/raid1/www/Hosts/bankrupt/TCR_Public/210714.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, July 14, 2021, Vol. 25, No. 194
Headlines
2408 W. KENNEDY: Gets OK to Hire Oscher Consulting as Accountant
6525 BELCREST: Seeks to Hire Robinson Brog as Legal Counsel
ALLIED ESPORTS: Completes Sale of World Poker Tour for $105 Million
ARCHBISHOP OF AGANA: Has Deal on Cash Collateral Access
ASHBROOKE DEVELOPMENT: Seeks to Hire Stevenson & Bullock as Counsel
AUTOMOTIVE PARTS: Case Summary & 20 Largest Unsecured Creditors
BETHEL CHURCH OF MIAMI: Taps Amanda S. Bhikhari as Special Counsel
BOSTON SOLUTIONS: Manewitz Weiker's Judy Weiker Named as Trustee
BOSTON SOLUTIONS: Seeks to Use Cash Collateral
CHARM HOSPITALITY: Seeks to Hire Daniel Watson as Appraiser
COLUMBIA INDUSTRIES: Taps Vanden Bos & Chapman as Legal Counsel
CONTAINER STORE: S&P Affirms 'B' ICR on Reduced Sponsor Ownership
DOUBLE D GROUP: Updates Mechanic's Lien Claims Details
EAST WEST AVL: Gets OK to Hire Ivey McClellan as Bankruptcy Counsel
EDWIN P. RANDOLPH: Amy Harris of Stichter Riedel Named as Trustee
EDWIN P. RANDOLPH: Seeks to Use Cash Collateral
ENERGY FUTURE: Nextera Asks for 2 Months to Produce Docs
EVERGREEN DEVELOPMENT: Wins Cash Collateral Access Thru Sept 15
FILLIT INC: All Classes Unimpaired in Combined Plan & Disclosures
FOX SUBACUTE: Gets OK to Hire German Gallagher as Special Counsel
FUELCELL ENERGY: Wins Case Versus Posco Energy
GTT COMMUNICATIONS: Deadline to File Financials Extended to July 20
HH ACQUISITION: Files Emergency Bid to Use Cash Collateral
INTELSAT SA: Court Adjourns Bankruptcy Exit Plan
JEFFERIES FINANCE: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
KATERRA INC: Court Okays Ch. 11 Loan Deadline Extension
L'OCCITANE INC: Files Plan After Closing 40 Stores
LAREDO PETROLEUM: S&P Rates New $400MM Senior Unsecured Notes 'B'
LIMETREE BAY: Case Summary & 30 Largest Unsecured Creditors
LIMETREE BAY: Files Voluntary Chapter 11 Bankruptcy Petition
MADISON IAQ: S&P Alters Outlook to Negative, Affirms 'B' ICR
MALLINCKRODT PLC: Affiliates Tap PJT Partners as Financial Advisor
MCGRAW-HILL EDUCATION: S&P Affirms 'B-' ICR on Leveraged Buyout
MISTER CAR: S&P Upgrades ICR to 'B' on Debt Reduction Through IPO
MJ GRAPHICS INC: Taps Ken Wood & Associates as Accountant
NATIONAL JEWELRY: Taps Luis D. Flores Gonzales as Legal Counsel
NET ELEMENT: Inks Master Exchange Agreement With ESOUSA
NTH SOLUTIONS: Wins Cash Collateral Access Thru August 11
PARADISE REDEVELOPMENT: Wins Cash Collateral Access Thru Sept. 1
PEABODY ENERGY: S&P Cuts ICR to SD on Distressed Debt Repurchases
PERFORMANCE FOOD: S&P Affirms 'B+' ICR, Outlook Positive
PLATINUM CORRAL: Asks for 45-Day Extension of Plan Deadline
POLYMER INSTRUMENTATION: Gets OK to Hire Chen & Fan as Accountant
PROSPECT CAPITAL: S&P Rates New $100MM Preferred Stock 'BB'
PURDUE PHARMA: Asks Court to Hold $29 Million Employee Bonuses
PURDUE PHARMA: Examiner Taps Squire Patton Boggs as Legal Counsel
RESTORATIVE BRAIN: Case Summary & 18 Unsecured Creditors
RIDGETOP AG: Seeks Cash Collateral Access
ROMANS HOUSE: Seeks to Borrow up to $500,000 from Pender West
RONNYS A-LA-CARTE: Case Summary & 6 Unsecured Creditors
S & A RETAIL: Unsecureds to Recover 2% and 15% Under Plan
SAMURAI MARTIAL: Files Emergency Bid to Use Cash Collateral
SD IMPORT: Affiliate Select Distributors Wants Cash Access
SD IMPORT: Mark Shapiro of Steinberg Shapiro Appointed as Trustee
SEMILEDS CORP: Incurs $57K Net Loss in Third Quarter
SHARITY MINISTRIES: Taps BMC Group as Administrative Advisor
SOLSTICE MARKETING: Court Confirms Reorganization Plan
SOUTH PARK: Seeks to Use Cash Collateral Thru Plan Confirmation
SOUTHWIRE CO: S&P Alters Outlook to Pos., Affirms 'BB' ICR
SPICE MUST FLOW: Gets OK to Hire Ivey McClellan as Legal Counsel
VCLC HOLDINGS: Claims Will be Paid from Property Sale/Refinance
VIAD CORP: S&P Assigned 'B' Issuer Credit Rating, Outlook Stable
WHATABRANDS LLC: S&P Affirms 'B' ICR, Outlook Stable
ZEFNIK LLC: Gets Approval to Hire Osipov Bigelman as Legal Counsel
[^] Claims Trading Report - June 2021
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2408 W. KENNEDY: Gets OK to Hire Oscher Consulting as Accountant
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2408 W. Kennedy, LLC received approval from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Oscher Consulting,
P.A. as its accountant.
The firm's services include consultations on business model,
projections for the Debtor's Chapter 11 plan, and related plan
inquiries.
Oscher will charge $425 per hour for its services.
Steven Oscher, the firm's accountant who will be providing the
services, disclosed in court filings that his firm is
"disinterested" within the meaning of Section 101(14) of the U.S.
Bankruptcy Code.
The firm can be reached through:
Steven S. Oscher, CPA
Oscher Consulting, P.A.
201 North Franklin Street, Suite 3150
Tampa, FL 33602
Tel: 813-229-8250
Fax: 813-229-8674
Email: info@oscherconsulting.com
About 2408 W. Kennedy
Tampa, Fla.-based 2408 W. Kennedy, LLC filed a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D.
Fla. Case No. 21-02578) on May 18, 2021. Christopher Scott,
managing member, signed the petition. At the time of the filing,
the Debtor disclosed total assets of up to $10 million and total
liabilities of up to $1 million.
Judge Michael G. Williamson oversees the case.
David Jennis, PA, doing business as Jennis Morse Etlinger, serves
as the Debtor's legal counsel. The Debtor also tapped Ferrell &
Company, P.A. and Oscher Consulting, P.A. as its accountants.
6525 BELCREST: Seeks to Hire Robinson Brog as Legal Counsel
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6525 Belcrest Road, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of New York to employ Robinson Brog
Leinwand Greene Genovese & Gluck, P.C. to serve as legal counsel in
its Chapter 11 case.
The firm's services include:
a. providing advice to the Debtor with respect to its powers and
duties under the Bankruptcy Code in the continued operation of its
business and the management of its property;
b. negotiating with creditors of the Debtor, preparing a plan of
reorganization and taking the necessary legal steps to consummate a
plan, including, if necessary, negotiations with respect to
financing a plan;
c. appearing before the various taxing authorities to work out a
plan to pay taxes owing in installments;
d. preparing legal documents;
e. appearing before the court; and
f. performing all other necessary legal services.
The firm's hourly rates are as follows:
Associates $410 to $500 per hour
Paralegals $250 to $285 per hour
Shareholders $475 to $775 per hour
Robinson will also be reimbursed for out-of-pocket expenses
incurred.
A. Mitchell Greene, Esq. a partner at Robinson, 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:
A. Mitchell Greene, Esq.
Robert M. Sasloff, Esq.
Steven B. Eichel, Esq.
Robinson Brog Leinwand Greene
Genovese & Gluck P.C.
875 Third Avenue
New York, NY 10022
Phone: (212) 603-6300
Fax: (212) 956-2164
Email: amg@robinsonbrog.com
rms@robinsonbrog.com
se@robinsonbrog.com
About 6525 Belcrest Road
New York-based 6525 Belcrest Road, LLC owns Metro Center III, a
commercial real property in Hyattsville, Md.
6525 Belcrest Road sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-10968) on May 19,
2021. Hemant Mehta, manager, signed the petition. In the
petition, the Debtor disclosed assets of between $1 million and $10
million and liabilities of the same range.
Judge Michael E. Wiles oversees the case.
Robinson Brog Leinwand Greene Genovese & Gluck P.C. serves as the
Debtor's legal counsel.
ALLIED ESPORTS: Completes Sale of World Poker Tour for $105 Million
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Allied Esports Entertainment, Inc., has completed the sale of the
entities comprising the World Poker Tour, to Element Partners, LLC.
The transaction was approved at a special meeting of the Company's
stockholders on July 1, 2021.
As previously announced, the purchase price of the transaction
totaled $105 million and included 100% of the outstanding capital
stock of each of the legal entities that collectively operated or
engaged in the Company's poker-related business and assets.
"This is a momentous day for AESE and an opportunity to focus on
growing the business in exciting and innovative ways," said Frank
Ng, CEO of Allied Esports Entertainment. "Congratulations to Adam
Pliska and his entire team at World Poker Tour as they too move
into a new, successful chapter."
Following the completion of the WPT Business transaction, the
Company is comprised of its esports business, Allied Esports, and
cash resources from the sale.
Allied Esports
Headquartered in Irvine, California, Allied Esports Entertainment,
Inc. -- http://www.alliedesportsent.com/-- operates a public
esports and entertainment company, consisting of the Allied Esports
and World Poker Tour businesses.
Allied Esports reported a net loss of $45.06 million for the year
ended Dec. 31, 2020, compared to a net loss of $16.74 million for
the year ended Dec. 31, 2019.
Melville, New York-based Marcum LLP, the Company's auditor since
2018, issued a "going concern" qualification in its report dated
April 12, 2021, citing that the Company has a working capital
deficiency from continuing operations, has incurred significant
losses and needs to raise additional funds to meet its obligations
and sustain its operations. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
ARCHBISHOP OF AGANA: Has Deal on Cash Collateral Access
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Archbishop of Agana, a Corporation Sole, also known as the Roman
Catholic Archdiocese of Agana, and the First Hawaiian Bank have
advised the U.S. District Court of Guam, Territory of Guam,
Bankruptcy Division, that they have reached an agreement regarding
the Debtor's cash collateral and now wish to memorialize the terms
of this agreement into an agreed order.
The parties stipulate and agree to entry of an order granting the
Debtor's continued use of cash collateral pursuant to a proposed
Budget and granting adequate protection in favor of FHB.
Prior to the Petition Date, the bank made loans to the Debtor. To
evidence the FHB Loans, the Debtor signed promissory notes dated as
of May 1, 2009 and August 23, 2010, in favor of the Secured
Creditor in the aggregate original principal amount of $9,229,854.
To secure the FHB Loans, the Debtor signed Security Agreements
dated as of May 1, 2009 and August 23, 2010 granting to the Secured
Creditor a lien on the personal property assets of the Debtor
described in the FHB Security Agreements.
The Debtor signed certain Negative Pledge Agreements in favor of
the Secured Creditor, and other documents evidencing the FHB Loans.
The amounts outstanding under the FHB Notes as of the Petition Date
were approximately $2,064,737.87 and $2,377,265.41, the monthly
pre-petition payments on the FHB Loans were $12,599 and $18,523,
respectively, and pre-petition, the FHB Loans were paid current.
The Debtor and the Secured Creditor have entered into seven
previous stipulations regarding the use of cash collateral since
the Petition Date.
The parties agree to extend the maturity dates of two loans to
December 23, 2021.
As of June 23, 2021, the amount due under the first loan was
$1,963,746.56 and the amount due under the second loan was
$2,134,239.07.
As adequate protection for the Debtor's use of property
constituting the Secured Creditor's Cash Collateral, the Debtor
will continue making regularly scheduled payments to the Secured
Creditor pursuant to the terms of the FHB Notes in the amounts of
$12,599 per month for the first loan, and $18,523 per month for the
second loan, which are the same monthly amounts paid pre-petition.
The Debtor grants the Secured Creditor replacement liens on and
security interests in and to all assets of the Debtor and the
proceeds thereof with the same priority in which the Secured
Creditor's pre-petition liens existed as of the Petition Date
pursuant to section 363 of the Bankruptcy Code, and the Secured
Creditor is entitled to all of the rights and benefits of section
552(b) of the Bankruptcy Code.
The Debtor grants the Secured Creditor an administrative expense
claim under sections 503(b)(1), 507(a) and 507(b) of the Bankruptcy
Code in the Debtor's case, in the priority of its liens, in the
amount by which the adequate protection afforded above proves to be
inadequate and any post-petition diminution in value of the
Collateral, capped by the amount of the Secured Creditor's claim.
The Replacement Liens are deemed perfected without the necessity
for filing or executing documents which might otherwise be required
under nonbankruptcy law for perfection of said security interests.
Unless extended by a writing executed by the Parties or by further
stipulation or order, the Debtor's right to use Cash Collateral
terminates on the earlier of (a) December 23, 2021, (b) five
business days following the Debtor's receipt from the Secured
Creditor of written notice that the Debtor is in default of this
Stipulation, which default remains uncured during such 5 business
day period and the Debtor has not raised any dispute that it is in
default, (c) upon entry of an order of the Court finding that the
Debtor is in default of the Stipulation, (d) unless filed by the
Debtor, in which case termination will occur upon the filing of the
motion, the date of entry of an order dismissing the Chapter 11
case or converting the Chapter 11 case to a Chapter 7 case, or
appointing a Chapter 11 trustee or examiner or other responsible
person in the Chapter 11 case, (e) the date of entry of an order
granting relief from the automatic stay for any purpose in respect
of any of the Collateral, or (f) the entry of an order reversing,
revoking, modifying, amending, staying, rescinding or supplementing
the Stipulation. On the Termination Date, the Secured Creditor's
consent to use Cash Collateral will be deemed withdrawn and the
Debtor may not continue to use Cash Collateral except upon the
Secured Creditor's written consent or further order of the Court.
A copy of the stipulation and the Debtor's July 2021 to June 2022
budget is available at
The Debtor projects $119,193 in total revenues and $114,040 in net
operating expenses for July 2021.
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.
ASHBROOKE DEVELOPMENT: Seeks to Hire Stevenson & Bullock as Counsel
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Ashbrooke Development, LLC seeks approval from the U.S. Bankruptcy
Code for the Eastern District of Michigan to employ Stevenson &
Bullock, P.L.C. to serve as legal counsel in its Chapter 11 case.
The firm received $7,500 for pre-bankruptcy fees and expenses for
its representation of the Debtor.
Elliot Crowder, Esq., a member of Stevenson & Bullock, disclosed in
a court filing that all members of the firm are disinterested
persons as defined by Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Elliot G. Crowderm Esq.
Stevenson & Bullock, P.L.C.
26100 American Drive, Suite 500
Southfield, MI 48034
Phone: (248) 354-7906
Fax: (248) 354-7907
Email: ecrowder@sbplclaw.com
About Ashbrooke Development
Ashbrooke Development, LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No.
21-45699) on July 6, 2021, disclosing $100,001 to $500,000 in
assets and $50,001 to $100,000 in liabilities. Stevenson &
Bullock, P.L.C. serves as the Debtor's legal counsel.
AUTOMOTIVE PARTS: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Automotive Parts Distribution International, LLC
3000 East Pioneer Parkway
Suite 160
Arlington, TX 76010
Business Description: The Debtor was established in January 2008
as a distribution and marketing company to
cover the North American aftermarket. It
offers radiators, condensers, fan
assemblies, heater cores, intercoolers,
heavy duty radiators, and fuel pump module
assemblies.
Chapter 11 Petition Date: July 12, 2021
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 21-41655
Debtor's Counsel: Rakhee V. Patel, Esq.
WINSTEAD PC
500 Winstead Building
2728 N. Harwood Street
Dallas, TX 75201
Tel: 214-745-5400
E-mail: rpatel@winstead.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Kevin O'Connor, CEO.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/KRSPRTI/Automotive_Parts_Distribution__txnbke-21-41655__0001.0.pdf?mcid=tGE4TAMA
BETHEL CHURCH OF MIAMI: Taps Amanda S. Bhikhari as Special Counsel
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The Bethel Church of Miami, Inc. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Florida to employ
Amanda S. Bhikhari PL as its special counsel and closing agent.
The firm will facilitate the closing of the proposed sales of the
Debtor's assets, including serving as escrow agent.
The firm's closing settlement rate is $995 for residential and
$1,795 for commercial. This rate does not include the cost of title
insurance and other closing-related clearance fees
As disclosed in court filings, Amanda Bhikhari is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Amanda S. Bhikhari, Esq.
Amanda S. Bhikhari, PL
151 NW 1st Avenue
Delray Beach, FL 33444
Office: (561) 455-7700
Fax: (561) 455-7701
Toll Free: (888) 455-7702
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. Goldstein & McClintock
LLLP, and Amanda S. Bhikhari, PL serve as the Debtor's bankruptcy
counsel and special counsel, respectively.
BOSTON SOLUTIONS: Manewitz Weiker's Judy Weiker Named as Trustee
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Judy Wolf Weiker is appointed as Subchapter V Trustee for Boston
Solution, Inc., and Chef JJ's Downtown LLC. Ms. Weiker is a
principal at Manewitz Weiker Associates, LLC.
Ms. Weiker will be compensated at $350 per hour for her services as
Subchapter V Trustee. She will also seek reimbursement for
expenses incurred in the discharge of her duty. Ms. Weiker
affirmed that she is a "disinterested person" as defined by Section
101(14) of the Bankruptcy Code.
Ms. Weiker's contact information:
Judy Wolf Weiker
P.O. Box 40185
Indianapolis, IN 46240
Telephone: 973-768-2735
Email: JWWtrustee@manewitzweiker.com
About Boston Solution, Inc.
Boston Solution, Inc., filed a petition under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No.
21-03158) on July 8, 2021. Affiliate, Chef JJ's Downtown LLC also
filed a petition under Subchapter V of Chapter 11 of the Bankruptcy
Code (Bank. S.D. Ind. Case No. 21-03159) on July 8.
On the Petition Date, Boston Solutions reported $100,000 to
$500,000 in both assets and liabilities. Chef JJ's reported up to
$50,000 in assets and $100,000 to $500,000 in liabilities. Jeremy
Boston, president, signed the petitions.
Judge Robyn L. Moberly is assigned to the cases. Rubin & Levin,
P.C. is tapped as counsel for the Debtors.
BOSTON SOLUTIONS: Seeks to Use Cash Collateral
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Boston Solution, Inc. and affiliate Chef JJ'S Downtown, LLC asked
the Bankruptcy Court for permission to use the cash collateral.
The Debtors' cash is currently being maintained at a bank account
with First Merchants Bank (FMB). The funds in the account are
primarily the proceeds of money loaned to Boston Solutions by FMB,
which is contingently guaranteed by the Small Business
Administration pursuant to the Paycheck Protection Program.
Boston Solutions obtained its first PPP loan of $80,900 funded by
FMB which funds Boston Solutions used in accordance with the SBA
and PPP's applicable rules and regulations, resulting in the SBA's
forgiveness of the first PPP loan on or around January 22, 2021.
Boston Solutions applied for a second PPP loan amounting to
$101,518 which was also funded by FMB. The second PPP loan has not
been forgiven and the balance of the loan proceeds remains in
Boston Solutions' depository account at FMB.
Swift Financial, LLC as servicing agent for Webbank obtained a
judgment against Boston Solutions in the Marion Superior Court, on
March 30, 2021 for $97,746. Swift has commenced a proceeding
supplemental and issued garnishment interrogatories to FMB. As a
result, the funds in Boston Solutions' FMB deposit account were
frozen as of May 7, 2021. Boston Solutions has been unable to
utilize the second PPP loan funds due to the freeze.
Corporate Service Company, as representative of an unnamed party,
filed a UCC financing statement on March 6, 2017 covering all of
Boston Solutions' personal property and general intangibles,
certain future receivables. CHTD also filed a UCC financing
statement on January 11, 2019 covering Boston Solutions' present
and future accounts, receivables, chattel paper, deposit accounts,
personal property, assets and fixtures, general intangibles,
instruments, equipment and inventory. On information, CHTD filed
the UCC financing statement on behalf of Swift.
In consideration for the proposed use and as adequate protection
for FMB's interest in the cash collateral, Boston Solutions
proposed that it will:
(a) maintain its depository account with FMB to preserve its
setoff rights up to the prepetition amount owed to FMB;
(b) use the proceeds of the second PPP loan in accordance with
the proposed budget and the SBA's requirements for loan
forgiveness;
(c) report its expenditures to FMB on a bi-weekly basis to show
its compliance;
(d) promptly apply for forgiveness with the SBA once the
conditions for forgiveness have been satisfied; and
(e) provide FMB with a replacement lien in the postpetition cash
collateral to the same extent, validity and priority of FMB's
prepetition lien.
A copy of the motion is available for free at
https://bit.ly/3htOdcd from PacerMonitor.com.
Counsel for Debtors:
Morgan A. Decker, Esq.
James E. Rossow, Esq.
Matthew T. Barr, Esq.
Rubin & Levin, P.C.
135 N. Pennsylvania Street, Ste. 1400
Indianapolis, IN 46204
Telephone: (317) 860-2890
Facsimile: (317) 453-2016
Email: mdecker@rubin-levin.net
jim@rubin-levin.net
mbarr@rubin-levin.net
About Boston Solution, Inc.
Boston Solution, Inc., filed a petition under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No.
21-03158) on July 8, 2021. Affiliate, Chef JJ's Downtown LLC also
filed a petition under Subchapter V of Chapter 11 of the Bankruptcy
Code (Bank. S.D. Ind. Case No. 21-03159) on July 8. The joint
administration of the cases is pending.
On the Petition Date, Boston Solutions reported $100,000 to
$500,000 in both assets and liabilities. Chef JJ's reported assets
of up to $50,000 and liabilities between $100,000 and $500,000.
Jeremy Boston, president, signed the petitions.
Judge Robyn L. Moberly is assigned to the cases. Rubin & Levin,
P.C. is tapped as counsel for the Debtors.
CHARM HOSPITALITY: Seeks to Hire Daniel Watson as Appraiser
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Charm Hospitality, LLC seeks approval from the U.S. Bankruptcy
Court for the District of Nevada to employ Daniel Watson, a
certified personal property appraiser in Henderson, Nev.
The Debtor requires an appraisal of its personal properties, which
include furniture and fixtures, in Elko, Nev.
The Debtor will pay Mr. Watson a flat fee of $1,200 for his
appraisal services and an hourly fee of $75 for additional
services, including preparing for and testifying at trial.
In a court filing, Mr. Watson disclosed that he has no connections
with the Debtor, creditors or any other party in interest.
Mr. Watson holds office at:
Daniel C. Watson
2531 Woodson Avenue
Henderson, NV 89052
About Charm Hospitality
Charm Hospitality, LLC is a company that owns and operates a
77-room hotel located at 3019 Idaho St., Elko, Nev. The hotel was
operated under the Wingate Inn By Wyndham Elko brand. The company
is owned by Paramjit Kaur.
Charm Hospitality filed a Chapter 11 petition (Bankr. D. Nev. Case
No. 20-50880) on Sept. 15, 2020. In the petition signed by Larry
Williams, corporate representative, the Debtor disclosed $3,099,287
in assets and $7,472,409 in liabilities. Judge Bruce T. Beesley
oversees the case. Kung & Brown serves as the Debtor's bankruptcy
counsel.
