/raid1/www/Hosts/bankrupt/TCR_Public/210614.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, June 14, 2021, Vol. 25, No. 164
Headlines
121 LANGDON: Seeks Cash Collateral Access
1716 I LLC: Amended Reorganizing Plan Confirmed by Judge
4354 PINEVIEW: Gets OK to Hire Kumar Prabhu Patel as Legal Counsel
4712 MEADOWS: Gets OK to Hire Kumar Prabhu Patel as Legal Counsel
801 ASBURY: Seeks Cash Collateral Access
AI AQUA: S&P Alters Outlook to Negative, Affirms 'B' ICR
AIRPORT VAN RENTAL: Seeks Cash Collateral Access Until Yearend
AJRANC INSURANCE: Wins Cash Collateral Access
ALBERTSONS COS: S&P Upgrades ICR to 'BB' on Debt Reduction
ALEX AND ANI LLC: Begins Marketing of Assets, In Restructuring Pact
ALEX AND ANI: Case Summary & 30 Largest Unsecured Creditors
ALEX AND ANI: Has Dual-Track Plan After Deal With Lion Capital
ALEX AND ANI: Seeks Cash Collateral Access
ALH PROPERTIES: Wins Cash Collateral Access
AMERICAN AGCREDIT: S&P Assigns 'BB+' Rating on Preferred Stock
AMERICAN AXLE: Egan-Jones Keeps B- Senior Unsecured Ratings
APACHE CORP: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
APOLLO COMMERCIAL: S&P Alters Outlook to Stable, Affirms 'B+' ICR
ARCHBISHOP OF AGANA: Committee Taps Hiller Law as Special Counsel
ARTISAN BUILDERS: Taps Urban Blue Realty as Real Estate Broker
ASCENT RESOURCES: Fitch Rates New Eight-Year Unsec. Notes 'B'
ASTORIA ENERGY: S&P Alters Outlook to Negative, Affirms 'BB-' ICR
BALL CORPORATION: Egan-Jones Keeps BB Senior Unsecured Ratings
BEAZER HOMES: Egan-Jones Keeps B- Senior Unsecured Ratings
BELDEN INCORPORATED: Egan-Jones Keeps BB- Senior Unsecured Ratings
BETHEL CHURCH OF MIAMI: Gets OK to Hire Fisher Auction as Broker
BILL STARKS: Seeks Cash Collateral Access
BILLINGS LODGE NO. 394: Taps Goodrich & Reely as Mediator
BLACKSTONE MORTGAGE: S&P Alters Outlook to Stable, Affirms B+ ICR
BOOZ ALLEN: S&P Rates New Senior Unsecured Notes 'BB-'
BRAINSTORM INTERNET: Seeks to Hire Hoff Law Offices as Counsel
BUNGE LIMITED: Egan-Jones Hikes Senior Unsecured Ratings to BB
CABOT CORPORATION: Egan-Jones Keeps BB+ Senior Unsecured Ratings
CABOT OIL: Egan-Jones Keeps BB+ Senior Unsecured Ratings
CARLA'S PASTA: Hearing Today on Bank's Payment Demand
CENTRAL GARDEN: Egan-Jones Keeps BB Senior Unsecured Ratings
CF INDUSTRIES: Egan-Jones Hikes Senior Unsecured Ratings to BB+
CHARLES K. BRELAND: Court Rejects Trustee's Bid to Sell Property
CHINA FISHERY: Creditor Proponents File CFG Peru Chapter 11 Plan
CHOICE HOTELS: Egan-Jones Keeps BB Senior Unsecured Ratings
CIMAREX ENERGY: Egan-Jones Hikes Senior Unsecured Ratings to BB+
CLAROS MORTGAGE: S&P Alters Outlook to Stable, Affirms 'B+' ICR
CMC MATERIALS: Egan-Jones Keeps BB+ Senior Unsecured Ratings
COOPER TIRE: Egan-Jones Keeps BB Senior Unsecured Ratings
CORECIVIC INCOPORATED: Egan-Jones Keeps BB Sr. Unsecured Ratings
CORNERSTONE ONDEMAND: Egan-Jones Keeps CCC Sr. Unsecured Ratings
COTY INC: S&P Rates New Senior Secured Credit Facilities 'B'
CREATD INC: Increases Ownership Stake in Plant Camp to 89%
CRIMSONBIKES LLC: Hearing Today on Continued Cash Collateral Use
CVR PARTNERS: Moody's Rates New $550MM Senior Secured Notes 'B2'
DAWSON COUNTY HOSPITAL: S&P Affirms 'CCC' Long-Term GO Bonds Rating
DELUXE CORPORATION: Egan-Jones Keeps B Senior Unsecured Ratings
DEVON ENERGY: Egan-Jones Keeps B- Senior Unsecured Ratings
DILLARD'S INCORPORATED: Egan-Jones Keeps BB Sr. Unsecured Ratings
DIOCESE OF ROCKVILLE: Mediator Taps Binder & Schwartz as Counsel
DITECH HOLDING: District Court Rules on RMS's Standing
DOMTAR CORPORATION: Egan-Jones Keeps BB+ Senior Unsecured Ratings
E.Y. REALTY: Gets Interim OK to Hire Gary W. Cruickshank as Counsel
ENERPLUS CORPORATION: Egan-Jones Keeps B Senior Unsecured Ratings
EPHRAIM VASHOVSKY: Public Auction Slated for July 14
ETHEMA HEALTH: Closes $230K Convertible Note Financing With Labrys
EXPO CONSTRUCTION: Unsecured Creditors to Recover 5% in 60 Months
FIDELITY NATIONAL: Egan-Jones Keeps BB+ Senior Unsecured Ratings
FIVE STAR: Stockholders Elect Two Directors at Annual Meeting
FIVE STAR: To Continue Managing 120 Sr. Living Communities for DHC
FLAME SEAL: Unsecureds Owed $1.7M to Get Member Certs of Flame LLC
FOOT LOCKER: Egan-Jones Hikes Senior Unsecured Ratings to BB+
FRONTERA ENERGY: S&P Alters Outlook to Stable, Affirms 'B+' ICR
FUELCELL ENERGY: Incurs $18.9 Million Net Loss in Second Quarter
FUSE MEDICAL: Stockholders Elect Four Directors at Annual Meeting
FUTURUM COMMUNICATIONS: Wins Cash Collateral Thru June 28
GAINCO INC: Wins Cash Collateral Access on Interim Basis
GAMESTOP CORP: All Three Proposals Approved at Annual Meeting
GAMESTOP CORP: Files Offering Program Prospectus Supplement
GEMINI HDPE: S&P Alters Outlook to Stable, Affirms BB Loan Rating
GENESIS PLACE: August 3 Pretrial Conference on Plan Confirmation
GENESIS WEIGHT: Gets OK to Hire David Jennis as Legal Counsel
GETWELL PHARMACY: Wins Cash Collateral Access Thru June 29
GL BRANDS: Amended Joint Reorganizing Plan Confirmed by Judge
GLATFELTER CORPORATION: Egan-Jones Keeps BB Sr. Unsecured Ratings
GREEN PLAINS: Egan-Jones Keeps B- Senior Unsecured Ratings
GROUPE SOLMAX: Moody's Assigns First Time B2 Corp. Family Rating
GROUPE SOLMAX: S&P Assigns Preliminary 'B' ICR, Outlook Stable
GRUPO AEROMEXICO: Will Search of Alternate Lender
HERTZ CORP: Expects to Emerge from Chapter 11 by June 30, 2021
HERTZ GLOBAL: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable
HIGHLAND CAPITAL: Ex-CEO Dondero Fined $450,000 for TRO Breach
IBIO INC: Appoints Veteran Biopharmaceutical Exec to Board
IMERYS TALC: Johnson & Johnson to Probe Suspicious Ch. 11 Plan Vote
ISTAR INC: S&P Alters Outlook to Stable, Affirms 'BB' ICR
JACOBS TOWING: Case Summary & 11 Unsecured Creditors
K&D MANAGEMENT: Case Summary & 4 Unsecured Creditors
K.G. IM, LLC: Two-Step Structured Dismissal of Ch.11 Cases OK'd
KENNAMETAL INC: Egan-Jones Keeps BB+ Senior Unsecured Ratings
KEYSER AVENUE: Case Summary & 4 Unsecured Creditors
KKR REAL ESTATE: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
KOHL'S CORPORATION: Egan-Jones Keeps BB- Senior Unsecured Ratings
KOLESZAR FARM: Voluntary Chapter 11 Case Summary
LADDER CAPITAL: S&P Affirms 'BB-' ICR on Ample Liquidity
LAREDO PETROLEUM: Egan-Jones Hikes Sr. Unsecured Ratings to CCC-
LEGGETT & PLATT: Egan-Jones Keeps BB+ Senior Unsecured Ratings
LITTLE RIVER HEALTHCARE: United Rift Stays in Bankruptcy Court
LOEWS CORPORATION: Egan-Jones Keeps BB Senior Unsecured Ratings
LOYE GRADING: Wins Cash Collateral Access Thru Aug 10
LSCS HOLDINGS: S&P Alters Outlook to Stable, Affirms 'B-' ICR
MALLINCKRODT PLC: Bids to Centralize 10 Acthar Gel Suits Denied
MANITOWOC COMPANY: Egan-Jones Hikes Senior Unsecured Ratings to B
MARATHON OIL: Egan-Jones Keeps BB Senior Unsecured Ratings
MARATHON PETROLEUM: Egan-Jones Keeps BB Senior Unsecured Ratings
MARRIOTT INTERNATIONAL: Egan-Jones Cuts Sr. Unsec. Ratings to BB
MARRIOTT VACATIONS: S&P Alters Outlook to Stable, Affirms 'B+' ICR
MAXLINEAR INC: S&P Rates New $350MM First-Lien Term Loan 'BB-'
MEDIA LODGE: May Use Cash Collateral Thru July 25
MERITOR INCORPORATED: Egan-Jones Keeps BB- Sr. Unsecured Ratings
MICROCHIP TECHNOLOGY: Egan-Jones Keeps B+ Senior Unsecured Ratings
MOBBBT LLC: Voluntary Chapter 11 Case Summary
MONAKER GROUP: Incurs $16.5M Net Loss in FY Ended Feb. 28
MOOG INC: S&P Alters Outlook to Stable, Affirms 'BB+' ICR
MOTOROLA SOLUTIONS: Egan-Jones Keeps BB+ Senior Unsecured Ratings
NATIONAL FUEL: Egan-Jones Keeps BB Senior Unsecured Ratings
NETSCOUT SYSTEM: Egan-Jones Keeps BB Senior Unsecured Ratings
NEW BETHEL: August 3 Disclosure Statement Hearing Set
NEW YORK CLASSIC: Gets OK to Hire Shell Law Firm as Special Counsel
NIELSEN N.V.: Egan-Jones Keeps B- Senior Unsecured Ratings
NITRIDE SOLUTIONS: Seeks to Use Cash Collateral
NOVETTA SOLUTIONS: S&P Places 'B-' ICR on CreditWatch Positive
NTH SOLUTIONS: Seeks to Hire Asterion Inc. as Valuation Expert
NTH SOLUTIONS: Wins Cash Collateral Access Thru July 11
NXT ENERGY: All Proposals Approved at Annual Meeting
ORBCOMM INC: S&P Assigns 'B' ICR on Leveraged Buyout
OWENS-ILLINOIS GROUP: Egan-Jones Keeps B- Senior Unsecured Ratings
PACIFIC LINKS: Gets OK to Hire KDL CPAs as Accountant
PAYA HOLDINGS: S&P Assigns B Issuer Credit Rating, Outlook Stable
PENN NATIONAL: Egan-Jones Keeps CCC Senior Unsecured Ratings
PEPCOM INC: Seeks to Hire Furr and Cohen as Legal Counsel
PHILADELPHIA SCHOOL: Business Revenue to Fund Plan Payments
POINT BLANK: Court Enters Final Decree, Extends Plan Trust's Term
POST HOLDINGS: Egan-Jones Keeps B Senior Unsecured Ratings
PRAIRIE SEEDS ACADEMY: S&P Affirms 'BB-' Rating on Revenue Debt
QUEST PATENT: MaloneBailey Resigns as Auditor
RALPH LAUREN: Egan-Jones Keeps BB Senior Unsecured Ratings
RAMBUS INCORPORATED: Egan-Jones Keeps CCC- Sr. Unsecured Ratings
RAPTOR ACQUISTION: S&P Assigns 'B' ICR, Outlook Stable
RESTLAND MEMORIAL: Seeks to Hire Teri Hayes as Accountant
RITCHIE BROS: S&P Affirms 'BB+' ICR on Resilient Performance
SAFEPOINT INSURANCE: A.M. Best Reviews B-(F) Fin. Strength Rating
SAGE ECOENTERPRISES: Wins Cash Collateral Access on Final Basis
SALT BUSH: Obtains CCAA Initial Stay Order
SAN ISABEL TELECOM: Seeks to Hire Hoff Law Offices as Legal Counsel
SEALED AIR: Egan-Jones Keeps BB- Senior Unsecured Ratings
SERVICE CORPORATION: Egan-Jones Keeps BB+ Senior Unsecured Ratings
SHARE ENERGY: Seeks Cash Collateral Access
SIGNIFY HEALTH: Moody's Hikes CFR to B1 & Rates First Lien Debt B1
SIGNIFY HEALTH: S&P Rates New Senior Secured Revolver 'B'
SIRIUS XM: S&P Rates New $1.5BB Senior Unsecured Notes 'BB'
SKY STEEL: Seeks Cash Collateral Access
SKYBRIDGE SPECTRUM: Court Tosses Involuntary Chapter 11 Petition
SOURCE HOTEL: Seeks to Hire NAI Capital as Real Estate Broker
SOUTH 18TH ST CAPITAL: Investor Seeks Ch. 11 Trustee Appointment
SPECTRUM BRANDS: Egan-Jones Hikes LC Sr. Unsecured Rating to BB-
SPIRIT AIRLINES: Moody's Alters Outlook on B1 CFR to Positive
ST. JOSEPH ENERGY: Moody's Alters Outlook on Ba3 Rating to Neg.
STARWOOD PROPERTY: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
STREAM TV: Chapter 11 Case Dismissed for Second Time
SUMMIT HOTEL: Egan-Jones Keeps BB Senior Unsecured Ratings
SUNCOKE ENERGY: Moody's Rates New $500MM Secured Notes 'B1'
SUNCOKE ENERGY: S&P Rates New $500MM Senior Secured Notes 'BB'
SUNCOR ENERGY: Egan-Jones Keeps BB+ Senior Unsecured Ratings
SUNSTONE HOTEL: Egan-Jones Lowers Senior Unsecured Ratings to B+
SYSCO CORPORATION: Egan-Jones Keeps BB Senior Unsecured Ratings
T-MOBILE US: Egan-Jones Keeps BB Senior Unsecured Ratings
TECT AEROSPACE: Deadline to File Claims Set for July 23
TELEMACHUS LLC: Has Until June 29 to File Plan & Disclosures
TELEPHONE AND DATA: Egan-Jones Keeps B+ Senior Unsecured Ratings
TERRESTRIAL DEVELOPMENT: Seeks to Hire Sentry Residential as Broker
TIGER OAK: Deal on Cash Collateral Access OK'd
TIVITY HEALTH: S&P Rates New Revolving Credit Facility 'B+'
TRMA FRISCO: Seeks to Hire DeMarco Mitchell as Legal Counsel
U.S. CELLULAR: Egan-Jones Keeps BB- Senior Unsecured Ratings
U.S. CONCRETE: S&P Places 'BB-' ICR on CreditWatch Positive
UGI CORPORATION: Egan-Jones Keeps BB+ Senior Unsecured Ratings
UNDER ARMOUR: Egan-Jones Keeps B+ Senior Unsecured Ratings
UNITED RENTALS: Egan-Jones Keeps BB- Senior Unsecured Ratings
US CONSTRUCTION SERVICES: Taps Patout Law as Special Counsel
VBI VACCINES: Shareholders Elect Seven Directors
VF CORPORATION: Egan-Jones Keeps BB+ Senior Unsecured Ratings
VISHAY INTERTECHNOLOGY: Egan-Jones Keeps BB+ Sr. Unsecured Ratings
WARRIOR MET: S&P Alters Outlook to Negative, Affirms 'B+' ICR
WASHINGTON PRIME: Forbearance Period to Expire Today
WC 6TH: Seeks to Tap Fishman Jackson Ronquillo as Legal Counsel
WESCO INTERNATIONAL: Egan-Jones Keeps B+ Senior Unsecured Ratings
YC ATLANTA: Christopher Tierney Okayed as Chapter 11 Examiner
[*] Puerto Rico Bankruptcy Cases Down by 18.3% in May 2021
[^] BOND PRICING: For the Week from June 7 to 11, 2021
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121 LANGDON: Seeks Cash Collateral Access
-----------------------------------------
121 Langdon Street Group, LLP asks the U.S. Bankruptcy Court for
the Western District of Wisconsin for entry of an order approving
the Debtor's Stipulation with Midland States Bank and Lokre
Development Company, as agent for Todd Bramschreiber, Gwen Means,
ME Elmore 1, LLC, and RL Elmore T, LLC, for the use of cash
collateral.
The Debtor requires the use of the Midland and Lokre's Cash
Collateral to continue to operate its business and manage its
property as a debtor-in-possession pursuant to Sections 1107(a) and
1108 of the Bankruptcy Code.
In exchange, the Debtor will make interest-only monthly payments to
Midland in the amount of $5,009.54 and to Lokre the amount of
$1,965.57 commencing the 28th day of May, 2021.
Midland and Lokre will be granted replacement liens on all
post-Petition rents and proceeds of collateral pursuant to 11
U.S.C. section 361(2).
The Debtor will also escrow for all post-Petition taxes the amount
of $3,159 per month by depositing this sum in the Trust Account of
the Debtor's counsel, Krekeler Strother, S.C.
A copy of the Stipulation is available for free at
https://bit.ly/35awjEg from PacerMonitor.com.
About 121 Langdon Street Group
121 Langdon Street Group, LLP sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. Wis. Case No. 21-10886) on April
26, 2021. At the time of filing, the Debtor disclosed up to $10
billion in both assets and liabilities.
Judge Catherine J. Furay oversees the case.
Krekeler Strother, S.C. is the Debtor's legal counsel.
Lokre Development Company, as lender, is represented by:
Eric R. Johnson, Esq.
Buzza, Dreier & Johnson, LLC
2925 Post Road
Stevens Point, WI 54481
Tel: (715)997-9080
Midland States Bank, as lender, is represented by:
Ryan T. Carlson, Esq.
R. Carlson Law Offices
PO Box 1074
Brookfield, WI 53608
Tel: 262-269-8228
1716 I LLC: Amended Reorganizing Plan Confirmed by Judge
--------------------------------------------------------
Judge Elizabeth L. Gunn has entered an order confirming the Amended
Chapter 11 Plan of Reorganization of 1716 I LLC.
The Court has determined that the Disclosure Statement provides
information of the kind and in sufficient detail to enable parties
in interest to make an informed judgment with respect to the Plan.
In addition, the Court has determined that the Debtor complied with
the notice and service procedures specified in the Order
Conditionally Approving Debtor's Amended Disclosure Statement and
Consolidating Final Hearing on Amended Disclosure Statement with
Hearing on Confirmation of Debtor's Amended Chapter 11 Plan, and
the service of the documents as specified in the Order was
sufficient for all purposes required under the Plan, and the Plan
and required documents were properly served upon all parties in
accordance with the Code and Bankruptcy Rules.
Moreover, the Court has determined that no party objected to the
approval of the Disclosure Statement or confirmation of the Plan.
A copy of the Plan Confirmation Order dated June 8, 2021, is
available at https://bit.ly/3cxRZhK from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Wendell W. Webster, Esq.
1775 K Street, N.W., Suite 290
Washington, DC 20006
Tel: (202) 659-8510
E-mail: wwebsterfredrickson.com
About 1716 I
1716 I LLC owns and operates a full-service nightclub, lounge, and
bar business located in the central business section of the
District of Columbia. It filed for Chapter 11 bankruptcy
protection (Bankr. D.D.C. Case No. 19-00699) on Oct. 23, 2019. The
Hon. S. Martin Teel, Jr. oversees the case. In its petition, the
Debtor was estimated to have $100,000 to $500,000 in assets and $1
million to $10 million in liabilities. The petition was signed by
Charles Zhou, shareholder and principal. The Debtor is represented
by Wendell W. Webster, Esq., at Webster & Fredrickson, PLLC.
4354 PINEVIEW: Gets OK to Hire Kumar Prabhu Patel as Legal Counsel
------------------------------------------------------------------
The 4354 Pineview Drive Land Trust received approval from the U.S.
Bankruptcy Court for the Northern District of Georgia to employ
Kumar Prabhu Patel & Banerjee, LLC to serve as legal counsel in its
Chapter 11 case.
The firm's services include:
a. providing the Debtor with legal advice with respect to its
powers and duties in the management of its property;
b. preparing legal papers;
c. seeking the turnover of the Debtor's property which is in the
possession and control of other parties;
d. assisting in the examination of claims of creditors;
e. assisting with the preparation of a plan of reorganization
and with the confirmation and consummation of the plan; and
f. other necessary legal services.
The firm's hourly rates are as follows:
Attorneys $300 to $450 per hour
Associates $150 to $250 per hour
Legal Assistants $100 to $150 per hour
Kumar Prabhu Patel & Banerjee will also receive reimbursement for
out-of-pocket expenses incurred.
The retainer fee is $10,000.
Gai Lynn McCarthy, Esq., a partner at Kumar Prabhu Patel &
Banerjee, disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Gai Lynn McCarthy, Esq.
Kumar Prabhu Patel & Banerjee, LLC
990 Hammond Drive, Suite 800
Atlanta, GA 30328
Tel: (678) 443-2215
Fax: (678) 443-2230
Email: gmccarthy@kppblaw.com
About The 4354 Pineview Drive Land Trust
The 4354 Pineview Drive Land Trust sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
21-53482) on May 3, 2021, listing under $1 million in both assets
and liabilities. Judge Paul Baisier oversees the case. Kumar,
Prabhu, Patel & Banerjee, LLC represents the Debtor as legal
counsel.
4712 MEADOWS: Gets OK to Hire Kumar Prabhu Patel as Legal Counsel
-----------------------------------------------------------------
The 4712 Meadows Road Land Trust received approval from the U.S.
Bankruptcy Court for the Northern District of Georgia to employ
Kumar Prabhu Patel & Banerjee, LLC to serve as legal counsel in its
Chapter 11 case.
The firm's services include:
a. providing the Debtor with legal advice with respect to its
powers and duties in the management of its property;
b. preparing legal papers;
c. seeking the turnover of the Debtor's property which is in the
possession and control of other parties;
d. assisting in the examination of claims of creditors;
e. assisting with the preparation of a plan of reorganization
and with the confirmation and consummation of the plan; and
f. other necessary legal services.
The firm's hourly rates are as follows:
Attorneys $300 to $450 per hour
Associates $150 to $250 per hour
Legal Assistants $100 to $150 per hour
Kumar Prabhu Patel & Banerjee will also receive reimbursement for
out-of-pocket expenses incurred.
The retainer fee is $10,000.
Gai Lynn McCarthy, Esq., a partner at Kumar Prabhu Patel &
Banerjee, disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Gai Lynn McCarthy, Esq.
Kumar Prabhu Patel & Banerjee, LLC
990 Hammond Drive, Suite 800
Atlanta, GA 30328
Tel: (678) 443-2215
Fax: (678) 443-2230
Email: gmccarthy@kppblaw.com
About The 4712 Meadows Road Land Trust
The 4712 Meadows Road Land Trust sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
21-53483) on May 3, 2021, listing under $1 million in both assets
and liabilities. Judge Paul Baisier oversees the case. Kumar,
Prabhu, Patel & Banerjee, LLC serves as the Debtor's legal counsel.
801 ASBURY: Seeks Cash Collateral Access
----------------------------------------
James McCallion, the sole and managing member of 801 Asbury Avenue,
LLC, asks the U.S. Bankruptcy Court for the District of New Jersey
for entry of an order authorizing the Debtor to use cash
collateral.
An immediate need exists for Debtor to continue to use its rental
revenues to continue its operations as a debtor-in-possession,
including, but not limited to, its ability to pay for liability
insurance, utilities, building maintenance and repairs,
professional fees. United States Trustee Quarterly Fees and to meet
other ongoing obligations of the Debtor. Without such funds, the
Debtor will be unable to meet its operating expenses.
The Debtor is indebted to National Capital Management LP and
Kutztown Mortgage Partners, LLC through a series of loans from the
Lenders to the Debtor and 176 Route 50, LLC, a related
debtor-in-possession. The first loan by NCM to the Debtor, dated
March 15, 2019, was in the principal amount of $1,847,500. The
second loan by KMP to the Debtor, also dated March 15, 2019, was in
the principal amount of $1,302,500. The third loan by NCM to 176
and guaranteed by the Debtor, also dated March 15, 2019, was in the
original amount of $525,000. As of April 12, 2021, the current
total amount due to the Lenders on account of the three loans is
$4,172,372.88.
The Lenders' Indebtedness is secured by a blanket lien on all of
the Debtor's assets. Specifically, the Lenders' Indebtedness is
evidenced by three separate Open-Ended Mortgage and Security
Agreements dated as of March 15, 2019, Assignment of Rents and
UCC-1 financing statements filed against the Debtor. The Debtor is
currently reviewing and investigating the Lenders' loan documents
to determine whether the Lenders' Indebtedness is properly
perfected as the first, second and third position liens encumbering
all of the Debtor's assets.
A portion of the Lenders' Indebtedness is cross-collateralized by
all assets owned by 176 Route 50, LLC.
Pre-Petition Date, the Debtor's monthly payments to the Lenders
totaled $19,500 per month and was slated to increase to over
$30,000 per month.
The Debtor was forced to file its bankruptcy petition as a result
of insufficient income and reduced cash flow due to various
factors, but, most notably, the COV1D-19 pandemic. The Debtor lost,
and was unable to replace tenants, creating an inability to service
its debt obligations and forcing it to operate at a cash flow
deficit. The Debtor's senior secured lender commenced a state court
action and sought the appointment of a rent receiver which
precipitated the timing of the Chapter 11 case.
As adequate protection for the Debtor's use of cash collateral, the
Debtor proposes to grant the Lenders a replacement lien on all of
its unencumbered post-petition assets.
A copy of the motion is available for free at
https://bit.ly/3vlXx5v from PacerMonitor.com.
About 801 Asbury Avenue, LLC
801 Asbury Avenue, LLC is a New Jersey limited liability
corporation which owns and operates commercial real property in
Ocean City. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 21-14401) on May 26,
2021. In the petition signed by James McCallion, sole member, the
Debtor disclosed up to $10 million in both assets and liabilities.
David B. Smith, Esq. at Smith Kane Holman, LLC is the Debtor's
counsel.
AI AQUA: S&P Alters Outlook to Negative, Affirms 'B' ICR
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S&P Global Ratings affirmed its 'B' issuer credit rating on global
household water treatment and service provider AI Aqua Sarl
(Culligan) and revised its rating outlook to negative from stable.
At the same time, S&P assigned its 'B' issuer credit rating to
Osmosis Holdings L.P., the new Parent and financial reporting
entity upon transaction close. The outlook is negative. S&P will
withdraw the existing issuer credit and issue-level ratings on AI
Aqua and its borrowing subsidiaries at the close of the
transaction.
S&P said, "We also assigned our 'B' issue-level rating to the
company's proposed first-lien term loan and revolving credit
facility with a '3' recovery rating, indicating our expectation for
meaningful (55% rounded estimate) recovery in the event of a
payment default."
The negative outlook reflects the higher debt leverage (including
the preferred equity) for the transaction coupled with the
company's ongoing acquisition growth strategy, which could delay
deleveraging over the next year if cash flow generation is weaker
than expected and ongoing transaction and other one-time charges
continue to negatively affect pro forma EBITDA.
The transaction results in pro forma leverage above 8.5x, and the
company remains acquisitive. The incremental debt from the issuance
of preferred equity results in pro forma leverage above 8.5x, which
if sustained at these levels beyond fiscal 2021 could lead to a
lower rating. S&P said, "Although we expect the company to continue
to generate significant organic and acquisition-driven sales and
EBITDA growth that should lead to deleveraging well below 8x over
the next year, there nonetheless is the risk of that not occurring
given the company's highly acquisitive nature. It spent $115
million on acquisitions in the first quarter of fiscal 2021 and is
slated to close on more small tuck-in acquisitions in the second
quarter. Although very small, highly accretive, complementary to
the company's consumer water strategy, and cash funded (and
therefore not further leveraging), ongoing acquisitions nonetheless
result in additional one-time transaction expenses (albeit smaller
in magnitude than previous years). Moreover, future acquisitions
could lead to more debt issuance if they become larger and continue
at their current pace. Therefore, our negative outlook reflects the
risk of leverage staying above 8x on a sustained basis to the
extent mergers and acquisitions become larger and more frequent.
This could lead to a higher debt balance and higher-than-expected
transaction costs (which we do not add back to EBITDA), and could
prevent the company from deleveraging to levels that support the
'B' rating, including debt to EBITDA sustained well below 8x."
S&P said, "We believe operating performance will likely improve,
and one-time charges should become less pronounced.Culligan's
operating performance modestly underperformed our pre-pandemic
expectations in 2020 because of revenue declines in Europe, the
Middle East, and Africa (EMEA) and the Asia-Pacific (APAC) region
and because of one-time COVID-19- and acquisition-related charges
to its operations. This kept EBITDA margin near 15% compared with
our normalized expectation of closer to 20%. The declines in
Culligan's sales were particularly sharp in countries such as
Italy, where it maintains significant operations, due to the
earlier surges of COVID-19 infections and longer lockdown periods.
However, operating performance has improved into the first quarter
of 2021 and those regional declines were offset by the resilience
of its Americas segment, which experienced an about 11%
year-over-year increase in organic revenue through the first
quarter ended March 31, 2020. This expansion was due to higher
volumes in its drinking water and refrigeration filtration
businesses. In contrast with its other regional segments,
Culligan's Americas segment benefitted from the increased demand
for home services as consumers invested in home improvements due to
the stay-at-home measures and increased focus on health and
wellness amid the pandemic. We expect economies in Western Europe
will steadily reopen and one-time COVID-19-related impacts and
other transaction-related expenses (excluding those related to the
buyout) to not repeat at the same magnitude as historically, which
should enable the company to generate high-single-digit organic
revenue growth and expand margins closer to 20% over the next 12
months."
Culligan's free operating cash flow (FOCF) should continue to
improve but has not yet been sustained at levels that demonstrate
the company can materially deleverage through debt repayment.
Despite a challenging 2020 during which the company incurred
one-time COVID-19-related charges of $34 million, it generated
about $30 million in FOCF in part because of continued working
capital improvements as the company shortened its accounts
receivable day and more closely managed inventory levels. S&P said,
"After its seasonal build up of working capital in the first half
unwinds, we expect FOCF to approach $50 million this year and
further increase in 2022 as a full year contribution from its
acquisitions is converted to operating cash flow. Our 2021 FOCF
forecast assumes an operating performance rebound in the regions
that were hurt by the pandemic last year (specifically in EMEA and
APAC) and assumes that one-time COVID-19-related charges do not
repeat. Although we expect FOCF to steadily improve, it has not yet
been sustained at levels that support meaningful debt repayment
beyond mandatory amortization. This means deleveraging will
primarily come from EBITDA growth over the next year, which can be
choppy because of ongoing one-time transaction and restructuring
charges. Still, if the company reaches annual FOCF well above $50
million, which we project by fiscal 2022, then deleveraging could
accelerate with more debt repayment, which we would view
favorably."
S&P said, "The negative outlook reflects the risk continued
one-time charges and transaction costs may keep EBITDA and cash
flows below expectations beyond 2021 as well as the higher pro
forma leverage for the transaction because of the debt-like
preferred equity in the capital structure. We currently expect the
company to reduce leverage below 8x over the next 12 months from
current pro forma levels of more than 8.5x."
S&P could lower the ratings if pro forma debt to EBITDA remained
well above 8x over the next year and annual FOCFs did not approach
$50 million. This could occur if either:
-- The regions that were negatively affected by COVID-19 last year
(particularly EMEA) did not rebound as expected while the company
continued to incur one-time COVID-19-related expenses such that
EBITDA margin remained in the mid-to-low teens; or
-- One-time transaction and restructuring charges continued to
depress pro forma EBITDA while the company did not continue to
generate its current mid-single-digit organic sales growth.
S&P could revise the outlook to stable if the company reduced debt
to EBITDA to near or below 7.5x and sustained it there and
increased annual FOCF to more than $50 million. This could occur if
the company's operating performance rebounded as expected from the
pandemic, it continued to generate mid-single-digit organic sales
growth, and one-time charges steadily roll off over the next
several quarters.
AIRPORT VAN RENTAL: Seeks Cash Collateral Access Until Yearend
--------------------------------------------------------------
Airport Van Rental, Inc., and its affiliated debtors ask the U.S.
Bankruptcy Court for the Central District of California, Los
Angeles Division, for entry of an order extending the Debtors'
authority to use cash collateral from June 30, 2021, through the
end of the calendar year.
The Debtors' business is renting vehicles, especially large
passenger vans, minivans and SUVs, to consumers, corporations and
governmental entities. To finance the purchase of the vehicles, AVR
California borrows money from lenders or enters into potentially
disguised-sale "lease" agreements with vehicle financing companies.
AVR California ultimately is responsible for paying each Lender the
full purchase price of every vehicle financed by that Lender. Each
Lender has at least a security interest in each vehicle financed by
that Lender. Some of the Lenders may claim to have security
interests in rental income received by the Debtors from their
rental of the Lenders' vehicle-collateral to the Debtors'
customers.
The Lenders that the Debtor understand to have an interest in cash
collateral include 1st Source Bank, AFC Cal, LLC, Hitachi Capital
American Corp., Sumitomo Mitsui Finance and Leasing Co. Ltd., and
United Leasing Co.
Another creditor that may have a security interest in cash
collateral is the U.S. Small Business Administration.
Other creditors that may have security interests are certain tax
authorities that have filed proofs of claim as secured claims.
To protect the Lenders against any decrease in value of their
collateral, the Debtors propose to maintain what they refer to as
the "Lender Adequate Protection Program" or continue making
payments pursuant to prior agreements. The Lender Adequate
Protection Program provides two forms of adequate protection. It
pays the Lenders cash to compensate for the depreciation of
vehicles in which they have an interest, pays interest on the full
value of their secured claims, and pays the proceeds from any sale
of their vehicle-collateral. Also, to the extent there is still any
decrease in value of their cash collateral, the Lender Adequate
Protection Program gives each Lender a replacement lien on all of
the bankruptcy estate's assets, excluding avoiding power claims and
recoveries, to the extent that the Debtors' use of such party's
collateral results in a decrease in the value of such party's
interest in cash collateral. The Lender Adequate Protection Program
is consistent with the use of cash collateral that the Court has
already approved and which the Debtors seek to extend by the
Motion.
To protect the SBA against any decrease in value of its cash
collateral, the Debtors propose to maintain what the Debtors refer
to as the "SBA Adequate Protection Program." Pursuant to the SBA
Adequate Protection Program, the Debtors propose to make monthly
payments to the SBA in the amount of $2,437, as required by the
terms of the SBA's loan. Also, the Debtors propose to give the SBA
a replacement lien on all of the bankruptcy estate's assets,
excluding avoiding power claims and recoveries, to the extent that
the Debtors' use of the SBA's cash collateral results in a decrease
in the value of the SBA's interest in cash collateral.
To protect the tax authorities against any decrease in value of
their cash collateral, the Debtors propose what they refer to as
the "Tax Authority Adequate Protection Program," which would grant
the each of the tax authorities a replacement lien on all of the
bankruptcy estate's assets, excluding avoiding power claims and
recoveries, to the extent that the Debtors' use of such tax
authority's cash collateral results in a decrease in the value of
the tax authority's interest in cash collateral.
The Debtors do not propose to make payments to the tax authorities,
and the proposed adequate protection for the tax authorities is
limited to provision of a replacement lien.
The Debtors submit that the Lenders, the SBA, and the tax
authorities are adequately protected in that (a) the use of cash
collateral will fund the expenses of preserving, maintaining and
operating the Debtors' business and assets, including the Lenders',
the SBA's, and the tax authorities' collateral, and (b) based on
the Debtors' projections and the proposed payments, the value of
the Lenders' interest in cash collateral will not be diminished
solely by such use, and the Lenders will be compensated in cash for
the actual postpetition depreciation of their vehicle-collateral.
A copy of the motion is available for free at
https://bit.ly/3iw4o9N from PacerMonitor.com.
About Airport Van Rental, Inc.
Airport Van Rental -- https://www.airportvanrental.com/ -- is a van
rental company offering short and long-term rentals for road trips,
weekend journeys, moving, and any other group outings. Airport Van
Rental and its affiliates filed their voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case
No. 20-20876) on Dec. 11, 2020. Yazdan Irani, its president and
chief executive officer, signed the petitions.
At the time of filing, Airport Van Rental disclosed between $10
million and $50 million in both assets and liabilities.
Judge Sheri Bluebond oversees the case.
The Debtors tapped Danning, Gill, Israel & Krasnoff, LLP as their
bankruptcy counsel, CSA Partners LLC as financial consultant, and
Joel Glaser, APC as litigation counsel. Kevin S. Tierney is the
Debtors' chief reorganization officer.
AJRANC INSURANCE: Wins Cash Collateral Access
---------------------------------------------
Judge Caryl E. Delano of the U.S. Bankruptcy Court for the Middle
District of Florida, Tampa Division, has authorized AJRANC
Insurance Agency, Inc., and affiliates to use cash collateral on an
interim basis, pending a final hearing scheduled for June 21, 2021
at 2:30 p.m.
The Debtors are authorized to use Cash Collateral in accordance
with the budget, with a 10% variance. The Debtors are not
authorized to pay a car allowance to Anthony Borruso, their
president.
The Court says expenditures in excess of the variance or not on the
budget will not be deemed to be unauthorized use of cash
collateral, unless the recipient cannot establish that the expense
would be entitled to administrative expense priority if the
recipient had extended credit for the expenditure.
The lenders are granted, as adequate protection, replacement lien
in all categories and types of collateral in which they held a
security interest and lien as of the Petition Date to the same
extent, validity and priority that they held as of the Petition
Date. As further adequate protection to Iberia, AJRANC will make a
monthly interest only payment calculated at a per diem rate of
$91.07, with such payment due on the 10th day of each month.
The Debtors are also directed to maintain insurance coverage for
the Collateral in accordance with the obligations under the loan
and security documents.
A copy of the interim order and the Debtor's budget is available
for free at https://bit.ly/2RDIxSQ from PacerMonitor.com.
About AJRANC Insurance Agency
AJRANC Insurance Agency, Inc., based in Lutz, Fla., filed a Chapter
11 petition (Bankr. M.D. Fla. Case No. 20-06493) on August 27,
2020. In the petition signed by Anthony L. Borruso, president, the
Debtor disclosed $1,869,283 in assets and $1,920,494 in
liabilities. STICHTER RIEDEL BLAIN & POSTLER, P.A., serves as
bankruptcy counsel to the Debtor.
Nine Family Circle Holdings, Inc. (Case No. 20-6494) and R.A.
Borruso, Inc. (Case No. 20-6495) also sought Chapter 11 protection.
The cases are jointly administered under AJRANC Insurance's case.
ALBERTSONS COS: S&P Upgrades ICR to 'BB' on Debt Reduction
----------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Albertsons
Cos. Inc. (ACI) to 'BB' from 'BB-'. S&P also raised its issue-level
ratings on the company's unsecured notes to 'BB' from 'BB-', in
line with the issuer credit rating.
The '3' recovery rating on those notes is unchanged. The recovery
percentage is capped at 50%-70% (rounded estimate: 65%) in the
event of a payment default or bankruptcy.
S&P said, "The upgrade reflects our view that ACI will be a
less-leveraged business that focuses more on capital investments
going forward, with a more conservative financial policy as a
public company. ACI has reduced debt steadily in recent years,
including about $400 million in fiscal 2020, and there is an
opportunity to roll off some maturities in fiscal 2021. Strong
performance in 2020 amid U.S. stay-at-home mandates during the
COVID-19 pandemic helped the company generate ample cash to reduce
its debt burden. It experienced strong EBITDA growth in 2020,
leading to S&P Global Ratings-adjusted leverage of 4.1x down from a
mid-5x leverage expectation for the year before the pandemic. Our
adjusted debt calculation includes close to $8 billion of funded
debt, over $4 billion of tax effected multi-employer pension plan
(MEPP) adjustments, $1.6 billion convertible preferreds and more
than $6.7 billion of operating lease obligations.
"We will monitor in the coming year as special financial assistance
from the American Rescue Plan of 2021 materializes, with the
potential to provide one-time cash payments for unreduced pension
benefits including for certain MEPPs ACI contributes to. While we
cannot yet quantify that amount, we see potential given eligibility
of the plans ACI participates in to bring down that liability in
the next one to two years.
"In 2021, we expect a same-store sales decline of about 7.5%,
reflecting a pullback from what we view as unique pandemic-related
2020 same-store sales growth of 16.9%. Meanwhile, store upgrade and
omnichannel enhancements as well as still-good demand for
food-at-home will contribute to cash from operations normalizing in
excess of $2 billion, up from $1.8 billion in 2019 by our
calculations.
"Our leverage forecast contemplates EBITDA margin expanding about
50-70 basis points relative to 2019 levels, driven largely by
favorable volumes and cost controls. Given these factors and our
expectation for management to direct excess cash toward capital
spending and not shareholder initiatives or transformative
acquisitions, we revised our comparable rating analysis modifier to
neutral from negative.
"New strategies taking aim at discounters, supercenters, and online
grocers should benefit ID sales and margins even after elevated
pandemic-related demand subsides. Even as stock-up buying from the
early phase of the pandemic rolls off, we expect total sales of $66
billion in 2021, up from more than $62 billion in 2019. We also
project online grocery penetration to accelerate, though not as
much as the 258% gain it saw in fiscal year 2020 digital sales.
"We also expect higher private-label penetration to drive higher
EBITDA margins for full-year 2021. The company says its Own Brands
portfolio offers a 1,000-basis point gross margin advantage
compared to national brands, and it rolled out more than another
1,200 new items last year. Lastly, it is rapidly growing its
drive-up-and-go (DUG) locations, expecting 1,950 by the end of the
second quarter of 2021 from 1,400 first party pick up locations
earlier in the fiscal year.
"The revised management and governance score to satisfactory from
fair reflects our improving view of management, given operating
performance execution, and the conservative approach to strategic
planning and monitoring through the pandemic. We also note ACI's
recent track record as a public company with a more conservative
view of risk taking without financial sponsor control.
"We expect ACI's strong liquidity position will remain in place
over the coming year. ACI has a high cash balance of more than $1.7
billion and full availability under its $4 billion asset-based
lending (ABL) facility, aside from letters of credit. We believe
this could continue to go toward debt reduction in the coming one
to two years, as various instruments become callable.
"We also note improved incremental cash flow, given higher
inventory turns from lower inventory levels amid large grocery
demand since last year. This is offset with manageable debt
maturities over the next two years and about $1.9 billion in
forecasted capital spending over the coming year."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Governance: Strategy, Execution and Monitoring
S&P said, "The stable outlook reflects our belief that
profitability will stabilize throughout fiscal 2021 as continued
high food-at-home levels and improved online and store-level
execution result in modest earnings growth. We expect positive (but
lower) free operating cash flow generation in fiscal 2021 relative
to fiscal 2020, with potential for reduction in MEPP exposure.
"We could raise the rating if we expect sustained adjusted leverage
of 4x or less. This could occur, for example, if ACI reduces
balance sheet debt or MEPP liabilities decline due to meaningful
government funding in the coming year. It could also occur if we
believe the company will sustain EBITDA margins at least 50 basis
points better than 2019 levels. This would be while limiting
post-pandemic sales decline to the low single digits in 2021 with
prospects for subsequent growth.
"We could lower the rating if we expect leverage to approach 5x
either from a more aggressive financial policy or a more
significant reversion of operating results to a lower level,
following the sales surge in 2020."
ALEX AND ANI LLC: Begins Marketing of Assets, In Restructuring Pact
-------------------------------------------------------------------
Alex and Ani, LLC, creators of the iconic charm bangle and
affordable meaning based jewelry, on June 10, 2021, announced that
in continuation of its efforts to stabilize its business, the
Company has entered into a Restructuring Support Agreement ("RSA")
with its debt holders and equity sponsors regarding a comprehensive
financial and operational restructuring. To implement the
restructuring, the Company has commenced Chapter 11 proceedings in
the United States Bankruptcy Court for the District of Delaware.
Alex and Ani intends to continue operating its currently open
stores and its website as usual during the court-supervised
process.
Contemporaneously with the Chapter 11 filing, the Company commenced
a marketing process, pursuant to which parties will have the
opportunity to submit competing bids for the purchase of the
Company's assets. At the same time, the Company's lenders and
equity sponsors have agreed to the terms of a comprehensive
standalone restructuring that will serve to ensure go-forward
operations remain intact.
"We have worked diligently to overcome challenges with our capital
structure, and we are very pleased with our progress from an
operational efficiency standpoint," said Alex and Ani's Chief
Restructuring Officer, Robert Trabucco. "In 2020, COVID-19 forced
the company to pause its key strategic growth initiatives,
temporarily close stores and scale back its operations in light of
reduced in-store customer demand. During that time, Alex and Ani
continued to invest in its eCommerce platform," said Mr. Trabucco.
Alex and Ani has taken significant steps toward financial health
through realignment of sales channels, reducing retail footprint,
and reductions in capital expenditures and working capital. During
the restructuring process, the company will continue to have the
financial resources to purchase the goods and services necessary to
fulfill customer's needs while continuing to offer the high-quality
products, service, and support that has become a hallmark of the
brand.
"After a thorough review of a number of available options, the
Board determined that a Chapter 11 filing is in the best interests
of all parties, including our valued customers and employees."
Mr. Trabucco also emphasized that there will be little to no
disruption in day-to-day business and operations as a result of the
Chapter 11 filing. "Our employees will continue to be paid as usual
during this process. The Company will look to optimize its retail
footprint, bolster the eCommerce platform, and focus on strategic
wholesale accounts," he said.
"This process and proposed transaction is positive news for our
employees, our customers, and our suppliers. Alex and Ani will
have enhanced access to the financial resources with an optimized
capital structure necessary to continue to prosper and grow. By
utilizing the Chapter 11 process, we are able to ensure an
expedited and orderly right-sizing of our balance sheet and
operations," Mr. Trabucco concluded.
Additional information, court filings and other documents related
to the court-supervised process are available on a separate website
administered by the Company's claims agent at
https://www.kccllc.net/alexandani. Information is also available by
calling (888) 733-1434 (toll-free in the U.S.) or (310) 751-2633
(for parties outside the U.S.) or by sending an email to
AlexandAniInfo@kccllc.com.
Kirkland & Ellis LLP and Klehr Harrison Harvey Brazenburg LLP are
serving as the Company's legal co-counsel and Portage Point
Partners, LLC is serving as its financial advisor.
About Alex and Ani LLC
Founded in 2004 by Carolyn Rafaelian, Alex and Ani has become a
premier jewelry brand, quickly gaining popularity because of the
novel and customizable nature of its signature expandable wire
bracelet. Alex and Ani has been headquartered in East Greenwich,
Rhode Island since 2014. Since opening its first retail store in
Newport, Rhode Island in 2009, Alex and Ani has expanded to over
100 retail store locations across the United States, Canada, and
Puerto Rico. On the Web: HTTP://www.alexandani.com/
Alex and Ani LLC and its affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-10918) on June 9, 2021. In its
petition, Alex and Ani listed assets and liabilities of $100
million to $500 million each.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Klehr Harrison Harvey Branzburg LLP as local bankruptcy
counsel; and Portage Point Partners, LLC, as financial advisors and
investment bankers. Kurtzman Carson Consultants LLC is the notice
and claims agent.
ALEX AND ANI: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Alex and Ani, LLC
10 Briggs Drive
East Greenwich, RI 02818
Business Description: Founded in 2004, Alex and Ani is a jewelry
company selling wire charm bracelets and
manufacturing jewelry for private labels.
Alex and Ani is headquartered in East
Greenwich, Rhode Island.
Chapter 11 Petition Date: June 9, 2021
Court: United States Bankruptcy Court
District of Delaware
Nine affiliates that concurrently filed voluntary petitions under
Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Alex and Ani, LLC (Lead Case) 21-10918
A and A Shareholding, Co., LLC 21-10917
Alex and Ani International, LLC 21-10919
Alex and Ani Retail, LLC 21-10920
Alex and Ani Assembly, LLC 21-10921
Alex and Ani California, LLC 21-10922
Alex and Ani Canada, LLC 21-10923
Alex and Ani Puerto Rico, LLC 21-10924
Alex and Ani South Seas, LLC 21-10925
Judge: Hon. Craig T. Goldblatt
Debtors'
General
Bankruptcy
Counsel: Joshua A. Sussberg, P.C.
Allyson B. Smith, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: joshua.sussberg@kirkland.com
allyson.smith@kirkland.com
- and -
Alexandra Schwarzman, Esq.
300 North LaSalle Street
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
E-mail: alexandra.schwarzman@kirkland.com
Debtors'
Local
Bankruptcy
Counsel: Domenic E. Pacitti, Esq.
Michael W. Yurkewicz, Esq.
Sally E. Veghte, Esq.
KLEHR HARRISON HARVEY BRANZBURG LLP
919 North Market Street, Suite 1000
Wilmington, Delaware 19801
Tel: (302) 426-1189
Fax: (302) 426-9193
E-mail: dpacitti@klehr.com;
myurkewicz@klehr.com;
sveghte@klehr.com
- and -
Morton R. Branzburg, Esq.
1835 Market Street, Suite 1400
Philadelphia, Pennsylvania 19103
Tel: (215) 569-3007
Fax: (215) 568-6603
E-mail: mbranzburg@klehr.com
Debtors'
Financial
Advisor &
Investment
Banker: PORTAGE POINT PARTNERS, LLC
Debtors'
Notice &
Claims Agent: KURTZMAN CRASON CONSULTANTS LLC
Estimated Assets
(on a consolidated basis): $100 million to $500 million
Estimated Liabilities
(on a consolidated basis): $100 million to $500 million
The petitions were signed by Robert Trabucco, chief restructuring
officer.
A full-text copy of Alex and Ani's petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/RUZBDJY/Alex_and_Ani_LLC__debke-21-10918__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Chapel Associates II LLC Rent $4,126,608
Retail Property Management Group
1414 Atwood Avenue
Johnston, RI 02919-4886
Tel: 401-273-6800
Fax: 401-273-1181
Email: RPMADMIN@CARPIONATOGROUP.COM;
INFO@CARPIONATOGROUP.COM
2. Simon Property Group, Inc. Rent $3,949,189
M.S. Management Associates, Inc.
Dan Seabaugh
225 West Washington Street
Indianapolis, IN 46204-3438
Tel: 317-636-1600
Fax: 317-263-2318
EMAIL: DSEABAUGH@SIMON.COM
3. Brookfield Properties Retail Inc. Rent $3,314,166
Attn: Law/Lease Administration
Department; Dennis Marciano
350 N. Orleans St., Suite 300
Chicago, IL 60654-1607
Tel: 312-960-5000
Fax: 312-960-5475
EMAIL: DENISE.MARSICANO@BROOKFIELDPROPERTIES
RETAIL.COM
4. Quality Spray Technologies Inc. Trade Payable $3,256,458
Maria Ricco
175 Dupont Dr
Providence, RI 02907
Tel: 401-861-2413
Fax: 401-943-8287
EMAIL: MARIA@MCMTECH.COM
5. Macerich Oaks LP Rent $2,107,887
Erin Byrne; Franchette Palmer
401 Wilshire Blvd
Ste 700
Santa Monica, CA 90401
Tel: 602-953-6200
Fax: 310-395-2791
EMAIL: ERIN.BYRNE@MACERICH.COM;
OAKSAR@MACERICH.COM;
LOSCERRITOSCENTERAR@MACERICH.COM
6. Westfield LLC Rent $753,578
Attn: Sharon McHugh, VP Leasing
Westfield Properties
2049 Century Park East, 41st Floor
Los Angeles, CA 90067
Tel: 310-445-6836
EMAIL: SHARON.MCHUGH@URW.COM
7. National Chain Company Trade Payable $544,518
Debbie Squizzero
55 Access Road
Warwick, RI 02886
Tel: 401-732-6200
Fax: 401-738-1684
EMAIL: DEB@NATCHAIN.COM
8. Irvine Realty Company Rent $467,197
Terri Mirassou; Tanya Thomas
401 Newport Center Dr Suite A150
Newport Beach, CA 92660
Tel: 949-720-3300
Fax: 949-720-3350
EMAIL: TMIRASSOU@IRVINECOMPANY.COM;
TTHOMAS@IRVINECOMPANY.COM
9. The Forbes Company Rent $465,758
Lynn Temby; Hans Wolf
100 Galleria Officentre
Suite 427
Southfield, MI 48034
Tel: 248-827-4600
Fax: 248-827-1734
EMAIL: LTEMBY@THEFORBESCOMPANY.COM;
HWOLF@THEFORBESCOMPANY.COM
10. VNO 155 Spring Street LLC Rent $459,955
Attn: President - New York Division;
Vornado Office Management LLC
Jared Solomon; Ashley Natale
210 Route 4 East
Paramus, NJ 07652
Tel: 212-894-7000
Fax: 212-894-7070
EMAIL: JSOLOMON@VNO.COM;
ANATALE@VNO.COM
11. Briggs Drive Associates LLC Rent $457,613
Chris Leahy
98 Falcon Ridge Drive
Exeter, RI 02822
Tel: 401-265-5703
EMAIL: CHRISLEAHEY@COX.NET
12. Farkas Management LLC Rent $426,400
Larry Farkas
103-17 Metropolitan Ave.
Forest Hills, NY 11375
Tel: 718-263-5211
Fax: 718-263-5543
EMAIL: FARKASMANAGEMENT@YAHOO.COM
13. Plaza Del Caribe, S.E. Rent $337,023
Anne Kelleher; AR Specialist;
Jannette De Jesus
350 Ave Carlos Chardon
San Juan, PR 00918-2124
Tel: 787-474-7474
Fax: 787-766-4825
EMAIL: LEASINGAML@AOL.COM;
JDEJESUS@EFONALLEDAS.COM
14. Pyramid Walden Company Rent $327,666
The Clinton Exchange; Kelly Bewley
4 Clinton Square
Syracue, NY 13202-1078
Tel: 315-422-7000
Fax: 315-472-4035
EMAIL: KELLYBEWLEY@PYRAMIDMG.COM
15. 156 Reade Street House LLC Rent $318,750
c/o Mark J. Provost Provost Financial
Consulting Ltd
10 High St Unit B
South Kingston, RI 02879
Tel: 401-533-9500
Fax: 401-533-9500
401-792-0100
16. Tanger Properties Limited Rent $314,870
Partnership
Attn: Legal Department; Bibbit Mason
3200 Northline Avenue, Suite 360
Greensboro, NC 27408
Tel: 336-292-3010
Fax: 336-852-1407
EMAIL: BIBBIT.MASON@TANGEROUTLETS.COM
17. IMRE, LLC Trade Payable $302,415
Taylor Zebron
210 W. Pennsylvania Ave
FL 7
Baltimore, MD 21204
Tel: 410-821-8220
Fax: 410-821-5619
EMAIL: TAYLORZ@IMRE.COM
18. AT&T Inc. Trade Payable $302,325
Attn: AT&T c/o Bankruptcy
4331 Communications Dr
FLR 4W
Dallas, TX 75211
Tel: 888-827-3238
Fax: 866-486-8223
19. IRA Green Inc. Trade Payable $292,092
Mike McAllister
177 Georgia Avenue
Providence, RI 02905
Tel: 401-467-4770
Fax: 401-467-5557
EMAIL: MMCALLISTER@IRAGREEN.COM
20. Oxford Properties Retail Rent $278,706
Holdings II Inc.
