day for filing and serving
written objections to the disclosure statement, and written
objections to confirmation of the plan.
* May 6, 2021, is fixed as the last day to elect an
application under 11 U.S.C. Sec. 1111(b) by a class of secured
creditors.
A full-text copy of the order dated April 8, 2021, is available at
https://bit.ly/3mH5MGM from PacerMonitor.com at no charge.
About Paradox Enterprises
Paradox Enterprises, LLC, based in Manchester, Tennessee, filed a
Chapter 11 petition (Bankr. E.D. Tenn. Case No. 19-12162) on May
24, 2019. In the petition signed by Eric Shelley, owner, the
Debtor was estimated to have $1 million to $10 million in both
assets and liabilities.
The Hon. Shelley D. Rucker oversees the case.
Jason N. King, Esq., at Kious Rodgers Barger Holder & King, PLLC,
serves as bankruptcy counsel.
PATRICIAN HOTEL: Seeks to Tap Robert F. Reynolds as Legal Counsel
-----------------------------------------------------------------
Patrician Hotel, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Florida to employ the
Law Offices of Robert F. Reynolds, PA as legal counsel.
The firm will render these legal services:
(a) advise the Debtors regarding their powers and duties in
the continued management of their financial affairs;
(b) advise the Debtors regarding their responsibilities to
comply with the U.S. trustee's operating guidelines and reporting
requirements and with the rules of the court;
(c) prepare legal documents;
(d) protect the interests of the Debtors in all matters
pending before the court;
(e) represent the Debtors in negotiations with their creditors
in the preparation of a Chapter 11 plan; and
(f) perform all other necessary functions as attorney for the
Debtors for the proper administration of the bankruptcy estate.
The firm's hourly rates are as follows:
Attorneys $375
Paralegals $125
In addition, the firm will seek reimbursement for expenses
incurred.
Robert Reynolds, Esq., an attorney at the Law Offices of Robert F.
Reynolds, disclosed in a court filing that the firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Robert F. Reynolds, Esq.
Law Offices of Robert F. Reynolds, PA
515 East Las Olas Boulevard, Suite 850
Fort Lauderdale, FL 33301
Telephone: (954) 766-9928
Facsimile: (954) 745-5890
Email: rreynolds@srobertreynoldspa.com
About Patrician Hotel
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 Nov.
14, 2019, listing under $1 million in both assets and liabilities.
Robert F. Reynolds, Esq., at the Law Offices of Robert F. Reynolds,
PA, represents the Debtor as counsel.
PDC WELLNESS: S&P Alters Outlook to Stable, Affirms 'B' ICR
-----------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based PDC Wellness &
Personal Care Co. (PDC) to stable from negative and affirmed all of
its ratings on the company, including the 'B' issuer credit
rating.
S&P said, "The stable outlook reflects our expectation that the
company will continue to grow its top-line revenue and EBITDA
supported by strong ongoing demand for its best-performing brands,
Dr. Teal's and Cantu, while managing its cash balances until it is
able to extend the maturity of its revolving credit facility. In
addition, we expect the company to reduce its debt to EBITDA to the
mid-5x area by the end of 2021.
"The outlook revision reflects PDC's better-than-expected operating
performance in 2020 and our expectation for a continued increase in
its top-line revenue and EBITDA in 2021.The company's operating
performance exceeded our expectations in 2020 due to the strong
demand in its Wellness (mainly Dr. Teal's) and Personal Care
(mainly Cantu) segments, which offset the headwinds from the
challenging international economic environment and the weak demand
in its Fragrance category. PDC's Dr. Teal's and Cantu brands
account for more than 60% of its total revenue and these two brands
continued to experience strong demand across its different
channels, including mass merchandise, drug, grocery, specialty, and
e-commerce. However, the company's Fragrance category continued to
face challenges and its sales in this segment declined by the
mid-teen percent area year over year. PDC's international operating
performance was negatively affected by its product mix, which was
more heavily focused on less-essential categories, such as
fragrance and Eylure, that experienced reduced consumer demand amid
the coronavirus pandemic. Combined, these factors led the company's
adjusted leverage to improve to the high-5x area by the end of
2020, which compares with our prior expectation for the high-6x
area.
"We expect PDC's net sales to increase by the high-single digit
percent area in 2021 on continued strong demand for its Dr. Teal's
and Cantu products and an improvement in the conditions in its
international markets, assuming the headwinds from the COVID-19
pandemic subside. That said, we expect the company's margins to
contract modestly in 2021 due to rising supply chain expenses and
higher raw material, labor, and freight costs. However, we forecast
management's increasing focus on enhancing its capabilities will
support a further improvement in its e-commerce sales, which is an
important area where we believe PDC is underrepresented. Therefore,
we expect the company to further reduce its leverage to about the
mid-5x area by the end of 2021.
"We believe the company's liquidity will be adequate to support its
operations and enable it to withstand the ongoing uncertainty
related to the pandemic.Earlier this year, the company issued a
$183 million add-on to its first-lien term loan due 2024 and used
the proceeds to pay off its second-lien term loan. The company had
about $95 million of liquidity, including $32 million of cash, as
of the end of December 2020, as well as full availability under its
$65 million revolving credit facility maturing in June 2022. In
addition, it does not face any substantial funded debt maturities
until June 2024. That said, PDC must comply with the 8.5x springing
first-lien net leverage covenant on its revolver when its
outstanding borrowings on the facility exceed 40% of its commitment
or $26 million. We expect the company to maintain a cushion of at
least 40% under this covenant over the next couple of years."
S&P's ratings continue to reflect the company's small scale,
significant customer concentration, limited brand equity, and
narrow business focus in the bath and beauty industry. PDC lacks
scale and diversity and has a narrow business focus in the beauty
and personal care industry, given that its two largest brands
account for 60% of sales. With less than $600 million of sales, it
is also a relatively small player in its industry. In addition, the
company's brands generally compete in the low-priced end of niche
categories in the food, drug, and mass channels, which--in our
opinion--provides the company with limited pricing power. However,
PDC has increased the level of consumer awareness for certain of
its brands, including Dr. Teal's and Cantu.
Nonetheless, the company also competes against larger beauty
companies, such as Unilever, L'Oreal, and Coty, that sell through
alternative channels and retailers, like Victoria's Secret and Bath
& Body Works, which also sell their own premium brands. These
companies are much larger, better capitalized, and have greater
financial resources than PDC, which enables them to spend more on
innovation and marketing. The company also has a significant
customer concentration with Wal-Mart and some drugstores. While S&P
believes PDC has had a satisfactory long-term relationship with
Wal-Mart, the retailer has a history of pressuring its suppliers
and cutting back on orders. Any material reduction in the company's
business with Wal-Mart would significantly weaken its profitability
and credit metrics, especially given its large debt burden.
S&P said, "The stable outlook reflects our expectation that PDC
will continue to improve its top-line revenue and EBITDA supported
by strong ongoing demand for its best-performing brands, Dr. Teal's
and Cantu, while managing its cash balances until it is able to
extend the maturity of its revolving credit facility. In addition,
we expect the company to reduce its debt to EBITDA to the mid-5x
area by the end of 2021.
"We could lower our ratings on PDC over the next 12 months if its
operating performance deteriorates, leading to a material decline
in its EBITDA and free cash flow generation and causing its debt to
EBITDA to increase above 7x on a sustained basis, or its EBITDA
interest coverage approaches the mid-1x area. This could occur if
there are unfavorable changes to the company's relationship with
Wal-Mart or the competition from its larger peers intensifies. We
could also lower our rating if PDC's financial policy becomes more
aggressive.
"While highly unlikely over the next year, we could raise our
rating on PDC if it significantly improves its scale and
diversifies its business while also demonstrating a track record
of, and commitment to, sustaining leverage of less than 5x."
PENINSULA PACIFIC: Moody's Affirms Caa1 CFR Amid Lago Acquisition
-----------------------------------------------------------------
Moody's Investors Service affirmed Peninsula Pacific Entertainment
LLC's (P2E) Caa1 Corporate Family Rating, Caa1-PD Probability of
Default Rating, and Caa1 senior unsecured notes rating, including
the company's proposed $300 million tack-on to its existing $550
million 8.5% senior notes due 2027. The company's $75 million
priority revolver expiring 2025 is not rated. The rating outlook is
stable.
Proceeds from the $300 million tack-on along with $56 million of
P2E's balance sheet cash will be used to repay all the debt issued
by Lago Resort & Casino, LLC (Caa3 negative). Lago is owned by an
affiliate of P2E but not currently part of P2E's restricted
borrowing group. Once the transaction closes, all Lago debt will
have been refinanced with no impairment to Lago's lenders and Lago
will no longer exist as a standalone entity. When that occurs, all
of Lago's ratings will be withdrawn, including the Caa2 rating on
its senior secured credit facilities, and Lago's sole casino asset,
del Lago Casino Resort in Tyre, New York, will be folded into the
restricted borrowing group that services PPE's debt.
The affirmation of P2E's Caa1 Corporate Family Rating considers
P2E's high pro forma leverage, at about 6.2x, and above the 5.5x
debt/EBITDA factor that could lead to an upgrade. The del Lago
Casino Resort is being brought into P2E's restricted borrowing
group at about a 8.5x debt/EBITDAM multiple, thereby increasing
P2E's leverage above Moody's prior expectations. Moody's
nevertheless expects that P2E will generate a modest amount of free
cash flow after interest, taxes and all capital expenditures. The
company's very good liquidity including an estimated $140 million
of unrestricted cash pro forma for the Lago acquisition, and the
improvement in geographic diversity help to mitigate the higher
leverage and contribute to the rating affirmation. However, any
improvement in gross leverage will need to be driven by higher
EBITDA performance only as there is no outstanding pre-payable debt
in the company's pro forma capital structure.
Other credit concerns include the continued, albeit lessened,
concerns regarding the potential impact from any increased
restrictions related to social distancing requirements, continued
high levels of competition in New York State that will continue to
pressure del Lago's earnings performance, and the potential new
competition in Virginia. In April 2020, the Virginia General
Assembly enacted legislation authorizing casino gambling in the
state.
Partly mitigating the concerns mentioned above, is the benefit to
P2E's geographic diversification along with the approval of online
sports betting by New York State that will benefit del Lago.
Additionally, P2E's assets have been generating a consistent amount
of property-level EBITDAM since re-opening from temporary closures
related to COVID.
The Caa1 rating on the proposed senior unsecured tack-on is the
same level as P2E's Corporate Family Rating since this debt
represents the preponderance of debt in the capital structure. The
notes are effectively subordinated to the secured revolver. The $75
million revolver expires in 2025 is secured by a first priority
lien on substantially all assets of P2E and its subsidiaries and a
first priority pledge on the equity interest of the borrower.
The stable outlook acknowledges P2E's very good liquidity-- pro
forma for the tack-on, the company has full availability under its
$75 million revolver, and approximately $140 million of
unrestricted cash -- and assumes that P2E's restricted group gaming
assets will continue to operate without interruption and with
positive free cash flow.
The following ratings/assessments are affected by the action:
Ratings Affirmed:
Issuer: Peninsula Pacific Entertainment LLC
Corporate Family Rating, Affirmed Caa1
Probability of Default Rating, Affirmed Caa1-PD
GTD Senior Unsecured Global Notes, Affirmed Caa1 (LGD4)
Outlook Actions:
Issuer: Peninsula Pacific Entertainment LLC
Outlook, Remains Stable
RATINGS RATIONALE
P2E's Caa1 CFR reflects the company's high leverage along with
concerns regarding the potential impact from any increased
restrictions related to social distancing requirements and expected
increase in new competition in Virginia. Positive credit attributes
include P2E's Colonial Downs racetrack is the only racetrack
qualified for HHR ("Historic Horse Racing") terminals and that P2E
holds the only HHR license in the State of Virginia and has
exclusivity through 2028. HHR terminals are an electronic slot
machine-like game that is a form of pari-mutuel legal horse racing
wagering. Also supporting the ratings are diversification benefits
related to the Hard Rock Sioux City and pending del Lago
acquisition.
P2E's ratings and outlook recognize the pro forma restricted
borrowing group structure that include Colonial Downs Group, LLC,
SCE Partners LLC Hard Rock Sioux City (Iowa), and del Lago Casino
Resort that will be folded into P2E's restricted group structure.
In October 2020, P2E acquired the 50% equity ownership of Sioux
City Iowa casino (Hard Rock Sioux City) that it did not already
own. The portion that was owned by P2E was outside of the company's
restricted group borrowing structure but was contributed as equity
to the restricted group.
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
P2E 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 P2E'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
PPE remains vulnerable to the outbreak continuing to spread.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A higher rating can be achieved once Moody's has a higher degree of
confidence that the risks related to COVID-19 will lessen and the
operating environment improves along with revenue and earnings
visibility. A higher rating also requires that P2E generate
positive free cash flow, restore investment flexibility and
demonstrate the ability and willingness to achieve and maintain
debt/EBITDA below 5.5x over the longer-term. Ratings could be
downgraded if earnings decline or liquidity deteriorates because of
actions to contain the spread of the coronavirus, or if consumer
spending on gaming activities weakens.
The principal methodology used in these ratings was Gaming
Methodology published in October 2020.
Peninsula Pacific Entertainment LLC owns and operates the Colonial
Downs Racetrack in New Kent, Virginia, as well as three satellite
wagering facilities in Richmond, Hampton and Vinton. The company is
owned by PGP Investors, LLC (managing member is Brent Stevens), and
was founded to develop, own and operate regional gaming
opportunities. The company will also own 100% of the Hard Rock
Sioux City casino located in downtown Sioux City, Iowa and the del
Lago Casino Resort in Tyre, New York. The company is private and
does not disclose detailed financial information. Pro forma annual
revenue for the Sioux City and del Lago acquisitions is
approximately $400 million.
PIMA COUNTY IDA: Moody's Affirms B1 Rating on 2013Q Education Bonds
-------------------------------------------------------------------
Moody's Investors Service has affirmed the B1 rating on Pima County
Industrial Development Authority, AZ's Series 2013Q Education
Revenue Bonds (Arizona Charter Schools Refunding Project).