COLUMBIA INDUSTRIES: Taps Vanden Bos & Chapman as Legal Counsel
---------------------------------------------------------------
Columbia Industries Holding Company, LLC seeks approval from the
U.S. Bankruptcy Court for the District of Oregon to employ Vanden
Bos & Chapman, LLP to serve as legal counsel in its Chapter 11
case.
The firm's services include:
a. giving the Debtor legal advice with respect to its powers and
duties in the operation of its business;
b. instituting adversary proceedings that are necessary in the
case;
c. representing the Debtor generally in the Chapter 11
proceedings and assisting in the preparation of legal papers; and
d. performing all other necessary legal services.
The firm's hourly rates are as follows:
Attorneys $260 to $475 per hour
Legal Assistants $145 per hour
Vanden Bos & Chapman will also be reimbursed for out-of-pocket
expenses incurred.
Christopher Coyle, Esq., a partner at Vanden Bos & Chapman,
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:
Christopher N. Coyle, Esq
Vanden Bos & Chapman, LLP
319 SW Washington St., Ste. 520
Portland, OR 97204
Tel: (503) 241-4869
Fax: (503) 241-3731
Email: chris@vbcattorneys.com
About Columbia Industries Holding Company
Corvallis, Ore.-based Columbia Industries Holding Company, LLC
sought protection under Chapter 11 of the Bankruptcy Code (Bankr.
D. Ore. Case No. 21-61133) on June 30, 2021. In the petition
signed by William Tosheff, member manager, the Debtor disclosed
assets of between $1 million and $10 million and liabilities of the
same range. Judge Thomas M. Renn oversees the case. Vanden Bos &
Chapman, LLP is the Debtor's legal counsel.
CONTAINER STORE: S&P Affirms 'B' ICR on Reduced Sponsor Ownership
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S&P Global Ratings affirmed its 'B' issuer credit rating on
Coppell, Texas-based storage and organization specialty retailer
The Container Store Group Inc. (TCS).
The stable outlook reflects S&P's view that leverage will remain in
the mid- to high-2x area, with funds from operations (FFO) to debt
in the mid-20% area and slightly positive free operating cash flow
(FOCF) over the next 12 months.
Demand benefits amid the pandemic drove fiscal 2020 results above
S&P's expectations, but it forecast reduced revenues and EBITDA in
fiscal 2021 as consumer spending on home goods contracts. Total
sales growth was 30.4% for the fourth quarter, driving fiscal 2020
expansion of 8.1%. Website-generated sales in the quarter were up
92.7%, representing 27% of TCS's sales (up from 18.4% in fiscal
2019). S&P Global Ratings-adjusted EBITDA margin rose about 440
basis points (bps) in the fiscal year, driven by reduced selling,
general, and administrative (SG&A) expenses and higher revenues.
S&P said, "While we believe TCS will retain some of the sales gain,
we forecast a decline in consumer demand for home goods throughout
fiscal 2021 leading to a modest sales decline of 1%-3%. This is
slightly offset by new customer acquisition through the company's
partnership with The Home Edit. We anticipate a more significant
decline in S&P Global Ratings-adjusted EBITDA of about 300 bps
because of increasing SG&A and gross margin pressures through
fiscal 2021."
Reduced sponsor ownership decreases the likelihood of future
leveraging events and is a modest credit positive. Private equity
firm Leonard Green has sold down its ownership position to about
31% of common stock outstanding from 40% in December 2020. S&P
said, "We believe the sponsor will continue to pursue monetization
of its position. In our view, increased public ownership reduces
risk of future leveraging events, such as issuance of debt for
dividends or shareholder returns. Therefore, we have revised our
financial policy modifier to neutral from FS-5."
S&P said, "TCS remains exposed to near-term volatility as the
effects of the pandemic subside, though it has good headroom in
credit metrics to absorb potentially turbulent consumer demand. We
note that the company's small size and scale contributes to a
greater level of vulnerability to external effects. However, debt
reduction of $77.8 million over the past 12 months has created
cushion in credit metrics. We now forecast leverage will be
maintained in the mid- to high-2x area, with FFO to debt in the
mid-20% area.
"TCS has significant operating lease obligations of $340 million,
which represent about two-thirds of S&P Global Ratings-adjusted
debt. We forecast FOCF of about $10 million in fiscal 2021,
improving to about $25 million in fiscal 2022. This represents a
significant decline from fiscal 2020 FOCF of $115 million, though,
in our view, this was driven by unique effects from the pandemic.
"The stable outlook reflects our view that leverage will remain in
the mid- to high-2x area with FFO to debt in the mid 20% area over
the next 12 months. We expect TCS will generate slightly positive
FOCF in the next 12 months, despite a modest contraction in sales
and EBITDA from heightened levels in fiscal 2020."
S&P could lower the rating if:
-- FOCF generation is flat or negative;
-- Operating prospects deteriorate such that S&P expects
persistent cash flow volatility, leverage exceeding 4x, or FFO to
debt declining to about 15%;
-- Sales decline substantially and EBITDA margin is suppressed,
weakening profitability and competitive position; or
-- TCS significantly changes its financial policy, which results
in a releveraging event.
S&P could raise the rating if:
-- TCS expands its scale and breadth of operations through the
successful acquisition of new customers and further traction on its
omnichannel efforts, leading S&P to believe that its competitive
position has improved; and
-- S&P believes the company has a conservative financial policy
that supports maintenance of leverage metrics at current levels.
DOUBLE D GROUP: Updates Mechanic's Lien Claims Details
------------------------------------------------------
The Double D Group, LLC, on July 13, 2021, submitted a Second
Amended Disclosure Statement in support of the Amended Plan of
Reorganization dated June 30, 2021.
The Second Amended Disclosure Statement highlights the alterations
made to Mechanic's Lien Claims. The Debtor's remaining creditors
consist almost entirely of unpaid subcontractors. Some of these
subcontractors have asserted mechanics' liens against the property.
The amount of these claims is asserted to be in excess of
$2,500,000. Given the substantial claim of New Providence, the
continuing accrual of fees and interest during the pendency of this
case, and the estimated value of the unfinished project there
little or no equity upon which these claims attach. Accordingly,
these claims are effectively wholly unsecured and are treated as
unsecured claims in the Plan.
Additionally, the Debtor has concerns over the validity of some of
these claims. Debtor believes that some or all of these claims may
represent claims for work that was not done or for work that the
Debtor paid Design Builders but was ultimately not paid to the
subcontractor. With respect to Design Builders, Debtor believes it
is not entitled to any claim and may in fact be liable to Debtor
for damages for is conduct pre-petition. Debtor is still evaluating
these potential claim objections and whether it makes financial and
economical sense to object to the claims given the nature of the
proposed payments to Class 3. The Plan provides for a mechanism by
which the Debtor may object to these claims postconfirmation within
120 days after the Effective Date.
Like in the prior iteration of the Plan, all Claimants holding
Allowed Class 4 General Unsecured Claims shall be receive their pro
rata share of the General Unsecured Payment Pool. The General
Unsecured Payment Pool shall be funded from the Reorganized
Debtor's net operating income generated by the operations of the
Property and such other funds as the Reorganized Debtor or Plan
Proponent may designate or contribute. The General Unsecured
Payment Pool shall be $25,000.00.
All Equity Interests in the Debtor shall be extinguished upon the
Effective Date of the Plan. Holders of Equity Interests will
receive nothing on account of those interests. Equity Interests
equal to 100% in the Reorganized Debtor shall be issued to the Plan
Proponent upon the Effective Date of the Plan.
The Plan will be implemented upon the occurrence of the Effective
Date of the Plan. On the Effective Date, the following events shall
occur in the following sequence:
* The Plan Proponent shall fund the New Value Contribution by
depositing cash sufficient to complete construction of the Project
in a designated bank account.
* The Equity Interests in the Debtor shall be deemed cancelled
and new Equity Interests in the Reorganized Debtor shall be issued
to the Plan Proponent.
* The Reorganized Debtor shall make the New Providence
Payment.
* The Reorganized Debtor shall issue and deliver the New
Providence Note and shall cause to be delivered any required
prepaid interest.
* New Providence shall release its security interests in the
Property and any other collateral it holds.
The Bankruptcy Court has scheduled September 7, 2021 at 9:30 a.m.
as the Confirmation Hearing.
A full-text copy of the Second Amended Disclosure Statement dated
July 13, 2021, is available at https://bit.ly/3ia00vh from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Thomas H. Fell
Anthony W. Austin
Fennemore Craig, P.C.
300 South Fourth Street, Suite 1400
Las Vegas, Nevada 89101
Telephone: (702) 692-8000
E-mail: tfell@fennemorelaw.com
E-mail: aaustin@fennemorelaw.com
About The Double D Group
The Double D Group, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Nev. Case No. 21-10343) on Jan. 26,
2021. Jose Pihardo, the managing member, signed the petition. At
the time of the filing, the Debtor disclosed assets of between $1
million and $10 million and liabilities of the same range. Judge
Natalie M. Cox oversees the case. Fennemore Craig, P.C., is the
Debtor's legal counsel.
EAST WEST AVL: Gets OK to Hire Ivey McClellan as Bankruptcy Counsel
-------------------------------------------------------------------
East West AVL Dev, LLC received approval from the U.S. Bankruptcy
Court for the Western District of North Carolina to employ Ivey,
McClellan, Gatton & Siegmund to serve as legal counsel in its
Chapter 11 case.
The firm's services include:
a. advising the Debtor of its powers and duties in the
continued operation of its business and management of its
properties;
b. negotiating, preparing and pursuing confirmation of a
Chapter 11 plan and approval of a disclosure statement and all
reorganization agreements;
c. preparing court papers;
d. representing the Debtor in adversary proceedings;
e. representing the Debtor in litigation related to the case;
f. appearing in court; and
g. performing all other legal services.
The hourly rates for the firm's primary attorneys and paralegals
expected to provide services to the Debtor are as follows:
Samantha K. Brumbaugh $400 per hour
Dirk W. Siegmund $400 per hour
Charles M. Ivey, III $500 per hour
Darren McDonough $400 per hour
Melissa Murrell $100 per hour
Tabitha Coltrane $100 per hour
Heather Bray $100 per hour
Samantha Brumbaugh, Esq., a partner at Ivey, disclosed in court
filings that her firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Samantha K. Brumbaugh, Esq.
Ivey, McClellan, Gatton & Siegmund, LLP
100 South Elm Street, Suite 500
Greensboro, NC 27401
Telephone: (336) 274-4658
Facsimile: (336) 274-4540
Email: dws@iveymcclellan.com
About East West AVL Dev
East West AVL Dev, LLC sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. W.D.N.C. Case 21-10134) on July
6, 2021, listing $100,001 to $500,000 in both assets and
liabilities. Judge George R. Hodges oversees the case. Ivey,
Mcclellan, Siegmund, Brumbaugh & Mcdonough, LLP, serves as the
Debtor's legal counsel.
EDWIN P. RANDOLPH: Amy Harris of Stichter Riedel Named as Trustee
-----------------------------------------------------------------
Mary Ida Townson, United States Trustee for Region 21, appointed
Amy Denton Harris as Subchapter V trustee for Edwin P. Randolph,
Attorney at Law, LLC. Ms. Harris is a shareholder at Stichter,
Riedel, Blain & Postler, P.A.
Ms. Harris' contact details:
Amy Denton Harris
110 East Madison Street, Suite 200
Tampa, FL 33602
Telephone: (813) 229-0144
Facsimile: (813) 229-1811
Email: aharris@subvtrustee.com
About Edwin P. Randolph, Attorney at Law, LLC
Edwin P. Randolph, Attorney at Law, LLC operates at its principal
place of business at 5008 W. Linebaugh Avenue, Ste.19, in Tampa,
Florida. The Debtor filed a petition under Subchapter V of Chapter
11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 21-03506) on
July 1, 2021.
On the Petition Date, the Debtor disclosed up to $50,000 in assets
and $100,000 to $500,000 in liabilities. The petition was signed
by Edwin P. Randolph, managing partner/owner.
Judge Michael G. Williamson presides over the case.
The Debtor is represented by McIntyre Thanasides Bringgold Elliott
Grimaldi Guito & Matthews, P.A.
EDWIN P. RANDOLPH: Seeks to Use Cash Collateral
-----------------------------------------------
Edwin P. Randolph, Attorney at Law, LLC asked the Bankruptcy Court
to authorize the use of cash collateral, nunc pro tunc to the
Petition Date, for the continued operation of the Debtor's business
and for the care, maintenance and preservation of the Debtor's
assets.
The six-month budget filed in Court provided for monthly total
expenses at $9,375 for each of July through December 2021.
The Debtor believes that Independence Bank, TD Bank, N.A., and the
U.S. Small Business Administration may claim perfected and
enforceable security interest and lien on the Debtor's inventory,
accounts, and accounts receivables which constitute the Secured
Creditor's cash collateral.
The Debtor intends to provide the Secured Creditors with
replacement liens to the same extent and validity as held by
Secured Creditors prepetition.
A copy of the motion, with the budget, is available for free at
https://bit.ly/36rubsJ from PacerMonitor.com.
Counsel for the Debtor:
James W. Elliott, Esq.
McIntyre Thanasides Bringgold
Elliott Grimaldi Guito & Matthews, P.A
500 E. Kennedy Blvd., Suite 200
Tampa, FL 33602
Telephone: 813-223-0000
Email: James@mcintyrefirm.com
About Edwin P. Randolph, Attorney at Law, LLC
Edwin P. Randolph, Attorney at Law, LLC filed a petition under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 21-03506) on July 1, 2021.
On the Petition Date, the Debtor disclosed up to $50,000 in assets
and $100,000 to $500,000 in liabilities. The petition was signed
by Edwin P. Randolph, managing partner/owner.
Judge Michael G. Williamson presides over the case.
The Debtor is represented by McIntyre Thanasides Bringgold Elliott
Grimaldi Guito & Matthews, P.A. as counsel.
ENERGY FUTURE: Nextera Asks for 2 Months to Produce Docs
--------------------------------------------------------
Law360 reports that NextEra Energy has asked a Delaware bankruptcy
judge for two more months to produce documents connected to its
claim for $60 million for a failed attempt to buy an Energy Future
Holdings subsidiary, saying it has turned up far more documents
than expected. In a letter filed with the court Friday, July 9,
2021, counsel for NextEra asked for 60 more days to comply with
document requests from one of Energy Future's creditors, saying
both the number of documents involved and the privilege issues
associated with them "vastly exceeded our expectations.
About Energy Future Holdings
Energy Future Holdings Corp., formerly known as TXU Corp., is a
privately held diversified energy holding company with a portfolio
of competitive and regulated energy businesses in Texas. Oncor, an
80%-owned entity within the EFH group, is the largest regulated
transmission and distribution utility in Texas. The Company
delivers electricity to roughly three million delivery points in
and around Dallas-Fort Worth. EFH Corp. was created in October 2007
in a $45 billion leverage buyout of Texas power company TXU in a
deal led by private-equity companies Kohlberg Kravis Roberts & Co.
and TPG Inc.
On April 29, 2014, Energy Future Holdings and 70 affiliated
companies sought Chapter 11 bankruptcy protection (Bankr. D. Del.
Lead Case No. 14-10979) after reaching a deal with some key
financial stakeholders to keep its businesses operating while
reducing its roughly $40 billion in debt.
The Debtors' cases have been assigned to Judge Christopher S.
Sontchi (CSS).
As of Dec. 31, 2013, EFH Corp. reported assets of $36.4 billion in
book value and liabilities of $49.7 billion. The Debtors had $42
billion of funded indebtedness as of the bankruptcy filing.
EFH's legal advisor for the Chapter 11 proceedings is Kirkland &
Ellis LLP, its financial advisor is Evercore Partners and its
restructuring advisor is Alvarez & Marsal. The TCEH first lien
lenders supporting the restructuring agreement are represented by
Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and
Millstein & Co., LLC, as financial advisor.
The EFIH unsecured creditors supporting the restructuring Agreement
are represented by Akin Gump Strauss Hauer & Feld LLP, as legal
advisor, and Centerview Partners, as financial advisor. The EFH
equity holders supporting the restructuring agreement are
represented by Wachtell, Lipton, Rosen & Katz, as legal advisor,
and Blackstone Advisory Partners LP, as financial advisor. Epiq
Systems is the claims agent.
Wilmington Savings Fund Society, FSB, the successor trustee for the
second-lien noteholders owed about $1.6 billion, is represented by
Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A.
Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq.,
Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey,
Esq., and Howard L. Siegel, Esq.
On May 13, 2014, the U.S. Trustee appointed the Official Committee
of TCEH Unsecured Creditors in the Chapter 11 Cases. The TCEH
Committee is composed of (a) the Pension Benefit Guaranty
Corporation; (b) HCL America, Inc.; (c) BNY, as Indenture Trustee
under the EFCH 2037 Notes due 2037 and the PCRBs; (d) LDTC, as
Indenture Trustee under the TCEH Unsecured Notes; (e) Holt Texas
LTD, d/b/a Holt Cat; (f) ADA Carbon Solutions (Red River); and (g)
Wilmington Savings, as Indenture Trustee under the TCEH Second Lien
Notes. The TCEH Committee retained Morrison & Foerster LLP as
counsel; Polsinelli PC as co-counsel and conflicts counsel; Lazard
Freres & Co. LLC as investment banker; FTI Consulting, Inc., as
financial advisor; and Charles River Associates as an energy
consultant.
On Oct. 27, 2014, the U.S. Trustee appointed the Official Committee
of Unsecured Creditors representing the interests of the unsecured
creditors for EFH, EFIH, EFIH Finance, and EECI, Inc. The EFH/EFIH
Committee is composed of (a) American Stock Transfer & Trust
Company, LLC; (b) Brown & Zhou, LLC c/o Belleair Aviation, LLC; (c)
Peter Tinkham; (d) Shirley Fenicle, as successor-in-interest to the
Estate of George Fenicle; and (e) David William Fahy. The EFH/EFIH
Committee retained Montgomery, McCracken, Walker & Rhodes, LLP, as
co-counsel and conflicts counsel; AlixPartners, LLP, as
restructuring advisor; Sullivan & Cromwell LLC as counsel;
Guggenheim Securities as investment banker; and Kurtzman Carson
Consultants LLC as noticing agent for both the TCEH Committee and
the EFH/EFIH Committee.
Given the size and complexity of the Chapter 11 Cases, the U.S.
Trustee proposed, and the Debtors and the TCEH Committee agreed, to
recommend that the Bankruptcy Court appoint a committee to, among
other things, review and report as appropriate on fee applications
and statements submitted by the professionals paid for by the
Debtors' Estates. The Fee Committee is comprised of four members:
(a) one member appointed by and representative of the Debtors
(Cecily Gooch, Vice President and Special Counsel for
Restructuring, Energy Future Holdings); (b) one member appointed by
and representative of the TCEH Creditors' Committee (Peter Kravitz,
Principal and General Counsel, Province Capital); (c) one member
appointed by and representative of the U.S. Trustee (Richard L.
Schepacarter, Trial Attorney, Office of the United States Trustee);
and (d) one independent member (Richard Gitlin, of Gitlin and
Company, LLC). The Fee Committee retained Godfrey & Kahn, S.C., as
counsel; and Phillips, Goldman & Spence, P.A., as co-counsel.
On Aug. 29, 2016, Judge Sontchi confirmed the Chapter 11 exit Plans
of two of Energy Future Holdings Corp.'s subsidiaries, power
generator Luminant and retail electricity provider TXU Energy Inc.
(the "T-Side Debtors"). The Plan became effective on Oct. 3, 2016.
On Aug. 20, 2017, Sempra Energy (NYSE:SRE) announced an agreement
to acquire EFH. Under the agreement, Sempra Energy will pay
approximately $9.45 billion in cash to acquire EFH and its
ownership in Oncor, while taking a major step forward in resolving
Energy Future's long-running bankruptcy case. The enterprise value
of the transaction is approximately $18.8 billion, including the
assumption of Oncor's debt.
On Nov. 3, 2017, the Bankruptcy Court entered an order closing the
Chapter 11 cases of 40 affiliate debtors. The claims asserted
against, and interests asserted in, the Closing Cases are
transferred to the lead case of Texas Competitive Electric Holdings
Company LLC, Case No. 14-10978.
EVERGREEN DEVELOPMENT: Wins Cash Collateral Access Thru Sept 15
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota has
authorized Evergreen Development Group and The Evergreens of Apple
Valley, L.L.P. to use cash collateral in accordance with the
Debtors' budget through September 15, 2021, with a 10% variance.
The Debtors will use cash to pay ordinary and necessary business
expenses and administrative expenses for the items and in such use
that will not vary materially from that provided for in the budget,
except for variations attributable to expenditures specifically
authorized by Court order, or as otherwise authorized by Minnesota
Bank & Trust in writing, and those payments to MB&T under the terms
of the Stipulation.
The Debtors will grant MB&T a replacement lien, to the extent of
Debtors' use of Cash Collateral and adequate protection, and all
prepetition collateral, all cash on hand as accumulated by Debtors
prior to the Petition Date, any and all property as of the Petition
Date, with such liens being of the same priority, dignity, and
effect as MB&T’s pre-petition lien. The lien and security
interest provided to MB&T in the Stipulation will not be subject to
any lien or security interest that is avoided and/or preserved for
the benefit of Debtors pursuant to Section 551 of the Code.
The Debtors will carry insurance on their assets, land, and
buildings and will provide proof of insurance reasonably acceptable
to MB&T, including declaration pages for general liability and
coverage.
The Debtors will also make adequate protection payments to MB&T by
remitting monthly payments in the amount of $21,560, commencing on
July 9, 2021, and continuing thereafter on the same day of each
subsequent month through the term of the Stipulation, or any
extensions hereto.
The Debtors' permitted use of Cash Collateral will cease if:
a. They default in their performance of any obligation.
b. MB&T gives written notice of such default to the Debtors
and their counsel via either e-mail, facsimile transmission, or
U.S. Mail.
c. The default is not cured within five days from the date of
sending or mailing or faxing a notice of the default.
d. The Debtors' failure to timely pay any tax, including
withholding, property, income, excise, use, occupancy, liquor,
tobacco, or any other municipal, state or federal tax accruing at
any time after the Petition Date.
e. The Debtors' sale, conveyance, transfer, or other disposal
of any of the Debtors' assets or property out of the ordinary
course of business unless otherwise approved by the Bankruptcy
Court beforehand.
f. The case is dismissed or converted to another chapter of
the Code.
g. Upon the occurrence of an event of default, MB&T will
provide written notice of such default to the Debtors and their
counsel via e-mail, facsimile transmission, or U.S. Mail. In the
event the default is not cured on, or within, five days of issuance
of the written notice of default, MB&T will be entitled to request
expedited relief from the automatic stay to pursue its rights and
remedies as a perfected secured creditor, the Debtors will waive
any defense or counterclaim associated with default.
A copy of the order is available at https://bit.ly/3wnGnoQ from
PacerMonitor.com.
About Evergreen Development Group
Evergreen Development Group is a single asset real estate company
which owns and leases commercial real estate in Waite Park,
Minnesota. Its principal place of business and corporate offices
are located at 95 10th Ave. South, Waite Park, Minnesota, 56387. It
merged with The Evergreens of Apple Valley, L.L.P. in 2015.
Evergreen Development Group and The Evergreens of Apple Valley,
L.L.P., sought protection under Chapter 11 of the U.S. Bankruptcy
Court (Bankr. D. Minn. Case Nos. 21-60066 and 21-40334) on February
26, 2021. In the petition signed by Robert A. Hopman, general
partner, Evergreen Development disclosed up to $10 million in
assets and up to $50,000 in liabilities.
Foley & Mansfield, P.L.L.P., represents the Debtors as counsel.
FILLIT INC: All Classes Unimpaired in Combined Plan & Disclosures
-----------------------------------------------------------------
Debtor Fillit, Inc., and DIP lender NP Palmyra submitted a First
Amended Combined Disclosure Statement and Chapter 11 Plan of
Reorganization dated July 13, 2021.