Attn: Vice President, Real Estate
Management Legal Department
Oxford Properties Group
Tori Nixon
Royal Bank Plaza
North Tower, 200 Bay Street
Suite 900
Toronto, ON M5J 2J2
Canada
Tel: 416-868-3692
EMAIL: TNIXON@OXFORDPROPERTIES.COM
21. David Lynch Foundation Charitable $253,892
Attn: Jessica Harris and Donation
Bill Goldstein Payable
Erik Martin
228 East 45th St 15 Floor
New York, NY 10017
Tel: 212-644-9880
Fax: 641-472-1165
EMAIL: ERIK@DLFLIVE.ORG;
JESSICA@DLFLIVE.ORG
22. MAOC Mall Holdings LLC Rent $243,482
Mall of America Management Office
Attn: Kathleen Hayden Corporate
Counsel at Mall of America
Ashley Hofmann
2131 Lindau Lane, Suite 500
Bloomington, MN 55425
Tel: 952-883-8810
Fax: 952-883-8683
EMAIL: ASHLEY.HOFMANN@MOA.NET
23. Pennsylvania Real Estate Rent $224,568
Investment Trust
Attn: VP, Legal - Johanna Didio
Paula Charles
200 South Broad Street
The Bellevue, Third Floor
Philadelphia, PA 19102
Tel: 215-875-0700
Fax: 215-546-7311
EMAIL: JOHANNA.DIDIO@PREIT.COM;
CHERRYHILLBOOKKEEPER@PREITCOM;
PAULA.CHARLES@PREIT.COM
24. IHeart Media Inc. Trade Payable $209,394
Whitman, Carolyn
32 Avenue of the Americas
New York, NY 60693
Tel: 212-377-7900
EMAIL: INVOICES@IHEARTMEDIA.COM;
CAROLYNWHITMAN@IHEARTMEDIA.COM
25. Logic Information Systems Inc. Trade Payable $200,400
Kelly Hedrick
3800 American Blvd W#1200
Bloominton, MN 54431
Tel: 763-762-6006
EMAIL: KELLY.HEDRICK@LOGICINFO.COM
26. Town of East Greenwich Taxes $175,894
Attn: Finance Department
Town Hall
125 Main St
East Greenwich, RI 02818
Tel: 401-886-8612 Ext. 1
Fax: 401-886-8612
EMAIL: FINANCE@EASTGREENICH.COM
27. Microsoft Corporation Trade Payable $153,334
Richard Lacra
One Microsoft Way
Redmond, WA 98052-6399
Tel: 425-882-8080
Fax: 425-936-7329
EMAIL: V-RILACR@MICROSOFT.COM
28. FedEx Corporation Trade Payable $152,976
John Roche
3965 Airways Blvd
Module G, 3rd Floor
Memphis, TN 38116-5017
Tel: 800-622-1147
EMAIL: JOHN.ROCHE@FEDEX.COM
29. Magento Inc. Trade Payable $151,833
Rep on Invoice; Shira Shimoni
345 Park Avenue
San Jose, CA 95110
Tel: 310-945-0345
EMAIL: BILLING@MAGENTO.COM
30. Breast Cancer Research Charitable $146,474
Foundation Donation
Chanelle Church Payable
Stepanie Kauffman
28 West 44th Street, Suite 609
New York, NY 10036
Tel: 866-346-3228
Fax: 646-497-0890
EMAIL: CCHURCH@BCRFCURE.ORG;
SKAUFFMAN@BCRFCURE.ORG
ALEX AND ANI: Has Dual-Track Plan After Deal With Lion Capital
--------------------------------------------------------------
Alex and Ani, LLC and its debtor affiliates filed with the U.S.
Bankruptcy Court for the District of Delaware a Disclosure
Statement for the Joint Plan of Reorganization on June 10, 2021.
The Debtors and certain consenting creditors that have executed the
Restructuring Support Agreement (the "RSA"), dated June 9, 2021,
including 100 percent of holders under each of the First Lien
Credit Facility, Second Lien Credit Facility, and Third Lien Credit
Facility, as well as 100 percent of holders of their Existing
Equity Interests, believe the Plan is in the best interests of the
Debtors' Estates.
The Company and Lion Capital began negotiating the terms of the
RSA. The RSA contemplates a standalone restructuring and dual-track
marketing process, supported by consensual access to cash
collateral. While these negotiations were ongoing, the Company,
Lion Capital, and Ms. Rafaelian negotiated a comprehensive
settlement agreement of all outstanding disputes (the
"Settlement"). The Settlement, as incorporated into the RSA,
provides for, among other things: (a) Ms. Rafaelian's sale of her
35 percent interest under the Second Lien Credit Facility to The
Bathing Club LLC (the "Purchaser"); (b) Lion Capital's sale to
Purchaser of 35 percent of the face amount of the first lien
obligations under the First and Third Lien Credit Agreement; (c)
the dismissal and withdrawal of certain outstanding litigation with
prejudice; and (d) mutual releases.
The Plan contemplates a restructuring of the Debtors through either
(a) the implementation of a stand-alone restructuring (the
"Stand-Alone Restructuring") or (b) an orderly sale of all or
substantially all of the Debtors' assets via a Sale Transaction.
The Plan contemplates the following transactions under the Stand
Alone Restructuring:
* The issuance of the New Common Equity;
* Except to the extent the holder of an Allowed Secured Credit
Facility Claim agrees to less favorable treatment, the holders of
an Allowed Secured Credit Facility Claims will receive its Pro Rata
share of [] percent of the New Common Equity (subject to dilution
by the Management Incentive Plan);
* The entrance by the Reorganized Debtors into the Exit
Facility to make distributions under the Plan and to provide
incremental liquidity; and
* Existing Equity Interests in the Debtors being canceled and
extinguished.
Under the Sale Transaction, the Debtors will conduct a sale of all
or substantially all of the Debtors' assets. The Sale Transaction
contemplates the following transactions:
* Commencement and completion of a sale and marketing process
to solicit bids for the Sale Transaction, in accordance with the
Bidding Procedures;
* Subject to approval by the Court, entry into the Asset
Purchase Agreement with the successful bidder;
* Except to the extent the holder of an Allowed Secured Credit
Facility Claim agrees to less favorable treatment, the holders of
an Allowed Secured Credit Facility Claims will receive its Pro Rata
share of the Sale Proceeds Recovery;
* Selection by the Debtors of the Plan Administrator who will
act in the fiduciary capacity as a board of managers or directors.
As of the Effective Date, the Plan Administrator would become the
sole manager, director, and officer of Reorganized Debtors and Wind
Down Debtors and act to wind down the business affairs of the
Debtors and the Wind Down Debtors' Estates; and
* The Plan Administrator will establish each of the
Distribution Reserve Accounts in accordance with Article VIII of
the Plan and administer the distribution thereof to holders of
Allowed Claims;
Class 4 consists of Go-Forward Vendor Claims. Each holder of an
Allowed Go-Forward Vendor Claim will receive its Pro Rata share
(not to exceed the amount of such holder's Allowed Go-Forward
Vendor Claim) of [].
Class 5 consists of General Unsecured Claims. Each holder of an
Allowed General Unsecured Claim will receive its Pro Rata share
(not to exceed the amount of such holder's Allowed General
Unsecured Claim) of [].
Class 8 consists of Existing Equity Interests. On the Effective
Date, each holder of an Existing Equity Interest will have such
Interest cancelled, released, and extinguished and without any
distribution.
If the Stand-Alone Restructuring occurs, the Plan and distributions
will be funded by the following sources of Cash and consideration:
(a) Cash on hand, (b) the issuance and distribution of New Common
Equity, (c) proceeds from the Exit Facility, if any, and (d)
proceeds from all Causes of Action not settled, released,
discharged, enjoined, or exculpated under the Plan or otherwise on
or prior to the Effective Date.
If the Sale Transaction occurs, the Plan and distributions
thereunder will be funded by the following sources of Cash and
consideration: (a) Cash on hand; (b) the Sale Proceeds; and (d) and
proceeds from all Causes of Action not acquired pursuant to the
Sale Transaction that are not settled, released, discharged,
enjoined, or exculpated under the Plan or otherwise on or prior to
the Effective Date.
A full-text copy of the Disclosure Statement dated June 10, 2021,
is available at https://bit.ly/3ghvBLP from PacerMonitor.com at no
charge.
Proposed Co-Counsel to the Debtors:
Joshua A. Sussberg, P.C.
Allyson B. Smith
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
- and -
Alexandra Schwarzman
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, Illinois 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
- and -
Domenic E. Pacitti
Michael W. Yurkewicz
KLEHR HARRISON HARVEY BRANZBURG LLP
919 North Market Street, Suite 1000
Wilmington, Delaware 19801
Telephone: (302) 426-1189
Facsimile: (302) 426-9193
-and-
Facsimile: (302) 426-9193
KLEHR HARRISON HARVEY BRANZBURG LLP
1835 Market Street, Suite 1400
Philadelphia, Pennsylvania 19103
Telephone: (215) 569-3007
Facsimile: (215) 568-6603
About Alex and Ani LLC
Founded in 2004 by Carolyn Rafaelian, Alex and Ani has become a
premier jewelry brand, quickly gaining popularity because of the
novel and customizable nature of its signature expandable wire
bracelet. Alex and Ani has been headquartered in East Greenwich,
Rhode Island since 2014. Since opening its first retail store in
Newport, Rhode Island in 2009, Alex and Ani has expanded to over
100 retail store locations across the United States, Canada, and
Puerto Rico. On the Web: HTTP://www.alexandani.com/
Alex and Ani LLC and its affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-10918) on June 9, 2021. In its
petition, Alex and Ani listed assets and liabilities of $100
million to $500 million each.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Klehr Harrison Harvey Branzburg LLP as local bankruptcy
counsel; and Portage Point Partners, LLC, as financial advisors and
investment bankers. Kurtzman Carson Consultants LLC is the notice
and claims agent.
ALEX AND ANI: Seeks Cash Collateral Access
------------------------------------------
Alex and Ani, LLC and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware for authority to use cash
collateral and provide adequate protection.
The Debtors require immediate access to liquidity to ensure that
they are able to continue operating during these Chapter 11 cases,
preserve the value of their estates for the benefit of all parties
in interest, and pursue value-maximizing restructuring transactions
as contemplated by the Restructuring Support Agreement and Plan.
As of the Petition Date, the Debtors have approximately $127.4
million in the aggregate principal amount of outstanding funded
debt obligations, including capitalized interest, arising under (a)
the First Lien Credit Facility, (b) the Second Lien Credit
Facility, and (c) the Third Lien Credit Facility.
The Debtors entered into a Credit Agreement, dated as of January
29, 2016, by and among Alex and Ani, LLC, as borrower, A and A
Shareholding Co., LLC, as holdings, the Debtor guarantors party
thereto, Bank of America, N.A., as predecessor to Wilmington Trust,
National Association, as administrative agent, and the other
lenders party thereto. At the time of its issuance, the First Lien
Credit Agreement provided for a $175 million senior secured first
lien term loan facility and a $30 million senior secured first lien
revolving credit facility, each secured by a first priority lien on
substantially all of the assets of the Borrower and Guarantors,
subject to certain exclusions.
As of the Petition Date, there is $20.43 million of principal
outstanding under the First Lien Credit Facility and $81.80 million
of principal outstanding under the Third Lien Credit Facility, each
including capitalized interest. Both the First Lien Credit Facility
and the Third Lien Credit Facility mature on January 31, 2022.
On September 13, 2019, the Debtors entered into a Second Lien
Credit Agreement, dated as of September 13, 2019, by and among
Borrower, as borrower, A and A Shareholding Co., LLC, as holdings,
the Guarantors, as guarantors, Wilmington Trust, National
Association, as administrative agent, and the other lenders party
thereto. The Second Lien Credit Agreement provides for a $20
million term loan facility and is secured by a second priority lien
on all of the Collateral. As of the Petition Date, there is $25.20
million of principal outstanding, including capitalized interest,
under the Second Lien Credit Facility. The Second Lien Credit
Facility matures on January 31, 2022.
The Debtors seek to use cash collateral to finance their working
capital needs and for any other general corporate purposes, pay
related transaction costs, fees, liabilities, and expenses
(including all professional fees and expenses) and other
administration costs incurred in connection with and for the
benefit of the Chapter 11 Cases (including the Adequate Protection
Payments, and pay any prepetition obligations authorized to be paid
pursuant to any "First Day Order" entered by the Court, in each
case solely to the extent consistent with the Budget and the
Interim Order.
The Debtors propose to provide each Prepetition Agent, on behalf of
itself and for the benefit of the applicable Prepetition Lenders,
as applicable, adequate protection liens, adequate protection
superpriority claims, fees and expenses, adequate protection
payments, budget and variance reporting, and access to records.
A copy of the motion is available for free at
https://bit.ly/3pI77yq from PacerMonitor.com.
About Alex and Ani LLC
Founded in 2004 by Carolyn Rafaelian, Alex and Ani --
http://www.alexandani.com/-- has become a premier jewelry brand,
quickly gaining popularity because of the novel and customizable
nature of its signature expandable wire bracelet. Alex and Ani has
been headquartered in East Greenwich, Rhode Island since 2014.
Since opening its first retail store in Newport, Rhode Island in
2009, Alex and Ani has expanded to over 100 retail store locations
across the United States, Canada, and Puerto Rico.
Alex and Ani LLC and its affiliates sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-10918) on June 9, 2021. In its
petition, Alex and Ani listed assets and liabilities of $100
million to $500 million each.
The Debtors tapped Kirkland & Ellis LLP as general bankruptcy
counsel; Klehr Harrison Harvey Branzburg LLP as local bankruptcy
counsel; and Portage Point Partners, LLC, as financial advisors and
investment bankers. Kurtzman Carson Consultants LLC is the notice
and claims agent.
ALH PROPERTIES: Wins Cash Collateral Access
-------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, has authorized ALH Properties No. Fourteen, LP to
use cash collateral on an interim basis in accordance with the
budget, with a 10% variance and provide adequate relief.
The Debtors have requested immediate entry of the Interim Order
pursuant to Bankruptcy Rule 4001(b)(2) and Bankruptcy Local Rules
4001-1, 4002-1, and 9013-1, and good cause has been shown for entry
of the Interim Order. The Debtor would not have sufficient
available sources of working capital to operate its business in the
ordinary course or to maintain its property without the use of the
cash in the Operating Account, including potential cash collateral
of Massachusetts Mutual Life Insurance Company, which includes cash
proceeds and other cash equivalents, and all cash and cash
equivalent proceeds of the Lender's prepetition collateral.
As adequate protection for the Debtor's use of the Cash Collateral,
the Lender is granted valid, binding, enforceable and automatically
perfected liens on all property that is currently subject to any
prepetition liens in favor of the Secured Party, to the same
extent, priority and validity of such prepetition liens. The
Replacement Liens are effective as of the Petition Date, without
the necessity of the execution by the Debtor of any security
agreement, pledge agreement, financing statement or any other
documents, or the necessity of any kind of financing statement or
other filing by the Lender.
These events constitute an Event of Default:
a. If the Debtor's actual operating disbursements under the
Budget exceed the amounts set forth in the Budget by more than the
Budget Variance without the prior written consent of the Lender or
further authority from the Court;
b. If the Debtor pays obligations not shown on the Budget
without the prior written consent of the Lender or further
authority from the Court;
c. If any representation made by the Debtor after the
commencement of the Chapter 11 Case in any report or financial
statement delivered to the Lender proves to have been false or
misleading in any material respect as of the time when made or
given (including by omission of material information necessary to
make such representation, warranty or statement not misleading);
d. The Debtor fails to timely provide the information required
under Paragraph 4 of the Interim Order and such failure continues
for more than three business days following written request by
Lender;
e. If a trustee or examiner, with authority to affect the
operation of the Debtor's business, is appointed in the Chapter 11
Case without the Lender's consent;
f. If the Chapter 11 Case is converted to a case under chapter
7 without the Lender's consent; or
g. If the Chapter 11 Case is dismissed without the Lender's
consent.
The final hearing on the matter is scheduled for June 23 at 10 a.m.
Objections are due June 18.
A copy of the order is available for free at https://bit.ly/3cBKW7V
from PacerMonitor.com.
About ALH Properties No. Fourteen, LP
ALH Properties No. Fourteen, LP is the owner and operator of the
Embassy Suites Discovery Green hotel in downtown Houston, Tex. The
Debtor is a full service hotel with 262 guest suites, 3,600 square
feet of meeting space, and a number of services and amenities.
Those services include a restaurant, room service, a bar, gift
shop, and parking.
It sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D. Tex. Case. No. 21-31797) on May 31, 2021. In the
petition signed by Nick Massad, Jr., president and general partner,
the Debtor disclosed up to $50 million in both assets and
liabilities.
Porter Hedges LLP is the Debtor's counsel.
Massachusetts Mutual Life Insurance Company, as Lender, is
represented by:
Charles A. Beckham, Jr., Esq.
Haynes and Boone, LLP
1221 McKinney Street, Suite 4000
Houston, TX 77010
AMERICAN AGCREDIT: S&P Assigns 'BB+' Rating on Preferred Stock
--------------------------------------------------------------
S&P Global Ratings assigned 'BBB+' long-term issuer credit ratings
to American AgCredit FLCA and American AgCredit PCA. The outlook on
both is stable. S&P also assigned a 'BBB' rating to American
AgCredit FLCA and American AgCredit PCA's announced joint issuance
of subordinated debt, and a 'BB+' rating to American AgCredit ACA's
announced issuance of preferred stock.
S&P said, "Our ratings on American AgCredit FLCA and American
AgCredit PCA reflect our view that they are core subsidiaries to
the parent, American AgCredit ACA (BBB+/Stable/--). We expect
American AgCredit ACA to support both American AgCredit FLCA and
American AgCredit PCA under all foreseeable circumstances, if
needed. Therefore, our issuer credit ratings on American AgCredit
FLCA and American AgCredit PCA are equal to the 'bbb+' group
stand-alone credit profile (SACP).
"The stable outlook mirrors the parent, American AgCredit ACA. As
long as the rating on the parent is unchanged, we would change our
ratings on American AgCredit FLCA and American AgCredit PCA only if
we were to alter our view of the subsidiaries' strategic importance
to their parent, which we view as very unlikely. Our stable outlook
on American AgCredit ACA reflects our expectation that over at
least the next two years, AAC will continue to report good
earnings, maintain an S&P Global Ratings RAC ratio of 10%-15%, and
have uninterrupted access to funding and liquidity from CoBank.
Additionally, we expect asset quality will remain solid as the U.S.
emerges from the COVID-19 pandemic.
"We could lower our ratings on American AgCredit FLCA and American
AgCredit PCA if we were to downgrade American AgCredit ACA.
Although it is highly unlikely, we could also downgrade American
AgCredit FLCA and American AgCredit PCA if we no longer considered
these entities core subsidiaries of American AgCredit ACA.
"We could raise our ratings on American AgCredit FLCA and American
AgCredit PCA if we were to upgrade the rating on American AgCredit
ACA, reflecting its increased ability to support the subsidiaries
if needed."
AMERICAN AXLE: Egan-Jones Keeps B- Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company, on May 26, 2021, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by American Axle & Manufacturing Holdings, Inc. EJR
also maintained its 'B' rating on commercial paper issued by the
Company.
Headquartered in Detroit, Michigan, American Axle & Manufacturing
Holdings, Inc. operates as an automotive supplier of driveline and
drivetrain systems and related components for light trucks, SUVs,
passenger cars, crossover, and commercial vehicles.
APACHE CORP: Fitch Affirms 'BB+' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings affirmed Apache Corporation's Long-Term Issuer
Default Rating (IDR) at 'BB+', and senior unsecured ratings at
'BB+'/'RR4' with a Stable Outlook. The Short-Term IDR and CP
ratings have also been withdrawn at 'B'. In addition, Fitch
assigned a 'BB+' Long-Term IDR to APA Corporation following the
recently concluded company reorganization.
Apache's ratings reflect the company's liquids-weighted profile and
above average unit economics; exposure to higher Brent pricing and
production sharing contracts (PSCs), which have favorable
cost-recovery features in a downturn; light near-term maturity
wall; debt repayment plan; and high potential in Suriname.
Rating concerns center on elevated debt; reductions in Apache's
asset base after several years of restructuring; LOCs associated
with North Sea decommissioning liabilities; and the need to spend
on Suriname appraisal and development over the next few years,
albeit at lower levels due to the Total SE's joint venture (JV).
The Short-Term IDR and CP ratings have been withdrawn because
Apache is no longer issuing CP, and there is no Fitch-rated debt
outstanding under that program.
KEY RATING DRIVERS
Higher Debt: Apache's ratings reflect high debt levels relative to
its asset base. Fitch-calculated LTM debt/EBITDA leverage was 3.8x
at March 31, 2021; consolidated debt was $9.4 billion ($8.1 billion
excluding Altus Midstream Company debt and preferreds); and proved
reserves were 874 million barrels of oil equivalent (boe), having
declined in four of the last five years from just under 1.6 billion
boe in 2015. Similarly, all-in production declined to 382.4
thousand barrels of oil equivalent per day (kboepd) (342.6kboepd
net of Egypt NCI) in 1Q21, reflecting the cumulative impact of
restructurings/asset sales, and the impacts of Alpine High.
Focus on Debt Repayment: Management remains focused on debt
repayment, which is supported by higher oil prices and a reduced
capex program that should increase FCF. While capital is slightly
below maintenance levels, moderate increases in rigs could be added
to the Permian in 2H21 if supportive pricing persists. Given
Apache's relatively light maturity stack of $337 million of debt
over the next few years, debt reductions will likely include open
market repurchases and tenders.
Egypt Modernization: Apache announced a preliminary agreement to
modernize its PSCs for its Egypt concessions. Proposed changes
should speed approvals and the recovery of prior investments.
Modernization could increase the Egypt rig count from five, but
Fitch expects capex increases to be modest. Changes are still
subject to ratification by Egypt's Parliament. Apache is also
evaluating potential third-party capital at Alpine High.
LOCs Reduce Liquidity: As a fallen angel, Apache is required to
issue GBP573 million in LOCs (around $790 million) to support North
Sea decommissioning. The LOCs were issued against the company's
$4.0 billion unsecured revolver and reduce its capacity by a like
amount. While Fitch anticipates these are unlikely to be converted
to debt, they represent a structural reduction in Apache's revolver
availability of around 20%, all else equal.
Modest Hedge Profile: Apache recently added hedges for around
one-third of its oil production for the remainder of 2021 to
support debt reduction. This includes a combination of West Texas
Intermediate (WTI) and Dated Brent fixed price swaps, as well as
Midland-Cushing and Henry Hub-Waha basis spreads. Apache
historically maintains limited hedging programs given its
preference for open market exposure.
Suriname Progress: Apache's partnership with Total to develop
Suriname has eased concerns about spending on a large project.
Total became operator on Block 58 earlier this year and will carry
87.5% of the first $10 billion in gross spending, 75% of the next
$5 billion and 62.5% above that, along with other payments and
royalties. First oil is not expected until 2025 according to the
operator.
Ratings Equalized Under PSL: Apache's reorganization created
earlier concerns about value leakage given Suriname assets were
moved out from existing Apache bondholders. A $1.3 billion
intercompany note was created from APA Corp. to Apache to help
offset this. The note is also guaranteed by the subsidiaries sold
by Apache to APA Corp. Under Fitch's parent-subsidiary linkage
(PSL) criteria, Fitch views Apache Corporation as the stronger
entity, and views the overall linkage between the two as strong,
based on robust operational and strategic ties, resulting in
equalization of the ratings.
DERIVATION SUMMARY
Apache's position is mixed compared with other peers in the
independent exploration and production (E&P) space. In terms of
size, the company shrank over the last few years due to
restructurings and asset sales (1Q21: 382.4kboepd), but is still
larger than diversified peers, such as Marathon Oil Corporation
(345kboepd), Hess Corporation (332.8kboepd) and Continental
Resources Inc. (307.9kboepd). However, it is smaller than Ovintiv
Inc. (538.3kboepd) and post-merger Devon Energy Corporation or
Pioneer Natural Resources Co. as of YE 2020. Fitch anticipates
Apache's size may shrink further in the near term as it keeps a lid
on capex to maximize FCF for debt repayment.
As calculated by Fitch, Apache's cash netbacks were above
diversified peer average at YE 2020 ($12.2/boe) due to its high
percentage of liquids and black oil mix, and exposure to
international Brent-linked pricing, but remain below that of
Permian pure plays, such as Pioneer and Diamondback Energy, Inc.
Apache's overall portfolio diversification declined somewhat with
asset sales, but still compares well with E&P peers, and includes
international (Egypt and the North Sea), an anchor position in the
Permian and highly prospective Suriname. The company's debt/EBITDA
leverage metrics are weak compared with peers (3.8x LTM March 31,
2021) given higher debt levels and lower production. Liquidity is
adequate, but is reduced due to the impact of LOC postings. No
parent/subsidiary, Country Ceiling or operating environment
considerations constrain the rating.
KEY ASSUMPTIONS
-- Base Case WTI oil price of $55/barrel in 2021, and $50/barrel
over the remainder of the forecast;
-- Henry Hub natural gas prices of $2.75/thousand cubic feet
(mcf) in 2021 and $2.45/mcf over the remainder of the
forecast;
-- Consolidated capex (including NCI Egypt and Altus) of $1.33
billion in 2021 and 2022, which then steps up to $1.53 billion
in 2023 and $1.64 billion in 2024;
-- Majority of FCF dedicated to debt repayment in 2021 and 2022;
-- Dividends flat in 2021/2022 and resume growth beginning 2023;
-- All-in production of approximately 398kboepd, which declines
gently in 2022 before resuming modest growth in 2023.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Execution of material gross debt reduction;
-- Sustained standalone debt/EBITDA leverage at or below 2.5x;
-- Sustained FFO leverage below 3.0x;
-- E&P debt/flowing barrel below $17,500/barrel;
-- Greater visibility on Suriname cash flow contributions to
Apache entities.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Sustained standalone debt/EBITDA above 3.0x;
-- Sustained FFO leverage above 3.5x;
-- E&P debt/flowing barrel above $21,000/barrel.
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
Liquidity Adequate: Apache's liquidity was adequate as of March 31,
2021. Cash and equivalents were $281 million, $51 million of which
was related to Altus. There were $65 million in drawings against
the company's $4.0 billion unsecured revolver, GBP573 million in
LOCs, and another $20 million in other LOCs drawn against the
facility, for total availability of 78% on the revolver. The GBP
LOCs support the company's environmental abandonment obligations
for its North Sea properties. The revolver matures in March 2024,
and has a $3 billion LOC sublimit, with a one-year extension at
Apache's option.
Separately, Altus has an $800 million senior unsecured credit
facility due November 2023. That facility is nonrecourse to Apache
or any of Apache's subsidiaries and lacks cross defaults to the
parent, but had $657 million in borrowings and $2 million in LOCs
outstanding at March 31, 2021.
Apache's near-term maturities are moderate. Covenant restrictions
across Apache's debt instruments are light and include a 60%
consolidated debt-to-capitalization maximum ratio for its revolver,
as well as limitations on liens (secured debt capped at 15% of
Apache's consolidated net tangible assets). Other restrictions
include limitations on mergers, asset sales, transactions with
affiliates and guarantees. Events of default include nonpayment on
more than $150 million in debt obligations on the part of the
borrower or its restricted subsidiaries, and a change in control,
defined as the acquisition of an ownership stake of more than
one-third of the company's common stock by a person or persons. The
debt-to-capitalization calculation excludes noncash writedowns and
impairments.
ISSUER PROFILE
Apache is a mid-sized, diversified E&P with core operations in the
U.S. (Permian) and international (Egypt, U.K. North Sea,
Suriname).
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.
APOLLO COMMERCIAL: S&P Alters Outlook to Stable, Affirms 'B+' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on Apollo Commercial Real
Estate Finance Inc. to stable from negative and affirmed its 'B+'
issuer credit and senior secured debt ratings on the company.
The outlook revision mainly reflects S&P's view that the likelihood
of substantial further deterioration in ARI's loan portfolio has
lessened in the wake of the pandemic, with the widespread
availability of vaccines and the re-opening of the U.S. economy.
ARI's realized losses on investments in 2020 was $47.6 million on a
total portfolio of $6.8 billion, net of allowances. The largest
loss in 2020--$15 million on a hotel in New York City--was
restructured in second-quarter 2020 and is on accrual status. The
company did not realize any losses in first-quarter 2021.
As of March 31, 2021, the loan loss allowance accounted for 3.06%
of the total amortized portfolio cost, down from 4.05% a year
earlier. While the level of loan loss allowance has declined in the
past 12 months, this compares unfavorably with other rated
commercial real estate lender peers. ARI currently has four loans
with specific allowances with a total amortized cost of $404.1
million, net of $175 million of specific allowances. The largest of
the four, as measured by adjusted cost-- an urban pre-development
in Brooklyn, received an additional $17.5 million of funding to
acquire air rights and continues to be developed into a multifamily
property.
ARI's portfolio has a higher allocation of subordinated loans than
peers and some relatively risky loan types, such as predevelopment
and construction loans. Further, the company has substantial
exposure to office (26% of total portfolio as of March 31, 2021)
and hotel properties (23% of total portfolio as of the same date)
that have been hurt by the pandemic. Some office properties,
especially in dense urban areas like New York City, could be
negatively affected over the longer term. In 2020, the company sold
three construction loans totaling $122 million, which eliminated
over $250 million of future funding commitments. As of March 31,
2021, total future funding commitments were $1.4 billion, down from
$2.0 billion at the end of 2019.
As of March 31, 2021, leverage was 2.1x, up from 1.57x at year-end
2019. Rising leverage is partially offset by lower risk
first-mortgage loans. S&P expects subordinated loans--which
currently represents 16% of the total portfolio, down from 21% in
2018--to decline as a proportion of the portfolio.
ARI's exposure to short-term secured funding and potential margin
calls in a stress scenario weighs on the rating, but the company
has taken measures to diversify its funding and reduce margin call
exposure. As of March 31, 2021, secured funding represents 72% of
total debt, down from 77% at the same time in 2020. The issuance of
the $300 million incremental term loan in 2021 helps diversify the
ARI's funding, but it further limits its balance sheet flexibility
because of the unencumbered asset covenant. ARI was also able to
issue a private securitization with Barclays in second-quarter
2020, which exchanged short-term margin call risk for a
loan-to-value test starting at year-end 2021. As of March 31, 2021,
ARI had $294 million in cash and $62 million of borrowing
capacity.
S&P said, "The stable outlook reflects our expectation that, over
the next year, ARI—helped by the rebounding economy—will report
mostly stable asset quality trends while maintaining adequate
liquidity and leverage of around 2.0x-2.5x, as measured by debt to
adjusted total equity (ATE). Pandemic-related changes and pressures
in commercial real estate, such as in the office market, may still
create challenges for the company and other lenders in the next few
years, but we expect ARI to be able to work through those over time
while maintaining leverage, funding, and liquidity at current
levels.
"We could lower the rating in the next year if asset quality
deteriorates meaningfully, particularly if that leads to margin
calls on ARI's funding facilities and liquidity pressures, or
leverage rises above 2.75x.
"An upgrade is unlikely over the next 6-12 months. Over time, we
could raise the rating if the company further reduces the risk in
its portfolio, continues to reduce exposure to secured financing
and margin call risk, and maintains sufficient liquidity."
ARCHBISHOP OF AGANA: Committee Taps Hiller Law as Special Counsel
-----------------------------------------------------------------
The official committee of unsecured creditors of Archbishop of
Agana seeks approval from the U.S. Bankruptcy Court for the
District of Guam to employ Hiller Law, LLC as special counsel.
The committee needs the firm's legal assistance in connection with
the bankruptcy cases of Boy Scouts of America and Delaware BSA, LLC
pending in the Delaware bankruptcy court.
Hiller Law will be paid at hourly rates ranging from $200 to $395.
The firm will also be reimbursed for out-of-pocket expenses
incurred.
Adam Hiller, Esq. a partner at Hiller Law, 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:
Adam Hiller, Esq.
Hiller Law, LLC
1500 N French St.
Wilmington, DE 19801
Tel: (212) 319-4000
Email: ahiller@adamhillerlaw.com
About Archbishop of Agana
Roman Catholic Archdiocese of Agana -- https://www.aganaarch.org/
-- is an ecclesiastical territory or diocese of the Catholic Church
in the United States. It comprises the United States dependency of
Guam. The Diocese of Agana was established on Oct. 14, 1965, as a
suffragan of the Archdiocese of San Francisco, California. It is a
tax-exempt entity (as described in 26 U.S.C. Section 501).
The Archbishop of Agana, also known as the Roman Catholic
Archdiocese of Agana, sought Chapter 11 protection (D. Guam Case
No. 19-00010) on Jan. 16, 2019. Rev. Archbishop Michael Jude
Byrnes, S.T.D., Archbishop of Agana, signed the petition. The
Archdiocese scheduled $22,962,686 in assets and $45,662,941 in
liabilities as of the bankruptcy filing.
The Hon. Frances M. Tydingco-Gatewood is the case judge.
The archdiocese has tapped Elsaesser Anderson, Chtd. as its
bankruptcy counsel and John C. Terlaje, Esq., as its special
counsel.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on March 6, 2019. Stinson Leonard Street LLP,
The Law Offices of William Gavras and Hiller Law, LLC serve as the
committee's bankruptcy counsel, local counsel and special counsel,
respectively.
ARTISAN BUILDERS: Taps Urban Blue Realty as Real Estate Broker
--------------------------------------------------------------
Artisan Builders, LLC received approval from the U.S. Bankruptcy
Court for the District of Arizona to employ Phoenix, Ariz.-based
real estate broker Urban Blue Realty, LLC.
The firm will market for sale these real properties:
a. 16424 E. Desert Vista Trail, Scottsdale;
b. 16425 E. Desert Vista Trail, Scottsdale; and
c. 16414 E. Desert Vista Trail, Scottsdale.
The firm will be paid a fixed and flat fee of $3,000 per parcel of
land while the buyer's agent will be paid a 1 percent commission on
the sales price.
Nicolas Blue of Urban Blue Realty 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:
Nicolas Blue
Urban Blue Realty, LLC
4455 E Camelback Road
Phoenix, AZ 85018
Tel: (480) 900-7204
Email: info@urbanbluerealty.com
About Artisan Builders
Artisan Builders, LLC, a Scottsdale, Ariz.-based full-service
general contractor specializing in custom homes, sought Chapter 11
protection (Bankr. D. Ariz. Case No. 20-07501) on June 24, 2020.
In the petition signed by James Guajardo, manager, the Debtor
disclosed $1 million to $10 million in both assets and liabilities.
Judge Brenda K. Martin oversees the case. The Debtor tapped
Richard W. Hundley, Esq., at The Kozub Law Group, PLC, as its legal
counsel.
ASCENT RESOURCES: Fitch Rates New Eight-Year Unsec. Notes 'B'
-------------------------------------------------------------
Fitch Ratings has assigned a 'B'/'RR4' rating to Ascent Resources
Utica Holdings' proposed eight-year senior unsecured notes.
Proceeds are intended to reduce borrowings under the revolving
credit facility. Ascent's Long-Term Issuer Default Rating is 'B'.
The Rating Outlook is Stable.
Ascent's rating reflects no material debt maturities until 2024 and
expectations of strong FCF over the rating horizon, with proceeds
applied to reduce debt. The rating considers moderate leverage,
average production scale and a robust hedge book mitigating
downside risk. These factors are offset by relatively high firm
transportation costs, which results in netbacks slightly lower than
the median of its peers.
The Stable Outlook reflects a new capital structure providing an
extended runway for debt maturities and stabilization of the
company's production base, which materially reduces capital
spending commitments.
KEY RATING DRIVERS
No Near-Term Maturities: Ascent's next material maturity pro forma
for the note issuance is in April 2024, when the reserve-based loan
(RBL) comes due. This should provide time for the company to
address extending the RBL maturity date and the note maturities
beginning in 2025. Ascent has material annual maturities from 2025
to 2029, which also need to be addressed in conjunction with the
RBL extension.
Pivoting to FCF Generation: The company historically generated FCF
deficits as it spent heavily on capex to reach a production profile
of greater than 2 billion cubic feet equivalent per day (bcfed) to
attain sufficient scale to reduce fixed costs, primarily from
midstream obligations. Fitch expects future production growth to be
moderate, as the company has reached this level. Ascent expects its
capex requirements to decline from greater drilling efficiencies,
technological improvements in frac operations, reduction in
drill-outs and facility construction cycle times, and an
approximately 15% reduction in vendor costs. Fitch expects Ascent,
which just turned FCF positive in 2020, could generate
approximately $150 million of average annual FCF over the forecast
horizon.
Improving Liquidity: Ascent reduced borrowings on its RBL to $619
million pro forma for the note issuance from $1,168 million as of
Sept. 30, 2020 through note issuance and application of FCF
proceeds. Fitch expects further reductions on the revolver through
the application of future FCF. Pro forma liquidity of $1,089
million should be more than adequate to meet near-term financing
needs.
Strong Operational Performance: The company operates in the Utica
Basin and holds approximately 334,000 net acres. Ascent estimates
it has greater than 15 years of inventory and is capable of
maintaining a production goal of greater than 2.0bcfed. Production
grew rapidly to 1,791 million cubic feet equivalent per day
(mmcfed) in 1Q21 from 755mmcfed in 2017. This was due to a
combination of development spending and acquisitions.
Fitch believes well performance compares favorably with other Utica
operators. The company is operating with three rigs and one frac
crew, which allows for operational efficiencies to reduce drilling
costs. Ascent also owns royalty interests in approximately 72,000
fee mineral interests, which provides upside through enhanced
margins and could be monetized in the future.
Netbacks in Line: Ascent's netbacks after production, G&A and
interest are in line with the peer group median. Firm and
transportation costs are relatively high compared with peers,
although Fitch believes the company can meet these volumetric
commitments at current production levels. The various contracts
expire over time until 2032; therefore, Fitch does not expect
material savings in the near term. However, lease operating
expenses are moving lower and the repayment of debt should reduce
interest expense over time, which should lead to higher netbacks.
Strong Hedging Program: Ascent entered into multiyear hedge
positions, which include 78% of Fitch's expected natural gas
production hedged through 2021 and 55% in 2022. Fitch believes the
company's hedging strategy is one of the strongest among natural
gas peers. The hedges reduce risk from lower natural gas prices,
allowing for greater certainty in FCF projections. Fitch considers
the hedging strategy a critical component of the company's desire
to use FCF to reduce leverage over the forecast horizon.
DERIVATION SUMMARY
Ascent's debt/EBITDA of 3.2x as of March 31, 2021 is slightly
higher than CNX Resources Corporation (BB/Positive) at 2.6x and
Encino Acquisition Partners Holdings, LLC (B/Stable) at 2.6x.
Comstock Resources Inc. (CRK, B/Positive) is higher at 3.5x, while
Ascent is more in line with Vine Energy Inc. (B/Stable) at 3.2x.
Ascent is a midsize natural gas producer with production of
1,791mmcfed, which is lower than Southwestern Energy Company
(BB/Stable) at 2,994mmcfed and EQT Corporation (BB+/Stable) at
4,613mmcfed. The company is larger than both CNX at 1,562mmcfed and
CRK at 1,267mmcfed.
Ascent generated unhedged netbacks of $0.39/thousand cubic feet
equivalent (mcfe) in 2020, which is slightly below the median of
its peers. The company trails CRK, which has a significant cost
advantage resulting in a netback of $0.77/mcfe, Vine at $0.63/mcfe
and CNX at $0.55/mcfe. Ascent's netback is higher than Southwestern
at $0.30/mcfe and EQT at $0.36/mcfe.
KEY ASSUMPTIONS
Fitch's key assumptions within its rating case for the issuer
include:
-- A Henry Hub natural gas price of $2.75 per thousand cubic feet
(mcf) in 2021 and $2.45/mcf over the long term;
-- A West Texas Intermediate oil price of $55/barrel (bbl) in
2021 and $50/bbl over the long term;
-- Production flat in 2021 and growing by low single digits over
the long term;
-- Capex of $590 million in 2021 and $570 million to $590 million
over the forecast horizon.
Key Recovery Rating Assumptions
The recovery analysis assumes Ascent would be reorganized as a
going-concern in bankruptcy rather than liquidated. Fitch assumed a
10% administrative claim.
Going-Concern Approach
Ascent's going-concern EBITDA assumption reflects Fitch's
projections under a stressed case price deck, which assumes Henry
Hub natural gas prices of $1.90/mcf in 2020, $1.65/mcf in 2021,
$2.00/mcf in 2021 and $2.25/mcf in 2022.
The going-concern EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganization EBITDA level upon which Fitch
bases the enterprise valuation. The going-concern EBITDA assumption
uses 2023 EBITDA, which reflects the decline from current pricing
levels to stressed levels and then a partial recovery coming out of
a troughed pricing environment.
An enterprise valuation multiple of 4.0x EBITDA is applied to the
going-concern EBITDA to calculate a post-reorganization enterprise
value. The choice of this multiple considered the following
factors:
-- The historical bankruptcy case study exit multiples for peer
companies ranged from 2.8x to 7.0x, with an average of 5.2x
and a median of 5.4x;
-- There has only been a handful of M&A transactions in the
Appalachian Basin in the past 12 months, and these
transactions were small in scale. Southwestern acquired
Montage Resources Corporation for $927 million in August 2020,
which implied a 3.4x multiple on LTM EBITDA;
-- Production per flowing barrel was $9,573, well below the
historical average of approximately $12,000, while proved (1P)
reserves per barrel was $2 in the Appalachian Basin. The Utica
Basin wells generally perform strongly, but recent recoveries
of exploration and production companies are weak given the
lack of demand for oil and natural gas assets and the
inability to raise capital;
-- Fitch uses a multiple of 4.0x to estimate a value for Ascent
given the recent recoveries in the sector, offset by the more
attractive assets relative to Montage;
Liquidation Approach
-- The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or
liquidation processes conducted during a bankruptcy or
insolvency proceeding and distributed to creditors. Fitch
considers valuations, such as SEC PV-10, or present value of
estimated future oil and gas revenue, net of estimated direct
expenses discounted at an annual discount rate of 10%, and M&A
transactions for each basin including multiples for production
per flowing barrel, 1P reserves valuation, value per acre and
value per drilling location.
-- The revolver is assumed to be 90% drawn upon default, with the
expectation that commitments would be reduced during a
redetermination. The revolver is senior to the senior secured
second-lien term loans and the senior unsecured bonds in the
waterfall;
-- The allocation of value in the liability waterfall results in
recovery corresponding to 'RR1' recovery for the first-lien
revolver, a 'RR2' recovery for the second-lien term loan to
reflect explicit subordination to the revolver and a recovery
corresponding to 'RR4' for the senior unsecured guaranteed
notes.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Generation of material FCF, with proceeds applied to debt
reduction and liquidity enhancement;
-- Midcycle debt/EBITDA of below 2.5x and adjusted FFO leverage
below 3.0x;
-- Ability to access unsecured capital markets;
-- Demonstrated commitment to the stated financial policy,
including the hedging program.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Midcycle debt/EBITDA above 3.5x and adjusted FFO leverage
above 4.0x;
-- Inability to generate FCF over the cycle or a material
allocation of FCF proceeds away from debt reduction;
-- Weakening of unit cost profile or capital returns.
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
Ascent had cash on hand of $6 million as of March 31, 2021, and
$1,083 million of availability under its RBL pro forma for the note
issuance for total liquidity of $1,089 million. The revolver
matures on April 1, 2024. The facility has two financial
maintenance covenants: a debt/EBITDA covenant in which the ratio
cannot be more than 4.0x and a current ratio covenant in which the
ratio cannot be less than 1.00 to 1.00. The company is incompliance
with both covenants.
The next debt maturity is not until April 2024 when the revolver is
due. The company will also have successive maturities from 2025 to
2029 with the second-lien notes and remaining senior notes.
Given reduced capital spending plans and a robust hedging program,
Fitch expects Ascent to generate substantial FCF over the rating
horizon. Management stated its plan is to apply FCF to debt
reduction. Fitch believes the reduction in revolver borrowings over
this period would greatly enhance liquidity and allow the company
to address the note maturities due beginning in 2025.
ISSUER PROFILE
Ascent Resources Utica Holdings is an explorer and producer of
natural gas and oil focused in the Utica Shale in southern Ohio.
The company has approximately 334,000 net leasehold acres and
72,000 mineral acres.
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.
ASTORIA ENERGY: S&P Alters Outlook to Negative, Affirms 'BB-' ICR
-----------------------------------------------------------------
On June 4, 2021, S&P Global Ratings revised the outlook to negative
from stable and affirmed its 'BB-' project finance rating on
Astoria Energy LLC's (AEI) senior secured debt. The '2' recovery
rating is unchanged.
The negative outlook reflects New York Independent System Operator
(NYISO) Zone J's latest strip auction results, as well as our
downward estimate revision for the region's capacity prices through
2023. S&P believes that the project's cash flows and debt service
coverage ratio (DSCR) will be weaker than previously anticipated
over the next 12 months.
AEI is a nominal 615-megawatt (MW) combined-cycle natural gas-fired
power plant in Zone J (NYC), a highly constrained and competitive
electricity region in NYISO. The power plant commenced commercial
operations in mid-2006, supplying most of its power to Consolidated
Edison Inc. (ConEdison) under a 10-year power purchase agreement
through mid-2016, and it became a fully merchant generator when
that contract expired. The facility consists of two GE PG7241 (7FA)
combustion turbine generator (CTG) sets, two Alstom heat recovery
steam generators (HRSGs) with supplemental firing capability, and
one Alstom Model STF25 steam turbine generator (STG). Natural gas
is the primary fuel. Low sulfur distillate fuel oil is stored
onsite and serves as backup fuel. Astoria Power Partners Holding
LLC (APPH) owns the facility.
In addition, APPH owns an approximately 55% interest in Astoria
Energy II LLC (AEII), a dual fuel-fired combined-cycle facility
with a nominal capacity of 615 MW. The facility began commercial
operations on July 1, 2011. Natural gas is the primary fuel and low
sulfur distillate fuel oil is stored onsite as backup fuel. AEII is
fully contracted through June 30, 2031, under a 20-year tolling
agreement with the New York Power Authority (NYPA). NYPA is
responsible for all fuel and emissions costs and holds title to all
products made available by the facility. AEI will rely on
approximately 55% of the distributions from AEII to service its
debt.
The collapse of summer 2021 capacity prices will affect the
project's cash flow generation and DSCR. In the most recent strip
auction, NYISO's summer 2021 capacity prices cleared at
$5.50/kilowatt month (kW-month), about 70% lower than in the
previous year and significantly below our expectations. The primary
driver behind the collapse of summer capacity prices is the decline
in the locational capacity requirement (LCR), which dropped to
80.3% from 86.6%. The LCR, which specifies the minimum amount of
locally installed capacity needed to meet the reliability
requirement, is established in conjunction with the installed
reserve margin (IRM) by using an iterative process. The same level
of reliability can be met with multiple combinations of IRM and LCR
values and the iterative process determines the values that
maximize reliability. If the IRM for a given reliability target is
increased, it would require an offsetting reduction in the LCR to
maintain the target level of reliability. The NYISO 2021-2022 IRM
value is 20.7%, compared with 18.9% for 2020-2021. All else
remaining equal, a higher IRM value reduces the need to carry
capacity inside the locality. Pandemic-related demand loss, as well
as incremental transfer capacity across the Upper New
York-ConEdison interface for one delivery year has further
exacerbated the situation and depressed capacity prices. S&P said,
"Based on our view of the current demand and supply fundamentals,
we revised our capacity price projections through 2023, lowering
prices throughout the forecast period. We now forecast summer
capacity prices of $11.50/kW-month in 2022, and $14.50/kW-month in
2023, compared with our previous expectation of $18.00/kW-month and
$16.00/kW-month, respectively. Similarly, we project winter
capacity prices through 2023 at $2.00/kW-month, versus our previous
expectation of $6.00/kW-month for 2021 and $4.50/kW-month for
2022."
S&P said, "Capacity payments constitute a notable portion of AEI's
income stream (about 50% of gross margin); consequently, we expect
reduced prices (cleared as well as forecast) will weaken the
project's cash flow generation and DSCR over the near- to mid-term.
Under our updated forecast, we project trailing-12-month DSCR at
the end of December 2021 of about 1.6x, improving to about 1.75x at
the end of 2022, and above 2.0x between 2023 and TLB maturity
(December 2027), as capacity prices recover. In the
post-refinancing period, we estimate an average DSCR of about
2.5x.
"The negative outlook reflects our expectation of weaker cash flows
over the next 12 months, when we forecast DSCRs will be in the
range of 1.4x-1.6x based on our capacity price projections.
Although we expect DSCRs will improve as capacity prices recover
from current lows, we believe there is a one-in-three likelihood
that the pace or magnitude of this recovery might be weaker than
our expectations, which could result in DSCR dropping to below 1.6x
on a sustained basis, absent any mitigating factors.
"We would lower the rating if we expect the project's minimum DSCR
will fall below 1.6x on a sustained basis, or the resilience of the
project weakens, with average DSCR falling below 2.5x on a
sustained basis. This could result from lower-than-expected
capacity factors, weaker energy margins, depressed capacity prices,
and operational challenges such as forced outages and lower plant
availability.
"We would revise the outlook to stable if we see market
fundamentals in NYISO improve, or if we believe that the
probability of the project's DSCRs falling below 1.6x was remote.
This could occur if capacity prices rebound at or above our
expectations, or if the project's financial performance is better
than in our forecast due to other factors, such as improved energy
margins or higher dispatch."
BALL CORPORATION: Egan-Jones Keeps BB Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Ball Corporation.
Headquartered in Broomfield, Colorado, Ball Corporation provides
metal packaging for beverages, foods, and household products.
BEAZER HOMES: Egan-Jones Keeps B- Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Beazer Homes USA, Inc. EJR also maintained its 'B'
rating on commercial paper issued by the Company.
Headquartered in Atlanta, Georgia, Beazer Homes USA, Inc. designs,
builds, and sells single-family homes in the Southeast, Southwest,
and South Central regions of the United States.
BELDEN INCORPORATED: Egan-Jones Keeps BB- Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Belden Incorporated.
Headquartered in St. Louis, Missouri, Belden Incorporated designs,
manufactures, and markets cable, connectivity, and networking
products.
BETHEL CHURCH OF MIAMI: Gets OK to Hire Fisher Auction as Broker
----------------------------------------------------------------
The Bethel Church of Miami, Inc. received approval from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Fisher Auction Company as its auctioneer and broker.
The firm will assist the Debtor's currently employed broker,
Claudienne Hibbert of EXP Realty, in procuring prospective buyers
of the Debtor's interest in seven commercial properties and six
residential properties in Miami, Fla.
Fisher Auction Company will be paid as follows:
a. a fixed advertising and marketing expense in the amount of up
to $10,000 to be shared between the firm and EXP Realty;
b. a sale commission to be paid out of a 6 percent buyer's
premium that will be added to the final gross purchase prices with
the buyer's premium divided as follows: (i) 2 percent payable to
Fisher Auction Company; (ii) 2 percent payable to EXP Realty; (iii)
2 percent payable to buyer's broker, if any; and (iv) if there is
no buyer's broker, then the buyer's premium will be divided equally
between Fisher Auction Company and EXP Realty.
Fisher Auction Company will also receive reimbursement for
out-of-pocket expenses incurred.
Lamar Fisher, president of Fisher Auction Company, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Lamar Fisher
Fisher Auction Company
2112 East Atlantic Boulevard
Pompano Beach, FL 33062
Tel: (954) 942-0917
Fax: (954) 782-8143
About The Bethel Church of Miami
The Bethel Church of Miami, Inc., formerly known as Bethel Full
Gospel Baptist Church, Inc., filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bank. S.D. Fla. Case No.
20-23302) on Dec. 6, 2020. At the time of filing, the Debtor had
between $1 million and $10 million in both assets and liabilities.
Judge A. Jay Cristol oversees the case. Monique D. Hayes, Esq., at
Goldstein & McClintock LLLP, serves as the Debtor's legal counsel.
BILL STARKS: Seeks Cash Collateral Access
-----------------------------------------
Bill Starks Construction Co., Inc. asks the U.S. Bankruptcy Court
for the Northern District of Texas, Abilene Division, for authority
to use cash collateral and provide adequate protection.
The Debtor's immediate need to file for bankruptcy arises out of a
lack of cash as the Debtor's lender has ceased any advances under
its line of credit and began collecting the Debtor's receivables.
The Debtor's lack of liquid funds has hampered its financial
condition and attempts to rehabilitate its business outside of
bankruptcy.
First Bank of Texas and Ferguson Enterprises, Inc. assert an
interest in the cash collateral.
Ferguson Enterprises, Inc. has been paid in full and is owed no
money as of the filing of this case. Its UCC Financing Statement
asserts a purchase money security interest on all inventory,
equipment and materials sold to Debtor as well as products,
proceeds and collections thereof. Even if not paid, the claim of
Ferguson Enterprises is likely wholly unsecured pursuant to Section
506 of the Bankruptcy Code. It would appear that the liens of First
Bank Texas are prior to those of Ferguson Enterprises. The value of
the Debtor's cash and other collateral is believed to be less than
the First Bank Texas debt.
As adequate protection for the Debtor's use of cash collateral, the
Debtor proposes to grant secured lenders post-petition security
interests equivalent to a lien granted under sections 364(c)(2) and
(3) of the Bankruptcy Code, as applicable, in and upon the Debtor's
Cash Collateral, whether such property was acquired before or after
the Petition Date.
In addition to the Replacement Liens, the Secured Lenders are
adequately protected by Debtor's continued business operations.
A copy of the motion is available for free at
https://bit.ly/3vjmn6p from PacerMonitor.com.
About Bill Starks Construction Co., Inc.
Bill Starks Construction Co., Inc. operates in the utility system
construction industry. It sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 21-10081) on June
9, 2021. In the petition signed by William Starks, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Weldon L. Moore, III, Esq., at Sussman and Moore, LLP is the
Debtor's counsel.
BILLINGS LODGE NO. 394: Taps Goodrich & Reely as Mediator
---------------------------------------------------------
Billings Lodge No. 394, Benevelont and Protective Order of Elks of
United States of America, Inc. received approval from the U.S.
Bankruptcy Court for the District of Montana to employ Goodrich &
Reely, PLLC to serve as mediator.
The Debtor needs the services of the firm to help resolve any
disputes with the official unsecured creditors' committee and
creditors William T. Alex and JoAnne Kersich who acts as personal
representative of the estate of Albert Kersich.
Goodrich & Reely will be paid at the rate of $270 per hour and
reimbursed for out-of-pocket expenses incurred.
Malcolm Goodrich, Esq., a partner at Goodrich & Reely, disclosed in
a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Malcolm Goodrich, Esq.
Goodrich & Reely, PLLC
2315 McDonald Ave. Suite 200
Missoula, MT 59801
Tel: (406) 541-9700
About Billings Lodge No. 394,
Benevelont and Protective Order of Elks
of United States of America, Inc.
Billings Lodge, No. 394, Benevolent and Protective Order of Elks of
United States of America, Inc. is a tax-exempt civic and social
organization. Elk Lodge is a Billings, Montana-based fraternal
organization that hosts various civic events and social gatherings
like wedding receptions, meetings, and other functions.
Billings Lodge filed a voluntary Chapter 11 bankruptcy petition
(Bankr. D. Mont. Case No. 20-10110) on June 5, 2020. At the time
of the filing, the Debtor disclosed assets of between $1 million
and $10 million and liabilities of the same range. The Debtor
tapped Felt Martin PC as legal counsel and Heidi Giem of Paigeville
Accounting, LLC as accountant.
Judge Benjamin P. Hursh oversees the case.
The U.S. Trustee for Region 18 appointed a committee of unsecured
creditors on July 23, 2020. The committee is represented by
Patten, Peterman, Bekkedahl & Green, PLLC.
BLACKSTONE MORTGAGE: S&P Alters Outlook to Stable, Affirms B+ ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on Blackstone Mortgage Trust
Inc. (BXMT) to stable from negative. S&P also affirmed its
long-term issuer credit rating and term loan B debt rating of
'B+'.
The outlook revision mainly reflects S&P's view that the likelihood
of substantial further deterioration in BXMT's loan portfolio has
lessened since the onset of the COVID-19 pandemic, with the
widespread availability of vaccines and the reopening of the U.S.
economy. Also, the company reported better-than-expected earnings
and stable portfolio performance through the first quarter of 2021.
Preprovision operating earnings for 2020 totaled $308 million,
compared with $307 million for 2019. In the first quarter of 2021,
preprovision operating income was $79.4 million, compared with
$69.6 million in the first quarter last year.
In 2020, the company recorded $173.6 million in current expected
credit loss (CECL) reserves, though only approximately $70 million
is due to two impaired loans. These two loans had an original
combined outstanding balance of approximately $340 million.