Concurrently, Moody's has upgraded to Baa3 from B1 the rating on
the Authority's Education Revenue Refunding Bonds (Arizona Charter
Schools Refunding Project) Series 2016R. There is $19.7 million in
outstanding Series 2013Q bonds and $10.6 million in outstanding
Series 2016R. The Pima County Industrial Development Authority
("Pima Pool" or "pool") has approximately $30.4 million in total
outstanding revenue bonds. The outlook on both series is stable.
RATINGS RATIONALE
The affirmation of the Series 2013Q and the sharp upgrade of the
Series 2016R reflects the unusual characteristics of this charter
school pool and these two component series. The B1 rating on the
Series 2013Q reflects the weighted average credit quality across
its nine pool participants, which determines the highest possible
pool rating since there are no step-up provisions. Pima Pool
participants are not responsible for debt service payments in the
event of another member's default. The rating incorporates the
credit quality of the weakest Pima Pool participant and the
availability of a pooled debt service reserve account. There is
substantial risk of default for the lowest rated Pima Pool
participant. However, the ability of pooled reserves to cover this
default, along with at least partial expected recovery from the
liquidation of pledged collateral, serves to somewhat mitigate this
risk.
The Baa3 rating on the Series 2016R reflects the improved credit
quality of Kingman Academy of Learning. Kingman Academy is a
participant in both series but is the sole member of the 2016R
pool. Kingman Academy is increasingly distinguished from the
deteriorated credit quality of a number of other pool participants
and the weakened weighted average credit quality of the Series
2013Q pool overall. The school's high academic performance, which
exceeds that of competing district schools, has maintained
enrollment of around 1,300 students and a solid waitlist at the
elementary school level for 7 years, with revenues that exceed
those for other pool participants. Debt service coverage of 1.43x
and 118 days' cash remain satisfactory and will remain stable. The
school's two-year average operating cash flow margin of 20.5% also
remains satisfactory. While the school's operations have been
impacted by the coronavirus pandemic, it has received a total of
$2.6 million in federal fund to offset these costs.
The rating also takes into account the sizeable portion of the
overall pool comprised by Kingman's outstanding debt. Kingman has
close to $11.5 million in outstanding revenue bonds, comprising
37.7% of the pool's $30.4 million in total outstanding debt. As a
result, it is the only pool participant for which the pooled liquid
reserve of close to $4.9 million would not be sufficient to cover a
full default. Additionally, the rating reflects Kingman's
obligation to pay 5% above debt service requirements for deposits
into the pooled reserve and the risk that Kingman may lose these
additional payments should there be a default among the other pool
participants.
Participants across both series are not responsible for debt
service payments in the event of another member's default, but each
contributes 5% above annual debt service payments to a jointly
shared "pooled reserve"; although this reserve is now fully funded
and is about 16% of the pool's $30.4 million in outstanding debt.
It would not prevent a default of the Series 2013Q should the two
weakest participants default. The ratings also take into account
the lack of active management oversight of individual schools'
financial performance.
The participants are small charter schools with slim debt service
coverage, weak liquidity, and narrow operating margins. The weakest
participants, like Academy with Community Partners (ACP),
Paramount, and New School for the Arts (NSA), are especially
stressed and have experienced enrollment declines, although NSA's
enrollment has stabilized in the current year. Financial
performance at ACP is particularly weak, although in fiscal 2020
the school met its covenant of 30 days' cash exclusive of
government receivables and prepaid expenses for the first time
since fiscal 2015.
The pool benefits from security features that ensure that debt
service is paid from the first available allocations of state aid.
The State Treasurer sends state aid directly to the Trustee for
payment of debt service before funds are released to the schools.
The pool holds close to $4.9 million in liquid reserves that are
cross collateralized across the three outstanding series and among
all 9 pool participants. Pooled reserves are sufficient to cover
the loss or complete default of any one participant, with the
exception of Kingman Academy. They could also cover debt service
for all of the weakest participants for a multi-year period,
potentially allowing the schools to adjust their operations and
attract additional students. As an additional test of the reserves'
strength, the pool could withstand the immediate default of the
weakest participant and still cover annual debt service payments of
the next two weakest participants for a multi-year period.
The schools also maintain credit reserves equal to their maximum
annual debt service. While the reserves provide some insulation,
the pool's weighted average credit quality increases the likelihood
that they will be called upon in the future.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. Notably, all schools have resumed some form of in
person instruction. Favorably, the state has committed to school
funding in fiscal 2021 at a level not less than 98% of the fiscal
2020 student count, although schools receive 95% of per pupil state
aid amounts for online students. Additionally, the schools have
received CARES Act and other federal funding to offset the costs
associated with the coronavirus pandemic. For example, NSA has
received a total of $130,000 in federal funding, and Benchmark has
received just over $127,000.
RATING OUTLOOK
The stable outlook reflects Moody's expectation that the pool's
excess liquidity will mitigate the low weighted average credit
quality of the pool. Modest additions to the liquid reserve account
will sustain the pool's default tolerance. Sustained state funding
and federal grants will also help support operations during the
current coronavirus crises.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
Improvement in the weighted average credit quality of pool
participants
Improvement in the credit quality of Kingman Academy
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
Decline in the weighted average credit quality of pool
participants
Decline in the credit quality of Kingman Academy
Draws upon reserves or a default of any pool participant
LEGAL SECURITY
The primary source of payment for the bonds are State Per Pupil
Operating Revenues from each school provided by the direct transfer
of these funds to the Trustee to fund debt service payments. The
available cross collateralized debt service reserves equals $4.86
million, enhancing each school's individual credit reserve, and
strengthening default tolerance. Bonds are additionally secured by
a mortgage on participants' facilities. Covenants include a 1.2
times additional bonds test, and a 1.1 times debt service coverage
and 30 days' cash requirement.
PROFILE
The Pima County IDA revenues bonds are secured by a pool of nine
charter schools including: (1) Academy with Community Partners
(ACP), located in Mesa, which serves 120 students in grades 9-12;
(2) Benchmark Charter School serving 420 students in grades K-6;
(3) Dobson Ball Academy located in Chandler and serving 463 K-8
students; (4) Dobson Hearn Academy, located in Phoenix, serving 604
students in grades K-8; (5) Kingman Academy, which is located in
west central Arizona, about 35 miles from the Arizona/California
border, serving 1,407 students in grades K-12; (6) New School for
the Arts in Tempe, which serves 244 students in grades 6-12; (7)
Paramount Academy, located in Peoria, serves 237 students in grades
K-8; (8) Reid Valley Academy, located in northern Phoenix, serving
691 students; and (9) Young Scholars Academy, which serves 386
students in grades K-8.
METHODOLOGY
The principal methodology used in these ratings was Public Sector
Pool Programs and Financings Methodology published in April 2020.
PLATINUM CORRAL: Hits Chapter 11 Bankruptcy Protection
------------------------------------------------------
Platinum Corral, a Golden Corral franchisee operating in North
Carolina and Virginia, has filed for Chapter 11 bankruptcy
protection after closing more than half of its restaurants,
management revealed Friday, April 9, 2021.
The company said it sought protection from creditors because of a
drop in sales from the pandemic. The filing shows that Platinum has
just under $49.4 million in liabilities. It is believed to be the
second-largest franchisee within the Golden Corral system.
Sixteen of the buffet restaurants have been permanently shuttered,
according to a statement from the company, while two that were
temporarily closed are expected to be reopened. Platinum said it
tried to operate a number of its restaurants as cafeterias, with
limited indoor seating capacities, but the recasts "proved to be
financially unsustainable."
The company is the second big Golden Corral franchisee to file for
bankruptcy protection since the pandemic began. The system's
largest franchise operator, 33-unit 1069 Restaurant Group, filed
for Chapter 11 relief from creditors in October 2020. It, too,
cited a downturn from the pandemic as its reason.
The buffet market has been particularly hard hit by the pandemic
because of its signature serving style. Early in the COVID crisis,
many states suspended the operation of serve-yourself restaurants
because of fears that model would foster the spread of coronavirus
from one buffet user to the next.
Golden Corral initially closed all 35 company-operated restaurants
in the 490-store chain. In an interview with Restaurant Business
about two weeks ago, CEO Lance Trenary said that about 290 units
were open, with 40 of those operating as cafeterias.
The chain has been experimenting with a number of alternative
serving styles, including drive-thrus and takeout stations. It has
also revealed plans to try a fast-casual-like service model where
patrons give their orders at a counter and take a seat.
Platinum currently has six Golden Corrals open in North Carolina,
its home state, and four in Virginia. It anticipates that two
more—one in each state—will open later this 2021.
"We strongly believe the restructuring will afford us the
opportunity to successfully operate 12 Golden Corral Buffet
Restaurants in North Carolina and Virginia for the long term," Bill
Sewell, Platinum's president and CEO, said in a statement.
About Platinum Corral
Platinum Corral is a Golden Corral franchisee that operates in
North Carolina and Virginia.
Platinum Corral, L.L.C., for Chapter 11 bankruptcy protection
(Bankr. E.D.N.C. Case No. 21-00833) on April 9, 2021.
The Debtor's counsel:
Anna B. Osterhout
Smith/anderson/blount/dorsett/mitchell/
Tel: 919-821-1220
E-mail: aosterhout@smithlaw.com
Gerald A. Jeutter, Jr.
Smith Anderson, LLP
Tel: 919-821-1220
E-mail: jjeutter@smithlaw.com
POLYMER ADDITIVES: Moody's Hikes CFR to Caa1, Outlook Stable
------------------------------------------------------------
Moody's Investors Service has upgraded Polymer Additives, Inc.'s
(d/b/a Valtris Specialty Chemicals) Corporate Family Rating to Caa1
from Caa2, it's Probability of Default Rating to Caa1-PD from
Caa2-PD, as well as the company's senior secured first lien
revolver and term loan to Caa1 from Caa2. The outlook has been
changed to stable from negative.
"The rating upgrade is supported by a brighter macroeconomic
outlook, recovering manufacturing activities and Valtris' improving
earnings and credit metrics in 2021 from their pandemic lows of
2020," says Jiming Zou, a Moody's Vice President and Senior Analyst
for Valtris.
Upgrades:
Issuer: Polymer Additives, Inc.
Corporate Family Rating, Upgraded to Caa1 from Caa2;
Probability of Default Rating, Upgraded to Caa1-PD from Caa2-PD;
Senior Secured First Lien Revolving Credit Facility, Upgraded to
Caa1 (LGD4) from Caa2 (LGD4)
Senior Secured First Lien Term Loan, Upgraded to Caa1 (LGD4) from
Caa2 (LGD4)
Outlook Actions:
Outlook, Changed to Stable from Negative.
RATINGS RATIONALE
Demand for polymer additives such as plasticizers, stabilizers and
lubricants has been improving thanks to strong end markets and
restocking needs, as the vaccination rolls out and businesses
reopen. Demand for polymer additives is generally in line with GDP,
given their primary application in PVC, as well as other polyolefin
and rubber products, which in turn are driven by applications in
building, transport, packaging, electric and healthcare. Moody's
expects the stronger demand will help Valtris increase product
prices to offset raw material cost inflation, with its 2021 EBITDA
likely matching the pre-pandemic level of 2019.
The Caa1 rating reflects that the company's credit metrics will
remain weak, despite the expected improvement. Based on Moody's
estimates and including Moody's analytical adjustments, Valtris'
debt to EBITDA ratio will be close to mid-7x and interest coverage
between 1.5x-2.0x. The higher working capital needs to cover raw
material price inflation will leave no free cash flow for debt
reduction and may require drawdown from the revolver this year.
While earnings recovery will improve Valtris' financial
flexibility, covenant compliance continues to weigh on its credit
profile given the incomplete economic recovery in 2021 and Valtris'
vulnerability to adverse changes in the operating environment.
Valtris' liquidity sources include its cash on hand and the
availability under its $60 million revolving credit facility, which
will be sufficient to cover working capital needs in the next 12
months. The majority of the revolver remains available. The company
has to comply with a springing first-lien net leverage covenant of
not exceeding 7.85x, if more than 35% (or $21 million) of the
revolver is drawn. The company drew down the entire $60 million
revolver out of precaution at the height of the pandemic and
subsequently repaid almost all of the drawn amount at the end of
2020. A deterioration of its reported EBITDA towards about $50
million would increase the risk of covenant breach.
Valtris has a broad range of polymer additives, including
plasticizers, stabilizers and lubricants based on a variety of raw
materials including toluene, soybean oil and tallow. Its earnings
were negatively affected by a demand reduction in certain end
markets, particularly transportation and building products, while
demand for medical and sanitation applications remained strong
during the pandemic.
Valtris' rating is supported by its leadership in niche
applications such as bio-based plasticizers and environmentally
friendly fast-fusing plasticizers, that will show stronger growth.
Its business profile is also backed by a broad customer base,
geographic diversification, and entrenched customer relations. The
acquisition of INEOS' businesses, including esters, chlorotoluenes
and derivatives, in 2018 expanded the company's revenues base and
its product offerings with environmentally friendly esters
plasticizers and offer growth opportunities in benzyl alcohol and
derivatives.
The company's rating has also factored in environmental, social and
governance considerations. Government regulations on phthalate
plasticizers due to their perceived health hazards will continue to
impact the sales of certain Valtris products such as butyl benzyl
phthalate plasticizers (BBP), while offering growth opportunities
in environmentally friendly plasticizers. The ownership by a
private equity firm has constrained Valtris' credit profile given
the aggressive debt leverage and debt-funded acquisitions.
The stable outlook reflects Moody's expectation that credit metrics
will remain adequate for the rating and management will carefully
manage liquidity in the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would consider upgrading the ratings if the company
improves its debt leverage sustainably below 7.0x and improves its
liquidity profile. Conversely, the ratings could be lowered if
earnings fail to improve or liquidity deteriorates with negative
free cash flow or increased risk of covenant breach.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
Polymer Additives, Inc., d/b/a Valtris Specialty Chemicals, is a
manufacturer of a diverse set of polymer modifiers, lubricants, and
stabilizers primarily used as additives in the production of
plastics. Valtris is owned by H.I.G. Capital LLC, which purchased
Valtris as the majority of the assets associated with Ferro
Corporation's Polymer Additives Division in December 2014. In 2018,
Valtris acquired certain businesses from Ineos Group Holdings S.A.
Valtris generated about $600 million in sales in 2020.