The Combined Disclosure Statement and Plan is a chapter 11 plan of
reorganization. As a result of successful negotiations between the
Debtor and the Exit Financing Lender, the Debtor proposes this
Combined Disclosure Statement and Plan. The Debtor and the NP
Palmyra are the proponents of the Combined Disclosure Statement and
Plan. The Combined Disclosure Statement and Plan will be funded by
the proceeds of the Exit Financing Loan.
The First Amended Combined Disclosure Statement and Plan discusses
the minor alterations made to "Released Party" means NP Palmyra.
The First Amended Combined Disclosure Statement and Plan does not
alter the proposed treatment for creditors and the equity holder:
* Class 1 consists of the Secured Claims. Class 1 is
unimpaired by the Combined Disclosure Statement and Plan. Each
Holder of such Allowed Secured Claim shall receive (i) Cash in an
amount equal to such Allowed Secured Claim or (ii) such other
treatment that renders such Holder's Allowed Secured Claim
unimpaired in accordance with section 1124(1) or (2) of the
Bankruptcy Code.
* Class 2 consists of Other Priority Claims. Class 2 is
unimpaired by the Combined Disclosure Statement and Plan. Each
Holder of an Allowed Other Priority Claim shall receive Cash in an
amount equal to such Allowed Other Priority Claim.
* Class 3 consists of General Unsecured Claims. Class 3 is
unimpaired by the Combined Disclosure Statement and Plan. Each
Holder of an Allowed General Unsecured Claim shall have such Claim
Reinstated.
* Class 4 consists of Environmental and Redevelopment Claims.
Class 4 is unimpaired by the Combined Disclosure Statement and
Plan. Except to the extent that a Holder of an Environmental and
Redevelopment Claim agrees to a less favorable or different
treatment, Reinstatement of such Environmental and Redevelopment
Claims.
* Class 5 consists of the Equity Interests in the Debtor.
Class 5 is unimpaired by the Combined Disclosure Statement and
Plan. On the Effective Date, the Estate of Angelo Campo will
continue to own 100% of all existing Equity Interests in the
Debtor.
Allowed Claims shall be paid by the Debtor and/or the Reorganized
Debtor solely from the Debtor and/or Reorganized Debtor's assets,
including, without limitation, the Exit Financing Loan.
A full-text copy of the First Amended Combined Disclosure Statement
and Plan dated July 13, 2021, is available at
https://bit.ly/3yS1m4M from PacerMonitor.com at no charge.
Counsel to the Debtor:
LOWENSTEIN SANDLER LLP
Kenneth A. Rosen, Esq.
Phillip Khezri, Esq.
One Lowenstein Drive
Roseland, New Jersey 07068
Telephone: (973) 597-2500
Facsimile: (973) 597-2400
E-mail: krosen@lowenstein.com
pkhezri@lowenstein.com
About Fillit, Inc.
Fillit, Inc., d/b/a Fillit Corp., is engaged in activities related
to real estate.
Fillit sought Chapter 11 protection (Bankr. D.N.J. Case No.
20-23140) on November 30, 2020. In the petition signed by James
Campo, president, the Debtor was estimated to have $10 million to
$50 million in assets and $1 million to $10 million in liabilities
as of the bankruptcy filing. The Honorable Christine M. Gravelle
is the case judge. Lowenstein Sandler, LLP, led by Kenneth A.
Rosen, is the Debtor's counsel.
FOX SUBACUTE: Gets OK to Hire German Gallagher as Special Counsel
-----------------------------------------------------------------
Fox Subacute at Mechanicsburg, LLC and its affiliates received
approval from the U.S. Bankruptcy Court for the Middle District of
Pennsylvania to employ German Gallagher & Murtagh, PC as special
counsel.
The firm will provide legal services to the Debtor in relation to
personal injury claims.
The firm's hourly rates are as follows:
Partners $240 per hour
Associate Attorneys $200 per hour
Paralegals $110 per hour
German Gallagher & Murtagh will also be reimbursed for
out-of-pocket expenses incurred.
Jacob Lehman, Esq. a partner at German Gallaher & Murtagh,
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:
Jacob C. Lehman, Esq.
German Gallaher & Murtagh, PC
200 South Broad Street
Philadelphia, PA 19102
Tel: (212) 545-7700
Fax: (215) 732-4182
Email: lehmanj@ggmfirm.com
About Fox Subacute at Mechanicsburg
Fox Subacute At Mechanicsburg, LLC is a skilled nursing facility in
Pennsylvania that specializes in pulmonary, neurological, and
rehabilitative care for patients with degenerative neurological and
neuromuscular disease; and pulmonary care and ventilator
requirements with an emphasis on vent weaning. Its facilities are
located in Plymouth Meeting, Warrington, Mechanicsburg and
Philadelphia, Pa., and are licensed by the PA Department of
Health.
On Nov. 1, 2019, Fox Subacute at Mechanicsburg and its affiliates
sought Chapter 11 protection (Bankr. M.D. Pa. Lead Case No.
19-04714). Fox Subacute at Mechanicsburg was estimated to have $1
million to $10 million in assets and liabilities as of the
bankruptcy filing.
Judge Henry W. Van Eck oversees the cases.
The Debtors tapped Cunningham, Chernicoff & Warshawsky, P.C. as
bankruptcy counsel; Kennedy P.C. and Weltman, Weinberg & Reis Co.,
LPA as special counsel; Isdaner & Company, LLC as accountant; and
Three Twenty-One Capital Partners, LLC as investment banker.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Dec. 11, 2019. The committee is represented
by Flaster/Greenberg P.C.
FUELCELL ENERGY: Wins Case Versus Posco Energy
----------------------------------------------
FuelCell Energy, Inc. has received a favorable ruling in a court
case filed in the Court of Chancery in Delaware by POSCO Energy
Co., Ltd.
On July 9, 2021, the Court issued a post-trial ruling denying POSCO
Energy's summary statutory demand to inspect the Company's books
and records because POSCO Energy lacks a proper purpose. The Court
held that the totality of the circumstances, including the fact
this was the seventh legal action POSCO Energy initiated against
the Company within the span of nine months, confirmed that POSCO
Energy's purpose in initiating the books and records demand and
filing the complaint was not proper.
"The Court's decision represents a landmark victory for FuelCell
Energy, as it is one of the few times that a Delaware court has
denied a party's request to inspect a corporation's books and
records based on an improper purpose defense," commented Jason Few,
president and chief executive officer, FuelCell Energy.
Mr. Few continued, "We are proud of FuelCell Energy's track record
of commitment to the highest ethical standards, and compliance with
the law. Commercially, we are excited to be engaged with the South
Korean and broader Asian marketplace. FuelCell Energy looks
forward to continuing its work in enabling the region's energy
transformation to a cleaner future."
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 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.
GTT COMMUNICATIONS: Deadline to File Financials Extended to July 20
-------------------------------------------------------------------
GTT Communications, Inc., GTT Communications B.V., the lenders
party to the Priming Facility Credit Agreement dated December 28,
2020, and Delaware Trust Company, as administrative agent, have
entered into that certain Fifth Amendment to the Priming Facility
Credit Agreement.
The Fifth Amendment, among other things, (i) further extends the
deadlines under the Priming Facility Credit Agreement to deliver
the Company's audited consolidated financial statements for the
fiscal year ended December 31, 2020 and the unaudited consolidated
financial statements for the fiscal quarter ended March 31, 2021 to
July 20, 2021, (ii) amends the covenant with respect to compliance
with periodic budgets the Company is required to deliver to certain
lenders to exclude certain tax amounts payable from negative
variance calculations and add a variance test relating to the
payment of such tax amounts, (iii) requires the Company to provide
information to the advisors to certain PTL lenders relating to
certain tax obligations and (iv) directs Delaware Trust Company to
release liens on certain deposit accounts and the cash or cash
equivalents contained therein so that such assets may secure
certain letters of credit issued by Barclays Bank PLC or any
affiliate thereof and provides that the consenting PTL lenders
consent to the incurrence of reimbursement obligations in respect
of such letters of credit and the incurrence of new liens in favor
of Barclays Bank PLC or any affiliate thereof to secure
reimbursement obligations in respect of such letters of credit.
The Company paid fees and expenses of certain advisors to the
consenting PTL lenders and Delaware Trust Company in connection
with the entry into the Fifth Amendment.
As previously disclosed, on Dec. 28, 2020, the Company entered into
that certain Priming Facility Credit Agreement among the Company,
GTT B.V., the PTL lenders and Delaware Trust Company. The Priming
Facility Credit Agreement provides for a priming term loan facility
consisting of initial and delayed draw term loans in a principal
amount of up to $275,000,000.
Extension of Second Notes Forbearance Agreement
As previously disclosed, on Dec. 28, 2020, the Company and the
guarantors under that certain Indenture, dated as of Dec. 22, 2016,
by and between the Company, as successor by merger to GTT Escrow
Corporation, and Wilmington Trust, National Association, as
Trustee, entered into that certain Noteholder Forbearance Agreement
with certain beneficial owners (or nominees, investment managers,
advisors or subadvisors for the beneficial owners) of a majority of
the outstanding aggregate principal amount of the Company's
outstanding 7.875% Senior Notes due 2024 . Pursuant to the Second
Notes Forbearance Agreement, the Forbearing Noteholders agreed to,
among other provisions, forbear from exercising any and all rights
and remedies under the Indenture, the Notes and applicable law,
including not directing the Trustee to take any such action, with
respect to defaults and events of default that have occurred, or
that may occur as a result of, (i) the Company's failure to timely
file its Quarterly Reports on Form 10-Q for the quarters ended June
30, 2020 and Sept. 30, 2020 and (ii) the occurrence and continuance
of the "Lender Specified Defaults" as defined in the applicable
forbearance agreement with respect to the Credit Agreement, in each
case until the earlier of (a) 5:00 p.m., New York City time, on
March 31, 2021 and (b) the receipt of notice from Forbearing
Noteholders regarding their intent to terminate the Second Notes
Forbearance Agreement upon the occurrence of certain specified
forbearance defaults. The Second Notes Forbearance Agreement may
be amended with the consent of Forbearing Noteholders holding more
than 66.7% of the aggregate principal amount of the Notes held by
all Forbearing Noteholders, provided that at least two of such
consenting Forbearing Noteholders are unaffiliated.
As previously disclosed, on March 29, 2021, the Company and the
Guarantors entered into that certain First Amendment to Noteholder
Forbearance Agreement with Forbearing Noteholders constituting
Requisite Forbearing Noteholders. The Second Notes Forbearance
Agreement Amendment No. 1, among other things, (i) provided that in
addition to the matters originally subject to forbearance in the
Second Notes Forbearance Agreement, the Forbearing Noteholders will
forbear from exercising any and all rights and remedies under the
Indenture, the Notes and applicable law, including not directing
the Trustee to take any such action, with respect to defaults and
events of default that have occurred, or that may occur as a result
of, the Company's failure to timely file its Annual Report on Form
10-K for the fiscal year ended Dec. 31, 2020 and (ii) amended the
scheduled expiration time under the Second Notes Forbearance
Agreement to 5:00 p.m., New York City time, on April 15, 2021. On
April 12, 2021, the Company received a notice on behalf of
Forbearing Noteholders constituting Requisite Forbearing
Noteholders consenting to an extension of the scheduled expiration
time under the Second Notes Forbearance Agreement to 5:00 p.m., New
York City time, on April 22, 2021. On April 19, 2021, the Company
received a notice on behalf of Forbearing Noteholders constituting
Requisite Forbearing Noteholders consenting to an extension of the
scheduled expiration time under the Second Notes Forbearance
Agreement to 5:00 p.m., New York City time, on May 3, 2021. On
April 28, 2021, the Company received a notice on behalf of
Forbearing Noteholders constituting Requisite Forbearing
Noteholders consenting to an extension of the scheduled expiration
time under the Second Notes Forbearance Agreement to 5:00 p.m., New
York City time, on May 10, 2021. On May 10, 2021, the Company and
the Guarantors entered into that certain Second Amendment to
Noteholder Forbearance Agreement with Forbearing Noteholders
constituting Requisite Forbearing Noteholders. The Second Notes
Forbearance Agreement Amendment No. 2, among other things, amended
the scheduled expiration time under the Second Notes Forbearance
Agreement to 5:00 p.m., New York City time, on May 17, 2021.
As previously disclosed, on May 17, 2021, the Company and the
Guarantors entered into that certain Third Amendment to Noteholder
Forbearance Agreement with Forbearing Noteholders constituting
Requisite Forbearing Noteholders. The Second Notes Forbearance
Agreement Amendment No. 3, among other things, (i) provided that in
addition to the matters subject to forbearance in the Second Notes
Forbearance Agreement as previously amended, the Forbearing
Noteholders will forbear from exercising any and all rights and
remedies under the Indenture, the Notes and applicable law,
including not directing the Trustee to take any such action, with
respect to defaults and events of default that have occurred, or
that may occur as a result of, the Company's failure to timely file
its Quarterly Report on Form 10-Q for the quarter ended March 31,
2021 and (ii) amended the scheduled expiration time under the
Second Notes Forbearance Agreement to 5:00 p.m., New York City
time, on June 3, 2021. On May 28, 2021, the Company received a
notice on behalf of Forbearing Noteholders constituting Requisite
Forbearing Noteholders consenting to an extension of the scheduled
expiration time under the Second Notes Forbearance Agreement to
5:00 p.m., New York City time, on June 17, 2021. On June 11, 2021,
the Company received a notice on behalf of Forbearing Noteholders
constituting Requisite Forbearing Noteholders consenting to an
extension of the scheduled expiration time under the Second Notes
Forbearance Agreement to 5:00 p.m., New York City time, on June 28,
2021. On June 28, 2021, the Company and the Guarantors entered
into that certain Fourth Amendment to Noteholder Forbearance
Agreement with Forbearing Noteholders constituting Requisite
Forbearing Noteholders. The Second Notes Forbearance Agreement
Amendment No. 4, among other things, (i) amended the scheduled
expiration time under the Second Notes Forbearance Agreement to
5:00 p.m., New York City time, on July 6, 2021 and (ii) provided
that in addition to the matters subject to forbearance in the
Second Notes Forbearance Agreement as previously amended, the
Forbearing Noteholders will forbear from exercising any and all
rights and remedies under the Indenture, the Notes and applicable
law, including not directing the Trustee to take any such action,
with respect to defaults and events of default that have occurred,
or that may occur as a result of, the Company's failure to make the
approximately $22.6 million interest payment due on June 30, 2021
on the Notes as required pursuant to the Indenture. On July 2,
2021, the Company received a notice on behalf of Forbearing
Noteholders constituting Requisite Forbearing Noteholders
consenting to an extension of the scheduled expiration time under
the Second Notes Forbearance Agreement to 5:00 p.m., New York City
time, on July 12, 2021.
On July 8, 2021, the Company received a notice on behalf of
Forbearing Noteholders constituting Requisite Forbearing
Noteholders consenting to an extension of the scheduled expiration
time under the Second Notes Forbearance Agreement to 5:00 p.m., New
York City time, on the New Expiration Date.
Amendment to Fourth Lender Forbearance Agreement
As previously disclosed, on May 10, 2021, the Company, GTT B.V. and
the other credit parties party thereto entered into that certain
Fourth Lender Forbearance Agreement and Amendment No. 5 to Credit
Agreement with (1) lenders holding (a) a majority of the
outstanding loans and revolving commitments and (b) a majority of
the revolving commitments under that certain Credit Agreement,
dated as of May 31, 2018, by and among the Company and GTT B.V., as
borrowers, KeyBank National Association, as administrative agent
and letter of credit issuer, and the lenders and other financial
institutions party thereto from time to time, (2) certain hedge
providers to the Company and (3) the Agent. Pursuant to the Fourth
Lender Forbearance Agreement, the Consenting Lenders agreed to,
among other things, forbear from exercising any and all rights and
remedies under the Loan Documents, any secured hedge agreement with
the Secured Hedge Providers and applicable law (as applicable),
including not directing the Agent to take any such action, with
respect to certain defaults and events of default under the Credit
Agreement and certain events of default under any Secured Hedge
Agreement (as applicable) that have occurred, or that may occur as
a result of, (i) the Company's failure to timely file the Q2 2020
Form 10-Q, the Q3 2020 Form 10-Q, the 2020 Form 10-K and the Q1
2021 Form 10-Q, and related compliance certificates, (ii) any
amendment, supplement, modification, restatement and/or withdrawal
or public statement of non-reliance on (A) any audit opinion
related to historical consolidated financial statements or (B)
historical consolidated financial statements and (iii) the
occurrence and continuance of the "Noteholder Specified Defaults"
as defined in the Second Notes Forbearance Agreement, in each case
until the earlier of (a) 5:00 p.m., New York City time, on May 17,
2021 and (b) the receipt of notice from Consenting Lenders
regarding intent to terminate the Fourth Lender Forbearance
Agreement upon the occurrence of certain specified forbearance
defaults. The Fourth Lender Forbearance Agreement may be amended
with the consent of (i) Required Lenders and (ii) Required
Revolving Lenders (except that the extension of the forbearance
period with respect to any of the Secured Hedge Providers requires
the consent of such Secured Hedge Provider).
As previously disclosed, on May 14, 2021 and May 16, 2021, the
Company received notices on behalf of Lenders constituting Required
Revolving Lenders and Required Lenders, respectively, consenting to
an extension of the scheduled expiration time under the Fourth
Lender Forbearance Agreement to 5:00 p.m., New York City time, on
June 3, 2021. On June 2, 2021, the Company, GTT B.V. and the other
credit parties party thereto entered into that certain First
Amendment to Fourth Lender Forbearance Agreement with Lenders
constituting Required Lenders and Required Revolving Lenders. The
Fourth Lender Forbearance Agreement Amendment No. 1, among other
things, amended the scheduled expiration time under the Fourth
Lender Forbearance Agreement to 5:00 p.m., New York City time, on
June 17, 2021. On June 15, 2021 and June 16, 2021, the Company
received notices on behalf of Lenders constituting Required Lenders
and Required Revolving Lenders, respectively, consenting to an
extension of the scheduled expiration time under the Fourth Lender
Forbearance Agreement to 5:00 p.m., New York City time, on June 28,
2021. On June 28, 2021, the Company, GTT B.V. and the other credit
parties party thereto entered into that certain Second Amendment to
Fourth Lender Forbearance Agreement with Lenders constituting
Required Lenders and Required Revolving Lenders. The Fourth Lender
Forbearance Agreement Amendment No. 2, among other things, amended
the scheduled expiration time under the Fourth Lender Forbearance
Agreement to 5:00 p.m., New York City time, on July 6, 2021. On
July 2, 2021 and July 6, 2021, the Company received notices on
behalf of Lenders constituting Required Revolving Lenders and
Required Lenders, respectively, consenting to an extension of the
scheduled expiration time under the Fourth Lender Forbearance
Agreement to 5:00 p.m., New York City time, on July 12, 2021.
On July 12, 2021, the Company, GTT B.V. and the other credit
parties party thereto entered into that certain Third Amendment to
Fourth Lender Forbearance Agreement and Consent with Lenders
constituting Required Lenders and Required Revolving Lenders. The
Fourth Lender Forbearance Agreement Amendment No. 3, among other
things, (i) amends the scheduled expiration time under the Fourth
Lender Forbearance Agreement to 5:00 p.m., New York City time, on
the New Expiration Date and (ii) directs the Agent to release liens
on the Specified Assets and to consent to the Barclays Cash
Collateralization. The Company paid fees and expenses of certain
advisors to the Consenting Lenders and the Agent in connection with
the entry into the Fourth Lender Forbearance Agreement Amendment
No. 3.
About GTT
Headquartered in McLean, Virginia, GTT Communications, Inc. --
www.gtt.net -- owns and operates a global Tier 1 internet network
and provides a comprehensive suite of cloud networking services.
* * *
As reported by the TCR on July 5, 2021, S&P Global Ratings lowered
its issuer credit rating on U.S.-based internet protocol network
operator GTT Communications Inc. to 'SD' (selective default) from
'CCC-' and the issue-level rating on its unsecured notes to 'D'
from 'C'. The downgrade follows GTT's recent announcement that it
failed to make a $22.6 million interest payment on its 7.875%
unsecured notes due in 2024.
In December 2020, Moody's Investors Service downgraded GTT
Communications, Inc's corporate family rating to Caa2 from B3.
The
downgrade reflects the continued delays in the company reaching an
agreement with its lenders over a long-term cure of its reporting
requirements which GTT is in breach of due to recently discovered
accounting issues which have led to the company being unable to
file its Q2 and Q3 financial reports.
HH ACQUISITION: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------------
HH Acquisition CS, LLC asks the U.S. Bankruptcy Court for the
District of Arizona for authority to use certain cash and other
proceeds that may be subject to a lien asserted by YAM Capital III,
LLC, granting YAM adequate protection in the form of replacement
liens in connection with that use of Cash Collateral, and setting
the date and time for a final hearing.
The Motion is brought on an emergency basis to avoid irreparable
harm to the bankruptcy estate during the next three months of the
case. The Debtor seeks interim approval to use Cash Collateral in
accordance with the budget, pending a final hearing. The Debtor
says its requested relief will ensure that YAM's interests are
protected while the parties work out terms for continued use of
Cash Collateral beyond the interim period. Without immediate use of
Cash Collateral, the Debtor's prospects for reorganization will be
extinguished before the case begins.
On October 4, 2019, HH Acquisition entered into a Promissory Note
with YAM in the amount of $8,400,000, with a 9% interest rate per
annum. The purpose of the loan was to provide bridge financing
until a permanent loan could be obtained to fund the planned
renovations.
On October 4, 2019, HH Acquisition entered into a Promissory Note
with HH CO Springs, LLC in the amount of $1,150,000, with an 8%
interest rate per annum.
The seller provided financing when the Debtor acquired a property.
The current amount owed is approximately $450,000.
HH Acquisition was able to operate the Property and made the
payments on the YAM and HHCOS Notes until March 2020, when the
COVID-19 pandemic caused a complete shutdown of the hospitality
industry and the overall U.S. economy. As a result of the pandemic,
HH Acquisition's business took a drastic downturn, and the Debtor
was unable to continue making the payments on the Notes.
The Debtor entered into several amendments and forbearance
agreements with both YAM and HHCOS during the pandemic. On November
27, 2020, the Debtor sent a notice to YAM that it desired to
further extend the maturity of the Loan for an additional 90-day
period. YAM did not respond to the November 27, 2020, request for
extension, and sent a letter on January 8, 2021, declaring a
default on the Loan.
The Debtor has been negotiating a sale of the Property to a third
party, which sale should close in mid to late August, and would pay
both YAM and HHCOS in full, as well as provide funds to pay
unsecured debt related to the Property.
On June 8, 2021, YAM issued its Notice Regarding Cure Statement on
the YAM Note, with a trustee's sale set for July 7. The Debtor was
given a July 6 noontime deadline to pay all outstanding amounts due
on the YAM Note in the amount of $10,343,617. A foreclosure sale on
the Property was scheduled to occur at 10 a.m. local time in
Colorado Springs on July 7. The bankruptcy filing stayed the sale
from going forward.
The two liens on the Property total roughly $11,000,000. Prior to
the bankruptcy filing, the Debtor almost closed a sale for a price
of $14,500,000 with a bona fide third-party purchaser. Now that the
bankruptcy filing has occurred, the Debtor intends to proceed
forward with a Section 363 sale.
The Debtor will adequately protect YAM for use of the Cash
Collateral during the abbreviated period by continuing to make the
interest-only payments due under the YAM loan from available free
cash flow, and granting replacement liens on similar post- petition
collateral.
To the extent the Debtor uses the funds from the accounts that may
secure YAM's claim, the Debtor will grant YAM replacement liens to
the same extent and priority as it currently has on any new
post-petition cash and accounts.