S&P said, "The stable outlook reflects our expectation that over
the next year BXMT--helped by the rebounding economy--will report
mostly stable asset quality trends while maintaining adequate
liquidity and leverage of around 3.0x-4.0x, as measured by debt to
adjusted total equity. Pandemic-related changes and pressures in
commercial real estate, such as in the office market, may still
create challenges for the company and other lenders in the next few
years, but we expect it to work through those over time while
maintaining leverage, funding, and liquidity around current
levels.
"We could downgrade the company in the next six to 12 months if
asset quality deteriorates or if it does not maintain adequate
liquidity, in our view. We could also downgrade the company if
leverage rises above 4.5x.
"We could raise the rating on BXMT over the next 12 months if we
see clear signs that portfolio credit quality is improving via
positive risk migration and the company maintains leverage in line
with our expectations."
BOOZ ALLEN: S&P Rates New Senior Unsecured Notes 'BB-'
------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '6'
recovery rating to Booz Allen Hamilton Inc.'s proposed senior
unsecured notes. The '6' recovery rating indicates S&P's
expectation for negligible (0%-10%; rounded estimate: 0%) recovery
in a default scenario. All of its other ratings on the company,
including its 'BB+' issuer credit rating and 'BB+' issue-level
rating on its secured term loans, are unchanged.
Booz Allen plans to use the proceeds from these notes to fund a
portion of its $725 million purchase of Liberty IT Solutions LLC,
as well as for general corporate purposes.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- The company's capital structure comprises a $1 billion secured
revolver due 2026, a secured term loan A with $1.3 billion
outstanding due 2026, a secured term loan B with $384 million
outstanding due 2026, and $1.2 billion of senior unsecured notes
due 2028.
-- S&P has valued the company on a going-concern basis using a
5.5x multiple of its projected emergence EBITDA. Other key
assumptions at default include LIBOR of 2.5% and the revolver is
85% drawn.
Simulated default assumptions
-- Default year: 2025
-- EBITDA at emergence: $279 million
-- Multiple: 5.5x
Simplified waterfall
-- Net enterprise value after administrative expenses (5%): $1.4
billion
-- Valuation split (obligor/nonobligors): 100%/0%
-- Value available for first-lien debt claims: $1.4 billion
-- First-lien debt claims: $2.3 billion
--Recovery expectations: 50%-70% (rounded estimate: 60%)
-- Value available to unsecured debt claims: $0
-- Unsecured debt claims: $1.2 billion
--Recovery expectations: 0%-10% (rounded estimate: 0%)
Note: All debt amounts include six months of prepetition interest.
BRAINSTORM INTERNET: Seeks to Hire Hoff Law Offices as Counsel
--------------------------------------------------------------
Brainstorm Internet seeks approval from the U.S. Bankruptcy Court
for the District of Colorado to employ Hoff Law Offices, P.C. to
serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. providing the Debtor with legal advice with respect to its
powers and duties;
b. preparing legal papers;
c. assisting the Debtor in the preparation and confirmation of a
Chapter 11 disclosure statement and plan, if appropriate; and
d. other necessary legal services.
Hoff Law Offices will be paid at the rate of $400 per hour for
attorneys and $125 per hour for paralegals. The firm will also
receive reimbursement for out-of-pocket expenses incurred.
The retainer fee is $24,000.
Jessica Hoff, Esq., a partner at Hoff Law Offices, disclosed in a
court filing that her firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jessica L. Hoff, Esq.
Hoff Law Offices, P.C.
6400 S Fiddlers Green Cir #250
Greenwood Village, CO 80111
Tel: (720) 739-3599
Email: jhoff@hofflawoffices.com
About Brainstorm Internet
Denver-based Brainstorm Internet sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Colo. Case No. 21-12549) on May
12, 2021. In the petition signed by Jawaid Bazyar, president, the
Debtor disclosed total assets of $1,044,617 and total liabilities
of $276,282. Judge Kimberley H. Tyson oversees the case. The
Debtor is represented by Hoff Law Offices, P.C.
BUNGE LIMITED: Egan-Jones Hikes Senior Unsecured Ratings to BB
--------------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, upgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Bunge Limited to BB from BB-.
Headquartered in Chesterfield, Missouri, Bunge Limited operates as
a global agribusiness and food company.
CABOT CORPORATION: Egan-Jones Keeps BB+ Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Cabot Corporation.
Headquartered in Boston, Massachusetts, Cabot Corporation has
businesses in chemicals, performance materials, and specialty
fluids.
CABOT OIL: Egan-Jones Keeps BB+ Senior Unsecured Ratings
--------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Cabot Oil & Gas Corporation.
Headquartered in Houston, Texas, Cabot Oil & Gas Corporation is an
independent oil and gas company that develops, exploits, and
explores oil and gas properties located in North America.
CARLA'S PASTA: Hearing Today on Bank's Payment Demand
-----------------------------------------------------
Bankruptcy Judge James J. Tancredi in Hartford, Conn., denied the
request of People's United Bank for relief from the automatic stay
so it may set off its claim against the net proceeds from the sale
of the assets of Carla's Pasta, Inc. and Suri Realty, LLC.
Judge Tancredi will hold a hearing today, June 14, at 11 a.m., on
the Bank's alternative request for an order directing the Debtors
to pay over to PUB the net proceeds from the Sale.
Prior to the Petition Date, the Debtors began marketing their
business for a sale or other strategic transaction of substantially
all of their assets, which would ultimately be completed under an
auction process supervised by the Bankruptcy Court. Following a
hearing in April 2021, the Bankruptcy Court approved the sale of
substantially all of the Debtors' assets to CP Foods LLC and NFP
Real Estate LLC, which are assignees of Natural Food Partners, LLC.
The sale closed on April 30, 2021, with the cash purchase price,
prior to adjustments, of $24,891,123. After payment of closing
costs, costs of sale and other authorized disbursements at closing,
the remaining cash portion of the purchase price was $22,866,662.
Shortly after the sale closed, PUB filed its motion for relief from
stay. The Debtors stated their consent to an interim distribution
of Sale proceeds to the Lender in the amount of $15,000,000,
pursuant to an order addressing the objections and addressing any
competing interests to the Sale proceeds.
PUB is the administrative agent, a lender, swingline lender and
letter of credit issuer under a prepetition senior secured credit
facility. BMO Harris Bank, N.A., is a lender under the facility.
The aggregate outstanding principal balance of the Loans as of the
Petition Date is $37,741,927.14, comprising of: (i) $6,012,000
outstanding under a Revolving Facility; (ii) $13,867,816.28
outstanding under an Equipment Facility; and (iii) $17,862,110.86
outstanding under a Construction Facility.
Dennis Engineering Group argues, among other things, that the
Bank's Motion is an improper procedural end-run around adversary
proceeding that it filed to determine the extent, validity and
priority of PUB's competing liens. Several other parties,
including the Debtors, also filed objections.
Suri is obligated to the Dennis Group in an approximate amount of
$15,400,000. The Dennis Group asserts a Mechanic's Lien on the
Properties.
Carla’s Pasta is obligated to its general trade creditors,
employees, taxing authorities, and other unsecured creditors, in an
approximate amount of $12,000,000 to $19,670,000.
A copy of the Court's June 8, 2021 Ruling is available at:
https://www.leagle.com/decision/inbco20210609569
The Debtors have submitted a Joint Plan and Disclosure Statement.
As reported by the Troubled Company Reporter, the Plan
contemplates: (i) an orderly liquidation of assets via a
Liquidating Custodian with powers set forth in the Plan, and (ii) a
distribution to unsecured creditors of CPI from, at least, the
Unsecured Creditors' Fund.
Specifically, the Plan will treat claims as follows:
A. Carla's Pasta Creditors:
* Lenders' Secured Claim (Class 1) will be allowed for
$10,191,972. The claim is impaired and estimated recovery is 100%
of the Allowed amount in Cash, including proceeds of Tax Credits
(but excluding Unsecured Creditors' Fund).
* Other Secured Claims (Class 2) will be allowed from $485,473
to $1,222,200. The claim is unimpaired and estimated recovery is
100% of the Allowed amount in Cash or return of collateral.
* General Unsecured Claims (Class 3) totaling $12,000,000 to
$19,670,000. Creditors will recover 2% to 4% of their claims from
Unsecured Creditors' Fund. Class 3 is impaired.
* Lenders Deficiency Claim (Class 4) totaling $16,720,966.
Creditor will recover 0% of their claims from any unencumbered
Cash. Class 4 is impaired.
* Equity Interests (Class 5). Creditor will recover 0% of
their claims. All Equity Interests in the Debtors shall be
cancelled. Class 5 is impaired.
B. Suri Realty Creditors:
* Lenders' Secured Claim (Class 1A) will be allowed for
$10,828,990. The claim is impaired and estimated recovery is 100%
of the Allowed amount in Cash and proceeds of tax refunds.
* Other Secured Claims (Class 2A) will be allowed for $0. The
claim is unimpaired and estimated recovery is 100% in Cash.
* Dennis Group Unsecured Claims (Class 3A) totaling
$15,418,497. Creditors will recover 0% - unknown% of their claims
from cash, solely to the extent Dennis Group is successful in its
subordination related claims against the Lenders. Class 3A is
impaired.
* Lenders Deficiency Claim (Class 4A) totaling $16,720,966.
Creditors will recover 0% of their claims. Class 4A is impaired.
* General Unsecured Claims (Class 5A) totaling $133,012.19.
Creditors will recover 0% of their claims. Class 5A is impaired.
* Equity Interests (Class 6A). Creditors will recover 0% of
their claims. All Equity Interests in the Debtors shall be
cancelled. Class 6A is impaired.
The Bankruptcy Court has set July 21 at 11:00 a.m. (Eastern Time)
for the hearing on confirmation of the Plan.
Any party in interest may object to confirmation of the Plan and
appear at the Confirmation Hearing to pursue such objection. The
Court has set July 14 at 4:00 p.m. (Eastern Time), as the deadline
for filing and serving objections to the confirmation of the Plan.
About Carla's Pasta and Suri Realty
Carla's Pasta Inc. is a family-owned and operated business
headquartered in South Windsor, Conn. It manufactures food
products including pasta sheets, tortellini, ravioli, and steam bag
meals for branded and private label retail, foodservice
distributors, and restaurant. Founded in 1978 by Carla Squatrito,
Carla's Pasta's stock is held by members of the Squatrito family.
On Dec. 31, 2016, Carla's Pasta acquired 100% of Suri Realty, LLC's
membership interests. Suri's business is limited to the ownership
of two adjoining parcels of real property located at 50 Talbot Lane
and 280 Nut, meg Road, South Windsor, Conn.
Carla's Pasta operates its business from an approximately the
150,000-square-foot BRC+ certified production facility.
On Oct. 29, 2020, an involuntary petition for relief under Chapter
7 of the Bankruptcy Code was filed against Suri by Dennis Group, HJ
Norris, LLC, Renaissance Builders, Inc., and Elm Electrical, Inc.
On Dec. 17, the Court approved Suri's request and converted the
involuntary Chapter 7 case to one under Chapter 11.
Carla's Pasta filed a Chapter 11 petition (Bankr. D. Conn. Case No.
21-20111) on Feb. 8, 2021. It estimated assets of $10 million to
$50 million and liabilities of $50 million to $100 million.
The cases are jointly administered under Case No. 21-20111. Judge
James J. Tancredi oversees the cases.
The Debtors tapped Locke Lord LLP as their legal counsel, Verdolino
& Lowey, PC as accountant, Cowen & Co. as investment banker, and
Novo Advisors, LLC as financial advisor. Sandeep Gupta of Novo
Advisors is the Debtors' chief restructuring officer.
CENTRAL GARDEN: Egan-Jones Keeps BB Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Central Garden & Pet Company.
Headquartered in Walnut Creek, California, Central Garden & Pet
Company manufactures and distributes branded and private label
products.
CF INDUSTRIES: Egan-Jones Hikes Senior Unsecured Ratings to BB+
---------------------------------------------------------------
Egan-Jones Ratings Company, on May 28, 2021, upgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by CF Industries Holdings, Inc. to BB+ from BB.
Headquartered in Deerfield, Illinois, CF Industries Holdings, Inc.
manufactures and distributes nitrogen and phosphate fertilizer
products globally.
CHARLES K. BRELAND: Court Rejects Trustee's Bid to Sell Property
----------------------------------------------------------------
Bankruptcy Judge Jerry C. Oldshue, Jr., denied the request of
Richard Maples, the Chapter 11 Trustee of the bankruptcy estate of
Charles K. Breland Jr., to Sell Property Free and Clear of Liens
Under Section 363(f).
Earlier this year, without the Chapter 11 Trustee's knowledge or
authority, Breland engaged in negotiations on behalf of S. Hickory
Inc., an entity wholly owned by Breland but now part of the
bankruptcy estate and controlled by the Trustee, to sell certain
property of the Estate in Baldwin County, Alabama. The discussions
involved selling approximately 13.49 acres of undeveloped land,
which was slated to be developed as Phase 1 of South Branch
Subdivision, to Smart Living, LLC, an entity majority owned by
Breland's brother, Louis Breland.
Thereafter, unbeknownst to the Trustee, on April 9, 2021, Breland,
purporting to have the authority to contractually bind S. Hickory,
executed a purchase agreement with Smart Living, to sell the
Property for $600,000 together with the development rights therein
and a first right of refusal on approximately 66.23 acres of
adjacent property -- Retained Tract. Breland informed the Trustee
of the Agreement approximately a week before the Trustee's Motion
to Sell was filed on April 23. Staunch opposition to the proposed
sale has been raised in a unified front by the largest,
participating Creditors. At the hearing, the Trustee announced his
intent to amend the Agreement to remove the first right of refusal
on the Retained Tract; however, that did not resolve the pending
objections.
Objections were filed by the United States, the Miller Entities,
Hudgens and Associates, Levada EF Five LLC, and Adams and Reese
LLP.
According to Judge Oldshue, the Trustee has not met his burden to
establish sound business reasons for his decision to seek approval
to sell the Property. Although the Trustee testified that he
thought the sale was in the Estate's best interest and "the price
was good", the evidence (or absence thereof) revealed his lack of
adequate information to make a fully informed assessment.
Judge Oldshue concludes it was apparent from the gaps in the
Trustee's knowledge that the rush nature of the matter, wherein the
Trustee hurriedly posed the Motion at the Debtor's urging, did not
afford the Trustee the opportunity to fully flesh out the necessary
details including: the current Property value, the value of the
development rights, the applicable permit requirements or the
proposed sale's impact upon the Retained Tract. By all accounts,
the permit deadline had been pending for at least two years,
however, the Trustee admitted he was generally unaware of it until
the Debtor's revelation after the Agreement was executed. This type
of purported, emergency situation, does not lend itself to sound
business judgment but rather undue pressure and persuasion by the
Debtor who unilaterally negotiated the Agreement in the first place
without the Trustee's knowledge or involvement.
Judge Oldshue also says the Trustee's reliance on nothing more than
two year-old appraisals, not even tailored to the specific property
in a booming real estate market which by his own witness' testimony
is "through the roof' without any effort whatsoever to list, market
or engage the services of a disinterested real estate professional
would call into question the Trustee's business judgment in any
context. "This is even more so in the present scenario wherein the
deal was negotiated with an entity controlled by the Debtor's
brother and not disclosed to the Trustee until the last minute.
Although the Court recognizes the deference generally afforded to
the Trustee's business judgment, that latitude is not without
limitation as such judgment must be predicated upon sound business
reasons. This Court simply does not find the Trustee's extensive
reliance upon the representations of the prospective Buyer and the
Debtor in a sale that benefits the Debtor's brother prudent or
sufficient to evidence sound business judgment," Judge Oldshue
says.
A copy of the Court's June 3, 2021 Memorandum Opinion and Order is
available at:
https://www.leagle.com/decision/inbco20210608612
About Charles Breland Jr.
Charles K. Breland, Jr., filed for Chapter 11 bankruptcy protection
(Bankr. S.D. Ala. Case No. 16-02272) on July 8, 2016, and is
represented by Eric Slocum Sparks, Esq., at Eric Slocum Sparks PC.
A. Richard Maples, Jr., was appointed as Chapter 11 trustee for the
Debtor. Debtor Osprey Utah, LLC, which is owned and controlled by
Charles K. Breland, Jr., owns real property.
CHINA FISHERY: Creditor Proponents File CFG Peru Chapter 11 Plan
----------------------------------------------------------------
Burlington Loan Management DAC and Monarch Alternative Capital LP
(solely on behalf of certain advisory clients and related entities
that hold claims), as Creditor Plan Proponents, filed with the
Bankruptcy Court on June 4, 2021 a Chapter 11 Plan for CFG Peru
Investments Pte., Ltd. (Singapore).
The Plan provided for the treatment of Classified Claims and
Interests, as follows:
A. Class 1 – Secured Claims
Each Holder of an Allowed Secured Claim shall receive, at the
option of the Creditor Plan Proponents, either:
a. payment in full in Cash;
b. delivery of collateral securing any such Claim and payment of
any interest required under Section 506(b) of the Bankruptcy Code;
c. reinstatement of such Allowed Secured Claim; or
d. other treatment rendering its Allowed Secured Claim Unimpaired
pursuant to Section 1124 of the Bankruptcy Code.
Class 1 is Unimpaired under the Plan. Holders of Allowed Secured
Claims are conclusively presumed to have accepted the Polan and are
not entitled to vote to accept or reject the Plan.
B. Class 2 – Other Priority Claims
Each Holder of an Allowed Other Priority shall receive, at the
option of the Creditor Plan Proponents, either:
a. payment in full in Cash; or
b. such other treatment that renders its Allowed Other Priority
Claim Unimpaired pursuant to Section 1124 of the Bankruptcy Code.
Class 2 is Unimpaired under the Plan. Holders of Allowed Other
Priority Claims are conclusively presumed to have accepted and are
not entitled to vote to accept or reject the Plan.
C. Class 3 – Senior Notes Claims. The Senior Notes Claims shall
be Allowed against CFG Peru in full in the amount of all accrued
outstanding principal, interest, costs, and fees through the
Effective Date.
Each Holder of an Allowed Senior Notes Claim shall receive the
distributions to such Holder pursuant to the UK Proceeding and/or
Singapore Scheme. Unless provided in the Plan, on the Effective
Date, all of the Senior Notes shall be cancelled as set forth in
the UK Proceeding Documentation and/or Singapore Scheme
Documentation, as applicable; provided, that any such distribution
shall be in addition to any distributions made by the Plan
Administrator or any other Entity with respect to the Interim
Distribution.
Class 3 is Impaired under the Plan. Holders of Senior Notes Claims
are entitled to vote to accept or reject the Plan.
D. Class 4 – General Unsecured Claims
Class 4 consists of all General Unsecured Claims, including
Intercompany Claims. Each Holder of an Allowed General Unsecured
Claim shall receive its pro rata share of the Wind-Down Trust
Interests; provided that the HSBC Action Proceeds shall reduce the
amount of the Global Settlement Funds on a dollar for dollar basis
to the extent that the HSBC Action Proceeds are received prior to
the Effective Date.
To the extent that any HSBC Action Proceeds are received by the
Wind-Down Trust after the Effective Date, then the parties to the
Global Settlement Agreement which directly or indirectly hold any
of the Wind-Down Trust Interests shall have been deemed to agree
that the Wind-Down Trustee shall transfer any such amounts to CFG
Peru or its designee, rather than to any such Specified Holder of
Wind-Down Trust Interests, without any further action by the
Specified Holders of Wind-Down Trust Interests, on a dollar for
dollar basis, for up to the aggregate amount of the Global
Settlement Funds, prior to any distributions to the Specified
Holders of Wind-Down Trust Interests, pursuant to the Plan.
Class 4 is Impaired under the Plan. Holders of General Unsecured
Claims are entitled to vote to accept or reject the Plan.
HSBC Action Proceeds is the aggregate amount of Cash received by
the Other Debtors, Non-Debtor Affiliates, and Ng Family Members,
directly or indirectly, by or on behalf of HSBC or an Affiliate
thereof on account of the HSBC Action. The HSBC Action was styled
as William A. Brandt, Jr. v. The Hongkong Shanghai Banking Corp.
Ltd. Mr. Brandt is CFG Peru's Chapter 11 Trustee.
E. Class 5 – Bank of America, N.A. (BANA)-CFG Peru Claim
Class 5 consists of all BANA-CFG Peru Claims against CFG Peru.
Notwithstanding anything to the contrary in the BANA Settlement
Stipulation, the BANA-CFG Peru Claims shall be Allowed against CFG
Peru in full in the amount of all accrued outstanding principal,
interest, costs, and fees through the Effective Date. Each Holder
of the BANA-CFG Peru Claim shall receive its pro rata share of
$30,998,084 in Cash, which Cash shall be remitted by NewCo or the
Peruvian OpCos, in full satisfaction of its Class 5 Claims.
Class 5 is Impaired under the Plan. Holders of BANA-CFG Peru
Claims are entitled to vote to accept or reject the Plan.
F. Class 7 – Section 510(b) Claims. Each Section 510(b) Claim
shall be deemed canceled and released and there shall be no
distribution to Holders of Section 510(b) Claims on account of such
Claims.
Class 7 is Impaired. Holders of Allowed Section 510(b) Claims are
deemed to have rejected the Plan and are not entitled to vote to
accept or reject the Plan.
G. Class 8 – Interests in CFG Peru. Interests in CFG Peru shall
be Reinstated as of the Effective Date or, at the Creditor Plan
Proponents' option, shall be cancelled. No distribution shall be
made on account of any Interests in CFG Peru.
Class 8 is Impaired under the Plan. Holders of Interests in CFG
Peru are conclusively presumed to have accepted the Plan or
rejected the Plan and are not entitled to vote to accept or reject
the Plan.
* Recognition of the Plan Administrator, the Plan, the UK
Proceeding, and the Singapore Scheme
As of the Confirmation Date:
a. the Plan Administrator is appointed as the foreign
representative of CFGI and/or CFG Peru to enforce the Plan, the UK
Proceeding, and/or the Singapore Scheme, under Singapore, English,
Peruvian, Cayman Islands, or other applicable non-United States
law; and
b. the Creditor Plan Proponents, CFG Peru and the Plan
Administrator are each authorized to appoint provisional
liquidators pursuant to Cayman Islands law as they deem necessary
in order to effectuate or support the transactions under the Plan,
the UK Proceeding, and/or the Singapore Scheme.
UK Proceedings means either a scheme of arrangement pursuant to
Part 26 or a restructuring plan pursuant to Part 26A of the
Companies Act 2006 of the United Kingdom, determined by Creditor
Plan Proponents and the Plan Administrator, with respect to CFG
Peru or Affiliate of CFG Peru, including ay Peruvian OpCo,
including CFGI, to restructure the Claims under the (i) Club
Facility Agreement, (ii) the Senior Notes Indenture, (iii) the BANA
Facility Letter Agreement, the BANA-CFG Peru Claim, to the extent
deemed necessary to effectuate the transactions contemplated by the
Restructuring Support Agreement. The scheme or other restructuring
plan shall be filed in a court of competent jurisdiction in England
and shall be consistent with the Restructuring Support Agreement.
Singapore Scheme means a scheme of arrangement pursuant to Section
210 of the Companies Act of Singapore and/or the Insolvency,
Restructuring and Dissolution Act of Singapore, determined by the
Creditor Plan Proponents or the Plan Administrator, with respect to
CFG Peru or Affiliate of CFG Peru (including any Peruvian OpCo,
including CFGI) to restructure the Claims under the Club Facility
Agreement, the Senior Notes Indenture, the BANA Facility Letter
Agreement, the BANA-CFG Peru Claim, to the extent deemed necessary
to effectuate the transactions contemplated by the Restructuring
Support Agreement. The scheme shall be filed in a court of
competent jurisdiction in Singapore and shall be consistent with
the Restructuring Support Agreement.
* Interim Distributions
Following the Confirmation Date, but not later than the Effective
Date, CFG Peru and the Plan Administrator shall cause one or more
Interim Distributions to be made by the Peruvian OpCos for at least
$75 million in the aggregate, provided that the Plan Administrator
may reduce the Interim Distribution Aggregate Amount.
* Wind-Down
On and after the Effective Date, the Plan Administrator will be
authorized, subject to the Wind-Down Budget, to implement the Plan,
to wind down and dissolve CFG Peru's Estate.
As soon as practicable after the Effective Date, the Plan
Administrator shall:
(1) cause CFG Peru to comply with the terms of the UK Proceeding,
the terms of the Singapore Scheme, and any other documents
contemplated thereby;
(2) appoint a liquidator pursuant to Singaporean law, as
necessary;
(3) to the extent applicable, file a certificate of dissolution or
equivalent document, together with all other necessary corporate
and company documents, to effect the dissolution of CFG Peru under
the applicable laws of the jurisdiction of incorporation or
formation (as applicable).
* Transferred Claims and Causes of Action
In connection with the Effective Date, CFG Peru or the Plan
Administrator shall (1) take all steps necessary to establish the
Wind-Down Trust in accordance with the Plan and (2) transfer, and
be deemed to have transferred, the Transferred Claims and Causes of
Action to the Wind-Down Trust. The Wind-Down Trust shall be
governed by the Plan and administered by the Wind-Down Trustee, who
shall hold and distribute the Transferred Claims and Causes of
Action or the proceeds thereof in accordance with the Plan.
* Dissolution of CFG Peru
Upon a certification to be filed with the Bankruptcy Court by the
Plan Administrator of all distributions having been made and
completion of all its duties under the Plan and entry of a Final
Decree closing the Chapter 11 Case, CFG Peru shall be deemed to be
dissolved without any further action by any Entity.
A copy of the Amended Plan is available for free at
https://bit.ly/2U1th3f from Epiq, claims agent.
Counsel for Burlington Loan Management DAC and Monarch Alternative
Capital LP, as Creditor Plan Proponents (solely on behalf of
certain advisory clients and related Entities that hold Claims):
Patrick J. Nash, Jr., P.C.
Heidi M. Hockberger, Esq.
Kirkland & Ellis LLP
300 North LaSalle
Chicago, IL 60654
Telephone: (312) 862-2000
Facsimile: (312) 862-2200
Email: heidi.hockberger@kirkland.com
- and -
Gregory Pesce, Esq.
White & Case LLP
111 South Wacker Drive, Suite 5100
Chicago, IL 60606
Telephone: (312) 881-5360
Facsimile: (312) 881-5450
Email: gregory.pesce@whitecase.com
About China Fishery Group
China Fishery Group Limited (Cayman) and its affiliates sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Lead Case No. 16-11895) on June 30, 2016.
In the petition signed by CEO Ng Puay Yee, China Fishery Group was
estimated to have assets at $500 million to $1 billion and debt at
$10 million to $50 million.
The cases are assigned to Judge James L. Garrity Jr. Weil, Gotshal
& Manges LLP has been tapped to serve as lead bankruptcy counsel
for China Fishery and its affiliates other than CFG Peru
Investments Pte. Limited (Singapore). Weil Gotshal replaces Meyer,
Suozzi, English & Klein, P.C., the law firm initially hired by the
Debtors. The Debtors have also tapped Klestadt Winters Jureller
Southard & Stevens, LLP, as conflict counsel; Goldin Associates,
LLC, as financial advisor; RSR Consulting LLC as restructuring
consultant; and Epiq Bankruptcy Solutions, LLC, as administrative
agent. Kwok Yih & Chan serves as special counsel.
On Nov. 10, 2016, William Brandt, Jr., was appointed as Chapter 11
trustee for CFG Peru Investments Pte. Limited (Singapore), one of
the Debtors. Skadden, Arps, Slate, Meagher & Flom LLP serves as
the trustee's bankruptcy counsel; Hogan Lovells US LLP serves as
special counsel; and Quinn Emanuel Urquhart & Sullivan, LLP, serves
as special litigation counsel.
CHOICE HOTELS: Egan-Jones Keeps BB Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Choice Hotels International, Inc.
Headquartered in Rockville, Maryland, Choice Hotels International,
Inc. franchises hotel properties.
CIMAREX ENERGY: Egan-Jones Hikes Senior Unsecured Ratings to BB+
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, upgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Cimarex Energy Co. to BB+ from BB-.
Headquartered in Denver, Colorado, Cimarex Energy Co. explores and
produces crude oil and natural gas in the United States.
CLAROS MORTGAGE: S&P Alters Outlook to Stable, Affirms 'B+' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative on
Claros Mortgage Trust Inc. and affirmed its 'B+' issuer credit and
senior secured debt ratings.
S&P said, "The outlook revision mainly reflects our view that the
likelihood of substantial further deterioration in CMTG's loan
portfolio has lessened in the wake of the pandemic with the
widespread availability of vaccines and there opening of the U.S.
economy. CMTG realized losses in 2020 of $0.6 million-–related to
transaction costs on a loan sold at par--and recorded $6.0 million
of provision for loan losses on a total portfolio of $6.5 billion.
Although provisions were lower than peers, CMTG was not required to
adopt CECL until first-quarter 2021. As of Dec. 31, 2020, the
company had $615.8 million of unpaid principal balance, or 9.5% of
its total portfolio, on non-accrual status. Five investments
representing $382.3 million, or 5.9% of its portfolio, were on
non-accrual status as a result of interest payments becoming 90
days past due. Additionally, one loan representing $233.5 million
of UPB remains on non-accrual status despite a modification in
December 2020 which brought the loan current on its interest
payments. This loan will remain on non-accrual status and recognize
interest income on a cash basis until the borrower demonstrates an
ability and willingness to pay interest over multiple months, at
which point it will be taken off non-accrual status.
Although CMTG has realized minimal losses so far, risks remain
related to the portfolio's concentration in the New York area and
exposure to construction, land and development loans, and some
larger loan concentrations (which compares unfavorably to its rated
peers). The company has material exposure to hospitality (16.2% of
total portfolio as of Dec. 31, 2020) and office properties (16.4%
of total portfolio as of the same date) that have been hurt by the
pandemic. Some office properties, especially those in dense urban
areas like New York City, could be negatively affected over the
longer term.
The company relies heavily on repurchase agreement funding lines,
which exposés it to potential margin calls. CMTG has taken
measures to reduce its use of repurchase agreements by issuing a
$325 million add-on to its existing senior secured term loan in
December 2020. As of Dec. 31, 2020, repurchase facilities were 63%
of total debt, down from 72% in 2019. The company has also
proactively paid down some repurchase funding, particularly for
lines funding hospitality-related properties. This has allowed CMTG
to avoid margin calls on these lines.
CMTG's efforts to conserve liquidity left it with on-balance-sheet
cash of $427.5 million as of Dec. 31, 2020. There was also over
$635.5 million of unencumbered loans and $650.9 million of approved
and undrawn credit capacity. The largest potential liquidity demand
is funding future draws on existing loan commitments. CMTG's
funding obligations on these is subject to its borrowers meeting
conditions outlined in each loan agreement. As of Dec. 31,2020, the
company has $1.4 billion of future commitments, down from
$1.9billion in 2019.
S&P said, "The stable outlook reflects our expectation that, over
the next year, CMTG--helped by the rebounding U.S. economy--will
report mostly stable asset quality trends while maintaining
adequate liquidity and leverage of about1.5x-2.5x, as measured by
debt to adjusted total equity (ATE).Pandemic-related changes and
pressures in commercial real estate, as in the office market, may
still create challenges for the company and other lenders in the
next few years, but we expect them to work through it while
maintaining leverage, funding, and liquidity at current levels.
"We could lower the rating in the next year if asset quality
deteriorates, particularly if that leads to margin calls on CMTG's
funding facilities and liquidity pressures, or leverage rises above
2.75x."
An upgrade is unlikely over the next six to 12 months. Thereafter,
S&P could raise the rating if the company further reduces the risk
in its portfolio, lowers exposure to secured financing and margin
call risk, and maintains sufficient liquidity.
CMC MATERIALS: Egan-Jones Keeps BB+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by CMC Materials, Inc.
Headquartered in Aurora, Illinois, CMC Materials, Inc. supplies
slurries used in chemical mechanical planarization, a polishing
process used in the manufacture of integrated circuit devices.
COOPER TIRE: Egan-Jones Keeps BB Senior Unsecured Ratings
---------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Cooper Tire & Rubber Company.
Headquartered in Findlay, Ohio, Cooper Tire & Rubber Company
manufactures and markets replacement tires.
CORECIVIC INCOPORATED: Egan-Jones Keeps BB Sr. Unsecured Ratings
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Egan-Jones Ratings Company, on May 27, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by CoreCivic Inc.
Headquartered in Nashville, Tennessee, CoreCivic, Inc. provides
detention and corrections services to governmental agencies.
CORNERSTONE ONDEMAND: Egan-Jones Keeps CCC Sr. Unsecured Ratings
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Egan-Jones Ratings Company, on May 27, 2021, maintained its 'CCC'
foreign currency and local currency senior unsecured ratings on
debt issued by Cornerstone OnDemand, Inc. EJR also maintained its
'C' rating on commercial paper issued by the Company.
Headquartered in Santa Monica, California, Cornerstone OnDemand,
Inc. develops and markets on demand employee development computer
software.
COTY INC: S&P Rates New Senior Secured Credit Facilities 'B'
------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level and '2' recovery
ratings to Coty Inc.'s proposed EUR500 million senior secured notes
due in 2026. The '2' recovery rating indicates its expectation for
substantial (70%-90%; rounded estimate: 80%) recovery in the event
of a payment default.
The company intends to use the proceeds to repay a portion of its
2023 term loan A facility. S&P's ratings are based on the proposed
senior secured notes' preliminary terms, subject to review of final
documentation.
S&P said, "All of our other ratings on Coty, including our 'B-'
issuer credit rating and negative outlook, are unaffected by this
transaction, which we expect will be net-leverage-neutral. We
continue to believe the company's credit measures will improve over
the next few quarters because of better sales trends and cost
reductions. As of March 31, 2021, Coty reported roughly $5.4
billion of funded debt outstanding. However, we also treat the
company's $1.1 billion of preferred stock as debt. Though we expect
free operating cash flow will turn positive, our forecast for about
$220 million of discretionary cash flow in fiscal 2021 is modest
relative to its adjusted debt load. We forecast leverage of about
10x in 2021 (8.5x excluding preferred stock) and EBITDA interest
coverage of about 2x."
CREATD INC: Increases Ownership Stake in Plant Camp to 89%
----------------------------------------------------------
Creatd, Inc. has completed the purchase of an additional 56% of the
membership interests in Plant Camp, LLC, through its wholly-owned
subsidiary, Creatd Partners, bringing the Company's total ownership
of Plant Camp to 89%. As the majority owner, Creatd Partners will
control Plant Camp's operations going forward. Additionally,
Creatd will recognize all Plant Camp revenue in the Company's
consolidated financial statements. Management currently estimates
approximately $1 million in annual revenues from this newly
acquired business.
Plant Camp was first brought to market when its co-founders, two
Consumer Product Goods (CPG) industry executives, identified the
high-growth niche of healthy, kid-friendly foods. To fulfill their
vision, Plant Camp's founders joined forces with the Creatd team,
ultimately becoming the first company to join Creatd Partners, the
Company's corporate venture initiative. With Creatd Partner's
support, including capital investment, operational know-how, and
strategic marketing resources, Plant Camp evolved from concept to
development/formulation in under nine months. Since inception,
Plant Camp's business and operations have been managed remotely
using a platform and technology stack designed by Creatd's product
team, the same team behind the creation of Vocal, the Company's
flagship product.
Commented Creatd CEO Jeremy Frommer, "It is rare to see ideas
become realities. Plant Camp's success thus far is due to the
vision and creativity of its founders, Angela Hein and Dr. Heidi
Brown. Without their commitment and hard work, we surely could not
have brought this product to market."
Plant Camp had its soft launch at the end of the fourth quarter of
2020, and entered the pre-order phase for its first product, a
nutrient-rich mac and cheese for kids. Over the next months, and
with the support of the Creatd team, Plant Camp implemented supply
chain and general operations, as well as a strategic
direct-to-consumer marketing framework that would lay the
foundation for its future scale. Plant Camp officially entered
into the fulfillment phase in January 2021, though a number of
technical supply chain delays related to the pandemic prevented
sales from ramping up in earnest until the beginning of the second
quarter. Since that point, Plant Camp has sold nearly half of its
initial 15,000-unit order, entirely through its e-commerce site,
and expects to sell out of its remaining inventory before the end
of the second quarter.
The rate of revenue growth that Plant Camp has seen to date is
largely attributable to its access to and utilization of Creatd and
Vocal's business intelligence. In the same way that the Company
has yielded such successful campaigns for agency clients like
Moleskine and Fiskars, Plant Camp benefits from the ability to
leverage the rich pool of first-party behavioral data that Vocal, a
community of over one million registered creators, continues to
steadily amass. In particular, Creatd's proficiencies in audience
targeting made it a natural partner for Plant Camp, as its growth
relies on the same internal strategies that the Company applies
internally to grow its Vocal+ subscription program, as well as to
drive successful campaigns for its agency clients.
It was at the start of the second quarter 2021 that Rich Vinchesi,
who was recently named the Lead Acquisition Strategist for Creatd
Partners, initiated discussions with Plant Camp's original founders
regarding purchasing a majority stake, bringing on a new executive
team, and implementing a strategic plan, intended to increase
revenue two- to three-fold within 12 months.
Further commenting on the acquisition, Mr. Frommer continued,
"Plant Camp is our inaugural 'Creatd Partner,' and it took only a
matter of months for us to prove its viability sufficient to
warrant taking a more significant ownership interest. In addition
to other potential Creatd Partners opportunities that are in
development, we have recently announced publicly our plans to
introduce new e-commerce offerings, including by leveraging our
extensive library of archival content. Being able to now
consolidate Plant Camp revenues on our balance sheet represents the
first manifestation of Creatd's newly reconstituted e-commerce
pillar."
Looking ahead to the third quarter 2021, the Company expects to
continue accelerating sales. In the fourth quarter, the Company
expects to begin expanding Plant Camp's offerings by introducing
one or more additional SKUs to its product line, including a
nutrient-rich, kid-friendly pancake mix.
About Creatd Inc.
Headquartered in Fort Lee, NJ, Creatd, Inc. -- https://creatd.com
--is the parent company behind Vocal Ventures, Creatd Partners, and
Recreatd, empowers creators, brands, and entrepreneurs through
technology and partnership. Its flagship product, Vocal, is a
best-in-class creator platform.
Creatd, Inc reported a net loss of $24.21 million for the year
ended Dec. 31, 2020, compared to a net loss of $8.04 million for
the year ended Dec. 31, 2019. As of March 31, 2021, the Company
had $6.44 million in total assets, $4.47 million in total
liabilities, and $1.97 million in stockholders' equity.
Somerset, New Jersey-based Rosenberg Rich Baker Berman, P.A., the
Company's auditor since 2018, issued a "going concern"
qualification in its report dated March 30, 2021, citing that the
Company had a significant accumulated deficit, and has incurred
significant net losses and negative operating cash flows. These
factors raise substantial doubt about the Company's ability to
continue as a going concern for a period of one year from the
issuance of the financial statements.
CRIMSONBIKES LLC: Hearing Today on Continued Cash Collateral Use
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Eastern Division, has authorized CrimsonBikes LLC to use cash and
other collateral, in which Swift Financial LLC, Eastern Bank and
Giant Bicycles, LLC assert an interest, through June 14, 2021.
As adequate protection for the Debtor's use of Cash Collateral, the
Lienholders are granted continuing post-petition replacement liens
and security interests in all postpetition property of the Debtor
and its estate of the same type and kind as constitutes their
prepetition collateral. The Adequate Protection Liens will maintain
the same priority, validity, and enforceability as the prepetition
liens held by the Lienholders in the Collateral. The Adequate
Protection Liens will secure only the claims of the Lienholders, if
any, arising from diminution in the value of the Collateral from
and after the Petition Date due to the Debtor's use of Cash
Collateral. The Adequate Protection Liens will be deemed perfected
effective as of the Petition Date, and no further notice, filing,
or other act will be required to obtain such perfection. The
Adequate Protection Liens will be supplemental of and in addition
to the Lienholders' prepetition Liens. Notwithstanding, the
Adequate Protection Liens will be valid and perfected only to the
extent that the prepetition liens held by the Lienholders in the
Collateral are valid, perfected, and enforceable.
In addition to the Adequate Protection Liens, the Debtor is
authorized to make the adequate protection payments to the
Lienholders as provided in the Budget. The payments will be made
subject to these conditions (i) the application of the payments is
reserved until further Court order, (ii) all parties' rights
regarding whether such adequate protection payments are appropriate
or required are reserved, and (iii) the payments may be subject to
return or repayment, if it is determined that a Lienholder does not
hold a valid, perfected, and enforceable lien on the Collateral.
A continued hearing on the matter is scheduled for June 14 at 10:30
a.m.
A copy of the order is available for free at https://bit.ly/3x4igfK
from PacerMonitor.com.
About CrimsonBikes LLC
CrimsonBikes, LLC owns and operates a bicycle store in the Greater
Boston area in Massachusetts.
An involuntary Chapter 7 bankruptcy petition was filed against
CrimsonBikes, LLC (Bankr. D. Mass. Case No. 21-10278) on March 3,
2021. The petition was filed by creditors SmartEtailing, Inc.;
CVI-TCB Commercial, LLC; and Michael Jaeger.
Petitioning Creditors SmartEtailing and Michael Jaeger are
represented by:
Lynne B. Xerras, Esq.
Holland & Knight LLP
Tel: (617) 523-2700
E-mail: bos-bankruptcy@hklaw.com
Petitioning Creditor CVI-TCB Commercial, LLC is represented by:
Andrew E Goloboy, Esq.
Dunbar Goloboy PC
Tel: (617) 244-3550
E-mail: goloboy@dunbarlawpc.com
The Hon. Janet E Bostwick presides over the case.
CVR PARTNERS: Moody's Rates New $550MM Senior Secured Notes 'B2'
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to the proposed $550
million senior secured notes due 2028 to be issued by CVR Partners,
LP. ("CVR") and CVR Nitrogen Finance Corporation. The company will
use the net proceeds of the proposed note issuance to partially
repay the existing $645 million 9.25% senior secured notes due in
2023. The proposed transaction will be leverage neutral. Moody's
views the transaction as credit positive because it significantly
reduces the maturity in 2023 to $95 million and will also result in
lower interest expense, improving the company's cash flow going
forward.
Assignments:
Issuer: CVR Partners, LP
Senior Secured Regular Bond/Debenture, Assigned B2 (LGD4)
RATINGS RATIONALE
The B2 ratings on the proposed $550 million senior secured notes
due in 2028 and the remaining senior secured notes due in 2023 are
in line with the CFR since the notes will be pari passu with the
older notes and together they will represent the vast majority of
debt in the capital structure. The proposed secured notes have a
first priority lien on substantially all of the company's present
tangible and intangible assets, including the East Dubuque and the
Coffeyville facilities. The proposed notes are also secured on a
second lien basis by the collateral securing the asset-based
revolver. The new and existing notes are guaranteed on a senior
secured basis by all existing and future domestic subsidiaries
other than CVR Nitrogen Finance Corporation, which is a holding
company.
The proposed notes include provisions to allow the company to carve
out assets, such as the Selexol acid gas removal unit and CO2
purification equipment or future additional assets, in order to set
up a structure to monetize tax benefits under Section 45Q of the
tax code aimed at encouraging CO2 sequestration. The company does
not have to use the proceeds of the monetization to pay down debt
under the new indenture. The existing notes, of which approximately
$95 million will be remaining, do not contain the same provisions,
requiring the company to use the proceeds from the monetization of
tax credits to pay down this debt or reinvest in the business. CVR
would need to seek a waiver if it wants to use the proceeds
differently. The company has publicly indicated that it intends to
use some free cash flow and expected proceeds from the 45Q tax
credit monetization to reduce its balance sheet debt with the
intention to pay off the remaining 2023 notes. The new notes also
have less restrictive payment baskets and debt incurrence test that
the existing notes.
The B2 corporate family rating reflects elevated balance sheet debt
load, variable rate master limited partnership (MLP) structure that
dividends most of the excess cash to unitholders and inherent
volatility in CVR's financial performance. Moody's expects credit
metrics to improve with Moody's adjusted leverage declining below
6x from about 8x in the twelve months ended March 31, 2021 amid
higher nitrogen prices, but remain high for the rating. The rating
also reflects small scale as measured by revenues, and limited
production diversity with two production facilities, Coffeyville,
Kansas and East Dubuque, Illinois. CVR also benefits from its
geographic footprint with access to the Corn belt, through the East
Dubuque site location, as well as the Southern plains, via the
Union Pacific and BNSF rail lines from the Coffeyville site.
Despite having only two production sites, CVR benefits from its
back integration into ammonia production and diversity of supply
though the Coffeyville facility faces higher costs when the
Coffeyville refinery cannot fully supply its feedstock needs. The
economics of ammonia production at this site will depend on the
long-term profitability and continued viability of the refinery.
CVR's SGL-2 speculative grade liquidity rating indicates
expectations of good liquidity through 2021, supported by cash
balances, projected operating cash generation and availability
under its $35 million ABL revolver due on September 30, 2022. The
company had $53 million of cash on hand as of March 2021, and about
$24.6 million availability under its revolver, which is subject to
borrowing base limitations. The revolver was undrawn as of March
31, 2021. Moody's does not expect the company to use the revolver,
with the exception of possible support for seasonal working capital
needs. Working capital usage is typically highest in the second and
fourth calendar quarter. The company is projected to generate cash
after covering roughly $60 million in interest (prior to
refinancing) and $20-$25 million in capex and may use excess cash
for distributions or unit repurchases or debt repayment. The
revolver has a springing fixed charge coverage ratio of 1.0x if
availability falls below 10% or $5 million and Moody's do not
expect the covenant to be tested. Moody's expect the company to
address the revolver maturity in a timely manner. All assets are
encumbered by the revolver and the notes.
The stable outlook reflects expectations of improving credit
metrics and cash flow generation in 2021 amid higher crop prices
and stronger demand for fertilizers. The stable outlook also
reflects expectations that the company will successfully execute
the proposed refinancing of the majority of 2023 notes and will
start using free cash flow or proceeds from tax credit monetization
to reduce debt, resulting in a capital structure that positions the
company more solidly in the B2 category.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
A rating upgrade is remote at this time, given the company's small
scale, limited operational diversity and the fixed capital
structure, which will result in weak metrics during the trough of
the cycle. Moody's will consider an upgrade if the company lowers
debt, such that leverage is sustained under 4.5x Debt/EBITDA,
profitability improves and the company continues to prudently
manage liquidity.
Moody's could downgrade the rating if the company does not
demonstrate debt reduction to place it more firmly within the B2
rating category. Moody's also could downgrade the rating if EBITDA
no longer covers interest and liquidity deteriorates such that free
cash flow is persistently negative and CVR's cash balance declines
below $20 million. Moody's could also downgrade the rating if
unplanned outages become an ongoing issue for the company and if
there are significant changes in its key raw material supplier
Coffeyville refinery.
ESG CONSIDERTIONS
As a commodity chemicals manufacturer, Moody's view CVR as having a
very high environmental credit risks and high social credit risks
because its operations could have a negative impact on local
communities. Moody's believes the company has established expertise
in complying with environmental regulations dealing with production
of hazardous substances and air and water emissions and has
incorporated procedures to address them in its operational planning
and business models. CVR currently utilizing nitrous oxide
abatement and carbon dioxide (CO2) sequestration technologies to
mitigate over 1mm metric tons of CO2 equivalents per year and is
seeking to benefit from various opportunities related to lowering
its greenhouse gas emissions, such as qualifying for tax credits
under Section 45Q aimed at encouraging CO2 sequestration. CVR has
moderate governance credit risk due to concentrated ownership,
variable distribution master limited partnership structure (MLP)
and shareholder friendly financial policies.
The principal methodology used in this rating was Chemical Industry
published in March 2019.
CVR, a Delaware limited partnership headquartered in Sugar Land,
Texas, is a producer of nitrogen fertilizer products, principally
Ammonia and UAN. CVR is a public variable distribution master
limited partnership (ticker: UAN) which is 36% owned by CVR Energy
Inc., a publicly traded company 71% owned and controlled by Carl C.
Icahn through Icahn Enterprises L.P. CVR has two operating
facilities located in Coffeyville, Kansas and East Dubuque,
Illinois. CVR had revenues of $336 million for the twelve months
ending March, 2021.
DAWSON COUNTY HOSPITAL: S&P Affirms 'CCC' Long-Term GO Bonds Rating
-------------------------------------------------------------------
S&P Global Ratings revised its outlook to positive from negative
and affirmed its 'CCC' long-term rating on Dawson County Hospital
District, Texas' series 2015 general obligation (GO) bonds.
The bonds are secured by and payable from revenue from an ad
valorem tax on all taxable property in the district, within the
bounds of state statute, of 75 cents per $100 of assessed value
(AV).
"The outlook revision reflects the district's immense liquidity
growth in the past year due to its receipt of various stimulus
funds, namely $8.7 million in CARES Act grants that do not need to
be returned so long as certain criteria is met," said S&P Global
credit analyst Patrick Zagar. Even when excluding $1.6 million in
Medicare advance payments, we calculate $11 million in unrestricted
reserves as of March 31, 2021 (based on unaudited financial
statements), compared with just $903,000 the prior year. This has
propelled days' cash on hand to 221.8 days from 20.6 days given the
district's small operating size. We expect moderation in
performance and balance sheet measures in fiscal 2022 and beyond as
stimulus fund recognition tapers off and cash is spent on
qualifying projects and payables. That said, we expect unrestricted
reserves to stabilize stronger than pre-pandemic levels, possibly
more consistent with a higher rating if coupled with underlying
operating stability. "We believe the district's financial profile
is inherently exposed to greater volatility, which we have observed
in recent years," added Mr. Zagar.
DELUXE CORPORATION: Egan-Jones Keeps B Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Deluxe Corporation.
Headquartered in Shoreview, Minnesota, Deluxe Corporation offers
check printing and related business services.
DEVON ENERGY: Egan-Jones Keeps B- Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on May 28, 2021, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Devon Energy Corporation. EJR also maintained its
'B' rating on commercial paper issued by the Company.
Headquartered in Oklahoma City, Oklahoma, Devon Energy Corporation
operates as an independent energy company that is involved
primarily in oil and gas exploration, development and production,
the transportation of oil, gas, and NGLs and the processing of
natural gas.
DILLARD'S INCORPORATED: Egan-Jones Keeps BB Sr. Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company, on May 26, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Dillard's, Inc.
Headquartered in Little Rock, Arkansas, Dillard's, Inc. operates
retail department stores located primarily in the southwestern,
southeastern, and midwestern United States.
DIOCESE OF ROCKVILLE: Mediator Taps Binder & Schwartz as Counsel
----------------------------------------------------------------
Arthur Gonzalez, the court-appointed special mediator, seeks
approval from the U.S. Bankruptcy Court for the Southern District
of New York to employ Binder & Schwartz, LLP to serve as his legal
counsel in the Chapter 11 case of The Roman Catholic Diocese of
Rockville Centre, New York.
Mr. Gonzalez was appointed as a special mediator to help resolve
claims by sex-abuse victims over real estate and other assets that
have been sold or transferred to other parts of the institution.
Binder & Schwartz's hourly rates are as follows::
Partners $940 per hour
Counsel $725 per hour
Associates $575 to $610 per hour
Paralegals $250 per hour
The firm will be reimbursed for out-of-pocket expenses incurred.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Binder
& Schwartz made the following disclosures:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing
arrangements for this engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic
location of the bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and
material financial terms for the prepetition
engagement, including any adjustments during the 12
months prepetition. If your billing rates and
material financial terms have changed post-petition,
explain the difference and the reasons for the
difference.
Response: Not applicable.
Question: Has your client approved your prospective budget
and staffing plan, and, if so for what budget
period?
Response: Binder & Schwartz will provide such information as
the
special mediator requests or requires and will
submit
budget and staffing plans as required under the U.S.
Trustee Guidelines. The firm will work with the
special
mediator to develop such budgets and staffing plans.
Eric Fisher, Esq., a partner at Binder & Schwartz, 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:
Eric B. Fisher, Esq.
Binder & Schwartz LLP
366 Madison Avenue, 6th Floor
New York, NY 10017
Office: (212) 933-4551/(212) 510-7008
Mobile: (917) 399-3351
Fax: (212) 510-7299
Email: efisher@binderschwartz.com
About The Roman Catholic Diocese of
Rockville Centre, New York
The Roman Catholic Diocese of Rockville Centre, New York, is the
seat of the Roman Catholic Church on Long Island. The Diocese has
been under the leadership of Bishop John O. Barres since February
2017. The State of New York established the Diocese as a religious
corporation in 1958. The Diocese is one of eight Catholic dioceses
in New York, including the Archdiocese of New York. The Diocese's
total Catholic population is approximately 1.4 million, roughly
half of Long Island's total population of 3.0 million. The Diocese
is the eighth largest diocese in the United States when measured by
the number of baptized Catholics.
The Roman Catholic Diocese of Rockville Centre, New York, filed a
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-12345) on Sept.
30, 2020. The Diocese was estimated to have $100 million to $500
million in assets and liabilities as of the filing.
The Hon. Shelley C. Chapman is the case judge.
The Diocese tapped Jones Day as legal counsel, Alvarez & Marsal
North America, LLC, as restructuring advisor, and Sitrick and
Company, Inc., as communications consultant. Epiq Corporate
Restructuring, LLC, is the claims agent.
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors in the Chapter 11 case. The Committee retained
Pachulski Stang Ziehl & Jones LLP as its legal counsel.
DITECH HOLDING: District Court Rules on RMS's Standing
------------------------------------------------------
In the case, Teresa Lavis, Plaintiff, v. Reverse Mortgage
Solutions, LLC, Defendant, Civil Action No. 5:17-cv-00209 (S.D.
W.Va.), District Judge Irene C. Berger, after discovery and the
parties' briefing, finds as follows regarding the questions posed
by the United States Court of Appeals for the Fourth Circuit,
related to RMS's standing to pursue appeal:
1. Whether RMS, SHAP 2018-1, LLC, Mortgage Assets
Management, LLC, or some other party owns the rights to
Ms. Lavis's mortgage?
A. RMS owns the servicing rights to Ms. Lavis's mortgage.
2. If so, what is the extent of those rights?
A. The loan is securitized in a Ginnie Mae pool used to
guarantee mortgage-backed securities.
3. What is RMS's corporate status after the bankruptcy
proceedings?
A. RMS remains a corporation, now wholly owned by
Mortgage Assets Management, LLC.
4. What effect did the bankruptcy proceedings have on Ms.
Lavis's mortgage, RMS, and the other potential parties-
in-interest?
A. The bankruptcy proceedings had no impact on the
status or ownership of Ms. Lavis's mortgage.
Teresa Lavis obtained a reverse mortgage from Reverse Mortgage
Solutions, LLC, in 2013. She received a lump sum of $44,008.96. The
total loan principal, including closing costs and payment of Ms.
Lavis's prior traditional mortgage, was $66,976. Under the terms of
the reverse mortgage, Ms. Lavis was responsible for property taxes
and homeowner's insurance. RMS expended funds related to taxes and
insurance and billed Ms. Lavis, but she fell behind on payments.
RMS began threatening foreclosure, and Ms. Lavis sent a letter,
dated May 12, 2016, notifying RMS that she was exercising her right
to rescind the loan. RMS date stamped the letter May 17, 2016, but
took no action in response.
Ms. Lavis initiated this suit, and a jury trial was held June 11
through June 13, 2018. At the time of trial, her claims related to
rescission, misrepresentation, and violation of the West Virginia
Consumer Credit and Protection Act (WVCCPA). The Court granted a
motion for judgment as a matter of law regarding the rescission
claim, finding that Ms. Lavis had the right to rescind and had
taken the steps required by law to rescind the reverse mortgage.
The jury rendered a verdict finding that Ms. Lavis had not proven
that RMS used fraudulent, deceptive, or misleading representations
to collect a debt or that RMS had failed to honor rescission.
Following the trial, Ms. Lavis moved for judgment as a matter of
law, and the Court granted the motion with respect to RMS's failure
to honor rescission, finding that RMS had not complied with
statutory requirements following Ms. Lavis's rescission notice. The
Court further found that RMS had ceded any right to require Ms.
Lavis to tender the loan proceeds by failing to perform any of the
procedures contemplated by the statute related to rescission and
tender.
