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T R O U B L E D C O M P A N Y R E P O R T E R
Monday, June 7, 2021, Vol. 25, No. 157
Headlines
2501 DEL LAGO: Pinder Buying Fort Lauderdale Property for $4.6M
41-23 HAIGHT: Court Confirms First Amended Plan
5 STAR PROPERTY: Order Backing Winter Haven Property Sale Clarified
51 EAST 73RD: Trustee Proposes Auction Sale of New York Property
ADVANTAGE HOLDCO: Plan Exclusivity Period Extended Thru Sept. 10
AIRCASTLE LIMITED: Moody's Gives Ba2(hyb) on New Preferred Stock
AIRCASTLE LTD: S&P Rates New A Perpetual Preference Shares 'BB'
ALAMO DRAFTHOUSE: Wins Cash Collateral Access Thru Sept. 15
ALPHABET HOLDING: Moody's Hikes CFR to B2, Placed on Further Review
ARCHDIOCESE OF NEW ORLEANS: Sets Bid Procedures for Kenner Property
ARCHDIOCESE OF SANTA FE: Blea Loses Bid to Be Removed from List
ARCLINE FM HOLDINGS: S&P Assigns 'B' ICR, Outlook Stable
ARCLINE FM: Moody's Assigns 'B3' CFR, Outlook Stable
AVADIM HEALTH: Has Interim OK on DIP Loan, Cash Collateral Access
AVAYA HOLDINGS: S&P Raises ICR to 'B+', Outlook Stable
BEAR COMMUNICATIONS: Seeks to Hire Hinkle Law as Legal Counsel
BOY SCOUTS OF AMERICA: Selling Scouting University Property for $2M
BRAZOS DELAWARE II: Fitch Withdraws 'B' Issuer Default Rating
BRITT TRUCKING: $15K Cash Sale of 2015 Ford Van to Premiere Okayed
BV GLENDORA: Unsecured Creditors to Recover 10% in 24 Months
CARBONLITE HOLDINGS: Gets Court Okay to Sell Company in Pieces
CARBONYX INC: Creditors Agree with Sunshine's Liquidation Analysis
CARBONYX INC: Hasmukh Patel Opposes Hedge Funds' Plan
CARETRUST REIT: S&P Rates New Senior Unsecured Notes 'BB+'
CARLENE V. BEAUCHAMP: $275K Sale of Dumas Homestead Asset Approved
CASTEX ENERGY: Signs Deal With W&T to Offload Its Chapter 11 Costs
CBL & ASSOCIATES: Laredo Outlet Wins Cash Collateral Access
CELTIC CONSTRUCTION: Pioneer Bank Seeks to Prohibit Cash Access
CHESAPEAKE ENERGY: Court Affirms $11.5 Million Lease Deals
CHESAPEAKE ENERGY: Court Rules on Venue of Encino Litigation
CINEMARK USA: Moody's Rates Proposed $765MM Senior Notes 'Caa1'
CINEMARK USA: S&P Rates New $765MM Senior Unsecured Notes 'B'
CLOUDERA INC: S&P Places BB- (sf) ICR on CreditWatch Negative
CMC II: Sets Bid Procedures for Sale of Manager & Remaining Assets
CONDUENT INC: S&P Alters Outlook to Negative, Affirms 'B+' ICR
CONVERGEONE HOLDINGS: Moody's Alters Outlook on B3 CFR to Stable
CORE & MAIN: Moody's Gives (P)Ba3 Rating on New $1.5BB Term Loan
CORE & MAIN: S&P Places 'B' ICR on Watch Positive on Announced IPO
CORPORATE RESOURCE: 2nd Cir. Rejects Staff Management Appeal
COSMOLEDO LLC: Wins June 10 Solicitation Exclusivity
CRC BROADCASTING: Wins Cash Collateral Access Thru June 30
CRED INC: Former Executive Faces Bench Contempt Warrant
CYPRUS MINES: Court Extends Plan Exclusivity Until September 9
CYTOSORBENTS CORP: All Four Proposals Passed at Annual Meeting
DAVID K. CROWE: Wins Confirmation of Amended Exit Plan
DIMAS ACEVEDO, JR: Bid Procedures for Imperial Beach Property OK'd
DISCOVERY DAY: Auction of Bonita Springs Property Set for June 28
DITECH HOLDING: Court Won't Revive $9M Beekman Claim
DOLE PLC: S&P Assigns Preliminary 'BB' ICR, Outlook Stable
DONNELLEY FINANCIAL: S&P Rates Sec. Delayed Draw Term Loan A 'BB'
EAST END: June 30 Auction of Propane Buses and Other Equipment
EHT US1: $38.2M Sale of DTSLC and FPSJ Hotels to BPEHT Approved
EHT US1: $470-Mil. Sale of All Assets to Madison Phoenix Approved
EHT US1: Court Extends Plan Exclusivity Thru August 16
EHT US1: Sale of Sky's Hilton Atlanta Northeast for $38.2M Approved
EHT US1: Sale of Sky's Sheraton Denver to Solid Rock for $9.2M OK'd
ELECTRONIC DATA: Sets Bidding Procedures for Business Assets Sale
ELO TOUCH: Moody's Alters Outlook on 'B2' CFR to Stable
ENC HOLDING: Moody's Hikes CFR to B2, Outlook Stable
ENCORE CAPITAL: Fitch Assigns Final BB+ Rating on GBP250MM Notes
ENERGY TRANSFER: Moody's Rates New Perpetual Preferred Units 'Ba2'
ENERGY TRANSFER: S&P Rates Series H Perpetual Preferred Units 'BB'
EVERCOMMERCE INC: S&P Assigns Preliminary 'B+' ICR on Pending IPO
EVERCOMMERCE SOLUTIONS: Moody's Assigns First Time 'B1' CFR
EVERGREEN DEVELOPMENT: Fine-Tunes Plan, Unsecureds Unimpaired
EVOSITE LLC: $131K Sale of Assets to Evans Consoles Approved
FIGUEROA MOUNTAIN: SLO Taps Buying Personal Property for $25K
FIRST AMERICAN: Moody's Withdraws B2 CFR on Deluxe Sale Closing
FITNESS INT'L: Moody's Hikes CFR to Caa1 on Equity Raise
FLUSHING LANDMARK: Updates 41-60 Main Secured Claim Pay Details
FRESH ACQUISITIONS: July 20 Auction of Substantially All Assets
GABBIDON BUILDERS: Court Rejects Plan, Converts Case to Chapter 7
GALILEO SCHOOL: Moody's Gives Ba1 Rating on 2021A Education Bonds
GFL ENVIRONMENTAL: Moody's Rates New $600MM Unsecured Notes 'B3'
GIOVANNI & SONS: Unsecureds to Get Pro Rata of 1% of $793K
GOLF TAILOR: Seeks to Hire Holder Law as Legal Counsel
GORDON BROTHERS: Wins Cash Collateral Access Thru June 30
GORHAM PAPER: Asks Court to Extend Plan Exclusivity Thru August 31
GREYSTAR REAL ESTATE: S&P Ups ICR to 'BB-' on Strong Performance
GULF MEDICAL: Plan to Distribute $469K of Remaining Funds
HDG CONGRESS: Case Summary & 4 Unsecured Creditors
HDG STUART: Case Summary & 4 Unsecured Creditors
HEO INC: Plan Exclusivity Extended Thru October 18
HEO INC: Wins Cash Collateral Access Thru June 24
HERITAGE RAIL: Trustee Selling Assets to Coastal Rail for $120K
HERTZ CORP: Advances $56 Million Suit vs. Ex-Senior Managers
HOOD LANDSCAPING: Selling 269 Acres of Cook County Land for $677K
HORIZON GLOBAL: All Four Proposals Passed at Annual Meeting
HORSE BUTTE: Seeks to Hire Vanden Bos & Chapman as Legal Counsel
HORSE BUTTE: Taps Cascade Sothebys to Sell Oregon Property
INDIGO NATURAL: Moody's Puts B1 CFR Under Review for Upgrade
INDIGO NATURAL: S&P Placed 'B+' ICR on CreditWatch Positive
INDIVIOR FINANCE: Moody's Hikes CFR to B2, Outlook Stable
ION GEOPHYSICAL: S&P Raises ICR to 'CCC' After Debt Restructuring
K3D PROPERTY: Wins Cash Collateral Access Thru August 28
KC PANORAMA: Case Summary & 4 Unsecured Creditors
KEITH M. RUEGSEGGAR: $37K Sale of Westminster Asset to Queen OK'd
L'OCCITANE INC: Court Extends Plan Exclusivity Thru August 24
LECLAIRRYAN PLLC: Suit Over Joint Venture Stays in Bankr. Court
LIBERTY POWER MARYLAND: Voluntary Chapter 11 Case Summary
LIBERTY POWER: Voluntary Chapter 11 Case Summary
LIMETREE BAY: S&P Lowers Debt Rating to B, On CreditWatch Negative
LPT LLC: Voluntary Chapter 11 Case Summary
LTI HOLDINGS: S&P Rates New $210MM First-Lien Credit Facility 'B-'
LUCKY STAR-DEER: Updates 41-60 Main Secured Claim Pay Details
LUMEN TECHNOLOGIES: Moody's Rates New $1BB Unsecured Notes 'B2'
LUMEN TECHNOLOGIES: S&P Rates New $1BB Senior Unsecured Notes BB-
MARQUIS ENTERPRISES: $64K Sale of Buffalo Property to Nubad Okayed
MAUSER PACKAGING: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
MAX FINE FURNITURE: Gets Cash Collateral Access Thru June 30
MIDTOWN CAMPUS: Seeks to Extend Plan Exclusivity Thru June 29
MOBITV INC: Seeks Approval to Hire Chris Tennenbaum of FTI as CRO
MOUNTAIN PROVINCE DIAMONDS: S&P Affirms 'CCC-' ICR, Outlook Neg.
MOXIE'S CAFE: Unsecureds to Recover 100% of Allowed Claims
MTE HOLDINGS: Gray Surface Claim OK'd but Immediate Payment Nixed
MY FL MANAGEMENT: Unsecureds Owed $2K+ to Recover 100% Over 5 Years
NATIONAL MEDICAL: Seeks to Extend Plan Exclusivity Thru Dec. 9
NEW BETHEL: Unsecureds to Split $250 Monthly
NEW YORK CLASSIC: Court Rejects Hudson Trust's Bid to Toss Ch. 11
NORTHWEST BAY: June 9 Hearing on $2.45M Sale of 8 Bolton Lots
NORTHWEST BAY: Laurel Shores Buying 8 Bolton Lots for $2.45 Mil.
OFS INTERNATIONAL: Has Interim OK on DIP Loan, Cash Collateral Use
ORGANIC POWER: Taps Vidal, Nieves & Bauza as Special Counsel
OSMOSE UTILITIES: Moody's Assigns 'B3' CFR, Outlook Stable
OSMOSE UTILITIES: S&P Assigns 'B' ICR, Outlook Stable
PACIFIC LINKS: Affiliate Wins Cash Collateral Access
PALM BEACH: Case Summary & 20 Largest Unsecured Creditors
PARKLAND CORP: S&P Rates New C$400MM Senior Unsecured Notes 'BB'
PAYSAFE HOLDINGS: Moody's Rates New Dual-Tranche Term Loan 'B1'
PCI GAMING: Moody's Alters Outlook on Ba3 CFR to Stable
PINNACLE DEMOLITION: Wins Cash Collateral Access
PRECISION DRILLING: Moody's Rates New Senior Unsecured Notes 'B3'
PRESTIGE BRANDS: S&P Assigns 'BB' Rating on Sr. Secured Term Loan
PROOFPOINT INC: S&P Assigns 'B-' ICR, Outlook Stable
RENOVATE AMERICA: Sortis Buys Leftover Benji Loan Assets for $120K
RF CAPITAL: DBRS Confirms Pfd-4(high) Cumulative Shares Rating
RICHARD MCGRATH: Bank Lender Wins Dismissal of Chapter 11 Case
SHERRY V. SEITZINGER: $1.275M Sale of Fremont Property to Park OK'd
SHILO INN IDAHO: Seeks August 29 Plan Exclusivity Extension
SIGNAL PARENT: Moody's Affirms B2 CFR & Alters Outlook to Negative
SIGNAL PARENT: S&P Affirms 'B' Rating on Term Loan Due 2028
SIX FLAGS: Moody's Affirms B2 CFR & Alters Outlook to Stable
SOAS LLC: May Use Cash Collateral Thru June 9
SOUTHWESTERN ENERGY: S&P Places 'BB-' ICR on CreditWatch Positive
SUN PROPERTY: Court Slaps $26,000 Sanction on Merchant
SUNLIGHT RIVER: Case Summary & 5 Unsecured Creditors
SWITCH LTD: Moody's Assigns B1 Rating to New $500MM Unsecured Debt
SWITCH LTD: S&P Affirms 'BB' ICR, Rates $430MM Unsec. Notes 'BB'
TIMBER PHARMACEUTICALS: Adjourns Annual Meeting Until July 1
TUMBLEWEED TINY HOUSE: Seeks to Use Cash Collateral Thru July 31
TYNDALL PARKWAY: Seeks to Use Cash Collateral
UA INVESTMENTS: Seeks to Use Cash, Pay Adequate Protection
VITALITY HEALTH: Wants Plan Exclusivity Extended Until July 16
WAGYU 100: Cattle Raiser Files Disclosures, Gets Conditional OK
YELLOW PAGES: S&P Withdraws 'B-' Long-Term Issuer Credit Rating
Z EDGE: Disposable Income to Fund 120-Month Plan
[^] BOND PRICING: For the Week from May 31 to June 4, 2021
*********
2501 DEL LAGO: Pinder Buying Fort Lauderdale Property for $4.6M
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2501 Del Lago, LLC, asks the U.S. Bankruptcy Court for the Southern
District of Florida to authorize the sale of the real property
located at 2501 Del Lago Drive, in Fort Lauderdale, Florida, to
Alexander Pinder for $4.6 million, cash.
The Debtor owns the Property legally described as Lot 9, Del Lago
Isle, a Subdivision, according to the Plat Thereof, as Recorded in
Plat Book 42 At Page 2 of the Public Records of Broward County,
Florida, Folio# 5042 13 14 0090.
The Debtor is unable to afford the monthly obligations of the
Property. Accordingly, it requests permission to sell the
Property, pay the secured obligations on the Property in full, and
utilizing the remaining net proceeds for the payment of creditors
of the Bankruptcy Estate, if any.
The sale of the property will relieve the Debtor of a great
financial obligation and enable the opportunity of proposing a
realistic and feasible Chapter 11 plan of reorganization.
The Debtor seeks to sell the Property to the Buyer, who is not an
insider of related to, or affiliated with the Debtor, pursuant to
the Florida AS-IS Real Estate Sale Contract, including addendum.
The Contract provides for (i) an all cash sale of the Property for
(ii) the purchase price of $4.6 million including (iii) the sale of
all fixtures and built-in furnishings. The Purchaser made an
Initial deposit of $460,000 that accompanied the contract that is
being held by Becker & Poliakoff Title Co. The balances of funds
are due at closing.
Pre-petition, the Debtor had entered into contracts but was unable
to convey clean title of the Property Due to 1) fraudulent deed, 2)
fraudulent mechanics lien and 3) Buyers notice that they were not
going to proceed, and caused the Debtor to detrimentally rely on
this statement. On the Petition Date, the value of the property
was listed as $5,033,590. Upon listing the property for sale, the
Debtor received multiple offers and accepted the highest offer for
$4.6 million, all cash, subject to approval of the Court.
The Debtor and the Purchaser have negotiated the Contract and the
contemplated transaction in good faith.
Upon information and belief, the only known liens, claims and
encumbrances against Property are: (1) a first mortgage in favor of
A&S Capital, LLC in the amount of $3,192,406, (2) a Mechanic's Lien
in favor of Mae's Trust in the amount of $300, (3) 2018 Real estate
Taxes in favor of Broward County Property Tax in the amount of
$100,118.02 (Claim No. 1), (4) 2019 Real estate Taxes in favor of
Broward County Property Tax in the amount of $104,736,76 (Claim No.
2), and (5) 2020 Real estate Taxes in favor of Broward County
Property Tax in the amount of $96,263.63 (Claim No. 3).
Upon information and belief, there are no other liens, claims or
encumbrances against the Property.
The Purchaser will conduct a lien search and any additional liens,
claims and encumbrances will be satisfied, or the Debtor will file
the appropriate Motions with the Court.
By utilizing the Sale By Owner, the Debtor received multiple offers
and was able to receive a purchase price of $4.6 million, an all
cash offer and was able to save payment of commission of
approximately $276,000. This was the highest, and best, offer the
Debtor received, and is at or above the current market price for
similar properties in the area, in similar or like condition. The
sale of the Property will be free and clear of all lines, claims
and encumbrances.
In the event the Debtor receives any higher or better offers prior
to the hearing on the Motion, the Debtor will seek the approval of
bid procedures at the hearing on the Motion, where competing bids
can then be made.
The Debtor, exercising its business judgment, believes that the
sale of the Property to the Purchasers is in the best interest of
the bankruptcy estate.
In addition, the Debtor requests that the Court waives the stay
period under Fed. R. Bank. P. 6004(h), so that the parties can
close on the scheduled closing date, in the event the Motion is
continued or the closing takes place sooner than the scheduled
closing date.
A copy of the Motion is available at https://tinyurl.com/drnrkbbj
from PacerMonitor.com free of charge.
About 2501 Del Lago
2501 Del Lago, LLC is the fee simple owner of a property located
at
2501 Del Lago Dr., Ft. Lauderdale, Fla., having a current value of
$5.03 million.
2501 Del Lago filed its voluntary petition for relief under
Chapter
11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-13678) on
April 19, 2021. Walter Garcia, manager, signed the petition. At
the time of the filing, the Debtor disclosed $5,033,590 in assets
and $3,490,994 in liabilities. The Law Office of Adam I. Skolnik,
P.A. serves as the Debtor's legal counsel.
41-23 HAIGHT: Court Confirms First Amended Plan
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Judge Nancy Hershey Lord confirmed the First Amended Chapter 11
Plan of Liquidation filed by Gregory M. Messer, as Chapter 11
Trustee of 41-23 Haight Realty, Inc., a/k/a 41-23 Haight Street
Realty, Inc.
The Court ruled that the Trustee, the Plan Administrator or the
Committee shall file post-confirmation operating reports on a
quarterly basis, upon the conclusion of each respective quarter
until the earlier of the entry of a final decree, conversion, or
dismissal of the case.
A copy of the confirmation order is available for free at
https://bit.ly/3igstkN from PacerMonitor.com.
About 41-23 Haight Street Realty
41-23 Haight Street Realty, Inc. is a single asset real estate (as
defined in 11 U.S.C. Section 101(51B).
On June 4, 2019, an involuntary Chapter 11 petition (Bankr. E.D.
N.Y. Case No. 19-43441) was filed against 41-23 Haight Street
Realty, Inc. by petitioning creditors, Wen Mei Wang, Xian Kang
Zhang, and Yu Qing Wang. Judge Nancy Hershey Lord oversees the
case.
Victor Tsai, Esq., is the Debtor's legal counsel.
On Aug. 12, 2019, the Court appointed Gregory Messer as Chapter 11
trustee for the Debtor's estate. The trustee is represented by
LaMonica Herbst & Maniscalco, LLP.
On July 17, 2020, the Office of the U.S. Trustee appointed a
committee of unsecured creditors. Gleichenhaus, Marchese &
Weishaar, PC serves as the committee's legal counsel.
5 STAR PROPERTY: Order Backing Winter Haven Property Sale Clarified
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Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the
Middle District of Florida entered an order clarifying her previous
Sale Order authorizing 5 Star Property Group, Inc.'s sale of the
real property located at 4130 Country Club Road South, in Winter
Haven, Florida 33881, described as The Gates of Lake Region PB 100
PGS 25 & 26 Lot 31, to Shanell Cody for $375,000.
A hearing on the Motion was held on May 27, 2021.
In the event the property is sold pursuant to the Sale Order, the
lis pendens filed by Rick and Renee Slone will remain in effect
only as to the proceeds from the sale of the Real Property. In
the event the Real Property is sold pursuant to the Sale Order, the
lis pendens will not effect or attach to the Real Property itself.
All other terms of the Sale Order entered on May 24, 2021, remain
in full force and effect.
Attorney for Debtor, Buddy D. Ford, Esquire, is directed to serve a
copy of the Order on interested parties who do not receive service
by CM/ECF and file a Proof of service within three days of entry of
the Order.
About 5 Star Property Group, Inc.
5 Star Property Group, Inc. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-07801) on Oct. 20, 2020, listing under $1 million in both
assets
and liabilities. Buddy D. Ford, Esq. at BUDDY D. FORD, P.A.
represents the Debtor as counsel.
51 EAST 73RD: Trustee Proposes Auction Sale of New York Property
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Lori Lapin Jones, as Chapter 11 Trustee of 51 East 73rd St LLC,
asks authority from the U.S. Bankruptcy Court for the Southern
District of New York to sell the real property and improvements
located at 51-53 East 73rd Street, in New York City via public
auction.
The Debtor owns the Property. The Property consists of a 5-story,
double wide townhouse in New York City. The Property is currently
vacant. Following her appointment, the Trustee, inter alia,
obtained insurance for the Property, arranged for payment of
utilities, had the locks changed at the Property, and attended to
repairs to the roof and security camera. The Trustee visited the
Property and arranged for periodic property-management visits.
By Order dated Dec. 11, 2020, the Court, inter alia, approved a
stipulation between the Trustee and secured creditor NYC NPL
Servicing LLC providing for a carve-out from NYC NPL's secured
claim, and authorized the Trustee to market for sale and solicit
offers for the Property. By Order dated Jan. 29, 2021, the Court
authorized and approved the Trustee's employment of Rosewood Realty
Group as her real estate broker. The Broker has been actively
marketing the Property for sale and has received multiple
expressions of interest in the Property.
To maximize the value of the Property, the Trustee, in consultation
with the Broker, has determined that it is in the best interests of
the estate and its creditors to schedule the 363 Sale. NYC NPL
agrees. By the Motion, the Trustee seeks authority to conduct the
363 Sale of the Property on July 29, 2021 (or such later date as
determined by the Trustee), approval of the Terms and Conditions of
Sale, and approval of the form and manner of notice of the 363
Sale. The Trustee also seeks to schedule a hearing to confirm the
results of the 363 Sale to the successful bidder.
The Trustee proposes to conduct the 363 Sale on July 29, 2021 at
11:00 a.m. (ET), or such other later date and time designated by
the Trustee. The Trustee anticipates that the 363 Sale will be
conducted virtually, but reserves the right to conduct it in
person. Only parties that have delivered the required $1 million
deposit and executed Terms and Conditions of Sale to the Trustee by
5:00 p.m. (ET) on July 27, 2021 and NYC NPL will be entitled to
participate in the 363 Sale. At or prior to the 363 Sale, the
Trustee will determine the opening bid. Qualified bidders and NYC
NPL may make competing bids to purchase the Property. The 363 Sale
will continue until there is only one offer that the Trustee
determines is the highest or otherwise best offer for the Property.
Within two business days after the conclusion of the 363 Sale, the
Highest Bidder will deliver to the Trustee an amount equal to 10%
of its successful bid minus the amount of the Qualifying Deposit as
and for a good faith deposit (such amount, plus the Qualifying
Deposit).
Within five business days after the conclusion of the 363 Sale, the
Trustee will either: (i) return the Second Highest Bidder's
Qualifying Deposit; or (ii) notify the Second Highest Bidder of the
Highest Bidder’s default and, in that event, the Second Highest
Bidder will thereafter be deemed the Highest Bidder under these
Terms and Conditions of Sale and shall, within two business days
after such notice by the Trustee, deliver to the Trustee an amount
equal to 10% of its bid minus the amount of its Qualifying Deposit
as and for a good faith deposit.
The Highest Bidder must pay the balance of the purchase price for
the Property (the difference between the amount of the successful
bid and the Deposit) to the Trustee at the closing of title to the
Property. The Highest Bidder must close title to the Property on
or before the later of 30 days from the entry of an Order
confirming a Chapter 11 Plan or an Order confirming the results of
the 363 Sale, time being of the essence as to the Highest Bidder,
although such date may be extended solely by the Trustee, provided,
however that the Trustee will grant the Highest Bidder a one-time
extension of up to 30 days if the Highest Bidder pays to the
Trustee an extension fee of $7,000 per day, such extension fee to
be paid in the same manner as the Purchase Price on or before the
initial Closing Date, which Extension Fee will be non-refundable
and will not be credited to the Purchase Price.
Pursuant to section 363(k) of the Bankruptcy Code and a Bankruptcy
Court-approved stipulation between the Trustee and NYC NPL, LLC,
NYC NPL, LLC may credit bid for the Property at the 363 Sale. In
the event NYC NPL, LLC is the highest or best bidder for the
Property at the 363 Sale, NYC NPL, LLC will be obligated to close
title to the Property in accordance with the Stipulation and the
Terms and Conditions of Sale.
Real estate taxes, water and sewer charges, and utilities will be
apportioned as of 12:00 a.m. (ET) on the Closing Date. There will
be no other apportionments pertaining to the Property.
The Highest Bidder shall: (i) unless waived by an Order of the
Court under section 1146 of the Bankruptcy Code, pay any village,
city, county, state or other real property transfer taxes incurred
by the transfer of the Property by the estate at the Closing; and
(ii) be responsible for the preparation of any transfer forms.
In connection with the Closing and Closing Date, the Highest Bidder
is given notice that time is of the essence against the Highest
Bidder and the failure of the Highest Bidder to timely close for
any reason whatsoever, including its failure to pay the balance of
the Purchase Price on the Closing Date, will result in the Trustee
retaining the Deposit (and any Extension Fee) and the termination
of the Highest Bidder's right to acquire the Property under the
Terms and Conditions of Sale. Expenses incurred by the Highest
Bidder, or any competing bidder, including concerning any due
diligence, such as obtaining title reports, will be the sole
responsibility of such bidder and under no circumstances will the
Trustee, the Debtor's estate or the Trustee's professionals be
responsible for, or pay, such expenses.
The Property is being sold "as is, where is," "with all faults,"
without any representations, covenants, guarantees or warranties of
any kind or nature whatsoever, and free and clear of any and all
Interests, with such Interests, if any, to attach to the proceeds
of sale.
The Trustee will convey the Property by delivery of a Trustee's
Deed. The quality of title will be that which any reputable title
insurance company authorized to do business in the State of New
York is willing to approve and insure. The Trustee may at her
option arrange for the issuance of a title insurance policy by such
a company at the Highest Bidder's sole cost and expense.
The Trustee proposes that, following the 363 Sale, an affirmation
to confirm the results of the sale will be submitted to the Court
along with the proposed Approval Order authorizing and approving,
inter alia, her sale of the Property to the successful bidder from
the 363 Sale. Subject to Court availability, the Trustee proposes
that the hearing be conducted in August 2021.
The Trustee believes that it is in the best interest of the estate
and its creditors to proceed expeditiously with the 363 Sale of the
Property. The proposed July 29, 2021 sale date will provide
appropriate time for the Broker to advertise the 363 Sale, which
the Trustee anticipates will be conducted virtually (but the
Trustee may also allow for in-person participation), with
registration and deposits to be tendered by July 27, 2021.
The proposed Terms and Conditions of Sale provide, inter alia, that
the Property will be sold free and clear of any and all interests.
The proposed 363 Sale will ensure that the value of the Property is
maximized and that the highest or best offer for the Property is
received. It is anticipated that the Trustee will soon file a
Chapter 11 plan and that confirmation of that plan will occur prior
to the closing on the sale of the Property. For these reasons, the
Trustee respectfully requests that the Court approves the relief
sought.
The Trustee respectfully requests that the Court waives the 14-day
stay period required under Bankruptcy Rule 6004(h). The relief is
both necessary and appropriate under the circumstances of the case.
Indeed, in the event the Motion is approved, the Trustee intends
to commence advertising the 363 Sale.
A copy of the Agreement is available at
https://tinyurl.com/m8rysds7 from PacerMonitor.com free of charge.
About 51 East 73rd St LLC
51 East 73rd St, LLC, owns and operates a real estate located at
51-53 East 73rd Street, N.Y.
51 East 73rd St sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-10683) on March 3,
2020. At the time of the filing, Debtor disclosed assets of
between
$10 million and $50 million and liabilities of the same range. The
Debtor is represented by Leo Fox, Esq.
Lori Lapin Jones, Esq., was appointed as the Debtor's Chapter 11
trustee. The trustee is represented by LaMonica Herbst &
Maniscalco, LLP.
ADVANTAGE HOLDCO: Plan Exclusivity Period Extended Thru Sept. 10
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At the behest of Advantage Holdco, Inc. and its affiliates, Judge
Craig T. Goldblatt of the U.S. Bankruptcy Court for the District of
Delaware extended the periods in which the Debtors may file a plan
of reorganization through and including September 10, 2021, and to
solicit acceptances through and including October 19, 2021. This is
a third extension of the Debtors' exclusivity periods.
Since the Petition Date, the Debtors and their advisors have worked
diligently to administer this case as efficiently as possible to
minimize administrative expenses and maximize the recovery
available to all of the Debtors' stakeholders.
Accomplishing various tasks has been a labor-intensive and
time-consuming process, fully occupying the Debtors' employees and
professionals. However, as a result, the Debtors anticipate filing
a combined plan of liquidation and disclosure statement soon.
The Debtors intend to continue to consult and work cooperatively
with the Committee on all major issues, including drafting a plan.
The Debtors, Committee, and the Debtors' post-petition lender have
agreed in principle to a construct on how to move these cases
forward to confirmation subject to the reconciliation of certain
claims, the Debtors believe were filed either without merit or for
inflated amounts. Determining the validity of many of such claims
has required substantial analysis, and the Debtors have completed
this review and successfully resolved the large majority of
objectionable claims either consensually or by objections.
The Debtors also noted that they are paying their undisputed
post-petition obligations as they come due.
The extensions will provide the Debtors and their advisors the
opportunity to negotiate and file a chapter 11 plan for the
distribution of assets to creditors. Also, it will give the Debtors
time to resolve issues related to any potential plan and continue
the orderly, efficient, and cost-effective chapter 11 process.
A copy of the Debtors' Motion to extend is available at
https://bit.ly/3wXYT7O from Epiq11.com.
A copy of the Court's Extension Order is available at
https://bit.ly/2Scsls7 from Epiq11.com.
About Advantage Rent a Car
Advantage Rent A Car -- http://www.advantage.com/-- is a car
rental company with 50 locations in the U.S. and 130 international
affiliate locations. The parent entity, Advantage Holdco, is owned
by Toronto-based Catalyst Capital Group. According to its website,
the Debtors have locations in 27 markets, including New York, Los
Angeles, Orlando, Las Vegas, and Hawaii.
Advantage Holdco, Inc., doing business as Advantage Rent a Car,
sought Chapter 11 protection (Bankr. D. Del. Case No. 20-11259) on
May 26, 2020. Six related entities also sought bankruptcy
protection.
Advantage Holdco was estimated to have $100 million to $500 million
in assets and $500 million to $1 billion in liabilities as of the
bankruptcy filing.
Judge Craig T. Goldblatt replaced Judge John T. Dorsey as the case
judge. The Debtors tapped COLE SCHOTZ P.C. as counsel; and MACKINAC
PARTNERS, LLC, as restructuring advisor.
AIRCASTLE LIMITED: Moody's Gives Ba2(hyb) on New Preferred Stock
----------------------------------------------------------------
Moody's Investors Service has affirmed the Baa3 long-term senior
unsecured rating of Aircastle Limited and assigned a Ba2 (hyb)
rating to the company's proposed new issuance of cumulative
preferred stock. Moody's has also revised Aircastle's outlook to
stable from negative.
RATINGS RATIONALE
Moody's affirmation of Aircastle's Baa3 long-term senior unsecured
rating reflects the company's competitive position in mid-life
commercial aircraft investing, strong liquidity position that aids
its financial resilience to the downturn in the global aviation
sector, low leverage, and prospects for improving operating
performance as recovery in air travel volumes strengthens airlines'
demand for leased aircraft. Moody's expects that air travel volumes
will recover strongly toward 2019 levels by 2023 but that
Aircastle's earnings and cash flow will continue to reflect the
weakened credit quality of certain airlines for several more
quarters. The rating also recognizes the stabilizing effects on
Aircastle's financial condition of the company's ownership by
Marubeni Corporation (Baa2 stable) and Mizuho Leasing (owned by
Mizuho Financial Group, Inc., A1 stable), which Moody's expects
will continue to aid the company's financial stability by
facilitating access to funding alternatives, providing a strong
liquidity runway.
The Ba2 (hyb) rating assigned to Aircastle's proposed cumulative
preferred stock reflects the securities' junior priority in
Aircastle's capital structure. The preferred stock will be
subordinated to all Aircastle indebtedness and will rank senior
only to equity. Preferred stock dividends that Aircastle elects to
not pay will be cumulative. Aircastle will not be permitted to pay
dividends to common stockholders or repurchase common stock until
cumulative preferred stock dividends are paid in full. Aircastle
intends to use the proceeds for general corporate purposes.
After issuing the preferred stock, Moody's expects that Aircastle's
debt-to-tangible equity leverage will slightly improve to about
2.8x from 2.9x, reflecting Moody's adjustments that include a 50%
equity attribution to the new preferred stock, which feature
qualifying terms under Moody's Hybrid Equity Credit methodology.
Moody's revised Aircastle's outlook to stable from negative based
on Moody's expectation that demand for leased aircraft will rise as
air carriers rebuild capacity to serve strengthening air travel
demand, helping to improve Aircastle's profitability and cash flow
metrics over the next 12-18 months. The stable outlook also
reflects Moody's expectation that Aircastle will continue to
exhibit strong liquidity and capital management.
Moody's revised its outlook for the aircraft leasing sector to
stable from negative on May 20, 2021, reflecting its expectations
that rising air travel volumes will strengthen airline credit
quality and improve demand for leased aircraft, strengthening
lessors' prospects for achieving stronger profitability by 2023.
The stable outlook also reflects strong liquidity positioning as
well as stable financial leverage in the sector, as the risk of
large impairment charges recedes.
Aircastle has strengthened its liquidity during the past year,
resulting in a 12-month's liquidity sources to uses coverage ratio
of over 250% at 28 February 2021, comfortably above Moody's current
150% minimum liquidity coverage threshold for investment-grade
aircraft leasing companies. Aircastle's liquidity position is aided
by manageable debt maturities over the next two years, historically
strong access to the unsecured debt markets and low encumbered
assets, as well as low capital expenditure commitments compared to
certain other investment-grade peers. Moody's believes that
Aircastle's shareholders will continue to aid the company's
financial stability by facilitating access to funding alternatives,
helping the company to maintain a strong liquidity runway.
A credit challenge for Aircastle is the lingering effects of the
unprecedented decline in the aviation sector. Aircastle had agreed
with airline customers to temporarily defer rental collections
totaling $108 million at April 15, 2021. However, Moody's expects
that Aircastle's financial performance will improve along with the
anticipated rise in air travel volumes through 2023 that will
strengthen lease rates, provide new lease opportunities and improve
net profitability and cash flow by 2023.
An additional challenge for Aircastle is its relatively older fleet
composition, that Moody's believes is more exposed to downside
demand fluctuations compared to peers with newer aircraft fleets
and longer average remaining lease terms. At February 28, 2021,
Aircastle's $6.7 billion fleet of 252 aircraft had a weighted
average age of 10.6 years compared to a rated peer median of 6.0
years, and an average remaining lease term of 4.2 years compared to
a rated peer median of 6.7 years. Because Aircastle's contracted
rental revenues roll-off more quickly than similarly-rated peers,
it must renew and replace proportionately more of its lease
agreements during the weak environment that its peers. However,
airlines focused on capital efficiency will likely see value in
leasing lower-cost mid-life narrow-body aircraft as air travel
demand recovers, particularly if fuel costs remain low, which could
offset earnings and cash flow risks associated with the company's
fleet composition.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade Aircastle's ratings if: 1) the company
maintains stronger liquidity than the average of investment-grade
peers; 2) the strength of recovery in air travel volumes exceeds
Moody's base case; 3) the company's earnings and cash flow recover
to levels stronger than peers; 4) fleet residual value risks
materially decline; and 5) the company's management of capital
remains strong, resulting in a debt-to-equity leverage ratio
materially lower than peer average.
Aircastle's ratings could be downgraded if: 1) liquidity in
relation to projected expenditures and debt maturities (one-year
horizon) declines to less than 150%; 2) recovery in air travel
volumes declines materially below Moody's base case; 3) revenues
weaken and costs increase to the extent that the company will be
unable to generate materially positive profits and operating cash
in 2023; 4) debt-to-equity leverage increases more than Moody's
expects due to high impairment charges; 5) the company's
competitive positioning otherwise weakens.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
AIRCASTLE LTD: S&P Rates New A Perpetual Preference Shares 'BB'
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating to aircraft
lessor Aircastle Ltd.'s proposed series A fixed-rate reset
cumulative perpetual preference shares (final amount to be
determined upon close). The preferred shares will rank senior to
the company's common stock and it classifies them as having
intermediate equity credit (50% equity) based on the proposed
terms, thus S&P rates the instrument two notches below its 'BBB-'
long-term issuer credit rating on Aircastle to reflect its
subordination and payment flexibility due to the optional
deferability of the dividend payments. The company will use the
proceeds from this issuance for general corporate purposes,
including to repay debt.
S&P said, "Under the proposed structure, the coupon on the notes
will step up by 25 basis points (bps) beginning 2031 (second reset
date), and a further 75 bps in 2046 (fifth reset date). We consider
the cumulative 100 bps as a material step-up, which could provide
an incentive to the issuer to redeem the instrument. Consequently,
we will no longer recognize the issuance as having intermediate
equity content after its first reset date (2026), because the
remaining period until its economic maturity would, by then, be
less than 20 years. However, we classify the instrument's equity
content as intermediate until its first reset date, as long as we
believe the loss of the beneficial intermediate equity content
treatment will not cause the issuer to call the instruments at that
point.
"Our 'BBB-' issuer credit rating on Aircastle reflects its position
as a midsize provider of aircraft operating leases and its diverse
aircraft fleet of 261 aircraft (as of Feb. 28, 2021). Aircastle,
like other aircraft leasing companies, generated materially less
revenue in 2020 than we previously expected because of the COVID-19
pandemic impact on its airline customers. In fact, the company has
been somewhat more exposed to airline bankruptcies during the
pandemic than many other large rated aircraft lessors. Still,
aircraft lessors are in a better position than airlines because
their lease contracts require payment regardless of whether the
planes are in use. We believe Aircastle's operating performance
will experience ongoing weakness through 2021, but we expect credit
metrics to remain commensurate with the rating. We could lower our
ratings on the company if we believe its funds from operations to
debt will remain below 9% on a sustained basis or we lower our
rating on its controlling shareholder Marubeni Corp."
ALAMO DRAFTHOUSE: Wins Cash Collateral Access Thru Sept. 15
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware entered an
order amending the final cash collateral order dated April 1, 2021,
authorizing Alamo Drafthouse Cinemas Holdings, LLC et al. to use
cash collateral on a final basis.
The Debtors are authorized to use so-called Excluded Cash to fund
pre-Sale Closing Date administrative expenses in accordance with
the Approved Budget and post-Sale Closing Date administrative
expenses through the date that is the earliest to occur of:
(a) September 15, 2021;
(b) the date on which any of the following occurs unless
waived in writing by the Prepetition Agent, acting at
the direction of the Required Prepetition Lenders:
(i) entry of any order constituting a stay,
modification, appeal or reversal of the Order,
(ii) the appointment of any examiner with expanded
powers,
(iii) entry of any order dismissing the Chapter 11
Cases or converting the Chapter 11 Cases to cases
under Chapter 7, or
(iv) the Debtors' filing of a motion or other request
for relief seeking to modify or alter or vacate
the Order or any term thereof; and
(c) the expiration of the Remedies Notice Period, in each
case unless waived in writing by the Prepetition Agent.
On June 8, 2021, and on the second Tuesday of each calendar month
thereafter, the Debtors are directed to deliver to the Prepetition
Agent:
(a) a report in form and substance satisfactory to the
Prepetition Agent showing (i) the cumulative actual cash
receipts on an aggregate basis and (ii) the actual cash
disbursements on a line by line basis compared to the
projected cash disbursements in the Approved Budget; and
(b) other financial or other information as may be
reasonably requested by the Prepetition Agent.
A copy of the Court order is available for free at
https://bit.ly/3cgtbuS from Epiq Corporate Restructuring, LLC, the
claims agent.
About Alamo Drafthouse
The Alamo Drafthouse Cinema -- https://drafthouse.com/ -- is an
American cinema chain founded in 1997 in Austin, Texas, that is
famous for its strict policy of requiring its audiences to maintain
proper cinema-going etiquette. Known for offering full meal and
alcohol service at its theaters, the company also operates a movie
merchandise store and an annual genre film festival, Fantastic
Fest. Alamo Drafthouse had 41 locations as of March 31, 2021, with
23 of those locations ran by franchisees.
Alamo Drafthouse Cinemas Holdings, LLC and 33 affiliated companies
filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 21-10474)
on March 3, 2021. Alamo Drafthouse was estimated to have $100
million to $500 million in assets and liabilities as of the
bankruptcy filing.
The Hon. Mary F. Walrath is the case judge.
The Company tapped Young Conaway Stargatt & Taylor LLP as
bankruptcy counsel, Portage Point Partners as its financial
adviser, and Houlihan Lokey Capital as its investment banker. Epiq
Corporate Restructuring, LLC, is the claims agent.
ALPHABET HOLDING: Moody's Hikes CFR to B2, Placed on Further Review
-------------------------------------------------------------------
Moody's Investors Service upgraded Alphabet Holding Company, Inc.'s
(dba as The Bountiful Company; "Bountiful") Corporate Family Rating
to B2 from B3 and its Probability of Default Rating to B2-PD from
B3-PD. Moody's also upgraded the rating on the company's asset
based lending facility to Ba1 from Ba2, the rating on the company's
first lien term loan to B2 from B3, and the rating on the company's
second lien term loan to Caa1 from Caa2. The CFR, PDR and loan
ratings were placed on review for further upgrade.
The upgrade reflects Bountiful's good operating performance and
Moody's expectation that the company's improving free cash flow
will continue. Bountiful's focus on new product introductions
combined with strong cost reduction initiatives and productivity
improvements has yielded good operating earnings and operating cash
flow. Further, a number of the company's immunity based products,
such as its vitamin C and vitamin D products, are benefitting from
increased demand during the coronavirus pandemic reflecting
consumers' focus on wellness. Thus, organic revenue was up 10% in
the fiscal year ending September 30, 2020 and 28% in the first
quarter ending December 31, 2021. Moody's expects Bountiful's
revenue and earnings to grow more modestly over the next 12 months
because the inflow of new consumers slows, but Moody's projects
revenue and earnings growth will remain positive. Moody's estimates
that Bountiful's financial leverage will continue to improve and
approach 5.2x debt-to-EBITDA by the end of the fiscal year ended
September 2021 from about 6.3x in the the September 2020 fiscal
year due to good earnings growth.
Bountiful's ratings remain on review for upgrade because of the
pending acquisition of a majority of the company's assets by Nestle
S.A. for $5.75 billion. Management has announced that the
acquisition should close in the second half of 2021 subject to
regulatory approvals and other customary closing conditions. In the
review, Moody's will focus on the terms of the proposed acquisition
by Nestle and the effect on Bountiful's debt. Upon completion of
the deal, Moody's expects to withdraw the Bountiful's ratings if
the existing debt is repaid as expected.
The following is a summary of Moody's actions:
Ratings Upgraded and Placed Under Review for further Upgrade:
Issuer: Alphabet Holding Company, Inc.
- Probability of Default Rating, Upgraded to B2-PD from B3-PD;
Placed Under Review for further Upgrade
- Corporate Family Rating, Upgraded to B2 from B3; Placed Under
Review for further Upgrade
- $350 million senior secured first lien asset-based revolving
credit facility expiring 2022, Upgraded to Ba1 (LGD2) from
Ba2 (LGD2); Placed Under Review for further Upgrade
- $1.5 billion senior secured first lien term loan maturing
2024, Upgraded to B2 (LGD3) from B3 (LGD3); Placed Under
Review for further Upgrade
- $400 million senior secured second lien term loan maturing
2025, Upgraded to Caa1 (LGD5) from Caa2 (LGD6); Placed
Under Review for further Upgrade
Outlook Actions:
Issuer: Alphabet Holding Company, Inc.
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE
Bountiful's B2 CFR reflects the company's moderately high financial
leverage of about 5.2x debt/EBITDA as of December 2020, and
moderate scale when compared to other corporate issuers within the
same industry. In addition, Moody's believes the operating
environment of the vitamin, mineral, and nutritional supplement
("VMNS") industry will continue to be challenging as competition
for market share among existing providers and new entrants remains
intense and as more companies enter the sector and launch new
products. Moody's expects competition for consumers and retail
distribution, as Bountiful continues to shift its VMNS product
portfolio to branded from private label, will require continual
investments in product marketing and promotions that create
downward pressure on margins. The rating is supported by the
company's portfolio of well-known brands and good channel
diversification, as well as the growth potential of the VMNS
industry. This growth is due, in part, to the aging population,
with older adults consuming more VMNS products. Growth will also be
favorably affected by consumers' focus on health and wellness, a
trend that is being accentuated by the coronavirus. Moody's
anticipates growing VMNS volumes as well as Bountiful's initiatives
to streamline its supply chain and cost structure will lead to
relatively flat margins over the next two years despite the
competitive environment.
The Ba1 rating on the ABL reflects a one-notch override to the Ba2
model-derived outcome based on the loss given default framework.
The override reflects the structural features of the ABL including
good collateral coverage that Moody's anticipates would enhance
recovery prospects in the event of a default.
The coronavirus outbreak and the government measures put in place
to contain it continue to disrupt economies and credit markets
across sectors and regions. Although an economic recovery is
underway, it is tenuous, and its continuation will be closely tied
to containment of the virus. As a result, there is uncertainty
around Moody's forecasts. Moody's regard the coronavirus outbreak
as a social risk under Moody's ESG framework, given the substantial
implications for public health and safety.
Environmental and other social risks are relatively low for the
company. However, consumption patterns are changing in the United
States with some consumers favoring healthier food options. This is
favorable for Bountiful due to its focus on health and fitness that
include products such as vitamins, nutrition bars and powders. The
company's manufacturing facilities are also regulated by the Food
and Drug Administration for health and safety. Bountiful operates
manufacturing facilities where efficient use of energy, land and
water are necessary to maintain a good environmental record.
Moody's considers Bountiful's financial strategies as aggressive
given its high financial leverage and private equity ownership.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the company's revenue and EBITDA
deteriorate because of competitive volume losses, adverse product
mix, pricing declines or cost increases. Debt funded acquisitions,
shareholder distributions, or a deterioration in liquidity could
also contribute to a downgrade. Debt to EBITDA sustained above 6.0x
could also prompt a downgrade.
The Bountiful's ratings could be upgraded if the company maintains
consistent organic revenue growth, a stable to higher EBITDA
margin, reduces debt-to-EBITDA, and maintains meaningful free cash
flow. Bountiful's debt ratings could also be upgraded if the
company is acquired by Nestle, some of the debt remains outstanding
and there is implicit support or an explicit guarantee from
Nestle.
The principal methodology used in these ratings was Consumer
Packaged Goods Methodology published in February 2020.
The Bountiful Company, headquartered in Ronkonkoma, NY, is a
manufacturer and marketer of VMNS primarily in the United States.
Some of the company's brands include Nature's Bounty, Sundown and
Pure Protein. Bountiful is a subsidiary of Alphabet Holding
Company, Inc. The company is majority owned by private equity firm
KKR with The Carlyle Group owning a 30% minority interest. The
Bountiful Company generates nearly $2.2 billion in annual revenue.
ARCHDIOCESE OF NEW ORLEANS: Sets Bid Procedures for Kenner Property
-------------------------------------------------------------------
The Roman Catholic Church of the Archdiocese of New Orleans asks
the U.S. Bankruptcy Court for the Eastern District of Louisiana to
authorize the bidding procedures in connection with the auction
sale of the immovable property commonly known as 4119 St. Elizabeth
Drive, in Kenner, Louisiana, as legally described and set forth in
the Draft Purchase Agreement.
A telephonic hearing on the Motion is set for June 17, 2021, at
1:30 p.m. Objections, if any, must be filed no later than seven
days before the hearing date.
The Debtor is the title holder of the Property. Although it has
not listed the Property for sale, the Debtor has been attempting to
sell the Property for approximately two years because it is not
currently being used. In connection with this process, on June 4,
2020, the Debtor filed its Original Sale Motion, asking authority
to sell the Property to Bryan G. Krantz in exchange for a cash
purchase price of $1.8 million. After discussions with the Tort
Committee, the Debtor agreed to withdraw the Original Sale Motion
and file the Motion, which proposes sale procedures pursuant to an
auction process.
Based on current circumstances, and in the exercise of its business
judgment, the Debtor has determined that a sale process will
maximize the value of the Property for its estate. Reviewing the
available options, it proposes the Bidding Procedures as a means to
move the sale process forward, in a manner designed to achieve the
best and highest possible recovery for the estate. The Debtor
believes that the Bidding Procedures, which contemplate its
consultation with Tort Committee and the Commercial Committee will
result in a competitive bidding and auction process, thus enhancing
the recovery to its estate and its creditors.
By the Motion, the Debtor seeks the entry of two orders relating to
the proposed sale of the Property.
First, the Motion requests a Bidding Procedures Order that approves
(a) the bidding procedures, and (b) the Auction and Sale Notice.
The Bidding Procedures include an auction process, whereby bidders
will be invited to participate and submit bids to purchase the
Property.
Second, the Debtor seeks entry of a Sale Order, under Section 363
of the Bankruptcy Code, that (a) grants it authority to sell the
Property in accordance with the results of the proposed Auction;
(b) provides that such sale will be free and clear of all liens,
interests, and encumbrances, with such liens, interests, and
encumbrances to be referred to the proceeds of such sale; (c)
determines that the Winning Bidder is entitled to the protections
of Section 363(m) of the Bankruptcy Code; and (d) waives the 14-day
stay pursuant to Bankruptcy Rule 6004(h).
The Debtor circulated a draft of the Motion to the counsel for the
Committees on May 26, 2021.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: July 2, 2021, at 5:00 p.m. (CST)
b. Initial Bid: TBD
c. Deposit: $50,000
d. Auction: If the Debtor receives more than one Qualified
Bid, the Debtor will conduct an Auction at the offices of Jones
Walker, LLP, 201 St. Charles Avenue, Suite 5100, New Orleans, LA
70170 on July 8, 20215, at 10:00 a.m. (CST).
e. Bid Increments: $5,000
f. Sale Hearing: July 9, 2021, at 1:30 p.m. (CST)
g. Closing: July 30, 2021
h. Break-up Fee: 4% of the proposed Purchase Price under such
Qualified Bidder's bid
Except as explicitly set forth in the Draft Purchase Agreement, the
Sale of the Property will be on an "as is, where is" basis, with
all faults, and without representations or warranties of any kind,
nature, or description.
Upon the conclusion of the Auction, the Winning Bidder and Back-Up
Bidder will immediately pay to the Debtor an additional amount in
cash that, when combined with the Deposit equals 10% of the
purchase price reflected in the final bid of the Winning Bidder and
Back-Up Bidder.
If the Bidding Procedures are approved, the Debtor will continue to
solicit bids for the Property up through the Bid Deadline.
Finally, the Debtor asks that the Court waives the 14-day stay
period under Bankruptcy Rule 6004(h).
A copy of the Bidding Procedures is available at
https://tinyurl.com/yyd9x7s5 from PacerMonitor.com free of charge.
About the Archdiocese of New Orleans
The Roman Catholic Church of the Archdiocese of New Orleans is a
non-profit religious corporation incorporated under the laws of
the
State of Louisiana. For more information, visit
https://www.nolacatholic.org/
Created as a diocese in 1793, and established as an archdiocese in
1850, the Archdiocese of New Orleans has educated hundreds of
thousands in its schools, provided religious services to its
churches and provided charitable assistance to individuals in
need,
including those affected by hurricanes, floods, natural disasters,
war, civil unrest, plagues, epidemics, and illness. Currently, the
archdiocese's geographic footprint occupies over 4,200 square
Miles
in southeast Louisiana and includes eight civil parishes --
Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St.
John
the Baptist, St. Tammany, and Washington.
The Roman Catholic Church for the Archdiocese of New Orleans
sought
Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May
1,
2020. The archdiocese was estimated to have $100 million to $500
million in assets and liabilities as of the bankruptcy filing.
Judge Meredith S. Grabill oversees the case.
The archdiocese is represented by Jones Walker LLP. Donlin,
Recano
& Company, Inc. is the claims agent.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on May 20, 2020. The committee is represented by
Pachulski Stang Ziehl & Jones, LLP and Locke Lord, LLP. Berkeley
Research Group, LLC is the committee's financial advisor.
ARCHDIOCESE OF SANTA FE: Blea Loses Bid to Be Removed from List
---------------------------------------------------------------
Bankruptcy Judge David T. Thuma denied the request of Rudy Blea for
an order or judgment removing his name from a list published by the
Roman Catholic Church of the Archdiocese of Santa Fe of persons
associated with the Archdiocese who have been credibly accused of
child sexual abuse.
The Court said the motion should be denied, without prejudice,
however, to Mr. Blea's right to file a motion for relief from stay
to bring an adversary proceeding seeking such relief.
According to the Court, the motion is not well taken for a number
of reasons:
-- It was filed in violation of the automatic stay and
therefore is void.
-- It seeks relief that can only be obtained by adversary
proceeding.
-- The nondischargeability allegation in the motion is
untimely.
-- The motion incorrectly alleges that Mr. Blea's state
court action was removed.
-- The motion incorrectly alleges that Mr. Blea sought
equitable relief in the state court action.
A copy of the Court's May 13, 2021 Opinion is available at
https://bit.ly/3uOvcEU from Leagle.com
About the Archdiocese of Santa Fe
The Roman Catholic Church of the Archdiocese of Santa Fe --
https://www.archdiosf.org/ -- is an ecclesiastical territory or
diocese of the southwestern region of the United States in the
state of New Mexico. At present, the Archdiocese of Santa Fe covers
an area of 61,142 square miles. There are 93 parish seats and 226
active missions throughout this area.
The Archdiocese of Santa Fe sought Chapter 11 protection (Bankr.
D.N.M. Case No. 18-13027) on Dec. 3, 2018, to deal with child abuse
claims. It reported total assets of $49,184,579 and total
liabilities of $3,700,000 as of the bankruptcy filing.
Judge David T. Thuma oversees the case.
The archdiocese tapped Elsaesser Anderson, Chtd. and Walker &
Associates, P.C., as bankruptcy counsel, Stelzner, Winter,
Warburton, Flores, Sanchez & Dawes, P.A as special counsel, and
REDW LLC as accountant.
On Aug. 28, 2020, the Court appointed as Brokers, Philip Gudwin and
Rusty Wafer of Santa Fe Properties.
ARCLINE FM HOLDINGS: S&P Assigns 'B' ICR, Outlook Stable
--------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to Arcline
FM Holdings LLC (which does business as Fairbanks Morse Defense, or
FMD). The outlook is stable.
S&P said, "At the same time, we assigned our 'B' issue-level and
'3' recovery ratings to the company's proposed $510 million
first-lien term loan, and 'CCC+' issue-level and '6' recovery
ratings to the company's proposed $155 million second-lien term
loan.
"The stable outlook reflects our expectation that debt to EBITDA
will decline to 6.3x-6.7x in 2022 as revenues increase and costs
associated with the transaction are removed.
"Our rating on Fairbanks Morse reflects its small size and limited
product, service, and customer diversity, combined with high
leverage, solid profitability, and financial sponsor ownership. We
expect pro forma debt to EBITDA to be 7x-7.5x in 2021 after
accounting for transaction fees, declining to 6.3x-6.7x in 2022 due
to growing revenue and the absence of transaction costs. Although
leverage may improve further as earnings increase, we do not expect
debt to EBITDA to decline below 5x for a sustained period as the
company's financial sponsor will likely pursue acquisitions or
dividends if leverage gets that low."
Arcline will fund the dividend and refinance the existing debt with
the proceeds from its proposed $510 million first-lien term loan
and $155 million second-lien term loan. The capital structure also
includes a $75 million asset-based loan (ABL) revolver to provide
liquidity, which is unrated and we expect to remain undrawn in the
near term.
Long lead times and steady demand provide high revenue visibility
for Fairbanks Morse. The company's original equipment manufacturing
(OEM) segment manufactures propulsion systems, motors, and
controllers, mostly for the U.S. Navy and Coast Guard, with some
commercial customers as well. The defense market provides a steady
revenue stream with order schedules known in advance, creating a
significant backlog.
A predictable, growing, high-margin aftermarket business should
result in above-average EBITDA margins. FMD's parts are on 223 of
the 308 vessels in the U.S. Navy's fleet. Parts are proprietary and
highly technical, designed specifically for each vessel, so
customers tend to go back to the OEM for aftermarket maintenance
and repairs. Maintenance schedules are highly predictable, and as
the U.S. Navy seeks to extend the life of vessels, the amount of
aftermarket revenue increases over a 40- to 50-year lifecycle. The
aftermarket segment makes up about two-thirds of the company's
annual revenue, but a much larger percentage of EBITDA due to the
high-margin nature of the work.
Fairbanks Morse operates in a very niche market with significant
product, service, and customer concentration. Despite its
long-standing relationship with the U.S. Department of Defense and
high barriers to entry in the market, FMD is a relatively small
company with a very limited customer base. Nearly all revenue is
derived from the U.S. Navy and Coast Guard (through various
shipbuilders), creating customer, geographic, and program
concentration. While defense spending in this area has been stable
historically, were it to decrease or be redistributed away from
various vessels, it would create a significant risk for the
company.
S&P said, "The stable outlook on Fairbanks Morse reflects our
expectation that the company's pro forma debt leverage will be
7x-7.5x in 2021 after accounting for transaction-related fees and
expenses, and will decrease to 6.3x-6.7x in 2022. While we expect
credit ratios to improve as earnings increase due to growth in
revenues, we believe the financial sponsor will likely pursue
acquisitions and possibly dividends if leverage declines
significantly."
S&P could lower the rating on Fairbanks Morse if debt to EBITDA is
above 7x for a sustained period and free operating cash flow is
approaching zero. This could be caused by:
-- Revenue declines from a decrease in government spending on
FMD's platforms, resulting in less original equipment and
aftermarket business;
-- EBITDA margins decline because of an increase in overhead costs
or difficulty maintaining a workforce large enough to keep up with
business; or
-- The sponsor engages in aggressive financial policy in the form
of large, debt-financed acquisitions or dividends.
Although unlikely due to current sponsor ownership, S&P could raise
the rating on Fairbanks Morse if debt to EBITDA dropped below 5x
and the sponsor committed to maintaining it below that level. This
could occur if:
-- The company continues to grow earnings organically or through
acquisitions without raising new debt; and
-- The sponsor shows a record of conservative financial policy and
uses excess cash for debt repayment.
ARCLINE FM: Moody's Assigns 'B3' CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service has assigned initial ratings to Arcline
FM Holdings, LLC ("Fairbanks Morse Defense" or the "company").
Moody's assigned a B3 Corporate Family Rating, a B3-PD Probability
of Default Rating, a B2 rating to the first lien term loan and a
Caa2 rating to the second lien term loan. The rating outlook is
stable. Proceeds of the term loans will be used to refinance all
existing debts of Fairbanks Morse Defense and pay a $227 million
dividend to the company's sponsor.
Assignments:
Issuer: Arcline FM Holdings, LLC
Probability of Default Rating, Assigned B3-PD
Corporate Family Rating, Assigned B3
Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3)
Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD5)
Outlook Actions:
Issuer: Arcline FM Holdings, LLC
Outlook, Assigned Stable
RATING RATIONALE
The B3 CFR reflects very high pro forma starting leverage. Moody's
estimates 2020 debt/EBITDA pro forma for the pending transaction at
10x. That said, Moody's expects that leverage will quickly decline
due to strong earnings growth. Despite earnings growth, debt/EBITDA
will remain high -- in the high-7x by the end of 2021. Fairbanks
Morse Defense has very good revenue and backlog visibility, which
supports Moody's expectation for rapid deleveraging. Further,
revenues and margin will expand over the next 12 months based on
existing/pending orders and pricing/cost actions recently
undertaken.
In addition to high leverage, the rating is constrained by the
company's focus on supplying engines and engine after market parts
primarily to the US Navy, and customer concentration risk that
comes along with such niche focus. Further, most of the company's
contracts are fixed price contracts, and therefore weak execution
or cost overruns could lead to significant volatility in earnings
and cash flow. One mitigant to this risk, however, is that most of
Fairbanks Morse Defense's revenue will be derived from ship classes
where the engine/parts designs are already well established which
reduces the risk of underperformance.
The rating is supported by Fairbanks Morse Defense's very strong
competitive position as a supplier to the US Navy. The company is
the sole domestic supplier for the engine classes that Fairbanks
Morse Defense builds and the US Navy will primarily source its
propulsion systems domestically. Barriers to entry are therefore
substantial. The strength of the company's competitive position is
demonstrated by its higher profitability margins. Moody's
anticipates that EBITDA margin could reach 25% for the company by
2022. The rating is supported by the company's good growth
prospects as the US Navy is expanding its ship fleet. Demand for
new military ships, aftermarket parts and related services will
drive a revenue CAGR of 4%-5% over the next 2-3 years.
Environmental and social considerations are not material but
governance considerations are material. Moody's views the company's
financial policies to be highly aggressive. The planned dividend
will increase debt by 50% and more than exceeds all invested equity
since the initial leveraged buy-out in January 2020. The company
also made several acquisitions in 2020, and implemented several
operational efficiency initiatives and strategic changes. There has
been only limited realization of the stronger operating results on
which the dividend is justified. Moody's expects the company to
continue to be acquisitive. M&A will focus on adding other US Navy
subsystems to the portfolio, expanding the portfolio of products
that Fairbanks Morse Defense supplies for the Navy. The US Navy is
increasingly seeking greater technical capability from its
contractors. This strategy, while sound, will result in continued
integration risk and elevated leverage.
Moody's expects the company will maintain adequate liquidity. Cash
will be less than $10 million at the close of the transaction but
free cash flow will be $20-25 million over the next 12 months. This
is more than sufficient to cover annual term loan amortization of
$5 million. Fairbanks Morse Defense will have an (unrated) $75
million asset-based revolving credit facility. The revolver will be
unborrowed initially. Moody's expects that borrowing on the
revolver will be brief and will not exceed $10 million.
The proposed new credit facilities provides covenant flexibility
for transactions that could adversely affect creditors, including
incremental facility capacity, plus an additional amount subject to
either 1) 5.0x First Lien Net Leverage Ratio (if pari passu secured
with the first lien term loan) or 2) a 6.5x Senior Secured Net
Leverage Ratio (if pari passu secured with the second lien).
There is an inside maturity sublimit allowing this starter amount
to be incurred with an earlier maturity date than the existing debt
obligation. After the transaction closes, the ABL revolver will
contain a Minimum Fixed Charge Coverage Ratio of 1.0x that will
spring and test when the excess availability is less than the
greater of $7.5 million or 10% of the Line Cap. Neither the first
nor the second lien term loan contains a financial maintenance
covenant.
Subsidiaries are only required to provide guarantees if
wholly-owned, raising the risk that a sale or disposition of
partial equity interests could trigger a guarantee release, with no
explicit protective provisions limiting such guarantee releases.
There are no asset blockers preventing the transfer of specified
assets to unrestricted subsidiaries; such transfers are permitted
subject to carve-out capacity and other conditions. There are no
express protective provisions prohibiting an up-tiering
transaction.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if debt/EBITDA is sustained around 6x
with free cash flow to debt above 5%. A less aggressive posture
towards dividends and M&A would also support an upgrade. The
ratings could be downgraded if debt/EBITDA fails to decline below
the mid-7x range, or if the company fails to generate consistently
positive free cash.
Fairbanks Morse Defense is a provider of propulsion systems,
ancillary power units, motors and electric controllers for the US
Navy and US Coast Guard. The company is owned by entities of
Arcline Investment Management.
The principal methodology used in these ratings was Aerospace and
Defense Methodology published in July 2020.
AVADIM HEALTH: Has Interim OK on DIP Loan, Cash Collateral Access
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
authorized Avadim Health, Inc. and affiliates to, among other
things, use cash collateral and obtain postpetition financing on an
interim basis.
The Debtors are authorized to borrow money pursuant to the DIP
Credit Agreement in an aggregate principal or face amount not to
exceed $7,156,000 under the DIP Facility, which will be used for
all purposes permitted under the DIP Documents. However, no more
than $2,250,000 of new DIP Loans will be available to the Debtors
pending the entry of a Final DIP Order.
Avadim Health is a borrower under a Credit Agreement, dated as of
October 5, 2018, with Hayfin Services LLP, as administrative agent
for the Senior Secured Lenders, collateral agent for the Secured
Parties, and the lenders party thereto from time to time.
The Borrower also entered into a Note Agreement, dated as of April
3, 2020, by and among the Borrower, the persons party thereto as
"Holders", and Hayfin Services LLP, as the representative for the
Senior Secured Noteholders and as Collateral Agent, pursuant to
which the Borrower issued to the Senior Secured Noteholders (i) a
Secured Note, dated as of April 3, 2020, in the original face
amount of $12,000,000, (ii) a Secured Note, dated as of May 26,
2020, in the original face amount of $5,000,00, (iii) a Secured
Note, dated as of May 5, 2021, in the original face amount
of$1,000,000, (iv) a Secured Note, dated as of May 12, 2021, in the
original face amount of $2,000,000, and (v) a Secured Note, dated
as of May 20, 2021, in the original face amount of $2,000,000. All
amounts owing under the Senior Secured Notes and the Senior Secured
Note Documents constitute 'Obligations' under and as defined in the
Senior Secured Credit Facility Documents.
As of the Petition Date, the Debtors were lawfully indebted and
liable to the Prepetition Secured Parties in respect of the
obligations under the Senior Secured Debt Documents in the
aggregate outstanding principal amount of not less than
$101,033,412 plus all accrued but unpaid interest, penalties and
fees thereon.
As adequate protection for the Debtors' use of cash collateral, the
Prepetition Secured Parties are granted valid, perfected
replacement security interests in and liens upon all of the DIP
Collateral including all Unencumbered Property and, subject to the
entry of the Final Order, the Avoidance Proceeds, in each case
subject and subordinate only to (i) the DIP Liens and any liens to
which the DIP Liens are junior, including the Senior Liens, if any,
and (ii) the Carve-Out.
The Prepetition Secured Parties are also granted, subject to the
Carve-out, an allowed superpriority administrative expense claim as
provided for in section 507(b) of the Bankruptcy Code.
As further adequate protection, the Debtors are authorized and
directed to pay all reasonable and documented out-of-pocket fees
and expenses, whether incurred before or after the Petition Date.
The Carve-Out is an amount equal to (i) all fees required to be
paid to the clerk of the Court and to the Office of the United
States Trustee under 28 U.S.C. section 1930(a) plus interest at the
statutory rate; plus (ii) all reasonable fees and expenses incurred
by a chapter 7 trustee under section 726(b) of the Bankruptcy Code
in an amount not to exceed $25,000; plus (iii) all accrued and
unpaid hourly fees and expenses to the extent allowed at any time,
earned before or on the day of delivery of the Trigger Notice not
to exceed the amounts set forth on a line item basis in the
Approved Budget of persons or firms retained by the Debtors
pursuant to sections 327, 328 or 363 of the Bankruptcy Code; plus
(iv) all accrued and unpaid hourly fees and expenses to the extent
allowed at any time, earned before or on the day of delivery of the
Trigger Notice not to exceed the amounts set forth on a line item
basis in the Approved Budget of persons or firms retained by any
official committee of unsecured creditors appointed in the Chapter
11 Cases pursuant to section 1103 of the Bankruptcy Code; plus (v)
Allowed Professional Fees incurred after the delivery of the
Trigger Notice in an amount not to exceed $25,000.
The final hearing on the matter is scheduled for June 30, 2021 at 1
p.m.
A copy of the Interim DIP Order and the Debtors' 13-week DIP budget
is available at https://bit.ly/2SXUz9Q from Omni Agent Solutions,
the claims agent. The Debtors project $8.7 million in total
operating receipts and $10.2 million in total operating
disbursements for the period.
About Avadim Health
Avadim Health, Inc., a healthcare and wellness company, develops,
manufactures, and markets topical products for the institutional
care and consumer markets. The company was formerly known as Avadim
Technologies Inc and changed its name to Avadim Health, Inc. in
September 2018. Avadim Health, Inc. was founded in 2007 and is
based in Asheville, North Carolina.