A copy of the motion is available at https://bit.ly/3hPFG2g from
PacerMonitor.com.
About HH Acquisition CS, LLC
HH Acquisition CS, LLC's principal place of business is located in
Scottsdale, Arizona. Its principal assets are located at 5805
Delmonico Drive Colorado Springs, CO80919 (Hyatt House Colorado
Springs).
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 21-05211) on July 6,
2021. In the petition signed by Ian Clifton, authorized
representative, the Debtor disclosed up to $50 million in assets
and liabilities.
James E. Cross, Esq. at Cross Law Firm, P.L.C. is the Debtor's
counsel.
INTELSAT SA: Court Adjourns Bankruptcy Exit Plan
------------------------------------------------
Advanced Television reports that Intelsat, currently trading as a
Debtor in Possession under Chapter 11 rules, has asked its
bankruptcy court to start hearing its Disclosure Statement on
August 11, 2021.
The original wish was for the hearing to take place on July 27,
2021, but that now looks likely to be postponed until August 11th,
given that 28 says notice must be allowed for objections to be
filed.
Intelsat filed its bankruptcy disclosure and exit plan, a 145-page
document, back on February 12, 2021. At the time, it had been hoped
that by May 3rd a Confirmation Hearing would have been agreed for
the exit plan itself.
Intelsat is now asking that the August 11th hearing approve its
Disclosure Statement, its processes and procedures for the
distribution of bankruptcy funds, the forms of ballot and notices
regarding the exit plan, and setting a voting date for the overall
exit process and other routine matters concerned with the actual
process of exiting bankruptcy.
The Motion to the court lists all of Intelsat's debt-holders many
of which are spread through dozens of Intelsat intercompany and
sister businesses. Many are entitled to vote on the exit plan
dependent on whether the debt is in a 'Voting Class' or 'Non-Voting
Class'. Intelsat is recommending that holders of claims should vote
to accept its exit plan.
There are a few hurdles, not least the SES vs Intelsat claim for a
greater share of the FCC's C-band incentive payments, plus the SES
action for substantial damages to be levied against Intelsat. The
bankruptcy judge can ring-fence these claims until a decision is
resolved one way or another, although the court can approve the
exit plan if its wishes.
The key dates for the SES claim against Intelsat are September
20th, when a trial is due to commence and take two weeks. By
August 16, 2021, both parties must inform the court of the
witnesses they intend calling.
About Intelsat S.A.
Intelsat S.A. -- http://www.intelsat.com/-- is a publicly held
operator of satellite services businesses, which provides a diverse
array of communications services to a wide variety of clients,
including media companies, telecommunication operators, internet
service providers, and data networking service providers. It is
also a provider of commercial satellite communication services to
the U.S. government and other select military organizations and
their contractors. The company's administrative headquarters are
in McLean, Virginia, and the Company has extensive operations
spanning across the United States, Europe, South America, Africa,
the Middle East, and Asia.
Intelsat S.A. and its debtor affiliates concurrently filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Lead Case No. 20-32299) on May 13, 2020. The
petitions were signed by David Tolley, executive vice president,
chief financial officer, and co-chief restructuring officer. At the
time of the filing, the Debtors disclosed total assets of
$11,651,558,000 and total liabilities of $16,805,844,000 as of
April 1, 2020.
Judge Keith L. Phillips oversees the cases.
The Debtors tapped Kirkland & Ellis LLP and Kutak Rock LLP as legal
counsel; Alvarez & Marsal North America, LLC as restructuring
advisor; PJT Partners LP as financial advisor & investment banker;
Deloitte LLP as tax advisor; and Deloitte Financial Advisory
Services LLP as fresh start accounting services provider. Stretto
is the claims and noticing agent.
The U.S. Trustee for Region 4 appointed an official committee of
unsecured creditors on May 27, 2020. The committee tapped Milbank
LLP and Hunton Andrews Kurth LLP as legal counsel; FTI Consulting,
Inc. as financial advisor; Moelis & Company LLC as investment
banker; Bonn Steichen & Partners as special counsel; and Prime
Clerk LLC as information agent.
JEFFERIES FINANCE: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
------------------------------------------------------------------
S&P Global Ratings revised its outlook on Jefferies Finance LLC
(JFIN) to stable from negative. At the same time, S&P affirmed its
'BB-' issuer credit and senior secured debt ratings on JFIN.
The outlook revision reflects JFIN's reduction in leverage and
strong operating results, while asset quality risks are receding.
Though we view JFIN's substantial underwriting and undrawn revolver
commitments as substantial relative to its sources of liquidity,
the likelihood of a liquidity stress or downgrade has diminished in
light of the reopening of the U.S. economy and favorable financing
conditions.
JFIN's leverage declined to 3.7x debt to ATE, as of February 2021,
from a recent high of 5.0x as of May 2020. At the same time,
operating results have continued to improve since the onset of the
pandemic, with JFIN posting record net income of $61 million in
first-quarter 2021 on strong net fee generation arising from strong
leveraged finance business volumes. Provisions for loan losses were
modest because asset quality risks have receded.
As of February 2021, underwriting commitments were $1.4 billion
(net of $2.5 billion syndicated to third parties) and undrawn
commitments to portfolio companies totalled $2.9 billion. S&P said,
"While JFIN has historically been successful in managing its
underwriting commitments, we believe liquidity could be strained in
stress scenarios where syndication becomes more difficult and draws
on revolvers by portfolio companies increase. We reflect these
risks in our moderate liquidity assessment. (Previously we had
reflected these risks in our risk position assessment.)"
S&P said, "We expect JFIN will maintain leverage under 4.5x debt to
ATE over the next 12 months and successfully manage its
underwriting and undrawn commitments. We also expect parents
MassMutual Life Insurance Co. and Jefferies Group to continue to
support JFIN and that the company will remain at least moderately
strategically important to parent Jefferies."
S&P could lower the ratings in the next 12 months if:
-- Liquidity becomes strained, perhaps due to underwriting
commitments or draws on revolvers by portfolio companies;
-- Debt to ATE rises above 4.5x; or
-- Jefferies reduces its commitment to JFIN.
S&P could raise its ratings if JFIN significantly increases
available liquidity relative to its underwriting and undrawn
commitments, or it reduces and sustains leverage below 2.75x debt
to ATE.
KATERRA INC: Court Okays Ch. 11 Loan Deadline Extension
-------------------------------------------------------
Law360 reports that bankrupt construction technology firm Katerra
received permission from a Texas bankruptcy court Monday, July 12,
2021, for changes to its $35 million debtor-in-possession financing
to extend the deadlines for obtaining final approval of the loan
and altering the size and frequency of loan draws by the debtor.
During an emergency virtual hearing, debtor attorney Christine A.
Okike of Kirkland & Ellis LLP said the changes to the company's DIP
loan had been agreed to by its lenders and the official committee
of unsecured creditors and were critical to the success of Katerra
Inc.'s Chapter 11 case.
About Katerra Inc.
Based in Menlo Park, Calif., Katerra Inc. is a Japanese-funded,
American technology-driven offsite construction company. Katerra
was founded in 2015 by Michael Marks, former chief executive
officer of Flextronics and former Tesla interim CEO, along with
Fritz Wolff, the executive chairman of The Wolff Co. It offers
technology-driven design, manufacturing, and assembly solution for
bathroom pods, door and window, furniture, and modular utility
systems.
Katerra and its affiliates sought Chapter 11 protection (Bankr.
S.D. Texas Lead Case No. 21-31861) on June 6, 2021. In its
petition, Katerra disclosed assets of between $500 million and $1
billion and liabilities of between $1 billion and $10 billion.
Judge David R. Jones oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Jackson Walker, LLP as
bankruptcy counsel; Houlihan Lokey Capital, Inc. as investment
banker; Alvarez & Marsal North America, LLC as financial and
restructuring advisor; and KPMG, LLP as tax consultant. Prime Clerk
LLC is the claims and noticing agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on June 22,
2021. The Committee is represented by Fox Rothschild, LLP.
L'OCCITANE INC: Files Plan After Closing 40 Stores
--------------------------------------------------
Alex Wolf of Bloomberg Law reports that the bankrupt U.S. unit of
L'Occitane International SA filed a plan to repay its creditors in
full after shuttering 40 of its retail locations.
L'Occitane Inc.'s plan, filed July 9, would restructure about $161
million in debt, some $21 million of which is owed to general
unsecured creditors. French parent company L’Occitane
International is funding the plan.
The body, face, fragrance, and home products retailer said it has
used the Chapter 11 process to right-size its "brick and mortar
footprint" in the U.S., reducing its store count from 166 to 126.
About L'Occitane Inc.
New York-based L'Occitane, Inc. -- http://www.loccitane.com/-- is
a national retail chain that sells and promotes the internationally
renowned "L'OCCITANE en Provence" beauty and well-being products
brand in the United States through boutiques in 36 states and its
website. After opening its first boutique in the U.S. in 1996, the
Company presently operates 166 boutiques in 36 states and Puerto
Rico.
Founded by Olivier Baussan more than 40 years ago,
Switzerland-based L'OCCITANE en Provence captures the true art de
vivre of Provence, offering a sensorial immersion in the natural
beauty and lifestyle of the South of France. From the texture of
L'OCCITANE products to the scent, each skincare, body care, and
fragrance formula promises pleasure through beauty and well-being
-- a moment rich in enjoyment and discovery that goes beyond
tangible benefits to create a different experience of Provence.
On Jan. 26, 2021, L'Occitane, Inc., filed a Chapter 11 petition
(Bankr. D.N.J. Case No. 21-10632). The Debtor estimated $100
million to $500 million in assets and liabilities as of the
bankruptcy filing. International operations are not part of the
Chapter 11 filing.
The Hon. Michael B. Kaplan is the case judge.
Fox Rothschild LLP is serving as the Company's legal counsel, RK
Consultants LLC is serving as financial advisor, and Hilco Real
Estate, LLC is serving as real estate advisor to the Company.
Stretto is the claims agent, maintaining the page
https://cases.stretto.com/LOccitane
LAREDO PETROLEUM: S&P Rates New $400MM Senior Unsecured Notes 'B'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '2'
recovery rating to U.S.-based crude oil and natural gas exploration
and production company Laredo Petroleum Inc.'s proposed issuance of
$400 million of senior unsecured notes due 2029. The '2' recovery
rating indicates its expectation for substantial (70%-90%; rounded
estimate: 70%) recovery of principal to creditors in the event of a
payment default.
S&P expects the company will use proceeds from the senior unsecured
notes primarily to repay borrowings on its reserve-based lending
(RBL) credit facility. As of July 8, 2021, Laredo had $410 million
drawn on its RBL, which has a $725 million borrowing base and
elected commitment amount. This includes the amount drawn to
finance, in part, the company's $715 million acquisition of oil and
gas properties from Sabalo Energy LLC, which closed on July 1,
2021. Laredo also closed on its $405 million sale of a working
interest in its legacy assets to Sixth Street Partners LLC on the
same date.
S&P does not expect the transactions to materially affect its
forecasted financial metrics for Laredo and therefore its 'B-'
issuer credit rating and stable outlook are unchanged.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario for Laredo assumes sustained
low commodity prices consistent with the conditions of past
defaults in this sector.
-- S&P based its valuation of the company's reserves on a
company-provided PV10 report as of July 1, 2021, using its recovery
price deck assumptions of $50 per barrel for West Texas
Intermediate crude oil and $2.50 per million Btus for Henry Hub
natural gas.
-- S&P's analysis assumes that the lender commitments on the
company's senior secured RBL facility are maintained at current
levels and the facility is fully drawn up to the current $725
million elected commitment amount before default.
Simulated default assumptions
-- Simulated year of default: 2023
Simplified waterfall
-- Net estimated valuation (after 5% administrative costs): $1,732
million
-- Secured first-lien debt claims: $716 million
-- Recovery expectations: Not applicable
-- Value available to repay senior unsecured claims: $1,016
million
-- Senior unsecured debt claims: $1,401 million
--Recovery expectations: 70%-90% (rounded estimate: 70%)
Note: All debt amounts include six months of prepetition interest.
LIMETREE BAY: Case Summary & 30 Largest Unsecured Creditors
-----------------------------------------------------------
Six affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Limetree Bay Services, LLC (Lead Case) 21-32351
11100 Brittmore Park Drive
Houston, TX 77041
Limetree Bay Refining Holdings, LLC 21-32352
Limetree Bay Refining Holdings II, LLC 21-32353
Limetree Bay Refining, LLC 21-32354
Limetree Bay Refining Operating, LLC 21-32355
Limetree Bay Refining Marketing, LLC 21-32356
Business Description: The Debtors own and operate an oil refinery
located on the island of St. Croix in the
United States Virgin Islands. The Refinery
is part of a 2,000-acre industrial complex
located on the southern coast of St. Croix
comprised of (a) the Refinery and (b) an oil
storage facility (or terminal) and docks
owned and operated by non-debtor affiliates
of the Debtors.
Chapter 11 Petition Date: July 12, 2021
Court: United States Bankruptcy Court
Southern District of Texas
Judge: David R. Jones
Debtor's Counsel: Elizabeth A. Green, Esq.
Jimmy D. Parrish, Esq.
BAKER & HOSTETLER LLP
200 S. Orange Avenue
Suite 2300
Orlando, FL 32801
Tel: 407-649-4000
Fax: 407-841-0168
Email: egreen@bakerlaw.com
jparrish@bakerlaw.com
- and -
Jorian L. Rose, Esq.
BAKER & HOSTETLER LLP
45 Rockefeller Plaza
New York, New York
Tel: 212.589.4200
Fax: 212.589.4201
Email: jrose@bakerlaw.com
Debtor's
Restructuring
Advisor: B. RILEY FINANCIAL, INC.
Debtors'
Notice &
Claims
Agent: BMC GROUP, INC.
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $0 to $50,000
The petition was signed by Mark Shapiro, chief restructuring
officer.
A full-text copy of Limetree Bay Services, LLC's petition is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/V6JY7CY/Limetree_Bay_Services_LLC__txsbke-21-32351__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Universal Plant Trade Debt $24,423,282
Services, (VI), LLC
806 Seaco Court
Deer Park, TX 77536
Tel: 1-281-479-6000
Email: remittance@universalplant.com
2. Excel Construction & Trade Debt $22,325,200
Maintenance VI
8641 United Plaza Blvd.
Baton Rouge, LA 70809
Tel: 1-225-408-1300
Email: wbyrd@excelusa.com
3. Elite Turnaround Specialists Trade Debt $15,330,475
225 S.16th Street
LaPorte, TX 77571
Tel: 281‐867‐1125
Email: AR@eliteturnaround.com
4. BP Oil Supply Trade Debt $13,367,887
501 Westlake Park Blvd
Houston, TX 77079
5. Inserv Field Services USVI LLC Trade Debt $12,625,547
1900 N 161st East Avenue
Tulsa, OK 74116
Tel: 918‐234‐4150
Email: ar@inservusa.com
6. National Industrial Services, LLC Trade Debt $12,052,033
PO Box 1545
Kingshill, St. Croix VI 00851
Tel: 340‐277‐1071
Email: sjagrup@nisstx.com
7. Vivot Equipment Corporation Trade Debt $9,692,396
9010 Estate Cottage
Christiansted, VI 00820
Tel: 370-713-1100
Email: ar@vivot.vi
8. Cust-O-Fab, LLC Trade Debt $5,253,834
8888 West 21st Street
Sand Springs, OK 74063
Tel: 918-245-6685
Email: mwood@custofab.com
9. Versa Integrity Group, Inc. Trade Debt $4,196,472
4301 Hwy 27 South
Sulphur, LA 70665
Tel: 337-558-6071
Email: payments@versaintegrity.com
10. Altair Strickland V.I., LLC Trade Debt $4,106,717
1605 S. Battleground Road
La Porte, TX 77571
Tel: 281-478-6200
Email: rramirez@altairstrickland.com
11. Christiansted Equipment Ltd. Trade Debt $3,159,175
PO Box 368
Christiansted, St Croix, VI 00820
Email: tmoore@fmmafco.com
12. Dresser-Rand Company Trade Debt $3,065,097
100 E. Chemung St
Painted Post, NY 14870
Tel: 716-375-3000
Email: yric.scott.ext@siemens.com
13. Pinnacle Services, LLC Trade Debt $2,986,320
6002 Diamond Ruby
Christiansted, VI 00820
Email: canderson@pinnaclevi.com
14. Savage St. Croix, LLC Trade Debt $2,936,593
Dept. 418
Salt Lake City, UT 84130
Tel: 1‐801‐944‐6655
Email: accountsreceivable@savageservices.com
15. V.I. Industrial Trade Debt $2,891,802
Services, LLC
PMB #6002 Est.
Diamond Ruby
Christiansted, VI 00820
Tel: 561-267-7138
Email: mhenry@viisllc.com
16. Worley Pan American Trade Debt $2,630,761
5995 Rogerdale Road
Houston, TX 77072
Tel: 1-832-351-6000
Email: dave.wyvill@worley.com
17. Analytic Stress Relieving, Inc. Trade Debt $1,864,538
3118 W. Pinhook Road
Lafayette, LA 70505
Tel: 337-237-8790
Email: sarah@analyticstress.com
18. Baker Hughes Trade Debt $1,762,761
Oilfield Operations, Inc.
PO Box 301057
Dallas, TX 75303-1057
Tel: 281-276-5400
Email: arcccashapplication@bakerhughes.com
19. Complan USA LLC Trade Debt $1,689,410
16417 Squyres Road
Spring, TX 77379
Tel: 281‐957‐5777
Email: jfuhrman@complan.net
20. Coral Management Group LLC Trade Debt $1,634,277
435 N. 2nd Street
Lewiston, NY 14092
Tel: 716-754-5400
Email: mwurst@wtsonline.com
21. Reactor Resources LLC Trade Debt $1,544,407
3000 FM 517 W.
Alvin, TX 77511
Tel:1‐832‐544‐1163
Email: accounts@reactor-resources.com
22. Intertek USA, Inc. Trade Debt $1,508,767
200 Westlake Park Blvd, Suite 400
Houston, TX 77079
Tel: 1‐713‐543‐3600
Email: receivables@intertek.com
23. Dynamic Innovative Corporation Trade Debt $1,408,232
306 Williams Delight
Frederiksted, VI 00840
Email: jsamuel@dynamicorpvi.com
24. Sedgwick Claims Mgmt. Trade Debt $1,155,000
Services, Inc.
1833 Centre Point Circle
Suite 139
Naperville, IL 60639
Tel: 630-245-7000
Email: Roland.Riviere@sedgwick.com
25. Englobal U.S. Inc. Trade Debt $1,148,092
225 Portwall Street
Houston, TX 77029
Tel: 281-831-0534
Email: rocky.medina@englobal.com
26. Flowserve US Inc. Trade Debt $1,079,400
4179 Collections Center Drive
Chicago, IL 60693
Tel: 205-657-1918
Email: creditcentral@flowserve.com
27. Rockwell Automation Trade Debt $1,046,534
Puerto Rico, Inc.
Calle 1 Metro Office 6,
Suite 304
Guayabo, PR 00968
Tel: 1-787-300-6200
Email: dbromme@ra.rockwell.com
28. Stroock & Stroock & Legal Fees $1,045,427
Lavan LLP
180 Maiden Lane
New York, NY 10038-4982
Tel: 1-212-806-5400
Email: dazrilen@stroock.com
29. Gibson, Dunn & Crutcher LLP Legal Fees $1,010,485
811 Main Street
Houston, TX 77002
Tel: 1-213-229-7333c
Email: billing@gibsondunn.com
30. Control Associates Caribe Trade Debt $982,846
475 Street C
Guayabo, PR 00969-4272
Tel: 787-783-9200
Email: plee@control‐associates.com
LIMETREE BAY: Files Voluntary Chapter 11 Bankruptcy Petition
------------------------------------------------------------
Limetree Bay Refining, LLC and several of its affiliates
(collectively, "Limetree Bay" or the "Company") on July 12
disclosed that they have filed voluntary petitions under Chapter 11
of the U.S. Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of Texas (the "Court"). Limetree Bay
intends to use the Chapter 11 process to engage in discussions with
its lenders, creditors, equity owners and others to evaluate
options to maximize the value of the estate and recoveries for
stakeholders, including exploring a potential sale of its assets.
Limetree Bay has received commitments for up to $25 million in new
debtor-in-possession financing that, upon court approval, is
expected to provide sufficient liquidity to meet ongoing business
obligations related to the maintenance of the refinery during the
Chapter 11 process.
The Chapter 11 filing was necessitated in part by the recent
temporary suspension of Limetree Bay's petroleum refining and
processing operations on May 12, 2021 and the indefinite suspension
of its plans to restart the refinery due to severe regulatory and
financial constraints. Given the uncertainty related to the restart
of production and commercial sales of refined products, the Company
believes filing voluntary petitions under Chapter 11 is the most
prudent course of action. It is expected that management will
continue to be responsible for handling the care and maintenance of
the refinery and all other necessary day-to-day operations
throughout this process.
"We are extremely grateful to our investors, employees and business
partners for standing by us through the restart process and these
uncertain times," said Jeff Rinker, Limetree Bay's CEO. "Severe
financial and regulatory constraints have left us no choice but to
pursue this path, after careful consideration of all alternatives.
The Chapter 11 process provides Limetree with the clearest path to
maximize the value of our estate for our stakeholders while safely
preparing the refinery for an extended shutdown."
The parent of the Company expects to continue operations at its oil
storage terminal business.
The Company intends to provide further updates on the Chapter 11
proceedings when there are significant developments.
About Limetree Bay Refining
Limetree Bay Energy is a large-scale energy complex strategically
located in St. Croix, U.S. Virgin Islands. The complex consists of
Limetree Bay Refining, a refinery with peak processing capacity of
650 thousand barrels of petroleum feedstock per day, and Limetree
Bay Terminal, a 34-million-barrel crude and petroleum products
storage and marine terminal facility serving the refinery and
third-party customers.
Limetree Bay Refining, LLC, restarted operations in February 2021,
and is capable of processing around 200,000 barrels per day. Key
restart work at the site began in 2018, including the 62,000
barrels per day modern, delayed Coker unit, extensive
desulfurization capacity, and a reformer unit to produce clean,
low-sulfur transportation fuels. The restart project provided much
needed economic development in the U.S.V.I. and created more than
4,000 construction jobs at its peak.
Limetree Bay Refining, LLC and its affiliates sought Chapter 11
protection on July 12, 2021. The lead case is In re Limetree Bay
Services, LLC (Bankr. S.D. Tex. Case No. 21-32351). Limetree Bay
refining listed at least $1 billion in assets and at least $500
million in liabilities as of the bankruptcy filing.
Baker Hostetler is acting as legal counsel for the Company and B.
Riley Financial Inc. has been retained as restructuring advisor.
MADISON IAQ: S&P Alters Outlook to Negative, Affirms 'B' ICR
------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based Madison IAQ
LLC, a global provider of indoor air quality solutions, to negative
from stable and affirmed its 'B' issuer credit rating on the
company.
S&P said, "We also assigned our 'B' issue-level rating to the
company's proposed incremental $715 million term loan due 2028. The
negative outlook reflects elevated leverage in 2021 and the
potential for a more aggressive financial policy with leverage
being sustained above 7x on a sustained basis.
"We expect leverage to remain elevated over the next 12 months,
with increased risk of an aggressive financial policy or
integration-related disruptions leading to sustained high leverage.
The proposed acquisition of BAF, a manufacturer of fans and
controls for industrial, agricultural, commercial, and residential
use, will result in elevated debt leverage of above 8x in 2021 and
6x-6.5x in 2022. (Note we exclude pro forma EBITDA from our
leverage calculation.) In addition to the proposed $715 million
incremental term loan, Madison IAQ's parent expects to contribute
an additional $320 million of equity to fund the acquisition and
related expenses. As a result, we expect a tighter cushion at the
current rating due to the increased debt burden, in addition to the
potential integration risks, mainly associated with the previously
announced Nortek acquisition." In addition, an aggressive financial
policy with a continued focus on debt-funded acquisitions could
result in weaker credit metrics with leverage being sustained above
7x.