During the course of appellate proceedings, RMS and its corporate
holder filed a Chapter 11 bankruptcy petition. The Fourth Circuit
stayed the case. When briefing resumed, Ms. Lavis raised questions
regarding RMS's standing to seek relief, based in part on the
bankruptcy proceedings. The Fourth Circuit issued a limited remand
order, directing the District Court to resolve the questions, as
well as any other arguments related to RMS's standing and ability
to proceed in this litigation.
A copy of the Court's June 4, 2021 Memorandum Opinion is available
at:
https://www.leagle.com/decision/infdco20210608g99
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.
DOMTAR CORPORATION: Egan-Jones Keeps BB+ Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Domtar Corporation.
Headquartered in Fort Mill, South Carolina, Domtar Corporation
manufactures and markets uncoated freesheet paper.
E.Y. REALTY: Gets Interim OK to Hire Gary W. Cruickshank as Counsel
-------------------------------------------------------------------
E.Y. Realty, LLC received interim approval from the U.S. Bankruptcy
Court for the District of Massachusetts to employ the Law Office of
Gary W. Cruickshank to serve as legal counsel in its Chapter 11
case.
The firm's services include:
a. assisting the Debtor in the formulation and presentation of a
plan of reorganization and disclosure statement;
b. assisting the Debtor in the sale of its real estate at 7-9
Elm Ave., Quincy, Mass.;
c. advising the Debtor as to its duties and responsibilities
under the Bankruptcy Code; and
d. performing such other legal services as may be required
during the course of the Debtor's bankruptcy case.
The Law Office of Gary W. Cruickshank will be paid at the rate of
$425 per hour for attorneys and $175 per hour for
paraprofessionals. The firm will also receive reimbursement for
out-of-pocket expenses incurred.
The firm received the sum of $6,738, of which the amount of $3,000
will be placed in a separate escrow account as retainer.
As disclosed in court filings, The Law Office of Gary W.
Cruickshank is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Gary W. Cruickshank, Esq.
Law Office of Gary W. Cruickshank
21 Custom House Street, Suite 920
Boston, MA 02110
Tel: (617) 330-1960
Email: gwc@cruickshank-law.com
About E.Y. Realty LLC
Malden, Mass.-based E.Y. Realty, LLC sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No.
21-10754) on May 24, 2021. Yim Kun Yu, manager, signed the
petition. In the petition, the Debtor disclosed assets of between
$1 million and $10 million and liabilities of the same range. The
Law Office of Gary W. Cruickshank is the Debtor's legal counsel.
ENERPLUS CORPORATION: Egan-Jones Keeps B Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company, on May 28, 2021, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Enerplus Corporation.
Headquartered in Calgary, Canada, Enerplus Corporation is an oil
and gas exploration and production company that owns a large,
diversified portfolio of income generating crude oil and natural
gas properties.
EPHRAIM VASHOVSKY: Public Auction Slated for July 14
----------------------------------------------------
IV-CVCF CS I Trust ("secured party") will offer for sale at a
public auction on July 14, 2021, at 10:00 a.m. (local New York
time), certain personal property assets in which secured party has
been granted a security interest by Ephraim Vashovsky, Chana
Vashovsky, and William Jay Segal ("Debtors"), including certain
limited liability company interests, and certain rights and
property, in Alpha Equity RT LLC ("issuer"). The Debtors have
represented and warranted that the collateral includes 100% of the
limited liability company interests in Alpha Equity.
The sale will be conducted virtually vial online conference.
Instruction on how to become a "qualified bidder" and attend the
auction are set forth in the sale procedures for secured party sale
which are available at
https://www.hilcorealestate.com/properties-for-sale/listing or by
contacting Jonathan Cuticelli of Hilco Real Estate LLC at (203)
561-8737 or email at jcuticelli@hilcoglobal.com.
Qualified bidders will be required to post a $20,000 good faith
deposit prior to bidding, which deposit will be required to be
increased to 10% of the successful bid by the successful bidder
within three business days of the sale.
ETHEMA HEALTH: Closes $230K Convertible Note Financing With Labrys
------------------------------------------------------------------
Ethema Health Corporation closed on a new financing with Labrys for
an 11% $230,000 convertible note including a 10% OID. The note has
a fixed conversion price of $0.004 per share subject to adjustments
should other new financings be done at more favorable terms. The
note is due 12 months from the issuance date. The funding included
full warrant coverage of 52,272,227 shares at a conversion price of
$0.0044 per share for a period of five years.
About Ethema Health
Headquartered in West Palm Beach, Florida, Ethema Health
Corporation -- http://www.ethemahealth.com-- operates in the
behavioral healthcare space specifically in the treatment of
substance use disorders. Ethema developed a unique style of
treatment over the last eight years and has had much success with
in-patient treatment for adults. Ethema will continue to develop
world class programs and techniques for North America.
Ethema reported net income of $3.08 million for the year ended Dec.
31, 2020, a net loss of $14.96 million for the year ended Dec. 31,
2019, and a net loss of $8.18 million for the year ended Dec. 31,
2018. As of March 31, 2021, the Company had $4.09 million in total
assets, $18.52 million in total liabilities, $400,000 in preferred
stock, and a total stockholders' deficit of $14.83 million.
Sunrise, Florida-based Daszkal Bolton LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated April 15, 2021, citing the Company had accumulated deficit of
approximately $42.4 million and negative working capital of
approximately $12.9 million at Dec. 31, 2020, which raises
substantial doubt about its ability to continue as a going concern.
EXPO CONSTRUCTION: Unsecured Creditors to Recover 5% in 60 Months
-----------------------------------------------------------------
Expo Construction Group, LLC, submitted an Amended Plan of
Reorganization and a corresponding Disclosure Statement on June 10,
2021.
Flash Funding, LLC, has filed an adversary proceeding against the
Debtor in Adversary No. 20-3403, alleging that the Debtor violated
Chapter 162 of the Texas Property Code. The pre-trial conference is
set for November 2021, and the trial should be soon thereafter. The
Debtor does not believe that Flash Funding will prevail in this
adversary proceeding. Flash Funding, LLC has litigation pending in
the Harris County District Courts against Melida Taveras, the
principal of the Debtor, for fraud and many other causes of action.
Ms. Taveras has a pending no evidence summary judgment motion that
is set for submission on June 7, 2021.
Class 4(a) consists of General Unsecured Claims. General unsecured
creditors that are allowed will each be paid 5% of their claims
over 60 months. The payments will be monthly and the first payment
is due and payable on the 15th day of the first full month
following the effective date of the plan. Each year, if the
Reorganized Debtor made a profit, after income taxes, and after
making all priority and secured plan payments and normal overhead
payments, the Reorganized Debtor shall pay to the allowed unsecured
creditors their pro-rata share of 25% of the net profit for the
previous year, in twelve monthly payments beginning on June 15th of
the year in which the financial statement is mailed to these
creditors.
Class 4(b) consists of Construction Creditors. Construction
creditors that are allowed have already been paid or are being paid
by the owners of the construction projects from the debtor's
retention funds. The debtor is working with the owners to allow
this to occur. Each year, if the Reorganized Debtor made a profit,
after income taxes, and after making all priority and secured plan
payments and normal overhead payments, the Reorganized Debtor shall
pay to the allowed construction creditors their pro-rata share of
25% of the net profit for the previous year, in twelve monthly
payments beginning on June 15th of the year in which the financial
statement is mailed to these creditors. The retainage balance per
project is as follows: Holiday Inn West = $762,500.00; Holiday Inn
Stafford = $625,000 and Courtyard Marriott = $1,200,000.
Insiders will not be paid any pre-petition claims during the term
of the Plan and their claims will be discharged upon confirmation
of the Plan.
Equity interest holders are parties who hold an ownership interest
(i.e., equity interest) in Expo Construction Group, LLC. The member
is Melida Taveras.
Payments and distributions under the Plan will be funded by through
future income from the operations of the company.
A full-text copy of the Amended Disclosure Statement dated June 10,
2021, is available at https://bit.ly/3pMznA2 from PacerMonitor.com
at no charge.
About Expo Construction Group
Expo Construction Group, LLC, a Houston-based general contractor,
filed a voluntary petition for relief under Chapter 11 of the
United States Code (Bankr. S.D. Texas Case No. 20-34099) on August
18, 2020. Melida Taveras, a managing member, signed the petition.
At the time of filing, the Debtor estimated $100,000 to $500,000 in
assets and $1 million to $10 million in liabilities. The Law
Office of Margaret M. McClure serves as the Debtor's legal counsel.
FIDELITY NATIONAL: Egan-Jones Keeps BB+ Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Fidelity National Information Services, Inc.
Headquartered in Jacksonville, Florida, Fidelity National
Information Services, Inc. is a payment services provider.
FIVE STAR: Stockholders Elect Two Directors at Annual Meeting
-------------------------------------------------------------
At the annual meeting, Five Star Senior Living Inc.'s stockholders
elected Donna D. Fraiche as an independent director in Group II of
the Board of Directors for a three year term of office continuing
until the company's 2024 annual meeting of stockholders and until
her successor is duly elected and qualifies.
The company's stockholders also elected Gerard M. Martin as an
independent director in Group II of the Board for a three-year term
of office continuing until the company's 2024 annual meeting of
stockholders and until his successor is duly elected and
qualifies.
The stockholders also ratified the appointment of RSM US, LLP as
the company's independent auditors to serve for the 2021 fiscal
year.
Also on June 8, 2021, Five Star updated its director compensation
arrangements. Consistent with its director compensation
arrangements, on June 8, 2021, Five Star awarded each of the
company's directors 12,500 common shares valued at $6.15 per share,
the closing price of the common stock on The Nasdaq Stock Market,
LLC on that date.
About Five Star Senior
Headquartered in Newton, Massachusetts, Five Star Senior Living
Inc. -- http://www.fivestarseniorliving.com-- is a senior living
and rehabilitation and wellness services company. As of March 31,
2021, FVE operated 252 senior living communities (29,265 living
units) located in 31 states, including 228 communities (26,963
living units) that it managed and 24 communities (2,302 living
units) that it owned or leased. FVE operates independent living,
assisted living, and memory care communities, continuing care
retirement communities and skilled nursing facilities.
Additionally, FVE's rehabilitation and wellness services segment
includes Ageility Physical Therapy SolutionsTM, or Ageility, a
division of FVE, which provides rehabilitation and wellness
services within FVE communities as well as to external customers.
As of March 31, 2021, Ageility operated 215 outpatient
rehabilitation clinics and 37 inpatient rehabilitation clinics in
28 states. FVE is headquartered in Newton, Massachusetts.
Five Star reported net loss of $7.59 million for the year ended
Dec. 31, 2020, compared to a net loss of $20 for the year ended
Dec. 31, 2019. As of March 31, 2021, the Company had $471.13
million in total assets, $179.07 million in total current
liabilities, $78.44 million in total long-term liabilities, and
$213.63 million in total shareholders' equity.
FIVE STAR: To Continue Managing 120 Sr. Living Communities for DHC
------------------------------------------------------------------
Five Star Senior Living Inc. entered into an Amended and Restated
Master Management Agreement with Diversified Healthcare Trust (DHC)
pursuant to which the Company will continue to manage 120 senior
living communities for DHC, substantially on the terms previously
disclosed.
Also as previously disclosed, the Company agreed to cooperate with
DHC to transition an additional 108 senior living communities that
it currently manages for DHC to other third party operators, which
the Company expects to be completed before year end 2021. The
Company will continue to manage these 108 senior living communities
for DHC until they are transitioned to other third party operators
pursuant to interim management agreements. The Master Management
Agreement and interim management agreements amended and restated,
and consolidated, our prior management agreements and omnibus
agreement with DHC in their entirety. Also on June 9, 2021, the
Company delivered to DHC a related Amended and Restated Guaranty
Agreement pursuant to which it will continue to guarantee the
payment and performance of each of our applicable subsidiary's
obligations under the applicable management agreements.
In connection with the amendments to the Company's management
arrangements, the Company will cease to provide oversight of any
major capital projects and repositionings at the senior living
communities it continues to manage for DHC.
As previously disclosed, on April 9, 2021, Five Star had agreed to
amend its management arrangements with DHC for the senior living
communities that the Company currently manages for DHC's account.
About Five Star Senior
Headquartered in Newton, Massachusetts, Five Star Senior Living
Inc. -- http://www.fivestarseniorliving.com-- is a senior living
and rehabilitation and wellness services company. As of March 31,
2021, FVE operated 252 senior living communities (29,265 living
units) located in 31 states, including 228 communities (26,963
living units) that it managed and 24 communities (2,302 living
units) that it owned or leased. FVE operates independent living,
assisted living, and memory care communities, continuing care
retirement communities and skilled nursing facilities.
Additionally, FVE's rehabilitation and wellness services segment
includes Ageility Physical Therapy SolutionsTM, or Ageility, a
division of FVE, which provides rehabilitation and wellness
services within FVE communities as well as to external customers.
As of March 31, 2021, Ageility operated 215 outpatient
rehabilitation clinics and 37 inpatient rehabilitation clinics in
28 states. FVE is headquartered in Newton, Massachusetts.
Five Star reported net loss of $7.59 million for the year ended
Dec. 31, 2020, compared to a net loss of $20 for the year ended
Dec. 31, 2019. As of March 31, 2021, the Company had $471.13
million in total assets, $179.07 million in total current
liabilities, $78.44 million in total long-term liabilities, and
$213.63 million in total shareholders' equity.
FLAME SEAL: Unsecureds Owed $1.7M to Get Member Certs of Flame LLC
------------------------------------------------------------------
Flame Seal Products, Inc. filed with the U.S. Bankruptcy Court for
the Southern District of Texas a Disclosure Statement accompanying
Chapter 11 Plan of Reorganization on June 10, 2021.
The primary assets of the Company on the date of the bankruptcy
filing are chemical inventories of $342,115.57, accounts receivable
of $214,617.07, and a forced liquidation value of equipment
approximately $125,000.00.
The Debtor's Plan of Reorganization calls for the sale of all
assets of the Debtor to Flame Seal, LLC. Post Confirmation, the
Debtor's present executive, Craig Keiser, will remain. Mr Keyser
will continue to serve as chief executive officer of the company,
with final overall managerial responsibility. His salary will be
$1,000.00 per month.
Class 2 Convenience Class consists of Allowed Unsecured Claims
whose face amount of claims is less than $10,000.00. Class 2 is
unimpaired. The Debtor believes the claims in this Class will total
less than $5,000.00. These claims will be paid in full by Flame
Seal, LLC on the effective date.
Class 3 consists of Unsecured Creditors who choose to Exchange
Unsecured Claims into Member Interests of Flame Seal, LLC. Class 3
is impaired. The Debtor believes the claims in this Class will
total $1,693,878. Flame Seal, LLC is a limited liability company
that is owned by Darryl Schroeder and Robert Kneppler (secured
post-petition creditors of the Debtor and pre-petition unsecured
creditors of the Debtor). The Claims in this Class shall exchange
their unsecured claims to member certificates of Flame Seal, LLC
with each $1,000 dollar increment of claim exchanged for 1 unit
membership interest in Flame Seal, LLC.
Class 4 consists of Equity Interest Holders. Class 4 is unimpaired
and consists of the existing common stock ownership of the Debtor.
The Stock holders will retain their existing shares of common stock
of the Debtor. They will receive no distribution pursuant to the
Plan.
The Debtor's business is able to pay its creditors pursuant to the
Plan, excluding extraordinary expenses associated with the Chapter
11 case, the Debtor has shown a small profit. The operating profit
from the date of filing (Dec. 22, 2020) through March 23, 2021,
before interest, depreciation and extraordinary items, is
approximately $114,821.76 and based on the pending offer from Flame
Seal, LLC, enough cash reserve is planned to ensure that all
creditors will be paid in full per the terms of the Plan of
Reorganization.
A full-text copy of the Disclosure Statement dated June 10, 2021,
is available at https://bit.ly/3gwJCV5 from PacerMonitor.com at no
charge.
Counsel for Debtor:
Richard L. Fuqua, Esq.
Fuqua & Associates, P.C.
5005 Riverway, Suite 250
Houston, TX 77056
Tel: (713) 960-0277
Fax: (713) 960-1064
About Flame Seal Products
Flame Seal Products, Inc., a manufacturer of fire retardant
coatings and penetrants, filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas 20
60094) on Dec. 22, 2020. In the petition signed by Craig Keyser,
chief executive officer, the Debtor disclosed $553,926 in assets
and $1,073,541 in liabilities. Judge Christopher M. Lopez oversees
the case. Fuqua & Associates, P.C., is the Debtor's legal counsel.
FOOT LOCKER: Egan-Jones Hikes Senior Unsecured Ratings to BB+
-------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, upgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Foot Locker, Inc. to BB+ from BB.
Headquartered in New York, New York, Foot Locker, Inc. retails
footwear.
FRONTERA ENERGY: S&P Alters Outlook to Stable, Affirms 'B+' ICR
---------------------------------------------------------------
On June 7, 2021, S&P Global Ratings revised its outlook on Frontera
Energy Corp. to stable from negative and affirmed its 'B+' issuer
credit and issue-level ratings. S&P also assigned a 'B+'
issue-level rating to the proposed senior unsecured bond.
The stable outlook reflects S&P's view that the company will keep
leverage metrics below 3.0x in the next 12-18 months through a more
flexible cost structure in the face of price volatility, as well as
its focus on more profitable markets.
As of the first quarter of 2021, Frontera reported $89.3 million in
adjusted EBITDA, equivalent to a 48.3% EBITDA margin and
approximately 2.1x higher compared to the same quarter of 2020.
This quarter consolidated the results Frontera obtained through its
cost reduction strategies, which include its operational exit from
Peru in the third quarter of 2020, tariff renegotiations with major
suppliers, and the reorganization of its oil pipeline contracts for
crude oil distribution. These strategies translated into a higher
operating netback margin of 51.9% per barrel as of the first
quarter of 2021 (versus 43.3% per barrel in 2020).
S&P said, "In our base-case scenario, we expect this trend in
operating costs to continue, coupled with no additional debt other
than refinancing, leading Frontera's debt to EBITDA to drop toward
2.0x as previously we expected.
"We expect a new normal in Frontera's production rates of
42,000-42,500 barrels of oil equivalent per day (boepd) for 2021
and 2022 (versus 47,800 boepd in 2020 and 70,900 boepd in 2019)
primarily due to the loss of Peru operations and the delayed growth
capital expenditures (capex). Frontera will also start benefiting
from Ecuador and Guyana production prospects. However, even at
these lower production volumes, Frontera will still benefit from
higher benchmark Brent prices forecast at $60 per barrel [bbl] on
average for 2021 (versus $50.8/bbl in 2020), per our S&P Global
revised assumptions. The company will also benefit from its active
hedges on the price of crude oil at 40.0% of total production. This
will allow its revenue generation to bounce back to about $800
million in 2021 and 2022."
During 2020's low economic and operating cycle, Frontera didn't
need to increase its debt requirements to finance potential cash
shortfalls given its execution of liquidity strategies. These
included capex cuts for exploration and growth, its exit from
unprofitable markets (such as Peru), and the reorganization of
pipeline contracts, which were all related to protecting its
liquidity position from the negative effects of low crude oil
prices. These strategies were reflected in Frontera's cash position
of about $337.3 million as of March 31, 2021, (compared to $321.7
million in the same period of 2020 even with lower production this
year), as well as the 22.0% decrease in production costs.
Regarding the recent Colombian protests and blockades, S&P doesn't
think these will materially affect the company's cash, given its
access to pipelines close to operating fields. In S&P's view,
Frontera doesn't have liquidity risk from these recent events.
In the third quarter of 2020, Frontera increased its equity
interest in Infrastructure Ventures Inc. (IVI) to benefit from a
hydrocarbon and dry cargo terminal located in Cartagena, Colombia
(Puerto Bahia). Through the consolidation of this entity, Frontera
added $183 million on its total debt as of March 31, 2021, under a
syndicated secured loan due 2025. As of the date of this report,
the loan is in breach of various (non-public) covenants hence, due
to accounting standards, it's reported on the balance sheet as
short-term debt. S&P believes that Frontera is at low risk of
acceleration of this loan; however, should this occur, the impact
to cash would be non-material, so it continues to view Frontera's
liquidity as adequate.
FUELCELL ENERGY: Incurs $18.9 Million Net Loss in Second Quarter
----------------------------------------------------------------
FuelCell Energy, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $18.92 million on $13.95 million of total revenues for the three
months ended April 30, 2021, compared to a net loss of $14.77
million on $18.88 million of total revenues for the three months
ended April 30, 2020.
For the six months ended April 30, 2021, the Company reported a net
loss of $64.88 million on $28.83 million of total revenues compared
to a net loss of $54.92 million on $35.14 million of total revenues
for the six months ended April 30, 2020.
As of April 30, 2021, the Company had $535.60 million in total
assets, $166.69 million in total liabilities, $59.86 million in
redeemable series B preferred stock, and $309.05 million in total
stockholders' equity.
Cash and cash equivalents and restricted cash and cash equivalents
totaled $171.2 million as of April 30, 2021 compared to $192.1
million as of Oct. 31, 2020. As of April 30, 2021, restricted cash
and cash equivalents was $32.1 million, of which $17.4 million was
classified as current and $14.7 million was classified as
non-current, compared to $42.2 million of restricted cash and cash
equivalents as of Oct. 31, 2020, of which $9.2 million was
classified as current and $33.0 million was classified as
non-current.
Management Commentary
"We remain focused on execution of our Powerhouse business
strategy, including advancing in-flight projects in our backlog.
During the quarter, we added 2.8 megawatts to our generation
backlog with a new project in Derby, Connecticut," said Mr. Jason
Few, president and CEO. "We continue to increase our investment in
research and development towards the commercialization of our solid
oxide power generation, storage and hydrogen electrolysis
platforms. We also continue to focus on growing our commercial
capabilities. We have increased our annualized production rate
from 17 MWs at the end of fiscal 2020 to 32 MWs as of April 30,
2021, with an objective of reaching an annualized production rate
of 45 MW by the end of this fiscal year, and have invested in our
generation assets to improve operating output."
"We are firmly committed to achieving revenue growth by bringing
projects online this year and positioning our portfolio to meet the
significant market opportunities that our proprietary technology
solutions are well positioned to solve," continued Mr. Few. "Under
our Powerhouse business strategy, we continue to build a foundation
for future success, having strengthened our financial foundation,
increased our manufacturing output, and increased our talent in
critical areas like sales and engineering. We are focused on
expanding our geographic markets and driving commercial success in
the business by advancing the availability of our Advanced
Technologies solutions, including distributed hydrogen, long
duration energy storage, and hydrogen production. Our scalable
carbonate fuel cell platforms provide a "here now" solution for the
increasing requirement of clean, distributed power and hydrogen
generation to strengthen and supplement the grid power and enable
the hydrogen economy. We believe our proprietary technologies will
play a major role in the decarbonization of the grid and generate
revenue growth in the future by addressing the promising market
opportunities in the global energy transition that is currently
underway."
Mr. Few added, "I am proud to announce that in addition to being
ISO9001:2015 and ISO14001:2015 certified (for quality management
and environmental management), we are now also ISO 45001:2018
certified, the world's international standard for occupational
health and safety. This certification is important to our company
as it further supports the importance we place on safety in our
everyday practices. Our platforms are designed, manufactured and
constructed to ensure safe and reliable operations. The ISO
45001:2018 occupational health and safety management system
certification validates FuelCell Energy's leadership and commitment
to put the health and safety of our team, partners, stakeholders,
visitors and the community at the forefront of our priorities."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/886128/000155837021008175/fcel-20210430x10q.htm
About FuelCell Energy
Headquartered in Danbury, Connecticut, FuelCell Energy, Inc. --
http://www.fuelcellenergy.com-- is a global developer of
environmentally responsible distributed baseload power solutions
through its proprietary fuel cell technology. The Company targets
large-scale power users with its megawatt-class installations
globally, and currently offer sub-megawatt solutions for smaller
power consumers in Europe. The Company develops turn-key
distributed power generation solutions and operate and provide
comprehensive service for the life of the power plant.
FuelCell Energy reported a net loss attributable to common
stockholders of $92.44 million for the year ended Oct. 31, 2020, a
net loss attributable to common stockholders of $100.24 million for
the year ended Oct. 31, 2019, and a net loss attributable to common
stockholders of $62.17 million for the year ended Oct. 31, 2018. As
of Jan. 31, 2021, the Company had $552.39 million in total assets,
$165.03 million in total liabilities, $59.85 million in redeemable
series B preferred stock, and $327.51 million in total
stockholders' equity.
FUSE MEDICAL: Stockholders Elect Four Directors at Annual Meeting
-----------------------------------------------------------------
Fuse Medical, Inc. held its 2021 Annual Meeting of Stockholders on
June 9, 2021, at which the stockholders elected Renato V. Bosita,
Jr., MD, Mark W. Brooks, William E. McLaughlin, III, and
Christopher C. Reeg as directors of the Company for a one-year term
expiring at the 2022 Annual Meeting of Stockholders.
The selection of Armanino to act as independent registered public
accounting firm for the Company for the fiscal year ending Dec. 31,
2021 was ratified.
About Fuse Medical
Headquartered in Richardson, Texas, Fuse Medical, Inc. --
www.fusemedical.com -- is a manufacturer and distributor of
innovative medical devices for the orthopedic and spine
marketplace. The Company provides a comprehensive portfolio of
products in the orthopedic total joints, sports medicine, trauma,
foot and ankle space, as well as, degenerative and deformity spine,
osteobiologics, wound care, and regenerative medicine products.
Fuse Medical reported a net loss of $1.43 million for the year
ended Dec. 31, 2020, compared to a net loss of $3.32 million for
the year ended Dec. 31, 2019. As of March 31, 2021, the Company
had $17.46 million in total assets, $19.91 million in total
liabilities, and a total stockholders' deficit of $2.45 million.
FUTURUM COMMUNICATIONS: Wins Cash Collateral Thru June 28
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Colorado has
authorized Futurum Communications Corp. to use cash collateral on
an interim basis in accordance with the budget, with a 15% variance
through June 28, 2021.
The Debtor is authorized and directed to make the adequate
protection payments identified in the Budget for the Interim
Period. The Debtor will hold $84,000 of the monthly distribution
from Fundamental Holdings, LLC, dba Peak, in trust for the benefit
of Jayson Baker until the monthly payment is made to Baker, and no
other creditor or party in interest will have any interest in the
Baker Funds.
Collegiate Peaks Bank, the Lender, is granted replacement liens
with the same priority and validity as its pre-petition liens in
the Debtor's post-petition assets, to the extent, but only to the
extent, of any diminution in the value of Collegiate Peaks'
interest in collateral that is property of the Debtor's estate, as
it existed on the date of the filing of Debtor's petition, provided
that the replacement liens will not include any avoidance actions
under Chapter 5 of the Bankruptcy Code. In addition, the Debtor
will pay to Collegiate Peaks any grant funds that the Debtor
receives in the Interim Period.
Leaf Capital Funding, LLC, is granted replacement liens with the
same priority and validity as its pre-petition liens in the
Debtor's post-petition assets, to the extent, but only to the
extent, of any diminution in the value of Leaf's interest in
collateral that is property of the Debtor's estate, as it existed
on the date of the filing of the Debtor's petition, provided that
the replacement liens will not include any avoidance actions.
Leaf, Consara Financing, LLC, Baker, and Collegiate Peaks, as Cash
Collateral Creditors, are granted superpriority administrative
expenses under 11 U.S.C. section 507(b) to the extent, but only to
the extent, of any diminution in value of their respective interest
in collateral that is property of the Debtor's estate, as it
existed on the date of the filing of Debtor's petition.
The Colorado Department of Revenue asserts that sales taxes
collected for CDOR's benefit are trust funds and not estate
property pursuant to Colo. Rev. Stat. 39-26-117(1)(a).
Notwithstanding anything else in the Order, no party will have an
interest in the trust funds and no creditor will have a replacement
lien on such trust funds. CDOR also asserts a senior lien for sales
taxes owed on the petition date. CDOR is granted replacement liens
with the same priority and validity as its pre-petition liens in
the Debtor's post-petition assets, to the extent, but only to the
extent, of any diminution in the value of CDOR's interest in
collateral that is property of the Debtor's estate.
A final hearing on the Debtor's Motion for use of cash collateral
is scheduled for June 29 at 9 a.m.
A copy of the order and the Debtor's budget is available for free
at https://bit.ly/3x8pNtT from PacerMonitor.com.
The Debtor projects total revenue of $1,774,682 and total expenses
of $1,167,936 through the week of August 30.
About Futurum Communications Corporation
Futurum Communications Corporation -- https://forethought.net -- is
an independent locally owned internet, cloud and communications
service provider with offices in Denver, Grand Junction and
Durango, offering a portfolio of enterprise-level cloud hosting,
colocation, Internet, voice and data solutions. Futurum provides
services to end users through both direct provision or service over
company-owned facilities -- "last mile" -- copper, fiber optic
cable, and wireless; and resale of network elements from companies
such as CenturyLink, Zayo and others. Its residential customers
generally operate on a month-to-month basis, while commercial and
government customers generally have longer term contracts with
various end dates.
Futurum Communications sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Colo. Case No. 21-11331) on March 21,
2021. Jawaid Bazyar, 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 Kimberley H. Tyson oversees the case.
The Debtor tapped Hoff Law Offices, P.C. as its legal counsel and
Cook Forensics, LLC as its accountant.
GAINCO INC: Wins Cash Collateral Access on Interim Basis
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Corpus Christi Division, has authorized Gainco, Inc., to use cash
collateral on an interim basis to avoid immediate and irreparable
harm to the Debtor and its estate pending a final hearing.
The Court directed the Debtor to expend the temporary cash
collateral only pursuant to the terms of the current order and the
interim budget. At the end of every week, commencing on Friday of
the first full calendar week following the Petition Date, the
Debtor will deliver to the Subchapter V Trustee and Traditions
Commercial Finance, LLC, variance reports showing actual cash
receipts and disbursements for the immediately preceding week,
noting therein all variances from amounts set forth for such
period(s) in the Interim Budget.
As an adequate protection payment, the Debtor will pay to
Traditions $15,000 in June 2021. The Debtor and Traditions each
reserve their rights with respect to how such adequate protection
payment will be allocated with regard to any claims asserted by
Traditions.
Pursuant to the setoff right of First Community Bank and also as an
adequate protection payment -- to be applied against FCB's allowed
claim -- the Debtor will pay to FCB $2,101.11 in June 2021.
The Debtor is authorized to make a $5,000 post-petition retainer
payment to the Law Offices of William B. Kingman, P.C. The Debtor
will deliver the payment to the firm's IOLTA account to be held
until fees are approved pursuant to a subsequent court order.
The Debtor is also authorized to make a $2,500 post-petition
retainer to Ruble, Leadbetter & Associates P.C. as proposed
accountants for the Debtor. The Debtor will deliver the payment to
Kingman's IOLTA account to be held until fees are approved pursuant
to the subsequent court order.
As additional adequate protection for alleged cash collateral used,
Traditions, Yellowstone Capital LLC, Payroll Funding Company LLC,
CHTD Company, FCB and Affiliated Funding Corporation -- alleged
secured creditors who asserted or assert a security interest in
cash collateral -- are granted a valid, perfected, and
non-avoidable replacement lien and security interest on all of the
Debtor's accounts, receivables and proceeds thereof to the extent
acquired after the Petition Date. The replacement liens will be in
the same priority as existed on the Petition Date. However,
notwithstanding any provisions of the Interim Order, the ad valorem
tax liens currently held by San Patricio County incident to any
real property or tangible personal property will neither be primed
by nor subordinated to any liens granted.
A continued hearing on the use of cash collateral will be held on
July 9 at 11 a.m. It is anticipated that all persons will appear
telephonically and also may appear via video at this hearing.
Audio communication will be by use of the Court's regular dial-in
number. Video participation is available via GoToMeeting.
A copy of the Order is available for free at https://bit.ly/3goVuZ6
from PacerMonitor.com.
About Gainco, Inc.
Gainco, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-21122 on April 30,
2021. In the petition signed by Theresa Nix, president, the Debtor
disclosed up to $1 million in assets and up to $10 million in
liabilities.
Judge David R. Jones oversees the case.
The Law Offices of William B. Kingman, P.C. is the Debtor's
counsel.
GAMESTOP CORP: All Three Proposals Approved at Annual Meeting
-------------------------------------------------------------
GameStop Corp held its annual meeting of stockholders on June 9,
2021, at which the stockholders:
(1) elected George E. Sherman, Alain (Alan) Attal, Lawrence
(Larry) Cheng, Ryan Cohen, James (Jim) Grube, and Yang Xu
as directors to serve until the next annual meeting and
until
such director's successor is elected and qualified:;
(2) approved, on an advisory, non-binding basis, the compensation
of the named executive officers of the Company; and
(3) approved the ratification of the Audit Committee's
appointment
of Deloitte & Touche LLP as the Company's independent
registered public accounting firm for the Company's fiscal
year ending Jan. 29, 2022.
About GameStop
GameStop Corp., a Fortune 500 company headquartered in Grapevine,
Texas, is a specialty retailer offering games and entertainment
products through its E-Commerce properties and thousands of
stores.
GameStop reported a net loss of $215.3 million for fiscal year
2020, compared to a net loss of $470.9 million for fiscal year
2019, and a net loss of $673 million for fiscal year 2018. As of
May 1, 2021, the Company had $2.56 billion in total assets, $1.68
billion in total liabilities, and $879.5 million in total
stockholders' equity.
GAMESTOP CORP: Files Offering Program Prospectus Supplement
-----------------------------------------------------------
GameStop Corp. filed a prospectus supplement with the Securities
and Exchange Commission on June 9, 2021, in connection with the
Company's "at-the-market" offering program for the offer and sale
from time to time through Jefferies LLC of up to 5,000,000 shares
of the Company's Class A common stock, par value $0.001 per share,
pursuant to the Company's existing Open Market Sale Agreement with
the Sales Agent dated Dec. 8, 2020. Prior to June 9, 2021, an
aggregate of 3,500,000 Common Shares were sold under the Sales
Agreement for aggregate gross proceeds of approximately
$556,691,221.
The Common Shares are being offered and sold pursuant to the
Company's automatic shelf registration statement on Form S-3 filed
with the SEC on Dec. 8, 2020, which became effective immediately
upon filing.
From time to time during the term of the Sale Agreement, the
Company may deliver a placement notice to the Sales Agent
specifying the length of the selling period, the amount of Common
Shares to be sold, any limitation on the number of shares that may
be sold in any one trading day and the minimum price below which
sales may not be made. Upon its acceptance of the placement notice
from the Company, the Sales Agent will use its commercially
reasonable efforts consistent with its normal trading and sales
practices to solicit offers to purchase Common Shares, under the
terms and subject to the conditions set forth in the Sale
Agreement, by means of ordinary brokers' transactions on the New
York Stock Exchange, in negotiated transactions or in transactions
that are deemed to be an "at the market offering" as defined in
Rule 415(a)(4) under the Securities, in block transactions, sales
made directly on the Principal Market or sales made into any other
existing trading markets of the Common Shares. The Company may
instruct the Sales Agent not to sell Common Shares if the sales
cannot be effected at or above the price designated by the Company
in any placement notice. The Company or the Sales Agent may
suspend the ATM Offering at any time upon proper notice and subject
to other conditions.
The Company will pay the Sales Agent a commission for its services
in acting as agent in the sale of Common Shares. The Sales Agent
will be entitled to compensation in an amount up to 1.5 percent of
the gross sales price of all of the Common Shares sold through it
under the Sale Agreement.
Under the terms of the Sale Agreement, the Company also may sell
Common Shares to the Sales Agent, as principal for its own account,
at a price to be agreed upon at the time of sale. If the Company
sells Common Shares to the Sales Agent, as principal, it will enter
into a separate sales agreement with the Sales Agent and the
Company will describe such agreement in a separate prospectus
supplement or pricing supplement.
The ATM Offering will terminate upon the earlier of (1) the sale of
all Common Shares subject to the Sale Agreement or (2) termination
of the Sale Agreement. The Sale Agreement may be terminated by the
Sales Agent or the Company at any time upon ten days' notice, and
by the Sales Agent at any time in certain circumstances, including
suspension of trading of Common Shares on the NYSE or the
occurrence of a material adverse change in the Company’s
business.
The Company made certain customary representations, warranties and
covenants concerning the Company and the Common Shares in the Sale
Agreement and also agreed to indemnify the Sales Agent against
certain liabilities, including liabilities under the Securities
Act.
Troutman Pepper Hamilton Sanders LLP, counsel to the Company, has
issued a legal opinion relating to the legality of the issuance and
the sale of the Common Shares.
The Company intends to use the net proceeds from the ATM Offering,
if any, for general corporate purposes as well as for investing in
growth initiatives and maintaining a strong balance sheet.
About GameStop
GameStop Corp., a Fortune 500 company headquartered in Grapevine,
Texas, is a specialty retailer offering games and entertainment
products through its E-Commerce properties and thousands of
stores.
GameStop reported a net loss of $215.3 million for fiscal year
2020, compared to a net loss of $470.9 million for fiscal year
2019, and a net loss of $673 million for fiscal year 2018. As of
May 1, 2021, the Company had $2.56 billion in total assets, $1.68
billion in total liabilities, and $879.5 million in total
stockholders' equity.
GEMINI HDPE: S&P Alters Outlook to Stable, Affirms BB Loan Rating
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' issue-level rating on Gemini
HDPE LLC's loan and revised the outlook to stable from negative.
The stable outlook reflects the link to the guarantor of the
project's tolling agreement, INEOS GH.
INEOS Group Holdings S.A. (INEOS GH, BB/Stable/--) is the sole
indirect owner (and guarantor of the tolling obligation) of Gemini
HDPE LLC.
S&P Global Ratings bases its analysis of Gemini on the strength of
INEOS GH as the guarantor of the tolling obligation. On May 27,
2021, S&P affirmed the 'BB' long-term issuer credit rating on INEOS
GH and revised the outlook to stable from negative.
Gemini HDPE LLC is a high-density polyethylene (HDPE) facility
located in La Porte, Texas. Construction of the facility was
completed in 2017. Gemini produces a wide range of HDPE products
but primarily focuses on bimodal-grade HDPE, which has superior
properties, allowing it to be used in applications that command a
price premium relative commodity HDPE grades. The project mainly
sells its HDPE products in the North American market.
The rating (and outlook) on Gemini's loan is capped at that of the
guarantor of the tolling obligation, INEOS GH. S&P said, "On May
27, 2021, we affirmed the 'BB' rating on INEOS GH and revised the
outlook to stable from negative. The outlook revision indicates
that, in our view, cash flow generation and credit quality are
improving across the wider INEOS Group LLC. As a result, we are
affirming our 'BB' issue-level rating on Gemini and revising the
outlook to stable from negative."
The stable outlook reflects the link to the guarantor of the
project's tolling agreement, INEOS Group Holdings S.A. The
guarantor pays all debt service components (principal, interest,
and financing costs), as well as variable and fixed manufacturing
costs and any other necessary operating costs. S&P expects the
rating on Gemini to move in lockstep with any rating change on
INEOS GH.
S&P could revise the rating outlook to negative on Gemini's term
loan B or lower the rating should it does the same for INEOS GH.
S&P could revise the rating outlook on Gemini's term loan B to
positive or raise the rating should it does the same for INEOS GH.
GENESIS PLACE: August 3 Pretrial Conference on Plan Confirmation
----------------------------------------------------------------
On May 27, 2021, debtor Genesis Place, LLC, filed with the U.S.
Bankruptcy Court for the Western District of Tennessee an Amended
Disclosure Statement referring to a Plan.
On June 8, 2021, Judge Jimmy L. Croom approved the Amended
Disclosure Statement and established the following dates and
deadlines:
* July 23, 2021, is fixed as the last day for filing written
objections to the plan, and for filing written acceptances or
rejections of the plan.
* Aug. 3, 2021, at 10:00 a.m., by telephone is the Pretrial
Conference on confirmation of the plan.
* Not less than 7 days prior to the scheduled confirmation
hearing, the proponent of the plan shall file with the Bankruptcy
Court Clerk a summary tabulation of ballots.
A copy of the order dated June 8, 2021, is available at
https://bit.ly/3gpKefc from PacerMonitor.com at no charge.
Attorneys for Genesis Place:
Michael P. Coury
Ricky L. Hutchens
GLANKLER BROWN, PLLC
6000 Poplar Avenue
Suite 400
Memphis, TN 38119
Tel: (901) 576-1886
Fax: (901) 525-2389
E-mail: mcoury@glankler.com
About Genesis Place
Genesis Place, LLC, classifies its business as single asset real
estate (as defined in 11 U.S.C. Section 101(51B)).
Genesis Place sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Tenn. Case No. 20-24485) on Sept. 15, 2020. At
the time of the filing, the Debtor disclosed assets of between $1
million and $10 million and liabilities of the same range. Judge
David S. Kennedy oversees the case. The Debtor tapped Glanker
Brown, PLLC as legal counsel and Valbridge Property Advisors as
valuation consultant and expert appraiser.
GENESIS WEIGHT: Gets OK to Hire David Jennis as Legal Counsel
-------------------------------------------------------------
Genesis Weight Loss Centers, LLC received approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ David
Jennis, P.A. to serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. taking all necessary action to protect and preserve the
estate of the Debtor, including the prosecution of actions on its
behalf, the defense of any actions commenced against the Debtor,
negotiations concerning any litigation in which the Debtor may be
involved, and objections, when appropriate, to claims filed against
the estate;
b. preparing legal papers;
c. advising the Debtor with regard to its rights and obligations
under the Bankruptcy Code;
d. preparing and filing schedules of assets and liabilities;
e. preparing and filing a Chapter 11 plan and disclosure
statement, if required; and
f. other necessary legal services.
The firm's hourly rates are as follows:
Attorneys $275 to $500 per hour
Paralegals $120 to $160 per hour
David Jennis will also receive reimbursement for out-of-pocket
expenses incurred.
Daniel Etlinger, Esq., a partner at David Jennis, 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:
David S. Jennis, Esq.
Daniel E. Etlinger, Esq.
David Jennis, P.A.
606 East Madison Street
Tampa, FL 33602
Telephone: (813) 229-2800
Facsimile: (813) 405-4046
Email: detlinger@jennislaw.com
ecf@jennislaw.com
About Genesis Weight Loss Centers
Genesis Weight Loss Centers, LLC filed a Chapter 11 bankruptcy
petition (Bankr. M.D. Fla. Case No. 21-02820) on May 28, 2021,
disclosing total assets of up to $100,000 and total liabilities of
up to $1 million. The Debtor is represented by David Jennis, P.A.
GETWELL PHARMACY: Wins Cash Collateral Access Thru June 29
----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Tennessee,
Western Division, has authorized Getwell Pharmacy of Tennessee to
use the cash collateral of AmerisourceBergen Drug Corporation and
provide adequate protection.
The Debtor is authorized to use the remaining proceeds of the
Paycheck Protection Program (PPP) loan -- $26,134.88 -- for
obligations incurred during the period from the Petition Date
through June 29, 2021, solely in the amounts and purposes set forth
in the Budget. Only after the remaining PPP loan proceeds has been
exhausted will the Debtor be authorized to use cash collateral as
that term is defined in section 363(a) of the Bankruptcy Code for
obligations incurred during the period from the Petition Date
through June 29, 2021, and solely in the amounts and for the
purposes set forth in the Budget.
As adequate protection of ABDC's interests against diminution in
value of its interests in the Property and Cash Collateral,
pursuant to Sections 361 and 363(e), the Debtor is authorized to,
grant, and upon entry of the Interim Order will be deemed to have
granted to ABDC continuing valid, binding, enforceable,
non-avoidable, and automatically perfected postpetition replacement
security interests in and liens, to the extent of and of the same
priority as its pre-petition security interests and liens in and on
the assets of the Debtor on any and all presently owned and
hereafter acquired assets and all proceeds thereof to the extent
that Lender maintained liens on such assets prior to the Petition
Date.
A copy of the order is available for free at https://bit.ly/2Tjd8FZ
from PacerMonitor.com.
About Getwell Pharmacy of Tennessee
Getwell Pharmacy of Tennessee sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Tenn. Case No. 21-21598) on
March 13, 2021. In the petition signed by Rick Chambers, president,
the Debtor disclosed up tp $500,000 in assets and up to $1 million
in liabilities.
Judge M. Ruthie Hagan oversees the case.
Steven N. Douglass, Esq., at Harris Shelton, is the Debtor's
counsel.
AmerisourceBergen Drug Corporation is represented in the case by:
Morton R. Branzburg, Esq.
Klehr Harrison Harvey Branzburg LLP
1835 Market Street, Suite 1400
Philadelphia, PA 19103
Tel: (215) 569-2700
E-mail: mbranzburg@Klehr.com
GL BRANDS: Amended Joint Reorganizing Plan Confirmed by Judge
-------------------------------------------------------------
Judge Edward L. Morris has entered findings of fact, conclusions of
law and order confirming the Second Amended Joint Plan of
Reorganization of GL Brands, Inc., f/k/a Freedom Leaf, Inc., and
its debtor-affiliates.
The Stalking Horse Bid process was appropriate under the
circumstances of the case and should be approved as adequate. The
Stalking Horse Bid submitted by Merida Capital Partners III, LP and
Merida Capital Partners QP, LP, is the highest and best bid for the
Assets, as defined in Article 1.11 of Plan.
The Debtors' proposed Plan Modification and Compromise and
Settlement Agreement with Bemeir, LLC resulted from good faith
negotiations, conducted at arm's length. The amount that the
Debtors have agreed to pay Bemeir is not large enough to affect the
feasibility of the Plan.
All creditors entitled to vote on the Plan were given a full and
fair opportunity to do so. All parties in interest were given a
full and fair opportunity to submit objections, if any. The
Objection of Dallas County was resolved by agreement. Accordingly,
there is no opposition to the Plan.
The Plan complies with the applicable provisions of Title 11 of the
United States Code. The Plan was proposed in good faith and not by
any means forbidden by law.
A copy of the Plan Confirmation Order dated June 8, 2021, is
available at https://bit.ly/3x8u0O6 from PacerMonitor.com at no
charge.
Debtors' Counsel:
Robert A. Simon, Esq.
Whitaker Chalk Swindle & Schwartz, PLLC
301 Commerce Street, Suite 3500
Fort Worth, TX 76102
Telephone: (817) 878-0543
Facsimile: (817) 878-0501
Email: rsimon@whitakerchalk.com
About GL Brands
GL Brands -- https://www.glbrands.com/ -- formerly d/b/a Freedom
Leaf, is a global hemp consumer packaged goods company engaged in
the development and sale of cannabis-derived wellness products.
Through its premier brands Green Lotus and Irie CBD, GL Brands
delivers a full portfolio of hemp-derived CBD products, including
tinctures, soft gels, gummies, sparkling beverages, vapes, flower
and topical segments to promote greater wellness and balance, in
the U.S. and throughout the world.
On Dec. 17, 2020, GL Brands, Inc., et al., sought Chapter 11
protection (Bankr. N.D. Tex. Lead Case No. 20-43800). GL Brands
disclosed total assets of $100,000 to $500,000 and total
liabilities of $10 million to $50 million. The petition was signed
by CEO Carlos Frias.
Judge Edward L. Morris oversees the case.
The Debtors tapped Robert A. Simon, Esq., at Whitaker Chalk Swindle
and Schwartz, as bankruptcy counsel.
GLATFELTER CORPORATION: Egan-Jones Keeps BB Sr. Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Glatfelter Corporation.
Headquartered in Charlotte, North Carolina, Glatfelter Corporation
manufactures and supplies papers and engineered materials.
GREEN PLAINS: Egan-Jones Keeps B- Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Green Plains Inc. EJR also maintained its 'B' rating
on commercial paper issued by the Company.
Headquartered in Omaha, Nebraska, Green Plains Inc. owns and
operates ethanol plants located in the Midwest U.S.
GROUPE SOLMAX: Moody's Assigns First Time B2 Corp. Family Rating
----------------------------------------------------------------
Moody's Investors Service assigned ratings to Groupe Solmax Inc.,
consisting of a B2 corporate family rating, B2-PD probability of
default rating, and a B2 rating for the $535 million term loan and
$100 million revolver. The outlook is stable. This is the first
time Moody's has assigned ratings to the company.
Solmax will use the proceeds of the term loan and an equity
contribution from its sponsors to purchase TenCate Geosynthetics
from Royal Ten Cate (RTC, B2 stable), and to repay all of Solmax's
existing debt. The Royal Ten Cate geosynthetics business generated
about $380 million (EUR310 million) of revenues in 2020 (about 30%
of RTC's total revenues) and will roughly double Solmax's EBITDA.
Assignments:
Issuer: Groupe Solmax Inc.
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3)
Senior Secured 1st Lien Revolving Credit Facility, Assigned B2
(LGD3)
Outlook Actions:
Issuer: Groupe Solmax Inc.
Outlook, Assigned Stable
RATINGS RATIONALE
Groupe Solmax (Solmax, B2 rating) benefits from: (1) a diversified
business model through multiple geosynthetic product types with
significant geographical diversification; (2) exposure to numerous
end markets including infrastructure, waste management, mining and
construction that helps offset their inherent cyclicality; (3) a
diverse customer base with the top ten customers making up less
than 25% of revenue and which include a number of large mining and
waste management companies; and (4) good liquidity. Solmax is
constrained by: (1) relatively short financial history with size
and scale largely achieved in 2018 following a sizable acquisition;
(2) high pro-forma leverage (adjusted debt/EBITDA of 5x at
transaction close) that Moody's expect will remain at this level
through 2022; (3) relatively small size (pro forma LTM Apr-2021
EBITDA around $125 million) and concentration in the niche
geosynthetic market; (4) exposure to raw material costs which is
mostly mitigated by pass-through pricing for its products.
Solmax has good liquidity. Solmax's liquidity is supported by cash
of approximately $15 million at the closing of the transaction,
full availability under its $100 million revolver due 2026, and
Moody's expected free cash flow of around $15 million through to
mid-2022. Moody's expect Solmax to use the revolver from April/May
to the end of September/October for working capital purposes, and
to fully repay the drawing by year end. Solmax does not have to
comply with any financial covenants unless revolver drawings rises
above the 35% commitment amount, which mandates compliance with a
first lien leverage ratio of less than 7.5x. Moody's do not expect
this covenant to be applicable through to mid-2022, but there is
good cushion if triggered. Solmax has limited ability to generate
liquidity from asset sales as its assets are encumbered. Solmax has
no refinancing risk until 2026 when its revolving credit facility
is due.
Governance considerations for Solmax include private ownership and
the potential for a more aggressive capital structure in comparison
to public corporations. Moody's also considered the reduced
financial disclosure requirements for a private company in
comparison to a publicly-traded entity, and the short operating and
financial history of Solmax.
The first-lien pari passu term loan and revolving credit facility
are rated B2, the same as the CFR, because it makes up the
preponderance of the debt structure.
The credit facilities are expected to contain covenant flexibility
for transactions not disclosed at this time that could adversely
affect creditors, including the omission of certain material lender
protections.
The stable outlook reflects Moody's view that it will maintain its
leverage around 5x through 2022, as the company looks to execute
its merger.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if debt to EBITDA is below 4x, free
cash flow to debt is above 5%, maintains good liquidity, and
successfully integrates RTC's geosynthetics business and
demonstrates a track record of consistent free cash flow and
decreasing leverage
The ratings could be downgraded if debt to EBITDA is below 6x, free
cash flow to debt is negative, or liquidity weakens.
Groupe Solmax Inc. (Solmax) is a manufacturer of geosynthetic
products that are large sheets of plastics used to protect and
fortify in various end markets. The company is privately owned by
Fonds de Solidarite des Travailleurs Du Quebec, CDP Investissements
Inc. (wholly owned by Caisse de depot et placement du Quebec), and
indirectly the founder, with all three having equal ownership. The
company's head office is in Varennes, Quebec, Canada.
The principal methodology used in these ratings was Manufacturing
Methodology published in March 2020.
GROUPE SOLMAX: S&P Assigns Preliminary 'B' ICR, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' issue-level rating,
and '3' recovery rating, to Quebec-based Groupe Solmax Inc.'s
proposed US$535 million first-lien loan and US$100 million
revolving credit facility.
The stable outlook reflects S&P's view of the favorable end-market
demand for Solmax's products, led by stronger macroeconomic growth,
and increased project spending in the company's core water, waste,
and infrastructure end markets, resulting in leverage of just over
5x and positive free cash flow in 2021 and 2022.
Solmax's acquisition of TenCate could lead to elevated leverage for
the company. Privately owned Solmax agreed to acquire TenCate for a
purchase price of US$518 million, primarily funded with debt.
Solmax plans to issue a US$535 million senior secured term loan and
use a US$140 million cash equity contribution from its sponsors to
fund the acquisition. Proceeds from the term loan and cash equity
will not only fund the TenCate acquisition but will also be used to
repay US$130 million of Solmax's existing debt. As a part of the
transaction, the company also intends to obtain a US$100 million
revolving credit facility (RCF) that will largely be used for
general corporate purposes. S&P Said, "On a pro forma basis, we
expect Solmax to generate leverage above 5x (S&P Global Ratings'
adjusted) for the next 18 to 24 months, which is consistent with
our highly leveraged financial risk assessment on the company.
Also, we expect free operating cash flow (FOCF) to be relatively
modest, with FOCF to debt of about 5% for in 2021 and 2022."
Although the TenCate acquisition will enhance Solmax's leading
market position in the highly fragmented geosynthetics industry,
the company's scale will remain modest. Solmax will be the world's
largest geosynthetic products manufacturer, with a global market
share of close to 12% after acquiring TenCate. The company will be
about three times larger than the second-largest geosynthetic
producer, with a long-term (more than 40 years) history of
operations and well-established brands. In addition, unlike many of
its peers, Solmax has globally diversified operations, including
manufacturing facilities in 19 locations across North America,
Europe, Africa, and the Asia-Pacific region that afford it
operating flexibility (such as the ability to shift capacity
between plants to accommodate higher demand in a particular region)
and efficiencies. Much of its products are also considered
higher-end and value-added, with technical specifications well
suited to meet increasing environmental considerations. For
example, Solmax sells geosynthetics (geomembranes) used in
larger-scale waste/water management and infrastructure projects for
pollution and soil containment purposes. In S&P's view, these
factors provide competitive advantages that should facilitate
steady growth of its business in this niche market segment.
S&P said, "Our view of Solmax's business risk incorporates the
company's relatively modest scale of operations. We assess the
company in the context of the broader global building materials
industry and consider it to have limited scale and diversification
based on revenue and earnings. In our view, the relatively small
base of operations increases the sensitivity of Solmax's credit
measures and profitability to lower-than-expected earnings and cash
flow." Moreover, about 80% of the company's revenue is derived from
geomembranes and geotextiles, which adds concentration risk
relative to larger, more diversified companies. Notwithstanding its
leading market share, Solmax is exposed to high levels of regional
competition, given the numerous industry players. The company is
also sensitive to cyclical fluctuations in demand because much of
its business is not contracted and many larger-scale project orders
are generally nonrecurring in nature.
S&P expects Solmax will generate steady growth in EBITDA and cash
flow over the next few years, despite its high exposure to raw
material cost volatility. In the geosynthetic market, product
prices are directly linked to prevailing polyethylene and
polypropylene prices (resin, collectively), the key raw materials
used in production. Selling prices generally move in tandem with
resin prices; higher/lower resin prices incurred by Solmax are
largely passed through to customers with higher/lower selling
prices, resulting in relatively stable EBITDA. This was
demonstrated from 2018 to 2020 when the decline in revenue was the
result of steadily lower resin prices (albeit, with slightly higher
margins).
S&P said, "The increase in resin prices through 2021 has been
significant, but we expect the company will effectively manage this
exposure. In our view, this pass-through feature limits the
volatility of Solmax's cash flow and profitability associated with
the company's key input costs. We expect Solmax's EBITDA margins in
the low-to-mid teen percentage area over the next few years, with
modest fluctuations linked to resin price volatility, but inclusive
of some merger-related efficiencies. We view Solamax's prospective
profitability as average for the broader building materials
industry. Favorable demand fundamentals for geosynthetics in the
company's core end markets are expected to lead an expected gradual
improvement in EBITDA, supported by higher infrastructure spending,
and the growth of commodity-linked end markets and waste management
projects. We believe this should support price increases above
resin cost inflation but expect Solmax will be measured in its
approach to premiums due to the competitive nature of the industry.
Our estimates, at least in the near term, incorporate the potential
for integration costs associated with the planned TenCate
acquisition.