Avadim Health Inc. sought Chapter 11 protection (Bankr. D. Del.
Case No. 21-10883) on June 1, 2021. In the petition signed by CRO
Keith Daniels, Avadim estimated assets of between $10 million and
$50 million and estimated liabilities of between $100 million and
$500 million.
The case is assigned to Judge Craig T. Goldblatt.
Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, is
the Debtor's counsel; and Larry G. Halperin, Esq., at Chapman and
Cutler, LLP.
Counsel for the DIP Agent and the Administrative Agent:
David N. Griffiths, Esq.
Bryan R. Podzius, Esq.
WEIL GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
E-mail: david.griffiths@weil.com
bryan.podzius@weil.com
- and -
Zachary I. Shapiro, Esq.
RICHARDS LAYTON & FINGER P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
E-mail: shapiro@rlf.com
AVAYA HOLDINGS: S&P Raises ICR to 'B+', Outlook Stable
------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Avaya
Holdings Corp. to 'B+' from 'B'.
S&P said, "At the same time, we raised our issue-level rating on
the company's senior secured debt to 'B+' from 'B'. The '3'
recovery rating is unchanged. In addition, we raised our
issue-level rating on the company's senior unsecured debt to 'B-'
from 'CCC+'. The '6' recovery rating is unchanged."
Avaya's investment over the past several years to refresh products,
its RingCentral partnership, and COVID-19's impact on collaboration
technology strategies should provide Avaya opportunities for
sustained revenue growth in the low single digits. Although news
headlines have indicated certain companies will seek to return to
their pre-pandemic office staffing models, the pandemic has changed
many employers' views on remote working. Whether companies choose
to bring workers back to its offices, allow permanent remote
working, or take hybrid approaches, S&P believes the increased
demand for collaboration tools will continue after the pandemic.
While Avaya's scale was in line with other peers assessed as fair,
the uncertainty around timing of when revenue declines would end,
the viability of its products, and whether investments made to
refresh these would be successfully weighed on Avaya's previous
weak business risk profile. S&P said, "We believe these items have
been resolved and now revise our assessment on Avaya to fair. The
RingCentral partnership and other product investments have now
given Avaya a good foothold in the cloud, a growing segment we
viewed as lacking in our 2019 report and that put Avaya at a
disadvantage. We believe the declining revenue in the 24 months
after emerging from bankruptcy was due in part to the lack of a
robust cloud product, with Avaya's small to medium-sized business
(SMB) customers defecting to providers with cloud offerings. On the
other hand, Avaya was able to retain its enterprise customers as
these tend to have on-premise solutions with large infrastructure
investments. Despite the revenue challenges historically, Avaya
continues to be recognized by independent third parties as one of
the leaders/largest providers of both unified communications (UC)
and contact center (CC) technologies. Avaya's ability to support
both public and private clouds, as well as providing an on-premise
subscription model, allows it to address its customers' various
migration strategies and should enable it to compete effectively
across the enterprise and SMB spectrum. The recurring base
continues to grow (March 2021: 66%, March 2020: 64%, March 2019:
59%, March 2018: 58%) as Avaya moves away from its legacy license
and maintenance model. We expect the increased stability in terms
of revenue and EBITDA to further improve over the next 12-24 months
as Avaya continues with this migration."
S&P said, "The stable outlook reflects our view that Avaya will be
able to increase revenue in the low-single digits over the next
12-24 months while maintaining current profitability levels
enabling leverage to remain in the high-4x area.
"We could lower the rating if leverage rose above the 6x area. This
would likely result from larger-than-expected cloud investments or
a more aggressive financial policy regarding shareholder returns or
acquisitions.
"We could raise the rating if leverage improved to the mid-4x area
while increasing its revenue and EBITDA base, with FOCF to debt in
the high single digits. Given our forecasted negative working
capital assumptions and impact on FOCF, an upgrade over the next
12-24 months is unlikely."
BEAR COMMUNICATIONS: Seeks to Hire Hinkle Law as Legal Counsel
--------------------------------------------------------------
Bear Communications, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Kansas to hire Hinkle Law Firm, LLC as
its legal counsel.
The firm's services include:
a. advising the Debtor of its rights, powers and duties in the
operation and management or liquidation of its business and
property;
b. assisting in the negotiation and documentation of financing
agreements, cash collateral orders (if any) and related
transactions;
c. investigating into the nature and validity of liens
asserted against the property of the Debtor, and advising the
Debtor concerning the enforceability of those liens;
d. taking the necessary actions to collect income and assets
in accordance with applicable law and recover property for the
benefit of the Debtor's estate;
e. preparing legal documents and reviewing financial reports
to be filed;
f. preparing responses to pleadings and other legal
documents, which may be filed and served in the Debtor's Chapter 11
case;
g. advising the Debtor in connection with the formulation,
negotiation and promulgation of a Chapter 11 plan; and
h. other legal services necessary to administer the Debtor's
Chapter 11 case.
Hinkle Law Firm will be paid at these rates:
W. Thomas Gilman $325 per hour
Nicholas R. Grillot $275 per hour
Associates $175 per hour
Legal Assistants $125 per hour
The firm received a general retainer from the Debtor's member in
the sum of $125,000.
As disclosed in court filings, Hinkle Law Firm neither holds nor
represents an interest adverse to the Debtor's bankruptcy estate.
The firm can be reached through:
W. Thomas Gilman, Esq.
Nicholas R. Grillot, Esq.
Hinkle Law Firm LLC
1617 N. Waterfront Parkway, Ste. 400
Wichita, KS 67206‐6639
Phone: 316‐267‐2000
Fax: 316‐660‐6522
Email: tgilman@hinklaw.com
ngrillot@hinklaw.com
About Bear Communications
Lawrence, Kan.-based Bear Communications, LLC --
http://www.bearcommunications.net-- is a communications contractor
offering aerial construction, underground construction, splicing,
subscriber drop placement, residential and commercial
installations, residential/commercial wiring, consulting, and
testing services.
Bear Communications filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Kansas Case No.
21-10495) on May 28, 2021. At the time of the filing, the Debtor
disclosed total assets of up to $50 million and total liabilities
of up to $100 million. Judge Dale L. Somers presides over the
case.
W. Thomas Gilman, Esq., at Hinkle Law Firm LLC, represents the
Debtor as legal counsel.
BOY SCOUTS OF AMERICA: Selling Scouting University Property for $2M
-------------------------------------------------------------------
Boy Scouts of America and Delaware BSA, LLC, ask the U.S.
Bankruptcy Court for the District of Delaware to authorize the
private sale of the real property located at 1301 Solana Boulevard,
in Westlake, Texas ("Scouting University Property") to Israel
Bernal for $2.1 million, free and clear of any interests, on the
terms and conditions set forth in the Purchase and Sale Agreement
dated as of May 17, 2021.
A hearing on the Motion is set for June 17, 2021, at 10:00 a.m.
(ET). Then Objection Deadline is June 10, 2021, at 4:00 p.m.
(ET).
The Debtors' proposed chapter 11 plan provides that the BSA
Settlement Trust Contribution will include, among other things, the
BSA's right, title, and interest in and to the Scouting University
Property. The Scouting University Property is a nearly 10,000
square foot building located on approximately 1.72 acres of real
property in Westlake, Texas. Historically, the Scouting University
Property served as a multipurpose facility with traditional offices
alongside large training spaces.
The Debtors ceased operations at the facility prior to the Petition
Date and it has remained vacant since Jan. 3, 2020. They do not
conduct any operations at the Scouting University Property, and
they do not anticipate having any need to use the Scouting
University Property in the future.
In October 2019, the Debtors entered into an exclusive sales
listing agreement with CBRE, Inc. to act as their representative
with respect to the marketing and sale of the Scouting University
Property. Initial marketing efforts began in February 2020. In
connection with its services to the Debtors, CBRE prepared a broker
opinion of value for the Scouting University Property dated as of
Oct. 13, 2020. CBRE recommended an "as is" target price of $1.8
million for the property.
As set forth in the disclosure statement for the Plan, the value of
the Scouting University Property was estimated to be approximately
$1.8 million prior to the Debtors' entry into the Sale Agreement.
Following the dedicated marketing and sale process, the Debtors
entered into an agreement, subject to Court approval, to sell the
Scouting University Property for a purchase price of $2.1 million,
which was $100,000 higher than the Purchaser's initial offer.
Within two Business Days after the Effective Date, the Purchaser
will deliver an earnest money deposit in the amount of $25,000
payable to the Title Company in its capacity as escrow agent.
There are no unexpired leases. The purchase price does not include
a credit bid.
The Sale will yield proceeds of approximately $1,962,000 net of
approximately $138,000 of customary commissions, charges, and fees,
including a 6% brokers' fee shared between CBRE and Henry S. Miller
Brokerage, LLC. The Debtors intend to contribute the proceeds of
the Sale to the Settlement Trust on the Effective Date as a
component of the BSA Settlement Trust Contribution.
Approval of the Sale of the Scouting University Property as a
private sale is appropriate under the circumstances, and the
Debtors do not believe a public auction is necessary to maximize
value.
The relief requested is essential to avoid the potential accrual of
unnecessary administrative expenses. Accordingly, the Debtors
submit that, to the extent that Bankruptcy Rule 6004(h) applies,
ample cause exists to justify a waiver of the 14-day stay.
By the Motion, the Debtors request entry of the Proposed Order: (a)
approving and authorizing the Sale of the Scouting University
Property to the Purchaser, free and clear of any interests in such
property, on the terms and conditions set forth in the Sale
Agreement; and (b) granting related relief.
A copy of the Agreement is available at
https://tinyurl.com/s6cbu6f4 from PacerMonitor.com free of charge.
The Purchaser:
Israel Bernal and/or assigns
804 Port America Place
Grapevine, TX 76051
Telephone: (817) 410-1222
E-mail: bernalhomes@att.net
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 DELAWARE II: Fitch Withdraws 'B' Issuer Default Rating
-------------------------------------------------------------
Fitch Ratings has affirmed and withdrawn the ratings of Brazos
Delaware II, LLC's (Brazos), including the Long-Term Issuer Default
Rating (IDR) at 'B-'and the senior secured rating at 'B-'/'RR4'.
The Rating Outlook is Stable.
The ratings reflect Brazos' improved credit metrics, driven by
volume growth through Brazos' system and recovery in natural gas
and NGL prices. Fitch projects Brazos's leverage to remain below
7.5x and FFO fixed charge coverage above 1.5x in the forecast
years, underpinned by moderate growth in volume and the improved
hub commodity prices and basis differentials in the Permian.
Additionally, Brazos' ratings and Outlook also reflect its adequate
liquidity to meet its debt service requirement and capital needs in
the near term. Fitch expects Brazos to maintain a modest capex
program in 2021 and 2022, and believes that its owners will remain
financially supportive.
Brazos' ratings have been withdrawn for commercial reasons.
KEY RATING DRIVERS
Improving Credit Metrics: Fitch calculated Brazos' YE 2020 leverage
(Total Debt/Operating EBITDA) to be approximately 8.2x, compared to
above 10x at YE 2019. The deleverage was driven by the increase in
volumes during 2H20 and cost reduction efforts. As shut-in volumes
returned to Brazos' system and new well completions resumed,
Brazos' throughput volumes increased in 3Q20 and 4Q20. Brazos' 2020
average wellhead volume grew by ~37% yoy to 347mmcfpd.
Additionally, the recovery in commodity price during 2H20 also
boosted Brazos' cashflow, as Brazos has commodity price exposure
under its fixed price recovery contracts.
Under Fitch's current commodities price deck, Fitch expects
constructive producer activities in 2021 and 2022. The improved
takeaway capacity for natural gas in the Permian should also
provide earnings uplift for Brazos' commodity price sensitive
business, as basis differentials become more favorable than in the
past. Fitch projects Brazos's 2021 average throughput volume to be
above 2020's average. Fitch also notes that Brazos recognized $17.5
million utility credits in 1Q21 that will lower its operating cost
in the near term. Additionally, Brazos also received cash payment
for a contract settlement that will boost liquidity in the near
term and help repay debt under its excess cashflow sweep. Under
Brazos' current capex program, Fitch forecasts Brazos' 2021 and
2022 leverage to average approximately 6.8x (6.4x-6.7x at YE 2021
driven by the EBITDA uplift in 1Q21; 7.2x-7.4x without the uplift),
as Brazos continues to utilize FCF to accomplish debt repayment.
Fitch also expects Brazos will maintain FFO fixed coverage ratio
well above 1.5x in the forecast years.
Volumetric and Customer Concentration Risk: Brazos generates a
large percentage of its cash flow under fixed-fee contracts with a
weighted average of approximately 10 years for its contracts backed
by over 500,000 acres dedicated. Brazos' rating reflects its
operational exposure to volumetric risks associated with the
production and demand for natural gas and NGLs. Fitch notes that
there is still a backlog of DUCs (Drilled but Uncompleted)
inventory under Brazos' dedicated acreage. Brazos' near-term volume
growth will continue to rely on the DUCs inventory under Brazos'
dedicated acreage, as its producer customers continue to complete
their DUCs. However, the waning DUC inventory poses a concern for
Brazos' volume growth in the forecast years, should producer
drilling activities become uninspiring. The maintenance of level
production or slight growth that is significantly driven by
completing DUCs wells would raise a concern that volumes would go
to a level where Brazos would be weakly positioned in its rating
category.
While Brazos is not dependent on a single counterparty for the
majority of its volumes, it does have concentrated customer
exposure with top five producers expected to comprise over 75% of
Brazos' revenue in 2021, a large percentage of which came from
investment-grade customers. There are heightened uncertainties
surrounding future capex allocation by some of Brazos' E&P producer
customers, given the recent consolidation of some of the players,
in Fitch's view.
Mostly Fee-Based Contracts: While Brazos generates a high
percentage of cash flow under fixed fee contracts with its
counterparties, Brazos is exposed to commodity price through its
fixed-price recovery contracts, which account for 15%-20% of net
gas revenue. Under those contracts, in addition to the fixed
gathering and processing fee that Brazos receives, the company
generates revenue from the sales of processed residue gas and
natural gas liquids to downstream markets along with the sales of
condensate recovered while processing the natural gas.
The commodity price exposure was one factor driving lower expected
EBITDA and cashflow volatility in the past. However, the recent
completion and in-service of natural gas pipelines in the Permian
should improve hub commodity prices and basis differentials,
enhancing Brazos' cash flow in the near term.
Size and Competitive Landscape: Brazos' growth is somewhat
inhibited by its scale and scope of operations, given the company
is a small natural gas G&P and crude gathering services provider
that operates predominately in the Southern Delaware region of the
Permian Basin. The company is expected to generate an annual EBITDA
less than $150 million in the near term. Further, given its single
basin focus, Brazos is subject to outsized event risk if there is a
slow-down or long-term disruption of Delaware basin production.
Additionally, competition is a limiting factor that can hamper
Brazos' future growth. In seeking further acreage dedications,
Brazos faces competition from larger midstream companies that can
offer more integrated midstream services, including greater hub
connectivity within the Southern Delaware basin, and downstream
services such as long-haul transport and fractionation. Brazos'
crude gathering business also faces competition from crude trucking
business if producers elect to truck crude barrels instead of using
Brazos' system.
DERIVATION SUMMARY
Brazos' ratings are limited by the company's size and scale of
operations. Brazos is a single basin focused midstream company that
provides natural gas G&P and crude gathering services in the
Permian Basin, particularly in the Southern Delaware basin. Brazos'
future cashflow and deleveraging profile are strongly dependent on
the production ramp from the producers under its dedicated
acreage.
In Fitch's view, relative to Eagleclaw ('B-'/Positive) and Navitas
('B'/Stable), Brazos is smaller in size by EBITDA and dedicated
acreage. Brazos also exhibits weaker leverage metrics in the near
term. Fitch projects Navitas' leverage (Total Debt/Op. EBITDA) to
be in the 6.0x-6.5x range through 2022, and Eagleclaw's leverage to
trend below 6.5x by YE 2022 (vs. Brazos' leverage of above 6.5x at
YE 2022). Additionally, while both Brazos and EagleClaw are exposed
to commodity prices, similar to Navitas, and all lack MVC
contracts, Navitas has a mix of fixed-fee and price floor
contracts, setting a minimum price floor, with less downside risk
to commodity price.
KEY ASSUMPTIONS
-- A Fitch price deck of Henry Hub natural gas prices of $2.75
per thousand cubic feet (mcf) in 2021, 2.45 in 2022, and over
the long term and West Texas Intermediate (WTI) oil prices of
$55 per barrel (bbl) in 2021, $50/bbl in 2022, and $50/bbl in
2023;
-- Average annual production volume by Brazos' customers in
forecast years does not fall below 2020 average volume;
-- No equity contribution needed in the future years;
-- Utility credit recognized in 1Q21 EBITDA calculation; cash
received from acreage dedication settlement;
-- 2021 Capex to be $35 million-$40 million;
-- Deleverage supported by term loan amortization (1% per annum)
and debt repayment under excess cash flow sweep;
-- In its recovery analysis, Fitch utilized a going-concern
approach with a 6x EBITDA multiple, which is in line with
recent reorganization multiples in the energy sector. There
have been a limited number of bankruptcies and reorganizations
within the midstream space. However, the bankruptcies of Azure
Midstream and Southcross Holdco, had multiples between 5x and
7x by Fitch's best estimates. In Fitch's bankruptcy case study
report "Energy, Power and Commodities Bankruptcies Enterprise
Value and Creditor Recoveries," published in April 2019, the
median enterprise valuation exit multiplies for 35 energy
cases available was 6.1x, with a wide range of multiples
observed;
-- The going concern EBITDA of roughly $80 million-$85 million
for Brazos reflects Fitch's view of a sustainable, post
reorganization EBITDA level upon which Fitch bases the
valuation of the company. The GC EBITDA is higher than the
previous model's $75 million, reflecting the stronger EBITDA
forecast for Brazos. As per criteria, the going concern EBITDA
continues to embed some, but not all, of the distress that
caused the default in the first place. Guided by this
requirement, Fitch assumed that on or after 2022 (Fitch WTI
price deck price of $50/barrel) Brazos customers require
moderate their drilling activity in ways that increase
profitability).
RATING SENSITIVITIES
Rating Sensitivities are not applicable, as the ratings have been
withdrawn.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch believes that Brazos will be able to fund
its debt service requirement and capex needs in 2021 using its
internally generated cashflow, as well as its current available
cash of approximately $72.4 million as of March 31, 2021. As of
March 31, 2021, Brazos had $46.5 million available under the $50
million revolving credit facility ($3.5 million LoC). Fitch does
not anticipate additional equity contribution or cure needed for
Brazos in the forecast periods to meet the Debt Service Coverage
Ratio (DSCR) requirement of 1.1x.
The term loan requires a six-month debt service reserve account
(DSRA), as well as a cash flow sweep and mandatory amortization of
1% per annum. The instrument that provides back-up liquidity for
the DSCR directed toward term loan holders is in the form of cash
at the borrower level and LOC issued by a bank. The LOC is written
in favor of the collateral agent. The obligation to repay the LOC
resides at an entity above Brazos. Additionally, Brazos received
additional cash during 1Q20 as a result of a contract settlement,
further boosting its liquidity position.
The sponsor, Morgan Stanley Infrastructure (MSI), has demonstrated
financial support in the previous years, providing additional
equity infusion in 2019 and approving equity infusions in 2020 that
wasn't ultimately needed. Williams Companies ('BBB'/Stable) is also
a 15% co-owner.
ISSUER PROFILE
N/A
SUMMARY OF FINANCIAL ADJUSTMENTS
N/A
BRITT TRUCKING: $15K Cash Sale of 2015 Ford Van to Premiere Okayed
------------------------------------------------------------------
Judge Robert L. Jones of the U.S. Bankruptcy Court for the Northern
District of Texas authorized Britt Trucking Co.'s sale of its 2015
Ford Van to Premier Ford for $15,000 cash.
The Debtor owns, free and clear, the Van.
About Britt Trucking
Britt Trucking Company is a Lamesa, Texas-based company that
operates in the general freight trucking industry.
Britt Trucking Company filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case
No.
21-50031) on March 3, 2021. Larry Price, president, signed the
petition. In the petition, the Debtor disclosed assets of between
$1 million and $10 million and liabilities of the same range.
Judge Robert L. Jones oversees the case.
R. Byrn Bass, Jr., Esq., and Craig, Terrill, Hale & Grantham,
L.L.P. serve as the Debtor's bankruptcy counsel and special
counsel, respectively.
BV GLENDORA: Unsecured Creditors to Recover 10% in 24 Months
------------------------------------------------------------
BV Glendora LLC, a Colorado limited liability company, filed with
the U.S. Bankruptcy Court for the Central District of California an
Original Chapter 11 Plan and corresponding Disclosure Statement on
June 1, 2021.
This is a reorganizing plan. In other words, the Debtor seeks to
accomplish payments under the Plan by a new value contribution and,
in addition to that contribution, periodic payments. The Effective
Date of the proposed Plan is 30 days after the Bankruptcy Court
enters the Order approving the Debtor's chapter 11 plan.
The Debtor shall file a motion to approve post-Petition financing,
wherein Cadence Capital Partners will lend the Debtor sufficient
fund to make payment of post-petition obligations, including
association fees and real property taxes (Cadence is owned by the
Debtor's Manager William R. Rothacker).
Class 1 consists of the secured claim of Los Angeles County
Treasurer and Tax Collector. The Reorganized Debtor shall pay this
claim in full together with 6 percent interest, over 36 months, in
12 quarterly payments of $10,635, commencing 30 days after the
Effective Date.
Class 2 consists of the secured claim of Glendora Plaza Co. The
Reorganized Debtor shall pay the amount of $48,758 with no interest
added in 3 payments.
Class 3 consists of the secured claim of Palo Plesnik and Crystal
Plesnik ("Plesniks"). The Plesniks' claim will be bifurcated
between the secured portion in the amount of $2,835,008 (the
"Secured Portion" which is the value of the Property, less the
claims of senior secured creditors Los Angeles County Treasurer and
Tax Collector and Glendora Plaza Co.), and the remaining unsecured
portion, which will be paid along with other unsecured creditors in
Class 4. The Secured Portion will accrue interest at the rate of
4.75 percent, amortized over 30 years, fully due and payable 84
months.
Class 4 consists of General unsecured claims. The general
unsecured claimants shall be paid a total of 10% of their allowed
claims, paid in 24 equal monthly installments commencing on the
first day of the 60th month after the Effective Date of the Plan,
and paid on the first day of each month thereafter for 23
additional months (for a 24 payments).
Interest holders shall retain prePetition interests.
The Plan will be funded by a $100,000 new value contribution and
financing from Cadence.
A full-text copy of the Disclosure Statement dated June 1, 2021, is
available at https://bit.ly/34RddTz from PacerMonitor.com at no
charge.
Attorneys for the Debtor:
Jeffrey S. Shinbrot, Esq.
Jeffrey S. Shinbrot, APLC
15260 Ventura Blvd., Suite 1200
Sherman Oaks, CA 91403
Telephone: (310) 659-5444
Facsimile: (310) 878-8304
Email: jeffrey@shinbrotfirm.com
About BV Glendora
BV Glendora, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-11627) on March 1,
2021. David B. Runberg, chief financial officer, signed the
petition. In the petition, the Debtor disclosed assets of between
$1 million and $10 million and liabilities of the same range.
Judge Sheri Bluebond oversees the case.
Jeffrey S. Shinbrot, APLC is the Debtor's legal counsel.
CARBONLITE HOLDINGS: Gets Court Okay to Sell Company in Pieces
--------------------------------------------------------------
Jeremy Hill of Bloomberg News reports that plastic recycler
CarbonLite CarbonLite Holdings on Thursday, June 3, 2021, won
conditional bankruptcy court approval to sell its facilities in
Texas, California and Pennsylvania to three separate buyers.
The plastic recycler sold its Riverside, California assets to an
affiliate of investment firm Sterling Group for more than $57.5
million.
CarbonLite sold its Dallas assets to an affiliate of Indorama
Ventures for about $64 million. The company sold its Reading,
Pennsylvania assets to DAK Americas for about $98 million.
Court approval is contingent on changes to agreements discussed in
the hearing and the sales closing.
About CarbonLite Holdings
CarbonLite processes post-consumer recycled polyethylene
terephthalate (rPET) plastic products and produces rPET and
polyethylene terephthalate (PET) beverage and food packaging
products through its two business segments, the Recycling Business
and PinnPack.
CarbonLite Holdings, LLC and 10 of its affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 21-10527) on March 8,
2021. CarbonLite P, LLC, an affiliate, estimated assets of $100
million to $500 million and debt of $50 million to $100 million.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Pachulski Stang Ziehl & Jones LLP as bankruptcy
counsel, Reed Smith LLP as corporate counsel, and Jefferies LLC as
investment banker. Stretto is the claims agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on March 23, 2021. The committee is
represented by Blank Rome, LLP and Hogan Lovells US, LLP.
CARBONYX INC: Creditors Agree with Sunshine's Liquidation Analysis
------------------------------------------------------------------
Frank Rango, Bhavna Patel, River Partners 2012-CBX LLC, C6 Ardmore
Ventures, LLC, Ingo Wagner, and Harmir Realty Co. LP (collectively,
the "Proponents") submitted a Third Amended Combined Chapter 11
Plan of Reorganization and Disclosure Statement for Debtor
Carbonyx, Inc. dated June 1, 2021.
The Proponents believe that this Combined Plan and Disclosure
Statement will accomplish the objectives of chapter 11 and allow
for a successful restructuring and continuation of the Debtor as a
going concern. The Proponents represent at least 96.43% of the
General Unsecured Claims and will vote to accept the Combined Plan
and Disclosure Statement and recommend that all Creditors vote to
accept the Combined Plan and Disclosure Statement.
On May 26, 2021, the Debtor filed a disclosure statement objection
to the Proponents' Second Amended Disclosure Statement. On May 26,
2021, the Chapter 11 Trustee filed an objection to the Proponents
disclosure statement.
On May 27, 2021, Evan L. Shaw and Sunshine Recycling, Inc.
(collectively, the "Sunshine Proponents") filed an objection to the
disclosure statement. Every one of the objections raised by the
Sunshine Proponents goes to the feasibility of the Proponents'
plan. Proponents believe they will be able to prove feasibility at
a hearing on confirmation of the Plan.
On May 27, 2021, Hasmukh Patel filed an objection to the disclosure
statement. Aside from the objection to the lack of a Liquidation
Analysis, every one of Mr. Patel's objections goes to the
feasibility of the Proponents' plan. Proponents believe they will
be able to prove feasibility at a hearing on confirmation of the
Plan.
As of the date of the filing of this Combined Plan and Disclosure
Statement, a total of 8 General Unsecured Claims have been filed,
totaling $35,433,685.29.
Although Proponents' Combined Plan and Disclosure Statement
provides a substantially better return than the plan proposed by
Sunshine Recycling (the "Sunshine Plan"), Proponents are prepared
to adopt the Liquidation Analysis contained in Article V of the
Sunshine Plan. Proponents agree with the Sunshine Proponents that a
Chapter 7 liquidation would likely result in little to no return to
general unsecured creditors. Proponents simply believe that their
Combined Plan and Disclosure Statement provides for a far greater
return to general unsecured creditors than the Sunshine Plan does.
This Combined Plan and Disclosure Statement contemplates the
establishment of the Plan Reserve, to be set up as an escrow
account which shall contain funds sufficient in amount to satisfy
the Administrative Expense Claims, Creditor Cash Redemption Amount,
Professional Fee Claims, Administrative Tax Claims, Secured Claim,
and Other Priority Claims. The Plan Reserve shall also contain an
additional cash to be used to restructure and continue the
operations of the Reorganized Debtor. The Plan Reserve will be
funded by the purchase of Preferred Shares by the Proponents.
All General Unsecured Claims will be paid pursuant to the
Distribution. The Proponents propose payment in full in Cash to
holders of Administrative Expense Claims, Professional Fee Claims,
Administrative Tax Claims, Secured Claim, and Other Priority
Claims.
The Proponents plan to restructure and continue specific business
of the Debtor which will bring value to the Reorganized Debtor and
holders of Claims. Allowed General Unsecured Claims will receive
either: a Pro Rata distribution of shares of Post Reorganization
Equity, or at their option, a Pro Rata distribution of the Creditor
Cash Redemption Amount.
A full-text copy of the Third Amended Combined Plan and Disclosure
Statement dated June 1, 2021, is available at
https://bit.ly/3uO1wrz from PacerMonitor.com at no charge.
Counsel for the Proponents:
Mark A. Platt
State Bar No. 00791453
Frost Brown Todd LLC
Rosewood Court
2101 Cedar Springs Road, Suite 900
Dallas, TX 75201
Telephone: (214) 545-3472
Facsimile: (214) 545-3473
About Carbonyx Inc.
Plano, Texas-based Carbonyx, Inc., filed a Chapter 11 petition
(Bankr. E.D. Tex. Case No. 20-40494) on Feb. 18, 2020. In the
petition signed by Hasmukh Patel, authorized agent, the Debtor was
estimated to have up to $50,000 in assets and $10 million to $50
million in liabilities.
Judge Brenda T. Rhoades oversees the case. Eric A. Liepins, P.C.,
serves as the Debtor's bankruptcy counsel.
On Nov. 10, 2020, Linda Payne was appointed as Chapter 11 trustee
in the Debtor's case. The Trustee is represented by the Law
Offices of Bill F. Payne, PC.
CARBONYX INC: Hasmukh Patel Opposes Hedge Funds' Plan
-----------------------------------------------------
Hasmukh Patel objects to Third Amended Disclosure Statement of
Frank Rango, Bhavna Patel, River Partners 2012-Cbx LLC, C6 Ardmore
Ventures, LLC, Ingo Wagner, And Harmir Realty Co. LP ("Hedge Fund
Proponents") for Debtor Carbonyx, Inc.
Hedge Fund Proponents have amended their Second Amended Disclosure
Statement to include an Exhibit 4 entitled "Partial List of IP". It
is this "Partial List of IP" that forms the core of Hedge Fund
Proponents' Third Amended Disclosure Statement because it is this
"Partial List of IP" that Proponents' propose to market and sell
(?) or license to other companies (?) with the proceeds going to
creditors under their Plan.
Hasmukh Patel points out that the "Partial List of IP" submitted by
Proponents themselves explicitly states "Expire Patent" on each of
the patents listed, indicating that every patent they disclosed is
no longer an existing patent. Instead, all of these expired patents
have entered the public domain. This was intentional by Debtor as
Debtor intentionally abandoned pursing these technologies long
ago.
Moreover, the first two patents listed by Hedge Fund Proponents, to
wit, U.S. Patent Nos. 9,234,700 and 9,310,132, were invented by Dr.
Siddhartha Gaur. Dr Gaur may have licensed these patents to Debtor
by way of a 2005 agreement entitled "Intellectual Property License"
which was executed on September 14, 2005. Therefore, these two
patents, even if they were not expired, would not even be owned by
Debtor and thus could not be marketed by Hedge Fund Proponents.
Finally, Hedge Fund Proponents refer to expired U.S. Patent No.
8,110,169, which had never been licensed to Debtor under the
"Intellectual Property License". In fact, Dr. Siddhartha Gaur
invented the Nox Emissions reduction apparatus and filed for a
patent for himself without having anything to do with Debtor.
Hasmukh Patel prays that the Disclosure Statement be denied until
such time as the Proponents provide the required and requested
information to the creditors and parties in interest, and for such
other relief in law or in equity to which he may be entitled.
A full-text copy of Hasmukh Patel's objection dated June 1, 2021,
is available at https://bit.ly/3geZxqX from PacerMonitor.com at no
charge.
Hasmukh Patel is represented by:
Shawn L. Desai, Managing Attorney
Desai Legal Services PLLC
6450 Maple Road
West Bloomfield, Michigan 48322
Cell: (810)-355-6134
E-mail: Shawn@DesaiLegalServices.com
About Carbonyx Inc.
Plano, Texas-based Carbonyx, Inc., filed a Chapter 11 petition
(Bankr. E.D. Tex. Case No. 20-40494) on Feb. 18, 2020. In the
petition signed by Hasmukh Patel, authorized agent, the Debtor was
estimated to have up to $50,000 in assets and $10 million to $50
million in liabilities.
Judge Brenda T. Rhoades oversees the case. Eric A. Liepins, P.C.,
serves as the Debtor's bankruptcy counsel.
On Nov. 10, 2020, Linda Payne was appointed as Chapter 11 trustee
in the Debtor's case. The Trustee is represented by the Law
Offices of Bill F. Payne, PC.
CARETRUST REIT: S&P Rates New Senior Unsecured Notes 'BB+'
----------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '2'
recovery rating to CTR Partnership L.P. and CareTrust Capital
Corp.'s proposed $400 million senior unsecured notes due 2028. CTR
Partnership L.P. and CareTrust Capital Corp. are wholly owned
subsidiaries of CareTrust REIT Inc. (CTRE), which will act as the
guarantor of the notes. The '2' recovery rating indicates S&P's
expectation for substantial (70%-90%; rounded estimate: 80%)
recovery in the event of a payment default. The 'BB+' issue-level
rating is one notch above its 'BB' long-term issuer credit rating
on CTRE.
The company plans to use the proceeds from these notes to repay the
outstanding balance on its revolving credit facility and refinance
its existing $300 million 5.25% senior unsecured notes due 2025.
On March 10, 2021, S&P Global Ratings raised its issuer credit
rating on CTRE to 'BB' from 'BB-' due to its strong rent
collections and tenant coverage during the pandemic. The stable
outlook reflects our expectation that CTRE will continue to grow
its portfolio in a relatively leverage-neutral manner over the next
year, while exhibiting continued cash flow stability with
immaterial tenant hardships or restructurings. S&P expects the
company's debt to EBITDA to be about 4x as of year-end 2021.
CARLENE V. BEAUCHAMP: $275K Sale of Dumas Homestead Asset Approved
------------------------------------------------------------------
Judge Robert L. Jones of the U.S. Bankruptcy Court for the Northern
District of Texas authorized Carlene Verdie Beauchamp's sale of her
homestead located at 623 Belmont, in Dumas, Texas, to Thomas and
Katie Strohmeier for $275,000.
All valid liens, claims and encumbrances attached to the real
property will be satisfied in order of priority, and prior to any
funds being released to the Debtor.
Any proceeds paid to the Debtor is to be deposited in her DIP bank
account.
Carlene Verdie Beauchamp sought Chapter 11 protection (Bankr. N.D.
Tex. Case No. 20-20270) on Oct. 5, 2020. The Debtor tapped Max
Tarbox, Esq., as counsel.
CASTEX ENERGY: Signs Deal With W&T to Offload Its Chapter 11 Costs
------------------------------------------------------------------
Law360 reports that bankrupt oil and gas driller Castex Energy has
agreed to sell its interests in an onshore drilling well to W&T
Offshore in exchange for the absorption of the well's plugging and
abandonment obligations, according to a motion for approval filed
in Texas Bankruptcy Court.
Castex Energy 2005 Holdco LLC urged U. S. Bankruptcy Judge Marvin
Isgur on Wednesday, June 2, 2021, to greenlight the deal, seeking
to avoid a fight over Chapter 11 plan confirmation for abandoning
an oil well operated by W&T Offshore Inc. According to Castex, the
deal transfers all of its interests in the onshore well at the High
Island Oilfield.
About Castex Energy
Castex Energy Partners, L.P., and its affiliates are engaged in the
exploration, development, production and acquisition of oil and
natural gas properties located in the Gulf of Mexico, state waters
of Louisiana, onshore Louisiana, and onshore Texas.
Castex owns interests in approximately 182 oil, gas, and related
wells, and have estimated proven reserves of 2.3 MMBO (oil and gas
condensate) and 4 BCFE (natural gas). It is also a party to
numerous joint operating agreements, joint development agreements,
exploration agreements, and area of mutual interest agreements, and
own interests in certain fee lands.
Castex Energy Partners, L.P., along with 5 affiliates, sought
Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 17-35835) in
Houston, on Oct. 16, 2017, after reaching terms with lenders of a
restructuring plan that would convert debt into equity. The Plan,
which granted 100% of the equity to holders of RBL secured claims
totaling $400 million, was confirmed Feb. 28, 2018, and Castex
emerged from bankruptcy in March 2018.
On Feb. 26, 2021, Castex Energy Partners, LLC, along with three
affiliates, including Castex Offshore, Inc., returned to Chapter 11
bankruptcy. The lead case is In re Castex Energy 2005 Holdco, LLC
(Bankr. S.D. Tex. Case No. 21-30710).
Castex Energy Partners estimated assets and debt of $100 million to
$500 million as of the bankruptcy filing.
The Hon. David R. Jones oversees the present case.
In the prior case, the Debtors tapped Kelly Hart & Pitre, as
counsel; Paul Hastings LLP, as special counsel; and Alvarez &
Marsal North America, LLC, as restructuring advisor.
In the recent case, the Debtors tapped OKIN ADAMS LLP as general
bankruptcy counsel; and THE CLARO GROUP, LLC, as financial advisor.
THOMPSON & KNIGHT LLP is the special counsel & conflicts counsel.
DONLIN, RECANO & COMPANY, INC., is the claims agent.
CBL & ASSOCIATES: Laredo Outlet Wins Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, has authorized Laredo Outlet Shoppes, LLC, an
additional debtor in the Chapter 11 case of CBL & Associates
Properties Inc. and affiliates, to use cash collateral.
Laredo Outlet Shoppes filed its Chapter 11 petition on May 26,
2021.
As adequate protection for the ability to use the Cash Collateral,
Laredo Outlet will (i) continue to maintain and operate its
property and business in the ordinary course of business, including
the payment of operating expenses, tenant allowances and required
capital expenditures as permitted by the Order and the budget, (ii)
segregate all rents and revenues received from tenants at the
property and all other proceeds from operation of Laredo Outlet's
property after payment of the Property Expenses, and (iii) continue
to use and maintain its current cash management system, including
by requiring all tenant receipts to be deposited into the lockbox
account at U.S. Bank National Association, the agent under that
Construction Loan Agreement, dated as of May 13, 2016.
In accordance with the Budget, Laredo Outlet is authorized to pay
the management fee due the week ending June 5, 2021. The Agent
reserves all rights to contest the payment of any future management
fees at the Final Hearing.
To the extent Laredo Outlet uses Cash Collateral, and solely to the
extent of diminution in value of the Agent's interest in the
Collateral as determined by the Bankruptcy Court, the Agent will be
granted, pursuant to Sections 361(2), 363(e) and 506 of the
Bankruptcy Code, replacement liens on Laredo Outlet's post-petition
acquired assets of the same type, and to the same extent, validity
and priority as the liens held by Agent on all of Laredo Outlet's
assets as of May 26, 2021.
A final hearing on the matter is scheduled for June 22, 2021 at
12:30 p.m.
A copy of the order and Laredo Outlet's 13-week cash flow budget is
available for free at https://bit.ly/3wZ1ZbK from Epiq Corporate
Restructuring, LLC, the claims agent.
Laredo Outlet projects total receipts of $2,149,000 and total
operating disbursements of $1,570,000 by the end of the period.
About CBL & Associates Properties, Inc.
CBL & Associates Properties, Inc. -- http://www.cblproperties.com/
-- is a self-managed, self-administered, fully integrated real
estate investment trust (REIT) that is engaged in the ownership,
development, acquisition, leasing, management and operation of
regional shopping malls, open-air and mixed-use centers, outlet
centers, associated centers, community centers, and office
properties.
CBL's portfolio is comprised of 107 properties totaling 66.7
million square feet across 26 states, including 65 high-quality
enclosed, outlet and open-air retail centers and 8 properties
managed for third parties. It seeks to continuously strengthen its
company and portfolio through active management, aggressive leasing
and profitable reinvestment in its properties.
CBL, CBL & Associates Limited Partnership and four other entities
filed voluntary petitions for reorganization under Chapter 11 of
the U.S. Bankruptcy Code in Houston, Texas, on Nov. 1, 2020 (Bankr.
S.D. Tex. Lead Case No. 20-35226). Another 172 entities sought
bankruptcy protection on November 2, 2020, and CBL/Regency I, LLC
on November 13. Laredo Outlet Shoppes, LLC filed its Chapter 11
petition on May 26, 2021. The cases are jointly administered with
CBL & Associates Properties' case as the lead case.
The Debtors have tapped Weil, Gotshal & Manges LLP as their legal
counsel, Moelis & Company as restructuring advisor and Berkeley
Research Group, LLC, as financial advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
CELTIC CONSTRUCTION: Pioneer Bank Seeks to Prohibit Cash Access
---------------------------------------------------------------
Pioneer Savings Bank, a creditor of Celtic Construction, LLC, asked
the Bankruptcy Court to prohibit the Debtor from using the cash
collateral, or in the alternative, denying the Debtor's request to
use the cash collateral.
Pioneer Bank asserted that it is the Debtor's sole secured
creditor, and that its claim is secured by a mortgage over the
Debtor's sole asset. The mortgage, according to Pioneer Bank, also
included an assignment of rents and leases in Pioneer Bank's
favor.
Pioneer Bank complained that the Debtor has been using the cash
collateral without the Bank's prior consent, and accordingly, asked
the Court to prohibit the Debtor from using the cash collateral.
A copy of the motion is available for free at
https://bit.ly/2SgriHF from PacerMonitor.com.
About Celtic Construction
Celtic Construction, LLC filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No.
21-11075) on March 29, 2021, listing under $1 million in both
assets and liabilities. Sean Whalen, president, signed the
petition.
Judge Jessica E. Price Smith oversees the case.
Jonathan P. Blakely, Esq., serves as the Debtor's legal counsel.
Counsel for lender Pioneer Savings Bank:
Timothy J. Weyls, Jr. Esq.
WEYLS PETERS & CHUPARKOFF, LLC
6505 Rockside Road, Suite 105
Independence, OH 44131
Telephone: (216) 264-4822
Facsimile: (216) 503-4667
Email: TJ@W-PLLC.COM
CHESAPEAKE ENERGY: Court Affirms $11.5 Million Lease Deals
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Law360 reports that a Texas judge has affirmed $11.5 million in
bankruptcy court settlements between Chesapeake Energy Corp. and
Pennsylvania oil and gas leaseholders with underpaid royalty
claims, finding on Thursday, June 3, 2021, that the deals were fair
and reasonable.
In his opinion, U.S. District Judge Lee Rosenthal dismissed an
appeal of the bankruptcy court's approval of the class action
settlements by dissenting leaseholders, rejecting their arguments
that the settlements needed more scrutiny than the bankruptcy court
gave them. "The settlement is their only practical vehicle for any
recovery," he said.
About Chesapeake Energy Corp.
Headquartered in Oklahoma City, Chesapeake Energy Corporation's
(NASDAQ: CHK) operations are focused on discovering and responsibly
developing its large and geographically diverse resource base of
unconventional oil and natural gas assets onshore in the United
States.
Chesapeake Energy and its affiliates sought Chapter 11 protection
(Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after
reaching terms of a Chapter 11 plan of reorganization to eliminate
approximately $7 billion of debt.
The Debtors tapped Kirkland & Ellis LLP as legal counsel, Jackson
Walker LLP as co-counsel and conflicts counsel, Alvarez & Marsal as
restructuring advisor, Rothschild & Co and Intrepid Financial
Partners as financial advisors, and Reevemark as communications
advisor. Epiq Global is the claims agent.
Wachtell, Lipton, Rosen & Katz serves as legal counsel to
Chesapeake Energy's Board of Directors.
MUFG Union Bank, N.A., the DIP facility agent and exit facilities
agent, has tapped Sidley Austin LLP as legal counsel, RPA Advisors
LLC as financial advisor, and Houlihan Lokey Capital Inc. as
investment banker.
Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. serve as legal
counsel to an ad hoc group of first lien last out term loan lenders
while Perella Weinberg Partners and Tudor, Pickering, Holt & Co.
serve as the group's investment bankers.
Franklin Advisers, Inc., has tapped Akin Gump Strauss Hauer & Feld
LLP as legal counsel, FTI Consulting, Inc., as financial advisor,
and Moelis & Company LLC as investment banker.
On July 9, 2020, the Office of the U.S. Trustee appointed a
committee to represent unsecured creditors in Debtors' Chapter 11
cases. The unsecured creditors' committee has tapped Brown Rudnick,
LLP and Norton Rose Fulbright US, LLP as its legal counsel, and
AlixPartners, LLP as its financial advisor.
On July 24, 2020, the bankruptcy watchdog appointed a committee of
royalty owners. The royalty owners' committee is represented by
Forshey & Prostok, LLP.
Chesapeake Energy successfully concluded its restructuring process
and emerged from Chapter 11 after winning confirmation of its
Chapter 11 plan in January 2021. Chesapeake emerged from bankruptcy
with about $3 billion in new financing, a $7 billion reduction in
debt, and $1.7 billion cut from gas processing and pipeline costs.
CHESAPEAKE ENERGY: Court Rules on Venue of Encino Litigation
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Plaintiffs in the case, CTF, Ltd., Ronald E. and Judy L. Carlton,
Richard A. and Catherine A. Carlton, Bruce D. and Catherine B.
Carlton, and Lawrence J. Fechko, Plaintiffs, v. Encino Energy,
L.L.C., and Encino Acquisition Partners, L.L.C., Defendants, v.
Encino Energy, L.L.C. and Encino Acquisition Partners, L.LC.,
Third-Party Plaintiffs, v. Chesapeake Exploration, L.L.C.,
Chesapeake Appalachia, L.L.C., CHK Utica, L.L.C., MC Mineral Co.,
L.L.C., Chesapeake Plan Development Co., L.LC., Chesapeake Energy
Marketing, LLC., Chesapeake Royalty, L.L.C., and MidCon
Compression, LLC., Third-Party Defendants, Adv. No. 21-01021-JDL
(Bankr. W.D. Okla.), are royalty and mineral interest owners and
lessors of oil and gas leases. They seek to have their claims for
breach of those leases against Encino Energy, L.L.C., the assignee
of the lessees, remanded back to state court for trial.
In the state court, Encino has asserted a third-party claim for
indemnification from its assignor of the leases, Chesapeake Energy
Corporation, for any amount for which it might be adjudged liable
to the Plaintiffs.
On March 3, 2021, pursuant to 28 U.S.C. Sec. 1452(a), Chesapeake
filed its Notice of Removal affecting removal of the state court
action, including the Plaintiffs' claims against the assignee and
the assignee's third-party claims against Chesapeake, to the W.D.
Oklahoma Bankruptcy Court in order to have the Court transfer the
case to the United States District Court for the Southern District
of Texas.
Chesapeake and Encino argue that the W.D. Oklahoma Bankruptcy Court
has jurisdiction over the State Court action because the
Plaintiffs' claims against Encino and Encino's third-party claims
against Chesapeake are related to the administration of
Chesapeake's bankruptcy case. Chesapeake also seeks transfer of
this case to the Southern District of Texas where Chesapeake's
bankruptcy is pending.
In response, Plaintiffs assert the Federal Courts lack jurisdiction
over the state law claims made by them against Encino arguing the
claims are not related to the administration of the Chesapeake
bankruptcy by virtue of Encino's claims for indemnification against
Chesapeake. As an alternative to remanding the entire case to State
Court, Plaintiffs ask the W.D. Oklahoma Bankruptcy Court to sever
their action against Encino and remand its claims against Encino so
it can proceed to trial.
Before the W.D. Oklahoma Bankruptcy Court for consideration are
four pleadings of the parties addressing Chesapeake's seeking
transfer of venue:
1. Chesapeake's Third-Party Defendants' Amended Motion for
Entry of an Order Transferring Venue to the United States
Bankruptcy Court for the Southern District of Texas:
2. Plaintiffs' Response in Opposition to Third-Party
Defendants' Amended Motion for Entry of an Order Transferring venue
to the United States Bankruptcy Court for the Southern District of
Texas;
3. Chesapeake's Reply in Support of its Motion to Transfer to
the Houston Bankruptcy Court; and
4. Plaintiffs' Corrected Response in Opposition to Third-Party
Defendants' Amended Motion for Entry of an Order Transferring Venue
to the United States District Court for the Southern District of
Texas.
There are five pleadings related to the Plaintiffs' motion seeking
remand of the case (or severing part of it) back to the State
Court:
1. Plaintiffs' Combined Motion to Abstain, Sever, and Remand;
2. Plaintiffs' Supplement to Plaintiffs' Combined Motion to
Abstain, Sever, and Remand;
3. Encino's Response to Plaintiffs' Combined Motion to
Abstain, Sever, and Remand;
4. Chesapeake's Opposition to Plaintiff's' Combined Motion to
Abstain, Sever, and Remand; and
5. Reply in Support of Plaintiffs' Combined Motion to Abstain,
Sever and Remand.
In her June 2, 2021 Order, available at https://bit.ly/34NQpEg from
Leagle.com, Bankruptcy Judge Janice D. Loyd held that:
1. Plaintiffs' Combined Motion to Abstain, Sever, and Remand
is Granted in Part and Denied in Part, and Chesapeake's Third-Party
Defendants' Amended Motion for Entry of an Order Transferring Venue
to the United States Bankruptcy Court for the Southern District of
Texas is Granted in Part and Denied in Part.
2. The claims of Plaintiffs, CTF, Ltd.; Ronald E. and Judy L.
Carlton; Richard A. and Catherine A. Carlton; Bruce D. and
Catherine B. Carlton; and Lawrence J. Fechko against Defendants,
Encino Energy, L.L.C. and Encino Acquisition Partners, L.L.C., are
severed from the claims of Third-Party Plaintiffs Encino Energy,
L.L.C., and Encino Acquisition Partners, L.L.C., against
Third-Party Defendants Chesapeake Exploration, L.L.C., et al.
3. The claims of Third-Party Plaintiffs Encino Energy, L.L.C.
and Encino Acquisition Partners, L.L C. against Third-Party
Defendants Chesapeake Exploration, L.L.C., et al., are transferred
to the United States District Court for the Southern District of
Texas, for referral to the Bankruptcy Court administering In Re
Chesapeake Energy Corporation, Case No. 20-33233.
4. The claims of Plaintiffs, CTF, Ltd.; Ronald E. and Judy L.
Carlton; Richard A. and Catherine A. Carlton; Bruce D. and
Catherine B. Carlton; and Lawrence J. Fechko, against Defendants,
Encino Energy, L.L.C. and Encino Acquisition Partners, L.L.C. are
remanded to the District Court for Beaver County, Oklahoma, Case
No. CJ-2018-00026-A.
About Chesapeake Energy Corp.
Headquartered in Oklahoma City, Chesapeake Energy Corporation's
(NASDAQ: CHK) operations are focused on discovering and responsibly
developing its large and geographically diverse resource base of
unconventional oil and natural gas assets onshore in the United
States.
Chesapeake Energy and its affiliates sought Chapter 11 protection
(Bankr. S.D. Tex. Lead Case No. 20-33233) on June 28, 2020, after
reaching terms of a Chapter 11 plan of reorganization to eliminate
approximately $7 billion of debt.
The Debtors tapped Kirkland & Ellis LLP as legal counsel, Jackson
Walker LLP as co-counsel and conflicts counsel, Alvarez & Marsal as
restructuring advisor, Rothschild & Co and Intrepid Financial
Partners as financial advisors, and Reevemark as communications
advisor. Epiq Global served as the claims agent.
Wachtell, Lipton, Rosen & Katz serves as legal counsel to
Chesapeake Energy's Board of Directors.
MUFG Union Bank, N.A., the DIP facility agent and exit facilities
agent, tapped Sidley Austin LLP as legal counsel, RPA Advisors LLC
as financial advisor, and Houlihan Lokey Capital Inc. as investment
banker.
Davis Polk & Wardell LLP and Vinson & Elkins L.L.P. served as legal
counsel to an ad hoc group of first lien last out term loan lenders
while Perella Weinberg Partners and Tudor, Pickering, Holt & Co.
served as the group's investment bankers.
Franklin Advisers, Inc., tapped Akin Gump Strauss Hauer & Feld LLP
as legal counsel, FTI Consulting, Inc., as financial advisor, and
Moelis & Company LLC as investment banker.
On July 9, 2020, the Office of the U.S. Trustee appointed a
committee to represent unsecured creditors in Debtors' Chapter 11
cases. The unsecured creditors' committee tapped Brown Rudnick,
LLP and Norton Rose Fulbright US, LLP as its legal counsel, and
AlixPartners, LLP as its financial advisor.
On July 24, 2020, the bankruptcy watchdog appointed a committee of
royalty owners. The royalty owners' committee retained Forshey &
Prostok, LLP.
Chesapeake Energy successfully concluded its restructuring process
and emerged from Chapter 11 after winning confirmation of its
Chapter 11 plan on January 16, 2021. Chesapeake emerged from
bankruptcy with about $3 billion in new financing, a $7 billion
reduction in debt, and $1.7 billion cut from gas processing and
pipeline costs.
CINEMARK USA: Moody's Rates Proposed $765MM Senior Notes 'Caa1'
---------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Cinemark USA,
Inc.'s proposed $765 million 7-year senior notes offering and Ba3
rating to the new senior secured revolving credit facility maturing
2024. Cinemark USA's B3 Corporate Family Rating, B3-PD Probability
of Default Rating, Ba3 senior secured debt ratings, Caa1 senior
unsecured notes ratings and negative outlook remain unchanged.
Net proceeds from the new senior notes will be used to fully redeem
the $755 million 4.875% senior notes due 2023. The new senior notes
will rank pari passu with Cinemark USA's existing senior notes and
contain the same joint and several upstream guarantees on an
unsecured basis from certain Cinemark USA operating subsidiaries.
Cinemark USA amended its bank credit agreement to extend the
maturity of its existing undrawn RCF to November 28, 2024 from
November 28, 2022. Other than the maturity date extension, the
credit agreement retains the same terms, conditions and amended
leverage covenants as before. Cinemark USA is a wholly-owned
subsidiary of Cinemark Holdings, Inc. ("Cinemark" or the "company")
and its ratings derive support from the parent, which is the
financial reporting entity.
Following is a summary of the rating action:
Assignments:
Issuer: Cinemark USA, Inc.
$100 Million Senior Secured Revolving Credit Facility due 2024,
Assigned Ba3 (LGD2)
$765 Million Senior Unsecured Notes due 2028, Assigned Caa1 (LGD5)
The assigned ratings are subject to review of final documentation
and no material change to the size, terms and conditions of the
transaction as advised to Moody's.
RATINGS RATIONALE
Moody's expects that the refinancing transaction will be leverage
neutral since Cinemark's total debt quantum and financial leverage
will remain relatively unchanged with pro forma total debt at March
31, 2021 staying at roughly $2.6 billion on an as-reported basis
(approximately $4.0 billion, on a Moody's adjusted basis).
Cinemark's total debt to EBITDA metric is not meaningful because
the company's LTM EBITDA is negative due to the temporary closure
of most of its theatres for a good part of 2020 arising from the
COVID-19 pandemic. Moody's views the transaction favorably given
the extension of the debt maturities. Upon full extinguishment of
the 4.875% senior notes and existing RCF due 2022, Moody's will
withdraw the ratings.
Cinemark USA's B3 CFR is forward-looking and supported by the
parent's (Cinemark Holdings, Inc.) position as the third largest
movie exhibitor in the US. The rating reflects the company's
materially weakened operating and financial performance, which has
suffered from significant revenue losses during the five-month
forced closure of Cinemark's global theatre circuit from mid-March
to mid-August 2020 due to the coronavirus pandemic. For the twelve
months ended March 31, 2021, Cinemark generated negative EBITDA of
approximately -$435 million on an as-reported adjusted basis or
roughly -$203 million on a Moody's adjusted basis. The CFR captures
the delayed reopening of the company's theatres following repeated
postponement of several theatrical film releases during the summer
months of 2020 and the possibility of further new release delays in
2021. At March 31, 2021, 301 of Cinemark's domestic theatres
(equivalent to 93% of the domestic circuit) and 78 of its Latin
American theatres (equivalent to 39% of the international circuit)
were open and operational showing a limited volume of new releases.
With the expected reopening of major metropolitan cities and
further lifting of theatre capacity limits, Moody's expects
Cinemark's domestic circuit to achieve close to full reopening by
the end of 2021.
Nonetheless, the rating considers Moody's concerns that decisions
by some of the major film studios to: (i) release their films,
including blockbuster titles, on their streaming platforms and in
theatres simultaneously; (ii) shorten the theatrical window for
certain films; and/or (iii) forego wide theatrical release for some
films and instead release them directly to streaming platforms,
will likely depress Cinemark's profits over the next several
quarters and keep financial leverage at an elevated level,
especially given the company's sizable debt raises last year to
boost liquidity. As vaccines are more widely dispersed, new release
volumes rise and capacity restrictions are relaxed, Moody's expects
this will lead to improved attendance levels and better operating
performance on a sequential and year-over-year basis beginning in
Q2 2021, and continue into the traditionally strong summer box
office season.
Following 2020's 81.5% year-over-year decline in North American box
office receipts, Moody's expects receipts to rise this year in the
110% - 135% range, however this will be 50% - 60% below 2019's
receipts of $11.4 billion. Year-to-date through May 2021, North
American receipts and theatrical releases were down roughly 86% and
65%, respectively compared to 2019, according to Box Office Mojo.
Though receipts have lagged releases, both have increased
sequentially each month this year. As more theatres reopen and
capacity restrictions are eased, the 2021/2019 decline in receipts
should improve and converge closer to the decline in releases. An
encouraging sign for continued improvement is evidenced by 2021's
Memorial Day weekend, which produced $97.6 million in receipts that
were 58% below 2019's Memorial Day weekend.
The negative outlook reflects Moody's expectation for lower revenue
and EBITDA this year compared to 2019 (albeit better than 2020)
coupled with weakened liquidity as a result of the temporary
closure of roughly 28% of Cinemark's global theatre circuit,
seating capacity restrictions and weak moviegoer attendance at
reopened theatres, as well secular attendance challenges facing the
theatre industry. It also incorporates the numerous uncertainties
from COVID-19 related to the social considerations, changing
consumer preferences for viewing new releases and economic impact
on Cinemark's cash flows, especially if film studios continue to
postpone new releases of their movies or seek alternative
distribution methods. For example, studios could increasingly
release movies simultaneously to streaming platforms or much sooner
than previously, or avoid theatrical release altogether. The
negative outlook embeds Moody's view that Cinemark will experience
negative operating cash flows in the first half of 2021 and
potentially for part of the second half of 2021 or until vaccines
are more widely administered globally despite the company's efforts
to reduce operating expenses, which include $65.2 million of
deferred lease payments negotiated with landlords.
Cinemark's SGL-3 Speculative Grade Liquidity rating reflects
Moody's expectation for continued adequate liquidity over the next
twelve months. Moody's projects negative free cash flow generation
in 2021. This is chiefly due to EBITDA shortfalls and negative
operating cash flow primarily in H1 2021 resulting from theatre
closures, as well as seating capacity restrictions and weak
moviegoer attendance for theatres that are currently open or will
reopen later this year. It also results from Cinemark's increased
interest expense burden arising from its leveraged balance sheet.
The company's current cash burn is roughly $155 million per quarter
($52 million per month).
Cash balances at March 31, 2021 were $512.8 million. Cinemark
believes its cash position will allow it to sustain operations
through Q1 2022 if operating results do not improve from current
levels, unopened theatres remained closed indefinitely, and the
company timely receives remaining tax refunds expected later this
year in connection with tax benefits related to NOL carrybacks that
were allowed under the CARES Act. At March 31, 2021, Cinemark had a
current income tax receivable totaling $174.7 million. Subsequent
to Q1 2021, the company received approximately $136.8 million in
cash tax refunds associated with this income tax receivable.
Nonetheless, Moody's is concerned that Cinemark's liquidity could
be exhausted by early 2022 if it is unable to reopen its remaining
theatres and/or future moviegoer attendance fails to rebound
sharply, which would force the company to raise cash via additional
debt issuance, potentially pressuring ratings. If fully drawn, the
$100 million RCF could provide up to two additional months of
liquidity at Cinemark's current cash burn rate.
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
corporate assets arising from the current weakness in US and
overseas economic activity and gradual recovery over 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 rating outlook could be revised to stable if Cinemark reopens
its remaining closed theatres in 2021 (especially in major
metropolitan cities), attendance revives to profitable levels and
the company returns to positive operating cash flow. Over time, an
upgrade could occur if Cinemark experiences positive growth in box
office attendance, stable-to-improving market share, higher EBITDA
and margins, and enhanced liquidity, and exhibits prudent financial
policies that translate into an improved credit profile. An upgrade
would also be considered if financial leverage as measured by total
debt to EBITDA was sustained below 6x (Moody's adjusted) and
positive free cash flow as a percentage of total debt improved to
the 2% area (Moody's adjusted).
Ratings could be downgraded if there was: (i) prolonged closure of
Cinemark's remaining unopened cinemas and/or delays in lifting
seating capacity restrictions or poor attendance levels at reopened
theatres leading to a longer-than-expected cash burn period, an
exhaustion of the company's liquidity resources or an inability to
access additional sources of liquidity to cover cash outlays; (ii)
poor execution on reducing or managing operating expenses; or (iii)
limited prospects for operating performance recovery in 2021. A
downgrade could also be considered if total debt to EBITDA was
sustained above 7.5x (Moody's adjusted) or free cash flow
generation will likely remain negative on a sustained basis.
Headquartered in Plano, Texas, Cinemark USA, Inc. is a wholly-owned
subsidiary of Cinemark Holdings, Inc., a leading movie exhibitor
that operates 523 theatres and 5,872 screens worldwide with 325
theatres and 4,436 screens in the US across 42 states and 198
theatres and 1,436 screens across 15 countries in Latin America.
Revenue totaled approximately $257 million for the twelve months
ended March 31, 2021.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
CINEMARK USA: S&P Rates New $765MM Senior Unsecured Notes 'B'
-------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '4'
recovery rating to the proposed $765 million senior unsecured notes
due 2028 issued by U.S. theater operator Cinemark Holdings Inc.'s
operating subsidiary Cinemark USA Inc. The '4' recovery rating
indicates its expectation for average recovery (30%-50%; rounded
estimate: 45%) for lenders in the event of a payment default. The
company will use the proceeds from these notes to refinance its
existing $755 million senior unsecured notes due 2023. Separately,
Cinemark has announced that it extended the maturity of its
revolver to 2024 from 2022.
S&P's 'B' issuer credit rating and negative outlook on Cinemark USA
are unaffected because the transaction is leverage neutral, reduces
its near-term refinancing risk, and S&P does not expect it to have
a material effect on the company's interest burden.
CLOUDERA INC: S&P Places BB- (sf) ICR on CreditWatch Negative
-------------------------------------------------------------
S&P Global Ratings placed its 'BB-' rating on Cloudera Inc.'s, a
U.S.-based software provider for big data and analytics, secured
debt on CreditWatch with negative implications.
S&P will resolve the CreditWatch negative placement once it has
clarity on the new capital structure post-transaction and after the
company has laid forth its operating strategy and any cost savings
plan.
The CreditWatch placement follows Cloudera's June 1 announcement
that it will be taken private by KKR & Co. and Clayton Dubilier &
Rice LLC. S&P said, "While the company has yet to announce its new
capital structure, we believe there is a high likelihood that the
private equity firms will introduce more debt and operate at a
higher leverage than the current high 3x. We will continue to
monitor the details surrounding Cloudera's proposed take-private
transaction as well as the company's operating performance. Since
the company will become a private entity, we will evaluate any
changes to its financial policies--such as long-term leverage
targets, appetite for dividend payments, and its acquisition
policy."
Cloudera's rating reflects its leverage in the high-3x area as of
March 31, 2021, solid historical top-line growth, highly recurring
revenue profile, and improving profitability. S&P expects revenue
to increase by the high-single-digit percentages over the next 12
months, driven by increasing subscriptions from an established
client base and continued adoption of its CDP Public and Private
Cloud solutions
Credit Watch
S&P will resolve the CreditWatch negative placement once it has
clarity on the new capital structure post-transaction and after the
company has laid forth its operating strategy and any cost savings
plan.
CMC II: Sets Bid Procedures for Sale of Manager & Remaining Assets
------------------------------------------------------------------
Judge John T. Dorsey of the U.S. Bankrupt Court for the District of
Delaware authorized the bidding procedures proposed by CMC II, LLC,
and affiliates in connection with the auction sale of substantially
all their assets, including the assets of Debtor CMC II and certain
of the Debtors' other non-operational assets, including potential
claims and causes of action of the Debtors ("Manager and Remaining
Assets").
The Manager and Remaining Assets Sale Notice are approved.
The Debtors shall, within three business days after the entry of
the Order serve a copy of the Sale Notice and the Order upon the
Sale Notice Parties.
Within seven days of the Service Date or as soon as practicable
thereafter, the Debtors may, but will not be required to, publish
notice of the proposed Sale, substantially in the form of the Sale
Notice, once in the national edition of The Wall Street Journal,
The New York Times, USA Today, or another publication of similar
circulation or in a local or trade publication, as determined by
the Debtors. The Debtors submit that such Publication Notice will
be sufficient and proper notice of any Sale to any other interested
parties whose identities are unknown to the Debtors.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: July 19, 2021, at 5:00 p.m. (ET)
b. Initial Bid: Each Bid must clearly set forth the amount of
the total consideration to be provided to the Debtors, including
and identifying separately any cash and non-cash components. Any
Bid providing for a non-cash component must be accompanied by
either cash or a credit bid of the DIP Obligations in the amount of
at least $3 million. Each Bid must provide for a Purchase Price
equal to or greater than the Purchase Price set forth in the
Manager and Remaining Assets Stalking Horse Purchase Agreement,
plus (y) the minimum overbid amount of $100,000.
c. Deposit: 10% of the cash consideration of the Bid Value
d. Auction: The Auction, if an auction is necessary, will be
held at 10:00 a.m. (ET) on July 26, 2021. In light of the existing
COVID-19 pandemic, no person or entity will be required to attend
the Auction in person. The Auction will be held by Zoom or other
videoconference platform, and all entities entitled to attend the
Auction, including the Consultation Parties, will receive
instructions on attending the Auction via videoconference on or
before the date of the Auction.
e. Bid Increments: $100,000
f. Sale Hearing: Aug. 3, 2021, at 1:00 p.m. (ET)
g. Sale Objection Deadline: July 23, 2021, at 5:00 p.m. (ET)
h. Holders of claims secured by unavoidable, properly
perfected liens on all or a portion of the Manager and Remaining
Assets (including proceeds thereof) will be permitted, but not
compelled, to credit bid up to the full amount of their secured
claims for any such Asset.
Within one business day after conclusion of the Auction if one is
held, or upon the cancellation of the Auction and Identification of
Successful Bidder, the Debtors will file the Post-Auction Notice
for the Manager and Remaining Assets and will provide a copy of the
same to the contract counterparties.
The Contract Assumption Notice is approved. On or before July 6,
2021, the Debtors will serve the Order and the Contract Assumption
Notice upon each counterparty to the Designated Contracts and its
counsel (if known), with a copy to counsel to the Committee. The
Designated Contract Objection Deadline is (i) July 23, 2021, at
5:00 p.m. (ET), or (ii) 5:00 p.m. (ET) on the date that is seven
calendar days after the date of service of any Supplemental
Contract Assumption Notice in respect of such Designated Contract.
The Adequate Assurance Objection Deadline is July 29, 2021, at
12:00 p.m. (ET).
The Good Faith Deposits of the Qualified Bidders (other than the
Manager and Remaining Assets Stalking Horse Bidder, which is not
required to provide a Good Faith Deposit) will be held in escrow by
the Debtors or their agent, and will not become property of the
Debtors' bankruptcy estates unless and until released from escrow
to the Debtors pursuant to the terms of the applicable escrow
agreement.
Notwithstanding the possible applicability of Bankruptcy Rules
6004, 6006, 7062, or 9014 (or otherwise), the terms and conditions
of the Order will be immediately effective and enforceable.
A copy of the Bidding Procedures is available at
https://tinyurl.com/ryw3epx7 from PacerMonitor.com free of charge.
About CMC II, et al.
CMC II, LLC, 207 Marshall Drive Operations LLC, 803 Oak Street
Operations LLC and three inactive affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 21-10461) on March 1,
2021.
CMC II, LLC, et al., are part of a group of Consulate Health care
corporate affiliates that manage and operate 140 skilled nursing
facilities. CMC II provides management and support services to
approximately 140 SNFs, each of which is operated by an affiliate
of the Debtors under the common ownership of non-Debtor LaVie Care
Centers, LLC, doing business as Consulate Health Care. 207
Marshall Drive Operations LLC operates Marshall Health and
Rehabilitation Center, a 120-bed SNF located in Perry, Florida.
803 Oak Street Operations LLC operates Governor's Creek Health and
Rehabilitation, a 120-bed SNF located in Green Cove Springs,
Florida.