Benefitting Madison IAQ are favorable market conditions that should
allow the company to generate substantial free operating cash flow,
particularly given the company's manageable working capital and
capital spending requirements. S&P said, "We expect U.S. GDP to
grow by more than 6.5% in 2021 and 3.7% in 2022. Residential
construction and repair and remodeling spending should also remain
healthy during this timeframe. Further, our forecast assumes the
integration of the two recently acquired companies (Nortek and BAF)
will result in synergies being realized over the next 24 months.
Nevertheless, we view business combinations of this size to be
inherently risky, with potential practical and cultural challenges,
including achieving synergies in a timely manner and retaining key
personnel. These risks continue to present a downside to our base
case forecast."
The combined business will continue to benefit from improved scale
and profitability, but with limited scope and geographic diversity.
Madison IAQ will have more than $2.5 billion of annual revenue on a
pro forma basis, considerably more than the legacy business
generated. It should also generate EBITDA margins (not publicly
disclosed) at the higher end for building products manufacturers.
S& said, "We expect margins to hold or expand modestly despite
input costs inflation. Madison IAQ's improved scale should afford
purchasing synergies, offsetting increased input costs. S&P Global
Ratings assumes costs for copper, steel, and aluminum recede from
currently very high levels but remain well above average for the
next 24 months.
"While the company's scale is considerably improved, we view its
scope and geographic diversity to be limited, with more than 80% of
sales in the U.S. and products limited to the indoor air quality
industry, where it competes in some cases with much larger
competitors such as Carrier Global Corp. and Vertiv Group Corp."
That said, it has sound end-market mix--with residential
construction and repair and remodeling comprising almost one-third
of pro forma revenue--and its product mix within the indoor air
quality industry is varied (residential ventilation, bath fans, and
range hoods will account for 23% of pro forma revenue, air handling
units 10%, and data center cooling 10%).
The negative outlook reflects minimal cushion in the rating for
additional debt-financed acquisitions over the next 12 months. The
outlook also incorporates our view of the potential for modestly
improving credit metrics over the next year in an environment where
an improving domestic economy and a heightened awareness of indoor
air quality issues, raised by the pandemic, are expected to support
good demand for Madison IAQ's products.
S&P will lower its ratings on Madison IAQ if adjusted debt to
EBITDA is not trending firmly to below 7x over the next year. This
could occur if EBITDA margins are 250 basis points below our
forecast level because of any combination of adverse factors,
including the loss of several large customers, weaker sales
generally, the inability to pass through higher-than-expected input
costs, and the inability to achieve synergies because the
integration does not proceed smoothly. This scenario would likely
result in adjusted funds from operations (FFO) debt below 8% as
well.
Additional downside triggers include more aggressive than
anticipated financial policies, including large distributions to
its parent, debt-financed or otherwise, or any additional leveraged
acquisitions such that discretionary cash flow turns negative. Any
additional debt raised by the company in the next 12 months would
likely lead to a lower rating.
S&P said, "We could revise the outlook to stable within the next 12
months if leverage falls toward 6x. We expect leverage to remain
above this threshhold over this timeframe and believe it will take
two years for the company to demonstrate it has successfully
integrated the Nortek Air and BAF businesses and achieved planned
synergies. Additionally, we would expect FFO to debt to reach
double digits prior to revising the outlook to stable."
MALLINCKRODT PLC: Affiliates Tap PJT Partners as Financial Advisor
------------------------------------------------------------------
Mallinckrodt LLC and eight other affiliates of Mallinckrodt PLC
seek approval from the U.S. Bankruptcy Court for the District of
Delaware to employ PJT Partners, LP.
PJT Partners will serve as financial advisor for Marc Beilinson and
Sherman Edmiston III, members of the boards of managers and
directors of Mallinckrodt PLC's affiliates.
The firm's services include:
a. analyzing historical transactions involving Mallinckrodt
PLC's affiliates relevant to the managers' investigation into
matters relating to certain transactions and releases which
included, among other things, matters relating to the releases of
certain claims and causes of action proposed by Mallinckrodt PLC's
affiliates under the restructuring support agreement;
b. analyzing and reviewing due diligence to evaluate releases
under any Chapter 11 plan of reorganization;
c. analyzing historical intercompany claims arising among
Mallinckrodt PLC's affiliates, on the one hand, and Mallinckrodt
PLC and its subsidiaries, on the other hand;
d. analyzing issues related to recoveries of stakeholders under
the plan;
e. providing expert witness testimony prior to confirmation of a
Chapter 11 plan for Mallinckrodt PLC's affiliates concerning any of
the subjects encompassed by the services to be performed by the
firm; and
f. providing other necessary financial advisory services.
PJT Partners will be paid as follows:
a. A monthly advisory fee in the amount of $225,000.
b. A fee in the amount of $500,000 for each report prepared by
the firm, earned and payable upon the delivery of such final
report.
c. A fee in the amount of $500,000 for any testimony (whether at
deposition or in-court) provided by the firm.
The testimony fee will be earned and payable at the conclusion of
PJT Partners' testimony but not later than confirmation of a
Chapter 11 plan. The firm is entitled to only one testimony fee.
PJT Partners will also be reimbursed for out-of-pocket expenses
incurred.
Mark Buschmann, a partner at PJT Partners, 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:
Mark Buschmann
PJT Partners LP
280 Park Avenue
New York, NY 10017
Tel: (212) 364-7800
Email: info@pjtpartners.com
About Mallinckrodt PLC
Mallinckrodt is a global business consisting of multiple
wholly-owned subsidiaries that develop, manufacture, market and
distribute specialty pharmaceutical products and therapies. The
company's Specialty Brands reportable segment's areas of focus
include autoimmune and rare diseases in specialty areas like
neurology, rheumatology, nephrology, pulmonology and ophthalmology;
immunotherapy and neonatal respiratory critical care therapies;
analgesics; and gastrointestinal products. Its Specialty Generics
reportable segment includes specialty generic drugs and active
pharmaceutical ingredients. Visit http://www.mallinckrodt.comfor
more information.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware in the U.S. (Bankr. D.
Del. Lead Case No. 20-12522) to seek approval of a restructuring
that would reduce total debt by $1.3 billion and resolve
opioid-related claims against them.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins LLP and Richards, Layton &
Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray
LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim
Securities LLC as investment banker; and AlixPartners LLP as
restructuring advisor. Prime Clerk, LLC is the claims agent.
The official committee of unsecured creditors retained Cooley LLP
as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon
Advisers LLC as its financial advisor.
On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an
official committee of opioid related claimants. The OCC tapped
Akin Gump Strauss Hauer & Feld LLP as its lead counsel, Cole Schotz
as Delaware co-counsel, Province Inc. as financial advisor, and
Jefferies LLC as investment banker.
On April 20, 2021, the Debtors filed their plan of reorganization
and disclosure statement.
MCGRAW-HILL EDUCATION: S&P Affirms 'B-' ICR on Leveraged Buyout
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
McGraw-Hill Education Inc. (MHE). S&P will withdraw the issuer and
issue-level ratings on its borrowing subsidiaries at the close of
the transaction.
S&P said, "At the same time, we assigned our 'B-' rating and '3'
recovery rating to the company's proposed senior secured debt and
our 'CCC' rating and '6' recovery rating to the senior unsecured
notes.
"The stable outlook reflects our expectation that MHE will maintain
positive FOCF and reduce leverage through EBITDA growth. We believe
the company will keep expanding EBITDA margins through higher
digital billings and continued cost-reduction efforts over the next
12-18 months.
"We expect MHE to generate positive FOCF despite the sharp debt
increase. Despite roughly $1 billion of additional debt pro forma
for the transaction, we expect MHE to generate continued positive
FOCF because of higher earnings and a modest decline in annual
interest costs of about $30 million. We expect FOCF to debt of
about 4%-5% over the next 12-18 months. Following transaction
close, we expect S&P Global Ratings' adjusted leverage will
increase to about 9x from 5.6x at the end of fiscal 2021. However,
we expect leverage will decline to around 8x in fiscal 2022 from
revenue growth across most of its business segments and margin
expansion from higher digital sales and operational improvements.
We believe the company will use excess cash for business investment
and tuck-in acquisitions. Therefore, we believe earnings growth
will drive credit metric improvement."
MHE has executed on its previous $100 million cost rationalization
program with $55 million achieved in fiscal 2021 and approximately
$50 million of costs savings already implemented and expected to be
realized over the next 12 months. S&P said, "Although we expect
higher capital expenditure (capex) and prepublication investments
over the next two years, we believe most of these reductions are
permanent. The significant savings will increase management's
flexibility to increase product and business investments to compete
with better-capitalized peers and reduce its high debt burden."
S&P said, "Operating performance was better than expected last year
despite disruptions from the coronavirus pandemic, and we believe
the company is well-positioned to expand over the next two
years.GAAP revenue decreased just 2.5% while adjusted EBITDA
(including amortization of prepublication costs) increased
approximately 70% mainly due to lower operating costs and higher
digital billings. We expect revenue to increase in the
low-single-digit percentage area in fiscal 2022 from increasing
penetration for its digital products in the higher education market
(82% of total billings is digital), growth in K-12 education from
delayed adoptions last year, and recovery in the global
professional and international segments that were impaired by the
pandemic because a larger percentage of revenue is print. Although
not in our base case assumption, longer term we believe the company
could benefit from education-related stimulus funding to states,
particularly in the K-12 market as digital adoptions lag the higher
education segment. Digital-only accounts for 42% of total K-12
billings. We believe this could accelerate digital billings and
reduce the company's cash flow volatility during the low period of
the state adoption cycle."
MHE has a good market position in higher education and K-12. Its
solid market position as one of the three largest U.S. providers in
both markets continues to underpin our assessment of MHE's
business. Its higher education segment benefits from strong brand
recognition and a breadth of titles, including long-respected
titles across key subject areas. However, the company has a narrow
product focus in educational solutions, with longer-term exposure
to declining higher education enrollment, pricing pressures, and
competition from larger peers, used and rental textbooks, and open
educational resources. In addition, cash flows from its K-12
segment can be volatile because of cyclical state and local
budgetary spending as well as intense competition for state
adoption. MHE has made good progress in transitioning its offerings
to digital amid higher education's secular challenges the past few
years, resulting in more predictable cash flow and improved working
capital. Digital billings accounted for 82% of the higher education
segment in fiscal 2021 compared with about 57% in 2017 and
accelerated over the past two years because of increased virtual
learning due to the pandemic and from good execution by
management.
The stable outlook reflects S&P's view that EBITDA will continue to
improve over the next 12 months from cost savings and digital
billings growth. S&P expects FOCF to debt of about 4%-5% and
leverage in the mid- to high-8x area over the next 12 months.
S&P could lower the rating over the next 12 months if:
-- MHE's operating performance deteriorated, weakening cash flow
generation; and
-- FOCF to debt declines below 3% on a sustained basis. This
underperformance could include greater competition and market share
losses.
S&P could raise the rating if the company:
-- Generated consistent organic growth;
-- Executed its cost initiatives; and
-- Used excess cash flow to reduce debt, such that leverage
declined and remained below 7x.
MISTER CAR: S&P Upgrades ICR to 'B' on Debt Reduction Through IPO
-----------------------------------------------------------------
S&P Global Ratings S&P Global Ratings raised its issuer credit
rating on U.S.-based conveyor car wash operator Mister Car Wash
Holdings Inc. (MCW) to 'B' from 'B-'.
At the same time, S&P raised its rating on the company's first-lien
debt to 'B' from 'B-'. Its '3' recovery rating is unchanged.
The stable outlook reflects S&P's view that MCW will increase
revenues significantly and maintain higher margins as it recovers
from the effects of the pandemic, leading to modest EBITDA
expansion and leverage below 5x at fiscal year-end December 2021.
The upgrade reflects significant debt reduction with IPO proceeds,
which provides the company with greater headroom to execute on
operating initiatives. S&P said, "In our February research update,
we outlined expectations for S&P-adjusted leverage in the high-6x
area at fiscal year-end 2021. However, with the debt paydown and an
upward revision to our forecast based on recent performance, we now
anticipate leverage will be just below 5x in 2021. We also believe
the company has reached a level of scale and profitability that
will allow it to fund growth (both organic and inorganic) with
internally generated cash. This should reduce reliance on debt
issuance to finance acquisitions, which has been the company's
historic funding strategy. Though private equity sponsor Leonard
Green remains the controlling owner of the company with roughly 78%
ownership following the IPO, we believe public ownership decreases
the likelihood of a significant leveraging event. Given these
factors, we are revising our financial risk profile score to
aggressive, and our financial policy score to FS-5."
Mister Car Wash used IPO proceeds to fully repay the second-lien
term loan (about $243 million) and roughly a quarter of the
first-lien term loan, which now has about $615 million outstanding.
In addition, the company also upsized its cash flow revolver to
$150 million and extended the maturity to 2026, which enhances
liquidity.
Expanding Unlimited Wash Club (UWC) membership and a focus on
Express Exterior locations will be key drivers of performance over
the next 12-24 months. Customer engagement with the UWC membership
continued to grow at a significant rate through fiscal 2020
(roughly 22% year-over-year) and into the first quarter. S&P said,
"Members provide a more predictable and consistent stream of
revenues for the company, and we believe they are a much stickier
consumer than nonmembers. As of the first quarter of 2021,
membership revenues represented more than 60% of total. We
anticipate that membership will expand more over the next several
years, though likely at a slower pace, contributing to our revenue
growth forecast."
MCW has also generated higher levels of profitability in recent
quarters, with S&P Global Ratings-adjusted EBITDA margins in the
fourth quarter expanding 450 basis points year-over-year. This was
in part due to an increased mix of higher-margin exterior washes as
a percent of sales, as well as positive impacts from labor model
optimizations we expect to persist, and divestiture of lower-margin
quick lube facilities. S&P said, "We believe the shift to exterior
washes, which occurred because of consumers' concerns around health
and safety during the pandemic, will modestly reverse as the
vaccination rate in the U.S. ticks up. However, we anticipate that
unit growth (which we forecast in the high-single-digit percents
annually) will be focused on express exterior locations. These
units have lower labor requirements, which increase their
profitability relative to interior cleaning locations. Therefore,
we anticipate a positive margin impact as they form a larger
portion of the store base over the next several years. As a result,
we forecast that S&P Global Ratings-adjusted EBITDA margins will
remain around 40% over the next several years with modest
expansion."
S&P said, "MCW has small operating scale in a competitive and
fragmented industry and we believe its rapid growth strategy
carries significant execution risk. We also highlight some regional
concentration of car wash units, which increases exposure to
volatility stemming from unique regional impacts (such as weather
events). Though the company is the largest car wash operator in the
U.S., it represents less than 5% of the industry by unit count with
less than $1 billion of annual revenues. As such, we believe the
company is more likely to be impaired by external events versus
larger, higher-rated issuers.
"We view the company's plans to shift its growth toward greenfield
locations as carrying meaningful execution risks given its more
limited record of organic growth. The company previously focused on
acquiring existing car wash operators and has a demonstrated track
record of integrating them and driving profit expansion. We expect
the greenfield growth strategy will lead to a substantial increase
in capital expenditures to about $140 million annually. This
expanded investment will depress free operating cash flow
generation, which we forecast to be only slightly positive in 2021,
then increasing to roughly $30 million-$40 million in fiscal 2022.
As a result of the company's small size and execution risks
associated with the rapid growth strategy, we apply a negative
comparable ratings analysis modifier.
"The stable outlook reflects our expectation that leverage will
remain under 5x as the company resumes its growth strategy
following the pandemic, leading to good annual revenue growth,
modest EBITDA expansion, and modest improvement in credit
metrics."
S&P could lower the rating if:
-- Performance declines materially, which would be demonstrated by
meaningfully negative same-store sales and EBITDA margin declines,
leading S&P to believe the company's competitive position has
weakened.
-- S&P anticipates leverage will increase to and remain above 6x
on a sustained basis, potentially due to aggressive leveraging
actions taken by the sponsor.
S&P could raise the rating if:
-- S&P expects leverage will decline to below 4x and be sustained
at that level, likely requiring further sponsor ownership
reduction.
-- The company successfully executes on its growth strategy and
express service transformation, demonstrated by modest continual
improvements in profitability and comparable sales growth, leading
S&P to believe its competitive position has improved.
MJ GRAPHICS INC: Taps Ken Wood & Associates as Accountant
---------------------------------------------------------
MJ Graphics, Inc. seeks approval from the U.S. Bankruptcy Court for
the Southern District of Texas to employ Ken Wood & Associates,
P.C. as its accountant.
The firm will provide monthly accounting and financial services to
the Debtor.
April Davis, the firm's accountant who will be providing the
services, will be paid at the rate of $185 per hour. Associates
and other professionals are billed at $85 to $285 per hour.
Ken Wood & Associates will receive reimbursement for out-of-pocket
expenses incurred.
Ms. Davis 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:
April V. Davis
Ken Wood & Associates, P.C.
14090 Southwest Fwy
Sugar Land, TX 77478
Tel: (281) 243-2300/(281) 243-2323
Email: ADavis@kenwoodpc.com
About MJ Graphics Inc.
MJ Graphics Inc. filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Texas Case No. 21-31596) on May 12, 2021. At the time of the
filing, the Debtor disclosed total assets of up to $100,000 and
total liabilities of up to $1 million. Judge Jeffrey P. Norman
oversees the case. Baker & Associates and Ken Wood & Associates,
P.C. serve as the Debtor's legal counsel and accountant,
respectively.
NATIONAL JEWELRY: Taps Luis D. Flores Gonzales as Legal Counsel
---------------------------------------------------------------
National Jewelry, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Puerto Rico to hire the Law Offices of Luis D.
Flores Gonzales to serve as legal counsel in its Chapter 11 case.
The firm's hourly rates are as follows:
Luis D. Flores Gonzales, Esq. $200 per hour
Certified Legal assistants $60 per hour
Paraprofessional persons $40 per hour
The Debtor paid $5,000 to the law firm as a retainer fee.
Luis D. Flores Gonzales, Esq., disclosed in a court filing that he
is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Luis D. Flores Gonzales, Esq.
Law Offices of Luis D. Flores Gonzales
Ave. Ponce De Lleon 1225, Suite MZ-9
VIG Tower, Santurce, PR 00907
Tel.: 787-758-3606
Email: ldfglaw@yahoo.com
About National Jewelry
National Jewelry, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D.P.R. Case No. 21-01742) on June 4, 2021.
At the time of the filing, the Debtor reported total assets of up
to $50,000 and total liabilities of up to $500,000. Judge Enrique
S. Lamoutte Inclan oversees the case. The Debtor is represented by
the Law Offices of Luis D. Flores Gonzales.
NET ELEMENT: Inks Master Exchange Agreement With ESOUSA
-------------------------------------------------------
Net Element, Inc. entered into a master exchange agreement with
ESOUSA Holdings, LLC. Prior to entering into the Agreement, ESOUSA
agreed to acquire the existing promissory notes that had been
previously issued by the Company, of up to $15,000,000 in principal
amount outstanding plus interest due to RBL Capital Group, LLC.
Pursuant to the Agreement, the Company has the right, at any time
prior to July 8, 2022, to request ESOUSA, and ESOUSA agreed upon
each such request, to exchange such promissory notes in tranches on
the dates when the Company instructs ESOUSA, for such number of
shares of the Company's common stock as determined under the
Agreement based upon the number of shares of Common Stock (already
in ESOUSA's possession) that ESOUSA sold in order to finance its
purchase of such tranche of the promissory note from RBL Capital
Group, LLC. ESOUSA will purchase each tranche of the promissory
note equal to 88% of the gross proceeds from the shares of Common
Stock sold by ESOUSA to finance the purchase of such Exchange
Amount from RBL Capital Group, LLC. Each such tranche to be
$100,000 unless otherwise agreed to in writing by the Company and
ESOUSA.
Such shares of restricted common stock of the Company are issuable
to ESOUSA under an exemption from the registration requirements of
the Securities Act of 1933, as amended, in reliance upon Section
3(a)(9) of the Securities Act.
The Agreement provides that the Company will not effect any
exchange or otherwise issue any shares of Common Stock under the
Agreement if, after giving effect to such exchange or other share
issuance under the Agreement, ESOUSA and its affiliates would
beneficially own in excess of 9.99% of the outstanding Common
Stock. The Agreement further provides that, under no circumstances
may the aggregate number shares of Common Stock issued to ESOUSA
under the Agreement at any time exceed 19.99% of the total number
of shares of Common Stock outstanding or of the voting power unless
the Company has obtained either (i) its stockholders' approval of
the issuance of more than such number of shares of Common Stock
pursuant to NASDAQ Marketplace Rule 5635(d) or (ii) a waiver from
The NASDAQ Stock Market of the Company’s compliance with Rule
5635(d).
The Agreement provides that, to the extent that issuance of any
number of shares of Common Stock will cause the ESOUSA's beneficial
ownership of the Common Stock to exceed 9.99% of the outstanding
Common Stock, ESOUSA will have the option to request the Company,
in lieu of issuing such shares of Common Stock that would cause
ESOUSA's beneficial ownership of the Common Stock to exceed 9.99%
of the outstanding Common Stock, issue to ESOUSA warrants, to
purchase, at a purchase price of $0.01 per share, the number of
shares of Common Stock that would cause ESOUSA's beneficial
ownership to exceed 9.99% of the outstanding Common Stock.
Equity Grants
On July 6, 2021, the Compensation Committee of the Board of
Directors of the Company, as part of the 2020 incentive
compensation, approved and authorized grants of the following
equity awards pursuant to the Company's 2013 Equity Incentive
Compensation Plan, as amended:
(i) 89,041 shares of the Company common stock, vesting
immediately on the grant date, to Oleg Firer, the chief
executive officer of the Company,
(ii) 29,110 shares of the Company common stock, vesting
immediately on the grant date, to Steven Wolberg, the chief
legal officer of the Company; and
(ii) 7,763 shares of the Company common stock, vesting
immediately
on the grant date, to Jefferey Ginsberg, the chief
financial
officer of the Company.
About Net Element
Headquartered in North Miami Beach, Florida, Net Element, Inc.
(NASDAQ: NETE) -- http://www.NetElement.com-- operates a
payments-as-a-service transactional and value-added services
platform for small to medium enterprise ("SME") in the U.S. and
selected emerging markets. In the U.S. it aims to grow
transactional revenue by innovating SME productivity services using
blockchain technology solutions and Aptito, its cloud-based,
restaurant and retail point-of-sale solution. Internationally, Net
Element's strategy is to leverage its omni-channel platform to
deliver flexible offerings to emerging markets with diverse
banking, regulatory and demographic conditions.
Net Element reported a net loss attributable to the Company's
stockholders of $5.94 million for the year ended Dec. 31, 2020,
compared to a net loss attributable to the Company's stockholders
of $6.46 million for the year ended Dec. 31, 2019. As of Dec. 31,
2020, the Company had $26.83 million in total assets, $24.34
million in total liabilities, and $2.48 million in total
stockholders' equity.
NTH SOLUTIONS: Wins Cash Collateral Access Thru August 11
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
has authorized Nth Solutions, LLC to use cash collateral through
August 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 August 11 at 11 a.m.
A copy of the order and the Debtor's budget is available for free
at https://bit.ly/3wsIojD from PacerMonitor.com.
The Debtor projects total expenses of $89,381 for the period from
July 12 to August 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.
PARADISE REDEVELOPMENT: Wins Cash Collateral Access Thru Sept. 1
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
has authorized Paradise Redevelopment Company, LLC to use cash
collateral on an interim basis through September 1, 2021.
The Debtor is authorized to use the rents received from the 4-plex
located at 2118 Addison Avenue, East Palo Alto, California, only
for the purposes of repairing the 4-plex, payment of utilities owed
on it, and payment of a management fee in an amount not to exceed
$2,500 per month to the Debtor's owner, Juan Carlos Casas.