"Free cash flow generation provides financial flexibility but we do
not expect material debt reduction. We assume Solmax will generate
positive free cash flow over the next two years, which provides
financial flexibility. The company will have no near-term debt
maturities on completion of its planned debt transaction, and we
assume a gradual increase in its cash position compared to debt
reduction. We do not anticipate material debt reduction and expect
the company's credit measures will remain relatively stable,
including leverage at about 5x. This reflects the potential for
Solmax to pursue future acquisitions, mainly given the fragmented
nature of the industry and past investments it has completed In
addition, we believe dividends are possible and consider Solmax's
owners as financial sponsors. Therefore, we will likely require a
sustained track record of lower leverage before contemplating
rating upside.
"The stable outlook reflects our view of the favorable end-market
demand for Solmax's products, led by stronger macroeconomic growth
and increased project spending in the company's core water, waste,
and infrastructure end markets. We assume gradual improvement in
the company's earnings and cash flow over the next couple of years,
resulting in leverage of just over 5x and positive free cash flow.
"We could lower the rating if Solmax's adjusted debt to EBITDA
exceeds 7x, with poor prospects of improvement. This could result
from slower-than-expected demand in the company's core end markets
or more aggressive pricing from competitors. A more aggressive
financial policy resulting in debt-financed acquisitions or
shareholder-friendly initiatives could also lead to a downgrade,
although we believe this is unlikely in the near term.
"Given the company's near-term focus on digesting the TenCate
acquisition and all the associated integration risks, we view an
upgrade as unlikely in the next 12 months. Over time, an upgrade
could occur if Solmax's debt leverage where to decrease and remain
well below 4x, as well as a commitment from the company to maintain
that level of leverage."
GRUPO AEROMEXICO: Will Search of Alternate Lender
--------------------------------------------------
Andrea Navarro and Justin Villamil of Bloomberg News report that
Grupo Aeromexico SAB is talking to prospective lenders who could
replace Apollo Global Management Inc. in its bankruptcy rescue,
according to people familiar with the matter.
Apollo funded a $1 billion rescue plan for the airline last year.
Under the pact, it will be able to covert its loan into equity when
the company reemerges from bankruptcy.
The discussions, which are expected to continue into mid-June, are
meant to gauge an accurate valuation of the company once it emerges
from bankruptcy, one person said, asking not to be identified
discussing private matters. Apollo is aware of the move and has a
"right of first refusal," meaning it can choose whether or not to
accept any offers to be replaced as a lender, one of the people
said.
If Apollo were to stay and convert its loans into equity, the new
valuation would help determine the price at which it would do so,
the person said.
Equity Conversion
The $1 billion rescue plan for the struggling airline is divided
into two tranches. Apollo led the financing for both, while
minority bondholders were involved only in the first tranche, worth
$200 million. The bondholders also have an option to convert their
loans into equity.
Aeromexico, which unlike U.S. airlines hasn't received government
aid to help it through the coronavirus pandemic, filed for court
protection last June as demand for flights tumbled.
The carrier requested an extension to the period to file a Chapter
11 reorganization plan on June 8, pushing the date to Oct. 25 from
the original June 25. The airline says it must meet several
conditional thresholds related to the debtor-in-possession
financing, such as delivering a valuation.
"The months ahead will be focused on many time-consuming tasks,"
Aeromexico said in the motion filed before a New York bankruptcy
court. In addition to the valuation, the airline must resolve
issues related to its loyalty program and come up with the Chapter
11 plan, it said.
A decision in May by the Federal Aviation Administration to lower
Mexico's air-safety rating to Category 2 will also hurt the
struggling airline by limiting its growth. Under the new category,
Mexican airlines cannot add frequencies or routes to the U.S.
About Grupo Aeromexico
Grupo Aeromexico, S.A.B. de C.V. -- https://www.aeromexico.com/ --
is a holding company whose subsidiaries are engaged in commercial
aviation in Mexico and the promotion of passenger loyalty
programs.
Aeromexico, Mexico's global airline, has its main hub at Terminal 2
at the Mexico City International Airport. Its destinations network
features the United States, Canada, Central America, South America,
Asia and Europe.
Grupo Aeromexico and three of its subsidiaries sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30,
2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker,
the Debtors reported consolidated assets and liabilities of $1
billion to $10 billion.
Timothy Graulich, Esq., of Davis Polk and Wardell LLP, serves as
counsel to the Debtors.
HERTZ CORP: Expects to Emerge from Chapter 11 by June 30, 2021
--------------------------------------------------------------
Hertz Global Holdings, Inc. (OTCPK:HTZGQ) on June 10, 2021,
announced that the Bankruptcy Court confirmed the Company's Plan of
Reorganization (the "Plan"). The Plan unimpairs all classes of
creditors (who are legally deemed to have accepted it) and was
approved by more than 97% of voting shareholders. The Court's
approval clears the way for Hertz to emerge from Chapter 11 by the
end of June 2021.
As a result of its restructuring efforts, Hertz will emerge from
Chapter 11 with a substantially stronger balance sheet and greater
financial flexibility than it had prior to the onset of the
COVID-19 pandemic, which forced Hertz to file for Chapter 11 relief
in May 2020. Hertz's Plan will eliminate over $5 billion of debt,
including all of Hertz Europe's corporate debt, and will provide
more than $2.2 billion of global liquidity to the reorganized
Company. Hertz also will emerge with (i) a new $2.8 billion exit
credit facility consisting of at least $1.3 billion of term loans
and a revolving loan facility, and (ii) an approximately $7 billion
of asset-backed vehicle financing facility, each on favorable
terms. The Plan provides for the payment in cash in full to all
creditors and for existing shareholders to receive more than $1
billion of value.
Paul Stone, Hertz's President and Chief Executive Officer, said:
"With the Court's approval of our Plan today and a committed new
investor group, we are poised to exit Chapter 11 by the end of this
month as a well-capitalized and even more competitive company, with
the flexibility and resources to pursue exciting new growth
opportunities. I want to thank our employees and teams around the
world for their hard work, which has enabled us to continue taking
great care of our customers. As the demand for rental cars
continues to rise, we look forward to helping our customers travel
confidently and safely as they get back out on the road, and to
successfully building on Hertz's more than 100-year history of
quality service as one of the world's best known brands."
For Court documents or filings, please visit
https://restructuring.primeclerk.com/hertz or call (877) 428-4661
or (929) 955-3421. White & Case LLP is serving as legal advisor,
Moelis & Co. is serving as investment banker, and FTI Consulting is
serving as financial advisor.
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.
HERTZ GLOBAL: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to global
car renter Hertz Global Holdings Inc., its 'BB-' issue-level rating
and '1' recovery rating to its proposed senior secured term loan C,
and its 'B+' issue-level rating and '2' recovery rating to its
proposed senior secured credit facility, which includes a revolving
credit facility and a term loan B. The '1' recovery rating on the
term loan C and the '2' recovery rating on the senior secured
facility indicate its expectation for very high recovery (90%-100%;
rounded estimate: 95%) and substantial recovery (70%-90%; rounded
estimate: 85%), respectively, in the event of a payment default.
The stable outlook reflects S&P's expectation that the company's
operating performance will improve in 2021 and thereafter.
S&P expects the company to benefit from a stronger car rental
environment upon its emergence from Chapter 11 bankruptcy
protection.Hertz (the parent of the Hertz, Dollar, and Thrifty car
rental brands) filed for Chapter 11 bankruptcy protection amid the
height of the COVID-19 pandemic on May 22, 2020. At that time, the
volume of airline traffic (from which Hertz generates the majority
of its revenue) had declined dramatically due to travel
restrictions and fears related to the spread of the coronavirus.
Therefore, Hertz and the other car renters had to reduce their
fleets to adjust to the weaker demand by selling vehicles and
canceling new orders. In May 2020, the market for used vehicles,
and thus their pricing, was weak. However, the market for used cars
began to recover in mid-summer 2020 and prices have since risen to
historically high levels, where they have remained due to a
shortage of vehicles.
These factors affected Hertz because car renters depreciate their
vehicles based on expected residual values. When used car prices
are high, such as now, this reduces the amount of depreciation
expense upon the sale of the vehicle. When prices are low, such as
they were in May 2020, this increases the renter's depreciation
expense and results in a shortfall, which it must cover to pay off
the asset-backed security (ABS) debt that it used to finance the
vehicle. This is what happened to Hertz in May 2020 and was the
major reason for its Chapter 11 filing. Currently, the demand for
used vehicles is strong and there is a lack of new vehicles due to
a semiconductor chip shortage, which is hampering new vehicle
production. This shortage, coupled with the strong demand, has
supported a substantial increase in rental rates, which is a trend
we expect will continue at least through the fall.
S&P said, "We expect Hertz's credit metrics to remain weak until
2022 before improving somewhat thereafter.The company's bankruptcy
emergence plan, which has been approved by the bankruptcy court,
includes $2.781 billion of common stock investments by Knighthead
Capital Management, Certares Opportunities, and Apollo Capital
Management, the issuance of $1.5 billion of new PIK preferred stock
to Apollo, and a fully backstopped rights offering to its existing
shareholders to purchase $1.635 billion of additional common stock.
We treat the PIK preferred stock as debt in our credit ratios. We
don't expect Hertz's credit metrics to return to 2019 levels until
2022 but forecast they will improve somewhat thereafter. We don't
anticipate the company will generate any EBIT in 2021 and estimate
EBIT interest coverage of about 1x in 2022, which is in line with
its results in 2019. We expect Hertz's adjusted funds from
operations (FFO) to debt to be about 10% in 2021 before improving
to the mid-teens percent area in 2022, which is near the 18% level
it achieved in 2019.
"Upon its emergence from bankruptcy, we will assess Hertz's
liquidity as adequate.In the 12 months following its emergence, we
expect the company's sources of liquidity to comprise about $1.3
billion of unrestricted cash, $1.8 billion of availability under
its corporate facilities, availability under its ABS facilities,
FFO of about $1 billion a year, and proceed from vehicle sales. We
expect Hertz's liquidity uses to include net capital spending for
new vehicles of about $2.6 billion over the next 12 months.
"Although we expect the company's liquidity sources to be about
1.9x its uses over the next 12 months, we do not believe it meets
the qualitative conditions for a higher assessment. As evidenced by
its experience amid the pandemic, we do not believe Hertz would be
able to absorb high-impact, low-probability adversities, which
further supports our assessment.
"The stable outlook on Hertz reflects our expectation that its
operating performance will improve in 2021 and thereafter. We
expect the volume of airline traffic to continue to recover in 2021
as the COVID-19 vaccines become more prevalent. In addition, we
anticipate the company will benefit from the substantial cost
reductions and strong used car prices that have reduced its
depreciation expense. While Hertz will likely benefit from a
reduction in its amount of balance sheet debt following its
emergence from Chapter 11 bankruptcy, we expect this to be somewhat
offset by our inclusion of the new PIK preferred equity, which we
treat as debt in our credit metrics. We don't expect the company's
credit metrics to return to 2019 levels until 2022 but anticipate
they will continue to improve thereafter. We don't forecast Hertz
will generate any EBIT in 2021 and estimate its EBIT interest
coverage will be about 1x in 2022, which is in line with its 2019
results. We also expect adjusted FFO to debt of about 10% in 2021,
improving to the mid-teens percent area in 2022 (close to the 18%
level it achieved in 2019).
"We could lower our rating on Hertz if its FFO to debt remains at
or below 8% for a sustained period or its liquidity becomes
constrained. This could occur because of weaker-than-expected air
travel volumes or a prolonged decline in used car prices.
"We could raise our rating on Hertz if the volume of airline travel
recovers significantly, causing its EBIT interest coverage to rise
to at least 1.1x and its FFO to debt to increase to more than 12%
for a sustained period. We would also need to believe this its new
owners' financial policies would allow it to maintain these
levels."
HIGHLAND CAPITAL: Ex-CEO Dondero Fined $450,000 for TRO Breach
--------------------------------------------------------------
At the behest of Highland Capital Management, L.P., Bankruptcy
Judge Stacey G.C. Jernigan ruled that the investment advisor's
co-founder, former President, former Chief Executive Officer, and
indirect beneficial equity owner -- Mr. James Dondero -- is in
civil contempt of court for violating a temporary restraining order
issued on December 10, 2020. The Court said it "found by clear and
convincing evidence" that: (1) the TRO was in effect and Mr.
Dondero knew about it; (2) the TRO required certain conduct by Mr.
Dondero; and (3) Mr. Dondero failed to comply with the TRO.
To compensate the Debtor's estate for loss and expense resulting
from Mr. Dondero's non-compliance with the TRO, the Court directed
Mr. Dondero to pay the Debtor $450,000 by June 22.
The Court said it will add on a $100,000 sanction for each level of
rehearing, appeal, or petition for certioriari that Mr. Dondero may
choose to take with regard to the Order, to the extent that any
motions for rehearing, appeals, or petitions for certiorari are
pursued by him and are not successful. Other sanctions are denied
at this time. The Court reserves jurisdiction to interpret and
enforce the Order.
The Debtor has sued Mr. Dondero and certain entities connected to
him for interfering multiple times with the attempts by James P.
Seery, the Debtor's current CEO, to sell various assets in the CLO
special purpose entities, by, among other things, exerting pressure
on certain of the Debtor's employees to halt trades that were
ordered by Mr. Seery. The Debtor also sought to collect certain
demand notes from Mr. Dondero in order to fund its Chapter 11 plan.
Mr. Dondero allegedly sent sent a threatening text to Mr. Seery
just a few hours after the demand letters were sent to him. The
Debtor argued Mr. Dondero's actions have jeopardized the Debtor's
ability to effectively wind down its business in the Chapter 11
proceedings -- to the detriment of its creditors.
The Adversary Proceeding centers significantly around two
Non-Debtor Dondero-Related Entities known as NexPoint Advisors,
L.P. and Highland Capital Management Fund Advisors, L.P. -- both of
which, like the Debtor, are registered investment advisors. Mr.
Dondero is President of NexPoint and has an ownership interest in
it. Mr. Dondero is President of HCMFA and has an ownership
interest in it as well.
Almost immediately after filing the Adversary Proceeding, the
Debtor sought entry of a TRO enjoining Mr. Dondero from: (a)
communicating (whether orally, in writing, or otherwise), directly
or indirectly, with any Independent Board member unless Mr.
Dondero's counsel and counsel for the Debtor were included in the
communication; (b) making any express or implied threats of any
nature against the Debtor or any of its directors, officers,
employees, professionals, or agents; (c) communicating with any of
the Debtor's employees, except as it specifically related to shared
services currently provided by the Debtor to affiliates owned or
controlled by Mr. Dondero; (d) interfering with or otherwise
impeding, directly or indirectly, the Debtor's business, including
but not limited to the Debtor's decisions concerning its
operations, management, treatment of claims, disposition of assets
owned or controlled by the Debtor, and pursuit of the Plan or any
alternative to the Plan; and (e) otherwise violating section 362(a)
of the Bankruptcy Code.
In its Contempt Motion, Highland alleges Mr. Dondero violated the
TRO as follows: (a) he willfully ignored it by not reading the TRO,
the underlying pleadings, and allegations that supported it, nor
did he listen to the hearing at which it was entered or make any
meaningful effort to understand the scope of it; (b) he threw in
the garbage his Highland-furnished cell phone, in what the Debtor
believes was an attempt to evade discovery; (c) he trespassed on
the Debtor's property after the Debtor had evicted him because the
Debtor believed he was interfering with the Debtor's business; (d)
he interfered with the Debtor's trading of Highland CLO assets; (e)
he pushed and encouraged NexPoint and HCMFA and the funds they
managed to make further demands and threats against the Debtor
regarding the trading of Highland CLO assets; (f) he communicated
with the Debtor's inhouse counsel, Scott Ellington and Isaac
Leventon, before they were terminated from Highland, to coordinate
legal his own strategy against the Debtor; and (g) he interfered
with the Debtor's obligation to produce certain documents that were
requested by the UCC and that were in the Debtor's possession,
custody and control.
A copy of the Court's June 7 Memorandum Opinion and Order is
available at:
https://www.leagle.com/decision/inbco20210608620
About Highland Capital Management
Highland Capital Management, LP was founded by James Dondero and
Mark Okada in Dallas in 1993. Highland Capital is the world's
largest non-bank buyer of leveraged loans in 2007. It also manages
collateralized loan obligations. In March 2007, it raised $1
billion to buy distressed loans. Collateralized loan obligations
are created by bundling together loans and repackaging them into
new securities.
Highland Capital Management sought Chapter 11 protection (Bank. D.
Del. Case No. 19-12239) on Oct. 16, 2019. On Dec. 4, 2019, the
case was transferred to the U.S. Bankruptcy Court for the Northern
District of Texas and was assigned a new case number (Bank. N.D.
Texas Case No. 19-34054). Judge Stacey G. Jernigan is the case
judge.
At the time of the filing, Highland had between $100 million and
$500 million in both assets and liabilities.
The Debtor tapped Pachulski Stang Ziehl & Jones LLP as bankruptcy
counsel, Foley & Lardner LLP as special Texas counsel, and Teneo
Capital, LLC as litigation advisor. Kurtzman Carson Consultants,
LLC is the claims and noticing agent.
The U.S. Trustee for Region 6 appointed a committee of unsecured
creditors on Oct. 29, 2019. The committee tapped Sidley Austin LLP
and Young Conaway Stargatt & Taylor LLP as bankruptcy counsel, and
FTI Consulting, Inc. as financial advisor.
IBIO INC: Appoints Veteran Biopharmaceutical Exec to Board
----------------------------------------------------------
The Board of Directors of iBio, Inc. elected Evert B.
Schimmelpennink as a Class I director of the Board.
Mr. Schimmelpennink was appointed to the Company's Nominating and
Corporate Governance Committee of the Board. Each Class of
directors is up for re-election every three years. Class I
Directors are next up for election at the Company's 2021 annual
meeting of stockholders. Mr. Schimmelpennink's term as a director
will continue until such time as his successor is duly elected and
qualified or until his earlier resignation or removal.
Mr. Schimmelpennink will receive compensation that includes $40,000
in annual fees in cash compensation, payable quarterly, and an
additional $4,000 in annual fees in cash compensation for service
on the Company's Nominating and Corporate Governance Committee of
the Board, payable quarterly. In addition, on June 7, 2021 Mr.
Schimmelpennink was granted a nonqualified stock options to
purchase 100,000 shares of the Company's common stock, par value
$0.001 per share, to vest in equal monthly installments over a 36
month period, issued pursuant to the iBio, Inc. 2020 Omnibus Equity
Incentive Plan. Mr. Schimmelpennink will enter into a stock option
agreement in connection with the option grant.
In an executive leadership career spanning more than 20 years, Mr.
Schimmelpennink has applied his strategic and functional expertise
across corporate development, commercial operations, manufacturing,
and R&D to help build and scale a number of global public and
private biopharmaceutical businesses. Recently, he served as CEO
of Pfenex Inc., a NYSEA-listed company which, using its patented
Pfenex Expression Technology platform, created an advanced pipeline
of therapeutic equivalents, vaccines, biologics and biosimilars.
Pfenex was acquired by Ligand Pharmaceuticals Incorporated for
approximately $516 million (including contingent value rights) in
October 2020. Previously, Mr. Schimmelpennink served as CEO of
Alvotech Ehf, a global biopharmaceutical company focused on
becoming a leader in the biosimilar monoclonal antibody market.
Prior to joining Alvotech, he held variety of progressive roles
with Pfizer Inc., Hospira, Inc., Synthon BV and Numico NV. Mr.
Schimmelpennink holds a Masters in Bioprocess Engineering from the
Wageningen University in the Netherlands.
"Eef has a strong history of success leading companies with novel
protein expression platforms to develop and commercialize
biopharmaceutical products," said Tom Isett, chairman & CEO of
iBio. "He is joining our team at an opportune time, given we are
adding our own in-house drug discovery capabilities to our existing
contract development and manufacturing services, similar to what
Eef did in his most recent leadership role at Pfenex."
Mr. Schimmelpennink commented, "I am honored to join iBio's Board
and look forward to working with my talented colleagues as the
Company continues to harness the power of its unique plant-based
FastPharming System to help reduce drug development times and
costs, and, importantly, to help rapidly develop its own
biopharmaceutical candidates to address unmet medical needs in
human health and veterinary medicine."
About iBio Inc.
iBio, Inc. -- http://www.ibioinc.com-- is a full-service
plant-based expression biologics CDMO equipped to deliver
pre-clinical development through regulatory approval, commercial
product launch and on-going commercial phase requirements. iBio's
FastPharming expression system, iBio's proprietary approach to
plant-made pharmaceutical (PMP) production, can produce a range of
recombinant products including monoclonal antibodies, antigens
forsubunit vaccine design, lysosomal enzymes, virus-like particles
(VLP), blood factors and cytokines, scaffolds, maturogens and
materials for 3D bio-printing and bio-fabrication,
biopharmaceutical intermediates and others, as well as create and
produce proprietary derivatives of pre-existing products with
improved properties.
iBio disclosed a net loss attributable to the Company of $16.44
million for the year ended June 30, 2020, compared to a net loss
attributable to the Company of $17.59 million for the year ended
June 30, 2019. As of March 31, 2021, the Company had $142.70
million in total assets, $37.87 million in total liabilities, and
$104.83 million in total equity.
IMERYS TALC: Johnson & Johnson to Probe Suspicious Ch. 11 Plan Vote
-------------------------------------------------------------------
Daniel Gill of Bloomberg Law reports that Johnson & Johnson is
seeking to investigate bankrupt supplier Imerys Talc America Inc.'s
Chapter 11 plan voting, alleging that the process was "fraught with
errors, inconsistencies, and unexplained results" that led to its
approval by a narrow margin.
J&J, whose baby powder and other products relied on Imerys-mined
talc, asked a bankruptcy court in a letter Wednesday, June 9, 2021,
for permission to take additional depositions and is asking Imerys
to disclose its communications with personal injury claimants.
Imerys' early vote counts show about 80,000 votes from asbestos
injury claimants, J&J said in the letter filed with the U.S.
Bankruptcy Court.
About Imerys Talc America
Imerys Talc and its subsidiaries --
https://www.imerys-performance-additives.com/ -- are in the
business of mining, processing, selling, and distributing talc.
Talc is a hydrated magnesium silicate that is used in the
manufacturing of dozens of products in a variety of sectors,
including coatings, rubber, paper, polymers, cosmetics, food, and
pharmaceuticals. Its talc operations include talc mines, plants,
and distribution facilities located in: Montana (Yellowstone,
Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas
(Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet).
It also utilizes offices located in San Jose, California and
Roswell, Georgia.
Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc
Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13,
2019.
The Debtors were estimated to have $100 million to $500 million in
assets and $50 million to $100 million in liabilities as of the
bankruptcy filing.
The Hon. Laurie Selber Silverstein is the case judge.
The Debtors tapped Richards, Layton & Finger, P.A., and Latham &
Watkins LLP as counsel; Alvarez & Marsal North America, LLC as
financial advisor; and Prime Clerk LLC as claims agent.
ISTAR INC: S&P Alters Outlook to Stable, Affirms 'BB' ICR
---------------------------------------------------------
S&P Global Ratings revised its outlook on iStar Inc. to stable from
negative. At the same time, S&P affirmed all its ratings on iStar,
including its 'BB' issuer credit and senior unsecured debt
ratings.
S&P said, "The outlook revision reflects our view that the
likelihood of substantial deterioration in iStar's asset quality
has lessened in the wake of the pandemic, with the widespread
availability of vaccines and the reopening of the U.S. economy.
Nonperforming loans totalled $56 million as of March 31, 2021,
compared with $16 million at year-end 2019, and charge-offs remain
minimal. Leverage, as measured by debt to adjusted total equity
(ATE), increased to about 3.6x from 3.4x as of Sept. 30, 2020.
However, the company's substantial unrealized gain on its Safehold
stock ($956 million carrying value, $2.4 billion market value as of
March 31, 2021) and $461 million of net operating loss
carryforwards continue to provide considerable financial
flexibility.
"The stable outlook reflects our expectation that, over the next 12
months, the rebounding economy will help iStar report mostly stable
asset quality trends while maintaining its adequate liquidity and
leverage under 4.5x debt to ATE. We also expect the company to
continue its long-term, largely unsecured funding profile.
"Over the next 12 months, we could lower our ratings on iStar if
asset quality deteriorates or liquidity becomes strained, in our
view. We could also downgrade the company if leverage rises above
4.5x debt to ATE.
"An upgrade is unlikely in the next 12 months. Over the longer
term, we could raise the ratings if iStar substantially lowers
leverage, demonstrates sustainable core profitability, and further
reduces legacy assets."
JACOBS TOWING: Case Summary & 11 Unsecured Creditors
----------------------------------------------------
Debtor: Jacobs Towing, LLC
d/b/a B & R Wrecker & Recovery
116 Anderson Road
Troy, AL 36079
Chapter 11 Petition Date: June 10, 2021
Court: United States Bankruptcy Court
Middle District of Alabama
Case No.: 21-31004
Debtor's Counsel: J. Kaz Espy, Esq.
ESPY METCALF & ESPY PC
326 N Oates St
PO Drawer 6504
Dothan, AL 36302-6504
Tel: 334-793-6288
Fax: 334-712-1617
Total Assets: $3,221,047
Total Liabilities: $2,857,943
The petition was signed by Donnie L. Jacobs, member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 11 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/PUSDSVA/Jacobs_Towing_LLC__almbke-21-31004__0001.0.pdf?mcid=tGE4TAMA
K&D MANAGEMENT: Case Summary & 4 Unsecured Creditors
----------------------------------------------------
Debtor: K&D Management, LLC
1020 Allgood Rd
Athens, GA 30606-5367
Business Description: K&D Management, LLC is a Single Asset Real
Estate debtor (as defined in 11 U.S.C.
Section 101(51B)).
Chapter 11 Petition Date: June 11, 2021
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 21-54486
Debtor's Counsel: Edward F. Danowitz, Esq.
DANOWITZ LEGAL, PC
300 Galleria Pkwy SE Ste 960
Atlanta, GA 30339-5949
Email: edanowitz@danowitzlegal.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dhansukh Patel, the managing member.
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/SLO2Z7Q/KD_Management_LLC__ganbke-21-54486__0001.0.pdf?mcid=tGE4TAMA
K.G. IM, LLC: Two-Step Structured Dismissal of Ch.11 Cases OK'd
---------------------------------------------------------------
Bankruptcy Judge Martin Glenn granted the request of K.G. IM, LLC
and its affiliates, including IL Mulino USA, LLC, for structured
dismissal of their bankruptcy cases.
The Court approved these procedures in connection with the case
dismissal:
* A notice of the Dismissal Motion and the proposed dismissal
procedures shall be provided to all creditors and equity security
holders of the Debtors.
* The Debtors shall be authorized to pay allowed
administrative claims and allowed professional fees, subject to
Debtors' counsel's agreed reduction; provided that prior to payment
of allowed administrative claims and allowed professional fees, the
Debtors shall calculate, and reserve amounts necessary to satisfy
any related U.S. Trustee fees.
* The Debtors shall be authorized to file a certification of
counsel requesting dismissal of the chapter 11 cases of the Debtor
entities that are not parties to the transition services
agreements, certifying that: (a) all Allowed Administrative Claims
have been paid; (b) all Allowed Professional Fees have been paid;
and (c) all U.S. Trustee fees have been paid and all monthly
operating reports relating to the Non-TSA Debtors' chapter 11 cases
shall have been filed.
* Certifications requesting dismissal shall only be served on
the Master Service List approved pursuant to the Case Management
Order entered in these chapter 11 cases (which includes the Office
of the U.S. Trustee, counsel to BSP, and all other persons and
entities that have formally appeared and requested service in these
chapter 11 cases).
* The Debtors shall be authorized to file a certification
requesting dismissal of any of the chapter 11 cases of debtors who
are TSA parties upon the termination of the TSA with respect to
such TSA Debtor.
* Any party-in-interest may file an objection to the closing
of a case for which a certification has been filed up to seven days
after that certification has been filed, after which the Court may
schedule a hearing or close the case without any further notice or
hearing.
* Notwithstanding section 349 of the Bankruptcy Code, all
prior orders of the Court entered in the Debtors' chapter 11 cases
remain in full force and effect and survive the dismissal of the
chapter 11 cases.
* The Court retains jurisdiction with respect to (i) any
matters, claims, rights or disputes arising from or related to the
implementation, interpretation, or enforcement of this or any other
order of this Court entered in the chapter 11 cases; and (ii) the
adversary proceeding captioned BSP Agency LLC, et al., v. Katzoff
et al., Adv. Pro. No. 21-01006.
The Court on December 22, 2020, approved the sale of substantially
all of the Debtors' assets to BSP Agency, LLC, Providence Debt Fund
III L.P., Benefit Street Partners SMA-C L.P., Benefit Street
Partners SMA LM L.P., Providence Debt Fund III Master (Non-US) Fund
L.P., and Benefit Street Partners SMA-C SPV L.P. BSP is the
Debtors' prepetition secured lender and DIP lender. The Sale Order
includes an exculpation of BSP for acts in connection with the
sale. The U.S. Trustee did not object to exculpation or any other
aspect of the sale.
The sale transaction included TSAs to allow for the the transition
of liquor licenses and other permits to BSP for the IL Mulino
restaurant locations in Miami, Florida, Roslyn, New York, and
Atlantic City, New Jersey, which were operated by TSA Debtors IM NY
Florida, LLC, IM Long Island Restaurant Group, LLC, and IMNY AC,
LLC. The termination of each of the TSAs will occur upon the
earliest of (a) receipt by BSP of the licenses in accordance with
applicable law, and (b) one year from the effective date of the
TSAs, which occurred on February 2, 2021.
Applications for the transition of the licenses have been submitted
to the applicable authorities and the expected timetable for
completion of the transition of the licenses range from three
months to one year depending on the jurisdiction. At the Hearing,
Debtors' counsel represented that BSP received the liquor license
for the restaurant in Miami, Florida. Therefore, the chapter 11
cases for only IM Long Island Restaurant Group, LLC, and IMNY AC,
LLC, will need to remain open until the transition of the licenses
are complete.
As of the filing of the Dismissal Motion on May 14, 2021, the
Debtors' cash balance was $1,140,273.00. By June 4, 2021, the cash
balance had decreased to $940,273. The Debtors' counsel has agreed
to discount its recovery on its allowed fees and expenses to the
extent necessary for other administrative expense claims to be paid
in full. After taking this discount into account, the Debtors
estimate that allowed administrative claims will total the same
amount as the Debtors' cash balance.
"It is clear that dismissal is warranted here," Judge Glenn held.
"The Debtors have sold substantially all of their assets, have no
further operations, and have insufficient resources to fund a plan.
The other alternatives under section 1112(b)(1) -- conversion to
chapter 7 or appointment of a trustee or examiner -- would impose
costs that would only further erode the value of the already
administratively insolvent estates with no apparent benefit, and
are therefore not 'in the best interests of creditors and the
estate[s].' "
In addition, the U.S. Trustee does not object to the retention of
jurisdiction over the BSP/Katzoff AP in the event the chapter 11
cases are dismissed. However, even if the U.S. Trustee did object
on this basis, the retention of jurisdiction is also clearly
warranted based on the Porges factors identified in Section II.C.
above—particularly judicial economy, convenience to the parties,
and fairness. The BSP/Katzoff AP is scheduled for trial on June
28-29, 2021.
Judge Glenn overruled the objection of the United States Trustee.
The U.S. Trustee argued that the Dismissal Motion is (i) premature
(as the Debtors do not seek immediate dismissal), (ii) unnecessary
(with respect to the payment of administrative claims), and (iii)
improper (as the Debtors seek a "blanket reservation" of all orders
in the case).
The U.S. Trustee argued that the Debtors' proposal for a two-step
dismissal process, whereby the Court will first enter an order
authorizing the dismissal of the Non-TSA Debtors, which also
approves various distributions, resolution of claims and other
necessary steps to prepare the cases for dismissal, and then
dismiss the TSA Debtors upon a resolution of the transfer of
certain liquor licenses, is untenable. If the Debtors seek to
dismiss these cases, they should so move only after the Debtors
have completed the wind-down of their estate, which includes any
time needed to transfer the liquor licenses.
Judge Glenn said the U.S. Trustee's argument is not convincing.
Although these cases are jointly administered, the Debtors are
separate entities with separate cases and separate estates. While
the U.S. Trustee is correct that the TSA Debtors' cases should not
be dismissed until the liquor licenses have been transferred, that
is precisely the Debtors' intent. The Debtors do not seek dismissal
at this time, and simply seek approval of an orderly process for
the dismissal of these cases, which logically must be approved in
advance of the contemplated dismissals. The U.S. Trustee has not
identified any concrete reason that the proposed two-step process
should not be approved, or why the Non-TSA Debtors' cases should
not be dismissed before the TSA Debtors' cases are dismissed.
The Revised Proposed Orders include a provision that requires the
Debtors to return to BSP the $100,000 that was paid by BSP to the
Debtors and reserved for distribution to holders of allowed general
unsecured claims under the sale agreement. At the hearing, the U.S.
Trustee objected to this provision, but agreed that, under
Czyzewski v. Jevic Holding Corp. (In re Jevic Holding Corp.), 137
S.Ct. 973 (2017), the Court could not approve a distribution to
general unsecured creditors where, as here, the Debtors are
administratively insolvent (a fact that was acknowledged by the
U.S. Trustee), as such a distribution would violate the absolute
priority rule. Accordingly, the objection to the return of the
$100,000 to BSP is overruled.
A copy of the Court's June 9, 2021 Memorandum Opinion and Order is
available at:
https://www.leagle.com/decision/inbco20210610540
About K.G. IM, LLC
K.G. IM, LLC, based in New York, NY, and its affiliates, including
IL Mulino USA, LLC, operate a chain of restaurants that focuses on
Italian cuisine.
K.G. IM, LLC and its debtor affiliates concurrently filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. S.D.N.Y. Lead Case No. 20-11723) on July 29, 2020. The
petitions were signed by Gerald Katzoff, manager. At the time of
the filing, K.G. IM, LLC was estimated to have $50 million to $100
in assets and $10 million to $50 million in liabilities.
The Hon. Martin Glenn presides over the cases.
The Debtors tapped Alston & Bird LLP as bankruptcy counsel; Davis &
Gilbert LLP as special counsel; Traxi, LLC as financial advisors;
and Configure Partners, LLC as investment banker.
The Court on December 22, 2020, approved the sale of substantially
all of the Debtors' assets to BSP Agency, LLC, Providence Debt Fund
III L.P., Benefit Street Partners SMA-C L.P., Benefit Street
Partners SMA LM L.P., Providence Debt Fund III Master (Non-US) Fund
L.P., and Benefit Street Partners SMA-C SPV L.P. BSP is the
Debtors' prepetition secured lender and DIP lender. The purchase
price consisted of: (a) a credit bid in an amount equal to the sum
of (i) $2,000,000 consisting of a portion of the outstanding
liabilities under the DIP Facility as of the Closing Date; and (ii)
$16,000,000 consisting of a portion of the Liabilities arising
under the IL Mulino Prepetition Credit Documents; (b) a $100,000
cash payment reserved for distribution to holders of allowed
general unsecured claims; (c) a payment or other satisfaction of
all Cure Amounts in cash; and (d) the assumption of Assumed
Liabilities under the Stalking Horse APA by the Stalking Horse
Purchaser.
The Buyers are represented in the case by Goodwin Procter's Michael
H. Goldstein, Esq., and Howard S. Steel, Esq.
KENNAMETAL INC: Egan-Jones Keeps BB+ Senior Unsecured Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Kennametal Inc.
Headquartered in Latrobe, Pennsylvania, Kennametal Inc.
manufactures, purchases, and distributes tools, tooling systems,
and solutions to the metalworking, mining, oil, and energy
industries.
KEYSER AVENUE: Case Summary & 4 Unsecured Creditors
---------------------------------------------------
Debtor: Keyser Avenue Medical Park, LLC
1029 Keyser Avenue
Natchitoches, LA 71457
Business Description: Keyser Avenue Medical Park, LLC owns a land
and building at 1029 Keyser Ave. valued at
$2.4 million.
Chapter 11 Petition Date: June 11, 2021
Court: United States Bankruptcy Court
Western District of Louisiana
Case No.: 21-80221
Judge: Hon. Stephen D. Wheelis
Debtor's Counsel: Bradley L. Drell, Esq.
GOLD, WEEMS, BRUSER, SUES & RUNDELL
POB 6118
Alexandria, LA 71307-6118
Tel: (318) 445-6471
Fax: (318) 445-6476
Email: bdrell@goldweems.com
Total Assets: $3,051,857
Total Liabilities: $3,931,792
The petition was signed by James Knect, MD, managing member.
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/TDFUFWQ/Keyser_Avenue_Medical_Park_LLC__lawbke-21-80221__0001.0.pdf?mcid=tGE4TAMA
KKR REAL ESTATE: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on KKR Real Estate Finance
Trust to stable from negative. S&P also affirmed its long-term
issuer credit rating and term loan B debt rating of 'BB-'.
The outlook revision mainly reflects S&P's view that the likelihood
of substantial further deterioration in KREF's loan portfolio has
lessened since the onset of the COVID-19 pandemic, with the
widespread availability of vaccines and the reopening of the U.S.
economy. Also, the company reported better-than-expected earnings
and stable portfolio performance through the first quarter of 2021.
Preprovision operating earnings for 2020 totaled $105 million,
compared with $91 million for 2019. In the first quarter of 2021,
preprovision operating income was $29 million, compared with $21
million in the first quarter last year. The company saw no margin
calls since inception while impaired loans totaled two--with net
book value of $72 million (net of $38 million of allowance),
accounting for 1.3% of total loan exposure as of March 31, 2021.
The company's exposure to mark-to-credit repurchase agreements, at
24% of funding, is lower than peers. S&P thinks this helps mitigate
liquidity risk in times of stress. That said, the company has a
diversified funding profile but is still reliant on secured sources
of funding.
Office properties, which face uncertain demand as the pandemic
recedes, represent about 35% of KREF's loan portfolio. S&P said,
"However, the quality of the collateral supporting KREF's first
mortgage loans, and the quality of the financial sponsors (which
are their borrowers), will help loan performance, in our view.
About 50% of the company's loan portfolio is in multifamily, where
we see less risk compared with retail, office, and hospitality."
S&P said, "While leverage is higher than pre-pandemic levels, we
expect the company to continue to operate within our expected range
of 3.0x-4.0x. Our measure of leverage includes collateralized debt
obligation funding, which is nonrecourse to the company.
"The stable outlook reflects our expectation that over the next
year KREF--helped by the rebounding economy--will report mostly
stable asset quality trends while maintaining adequate liquidity
and leverage of around 3.0x-4.0x, as measured by debt to adjusted
total equity. Pandemic-related changes and pressures in commercial
real estate, such as in the office market, may still create
challenges for the company and other lenders in the next few years,
but we expect it to work through those over time while maintaining
leverage, funding, and liquidity around current levels.
"We could downgrade the company in the next six to 12 months if
asset quality deteriorates or if it does not maintain adequate
liquidity, in our view. We could also downgrade the company if
leverage rises above 4.5x.
"An upgrade is unlikely over the next six to 12 months. Over time,
we could raise the rating if the company further reduces the risk
in its portfolio, continues to reduce exposure to secured financing
and margin call risk, and maintains sufficient liquidity."
KOHL'S CORPORATION: Egan-Jones Keeps BB- Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company, on May 26, 2021, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Kohl's Corporation.
Headquartered in Menomonee Falls, Wisconsin, Kohl's Corporation
operates a chain of family-oriented department stores.
KOLESZAR FARM: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Koleszar Farm LLC
348 Pineville Road
Newtown Pa 18940
Chapter 11 Petition Date: June 11, 2021
Court: United States Bankruptcy Court
Eastern District of Pennsylvania
Case No.: 21-11653
Judge: Hon. Ashely M. Chan
Debtor's Counsel: Roger V. Ashodian, Esq.
REGIONAL BANKRUPTCY CENTER OF SOUTHEASTERN
PA, P.C.
101 West Chester Pike, Suite 1A
Havertown, PA 19083
Tel: (610) 446-6800
Email: ecf@schollashodian.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Judith M. Antunes, member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/Q3X4BZY/Koleszar_Farm_LLC__paebke-21-11653__0001.0.pdf?mcid=tGE4TAMA
LADDER CAPITAL: S&P Affirms 'BB-' ICR on Ample Liquidity
--------------------------------------------------------
S&P Global Ratings revised its outlook on Ladder Capital Finance
Holdings LLLP (LADR) to stable from negative. S&P also affirmed its
'BB-' long-term issuer credit rating and 'B+' senior unsecured debt
rating.
S&P said, "The outlook revision mainly reflects our view that the
likelihood of substantial deterioration in LADR's loan portfolio
has lessened as the COVID-19 pandemic recedes, with the widespread
availability of vaccines and the reopening of the U.S. economy.
Also, we expect ample liquidity and leverage, measured as debt to
adjusted total equity (ATE), of 2.5x-3.5x on a sustained basis. As
of March 31, 2021, leverage, as measured by debt to ATE, was about
2.5x, versus 2.7x as of Dec. 31, 2020.
"The stable outlook is based on our expectation that over the next
year LADR--helped by the rebounding economy--will report mostly
stable asset quality trends while maintaining adequate liquidity
and leverage of around 2.5x-3.5x, as measured by debt to ATE.
Pandemic-related changes and pressures in CRE, such as in the
office market, may still create challenges for the company and
other lenders in the next few years, but we expect it to work
through those over time while maintaining leverage around current
levels and adequate liquidity.
"We could lower the rating on LADR over the next 12 months if the
company's asset quality significantly deteriorates or liquidity
strains arise. We could also lower the rating if leverage
materially increases above our expected range.
"An upgrade is unlikely over the next 12 months. Over time, we
could raise the ratings if leverage remains well below 2.5x on a
sustained basis, asset quality remains stable, and the company
maintains adequate liquidity."
LAREDO PETROLEUM: Egan-Jones Hikes Sr. Unsecured Ratings to CCC-
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, upgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Laredo Petroleum, Inc. to CCC- from CC. EJR also maintained its
'C' rating on commercial paper issued by the Company.
Headquartered in Tulsa, Oklahoma, Laredo Petroleum, Inc. is an
independent oil and gas company.
LEGGETT & PLATT: Egan-Jones Keeps BB+ Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Leggett & Platt, Incorporated.
Headquartered in Carthage, Missouri, Leggett & Platt, Incorporated
manufactures a wide range of engineered products.
LITTLE RIVER HEALTHCARE: United Rift Stays in Bankruptcy Court
--------------------------------------------------------------
District Judge Alan D. Albright denied the request of United
Healthcare Insurance Company, United Healthcare of Texas, Inc.,
United Healthcare Benefits of Texas, Inc., United Healthcare
Community Plan of Texas L.L.C., to withdraw the bankruptcy court
reference of the adversary case commenced by James Studensky, the
Chapter 7 trustee of Little River Healthcare.
Since 2014, United and Rockdale Blackhawk, LLC d/b/a Little River
Healthcare were parties to a Facility Participation Agreement.
Little River operated healthcare facilities in rural Texas, and the
Agreement obligated United to pay Little River a percentage of
billed charges for services Little River provided to United's plan
members at the designated facilities. United would later
investigate an alleged arrangement between Little River and
OMS/True Health, as United suspected that Little River was
submitting false claims for payment under the Agreement. Shortly
after, United stopped paying Little River for covered services and
began demanding money from Little River in relation to the alleged
false claims for payment.
United filed proofs of claim for $39,418,692 against the bankruptcy
estates of Little River based on allegations of breach of contract,
tortious interference with contract, and fraud and negligent
misrepresentation. On December 7, 2018, the Bankruptcy Court
converted the Debtor's cases to Chapter 7 proceedings and appointed
James Studensky to be the Trustee. On August 24, 2020, the Trustee
commenced the adversary proceeding in the Bankruptcy Court by
filing an Adversary Complaint against United. United filed its
Motion to Withdraw. The Trustee objected.
According to Judge Albright, while the Trustee's Complaint includes
a mixture of "core" and "non-core" proceedings, the Court
nevertheless concludes the relevant factors weigh against
withdrawing the reference. Because the Bankruptcy Court has
presided over this dispute for over two years, Judge Albright says
the Bankruptcy Court is best suited to handle all pre-trial matters
for this proceeding.
The case is, Studensky v. United Healthcare Insurance Company, No.
6:20-MC-00930-ADA.
A copy of the District Court's June 7, 2021 order is available at:
https://www.leagle.com/decision/infdco20210609a22
About Little River
Little River Healthcare Holdings, LLC and its subsidiaries operated
two rural hospitals -- one in Rockdale, Texas, and the other in
Cameron, Texas. They also operated imaging centers, surgery
centers, physical rehabilitation centers, and physician practices,
most of which operate in the Central Texas market.
Little River and its subsidiaries sought protection under Chapter
11 of the Bankruptcy Code (Bankr. W.D. Tex. Case Nos. 18-60525 to
18-60532) on July 24, 2018. In the petitions signed by CRO Ronald
Winters, Little River estimated assets of less than $50,000 and
liabilities of $10 million to $50 million. Judge Ronald B. King
presided over the cases.
The Debtor tapped Waller Lansden Dortch & Davis, LLP, as legal
counsel; Duane Morris, LLP, as special counsel; Harney Management
Partners, LLC, as its healthcare consultant; and Epiq Bankruptcy
Solutions, LLC, as claims, noticing and balloting agent; H2C
Analytics, LLC, as its investment banker.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors. The Committee retained Norton Rose Fulbright
US LLP as its legal counsel; and CBIZ Accounting, Tax and Advisory
of New York, LLC, as its financial advisor.
The Office of the U.S. Trustee appointed Susan N. Goodman as
patient care ombudsman in the Debtors' cases.
On December 7, 2018, the Bankruptcy Court converted the Debtors'
cases to Chapter 7 proceedings and appointed James Studensky to be
the Chapter 7 trustee.
LOEWS CORPORATION: Egan-Jones Keeps BB Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Loews Corporation.
Headquartered in New York, New York, Loews Corporation is a
diversified holding company.
LOYE GRADING: Wins Cash Collateral Access Thru Aug 10
-----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina, Greensboro Division, has authorized Loye Grading & Tree
Service, Inc. to use cash collateral on an interim basis and
provide adequate protection.
The Debtor has requested the use of cash collateral to maintain its
viability as a business.
On April 18, 2017, CHTD filed a UCC Financing Statement with the
North Carolina Secretary of State claiming a security interest in
the Debtor's assets. While the UCC was filed by CHTD, the Debtor
believes the actual secured party is Direct Capital/CIT Bank, NA.
The Debtor says it currently owes $57,234.21 to CIT.
On July 11, 2020, the US Small Business Administration filed a UCC
Financing Statement with the North Carolina Secretary of State
claiming a security interest in the Debtor's personal property. The
Debtor says it owes $150,000 to the SBA.
Pursuant to the Court's Order, the Debtor is authorized to use the
cash collateral in the ordinary course of the Debtor's business
pursuant to the Budget, with a 10% variance through the earliest of
(i) the entry of a final order authorizing the use of cash
collateral, or (ii) the entry of a further interim order
authorizing the use of cash collateral, or (iii) August 10, 2021 or
(iv) the entry of an order denying or modifying the use of cash
collateral, or (v) the occurrence of a Termination Event.
The Debtor is permitted to use cash collateral for the actual and
necessary expenses of operating the Debtor's business and
maintaining the cash collateral pursuant to the Budget.
As adequate protection for the Debtor's use of cash collateral, CIT
and SBA are granted a post-petition replacement lien in the
Debtor's post-petition property of the same kind which secured the
indebtedness of the Secured Parties pre-petition, with such liens
having the same validity, priority, and enforceability as the
Secured Parties had against the same kind of such collateral as of
the Petition Date.
The replacement liens are deemed perfected to the extent the
pre-petition liens and security interests were valid, perfected,
enforceable, and non-avoidable as of the Petition Date.
The Debtor is also directed to pay $250 to CIT on or before July 1
and August 1.
As additional adequate protection, the Debtor will keep all of the
Debtor's personal property insured for no less than the amounts of
the pre-petition insurance.
These events constitute Events of Default:
(i) The effective date of any confirmed chapter 11 plan in
this proceeding;
(ii) Conversion of this case to another chapter of the
Bankruptcy Code or removal of Debtor from possession;
(iii) The entry of further orders of the Court regarding the
subject matter hereof;
(iv) Dismissal of this proceeding; or
(v) Occurrence of an event of default that is not timely cured.
A further hearing on the matter is scheduled for August 10 at 9:30
p.m.
A copy of the order and the Debtor's budget is available for free
at https://bit.ly/3iuuD0y from PacerMonitor.com.
The Debtor projects $70,000 in gross profit and total expenses of
$53,301 for June.
About Loye Grading & Tree Service, Inc.
Loye Grading & Tree Service, Inc., established in June 1997,
contracts with the State of North Carolina to mow the medians of
highways in Rockingham County. It also provides demolition
services, tree services to municipalities, private individuals and
corporations, and grading and other construction-related services.
The Company's president is Ricky W. Loye. His wife Pamela is the
majority shareholder.
Loye Grading sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D.N.C. Case No. 21-10257) on May 10,
2021. In the petition signed by Rickey W. Loye, president, the
Debtor disclosed up to $500,000 in both assets and liabilities.
Judge Benjamin A. Kahn oversees the case.
Dirk W. Siegmund, Esq., at IVEY, MCCLELLAN, GATTON & SIEGMUND
represents the Debtor as counsel.
LSCS HOLDINGS: S&P Alters Outlook to Stable, Affirms 'B-' ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook on LSCS Holdings Inc. (also
known as Eversana) to stable from negative and affirmed its 'B-'
issuer credit rating and issue-level ratings.
S&P said, "The stable outlook reflects our expectation that the
company will increase its revenue at a brisk rate in 2021, mostly
through organic growth. It also reflects our forecast that LSCS'
adjusted EBITDA margins will improve, given its recent
cost-optimization initiatives, and its liquidity will be sufficient
to cover its near-term needs.
"The outlook revision reflects LSCS' solid growth prospects, our
expectation for improving free cash flow generation, and the
increase in the company's liquidity. We expect new contract wins,
cross-selling to its existing clients, and management's cost
optimizations (including right-shoring) will enable it to increase
its adjusted EBITDA by 60%-70% in 2021. LSCS bolstered its
liquidity with a $75 million AR facility in the fourth quarter of
2020 to fund its working capital needs. The company's expansion is
being led by the strong performance of its Professional Services
segment while its Channel segment has been negatively affected by
the reduction in prescription (Rx) shipping volume amid the
pandemic. That said, we expect the performance of its Channel
segment to recover this year."
LSCS operates seven business segments (Channel Management; Agency,
Advisory, and Evidence Services or Professional Services; Patient
Services; Compliance Services; Field Solutions; Data & Analytics;
and Global Products) with a focus on drug commercialization. The
company's main customers are small- to mid-size pharmaceutical and
biopharmaceutical companies, as well as a diverse set of companies
that use its consulting services. LSCS also derives a material
portion of its revenue from the top 20 pharma companies.
S&P's growth expectations also reflect its view that LSCS will
benefit from the continued expansion of pharmaceutical research and
development (R&D) and the outsourced commercialization market.
Increasing levels of R&D spending will support rising demand for
downstream commercialization services. While many large
pharmaceutical manufacturers retain internal commercialization
functions, there has been a trend toward outsourcing such
activities to third-party providers, such as LSCS, by small- and
mid-size biotech companies because they lack the in-house
infrastructure to perform many commercialization activities.
However, LSCS competes against subsidiaries of the big three
wholesalers (McKesson Corp., AmerisourceBergen Corp., and Cardinal
Health Inc.) in the channel and patient services segments. S&P
said, "In addition, we see an increasing number of specialty
pharmacies and contract research organizations (CROs) expanding
into this space as a natural extension of their core businesses.
Going forward, we expect the company will face additional
competition from Syneos Health Inc., IQVIA Inc., Amplity, and
others."
S&P said, "Our rating reflects LSCS' high leverage, lack of a track
record for generating positive free cash flow, some customer
concentration (its top five customers account for about 25% of its
total revenue), and small scale in the fragmented drug
commercialization industry. It also reflects the company's lack of
a leadership position in any of the services it offers. However,
LSCS has a flexible cost structure and a material level of
recurring revenue in its Patient Services and Channel businesses.
"With high revenue visibility and solid first quarter-growth, we
expect the company's revenue to rise by the low-double-digit
percent area while its margins expand to about 8% in 2021. However,
given its still small EBITDA base, high leverage, and material
growth capital expenditure, we expect it will generate free cash
flow of less than $5 million in 2021. We expect LSCS to continue to
undertake acquisitions and forecast its leverage will remain high,
at more than 5x, for the next two years.
"The stable outlook on LSCS reflects our expectation that it will
continue to expand its revenue at a brisk rate in 2021 supported by
its strong pipeline. It also reflects our forecast for an adjusted
EBITDA margin of about 8%-9% and sufficient liquidity to cover its
near-term needs.
"We could lower our rating on LSCS if the pace of its contract wins
slows, it loses major customers, or it faces integration issues
that lead to persistent free cash flow deficits or increase the
risk that its cash flow generation will be insufficient to cover
its maintenance capital spending and amortization.
"Although unlikely over the next 12 months, we would consider
upgrading LSCS if it continues to expand and improves its margins
such that it sustains discretionary cash flow to debt of more than
3% and annual cash flow generation of greater than $15 million."
MALLINCKRODT PLC: Bids to Centralize 10 Acthar Gel Suits Denied
---------------------------------------------------------------
The Hon. Karen K. Caldwell, Chair of the United States Judicial
Panel on Multidistrict Litigation, denied a request to centralize
these actions in the Northern District of Illinois or,
alternatively, the District of New Jersey:
Central District of California
HUMANA, INC. v. MALLINCKRODT ARD LLC, ET AL., C.A. No.
2:19-06926
Northern District of California
HEALTH CARE SERVICE CORP. v. MALLINCKRODT ARD LLC, ET
AL., C.A. No. 3:21-00165
District of Delaware
INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 542 v.
MALLINCKRODT ARD, INC. ET AL., C.A. No. 1:21-00647
Northern District of Georgia
CITY OF MARIETTA v. MALLINCKRODT ARD LLC, C.A. No.
1:20-00552
Northern District of Illinois
CITY OF ROCKFORD v. MALLINCKRODT ARD, INC., ET AL.,
C.A. No. 3:17-50107
MSP RECOVERY CLAIMS, SERIES LLC, ET AL. v. MALLINCKRODT
ARD INC., ET AL., C.A. No. 3:20-50056
District of New Jersey
UNITED ASSOCIATION OF PLUMBERS & PIPEFITTERS LOCAL
322 OF SOUTHERN NEW JERSEY v. MALLINCKRODT ARD, LLC,
ET AL., C.A. No. 1:20-00188
Eastern District of Pennsylvania
STRUNCK, ET AL. v. QUESTCOR PHARMACEUTICALS, INC.,
C.A. No. 2:12-00175
STEAMFITTERS LOCAL UNION NO. 420 v. MALLINCKRODT ARD,
LLC, ET AL., C.A. No. 2:19-03047
Western District of Tennessee
ACUMENT GLOBAL TECHNOLOGIES v. MALLINKRODT ARD, INC.,
ET AL., C.A. No. 2:21-02024
Plaintiff in the Northern District of California action supports
the motion.
The Express Scripts defendants suggest Section 1407 centralization
in the District of Delaware. The Express Scripts defendants are
Express Scripts, Inc.; Evernorth Health Inc. f/k/a Express Scripts
Holding Co.; CuraScript, Inc. d/b/a CuraScript SP Specialty
Pharmacy; Priority Healthcare Corp.; Priority Healthcare
Distribution, Inc. d/b/a CuraScript SD Specialty Distribution;
Accredo Health Group, Inc.; and United BioSource LLC f/k/a United
BioSource Corp.
The Central District of California plaintiff opposes
centralization.
Common defendants Mallinckrodt ARD LLC (f/k/a Mallinckrodt ARD
Inc.) and Mallinckrodt plc oppose Section 1407 centralization in
favor of allowing transferor courts to rule on pending motions to
transfer most of the pending actions to the District of Delaware
under 28 U.S.C. Sections 1412 or 1404. Mallinckrodt alternatively
suggests Section 1407 centralization in the District of Delaware.
The United States -- intervenor in the Eastern District
Pennsylvania Strunck qui tam action -- opposes including Strunck in
centralized proceedings. In reply, moving plaintiffs agree that
Strunck should remain in the Eastern District of Pennsylvania.