CMC II estimated assets and debt of $100 million to $500 million
as
of the bankruptcy filing.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Chipman Brown Cicero & Cole, LLP, as counsel;
and Alvarez & Marsal North America, LLC as restructuring advisor.
Evans Senior Investments is the Debtors' broker. Stretto is the
claims agent.
CONDUENT INC: S&P Alters Outlook to Negative, Affirms 'B+' ICR
--------------------------------------------------------------
S&P Global Ratings revised the outlook on Florham Park, N.J.-based
business process outsourcer (BPO) Conduent Inc. to negative from
positive to reflect the risk that it could lower the ratings if the
company struggles to refinance or extend its significant 2022 and
2023 debt maturities in a timely manner.
S&P also affirmed the 'B+' issuer credit rating.
S&P said, "We revised the outlook to negative to reflect the risk
that Conduent will be unable to refinance its sizeable 2022 and
2023 maturities in a timely manner. On May 27, 2021, Conduent
decided to postpone its proposed transaction to refinance its
entire capital structure, which includes about $625 million of
outstanding term loan A debt due in December 2022 and about $815
million of term loan B debt due in December 2023. We believe the
company postponed the deal so that it could reconsider its
structure and timing in order to optimize deal terms, net proceeds,
and pricing. However, in our view the company's decision, which was
during a relatively favorable economic environment, increases the
risk that it will have difficulty refinancing in the future if
operating or financial conditions worsen. We believe the company
has a good working relationship with its lenders, and a short-term
maturity extension of the term loan A and revolving credit facility
is possible before they become current. We could lower the ratings
if we believe worsening market conditions or weaker-than-expected
operating performance will limit the company's access to financial
markets. In particular, there could be a downgrade within six
months if the company has not refinanced or extended its December
2022 maturity before it becomes current.
"Nevertheless, Conduent's operating performance is improving. We
believe Conduent's efforts to stabilize revenue and increase
cash-flow generation are succeeding, notwithstanding the
significant headwind associated with the pandemic in its commercial
(52% of 2020 revenues) and transportation (17.3%) segments. For
2021, we forecast modest revenue declines stemming from the lost
California Medicaid contract and reversal of the COVID-related
uplift in the government segment (about $150 million full-year
impact). These factors are partly offset by a return to
pre-COVID-19 volumes and significant growth in new business signed
in 2020. In 2020, the total contract value of new business signings
was over $1.9 billion, nearly double the 2019 level. We believe
this provides some visibility into future growth and expect it will
help the company return to revenue growth in 2022. We also believe
the financial markets could become more receptive to Conduent's
refinancing proposals if its turnaround strategy remains successful
over the next few quarters."
Still, Conduent's multiyear restructuring program is ongoing, and
its efforts to further enhance and modernize products and offerings
to its customers face execution risks. If these efforts do not lead
to continued improvement in client retention and new business
signings, it might be difficult for the company to return to
revenue growth in 2022.
The negative outlook reflects the risk that S&P could lower the
ratings by one or more notches if the company struggles to
refinance or extend its significant 2022 and 2023 debt maturities
in a timely manner.
S&P said, "We could lower our rating on Conduent if the company
does not refinance or extend its December 2022 maturities before
they become current and we believe worsening market conditions or
weaker-than-expected operating performance will limit the company's
access to financial markets. This could happen if the company does
not address its December 2022 maturities within the next six
months.
"We could revise the outlook to stable if the company successfully
refinances and extends the maturities of both its 2022 and 2023
maturities while consistently generating adjusted FOCF to debt of
5%-10%.
"We could also consider a positive outlook revision or raising the
rating to 'BB-' if the company extends its debt maturities well
beyond 2023 and demonstrates consistent organic revenue and EBITDA
growth through the successful execution of its turnaround strategy,
leading us to favorably reassess our view of the business. We could
also raise the rating if the company were to sustain FOCF to debt
at 10%-15%."
CONVERGEONE HOLDINGS: Moody's Alters Outlook on B3 CFR to Stable
----------------------------------------------------------------
Moody's Investors Service affirmed ConvergeOne Holdings, Inc.'s B3
corporate family rating, B3-PD probability of default rating, the
B2 rating on the borrower's senior secured first lien credit
facility, and the Caa2 rating on its senior secured second lien
term loan. The outlook was revised to stable from negative. The
outlook revision reflects Moody's expectation of a recovery in
ConvergeOne's operating performance in the coming year following a
challenging 2020 that was negatively impacted by the ramifications
of the coronavirus outbreak.
Moody's affirmed the following ratings:
Issuer: ConvergeOne Holdings, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Secured First Lien Term Loan due 2026, Affirmed B2 (LGD3)
Senior Secured Second Lien Term Loan due 2027, Affirmed Caa2
(LGD5)
Outlook revised to stable from negative
RATINGS RATIONALE
ConvergeOne's B3 CFR is principally constrained by the company's
elevated financial leverage (Moody's adjusted) of nearly 7.5x
trailing total debt/EBITDA as of March 31, 2021. The issuer's
credit quality is also negatively impacted by ConvergeOne's
considerable revenue reliance on key vendor relationships with
Cisco Systems, Inc. ("Cisco") and Dell Technologies, Inc. ("Dell")
which together comprise over 60% of total product sales (30% of
total pro forma revenue). Moreover, ConvergeOne's concentrated
private equity ownership by affiliates of CVC Capital Partners
("CVC") presents uncertainties relating to corporate governance and
financial strategy. The risk of incremental debt-financed
acquisitions, which have been integral to ConvergeOne's expansion
efforts, could constrain deleveraging efforts. These risks are
somewhat mitigated by the company's solid market position as a
provider of integrated communications solutions and managed IT
services to a diverse base of large enterprise customers.
ConvergeOne's credit profile is also supported by the company's
historically predictable revenue stream with approximately 35%-40%
of the top-line stemming from recurring maintenance and managed
services sales and modest capital expenditure requirements which
should support positive, albeit negligible, free cash flow
generation in 2021.
The B2 rating for ConvergeOne's first lien term loan reflects the
borrower's B3-PD PDR and a loss given default ("LGD") assessment of
LGD3. The first lien loan rating is one notch above the CFR and
takes into account the instrument's junior collateral position
relative to ConvergeOne's unrated asset-based revolving credit
facility which has a superior claim on the company's cash,
receivables, and inventory and its senior ranking to ConvergeOne's
Caa2 rated second lien term loan (LGD5). The B2 ratings for the
first lien term loan reflect a one notch override to the
model-indicated outcome of B3 to offset downward ratings pressure
from the prioritization of a portion of trade payables which would
likely be given priority treatment in a distressed scenario. Any
incremental priority trade payables or incremental debt that is
deemed senior to the first lien term loan could put additional
downward pressure on the term loan rating.
ConvergeOne's adequate liquidity is principally supported by a $60
million pro forma cash balance as of March 31, 2021. Moody's
expects the company to generate modest free cash flow in 2021,
given the anticipated working capital investments in a rebounding
economy. The company's liquidity position is further bolstered by
availability of approximately $105 million under its $250 million
asset-based revolving credit facility (unrated). While the
company's term loans are not subject to financial covenants, the
revolving credit facility has a springing covenant based on a
minimum fixed charge coverage ratio of 1x that ConvergeOne should
be comfortably in compliance with during this period.
The stable ratings outlook reflects Moody's expectation that
ConvergeOne's revenues and EBITDA will expand at a high single
digit percentage level (pro forma for acquisitions) in 2021 as the
company's business benefits from a gradual recovery in end market
demand trends. Based on these projections, Debt/EBITDA (Moody's
adjusted) is expected to contract towards the mid 6x level during
this period.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
While unlikely over the near term, the ratings could be upgraded if
ConvergeOne continues to diversify its supplier base, meaningfully
increases scale while maintaining profit margins, and reduces
adjusted debt to EBITDA to below 6x on a sustained basis.
The ratings could be downgraded if revenue contracts materially
from current levels, sustained free cash flow deficits materialize,
or if the company adopts more aggressive financial policies,
leading to increased debt leverage or expectations for diminished
liquidity.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
ConvergeOne, owned by affiliates of CVC following an LBO in late
2018, is a provider of integrated communications solutions and
managed services. Moody's expects the company to generate sales
exceeding $1.4 billion in 2021.
CORE & MAIN: Moody's Gives (P)Ba3 Rating on New $1.5BB Term Loan
----------------------------------------------------------------
Moody's Investors Service assigned a provisional (P)Ba3 rating to
Core & Main LP's proposed $1.5 billion senior secured first lien
term loan due 2028. All other ratings, including Core & Main's B2
Corporate Family Rating are unchanged and remain on review for
upgrade.
The net proceeds from the proposed term loan, along with expected
proceeds from a recently announced IPO and cash on hand will be
used to redeem Core & Main LP's senior unsecured notes and Core &
Main Holdings, LP's senior unsecured PIK toggle notes.
The following rating was assigned:
Issuer: Core & Main LP
Senior Secured Term Loan due 2028, assigned at (P)Ba3 (LGD4)
RATINGS RATIONALE
The provisional rating on the proposed term loan assumes that the
CFR will be upgraded by two notches to Ba3 from B2 upon execution
of the IPO. Moody's placed all ratings of Core & Main under review
for upgrade on May 28, 2021 following the company's announced IPO.
The (P)Ba3 rating on the proposed term loan is at the same level as
the anticipated rating of the CFR upon execution of the IPO, as it
represents a higher share of the overall capital structure relative
to the company's ABL revolver (unrated).
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The rating review will focus on the successful execution of the IPO
as outlined in the company's S-1 filing, as well as the ultimate
capital structure and expected financial policy of the company on a
go-forward basis. Moody's expects to conclude the review process
shortly after the completion of the proposed IPO and application of
net proceeds to reduce outstanding debt. The planned IPO also
increases the company's financial flexibility through access to
public equity markets, which is credit positive.
Moody's expects the CFR may be upgraded by up to two notches to Ba3
from B2 upon execution of the IPO. A key driver for the potential
upgrade of the CFR is the significant deleveraging event that is
expected to occur as a result of the IPO, resulting in adjusted
debt to EBITDA decreasing to 4x on a pro forma basis from 5.4x for
the twelve month period ended May 2, 2021.
Following are some of the preliminary credit agreement terms, which
remain subject to market acceptance.
As proposed, the new credit facility is expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms include the following:
Incremental Facilities
Incremental debt capacity up to the greater of $400 million and pro
forma EBITDA for the four most recent fiscal quarters, plus
unlimited amounts subject to first lien leverage ratio not to
exceed 3.75x (if pari passu secured).
Amounts up to the greater of $200 million and an amount equal to
50% of pro forma EBITDA for the four most recent fiscal quarters
may be incurred with an earlier maturity date than the initial term
loans.
Unrestricted Subsidiary Asset Transfers
There are no express "blocker" provisions which prohibit the
transfer of specified assets to unrestricted subsidiaries; such
transfers are permitted subject to carve-out capacity and other
conditions.
Guarantee Releases
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.
Subordination/Anti-subordination
There are no express protective provisions prohibiting an
up-tiering transaction.
The proposed terms and the final terms of the credit agreement may
be materially different.
The principal methodology used in this rating was Distribution &
Supply Chain Services Industry published in June 2018.
Core & Main LP, headquartered in Saint Louis, Missouri, is a US
based distributor of water, sewage, drainage, storm water, and fire
protection products. Revenue for the twelve month period ended May
2, 2021 was $3.9 billion.
CORE & MAIN: S&P Places 'B' ICR on Watch Positive on Announced IPO
------------------------------------------------------------------
S&P Global Ratings placed its 'B' issuer credit rating on U.S.
water infrastructure distributor Core & Main L.P. on CreditWatch
with positive implications and assigned its preliminary 'B+'
issue-level rating and '4' recovery rating (rounded estimate: 40%)
to its proposed $1.5 billion term loan B due 2028.
S&P said, "Core & Main will use the IPO proceeds to accelerate its
deleveraging efforts and we now expect its adjusted leverage to
decline to about 3.5x-4.0x. We placed our rating on the company on
CreditWatch because the proposed debt reduction will materially
reduce its adjusted leverage. Core & Main will use proceeds from
the IPO and the new term loan B, along with cash on hand, to retire
its entire capital structure, which comprises the $1.25 billion
outstanding on its term loan B, its $750 million of outstanding
senior notes due 2025, and its $300 million of senior PIK notes due
2024. Pro forma for the proposed debt reduction, we estimate the
company's adjusted debt to EBITDA will improve by nearly two turns
to about 3.8x from 5.6x (as of April 30, 2021, on a trailing
12-month basis)." In addition to refinancing its term loan B, Core
& Main will extend the maturity of its asset-based lending (ABL)
facility to 2026 and upsize the facility to $850 million from $700
million as part of the transaction.
S&P said, "We expect Core & Main to increase its EBITDA over the
next year on an improvement in its end markets, the contributions
from its prior year acquisitions, and its effective pass through of
higher input costs to its customers.We anticipate the company will
benefit from strong volume growth across all of its product lines,
including pipes, valves, and fittings and storm drainage, fire
protection, and meter products. In addition, we forecast the robust
new construction activity in the residential sector, which accounts
for 18% of Core & Main's sales, will provide a supplement to its
growth in municipal and commercial demand over the next year. The
company derives approximately 45% of its revenue from
municipalities, for maintaining their existing water systems or
constructing new ones, and 37% from the commercial end markets. Our
expectation for a 10% increase in Core & Main's revenue for 2021
includes the contributions from its acquisition of R&B (completed
in 2020) as well as inflation in the prices for its commodity-based
products, such as PVC pipe. We expect the company will be able to
pass through its rising commodity costs to its customers and
maintain a stable adjusted EBITDA margin of 10%-11% while expanding
its adjusted EBITDA by the mid-single digit percent area in 2021."
The company will remain majority owned by Clayton, Dubilier & Rice
LLC (CD&R). Following the IPO, Core & Main's existing
private-equity owner CD&R will maintain an ownership stake of more
than 40%. Therefore, S&P continues to view the company as financial
sponsor owned, which incorporates S&P's expectation for an
aggressive financial policy, potentially including leveraging
transactions and dividend distributions. However, if CD&R continues
to divest its equity stake after the IPO and reduces its control
over Core & Main's operations, S&P believes it would lessen this
risk.
S&P said, "We expect to resolve the CreditWatch placement once the
IPO closes and the new capital structure is put in place, which
will occur in the next 90 days. We expect to raise our rating on
Core & Main by one notch to 'B+' and remove it from CreditWatch if
the company completes the IPO and proposed debt reduction such that
its adjusted debt to EBITDA improves to the 3.5x-4.0x range.
Alternatively, we could affirm our rating on Core & Main and remove
it from CreditWatch if the company is unable to complete the IPO
and we expect its adjusted leverage to remain in line with our
previous expectation for the 5x-6x range."
CORPORATE RESOURCE: 2nd Cir. Rejects Staff Management Appeal
------------------------------------------------------------
Staff Management Solutions, LLC, and PeopleScout MSP lost their
appeal from a district court order dated September 1, 2020, which
affirmed the bankruptcy court's order denying Staff Management's
motion to enforce a settlement agreement between Noor Staffing
Group, LLC and the Chapter 11 trustee of Corporate Resource
Development, Inc.
The U.S. Court of Appeals for the Second Circuit held that the
district court did not clearly err when concluding that neither the
express terms of the contract nor its surrounding circumstances
demonstrated the intent to make Staff Management a third-party
beneficiary. Therefore, it was not error for the district court to
hold that Staff Management lacked standing to enforce the
settlement agreement.
The appeals court said it need not reach Staff Management's
argument that the settlement agreement bars Noor's claim against
it.
On appeal, Staff Management renewed its arguments that:
(1) the settlement agreement's release of liability provisions
extends to Staff Management because it was a third-party
beneficiary of the agreement, and
(2) the parties to the settlement agreement intended to also
resolve any claim Noor might have against Staff Management in
relation to the approximately $1.2 million in CRD's Wells Fargo
account.
CRD and Noor disputed the ownership of these funds, and the
settlement agreement ultimately resolved the dispute in CRD's
favor.
Staff Management argued the bankruptcy and district courts erred in
concluding that Staff Management did not have prudential standing
to enforce the settlement agreement and that Staff Management could
not use the agreement to bar Noor's lawsuit against it even if it
did have standing.
A copy of the Second Circuit's Summary Order dated June 3, 2021, is
available at https://bit.ly/3vThdPk from Leagle.com.
Staff Management provides temporary staffing and management
services. In order to provide these services, it subcontracts with
other staffing providers. Staff Management entered into a written
Supplier Non-Exclusive Master Service Agreement with CRD, one such
staffing provider, effective Jan. 10, 2015. Pursuant to this
contract, CRD would supply temporary staff to Staff Management's
client, and Staff Management would process and forward payments
from that client to CRD. CRD provided Staff Management with written
authorization to make these payments by electronic transfer to an
account at Wells Fargo. According to the CRD Contract, Staff
Management was to "act as paying agent [to CRD]." Staff Management
thereafter made payments to the Wells Fargo Account.
On Feb. 26, 2015, CRD entered into an Asset Purchase Agreement to
sell its business to Noor. Staff Management then entered into a new
Supplier Non-Exclusive Master Agreement with Noor, effective March
21, 2015. Pursuant to this contract, Noor supplied temporary staff
to Staff Management's client, and Staff Management processed and
forwarded payments from that client to Noor. From May 11, 2015 to
Jan. 27, 2016, Staff Management sent these payments to the Wells
Fargo Account designated in its contract with CRD.
CRD and other affiliates sought Chapter 11 bankruptcy protection on
July 23, 2015. On March 4, 2016, the court-appointed Chapter 11
Trustee commenced an adversary proceeding against Noor seeking to
recover assets fraudulently transferred from CRD without
appropriate consideration and, among other relief, a declaratory
judgment that funds held by Wells Fargo were the property of the
estate, as both the Trustee and Noor made claims to these funds.
Staff Management did not participate in those proceedings.
Eventually, Noor and the Trustee entered into a Settlement
Agreement, which was approved on July 14, 2017.
On Jan. 25, 2019, Noor filed a complaint in the United States
District Court for the Northern District of Illinois seeking to
recover the funds that Staff Management sent to the Wells Fargo
account. Staff Management maintains that Noor's claims have been
released by the Settlement Agreement. On July 15, 2019, Noor filed
a motion seeking to transfer the case to the United States District
Court for the Southern District of New York so that it might be
referred to the Bankruptcy Court.
On August 20, 2019, Staff Management filed a motion to enforce the
settlement agreement with the Bankruptcy Court, arguing that the
Settlement Agreement released it from any liability it may have had
with regards to transferring funds to the Wells Fargo account, and,
incidentally, from any liability in the Illinois action.
The appellate case is, Staff Management Solutions, LLC and
PeopleScout MSP, Appellants, v. Wells Fargo Bank, N.A., Noor
Staffing Group, LLC, and Noor Associates, Inc., Appellees, James S.
Feltman, Chapter 11 Trustee of the Estate of Debtors Corporate
Resource Services, Inc., Trustee-Appellee (2nd Cir.)
Ray Hughes, Esq., at The Hughes Firm, LLC, and Jeffrey Scolaro,
Esq., at Daley Mohan Groble, represent Staff Management.
Bruce W. Bieber, Esq., at Kurzman Eisenberg Corbin & Lever LLP,
represents Noor.
The Second Circuit panel is comprised of Judges Guido Calabresi,
William J. Nardini and Gary S. Katzmann, of the United States Court
of International Trade, sitting by designation.
About Corporate Resource Services
Corporate Resource Services, Inc., was a provider of corporate
employment and human resource solutions, headquartered in New York.
CRS leased its headquarters and does not own any real property.
About 90% of CRS shares were owned by Robert Cassera and the
balance were traded OTC.
As of Dec. 31, 2014, CRS was one of the largest employment staffing
companies in the U.S., providing employment and human resources
solutions for corporations with annual sales of about one billion
dollars. In February 2015, CRS began an orderly wind down of
operations after discovering that TS Employment, Inc., a privately
held company owned by Mr. Cassera, failed to remit tens of millions
of dollars of the Debtors' withholding taxes to taxing
authorities.
TS Employment Inc., a professional employer organization that
provided payroll-related services for CRS, sought Chapter 11
protection (Bankr. S.D.N.Y. Case No. 15-10243) in Manhattan on Feb.
2, 2015. The case was before Judge Martin Glenn. TSE tapped Scott
S. Markowitz, Esq., at Tarter Krinsky & Drogin LLP, in New York, as
counsel. Realization Services Inc. served as the Debtor's
consultant.
CRS and its subsidiaries sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 15-11546) on July 23, 2015, to complete their
orderly wind down of operations. The CRS Debtors' cases were
transferred to New York (Bankr. S.D.N.Y. Lead Case No. 15-12329),
on Aug. 18, 2015, and assigned to Judge Glenn. CRS estimated $10
million to $50 million in assets and $50 million to $100 million in
debt.
The CRS Debtors tapped Gellert Scali Busenkell & Brown, LLC, as
bankruptcy counsel; Wilmer Cutler Pickering Hale & Dorr LLP, as
special counsel; Carter Ledyard & Milburn LLP, as special SEC
counsel; SSG Capital Advisors as financial advisors and investment
bankers; and Rust Omni LLC as claims agent.
James S. Feltman was appointed as Chapter 11 trustee for the CRS
Debtors and for TS Employment. He tapped Togut, Segal & Segal LLP
as counsel; and Jenner & Block LLP and Greenberg Traurig, P.A., as
special counsel; Jeffer Mangels Butler & Mitchell LLP, as special
litigation counsel.
COSMOLEDO LLC: Wins June 10 Solicitation Exclusivity
----------------------------------------------------
Judge Michael E. Wiles of the U.S. Bankruptcy Court for the
Southern District of New York extended the periods within which
Cosmoledo, LLC and its affiliates have the right to file a Plan
through and including June 10, 2021, and to solicit a Plan through
and including July 31, 2021.
On October 21, 2020, the Debtors filed a Motion of the Debtors for
Authorization to Use Funds to Repay Certain Prepetition Obligations
Guaranteed by the Small Business Administration (the "PPP Motion").
Through the PPP Motion, the Debtors seek authority to repay the PPP
Loan because much of the PPP Loan was not utilized for the purposes
required by the CARES Act before filing, with approximately $5.3
million of the PPP Loan remains in the Debtor's control.
The Creditors' Committee has indicated its position that the PPP
Loan is an unsecured obligation that can be used as part of a
pro-rata payout to all creditors through a plan. The Debtors, the
Small Business Administration, the Department of Justice, and the
Creditors' Committee have been negotiating the consensual use of
the remaining PPP Loan Funds under a plan. On May 12, 2021, at the
parties' request, the Court has adjourned any hearing on the PPP
Motion.
The Debtor is unable to propose a fair and complete liquidation
plan without complete resolution of the issues raised in the PPP
Motion. When the First and Second Extension Motions were filed, the
parties believed they would conclude their plan negotiations before
the Exclusive Periods under the respective Extension Orders
expired, but it wasn't achieved.
The Debtors and the Committee continued to believe that a plan of
liquidation, fully supported by the Committee and the SBA, is the
best path to consensual confirmation of any such plan. The Debtors,
the Committee, Santander, and the SBA have reached an agreement on
economic terms that have resolved the PPP Motion, and the Debtors
have now withdrawn the PPP Motion.
However, the required government agencies have not finally approved
the Debtors' proposed plan terms other than those agreed economics.
The Debtor has been informed that the SBA needs more time to get
that final approval, and there can be no certainty of a final
economic agreement without such approval. The Debtors expect final
approval on the language of a proposed plan from the required
government agencies in the near term.
After consultation with the Committee, the Debtors requested the
exclusivity extensions, in an abundance of caution to allow
additional time to secure the required government approval of the
proposed plan terms before the Exclusive Filing Period expires.
The Debtors expect to file a plan soon and wish to provide the SBA
with the time it needs to get requisite approvals and avoid the
additional expense the estate would incur by potentially litigating
competing plans.
Since the Debtors are not operating and have rejected all
outstanding leases of non-residential real property, administrative
expenses during the requested extension period do not present a
significant diminution of the estates.
Now granted, the extensions will provide the Debtors the
opportunity to finalize a consensual plan that provides substantial
benefit to all creditors through a final resolution of the issues
raised in PPP Motion and the filing of a plan with significant
support. The additional time will allow the parties to file a plan
that has the support they believe necessary to provide the best
chance to a consensual confirmation.
A copy of the Debtors' Motion to extend is available at
https://bit.ly/3p619as from Donlinrecano.com.
A copy of the Court's Extension Order is available at
https://bit.ly/3uDd94c from Donlinrecano.com.
About Cosmoledo
Cosmoledo, LLC and affiliates own and operate 16 fine-casual
bakery-cafes in New York City under the trade name "Maison Kayser."
Maison Kayser -- https://maison-kayser-usa.com/ -- a global brand,
is an authentic artisanal French boulangerie that has been doing
business in New York since 2012.
Cosmoledo and its affiliates, including Breadroll, LLC, sought
Chapter 11 protection (Bankr. S.D.N.Y Lead Case No. 20-12117) on
September 10, 2020.
In the petitions signed by CEO Jose Alcalay, Debtors were estimated
to have assets in the range of $10 million to $50 million, and $50
million to $100 million in debt.
Judge Michael E. Wiles oversees the case. The Debtors have tapped
Mintz & Gold LLP as their bankruptcy counsel, and CBIZ Accounting,
Tax, and Advisory of New York LLC as their financial advisor,
accountant, and consultant. Donlin Recano & Co., Inc., is the
claims agent.
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors in the Debtors' Chapter 11 cases. The committee
is represented by Hahn & Hessen LLP.
CRC BROADCASTING: Wins Cash Collateral Access Thru June 30
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona has
authorized CRC Broadcasting Company, Inc. to use cash collateral on
an interim basis through June 30, 2021, pursuant to a one-month
budget, with a 5% variance. The budget provided for $132,000 in
total expenses and $85,000 in gross receipts for June 2021.
The cash collateral is subject to an interest held by Desert
Financial Federal Credit Union resulting from the loans Desert
Financial extended to the Debtor pre-petition:
* Loan number 2900000248 for $725,000 in principal amount,
* Loan number 2900000249 for $90,000 in principal amount,
* Loan number 2900000250 for $200,000 in principal amount,
and
* Loan number 2900000422 for a principal balance of $650,000.
The Debtor also guaranteed and cross-collateralized with its own
assets the debts of sister company, CRC Media West, LLC, also a
Chapter 11 debtor. The guaranty and cross-collateralization of the
Debtor's assets is evidenced by Guaranty Agreements entered in
connection with a Loan number 2900000251 from Desert Financial to
CRC Media. The Debtor owes Desert Financial no less than
$1,477,964 under the loan documents as of February 28, 2020 as a
result of its own primary debts and the debts of CRC Media that it
guaranteed and secured. The Debtor continues to be in default under
the loan documents as of the Petition Date.
As adequate protection for the Debtor's use of cash collateral,
Desert Financial is granted replacement liens on all of the
Debtor's property after the Petition Date to the extent of any
diminution in the value of Desert Financial's pre-petition
collateral from the Petition Date.
As further adequate protection, Desert Financial is granted a
super-priority administrative expense claim under Section 507(b) of
the Bankruptcy Code to the extent the Replacement Liens do not
adequately protect Desert Financial for any diminution of
collateral, including cash collateral.
The Debtor and affiliate CRC Media West, LLC must remit to Desert
Financial at least $8,000 in aggregate on or before July 6.
Crestmark Vendor Finance, a division of MetaBank, has asserted that
it has a perfected, first priority purchase money security interest
in certain specified collateral pursuant to Equipment Finance
Agreement # 153522 entered into between Regents Capital Corporation
and CRC Media West, LLC, which Equipment Finance Agreement was
subsequently assigned by Regents Capital to Crestmark.
The Debtor asserts that in April 2020 it received a $10,000 advance
under the Economic Injury Disaster Loan Emergency Advance program
(however, its loan application was ultimately denied). Desert
Financial asserts that the Advance now constitutes Cash Collateral,
which is disputed by the Debtor. The Debtor proposes to use $5,000
of the Advance to purchase an air conditioner unit discussed
between the Parties.
Desert Financial has consented to the purchase of the air
conditioner unit, saying it constitutes collateral of Desert
Financial. The Debtor may use the remaining $5,000 of the Advance
solely for the expenses set forth in the Budget.
In addition, the Debtor is authorized to use cash collateral as
provided in the Budget for relocation expenses of AM station KQFN
1580 in accordance with the contracts with Kintronic Labs, Inc.,
Max-Gain Systems, Inc., and La Rue Communications.
A copy of the order is available for free at https://bit.ly/3iduKgJ
from PacerMonitor.com.
About CRC Broadcasting Co.
CRC Broadcasting Company, Inc., a broadcast media company based in
Scottsdale, Ariz., filed a voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-02349) on March 6,
2020, listing under $1 million in both assets and liabilities.
Affiliate CRC Media West, LLC also filed for Chapter 11 petition
(Bankr. D. Ariz. Case No. 20-02352) on March 6, 2020, listing under
$1 million in both assets and liabilities.
The cases are jointly administered.
Judge Paul Sala oversees both cases.
Allan D. NewDelman, Esq., at Allan D. NewDelman, P.C., is the
Debtors' legal counsel.
CRED INC: Former Executive Faces Bench Contempt Warrant
-------------------------------------------------------
Lydia Beyoud of Bloomberg Law reports that a federal judge in
Delaware issued a bench warrant against James Alexander, a former
executive of bankrupt crypto company Cred Inc., for contempt of
court.
Judge Maryellen Noreika in the U.S. District Court for the District
of Delaware also ordered the submission of Alexander's transaction
records by June 4, 2021, according to a June 2, 2021 order.
Cred and its unsecured creditors' committee have been trying to
recover the 225 bitcoins Alexander allegedly took while serving as
the San Mateo, Calif.-based company's chief capital officer. That
would be equal to about $8.6 million at current bitcoin exchange
rates.
About Cred Inc.
Cred Inc. is a cryptocurrency platform that accepts loans of
cryptocurrency from non-U.S. persons and pays interest on those
loans. Cred -- https://mycred.io -- is a global financial services
platform serving customers in over 100 countries. Cred is a
licensed lender and allows some borrowers to earn a yield on
cryptocurrency pledged as collateral.
Cred Inc. and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 20-12836) on Nov. 7, 2020. Cred was
estimated to have assets of $50 million to $100 million and
liabilities of $100 million to $500 million as of the bankruptcy
filing.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Paul Hastings LLP as their bankruptcy counsel,
Cousins Law LLC as local counsel, and MACCO Restructuring Group,
LLC as financial advisor. Donlin, Recano & Company, Inc., is the
claims agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on Dec. 3,
2020. The committee tapped McDermott Will & Emery LLLP as counsel
and Dundon Advisers LLC as financial advisor.
Robert Stark is the examiner appointed in the Debtors' cases.
Ashby & Geddes, P.A., and Ankura Consulting Group, LLC, serve as
the examiner's legal counsel and financial advisor, respectively.
CYPRUS MINES: Court Extends Plan Exclusivity Until September 9
--------------------------------------------------------------
At the behest of Debtor Cyprus Mines Corporation, Judge Laurie
Selber Silverstein of the U.S. Bankruptcy Court for the District of
Delaware extended by 90 days the periods in which the Debtor may
file a chapter 11 plan through and including September 9, 2021, and
to solicit acceptances through and including November 8, 2021.
The Debtor's Chapter 11 Case presents complex issues of bankruptcy
law, particularly in the context of mass tort trusts, and involves
hundreds of Talc Personal Injury Claims, as defined in the First
Day Declaration, alleged against the Debtor. The complexity is
compounded by the interrelated nature of this Chapter 11 Case with
the chapter 11 cases of Imerys Talc America, Inc. and its affiliate
debtors, including a pre-petition settlement agreement among the
Debtor, its parent, Imerys, and related parties.
On March 4, 2021, the Office of the United States Trustee for the
District of Delaware appointed the Official Committee of Tort
Claimants.
The Debtor filed this Chapter 11 Case just over three months ago.
The Debtor has addressed early case matters such as obtaining
relief from the Court on administrative issues essential to the
conduct of the case, complied with reporting and other obligations
of a debtor-in-possession, established a deadline for certain
claimants to file proofs of claim, and filed the Plan and the
Disclosure Statement. As outlined in the First Day Declaration, a
critical goal of this Chapter 11 Case is to enable the Debtor to
manage existing and future Talc Personal Injury Claims fairly and
comprehensively.
Achieving this goal requires the participation of certain key
parties, including both the Committee and a future claimants'
representative ("FCR"). Currently, there are three proposed
candidates for FCR, and an evidentiary hearing regarding the
appointment of an FCR was set for June 2, 2021. The Debtor views
the appointment of an FCR as a prerequisite to proceeding toward
confirmation of a plan.
Although the Plan was filed shortly after the Petition Date, the
Debtor will use the additional time to:
(i) obtain the appointment of an FCR;
(ii) allow the Committee and an FCR to complete their due diligence
concerning the Plan and related settlement agreement; and
(iii) negotiate with the Committee and an FCR regarding the terms
of the Plan.
The Debtor has limited operations, and its administrative expenses
largely are limited to professional fees and complying with
appropriate environmental laws. The Debtor is current on its
payments to the U.S. Trustee on account of quarterly fees.
The extensions will now allow the Debtor to continue to work
cooperatively with key constituents toward the goal of confirming
and implementing a consensual plan in the most cost-efficient
manner possible.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3vKAVwz from Primeclerk.com.
A copy of the Court's Extension Order is available at
https://bit.ly/3wOD5LL from Primeclerk.com.
About Cyprus Mines Corporation
Cyprus Mines Corporation is a Delaware corporation and a
wholly-owned subsidiary of Cyprus Amax Minerals Co., which is an
indirect subsidiary of Freeport-McMoRan Inc. It currently has
relatively limited business operations, which include the ownership
of various parcels of real property, certain royalty interests that
generate de minimis revenue (e.g., less than $1,500 in each of the
past two calendar years), and the ownership of an operating
subsidiary that conducts marketing activities.
Cyprus Mines is a predecessor in the interest of Imerys Talc
America, Inc. In June 1992, Cyprus Mines sold its talc-related
assets to RTZ America Inc. (later known as Rio Tinto America, Inc.)
through a two-step process. First, Cyprus Mines transferred its
talc-related assets and liabilities (subject to minor exceptions)
to Cyprus Talc Corporation, a newly formed subsidiary of Cyprus
Mines, according to an Agreement of Transfer and Assumption, dated
June 5, 1992.
Second, Cyprus Mines sold the stock of Cyprus Talc Corporation to
RTZ according to a Stock Purchase Agreement, also dated June 5,
1992 (as amended, the "1992 SPA"). The purchase price was
approximately $79.5 million. Cyprus Talc Corporation was later
renamed Imerys Talc America, Inc. Under the 1992 ATA, the entity
now named Imerys expressly and broadly assumed the talc liabilities
of Cyprus Mines and its former subsidiaries that were in the talc
business.
Cyprus Mines filed for Chapter 11 bankruptcy protection (Bankr. D.
Del. Case No. 21-10398) on February 11, 2021, listing between $10
million and $50 million in assets, and between $1 million and $10
million in liabilities.
The Honorable Laurie Selber Silverstein is the case judge.
The Debtor tapped Reed Smith LLP, led by Kurt F. Gwynne, Esq., as
bankruptcy counsel; Kasowitz Benson Torres, LLP as special
conflicts counsel; and Prime Clerk LLC as claims agent.
James L. Patton, Jr. was appointed as the future claimants'
representative in the Debtor's Chapter 11 case. The FCR tapped
Young Conaway Stargatt & Taylor, LLP as his bankruptcy counsel and
Gilbert, LLP as his special insurance counsel.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of tort claimants on March 4, 2021. The tort committee is
represented by Caplin & Drysdale, Chartered, and Campbell & Levine,
LLC. Province, LLC, and Axlor Consulting, LLC serve as the tort
committee's financial advisor and consultant, respectively.
CYTOSORBENTS CORP: All Four Proposals Passed at Annual Meeting
--------------------------------------------------------------
CytoSorbents Corporation held its 2021 Annual Meeting of
Stockholders on June 1, 2021, at which the stockholders:
1. elected Al W. Kraus, Dr. Edward R. Jones, Michael Bator,
Dr. Phillip P. Chan, and Alan D. Sobel as directors to
serve until the Company's 2021 Annual Meeting of
Stockholders, or until their respective successors shall
have
been duly elected and qualified;
2. approved, on an advisory basis, the compensation of the
Company's named executive officers, disclosed pursuant to
Item 402 of Regulation S-K;
3. recommended, on an advisory basis, a yearly frequency with
which the stockholders of the Company shall have an
advisory
vote on executive compensation, as disclosed pursuant to the
executive compensation disclosure rules of the Securities
and
Exchange Commission; and
4. ratified the appointment of WithumSmith+Brown, PC, as the
Company's independent registered public accounting firm for
the fiscal year ending Dec. 31, 2021.
About CytoSorbents
Based in Monmouth Junction, New Jersey, CytoSorbents Corporation is
engaged in critical care immunotherapy, specializing in blood
purification. Its flagship product, CytoSorb is approved in the
European Union with distribution in 67 countries around the world,
as an extracorporeal cytokine adsorber designed to reduce the
"cytokine storm" or "cytokine release syndrome" that could
otherwise cause massive inflammation, organ failure and death in
common critical illnesses. These are conditions where the risk of
death is extremely high, yet no effective treatments exist.
Cytosorbents reported a net loss of $7.84 million for the year
ended Dec. 31, 2020, compared to a net loss of $19.26 million for
the year ended Dec. 31, 2019. As of March 31, 2021, the Company
had $87.48 million in total assets, $10.22 million in total
liabilities, and $77.26 million in total stockholders' equity.
DAVID K. CROWE: Wins Confirmation of Amended Exit Plan
------------------------------------------------------
Arizona Chief Bankruptcy Judge Brenda Moody Whinery confirmed the
Amended Chapter 11 Plan of Reorganization Dated August 2, 2019
proposed by debtors David K. Crowe and Colleen M. Crowe.
The Court held that the Debtors have met their burden of
establishing that the Plan satisfies the provisions of 11 U.S.C.
Sections 1129(a) and (b). The Court overruled plan confirmation
objections raised by the Official Committee of Unsecured Creditors
and Committee members Tucson Embedded Systems, Inc., Turbine
Powered Technology, LLC and Lindsay Brew.
The Court conducted a contested confirmation hearing on March 30
and 31, 2021. On April 16, the Crowes, the Committee, TPT, and TES
submitted post-trial briefs, and the Court took this matter under
advisement.
A copy of the Court's June 1, 2021 Ruling and Order Regarding Plan
Confirmation is available at https://bit.ly/3wXDqfb from
Leagle.com.
David K. Crowe and Colleen M. Crowe filed their voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz.
Case No. 19-04406) on April 12, 2019. The case was filed due to an
injunction that was impeding his ability to gain employment and/or
customers, and due to the costs of ongoing litigation with various
third parties.
The Crowes scheduled assets worth in excess of $1.2 million, which
assets include their residence in Tucson, Ariz.; three vehicles; a
boat; a Hyster Lift Truck Model H80XM; tools, equipment, and
furniture; savings and checking accounts; a 100% interest in Vida
Gasline LLC; a 100% interest in Arizona Turbine Technology, Inc.; a
100% interest in CE-Systems, Inc.; retirement accounts; various
other personal property; and various claims.
The parties agree that, among other assets, the 100% interests in
Vida, Arizona Turbine, and CE-Systems are non-exempt assets of the
estate.
Arizona Turbine is a debtor in a Chapter 7 bankruptcy case pending
before the Arizona Bankruptcy Court.
DIMAS ACEVEDO, JR: Bid Procedures for Imperial Beach Property OK'd
------------------------------------------------------------------
Judge Louise DeCarl Adler of the U.S. Bankruptcy Court for the
Southern District of California approved the bidding procedures
proposed by Dimas Acevedo, Jr., in connection with the sale of the
real property located at 1361-63 Imperial Beach Blvd., in Imperial
Beach, California, to Muthanna Attisha for $808,000, free of all
liens and claims, subject to overbid.
The motion to approve bidding and auction procedures in connection
with Debtor's Amended Motion to Sell Real Property was scheduled to
be heard on June 3, 2021, at 2:00 p.m.
Dimas Acevedo, Jr. sought Chapter 11 protection (Bankr. S.D. Cal.
Case No. 20-04097) on Aug. 14, 2020. The Debtor tapped Edward
Fetzer, Esq., as counsel.
DISCOVERY DAY: Auction of Bonita Springs Property Set for June 28
-----------------------------------------------------------------
Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle
District of Florida conditionally granted in part Discovery Day
Academy II, Inc.'s bidding procedures in connection with the sale
of a parcel of real property located at 23601 North Commons Drive,
in Bonita Springs, Florida, to Bank OZK for $3,776,871.87 credit
bid, subject to overbid.
The Debtor will proceed with the sale process for the Property as
provided in the Order and the Bid and Sale Procedures. The Bid and
Sale Procedures and the Notice of Sale are approved and will govern
all bids and bid proceedings relating to the Property and the Sale.
The Debtor and its representatives are authorized to take any and
all actions necessary or appropriate to implement such Bid and Sale
Procedures and continued marketing of the Property.
Subject to final Court approval of the Sale of the Property
pursuant to the Bid and Sale Procedures, the Property is
anticipated to be sold free and clear of any liens, claims or
encumbrances.
The Break-Up fee requested in the Sale Motion is withdrawn.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: June 23, 2021, at 4:00 p.m. (EDT)
b. Initial Bid: $3.9 million
c. Deposit: $120,000
d. Auction: An auction of the Property is scheduled for 10:00
a.m. (EDT) on June 28, 202 pursuant to the procedures described in
the Notice of Sale and Auction. The Auction will take place at
6810 International Center Blvd., Fort Myers, FL 33912, with
appearances available via Zoom upon prior request to the Broker and
the Debtor's counsel.
e. Bid Increments: $100,000
f. Sale Hearing: June 30, 2021, at 11:00 a.m. (EDT)
The Court will retain jurisdiction over any matter or dispute
arising from or relating to the implementation of the Order.
Adam Gilbert is directed to serve a copy of the Order on interested
parties who do not receive service by CM/ECF and file a proof of
service within three days of entry of the Order.
A copy of the Bid & Sales Procedures is available at
https://tinyurl.com/esumrv3 from PacerMonitor.com free of charge.
About Discovery Day Academy II
Discovery Day Academy II Inc. is an independent private school
located in Bonita Springs. Founded in 2006, Discovery Day Academy
has developed The Discovery Method, a project-based learning
model,
with an emphasis on children ages two to eight years.
Discovery Day Academy II filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-04183) on May 29, 2020. Discovery Day President Elizabeth A.
Garcia signed the petition. At the time of the filing, the Debtor
disclosed $5,500,000 and $6,050,389 in liabilities.
Judge Caryl E. Delano oversees the case.
The Debtor tapped Dal Lago Law as its legal counsel and Noack and
Co. as its accountant.
DITECH HOLDING: Court Won't Revive $9M Beekman Claim
----------------------------------------------------
James Beekman filed Proof of Claim No. 24609 against Ditech
Financial LLC, seeking $9 million in damages and asserting priority
status under the sections 507(a)(7) and (a)(10) of the Bankruptcy
Code. On February 9, 2021, the Court sustained the Claim Objection
jointly filed by the Ditech Plan Administrator and Consumer Claims
Representative and disallowed and expunged the Claim. Beekman asks
the Court to strike the Decision "for numerous errors," and grant
him a rehearing on the Claim Objection. The Estate Representatives
oppose.
In a June 1 Memorandum Decision and Order, Bankruptcy Judge James
L. Garrity, Jr., held that, construing the Motion in the light most
favorable to the pro se Claimant to state the strongest argument
that it suggests, the Court finds that the Claimant has failed to
state grounds for relief under either Rules 59 or 60 of the Federal
Rules of Civil Procedure. Accordingly, the Court denied the Motion.
A copy of the Order is available at https://bit.ly/2T2EYWx from
Leagle.com.
About Ditech Holding Corporation
Ditech Holding Corporation and its subsidiaries --
http://www.ditechholding.com/-- are independent servicer and
originator of mortgage loans. Based in Fort Washington,
Pennsylvania, the Debtors have approximately 3,300 employees and
service a diverse loan portfolio.
Ditech Holding and certain of its subsidiaries, including Ditech
Financial LLC and Reverse Mortgage Solutions, Inc., filed voluntary
Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 19 10412) on
Feb. 11, 2019, after reaching terms with lenders of a Chapter 11
plan that will reduce debt by $800 million.
The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel,
Houlihan Lokey as investment banker and AlixPartners LLP as
financial advisor. Epiq Bankruptcy Solutions LLC served as claims
and noticing agent.
Kirkland & Ellis LLP and FTI Consulting Inc. served as the
consenting term lenders' legal counsel and financial advisor,
respectively.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors in the Debtors' cases on Feb. 27, 2019. The
creditors' committee tapped Pachulski Stang Ziehl & Jones LLP as
its legal counsel and Goldin Associates, LLC, as its financial
advisor.
On May 2, 2019, the U.S. trustee appointed an official committee of
consumer creditors. The consumers committee tapped Quinn Emanuel
Urquhart & Sullivan, LLP, as counsel and TRS Advisors LLC, as
financial advisor.
On Sept. 26, 2019, the Bankruptcy Court confirmed Ditech's Chapter
11 bankruptcy plan, which became effective four days later.
DOLE PLC: S&P Assigns Preliminary 'BB' ICR, Outlook Stable
----------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BB' issuer credit
rating to Dole plc and its preliminary 'BB+' issue-level rating and
'2' recovery rating to the proposed senior secured credit
facilities. The '2' recovery rating indicates its expectation for
substantial (70%-90%; rounded estimate: 70%) recovery in the event
of a default. S&P will withdraw its ratings on Dole Foods following
the repayment of its debt.
Total Produce plc (TP), Dole Food Co. Inc., and affiliates of
Castle & Cooke Inc. (C&C) entered into a merger agreement in
February 2021 to form a new parent company, which will be named
Dole plc. The merger is conditional upon Dole plc 's IPO and
listing on a major U.S. stock exchange. The merger will form the
largest fresh produce company with over $9 billion of pro forma
2021 sales (excluding joint ventures).
S&P's final ratings will depend on the completion of the
transaction, including Dole plc's IPO. Its current ratings on the
company are preliminary ratings and should therefore not be
construed as evidence of final ratings. TP will acquire the
remaining 55% interest in Dole in three steps. First, TP's current
shareholders will receive shares in Dole plc, a new company
incorporated in Ireland, in exchange for their shares in TP.
Second, upon completion of this share exchange the entities will
merge under Dole plc. Third, Dole Food will combine with a
subsidiary of Dole plc, whereby the C&C shareholders (the owners of
the 55% interest in Dole Food not currently owned by TP) will
receive 17.5% of Dole plc's shares and the remaining 82.5% of Dole
plc's shares will then be held by the shareholders of TP. Upon
completion of these steps, Dole plc will complete an IPO and list
on a major U.S. stock exchange, at which point TP's Dublin and
London listings will be cancelled. The terms of the agreement are
also subject to the IPO achieving a sufficient price such that the
17.5% of the shares held by C&C's shareholders immediately prior to
the offering will have an aggregate value of at least $215 million
(valuation floor of approximately 7.6x 2020 enterprise
value/adjusted EBITDA).
S&P's rating reflects that the transaction will increase the
company's scale and expand its product offerings, global sourcing,
and distribution footprint to create the largest fresh produce
company in the world. It expects Dole plc to have pro forma 2021
adjusted revenue of over $9 billion. The company's product
offerings will range from fresh fruit (bananas comprise about 26%
of its sales while other fruit account for 45%) to fresh vegetables
(29% of sales), including packaged salads. With the flagship Dole
brand, the company will hold the No. 1 position for banana sales in
North America and the No. 3 position in Europe. It will also have
the No. 2 position for fresh pineapple sales in North America and
the No. 3 position in Europe. The Dole brand is also a market
leader in North America for fresh packed vegetables, including a
No. 2 position in value-added salads.
Dole plc will operate TP's asset-light sourcing and
distribution-focused model and Dole Food's brand-focused operating
model, wherein its vertical integration is a competitive advantage.
The company will have an enhanced global sourcing network
(multi-continental sourcing utilizing its own production) that will
provide it with year-round product availability and shipping
capabilities that offer operating flexibility. North America will
account for about 47% of Dole plc's 2020 pro forma sales, followed
by Europe at about 46%, and the rest of the world (Latin America,
the Middle East, and Africa [primarily South Africa]) at about 7%.
We believe the newly combined company will continue to increase it
presence in underpenetrated international markets given its
expanded scale.
S&P said, "Following the IPO, we forecast the company's leverage
will be moderate and expect it to maintain a prudent financial
policy. We view the merger of TP and Dole Food as transformative
because it will create the No. 1 player in the fresh produce
market. The combined company will use a combination of equity
proceeds from its planned IPO and debt to repay most of the
outstanding debt at Dole Foods (about $1.18 billion) and refinance
most of TP's debt (about $0.34 billion). This will lead to S&P
Global Ratings-adjusted pro forma 2021 net leverage of about 2.8x,
which compares with Dole Foods' stand-alone leverage of just over
5x. We believe Dole plc will continue to prioritize strategic
acquisitions to bolster its product offerings in high-growth and
value-added areas or consolidate fragmented markets containing
multiple small- to medium-size regional players. As a public
company with lower debt leverage, we believe Dole plc will have
more financial flexibility and additional sources of liquidity to
execute its growth strategy. We also expect its management team to
take a similar approach to mergers and acquisitions (M&A) through
joint ventures and investments.
"We expect an ongoing, but periodically volatile, rise in the
company's organic sales underpinned by the increased consumption of
fresh and healthy foods. We expect Dole plc to increase its
top-line by about 2.0%-2.5% over the next two years supported by
its presence in attractive growth categories, such as soft fruit
and avocados, and its diversified portfolio with strong leadership
positions in stable categories, such as bananas, pineapples and
fresh vegetables. Still, it competes in the competitive,
commodity-oriented, seasonal, and volatile fresh produce industry
where its operating performance is subject to uncontrollable
factors, such as weather- and disease-related supply shocks,
political risks (including potential trade barriers), and currency
swings. This causes its margins to remain low and subjects it to
volatility in its earnings and cash flow. We expect the company to
continue to reduce the risk in its portfolio by moving away from
more volatile bulk commodity volumes and continuing to increase its
presence in organic produce to take advantage of the rising
consumer preference for healthy and organic foods.
"TP's historically lower EBITDA margins will gradually converge
with industry averages because of the realization of synergies from
the merger. However, we acknowledge that the transaction involved
some integration risk. Dole Foods generated a stand-alone EBITDA
margin of over 6% because of its vertically integrated business
model, branded focus in higher-margin value-added vegetables, and
organic offerings. Historically, we estimate that TP's EBITDA
margins were closer to the 2.5%-3.0% range. Despite the integration
costs we forecast in 2021, we expect that Dole plc will have S&P
Global Ratings-adjusted pro forma EBITDA margins of 5% in 2021 and
2022. We expect the increase in the company's EBITDA in 2021-2022
will be underpinned by Dole Food's generally higher EBITDA margins
and higher utilization rates and the positive effects from its
realization of cost and logistics synergies starting in 2022. We
believe these synergies are largely achievable. Dole plc aims to
achieve about $30 million-$40 million of synergies over the
medium-term. We anticipate the company will realize cost synergies
in its logistics (transport full loads minimizing the cost per unit
through collaboration across inland freight and logistics in North
America) and sourcing (collaborative sourcing from key producing
regions in Chile and South Africa). Dole will primarily realize
revenue synergies in its high-growth product area, such as avocados
and berries, by promoting the Dole brand in underpenetrated
markets. The integration risks are partly mitigated by TP's
two-year history operating as a 45% owner of Dole. In addition, TP
has a longer than 10-year track record of successfully integrating
several bolt-on acquisitions. However, we cannot completely rule
out the execution risk inherent in the transaction given the larger
size of the Dole acquisition and the complexity of operating
different business models. The risks include possibly higher
integration costs than we initially planned and
lower-than-anticipated or delayed realization of revenue and
logistics synergies.
"We expect Dole's pro forma FOCF to be negative in 2021 as its
capital expenditure (capex) remains elevated due to its investments
in its vessel fleet. Dole Food's vertical integration and ownership
of its shipping fleet are key strengths and TP also views these
investments as critical. We expect capex of about $210 million in
2021 and about $170 million in 2022, which includes discretionary
expansion capex. The company's working capital will also be a
moderate outflow of about $30 million-$40 million. This will cause
it to generate negative FOCF in 2021 before rebounding to over $85
million in 2022. We expect this will enable Dole to maintain its
publicly stated dividend policy in line with TP's historical
pay-out ratio.
"The stable outlook reflects our expectation that Dole's operating
performance will remain steady due to its favorable growth outlook
and fairly modest integration risk. We also expect the company to
maintain leverage of just below 3x while steadily improving its
FOCF as its one-time transaction costs and working capital outflows
do not repeat."
S&P could raise its rating on the newly merged company if it
sustains S&P Global Ratings-adjusted FOCF to debt of over 15% and
debt to EBITDA of less than 3x. This could occur if the company:
-- Successfully integrates both platforms, delivers on its planned
synergies, and increases its EBITDA and cash flows;
-- Sustains positive FOCF of well over $50 million; and
-- Maintains its prudent financial policy, including a modest
dividend payout and no large share repurchases.
S&P could lower its rating on Dole if it underperforms its base
case because its operating performance weakens, causing its S&P
Global Ratings-adjusted leverage to rise above 3.5x and its FOCF to
fall below $50 million on a sustained basis. S&P believes this
occur if the company:
-- Is unable to effectively integrate the entities, leading to
delays in achieving its expected synergies or the incurrence of
higher-than-anticipated integration costs;
-- Operating profits deteriorate due to increased competition that
weakens Dole plc's market position, excess supply leads to pricing
pressure, or it is forced to conduct product recalls in North
America; or
-- The company's financial policy became more aggressive than we
currently expect, including sizeable debt-funded M&A or shareholder
remuneration that lead it to sustain elevated leverage levels for a
prolonged period.
DONNELLEY FINANCIAL: S&P Rates Sec. Delayed Draw Term Loan A 'BB'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating and '2'
recovery rating to Donnelley Financial Solutions Inc.'s (DFIN) $200
million senior secured delayed draw term loan A due 2026. At the
same time, S&P lowered its issue-level rating on the company's
revolving credit facility to 'BB' from 'BB+' and revised its
recovery rating to '2' from '1' to reflect the increase in the
amount of secured debt in its expected capital structure. The '2'
recovery rating indicates its expectation for substantial (70%-90%;
rounded estimate: 75%) recovery in the event of a payment default.
DFIN completed an amendment and extension of its existing $300
million senior secured revolving credit facility. The revolving
credit facility matures in 2026 and is pari passu with the term
loan. S&P expects DFIN to use the net proceeds from the term loan,
along with a $38 million draw on its amended and extended revolver,
to fully redeem the $233 million outstanding on its existing senior
unsecured notes due 2024 (soon after they become callable in
October 2021) and pay related breakage costs.
The transaction is leverage neutral, though it extends the
company's debt maturity schedule and provides it with approximately
$14 million of annual interest cost savings. S&P said, "Our 'BB-'
issuer credit rating and stable outlook on DFIN remain unchanged.
The company reported a solid increase in its revenue and EBITDA in
the first quarter of 2021 supported by significant capital markets
transaction activity and we now expect its leverage will decline to
the mid-2x area by year-end 2021 (down from our prior estimate of
about 2.9x). Furthermore, we expect the economic environment to be
largely supportive of DFIN's performance as the U.S. emerges from
the pandemic-related recession, albeit with some uncertainty around
the potential conditions in the capital markets. We would expect
DFIN to materially improve its scale and the diversity of its
revenue source, increase its subscription revenue, and sustain
adjusted leverage of less than 2.5x before we would raise our
rating."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario contemplates a default
occurring in 2025 due to factors such as increased competition,
lower renewal rates, a prolonged downturn in the U.S. economy that
affects the volume of capital markets transactions, and financial
strain from DFIN's debt leverage and debt service requirements.
-- S&P believes the company would reorganize in the event of a
default given the good customer adoption of its technology-enabled
solutions.
-- DFIN's capital structure comprises a $300 million senior
secured revolving credit facility due 2026 and a $200 million
delayed draw term loan due 2026.
-- The senior secured credit facility is guaranteed by the
company's material domestic subsidiaries and benefits from a lien
on substantially all of its U.S. assets and a pledge of up to 65%
of the capital stock of its first-tier foreign subsidiaries. The
secured facility is guaranteed by DFIN's domestic material
subsidiaries.
Simulated default assumptions
-- Simulated year of default: 2025
-- EBITDA at emergence: About $60 million
-- EBITDA multiple: 6.0x
-- Revolving credit facility is 85% drawn at default
-- The subsidiaries that guarantee the secured credit facilities
account for about 90% of S&P's net emergence value.
Simplified waterfall
-- Net enterprise value (after administrative costs): About $345
million
-- Secured revolving credit facility claims: About $435 million
--Recovery expectations: 70%-90% (rounded estimate: 75%)
Note: S&P's debt assumptions at default include six months of
prepetition interest.
EAST END: June 30 Auction of Propane Buses and Other Equipment
--------------------------------------------------------------
Judge Louis A. Scarcella of the U.S. Bankruptcy Court for the
Eastern District of New York authorized the bidding procedures
proposed by East End Bus Lines, Inc., and affiliates in connection
with the sale of 66 propane buses and other miscellaneous equipment
to Durham School Services, L.P., for $4,062,804, cash, subject to
overbid.
Within one business days of entry of the Order, the Debtors will
serve, (i) the Order, (ii) the Bidding Procedures and (iii) the
Motion, upon all the Notice Parties.
The Bid Deadline is June 28, 2021, at 4:30 p.m. (EST).
If any Qualified Bids are received in accordance with the Bidding
Procedures, the Debtors will conduct an Auction on June 30, 2021,
at 9:00 a.m. (EST) at the offices of Weinberg, Gross & Pergament
LLP, 400 Garden City Plaza, Suite 403, Garden City, New York 11530,
or such other location timely communicated to all the
parties-in-interest in attending the Auction. The Debtors will
designate the Successful Bidder and Back-up Bidder at the
conclusion of the Auction.
If no Qualified Bid, other than the Qualified Bids of the Stalking
Horse bidder, is timely received, the Debtors may exercise their
right to cancel the Auction, and is authorized to proceed to seek
approval of Qualified Bid of the Stalking Horse bidder at the Sale
Hearing.
The counsel to the Debtors will file with the Court a Report of
Auction no later than July 6, 2021, which report will indicate,
inter alia, the bidders in attendance at the auction and for each
location, the identity of the Successful Bidder and amount of bid,
and the identity of the Back-up Bidder and amount of bid, if any.
The Sale Hearing is set for July 8, 2021, at 11:00 a.m. (EST).
Objections to the relief to be considered at the Sale Hearing will
be heard by the Court at the Sale Hearing.
Notwithstanding the possible applicability of Bankruptcy Rules
6004(h), 7062, 9014 or otherwise, the terms and conditions of the
Order will be immediately effective and enforceable upon its
entry.
About East End Bus Lines
East End Bus Lines Inc. and its subsidiaries --
https://www.eastendbus.com/ -- offer bus transportation services
for students. East End Bus Lines and Montauk Student Transport
are
dedicated to providing cost-effective solutions for transportation
requirements for private schools, public schools, charter trips,
and camping events. Founded in 2007, East End Bus Lines was later
joined by Montauk Student Transport under the guidance of John
Mensch.
East End Bus Lines and its subsidiaries, namely, Montauk Student
Transport LLC, and Montauk Transit Service LLC, filed voluntary
Chapter 11 petitions (Bankr. E.D. N.Y. Lead Case No. 18-76176) on
Sept. 13, 2018.
In the petitions signed by John Mensch, president, East End Bus
Lines and Montauk Student Transport estimated up to $50,000 in
assets and $10 million to $50 million in liabilities while Montauk
Transit Service estimated up to $50,000 in assets and $1 million
to
$10 million in liabilities.
The Debtors tapped Weinberg, Gross & Pergament LLP as their legal
counsel, and Giambalvo, Stalzer & Company, CPA's, PC as their
accountant. The Debtors hired Littler Mendelson PC, as special
counsel to represent them in labor relations matters.
No official committee of unsecured creditors has been appointed.
EHT US1: $38.2M Sale of DTSLC and FPSJ Hotels to BPEHT Approved
---------------------------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware authorized the sale proposed by EHT US1, Inc.,
and its affiliates of the following to BPEHT LLC pursuant to the
Agreement of Purchase and Sale:
a. 5151 Wiley Post Way, Salt Lake City, LLC's parcel of land
located in Salt Lake City, Utah, as more particularly described on
Schedule A, which, together with all buildings, structures,
fixtures and other improvements on the DTSLC Land (including,
without limitation, any and all hotel rooms, meeting facilities,
conference rooms, parking facilities, restaurants, spa and pool
facilities and other recreational amenities, are commonly referred
to as the "Doubletree Salt Lake City" located at 5151 Wiley Post
Way, Salt Lake City, Utah 84116 ("DTSLC Hotel"), to BPEHT LLC for
$38.2 million cash, plus assumption of liabilities, pursuant to the
Agreement of Purchase and Sale; and
b. Urban Commons 4th Street A, LLC's parcel of land located
in San Jose, California as more particularly described on Schedule
A, which, together with all buildings, structures, fixtures and
other improvements on the FPS Land (including, without limitation,
any and all hotel rooms, meeting facilities, conference rooms,
parking facilities, restaurants, spa and pool facilities and other
recreational amenities, are commonly referred to as the "Four
Points San Jose" located at 1471 North 4th Street, San Jose, Santa
Clara County, California 95112 ("FPSJ Hotel").
The consideration for the purchase of the Assets payable by the
Buyer, or an entity designated by the Buyer in accordance with
Section 14.6 of the Agreement, to the Seller pursuant to the terms
of and subject to the terms and conditions of the Agreement, will
consist of (i) cash in an amount equal to the sum of the allocated
purchase prices set forth on Schedule A-4, and (ii) the assumption
ofthe Assumed Liabilities.
The Sale Hearing was held on May 28, 2021.
The Seller will be authorized to resolve or settle any objections
to the assumption and assignment of Disputed Contracts in
accordance with the terms of the Asset Purchase Agreement,
including with respect to Cure Costs or necessary consents, and
without need for any further order or action from the Court.
Immediately upon the Closing, the DIP Parties (i) will be deemed to
have automatically released, with respect to the Assets, all of the
security interests, liens and pledges (including the DIP Liens and
any other Claims on the DIP Collateral) securing the DIP
Obligations or evidenced by the DIP Documents with no further
action; and (ii) are authorized and directed to take any such
actions as may be reasonably requested by the Debtors to evidence
the release of such security interests, liens and pledges,
including the execution, delivery and filing or recording of such
releases as may be reasonably requested by the Debtors or the Buyer
or as may be required in order to terminate any related financing
statements, mortgages, mechanic's liens, or lis pendens.
In accordance with the Asset Purchase Agreement, prior to the
Closing, the Debtors will provide to the Buyer the pre-closing
statement, which will indicate, among other things, that, at the
Closing, the Buyer will pay to the Debtors (in accordance with the
terms of the Asset Purchase Agreement), the balance of the Purchase
Price remaining due and owing after application of the Deposit
under the Asset Purchase Agreement. Following the payments
provided for, all liens, claims, interests, and encumbrances that
existed prior to Closing in or on the Assets will attach to the
remaining proceeds of the Sale Transaction.
The Debtors are authorized and directed to assume and assign the
Designated Contracts and Designated Leases designated by the Buyer
for assumption at the Closing pursuant to Section 2.5(b) of the
Asset Purchase Agreement, which Designated Contracts and Designated
Leases are set forth on Exhibit B, to the Buyer free and clear of
all Claims.
The Debtors, in consultation with the Buyer, will settle the
objection of a counterparty to a Disputed Contract or will litigate
such objection under such procedures as the Court will approve.
They will not settle a disputed Cure Cost for an amount in excess
of $5,000, individually, and $75,000, in the aggregate, of the
Debtors' estimated Cure Cost for such Contract or Lease with regard
to any Contract or Lease that has been, as of the date of such
settlement, designated as a Designated Contract or Designated
Lease, as applicable, without the express written consent of the
Buyer (acting reasonably).
Notwithstanding the provisions of Bankruptcy Rules 6004(h) and
6006(d) or any applicable provisions of the Local Rules, the Order
will not be stayed after the entry hereof, but will be effective
and enforceable immediately upon entry, and the 14-day stay
provided in Bankruptcy Rules 6004(h) and 6006(d) is expressly
waived and will not apply. The Seller and the Buyer intend to
close the Sale Transaction as soon as practicable. Any party
objecting to the Order must exercise due diligence in filing an
appeal and pursuing a stay within the time prescribed by law and
prior to the Closing, or risk its appeal will be foreclosed as
moot.
The relief requested in the Motion is granted on a final basis as
set forth therein. Any objections to the Motion with respect to
the entry of the Final Order that have not been withdrawn, waived
or settled are hereby denied and overruled on the merits. The
Final Order will become effective immediately upon its entry.
A copy of the Agreement and the Schedule A-4 is available at
https://tinyurl.com/aykuau6f from PacerMonitor.com free of charge.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a
hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust and Eagle Hospitality Business Trust. Based in Singapore,
Eagle H-REIT is established with the principal investment strategy
of investing on a long-term basis in a diversified portfolio of
income-producing real estate, which is used primarily for
hospitality or hospitality-related purposes as well as real
estate-related assets in connection with the foregoing, with an
initial focus on the United States.
EHT US1, Inc. and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021.
EHT US1 estimated $500 million to $1 billion in assets and
liabilities as of the bankruptcy filing.
The Debtors tapped Paul Hastings LLP and Cole Schotz P.C. as their
bankruptcy counsel, FTI Consulting Inc. as restructuring advisor,
and Moelis & Company LLC as investment banker. Rajah & Tann
Singapore LLP and Walkers serve as Singapore Law counsel and
Cayman
Law counsel, respectively. Donlin, Recano & Company, Inc. is the
claims agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on Feb. 4, 2021. The committee tapped Kramer
Levin Naftalis & Frankel, LLP as its bankruptcy counsel, Morris
James LLP as Delaware counsel, and Province, LLC as financial
advisor.
EHT US1: $470-Mil. Sale of All Assets to Madison Phoenix Approved
-----------------------------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware authorized the sale proposed by EHT US1, Inc.,
and its affiliates of substantially all of their Assets described
in the Agreement of Purchase and Sale, dated as of March 7, 2021,
to Madison Phoenix LLC for an aggregate amount equal to $470
million, plus the assumption of the Assumed Liabilities.
The Sale Hearing was held on May 28, 2021.
The Seller will be authorized to resolve or settle any objections
to the assumption and assignment of Disputed Contracts in
accordance with the terms of the Asset Purchase Agreement,
including with respect to Cure Costs or necessary consents, and
without need for any further order or action from the Court.
Immediately upon the Closing, the DIP Parties (i) will be deemed to
have automatically released, with respect to the Assets, all of the
security interests, liens and pledges (including the DIP Liens and
any other Claims on the DIP Collateral) securing the DIP
Obligations or evidenced by the DIP Documents with no further
action; and (ii) are authorized and directed to take any such
actions as may be reasonably requested by the Debtors to evidence
the release of such security interests, liens and pledges,
including the execution, delivery and filing or recording of such
releases as may be reasonably requested by the Debtors or the Buyer
or as may be required in order to terminate any related financing
statements, mortgages, mechanic's liens, or lis pendens.
In accordance with the Asset Purchase Agreement, prior to the
Closing, the Debtors will provide to Buyer the pre-closing
statement, which will indicate, among other things, that, at the
Closing, the Buyer will pay to (i) the DIP Agent, a portion of the
Purchase Price in an amount sufficient to pay the DIP Obligations
in full in cash, and (ii) the Debtors (in accordance with the terms
of the Asset Purchase Agreement), the Purchase Price remaining due
and owing under the Asset Purchase Agreement less the amount paid
to the DIP Agent. Following the payments provided for, all liens,
claims, interests, and encumbrances that existed prior to Closing
in or on the Assets will attach to the remaining proceeds of the
Sale Transaction.
The Debtors are authorized and directed to assume and assign the
Designated Contracts and Designated Leases designated by the Buyer
for assumption at the Closing pursuant to Section 2.5(b) of the
Asset Purchase Agreement, which Designated Contracts and Designated
Leases are set forth on Exhibit B, to the Buyer free and clear of
all Claims.