A final hearing on the Motion is scheduled for August 26 at 10
a.m.
A copy of the order is available at https://bit.ly/3hSON25 from
PacerMonitor.com.
About Paradise Redevelopment Company
San Jose, Calif.-based Paradise Redevelopment Company, LLC filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Calif. Case No. 21-50596) on April 27, 2021. Juan
Carlos Casas, managing member, signed the petition.
The Debtor owns the 4-plex located at 2118 Addison Avenue, East
Palo Alto, At the time of filing, the Debtor listed up to $50,000
in assets and $1 million to $10 million in liabilities.
Judge Elaine M. Hammond oversees the case.
Stanley A. Zlotoff, Esq., serves as the Debtor's legal counsel.
PEABODY ENERGY: S&P Cuts ICR to SD on Distressed Debt Repurchases
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
coal producer Peabody Energy Corp. to 'SD' (selective default) from
'CCC' and the rating on the 2024 notes, 2025 term loan, and 2025
notes to 'D' from 'CCC-'. S&P also lowered the rating on the LOC
facility to 'CC' from 'CCC-'. The rating on the 2022 notes remains
'D'.
Peabody Energy announced a tender offer to purchase up to $13.281
million of its 8.5% senior secured notes due in 2024 and letters of
credit (LOC) revolving facility due in 2024 at a discount to par.
The offer was made to satisfy the requirements under the indenture
and the credit agreement.
Under the tender offer, lenders are eligible to receive $738.40
cash for every $1,000 of accredited value of the debt and LOC
facility.
S&P said, "The downgrade follows the debt repurchases and announced
below-par tender offer that we view as a distressed debt exchange
and tantamount to default. Peabody repurchased on the open market
approximately $53.13 million of principal outstanding of its senior
secured term loan due in 2025, 6.375% senior secured notes due in
2025, and 8.5% senior secured notes due in 2024 at 73.84% of par
during the second quarter. The company also announced a tender
offer to repurchase additional 2024 notes and LOC facility at the
same discount. We view the transactions as distressed and
tantamount to default because lenders are receiving less than
originally promised." Furthermore, the 'CCC' rating on Peabody
before the transactions indicates the company is vulnerable and
dependent on favorable business, financial, and economic
conditions--including sustained improvement in domestic thermal
coal demand and enhanced access to financing sources--to meet its
financial commitments.
S&P plans to lower the rating on the LOC facility to 'D' once the
tender is complete. Following the completion of the tender, it also
plans to reassess the issuer credit rating and the issue level
ratings on the term loan, LOC revolver, 2024 notes, and 2025
notes.
PERFORMANCE FOOD: S&P Affirms 'B+' ICR, Outlook Positive
--------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on
U.S.-based Performance Food Group Inc. (PFG).
S&P said, "At the same time, we assigned our preliminary 'B+'
issue-level rating and '4' recovery rating to the proposed $780
million senior unsecured notes due 2029. The preliminary '4'
recovery rating indicates our expectation for average (30%-50%;
rounded estimate: 30%) recovery in the event of a default. We also
placed our 'B' issue-level rating on the company's existing senior
unsecured notes on CreditWatch with positive implications because
we expect to raise the rating to 'B+' upon the close of the
acquisition.
"The positive outlook reflects the potential that we will raise our
rating on PFG over the next year if its base business continues to
recover, supported by improving sales trends and market share
gains, and we see a clear path for the successful acquisition and
integration of Core-Mark such that it would sustain S&P Global
Ratings-adjusted leverage of comfortably below 5x.
"The rating affirmation and positive outlook reflect our
expectation that the company's base business will continue to
recover while it successfully acquires and integrates Core-Mark
such that its S&P Global Ratings-adjusted leverage improves to the
mid-4x area, from the high-4x area, pro forma for the close of the
transaction. PFG's operating performance has continued to exceed
our expectations and we estimate its S&P Global Ratings-adjusted
leverage will be about 4x as of the end of fiscal year 2021." The
company's sales trends have improved sequentially supported by
rising demand. PFG's independent restaurant channel has continued
to outperform the broader category and take market share.
Specifically, its Pizza, Mexican, and Italian categories continue
to perform well.
Core-Mark is one of the largest wholesale distributors to the
convenience retail industry in North America. Its business is
primarily based in the U.S. (90% of its total sales) but it also
derives a small portion of its sales (10%) from Canada. The
company's product categories include cigarettes (62% of sales),
food, other tobacco products, and candy. S&P said, "We believe the
Core-Mark acquisition will increase PFG's scale and convenience
store distribution and expand its geographic reach, market
diversity, and customer base. In addition, we anticipate the
transaction will fill in some of the white space in its geographic
coverage by strengthening its position in the Western U.S.,
enhancing its footprint in the South, and providing entry to the
Canadian market. We also believe there is an opportunity for PFG to
broaden its foodservice capabilities in the convenience space. The
potential cost synergies from the transaction include savings on
corporate overhead, buying and procurement, warehouse operations,
and distribution. That said, we see some risk for renewed volume
declines in the tobacco sector."
PFG will fund the acquisition by issuing $1.067 billion of equity
to Core-Mark's shareholders, along with cash from additional ABL
borrowings and the net proceeds from its proposed $780 million
senior unsecured notes. S&P said, "We estimate the transaction will
be leveraging and forecast the company's pro forma leverage will be
in the high-4x area as of the end of fiscal year 2021 (ended June
30, 2021). We expect the company to improve its S&P Global
Ratings-adjusted leverage to the mid-4x area by the end of fiscal
year 2022. We believe PFG is well positioned due to its diversified
portfolio and channels, thus we expect its operating performance to
recover as rising coronavirus vaccination rates create a pathway
toward improving the demand for its services. While we recognize
the integration risk associated with large acquisitions, we expect
PFG to successfully integrate Core-Mark and achieve its targeted
cost synergies given its track record. In addition, we believe
there is little to no integration risk in the food distribution
business, which is managed separately."
The company's adequate liquidity will likely enable it to withstand
industry headwinds. PFG had about $2.1 billion of liquidity as of
the end of its fiscal third quarter, including $100 million of cash
and about $2 billion of availability under its ABL. The company is
planning to upsize its ABL to $4 billion from $3 billion as part of
the transaction. S&P said, "Therefore, we estimate PFG will likely
have about $2.6 billion of liquidity pro forma for the transaction.
We forecast this level of liquidity will be sufficient for it to
weather any potential industry headwinds through 2022."
S&P said, "The positive outlook on PFG reflects the potential that
we will raise our rating over the next year if its base business
continues to recover, supported by improving sales trends and
market share gains, and we see a clear path for it to successfully
acquire and integrate Core-Mark."
S&P could raise its rating on PFG over the next year if its
operating performance continues to improve such that it sustains
S&P Global Ratings-adjusted leverage of comfortably below 5x. This
could occur if:
-- The recovery in its base business remains on track with sales
and EBITDA approaching pre-coronavirus levels;
-- S&P sees a clear path for its to successfully acquire and
integrate Core-Mark; and
-- The company maintains its current financial policies and
commits to avoid large debt-financed acquisitions or share
repurchases that would materially increase its leverage.
S&P could revise its outlook on PFG to stable if:
-- It faces unfavorable industry trends or experiences unexpected
operating missteps such that S&P believes it will be unable to
sustain leverage of below 5x;
-- Its industry demand and cash flows remain well below pre-COVID
levels, potentially due to the spread of coronavirus variants that
lead to sustained government-imposed capacity restrictions on
restaurants or greater consumer hesitation around visiting
restaurants;
-- Its profitability deteriorates due to a deep and protracted
economic downturn; or
-- Potential food and labor-cost inflation weigh on its margins
and reduce the prospects that it will improve its credit ratios.
PLATINUM CORRAL: Asks for 45-Day Extension of Plan Deadline
-----------------------------------------------------------
Platinum Corral, L.L.C., moves the Bankruptcy Court for an order
allowing it an extension of time within which to file its Plan of
Reorganization and Disclosure Statement.
The Debtor needs additional time to negotiate with its secured
creditors and with the Unsecured Creditors Committee.
The Debtor accordingly requests an additional 45 days within which
to formulate and file its Plan of Reorganization and Disclosure
Statement.
This is the Debtor's first request for an extension of the Plan
deadline.
About Platinum Corral
Platinum Corral, LLC is a multi-unit franchise operator of Golden
Corral Buffet-Grill restaurants in North Carolina and Virginia. It
is based in Jacksonville, N.C.
Platinum Corral filed for Chapter 11 bankruptcy protection (Bankr.
E.D.N.C. Case No. 21-00833) on April 9, 2021. In the petition
signed by Louis William Sewell, III, president and chief executive
officer, the Debtor disclosed $11,254,441 in assets and $49,389,647
in liabilities.
Judge Joseph N. Callaway oversees the case.
The Debtor tapped Smith Anderson as legal counsel, Williams
Scarborough Gray LLP as accountant, and Capital Insight LLC as
financial, real estate and restructuring advisor.
On May 3, 2021, the official committee of unsecured creditors was
appointed in the Debtor's Chapter 11 case. Brinkman Law Group, PC,
Waldrep Wall Babcock & Bailey, PLLC and Dundon Advisers, LLC serve
as the committee's lead bankruptcy counsel, local counsel and
financial advisor, respectively.
POLYMER INSTRUMENTATION: Gets OK to Hire Chen & Fan as Accountant
-----------------------------------------------------------------
Polymer Instrumentation & Consultation Serices, Ltd. received
approval from the U.S. Bankruptcy Court for the Middle District of
Pennsylvania to employ Chen & Fan Accountancy Corp. as its
accountant.
The firm's services include the preparation of financial
statements, bankruptcy documents and annual tax returns.
The firm's hourly rates are as follows:
Partners $320 per hour
Manager $220 to $270 per hour
Senior Accountants $160 per hour
Staff Accountants $110 per hour
Chen & Fan will also be reimbursed for out-of-pocket expenses
incurred.
Paul Chen, managing partner at Chen & Fan, 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 Chen
Chen & Fan Accountancy Corp.
9660 Flair Drive, Suite 300
El Monte, CA 91731
Tel: (626) 279-1688
Fax: (626) 279-1888
Email: info@chenfancpa.com
About Polymer Instrumentation &
Consulting Services
Polymer Instrumentation & Consulting Services, Ltd., a State
College, Pa.-based firm that conducts business under the name
Polymics, filed a Chapter 11 petition (Bankr. M.D. Pa. Case No.
21-01056) on May 10, 2021. Tim T. Hsu, president of Polymer
Instrumentation, signed the petition. In its petition, the Debtor
disclosed between $1 million and $10 million in both assets and
liabilities.
Judge Henry W. Van Eck oversees the case.
The Debtor tapped Cunningham Chernicoff & Warshawsky P.C. as
bankruptcy counsel, Beard Law Company as special counsel, and Chen
& Fan Accountancy Corp. as accountant.
PROSPECT CAPITAL: S&P Rates New $100MM Preferred Stock 'BB'
-----------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue rating to Prospect
Capital Corp.'s (PSEC; BBB-/Negative/--) proposed issuance of $100
million in perpetual preferred stock. The preferred stock is rated
two notches below the 'BBB-' issuer credit rating on PSEC to
reflect subordination risk and the risk of deferability of
dividends (partial or untimely payment of dividends) on preferred
stock. PSEC expects to use the net proceeds for balance sheet
liquidity, including repayment of debt under its credit facility,
and to make investments.
S&P said, "We assess this hybrid instrument as having intermediate
equity content and, therefore, will include amounts issued and
outstanding in our calculation of adjusted total equity (ATE),
subject to a limit of 33% of adjusted common equity (ACE) for all
instruments that we have assessed as having intermediate equity
content. PSEC had issued $105.9 million of preferred stock as of
June 1, 2021.
"Our ratings on PSEC reflect its low leverage, favorable funding,
scale, and diversified originations. These factors are partially
offset by unfavorable performance in some of the company's largest
investments and relatively high exposure to equity and
collateralized loan obligation residual interests, which we believe
may be more volatile than typical business development company
investments.
"Reported net debt to equity was 0.56x as of March 31, 2021, and
debt to ATE was 0.87x. Our measure of ATE deducts from reported
equity investments in subordinated structured notes and equity in
finance companies." The company's unsecured funding leaves the
majority of its assets unencumbered. Its unsecured debt maturities
are well laddered with little refinancing risk because of the
modest size of individual maturities and significant undrawn
capacity on the revolving credit facility.
The negative outlook reflects proximity to our leverage tolerance
of 1.0x debt to ATE for the rating, significant net unrealized
depreciation in three of the company's largest investments at cost
(CP Energy Services, Pacific World, and United Sporting Cos.), and
its portfolio of subordinated structured notes. Over the next 12-24
months, S&P expects PSEC will manage debt to ATE under 1.0x and
maintain ample liquidity.
S&P said, "We could lower the ratings on PSEC if we do not expect
debt to ATE to remain below 1.0x on a sustained basis or if asset
quality weakens, in our view, either due to increased losses
(realized or unrealized) or rising loans on nonaccrual status.
"We could revise the outlook to stable if we expect PSEC to
maintain debt to ATE below 1.0x and asset quality stabilizes, in
our view."
PURDUE PHARMA: Asks Court to Hold $29 Million Employee Bonuses
--------------------------------------------------------------
Law360 reports that the U.S. Trustee's Office on Monday, July 12,
2021, asked a New York bankruptcy judge to reject Purdue Pharma's
request to pay up to $29 million in employee bonuses, saying that
with the company possibly on the verge of reorganization the issue
should be put on hold.
In a motion, U. S. Trustee William Harrington said while U.S.
Bankruptcy Judge Robert Drain had rejected arguments that Purdue's
two prior rounds of bonuses were too expensive and didn't
incentivize performance, the timing of the current proposal, just
weeks before the company's reorganization plan is slated to go
before the court for approval.
About Purdue Pharma LP
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation facing the Company.
The Company's consolidated balance sheet at Aug. 31, 2019, showed
$1.972 billion in assets and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain, in White Plains, New York, has
been assigned to oversee Purdue's Chapter 11 case.
Davis Polk & Wardwell LLP and Dechert LLP are serving as legal
counsel to Purdue. PJT Partners is serving as investment banker,
and AlixPartners is serving as financial advisor. Prime Clerk LLC
is the claims agent.
PURDUE PHARMA: Examiner Taps Squire Patton Boggs as Legal Counsel
-----------------------------------------------------------------
Stephen Lerner, the examiner appointed in the Chapter 11 cases of
Purdue Pharma L.P. and its affiliates, seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Squire Patton Boggs (US), LLP as his legal counsel.
The examiner needs legal assistance to investigate whether the
special committee of the Debtors' board of directors acted
independently and not under the direction or influence of the
Sackler families, the Debtors' ultimate beneficial owners, with
respect to the so-called shareholder settlement contemplated in the
Debtors' Chapter 11 plan of reorganization.
Scott Kane, Esq., the firm's attorney who will be assisting the
examiner in the investigation, will be paid at an hourly rate of
$795.
Squire Patton Boggs will be reimbursed for out-of-pocket expenses
incurred.
In a court filing, Mr. Kane disclosed that he and his firm are
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
Mr. Kane also disclosed the following in response to the request
for additional information set forth in Section D.1 of the U.S.
Trustee Guidelines:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing arrangements
for this engagement?
Answer: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Answer: 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.
Answer: Not applicable. Mr. Lerner was appointed as the
examiner on June 24, 2021.
Question: Has your client approved your prospective budget and
staffing plan, and, if so, for what budget period?
Answer: The order that authorized the appointment of the
examiner provides that the examiner and his legal counsel, Mr.
Kane, cannot exceed an aggregate budget of $200,000 for fees and
expenses to conduct the investigation and prepare the report.
Squire Patton Boggs can be reached at:
Scott A. Kane, Esq.
Squire Patton Boggs (US), LLP
201 E. Fourth Street, Suite 1900
Cincinnati, OH 45202
Tel: (513) 361-1220 / (513) 361-1240
Email: scott.kane@squirepb.com
About Purdue Pharma
Purdue Pharma L.P. and its subsidiaries --
http://www.purduepharma.com/-- develop and provide prescription
medicines and consumer products that meet the evolving needs of
healthcare professionals, patients, consumers and caregivers.
Purdue's subsidiaries include Adlon Therapeutics L.P., focused on
treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and
related disorders; Avrio Health L.P., a consumer health products
company that champions an improved quality of life for people in
the United States through the reimagining of innovative product
solutions; Imbrium Therapeutics L.P., established to further
advance the emerging portfolio and develop the pipeline in the
areas of CNS, non-opioid pain medicines, and select oncology
through internal research, strategic collaborations and
partnerships; and Greenfield Bioventures L.P., an investment
vehicle focused on value-inflection in early stages of clinical
development.
Opioid makers in the U.S. are facing pressure from a crackdown on
the addictive drug in the wake of the opioid crisis and as state
attorneys general file lawsuits against manufacturers. More than
2,000 states, counties, municipalities and Native American
governments have sued Purdue Pharma and other pharmaceutical
companies for their role in the opioid crisis in the U.S., which
has contributed to the more than 700,000 drug overdose deaths in
the U.S. since 1999.
OxyContin, Purdue Pharma's most prominent pain medication, has been
the target of over 2,600 civil actions pending in various state and
federal courts and other fora across the United States and its
territories.
On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated
debtors each filed a voluntary petition for relief under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
19-23649), after reaching terms of a preliminary agreement for
settling the massive opioid litigation. The Debtors' consolidated
balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets
and $562 million in liabilities.
U.S. Bankruptcy Judge Robert Drain oversees the cases.
The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as
legal counsel; PJT Partners as investment banker; AlixPartners as
financial advisor; and Grant Thornton, LLP as tax structuring
consultant. Prime Clerk LLC is the claims agent.
Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the
official committee of unsecured creditors appointed in the Debtors'
bankruptcy cases.
Stephen D. Lerner, Esq., and David M. Klauder, Esq., were appointed
as Chapter 11 examiner and fee examiner in the Debtors' cases. Mr.
Lerner is represented by Squire Patton Boggs (US), LLP while the
fee examiner is represented by Bielli & Klauder, LLC.
RESTORATIVE BRAIN: Case Summary & 18 Unsecured Creditors
--------------------------------------------------------
Debtor: Restorative Brain Clinic, Inc.
9229 Ward Parkway, Ste. 104
Kansas City, MO 64114
Business Description: Restorative Brain Clinic, Inc. owns and
operates a mental health facility for men,
women, and children in south Kansas City,
MO.
Chapter 11 Petition Date: July 13, 2021
Court: United States Bankruptcy Court
Western District of Missouri
Case No.: 21-40866
Judge: Hon. Dennis R. Dow
Debtor's Counsel: Ryan A. Blay, Esq.
WM LAW, PC
15095 West 116th Street
Olathe, KS 66062
Tel: (913) 422-0909
Fax: (913) 428-8549
E-mail: bankruptcy@wagonergroup.com
Total Assets: $117,100
Total Liabilities: $1,467,469
The petition was signed by William (Bill) Said, president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 18 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/5QSLZAQ/Restorative_Brain_Clinic_Inc__mowbke-21-40866__0001.0.pdf?mcid=tGE4TAMA
RIDGETOP AG: Seeks Cash Collateral Access
-----------------------------------------
Ridgetop Ag, LLC asks the U.S. Bankruptcy Court for the Western
District of Wisconsin for authority to use cash collateral in
accordance with the proposed budget and provide adequate protection
to secured creditors.
As part of its ongoing operations, the Debtor seeks to use its
income, accounts receivable, and equipment which are the cash
collateral of Swift Financial LLC d/b/a Swift Capital and Syngenta
Seeds, LLC. The Debtor estimate the total value the collateral to
be approximately $90,000 in real estate, $79,287.94 in Attorney
Doug Mann's trust account, $139,470 in accounts receivable, $23,663
in inventory, and approximately $263,250 in equipment, for a total
of approximately $595,670.94.
Prior to the Petition Date, the Debtor entered into financing
arrangements with Swift, which is owed $104,374.47 as of April 2021
pursuant to the notes.
Prior to the Petition Date, Syngenta took a judgment against the
Debtor. Subsequently Syngenta entered a receivership and began
pursuing the Debtor's assets. The Debtor owes Syngenta
approximately $85,000, pursuant to the judgment.
Swift's and Syngenta's interest in the cash collateral will be
adequately protected as the Debtor proposes the following:
a. Swift and Syngenta will retain a perfected post-petition
security interest to the same extent it held a perfected
pre-petition security interest in any of the Debtor's assets,
extending to cash collateral received by the Debtor post-petition;
b. Interest will accrue on the outstanding debt with Swift and
Syngenta at the contractual non-default interest rate as specified
in the underlying loan agreements.
c. The Debtor will also make adequate protection payments to
Syngenta monthly, in the amount of $1,191.42, beginning on or
before the 15th day following the entry of on order granting the
Motion.
d. In addition to the payments. Attorney Douglas F. Mann,
court appointed receiver is holding $79,287.94 in his trust
account. Syngenta and Swift have already made an agreement which
was approved by Crawford County Court- Debtor seeks to honor this
agreement. The Debtor requests authority from the Court to:
(i) Pay to Swift $75,000.
(ii) Pay to Syngenta $4,287,94
e. The Debtor will maintain insurance coverage on all
collateral.
f. If the Debtor defaults in any of the conditions of adequate
protection provided, Swift and Syngenta will provide the Debtor and
its counsel with a written notice of default. If the default has
not been cured within 10 days after Notice of Default is mailed,
each of Swift and Syngenta may request a hearing to consider relief
from the automatic stay provided by 11 U.S.C. section 362 to allow
it to proceed to appropriate remedies.
A copy of the motion and the Debtor's budget from July to October
2021 is available at https://bit.ly/3hqMxQB from PacerMonitor.com.
About Ridgetop Ag
Ridgetop Ag LLC filed a voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No. 21-11388) on
June 28, 2021, listing under $1 million in both assets and
liabilities. Alan S. Bark, an authorized member, signed the
petition.
Judge Catherine J. Furay oversees the case.
Krekeler Strother, SC serves as the Debtor's legal counsel.
ROMANS HOUSE: Seeks to Borrow up to $500,000 from Pender West
-------------------------------------------------------------
Michael A. McConnell, Chapter 11 Trustee for Romans House, LLC and
Healthcore System Management, LLC, asked the
Bankruptcy Court for permission to obtain up to $500,000 in
postpetition financing from Pender West Credit 1 REIT, L.L.C., with
$230,000 of the Postpetition Financing Facility to be made
available upon entry of the interim order.
The material terms of the Postpetition Financing are:
* Borrowers: Romans House, LLC and Healthcore System Management,
LLC
* Postpetition Lender: Pender West Credit 1 REIT, L.L.C.
* Commitment: Up to $500,000 under a multi-draw term loan
postpetition senior, secured financing facility, of which $230,000
will be funded upon entry of an interim order approving the
Postpetition Financing Facility, with the remainder to be funded
consistent with the Approved Budget upon entry of the final order
approving the Postpetition Financing Facility.
The Postpetition Financing Facility will be secured by a first
priority lien on all of the Borrowers' assets, other than assets
specifically excluded under the terms of the Interim or Final
Financing Order.
* Interest: Interest shall accrue on the Postpetition Loans at 6%
per annum. Accrued, unpaid interest shall be paid by the Borrowers
to the Postpetition Lender on or before the 1st business day of
each month. While an Event of Default exists, at the election of
the Postpetition Lender, the Postpetition Loans shall bear interest
at a rate per annum equal to 2% in excess of the interest rate
* Maturity Date: The earlier of:
(a) August 31, 2021 (or such later date as the Postpetition
Lender in its sole discretion may agree in writing with the
Borrowers);
(b) acceleration of the Postpetition Loans pursuant to this Term
Sheet or the Financing Orders;
(c) 21 days after entry of the Interim Financing Order (or such
later date as the Postpetition Lender in its sole discretion may
agree in writing with the Borrowers) if the Final Financing Order
has not been entered on or prior to such date;
(d) 15 days after entry of the Final Financing Order if the
Final Financing Order has not become a Final Order by such date;
(e) the closing of the Sale Transactions; and
(f) the effective date of a plan of reorganization filed in the
Chapter 11 cases that is confirmed pursuant to an order entered by
the Bankruptcy Court and to which the Postpetition Lender
consents.