"[W]e are not persuaded that centralization is necessary for the
convenience of the parties and witnesses or to further the just and
efficient conduct of this litigation at this time," Judge Caldwell
said. "These actions share factual questions arising from
allegations that Mallinckrodt unlawfully raised Acthar's price and
marketed and sold the drug at inflated prices. The actions
variously allege a complex and multi-faceted scheme by defendants,
including (a) contracting with the Express Scripts defendants to be
the exclusive distributor of Acthar, (b) buying and shelving a
competing drug, (c) bribing doctors to prescribe Acthar and
aggressively promoting it for off label uses, and (d) improperly
funneling copays through a charitable organization. Some complaints
allege just one or two components of this scheme, while others
include all of them. And some actions name the Express Scripts
defendants, while others do not. But almost all parties agree that
there is factual and legal overlap among all actions and that
coordination or consolidation of some kind is appropriate."
"Despite this overlap, the uncertainty about the timing and outcome
of related bankruptcy proceedings makes Section 1407 centralization
premature at this time. Common defendants are the debtors in
Chapter 11 bankruptcy proceedings in the District of Delaware,
ongoing since October 2020, and the claims against all defendants
are stayed in their entirety. Furthermore, there are motions for
transfer under 28 U.S.C. Sections 1412 or 1404 pending in eight of
the actions. . . . Therefore, it is unclear where these claims will
be pending or whether Section 1407 centralization will be necessary
once the stay is lifted."
The case is, In re Acthar Gel Antitrust Litigation, MDL No. 2999.
A copy of the Court's June 7, 2021 Order is available at:
https://www.leagle.com/decision/infdco20210609859
About Mallinckdrodt PLC
Mallinckrodt -- http://www.mallinckrodt.com/-- is a global
business consisting of multiple wholly owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
As of March 27, 2020, the Company had $10.17 billion in total
assets, $8.27 billion in total liabilities, and $1.89 billion in
total shareholders' equity.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware in the U.S. (Bankr. D.
Del. Lead Case No. 20-12522) to seek approval of a restructuring
that would reduce total debt by $1.3 billion and resolve opioid
related claims against the Company.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Latham & Watkins LLP, Ropes & Gray LLP and Wachtell, Lipton, Rosen
& Katz are serving as counsel to the Company, Guggenheim
Securities, LLC is serving as investment banker and AlixPartners
LLP is serving as restructuring advisor to Mallinckrodt. Hogan
Lovells is serving as counsel with respect to the Acthar Gel
matter. Prime Clerk LLC is the claims agent.
MANITOWOC COMPANY: Egan-Jones Hikes Senior Unsecured Ratings to B
-----------------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, upgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Manitowoc Company, Inc. to B from B-.
Headquartered in Manitowoc, Wisconsin, Manitowoc Company, Inc. is a
diversified industrial manufacturer of cranes and related
products.
MARATHON OIL: Egan-Jones Keeps BB Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Marathon Oil Corporation.
Headquartered in Houston, Texas, Marathon Oil Corporation is an
independent international energy company.
MARATHON PETROLEUM: Egan-Jones Keeps BB Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Marathon Petroleum Corporation.
Headquartered in Findlay, Ohio, Marathon Petroleum Corporation
operates as a crude oil refining company.
MARRIOTT INTERNATIONAL: Egan-Jones Cuts Sr. Unsec. Ratings to BB
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, downgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Marriott International Inc. to BB from BB+.
Headquartered in Bethesda, Maryland, Marriott International Inc. of
Maryland is a worldwide operator and franchisor of hotels.
MARRIOTT VACATIONS: S&P Alters Outlook to Stable, Affirms 'B+' ICR
------------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed all its ratings on Marriott Vacations Worldwide Corp.
(MVW), including the 'B+' issuer credit rating.
MVW is also seeking to raise $450 million of senior unsecured notes
to redeem a portion of the 6.5% senior unsecured notes due in 2026,
which S&P views as an approximately leverage-neutral refinancing.
S&P said, "We assigned our 'B-' issue-level rating to the proposed
$450 million senior unsecured notes.
"The stable outlook reflects our updated forecast that MVW could
restore credit metrics to be consistent with the 'B+' issuer credit
rating by the fourth quarter of 2021 on a run-rate basis and that
full-year captive-adjusted debt to EBITDA could be in the 6.5x-8x
range in 2021, potentially improving to the 4x-5.5x range in 2022
if the travel recovery continues in the U.S.
"Our outlook revision to stable reflects increasing confidence that
MVW can meet or outperform our previous sales and leverage
expectations for 2021 and 2022, and restore credit metrics
commensurate with the 'B+' rating by the fourth quarter of 2021 on
a run-rate basis. Our updated forecast is that MVW will have
captive-adjusted debt to EBITDA in the 6.5x-8x range in 2021,
potentially improving to the 4x-5.5x range in 2022 if the travel
recovery continues in the U.S. Additionally, on a run-rate basis,
we expect leverage below our 6.25x downgrade threshold by the
fourth quarter of 2021. Our updated base-case forecast compares
favorably to our previous forecast, which assumed captive-adjusted
leverage would be above 10x in 2021 and potentially recover to
5.25-6x in 2022. The favorable update to our assumptions reflects
an improved forecast for timeshare sales based on first-quarter
results and an anticipated sales momentum in the second quarter. We
expect first-half gross contract sales of $546 million-$566
million, a level of sales that gives us confidence the company will
outperform our previous assumption of about $1 billion for
full-year 2021. We previously assumed 2021 contract sales of
25%-35% below 2019 levels, and we now believe that range could be
15%-25% because of quarterly sequential improvement during the
remainder of the year as occupancy at the company's timeshare
resorts continues to ramp up." Near-term contract sales will likely
generate high margin because they are mostly made to existing
owners who purchase points upgrades. These sales tend to have
higher closing rates, temporarily elevated volume per guest (VPG),
and higher margin. Near-term sales also will likely not burden
inventory spending and working capital's use of cash, because the
Welk Resorts acquisition added to inventory and as a result, MVW
has sufficient inventory on hand equivalent to about three years of
anticipated sales.
The economic and travel recovery has gained momentum during recent
months. Total nights booked at MVW's resorts for the second half of
2021 have exceeded levels in the same period in 2019, indicating
meaningful pent-up demand. Occupancy at select MVW regional beach
and mountain resorts reached 80%-95% in March, and we believe the
improving trends continued in the second quarter. MVW also has
sizable exposure to destination markets such as Hawaii and Orlando,
Fla., which together accounted for a little more than 40% of
pre-COVID-19 contract sales and these markets in recent months have
experienced a healthy rebound. Data released by Hawaii's Department
of Transportation show that total passenger count of flights to the
state in the second half of May recovered to about 75% of
same-period 2019 levels, which demonstrates continued monthly
sequential improvement since the second half of 2020. Occupancy in
regional markets including the U.S. Midwest mountain region, some
parts of California, and beach resorts in Florida have also
rebounded. Meanwhile, MVW's exposure to urban markets such as New
York and San Francisco, where the company recently developed
inventory, could lag the overall recovery. Other markets that have
recovered faster could partially offset that lag. Recovery in
destination and urban markets is likely to depend on consumers'
perception of safety to travel by air and the loosening of capacity
restrictions at local attractions.
Considerable near-term quarter-over-quarter increases in demand
could introduce operating variability. During the initial period of
the recovery, pent-up demand led by consumers with a strong
propensity to travel could enable MVW to upsell its existing owners
by upgrading them to higher-priced inventory, which typically
entails relatively high margin. The pool of existing owners
inclined to purchase upgrades is finite, therefore the
sustainability of upgrade sales is a risk factor over time. S&P
said, "We believe MVW will need to attract new buyers in 2022 and
shift the mix of sales to new and current owners toward historical
levels to achieve our leverage forecasts, although the company
should still have a sufficient cushion against our downgrade
threshold even if it falls short of these targets. When the mix of
sales to new owners increases, sequential EBITDA margin recovery
could plateau because new owner sales require greater selling and
marketing costs. Over time as tour flows recover substantially, we
expect the company to revert to pre-pandemic VPG."
In the near term, occupancy at MVW resorts could be 90%-100% at
some locations. The high demand could exceed room supply and lead
to customer dissatisfaction if some owners cannot book their
preferred arrangements. To maintain service levels and customer
loyalty, MVW may need to offer secondary booking options or period
extensions for points usage, which could dampen EBITDA margin
recovery.
Considerations that help mitigate financial risk include the
strength of the Welk portfolio and MVW's equity and convertible
notes issuances. S&P said, "We view the recent Welk acquisition
favorably because it satisfies a key business goal under MVW's
license agreement with Hyatt and complements the portfolio's
geographic footprint with high-quality assets. Also, MVW has an
established track record of integrating acquisitions. MVW has
resort development requirements under the Hyatt license agreement,
which will increase Hyatt Residence Club-branded resorts by more
than 50%. The Welk integration is also likely to expand Welk's
timeshare sales profit margin over several years, because the Hyatt
rebranding and larger MVW-managed marketing platform could provide
access to customers with better credit profiles. This would result
in fewer credit losses over time and bring scale and sales
efficiencies associated with branded distribution channels. In
addition, the Welk inventory is ready for sale, which reduces the
need for working capital investments. We believe MVW can integrate
Welk based on its track record with the ILG acquisition."
MVW's decision to issue equity and convertible notes is also a risk
mitigant. The convertible notes priced at 0% interest, therefore
the transaction won't burden cash interest coverage. S&P said,
"While we view the convertible notes as debt, their potential
conversion into equity would be credit-positive. After their
issuance, the convertible notes were allocated an unamortized
discount that reflects the value of an equity component, which we
net against debt." The debt balance will rise each period as the
discount is amortized.
These factors are partially offset by MVW's willingness to engage
in a partially debt-financed acquisition during a recovery. This
slows the company's restoration of credit measures and makes it
more vulnerable to inadvertent operating missteps or further delays
in the travel sector and overall economic recovery. The convertible
notes issuance and acquisition increased net corporate debt by $275
million-$300 million, incorporating Welk's monetizable receivables.
Welk's adjusted EBITDA as measured by MVW was $29 million in 2019,
and about $11 million on a captive-adjusted basis (excluding
financing EBITDA). Welk's current run-rate captive-adjusted EBITDA
is probably considerably lower than $11 million because of the
pandemic. S&P said, "As a result, we estimate the acquisition will
likely have a leveraging impact on MVW in 2021 and 2022. Achieving
target EBITDA and margin underwritten in the acquisition will
depend on a travel recovery and cost-saving initiatives. We believe
it is increasingly plausible that Welk can achieve its target
EBITDA over time, based on recent indications of good occupancy
near 100% during the Memorial Day weekend." MVW's risk tolerance
for the acquisition could indicate an appetite for transactions
because management has stated it remains open to additional
acquisitions while balancing the Welk integration.
MVW has adjusted its cost structure and raised sufficient funds for
adequate liquidity during the COVID-19 pandemic. S&P said, "We
estimate MVW would have about $1.3 billion of liquidity pro forma
for the proposed notes issuance, consisting of $431 million cash,
revolver availability of $598 million, and eligible receivables
that can generate $300 million through securitization. We
understand MVW can generate positive consolidated operating cash
flow (including captive finance operations cash flow) on an average
monthly basis going forward." MVW's ability to generate cash flow
improved since mid-2020 partly as a result of cost cuts and planned
synergies totaling $200 million. They are intended to be permanent
and fully implemented by year-end 2021, materially benefiting
margin on a full-year basis in 2022. The cost savings and synergies
incorporate the use of technology to generate sales more
efficiently, the effect of which we believe may become more
apparent in higher EBITDA margin over time after timeshare sales
rebound substantially.
Amid low timeshare demand, liquidity sources include recurring
revenue streams such as financing revenue and resort management
fees. At the end of the first quarter in 2021, MVW's revolver had
$598 million of available capacity. In addition, MVW had $345
million of gross notes available for securitization under the
warehouse that can generate liquidity. As MVW finances more
timeshare sales, it can pledge more receivables to the warehouse.
The warehouse is typically an interim liquidity source to make new
consumer loans, and its potential usage for operating expenses
could reduce availability for the company to originate consumer
loans. Liquidity uses include cash operating expenses, inventory
purchases, capital expenditures (capex), debt amortization, and
interest expense. S&P assumes MVW will make no dividends and share
repurchases in 2021.
While risk at the captive finance subsidiary will likely increase
in 2021, it had good leverage cushion entering the pandemic. MVW
experienced average annual historical default rates on gross
vacation ownership note receivables of 6.3% in 2020 and 4.5% in
2019. Default rates could remain elevated at least in the first
half of 2021 and result in write-offs on delinquent vacation
ownership loans, which could moderately deteriorate the captive's
debt-to-equity ratio. For legacy MVW vacation ownership notes
receivables, the average default rates were 6.74% in the fourth
quarter of 2020 and 6.58% in the first quarter of 2021, therefore
default rates remain elevated compared to 2019. MVW ended 2020 with
2.8x S&P-adjusted debt to equity at the captive, which S&P believes
could rise to 3x-4x in 2021. If it sustains default rates above 5%,
the captive's financial risk could rise enough to impair MVW's
overall financial risk. Higher default rates and financial risk at
the captive could also result in more cash outlays at MVW, to the
extent the company chooses to support the credit quality of
securitized loans or opportunistically repurchases low-cost
timeshare inventory underlying any defaults.
S&P said, "However, we do not believe the captive would
significantly hurt the parent's financial risk in a manner that
would lead to a downgrade. The captive debt-to-equity ratio in 2020
had a cushion to the 5x downgrade threshold. The captive can absorb
some deterioration in loan losses without impairing MVW's overall
financial risk. Furthermore, while annualized loan losses could be
elevated in 2021 because of the pandemic, these losses represent
cyclical performance rather than a fundamental shift in
underwriting standards. We therefore may not lower the rating
solely based on this risk factor. We also believe default rates
will be helped by government stimulus and loan deferral programs in
the near term.
"The stable outlook reflects our updated forecast that MVW could
restore credit metrics consistent with the 'B+' issuer credit
rating by the fourth quarter of 2021 on a run-rate basis, and that
full-year captive-adjusted debt to EBITDA could be in the 6.5x-8x
range in 2021, potentially improving to the 4x-5.5x range in 2022
as long as the travel recovery continues in the U.S. The stable
outlook also reflects our increasing confidence in MVW's timeshare
contract sales rebound and improvement in credit metrics."
S&P could lower the rating if:
-- Travel demand does not continue to recover in 2021 and 2022,
causing MVW's captive-adjusted debt to EBITDA to be sustained above
6.25x through 2022;
-- Liquidity significantly deteriorates compared to our forecast;
-- The timeshare asset-backed securitization (ABS) markets become
prohibitively expensive or unavailable; or
-- Risk in the captive finance subsidiary rises enough to impair
the parent's financial risk, which could occur if the captive's
debt-to-equity ratio is sustained above 5x or loan losses in the
captive's portfolio increased materially and were sustained above
5%.
S&P could consider rating upside once:
-- S&P believes widespread immunization could lead to a sustained
travel and economic recovery that would enable MVW to sustain
captive-adjusted debt to EBITDA below 5.5x; and
-- Visibility increases around the sustainability of contract
sales in 2022 and beyond.
MAXLINEAR INC: S&P Rates New $350MM First-Lien Term Loan 'BB-'
--------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' rating to MaxLinear Inc.'s
proposed $350 million first-lien term loan based on a recovery
rating of '3'. The '3' recovery rating indicates its expectation
for meaningful (50%-70%; rounded estimate: 55%) recovery in the
event of a payment default.
MaxLinear intends to use the proceeds from the term loan due in
2028 to fully repay its existing term loans with a total
outstanding amount of about $350 million maturing in 2023 and 2024.
As a result, S&P does not expect the transaction to materially
affect our forecast credit metrics.
The company also intends to obtain an undrawn $100 million
revolving credit facility (RCF) maturing in 2026, which will help
bolster its liquidity position. S&P does not rate the RCF, which it
expects to have a springing covenant based on a maximum secured
leverage ratio.
S&P said, "We will review the final terms upon completion of the
transaction, and if they differ significantly from our assumptions,
we may revise our issue-level or recovery ratings on the first-lien
term loan. We plan to withdraw our existing ratings on the
outstanding term loans after they have been repaid."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P rates the proposed $350 million first-lien term loan due in
2028 'BB-' with a '3' recovery rating. The '3' recovery rating
indicates its expectation for meaningful (50%-70%; rounded
estimate: 55%) recovery in the event of a payment default.
-- S&P's hypothetical default scenario envisages end-market
volatility and customer losses due to increased competition in the
analog and communications semiconductor industry. S&P assumes the
RCF is 85% drawn at default.
--S&P values MaxLinear as a going concern because of its strong
intellectual property portfolio. S&P therefore believes that
following a payment default, it is likely to be reorganized rather
than liquidated.
Simulated default assumptions
-- Year of default: 2025
-- Emergence EBITDA after recovery adjustments: About $48.5
million
-- EBITDA multiple: 5.5x
Simplified waterfall
-- Gross enterprise value: About $266.5 million
-- Net enterprise value (after 5% administrative costs): About
$253 million
-- First-lien debt claims*: About $436 million
--Recovery expectations**: 50%-70% (rounded estimate: 55%)
*All debt amounts include six months of prepetition interest. RCF
is assumed to be 85% drawn at default.
**Rounded down to the nearest 5%.
MEDIA LODGE: May Use Cash Collateral Thru July 25
-------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware has
authorized Media Lodge, Inc. to continue using cash collateral
through July 25, 2021, in accordance with the budget. The Court
order also held that Gemini Direct, LLC replaces Gemini Direct
Investment, LLC, as the DIP Lender.
The Court says all references to DIP Lender in the DIP Order and
the DIP Term Sheet will refer to Gemini Direct, LLC effective as of
April 23, 2021, with Gemini Direct, LLC taking on and assuming all
of the duties, rights, and obligations of Gemini Direct
Investment.
The Debtor, Gemini Direct Investment and Gemini Direct, LLC are
authorized to take all actions necessary to effectuate the relief
granted in the Order.
A copy of the order is available for free at https://bit.ly/35e9yQ4
from PacerMonitor.com.
About Media Lodge
Media Lodge, Inc. -- http://www.medialodge.com-- is a content
creation studio, digital distribution platform, and sales
representation company dedicated to outdoor enthusiasts. The Media
Lodge content studio creates exclusive online articles, product
reviews and original video series such as The Good Fight, Finding
Fearless, The American New Shooter Academy, American Nomads, New
Gear and Guns, In The Hunt, Range Drills, At the Ranch --
Whitetail, At the Range, 4Outdoors featuring Dog2DogTags, The
Shooting Sports Industry Influencer Series and more.
Media Lodge sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Case No. 20-12969) on Nov. 10, 2020. The
petition was signed by Jeff Siegel, the company's chief executive
officer and president.
At the time of filing, the Debtor had estimated assets of between
$100,000 and $500,000 and liabilities of between $10 million and
$50 million.
Judge John T. Dorsey oversees the case.
Gellert Scali Busenkell & Brown, LLC is the Debtor's legal
counsel.
MERITOR INCORPORATED: Egan-Jones Keeps BB- Sr. Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Meritor, Inc.
Headquartered in Troy, Michigan, Meritor, Inc. manufactures
automobile components for military suppliers, trucks, trailers, and
specialty vehicles.
MICROCHIP TECHNOLOGY: Egan-Jones Keeps B+ Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on May 26, 2021, maintained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Microchip Technology Incorporated.
Headquartered in Chandler, Arizona, Microchip Technology
Incorporated designs, manufactures, and markets microcontrollers,
related mixed-signal and memory products, and application
development systems for high-volume embedded control applications.
MOBBBT LLC: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: MOBBBT, LLC
12345 Mercy Blvd.
Savannah, GA 31419
Chapter 11 Petition Date: June 11, 2021
Court: United States Bankruptcy Court
Southern District of Georgia
Case No.: 21-40379
Judge: Hon. Edward J. Coleman III
Debtor's Counsel: James L. Drake, Jr., Esq.
JAMES L. DRAKE, JR. PC
P.O. Box 9945
Savannah, GA 31412
Tel: (912) 790-1533
E-mail: jdrake@drakefirmpc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by John D. Northrup, Jr., sole member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/LWLBGQQ/MOBBBT_LLC__gasbke-21-40379__0001.0.pdf?mcid=tGE4TAMA
MONAKER GROUP: Incurs $16.5M Net Loss in FY Ended Feb. 28
---------------------------------------------------------
Monaker Group, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$16.51 million on $48,338 of travel revenues for the year ended
Feb. 28, 2021, compared to a net loss of $9.45 million on $441,769
of travel revenues for the year ended Feb. 29, 2020.
As of Feb. 28, 2021, the Company had $25.99 million in total
assets, $6.83 million in total liabilities, and $19.16 million in
total stockholders' equity.
Sugar Land, Texas-based TPS Thayer, LLC, the Company's auditor
since 2020, issued a "going concern" qualification in its report
dated June 7, 2021, citing that the Company has suffered recurring
losses from operations and has stockholders' deficit that raise
substantial doubt about its ability to continue as a going
concern.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1372183/000158069521000154/mkgi-10k_022821.htm
About Monaker Group
Headquartered in Sunrise, Florida, Monaker Group, Inc. --
www.Monakergroup.com -- is an innovative technology company that is
building next generation solutions to power the travel, gaming, and
cryptocurrency industries.
MOOG INC: S&P Alters Outlook to Stable, Affirms 'BB+' ICR
---------------------------------------------------------
S&P Global Ratings revised its outlook on Moog Inc. to stable from
negative and affirmed all its ratings on the company, including its
'BB+' issuer credit rating.
The stable outlook reflects S&P's expectation that funds from
operations (FFO) to debt will remain solidly above 20% in fiscals
2021 and 2022.
Fiscal 2021 earnings (ended September) will likely modestly improve
from 2020 after Moog weathered the COVID-19 pandemic. The bottom of
the commercial aerospace market is likely behind Moog. The market
has already shown signs of recovery, but we expect the rebound to
take time. Moog's commercial segment is made up of original
equipment manufacturing and aftermarket work. S&P said, "The
manufacturing business is larger than the aftermarket, and we
expect a slower recovery as widebody aircraft orders slowly pick
up. We expect commercial aircraft to continue to represent a
smaller portion of Moog's overall business, likely below 20% of
annual revenues."
Moog's end-market diversity should help its recovery from the
pandemic.Space and defense controls account for more than half of
the company's revenue, and those markets remain on strong footing.
While the defense budget growth is likely to be flat or to decline
slightly, Moog is in a good position with work on the steady F-35
stealth jet platform and continues to win new business with the
U.S. Department of Defense. Hypersonics is an area of potential
growth, helping to increase a portion of defense revenues while
military aircraft sales flatten.
S&P said, "Moog's financial policy could limit substantial credit
measure improvement. The company has a history of pursuing growth
through acquisitions, and we expect that to continue. Moog acquired
Genesys Aerosystems in December 2020, adding to its aerospace
business, but we expect acquisitions in other markets. We also
expect Moog to maintain its dividend, now that the worst of the
pandemic appears to be over, and continue to pursue opportunistic
share repurchases.
"The stable outlook reflects our expectation that credit measures
will improve slightly over the next few years, but eventually level
off as Moog continues to pursue acquisitions and shareholder
returns. This should result in FFO to debt of 23%-26% in 2021 and
25%-28% in 2022."
S&P could lower the ratings in the next 12 months if FFO to debt
declines below 20% and S&P expects it to remain there for a
sustained period. This could be caused by:
-- Longer than expected weakness in the commercial aerospace
market as it rebounds from the pandemic;
-- Decreased defense spending as the U.S. government seeks to
offset pandemic costs; or
-- Larger than expected debt-financed acquisitions or shareholder
returns.
S&P could raise the ratings in the next 12 months if FFO to debt
rises above 30% and S&P expects it to remain there even with
potential acquisitions and shareholder returns. This could occur
if:
-- Earnings and cash flow improve more than expected due to
stronger demand in commercial aerospace and defense; and
-- Management commits to adopting a less aggressive financial
policy, with all acquisitions and shareholder returns funded with
free cash flow.
MOTOROLA SOLUTIONS: Egan-Jones Keeps BB+ Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Motorola Solutions, Inc.
Headquartered in Chicago, Illinois, Motorola Solutions, Inc. is a
data communications and telecommunications equipment provider.
NATIONAL FUEL: Egan-Jones Keeps BB Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by National Fuel Gas Company.
Headquartered in Williamsville, New York, National Fuel Gas Company
is a diversified energy company with $6.2 billion in assets
distributed among the following five operating segments:
Exploration and Production, Pipeline and Storage, Gathering,
Utility, and Energy Marketing.
NETSCOUT SYSTEM: Egan-Jones Keeps BB Senior Unsecured Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by NetScout Systems, Inc.
Headquartered in Westford, Massachusetts, NetScout Systems, Inc.
designs, develops, manufactures, markets, and supports a family of
products that enable businesses and service providers to manage the
performance of computer networks and business software
applications.
NEW BETHEL: August 3 Disclosure Statement Hearing Set
-----------------------------------------------------
On May 31, 2021, debtor New Bethel Baptist Church filed with the
U.S. Bankruptcy Court for the Eastern District of Virginia a
Disclosure Statement and Plan. On June 8, 2021, Judge Frank J.
Santoro ordered that:
* Aug. 3, 2021, at 11:00 a.m., at Chief Judge Santoro's
Courtroom, 600 Granby Street, 4th Floor, Courtroom Two, Norfolk,
Virginia is the hearing to consider the approval of the disclosure
statement.
* July 27, 2021 is fixed as the last day for filing and
serving written objections to the disclosure statement.
A copy of the order dated June 8, 2021, is available at
https://bit.ly/358641z from PacerMonitor.com at no charge.
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
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: Gets OK to Hire Shell Law Firm as Special Counsel
-------------------------------------------------------------------
New York Classic Motors, LLC received approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
The Shell Law Firm, PLLC as special counsel.
The Debtor needs the firm's legal assistance in a case involving
Hudson River Park Trust (Adversary Proceeding Case No.
21-01125-MG).
Martin Shell, Esq., the firm's attorney who will be providing the
services, will be paid at the rate of $350 per hour and reimbursed
for work-related expenses incurred.
Mr. Shell 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:
Martin Shell, Esq.
The Shell Law Firm, PLLC
11 Broadway Suite 615
New York, NY 10004
Tel: (646) 616-3983
About New York Classic Motors
New York Classic Motors LLC, a classic car dealer in New York,
filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case
No. 21-10670) on April 9, 2021. At the time of the filing, the
Debtor had between $10 million and $50 million in both assets and
liabilities. Judge Martin Glenn oversees the case. Kirby Aisner &
Curley, LLP is the Debtor's legal counsel.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on April 29, 2021. The committee is
represented by Arent Fox, LLP.
NIELSEN N.V.: Egan-Jones Keeps B- Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Nielsen N.V. EJR also maintained its 'B' rating on
commercial paper issued by the Company.
Headquartered in New York, New York, Nielsen N.V. is a global
information and measurement company.
NITRIDE SOLUTIONS: Seeks to Use Cash Collateral
-----------------------------------------------
Nitride Solutions, Inc. asks the U.S. Bankruptcy Court for the
District of Kansas for authority to use cash collateral in
accordance with the budget and provide adequate protection.
Nitride Solutions needs to use Cash Collateral generated by the
Debtor prior to the Petition Date and encumbered by the consensual
lien of Nelnet, Inc., a Nebraska corporation, as the collateral
agent for the lender, as well as income generated by the Debtor
from and after the Petition Date and received by the Debtor during
the Specified Period in a manner consistent with the Debtor's
budget. The Debtor proposes to deposit the Cash Collateral into the
Debtor's debtor-in-possession account.
The Debtor owns accounts receivable valued at approximately $10,810
and bank accounts with a balance of approximately $57,671. There is
a consensual lien against the accounts receivable and bank accounts
granted to Nelnet under the 2017 Secured Convertible Promissory
Notes in the original aggregate amount of $2,750,000.
The Indebtedness owed by Nitride to Nelnet is still outstanding and
secured by all of Nitride's assets, including all of its deposit
accounts and accounts receivable.
The Debtor proposes as adequate protection to Nelnet a replacement
lien in post-petition accounts receivable generated by the Debtor
to the extent of the Debtor’s use of the Cash Collateral.
A copy of the motion and the Debtor's four-month budget is availabe
for free at https://bit.ly/3gukUVl from PacerMonitor.com.
The budget projects $147,164 in total operating expenses and
administrative costs for the first month.
About Nitride Solutions, Inc.
Nitride Solutions, Inc. owns and runs a manufacturing operation
headquartered in Wichita, Kansas. It sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Kan. Case No.
21-10533) on June 9, 2021. In the petition signed by Jeremy Jones,
president and chief executive officer, the Debtor disclosed up to
$10 million in assets and up to $50 million in liabilities.
Mark J. Lazzo, Esq. is the Debtor's counsel.
NOVETTA SOLUTIONS: S&P Places 'B-' ICR on CreditWatch Positive
--------------------------------------------------------------
S&P Global Ratings placed its ratings on Arlington, Va.-based U.S.
government service contractor Novetta Solutions LLC, including the
'B-' issuer credit rating, on CreditWatch with positive
implications.
The CreditWatch placements reflect S&P's view that the transaction
could improve Novetta's credit profile because Accenture is a
higher-rated entity.
S&P said, "The positive CreditWatch placements reflect the
potential that we would raise our ratings on Novetta after its
acquisition by Accenture. We expect to equalize the ratings on
Novetta with those on Accenture when the acquisition closes. We
expect the transaction to close later in 2021.
"We expect to resolve the CreditWatch placement when the
acquisition closes, at which time we anticipate equalizing the
ratings on Novetta with those of Accenture and discontinuing the
ratings on Novetta. Alternatively, we would reassess our ratings on
Novetta should the transaction fail to close, most likely causing
us to affirm the current ratings with a stable outlook."
NTH SOLUTIONS: Seeks to Hire Asterion Inc. as Valuation Expert
--------------------------------------------------------------
Nth Solutions, LLC seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Pennsylvania to employ Asterion, Inc.,
a Philadelphia-based valuation expert.
The firm's services include:
a. analyzing and conducting a valuation of the Debtor's
interests in various businesses;
b. preparing projections and a liquidation analysis in support
of the Debtor's proposed plan of reorganization;
c. preparing a valuation report of the Debtor's interests in
various businesses and schedules in support of the plan; and
d. providing expert testimony.
Asterion's hourly rates are as follows:
Principals/Managing Directors $350 to $550 per hour
Consultants $225 to $345 per hour
Paraprofessionals $125 to $220 per hour
The firm will be reimbursed for out-of-pocket expenses incurred.
As disclosed in court filings, Asterion is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Asterion, Inc.
1617 JFK Boulevard, Suite 1040
Philadelphia, PA 19103
Tel: (215) 893-9901
Fax: (215) 893-9903
About Nth Solutions LLC
Nth Solutions, LLC -- https://nth-solutions.com/ -- operates a
facility located at 15 East Uwchlan Ave., in Exton, Pa., where it
manufactures electronic and mechanical precision devices. In
addition to its own product line, Nth Solutions also works with its
clients using a proprietary market-driven methodology in order to
produce additional "state-of-the-art" products.
Nth Solutions sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Pa. Case No. 21-10782) on March 26, 2021. In the
petition signed by Susan Springsteen, managing partner and member,
the Debtor disclosed total assets of up to $50,000 and total
liabilities of up to $10 million. Judge Eric L. Frank oversees the
case. Maschmeyer Karalis P.C. represents the Debtor as legal
counsel.
NTH SOLUTIONS: Wins Cash Collateral Access Thru July 11
-------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
has authorized Nth Solutions, LLC to use cash collateral through
July 11, 2021.
The Debtor is authorized to use cash collateral to pay all
reasonable and necessary expenses related to the operation of its
business, including all trust fund payroll and sales taxes in
accordance with the Budget.
The Debtor's use of Cash Collateral may be extended for an
additional four weeks upon filing with the Court an Amended Budget
which has been approved by the Debtor and its lender, Bryn Mawr
Trust.
As adequate protection, the Lender is granted valid, binding,
enforceable and perfected post-petition replacement liens on the
Debtor's assets, but limited to only those types and descriptions
of collateral in which the Lender holds a pre-petition lien or
security interest -- and only to the extent of the pre-petition
perfection and priority of the asserted pre-petition lien. The
Replacement Liens will have the same priority and validity as the
Lender's pre-petition security interests and liens.
A further hearing to consider the Debtor's use of Cash Collateral
is scheduled for July 7 at 11 a.m. in Philadelphia.
A copy of the order and the Debtor's budget is available for free
at https://bit.ly/3vc9j2A from PacerMonitor.com.
The Debtor projects total expenses of $92,331 for the period from
June 12 to July 11, 2021.
About Nth Solutions
Nth Solutions, LLC -- https://nth-solutions.com/ -- operates a
facility located at 15 East Uwchlan Avenue in Exton, Pa., where it
manufactures electronic and mechanical precision devices. In
addition to its own product line, Nth Solutions also works with its
clients using a proprietary market-driven methodology in order to
produce additional "state-of-the-art" products.
Nth Solutions sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Pa. Case No. 21-10782) on March 26, 2021. In the
petition signed by Susan Springsteen, managing partner and member,
the Debtor estimated less than $50,000 in assets and liabilities of
$1 million to $10 million.
Judge Eric L. Frank oversees the case.
Maschmeyer Karalis P.C. represents the Debtor as counsel.
NXT ENERGY: All Proposals Approved at Annual Meeting
----------------------------------------------------
NXT Energy Solutions Inc. held its Annual Meeting of Shareholders
at which the shareholders re-elected George Liszicasz, Charles
Selby, John Tilson, Thomas E. Valentine, Bruce G. Wilcox, and Frank
Ingriselli as directors to hold office until the next annual
meeting of shareholders or until their successors are duly elected
or appointed.
KPMG was reappointed as the auditor of the Company for the next
year at a remuneration to be determined by the Board of Directors.
About NXT Energy
NXT Energy Solutions Inc. is a Calgary-based technology company
whose proprietary SFD survey system utilizes quantum-scale sensors
to detect gravity field perturbations in an airborne survey method
which can be used both onshore and offshore to remotely identify
areas with exploration potential for traps and reservoirs. The SFD
survey system enables the Company's clients to focus their
hydrocarbon exploration decisions concerning land commitments, data
acquisition expenditures and prospect prioritization on areas with
the greatest potential. SFD is environmentally friendly and
unaffected by ground security issues or difficult terrain and is
the registered trademark of NXT Energy Solutions Inc. NXT Energy
Solutions Inc. provides its clients with an effective and reliable
method to reduce time, costs, and risks related to exploration.
NXT Energy reported a net loss and comprehensive loss of C$5.99
million for the year ended Dec. 31, 2020. As of Dec. 31, 2020, the
Company had C$24.01 million in total assets, C$3.26 million in
total liabilities, and C$20.75 million in shareholders' equity.
Calgary, Canada-based KPMG LLP, the Company's auditor since 2006,
issued a "going concern" qualification in its report dated March
30, 2021, citing that the Company's current and forecasted cash and
cash equivalents and short-term investments position is not
expected to be sufficient to meet its obligations that raises
substantial doubt about its ability to continue as a going concern.
ORBCOMM INC: S&P Assigns 'B' ICR on Leveraged Buyout
----------------------------------------------------
S&P Global Ratings assigned a 'B' issuer credit rating to San
Francisco-based GI Partners is acquiring asset tracking and
connectivity provider ORBCOMM Inc.
S&P said, "We have also assigned a 'B' issue-level rating and '3'
recovery rating to ORBCOMM's proposed $360 million first-lien term
loan and $50 million revolving credit facility.
"Our stable rating outlook on ORBCOMM reflects that we believe
adjusted leverage will be sustained below our 6x downgrade
threshold but private-equity ownership and longer-term competitive
threats limit ratings upside."
The rating reflects ORBCOMM's position as a small-scale provider of
internet of things (IoT) solutions that could be vulnerable to
increasing competition. ORBCOMM operates in a niche--but
growing--industry, targeting all transportation asset classes
(road, sea, rail, and intermodal) through IoT offerings. The
company's most notable competitive advantage is its ability to
design hardware that enables a comprehensive solution that includes
connectivity, device management, and applications while offering
lower prices to customers because of vertical integration.
S&P said, "While we believe there are notable switching costs
because it usually takes several quarters to outfit an entire
fleet, ORBCOMM lacks a fully global, owned, low-latency network
that allows real-time tracking of assets over the ocean. Unlike
competitors such as Iridium Communications Inc. that have
lower-latency networks with wider coverage zones, ORBCOMM's network
of satellites can have a delay of up to 15 minutes over the ocean
until it can reach a ground access point for communication. In
addition, long-term risks include large-scale telecommunications
providers, such as Verizon Communications Inc. through its Verizon
Connect subsidiary (formerly Fleetmatics), trying to monetize 5G
network build-outs by targeting IoT solutions. Currently, ORBCOMM
has 10 partnerships with wireless and satellite providers that
complement its owned satellite network to provide near-ubiquitous
coverage. We believe this exposes the company to renewal risk and
places it in a weak negotiating position if wireless partners shift
their strategies to gain more control over the customer
relationship in this growing market.
In addition, there are several low-earth orbit (LEO) constellations
launching over the next few years, such as SpaceX's Starlink and
Amazon Kuiper, among others. As the IoT industry grows, those new
entrants may be attracted to the market, either directly or through
a service partnership. While S&P believes that at first these new
entrants will be focused on higher-average revenue per user (ARPU)
products, like consumer broadband, because the cost of receivers
may initially be high compared with an ORBCOMM receiver, they could
eventually shift their focus as they search for other use cases as
the price of the hardware comes down. Not only is available
bandwidth expected to increase over the next few years following
the launch of the LEO constellations, but also due to the launch of
very-high throughput (geostationary) satellites (VHTS). As the
level of available bandwidth continues to increase, pricing
pressure could also attract new service providers to the IoT
space.
However, in the short-term, competition is tempered by high
switching costs and multiyear contracts, in which ORBCOMM is well
positioned within its niche market to capture greater demand within
the industrial IoT market.
S&P said, "We expect product revenue to rebound in 2021 due to
pent-up demand while service revenues will continue to be a stable
contributor to EBITDA.ORBCOMM generates most of its EBITDA from
high-margin service revenue, which is more stable than product
sales because contracts are predominately fixed at about three to
five years, with subscription revenue typically lasting for most of
the asset's useful life, in many cases up to 10 years. This is
demonstrated by the company's low annual churn of 7%. In our base
case, we expect total revenue to increase approximately 10% in
2021, driven by a significant rebound in product sales, as travel
begins to resume following the pandemic, and mid-single-digit
growth in service revenue as consumer consumption and demand for
non-refrigerated trucking and shipping grow. While we expect
product revenue to decline again in 2022 following rebounding
growth in 2021 from pent-up demand, EBITDA margin will likely
expand due to a favorable mix shift toward higher-margin service
revenue that we believe will approach 70% of the total over the
long term. Incorporating our base case assumptions, we expect the
company to end fiscal 2021 with S&P Global Ratings-adjusted debt to
EBITDA in the mid-5x area, improving to the low-5x area at the end
of 2022.
"We believe ORBCOMM's partnership with Inmarsat and satellite-lite
strategy will likely improve its free cash flow profile but will
also increase ORBCOMM's reliance on satellite providers for network
capacity.The company has renewed a key partnership with Inmarsat
for the use of L-band spectrum through 2035 and may not own any
satellites by 2028-2030 when its current fleet of satellites
reaches its end of life. As a result, ORBCOMM could be fully
reliant on third-party network providers such as Inmarsat or
terrestrial network providers like AT&T and Verizon for network
capacity, which will result in a higher dependency on favorable
lease terms. However, due to the substantial amount of excess
capacity likely becoming available through the launch of
high-throughput satellites from various satellite providers,
ORBCOMM may be able to take advantage of a declining pricing
environment, which we expect will persist for the next several
years.
"As a result of a high amount of excess capacity available, we view
the possibility that other competitors may be able to lease
capacity and compete in similar markets as increasing. That being
said, ORBCOMM has a significant early mover advantage on its third
generation L-band service offering with Inmarsat, as well as its
global scale and distribution network. ORBCOMM will also need to
rely on its hardware technology design capabilities and patents,
and established customer relations as its primary competitive
advantage. We believe these advantages may be difficult to sustain
if a scaled technology player or established wireless carrier
enters the market, which could be possible given our expectation
for explosive growth in IoT stemming from 5G and associated
technology innovation.
"While we think ORBCOMM is well positioned in the near term as a
lower-priced provider, we believe that its business faces
considerable long-term threats from potential new entrants and
evolving technology.
"While pro forma leverage will temporarily be elevated, we believe
adjusted leverage will quickly decline and be sustained below our
6x downgrade threshold.
"We could downgrade ORBCOMM if leverage stayed above 6x for a
sustained period. This could be a result of slowing subscriber
growth, declining ARPU, and lower product sales, leading EBITDA to
fall beyond our current expectations.
"While unlikely given the financial sponsor ownership, we could
upgrade the company if it sustained leverage below 4.5x.
Furthermore, EBITDA margin expansion would need to continue such
that we felt ORBCOMM's financial performance were sustainable."
OWENS-ILLINOIS GROUP: Egan-Jones Keeps B- Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Owens-Illinois Group Inc. EJR also maintained its
'B' rating on commercial paper issued by the Company.
Headquartered in Perrysburg, Ohio, Owens-Illinois Group Inc.
manufactures and sells glass containers.
PACIFIC LINKS: Gets OK to Hire KDL CPAs as Accountant
-----------------------------------------------------
Pacific Links U.S. Holdings, Inc. and its affiliates received
approval from the U.S. Bankruptcy Court for the District of Hawaii
to employ KDL CPAs, LLC as accountant.
The firm's services include:
a. preparing the Debtor's federal and state tax returns for the
years ended Dec. 31, 2019, and Dec. 31, 2020; and
b. preparing income tax returns for filing with the Internal
Revenue Service, state and local tax authorities.
The firm will be paid a flat fee of $17,000 upon completion of the
2020 income tax returns and reimbursed for out-of-pocket expenses
incurred.
As disclosed in court filings, KDL CPAs is a "disinterested person"
as the term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
KDL CPAs, LLC
745 Fort Street, Suite 1415
Honolulu, HI 96813
Tel: (808) 784-3757
Fax: (808) 784-3755
Email: alan@kdlcpa.com
About Pacific Links U.S. Holdings
Pacific Links US Holdings, Inc. is a golf club that offers global
reciprocal programs to members and participating clubs.
Pacific Links US Holdings 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, 2021, Judge Robert J. Faris authorized the jointly
administration of the cases.
At the time of filing, Pacific Links disclosed assets of between
$50,000 and $100,000 and liabilities of between $50 million and
$100 million.
Choi & Ito and KDL CPAs, LLC serve as the Debtors' legal counsel
and accountant, respectively.
PAYA HOLDINGS: S&P Assigns B Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to Paya
Holdings Inc., an Atlanta-based integrated payment services
provider. S&P also assigned its 'B+' issue-level rating and '2'
recovery rating to Paya Holdings III LLC's proposed first-lien debt
facilities.
S&P said, "The stable outlook reflects our expectation that over
the next 12 months Paya will benefit from good operating
performance, supported by growth in payment volume and new customer
wins. This should allow the company to improve its S&P Global
Ratings-adjusted debt to EBITDA to the mid-4x area in 2021 from the
5x area pro forma for the transaction as of March 31, 2021.
"Our 'B' issuer credit rating on Paya reflects its limited scale,
narrow end-market and geographic concentration compared to merchant
acquirers and payment processors peers (e.g., Chase, FIS, Paysafe),
which often benefit from superior scale advantages, end-to-end
capabilities, financial resources, and technical talent. Paya's
revenue, forecast at about $245 million in 2021, is modest.
Nevertheless, Paya's strengths stem from its unified payments
capabilities--processing of credit, debit, automated clearing house
(ACH), and checks--combined with its integrated software payments
platform, Paya Connect. That provides an attractive customer
acquisition model, high customer retention rates, healthy profit
margins, and solid cash flow conversion. Over the next 12 months,
we project annual revenue growth in the mid-teen percentages,
adjusted EBITDA margins in the low 20% area, adjusted leverage
above 4x as the company executes its mergers and acquisitions (M&A)
growth initiatives, and adjusted free operating cash flow (FOCF) to
debt above 5%. All our credit measures reflect S&P Global Ratings'
standard adjustments.
"The stable outlook reflects our expectation that over the next 12
months Paya will benefit from good operating performance, supported
by growth in payment volume and new customer wins. This should
allow the company to improve its S&P Global Ratings-adjusted debt
to EBITDA to the mid-4x area in 2021 from the 5x area pro forma for
the transaction as of March 31, 2021."
S&P could lower its ratings on Paya if:
-- Industry disruption, increased competition, or high customer
attrition significantly reduces EBITDA; or
-- The company pursues a significant debt-funded acquisition, such
that it sustains leverage above 7x.
Although unlikely over the next year, S&P could raise its ratings
on Paya if:
-- It significantly diversifies and expands its business scale;
and
-- It has strong operating performance while sustaining leverage
below 4x.
PENN NATIONAL: Egan-Jones Keeps CCC Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'CCC'
foreign currency and local currency senior unsecured ratings on
debt issued by Penn National Gaming, Inc. EJR also maintained its
'C' rating on commercial paper issued by the Company.
Headquartered in Wyomissing, Pennsylvania, Penn National Gaming,
Inc. owns and operates Charles Town Races in West Virginia which
features slot machines, casinos in Mississippi, and a riverboat
gaming facility in Louisiana.
PEPCOM INC: Seeks to Hire Furr and Cohen as Legal Counsel
---------------------------------------------------------
Pepcom, Inc. seeks approval from the U.S. Bankruptcy Court for the
Southern District of Florida to employ Furr and Cohen, P.A. to
serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. providing the Debtor with legal advice regarding its powers
and duties and the continued management of its business
operations;
b. advising the Debtor with respect to its responsibilities in
complying with the U.S. trustee's operating guidelines and
reporting requirements and with the rules of the court;
c. preparing legal documents;
d. protecting the interest of the Debtor in all matters pending
before the court; and
e. representing the Debtor in negotiations with creditors in the
preparation of a Chapter 11 plan.
The firm's hourly rates are as follows:
Attorneys $375 to $675
Paralegals $175
Furr and Cohen will also be reimbursed for out-of-pocket expenses
incurred.
Robert Furr, Esq., a partner at Furr and Cohen, 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:
Robert C. Furr, Esq.
Furr and Cohen, P.A.
2255 Glades Road, Suite 301E
Boca Raton, FL 33431
Tel: (561) 395-0500
Fax: (561) 338-7532
Email: agoldstein@furrcohen.com
About Pepcom Inc.
Pepcom, Inc., a media showcase events company based in Delray
Beach, Fla., sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D. Fla. Case No. 21-15475) on June 2, 2021.
Christopher O'Malley, president of Pepcom, signed the petition. In
the petition, the Debtor disclosed total assets of $729,018 and
total liabilities of $2,443,473. Judge Mindy A. Mora oversees the
case. Furr and Cohen, P.A. is the Debtor's legal counsel.
PHILADELPHIA SCHOOL: Business Revenue to Fund Plan Payments
-----------------------------------------------------------
Philadelphia School of Massage and Bodywork, Inc. filed with the
U.S. Bankruptcy Court for the Eastern District of Pennsylvania a
Disclosure Statement in connection with the Plan of Reorganization
on June 10, 2021.
This is a reorganization plan. The Proponent seeks to accomplish
payments under the Plan by (i) collecting revenue from various
lines of business that were shuttered due to the Pandemic; (ii)
using the collected revenue to pay for the expenses of the on-going
operations of the Debtor together with the Debtor's reorganization
expenses; (iii) seek compromise amounts with creditors holding
unsecured claims; and (iv) eliminate any unsecured debt that is not
satisfied out of the monies available for debt reduction on or
before December 31, 2022.
Class 1 consists of the unsecured claims of Bank of America,
Capital One, Catharine Sells, Chase Bank, PNC Bank. This class is
impaired. Debtor proposes to pay these claimants their pro-rata
share of the overall Allowed Claims over the course of the Plan
based upon monies set aside to satisfy pre-bankruptcy debt on a
monthly basis. Debtor proposes to eliminate any pre-bankruptcy debt
that is not paid on or before December 31, 2022.
Class 2 consists of the unsecured claims of the Ellington
Condominium Association. The Ellington's claim is fully unsecured
as Debtor owns no real estate. In advance of Plan Confirmation,
Debtor will attempt to resolve the dispute with the commercial
landlord pursuant to Bank. R. Proc. 9019. Debtor's inability to use
the leased spaces was solely attributable to Mayor Kenney's March
17, 2020 Mandatory Non-Essential Business Closure Order, (ii)
Governor Wolf's March 19, 2020 Mandatory Non-Essential Business
Closure Order and (iii) the March 23, 2020 Mandatory Stay at Home
Order. Debtor will seek a compromise of the claim pursuant to the
legal doctrines of impossibility of performance and the doctrine of
impracticability.
Class 3 consists of the contested/disputed claim of WZ Group, LLC.
Class 3 is impaired under the Plan, and thus is entitled to vote,
on the plan. In advance of Plan Confirmation, Debtor will attempt
to resolve the dispute with the commercial landlord pursuant to
Bank. R. Proc. 9019. Debtor's inability to use the leased spaces
was solely attributable to Mayor Kenney's March 17, 2020 Mandatory
Non-Essential Business Closure Order, (ii) Governor Wolf's March
19, 2020 Mandatory Non-Essential Business Closure Order and (iii)
the March 23, 2020 Mandatory Stay at Home Order. Debtor will seek a
compromise of the claim pursuant to the legal doctrines of
impossibility of performance and the doctrine of impracticability.
Debtor's Schedule lists $171,210 in unsecured debt. The Plan shall
be funded by the receipt of tuition income and income from various
ancillary service business lines that supplement Debtor's overall
income. The Debtor proposes to use 25% of the profit attributable
to Tuition Income to pay down pre-bankruptcy debt. The Debtor
further proposes to use 75% of the profit attributable to Ancillary
Services Income to pay down pre-bankruptcy debt. The remaining
profit will be held in reserve to use for emergencies.
Debtor arrived at the percentages by looking at its various
business lines. Debtor anticipates a steady growth in student
enrollment and in the ancillary business lines as the restrictions
from the COVID 19 Pandemic are lifted. To date, Debtor has seen an
increase in revenue as the country emerges from the shutdowns in
2020 that crippled its business.
Under the Proposed Plan and projections, Debtor estimates that it
will generate approximately $84,110 in profits through December
2022 that can be used to pay pre-bankruptcy expenses. The number
represents an approximate 48% repayment of the total debt owed per
creditor.
A full-text copy of the Disclosure Statement dated June 10, 2021,
is available at https://bit.ly/3cUaTjp from PacerMonitor.com at no
charge.
Debtor's counsel:
Mark S. Danek, Esq.
Danek Law Firm, LLC
350 Sentry Parkway East
Building 630, Suite 110-A
Blue Bell, PA 19422
Telephone: (484) 344-5429
Facsimile: (484) 766-8970
E-mail: hello@daneklawfirm.info
About Philadelphia School of Massage and Bodywork
Philadelphia School of Massage and Bodywork, Inc., opened its doors
on May of 2015. Its mission is to provide experience-based,
quality education and training in massage therapy and bodywork.
The Debtor filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Pa. Case no. 20-13642) on Sept.
10, 2020. Judge Eric L. Frank oversees the case. Danek Law Firm,
LLC serves as the Debtor's legal counsel.
POINT BLANK: Court Enters Final Decree, Extends Plan Trust's Term
-----------------------------------------------------------------
In the Chapter 11 cases of SS Body Armor I, Inc., f/k/a Point Blank
Solutions, Inc., Bankruptcy Judge Christopher S. Sontchi noted that
the Recovery Trustee and Post-Confirmation Debtor as estate
fiduciaries are on the verge of resolving this decade-old case and,
accordingly, granted:
-- The Trustee's Motion to Extend Term of the Recovery Trust.
-- The Trustee's Motion for Orders (I) Approving Settlements
with Class Plaintiffs and Carter Ledyard & Milburn LLP; (II)
Authorizing Dissolution Protocol; (III) Entering Final Decree; and
(IV) Granting Related Relief on February 24, 2021.
The Extension Motion retroactively extends the term of the Trust.
The Closure Motion allows the Estate Fiduciaries to take the final
steps necessary to close the cases.
The Court denied the request of Jon Jacks, an equity interest
holder appearing pro se, to remove the Estate Fiduciaries.
Jacks requests the Court deny the Extension Motion because: (i) the
Trust expired on November 23, 2018; (ii) the Extension Motion is an
artful attempt to unlawfully modify the Plan; (iii) the Court is
prohibited from granting the requested nunc pro tunc relief under
the Supreme Court's decision in Roman Catholic Archdiocese of San
Juan, Puerto Rico v. Acevedo Feliciano, 140 S.Ct. 696, 700-01
(2020); and (iv) the Internal Revenue Service has exclusive
jurisdiction over whether to extend the term of the Trust as the
Trustee failed to obtain an IRS Rev. Pro. 94-4526 advance letter
ruling.
The Bankruptcy Court rejects Jacks' argument that the IRS has
exclusive jurisdiction over the Extension Motion because the
Bankruptcy Court explicitly retained original jurisdiction over
Plan-related tax issues. Furthermore, IRS Rev. Pro. 94-45 governs
only the issuance of an advance letter ruling -- and does not
represent the IRS's substantive finding on whether the Trust
qualifies as a tax advantaged liquidating trust under the Internal
Revenue Code -- as failure to comply with it does not give rise to
an action before the IRS, but rather serves to disqualify an entity
from receiving the comfort of an advance letter ruling from the
IRS.
To close the case, the Trustee asked the Court to resolve the two
issues pending before it by: (i) approving the Proposed Settlements
including the bar order, and (ii) authorizing the protocols
necessary to dissolve the Recovery Trust and the Post-Confirmation
Debtor. Jacks argues the Court should not approve the Stipulated
Settlement because it fails to allocate a $4.7 million shortfall to
the Trust. This failure, Jacks asserts, constitutes the breach of
the Trustee's fiduciary duty to the beneficiaries of the Recovery
Trust Agreement, pursuant to the terms of the Plan. Jacks contends
the Trustee lied to the Court regarding the Shortfall and entered
the Stipulated Settlement to avoid liability for his actions. Thus,
Jacks argues, the Trustee was not eligible to enter the Stipulated
Settlement.
"The evidence Jacks offers to support his argument is unpersuasive.
Jacks relies on public statements and documents to conclude that
the Trustee conspired to hide the Shortfall from this Court. The
Court disagrees. The Trustee told this Court at a hearing and in
publicly filed documents that he was discussing the possibility of
additional true-up payments with Class Plaintiffs. Finally, the
Trustee accurately interpreted this Court's April 15, 2020 opinion
and order to mean that the Debtor held no 'reversionary interest'
if Class Plaintiffs' failed to make a 100% recovery," the Court
said.
Following the Bankruptcy Court's April Decision, the
Post-Confirmation Debtor, Trustee, Class Plaintiffs and related
parties filed competing motions in the United States District Court
for the Eastern District of New York on several issues, including:
(i) how to allocate a DOJ Settlement funds; (ii) the extent, if
any, of the Post-Confirmation Debtor's reversionary interest in the
DOJ Settlement funds; and (iii) whether the Class Plaintiffs owed
the Post-Confirmation Debtor an additional true-up payment of
$4.773 million -- Shortfall. After fully briefing the EDNY issues,
the parties voluntarily entered into mediation with former Judge
Kevin Gross (ret.). The mediation resulted in two settlement
agreements: the Stipulated Settlement and the Settlement with
Carter Ledyard & Millburn LLP.
The disputes resolved by the Proposed Settlements have been subject
to lengthy and costly litigation before this Court, the EDNY
District Court, and related appellate courts. The Proposed
Settlements provide the following (in general terms):
a. CLM will receive $3,750,000, for its claim;
b. The Debtor will waive litigation against the Class
Plaintiffs' $4.7 million Shortfall in exchange for Class
Plaintiffs' $750,000 cash payment and $517,500 release of equity
entitlement;
c. Mutual releases between the Settlement Parties and their
representatives; and
d. Lawsuits related to the settlements and related court
orders will be barred.
A copy of the Court's June 7, 2021 Opinion is available at:
https://www.leagle.com/decision/inbco20210608616
About Point Blank
Headquartered in Pompano Beach, Florida, Point Blank Solutions,
Inc. -- http://www.pointblanksolutionsinc.com/-- designed and
produced body armor systems for the U.S. Military, Government and
law enforcement agencies, as well as select international markets.