PRO-PHARMA ADVISORY: Trustee Taps Greenspoon Marder as Counsel
--------------------------------------------------------------
Soneet Kapila, the Subchapter V trustee appointed in the Chapter 11
case of Pro-Pharma Advisory Group, LLC, seeks approval from the
U.S. Bankruptcy Court for the Southern District of Florida to
employ Greenspoon Marder, LLP as legal counsel.
The trustee needs legal assistance to respond to a subpoena
requiring the production of documents related to the bankruptcy
case.
Michael Bakst, Esq., an attorney at Greenspoon Marder, disclosed in
a court filing that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael R. Bakst, Esq.
Greenspoon Marder LLP
525 Okeechobee Blvd., Suite 900
West Palm Beach, FL 33401
Telephone: (561) 838-4523
Email: michael.bakst@gmlaw.com
About Pro-Pharma Advisory Group
Pro-pharma Advisory Group, LLC, based in Coral Springs, FL, filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Fla. Case No. 20-22824) on Nov. 24, 2020. Jason
Fine, sole managing member, signed the petition. At the time of the
filing, the Debtor disclosed $900,000 in assets and $1,431,724 in
liabilities. Judge Peter D. Russin presides over the case. Slatkin
& Reynolds, PA, serves as bankruptcy counsel.
On Nov. 24, 2020, Soneet R. Kapila was appointed as Subchapter V
trustee in the Debtor's Chapter 11 case. Michael R. Bakst, Esq., at
Greenspoon Marder LLP serves as the trustee's counsel.
PURDUE PHARMA: Disclosure Statement Hearing Adjourned to May 4
--------------------------------------------------------------
Counsel to Purdue Pharma L.P., et al., notified parties-in-interest
that the hearing on the Debtors' Disclosure Statement scheduled for
April 21 has been adjourned to May 4.
The hearing will be held May 4 at 10:00 a.m. (prevailing Eastern
Time) before the Honorable Robert D. Drain, United States
Bankruptcy Judge, United States Bankruptcy Court for the Southern
District of New York, 300 Quarropas Street, White Plains, New York
10601; provided that, pursuant to General Order M-543, dated March
20, 2020 (Morris, C.J.), the Disclosure Statement Hearing shall be
conducted telephonically so long as General Order M-543 is in
effect or unless otherwise ordered by the Bankruptcy Court.
The deadline for filing objections to the Disclosure Statement and
the Motion has been extended to April 23 at 4:00 p.m. (prevailing
Eastern Time).
As reported in the Troubled Company Reporter, Purdue Pharma L.P.,
et al., in mid March 2021 submitted a Plan that significantly
improves on the initial settlement framework that was in place at
the commencement of these Chapter 11 cases, most notably by
increasing the amount that Purdue Pharma's existing shareholders
will be required to pay in the aggregate from $3.0 billion to $4.5
billion. Of this sum, $225 million has been paid by the
shareholders to satisfy their civil settlement with the U.S.
Department of Justice, leaving $4.275 billion for the creditors in
this bankruptcy case. This material improvement in the recovery
from the shareholders directly increases by $1.275 billion the
amount of funds that can be directed towards abatement. A copy of
the Disclosure Statement filed March 15, 2021, is available at
https://bit.ly/3lpVWIF from PacerMonitor.com.
The Debtors announced March 31 the MSGE Group has made the informed
decision to support the Plan, including the enhanced settlement
with the Shareholder Parties, and wishes to execute a term sheet
with the Debtors memorializing its commitment to support the Plan
and to assist the Debtors in finalizing the many ancillary
agreements relating to the Plan and building support for the Plan.
The MSGE Term Sheet provides that the Debtors will reimburse the
reasonable and documented fees and expenses of Caplin & Drysdale,
Chartered as MSGE Counsel in accordance with the terms thereof. The
Debtors believe that the MSGE Group has contributed and will
continue to contribute substantially to the finalization and
success of the Plan, and that it is in the best interest of the
Debtors' estates that the MSGE Group and MSGE Counsel continue to
dedicate the time and resources necessary to help advance these
cases to confirmation.
The MSGE Group is the only ad hoc group that represents a
substantial cross-section of the Debtors' non-federal, non-state
public creditors, consisting of approximately 1,317 members,
including 1,245 cities, counties and other governmental entities, 9
tribal nations, 13 hospital districts, 16 independent public school
districts, 32 medical groups, and 2 funds across 38 states and
territories.
About Purdue Pharma LP
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and 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.
RAWHIDE RESOURCES: Seeks to Tap Reed Smith as Bankruptcy Counsel
----------------------------------------------------------------
Rawhide Resources, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Wyoming to employ Reed Smith, LLP as its
bankruptcy counsel.
Reed Smith will render these legal services:
(a) advise the Debtor regarding its powers and duties in the
continued operation of its business and the management of its
property;
(b) advise the Debtor and take all necessary or appropriate
actions to protect and preserve its estate;
(c) draft all necessary legal papers;
(d) represent the Debtor in negotiations with all other
creditors and other parties in interest;
(e) take all necessary or appropriate actions in connection
with a plan of reorganization, disclosure statement and all related
documents; and
(f) perform other necessary legal services in connection with
the Debtor's Chapter 11 case.
The hourly rates of Reed Smith's professionals who will be
principally engaged in this matter are:
Keith M. Aurzada, Partner $825
Devan Dal Col, Associate $485
Shikendra Bedford-Rhea, Paralegal $295
In addition, Reed Smith will seek reimbursement for expenses.
The Debtor does not owe Reed Smith any amounts relating to services
rendered prior to the petition date.
Keith Aurzada, Esq., a partner at Reed Smith, disclosed in a court
filing 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:
Keith M. Aurzada, Esq.
Reed Smith LLP
2850 N. Harwood Street, Suite 1500
Dallas, TX 75201
Telephone: (469) 680-4292
Facsimile: (469) 680-4299
Email: kaurzada@reedsmith.com
About Rawhide Resources
Rawhide Resources, a privately held company in the oil and gas
extraction business based in Gillette, Wyo., sought Chapter 11
protection (Bankr. D. Wyo. Case No. 21-20101) on March 24, 2021.
Thomas R. Wright, managing member, signed the petition. At the
time of the filing, the Debtor disclosed $629,609 in assets and $1
million to $10 million in liabilities. Reed Smith, LLP serves as
the Debtor's legal counsel.
ROMANS HOUSE: Says Pender's Plan Not Confirmable
------------------------------------------------
Romans House, LLC, and Healthcore System Management, LLC, objected
to the Disclosure Statement accompanying the Plan of Reorganization
filed by Pender Capital Asset Based Lending Fund I, LP, the Plan
Proponent.
The Debtors assert that the Plan is not confirmable because it does
not provide for the payment of allowed administrative claims on the
Effective Date, as required by Section 1129(a)(9) of the Bankruptcy
Code. The Debtors said the Disclosure Statement only provides for
the payment of between $50,000 to $75,000 of Professional Fee
Claims. Nevertheless, the professional fees of DeMarco Mitchell,
PLLC and Levene, Neale, Bender, Yoo & Brill L.L.P. (the Debtors'
counsel and co-bankruptcy counsel, respectively) total
approximately $86,000 and will increase. He said the Plan also
includes impermissible third-party releases purportedly extending
to the Plan Proponent, which releases are barred by Section 524(e)
and Fifth Circuit law.
Moreover, the Debtors said the Disclosure Statement does not
provide adequate information, citing that it lacked information
about (i) the secured claim of Natlie, LLC, for a $46,495 loan to
Debtor Romans House, and (ii) the alleged Exit Facility, its
amount, interest rate, repayment terms, etc., which facility will
be provided by the Plan Proponent.
A copy of the Objection is available for free at
tinyurl.com/yn9j48mr from PacerMonitor.com.
About Romans House
Based in Fort Worth, Texas, Romans House, LLC operates Tandy
Village Assisted Living, a continuing care retirement community and
assisted living facility for the elderly in Fort Worth, Texas.
Affiliate Healthcore System Management, LLC, operates Vincent
Victoria Village Assisted Living, also an assisted living facility
for the elderly.
Romans House, LLC, and Healthcore System sought Chapter 11
protection (Bankr. N.D. of Tex. Case No. 19-45023 and 19-45024) on
Dec. 9, 2019. Romans House was estimated to have $1 million to $10
million in assets and liabilities while Healthcore was estimated to
have $1 million to $10 million in assets and $10 million to $50
million in liabilities.
The Hon. Edward L. Morris is the case judge.
Demarco Mitchell, PLLC, is the Debtors' legal counsel. Levene,
Neale, Bender, Yoo & Brill L.L.P., serves as their co-bankruptcy
counsel.
Pender Capital Asset Based Lending Fund I, LP, has filed a
Disclosure Statement and Plan of Reorganization for Romans House,
LLC, dated March 1, 2021. Pender is represented in the case by:
Michael J. Barrie, Esq.
Gregory Werkheiser, Esq.
Kevin M. Capuzzi, Esq.
BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP
1313 North Market Street, Suite 1201
Wilmington, DE 19801
Telephone: (302) 442-7010
Facsimile: (302) 442-7012
E-mail: kcapuzzi@beneschlaw.com
- and -
Frances A. Smith, Esq.
ROSS AND SMITH, P.C.
Plaza of the Americas
700 N. Pearl Street, Suite 1610
Dallas, TX 75201
Telephone: (214) 377-7879
Facsimile: (214) 377-9409
E-mail: frances.smith@judithwross.com
RUBY PIPELINE: S&P Lowers ICR to 'CCC', Outlook Negative
--------------------------------------------------------
On April 9, 2021, S&P Global Ratings lowered its issuer credit
rating on Ruby Pipeline LLC (Ruby) to 'CCC' from 'B-' and its
issue-level rating on the company's senior unsecured notes to
'CCC+' from 'B'. The '2' recovery rating is unchanged, indicating
its expectation for substantial recovery (70%-90%; rounded
estimate: 85%) in the event of a payment default.
S&P said, "At the same time, we removed the ratings from
CreditWatch, where they were placed with negative implications on
Feb. 1, 2021.
"The negative outlook reflects our expectation that we could lower
our ratings if we believe Ruby is unable to refinance the notes and
we view a distressed exchange or default as highly likely within
the next six months.
"Unsustainable credit metrics result in material refinancing risk.
We project that Ruby's free cash flows will be lower, given the
upcoming expiry of its contracts maturing in July 2021, which
represented about 65% of its 2020 revenues. Under our base-case
scenario, we do not anticipate a revision of management's financial
policies or additional support from indirect owners, Kinder Morgan
Inc. (KMI; BBB/Stable/A-2) and Pembina Pipeline Corp. (PPL;
BBB/Stable/--). Furthermore, we expect that some of the generated
cash flows will be paid out as preferred dividends to PPL.
"This would result in a material decline in Ruby's credit metrics
to about 8.0x in 2022 from about 3.8x in 2021. We would deem that
type of leverage to be an unsustainable capital structure, which
will likely be an impediment to refinancing the full amount of the
upcoming April 2022 notes.
"Liquidity will likely be insufficient to pay down the $475 million
of senior unsecured notes due April 2022. We expect that Ruby won't
have sufficient liquidity on its balance sheet to pay down a
substantial portion of the outstanding $475 million due April 2022.
Forecast funds from operations (FFO) of about $105 million will
represent most of Ruby's liquidity, as the company doesn't have
access to a revolving credit facility. Therefore, without
additional support from its indirect owners, in our opinion, Ruby's
liquidity will be constrained given the large maturity wall."
Ruby could engage in a distressed exchange or a restructuring. The
limited refinancing options, constrained liquidity, and approaching
debt maturity increase the likelihood that Ruby will engage in
transactions with its bondholders that we could characterize as
distressed based on the terms and conditions agreed upon. This
could be viewed as selective default and would result in a further
downgrade.
S&P said, "The negative outlook reflects our expectation that Ruby
will likely face a default on its senior unsecured notes maturing
April 2022, without support from its indirect owners. We could
lower our ratings if we believe the company is unable to refinance
the notes and we view a distressed exchange or default as highly
likely within the next six months.
"We could lower our ratings if we believe a default or distressed
exchange appears virtually inevitable within the next six months.
"We do not expect a positive rating action over the next 12 months
given our assessment of the capital structure as unsustainable and
liquidity as weak. However, we could raise the rating if Ruby has a
refinancing strategy in place for the notes and stabilizes its
liquidity position."
RUSSELL INVESTMENTS: Moody's Alters Outlook on Ba2 CFR to Negative
------------------------------------------------------------------
Moody's Investors Service has changed the outlook on the ratings of
Russell Investments Cayman Midco, Ltd. (a/k/a "Russell
Investments") to negative from stable based on a $407 million
incremental borrowing on its existing senior secured term loan due
May 2025 to fund a dividend to shareholders. Concurrently, Moody's
has affirmed Russell Investments' Ba2 Corporate Family Rating and
the Ba2 senior secured term loan and revolving credit facility
ratings.
The net proceeds from the incremental term loan borrowing, together
with balance sheet cash, will be used to a pay a dividend
distribution of $406 million and to prepay $107 million in existing
debt maturing in 2023. This is the company's third dividend recap
since it was purchased by its private equity sponsors in 2016.
LIST OF AFFECTED RATINGS
Issuer: Russell Investments Cayman Midco, Ltd.
Affirmations:
Corporate Family Rating, Affirmed Ba2
Probability of Default Rating, Affirmed Ba2-PD
Outlook Actions:
Outlook, Changed to Negative from Stable
Issuer: Russell Investments US Institutional Holdco, Inc./Russell
Investments US Retail Holdco, Inc., as co-borrowers:
senior secured term loan, Affirmed Ba2
senior secured revolving credit facility, Affirmed Ba2
Outlook Actions:
Outlook, Changed to Negative from Stable
RATINGS RATIONALE
The change in outlook to negative from stable reflects the risk the
Russell's credit metrics will remain weak for the current Ba2
rating over the next 12-18 months due to the re-leveraging effect
of the dividend recapitalization. Recent negative trends in the
company's net flows and net revenue growth could constrain organic
EBITDA growth and result in the company's leverage
(Moody's-adjusted debt/EBITDA) remaining elevated over the next
12-18 months. Pro-forma leverage will increase to 4.6x as a result
of the transaction from 3.7x at year-end 2020. The negative outlook
also reflects Russell's private equity owners' propensity to use
leverage and existing balance sheet liquidity to fund large
shareholder dividends.