The Debtors, in consultation with the Buyer, will settle the
objection of a counterparty to a Disputed Contract or will litigate
such objection under such procedures as the Court will approve.
They will not settle a disputed Cure Cost for an amount in excess
of $5,000, individually, and $75,000, in the aggregate, of the
Debtors' estimated Cure Cost for such Contract or Lease with regard
to any Contract or Lease that has been, as of the date of such
settlement, designated as a Designated Contract or Designated
Lease, as applicable, without the express written consent of the
Buyer (acting reasonably).
The Debtors will deposit proceeds from the sale of the HIOR Hotel
in the amount of $225,000 into an interest-bearing escrow account
for the payment of the asserted secured claim of BBMK Contracting,
LLC upon the allowance of such claim. The BBMK Claim will attach
to the funds held in such escrow account and will be paid from such
funds to the extent ultimately allowed. The Debtors and BBMK
reserve all their rights with respect to all issues and disputes
related to the allowance of the BBMK Claim, including the amount,
priority, and secured status thereof. The Debtors and BBMK each
acknowledge that the BBMK Claim is considered a "Claim" as defined
in the Order.
Notwithstanding the provisions of Bankruptcy Rules 6004(h) and
6006(d) or any applicable provisions of the Local Rules, the Order
will not be stayed after the entry hereof, but will be effective
and enforceable immediately upon entry, and the 14-day stay
provided in Bankruptcy Rules 6004(h) and 6006(d) is expressly
waived and will not apply. The Seller and the Buyer intend to
close the Sale Transaction as soon as practicable. Any party
objecting to the Order must exercise due diligence in filing an
appeal and pursuing a stay within the time prescribed by law and
prior to the Closing, or risk its appeal will be foreclosed as
moot.
The relief requested in the Motion is granted on a final basis as
set forth therein. Any objections to the Motion with respect to
the entry of the Final Order that have not been withdrawn, waived
or settled are hereby denied and overruled on the merits. The
Final Order will become effective immediately upon its entry.
A copy of the Agreement and the Exhibits is available at
https://tinyurl.com/ye3enzsx from PacerMonitor.com free of charge.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a
hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust and Eagle Hospitality Business Trust. Based in Singapore,
Eagle H-REIT is established with the principal investment strategy
of investing on a long-term basis in a diversified portfolio of
income-producing real estate, which is used primarily for
hospitality or hospitality-related purposes as well as real
estate-related assets in connection with the foregoing, with an
initial focus on the United States.
EHT US1, Inc. and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021.
EHT US1 estimated $500 million to $1 billion in assets and
liabilities as of the bankruptcy filing.
The Debtors tapped Paul Hastings LLP and Cole Schotz P.C. as their
bankruptcy counsel, FTI Consulting Inc. as restructuring advisor,
and Moelis & Company LLC as investment banker. Rajah & Tann
Singapore LLP and Walkers serve as Singapore Law counsel and
Cayman
Law counsel, respectively. Donlin, Recano & Company, Inc. is the
claims agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on Feb. 4, 2021. The committee tapped Kramer
Levin Naftalis & Frankel, LLP as its bankruptcy counsel, Morris
James LLP as Delaware counsel, and Province, LLC as financial
advisor.
EHT US1: Court Extends Plan Exclusivity Thru August 16
------------------------------------------------------
At the behest of Debtors EHT US1, Inc. and its affiliates, Judge
Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware extended the periods in which the Debtors may
file a chapter 11 plan through and including August 16, 2021, and
to solicit acceptances through and including October 18, 2021.
With the granted extensions, the Debtors will use the additional
time to resolve significant contingencies in their cases before
they can pursue a chapter 11 plan. One of such contingencies
waiting for the general bar date to pass, scheduled on July 15,
2021. Without it, it would be impracticable for the Debtors to
formulate a chapter 11 plan. And given the nature of the sale
process, the Debtors believe that it is likely that an auction will
be held to the sale of some or all of the Debtors' assets during
the month of June 2021.
A copy of the Court's Extension Order is available at
https://bit.ly/3g712HI from Donlinrecano.com.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust and Eagle Hospitality Business Trust. Based in Singapore,
Eagle H-REIT is established with the principal investment strategy
of investing on a long-term basis in a diversified portfolio of
income-producing real estate, which is used primarily for
hospitality or hospitality-related purposes as well as real
estate-related assets in connection with the foregoing, with an
initial focus on the United States.
EHT US1, Inc. and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on January 18, 2021.
EHT US1 estimated $500 million to $1 billion in assets and
liabilities as of the bankruptcy filing.
The Debtors tapped Paul Hastings LLP and Cole Schotz P.C. as their
bankruptcy counsel, FTI Consulting Inc. as restructuring advisor,
and Moelis & Company LLC as investment banker. Rajah & Tann
Singapore LLP and Walkers serve as Singapore Law counsel and Cayman
Law counsel, respectively. Donlin, Recano & Company, Inc. is the
claims agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on Feb. 4, 2021. The committee tapped Kramer
Levin Naftalis & Frankel, LLP as its bankruptcy counsel, Morris
James LLP as Delaware counsel, and Province, LLC, as financial
advisor.
* * *
The Debtors have commenced a sale process aimed at maximizing the
value of the Debtors' assets. On May 28, 2021, the Court entered
four sale orders authorizing the sale of all but one of the
Debtors' hotels for approximately $482 million.
EHT US1: Sale of Sky's Hilton Atlanta Northeast for $38.2M Approved
-------------------------------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware authorized the sale proposed by EHT US1, Inc.,
and its affiliates of Sky Harbor Atlanta Northeast, LLC's parcel of
land located in Norcross, Georgia, as more particularly described
on Schedule A, which, together with all buildings, structures,
fixtures and other improvements on the Land (including, without
limitation, any and all hotel rooms, meeting facilities, conference
rooms, parking facilities, restaurants, spa and pool facilities and
other recreational amenities, are commonly referred to as the
"Hilton Atlanta Northeast" located at 5993 Peachtree Industrial
Boulevard, in Norcross, Georgia, to FullG Capital for $38.2 million
cash, plus assumption of liabilities, pursuant to the Asset
Purchase Agreement.
The Sale Hearing was held on May 28, 2021.
The Seller will be authorized to resolve or settle any objections
to the assumption and assignment of Disputed Contracts in
accordance with the terms of the Asset Purchase Agreement,
including with respect to Cure Costs or necessary consents, and
without need for any further order or action from the Court.
Immediately upon the Closing, the DIP Parties (i) will be deemed to
have automatically released, with respect to the Assets, all of the
security interests, liens and pledges (including the DIP Liens and
any other Claims on the DIP Collateral) securing the DIP
Obligations or evidenced by the DIP Documents with no further
action; and (ii) are authorized and directed to take any such
actions as may be reasonably requested by the Debtors to evidence
the release of such security interests, liens and pledges,
including the execution, delivery and filing or recording of such
releases as may be reasonably requested by the Debtors or the Buyer
or as may be required in order to terminate any related financing
statements, mortgages, mechanic's liens, or lis pendens.
In accordance with the Asset Purchase Agreement, prior to the
Closing, the Debtors will provide to Buyer the pre-closing
statement, which will indicate, among other things, that, at the
Closing, the Buyer will pay to the Debtors (in accordance with the
terms of the Asset Purchase Agreement), the balance of the Purchase
Price remaining due and owing after application of the Deposit
under the Asset Purchase Agreement. Following the payments
provided for, all liens, claims, interests, and encumbrances that
existed prior to Closing in or on the Assets will attach to the
remaining proceeds of the Sale Transaction.
The Debtors are authorized and directed to assume and assign the
Designated Contracts and Designated Leases designated by the Buyer
for assumption at the Closing pursuant to Section 2.5(b) of the
Asset Purchase Agreement, which Designated Contracts and Designated
Leases are set forth on Exhibit B, to the Buyer free and clear of
all Claims.
The Debtors, in consultation with the Buyer, will settle the
objection of a counterparty to a Disputed Contract or will litigate
such objection under such procedures as the Court will approve.
They will not settle a disputed Cure Cost for an amount in excess
of $5,000, individually, and $75,000, in the aggregate, of the
Debtors' estimated Cure Cost for such Contract or Lease with regard
to any Contract or Lease that has been, as of the date of such
settlement, designated as a Designated Contract or Designated
Lease, as applicable, without the express written consent of Buyer
(acting reasonably).
Notwithstanding the provisions of Bankruptcy Rules 6004(h) and
6006(d) or any applicable provisions of the Local Rules, the Order
will not be stayed after the entry hereof, but will be effective
and enforceable immediately upon entry, and the 14-day stay
provided in Bankruptcy Rules 6004(h) and 6006(d) is expressly
waived and will not apply. The Seller and the Buyer intend to
close the Sale Transaction as soon as practicable. Any party
objecting to the Order must exercise due diligence in filing an
appeal and pursuing a stay within the time prescribed by law and
prior to the Closing, or risk its appeal will be foreclosed as
moot.
The relief requested in the Motion is granted on a final basis as
set forth therein. Any objections to the Motion with respect to
the entry of the Final Order that have not been withdrawn, waived
or settled are hereby denied and overruled on the merits. The
Final Order will become effective immediately upon its entry.
A copy of the Agreement and Exhibits is available at
https://tinyurl.com/m5h5dhsc from PacerMonitor.com free of charge.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a
hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust and Eagle Hospitality Business Trust. Based in Singapore,
Eagle H-REIT is established with the principal investment strategy
of investing on a long-term basis in a diversified portfolio of
income-producing real estate, which is used primarily for
hospitality or hospitality-related purposes as well as real
estate-related assets in connection with the foregoing, with an
initial focus on the United States.
EHT US1, Inc. and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021.
EHT US1 estimated $500 million to $1 billion in assets and
liabilities as of the bankruptcy filing.
The Debtors tapped Paul Hastings LLP and Cole Schotz P.C. as their
bankruptcy counsel, FTI Consulting Inc. as restructuring advisor,
and Moelis & Company LLC as investment banker. Rajah & Tann
Singapore LLP and Walkers serve as Singapore Law counsel and
Cayman
Law counsel, respectively. Donlin, Recano & Company, Inc. is the
claims agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on Feb. 4, 2021. The committee tapped Kramer
Levin Naftalis & Frankel, LLP as its bankruptcy counsel, Morris
James LLP as Delaware counsel, and Province, LLC as financial
advisor.
EHT US1: Sale of Sky's Sheraton Denver to Solid Rock for $9.2M OK'd
-------------------------------------------------------------------
Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the
District of Delaware authorized the sale proposed by EHT US1, Inc.,
and its affiliates of Sky Harbor Denver Tech Center, LLC's Sheraton
Denver Tech Center located at 7007 South Clinton Street, in
Greenwood Village, Colorado, together with all the improvements
located thereon, to Solid Rock Ventures, LLC, for $9.2 million
cash, plus assumption of liabilities, pursuant to the Agreement of
Purchase and Sale, dated as of May 20, 2021.
The Sale Hearing was held on May 28, 2021.
The Seller will be authorized to resolve or settle any objections
to the assumption and assignment of Disputed Contracts in
accordance with the terms of the Asset Purchase Agreement,
including with respect to Cure Costs or necessary consents, and
without need for any further order or action from the Court.
Immediately upon the Closing, the DIP Parties (i) will be deemed to
have automatically released, with respect to the Assets, all of the
security interests, liens and pledges (including the DIP Liens and
any other Claims on the DIP Collateral) securing the DIP
Obligations or evidenced by the DIP Documents with no further
action; and (ii) are authorized and directed to take any such
actions as may be reasonably requested by the Debtors to evidence
the release of such security interests, liens and pledges,
including the execution, delivery and filing or recording of such
releases as may be reasonably requested by the Debtors or the Buyer
or as may be required in order to terminate any related financing
statements, mortgages, mechanic's liens, or lis pendens.
In accordance with the Asset Purchase Agreement, prior to the
Closing, the Seller will provide to Buyer the pre-closing
statement, which will indicate, among other things, that, at the
Closing, the Buyer will pay to the Seller the balance of the
Purchase Price (subject to adjustments and credits as described in
the Asset Purchase Agreement), minus the Deposit. Following the
payments provided for, all liens, claims, interests, and
encumbrances that existed prior to Closing in or on the Assets will
attach to the remaining proceeds of the Sale Transaction.
The Seller is authorized and directed to assume and assign the
Designated Contracts and Designated Leases designated by the Buyer,
if any, for assumption at the Closing pursuant to Section 2.5(a) of
the Asset Purchase Agreement, which Designated Contracts and
Designated Leases, if any, are set forth on Exhibit B, to the Buyer
free and clear of all Claims, and to execute and deliver to Buyer
such documents or other instruments as may be necessary to assign
and transfer the Designated Contracts and Designated Leases to the
Buyer as provided in the Asset Purchase Agreement.
The Seller, in consultation with the Buyer, will settle the
objection of a counterparty to a Disputed Contract or will litigate
such objection under such procedures as the Court will approve.
The Seller will not settle a disputed Cure Cost for an amount in
excess of $5,000, individually, and $75,000, in the aggregate, of
the Seller's estimated Cure Cost for such Contract or Lease with
regard to any Contract or Lease that has been, as of the date of
such settlement, designated as a Designated Contract or Designated
Lease, as applicable, without the express written consent of Buyer
(acting reasonably).
Notwithstanding the provisions of Bankruptcy Rules 6004(h) and
6006(d) or any applicable provisions of the Local Rules, the Order
will not be stayed after the entry hereof, but will be effective
and enforceable immediately upon entry, and the 14-day stay
provided in Bankruptcy Rules 6004(h) and 6006(d) is expressly
waived and will not apply. The Seller and the Buyer intend to
close the Sale Transaction as soon as practicable. Any party
objecting to the Order must exercise due diligence in filing an
appeal and pursuing a stay within the time prescribed by law and
prior to the Closing, or risk its appeal will be foreclosed as
moot.
The relief requested in the Motion is granted on a final basis as
set forth therein. Any objections to the Motion with respect to
the entry of the Final Order that have not been withdrawn, waived
or settled are hereby denied and overruled on the merits. The
Final Order will become effective immediately upon its entry.
A copy of the Agreement and Exhibits is available at
https://tinyurl.com/jc67f6t8 from PacerMonitor.com free of charge.
About Eagle Hospitality Group
Eagle Hospitality Trust -- https://eagleht.com/ -- is a
hospitality
stapled group comprising Eagle Hospitality Real Estate Investment
Trust and Eagle Hospitality Business Trust. Based in Singapore,
Eagle H-REIT is established with the principal investment strategy
of investing on a long-term basis in a diversified portfolio of
income-producing real estate, which is used primarily for
hospitality or hospitality-related purposes as well as real
estate-related assets in connection with the foregoing, with an
initial focus on the United States.
EHT US1, Inc. and 26 affiliates, including 15 LLC entities that
each owns hotels in the U.S., sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 21-10036) on Jan. 18, 2021.
EHT US1 estimated $500 million to $1 billion in assets and
liabilities as of the bankruptcy filing.
The Debtors tapped Paul Hastings LLP and Cole Schotz P.C. as their
bankruptcy counsel, FTI Consulting Inc. as restructuring advisor,
and Moelis & Company LLC as investment banker. Rajah & Tann
Singapore LLP and Walkers serve as Singapore Law counsel and
Cayman
Law counsel, respectively. Donlin, Recano & Company, Inc. is the
claims agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on Feb. 4, 2021. The committee tapped Kramer
Levin Naftalis & Frankel, LLP as its bankruptcy counsel, Morris
James LLP as Delaware counsel, and Province, LLC as financial
advisor.
ELECTRONIC DATA: Sets Bidding Procedures for Business Assets Sale
-----------------------------------------------------------------
Electronic Data Magnetics, Inc., asks the U.S. Bankruptcy Court for
the Middle District of North Carolina, Greensboro Division, to
authorize the bidding procedures in connection with the auction
sale of certain assets used in its business operations.
Given the economic impact of the COVID-19 pandemic on the Debtor's
client base, which has severely impacted its current liquidity
position, a sale of the Sale Assets is necessary to preserve the
good will of its business, its customers and employee
relationships, and to maximize the recovery for the creditors of
the Debtor's estate. In connection with the potential sale of the
Debtor's business, on April 28, 2021, the Debtor began the
engagement process with SC&H Group, Inc. as financial advisor for
marketing and selling the Sale Assets. The Court entered the Order
authorizing the engagement of SC&H on May 21, 2021.
The Debtor has engaged in discussions with SC&H and Hallman
Properties regarding the sale process and assets to be included in
such process, at the end of which all parties concurred that
marketing the HP Real Estate with the Business Assets would be in
the best interests of the creditors of all parties involved.
Subject to the Debtor, Hallman Properties, and the Consultation
Parties entering into an agreement prior to the Sale Procedures
Hearing regarding the inclusion of the HP Real Estate in the sale
process ("Affiliate Agreement") and such agreement being approved
by the Court, the HP Real Estate will comprise the Sale Assets with
the Business Assets. The Debtor anticipates that the Affiliate
Agreement would provide the Debtor, in consultation with the
Consultation Parties, with complete control and decision-making
authority over the sale of the HP Real Estate, subject to a
confidential reserve price with respect to the sale of each parcel
of real estate.
Dince its retention, SC&H has engaged in the following activities,
all designed to expose the Sale Assets to the greatest number of
qualified purchasers. As of the date of the Motion, the Debtor and
SC&H have not identified a purchaser willing to enter into a
binding agreement of sale and serve as the Stalking Horse Bidder.
However, the Debtor, subject to consultation with the Consultation
Parties, is seeking authority to designate one or more Stalking
Horse Bidders and in the Bidding Procedures if it determines, in
consultation with the Consultation Parties, that such designation
will enhance the sale process.
The Debtor requests authority to solicit bids for the Sale Assets
utilizing the Bidding Procedures. The Bidding Procedures govern
the proposed sale, including any auction conducted in connection
therewith, and include the following deadlines in connection with
the relief sought in the Motion:
a. Bidding Procedures Hearing: June 10, 2021
b. Stalking Horse Designation Deadline: June 29, 2021
c. Assignment Objection Deadline: July 6, 2021
d. Bid and Deposit Deadline: July 23, 2021
e. Starting Bid and Auction Location Deadline: July 24, 2021
f. Auction: July 28, 2021, at 10:00 a.m. (ET)
g. Sale Objection Deadline: Aug. 2, 2021, by 4:00 p.m. (ET)
h. Adequate Assurance Objection Deadline: Aug. 2, 2021, by
4:00 p.m. (ET)
i. Sale Hearing: Aug. 3, 2021
j. Prevailing Bidder Deposit Increase Deadline: Aug. 4, 2021
by 5:00 p.m. (ET)
The other salient terms of the Bidding Procedures are:
a. Initial Bid: If a Stalking Horse Bidder has been designated
with respect to the specific assets to be purchased by the Bidder
at closing, any Initial Bid must propose a purchase price that in
the Debtor's judgment, in consultation with the Consultation
Parties, has a value to the Seller(s) of at least two times the
proposed Break-Up Fee greater than the Initial Bid of the Stalking
Horse Bidder as set forth in the Stalking Horse Agreement.
b. Deposit: 5% of the fixed purchase price under the Bidder's
Agreement
c. Auction: The Auction will be held on July 28, 2021,
commencing at 10:00 a.m. (ET), at a location as may be determined
by the Debtor, in consultation with the Consultation Parties, and
communicated to all Qualified Bidders by July 24, 2021.
d. Bid Increments: An amount to be determined by the Debtor,
in consultation with the Consultation Parties, at the Auction
The Debtor requests that, subject to consummation of the sale and
payment in full of all consideration under the applicable asset
purchase agreement, the sale and transfer of the Business Assets be
approved free and clear of all Liens, and that such Liens attach to
the proceeds of sale.
The Debtor believes that Truist, Pinnacle, the SBA, and Guilford
County ("Lenders") are the only parties holding or asserting liens
or security interests on the Sale Assets. It anticipates that all
Lenders would consent to the transaction presented for approval at
the Sale Hearing, so long as upon the consummation of the sale and
payment in full of all consideration under the applicable asset
purchase agreement, the liens and security interests asserted by
the Lenders will attach to the proceeds of the sale with the same
validity and priority as such liens and security interests applied
against the Business Assets immediately prior to the consummation
of the sale. The Debtor also anticipates that the liens of
Pinnacle Bank asserted against the HP Real Estate will be paid in
full at the closing of any transaction.
Within three business days after entry of the Sale Procedures
Order, the Debtor will serve on all non-debtor counterparties to
executory contracts and unexpired leasesthe Assignment Notice. The
Debtor will attach to the Assignment Notice its calculation of the
cure amounts that the Debtor believes must be paid to each
non-debtor counterparty to satisfy all Cure Obligations.
At the Sale Hearing, the Debtor also will request that the Sale
Order include provisions (i) authorizing the Debtor to assume and
assign to the Prevailing Bidder or Back-up Bidder any executory
contracts or unexpired leases specified by such Bidders in their
respective bids pursuant to Section 365 of the Bankruptcy Code,
(ii) fixing the Cure Amounts identified in the Assignment Notice as
the exact amounts that must be paid to the counterparty to the
Assigned Contracts, subject to the objection process described,
(iii) authorizing and directing the purchaser to pay the Cure
Amounts at closing, and (iv) deeming the parties to the Assigned
Contracts adequately assured of future performance, subject to the
objection process described.
Any delay in the Debtor's ability to consummate the sale would be
detrimental to the Debtor, its estate, and the creditors thereof.
Further, any delay would impair the Debtor's ability to take
advantage of the substantial cost-savings achievable through an
expeditious sale closing. For this reason and those set forth, the
Debtor submits that ample cause exists to justify a waiver of the
14-day stay imposed by Bankruptcy Rules 6004(h) and 6006(d) to the
extent applicable.
By the Motion, the Debtor intends to liquidate the Sale Assets in
order to monetize such assets. It asks requests that the Court:
a. Conducts the Sale Procedures Hearing to be scheduled on an
expedited basis as the Court permits;
b. Following the Sale Procedures Hearing, enters the Sale
Procedures Order, which, among other things;
i. Authorizes and schedules an auction at which the
Debtor, in consultation with its counsel, Truist Bank and its
counsel, and Pinnacle Bank and its counsel ("Consultation
Parties"), will solicit the highest or best bid(s) for (a) the sale
of assets of the Debtor used in its business operations, which
includes the Debtor's tangible and intangible personal property,
including leasehold interests, but does not include any property
specifically identified as an excluded assets, as well as certain
real property owned by Hallman Properties, L.L.C. and leased to the
Debtor pursuant to a written lease agreement;
ii. approves the Bidding Procedures related to the
conduct of the Auction;
iii. authorizes and establishes a deadline for the
Debtor to designate, in consultation with the Consultation Parties,
one or more stalking horse bidders with respect to all or any
portion of the Sale Assets, which designation may include a
proposed break-up fee with respect to a Stalking Horse Bidder;
iv. approves procedures for the assumption and
assignment of the Debtor's executory contracts and unexpired
leases;
v. approves the form and manner of notices of the
proposed sale of the Sale Assets, the Auction, any proposed
assumption and assignment of executory contracts or unexpired
leases and any cure costs associated therewith, and the Sale
Hearing;
vi. sets the Sale Hearing to consider the sale of the
Sale Assets, including any proposed assumption and assignment of
executory contracts and unexpired leases and proposed cure costs
related thereto; and
vii. establishes certain objection deadlines to the
foregoing.
The Debtor further requests that, following the Sale Hearing, the
Court enters the Sale Order, which, among other things:
a. authorizes and approves the sale of the Sale Assets to the
Prevailing Bidder, and under certain circumstances, to the Back-Up
Bidder;
b. authorizes and approves the assumption and assignment of
those executory contracts and unexpired leases, if any, designated
for assumption and assignment by the Prevailing Bidder and any
Back-up Bidder;
c. subject to consummation of the sale and payment in full of
all consideration under the applicable asset purchase agreement,
transfers any and all claims, liens, encumbrances, and interests in
the Sale Assets to the proceeds of the sale, with the same validity
and priority as such claims, liens, encumbrances, and interests
applied against the Sale Assets immediately prior to the
consummation of the sale; and,
d. grants such other and further relief as the Court deems
just and proper.
A copy of the Agreement and the Bidding Procedures is available at
https://tinyurl.com/eb4dpkw6 from PacerMonitor.com free of charge.
About Electronic Data Magnetics
Electronic Data Magnetics manufactures and reproduces magnetic and
optical media. The Company is a manufacturer of technically
advanced printed products used in a variety of markets including,
airlines, mass transit agencies, toll roads, parking institutions,
betting slips, printing for US GPO, tabulating cards, and RFID
tags.
Electronic Data Magnetics sought protection under Chapter 11 of
the
U.S. Bankruptcy Code (Bankr. M.D.N.C. Case No. 21-10222) on April
22, 2021. In the petition signed by R. Richard Hallman, president
and CEO, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Lena M. James oversees the case.
James C. Lanik, Esq. at WALDREP WALL BABCOCK & BAILEY PLLC is the
Debtor's counsel.
Truist Bank, as lender, is represented by BELL, DAVIS & PITT, P.A.
ELO TOUCH: Moody's Alters Outlook on 'B2' CFR to Stable
-------------------------------------------------------
Moody's Investors Service changed the ratings outlook for Elo Touch
Solutions, Inc. to stable from negative. At the same time, Moody's
affirmed Elo's Corporate Family Rating of B2, Probability of
Default Rating of B2-PD and senior secured credit facilities rating
of B2.
"The change in the outlook reflects Moody's expectation that Elo's
leverage will remain under 5x debt/EBITDA in the next 12-18 months,
supported by stable operating margins and debt prepayment, despite
the ongoing supply chain challenges that constrain the company's
top line growth. Elo's good liquidity also provides cushion to
manage the uncertainties that still exist due to an uneven economic
recovery", said Mariya Moore, Moody's analyst.
Affirmations:
Issuer: Elo Touch Solutions, Inc.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Gtd Senior Secured Bank Credit Facility, Affirmed B2 (LGD3)
Outlook Actions:
Issuer: Elo Touch Solutions, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Elo's B2 CFR is constrained by the company's relatively small
business scale, the evolving technology landscape and limited
growth prospects in some of its mature product categories. Elo's
customer mix in the quick service restaurant (QSR), groceries and
healthcare segments helped add some stability to its revenue and
earnings during the pandemic. With the ease of restrictions and
economic growth, the demand for Elo's products picked up as
evidenced by its very robust orders and backlog as of the end of
March 2021. Although strong orders and backlog suggest a much
stronger top line growth over the next 12 months, it will likely be
constrained by the ongoing supply chain disruption. The rapid
increase in demand for semiconductors has created market imbalance
and led to chip shortages that are likely to last throughout 2021.
Despite potentially limited revenue growth in 2021, Moody's
anticipates that Elo will continue to manage its capital structure
conservatively, increasing optional debt prepayment to offset any
earnings pressures, and will sustain its leverage below 5x Moody's
adjusted debt/EBITDA through the end of 2022.
Elo benefits from its strong niche position in attractive areas of
the commercial touchscreen market, a high degree of customer and
product diversification, and growth potential in newer product
categories such as self-service kiosks and digital signage.
The stable outlook reflects Moody's expectation for Elo's leverage
to remain below 5x debt/EBITDA and free cash flow to debt above 5%
over the next 12 to 18 months.
Elo's liquidity is expected to remain good over the next year.
Moody's projects Elo to generate positive free cash flow in the mid
$30 million range, which provides good coverage for the mandatory
debt amortization of $18 million. Liquidity is further supported by
$27 million of cash on the balance sheet and full availability
under a $35 million revolving credit facility due December 2023.
The revolving credit facility contains a net first lien debt/EBITDA
covenant of 6x, which is applicable if outstanding revolver balance
exceeds 40% of the commitment. Moody's does not expect the covenant
to be triggered and projects the company to maintain sufficient
cushion under the covenant over the next 12 months. There is no
financial maintenance covenant on the company's term loan.
Although an economic recovery is underway, it is tenuous and its
continuation will be closely tied to containment of the
coronavirus. As a result, the degree of uncertainty around Moody's
forecasts is unusually high. Moody's regards the coronavirus
pandemic as a social risk under Moody's ESG framework, given the
substantial implications for public health and safety. Moody's
expects the coronavirus concern for restaurants and retail will
gradually ease over the remainder of 2021.
Moody's views Elo's governance risk as elevated given its private
equity ownership and lack of public financial disclosures. Since
its acquisition by Crestview in December 2018 the company has not
made any dividend distributions or debt funded acquisitions, and
repaid the outstanding amount on the revolver and an additional
$12.5 million optional principal prepayment. However, the risk of a
future re-leveraging transaction still remains under financial
policies that are expected to favor shareholders.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Elo were to grow revenues and
margins on a sustained basis, expand its business scale and adhere
to conservative financial policies.
The ratings could be downgraded if Elo's revenue and/or margins
decline such that debt/EBITDA is sustained above 5x for an extended
period of time. Any deterioration in liquidity would also lead to a
negative rating pressure.
The principal methodology used in these ratings was Diversified
Technology published in August 2018.
Headquartered in Milpitas, California, Elo produces touchscreen
panels and computers for diverse applications including
point-of-sale, self-service kiosks, interactive digital signage,
and medical and industrial automation applications. Elo reported
revenue of $323 million in the LTM period ended March 26, 2021. Elo
was acquired by Crestview Partners in 2018.
ENC HOLDING: Moody's Hikes CFR to B2, Outlook Stable
----------------------------------------------------
Moody's Investors Service upgraded the ratings of ENC Holding
Corporation ("ENC" or "Evans"), including the corporate family
rating to B2 from B3, probability of default rating to B2-PD from
B3-PD, and senior secured bank credit facility to B3 from Caa1. The
ratings outlook is stable.
The upgrade to B2 reflects ENC's improvement in credit metrics and
Moody's expectation that ENC will continue to benefit from strong
demand in the freight market, which came under significant pressure
beginning in the second quarter of 2020. The freight market
strengthened substantially thereafter, driven largely by US
consumers spending which benefitted Evans's volume. As spending
patterns normalize the sharp increase in transport demand will
ease, but solid demand for intermodal transportation, which is an
important driver of Evans' business, is expected to continue for
the foreseeable future.
RATINGS RATIONALE
The ratings reflect ENC's relatively small size and exposure to
cyclical freight markets. It also considers the risk around ENC's
large accounts receivable balances from customers, which represents
over one third of its total assets. Cash flow will weaken if
customer payments are delayed or ultimately prove uncollectable.
ENC is also subject to large changes in working capital that drives
quarterly cash flow volatility.
ENC has good liquidity, which Moody's views as essential for the
company's credit profile and ability to grow its business over
time. Liquidity enables ENC to ensure it is able to pay its agents
and owner-operators in a timely manner, regardless of whether or
not payment is delayed or proves uncollectable from its shipper
customers. ENC is effectively fronting receivables, and if payments
from shippers are delayed or unpaid, ENC must be able to absorb the
float.
ENC has good standing as an agent-based provider of intermodal
drayage services and maintains moderate financial leverage.
Financial leverage is moderate with Debt-to-EBITDA at approximately
4 times at March 31, 2021 and it is likely to improve toward 3.5
times in 2022 (all ratios are Moody's adjusted unless otherwise
stated). ENC also benefits from a highly scalable agent-based and
asset-light business model, which limits capital expenditure needs,
and healthy customer and agent diversification. Nonetheless, a very
large portion of Evans' revenues are pass through.
The stable outlook reflects Moody's expectation that ENC will
continue to deleverage toward 3.5 times debt-to-EBITDA in 2022 as
profitability continues to improve.
The $120 million ABL, upsized from $100 million in April 2021, is
secured by a first priority lien and security interest in all
accounts receivable. The B3 rating on the $262 million senior
secured bank credit facility reflects the effective subordination
to the ABL as the bank facility is secured by second priority liens
on accounts receivable and inventory and first priority liens on
substantially other assets.
ENC had cash of $46 million and ABL availability of approximately
$45 million at March 31, 2021. The company's ABL availability is
reduced by roughly $75 million owing to letters of credit for
automotive liability insurance.
Moody's views ENC's environmental risk as moderate. Owner
operators, hired by ENC to move freight, are affected by
increasingly more stringent emission regulations for diesel
engines, which has increased the purchase cost of new trucks and
made engine maintenance more complex. Moody's expect the impact of
future emission regulations not to be as pronounced as the impact
of emission limits that were imposed in the last 10 years.
ENC's social risks are low. ENC provides its owner operators
programs focused on management of driver compliance and safety
which helps to improve the shipping industry overall. The company
is predominantly asset light, therefore the majority of its direct
employees are not exposed to heavy machinery in the work place.
ENC's governance risk is moderate to high. ENC is owned by the
Calera Capital which is a middle market private equity firm that is
expected to have emphasis on shareholder returns over creditors.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if ENC can continue to profitably
increase its size and scale while debt-to-EBITDA is sustained below
3 times. Having improved liquidity would be an important element
for any higher rating given the critical nature of liquidity to
handle the higher volumes. In light of the company's modest scale,
ENC would likely need credit metrics that are stronger than levels
typically associated with companies at the same rating level.
The ratings could be downgraded if Moody's expects debt-to-EBITDA
to be sustained above 5 times, or if liquidity weakens for any
reason. In addition, the payment of a significant shareholder
dividend or execution of a large debt funded acquisition could
pressure the ratings.
The following rating actions were taken:
Upgrades:
Issuer: ENC HOLDING CORPORATION
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Senior Secured Bank Credit Facility, Upgraded to B3 (LGD4) from
Caa1 (LGD4)
Outlook Actions:
Issuer: ENC HOLDING CORPORATION
Outlook, Remains Stable
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
ENC Holding Corporation ("ENC") is an asset-light agent-based
provider of services to operators in intermodal drayage, truckload,
and freight brokerage markets. Services provided include accounts
receivable management, payment processing, national and regional
sales support, insurance, and back-office support. ENC was acquired
by Calera Capital in February 2017. ENC had gross revenue for the
twelve months ended March 31, 2021 of about $1.5 billion.
ENCORE CAPITAL: Fitch Assigns Final BB+ Rating on GBP250MM Notes
----------------------------------------------------------------
Fitch Ratings has assigned Encore Capital Group, Inc.'s
(BB+/Stable) GBP250 million issue of 4.25% senior secured notes due
June 2028 (ISINs: XS2346128320, XS2346127272) a final rating of
'BB+'.
The final rating is in line with the expected rating Fitch assigned
to the notes on May 17, 2021.
The notes are principally being used to repay other notes due 2023
issued by Encore's subsidiary Cabot Financial (Luxembourg) S.A.,
together with associated fees and accrued interest.
KEY RATING DRIVERS
Under the global funding structure Encore implemented in 2020, the
senior secured notes are guaranteed by most Encore subsidiaries and
rank equally with other senior secured obligations. Their rating is
equalised with Encore's Long-Term Issuer Default Rating (IDR),
reflecting the prior claim on available security of a
higher-ranking super-senior debt level. This results in Fitch
expecting average rather than above-average recoveries for Encore's
senior secured notes.
Encore's Long-Term IDR reflects its leading franchise in the debt
purchasing sector in its chosen markets, its strong recent
profitability and its low leverage by the standards of the sector.
The rating also takes into account the concentration of Encore's
activities within debt purchasing and the potential for collections
performance to slow down from recent levels as pandemic-driven
economic support measures are phased out. It further factors in the
need over the longer term for debt purchasers to maintain adequate
access to funding with which to replenish their stocks.
RATING SENSITIVITIES
The notes' rating is primarily sensitive to changes in Encore's
Long-Term IDR. However, a downgrade of Encore's IDR would not
automatically lead to negative rating action on the notes,
depending on Fitch's view of the likely impact on recoveries of the
circumstances giving rise to the downgrade. Changes to Fitch's
assessment of relative recovery prospects for senior secured debt
in a default (e.g. as a result of a material shift in the
proportion of Encore's debt which is either unsecured or
super-senior secured) could also result in the senior secured debt
rating being notched up or down from the IDR.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
An upgrade of Encore's IDR is unlikely in the short term, against
the backdrop of the economic dislocation prompted by the pandemic.
Over the medium to long term, positive rating action would be
subject to:
-- Demonstration of continued collections and earnings resilience
as economic support measures in North America and Europe are
phased out and the supply to market of non-performing
receivables normalises; and
-- Long-term maintenance of a gross debt/adjusted EBITDA ratio
below 2.5x, while also developing a significant tangible
equity position via retention of profits.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A sustained fall in earnings generation, particularly if
leading to a weakening in key debt service ratios or other
financial efficiency metrics;
-- Failure to adhere to management's public leverage guidance of
maintaining net debt-to-adjusted EBITDA of 2x-3x;
-- A weakening in asset quality, as reflected in acquired debt
portfolios significantly underperforming anticipated returns
or requiring material write-downs in expected recoveries; or
-- An adverse operational event or significant disruption in
business activities (for example arising from regulatory
intervention in key markets adversely impacting collection
activities), thereby undermining franchise strength and
business model resilience.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ESG CONSIDERATIONS
Encore has an ESG Relevance Score of '4' for Customer Welfare -
Fair Messaging, Privacy & Data Security in view of the importance
of fair collection practices and consumer interactions and the
regulatory focus on them. Fitch has also assigned an ESG Relevance
Score of '4' for Financial Transparency on account of the
significance of internal modelling to portfolio valuations and
associated metrics such as estimated remaining collections. These
factors have negative influences on the rating, but their impacts
are only considered moderate, and they are features of the debt
purchasing sector as a whole, and not specific to Encore.
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.
ENERGY TRANSFER: Moody's Rates New Perpetual Preferred Units 'Ba2'
------------------------------------------------------------------
Moody's Investors Service assigned a Ba2 rating to Energy Transfer
LP's (ET) proposed Cumulative Redeemable Perpetual Preferred Units.
Its Baa3 issuer and senior unsecured ratings, its Ba1 junior
subordinated notes ratings, Ba2 preferred stock ratings and its P-3
commercial paper rating are not affected by this action. The rating
outlook is stable.
ET will use the proceeds of the preferred units offering to
refinance upcoming debt maturities and for general corporate
purposes.
Assignments:
Issuer: Energy Transfer LP
Pref. Stock Preferred Stock, Assigned Ba2
RATINGS RATIONALE
The proposed preferred units are rated Ba2, two notches below ET's
Baa3 senior unsecured rating, reflecting their subordination to all
of the company's existing senior unsecured notes, its unsecured
revolving credit facility and its subordinated notes. Moody's
attributes 50% equity credit to the preferred units.
ET's ratings are supported by its very large consolidated and
geographically diversified asset base comprised of crude oil,
natural gas and natural gas liquids pipeline services and storage,
and largely fee-based natural gas midstream gathering and
processing operations. ET, though its operating subsidiaries, ranks
among the largest publicly traded midstream master limited
partnerships (MLP) in terms of its size, geographic reach and the
operational diversification of its businesses. ET also holds the
general partnership interest and common units in Sunoco LP (SUN,
Ba3 positive) and USA Compression Partners, LP (USAC, B1 stable),
further adding to overall operational diversity. ET's pending $7
billion acquisition of Enable Midstream Partners, LP (ENBL, Baa3
stable) is expected to close in the second half of 2021. ET's $96
billion midstream asset base generates a largely fee-based cash
flow stream. It produced first quarter 2021 EBITDA of $5.04
billion, of which approximately $2.4 billion was attributable to
the optimization of its operations during winter storm Uri.
Following its first quarter results, ET upped 2021's EBITDA
guidance to a range of $12.9 to $13.3 billion (excluding the
pending merger of ENBL). Reflecting as much as $5 billion of debt
reduction in 2021 ($3.7 billion was repaid in the first quarter),
Moody's expects debt/EBITDA to drop below 4.5x for the year.
However, returning to a more normalized EBITDA performance in 2022
(which Moody's is conservatively projecting to evidence little
growth from 2021's base level), it is likely that debt/EBITDA will
still fall below 5x, helped by 2021's accelerated debt repayment.
October 2020's 50% distribution cut, which internalized
approximately $1.6 billion of cash flow, supplemented by
significant reductions in projected capital spending, should enable
ET to generate modestly positive free cash flow into 2022 and
beyond, further supporting debt reduction and a trajectory towards
ET's stated target of achieving a minimum 4.5x adjusted
debt/EBITDA. Moody's recognizes, however, that in a still somewhat
uncertain energy operating environment even generating flat EBITDA
entails execution risk, notwithstanding the enhanced value that
winter storm Uri has ascribed to ET's storage and transportation
assets.
Moody's considers ET to be in a good liquidity position into 2022,
enhanced by strong earnings retention which Moody's expect will
fund the repayment of debt. On March 5, ET redeemed 2021's $1.4
billion of maturing notes in cash, fully repaying 2021's scheduled
debt maturities. ET has $3.05 billion of debt scheduled to mature
in 2022. The company has guided 2021's growth capital spending of
$1.65 billion, down almost 50% from 2020's $3.05 billion, with
further spending declines projected into 2022 and beyond. At March
31, $800 million was utilized under ET's $6.0 billion credit
facilities, all of which was in commercial paper. Its $5.0 billion
revolving credit facility has a December 1, 2024 scheduled maturity
date, and is supplemented by a $1.0 billion 364-day credit
facility, scheduled to mature in November. The 364-day facility had
no borrowings outstanding. ET has a history of consistent support
for its investment grade rating, which Moody's expects will
continue to be the case.
The outlook is stable reflecting an anticipated trajectory of
continuing debt reduction.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if debt/EBITDA (proportionately
consolidated) drops below 4.5x with strong distribution coverage
remaining intact. ET's rating could be downgraded should
debt/EBITDA return to and remain above 5x.
The principal methodology used in these ratings was Midstream
Energy published in December 2018.
Energy Transfer Operating, L.P., headquartered in Dallas, Texas,
owns and operates a broad array of midstream energy assets. ETO is
controlled by Energy Transfer LP. (ET), which holds the general
partner interest in ETO. ET is a publicly traded MLP.
ENERGY TRANSFER: S&P Rates Series H Perpetual Preferred Units 'BB'
------------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating to Energy
Transfer L.P.'s (ET) series H fixed-to-floating-rate cumulative
redeemable perpetual preferred units. The company intends to use
net proceeds to partially repay outstanding debt and for general
partnership purposes.
S&P classifies the series H units as having intermediate equity
content because it believes they meet its requirements for
permanence, subordination, and deferability. As a result, the
proposed units will receive 50% equity treatment in the calculation
of its credit metrics.
Dallas-based ET is one of the largest midstream energy partnerships
in the U.S. with a strategic footprint in every major domestic
production basin. The partnership operates diverse assets that
include complementary natural gas midstream, intrastate, and
interstate transportation and storage; crude oil, natural gas
liquids (NGLs), and refined product transportation and terminaling;
and NGL fractionation. ET also owns Lake Charles LNG Co., as well
as the general partner and limited partner interests and incentive
distribution rights of Sunoco L.P. and USA Compression Partners
L.P.
The issuer credit rating on the company is 'BBB-' and the outlook
is stable.
EVERCOMMERCE INC: S&P Assigns Preliminary 'B+' ICR on Pending IPO
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' preliminary issuer credit
rating to EverCommerce Inc., a global provider of integrated
software-as-a-service (SaaS) solutions for the services-based small
and midsize businesses (SMB). S&P also assigned its 'B+'
preliminary issue-level ratings to the proposed first-lien credit
facilities. The preliminary recovery rating is '3'. The borrower of
the debt is EverCommerce Solutions Inc.
S&P expects to finalize ratings when the IPO is completed and debt
fully repaid.
The 'B+' issuer credit rating reflects EverCommerce's initial
adjusted leverage in the mid-4x area, niche focus within the highly
competitive and fragmented SMB services industry, and
below-software-industry-average EBITDA margins. Partly offsetting
these factors are strong organic top-line growth, low customer
concentration, and a recurring revenue base. EverCommerce provides
a diverse suite of business management software functionalities,
which include billing and payments, lead generation and marketing
tools, and customer engagement and monitoring. The company's
products target three primary verticals: home services (58% of
revenue), health services (19%), fitness and wellness (14%), along
with other services (9%). Its good revenue visibility comes from
95% recurring revenue, most of which is billed monthly, and net
monthly retention rates averaging 99% over the last nine quarters.
While retention rates remain high, in S&P's view, EverCommerce is
susceptible to typical churn as roughly half of SMBs have a life
cycle of about five years.
Software for services-based SMB industry is nascent with many
businesses using a mix of legacy homegrown offerings and point
solutions that lack specialization. Most of EverCommerce's products
are vertically tailored to support the distinctive needs of its
diverse customer base, integrating those manual and disconnected
business functions in the past. Its core business management
solutions enable businesses to streamline work orders, while its
ancillary products help augment revenue generation both in the
front and back offices, therefore increasing the stickiness of the
products. Its go-to-market strategy primarily utilizes digital
methods such as paid search and relies less on direct salespeople.
EverCommerce delivered strong growth over the last two years,
organically expanding revenue 16% in 2019 and 7% in 2020, as more
SMBs digitized their operations. The company relied heavily on
acquisitions to enhance its software capabilities, conducting 24
acquisitions since the beginning of 2019. While the COVID-19
pandemic temporarily slowed growth in the health services and
fitness and wellness segments, the overall business remained
resilient with health services recovering quickly once medical
offices reopened. EverCommerce moderated operating expenses while
growing revenue resulting in EBITDA margins of 22% in 2020. It also
offered struggling customers a deferred payment plan that helped
retention rates. S&P said, "Over the coming year, we expect organic
revenue to increase in the mid-teen percentages, underpinned by
growth in new customer wins and cross-selling additional
functionalities into the client base. However, higher-than-expected
client churn could result from trailing SMB failures in the
aftermath of the COVID-19 pandemic. We expect EBITDA margins to
decline to 18% in 2021 from higher investment in sales and
marketing, research and development, and public company costs. As
the company integrates those acquisitors and expands scale, we
expect EBITDA margins to increase going into 2022 and beyond."
S&P said, "Upon a successful IPO, in our base case EverCommerce's
initial adjusted leverage will decline to about 4.4x.Absent large
acquisitions, we expect leverage to decline to the mid-3x area by
the end of 2022 on strong revenue growth and modest EBITDA margin
expansion. We estimate higher costs and one-time net working
capital outflows will suppress free cash flow (FCF) in 2021,
arriving at a range of $15 million-$20 million. We expect
substantial improvement in FCF the following year to $55
million-$60 million. Financial policy will constrain a higher
rating, as sponsors Providence Strategic Growth and Silver Lake
Partners will still account for over half of the company's equity
base post-IPO. We expect acquisitions to continue over the coming
years while the company focuses on growth, cost controls, and
product integrations."
The final ratings are subject to successful completion of the IPO
and recapitalization of the debt structure. S&P said, "We will
review the final transaction documentation. Accordingly, the
preliminary ratings should not be construed as evidence of our
final ratings. If the terms and conditions of the final
documentation depart from what we have already reviewed, or if
either the equity or debt financing does not close within what we
consider a reasonable time, we reserve the right to withdraw the
ratings."
The stable outlook on EverCommerce reflects S&P's expectation that
the company will organically increase revenue in the mid-teen
percentages and modestly expand EBITDA margins over the coming
year, such that leverage declines to the mid-3x area by the end of
2022 from the initial mid-4x area post-IPO.
S&P could lower its rating on EverCommerce if:
-- Leverage approaches 5x; or
-- FCF as a percentage of debt decreases to the low- to
mid-single-digit area.
This could occur if more intense competition leads to significant
erosion of EverCommerce's core business management solutions, it
incurs higher-than-expected costs, or SMB churn is high. This could
also occur if the company engages in large debt-funded
acquisitions.
Although unlikely over the next 12 months, we could consider
raising S&P's rating on EverCommerce if:
-- It exhibits consistent organic revenue growth while maintaining
high profitability, such that its leverage sustains below 4x,
considering acquisition spending; and
-- Its private-equity owners relinquish most of their stake.
EVERCOMMERCE SOLUTIONS: Moody's Assigns First Time 'B1' CFR
-----------------------------------------------------------
Moody's Investors Service assigned first time ratings to
EverCommerce Solutions Inc. ("EverCommerce") with a corporate
family rating of B1 and a probability of default rating of B1-PD.
Concurrently, Moody's assigned a B1 rating to the company's
proposed senior secured first lien credit facility, comprised of a
$300 million term loan and an undrawn $190 million revolver. The
proceeds from this debt issuance, combined with funds received from
the IPO of EverCommerce's parent company EverCommerce Inc.
("EverCommerce Inc."), will be used to repay the company's existing
outstanding debt. The debt offering and rating action assumes the
successful completion of EverCommerce Inc.'s IPO (including the
exercise of the overallotment option). The ratings outlook is
stable.
Assignments:
Issuer: EverCommerce Solutions Inc.
Probability of Default Rating, Assigned B1-PD
Corporate Family Rating, Assigned B1
Senior Secured Revolving Credit Facility, Assigned B1 (LGD3)
Senior Secured Term Loan, Assigned B1 (LGD3)
Outlook Actions:
Issuer: EverCommerce Solutions Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
EverCommerce's B1 CFR is constrained by the company's moderate pro
forma trailing debt leverage exceeding 3.5x (Moody's adjusted for
operating leases), limited scale, and the potential for material
customer losses due to macroeconomic cyclicality or intensifying
competitive pressures. The IPO increases financial flexibility and
Moody's expects the company to maintain leverage under 4x. However,
EverCommerce Inc. continues to be majority owned by Providence
Strategic Growth ("PSG") and Silver Lake Alpine ("SLA"), which
presents risks with respect to the potential for aggressive
financial strategies including debt funded acquisitions. The
company's credit quality is supported by a solid presence within
its target markets and healthy secular long term growth prospects
fueled by accelerating adoption of digital technologies by SMBs to
enhance customer marketing, billing, payment processing, and
overall operational effectiveness. The company's primarily
subscription-driven business model and highly diversified client
base contribute to EverCommerce's healthy revenue predictability
and the potential for improving free cash flow generation.
The B1 ratings for EverCommerce's proposed first lien bank debt
reflect the borrower's B1-PD PDR and a loss given default ("LGD")
assessment of LGD3. The B1 first lien ratings are consistent with
EverCommerce's CFR as these debt instruments account for the
preponderance of the overall entity's pro forma debt structure.
EverCommerce's very good liquidity is principally supported by its
pro forma cash balance following successful completion of the
refinancing transaction and IPO including the exercise of the
overallotment option. Moody's expects the company to generate
modest free cash flow in FY21, but expects this metric to exceed
15% of total debt in FY22. The company's liquidity is also
supported by an undrawn $190 million revolving credit facility.
While the term loans are not subject to financial covenants, the
revolving credit facility has a springing covenant based on a
maximum net first lien leverage ratio of 7.5x (with no step-downs)
which the company should be comfortably in compliance with over the
next 12-18 months.
As proposed, the new credit facility is expected to provide
covenant flexibility that could adversely affect creditors,
including (i) incremental debt capacity not to exceed the greater
of $130 million and 100% of Consolidated LTM EBITDA, plus
additional amounts such that the net first lien leverage ratio does
not exceed 4.5x, plus unused capacity reallocated from the general
debt basket; amounts up to the greater of $130 million and 100% of
Consolidated LTM EBITDA, plus any amounts incurred in connection
with an investment or acquisition may be incurred with an earlier
maturity date than the initial term loans (ii) the absence of
express protections for collateral leakage permitted through the
transfer of assets to unrestricted subsidiaries, such transfers are
permitted subject to carve-out capacity and other conditions (iii)
dividends or transfers resulting in partial ownership of subsidiary
guarantors which could jeopardize guarantees, with no explicit
protective provisions limiting such guarantee releases, and (iv)
the absence of express protective provisions prohibiting an
up-tiering transaction.
The stable outlook reflects Moody's expectation that EverCommerce's
revenues will increase (on an organic basis) at a high single digit
rate in FY21, but higher operating expenses will result in a
moderate contraction in EBITDA during this period, resulting in
Debt/EBITDA (Moody's adjusted) exceeding 3.5x.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded if EverCommerce generates meaningful
revenue growth and expands profitability margins while adhering to
a conservative financial policy with declining private equity
ownership, maintaining very good liquidity, and sustaining
debt/EBITDA (Moody's adjusted) below 3.5x.
The rating could be downgraded if EverCommerce were to experience
weakening operating performance or the company maintains aggressive
financial policies such that debt/EBITDA (Moody's adjusted) exceeds
4.5x and annual free cash flow to debt is sustained below 10%.
The principal methodology used in these ratings was Software
Industry published in August 2018.
EverCommerce, majority-owned by PSG and SLA, provides SaaS-based
integrated solutions for business management, billing, payment
processing, customer engagement and marketing principally for SMBs
globally. Moody's forecasts that the company will generate sales of
approximately $430 million in 2021.
EVERGREEN DEVELOPMENT: Fine-Tunes Plan, Unsecureds Unimpaired
-------------------------------------------------------------
Debtors Evergreen Development Group and The Evergreens of Apple
Valley, L.L.P., submitted a Second Amended Joint Disclosure
Statement describing its Plan of Reorganization on June 1, 2021.
The Debtor will assume the lease with the Debtor's tenants for the
building facilities which are used for the operations essential to
the uninterrupted services of the business. Interruption of those
services will cause the loss of tenants.
Other leases and executory contracts will either be assumed or
rejected based on the decision by the Debtor regarding its future
operations and its own evaluation of the terms of those leases or
contracts. Leases or contracts which are rejected will have the
right to file an unsecured claim and participate in the
distribution to Class 2-A and 2-B, as applicable by election of the
holders of these claims.
Class 1-A consists of the Secured Claims of Minnesota Bank and
Trust. The Class 1 A Secured Claim will be amortized over a 30 year
period with interest accruing at the rate of 4.25% per annum and
paid in equal monthly installments of $17,995.80 with payments
beginning on the first day of the first full month following the
Effective Date of the Plan and on the same date of each month
thereafter for 72 consecutive months. The full balance of the Class
1-A Secured Claim will be due in full by payment of a balloon
payment on the sixth-year anniversary of the Effective Date of the
Plan. The balance of any claim remaining by the Class 1-A creditor
will be a general unsecured Class 2-B claim.
Class 2-A Lien Holders Claims will receive their pro rata share of
annual payments of $8,000, plus 30% of the net after tax profit
from Debtor's operations for a period of five years following
confirmation of the Plan. Management will circulate a summary of
the net profit calculations on or before June 30 of each year and
creditors in this Class shall have until July 15 of each year to
object to the management's calculation of the distributions to the
Class 2-A creditors. Net after tax profits shall mean profits from
Debtor's operation after deducting all of debtor's operating
expenses, payments to the other Classes of Creditors and taxes.
Class 2-B Convenience Claims consist of all Allowed unsecured trade
claims against Debtor which total $2,500 or less and any other
Trade claimant that agrees to reduce its claim to $2,500. The
approximate amount of those claims is currently $48.42. The Class
3-A claim the holders will receive 100% of the Allowed Claim on the
Effective Date of the Plan. This Class is unimpaired.
Evergreen Development Group and The Evergreens of Apple Valley,
L.L.P., will be substantively consolidated under the plan. The
pool of creditors for each entity are identical. The two entities
were merged in 2015, however title to the real property of the
Debtor was never documented. The reorganized Debtor will continue
to operate its business following the Confirmation Date. Gateway
LLC was formed by Paul and Vicki Williams, two of the guarantors of
the debt owed to the Lender and holders of junior mortgages on the
Property. Gateway LLC will become the owner of all the Equity
Interests of the debtor and has agreed to inject into the Gateway
LLC, the new equity interest holder, (the "New Collateral").
A full-text copy of the Second Amended Joint Disclosure Statement
dated June 1, 2021, is available at https://bit.ly/2T1o8Yo from
PacerMonitor.com at no charge.
About Evergreen Development Group
Evergreen Development Group is a single asset real estate company
which owns and leases commercial real estate in Waite Park,
Minnesota. Its principal place of business and corporate offices
are located at 95 10th Ave. South, Waite Park, Minnesota, 56387.
The Debtor merged with The Evergreens of Apple Valley, L.L.P. in
2015.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. D. Minn. Case No. 21-60066) on February
26, 2021. In the petition signed by Robert A. Hopman, general
partner, the Debtor disclosed up to $10 million in assets and up to
$50,000 in liabilities.
FOLEY & MANSFIELD, P.L.L.P., represents the Debtor.
EVOSITE LLC: $131K Sale of Assets to Evans Consoles Approved
------------------------------------------------------------
Judge David R. Jones of the U.S. Bankruptcy Court for the Southern
District of Texas authorized Evosite, LLC's sale of tangible and
intangible assets listed in the Asset Purchase Agreement to Evans
Consoles, Inc., for $131,483.
The delinquent ad valorem personal property taxes owed by the
Debtor to Cypress-Fairbanks Independent School District and Harris
County will attach to the sales proceeds and that the closing agent
will pay all ad valorem tax debt owed incident to the Assets
immediately upon closing and prior to any disbursement of proceeds
to any other person or entity.
The Purchaser assumes full responsibility for the 2021 ad valorem
taxes and will be responsible for paying the ad valorem taxes in
full, in the ordinary course of businesses, when due. If not
timely paid, the Taxing Authorities may proceed with non-bankruptcy
collections against the Purchaser, without leave or approval of the
Court. Any proration to the Debtor will be credited to the
purchaser at closing or on terms agreed upon by the Debtor and
purchaser. Any dispute regarding the proration of the ad valorem
taxes between the Debtor and purchaser will have no effect on the
Purchaser's responsibility to pay the 2021 ad valorem taxes. The
Taxing Authorities will retain their respective liens against the
Assets for tax year 2021, until paid in full, including any
applicable penalties or interest.
Except as provided in the Sale Order, the sale of the Assets will
be free and clear of all liens, claims and encumbrances pursuant to
363(f). Such liens, claims and encumbrances to attach to the
proceeds of sale in the order of priority they attached to the
Assets.
A copy of the Agreement is available at
https://tinyurl.com/z82ytmam from PacerMonitor.com free of charge.
About Evosite LLC
Evosite, LLC, a Houston, Texas-based manufacturer of control room
furniture, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Texas Case No. 21-31450) on April 29, 2021. In
the petition signed by Steve Will, president, the Debtor disclosed
$410,441 in assets and $1,462,591 in liabilities. Judge David R.
Jones oversees the case. Robert C. Lane, Esq., at The Lane Law
Firm, PLLC, is the Debtor's legal counsel.
FIGUEROA MOUNTAIN: SLO Taps Buying Personal Property for $25K
-------------------------------------------------------------
Figueroa Mountain Brewing, LLC, filed with the U.S. Bankruptcy
Court for the Central District of California a notice of its
proposed sale of the personal property located at its former
taproom location in Santa Maria, California, to SLO Taps, LLC, for
$24,972, subject to overbid.
A hearing on the Motion is set for June 18, 2021, at 10:00 a.m.
Objections, if any, must be filed no later than 14 days before the
hearing date.
The Debtor proposes to sell the assets to the Buyer. The assets,
listed in Exhibit A, are a variety of used furniture, fixtures,
equipment, and other miscellaneous personal property formerly used
by the Debtor in its operation of a taproom in Santa Maria. The
Debtor will sell the assets for $24,972.
The Debtor has not retained a broker or auctioneer for the sale
and, therefore, will pay no commission or fees. It is not aware of
any other costs of sale that would be deducted from the purchase
price other than possible sales taxes which would be paid out of
proceeds if applicable.
The Debtor proposes that the sale of the assets be sold free and
clear of liens and that the sale be subject to overbid at auction
as follows:
a. The Debtor will conduct an auction for the Assets at the
hearing on the Sale Motion or at such other time and location as
the Court prefers.
b. Bids must provide for immediate cash payment for the Assets
on an as-is, no warranty, no return basis with no due diligence or
other contingencies. The bid must also provide for removal of the
Assets from the Santa Maria premises within five business days of
the auction at the bidder's sole expense by licensed and bonded
contractors and indemnity for the Debtor of any damages to the
premises resulting from the removal of the Assets.
c. Bids may be presented at the auction.
d. Montecito Bank & Trust will be permitted to credit bid its
secured claim. The Debtor previously filed a motion to prohibit
White Winston from credit bidding its disputed secured claim.
White Winston's right to credit bid will be restricted, if at all,
as ordered by the Bankruptcy Court.
e. The bids will be submitted in $1,000 increments. Bidding
at the Auction will continue until such time as the highest and
best offer is determined by the Court (or, if the auction is not
conducted in open court, by the Debtor subject to Court
approval).
The hearing on the Motion will be conducted via video and audio
conference using ZoomGov. Instructions for participating in the
hearing via ZoomGov may be located at:
http://ecf-ciao.cacb.uscourts.gov/CiaoPosted/?jid=MB
A copy of the Exhibit A is available at
https://tinyurl.com/fsxn49pf from PacerMonitor.com free of charge.
The Purchaser:
SLO TAPS, LLC,
560 E. Betteravia Blvd.
Santa Maria, CA
About Figueroa Mountain Brewing
Founded in 2020, Figueroa Mountain Brewing, LLC --
https://www.figmtnbrew.com/ -- is in the business of manufacturing
beer with principal place of business in Buellton, Calif.
Figueroa Mountain Brewing sought protection under Chapter 11 of
the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 20-11208) on Oct. 5,
2020. Jaime Dietenhofer, the company's manager, signed the
petition. At the time of the filing, the Debtor disclosed between
$1 million and $10 million in both assets and liabilities.
Judge Martin R. Barash oversees the case.
Lesnick Prince & Pappas LLP is the Debtor's legal counsel.
FIRST AMERICAN: Moody's Withdraws B2 CFR on Deluxe Sale Closing
---------------------------------------------------------------
Moody's Investors Service withdrew all ratings for First American
Payment Systems, L.P. upon the closing of the sale of the company
to Deluxe Corporation and the repayment of First American's rated
debt instruments.
RATINGS RATIONALE
Withdrawals:
Issuer: First American Payment Systems, L.P.
Probability of Default Rating, Withdrawn , previously rated B3-PD
Corporate Family Rating, Withdrawn , previously rated B2
Senior Secured 1st Lien Term Loan, Withdrawn , previously rated B2
(LGD3)
Senior Secured 1st Lien Revolving Credit Facility, Withdrawn ,
previously rated B2 (LGD3)
Outlook Actions:
Issuer: First American Payment Systems, L.P.
Outlook, Changed To Rating Withdrawn From Stable
First American is an integrated merchant acquiring and payment
processing provider in the United States and Canada.
FITNESS INT'L: Moody's Hikes CFR to Caa1 on Equity Raise
--------------------------------------------------------
Moody's Investors Service upgraded Fitness International, LLC's
Corporate Family Rating to Caa1 from Caa3, Probability of Default
Rating to Caa1-PD from Caa3-PD, and first lien bank credit
facilities ratings (revolver and term loans) to B3 from Caa3. The
outlook is positive.
The company raised $525 million of preferred equity in April, of
which $360 million was used to pay down the revolver, $105 million
was used to pay down the Main Street Loan, with the remaining
amount added to the balance sheet as cash to boost liquidity.
The upgrade reflects the reduced likelihood of default over the
next year due to the company's much improved liquidity because of
the significant equity investment. Fitness International's current
total liquidity is about $730 million, consisting of about $370
million of cash and full access to its undrawn $400 million
revolver due January 2025 ($362 million availability net of letter
of credit). This liquidity will provide flexibility to fund
operations and manage the business as the company starts to recover
in 2021. The company also received a covenant waiver for its
revolver and term loan for six quarters, which Moody's view as
positive. Furthermore, the company will have no meaningful
maturities until 2025. The cash resources provide good coverage of
the $48 million per annum of required amortization on the term loan
A.
Moody's expects Fitness International's operating performance
including membership trends to gradually recover in 2021 as a
higher share of the public receives vaccinations and the
coronavirus pandemic subsides. However, the decline in dues paying
members has been meaningful since the start of the coronavirus
pandemic and it will take time for membership to recover. Moody's
lease adjusted debt-to-EBITDA spiked to 15x for the trailing twelve
months ended March 31, 2021 (pro forma for the preferred equity
raise and the debt paydown). However, Moody's expects the lease
adjusted debt-to-EBITDA leverage to decline quickly to below 6.5x
over the next 12 to 18 months along with the projected earnings
recovery.
The positive outlook reflects Moody's view that Fitness
International will have good liquidity over the next year. The
liquidity will be able to fund the operations and mandatory debt
service over the next year even if the recovery is weaker than
anticipated. The positive outlook also reflects Moody's view that
the company has good potential to de-lever quickly to below 6.5x
debt-to-EBITDA over the next year if the recovery momentum is
sustained.
Moody's took the following rating actions:
Issuer: Fitness International, LLC
Upgrades:
Corporate Family Rating, upgraded to Caa1 from Caa3
Probability of Default Rating, upgraded to Caa1-PD from Caa3-PD
Senior Secured First Lien Revolving Credit Facility, upgraded to
B3 (LGD3) from Caa3 (LGD3)
Senior Secured First Lien Term Loans (A and B), upgraded to B3
(LGD3) from Caa3 (LGD3)
Outlook Actions:
Issuer: Fitness International, LLC
Outlook, revised to Positive from Negative
RATINGS RATIONALE
Fitness International's Caa1 CFR broadly reflects its very high
leverage with Moody's lease adjusted debt-to-EBITDA leverage
spiking to close to 15x for the trailing twelve months ended March
31, 2021 (pro forma for the debt repaid through the preferred stock
offering) due to the significant earnings declines as a result of
the impact from Covid-19 pandemic since last March. Moody's expects
earnings to recover and debt-to-EBITDA leverage to decline to below
6.5x over the next 12 to 18 months. The rating also reflects
Fitness International's geographic concentration in California and
Florida and growing competition from technology-based fitness
services that are not tied to a facility. Furthermore, the rating
is constrained by the highly fragmented and competitive fitness
club industry with high attrition rates, Fitness International's
positioning in the industry's more pressured mid-tier price point,
as well as exposure to cyclical shifts in discretionary consumer
spending. However, the rating is supported by the company's
well-recognized brand name, position as the largest non-franchisee
fitness center by number of clubs, as well as the longer-term
positive fundamentals for the fitness industry such as the
increased awareness of the importance of health and wellness.
Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. Moody's expects the coronavirus concern for fitness
club operators to continue to subside over the course of 2021 as a
growing share of the public has been vaccinated and state
restrictions on facility capacity are eased.
Technology developments are creating new competitors for
traditional facilities-based fitness clubs including changes in
consumer habits toward rapidly growing at-home, social-based
services. Fitness clubs provide a service that will continue to
attract consumers, but the coronavirus is accelerating the
transition to new technology-based services during gym closures.
This will make it more challenging to return to pre-coronavirus
membership levels without enhancing services and reducing
membership fees.
The company is wholly-owned by founding members and the Seidler
family. Financial policy is expected to be moderate. The new
investor group participating in the preferred stock offering is
credit positive as it demonstrates external support for the
company's strategy and recovery prospects. Prior to the Covid-19
pandemic in 2020, the company had been proactively paying down debt
and Moody's expects the company will resume prioritizing debt
repayment after earnings recovery post the pandemic.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded should operating performance, credit
metrics and liquidity improve. Specifically, renewed membership and
EBITDA growth, positive free cash flow before growth investments,
Moody's adjusted debt-to-EBITDA sustained below 6.5x along with
good liquidity would be necessary for an upgrade.
The ratings could be downgraded if there is renewed deterioration
of operating performance, credit metrics or liquidity. Furthermore,
ratings could be downgraded should Moody's adjusted debt-to-EBITDA
remain elevated or the prospect for a distressed exchange or other
default increases.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
Fitness International, LLC is the largest non-franchised fitness
club operator in the United States with about 738 clubs in 27 US
states, the District of Columbia, and 2 Canadian provinces under
the LA Fitness brand name. Common equity in the company is wholly
owned by founding members and the Seidler family. Revenue for the
LTM period ended March 31, 2021 was about $900 million.
FLUSHING LANDMARK: Updates 41-60 Main Secured Claim Pay Details
---------------------------------------------------------------
Flushing Landmark Realty, LLC, submitted a First Amended Disclosure
Statement in connection with its First Amended Plan of
Reorganization dated June 1, 2021.
Recoveries projected in the Plan shall be from the Debtor's sale of
the Real Property as well as the formation of a liquidating trust
which shall be responsible for the payments to the Allowed General
Unsecured Claims. The amount generated by the proposed sale of the
Real Property shall be used to satisfy the claim of the Secured
Creditor; the payment of any outstanding statutory fees due and
owing the United States Trustee; the payment of allowed costs of
administration of the case (the "Administrative Claims"); and a
distribution to the holders of Allowed Claims.