The Company maintained facilities in Pompano Beach, Florida, and
Jacksboro, Tennessee.
Point Blank Solutions, formerly DHB Industries, filed for Chapter
11 protection (Bankr. D. Del. Case No. 10-11255) on April 14,
2010.
The Company's former chief executive officer and chief operating
officer were convicted in September 2010 of orchestrating a $185
million fraud.
Pachulski Stang Ziehl & Jones LLP, served as bankruptcy counsel to
the Debtor. Olshan Grundman Frome Rosenweig & Wolosky LLP served
as corporate counsel. Epiq Bankruptcy Solutions served as claims
and notice agent.
The U.S. Trustee appointed an Official Committee of Unsecured
Creditors and a separate Official Committee of Equity Security
Holders in the case. Bifferato LLC; and Baker & McKenzie LLP,
served as counsel for the Official Committee of Equity Security
Holders. Arent Fox LLP, served as counsel to the Creditors
Committee, and Rosner Law Group LLC, served as co-counsel.
In October 2011, the Debtors sold substantially all assets to Point
Blank Enterprises, Inc. The lead debtor changed its name to SS
Body Armor I, Inc., following the sale.
On Nov. 10, 2015, the Bankruptcy Court entered an Order Confirming
the Second Amended Joint Chapter 11 Plan of Liquidation Proposed by
the Debtors and Official Committee of Unsecured Creditors. The
Plan became effective 13 days later.
Jackson D. Toof, Esq., and Justin A. Kesselman, Esq., at Arent Fox,
serve as counse to the Recovery Trust.
POST HOLDINGS: Egan-Jones Keeps B Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Post Holdings, Inc.
Headquartered in Brentwood, Missouri, Post Holdings, Inc. operates
as a holding company.
PRAIRIE SEEDS ACADEMY: S&P Affirms 'BB-' Rating on Revenue Debt
---------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from negative and
affirmed its 'BB-' rating on Brooklyn Park, Minn.'s revenue debt,
issued for Prairie Seeds Academy.
"The outlook revision to stable reflects our opinion of the
school's improved financial operations in fiscal 2021 and fiscal
2022, due to cost savings resulting from termination of its
management consultant contract and improvement in total revenues
derived from increased student enrollment and per-pupil funding,"
said S&P Global Ratings credit analyst Natalie Fakelmann. It also
reflects supplemental pandemic relief and Payment Protection Plan
(PPP) funds which have been forgiven, as well as Coronavirus Aid,
Relief, and Economic Security (CARES) Act funding, which can
provide cushion to general fund operations.
S&P said, "In our view, the school is subject to elevated
governance due to the probationary nature of its three-year charter
renewal. The charter-school sector is facing elevated social health
and safety risks as a result of the effects of COVID-19-related
social distancing on state tax revenue and per-pupil
appropriations, which is the main charter school funding source.
Despite the elevated social and governance risks, we believe the
school's environmental risk is in line with the sector as a whole.
"We could consider a lower rating if the school reverts to
substantial negative full-accrual operations, experiences any
additional debt service coverage violations, or if academic issues
are not sufficiently addressed such that it results in any further
action from the authorizer or a successful charter renewal is not
realized. Additionally, we would view any material weakening in the
school's healthy liquidity position as a negative rating factor."
Should the school realize healthy and consistent full-accrual
operating margins and higher maximum annual debt service coverage
over a trend, while maintaining its liquidity position, resolving
its academic issues, and receiving a successful full-term charter
renewal, S&P could consider a higher rating.
QUEST PATENT: MaloneBailey Resigns as Auditor
---------------------------------------------
MaloneBailey, LLP resigned as Quest Patent Research Corporation's
independent registered public accounting firm effective June 7,
2021.
MaloneBailey issued an auditor's report for the years ended Dec.
31, 2020 and 2019, which report did not contain any adverse opinion
or disclaimer of opinion, and was not qualified or modified as to
uncertainty, audit scope, or accounting principles, except that the
report contained an explanatory paragraph indicating that there was
substantial doubt as to the Company's ability to continue as a
going concern.
During the Company's two most recent fiscal years and any
subsequent interim period through the date of such resignation,
there were no disagreements with MaloneBailey on any matter of
accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of MaloneBailey would have caused them
to make reference thereto in connection with their report on the
financial statements for the years ended Dec. 31, 2020 and 2019.
Further, during such period, there were no reportable events of the
type described in Item 304(a)(1)(v) of Regulation S-K, except for
the material weaknesses described in Item 9A of the Company's
Annual Report on Form 10-K for the year ended Dec. 31, 2020.
About Quest Patent
Rye, New York-based Quest Patent Research Corporation --
http://www.qprc.com-- is an intellectual property asset management
company. The Company's principal operations include the
development, acquisition, licensing and enforcement of intellectual
property rights that are either owned or controlled by the Company
or one of its wholly owned subsidiaries. The Company currently
owns, controls or manages eleven intellectual property portfolios,
which principally consist of patent rights.
Quest Patent reported a net loss of $1.31 million for the year
ended Dec. 31, 2020, compared to a net loss of $1.30 million for
the year ended Dec. 31, 2019. As of March 31, 2021, the Company
had $2.95 million in total assets, $12.28 million in total
liabilities, and a total stockholders' deficit of $9.33 million.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2013, issued a "going concern" qualification in its report dated
April 15, 2021, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
RALPH LAUREN: Egan-Jones Keeps BB Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Ralph Lauren Corporation.
Headquartered in New York, New York, Ralph Lauren Corporation
designs, markets, and distributes men's, women's and children's
apparel, accessories, fragrances, and home furnishings.
RAMBUS INCORPORATED: Egan-Jones Keeps CCC- Sr. Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'CCC-'
foreign currency and local currency senior unsecured ratings on
debt issued by Rambus Incorporated. EJR also maintained its 'C'
rating on commercial paper issued by the Company.
Headquartered in Sunnyvale, California, Rambus Incorporated
designs, develops, licenses, and markets high-speed chip-to-chip
interface technology to enhance the performance and
cost-effectiveness of consumer electronics, computer systems, and
other electronic products.
RAPTOR ACQUISTION: S&P Assigns 'B' ICR, Outlook Stable
------------------------------------------------------
On June 7, 2021, S&P Global Ratings assigned its 'B' issuer credit
rating to Ontario-based regional casino gaming operator Raptor
Acquisition Corp. (also known as Great Canadian Gaming Corp.
[GCGC]). At the same time, S&P Global Ratings assigned its 'B+'
issue-level rating and '2' recovery rating to GCGC's proposed
revolving credit facility, secured term loan B, and senior secured
notes (in aggregate US$1.28 billion). The '2' recovery rating
reflects its expectation for meaningful (70%-90%; rounded estimate:
85%) recovery in the event of default.
S&P said, "The stable outlook reflects our expectation that,
despite the uncertainty about the pandemic, GCGC will show
significant EBITDA improvement once provincial restrictions are
lifted and new properties come online as the company continues
investing in its Ontario properties. Our stable outlook also
incorporates the company's financial flexibility, which is
supported by the new revolving facility and financial sponsors'
commitment to fund six months' interest expense in the absence of
delayed cash flows.
"We forecast GCGC's leverage will remain above 7x through 2022 but
improve to 5x in 2023. The ratings reflect GCGC's high debt burden
resulting from the debt-financed transaction that will place about
C$1.7 billion of debt on the company's balance sheet. Including the
impact of the pandemic on GCGC's operations, we expect leverage to
be above 10x through fiscal 2021. However, as properties become
operational and customer mobility increases, we forecast 2022
EBITDA will reach 2019 levels and leverage will improve but remain
elevated in the 7.0x-7.5x range in 2022. The 2022 EBITDA growth is
based on our expectation that both Ontario and British Columbia
(B.C.) will start allowing casinos to operate by the second half of
2021 as vaccinations roll out. Included in our 2022 EBITDA
assumption are full-year results of the new Pickering property,
which is expected to open in the second half of 2021, and
partial-year results of Woodbine's expanded operations, which is
expected to start in late 2022."
Development capital expenditure in the GTA bundle will keep free
operating cash flow negative through 2022. GCGC has continued with
its hefty development capital expenditure (capex) plan in Ontario,
even through the pandemic. Since acquiring their two largest
Ontario gaming bundles in 2018, GCGC has undertaken significant
development on multiple Ontario gaming facilities, incurring
capital costs of about C$900 million, including C$300 million in
2020, to complete several upgrades and enhancements as well as
introduce new food and beverage offerings to complement gaming and
improve guest experience. To drive revenue growth at its Greater
Toronto Area (GTA) bundle properties, in 2021-2022 GCGC plans to
spend an additional C$800 million on its Pickering and Woodbine
properties, which should start operating in the latter half of 2021
and 2022, respectively. S&P Said, "We forecast negative free cash
flow through 2022, reflecting the large capex plans, which in turn
could pressure the company's financial flexibility if there is
reduced efficacy of existing vaccinations to new coronavirus
variants. However, we believe GCGC would have sufficient liquidity
to manage its operations due to full availability under its new
C$250 million revolving capacity and the credit facility associated
with the GTA bundle." The financial sponsor's commitment to cover
six months of interest through equity (interest reserve through an
equity commitment letter) also adds financial flexibility during
the period of uncertainty.
Post-pandemic, topline growth depends on normalizing conditions and
growth opportunities. Since March 2020, B.C. gaming properties have
been closed while Ontario properties have been operating
intermittently in response to government regulations. As the
provincial restrictions lift in response to increased vaccination
rates, S&P believes GCGC could benefit from pent-up demand, as
evidenced by operations in U.S. regional markets and, in GCGC's
case, when Ontario properties were operational intermittently.
Moreover, the regional gaming markets in which GCGC operates are
expected to recover faster than larger destination markets because
most customers drive to these properties instead of flying, which
reduces the cost of the trip and potentially alleviates any
lingering fears around travel.
A significant portion of GCGC's growth is expected to come from the
GTA bundle in which the company plans to spend about C$800 million
in 2021-2022. Not only will there be significant nongaming
facilities (including hotels, spas, dining options) but the company
expects to increase slots by 50% and more than quadruple tables
from levels prior to the opening of Pickering and completion of
Woodbine development. The Pickering casino is expected to become
operational in the second half of 2021 while the Woodbine assets
will come online in late 2022. As a result, in the absence of any
unforeseen delays, S&P expects GCGC's EBITDA to double in 2022 and
increase by at least 30% in 2023, leading to material deleveraging
from current levels.
The company's cost structure optimization and targeted promotions
could translate into stable margins. Pre-pandemic, GCGC had a high
EBITDA margin (S&P Global Ratings' adjusted) in the low-30% area,
reflecting the higher-margin B.C. assets combined with the
less-profitable Ontario assets, resulting from structural
differences like gaming tax arrangements and gaming mix. Through
the pandemic, the company rationalized its cost structure, which
included operations, labor and procurement, and the closure of
low-margin amenities. S&P said, "While we expect costs to rise as
occupancy levels increase and certain properties re-open, we
believe many savings are sustainable longer term. As a result, we
expect margins to return to similar levels."
To increase customer loyalty, new management plans to launch a
unified loyalty program. S&P expects the unified program would
increase customer visits and gaming spend because it would target
customers through a centralized database with consistent and
cohesive digital advertising. The combination of nongaming
initiatives (hotels, spas, dining options), along with a unified
loyalty program, would allow GCGC to accelerate topline growth and
get a higher return on its investment.
Good market position and asset quality are bolstered by supportive
regulatory regimes. GCGC generates most of its revenues and EBITDA
from the B.C. and Ontario gaming markets where the regulators
either limit additional gaming licenses or cap casinos within
certain zones. S&P said, "As a result, the regulatory environment
creates high barriers to entry for new entrants. GCGC caters to the
regional markets and, as the provincial and local travel
restrictions gradually lift, we believe GCGC would benefit from
pent-up demand as mobility increases, which will drive visitation.
Moreover, we expect the regional gaming markets to recover faster
than larger destination markets, as most of the customers reside
locally. In addition, GCGC has a good track record of maintaining
better asset quality across its gaming portfolio through
reinvestments in its casinos, which helps attract traffic and
maintain market share in spite of increasing competition. The
success of the B.C. assets where GCGC has been able to maintain
traffic and its market share in the Greater Vancouver Area despite
the addition of recently built new properties in the area, speaks
to both GCGC properties' availability of amenities and successful
reinvestment in properties. We expect that, with investments in the
previously under-invested Ontario properties, GCGC will
significantly enhance traffic and growth. Nevertheless,
concentration risk remains, with more than 90% of the company's
revenues derived from around two major urban areas (Vancouver and
Toronto); gaming revenues are about 85% of total revenues; and by
2023, four of the largest gaming properties will contribute about a
third of the company's EBITDA."
S&P said, "The stable outlook reflects our expectation that,
despite the uncertainty of COVID-19, GCGC will show significant
improvement in EBITDA once provincial restrictions are lifted and
new properties come online as the company continues its investment
in its Ontario properties. Our stable outlook incorporates the
company's financial flexibility, which is supported by the new
revolving facility and financial sponsors' commitment to fund six
months' interest expense should there be delays in lifting
restrictions pressuring cash flows."
S&P could lower its ratings if it expects GCGC's leverage will
remain over 8x through 2022. S&P believes the likely path for that
would be if:
-- The company significantly underperformed our base-case forecast
in the next two years due to reduced discretionary spending by
consumers;
-- There are extended provincial lockdown measures at casinos with
no adequate support to mitigate the financial impact; or
-- The company is unable to sustain cost improvements it made
while liquidity deteriorates against a backdrop of high capex.
While the likelihood of an upgrade over the next 12 months is low,
S&P could consider raising the rating if GCGC outperformed its
forecast or repaid its debt faster than expected, resulting in
leverage being sustained below 6.5x, and management commits to a
more conservative financial policy.
RESTLAND MEMORIAL: Seeks to Hire Teri Hayes as Accountant
---------------------------------------------------------
Restland Memorial Parks, Inc. seeks approval from the U.S.
Bankruptcy Court for the Western District of Pennsylvania to employ
Teri Hayes Small Business Solutions as accountant.
The firm's services include:
a. updating and correcting QuickBooks records;
b. assisting in maintaining financial records;
c. providing financial statements and documents; and
d. general accounting advice.
Teri Hayes will be paid at the rate of $75 per hour and a retainer
of $4,500. The firm will also receive reimbursement for
out-of-pocket expenses incurred.
As disclosed in court filings, Teri Hayes is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Teri Hayes
Teri Hayes Small Business Solutions
4520 Stanton Ave.
Pittsburgh, PA 15201
Tel: (412) 417-6101
About Restland Memorial Parks
Restland Memorial Parks, Inc., a Monroeville, Pa.-based company
that offers cemetery pre-need programs, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No.
21-21148) on May 7, 2021. At the time of the filing, the Debtor
disclosed total assets of up to $10 million and total liabilities
of up to $1 million. Judge Gregory L. Taddonio oversees the case.
The Debtor tapped Calaiaro Valencik as its legal counsel and Teri
Hayes Small Business Solutions as its accountant.
RITCHIE BROS: S&P Affirms 'BB+' ICR on Resilient Performance
------------------------------------------------------------
On June 7, 2021, S&P Global Ratings revised its outlook on Ritchie
Bros. Auctioneers Inc. (RBA) to stable from negative and affirmed
its 'BB+' issuer credit rating on the company.
The stable outlook primarily reflects S&P's expectation that the
company's credit measures will remain relatively stable through
2022, underpinned by steady revenue growth and relatively
consistent profitability.
RBA showed resilience to sharply weaker macroeconomic conditions in
2020, with operating results materially stronger than our previous
estimates. S&P said, "RBA's operating results and credit measures
in 2020 were much stronger than expected, and we now expect limited
downside risk to the rating over the next two years. Revenue
increased by almost 5%, led by improvement in gross transaction
value (GTV) and service revenue. In our view, this reflects RBA's
strong online auction presence, which expanded over the past year
and mitigated the pandemic-related disruption to the company's live
auctions. Used equipment pricing was favorable and a notable
contributor to stronger results amid tight industry supply over the
past year. In addition, RBA's EBITDA margins expanded in 2020,
which we attribute to reduced costs associated with servicing and
promoting live events, including lower travel expenses.
Higher-than-expected EBITDA translated into free operating cash
flow (FOCF) generation above our assumptions (by about $100
million), and contributed to leverage of 1.5x, which is strong for
the rating."
RBA's business will likely expand for the next two years, with
relatively stable credit measures. S&P said, "We believe the
continuing growth of RBA's online platform and its comparatively
favorable margin profile will provide a degree of stability to
earnings and cash flow. Over the next two years, we expect strong
macroeconomic conditions will facilitate continuing high demand for
capital equipment--particularly in 2021 as economies gradually
reopen and industry supply chain disruptions eventually ease. We
assume this will facilitate high single-digit growth in GTV, with
favorable pricing despite the potential for heightened competition.
We also expect EBITDA margins will remain generally stable over the
next few years, estimated in the low to mid-20% area. Therefore, we
assume RBA will maintain credit measures that are strong for the
rating, including leverage (adjusted for leases and net of cash) in
the mid-1x area and FOCF to debt of up to 40%."
Current tightness in equipment supply across the company's core
markets and the uneven recovery from pandemic-related disruptions
create a degree of uncertainty for near-term operating results. S&P
said, "In addition, we anticipate quarterly fluctuations, as well
as increased costs associated with the return to live auctions.
However, we believe RBA's full transition to an online business
model, and larger scale of operations compared with those of peers,
provide a competitive advantage that lends support to our
estimates."
S&P said, "We believe the company will continue to allocate a large
share of its estimated free cash flow toward shareholder returns as
well as bolt-on acquisitions. RBA has a good track record of
integrating acquisitions (including Iron Planet in 2017 and Rouse
in 2020), and we assume future investments are likely (although not
assumed in our forecasts), given the highly fragmented nature of
the industry. Therefore, we do not expect leverage will decline and
remain below 1.5x on a sustained basis, in the absence of a
definitive change in the company's financial policies.
"Our ratings continue to reflect RBA's favorable competitive
position. RBA is the largest industrial auctioneer in the world,
with well-recognized brands across multiple platforms and
geographies. Our ratings on the company also incorporate our view
of RBA's No. 1 position, with a multichannel strategy and adequate
geographic diversity that reduces earnings volatility. We expect
the company will generate favorable return on capital (about 20% on
an S&P Global Ratings' adjusted basis) and believe RBA has some
earnings diversity with customers across multiple industries and
geographies, which adds a degree of stability.
"That said, RBA operates in the highly fragmented and competitive
used equipment resale market. In our view, the auction business is
characterized by relatively low barriers to entry, is of limited
scale when compared with that of higher-rated global capital goods
companies, and has significant exposure to sectors with cyclical
demand for equipment such as construction and oil and gas, which
could contribute to earnings volatility.
"The stable outlook primarily reflects our expectation credit
measures will remain relatively stable over the next couple of
years, underpinned by steady revenue growth and relatively stable
adjusted EBITDA margins. Our base-case scenario assumes leverage
will remain in the mid-1x area, with positive free cash flow
generation available to fund shareholder returns and potential
acquisitions without weakening the balance sheet.
"We could lower the ICR on RBA within the next 12 months if credit
measures materially deteriorate, including adjusted leverage that
approaches 2.5x. This could occur if the company incurs
higher-than-expected operating costs or experiences sharply weaker
demand, resulting in a material decline in revenue and cash flow.
This could also occur if we expect RBA to fund share buybacks or
material acquisitions with debt.
"We could raise the ICR over the next 24 months if we expect the
company to demonstrate a commitment to achieving adjusted leverage
below 1.5x, supported by a more conservative financial policy,
while maintaining stable profitability in line with 2020 levels."
SAFEPOINT INSURANCE: A.M. Best Reviews B-(F) Fin. Strength Rating
-----------------------------------------------------------------
AM Best has placed under review with negative implications the
Financial Strength Rating of B- (Fair) and the Long-Term Issuer
Credit Rating of "bb-" (Fair) of Safepoint Insurance Company
(Temple Terrace, FL).
The under review with negative implications status for Safepoint
reflects its near-term capital management plan for its holding
company, Safepoint Holdings, Inc. The unfavorable pressure from the
holding company, as it relates to the insurance company's overall
balance sheet strength, has increased due to equity erosion and
outstanding debt, which exceeds AM Best's threshold for what is
considered a neutral level of financial leverage.
Safepoint's capital management plan calls for an improved financial
position for Safepoint Holdings, Inc., which is expected to
alleviate the aforementioned pressure. Should these plans not
materialize within the expected timeline, negative rating action
may follow. The ratings will remain under review until management
finalizes and executes this plan and AM Best evaluates the impact
on the overall organization.
SAGE ECOENTERPRISES: Wins Cash Collateral Access on Final Basis
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina, Asheville Division, has authorized Sage EcoEnterprises,
LLC to use cash collateral on a final basis in accordance with the
budget.
Pursuant to the Court order, the Debtor is authorized to use cash
collateral in the ordinary course of business for the expenses
specified in the budget, with a 10% variance.
As adequate protection for Truist Bank's interest in the cash
collateral, to the extent the Debtor uses the cash collateral, the
Lender is granted valid, attached, choate, enforceable, perfected
and continuing security interests in, and liens upon all
post-petition assets of the Debtor of the same character and type,
to the same extent and validity as the liens and encumbrances of
the Lender's attached to the Debtor's assets pre-petition. The
Lender's security interests in, and liens upon, the PostPetition
Collateral will have the same validity as existed between the
Lender, the Debtor, and all other creditors or claimants against
the Debtor's estate on the Petition Date.
The Debtor will make an adequate protection payment to Truist on or
before June 15, 2021, and continuing on the fifteenth day of each
successive month thereafter pending further Court order, in the
amount of $1,900.
A copy of the order and the Debtor's budget is available for free
at https://bit.ly/3cAA2iT from PacerMonitor.com.
The budget provided for $251,186 in sales and $247,177 in total
expenses for the period between June 18 through July 15, 2021.
About Sage EcoEnterprises
Sage EcoEnterprises, LLC, d/b/a Green Sage Cafe, is a privately
held company that owns and operates restaurants.
Sage EcoEnterprises filed a Chapter 11 petition with the United
States Bankruptcy Court Western District of North Carolina (Bankr.
W.D.N.C. Case No. 21-10072) on April 20, 2021.
In the petition signed by James R. Talley, member manager, the
Debtor reported $1,155,799 in total assets and $1,550,628 in total
liabilities.
Judge George R. Hodges oversees the case.
Richard S. Wright, Esq., at MOON WRIGHT & HOUSTON, PLLC is the
Debtor's counsel.
SALT BUSH: Obtains CCAA Initial Stay Order
------------------------------------------
Justice K.M. Eidsvik of the Court of Queen's Bench of Alberta in
Bankruptcy and Insolvency entered an initial order granting Salt
Bush Energy Ltd. and 2345141 Alberta Ltd. protection under the
Companies' Creditors Arrangement Act as amended, and appointed
Deloitte Restructuring Inc. as monitor of the Debtors.
The proposal proceedings commenced by the Debtors under Division I
of the Bankruptcy and Insolvency act, as amended, on Jan. 13, 2021,
Court File Number 25-2703459 ("NOI Proceedings") are hereby taken
up and continue under the CCAA and the NOI proceedings will have no
further force or effect.
Information related to the NOI proceedings is available at
https://www.insolvencies.deloitte.ca/en-ca/pages/Salt-Bush-Energy-Ltd.aspx
under the link entitled "Salt Bush Energy Ltd.
The monitor can be reached at:
Deloitte Restructuring Inc.
700, 850 - 2 Street S.W.
Calgary, Alberta T2P 0R8
Tel: 403-298-5955
Fax: 403-718-3681
Naomi McGregor
Tel: 1-403-503-1423
Email: naommcgregor@deloitte.ca
Robert J. Taylor
Email: bobtaylor@deloitte.ca
Counsel to Monitor:
Dentons Canada LLP
15th Floor, Bankers Court
850 - 2nd Street SW
Calgary, Ab T2P 0R8
Sam Gabor
Email: sam.gabor@dentons.com
David Mann
Email: david.mann@dentons.com
Counsel for the Debtors:
McCarthy Tetrault LLP
Suite 4000, 421 - 7 Avenue S.W.
Calgary, AB T2P 4K9
Tel: 403-260-3531 / 3534
Fax: 403-260-3501
Sean Collins
Email: scollins@mccarthy.ca
Nathan Stewart
Email: nstewart@mccarthy.ca
Salt Bush Energy Ltd. --
https://www.whitebarkenergy.com/investor/canada/ -- is a small
Canadian resource company engaged in the production and development
of oil and natural gas assets primarily located in the Wizard Lake
Oilfield in the province of Alberta, approximately 50 kilometers
southwest of Edmonton, Alberta.
SAN ISABEL TELECOM: Seeks to Hire Hoff Law Offices as Legal Counsel
-------------------------------------------------------------------
San Isabel Telecom seeks approval from the U.S. Bankruptcy Court
for the District of Colorado to employ Hoff Law Offices, P.C. to
serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. providing the Debtor with legal advice with respect to its
powers and duties;
b. preparing legal papers;
c. assisting the Debtor in the preparation and confirmation of a
Chapter 11 disclosure statement and plan, if appropriate; and
d. other necessary legal services.
Hoff Law Offices will be paid at the rate of $400 per hour for
attorneys and $125 per hour for paralegals. The firm will also be
reimbursed for out-of-pocket expenses incurred.
The retainer fee is $24,000.
Jessica Hoff, Esq., a partner at Hoff Law Offices, disclosed in a
court filing that her firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Jessica L. Hoff, Esq.
Hoff Law Offices, P.C.
6400 S Fiddlers Green Cir #250
Greenwood Village, CO 80111
Tel: (720) 739-3599
Email: jhoff@hofflawoffices.com
About San Isabel Telecom
Denver-based San Isabel Telecom sought protection under Chapter 11
of the Bankruptcy Code (Bankr. D. Colo. Case No. 21-12534) on May
12, 2021. San Isabel Telecom President Jawaid Bazyar signed the
petition. In the petition, the Debtor disclosed total assets of
$2,263,776 and total of liabilities of $1,598,956. Judge Kimberley
H. Tyson oversees the case. The Debtor is represented by Hoff Law
Offices, P.C.
SEALED AIR: Egan-Jones Keeps BB- Senior Unsecured Ratings
---------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Sealed Air Corporation.
Headquartered in Charlotte, North Carolina, Sealed Air Corporation
manufactures packaging and performance-based materials and
equipment systems that serve food, industrial, medical, and
consumer applications.
SERVICE CORPORATION: Egan-Jones Keeps BB+ Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Service Corporation International.
Headquartered in Houston, Texas, Service Corporation International
provides death care services worldwide.
SHARE ENERGY: Seeks Cash Collateral Access
------------------------------------------
Share Energy Group, LLC asks the U.S. Bankruptcy Court for the
Southern District of Texas, Houston Division, for authority to use
cash collateral to pay its necessary expenses of its business in
the ordinary course and to grant replacement liens and other rights
to the Cash Collateral Secured Creditors as adequate protection for
the use of the Cash Collateral, if necessary.
The Debtor's lenders which might have an interest in cash
collateral are Frost Bank, U.S. Small Business Administration, and
PlainsCapital Bank. The Cash Collateral Secured Creditors may have
liens and security interests on various assets of the Debtor,
including accounts, accounts receivable, inventory and other types
of collateral that might constitute cash collateral.
The Debtor will grant the Cash Collateral Secured Creditors liens
on post-petition accounts in the same order and priority as existed
prior to the bankruptcy filing so that the Cash Collateral Secured
Creditors have the same liens or security interests in accounts and
inventory as existed prior to the filing of the case.
The Debtor requests preliminary and interim authorization to use
cash collateral as set forth in the interim budget attached until a
final order granting further use of cash collateral can be entered.
The Debtor needs the funds to operate. The Debtor's inability to
timely pay the costs and expenses set forth herein will result in
harm to the estate.
The Debtor's interim budget itemizes the uses of cash by budgetary
category and includes a list of business expenses that are
reasonable and necessary and that must be paid until such time as a
final hearing on the Motion can be held. The Debtor proposes that
any amounts listed in the interim budget that are unused in any
week may be carried over and used by the Debtor in any subsequent
week, as needed.
The Debtor proposes to adequately protect the interests of the
Secured Creditors in the collateral in a number of ways. The Debtor
proposes to grant to Secured Creditors post-petition replacement
liens in the same assets of the Debtor that such entity had prior
to the filing of the chapter 11 bankruptcy case.
In addition, the Debtor will provide the Cash Collateral Secured
Creditors with information relating to projected revenues and
expenses, actual revenue and expenses, and variances from the
interim budget.
A copy of the motion is available for free at
https://bit.ly/2U2sgry from PacerMonitor.com.
About Share Energy Group, LLC
Share Energy Group, LLC owns and operates scrap tire recycling
facility at 3811 Fuqua Street in Houston. The plant is the only
facility in Texas with the recycling process and only one of three
in the United States. The Debtor sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-31764) on
May 28, 2011. In the petition signed by Omar Pimentel, president,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Marvin Isgur oversees the case.
Reese W. Baker, Esq. at Baker & Associates is the Debtor's
counsel.
SIGNIFY HEALTH: Moody's Hikes CFR to B1 & Rates First Lien Debt B1
------------------------------------------------------------------
Moody's Investors Service upgraded Signify Health, LLC's corporate
family rating to B1, from B2, and its probability of default rating
to B1-PD, from B2-PD. Moody's is maintaining Signify's
speculative-grade liquidity rating of SGL-1, reflecting its
continued very good liquidity. Moody's also assigned B1 instrument
ratings to the health risk assessment ("HRA") and
episodes-of-care-services provider's new first-lien debt, which
includes a $185 million revolving credit facility and a $350
million term loan. Proceeds from the new term loan and balance
sheet cash will be used to repay the $411 million balance on
Signify's existing first-lien loan, and to satisfy transaction
expenses. Upon closing of the proposed transaction and repayment of
debt (which will include the termination of an $80 million
revolver), Moody's will withdraw Signify's existing (B2) instrument
ratings. The outlook is stable.
The ratings upgrade is based upon Moody's expectation for strong
operating performance and improving leverage. Following Signify's
IPO in February 2021, Moody's expects the company to maintain a
more conservative leverage profile than historical levels. Moody's
views this ESG -- Governance consideration as a key driver of this
ratings action.
Upgrades:
Issuer: Signify Health, LLC
Corporate Family Rating, Upgraded to B1, from B2
Probability of Default Rating, Upgraded to B1-PD, from B2-PD
Assignments:
Issuer: Signify Health, LLC
Senior Secured 1st Lien Revolving Credit Facility, Assigned B1
(LGD4)
Senior Secured 1st Lien Term Loan, Assigned B1 (LGD4)
Outlook Actions:
Issuer: Signify Health, LLC
Outlook, Remains Stable
RATINGS RATIONALE
Signify's improved ratings are the result of its exceptionally
strong liquidity position, steadily improving, moderate financial
leverage, and Moody's expectations for double-digit revenue growth.
In its February 2021 IPO, Signify raised net cash proceeds of $610
million, giving the company a negative net funded debt position.
After the proposed refinancing transaction, which sweeps $67
million from the balance sheet, Signify will still have nearly
twice as much cash as the $350 million in newly funded debt.
Signify has disclosed little in terms of its expected use of IPO
proceeds, indicating that M&A activity could be part of its plans,
but it has provided clarity on what Moody's expects will be a
relatively conservative approach to financial policy, including
maintaining financial leverage at lower than historical levels.
Private equity sponsor New Mountain Capital continues to have a
majority, 62% ownership position in the company, which weighs on
the CFR. Moody's expects 15% to 20% revenue growth in 2021, to
about $725 million. The scale is still somewhat small relative to
B1-rated service industry peers.
Signify showed marked operational resilience in 2020, despite
challenges posed by the COVID-19 crisis, in both of its segments,
HRA services and episodes-of-care services. During the pandemic,
Signify has been able to quickly deliver virtual health HRAs.
In-home HRA visits that had been postponed in April and May of 2020
accelerated in the latter part of the year, driving a nearly 22%
revenue improvement in 2020. It also transitioned Remedy, its
episodes-of-care unit acquired in January 2019, to a virtual
platform and drove improvements in performance metrics in that
segment. Most of the integration of Remedy is complete, and the
cross selling of HRE services with social determinants of health
("SDOH") and transition-to-home platforms is seeing success. Cross
selling, as well as increases in program sizes of both Medicare
Advantage and Bundled Payments for Care Improvement ("BPCI"), will
drive strong revenue growth in the respective segments.
As proposed, the new credit facility is expected to provide
covenant flexibility that could negatively affect creditors,
including: (i) incremental facility capacity not to exceed (x) the
greater of $152 million and $100% of adjusted EBITDA, plus any
unused portion of the general debt basket, plus (y) an amount such
that first lien net secured leverage does not exceed 3.50 times (if
pari passu secured). Amounts up to the greater of $76 million and
50% of adjusted EBITDA may be incurred with an earlier maturity
date than the initial term loans. (ii) 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. (iii) Dividends
or transfers resulting in partial ownership of subsidiary
guarantors could jeopardize guarantees; subject to protective
provisions which permit guarantee releases so long as such
disposition is with an unaffiliated third party in connection with
a bona fide business transaction. (iv) 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.
Revenue growth and sustained, strong margins will drive organic
deleveraging from already moderate levels. Moody's expects
adjusted-debt-to-EBITDA to ease to 3.0 times at year-end 2021, from
3.4 times as of March 31, 2021, pro-forma for the proposed
refinancing, which itself represents a $61 million net decline in
funded debt, to $350 million. (Moody's adjustments to both EBITDA
and debt result in a delta relative to the company's leverage
calculation of roughly one full turn higher.) Moody's expectations
for about $70 million in free cash flow in 2021 and an undrawn $185
million revolver (upsized by $105 million from the current size)
augment what is already, given Signify's cash balance, a very good
liquidity profile.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the ratings if free cash flow as a percentage
of debt holds above 10%; if the company maintains good revenue
growth while diversifying revenue sources across business lines and
away from CMS-associated (Centers for Medicaid and Medicare)
sources; if sponsor-controlled equity ownership falls below 50%,
and; if Moody's expects it will adhere to a conservative financial
policy.
Moody's could downgrade the ratings if expected revenue growth is
in the single-digit percentages; if Moody's-adjusted debt-to-EBITDA
leverage holds above 4.0 times; if Moody's expect free cash flow
will be in the mid-single-digit percentages for a sustained period;
or if there is a legislatively imposed change to the scope of the
HRA model.
Signify Health, domiciled in both Dallas, TX and Norwalk, CT, is a
leading provider of home-based heatlh risk assessment ("HRA")
services on behalf of Medicare Advantage health plans in the US,
and chronic and post-acute bundled payment management. The company
was formed by the late-2017 acquisition by New Mountain Capital of
both Censeo Health and Advance Health. In 2019, New Mountain
contributed to the Signify Health entity another of its portfolio
companies, Connecticut-based Remedy Partners, a provider of
software and analytics that facilitate large-scale bundled payment
programs. The company undertook an IPO in February 2021. Moody's
expects Signify to generate 2021 revenue of at least $725 million.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.
SIGNIFY HEALTH: S&P Rates New Senior Secured Revolver 'B'
---------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to Signify Health LLC's proposed senior secured
revolver ($185 million) and term loan ($350 million). The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 50%) recovery in the event of a payment default.
S&P expects the company will replace the existing $80 million
revolver with the proposed $185 million revolver and use the new
term loan combined with cash on hand to repay its existing $411
million term loan as well as related fees and expenses.
S&P said, "Our 'B' issuer credit rating on parent company Signify
Health Inc. reflects its relationships with 51 health plans in the
U.S. including 26 of the 50 largest Medicare Advantage plans and
serves about half of the bundled payments market with little
reimbursement risk. These are offset by significant customer
concentration, potential risk that large health plans can insource
some of the health assessment services, as well as CMS policy
modifications that could impact the episode of care business. We
expect leverage to be below 4x for the next two years and
discretionary cash flow around $45 million for 2021 and $20 million
for 2022."
SIRIUS XM: S&P Rates New $1.5BB Senior Unsecured Notes 'BB'
-----------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating and '3'
recovery rating to New York-based satellite radio operator Sirius
XM Radio Inc.'s proposed $1.5 billion senior unsecured notes due in
2028. The '3' recovery rating indicates its expectation for
meaningful (50%-70%; rounded estimate: 50%) recovery for lenders in
the event of a payment default.
Sirius XM plans to use the proceeds to redeem its 3.875% senior
unsecured notes due in 2022 ($1 billion outstanding) and partially
repay borrowings on its revolving credit facility maturing in 2023
(approximately $1 billion outstanding as of March 31, 2021).
S&P said, "Our 'BB' issuer credit rating and stable outlook on
Sirius XM are unchanged because the proposed transaction is
leverage-neutral. We expect net leverage will remain in the mid-3x
area over the next year as the company returns all free operating
cash flow to shareholders. We expect EBITDA growth will be flat in
2021 as certain operating costs reduced in 2020, particularly
during the early stages of the COVID-19 pandemic, return in 2021."
SKY STEEL: Seeks Cash Collateral Access
---------------------------------------
Sky Steel, Inc. asks the U.S. Bankruptcy Court for the Middle
District of Florida, Orlando Division, for authority to use cash
collateral of, and provide adequate protection to, The Huntington
National Bank.
The Debtor's main business is providing structural steel for a
Toyota factory in Kentucky; however, as a result of the coronavirus
pandemic, the Toyota factory was temporarily closed, resulting in a
drastic reduction in the Debtor's revenues. The Debtor was unable
to remain current on its Small Business Administration loan --
through Huntington Bank -- due to the temporary closure of the
Toyota factory, but the SBA refused to extend the Debtor a
deferment in the payment obligations despite the temporary closure
of the Toyota factory, resulting in a default on the loans with
Huntington Bank.
In addition, a disgruntled former employee stole most of the
Debtor's small equipment and took other actions to harm the
Debtor’s business.
In an effort to increase its business opportunities, the Debtor
recently changed its operations from predominantly iron work to
millwright work. The Debtor is hopeful that its business will
increase, as demand for vehicles is strong, Toyota is ramping up
production of various vehicles, and many of the obstacles that the
Debtor has faced over the past 18 months seem to be resolving.
The Debtor commenced the Chapter 11 Case in order to implement a
comprehensive restructuring, stabilize its operations for the
benefit of its customers, secured creditors, employees, vendors,
and other unsecured creditors; and to propose a mechanism to
efficiently address and resolve all claims.
As of the Petition Date, the Debtor has approximately $3,382.20 in
cash and cash equivalents. In addition, Debtor is owed
approximately $50,675.87 in accounts receivable. The Debtor's other
personal property -- consisting of inventory, furniture, machinery,
and equipment -- is valued at approximately $21,850. The Debtor's
earnings going forward may be subject to the Creditors' alleged
liens, and to the extent that such future earnings may be deemed to
be cash collateral, the Debtor seeks authority to use same.
No UCC Statements have been filed against the Debtor. However, on
October 22, 2018, Huntington filed a UCC Statement against an
affiliated entity, Exceltech Corporation. As such, it appears that
Huntington's lien was perfected against the nondebtor, Exceltech,
and the Bank does not have any lien against any of the assets of
the Debtor. Nevertheless, the Debtor is filing the Cash Collateral
Motion in an abundance of caution, in the event the Court finds the
Creditor does somehow have a lien against the Debtor's assets. The
Creditor holds a claim against the Debtor in the approximate amount
of $838,369.66, which claim is wholly unsecured.
As adequate protection for the use of the Creditor's cash
collateral (if any), the Debtor proposes to grant Huntington a
replacement liens with the same validity, extent, and priority as
its prepetition lien.
A copy of the motion and the Debtor's six-month budget is available
for free at https://bit.ly/3zmDqHF from PacerMonitor.com.
The Debtor projects total sales of $11,602 and total operating
expenses of $6,603 for June.
About Sky Steel, Inc.
Sky Steel, Inc. is in the structural steel erection business. It
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. M.D. Fla. Case No. 21-02638) on June 9, 2021. In the
petition signed by Stephen P. Collins, authorized representative,
the Debtor disclosed $75,908 in assets and $1,689,320 in
liabilities.
Jeffrey S. Ainsworth, Esq., at Bransonlaw, PLLC is the Debtor's
counsel.
SKYBRIDGE SPECTRUM: Court Tosses Involuntary Chapter 11 Petition
----------------------------------------------------------------
Bankruptcy Judge Elizabeth L. Gunn dismissed an involuntary Chapter
11 bankruptcy petition against Skybridge Spectrum Foundation.
Judge Gunn held that:
(1) the Alleged Debtor is "not a moneyed, business, or
commercial corporation" and
(2) the claims of Warren Havens, the petitioning creditor, are
"the subject of a bona fide dispute as to liability or amount."
The Court said Havens "has contrived, devised, and continually
modified to fit his needs throughout the pendency of this case" a
series of facts with respect to the identity and nature of the
Alleged Debtor and his alleged claims against it in an attempt to
meet the requirements of Section 303 of the Bankruptcy Code, and
thereby qualify to place Skybridge and perhaps other of the
receivership entities into bankruptcy.
"Such legal and factual gymnastics are neither appropriate nor
supportable by the actual facts in this case," Judge Gunn said.
"The Court will not permit such attempted manipulation of the
bankruptcy system."
Among others, Judge Gunn explained the Alleged Debtor is not an
Eligible Involuntary Debtor. She said Havens has invented the
Alleged Debtor he alternatively names as "Skybridge Spectrum
Foundation a/k/a SkyTel Joint Venture (with assets outside of
California)," and as "Skybridge Spectrum Foundation with the
'Skytel Joint Venture' which is a de facto joint venture or merger
that includes Skybridge Spectrum Foundation." He conveniently
alleges that "[s]aid debtor is operated in and for commerce and
profit business since late 2015 to this day."
The record refutes this, according to Judge Gunn, noting that
Skybridge is a non-profit corporation and the "SkyTel Joint
Venture" exists not in fact, but solely in the summary allegations
of Haven for the purpose of the Petition, i.e., to attempt to
somehow convert Skybridge into a for-profit business entity that is
eligible to be an involuntary debtor.
"Not all entities that are eligible to file a voluntary petition
under Title 11 are eligible to have an involuntary petition filed
against them," Judge Gunn explained. The Bankruptcy Code excludes
farmers, family farmers, and corporations that are "not a moneyed,
business, or commercial corporation" from a "person" (as that term
is defined in Section 101(41)) against whom an involuntary petition
may be filed. As it is incorporated, Skybridge is a non-profit
entity that is not eligible to be an involuntary debtor. It is a
validly incorporated non-profit corporation under Delaware law. It
is a 501(c)(3) tax exempt non-profit non-stock Delaware
Corporation. It was formed in 2006 for charitable, educational and
scientific purposes including providing programs, education and
research that promoted public safety, environmental protection and
the preservation and sound use of scarce public resources. Havens
does not dispute that Skybridge is organized as a non-profit
corporation, but instead attempts to conflate that status with the
"SkyTel Joint Venture" to overcome the Bankruptcy Code's
prohibition of the filing of involuntary petitions against
non-profit corporations.
Judge Gunn said the involuntary petition must also be dismissed
because the Petitioning Creditor fails to meet the eligibility
requirements of Section 303(b). The Bankruptcy Code makes clear
that an involuntary case may only be commenced
Havens alleges three classes of "claims" against Skybridge in
support of his status as an eligible petitioning creditor: (i)
$70,000 for attorneys' fees he paid in the Delaware Bankruptcy Case
for which he alleges Skybridge owes him reimbursement; (ii) $80,000
for the generic category of "salary, rent, and other due"; and
(iii) $80,000 of "assigned" claims from three closely-held entities
(allegedly previously assigned by Havens to the same entities)
originating from vaguely described "cash-due" obligations of
Skybridge originally to Havens. Skybridge's receiver has allged
that each of Havens' asserted claims against Skybridge are
disputed, contingent, and unliquidated.
"Havens has failed to clearly state a claim for any of the alleged
debts, and even if he had, each claim is subject to a clear
dispute," according to Judge Gunn.
A copy of the Court's June 3, 2021 Memorandum Opinion and Order is
available at:
https://www.leagle.com/decision/inbco20210608615
Skybridge Spectrum Foundation is a 501(c)(3) tax exempt non-profit
non-stock Delaware Corporation. It was formed in 2006 for
charitable, educational and scientific purposes including providing
programs, education and research that promoted public safety,
environmental protection and the preservation and sound use of
scarce public resources. The main goal of its exempt purpose
mission and business plan is to implement nationwide ubiquitous,
including areas not served or reliably served by wireless carriers,
highly accurate and precise radio based positioning, navigation and
timing applications benefiting the general public and national
welfare. It carries out its public interest mission and charter as
a private operating foundation as defined in the Internal Revenue
Code and IRS rules.
An involuntary Chapter 11 bankruptcy petition was filed against San
Francisco-based Skybridge (Bankr. D.D.C. Case No. 21-00005) on Jan.
5, 2021. The petitioning creditor was Warren Havens, asserting
about $230,000 in claims.
The Hon. Elizabeth L. Gunn oversees the case. The petitioning
creditor appeared pro se.
Skybridge Spectrum Foundation is the subject of a receivership
proceedings before the Superior Court of California. Susan L.
Uecker has been appointed as receiver for Skybridge Spectrum as
well as Atlis Wireless LLC, Environmentel LLC, Environmentel-2 LLC,
Intelligent Transportation and Monitoring Wireless LLC, Telesaurus
Holdings GB LLC, Verde Systems LLC and V2G LLC.
SOURCE HOTEL: Seeks to Hire NAI Capital as Real Estate Broker
-------------------------------------------------------------
The Source Hotel, LLC seeks approval from the U.S. Bankruptcy Court
for the Central District of California to employ Torrance,
Calif.-based real estate broker NAI Capital Commercial, Inc.
The Debtor requires a real estate broker to market for sale its
seven-story hotel in the City of Buena Park, Calif.
NAI Capital Commercial will be paid a 1 percent commission on the
sales price.
Chris Jackson, co-chief executive officer of NAI Capital
Commercial, 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 Jackson
NAI Capital Commercial, Inc.
970 W. 190th Street, Suite 100
Torrance, CA 90502
Tel: (310) 878-6900
Fax: (310) 878-6901
About The Source Hotel
The Source Hotel, LLC, the owner of a four-star, full-service
Hilton Hotel development in Buena Park, Calif., sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case
No. 21-10525) on Feb. 26, 2021. Donald Chae, manager, signed the
petition. In the petition, the Debtor disclosed assets of between
$50 million and $100 million and liabilities of the same range.
Judge Erithe A. Smith oversees the case. Levene Neale Bender Yoo &
Brill L.L.P. is the Debtor's legal counsel.
SOUTH 18TH ST CAPITAL: Investor Seeks Ch. 11 Trustee Appointment
----------------------------------------------------------------
Natalie Voronov asked the Bankruptcy Court for the Eastern District
of Pennsylvania to appoint a Chapter 11 Trustee for South 18th
Street Capital, LLC, alleging that the current managing member,
Vadim Borisov, intended to improperly use his role as
debtor-in-possession to undercut Ms. Voronov's right to
contributions and distribution of proceeds from the sale of the
Debtor. Ms. Voronov wants the Court to remove Mr. Borisov as a
debtor-in-possession and replaced by an independent Chapter 11
Trustee.
The Debtor is a single asset company which was formed to construct,
develop and sell a real property located at 1328 S. 18th Street,
Philadelphia, Pennsylvania. In May 2018, Ms. Voronov became a 20%
member in the Debtor in exchange for a contribution of $100,000.
The remaining 80% member of the company is Mr. Borisov.
Ms. Voronov said an Operating Agreement was drafted to provide that
all contributions would be repaid before any proceeds were
distributed. Ms. Voronov was repaid $25,000 of her contribution.
Thereafter, Ms. Voronov contributed an additional $13,717, which
was also covered with a contribution agreement.
In October 2020, Mr. Borisov advised Ms. Voronov that he asked a
third party to invest $200,000 to be able to complete the
construction of the Debtor's property. Ms. Voronov said that based
on Mr. Borisov's representation -- that without the additional
$200,000 investment from a third party, construction could not be
completed, and that the property would not be sold to be able to
satisfy creditor liens and return her contributions -- Ms. Voronov
agreed to the additional $200,000 investment by a third party, and
signed the amendment to the Operating Agreement, which contained
the signatures of Ms. Voronov and the Debtor, but not of the third
party. Ms. Voronov said she never received a fully executed copy
of the amendment to the Operating Agreement.
On May 11, 2021, Mr. Borisov informed Ms. Voronov that he wanted to
sever ties with her, that he will not pay her contributions or
proceeds from the sale of the property.
The Debtor's Plan of Reorganization and Amended Plan listed Ms.
Voronov as a Class 5 Equity Interest Holder, but no specific
disclosure of her $100,000 contribution was made, nor of the
additional $13,717. Moreover, there is no reference to the
$200,000 investment allegedly secured by Mr. Borisov from a third
party.
Ms. Voronov disclosed that the Property is currently on the market
for sale and Mr. Borisov is the agent for the transaction. If a
sale of the Debtor's asset is consummated, Ms. Voronov asserted
that she is entitled either to (i) participate in distributions as
a priority distributee, with the ambit of being a Class V member
under the Plan, based on the original Operating Agreement, or
alternatively, as a non-priority Class V member if the amended
Operating Agreement is in full force and effect. Ms. Voronov
further asserted that either way, Mr. Borisov does not have the
right to entirely shut her out from participation in Class V
distributions.
The motion is set to be heard at 11:30 a.m. on June 30, 2021.
Natalie Voronov is represented by:
Alan L. Frank, Esq.
Alan L. Frank Law Associates, P.C.
135 Old York Road
Jenkintown, PA 19046
Telephone: (215) 935-1000
Facsimile: (215) 935-1110
Email: afrank@alflaw.net
About South 18th St Capital
South 18th St Capital, LLC is a single asset company which was
formed to construct, develop and sell a real property located at
1328 S. 18th Street, Philadelphia, Pennsylvania. The Debtor filed
a Chapter 11 petition (Bankr. E.D. Pa. Case No. 20-10626) on Jan.
31, 2020. At the time of the filing, the Debtor disclosed assets
of between $100,001 and $500,000 and liabilities of the same range.
Judge Magdeline D. Coleman oversees the case. The Law offices of
Dimitri L. Karapelou, LLC is the Debtor's legal counsel.
SPECTRUM BRANDS: Egan-Jones Hikes LC Sr. Unsecured Rating to BB-
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, upgraded the local
currency senior unsecured rating on debt issued by Spectrum Brands
Legacy, Inc. to BB- from B+.
Headquartered in Madison, Wisconsin, Spectrum Brands Legacy, Inc.
provides consumer products.
SPIRIT AIRLINES: Moody's Alters Outlook on B1 CFR to Positive
-------------------------------------------------------------
Moody's Investors Service affirmed its B1 corporate family rating
and B1-PD probability of default ratings of Spirit Airlines, Inc.
and upgraded to Ba2 from Ba3 the senior secured rating assigned to
the company's 8% senior notes secured by its loyalty program
("Notes"). Moody's also upgraded the speculative grade liquidity
rating to SGL-1 from SGL-2 and changed the ratings outlook to
positive from negative.
"As a mostly domestic carrier offering attractive fares, Spirit
will be one of the leaders in recovering from the pandemic," said
Moody's Lead Analyst, Jonathan Root. Spirit's model brings lower
cost travel to larger US markets, directly competing with peers
across its route map. Moody's expects Spirit's passenger volumes,
measured in revenue passenger miles, to be only 6% lower in the
second quarter of 2021 than it was in the same quarter of 2019.
Similarly, Moody's expects Spirit's capacity, measured in available
seat miles, to be down only 5%. This recovery is second in the
industry only to Allegiant Travel Company, which serves mainly
small and mid-size cities with limited competition.
The ratings affirmation and outlook change to positive reflect
Moody's expectation that Spirit's passenger volumes and revenues
will regain their 2019 levels by the middle of 2022 and operating
profits near the end of 2022. The pace of this recovery is faster
than Moody's previously projected when it assigned first-time
ratings to Spirit in September 2020. Absent any material set-back
to the recovery in air travel demand, Moody's expects credit
metrics to reach levels supportive of a higher corporate family
rating by the first half of 2023, if not the end of 2022.
In the rating actions, Moody's also considered Spirit's very good
liquidity. Cash and short-term investments -- presently of $1.9
billion -- will remain above 40 percent of funded debt at least
through 2023, while free cash flow will turn positive in 2022, and
exceed $100 million in that year. These attributes were the basis
of the upgrade of the speculative grade liquidity rating to SGL-1.
Further, liquidity will be supported by the company's $240 million
revolver, which is currently undrawn but could be used to bridge
financing of new aircraft deliveries.
The upgrade of the Notes to Ba2 reflects recent changes in the
composition of the company's debt capital. The company issued $500
million of 1% convertible senior notes due 2026 and used the
proceeds to retire most of its existing $175 million, 4.75%
convertible notes due 2025. Spirit used $370 million of newly
issued equity to retire $340 million of its 8% senior secured
notes. These changes create a larger first loss position of
unsecured claims including the convertible notes relative to senior
secured obligations in the capital structure, which lifts the
senior secured rating in Moody's Loss Given Default Rating
Methodology ("LGD"). The Ba2 Notes rating results from a one-notch
positive override to the LGD model reflecting Moody's opinion that
the importance of the collateral to the company's daily operations
lowers the probability of default of the notes relative to that of
the company's other secured debt.
RATINGS RATIONALE
The B1 corporate family rating reflects Spirit's solid market
position as a leading low-cost provider of passenger air
transportation in the US domestic market and its strong liquidity.
The rating also reflects the expectation that the company will
maintain its historically conservative financial policy, with no
dividends or share repurchases and moderate financial leverage.
Moody's expects debt/EBITDA to decline to pre-pandemic levels of
below 4x by early 2023. The B1 rating is constrained by the
potential that Spirit's leverage will remain elevated following the
recovery from the coronavirus pandemic if the company chooses to
debt-fund or lease all deliveries of new aircraft as the company
restores its mid-teens annual capacity growth trajectory. There is
also execution risk around maintaining its operating margins as it
enters new markets or increases service on existing routes.
The Ba2 rating on the Notes reflects the strategic importance of
the Spirit brand and related intellectual property ("IP") to the
company and the benefits of the loyalty program to Spirit's
day-to-day operations and cash flows. These positives are balanced
by an expected relatively low recovery if the collateral ever
needed to be monetized to pay off the Notes. The importance of the
brand will cause Spirit to continue to make the sub-license fee
payments were it to file for a reorganization under Chapter 11 of
the US Bankruptcy Code. The rating also considers the cash
contributions of the loyalty program to the company's operating
cash flows, which, together with the brand sub-license fees, will
support the debt service due on the Notes. Under a Spirit
bankruptcy scenario, the transaction's terms will require Spirit to
file a motion within ten days of a proceeding to assume the loyalty
program sub-license pursuant to Section 365 of the Bankruptcy Code.
The company will not be required to do the same for the brand
sub-license; rather it would seek administrative expense status for
the brand sub-license fees in its Day 1 motions to the bankruptcy
court, to allow these payments to also continue unimpeded. The
Notes rating, now two notches above the B1 corporate family rating,
also reflects Moody's assumption of a lower probability of default
relative to that of the company's other senior secured debt
obligations. The outstanding balance of the Notes declined to $510
million from $850 million in April following the optional
redemption with proceeds of the company's then-completed equity
offering.
The positive outlook reflects Moody's expectation for continuing
recovery of demand and growth of air traffic, strengthening of
credit metrics with debt-to-EBITDA approaching 4x by the end of
2022 and sustained strong liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the recent improving traffic
trends continue, leading to the recovery of revenues, earnings and
credit metrics to 2019 or better levels. Expectations for
debt-to-EBITDA to fall below 4x and funds from operations +
interest-to-interest strengthening to more than 3.5x could support
an upgrade. Maintaining very good liquidity, with cash and
short-term investments remaining above $1.3 billion could also
support a ratings upgrade. The ratings could be downgraded if
liquidity weakens, with cash and short-term investments falling
below $1 billion while reported debt remains above $2.5 billion.
Debt-to-EBITDA sustained above 5.5x could also lead to a ratings
downgrade.
The principal methodology used in these ratings was Passenger
Airline Industry published in April 2018.
The following rating actions were taken:
Affirmations:
Issuer: Spirit Airlines, Inc.