Russell has made progress in deleveraging its balance sheet from
its last dividend recapitalization transaction in May 2018.
However, the principal driver of the deleveraging has been the
realization of cost savings. While Moody's believe the company has
more room to cut costs, deleveraging over the next 12 -- 18 months
will require accelerating revenue growth. This will be a challenge
as Russell's revenues have declined for three consecutive years
amid fee pressure and net outflows.
On April 30, Russell announced a strategic partnership with
Hamilton Lane, a well-known and respected alternatives asset
manager. This partnership will bolster Russell's private markets
offering and improve the competitiveness of its solutions platform
relative to other outsourced chief investment office space (OCIO).
However, these benefits will develop over time and are unlikely to
offset the impact of the increased leverage in the near term. In
addition, Russell has taken steps to improve lead generation,
refine its retail sales effort and modernize its OCIO offering. But
the successful execution of these initiatives remains to proven.
The Ba2 corporate family rating is supported by the company's solid
business profile, underpinned by its (1) large recurring revenue
base; (2) strong AUM retention rates; and (3) high degree
diversification by geography. The company's rating is constrained
by high leverage, low profitability as measured by the pre-tax
margin, weak organic growth and aggressive financial policies.
Russell Investments is a leader in the OCIO market, which has been
experiencing solid growth in recent years as institutions seek more
resources and fiduciary oversight. However, the company's asset
growth has not kept pace with overall OCIO growth, which the
company is seeking to address, as noted above.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, an upgrade is unlikely in the next
12-18 months. The company's ratings and/or outlook could see return
to stable if Russell Investments reduces leverage below 4.5x;
revenue growth accelerates and the company achieves positive
operating leverage; and net flows improve substantially from a weak
2020.
Conversely, the ratings could face downward pressure if Russell
Investments fails to reduce leverage as calculated by Moody's below
4.5x; net outflows continue at a high level; and/or revenue growth
remains stagnant; or Russell Investments does another dividend
recapitalization.
The principal methodology used in these ratings was Asset Managers
Methodology published in November 2019.
Russell Investments, head quartered in Seattle, WA, is a global
asset manager with $217 billion in assets under management ("AUM"),
excluding its overlay, as of December 31, 2020.
SC SJ Holdings: Accor Management Appointed as New Committee Member
------------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Accor Management US,
Inc. as new member of the official committee of unsecured creditors
in the Chapter 11 cases of SC SJ Holdings, LLC and its affiliates.
The members of the committee are now composed of:
1. San Jose Water Company
Attn: Celeste Angelich
110 West Taylor Avenue
San Jose, CA 95110
Phone: 408-316-3017
Email: celeste@angelich@sjwater.com
2. Minibar North America, Inc.
Attn: Anthony J. Torano
7340 Westmore Road
Rockville, MD 20850
Phone: 301-354-5051
Email: tony.torano@minibar.com
3. Pacific Coast Trane Service
Attn: J.P. O'Connell
310 Soquel Way
Sunnyvale, CA 94085
Phone: 408-481-3600
Email: jpoconnell@trane.com
4. Accor Management US, Inc.
Attn: Jarrett Kratchman
137 National Plaza, Suite 300, Unit 306
National Harbor, MD 20745
Phone: 917-453-9677
Fax: 646-328-6651
Email: Jarrett.Kratchman@accor.com
lawdept@accor.com
About SC SJ Holdings and FMT SJ
San Ramon-based Eagle Canyon Management's SC SJ Holdings LLC owns
The Fairmont San Jose, an 805-room luxury hotel located at 170
South Market St., San Jose, Calif. The hotel is near many of the
largest Fortune 1000 corporations and is a popular location for
conferences and conventions, particularly in the technology
industry.
On March 5, 2021, SC SJ Holdings' affiliate, FMT SJ LLC, filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Case No. 21-10521). On March 10, 2021, SC SJ
Holdings sought Chapter 11 protection (Bankr. D. Del. Case No.
21-10549). The cases are jointly administered under Case No.
21-10549.
At the time of the filing, SC SJ Holdings disclosed assets of
between $100 million and $500 million and liabilities of the same
range. FMT SJ disclosed that it had estimated assets of between
$500,000 and $1 million and liabilities of between $100 million and
$500 million.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Pillsbury Winthrop Shaw Pittman, LLP as their
bankruptcy counsel, Cole Schotz P.C. as local counsel, and Verity
LLC as financial advisor. Stretto is the claims agent and
administrative advisor.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors on March 26, 2021. The committee
is represented by Seward & Kissel, LLP.
SCIENTIFIC GAMES: Moody's Affirms B3 CFR & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service affirmed Scientific Games International,
Inc.'s B3 Corporate Family Rating, B3-PD Probability of Default
Rating, B1 rated senior secured facilities and senior secured
notes, and Caa2 rated senior unsecured notes. The company's
Speculative Grade Liquidity rating was upgraded to SGL-2 from SGL-3
and the outlook was changed to stable from negative.
The change in outlook to stable from negative reflects the recovery
in the company's gaming operations as the number of gaming
facilities open has favorably increased revenue and operating
income for the company, following the Q2 2020 closures. While
sequential improvement in 2021 is expected, Moody's anticipates
gaming activity will remain below pre-pandemic levels until at
least 2022 with leverage remaining elevated. The outlook change
also reflects that the company's good cost discipline and more
resilient lottery business. These factors along with a pullback in
capex, enabled the company to generate over $280 million of
positive free cash flow in 2020 and Moody's projects a similar free
cash flow level can be achieved in 2021 despite an increase in
capex.
The following ratings/assessments are affected by the action:
Ratings Upgraded:
Issuer: Scientific Games International, Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3
Ratings Affirmed:
Issuer: Scientific Games International, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
GTD Senior Secured Revolving Credit Facility, Affirmed B1 (LGD3)
Senior Secured Term Loan B5, Affirmed B1 (LGD3)
GTD Senior Secured Global Notes, Affirmed B1 (LGD3)
GTD Senior Unsecured Global Notes, Affirmed Caa2 (LGD5)
Senior Unsecured Notes, Affirmed Caa2 (LGD5)
Outlook Actions:
Issuer: Scientific Games International, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Scientific Games' B3 CFR reflects the meaningful revenue and
earnings decline from efforts to contain the coronavirus and the
potential for an uneven recovery as its gaming customers'
properties have reopened. The rating also considers the company's
significant debt-to-EBITDA leverage level, which Moody's
anticipates will remain above 8x at year end 2021. Another key
credit concern is the relatively flat outlook for slot machine
demand in the US, with the company's new games and cabinets looking
to help drive performance in the Gaming operating segment. Revenues
are largely tied to the volume of gaming machine play, gaming
machine sales, and lotteries. Positive rating consideration is
given to SGI's large recurring revenue base during normal
operational periods. The company is also well positioned to benefit
from the growth of digital gaming products and sports betting, as
these markets continue to expand and mature. SGI owns a large
portfolio of complementary gaming products and services, both
digital and non-digital, that it can utilize and cross-sell
globally among its various distribution platforms.
The company's speculative-grade liquidity rating of SGL-2 reflects
good liquidity and the upgrade from SGL-3 is due to the growing and
sizable cash balance built in part through continued positive free
cash flow. SGI has amended its credit facility and covenant levels
providing covenant relief through year end 2021. The company is
subject to a minimum liquidity covenant throughout 2021 of $275
million with which Moody's believes the company will remain in
compliance. As of December 31, 2020, SGI had unrestricted cash of
$1,016 million and $103 million of availability on its $650 million
revolving credit facility. In February 2021 the company repaid
another $100 million on the revolver. Moody's anticipates the
company will continue to repay amounts outstanding on its revolving
credit facility. Moody's estimates the company could maintain
sufficient internal cash sources after maintenance capital
expenditures to meet required annual term loan amortization of
approximately $44 million and interest requirements over the next
twelve-month period.
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
Scientific Games 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 and related sectors have been one of the sectors
most significantly affected by the shock given its sensitivity to
consumer demand and sentiment. More specifically, the weaknesses in
Scientific Game'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 Scientific Games remains vulnerable to the
outbreak continuing to spread.
Governance risk are elevated because the company's aggressive
financial policy including acquisitions is contributing to very
high leverage. Moody's believes the company will focus on debt
repayment over the next year to help reduce leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook considers the partial recovery in the company's
business exhibited in the second half of 2020, and Moody's
expectation for continued sequential improvement in 2021, notably
in the gaming segment. The stable outlook also incorporates the
company's good liquidity and Moody's expectation for leverage to
continue to come down from current elevated levels as the business
recovers and debt is reduced. Scientific Games remains vulnerable
to travel disruptions and unfavorable sudden shifts in
discretionary consumer spending and the uncertainty regarding the
pace at which consumer spending at reopened gaming properties will
recover.
Ratings could be downgraded if liquidity deteriorates or if Moody's
anticipates Scientific Games' earnings recovery will be more
prolonged or weaker than expected because of actions to contain the
spread of the virus or reductions in discretionary consumer
spending.
The ratings could be upgraded if customers facilities remain open
and earnings recover such that the company maintains positive free
cash flow and reinvestment flexibility and debt-to-EBITDA is
sustained near 6.0x.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Scientific Games is a developer of technology-based products and
services and associated content for worldwide gaming, lottery,
social and digital gaming markets. Scientific Game Corporation
(NASDAQ: SGMS) is the publicly traded parent company of Scientific
Games International, Inc., the direct borrower of over $8 billion
of rated debt. Consolidated revenue for the latest 12-month period
ended December 31, 2020 was $2.7 billion.
SERENDIPITY LABS: To Seek Plan Confirmation on May 12
-----------------------------------------------------
Judge Sage M. Sigler entered an order conditionally approving the
Disclosure Statement for the Chapter 11 Plan of Reorganization of
Serendipity Labs, Inc., and setting a May 12, 2021 hearing to
consider confirmation of the Plan.
The Bankruptcy Court will conduct a combined hearing for final
approval of the Disclosure Statement and for confirmation of the
Plan on May 12 12:00 p.m. (prevailing Eastern Time), at the United
States Bankruptcy States for the Northern District of Georgia,
Courtroom 1201, Richard B. Russell Federal Building and United
States Courthouse, 75 Ted Turner Drive SW, Atlanta, Georgia 30363.
The voting record date is April 9, 2021. May 4, 2021 at 4:00 p.m.
(prevailing Eastern Time) is the voting deadline and deadline for
objections to the Disclosure Statement and Plan.
As reported in the Troubled Company Reporter, Serendipity Labs
submitted a First Amended Disclosure Statement for its Chapter 11
Plan of Reorganization. Under the Plan, Class 3 General Unsecured
Claims totaling $3,695,000 will recover 100% of their claims. Each
Holder of a General Unsecured Claim shall receive cash, plus
interest accruing at the Federal Post-Judgment Rate from the
Petition Date through the date of payment, to be made on the
earlier of the Effective Date or the date upon which such General
Unsecured Claim becomes Allowed. Class 3 is unimpaired.
A copy of the First Amended Disclosure Statement is available at
https://bit.ly/2OwAAxo from PacerMonitor.com.
About Serendipity Labs
Serendipity Labs, Inc., is a workplace-as-a-service company that
offers co-working, shared offices and team suites. It has over 35
locations in urban, suburban, and secondary markets across the
United States.
Serendipity Labs filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
20-68124) on July 15, 2020. John Arenas, chairman and CEO, signed
the petition. At the time of the filing, the Debtor estimated $10
million to $50 million in assets and $1 million to $10 million in
liabilities. Judge Sage M. Sigler oversees the case. Nelson
Mullins Riley & Scarborough, LLP is the Debtor's legal counsel.
SHORE PROPERTY: Case Summary & 3 Unsecured Creditors
----------------------------------------------------
Debtor: Shore Property Holdings, LLC
40 W Chesapeake Ave Ste 506
Towson, MD 21204-4892
Business Description: Shore Property Holdings, LLC is a real
estate holding company.
Chapter 11 Petition Date: April 13, 2021
Court: United States Bankruptcy Court
District of Maryland
Case No.: 21-12410
Debtor's Counsel: Gary S. Poretsky, Esq.
PHOENIX LAW GROUP, LLC
7 Church Lane Suite 5
Pikesville, MD 21208
E-mail: gary@plgmd.com
Total Assets: $0
Total Liabilities: $1,556,000
The petition was signed by C. Richard Edgar Benson, member 6th
Street Properties, majority member.
A full-text 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/FMXYDQY/Shore_Property_Holdings_LLC__mdbke-21-12410__0001.0.pdf?mcid=tGE4TAMA
SIWF HOLDINGS: Moody's Hikes CFR to B2 on Strong Operating Profit
-----------------------------------------------------------------
Moody's Investors Service upgraded SIWF Holdings, Inc.'s (Springs
Window or Springs) ratings including its Corporate Family Rating to
B2 from B3, its Probability of Default Rating to B2-PD from B3-PD,
its senior secured first lien term loan due 2025 rating to B1 from
B2, and the senior secured second lien term loan due 2026 rating to
Caa1 from Caa2. The outlook is stable.
The ratings upgrade reflects Springs' strong operating profit and
free cash flow generation in fiscal year 2020 that resulted in
improved credit metrics and liquidity. Following a material sales
and earnings decline during the second quarter of fiscal 2020
because of coronavirus related headwinds, consumer demand for the
company's window covering products recovered sharply and remains
very high. During the second half of 2020 the company reported very
strong sales and earnings recovery in its dealer and retail
channels from April 2020 lows, that more than offset continued
weakness in its commercial channel. Sales benefitted from increased
consumer spending in home improvement, and EBITDA margin expanded
about 400 basis points benefitting from positive pricing actions,
favorable mix, and manufacturing efficiencies and costs savings
initiatives. In addition, Springs' reported relatively strong free
cash flow in fiscal 2020, driven primarily by earnings growth, as
well as positive working capital, and the timing or certain
expenses. As a result, the company's debt/EBITDA leverage improved
to around 5.1x for the fiscal year end January 2, 2021. Moody's
expects continued good consumer demand at least thought the first
half of calendar 2021, that combined with the company's lapping
weak operating results during the first half of fiscal 2020, should
help offset continued weakness in the commercial channel and tough
comparisons in the second half of 2021, resulting in stable revenue
and EBITDA in fiscal 2021.