Class 1 consists of the Secured Claim of 41-60 Main Street LLC. The
Claim of 41 60 shall be an Allowed Claim of not less than
$143,988,021.20 as of October 30, 2020, and shall be a Secured
Claim to the extent of the value of the property securing 41-60's
Claim. The first step in the property sales' process shall be the
sale of the Flushing Landmark Property by this Debtor. As provided
in the Bid Procedures in connection with the Flushing Landmark
Property sale, 41-60 shall have an initial credit bid of
$95,000,000 but is free to bid higher with credit up to the Allowed
amount of its claim subject to the Cap Amount.
The Bid Procedures shall govern the sales process. Following the
closing of such sale of the Flushing Landmark Property, if the sale
includes cash as a component of the purchase price, all Available
Cash other than an amount of Available Cash required to provide the
distribution to Class 2, $20,000 to Class 3, and payment of Allowed
Administrative Expense Claims, and payment of United States Trustee
Fees shall be distributed to 41-60 on account of its Secured Claim,
up to a maximum total distribution of the Allowed amount of its
Claim.
In the event that 41-60 is the successful bidder with an all credit
bid, 41-60 shall transfer to Available Cash sufficient funds that,
together with other cash in Available Cash, the Debtor will be able
to make such distributions; provided, however, that if the amount
of cash 41-60 is required to transfer to allow the Debtor to make
such distributions exceeds $200,000.00, the Plan cannot go
effective, without a written waiver by 41-60, which is in 41-60's
sole and absolute discretion.
Until the closing of the sale of the Flushing Property, the Lucky
Star Debtor will have the right to seek to refinance the Lucky Star
Property provided that such financing will pay $30,000,000
(regardless of the amount credit bid by 41-60 in the sale of the
Flushing Property) to 41-60 on account of its Secured Claim, which
41-60 will accept to release its lien against the Lucky Star
Property.
In the event that 41-60 has not received payment in full on the
Allowed amount of its Claim from the sale of the Flushing Property
and the Lucky Star Debtor is unable to refinance the Luck Star
Property as provided before the closing of the sale of the Flushing
Property, the Lucky Star Debtor shall sell the Lucky Star Property,
with the proceeds being distributed in accordance with the chapter
11 plan of the Lucky Star Debtor; provided, however, that 41-60
shall be free to credit bid on the Lucky Star Property up to the
remaining Allowed amount of its Claim.
From and after the confirmation of the Victoria Towers Debtor's
bankruptcy case pursuant to the chapter 11 plan in Victoria Towers,
the assets of Victoria Towers will be sold to the public. As
provided in the Victoria Towers chapter 11 plan, certain of the
proceeds of such sales may be paid to 41-60 on account of its
claims.
41-60 shall assign its deficiency claim, if any, to the bankruptcy
estate of Wu, as a result of the sale of the Flushing Property, the
Lucky Star Property and the property owned by Victoria Towers that
under the chapter 11 plan in Victoria Towers could yield payments
to 41-60 and all proceeds of such sales distributed in accordance
with the chapter 11 plans in each case.
Like in the prior iteration of the Plan, Class 3 consists of the
Allowed General Unsecured Claims of the Debtor. The allowed general
unsecured creditors total $202,648.38. The Plan proposes to
distribute the amount of $20,000.00 to the allowed general
unsecured creditors upon the Effective Date. This distribution
shall be funded by a "carve out" from the collateral of 41-60. The
balance of $182,648.38 shall be paid in its entirety over a period
of 60 months commencing on the first day of the month immediately
following the Effective Date.
The Debtor's proposed Plan is a plan of liquidation. Upon the entry
of the Confirmation Order, the Debtor shall have completed the
proposed sale of the Real Property, or the Debtor may complete the
sale after the entry of the Confirmation Order (the "Effective
Date").
A full-text copy of the First Amended Disclosure Statement dated
June 1, 2021, is available at https://bit.ly/3uZLye4 from
PacerMonitor.com at no charge.
Attorneys for Flushing Landmark Realty:
Fred S. Kantrow, Esq.
The Kantrow Law Group, PLLC
6901 Jericho Turnpike, Suite 230
Syosset, New York 11791
Tel: 516 703 3672
E-mail: fkantrow@thekantrowlawgroup.com
About Flushing Landmark Realty
Flushing Landmark Realty LLC is primarily engaged in renting and
leasing real estate properties. The Company is the owner of a fee
simple title to a commercial building located at 41-60 Main Street,
Flushing, New York.
Flushing Landmark Realty LLC filed a voluntary petition for relief
under chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
20-73302) on Oct. 30, 2020. In the petition signed by Myint J.
Kyaw, principal, the Debtor estimated $353,831 in total assets and
$97,476,811 in total liabilities. Fred S. Kantrow, Esq. at ROSEN &
KANTROW, PLLC. represents the Debtor.
FRESH ACQUISITIONS: July 20 Auction of Substantially All Assets
---------------------------------------------------------------
Judge Stacey G.C. Jernigan of the U.S. Bankruptcy Court for the
Northern District of Dallas authorized the bidding procedures
proposed by Fresh Acquisitions, LLC, and its debtor-affiliates in
connection with the sale of substantially all of their assets to
VitaNova Brands, LLC, or its designee(s), subject to overbid.
The Stalking Horse Bidder's consideration will include a credit bid
of the DIP Loan, assumption and payment of certain priority trust
fund taxes, payment of certain priority employee obligations; and
assumption of landlord, vendor, and customer obligations associated
with the restaurants.
Within three business days after entry of the Order, the Debtors
will serve copies of the Order upon the Bid Notice Parties.
On June 25, 2021, the Debtors will file with the Court an initial
schedule of executory contracts and unexpired leases that may be
assumed and assigned as part of the Proposed Sale. Concurrently
therewith, they will serve the Cure Notice upon each counterparty
to the Potential Assumed Contracts.
Prior to the commencement of the Sale Hearing, and no later than
July 22, 2021, the Debtors will file with the Court a proposed form
of the Assumed Contract Schedule. At the Sale Hearing, they will
ask authority to assume and assign the Assumed Contracts to the
Successful Bidder effective as of the closing of the Proposed
Sale.
Within two business days of the closing of the Proposed Sale, the
Debtors will file a notice on the docket (i) advising of the sale
closing date, and (ii) attaching a schedule listing the contracts
and leases that were assumed and assigned to the Successful
Bidder.
The Cure Objection Deadline is July 9, 2021 at 4:00 p.m. (CT). The
Debtors will serve a supplemental Cure Notice on the counterparties
to the additional Potential Assumed Contracts and such
counterparties will have until the later of (a) 4:00 p.m. (CT) on
July 9, 2021, or (b) 10 days from service ofthe supplemental Cure
Notice to file a Cure Objection to the additional Potential Assumed
Contract on the Assumed Contract Schedule.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: July 16, 2021, at 4:00 p.m. (CT)
b. Initial Bid: At the Auction, the initial overbid must
exceed the Stalking Horse Bid by at least $150,000, which amount
includes the Break-Up Fee ($100,000), plus an initial overbid of
$50,000.
c. Deposit: 10% of the aggregate value of the cash
consideration of the bid
d. Auction: An Auction is scheduled to take place on July 20,
2021, commencing at 10:00 a.m. (CT), virtually and/or at the
offices of Gray Reed, 1601 Elm Street, Suite 4600, Dallas, TX
75201.
e. Bid Increments: $50,000
f. Sale Hearing: Aug. 4, 2021, at 1:30 p.m. (CT)
g. Sale Objection Deadline: July 26, 2021, at 4:00 p.m. (CT)
h. VitaNova is granted "stalking horse" bidder status in
connection with the Auction. The Stalking Horse Bidder will be
deemed a Qualifying Bidder, and its Stalking Horse Bid will be
deemed a Qualifying Bid. No break-up fee will be paid to the
Stalking Horse Bidder ifthe Successful Bidder is not the Stalking
Horse Bidder.
i. Any creditor that has a valid, perfected, unavoidable, and
enforceable security interest in the Debtors' assets, may make one
or more credit bids for all or any portion of the assets in which
such Secured Creditor has a Security Interest at the Auction.
Notwithstanding Bankruptcy Rules 6004, 6006, or otherwise, the
Order will be effective and enforceable immediately upon entry, and
its provisions will be self-executing. To the extent applicable,
the stays described in Bankruptcy Rules 6004(h) and 6006(d) are
waived.
All time periods set forth in the Order or the Bidding Procedures
will be calculated in accordance with Bankruptcy Rule 9006(a).
A copy of the Bidding Procedures is available at
https://tinyurl.com/d2ye9k2d from PacerMonitor.com free of charge.
About Fresh Acquisitions
Fresh Acquisitions LLC and Buffets, LLC, operate independent
restaurant brands and are based in San Antonio, Texas. Prior to
the COVID-19 pandemic, Fresh and its affiliates were a significant
operator of buffet-style restaurants in the United States with
approximately 90 stores operating in 27 states. Fresh's concepts
include six buffet restaurant chains and a full service
steakhouse,
operating under the names Furr's Fresh Buffet, Old Country Buffet,
Country Buffet, HomeTown Buffet, Ryan's, Fire Mountain, and Tahoe
Joe's Famous Steakhouse, respectively.
Buffets Holdings, Inc., filed for Chapter 11 relief in January
2008
and won confirmation of a reorganization plan in April 2009. In
January 2012, Buffets again sought Chapter 11 protection and
emerged from bankruptcy in July 2012.
On Aug. 19, 2015, Alamo Ovation, LLC, acquired Buffets Restaurants
Holdings, Inc., and as a result of the merger, Buffets operated
over 300 restaurants in 35 states. Down to 150 restaurants in 25
states after closing unprofitable locations, Buffets LLC and its
affiliated entities sought Chapter 11 protection (Bankr. W.D. Tex.
Case No. Lead Case No. 16-50557) in San Antonio on March 7, 2016.
On April 27, 2017, the Court confirmed the Debtors' Second Amended
Joint Plan of Reorganization. The Effective Date of the Plan was
May 18, 2017.
Fresh Acquisitions, LLC and 14 affiliates, including Buffets LLC
(a/k/a Ovation Brands), sought Chapter 11 protection (Bankr. N.D.
Tex. Lead Case No. 21-30721) on April 20, 2021. Fresh Acquisitions
was estimated to have $1 million to $10 million in assets and $10
million to $50 million in liabilities.
The Hon. Harlin Dewayne Hale is the case judge.
In the 2021 cases, the Debtors tapped GRAY REED as counsel; and B.
RILEY ADVISORY SERVICES as financial advisor. KATTEN MUCHIN
ROSENMAN LLP is special counsel. BMC GROUP, INC., is the claims
and noticing agent. HILCO REAL ESTATE, LLC is the real estate
consultant.
GABBIDON BUILDERS: Court Rejects Plan, Converts Case to Chapter 7
-----------------------------------------------------------------
Bankruptcy Judge Laura T. Beyer denied confirmation of the Amended
Chapter 11 Plan of Reorganization (Subchapter V) filed by Gabbidon
Builders, LLC on February 17, 2021.
Instead, Judge Beyer converted the Debtor's case to a liquidation
under Chapter 7 of the Bankruptcy Code, at the behest of the U.S.
Bankruptcy Administrator for the Western District of North
Carolina.
The Bankruptcy Administrator objected to the Plan and sought
dismissal or conversion of the case.
The Debtor's Plan proposes to sell the lot it owns at Riva Ridge
Lane in Waxhaw and to use the net proceeds to pay creditors $10,000
each with the remainder of their claims to be paid over the balance
of the Plan. The Debtor proposes to use the balance of the net
proceeds to purchase a second lot in the Fountaingrove neighborhood
and to build a 4,300-square foot house on that lot, which it could
then sell and use those proceeds to continue to fund the Plan.
The Debtor first sought approval for a proposed sale of the
Property on October 23, 2020. It was later withdrawn after
multiple objections were filed. The Debtor's second attempt to
sell its real property for $260,000 was approved at a hearing held
December 18, 2020. The sale order was entered Feb. 22, 2021.
However, at the April 30 hearing, the Debtor advised the Court that
the sale fell through.
Leonard Gabbidon, sole owner and manager of the Debtor, said there
is a new sale contract for $265,000. However, no motion has been
filed to sell the Property. No contract was produced or introduced
into evidence.
The Court finds and concludes that cause exists to convert this
case to Chapter 7 for the reasons set forth in the Motion to
Convert and those outlined in these findings of fact and
conclusions of law, including but not limited to: (i) the Debtor
has no profitable core around which to structure its reorganization
effort, (ii) the Debtor's cash position throughout this case has
been precarious, causing the potential dividend to creditors to
diminish since the Petition Date, and no competent evidence
suggests that the Debtor's cash position will improve, (iii) the
Debtor's repeated failure to account for expenses and building
costs in its ongoing business operations indicates it is not
equipped to become profitable or to safeguard the estate, and (iv)
the Debtor's failure to timely apprise the Court of its dealings
with its assets calls into question whether the Debtor has been
proceeding with the diligence required of a Chapter 11 debtor.
The Court concludes the Debtor has engaged in gross mismanagement
of the estate, there has been a diminution of the estate, and there
is not a reasonable likelihood of rehabilitation. The Court
further finds and concludes that conversion is in the best interest
of creditors and the estate so that a Chapter 7 trustee can
liquidate the Property and distribute the proceeds and the Debtor's
funds on hand, as well as any further recoveries, for the benefit
of creditors.
A copy of the Court's May 14, 2021 Order is available at
https://bit.ly/3pnTeW4 from Leagle.com.
About Gabbidon Builders
Gabbidon Builders, LLC, a Charlotte, N.C.-based construction
company, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D.N.C. Case No. 20-30845) on September 19, 2020. The
petition was signed by Leonard Gabbidon, the company's owner.
At the time of the filing, the Debtor estimated assets of between
$100,001 and $500,000 and liabilities of the same range.
The Lewis Law Firm, P.A. is the Debtor's legal counsel.
GALILEO SCHOOL: Moody's Gives Ba1 Rating on 2021A Education Bonds
-----------------------------------------------------------------
Moody's Investors Service has assigned initial Ba1 ratings to the
Galileo School for Gifted Learning, FL's $28 million Educational
Facilities Revenue Bonds (Galileo Schools for Gifted Learning
Project), Series 2021A and the $175,000 Taxable Educational
Facilities Revenue Bonds (Galileo Schools for Gifted Learning
Project), Series 2021B. Following the sale, the school will have
about $28.2 million in debt outstanding. A positive outlook has
also been assigned.
RATINGS RATIONALE
The Ba1 rating reflects Galileo's consistently strong academic
performance as reflected in its 'A' ranking from the state for
seven of the last eight years, coupled with the school's very
strong enrollment demand. Galileo has a consistent history of
operating at or near capacity at its Riverbend campus, with a
waitlist that typically ranges from 80% to 90% of the school's
total enrollment. Governance is a key factor for the school's
rating profile, and Galileo benefits from a strong management team
supported by an active board that reviews monthly and quarterly
financial statements.
Galileo additionally benefits from the recent addition of a second
K-8 campus (Skyway) which was filled nearly to capacity despite
opening during a pandemic. The expansion was made possible, in
part, by the state's high-performing charter school replication
process. While Moody's expect the additional campus to be a long
term benefit to Galileo's financial performance, the addition of a
new school meant that the rapid growth in the school's operating
budget has notably outpaced its cash position. As a result, though
cash has improved over the last several years on a nominal basis,
compared to its budget, cash is currently very narrow. Further,
following the issuance of the 2021 revenue bonds, the school will
be significantly leveraged when compared to the size of its
operations and liquidity. This is somewhat offset by Galileo's lack
of exposure to a defined-benefit pension plan; all of its current
employees participate in a defined contribution retirement plans.
The Ba1 rating additionally incorporates adequate legal covenants,
the relatively long 35-year amortization schedule and the current
financial projections that reflect adequate debt service coverage
and improved liquidity going forward.
RATING OUTLOOK
The positive outlook reflects the expectation that the school's
successful addition of a second K-8 campus coupled with the
consistently strong enrollment demand will continue driving solid
operating results going forward. Positive financial performance
that results in improved liquidity and solid debt service coverage
metrics that are in line with the school's current projections
would place upward pressure on the rating in the next 18 to 24
months.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
Significant and sustained growth in liquidity and debt service
coverage
Significant reduction in leverage
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
Weakening of the currently strong academic performance, a key
competitive advantage for the school
Any deterioration in the financial performance or debt service
coverage
Any event that threatens the charter contracts of either campus
LEGAL SECURITY
Proceeds of the Series 2021 bonds will be loaned to the Galileo
School from Seminole County Industrial Development Authority. The
Galileo School's obligation to make payments under the loan
agreement are absolute and unconditional. Per the loan agreement,
the Galileo School is required to transfer an amount necessary to
pay principal and interest on the bonds from the gross revenues to
the Trustee on a monthly basis to pay the loan on or before the
first business day of each month starting August 2, 2021. State aid
payments are the school's primary source of revenue and are the
principal and expected source of repayment of the bonds. However,
the bonds are secured by a gross revenue pledge that includes all
of the revenues, income, cash receipts and other money received by
the school, or received by the Trustee on behalf of the school. The
bonds are additionally secured by a mortgage on, and security
interest in, the school's facilities though the school does not
have a recent appraisal of either campus.
Bond covenants include a 45 days' cash on hand requirement and a
minimum of 1.1x annual debt service coverage. Bondholders
additionally benefit from a fully funded debt service reserve fund
at maximum annual debt service on the bonds. The Galileo School for
Gifted Learning does not plan on issuing any additional debt at
this time though the current bonds have an Additional Bonds Test
based both on projected coverage and historical coverage. To issue
additional bonds, the projected net revenue available for debt
service in each of the two fiscal years immediately following
completion of the newly financed project shall be at least 1.2x
debt service coverage including the proposed debt and the
historical net revenue available for debt service in the most
recent audited fiscal year must equal at least 1.2x debt service
coverage of the debt currently outstanding.
USE OF PROCEEDS
Bond proceeds will finance (including through reimbursement) the
acquisition, construction, improvement, renovation and equipping of
the Riverbend Campus and Skyway Campus, and refinance certain
indebtedness related to the acquisition of a small vacant parcel of
land, to fund a debt service reserve account and to pay for the
costs of issuance.
PROFILE
The Galileo School Foundation, Inc. d/b/a Galileo School for Gifted
Learning is a Florida not-for-profit corporation and was
incorporated in 2010 for the purpose of establishing a public
charter school in Seminole County, Florida. The charter school
opened its Galileo Riverbend campus in 2011 and served 133 students
in kindergarten through fifth grade. The charter school gradually
added grades and enrollment in the following years and served 590
students in grades kindergarten through eighth grade during fiscal
2021, which is the maximum capacity at Galileo Riverbed.
The Galileo School received approval from the School Board of
Seminole County to open a second school pursuant to a
high-performing charter school replication application in 2017.
This second location is known as Galileo Skyway and will serve
grades K-8 utilizing the same policies, procedures, programs,
professional development, and course work that are currently used
at Galileo Riverbend. Galileo Skyway opened in August of 2020,
initially serving about 588 students in grades K-6 from a temporary
campus. Galileo Skyway will begin offering seventh grade during
fiscal 2022 and will add eighth grade in fiscal 2023. Galileo
Skyway will move out of the temporary location and into the new
campus beginning in fiscal 2022.
METHODOLOGY
The principal methodology used in these ratings was US Charter
Schools published in September 2016.
GFL ENVIRONMENTAL: Moody's Rates New $600MM Unsecured Notes 'B3'
----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to GFL Environmental
Inc.'s proposed new $600 million senior unsecured notes due in
2029. The B1 corporate family rating, B1-PD probability of default
rating, Ba3 ratings on GFL's existing senior secured bank credit
facility and senior secured notes and B3 ratings to its existing
senior unsecured notes remain unchanged. The Speculative-Grade
Liquidity Rating also remains unchanged at SGL-2. The outlook
remains stable.
The proceeds from the unsecured notes issuance will be used to
prepay the $360 million of outstanding senior unsecured notes due
May 2027 with the remainder used to pay down the outstanding
amounts under GFL's revolving credit facility. This is a
debt-for-debt transaction and will not materially affect GFL's
leverage.
Assignments:
Issuer: GFL Environmental Inc.
Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5)
RATINGS RATIONALE
GFL's B1 CFR is constrained by: 1) its history of aggressive
debt-financed acquisition growth strategy; 2) Moody's expectation
that leverage will remain above 4x in the next 12 to 18 months
(about 4.8x pro forma for recent acquisitions); 3) the short time
frame between acquisitions which increases the potential for
integration risks and creates opacity of organic growth; and 4)
GFL's majority ownership by private equity firms, which may
continue to hinder deleveraging. However, GFL benefits from: 1) the
company's diversified business model; 2) high recurring revenue
supported by long term contracts; 3) its good market position in
the stable Canadian and US non-hazardous waste industry; 4) EBITDA
margins that compare favorably with those of its investment grade
rated industry peers; and 5) good liquidity.
The stable outlook reflects Moody's view that GFL will sustain
leverage in the mid-to-high 4x range and continue to maintain its
stable margins and good liquidity in the next 12 to 18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if GFL demonstrates consistent and
visible organic revenue growth, maintains good liquidity and
sustains adjusted debt/EBITDA below 4.0x (4.8x pro forma 2021E).
The ratings could be downgraded if liquidity weakens, possibly
caused by negative free cash flow, if there is a material and
sustained decline in margins due to challenges integrating
acquisitions or if adjusted Debt/EBITDA is sustained above 5.0x
(4.8x pro forma 2021E).
GFL has good liquidity (SGL-2). Sources are approximately C$900
million compared to C$60 million ($46 million) of mandatory
payments payable under the amortizing notes of the tangible equity
units over the next 12 months. GFL had cash of approximately C$10
million as at March 31, 2021, approximately C$600 million of
availability under its C$628 million and $40 million revolving
credit facilities after the refinancing transaction, and Moody's
expected free cash flow of about C$300 million over the next 12
months to March 2022. GFL's revolver is subject to a net leverage
covenant, which Moody's expects will have at least a 40% cushion
over the next four quarters. GFL has limited flexibility to
generate liquidity from asset sales as its assets are encumbered.
Environmental risks considered material are the various regulations
and requirements that GFL is subjected to for the collection,
treatment and disposal of waste. GFL has a long track record of
adhering to the requirements for the proper handling of the waste
materials encountered.
The governance considerations Moody's make in GFL's credit profile
include the majority ownership by private equity firms as well as
its history of debt-financed acquisitions and aggressive financial
policies, which may be reversed after the completion of the IPO
earlier this year. Moody's also considered GFL's track record of
successfully integrating its acquisitions for the expansion of its
business as well as the management team's experience in the
amalgamation of the businesses.
The Ba3 ratings on the senior secured notes and term loan are one
notch above the CFR due to the senior debt's first priority access
to substantially all of the company's assets as well as loss
absorption cushion provided by the senior unsecured notes. The B3
rating on the senior unsecured notes is two notches below the CFR
due to the senior unsecured notes' junior position in the debt
capital structure.
The principal methodology used in this rating was Environmental
Services and Waste Management Companies published in April 2018.
GFL Environmental Inc., headquartered in Toronto, provides solid
waste and liquid waste collection, treatment and disposal solutions
and soil remediation services to municipal, industrial and
commercial customers in Canada and the US. Pro forma for
acquisitions, annual revenue is approximately C$5.0 billion. GFL is
publicly traded on the Toronto Stock Exchange and New York Stock
Exchange.
GIOVANNI & SONS: Unsecureds to Get Pro Rata of 1% of $793K
----------------------------------------------------------
Giovanni & Sons High-Tech, Inc., filed an Amended Disclosure
Statement dated May 27, 2021. The Debtor shall fund the Plan from
the income received from the metal works, metal erection and
furniture manufacturing of its business.
Classes of Claims under the Plan
a. Class 1 Allowed Secured Claim of Ford Motor Credit Company, LLC,
whose impaired secured claim is allowed at $31,642.
b. Class 2 Allowed Secured Claim of TD Bank, N.A. for $109,002.
c. Class 3 Allowed Secured Claim of Ally Bank for $39,758.
d. Class 4 Allowed Secured Claim of TVT 2.0, LLC for $18,944. This
creditor has a general unsecured claim of $186,677.
e. Class 5 Allowed Secured Claim of Financial Pacific Leasing, Inc.
for $18,831.
f. Class 6 Allowed Secured Claim of LEAF Capital Funding, LLC for
$34,719.
All of these Secured Claims are impaired under the Plan.
g. Class 7 General Unsecured Claims.
A total of $7,929 shall be paid to Allowed Unsecured Claims, or 1%
of the total amount of Allowed Unsecured Claims of $792,859. This
amount shall be paid in equal monthly installments of $132 for 60
months following entry of a confirmation Order, on a pro rata
basis.
Post-confirmation, Gian Carlo Visciglia will function as president,
and Katia Visciglia will act as office manager. Their
post-confirmation compensation are yet to be determined.
A copy of the Amended Disclosure Statement is available for free at
https://bit.ly/3fQUlKZ from PacerMonitor.com.
About Giovanni & Sons High-Tech
Giovanni & Sons High-Tech, Inc., a Medley, Fla.-based contractor,
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Fla. Case No. 20-20484) on Sept. 28, 2020. At the time of the
filing, the Debtor had total assets of $267,346 and total
liabilities of $1,892,134.
Judge Robert A. Mark oversees the case.
The Law Offices of Richard R. Robles, P.A., is the Debtor's legal
counsel.
GOLF TAILOR: Seeks to Hire Holder Law as Legal Counsel
------------------------------------------------------
Golf Tailor, LLC seeks approval from the U.S. Bankruptcy Court for
the Northern District of Texas to hire Holder Law to serve as legal
counsel in its Chapter 11 case.
The firm's services include:
(a) advising the Debtor regarding its powers and duties in the
continued operation of its business and the management of its
property;
(b) taking all necessary action to protect and preserve the
Debtor's estate;
(c) preparing legal papers;
(d) assisting the Debtor in preparing a disclosure statement
and plan of reorganization;
(f) performing legal services in other matters, including but
not limited to, corporate finance and governance, contracts,
antitrust, labor and tax; and
(g) other legal services necessary to administer the Debtor's
Chapter 11 case.
The firm will charge for time at its normal billing rates for
attorneys and legal assistants and will request reimbursement for
its out-of-pocket expenses.
The firm received funds in the amount of $30,000. On May 25, 2021,
the firm received an additional funds from
Reactor, LLC in the amount of $15,000. The firm applied $16,830.
from funds received for attorney’s fees and $1,738. for the
Chapter 11 filing fee.
Areya Holder Aurzada, Esq., at Holder Law, disclosed in a court
filing that the firm and its attorneys are "disinterested" as
defined in Section 101(14) of the Bankruptcy Code.
Holder Law can be reached through:
Areya Holder Aurzada, Esq.
Holder Law
901 Main Street, Suite 5320
Dallas, TX 75202
Tel: (972) 438-8800
Email: areya@holderlawpc.com
About Golf Tailor
Golf Tailor, LLC, a Dallas, Texas-based online retailer of golf
products, sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Texas Case No. 21-30995) on May 28, 2021. In the
petition signed by Neil Goldstein, chief restructuring officer, the
Debtor disclosed up to $10 million in assets and up to $50 million
in liabilities. Judge Michelle V. Larson oversees the case. Areya
Holder Aurzada, Esq., at Holder Law, represents the Debtor as legal
counsel.
GORDON BROTHERS: Wins Cash Collateral Access Thru June 30
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Washington
has entered a stipulated order that amended a prior order approving
the emergency and interim use of cash collateral by Gordon Brothers
Cellars.
Based on the Debtor's agreement with the Bank of Eastern
Washington, GBC is authorized to use cash collateral on an
emergency and interim basis through the earlier of the Effective
Date of any plan confirmed by the Court or June 30, 2021, subject
to the terms and conditions of the Order, the Initial Cash
Collateral Order, the Second Interim Order and the Third Interim
Order, unless further extended by Court order.
A copy of the Stipulated Order and the Debtor's master budget is
available for free at https://bit.ly/34GPcyq from
PacerMonitor.com.
The Debtor projects total revenue of $64,364.50 and total expenses
of $62,075 for June 2021.
About Gordon Brothers Cellars, Inc.
ordon Brothers Cellars, Inc. owns and operates a wine business.
Gordon Brothers Cellars sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Wash. Case No. 20-02003) on
November 6, 2020. In the petition signed by Jeffrey J. Gordon,
president, the Debtor disclosed $447,844 in assets and $2,148,304
in liabilities.
Gordon Brothers Cellars' case is jointly administered with the
Chapter 11 case of Kamiak Vineyards Inc., which sought bankruptcy
protection (Bankr. E.D. Wash. Case No. 20-02038) on November 17,
2020. Gordon Brothers Cellars' is the lead case.
Judge Whitman L. Holt oversees the cases.
John W. O'Leary, Esq., at Gravis Law, PLLC, represents the Debtor.
Kevin O'Rourke is the Chapter 11 Subchapter V Trustee.
Jason Ayres, Esq., and Todd Reuter, Esq., at Foster Garvey P.C.,
represent Bank of Eastern Washington.
Michael Paukert, Esq., at Paukert & Troppmann, PLLC, represents
Equitable Financial Life Insurance Company.
GORHAM PAPER: Asks Court to Extend Plan Exclusivity Thru August 31
------------------------------------------------------------------
Debtors Gorham Paper and Tissue, LLC and its affiliates ask the
U.S. Bankruptcy Court for the District of Delaware to extend the
exclusive periods during which the Debtor may file a Chapter 11
Plan and to solicit acceptances through and including August 31,
2021, and November 1, 2021, respectively. This is the Debtors'
second request for an extension of the Exclusivity Periods.
Since the Petition Date, the Debtors have made substantial and
meaningful progress under chapter 11, including obtaining Court
approval of and closing the Sale within the first months of the
case, and administering the Chapter 11 Cases efficiently,
economically, and cooperatively with numerous parties-
in-interest.
On December 18, 2020, the Bankruptcy Court entered the Sale Order
which, among other things, authorized the Debtors to sell
substantially all of their assets to Gorham Acquisition, LLC. The
Sale closed on December 31, 2020.
As the Court is aware from prior statements on the record, both
before and after the Closing Date, the Debtors have worked with
various interested parties, including the Committee and Zohar III,
Limited, regarding a potential chapter 11 plan of liquidation to
effectuate the Debtors' chapter 11 exit strategy and ensure that
payments can be made to the remaining creditors of the estates.
Those efforts culminated with the settlement among the Debtors, the
Committee, Zohar III, and Ankura Trust Company, LLC, which the
Court approved through the entry of an order on February 17, 2021,
and which agreement provided for, among other terms, the infusion
of more than $1 million of cash back into the estates to fund the
Debtors' wind-down and chapter 11 exit strategy.
And since the Closing Date, the Debtors have engaged in significant
efforts to collect outstanding accounts receivable and resolve
administrative expenses and other claims against the estates, all
to reach a consensual exit plan from chapter 11.
In addition, the Debtors have sent demand letters to more than a
dozen potential preference defendants, and they have been working
diligently to evaluate potential defenses, negotiate settlements,
and prepare for litigation on those claims that do not settle.
Also, the Debtors have sufficient liquidity to continue paying
administrative expenses as they become due and will continue to
make such payments consistent with the Bankruptcy Code and Court
orders. The significantly fewer administrative expenses are being
incurred post-Closing, given that the Debtors no longer operate
their businesses.
It was and remains important for the Debtors to engage in these
efforts before filing a plan. The claims analysis, settlements, and
recoveries have allowed the Debtors to evaluate their exit strategy
and formulate a plan that is now substantially drafted and should
be filed in the upcoming weeks.
The relief requested is intended to preserve the value of the
Debtors' significant efforts so far, while also affording the
Debtors the additional time to continue executing their chapter 11
strategy without interference from a competing plan.
The Debtors' conduct in these Chapter 11 Cases, particularly in
connection with the ongoing discussions with their stakeholders,
demonstrates that the Debtors are acting transparently and are not
seeking an extension of the Exclusivity Periods to artificially
delay the administration of these Chapter 11 Cases. To that end,
the Debtors, the Committee, Zohar, and others will continue to work
together to try to reach a consensus on a proposed plan of
liquidation.
A copy of the Debtors' Motion to extend is available at
https://bit.ly/3cfmSaD from Donlinrecano.com
About Gorham Paper and Tissue
Founded in 2011, Gorham Paper and Tissue LLC --
http://www.gorhampt.com/-- operates a paper mill and manufactures
customized tissues, towels, and specialty packaging.
Gorham Paper and Tissue and affiliate White Mountain Tissue, LLC
sought Chapter 11 protection (Bankr. D.N.H. Lead Case No. 20 12814
and 20-12815) on November 4, 2020. Gorham Paper was estimated to
have assets of $1 million to $10 million and liabilities of $50
million to $100 million.
The Honorable Karen B. Owens is the case judge. The Debtors tapped
Bernstein, Shur, Sawyer & Nelson, P.A. as their bankruptcy counsel,
Polsinelli PC as local counsel, and B. Riley Securities as an
investment banker. Donlin Recano & Company, Inc. is the claims and
noticing agent.
On November 10, 2020, The U.S. Trustee for Regions 3 and 9
appointed an official committee of unsecured creditors. Reed Smith
is the committee's legal counsel.
GREYSTAR REAL ESTATE: S&P Ups ICR to 'BB-' on Strong Performance
----------------------------------------------------------------
S&P Global Ratings raised its issuer credit and issue ratings on
Greystar Real Estate Partners LLC to 'BB-' from 'B+'. The outlook
is stable. The recovery rating on the senior secured notes is '3'
(65%), indicating its expectation of a meaningful recovery in the
event of default.
S&P said, "Our upgrade reflects Greystar's strong operating
performance, its successful integration of Alliance's Property
Management business, and its adequate liquidity. For the rolling 12
months ended March 31, 2021, Greystar's leverage and EBITDA
interest coverage improved to 2.9x and 5.0x, respectively, from
4.0x and 3.5x at the same time last year. While leverage is below
3.0x, we expect that, as development and construction activity
return to normal levels, and realized investment earnings
normalize, sustained leverage will revert to historical levels of
3.0x-4.0x.
"For year-end 2020, Greystar's adjusted EBITDA improved by $88.3
million to $231.5 million due to realized earnings of about $46
million from the sale of its iQ student portfolio and partial
contribution of $25 million from its acquisition of Alliance's PM
business. For 2021, we expect EBITDA to be $225 million to $250
million as the company realizes a full year from the Alliance
acquisition and development and construction activity normalizes.
We expect EBITDA to be volatile because of the realization of
equity investments, the timing of which is unpredictable and
dependent on market conditions. We expect operational EBITDA
(excluding realization of equity investments) to be $150 million to
$175 million.
"We expect Greystar to maintain its No. 1 position in multifamily
property management. With approximately 702,000 units managed
domestically, Greystar derives about 50% of its revenue from
property management, which is lower-margin but largely recurring in
nature. The company also derives about 40% of revenues from its
higher-margin development and construction business, which can be
more cyclical. Additionally, Greystar generates recurring revenue
from its investment management fees and implements an asset-light
strategy focused on raising and managing institutional capital
through diverse investment vehicles, which we view favorably."
As of March 31, 2021, Greystar had off-balance-sheet guarantees of
$1.1 billion, related to unconditional and irrevocable guarantees
on construction and multifamily mortgage loans, as well as
guarantees of lien-free completions of construction to construction
lenders and equity providers. While these guarantees could
significantly affect the company's leverage and liquidity, S&P
believes Greystar prudently manages these risks, as evidenced by
the fact that the company has not incurred any losses to date.
S&P's stable rating outlook over the next 12 months on Greystar
Real Estate Partners LLC reflects our expectations that the company
will operate with net debt to EBITDA of 3.0x-4.0x and EBITDA
interest coverage of 3.0x-6.0x. The outlook also reflects the
company's favorable market position in multifamily property
management service and maintain adequate liquidity.
S&P said, "We could lower the ratings over the next 12 months if
leverage rises above 4.0x or if the firm faces operational
challenges such that EBITDA coverage of interest drops below 3.0x
on a sustained basis. This would likely occur if Greystar made a
large, debt-financed acquisition or if the company's market
position were to face challenges, leading earnings to decline below
expectations.
"Although it is less likely, we could raise the ratings over the
next 12 months if leverage remains well below 3.0x, EBITDA coverage
rises above 6x on a sustained basis, and the firm maintains its
market position in multifamily property management.
"Our simulated default scenario contemplates a payment default in
2025 as a result of heightened competition and significant
operational issues.
"We assume a reorganization following the default, using an
emergence EBITDA multiple of 6.0x to value the company."
-- Simulated year of default: 2025
-- EBITDA at emergence: $94.2 million
-- EBITDA multiple: 6.0x
-- Net enterprise value (after 5% administrative costs): $537.1
million
-- Priority claims: $0 million
-- Collateral value available to secured creditors: $537.1
million
-- Total first-lien debt: $816.8 million
--Recovery expectations: 65%
Note: All debt amounts include six months of prepetition interest.
GULF MEDICAL: Plan to Distribute $469K of Remaining Funds
---------------------------------------------------------
Gulf Medical Services, Inc., filed with the Bankruptcy Court a
Disclosure Statement in support of its Plan of Reorganization.
The Debtor ceased operating its business on August 21, 2019 upon
the sale of its assets to Medical Logic Ft. Walton. Thereafter,
the sale proceeds of $1,925,000 were paid to the Debtor and
deposited into Debtor's attorney's trust account. The Debtor has
since made certain payments and non-financial transactions relating
to the Plan, as follows:
* At closing, $77,511 was paid to Regions Bank for the release
of the liens on the vehicles which were part of the sales
transaction;
* On October 17, 2019, the Court entered its Order Approving
Distribution to Secured Creditors;
* Also on October 17, the Court entered its Order Approving
Compromise with Regions Bank which authorized the transfer of the
320 Racetrack Road property to Regions Bank in exchange for a
credit towards the debt owed to Regions for $275,000;
* On November 13, 2019, the Court entered its Order Approving
Compromise with Philips Medical Capital, which settled the amount
of the secured claim owed to Philips Capital for the agreed upon
amount of $150,000;
* the Debtor paid attorney's fees and costs owed to the
Debtor's attorney, pursuant to the approved first and second
interim applications for professional compensation; and
* On December 18, 2020, the Court granted the Debtor's Motion
for Authority to Make Partial Distributions to Holders of
Administrative Claims which authorized the Debtor to make partial
payments equal to 60% of the allowed amount of each administrative
claim previously approved by the Court.
Moreover, the Debtor has determined from its accountant that the
tax liability for tax year 2019 will be zero based on various
losses the Debtor is able to use to offset the potential gain from
the sale.
After the payment of these debts and claims, and after the payment
of U.S. Trustee quarterly fees, the Debtor currently has on hand
the sum of $469,813. Accordingly, the Debtor now files the
Disclosure Statement and a proposed Plan of Reorganization which
proposes to distribute the remaining funds on hand.
A copy of the Disclosure Statement is available for free at
https://bit.ly/2S7EChq from PacerMonitor.com.
About Gulf Medical Services
Based in Pensacola, Florida, Gulf Medical Services, Inc. --
http://www.gulfmed.com/-- has been serving respiratory equipment,
sleep therapy equipment, and medical equipment to its customers
since 1987. The company accepts assignments and bills Medicare,
Medicaid, Blue Cross Blue Shield, TriCare, and many other private
insurance policies. Its gross revenue amounted to $7.89 million in
2017, $10.06 million in 2016 and $12.16 million in 2015.
Gulf Medical Services sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Fla. Case No. 18-30012) on Jan. 5,
2018. In the petition signed by Kenneth R. Steber, president, the
Debtor disclosed $1.73 million in assets and $5.15 million in
liabilities. Judge Jerry C. Oldshue Jr. presides over the case.
Steven J. Ford, Esq., at Wilson, Harrell, Farrington, Ford, Wilson,
Spain & Parsons P.A., serves as the Debtor's bankruptcy counsel.
HDG CONGRESS: Case Summary & 4 Unsecured Creditors
--------------------------------------------------
Debtor: HDG Congress, LLC
303 Wyman St.
Ste 300
Waltham, MA 02451-1255
Business Description: HDG Congress, LLC is primarily engaged in
renting and leasing real estate properties.
Chapter 11 Petition Date: June 4, 2021
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 21-10828
Debtor's Counsel: Cynthia Ravosa, Esq.
RAVOSA LAW OFFICES, P.C.
1 South Ave Ste 1
Natick, MA 01760-4600
Total Assets: $19,253,520
Total Liabilities: $21,730,947
The petition was signed by Kal Zhao, president.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/65ODYWI/HDG_Congress_LLC__mabke-21-10828__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Four Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. City of Boston Treasury $73,370
Dept./Bankruptcy Coordinator Ci
1 City Hall Sq Rm M-5
Boston, MA 02201-1020
2. Internal Revenue Service $0
PO Box 7346
Philadelphia, PA 19101-7346
3. KHRE SMA Funding, LLC $2,404,056
777 W Putnam Ave
Ste 1-2
Greenwich, CT 06830-5091
4. Massachusetts Department $0
of Revenue
PO Box 9564
Boston, MA 02114-9564
HDG STUART: Case Summary & 4 Unsecured Creditors
------------------------------------------------
Debtor: HDG Stuart LLC
303 Wyman St.
Ste 303
Waltham, MA 02451-1255
Business Description: HDG Stuart LLC is primarily engaged in
renting and leasing real estate properties.
The Debtor is the fee simple owner of a
property located at 27 Stuart St #29,
Boston, MA valued at $3.69 million
(based on broker's opinion).
Chapter 11 Petition Date: June 4, 2021
Court: United States Bankruptcy Court
District of Masachussetts
Case No.: 21-10829
Debtor's Counsel: Cynthia Ravosa, Esq.
RAVOSA LAW OFFICES, P.C.
1 South Ave Ste 1
Natick, MA 01760-4600
Total Assets: $3,695,120
Total Liabilities: $21,669,541
The petition was signed by Kai Zhao, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ENYY2DA/HDG_Stuart_LLC__mabke-21-10829__0001.0.pdf?mcid=tGE4TAMA
HEO INC: Plan Exclusivity Extended Thru October 18
--------------------------------------------------
Judge James R. Sacca of the U.S. Bankruptcy Court for the Northern
District of Georgia, Gainesville Division extended the periods
within which Debtor Heo, Inc. has the exclusive right to file a
Chapter 11 plan through and including October 18, 2021, and to
solicit votes to accept a proposed plan through and including
December 15, 2021.
On April 16, 2021, the Debtor participated in a mediation with Jae
S. Yoo and Ah Sa Yoo, the Debtor's tenants, and other parties to
the adversary proceeding currently pending in the United States
Bankruptcy Court for the Western District of Tennessee, Western
Division, Adversary Proceeding Number 21-00032. The Removed Case
refers to March 18, 2021, when the Debtor removed the state court
case pending in the Circuit Court of Tennessee for the Thirtieth
Judicial District at Memphis, Case Number CT-2849-19 to the
Bankruptcy Court for the Western District of Tennessee.
The Debtor and the Yoos are currently in settlement negotiations.
The Debtor requires sufficient time to resolve the issues raised at
the mediation either through a settlement agreement or through
litigation if the settlement negotiations are ultimately
unsuccessful before it can file a plan of reorganization.
As the Debtor's tenants, the Yoos represent the Debtor's primary
source of income and any plan of reorganization will ultimately
hinge on the outcome of the settlement negotiations. Thus, the
additional time will allow the Debtor to resolve the issues with
the Yoos and other parties to the Removed Case before it files a
plan of reorganization.
The Debtor anticipates filing and confirming a plan in the coming
months and this is the Debtor's first extension of exclusivity
periods. The Debtor will continue to do good faith negotiations
with its stakeholders and resolve any issues in their Chapter 11
case.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3vuZihX from PacerMonitor.com.
A copy of the Court's Extension Order is available at
https://bit.ly/3yKT6UZ from PacerMonitor.com.
About Heo, Inc.
Heo, Inc. owns and operates a commercial building located at 1356
Union Avenue Memphis, Tennessee. Heo, Inc. is wholly owned and
operated by Hyo S. Heo.
Heo, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N. D. Ga. Case No. 21-20173) on February 18, 2021. In
the petition signed by Hyo Sook Heo, authorized representative, the
Debtor disclosed up to $100,000 in assets and up to $10 million in
liabilities.
Judge James R. Sacca oversees the case. Rountree Leitman & Klein,
LLC represents the Debtor as counsel.
HEO INC: Wins Cash Collateral Access Thru June 24
-------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Gainesville Division, has authorized Heo, Inc. to use cash
collateral on an interim basis through June 24, 2021, the date of
the final hearing.
The Debtor requires the use of cash collateral to fund critical
operations.
The Debtor is a borrower on loans from the U.S. Small Business
Administration and the Bank of Hope, which may assert security
interests in the Debtor's personal and real property. The Debtor
says that as of the Petition Date, the amount owed to the Lenders
is $926,478.
The Debtor asserts that it generates substantially all of its
revenue from the operation of its property. The Debtor
acknowledges the revenue from the property may constitute Cash
Collateral as that term is defined in 11 U.S.C. section 363.
As adequate protection for the Debtor's use of cash collateral, the
Lenders, to the extent they hold a valid lien, security interest,
or right of setoff as of the Petition Date under applicable law,
are granted a valid and properly perfected lien on all property
acquired by the Debtor after the Petition Date that is the same or
similar nature, kind, or character as each party's respective
prepetition collateral, except that no replacement lien will attach
to the proceeds of any avoidance actions under Chapter 5 of the
Bankruptcy Code. The Adequate Protection Liens will be deemed
automatically valid and perfected upon entry of the Order.
A copy of the Court's order is available for free at
https://bit.ly/3if8T8L from PacerMonitor.com.
About Heo, Inc.
Heo, Inc. owns and operates a commercial building located at 1356
Union Avenue Memphis, Tennessee. Heo, Inc. is wholly owned and
operated by Hyo S. Heo.
Heo, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Ga. Case No. 21-20173) on February 18, 2021. In
the petition signed by Hyo Sook Heo, authorized representative, the
Debtor disclosed up to $100,000 in assets and up to $10 million in
liabilities.
Judge James R. Sacca oversees the case.
Rountree Leitman & Klein, LLC represents the Debtor as counsel.
HERITAGE RAIL: Trustee Selling Assets to Coastal Rail for $120K
---------------------------------------------------------------
Tom Connolly, the Chapter 11 Trustee of Heritage Rail Leasing, LLC,
asks the U.S. Bankruptcy Court for the District of Colorado to
authorize him to sell the following Heritage rail cars to Coastal
Rail LLC for $120,000, subject to higher and better bids: (i) SLRG
257 (ACL 257) and (ii) SLRG 4716 ("Cape View").
Heritage owns rail cars, locomotives, rolling stock and equipment
that it used in connection with its rail car leasing business.
The Trustee has continued to respond to inquiries from prospective
purchasers of Heritage's assets. After considering available
options within the context of the current economic environment and
the status of Heritage's operations, the Trustee determined in his
business judgment to sell the Assets to Coastal Rail.
After arms'-length negotiations, the Trustee negotiated a sale of
the Assets to Coastal Rail at an aggregate purchase price of
$120,000 on the terms set forth herein and in the purchase
agreement, subject to higher and better bids.
Big Shoulders Capital, LLC has asserted it has first priority
security interest in SLRG 257 pursuant to a Loan and Security
Agreement between Heritage and Big Shoulders dated Feb. 27, 201.
The Trustee understands that Big Shoulders has consented to the
Trustee's sale of SLRG 257 subject to a carve out of 20% of the net
purchase price of SLRG 257 less closing costs, including any
applicable storage fees to remain with the Heritage estate free and
clear of any Big Shoulders' lien, with rights otherwise reserved.
Upon information and belief of the Trustee, the Assets are not
otherwise subject to any security interest, claim or lien. The
Trustee has investigated the fair market value of the Assets by
speaking with industry sources, persons familiar with the Assets
and Big Shoulders. Based on this investigation, the Trustee has
determined that the Coastal Rail Purchase Price represents fair
market value. He now seeks authority to further market-test the
transaction contemplated by the Purchase Agreement to obtain the
highest or best offer for the Assets.
The material terms of the Purchase Agreement are:
a. The Coastal Rail Purchase Price for the Assets is
allocated as follows: (i) SLRG 257 (ACL 257) – $35,000 and (ii)
SLRG 4716 ("Cape View") - $85,000
b. The Purchase Agreement is subject to, and will not become
effective, until it is approved in its entirety by final, written,
non-appealable Order of the Court.
c. Coastal Rail will accept the Assets at closing on an "as
is, where is" basis.
d. The Closing will occur on the first business day upon
which Court approval provided herein is effective and not subject
to a stay, or upon such other day upon which the parties reasonably
agree.
The Trustee does not believe that Court-approved formal bidding
procedures or a break up fee are needed in light of the simplicity
of the proposed transaction. Instead, he asks that any competing
bids for all or any of the Assets be received by deadline to object
to the Motion.
Any parties submitting a competing bid that wish to inspect the
Assets will be required to comply with all relevant inspection
procedures and pay any necessary inspection fees. If any
objections or competing bids are received, the Trustee will hold an
auction and bidding can occur at that auction. Any competing bid
for all or any of the Assets should be on the same terms as the
Purchase Agreement (other than the purchase prices) and be
accompanied by a 5% earnest money deposit and show ability to
close. Initial overbids must be at least 5% more than the Coastal
Rail Purchase Price as allocated.
To facilitate the sale of the Assets, the Trustee also requests
authorization to sell the assets free and clear of any and all
liens, claims, encumbrances, and other interests including (without
limitation) those of tax authorities, storage facilities, Big
Shoulders and any Heritage affiliate entity.
The Trustee requests that any order approving the sale of the
Assets be effective immediately, thereby waiving the 14-day stay
imposed by Bankruptcy Rules 6004. The waiver of the 14-day stay is
necessary for the sale of the Assets to close and the funding to be
received as expeditiously as possible.
A copy of the Motion is available at https://tinyurl.com/7eu7r6wf
from PacerMonitor.com free of charge.
About Heritage Rail Leasing
Heritage Rail Leasing, LLC leases rail rolling stocks, locomotives
and track equipment.
On Aug. 21, 2020, Portland Vancouver Junction & Railroad Inc.,
Vizion Marketing LLC and D.L. Paradeau Marketing LLC filed a
Chapter 11 involuntary petition against Heritage Rail Leasing.
The
creditors are represented by Michael J. Pankow, Esq., at
Brownstein
Hyatt Farber Schreck, LLP.
Judge Thomas B. McNamara oversees the case.
L&G Law Group LLP and Moglia Advisors serve as the Debtor's legal
counsel and restructuring advisor, respectively. Alex Moglia of
Moglia Advisors is the Debtor's chief restructuring officer.
On Oct. 19, 2020, the Office of the U.S. Trustee appointed a
committee to represent unsecured creditors in the Debtor's Chapter
11 case. The committee is represented by Goldstein & McClintock
LLLP and the Law Offices of Douglas T. Tabachnik, P.C.
On Oct. 28, 2020, the Court approved the appointment of Tom H.
Connolly as the Debtor's Chapter 11 trustee. The trustee tapped
Brownstein Hyatt Farber Schreck, LLP as his counsel.
HERTZ CORP: Advances $56 Million Suit vs. Ex-Senior Managers
------------------------------------------------------------
Jacklyn Wille of Bloomberg Law reports that Hertz Corp. advances
the $56 million suit against former senior managers.
Hertz Corp. on Thursday, June 3. 2021, moved closer to clawing back
$56 million in incentive compensation, when a federal judge in New
Jersey declined to dismiss claims that ex-senior managers involved
in an accounting scandal violated their separation agreements and
company standards of conduct.
Hertz can move forward with claims that former Chief Executive
Officer Mark Frissora and John Zimmerman, its former general
counsel, violated specific provisions of business conduct that were
in effect in 2011 and 2012, Judge Esther Salas said in an
unpublished ruling.
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.
HOOD LANDSCAPING: Selling 269 Acres of Cook County Land for $677K
-----------------------------------------------------------------
Hood Landscaping Products, Inc., asks the U.S. Bankruptcy Court for
the Middle District of Georgia to authorize the sale of the
following two parcels of real estate free of liens and claims:
a. approximately 193.58 acres (Parcel No. 0046019) located on
Brushy Creek Church Road, Sparks, Cook County, Georgia, to Cook
County Land Ventures, L.L.C. for $2,000 per acre; and
b. approximately 75.62 acres (Parcel Nos. 0020036 and
0020037) located on Hwy 41 N., Lenox, Cook County, Georgia, to Cook
County Land Ventures for $290,000.
A hearing on the Motion is set for June 23, 2021, at 10:30 a.m.
A. Parcel No. 0046019
The Debtor owns Parcel No. 0046019 which is property of the
bankruptcy estate.
The parcel is subject to the following liens or claims, shown in
the order of priority:
A. Farmers and Merchants Bank ("FMB") security deed recorded
in the Cook County Clerks' Office securing a debt of approximately
$4,456,600;
B. Cook County Tax Commissioner claim for real estate taxes
estimated to be $17,704.16;
C. American Zurich Insurance Company claim by a Fi. Fa.,
issued by the Superior Court of Cook County, Georgia in case no.
2015-CV-025 recorded in Lien Docket 45, Page 243 on 6-15-17 in the
amount of $180,636.12;
D. Georgia Department of Labor claim by an Unemployment
Contribution Fi. Fa., 201808946 dated 2-16-18 and recorded in Lien
Book 48, Page 301 on 3-28-18 in the amount of $1,726.36;
E. Georgia Department of Labor claim by an Unemployment
Contribution Fi. Fa, 201823940 dated 5-16-18 and recorded in Lien
Book 50, Page 229 on 7-16-18 in the amount of $1726.36;
F. Georgia Department of Labor claim by an Unemployment
Contribution Fi. Fa., 201840807 dated 8-16-18 and recorded in Lien
Book 5 Page 235 on 10-15-18 in the amount of $818.02;
G. Trinity Packaging Corporation claim by a Writ of Fi. Fa.
issued by the Superior Court of Cook County, Georgia in case no.
2018-CV-F008 recorded in Lien Book 52, Page 48 on 12-11-18 in the
amount of$27,935.51;
H. Georgia Department of Labor claim by an Unemployment
Contribution Fi. Fa., 201858142 dated 11-28-18 and recorded in Lien
Book 52, Page 116 on 1-25-19 in the amount of $818.02;
I. Georgia Department of Labor claim by an Unemployment
Contribution Fi. Fa., 201912507 dated 2-26-19 and recorded in Lien
Docket 52, Page 276 on 4-15-19 in the amount of $848.25; and
J. House-Hasson Hardware Co., Inc. claim by a Writ of Fi. Fa.
Issued by the Superior Court of Cook County, Georgia in case no
2020CV046 recorded in Lien Book 58, Page 6 on May 6, 2020 in the
amount of $10,304.24.
The Debtor proposes to sell the parcel free and clear of liens and
claims to the Buyer for a gross sale price of $2,000 per acre. If
the actual acreage is 193.58 acres, the gross sale price will be $3
87,160. No real estate commission will be paid as part of the
sale. The terms of the sale are contained in the Real Estate Sales
Contract dated May 11, 2021.
The Debtor proposes to pay the following at closing from the sale
proceeds of the parcel: closing costs including attorney/closing
fees to closing attorney Pearce Scott for preparing and recording
the Warranty Deed estimated to be $201; real estate transfer tax to
Cook County Clerk of the Superior Court; real estate taxes to Cook
County Tax Commissioner estimated to be $17,704.16; and to pay the
balance of the sale proceeds to FMB on account of its first
priority security deed. Since FMB's claim exceeds the value of the
parcel, there will be no sale proceeds available to pay any
subordinate lien or claim.
B. Parcel Numbers 0020036 and 0020037
The Debtor owns Parcel Numbers 0020036 and 0020037 which is
property of the bankruptcy estate.
The property is subject to the following liens or claims, shown in
the order of priority:
A. Farmers and Merchants Bank ("FMB") security deed recorded
in the Cook County Clerks' Office securing a debt of approximately
$4,456,600;
B. Cook County Tax Commissioner claim for real estate taxes
estimated to be $8,536.53;
C. American Zurich Insurance Company claim by a Fi. Fa.,
issued by the Superior Court of Cook County, Georgia in case no.
2015-CV-025 recorded in Lien Docket 45, Page 243 on 6-15-17 in the
amount of $180,636.12;
D. Georgia Department of Labor claim by an Unemployment
Contribution Fi. Fa., 201808946 dated 2-16-18 and recorded in Lien
Book 48, Page 301 on 3-28-18 in the amount of $1,726.36;
E. Georgia Department of Labor claim by an Unemployment
Contribution Fi. Fa, 201823940 dated 5-16-18 and recorded in Lien
Book 50, Page 229 on 7-16-18 in the amount of $1,726.36;
F. Georgia Department of Labor claim by an Unemployment
Contribution Fi. Fa., 201840807 dated 8-16-18 and recorded in Lien
Book 5 Page 235 on 10-15-18 in the amount of $818.02;
G. Trinity Packaging Corporation claim by a Writ of Fi. Fa.
issued by the Superior Court of Cook County, Georgia in case no.
2018-CV-F008 recorded in Lien Book 52, Page 48 on 12-11-18 in the
amount of $27,935.51;
H. Georgia Department of Labor claim by an Unemployment
Contribution Fi. Fa., 201858142 dated 11-28-18 and recorded in Lien
Book 52, Page 116 on 1-25-19 in the amount of $818.02;
I. Georgia Department of Labor claim by an Unemployment
Contribution Fi. Fa., 201912507 dated 2-26-19 and recorded in Lien
Docket 52, Page 276 on 4-15-19 in the amount of $848.25; and
J. House-Hasson Hardware Co., Inc. claim by a Writ of Fi. Fa.
Issued by the Superior Court of Cook County, Georgia in case no
2020CV046 recorded in Lien Book 58, Page 6 on May 6, 2020 in the
amount of $10,304.24.
The Debtor proposes to sell property free and clear of liens and
claims to the Buyer for a gross sale price of $290,000. No real
estate commission will be paid as part of the sale. The terms of
the sale are contained in the Sales Contract dated May 11, 2021.
The Debtor proposes to pay the following at closing item the sale
proceeds of the property: closing costs including attorney/closing
fees to closing attorney Pearce Scott for preparing and recording
the Warranty Deed estimated to be $201; real estate transfer tax to
Cook County Clerk of the Superior Court; real estate taxes to Cook
County Tax Commissioner estimated to be $8,536.53; and the balance
of the sale proceeds will be paid to FMB on account of its first
priority security deed. Since FMB's claim exceeds the value of the
property, there will be no sale proceeds available to pay any
subordinate lien or claim.
By the Motion, the Debtor asks the Court to approve the relief
sought.
A copy of the Contracts is available at
https://tinyurl.com/2wk997n4 from PacerMonitor.com free of charge.
The Purchaser:
COOK COUNTY LAND VENTURES, L.L.C.
P.O. Box 68
Adel, GA 31620
About Hood Landscaping
Hood Landscaping Products, Inc., a wholesaler of landscaping
equipment and supplies in Adel, Georgia., filed a voluntary
petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga.
Case No. 19-70644) on June 3, 2019. In the petition signed by CFO
Leon Hood, the Debtor estimated up to $50,000 in assets and $1
million to $10 million in liabilities. Judge John T. Laney III
oversees the case. Kelley, Lovett, Blakey & Sanders, P.C., is the
Debtor's counsel.
HORIZON GLOBAL: All Four Proposals Passed at Annual Meeting
-----------------------------------------------------------
Horizon Global Corporation held its 2021 annual meeting of
stockholders on May 28, 2021, at which the stockholders:
(1) elected John F. Barrett, Terrence G. Gohl, Frederick A.
Henderson, John C. Kennedy, Ryan L. Langdon, Brett N.
Milgrim,
Debra S. Oler, and Mark D. Weber as directors to serve until
the Company's 2022 annual meeting of stockholders;
(2) ratified the appointment of Deloitte & Touche LLP as the
Company's independent registered public accounting firm for
the fiscal year ending Dec. 31, 2021;
(3) approved, on a non-binding advisory basis, the compensation
of
the Company's named executive officers; and
(4) recommended, on a non-binding advisory basis, a
yearly frequency of future advisory votes to approve the
compensation of the Company's named executive officers.
The Company has determined that future stockholder advisory votes
on named executive officer compensation will be held every year
until the next vote on the frequency of such advisory votes.
About Horizon Global
Horizon Global -- http://www.horizonglobal.com-- is a designer,
manufacturer, and distributor of a wide variety of
custom-engineered towing, trailering, cargo management and other
related accessory products in North America, Australia and Europe.
The Company serves OEMs, retailers, dealer networks and the end
consumer.
Horizon Global reported a net loss attributable to the Company of
$36.56 million for the 12 months ended Dec. 31, 2020, compared to
net income attributable to the company of $80.75 million for the 12
months ended Dec. 31, 2019. As of March 31, 2021, the Company had
$468.15 million in total assets, $492.41 million in total
liabilities, and a total shareholders' deficit of $24.26 million.
HORSE BUTTE: Seeks to Hire Vanden Bos & Chapman as Legal Counsel
----------------------------------------------------------------
Horse Butte Equestrian Center, LLC seeks approval from the U.S.
Bankruptcy Court for the District of Oregon to hire Vanden Bos &
Chapman, LLP as its legal counsel.
The firm's services include:
(a) advising the Debtor regarding its powers and duties in the
operation of its business;
(b) instituting adversary proceedings;
(c) representing the Debtor generally in its Chapter 11 case
and preparing legal papers; and
(d) other legal services necessary to administer the Debtor's
bankruptcy case.
The firm will be paid at these rates:
Ann K. Chapman, Managing Partner $475 per hour
Douglas R. Ricks, Partner $425 per hour
Christopher N. Coyle, Partner $415 per hour
Colleen A. Lowry, Associate $375 per hour
Daniel C. Bonham, Associate $285 per hour
Certified Bankruptcy Assistants $260 per hour
Legal Assistants $145 per hour
As disclosed in court filings, Vanden Bos & Chapman is a
"disinterested person" as defined by Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Douglas R. Ricks, Esq.
Vanden Bos & Chapman, LLP
319 SW Washington St., Ste. 520
Portland, OR 97204
Tel: 503-241-4869
Fax: 503-241-3731
Email: doug@vbcattorneys.com
About Horse Butte Equestrian Center
Bend, Ore.-based Horse Butte Equestrian Center, LLC filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Ore. Case No. 21-31253) on May 28, 2021. Elizabeth
C. McCool, manager, signed the petition. At the time of the
filing, the Debtor disclosed total assets of up to $10 million and
total liabilities of up to $1 million. Douglas R. Ricks, Esq., at
Vanden Bos & Chapman, LLP, represents the Debtor as legal counsel.
HORSE BUTTE: Taps Cascade Sothebys to Sell Oregon Property
----------------------------------------------------------
Horse Butte Equestrian Center, LLC seeks approval from the U.S.
Bankruptcy Court for the District of Oregon to hire Cascade
Sothebys International Realty to sell its real property at 60360
Horse Butte Road, Bend, Ore.
Cascade Sothebys will receive a 5 percent commission on the gross
sales price.
Pamela Mayo Phillips and Brook Havens are the realtors at Cascade
Sothebys who will be providing the services. Both realtors do not
represent interest adverse to the Debtor and its estate, according
to court filings.
The firm can be reached through:
Pamela Mayo Phillips
Brook Havens
Cascade Sothebys International Realty
Bend Old Mill Office
650 SW Bond Street, Suite 100
Bend OR 97702
Phone: 541-383-7600
541-923-1376
About Horse Butte Equestrian Center
Bend, Ore.-based Horse Butte Equestrian Center, LLC filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Ore. Case No. 21-31253) on May 28, 2021. Elizabeth
C. McCool, manager, signed the petition. At the time of the
filing, the Debtor disclosed total assets of up to $10 million and
total liabilities of up to $1 million. Douglas R. Ricks, Esq., at
Vanden Bos & Chapman, LLP, represents the Debtor as legal counsel.
INDIGO NATURAL: Moody's Puts B1 CFR Under Review for Upgrade
------------------------------------------------------------
Moody's Investors Service placed Indigo Natural Resources LLC's
ratings on review for upgrade following Southwestern Energy
Company's announcement that it will acquire Indigo. Indigo ratings
on review include its B1 Corporate Family Rating, B1-PD Probability
of Default Rating and B2 senior unsecured notes rating.
Southwestern is acquiring Indigo in a transaction valued at about
$2.7 billion. Consideration is comprised of $400 million in cash,
about $1.6 billion in Southwestern common stock and $700 million of
assumed Indigo notes. The transaction was approved by each of
Indigo's and Southwestern's board of directors. Southwestern
expects to close the transaction early in the fourth quarter of
2021.
"The potential ownership by Southwestern is a positive development
for Indigo given Southwestern's stronger credit profile," commented
Jonathan Teitel, a Moody's analyst.
On Review for Upgrade:
Issuer: Indigo Natural Resources LLC
Probability of Default Rating, Placed on Review for Upgrade,
currently B1-PD
Corporate Family Rating, Placed on Review for Upgrade, currently
B1
Senior Unsecured Notes, Placed on Review for Upgrade, currently B2
(LGD5)
Outlook Actions:
Issuer: Indigo Natural Resources LLC
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE/ FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Indigo's ratings were placed on review for upgrade based on the
company's potential ownership by Southwestern Energy Corporation
(Ba2 stable) which has a stronger credit profile. Southwestern will
assume Indigo's $700 million of senior unsecured notes due 2029.
Indigo had $631 million of net debt as of March 31, 2021 pro forma
for the recent sale of its non-core assets in the Cotton Valley.
Southwestern has not announced its plans for Indigo's outstanding
senior notes after closing the acquisition. If Indigo's notes
remain outstanding and end up with the same set of guarantors as
Southwestern's notes, then the ratings on Indigo's notes would be
upgraded to Southwestern's senior unsecured rating level. If Indigo
were to become an unguaranteed subsidiary of Southwestern following
the acquisition and continue to provide separate audited financial
statements, then its ratings would be upgraded based on the level
of anticipated parental support. However, the ratings in that case
would consider Indigo's standalone credit profile. If separate
financial statements and sufficient disclosures are not made
available to support the maintenance of ratings, Moody's will
likely withdraw Indigo's ratings.
Indigo, headquartered in Houston, Texas, is a privately owned
independent exploration and production company focused on natural
gas production in North Louisiana in the Haynesville and Bossier
Shales. Indigo produces 1.0 Bcf/d and expects to produce 1.1 Bcf/d
by closing of the transaction.
The principal methodology used in these ratings was Independent
Exploration and Production Industry published in May 2017.
INDIGO NATURAL: S&P Placed 'B+' ICR on CreditWatch Positive
-----------------------------------------------------------
S&P Global Ratings placed all of its ratings on Indigo Natural
Resources LLC and its debt, including the 'B+' issuer credit rating
and 'BB-' issue-level rating, on CreditWatch with positive
implications.
This reflects the likelihood that S&P will raise the issuer-level
rating by up to three notches and the issue-level rating by up to
two notches following the close of the acquisition.
Southwestern Energy Co. (BB-/Watch Pos/--) has announced its
acquisition of Indigo Natural Resources LLC for $2.7 billion,
including $400 million of cash, 339 million shares of Southwestern
stock, and the assumption of Indigo's $700 million, 5.375% senior
notes due 2029.
S&P said, "We put the ratings on CreditWatch positive to reflect
the potential that we will raise the ratings following the close of
the acquisition. Both companies' boards have approved the
transaction, which is still subject to shareholder approval,
regulatory approvals, and other customary closing conditions.
"We expect to resolve the CreditWatch placement after the close of
the transaction, which is expected to be in the fourth quarter of
2021."
INDIVIOR FINANCE: Moody's Hikes CFR to B2, Outlook Stable
---------------------------------------------------------
Moody's Investors Service upgraded the ratings of RBP Global
Holdings Ltd and Indivior Finance S.ar.l. (collectively
"Indivior"). Moody's upgraded Indivior's Corporate Family Rating to
B2 from B3, Probability of Default Rating to B2-PD from B3-PD and
ratings on the senior secured bank credit facilities to B2 from B3.
There was no change to Indivior's SGL-1 Speculative Grade Liquidity
Rating. The outlook on all rated entities is stable.
The ratings upgrade reflects Moody's view that rising use of
Sublocade, coupled with cash balances above $900 million, will give
Indivior the flexibility to improve profitability through 2022.
This is despite increasing investment to support commercialization
of Sublocade, Indivior's newer injectable burprenorphine product,
as well as pricing pressure on Suboxone Film. As transition from
Suboxone Film to Sublocade steadily continues, the negative impact
of generic competition for Suboxone film will become less relevant.
To date, the company has avoided an extremely steep decline in
Suboxone Film revenue due to steady market share despite generic
competition. Indivior's schedule of litigation settlement payments
will be manageable due to Indivior's significant cash balances.