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Upgrades:
Issuer: Spirit Airlines, Inc.
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Issuer: Spirit IP Cayman Ltd.
Senior Secured Regular Bond/Debenture, Upgraded to Ba2 (LGD2) from
Ba3 (LGD3)
Outlook Actions:
Issuer: Spirit Airlines, Inc.
Outlook, Changed To Positive From Negative
Issuer: Spirit IP Cayman Ltd.
Outlook, Changed To Positive From Stable
Spirit Airlines, Inc., (NYSE: SAVE) headquartered in Miramar,
Florida, is a leading low-cost US airline providing service to
destinations throughout the US, Latin America and the Caribbean.
Revenues were $1.8 billion in 2020, down from $3.8 billion in 2019.
ST. JOSEPH ENERGY: Moody's Alters Outlook on Ba3 Rating to Neg.
---------------------------------------------------------------
Moody's Investors Service has affirmed the Ba3 rating assigned to
St. Joseph Energy Center, LLC's (SJEC or Project) senior secured
credit facilities consisting of a $423 Term Loan B and $38.9
million revolving facilities. The rating outlook was changed to
negative from stable.
RATINGS RATIONALE
The rating action reflects weaker than anticipated financial
performance in FY 2020, leading to the second year in a row of
lower than anticipated credit metrics, a substantial decline in PJM
capacity auction results for the RTO region to $50MW/hr in
2022/2023 from $140MW/hr in 2021-2022 and increased refinancing
risk. Financial performance in FY 2020 was weaker due to lower
spark spreads than originally forecast as well as longer than
planned maintenance outages in the second and fourth quarters of FY
2020 including economic reserve shutdowns.
Although Moody's anticipate an improvement in financial performance
in FY 2021 primarily due to the higher known capacity revenues,
Moody's expect credit metrics to weaken prospectively given the
known decline in capacity revenues in FY 2022 of around $8 million,
and continued uncertainty regarding future auction results which
are expected to remain pressured.
The Ba3 rating considers the strong operating performance of the
plant with availability factors typically above 92%. As of March
2021 YTD, availability factor was 100%, and in FY 2020 it was lower
at 85% primarily due to planned outages, some economic reserve
shutdowns in June as well as periods during the fall and winter.
Capacity factors were 80.9%, 90.8% and 73% in FY 2018, 2019 and
2020, respectively. As of March 2021 YTD, capacity factor was
87.4%.
The Ba3 credit profile continues to reflect the project's position
as a new, highly efficient and competitive combined cycle gas
turbine power plant, serving as a base load unit in PJM. The credit
profile remains tempered by the project's ongoing merchant
exposure, with some nodal basis risk relative to AEP-Dayton Hub,
and more expensive fuel relative to other gas sources in the
region, as well as a weaker excess cash flow sweep feature relative
to its single asset PJM-located peers. SJEC has implemented rolling
hedging to manage its ongoing merchant exposure. The existence of a
revenue put provides some downside protection to the project from
weak energy margins. Credit metrics, previously projected to
straddle the range associated with the Ba to B rating categories,
have declined to the mid to low B category range and are expected
to remain at this level through 2023, with little excess cash flow
for debt repayment. In the absence of materially stronger energy
margins, debt outstanding at FY 2022 is anticipated to be 89.8% of
original financing, including the $15 million upsizing completed in
June 2019 and around 80% at maturity.
Credit metrics in FY 2020 were weaker than anticipated owing to
lower spark spreads averaging $8.53 relative to management's
expectation of $10.73. As of March 2021 YTD, spark spreads have
shown some improvement averaging $9.68 relative to budgeted $9.04
as a result of higher energy prices in the AEP- Dayton Hub however,
forecast natural gas price increases may narrow this margin for the
remainder of 2021. Moody's therefore forecast that key credit
metrics are expected to improve slightly in fiscal 2021 yet still
underperform Moody's initial expectations with a forecast DSCR of
around 1.51x and CFO to debt of 5.1% as a result of expected fuel
expense increases that will weaken the prospective energy margins.
LIQUIDITY PROFILE
SJEC's liquidity is adequate, provided by a $7.9 million working
capital facility and supported by a 6-month debt service reserve
backed by a L/C. There are L/C requirements (provided under the
revolving facility), associated with both the firm supply and
transportation agreements with some step-downs which started in
April 2019 and 2020 which now provide additional availability under
the revolving facility of $2.5 million and $5 million,
respectively. The major maintenance reserve is discretionary.
RATING OUTLOOK
The negative outlook considers the expectation of continued weak
financial performance due to lower spark spreads, despite some
boost from higher capacity revenues in FY 2021 relative to the
prior year, but known weaker capacity revenues in FY 2022. The
outlook also includes the uncertainty surrounding potential
improvement in future capacity auction results to be held in
December 2021, and the potential impact on future credit metrics
and on the ability to repay debt from excess cash flows. SJEC's 50%
cash flow sweep project structure, which is lower than several
peers, further reduces debt repayment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
FACTORS THAT COULD LEAD TO AN UPGRADE
Given the negative outlook, Moody's expectations for financial
performance during FY 2021 and uncertainty surrounding upcoming
auction results, it is unlikely that the rating will be upgraded in
the near term.
The outlook could stabilize if financial performance improves such
that DSCR exceeds 1.75X and CFO/Debt approximates 10%.
If performance, particularly on the energy margin side exceeds
Moody's current expectations either from improvement in general
market dynamics or mitigated by hedging strategies, resulting in
financial performance more in line with management's case of a DSCR
that is greater than 2.5x and a CFO/Debt that is greater than 15%,
there could be upward pressure on the rating.
FACTORS THAT COULD LEAD TO A DOWNGRADE
Indication of weaker financial performance into 2022 assessed
prior to year-end, coupled with limited improvement in upcoming
capacity auction results expected in December 2021, specifically,
if the DSCR is expected to remain below 1.6x and the CFO/Debt is
below 8% on a sustained basis.
PROFILE
SJEC is located in St. Joseph County, Indiana, near the Town of New
Carlisle. The project consists of two Siemens SGT6-5000F(5ee) CTGs,
two Nooter/Eriksen HRSGs, and one Siemens STG with a nameplate
capacity of approximately 709 megawatts. The HRSGs are equipped
with duct burners to supplement plant capacity, subject to permit
fuel throughput restrictions.
The project achieved substantial completion on April 1, 2018, final
completion on November 28, 2018.
The project's sponsors include two separate funds managed by Ares
EIF Management, LLC for 80% of the equity, with Toyota Tsusho
America Inc. holding the remaining 20%. Both sponsors have
experience in the US power market, in particular through
investments in combined cycle power plants.
METHODOLOGY
The principal methodology used in these ratings was Power
Generation Projects Methodology published in June 2021.
STARWOOD PROPERTY: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
------------------------------------------------------------------
S&P Global Ratings revised its ratings outlook on Starwood Property
Trust Inc. and subsidiary Starwood Property Mortgage LLC to stable
from negative. S&P also affirmed the 'BB-' long-term issuer credit
ratings.
S&P said, "The outlook revision mainly reflects our view that the
likelihood of substantial deterioration in Starwood's loan
portfolio has lessened since the onset of the COVID-19 pandemic and
the negative rating action we took in March 2020." Widespread
availability of vaccines and the reopening of the U.S. economy have
significantly eased asset quality pressures. Starwood has reported
minimal problem loans and charge-offs and publicly stated it
expects few to no losses on its loans as a result of the pandemic.
Since its inception in 2009, the company has reported very few
losses on its loans.
As asset quality pressures have abated, so have liquidity risks.
Earlier in the pandemic, the company faced some margin calls and
made some voluntary paydowns on the repurchase funding facilities
it uses to finance some of its assets. The stabilization of asset
quality and low level of problem loans have greatly reduced the
risk of further margin calls.
In addition, Starwood has maintained access to a variety of funding
sources, including by issuing unsecured debt and a term loan B
since the onset of the pandemic. It also has lowered its reliance
on repurchase funding facilities, particularly those that allow
margin calls based on changes in credit spreads.
The company's focus on commercial real estate lending and investing
still exposes it to medium-term pressures in that area. For
instance, secular changes in the demand for office space, triggered
by the pandemic, could over time create asset quality challenges in
Starwood's sizable portfolio of loans for transitional office
properties.
S&P said, "That said, we believe our ratings on the company well
balance that risk against its good recent track record. A
continuation of the economic rebound should also ameliorate some of
the medium-term pressures in commercial real estate lending.
"Starwood's leverage, by our measurement of debt to adjusted total
equity (ATE), has risen somewhat over the past year, to about 3.2x
as of March 31, 2021, from 2.5x-2.75x. Because of that, we have
changed our assessment of Starwood's capital, leverage, and
earnings to adequate from strong.
"The company's dividends have exceeded the earnings it reports
under generally accepted accounting principles (GAAP), pushing down
our calculation of ATE. We believe that's because Starwood's
taxable income has exceeded its GAAP earnings, and, as a REIT,
Starwood is required to distribute at least 90% of its taxable
income to shareholders as dividends. Taxable income typically
differs from GAAP earnings in its treatment of provisions,
depreciation, and other items. Starwood nets depreciation on its
properties from GAAP earnings.
"We also deduct from ATE certain lowly-rated and unrated
investments in commercial mortgage backed securities. The company
also believe its property investments have fair market values above
their undepreciated book values.
"We also have improved our assessment of Starwood's business
position, largely to reflect its superior diversification compared
with other commercial real estate lenders we rate. We believe the
company's infrastructure lending, residential mortgage, property,
and real estate investing and servicing strategies have supported
its stability throughout the pandemic.
"The stable outlook reflects our expectation that over the next
year, Starwood--helped by the rebounding economy--will report
mostly stable asset quality trends while maintaining adequate
liquidity and leverage of 3.0x-4.0x, as measured by debt to ATE.
"Pandemic-related changes and pressures in commercial real estate,
such as in the office market, may still create challenges for the
company and other lenders in the next few years, but we expect it
to work through those over time while maintaining leverage,
funding, and liquidity near current levels.
"We could lower the ratings in the next year if asset quality
deteriorates meaningfully, particularly if that leads to margin
calls on Starwood's funding facilities and liquidity pressures, or
if leverage rises above 4.5x.
"We could raise the ratings in the next year if asset quality
stabilizes further, medium-term pressures on the commercial real
estate market ease, and Starwood maintains adequate liquidity. We
could also raise the ratings if the company reduces leverage below
2.75x."
STREAM TV: Chapter 11 Case Dismissed for Second Time
----------------------------------------------------
Alex Wolf of Bloomberg Law reports that Stream TV Networks Inc. is
unable to avoid an agreement handing over the 3D technology
developer's assets to a group of lenders, after a judge tossed the
company's bankruptcy for the second time in less than a month.
A group of Stream TV’s unsecured creditors filed an involuntary
Chapter 7 case a week after the U.S. Bankruptcy Court for the
District of Delaware dismissed the company's voluntary Chapter 11
in May 2021.
"It's clear to me this was filed to circumvent my dismissal order,"
Judge Karen B. Owens said at a virtual hearing Thursday, June 10,
2021.
About Stream TV Networks
Philadelphia, Pa.-based Stream TV Networks, Inc. develops
technology intended to display three-dimensional content without
the use of 3D glasses.
On Feb. 24, 2021, Stream TV Networks filed a Chapter 11 petition
(Bankr. D. Del. Case No. 21-10433). Stream TV Networks CEO Mathu
Rajan signed the petition. In the petition, the Debtor listed
assets of about $100 million to $500 million and liabilities of
$100 million to $500 million. Judge Karen B. Owens oversees the
case. Dilworth Paxson, LLP, led by Martin J. Weis, Esq., is the
Debtor's counsel.
SUMMIT HOTEL: Egan-Jones Keeps BB Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on May 26, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Summit Hotel Properties, Inc.
Headquartered in Austin, Texas, Summit Hotel Properties, Inc.
operates as a real estate investment trust.
SUNCOKE ENERGY: Moody's Rates New $500MM Secured Notes 'B1'
-----------------------------------------------------------
Moody's Investors Service assigned a B1 rating to SunCoke Energy,
Inc.'s new $500 million senior secured notes due 2029. At the same
time, Moody's affirmed SunCoke's corporate family rating of B1 and
the probability of default rating of B1-PD. The proceeds from the
new notes, along with additional revolver borrowings, will be used
to refinance the existing $587 million 7.50% senior unsecured notes
of SunCoke Energy Partners, L.P. (SXCP) due 2025 and to pay the
related call premium, transaction fees and expenses. The rating of
the existing unsecured notes will be withdrawn after the close of
the transaction. The Speculative Grade Liquidity Rating remains
SGL-2. The outlook is stable.
Assignments:
Issuer: SunCoke Energy, Inc.
Senior Secured Regular Bond/Debenture, Assigned B1 (LGD4)
Issuer: SunCoke Energy, Inc.
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Outlook Actions:
Issuer: SunCoke Energy, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
SunCoke's B1 corporate family rating reflects its moderate leverage
and relative earnings stability offered by its long-term
take-or-pay contracts with pass-through provisions, offset by
potential event risk related to high customer concentration and the
company's exposure to the volatile steel and coal industries. The
ratings acknowledge the strength of SunCoke's relationships with
its steelmaking customers, which despite the headwinds faced by the
steel industry in the past, either continued to take the contracted
deliveries, made make-whole payments to the company or demonstrated
willingness to extend the contracts on largely similar terms in
exchange for coke supply relief. The company's coke supply
contracts allow for pass-through, with some variation in contract
structure, of most costs, including metallurgical coal, the
principal raw material input and largest cost component in the
coke-making process. The ratings also acknowledge that the
company's portfolio of efficient and technologically advanced coke
batteries gives it a distinct competitive advantage over other
aging cokemaking facilities in North America that are likely to
continue to close due to environmental challenges and rising
costs.
SunCoke faced substantial uncertainty coming into 2020. Coke supply
contracts representing 43% of its cokemaking capacity were set to
expire in 2020-2021 amid weakening, at the time, domestic steel
industry conditions. The industry environment worsened in 1H 2020
due to pandemic-related steel mill shutdowns, weaker demand in the
automotive and oil & gas sectors and along with service center
destocking, contributed to a significant steel price declines in
the first half. Steel prices surged in late 2020 and in 2021 on a
temporary supply/demand dislocation driven by a
quicker-than-expected economic recovery, curtailed steel capacity
and the need to refill inventories amid strong consumer demand.
Despite what was a challenging operating environment, SunCoke was
able to renew and extend its contracts with key customers AK Steel
and ArcelorMittal USA (now Cleveland-Cliffs Inc. (B1 positive)) to
2025 in exchange for a relief on a portion of volumes. The Indiana
Harbor coke supply agreement that expires in October 2023 now
represents the nearest contract maturity. In addition to lower
volumes in 2020, SunCoke agreed to a combined Haverhill I and
Jewell supply reductions of 470kt of coke in 2021 and 870kt in
2022-2025 bringing total contracted domestic coke volumes to about
3.8 million tons in 2021 and 3.4 million tons in 2022. SunCoke
converted a portion of its cokemaking capacity to produce foundry
coke for the domestic market. The company is operating all of its
coke facilities at full capacity and plans to sell the uncontracted
met coke volumes in international markets.
SunCoke generated $211 million in Moody's-adjusted EBITDA, $64
million in free cash flow and redeemed about $110 million of SXCP
notes in 2020. A combination of strong EBITDA and positive free
cash flow generated in Q1 that was used to repay $33 million of the
RCF borrowings, reduced the Moody's-adjusted Debt/EBITDA ratio to
3.0x in the LTM period ended on March 31, 2021 from 3.3x at the
FY2020 year-end. Moody's expects SunCoke to generate the adjusted
EBITDA in the range of $215-225 million and free cash flow (after
dividend payments) in the range of $60-70 million in 2021, which
should support the partial repayment of the RCF borrowings and help
SunCoke maintain adjusted leverage in the 2.8x-3.0x range.
The stable outlook reflects an improvement in the North American
steel industry conditions, the resolution around the company's
take-or-pay coke contracts that were due to expire 2020-2021 and
the expected stabilization of the company's operating profile in
2021.
As a producer of coke and a supplier of key input ingredient for
the steel industry, SunCoke is exposed to elevated environmental
social and governance risks. SunCoke, like all producers of
carbon-based products is subject to numerous regulations including
environmental laws aimed at reducing greenhouse gas and air
pollution emissions, among a number of other sustainability issues,
and will likely incur costs to meet increasingly stringent
regulations. As of December 31, 2020, the company also had $64.6
million in obligations for coal workers' black lung benefits
related to its legacy coal mining business.
SunCoke's SGL-2 speculative grade liquidity rating reflects its
good liquidity position, supported by $54 million in cash as of
March 31, 2021 and, on proforma basis, $138 million available under
the revolving credit facility. The company plans to downsize the
RCF capacity to $350 million from $400 million and extend the
maturity by 2 years to 2026. Moody's expect SunCoke to generate
$60-70 million in free cash flow in 2021 with the majority to be
applied towards debt reduction. Moody's expect the company to
remain in compliance with the restrictive financial covenants under
the credit agreement, which include a maximum consolidated leverage
ratio of 4.50x and a minimum consolidated interest coverage ratio
of 2.50x.
The new senior secured notes will have the first lien priority on
substantially all of the company's and the guarantors' existing and
future assets with certain exception of non-guarantor restricted
and unrestricted subsidiaries which will include the company's
international subsidiaries and the Indiana Harbor Coke Company, LP.
The B1 rating on the new senior secured notes, on par with the B1
CFR, reflects their position in the capital structure given the
first lien claim on substantially all of the company's assets, pari
passu with the revolving credit facility, and their large
proportion of the overall debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade is unlikely in the near term but would be considered if
the company continues to reduce debt, establishes a strong market
position in the domestic foundry market or is able to successfully
export coke on a sustained basis to supplement, if required, coke
sales under the long-term take-or-pay contracts with domestic
steelmakers. Quantitatively, the ratings could be upgraded if Debt/
EBITDA, as adjusted by Moody's, were expected to be maintained
below 2.5x on a sustained basis. The ratings could be downgraded if
liquidity were to deteriorate or if Debt/ EBITDA, as adjusted, were
expected to exceed and be sustained above 4.0x.
SunCoke Energy, Inc. is the largest independent US based producer
of coke, a key ingredient in the production of steel in blast
furnace steel operations. The company owns and operates five
metallurgical coke making facilities in the US, and also operates a
cokemaking facility in Brazil on behalf of ArcelorMittal (Ba1
positive). The company's logistics business comprised of 4
terminals, provides handling and mixing services to steel, electric
utility, coke and coal producing and other manufacturing companies.
The company generated $1.3 billion in revenues in the LTM ended
March 31, 2021.
The principal methodology used in these ratings was Steel Industry
published in September 2017.
SUNCOKE ENERGY: S&P Rates New $500MM Senior Secured Notes 'BB'
--------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating and '2'
recovery rating to SunCoke Energy Inc.'s proposed $500 million
senior secured notes due 2029. The '2' recovery rating indicates
its expectation for substantial (70%-90%; rounded estimate: 85%)
recovery in the event of a default. The proposed $500 million
senior secured notes have first-lien priority over the issuer and
the guarantors' assets, and are pari passu with the existing
revolving credit facility. Consequently, S&P lowered its
issue-level rating on the existing $400 million revolving credit
facility (which the company is proposing to downsize to $350
million) to 'BB' from 'BB+' and revised the recovery rating to '2'
from '1'. The maturity on the revolver will be extended to 2026
from 2024.
SunCoke is refinancing its existing senior unsecured notes and
downsizing the current revolving credit facility commitment to
reduce fees and cash interest expense and extend its debt maturity
profile. The company plans to use proceeds from the proposed notes,
together with drawings on the revolver, to repay its existing $587
million 7.5% senior unsecured notes. S&P's ratings are based on the
preliminary terms and conditions of the proposed notes.
S&P's existing ratings on SunCoke Energy Inc. are unchanged as per
S&P's most recent full analysis published on March 19, 2021 on
Ratings Direct.
RECOVERY ANALYSIS
Key analytical factors
-- S&P assigned its 'BB' issue-level rating and '2' recovery
rating to SunCoke's proposed $500 million new senior secured notes
due 2029. The '2' recovery rating indicates its expectation for
substantial(70%-90%; rounded estimate: 85%) recovery in the event
of default. The issuer is SunCoke Energy Inc.
-- S&P said, "We also lowered our issue-level rating on SunCoke's
existing $400 million revolving credit facility (which the company
is proposing to downsize to $350 million) to 'BB' from 'BB+' and
revised our recovery rating to '2' from '1'. The '2' recovery
rating indicates our expectation for substantial (70%-90%; rounded
estimate: 85%) recovery in the event of default. This represents a
decrease from our previous expectation for a higher recovery
(90%-100%; rounded estimate: 95%)."
-- S&P bases its assumptions on SunCoke's proposed capital
structure, which includes the proceeds from the proposed new $500
million senior secured notes and the downsized $350 million
revolving credit facility, which will be used to pay off the
existing $587 million 7.5% senior unsecured notes of due 2025.
-- S&P's simulated default scenario contemplates a collapse in
domestic steel prices that would cause contractual defaults under
take-or-pay arrangements. In this scenario, it expects significant
cash flow deficits would make it difficult to repay or refinance
its credit facilities in 2025, S&P's assumed year of default.
-- S&P said, "In a default, we assume creditors would receive
more value in a reorganization than a liquidation. Hence, we employ
a distressed enterprise value-based analysis. We assess the
company's recovery prospects based on a gross reorganization value
of approximately $736 million, which reflects about $134 million of
emergence EBITDA and 5.5x multiple."
-- The 5.5x multiple is in line with the multiples it uses for
other companies in the metals and mining downstream sector.
Simulated default assumptions
-- Simulated year of default: Fiscal 2025
-- Emergence EBITDA: $134 million
-- EBITDA multiple: 5.5x
-- Gross enterprise value: $736 million
Simplified waterfall
-- Net recovery value after 5% administrative expenses: $699
million
-- Estimated priority claims and adjustments (sales and lease back
facility): $9 million
-- Remaining recovery value: $690 million
-- Estimated first-lien debt claims: $808 million
-- Recovery expectations for first-lien debt: 70%-90% (rounded
estimate: 85%)
Note: All debt amounts include six months of accrued but unpaid
interest at default.
SUNCOR ENERGY: Egan-Jones Keeps BB+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Suncor Energy, Inc.
Headquartered in Calgary, Canada, Suncor Energy, Inc. is an
integrated energy company focused on developing the Athabasca oil
sands basin.
SUNSTONE HOTEL: Egan-Jones Lowers Senior Unsecured Ratings to B+
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 26, 2021, downgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Sunstone Hotel Investors, Inc. to B+ from BBB-.
Headquartered in Irvine, California, Sunstone Hotel Investors, Inc.
operates as a hospitality and lodging real estate investment
trust.
SYSCO CORPORATION: Egan-Jones Keeps BB Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Sysco Corporation.
Headquartered in Houston, Texas, Sysco Corporation distributes food
and related products primarily to the foodservice industry.
T-MOBILE US: Egan-Jones Keeps BB Senior Unsecured Ratings
---------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, maintained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by T-Mobile US, Inc.
Headquartered in Bellevue, Washington, T-Mobile US, Inc. is a
national wireless carrier in the United States.
TECT AEROSPACE: Deadline to File Claims Set for July 23
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware set July 23,
2021, at 5:00 p.m. (prevailing Eastern time) as deadline for
persons or entities to file proofs of claim against Tect Aerospace
Group Holdings Inc. and its debtor-affiliates.
The Court also set Oct. 4, 2021, at 5:00 p.m. (prevailing Eastern
time) as deadline for governmental units to file their proofs of
claims against the Debtors.
Further information regarding filing and processing of claims,
contact Kurtzman Carson Consultants LLC, toll-free at (877)
725-7523, or, if calling from outside the United State of Canada,
at (424) 236-7273.
About TECT Aerospace
TECT Aerospace Group Holdings, Inc., and its affiliates manufacture
high precision components and assemblies for the aerospace
industry, specializing in complex structural and mechanical
assemblies, and, machined components for a variety of aerospace
applications. TECT produces assemblies and parts used in flight
controls, fuselage/interior structures, doors, wings, landing gear,
and cockpits.
TECT operates manufacturing facilities in Everett, Washington, and
Park City and Wellington, Kansas and their corporate headquarters
is located in Wichita, Kansas. TECT currently employs approximately
400 individuals nationwide.
TECT and its affiliates are privately held companies owned by Glass
Holdings, LLC and related Glass-owned or Glass controlled
entities.
TECT Aerospace Group Holdings, Inc., and six affiliates sought
Chapter 11 protection (Bankr. D. Del. Case No. 21-10670) on April
6, 2021.
TECT Aerospace estimated assets of $50 million to $100 million and
liabilities of $100 million to $500 million as of the bankruptcy
filing.
The Debtors tapped RICHARDS, LAYTON & FINGER, P.A., as counsel;
WINTER HARBOR, LLC, as restructuring advisor; and IMPERIAL CAPITAL,
LLC, as investment banker. KURTZMAN CARSON CONSULTANTS LLC is the
claims agent.
The Boeing Company, as DIP Agent, is represented by:
Alan D. Smith, Esq.
Perkins Coie LLP
E-mail: ADSmith@perkinscoie.com
- and -
Kenneth J. Enos, Esq.
Young Conaway Stargatt & Taylor, LLP
E-mail: kenos@ycst.com
* * *
As reported by Troubled Company Reporter on June 2, 2021, Judge
Brendan Linehan Shannon of the U.S. Bankruptcy Court for the
District of Delaware authorized the bidding procedures proposed by
TECT Aerospace Group Holdings Inc. and affiliates in connection
with the auction sale of their Everett, Washington assets.
Deadline to file offer is on June 10, 2021, at 4:00 p.m. (ET). In
the event the Debtors receive, on or before the Bid Deadline, one
or more Qualified Bids in addition to the Stalking Horse Bid, the
Debtors will conduct a virtual Auction beginning at 10:00 a.m. (ET)
on June 14, 2021. A sale hearing will take place on June 24, 2021,
at 11:00 a.m. (ET). Objections to sale, if any, are due on June
10, 2021, at 4:00 p.m. (ET).
TELEMACHUS LLC: Has Until June 29 to File Plan & Disclosures
------------------------------------------------------------
Judge Jacqueline Cox of the U.S. Bankruptcy Court for the Northern
District of Illinois has entered an order within which the deadline
for debtor Telemachus, LLC, to file its Chapter 11 Plan and
Disclosure Statement is extended to June 29, 2021.
A copy of the order dated June 8, 2021, is available at
https://bit.ly/2SsQkmP from PacerMonitor.com at no charge.
The Debtor is represented by:
Ben Schneider, Esq.
Schneider & Stone
8424 Skokie Blvd., Suite 200
Skokie, IL 60077
Phone: 847-933-0300
Email: ben@windycitylawgroup.com
About Telemachus LLC
Telemachus, LLC is a single asset real estate debtor (as defined in
11 U.S.C. Section 101(51B)). It is the owner of fee simple title
to a property located at 769 W. Jackson Blvd., Chicago, Illi.,
having an appraised value of $3 million.
Telemachus filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 20-21374) on Dec.
11, 2020. The petition was signed by Marc Washor, managing member
of Baklava, LLC (owner of Debtor). At the time of filing, the
Debtor disclosed $3,226,189 in assets and $2,228,372 in
liabilities. Judge Jack B. Schmetterer oversees the case.
Schneider & Stone represents the Debtor as counsel.
TELEPHONE AND DATA: Egan-Jones Keeps B+ Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on May 27, 2021, maintained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Telephone and Data Systems, Inc.
Headquartered in Chicago, Illinois, Telephone and Data Systems,
Inc. is a diversified telecommunications company.
TERRESTRIAL DEVELOPMENT: Seeks to Hire Sentry Residential as Broker
-------------------------------------------------------------------
Terrestrial Development, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
Sentry Residential to assist in the sale of its real property at
16861 Sheldon Road, Los Gatos, Calif.
The firm will be paid a commission of 5.5 percent of the sales
price.
Paul Lazaga, a partner at Sentry Residential, 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:
Paul Lazaga
Sentry Residential
520 N Coast Hwy Suite 100
Oceanside, CA 92054
Tel: (800) 203-7030
About Terrestrial Development
Los Gatos, Calif.-based Terrestrial Development, LLC filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Calif. Case No. 21-50031) on Jan. 11, 2021.
Joseph Wolff, managing member, signed the petition. In the
petition, the Debtor disclosed assets of between $1 million and $10
million and liabilities of the same range. Judge Stephen L.
Johnson oversees the case. E. Vincent Wood, Esq., serves as the
Debtor's legal counsel.
TIGER OAK: Deal on Cash Collateral Access OK'd
----------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota entered an
order approving the fifth stipulation that Edwin H. Caldie, Chapter
11 Trustee for Tiger Oak Media, Incorporated, has entered into, on
behalf of the Debtor, with Choice Financial Group and the Official
Committee of Unsecured Creditors with respect to the use of cash
collateral.
As previously reported by the Troubled Company Reporter, the
parties agreed:
* The Trustee is authorized to use Choice Financial's cash
collateral, according to the budget, through and including July 31,
2021;
* Pending an order approving the fifth stipulation, Choice
Financial agrees to the Trustee's continued use of the cash
collateral from June 1 through the earlier of the date the Court
enters an order on the fifth stipulation, or June 10;
* During the term of the fifth stipulation, the Trustee will not
make payments to Choice Financial and the latter will not divert
any funds from any accounts held by the Debtor without further
Court order;
* Choice Financial, the Committee, and the Trustee agree that
the Challenge Period (only as to the Trustee) and Guaranty
Challenge Period (as to the Trustee and the Committee) will be
extended through July 31, 2021.
The Court says the Stipulation is approved in its entirety and the
Trustee is authorized to perform thereunder and use cash collateral
as provided in the Stipulation and 11 U.S.C. section 363(c)(2).
A copy of the order is available for free at https://bit.ly/2TizG9F
from PacerMonitor.com.
About Tiger Oak Media
Tiger Oak Media, Incorporated, is a regional and national publisher
of books, magazines, media and events that appeal to targeted
audiences.
Tiger Oak Media sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Minn. Case No. 19-43029) on Oct. 7,
2019. In the petition signed by its CEO Craig Bednar, the Debtor
was estimated to have assets of less than $50,000 and liabilities
of less than $10 million.
The Hon. Michael E. Ridgway is the case judge.
The Debtor tapped Steven Nosek, Esq. and Yvonne Doose, Esq., as
bankruptcy attorneys; Lurie, LLP as accountant; and Integrated
Consulting Services, LLC as financial consultant.
The U.S. Trustee for Region 12 appointed creditors to serve on the
official committee of unsecured creditors on Oct. 22, 2019. The
committee tapped Bassford Remele, P.A., as its legal counsel, and
Platinum Management, LLC as its financial advisor.
Choice Financial Group, as Lender, is represented by Manty &
Associates, PA.
TIVITY HEALTH: S&P Rates New Revolving Credit Facility 'B+'
-----------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level and '3' recovery
ratings to U.S.-based health and fitness program provider Tivity
Health Inc.'s proposed $100 million revolving credit facility due
2026 and $400 million first-lien term loan due 2028. The '3'
recovery rating indicates S&P's expectation for meaningful recovery
(50%-70%; rounded estimate: 65%) in the event of a payment
default.
Tivity (B+/Positive/--) intends to use the net proceeds from the
new first-lien term loan and cash from the balance sheet to
refinance its existing outstanding $96.7 million first-lien term
loan A, $333.2 million term loan B, and transaction expenses. The
transaction modestly reduces leverage and extends the company's
weighted-average debt maturity to 6.8 years from 4.7 years. The
positive outlook reflects the potential that S&P will upgrade
Tivity if the company demonstrates a better-than-anticipated
operating performance and we expect it to sustain S&P Global
Ratings-adjusted debt to EBITDA of less than 3x.
Issue Ratings--Recovery Analysis
Key analytical factors
-- S&P said, "Our simulated default scenario contemplates a
default occurring in 2024 precipitated by a drop in EBITDA stemming
from pricing pressure, contract losses, and greater competition.
Given the company's extensive relationships with health plans and
fitness centers, we believe it would remain a viable business and
would therefore be reorganized rather than liquidated following a
payment default. As such, we value Tivity as a going concern, using
a 5.5x multiple of our projected emergence EBITDA."
-- Tivity is the borrower under the first-lien facilities. The
first-lien lenders benefit from a first-priority lien on
substantially all tangible and intangible assets of the borrower
and guarantors, including a perfected first-priority pledge of
substantially all the equity interests owned by the borrower or any
guarantor with certain exceptions.
Simulated default assumptions
-- Simulated year of default: 2024
-- EBITDA at emergence: $63.5 million
-- EBITDA multiple: 5.5x
-- Gross recovery value: About $350 million
Simplified waterfall
-- Valuation split (obligors/nonobligors): 100%/0%
-- Net recovery value: $332 million
-- Value available to first-lien debt: $332 million
-- Secured first-lien debt claims: $492 million
--Recovery expectations: 50%-70% (rounded estimate: 65%)
All debt amounts include six months of prepetition interest.
TRMA FRISCO: Seeks to Hire DeMarco Mitchell as Legal Counsel
------------------------------------------------------------
TRMA Frisco Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Eastern District of Texas to employ
DeMarco Mitchell, PLLC to serve as legal counsel in their Chapter
11 cases.
The firm's services include:
a. formulating, negotiating, and proposing a plan of
reorganization;
b. taking all necessary actions to protect and preserve the
estate, including the prosecution of actions on its behalf, the
defense of any actions commenced against it, negotiations
concerning all litigation in which it is involved, and objecting to
claims;
c. preparing legal papers; and
d. other legal services necessary to administer the case.
The firm's hourly rates are as follows:
Attorneys $350 per hour
Paralegals $125 per hour
DeMarco Mitchell will receive reimbursement for out-of-pocket
expenses incurred. The firm received a retainer of $6,738 from the
Debtor.
Robert DeMarco, Esq., a partner at DeMarco Mitchell, 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:
Robert T. DeMarco, Esq.
Michael S. Mitchell, Esq.
DeMarco Mitchell, PLLC
1255 W. 15th Street, 805
Plano, TX 75075
Tel: (972) 578-1400
Fax: (972) 346-6791
Email: robert@demarcomitchell.com
mike@demarcomitchell.com
About TRMA Frisco Inc.
TRMA Frisco Inc. filed a Chapter 11 bankruptcy petition (Bankr.
E.D. Texas Case No. 21-40697) on May 7, 2021, disclosing total
assets of up to $500,000 and total liabilities of up to $1 million.
Judge Brenda T. Rhoades oversees the case. The Debtor is
represented by DeMarco Mitchell, PLLC.
U.S. CELLULAR: Egan-Jones Keeps BB- Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company, on May 26, 2021, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by United States Cellular Corporation.
Headquartered in Chicago, Illinois, United States Cellular
Corporation provides wireless telecommunications services.
U.S. CONCRETE: S&P Places 'BB-' ICR on CreditWatch Positive
-----------------------------------------------------------
S&P Global Ratings placed all its ratings on U.S. Concrete Inc.
(USCR), including its 'BB-' issuer credit rating, on CreditWatch
with positive implications.
S&P said, "The CreditWatch placement reflects our view that the
transaction will enhance USCR's credit position because it is being
acquired by a much larger and more lowly leveraged company.
"The CreditWatch placement reflects our view that USCR's credit
quality will likely benefit from its acquisition by Vulcan, which
we rate higher than USCR. Per the agreement, VMC will merge with
USCR at a transaction price of $74 per share and including USCR's
debt. We will raise our ratings on USCR if its debt remains
outstanding. We will likely discontinue our ratings if its debt is
retired."
UGI CORPORATION: Egan-Jones Keeps BB+ Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company, on May 26, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by UGI Corporation.
Headquartered in King of Prussia, Pennsylvania, UGI Corporation
distributes and markets energy products and services.
UNDER ARMOUR: Egan-Jones Keeps B+ Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Under Armour, Inc.
Headquartered in Baltimore, Maryland, Under Armour, Inc. develops,
markets, and distributes branded performance products for men,
women, and youth.
UNITED RENTALS: Egan-Jones Keeps BB- Senior Unsecured Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company, on May 24, 2021, maintained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by United Rentals, Inc.
Headquartered in Stamford, Connecticut, United Rentals, Inc.,
through its subsidiary, is an equipment rental company operating a
network of locations in the United States and Canada.
US CONSTRUCTION SERVICES: Taps Patout Law as Special Counsel
------------------------------------------------------------
US Construction Services, LLC seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
Patout Law, PLLC as special counsel.
The firm will provide these services:
a. assisting the Debtor in analyzing and prosecuting claims
owned by the estate against third parties;
b. preparing and filing pleadings to pursue the estate's claims
against third parties;
c. conducting examinations of witnesses, claimants and other
parties in interest in connection with such litigation;
d. representing the Debtor in any adversary proceedings and
other proceedings before the court and in any other judicial or
administrative proceeding in which the claims may be affected;
e. collecting any judgment that may be entered in the
contemplated litigation;
f. handling any appeals that may result from the contemplated
litigation; and
g. other legal services.
Patout Law will be paid a contingency fee of 25 percent of the
amount recovered after deducting costs and expenses. The firm will
also receive reimbursement for out-of-pocket expenses incurred.
John Patout, Jr., Esq., a partner at Patout Law, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
John J. Patout, Jr.
Patout Law, PLLC
5850 San Felipe Street, Suite 500
Houston, TX 77057
Tel: (346) 888-4730
Fax: (346) 327-2510
About US Construction Services
US Construction Services, LLC, a Dickinson, Texas-based residential
building construction company, sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Texas Case No. 21-80029) on
Feb. 19, 2021. Whitney Jones, the managing member, signed the
petition. In the petition, the Debtor declared total assets of
$2,400,000 and total liabilities of $1,262,826. Judge Jeffrey P.
Norman oversees the case.
Zendeh Del & Associates, PLLC and Patout Law, PLLC serve as the
Debtor's bankruptcy counsel and special litigation counsel,
respectively.
Veritex Community Bank, lender, is represented by Crady Jewett
Mcculley & Houren LLP.
VBI VACCINES: Shareholders Elect Seven Directors
------------------------------------------------
VBI Vaccines Inc.'s shareholders elected seven directors and
approved other company proposals at the annual general meeting of
shareholders held on June 9, 2021.
At the meeting, the shareholders elected Steven Gillis, Jeffrey R.
Baxter, Damian Braga, Joanne Cordeiro, Michel De Wilde, Blaine H.
McKee, and Christopher McNulty as directors to serve until the next
annual meeting of shareholders and until his successor has been
elected and qualified, or until his earlier death, resignation, or
removal.
The shareholders also voted in favor of appointing EisnerAmper LLP
as VBI's independent registered public accounting firm for the
ensuing year and authorizing the audit committee of VBI's board of
directors to fix its remuneration.
About VBI Vaccines Inc.
Cambridge, Massachusetts-based VBI Vaccines Inc. --
http://www.vbivaccines.com-- is a biopharmaceutical company driven
by immunology in the pursuit of powerful prevention and treatment
of disease. Through its innovative approach to virus-like
particles, including a proprietary enveloped VLP platform
technology, VBI develops vaccine candidates that mimic the natural
presentation of viruses, designed to elicit the innate power of the
human immune system. VBI is committed to targeting and overcoming
significant infectious diseases, including hepatitis B,
coronaviruses, and cytomegalovirus (CMV), as well as aggressive
cancers including glioblastoma (GBM). VBI is headquartered in
Cambridge, Massachusetts, with research operations in Ottawa,
Canada, and a research and manufacturing site in Rehovot, Israel.
VBI Vaccines reported a net loss of $46.23 million for the year
ended Dec. 31, 2020, compared to a net loss of $54.81 million for
the year ended Dec. 31, 2019. As of March 31, 2021, the Company
had $222.89 million in total assets, $23.82 million in total
current liabilities, $19.06 million in total non-current
liabilities, and $180.01 million in total stockholders' equity.
VF CORPORATION: Egan-Jones Keeps BB+ Senior Unsecured Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by VF Corporation.
Headquartered in Denver, Colorado, VF Corporation is an
international apparel company.
VISHAY INTERTECHNOLOGY: Egan-Jones Keeps BB+ Sr. Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on May 25, 2021, maintained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Vishay Intertechnology, Inc.
Headquartered in Malvern, Pennsylvania, Vishay Intertechnology,
Inc. manufactures a broad line of passive and discreet active
electronic components, particularly resistors, capacitors,
inductors, diodes, and transistors.
WARRIOR MET: S&P Alters Outlook to Negative, Affirms 'B+' ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based Warrior Met
Coal Inc. to negative from stable and affirmed its 'B+' issuer
credit rating and its 'BB' issue-level rating on its senior secured
notes.
S&P said, "The negative outlook reflects the increased likelihood
that we could downgrade the company in the next 12 months due to a
potential production disruption and higher operating costs stemming
from the ongoing labor strike.
"We expect that U.S.-based Warrior Met Coal Inc.'s production will
decline materially due to the United Mine Workers of America (UMWA)
labor strike, which began in April 2021.
"In addition, ongoing restrictions on Chinese imports could lead to
weaker year-over-year price realizations--at least in the first
half of this year. We now expect the company's adjusted leverage to
be between 3.5x and 4.0x for fiscal year 2021, compared to our
previous expectation of about 2x.
"We expect Warrior's adjusted leverage to be in the 3.5x-4.0x range
for fiscal year 2021 due to a drop in its sales volumes stemming
from the labor strike at several important sites. We estimate the
company will sell approximately 4.9 million-5.5 million short tons
of metallurgical (met) coal in 2021, which would be a 30% drop from
2020. Since the onset of the strike, which began at the end of the
first quarter of 2021, Warrior has idled mine No. 4 and is running
mine No. 7 at reduced capacity. Given the recent build-up in its
inventory (1.1 million metric tons as of the end of the first
quarter of 2021) and assuming mine No. 7 continues to operate
without disruption, we believe the company will be able to meet its
production target, albeit at reduced capacity, of about 2 million
short tons for the rest of the year at mine no. 7.
"We now project Warrior's 2021 adjusted EBITDA of $135 million-$145
million will be about 40% lower than we previously expected. This
follows its weak performance in fiscal year 2020 when the company
generated about $102 million of EBITDA, which translated to
reported adjusted leverage of nearly 5x. While the global demand
for steel is recovering and steel prices continue to rally, we note
that Chinese restrictions on Australian imports remain in place.
Therefore, the Australian premium low-volatility index has not
reached its historical average price levels. We assume Warrior's
price realization in 2021 will be slightly higher than in 2020,
under current pricing conditions and despite the weakness in its
prices in the first half of 2021, given our forecast for higher
prices in the second half of the year (at about $130 per metric
ton).
"We project the company's free operating cash flow (FOCF) will
remain depressed in 2021, which will diminish its cash flow cushion
at the current rating. We expect Warrior to generate FOCF of $40
million-$60 million in 2021, which is well below its 2019 levels of
$425.5 million. We assume the company will reduce its capital
spending on the idled mine No. 4 and delay its development spending
on the Blue Creek mine. In addition, we believe its lack of
near-term debt maturities and required debt amortization payments
will provide it with some flexibility during this period of reduced
production and low prices. However, we continue to incorporate the
risks associated with Warrior's relatively small size ($550
million-$600 million of forecast revenue in 2021) and considerable
asset concentration (currently only operating one mine -- No. 7 at
reduced capacity). These risks lead us to an issuer credit rating
that is one notch lower than our business risk and financial risk
assessments would otherwise imply."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Human Capital Management
A strained labor relationship with the United Mine Workers of
America (UMWA), the labor union that represents approximately 67%
of Warrior's employees, could negatively impact company's
productivity, profitability, and ultimately its ability to fulfil
its customer commitments. If the strike is prolonged, Warrior could
face continued low production and elevated unit costs. Moreover,
S&P believes that persistent risks to worker safety in met coal
mining could make the negotiation of a new collective bargaining
agreement unusually challenging amid tight labor conditions.
The negative outlook on Warrior reflects S&P's expectation that its
adjusted debt leverage will remain elevated in the 3.5x-4.0x range
in 2021, which compares with our previous estimate of about 2x.
Recent events have diminished any cushion against a downgrade,
including due to a potential production disruption and higher
operating costs stemming from the ongoing labor strike.
S&P would lower its rating on Warrior in the next 12 months if its
leverage remains at or above 4x. This could occur if :
-- The strike is prolonged and leads to higher operating costs,
labor shortages, and reduced production; and
-- Prolonged Chinese import restrictions cause the Australian
premium low volatility index to decline below its current
expectations for the next 12 months.
S&P could revise its outlook on Warrior to stable in the next 12
months if adjusted leverage declines comfortably below 4x, which
S&P expect would occur if:
-- It reaches a new collective bargaining agreement with its union
labor force that does not materially reduce its profitability,
assuming metallurgical prices return close to historical averages;
and
-- The company restarts its idled mine and restores its production
to normal levels (an annualized run rate of about 7 million short
tons).
WASHINGTON PRIME: Forbearance Period to Expire Today
----------------------------------------------------
The forbearance period under Washington Prime Group, L.P.'s
forbearance agreements with certain beneficial owners of its senior
notes due 2024 and under forbearance agreements with certain
lenders under the agreements governing its corporate credit
facilities will expire today, at 11:59 p.m., Eastern time.
Washington Prime Group, L.P. is the operating partnership of
Washington Prime Group Inc. The Company is continuing to engage in
negotiations and discussions with the noteholders and lenders to
restructure its capital structure.
About Washington Prime Group
Headquartered in Columbus Ohio, Washington Prime Group Inc. --
http://www.washingtonprime.com-- is a retail REIT and a recognized
company in the ownership, management, acquisition and development
of retail properties. The Company combines a national real estate
portfolio with its expertise across the entire shopping center
sector to increase cash flow through rigorous management of assets
and provide new opportunities to retailers looking for growth
throughout the U.S. Washington Prime Group is a registered
trademark of the Company.
* * *
As reported by the TCR on May 24, 2021, Fitch Ratings downgraded
the Long-Term Issuer Default Rating (IDR) of Washington Prime
Group, Inc. and Washington Prime Group, LP (collectively WPG) to
'RD' from 'C'. The downgrade of WPG's IDR to 'RD' reflects the
multiple extensions of the initial forbearance agreement that
followed the March 16, 2021 expiration of the 30-day grace period
that resulted from a missed interest payment on Feb. 15, 2021.
In March 2021, S&P Global Ratings lowered its issuer credit rating
on Washington Prime Group Inc. to 'D' from 'CC' and its issue-level
ratings on its unsecured debt and preferred stock to 'D' from 'C'.
The downgrade reflects Washington Prime's announcement that it will
not make the $23.2 million interest payment due Feb. 15, 2021, on
its 6.45% senior notes in the 30-day grace period, which will lead
to an event of default on March 17, 2021.
As reported by the TCR on June 1, 2020, Moody's Investors Service
downgraded the corporate family ratings of Washington Prime Group,
L.P. to Caa3 from Caa1.
WC 6TH: Seeks to Tap Fishman Jackson Ronquillo as Legal Counsel
---------------------------------------------------------------
WC 6th and Rio Grande, LP seeks approval from the U.S. Bankruptcy
Court for the Western District of Texas to employ Fishman Jackson
Ronquillo, PLLC to serve as legal counsel in its Chapter 11 case.
The firm will render these legal services:
(a) assisting the Debtor in carrying out its duties under the
Bankruptcy Code;
(b) consulting with the U.S. trustee, any statutory committee
that may be formed, and all other creditors and parties in interest
concerning administration of the case;
(e) assisting in the possible sale of the Debtor's assets;
(f) preparing legal papers;
(g) assisting the Debtor in connection with formulating and
confirming a Chapter 11 plan, if necessary;
(h) assisting the Debtor in analyzing and appropriately
treating the claims of creditors;
(i) appearing before the bankruptcy court or other courts
having jurisdiction over any matter associated with the case; and
(j) other necessary legal services.
The hourly rates of the firm's attorneys and staff range as
follows:
Attorneys $300 - $450 per hour
Paraprofessionals $135 - $175 per hour
The principal attorney and paralegal designated to represent the
Debtor and their agreed hourly rates are as follows:
Mark H. Ralston, Esq. $400 per hour
Shirley James, Paralegal $140 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received a retainer of $25,000 from the Debtor's
affiliate.
Mark Ralston, Esq., an attorney at Fishman Jackson Ronquillo,
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 through:
Mark H. Ralston, Esq.
Fishman Jackson Ronquillo, PLLC
Three Galleria Tower
13155 Noel Road, Suite 700
Dallas, TX 75240
Telephone: (972) 419-5544
Facsimile: (972) 419-5500
Email: mralston@fjrpllc.com
About WC 6th and Rio Grande, LP
Texas-based WC 6th and Rio Grande, LP filed its voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D.
Texas Case No. 21-10359) on May 4, 2021. At the time of the
filing, the Debtor disclosed total assets of up to $50 million and
total liabilities of up to $10 million. Judge Tony M. Davis
oversees the case. Mark H. Ralston, Esq., at Fishman Jackson
Ronquillo, PLLC, serves as the Debtor's legal counsel.
WESCO INTERNATIONAL: Egan-Jones Keeps B+ Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company, on May 26, 2021, maintained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by WESCO International, Inc.
Headquartered in Pittsburgh, Pennsylvania, WESCO International,
Inc. distributes electrical products and other industrial
maintenance, repair, and operating supplies.
YC ATLANTA: Christopher Tierney Okayed as Chapter 11 Examiner
-------------------------------------------------------------
Nancy J. Gargula, U.S. Trustee for Region 21, appointed Christopher
Tierney as examiner for YC Atlanta Hotel, LLC.
Judge Barbara Ellis-Monro, on June 10, 2021, approved Mr. Tierney's
appointment.
Judge Ellis-Monro previously directed the U.S. Trustee to appoint
an examiner in the Debtor's case, denying the motions filed by the
U.S. Trustee and creditor Access Point Financial, LLC to appoint a
Chapter 11 Trustee in the case, or in the alternative, to convert
the Debtor's case to one under Chapter 7. The Debtor sought the
Court's reconsideration of the prior ruling by filing a motion to
reconsider and motion to amend judgment.
A copy of the current order is available for free at
https://bit.ly/3wg6oXY from PacerMonitor.com
A copy of the notice of appointment is available at
https://bit.ly/3xdeFMb from PacerMonitor.com at no charge.
Mr. Tierney's contact information:
Christopher Tierney
Moore Colson CPAs & Advisors
600 Galleria Parkway SE, Ste. 600
Atlanta, GA 30339
Telephone: 770-989-0028
Email: ctierney@moorecolson.com
About YC Atlanta Hotel
YC Atlanta Hotel, LLC, a hotel owner and operator in College Park,
Ga., sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Ga. Case No. 21-50964) on Feb. 3, 2021. Baldev Johal,
managing member, signed the petition. In the petition, the Debtor
disclosed total assets of up to $10 million and total liabilities
of up to $50 million. Judge Barbara Ellis-Monro oversees the case.
Stone & Baxer, LLP is the Debtor's legal counsel.
[*] Puerto Rico Bankruptcy Cases Down by 18.3% in May 2021
----------------------------------------------------------
Michelle Kantrow-Vázquez of News in My Business reports that the
U.S. Bankruptcy Court for the District of Puerto Rico received
1,718 petitions from January to May 2021, when filings were down
18.3% in comparison to the same five-month period in 2020,
according to information provided by local research firm Boletín
de Puerto Rico.
When broken down into categories, about 711 of those petitions were
under Chapter 7, through which individuals, corporations or
self-owned businesses seek a total liquidation of assets. The
number jumped by 41.4% year-over-year during the first five months
of 2021.
Under this arrangement, the bankruptcy court appoints a trustee who
oversees the liquidation of assets, so the debtor is freed from
their obligations.
Boletín de Puerto Rico’s research also confirmed that from
January to May 2021, attorneys were the most active in seeking
bankruptcy protection, with a combined reported debt exceeding $2.8
million split between five professionals. Bakeries followed, with
$1.2 million in debt among three establishments, and three farmers
filing to address $1.1 million in obligations. Seven restaurants
sought Chapter 7 protection with a combined $923,070 in debt, and
three hotels followed, with $875,158 in accrued debt.
So far in 2021, a total of 89 businesses have sought bankruptcy
protection from the court, representing a 7.2% increase
year-over-year. San Juan, Bayamón, Caguas, Carolina, and Hatillo
were the five towns with the highest percentage of commercial
bankruptcy filings.
[^] BOND PRICING: For the Week from June 7 to 11, 2021
------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
Acorda Therapeutics Inc ACOR 1.750 97.750 6/15/2021
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Basic Energy Services Inc BASX 10.750 19.617 10/15/2023
Basic Energy Services Inc BASX 10.750 19.617 10/15/2023
Briggs & Stratton Corp BGG 6.875 8.458 12/15/2020
Buffalo Thunder
Development Authority BUFLO 11.000 50.909 12/9/2022
Cardinal Health Inc CAH 3.200 102.771 6/15/2022
Caterpillar Financial
Services Corp CAT 2.150 99.767 6/15/2021
Chinos Holdings Inc CNOHLD 7.000 0.332 N/A
Chinos Holdings Inc CNOHLD 7.000 0.332 N/A
Citigroup Inc C 3.176 99.229 6/20/2021
Coventry Health Care Inc AET 5.450 99.843 6/15/2021
Dean Foods Co DF 6.500 2.000 3/15/2023
Dean Foods Co DF 6.500 1.100 3/15/2023
ESH Hospitality Inc STAY 4.625 107.355 10/1/2027
Emera US Finance LP EMACN 2.700 99.995 6/15/2021
Energy Conversion Devices ENER 3.000 7.875 6/15/2013
Energy Future Competitive
Holdings Co LLC TXU 0.919 0.072 1/30/2037
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 35.674 7/15/2023
Exela Intermediate LLC /
Exela Finance Inc EXLINT 10.000 35.723 7/15/2023
Federal Home Loan Mortgage FHLMC 0.400 99.874 12/15/2022
Federal Home Loan Mortgage FHLMC 0.300 99.863 9/15/2023
Fleetwood Enterprises Inc FLTW 14.000 3.557 12/15/2011
Ford Motor Credit Co LLC F 2.500 99.554 6/20/2021
Ford Motor Credit Co LLC F 2.600 99.573 6/20/2021
Ford Motor Credit Co LLC F 2.650 99.577 6/20/2021
Ford Motor Credit Co LLC F 2.750 99.614 6/20/2021
Ford Motor Credit Co LLC F 3.000 99.627 6/20/2021
Ford Motor Credit Co LLC F 2.750 99.620 6/20/2021
GNC Holdings Inc GNC 1.500 1.250 8/15/2020
GTT Communications Inc GTT 7.875 12.581 12/31/2024
GTT Communications Inc GTT 7.875 11.437 12/31/2024
Goodman Networks Inc GOODNT 8.000 40.507 5/11/2022
Hornbeck Offshore Services HOSS 5.000 0.902 3/1/2021
Hornbeck Offshore Services HOSS 5.875 0.902 4/1/2020
Hughes Satellite Systems SATS 7.625 99.893 6/15/2021
Lam Research Corp LRCX 2.800 99.897 6/15/2021
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 28.456 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
National Rural Utilities
Cooperative Finance Corp NRUC 2.500 99.773 6/15/2021
Navajo Transitional
Energy Co LLC NVJOTE 9.000 65.000 10/24/2024
Nine Energy Service Inc NINE 8.750 45.884 11/1/2023
Nine Energy Service Inc NINE 8.750 45.011 11/1/2023
Nine Energy Service Inc NINE 8.750 43.880 11/1/2023
OMX Timber Finance
Investments II LLC OMX 5.540 0.883 1/29/2020
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Rolta LLC RLTAIN 10.750 1.904 5/16/2018
Sears Holdings Corp SHLD 6.625 1.444 10/15/2018
Sears Holdings Corp SHLD 6.625 1.444 10/15/2018
Sears Roebuck Acceptance SHLD 7.500 0.520 10/15/2027
Sears Roebuck Acceptance SHLD 6.500 1.050 12/1/2028
Sears Roebuck Acceptance SHLD 7.000 0.689 6/1/2032
Sears Roebuck Acceptance SHLD 6.750 0.877 1/15/2028
Sempra Texas Holdings Corp TXU 5.550 13.500 11/15/2014
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Tutor Perini Corp TPC 2.875 100.000 6/15/2021
Voyager Aviation Holdings
LLC / Voyager Finance Co VAHLLC 9.000 90.000 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
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Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors.
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