The following ratings/assessments are affected by the action:
Ratings Upgraded:
Issuer: SIWF Holdings, Inc.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
GTD Senior Secured 1st Lien Term Loan, Upgraded to B1 (LGD3) from
B2 (LGD3)
GTD Senior Secured 2nd Lien Term Loan, Upgraded to Caa1 (LGD5)
from Caa2 (LGD5)
Outlook Actions:
Issuer: SIWF Holdings, Inc.
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Springs' B2 CFR broadly reflects its high financial leverage with
debt/EBITDA at around 5.1x for the fiscal year period ending
January 2, 2021. The company is exposed to cyclical downturns given
the discretionary nature of its products, and a prolonged period of
high unemployment or weak economic conditions will negatively
affect the company's operating results. Springs' commercial segment
which accounts for about 20% of revenue, continues to lag the
recovery in its residential segment due to coronavirus related
project slowdown. Springs has customer concentration with two
national retailers accounting for approximately a quarter of
revenue, and the company's direct competitor is considerably larger
with global scale, which creates the potential for market share
volatility. Governance factors include aggressive financial
policies under private equity ownership, including high financial
leverage, and the inherent risk of shareholder friendly activities
such as debt funded dividend distributions.
The rating also reflects Springs' strong position in the window
coverings market, supported by a broad product portfolio and
ability to execute quick order turnaround times. The company has
good channel diversification and has long-standing relationships
with well-recognized retailers. Demand for the company's
residential product has been very high, aided by more residential
investment while consumers spend more time at home and capitalize
on low borrowing costs, and is more than offsetting lingering
weakness in Spring's commercial business. Moody's expects continued
good consumer demand at least through the first half of 2021, that
should support stable revenue and earnings as well as credit
metrics. Moody's also anticipates some of the elevated consumer
spending on home products to gradually shift toward other spending
such as travel as the effects of the coronavirus moderate, but to a
level that still supports Springs' leverage remaining within the
current range. Springs is also likely to deploy its sizable cash
balance for acquisitions and growth initiatives that can mitigate
any earnings pullback from demand shifts. Springs' very good
liquidity reflects its relatively healthy cash balance of $177
million as of January 2, 2021, good projected free cash flow
generation, and access to an undrawn $125 million revolving credit
facility due 2023.
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
Springs Window from the current weak US economic activity and a
gradual recovery for the coming months. Although an economic
recovery is underway, it is tenuous, and its continuation will be
closely tied to containment of the virus. As a result, the degree
of uncertainty around Moody's forecasts is unusually high. Moody's
regards the coronavirus outbreak as a social risk under Moody's ESG
framework, given the substantial implications for public health and
safety.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectations that continued
good consumer demand for the company's products will support stable
revenue and earnings over the next 12-18 months, resulting in good
free cash flow generation in the $60-$65 million range. The stable
outlook also reflects Moody's expectations that the company will
maintain at least good liquidity.
The ratings could be upgraded if the company consistently reports
organic revenue growth and EBITDA margin expansion, debt/EBITDA is
sustained below 4.5x, and free cash flow/debt is in the high single
digits. A ratings upgrade will also require the company to maintain
at least good liquidity, and Moody's to expect balanced financial
policies that support credit metrics at these levels.
The ratings could be downgraded if the company's revenue or EBITDA
margin deteriorates, of if debt/EBITDA is sustained above 6.0x.
Ratings could also be downgraded if liquidity deteriorates
highlighted by weakening free cash flow generation or increased
reliance on the revolver facility, or if the company completes a
debt financed acquisition or shareholder distribution that
materially increases leverage.
The principal methodology used in these ratings was Consumer
Durables Industry published in April 2017.
Headquartered in Middleton, Wisconsin, Springs Windows designs and
manufactures window coverings. Revenue as of the fiscal year end
January 2, 2021 is approximately $1 billion. The company is owned
by AEA Investors and British Columbia Investment Management
Corporation.
SKYFUEL INC: Plan of Reorganization Confirmed by Judge
------------------------------------------------------
Judge Joseph G. Rosania, Jr., has entered an order approving the
Disclosure Statement and confirming Plan of Reorganization of
Skyfuel, Inc.
The Debtor and Reorganized Debtor shall comply with all applicable
non-bankruptcy law governing any contract, agreement, award, lease,
covenant, guaranty, indemnification, or other interest of or with
the United States (each a "Federal Interest" and together, "Federal
Interests"), including but not limited to all statutes and
regulations governing the terms of any award or agreement between
the U.S. Department of Energy and the Debtor or Reorganized Debtor.
Any assumption, sale, assignment, or transfer of the Assistance
Agreement, effective date October 1, 2018, between DOE's Office of
Energy Efficiency and Renewable Energy and the Debtor, is subject
to DOE regulations, including but not limited to 2 C.F.R. §
910.368, and applicable non-bankruptcy law.
Alliance for Sustainable Energy, LLC, Managing and Operating
Contractor for the National Renewable Energy Laboratory withdraws
its objections to the Plan and consents to the Debtor and/or
Reorganized Debtor's assumption of the intellectual property
license ("License") Alliance granted the Debtor in April 2002 and
the contract known as a Cooperative Research and Development
Agreement ("CRADA" and together with the License, the "NREL
Contracts") entered into with the Debtor in November 2007, and for
the avoidance of doubt, nothing shall be interpreted to constitute
an amendment or modification of the terms of the NREL Contracts.
Pursuant to the Plan, the Debtor is selling the Equity to Zhongxn
Kaidi Electric Power Engineering Co., Ltd f/k/a China Kaidi
Electric Power Engineering Co., Ltd., and the Proceeds of the sale
will be paid to Creditors with Allowed Claims as provided for in
the Plan.
A full-text copy of the Plan Confirmation Order dated April 8,
2021, is available at https://bit.ly/2PZgXyv from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
David W. Parham, Esq.
Texas SBN: 15459500
Amy M. Leitch, Esq.
AKERMAN LLP
2001 Ross Avenue, Suite 3600
Dallas, TX 75201
Telephone: (214) 720-4300
Facsimile: (214) 981-9339
About Skyfuel Inc.
Founded in 2007, Skyfuel, Inc. -- http://www.skyfuel.com/--
designs, manufactures and deploys complete solar field solutions
featuring the SkyTrough and SkyTroughDSP parabolic trough
concentrating solar collectors. SkyFuel is the solar thermal
technology arm of the Sunshine Kaidi New Energy Group Co., Ltd.
(Kaidi), a multi-billion dollar energy company based in Wuhan,
China.
An involuntary Chapter 11 petition for relief against SkyFuel, Inc.
(Bankr. D. Colo. Case No. 19-12400) was filed on March 29, 2019.
The court entered an order for relief on April 23, 2019. The
Debtor is represented by Akerman LLP.
STANFORD JONES: Seeks Court Approval to Tap Real Estate Agent
-------------------------------------------------------------
Stanford, Jones & Loyless, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Alabama to employ
Cathy Pryor, a real estate agent at ARC Reality Vestavia.
The Debtor needs the assistance of a real estate agent to list its
real property located at 1314 Cobb Lane Birmingham, Ala., obtain
sale contract, and assist in closing of sale of the property.
Ms. Pryor will receive a total commission of 5 percent for her
services.
Ms. Pryor disclosed in a court filing that she is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The real estate agent can be reached at:
Cathy Pryor
ARC Reality Vestavia
4274 Cahaba Heights Ct., Ste. 200
Vestavia, AL 35243
Telephone: (205) 969-8910
Facsimile: (205) 969-8990
About Stanford, Jones & Loyless
Based in Birmingham, Ala., Stanford, Jones & Loyless, LLC sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D.
Ala. Case No. 20-00503) on Feb. 6, 2020, listing under $1 million
in both assets and liabilities. Michael E. Bybee, Esq., at the Law
Office of Michael E. Bybee, is the Debtor's legal counsel.
STONEWAY CAPITAL: Clearly Gottlieb Represents Noteholder Group
--------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Cleary Gottlieb Steen & Hamilton LLP submitted a
verified statement to disclose that it is representing the Ad Hoc
Steering Committee in the Chapter 11 cases of Stoneway Capital
Ltd., et al.
The Ad Hoc Steering Committee holds claims against Stoneway as
issuer; its subsidiaries Stoneway Energy International LP, Stoneway
Energy LP, Araucaria Power Generation S.A., Araucaria Energy S.A.,
SPI Energy S.A., and Araucaria Generation S.A. as guarantors; and
Stoneway Power Generation Inc. and Stoneway Group LP as pledgors in
connection with the Senior Secured Notes issued under that certain
Indenture, dated as of February 15, 2017; as amended and restated
by that Amended and Restated Indenture, dated as of November 9,
2017; as supplemented by that First Supplemental Indenture, dated
as of November 15, 2017; and as supplemented by that Second
Supplemental Indenture, dated as of June 29, 2018, by and among the
Debtors and UMB Bank, N.A., a national banking association
organized and existing under the laws of the United States of
America, as successor to The Bank of New York Mellon, as indenture
trustee. The members of the Ad Hoc Steering Committee are as
follows: BlackRock Advisors, LLC; Carmignac Gestion S.A.;
DoubleLine Capital LP; FIL Investments International; and GML
Capital LLP. The Ad Hoc Steering Committee holds a majority of the
Senior Secured Notes.
As of April 8, 2021, members of the Ad Hoc Steering Committee and
their disclosable economic interests are:
Senior Secured Notes
--------------------
BlackRock Advisors, LLC $95,408,284.50
c/o BlackRock Advisors, LLC
55 East 52nd St.
New York, NY 10055
Carmignac Gestion S.A. $33,153,570.77
24 Place Vendôme
75001 Paris, France
DoubleLine Capital LP $60,352,481.45
c/o DoubleLine Capital LP
333 South Grand Avenue, 18th Floor
Los Angeles, CA 90071
FIL Investments International $89,864,534.94
c/o Investment Legal FIL
Investments International
4 Cannon Street
London EC4M 5AB
England
GML Capital LLP $67,277,740.00
c/o GML Capital LLP
The Met Building
22 Percy Street
London W1T 2BU
United Kingdom
Counsel to the Ad Hoc Steering Committee can be reached at:
Richard J. Cooper, Esq.
Luke A. Barefoot, Esq.
Kristin Corbett, Esq.
CLEARY GOTTLIEB STEEN & HAMILTON LLP
One Liberty Plaza
New York, NY 10006
Telephone: (212) 225-2000
Facsimile: (212) 225-3999
E-mail: RCooper@cgsh.com
LBarefoot@cgsh.com
KCorbett@cgsh.com
A copy of the Rule 2019 filing is available at
https://bit.ly/3uNvb4w at no extra charge.
About Stoneway Capital
Stoneway Capital Corporation is a limited corporation incorporated
in New Brunswick, Canada, formed for the purpose of owning and
operating, through its Argentine subsidiaries, power generation
projects that will provide electricity to the wholesale electricity
markets in Argentina. The Argentine subsidiaries operate four
power-generating plants in Argentina that provide electricity to
the wholesale electricity market in Argentina.
Stoneway is 100% owned by GRM Energy Investment Limited.
On Oct. 8, 2020, the Company commenced proceedings under the Canada
Business Corporations Act (the "CBCA"). The Debtors were well on
the way toward closing the consensual restructuring when on Dec. 4,
2020, the Argentine Supreme Court issued a decision in an ongoing
noise discharge dispute involving one of the Generation Facilities
located in Pilar, Argentina. The Argentine Supreme Court Decision
created significant uncertainty as it overturned a decision of the
federal appeals court in San Martin, Buenos Aires.
As a result of the looming expiration of the informal standstill
arrangement, the Debtors have commenced chapter 11 cases in the
U.S. in order to put the automatic stay in place, maintain the
status quo pending resolution of the various issues in Argentina,
and ensure that neither the Indenture Trustee nor the Argentine
Trustee takes any action that could be detrimental or value
destructive to the Company.
Stoneway Capital Ltd. and five related entities, including Stoneway
Capital Corp., sought Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 21-10646) on April 7, 2021. Stoneway estimated
liabilities of $1 billion to $10 billion and assets of $500 million
to $1 billion.
Shearman & Sterling LLP is the Debtors' counsel. Prime Clerk LLC
is the claims agent.
SUMMIT FAMILY: Casa Bonita Files for Chapter 11 Bankruptcy
----------------------------------------------------------
Matt Grobar of Deadline reports that Casa Bonita, the beloved
Denver restaurant featured in a 2003 episode of South Park, has
filed for bankruptcy.
The Mexican restaurant was compelled to shut its doors in March of
2020, following the outbreak of the Covid-19 pandemic—and since
then, it has remained closed.
In the South Park episode written and directed by the show's
co-creator Trey Parker, Casa Bonita hosts the birthday of Kyle
(co-creator Matt Stone), as Cartman (Parker) tries to coordinate
Butters’ disappearance. Both Parker and Stone grew up in
Colorado, and are said to have based the episode on their memories
of going to Casa Bonita as kids.
Serving the Denver area for 46 years, Casa Bonita is also known for
its 30-foot waterfall, arcade and inviting atmosphere.
Casa Bonita's owners, Summit Family Restaurants, reportedly filed
for Chapter 11 on April 6, 2021, meaning that they are allowed to
propose a plan of financial restructuring and reorganization, in
order to keep their business afloat.
While the restaurant's website says that it will be "re-opening
soon," some of its patrons have expressed their doubts, creating a
GoFundMe page to make sure that the "cultural and historic icon"
and "vibrant piece of the Colorado landscape" doesn't disappear.
Created by Andrew Novick, the "SAVE CASA BONITA" campaign has thus
brought in $17,590 of its $100,000 goal.
About Summit Family Restaurants
Summit Family Restaurants owns and operates Denver restaurant Casa
Bonita. The restaurant, which opened in 1974, shut its doors in
March 2020, at the beginning of the COVID-19 pandemic.