The proceeds from the proposed Postpetition Financing Facility will
be used for, among other things, making payments integral to the
Debtors' business operations. The Trustee said that the terms of
the Postpetition Financing Facility are the product of extensive
good faith, arm's-length negotiations.
Consequent to the request to obtain postpetition financing, the
Trustee also asked the Court to:
(a) authorize the granting of security interests, liens, and
superpriority claims to the Postpetition Lender to secure all
obligations of the Debtors under the Postpetition Financing
Facility, including approving such relief on commercial tort claims
and the proceeds thereof;
(b) authorize the use cash collateral and all other Prepetition
Collateral in accordance with the terms of the Interim Financing
Order and the Approved Budget; and
(c) provide adequate protection for the liens and security
interests of Pender West Credit 1 REIT, L.L.C. as Original
Prepetition Lender and Pender Capital Asset Based Lending Fund I,
LP, and Pender ABL I Holdings UBI, LLC, as transferees of and
successors in interest to the Original Prepetition Lender, which
Prepetition Liens are being consensually primed by the Postpetition
Financing Facility and the Carve Out.
The budget provided for $186,360 in total expenses for July and
$186,450 in total expenses for August 2021. A copy of the proposed
budget is available for free as Exhibit B at https://bit.ly/3k7nBzn
from PacerMonitor.com.
As a further material inducement for the Postpetition Lender and
the Prepetition Lenders to agree to the relief provided for in the
Interim Financing Order, the Trustee agrees that the Current
Prepetition Lenders have the right to credit bid the entirety of
(or any portion of) the Prepetition Obligations.
A copy of the motion is available for free at
https://bit.ly/2TZT3Fd from PacerMonitor.com.
Counsel for Pender Capital Asset Based Lending Fund I, LP,
prepetition lender:
Michael J. Barrie, Esq.
Gregory Werkheiser, Esq.
Kevin M. Capuzzi, Esq.
Benesch, Friedlander, Coplan
& Aronoff LLP
1313 North Market Street, Suite 1201
Wilmington, DE 19801
Telephone: (302) 442-7010
Email: mbarrie@beneschlaw.com
gwerkheiser@beneschlaw.com
kcapuzzi@beneschlaw.com
- and -
Frances A. Smith, Esq.
Ross and Smith, P.C.
Plaza of the Americas
700 N. Pearl Street, Suite 1610
Dallas, TX 75201
Telephone: (214) 377-7879
Email: frances.smith@judithwross.com
About Romans House and Healthcore
System Management
Based in Fort Worth, Texas, Romans House, LLC operates Tandy
Village Assisted Living, a continuing care retirement community and
assisted living facility for the elderly in Fort Worth, Texas. Its
affiliate, Healthcore System Management, LLC, operates Vincent
Victoria Village Assisted Living, also an assisted living facility
for the elderly.
Romans House and Healthcore System Management sought Chapter 11
protection (Bankr. N.D. of Texas Case No. 19-45023 and 19-45024 )
on
Dec. 9, 2019. At the time of the filing, Romans House had between
$1 million and $10 million in both assets and liabilities.
Meanwhile, Healthcore System Management disclosed total assets of
up to $10 million and total liabilities of up to $50 million.
The Hon. Edward L. Morris is the case judge.
Demarco Mitchell, PLLC and Levene, Neale, Bender, Yoo & Brill
L.L.P. serve as the Debtors' legal counsel.
Michael McConnell is the Chapter 11 trustee appointed in the
Debtors' bankruptcy cases. The trustee is represented by Kelly
Hart & Hallman, LLP.
RONNYS A-LA-CARTE: Case Summary & 6 Unsecured Creditors
-------------------------------------------------------
Debtor: Ronnys A-La-Carte, Inc.
119 Smokehill Lane
Woodstock, GA 30188
Business Description: Ronnys A-La-Carte, Inc. is a merchant
wholesaler of grocery and related products.
Chapter 11 Petition Date: July 13, 2021
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 21-55239
Judge: Hon. Paul Baisier
Debtor's Counsel: Nathan Juster, Esq.
JONES & WALDEN, LLC
699 Piedmont Avenue NE
Atlanta, GA 30308
Tel: 404-564-9300
Fax: 404-564-9301
E-mail: info@joneswalden.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ronny Shiflet, CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/XJ2FQAY/Ronnys_A-La-Carte_Inc__ganbke-21-55239__0001.0.pdf?mcid=tGE4TAMA
S & A RETAIL: Unsecureds to Recover 2% and 15% Under Plan
---------------------------------------------------------
S & A Retail, Inc., and S & A Distribution, Inc., submitted an
Amended Chapter 11 Plan of Reorganization.
This Plan provides for a comprehensive reorganization of the
Debtors to preserve their going concern value and future business.
Under this Plan, the Debtors, with the assistance of Parent under
the Plan Support Agreement, will (i) pay all of their
Administrative and Priority Claims in full on the Effective Date of
the Plan and (ii) make a distribution to each of their Allowed
General Unsecured Creditors at the conclusion of the Claims
Reconciliation Process in the estimated approximate amount of 2%
for S & A Retail, Inc. and 15% for S & A Distribution, Inc. of each
Allowed General Unsecured Creditor's Claim.
The Plan is a "pot plan," meaning that a lump sum will be available
to Holders of General Unsecured Claims, each of whom will receive a
pro rata distribution from the "pot" that is estimated to be
approximately 2% for S & A Retail, Inc. and 15% for S & A
Distribution, Inc.
All distributions under this Plan will be provided by the Funding
Commitment and certain of the Debtors' cash on hand as of the
Effective Date.
Attorney for the Debtors:
Joseph T. Moldovan
David J. Kozlowski
Morrison Cohen LLP
909 Third Avenue
New York, NY 10022
T: 212-735-8600
F: 212-735-8708
A copy of the Disclosure Statement is available at
https://bit.ly/2SXApgG from Omniagentsolutions, the claims agent.
About S & A Retail
and S & A Distribution
S & A Retail, Inc. and S & A Distribution, Inc., sell Geox branded
footwear and apparel through wholesale and ecommerce distribution
channels. The companies operate two retail stores in New York and
Florida.
S & A Retail and S & A Distribution filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Lead Case No. 21-22174) on March 26, 2021. Bridgette Nally,
secretary, signed the petitions. In the petitions, S & A Retail
disclosed total assets of up to $500,000 and total liabilities of
up to $10 million while S & A Distribution disclosed total assets
of up to $10 million and total liabilities of up to $50 million.
Judge Robert D. Drain oversees the cases.
The Debtors tapped Morrison Cohen, LLP and RK Consultants, LLC as
their legal counsel and financial advisor, respectively. Omni
Agent Solutions is the claims, noticing and administrative agent.
SAMURAI MARTIAL: Files Emergency Bid to Use Cash Collateral
-----------------------------------------------------------
Samurai Martial Sports, Inc. asks the U.S. Bankruptcy Court for the
Southern District of Texas, Houston Division, for authority to use
cash collateral to pay the necessary expenses of its business in
the ordinary course. The Debtor also requests, upon notice and a
hearing, a final order authorizing its continued use of cash
collateral.
The creditors that purport to hold a deeds of trust liens or
security interests in inventory and accounts are Bank United and
Texas Citizens Bank (Small Business Administration). Bank United
and Texas Citizens Bank may have interests in the cash collateral
of the Debtor.
The Debtor proposes to adequately protect the interests of Bank
United and Texas Citizens Bank in the collateral in a number of
ways. The Debtor proposes to grant to Bank United and Texas
Citizens Bank 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 Bank United and Texas Citizens
Bank with information relating to projected revenues and expenses,
actual revenue and expenses, and variances from the interim budget.
This information will enable Bank United and Texas Citizens Bank to
monitor the interests in the cash collateral. Reporting of
financial information is a sufficient form of adequate protection.
A copy of the motion is available at https://bit.ly/3r4Ot4D from
PacerMonitor.com.
About Samurai Martial Sports, Inc.
Samurai Martial Sports, Inc. operates a sports complex, camps,
after school care and related matters. The Debtor sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case
No. 21-32250) on July 2, 2021. In the petition signed by Ihab
Ahmed, president, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Reese Baker, Esq., at Baker & Associates is the Debtor's counsel.
SD IMPORT: Affiliate Select Distributors Wants Cash Access
----------------------------------------------------------
Select Distributors, LLC asked the Bankruptcy Court to authorize
the use of $127,415 of cash collateral to make the necessary
payments, pursuant to the budget, to be able to continue its
business and to avoid immediate and irreparable harm to the estate.
The budget provided for $307,500 in total cost of goods and
$59,915 in total operating expenses for a period of 30 days.
The Debtor believes that on the Petition Date, its cash collateral
consisted of approximately $17,235 in cash and $1,700,000 in
inventory.
Bank of America, N.A. may assert a first priority lien on
substantially all of the Debtor's assets on account of a
prepetition line of credit the Debtor obtained from the Lender. As
of April 30, 2021, the balance on the line of credit is $71,154.
As adequate protection for the Lender's interest in the cash
collateral, the Debtor offers replacement liens in all such types
and descriptions of collateral which may have secured the Lender's
or other secured creditors' pre-petition liabilities and which are
created, acquired or arise after the Petition Date.
According to the Debtor, the Lender has a significant equity
cushion of $1,646,081 given that the value of the cash collateral
is $1,717,235 while the Lender's claim for the debt is only
$71,154.
The Debtor also sought the Court's permission to allow the Debtor
to escrow, on a monthly basis, $10,000 into the client trust
account of its proposed general bankruptcy counsel to pay the
professional fees incurred in connection with the bankruptcy
proceeding to the extent of allowed fees.
A copy of the motion is available for free at
https://bit.ly/3r1eWA2 from PacerMonitor.com.
Counsel for the Debtor:
Michael E. Baum, Esq.
John J. Stockdale, Jr., Esq.
Schafer and Weiner, PLLC
40950 Woodward Ave., Ste. 100
Bloomfield Hills, MI 48304
Telephone: (248)540-3340
Email: jstockdale@schaferandweiner.com
About SD Import, LLC
SD Import, LLC filed a petition under Subchapter V of Chapter 11 of
the Bankruptcy Code (Bankr. E.D. Mich. Case No. 21-45687) on July
6, 2021.
An affiliated company, Select Distributors, LLC -- sdwsale.com --
also sought protection under Subchapter V of Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 21-45689) on July 6.
Select Distributors was established in 2014 to wholesale novelty
items, including vape pens, imported by SD Imports to retailers for
sale to the public. The joint administration of their cases is
pending with the Court.
On the Petition Date, SD Import, LLC estimated up to $50,000 in
assets and $500,000 to $1,000,000 in liabilities.
Select Distributors disclosed up to $50,000 in assets and $100,000
to $500,000 in liabilities. The petitions were signed by Noor
Kestou, authorized representative.
Schafer and Weiner, PLLC serves as the Debtors' counsel. The
Honorable Thomas J. Tucker is assigned to the cases.
SD IMPORT: Mark Shapiro of Steinberg Shapiro Appointed as Trustee
-----------------------------------------------------------------
Andrew R. Vara, United States Trustee for Regions 3 and 9,
appointed Mark. H. Shapiro as Subchapter V Trustee for SD Import,
LLC and Select Distributors, LLC.
Mr. Shapiro is a principal at Steinberg, Shapiro & Clark.
Mr. Shapiro's contact information:
Mark H. Shapiro
Steinberg, Shapiro & Clark
25925 Telegraph Rd., Ste. 203
Southfield, MI 48033
Telephone: (248) 352-4700
Email: shapiro@steinbergshapiro.com
About SD Import, LLC
SD Import, LLC filed a petition under Subchapter V of Chapter 11 of
the Bankruptcy Code (Bankr. E.D. Mich. Case No. 21-45687) on July
6, 2021.
An affiliated company, Select Distributors, LLC -- sdwsale.com --
also sought protection under Subchapter V of Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 21-45689) on July 6.
Select Distributors was established in 2014 to wholesale novelty
items, including vape pens, imported by SD Imports to retailers for
sale to the public. The joint administration of their cases is
pending with the Court.
On the Petition Date, SD Import, LLC estimated up to $50,000 in
assets and $500,000 to $1,000,000 in liabilities.
Select Distributors disclosed up to $50,000 in assets and $100,000
to $500,000 in liabilities. The petitions were signed by Noor
Kestou, authorized representative.
Schafer and Weiner, PLLC serves as the Debtors' counsel. The
Honorable Thomas J. Tucker is assigned to the cases.
SEMILEDS CORP: Incurs $57K Net Loss in Third Quarter
----------------------------------------------------
SemiLEDs Corporation filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $57,000 on $1.44 million of net revenues for the three months
ended May 31, 2021, compared to a net loss of $509,000 on $1.57
million of net revenues for the three months ended May 31, 2020.
For the nine months ended May 31, 2021, the Company reported a net
loss of $1.02 million on $3.36 million of net revenues compared to
a net loss of $481,000 on $4.67 million of net revenues for the
nine months ended May 31, 2020.
As of May 31, 2021, the Company had $15.64 million in total assets,
$14.07 million in total liabilities, and $1.57 million in total
equity.
As of May 31, 2021 and Aug. 31, 2020, the Company had cash and cash
equivalents of $1.7 million and $2.8 million, respectively, which
were predominately held in U.S. dollar denominated demand deposits
and/or money market funds.
As of July 6, 2021, the Company had no available credit facility.
The Company's long-term debt, which consisted of NT dollar
denominated long-term notes, convertible unsecured promissory
notes, and loans from its Chairman and its largest shareholder,
totaled $7.8 million and $7.7 million as of May 31, 2021 and Aug.
31, 2020, respectively.
The Company suffered losses from operations of $2.1 million and
$3.7 million, and net cash used in operating activities of $1.0
million and $3.5 million for the years ended Aug. 31, 2020 and
2019, respectively. The Company said these facts and conditions
raise substantial doubt about the Company's ability to continue as
a going concern, even though gross profit on product sales was $1.6
million for the year ended Aug. 31, 2020 compared to $452,000 for
the year ended Aug. 31, 2019. Loss from operations for the three
and nine months ended May 31, 2021 was $592,000 and $2.1 million,
respectively. Net cash used in operating activities for the nine
months ended May 31, 2021 was $826,000. Moreover, at May 31, 2021,
the Company's cash and cash equivalents had decreased to $1.7
million. Management believes that it has developed a liquidity
plan that, if executed successfully, should provide sufficient
liquidity to meet the Company's obligations as they become due for
a reasonable period of time, and allow the development of its core
business.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1333822/000156459021036359/leds-10q_20210531.htm
About SemiLEDs
Headquartered in Miao-Li County, Taiwan, R.O.C., SemiLEDs --
http://www.semileds.com-- develops and manufactures LED chips and
LED components for general lighting applications, including street
lights and commercial, industrial, system and residential lighting,
along with specialty industrial applications such as ultraviolet
(UV) curing, medical/cosmetic, counterfeit detection, horticulture,
architectural lighting and entertainment lighting.
SemiLEDs reported a net loss of $547,000 for the year ended Aug.
31, 2020, compared to a net loss of $3.56 million for the year
ended Aug. 31, 2019. As of Feb, 28, 2021, the Company had $15.13
million in total assets, $13.51 million in total liabilities, and
$1.62 million in total equity.
KCCW Accountancy Corp., in Diamond Bar, California, the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Nov. 17, 2020, citing that the Company incurred
recurring losses from operations and has an accumulated deficit,
which raises substantial doubt about its ability to continue as a
going concern.
SHARITY MINISTRIES: Taps BMC Group as Administrative Advisor
------------------------------------------------------------
Sharity Ministries, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to hire BMC Group, Inc. as
administrative advisor.
The firm's services include:
(a) assisting in the solicitation, balloting, tabulation and
calculation of votes for purposes of voting on the Debtor's Chapter
11 plan;
(b) preparing any appropriate reports, exhibits and schedules
of information;
(c) preparing an official ballot certification and, if
necessary, testifying in support of the ballot tabulation results;
(d) assisting in the preparation of the Debtor's schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
(e) assisting in preparing claims objections and exhibits,
claims reconciliation and related matters;
(f) facilitating any distributions pursuant to a confirmed
plan of reorganization;
(g) providing confidential on-line workspaces or virtual data
rooms and publishing documents to such workspaces or data rooms;
and
(h) providing other bankruptcy administrative services.
The Debtor paid $25,000 to the firm as a retainer fee.
BMC Group President Tinamarie Fiel 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:
Tinamarie Fiel
BMC Group, Inc.
600 First Avenue
Seattle, WA 98104
About Sharity Ministries Inc.
Established in 2018, Sharity Ministries Inc. is a 501(c)(3)
faith-based nonprofit corporation in Roswell, Ga., that operates a
health care sharing ministry, a medical cost-sharing arrangement
among persons of similarly and sincerely held religious beliefs.
Sharity Ministries sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 21-11001) on July 8, 2021.
As of March 31, 2021, the Debtor had total assets of $4,496,871
and total liabilities of $2,922,214. Judge John T. Dorsey oversees
the case.
Landis Rath & Cobb, LLP and Baker & Hostetler, LLP serve as the
Debtor's legal counsel. BMC Group, Inc. is the claims and noticing
agent and administrative advisor.
SOLSTICE MARKETING: Court Confirms Reorganization Plan
------------------------------------------------------
Judge Martin Glenn has entered an order confirming the Fourth
Amended Chapter 11 Plan of Reorganization of Solstice Marketing
Concepts LLC.
As evidenced by the Ballot Summary, Class 3A and Class 3B, the only
impaired Classes under the Plan, each voted to accept the Plan in
accordance with sections 1124 and 1126 of the Bankruptcy Code.
Specifically, 100% of the votes cast by Class 3A, and 98.18% of the
votes cast by Class 3B (and 99.99% by voting amount), voted to
accept the Plan. Thus, the Plan satisfies Section 1129(a)(10) of
the Bankruptcy Code.
To the extent the Debtor's outstanding loan (or any portion of it)
with Bank of America, N.A., made pursuant to the Paycheck
Protection Program implemented by the United States Small Business
Administration through the Coronavirus Aid, Relief, and Economic
Security Act (the "PPP Loan"), is determined on final
non-reviewable basis to be not forgiven, such unforgiven amount
shall be deemed an Allowed Claim in Class 3B of the Plan without
any requirement for a further order of the Court.
About Solstice Marketing Concepts
Solstice Marketing Concepts LLC -- http://solsticesunglasses.com/
-- is a brick and mortar and online sunglasses retailer.
Solstice Marketing Concepts sought Chapter 11 protection (Bankr.
S.D.N.Y. Case No. 21-10306) on Feb. 17, 2021. Jacen A. Dinoff,
chief restructuring officer, signed the petition. The Debtor was
estimated to have $1 million to $10 million in both assets and
liabilities at the time of the filing.
Judge Martin Glenn oversees the case.
The Debtor tapped Morgan, Lewis & Bockius LLP as bankruptcy
counsel, Retail Consulting Services Inc. as real estate consultant,
and KCP Advisory Group LLC as restructuring advisor.
SOUTH PARK: Seeks to Use Cash Collateral Thru Plan Confirmation
---------------------------------------------------------------
South Park Clubhouse, LTD asked the Bankruptcy Court to use the
cash collateral on an interim basis. The Debtor needs to use the
cash collateral to conduct its day-to-day business.
Subject to the terms, conditions, and agreements with Enterprise
Bank, the Debtor is seeking retroactive authority to use Cash
Collateral from the Petition Date and until confirmation of the
Debtor's Chapter 11 Plan, unless terminated sooner upon 15 business
days' written notice to the Debtor and its counsel due to an Event
of Default.
The Debtor has cash collateral as of the Petition Date consisting
of bank accounts of approximately $200,000, most of which is money
received by the Debtor prepetition from the Payroll Protection
Program and other COVID-19 relief programs. Enterprise Bank has
interest in the cash collateral.
The Enterprise Bank Prepetition Debt
On December 11, 2008, the Debtor borrowed $1,500,000 from
Enterprise Bank. The loan was to mature on June 11, 2024 and had a
variable interest rate of 7.75%. To secure its obligations, the
Debtor executed a security agreement granting Enterprise a security
interest in the Debtor's real and personal Property, including a
security interest in the Debtor's accounts, chattel paper, general
intangibles, and its liquor license. Enterprise has perfected its
lien on the Debtor's Liquor License by the filing of UCC Financing
Statement.
On February 2, 2018, Enterprise and the Debtor executed a Change in
Terms Agreement. The Parties agreed to the increase in current
loan to $832,750 and an extension of the maturity date to June 11,
2033. The Parties also agreed that the interest rate on the loan
would be reduced from 7.75% per annum to 5.75% per annum,
floating.
As of July 6, 2021, the balance on the loans aggregate $869,399.
As additional security for the Loan, on December 11, 2008, M.E.
Morosetti, Ltd., an affiliate of the Debtor, executed an Open-End
Mortgage and Security Agreement encumbering the real property and
improvements commonly known as 2200 Brownsville Road, South Park,
PA 15129. There is an ongoing dispute with Enterprise Bank as to
whether South Park is the rightful owner of the Property as M.E.
Morosetti, Ltd. transferred the Property to the Debtor on April 6,
2021 during the pendency of a mortgage foreclosure and shortly
before Debtor filed for bankruptcy. The Parties are working on a
Settlement to resolve the dispute.
As adequate protection for Enterprise Bank's interest, the Debtor
proposed that:
a. Commencing on May 11, 2021, and on or before the 11th of each
month thereafter, the Debtor will pay the secured creditor $4,893
for principal and interest under the loan, and the Debtor will also
escrow 1/12th of the real estate taxes associated with property.
This is estimated to be an additional $2,900 per month; and
b. The Debtor will provide the secured creditor with a
replacement lien on all property acquired after the commencement of
the case and will not seek to prime any lien of Enterprise during
the case.
The Debtor has also offered to reaffirm and ratify all of the Loan
Documents, and agrees that Enterprise shall have an allowed fully
secured claim for the indebtedness relating to the Loans.
A copy of the motion is available for free at
https://bit.ly/36z4Vk0 from PacerMonitor.com.
The hearing on the motion is scheduled for August 5, 2021 at 10:30
a.m. Responses are due by July 26.
About South Park Clubhouse
South Park Clubhouse, LTD operates a bar and restaurant business
based out of South Park, Pennsylvania. The company sought Chapter
11 protection (Bankr. W.D. Pa. Case No. 21-20856) on April 9, 2021,
disclosing between $500,000 and $1 million in assets and between $1
million and $10 million in liabilities. Mary Morosetti, authorized
representative, signed the petition. Calaiaro Valencik serves as
the Debtor's legal counsel.
SOUTHWIRE CO: S&P Alters Outlook to Pos., Affirms 'BB' ICR
----------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based wire and cable
manufacturer Southwire Co. LLC to positive from stable and affirmed
its 'BB' issuer credit rating and its 'BB+' issue-level rating on
the company's secured term loan.
The positive outlook indicates S&P could raise its rating over the
next 12 months if Southwire maintains its conservative financial
position, while undertaking strategic growth initiatives.