Rating upgraded:
Issuer: RBP Global Holdings Ltd
Corporate Family Rating to B2 from B3
Probability of Default Rating to B2-PD from B3-PD
$50 million senior secured revolving credit facility to B2 (LGD3)
from B3 (LGD3)
Issuer: Indivior Finance S.ar.l.
Senior secured term loans to B2 (LGD3) from B3 (LGD3)
Outlook Actions:
The outlook on all entities is stable.
RATINGS RATIONALE
Indivior's B2 Corporate Family Rating reflects significant revenue
concentration in buprenorphine-based products, which represent the
substantial majority of the company's revenue. Concentration in
bupenorphine will continue to be a challenge as Sublocade replaces
Suboxone Film as the largest product over time. Moody's expect
gross debt/EBITDA to rise in 2021 assuming further erosion in
Suboxone Film revenue and higher investment in the
commercialization of Sublocade for future growth. Moody's believes
that after peaking in 2021, debt/EBITDA will improve to around 7x
in 2022. Moody's debt adjustments include the present value of
Indivior's settlement payments which are being paid on a fixed
schedule and add about 4x of adjusted financial leverage to derive
Moody's 2022 estimate. Settlement payments, while manageable, will
also be a drag on cash flow for the foreseeable future. Supporting
the rating is Indivior's significant cash balance of more than $900
million, prior to settlement payments, relative to $234 million of
funded debt.
The SGL-1 Speculative Grade Liquidity Rating is supported by
Indivior's large reported cash balance of $945 million at March 31,
2021. Indivior has no remaining settlement payments until early
2022. Moody's expects cash balances will remain in excess of $800
million over the next 12 to 18 months, incorporating working
capital fluctuations as well as significant investments to support
the commercial uptake. Indivior has a $50 million revolver expiring
in December 2022 that Moody's expects will remain undrawn. The
credit agreement contains a maximum 3 times net secured debt/EBITDA
covenant that permits up to $250 million of cash to be netted.
Moody's believes that covenant compliance cushion will be good over
the next twelve months given its net cash position.
ESG considerations include Indivior's very high social risks
relating to cash outflows for settled litigation. Indivior will be
making cash settlement payments to the DOJ related to
opioid-related litigation for various years. Governance
considerations include Indivior's policy to maintain cash in excess
of its $233 million outstanding balance on its term loan. As part
of the DOJ settlement, Indivior entered into a 5-year Corporate
Integrity Agreement (CIA) with the Office of Inspector General of
the Department of Health and Human Services (HHS), another
governance consideration.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to a downgrade include a significant
depletion of cash prior to Indivior's term loan maturing or if
positive trends in Sublocade and Perseris reverse such that EBITDA
becomes negative.
Factors that could lead to an upgrade include fast uptake in the
launch of Sublocade and Perseris and improved revenue diversity.
UK-based RBP Global Holdings Ltd is a subsidiary of publicly-traded
Indivior PLC (collectively with other subsidiaries "Indivior"), a
global specialty pharmaceutical company headquartered in Richmond,
Virginia. Indivior is focused on the treatment of opioid addiction
and closely related mental health disorders. Reported revenue for
the twelve months ended March 31, 2021 approximated $674 million.
The principal methodology used in these ratings was Pharmaceutical
Industry published in June 2017.
ION GEOPHYSICAL: S&P Raises ICR to 'CCC' After Debt Restructuring
-----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
marine seismic data company ION Geophysical Corp. to 'CCC' from
'SD' (selective default).
S&P said, "At the same time, we assigned our 'CCC' issue-level
rating and '3' recovery rating to the company's newly issued
second-lien notes due 2025. We also raised our issue-level on the
stub portion of ION's notes due December 2021 to 'CC' from 'D' and
revised our recovery rating to '6' from '2'.
"Our 'CCC' rating reflects the company's unsustainable leverage and
the potential for a liquidity shortfall over the next 12 months.
After a 30% year-over-year decline in its revenue in 2020 and a 49%
sequential decline in the first quarter of 2021, ION is highly
dependent on an improvement in demand for offshore seismic data to
survive. After posting negative EBITDA in the first quarter, we
expect the company's revenue and margins to improve for the rest of
the year due to higher and more stable crude oil prices and the
launch of its prefunded 3D acquisition program in the North Sea. In
addition, the recent successful licensing rounds in Norway and the
U.S. Gulf of Mexico bode well for the company because these events
typically lead to increased demand for seismic data. Nevertheless,
we expect ION's average funds from operations (FFO) to debt to be
negative and forecast debt to EBITDA of over 30x in 2021 (we adjust
our EBITDA figures for the costs of acquiring multi-client seismic
data, which are typically reported as capital expenditure under
generally accepted account principles [GAAP] accounting)."
The company's liquidity has improved following its debt
restructuring but remains thin. In April, ION exchanged about 94%
of its $121 million 9.125% second-lien notes due December 2021 for
$20.7 million of cash (including $3.6 million of accrued and unpaid
interest), 6.1 million shares of its stock, and $84.6 million of
new 8.0% second-lien convertible notes due December 2025. At the
same time, its stockholders exercised $41.8 million of rights,
which ION paid with $30.1 million of new notes and $11.8 million of
new shares. In addition, it paid the backstop fees of 5% with $1.5
million of new notes and 215,000 shares of its stock. All together,
the company issued $116 million of new second-lien notes and netted
$14 million of proceeds from the transaction. Although this has
materially improved ION's liquidity position, by pushing out the
maturity of most of its debt to 2025 and increasing its cash
balance to nearly $48 million, it still has $7 million of the old
notes maturing in December 2021 (which have been stripped of their
security) and currently no availability under its credit facility
due August 2023. S&P expects the company will continue to burn cash
until the market recovers.
S&P said, "We expect ION's business conditions to remain
challenging as oil and gas companies continue to limit their
capital expenditure, particularly in offshore areas. Oil and gas
exploration and production (E&P) companies have remained
disciplined in their capital spending despite the strength in crude
oil prices. In particular, they have reined in their offshore
activity due to the lag between the initial capital outlays and the
receipt of cash flows from such projects. This has led to lower
demand for the offshore seismic data and processing ION provides.
Based on our Brent crude oil price assumptions of $60 per barrel
(/bbl) for the rest of 2021 and 2022 and $55/bbl thereafter, we do
not expect offshore activity to materially recover until at least
late 2022.
"The negative outlook on ION reflects its currently unsustainable
leverage and our view that it could face a liquidity shortfall over
the next 12 months if the demand for offshore seismic data does not
improve in the second half of 2021. We currently estimate the
company will have negative FFO to debt and debt to EBITDA of over
30x in 2021.
"We could lower our rating on ION if it is unable to cover its
interest payments and small debt maturity in December, which would
most likely occur if the demand for seismic data doesn't recover
due to weaker or more volatile crude oil prices. We could also
lower our rating if the company breached a covenant on its credit
facility, potentially accelerating the maturity of its outstanding
borrowings.
"We could raise our rating on ION if it improves its cash flows and
liquidity such that we believe it would be able to comfortably
cover its capital expenditure and debt maturities over the next two
years while generating positive FFO. This would most likely occur
if oil prices increase and remain stable such that E&P companies
increase their offshore exploration activity."
K3D PROPERTY: Wins Cash Collateral Access Thru August 28
--------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Tennessee,
Southern Division, has authorized K3D Property Services, LLC to use
cash collateral on an interim basis and provide adequate protection
to Truist Bank f/k/a Suntrust Bank and First Citizens National Bank
through August 28, 2021.
The Debtor is authorized to use cash collateral for actual and
necessary expenses as reflected in the budget. The Debtor may vary
from the budget on a weekly basis by as much as 20% per category
budgeted at under $1,000 weekly and by as much as 10% per category
budgeted at over $1,000 weekly without first obtaining approval
from Truist. The Debtor may carry forward all unspent monies from
week to week. In addition the Debtor may apply as much as 75% of
excess gross revenues to costs of goods sold and the remaining 25%
to overhead expenses.
As adequate protection for the Debtor's use of cash collateral, the
Lenders are granted valid, perfected and enforceable continuing
replacement liens and security interests, to the extent the Lenders
held valid, perfected and enforceable security interests in the
Debtor's pre-petition assets.
In addition, the Debtor will pay $3,500 to Truist by the 15th day
of each month during the period and $790 to FCNB by the 1st day of
each month during this period.
The Debtor will also insure its property against all risk to which
it is exposed, including loss, damages, fire, theft and all other
risk, in an amount not less than the fair market value of such
collateral, with such companies, under such policies and in such
form as is appropriate for a business of a type similar to the
Debtor's business, using sound business judgement.
If Truist Bank's interest in cash collateral deteriorates, it will
have a superpriority administrative expense claim ahead of
administrative claims.
A copy of the order is available for free at https://bit.ly/3fN0Deq
from PacerMonitor.com.
About K3D Property Services
K3D Property Services, LLC offers a variety of services, including
home remodeling, basement finishing, drywall installation and
finishing, tile installation, carpet installation, wall framing,
bathroom remodeling, kitchen remodeling, deck installation and
maintenance, interior and exterior painting, commercial painting,
wallpaper and popcorn ceiling removal, deck staining, concrete
floor coatings, and metal roof painting.
K3D Property Services filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tenn. Case No. 19
15361) on Dec. 23, 2019. The petition was signed by Kenneth Morris,
its managing member. At the time of filing, the Debtor had
estimated $1 million to $10 million in both assets and
liabilities.
Judge Shelley D. Rucker oversees the case.
The Debtor tapped Farinash & Stofan and The Fox Law Corporation,
Inc. as bankruptcy counsel; The Law Offices of Stephan Wright PLLC
as special counsel; Lucove, Say & Co. as accountant; and Pointe
Commercial Real Estate, LLC as real estate broker.
KC PANORAMA: Case Summary & 4 Unsecured Creditors
-------------------------------------------------
Debtor: KC Panorama LLC
303 Wyman St.
Ste 300
Waltham, MA 02451-1255
Business Description: KC Panorama LLC is primarily engaged in
renting and leasing real estate properties.
The Debtor is the fee simple owner of a
property located at 5 Concord Rd, Weston,
MA, valued at 11.7 million (based on broker's
opinion).
Chapter 11 Petition Date: June 4, 2021
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 21-10827
Debtor's Counsel: Cynthia Ravosa, Esq.
RAVOSA LAW OFFICES, P.C.
1 South Ave Ste 1
Natick, MA 01760-4600
Total Assets: $11,703,396
Total Liabilities: $23,507,162
The petition was signed by Kai Zhao, president.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/KSRVUYQ/KC_PANORAMA_LLC__mabke-21-10827__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Four Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Internal Revenue Service $0
PO Box 7346
Philadelphia, PA 19101-7346
2. KHRE SMA Funding, LLC $9,954,870
33 Benedict Pl
Greenwich, CT 06830-5316
3. Massachusetts Department of Revenue $0
PO Box 9564
Boston, MA 02114-9564
4. Town of Weston $49,586
PO Box 378
Weston, MA 02493-0002
KEITH M. RUEGSEGGAR: $37K Sale of Westminster Asset to Queen OK'd
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of South Carolina
authorized the private sale proposed by Keith Michael Ruegseggar
and Cathy Gaddis Ruegsegger of the residential real property with
improvements thereon located at 427 Kingston Loop, in Westminster,
South Carolina, and bearing tax map number 316—05-01-014, to
Michael Queen for $37,000.
The following personal property is included in the sale: washer,
dryer, oven, refrigerator, and electric water heater.
The lien claimed by the named creditor will be paid upon said
sale.
The stay provided by Fed. R. Bankr. P. 6004 does not apply to the
sale.
The bankruptcy case is In re: Keith Michael Ruegseggar and Cathy
Gaddis Ruegsegger, (Bankr. D.S.C. Case No. 20-04559-HB).
L'OCCITANE INC: Court Extends Plan Exclusivity Thru August 24
-------------------------------------------------------------
At the behest of Debtor L'Occitane, Inc., Judge Michael B. Kaplan
of the U.S. Bankruptcy Court for the District of New Jersey
extended the period in which the Debtor may file a chapter 11 plan
through and including August 24, 2021, and to solicit acceptances
through and including October 23, 2021.
Since the Petition Date, the Debtor has made substantial and
meaningful progress under chapter 11. To date, the Debtor's efforts
have been concentrated on undertaking the negotiation of its leases
with its various landlords. However, the negotiations are still
ongoing and the Debtor needs additional time to complete those
negotiations. The outcome of the negotiations will inform how the
plan is designed.
Also, since the Petition Date, the Debtor has been paying its
creditors post-petition while negotiating with its landlords and
determining a construct for its reorganization plan. The Debtor has
been and will continue to confer with the Committee, including
concerning the Debtor's plan of reorganization to provide the best
outcome for the various constituencies participating in this
bankruptcy process.
This is the Debtor's first extension of the exclusive period, and
the request of exclusivity extension was filed just over three
months after the Petition Date. The Debtor has accomplished much of
its main goal for filing bankruptcy: negotiations with its
landlords to right-size its brick and mortar footprint in the
United States.
Now the exclusivity periods are extended, it will allow the Debtor
to continue to work cooperatively with its key constituents,
including the Committee, toward the goal of confirming and
implementing a consensual plan of reorganization in the most
cost-efficient manner possible.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/2PZR55O from Stretto.com.
A copy of the Court's Extension Order is available at
https://bit.ly/3oSQ7oZ from Stretto.com.
About L'Occitane Inc.
New York-based L'Occitane, Inc. -- http://www.loccitane.com/-- is
a national retail chain that sells and promotes the internationally
renowned "L'OCCITANE en Provence" beauty and well-being products
brand in the United States through boutiques in 36 states and its
website. After opening its first boutique in the U.S. in 1996, the
Company presently operates 166 boutiques in 36 states and Puerto
Rico.
Founded by Olivier Baussan more than 40 years ago,
Switzerland-based L'OCCITANE en Provence captures Provence's true
art de Vivre, offering a sensorial immersion in the natural beauty
and lifestyle of the South of France. L'OCCITANE products' texture
to the scent, each skincare, body care, and fragrance formula
promises pleasure through beauty and well-being -- a moment rich in
enjoyment and discovery that goes beyond tangible benefits to
create a different experience of Provence.
On January 26, 2021, L'Occitane, Inc., filed a Chapter 11 petition
(Bankr. D.N.J. Case No. 21-10632). The Debtor estimated $100
million to $500 million in assets and liabilities as of the
bankruptcy filing. International operations are not part of the
Chapter 11 filing.
The Honorable Michael B. Kaplan is the case judge.
Fox Rothschild LLP is serving as the Company's legal counsel, RK
Consultants LLC is serving as a financial advisor, and Hilco Real
Estate, LLC is serving as a real estate advisor to the Company.
Stretto is the claims agent, maintaining the page
https://cases.stretto.com/LOccitane
On February 16, 2021, the Office of the United States Trustee for
the District of New Jersey (the "U.S. Trustee") appointed an
Official Committee of Unsecured Creditors (the "Committee"). No
trustee or examiner has been appointed in this Chapter 11 Case. The
Committee retained Cole Schotz P.C. as its counsel on March 9,
2021, effective as of February 12, 2021.
LECLAIRRYAN PLLC: Suit Over Joint Venture Stays in Bankr. Court
---------------------------------------------------------------
Judge David J. Novak of the U.S. District Court for the Eastern
District of Virginia denied the request of ULX Partners, LLC, and
UnitedLex Corporation to withdraw the bankruptcy court reference of
the adversary proceedings initiated against them by the Chapter 7
trustee of LeClairRyan PLLC.
Defendants argued that many of the claims brought by Chapter 7
Trustee Lynn L. Tavenner constitute "non-core" state law claims,
thus depriving the Bankruptcy Court of the authority to enter final
judgments on those claims.
"Defendants bear the burden of demonstrating the appropriateness of
the withdrawal. After reviewing the record, the parties'
submissions, the Bankruptcy Court's Proposed Findings of Fact and
Conclusions of Law and Defendants' objections thereto, the Court
agrees with the Bankruptcy Court's recommendation that Defendants
have not met their burden and the reference in this action should
remain undisturbed," Judge Novak said.
The adversary proceeding arises out of a failed joint venture
between LeClairRyan and Defendants. According to the Complaint,
LeClairRyan experienced significant financial difficulties that led
it to begin negotiating a potential joint venture with UnitedLex, a
provider of various legal and non-legal support services to law
firms and legal departments. The joint venture had the purpose of
infusing LeClairRyan with liquidity and resolving the firm's
financial problems. The joint venture resulted in the creation of
ULXP, with UnitedLex owning 99% of ULXP and LeClairRyan owning 1%.
Ultimately, UnitedLex contributed no new money to LeClairRyan as
part of the transaction. LeClairRyan was to contribute all of its
non-legal intellectual property as well as back office and other
non-legal staff to ULXP.
On April 4, 2018, LeClairRyan entered into a master services
agreement with ULXP, "pursuant to which ULXP would provide business
operations, client acquisition, marketing, project management,
financial planning, and other services to the Debtor in exchange
for fees based, at least in part, on the revenue generated by the
Debtor's firm." The Chapter 7 Trustee alleges the structure of the
joint venture and the dominion and control that Defendants exerted
over LeClairRyan "bestowed insider status on the ULX Entities
vis-a-vis the Debtor." In exercising this control over LeClairRyan,
Defendants required the firm to inappropriately misuse funds
tendered by clients for specific costs and expenses, using them
instead for Defendant's own expenses. The Trustee alleges
Defendants took control over LeClairRyan to improperly divert funds
away from the firm and its creditors and to Defendants.
Additionally, as part of the process of forming the joint venture,
LeClairRyan converted from a professional corporation to a
professional limited liability corporation on March 31, 2018. This
conversion led to significant transfers to shareholders and an IRS
audit of LeClairRyan's tax returns, which itself resulted in the
IRS filing a proof of claim in the Bankruptcy Case in the estimated
amount of $4,759,175.
According to the Chapter 7 Trustee, by the end of 2018 LeClairRyan
owed Defendants fees totaling more than $12 million. In April 2019,
LeClairRyan executed a promissory note for $8 million in favor of
ULXP and an accompanying security agreement -- Note Transfer --
with both documents backdated for December 20, 2018. Throughout
the terms of the dealing, Defendants knew that LeClairRyan was
insolvent and exercised inappropriate control over the law firm to
divert funds away from LeClairRyan's creditors for their own
benefit. The Trustee alleges LeClairRyan transferred not less than
$19,357,282.51 to ULXP between August 1, 2018, and the date that
LeClairRyan filed the bankruptcy petition.
Meanwhile, ULXP objected to the Trustee's request to use cash
collateral, claiming it had valid liens under the Note Transfer. On
October 29 and 30, 2020, the Bankruptcy Court conducted an
evidentiary hearing on the Cash Collateral Motion. During the
evidentiary hearing, the Bankruptcy Court received testimony and
evidence from the parties addressing the validity of ULXP's lien.
The Court granted the Cash Collateral Motion, finding that "ULXP
had failed to establish that it held an allowed secured claim
against the Debtor that required adequate protection beyond that
for which it had already been provided."
The Bankruptcy Court has scheduled the trial in the Adversary
Proceeding to occur on September 14-24, 2021.
A copy of the District Court's May 28, 2021 Memorandum Opinion is
available at https://bit.ly/3fRoLN6 from Leagle.com.
About LeClairRyan
Founded in 1988, LeClairRyan PLLC was a national law firm with 385
attorneys, including 160 shareholders, at its peak. The firm
represented thousands of clients, including individuals and local,
regional, and global businesses.
Following massive defections by its attorneys, LeClairRyan members
voted in July 2019 to wind down the firm's operations.
Richmond, Va.-based LeClairRyan PLLC sought Chapter 11 protection
(Bankr. E.D. Va. Case No. 19-34574) on Sept. 3, 2019, to effect the
wind-down. In its Chapter 11 petition, the firm listed a range of
200-999 creditors owed between $10 million and $50 million. The
firm claims assets of $10 million to $50 million.
The Hon. Kevin R Huennekens is the case judge.
Richmond attorneys Tyler Brown, Esq., and Jason Harbour, Esq., at
Hunton Andrews Kurth, represented LeClairRyan in the case.
Protiviti served as financial adviser for the liquidation.
On October 3, 2019, the Bankruptcy Court converted the case to one
under Chapter 7 of the Bankruptcy Code and appointed Lynn L.
Tavenner as Chapter 7 Trustee.
LIBERTY POWER MARYLAND: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: Liberty Power Maryland, LLC
2100 W. Cypress Creek Rd.
Suite 130
Fort Lauderdale, FL 33309
Chapter 11 Petition Date: June 4, 2021
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 21-15539
Judge: Hon. Peter D. Russin
Debtor's Counsel: Paul J. Battista, Esq.
GENOVESE JOBLOVE & BATTISTA, P.A.
100 SE 2nd St.
44th Floor
Miami,FL 33131
Tel: 305-349-2300
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Bob Butler, chief restructuring
officer.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/HXPJ4QY/Liberty_Power_Maryland_LLC__flsbke-21-15539__0001.0.pdf?mcid=tGE4TAMA
LIBERTY POWER: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Liberty Power District of Columbia, LLC
2100 W. Cypress Creek Rd.
Suite 130
Fort Lauderdale, FL 33309
Chapter 11 Petition Date: June 4, 2021
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 21-15540
Judge: Hon. Scott M. Grossman
Debtor's Counsel: Paul J. Battista, Esq.
GENOVESE JOBLOVE & BATTISTA, P.A.
100 SE 2nd St.
44th Floor
Miami, FL 33131
Tel: 305-349-2300
E-mail: pbattista@gjb-law.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Bob Butler, chief restructuring
officer.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/H7G7P6A/Liberty_Power_District_of_Columbia__flsbke-21-15540__0001.0.pdf?mcid=tGE4TAMA
LIMETREE BAY: S&P Lowers Debt Rating to B, On CreditWatch Negative
------------------------------------------------------------------
S&P Global Ratings lowered the debt rating on Limetree Bay
Terminals LLC's (LTB) senior secured term loan to 'B' from 'B+'.
The CreditWatch Negative placement highlights the impact to cash
flow available for debt service as a result of the refinery's
operational status. S&P believes the terminals will fail to sweep
material amounts of cash against the term loan B balance in 2021.
Limetree Bay Terminals LLC (LTB) is a 34 mmbbls crude oil and
refined product storage facility located in St. Croix of the U.S.
Virgin Islands. The facility consists of 167 tanks, with deep water
access to 11 docks including an offshore Single Point Mooring Buoy
(SPM) capable of loading and discharging vessels up to Very Large
Crude Carriers (VLCC) size.
The project is owned by a consortium of sponsors through Limetree
Bay Energy.
The downgrade is underpinned by the impact from the affiliate
refinery which will remain offline through the end of June.
Management expects the refinery could re-start by early July, but
it needs to satisfy four U.S. Environment Protection Agency (EPA)
audits (three technical audits and one environmental audit) while
completing repairs, which could delay the restart process. Per the
terms of the terminal service agreement, the refinery has an
initial period of 90 days to make up the missed payment in full to
LTB. S&P said, "If the refinery is unable to restart in a timely
manner, we believe its ability to honor the take-or-pay contract
with the terminals could become severely pressured. The take-or-pay
contract provides cash flow surety to LTB and helped ensure
near-term deleveraging, which is now in flux. As of March 31, 2021,
the refinery was utilizing approximately 94% of its allotted
storage capacity, and we estimate the refinery was running near 70%
utilization levels in the first quarter. We expect these metrics to
be affected in the second quarter; thereafter the situation remains
fluid." While LTB has substantial exposure to its affiliate
refinery, the refinery accounts for only approximately 42% of total
storage capacity.
S&P is also monitoring the ongoing contract arbitration between
Unipec and Limetree regarding tank usage non-payment. It is S&P's
understanding that this amount will continue to accrue until the
matter is resolved. The two parties continue to have a working
relationship, and Limetree has completed nearly all the requested
tankage repairs. Unipec continues to pay in full and on time for
the other tanks it continues to use. Limetree's management team
expects the matter to be resolved by early 2022.
Through the first quarter of 2021, LTB was executing in line with
its 2021 budget, and demonstrated improving operations and
financial performance. Given the challenges of 2020, and the delay
in the refinery ramping this was a milestone for LTB. The
achievement was quickly muted as LTB now faces a more complicated
landscape with the refinery's operational status in flux. S&P said,
"We highlight that LTB is better positioned to maintain financial
performance because of the modest capital spending requirements in
comparison to prior years and we expect management to monitor its
operating expenses and capital spending to increase cash flow as
needed." The terminals can also draw on its $13.9 million debt
service reserve account as needed to meet debt service
requirements.
S&P said, "We are applying a negative comparable ratings adjustment
to LTB. The potential impact from the refinery's restart timing
detracts from LTB's cashflow visibility. Furthermore, we believe
LTB could face contractual frustration trying to recontract the
refinery's allotted capacity. We also believe the lack of cash flow
sweeps against the term loan balance and continued operational
shortfalls further underpin this assessment.
"We assess liquidity as neutral. We currently expect sources to
exceed uses by well over 1x over the next 12 months, and do not
believe there will be any covenant headroom or compliance issues
over the next 12 months. The project has a minimum 1.1x debt
service coverage ratio (DSCR) covenant requirement, to which it
complied as of March 31, 2021, with a DSCR of 1.57x. The project
has no material debt maturities until 2024. That said, if the
refinery's restart is delayed beyond the third quarter, we believe
liquidity and covenant compliance could quickly deteriorate."
The CreditWatch Negative placement reflects the uncertainty around
the restart timing of the affiliate refinery, and its ability to
honor its terminals service agreement with LTB. If the refinery's
shutdown is prolonged beyond the end of the third quarter, we
believe LTB's operational and financial performance could become
severely impacted. S&P expects to resolve the CreditWatch when it
has a better understanding of the refinery's repairs and restart
timing or within 90 days.
LPT LLC: Voluntary Chapter 11 Case Summary
------------------------------------------
Debtor: LPT, LLC
2100 W. Cypress Rd.
Suite 130
Fort Lauderdale, FL 33309
Business Description: LPT, LLC
Chapter 11 Petition Date: June 4, 2021
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 21-15537
Judge: Hon. Scott M. Grossman
Debtor's Counsel: Paul J. Battista, Esq.
GENOVESE JOBLOVE & BATTISTA, P.A.
100 SE 2nd St.
44th Floor
Miami, FL 33131
Tel: 305-349-2300
E-mail: pbattista@gjb-law.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Bob Butler, chief restructuring
officer.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/HMDEW6I/LPT_LLC__flsbke-21-15537__0001.0.pdf?mcid=tGE4TAMA
LTI HOLDINGS: S&P Rates New $210MM First-Lien Credit Facility 'B-'
------------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level and '4' recovery
ratings on LTI Holdings Inc.'s proposed $210 million senior
secured, first-lien credit facility. The facility includes a $125
million first-lien term loan, a $75 million delayed draw term loan,
and a $10 million upsize to the existing revolving credit facility.
The term loans mature in July 2026. The '4' recovery rating
indicates S&P's expectation for average recovery (30%-50%; rounded
estimate: 45%) in the event of a default. The company plans to use
the proceeds to acquire GM Nameplate, a manufacturer of graphic
overlays and backlighting solutions across various end markets.
S&P said, "Our 'B-' issuer credit rating and stable outlook on LTI
are unchanged. Our ratings incorporate our view that the company
should continue to see healthy top-line expansion as a result of
its exposure to blue-chip customers across industries, leading to
ample liquidity. Our rating also incorporates the company's high
debt load and acquisitive nature." LTI is a provider of specialty
material-based thermal, vibration, and electromagnetic interference
management and environmental-sealing solutions. The company's
moderate scale, large customer concentration (its top 10 customers
account for more than 40% of its 2020 revenue), and modest market
share in the highly fragmented $15 billion custom fabricated
components industry remain key considerations in our business risk
assessment.
Issue Ratings - Recovery Analysis
Key analytical factors
-- S&P's 'B-' issue-level rating and '4' recovery rating on the
senior secured, first-lien term loans remain unchanged. Our 'CCC+'
issue-level rating and '5' recovery rating on LTI's $315 million
second-lien term loan remain unchanged as well.
-- S&P's simulated default scenario contemplates a default in 2023
because of sharp revenue and margin declines arising from the
combination of an economic contraction, increasing price
competition, and operational inefficiencies.
-- S&P values the company on a going-concern basis. The gross
enterprise value of $863 million is based on emergence EBITDA of
$173 million and a valuation multiple of 5x (in line with the
multiples it uses for similarly rated capital goods companies).
Simulated default assumptions
-- Simulated year of default: 2023
-- EBITDA at emergence: $172.7 million
-- EBITDA multiple: 5x
-- Jurisdiction: U.S.
-- LIBOR: at 2.5% in the assumed default year.
Simplified waterfall
-- Gross enterprise value: $863 million
-- Net enterprise value (after 5% administrative costs): $820
million
-- Valuation split in % (obligor/nonobligors): 51%/49%
-- Collateral + deficiency value available to first priority
claims: $786 million
-- Estimated first-lien debt claims: $1.73 billion
--Recovery rating: '4'
--Recovery range: 30%-50% (rounded estimate: 45%)
-- Collateral + deficiency value available to second priority
claims: $34 million
-- Estimated second-lien debt claims: $330 million
--Recovery rating: '5'
--Recovery range: 10%-30% (rounded estimate: 10%)
All debt amounts include six months of prepetition interest.
LUCKY STAR-DEER: Updates 41-60 Main Secured Claim Pay Details
-------------------------------------------------------------
Lucky Star-Deer Park, LLC, submitted a First Amended Disclosure
Statement for the First Amended Chapter 11 Plan dated June 1,
2021.
Recoveries projected in the Plan shall be from the Debtor's sale of
the Lucky Star Property as well as the formation of a liquidating
trust which shall be responsible for the payments to the Allowed
General Unsecured Claims. The amount generated by the proposed sale
of the Lucky Star Property shall be used to satisfy the claim of
the Secured Creditor; the payment of any outstanding statutory fees
due and owing the United States Trustee; the payment of allowed
costs of administration of the case (the "Administrative Claims");
and a distribution to the holders of Allowed Claims.
Class 1 consists of the Secured Claim of 41-60 Main Street LLC. The
Claim of 41 60 shall be an Allowed Claim of not less than
$143,988,021.20 as of October 30, 2020 and shall be a Secured Claim
to the extent of the value of the property securing 41-60's Claim.
The treatment afforded to 41-60 on account of its Claim is pursuant
to an agreement reached between 41-60, the Debtor, the Flushing
Landmark Realty Debtor, the Victoria Towers Debtor and Wu. The
agreement involves, among other things: (a) a phased sale of the
Flushing Landmark Property and the Lucky Star Property; and (b) an
agreement by 41-60 to limit its initial credit bid in connection
with the sale of the Flushing Landmark Property, and, depending on
timing and other factors, the limit of its total distribution below
its Allowed Claim amount.
The first step in the property sales' process is the sale of the
Flushing Landmark Property by the Flushing Landmark Debtor. As
provided for in the Bid Procedures in the Flushing Landmark Realty
Debtor case, 41-60 has an initial credit bid of $95,000,000 but is
free to bid higher with credit up to the Cap Amount.
Until the closing of the sale of the Flushing Landmark Property,
the Debtor has the right to seek to refinance the Lucky Star
Property provided that such financing will pay the difference
between the Cap Amount and the amount credit bid or cash received
by 41-60 from the proceeds of the sale of the Flushing Landmark
Property to 41-60 on account of its Secured Claim, which 41-60 will
accept to release its lien against the Lucky Star Property.
From and after the confirmation of the Victoria Towers Debtor's
bankruptcy case pursuant to the chapter 11 plan in Victoria Towers,
the assets of Victoria Towers will be sold to the public. As
provided for in the Victoria Towers chapter 11 plan, certain of the
proceeds of such sales may be paid to 41-60 on account of its claim
up to the Cap Amount.
41-60 shall agree to waive its rights to receive a distribution
from the Wu bankruptcy estate under the Wu chapter 11 plan on
account of its deficiency claim, if any, and vote in favor of a Wu
plan that implements the relevant portion of this agreed upon
treatment of the 41-60 Secured Claim as a result of the sale of the
Flushing Landmark Property, the Lucky Star Property, and the
property owned by Victoria Towers that under the chapter 11 plan in
Victoria Towers could yield payments to 41-60 and all proceeds of
such sales distributed in accordance with the chapter 11 plans in
each case.
Like in the prior iteration of the Plan, the Plan proposes to
distribute the amount of $20,000.00 to the allowed general
unsecured creditors upon the Effective Date. This distribution will
come either from a "carve out" of 41-60's collateral, if there is a
sale of the Lucky Star Property or from a third party funding the
distribution if there is a refinance. The balance of $199,447.75
shall be paid in its entirety over a period of 60 months commencing
on the first day of the month immediately following the Effective
Date.
The Debtor shall have either obtained the necessary refinancing or
shall have sold its interest in the Real Property. Upon the entry
of the Confirmation Order, the Debtor shall have completed the
proposed refinance or the sale of the Real Property, or the Debtor
may complete the sale, if necessary, after the entry of the
Confirmation Order.
A full-text copy of the First Amended Disclosure Statement dated
June 1, 2021, is available at https://bit.ly/3g8hlnw from
PacerMonitor.com at no charge.
Attorneys for Lucky Star-Deer Park:
Fred S. Kantrow, Esq.
The Kantrow Law Group, PLLC
6901 Jericho Turnpike, Suite 230
Syosset, New York 11791
Tel: 516 703 3672
E-mail: fkantrow@thekantrowlawgroup.com
About Lucky Star-Deer Park
Lucky Star-Deer Park, LLC is a single asset real estate as defined
in 11 U.S.C. Section 101(51B) based in Flushing, N.Y.
Lucky Star-Deer Park and affiliates, Flushing Landmark Realty LLC
and Victoria Towers Development Corp. sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case Nos.
20-73301, 20-73302 and 20-73303) on Oct. 30, 2020. On Nov. 3,
2020, another affiliate, Queen Elizabeth Realty Corp., filed a
Chapter 11 petition (Bankr. E.D.N.Y. Case No. 20-73327). Judge
Robert E. Grossman oversees the cases, which are jointly
administered under Case No. 20-73301.
At the time of the filing, Lucky Star-Deer Park had estimated
assets of less than $50,000 and liabilities of between $100,001 and
$500,000.
The Debtors tapped Rosen & Kantrow, PLLC as their legal counsel,
Joseph A. Broderick, P.C., as accountant, and Miu & Co. as audit
consultant.
LUMEN TECHNOLOGIES: Moody's Rates New $1BB Unsecured Notes 'B2'
---------------------------------------------------------------
Moody's Investors Service has assigned a B2 to Lumen Technologies,
Inc.'s proposed $1 billion senior unsecured notes due 2029. The net
proceeds from the sale of the unsecured notes will be used to
refinance Lumen's debt maturing in June 2021. All other ratings
including the company's Ba3 corporate family rating and stable
outlook are unchanged.
Assignments:
Issuer: Lumen Technologies, Inc.
Senior Unsecured Regular Bond/Debenture, Assigned B2 (LGD5)
RATINGS RATIONALE
Lumen's Ba3 CFR reflects its predictable and further enhanced cash
flow from its 2019 dividend reduction, its broad base of operations
and strong market position. The company's publicly stated financial
policy focuses on the longer term achievement of a
company-calculated net debt to adjusted EBITDA range of 2.75x to
3.25x, with continued steady debt reductions over at least the next
two years funded with discretionary free cash flow. In addition,
Lumen's continuing record of consistent network investment at a
level generally above its peer group average demonstrates its
commitment to its long term competitive position. These positives
are offset by still high but declining leverage and slowing revenue
contraction across its business units, exacerbated by secular
industry challenges and a highly competitive operating environment.
Revenue contracted 3.8% in the first quarter of 2021 compared with
the same period in the prior year, but this revenue contraction has
remained on a diminishing path over several quarters.
Lumen has demonstrated consistently strong cost cutting success
which has significantly offset the impact of revenue weakness on
operating margins. Lumen's company-calculated adjusted EBITDA
margin for Q1 2021 of 43.1% was an 80 basis points improvement when
compared with the same period a year ago. Company-calculated
adjusted EBITDA margins have been increasing since the 2017 close
of the company's acquisition of Level 3 and are up 760 basis points
from a pre-acquisition close third quarter 2017 level of 35.5%.
With Moody's expectation for EBITDA margins to continue increasing
incrementally and with increased free cash flow from the company's
2019 dividend cut, Lumen remains well-positioned to pay down around
$2 billion of debt annually through year-end 2022. As of March 31,
2021, Lumen's leverage (Moody's adjusted) was approximately 3.8x.
Moody's expects Lumen to have a good liquidity profile over the
next 12 months, reflected by its SGL-2 speculative grade liquidity
rating and supported by $486 million cash on hand as of March 31,
2021, and Moody's expectation of around $1.8 billion of after
dividend free cash flow for full year 2021. The company had
approximately $2.5 billion of near term debt maturities as of March
31, 2021, excluding the maturities being refinanced with this
senior unsecured notes transaction.
As of March 31, 2021 Lumen also had full availability under its
$2.2 billion senior secured revolving credit facility that expires
in January 2025. With respect to the term loan A facilities and the
revolver, the credit agreement requires Lumen to maintain a total
leverage ratio of not more than 4.75x and a minimum consolidated
interest coverage ratio of at least 2x. The term loan B facility is
not subject to the leverage or interest coverage maintenance
covenants. Moody's estimate Lumen will remain comfortably in
compliance with the total leverage ratio and interest coverage
ratio for the next 12 to 18 months.
The instrument ratings reflect both the probability of default of
Lumen, as reflected in the Ba3-PD probability of default rating, an
average expected family recovery rate of 50% at default and the
loss given default (LGD) assessment of the debt instruments in the
capital structure based on a priority of claims.
Lumen's corporate structure includes two layers of debt
(secured/unsecured) at the holding company (Lumen Technologies,
Inc.) level and three main operating company credit pools (Qwest
Corporation, Embarq Corporation and Level 3 Parent, LLC) with
multiple classes of debt within each.
At the holding company level, Moody's rates the company's secured
credit facility Ba3 and unsecured notes B2. Lumen's senior secured
credit facilities, including its revolver and term loans, are rated
Ba3, reflecting their senior position ahead of Lumen's unsecured
debt. The senior secured credit facilities are guaranteed by
CenturyTel Investments of Texas, Inc., Qwest Communications
International, Inc., Qwest Services Corp., CenturyTel Holdings,
Inc., CenturyLink Communications, LLC, and Centel Corporation.
Unsecured guarantors include Embarq Corporation and Qwest Capital
Funding, Inc. Wildcat Holdco LLC (Parent of Level 3 Parent, LLC)
provides a pledge of stock. The B2 senior unsecured rating reflects
its junior position in the capital structure at the holding company
level and the significant amount of senior debt, including as of
March 31, 2021 $7.6 billion of debt at Lumen, $10.1 billion of debt
at Level 3, $3.2 billion of debt at Qwest Corporation, $0.4 billion
of debt at Qwest Capital Funding, Inc. and $1.6 billion of debt at
Embarq Corporation and its subsidiaries.
The senior unsecured debt of Qwest Corporation is rated Ba2 based
on its structural seniority and relatively low leverage of
approximately 1.2x (Moody's adjusted) as of March 31, 2021. The
senior unsecured notes of Level 3 Financing, Inc. are rated Ba3,
reflecting their structural seniority to Level 3 Parent, LLC, and
junior position relative to Level 3 Financing, Inc.'s senior
secured bank credit facility and senior secured notes which are
rated Ba1. Leverage within the Level 3 Parent LLC credit pool was
approximately 3.4x (Moody's adjusted) as of March 31, 2021.
The senior unsecured debt of Embarq Corporation is rated Ba2,
reflecting a structurally senior (relative to Lumen) claim on the
assets of Embarq Corporation, which had leverage of approximately
1.1x (Moody's adjusted) as of March 31, 2021. The senior secured
debt of Embarq Corporation's operating subsidiary, Embarq Florida,
Inc., is rated Baa3.
The stable outlook reflects Lumen's sustainable deleveraging
trajectory, continued strong execution on cost synergies since the
Level 3 acquisition in November 2017 and solid opportunities for
continuing transformational synergies over the next several years.
Moody's expects that Lumen's leverage (Moody's adjusted) will
steadily fall to 3.7x by year-end 2021, supported by solid
operational execution and continued margin expansion despite
continued secular pressures on top line growth, with excess cash
flow dedicated to debt reduction.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could downgrade Lumen's CFR to B1 if leverage (Moody's
adjusted) increases above 4.25x or free cash flow turns negative,
both on a sustained basis, or if capital investment is reduced to
levels that could weaken the company's competitive position. A
sustained reversal in the currently declining pace of revenue
contraction could also result in a downgrade.
Moody's could upgrade Lumen's CFR to Ba2 if both revenue and EBITDA
were stabilized, leverage (Moody's adjusted) was sustained below
3.75x and free cash flow to debt was in the high single digit
percentage range.
The principal methodology used in this rating was
Telecommunications Service Providers published in January 2017.
Lumen Technologies, Inc., headquartered in Monroe, Louisiana, is an
integrated communications company that provides an array of
communications services to residential, business, governmental and
wholesale customers. In October of 2017, Lumen acquired Level 3, an
international communications company with one of the world's
largest long haul communications and optical internet backbones.
The company generated approximately $20.5 billion in revenue over
the last 12 months ended March 31, 2021.
LUMEN TECHNOLOGIES: S&P Rates New $1BB Senior Unsecured Notes BB-
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S&P Global Ratings assigned its 'BB-' issue-level rating and '5'
recovery rating to Lumen Technologies Inc.'s proposed $1 billion
senior unsecured notes due 2029. The company will use the net
proceeds from these notes, along with cash on hand, for general
corporate purposes, including to repay its debt maturing in 2021.
The '5' recovery rating indicates S&P's expectation for modest
(10%-30%; rounded estimate: 15%) recovery in the event of a payment
default.
S&P's 'BB' issuer credit rating and stable outlook on the company
are unchanged. Lumen's top-line results remain weak due to the
secular industry pressures facing its legacy services. During the
first quarter of 2021, the company's total revenue declined by 3.8%
from the prior-year period due to lower revenue from both its
enterprise and mass market businesses. The company highlighted a
lengthening sales cycle and pricing pressure as the primary reasons
for the revenue decline, though its weak performance was partially
offset by the benefits from management's cost-savings initiatives.
Therefore, Lumen's reported EBITDA only declined by 2% relative to
the year-ago period. The company's large enterprise and
international and global accounts management (IGAM) revenue both
fell by about 3% year over year due the winding down of some
COVID-19-related projects, a large customer disconnect, and some
pricing pressure from contract renewals. That said, management
noted that the sales funnel has improved, which may bolster its
top-line trends in the second half of 2021.
S&P said, "Despite our forecast for a 6.5% rise in U.S. GDP, we do
not believe the benefits from a stronger economy will begin to help
Lumen's top-line results, particularly in its business segments,
until the second half of 2021. Therefore, our base-case forecast
assumes the company's revenue declines by 3%-4% in 2021, although
offsetting cost savings lead to a more modest EBITDA decline of
2%-3%. However, even with the improving economic conditions, we
expect Lumen's top-line pressures to accelerate in 2022 due to the
loss of high-margin Connect America Fund Phase II (CAF II)
regulatory funding, which will only be partially offset by its
reduced capital expenditure. Therefore, we expect the company's
revenue and EBITDA to drop by about 4%-6% in 2022, which will limit
any potential improvement its adjusted debt to EBITDA (currently
about 4x) over the next couple of years despite its solid
discretionary cash flow generation (about 6%-7% of its adjusted
debt)."
MARQUIS ENTERPRISES: $64K Sale of Buffalo Property to Nubad Okayed
------------------------------------------------------------------
Judge Carl L. Bucki of the U.S. Bankruptcy Court for the Western
District of New York authorized Marquis Enterprises, LLC's sale of
premises commonly known as 382 Dartmouth, in Buffalo, New York, to
Nubad Enterprises, LLC, for the sum of $64,000
The net proceeds, after customary closing expenses, will be
retained in the Debtor's DIP account.
About Marquis Enterprises
Marquis Enterprises, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D.N.Y. Case No. 19-11978) on Sept. 25,
2019. At the time of the filing, the Debtor was estimated to have
estimated assets of between $100,001 and $500,000 and liabilities
of less than $50,000. The case is assigned to Judge Carl L.
Bucki.
The Debtor is represented by James M. Joyce, Esq.
MAUSER PACKAGING: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Mauser Packaging Solutions Holding
Company's (MPS) Long-Term Issuer Default Rating (IDR) at 'B-'. In
addition, Fitch has affirmed MPS's senior secured ABL credit
facility at 'BB-/RR1', senior secured term loan and senior secured
notes at 'B/RR3', and senior unsecured notes at 'CCC/RR6'. The
Rating Outlook is Stable.
MPS's rating reflects its significant size and scale in addition to
its leading market positions in a majority of its product lines and
broad product offering that supports long customer relationships.
MPS's size benefits raw material purchasing power, and its ability
to pass through raw material costs to customers results in
relatively stable margins. The rating also reflects high financial
leverage, high exposure to cyclical end markets, and management's
aggressive strategy demonstrated by its willingness to stretch the
balance sheet for an extended period of time.
KEY RATING DRIVERS
Leverage to Remain Elevated: MPS has a considerable debt load of
over $5.3 billion at Q1 2021, an amount accumulated in prior years
in connection with management's acquisitive growth strategy. Fitch
estimates that total debt/EBITDA was approximately 12.0x at
year-end 2020, and while this metric will decline in 2021 as some
one-time COVID related disruptions lapse, Fitch expects that EBITDA
recovery will be gradual and leverage will remain elevated over the
forecast period. FCF generation will also be limited, allowing for
little gross debt reduction. Fitch expects total debt/EBITDA will
remain in the 8x-9x range over the forecast horizon, a high but
sustainable level.
Uneven COVID Recovery: MPS's 2020 EBITDA was significantly impacted
by the COVID pandemic due to demand disruptions in construction,
automotive, oil & gas and other industrial markets, dropping to a
Fitch calculated $471 million level vs. $590 million in 2019.
Despite a strong recovery in industrial demand and an improving
macro backdrop globally, MPS's rebound is constrained in the
near-term by stresses in the company's supply chain and by
transport and logistics bottlenecks, which has resulted in
production inefficiencies and deferred customer orders. Labor
shortages have exacerbated these issues. Additionally, sharply
rising input prices for key inputs such as resin, steel and
tinplate will pressure margins over the near term, although cost
pass through mechanisms will adjust these over time. Given supply
constraints in the near-term, Fitch expects a return to pre-COVID
EBITDA levels for MPS by mid-2022, with gradual improvement
thereafter.
Diversified End Markets: MPS's end markets are diversified across
industrial, consumer, food and agriculture, energy and
petrochemical segments, a profile that buffered the impact of
COVID-related disruptions in many markets. Increased demand for
cleaning, medical and DIY applications partially offset depressed
demand in energy, automotive and some industrial segments during
the pandemic. Fitch believes that MPS does have material customer
concentration and a higher exposure to cyclical end markets
compared with peers, and with MPS's top 10 customer's accounting
for approximately 30% of sales in 2020, and its top customer
representing 8% of sales. However, on average, MPS has maintained
relationships with its top 10 customers for over 20 years, which in
Fitch's view, partially offsets customer concentration risk.
Additionally, Fitch believes MPS's size and scale, leading market
positions, broad and diversified product offering and the close
proximity of facilities to customers helps partially mitigate
volume risk.
Adequate Liquidity and Coverage: As of March 31, 2021, MPS had
global liquidity of $394.1 million, with $181.3 million represented
by cash and cash equivalents and the remaining $212.8 million
comprising availability under the ABL Credit Facility. The company
was reportedly in compliance with all its covenants at that date.
Historically Aggressive Strategy: In 2016, Stone Canyon Industries
LLC (SCI) acquired MPS and has since made 7 acquisitions for
aggregate consideration of approximately $3.36 billion. In April
2017, MPS paid approximately $2.27 billion to acquire CD&R
Millennium HoldCo 2 B.V. (Mauser). In August 2018, MPS paid
approximately $1 billion to acquire ICS. The Mauser and ICS
acquisitions materially increased MPS's size and expanded its
geographical presence and product offering, partially offsetting
the resulting high financial leverage. While Fitch believes MPS has
a large pipeline of potential acquisition opportunities over the
intermediate term, it remains unclear whether management views the
company as having capacity to participate in further consolidation
of the industry at this time. Stone Canyon has also employed an
aggressive dividend policy, which has contributed to elevated debt
levels. Fitch expects the company to resume paying dividends during
the forecast period.
Significant Size & Scale: MPS's aggressive acquisition strategy has
resulted in the company roughly tripling in size, pro forma the ICS
acquisition. MPS's significant size and scale improves raw material
purchasing power, which supports its cost position and is expected
to improve margins. MPS's geographic presence and broad product
offering supports long customer relationships. In 2020,
approximately 30% of sales were to customers outside of the U.S
although only 4% of revenue was generated outside of North America
and Europe.
DERIVATION SUMMARY
MPS compares similarly in size in terms of EBITDA to Silgan
('BB+'/Stable), although has significantly higher leverage and a
higher exposure to cyclical end markets. MPS is significantly
smaller, has significantly higher leverage, and a higher exposure
to cyclical end markets compared with packaging peers Berry
('BB+'/Stable) and Ball, Crown and Reynolds, who generate a
substantial majority of sales from consumer non-discretionary end
markets. Similar to many peers, MPS has been an active participant
in the consolidation of a highly fragmented industry; however, it
has demonstrated a willingness to stretch the balance sheet over an
extended time period. MPS has no financial leverage target and has
operated with net debt/EBITDA significantly above 7.0x over the
past few years, whereas large 'BB' category public equity packaging
companies tend to target net leverage generally ranging between
3.0x-4.0x.
KEY ASSUMPTIONS
-- Partial revenue recovery to around $3.7 billion in 2021,
followed by low single-digit growth thereafter;
-- Mid-teens EBITDA margins throughout the forecast;
-- Capex in the $125-$150 million range annually;
-- FCF-linked resumption in dividend payments assumed in the 2022
timeframe.
KEY RECOVERY RATING ASSUMPTIONS
-- The recovery analysis assumes that MPS would be considered a
going-concern in bankruptcy and that the company would be
reorganized rather than liquidated.
-- Fitch has assumed a 10% administrative claim.
-- Going-Concern (GC) Approach: MPC's going-concern (GC) EBITDA
of $585 million is based on a stress case scenario, and
reflects Fitch's view of a sustainable, post-reorganization
EBITDA level upon which Fitch bases the enterprise valuation.
-- The GC EBITDA assumption envisions the effects of a sustained
economic downturn lasting several years, continued depressed
energy and petrochemical prices, lower sales volumes, and
intensifying competitive dynamics for the company. In this
scenario, MPS would not be able to fully offset declines in
more cyclical segments such as petrochemicals and construction
with additional volumes in more resilient end markets such as
food and consumer.
-- GC EBITDA results from a blend of base and stress case out
year EBITDAs, reflecting more normalized recovery conditions
post-COVID-19.
-- MPS's top 10 customers also represent 30% of sales, and its
largest customer is 8% of sales, and competitive pressures or
market stress could also lead to a loss of one or more. An EV
multiple of 5.5x is used to calculate a post-reorganization
valuation and reflects a mid-cycle multiple. The estimate
considered the following factors:
-- Fitch typically uses recovery multiples ranging from 4.5x-6.0x
for its portfolio of packaging companies. The 5.5x multiple,
at the higher end of the range, is reflective of MPS's
significant size and scale in addition to its leading market
positions in a majority of its product lines.
-- Large public equity packaging companies have recently made
acquisitions in the 8.0x-10x EBITDA multiple range.
-- Acquisitions by MPS have generally ranged from 5.0x-10.0x over
the past few years.
-- Current EV multiples of public companies trade in a relatively
wide range, generally from 5.0x-11.0x
-- Smaller private equity packaging companies have generally
changed hands at an 8.5x-10.5x purchase multiple over the past
few years.
The ABL credit facility is assumed to be 80% drawn upon default.
The senior secured term loan and senior secured notes are pari
passu. The unsecured notes are subordinated to the secured debt in
the capital structure.
The waterfall results in 'RR1' recovery rating for the first lien
secured ABL credit facility, an 'RR3' recovery rating for the first
lien secured term loan and secured notes and an 'RR6' recovery
rating for the senior unsecured notes.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Clear financial policy in place consistent with total
debt/EBITDA sustained at or below 7.5x;
-- FFO fixed charge coverage ratio sustained around 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- FFO fixed charge coverage ratio trending towards 1.0x;
-- A sizable acquisition and/or distributions resulting in
reduced financial flexibility;
-- Deterioration in operating profile resulting in sustained
negative FCF.
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
Total liquidity as of March 31, 2021 was approximately $394.1
million, with $181.3 million represented by cash and cash
equivalents and the remaining $212.8 million comprising
availability under the ABL Credit Facility. The ABL Credit Facility
was extended from December 2020 to September 2024.
The ABL credit facility requires MPS to maintain a minimum fixed
charge coverage of 1.0x if availability under the ABL is less than
the greater of a) 10% of the commitments under the ABL or the
then-applicable borrowing base and b) $14 million. MPS is required
to test the fixed charge coverage ratio when availability is less
than 30% for a period of five consecutive business days. As of
mid-May, coverage calculated for this facility was in the 1.65x
range. The company was reportedly in compliance with all its
covenants at that date.
ISSUER PROFILE
Mauser Packaging Solutions Intermediate Company, Inc. (MPS) is a
leading global supplier of rigid packaging products and services.
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.
MAX FINE FURNITURE: Gets Cash Collateral Access Thru June 30
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas
authorized Max Fine Furniture and Appliances, Inc., to continue
using cash collateral through June 30, 2021.
The parties that assert an interest in the Debtor' s cash
collateral are Pacific Western Bank, successor in interest to
CapitalSource Finance LLC, Rio Bank, and Wells Fargo Commercial
Distribution Finance, LLC.
The cash collateral will be used solely to pay reasonable and
necessary operating expenses incurred in the ordinary course of
business, maintenance and preservation of property of the estate,
payroll, and payment of expenses associated with the Chapter 11
case, including United States Trustee's fees and professional fees
and expenses incurred in the administration of the bankruptcy
case.
The Court said the Debtor may grant each of Pacific Western and Rio
Bank post-petition liens and replacement liens against their
respective collateral to the same validity, extent and priority, as
existed as of the Petition Date.
The Debtor is also directed to remit these post-petition payments:
* on or by June 15, 2021, the Debtor will remit to Pacific
Western the amount of $45,000. The cash payments will be mailed to
Pacific Western at a lockbox address provided by Pacific Western,
or its counsel;
* On or by June 18, 2021, the Debtor will remit $8,991 to Rio
Bank at Rio Bank, Attn: Brian J. Humphries, 701 E. Expressway 83,
McAllen, Texas 78501; and
As of the Petition Date, the balances owed by the Debtor to each of
the secured creditors are:
(i) $2,563,206 on the Pacific Western Loan, plus subsequently
accruing interest, and other charges. The obligation is secured by
liens on substantially all of Debtor's personal property, and by
liens on the real property holdings of Maximo Saenz, the Debtor's
sole shareholder;
(ii) $437,652 on the Rio Bank Note, plus subsequently accruing
interest, and other charges. This amount is secured by liens and
security interests in all inventory, accounts, and equipment, and
other collateral as described in the Rio Security Agreement; and
(iii) $26,319 on the Wells Fargo Note, plus subsequently
accruing interest, and other charges. This obligation is secured
by Well Fargo's security interests and liens in all inventory,
accounts, and equipment, and other collateral pursuant to the Wells
Fargo Security Agreement, as well as all of the Debtor's respective
accounts, equipment, contract rights, goods, inventory, and other
items of personal property.
A copy of the order is available at https://bit.ly/2SWRDKK from
PacerMonitor.com at no charge.
A further hearing on the matter is scheduled for June 24 at 3 p.m.
About Max Fine Furniture & Appliances, Inc.
Max Fine Furniture & Appliances, Inc. --
https://www.maxfinefurniture.com/ -- sells a wide selection of
bedroom, living room, dining room, leather, home office, kids
furniture and brand name mattresses. It carries several brands,
including Ashley, Restonic Mattresses, and Best Chair.
Max Fine Furniture & Appliances, Inc., sought Chapter 11 protection
on March 17, 2020 (Bankr. S.D. Tex. Case No. 20-70114). In the
petition signed by Maximo Saenz, president, the Debtor estimates
$6,283,658 in assets and $4,261,778 in liabilities.
Jana Smith Whitworth, Esq., at JS WHITWORTH LAW FIRM, PLLC, is the
Debtor's counsel.
MIDTOWN CAMPUS: Seeks to Extend Plan Exclusivity Thru June 29
-------------------------------------------------------------
Debtor Midtown Campus Properties, LLC requests the U.S. Bankruptcy
Court for the Southern District of Florida, Miami Division to
extend by 27 days the exclusive periods during which the Debtor may
file a plan of reorganization from June 2, 2021, to and including
June 29, 2021, and solicit acceptances from August 2, 2021, to
including August 29, 2021.
Aside from the Debtor's request for exclusivity extensions, the
Debtor has also negotiated with U.S. Bank an extension of the
deadlines outlined in section 362(d)(3) of the Bankruptcy Code and
is filing a stipulation contemporaneously herewith.
As the Court was appraised at the Status Conference Hearing on May
24, 2021, the Debtor has made significant progress in this Chapter
11 case to advance the construction of the Project and continues to
move ahead to complete construction of the balance of the Project
on or before the start of the Fall 2021 Semester.
Additionally, the Debtor has made great progress in advancing the
sale of the Project. And in connection with the foregoing, on May
25, 2021, the Debtor entered into a Purchase and Sale Agreement
(the "Pending Purchase Agreement") for the sale of the Project
under and according to Sections 363 and 365 of the Bankruptcy Code
through a private sale to a third party buyer (the "Pending
Sale").
The Pending Sale is subject to a due diligence period in favor of
the proposed purchaser, of which the due diligence period expires
on June 25, 2021. In the event the Pending Purchase Agreement is
not terminated by the proposed purchaser at the expiration of the
due diligence period thereunder, then the Debtor shall promptly
file a Motion (the "Sale Motion") with the Bankruptcy Court seeking
approval of the Pending Sale under the terms of the Pending
Purchase Agreement, which Sale Motion may request expedited
approval of the Pending Sale. In the event the Bankruptcy Court
grants such Sale Motion and enters a related Sale Order, then the
Debtor shall proceed to consummate the sale of the Project in
accordance therewith.
The Debtor anticipates selecting and entering into a retention
agreement with an investment banker before the expiration of the
due diligence period under the Pending Purchase Agreement. Also,
the Debtor anticipates that it will seek approval of the engagement
of an investment banker, which motion/application the Debtor
expects to file contemporaneously with the Sale Motion or promptly
after the expiration of the due diligence period under the Pending
Purchase Agreement in the event the Pending Purchase Agreement is
terminated by the proposed purchaser.
The Debtor attended mediation on May 6, 2021, to try and resolve
the claims asserted by Sauer in the Complaint for Declaratory
Judgment to Determine Interest in Escrow Account and the Debtor's
Objection to Sauer's Claim. In connection with the foregoing, the
parties continue to mediate and work with the Mediator to advance a
settlement of the claims.
Notwithstanding these achievements and progress, certain
contingencies and issues remain before the Debtor will be in a
position to propose a feasible plan of reorganization and proceed
to emerge from chapter 11. To that end, the Debtor will be devoting
substantial resources and attention to working diligently and
cooperatively with counsel to U.S. Bank and indirectly the
bondholders to advance a sales process and/or marketing of the
Project.
Genovese Joblove & Battista, P.A., the Debtor's counsel, has
conferred with counsel for U.S. Bank, Sauer Incorporated, BMI
Financial Group, Inc., Best Meridian International Insurance
Company SPC, and the Office of the United States Trustee and
certifies that all such affected parties have consented to the
requested relief.
The proposed extension will allow the Debtor to focus its attention
on advancing a sale process, finalizing the construction of the
project, and developing a feasible plan with its creditor body that
will allow it to emerge from bankruptcy.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3wKJtns from PacerMonitor.com.
About Midtown Campus Properties, LLC
Midtown Campus Properties, LLC, is a single asset real estate that
owns the Midtown Apartments. The Midtown Apartments is a 310-unit
student housing apartment complex currently under construction at
104 NW 17th St in Gainesville, Florida, just across from the
University of Florida. It consists of a six-story main building, a
parking garage for resident and public use, and a commercial retail
space.
Each unit includes a full-size kitchen, carpet, tile, and hardwood
floors and be fully furnished. It is located near several Midtown
bars and restaurants frequented by students, and just a couple of
minutes' walk from Ben Hill Griffin Stadium.
Midtown Campus Properties sought Chapter 11 protection (Bankr. S.D.
Fla. Case No. 20-15173) on May 8, 2020. The Debtor was estimated to
have $50 million to $100 million in assets and liabilities as of
the bankruptcy filing.
The Honorable Robert A. Mark is the presiding judge.
The Debtor tapped Genovese Joblove & Battista, P.A., as bankruptcy
counsel, and The Bosch Group, Inc., as construction consultants.
No creditors' committee has been appointed in this case. In
addition, no trustee or examiner has been appointed.
MOBITV INC: Seeks Approval to Hire Chris Tennenbaum of FTI as CRO
-----------------------------------------------------------------
MobiTV, Inc. and MobiTV Service Corporation seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire Chris
Tennenbaum as their chief restructuring officer and additional
personnel from FTI Consulting, Inc.
The Debtors need a CRO to manage their assets and assist with the
filing and prosecution of a plan of liquidation in their Chapter 11
cases.
FTI's hourly rates for the services provided by its personnel are
as follows:
Senior Managing Directors: $950 - 1,295
per hour
Directors/Senior Directors/Managing Directors: $715 - 935 per
hour
Consultants/Senior Consultants: $385 - 680 per
hour
Administrative/Paraprofessionals: $155 - 290 per
hour
Mr. Tennenbaum, managing director at FTI, 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.
The firm can be reached at:
Chris Tennenbaum
FTI Consulting, Inc.
350 S. Grand Avenue, Suite 3000
Los Angeles , CA - 90071
Tel: +1 213 452 6345
Email: chris.tennenbaum@fticonsulting.com
About MobiTV Inc.
Founded in 2000, MobiTV is the first company to bring live and
on-demand television to mobile devices and is a leader in
application-based television and video delivery solutions. MobiTV
provides end-to-end internet protocol streaming television services
via a proprietary cloud-based, white-label application.
On March 1, 2021, MobiTV Inc. and MobiTV Service Corporation filed
for Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-10457).
MobiTV Inc. estimated at least $10 million in assets and $50
million to $100 million in liabilities as of the filing.
FTI Consulting, Inc. and FTI Capital Advisors LLC have been
retained as the Debtors' financial advisor and investment banker to
assist in negotiation of strategic options. Pachulski Stang Ziehl &
Jones LLP and Fenwick & West LLP serve as the Debtors' legal
counsel. Stretto is the claims agent, maintaining the page
https://cases.stretto.com/MobiTV.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors on March 15, 2021. The committee
tapped Fox Rothschild, LLP and PricewaterhouseCoopers, LLP as its
legal counsel and financial advisor, respectively.
MOUNTAIN PROVINCE DIAMONDS: S&P Affirms 'CCC-' ICR, Outlook Neg.
----------------------------------------------------------------
S&P Global Ratings affirmed its 'CCC-' issuer credit rating on
Toronto-based Mountain Province Diamonds Inc. (MPV) and its
issue-level rating on the company's second-lien secured notes. The
'3' recovery rating on the notes is unchanged.
The negative outlook reflects the risk of a default or a debt
restructuring within the next six months.
S&P said, "Despite a US$33 million liquidity injection, we still
consider MPV's liquidity fragile against cash flow requirements.
MPV has been able to generate cash flows from its regular rough
diamond sale cycles since fourth-quarter 2020, following a period
of COVID-19 pandemic-related sales disruption earlier in 2020.
However, the pandemic-related shutdown at its Gahcho Kué mine in
February 2021 significantly affected the company's rough diamond
production and led to cancellation of MPV's May sales event. To
cover the anticipated cash flow deficit caused by this
cancellation, the company recently announced a US$33 million term
loan arrangement (with Dunebridge Worldwide Ltd., an entity
controlled by the company's largest shareholder) as a measure to
meet its immediate liquidity needs.
"However, we still believe MPV faces a high risk of exhausting its
liquidity within the next several months as it faces significant
near-term cash requirements. The company had C$14 million in cash
at March 31, 2021. By year-end, MPV must pay US$24 million interest
on its secured notes (US$12 million each in June and December) and
C$10 million of reclamation liabilities. The new US$33 million term
loan and revolving facility (US$25 million drawn) also mature this
year and will need to be addressed. In addition, the company is
required to cover its 49% share of operating and capital spending
requirements at the Gahcho Kué mine, which need to be funded by
its continuing operations.
"We believe the company's expected cash outflows through year-end
2021 will exceed MPV's existing liquidity and our estimated cash
flow generation over this period. Therefore, in the absence of
maturity extension on the company's loan facilities, we believe
there is a high possibility MPV will be unable to meet its
financial obligations and could pursue a debt restructuring
transaction in the near term.
The company faces significant refinancing risks on its secured
notes due December 2022. MPV also has a US$300 million secured
notes maturity in December 2022, and its refinancing remains in
doubt. While signs have recently emerged of an improvement in
diamond market conditions, the size of this debt obligation is
significant relative to our estimates for the company's earnings
and cash flow. Given near-term liquidity and maturity risk MPV
faces, in tandem with this notes obligation, S&P believes there is
a high likelihood that the company will engage in a debt
restructuring transaction it views as distressed.
S&P said, "We acknowledge that the diamond market outlook has
improved compared with a year ago, including higher demand as the
global economy and businesses gradually reopen. Rough diamond
prices have been trending higher in recent months, from the lows of
second-quarter 2020, and now are closer to pre-pandemic levels. But
the current high levels of diamond inventory, curtailed diamond
polishing activity in India due to lockdowns, and the gradual
growth of lab-grown diamonds remain near-term headwinds for rough
diamond demand and prices. In our view, there remains a high degree
of uncertainty regarding the extent of a near-term recovery and the
corresponding impact on MPV's cash flow generation."
"The negative outlook reflects the heightened risk that the company
could default on its debt obligations or engage in a transaction we
consider a distressed exchange within the next six months.
"We could lower the rating if the company is not expected to fund
upcoming interest payments or extend its near-term debt maturities,
and/or announces a debt restructuring transaction we view as
distressed.
"We could raise the rating if we no longer consider a default or
distressed exchange to be inevitable within six months. This could
occur if the company extends the maturities of its revolver and
term loan and its increased cash flow generation is sufficient to
fund near-term fixed cost requirements. In this scenario, we would
expect a sustained improvement in diamond market conditions and
steady production/sales. We believe this could also increase the
prospects for a refinancing of MPV's senior secured notes in a
transaction we do not view as distressed."
MOXIE'S CAFE: Unsecureds to Recover 100% of Allowed Claims
----------------------------------------------------------
Moxie's Cafe & Grill, LLC and affiliate The Great Catch of Land
O'Lakes, LLC, filed with the Bankruptcy Court a Second Plan of
Reorganization on May 28, 2021. The Plan proposes to pay the
Debtors' creditors from the Debtor's current and future earnings.
Treatment of Claims and Interests Under the Plan
a. Class 1 Priority Claims (Impaired)
Class 1 Claims are allowed claims entitled to priority under
Section 507 of the Bankruptcy Code. All priority claims will be
paid their allowed priority claim in full within 60 months from the
Petition Date, including pre- and post-confirmation interest
accruing at the statutory rate, in equal monthly payments
commencing 30 days from the entry of the Confirmation Order. This
includes the $4,453 priority unsecured portion of the claim filed
by the Florida Department of Revenue.
b. Class 2 - AWA of Tampa, LLC (Impaired)
AWA of Tampa, LLC filed a Proof of Claim for $69,000 secured by the
equipment of the Debtor. After adding pre- and post-petition
interest, AWA of Tampa, LLC has an outstanding balance of $75,210
less post-petition payments of $2,300, for an allowed secured claim
of $72,910.
The allowed secured claim will amortized over 60 months at 5.25%
interest with estimated monthly payments of $1,384 commencing 30
days from the entry of the Confirmation Order. Claimant will
retain its lien to the same extent,
validity, and priority as existed pre-petition.
c. Class 3 - General Unsecured Creditors (Impaired)
The Debtor currently estimates that there is approximately $10,535
in allowed, non-insider claims in this class.
The Debtor will pay claimants with allowed general unsecured claims
100% of their allowed claim, without interest, in 12 quarterly
installments commencing on the start of the calendar quarter
immediately following the Effective Date and continuing for a total
of 20 consecutive quarters. If this quarter starts less than 30
days after the entry of the Confirmation Order, payment shall not
commence until the next quarter.