Summit's parent, Star Buffet, Inc., owns and operates restaurants
in several western states, Oklahoma, and Florida. The Company
operates restaurants under the HomeTown Buffet, JB's Restaurants,
BuddyFreddys, JJ North's Country Buffet, Holiday House, Casa
Bonita, and North's Star Buffet names. Star Buffet's restaurants
provide customers with a variety of fresh food at moderate prices.
Summit Family Restaurants Inc. filed a bankruptcy petition under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz.
Case No. 21-02477) on April 6, 2021. The Debtor disclosed total
assets of $3.682 million and total liabilities of $4.425 million as
of March 31, 2021.
The Debtor's counsel:
WESLEY DENTON RAY
Sacks Tierney P.A.
Tel: 480-425-2674
E-mail: ray@sackstierney.com
TECT AEROSPACE: $22MM DIP Loan, Cash Collateral Use OK'd
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
authorized TECT Aerospace Group Holdings Inc., TECT Hypervelocity,
Inc., TECT Aerospace Wellington Inc., and Sun Country Holdings, LLC
and their affiliated debtors, to, among other things, use cash
collateral on an interim basis and obtain postpetition financing.
The Debtors require the Postpetition Financing Arrangement to (i)
permit the continuation of their businesses and maximize and
preserve their going concern value, (ii) satisfy payroll
obligations and other working capital and general corporate
purposes of the Debtors consistent with the terms set forth in the
DIP Documents and the Approved Budget, (iii) provide adequate
protection to the Prepetition Lenders, (iv) pay fees and expenses
related to the DIP Documents and these Chapter 11 Cases and (v) for
such other purposes as set forth in, or otherwise permitted by, the
DIP Documents.
Certain of the Debtors are Borrowers and others are guarantors
under a Revolving Credit, Term Loan and Security Agreement, dated
as of June 27, 2017, with The Boeing Company, as successor in
interest to PNC Bank, National Association, as lender and as agent
and certain lender parties thereto. The Debtors granted to the
Prepetition Agent, for the benefit of the Prepetition Lenders,
liens upon and security interests in all of the Debtors' property
and assets as set forth in the Prepetition Credit Agreement. As of
the Petition Date, the current outstanding principal balance of
the Prepetition Obligations is not less than $43,166,460.
The Debtors are authorized to incur DIP Obligations immediately
during the period prior to entry of the Final Order in an aggregate
principal amount not to exceed $22,000,000, with the maximum
principal amount that may be borrowed following entry of the Final
Order not to exceed $60,200,000. Available financing and advances
under the DIP Agreement will, on an interim basis, be made to fund,
in accordance with the DIP Documents and the Approved Budget,
working capital and general corporate requirements of the Debtors,
adequate protection to the Prepetition Lenders,
bankruptcy-related costs and expenses, and any other amounts
required or allowed to be paid in accordance with the Interim
Order, but only as and to the extent authorized by the Approved
Budget and the DIP Documents.
The Debtors are authorized to use Cash Collateral subject to and in
accordance with the terms, conditions and limitations set forth in
the Interim Order, the Approved Budget and the DIP Documents,
without further approval by the Court.
The Debtors have delivered to Boeing as the DIP Agent a detailed
budget that sets forth projected cash receipts and cash
disbursements on a weekly basis for the time period from and
including the Petition Date through August 13, 2021 that has been
approved by the DIP Lenders holding more than 50% of the DIP Loan
commitments.
The Prepetition Lenders are granted these adequate protection:
(a) Adequate Protection Liens. To secure the Adequate
Protection Superpriority Claim, the Prepetition Agent, for itself
and for the benefit of the other Prepetition Lenders, is granted
valid, perfected, postpetition security interests and liens in and
on all of the DIP Collateral, with a priority subject and
subordinate only to (i) the DIP Liens, (ii) the Senior Third-Party
Liens and (iii) prior payment of the Carve-Out.
(b) Adequate Protection Superpriority Claim. As further
adequate protection, the Prepetition Agent, for itself and for the
benefit of the other Prepetition Lenders, is granted a
superpriority claim to the extent of any Diminution, which claim
will have the priority afforded to it under section 507(b) of the
Bankruptcy Code, provided however, such Adequate Protection
Superpriority Claim will (i) be subordinate and subject only to the
DIP Superpriority Claim and prior payment of the CarveOut, and (ii)
will be entitled to all protections and benefits of section 507(b)
of the Bankruptcy Code.
(c) Limited Roll-Up / Adequate Protection Payments. As further
adequate protection, subject to paragraph 19, the Debtors' receipts
will be applied in satisfaction of Prepetition Obligations then
outstanding as set forth in the DIP Agreement.
(d) Prepetition Lenders' Fees and Expenses. Subject to
paragraph 19, the Debtors will pay the reasonable fees, charges and
expenses of the Prepetition Lenders who are also DIP Lenders in
connection with these Chapter 11 Cases and any Successor Case(s),
including, without limitation, in connection with (i) the
preparation, negotiation, execution and delivery of the DIP
Documents, the Interim Order and any Final Order, and the funding
of all DIP Loans under the DIP Facility, (ii) the administration of
the DIP Facility and any amendment or waiver of any provision of
the DIP Documents, the Interim Order and any Final Order, (iii) the
administration of these Chapter 11
Cases and any Successor Case(s), and (iv) the enforcement or
protection of the DIP Secured Parties' or the Prepetition Lenders'
rights and remedies under DIP Documents, the Prepetition Credit
Agreement, the Interim Order and any Final Order.
The DIP Liens, the DIP Superpriority Claim, the Adequate Protection
Liens, the Adequate Protection Superpriority Claim and the
Prepetition Liens will be subject and subordinate to the prior
payment of: (i) all fees required to be paid to (A) the clerk of
the Bankruptcy Court and (B) the Office of the United States
Trustee under 28 U.S.C. section 1930(a), plus interest required to
be paid on any past due amount at the statutory rate; (ii) all
reasonable fees and expenses, up to $50,000, incurred by a trustee
under section 726(b) of the Bankruptcy Code; (iii) to the extent
allowed at any time or by the Creditors' Committee pursuant to
sections 328 or 1103 of the Bankruptcy Code, that are incurred or
earned at any time before or on the first Business Day following
delivery by the DIP Agent of a Carve-Out Trigger Notice, whether
allowed prior to or after delivery of a Carve-Out Trigger Notice,
in each case, to the extent set forth in the Approved Budget; and
(iv) Allowed Professional Fees of Professional Persons other than
Investment Bankers in an aggregate amount not to exceed $250,000,
plus Allowed Professional Fees of Investment Bankers, in each case
incurred after the first Business Day following delivery by the DIP
Agent of the Carve-Out Trigger Notice, to the extent allowed at any
time.
A final hearing on the matter is scheduled for May 6, 2021 at 10
a.m.
A copy of the order is available for free at https://bit.ly/3dIUy0v
from PacerMonitor.com.
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. TECT produces assemblies and parts used in flight
controls, fuselage/interior structures, doors, wings, landing gear,
and cockpits.
TECT operates manufacturing facilities in Everett, Washington, and
Park City and Wellington, Kansas and their corporate headquarters
is located in Wichita, Kansas. TECT currently employs
approximately 400 individuals nationwide.
TECT and its affiliates are privately held companies owned by Glass
Holdings, LLC and related Glass-owned or Glass controlled entities.
TECT Aerospace Group Holdings, Inc., and six 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.
The Boeing Company, as DIP Agent, is represented by:
Alan D. Smith, Esq.
Perkins Coie LLP
E-mail: ADSmith@perkinscoie.com
- and -
Kenneth J. Enos, Esq.
Young Conaway Stargatt & Taylor, LLP
E-mail: kenos@ycst.com
THEOS FEDRO: Seeks to Tap Stuppi & Stuppi as Bankruptcy Counsel
---------------------------------------------------------------
Theos Fedro Holdings, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of California to employ the Law
Offices of Stuppi & Stuppi as its legal counsel.
The firm will render these services:
(a) prepare the Debtor's statement of financial affairs and
schedule of assets and liabilities;
(b) advise and assist the Debtor with respect to compliance
with the requirements of the Office of the United States Trustee;
(c) advise the Debtor regarding matters of bankruptcy law;
(d) represent the Debtor in any proceedings or hearings in the
bankruptcy court or any other courts;
(e) conduct examinations of witnesses, claimants or adverse
parties and prepare reports, accounts, and pleadings related to the
Debtor's Chapter 11 case;
(f) advise the Debtor concerning the requirements of the
Bankruptcy Code and applicable rules;
(g) assist the Debtor in the formulation, negotiation,
confirmation and implementation of a Chapter 11 plan of
reorganization and any sale or auction of its assets; and
(h) perform such other services as the Debtor may require in
connection with the Chapter 11 case.
Sarah Stuppi, Esq., the firm's attorney responsible for this case,
will be billed at her hourly rate of $425.
The firm received a retainer of $15,000 prior to the petition
date.
As disclosed in court filings, the Law Offices of Stuppi & Stuppi
is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Sarah M. Stuppi, Esq.
Law Offices of Stuppi & Stuppi
1630 North Main Street, Suite 332
Walnut Creek, CA 94596
Telephone: (415) 786-4365
Facsimile: (925) 287-8113
Email: Sarah@stuppilaw.com
About Theos Fedro Holdings
Theos Fedro Holdings, LLC, a San Francisco, Calif.-based company
that provides support services to the transportation industry,
filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Calif. Case No. 21-30202) on March 16,
2021. Philip Achilles, managing member, signed the petition. In
its petition, the Debtor disclosed $1 million to $10 million in
both assets and liabilities. Judge Dennis Montali oversees the
case. The Law Offices of Stuppi & Stuppi serves as the Debtor's
legal counsel.
UNITED AIRLINES: Begins $9-Bil. Debt Sale to Refinance Obligations
------------------------------------------------------------------
Jack Pitcher of Bloomberg News reports that United Airlines
Holdings Inc. is borrowing $9 billion to bolster liquidity and
refinance outstanding obligations, including a loan the airline
took from the U.S. government to help it through the pandemic.
The new financing includes $5.5 billion of secured bonds, split
evenly between five- and eight-year maturities, and a $3.5 billion
term loan due 2028. Both will help repay debt from 2017 as well as
the principal outstanding under its Cares Act loan, according to a
filing Monday, April 12, 2021. The carrier is also entering a new
revolving credit facility of $1.75 billion due 2025.
About United Airlines
Headquartered in the Willis Tower in Chicago, United Airlines
Holdings, Inc. (NASDAQ:UAL) owns and operates United Airlines,
Inc.
Before the Coronavirus pandemic, United Airlines and subsidiary
United Express -- http://www.united.com/-- operated 4,900 flights
a day to 362 airports across six continents. In 2019, United and
United Express operated more than 1.7 million flights carrying more
than 162 million customers. United has the world's most
comprehensive route network, including U.S. mainland hubs in
Chicago, Denver, Houston, Los Angeles, New York/Newark, San
Francisco and Washington, D.C. United operated 791 mainline
aircraft and the airline's United Express partners operated 581
regional aircraft. United is a founding member of Star Alliance.
The air travel industry is suffering enormous financial losses as
the coronavirus pandemic has reduced travel.
US CONSTRUCTION: May Use Cash Collateral Thru April 21
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Galveston Division, has authorized US Construction Services, LLC to
use cash collateral on an interim basis through April 21, 2021, in
accordance with the Budget, with a 5% variance.
For any anticipated expense which may exceed the budgeted amounts,
the Debtor must obtain authorization from Veritex Community Bank
before incurring the expense.
As adequate protection of the the interests of Veritex against the
diminution in value of its interests in the Cash Collateral, the
Lender is granted a continuing valid, binding, enforceable, and
automatically perfected postpetition security interest in, and
replacement liens on the Debtor's assets, together with the
proceeds thereof.
The Lender's adequate protection liens on the collateral will have
the same validity and priority as the Lender's lien on the Debtor's
property as existed on the Petition Date.
The Debtor is also directed to make an adequate protection payment
in the amount of $1,5000 no later than 2 p.m. on each of April 14
and April 20.
Whitney Jones, the Debtor's principal, will individually replenish
the Debtor-in-Possession bank account with $948.46, which
represents funds expended by the Debtor-in-Possession without
authority of either the Court or Veritex and which represent the
payment of a pre-petition debt.
A further hearing on the matter is scheduled for April 22 at 9:30
a.m.
A copy of the order is available for free at https://bit.ly/3t0hWg5
from PacerMonitor.com.
About US Construction Services, LLC
US Construction Services, LLC is a privately held company in the
residential building construction industry. It sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No.
21-80029) on February 19, 2021. The petition was signed by Whitney
Jones, the managing member. As of petition date, US Construction
Services declared total assets of $2,400,000 and total liabilities
of $1,262,826.
Judge Jeffrey P. Norman oversees the case.
The Debtor is represented by Gabe Perez, Esq., at Zendeh Del &
Associates, PLLC.
Vertex Community Bank, as creditor, is represented by:
Shelley Bush Marmon, Esq.
Carlton D. Wilde, Jr.
Crady Jewett McCulley & Houren LLP
2727 Allen Parkway, Suite 1700
Houston, TX 77019-2125
Tel: (713) 739-7007
Fax: (713) 739-8403
Email: smarmon@cjmhlaw.com
Email: cwilde@cjmhlaw.com
VAMCO SHEET: Seeks Court Approval to Hire Litigation Counsel
------------------------------------------------------------
Vamco Sheet Metals, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to employ Terrence
O'Connor, PC and Edmond R. Shinn, Esq. LTD. as special litigation
counsel.
The Debtor needs the assistance of a litigation counsel to
represent it in the Supreme Court of the State of New York with
respect to the appeal proceedings.
The firms received a retainer of $250,000 prior to the petition
date. The current hourly rates of the firms' counsel and staff are
as follows:
Attorney $300
Paralegal $125
Terrence O'Connor and Edmond R. Shinn entered into a hybrid fee
arrangement pursuant to which the firms agreed that in lieu of the
Debtor paying the firms their current rates, the firms will work at
a reduced hourly rate and cap their hourly billing once the
retainer has been exhausted.
As disclosed in court filings, Terrence O'Connor and Edmond R.
Shinn are "disinterested persons" within the meaning of Section
101(14) of the Bankruptcy Code.
The firms can be reached through:
Edmond R. Shinn, Esq.