S&P said, "We expect Southwire will maintain significant credit
cushion, giving the company flexibility to pursue growth while
maintaining a strong balance sheet. Over the past several years,
Southwire has generated $1.2 billion of free cash flow and paid
down almost $400 million of its outstanding debt. These efforts
have resulted in Southwire having a positive net cash position (net
of debt) as of the end of 2020, building on an already low adjusted
debt leverage of 0.5x in 2019. While credit metrics are currently
very strong, over the longer term we expect Southwire to maintain
leverage of about 1.5x to 2x, even after any potential large
acquisitions, in line with its conservative financial policy. We
expect Southwire to continue implementing growth initiatives, such
as ongoing investments to improve cost competitiveness and expand
its presence in nonwire and cable markets via its acquisition
strategy. We expect the company to balance this discretionary
spending with cash needs that arise from fluctuations in commodity
prices that can lead to working capital volatility during periods
of rapidly changing metals prices.
"Southwire has experienced robust EBITDA and profitability growth
over the past several years due to ongoing reinvestment into its
asset base and diversifying into new markets and we expect this
trend to continue. Southwire has boosted EBITDA generation by
almost $200 million in the past five years because of cost-position
improvements from significant modernization investments in its
price-sensitive product markets as well as accelerating growth into
higher-margin wire and cable products. These efforts, in addition
to a steady drop in metal input costs in the period from 2018 to
2020, have translated into strong cash flow and profitability
metrics, specifically return on capital, which has averaged above
15% over the past two years. Under current record metals prices, we
expect the company to generate strong dollar margin over metal
costs but working capital will become a use of cash rather than a
source as was the case in recent years." While this is a cyclical
business due to exposure to the construction sector, Southwire has
maintained high utilization rates across its operations and stable
dollar margin over metals costs, achieving consistent EBITDA
margins of about 7%.
At the same time, the company has continued to expand its Tools,
Components and Assembled Solutions business via tuck-in
acquisitions that have improved Southwire's value proposition
platform with customers, created bundle effects with its wire
products and expanded its customer base. As this business grows, it
should improve the overall margin profile of the business, as this
segment generates more than double the EBITDA margins of the wire
and cable segment. Nevertheless, the segment's growth will likely
come through acquisitions, which entail integration risks. S&P also
continues to note the company has concentration risks in its supply
chain because it sources a majority of its copper and aluminum from
a limited number of suppliers and a substantive amount from one.
However, Southwire has a long-standing operating track record, and
so far, has successfully managed its business and inventory with
minimal disruption even accounting for the uncertainty experienced
in the mining industry during the pandemic. The positive outlook
indicates S&P could raise its rating within the next 12 months if
Southwire maintains its conservative financial position, while
undertaking strategic growth initiatives.
S&P could raise its ratings within the next 12 months if:
-- S&P believes the company can sustain adjusted debt to EBITDA of
1.5x under currently robust market conditions, and
-- S&P thinks that adjusted leverage will remain below 3x through
a full business cycle.
S&P could revise the outlook to stable if adjusted leverage rises
quickly above 3x, which it believes could occur if:
-- Southwire deviates from its conservative financial policy,
increasing debt to fund large capital spending or acquisitions.
-- Higher debt amounts coincide with an unexpected downturn that
drives weaker earnings and cash flow, potentially indicating
increased competitive pressure.
SPICE MUST FLOW: Gets OK to Hire Ivey McClellan as Legal Counsel
----------------------------------------------------------------
The Spice Must Flow, LLC received approval from the U.S. Bankruptcy
Court for the Western District of North Carolina to employ Ivey,
McClellan, Gatton & Siegmund, LLP to serve as legal counsel in its
Chapter 11 case.
The firm's services include:
a. advising the Debtor of its powers and duties in the
continued operation of its business and management of its
properties;
b. negotiating, preparing and pursuing confirmation of a
Chapter 11 plan and approval of a disclosure statement and all
reorganization agreements;
c. preparing court papers;
d. representing the Debtor in adversary proceedings;
e. representing the Debtor in litigation related to the case;
f. appearing in court; and
g. performing all other legal services.
The hourly rates for the firm's primary attorneys and paralegals
expected to provide services to Debtor are as follows:
Samantha K. Brumbaugh $400 per hour
Dirk W. Siegmund $400 per hour
Charles M. Ivey, III $500 per hour
Darren McDonough $400 per hour
Melissa Murrell $100 per hour
Tabitha Coltrane $100 per hour
Heather Bray $100 per hour
Samantha Brumbaugh, Esq., a partner at Ivey, disclosed in court
filings that her firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Samantha K. Brumbaugh, Esq.
Ivey, McClellan, Gatton & Siegmund, LLP
100 South Elm Street, Suite 500
Greensboro, NC 27401
Telephone: (336) 274-4658
Facsimile: (336) 274-4540
Email: dws@iveymcclellan.com
About The Spice Must Flow
The Spice Must Flow, LLC, an Asheville, N.C.-based company, sought
protection for relief under Chapter 11 of the Bankruptcy Code
(Bankr. W.D.N.C. Case 21-10135) on July 6, 2021. Shawn Thomas
Johnson, member and manager, signed the petition. At the time of
filing, the Debtor disclosed total assets of up to $10 million and
total liabilities of up to $1 million. Judge George R. Hodges
presides over the case. Ivey, Mcclellan, Siegmund, Brumbaugh &
Mcdonough, LLP, serves as the Debtor's legal counsel.
VCLC HOLDINGS: Claims Will be Paid from Property Sale/Refinance
---------------------------------------------------------------
VCLC Holdings LLC filed with the U.S. Bankruptcy Court for the
Western District of Texas a Disclosure Statement for Small Business
Chapter 11 dated July 13, 2021.
The Debtor acquired residential real property located at 114
Rosemary, Alamo Heights Texas 78209. The Debtor was leasing the
Real Property Asset. Debtor was unable to find a suitable tenant
for the Real Property Asset resulting in a loss of cash flow.
Without positive cash flow, the Debtor was unable to make the
mortgage payment and the secured creditor initiated foreclosure
proceedings. The Debtor believes there is significant equity in
the Real Property Asset and filed this chapter 11 case to prevent
the loss of that equity.
The Debtor believes the Real Property Asset has a value of
$1,100,000.00. The source of this value is the general opinion of a
Texas real estate broker engaged to sell the Real Property Asset.
Class 1 consists of the Secured claim of Lending Home Funding Corp.
At the closing of the refinance loan or the sale of the Real
Property Asset, the Class I claim shall be paid in full with
interest accruing from the Petition Date at a rate of 6.5% per
annum.
Class 2 consists of the Secured claim of Bexar County. At the
closing of the refinance loan or the sale of the Real Property
Asset, the Class 2 claim shall be paid in full with interest
accruing from the Petition Date at a rate of 12% per annum.
The Debtor does not have any General Unsecured Claims.
Equity interest holder Victor Cocchia shall retain all equity
interest.
Payments and distributions under the Plan will be funded by the
closing of the refinance loan or sale of the Real Property Asset.
The Plan Proponent's financial projections show that the Debtor
will have an aggregate annual cash flow resulting from the
refinance or sale, after paying operating expenses and
post-confirmation taxes, of $1,100,000.00. The final Plan payment
is expected to be paid on or before December 1, 2021.
As the Real Property Asset is currently not leased, Debtor does not
expect any cash flow. The funding of the Plan will be derived from
the refinancing or sale of the Real Property Asset.
A full-text copy of the Disclosure Statement dated July 13, 2021,
is available at https://bit.ly/3xHuRWE from PacerMonitor.com at no
charge.
Villa & White can be reached through:
Morris E. White III, Esq.
Villa & White, LLP
1100 NW Loop 410 #802
San Antonio, TX 78213
Phone: (210) 225-4500
Fax: (210) 212-4649
Email: treywhite@villawhite.com
About VCLC Holdings
VCLC Holdings, LLC is a single asset real estate debtor (as defined
in 11 U.S.C. Section 101(51B)). It is the fee simple owner of a
property located at 14 Rosemary Ave., Alamo Heights, Texas, having
an appraised value of $1.10 million.
VCLC Holdings sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Texas Case No. 21-50391) on April 6, 2021. At
the time of the filing, the Debtor disclosed $1.1 million in assets
and $960,000 in liabilities. Judge Craig A. Gargotta oversees the
case. Morris E. White III, Esq., at Villa & White, LLP is the
Debtor's legal counsel.
VIAD CORP: S&P Assigned 'B' Issuer Credit Rating, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to
Experiential leisure travel and live event services provider Viad
Corp. At the same time, S&P assigned its 'B+' issue-level rating
and '2' recovery rating to the proposed senior secured debt.
S&P said, "Our stable outlook reflects our expectation that Viad
will generate strong organic revenue growth and improving EBITDA
over the next 12 months as its business continues to recover from
the pandemic. We expect the company's leverage to decline to the
low-5x area and free operating cash flow (FOCF) to improve to above
breakeven in 2022 as capital expenditures are temporarily
elevated.
"We expect the Pursuit business will continue to recover in the
second half of 2021 as travel restrictions ease and attendance
returns to its attractions and hotel offerings. Pursuit, the
company's leisure attractions and hotel business, was substantially
impaired by pandemic-induced lockdowns and travel restrictions
starting in March 2020. For the full-year 2020, revenue declined
roughly 66%. Over the past 12 months, its locations in Canada, the
U.S., and Iceland have gradually reopened as travel restrictions
have eased and vaccination rates have advanced. Most of this
revenue improvement has been driven by domestic travelers visiting
attractions in their own regions. However, foot traffic has been
continually hindered by a lack of international travelers, which
comprise a substantial portion of typical annual attendance,
particularly in Pursuit's Canadian locations. Nevertheless, with
improving vaccination rates, healthy domestic demand for Pursuit's
U.S. locations, and interprovincial travel restrictions easing in
Canada, we expect the company's revenue will see some benefit in
the second half of its peak summer season this year. Further, we
expect its 2022 summer season will benefit from increased
international attendance as global travel restrictions are lifted.
As a result, we expect revenue to grow about 150% in 2021, further
improving by about 40% in 2022.
The Pursuit business is small, with some revenue concentration, but
benefits from solid EBITDA margins and a healthy mix of
lodging/experiences revenue.
"Our view of the Pursuit business is limited by its niche position
in the leisure and lodging industry. The company owns and operates
a portfolio of 25 hotels, which is relatively small compared with
larger hotel chains we rate. Further, we believe the company does
not exhibit substantial diversity of earnings compared with that of
larger peers since most of its segment EBITDA is generated in one
or two clusters, namely its Banff Jasper collection. Nevertheless,
we believe its market position in its various niche locations
enable it to capture a sizable portion of site-specific tourism
revenue. We also believe the frequent combination of its various
attraction and lodging options provides an opportunity to
cross-sell leisure experiences and generate incremental revenue.
Finally, while small in total revenue size, we view the segment's
EBITDA margins as above average compared with that of the greater
leisure industry, and we believe these margins will contribute to
positive cash flow generation longer term even after the company's
substantial capital expenditure (capex) investments for this
segment.
"GES revenue depends on business spending trends and large social
gatherings, which will recover later than leisure travel, in our
view."
GES operates as a full-service provider for live
events--exhibitions, conferences, and venue services--in North
America and Europe. Over the past 12 months, its services--design,
production, material handling, rigging, etc.--were substantially
impaired as clients canceled and postponed their events due to the
pandemic and related social distancing regulations. In 2020, GES
revenue declined nearly 70%. In response to this substantial drop
in demand, the company chose to exit less-profitable businesses,
sell certain fixed assets, and reduce its cost structure. Demand
for its services is still well below 2019 levels, and S&P believes
a full recovery of this demand will lag similar leisure-oriented
live event businesses due to the dependence of these commercial
live events on business spending and corporate budgeting processes,
which often have long lead times. As a result, S&P expects GES
revenue to grow 5% in 2021 before substantially improving by over
70% in 2022. However, its outlook is somewhat uncertain for GES due
to the uncertainty about the pace of recovery for business travel,
which could take significantly longer than the recovery for leisure
travel.
S&P said, "Our view of the GES business is limited by its very low
EBITDA margins, which we attribute to the company's position in a
fragmented and competitive industry with high variable costs and
substantial pressures from key inputs such as union labor and
material costs. Further, customers in the exhibition and
conferences space are often price sensitive, which leaves limited
opportunity for service providers such as GES to optimize pricing
to expand EBITDA margins. However, while GES operates in a niche
industry, we acknowledge its favorable market positioning as a
leading provider of exhibition services in the U.K. and U.S. It
also benefits from low customer concentration and relatively good
scale as it serves many corporate clients across thousands of
global events. This favorable position, in addition to its
contractual relationships and good renewal rates, lead us to expect
that GES will recover with the exhibition industry and optimize its
wide array of services to better serve its clients in an economic
recovery."
The company's profitability and cash flows will improve as business
slowly rebounds, but credit measures will remain worse than 2019
levels for at least the next two years.
Pro forma for the proposed debt issuance, the company's S&P Global
Ratings-adjusted leverage will remain elevated in the mid-10x area
in 2021 due to expected negative EBITDA generation in the first
half of the year and the muted profitability in the second half.
S&P said, "In 2022, we expect a full year of attendance at its
Pursuit business and increasing volumes of large events in its GES
segment will improve EBTIDA generation such that leverage could
decline to the low-5x area. While we expect leverage to improve in
2022 on strong EBITDA growth, we expect capital expenditures to be
elevated in 2022 as the company invests in growth and makes up for
reduced spending during the pandemic. This will likely result in
minimal FOCF in 2022. "
S&P said, "Our stable outlook reflects our expectation that Viad
will generate strong organic revenue growth and improving EBITDA
generation over the next 12 months as its business continues to
recover from the pandemic. We expect the company's leverage to
decline to the low-5x area and FOCF to improve to above break-even
in 2022 as capital expenditures are temporarily elevated."
S&P could lower the rating on Viad over the next 12 months if its
leverage remains above 6x and its FOCF to debt remains negligible
due to a combination of the following factors:
-- A resurgence in COVID-19 cases leading to renewed social
distancing measures that inhibit leisure travelers and group-based
business spending.
-- Worse-than-expected EBITDA margin expansion due to operational
challenges, substantial startup costs, and unforeseen increases in
input costs.
-- Poor working capital and capex management, leading to volatile
cash flows.
-- Aggressive financial policy decisions such as poorly timed,
large debt-financed acquisitions or substantial debt-funded
distributions to shareholders.
-- Liquidity pressures stemming from tightening covenant cushion.
S&P could raise the rating on Viad over the next 12 months if it
lowers and maintains leverage below 5x and improves its FOCF to
debt above 5% through a combination of the following factors:
-- Strong organic revenue growth due to a resurgence in leisure
travel at its Pursuit locations and better-than-expected business
spending and demand for its GES services.
-- Strong expansion of its EBITDA margin due to sustained cost
efficiencies and pricing optimization tactics.
-- Substantially improved positive cash flow generation due to
working capital and capex optimization.
WHATABRANDS LLC: S&P Affirms 'B' ICR, Outlook Stable
----------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer credit rating on
Whatabrands LLC (Whataburger).
At the same time, S&P assigned its 'B' issue-level and '3' recovery
rating to the company's proposed new senior secured credit
facilities, including its $2.3 billion first-lien term loan and its
$200 million revolver.
The stable outlook reflects S&P's expectation that leverage will
remain very high over the next 12-24 months, even with the
company's organic growth strategy.
Whataburger will use proceeds from the transaction to repay the
company's existing term loan and repurchase equity. S&P expects it
will use about $1 billion of proceeds to repurchase a portion of
its $1.45 billion of preferred shares, which are held by the
sponsor and pay a dividend to shareholders. The company will use
the remaining portion of the debt issuance to repay its existing
term loan and for general corporate purposes.
S&P said, "The transaction will modestly increase its S&P Global
Ratings'-adjusted leverage because we already treat the preferred
shares as debt. Pro forma for the transaction, we expect adjusted
debt to increase around $600 million, resulting in our forecast for
leverage in the low-9x area in 2021. The company has performed
ahead of our earlier expectation with stronger sales driving more
rapid deleveraging than we anticipated following BDT's acquisition
in 2019. We expect steadily declining leverage over the next one to
two years as the company continues to grow."
Whataburger successfully navigated challenges arising from the
COVID-19 pandemic and continues to outperform peers in the quick
service restaurant (QSR) industry. Through the COVID-19 pandemic,
the company maintained its track record of consistent positive
quarterly same-store sales, enabled by its reliance on the
drive-thru and takeout model. Like other QSR operators, the
company's sales benefited from temporary closures of casual dining
and other independent restaurant operators. Whataburger generated
mid- to high-single-digit percent same-store sales growth in the
second half of 2020 and this accelerated to 13.4% in the first
quarter of 2021. EBITDA margin also expanded more than 400 basis
points (bps) in the first quarter because of higher sales,
favorable commodity prices, and the company's expense
rationalization efforts.
Whataburger is primarily a restaurant operator, with only about 14%
of systemwide units currently franchised. This exposes it to
fluctuating commodity and labor costs. S&P expects run rate EBITDA
margin sustained in the low-18% area over the next 12-24 months,
consistent with 2020 levels as rising labor and commodity costs as
well as a normalizing competitive environment put downward pressure
on profitability in the second half of 2021.
S&P said, "We believe the company will accelerate its new unit
development somewhat, which should drive better credit metrics over
time. We expect it to open 25-30 new company-operated and 10-15
franchise units annually, funded with internally generated cash.
While the pace of growth will accelerate somewhat relative to prior
years, we believe its rate of growth will remain modest. Revenue
contribution from new restaurants, along with some price increases
should enable consistent EBITDA growth over the next 12-24 months.
We forecast leverage declining from the low-9x area in 2021 to the
low-8x area in 2022. Despite the very high level of leverage and
higher capital spending than prior years, we believe the company
will continue to generate around $75 million-$100 million of annual
free operating cash flow (FOCF).
"Our stable outlook on Whataburger reflects our expectation for
consistent same-store sales growth and a modestly expanding store
base driving a growing EBITDA base and steadily declining leverage.
We forecast S&P Global Ratings'-adjusted leverage will improve
below 9x in 2022 and the company will continue to comfortably
generate positive FOCF while also investing in growth."
S&P could lower its rating on Whataburger if:
-- S&P views its competitive position less favorably, owing to
persistently negative same-store sales growth and declining
profitability amid heightened competition; or
-- S&P expects leverage to remain higher than 9x, perhaps because
of deteriorating performance or due to an even more aggressive
financial policy.
S&P could raise its rating on Whataburger if:
-- S&P expects S&P Global Ratings'-adjusted debt to EBITDA to
decline and remain lower than 7x. This could occur if the company
executes its strategy successfully and uses available cash to pay
down its outstanding term debt; and
-- S&P does not expect BDT Capital Partners to pursue additional
leveraging transactions in the next one to two years.
ZEFNIK LLC: Gets Approval to Hire Osipov Bigelman as Legal Counsel
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Zefnik, LLC received approval from the U.S. Bankruptcy Court for
the Eastern District of Michigan to hire Osipov Bigelman, P.C. to
serve as legal counsel in its Chapter 11 case.
The attorneys and paralegals of Osipov will be paid as follows:
Jeffrey H. Bigelman, Esq. $375 per hour
Yuliy Osipov, Esq. $375 per hour
Anthony Miller, Esq. $340 per hour
David Miller, Esq. $340 per hour
Paralegal $125 per hour
Osipov Bigelman will also be reimbursed for out-of-pocket expenses
incurred.
The firm received a retainer in the amount of $8,262.
Yuliy Osipov, Esq., a partner at Osipov Bigelman, 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.
Osipov Bigelman can be reached at:
Yuliy Osipov, Esq.
Jeffrey H. Bigelman, Esq.
Osipov Bigelman, P.C.
20700 Civic Center Dr., Ste. 420
Southfield, MI 48076
Tel: (248) 663-1800
Fax: (248) 663-1801
Email: yo@osbig.com
jhb@osbig.com
About Zefnik LLC
Zefnik, LLC, a Rochester, Mich.-based company, filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
E.D. Mich. Case No. 21-44889) on June 7, 2021. Zef Nikprelaj,
authorized representative, signed the petition. At the time of the
filing, the Debtor disclosed total assets of up to $10 million and
total liabilities of up to $1 million. Judge Mark A. Randon
oversees the case. Osipov Bigelman, P.C. represents the Debtor as
legal counsel.
[^] Claims Trading Report - June 2021
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For the month of June, the number of claims that switched hands in
the different Chapter 11 cases are:
No. of Claims
Debtor Transferred
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The Hertz Corporation 91
LATAM Airlines Group S.A. 48
Paper Source, Inc 19
PNW Healthcare Holdings, LLC 16
Lehman Brothers Holdings Inc. 15
CBL & Associates Properties, Inc. 14
FHC Holdings Corporation 13
Brazos Electric Power Cooperative, Inc. 11
Cortlandt Liquidating LLC, et al. 9
Henry Ford Village, Inc. 9
531 Management LLC 8
Grupo Aeromexico, S.A.B. de C.V. 8
Klausner Lumber One LLC 6
Abengoa Bioenergy US Holding LLC 4
DLR Express, Inc. 4
Neiman Marcus Group LTD LLC 4
Summit Family Restaurants Inc. 4
Bluestem Brands, Inc. 2
Bouchard Transportation Co., Inc. 2
Boy Scouts of America 2
DJM Holdings, LTD 2
Forever 21, Inc. 2
Gander Mountain Company 2
Levitt and Sons, LLC, et al. 2
OLD OB, LLC 2
Randolph Hospital, Inc. 2
Rich International Airways, Inc. 2
Southern Rock & Lime, Inc. 2
Sugarloaf Holdings, LLC 2
Alamo Drafthouse Cinemas Holdings, LLC 1
Baumann & Sons Buses, Inc. et al. 1
Baumann Bus Company, Inc. 1
BETTERECYCLING CORPORATION 1
Briggs & Stratton Corporation 1
CEC Entertainment Holdings, LLC 1
Center City Healthcare, LLC 1
CFO Management Holdings, LLC 1
CJ Holding Co. 1
First National Financial PLNG Inc 1
GGI Holdings, LLC 1
John Varvatos Enterprises, Inc. 1
K&W Cafeterias, Inc. 1
KK Fit, Inc. 1
Midtown Anesthesia Group, LLC 1
Midtown Outpatient Surgery Center, LLC 1
Palm Beach Brain and Spine, LLC 1
Purdue Pharma L.P. 1
Rising Phoenix Investments, LLC 1
Sears Holdings Corporation 1
Sherwin Alumina Company, LLC 1
SITO Mobile Solutions, Inc. 1
Notable claim purchasers for the month of June are:
A. In The Hertz Corp.'s case:
Aetos Capital Trade Claims Fund LP
875 Third Avenue, 22ndFloor
New York, NY 10022
Attn: James Cullinane
E-mail: jcullinane@aetoscapital.com
Argo Partners
12 West 37th Street, Ste. 900
New York, NY 10018
Phone: (212) 643-5446
Bradford Capital Holdings, LP
P.O. Box 4353
Clifton New Jersey
Attn: Brian L. Brager
E-mail: bbrager@bradforcapitalmgmt.com
CRG Financial LLC
100 Union Ave
Cresskill, NJ 07626
B. In LatAm Airlines' case:
Citigroup Financial Products Inc.
Attn: Kenneth Keeley
Citigroup Global Markets
388 Greenwich Street,
Trading Tower 6th Floor
New York, NY 10013
Tel: (212) 723-6064
Fair Harbor Capital, LLC
Ansonia Finance Station
P.O. Box 237037
New York, NY 10023
JPMorgan Chase Bank, N.A., a London Branch
25 Bank Street, Canary Wharf
London, E14 5JP, United Kingdom
Attn: Devika Prasad
C. In Paper Source Inc.'s case:
CRG Financial LLC
100 Union Ave
Cresskill, NJ 07626
D. In PNW Healthcare Holdings, LLC's case:
Argo Partners
12 West 37th Street, Ste. 900
New York, NY 10018
Phone: (212) 643-5446
E. In Lehman Brothers Holdings Inc.'s case:
HBK Master Fund L.P.
c/o HBK Services LLC
2300 North Field Street, Suite 2200
Dallas, TX 75201
Tel: (214) 758-6107
*********
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