Class 4 - Equity Security Holders of the Debtor (Impaired)
Equity will retain ownership in the Debtor post-confirmation. No
distributions will be made to equity until all payments in Class 3
have been made.
The Debtors are substantively consolidated. A copy of the Second
Amended Plan is available for free at https://bit.ly/3fQMKvC from
PacerMonitor.com.
About Moxie's Cafe & Grill
Moxie's Cafe & Grill, LLC filed a voluntary petition under Chapter
11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 21-00271)
on Jan. 25, 2021.
Affiliate, The Great Catch of Land O'Lakes, LLC also filed a
voluntary petition (Bankr. M.D. Fla. Case No. 21-00272) on Jan. 25,
2021. The cases are jointly administered under Moxie's Cafe &
Grill (Bankr. M.D. Fla. Lead Case No. 21-00271). The Debtors are
substantively consolidated for purposes of a reorganization Plan in
their cases.
In the petitions signed by Dennis P. Lee, manager, Debtor Moxie's
Cafe estimated up to $50,000 in assets and up to $100,000 in
liabilities. Debtor The Great Catch estimated less than $50,000 in
assets and between $500,001 and $100,000 in liabilities.
Judge Catherine Peek Mcewen is assigned to the cases.
Buddy D. Ford, P.A., serves as the Debtors' bankruptcy counsel.
MTE HOLDINGS: Gray Surface Claim OK'd but Immediate Payment Nixed
-----------------------------------------------------------------
Delaware Bankruptcy Judge Craig T. Goldblatt granted Gray Surface
Specialties and Consulting, Ltd. an administrative claim under 11
U.S.C. Section 503(b)(1) in the Chapter 11 cases of MTE Holdings
LLC, but denied Gray Surface's request for immediate payment on the
claim.
Gray Surface is allowed an administrative claim against:
-- Debtor MDC Energy LLC, in the amount of $171,557.09, and
-- Debtor MDC Texas Operator LLC, in the amount of $44,472.10.
The Debtors' business activities include drilling for oil and gas.
Drilling generates wastewater as a byproduct. The Debtors had
initiated a project, before their bankruptcy filing, to dispose of
wastewater. That project continued, and expanded, after the
bankruptcy filings. The goal of the project was ultimately to
generate revenue by charging for the disposal of wastewater
generated by other oil and gas exploration and production
companies. Gray Surface provided post-petition consulting work for
that project but has not been paid for its services.
The parties do not challenge the amounts set out in Gray Surface's
invoices. Rather, the dispute over claims allowance presents two
questions: (i) whether the "benefit to the estate" for the services
provided was too speculative to warrant administrative claim
treatment; and (ii) whether, in light of the certain discussions
between the owner of Gray Surface and the chief operating officer
of the Debtors, Gray Surface agreed to accept payment from a
non-debtor subsidiary rather than from the Debtors' estate, thus
depriving Gray Surface of its right to seek the allowance of an
administrative claim.
"[T]he Court will allow the administrative claim because the
benefit to the estate of the services provided was not too
speculative. … [T]he Court concludes that, under the doctrine of
the delegation of contractual duties, the objecting parties bear
the burden of showing that Gray Surface agreed to accept payment
from a non-debtor subsidiary rather than from the debtors' estates.
The Court finds that the objectors failed to carry that burden,"
Judge Goldblatt held.
Judge Goldblatt denied Gray Surface's request to direct the Debtors
to make immediate payment on its administrative claim, without
prejudice to being renewed if its administrative claim is not paid
in 60 days.
A copy of the Court's June 2, 2021 Memorandum Opinion is available
at https://bit.ly/3x0EoaM from Leagle.com
About MTE Holdings, LLC, et al.
MTE Holdings, LLC and its debtor-affiliates are privately held
companies in the oil and gas extraction business.
MTE Holdings sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Case No. 19-12269) on October 22, 2019.
On October 23, 2019, affiliates MTE Partners LLC (Bankr. D. Del.
Case No. 19-12272) and Olam Energy Resources I LLC (Bankr. D. Del.
19-12273) filed voluntary petitions under Chapter 11.
On November 8, 2019, these debtor-affiliates filed Chapter 11
petitions: MDC Energy LLC d/b/a MDC Texas Energy LLC (Bankr. D.
Del. Case No. 19-12385); MDC Reeves Energy LLC (Bankr. D. Del. Case
No. 19-12388); MDC Texas Operator LLC (Bankr. D. Del. Case No.
19-12387); and Ward I, LLC (Bankr. D. Del. Case No. 19-12386).
The Debtors' cases are jointly administered under MTE Holdings,
LLC's case.
Debtors MTE Holdings, LLC; MTE Partners LLC; and Olam Energy
Resources I LLC disclosed $10 billion to $50 billion in estimated
assets and $100 million to $500 million in estimated liabilities.
Debtors MDC Energy LLC, dba MDC Texas Energy LLC and MDC Reeves
Energy LLC disclosed $1 billion to $10 billion in estimated assets
and $100 million to $500 million in estimated liabilities.
Debtors MDC Texas Operator LLC and Ward I, LLC disclosed under
$50,000 in estimated assets and liabilities.
The petitions were signed by Mark A. Siffin, as authorized
representative.
Judge Karen B. Owens was originally assigned to the case before
Judge Christopher S. Sontchi took over.
The Debtors tapped Kasowitz Benson Torres LLP as bankruptcy
counsel; Morris, Nichols, Arsht & Tunnell, LLP as local counsel;
Greenhill & Co., LLC, as financial advisor and investment banker;
Ankura Consulting LLC, as a chief restructuring officer; and
Stretto as claims and noticing agent.
MY FL MANAGEMENT: Unsecureds Owed $2K+ to Recover 100% Over 5 Years
-------------------------------------------------------------------
My FL Management, LLC, filed with the U.S. Bankruptcy Court for the
Southern District of Florida a Disclosure Statement in support of
Plan of Reorganization dated June 1, 2021.
In connection with such issues, prompted by Covid-19, the
pandemic's catastrophic effects on the hospitality industry, and
the dispute with Debtor's secured lender A&D, the Debtor filed the
instant case to reinstate and decelerate the outstanding Note, pay
legitimate pre-petition claims in full, and reorganize its
financial affairs for the benefit of all constituencies.
The Plan contemplates the orderly reorganization of Debtor's
affairs. The Debtor believes the Plan provides the greatest
possible recovery for Creditors at the lowest possible cost and
preservation of value for Debtor's equity interests. Debtor
believes acceptance of the Plan is in the best interest of
Creditors and Equity Interest Holders and recommends that all
voting classes entitled to vote accept the Plan.
Class 1 consists of the Allowed Secured Claim of A&D, to be
determined by a Final Order in this Bankruptcy Proceeding. A&D
filed Claim No. 6-1 in the amount of $12,705.334.24, secured by the
Royal Beach Palace Properties. Under the Plan, A&D's Claim No. 6-1
consists of two parts: (1) the principal amount (the "Principal
Amount"); and (2) the cure amount (the "Cure Amount"). Debtor
objects to and has asserted set-off and recoupment defenses related
to the Cure Amount. The Cure Amount asserted in Claim No. 6-1 was
in the amount of $2,450,595.
Notwithstanding Debtor's Objection, A&D shall retain a Lien
securing its Allowed Class 1 Claim until such Allowed Class 1 Claim
is paid in full. Class 1 is unimpaired under the Plan and is deemed
to accept the Plan.
Class 2 consists of Holders of Allowed General Unsecured Claims
exceeding $2,000.00. Each Holder of an Allowed General Unsecured
Claim, shall, in full and complete settlement, satisfaction and
discharge of such Allowed General Unsecured Claim receive: Payment
of 100% of their Allowed General Unsecured Claim over a 5-year
period with equal monthly installment payments. Debtor estimates
Class 2 Claims in the estimated amount of $694,930 and monthly
payments of $11,582 to be paid pro rata to all Class 2 Creditors.
Class 3 consists of Holders of Allowed General Unsecured Claims in
the amount of $2,000.00 or less. Each Holder of an Allowed General
Unsecured Convenience Claim, shall, in full and complete
settlement, satisfaction and discharge of such Allowed General
Unsecured Claim receive on the Effective Date, payment of their
claims in full.
On the Effective Date, each Holder of an Equity Interest shall
retain such equity interest and shall retain, unaltered, the legal,
equitable, and contractual rights to which such equity interest
entitles such Holder.
Debtor will fund payments to be made under the Plan through Cash on
hand on and after the Effective Date until all Allowed Claims are
paid in full.
A full-text copy of the Disclosure Statement dated June 1, 2021, is
available at https://bit.ly/3uTdQXm from PacerMonitor.com at no
charge.
Counsel for the Debtor:
EDELBOIM LIEBERMAN REVAH OSHINSKY PLLC
20200 W. Dixie Highway, Suite 905
Aventura, Florida 33180
Telephone No. 305.768.9909
Facsimile No. 305.928.1114
Email: brett@elrolaw.com
Brett D. Lieberman
Edan Weiner
About My FL Management
MY FL Management LLC, owns Royal Beach Palace, a hotel located in
the residential Lauderdale-by-the-Sea, about a 10-minute walk to
the beach.
Fort Lauderdale, Florida-based MY FL Management LLC sought Chapter
11 protection (Bankr. S.D. Fla. Case No. 21-11028) on Feb. 2, 2021.
Yuri Gnesin, manager, signed the petition. The Debtor estimated
assets and debt of $1 million to $10 million as of the bankruptcy
filing.
The Debtor tapped Edelboim Lieberman Revah Oshinsky, PLLC as its
legal counsel and Karlinsky & Golub CPAs, PLLC as its accountant.
NATIONAL MEDICAL: Seeks to Extend Plan Exclusivity Thru Dec. 9
--------------------------------------------------------------
National Medical Imaging, LLC and its affiliates request the U.S.
Bankruptcy Court for the Eastern District of Pennsylvania to extend
by 155 days the exclusive periods during which the Debtors may file
a plan of reorganization through and including December 9, 2021,
and to solicit acceptances through and including February 8, 2022.
As the Court is aware, there are several open issues in this case
that will impact the Debtors' formulation of their liquidating
plan, including:
(i) whether or not U.S. Bank, National Association has a valid and
enforceable lien on the proceeds of the Debtors' pending claims
under Section 303(i);
(ii) whether or not U.S. Bank can set off its liability to the
Debtors' under Section 303(i) against its pre-petition claims
against the Debtors; and
(iii) the impact of federal bankruptcy policy underlying Section
303(i) on these issues and U.S. Bank's ability to otherwise share
in any recovery by the Debtors under Section 303(i) through a
confirmed plan.
The Debtors have made substantial and good faith progress towards
resolving the critical issues that will inform its liquidating
plan, despite much of the timing and scheduling in these bankruptcy
cases being out of their control and negatively impacted by the
aggressive actions U.S. Bank took last year to dismiss these cases
and obtain relief from the automatic stay). Indeed, the Debtors
promptly filed the U.S. Bank Adversary Proceeding on July 20,
2020—only about five weeks after the Petition Date.
On March 1, 2021, the Debtors filed their second Motion to extend
their Exclusive Periods by 120 days to July 7, 2020, and September
6, 2020, respectively, to allow additional time for the U.S. Bank
Adversary to be resolved by the Court, which was granted by the
Court on March 31, 2021.
A pre-trial scheduling order has been entered for the U.S. Bank
Adversary, which provides for a final pre-trial conference to occur
in December. The Debtors are in the process of preparing a motion
for summary judgment to resolve the outstanding claims in the U.S.
Bank Adversary. U.S. Bank has also moved for summary judgment.
After resolution of U.S. Bank's motion to dismiss, two issues are
remaining in the U.S. Bank Adversary:
(i) U.S. Bank's ability to set off its pre-petition claims against
the Debtors from its liability to the Debtors' bankruptcy estates
under Section 303(i); and
(ii) the extent, priority, and validity of U.S. Bank's asserted
liens against the Debtors' remaining assets— its claims against
U.S. Bank and other petitioning creditors under Section 303(i).
The resolution of these issues remains necessary to determine U.S.
Bank's status as a secured creditor in these bankruptcy cases: an
issue that is critical to how U.S. Bank should be classified under
any chapter 11 plan. Importantly, resolution of these issues will
also require the Court to consider the application of federal
bankruptcy policy regarding Section 303(i) and its impact on the
U.S. Bank's status as a secured creditor.
In light of the relevant facts and circumstances, the requested
extension of the Exclusive Periods will not prejudice the
legitimate interests of any creditor. Also, the additional time
will allow the Debtors to pursue to fruition the beneficial
objectives of a confirmable liquidating plan.
A copy of the Debtors' Motion to extend is available at
https://bit.ly/3fQKuTW from PacerMonitor.com.
About National Medical
National Medical Imaging, LLC, and National Medical Imaging Holding
Company, LLC provide medical and diagnostic laboratory services
with a principal place of business located at 1425 Brickell Ave.,
Apt. 57E, Miami.
U.S. Bank's DVI Receivables Trusts and other alleged creditors
filed involuntary chapter 11 petitions (Bankr. E.D. Pa. Case Nos.
05- 12714 and 05-12719) against Philadelphia, Pa.-based National
Medical Imaging, L.L.C., and National Medical Imaging Holding
Company, L.L.C., on March 3, 2005. The Creditors amended the
involuntary petitions three times: on Nov. 10, 2008; April 10,
2009; and on Aug. 26, 2009, following a contested hearing.
On June 12, 2020, National Medical Imaging and National Medical
Imaging Holding Company filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Lead Case No.
20-12618). At the time of the filings, each Debtor disclosed assets
of $10 million to $50 million and liabilities of the same range.
Judge Eric L. Frank oversees the case. The Debtors have tapped
Dilworth Paxson LLP as their bankruptcy counsel and Kaufman, Coren&
Ress, P.C. and Karalis P.C. as their special counsel. On October
23, 2020, the Debtors hired Erwin Chemerinsky, the dean, and Jesse
H. Choper Distinguished Professor of Law of the University of
California, Berkley School of Law, as their special counsel.
Before Debtors' voluntary Chapter 11 filing, DVI Receivables Trusts
and other creditors filed involuntary Chapter 11 petitions (Bankr.
E.D. Pa. Case Nos. 05-12714 and 05-12719) against Debtors on March
3, 2005.
In 2014, National Medical Imaging hit U.S. Bank N.A. and eight
others with a $50 million lawsuit in Pennsylvania federal court
alleging the bank ruined its business by forcing it into
involuntary bankruptcy proceedings just as it was beginning to
implement a turnaround plan. National Medical Imaging claims that
the involuntary bankruptcy petitions ultimately destroyed its
business even though the cases were ultimately tossed.
NEW BETHEL: Unsecureds to Split $250 Monthly
--------------------------------------------
New Bethel Baptist Church submitted a Chapter 11 Plan and a
Disclosure Statement.
The Debtor owns a real property located in 4212 Greenwood Drive,
Portsmouth, VA and having a value of $1,350,000.
The Plan provides for two classes of secured claim, one non-class
of priority unsecured claims, and two classes of unsecured claims.
Southern Bank (Class One) shall be repaid on their secured claim
which is based upon the market value of its collateral and repaid
in equal monthly payments of principal and interest, based upon a
25-year amortization with interest fixed at one percentage point
(1.00%) above the current Wall Street Journal Prime Rate (3.25%),
yielding an annual rate of interest of 4.5%. The remaining under
secured portion of Southern Bank's claim shall be paid in
accordance with Class Three, as a general unsecured claimant.
The Small Business Administration (Class Two) shall be paid on its
secured claim in equal monthly payments of principal and interest,
based upon a 30-year amortization with interest fixed at 2.75%,
pursuant to the terms of the SBA's Covid-relief Economic Injury
Disaster Loan terms.
Allowed Unsecured Class Three Claims (Non-Convenience Unsecured
Claims) include James M. Whitaker's $100,000 scheduled claim and
Southern Bank's $2,965,364. Class 3 shall receive monthly payments
of $250, beginning on the Effective Date and continuing through the
life of the Plan. All monthly payments to Class Three shall be
distributed pro rata to holders of Class Three Claims.
Allowed Unsecured Class Four Claims (Convenience Claims) will be
paid in equal aggregate monthly payments of $100, commencing after
satisfaction of the priority claims of the City of Portsmouth. At
any time after the Effective Date, the Debtor may fully satisfy all
Plan obligations due to holders of Allowed Unsecured Claims by
pre-paying, from funds borrowed from third-parties or from
designated gifts, (i) the outstanding balance of the Quarterly or
Monthly Payments due under the Plan, (ii) an amount determined by
the Court to be a value, as of the Effective Date, of not less than
the amount that would have been paid on such claims had the estate
of the Debtor been liquidated under Chapter 7 on the Effective
Date, or (iii) an amount otherwise agreed by any member of the
class of Unsecured Claims. All monthly payments to Class Four
shall be distributed pro rata to holders of Class Four Claims.
This Class is impaired.
Counsel for New Bethel Baptist Church:
Joseph T. Liberatore
Nathaniel Y. Scott
Liberatore DeBoer P.C.
Town Point Center, Suite 604
150 Boush Street
Norfolk, VA 23510
Telephone - (757) 333-4500
Facsimile - (757) 333-4501
A copy of the Disclosure Statement is available at
https://bit.ly/3vKTgtE from PacerMonitor.com.
About New Bethel Baptist Church
New Bethel Baptist Church is an unincorporated religious
association pursuant to the Constitution of the Commonwealth of
Virginia.
New Bethel Baptist Church, based in Portsmouth, VA, filed a Chapter
11 petition (Bankr. E.D. Va. Case No. 19-73531) on Sept. 24, 2019.
In the petition signed by Melinda L. Starkley, chairman of the
trustees, the Debtor disclosed $1,449,207 in assets and $4,034,673
in liabilities.
The Hon. Frank J. Santoro oversees the case.
Joseph T. Liberatore, Esq., at Crowley Liberatore P.C., serves as
bankruptcy counsel.
NEW YORK CLASSIC: Court Rejects Hudson Trust's Bid to Toss Ch. 11
-----------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that a unit of Classic Car Club
Manhattan can hold onto its luxury car rental location on
Manhattan's West Side after a bankruptcy judge rejected the Hudson
River Park Trust's bid to throw out the company's bankruptcy.
The request to dismiss the case is "quite frivolous," Judge Martin
Glenn said at a hearing Thursday, June 3, 2021, in the U.S.
Bankruptcy Court for the Southern District of New York.
The judge, who found that the company had valid reasons for filing
Chapter 11, said he also plans to issue a written opinion.
About New York Classic
New York Classic Motors LLC, doing business as Classic Car Club
Manhattan, is a classic car dealer in New York. The company filed
for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.
21-10670) in Manhattan on April 9, 2021. It listed assets of about
$50 million and liabilities of about $50 million. Kirby Aisner &
Curley LLP is the Debtor's counsel.
NORTHWEST BAY: June 9 Hearing on $2.45M Sale of 8 Bolton Lots
-------------------------------------------------------------
Judge Robert E. Littlefield, Jr., of the U.S. Bankruptcy Court for
the Northern District of New York will convene a hearing on June 9,
2021, at 2:00 p.m., to consider Northwest Bay Partners, Ltd.'s sale
of eight of its 11 lots located in the Town of Bolton, Warren
County, New York, to Laurel Shores, LLC, for the sum of $2.45
million, free and clear of any and all liens and encumbrances,
pursuant to a Purchase and Sale Agreement.
The Objection Deadline is June 7, 2021, at 4:00 p.m.
About Northwest Bay Partners
Northwest Bay Partners Ltd., a real estate holding company in
Albany, N.Y., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D.N.Y. Case No. 19-10615) on April 4, 2019. At the
time of the filing, the Debtor estimated assets of between $1
million and $10 million and liabilities of between $1 million and
$10 million. The case is assigned to Judge Robert E. Littlefield
Jr. The Debtor hired McNamee Lochner P.C. as its legal counsel,
and Walsh & Walsh, LLP, as special counsel.
NORTHWEST BAY: Laurel Shores Buying 8 Bolton Lots for $2.45 Mil.
----------------------------------------------------------------
Northwest Bay Partners, Ltd., asks the U.S. Bankruptcy Court for
the Northern District of New York to authorize the sale of eight of
its 11 lots located in the Town of Bolton, Warren County, New York,
to Laurel Shores, LLC, for the sum of $2.45 million, free and clear
of any and all liens and encumbrances, pursuant to a Purchase and
Sale Agreement.
The Debtor owns 11 building lots on Lake George. Its Real Estate
is the subject of a mortgage and judgment held by the Panella
Descendants Trust which mortgage and judgment are in dispute. The
other large creditor in the case is the Bel Point Shores
Homeowners' Association, Inc. whose claim is also in dispute and is
the subject of a recent decision by the Court. There is also a
judgment creditor, the Lake George Park Commission, and there are
also real estate taxes owed, and several unsecured creditors.
The Debtor intends to consummate the sale of eight lots to the
Purchaser free and clear of any and all liens and encumbrances and
taxes. The proceeds of the sale will be held in escrow pending
further court order or a confirmed plan of reorganization.
The sale by the Debtor will generate sufficient funds to pay
creditors as required under Bankruptcy Code Section 363(t). It is
essential that the sale of the Debtor's assets and business be
consummated as soon as possible because the claims of the creditors
are increasing thus diminishing the amounts available for equity.
Since creditors are being paid in full, many of the reasons for the
protections of distribution through a confirmation of a plan are
not present under the circumstances.
The Debtor and the principal of the Buyer have been negotiating and
exploring the sale of the Debtor's lots for several months. Those
discussions were impacted and guided by the Debtor's resolution of
its treatment of the Panella Descendant Trust's claim and its
litigation with the HOA and the diminution of its claim.
Fortunately, the Debtor and Laurel Shores have reached an agreement
for the sale of eight lots at the price of $2.45 million. It is
the equivalent of $306,250 per lot. The contract does not require
the payment of any Realtor fees or any marketing expenses which
saves the estate at least $122,496 based on a 5% commission rate.
The sale price is also consistent with the Debtor's appraisal filed
with the Court.
The Debtor urges the Court to approve the sale and have the
proceeds deposited in escrow pending a resolution of the disputed
claims of the Panella Descendant Trust and the HOA.
Finally, it should be noted that, if necessary, the Debtor may
request the Court's intervention with the Attorney General's Office
of New York State regarding its expedited review and acceptance of
an amendment to its Offering Plan for the HOA so that the sale may
be consummated within the time frame set forth in the Purchase Sale
Agreement.
A copy of the Motion is available at https://tinyurl.com/3z3abwvs
from PacerMonitor.com free of charge.
About Northwest Bay Partners
Northwest Bay Partners Ltd., a real estate holding company in
Albany, N.Y., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D.N.Y. Case No. 19-10615) on April 4, 2019. At the
time of the filing, the Debtor estimated assets of between $1
million and $10 million and liabilities of between $1 million and
$10 million. The case is assigned to Judge Robert E. Littlefield
Jr. The Debtor hired McNamee Lochner P.C. as its legal counsel,
and Walsh & Walsh, LLP, as special counsel.
OFS INTERNATIONAL: Has Interim OK on DIP Loan, Cash Collateral Use
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, has authorized OFS International LLC and
affiliate, Threading and Precision Manufacturing LLC, to, among
other things, use cash collateral on an interim basis and obtain
post-petition financing.
The Debtors obtained postpetition financing on a superpriority
basis consisting of a senior secured, super-priority credit
facility of up to $16,500,000, consisting of a $12,500,000
revolving loan facility and a term loan facility in the aggregate
amount not to exceed $4,000,000, pursuant to the terms and
conditions of a Senior Secured, Priming and Super-Priority
Debtor-In-Possession Credit Agreement, dated as of June 2, 2021, by
and among OFSI as borrower, TPM as a Loan Guarantor, and Sandton
Capital Solutions Master Fund V, LP, as DIP lender.
On an interim basis, the Debtors are authorized to borrow up to the
principal amount of $800,000 from Sandton. The Debtors are
authorized to use proceeds of the Financing in accordance with the
Approved Budget, with a 15% variance.
Pursuant to the Credit Agreement, dated as of July 13, 2018 and any
other agreements and documents executed or delivered in connection
therewith, originally among the Borrower, Threading and Precision
Manufacturing LLC as Guarantor, the other Loan Parties thereto, and
JPMorgan Chase Bank, N.A., as lender, the lender provided revolving
credit and other financial accommodations to, and issued letters of
credit for the account of, the Borrower pursuant to the
Pre-Petition Loan Documents.
Pursuant to the Sale and Assignment Agreement, dated as of May 28,
2021, Sandton agreed to purchase, and did purchase, all of the
Pre-Petition Loan Documents from JPM in exchange for an assignment
of all of JPM's right, title, and interest in and to the
Pre-Petition Loan Documents. The Pre-Petition Credit Facility
provided the Borrower with, among other things, a Revolving
Commitment up to $13,500,000 in the aggregate (as of May 17, 2021).
As of the Petition Date, the aggregate principal amount outstanding
under the Pre-Petition Credit Facility was not less than
$12,500,000.
The Debtors acknowledge and stipulate that they are in default of
their obligations under the Pre-Petition Loan Documents, including
as a result of the commencement of the Chapter 11 Cases, and that
an Event of Default has occurred under the Pre-Petition Loan
Documents.
As adequate protection for the Debtors use of cash collateral, the
Pre-Petition Lender is granted continuing, valid, binding,
enforceable, and perfected postpetition security interests in and
liens on all DIP Collateral.
As further adequate protection, the Pre-Petition Lender is granted
as and to the extent provided by section 507(b) of the Bankruptcy
Code an allowed super-priority administrative expense claim in each
of the Chapter 11 Cases and any Successor Cases.
The Debtors are also authorized and directed to provide adequate
protection to the Pre-Petition Lender in the form of payment in
cash of the reasonable and documented fees, out-of-pocket expenses,
and disbursements incurred by the Pre-Petition Lender arising prior
to the Petition Date.
The Final Hearing to consider entry of the Final Order is scheduled
for June 21, 2021 at 3:30 p.m.
A copy of the order is available for free at https://bit.ly/3idJbS5
from PacerMonitor.com.
About OFS International
OFS International providers of oil and gas production/processing
equipment and services, with their headquarters in Houston, Texas
and operations in the Permian, Barnett and Marcellus regions. It
provides field services, inspections, couplings, threading and
accessories to the oil and gas industry.
OFS International and affiliates, OFSI Holding LLC and Threading
and Precision Manufacturing LLC, sought Chapter 11 protection
(Bankr. S.D. Tex. Lead Case No. 21-31784) on May 31, 2021. In the
petition signed by chief financial officer Alexey Ratnikov, OFS
estimated assets of between $10 million and $50 million and
estimated liabilities of between $50 million and $100 million.
The cases are handled by Honorable Judge David R. Jones.
The Debtors' attorneys are Joshua W. Wolfshohl, Aaron J. Power, and
Megan Young-John of PORTER HEDGES LLP. BMC GROUP, Inc., is the
Debtors' claims agent.
Sandton Capital Solutions Master Fund V, LP, as DIP Lender and
Pre-Petition Lender, may be reached at:
Sandton Capital Solutions Master Fund V, LP
c/o Sandton Capital Partners
16 W. 46th Street, 11th Floor
New York, NY 10036
Attention: OSF International Loan Administration
Sandton is represented by:
Mark E. Freedlander, Esq.
McGuireWoods LLP
Tower Two-Sixty
260 Forbes Avenue, Suite 1800
Pittsburgh, PA 15222
E-mail: mfreedlander@mcguirewoods.com
ORGANIC POWER: Taps Vidal, Nieves & Bauza as Special Counsel
------------------------------------------------------------
Organic Power, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Puerto Rico to hire Vidal, Nieves & Bauza, LLC
to act as its special counsel.
The firm will represent the Debtor in environmental matters,
including administrative proceedings within the Department of
Environmental and Natural Resources of Puerto Rico.
The firm will be paid at these rates:
Members $245 per hour
Special Counsels $240 per hour
Associates $130 - $170 per hour
Paralegals $90 per hour
As disclosed in court filings, Vidal, Nieves & Bauza is a
disinterested party as required by Section 327(e) of the Bankruptcy
Code.
The firm can be reached through:
Pedro J. Nieves-Miranda, Esq.
Vidal, Nieves & Bauza, LLC
T-Mobile Center
B7 Cll Tabonuco Suite 1108
Guaynabo, 00968, PR
Phone: +1 787-413-8880
Email: pnieves@vnblegal.com
info@vnblegal.com
About Organic Power
Organic Power, LLC, is a Vega Baja, P.R.-based company that offers
food processing companies, restaurants, pharmaceuticals and retail
outlets an alternative to landfill disposal -- a low cost and
environmentally friendly recycling option. Visit
https://www.prrenewables.com/
Organic Power sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.P.R. Case No. 21-00834) on March 17, 2021. Miguel
E. Perez, president, signed the petition. In its petition, the
Debtor disclosed assets of between $10 million and $50 million and
liabilities of the same range.
Judge Edward A. Godoy oversees the case.
The Debtor tapped Fuentes Law Offices, LLC as bankruptcy counsel,
and Godreau & Gonzalez Law, LLC and Vidal, Nieves & Bauza, LLC as
special counsel. CPA Luis R. Carrasquillo & Co., P.S.C. is the
financial advisor.
OSMOSE UTILITIES: Moody's Assigns 'B3' CFR, Outlook Stable
----------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating, a
B3-PD Probability of Default Rating to Osmose Utilities Services,
Inc. Concurrently, Moody's assigned a B2 rating to the proposed
first lien senior secured credit facilities consisting of a $760
million term loan due 2028 and a $100 million revolving credit
facility expiring 2026. The rating outlook is stable.
Proceeds from Osmose's proposed first lien senior secured credit
facilities, along with a $270 million second lien term loan
(unrated) and $45 million of balance sheet cash, will be used to
fully repay the company's existing $703 million first lien term
loan, fund a $354 million return of capital to shareholders, and
pay related fees and expenses. The new $100 million revolver is
expected to remain undrawn at closing.
Osmose is subject to governance risk as the business is owned by
private equity investors and is expected to maintain an aggressive
financial strategy prioritizing shareholders as evidenced by the
return of capital recap and the high leverage levels associated
with the proposed transaction.
Assignments:
Issuer: Osmose Utilities Services, Inc.
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Senior Secured 1st Lien Revolving Credit Facility, Assigned B2
(LGD3)
Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3)
Outlook Actions:
Issuer: Osmose Utilities Services, Inc.
Outlook, Assigned Stable
The assigned ratings are subject to review of final documentation
and no material change to the size, terms and conditions of the
transaction as advised to Moody's.
RATINGS RATIONALE
Osmose's B3 CFR reflects its elevated debt-to-EBITDA leverage of
7.4 times (Moody's adjusted) for the twelve months ending March 31,
2021 proforma for the return of capital recapitalization and
Moody's expectation for leverage to decline to the mid-to-high 6
times range in the next 12 to 18 months. The planned return of
capital and the company's history of debt-funded acquisitions
supports Moody's expectation that the company will maintain an
aggressive financial policy that may delay deleveraging in favor of
acquisitions or shareholder returns. The ratings are also
constrained by the company's modest size relative to rated
companies in the business services industry. The rating is
supported by favorable industry fundamentals, including increasing
regulatory requirements, aging infrastructure, and increasing
customer outsourcing of utility pole maintenance and repair
services, the company's leading market position and national
footprint, long-term contracts and customer relationships,
expectation of positive free cash flow generation and good
liquidity position.
Moody's expects Osmose to have good liquidity over the next 12-15
months. Sources of liquidity consist of approximately $10 million
of balance sheet cash proforma for the proposed transaction, a
proposed $100 million revolving credit facility expected to remain
undrawn at closing, and strong free cash flow generation of around
$50 million, which provides adequate coverage for $7.6 million of
required annual first lien term loan amortization payments. The
revolver will be subject to a maximum springing first lien secured
leverage ratio test when drawings exceed 35% of availability. The
covenant is expected to be set at a ratio that reflects at least a
35% cushion with no step-downs. Moody's expects that the company
will maintain compliance with this financial covenant.
As proposed, the new senior secured first lien and second lien
credit facilities are expected to provide covenant flexibility that
if utilized could negatively impact creditors. Notable first lien
terms include incremental debt capacity up to the greater of 100%
of closing date consolidated EBITDA and 100% of consolidated EBITDA
for the most recently completed four fiscal quarter period, plus
amounts available under the General Debt and the Ratio Debt Starter
Amount baskets, plus an amount not to exceed the closing date first
lien net secured leverage ratio. Amounts up to the greater of 100%
of closing date Consolidated EBITDA and 100% of Consolidated EBITDA
may be incurred with an earlier maturity date than the initial term
loans.
There are no express "blocker" provisions which prohibit the
transfer of specified assets to unrestricted subsidiaries; such
transfers are permitted subject to carve-out capacity and other
conditions. 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.
There are no express protective provisions prohibiting an
up-tiering transaction.
The proposed terms and the final terms of the credit agreement may
be materially different.
The B2 rating of the senior secured first lien credit facility,
consisting of a $100 million revolving credit facility expiring
2026 and a $760 million term loan due 2028, reflects a PDR of B3-PD
and a loss given default ("LGD") of LGD3. The senior secured first
lien rating is one notch higher than the B3 CFR, reflecting the
first priority lien on substantially all Osmose's assets and the
loss absorption provided by the unrated $270 million senior secured
second lien term loan due 2029 in Moody's hierarchy of claims at
default.
The stable rating outlook reflects Moody's expectations for
mid-single digit organic revenue growth to result in modest
deleveraging over the next 12 to 18 months and for Osmose to
maintain its good liquidity profile.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Osmose delivers sustained revenue
and earnings growth, maintains debt-to-EBITDA leverage below 6.5x,
generates free cash flow as a percentage of debt in the mid-to-high
single digits, and demonstrates commitment to more conservative
financial policies.
The ratings could be downgraded if there is a deterioration in
operating performance or liquidity, a major customer is lost,
debt-to-EBITDA leverage is sustained above 7.5x, free cash flow is
weak or negative, or financial strategies become more aggressive.
Osmose Utilities Services, Inc., headquartered in Peachtree City,
GA, provides utility pole and transmission tower inspection,
treatment, and restoration services to investor-owned utilities,
cooperatives, municipalities, and telecommunication utility
providers. The company also provides additional value-added
services, engineering services, underground vault inspection and
repair, product sales, and other ancillary services. Osmose has
been owned by EQT Partners since 2019. In 2020, the company
generated over $564 million in revenues.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
OSMOSE UTILITIES: S&P Assigns 'B' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings S&P Global Ratings assigned its 'B' issuer
credit rating to Osmose Utilities Services Inc., a U.S.-based
utility and telecommunications services provider. The outlook is
stable.
S&P said, "At the same time, we assigned our 'B' issue-level
ratings and '3' recovery ratings to the first-lien senior secured
term loan and revolving line of credit. Our '3' recovery rating
indicates our expectation for meaningful recovery (50%-70%; rounded
estimate: 55%) in the event of a payment default.
"The stable outlook reflects our expectation that the company's
good profitability and demand for maintenance and rehabilitation
services on aging U.S. utility infrastructure will continue. We
forecast the company will continue to generate positive free
operating cash flow, although we expect pro forma for the
transaction debt to EBITDA will be elevated at 7x in 2021.
"We assume Osmose will maintain its above-average profitability,
with adjusted debt to EBITDA around 7x over the next 12 months. In
2021, we anticipate Osmose will reap the full benefit of its recent
acquisitions and demand to maintain the safety and integrity of
aging utility and telecommunications infrastructure in the U.S.
will continue to provide recurring revenue and profitability,
driven by routine maintenance work and various cost-management
initiatives. Despite elevated debt leverage pro forma for the
transaction, we expect EBITDA margins in the mid-20% area will
result in somewhat improved debt leverage by 2022. That said, we
anticipate debt to EBITDA will remain elevated and the company's
financial sponsor ownership may preclude any meaningful debt
reduction over the next several years.
"We anticipate solid free operating cash flow (FOCF) generation
through 2022, despite our expectation for relatively high capital
expenditure requirements as a percentage of revenue compared to
engineering & construction (E&C) peers. In 2020, Osmose increased
its capital expenditures to support its digital and analytics
capabilities and we assume capital expenditure will remain somewhat
high over the next few years. However, its above average
profitability and variable cost profile should maintain FOCF to
debt around 5% through 2022. We do not assume dramatic swings in
working capital in our base-case forecast.
"Osmose should continue to benefit from its good market position in
its niche market. The company's modest scale, concentrated
footprint in the U.S., and limited end-market diversity form our
view of its business, as it relates to larger players in the
broader global E&C industry. However, Osmose is a leading provider
of structural integrity services for electric and
telecommunications utilities in the U.S. with around 70% market
share in the wood infrastructure market. About 70% of the company's
revenue comes from wood utility pole inspection, treatment, and
restoration services. Regulations on utility providers to ensure
infrastructure safety and reliability drives demand. The company
has entrenched customer relationships with investor owned utilities
and telecommunications customers, that expect a good safety and
execution track record. Additionally, the company's services are
recurring in nature, with multiyear routine maintenance contracts
and predictable treatment cycles (8-12 year cycles). A substantial
portion of wood utility infrastructure is aged, though routine
maintenance can extend the useful life of such assets at lower cost
than to replace the assets. In addition, the trend of utility
customers outsourcing maintenance services to providers like Osmose
provides long-term growth opportunities, in our view.
"The stable outlook reflects our expectation that Osmose will
continue to benefit from demand for its utility pole inspection,
treatment, and restoration services over the next year. It's
multiyear contracts and high margin services should support
profitability and positive free cash flow generation. Pro forma for
the transaction, we expect debt to EBITDA will be around 7x with
FOCF to debt around 5%.
"We could lower our ratings on Osmose over the next 12 months if we
believe the company's FOCF will decline such that FOCF to debt
falls below 3%. This could occur because of an unexpected drop in
the company's operating performance tied to, for example, prolonged
project delays or unexpected material contract cancellations. In
addition, we could also lower the ratings if the company's leverage
remains above 6.5x on a sustained basis.
"We consider an upgrade unlikely over the next 12 months because we
believe the company's credit measures will remain highly leveraged
under its private-equity owners. However, we could raise the rating
if the company demonstrates sustained debt reduction with debt to
EBITDA well below 5x, and we believe the risk of debt leverage
increasing above 5x is low, with FOCF to debt approaching 10%."
PACIFIC LINKS: Affiliate Wins Cash Collateral Access
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Hawaii has authorized
Hawaii MVCC LLC, an affiliate of Pacific Links U.S. Holdings, Inc.,
to use cash collateral on a final basis.
The Debtor is authorized to use the pre-petition cash collateral of
Tianjin Dinghui Hongjun Equity Investment Partnership (CDH) in the
ordinary course of the Debtor's operations to pay what the Debtor
determines to be reasonable and ordinary expenses of operating and
maintaining the Debtor, in accordance with the Budget, with a 10%
variance.
As adequate protection for the Debtor's use of cash collateral, CDH
is granted replacement liens in the estate's post-petition assets,
and the proceeds thereof, to the same extent and priority as any
lien held by CDH in the Pre-Petition Collateral as of the Petition
Date, limited to the amount of Pre-Petition Collateral as of the
Petition Date. The Replacement Liens is granted with the same
validity and priority and to the same extent and as CDH's
prepetition liens, and would be subject to the same rights and
challenges by or on behalf of MVCC. The amount secured by the
Replacements Liens will be equal to any actual net diminution of
CDH's Cash Collateral due to MVCC's use thereof. The Replacement
Liens will be valid, perfected and enforceable against the
Replacement Collateral without further filing or recording of any
document or instrument or the taking of any further action.
However, the Replacement Liens will be subject to and subordinate
to the fees and expenses of a Chapter 7 trustee, if one is
appointed, but not including the expenses of the Chapter 7
trustee's professionals.
A further hearing on the use of cash collateral is scheduled for
July 26, 2021 at 2 p.m.
A copy of the order and the Debtor's budget for February to July
2021 is available for free at https://bit.ly/3vVYoLu from
PacerMonitor.com.
The Debtor projects revenues of $89,890 and total operating
expenses of $82,235 for June.
About Pacific Links US Holdings
Pacific Links US Holdings, Inc. is a golf club that offers global
reciprocal programs to members and participating clubs. It sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. D.
Hawaii Case No. 21-00094) on Feb. 1, 2021. Wei Zhou, director,
signed the petition. Affiliates that also sought Chapter 11
protection are Hawaii MVCC LLC, Hawaii MGCW LLC, MDRE LLC, MDRE 2
LLC, MDRE 3 LLC, MDRE 4 LLC, and MDRE 5 LLC. On Feb. 2, the Court
authorized the jointly administration of the cases.
At the time of filing, Pacific Links estimated assets of between
$50,000 and $100,000 and liabilities of between $50 million and
$100 million.
Choi & Ito is the Debtors' legal counsel.
PALM BEACH: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Palm Beach Resort and Beach Club Condominium
Association, Inc.
3031 S Ocean Blvd
Palm Beach, FL 33480-5603
Business Description: Palm Beach Resort and Beach Club Condominium
Association is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: June 4, 2021
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 21-15555
Debtor's Counsel: Ido J. Alexander, Esq.
LEIDERMAN SHELOMITH ALEXANDER +
SOMODEVILLA, PLLC
2699 Stirling Rd # C401
Fort Lauderdale, FL 33312
Tel: 954-920-5355
E-mail: ija@lsaslaw.com
Total Assets: $1,032,642
Total Liabilities: $20,661
The petition was signed by Donald M. Laing, Jr., president.
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/4VBGOCI/Palm_Beach_Resort_and_Beach_Club__flsbke-21-15555__0001.0.pdf?mcid=tGE4TAMA
PARKLAND CORP: S&P Rates New C$400MM Senior Unsecured Notes 'BB'
----------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level and '4' recovery
ratings to Parkland Corp.'s proposed C$400 million senior unsecured
notes due in 2026. The '4' recovery rating reflects its expectation
of average (30%-50%; rounded estimate: 30%) recovery in a default
scenario. The 'BB' issue-level and '4' recovery ratings on
Parkland's existing unsecured notes are unchanged.
S&P said, "We expect the company to use the proceeds to refinance
about a C$400 million draw on the revolving credit facility (RCF;
senior secured debt). As a result, we view the transaction as
leverage neutral. Consequently, due to a higher level of senior
unsecured debt, we anticipate recovery prospects for the existing
senior unsecured noteholders to decrease to 30% from 35%. However,
the '4' recovery rating is unchanged for these noteholders. Because
the recovery estimate is at the lower end of the '4' recovery
rating, any substantial amount of incremental secured debt or
unsecured debt could lead us to revise the recovery rating to
'5'."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P assumes a hypothetical default in 2026 stemming from a
significant decline in fuel volumes and margins, which could result
from a protracted recession that reduces fuel demand.
In addition, intensifying competition and lower-than-expected
refinery utilization could pressure cash flows further to the point
that the company is no longer able to operate absent filing for
creditor protection.
-- S&P said, "To value Parkland's Burnaby, B.C. refinery asset, we
apply about a US$3,000 multiple to the refinery's 55,000 barrels
per day crude slate throughput capacity. Our valuation reflects the
favorable market dynamics, access to cost-advantaged sources of
crude through the Trans Mountain Pipeline System, low-complexity
refinery, and a good product slate because more than 90% of the
refinery output is high-value products.
-- S&P said, "We also assume that Parkland owns 100% of SOL
Investments Inc. at the time of default and has financed the
acquisition through its bank borrowings; therefore, we assume a
100% draw on the revolver, compared with an 85% default assumption
in our recovery criteria."
-- S&P values the rest of Parkland's assets, including 100% of
SOL, using an EBITDA multiple approach--the fuel retail assets are
valued at a 5x multiple on default-year EBITDA of about C$624
million.
-- Parkland's senior secured debtholders (for the RCF) would
expect very high (90%-100%; rounded estimate: 95%) recovery in the
event of default.
-- The remaining value of about C$1.15 billion after servicing the
senior secured claims will be available to the senior unsecured
noteholders, leading to average (30%-50%; rounded estimate: 30%)
recovery in the event of default and an issue-level rating of
'BB'.
Simulated default assumptions
-- Valuation of refinery: About C$215 million
-- Emergence EBITDA of retail assets: About C$624 million
-- Multiple: 5.0x
-- Gross enterprise value (including the valuation for the Burnaby
refinery): about C$3.33 billion
-- Net recovery value for waterfall after administrative expenses
(5%): about C$3.17 billion
Simplified waterfall
-- Estimated priority claims: about C$6.8 million
-- Remaining recovery value: about C$3.16 billion
-- Estimated senior secured claim: about C$2.01 billion
-- Value available for senior secured claim: about C$3.16 billion
--Recovery range: 90%-100% (rounded estimate: 95%)
-- Estimated senior unsecured claims: about C$3.5 billion
-- Value available for unsecured claim: about C$1.15 billion
--Recovery range: 30%-50% (rounded estimate: 30%)
All debt amounts include six months of prepetition interest.
PAYSAFE HOLDINGS: Moody's Rates New Dual-Tranche Term Loan 'B1'
---------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to the proposed
$1,026 million equivalent dual-tranche senior secured term loan,
due 2028, to be issued by Paysafe Holdings (US) Corp. Concurrently,
Moody's has also assigned a B1 rating to the proposed $305 million
senior secured revolving credit facility, due 2027, to be issued by
Paysafe Holdings UK Limited. Outlook on all ratings is stable.
Paysafe Group Holdings II Limited ("Paysafe" or "the company") B1
corporate family rating (CFR), B1-PD probability of default rating
(PDR) as well as the ratings on the existing debt instruments of Pi
Lux Finco S.a r.l., Paysafe Holdings (US) Corp. and PI UK BidCo
Limited remain unchanged. Proceeds from the new dual-tranche senior
secured term loan will be used to refinance an equivalent amount
under the existing first lien senior secured term loans due 2025
and pay associated fees and expenses. The ratings on the existing
debt instruments will be withdrawn upon repayment.
"The transaction is broadly leverage neutral and will extend
moderately the debt maturity profile of Paysafe after the closing
of the SPAC process in March" says Luigi Bucci, Moody's lead
analyst for Paysafe.
"Paysafe's rating and outlook continue to be supported by the sound
growth prospects across its segments, particularly the US iGaming.
At the same time, they also reflect a certain degree of debt-funded
M&A risk, as Paysafe targets consolidation in the industry as part
of its strategy"
RATINGS RATIONALE
The B1 CFR of Paysafe primarily reflects (1) its geographical
diversification of earnings, with presence across the US, Europe
and Asia; (2) sound growth prospects across its key segments; (3)
positive growth dynamics from the deregulation of online gaming in
the US market; (4) more predictable financial policy post-SPAC
transaction closing in March; and (5) good liquidity supported by a
solid free cash flow (FCF) generation and access to the new and
upsized $305 million RCF.
Conversely, Paysafe's CFR is constrained by (1) its high
Moody's-adjusted gross leverage of 5.3x, pro forma for the
transaction and based on unaudited LTM March 2021 financials; (2)
the high reliance on US small and medium businesses (SMBs), where a
portion of business is secured via US independent sales
organisations (ISOs), a market subject to a high level of
competition and pricing pressure; (3) uncertainties around
macroeconomic recovery trends post-coronavirus; (4) risk that
organic deleveraging after 2021 could be slowed down by debt-funded
acquisitions as the company continues to participate in the
consolidation of the industry; and (5) socially driven regulatory
risks related to the company's exposure to online gambling.
Moody's expects Paysafe's net revenues to grow in the mid-to-high
single digit range over 2021 and 2022. Deregulation of online
betting in the US provides clear upside to these forecasts, as
evidenced by the strong results in Q1 2021, however uncertainties
remain around the pace of recovery post-coronavirus. The rating
agency also forecasts company-adjusted EBITDA, pre-restructuring
costs and the impact of potential M&A, to grow towards $540-550
million in 2022 (LTM March 2021: $426 million) supported by
top-line expansion and, to some extent, the announced cost savings
to be achieved post-SPAC closing.
Moody's forecasts Paysafe's Moody's-adjusted leverage to decline
towards 4.5x-5.0x by 2021-2022 (PF 2020: 5.5x) driven by the
expected EBITDA growth. While the company retains potential to
achieve strong organic deleveraging, Moody's continues to assume
that most of the financial flexibility created through operational
performance improvements will be used for debt-funded M&A. Under
the rating agency current expectations Moody's-adjusted FCF/debt
will improve towards 8%-11% over 2021-2022 (2020: 5%) largely
driven by EBITDA improvements together with lower interest payments
and debt levels post debt repayment as part of the SPAC closing.
ENVORONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
Paysafe has meaningful exposure to customers in the gaming industry
which is identified as having high social risk in Moody's ESG
framework. Gambling addiction and elevated potential for crime
(such as money laundering) are generally viewed as the main drivers
of high social credit risk in the gaming sector. Another key risk
area for the sector is security of the large amounts of customer
data. The company has an established framework to manage cyber
risk, including third-party security assessments and insurance
coverage.
In terms of governance, after closing of the SPAC transaction
private equity funds CVC and Blackstone are the largest
shareholders in the company with a stake of approximately 46%. The
remaining shareholders are largely represented by private investors
and Cannae Holdings, Inc.
The financial policy of the company is expected to be more
conservative compared to the past, as evidenced by the long term
leverage target of 3.5x. Paysafe's financial policy also reflects
the company's intention to expand through acquisitions and its
history of pursuing debt-funded growth. The company has, however, a
well-defined acquisition strategy as well as a good track record of
successfully integrating acquisitions and achieving operational
efficiencies.
LIQUIDITY
Moody's views Paysafe's liquidity as good, based on the company's
cash flow generation, available cash resources of $274 million as
of March 2021 and a $305 million committed RCF (expected to be
partially drawn after the closing of the transaction), as well as a
long-dated maturity profile. The rating agency expects the company
to continue generating positive FCF through 2022, supporting the
liquidity of the business.
The RCF has a springing financial maintenance covenant (net senior
secured leverage ratio) set at 7.5x, only tested on a quarterly
basis when the RCF is drawn by more than 40%.
STRUCTURAL CONSIDERATIONS
The instrument ratings on the new senior secured dual-tranche term
loan and RCF are in line with the CFR, reflecting the pari-passu
nature of the instruments. The instruments are guaranteed by
material subsidiaries representing a minimum of 80% of consolidated
EBITDA and security will include shares, intercompany receivables,
and, solely with respect to English Guarantors, a floating charge
over its assets, subject to customary exclusions. Moody's sees the
security package as weak overall.
RATIONALE FOR STABLE OUTLOOK
The stable outlook reflects Moody's view that operating performance
over the next 12-18 months will improve from 2020 levels. The
stable outlook also envisages Moody's-adjusted leverage below 5.5x,
as well as no transformational debt-funded acquisition or
shareholder distribution.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward rating pressure could arise if (1) the group maintains its
Moody's-adjusted gross leverage sustainably below 4.5x; (2)
Moody's-adjusted FCF/debt remains above 10% on a sustained basis;
and (3) the company were to demonstrate a solid track-record of
commitment to a conservative financial policy under the new
structure.
Moody's would consider a rating downgrade if Paysafe were to
continue experiencing weaknesses in its core segments after 2020 or
if it were to embark in transformational debt-funded acquisitions
or shareholder distributions. Negative pressure would arise if (1)
Moody's-adjusted leverage increases to over 5.5x on a sustainable
basis; or (2) Moody's-adjusted FCF/Debt reduces to below 5%; or (3)
liquidity weakens.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
LIST OF AFFECTED RATINGS
Assignments:
Issuer: Paysafe Holdings (US) Corp.
Senior Secured Bank Credit Facility (Foreign Currency), Assigned
B1
Senior Secured Bank Credit Facility (Foreign Currency), Assigned a
range of LGD4, 50 %
Issuer: Paysafe Holdings UK Limited
Senior Secured Bank Credit Facility (Foreign Currency), Assigned
B1
Senior Secured Bank Credit Facility (Foreign Currency), Assigned a
range of LGD4, 50 %
Outlook Actions:
Issuer: Paysafe Holdings UK Limited
Outlook, Changed To Stable From Rating Withdrawn
COMPANY PROFILE
Headquartered in London (United Kingdom), Paysafe is a global
provider of online payment solutions and stored-value products
operating in the United States, Europe and Asia. Over LTM March
2021, Paysafe generated net revenues and company-adjusted EBITDA of
$1.4 and $0.4 billion, respectively. Following the successful
closing of the SPAC transaction, Paysafe is listed on the New York
Stock Exchange.
PCI GAMING: Moody's Alters Outlook on Ba3 CFR to Stable
-------------------------------------------------------
Moody's Investors Service revised PCI Gaming Authority's rating
outlook to stable from negative. PCI's Ba3 Corporate Family Rating,
Ba3-PD Probability of Default Rating were affirmed along with the
Ba3 rating on the company's senior secured revolver and senior
secured term loan.
PCI owns and operates three casinos on tribal lands in Alabama.
These three casinos are the only authorized gaming facilities in
Alabama. The company also owns Wind Creek Bethlehem located in
Bethlehem, PA. PCI is an unincorporated instrumentality conducting
gaming activities for the Poarch Band of Creek Indians (Tribe), the
only federally recognized Tribe in the state of Alabama
"The outlook revision to stable is in response to PCI's good
operating performance during the past year despite difficult
circumstances including temporary closures and social distancing
restrictions," stated Keith Foley, a Senior Vice President at
Moody's. "Moody's expects there will be a gradual easing of social
distancing requirements that will result in increased visitation,
and in turn, further improvement in revenue and EBITDA."
"Even with revenue and EBITDA dips from temporary closings and
social distancing restrictions, PCI was able to maintain its
debt/EBITDA below its downgrade factor of 4.0x as well as maintain
an unrestricted cash balance over $400 million," added Foley.
"PCI's debt/EBITDA for the latest 12-month period ended 31-Dec-2020
was 3.7x and should decline now that Wind Creek Bethlehem has
re-opened."
Moody's affirmed PCI's ratings given that debt-to-EBITDA is
projected to be in a mid 3.0x range and above the 3.0
debt-to-EBITDA trigger required for an upgrade. Other ratings
affirmation considerations include the company's market position
and considerable cash resources.
Following a temporary closure from 15-Mar-2020 through 29-Jun-2020,
Wind Creek Bethlehem closed again on 11-Dec-2020 following an order
by the Governor that casinos and other indoor dining and gathering
venues within the city limits close through 1-Jan-2021. The order
was in response to a rise in coronavirus cases in the area and
became effective 20-Nov-2020. Wind Creek Bethlehem reopened
4-Jan-2021. Wind Creek Bethlehem accounts for about 15% of PCI's
consolidated revenue.
Affirmations:
Issuer: PCI Gaming Authority
Probability of Default Rating, Affirmed Ba3-PD
Corporate Family Rating, Affirmed Ba3
Senior Secured First Lien Revolving Credit Facility, Affirmed Ba3
(LGD3) from (LGD4)
Senior Secured First Lien Term Loan, Affirmed Ba3 (LGD3) from
(LGD4)
Outlook Actions:
Issuer: PCI Gaming Authority
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
PCI's Ba3 CFR acknowledges the company's substantial cash
resources, low leverage, and strong interest coverage. Other
favorable credit factors include PCI's solid market position in the
Alabama gaming market with three properties located within driving
distance of the densely populated Atlanta, Birmingham, and Mobile
metro areas and lack of in-state competition. Key credit concerns
include significant geographic concentration and continued, albeit
lessened, concerns related to capacity restrictions and volume
weakness that could occur as a result of the coronavirus. PCI is
also reliant on cyclical discretionary consumer spending, and
vulnerable to volume losses if gaming facilities are opened in
neighboring states. Additionally, PCI makes significant regular
cash distributions to its owner, the Poarch Band of Creek Indians
Tribe, that limits cash available for acquisitions, reinvestment
and debt repayment.
The coronavirus outbreak and the government measures put in place
to contain it continue to disrupt economies and credit markets
across sectors and regions. Although an economic recovery is
underway, the recovery is tenuous, and continuation will be closely
tied to containment of the virus. As a result, a degree of
uncertainty around Moody's forecasts remains. Moody's regards the
coronavirus outbreak as a social risk under Moody's 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, PCI remains vulnerable to a renewed
spread of the outbreak. PCI also remains exposed to discretionary
consumer spending that leave it vulnerable to shifts in market
sentiment in these unprecedented operating conditions.
From a governance risk and financial policy perspective, like other
Native American gaming issuers, gaming operations are designed to
generate income for the Tribe that it can then use to support its
government functions, infrastructure development, education,
healthcare, and in many cases direct payments to tribal members. As
a result, the majority of operating cash flow generated by the
Tribe's Gaming Division has and will continue to be distributed
back to the Tribe and reinvested through development projects. The
Tribe tends to keep a conservative leverage profile to protect the
dividends in the event of earnings weakness.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
PCI's stable outlook considers an upgrade is unlikely at this time
given the continued, albeit lessened, uncertainty related to the
coronavirus. The stable outlook also reflects Moody's assumption
that the facilities will remain open, leading to higher revenue and
earnings relative to the past year.
An upgrade would require a high degree of confidence on Moody's
part that the gaming sector has returned to a period long-term
stability, and that PCI demonstrate the ability to generate
positive free cash flow, maintain good liquidity, and operate at a
debt/EBITDA level at 3.0x or lower.
Ratings could be downgraded if Moody's anticipate that debt/EBITDA
will rise above 4.0x for an extended period or PCI's dominant
market position becomes challenged in a meaningful way. Ratings
could also be downgraded if liquidity deteriorates, or future
actions to contain the spread of the virus or reductions in
discretionary consumer spending have a material negative impact on
revenue earnings.
PCI Gaming Authority d/b/a Wind Creek Hospitality is an
unincorporated instrumentality conducting gaming activities for the
Poarch Band of Creek Indians, the only federally recognized Tribe
in the state of Alabama. PCI owns three casinos in Alabama all
located on Tribal Lands. In May 2019, the Authority completed the
acquisition of 100% of the assets of Sands Pennsylvania Inc (Sands
Bethlehem) for a total enterprise value of $1.3 billion. PCI's
revenues for the latest 12-month period ended 31-Dec-2020 was
approximately $911 million.
The principal methodology used in these ratings was Gaming
Methodology published in October 2020.
PINNACLE DEMOLITION: Wins Cash Collateral Access
------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York has
authorized Pinnacle Demolition and Environmental Services Corp. to
use cash collateral on an interim basis in accordance with the
budget.
Prior to the Petition Date, the Debtor obtained from Commercial
Credit Group Inc. a commercial equipment loan, which is evidenced
by a Negotiable Promissory Note and Security Agreement executed by
the Debtor and payable to CCG dated December 21, 2017, in the face
amount of $229,918.75 and the Amendment to Negotiable Promissory
Note and Security Agreement / Lease / Conditional Sale Contract
executed by the Debtor and CCG dated January 10, 2019.
Pursuant to the Note, the Debtor granted to CCG security interests
and lien in and upon a 2012 Link Belt 350X# Excavator with Geith
Hydraulic coupler, Hydraulic Thumb and Standard Bucket bearing s/n
EKDK2-5959, as well as all of the Debtor's accounts, accounts
receivable, chattel paper, equipment, contract rights, documents,
fixtures, general intangibles, goods, instruments, inventory,
securities, deposit accounts, investment property, and all other
property of the Debtor, which in part, constitute "cash
collateral."
CCG properly perfected its pre-petition security interests in the
Cash Collateral and Excavator Collateral by filing UCC-1 Financing
Statements with the New York Department of State.
As of the Petition Date, the Debtor owed CCG $124,320.11 on the
Note, plus subsequently accruing interest, and other charges,
including legal expenses recoverable under the Loan Documents.
Prior to the Petition Date, the Excavator Collateral was
repossessed by CCG and in a storage facility. The Debtor believes
the Excavator Collateral is not necessary for its reorganization
efforts and agrees to release its right, title and interest in the
Excavator Collateral. The Debtor further consents to relief from
the automatic stay with respect to the Excavator Collateral to
enable CCG to sell it.
On June 15, 2020 the Debtor, as borrower, and the U.S. Small
Business Administration as lender, entered into a Loan
Authorization and Agreement to obtain a $150,000 loan through the
SBA's Economic Injury Disaster Loan program. As of the Petition
Date, the Debtor owes approximately $150,000 to the SBA.
The Debtor also owed $35,381.13 to the Internal Revenue Service for
unpaid taxes. The IRS asserts a security interest and lien in the
amount of $34,912.53 on all of the Debtor's assets arising from the
IRS Indebtedness.
The Debtor is authorized to use the Cash Collateral to pay
post-petition expenses incurred in the ordinary course of its
business activities.
In exchange for the Debtor's use of Cash Collateral, and as
adequate protection, CCG is granted a senior post petition lien and
security interest and the SBA and the IRS are granted a junior
post-petition liens and security interests in all assets of the
Debtor, wherever located, effective nunc pro tunc as of the
Petition Date.
The liens are deemed for all purposes to have been properly
perfected, without filing, as of the Petition Date.
As additional adequate protection for the Debtor's use of Cash
Collateral, CCG is granted a superpriority administrative claim, to
the extent of any post-Petition Date diminution in value of its
Collateral arising from the Debtor's use of the Cash Collateral or
the automatic stay, and the SBA and IRS are granted a superpriority
administrative claim, to the extent of any post-Petition Date
diminution in value of its Collateral arising from the Debtor's use
of the Cash Collateral or the automatic stay. The CCG Superpriority
Administrative Claim are senior in all respects to the SBA
Superpriority Administrative Claim and IRS Superiority
Administrative Claim.
These constitute Events of Default:
-- The failure by the Debtor to perform, in any respect, any
of the terms, provisions, conditions, covenants, or obligations
under this Fourth Interim Order, the CCG Loan Documents or the SBA
Loan Agreement;
-- The entry of any order by the Court granting relief from or
modifying the automatic stay of Bankruptcy Code section 362(a);
-- Dismissal of the chapter 11 case or conversion of the
chapter 11 case to a chapter 7 case, or appointment of a chapter 11
trustee or examiner with expanded powers or other responsible
person; and
-- Except as may be authorized by Final Court Order, the
Debtor granting, creating, incurring or suffering to exist any
post-petition liens, security interests or super-priority claims
which are senior to or pari passu with those granted pursuant to
the Fourth Interim Order.
The Postpetition Liens and the Superpriority Claims are subordinate
solely to all fees required to be paid to the Clerk of the
Bankruptcy Court and the Office of the United States Trustee
pursuant to 28 U.S.C. section 1930(a) and 31 U.S.C. Section 3717,
and an additional amount (in addition to amounts set forth in the
prior Interim Order) of $15,000 for the Subchapter V Trustee. The
Carve Out will be payable solely from the Debtor's Cash Collateral
and not the proceeds of the Debtor's Excavator Collateral. Nothing
will obligate CCG, the SBA or the IRS to pay the Carve Out
amounts.
A copy of the order is available for free at https://bit.ly/2SUsJLY
from PacerMonitor.com.
About Pinnacle Demolition and
Environmental Services Corp.
Pinnacle Demolition and Environmental Services Corp. filed its a
voluntary petition under Chapter 11 (Bankr. E.D.N.Y. Case No.
20-43057) on Aug. 24, 2020. At the time of filing, the Debtor
estimated $100,001 to $500,000 in assets and $1,000,001 to
$10,000,000 in liabilities.
Judge Elizabeth S. Stong oversees the case.
Joseph A. Fazio, Esq., serves as the Debtor's legal counsel.
PRECISION DRILLING: Moody's Rates New Senior Unsecured Notes 'B3'
-----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Precision
Drilling Corporation's proposed senior unsecured notes. The
proceeds and revolver drawings will be used to redeem the US$286
million notes due 2023 and the US$263 million notes due 2024.
Assignments:
Issuer: Precision Drilling Corporation
Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5)
Other rating actions:
Issuer: Precision Drilling Corporation
Senior Unsecured Regular Bond/Debenture, Unchanged at B3 (LGD5)
from (LGD4)
RATINGS RATIONALE
Precision's B2 CFR credit profile benefits from: 1) good liquidity
that is supported by positive free cash flow in Moody's forward
view which Moody's expect will be allocated to debt reduction; 2)
broad North American diversification and presence in Middle East
markets; and 3) good market position with high quality rig fleet.
Precision is challenged by: 1) declining EBITDA in 2021 driven by
its significant exposure to the volatile North American land
drilling market where upstream capital spending from E&Ps will
remain constrained compared to historic levels; and 2) low rig
utilization compared to historical levels and some downward
pressure on day rates in 2021.
Precision's senior unsecured notes are rated B3, one notch below
the B2 CFR, reflecting the priority ranking of the US$500 million
revolving credit facility in the capital structure.
Precision's liquidity is good (SGL-2). At March 31, 2021 and pro
forma for the June 2021 notes Precision will have C$62 million of
cash on its balance sheet and the equivalent of about C$410 million
(US$340 million) available under its US$500 million secured
revolving credit facility due November 2023. Moody's expect
Precision to generate positive free cash flow of around C$100
million through mid-2022, which Moody's expect will be used to
reduce revolver drawings. Moody's expect Precision will remain in
compliance with its financial covenants through this period.
Alternative sources of liquidity are limited principally to the
sale of Precision's existing drilling rigs and well service rigs,
which are largely encumbered.
The negative outlook reflects Precision's decreasing EBITDA in 2021
and its vulnerability to an extended industry downturn.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if debt to EBITDA is sustained below
5x (5.4x LTM Mar31-2021) 2020), EBITDA to Interest sustained above
3x (2.4x LTM Mar31-2021) and if there are stable or improving
industry conditions while maintaining good liquidity and low
refinancing risk.
The ratings could be downgraded if debt to EBITDA is sustained
above 6x (5.4x LTM Mar31-2021), EBITDA to Interest sustained below
2x (2.4x LTM Mar31-2021), or if the company were to generate
sequential negative free cash flow.
The principal methodology used in this rating was Global Oilfield
Services Industry Rating Methodology published in May 2017.
Precision Drilling Corporation is a Calgary, Alberta-based onshore
driller that also provides well completion and production services
to exploration and production companies in major hydrocarbon basins
across North America and the Middle East.
PRESTIGE BRANDS: S&P Assigns 'BB' Rating on Sr. Secured Term Loan
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating and '1'
recovery rating to Prestige Brands Inc.'s proposed $600 million
senior secured term loan B due in 2028. The '1' recovery rating
indicates its expectation for very high (90%-100%; rounded
estimate: 95%) recovery in the event of a payment default.
The company will use the net proceeds, along with cash and
borrowings from its asset-based lending (ABL) revolver, to
refinance its existing term loan and fund its $230 million
acquisition of the over-the-counter (OTC) consumer health brands of
Akorn Operating Co. LLC. S&P said, "All our existing ratings on
Prestige, including our 'B+' issuer credit rating and positive
outlook, are unchanged. We estimate total debt outstanding at
transaction close will be about $1.7 billion."
Akorn's OTC portfolio includes its dry-eye relief brand TheraTears,
which will strengthen Prestige's position in the eye care category.
S&P said, "While the transaction will be moderately leveraging (we
estimate pro forma leverage will increase to about 4.7x from about
4.3x as of March 31, 2021), our positive outlook continues to
reflect the company's generally more conservative financial
policies in recent years and potential for a higher rating if it
sustains leverage below 5x. We expect Prestige will resume
prioritizing debt reduction ahead of shareholder returns, which
should accelerate deleveraging back to the low- to mid-4x area over
the next year."
ISSUE RATINGS - RECOVERY ANALYSIS
Key analytical factors
The company's debt capital structure will consist of the
following:
-- $175 million ABL revolving credit facility expiring in December
2024 (unrated).
-- Proposed $600 million secured term loan B maturing in 2028.
-- $400 million of senior unsecured notes maturing in January
2028.
-- $600 million of senior unsecured notes maturing in April 2031.
Prestige Brands Inc. is the borrower under the ABL, term loan B,
and senior unsecured notes. S&P views the ABL as a priority
obligation given that the facility has a first-priority lien on the
group's most liquid assets, specifically most of its accounts
receivable and inventory.
The term loan B facility is unconditionally guaranteed by parent
Prestige Brands Holdings Inc. and the borrower's restricted
subsidiaries. The facility is secured by a first lien on
substantially all the assets of the borrower and its guarantors
except for the assets securing the ABL; term loan B lenders have a
junior lien on ABL collateral. Term loan B lenders also have a
perfected first-priority pledge of all the capital stock of
Prestige's wholly owned restricted subsidiaries and 65% of the
capital stock of certain foreign restricted subsidiaries.
The senior notes are guaranteed on a senior unsecured basis by the
parent and the borrower's restricted subsidiaries.