Edmond R. Shinn, Esq. LTD.
353 West Lancaster Avenue, Ste. 300
Fort Washington, PA 19087
Telephone: (610) 308-6544
Facsimile: (888) 237-8686
- and –
Terrence O'Connor, Esq.
Terrence O'Connor, PC
1470 Bruckner Blvd.
The Bronx, NY 10473
Telephone: (718) 328-1610
Facsimile: (718) 589-1039
Email: terrence@oconnorpc.org
About Vamco Sheet Metals
Vamco Sheet Metals, Inc. filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
21-40385) on Feb. 18, 2021. Joyce Vettorino, president, signed the
petition. At the time of the filing, the Debtor disclosed
$1,099,467 in total assets and $3,103,368 in total liabilities.
Judge Jil Mazer-Marino oversees the case.
The Debtor tapped the Law Offices of Alla Kachan, PC as legal
counsel and Terrence O'Connor, PC and Edmond R. Shinn, Esq. LTD. as
special counsel.
VERMILION ENERGY: S&P Affirms 'B' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
Vermilion Energy Inc. and its 'B+' issue-level rating on the
company's senior unsecured debt. S&P's '2' recovery rating (70%-90%
recovery; 80% rounded estimate) is unchanged.
S&P said, "The stable outlook reflects our expectation that
Vermilion will adhere to conservative financial policies and
maintain an adjusted funds from operations (FFO)-to-debt ratio
averaging about 30% over our forecast period.
"Based on our revised pricing assumptions, we estimate Vermilion's
credit measures will strengthen from 2020 levels and support the
rating. We recently revised our oil and AECO price assumptions (see
"S&P Global Ratings Revises Oil And AECO Natural Gas Price
Assumptions And Introduces Dutch Title Transfer Facility
Assumption," published March 8, 2021, on RatingsDirect). The oil
price increase is largely driven by significant OPEC and Russian
supply cuts and global stimulus policies that have improved demand
and the economic outlook and led the recent rebound in prices. At
the same time, we believe European natural gas prices (Title
Transfer Facility [TTF]; contributes about 22% to Vermilion's
estimated 2021 cash flows) will remain higher than 2020 levels,
supported by the rebound in European gas demand, as well as the
planned retirement of coal and nuclear power generation capacity.
"Based on these pricing updates, we expect the company to generate
an adjusted FFO-to-debt ratio of about 30% in 2021, up from 20% in
2020. The improvement is also led by our expectation for meaningful
free cash flow generation and debt repayment, partially offset by
lower production.
"We believe downside risk is limited to an extent, given the hedges
in place; Vermilion has hedged more than 50% of its natural gas
exposure for 2021 and more than 30% in 2022. However, it has modest
hedges for oil and with liquids accounting for more than 50% of
production, our financial risk assessment incorporates potential
volatility in credit measures. We estimate, all else being equal, a
US$1 per million Btu decline in TTF and US$10 per barrel decline in
Brent oil prices would result in adjusted EBITDA declining by 15%
and the FFO-to-debt ratio declining to close to 20%.
"We believe debt reduction remains a priority for the new
management team, given the high drawn amount under the credit
facility. We expect debt reduction will be the key focus under the
new leadership team formed in May 2020. This was demonstrated
during 2020 when the team reduced capital spending by about 20% and
eliminated dividends. To put into context, the company paid out
more than C$300 million in dividends during 2018 and 2019. We
expect it to remain disciplined in its capital spending, as
indicated by its 2021 capital budget of C$300 million, which is
meaningfully below that in previous periods. Spending is expected
to be more level loaded throughout the year than in recent years
when it was front-loaded (65% of capital was spent in first-quarter
2020). Although this will affect fiscal 2021 production (10%
reduction from 2020 levels) and cash flows, we estimate Vermilion
will generate meaningful free cash flows of more than C$250 million
during 2021, which we assume it will use for repaying portions
outstanding under the credit facility. As of year-end 2020, the
company had a significant amount drawn under the credit facility,
with 70% drawn under the C$2.1 billion credit facility due May
2024. Although we estimate that Vermilion will have more than C$700
million available under the facility at the end of 2021, we cannot
rule out the possibility that the facility size could be reduced,
given the cautious sentiment by lenders and/or risk of any of the
banks exiting their commitment in the syndicate, which currently
has more than 15 banks.
"Diversification strategy supports our current business risk
assessment. Our business risk assessment reflects the company's
average daily production of about 85,000 barrels of oil equivalent
(boe) per day in 2021 (54% liquids), and its broad geographic and
product diversification. During 2021, the company's production is
expected to be distributed across the following different products:
West Texas Intermediate (WTI) priced oil (38%), North American gas
(29%), European gas (17%), and Brent priced oil (16%); and across
different regions: North America (67%) and International, which
includes Europe and Australia (33%). In our view, the
diversification provides resilience to maintain cash flow
generation and credit metrics within our current expectation. That
said, upside to our business risk assessment is limited because we
believe the company's production base and reserves base lag
compared with those of higher-rated peers.
"Our assessment also incorporates the company's profitability
relative to that of peers. We expect Vermilion will continue
generating positive netbacks in each of its operating regions,
given its competitive production costs in each of its upstream
segments. However, given meaningful exposure to natural gas, the
profitability profile for gas-focused producers remains weaker than
for producers with a crude oil-focused product mix. Based on our
five-year profitability assessment, which we calculated on a unit
earnings before interest per thousand cubic feet basis, we estimate
Vermilion to rank in the bottom quartile of the exploration and
production (E&P) peer group.
"The stable outlook reflects our expectation that Vermilion will
generate improved credit measures over our forecast period, with an
adjusted FFO-to-debt ratio averaging close to 30% over the next two
years. The outlook also reflects our expectation for moderate
financial policies that demonstrate the use of free cash flows for
debt reduction.
"Based on the company's broad product and geographic
diversification, we believe downside risk is limited. Nevertheless,
we would lower the rating over the next 12 months if Vermilion's
two-year weighted-average FFO-to-debt ratio approached 12%. This
could occur if there was a meaningful decline in commodity prices
and the company failed to correspondingly lower capital spending.
"We could raise the rating over the next 12 months if the company's
liquidity improved while Vermilion maintains an adjusted
FFO-to-debt ratio above 30% over the next two years. This could
occur if commodity prices continue to strengthen and management
demonstrates absolute debt reduction from free cash flow
generation."
VIRGINIA-HIGHLAND: Unsecureds Owed $200K to Recover 100% in Plan
----------------------------------------------------------------
Virginia-Highland Restaurant, LLC, and affiliated debtor Restaurant
104 LLC filed with the U.S. Bankruptcy Court for the Northern
District of Georgia a Chapter 11 Plan of Reorganization and a
corresponding Disclosure Statement.
The Plan will treat claims and interests as follows:
* Class 1 - Allowed Priority Claims (Unimpaired). Each holder of
an Allowed Priority Tax Claim will be paid in full, in cash,
without interest, on or after the later of (i) the Effective Date,
(ii) five business days after the date of the final order allowing
the Claim, or (iii) as the holder may otherwise agree.
* Class 2 - Allowed Claims of Gordon Food (Impaired) -- Estimated
Amount: $97,093. On the Effective Date, Gordon Food shall receive
a cash distribution for $17,451. The remaining $79,642, plus
interest at 4% per annum, and attorney's fees of up to $5,000,
shall be paid by weekly installment payments of $1,000/week until
the unpaid balance reaches $11,170. The balance of $11,170 shall
be paid off by applying rebates, if the Reorganized Debtor is not
in default at the time. If the Reorganized Debtor is in default at
such time, Gordon Food is entitled to a return of $12,000 in
rebates previously paid.
* Class 3 - Allowed Tax Claims Other than Priority Tax Claims
(Impaired) -- Estimated Amount: $615,730. Each holder of an
Allowed Tax Claim, will be paid in cash, in full, on the Effective
Date until no later than five years from the Petition Date, through
regular quarterly installments.
* Class 4 - Other Allowed Secured Claims (Unimpaired). Each
Other Allowed Secured Claim in Class 4 shall be satisfied (i) by
the transfer, assignment and conveyance of the collateral securing
such Class 4 Claim to the Holder of such Other Allowed Secured
Claim in full and final satisfaction of such Other Allowed Secured
Claim, or (b) by payment of cash in an amount equal to the value of
such holder's interest in the collateral securing the Other Allowed
Secured Claim.
* Class 5 - Allowed Unsecured Claims (Impaired) -- Estimated
Amount: $200,000 with 100% estimated recovery. Each Holder of an
Allowed Unsecured Claim shall receive a distribution in an amount
equal to the principal amount of their Allowed Unsecured Claim on
or before 90 days after the Effective Date.
* Class 6 - Allowed Equity Interests in VH Restaurant
(Unimpaired). Holders of Class 6 Equity Interests are not entitled
to any distribution under the Plan. As of the Effective Date, all
Equity Interests in VH Restaurant shall be terminated and
cancelled.
* Class 7 - Allowed Equity Interests In Restaurant 104. As of
the Effective Date, Holders of Equity Interests in Restaurant 104
shall retain their Equity Interests in the Reorganized Debtor after
Confirmation of the Plan in the same percentages held prior to the
Effective Date.
The Plan provides for the substantive consolidation of the Debtors'
assets and liabilities into a single estate, pursuant to Section
105(a) of the Bankruptcy Code.
The Plan proposes that the lease between VH Restaurant and landlord
SRPF A/Marshall's Plaza, LLC SRPF, as successor-in-interest to
Marshalls Plaza Shopping Center, shall be deemed assumed and
assigned to the Reorganized Debtor as of the Effective Date. The
Debtors propose to pay the Landlord the $167,830, plus interest, if
any, held in escrow to pay off in full and cure the defaults under
the lease.
Following confirmation of the Plan, Jeffrey R. Landau will serve as
the manager of the Reorganized Debtor. Mr. Landau will not receive
compensation from the Reorganized Debtor during the first 12 months
following the Effective Date. After the 12-month period, Mr.
Landau's compensation may be adjusted in accordance with market
rates.
The Debtor's counsel:
Ashley Reynolds Ray, Esq.
Scroggins & Williamson, P.C.
4401 Northside Parkway, Suite 450
Atlanta, GA 30327
Telephone: (404) 893-3880
A copy of the Disclosure Statement is available free of charge at
tinyurl.com/4x8xh2ve from PacerMonitor.com.
About Virginia-Highland Restaurant
Virginia-Highland Restaurant, LLC operates the Hudson Grille
restaurant located in Sandy Springs, Ga.
Virginia-Highland Restaurant filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 20-70718) on Oct. 13, 2020. Jeffrey R. Landau, managing
member, signed the petition. At the time of the filing, the Debtor
estimated $100,000 to $500,000 in assets and $1 million to $10
million in liabilities.
Judge Barbara Ellis-Monro oversees the case. Scroggins &
Williamson, P.C. serves as the Debtor's legal counsel.
WASH MULTIFAMILY: Moody's Rates New First Lien Secured Notes 'B3'
-----------------------------------------------------------------
Moody's Investors Service affirmed WASH MULTIFAMILY ACQUISITION
INC's Corporate Family Rating at B3, Probability of Default Rating
at B3-PD and assigned a B3 rating to the company's proposed first
lien senior secured notes. The outlook is stable.
Proceeds will be used to refinance the company's entire capital
structure including $715 million of first lien term loans and $120
million of second lien term debt. The existing ratings on these
debt instruments will be withdrawn at closing. Post this
transaction, WASH's nearest maturity will be 2026.
The B3 rating on the new senior secured notes is the same as the
CFR reflecting the fact that the revolving credit facility and
secured notes will be the preponderance of debt in the capital
structure. By refinancing the capital structure with all first lien
debt, loss absorption provided by the existing second lien term
debt will be eliminated.
The stable outlook reflects Moody's expectation that WASH will
steadily grow its revenue organically and through bolt-on
acquisitions, generate robust EBITDA margins, and focus on
operating efficiencies.
Assignments:
Issuer: WASH MULTIFAMILY ACQUISITION INC
Senior Secured 1st Lien Regular Bond/Debenture, Assigned B3
(LGD4)
Affirmations:
Issuer: WASH MULTIFAMILY ACQUISITION INC
Probability of Default Rating, Affirmed B3-PD
Corporate Family Rating, Affirmed B3
Outlook Actions:
Issuer: WASH MULTIFAMILY ACQUISITION INC
Outlook, Remains Stable
RATINGS RATIONALE
WASH's B3 CFR reflects the company's solid market position as one
of the top two providers of outsourced laundry equipment services
for multifamily housing properties and colleges in the US and
Canada. The company generates a steady, predictable revenue stream
and strong margins stemming from the recession resistant qualities
of this business and the ability to raise prices.
The B3 CFR is constrained by WASH's high leverage, aggressive
financial policy, and acquisitiveness. Pro forma this transaction,
WASH's debt to EBITDA at year end December 2021 is forecast to be
6.2x (inclusive of Moody's adjustments). The company remains
focused on gaining operating efficiencies and deleveraging.
Wash's adequate liquidity profile includes a $75 million credit
facility expiring in 2026 and minimal free cash flow.
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 5.5x, EBITA to interest greater than 1.75x, the
company shows an improvement in free cash flow, and maintains a
good liquidity profile.
The ratings could be downgraded if adjusted debt to EBITDA is above
7.0x, EBITA to interest is below 1.0x, and there is a deterioration
in liquidity.
Headquartered in Torrance, California, WASH MULTIFAMILY ACQUISITION
INC is a leading outsourced laundry service provider to multifamily
apartments and universities in the US and Canada. The company is
privately owned by EQT, a global investment organization with more
than EUR84 billion in raised capital and around EUR52 billion in
assets under management.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
WASHINGTON PRIME: Forbearance Extended to April 28, 2021
--------------------------------------------------------
Washington Prime Group said in a regulatory filing its forbearance
was extended to April 28, 2021, as it continues to negotiate with
creditors and lenders over a restructuring transaction.
As previously reported, on March 16, 2021, Washington Prime Group,
L.P., the operating partnership of Washington Prime Group Inc. (the
"Company"), entered into a forbearance agreement with certain
beneficial owners of its senior notes due 2024 (the "Forbearing
Noteholders") and forbearance agreements with certain lenders (the
"Forbearing Lenders") under the agreements governing its corporate
credit facilities (each, as amended, a "Forbearance Agreement").