Simulated default assumptions
S&P's simulated default scenario contemplates a default in 2024 due
to a decline in Prestige's cash flow because of retailer demands
for price reductions, a significant increase in competition, weak
consumer demand, and escalating input costs.
Calculation of EBITDA at emergence:
-- Debt service: $94.8 million (default year interest plus
amortization)
-- Maintenance capital expenditures: $10.2 million
-- Default EBITDA proxy: $105 million
-- Cyclicality adjustment: $0 (0% of default EBITDA proxy)
-- Preliminary emergence EBITDA: $105 million
-- Operational adjustment: $99.7 million (95%)
-- Emergence EBITDA: $204.7 million
S&P made the operational adjustment to bring the percentage of
emergence EBITDA decline in line with the typical discount for
peers with similar issuer credit ratings.
Simplified waterfall
-- Emergence EBITDA: $204.7 million
-- Multiple: 6.5x
-- Gross recovery value: $1.33 billion
-- Net recovery value for waterfall after administrative expenses
(5%): $1.26 billion
-- Obligor/nonobligor valuation split: 90%/10%
-- Priority debt claim (ABL): $106.1 million
-- First-lien secured debt claim: $604 million
-- Collateral value available to secured first-lien debt: $1.1
billion
--Recovery expectations for secured debt: 90%-100% (rounded
estimate: 95%)
-- Unsecured debt claims: $1.02 billion
-- Collateral value available to unsecured debt: $563.2 million
--Recovery expectations for unsecured debt: 50%-70% (rounded
estimate: 50%)
PROOFPOINT INC: S&P Assigns 'B-' ICR, Outlook Stable
----------------------------------------------------
S&P Global Ratings assigned its 'B-' issuer credit rating to
U.S.-based Proofpoint Inc., a provider of email security,
information protection, and compliance platforms, which will become
the audited entity.
S&P said, "At the same time, we assigned our 'B-' issue-level
rating and '3' recovery rating to the company's proposed $250
million senior secured revolving credit facility and $2.6 billion
first-lien term loan. The company will also issue a privately
placed $800 million second-lien term loan that we will not be
rating.
"The stable outlook reflects our expectation that Proofpoint will
generate annual revenue and EBITDA growth in the double-digit
percentages, driven by an increasing focus on security within
enterprises."
The rating reflects Proofpoint's highly recurring business,
subscription-based revenue model, as well as strong revenue growth
and EBITDA growth that is well ahead of the software industry
(Proofpoint's revenues grew at a compound annual growth rate (CAGR)
of 33% from 2012 to 2020). The ratings also reflect the company's
highly leveraged financial risk profile, and history of mergers and
acquisitions (M&A) that will preclude sustained deleveraging. While
S&P Global Ratings' adjusted last 12-months (LTM) EBITDA is about
$220 million, the company plans to continue delivering operating
improvements resulting in improved EBITDA margins over the next two
years. S&P also expects annual unadjusted free cash flow to be $120
million or better, which supports the 'B-' issuer credit rating
(ICR).
Proofpoint provides threat protection, information protection, and
compliance platforms and has more than 8,000 enterprise customers.
The company's business model is highly recurring with 98% recurring
revenue in 2020. The renewal rates for its products have been
consistently above 90% over the past few years. The company is
considered one of the leaders in the secure email gateway end
market, where it competes against products from Microsoft Corp.,
Cisco Systems Inc., and Symantec Corp. Email security is the
primary product sold by Proofpoint, but the company also sells
compliance, training products, and other security services.
Proofpoint is well diversified across end-markets as well as its
customer base, with no customer concentration. The company has
demonstrated its ability to land and expand its platform
solutions--with 70% of enterprise customer base buying three or
more products.
S&P said, "We expect Proofpoint's business to remain highly
recurring with strong customer retention rates and profitability to
improve under Thoma Bravo's ownership.
"The stable outlook reflects our expectation that Proofpoint will
generate annual revenue and EBITDA growth in the double-digit
percentages, driven by an increasing focus on security within
enterprises. Despite high leverage, we expect the business to
continue to be highly recurring and expect Proofpoint to generate
annual free cash flow of $120 million or better.
"Although unlikely given our expectations of positive free cash
flow, we would lower the rating if Proofpoint faces revenue and
EBITDA declines, resulting in free cash flow after debt service
approaching breakeven with no prospects for improvement, which
could lead us to view the capital structure as unsustainable.
"Although unlikely over the next 12 months, we will consider an
upgrade over the longer-term if Proofpoint is able to sustain its
revenue growth, while generating unadjusted annual free cash flow
of $200 million or better, funds from operations (FFO) cash
interest coverage around 3x, or leverage in the mid-7x area. We
would need to believe the company could sustain its deleveraged
capital structure while pursuing its acquisition and shareholder
return objectives."
RENOVATE AMERICA: Sortis Buys Leftover Benji Loan Assets for $120K
------------------------------------------------------------------
Renovate America, Inc., and Personal Energy Finance, Inc., filed
with the U.S. Bankruptcy Court for the District of Delaware a
notice of sale of their remaining assets in their Benji loan
portfolio to Sortis Financial, Inc., for $120,000.
The Objection Deadline is June 11, 2021, at 4:00 p.m. (ET).
On May 20, 2021, the Court entered the Sale Procedures Order,
whereby it authorized the Debtors to sell certain non-core assets
("De Minimis Assets").
Pursuant to the Sale Procedures Order, the Debtors propose to sell
the remaining assets in their Benji loan portfolio, consisting of
those Benji loans that did not qualify for, and were not included
in, the sale of Benji loans to Finance of America pursuant to the
Loan Purchase Agreement Between Debtor Personal Energy Finance,
Inc. and the Purchaser, which was approved by the Court's Order (A)
Approving the Loan Purchase Agreement Between Debtor Personal
Energy Finance, Inc. and the Purchaser, (B) Authorizing the Sale of
the Loans Free and Clear of Liens, Claims, Encumbrances, and
Interests, and (C) Granting Related Relief.
For each Sale Asset, Exhibit A: (i) identifies the De Minimis
Assets being sold; (ii) identifies the Debtor that directly owns
the De Minimis Assets; (iii) identifies the purchaser of the De
Minimis Assets; (iv) identifies holders known to the Debtors as
holding Liens on the De Minimis Assets; (v) specifies the purchase
price and the material economic terms and conditions of the sale;
and (vi) contains a certificate indicating that the Committee has
been consulted with respect to the proposed sale and identifying
the Committee's position regarding the proposed sale, if known. In
addition, Exhibit B is a copy of the proposed form of Assignment
and Conveyance evidencing the sale of the De Minimis Assets.
Pursuant to the Sale Procedures Order, any recipient of the notice
may object to the proposed transaction within 10 calendar days of
service of the notice. If there is an objection, the Debtors may
not sell the Sale Assets unless the objector and the Debtors
consensually resolve the objection or upon further Court order
approving the sale of such Sale Assets.
A copy of the Exhibits is available at https://tinyurl.com/y432uadt
from PacerMonitor.com free of charge.
About Renovate America
Renovate America is one of the nation’s preeminent providers
of
home improvement financing through its industry-leading home
financing product, Benji. The Company offers a proprietary
technology platform that helps Americans improve their homes while
giving contractors the tools they need to grow their business. In
addition to offering intuitive financing options, Renovate America
offers industry- leading education, training and mentoring to
contractor teams in the field. On the Web:
http://www.renovateamerica.com/
Renovate America, Inc. and two affiliates sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 20-13173) on Dec. 21,
2020.
Renovate America was estimated to have $50 million to $100 million
in assets and $100 million to $500 million in liabilities as of
the
bankruptcy filing.
Bryan Cave Leighton Paisner LLP is acting as the Company's legal
counsel. Stretto is the claims agent. Culhane Meadows, PLLC, is
the bankruptcy co-counsel. Armanino LLP is the financial advisor.
GlassRatner Advisory & Capital Group, LLC, is the restructuring
advisor. Stretto is the claims agent.
RF CAPITAL: DBRS Confirms Pfd-4(high) Cumulative Shares Rating
--------------------------------------------------------------
DBRS Limited confirmed the Cumulative Preferred Shares rating of RF
Capital Group Inc. at Pfd-4 (high) with a Stable trend. The
Company's Support Assessment is SA3. DBRS Morningstar assessed the
Cumulative Preferred Shares rating using the "Global Methodology
for Rating Investment Management Companies" (December 2020); it
previously was assessed under the "Global Methodology for Rating
Banks and Banking Organizations" (June 2020). DBRS Morningstar will
continue to use the "DBRS Morningstar Criteria: Preferred Share and
Hybrid Security Criteria for Corporate Issuers" (November 2020) in
future reviews.
With this review, DBRS Morningstar removed the rating from Under
Review with Developing Implications, where it was placed on June
18, 2019. While the of the Company's capital markets business was
completed on December 6, 2019, there was subsequently a lack of
clarity necessary to confirm the rating until now. Upon review of
audited financial statements for RF Capital, as well as a thorough
meeting with management, DBRS Morningstar has taken action to
confirm the rating at the current level.
KEY RATING CONSIDERATIONS
The rating confirmation reflects the solid wealth management
franchise of RF Capital, which is underpinned by its good
reputation that supports a long track record of growth in assets
under administration (AUA) and healthy earnings. A significant
portion of revenues are fee-based, supporting earnings consistency.
The ratings incorporate an expectation of continuing franchise
momentum while maintaining solid balance sheet fundamentals. DBRS
Morningstar sees operational risk as a critical risk for the
Company to manage, and expect that investments and upgrades to
various technology platforms to help service clients should provide
a longer-term benefit to RF Capital's operational capabilities. The
ratings consider that RF Capital could face challenges in executing
on its ambitious strategy for future growth. Furthermore, in order
to grow the business through advisor acquisition, RF Capital may
require an increase to leverage.
RATING DRIVERS
Continued franchise momentum, coupled with consistent earnings and
solid balance sheet fundamentals, would lead to a rating upgrade.
Conversely, DBRS Morningstar would downgrade the rating if RF
Capital's credit fundamentals significantly weaken, or if there
were a trajectory of AUA outflows, particularly if these outflows
were prompted by operational or reputational issues.
RATING RATIONALE
DBRS Morningstar placed the Company's rating Under Review with
Developing Implications following its announcement that it had
agreed to sell substantially all of its capital markets business to
Stifel Financial Corp. The sale transaction was completed on
December 6, 2019. Subsequently, DBRS Morningstar maintained the
Under Review with Developing Implications as the Company was still
in discussions with Richardson Financial Group Limited (RFGL) to
consolidate full ownership of Richardson GMP Limited (later named
Richardson Wealth).
On October 20, 2020, GMP Capital Inc. (GMP) completed the
consolidation of its 100% ownership of Richardson Wealth. Under the
transaction, GMP acquired all the common shares of Richardson
Wealth that it previously didn't own for a purchase price of 1.76
common shares of GMP for each common share of Richardson Wealth. In
consideration, GMP issued 100,517,533 Common Shares to former
Richardson Wealth shareholders at closing, 10% of the Issuance
being freely tradeable shortly after closing and the remaining 90%
will be held in escrow to be released in equal amounts on the first
three anniversaries following closing. After completion and
following a substantial issuer bid, RFGL had the largest ownership
interest representing 43.7% of the consolidated entity. GMP
shareholders and the Richardson Wealth investment advisors and
management retained 25.5% and 30.8%, respectively. Furthermore, on
November 23, 2020, GMP formally changed its name to RF Capital.
RF Capital is one of Canada's leading independent wealth managers
with AUA of $33 billion. The Company operates through 19 offices
across the country with 160 advisor teams serving 31,000
high-net-worth clients. The wealth management industry in Canada is
dominated by the large banks with a suite of smaller independent
firms competing to gain market share. RF Capital has been
successful in acquiring market share over the years supported
through the reputation of its majority owners, the Richardson
family, who have a long proven track record in the business. As the
consolidation has been competed, RF Capital's management will
deploy an ambitious multi-year strategy aimed at growing the
Company's adjusted EBITDA to between $200 million to $300 million
and triple the Company's AUA to $100 billion by 2025. This will
done both organically through the addition of advisor teams and the
investment in technology to improve platforms and product
offerings, and inorganically through opportunistic acquisitions and
strategic partnerships.
The Company reported consolidated results for the first time in Q1
2021, which makes it difficult to compare with prior periods.
However, Richardson Wealth's historical results provide a good
indicator of the underlying wealth management business. The Company
benefits from solid revenue that has a steady proportion of fee
income. The adjusted EBITDA margin (which excludes transformation
and other one-time costs) stood at 17.5% for Q1 2021, in line with
other Canadian peers.
Following the sale of its capital markets business, RF Capital's on
balance sheet risk mainly lies with its carrying broker services,
which include trade execution, clearing, settlement, custody, and
other middle- and back-office services. These carrying broker
services are used internally, as well as by Stifel Nicolaus Canada
Inc., which is the Canadian capital markets business of Stifel.
This market risk is well managed has minimal impact on the
Company's financial position. However, RF Capital faces operational
risk as it implements various initiatives, including the
introduction of new technology platforms, to grow its business.
The Company is well funded and holds subordinated bank debt of $67
million in addition to a promissory note of $12 million related to
the acquisition of the former FirstEnergy business, which was part
of the former capital markets business. Both of these facilities
expire in the third quarter of 2021 and the Company is looking at
renewing and marginally increasing its financial leverage in order
to finance advisor team acquisition. The Company reported a fixed
charge coverage ratio (using adjusted EBITDA) of 10.3x in Q1 2021.
Furthermore, RF Capital holds appropriate working capital levels to
manage its day-to-day liquidity needs. The Company employs modest
leverage with a debt (including preferred shares) to adjusted
EBITDA of 2.0x in Q1 2021.
Notes: All figures are in Canadian dollars unless otherwise noted.
RICHARD MCGRATH: Bank Lender Wins Dismissal of Chapter 11 Case
--------------------------------------------------------------
At the behest of First National Bank of Pennsylvania, Bankruptcy
Judge Roberta A. Coltan dismissed the Chapter 11 case of Richard
Archibald McGrath and Jane McGrath, with leave to convert to a
Chapter 7 case. Judge Coltan held that the Debtors' proposed
amended bankruptcy-exit plan is unrealistic and there no reasonable
likelihood that it will be confirmed. The Court also noted that
the Bank's claims standing alone exceed the value of the Debtors'
commercial property. Further, given that the Debtors have no
rights in the revenue generated by the Commercial Property, they
have failed to show that they can provide adequate protection in
the absence of an equity cushion and that the Commercial Property
is necessary to an effective reorganization. The Court also
granted the Bank's request for relief from the automatic stay under
11 U.S.C. sections 362(d)(1) and 362(d)(2).
The Commercial Property is a warehouse leased to three commercial
tenants (on a triple net basis), generating gross revenue of
roughly $27,000 per month. Because the leases are triple net, the
tenants are obligated to make pro rata payments to the lessor for
common area maintenance and real property taxes as per the terms of
the respective leases.
The Court has held that the value of the Commercial Property as of
the bankruptcy filing date was $3.0 million.
The Bank filed three proofs of claim secured by the Commercial
Property totaling $3,228,122. Lancaster County filed a claim
secured by the Commercial Property for $156,703 for overdue taxes.
A copy of the Court's June 2, 2021 Findings of Facts and
Conclusions of Law is available at https://bit.ly/3z3ssa2 from
Leagle.com.
Richard Archibald McGrath and Jane McGrath filed a voluntary
Chapter 11 petition (Bankr. M.D. Fla. Case No. 20-3689) on Dec. 31,
2020. The Debtors have elected to proceed under Subchapter V of
Chapter 11 of the Bankruptcy Code.
SHERRY V. SEITZINGER: $1.275M Sale of Fremont Property to Park OK'd
-------------------------------------------------------------------
Judge Stephen L. Johnson of the U.S. Bankruptcy Court for the
Northern District of Georgia authorized Sherry Virginia
Seitzinger's sale of the real property located at 2722 Bayview
Drive, in Fremont, California, to David Park for $1.275 million, in
accordance with the terms and conditions that are set forth in the
Purchase Agreement.
A hearing on the Motion was held on May 25, 2021, at 1:30 p.m.
The Debtor will pay from escrow the following liens or claims at
closing of the sale:
a. The consensual lien of Bank of the West;
b. The judgment lien of Fremont Tech Center Association, Inc.;
c. The judgment lien of Richard Ladden; and
d. The tax lien of the Alameda County Tax Collector.
Pursuant to Section 363(f) of the Bankruptcy Code, effective upon
closing, the sale of the Property will vest in the Buyer all right,
title and interest of the Debtor and the bankruptcy estate in the
Property, free and clear of liens, claims or interests.
The Debtor is authorized to pay from the proceeds of sale through
escrow a real estate commission of 2.5% of the purchase price to
the Buyer's broker/agent David Yang of Legacy Real Estate &
Associates.
The Debtor, and any escrow agent upon her written instruction, will
be authorized to make such disbursements on or after the closing of
the sale as are required by the purchase agreement or order of the
Court, including, but not limited to, (a) all delinquent real
property taxes and outstanding post-petition real property taxes
pro-rated as of the closing with respect to the Property; and (b)
closing costs as included in the Estimated Seller's Settlement
Statement attached to the Motion.
The Debtor will transfer all remaining net proceeds to her DIP
account.
The Order will be effective immediately upon entry. No automatic
stay of execution, pursuant to Rule 62(a) of the Federal Rules of
Civil Procedure, or Bankruptcy Rule 6004(h), applies with respect
to the Order.
Sherry Virginia Seitzinger sought Chapter 11 protection (Bankr.
N.D. Ga. Case No. 20-51623) on Nov. 12, 2020.
SHILO INN IDAHO: Seeks August 29 Plan Exclusivity Extension
-----------------------------------------------------------
Debtor Shilo Inn, Idaho Falls, LLC requests the U.S. Bankruptcy
Court for the Western District of Washington, Tacoma Division to
extend the exclusive periods during which the Debtor may file a
plan from May 31, 2021, to August 29, 2021, and to solicit
acceptances of its plan from July 30, 2021, to October 28, 2021.
This is the Debtor's second request for exclusivity periods
extension.
The Debtor's primary asset is a hotel, which is collateral for a
certain promissory note (the "Loan"), which was originally made in
November 2015 and now held by RSS CGCMT 2017P7-ID SIIF, LLC (the
"Lender") and serviced by Rialto Capital Advisors, LLC.
Since the Petition Date, the Debtor has:
(i) timely filed its bankruptcy schedules;
(ii) statement of financial affairs;
(iii) chapter 11 status report, all of its required small business
debtor filing documents;
(iv) attended and concluded the § 341(a) meeting of creditors;
(v) filed all papers required for reporting to the United States
Trustee; and
(iv) filed all of its monthly operating reports.
Additionally, the Debtor filed all motions required to obtain the
use of cash collateral and operate its business as a debtor in
possession within the first days of the case.
On January 12, 2021, Lender filed its motion for relief from stay,
the Debtor filed its objection, and the contested matter was
originally set for an evidentiary hearing on April 15 and 16, 2021.
But has taken off of the calendar and is being rescheduled to a
date on or after August 16, 2021, pending the availability of the
Court and the Court's scheduling. The central issue for the
evidentiary hearing is the value of the Debtor's Hotel.
The Debtor submits that there is good cause for the Court to extend
the deadline by 90 days as being in the best interest of efficient
and economical administration of the estate for the benefit of all
creditors. Any plan that the Debtor files at this time will likely
have to undergo substantial amendment or modification to address
the results of the evidentiary hearing on valuation. Lender's and
Debtor's positions on Lender's claim and the value of the Property
are so far apart that the valuation must be decided before any
party could propose a plan with a reasonable probability of
confirmation.
No party, the Debtor or otherwise, could propose a meaningful plan
under these circumstances. Thus, the Debtor's exclusivity period
should be extended to afford the Debtor a meaningful opportunity to
exercise that exclusive right after the conclusion of the
evidentiary hearing. The Debtor is current on all material
reporting requirements under the Bankruptcy Code, Bankruptcy Rules,
and Guidelines of the United States Trustee.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3fD8R96 from PacerMonitor.com.
About Shilo Inn, Idaho Falls, LLC
Shilo Inn, Idaho Falls, LLC filed a Chapter 11 petition (Bankr.
W.D. Wash. Case No. 20-42489) on November 2, 2020. At the time of
filing, the Debtor disclosed up to $50 million in assets and up to
$10 million in liabilities.
Judge Brian D. Lynch oversees the case.
Levene, Neale, Bender, Yoo & Brill LLP, and Stoel Rives LLP serve
as the Debtor's bankruptcy counsel and local counsel, respectively.
Business Debt Solutions, Inc. is the Debtor's financial advisor.
RSS CGCMT 2017P7-ID SIIF, LLC, as the lender, is represented by
Lane Powell PC.
SIGNAL PARENT: Moody's Affirms B2 CFR & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service changed the outlook for Signal Parent,
Inc. (Interior Logic Group ("ILG")) to negative from stable.
Moody's also affirmed the company's B2 Corporate Family Rating,
B2-PD Probability of Default Rating, the B1 rating on ILG's first
lien term loan due 2028 including the proposed add-on, and the Caa1
rating on its $300 million senior unsecured notes due 2029.
The negative outlook reflects the increase in ILG's leverage
resulting from the acquisition of the RDS segment from Select
Interior Concepts, the potential integration challenges and the
need to achieve synergies and cost savings to improve operating
margin and other credit metrics. The transaction reflects an
aggressive financial policy in the company's willingness to
significantly increase leverage for a debt financed acquisition
when leverage is already very high. Moody's estimates pro forma
leverage for the $230 million of proposed first lien term loan
add-on to fund the acquisition to rise above 7.0x with an
improvement expected toward 6.5x by 2021 year end through synergy
realization. The rating affirmations reflect the favorable sector
conditions that will drive the company's revenue growth, margin
improvement opportunity through cost cutting, expectation of
positive free cash flow and good liquidity. The acquisition of RDS
increases ILG's revenue scale and complements its geographic
footprint. Lack of improvement in operating margin and lack of
reduction in leverage below 6.0x would cause negative rating
pressure.
The following rating actions were taken:
Affirmations:
Issuer: Signal Parent, Inc.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured 1st Lien Bank Credit Facility, Affirmed B1 (LGD3)
Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 (LGD5)
Outlook Actions:
Issuer: Signal Parent, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
ILG's B2 Corporate Family Rating is supported by the following key
factors: 1) meaningful size and scale, with pro forma revenue of
$2.0 billion and a national footprint; 2) a strong competitive
position in a fragmented market of installation and design studio
services and long-term customer relationships with homebuilders; 3)
the ability to execute an aggressive roll up strategy without
integration issues; 4) positive free cash flow and good liquidity;
5) Moody's expectation of favorable conditions in the homebuilding
market over the next 12 to 18 months that will drive improved
results.
At the same time, the credit profile is constrained by: 1) the
company's high debt to EBITDA pro forma for the RDS acquisition; 2)
a roll up acquisition strategy that raises the likelihood of
execution and integration risks and increasing debt leverage; 3)
the volatility and cyclicality inherent to the residential end
markets served; 4) exposure to customer pricing pressures, changes
in input costs and the mix of products and services, which can
impact operating margins; and 5) risks related to private equity
ownership, including a financial policy that resulted in a
significant leveraging of the balance sheet in a buyout transaction
and potential shareholder friendly actions.
Moody's expects ILG to maintain good liquidity over the next 12 to
15 months, supported by positive free cash flow, the flexibility
under its springing fixed charge coverage covenant, and access to a
$100 million ABL revolving credit facility expiring in 2026,
however the facility is relatively small representing only about 5%
of revenue.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company continues to improve
operating margin, reduces debt to EBITDA sustainably below 5.0x,
maintains conservative financial policies with respect to leverage,
shareholder friendly actions and acquisitions, and maintains good
liquidity and strong free cash flow.
The ratings could be downgraded if the company's debt to EBITDA
does not decline below 6.0x, liquidity weakens, free cash flow
turns negative, or market conditions deteriorate resulting in
revenue and operating margin declines.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
Headquartered in Irvine, CA, Interior Logic Group is one of the
nation's leading providers of design center management and interior
installation services, operating through 110 design studios (64 of
which are homebuilder branded), 109 warehousing and logistics
centers, and nine countertop fabrication facilities across the
United States. The company's customers include single-family
homebuilders (approximately 82% of revenue), multifamily, and
commercial builders as well as multifamily property owners and big
box retailers. Primary products that the company sources include
flooring, cabinets, countertops, and window treatments. The
Blackstone Group is the company's financial sponsor. In the LTM
period ended March 31, 2021, ILG generated approximately $1.6
billion in revenue.
SIGNAL PARENT: S&P Affirms 'B' Rating on Term Loan Due 2028
-----------------------------------------------------------
S&P Global Ratings affirmed its 'B' issue-level rating on the term
loan due 2028 issued by Calif.-based interior finishings design and
installation services provider Signal Parent Inc. (doing business
as Interior Logic Group Holdings LLC [ILG]). The company is
upsizing the $550 million term loan by $230 million and applying
the proceeds toward the acquisition of Residential Design Services
(RDS), a complementary provider of interior installation services
for residential and commercial builders. At the same time, S&P
affirmed its 'CCC+' issue-level rating on ILG's senior unsecured
notes.
S&P saiod, "Our 'B' issuer credit rating and stable outlook on ILG
is unchanged. We are forecasting that this financing for the RDS
acquisition, on the heels of the Blackstone leveraged buyout three
months ago, will result in adjusted debt leverage peaking just
above 6x at closing. However, despite the increase in leverage, the
integration of RDS should improve ILG's scale and national network,
and strengthen its existing relationships with its homebuilder
customers and key suppliers. ILG's record backlog and execution of
various cost-saving initiatives should result in steady EBITDA
growth, bringing credit measures back in line with our long-term
expectations by the end of 2022. The stable outlook reflects our
expectation that, over the long term, adjusted debt leverage will
be near the midpoint of the 5x-6x range, with free operating cash
flow to debt above 5%."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- ILG is upsizing its $550 million senior secured term loan due
2028 by $230 million.
-- The company's capital structure also includes $300 million in
senior unsecured notes due 2029 and a $100 million asset-based
lending (ABL) facility due 2026 (unrated).
-- Signal Parent Inc. is the borrower of the debt.
-- The debt is guaranteed by the company's wholly owned domestic
restricted subsidiaries. In S&P's analysis, it assumes guarantor
entities account for substantially all of our emergence enterprise
value.
-- Obligations under the ABL revolver benefit from a
first-priority basis by liens on working capital assets and
proceeds of the borrower and guarantors, among other things.
Accordingly, in our recovery analysis, we assume ABL revolver
lenders benefit from a priority ranking in our recovery waterfall.
-- S&P's simulated default scenario contemplates a default
occurring in 2024 stemming from a downturn in ILG's end markets
(namely the U.S. single-family and multifamily residential
construction and commercial construction markets), as well as
heightened competition.
-- S&P's assessment of ILG's recovery prospects contemplates a
reorganization value of about $525 million, which reflects
emergence EBITDA of about $105 million and a 5x multiple.
-- The 5x multiple is similar to the multiples S&P uses for
companies that provide services (such as installation) for
homebuilders.
Simulated default assumptions
-- Simulated year of default: 2024
-- EBITDA multiple: 5x
-- Emergence EBITDA: about $105 million
-- Gross enterprise value: $525 million
-- Jurisdiction: U.S.
Simplified waterfall
-- Net enterprise value (gross enterprise value, $525 million;
less restructuring administrative expenses of about $26 million):
$499 million
-- Priority claims (ABL revolving credit facility): $59 million
-- Remaining value: $440 million
-- Senior secured claims (term loan B): $779 million
--Recovery expectations: 50%-70% (rounded estimate: 55%)
-- Remaining value: None
-- Senior unsecured note claims (second-lien notes): $309 million
--Recovery expectations: 0%-10% (rounded estimate: 0%)
SIX FLAGS: Moody's Affirms B2 CFR & Alters Outlook to Stable
------------------------------------------------------------
Moody's Investors Service affirmed Six Flags Entertainment
Corporation's B2 Corporate Family Rating, B3 Senior Unsecured
Notes, and Ba2 Senior Secured rating issued by subsidiary, Six
Flags Theme Parks Inc. The outlooks were changed to stable from
negative.
The stable outlook reflects Moody's expectation for a significant
improvement in Six Flags' performance in 2021 and 2022 and adequate
liquidity position to manage through the remainder of the pandemic.
While EBITDA is currently negative as of LTM Q1 2021, results and
leverage are projected to improve significantly on a year over year
basis as trough quarters from 2020 roll off, health restrictions
ease, and attendance figures rise.
As of April 4, 2021, total liquidity for Six Flags was $524 million
consisting of $63 million in cash on the balance sheet and revolver
availability of $461 million ($20 million of L/Cs outstanding).
Moody's expects that Six Flags will be modestly free cash flow
(FCF) positive during the remainder of 2021. Six Flags' Speculative
Grade Liquidity (SGL) rating is unchanged at SGL-3.
Affirmations:
Issuer: Six Flags Entertainment Corporation
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Gtd Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5)
Issuer: Six Flags Theme Parks Inc.
Gtd Senior Secured Bank Credit Facility, Affirmed Ba2 (LGD2)
Gtd Senior Secured Regular Bond/Debenture, Affirmed Ba2 (LGD2)
Outlook Actions:
Issuer: Six Flags Entertainment Corporation
Outlook, Changed To Stable From Negative
Issuer: Six Flags Theme Parks Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
The B2 CFR reflects the severe impact of the coronavirus pandemic
on Six Flags' ability to operate its parks, which led to negative
LTM EBITDA as of Q1 2021 and higher debt levels. Moody's projects
revenue and EBITDA will improve over the remainder of 2021 as
health restrictions ease and allow for higher capacity at its
parks, with performance expected to return close to pre-pandemic
levels in 2022. Debt levels have increased to support liquidity
through the pandemic, though Moody's expect Six Flags will be
focused on debt reduction going forward. Six Flags competes for
discretionary consumer spending from an increasingly wide variety
of other leisure and entertainment activities as well as cyclical
discretionary consumer spending.
Six Flags benefits from its typically sizable attendance (32.8
million in 2019) and revenue generated from a geographically
diversified regional amusement park portfolio. EBITDA margins and
operating cash flows historically have been strong, and Moody's
expects performance will recover by 2022 or 2023 at the latest. The
parks have high barriers to entry which Moody's expects will
support a recovery to pre-pandemic levels. Six Flags' large
portfolio of regional amusement parks in the US, Canada, and Mexico
are less likely to be impacted by lower travel activity and reduce
the possibility that performance could be impacted by restrictive
health requirements at any one park. Six Flags owns the land under
the vast majority of its parks which is a material positive.
Significant expenditures on new rides and attractions prior to the
pandemic are also expected to support performance and lessen the
need for capital expenditures in the near future.
Moody's analysis has considered the effect on the performance of
leisure and entertainment spending 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.
A governance impact that Moody's considers in Six Flags' credit
profile is the change in the financial policy. Six Flags previously
pursued an aggressive financial policy that led to substantial
dividend payments with cash and debt funded stock buybacks, but
Moody's expects the company will operate with a more moderate
financial policy with the goal to reduce leverage going forward.
Six Flags is a publicly traded company listed on the New York Stock
Exchange.
The stable outlook reflects Moody's expectation that results will
improve significantly as Six Flags approaches its peak summer
operating season and benefits from reduced capacity and health
restrictions. Even with the projected recovery, a lingering
pandemic poses some uncertainty over the pace of recovery and
performance in 2021. Moody's projects free cash flow will be
modestly positive in 2021 and Six Flags will have sufficient
liquidity to operate through the remainder of the pandemic. While
leverage will remain at high levels through the rest of the year,
leverage is projected to decline toward the low 6x range by the end
of 2022 driven by a recovery in profitability close to historical
levels and debt repayment.
Six Flags' speculative grade liquidity (SGL) rating of SGL-3
reflects cash on the balance sheet of $63 million and access to an
undrawn $481 million revolving credit facility ($20 million of
L/Cs) as of Q1 2021. Moody's expects free cash flow, which was
negative -$324 million as of LTM Q1 2021, to be modestly positive
in 2021 as attendance levels increase. Six Flags suspended
dividends to shareholders in 2020 and reduced capex ($71 million as
of LTM Q1 2021) to support liquidity during the pandemic, but
Moody's expects capex to increase to the $90 million range in 2021
with additional increases in 2022.
Six Flags is subject to a maximum senior secured leverage ratio of
4.25x, but the company completed an amendment in Q3 2020 that
extends the suspension of the testing of the senior secured
leverage financial maintenance covenant through the end of 2021.
Starting with the first quarter of 2022, through the third quarter
of 2022, Six Flags can calculate the net leverage covenant using
Adjusted EBITDA from the second, third and fourth quarters of 2019.
Six Flags will also be subject to a minimum liquidity covenant of
$150 million through the end of 2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Six Flags' ratings could be upgraded if Moody's expects leverage to
be maintained below 5x with a free cash flow to debt ratio of about
5% percent. A good liquidity position with a sufficient cushion of
compliance with financial covenants would also be required in
addition to confidence that the company would maintain a financial
policy consistent with a higher rating level.
The ratings could be downgraded if Moody's expects leverage to be
sustained above 6.5x or the EBITDA to interest ratio remains below
2x. Elevated concern that Six Flags may not be able to obtain an
amendment to its covenants if needed, may also lead to negative
rating pressure.
Six Flags Entertainment Corporation (Six Flags), headquartered in
Arlington, TX, is a regional amusement park company that currently
operates 27 North American theme and waterparks. The park portfolio
includes 24 wholly-owned facilities (including parks near New York
City, Chicago and Los Angeles) - as well as three consolidated
partnership parks - Six Flags over Texas (SFOT), Six Flags over
Georgia (SFOG), and White Water Atlanta. Six Flags currently owns
53.9% of SFOT and 31.4% of SFOG/White Water Atlanta. In addition,
the company has international licensing agreements in Saudi Arabia.
The company emerged from chapter 11 bankruptcy protection in April
2010. Revenue including full consolidation of the partnership parks
was approximately $336 million as of the LTM period ended Q1 2021.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
SOAS LLC: May Use Cash Collateral Thru June 9
---------------------------------------------
Judge Marc Barreca authorized Soas, LLC to use cash collateral on
an interim basis through June 9, 2021, pursuant to the same terms
and conditions set forth in an Agreed Order authorizing interim use
of cash collateral through June 3.
Live Oak Bank Company claims a security interest in the Debtor's
assets, including but not limited to, a security interest in the
Debtor's accounts, inventory and cash, and in the profits and
proceeds of the foregoing. Live Oak agrees to the use of cash
collateral.
A copy of the order is available for free at https://bit.ly/3g74SAk
from PacerMonitor.com.
About Soas, LLC
Soas, LLC, which conducts business under the name Island Drug, is a
long-term care pharmacy in Oak Harbor, Wash. It dispenses
medicinal preparations delivered to patients residing within an
intermediate or skilled nursing facility, including intermediate
care facilities for mentally retarded, hospice, assisted living
facilities, group homes, and other forms of congregate living
arrangements.
Soas LLC sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. W.D. Wash. Case No. 19-10928) on March 18, 2019. At the
time of filing, the Debtor estimated assets and liabilities of
between $1 million and $10 million.
The case is assigned to Judge Marc Barreca.
The Tracy Law Group PLLC is the Debtor's legal counsel. No
official committee of unsecured creditors has been appointed in the
case.
Counsel for the Debtor may be reached at:
The Tracy Law Group PLLC
1601 5th Ave, Suite 610
Seattle, WA 98101
Tel: 206-624-9894
Fax: 206-624-8598
Website: www.thetracylawgroup.com
SOUTHWESTERN ENERGY: S&P Places 'BB-' ICR on CreditWatch Positive
-----------------------------------------------------------------
S&P Global Ratings placed its 'BB-' issuer credit rating on
U.S.-based oil and gas exploration and production company
Southwestern Energy Co. and its 'BB- rating on its senior unsecured
notes on CreditWatch with positive implications to reflect its
expectation that it could raise the ratings by up to two notches at
the close of the acquisition, assuming no material changes to S&P's
current assumptions.
S&P Global Ratings placed its ratings on independent exploration
and production company Southwestern Energy Co., including the 'BB-'
issuer credit rating, on CreditWatch with positive implications.
This followed Southwestern's announcement that it plans to acquire
Haynesville natural gas producer Indigo Natural Resources for
approximately $2.7 billion in cash, Southwestern stock, and the
assumption of Indigo's $700 million unsecured notes.
S&P could raise the ratings by up to two notches if the acquisition
closes as expected. The Indigo acquisition increases Southwestern's
geographic diversity by providing another core natural gas play in
the Haynesville, boosting pro forma reserves to 15 trillion cubic
feet as of year-end 2020 and production to approximately 4.1
billion cubic feet equivalent per day. In addition, Indigo's cost
structure and pricing in the Gulf Coast market are expected to
increase the company's E&P margin by 15 cents to $1.30/Mcfe,
supporting improved profitability. The acquisition also decreases
Southwestern's exposure to in-basin pricing in Appalachia, which
can be affected by significant pricing differentials that have been
typical to Appalachian region in the past. It also provides for
diversity with multiple sales locations in Greater Appalachia and
the Gulf Coast with exposure to supplying growing liquified natural
gas demand.
Southwestern should maintain financial policies that support
continued free cash flow generation and debt reduction.The company
has stated that it expects $1.2 billion in free cash flow through
2023. S&P said, "We expect Southwestern to use this for absolute
debt reduction, including paying off the remaining $207 million of
unsecured notes due 2022. In addition, this transaction is
deleveraging, lowering net debt to EBITDA by about 0.4x. We expect
funds from operations to debt of about 40% and debt to EBITDA of
approximately 2x-2.5x at year-end 2021. We expect Southwestern to
remain focused on improving its balance sheet as it targets 2.0x or
less debt to EBITDA."
S&P expects to resolve the CreditWatch listing around the close of
the transaction, which is expected in the fourth quarter of 2021.
SUN PROPERTY: Court Slaps $26,000 Sanction on Merchant
------------------------------------------------------
At the behest of Difficile Realty Corp., Bankruptcy Judge Louis A.
Scarcella (i) holds Merchant Acquisitions Inc. in civil contempt
for its failure to comply with the Court's order dated August 24,
2020; and (ii) orders Merchant to pay to Difficile $4,027.50, the
amount of attorneys' fees requested by Difficile.
Judge Scarcella said he'll issue a separate judgment in favor of
Difficile in the amount of $26,136.74 consisting of the fees and
expenses granted under the August 24 Order in the amount of
$22,109.24 plus the $4,027.50 awarded for attorneys' fees.
Difficile is the designee of REMM Consultants, Inc., which acquired
Sun Property Consultants, Inc.'s shopping center in Bethpage, New
York, in a bankruptcy auction.
Merchant sued Difficile on November 12, 2019, by filing a complaint
in the Supreme Court of the State of New York, County of Nassau,
Index No. 615796/2019, alleging Difficile converted personal
property at the premises in which Merchant claimed to have a
properly perfected security interest. The complaint asserted two
causes of action for conversion. The first cause of action sought
money damages in the amount of $5,197,000 and the second cause of
action sought money damages in the amount of $525,000.
On December 26, 2019, Merchant filed an Amended Complaint, which
added a third cause of action claiming it is entitled to file a
notice of pendency on the Premises. The third cause of action
sought money damages in the amount of $5,197,000. On December 27,
2019, plaintiff filed a notice of pendency on the Premises.
Merchant's action was removed to the United States District Court
for the Eastern District of New York by Difficile on January 28,
2020, and the District Court referred the action to the Bankruptcy
Court in Sun Property's case pursuant to 28 U.S.C. section 157(a)
by Order dated March 31, 2020.
On May 20, 2020, Difficile filed a motion for entry of an order
canceling the notice of pendency and awarding costs and expenses
incurred by it as the result of the filing of the notice of
pendency. The Court entered the August 24 Order and awarded
Difficile attorneys' fees in the sum of $21,906.50 and
reimbursement of expenses of $202.74 occasioned by the filing and
cancellation of the notice of pendency. The August 24 Order
directed Merchant to pay Difficile, care of its attorneys Ruskin
Moscou Faltischek, P.C., the total amount of $22,109.24 within 14
days of entry of the order, i.e., September 7, 2020. Merchant did
not make any payment to Difficile in accordance with the August 24
Order.
At a status conference on December 3, 2020, no reason was given by
Merchant as to why it failed to obey the August 24 Order and make
payment to Difficile. Nor did Merchant claim that the Order was not
clear on its face or that it imposed a financial hardship.
The case is Merchant Acquisitions, Inc., Plaintiff, v. Difficile
Realty Corp. Defendant, Adv. Pro. No. 8-20-08057-las (Bankr.
E.D.N.Y.). A copy of the Court's June 2, 2021 Memorandum Decision
and Order is available at https://bit.ly/2SfwRWF from Leagle.com.
About Sun Property Consultants, Inc.
Sun Property Consultants, Ltd., sought protection under Chapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 16-72267) on May
23, 2016. Sun Property Consultants owned and operated a strip
shopping center located at 4019-4021 Hempstead Turnpike, Bethpage,
New York 11714 and 150-166 Hicksville Road, Bethpage, New York
11714.
The petition was signed by Rajesh K. Singh, authorized
representative. The Debtor is represented by Marc A. Pergament,
Esq., at Weinberg, Gross & Pergament LLP. The case is assigned to
Judge Louis A. Scarcella. At the time of the filing, the Debtor
estimated its assets at $10 million to $50 million and debt at $1
million to $10 million.
No creditors committee has been appointed in the case.
Yann Geron, Esq., was appointed Chapter 11 trustee. At the behest
of the Chapter 11 Trustee, the Debtor's Chapter 11 case was
converted to a case under Chapter 7 of the Bankruptcy Code on
October 3, 2018. Mr. Geron was appointed Chapter 7 trustee.
By Order dated Feb. 1, 2019, the Court approved the Chapter 7
trustee's sale of the shopping center to the back-up bidder at
auction, REMM Consultants, Inc. or its designee.
SUNLIGHT RIVER: Case Summary & 5 Unsecured Creditors
----------------------------------------------------
Debtor: Sunlight River Crossing, LLC
700 N. Page Springs Road
Cornville, AZ 86325
Chapter 11 Petition Date: June 4, 2021
Court: United States Bankruptcy Court
District of Arizona
Case No.: 21-04364
Judge: Hon. Brenda K. Martin
Debtor's Counsel: Thomas H. Allen, Esq.
ALLEN BARNES & JONES, PLC
1850 N. Central Avenue, Suite 1150
Phoenix, AZ 85004
Tel: 602-256-6000
Fax: 602-252-4712
E-mail: tallen@allenbarneslaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Harrison Elder, member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's five unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/JKZBQWQ/SUNLIGHT_RIVER_CROSSING_LLC__azbke-21-04364__0001.0.pdf?mcid=tGE4TAMA
SWITCH LTD: Moody's Assigns B1 Rating to New $500MM Unsecured Debt
------------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to Switch Ltd.'s
$500 million senior unsecured issue. The company plans to use most
of the proceeds to fund its acquisition of Data Foundry Inc.,
another data center company that owns and operates four data
centers in Austin and Houston, for $420 million. The company's
aggregate leverage metrics including net debt to EBITDA will
deteriorate post transaction, however increased market and tenant
diversity will offset some of the weakness.
RATINGS RATIONALE
The stable outlook reflects Moody's expectation that Switch will
continue to grow its revenue and EBITDA, while maintaining adequate
liquidity. That the cash flow deficits will be prudently funded and
dividend payout will remain modest are some other important
considerations in the stable outlook.
The rating drivers for Switch reflect the quality of the company's
large owned data center portfolio including assets associated with
the planned acquisition of Data Foundry.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade Switch's ratings following continued strong
bookings trends and steady revenue and EBITDA growth execution in
both new and existing markets. Other key considerations would be an
unencumbered asset ratio of at least 30% and higher EBITDA
margins.
The rating could be downgraded if liquidity deteriorates or if
leverage is sustained above 6.5x or if secured leverage exceeds 30%
both on a Moody's adjusted basis. Also, the ratings could face
pressure if the company pursues large leveraged acquisitions or
engages in shareholder friendly activity that pressures its credit
metrics or liquidity.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2018.
Switch, Ltd. provides colocation space and related services to
global enterprises, financial companies, government agencies and
others that conduct critical business on the internet. Switch also
licenses its intellectual property to data center equipment
manufacturers. The company operated 12 data centers across four
campuses as of March 31, 2021.
SWITCH LTD: S&P Affirms 'BB' ICR, Rates $430MM Unsec. Notes 'BB'
----------------------------------------------------------------
S&P Global Ratings affirmed the 'BB' issuer credit rating on Switch
Ltd. and assigned a 'BB' issue-level rating and '3' recovery rating
to the planned $430 million in unsecured notes.
Switch plans to acquire Texas-based Data Foundry for $420 million,
resulting in pro forma debt to EBITDA rising to about 4.9x from
3.6x, while improving Switch's geographic and customer diversity.
The acquisition of Data Foundry will expedite Switch's recent trend
of diversifying out of Las Vegas.We view the acquisition favorably
as entering the Texas market provides Switch with growth potential
and diversity. Data Foundry offers Switch expansion and
cross-selling opportunities with limited customer overlap. Switch
has a dominant share in Las Vegas, and while that provides it with
a significant competitive advantage, it has resulted in revenue
concentration. In 2017, when we first assigned ratings to Switch,
Las Vegas accounted for 94% of total revenue. Over the past few
years,
Switch has expanded into new markets, and through the acquisition
of Data Foundry, is expanding into its fifth market. Through its
profitable growth in Reno, Grand Rapids, and Atlanta, Switch
reduced its revenue concentration in Las Vegas to 84% in 2020, and
with the acquisition of Data Foundry, Las Vegas now accounts for
66% of pro forma 2020 revenue. However, we also recognize that
entering Texas comes with more competition (such as Digital Realty
and CyrusOne), and the facilities are not Tier IV (which we view as
a differentiating feature for Switch).
S&P said, "Switch's improved geographic diversity, combined with
favorable trends in the business, leads us to believe the company
could withstand higher leverage at the current 'BB' rating. We have
widened our upgrade and downgrade thresholds on Switch." The
company has distinguished itself among rated data center peers for
providing a unique, eco-friendly offering through its Tier V design
that results in lower power costs to its customers while
maintaining near 100% uptime. Switch's Power Usage Effectiveness
(PUE) score of 1.23 is nearly 20% better than all other rated data
center operators, which have PUE scores between 1.5 and 1.6.
Furthermore, by utilizing 100% green power, Switch's customers can
satisfy their own green initiatives, as data center power usage is
often one of a company's higher uses of energy. Additionally, the
company's telecommunications cooperative enables customers to save
significantly on their telecom services. Switch's scale allows it
to buy telecommunications services on a wholesale basis and resell
them to customers cheaper than if each customer went directly to
the telecom provider, enabling Switch to generate earnings as well.
Finally, long-term contracts (typically three to five years) and
interconnection revenue continue to drive below-industry-average
churn (Switch had 0.1% churn in the first quarter of 2021), and
utilization is around 91%, well above the industry average of
around 80%.
S&P said, "The stable outlook reflects our expectation that while
leverage will remain between 4x and 5x over the next few years,
FOCF will remain negative because of elevated capital spending to
support data center expansion.
"While unlikely over the next year, we could lower the rating if
operating performance weakens because of competitive pressures or
overexpansion of data center capacity, causing pricing pressure,
lower utilization, or elevated churn, resulting in margin
compression and a sustained increase in leverage above 5.5x.
"While unlikely given the company's financial policy of maintaining
leverage up to 5x, we could raise the rating if the company keeps
leverage below 4.5x with positive FOCF. Alternatively, we could
raise the rating over the longer term if the company successfully
increases its scale and improves geographic diversity while
managing churn and utilization near current levels."
TIMBER PHARMACEUTICALS: Adjourns Annual Meeting Until July 1
------------------------------------------------------------
Timber Pharmaceuticals, Inc. announced that on June 3, its 2021
Annual Meeting of Stockholders was convened without a quorum. As a
result, in order to provide stockholders additional time within
which to vote their eligible shares to establish a quorum, the
Annual Meeting was adjourned.
The adjourned meeting will be held at 1:00 p.m. ET on Thursday,
July 1, 2021 at the following url:
www.virtualshareholdermeeting.com/TMBR2021. The record date for
the Annual Meeting remains April 12, 2021.
About Timber Pharmaceuticals
Timber Pharmaceuticals, Inc. f/k/a BioPharmX Corporation --
http://www.timberpharma.com-- is a biopharmaceutical company
focused on the development and commercialization of treatments for
orphan dermatologic diseases. The Company's investigational
therapies have proven mechanisms-of-action backed by decades of
clinical experience and well-established CMC (chemistry,
manufacturing and control) and safety profiles. The Company is
initially focused on developing non-systemic treatments for rare
dermatologic diseases including congenital ichthyosis (CI), facial
angiofibromas (FAs) in tuberous sclerosis complex (TSC), and
localized scleroderma.
Timber reported a net loss of $15.12 million for the year ended
Dec. 31, 2020. For the period from Feb. 26, 2019, through Dec. 31,
2019, the Company reported a net loss of $3.04 million. As of
March 31, 2021, the Company had $9.77 million in total assets,
$2.07 million in total liabilities, $1.94 million in redeemable
series A convertible preferred stock, and $5.75 million in total
stockholders' equity.
Short Hills, New Jersey-based KPMG LLP, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
March 23, 2021, citing that the Company has suffered recurring
losses from operations that raise substantial doubt about its
ability to continue as a going concern.
TUMBLEWEED TINY HOUSE: Seeks to Use Cash Collateral Thru July 31
----------------------------------------------------------------
Tumbleweed Tiny House Company, Inc., asked the Bankruptcy Court to
authorize the use of cash collateral for the period from May 1
through July 31, 2021, pursuant to the terms of the stipulation
between the Debtor and Janine Sagert. Ms. Sagert asserts a
$150,000 claim against the Debtor as of the Petition Date.
Prior to the Petition Date, the Debtor received a $150,000 loan
from Ms. Sagert. Pursuant to the Loan Agreement, the Debtor is
required to make interest only payments of $1,000 to Ms. Sagert on
the last day of each month. The Debtor granted Ms. Sagert a
security interest in 75% of the Debtor's assets up to the first
$200,000, in addition to other things. Ms. Sagert filed a UCC
Financing Statement to perfect any security interests granted under
the Loan Agreement.
Pursuant to the stipulation:
* Ms. Sagert will be granted a replacement lien and security
interest on the Debtor's post-petition assets with the same
priority and validity as her pre-petition liens to the extent of
the Debtor's post-petition use of the proceeds of her pre-petition
collateral;
* To the extent the Adequate Protection Liens prove to be
insufficient, Ms. Sagert shall be granted superpriority
administrative expense claims under Section 507(b) of the
Bankruptcy Code; and
* The Debtor shall pay Sagert $1,000 monthly, by the last day of
each month beginning on May 28, 2021 through July 31, 2021, or as
set forth in a confirmed plan of reorganization.
A copy of the motion is available for free at
https://bit.ly/3xbAPyH from PacerMonitor.com.
About Tumbleweed Tiny House Company
Tumbleweed Tiny House Company, Inc., a manufacturer of tiny house
RVs, sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Colo. Case No. 20-11564) on March 4, 2020. At the time
of the filing, the Debtor estimated between $500,000 and $1 million
in assets and between $1 million and $10 million in liabilities.
Judge Kimberley H. Tyson oversees the case.
Wadsworth Garber Warner Conrardy, P.C., and Gerard Fox Law, P.C.,
serve as the Debtor's bankruptcy counsel and special counsel,
respectively. Stockman Kast Ryan + Company is the Debtor's
accountant.
TYNDALL PARKWAY: Seeks to Use Cash Collateral
---------------------------------------------
Tyndall Parkway Apartments, LLC asked the Bankruptcy Court to
authorize the use of cash collateral to fund its operating expenses
and the costs of administering its Chapter 11 case.
The Debtor's primary secured creditor is Lenox Mortgage XVIII, LLC,
which is owed approximately $21,200,000. Accordingly, Lenox may
assert that it has a lien on rent, accounts receivable, and other
income therefrom.
In exchange for the Debtor's ability to use Cash Collateral in the
operation of its business, the Debtor proposed to grant to Lenox,
as adequate protection, a replacement lien to the same extent,
validity, and priority as existed on the Petition Date. As
additional adequate protection, the Debtor proposed to make monthly
adequate protection payments to Lenox for $100,129 starting June 1,
2021.
A copy of the motion is available for free at
https://bit.ly/3fNwN9D from PacerMonitor.com.
About Tyndall Parkway Apartments
Tyndall Parkway Apartments, LLC owns and operates a 216-unit
residential apartment complex called Whispering Palm Apartments
located at 4141 E. 15th Street in Panama City, Florida. The Debtor
filed a Chapter 11 petition (Bankr. N.D. Fla. Case No. 21-50044) on
May 25, 2021.
On the Petition Date, the Debtor estimated between $10 million and
$50 million in both assets and liabilities. The petition was
signed by Edward E. Wilczewski, president of managing member, Bella
Group Inc.
STICHTER, RIEDEL, BLAIN & POSTLER, P.A. is the Debtor's counsel.
UA INVESTMENTS: Seeks to Use Cash, Pay Adequate Protection
----------------------------------------------------------
UA Investments LLC asked the Bankruptcy Court for authority to use
cash collateral and pay Palak Capital Investments, LLC $11,506 as
adequate protection for the month of June 2021, with subsequent
payments of $12,000 starting July 1.
The Debtor's business is the operation and management of a shopping
center, from which the Debtor derives rent income from tenants.
The Debtor's budget provided for total expenses equal to its gross
rents, at $12,100, resulting to a zero net profit for the month of
June 2021. The sixth-month budget through December 2021 provided
for total expenses at $97,600, which equal the gross rents for the
six-month period.
Palak Capital holds a promissory note and deed to secure a debt on
the Debtor's property. Palak Capital, alleging that its interest
in the property is not adequately protected, filed a motion for
relief from the automatic stay and a motion to dismiss the Debtor's
case.
The Debtor, accordingly, asked the Court to deny Palak Capital's
motion and to authorize the Debtor to use the cash collateral and
to make adequate protection payment to Palak Capital.
A copy of the motion is available for free at
https://bit.ly/3poFPNH from PacerMonitor.com.
Hearing on the motion is set for June 23, 2021 at 10 a.m.
About UA Investments LLC
UA Investments LLC, a Single Asset Real Estate debtor (as defined
in Section 101(51B) of the Bankruptcy Court), is the fee simple
owner of a shopping center located at 1600 & 1608 Shorter Avenue,
in Rome, Georgia, having a current value of $2.69 million. The
Debtor filed a Chapter 11 petition (Bankr. N.D. Ga. Case No.
21-53437) on May 1, 2021.
As of the Petition Date, the Debtor disclosed $2,694,762 in total
assets and $1,249,923 in total liabilities. Mohammad Gaffar,
member/manager, signed the petition.
ERIC E. THORSTENBERG, ATTORNEY AT LAW, LLC is the Debtor's counsel.
VITALITY HEALTH: Wants Plan Exclusivity Extended Until July 16
--------------------------------------------------------------
Debtor Vitality Health Plan of California, Inc. requests the U.S.
Bankruptcy Court for the Central District of California, Los
Angeles Division to extend the exclusive periods during which the
Debtors may file a plan through and including July 16, 2021, and to
solicit acceptances to such plan through and including September
16, 2021. This is the Debtor's second motion to extend the
Exclusive Periods.
The Debtor had prepared a draft plan of reorganization and was
finalizing the terms of its plan, which is intended to file this
first week of June 2021, until an unfortunate event occurred. A
critical member of the plan sponsor team sadly and suddenly
succumbed to COVID 19, precluding its ability to sponsor a plan at
this time.
Not being able to afford any further delay, and fortunately having
several parties still interested in acquiring the Debtor, the
Debtor is actively engaged in discussions with multiple parties for
the consummation of a transaction. As a result, the Debtor needs a
little more time to see if a deal can be reached and closed.
Meanwhile, the Debtor continues to communicate and foster its
relationships with its medical providers and other constituents.
The Debtor believes that it should be allowed to finalize its plan
of reorganization that will produce the most favorable recovery
available for the Debtor's creditors and preserve value in the
Debtor's business.
Given the progress made by the Debtor concerning a restructuring of
its financial affairs, granting to the Debtor the required
extensions of the Debtor's plan exclusivity periods will cause no
prejudice to the Debtor's creditors. No creditor or
party-in-interest has expressed to the Debtor or to the Debtor's
representatives any legitimate desire to propose a competing plan
in this case.
Currently, the Debtor's exclusivity periods to file and solicit
acceptances to a plan is June 4, 2021, and August 4, 2021,
respectively.
A copy of the Debtor's Motion to extend is available at
https://bit.ly/3vHqiuB from PacerMonitor.com.
About Vitality Health Plan of California
Vitality Health Plan of California, Inc. --
https://www.vitalityhp.net -- is a health insurance company in
Cerritos, California.
Vitality Health Plan of California sought Chapter 11 protection
(Bankr. C.D. Cal. Case No. 20-21041) on December 18, 2020. In the
petition signed by CEO Brian Barry, the Debtor was estimated to
have assets of $1 million to $10 million and liabilities of $10
million to $50 million.
Judge Julia W. Brand oversees the case.
The Debtor tapped Winthrop Golubow Hollander, LLP, led by Garrick
A. Hollander, Esq. as legal counsel, and Crowell & Moring, LLP as
special counsel. Stretto is the claims and noticing agent.
WAGYU 100: Cattle Raiser Files Disclosures, Gets Conditional OK
---------------------------------------------------------------
Wagyu 100, LLC, filed with the Bankruptcy Court a Disclosure
Statement on May 28, 2021. The Debtor proposes to remain in
business to provide a dividend to its unsecured creditors.
After the filing of the bankruptcy, the Debtor has continued to
grow the herd for sale and breeding purposes. The Debtor has
increased the size of the herd from 56 head to 89 head. Income
that will be generated from the Debtor's business operations shall
be used to fund the Plan.
Classes of Claims under the Plan
a. Class 1 Claims -- Allowed Administrative Claims of
Professionals and US Trustee
Class 1 Claims are unimpaired and will be paid in cash and in full
on the Effective Date.
b. Class 2 Claims -- Allowed Property Tax Claims
The Allowed Property Tax Claims shall be paid from the continued
operations of the company. Wood County has filed a Proof of Claim
for $435 and Mineloa ISD has filed a Proof of Claim for $7,494.
The Class 2 creditors will receive post-petition pre-Effective Date
interest at the state statutory rate of 12% per annum and
post-Effective Date interest at 12% per annum. The Class 2
creditors' Claims shall be paid in full within 60 months from the
Petition Date. Class 2 Claimants are impaired under the Plan.
c. Class 3 Claims -- Allowed Texas Comptroller Claims
The Allowed Texas Comptroller Claims shall be paid out of the
revenue from the continued operations of the business. The
Comptroller has filed a Proof of Claim for $1,121. The Debtor will
pay the Comptroller taxes in two equal payments -- the first
payment on the Effective Date and the next pay 30 days later. A
failure by the Debtor or Reorganized Debtor to make a payment to
the Comptroller pursuant to these terms shall be an Event of
Default.
If the Debtor or Reorganized Debtor fails to cure an Event of
Default as to the Comptroller within 10 days after service of a
written notice of default, then the Comptroller may enforce the
entire amount of its Claim, and exercise all rights and remedies
available under applicable non-bankruptcy law. The Debtor shall be
allowed to cure up to two defaults. Upon the third default, the
Comptroller may declare the default non-curable and proceed to
collect the remainder of the debt. Class 3 Claimants are
impaired.
d. Class 4 Claims -- Allowed Secured Claim of II CB, L.P.
The Debtor executed that certain Promissory Note dated November 2,
2017 in favor of II CB, L.P. (CB) for $275,000, secured by a
certain Deed of Trust on the Property consisting of approximately
96 acres of land in Wood County, Texas. The Debtor would show that
the current indebtedness to CB is $289,000 (CB Secured Claim).
The Debtor shall pay the CB Secured Claim in full with interest at
the rate of 5% per annum based on a 10-year amortization. The
Debtor shall make 59 equal monthly payments of $3,065 commencing on
the Effective Date and one payment of all outstanding principal and
interest in the 60th month following the Effective Date. CB shall
retain its existing liens on the Property until paid in full under
the Plan. Class 4 Claims are impaired.
Each holder of an Allowed Claim in Classes 2 through 4 and 6 may
vote on the Plan.
e. Class 5 Claims -- Allowed Claims of Legacy AG
The Debtor is a guarantor on an obligation of Christopher Fischer
Legacy. The Debtor has pledged the Property as collateral on the
Fischer obligation. The Class 5 Claimant shall receive no payments
under the Plan, however, the Plan will not affect the Debtor's
current collateral on the guaranty to Legacy. Class 5 Claims are
unimpaired.
f. Class 6 Claims -- Unsecured Creditors
The Allowed Claims of Unsecured Creditors shall be paid in full in
12 equal monthly payments commencing on the Effective Date. The
Class 6 Creditors are impaired under the Plan.
g. Class 7 -- Current Equity Holders. The Current Equity Holder
shall retain his current ownership interests. The Class 7 Equity
Holders are not impaired by the Plan.
The Debtor intends to begin payments under the Plan in August 2021,
based on its the financial projections, a copy of which is
available for free at https://bit.ly/3phtTwU from PacerMonitor.com
The Debtor disclosed that claimants and Equity Interest Holders
should be aware that there are substantial risks involved in
consummation of the Plan. The Plan contemplates that there will be
excess funds to pay Creditor Claims. The major risks associated
with the Plan, are the Debtor's ability to restart operations at or
near pre-COVID levels.
A copy of the Disclosure Statement is available for free at
https://bit.ly/3z0lh2a from PacerMonitor.com.
Conditional Approval Entered
On June 2, 2021, Judge Joshua P. Searcy conditionally approved the
Debtor's Disclosure Statement.
A copy of the order is available for free at https://bit.ly/2TEzGB8
from PacerMonitor.com
About Wagyu 100
Wagyu 100, LLC is in the business of raising certified Wagyu beef
cattle for sale and breeding. The Debtor filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
E.D. Tex. Case No. 21-60039) on January 29, 2021.
On the Petition Date, the Debtor estimated between $500,001 and
$1,000,000 in asset and between $100,001 and $500,000 in
liabilities. Christopher Fischer, sole member, signed the
petition.
Eric A. Liepins, Esq., at Eric A. Liepins, PC serves as the
Debtor's counsel.
YELLOW PAGES: S&P Withdraws 'B-' Long-Term Issuer Credit Rating
---------------------------------------------------------------
S&P Global Ratings has withdrawn its 'B-' long-term issuer credit
rating on Yellow Pages Ltd. at the company's request. The 'B'
issue-level ratings on the company's exchangeable debentures were
also withdrawn following Yellow Pages' April 23, announcement of
their redemption. S&P expects the debentures will be redeemed in
full today, based on that redemption announcement. The outlook on
the ICR was positive at the time of rating withdrawal.
Z EDGE: Disposable Income to Fund 120-Month Plan
------------------------------------------------
Z Edge of All Trades, LLC submitted a Plan and a Disclosure
Statement.
This is a reorganizing plan. The Proponent seeks to accomplish
payments under the Plan by making monthly payments to the
creditors. The Effective Date of the proposed Plan is September 1,
2021.
The Debtor's asset consist of 1149 E. Sandpiper, Unit 112, Phoenix,
Arizona, condo, $231,000 value, no debt; 2602 E. Monte Vista,
Phoenix, Arizona, fourplex, value $336,000, no debt; and 4821 E.
Sheridan St., Phoenix, Arizona, fourplex, value $500,000, debt
principal $250,000.
The Plan will treat select classes as follows:
* Class 5A Sandcastle Hoa totaling $5,377 will be paid by
January 1, 2023. Class 5A is impaired.
* Class 5B Lakes Community Hoa totaling $2,154 will be paid by
January 1, 2023. Class 5B is impaired.
* Class 8A Smith totaling $250,000 will be paid in 10 years.
Class 8A is impaired.
Class 11 is the class for general unsecured claims. The Debtor
believes there are no general unsecured claims at this time.
The Plan will be funded from disposable income of not less than
$3,000 per month for a term of 120 months.
Attorney for the Debtor:
LAWRENCE B. SLATER, PLLC
16444 E. PECOS RD.
GILBERT, AZ 85295
Tele. No.: (480) 835-6000
Fax No.: 480 281-9952
Email: lawrence@slater.net
A copy of the Disclosure Statement is available at
https://bit.ly/3uHe3wL from PacerMonitor.com.
About Z Edge of All Trades, LLC
Debtor is in the business of renting out residential properties and
doing contracting work. LAWRENCE B. SLATER, PLLC is the debtor's
counsel.
[^] BOND PRICING: For the Week from May 31 to June 4, 2021
----------------------------------------------------------
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------- ------ ------ --------- --------
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BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Basic Energy Services Inc BASX 10.750 18.821 10/15/2023
Basic Energy Services Inc BASX 10.750 18.821 10/15/2023
Briggs & Stratton Corp BGG 6.875 8.415 12/15/2020
Buffalo Thunder
Development Authority BUFLO 11.000 51.252 12/9/2022
Chinos Holdings Inc CNOHLD 7.000 0.332 N/A
Chinos Holdings Inc CNOHLD 7.000 0.332 N/A
Dean Foods Co DF 6.500 2.000 3/15/2023
Dean Foods Co DF 6.500 1.100 3/15/2023
Depository Trust &
Clearing Corp/The DEPTCC 3.351 100.050 N/A
ESH Hospitality Inc STAY 4.625 106.559 10/1/2027
ESH Hospitality Inc STAY 4.625 106.399 10/1/2027
Energy Conversion Devices ENER 3.000 7.875 6/15/2013
Energy Future Competitive
Holdings Co LLC TXU 0.928 0.072 1/30/2037
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 35.423 7/15/2023
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 35.690 7/15/2023
Federal Home Loan Banks FHLB 0.730 99.632 7/8/2025
Federal Home Loan Banks FHLB 1.000 99.556 6/29/2026
Federal Home Loan Mortgage FHLMC 0.375 99.874 6/8/2023
Federal Home Loan Mortgage FHLMC 0.430 99.813 6/9/2023
Federal Home Loan Mortgage FHLMC 0.350 99.768 12/9/2022
Federal Home Loan Mortgage FHLMC 0.800 99.684 6/9/2025
Federal Home Loan Mortgage FHLMC 0.500 99.806 12/8/2023
Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011
GNC Holdings Inc GNC 1.500 1.250 8/15/2020
GTT Communications Inc GTT 7.875 11.857 12/31/2024
GTT Communications Inc GTT 7.875 10.728 12/31/2024
Goodman Networks Inc GOODNT 8.000 39.811 5/11/2022
Hornbeck Offshore Services HOSS 5.000 1.130 3/1/2021
Hornbeck Offshore Services HOSS 5.875 1.129 4/1/2020
Liberty Media Corp LMCA 2.250 46.270 9/30/2046
MAI Holdings Inc MAIHLD 9.500 15.899 6/1/2023
MAI Holdings Inc MAIHLD 9.500 15.899 6/1/2023
MAI Holdings Inc MAIHLD 9.500 15.899 6/1/2023
MBIA Insurance Corp MBI 11.444 16.000 1/15/2033
MBIA Insurance Corp MBI 11.444 17.108 1/15/2033
MF Global Holdings Ltd MF 6.750 15.625 8/8/2016
MF Global Holdings Ltd MF 9.000 15.625 6/20/2038
Navajo Transitional
Energy Co LLC NVJOTE 9.000 65.000 10/24/2024
Nine Energy Service Inc NINE 8.750 42.060 11/1/2023
Nine Energy Service Inc NINE 8.750 41.897 11/1/2023
Nine Energy Service Inc NINE 8.750 41.996 11/1/2023
OMX Timber Finance
Investments II LLC OMX 5.540 0.879 1/29/2020
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Revlon Consumer Products REV 6.250 40.046 8/1/2024
Rolta LLC RLTAIN 10.750 2.021 5/16/2018
Sears Holdings Corp SHLD 8.000 1.200 12/15/2019
Sears Holdings Corp SHLD 6.625 1.763 10/15/2018
Sears Holdings Corp SHLD 6.625 1.763 10/15/2018
Sears Roebuck Acceptance SHLD 7.500 0.520 10/15/2027
Sears Roebuck Acceptance SHLD 7.000 0.596 6/1/2032
Sears Roebuck Acceptance SHLD 6.500 1.049 12/1/2028
Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Voyager Aviation
Holdings LLC / Voyager
Finance Co VAHLLC 9.000 65.000 8/15/2021
Voyager Aviation
Holdings LLC / Voyager
Finance Co VAHLLC 9.000 54.000 8/15/2021
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
Copyright 2021. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
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are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***