On March 29, 2021, the Forbearing Noteholders and Forbearing
Lenders, respectively, agreed to extend the forbearance period
under each applicable Forbearance Agreement to no later than April
14, 2021.
On April 9, 2021, the Forbearing Noteholders and Forbearing
Lenders, respectively, agreed to extend the forbearance period
under the applicable Forbearance Agreement to the earlier of April
28, 2021, at 11:59 p.m., Eastern time, and the occurrence of any of
the specified early termination events described in the applicable
Forbearance Agreement.
The Company is continuing to engage in negotiations and discussions
with the Forbearing Noteholders and Forbearing Lenders to
restructure its capital structure.
About Washington Prime Group
Headquartered in Columbus Ohio, Washington Prime Group Inc. --
http://www.washingtonprime.com/-- is a retail REIT and a
recognized company in the ownership, management, acquisition and
development of retail properties. The Company combines a national
real estate portfolio with its expertise across the entire shopping
center sector to increase cash flow through rigorous management of
assets and provide new opportunities to retailers looking for
growth throughout the U.S. Washington Prime Group is a registered
trademark of the Company.
* * *
As reported by the TCR on Feb. 22, 2021, Fitch Ratings downgraded
the Long-Term Issuer Default Ratings (IDRs) of Washington Prime
Group, Inc. and Washington Prime Group, L.P. (collectively WPG) to
'C' from 'CC'. Fitch expects WPG's operating performance to
deteriorate further in the near term.
As reported by the TCR on Nov. 17, 2020, S&P Global Ratings lowered
its issuer credit rating on Washington Prime Group Inc. (WPG) to
'CC' from 'CCC'. The downgrade reflects the strong likelihood of a
technical default in the near term.
Moody's Investors Service also downgraded the senior unsecured debt
and corporate family ratings of Washington Prime Group, L.P. to
Caa3 from Caa1. "WPG's Caa3 corporate family rating reflects its
large, geographically diversified portfolio of retail assets, which
includes a mix of enclosed malls (71% of Comp NOI) and open-air
centers (29%) across the US," Moody's said, according to a TCR
report dated June 1, 2020.
WC CUSTER CREEK: Seeks Authority to Use Cash Collateral
-------------------------------------------------------
WC Custer Creek Center Property, LLC asks the U.S. Bankruptcy Court
for the Western District of Texas for authority to use cash
collateral, and to grant adequate protection to Spring Custer, LLC,
as successor in interest to Amplify Credit Union.
The Debtor owes Spring Custer $6,270,912.27, which amount is
secured by an interest in the Debtor's real property. The real
property, which is improved by an income-generating shopping
center, is believed to be worth no less than $11,000,000 and is
encumbered by a judgment lien in favor of Integrity Porter &
Services, LLC in the alleged amount of $12,265. The Debtor asserts
there is a substantial equity cushion to Spring Custer.
The Debtor said it needs to use cash generated from the operations
of the real property to pay necessary operating expenses based on a
proposed budget for the period covering the Petition Date through
April 30, 2021. The budget provides for $92,206 in gross operating
income and $15,002 in total operating expenses for the month of
April 2021. A copy of the budget is accessible for free at
tinyurl.com/54sz3pdd from PacerMonitor.com.
As adequate protection, the Debtor offers to grant Spring Custer a
replacement lien of the same extent, validity and priority as its
prepetition liens in the collateral, to the extent that the
pre-petition cash collateral used.
A copy of the motion is available for free at tinyurl.com/3js5sxc8
from PacerMonitor.com.
About WC Custer Creek Center Property
Austin, Texas-based WC Custer Creek Center Property, LLC filed a
Chapter 11 petition (Bankr. W.D. Texas Case No. 20-11202) on Nov.
2, 2020. Natin Paul, 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.
Counsel for lender Spring Custer, LLC:
Jason G. Cohen, Esq.
William A. (Trey) Wood III, Esq.
Christopher L. Dodson, Esq.
BRACEWELL LLP
711 Louisiana, Suite 2300
Houston, TX 77002
Telephone: (713) 223-2300
Facsimile: (713) 221-1212
E-mail: Jason.Cohen@bracewell.com
Trey.Wood@bracewell.com
Chris.Dodson@bracewell.com
WEINSTEIN CO: Fights NY Extradition, Confirms LA Indictment
-----------------------------------------------------------
Law360 reports that Harvey Weinstein has been indicted on sexual
assault charges in Los Angeles, his attorney confirmed Monday,
April 12, 2021, during a court hearing in New York state court
where the disgraced movie mogul fought extradition to California on
"humanitarian" grounds.
A lawyer for Weinstein, who is currently imprisoned near Buffalo on
a 23-year sentence after his rape conviction in Manhattan, said the
sealed indictment is nearly identical to an 11-count felony
complaint filed by Los Angeles prosecutors in October, grounded in
rape and sexual assault accusations by five women.
Attorney Norman Effman said Weinstein's transfer should be delayed
because the Los Angeles County district attorney bungled the
paperwork and because the former producer has pending medical
appointments after losing four teeth in prison and going nearly
blind.
"He is almost technically blind at this point and is in need of
surgery and shots," said Effman, outlining why compassion should be
shown to the aging inmate. "He also has some major dental issues,"
having scheduled "procedures to save his teeth. And he's lost, I
think, four at this point."
After Effman detailed Weinstein's health concerns, which also
include cardiac problems, back issues and sleep apnea, he told the
court that prosecutors have rejected requests for a delayed
transfer on that basis. He then introduced a new line of attack,
saying the prosecution's transfer paperwork is flawed.
"I have nothing on the indictment level that shows that a judge
signed this request," said Effman, arguing that the interstate
request for temporary custody was deficient. The paperwork bears
only the complaint number and not the new indictment number, he
said.
A prosecutor for the Erie district attorney appeared annoyed and
caught off guard by the latest gambit to derail Weinstein's
extradition, which Los Angeles prosecutors have been pursuing since
the day he was sentenced in New York, just before the COVID-19
shutdown.
"This is a little bit of a surprise," said Erie County Assistant
District Attorney Colleen Curtin Gable, with her hand on her hip.
"Obviously, if you're taking issue that there appears to be a
document missing that was filed in the prior two appearances, that
is your right to challenge and I would ask for a quick turnaround
from this court."
The judge asked for briefs ahead of an April 30 hearing on
Weinstein's petition.
In a statement to reporters in Buffalo, District Attorney John
Flynn said he anticipated that "LA County is just going to give me
the new paperwork that is correct within the next 15 days, so it's
probably going to be a moot point."
The Los Angeles district attorney's office declined to comment.
Effman also noted that he was drafting a request for Gov. Andrew
Cuomo to block the extradition.
In February 2020, Weinstein was convicted by a Manhattan jury of
criminal sexual act and third-degree rape for the alleged sexual
assault of former "Project Runway" assistant Miriam Haley in 2006
and alleged rape of aspiring actress Jessica Mann in 2013.
A New York judge sentenced him to 23 years for his crimes. Last
week, Weinstein appealed that conviction, arguing it was tainted by
irrelevant sexual misconduct claims and a biased juror.
Los Angeles prosecutors first revealed charges against the producer
at the opening of the New York trial and tacked on new charges last
fall, adding three counts of rape and three counts of forcible oral
sex in addition to the five original charges of rape and sexual
assault. The existence of a sealed indictment was first reported by
Fox News but confirmed for the first time in court Monday.
Weinstein now awaits trial in California, but argues that the Los
Angeles district attorney should allow him to make remote
appearances up until the eve of trial.
Weinstein appeared in good spirits at the start of the hearing on
Monday, thanking his attorney Mark Werksman for providing an
"awesome" statement for a Fox News article as he buoyantly noted
commenters were "three to one in favor of us."
When Effman warned Weinstein his comments were being broadcast,
however, the former producer fell silent.
Erie County is represented in the extradition matter by Colleen
Curtin Gable and Matthew Powers of the Erie County District
Attorney's Office.
Weinstein is represented in the extradition matter by Norman
Effman. He is represented in the Los Angeles case by Mark Werksman
of Werksman Jackson & Quinn LLP, and Blair Berk of Tarlow & Berk
PC. He has been represented in the New York case by Donna Rotunno
and Damon Cheronis, and Arthur L. Aidala, Diana Fabi Samson, John
S. Esposito and Barry Kamins of Aidala Bertuna & Kamins PC.
Los Angeles County is represented in its case by Paul Thompson of
the Los Angeles County District Attorney's Office.
The Los Angeles case is The People of the State of California v.
Weinstein, case number BA483663, in the Superior Court for the
State of California, County of Los Angeles.
The New York case is New York v. Weinstein, case number 02335/2018,
in the Supreme Court of the State of New York, County of New York.
About The Weinstein Company
The Weinstein Company (TWC) -- http://www.WeinsteinCo.com/-- is a
multimedia production and distribution company launched in 2005 in
New York by Bob and Harvey Weinstein, the brothers who founded
Miramax Films in 1979. TWC also encompasses Dimension Films, the
genre label founded in 1993 by Bob Weinstein. During Harvey and
Bob's tenure at Miramax and TWC, they have received 341 Oscar
nominations and won 81 Academy Awards.
TWC dismissed Harvey Weinstein in October 2017, after dozens of
women came forward to accuse him of sexual harassment, assault or
rape.
The Weinstein Company Holdings LLC and 54 affiliates sought Chapter
11 protection (Bankr. D. Del. Lead Case No. 18-10601) on March 19,
2018 after reaching a deal to sell all assets to Lantern Asset
Management for $310 million.
The Weinstein Company Holdings estimated $500 million to $1 billion
in assets and $500 million to $1 billion in liabilities.
The Hon. Mary F. Walrath is the case judge.
Cravath, Swaine & Moore LLP is the Debtors' bankruptcy counsel,
with the engagement led by Paul H. Zumbro, George E. Zobitz, and
Karin A. DeMasi, in New York.
Richards, Layton & Finger, P.A., is the local counsel, with the
engagement headed by Mark D. Collins, Paul N. Heath, Zachary I.
Shapiro, Brett M. Haywood, and David T. Queroli, in Wilmington,
Delaware.
The Debtors also tapped FTI Consulting, Inc., as restructuring
advisor; Moelis & Company LLC as investment banker; and Epiq
Bankruptcy Solutions, LLC as claims and noticing agent.
The official committee of unsecured creditors retained Pachulski
Stang Ziehl & Jones, LLP as its legal counsel, and Berkeley
Research Group, LLC, as its financial advisor.
[] Subchapter V Debt-Eligibility Limit Extended Beyond One Year
---------------------------------------------------------------
Andrew Page and Scott Gautier of Faegre Drinker Biddle & Reath LLP
wrote an article on JDSupra titled "Global Pandemic: Subchapter V
Debt-Eligibility Limits Extended Beyond One Year."
The recently enacted COVID-19 Bankruptcy Relief Extension Act
extends the $7.5 million debt-eligibility limit for small
businesses seeking to utilize subchapter V of chapter 11 of title
11 of the United States Code (the “Bankruptcy Code”) for an
additional year, through March 27, 2022.
The Extension Act will allow more businesses to take advantage of
the protections afforded by Subchapter V, which may be critically
important to small businesses seeking to recover from the effects
of the global pandemic.
The SBRA and Subchapter V
In 2019, recognizing that the requirements of Chapter 11 often made
reorganizing a business through a formal bankruptcy proceeding an
ineffective tool for many small business debtors, Congress enacted
the Small Business Reorganization Act of 2019 (SBRA). The SBRA
added Subchapter V, which modifies the Chapter 11 proceedings, but
only for qualified small businesses. As originally drafted,
eligibility to proceed under Subchapter V was limited to those
small businesses with noncontingent liquidated debts of no more
than $2,725,625.
Congress intended for a Subchapter V proceeding to be less costly,
faster and more advantageous for small businesses than a typical
corporate Chapter 11 proceeding. Among other things, most
Subchapter V proceedings eliminate the statutory committee of
unsecured creditors and replace it with a more efficient Subchapter
V trustee. The trustee does not operate the debtor’s business,
but supervises the Chapter 11 process, makes recommendations to the
court and assists the debtor to confirm a plan. Subchapter V also
streamlines the plan confirmation process, requiring the debtor to
file a plan within 90 days and eliminating the need for the debtor
to prepare and gain approval of a lengthy disclosure statement.
Moreover, Subchapter V provides for small business owners to
receive a discharge and retain ownership of their business without
paying all unsecured claims in full, provided that the net income
from the business is used to pay creditor claims for a period of
three to five years.
The CARES Act: Increased Subchapter V
Debt-Eligibility Limits
The SBRA went into effect on February 19, 2020. One month later,
every state in the U.S. had declared a state of emergency in
response to the COVID-19 pandemic. As stay-at-home orders became
common and small businesses struggled to stay afloat with fewer
customers, Congress quickly bolstered Subchapter V with the
“Coronavirus Aid, Relief, and Economic Security Act” (the
“CARES Act”; P.L. 116-136), increasing the debt-eligibility
limit from $2,725,625 to $7,500,000. The CARES Act, however, was
not designed to last more than a year; and the Subchapter V $7.5
million debt-eligibility limit was set to sunset on March 27,
2021.
Most commentators agree that the increase of the Subchapter V
debt-eligibility limit made small business reorganization feasible
at the time when it was needed most. In the short span of a year,
proceedings under Subchapter V boasted higher confirmation rates,
speedier confirmations and more consensual plans than other
corporate Chapter 11 proceedings. Since February 19, 2020, more
than 1,700 Subchapter V cases have been filed, with a majority of
cases filed in the Fifth, Ninth and Eleventh Circuits. The relative
frequency of Subchapter V to standard Chapter 11 proceedings is on
the rise: between August and November of 2020, Subchapter V cases
increased by 20% and, over the past year, bankruptcy judges have
released more than 150 opinions analyzing the 15 new sections of
Subchapter V.
With many businesses still experiencing partial or full shutdowns
and the impact of the global pandemic on small businesses not yet
fully realized, the Extension Act will likely continue the trend of
small business reorganizing through Subchapter V proceedings.
*********
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
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then-ending.
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